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

                           E U R O P E

            Friday, February 1, 2013, Vol. 14, No. 23

                            Headlines



A L B A N I A

PROCREDIT BANK: Fitch Affirms 'B+' LT Issuer Default Rating


A Z E R B A I J A N

KAPITAL BANK: Fitch Affirms 'B+' FC Issuer Default Rating


D E N M A R K

* DENMARK: Expects to Unveil Bank Board Failures Next Week


F I N L A N D

* FINLAND: Moody's Says Banking System Outlook Remains Negative


G E R M A N Y

ADAM OPEL: GM Set to Appoint Ex-VW Manager as New Chief Executive


I R E L A N D

* IRELAND: Central Bank Urges Banks to Tackle Mortgage Crisis


I T A L Y

BANCA MONTE: Bank of Italy Rejects Lax Oversight Criticism
BANCA MONTE: Moody's Reviews Ba2-Rated Debt Rating for Downgrade
SEAT PAGINE: Moody's Cuts Rating on EUR65MM Sr. Bonds to 'Caa3'
SEAT PAGINE: S&P Lowers Corporate Credit Rating to 'CC'


L U X E M B O U R G

DEUTSCHE BANK: S&P Cuts Ratings on Three Note Classes to 'CCC-'


N E T H E R L A N D S

AEGON NV: To Take Over Eureko's Life & Pension Unit in Romania
ALG BV: Moody's Assigns 'B2' CFR; Outlook Stable
JUBILEE CDO VIII: Fitch Affirms 'B-' Rating on Class E Notes


P O R T U G A L

* PORTUGAL: Corporate Insolvencies Up 41% in 2012, Cosec Says


R O M A N I A

OLTCHIM: Declared Insolvent; Temporary Administrator Appointed


R U S S I A

KONDOPOGA OAO: Bank Sankt-Petersburg to Manage Debt Restructuring
PHOSAGRO OJSC: Fitch Assigns 'BB+' LT Issuer Default Rating


S P A I N

ABENGOA FINANCE: S&P Assigns 'B+' Rating to EUR250MM Sr. Notes
CABLEUROPA S.A.U.: Moody's Rates New EUR250MM Sr. Notes '(P)B1'
NARA CABLE: Fitch Assigns 'BB-(EXP)' Rating to Sr. Secured Notes
* SPAIN: Recession Deepens; May Have to Ease Budget Goals


U K R A I N E

FERREXPO FINANCE: Fitch Rates US$500MM Guaranteed Notes 'B(exp)'
FERREXPO FINANCE: Moody's Rates USD500MM Notes Issue '(P)Caa1'
FERREXPO FINANCE: S&P Rates Proposed Unsecured Notes 'B'


U N I T E D   K I N G D O M

ASSET REPACKAGING: S&P Lowers Rating on 16 Note Classes to 'CCC-'
COBBETS LLP: Appoints Administrators to Find Buyer
HEWLETT GROUP: In Administration, Seeks Buyer
INFINIS PLC: Moody's Rates GBP350MM Sr. Notes Issue '(P)Ba3'
LEHMAN BROTHERS: Watchdog Clears E&Y Over Client Funds Audit

WHITEQUAY GROUP: In Administration, Closes Three Sites

* UK: Scottish Corporate Failures Down 1.1% to 1,264 in 2012
* UK: FRC Calls for Banks to Admit Going Concern Uncertainties
* UK: Moody's Says Non-Conforming RMBS Stable in November 2012
* UK: Moody's Notes Stable RMBS Performance in November 2012
* UK: Moody's Sees Improving Performance of Buy-To-Let RMBS


X X X X X X X X

* EU Car Sales May Not Recover Before End of Decade, Fitch Says
* Fitch Says Credit Growth Stagnant in Developed World
* BOOK REVIEW: The Health Care Marketplace


                            *********


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A L B A N I A
==============


PROCREDIT BANK: Fitch Affirms 'B+' LT Issuer Default Rating
-----------------------------------------------------------
Fitch Ratings has affirmed the Long-Term foreign currency Issuer
Default Ratings (IDRs) of ProCredit Banks in Albania (PCBA) and
Macedonia (PCBM) at 'B+' and 'BB+' respectively, both with Stable
Outlooks. A full list of rating actions is at the end of this
commentary.

Rating Drivers and Sensitivities: IDR AND SUPPORT RATINGS

The banks' Long-Term IDRs and Support Ratings are driven by
potential support from their parent, ProCredit Holding AG & Co.
KGaA (PCH, 'BBB-'/Stable). In turn, PCH's ratings are based on
Fitch's view of the support it could expect to receive from its
core shareholders, if needed -- particularly from its
international financial institution (IFI) shareholders.

The potential support for PCBA, and hence its IDRs and Support
Rating, are constrained by Fitch's assessment of transfer and
convertibility risks in Albania. Consequently, its ratings could
be upgraded or downgraded if Fitch's view of these risks changes.

PCBM's IDRs and Support Ratings are also sensitive to Macedonia's
sovereign rating ('BB+'/Stable). Downward movement in the
sovereign rating would result in a lowering of PCBM's Long-Term
IDRs. However, upward movement in the sovereign rating would not
result in an upgrade of PCBM's IDRs, in view of PCH's ratings.

A weakening in Fitch's view of the support available to PCBM from
PCH would also result in a change to PCBM's IDRs and potentially
its Support Rating. However, this is not expected by Fitch at
present.

Rating Drivers and Sensitivities: VIABILITY RATINGS

PCBA's 'b' VR considers the bank's difficult operating
environment and its fragile financial performance in 2012 given a
sharp increase in loan impairment charges, which reflect both a
one-off change in the bank's provisioning policy and a sharp
worsening in the bank's asset quality metrics (loans in arrears
over 30 days were 8.5% of total gross loans at end-2012; up from
3.7% at end-2011) following poor performance of some of its
larger SME loans. Despite this sharp increase however, the bank's
asset quality outperforms the sector average. The VR also
reflects a stable retail funding base, comfortable liquidity, and
solid corporate governance and risk management systems. Fitch
views the bank's capitalization as modest (Fitch Core
Capital/weighted risks of 12.6% at end-Q312), given the
challenging operating environment and the bank's fragile internal
capital generation.

PCBA's VR could be downgraded if continued asset quality
deterioration and loss of business volumes led to operating
losses, thereby putting further pressure on the bank's tight
capital levels. A sustainable and material improvement in
profitability and asset quality, as well as gains in economies of
scale, could lead to an upgrade of the VR. A more benign economic
outlook would also be positive for the bank's VR.

PCBM's VR reflects a muted growth environment in the context of a
slowdown in the Macedonian economy; modest, albeit strengthening,
profitability and solid asset quality metrics (loans in arrears
over 30 days of 2.8% at end-Q312) which outperform the sector
average. It also reflects solid corporate governance and risk
management. However, PCBM has a relatively high loan/deposit
ratio (116% at end-Q312), as the bank continues to rely on
funding from IFIs. Fitch views the bank's capitalization as
moderate (Fitch Core Capital/weighted risks of 11.6% at end-
Q312), given the operating environment and the bank's limited
internal capital generation.

The bank's VR could be downgraded in the event of a sharp
deterioration in asset quality leading to operating losses and
pressure on the bank's moderate capital levels. Improvements in
the operating environment, sustainable gains in profitability and
economies of scale could lead to an upgrade of the VR.

At end-2012, PCBA was 100%-owned and PCBM 87.5%-owned by PCH. PCH
is the Frankfurt-based holding company for the PCH Group with
operations in 22 countries (end-Q312 total assets: EUR5.7bn),
primarily in Eastern Europe, Latin America and Africa. PCH banks
focus on responsible lending to SMEs, and responsible banking for
retail customers.

The rating actions are:

PCBA
Long-term foreign currency IDR: affirmed at 'B+'; Outlook Stable
Short-term foreign currency IDR: affirmed at 'B'
Long-term local currency IDR: affirmed at 'BB-'; Outlook Stable
Short-term local currency IDR: affirmed at 'B'
Viability Rating: affirmed at 'b'
Support Rating: affirmed at '4'

PCBM
Longterm foreign currency IDR: affirmed at 'BB+'; Outlook Stable
Short-term foreign currency IDR: affirmed at 'B'
Long-term local currency IDR: affirmed at 'BB+'; Outlook Stable
Short-term local currency IDR: affirmed at 'B'
Viability Rating: affirmed at 'b'
Support Rating: affirmed at '3'



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


KAPITAL BANK: Fitch Affirms 'B+' FC Issuer Default Rating
---------------------------------------------------------
Fitch Ratings has affirmed Azerbaijan-based Kapital Bank's (KB)
and Pasha Bank's Long-term foreign currency Issuer Default
Ratings (IDRs) at 'B+', with a Stable Outlook.

Rating Action Rationale and Drivers:
KB's IDRS, SUPPORT RATING, SUPPORT RATING FLOOR (SRF)

KB's Long- and Short-Term IDRs, Support Rating and SRF reflect
potential support from the Azerbaijan authorities in case of
need. Fitch's' assessment of potential support takes into account
the bank's important social role in distributing pensions through
the largest country-wide branch network and its active
involvement in state-funded infrastructure development projects.
The ratings also acknowledge the close informal relationships
between the bank and its shareholders and government authorities.

At the same time, Fitch continues to view the probability of
state support as only limited given KB's narrow commercial
franchise, its private ownership and the weak track record of
support from the authorities demonstrated in respect to the
country's largest bank, International Bank of Azerbaijan (IBA;
'BB'/Stable).

Rating Action Rationale and Drivers:
KB's VIABILITY RATING (VR)

KB's Viability Rating reflects the bank's limited commercial
franchise, consistently weak performance, poor asset quality
metrics, pressure on capital and significant related party
lending. At the same time, the rating also acknowledges the
bank's ample liquidity, essential to offset volatility in
customer accounts driven by budget transfer payments, and the
absence of material non-government wholesale borrowings. KB's
funding is largely sourced from customer accounts (42% at end-
9M12) and borrowings from state agencies (57% at end-9M12).

In the course of the past four years (2009 - 2012) KB has
increased its loan book by almost a factor of five, from AZN345
million to AZN1.7 billion, mostly through the increase of agency
lending (around 66% of KB's total loan book at end-9M12). Agency
loans are directly financed by the Azerbaijan authorities and in
most instances include sovereign guarantees. Related party
construction exposures accounted for 17% of loans at end-9M12.

At end-2012, KB's level of non-performing loans (NPLs; overdue
for more than 90 days) was around 22% of gross commercial loans,
higher than at other Fitch-rated banks in Azerbaijan. A further
weakening of asset quality metrics is possible considering
heightened credit risks in KB's slowly amortizing loan book.

Fitch estimates that KB could fully reserve the reported NPLs;
however, in this case its capital ratio would approach the
regulatory minimum (12%). Furthermore, the loss absorption
capacity remains under pressure from KB's low/ negative internal
capital generation and expected potential growth in commercial
lending. An AZN10 million new equity injection planned for 2013
would result in only temporary improvement in the bank's
capitalization as it is likely to be consumed by loan growth and
operating losses.

Rating Action Rationale and Drivers:
PB' IDRs AND VIABILITY RATING

The affirmation of PB's ratings reflects minor changes in PB's
risk profile since the last review of the bank in September 2012.
The bank's ratings are constrained by the highly cyclical, oil
dependent and structurally weak Azerbaijani operating
environment. The major bank specific issues remain PB's limited
retail deposit franchise and short track record; potential
contingent risks arising from the construction business of the
broader group; notable political risk and uncertainty in respect
to the long-term sustainability of the bank's sizeable related
party funding.

At the same time, the ratings also consider PB's currently solid
financial metrics, reflected in a sizable capital and liquidity
buffer, and so far reasonable performance and asset quality. The
latter should be considered in the context of limited track
record, however.

For the most recent update and more details on the bank please
see Fitch's full rating report dated 3 December 2012, which is
available on www.fitchratings.com.

Rating Action Rationale:
PB's SUPPORT RATING AND SUPPORT RATING FLOOR

Fitch understands that the bank's shareholder structure may
benefit the bank in terms of potential liquidity support,
favorable regulatory treatment and potential equity support if
needed. However, such support cannot be relied upon at all times,
in the agency's view, given the bank's limited systemic
importance and policy role. Hence PB's Support Rating and SRF
were affirmed at '5' and 'No Floor', respectively.

Rating Sensitivites:
KB's AND PB's IDRS, VRs, SUPPORT RATINGS, SRFS

Both banks are owned by Pasha Holding and ultimately controlled
by the Pashaev family, who are the in-laws of President Aliyev.
Any weakening of the shareholder's connections to the Azerbaijani
authorities would be credit negative for PB and KB. A sharp
deterioration in the Azerbaijan economy or the country's
political stability, for example in case of a much lower oil
price, would also be negative for both banks.

KB's IDRs, Support Rating, Support Rating Floor could be
downgraded should its state-directed functions be transferred to
another financial institution. A further deterioration in asset
quality of KB's commercial loan book and/or prolonged operating
losses may erode the bank's capital position and result in a
downgrade of its VR. Positive rating action for KB is unlikely in
the foreseeable future given weaknesses in the bank's stand-alone
profile and the already significant potential support factored
into the ratings.

Downside pressure on PB's ratings could arise if the capital and
liquidity positions deteriorate significantly, for example from
materialization of contingent risks from other group assets, or
from fast credit growth, which is not anticipated by Fitch at
present. PB's Support Rating and SRF could be upgraded if there
was a marked increase in PB's systemic importance and the depth
of its franchise, or if the Azerbaijan authorities more clearly
demonstrate their readiness to support the country's non state-
owned banks. However, Fitch views such changes as unlikely in the
near term. Upward rating action would require an extended track
record of sound performance and improved transparency of the
group's construction business.

The rating actions are as follows:

Kapital Bank
Long-term foreign currency IDR: affirmed at 'B+', Outlook Stable
Short-term foreign currency IDR: affirmed at 'B'
Viability Rating: affirmed at 'b-'
Support Rating: affirmed at '4'
Support Rating Floor: affirmed at 'B+'

Pasha Bank
Long-term foreign-currency IDR: affirmed at 'B+'; Outlook Stable
Short-term foreign-currency IDR: affirmed at 'B'
Viability Rating: affirmed at 'b+'
Support Rating: affirmed at '5'
Support Rating Floor: affirmed at 'No Floor'



=============
D E N M A R K
=============


* DENMARK: Expects to Unveil Bank Board Failures Next Week
----------------------------------------------------------
Frances Schwartzkopff at Bloomberg News reports that Denmark's
financial regulator will identify as early as next week how many
boards fail to meet more stringent qualifications for serving
imposed after more than dozen banks failed or were forced to
merge.

