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

                           E U R O P E

           Thursday, August 2, 2012, Vol. 13, No. 153

                            Headlines



A U S T R I A

VTB BANK: Moody's Assigns 'D-' BFSR; Outlook Stable


A Z E R B A I J A N

* AZERBAIJAN: Moody's Says Banking System Outlook Remains Stable


B E L G I U M

DEXIA CREDIOP: Fitch Lowers Viability Rating to 'ccc'


B U L G A R I A

UNITED BULGARIAN: S&P Affirms 'B-/C' Counterparty Credit Ratings


C Y P R U S

RONIN EUROPE: S&P Assigns 'B/B' Counterparty Credit Ratings


G E R M A N Y

DEWEY & LEBOEUF: German Assets Put Under Prelim. Administration


I R E L A N D

PAN EUROPE 1: Fitch Upgrades Rating on Class H Notes to 'Bsf'
QUINN INSURANCE: Administration to Cost Up to EUR1.65 Billion
TITAN EUROPE 2006-3: Fitch Cuts Rating on Class D Notes to 'Dsf'
TREASURY HOLDINGS: To Appeal Ruling on NAMA Receivership Dispute


I T A L Y

* ITALY: Moody's Says Leasing ABS Performance Deteriorates


K A Z A K H S T A N

KAZKOMMERTSBANK: S&P Affirms 'B+/B' Counterparty Credit Ratings


N O R W A Y

EKSPORTFINANS ASA: Moody's Confirms 'Ba1' Ratings; Outlook Neg.


P O L A N D

PBG SA: Expects Government Loan Request Approval in Six Months


R U S S I A

ALROSA OJSC: Moody's Corrects July 24 Rating Release
INTERNATIONAL BANK: Fitch Affirms 'B-' LT IDR; Outlook Stable
SPURT BANK: Fitch Affirms 'B' Issuer Default Rating; Outlook Neg


S P A I N

BANCO DE SABADELL: Fitch Cuts LT Issuer Default Rating to 'BB+'
NOSTRA EMPRESAS 1: Fitch Cuts Ratings on 3 Note Classes to 'BB+'
TDA 29: Fitch Affirms 'CCsf' Rating on Class D Notes


U K R A I N E

UKRAINIAN AGRARIAN: S&P Assigns 'B' Long-term Corp. Credit Rating


U N I T E D   K I N G D O M

MOUCHEL GROUP: May Default if Debt Restructuring Fails
PETROPLUS HOLDINGS: Coryton Creditors to Recover 6.4% of Claims
* UK: Moody's Says Non-Conforming RMBS Performance Stable in May
* UK: Moody's Says Prime RMBS Performance Remained Stable in May
* UK: Moody's Says Buy-To-Let RMBS Performance Improved in May


X X X X X X X X

* EMEA Consumer Loan ABS Performance Remained Stable in May 2012
* Upcoming Meetings, Conferences and Seminars




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A U S T R I A
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VTB BANK: Moody's Assigns 'D-' BFSR; Outlook Stable
---------------------------------------------------
Moody's Investors Service has assigned the following ratings to
VTB Bank (Austria) (VTBA):

-- D- standalone bank financial strength rating (BFSR), mapping
    into a ba3 standalone credit strength;

-- Baa3 long-term and P-3 short-term local and foreign currency
    deposit ratings.

The outlook on all ratings is stable.

Moody's assessment is primarily based on VTBA's audited
consolidated financial statements for 2011 and previous years
prepared under Austrian GAAP. Moody's analysis refers to the
consolidated VTBA group, which includes VTB Bank (France) and VTB
Bank (Deutschland).

Ratings Rationale

According to the rating agency, VTBA's BFSR is supported by the
bank's ownership by and close integration into Bank VTB (D-/ba3
negative; Baa1 negative), which facilitates VTBA's business
origination and supports its funding and liquidity profile.
Moody's also notes the bank's adequate asset quality and
profitability. Negative rating drivers include the bank's moderate
core capitalization level, its exposure to the inherently higher-
risk counterparties in Russia and other countries in the
Commonwealth of Independent States (CIS), a high appetite for
large transactions, and a wholesale and hence potentially volatile
funding base.

At YE2011, Russian and other CIS corporate exposures accounted for
around 60% of VTBA's loans; a large part of those loans is
facilitated by the parent VTB. The share of Western European
corporate loans increased to 32% in 2011, from 25% in 2010, which
Moody's views as positive, and is likely to grow in line with the
bank's strategy to diversify its country-risk exposures.

Moody's is concerned that the bank's growth has been very
aggressive in 2011 (87% increase of its loan book), driven by an
ROE maximization strategy. While management targets a more prudent
growth in 2012 of around 10%, Moody's sees the risk that last
year's rapid growth could lead to new problem exposures. Moody's
also notes that VTBA's single-client credit risk concentration is
very high, with the aggregate of top 20 corporate exposures
amounting to 380% of Tier 1 capital at YE2011 (2010: 245%). The
largest loans are to blue chip Russian companies, often
collateralized by shares with relatively prudent haircuts.

Apart from corporate banking, VTBA group has a large interbank
business (run predominantly through VTB Bank (Deutschland)) and
provides payment transaction services to around 450 Russian and
CIS banks. These relatively short-term funds typically comprise
around one-half of VTBA's liabilities, which makes the bank's
funding base potentially volatile. To strengthen its funding
profile, VTBA has launched a successful online retail deposits
project in Europe. At April 1, 2012, these deposits exceeded EUR1
billion (around 10% of liabilities) and continued to grow at a
rapid pace.

VTBA is modestly capitalized, with a 6.6% Tier 1 ratio at YE2011
(2010: 9.3%), and a 13.2% total CAR at the same reporting date
(2010: 18.6%). The bank's capital was negatively impacted by the
78% RWA growth during 2011, and a high dividend to VTB. Growth in
2012 should be far less rapid according to management, which
should lead to relatively stable capitalization levels.

Supported Ratings

VTBA's Baa3 long-term global local currency (GLC) deposit rating
is derived from the bank's standalone credit strength of ba3, and
the Baa1 foreign-currency deposit rating of VTB. In its support
assumptions, Moody's has taken VTB's Baa1 fully supported rating,
which incorporates Moody's view of the very high likelihood of
support for VTB and VTBA from the Russian government. Moody's
believes that such support from the Russian government (directly
or indirectly through VTB) is very likely for VTBA and so it
incorporates three notches of support into the deposit ratings of
VTBA.

Moody's support assumptions for VTBA, as well as its exceptional
use of the deposit rating of VTB (rather than its standalone
rating) as the basis of support, takes into account the following
considerations:

* VTBA is highly integrated into VTB, and shares the same name
   and brand;

* VTB's demonstrated intention to deepen the integration of its
   European subsidiaries;

* History of ongoing and extraordinary support provided to VTBA
   from VTB and Russian public institutions.

What Could Change the Ratings Up/Down

What Could Change the Rating - Up

Developments that would likely exert upward pressure on VTBA's
BFSR include: (i) a more diversified business franchise; (ii)
higher capital buffer; (iii) greater diversification in the loan
book; (iv) improvements to the bank's funding profile. An upgrade
of VTBA's deposit ratings is unlikely at this stage, particularly
because the parent Bank VTB has a negative outlook on its Baa1
ratings.

What Could Change the Rating - Down

Downward pressure on the BFSR of VTBA could result from: (i) a
material deterioration in capitalization, and (ii) a substantial
decline in asset quality or liquidity metrics. A downgrade of the
bank's deposit ratings could be triggered by a change in Moody's
support assumptions.

The principal methodology used in this rating was Moody's
Consolidated Global Bank Rating Methodology published in June
2012.

Headquartered in Vienna, Austria, VTBA reported -- as at
December 31, 2011 -- total assets of EUR10.7 billion; the bank's
net income for 2011 amounted to EUR165 million.



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A Z E R B A I J A N
===================


* AZERBAIJAN: Moody's Says Banking System Outlook Remains Stable
----------------------------------------------------------------
The outlook on Azerbaijan's banking system remains stable, says
Moody's Investors Service in a new Banking System Outlook
published on July 31. The key drivers of the outlook are (i) a
favorable operating environment; (ii) modest improvements in asset
quality, albeit from a weak level, and stable capitalization;
(iii) sufficient liquidity buffers; and (iv) marginal improvements
in profitability.

The new report is entitled "Banking System Outlook: Azerbaijan".

The credit-positive factors will remain counterbalanced by the
banking system's fundamental challenges of low economic
diversification, corporate-governance deficiencies and related-
party lending, high dollarization and concentration risk.

Moody's says that over the 12-18 month outlook period, the
supportive macroeconomic conditions will underpin the stable
outlook for the banking sector. Moody's estimates that
Azerbaijan's oil-based economy will produce solid growth in 2012-
13 (5.7% in 2012 and 5.1% in 2013) , following 0.1% in 2011,
driven by oil exports and government spending, which will support
the non-oil economy and credit conditions in the country. In
addition, banking penetration remains low, which provides the
banks with long-term growth opportunities.

The banks' asset quality will improve moderately over the outlook
period, and capital levels will likely remain stable for most
banks in Azerbaijan. The level of problem loans -- non-performing
(90+ days overdue) and restructured -- will decrease to around 13%
of gross loans by year-end 2012, from around 16% at year-end 2011,
supported by the favorable economic environment.

Most banks in Azerbaijan maintain sufficient cushions of liquid
assets. Banks have relatively stable funding bases (predominantly
deposit-funded), with a low reliance on market funding. However,
Moody's notes that retail-depositor confidence is weak and the
banks' access to long-term funding is limited, which increases
banks' liquidity risk in case of market shocks or bank-specific
adverse events.

Most banks improved their profitability metrics in 2011. Moody's
expects higher lending volumes, healthy interest margins and
stable asset quality to lead to marginal improvements in
profitability over the outlook period.



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B E L G I U M
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DEXIA CREDIOP: Fitch Lowers Viability Rating to 'ccc'
-----------------------------------------------------
Fitch Ratings has downgraded Dexia Crediop's (Crediop) Long-term
Issuer Default Rating (IDR) to 'BBB+' from 'A', Short-term IDR to
'F2' from 'F1', Viability Rating (VR) to 'ccc' from 'bb-' and
Support Rating to '2' from '1'.  The Long-term and Short-term IDRs
have been maintained on Rating Watch Negative (RWN).

Rating Action Rationale

Fitch continues to believe that there is a high probability that
Crediop will be supported by its majority owner Dexia
('A+'/Negative) if needed.  As Dexia's Long-term IDR is at its
Support Rating Floor, Fitch believes additional support for Dexia
if required would come from the states of France ('AAA'/Negative),
Belgium ('AA'/Negative) and Luxembourg ('AAA'/Stable).

Although Dexia does not fully own Crediop (a 70% stake is held
through Dexia Credit Local, DCL, 'A+'/Negative), Fitch believes
that it would be difficult for Dexia and Dexia's shareholders not
to support its Italian subsidiary because of the close integration
of the two groups, including about EUR10 billion of funding at
end-2011 extended by the parent group to Crediop.  The agency also
believes that not supporting Crediop might have a negative effect
on Dexia's reputation.

Nonetheless, Fitch has downgraded Crediop's IDRs and Support
Rating because the agency believes that the propensity for Dexia
to provide support for Crediop is weakening as Crediop de-
leverages and reduces new business.

Crediop's IDRs were originally placed on RWN in February 2010,
after Dexia agreed with the European Commission (EC) that it would
sell its stake in Crediop by October 31, 2012.  Crediop's Long-
term and Short-term IDR have been maintained on RWN because the EC
has not yet approved the new restructuring plan Dexia presented in
March 2012, which does not include the requirement to sell Crediop
by end-October 2012.

