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

                           E U R O P E

            Thursday, July 18, 2013, Vol. 14, No. 141

                            Headlines



A U S T R I A

HYPO ALPE-ADRIA: Taps Sachsen & Bankhaus to Draft Bad Bank Plan


A Z E R B A I J A N

* AZERBAIJAN: Moody's Says Outlook on Banking Sector Stable


C Y P R U S

* CYPRUS: DBRS Assigns 'CCC' Currency Issuer Ratings


C Z E C H   R E P U B L I C

RPG BYTY: Moody's Rates EUR400 Million Senior Notes 'Ba2'


G E R M A N Y

EMC VI-EUROPROP: Fitch Lowers Rating on Class D Notes to 'CC'
LOEWE AG: Has 3 Months to Finish Restructuring, Find Investors


G R E E C E

DRYSHIPS INC: Ocean Rig Enters Into US$1.8BB Term Loan Facility


I R E L A N D

DEPFA FUNDING: Fitch Affirms 'C' Hybrid Instruments Rating
QUINN INSURANCE: Administrators to Take Former Auditors to Court
* S&P Takes Various Rating Actions on Irish Banks


I T A L Y

FINMECCANICA SPA: Fitch Cuts Issuer Default Rating to 'BB+'


K A Z A K H S T A N

AMANAT INSURANCE: Fitch Corrects Rating Release
EURASIAN BANK: S&P Revises Outlook to Pos. & Affirms 'B+' Rating


N E T H E R L A N D S

AMSTERDAM TRADE: Moody's Assigns First-Time Ba2 Deposit Rating
DALRADIAN EUROPEAN: Moody's Lifts Rating on T Notes to Caa2
EPIC CMBS: Administrator Puts Shopping Malls Up for Sale
NIBC BANK: Fitch Lowers Rating on Hybrid Tier 1 Secs. to 'B+'


R U S S I A

BANK URALSIB: Moody's Lowers Deposit Ratings to 'B2'
MEGAFON OAO: Fitch Affirms 'BB+' LT Issuer Default Rating


S P A I N

GC FTPYME: Fitch Affirms 'CCC' Rating on Class C Notes
KUTXABANK: Moody's Affirms 'Ba1' Deposit Ratings; Outlook Neg.
RURAL HIPOTECARIO: Fitch Rates EUR22.5-Mil. Class B Notes 'B'
SANTANDER EMPRESAS 1: Fitch Affirms 'CCC' Rating on Cl. D Notes
* SPAIN: Fitch Puts Several Utilities on Rating Watch Negative


U K R A I N E

PRIVATBANK: Fitch Affirms 'B' Long-Term Issuer Default Rating


U N I T E D   K I N G D O M

BOTANIC INNS: Owes More Than GBP14 Million to Creditors
BROADGATE FINANCING: Fitch Lifts Rating on Cl. D Notes to BB+
EQUINOX ECLIPSE: Fitch Cuts Rating on Class A Notes to 'CC'
HERCULES ECLIPSE 2006-4: Fitch Affirms CC Rating on Cl. E Notes
MARLIN FINANCIAL: S&P Assigns 'B' LT Counterparty Credit Rating

MG ROVER: July 29 Hearing Set for AADB's Suit v. Deloitte
WILLIAM HILL: Moody's Assigns Ba1 Rating to GBP375MM Notes Issue
* Fitch: UK Guarantee Scheme for Infrastructure Projects Strong


X X X X X X X X

* EUROPE: EU Requires Restructuring Plan for Bank State Bailout
* Moody's Sees Increase in Refinancing Needs in EMEA Sectors
* Moody's Notes Stronger European Covered Bonds
* Upcoming Meetings, Conferences and Seminars


                            *********


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A U S T R I A
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HYPO ALPE-ADRIA: Taps Sachsen & Bankhaus to Draft Bad Bank Plan
---------------------------------------------------------------
Boris Groendahl at Bloomberg News reports that Hypo Alpe-Adria-
Bank International AG, the nationalized Austrian lender burdened
with bad debt, chose Sachsen Asset Management GmbH and Bankhaus
Lampe KG to draft a plan for spinning off its bad-assets unit.

According to Bloomberg, two people with knowledge of the decision
said Hypo Alpe, based in Klagenfurt, Austria, told the two German
advisers to come up with a plan for the unit with at least EUR12
billion (US$16 billion) in assets that minimizes the burden for
the Austrian government's budget.  Bloomberg relates that they
said a decision won't be made before Austria's national elections
on Sept. 29.

Austria is accelerating Hypo Alpe's breakup to gain European
Union approval for the EUR2.2 billion in state aid the lender
received in the last five years, Bloomberg says.

Finance Minister Maria Fekter opposed Hypo Alpe's plans to spin
off a "bad bank" on concern its liabilities may add to Austria's
government debt and drive it beyond 80% of gross domestic
product, Bloomberg discloses.  Chancellor Werner Faymann and Vice
Chancellor Michael Spindelegger told her to revisit the plans
after the non-performing assets caused losses and capital needs
at Hypo Alpe that have burdened Austria's budget, Bloomberg
notes.

Hypo Alpe-Adria International AG is a subsidiary of BayernLB.  It
is active in banking and leasing.  In banking, HGAA serves both
corporate and retail customers and offers services ranging from
traditional lending through savings and deposits to complex
investment products and asset management services.



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A Z E R B A I J A N
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* AZERBAIJAN: Moody's Says Outlook on Banking Sector Stable
-----------------------------------------------------------
The outlook on Azerbaijan's banking system remains stable, says
Moody's Investors Service in a new report entitled "Banking
System Outlook: Azerbaijan."

The key drivers of the outlook -- which has remained stable for
the third successive year -- include (1) a favorable operating
environment; (2) improving asset quality; (3) sufficient capital
buffers to absorb losses under Moody's central scenario; (4)
marginally improving profitability and (5) adequate liquidity
profiles.

The credit-positive factors will remain counterbalanced by the
banking system's structural weaknesses, related to the lack of
diversification in Azerbaijan's economy, banks' limited access to
long-term funding, low transparency and corporate-governance
deficiencies, and high exposure to single borrowers and related
parties.

"Supportive macroeconomic conditions will remain a key factor
that underpins our stable outlook for the banking sector over the
12-18 month outlook period. According to our forecasts,
Azerbaijan's GDP will increase by 3.5% in real terms in 2013
(2012: 2.2%), driven by a continued strong performance in the
non-oil economy which benefits from government-led investments in
large-scale infrastructure projects," says Lev Dorf, a Moody's
Analyst and author of the report.

"The strong growth in Azerbaijan's non-oil sectors will, in turn,
boost banks' asset quality, leading to a fall in the level of
problem loans (overdue by more than 90 days, and restructured) to
around 11% of gross loans during the outlook period, from 14% at
year-end 2012," adds Mr. Dorf. In Moody's view, the trend of
improving asset quality metrics will also continue to contribute
to the stability of capital levels. The rating agency says that
most banks have sufficient capital to absorb losses under the
agency's central scenario, and it expects most banks' funding and
liquidity profiles to remain stable, supported by sufficient
levels of liquid assets, low reliance on market borrowings and
growing customer deposits.

Moody's notes that improvements in asset quality metrics should
also lead to marginal improvements in banks' profitability over
the outlook horizon against the background of favorable credit
conditions and lower loan-loss provisions in Azerbaijan. However,
the rating agency says that the system-average profitability
metrics will remain constrained by weak net interest margins
driven by low-interest corporate loans that dominate most banks'
loan portfolios.



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C Y P R U S
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* CYPRUS: DBRS Assigns 'CCC' Currency Issuer Ratings
----------------------------------------------------
DBRS, Inc. has assigned long-term foreign and local currency
issuer ratings for the Republic of Cyprus at CCC with Negative
trends, and short-term foreign and local currency issuer ratings
at R-5 with Stable trends.  The ratings reflect DBRS's view that
Cyprus' creditworthiness is impaired by (i) the deterioration in
the country's economic and fiscal outlook, which DBRS believes
could undermine the government's efforts to stabilize the public
debt ratio, and (ii) the possibility that Cyprus' medium-term
funding program could be constrained by the persistence of a
large debt burden.

The Negative trend on the long-term ratings reflects DBRS's view
that macroeconomic stability has yet to be restored.  There is a
high degree of uncertainty regarding the growth outlook due to
the ongoing restructuring of the financial system, adverse
effects from fiscal consolidation, declining property prices, and
weak external demand.  Of particular concern in the near term is
the uncertainty due to the possibility of greater capital flight
in the event of a lifting of capital controls.  Should capital
outflows accelerate, this could adversely affect banks' funding
needs and the flow of credit.

The CCC ratings are underpinned by the March 2013 Economic and
Financial Assistance support program to cover Cyprus' funding
needs from 2013 to 2016.  The ratings are further underpinned by
the country's low tax environment and by the presence of gas
reserves which could provide a boost to government revenues and
growth over the long-term.

DBRS believes that the signing of the Memorandum of Understanding
(MoU) between the Cypriot government, the European Central Bank,
the European Commission (EC) and the IMF constitutes a positive
development.  According to the MoU, the external creditors will
provide Cyprus with EUR10 billion (55% of GDP) in funding over
the next three years, and this should ensure that Cyprus will
meet its financing needs through the first quarter of 2016.
Under the program, debt stabilization relies on the combination
of a return to growth in 2015, and the running of large primary
surpluses from 2016 onwards.  However, DBRS cautions that there
are substantial downside risks to the assumption that the country
will return to growth in 2015.  This return to growth is expected
to be driven by a rebound in private consumption and investment,
as well as by a considerable rebalancing of the external sector.
Should this growth not materialize, and if primary surpluses are
not generated, this could result in debt-to-GDP peaking at a
higher level.  As a result, reducing the debt from a peak of 126%
of GDP in 2016 to 105% of GDP by 2020, as anticipated in the
program, could prove challenging.

Cyprus' medium-term growth prospects will likely be hampered by
the rebalancing of the economy away from the sectors which
spurred growth over the last decade.  These are namely real
estate (12% of the economy), financial sector (9%) and public
administration (22%).  DBRS thus believes that over the medium-
term, average annual economic growth could be lower than the 1.9%
assumed in the program.  Achieving and maintaining a primary
balance of 4% of GDP over the medium-term could also prove
ambitious, as it requires a reduction in government spending from
46.3% of GDP in 2012 to an average of 42.2% from 2017 until 2020,
the final year of the MoU.

External sustainability is also likely to come under pressure as
the economy rebalances away from the exports of financial
services, which between 2004 and 2008 accounted for an average
65% of net services exports.  Over the past decade, Cyprus'
dependence on imports of energy and capital goods employed in the
construction industry was partially offset by the positive
contribution from the services balance.  However, although the
weak economic environment in the coming years will likely reduce
non-energy imports, the downsizing of the domestic financial
sector will likely restrict the contribution from service
exports.  As a result, DBRS views the EC and IMF expectation of a
narrowing of the current account deficit from 6.5% of GDP in 2012
to 2% in 2013 and 1% in 2016 as unlikely.

DBRS believes that despite the stabilizing influence of the MoU,
financial system liquidity and consumer and investor confidence
could be negatively affected by recent program measures.  Both
domestic and foreign private sources are to contribute EUR13
billion to the financing package through the following measures:
(i) a debt exchange of EUR1 billion of bonds held under domestic
law, (ii) the involvement of the private sector in the
restructuring of the country's two largest banks, including
shareholders, bondholders, and holders of uninsured deposits, and
(iii) the renegotiation of the terms of the EUR2.5 billion loan
from the Russian Federation.  DBRS classifies the debt exchange
as a default and these arrears have now been cleared.  This,
together with the involvement of the private sector in the
restructuring of the banking sector and the other burden-sharing
measures, are positive for public debt sustainability.
Nevertheless, these actions are likely to have impaired Cyprus'
access to foreign private funding, and constitute credit
impairment.

The trend on the long-term ratings could be moved to Stable if
macroeconomic stability is restored, downside risks to growth
diminish, and any additional bank recapitalization needs are
manageable.  Conversely, the ratings could be lowered if the
recession is significantly deeper than currently envisaged,
jeopardizing fiscal targets.  The ratings could also come under
downward pressure if a removal of capital controls results in an
acceleration of capital flight, putting pressure on bank balance
sheets.



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C Z E C H   R E P U B L I C
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RPG BYTY: Moody's Rates EUR400 Million Senior Notes 'Ba2'
---------------------------------------------------------
Moody's Investors Service has assigned a definitive Ba2 rating to
RPG Byty s.r.o. EUR400 million 6.75% senior secured notes due
2020 and a loss given default assessment of LGD3 (32%). The
definitive rating is in line with the provisional rating assigned
on April 19, 2013. All other ratings and the stable outlook on
the ratings remain unchanged.

Ratings Rationale:

The definitive Ba2 assigned to the notes issuance is at the same
level as the company's CFR.

RPG Byty's Ba2 corporate family rating (CFR) reflects its
moderate scale, as measured by gross assets, reported at CZK24.5
billion (EUR976 million), and its narrow geographic base in the
Moravia-Silesia region in Czech Republic, where recessionary
economic conditions in 2012 caused unemployment rates to rise
towards 12%, compared to the national average of around 8.6%. The
Czech Republic (A1 stable), however, is one of the more stable
and prosperous countries in Eastern Europe. Moody's forecasts the
country's return to modest economic growth in 2013 of around 0.4%
following a dip of real GDP in 2012 of -1.3%.

RPG Byty's residential portfolio is broadly diversified in terms
of the large number of separate apartment buildings (5,163) and
almost 44,000 apartments, but asset quality is variable and the
average age of the portfolio is around 60 years. Many buildings
still require refurbishment following a legacy of neglect created
by years of rent regulation that didn't allow landlords to
collect sufficient rental to fund ongoing modernization. However,
in recent years, RPG Byty has invested large sums from internally
generated cash flow into this portfolio to improve its income
earning capacity with less than two more years remaining of
scheduled extraordinary expenditure. The revival of this
residential property business has been led by an experienced and
competent management team. The rating also takes into account the
company's strategy to manage its properties, but not to act as a
real estate developer, which is a factor that limits RPG Byty's
business risk.

A change of law in 2006 ended rent regulation and the Czech
government has allowed property owners to gradually raise the
level of post-regulated rent towards market rents. Rent
regulation in Moravia-Silesia ended completely by year-end 2010.
RPG Byty expects contractually agreed rental growth of 6% p.a.
over the next three years and Moody's notes that two-thirds of
its post-regulated rents have not yet reached full market level.
Profitability, as measured by its EBITDA margin, is expected to
improve accordingly.

RPG Byty's tenant base is predominantly composed of lower middle-
class and lower income families; however, the flats are still
affordable, particularly after steps taken by RPG Byty over the
past two years to improve thermal retention so as to cut
considerably tenants' heating bills. The average tenant stay is
currently around 10 years. RPG Byty runs careful credit checks
before accepting new tenants and bad debts are manageable at less
than 2%.

Moody's expects that the rating will be supported post-note
issuance by an effective leverage which is in line with the
currently assigned rating and, as measured by adjusted debt/gross
assets, which is forecast at around 41% and a good level of fixed
charge coverage forecast at around 2.0x, as measured by adjusted
EBITDA/gross interest expense + ground rents (all data and ratios
as adjusted by Moody's). The rating assumes adequate hedging of
currency and interest rate risks is in place.

Proceeds of the bonds will be used to refinance part of the
existing debt, which was incurred due to the payout of an
extraordinary dividend in 2012 of around EUR180 million, and to
pay out another extraordinary dividend in 2013 of around the same
size. Despite these high payouts the company's leverage appears
manageable and going forward the notes indenture will limit
dividend payouts to no more than 50% of net income and also
include three tests to be fulfilled (loan-to-value, fixed charge
coverage ratio, minimum liquidity). Following the issuance of the
notes, interest expense will rise and, in combination with the
large, ongoing capital expenditure that RPG Byty intends to make
to continue refurbishing the existing base, Moody's expects free
cash flow generation to be only slightly positive leaving less
headroom for weaker than expected performance.

The proposed senior secured notes will be secured by first-
priority liens over substantially all of RPG Byty's assets and
shares; this equates to around 85% of its property assets because
6% already secures its refurbishment loans, 2% is not capable of
being secured at this time because those assets benefitted from
government subsidies, 2% is undeveloped land and the remaining 5%
are assets targeted for disposal. The CFR and instrument rating,
which are expressions of expected loss, are one notch higher than
the PDR. This is because, in Moody's view, the overall recovery
in the event of default would be at least 65%, which is higher
than the average recovery level.

The notes contain a portability feature, which allows for a one-
off change in ownership of RPG Byty within the first two years
following issuance without triggering the change of control
provisions subject to meeting certain tests which include a mild
deleveraging from the initial consolidated loan to value ratio
(LTV) of 45.7% to 43.7% at the date of the transaction and on a
pro forma basis. However, debt incurrence under the notes is
allowed up to a 60% consolidated LTV ratio, provided a minimum
fixed charge coverage of at least 2.0x is maintained. Given a
lower debt incurrence restriction of 43.7% on the secured LTV
ratio, such increase could be in the form of unsecured
indebtedness but such funds could not be used for payment of
further dividends as dividend distribution is not allowed above a
total LTV of 43.7%. That said, the use of such flexibility could
put pressure on effective leverage and, as a result, on ratings.

Moody's expects liquidity will remain adequate following note
issuance, with only modest annual repayments due on its remaining
refurbishment loans of which EUR19.6 million are currently
outstanding and availability of a super senior revolving credit
facility of EUR20 million is expected, which will be undrawn
initially. The security package for the notes will be shared with
the super senior lender(s) and hedge providers through an inter-
creditor deed. The company will have no maintenance financial
covenants. There is modest volatility in working capital
movements due to the seasonality of payments of the heating bill,
which can be covered by existing liquidity sources.