According to Bloomberg, Soeren Moeller Christensen, spokesman for
the FSA, said that the Financial Supervisory Authority will
release its review after shifting through reports by banks,
pension funds and insurance companies documenting their
compliance with the new requirements, including relevant
management experience.

Denmark's financial institutions faced a Nov. 1 deadline to
submit their documentation, Bloomberg discloses.  Bloomberg
relates that the Copenhagen-based agency said in July, when it
presented the final requirements, that it would take action
against non-compliant institutions if they failed to reconstitute
their boards to meet the new rules at their annual general
meetings.

The FSA said in March, boards of failed banks have given managers
too much leeway and didn't check their decisions, Bloomberg
recounts.  Ulrik Noedgaard, general director of the FSA, said
last year that half of Denmark's 20 biggest banks don't have a
board member with bank industry management experience, Bloomberg
notes.



=============
F I N L A N D
=============


* FINLAND: Moody's Says Banking System Outlook Remains Negative
---------------------------------------------------------------
The outlook for the banking system in Finland remains negative,
says Moody's Investors Service in its new Banking System Outlook.
The key drivers of the outlook are the rating agency's
expectation of: (1) a continued weak operating environment; (2)
consequent downward pressure on asset-quality in the corporate
sector; (3) rising household debt levels; and (4) Finnish banks'
sustained reliance on wholesale funding.

The new report, entitled "Banking System Outlook: Finland", is
now available on Moody's website.

Moody's expects sluggish growth in Finnish GDP of only 0.3% in
2013, driven mainly by weak export demand from key trading
partners. In the non-corporate sector, although household
indebtedness levels are currently around the EU average, the
consistent increase in indebtedness over the past 15 years is
unsustainable in the long term, which may limit the role of
credit in future economic growth. This trend also places
increased pressure on borrowers' repayment capacity.

Whilst asset quality remains strong with rated banks' aggregate
problem loans of 1.9% of total loans at end-2011, it is likely to
come under increasing pressure. Asset quality deterioration will
likely be limited to commercial real estate and certain export-
driven sectors (forestry, iron and steel) but ultimate loan
losses will be manageable on a system-wide scale. Despite these
sector-specific loan loss increases, capital levels, which are
strong compared with most European peers, will remain stable over
the 12-18 month outlook horizon, given stable, albeit low,
profitability.

Market funding accounted for around 53% of Finnish banks' total
funding at end-2011. This is not particularly high compared with
many other European banking systems, and is somewhat mitigated by
growth in deposits. However, it nonetheless leaves the banks
vulnerable to changes in investor confidence which remains
fragile with respect to European banks.



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


ADAM OPEL: GM Set to Appoint Ex-VW Manager as New Chief Executive
-----------------------------------------------------------------
Chris Bryant at The Financial Times reports that General Motors
is set to appoint a former Volkswagen manager as chief executive
of Opel/Vauxhall to lead the transformation of the lossmaking
European car business.

Karl-Thomas Neumann, 51, the former head of VW's operations in
China, was set to be announced as the new Opel boss following a
meeting of the Opel's supervisory board on Jan. 31, the FT
discloses.  According to the FT, people close to the company said
that Mr. Neumann is expected to commence his duties on March 1.

Mr. Neumann is taking on one of the toughest jobs in global
carmaking, the FT notes.  Opel is struggling to halt a decline in
market share and its factories, like those at rivals Ford, PSA
Peugeot Citro‰n and Fiat, are operating well below capacity due
to a large decline in European car sales, the FT discloses.

Following the departure last July of former chief Karl-Friedrich
Stracke, Opel has been led on a temporary basis by Thomas Sedran,
a restructuring expert who became deputy chief executive and is
expected to remain at the company, the FT relates.

Mr. Stracke was the latest in a succession of Opel managers to be
forced out after failing to stem Opel's losses, which total some
US$15 billion over the past decade, the FT notes.

GM is pressing Opel to return to profitability by the midpoint of
the decade which it aims to do via a series of new models,
efforts to restore its damaged brand and tight control of fixed
costs, the FT says.

GM also hopes its alliance with struggling PSA Peugeot Citro‰n
will develop and that by sharing vehicle platforms and cutting
costs in purchasing and logistics it will gain some breathing
space, the FT states.

                           Union Talks

Opel managers and trade union leaders are currently locked in
talks over wage and other concessions that will allow a plant in
Bochum to stay open until 2016, the FT discloses.  According to
the FT, should the talks fail the German plant could close as
soon as the end of 2014.  The talks are due to conclude by the
end of February, the FT says.

Adam Opel GmbH -- http://www.opel.com/-- is General Motors
Corp.'s German wholly owned subsidiary.  Opel started making cars
in 1899.  Opel makes passenger cars (including the Astra, Corsa,
and Vectra) and light commercial vehicles (Combo and Movano).
Its high-performance VXR range includes souped-up versions of
Opel models like the Meriva minivan, the Corsa hatchback, and the
Astra sports compact.  Opel is GM's largest subsidiary outside
North America.



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


* IRELAND: Central Bank Urges Banks to Tackle Mortgage Crisis
-------------------------------------------------------------
Jamie Smyth at The Financial Times reports that Ireland's central
bank has told the country's lenders it could force them to raise
more capital if they fail to tackle a growing mortgage crisis
that threatens the country's exit from its international bail-out
program.

The blunt warning comes amid frustration in Dublin at the failure
of its bailed out banks to live up to repeated commitments to
engage with the one in five mortgage holders currently in
arrears, the FT relates.

"There is huge uncertainty about this, which may be a problem for
Ireland when exiting the program because the capital needs are
uncertain," the FT quotes said Lars Frisell, chief economist at
the Central Bank of Ireland, as saying.

Mr. Frisell, as cited by the FT, said Irish banks should have
enough capital to absorb mortgage losses but that the central
bank was considering options for putting pressure on lenders to
act, including raising capital.

The central bank says the main banks have been slow to appoint
dedicated personnel to manage the arrears process and to make
provisions for unsustainable mortgages, the FT discloses.

According to the FT, banks say they are introducing a wide range
of complex loan modification and resolution options.  They also
claim delays in passing new insolvency legislation have hampered
their efforts, the FT discloses.

Forcing Ireland's mainly state controlled banks to raise extra
capital would pose a headache for a financial sector that is
struggling to wean itself off government support, the FT notes.
It would also prove politically toxic if taxpayers, who have
already spent EUR64 billion shoring up Ireland's banks, were
forced to inject yet more capital, the FT states.

Moody's has expressed concern that new insolvency legislation
that shortens the bankruptcy term to three years from 12 years
could lead to some strategic default by mortgage holders, the FT
relates.

It forecasts Irish banks will remain under pressure for 12-18
months, the FT discloses.



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


BANCA MONTE: Bank of Italy Rejects Lax Oversight Criticism
----------------------------------------------------------
Andrew Davis at Bloomberg News reports that Bank of Italy acted
vigilantly in its oversight of Banca Monte dei Paschi di Siena
SpA, with the discovery of accounting irregularities leading to a
criminal investigation targeting previous management.

According to Bloomberg, a former senior Bank of Italy official
who was involved in the inspections said that pressure from the
central bank prompted a shakeup of executives at the Siena-based
lender last year and led to the uncovering in January of secret
documents about some transactions hidden from regulators.

The central bank is rejecting criticism that lax oversight
allowed Monte Paschi, the world's oldest bank, to amass risky
positions that may saddle the company with hundreds of millions
of euros in losses and already have necessitated a EUR3.9 billion
(US$5.3 billion) bailout request, Bloomberg discloses.  The Monte
Paschi affair came to light after Bloomberg News reported on
Jan. 17 the lender engaged in a transaction with Deutsche Bank AG
in 2008 that obscured losses, Bloomberg recounts.

The Bank of Italy, then headed by Mario Draghi, first became
concerned about Monte Paschi's finances when it reviewed a 2008
bank takeover, Bloomberg relates.  That led to two full
inspections of Monte Paschi starting in 2010, Bloomberg notes.
The central bank became so concerned about the irregularities it
notified prosecutors in March 2012, Bloomberg says, citing a
report dated Jan. 28.

The documents revealed this month show that Monte Paschi's former
management used structured-finance deals to hide losses from
previous operations, Bloomberg discloses.  The bank has said it
was investigating three transactions and will release a report by
the middle of this month on their financial impacts, Bloomberg
notes.

The person, as cited by Bloomberg, said that Monte Paschi's
former management obstructed the efforts of the central bank's
inspectors to determine the true nature and risks of the
transactions.

After an inspection in 2010, the Bank of Italy demanded a daily
report on the company's liquidity balance because the deals were
absorbing funds and then insisted that Chief Executive Officer
Antonio Vigni personally sign the reports, Bloomberg recounts.

As part of a further inspection, started in September 2011, the
central bank met with senior management in November of that year
and demanded "they assume their responsibilities," according to a
summary of the bank's actions obtained by Bloomberg.

Monte Paschi's board removed Mr. Vigni two months later and the
central bank then challenged the executive's EUR4 million exit
package, Bloomberg recounts.  The Bank of Italy, now headed by
Governor Ignazio Visco, turned over its finding from the
inspection in March to prosecutors, Bloomberg states.

                             Meeting

Lorenzo Totaro and Sonia Sirletti at Bloomberg News report that a
person familiar with the probes said prosecutors of two Italian
cities probing past irregularities at Monte Paschi and the bank's
supervision by regulators will probably meet this week to discuss
how to coordinate their investigation.

According to Bloomberg, the person said prosecutors in Siena,
where Monte Paschi is based, and in the southern city of Trani
have a mutual interest in avoiding overlaps.

Bloomberg notes that the person also said Siena prosecutors are
probing the past management for alleged market manipulation,
false accounting, obstruction to regulatory activity related to
the acquisition of Banca Antonveneta SpA and fraud related to
derivatives trades.  The person, as cited by Bloomberg, said that
prosecutors in Siena also are investigating the bank under a law
on company responsibility for crimes committed by its executives,
adding that the prosecutors have been cooperating for months with
regulators, including the Bank of Italy.

Bloomberg relates that consumer group Adusbef said in an e-mailed
statement on Wednesday prosecutors in Trani opened an
investigation into the supervision of Monte Paschi by the central
bank and market watchdog Consob.

Banca Monte dei Paschi di Siena SpA -- http://www.mps.it/-- is
an Italy-based company engaged in the banking sector.  It
provides traditional banking services, asset management and
private banking, including life insurance, pension funds and
investment trusts.  In addition, it offers investment banking,
including project finance, merchant banking and financial
advisory services.  The Company comprises more than 3,000
branches, and a structure of channels of distribution.  Banca
Monte dei Paschi di Siena Group has subsidiaries located
throughout Italy, Europe, America, Asia and North Africa.  It has
numerous subsidiaries, including Mps Sim SpA, MPS Capital
Services Banca per le Imprese SpA, MPS Banca Personale SpA, Banca
Toscana SpA, Monte Paschi Ireland Ltd. and Banca MP Belgio SpA.


BANCA MONTE: Moody's Reviews Ba2-Rated Debt Rating for Downgrade
----------------------------------------------------------------
Moody's Investors Service has placed the Ba2 long-term debt and
deposit ratings of Banca Monte dei Paschi di Siena (MPS) and its
subsidiary, MPS Capital Services, on review for downgrade.

Ratings Rationale

According to Moody's, the review reflects considerable
uncertainty regarding the impact on the bank's standalone credit
profile (bank financial strength rating of E, mapping to a
baseline credit assessment -- BCA - of caa1) of legacy structured
trades entered into by prior management. Current management is
now assessing those positions to determine their precise impact
on the company's financial position. Those trades, which had not
been reported to the regulator nor submitted to the MPS Board for
approval, are the subject of an internal review that will be
considered by the bank's Board of Directors in mid-February. That
review could potentially result in restatements of prior
financial statements, or actions to reduce the negative impact on
earnings of the legacy positions. Last November, the bank
requested a EUR500 million increase in state aid, to EUR3.9
billion, to absorb the impact on capital of the potential
renegotiation of these trades.

During the review period, Moody's will assess the potential for
further direct costs related to the final disposition of these
transactions, as well as the possibility that damage to the
bank's reputation, or concerns about its risk management, will
complicate or delay its efforts to repair its balance sheet and
improve profitability. Moody's will also consider the extent to
which new management has been able to ensure that all risk
exposures are now appropriately valued, and whether controls have
been appropriately strengthened.

Regarding the Ba2 deposit rating, Moody's will also assess the
extent to which the recent events may affect the government's
propensity to extend further support, if needed.

What Could Move The Ratings Up/Down

There is no upside pressure on the ratings at present in view of
the review for downgrade. However the BCA could remain at caa1 if
the bank's above discussed challenges and irregularities are
confined to the above three trades and direct and indirect
financial exposure is within the EUR500 million increase of state
aid. The deposit rating could be confirmed if, in addition to the
BCA remaining at caa1, Moody's assessment of the probability of
systemic support remains very high throughout and beyond the
current challenges for the bank.

Conversely, the standalone BCA could be lowered if the cost of
closing these trades exceeds the above mentioned estimate, or if
Moody's believes that further material losses or costs are likely
to emerge, or if other business and/or franchise challenges
related to these transactions are expected to negatively impact
the bank's efforts to improve its standalone credit profile. The
Ba2 could also be downgraded as a result of a lowering of the
BCA, or in the event that Moody's considers that the probability
of systemic support has decreased.

MPS Capital Services

Moody's has also placed on review the Ba2 rating of MPS's
corporate and investment banking subsidiary, which remains fully
integrated with and closely correlated to the parent. The ratings
of MPS Capital Services follow the ratings of MPS.