Crediop's VR has been downgraded because Fitch no longer considers
Crediop's business to be viable in the currently stressed market
conditions.  These have caused it to increase its reliance on the
ECB and on its parent for funding and liquidity needs.  Fitch does
not expect Crediop to be able to become self-sufficient in the
short to medium term, with reliance on the ECB likely to continue
in the foreseeable future.

RATING DRIVERS AND SENSITIVITIES - IDRs and Support Rating

Fitch expects to resolve the RWN once the EC reaches a decision on
Dexia's restructuring plan. While Fitch does not expect a sale of
Crediop by Dexia, the EC could impose restrictions on Dexia's
ability to support its Italian subsidiaries, in which case,
Crediop's IDRs could be downgraded, possibly by several notches.

Furthermore, Dexia's propensity and ability to support Crediop are
also linked to broad sovereign and associated banking sector risks
in Italy, all of which would not be within Dexia's power to
neutralise.  Crediop's Long-term IDR is therefore also sensitive
to changes in Italy's sovereign rating ('A-'/Negative).

In addition, Crediop's IDRs and Support Rating are also sensitive
to changes in Dexia's and DCL's IDRs and to changes in the
propensity of the parent to support Crediop.  Fitch notes that the
propensity to support could change as a result of Crediop's
changed role within the group, which could be triggered by
external factors, including a pronouncement on European state aid
rules.

RATING DRIVERS AND SENSITIVITIES - VR

The bank's VR is sensitive to changes in the bank's funding
conditions and to changes in performance, which could be caused by
a further deterioration in the economic environment as the bank
has to date benefited from low loan impairment charges.  The VR
could be upgraded if the bank successfully implemented its new
business model and improved its profitability and funding
structure materially, which in Fitch's opinion will take
considerable time.  It could be downgraded if profitability,
capitalization, and asset quality deteriorated materially.

The rating actions are as follows:

Crediop

  -- Long-term IDR: downgraded to 'BBB+' from 'A'; RWN maintained
  -- Short-term IDR: downgraded to 'F2' from 'F1'; RWN maintained
  -- Viability Rating: downgraded to 'ccc' from 'bb-'
  -- Support Rating: downgraded to '2' from '1', off RWN



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B U L G A R I A
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UNITED BULGARIAN: S&P Affirms 'B-/C' Counterparty Credit Ratings
----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B-/C' long- and
short-term counterparty credit ratings on United Bulgarian Bank AD
(UBB) and removed them from CreditWatch with negative
implications, where they had been placed on Dec. 3, 2010. The
outlook is negative.

"The rating action reflects our reduced near-term concerns on
UBB's funding profile and asset quality deterioration. UBB's
reliance on funding from its parent, National Bank of Greece (NBG,
CCC/Negative/C), has been reducing over the past months, making it
less vulnerable to any further adverse developments in Greece.
That said, NBG's ownership of UBB still gives rise to potential
contagion risk. In our view, the risk that UBB's asset quality
will continue to deteriorate significantly is less immediate, but
still material. We still consider UBB's asset quality to be weaker
than that of domestic peers because it expanded its lending in the
small and midsize enterprise (SME) and retail sectors before the
2008 financial crisis," S&P said.

"The ratings on UBB reflect the bank's 'bb' anchor, as well as its
'adequate' business position, 'adequate' capital and earnings,
'weak' risk position, 'below-average' funding, and 'moderate'
liquidity, as our criteria define these terms. The stand-alone
credit profile (SACP) is 'b'. The bank's long-term rating is one
notch lower than its SACP to reflect the risks related to its
ownership by NBG. These include potential contagion risk and
damage to UBB's funding and liquidity position," S&P said.

"The long-term rating on UBB is two notches higher than its
parent, indicating its higher SACP, that its funding profile is
now largely independent from the parent, and our view that the
Bulgarian regulator could impose restrictions if needed, which
could prevent UBB from supporting its parent to an extent that
it would impair its own creditworthiness," S&P said.

"NBG maintains ongoing funding support to UBB in the form of
existing subordinated debt, term deposits, and overnight funding.
By March 31, 2012, we consider that UBB has accumulated enough
liquidity to be able to repay most of its obligations to its
parent, if needed, without materially damaging its own financial
profile," S&P said.

"UBB's heightened credit risk reflects several successive years of
rapid loan growth, followed by a testing and sustained economic
recession. We expect the correction in the real estate markets to
continue to weigh on the bank's asset quality and financial
performance as UBB continues to build its loan-loss reserves,
although the pace of the deterioration could slow," S&P said.

"The negative outlook on UBB reflects the negative trend in the
bank's asset quality, as well as our concerns regarding how the
Greek financial crisis could affect it given its ownership.
Several changes could trigger a negative rating action. If
contagion risk were to threaten UBB's ability to fund itself
and parent or government support did not materialize, we would
lower the ratings. A downgrade of NBG could also lead to a similar
action on UBB, unless we assess the subsidiary as well-protected
from its parent's risks," S&P said.

"We could revise our outlook to stable if we observe sustainable
easing of asset quality deterioration and if we see evidence of
further strengthening of the bank's funding and liquidity
position, which would reduce the contagion risk arising from its
lower-rated parent," S&P said.



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C Y P R U S
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RONIN EUROPE: S&P Assigns 'B/B' Counterparty Credit Ratings
-----------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B/B' long- and
short-term counterparty credit ratings to Cyprus-based Ronin
Europe Ltd. The outlook is stable.

"The ratings on Cyprus-based financial company Ronin Europe Ltd.
(Ronin Europe or the company) reflect our assessment of the
creditworthiness of the wider Ronin Partners B.V. group (Ronin or
the group) and its core status within the group. We assign a group
credit profile (GCP) of 'b' to Ronin. This assessment is
constrained by high market and business risks related to the
group's operations in the volatile Russian market, loose
regulation at the group level, and a complex group structure. The
ratings also reflect the group's limited customer base and high
share of nonrecurring earnings, which leads to intrinsic swings in
profitability. These factors are partly mitigated by its
relationship-driven niche customer profile, lower-than-peers'
proprietary risk appetite, and good profitability that compares
favorably with peers'. A sound level of capitalization somewhat
shelters the group from adverse market developments," S&P said.

"Ronin Partners has a complex international group structure,
comprising a number of entities in Russia and abroad, most
carrying the Ronin brand name. The group carries out its
international operations through its 100%-owned Cypriot
subsidiary, Ronin Europe, which is regulated by the Cyprus
Securities and Exchange Commission and is the main group's
operating company and booking center for the bulk of client-driven
transactions. Ronin Europe benefits from Cyprus' favorable tax and
legal regimes as well as from long-standing relationships between
Russian and Cypriot companies. Therefore, we consider Ronin Europe
to be a core subsidiary of the group and equalize the ratings on
the subsidiary with those on the group. Because Ronin Europe
depends heavily on its parent for business, operational support,
and financial continuity, we do not assign a stand-alone credit
profile (SACP) to the company," S&P said.

"We do not factor in any extraordinary external support, either
from the shareholders or from the government, in our assessment of
Ronin's GCP, as we consider this support uncertain," S&P said.

"The group was established in 2008 and registered in The
Netherlands. It is a financial boutique that offers brokerage,
asset management, and corporate finance services to about 100
clients. Its clients are high-net-worth individuals and finance
industry professionals. The minimum client brokerage account holds
US$1 million. As of year-end 2011, the group's total capital stood
at US$99 million," S&P said.

"Ronin is one of the largest traders on the Moscow Interbank
Currency Exchange (MICEX) by volumes, ranking first in bonds
trading on MICEX in the main trading mode, fourth by brokerage
volumes in Russia, and in the top 10 in terms of its clients'
total turnover. Its overall trading volume was US$215.6 billion in
2011," S&P said.

"Ronin's risk profile is dominated by market, liquidity, and
operational risks, accentuated by the unstable operating
environment. To some extent, we consider that the company's lack
of margin lending and the dominance of delivery versus payment
settlements (DVP) mitigate the related risks," S&P said.

"Ronin's exposure to market risk stems from its proprietary bond
portfolio, which was US$45.2 million at Dec. 31, 2011. We
understand that the group follows a conservative trading strategy,
focusing on fairly liquid bonds. Single-name issuer concentrations
are high, reflecting the small size of the portfolio and the
limited number of investments that fit the group's limited risk
appetite in the market. The three largest investments represented
73% of the portfolio or 26% of adjusted total equity at end-
December 2011, although these are government or fairly liquid
Russian bonds. We understand that fixed-income instruments will
continue to dominate Ronin's proprietary portfolio. The group does
not intend to pursue aggressive trading strategies or invest in
complex instruments," S&P said.

"The structure of Ronin's short-term funding reflects the short-
term maturity profile of Ronin's assets. As of year-end 2011,
short-term customer deposits (US$78 million) dominated the
liabilities structure (99%). This absorbed short-term liquidity
excess with its clients. From time to time, Ronin allows a few of
its clients to involve it in cash management. Loans originated for
these purposes stood at US$90 million or 50.2% of total assets at
year-end 2011. One largest borrower accounted for 54% of all loans
originated, highlighting a high level of concentration. These
risks are partly mitigated by the short-term nature of the loans
(in practice, these are overnight loans) and the fact that they
are secured by cash and securities held by the group as a broker
on behalf of these clients. We believe that the group intends to
transfer these cash management services to the bank it plans to
acquire in the medium term. However, the risk of liquidity
shortfalls will persist due to asset and liability maturity
mismatches arising in the course of cash management operations,"
S&P said.

"Ronin's profitability largely depends on the performance of the
still-volatile Russian stock market. Ronin's return on equity
decreased to 10.2% in 2011 from a high 16.5% in 2010 due to a drop
in trading and proprietary investment income from the bond
portfolio. Nevertheless, this result still compares favorably with
that of its peers, many of which incurred losses in 2011 due to
market turbulence. We expect brokerage and cash management
operations, as well as proprietary investments, to continue
dominating the group's revenues," S&P said.

"With total equity of US$99 million and the ratio of adjusted
total equity to adjusted assets amounting to 54% on Dec. 31, 2011,
we believe the group has a good cushion to absorb further
potential market or credit losses," S&P said.

"The stable outlook incorporates our expectation that Ronin and
its core subsidiary Ronin Europe will continue to manage their
investment portfolios conservatively and will pursue a lower-risk
strategy than peers'. Given the company's core status within the
group, and its strong link with and heavy dependence on the
parent, changes to the ratings on Ronin Europe would largely
follow changes in the group's credit standing and our assessment
of the support that the group would provide to the company in case
of need," S&P said.

"Although our ratings on Ronin Europe already incorporate the
possibility of a moderate deterioration in the group's business
and financial profiles, we could revise the GCP downward and, in
turn, lower the ratings on Ronin Europe if the group substantially
increased its risk appetite and adopted more-aggressive growth
strategies that led to a material drop in profitability and
capitalization. We could also lower the ratings on Ronin Europe if
the group suffers significant liquidity shortages, or if the group
evolved in a way that weakened our assessment of the company's
core status," S&P said.

"At this stage we are unlikely to raise the ratings. We would
consider an upgrade if Ronin successfully implemented its
strategy, gradually expanding its customer base and reducing its
earnings volatility and concentrations while improving clarity
around the group structure and maintaining adequate profitability,
capitalization, and liquidity," S&P said.



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G E R M A N Y
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DEWEY & LEBOEUF: German Assets Put Under Prelim. Administration
---------------------------------------------------------------
Karin Matussek at Bloomberg News reports that Dewey & LeBoeuf
LLP's German assets were put under preliminary administration by a
Frankfurt court in a ruling dated July 26.

White & Case attorney Andreas Kleinschmidt was appointed as
preliminary administrator, Bloomberg says, citing a filing
published by the German central insolvency registry.

