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

                           E U R O P E

          Friday, September 26, 2014, Vol. 15, No. 191

                            Headlines

B E L G I U M

TELENET NV: Fitch Affirms 'B+' LT IDR; Outlook Stable


G E R M A N Y

QIMONDA AG: Enters Into Partial Settlement with Infineon
TECHEM ENERGY: Moody's Affirms 'B1' Corporate Family Rating
TRIONISTA TOPCO: Moody's Affirms 'B2' Corporate Family Rating


I R E L A N D

AERCAP IRELAND: Moody's Rates US$800MM Sr. Unsecured Notes 'Ba2'
AERCAP IRELAND: S&P Assigns 'BB+' Rating to Sr. Unsecured Notes
EUROCREDIT CDO VI: Moody's Affirms 'Ba1' Rating on Class D Notes
EUROCREDIT CDO VII: Moody's Raises Rating on Class Q Notes to Ba1
HARVEST CLO III: S&P Raises Ratings on 2 Note Classes to 'B+'


I T A L Y

BORMIOLI ROCCO: S&P Revises Outlook to Neg. & Affirms 'B+' CCR
UNIONE DI BANCHE: S&P Raises Rating on EUR300MM Notes From 'BB+'


N E T H E R L A N D S

LEOPARD CLO I: S&P Cuts Ratings on 2 Note Classes to 'CCC (sf)'


R U S S I A

UTAIR: Russian Government Explores Rescue Options


S L O V A K   R E P U B L I C

DOPRASTAV: Faces Financial Woes; Gains Protection From Creditors
VAHOSTAV-SK: Bratislava Court Launches Bankruptcy Proceeding


S L O V E N I A

AHA MURA: Creditors File EUR116.5 Million in Claims


S W E D E N

NATIONAL ELECTRIC: To Cut Up to 200 Jobs at Saab Car Plant


U K R A I N E

KYIV CITY: S&P Lowers Long-Term Issuer Credit Ratings to 'CC'
UKRAINIAN AGRARIAN: S&P Lowers CCR to 'CCC'; Outlook Stable


U N I T E D   K I N G D O M

AUSTIQUE: In Administration, FC Fund Buys Firm
EUROSAIL-UK 2007-2NP: S&P Affirms B- Rating on Class E1c Notes
EUROSAIL-UK 2007-1NC: S&P Affirms 'CCC' Rating on Class FTc Notes
KPM UK: Alan Bradstock Appointed as Administrator
NEWCASTLE BUILDING: Fitch Affirms Long-Term IDR at 'BB+'

PHONES 4U: 15 Jobs Lost in Aberdeen and Elgin Amid Administration


X X X X X X X X

* BOOK REVIEW: Transnational Mergers and Acquisitions in the U.S.


                            *********


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B E L G I U M
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TELENET NV: Fitch Affirms 'B+' LT IDR; Outlook Stable
-----------------------------------------------------
Fitch Ratings has affirmed Belgium-based Telenet NV's Long-term
Issuer Default Rating (IDR) at 'B+' and its Short-term IDR at 'B'.
The agency also affirmed the group's senior secured rating at 'BB'
with a Recovery Rating of 'RR2'.

Although Telenet has a strong operating profile driven by its
market leading position in Flanders, which would allow an
investment-grade status, the ratings are capped by management's
strategy of maintaining leverage at approximately 4.5x net debt to
EBITDA.

Operations are expected to continue to grow over the next three to
five years, but cable unbundling and limited customer growth will
hamper revenue growth from historical levels of 7-8%.  Cash tax is
also expected to rise materially, increasing funds from operations
(FFO)-adjusted net leverage to over 5.0x in the next two years,
from 4.5x currently, and, potentially, reducing free cash flow.

Management's ability to grow and maintain EBITDA to meet cash
generation requirements for interest, capital expenditures, taxes
and dividends will be key to maintaining liquidity and the current
ratings.

KEY RATING DRIVERS

Slowing Growth but Improving Churn

Telenet's TV customer base has remained broadly stable at 2.1
million over the past year, reflecting already high penetration
levels.  The company's ability to drive future revenue and EBITDA
growth will come primarily through cross- and up-selling of higher
value digital packages and additional services such as broadband,
mobile and pay per view content.  Other cable assets such as
Virgin Media and Ziggo, which are also fully or partially owned by
Telenet's parent Liberty Global, have revenue-generating units
(RGUs) or services per subscriber of 2.5 and 2.6 respectively.
This bodes well for Telenet as its RGUs are currently at 2.25,
indicating potential for growth.