Rating Overview

The following ratings are under review:

1. MPS

- Senior unsecur ed debt and EMTN, and bank deposits: Ba2;
   (P)Ba2

- Subordinate debt and EMTN: Caa2; (P)Caa2

- Tier III EMTN: (P) Caa2

- Junior subordinate and EMTN: Caa3(hyb); (P)Caa3

- Preferred stock: Ca (hyb)

2. MPS Capital Services

- Bank deposits: Ba2

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


SEAT PAGINE: Moody's Cuts Rating on EUR65MM Sr. Bonds to 'Caa3'
---------------------------------------------------------------
Moody's Investors Service downgraded Seat Pagine Gialle SpA's CFR
to Caa3 from Caa1, and PDR to Caa3-PD from Caa1-PD. Concurrently,
Moody's has downgraded SEAT's EUR750 million senior secured bonds
due 2017 ("the Senior Secured Bonds") and EUR65 million senior
secured stub bonds due 2017 ("the Senior Secured Stub Bonds") to
Caa3 from Caa1. All ratings are placed under review for further
downgrade.

Ratings Rationale

The rating action follows the company's announcement that it has
suspended payment of the interest coupon for EUR42.2 million on
the Senior Secured Bonds due on 31 January 2013. The Board of
Directors has launched an assessment of the ongoing validity of
the assumptions underlying the recent debt restructuring
completed on 6th September 2012. The conclusion of this
assessment will help management to determine whether the
company's current capital structure is sustainable in the medium
term.

The Board of Directors expects to meet again by 6th February
2013, which is the next interest payment date on the bank debt.

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

Headquartered in Turin, Italy, SEAT publishes and provides
directory services in Italy and, through its wholly-owned
subsidiary, TDL, is the number three directories publisher in the
UK. SEAT also has a presence in Germany through Telegate, the
second-largest player in the German directory-assistance market.


SEAT PAGINE: S&P Lowers Corporate Credit Rating to 'CC'
-------------------------------------------------------
Standard & Poor's Ratings Services said that it lowered to 'CC'
from 'B-' its long-term corporate credit rating on Italy-based
classified directories SEAT Pagine Gialle SpA (SEAT).  The
outlook is negative.

"At the same time, we lowered to 'CC' from 'B' our issue rating
on SEAT's EUR750 million senior secured notes; EUR65 million new
senior secured notes; and EUR686 million new senior secured
facilities (including a new EUR90 million revolving credit
facility [RCF]).  In addition, we revised our recovery ratings on
these instruments downward to '3' from '2', reflecting our lower
recovery expectations.  We now expect meaningful (50%-70%)
recovery for creditors in the event of default, versus
substantial recovery (70%-90%) previously," S&P said.

The downgrade follows SEAT's announcement, on Jan. 28, 2013, that
it has suspended its interest payments to its bondholders.  S&P
understands that the group has a semiannual interest payment of
EUR42.3 million due on Jan. 31, 2013, on its senior secured
bonds. S&P also understands that the next interest payments on
SEAT's senior secured bank facilities are not due until Feb. 6,
2013.

Under S&P's criteria, it considers the extension of a due payment
of interest or principal as tantamount to a default if the
payment falls later than five business days after the scheduled
due date. This is irrespective of any grace period stipulated in
the debt documentation.

"In our view, the timing of SEAT's decision to suspend its
upcoming interest payments is unexpected, particularly because
its operating trend for full-year 2012 does not appear to us to
be materially different from our base-case assumption.  We see
SEAT's decision as an indication of a possible acceleration of
further restructuring discussions only few months after the
implementation of its first financial restructuring.  The board's
decision to accelerate a reassessment of the sustainability of
the capital structure, could, in our opinion, imply a more severe
deterioration in revenues and earnings than we anticipated.  In
November 2012, we forecast EBITDA of about EUR280 million-
EUR290 million in 2013," S&P said.

There is a possibility of a downgrade to 'SD' if SEAT misses its
interest payment due on Jan. 31, 2013, on the senior secured
bonds, and if S&P believes that it will not make this payment
within five business days following the scheduled due date.

In S&P's opinion, SEAT's capital structure may become
unsustainable over the medium to long term, especially in light
of ongoing deterioration in the trading environment, with limited
likelihood of any turn-around in the short term.  On the basis of
SEAT's suspension of interest payments and its debt maturity wall
in 2016-2017, S&P do not exclude the possibility of management
implementing credit-dilutive restructuring measures that S&P
would view as tantamount to a default under its criteria.

S&P is unlikely to revise the outlook to stable in the short
term, because of the continuous pressure on SEAT's revenues and
profits, and above all, the group's unwillingness to make
upcoming interest payments.



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


DEUTSCHE BANK: S&P Cuts Ratings on Three Note Classes to 'CCC-'
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its credit ratings on
all rated classes of notes in Deutsche Bank Luxembourg S.A.'s
(DBL) series 50.  At the same time, S&P has removed from
CreditWatch negative its ratings on the class A1, A2, and A3
notes.

DBL's series 50 is a resecuritization of GEMINI (ECLIPSE 2006-3)
PLC's class A notes.  At closing, the seller -- Deutsche Bank AG
-- sold to DBL GBP175.84 million of GEMINI (ECLIPSE 2006-3)'s
class A commercial mortgage-backed securities (CMBS) floating-
rate notes.  The issuance of the notes funded the purchase of
this portion of GEMINI (ECLIPSE 2006-3)'s class A notes.

The rating actions follow S&P's Jan. 29, 2013 downgrade of GEMINI
(ECLIPSE 2006-3)'s class A notes to 'CCC- (sf)' from 'B (sf)'.

S&P's analysis on the underlying collateral reflects its
November 2012 European CMBS criteria.

Based on S&P's assessment of GEMINI (ECLIPSE 2006-3), S&P
considers that the likelihood and size of expected principal
losses for the transaction's class A notes has increased.
Consequently, S&P's expectations of available principal receipts
in DBL's series 50 have declined, and S&P believes that DBL's
series 50 is now more likely to experience principal losses.

In S&P's opinion, the recovery of full principal is increasingly
unlikely in light of its decreasing expectations of available
principal receipts provided by the class A notes in GEMINI
(ECLIPSE 2006-3).  S&P considers that there is at least a one-in-
two chance that DBL series 50's class A2 notes--and all classes
subordinate to this class--may experience principal losses.  S&P
has therefore lowered to 'CCC- (sf)' its ratings on the class A2,
A3, and A4 notes.

In S&P's opinion, the likelihood of principal losses for the
class A1 notes has also increased, but to a lesser extent than
for the junior classes of notes, due to the subordination
provided by the junior notes.  S&P has therefore lowered its
rating on the class A1 notes to 'B- (sf)' from 'A (sf)'.

At the same time, S&P has removed from CreditWatch negative its
ratings on the class A1, A2, and A3 notes.  On Dec. 6, 2012, S&P
placed its ratings on these notes on CreditWatch negative
following an update to its criteria for rating European CMBS
transactions.

          STANDARD & POOR'S 17-G7 DISCLOSURE REPORT

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

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

            http://standardandpoorsdisclosure-17g7.com

RATINGS LIST

Class                 Rating
            To                    From

Deutsche Bank Luxembourg S.A.
GBP175.84 Million Fiduciary Notes Series 50

Ratings Lowered and Removed From CreditWatch Negative

A1          B- (sf)               A (sf)/Watch Neg
A2          CCC- (sf)             BBB (sf)/Watch Neg
A3          CCC- (sf)             BB (sf)/Watch Neg

Ratings Lowered

A4          CCC- (sf)             B (sf)



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


AEGON NV: To Take Over Eureko's Life & Pension Unit in Romania
--------------------------------------------------------------
Aegon on Jan. 29 disclosed that it will take over Eureko's life
insurance and pension business in Romania, further strengthening
Aegon's position in the Central and Eastern European region.
Eureko is fully owned by Achmea.

Aegon has been active in Romania since 2007 and also has
operations in Hungary, Poland, the Czech Republic, Slovakia and
Turkey.  Moreover, Aegon recently announced its entrance into
Ukraine with the acquisition of the fifth largest life insurance
company in the country.

The transaction is expected to close in the second half of 2013,
pending regulatory approval.  Eureko's Romanian life insurance
portfolio and pension fund business will be integrated into the
operations of Aegon Romania.

Following the transaction, Aegon Romania will become the
country's third largest pension provider, with approximately
650,000 pension fund members, and its life insurance portfolio
will become one of the ten largest in the country.

Gabor Kepecs, CEO of Aegon CEE and a Member of Aegon's Management
Board, said: "Given the increasing demand for life insurance and
pension-related products and services in Romania and throughout
the Central and Eastern European region, we are determined to
extend Aegon's recognized expertise to serve the developing need.
The addition of Eureko's Romanian life insurance portfolio and
pension fund business will significantly strengthen our position
and ability to provide reliable long-term financial solutions for
a growing customer base."

As reported by the Troubled Company Reporter-Europe on June 16,
2011, The Financial Times related that Aegon would repay the
remaining EUR750 million (US$1.1 billion) it owes the Dutch state
from aid received in the financial crisis.  According to the FT,
including a 50% premium, the total repayment would come to
EUR1.125 billion.  Aegon received EUR3 billion in support from
the Dutch state in 2008, the FT recounted.  Including earlier
repayments and premiums, it will have ultimately repaid the
government EUR4.1 billion, the FT disclosed.

                           About AEGON

As an international life insurance, pension and asset management
company based in The Hague, AEGON has businesses in over twenty
markets in the Americas, Europe and Asia.  AEGON companies employ
approximately 26,500 people and have some 40 million customers
across the globe.


ALG BV: Moody's Assigns 'B2' CFR; Outlook Stable
------------------------------------------------
Moody's Investors Service assigned a first time B2 Corporate
Family Rating to ALG B.V. Moody's also assigned a B2-PD
Probability of Default Rating, a B2 rating to the company's
proposed first lien term loan and Caa1 rating to its proposed
second lien term loan. ALG B.V. is the parent of three
subsidiaries, Apple Vacations, L.P., AMSTAR Holdings, L.P., and
AMResorts Holdings, L.P., that comprise the credit entity for
these ratings. ALG B.V. was acquired for USD343.5 million
by affiliates of private equity firm Bain Capital in December
2012. Ratings are subject to final terms and conditions.

New ratings assigned:

Corporate Family Rating at B2

Probability of Default Rating at B2-PD

USD20 million 5 year revolving credit facility at B2 (LGD 3, 44%)

USD150 million 6 year first lien term loan at B2 (LGD 3, 44%)

USD65 million 7 year second lien term loan at Caa1 (LGD 5, 88%)

Ratings Rationale

ALG's B2 Corporate Family Rating reflects the company's small
scale in terms of number of resorts and absolute earnings -- pro
forma EBITDA for the 12-month period ended September 30, 2012 was
less than USD40 million -- and geographic concentration with all
earnings derived from travel to Mexico and the Caribbean.
Although ALG's top line revenues are large at around USD837
million, the company's gross margin is just under USD100 million
or 12%.

Also considered is ALG's high leverage. ALG's pro-forma debt/LTM
EBITDA is approximately 5.8 times, a level that Moody's typically
considers high for the B2 rating category as well as for an
issuer with small scale in terms of revenue and earnings. Risks
also include ALG's inherent vulnerability to economic cycles that
can reduce leisure travel demand, lingering safety concerns
regarding travel to Mexico, and significant competition among
travel providers.

Ratings are supported by ALG's good interest coverage -- pro-
forma EBITDA/interest is about 2.5 times -- the benefits afforded
to the company by its vertically integrated operating segments,
and Moody's stable outlook for leisure travel reflecting modest
GDP growth in North America, the company's largest source of
customers. Additionally, Moody's expects that the company's low
capital requirements and vertically integrated business model
will mitigate, to some degree, the earnings volatility that is
experienced during periods of weak demand.

The stable rating outlook reflects a modest growth assumption for
leisure travel into Mexico and the Caribbean principally from
North America that will drive EBITDA growth and modest debt
reduction. ALG's ratings could be downgraded if the outlook for
leisure travel demand to Mexico and the Caribbean were to show
signs of deterioration or if debt/EBITDA appeared likely to rise
above 6.0 times. Moody's does not anticipate upward rating
changes given the company's small size. However, ratings could be
upgraded if debt/EBITDA declined to and could be sustained around
4.0 times and if interest coverage increased to 3.0 times.

Since the recession ended, visitation to Mexico and Caribbean has
been growing, albeit slowly, and Moody's expects that continued
growth will help ALG improve its earnings and lower its
debt/EBITDA to about 5.0 times over the next two years.
EuroMonitor International estimates outbound leisure travel from
the U.S. will increase in the low single digits over the next few
years due to modest GDP growth estimates for North America, ALG's
largest source market. Mexico is the top travel destination for
travelers from the U.S. based upon data published by the U.S.
Department of Commerce, Office of Travel and Tourism while
the Caribbean ranks as the fourth largest travel destination
after Canada and Europe. Moody's expects Mexico and the Caribbean
will continue to be top destinations for North American travelers
given proximity and all-inclusive property offerings.

AMResorts, which accounts for nearly 60% of ALG's consolidated
EBITDA, manages 32 resorts (11.7 thousand rooms) located
principally in Mexico and the Caribbean. Apple Vacations, which
accounts for about 35% of ALG's consolidated EBITDA, provided
all-inclusive vacations to more than 600 thousand passengers for
the last twelve months ended September 30, 2012. This compares to
approximately 23 million international arrivals to Mexico and 23
million to the Caribbean in 2011, according to government
statistics. Apple Vacations offers all-inclusive vacation
packages by contracting with air, hotel, ground tour providers
and adding a margin. AMResorts supplies room inventory
and AMSTAR provides ground services to support Apple Vacations
wholesale business while the wholesale business can direct
customers to the resorts and ground business segments. Apple
Vacations is a source of customers for AMResorts that Moody's
believes will maintain a higher level of occupancy at AMResorts
relative to other stand-alone resort companies, and will assist
the company's efforts to win new management contracts.

The principal methodology used in this rating was the Global
Business & Consumer Service Industry Rating Methodology published
in October 2010. Other methodologies used include Loss Given
Default for Speculative-Grade Non-Financial Companies in the
U.S., Canada and EMEA published in June 2009.

AMResorts manages 32 all-inclusive resorts located in Mexico and
the Caribbean; Apple Vacations sells all-inclusive (air, hotel,
excursions) travel packages for travel to Mexico and the
Caribbean; and AMSTAR provides transfers, optional tours, and
ground transportation services. In the last twelve months ended
September 30, 2012, ALG generated total revenues and gross profit
of USD837 million and USD98 million, respectively.