                      About Dewey & LeBoeuf

New York-based law firm Dewey & LeBoeuf LLP sought Chapter 11
bankruptcy (Bankr. S.D.N.Y. Case No. 12-12321) to complete the
wind-down of its operations.  The firm had struggled with high
debt and partner defections.  Dewey disclosed debt of US$245
million and assets of US$193 million in its chapter 11 filing late
evening on May 29, 2012.

Dewey & LeBoeuf was formed by the 2007 merger of Dewey Ballantine
LLP and LeBoeuf, Lamb, Greene & MacRae LLP.  At its peak, Dewey
employed about 2,000 people with 1,300 lawyers in 25 offices
across the globe.  When it filed for bankruptcy, only 150
employees were left to complete the wind-down of the business.

Dewey's offices in Hong Kong and Beijing are being wound down.
The partners of the separate partnership in England are in process
of winding down the business in London and Paris, and
administration proceedings in England were commenced May 28.  All
lawyers in the Madrid and Brussels offices have departed. Nearly
all of the lawyers and staff of the Frankfurt office have
departed, and the remaining personnel are preparing for the
closure.  The firm's office in Sao Paulo, Brazil, is being
prepared for closure and the liquidation of the firm's local
affiliate.  The partners of the firm in the Johannesburg office,
South Africa, are planning to wind down the practice.

The firm's ownership interest in its practice in Warsaw, Poland,
was sold to the firm of Greenberg Traurig PA on May 11 for
US$6 million.  The Pension benefit Guaranty Corp. took US$2
million of the proceeds as part of a settlement.

Judge Martin Glenn oversees the case.  Albert Togut, Esq., at
Togut, Segal & Segal LLP, represents the Debtor.  Epiq Bankruptcy
Solutions LLC serves as claims and notice agent.  The petition was
signed by Jonathan A. Mitchell, chief restructuring officer.

JPMorgan Chase Bank, N.A., as Revolver Agent on behalf of the
lenders under the Revolver Agreement, hired Kramer Levin Naftalis
& Frankel LLP.  JPMorgan, as Collateral Agent for the Revolver
Lenders and the Noteholders, hired FTI Consulting and Gulf
Atlantic Capital, as financial advisors.  The Noteholders hired
Bingham McCutchen LLP as counsel.

The U.S. Trustee formed two committees -- one to represent
unsecured creditors and the second to represent former Dewey
partners.  The Former Partners hired Tracy L. Klestadt, Esq., and
Sean C. Southard, Esq., at Klestadt & Winters, LLP, as counsel.

Dewey & LeBoeuf has won Court authority to use lenders' cash
collateral through July 31, 2012.



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PAN EUROPE 1: Fitch Upgrades Rating on Class H Notes to 'Bsf'
-------------------------------------------------------------
Fitch Ratings has upgraded DECO Series 2005 - Pan Europe 1 plc's
(PE1) class G commercial mortgage-backed notes, as follows:

  -- EUR2.2 million class G due July 2014 (XS0227116950) upgraded
     to 'Asf' from 'BBsf'; Outlook Stable

  -- EUR4.9 million class H due July 2014 (XS0227117503):'Bsf';
     Rating Watch Evolving (RWE)

The rating actions have been driven by the full repayment of the
Deutsche Post and Gewerberpark loans and the partial repayment of
the AWOBAG loan.  With respect to the outstanding AWOBAG loan
(EUR9.5 million), the servicer has confirmed that it has notarized
a sale of the remaining Kiel portfolio collateral for EUR13
million.  While the sales proceeds should be sufficient to fully
repay the loan in full, uncertainty surrounding issuer level costs
at the October 2012 interest payment date, by when payments are
expected, is reflected by placing the class H notes on RWE.


QUINN INSURANCE: Administration to Cost Up to EUR1.65 Billion
-------------------------------------------------------------
Joe Brennan at Bloomberg News, citing state-owned broadcaster RTE,
reports that the Dublin-based High Court was told on Tuesday Quinn
Insurance Ltd.'s administration may cost as much as
EUR1.65 billion under a worst-case scenario.

According to Bloomberg, Dublin-based RTE reported on its Web site
that Judge Nicholas Kearns was told in court on Tuesday the
administrators of the business estimate that the actual cost will
be between EUR1.1 billion and EUR1.3 billion.

The cost, which will be borne by Irish general insurance
policyholders over a number of years, was originally estimated at
EUR738 million in October, Bloomberg notes.

According to The Irish Times' Aodhan O'Folain, the High Court's
Mr. Justice Nicholas Kearns has described as "truly shocking" the
revelation that EUR1.65 billion may be required from the Insurance
Compensation Fund to meet claims and costs arising from the
administration of Quinn Insurance.

Mr. Justice Nicholas Kearns has sought the "clearest of
explanations" for this information and has directed he be given it
next week, the Irish Times states.  He said that it would be
helpful if somebody from the Central Bank, which is responsible
for regulating the insurance industry, also attended court then,
the Irish Times relates.

He noted the court was originally told no funds would be required
from the fund, then was told last October monies would be required
from the fund and the cost of the administration would be
approximately EUR738 million, a figure later increased to EUR775
million, the Irish Times discloses.

The judge, as cited by the Irish Times, said now, in the space of
a few months, the amount being sought from the fund "had more than
doubled".

According to the Irish Times, lawyers for the administrators,
Michael McAteer and Paul McCann, said a number of factors had led
to the increase in the amount being sought from the Insurance
Compensation Fund, including an increased and more pessimistic
provision for claims, the Euro weakening against sterling and the
reduced value of Quinn Insurance investments in assets, including
property assets.

The judge said he was adjourning to next Tuesday so all matter can
be explained, the Irish Times notes.

                      About Quinn Insurance

Quinn Insurance is owned by Sean Quinn, who was once Ireland's
richest man, and his family.  The company has more than 20% of
the motor and health insurance market in Ireland.  Employing
almost 2,800 people in Britain and Ireland, it was founded in
1996 and entered the UK market in 2004.

As reported by the Troubled Company Reporter-Europe, The Irish
Times said the Financial Regulator put Quinn Insurance into
administration in March 2010 after his office discovered
guarantees had been provided by the insurer's subsidiaries as far
back as 2005 on Quinn Group debts of more than EUR1.2 billion.
The regulator said the guarantees reduced the amount the firm had
in reserve to protect policyholders against possible claims,
putting 1.3 million customers at risk, according to the Irish
Times.


TITAN EUROPE 2006-3: Fitch Cuts Rating on Class D Notes to 'Dsf'
----------------------------------------------------------------
Fitch Ratings has downgraded Titan Europe 2006-3 plc's class D
notes as follows:

  -- EUR23.6 million Class D (XS0257769769) downgraded to 'Dsf'
     from 'Csf'; RE0%
  -- EUR0 million Class E (XS0257770007); 'Dsf' withdrawn
  -- EUR0 million Class F (XS0257770775) 'Dsf' withdrawn

The rating actions reflect the note loss allocation which occurred
on the July interest payment date (IPD), as a result of the
crystallization of losses following the sale of the office
property securing the Weserstrasse loan.  Loss crystallization
reflects the determination of final recovery amounts following the
asset's sale in December 2011.

The EUR63.2 million of losses has led to a complete write-down of
the class E notes, as well as a partial (57%) loss on the Class D
notes.  Fitch expects no recovery to be made on the Class D notes.

The 'Dsf' ratings of the class E and F notes have been withdrawn
because their balances have been written down to zero.


TREASURY HOLDINGS: To Appeal Ruling on NAMA Receivership Dispute
----------------------------------------------------------------
Sarah O'Connor at Reuters reports that Treasury Holdings on
Tuesday said it will mount an appeal against the decision by the
Ireland's High Court to overturn the National Asset Management
Agency's appointment of receivers in relation to 35 properties and
debts of EUR900 million (US$1.1 billion).

The company has 21 days to lodge its appeal with the Supreme
Court, Reuters notes.

The court on Tuesday dismissed Treasury's claims on the grounds
that it entered into an agreement with the NAMA in January, which
stated that it would not object to the appointment of
receivers, Reuters relates.

Treasury Holdings is an Irish property developer.  The company
owns the Westin Hotel in Dublin and the Irish headquarters of
accounting firm PricewaterhouseCoopers.



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


* ITALY: Moody's Says Leasing ABS Performance Deteriorates
----------------------------------------------------------
The performance of the Italian leasing asset-backed securities
(ABS) market deteriorated in the three-month period leading to May
2012, according to the latest index report published by Moody's
Investors Service.

Moody's net default index (as a percentage of original balance +
cumulated replenishments + cumulated additions) rose to 3.1% in
May 2012 from 3% in February 2012. However, this represented a 19%
increase compared to a year earlier.

The total delinquencies index, as of current pool balance, ended
at 5.5% in May 2012 from 5% in February 2012 and represented an
approximate 36% year-over-year increase.

The rise in the total delinquencies index is mainly driven by
transactions that closed between 2008-10, with Zephyros Finance
and F-E Red showing the worst rate at 15.8% and 8.5%,
respectively.

Moody's outlook for Italian leasing ABS is negative (see "European
ABS and RMBS Outlooks: June 2012 Update", June 2012), as the
rating agency expects that Italian GDP will contract by 2.0% in
2012 following a 0.4% rise in 2011 (see "Credit Opinion:
Government of Italy", July 2012). Continued weak domestic demand
in the economic recession will weaken SME revenues and increase
borrower defaults.

The average constant prepayment rate (CPR) contracted to 0.7% in
May 2012, from 1.1% in February 2012.

As of May 2012, the total outstanding pool balance was EUR13.1
billion, which represents a year-on-year increase of around 3.1%.

As of July, two out of 25 outstanding transactions (Locat SV
S.r.l. -- Serie 2006 and Zephyros Finance S.r.l.), reported an
unpaid principal deficiency ledger. As at July 2012, A-Leasing
Finance S.r.l., following the breach of a default rate trigger,
went into accelerated amortisation and all available cash
including the cash in the reserve fund has been used to repay the
class A notes.

Additional information regarding the number of outstanding deals,
number of outstanding rated tranches, the average pool factor and
the average of Moody's performance expectations are now available
in the summary sheet of the Italian leasing Index report:

  http://www.moodys.com/viewresearchdoc.aspx?docid=PBS_SF293542



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


KAZKOMMERTSBANK: S&P Affirms 'B+/B' Counterparty Credit Ratings
---------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on
Kazakhstan-based Kazkommertsbank (JSC) (KKB) to negative from
stable. The 'B+' long-term and 'B' short-term counterparty credit
ratings were affirmed.

"The outlook revision reflects our anticipation that KKB's asset
quality could weaken, notably if loan provisions remain low,
reducing the capacity of the bank's earnings to absorb losses.
KKB's high exposure to the risky real estate and construction
sector weighs on our opinion of asset quality. In our view, before
the economic crisis started in 2008, KKB demonstrated a higher
risk appetite and weaker risk management practices than many of
its Kazakh peers. Growth of new business has slowed in recent
years, meaning that the bank's loan portfolio largely comprises
loans originated before the crisis. Furthermore, loan repayment
and recovery in Kazakhstan is weak in our view," S&P said.

"KKB's asset quality has deteriorated sharply since 2008, although
at a slower pace in the first half 2012. According to regulatory
data, loans more than 90 days overdue increased to 24.3% of total
loans--about Kazakhstani tenge (KZT) 576 billion ($3.8 billion)--
as of July 1, 2012, from 23.2% (KZT557 billion) at year-end 2011
and 19.3% (KZT453 billion) in 2010. This compares poorly with
18.8% for Halyk Savings Bank of Kazakhstan (BB/Stable/B) and 8.3%
for JSC Bank CenterCredit (B+/Stable/B), as well as other rated
midsize Kazakh banks. We believe KKB's nonperforming loans may
increase further over the coming years, especially if the bank
classifies some exposures secured by land as problematic," S&P
said.