Outlook

The stable outlook reflects RPG Byty's stable tenant base; steady
generation of rental income and an experienced management team
that should protect the company from unexpected downward pressure
on operating profits caused by any large repairing and
maintenance work that could be required by a portfolio of older
buildings and that is expected to be funded from internally
generated cash flow. The stable outlook assumes a less aggressive
financial policy going forward. The stable outlook also assumes
that the company's currency and interest rate risks will be
adequately hedged so as to ensure the stability of its cash flows
will be preserved as well. In addition, Moody's expects that an
adequate liquidity profile will be maintained at all times.

What Could Change The Rating Up/Down

Upward pressure on the rating or outlook could develop as RPG
Byty's track record of operating in the relatively new
environment of higher, deregulated rents progresses without a
further meaningful rise in vacancy rates and the quality of the
portfolio improves with the company's ongoing program of capital
expenditure, concurrent with a reduction in effective leverage to
40% or lower and the maintenance of a fixed charge coverage ratio
above 2.5x on a sustainable basis and preserving its adequate
liquidity at all times.

Conversely, downward pressure on the rating or outlook could
result if there is a change in RPG Byty's ownership that has a
negative impact on Moody's assessment of the company's financial
policies (including, but not limited to, a further leveraging of
the company) or business risk profile. Or, alternatively, the
company's operations weaken as a result of decreased occupancy
rates, falling rents or increased unrecoverable repairs and
maintenance causing the company's financial metrics to
deteriorate such that its fixed charge coverage ratio falls below
1.9x or effective leverage trends above 45%; or liquidity
concerns develop.

The principal methodology used in this rating was the Global
Rating Methodology for REITs and Other Commercial Property Firms
published in July 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.

RPG Byty is an unlisted real estate company located in the Czech
Republic that invests in multifamily residential accommodation
and is managed by RPG RE Management s.r.o., a related external
management company that together with RPG Byty is wholly-owned by
the same ultimate shareholder, BXR Group Limited. RPG Byty
reported CZK24.5 billion in total assets and CZK2.92 billion
(approximately EUR976 million and EUR116 million respectively) in
revenues in the year ended December 31, 2012.



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G E R M A N Y
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EMC VI-EUROPROP: Fitch Lowers Rating on Class D Notes to 'CC'
-------------------------------------------------------------
Fitch Ratings has downgraded EMC VI - Europrop as follows:

  EUR270.7m class A (XS0301901657) downgraded to 'BBsf' from
  'BBBsf'; Outlook Negative

  EUR30m class B (XS0301902622) downgraded to 'Bsf' from 'BBsf';
  Outlook Negative

  EUR35m class C (XS0301903356) downgraded to 'CCCsf' from 'Bsf';
  Recovery Estimate (RE) 50%

  EUR30m class D (XS0301903513) downgraded to 'CCsf' from
  'CCCsf'; RE 0%

  EUR4m class E (XS0301903943) affirmed at 'Csf'; RE0%

  EUR6.6m class F (XS0301904248) affirmed at 'Csf'; RE0%

Key Rating Drivers

The downgrades reflect that all 14 loans remaining in the CMBS
have failed to repay at their scheduled maturity revealing the
steep market value declines the collateral has been subject to.
The work-out process will almost certainly erode the credit
protection granted to the senior classes as seen in the
distressed ratings for the class C through F notes; the limited
ability for the loans to withstand further stress to collateral
value forms the basis for the sub-investment grade class A
tranche.

The resolution of three loans has been completed since the last
rating action, with only the EUR28 million Bonn loan repaying in
full. The other two loans, the EUR7.5 million Henderson 1 and
EUR6.4 million Henderson 2 loans, both fell significantly short
of full repayment (aggregate recoveries were EUR7 million)
resulting in the transaction's first losses. This has led to the
debit of the class F principal deficiency ledger (PDL) for EUR6.2
million.

Unlike most European CMBS transactions, which are structured to
strip out scheduled excess spread senior in the waterfall
(usually via a class X note), EMC VI includes a PDL for each
class. This allows the PDL to reduce whenever excess spread is
present, allowing in theory to absorb incurred loan level losses
before write-downs are passed at the issuer level. Given the
transaction's performance, Fitch believes a full write down of
this class is considered inevitable.

The EUR100.4 million Sunrise II loan is the largest in the pool,
accounting for over a quarter by balance, and is supported by 48
retail assets located predominantly in secondary western German
cities. The loan defaulted at its original maturity in July 2011
with a subsequent 12-month extension granted by the servicer to
provide time to implement a repayment-focused business plan. The
two years since loan default have been fruitless with no asset
sales reported so far, although the expiry of interest rate
hedging and the low floating interest rates have allowed the loan
to amortize by EUR3 million via a cash sweep since the last
review in July 2012.

The removal of the Sunrise II borrower's asset manager and a
shorter four-month rolling maturity standstill should provide the
special servicer with much needed impetus to effect sales, with
the threat of enforcement ever-present. With portfolio disposals
of this type rarely surprising on the upside, Fitch is cautious
about the level of recoveries which can be expected, as reflected
in the agency's estimated loan-to-value ratio of approximately
140% (compared to a reported 77%).

Two other loans are very likely to incur significant losses: the
EUR24.8 million EPIC Horse and EUR33 million EPIC Rhino, both
backed by underperforming German multifamily housing portfolios.
Initially purchased with a view to improve high structural
vacancy through asset management initiatives, little progress has
been made. While various improvements have been completed on a
flat-by-flat basis (at the expense of meeting interest
obligations) many of the assets supporting these loans are very
dilapidated and as such have little economic value. Recent
valuations have leverage reported at 142% and 115%, respectively,
although Fitch estimates that final recoveries will be lower than
these figures suggest.

Rating Sensitivities

The sheer number of assets that need to be sold prior to the
bonds final legal maturity in 2017 means that unless progress is
made soon, further downgrades could be warranted, as the longer
the workouts the higher the exposure to potentially adverse
changes to market conditions and investor appetite.


LOEWE AG: Has 3 Months to Finish Restructuring, Find Investors
--------------------------------------------------------------
Joern Poltz at Reuters reports that Loewe AG's move to file for
protection from creditors' demands will speed up its search for
an investor.

"Now we have three months' time to finish restructuring and make
enough progress on the matter of finding an investor that the
court and creditors agree to a plan," Matthias Harsch, Loewe's
chief executive, told Reuters on Tuesday.

As reported by the Troubled Company Reporter-Europe on July 17,
2013, Reuters related that Loewe filed for protection from
creditors' demands in a last-ditch effort to turn around its
loss-making business.  Loewe has been struggling to return to
profit amid fierce competition from Asian rivals such as Samsung
and LG Electronics and a slide in the average price of television
sets, Reuters disclosed.  Its losses almost tripled to EUR29
million in 2012, Reuters noted.  The company, which is 28% owned
by Japan's Sharp, filed for protection from creditors at a German
court, under a law that gives firms up to three months of
breathing room to try to fix their finances to stave off
insolvency, Reuters said.

Loewe AG is a German high-end television maker.



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G R E E C E
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DRYSHIPS INC: Ocean Rig Enters Into US$1.8BB Term Loan Facility
---------------------------------------------------------------
DryShips Inc. and through its majority owned subsidiary, Ocean
Rig UDW Inc., of offshore deepwater drilling services, on July 15
disclosed that Ocean Rig, through its wholly-owned subsidiaries,
Drillships Financing Holding Inc., and Drillships Projects Inc.,
entered into a US$1.8 billion senior secured term loan facility,
comprised of tranche B-1 term loans in an aggregate principal
amount equal to US$975.0 million and tranche B-2 term loans in an
aggregate principal amount equal to US$825.0 million, with
respective maturity dates in the first quarter of 2021, subject
to adjustment to the third quarter of 2020 in certain
circumstances, and the third quarter of 2016.

The Term Loans are initially guaranteed by Ocean Rig and certain
existing and future subsidiaries of DFHI and are secured by
certain assets of, and by a pledge of the stock of, DFHI and the
subsidiary guarantors.

The net proceeds of the Term Loans were used by Ocean Rig to
repay in full amounts outstanding under Ocean Rig's US$800.0
million secured term loan agreement and two US$495.0 million
senior secured credit facilities, amounting to approximately
US$1.6 billion in the aggregate.  The balance of the net proceeds
are expected to be used by Ocean Rig to finance offshore drilling
rigs and for the payment of fees and expenses associated
therewith.

                       About DryShips Inc.

Headquartered in Athens, Greece, DryShips Inc. (NASDAQ: DRYS) is
an owner of drybulk carriers and tankers that operate worldwide.
Through its majority owned subsidiary, Ocean Rig UDW Inc.,
DryShips owns and operates 10 offshore ultra deepwater drilling
units, comprising of 2 ultra deepwater semisubmersible drilling
rigs and 8 ultra deepwater drillships, 3 of which remain to be
delivered to Ocean Rig during 2013 and 1 is scheduled for
delivery during 2015.  DryShips owns a fleet of 46 drybulk
carriers (including newbuildings), comprising of 12 Capesize, 28
Panamax, 2 Supramax and 4 Very Large Ore Carriers (VLOC) with a
combined deadweight tonnage of about 5.1 million tons, and 10
tankers, comprising 4 Suezmax and 6 Aframax, with a combined
deadweight tonnage of over 1.3 million tons.

The Company reported a net loss of US$288.6 million on
US$1.210 billion of revenues in 2012, compared with a net loss of
US$47.3 million on US$1.078 billion of revenues in 2011.

The Company's balance sheet at Dec. 31, 2012, showed
US$8.878 billion in total assets, US$5.010 billion in total
liabilities, and shareholders' equity of US$3.868 billion.

                       Going Concern Doubt

Ernst & Young (Hellas), in Athens, Greece, expressed substantial
doubt about DryShips Inc.'s ability to continue as a going
concern, citing the Company's working capital deficit of
US$670 million at Dec. 31, 2012, and in addition, the non-
compliance by the shipping segment with certain covenants of its
loan agreements with banks.

As of Dec. 31, 2012, the shipping segment was not in compliance
with certain loan-to-value ratios contained in certain of its
loan agreements.  In addition, as of Dec. 31, 2012, the shipping
segment was in breach of certain financial covenants, mainly the
interest coverage ratio, contained in the Company's loan
agreements relating to US$769,098,000 of the Company's debt.  As
a result of this non-compliance and of the cross default
provisions contained in all bank loan agreements of the shipping
segment and in accordance with guidance related to the
classification of obligations that are callable by the creditor,
the Company has classified all of its shipping segment's bank
loans in breach amounting to US$941,339,000 as current at
Dec. 31, 2012.



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


DEPFA FUNDING: Fitch Affirms 'C' Hybrid Instruments Rating
----------------------------------------------------------
Fitch Ratings has affirmed Depfa Bank plc's Long-term Issuer
Default Rating (IDR) at 'BBB+' with a Negative Outlook, Support
Rating at '2' and Support Rating Floor at 'BBB+'.

KEY RATING DRIVERS - IDRS, SUPPORT RATINGS AND SUPPORT RATING
FLOORS

The affirmation of Depfa's IDRs, Support Rating and Support
Rating Floor reflects Fitch's view that support for Depfa from
the Federal Republic of Germany (AAA/Stable) via the
Bundesanstalt fuer Finanzmarkstabilisierung (FMSA) which
administers the German Financial Market Stabilisation Fund
(SoFFin) would be highly likely while the bank continues to be
wholly-owned by, and form a significant proportion of, the
ultimately state-owned Hypo Real Estate Holding AG (HRE Holding;
A-/Stable).

Fitch believes that the existing albeit weakening operational and
economic links between Depfa and its sister bank Deutsche
Pfandbriefbank AG (PBB; A-/Stable), and FMS Wertmanagement (FMS
WM; AAA/Stable) would also yield some incentive for the FMSA to
support Depfa. FMS WM is a state-sponsored run-off institution
that acquired a nominal EUR173 billion of non-performing and non-
strategic assets and all SoFFin-guaranteed bonds from HRE Group
(to which Depfa belongs) in October 2010.

The co-operation between these entities will weaken from October
2013 in line with EU requirements. In particular, the service
level agreement under which Depfa services FMS-WM will expire at
end-September 2013. However, there will still be a link between
Depfa and FMS-WM in the form of asset guarantees. FMS-WM has
provided guarantees to Depfa for assets earmarked for transfer to
FMS-WM but which remain on Depfa's balance sheet for reasons such
as legal, contractual or tax restrictions. The volume of such
guarantees is likely to weaken in the medium term due to asset
maturities and counterparty negotiations.

However, the continued indirect state ownership of Depfa (via HRE
Holding) is the main driver of Fitch's view of the high
likelihood of support. This viewpoint is underpinned by the
potential reputational damage to SoFFin, FMSA and ultimately
Germany, as well as the likely impact on HRE Holding, of allowing
Depfa to fail.

Depfa's Negative Outlook is driven by its medium-term goal of
privatization, which could trigger a multi-notch downgrade of
Depfa's IDRs depending on any new owner's ability and propensity
to support the bank. The Outlook also reflects the agency's view
that Depfa will eventually become fully separated from PBB and
FMS-WM.

Depfa's VR was withdrawn on 26 August 2011 as it is in run-off
mode and its on-going viability is dependent on continued
external support. The agreement with the European Commission
prohibits Depfa from originating any new banking business while
it is state-owned.

RATING SENSITIVITIES - IDRS, SUPPORT RATINGS AND SUPPORT RATING
FLOORS

Depfa's IDR is sensitive to any change in Fitch's view of
Germany's propensity to support banks and Pfandbrief issuers in
particular, or to its view of Germany's ability to support its
banks, as signaled by Germany's sovereign rating. The state aid
agreement with the European Commission requires the re-
privatization of Depfa by end-2014, and downward rating pressure
would likely arise from selling the bank to a lower-rated bank or
a financial investor.

In addition, a significant reduction in Depfa's balance sheet
relative to that of HRE Holding would reduce the negative impact
on the German-based HRE Holding entities of not providing support
to Depfa, which would likely cause Fitch to revise down its
viewpoint regarding Germany's propensity to support Depfa.
However, this would be a more long-term scenario.

Given Depfa's domicile in the Republic of Ireland (BBB+/Stable),
the bank's ratings also reflect the broad sovereign and
associated banking sector risks in Ireland, not all of which are
within the German owner's power to neutralize. Therefore Depfa's
IDR is also sensitive to the Irish sovereign rating.

KEY RATING DRIVERS - SUBORDINATED DEBT AND OTHER HYBRID
SECURITIES

Depfa's lower Tier 2 subordinated debt rating has been affirmed
at 'B+'. Depfa's subordinated debt rating is based on expected
support from the group if ever needed and reflects Fitch's view
of the combined strength of the group's financial fundamentals.

The agency also affirmed Depfa's hybrid Tier 1 securities at 'C'
to reflect the uncertain timing of these issues being serviced
again. The European Commission agreement does not permit
distribution on profit-related capital instruments (other than
SoFFin-related ones) -- which are not mandatory for legal reasons
-- prior to the earlier of re-privatization and December 31,
2015.

SUSBIDIARY AND AFFILIATED COMPANY KEY RATING DRIVERS

DEPFA ACS Bank (DEPFA ACS) and Hypo Public Finance Bank puc
(HPFB) are 100% subsidiaries of Depfa in Ireland. Fitch has
aligned the ratings of the subsidiaries with the parent due to
their integration into Depfa, as well as the reputational risk to
the ultimate supporter of allowing a DEPFA subsidiary to fail.
DEPFA ACS benefits from a declaration of backing from its parent,
expressing Depfa's commitment to fulfil DEPFA ACS's contractual
obligations in case of need. HPFB is a public unlimited liability
company wholly owned by Depfa. It has not conducted any new
business since its merger with Depfa in 2008 and most of its
remaining assets have been transferred to FMS WM. Fitch
understands that Depfa intends to voluntarily liquidate HPFB at
some point.

The rating actions are:

Depfa Bank plc:

Long-term IDR: affirmed at 'BBB+'; Outlook Negative
Short-term IDR: affirmed at 'F2'
Support Rating: affirmed at '2'
Support Rating Floor: affirmed at 'BBB+'
Commercial paper: affirmed at 'BBB+'/ 'F2'
Senior unsecured: affirmed at 'BBB+' / 'F2'
Market linked securities: affirmed at 'BBB+emr'
Subordinated notes (lower Tier 2): affirmed at 'B+'

DEPFA ACS Bank:

Long-term IDR: affirmed at 'BBB+'; Outlook Negative
Short-term IDR: affirmed at 'F2'
Support Rating: affirmed at '2'
Senior unsecured: affirmed at 'BBB+'/'F2'

Hypo Public Finance Bank puc:

Long-term IDR: affirmed at 'BBB+'; Outlook Negative
Short-term IDR: affirmed at 'F2'
Support Rating: affirmed at '2'

Depfa Funding II LP:

  Hybrid Capital Instruments affirmed at 'C'

Depfa Funding III LP:

  Hybrid Capital Instruments affirmed at 'C'

Depfa Funding IV LP:

  Hybrid Capital Instruments affirmed at 'C'


QUINN INSURANCE: Administrators to Take Former Auditors to Court
----------------------------------------------------------------
Tim Healy at Belfast Telegraph reports that the administrators of
Quinn Insurance -- once part of the empire of bankrupt Fermanagh
businessman Sean Quinn -- are taking steps aimed at securing an
urgent hearing of their action against the company's former
auditors.

The action by Michael McAteer and Paul McCann of Grant Thornton
will allege professional negligence against
PricewaterhouseCoopers in relation to guarantees given by Quinn
Insurance over loans to bankrupt Mr. Quinn and his family which
allegedly resulted in its collapse, Belfast Telegraph discloses.
It is also over issues concerning the adequacy of the company's
reserves, Belfast Telegraph notes.

The President of Dublin's High Court, Mr. Justice Nicholas
Kearns, was on July 11 told by Bernard Dunleavy, for the joint
administrators, they intended to proceed with their action,
Belfast Telegraph relates.

According to Belfast Telegraph, a summons issued against PwC last
February had been renewed, would be served soon and his side
would then apply to the Commercial Court to have the action
fast-tracked.

The counsel said the Republic's Minister for Finance had been
informed of the administrators' intentions and had raised no
objection to the proposed course of action, Belfast Telegraph
notes.