JUBILEE CDO VIII: Fitch Affirms 'B-' Rating on Class E Notes
------------------------------------------------------------
Fitch Ratings has affirmed Jubilee CDO VIII B.V.'s notes, as
follows:

EUR234.2m Class A-1 (ISIN XS0331559640): affirmed at 'AAAsf';
Outlook Stable

EUR24.0m Class A-2 (ISIN XS0331560572): affirmed at 'AAAsf';
Outlook revised to Stable from Negative

EUR42.0m Class B (ISIN XS0331560655): affirmed at 'Asf'; Outlook
Negative

EUR20.0m Class C (ISIN XS0331560903): affirmed at 'BBBsf';
Outlook Negative

EUR18.0m Class D (ISIN XS0331561208): affirmed at 'BBsf'; Outlook
Negative

EUR16.0m Class E (ISIN XS0331561463): affirmed at 'B-sf'; Outlook
Negative

The affirmation reflects the transaction's stable performance
since the last surveillance review in February 2012 and the level
of credit enhancement commensurate with the notes' current
ratings. The notes are expected to benefit from structural
deleveraging, once the transaction's reinvestment period ends in
January 2014.

The Outlook on the class A-2 notes, revised to Stable from
Negative, reflects the asset portfolio's enhanced credit quality
compared to the last review and a change in the portfolio's
maturity profile such that maturities over the next two years
have been reduced. As of the January investor report, no asset
matures within 2013, while 13.8% mature in 2014. The weighted
average life of the portfolio is 4.05 years, compared to 4.15 as
of the last review.

The Negative Outlook on the mezzanine and junior notes reflects
their vulnerability to a clustering of defaults and negative
rating migration in the European leveraged loan market due the
approaching leveraged loan refinancing wall.

The Fitch weighted average rating factor has improved slightly to
30.1, as of January 2013 investor report, from 30.4 as of last
review, above the threshold of 28. Assets rated 'CCC' or below
are reported at 10.5% of the portfolio, slightly increased from
10.0% as of the last review. However, this is offset by the
decrease of 'B-' rated assets in favor of higher ratings. The
portfolio includes two defaulted assets which account for EUR7.2
million of principal balance compared to defaults of EUR7.9
million in the last review. As of the January 2013 investor
report, all overcollateralization and interest coverage tests are
passing their required thresholds, while the reinvestment test
stands at 106.68%, below its required threshold of 107%. The
weighted average spread (WAS) on the portfolio continues to
increase, reflecting amend and extend activity. Currently WAS
stands at 3.83% compared to 3.39% as of the last review.

As part of its analysis, Fitch considered the sensitivity of the
notes' ratings to the transaction's exposure to countries where
Fitch has imposed a country rating cap lower than the ratings on
any notes in the transaction. These countries are currently
Spain, Ireland, Portugal and Greece, but may include additional
countries if there is sovereign rating migration. Fitch believes
that exposure of up to 15% of the total investment amount to
these countries, under the same average portfolio profile and
assuming the current ratings on the UK and eurozone countries are
stable, would not have a material negative impact on the notes'
ratings.

The transaction uses a macro currency swap to hedge sterling
exposure. The hedge is not perfect and residual currency risk is
borne by the structure. When a sterling asset defaults, the
sterling recovery proceeds might be insufficient to reduce the
swap balance to the performing sterling collateral balance and
the manager will have to obtain sterling in the spot market.
Also, while awaiting recovery proceeds, the structure continues
to make payments on the sterling leg of the macro currency swap,
even though the defaulted asset no longer generates sterling
interest. This currency mismatch is partially mitigated through
the use of currency options. The remaining exchange rate exposure
is absorbed by the structure.

Jubilee CDO VIII B.V. is a securitization of mainly European
senior secured loans, senior unsecured loans, second-lien loans,
mezzanine obligations and high-yield bonds. At closing a total
note issuance of EUR400m was used to invest in a target portfolio
of EUR388 million. The portfolio is actively managed by Alcentra
Ltd.



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


* PORTUGAL: Corporate Insolvencies Up 41% in 2012, Cosec Says
-------------------------------------------------------------
Andrei Khalip at Reuters reports that credit insurance company
Cosec said on Wednesday the number of firms going bust in
recession-hit Portugal jumped 41% last year, but the toll should
fall in 2013 after rising for seven years.

According to Reuters, Cosec, Portugal's largest insurer, said in
its annual report, 6,688 companies were unable to pay their debts
and declared insolvency in 2012, nearly a third of them in the
construction and real estate sector.  Three-fourths of the
insolvent companies were small businesses, Reuters notes.

The government expects the economy to have contracted 3% last
year in the worst recession since the 1970s, stoked by painful
austerity measures applied under a EUR78-billion EU/IMF bailout,
Reuters discloses.  This year, the economy is expected to shrink
less and then return to meager growth in 2014, Reuters states.

"Portugal should be among four countries (in Europe) to show a
reduction in the number of insolvencies in 2013 after seven
consecutive years of steep rises," Reuters quotes Cosec as
saying, naming the others as Britain, Switzerland and Norway.

Unlike neighboring Spain, Portugal had no major property bubble
before the economic crisis started in 2008, Reuters notes.  But
the construction and real estate sector has been hit by a sharp
drop in economic activity and internal consumption caused by
sweeping austerity measures, Reuters relates.



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


OLTCHIM: Declared Insolvent; Temporary Administrator Appointed
--------------------------------------------------------------
SeeNews reports that Oltchim said on Wednesday a court in the
southwestern Romanian county of Valcea declared the company
insolvent.

According to SeeNews, Oltchim said in a statement the court
appointed a consortium made up of Rominsolv SPRL and BDO Business
Restructuring SPRL as its temporary administrator.

The state-controlled company filed for insolvency on Jan. 24,
SeeNews discloses.

Oltchim's net loss jumped to RON308.5 million (US$95.2 million/
EUR70.3 million) in the first nine months of 2012 from RON180
million a year earlier, SeeNews says, citing the latest financial
data available from the company.  In 2011, Oltchim reported a net
loss of RON278 million on a turnover of RON1.53 billion, SeeNews
recounts.

Oltchim's shares were suspended from trading prior to the
insolvency announcement, SeeNews relates.

Oltchim is a Romanian chemical company.



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


KONDOPOGA OAO: Bank Sankt-Petersburg to Manage Debt Restructuring
-----------------------------------------------------------------
Anatoly Temkin at Bloomberg News reports that the Republic of
Karelia, a region in Russia's northwest, picked OAO Bank Sankt-
Petersburg to help OAO Kondopoga avert bankruptcy.

According to Bloomberg, the Karelia regional government said in a
statement on its Web site on Thursday that Kondopoga has debts of
as much as RUR10 billion (US$332 million).

Bloomberg relates that the administration said OAO Sberbank,
UralSib, OAO VTB and OAO Bank Vorozhdenie are among the plant's
creditors, while Bank Sankt-Petersburg will manage the debt
restructuring and further investments in the Kondopoga's
development.

Bank Sankt-Petersburg spokeswoman Anna Barkhatova is expecting
proposals from Karelia officials to manage the factory, Bloomberg
discloses.  She declined to comment further as the agreement
hasn't been signed, Bloomberg notes.

OAO Kondopoga is a pulp and paper producer.  It is Russia's
biggest newsprint paper producer.


PHOSAGRO OJSC: Fitch Assigns 'BB+' LT Issuer Default Rating
-----------------------------------------------------------
Fitch Ratings has assigned OJSC PhosAgro a Long-term foreign
currency Issuer Default Rating (IDR) of 'BB+'. The Outlook is
Stable. Fitch has simultaneously assigned Phosagro Bond Funding
Limited's proposed issue of loan participation notes (the Notes,
LPNs) an expected foreign currency senior unsecured rating of
'BB+(EXP)'.

Fitch will assign the Notes a final rating upon receipt of final
documentation materially conforming to the information reviewed.

KEY DRIVERS:

- LPNs Not Subordinated

The transaction is structured in the form of a loan from the
issuer, Phosagro Bond Funding Limited, an Ireland-based private
limited liability company established for this sole purpose, to
the borrower, OJSC PhosAgro, pursuant to the terms of a loan
agreement. Operating companies, OJSC Apatit, Balakovo Mineral
Fertilisers LLC and OJSC PhosAgro-Cherepovets, will provide
irrevocable and unconditional guarantees in respect of the
obligations of PhosAgro under the loan.

- Strong Market Position

PhosAgro, with the annual output of more than 3.6m tonnes of
DAP/MAP and overall fertilizer, feed phosphate and technical
phosphate capacity over 6.2m tonnes is the second largest global
producer of phosphate fertilisers behind MOS Holdings Inc
(Mosaic; 'BBB'/Positive). PhosAgro's sales structure by regions
is diversified with the focus on the Russian/CIS, European and
Asian markets.

- Self-Sufficiency in Raw Materials

The company owns phosphate rock deposits with more than 2bn
tonnes of high-quality resources according to the JORC Code which
provides comfortably long mine life of around 75 years based on
current extraction volumes. The company also owns ammonia
production facilities which cover more than 90% of its internal
requirements. In Fitch's view, in the longer term the
concentrated supply structure of phosphate rock and the depletion
of phosphate rock deposits held by some producers will provide
greater pricing power to the remaining phosphate rock producers
given the relatively inelastic and increasing demand for
phosphates.

- Competitive Cost Position

PhosAgro's vertically integrated business model with access to
local low-cost feedstock contributes to a low operating costs
position compared to its competitors. PhosAgro, along with other
Russian corporates does however face the potential for natural
gas prices to increase in the coming years at a higher rate than
general inflation. This may negatively affect the company's
margins, although Fitch notes that the company may be able to
partially offset this with improvements in gas consumption
efficiency at its ammonia plants.

- Conservative Capital Structure

The company's capital structure is conservative with funds from
operations (FFO) adjusted net leverage of 0.64x at end-2011 and
expected by Fitch to be 0.70x at end-2012. Forecasted negative
free cash flow in FY2013-2014 will contribute to the increase of
FFO adjusted net leverage to 0.9x by end-2013 and to 1.1x by end-
2014. Nevertheless leverage levels will remain moderate and are a
key support for the company's ratings.

- Country Risk

PhosAgro has limited geographic diversification with all the
company's assets being located in Russia. In Fitch's view, this
exposure entails higher-than average political, business and
regulatory risks.

RATING SENSITIVITY GUIDANCE:

Positive: Future developments that could lead to positive rating
actions include:

- FFO adjusted net leverage below 1.5x
- Proven track record of good corporate governance practices

Negative: Future developments that could lead to negative rating
action include:

- FFO adjusted net leverage sustainably above 2.5x
- EBITDAR margin sustainably below 20%

FULL LIST OF RATING ACTIONS:

OJSC PhosAgro:
Foreign currency Long-term IDR: assigned at 'BB+'; Outlook Stable
Foreign currency Short-term IDR: assigned at 'B';
Foreign currency senior unsecured rating: assigned at 'BB+';
Local currency Long-term IDR: assigned at 'BB+'; Outlook Stable
Local currency senior unsecured rating: assigned at 'BB+';
National Long-term rating: assigned at 'AA(rus)'; Outlook Stable

Phosagro Bond Funding Limited:
Expected foreign currency senior unsecured rating on the proposed
Loan Participation Notes: 'BB+(EXP)'



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


ABENGOA FINANCE: S&P Assigns 'B+' Rating to EUR250MM Sr. Notes
--------------------------------------------------------------
Standard & Poor's Ratings Services said that it assigned its
issue rating of 'B+' to the EUR250 million 8.875% senior notes
due 2018 issued by financing vehicle Abengoa Finance S.A.U.  The
issue rating is at the same level as the corporate credit rating
on Abengoa Finance's parent, Spain-headquartered engineering and
construction, technology, and energy group Abengoa S.A.

At the same time, S&P placed the issue rating on CreditWatch with
negative implications, in line with the corporate credit rating
on Abengoa.  In addition, S&P assigned a recovery rating of '4'
to the senior notes, indicating its expectation of average (30%-
50%) recovery prospects in the event of a default.

Abengoa will use the proceeds from this issuance, alongside those
from the recently issued EUR400 million convertible notes due
2019 (not rated), principally to meet debt maturities in 2013 and
2014.

                         RECOVERY ANALYSIS

The senior notes are unsecured and share the same guarantee
package as the existing senior notes.  The documentation for the
new issuance is broadly similar to that for the existing rated
debt.

S&P's recovery analysis reflects its valuation of Abengoa as a
going concern.  S&P's valuation is underpinned by Abengoa's
diversified portfolio of businesses, some of which benefit from
good growth prospects and regulated environments, and the group's
strong reputation in the engineering and construction markets.

S&P will update its recovery analysis when it resolves the
current CreditWatch placement on Abengoa.

RATINGS LIST

New Rating; CreditWatch/Outlook Action

Abengoa Finance S.A.U.
Senior Unsecured*                      B+/Watch Neg
   Recovery Rating                      4

Ratings Unchanged

Abengoa Finance S.A.U.
Senior Unsecured*                      B+/Watch Neg
  Recovery Rating                       4

Abengoa S.A.
Senior Unsecured                       B+/Watch Neg
   Recovery Rating                      4

* Guaranteed by Abengoa S.A.


CABLEUROPA S.A.U.: Moody's Rates New EUR250MM Sr. Notes '(P)B1'
---------------------------------------------------------------
Moody's Investors Service assigned a provisional (P)B1 rating
with a loss given default assessment of LGD3 (43%) to the EUR250
million worth of senior secured notes due in 2020 to be issued by
Nara Cable Funding II Limited (Nara II), a special purpose
vehicle that will on-lend the funds to Cableuropa S.A.U. (ONO).
Concurrently, Moody's has affirmed the existing ratings of ONO
and related entities, but changed the outlook to stable from
positive.

ONO will use the proceeds of this issuance to voluntarily prepay
all amortization payments until 2016 due under Term Loan A of its
senior facility. The new notes will rank pari passu with ONO's
existing senior secured facility and senior secured notes. The
new notes will have essentially the same terms and covenant
package as the senior secured notes issued by Nara Cable Funding
Limited.

Moody's issues provisional instrument ratings in advance of the
final sale of securities and these ratings reflect the rating
agency's preliminary credit opinion regarding the transaction
only. Upon a conclusive review of the final documentation,
Moody's will endeavor to assign a definitive rating to the notes.
The definitive rating may differ from the provisional rating.