Cross-selling has not only driven revenue growth but has also
helped to reduce churn (telephony churn at 6.5% vs. 8% in Q213).
This provides the company with cost savings and greater
flexibility to invest in other growth areas such as mobile while
limiting the impact on margins.

Cable Unbundling

The opening up of the cable network in Belgium due to new
regulation presents a unique threat to Telenet as mobile operators
seek to offer bundled products.  Competitors Mobistar and BASE
have suffered material average revenue per user (ARPU) declines
driven not least by Telenet's aggressive mobile pricing strategy.

So far only Mobistar is planning to launch a product over cable at
end-2014.  This will consist of TV and broadband and is likely to
be priced around EUR50, representing a mid-point between Telenet's
Whoppa offering (EUR61) and BASE's snow product (EUR39).  The
retail minus-based pricing agreement leads Mobistar to pay Telenet
around EUR28 per user for TV and broadband access.  There is
limited visibility over the impact of cable unbundling on
Telenet's revenue and earnings.  However, Mobistar's strength in
the regions of Wallonia and Brussels implies the scope of
Telenet's market share loss in Flanders through up- and cross-
selling is likely to be limited.  Much will depend on how
wholesale pricing develops.

Cash Tax to Reduce Cash Flow

Deferred tax assets had previously shielded Telenet from cash
taxes.  Starting from 2014, Telenet expects to start paying
materially higher cash taxes.  In Fitch's base case, this is
expected to reduce operating free cash flow as taxes reach their
natural run rate of approximately 25%-30% of operating profit.
The greatest impact will be felt from 2016 as the first year of
full cash tax.

Shareholder Friendly Structure

Liberty Global currently owns 56% of Telenet.  This has helped
drive a shareholder-friendly policy of share buy-backs and
dividend distributions, which have been financed partially through
EBITDA growth and increased leverage.  Leverage has traditionally
been managed at 3.5x-4.5x, and Fitch's base case expects a figure
towards the higher-end of the range.  Although high leverage can
easily be absorbed by Telenet's stable operating profile, it caps
its Long-term IDR at 'B+'.  Fitch's base case expects FFO-adjusted
net leverage of 5x-5.5x.

Content's Long-Term Importance

A key element to Telenet's success has been its ability to provide
a high quality and compelling product.  This has helped the
company to maintain a competitive advantage and drive penetration
levels to 72% (Q214).  Similar to Liberty Global, Telenet is also
extending its strategy to invest in content and is in the process
of acquiring a 50% stake in a local content provider De Vijver
Media.

The investment in content will help Telenet to add greater value
and improve its bundled offer, which has historically been
differentiated by network speed and capacity.  While network
speeds and capacity will continue to be key to offering a
competitive consumer experience, their point of differentiation
may diminish until demand-side factors that drive the need for
higher speed and capacity pick up.

Segmented Competition Supports Telenet

Belgium is segmented in its geography, cultures and its TV
offerings.  The Flemish north primarily receives broadband from
Telenet and Belgacom while the Southern region of Wallonia
typically subscribe to VOO and Belgacom.  This gives Telenet
limited competition in the provision of high-speed internet within
its coverage area.  Belgacom's high-end VDSL offering is
materially slower than Telenet's offerings.  In a country with
strong cable coverage, this has allowed Telenet to corner specific
geographies and up-sell TV into triple and quad play bundles.

Best in Class Cable

Telenet's blended ARPU of EUR49.7 compares with Ziggo's EUR42.7
and Numericable's EUR41.9, demonstrating its ability to drive ARPU
increases from a mix of price inflation, bundling, and upgrades to
broadband speeds.  Telenet also operates with a 51% EBITDA margin
relative to LGI's 45%.  This again illustrates Telenet's
operational excellence.

RATING SENSITIVITIES

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

   -- A weakening in the operating environment due to increased
      competition from cable wholesale
   -- FFO-adjusted net leverage consistently over 5.5x and FFO
      fixed charge cover trending below 2.5x (FY13: 3.1x)
   -- A change in financial or dividend policy leading to new,
      higher leverage targets

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

A firm commitment from both Telenet and Liberty Global that
Telenet is committed to a more conservative leverage profile and
distribution policy.  This continues to seem unlikely at present.