The collapse of Quinn Insurance is expected to result in some
EUR1.6 billion (GBP1.4 billion) public money being drawn down
from the Irish State-backed Insurance Compensation Fund, which
has lead to the Government imposing a 2% levy on various
insurance policies, Belfast Telegraph discloses.

On March 30, 2010, following an application by the Central Bank
of Ireland, the High Court appointed joint provisional
administrators to Quinn Insurance Limited.


* S&P Takes Various Rating Actions on Irish Banks
-------------------------------------------------
Standard & Poor's Ratings Services said that it has taken the
following rating actions on Irish banks:

   -- It revised the outlook on Barclays Bank Ireland PLC (BBI)
      to positive from stable and affirmed its 'A-/A-2' long- and
      short-term counterparty credit ratings.

   -- It revised the outlook on Bank of Ireland (BOI) to stable
      from negative and affirmed the 'BB+/B' long- and short-term
      counterparty credit ratings.

   -- It revised the outlook on KBC Bank Ireland PLC (KBCI) to
      stable from negative and affirmed the 'BBB-/A-3' long- and
      short-term counterparty credit ratings.

   -- It affirmed the 'BB/B' long- and short-term counterparty
      credit ratings on Allied Irish Banks PLC (AIB).

   -- It affirmed the 'B+/B' long- and short-term counterparty
      credit ratings on Permanent TSB PLC (PTSB).

   -- It revised the outlook on Ulster Bank Ltd. (UBL) and Ulster
      Bank Ireland Ltd. (UBIL) to negative from stable and
      affirmed the 'BBB+/A-2' long- and short-term counterparty
      credit ratings.

S&P reviewed all rated Irish banks following its recent revision
of the outlook on the long-term sovereign credit rating on
Ireland to positive from stable and its assessment of more stable
prospects for economic and industry risks for the Irish banking
system.  S&P also took into account bank-specific rating factors
that it considers when assessing Irish banks' creditworthiness.

S&P still considers that Irish banks face high economic risks,
although less so than in recent years, and therefore view the
trend for economic risk as stable.  S&P sees tentative signs of
improving economic growth, declining unemployment levels, and
property prices bottoming out in 2013.  However, household debt
is still elevated and S&P expects credit losses across most asset
classes to meaningfully affect bank earnings over the next two-
to-three years.

"In our opinion, industry risks are equally high in Ireland.  In
our view, muted underlying revenue growth is likely to maintain
pre-provision operating income at low levels this year and next.
We also believe the turnaround in systemwide funding remains far
from complete.  The weak regulatory track record continues to
weigh heavily on our view of the Irish institutional framework,
not least because we believe that the authorities are not being
sufficiently proactive with regard to capitalization, stress
testing, or the timeliness and frequency of bank reporting," S&P
said.

"Our outlook revision to positive on BBI mirrors our outlook on
the sovereign.  We designate BBI as a "core" subsidiary of 100%
owner Barclays group, as defined in our group ratings
methodology. As a result, we would potentially equalize the
ratings on BBI with other "core" operating companies of the
group, including the main banking entity, Barclays Bank PLC.
However, given our view of BBI as an Irish bank with "moderate"
domestic Irish exposure, the long-term rating on BBI is capped at
one notch above our long-term sovereign credit rating on
Ireland," S&P added.

"The outlook revision to stable on BOI reflects our view that it
is demonstrating greater progress in normalizing its earnings and
balance sheet profile than its Irish peers, in the context of a
very difficult operating environment.  We anticipate that BOI
will return to pre-tax profitability ahead of peers because in
our view it is better placed to adjust its deposit pricing and
generate new lending.  Furthermore, we consider weaknesses in its
loan book to be less substantial.  We expect a steady improvement
in BOI's pre-provision operating income this year and next,
combined with a decline in loan impairment charges, such that
pre-tax profits in 2014 are now a reasonable possibility.  We
also believe that BOI's domestic mortgage book will perform a
little better than peers. This is an important consideration in
our ratings analysis because we expect mortgage write-offs to
accelerate across the industry now that a legislative gap
preventing foreclosures has been closed.  Capital remains a
ratings weakness for BOI, however, by our measures, with a risk-
adjusted capital (RAC) ratio of 3.7% at Dec. 31, 2012," S&P
noted.

The outlook revision to stable on KBCI reflects S&P's view of
reduced downside risk to its creditworthiness, specifically
around capitalization.  Underlying this view are two factors: the
gradually reducing scope for further outsized losses at KBCI; and
the continued supportiveness of its parent, KBC Bank NV, with
regard to capital, as well as funding.

"We have maintained the negative outlooks on AIB and PTSB because
in both cases we still see at least a one-in-three probability
that we will lower their ratings over the next 12 months.  For
AIB, this is based on our view that the bank still faces
considerable challenges to return to profitability.  This is in
addition to our view that the bank's capitalization is especially
low, as measured by our RAC framework.  We calculate that AIB's
RAC was 3.0% at Dec. 31, 2012, and we expect this ratio to remain
close to this ratings threshold over the next one to two years as
deleveraging offsets the negative effect of further losses
expected for 2013.  We could lower the ratings on AIB if, by our
measures, capital erodes by more than we currently expect," S&P
noted.

In the case of PTSB, capitalization is currently stronger than
that of AIB and BOI--at Dec. 31, 2012, S&P calculates its RAC
ratio to be 8.5%.  However, S&P considers that PTSB's domestic
residential mortgage book, 71% of net loans, will continue to
perform poorly.  This, combined with PTSB's subdued pre-provision
earnings prospects and possible deleveraging, may constrain its
capitalization.

The outlook revision to negative from stable on UBL and UBIL
reflects S&P's belief that risks to their ratings are skewed to
the downside.  On the one hand, S&P notes the positive outlook on
the long-term rating on Ireland.  If S&P raised the ratings on
the sovereign, it could also raise those on UBL and UBIL.  On the
other hand, however, while S&P's base case is that its ultimate
parent Royal Bank of Scotland Group PLC (RBSG) will remain a
supportive, 100% ultimate shareholder of UBL and UBIL over the
long term, S&P sees a meaningful risk that their position within
RBSG could become less certain than it is currently, leading S&P
to review their "highly strategic" group status.  Since S&P
currently attributes greater weight to this downside risk and
sees it as the more near-term issue, it reflects it in the
outlook on UBL and UBIL.

BICRA SCORE SNAPSHOT

Ireland                   To                 From

BICRA Group               7                  7

Economic Risk             7                  7
Economic resilience      Intermediate       Intermediate
Economic imbalances      Very High Risk     Very High Risk
Credit risk in
  the economy             Very High Risk     Very High Risk

Industry Risk             7                  7
Institutional framework  High Risk          High Risk
Competiveness dynamics   High Risk          Intermediate Risk
Systemwide funding       Very High Risk     Very High Risk

Banking Industry Country Risk Assessment (BICRA) economic risk
and industry risk scores are on a scale from 1 (lowest risk) to
10 (highest risk).

RATINGS LIST
(All ratings are affirmed,
except where a "from" rating is indicated.)

Allied Irish Banks PLC
Counterparty Credit Rating   BB/Negative/B

                             To                   From

Barclays Bank Ireland PLC
Counterparty Credit Rating   A-/Positive/A-2      A-/Stable/A-2

Bank of Ireland
Counterparty Credit Rating   BB+/Stable/B         BB+/Negative/B

KBC Bank Ireland PLC
Counterparty Credit Rating   BBB-/Stable/A-3   BBB-/Negative/A-3

Permanent TSB PLC
Counterparty Credit Rating   B+/Negative/B

                             To                   From
Ulster Bank Ltd.
Counterparty Credit Rating   BBB+/Negative/A-2    BBB+/Stable/A-2

Ulster Bank Ireland Ltd.
Counterparty Credit Rating   BBB+/Negative/A-2    BBB+/Stable/A-2

N.B.-This does not include all ratings affected.



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


FINMECCANICA SPA: Fitch Cuts Issuer Default Rating to 'BB+'
-----------------------------------------------------------
Fitch Ratings has downgraded Finmeccanica SpA's (FM) Long-term
Issuer Default Rating (IDR) to 'BB+' from 'BBB-' and Short-term
IDR to 'B' from'F3'. The agency has also downgraded Finmeccanica
Finance SA's and Meccanica Holding Inc's senior unsecured ratings
to 'BB+' from 'BBB-'. The Outlook on the Long-term IDR is
Negative. All ratings have been removed from Rating Watch
Negative.

The downgrade reflects Fitch's view that the previously assumed
improvements in the financial profile relating to de-leveraging
and underlying cash generation in the short term are unlikely to
be achieved. This is the result of a combination of a weaker
market outlook and delays in the asset disposal process.
Consequently, we believe that FM will not exhibit the financial
profile expected of an investment grade A&D company within the
rating horizon.

Although actions have been taken to improve the corporate
governance structure and bring it in line with international
peers, it is too early to determine if the actions taken have
been adequate to deal with the company's recent corporate
governance problems. Corporate governance will remain a key
rating issue and driver.

The Negative Outlook reflects Fitch's concerns over (i) the
timeliness of de-leveraging and (ii) the potential for cash flow
generation in the upcoming two to three years being weak for a
'BB+' rating, factors which when combined limit FM's available
headroom for the current rating.

KEY RATING DRIVERS

Delays in Asset Disposals
Fitch previously assumed that Finmeccanica would complete asset
disposals of up to EUR1 billion by early 2013, the proceeds of
which were to be applied to net debt reduction. To date, only the
15% stake in aero engine parts maker, AVIO SpA, has been
announced, which will bring in around EUR260 million of proceeds.
Whilst it is still possible that the company will complete the
sales of targeted assets, the on-going delays in this process
mean that the anticipated improvement in the company's leverage
position will not materialize in the expected time frame in order
for the company to maintain an investment grade rating.

High Leverage, Poor FCF Outlook
At end-2012, FM exhibited a gross leverage level of over of 4x,
which is not consistent with an investment grade rating in the
A&D sector. In the absence of cash proceeds from asset disposals,
FM is reliant on free cash flow (FCF) generation to reduce debt
levels. However, Fitch expects FCF generation in the next two
years to be weak as a result of an uncertain defense market
outlook, high capex needs, the drag from the loss-making Ansaldo
Breda subsidiary and an operational profile only gradually
improving from the recently undertaken and on-going restructuring
measures.

Corporate Governance
While Fitch views positively recent actions undertaken by the
company's management in relation to recent scandals involving
prior senior management, the agency remains concerned about the
potential for fresh bribery or corruption -related investigations
into present and former FM managers. Significant new adverse
developments involving senior company officers may further affect
the company's reputation globally as well as the execution of the
restructuring plan, and this may have a rating impact.

Uncertain Defense Market Outlook
Key defense markets, from which FM generates over half of its
revenues, like Italy, the US and the UK face uncertain budget
outlooks. Fiscal pressures in European markets, coupled with the
effects of sequestration in the US, mean that in the short term,
revenue growth potential is likely to remain poor and cash
generation weak.

Rating Sensitivities

Future developments that may, individually or collectively, lead
to negative rating action include:

-- New material adverse findings or actions in relation to
    the corruption and bribery investigations taking place.

-- FFO based lease adjusted gross leverage sustained above 4x.

-- Adjusted FFO margin below 7%.

-- Consistently negative FCF.

-- Further material cash restructuring charges.

Future developments that may, individually or collectively, lead
to positive rating action include:

-- Closure of disposals of non-core assets, with consequent debt
    reduction of approximately E800m.

-- FFO adjusted leverage sustainably below 2.5x (at least two
    years, with at least one being historical).

-- Adjusted FFO margin sustainably above 10% (at least two
years,
    with at least one being historical).

-- FCF/revenue consistently above 2%.

-- Evidence of improvement in corporate governance

LIQUIDITY AND DEBT STRUCTURE

Adequate Liquidity

At end-Q113, FM held cash of EUR1,426 billion, owing largely to
the EUR600 million bond placed in December 2012 to refinance the
EUR1 billion December 2013 bond (EUR750 million outstanding). Net
lease-adjusted debt was EUR6.3 billion (end-2012: EUR4.9bn),
although EUR573 million of this is related party debt owed to
JVs. Committed available bank lines total EUR2.4 billion, with
expiry in 2015.

FULL LIST OF RATING ACTIONS

Finmeccanica SpA

  Long-Term IDR downgraded to 'BB+' from 'BBB-'
  Short-Term IDR downgraded to 'B' from 'F3'
  Senior unsecured rating downgraded to 'BB+' from 'BBB-'

Finmeccanica Finance SA

Senior unsecured rating downgraded to 'BB+' from 'BBB-'

Meccanica Holdings USA Inc

Senior unsecured rating



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


AMANAT INSURANCE: Fitch Corrects Rating Release
-----------------------------------------------
Fitch Ratings issued a correction on AMANAT Insurance
(Kazakhstan)'s rating release.

This announcement corrects the version published on July 15,
2013, which incorrectly stated the regulatory solvency margin as
at June 2013.

Fitch Ratings has affirmed AMANAT Insurance (Kazakhstan)'s
(AMANAT) Insurer Financial Strength (IFS) rating at 'B' and
National IFS rating at 'BB(kaz)'. The Outlooks are Stable.

KEY RATING DRIVERS

AMANAT's ratings reflect adequate, albeit declining, risk-
adjusted capitalization offset by ongoing regulatory solvency
risk and relatively weak profitability. The ratings also reflect
the low credit quality of AMANAT's investment portfolio, with
substantial holdings of sub-investment-grade debt and equity.

AMANAT's Fitch-calculated risk-adjusted capital adequacy showed a
decline between 2010-2012. The decline in 2011 was caused by the
fact that the net premium growth was higher than the increase in
capital following an equity injection in Q411. In 2012, a
significant dividend payment of KZT400 million further weakened
the risk-adjusted capital position. The dividend withdrawal
raises some concerns about AMANAT's future capital management
policy. Nevertheless, the company's risk-adjusted capital
position remains supportive of the current ratings.

AMANAT's regulatory solvency margin reached a marginal level of
100.3% of the required minimum during Q412 after a period of
comfortable surplus in Q411 and most of 2012. The main reason for
this deterioration was a reduction in available capital, which
followed the acquisition of several large insurance contracts.
The regulatory solvency margin subsequently improved to 120% at
year-end 2012, but declined again to 113% at June 2013.

Fitch is concerned that by maintaining low coverage of the
statutory solvency margin there is an increased risk that a
breach of the minimum regulatory solvency requirement could occur
from unexpected business fluctuations.

AMANAT's return on adjusted equity averaged to only 2% between
2010-2012. The low level of overall profitability is explained by
the poor technical performance of its insurance operations, in
contrast to the good performance of its investment portfolio.
AMANAT's combined ratio improved moderately in 2012 to 108% (2011
- 114%). This was caused by an improvement in the loss ratio
component, while the commission and expense ratios remained
relatively stable compared to 2011.

The accounting year loss ratio decreased to 28.7% at end-2012
from 35.2% at end-2011. This was driven by positive loss reserve
development in the same year, which more than offset a moderate
rise in claims activity across a number of lines.

The riskiness of AMANAT's investment portfolio has been growing
over the past three years. Equity instruments accounted for 19.2%
of total investments at end-2012, up from 8.7% at end-2011 and
4.8% at end-2010. Fitch is somewhat concerned by the growing
equity exposure as AMANAT has recently had negative experience in
equity investments. The investment portfolio also contains
significant concentrations.

Rating Sensitivities

Fitch notes that the scope for positive rating action is
currently limited in the absence of evidence of more conservative
management of the regulatory solvency ratio. Conversely, a
prolonged fall of AMANAT's solvency margin below 100%, in the
absence of further financial support from the shareholder, could
lead to a downgrade.

AMANAT's ratings could be upgraded if the company reported two
consecutive years of underwriting and investment profits.


EURASIAN BANK: S&P Revises Outlook to Pos. & Affirms 'B+' Rating
----------------------------------------------------------------
Standard & Poor's Ratings Services said that it had revised its
outlook on Kazakhstan-based Eurasian Bank to positive from stable
and affirmed its 'B+' long-term and 'B' short-term counterparty
credit ratings on the bank.  At the same time, S&P raised its
Kazakhstan national scale rating on Eurasian Bank to 'kzBBB+'
from 'kzBBB'.

The rating actions reflect S&P's view that Eurasian Bank's
business position in Kazakhstan's banking system has been
strengthening.  The bank advanced its market share to 3.5% by
assets as of June 1, 2013, from 2.8% at year-end 2009, while
maintaining its position among the country's top 10 banks.
Eurasian Bank has significantly expanded its retail client base,
reaching more than 700,000 active customers, of which more than
110,000 are retail depositors.

The management team of experienced Western and Kazakh bankers has
markedly improved the bank's profitability.  The return on assets
was 2.4% and the return on equity 25% in 2012, after a loss of
Kazakhstani tenge 9.4 billion (about US$63 million) in 2009.  In
addition, as of Dec. 31, 2012, the net interest margin had
increased to 6.9% from 1.9% in 2009, and the cost-to-income ratio
improved to 55% from 106%.  The bank's current profitability
metrics are among the strongest of the top 10 Kazakh banks.

Eurasian Bank's capitalization, as measured by our risk-adjusted
capital ratio (RAC) before adjustments, strengthened to 6.1% at
year-end 2012, from 3.9% two years earlier, and S&P expects it to
move into the 6.5%-7.0% range by the end of 2014.

In addition, the bank maintains stable asset-quality indicators,
which compare favorably with peers', with the ratio of
nonperforming loans (NPLs; loans more than 90 days overdue) at
7.7% as of March 31, 2013.  This metric is enhanced by a
meaningful volume of relatively unseasoned new lending; therefore
S&P regards asset quality as a neutral factor for the ratings.

"In our view, the bank is well positioned to continue its
profitable growth in Kazakhstan's banking sector.  The resources
of the largest banks are still tied up with a large stock of
problem loans, and many small and midsize banks are pursuing
aggressive expansion strategies.  In our view, such banks will
require significant investments in infrastructure and risk
management systems to ensure that expansion does not jeopardize
their long-term profitability.  By contrast, we believe that if
Eurasian Bank continues on its current path it may exhibit higher
stability through the business cycle than peers, due to its solid
risk management systems, more conservative growth strategy, and
experienced management team," S&P said.