"KKB has a high concentration of lending in the high-risk real
estate and construction sector, which was significantly affected
by the economic crisis. Real estate prices have dropped by about
50% from their peak at midyear 2008 and market activity is now
quite weak. At year-end 2011, 45% of KKB's loans were in housing
construction, commercial real estate construction, and real
estate, which compares with 24% for the system. We note that the
value of land and property the bank holds as collateral has fallen
substantially since 2008 and a further decline is possible. This
would put additional pressure on the bank's asset quality," S&P
said.

"We also note that 54% of the loan book was denominated in foreign
currency at year-end 2011, which exceeds the system average of 44%
and might increase KKB's credit risk in the event of unfavorable
exchange rate movements. Consequently, we regard KKB's current
provisioning of 24% of the loan portfolio as of Dec. 31, 2011, as
low. In our view, there is a risk that provisions will be
insufficient to cover the possible further deterioration of asset
quality," S&P said.

"In line with our view of weak earnings prospects for KKB, we have
revised our assessment of its capital and earnings downward to
'moderate' from 'adequate'. Our risk-adjusted capital (RAC) ratio
for the bank at year-end 2011 was 5.9%, before diversification
adjustments, and we project it to remain in the range of 5.5%-6.5%
over the next 12-24 months. However, despite the revised
assessment, capital remains a neutral rating factor, given the
bank's 'bb-' anchor. Currently, the bank meets all regulatory
requirements regarding capital adequacy," S&P said.

"In our view, KKB suffers from weak earnings capacity, due to
depressed margins and the continuously poor performance of the
loan portfolio. KKB reported a return on assets of 0.87% in 2011,
which compares poorly with that of other rated nonrestructured
Kazakh banks. It also reported a pretax profit of KZT31.2 million
(about $211,000), reflecting a further decline in preprovision
earnings, and a KZT66.1 million loan impairment charge (2.4% of
average gross loans). However, given the declining capacity of
earnings to absorb losses, we see a risk that a future rise in
provisioning could meaningfully erode the bank's capital base,"
S&P said.

"We have revised our assessment of the bank's funding to 'average'
from 'below average,' which in our view balances the supportive
role of deposits from state-owned companies with weaker factors,
such as deposit concentrations and the bank's loans-to-deposits
ratio of 142% at year-end 2011, which is weaker than the system
average. By contrast, we have revised our assessment of the
liquidity position to 'moderate' from 'adequate,' reflecting our
view that it has tightened. At the end of 2011, liquid assets
accounted for about 10% of KKB's total assets and the three-month
maturity gap equaled 100% of the bank's capital," S&P said.

"The negative outlook reflects the possibility of a downgrade if
KKB's asset quality deteriorated further and provisioning levels
did not improve, leading us to revise our assessment of the bank's
risk position to 'weak' from 'moderate'," S&P said.

"We could also downgrade the bank if pressure on capital
intensified, with the projected RAC ratio moving to lower than 5%.
This may occur if the projected earnings buffer turned negative or
the funding and liquidity position deteriorated significantly,"
S&P said.

"We could consider revising the outlook to stable if the bank's
asset quality stabilized, notably through more conservative
provisioning. A positive rating action may also follow if the
shareholders were to provide additional capital, substantially
strengthening the bank's loss-absorption capacity," S&P said.



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


EKSPORTFINANS ASA: Moody's Confirms 'Ba1' Ratings; Outlook Neg.
---------------------------------------------------------------
Moody's Investors Service has confirmed Eksportfinans ASA's Ba1
issuer and senior debt ratings as well as its B1(hyb) hybrid
ratings. At the same time, the institution's subordinated debt
ratings were downgraded to Ba3(hyb) from Ba2. The outlook on all
long-term ratings is negative. The short term Not Prime ratings
were affirmed.

The rating actions conclude the review process initiated on 22
November 2011, when the ratings were downgraded following the
Norwegian government's decision to remove Eksportfinans's monopoly
over subsidized loans, resulting in the company running down its
loan portfolio.

Ratings Rationale


The confirmation of Eksportfinans's Ba1 issuer and senior debt
ratings reflects Moody's view that the short-term uncertainty
surrounding Eksportfinans's ability to adequately manage its risks
whilst running down its loan portfolio has decreased. Moody's
prior rating review, initiated in November 2011, had primarily
been concerned with the risk of a disorderly run-down of the
business, following the lodging of a default claim by a noteholder
in December 2011,which could have triggered an acceleration of
some of the institutions' liabilities. In addition, the review
reflected the uncertainty with respect to the provision of
external liquidity from shareholders to enable stability while
running down Eksportfinans loan portfolio, as well as the risks
involved in managing such a process.

The rating agency's view is that the risk that a default
declaration will trigger early repayment of outstanding debt is
now less likely, following the EMTN programme's trustee
communication that it does not propose, in the current
circumstances, to take any further action. Eksportfinans has also
put in place external liquidity facilities (uncommitted repo
facility with DNB Bank ASA and renewed US$2 billion committed repo
line from the three major shareholders), helping address any
short-duration liquidity gaps that may emerge as the business runs
down. In addition, in February 2012 the Norwegian regulator
(Finanstilsynet) granted the institution extended time to comply
with the large exposure regulation (CRD in Basel III), conditional
upon it not increasing its non-compliant exposures. Moody's takes
comfort that these positive recent developments will help
Eksportfinans preserve the value of its assets for its
bondholders. Moody's also continues to regard Eksportfinans's
assets -- both its securities book and its loan book -- as a good
cushion in case of temporary liquidity shortfall, and note that
the institution has successfully reduced its liabilities by around
20% in the twelve months to end-March 2012.

Moody's negative outlook on Eksportfinans's long-term ratings
reflects the rating agency's view that, despite the positive
developments mentioned above, the institution continues to face
substantial longer-term risks while running down its loan
portfolio, especially due to its limited access to capital
markets. The negative outlook in particular reflects the continued
legal risks surrounding this process, such as the continued,
albeit reduced, risk of a default declaration triggering an
acceleration of liabilities. Moody's notes however that a
continuation of Eksportfinans' successful run-down of its
liabilities may see the outlook revert to stable.

In line with Moody's methodology for government-related issuers,
Eksportfinans's Ba1 issuer and senior debt rating is at the same
level as its Baseline Credit Assessment of 11 (on a scale of 1 to
21, where 1 represents the lowest credit risk). Following the
government's decision not to include Eksportfinans in its solution
for the export industry, Moody's does not factor any systemic
support into Eksportfinans's issuer and senior debt rating.

Hybrid Ratings

Moody's also downgraded Eksportfinans's subordinated debt ratings
to Ba3(hyb) and (P)Ba3 from Ba2 and (P)Ba2. The rating action on
those securities reflects the rating agency's view that
Eksportfinans' running down its loan portfolio leads to a lower
level of support for such subordinated securities, in line with
Moody's ratings for such securities issued by other Norwegian
financial institutions.

Moody's has also attached a hybrid (hyb) indicator to the dated
subordinated debt ratings of Eksportfinans.

Principal Methodologies

The principal methodology used in rating Eksportfinans is
Government-Related Issuers: Methodology Update published in July
2010.

Headquartered in Oslo, Norway, Eksportfinans reported total assets
of around NOK188 billion (EUR25 billion) at end-March 2012.



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


PBG SA: Expects Government Loan Request Approval in Six Months
--------------------------------------------------------------
Marta Waldoch and Piotr Bujnicki at Bloomberg News report that PBG
SA Chief Executive Officer Wieslaw Rozacki said the company, which
is seeking state aid, expects a government fund to decide on its
loan request "no sooner" than in six months.

PBG filed for a loan from state fund ARP on July 27, seeking
financing to resume operations, Bloomberg relates.

According to Bloomberg, Roma Sarzynska-Przeciechowska, an ARP
spokeswoman, said the state fund may decide on the request in
three weeks providing that the motion is "complete and correct".
She said the decision will still have to be approved by the
European Commission, Bloomberg notes.

PBG SA is Poland's third largest builder.



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


ALROSA OJSC: Moody's Corrects July 24 Rating Release
----------------------------------------------------
Moody's Investors Service issued a correction to the July 24,
2012, rating release of Alrosa OJSC.

Moody's changed the outlook on Alrosa OJSC ratings to positive
from stable. The company's Ba3 corporate family rating (CFR)
remains unchanged. At the same time, Moody's raised Alrosa's
baseline credit assessment (BCA) to b2 from b3, following
improvements in sales and profitability on the back of rising
diamond prices, affirmed the Ba3 (LGD 4, 50%) rating on the Alrosa
Finance S.A.'s 8.875% US$500 million senior unsecured guaranteed
notes due 2014 and assigned a definitive Ba3 (LGD4, 50%) rating to
its 7.75% US$1.0 billion senior unsecured guaranteed notes due
2020.

Ratings Rationale

The outlook change to positive reflects Moody's expectations that
(1) Alrosa will be able to partially dispose of assets related to
its Timir iron ore project by year-end 2012; and (2) the strong
pricing environment for diamonds will continue over the next 12-18
months, despite implicit market volatility. The positive outlook
is further supported by the company's substantial global market
share and low cost reserve base.

The BCA rise is driven by improvements in the diamond market in
2011 and the first quarter of 2012. The average price of diamonds
sold by the company rose to US$130/carat in 2011 from US$84/carat
in 2010 on broadly flat volumes compared to the previous year.
This rise positively affected Alrosa's sales and profitability in
2011, despite a weak fourth quarter. The continued positive
pricing environment in Q1 2012 sets up expectations for a
sustained robust performance in the diamond market over the coming
months. Moody's expects that the current relatively favourable
diamond market environment will (1) persist throughout 2012, due
to strong jewellery sector demand driven by demand from the US and
Southeast Asia; and (2) underpin strong cash flow generation in
2012.

Uncertainty over the company's disposal/development of non-core
assets abated to some extent. The company is in the final stages
of negotiation regarding its disposal of a 51% stake in the Timir
iron ore project to EVRAZ (Ba3 stable), which is likely to be
signed and closed by year-end 2012 and should generate about
US$170 million in revenue. Moody's expects that estimated capital
expenditure (capex) for Timir project will be US$30 million in
2012 and US$2 billion in total to be spread over the next dozen
years.

Negotiations over the disposal of part of Alrosa's 100% interest
in ZAO Geotransgas and Urengoyskaya Gas Company (the "Gas Assets")
continue and uncertainty over the terms and timing of this
transaction will continue to exercise pressure on the company's
liquidity and debt levels. In Q1 2012, Alrosa re-acquired 90% of
the Gas Assets held by VTB-affiliated companies for US$1,090
million and 10% from minority owners for US$100 million. In the
near term, Moody's expects that the company will maintain its
current debt levels. Moreover, the rating agency will not
incorporate in its assessment of the BCA the disposal of the Gas
Assets and the concurrent reduction in debt.

The improvement of the company's credit profile in the short-term
will continue to remain the function of the terms and timing of
the gas assets disposal. In the long-term, Moody's expects that
capex associated with the development of the Gas Assets will be
US$130 million in 2012 and about US$400 million thereafter spread
over four years (2013-16). Moreover, Moody's does not expect this
capex to exert substantial negative pressure on the company's cash
flows, even if it fails to find a partner for the Gas Assets. That
said, possession of the Gas Assets provides no synergies with the
company's current business profile and will expose it to
unfamiliar risks (including geological risks and the risk of not
getting the access to the pipeline system of OJSC Gazprom (Baa1
stable) upon finishing its five-kilometre pipeline connecting the
gas field to the Gazprom pipeline).

What Could Change the Rating - Up

The maintenance of leverage (debt to EBITDA) below 3x and
sustained free cash flow (FCF) to debt above 10% would put upward
pressure on Alrosa's ratings. However, while the BCA takes into
account the sensitivity of the company's financial performance to
diamond prices, it also depends on how the company structures and
develops its non-core assets going forward.