Ratings Rationale

"The (P)B1 rating assigned to the new notes is one notch higher
than ONO's B2 corporate family rating, reflecting the impact of
the presence of junior debt in the company's capital structure,"
says Ivan Palacios, a Moody's Vice President - Senior Credit
Officer and lead analyst for ONO. This junior debt primarily
comprises a total of EUR460 million worth of senior subordinated
notes due in 2019 issued by ONO Finance II Plc.

"This transaction is leverage neutral but has some credit-
positive implications, such as the extension of ONO's debt
maturity profile and the removal of all mandatory debt
amortizations until 2016," explains Mr. Palacios. "In addition,
the company is in the process of amending its senior facility to
enhance its flexibility in the event of an IPO. Nevertheless, we
expect the new debt to be more expensive than the term loan that
it is retiring, which will have some impact on the company's cash
flows."

"Despite the broadly credit-positive features of this bond
issuance, Moody's has changed the outlook on ONO's ratings to
stable from positive to reflect the reduced visibility with
regard to the company's medium-term operational performance due
to the increasingly difficult macroeconomic and competitive
environment. As a result, an upgrade of the rating over the next
12 months is now unlikely," adds Mr. Palacios.

ONO has demonstrated a resilient operating performance throughout
Spain's macroeconomic downturn, and for the last 12 months ended
September 2012 it reported solid revenue growth, albeit at the
expense of some margin pressure. This performance has been
supported by its technologically advanced high-speed networks and
new product offerings, such as mobile and TiVo.

However, Moody's believes that ONO will find it increasingly
difficult to sustain these levels of performance. This is because
the macroeconomic environment in Spain, where ONO generates 100%
of its cash flows, will remain challenging. Moody's expects
Spain's GDP to decline by -1.4% in 2013 (following a similar
decline in 2012) and unemployment to reach 26%. This recessionary
environment is adversely affecting consumer disposable income and
some of ONO's most price-sensitive customers are dropping their
telecom or television services.

In addition, the Spanish government has recently taken measures
to increase tax collections, which are affecting all corporates
in general and ONO in particular. The recent increase in VAT
makes ONO's products more expensive for the consumer, while
restrictions on the use of tax credits and on the tax
deductibility of depreciation will result in an increase in taxes
payable in 2013, reducing the company's available free cash flow.

In terms of competition, the recent launch of a convergent
quadruple-play offer (called Movistar Fusion) by Telefonica at
very competitive prices has forced the rest of Spain's
telecommunications service providers to reposition their
offerings at lower levels. This, combined with the expected
acceleration of Telefonica's fibre-to-the-home (FTTH) network
rollout, may reduce ONO's competitive advantage and its ability
to price its high-quality products at a premium.

ONO's B2 corporate family rating (CFR) reflects the company's
position as Spain's largest cable operator and leading
alternative provider of telecommunications, broadband and
internet and pay-TV services, its resilient operating performance
in a challenging environment, and its solid liquidity profile.
These considerations are balanced by the company's high, albeit
reducing, leverage (Moody's expects ONO's adjusted debt/EBITDA to
be 4.8x at YE 2012), its weakening interest coverage ratios due
to the high cost of debt, and the reduced visibility with regards
to the company's future operating performance in the context of a
more competitive environment and a recessionary macroeconomic
environment. A deterioration of ONO's operating performance
could, over the longer term, reduce the company's headroom under
the financial covenants of its senior facility, thereby exerting
pressure on its liquidity profile.

The stable outlook reflects Moody's expectation that the company
will maintain its market position and profitability levels, while
reporting growing positive free cash flow generation in the
medium term.

What could change the rating up/down

Upward pressure on the rating will hinge on the ability of ONO's
management to deliver on its business plan, while continuing with
its deleveraging efforts, such that debt/EBITDA (as adjusted by
Moody's) remains sustainably below 5.0x, EBITDA to interest
expense trends towards 3.0x and the company generates growing
positive free cash flow. A rating upgrade could result if,
through the proceeds from an IPO, ONO is able to increase the
pace at which it is currently reducing its debt levels. However,
upward pressure on the rating could be tempered if a significant
deterioration in the macroeconomic or competitive environment in
Spain were to affect ONO's prospects of successfully implementing
its business plan.

Downward rating pressure could arise if (1) ONO's EBITDA
generation declines below Moody's estimates (whether as a result
of strategic or operational issues or a more material
deterioration of the domestic macroeconomic or competitive
environment), (2) the company's free cash flow generation turns
negative in light of its high cost of debt, resulting in debt
affordability concerns, or (3) Moody's were to become concerned
about ONO's liquidity as a result of a reduction in headroom
under the company's financial covenants.

List of affected ratings:

Assignments:

Issuer: Nara Cable Funding II Limited

  EUR250M Senior Secured Regular Bond/Debenture, Assigned (P)B1

  EUR250M Senior Secured Regular Bond/Debenture, Assigned a range
  of LGD3, 43 %

Outlook Actions:

Issuer: Cableuropa S.A.U.

  Outlook, Changed To Stable From Positive

Issuer: Nara Cable Funding Limited

  Outlook, Changed To Stable From Positive

Issuer: ONO Finance II Plc

  Outlook, Changed To Stable From Positive

Outlook Assigned:

Issuer: Nara Cable Funding II Limited

  Outlook, Stable

Affirmations:

Issuer: Nara Cable Funding Limited

  USD1000M 8.875% Senior Secured Regular Bond/Debenture Dec 1,
  2018, Affirmed B1

  USD310M 8.875% Senior Secured Regular Bond/Debenture Dec 1,
  2018, Affirmed B1

  EUR1000M 8.875% Senior Secured Regular Bond/Debenture Dec 1,
  2018, Affirmed B1

Issuer: ONO Finance II Plc

  USD225M 10.875% Senior Unsecured Regular Bond/Debenture Jul 15,
  2019, Affirmed Caa1

  EUR295M 11.125% Senior Unsecured Regular Bond/Debenture Jul 15,
  2019, Affirmed Caa1

Principal Methodology

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

Headquartered in Madrid, Cableuropa S.A.U. (ONO) provides
telecommunications, broadband and internet and pay-TV services.
It is the only cable operator in the country with national
coverage. For the 12 months ended September 2012, ONO generated
net revenues of EUR1.545 billion and EBITDA of EUR756 million.


NARA CABLE: Fitch Assigns 'BB-(EXP)' Rating to Sr. Secured Notes
----------------------------------------------------------------
Fitch Ratings has assigned Nara Cable Funding II's proposed 2020
senior secured euro denominated notes an expected rating of 'BB-
(EXP)' and an expected Recovery Rating of 'RR2'. Nara Cable II is
a finance vehicle for Cableuropa S.A.

The notes' final rating is subject to the completion of the
transaction and final terms conforming to information received
and reviewed by Fitch. The notes will benefit from similar
protection and security package as the group's existing senior
secured notes -- including an incurrence test of 5.5x EBITDA
total debt test, and a 4.5x EBITDA senior test.

Collateral established via the creditor rights secured under the
new notes tranche (of the senior bank facility) includes i) a
first ranking pledge over the shares in Cableuropa, ii) security
over certain bank accounts, iii) security over certain
intercompany loans including the loan from ONO Finance II, the
issuer vehicle of the group's subordinated notes and iv) an
agreement to grant a first ranking mortgage over the network
assets upon request from the lenders following the occurrence of
an event of default.

The transaction is a further step in the company's ongoing
refinancing program, and is intended to refinance amortizations
under the company's term loan A. Subject to the amount raised,
the company will have substantially removed refinancing risk over
the next three-four years.

Cableuropa's Long-term Issuer Default Rating (IDR) of
'B'/Positive takes into account the company's revenue and cash
flow resilience, despite a difficult economy and communications
market. Revenues continue to grow, ahead 5.5% in Q312 and EBITDA
margins in the high forties (48.3% in Q312) remain strong. Net
debt to EBITDA leverage of 4.54x is low for the rating level,
which in combination with ongoing refinancing activity support
the Positive Outlook.

Refinancing activity has had the effect of pushing up notional
borrowing costs, while the company's US$1.0 billion 2018 secured
notes raised in 2012, has introduced a relatively high currency
mismatch, given the purely domestic nature of revenues. Solid
free cash flow generation and modest top-line growth should
however support deleveraging trends. Funds from operations (FFO)
net leverage consistently below 5.0x (equivalent to net debt to
EBITDA of 4.5x) coupled with solid ongoing free cash flow could
lead to a higher rating.

High rates of unemployment, the collapse of the property sector
and uncertain long term effects of austerity in Spain, underpin
caution in the rating, although operating and financial
performance continue to prove resilient against this backdrop.


* SPAIN: Recession Deepens; May Have to Ease Budget Goals
---------------------------------------------------------
Angeline Benoit at Bloomberg News reports that Spain's recession
deepened more than economists forecast in the fourth quarter as
the government's struggle to rein in the euro region's second-
largest budget deficit weighed on domestic demand.

According to Bloomberg, the Madrid-based National Statistics
Institute said on Wednesday that gross domestic product fell 0.7%
in the three months through December from the previous quarter,
when it declined 0.3%.  That's more than the 0.6% contraction the
Bank of Spain predicted on Jan. 23, Bloomberg notes.  INE said
that GDP dropped 1.8% in the fourth quarter from a year earlier
and 1.37% in the full year from 2011, Bloomberg relates.

The European Commission this week signaled it may recommend
easing Spain's budget goals for the fourth time in a year as
unemployment in the euro region's fourth-largest economy rose to
a record 26% at the end of Prime Minister Mariano Rajoy's first
year in power, Bloomberg discloses.

"Risks on this number are clearly on the downside," Bloomberg
quotes Ruben Segura-Cayuela and Laurence Boone, London-based Bank
of America Merrill Lynch economists, as saying in a note after
INE released GDP data.  "The recent behavior of indicators would
suggest a stronger impact than anticipated of tax increases on
domestic demand."

Bloomberg notes that while the government says it probably missed
its goal of lowering the shortfall to 6.3% of GDP in 2012, it
maintains its target of 4.5% for this year is acheivable as it
sees the economy recovering in the second half.

Budget Minister Cristobal Montoro told lawmakers in Madrid on
Wednesday he raised taxes last year to prevent the country from
collapsing, Bloomberg relates.  The Bank of Spain said last week
domestic demand may have dropped 3.9% from a year earlier in
2012, nearly twice as sharply as in 2011, as output suffered from
five austerity rounds in less than a year, Bloomberg recounts.
The last cut public wages and unemployment benefits while raising
value-added tax, Bloomberg discloses.

Missed payments as a proportion of total loans at Spanish banks
rose to a record 11.4% in November, Bloomberg says.

The International Monetary Fund last week cut its forecast for
Spain's economy and predicts a 1.5% contraction this year as the
only drivers left weaken amid a European slowdown, Bloomberg
discloses.



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


FERREXPO FINANCE: Fitch Rates US$500MM Guaranteed Notes 'B(exp)'
----------------------------------------------------------------
Fitch Ratings has assigned Ferrexpo Finance plc's proposed issue
of US$500 million five-year guaranteed notes an expected foreign
currency senior unsecured rating of 'B(exp)'. Ferrexpo plc's
Long-term Issuer Default Rating (IDR) and its Short-term IDR are
both 'B'. The Outlook on the Long-term IDR is Stable.

The new notes will share largely similar terms and conditions to
the existing 2016 notes. The main exception being with respect to
the debt incurrence restriction (consolidated gross debt/LTM
EBITDA) which is set at 3.0x or below in the current
documentation compared to at or below 2.5x in the 2016 notes.

As with the existing 2016 notes the new notes will be issued by
Ferrexpo Finance plc (a special purpose vehicle incorporated in
England and Wales). They will be guaranteed by Ferrexpo Plc,
Ferrexpo AG and Ferrexpo Middle East FZE (FME) and benefit from a
surety agreement from the Ukrainian incorporated Ferrexpo Poltava
GOK Corporation (Ferrexpo Poltava Mining).

Proceeds from the notes are expected to be primarily used to fund
the group's capex program and provide additional working capital
liquidity.

The notes' final rating is contingent on the receipt of final
documentation conforming to information already received and
further details regarding the amount and tenor of the notes.

KEY DRIVERS:

Ratings Constrained by Sovereign:

Ferrexpo's ratings are constrained by the Ukrainian sovereign
rating ('B'/Stable) due to its reliance upon a single mining area
in Ukraine and its exposure to the local operating environment
including high domestic cost inflation. The ratings are also
limited by the company's comparatively smaller scale, lack of
commodity diversification and end-customer sales concentration
(four key customers account for a majority of sales).

Moderate Net Leverage Maintained:

Ferrexpo has historically followed a conservative financial
approach with funds from operations (FFO) gross leverage
generally below 1.5x. Gross leverage has however increased over
the past two years as new debt was incurred to pre-fund
development spending on the Yeristovo mine. Fitch expects FFO
gross leverage to peak at above 2.5x in 2012/13 before gradually
declining in subsequent years. Net leverage levels will remain
conservatively below 1.5x over this period.

Gas Price Pressure:

Ferrexpo reported a 21% increase in C1 cash costs to around US$60
tonne for the period to end-September 2012 (9 months). This
increase was driven by a 19.5% rise in electricity costs and a
31.6% rise in gas prices. Energy costs in aggregate have
historically accounted for around 48% of Ferrexpo's C1 cash
costs. Despite the increase in cash costs Ferrexpo retains a
competitive cost position in the second quartile compared to
Asian producers and in the first quartile verses other Central
European producers. For 2013 the company's current assumption is
that cash costs will be stable year-on year.

Favourable Location:

Ferrexpo benefits from a favorable location at its Poltava and
Yeristovo mines, with access to Black Sea ports and into central
Europe via rail and waterway links. The company is also well
located to expand its sales into the Middle East and Asian
markets compared to Brazilian competitors.

RATING SENSITIVITY ANALYSIS:

Positive: Future developments that could lead to positive rating
action include:

- The Ukrainian sovereign rating is upgraded up to a cap of 'B+'
   or the Outlook is revised to positive

- Sustained FFO net leverage below 1.0x over the medium term.