"The positive outlook reflects the progress that Eurasian Bank
has made over the past two years that in our view will continue.
It indicates that we could upgrade the bank over the next 12-18
months as we see a meaningful possibility that its business
position could improve to "adequate" from "moderate," as defined
in our criteria.  We believe such improvement would likely occur
if the bank maintains its disciplined risk appetite and pricing,
and its balance-sheet strength with regard to capitalization,
funding, and liquidity.  This may be consistent with Eurasian
Bank exhibiting slower loan growth than many peers.
Nevertheless, we anticipate that the bank will strengthen its
franchise, maintain good brand recognition and reputation, and
foster long-standing relationships with its clients," S&P added.

S&P could take a negative rating action if Eurasian Bank were to
show an increased risk appetite, for example through weaker
underwriting standards, rising single-name concentrations, or a
reversal of the positive trend in capitalization and
profitability.



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


AMSTERDAM TRADE: Moody's Assigns First-Time Ba2 Deposit Rating
--------------------------------------------------------------
Moody's Investors Service has assigned first-time local and
foreign currency long-term deposit ratings of Ba2, local and
foreign currency short-term deposit ratings of Not-Prime, and a
standalone bank financial strength rating (BFSR) of D (equivalent
to a baseline credit assessment (BCA) of ba2) to Amsterdam Trade
Bank N.V. (ATB). The outlooks on the standalone BFSR and the
long-term deposit ratings are stable.

Ratings Rationale:

Long-Term Rating

Moody's assessment of the likelihood of support from ATB's
parent, Alfa-Bank (long-term rating Ba1 stable; BFSR/BCA D/ba2
stable) results in a moderate probability of parental support for
ATB. However, as the standalone risk profiles of both the parent
and its subsidiary are reflected at the same level of BCA at ba2,
the support assumptions do not provide for any rating uplift for
ATB's long-term deposit ratings. Moody's does not assume any
systemic support from the Dutch government (Aaa negative) into
ATB's long-term deposit ratings.

Standalone Credit Assessment

ATB's ba2 BCA mainly reflects (1) the bank's relatively high risk
profile deriving from concentrated corporate banking activities
in CIS countries; (2) its limited standalone franchise and intra-
group exposures; (3) reputational risks embedded into its pledged
deposit transactions; and (4) its solid financial fundamentals
(relative to peers) and the fact that ATB is subject to the
regulations and supervision of the Dutch Central Bank (DNB).

ATB is a Dutch subsidiary of Russian bank Alfa-Bank, which is
Russia's largest privately owned banking group, operating one of
the largest retail branch networks in the country. ATB primarily
conducts lending activities towards corporate exporters based in
the Commonwealth of Independent States (CIS) and Central and
Eastern Europe (CEE). The bank is the competence center in Europe
for Alfa-Bank in the area of international corporate banking and
cross-border trade financing. Moody's views ATB's overall credit
profile as risky, because its lending business involves large
single-borrower concentrations and emerging/developing country
concentrations.

ATB plays an increasing role within Alfa banking group, as
illustrated by its growing importance and expertise in cross-
border trade finance transactions. Although ATB's governance is
independent from its parent, Moody's believes that the bank's
franchise remains largely dependent on Alfa-Bank. Despite recent
geographical diversification efforts, ATB's loan origination is
still largely tied to Alfa-Bank's network in the CIS region,
which tend to limit its standalone franchise. Moreover, ATB's BCA
is also constrained by intra-group exposures to Alfa-Bank
representing around 40% if the bank's Tier 1 capital, and to
other related parties.

In addition, ATB serves as intermediary in pledged deposit
transactions, where clients deposit money at ATB which then
instantaneously re-deposits the funds at another bank for a fee.
As part of these transactions, ATB offers its CIS customers an
entry point to foreign market investments, facilitating due
diligence and compliance processes. Although Moody's understands
that no credit risk and/or liquidity risk are entailed in such
operations, they artificially inflate the bank's balance sheet,
adding complexity and opacity to some degree, and could result in
reputational risks in Moody's opinion.

Nevertheless, as a Dutch bank, ATB is regulated and supervised by
the DNB. In Moody's view ATB is subject to a more stringent
supervisory framework than its peers in the CIS countries. The
bank benefits from strong capitalization and liquidity metrics,
although funding may be confidence-sensitive as it consists of
retail deposits sourced via the Internet and corporate deposits.
Profitability is only moderate and exhibits some volatility due
to the lack of diversification of the bank and the modest
granularity of the loan portfolio. In Moody's opinion, the bank's
financial fundamentals are relatively solid overall but
commensurate with the bank's risk profile.

As a result of Moody's assessment of the degree of strategic,
financial and operational interconnectedness with the parent,
ATB's BCA has been aligned with that of Alfa-Bank, at ba2.

Rationale For The Outlook

The stable outlook on the bank's ratings reflects the rating
agency's view that the currently foreseen risks to creditors are
fully reflected.

What Could Change The Rating Up/Down

A rise of ATB's BCA would require both an uplift in Alfa-Bank's
BCA and the following factors : (1) a decrease in risk appetite,
reflected in lower borrower and country concentration levels; and
(2) a decrease in related-party exposures. An uplift in ATB's BCA
would result in an upgrade in the bank's long-term ratings in the
same order of magnitude.

A lowering of ATB's BCA could be triggered by (1) a lowering of
Alfa-Bank's BCA; (2) a deterioration in the bank's financial
fundamentals, notably asset quality, which could be the
consequence of adverse fluctuations in energy and raw material
prices and a slowdown in emerging/developing economies where ATB
is doing business. A lowering of ATB's BCA may result in a
downgrade of the bank's long-term ratings, unless Moody's
moderate parental support assumptions translate into rating
uplift.


DALRADIAN EUROPEAN: Moody's Lifts Rating on T Notes to Caa2
-----------------------------------------------------------
Moody's Investors Service has upgraded the ratings of the
following notes issued by Dalradian European CLO II B.V.:

  EUR31.83M Class B Deferrable Secured Floating Rate Notes due
  2022, Upgraded to Aa1 (sf); previously on Aug 2, 2011 Upgraded
  to A1 (sf)

  EUR23.81M Class C Deferrable Secured Floating Rate Notes due
  2022, Upgraded to Baa1 (sf); previously on Aug 2, 2011 Upgraded
  to Baa3 (sf)

  EUR25.8M Class D Deferrable Secured Floating Rate Notes due
  2022, Upgraded to Ba2 (sf); previously on Aug 2, 2011 Upgraded
  to Ba3 (sf)

  EUR15M (currently EUR14.5M rated balance outstanding) Class E
  Deferrable Secured Floating Rate Notes due 2022, Upgraded to
  Caa1 (sf); previously on Aug 2, 2011 Upgraded to Caa3 (sf)

  EUR6M (currently EUR4.6M rated balance outstanding) Class P
  Combination Notes due 2022, Upgraded to Baa1 (sf); previously
  on Aug 2, 2011 Upgraded to Baa3 (sf)

  EUR4M (currently EUR2.5M rated balance outstanding) Class T
  Combination Notes due 2022, Upgraded to Caa2 (sf); previously
  on Aug 2, 2011 Confirmed at Ca (sf)

  EUR7M (currently EUR5.3M rated balance outstanding) Class W
  Combination Notes due 2022, Upgraded to Baa3 (sf); previously
  on Aug 2, 2011 Upgraded to Ba1 (sf)

Moody's also affirmed the ratings of the following notes issued
by Dalradian European CLO II B.V.:

  EUR114M (currently EUR42.5M rated balance outstanding) Secured
  Floating Rate Variable Funding Notes due 2022, Affirmed Aaa
  (sf); previously on Dec 22, 2006 Definitive Rating Assigned Aaa
  (sf)

  EUR87.72M (currently EUR42.6M rated balance outstanding) Class
  A1 Senior Secured Floating Rate Notes due 2022, Affirmed Aaa
  (sf); previously on Dec 22, 2006 Definitive Rating Assigned Aaa
  (sf)

  EUR59.2M Class A2 Senior Secured Floating Rate Notes due 2022,
  Affirmed Aaa (sf); previously on Aug 2, 2011 Upgraded to Aaa
  (sf)

Dalradian European CLO II B.V., issued in November 2006, is a
multi-currency Collateralized Loan Obligation ("CLO") backed by a
portfolio of mostly high yield European senior secured loans. The
portfolio is managed by N M Rothschild & Sons Limited. This
transaction passed its reinvestment period in December 2012.

Ratings Rationale:

According to Moody's, the rating actions taken on the notes
result primarily from an improvement in the overcollateralization
ratios of the rated notes pursuant to amortization of the
portfolio. The variable funding notes and the Class A-1 notes
amortized by approximately EUR37 million (or 25%) on the latest
payment date in June 2013, and by approximately EUR66 million (or
44%), since the last rating action in August 2011.

As a result of this deleveraging, the overcollateralization
ratios (or "OC ratios") have increased since the rating action in
August 2011. As of the latest trustee report dated May 28, 2013,
the Class A, Class B, Class C, Class D and Class E OC ratios are
reported at 161.02%, 137.01%, 123.26%, 111.18% and 105.18%,
respectively, versus May 2011 levels of 146.22%, 127.09%,
115.76%, 105.56% and 100.42%, respectively. These OC ratios based
on the May 2013 report do not reflect the latest payment date
report in June 2013.

In consideration of the reinvestment restrictions applicable
during the amortization period, and therefore the limited ability
to effect significant changes to the current collateral pool,
Moody's analyzed the deal assuming a higher likelihood that the
collateral pool characteristics will continue to maintain a
positive buffer relative to certain covenant requirements. In
particular, the deal is assumed to benefit from a shorter
amortization profile and higher spread levels compared to the
levels assumed prior to the end of the reinvestment period in
December 2012 and at the time of the last rating action in August
2011.

The ratings of the Combination Notes address the repayment of the
Rated Balance on or before the legal final maturity. For Class W,
the 'Rated Balance' is equal at any time to the principal amount
of the Combination Note on the Issue Date increased by the Rated
Coupon of 0.25% per annum respectively, accrued on the Rated
Balance on the preceding payment date minus the aggregate of all
payments made from the Issue Date to such date, either through
interest or principal payments. For Classes P and T, the 'Rated
Balance' is equal at any time to the principal amount of the
Combination Notes on the Issue Date minus the aggregate of all
payments made from the Issue Date to such date, either through
interest or principal payments. The Rated Balance may not
necessarily correspond to the outstanding notional amount
reported by the trustee.

In its base case, Moody's analyzed the underlying collateral pool
to have a performing par and principal proceeds balance of
EUR241.3 million, defaulted par of EUR16 million, a weighted
average rating factor of 3099 (corresponding to a default
probability of 20.5% over 3.81 years), a weighted average
recovery rate upon default of 46.3% for a Aaa liability target
rating, a diversity score of 30 and a weighted average spread of
3.76%. The default probability is derived from the credit quality
of the collateral pool and Moody's expectation of the remaining
life of the collateral pool. The average recovery rate to be
realized on future defaults is based primarily on the seniority
of the assets in the collateral pool. For a Aaa liability target
rating, Moody's assumed that 89.4% of the portfolio exposed to
senior secured corporate assets would recover 50% upon default,
while the remainder non-first-lien loan corporate assets would
recover 15%. In each case, historical and market performance
trends and collateral manager latitude for trading the collateral
are also relevant factors. These default and recovery properties
of the collateral pool are incorporated in cash flow model
analysis where they are subject to stresses as a function of the
target rating of each CLO liability being reviewed.

In addition to the base case analysis, Moody's also performed
sensitivity analyses on key parameters for the rated notes:
Deterioration of credit quality to address the refinancing and
sovereign risks -- Approximately 12% of the portfolio are
European corporate rated B3 and below and maturing between 2014
and 2016, which may create challenges for issuers to refinance.
Approximately 3.6% of the portfolio are exposed to obligors
located in Ireland and Spain. Moody's considered a model run
where the base case WARF was increased to 3451 by forcing ratings
on 25% of such exposure to Ca. This run generated model outputs
that were within one notch from the base case results.

Moody's notes that this transaction is subject to a high level of
macroeconomic uncertainty, which could negatively impact the
ratings of the notes, as evidenced by 1) uncertainties of credit
conditions in the general economy and 2) the large concentration
of speculative-grade debt maturing between 2014 and 2016 which
may create challenges for issuers to refinance. CLO notes'
performance may also be impacted either positively or negatively
by 1) the manager's investment strategy and behavior and 2)
divergence in legal interpretation of CDO documentation by
different transactional parties due to embedded ambiguities.

Sources of additional performance uncertainties:

1) Portfolio Amortization: The main source of uncertainty in this
transaction is whether delevering from unscheduled principal
proceeds will continue and at what pace. Delevering may
accelerate due to high prepayment levels in the loan market
and/or collateral sales by the liquidation agent, which may have
significant impact on the notes' ratings. Typically, fast
amortization will benefit the ratings of the senior notes but may
negatively impact the ratings of the mezzanine and junior notes.

2) Recovery of defaulted assets: Market value fluctuations in
defaulted assets reported by the trustee and those assumed to be
defaulted by Moody's may create volatility in the deal's
overcollateralization levels. Further, the timing of recoveries
and the manager's decision to work out versus sell defaulted
assets create additional uncertainties. Moody's analyzed
defaulted recoveries assuming the lower of the market price and
the recovery rate in order to account for potential volatility in
market prices.

3) The deal has significant exposure to non-EUR denominated
assets. Volatilities in foreign exchange rate will have a direct
impact on interest and principal proceeds available to the
transaction, which may affect the expected loss of rated
tranches.

The principal methodology used in this rating was "Moody's Global
Approach to Rating Collateralized Loan Obligations" published in
May 2013.

Moody's modeled the transaction using the Binomial Expansion
Technique, as described in Section 2.3.2.1 of the "Moody's Global
Approach to Rating Collateralized Loan Obligations" rating
methodology published in May 2013.

Under this methodology, Moody's used its Binomial Expansion
Technique, whereby the pool is represented by independent
identical assets, the number of which is being determined by the
diversity score of the portfolio. The default and recovery
properties of the collateral pool are incorporated in a cash flow
model where the default probabilities are subject to stresses as
a function of the target rating of each CLO liability being
reviewed. The default probability range is derived from the
credit quality of the collateral pool, and Moody's expectation of
the remaining life of the collateral pool. The average recovery
rate to be realized on future defaults is based primarily on the
seniority of the assets in the collateral pool.

The cash flow model used for this transaction is Moody's EMEA
Cash-Flow model.

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

In addition to the quantitative factors that are explicitly
modeled, qualitative factors are part of the rating committee
considerations. These qualitative factors include the structural
protections in each transaction, the recent deal performance in
the current market environment, the legal environment, specific
documentation features, the collateral manager's track record,
and the potential for selection bias in the portfolio. All
information available to rating committees, including
macroeconomic forecasts, input from other Moody's analytical
groups, market factors, and judgments regarding the nature and
severity of credit stress on the transactions, may influence the
final rating decision.

On March 12, 2013, Moody's released a report, which describes how
sovereign credit deterioration impacts structured finance
transactions and the rationale for introducing two new parameters
into its general analysis of such transactions. In the coming
months, Moody's will update its methodologies relating to multi-
country portfolios including the one for Collateralized Loan
Obligations (CLOs) as well as for other types of collateralized
debt obligations (CDO), asset-backed commercial paper (ABCP) and
commercial mortgage-backed securities (CMBS). Once those
methodologies are updated and implemented, the rating of the
notes affected by these rating actions may be negatively
affected.


EPIC CMBS: Administrator Puts Shopping Malls Up for Sale
--------------------------------------------------------
Shopping malls linked to Epic (Drummond) CMBS were sold through
Dutch insolvency administrator AKD, Neil Callanan at Bloomberg
News reports, citing legal firm Ashurst which advised Cerberus.

Bloomberg relates that Ashurst said in a statement the main
tenant is Kaufland.

Details of the deal were disclosed in a July 10 filing by Epic
(Drummond) Ltd. to the Irish Stock Exchange, Bloomberg notes.


NIBC BANK: Fitch Lowers Rating on Hybrid Tier 1 Secs. to 'B+'
-------------------------------------------------------------
Fitch Ratings has downgraded NIBC Bank NV's (NIBC) Long-term
Issuer Default Rating (IDR) to 'BBB-' from 'BBB'. The Short-term
IDR has been affirmed at 'F3'. The Outlook on the Long-term IDR
is Stable.

The downgrade reflects the prolonged profitability challenges
faced by the bank's niche business model in the current operating
environment. Recurring income (net interest income and net fees
and commissions) has been under pressure from the low interest
rates and weak new business volumes. Although NIBC has
established expertise in niche sectors, its franchise is small
and acts as a constraint in its pricing power and new businesses
generation.

KEY RATING DRIVERS - IDRS, VR AND SENIOR DEBT

NIBC's Long-term IDR and senior debt ratings are driven by the
bank's intrinsic creditworthiness and are equalized to its
Viability Rating (VR). The Short-term IDR maps across from its
Long-term IDR.

Fitch views the continued profitability challenges faced by NIBC
as a reflection of the vulnerability of its niche banking
business model and limited franchise to downward economic cycles.
This business profile renders its capital at risk of having to
absorb greater than anticipated loan impairment charges during
times of stress. The risk is heightened by the bank's asset
exposure to relatively large, transaction-based, loans in
cyclical and higher risk industries (commercial real estate,
shipping and leveraged finance).

In its assessment of NIBC's VR, Fitch also takes into account the
bank's strong capital position (15.6% Fitch Core Capital ratio at
end-2012) as well as its cautious liquidity management. The large
liquidity position maintained by the bank is expected to reduce,
however, after the repayment of the significant debt securities
coming due in 2014, and does not reflect a structurally liquid
balance sheet.

A gradual improvement in NIBC's operating income is expected for
2013 and 2014 (based on an improved net interest margin) and loan
impairment charges should remain at manageable levels but income
generated by recurring and client-driven transactions is expected
to remain modest in the short- to medium-term.