What Could Change the Rating - Down

Given the current robust diamond market and the support of the
government, Alrosa's Ba3 rating is solidly positioned. However, a
significant deterioration in the diamond market, greatly increased
capex, a material increase in Alrosa's leverage or a significant
increase in shareholder distributions could adversely affect the
BCA. Furthermore, Moody's may revise the ratings assigned to the
bonds should Alrosa incur secured debt or make significant use of
trade finance.

As at March 31, 2012, Alrosa had about US$547 million of cash and
about US$4,328 million of debt with the ratio of Moody's adjusted
total debt/EBITDA standing at 2.0x, which is in line with the
management team's prior statements about maintaining this ratio at
not greater than 2x. That said, the increased debt levels still
provide comfortable headroom for the company within its current b2
BCA.

Alrosa's liquidity position remains constrained as the company
faces the need to refinance about US$1.7 billion of debt maturing
over the next 12 months, including European Commercial Papers
maturing in Q4 2012 (US$725 million) and Q1 2013 (US$315 million).
Moody's concerns about the company's liquidity position are
tempered by evidence of the state-owned VTB bank's ongoing
support. Moody's view is that the government will continue to
indirectly support the operations of the company both through
direct purchases of diamonds and through support provided by
state-owned financial institutions. Given Alrosa's liquidity
profile, the Ba3 rating is heavily reliant upon the government
continuing to provide support through these avenues.

Principal Methodologies

The principal methodology used in rating Alrosa OJSC was the
Global Mining Industry Methodology published in May 2009. Other
methodologies used include Loss Given Default for Speculative-
Grade Non-Financial Companies in the U.S., Canada and EMEA
published in June 2009 (and/or) the Government-Related Issuers
methodology published in July 2010.

Alrosa mines, markets and distributes diamonds. It produced 34.6
million carats in 2011 (2010: 34.3 million carats), giving it a
world-leading 26% market share of diamond production. Alrosa
operates five mining complexes in the Sakha (Yakutia) Republic in
Eastern Siberia, one mine in Arkhangelsk, and has a 32.8% interest
in Catoca Mining Company Ltd in Angola. In 2011, Alrosa reported
revenues of RUB138 billion (2010: RUB113 billion) and total assets
of RUB241 billion (2010: RUB222 billion). The company's principal
shareholders are the governments of the Russian Federation (50.9%
shareholding) and the Sakha (Yakutia) Republic (32% share).


INTERNATIONAL BANK: Fitch Affirms 'B-' LT IDR; Outlook Stable
-------------------------------------------------------------
Fitch Ratings has affirmed the Long-term Issuer Default Ratings
(IDRs) of International Bank of Saint Petersburg (IBSP) at 'B-'
with a Stable Outlook.

Rating Action Rationale and Rating Drivers

The affirmation of IBSP's ratings at their current level reflects
the bank's weak capital position and low asset quality, narrow
franchise, concentrated balance-sheet, corporate governance
concerns and material illiquid non-core assets.  The ratings also
take into account IBSP's comfortable liquidity position.

IBSP reported non-performing loans (NPLs; loans more than 90 days
overdue) at a low 2.4% of the end-2011 loan book, however, this
should be considered together with the high 19.3% share of
restructured and rolled-over exposures.  At the same time, the
loan impairment reserves (LIR) comprised only 8% of gross IFRS
loans at end-2011, while under local GAAP the bank's
capitalization allowed this to be increased to only 8.6% before
the regulatory capital ratio would decrease to 10%.  This is a
limited buffer, in Fitch's view, given the uncertain prospects of
the restructured exposures, as well as the concentrated loan book
(the top 20 exposures accounted for 47% of gross loans at end-
Q112) being largely unseasoned (most of them have bullet
repayments).

Furthermore, capitalization is undermined by material property
investments (11% of Fitch core capital; FCC) and certain interbank
placements (91% of FCC) which, Fitch believes, may be fiduciary in
nature.  Fitch is also concerned about the high level of real
estate and construction exposure (269% of FCC) and related party
lending (207% of FCC) at end-2011, although the latter should have
reduced considerably in H112 following the sale of exposures to
leasing group Interleasing.

IBSP's concentrated funding base (the top 20 names represented 69%
of customer accounts at end-Q112) is short term and potentially
volatile.  Mitigating this to a degree, the bank had a significant
liquidity cushion (cash and equivalents, liquid securities and
short-term interbank loans net of restricted placements), which
covered 27% of customer accounts at end-5M12.

Rating Sensitivities

IBSP's ratings may be downgraded if asset quality and
capitalization deteriorate significantly.  Upward pressure on the
ratings could result from higher business diversification, and
improved quantum and quality of capitalization.

The rating actions are as follows:

  -- Long-term foreign currency IDR: affirmed at 'B-',
     Outlook Stable
  -- Short Term IDR: affirmed at 'B'
  -- Long-term local currency IDR: affirmed at 'B-',
     Outlook Stable
  -- Viability Rating: affirmed at 'b-'
  -- Support Rating: affirmed at '5'
  -- Support Rating Floor: affirmed at 'No Floor'
  -- National Long-term rating: affirmed at 'BB-(rus)',
     Outlook Stable


SPURT BANK: Fitch Affirms 'B' Issuer Default Rating; Outlook Neg
----------------------------------------------------------------
Fitch Ratings has affirmed the foreign-currency Issuer Default
Ratings (IDR) of JSC Spurt Bank (Spurt) at 'B', and BTA-Kazan
(BTAK) at 'B-'.  The Outlook for Spurt's IDR is Stable.  The
Outlook on BTAK was revised to Negative from Stable.

Rating Action Rationale and Drivers: Spurt

Spurt's ratings reflect its narrow franchise, which, in Fitch's
view, to a significant degree is driven by the shareholder's
connections with local authorities/large businesses.  Fitch
believes that the negatives of these relationships, such as
exposure to certain relatively low-yielding construction projects
potentially linked to the local administration, so far has been
counterbalanced by the availability of funding from large local
(including state-owned) companies.  Reflecting the above,
profitability is weak, with the bank seeking higher margins in
retail lending where it still has low expertise, and the depositor
base is highly concentrated, giving rise to potential liquidity
risk.

While reported NPLs and restructured loans were a low 2.3% and 4%,
respectively, of end-Q112 gross loans, there is substantial
downside risk, in particular from exposures to construction
projects (13% of gross loans), although partly mitigated by the
links of some of Spurt's borrowers to the local authorities,
particularly those benefiting from increased budgetary capital
outlays in preparation for the Universiade sports event.
Additionally, credit risks may stem from rapid growth of retail
lending (65% in 2011) due to limited experience and untested
collection capacity.

Spurt's loss-absorption capacity is very limited: at end-Q112 the
bank was able to create statutory impairment reserves up to a
maximum 8.1% of the loan book, which is quite a modest level
considering its high borrower concentrations and risks of retail
lending.

Capitalization has been supported by internal earnings generation
and subordinated debt issues, including from the EBRD (which owns
a 28% stake in the bank).  An additional subordinated loan may be
received in H212; however, Fitch estimates that it will only keep
the bank's regulatory capital ratio at around the current level
(14.5% at end-H112) taking into account Spurt's growth appetite.

Liquidity is vulnerable, especially considering the high
concentration on the largest five depositors (28% of total
customer funds) and the bank's limited volume of available liquid
assets sufficient to cover an outflow of only 14% of customer
accounts.

RATING SENSITIVITIES: Spurt

Spurt's ratings may be downgraded in case of a weakening of
relations with the local authorities and prominent domestic
corporates.  A negative credit action could also occur if
liquidity tightens further or asset quality deteriorates putting
pressure on capitalization, and the latter is not supported by
equity injections.  An upgrade of the ratings is unlikely in the
near-term, although market franchise growth and greater
diversification, combined with stronger capital and liquidity
positions, would reduce downside rating risk.

RATING ACTION RATIONALE: BTA-Kazan

The revision of BTA-Kazan's (BTAK) Outlook to Negative reflects
its weakened performance (RUB142m loss under IFRS in 2011) and
uncertainty as to the bank's ability to achieve a sustainable
turnaround in the near term given cost inefficiencies and
potential weakening of asset quality.  It also reflects current
uncertainty about the prospective shareholder structure and
strategy, as well in respect to the shareholders' willingness to
provide additional capital, which, given the negative
profitability trend, may eventually be required.

RATING DRIVERS: BTA--Kazan

The bank's 'B-' Long-term IDR continues to reflect BTA-Kazan's
weak franchise and asset quality, high exposure to project
finance, modest capitalization and vulnerable liquidity.

The bank's negative bottom line result is largely driven by high
rental and personnel costs partly explained by the recent
development of its retail business.  The bank is unlikely to
return to profitability during 2012, given the low asset growth
expected for the rest of the year.

Fitch is concerned with the on-going changes in the bank's
shareholding structure. While the most substantial 47% stake is
still controlled by Kazakhstan-based BTA Bank (Long-term IDR:
'RD'), the agency understands that the remaining shares are in the
hands of a group of local business partners, who are currently in
the process of splitting up their assets.  The bank expects that a
clearer ownership structure and strategy may emerge after the
supervisory board meeting in end-August 2012.

BTAK's weak loan quality is indicated by NPLs and restructured
loans of, respectively, 4.4% and 21%, at end-Q112.  At the same
time, loan impairment reserves covered NPLs and renegotiated loans
by only 16.5%.  The bank's top 25 loan exposures (3.4x equity)
were largely represented by real estate projects, which are
characterized by long grace periods and low interest rates, which
weighs on the bank's pre-impairment profitability and potentially
asset quality.  At the same time, the bank's loss absorption
capacity remains quite low - it could increase loan impairment
reserves up to only 8.9% of the gross loan book without breaching
regulatory capital requirements.

The bank's regulatory total capital ratio increased to 13% at end-
Q212 from a low 10.5% at end-Q112 mainly due to a RUB400m
subordinated loan received in June 2012.  BTAK expects another
RUB250m subordinated debt contribution in H212 from one of its
current shareholders; however, the quality of this capital is
undermined by significant lending (49% of FCC at end-Q112) to the
businesses of the same shareholder.

Liquidity is tight with BTAK's liquid assets (net of potential
cash uses) covering 12.5% of total customer accounts at end-6M12,
exposing the bank to risks of volatility in its small and
potentially flighty retail customer base.  The risks are somewhat
mitigated by quite moderate depositor concentrations and
additional liquidity which can be sourced from selling of blue-
chip equities (with fair value covering a further 14% of the
depositor base at end-Q212).

RATING SENSITIVITIES: BTA-Kazan

The ratings may be downgraded in case of BTAK's further equity
erosion and /or weakening of the shareholders' support stance.
The Outlook may be revised back to Stable if the bank returns to
profitable operations without significant risk of relapses due to,
for example, asset quality issues, and shareholders demonstrate
commitment in the form of equity support for the bank.

The rating actions are as follows:

Spurt

  -- Long-term foreign currency IDR affirmed at 'B'; Outlook
     Stable;
  -- Short-term IDR affirmed at 'B';
  -- Viability Rating affirmed at 'b';
  -- Support Rating affirmed at '5';
  -- Support Rating Floor affirmed at 'No Floor';
  -- National Long-term rating affirmed at 'BBB-(rus)'; Outlook
     Stable.

BTAK

  -- Long-term foreign currency IDR affirmed at 'B-'; Outlook
     revised to Negative from Stable;
  -- Short-term IDR affirmed at 'B';
  -- Viability Rating affirmed at 'b-';
  -- Support Rating affirmed at '5';
  -- Support Rating Floor affirmed at 'No Floor';
  -- National Long-term rating affirmed at 'BB-(RUS)'; Outlook
     revised to Negative from Stable.