- Reduction in key customer concentration and an increase in
   overall business scale and operational diversification

Negative: Future developments that could lead to negative rating
action include:
- Downgrade of Ukrainian sovereign rating or revision of Outlook
   to negative

- Net leverage (gross debt/funds from operations) sustained
   above 2.0x

- EBITDA margin below 18% on a sustained basis


FERREXPO FINANCE: Moody's Rates USD500MM Notes Issue '(P)Caa1'
--------------------------------------------------------------
Moody's Investors Service assigned a (P) Caa1/LGD4 (69) rating to
new USD 500M Senior Unsecured Notes to be issued by Ferrexpo
Finance Plc, a fully owned subsidiary of Ferrexpo Plc. All other
ratings of the group remain unchanged. The outlook on all ratings
is negative.

Rating Rationale

The new USD500 million Senior Unsecured Guaranteed Notes will
rank pari passu with all existing senior unsecured and
unsubordinated indebtedness of the group. The one-notch
differential between the B3 corporate family rating (CFR) and the
rating assigned to the senior unsecured notes reflects Ferrexpo's
balanced capital structure, which includes several pre-export
finance and equipment finance facilities, which rank ahead of the
unsecured notes and unsecured non-debt obligations of the
company. The relatively large amount of higher ranking senior
secured liabilities disadvantages the recovery prospects of the
lower ranking senior unsecured notes in the event of default.

The CFR has been reaffirmed at B3, given it remains constrained
by (1) Ferrexpo's high exposure to Ukraine's fiscal and legal
environment, given all the group's mining assets and production
facilities are located within the country (2) the group's
exposure to a single commodity, iron ore, whose prices have
proven highly volatile and are expected to remain soft over a
protracted time; (3) the fact that the group's iron ore resources
are concentrated in a single location, which increases production
outage risk; (4) a high level of customer concentration risk,
with two customers accounting for 44% of the group's revenues in
2011; and (5) its concentrated ownership structure, with a single
individual, Mr. Zhevago - who is also the group CEO - retaining a
51% ownership interest in the company.

The CFR also recognizes Ferrexpo's (1) access to sizeable iron
ore reserves and unexploited iron ore resources adjacent to its
existing iron ore deposits; (2) track record as a reliable iron
ore pellet producer; and (3) profitable mining and processing
operations, albeit Moody's does not anticipate any significant
recovery in operating profitability in 2013, after its reduction
in 2012 to date compared to 2011, mainly as a result of
protracted weakness in iron ore prices and inflationary cost
pressure in Ukraine.

Moody's also acknowledges the good liquidity profile of Ferrexpo,
pro-forma for the proceeds of the new notes. The large cash
balance of the company (c. USD647 million as of September 2012),
together with the expected bond proceeds, will be more than
adequate to cover the main liquidity needs over the next 12 -- 18
months, represented by (i) committed Capex (around USD 140
million), as well as rising working capital requirements, mainly
due to material delays in recovering overdue VAT from Ukrainian
tax authorities. Moody's also expects Ferrexpo to remain
compliant with its financial covenants, with a comfortable
headroom.

Rating Outlook

The negative outlook reflects the Ukraine's sovereign rating
outlook and the subsequent risk of a further downgrade of the
foreign-currency bond country ceiling.

What Could Change the Rating - Up

Although positive rating pressure is remote at this stage,
Moody's believes that the rating could be upgraded if the
foreign-currency bond country ceiling is raised and if Ferrexpo
maintains a good liquidity position. Furthermore, an improved
business profile, characterized by a lower concentration of
strategic assets in a single country and location, could also
lead to positive rating pressure over time.

The rating outlook could be changed to stable if the operating
environment in Ukraine starts to improve, which would be signaled
by a stabilization of Ukraine's sovereign rating outlook.

What Could Change the Rating - Down

Downward pressure on the rating could follow further downgrade
actions on the sovereign rating and the foreign-currency bond
country ceiling. The rating would also come under negative
pressure in case of a further material deterioration of iron ore
fundamentals, leading to a weaker financial performance and
negative free cash flows which would make the liquidity profile
of the issuer more fragile.

The principal methodology used in this rating was the Global
Mining Industry 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.

Ferrexpo Plc, headquartered in Switzerland and incorporated in
the UK, is a mid-sized iron ore pellet producer with mining and
processing assets located in Ukraine (B3 negative). The group has
the fourth-largest global iron ore reserves behind Vale, Rio
Tinto and BHP Billiton. It currently has total Joint Ore Reserves
Committee Code (JORC) classified resources of 6.7 billion tons,
around 1.5 billion tons of which are proved and probable
reserves. The average grade of Ferrexpo's ore is approximately
31% Fe. In last 12 months to June 2012, the group generated sales
of $1.66 billion and EBITDA of $631 million.


FERREXPO FINANCE: S&P Rates Proposed Unsecured Notes 'B'
--------------------------------------------------------
Standard & Poor's Ratings Services said it assigned its 'B' issue
rating to the proposed unsecured guaranteed notes to be issued by
Ferrexpo Finance PLC, a wholly owned subsidiary of Ukraine-based
mining company Ferrexpo PLC.  For the purpose of recovery
analysis, S&P assumes that the size of the issuance will be
US$500 million with maturity in five years.  The actual size will
depend on market demand.  The issue rating is in line with the
corporate credit rating on Ferrexpo.

S&P has assigned a recovery rating of '4' to the notes,
indicating its expectation of average (30%-50%) recovery in the
event of a payment default.  The ratings are limited by S&P's
view of the unfavorable Ukrainian insolvency regime, the
unsecured nature of the proposed notes, and the somewhat
permissive terms and conditions of the proposed documentation,
which are in line with existing notes.

The issue and recovery ratings are subject to S&P's review of the
final documentation.

"At the same time we affirmed our 'B' issue rating on the
outstanding senior unsecured bond issued in 2011 and maturing in
2016.  We lowered the recovery rating on these notes to '4' from
'3', reflecting our expectation of lower recovery in the range of
30%-50% versus 50%-70% previously.  Our revision of the recovery
rating reflects the higher amount of pari pasu debt and
significant priority ranking debt, which includes a $420 million
revolving pre-export facility (PXF)," S&P said.

"We expect the proposed notes to be unsecured obligations of the
issuer, but to benefit from guarantees from Ferrexpo PLC,
Ferrexpo AG, and Ferrexpo Middle East FZE, and a surety from
Ferrexpo Poltava Mining.  Sureties differ from guarantees in that
they are conditional--if the underlying obligation subject to the
surety is declared invalid, the surety may be terminated.  In
Ferrexpo's case, we also understand that claims under the surety
may be subject to foreign payment controls," S&P added.

In line with the existing bond's documentation, S&P expects the
proposed bond to have typical documentation for an issuance of
this kind, including an incurrence covenant limiting, among other
things, the raising of additional indebtedness.  The incurrence
test concerns the consolidated gross debt-to-EBITDA ratio, which
is limited to 3.0x, allowing higher flexibility compared with the
2.5x test included in the outstanding bond's documentation.  The
documentation also includes a negative pledge and restrictions on
dividend payments, mergers, acquisitions, and asset disposals,
although this is subject to a number of carve-outs.  The
documentation also allows a large permitted indebtedness basket
of $700 million, which can be secured.  The existing $420 million
PXF is not included in this basket.

To determine recoveries S&P simulated a default scenario.  Under
its hypothetical default scenario--assuming high capex, declining
iron ore prices and sales volumes, and rising interest rates on
variable rate debt--default occurs in 2015, with EBITDA declining
to about US$263 million.  At the hypothetical point of default,
S&P values Ferrexpo at about US$1,052 million, using mainly a
market multiple approach.

After deducting priority liabilities comprising enforcement
costs, 50% of the company's pension liabilities, leases, drawings
on export credit facilities, and PXF S&P contemplates a coverage
of the US$500 million proposed bond and US$500 million
outstanding bond plus six months' of prepetition interest in the
lower end of 30%-50% range, equivalent to a recovery rating of
'4'.



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


ASSET REPACKAGING: S&P Lowers Rating on 16 Note Classes to 'CCC-'
-----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its credit ratings on
all classes of notes in Asset Repackaging Vehicle Ltd.'s (ARV)
series 2010-4 and 2010-5.  At the same time, S&P has removed from
CreditWatch negative its ratings on the class A1 and A2 notes in
both transactions.

ARV's series 2010-4 and 2010-5 are resecuritizations of GEMINI
(ECLIPSE 2006-3) PLC's class A notes.  At closing, the respective
sellers--Lazuli Ltd. in series 2010-4 and HSBC Bank PLC in series
2010-5--each sold to ARV a portion of GEMINI (ECLIPSE 2006-3)'s
class A commercial mortgage-backed securities (CMBS) floating-
rate notes.  The issuance of the notes funded the purchase of
these portions of GEMINI (ECLIPSE 2006-3)'s class A notes.

Today's rating actions follow S&P's Jan. 29, 2013 downgrade of
GEMINI (ECLIPSE 2006-3)'s class A notes to 'CCC- (sf)' from 'B
(sf)'.

S&P's analysis on the underlying collateral reflects its November
2012 European CMBS criteria.

Based on S&P's assessment of GEMINI (ECLIPSE 2006-3), it
considers that the likelihood and size of expected principal
losses for the transaction's class A notes has increased.
Consequently, S&P's expectations of available principal receipts
in ARV's series 2010-4 and 2010-5 have declined, and S&P believes
that both series are now more likely to experience principal
losses.

"In our opinion, the recovery of full principal is increasingly
unlikely in light of our decreasing expectations of available
principal receipts provided by the class A notes in GEMINI
(ECLIPSE 2006-3).  We consider that there is at least a one-in-
two chance that ARV's series 2010-4 and 2010-5's class A2 notes--
and all classes subordinate to these classes--may experience
principal losses.  We have therefore lowered to 'CCC- (sf)' our
ratings on the class A2, A3, A4, A5, A6, A7, B, and C notes in
both transactions," S&P said.

In S&P's opinion, the likelihood of principal losses for the
class A1 notes has also increased, but to a lesser extent than
for the junior classes of notes, due to the subordination
provided by the junior notes.  S&P has therefore lowered its
rating on the class A1 notes to 'B- (sf)' from 'A (sf)' in both
transactions.

At the same time, S&P has removed from CreditWatch negative its
ratings on ARV's series 2010-4 and 2010-5's class A1 and A2
notes.  On Dec. 6, 2012, S&P placed its ratings on these notes on
CreditWatch negative following an update to its criteria for
rating European CMBS transactions (see "Ratings On 240 Tranches
In 77 European CMBS Transactions Placed On CreditWatch Negative
Following Criteria Update").

          STANDARD & POOR'S 17-G7 DISCLOSURE REPORT

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

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

            http://standardandpoorsdisclosure-17g7.com

RATINGS LIST

Class                 Rating
            To                    From

Asset Repackaging Vehicle Ltd.
GBP69.4 Million Resecuritization Notes Series 2010-4

Ratings Lowered and Removed From CreditWatch Negative

A1          B- (sf)               A (sf)/Watch Neg
A2          CCC- (sf)             BB (sf)/Watch Neg

Ratings Lowered

A3          CCC- (sf)             B (sf)
A4          CCC- (sf)             B (sf)
A5          CCC- (sf)             B (sf)
A6          CCC- (sf)             B (sf)
A7          CCC- (sf)             B (sf)
B           CCC- (sf)             B (sf)
C           CCC- (sf)             B (sf)

GBP14.8 Million Resecuritization Notes Series 2010-5

Asset Repackaging Vehicle Ltd.
Ratings Lowered and Removed From CreditWatch Negative

A1          B- (sf)               A (sf)/Watch Neg
A2          CCC- (sf)             BB (sf)/Watch Neg

Ratings Lowered

A3          CCC- (sf)             B (sf)
A4          CCC- (sf)             B (sf)
A5          CCC- (sf)             B (sf)
A6          CCC- (sf)             B (sf)
A7          CCC- (sf)             B (sf)
B           CCC- (sf)             B (sf)
C           CCC- (sf)             B (sf)


COBBETS LLP: Appoints Administrators to Find Buyer
--------------------------------------------------
Jeremy Hodges at Bloomberg News reports that Cobbetts LLP will
become the first major U.K. law firm to seek protection from
creditors since 2010.

According to Bloomberg, the firm, the 62nd-largest by revenue in
the U.K., said the weak economy led it to the decision to appoint
administrators to find a buyer.

"The appropriate course at this time is for the firm to obtain
the protection of an interim statutory moratorium to enable a
sale of the business," Bloomberg quotes Cobbetts as saying in an
e-mailed statement.

"We are in an environment where the legal market across the U.K.
looks pretty flat," Tony Williams, principal at Jomati
Consultants LLP, as cited by Bloomberg, said.  "Winners and
losers are starting to emerge and Cobbetts is a firm that was
squeezed from all sides."

Cobbetts, known for its real estate and mid-market corporate
work, had revenue of GBP45.4 million (US$71.7 million) in the
2011-12 financial year, making it the 62nd-largest U.K. law firm,
according to Legal Business Magazine.  The firm had offices in
Birmingham, Leeds, London and Manchester.  Cobbetts LLP has
nearly 500 employees.


HEWLETT GROUP: In Administration, Seeks Buyer
---------------------------------------------
theconstructionindex.co.uk reports that Hewlett has gone into
administration, the latest victim of the construction industry
slowdown.

A buyer for the business is being sought, according to
theconstructionindex.co.uk.  The report relates that 300 jobs are
at risk.

The report notes that insolvency specialists from BDO are now
running the affairs of group companies Hewlett Civil Engineering,
Hewlett Rail, Hewlett Plant Hire and Portford Homes.

The report relates that current projects include a new car park
at Westonbirt Arboretum in Gloucestershire for the Forestry
Commission; and site remediation for a Bellway housing
development in Sheffield on the site of the former Psalter Lane
Campus.

"This is a fresh blow for the construction industry in Yorkshire.
We had hoped to have seen the end of the closure of longstanding
companies and that the industry was beginning to turn the corner.
Sadly, this is not the case. . . . It is currently unclear what
the intentions of the administrators are.  Ucatt will support all
attempts to preserve the jobs of the company's workforce. If
members are laid off then we will ensure that they receive
everything that they are entitled to," the report quoted Rob
Morris, acting Yorkshire regional secretary for construction
union Ucatt, as saying.

Leeds-based civil engineering contractor Hewlett was founded in
1987 by John Duffy, who remained an active chairman at time of
the collapse.