RATING SENSITIVITIES - IDRS, VR AND SENIOR DEBT

The Stable Outlook on the Long-term IDR incorporates an expected
widening of the bank's net interest margin in 2013 and 2014,
essentially owing to the downward repricing of the rates paid on
customer deposits. It also reflects, however, the expected
prolonged pressure on asset quality in the bank's corporate loan
book due to the current economic conditions. Nonetheless, Fitch
expects NIBC to continue to adequately manage the deterioration
in asset quality and contain the impact on its financials and
credit metrics, notably owing to its consistent and pro-active
risk management, which has resulted in the successful
restructuring and/or divestment of problem loans.

Although Fitch does not expect rating changes in the short- to
medium-term, as defined by the Stable Outlook, the bank's VR,
IDRs and senior debt rating are sensitive to a change in Fitch's
assumptions around the prudent approach to risk taken by the
bank, its solid capital position and prudent liquidity
management. Severe asset quality stresses beyond the bank's
ability to manage them, resulting in material depletion of its
capital position would cause strong downward pressure.

Fitch currently sees limited upward potential for the bank's VR;
this could occur if NIBC succeeds in reporting a track record of
improved recurring earnings, while maintaining its strong capital
position and cautious approach to liquidity management.

KEY RATING DRIVERS - SUPPORT RATING AND SUPPORT RATING FLOOR

Given the bank's ownership structure, business mix and small
franchise in the Dutch market, Fitch does not factor any
potential support from the Dutch state in the bank's Support
Rating and Support Rating Floor ('5' and 'No Floor'
respectively).

Similarly, while there is a possibility that its owner, a
shareholders consortium led by the private equity firm JC Flowers
& Co, may support NIBC in case of need, its ability to do so
cannot be measured by Fitch and hence potential support from its
ultimate shareholders is also not factored into NIBC's Support
Rating and Support Rating Floor.

RATING SENSITVITIES - SUPPORT RATING AND SUPPORT RATING FLOOR

Fitch currently does not envisage any upward pressure on NIBC's
Support Rating and Support which are the lowest level of the
rating scale with the current shareholder structure of the bank.

KEY RATING DRIVERS - SUBORDINATED DEBT AND HYBRID SECURITIES

NIBC's subordinated debt and hybrid securities are notched from
the bank's VR, in accordance with Fitch's methodology. Their
downgrade is a reflection of the downgrade of the bank's VR.

Subordinated debt securities issued by NIBC are rated one notch
below the bank's VR to reflect below average loss severity of
this debt when compared to average recoveries. The bank's hybrid
Tier 1 securities are rated four notches below its VR to reflect
higher loss severity risk of these securities when compared to
average recoveries (two notches from the VR) as well as high risk
of non-performance (an additional two notches).

RATING SENSITIVITIES - SUBORDINATED DEBT AND HYBRID SECURITIES

The ratings of the subordinated debt and hybrid Tier1 securities
are broadly sensitive to the same considerations that might
affect NIBC's VR.

KEY RATING DRIVER AND SENSITIVITIES - STATE GUARANTEED DEBT

NIBC state guaranteed securities are rated 'AAA', reflecting the
Dutch sovereign guarantee and so are sensitive to any change in
the Netherlands' rating ('AAA/Negative').

The rating actions are:

  Long-term IDR: Downgraded to 'BBB-' from 'BBB'; Outlook Stable
  Short-term IDR: affirmed at 'F3'
  Viability Rating: downgraded to 'bbb-' from 'bbb'
  Support Rating: affirmed at '5'
  Support Rating Floor: affirmed at 'NF'
  State guaranteed debt: affirmed at 'AAA'/'F1+'
  Senior unsecured debt: downgraded to 'BBB-' from 'BBB'
  Subordinated debt: downgraded to 'BB+' from 'BBB-'
  Hybrid Tier 1 securities: downgraded to 'B+' from 'BB-'



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


BANK URALSIB: Moody's Lowers Deposit Ratings to 'B2'
----------------------------------------------------
Moody's Investors Service has downgraded Bank Uralsib's long-term
global local- and foreign-currency deposit ratings to B2 from B1,
and changed the outlook to negative from stable. At the same
time, the rating agency affirmed the E+ standalone bank financial
strength rating (BFSR), which now is equivalent to a baseline
credit assessment (BCA) of b2 (formerly b1), and carries a stable
outlook.

Ratings Rationale:

Moody's downgrade of Bank Uralsib's long-term deposit ratings
reflects the bank's weak capital profile that is suppressed by a
high level of non-core assets, high contributions to the
shareholder and the loss-making performance by the bank for two
consecutive years. At the same time, the affirmation of the E+
standalone BFRS reflects the bank's visible market position and
strengthening retail franchise, which is likely to support the
bank's interest margins.

Weak Capital Profile

Bank Uralsib pursues a risky capital distribution strategy. In
2010-12, the bank paid over 14% of Tier 1 capital in the form of
dividends and charity contributions. Together with the loss-
making performance, this strategy led to a decrease of the bank's
Tier 1 capital adequacy ratio to a weak 9.4% as at year-end 2012
from 13.7% two years earlier.

In addition, Bank Uralsib's loss absorption capacity is
undermined by a high level of non-core assets, investment
property and its stake in a non-consolidated insurance company
which together accounted for over 110% of Tier 1 capital at year-
end 2012 (66% a year earlier). The bank's exit strategy from
investments in non-core assets does not envisage a material
reduction in non-core assets on a short-term rating horizon, and
medium-term prospects of such reduction are uncertain given the
challenging credit conditions in Russia, which also covers
Moody's concerns associated with the bank's fair value assessment
of non-core assets.

Loss-Making For Two Consecutive Years

Bank Uralsib's loss-making performance during the period 2011-12
was mainly driven by (1) low net interest margin of 3.4% in 2012
(2011: 3.8%); (2) a high cost base due to the bank's strategy of
retail franchise expansion, with the cost-to-income ratio close
to 95% (2011: 86%); and (3) the need for strengthening of loan
loss reserves. The risk associated with the concentrated loan
portfolio -- with top-20 loans accounting to over 165% of Tier 1
capital -- crystallized in 2011-12, when the deterioration in the
performance of a handful borrowers required provisions that
resulted in negative bottom-line earnings. As a result the bank's
provision charges exceeded pre-provisioning income in 2012 by
more than three times compared to over two times a year earlier
(the increase was mainly driven by suppressed pre-provision
income, while, in absolute terms, the bank's provisioning charges
dropped by 33% in 2012).

What Could Move The Ratings Up / Down

The outlook on Bank Uralsib's ratings could be changed to stable
if the bank (1) substantially improves its financial
fundamentals, particularly profitability and cost-efficiency
indicators; and (2) materially reduces its non-core investments.
Bank Uralsib's ratings could be downgraded in the event of
continued negative earnings trends and cost-efficiency
indicators, and capital adequacy levels. The ratings may also be
downgraded if the bank does not materially reduce its exposure to
non-core assets on the outlook horizon.

Headquartered in Moscow, Russia, Bank Uralsib reported
consolidated total assets of RUB451 billion (US$14.9 billion) as
of December 31, 2012 (in accordance with audited IFRS).

The principal methodology used in this rating was Global Banks
published in May 2013.


MEGAFON OAO: Fitch Affirms 'BB+' LT Issuer Default Rating
---------------------------------------------------------
Fitch Ratings has affirmed OAO MegaFon's (MegaFon) Long-term
Issuer Default Rating (IDR) at 'BB+' with a Stable Outlook.

MegaFon's business and financial profile corresponds to an
investment-grade rating on a standalone basis likely mapping to a
'BBB' level. This is notched down reflecting Russian country-wide
governance concerns but also MegaFon's specific corporate
governance and shareholding situation. Alisher Usmanov is the
ultimate controlling shareholder in MegaFon and can exert
significant influence on the operator. MegaFon can therefore be
viewed as a private Russian company with a 15% public free float.

Key Rating Drivers

Strong Operating, Financial Profile
MegaFon is the second-largest mobile operator in Russia by
subscribers. In view of the company's good network quality and
sufficient LTE spectrum, Fitch believes that MegaFon will be able
to maintain its strong competitive positions. The company
benefits from operating in a modestly growing market, which
should support its headline revenue growth.

Improving Market Shares
MegaFon has been able to gradually increase its market shares and
further gains are likely, although at a diminishing pace. MegaFon
has invested more than its peers, which has ensured its leading
positions in the mobile internet sector. A propensity to invest
may change under the new ownership, but prior years' capex and an
achieved network edge over peers should continue to help
increasing the company's market share.

Russia's Largest LTE Portfolio
MegaFon controls more spectrum than any other operator in Russia,
which guarantees its data future for years to come. The company
received cost-efficient 800 megahertz (Mhz) frequencies, as one
of the four winners in the all-Russia long-term evolution (LTE)
spectrum auction in July 2012.

Shareholding A Concern
MegaFon is unlikely to be protected from a potential negative
influence by AF Telekom, its majority shareholder. The latter
company is ultimately controlled by Mr. Usmanov who is a
principal shareholder of JSC Holding Company Metalloinvest (BB-
/Stable), for which Fitch assesses corporate governance at below
its peers average.

Shareholder Friendly Distribution Policy
The announced dividend policy of paying the larger of 50% of net
income or 70% of cash flow is likely to push down the free cash
flow (FCF) margin to around 3%-4%. Although this is not a concern
on its own, any acquisitions or expansion into new segments and
geographic markets would probably require debt funding,
triggering a spike in leverage.

Moderate Leverage Sustainable
MegaFon generates sufficient cash flow to fund organic
development, so that the company's leverage is likely to remain
relatively moderate, close to the upper bound of its stated
target of between 1.2x and 1.5x net debt(ND)/EBITDA. Leverage is
not a concern. The company retains flexibility to increase
leverage up to 3x FFO adjusted net leverage within the current
rating level, provided that liquidity is strong and there are no
concerns about refinancing issues.

Rating Sensitivities

-- A stronger ring-fence around MegaFon, protecting it from
   potential negative shareholder influence, may be rating
   positive.

-- A sustained increase in leverage to above 3x FFO adjusted net
   leverage, particularly if combined with liquidity and
   refinancing concerns may lead to a downgrade.

-- An evidence of negative shareholder influence such as
   upstreaming excessive cash in the interests of a wider group
   may be rating negative.

Full List of Rating Actions

  Long-Term IDR: affirmed at 'BB+', Outlook Stable
  Long-Term Local Currency IDR: affirmed at 'BB+', Stable
  Short-Term IDR: affirmed at 'B'
  National Long-Term Rating: affirmed at 'AA(rus)', Outlook
   Stable
  Senior unsecured: affirmed at 'BB+' and 'AA(rus)



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


GC FTPYME: Fitch Affirms 'CCC' Rating on Class C Notes
------------------------------------------------------
Fitch Ratings has downgraded one tranche of GC FTPYME Sabadell 4,
FTA (GC4) and revised the Outlook on one tranche of GC FTPYME
Sabadell 5 FTA (GC5) as follows:

GC4

  Class A(G) notes (ISIN ES0341169011):affirmed at 'AA-sf';
   Outlook Negative

  Class B notes (ISIN ES0341169029): downgraded to 'BBB-sf' from
   'BBBsf'; Outlook revised to Negative from Stable

  Class C notes (ISIN ES0341169037): affirmed at 'CCCsf'; RE
   revised to 45% from 65%

GC5

  Class A2 notes (ISIN ES0332234014): affirmed at 'AA-sf';
    Outlook Negative

  Class A3(G) notes (ISIN ES0332234022): affirmed at 'AA-sf';
   Outlook Negative

  Class B notes (ISIN ES0332234030): affirmed at 'BBBsf'; Outlook
   revised to Negative from Stable

  Class C notes (ISIN ES0332234048): affirmed at 'CCCsf'; RE
   revised to 65% from 90%

GC4 and GC5 are securitizations of loans originated by Banco
Sabadell and granted to Spanish SMEs and self-employed
individuals. The transactions are of similar vintage and broadly
similar pool level performance, although GC4 has a higher level
of arrears. In addition, both transactions have significant real
estate and building and materials industry concentrations with
GC4 having 51.4% exposure and GC5 44% exposure.

Key Rating Drivers

The affirmation of the class A(G) notes of GC 4 and the class A2
and A3(G) notes of GC 5 reflects a rating cap on Spanish
structured finance of 'AA-sf' (five notches above the sovereign
rating) and a Negative Outlook due to the Outlook on the Kingdom
of Spain (BBB/Negative/F2).

The downgrade of GC4's class B notes reflects decreased recovery
expectations when expected recoveries are compared with actual
recoveries, rising delinquencies and increased defaults as a
percentage of the remaining pool. The affirmation of GC4's class
C notes at 'CCCsf' reflects their subordinated position in the
capital structure. The recovery estimate of 45% reflects the
agency's expectations. The class C notes' 2.98% credit
enhancement is provided by the EUR3.1 million reserve fund, which
was below its required amount of EUR7.9 million as of the
May 2013 investor report, and has decreased from EUR4.5 million
at last review.

As of the latest investor report for GC4, current defaulted loans
in the portfolio have increased to EUR11.7 million from EUR9.7
million since the last review and accounted for 12.1% of the
outstanding balance. Loans more than 90 days in arrears comprise
6% of the outstanding portfolio balance, an increase from 3.4%at
last review and loans more than 180 days in arrears comprise
4.66% of the outstanding portfolio balance, an increase from
1.92% at the last review.

The revision of the Outlook on GC5's class B notes reflects
decreased recovery expectations when expected recoveries are
compared with actual recoveries. The affirmation of GC5's class C
notes at 'CCCsf' reflects their subordinated position in the
capital structure. The recovery estimate of 65% reflects the
agency's expectations. The class C notes' 4.1% credit enhancement
is provided by the EUR7.9 million reserve fund, which was below
its required amount of EUR13.75 million as of the May 2013
investor report.

As of the latest investor report for GC5, current defaulted loans
in the portfolio have increased to EUR20.1 million from EUR19.2
million at the last review and accounted for 11% of the
outstanding balance. Loans more than 90 days in arrears comprise
2.3% of the outstanding portfolio balance and loans more than 180
days in arrears comprise 0.9% of the outstanding portfolio
balance.

Rating Sensitivities

The agency incorporated two additional stress tests in their
analysis to determine the ratings' sensitivity. The first
addressed a reduction of recovery expectations, whereas the
second simulated an increased default probability. In both stress
tests, class A(G) notes of GC FTYPME Sabadell 4 and both the
class A2 notes and class A3(G) notes of GC FTYPME Sabadell 5
ratings' are stable. However, in both scenarios a rating action
on classes B and C of GC4 and GC5 would be likely.


KUTXABANK: Moody's Affirms 'Ba1' Deposit Ratings; Outlook Neg.
--------------------------------------------------------------
Moody's Investors Service has affirmed Kutxabank's debt and
deposit ratings at Ba1/ Not Prime, and its standalone bank
financial strength rating (BFSR) at D (equivalent to a ba2
baseline credit assessment or BCA). All ratings have a negative
outlook.

The affirmation of the ratings reflects Moody's view of
Kutxabank's capacity to maintain an adequate risk-absorption
capacity despite ongoing negative asset-quality trends arising
from the weak operating environment and very low interest rates,
both of which will continue to put pressure on the bank's
recurring earnings power.

Rationale For Affirmation

Standalone BFSR and BCA

The rating affirmation of Kutxabank's standalone ratings has been
driven by (1) Moody's view of Kutxabank's capacity to generate
sufficient earnings to offset the ongoing increase in
provisioning requirements during 2012, while maintaining a
resilient capital base; and (2) the stabilizing trend in the non-
performing loan (NPL) ratio over the last two years -- in
contrast to the significant deteriorating trend in NPLs for all
Spanish banks -- of CajaSur Banco (unrated) credit portfolio, a
subsidiary of Kutxabank that houses amongst the group's more
seriously impaired assets. As a result, Kutxabank's overall
asset-quality indicators are slightly better than the average of
the Spanish banking system.

However, as Kutxabank's NPL ratio rose to 9.93% at end-March 2013
(against the system average of 10.47%), Moody's will continue to
monitor the bank's asset-quality performance closely. Moody's
takes some comfort from the clean-up performed by the group at
the time of the acquisition of Cajasur (2011) and the sizable
provisioning effort made in 2012 following the Spanish
government's more stringent provisioning standards for real-
estate-related assets that resulted in a coverage ratio (defined
as loan loss reserves/NPL) of 70%, which is in line with the
system average of 70.4%.

Moody's also notes, however, that in addition to the NPLs, the
group has gross real-estate (RE) assets of EUR4.3 billion at
year-end 2012 that were acquired during this crisis through
repossessions and negotiations with troubled borrowers, which if
included increase the NPL ratio to 16.5% (Moody's-estimated
system average: 17%). Furthermore, Moody's notes the high
percentage of refinanced loans at the bank (9.9% of gross loans).
The aggregation of refinanced loans (that are not already
captured in the non-performing loan ratio) increases the overall
problem loan ratio to a high 21.7%, compared to Moody's-
estimated system average of close to 26%. In this context,
Moody's emphasized that the ability of the bank to continue its
track record of better asset quality performance in relation to
the system average in Spain will be a vital indication that the
risk profile of its assets have been correctly assessed. Any
indication that Kutxabank's asset-quality trend is less resilient
than the Spanish banking system average would exert downward
rating pressure.

Moody's expects asset quality to deteriorate further across asset
classes, based on the rating agency's view that any signs of a
modest economic recovery are currently being generated by the
export sector, while still weak domestic demand is likely to
cause further contraction in domestic growth into 2014 as
unemployment remains at very high levels. Any signs of more
substantial declines in economic activity in 2013 or 2014 would
exert significant downward pressure on Kutxabank's ratings.

Debt and Deposit Ratings

The long-term debt and deposit ratings were affirmed at Ba1/Not
Prime following the affirmation of the bank's standalone BFSR.

Kutxabank's debt and deposit ratings benefit from a moderate
probability of systemic support, which results in one notch of
uplift from its standalone credit strength of D/ba2.