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


BANCO DE SABADELL: Fitch Cuts LT Issuer Default Rating to 'BB+'
---------------------------------------------------------------
Fitch Ratings has downgraded Banco de Sabadell's (Sabadell) Long-
term Issuer Default Rating (IDR) to 'BB+' from 'BBB', Short-term
IDR to 'B' from 'F3' and Viability Rating (VR) to 'bb+' from
'bbb'.  Simultaneously, Fitch has removed Sabadell's IDRs and VR
from Rating Watch Negative (RWN).  The agency has affirmed
Sabadell's Support Rating of '3' and Support Rating Floor (SRF) of
'BB+'.  The Outlook on Sabadell's Long-term IDR is Stable because
it is based on its standalone strength (ie, its VR).

The rating actions complete a ratings review by Fitch and follow
the formalization of Sabadell's acquisition of Banco CAM S.A.U.
(Banco CAM) on 1 June 2012 upon receiving European Commission
approval of the transaction.  The transaction included a EUR21bn
asset protection scheme (APS), net of reserves, covering around
one-third of Banco CAM's assets and a EUR5.2bn capital injection,
both granted by Spain's Deposit Guarantee Fund (FGD).  Under the
APS, the FGD covers 80% of losses that arise, with Sabadell
absorbing the remaining 20%.

RATING ACTION RATIONALE AND DRIVERS - IDRs and VR

The downgrades of Sabadell's IDRs and VR reflect the heightened
risks to the bank's financial profile arising from the prolonged
recession and real estate crisis in Spain and weakened
counterparty/investor confidence in Spain and its banking sector.
While Sabadell has a good track record of integrating banks, Fitch
believes that turning around Banco CAM's franchise will be
challenging in such a difficult climate, given its size and
particularly as its deposit franchise deteriorated following its
intervention by Spain's Fund for Orderly Bank Restructuring.

Most of the downside risk relating to Banco CAM's poorest quality
assets is covered by the APS, while existing reserves held against
the stock of group impaired loans are considered by Fitch to be
above average for the sector and, at 85% as of end-June 2012,
likely to be sufficient.  Fitch's concerns therefore relate to the
impact of Spain's recession and property crisis on the group's
performing loans not covered by the Banco CAM APS and to the
additional risks to earnings arising for example from the need to
deleverage and compete for deposits.

Fitch acknowledges that Sabadell has been able to increase retail
funding in recent years.  However, the funding challenges it is
currently facing, like many other Spanish banks, arise from
intense deposit competition in Spain, a tough deleveraging
environment and Fitch's expectation that access to public debt
markets is likely to remain weak or at best volatile.  Sabadell
has quite a high level of wholesale funding and asset encumbrance.
The group's central bank funding (equivalent to 14% of total
assets) is in part a legacy of pre-acquisition deposit withdrawals
from Banco CAM.  Fitch estimates that around EUR14bn of its
central bank funding is used for carry trade purposes, acting as a
useful prop -- albeit only temporary -- to margins.

Fitch considers the group's unencumbered liquid assets to
represent a moderate buffer against unexpected liquidity shocks.
Nonetheless, they are sufficient to cover the bank's short-term
wholesale funds.  The structure of the APS (not pre-funded) also
acts as a source of future liquidity when losses are recognized.

Sabadell's VR also considers an enlarged retail franchise, lower
single-name risk concentration and higher loss-absorption capacity
due to the benefits of the APS and the FGD capital injection.
Sabadell's Fitch core capital/weighted risks ratio, which excludes
mandatory convertible bonds, was low at below 7% at end-H112.  It
will imminently benefit from the exchange of up to EUR1.6bn of
Banco CAM upper Tier 2 and preferred stock into equity.

RATING SENSITIVITIES - VR

Sabadell's VR is still sensitive to an even more protracted and
deeper recessionary environment in Spain than currently assumed
and/or a failure to rebalance its funding mix towards retail
sources.  It could be downgraded if, for example, credit losses,
in particular from non-APS risks, exceed Fitch's expectations
and/or due to unforeseen problems in the integration process or an
unanticipated liquidity shock.

Conversely, a stabilization in the asset quality outlook, most
likely arising from an improvement in Spain's economic prospects
and/or a material rebalancing of the bank's funding mix and
strengthening of its liquidity buffers could lead to Sabadell's VR
being upgraded.  This would also trigger an upgrade of the bank's
IDRs.

RATING DRIVERS AND SENSITIVITIES - Support Rating and SRF

The affirmation of Sabadell's Support Rating and SRF reflects
Fitch's opinion that there is a moderate probability of long-term
sovereign support being available to the enlarged bank, if needed.
In the near term, Sabadell is technically eligible to benefit from
the EUR100 billion banking sector support package for Spanish
banks, should it be needed.  However, as well as introducing
legislation to enforce losses onto subordinated debt and preferred
stock of banks that need public aid, by end-August the Spanish
authorities are also required to introduce legislation to
strengthen the bank resolution framework.

The Support Rating and SRF are sensitive to a potential downgrade
of the Spanish sovereign rating or to a change in Fitch's
assumptions around the propensity of the authorities to support
the bank.  A downgrade of Sabadell's SRF would only trigger a
downgrade of its Long-term IDR if the bank's VR was also
downgraded.

SUBSIDIARY COMPANY RATING DRIVERS AND SENSITIVITIES

Banco CAM is now a 100%-owned bank subsidiary of Sabadell and is
fully consolidated into the group accounts.  Its IDRs and debt
ratings are aligned with those of Sabadell, because i) Fitch
considers it a core subsidiary of the group and ii) it will be
legally merged with Sabadell in Q412 at which point it will cease
to exist as a legal entity.

Because Fitch believes Banco CAM can no longer be viewed
meaningfully as a standalone entity, its VR of 'f' and SRF of
'BB+' have been affirmed, removed from Rating Watch Positive (RWP)
and withdrawn as a result of the corporate reorganization. Until
Banco CAM ceases to exist, its IDRs are sensitive to the same
factors that might drive a change in Sabadell's IDRs.

SUBORDINATED DEBT AND OTHER HYBRID SECURITIES

Subordinated debt and preferred stock issued by Sabadell and
Sabadell International Equity Limited are notched down from
Sabadell's VR of 'bb+', in accordance with Fitch's assessment of
each instrument's respective non-performance and relative loss
severity risk profiles.  Their ratings are primarily sensitive to
any change in Sabadell's VR.

Banco CAM's Upper Tier 2 instruments and preferred stock are still
not performing but have been upgraded to 'B-' from 'CC' and 'CCC'
from 'C', respectively, reflecting a higher likelihood of coupons
being resumed on these instruments post-merger.

STATE GUARANTEED DEBT
The ratings of the state-guaranteed debt issued by Sabadell and
Banco CAM are in line with the Long-term IDR of Spain
('BBB'/Negative) and are thus sensitive to any change in this
rating

Sabadell, with assets of EUR167bn at end-H112, is Spain's fifth-
largest banking group.  It focuses on retail banking for SMEs and
individuals and has a market share of domestic assets of around
6%.  It has a good presence in Spain's Mediterranean area, namely
Catalonia, Balearics, Valencia and Murcia; as well as in the
northern regions of Asturias and the Basque Country.

The rating actions are as follows:

Banco de Sabadell:

  -- Long-term IDR: downgraded to 'BB+' from 'BBB'; removed from
     RWN; Outlook Stable
  -- Short-term IDR: downgraded to 'B' from 'F3'; removed from RWN
  -- Viability Rating: downgraded to 'bb+' from 'bbb'; removed
     from RWN
  -- Support Rating: affirmed at '3'; removed from RWP
  -- Support Rating Floor: affirmed at 'BB+'; removed from RWP
  -- Senior unsecured long-term debt: downgraded to 'BB+' from
     'BBB'; removed from RWN
  -- Senior unsecured short-term debt: downgraded to 'B' from
     'F3'; removed from RWN
  -- Commercial paper: downgraded to 'B' from 'F3'; removed from
     RWN
  -- Subordinated lower tier 2 debt: downgraded to 'BB' from
     'BBB-'; removed from RWN
  -- Preferred stock: downgraded to 'B-' from 'B+'; removed from
     RWN
  -- State-guaranteed debt: affirmed at 'BBB'

Sabadell International Equity Ltd:

  -- Preferred stock: downgraded to 'B-' from 'B+'; removed from
     RWN

Banco CAM:

  -- Long-term IDR: affirmed at 'BB+'; removed from RWP; Outlook
     Stable
  -- Short-term IDR: affirmed at 'B'; removed from RWP
  -- Viability Rating: affirmed at 'f'; removed from RWP; rating
     withdrawn
  -- Support Rating: affirmed at '3'; removed from RWP
  -- Support Rating Floor: affirmed at 'BB+'; removed from RWP;
     rating withdrawn
  -- Senior unsecured long-term debt: affirmed at 'BB+'; removed
     from RWP
  -- Commercial paper and senior unsecured short-term debt:
     affirmed at 'B'; removed from RWP
  -- Subordinated lower tier 2 debt: affirmed at 'BB'; removed
     from Rating Watch Evolving (RWE)
  -- Subordinated upper tier 2 debt: upgraded to 'B-' from 'CC'
  -- Preferred Stock: upgraded to 'CCC' from 'C'
  -- State-guaranteed debt: affirmed at 'BBB'

Banco HSBC Salvadoreno:

  -- Viability Rating at 'bb'.


NOSTRA EMPRESAS 1: Fitch Cuts Ratings on 3 Note Classes to 'BB+'
----------------------------------------------------------------
Fitch Ratings has downgraded TDA SA Nostra Empresas 1 and 2 FTA
and maintained the series A and B on Rating Watch Negative (RWN)
as follows:

TDA SA Nostra Empresas 1

  -- Series A (ISIN:ES0377969003): downgraded to 'Asf' from 'AA-
     sf', maintained on RWN
  -- Series B (ISIN:ES0377969011): 'Asf', maintained on RWN
  -- Series C (ISIN:ES0377969029): downgraded to 'BB+sf' from
     'BBB+sf, off RWN; Outlook Stable
  -- Series D (ISIN:ES0377969037): downgraded to 'BB+sf' from
     'BBBsf', Outlook Stable
  -- Series E (ISIN:ES0377969045): affirmed at 'BBsf', Outlook
     Stable

TDA SA Nostra Empresas 2

  -- Series A (ISIN:ES0377957008): downgraded to 'Asf' from 'AA-
     sf', maintained on RWN
  -- Series B (ISIN:ES0377957016): 'Asf', maintained on RWN
  -- Series C (ISIN:ES0377957032): downgraded to 'BB+sf' from
     'BBBsf', Outlook Stable
  -- Series D (ISIN:ES0377957024): affirmed at 'BBsf', Outlook
     Stable

The series A notes in both transactions have been downgraded due
to payment interruption risk stemming from the reserve fund being
deposited with the originator, Banco Mare Nostrum (BMN;
'BB+'/Stable/'B').  In the absence of any other sources of
liquidity, the reserve fund is an essential liquidity buffer to
maintain timely interest payments on the senior notes in case of a
potential servicer disruption.  Series A and B have been
maintained on RWN as Fitch continues to assess the risk and has
not ruled out further downgrades of the notes.

The ratings initially assigned to the senior notes were based on
covenants in the transaction documentation which warranted the
replacement or procurement of eligible third-party guarantees to
mitigate payment interruption risk.  The re-investment account
(which holds the reserve fund) benefited from a guarantee provided
by Confederacion Espanola de Cajas de Ahorros (CECA; 'BBB-
'/Negative/'F3').  Following CECA's downgrade below 'A'/'F1', the
Gestora communicated to Fitch that the remedial actions outlined
in the documentation with respect to the downgrade of CECA below
'A'/'F1' will not be implemented and the guarantee was
subsequently cancelled.