All ratings are affirmed as follows:

Telenet N.V.
Long-term IDR 'B+', Stable Outlook
Short-term IDR 'B'
Senior secured debt 'BB'
Instrument ratings:
Senior secured bank facility: 'BB'/'RR2'
Telenet Finance Luxembourg S.C.A EUR500m due 2020: 'BB'/'RR2'
Telenet Finance III Luxembourg S.C.A EUR300m due 2021: 'BB'/'RR2'
Telenet Finance IV Luxembourg S.C.A EUR400m due 2021: 'BB'/'RR2'
Telenet Finance V Luxembourg S.C.A EUR450m due 2022: 'BB'/'RR2'


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G E R M A N Y
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QIMONDA AG: Enters Into Partial Settlement with Infineon
--------------------------------------------------------
Qimonda AG insolvency administrator Dr. Michael Jaffe and Infineon
Technologies AG have agreed out of court to settle all disputes --
with the exception of the pending proceedings on the grounds of
economic re-establishment and so-called liability for the
impairment of capital.  Hence, Infineon will pay a total
settlement amount of EUR135 million and acquire all patents of
Qimonda for a further EUR125 million.  The court proceedings
initiated by the insolvency administrator of Qimonda against
Infineon on the grounds of economic re-establishment and
so-called liability for the impairment of capital will be
continued at the Munich District Court.

The closing of the partial settlement agreement and the
acquisition of the patent business is subject to the fulfillment
of various legal conditions, and is expected to take place in the
following calendar quarter.  The creditors' assembly of Qimonda
has already approved the agreement with Infineon.

"With this partial settlement, we have made significant progress
in the insolvency proceedings over the assets of Qimonda.  We were
able to find a solution for key aspects of the proceedings and in
the interest of our creditors ensure a considerable increase in
the estate," said insolvency administrator Mr. Jaffe.

Up until the opening of insolvency proceedings in April 2009,
Qimonda had been one of the largest memory chip manufacturers in
the world.  Its patent portfolio comprises patents and patent
applications worldwide.  The intellectual property rights relate
to inventions relevant to the semiconductor, computer and
telecommunications industry.  In the course of the insolvency
proceedings, the portfolio was initially marketed successfully
through licensing before being offered to the market through an
international sales process.

The most noted insolvency proceedings handled by Mr. Jaffe both
nationally and internationally, in addition to Qimonda, include
the KirchMedia group and the German subsidiaries of the Petroplus
Group, the largest independent refiner and wholesaler of petroleum
products in Europe. Over the last years, Mr. Jaffe also
successfully restructured caravan manufacturer Knaus Tabbert along
with such other businesses as Grob Aerospace and Cinterion
Wireless Modules Holding GmbH.  Most recently, he effectively
managed to save Kaiser GmbH, a key supplier of the international
automobile industry with a workforce of 640 people, from the brink
of insolvency and find a suitable investor.

In recent weeks, Mr. Jaffe was also appointed as the preliminary
insolvency administrator of Stadtwerke Gera AG and its subsidiary,
Geraer Verkehrsbetrieb GmbH.  This is the first case of insolvency
of a public utility company in Germany.

JAFFE Rechtsanwaelte Insolvenzverwalter was founded by Mr. Jaffe
as a law firm that today is a specialist in the field of
insolvency administration, insolvency law, procedural law and the
related areas of law in Germany.  It has currently appointed 35
lawyers at eight locations in six German states.  Since the
introduction of the ESUG law on March 1, 2012 which governs the
further facilitation of the restructuring of companies, Mr. Jaffe
and other lawyers in the firm have also frequently been appointed
as trustees.

                       About Qimonda AG

Qimonda AG (NYSE: QI) -- http://www.qimonda.com/-- was a global
memory supplier with a diversified DRAM product portfolio.  The
Company generated net sales of EUR1.79 billion in financial year
2008 and had -- prior to its announcement of a repositioning of
its business -- roughly 12,200 employees worldwide, of which
1,400 were in Munich, 3,200 in Dresden and 2,800 in Richmond, Va.

Qimonda AG commenced insolvency proceedings in a local court in
Munich, Germany, on Jan. 23, 2009.  On June 15, 2009, QAG filed
a petition (Bankr. E.D. Va. Case No. 09-14766) for relief under
Chapter 15 of the U.S. Bankruptcy Code.