Subordinated Debt Ratings

In line with the affirmation of the bank's BCA, Moody's has also
affirmed at Ba3 the subordinated debt ratings of Kutxabank.

Rationale For The Negative Outlook

The negative outlook that Moody's has assigned to the BFSR and
the debt and deposit ratings incorporates the challenges faced by
the bank. Those include the continuing weak operating environment
in Spain, which is characterized by the recessionary domestic
economy and overall low growth expectations for the remainder of
2013 and 2014, the ongoing real-estate crisis, very high
unemployment and the broader euro area sovereign and banking
crisis. These conditions will likely lead to further asset-
quality deterioration across the banking system and pose risks to
the already-fragile confidence of funding providers.

What Could Change The Rating Up/Down

There is currently no visible upward pressure on the ratings
given the current negative outlook of Kutxabank's rating.

Negative pressure on the bank's long-term debt and deposit
ratings could result from a further downgrade of the Spanish
government's ratings, currently Baa3 (negative outlook), as well
as from a downgrade of its standalone BFSR.

Downward pressure on the standalone BFSR could be exerted by (1)
an acceleration in the trend of formation of NPLs, both on an
absolute level and in relation to the system average; (2)
weakening of Kutxabank's internal capital generation and risk-
absorption capacity; and/or (3) any worsening in operating
conditions beyond Moody's current expectations, (i.e., a broader
economic recession beyond the rating agency's current GDP
forecast of a 1.4% contraction for 2013 and a GDP growth forecast
between 0% and 1% for 2014).

The principal methodology used in this rating was Global Banks
published in May 2013.


RURAL HIPOTECARIO: Fitch Rates EUR22.5-Mil. Class B Notes 'B'
-------------------------------------------------------------
Fitch Ratings has assigned Rural Hipotecario XIV F.T.A.'s
mortgage-backed floating-rate notes due May 2055 final ratings,
as follows:

   EUR202,500,000 class A notes 'Asf'; Outlook Negative

   EUR22,500,000 class B notes: 'Bsf'; Outlook Negative

The transaction is a securitization of a EUR225 million static
pool of Spanish residential mortgage loans, originated and
serviced by Bantierra (the originator, unrated). This is the
first standalone securitization of mortgage loans originated by
Bantierra, while the originator has participated in various
multi-seller RMBS transactions in the past eight years. The
ratings address timely payment of interest and ultimate payment
of principal on the class A notes, and ultimate payment of
interest and principal on the class B notes by the legal final
maturity date of the notes in May 2055.

Key Rating Drivers

In deriving the lifetime default rate of the securitized
portfolio under a base case scenario, Fitch has adjusted upwards
the observed default rates by a factor of 1.1x. This upward
adjustment captures our opinion that the historical default rates
do not entirely reflect the risk attributes of the securitized
pool which is linked to younger vintages 2009 to 2012. Fitch
received historic cumulative arrears data covering 2004 to 2008
from Bantierra based on its past RMBS securitization
transactions.

The underlying assets are judged to be of prime quality as all
positions are first-lien residential mortgage loans, with a
moderate weighted average (WA) OLTV of 69.0%. The WA indexed CLTV
derived by the agency is of 72.4%, which captures a WA loan
seasoning of 59 months. Fitch believes one key risk attribute of
this portfolio is its high geographical concentration in the
region of Aragon, and consequently has incorporated into its
analysis a probability of default hit of 1.15x for these loans.

Fitch believes that servicer disruption risk, caused by the
default of the collateral servicer, is adequately mitigated by
the incorporation of purpose-specific liquidity reserves and the
appointment of a cold back up servicer, Banco Cooperativo Espanol
S.A. (BCE, 'BBB'/Negative/'F3'). BCE provides the Spanish Credit
Cooperative Group with a common range of services and uses the
same IT systems.

Fitch has accommodated within its cash flow analysis potential
stresses derived from basis and reset risks, as the structure is
unhedged. The notes are referenced to three- month EURIBOR with
quarterly resets, while most loans are referenced to 12-month
EURIBOR with annual or bi-annual resets. In the agency's view,
structural credit enhancement for the class A notes (15%) and for
the class B notes (5%) is sufficient to adequately mitigate these
risks at the relevant stress scenario.

Rating Sensitivities

Fitch believes the key risks that that can introduce volatility
to the ratings are house price declines beyond Fitch's
expectations, as these could limit recoveries, and a change of
the current legal framework materially weakening the full
recourse nature of the Spanish mortgage market as such scenario
could change borrower payment behavior. The Negative Outlook on
the notes reflects the uncertainty associated with changes to the
mortgage enforcement framework, which could affect borrower
payment behavior and recovery timing.

Fitch's expectation under a 'Bsf' rating scenario is linked to a
WA lifetime loss rate of 4.01%, which results from a WA
foreclosure frequency assumption (WAFF) of 7.4% and a WA recovery
rate (WARR) expectation of 44.3%. The assumed WA loss rate in an
'A' rating scenario is of 11.1%.


SANTANDER EMPRESAS 1: Fitch Affirms 'CCC' Rating on Cl. D Notes
---------------------------------------------------------------
Fitch Ratings has affirmed FTA Santander Empresas 1's notes, as
follows:

EUR32.28m Class B (ISIN ES0382041020): affirmed at 'AA-sf';
Outlook Negative

EUR96.1m Class C (ISIN ES0382041038): affirmed at 'AA-sf';
Outlook Negative

EUR170.5m Class D (ISIN ES0382041046): affirmed at 'CCCsf'; RE80%

Key Rating Drivers

The affirmation reflects adequate levels of credit enhancement
available to the rated notes. Loans in arrears of more than 90
days account for 4.43% of the portfolio, down from 5.11% in
May 2012. The balance of defaulted assets in the portfolio has
increased slightly to EUR11.81 million from EUR11.2 million in
May 2012.

The largest obligor accounts for 4.6% of the portfolio notional
and operates in the real estate industry. The ten largest
obligors together represent 20.1% of the portfolio. The reserve
fund is EUR22.55 million, which is slightly higher than EUR22.42
million as at the last review.

The class B and C notes' rating and Outlook are limited by the
rating of the Kingdom of Spain (BBB/Negative/F2). The highest
achievable rating for Spanish structured finance transactions is
'AA-sf', five notches above the sovereign's rating.

Rating Sensitivities

Applying a 1.25x default rate multiplier or a 0.75x recovery rate
multiplier to all assets in the portfolio would not result in a
downgrade of the notes.

F.T.A. Santander Empresas 1 is a granular cash flow
securitization of a static portfolio of secured and unsecured
loans granted to Spanish small- and medium-sized enterprises by
Banco Santander S.A. (BBB+/Negative/F2).


* SPAIN: Fitch Puts Several Utilities on Rating Watch Negative
--------------------------------------------------------------
Fitch Ratings has placed several utilities with significant
exposure to Spain (including Iberdrola, S.A., Gas Natural SDG,
S.A., Enel, Endesa, S.A. and Energias de Portugal, S.A.-EDP) on
Rating Watch Negative (RWN).

The RWN follows the announcement by the Spanish government on 12
July of new regulatory measures to permanently resolve the excess
cost or tariff deficit (TD) generated by the Spanish electricity
system that will impact utilities' cash flows and expected credit
metrics. In addition, we view the operating environment for
utilities in Spain as worsening. Fitch believes that these
measures are likely to be approved in the Congress given the
majority of the Popular Party (PP) but timing remains unknown at
this stage. Fitch expects to resolve the RWN after reviewing the
impact on metrics, rating guidelines and changes to investment
plans of individual companies. We expect a significant reduction
of investments in the sector as this would be one of the few
countermeasures that companies will use to off-set further
deterioration of their credit profiles.

KEY DRIVERS

Regulated Earnings Cuts
This new round of proposed regulatory measures reduces regulated
earnings through lower returns on electricity transmission and
distribution assets, lower returns on renewable assets and lower
capacity payments for gas plants. Despite an increase in access
tariffs, the affected utilities will see reduced cash flow
generation and credit metrics, potentially to levels weaker than
our current rating guidelines.

Political Interference
We view the proposal as a further sign of increasing political
risk in the sector. This is despite the inclusion of the
government's contribution towards the budget elimination. The
weak operating environment and regulatory risk already constrain
the ratings of utilities in Spain. We are unlikely to revise the
negative outlook for the sector until the TD issue is largely
eliminated.

System Still in Deficit
It remains to be seen if the new proposal is more successful in
TD reduction, after the regulatory measures introduced in 2012
and in early 2013 did not achieve this goal. We believe that some
capacity mothballing and tariff increases are needed to balance
the system. This is because TD is fundamentally largely caused by
weak demand and high remuneration for renewables.

Proposed New Measures
The new measures include a 6.5% access tariff increase (3.2%
tariff increase for end-consumers), which is expected to collect
around EUR900m per annum, a EUR2.7bn cost cutting per annum
mainly through reductions in electricity distribution and
transmission remuneration, lower capacity payments and end of
subsidies for renewable generation in the future. Additionally,
the regulatory package includes EUR900m per annum to be assumed
by the state budget.

The full list of rating actions and rating sensitivities is as
follows:

Iberdrola, S.A.
Long-term IDR of 'BBB+' placed on RWN
Short-term IDR of 'F2' placed on RWN
Senior unsecured 'BBB+' placed on RWN
National Long-term rating 'AAA(mex)' placed on RWN

Iberdrola International BV
Senior unsecured rating of 'BBB+' placed on RWN
Commercial Paper rating 'F2' placed on RWN
Subordinated notes rating of 'BBB-'placed on RWN

Iberdrola Finanzas, S.A.U.
Senior unsecured 'BBB+' placed on RWN
National Long-term rating 'AAA(mex)' placed on RWN

Iberdrola Finance Ireland Limited
Senior unsecured of 'BBB+' placed on RWN

RATING SENSITIVITIES

Positive: Future developments that may potentially lead to a
resolution of the RWN and affirmation of the ratings include:

-- Limited impact of the approved measures with FFO adjusted
   net leverage substantially below 4.5x and FFO interest
   coverage above 4.0x on a sustained basis.

Negative: Future developments that may potentially lead to a
downgrade of the ratings include:

-- An increase of FFO adjusted net leverage above 4.5x and FFO
   interest coverage below 4.0x on a sustained basis as a result
   of the approved measures.

-- Deterioration of the operating environment or further
   government measures substantially reducing cash flows.

Scottish Power Limited (SPL)
Long-term IDR of 'BBB+' placed on RWN
Short-term IDR of 'F2' placed on RWN
Senior unsecured 'BBB+' placed on RWN
SPL's ratings are equalised with the ratings of its Spanish
  parent Iberdrola, S.A.

Scottish Power UK (SPUK)
Long-term IDR of 'BBB+' placed on RWN
Short- term IDR of 'F2' placed on RWN
Senior unsecured 'A-' placed on RWN
SPUK's IDRs are capped by the ratings of Iberdrola, S.A.

RATING SENSITIVITIES

Positive: Future developments that may potentially lead to a
resolution of the RWN and affirmation of the ratings include:

-- An affirmation of Iberdrola's IDR.

Negative: Future developments that may potentially lead to a
downgrade of the ratings include:

-- A downgrade of Iberdrola's IDR.

-- Leveraging of SPL and SPUK or its operating subsidiaries
beyond
   the levels assumed by Fitch leading to a weakening of their
   standalone credit profiles and a concurrent weakening of the
   links with Iberdrola.

Gas Natural SDG, S.A.
Long-term IDR of 'BBB+' placed on RWN
Short- term IDR of 'F2' placed on RWN

Gas Natural Fenosa Finance BV
Senior unsecured 'BBB+' placed on RWN
Euro commercial Paper programme 'F2' placed on RWN

Gas Natural Capital Markets, S.A.
Senior unsecured 'BBB+' placed on RWN

Union Fenosa Financial Services USA LLC
Subordinated debt 'BB+' placed on RWN

Union Fenosa Preferentes, S.A.
Subordinated debt 'BB' placed on RWN

RATING SENSITIVITIES

Positive: Future developments that may potentially lead to a
resolution of the RWN and affirmation of the ratings include:

-- Limited impact of the approved measures with FFO adjusted net
   leverage substantially below 4.0x and FFO interest coverage
   above 4.5x on a sustained basis.

Negative: Future developments that may potentially lead to a
downgrade of the ratings include:

-- An increase of FFO adjusted net leverage above 4.0x and FFO
   interest coverage below 4.5x on a sustained basis as a result
   of the approved measures.

-- Deterioration of the operating environment or further
   government measures substantially reducing cash flows.

Enel, S.p.A.
Long-term IDR of 'BBB+' placed on RWN
Short-term IDR of 'F2' placed on RWN
Senior unsecured rating 'BBB+' placed on RWN
Subordinated notes rating of 'BBB-(exp) withdrawn

Enel Finance International NV
Senior unsecured rating of 'BBB+' placed on RWN
Short-term IDR of 'F2' placed on RWN

Enel Investment Holding BV
Senior unsecured rating 'BBB+' placed on RWN

RATING SENSITIVITIES

Positive: Future developments that may potentially lead to a
resolution of the RWN and affirmation of the ratings include:

-- Limited impact of the approved measures with FFO adjusted net
   leverage substantially below 4.5x and FFO interest coverage
   above 4.0x on a sustained basis.

Negative: Future developments that may potentially lead to a
downgrade of the ratings include:

-- An increase of FFO adjusted net leverage above 4.5x and FFO
   interest coverage below 4.0x on a sustained basis as a result
   of the approved measures.

-- Deterioration of the operating environment or further
   government measures substantially reducing cash flows.

Endesa, S.A.
Long-term IDR of 'BBB+' placed on RWN
Short-term IDR of 'F2' placed on RWN
Senior unsecured rating 'BBB+'/'F2' placed on RWN
Preferred Stock affirmed to 'BB+' , placed on RWN
Endesa's ratings are equalised with the ratings of its Italian
  parent Enel S.p.A.

International Endesa BV
Commercial paper rating of 'F2' placed on RWN

RATING SENSITIVITIES

Positive: Future developments that may potentially lead to a
resolution of the RWN and affirmation of the ratings include:

-- An affirmation of Enel's IDR.

Negative: Future developments that may potentially lead to a
downgrade of the ratings include:

-- A downgrade of Enel's IDR.

Energias de Portugal (EDP), S.A.
Long-term IDR of 'BBB-' placed on RWN
Short-term IDR of 'F3' placed on RWN
Senior unsecured rating 'BBB-' placed on RWN

EDP Finance BV
Long-term IDR of 'BBB-' placed on RWN
Short-term IDR of 'F3' placed on RWN
Senior unsecured rating 'BBB-' placed on RWN

Hidroelectrica del Cantabrico, S.A. (Hidrocantabrico)
Long-term IDR of 'BBB-' placed on RWN
Short-term IDR of 'F3' placed on RWN

Hidrocantabrico's ratings are equalised with the ratings of its
Portuguese parent EDP.

RATING SENSITIVITIES

Positive: Future developments that may potentially lead to a
resolution of the RWN and affirmation of the ratings include:

- Limited impact of the approved measures with FFO adjusted net
   leverage substantially below 5.0x and FFO interest coverage
   above 4.5x on a sustained basis.

Negative: Future developments that may potentially lead to a
downgrade of the ratings include:

- An increase of FFO adjusted net leverage above 5.0x and FFO
   interest coverage below 4.5x on a sustained basis as a result
   of the approved measures.

- Deterioration of the operating environment or further
   government measures substantially reducing cash flows.

Red Electrica Corporacion S.A. (REE)
Long-term IDR affirmed at 'A-', Outlook Negative
Short-term IDR affirmed at 'F2'
Senior unsecured rating affirmed at 'A-'/'F2'

REE's ratings remain constrained by the Spanish sovereign
(BBB/Negative), therefore, although the credit metrics of this
Spanish transmission system operator will be affected by the
proposed measures, we do not think this will result in a
downgrade.

RATING SENSITIVITIES

Positive: The current Outlook is Negative. As a result, Fitch's
sensitivities do not currently anticipate developments with a
material likelihood, individually or collectively, of leading to
a rating upgrade. Future developments that may nonetheless
potentially lead to a positive rating action include:

-- A positive rating action on Spain would lead to a positive
   rating action on REE, assuming its current unconstrained
   profile remains unchanged.

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

-- A negative rating action on the sovereign would likely be
   replicated for the ratings of REE given its limited
   geographical diversification.

-- Should the sovereign remain unchanged, an increase in FFO-
   adjusted net leverage to around 5.5x or above and/or FFO
   interest coverage around 3.5x or below both on a sustained
   basis would lead to a downgrade of the ratings.



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


PRIVATBANK: Fitch Affirms 'B' Long-Term Issuer Default Rating
-------------------------------------------------------------
Fitch Ratings has affirmed Ukraine-based PJSC CB PrivatBank's
Long-term foreign currency Issuer Default Rating (IDR) at 'B' and
revised the Outlook to Negative from Stable.

Key Rating Drivers

The rating actions follow the agency's revision of the Outlooks
on Ukraine's Long-term foreign and local currency IDRs to
Negative from Stable.

The revision of the Outlook on Privat's Long-term IDR reflects
the increased likelihood of a downgrade of Ukraine's Country
Ceiling ('B'), capturing higher transfer and convertibility
risks, as well as the potential for further deterioration in the
sovereign's financial position with negative implications for the
country's banking sector, in particular a further reduction in
economic activity and/or a weakening of the UAH. In Fitch's view,
Privat's current 'b' Viability Rating will come under downward
pressure due to risks stemming from the weaker operating
environment. In particular, a weaker environment would increase
the potential for further increases in loan impairment to put
pressure on capital and/or increasing volatility in client
funding to constrain the bank's liquidity position.

In addition to weaknesses in the operating environment, the
bank's ratings also reflect risks arising from recent rapid loan
growth, high borrower and industry concentrations, and
potentially large related-party business. The ratings also take
into account the bank's broad domestic franchise, material loss-
absorption capacity and moderate refinancing risks.