The downgrades of TDA SA Nostra 1's series C and D notes reflect
the credit risk stemming from the reserve fund being deposited
with the originator.  The reserve accounts for 25% of the note
balance and provides most of the subordination for series C and D
notes.  As a result, the ratings have been downgraded to 'BB+sf'
and credit linked to the originator's rating; which is also
reflected by the Stable Outlook.  The series E notes have been
affirmed and capped at the originator's rating because the current
note rating is below 'BB+'.

The same rationale resulted in the downgrade of series C of TDA SA
Nostra 2.  The tranche has been downgraded to 'BB+sf' and credit
linked to the originator's rating.  The series D notes have been
affirmed and capped at 'BB+sf'.

Furthermore, the series A and B notes have material exposure to
Banco Santander S.A ('BBB+'/Negative/'F2') which acts as the
account bank for the two transactions.  Fitch expects the
implementation of remedial actions (for the account bank) in the
near term based on correspondence received from the transaction
parties.


TDA 29: Fitch Affirms 'CCsf' Rating on Class D Notes
----------------------------------------------------
Fitch Ratings has taken rating actions on TDA 29, Fondo de
Titulizacion de Activos (TDA 29) as follows:

  -- Class A1 (ISIN ES0377931003): 'AA-sf'; maintained on RWN)
  -- Class A2 (ISIN ES0377931011): downgraded to 'BBBsf'; from
     'AA-sf' Outlook Negative;
  -- Class B (ISIN ES0377931029): downgraded to 'Bsf'; from
     'BBBsf', Outlook Negative
  -- Class C (ISIN ES0377931037): affirmed at 'CCCsf'; Recovery
     Estimate of 10%
  -- Class D (ISIN ES0377931045): affirmed at 'CCsf'; Recovery
     Estimate of 0%

The downgrades reflect Fitch's concern with the overall credit
worsening of the underlying portfolio of residential mortgage
loans, in particular a recent rise in arrears and the low level of
recoveries evidenced to date.

TDA 29 is a securitization of residential mortgage loans
originated by Banca March (unrated by Fitch) and Banco Guipuzanco
(now Banco Sabadell, 'BBB'/RWN/'F3').

In Fitch's view, the worsening macroeconomic environment is having
an impact on borrower affordability in TDA 29.  As of April 2012,
the level of borrowers in arrears by more than three months as a
percentage of collateral balance had risen to 1.75% compared to
1.19% in April 2011.  The frequency of defaults, defined as loans
in arrears by more than 12 months, has also risen during the year.
As of April 2012, cumulative gross defaults were at 2% of initial
balance with 41% of these defaults occurring within the past 12
months.

The management company, Titulizacion de Activos, provided Fitch
with information on Banco Guipuzcano-originated loans that have
defaulted.  The information suggests on average a 65% recovery
rate on defaulted loans, after repossession and subsequent sale of
the property backing the loan.  As a result, the agency capped the
recovery rate assumption at 65% on Banco Guipuzcano's portion of
the pool in its base case stress environment.

Additionally, Fitch has assumed a more conservative recovery
assumption on defaulted Banca March loans, by increasing its
standard market value decline assumptions by 10%.  This is
supported by historical data on foreclosures from the bank.

The excess spread generated in the deal has been insufficient to
clear period default provisioning requirements.  This has led to
repeated reserve fund draws, and in April 2012 it stood at 35% of
its target amount.  With the current pipeline of potential
defaults now higher than 2011 and recoveries as low as 65%, Fitch
expects further reserve fund draws to occur, further diminishing
credit enhancement available to the notes.  This was a driver of
the downgrades of the class A2 and class B notes.

The agency has not downgraded the class A1 notes as it expects
these notes to be paid in full at the next quarterly payment date.
The notes have been maintained on RWN as the account banks, Banco
Santander and Banco Espanol de Credito S.A. (both rated
'BBB+'/'F2') are no longer eligible to support the current rating
under Fitch's structured finance counterparty criteria, without
implementing appropriate remedial actions.  The agency has been
informed of the management company's intentions to put in place
appropriate remedies, which are expected to be fully implemented
in the upcoming days.  The agency will continue to monitor the
progress and may take rating actions accordingly.



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


UKRAINIAN AGRARIAN: S&P Assigns 'B' Long-term Corp. Credit Rating
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' long-term
corporate credit rating to Ukraine-based crop producer and trader
Ukrainian Agrarian Investments S.A. (UAI). The outlook is stable.

"The rating on UAI reflects our assessment that the company's
business risk profile is 'weak.' Our assessment primarily reflects
UAI's participation in the volatile agriculture industry and the
high risk of doing business in Ukraine. Moreover, there is a
history of intervention by the government of the Ukraine
(B+/Negative/B) in UAI's markets. It is our view that if the
Ukrainian government were to interfere in agricultural markets in
the future--including the imposition of new restrictions on export
sales--UAI's sales, profitability, and cash flow could weaken. In
addition, the highly seasonal nature of UAI's business (entailing
fluctuations in working capital) and the unpredictability of
weather patterns are key risk factors for the company and the
rating. Many of these risks are largely out of the company's
control," S&P said.

"Nevertheless, we believe that UAI benefits from its lease rights
to high-quality farmland, low production costs, and the currently
favorable trading environment (in terms of pricing and demand) for
its crops," S&P said.

"We assess UAI's financial risk profile as 'highly leveraged,'
primarily due to the volatility in profit and cash flow that is
inherent to the agricultural industry; UAI's reliance on short-
term, high-interest rate debt; and its expansion program, which
will likely consume most of its free cash flow. We currently
assume that the favorable trading environment will continue and
that the meaningful profit growth we forecast in 2012 should allow
UAI to extend its short-term debt next year," S&P said.

"Although much of UAI's corn crop has yet to be sold, we forecast
solid growth in revenues, profit, and cash due to a high level of
corn production and pricing. We believe that this growth will more
than offset potentially lower harvests for certain other crops
that poor weather conditions may have damaged last winter; an
estimated US$8 million increase in land lease costs; and a modest
reduction in VAT retention," S&P said.

"We could lower the rating if we forecast deterioration in
profitability and credit measures, including leverage of more than
4x. This could result from potential actions by the Ukrainian
government, including but not limited to the potential imposition
of restrictions on the sale of certain of the company's crops; a
potential poor future harvest due to extreme weather conditions;
or from a significant drop in pricing, especially for corn. We
estimate that leverage would exceed 4x if EBITDA fell by 40%. We
could also lower the rating if we forecasted a reduction in
liquidity, which could occur if UAI were unable to renew its short
term credit lines, or if we lowered the ratings on Ukraine," S&P
said.

"We would consider raising the rating if UAI is able to execute
its expansion plan while maintaining credit measures near current
levels; if the company's liquidity improves, including through a
reduction of its reliance on short-term debt; and if our view on
the risks of operating in Ukraine improves. However, we consider
this unlikely over the near term, primarily due to Ukrainian
country risk," S&P said.



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


MOUCHEL GROUP: May Default if Debt Restructuring Fails
------------------------------------------------------
Patricia Kuo at Bloomberg News reports that Mouchel Group Plc said
it may default if shareholders don't back a proposal to
restructure its debt.

According to Bloomberg, Mouchel said in a statement that lenders
led by Royal Bank of Scotland Group Plc and Lloyds Banking Group
Plc have already agreed to the proposal, under which they'll own
more than 50% of the company in exchange for writing off GBP87
million (US$136 million) of its debt.

"A default is expected" at the end of this month unless the
company restructures its debt, Mouchel, as cited by Bloomberg,
said.  "Though the underlying business is performing broadly in
line with management expectations, performance in the current year
continues to be impacted by the financial uncertainty surrounding
the group."

The statement said that Mouchel owed lenders about GBP170 million
as of July 26, Bloomberg notes.  Under the proposed debt for
equity swap, the Woking, England-based company would be left with
GBP60 million of term loans and GBP40 million of other credit
facilities, Bloomberg discloses.

The company said it's pursuing the debt restructuring plan because
volatile conditions mean it's unable to refinance its debt or
raise new money in equity markets, Bloomberg relates.

"The group's currently over-leveraged balance sheet is restricting
the company from competing effectively for and winning new
business," Bloomberg quotes the statement as saying.  "The
restructuring is fundamental to the implementation of  Mouchel's
strategic review as it will result in a sustainable level of debt
from which the group can deliver its operational plans for the
long-term viability of the business."

Mouchel, Bloomberg says, will be delisted from the London Stock
Exchange if its shareholders approve the proposal at a meeting on
Aug. 24.

Mouchel Group plc -- http://www.mouchel.com/-- is a consulting
and business services company supporting clients in developing
and managing their infrastructure assets.  The Company operates
in three segments: Government Services, Regulated Industries and
Highways.


PETROPLUS HOLDINGS: Coryton Creditors to Recover 6.4% of Claims
---------------------------------------------------------------
Reuters reports that Steven Pearson, a joint administrator at
PricewaterhouseCoopers, said that creditors of Petroplus's UK
operations, mainly the Coryton refinery, will be paid a maximum of
just 6.4% of their claims.

According to Reuters, Mr. Pearson said on Tuesday that the
creditors will receive US$102 million to US$135 million, while
their claims are estimated to total US$2.1 billion to US$2.4
billion.  He said that losses of US$22-$31 million, sustained in
runnning the refinery between January and June, had reduced the
amount available for distribution and demonstrated why he had to
take the decision to close the plant down, Reuters relates.

He added that the return to creditors was low also because the
parent company had loaded some US$1.75 billion of debt against the
UK division, Reuters notes.

                         About Petroplus

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

Petroplus was forced to file for insolvency in late January after
struggling for months with weak demand due to the economic
slowdown in Europe and overcapacity amid tighter credit
conditions, high crude prices and competition from Asia and the
Middle East, MarketWatch said in a March 28 report.

According to MarketWatch, Petroplus said in March a local court
granted "ordinary composition proceedings" for a period of six
months. As part of the court process, Petroplus intends to sell
its assets to repay its creditors.

Some of Petroplus' units in countries other than Switzerland have
filed for "different types of proceedings" and are currently
controlled by court-appointed administrators or liquidators,
which started the process to sell assets, including the company's
refineries.


* UK: Moody's Says Non-Conforming RMBS Performance Stable in May
----------------------------------------------------------------
The performance of the UK non-conforming residential mortgage-
backed securities (RMBS) market remained stable over the three-
month period ending May 2012, according to the latest indices
published by Moody's Investors Service for this sector.

In May 2012, the 90+ day delinquency index for UK non-conforming
RMBS was 16.3%, below the 21.0% peak reached in June 2009. Since
August 2010, outstanding repossessions have remained around 0.9%
of the current outstanding balance, which is substantially below
the peak of 3.6% reached in February 2009. Cumulative losses
increased further, although at a slower pace, reaching 2.2% of the
original balance in May 2012.

Weighted-average loss severity as a percentage of properties sold
was around 29.9%, although different vintages and series
demonstrated substantial volatility. The average loss severity is
currently below its June 2010 peak of approximately 33.4%. Whilst
performance has stabilized in many UK non-conforming RMBS
transactions, Moody's remains concerned by high delinquency levels
and accounted for this level of arrears by assuming all currently
delinquent borrowers will default in a less favorable environment.
Furthermore, low redemption rates, which were 5.5% in May 2012,
are far below the pre-2009 levels of 20%-40%. In Moody's view,
these low redemption rates indicate that the portfolios will
remain outstanding for a longer-than-anticipated period of time,
exacerbating future performance uncertainty.

The exposure of non-conforming RMBS transactions to 'mortgage
prisoners' elevates the risk of performance deterioration in a
stressed environment, which is credit negative for most
transactions, especially the 2006-07 vintages. Mortgage prisoners
are borrowers who (1) are or were behind on their payments and
have loan-to-value (LTV) ratios exceeding 85%; or (2) pay their
mortgages on time but have interest-only loans with LTV ratios
exceeding 100%. Mortgage prisoners are more vulnerable to
macroeconomic or life event stresses and thus tend to exhibit
higher losses.