Qimonda North America Corp., an indirect and wholly owned
subsidiary of QAG, is the North American sales and marketing
subsidiary of QAG.  QNA is also the parent company of Qimonda
Richmond LLC.  QNA and QR sought Chapter 11 protection (Bankr.
D. Del. Case No. 09-10589) on Feb. 20, 2009.  Mark D. Collins,
Esq., Michael J. Merchant, Esq., and Lee E. Kaufman, Esq., at
Richards Layton & Finger PA, in Wilmington Delaware; and Mark
Thompson, Esq., Morris J. Massel, Esq., and Terry Sanders, Esq.,
at Simpson Thacher & Bartlett LLP, in New York City, represented
the Debtors as counsel.  Roberta A. DeAngelis, the United States
Trustee for Region 3, appointed seven creditors to serve on an
official committee of unsecured creditors.  Jones Day and Ashby &
Geddes represented the Committee.  In its bankruptcy petition,
Qimonda Richmond, LLC, estimated more than US$1 billion in assets
and debts.  The information, the Chapter 11 Debtors said, was
based on QR's financial records which are maintained on a
consolidated basis with QNA.

In September 2011, the Chapter 11 Debtors won confirmation of
their Chapter 11 liquidation plan which projects that unsecured
creditors with claims between US$33 million and US$35 million
would have a recovery between 6.1% and 11.1%.  No secured claims
of significance remained.


TECHEM ENERGY: Moody's Affirms 'B1' Corporate Family Rating
-----------------------------------------------------------
Moody's Investors Service has affirmed the B1 corporate family
rating (CFR) and B1-PD probability of default rating (PDR) of
Techem Energy Metering Service GmbH & Co. KG ("Techem").
Concurrently, Moody's affirmed the B3 (LGD5) rating assigned to
the group's EUR325 million subordinated notes (due 2020) and the
Ba3 (LGD3) rating on the EUR410 million senior secured notes (due
2019) issued by Techem GmbH. The outlook has been revised to
positive from stable.

List of affected ratings

Affirmations:

Issuer: Techem Energy Metering Service GmbH & Co. KG

Corporate Family Rating (Local Currency), Affirmed B1

Probability of Default Rating, Affirmed B1-PD

EUR325M 7.875% Senior Subordinated Regular Bond/Debenture (Local
Currency) Oct 1, 2020, Affirmed B3

Issuer: Techem GmbH

EUR410M 6.125% Senior Secured Regular Bond/Debenture (Local
Currency) Oct 1, 2019, Affirmed Ba3

Revisions:

Issuer: Techem Energy Metering Service GmbH & Co. KG

EUR325M 7.875% Senior Subordinated Regular Bond/Debenture (Local
Currency) Oct 1, 2020, Revised to a range of LGD5 from a range of
LGD6

Outlook Actions:

Issuer: Techem Energy Metering Service GmbH & Co. KG

Outlook, Changed To Positive From Stable

Issuer: Techem GmbH

Outlook, Changed To Positive From Stable

Ratings Rationale

"The rating action was prompted by the strong improvement in
Techem's financial performance in the last fiscal year 2014 (ended
31 March 2014) and which the group could sustain in the first
quarter of the current fiscal year," says Goetz Grossmann, Moody's
lead analyst for Techem. "Thanks to the constant growth in
Techem's earnings and profitability, owing primarily to the very
positive developments in the group's German energy services
business, Moody's adjusted leverage for Techem has reduced to 5.0x
debt/EBITDA in the 12 months ended 30 June 2014. Should Techem
manage to sustain its current profitability (adjusted EBITDA
margins of around 38%) and continue to deleverage further, Moody's
might consider an upgrade of its ratings during the next 12-18
months, as reflected in the change of the outlook to positive,"
adds Mr. Grossmann.