Privat's pace of credit expansion remains above the sector
average -- the portfolio grew by 13% in 2012 and 7% in 5M13
compared with 2% and 1% for the sector, respectively. This was
driven by exposures to the oil trading and metallurgy sectors,
where the bank's owners have business interests. Reported
related-party lending was 66% of Fitch core capital at end-Q113,
but could be significantly higher, in Fitch's view. At end-Q113,
reported exposure to the top 25 borrowers accounted for 19% of
loans or 126% of equity, although Fitch believes concentrations
could be higher in light of possible links between the bank's
borrowers.

Lending to the oil trading sector remains particularly high (27%
of loans at end-Q113, down from 32% at end-2011), having grown 4x
in absolute value from end-2008. In Fitch's view, only part of
the financing received by the borrowers from the oil trading
segment is used for working capital requirements, while the
portion used for other purposes, including capital expenditures,
could be higher than reported. While oil trading exposures were
reportedly performing, Fitch still has concerns about the amount
of financing received by these borrowers relative to their
reported business volumes, and the sources of loan repayments.
Most of these borrowers' reported financial standing is weak,
although this is quite common in Ukraine

Non-performing loans (NPLs, loans overdue for more than 90 days)
were a moderate 5.5% of loans at end-Q113, after write-offs of
0.7% (non-annualized) of average loans in Q113 and 1.8% in 2012.
NPLs are fully covered by reserves, but reserve coverage of
individually impaired loans (24% of gross loans) was moderate, at
below 40%, although these were reportedly performing. Recent loan
growth could result in further provisioning requirements keeping
pressure on profitability.

Fitch calculates that Privat could create reserves equal to about
20% of the loan book before the Basel total capital ratio (15.3%
at end-Q113) would fall to 10%. In addition, pre-impairment
profit equal to 5% (annualized) of loans in Q113 creates material
loss-absorption capacity. Internal capital generation is the only
planned source of capital, but capital trends in the short term
will mainly be determined by growth ambitions and asset-quality
recognition.

Deposit inflows, mainly from retail clients, continued to end-
Q113, reflecting the sector trend. Privat's liquidity cushion is
reasonable, but not overly large, covering nearly 18% of client
accounts at end-Q113. Short-term refinancing requirements appear
small, with the next large debt repayments, including a US$200
million Eurobond (1% of end-Q113 liabilities), falling due in
2015.

Fitch has also affirmed Privat's senior unsecured debt's Long-
term rating at 'B' and the Recovery Rating at 'RR4'. At the same
time, Fitch notes that, at end-Q113, retail deposits, which rank
senior to other creditors under Ukrainian law, accounted for a
high 68% of Privat's non-equity funding. This represents
significant subordination for other senior creditors, including
bondholders, which could limit recoveries for those creditors in
a default scenario.

However, in case of default, Privat would be unlikely to be
forced into bankruptcy procedures and a fire sale of assets, in
Fitch's view, due to its sizable market shares and systemic
importance, which somewhat reduces downside recovery risks for
bondholders.

Rating Sensitivities

Stabilization of the sovereign's credit profile and the country's
economic prospects, combined with reduced borrower and sector
concentrations, would reduce downward pressure on the ratings. A
downgrade of Privat's ratings may be triggered by a sovereign
downgrade, or if the bank suffers large losses as a result of
deterioration in loan quality without this being offset by proper
equity injections. A marked tightening of the bank's capital
position, a liquidity shortfall or rising concerns about the
level and quality of related-party exposures could also result in
a downgrade.

Any further marked increase in bondholder subordination could
result in a downgrade of the Recovery Rating, and hence also the
Long-term rating of Privat's debt.

The rating actions are:

  Long-term IDR: affirmed at 'B'; Outlook revised to Negative
   from Stable

  Senior unsecured debt: affirmed at 'B', Recovery Rating 'RR4'

  Short-term IDR: affirmed at 'B'

  Viability Rating: affirmed at 'b'

  Support Rating: affirmed at '5'

  Support Rating Floor: affirmed at 'No Floor'



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


BOTANIC INNS: Owes More Than GBP14 Million to Creditors
-------------------------------------------------------
According to Belfast Telegraph's Margaret Canning,
administrators' reports have revealed Botanic Inns Ltd. collapsed
owing over GBP14 million to Ulster Bank, drinks company Diageo
and hundreds of other creditors.

Ulster Bank appointed KPMG to Botanic Inns and its parent,
Kurkova Ltd. -- both ran 14 pubs and hotels -- on May 7, Belfast
Telegraph relates.

The group was facing high rents, plummeting asset values and
falling sales, Belfast Telegraph discloses.  But it's believed to
have been on the verge of agreeing new terms with the bank, as
well as Diageo and the Republic's bad bank National Asset
Management Agency, which controlled the freehold of the six
Botanic Inns pubs, Belfast Telegraph relates.

But the bank's appointment of administrators meant that agreement
had to be torn up and KPMG took control of landmark pubs like The
King's Head and The Botanic Inn, both in south Belfast, Belfast
Telegraph notes.

The reports filed last week reveal the indebtedness of the two
companies -- Ulster Bank is owed GBP7.2 million while Diageo,
which also lent funds, is out GBP1.9 million, Belfast Telegraph
recounts.

A further GBP5.5 million is owed to more than 200 creditors,
Belfast Telegraph says.

Just one week into the administration process a deal with new
leases was reached with NAMA and two new firms, Horatio Taverns
and The Fly, led by Botanic Inns group MD Stephen Magorrian, took
over the pubs and remain in charge though the Elms is up for
sale, Belfast Telegraph discloses.  According to Belfast
Telegraph, on that sale, the administrators report said: "It is
considered by the joint administrators that asset values were
maximized and a significant number of jobs were saved as a result
of the strategy."

Botanic Inns Ltd. is one of Belfast's best known pubs.


BROADGATE FINANCING: Fitch Lifts Rating on Cl. D Notes to BB+
-------------------------------------------------------------
Fitch Ratings has upgraded Broadgate Financing PLC's class D
notes and affirmed the others, as follows:

GBP225.0m class A1 due January 2032 (XS0213092066) affirmed at
'AAAsf'; Outlook Stable

GBP250.4m class A2 due April 2031 (XS0211897664) affirmed at
'AAAsf'; Outlook Stable

GBP175.0m class A3 due April 2033 (XS0211897821) affirmed at
'AAAsf'; Outlook Stable

GBP400.0m class A4 due July 2036 (XS0213092652) affirmed at
'AAAsf'; Outlook Stable

GBP365.0m class B due October 2033 (XS0211898043) affirmed at
'AAsf'; Outlook Stable

GBP127.3m class C1 due January 2022 (XS0213093031) affirmed at
'BBB-sf'; Outlook Stable

GBP215.0m class C2 due April 2035 (XS0211898126) affirmed at
'BBB-sf'; Outlook Stable

GBP30.8m class D due October 2025 (XS0213093627) upgraded to
'BB+sf' from 'BBsf'; Outlook Stable

Key Rating Drivers

The affirmation of the class A1 to C2 notes reflects the stable
performance of the underlying loan, which is secured by 16 office
buildings benefiting from a number of long leases to strong
institutions, either in the financial or professional services
sector. The upgrade of the class D notes reflects the recent
successful letting activity and lease re-structuring that in
scenarios closer to Fitch's base case, mitigate lease roll-off
risk in 2016-17, when UBS tenancies expire. Despite the exposure
to largely a single sector and the uncertainty related to the on-
going redevelopment of the Broadgate estate, Fitch believes the
collateral remains prime in quality, as also evidenced by
continued occupational demand.

The 16 assets securing the transaction were revalued at GBP2,716
million in March 2013, up from GBP2,666 million in March 2012.
The new valuation results in a loan-to-value ratio (LTV) of
66.3%, down from 69.3% at the last rating action in July 2012.
The debt service coverage ratio (DSCR) remains relatively stable
at 1.13x, as at the April 2013 IPD and reported occupancy is
95.4%. The improvement of the transaction's metrics are
principally driven by new lease signings of approximately GBP3.5
million in the last 12 months and expiry of rent-free periods
granted to the tenants in Broadgate Tower and 201 Bishopsgate. In
addition, the sponsor has managed to re-gear a number of
important existing leases; Herbert Smith, F&C, ICAP and Tullet
Prebon have all agreed lease extensions (subject to certain
incentives) increasing income certainty in the short to medium
term.

Fitch views the on-going development of the estate -- in
particular the works on 5 Broadgate (not within the
securitization), the future plans for the redevelopment of
Broadgate Circle and the now completed refurbishment of 199
Bishopsgate -- as credit positive for the transaction, preserving
the estate's prime nature. Further to the sponsor's development
plans, the completion of the Crossrail station, scheduled for
2018, is likely to further enhance demand from occupiers. All
developments are fully funded through equity injections from the
sponsor and do not affect the transaction's cash-flows.

Rating Sensitivities

A resumption of the financial crisis would likely have a harmful
effect on the significant number of the tenants on the estate,
whose credit strength is instrumental to the continued
deleveraging of the transaction. This scenario would have a
particularly deleterious effect on the desirability of the space
vacated by UBS (20% of the portfolio by rent), after its move to
5 Broadgate. Downward revisions of the main tenants' ratings
could therefore prompt negative rating action on the notes.


EQUINOX ECLIPSE: Fitch Cuts Rating on Class A Notes to 'CC'
-----------------------------------------------------------
Fitch Ratings has downgraded Equinox (Eclipse 2006-1) plc's class
A notes, as follows:

GBP135.7m class A (XS0259279585) downgraded to 'CCsf' from 'Bsf;
Recovery Estimate (RE) 75%

GBP17.2m class B (XS0259280088) affirmed at 'CCsf'; Recovery
Estimate (RE) 0%

GBP18.1m class C (XS0259280161 affirmed at 'Csf'; RE0%

GBP20.9m class D (XS0259280591) affirmed at 'Csf'; RE0%

GBP7.7m class E (XS0259280674) affirmed at 'Dsf'; RE0%

Key Rating Drivers

The downgrade reflects the deteriorating value of the assets
securing the two largest loans in the pool, the GBP72.6 million
Ashbourne Portfolio Priority A loan (36% of the outstanding
balance), and the GBP70.1 million Royal Mint Court loan (35%).
Given a downwards revision in Fitch's estimate of recoveries for
the two loans, both of which are victim to adverse idiosyncratic
factors, Fitch now anticipates losses to be incurred by the class
A notes. Losses from the recently resolved Macallan loan (which
Fitch estimates to be in the region of GBP16 million) are yet to
be allocated. Fitch expects only small losses, if at all, for the
remaining loans in the portfolio.

The Ashbourne Portfolio Priority A loan is the senior-most
tranche of a complex package of debt amounting to GBP328 million
and secured by a portfolio of nursing homes. Following Southern
Cross's bankruptcy in 2011, two new operators have been installed
to run the portfolio under a management agreement. After a period
in which liquidity had to be drawn to service note interest, at
the most recent (April) interest payment date, EBTIDA was
sufficient to pay interest on the securitized portion of the debt
facility. While this is a positive development, Fitch is
concerned about the level of recoveries. The (yet-to-be-
distributed) proceeds from two recently sold homes are well below
the latest valuation (in 2011). Fitch notes that swap breakage
costs will likely act as a drag until 2015.

Restructuring talks involving the various vertical and horizontal
classes of creditor (or representative e.g. the special servicer)
have already been going on for more than a year. Given the
significant capital expenditure requirements across the
portfolio, and in light of the likely depressive effect of on-
going government austerity measures on occupancy levels, further
delays would likely have a negative effect on values. According
to the reported portfolio value, the loan-to-value ratio is about
100%, which Fitch considers an underestimate of risk.

Collateral for the Royal Mint Court loan comprises a long
leasehold interest in an aging office property in a secondary
location near the Tower of London. The freeholder is entitled to
50% of the property's net operating income (NOI), which appears
to be a major obstacle in the way of the (current or future)
leaseholder spending much-needed capex funds. The occupational
lease profile now only offers a weighted average lease term to
break of just under a year, and worryingly, the head lease
appears to permit the freeholder to veto certain provisions that
could benefit the portfolio over the longer term.

The loan has been in default since a 2012 revaluation reported
property value of GBP32.5 million, some 70% down from closing.
This sharp decline reflects not only the imminent expiry of over-
rented income and the effects of depreciation, but also the
serious conflict of interests embedded in the head lease. Fitch
does not believe that the motive to obstruct improvements to the
building is automatically held in check by the freeholder's and
leaseholder's mutual interest in cultivating NOI. There is
concern that the freeholder could apply financial pressure on the
leaseholder in order to acquire the leasehold at a significant
discount, which could be to the significant detriment of
noteholders. It is difficult to expect much by way of debt
recovery from this loan.

Rating Sensitivities

Should the conflict of interest between freeholder and
leaseholder in the Royal Mint Court loan be set aside so as to
grant the leaseholder greater control over the asset, its value
could increase, opening up scope for an upgrade of the senior
bond.


HERCULES ECLIPSE 2006-4: Fitch Affirms CC Rating on Cl. E Notes
---------------------------------------------------------------
Fitch Ratings has affirmed Hercules (Eclipse 2006-4) plc's CMBS
notes due October 2018 as follows:

GBP630.5m class A (XS0276410080) affirmed at 'BBBsf'; Outlook
Negative
GBP43.9m class B (XS0276410833) affirmed at 'BBsf'; Outlook
Negative

GBP25.0m class C (XS0276412375) affirmed at 'Bsf'; Outlook
Negative

GBP50.9m class D (XS0276413183) affirmed at 'CCCsf'; Recovery
Estimate (RE) 'RE70%'

GBP29.0m class E (XS0276413340) affirmed at 'CCsf'; 'RE0%'

Key Rating Drivers

The affirmation is driven by the steady performance of the bulk
of the loans in the pool since Fitch's last rating action in July
2012. The Negative Outlooks on the class A to C notes continue to
reflect the uncertainty surrounding the GBP72.5 million Ashbourne
Portfolio Priority A (APPA) loan.

APPA is the senior-most tranche of a complex package of debt
amounting to GBP328 million and secured by a portfolio of nursing
homes. Following Southern Cross's bankruptcy in 2011, two new
operators have been installed to run the portfolio under a
management agreement. After a period in which liquidity had to be
drawn to service note interest, at the most recent (April)
interest payment date, EBITDA was sufficient to pay interest on
the securitized portion of the debt facility. While this is a
positive development, Fitch is concerned about the level of
recoveries: the (yet-to-be-distributed) proceeds from two
recently sold homes are well below the latest valuation (in
2011). Fitch notes that swap breakage costs will likely act as a
drag until 2015.

Restructuring talks involving the various vertical and horizontal
classes of creditor (or representative e.g. the special servicer)
have already been going on for more than a year. Given the
significant capital expenditure requirements across the
portfolio, and in light of the likely depressive effect of on-
going government austerity measures on occupancy levels, further
delays would likely have a negative effect on values. According
to the reported portfolio value, the loan-to-value ratio is about
100%, which Fitch considers an under-estimate of risk.

The three largest loans in the pool -- the River Court A-note
(26%), the Chapelfield loan (26%) and the Cannonbridge A-note
(20%) -- anchor the ratings of the senior notes. Both River Court
and Chapelfield are strong loans capable of repaying in full.
Cannonbridge has suffered several years of underperformance, but
is now riding a wider recovery in central London rents. With loan
maturity in 2015 and a fully income-producing rent roll
(including some index-linkage), there is hope that the
Cannonbridge A-note will avoid a loss. However, because the
Cannonbridge B-note is capitalizing unpaid interest, Fitch
expects the whole loan to default at maturity in January 2015,
which should switch note principal payment to a fully sequential
basis in time for repayment of the other loans.

The three remaining loans (Booker, Endeavour and Welbeck) have
shown no material change in performance since Fitch's last rating
action.

Rating Sensitivities

Should they prepay before the sequential pay trigger is switched
(unlikely to be before January 2015), four loans would return
principal to junior bondholders (Booker, 100% pro rata; River
Court, Chapelfield and Welbeck 50% pro rata/50% sequentially). As
this outcome would lead to reduced proceeds from some of the
better loans in the pool for senior notes, they could be
downgraded as a result. Moreover, deterioration in APPA would
apply downwards pressure on the ratings.


MARLIN FINANCIAL: S&P Assigns 'B' LT Counterparty Credit Rating
---------------------------------------------------------------
Standard & Poor's Ratings Services said that it assigned its 'B'
long-term counterparty credit rating to U.K.-based finance
company Marlin Financial Intermediate II Ltd.  S&P also assigned
a 'B' issue rating and '3' recovery rating to the proposed
GBP150 million senior secured term notes issued by the group's
wholly owned subsidiary Marlin Intermediate Holdings PLC.  The
outlook on Marlin is stable.

"Our ratings on Marlin reflect the group credit profile (GCP) of
the restricted group, which on completion of the refinancing will
comprise all of Marlin's existing subsidiaries (as set out in the
offering memorandum of the senior secured notes).  Marlin is the
nonoperating holding company that consolidates the activities of
the group of companies that it heads.  The ratings also reflect
our view that there appear to be no material barriers to cash
flows to the holding company from the subsidiaries in the
restricted group," S&P said.

"Our assessment of the GCP takes into account Marlin's focus on
the U.K. distressed consumer debt-purchase market.  In our
opinion, this market is subject to material reputational,
regulatory, and operational risks.  We also consider the material
leverage that will result from the proposed new financing
structure.  We expect the EBITDA coverage of interest expense to
improve over the next two years while remaining somewhat weaker
than the average for rated U.K. peers Lowell Group Ltd., Cabot
Financial Ltd., and Arrow Global Guernsey Holdings.  Our
assessment also reflects the group's financial track record,
which we consider to be relatively short.  In addition, the
current build-up of the group's receivables portfolio will
continue in our view to constrain net cash flow generation (after
acquisition spending) for at least the next two years," S&P
added.

The ratings are supported by the group's sound growth prospects
and differentiated position in a still-fragmented market.  In
S&P's view, Marlin's continued investments in data analysis and
information technology (IT) capabilities should help it maintain
a competitive advantage in its chosen segment of the debt-
purchase market.  In particular, Marlin's experience in
litigation-enhanced collections currently differentiates it from
other players in the market.  Furthermore, Marlin collections
have shown good predictability to date, with a material share of
collections secured by charging orders on clients' properties.