Moody's outlook for the collateral performance of UK non-
conforming RMBS transactions in 2012 is negative (see "European
ABS and RMBS Outlooks: June 2012 Update", June 2012). The UK
economy will grow by only 0.4% in 2012. Non-conforming borrowers
will be more sensitive to the deteriorating economic environment
than prime borrowers. Most non-conforming borrowers already use
interest-only products, making it difficult for lenders to lower
monthly payments if the borrower faces a disruption to income.
Unemployment rates will rise to 8.7% in 2012 from an average of
8.0% in 2011. Rising unemployment will hurt non-conforming
borrower performance.

On February 14, Moody's downgraded the ratings of notes issued by
issued by Money Partners Securities 2 plc, Money Partners
Securities 3 plc and Money Partners Securities 4 plc. This
downgrade was driven by (1) the exposure to payment disruption
risk, (2) the revision of collateral performance assumptions, (3)
Moody's outlook for UK non-conforming RMBS and (4) the level of
credit enhancement supporting the notes.

On February 27, Moody's downgraded the ratings of notes issued by
Residential Mortgage Securities 19 Plc, Residential Mortgage
Securities 20 Plc, Residential Mortgage Securities 21 Plc and
Residential Mortgage Securities 22 Plc. This downgrade was driven
by (1) the exposure to payment disruption risk, (2) the revision
of collateral performance assumptions, (3) Moody's outlook for UK
non-conforming RMBS and (4) the level of credit enhancement
supporting the notes.

On May 2, Moody's downgraded the ratings of notes issued by
Kensington Mortgage Securities plc Series 2007-1. This downgrade
was driven by the exposure to payment disruption risk.

On July 3, Moody's placed on review the ratings of notes issued by
ResLoC UK 2007-1 PLC due to counterparty exposure.

The total current outstanding pool balance of all 81 transactions
rated by Moody's in the UK non-conforming RMBS market dropped to
GBP20.9 billion in February 2012, a year-over-year decrease of
7.2%. Moody's has not rated any UK non-conforming RMBS
transactions since January 2009.


* UK: Moody's Says Prime RMBS Performance Remained Stable in May
----------------------------------------------------------------
The performance of the UK prime residential mortgage-backed
securities (RMBS) market continued its stable trend in the three-
month period leading up to May 2012, according to the latest
indices published by Moody's Investors Service.

From February to May 2012, the 90+ day delinquency trend was
stable at 1.9% of the outstanding portfolio. In the same period,
outstanding repossessions remained stable at 0.2% and cumulative
losses increased slightly to 0.3% from 0.2% in February. Moody's
annualized total redemption rate (TRR) trend averaged 14.1% in the
three-month period through May 2012.

Moody's outlook for the collateral performance of UK prime RMBS in
2012 is stable (see "European ABS and RMBS Outlooks: June 2012
Update", June 2012). Performance in this sector has been stable
for the past year mainly because of a low interest rate
environment and relatively low job losses. Interest rates will
remain low in 2012, and unemployment will rise only slightly to
8.7% in 2012 from an average of 8.0% in 2011. Prime borrowers can
better deal with becoming unemployed than non-conforming borrowers
because lenders are often willing to offer alternatives, such as
allowing borrowers to reduce their monthly payment installments by
switching from a capital-repayment to an interest-only mortgage.
Also, house prices will remain within a plus-or-minus 3% band,
which will help contain losses on foreclosed properties.

On July 3, Moody's placed on review the ratings of notes issued by
several transactions due to counterparty exposure.

In the three-month period through May 2012, Moody's rated nine
transactions in the UK prime RMBS market:

* Silverstone Master Issuer PLC Series 2012-1, originated by
Nationwide Building Society (A2/P-1), issued approximately GBP1.5
billion.

* Holmes Master Issuer Series 2012-2, Holmes Master Issuer Series
2012-3 and Fosse Master Issuer plc Series 2012-1, originated by
Santander UK PLC (A2/P-1, on review for downgrade), issued
approximately GBP3.7 billion in total.

* Gracechurch Mortgage Financing PLC 2012-1, originated by
Barclays Bank Plc (A2/P-1), issued approximately GBP3.1 billion.

* Kenrick No.1 PLC, originated by West Bromwich Building Society
(B2/NP), issued approximately GBP0.3 billion.

* Leofric No.1 PLC, originated by Coventry Building Society (A3/P-
2) and Godiva Mortgages Limited (NR), issued approximately GBP0.9
billion.

* Darrowby No.2 Plc, originated by Skipton Building Society
(Ba1/NP), issued approximately GBP0.5 billion.

* Gosforth Funding 2012-1 plc, originated by Northern Rock Asset
Management (Aa3/P-1), issued approximately GBP0.9 billion.

As of May 2012, the 86 Moody's-rated UK prime RMBS transactions
had an outstanding pool balance of GBP263.5 billion, which
constitutes a year-over-year decrease of 20.8%. This is largely
due to the redemption of two Master Trusts (Mound Financing and
Lothian Mortgages). In addition, Langton Securities redeemed three
series.


* UK: Moody's Says Buy-To-Let RMBS Performance Improved in May
--------------------------------------------------------------
The performance of the UK buy-to-let (BTL) residential mortgage-
backed securities (RMBS) market continued to improve in the three-
month period leading up to May 2012, according to the latest
indices published by Moody's Investors Service.

In the three-month period to May 2012, the 90+ day delinquency
trend decreased to 1.3%, from 1.5% in February 2012. During this
period, outstanding repossessions remained stable at 0.1% and
cumulative losses increased slightly to 0.6% from 0.5% in
February. Moody's annualized total redemption rate (TRR) trend
averaged 4.4% in the three-month period to May 2012.

Moody's outlook for the collateral performance of UK buy-to-let
RMBS in 2012 is stable (see "European ABS and RMBS Outlooks: June
2012 Update", June 2012). Performance in this sector has been
stable for the past year mainly because of (1) a low interest rate
environment, which has helped borrower affordability; and (2)
relatively low job losses, which has helped tenants continue to
pay their rent. Interest rates will remain low in 2012 and
unemployment will rise only slightly to 8.7% in 2012 from an
average of 8.0% in 2011. Also, house prices will remain within a
plus-or-minus 3% band, which will help contain losses on
foreclosed properties.

On May 11, a non-asset trigger was breached in Aire Valley Master
Trust. The breach reflects the drop in the trust's size below the
required minimum of GBP10.7 billion.

Moody's has rated no new transactions in the UK BTL market since
October 2011.

As of February 2012, the 27 Moody's-rated UK BTL RMBS transactions
had an outstanding pool balance of GBP25.8 billion. Compared with
the GBP37.3 billion pool balance for the same period in the
previous year, this constitutes a 30.8% year-over-year decrease.
This is mainly due to the redemption of Pendeford Master Issuer.



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


* EMEA Consumer Loan ABS Performance Remained Stable in May 2012
----------------------------------------------------------------
The performance of the EMEA consumer loan asset-backed securities
(ABS) market has been relatively stable in the three-month period
leading to May 2012 and year-over-year, according to the latest
indices published by Moody's Investors Service.

Moody's cumulative default index increased slightly to 3.26% in
May 2012 from 3.17% in February 2012. However this figure
decreased on a year-on-year basis approximately 12%. All markets
contributed to this annual decrease except France where cumulative
defaults increased significantly to 3.62% in May 2012 from 2.49%
in May 2011. The increase in the French market is mainly
attributable to FCT Ginkgo Consumer Finance, Compartment 2009-1,
in which defaults rose sharply since closing. This transaction was
fully repaid in July 2012.

The 90-180 day delinquencies index (as a percentage of current
balance) ended in May 2012 at 1.44%, rising slightly from 1.40 %
in February 2012.

Moody's constant prepayment rate (CPR) recorded an increase to
11.99% in May 2012, from 10.58% in February 2012.

The EMEA Consumer Loan Indices now includes the French trend line,
which shows performance data from November 2010. In the past,
French consumer loan performance was included in the trend line
"Other" because of insufficient outstanding transactions. However,
during the last two years, four transactions have been closed.
Three of these were originated by Credit Agricole Consumer Finance
S.A. and one by BNP Paribas Personal Finance B.V. The asset
securitized in these transactions comprise personal loans,
equipment loans, vehicle loans and debt consolidation loans
extended to obligors located in France.

Portuguese transactions are now included in the trend line
"Other", as only one transactions is currently outstanding.

Moody's outlook for consumer loan ABS in EMEA is negative as
detailed in the report titled "European ABS and RMBS Outlooks:
June 2012 Update".

The performance of consumer loan ABS in Europe will deteriorate.
Economic conditions remain weak across the main countries in the
European consumer loan ABS index. Italy, Spain, Portugal and
Greece are in recession and the rating agency expects GDP to
contract by 2.0%, 1.7%, 3.7% and 5.6%, respectively, in 2012 (see
"European ABS and RMBS Outlooks: June 2012 Update", June 2012;
"Credit Opinion: Government of Italy,", July 2012 and "Credit
Opinion: Government of Spain,", July 2012). Unemployment will
continue to rise in all of these markets, which will increase
borrower defaults.

As of July 2012, nine of the 41 outstanding transactions have a
reserve fund below their target level, six of which have
completely drawn their reserve fund. Seven transactions show an
unpaid principal deficiency ledger.

As of May 2012, the total outstanding pool balance in the EMEA
consumer loan ABS market was EUR28.10 billion, a 14.30% year-over-
year decrease. However, Italian market volumes increased
approximately 42% compared with a year earlier. Between May and
July 2012, three EMEA consumer loan transactions closed in France,
Italy and Finland, respectively, for an original volume of around
EUR1.5 billion.

On July 2, 2012, Moody's downgraded 13 tranches of Spanish
Consumer loan transactions to A3, the highest achievable rating
after the downgrade of Spain's government bond ratings to Baa3
from A3 on June 13, 2012.

On May 22, 2012, one Italian transaction, Consumer One, was placed
on review for possible downgrade following the strong indirect
linkage to the Unicredit Spa, the issuer account bank of the
transactions, downgraded to A3 the May 14. On July 16, Unicredit
Spa was further downgraded to Baa2.

Additional information in regards to the number of outstanding
deals, number of outstanding rated tranches, the average pool
factor and the average of Moody's performance expectations are now
available in the summary sheet of the Italian leasing Index
report:

http://www.moodys.com/viewresearchdoc.aspx?docid=PBS_SF293546


* Upcoming Meetings, Conferences and Seminars
---------------------------------------------

Aug. 2-4, 2012
  AMERICAN BANKRUPTCY INSTITUTE
     Mid-Atlantic Bankruptcy Workshop
        Hyatt Regency Chesapeake Bay, Cambridge, Md.
           Contact: 1-703-739-0800; http://www.abiworld.org/

November 1-3, 2012
  TURNAROUND MANAGEMENT ASSOCIATION
     TMA Annual Convention
        Westin Copley Place, Boston, Mass.
           Contact: http://www.turnaround.org/

Nov. 29 - Dec. 2, 2012
  AMERICAN BANKRUPTCY INSTITUTE
     Winter Leadership Conference
        JW Marriott Starr Pass Resort & Spa, Tucson, Ariz.
           Contact: 1-703-739-0800; http://www.abiworld.org/

April 10-12, 2013
  TURNAROUND MANAGEMENT ASSOCIATION
     TMA Spring Conference
        JW Marriott Chicago, Chicago, Ill.
           Contact: http://www.turnaround.org/

October 3-5, 2013
  TURNAROUND MANAGEMENT ASSOCIATION
     TMA Annual Convention
        Marriott Wardman Park, Washington, D.C.
           Contact: http://www.turnaround.org/


                            *********

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 * * *