The B1 CFR and positive outlook reflect Moody's expectation that
Techem will gradually reduce its adjusted debt/EBITDA to well
below 5x over the next 12-18 months. Moody's projects Techem's
adjusted EBITDA to exceed EUR300 million by the end of fiscal year
2016 (31 March 2016) at the latest (currently EUR272 million on a
trailing 12 months basis as of 30 June 2014) as the group benefits
from a continued shift from traditional sub-metering devices to
higher quality radio-controlled metering technology (current share
of radio equipped devices in Germany is c.61%), the broadening of
its value added products and services offering and a disciplined
cost management focused on increasing standardization and
automation of production and services (e.g., meter reading and
billing) processes. The rating action also follows Techem's
successful repricing of its senior loan facilities in June 2014
which will reduce the group's annual interest costs by around
EUR3.5 million and which Moody's expects will improve the group's
interest coverage towards 2x as measured by EBITDA-capex/interest
expense over the next two years. The rating agency further
believes that Techem will be able to continuously achieve moderate
positive free cash flows, although with some volatility from
working capital movements and despite regular sizeable dividend
payments, while such distributions are expected to be based solely
on the group's business performance.

Techem's rating is also supported by (1) the group's very high
profitability with an adjusted EBITDA margin of 37.7% in the 12
months ended June 30, 2014 helped by a high market penetration,
particularly in the German sub-metering business as well as
through a growing share of supplementary services, (2) good
revenue visibility and stability driven by the non-discretionary
nature of demand and long-term contracts with a typical duration
of 5-10 years in Energy Services and 10-15 years in Energy
Contracting, (3) high entry barriers and low customer churn rates
(well under 5% in Germany), as well as (4) a supportive regulatory
environment and focus on energy efficiency, which might also
foster additional growth outside of Germany.

More negatively, the rating remains constrained by Techem's (1)
high leverage with a Moody's adjusted debt/EBITDA ratio of 5x in
the 12 months ended June 2014, (2) limited ability to deleverage
due to sizeable interest payments, high capex requirements and
dividend payments, (3) modest geographic diversification (c.21% of
group revenue was generated in regions other than Germany in
fiscal year 2014), and (4) a shareholder-oriented financial
policy.

Moody's considers Techem's liquidity profile as good. As of
June 30, 2014, Moody's projects the group's cash uses over the
next 12-18 months to include capital expenditure of approximately
EUR100 million annually, dividends, working capital and working
cash required to run the business, which together should be well
covered by EUR102 million cash and cash equivalents on balance
sheet, funds from operations amounting to around EUR160 million
per annum and funds available (EUR32 million as of June 30, 2014)
under the group's committed EUR50 million revolving credit
facility and EUR50 million capex facility. Moreover, in August
2014, Techem signed another capex facility amounting to EUR60
million (due 2018) which will further strengthen the group's
liquidity position and provide additional funds to accommodate
future business growth if needed. Moody's notes that Techem's
credit lines contain conditionality language in the form of
financial covenants under which the group maintained ample
headroom as of March 31, 2014.

The positive outlook reflects Moody's expectation that Techem will
be able to further gradually deleverage towards an adjusted
leverage ratio of well below 5.0x debt/EBITDA, maintain its
current profitability, and continue to generate moderate positive
free cash flows.

An upgrade of Techem's ratings would require the group's (1)
leverage to reduce to sustainably below 5x adjusted debt/EBITDA;
(2) adjusted EBITDA margins to remain at around 38%; and (3)
ability to achieve solid positive free cash flows in the mid
double digit euro range including expected continued dividend
distributions to shareholders.

Moody's would consider downgrading Techem if (1) the group's
profitability were to unexpectedly come under pressure resulting
in adjusted leverage sustainably exceeding 6x debt/EBITDA; (2)
interest coverage fell below 1.2x EBIT/interest expense; and (3)
free cash flow turned negative in any given year. In addition, a
weakening of the group's currently solid liquidity profile would
exert pressure on Techem's ratings.

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

Headquartered in Eschborn (Germany) Techem is a leading provider
of energy services operating through two divisions: Energy
Services (around 91% of EBITDA in FY2013/14 ended 31 March 2014)
provides sub-metering services of measuring heating use and water
consumption of individual housing units and supplementary services
such as smoke detector maintenance and legionella analysis in
drinking water. Energy Contracting (around 9% of EBITDA in
FY2013/14) offers a holistic management of clients' energy
consumption through the planning, financing, construction and
operation of heat stations, boilers, cooling equipment and
combined heating and power units. In the 12 months ended 30 June
2014 Techem had revenues of around EUR722 million of which
approximately 79% were generated in Germany. Techem is owned by
funds advised by the Macquarie Group Limited.