INFINIS PLC: Moody's Rates GBP350MM Sr. Notes Issue '(P)Ba3'
------------------------------------------------------------
Moody's Investors Service assigned a provisional (P)Ba3 senior
unsecured rating with a stable outlook to the GBP350 million of
senior notes due 2019 to be issued by Infinis plc. Concurrently,
Moody's has placed the B1 corporate family rating (CFR) and Ba3-
PD probability of default rating (PDR) of the parent company,
Infinis Holdings, on review for upgrade. Moody's will withdraw
the B1 senior unsecured rating of the existing GBP275 million
notes due 2014 once Infinis has repaid them using the proceeds of
this new issuance.

"Our assignment of the (P)Ba3 rating to the notes follows
Infinis's proposed refinancing announcement and reflects progress
made by the group towards further diversifying its renewable
energy technology interests," says Scott Phillips, a Moody's
Assistant Vice President in Moody's Infrastructure Finance group
and lead analyst for Infinis.

Moody's rating assessment of Infinis Holdings focuses on Infinis
as the dominant subsidiary but further takes into account other
activities and indebtedness within the group.

Ratings Rationale

The assignment of a (P)Ba3 rating -- one notch higher than the
current CFR -- to the notes follows the announcement by Infinis
of its proposed refinancing and reflects the group's progress at
diversifying away from landfill gas electricity generation (LFG)
into other forms of renewable energy technology.

While a key credit constraint remains the strong bias of the
group towards this single fuel source, the business has made and
continues to make progress at diversifying into other forms of
renewable energy generation, most notably onshore wind. Infinis
has achieved this progress through both organic growth and also
via acquisitions. While the high coupon of the existing notes
means the group's funds from operations (FFO)/interest coverage
ratio is weak, this will be marginally improved upon refinancing.

The proposed transaction coincides with a wider restructuring of
the group, the broad steps of which include (1) the transfer of
the remaining landfill gas assets into Infinis to create an
enlarged bond group; (2) the transfer of the group's hydro and
wind assets into two individual holding companies; (3) the
prepayment of a legacy project finance facility; (4) the
arrangement of a new GBP20 million revolving credit facility at
the level of Infinis Energy Holdings Limited; and (5) the
issuance of GBP350 million in new notes and the redemption of
existing notes.

Similarly to the existing debt, the draft terms of the notes
provide certain creditor protections but the provisions are not,
in Moody's opinion, sufficient to insulate Infinis's lenders from
the risks inherent in the group as a whole. The indenture has
restricted payment and debt incurrence covenants based around a
fixed-charge coverage ratio of 2.0x and (in the case of
restricted payments) a basket based on 50% of consolidated net
income. It also permits restricted payments up to an aggregate
amount of GBP15 million and a further GBP30 million of permitted
investments in affiliates. Therefore, while at current power
prices operating cashflow generation is likely to be strong, a
reduction in net leverage will largely depend on the company's
distribution policy.

Moody's expects that Infinis's consolidated leverage, on a
debt/EBITDA basis, will average around 4.5x in the medium term
and that the group's FFO/debt will be in the low teens in
percentage terms, which is consistent with wholesale power prices
remaining at current levels. The group's capital expenditure
needs are moderate as maintenance requirements will reduce over
time as the LFG business declines. However, the transaction will
leave Infinis exposed to significant refinancing risk on maturity
of the notes, at which time the landfill gas reserves will have
been further depleted.

In assigning the (P)Ba3 rating to the notes, Moody's has assessed
that the group has a loss given default (LGD) rate of 65%. This
assessment reflects the group's debt capital structure, which
will primarily consist of the notes to be issued. The 65% LGD
assessment is in line with Moody's general approach towards all-
bond transactions. Accordingly, Moody's LGD estimate for the
notes is LGD4.

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

Outlook

The stable outlook for the new notes reflects Moody's view that
Infinis's capital structure is reasonably resilient to downside
sensitivities.

What could change the rating up/down

The review for upgrade of the CFR is contingent upon the
successful execution of the proposed refinancing. Post
refinancing, there is limited potential for a rating upgrade in
the near-to-medium term.

However, a decline in wholesale power prices (e.g., to GBP40-
GBP45 per megawatt hour) would likely result in Infinis's
debt/EBITDA ratio trending towards 5.0x and its FFO/debt ratio
towards 10%, which would exert downward pressure on the rating.
In addition, a systematic issue that affects the group's ability
to recover methane gas from landfill sites would likely be credit
negative. This could be due to a change in environmental
legislation or a change in the group's expectation of gas
recovery. However, Moody's believes that the emergence of such a
systematic problem is unlikely and that the risk is managed by
operating at a large number of different sites. Furthermore,
Infinis has capped and closed many of its LFG sites, thus
protecting its gas recovery from any future legislative changes.

Principal methodology

The principal methodology used in rating Infinis was the
"Unregulated Utilities and Power Companies" methodology,
published in August 2009.

Infinis Holdings, based in Northampton (England), is a holding
company for a group focused on renewable energy. The group's
principal subsidiary, Infinis, generates electricity from
landfill gas with an installed capacity of approximately 336
megawatts. Infinis accounts for approximately 40% of the UK
landfill gas market, substantially ahead of its peers, and is one
of the largest renewable electricity generators in the UK.


LEHMAN BROTHERS: Watchdog Clears E&Y Over Client Funds Audit
------------------------------------------------------------
Daniel Wilson of BankruptcyLaw360 reported that the U.K.'s
Financial Reporting Council on Tuesday said it wouldn't seek
sanctions against Ernst & Young LLP for its auditing of customer
fund segregation at Lehman Brothers Holdings Inc.'s European arm,
despite an administrator finding discrepancies in Lehman's
accounts following the investment firm's 2008 collapse.

According to the Financial Reporting Council, the body
responsible for enforcing accounting and auditing standards in
the U.K., it would not seek a disciplinary hearing for E&Y or any
of its staff for alleged Lehman audit discrepancies, the report
said.

                       About Lehman Brothers

Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was
the fourth largest investment bank in the United States.  For
more than 150 years, Lehman Brothers has been a leader in the
global financial markets by serving the financial needs of
corporations, governmental units, institutional clients and
individuals worldwide.

Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008
(Bankr. S.D.N.Y. Case No. 08-13555).  Lehman's bankruptcy
petition disclosed US$639 billion in assets and US$613 billion in
debts, effectively making the firm's bankruptcy filing the
largest in U.S. history.  Several other affiliates followed
thereafter.

Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset
LLC sought for bankruptcy protection in December 2009.

The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at
Weil, Gotshal & Manges, LLP, in New York, represent Lehman.  Epiq
Bankruptcy Solutions serves as claims and noticing agent.

Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell,
Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve
as counsel to the Official Committee of Unsecured Creditors.
Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's
investment banker.

On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S.
District Court for the Southern District of New York, entered an
order commencing liquidation of Lehman Brothers, Inc., pursuant
to the provisions of the Securities Investor Protection Act (Case
No. 08-CIV-8119 (GEL)).  James W. Giddens has been appointed as
trustee for the SIPA liquidation of the business of LBI.

The Bankruptcy Court approved Barclays Bank Plc's purchase of
Lehman Brothers' North American investment banking and capital
markets operations and supporting infrastructure for US$1.75
billion.  Nomura Holdings Inc., the largest brokerage house in
Japan, purchased LBHI's operations in Europe for US$2 plus the
retention of most of employees.  Nomura also bought Lehman's
operations in the Asia Pacific for US$225 million.

Lehman emerged from bankruptcy protection on March 6, 2012, more
than three years after it filed the largest bankruptcy in U.S.
history.  The Chapter 11 plan for the Lehman companies other than
the broker was confirmed in December 2011.

Lehman made its first payment of $22.5 billion to creditors in
April 2012 and a second payment of $10.2 billion on Oct. 1.  A
third distribution is set for around March 30, 2013.  The
brokerage is yet to make a first distribution to non-customers.

Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers
Bankruptcy News.  The newsletter tracks the Chapter 11 proceeding
undertaken by Lehman Brothers Holdings, Inc., and other
insolvency and bankruptcy proceedings undertaken by its
affiliates.  (http://bankrupt.com/newsstand/or 215/945-700)


WHITEQUAY GROUP: In Administration, Closes Three Sites
------------------------------------------------------
motortrader.com reports that South of England-based Whitequay
Group has gone into administration with the closure of three
sites.

Administrator Stuart & Williamson confirmed the administration to
Motor Trader, according to motortrader.com.

The report relates that company website the group has sites in
Reading, Newbury and Southampton and represents Seat, Skoda,
Suzuki, Chrysler, Kia and Alfa Romeo.

The report relates that it also a member of the Saab Service Club
and the outlets in Reading and Southampton are authorized
repairers for Cadillac, Corvette and Hummer.

A spokesman for administrators at Smith & Williamson, said: "Our
sympathies are very much with the customers and staff of
Whitequay at this deeply upsetting time. . . . We are working
hard to sell all three sites at Southampton, Reading and Newbury
- and there is strong interest therein. . . . We are doing our
best in a very difficult situation but there is insufficient
money to be able to keep the sites open and therefore all three
sites have, very regrettably, effectively been forced to close. .
. .There has been no option but to make staff redundant at
Southampton and Reading."

The report notes that accounts filed at Companies House show the
group reported a loss of GBP141,102 in the year to December 2011
on sales of GBP20.6 million.

In 2010, the group, owned by managing director Ian John,
generated pre-tax profits of GBP78,915 on turnover of
GBP19.4 million, the report discloses.

Stuart & Williamson has recently acted as administrator for
Vauxhall dealer Stevens with outlets in Horsham and Crawley and
another Vauxhall dealer Approach UK in Andover, the report adds.


* UK: Scottish Corporate Failures Down 1.1% to 1,264 in 2012
------------------------------------------------------------
Keith Findlay at The Press and Journal reports that new figures
from the Accountant in Bankruptcy show fewer Scottish firms going
bust during 2012.

According to the Press and Journal, the total of 1,264 is down by
1.1% from 1,278 the year before but is the second highest on
record after a record number of business failures in 2011.

It also means there were nearly 25 companies a week collapsing
north of the border last year, the Press and Journal notes.

Accountancy firm PKF said on Wednesday, HM Revenue and Customs
backed off from initiating insolvency proceedings late last year,
which may account for a sharp fall in the number of failures in
the final quarter.


* UK: FRC Calls for Banks to Admit Going Concern Uncertainties
--------------------------------------------------------------
Adam Jones at The Financial Times reports that struggling banks
should not use vague promises of state aid to keep investors in
the dark about their fragility, according to new UK guidance
aimed at avoiding a repeat of the confusion experienced during
the financial crisis.

According to the FT, the Financial Reporting Council said on
Wednesday that bank directors and auditors should not rely on
generalized words of support from central bankers or the
government when deciding whether the institution remained a going
concern.

"Directors and auditors are responsible for making their own
judgments about the future solvency and viability of the bank,"
the FT quotes the FRC as saying.

The updated FRC guidance follows controversial secret talks
between UK bank auditors and the government at the height of the
crisis, the FT relates.

Companies must declare in their accounts whether they view
themselves as a going concern, meaning they have enough cash and
access to funding to survive for at least a year, the FT says.
According to the FT, they must also tell investors if there is a
material uncertainty about this status, although such a
disclosure would probably be so catastrophic for a bank that
regulators would intervene first.  Auditors verify the going
concern assertion, the FT discloses.

The FRC's new guidelines, which remain subject to consultation,
draw on the findings of an inquiry headed by Lord Sharman of
Redlynch, former chairman of Aviva, the insurer, the FT says.

The regulator is trying to meet the needs of investors for candid
information without undermining confidence in the banking system,
the FT states.

The FT relates that Marek Grabowski, FRC director of audit
policy, said that across all sectors, the new guidelines were
likely to have the effect of encouraging more companies to admit
to material uncertainties about their going concern status.  They
would also increase the information disclosed, the FT says.

According to the FT, Tony Cates, head of audit at KPMG, said the
FRC guidelines might toughen the going concern test too much by
forcing companies to consider their viability over a much longer
timescale.


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

In November 2012, the 90+ day delinquency index for UK non-
conforming RMBS was 16.1%, below the 21.0% peak reached in June
2009. Outstanding repossessions increased slightly to 0.9% from
0.8% 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
2.3% of the original balance in November 2012.

Weighted-average loss severity as a percentage of properties sold
was around 26.2%, 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 notes the high delinquency levels and has
accounted for this level of arrears by assuming that all
currently delinquent borrowers will default in a less favorable
environment. Furthermore, low redemption rates, which were 6.1%
in November 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 significant time,
exacerbating future performance uncertainty.

Moody's outlook for the collateral performance of UK non-
conforming RMBS transactions in 2013 is stable. The UK economy
will grow by only 1.4% in 2013. 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 borrowers face disruptions to their income.
Unemployment will increase only slightly to 8.6% in 2013 from an
average of 8% in 2012.

On October 19, 2012, Moody's completed a performance review of 81
UK non-conforming RMBS transactions, updating its portfolio loss
assumptions in 17 transactions and MILAN credit enhancement in
four transactions. In 11 out of 17 affected transactions, Moody's
increased its lifetime loss assumption, as the performance of the
underlying mortgage portfolios has been worse than previously
assumed. The remaining six transactions are performing better
than expected. Moody's review of the assumptions has no rating
implications because (1) the credit enhancement available under
the corresponding notes fully offsets the effect of the increase
of the loss assumption; and (2) the decrease of the loss
assumption is not sufficient to upgrade the rating. Expected loss
assumptions remain subject to uncertainties such as general
future economic activity, interest rates and house prices. Lower
than assumed realized recovery rates or higher than assumed
default rates would negatively affect the ratings of the
transactions.

The total current outstanding pool balance of all 81 transactions
rated by Moody's in the UK non-conforming RMBS market dropped to
GBP20.6 billion in November 2012, a year-over-year decrease of
6.5%. Moody's has not rated any UK non-conforming RMBS
transactions since January 2009.


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

From August to November 2012, the 90+ day delinquency trend was
stable at 1.8% of the outstanding portfolio. Outstanding
repossessions and cumulative losses remained at 0.1% and 0.3%,
respectively. Moody's annualized total redemption rate (TRR)
trend averaged 14.6% in the three-month period up to November
2012.