Marlin is a specialist in litigation-enhanced collections on
high-balance, nonpaying accounts, mainly acquired from financial
institutions.  It had total portfolio assets of about
GBP109 million (reported at cost) as of the end of March 2013 and
about 265,000 customer accounts.  The company is entirely U.K.-
focused.  Like two of its three U.K. peers, Marlin pursues a
mainly in-house collections strategy, though it does work with a
panel of debt collection agencies for a portion of collections.
Marlin passes many of the accounts selected for litigation-based
collections to one of its small panel of partner law firms to
carry out the legal process.

In common with its U.K. peers, Marlin is exposed to material
credit risk because it holds distressed receivables.  Mispricing
of portfolios at the time of purchase is the key risk because
actual cash collections may fall short of original expectations.
S&P believes that the company's sound performance to date
demonstrates its pricing capabilities, and its differentiated
approach affords it a degree of competitive advantage.  However,
competition in the market can occasionally lead to uneconomical
pricing, which has led to volatile profitability for a number of
market peers in recent years.  The current relative ease of
funding availability for speculative-grade issuers (despite some
recent volatility) is positive for Marlin and similar peers, but
could accentuate competitive pressure on the pricing of certain
distressed debt portfolios.  In addition, sudden changes in the
economic backdrop could also impede collections, in S&P's view.

"In our view, the group is exposed to material regulatory and
operational risks.  We base this view on the regulatory framework
in which it operates, the importance that vendors attach to the
reputation of the potential debt purchasers and collectors, the
litigation-enhanced approach the company follows for part of its
collections, and the reliance on IT and data analysis as a
central part of the company's processes.  We consider that the
group has an adequate control framework in place to manage these
risks, a view supported by the company's very small number of
complaints," S&P said.

S&P expects to see a sustained increase in Marlin's cash
collections over the next two to three years, though from a
smaller base than those of its rated U.K. peers.  S&P considers
that the company's financial track record only started to be
meaningful after its acquisition by private equity firm Duke
Street in 2010, when the company began to make more material
portfolio acquisitions.

Under the new financing structure, third-party, interest-paying
debt will fund the vast majority of Marlin's balance sheet.
Excluding shareholder funding, S&P estimates that the net
tangible equity of the company will remain small for the
foreseeable future.  This is to some extent exacerbated by the
accounting standards used by the company, which reports its
portfolio at cost and not fair value, unlike some of its peers.
The high balance sheet leverage is reflected also in cash-flow
leverage metrics that are somewhat weaker than the peer average.
As a result of the refinancing, S&P expects debt to EBITDA
(adjusted for portfolio amortization) to increase to over 3.5x in
2013, but to reduce consistently from this level as a result of
continued growth in collections.

The stable outlook on Marlin is based on S&P's expectation that
the company will maintain a sound compliance track record and
steady growth in collections that will help to improve its cash
flow coverage and leverage metrics.

S&P could lower the ratings on Marlin if leverage does not
improve as it expects in the next two years--for example, if cash
flow coverage of cash interest expense fails to exceed 3x and
debt to adjusted EBITDA remains above 3.5x.  S&P could also lower
the ratings if it sees evidence of a failure in Marlin's control
framework or adverse changes in the regulatory environment.

S&P could raise the ratings if the group raises and then
maintains cash flow coverage of cash interest expenses greater
than 4x, supported by a lengthening financial track record.  A
positive rating action would also require relatively favorable
market conditions and Marlin's sound compliance track record to
continue.


MG ROVER: July 29 Hearing Set for AADB's Suit v. Deloitte
---------------------------------------------------------
Vanessa Kortekaas at The Financial Times reports that the UK arm
of Deloitte will face another hearing this month about its work
in the lead-up to the controversial collapse of carmaker MG
Rover.

The Accountancy and Actuarial Discipline Board launched a formal
complaint against Deloitte and Maghsoud Einollahi, one of its
retired corporate financiers, last year, the FT recounts.

They were accused of falling short of the expected professional
standards of objectivity and due care, in relation to their work
for companies involved with MG Rover and a group of businessmen,
known as the Phoenix Four -- who bought the carmaker from BMW in
2000, the FT discloses.

The Phoenix Four extracted more than GBP40 million from MG Rover,
before the carmaker collapsed in 2005 with debts of about GBP1.3
billion -- causing 6,000 workers to lose their jobs, the FT
relates.  John Towers, John Edwards, Nick Stephenson and Peter
Beale were disqualified in 2011 as company directors for up to
six years, the FT discloses.

The accountancy watchdog, the Financial Reporting Council, said
on Monday that a hearing regarding Deloitte had been scheduled
for July 29, the FT relates.  An independent tribunal began
hearing the case in March, and it could announce a verdict at the
hearing this month, the FT says.

The AADB's accusations against Deloitte center upon the corporate
finance advice it gave to the Phoenix Four and MG Rover before
the carmaker's collapse, the FT states.  Deloitte was also MG
Rover's auditor, the FT notes.

MG Rover collapsed on April 8, 2005, after a tie-up with China's
largest carmaker, Shanghai Automotive Industry Corp., failed to
materialize.  Ian Powell, Tony Lomas and Rob Hunt, partners in
PricewaterhouseCoopers, were appointed as joint administrators.
The crisis left 6,000 people jobless, and caused a domino effect
on related businesses, particularly in the West Midlands.  Days
later, eight European subsidiaries -- MG Rover Deutschland GmbH;
MG Rover Nederland B.V.; MG. Rover Belux S.A./N.V.; MG Rover
Espana S.A.; MG Rover Italia S.p.A.; MG Rover Portugal-
Veiculos e Pecas LDA; Rover France S.A.S., and Rover Ireland
Limited -- were placed into administration.


WILLIAM HILL: Moody's Assigns Ba1 Rating to GBP375MM Notes Issue
----------------------------------------------------------------
Moody's Investors Service has assigned a definitive Ba1 rating to
William Hill plc.'s GBP375 million 4.25% senior unsecured notes
due 2020 with a loss given default assessment of LGD4(50%). The
notes are guaranteed by William Hill plc.'s wholly owned
subsidiary William Hill Organization Limited. The definitive
rating is in line with the provisional rating assigned on June 3,
2013. All other ratings and the stable outlook on the ratings
remain unchanged.

Ratings Rationale:

The definitive Ba1 rating assigned to the GBP375 million 2020
notes issuance is at the same level as William Hill's CFR,
reflecting their senior unsecured status. The new bonds rank pari
passu with the company's other senior unsecured debt.

The Ba1 CFR primarily reflects the mature nature of William
Hill's premises-based retail business and that the company's
growth in online and mobile betting services will continue to
rely heavily on marketing and technological spend. However, more
positively, the rating also reflects the company's leadership
position in the UK retail betting industry, with the company
reporting a market share of around 26%, as measured by number of
licensed betting offices and its well-established and growing
presence in the online betting and gaming market. The company
also benefits from a strong brand name, high barriers to entry in
the retail segment and an established regulatory regime in its
core UK market. William Hill has started to diversify
internationally, with a presence in the U.S., Australia and
various European countries.

The ratings are further supported by William Hill's good level of
profitability and its strong financial metrics, with adjusted
debt/EBITDA of 2.1x as at financial year ended (FYE) January 1,
2013 (2.5x at FYE 2011) and adjusted retained cash flow (RCF)/net
debt of 28.1% as at the same period (22.4% at FYE 2011). The
improvement was on the back of strong earnings growth in the home
market (reported net profit after tax and minority interests up
21%), and in particular in the online segment (reported operating
profit up 36%). Although William Hill's credit metrics currently
meet Moody's guidance for what could exert upward pressure on the
rating, the rating agency has maintained a stable outlook because
of the possibility that the company may make use of its financial
flexibility and increase its leverage in the near term. In
particular, the company made two investments in March and April
2013, namely the acquisition of Sportingbet Plc's Australian
business and the exercise of its option to buy out Playtech's 29%
holding in its William Hill Online joint venture, which were
partly debt-funded (GBP510 million) and partly equity-funded with
proceeds from a rights issue (GBP373 million) launched in March
2013. Given that William Hill has been well positioned within its
current rating category, with metrics strengthening in recent
years, these acquisitions do not exert downward pressure on the
rating, although Moody's expects some weakening in credit metrics
in the current financial year.

William Hill has a good liquidity profile. The company has
generated positive free cash flow in each of the past five years,
thereby covering dividends and capital expenditure, which Moody's
sees as an essential part of its strategy to keep growing online
and mobile activity. As at January 1, 2013, the company held
around GBP73 million of unrestricted cash and had GBP440 million
available under its long-dated GBP550 million revolving credit
facility (RCF) that expires in November 2015. The RCF was used to
part-finance the two recent investments in addition to a GBP275
million bridge loan that was raised for this purpose and expires
in June 2014. The GBP375 million long-term notes issuance
refinanced the bridge loan and part of the drawings under the
RCF, such that the majority of the RCF will be undrawn. In
addition, at January 1, 2013, the company reported ample headroom
under its financial covenants, which are tested semi-annually.

Outlook

Despite subdued consumer confidence and a sluggish economy in the
UK, the stable outlook reflects Moody's expectation that William
Hill's financial metrics will remain in line with the current
rating level, i.e., the company's ratio of RCF/net debt will
remain at least in the high teens in percentage terms and its
debt/EBITDA comfortably below 3.5x on a sustainable basis (both
ratios as adjusted by Moody's). The stable outlook is further
premised on William Hill maintaining an adequate liquidity
profile by (1) retaining its ample covenant headroom and
availability under its facilities; and (2) proactively
refinancing upcoming maturities well in advance.

What Could Change The Rating Up/Down

Upward pressure could be exerted on the rating if William Hill's
adjusted debt/EBITDA decreases below 3.0x and its RCF/net debt
increases above 20%, both on a sustainable basis.

Conversely, negative pressure could be exerted on the rating if
credit metrics become weaker than the targets set for the rating
category, with the ratio of adjusted debt/EBITDA increasing
towards 4.0x. Challenges to the company's liquidity risk profile
could also have negative rating implications.

The principal methodology used in this rating was the Global
Gaming published in December 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.

William Hill plc. is a leading sports betting and gaming company
that operates predominantly in the UK via 2,392 licensed betting
shops, and via mobile and internet connections through William
Hill Online. William Hill reported consolidated net revenues of
GBP1.28 billion for the financial year ending January 1, 2013.


* Fitch: UK Guarantee Scheme for Infrastructure Projects Strong
---------------------------------------------------------------
The UK government's guarantee scheme for infrastructure projects
is strong enough to expect the ratings of guaranteed debt to
match that of the UK sovereign, Fitch Ratings says. However,
while the guarantee is intended to transfer all project risk to
the Treasury, there could be situations where its benefits are
limited or where it only applies to part of the issued debt.

In rating debt supported by the guarantee we would need to check
for consistency between the terms of the guarantee and those of
the debt instrument. This is necessary to confirm the guarantee
will be available to avoid any type of payment default as defined
in the transaction's contractual documentation. If any portion of
the debt were not covered by the guarantee then our current
sector criteria would apply to this portion.

Similarly, the transaction documentation and guarantee will need
to be in clear agreement over the timing of payments. It is
essential, from a rating perspective, that payments are made when
due, rather than after an actual payment default. The scheme
includes some provisions to ensure timely execution by allowing
the guarantee to be tapped ahead of a payment date, as long as
there is evidence that the issuer cannot make the payment from
its own funds.

"We expect the GBP40bn of available guarantees will be dedicated
to projects of national significance that would otherwise not be
financeable in the bank or bond market, rather than to lower the
cost of funding for projects that would otherwise be financeable
without such support. This will allow for fulfilling the
infrastructure development objective without impairing the
establishment of a fully functioning infrastructure financing
market in which lenders take and manage project credit risk,"
Fitch says.

A special report, "UK Guarantee Scheme for Infrastructure
Projects" has been published on www.fitchratings.com.



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


* EUROPE: EU Requires Restructuring Plan for Bank State Bailout
---------------------------------------------------------------
Dominic Jeff at The Scotsman reports that European banks that get
into trouble will have to provide a detailed restructuring plan
before they can get a state bailout under rules agreed on
July 10.

According to the Scotsman, in a major policy shift, the European
Union will change rules on state aid on August 1 in order to
create a level playing field among countries and ensure
shareholders and junior bondholders contribute to a rescue.

Currently, a troubled bank in one nation might receive support
that protects investors and creditors, while one in a different
country gets only marginal assistance, the Scotsman notes.

European commissioner Joaquin Almunia, as cited by the Scotsman,
said: "Bank owners and junior creditors will need to contribute
before any more taxpayers' money is spent on bank bailouts."


* Moody's Sees Increase in Refinancing Needs in EMEA Sectors
------------------------------------------------------------
Fallen angels and first-time bond issuers have pushed up the
refinancing needs of EMEA speculative-grade (spec-grade)
companies to a record $101 billion next year, despite substantial
bond issuance in the last 12 months, says Moody's Investors
Service in its latest EMEA spec-grade refinancing study entitled
"Refunding Risk and Needs: European Non-Financial Speculative-
Grade Corporates: Substantial Bond Issuance Still Leaves Record
Refinancing Needs to be Addressed Next Year" -- analyzed the
refinancing needs of 327 EMEA spec-grade companies across Europe,
Middle East and Africa (EMEA).

"Although we have seen significant EMEA spec-grade bond issuance,
around US$97 billion, over the last 12 months, spec-grade
companies still have US$101 billion refinancing needs in 2014,
reflecting the higher number of fallen angels and first-time
issuers," says Douglas Crawford, a Moody's Vice President -
Senior Analyst and author of the study.

In the US, however, where spec-grade debt maturing in 2014 fell
to US$79 billion from US$168 billion, spec-grade issuance is
likely to significantly cover next year's debt maturities.

Total debt outstanding of the 327 companies has increased by 19%
in the past year, to US$787 billion of bank and bond debt
maturing from 2014 onwards. Approximately 57% of this debt
matures through 2017, compared with 55% through 2016 in Moody's
previous study.

Fallen angels have the greatest near-term refinancing needs. The
nine additions to Moody's universe include formerly investment-
grade rated companies from the metals & mining,
telecommunications and utilities industries. ArcelorMittal (Ba1
negative) alone accounts for around half of the US$12 billion in
debt maturing from new fallen angels in the next two years.

Rated leveraged buyouts (LBOs) have continued to reduce their
near-term maturities, although refinancing needs for the lowest
rated companies have doubled. LBOs rated in the Caa category now
have US$4.4 billion in near-term maturities compared with US$2.6
billion in last year's study.

Within the euro area periphery, 61% of debt now matures in the
next four years, compared with 54% in last year's study, and
Portuguese companies have the greatest near-term refinancing
needs, at US$18 billion over the next two years.


* Moody's Notes Stronger European Covered Bonds
-----------------------------------------------
Since the beginning of the financial crisis, the credit strength
of covered bonds in jurisdictions characterized by sovereigns
with strong creditworthiness has become less dependent on the
credit strength of the bank supporting the covered bonds, says
Moody's Investors Service in a new Special Comment entitled
"European Covered Bonds: Timely Payment Indicators Improved Over
the Crisis in Stronger Sovereigns, Even as Banking Sector
Weakened.

Covered bond ratings in jurisdictions whose sovereign is rated Aa
and above have thus increased their average uplift over the
supporting banks' ratings.

This credit development is captured by Moody's Timely Payment
Indicators (TPIs), which consider the likelihood of the issuer
continuing timely payments on the covered bonds after the
supporting bank defaults.

"Over the crisis, TPIs have increased in stronger sovereigns, but
in weaker sovereigns, those rated Baa or below, TPIs have fallen
markedly over the same period," says Julie Ng, a Moody's Analyst
and author of the report. The more pronounced fall of TPIs in
weaker sovereigns reflects increased linkage between the credit
strength of the covered bonds and the supporting bank, and the
lowering of the maximum rating uplift.

"Over the course of the crisis the improvement in TPIs in
stronger sovereigns has had a countercyclical effect, as it has
moderated the negative impact on covered bonds of the
deteriorating credit quality of the supporting banks. Conversely,
for sovereigns with weaker creditworthiness, the falling TPIs
have exacerbated the effects of supporting banks' deteriorating
credit quality," explains Ms. Ng.


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

July 18-21, 2013
   AMERICAN BANKRUPTCY INSTITUTE
      Southeast Bankruptcy Workshop
         The Ritz-Carlton Amelia Island, Amelia Island, Fla.
            Contact:   1-703-739-0800; http://www.abiworld.org/

Aug. 8-10, 2013
   AMERICAN BANKRUPTCY INSTITUTE
      Mid-Atlantic Bankruptcy Workshop
         Hotel Hershey, Hershey, Pa.
            Contact:   1-703-739-0800; http://www.abiworld.org/

Aug. 22-24, 2013
   AMERICAN BANKRUPTCY INSTITUTE
      Southwest Bankruptcy Conference
         Hyatt Regency Lake Tahoe, Incline Village, Nev.
            Contact:   1-703-739-0800; http://www.abiworld.org/

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

Nov. 1, 2013
   AMERICAN BANKRUPTCY INSTITUTE
      NCBJ/ABI Educational Program
         Atlanta Marriott Marquis, Atlanta, Ga.
            Contact:   1-703-739-0800; http://www.abiworld.org/

Dec. 2, 2013
   BEARD GROUP, INC.
      19th Annual Distressed Investing Conference
          The Helmsley Park Lane Hotel, New York, N.Y.
          Contact:   240-629-3300 or http://bankrupt.com/

Dec. 5-7, 2013
   AMERICAN BANKRUPTCY INSTITUTE
      Winter Leadership Conference
         Terranea Resort, Rancho Palos Verdes, Calif.
            Contact:   1-703-739-0800; http://www.abiworld.org/


                            *********

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

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

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

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


                            *********


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

Troubled Company Reporter-Europe is a daily newsletter co-
published by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., 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 * * *