Moody's outlook for the collateral performance of UK prime RMBS
in 2013 is stable. During 2012, low interest rates and a
relatively steady unemployment rate have supported borrowers'
debt-service capacity, which, in turn, has driven solid
performance in this sector. Moody's believes that interest rates
will remain low in 2013, and unemployment will increase only
slightly to 8.6% in 2013 from an average of 8% in 2012. Prime
borrowers are in a stronger position to withstand income shocks
relative to non-conforming borrowers, partly due to lenders being
more willing to offer forbearance options, such as a temporary
repayment switch to an interest-only mortgage. Also, house prices
will remain flat, which will help contain losses on foreclosed
properties.

On October 19, 2012, Moody's updated its loss assumptions in one
prime and two buy-to-let UK RMBS deals -- Trinity Financing Plc,
Auburn Securities 3 PLC and Ludgate Funding Series 2007-FF1,
respectively -- following a performance review of the UK prime
and BTL RMBS non master trust sector, which includes 38 Moody's
rated deals. The rating agency has taken no rating actions on the
deals, as (1) the levels of credit enhancement available in
Trinity Financing Plc and Ludgate Funding Series 2007-FF1 offsets
performance deterioration; and (2) ratings of notes in Auburn
Securities 3 PLC are capped at the current level due to payment
disruption risks.

In the three-month period up to November 2012, Moody's rated five
transactions in the UK prime RMBS market:

Holmes Master Issuer Series 2012-4, originated by Santander UK
PLC (A2, Prime-1 deposits, negative), issued GBP0.5 billion.

Gosforth Funding 2012-2 plc, originated by Northern Rock Asset
Management (Aa3, Prime-1 deposits, negative), issued GBP2.9
billion.

Silk Road Finance Number Three PLC, originated by the former
Britannia Building Society and by Co-Operative Bank Plc (A3,
Prime-2 deposits, on review for downgrade), issued GBP0.7
billion.

Albion No.1 PLC, originated by Leeds Building Society (A3, Prime-
2 deposits, stable), issued GBP0.4 billion.

Brass No.2 PLC, originated by Accord mortgages Ltd. (not rated),
a wholly owned subsidiary of Yorkshire Building Society (Baa2,
Prime-2 deposits, stable), issued GBP1.2 billion.

As of November 2012, the 85 Moody's-rated UK prime RMBS
transactions had an outstanding pool balance of GBP216.1 billion,
which constitutes a year-on-year decrease of 28.9%. 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 Sees Improving Performance of Buy-To-Let RMBS
-----------------------------------------------------------
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 November 2012, according to the
latest indices published by Moody's Investors Service.

In the three-month period to November 2012, the 90+ day
delinquency trend decreased to 1.04%, from 1.14% in August 2012.
In the same period, outstanding repossessions remained stable at
0.12% and cumulative losses increased slightly to 0.64% from
0.62%. Moody's annualized total redemption rate (TRR) trend
averaged 4.29% in the three-month period to November 2012.

Moody's outlook for the collateral performance of UK BTL RMBS in
2013 is stable. During 2012, low interest rates and a relatively
steady unemployment rate have supported borrowers' debt-service
capacity, which, in turn, has driven solid performance in the BTL
RMBS sector. Moody's believes that interest rates will remain low
in 2013, and unemployment will increase only slightly to 8.6% in
2013 from an average of 8% in 2012. Also, house prices will
remain flat, which will help contain losses on foreclosed
properties.

On October 19, 2012, Moody's updated its loss assumptions in one
prime and two buy-to-let UK RMBS deals -- Trinity Financing Plc,
Auburn Securities 3 PLC and Ludgate Funding Series 2007-FF1,
respectively -- following a performance review of the UK prime
and BTL RMBS non master trust sector, which includes 38 Moody's
rated deals. The rating agency has taken no rating actions on the
deals, as (1) the levels of credit enhancement available in
Trinity Financing Plc and Ludgate Funding Series 2007-FF1 offsets
performance deterioration; and (2) ratings of notes in Auburn
Securities 3 PLC are capped at the current level due to payment
disruption risks.

In the three-month period through November 2012, Moody's rated
two transactions in the UK BTL RMBS market:

Cambric Finance Number One Plc, originated by Platform Funding
Limited (not rated), issued GBP1.4 billion.

Mercia No.1 plc, originated by Godiva Mortgages Limited (not
rated), a wholly owned subsidiary of Coventry Building Society
(A3, Prime-2 deposits, stable), issued GBP1.4 billion.

As of November 2012, the 30 Moody's-rated UK BTL RMBS
transactions had an outstanding pool balance of GBP25.2 billion.
Compared with the GBP37.6 billion pool balance for the same
period in the previous year, this constitutes a 33.1% year-over-
year decrease. This is mainly due to the redemption of Pendeford
Master Issuer.



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


* EU Car Sales May Not Recover Before End of Decade, Fitch Says
---------------------------------------------------------------
A recovery in new car sales in Europe back to pre-crisis levels
could take until the end of the decade, if it can be achieved at
all, Fitch Ratings says. "Our current base case assumes new
vehicle sales to decline by approximately 3% in western Europe in
2013 following an 8.1% decrease to 11.8 million units in 2012.
This would mean a 23% fall since 2007," Fitch states.

Structural factors and anecdotal evidence make it uncertain that
sales will return to the 1999 peak of 15.1 million units. They
suggest that European recovery will be slow at best and could
follow the path of Japan, where vehicle sales have fluctuated
since 1998 at 25% to 45% below their peak in 1990.

Owners are keeping vehicles, which are increasingly reliable and
robust, for longer and are driving shorter distances. At the same
time, the total cost of vehicle ownership has increased and
several large cities or countries have taken measures to limit or
deter car usage. Periodic surveys have also shown a declining
interest in cars from the younger generation. Cyclical factors,
including weak consumer and corporate confidence, high
unemployment and tighter credit conditions are making matters
worse.

Manufacturers of small vehicles suited to urban conditions and
with fuel efficient engines are best placed to outperform. These
vehicles should be well positioned to take advantage of people
moving to suburbs not well connected by public transport and of
the overall trend towards downsized vehicles and engines.

Nonetheless, the economy and new vehicle sales can rebound more
strongly than expected. For instance, auto sales in the US
recovered to 14.4 million units in 2012, up 13.4% from 2011 and
39% from 2009. This was in contrast to previous market
assumptions and forecasts pointing to long-lasting depressed
conditions.

The expected outperformance of central and eastern European
markets as they catch up with more developed European markets in
terms of car density is likely to offset persistent weakness in
western Europe and offer better prospects than in Japan.
Government intervention could also support sales at higher levels
than underlying and fundamental demand, given the industry's
importance to employment and in light of support given in the
past.

As well as the gross number of vehicles sold, it will be even
more important to monitor the product mix as customers
increasingly decide to keep a car but opt for a smaller or
cheaper model. This is in line with our view of how the market is
polarizing towards high-end brands on the one side and entry-
level marques on the other.


* Fitch Says Credit Growth Stagnant in Developed World
------------------------------------------------------
Fitch Ratings says in its latest Macro-Prudential Risk Monitor
that global real lending growth was 3.6% in 2012, much the same
as in 2011 and down from 4% in 2010. This is well below a pace
that would cause renewed concerns about over-lending.

Real credit growth in the developed world was a meagre 0.5%. The
pace of credit contraction has declined in a number of countries
but there are few signs of any major pick up in credit growth. By
contrast in EMs, even though generally slowing, credit growth was
around 7.5% in both Latin America and Asia, 5.5% in Middle
East/Africa, but only 1% in Emerging Europe.

The ratio of credit to GDP was stable in 2012 at 160% on average
for developed markets and 53% in EMs. Despite substantial falls
in some crisis countries, there is no sign of a generally falling
trend in credit/GDP. However, in the developed world, credit/GDP
is falling increasingly below trend and indeed is now below trend
in the majority of countries.

The combination of stable credit/GDP and generally slowing real
credit growth explains the continued progression of countries
into lower risk categories as measured by Fitch's Macro-
Prudential Risk Indicator (MPI). Australia, Denmark, Malta and
the Netherlands and in EMs Brazil and Colombia all move into the
MPI 1 category in the latest report.

Rapid lending growth is confined to a handful of emerging
markets. 13 countries - all EMs - experienced real credit growth
of more than 15% in 2011/12 and therefore are in the MPI 2
category. Credit growth picked up significantly, to a double-
digit pace, in Azerbaijan, Belarus, Bolivia, China, Guatemala,
Saudi Arabia and Venezuela. But Africa has the most countries
showing a significant pick-up in real credit growth - Ghana,
Lesotho, Rwanda and Zambia. The increase is from a low base and
reflects increased bank lending penetration alongside rapid
economic development. There is little evidence of asset bubbles,
though in some cases (Angola, Cameroon, Gabon and Rwanda) data
limitations may obscure warning signals.

Increased MPI scores are confined to EMs: Ghana, Qatar, Russia,
Venezuela and Zambia all rise to MPI 2 in this report. There are
no new MPI 3s.

Sluggish or slowing credit growth brings lower MPI scores in
Cyprus and Uganda (MPI 2) as well as Australia, Brazil, Colombia,
Denmark, Malta and the Netherlands (MPI 1). The lower score for
Cyprus is because it's former MPI 3 score, which pre-dates the
current banking crisis, was based on 2009 data which drops out of
the assessment period (2010-2012) in this report.

Changes in bank Viability Ratings result in three BSI changes:
Azerbaijan and Ireland improve to 'b'; Cyprus weakens to 'c'.

This report updates the systemic risk indicators Fitch has
published since 2005. Formerly the Bank Systemic Risk Report, the
Macro-Prudential Risk Monitor identifies the build-up of
potential stress in banking systems due to a specific set of
circumstances: rapid credit growth associated with bubbles in
housing or equity markets, or appreciated real exchange rates,
the latter sometimes associated with asset market bubbles. The
focus of the report is therefore only one potential source of
bank systemic stress.

The latest "Macro-Prudential Risk Monitor" is available at
www.fitchratings.com.


* BOOK REVIEW: The Health Care Marketplace
------------------------------------------
Author: Warren Greenberg, Ph.D.
Publisher: Beard Books
Softcover: 179 pages
List Price: $34.95
Review by Henry Berry

Greenberg is an economist who analyzes the healthcare field from
the perspective that "health care is a business [in which] the
principles of supply and demand are as applicable . . . as to
other businesses."  This perspective does not ignore or minimize
the question of the quality of health, but rather focuses sharply
on the relationship between the quality of healthcare and
economic factors and practices.

For better or worse, the American healthcare system to a
considerable degree embodies the beliefs, principles, and aims of
a free-market capitalist economic system driven by competition.
In the early sections of The Health Care Marketplace, Greenberg
takes up the question of how physicians and how hospitals compete
in this system.  "Competition among physicians takes place
locally among primary care physicians and on a wider geographical
scale among specialists.  There is competition also between M.D.s
and allied practitioners: for example, between ophthalmologists
and optometrists and between psychiatrists and psychologists.
Regarding competition between physicians in a fee-for-service
practice and those in managed care plans, Greenberg cites
statistics and studies that there was lesser utilization of
healthcare services, such as hospitalization and tests, with
managed care plans.

Some of the factors affecting the economics of different areas of
the healthcare field are self-evident, albeit may be little
recognized or little realized by consumers.  One of these factors
is physician demeanor.  Most readers would see a physician's
demeanor as a type of personality exhibited during the course of
the day.  But after the author notes that "[c]ompetition also
takes place in professional demeanor, location, and waiting
time," the word "demeanor" takes on added meaning. The demeanor
of a big-city plastic surgeon, for example, would be markedly
different from that of a rural pediatrician.  Thus, demeanor has
a relationship to the costs, options, services, and payments in
the medical field, and also a relationship to doctor education
and government funding for public health.

Greenberg does not follow his economic data and summarizations
with recommendations or advice. He leaves it to the policymakers
to make decisions on the basis of the raw economic data and
indisputable factors such as physician demeanor.  Nor does he
take a political position when he selects what data to present or
emphasize.  It is this apolitical, unbiased approach that makes
The Health Care Marketplace of most value to readers interested
in understanding the economics of the healthcare field.

Without question, a thorough understanding of the factors
underlying the healthcare marketplace is necessary before changes
can be made so that the health needs of the public are better
met. Conditions that are often seen as intractable because they
are regarded as social or political problems such as the
overcrowding of inner-city health centers or preferential
treatment of HMOs are, in Greenberg's view, problems amenable to
economic solutions. According to the author, the basic economic
principle of supply-and-demand goes a long way in explaining
exorbitantly high medical costs and the proliferation of
specialists.

Greenberg's rigorous economic analysis similarly yields an
informative picture of the workings of other aspects of the
healthcare field.  Among these are hospitals, insurance, employee
health benefits, technology, government funding of health
programs, government regulation, and long-term health care.  In
the closing chapter, Greenberg applies his abilities as a keen-
eyed observer of the economic workings of the U.S. healthcare
field to survey healthcare systems in three other countries:
Canada, Israel, and the Netherlands.  "An analysis of each of the
three systems will explain the relative doses of competition,
regulation, and rationing that might be used in financing of
health care in the United States," he says.  But even here, as in
his economic analyses of the U.S. healthcare system, Greenberg
remains nonpartisan and does not recommend one of these three
foreign systems over the other.  Instead he critiques the
Canadian, Israel, and Netherlands systems -- "none [of which]
makes use of the employer in the provision of health insurance,"
he says -- to prompt the reader to look at the present state and
future of U.S. healthcare in new ways.

The Health Care Marketplace is not a book of limited interest,
and the author's focus on the economics of the health field does
not make for dry reading.   Healthcare is a central concern of
every individual and society in general.  Greenberg's book
clarifies the workings of the healthcare field and provides a
starting point for addressing its long-recognized problems and
moving down the road to dealing effectively with them.

Warren Greenberg is Professor of Health Economics and Health Care
Sciences at George Washington University, and also a Senior
Fellow at the University's Center for Health Policy Research.
Prior to these positions, in the 1970s he was a staff economist
with the Federal Trade Commission.  He has written a number of
other books and numerous articles on economics and healthcare.


                            *********

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., Washington, D.C., 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 2013.  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$775 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 215-945-7000 or Nina Novak at
202-241-8200.


                 * * * End of Transmission * * *