TRIONISTA TOPCO: Moody's Affirms 'B2' Corporate Family Rating
-------------------------------------------------------------
Moody's Investors Service has affirmed the B2 corporate family
rating (CFR) and B2-PD probability of default rating (PDR) of
Trionista TopCo GmbH, the intermediate holding company of Germany
based sub-metering provider ista International GmbH ("ista" or
"the group"). Concurrently, Moody's affirmed the Caa1 (LGD6-90%)
rating assigned to the group's EUR525 million subordinated notes
(due 2021) issued by Trionista TopCo GmbH and the B1 (LGD3-37%)
ratings on the EUR1.45 billion senior secured credit facilities
and EUR350 million senior secured notes (due 2020) issued by
Trionista HoldCo GmbH. The outlook has been revised to positive
from stable.

List of affected ratings

Affirmations:

Issuer: Trionista TopCo GmbH

Corporate Family Rating, Affirmed B2

Probability of Default Rating, Affirmed B2-PD

EUR525M 6.875% Senior Subordinated Regular Bond/Debenture (Local
Currency) Apr 30, 2021, Affirmed Caa1

Issuer: Trionista HoldCo GmbH

EUR150M Senior Secured Bank Credit Facility (Local Currency) Apr
30, 2019, Affirmed B1

EUR1300M Senior Secured Bank Credit Facility (Local Currency) Apr
30, 2020, Affirmed B1

EUR350M 5% Senior Secured Regular Bond/Debenture (Local Currency)
Apr 30, 2020, Affirmed B1

Outlook Actions:

Issuer: Trionista TopCo GmbH

Outlook, Changed To Positive From Stable

Issuer: Trionista HoldCo GmbH

Outlook, Changed To Positive From Stable

Ratings Rationale

"The rating action follows ista's very robust and stronger than
expected financial results achieved in 2013 and during the first
six months of 2014. As a result of the constant notable growth in
earnings over the last 18 months, ista managed to reduce its
Moody's adjusted leverage to 6.9x debt/EBITDA in the 12 months
ended 30 June 2014 from 7.6x in 2012 pro-forma for the group's new
capital structure implemented in June last year", says Goetz
Grossmann, Moody's lead analyst for ista. "ista has benefitted
from a continued positive business environment, especially in the
German market of sub-metering and related services where the group
was able to realise further price increases, grow its installed
base of radio-controlled metering devices and to expand its
adjacent services. As Moody's expect that ista will be able to
further deleverage towards a Moody's adjusted debt/EBITDA of 6.5x
supported by a sustained growth in its earnings, Moody's might
consider upgrading its ratings over the next 12-18 months, as
indicated by the change in the outlook to positive", adds Mr.
Grossmann.

The affirmed B2 CFR and the positive outlook mirror the group's
resilient business model and gradually improving operating
performance and credit metrics, a trend which Moody's expects to
sustain as ista will benefit from an ongoing growth in its
installed base, continued price indexations, very low customer
churn rates, as well as a further increase of its adjacent
services portfolio (e.g., smoke detector maintenance, drinking
water analysis or informative billing services). While volume
growth in the very saturated German sub-metering market is rather
limited to the migration from evaporators to radio technology
(current share of radio meters in Germany is c.39%), Moody's
considers the group's solid international footprint (c.44% of 2013
group turnover was generated outside Germany) as beneficial to
ista in order to capture expected growth in regions where sub-
metering will become compulsory by the end of 2016, as regulated
by the Energy Efficiency Directive (EED). Despite the associated
anticipated marked increase in ista's capital expenditure and
higher working capital needs as these countries are required to
install heat and water sub-meters by 2017, Moody's acknowledges
that ista's free cash flow should remain moderately positive
during the next three years (around EUR60-70 million p.a.).

ista's CFR is further supported by the group's leading positioning
in the global sub-metering business, especially in its home market
Germany where it ranks second in terms of market share after
Techem Energy Metering Service GmbH & Co. KG (rated B1 positive).
ista's business model provides for very high and robust
profitability (adjusted EBITDA-margin of 42.8% in the 12 months
ended June 2014) and benefits from long-term contracts with its
customers with average contract durations of typically 7-9 years
and historically very low customer churn rates (below 3% in
Germany).

More negatively, ista's rating remains constrained by (1) its very
high leverage with a Moody's adjusted debt/EBITDA of 6.9x in the
12 months ended 30 June 2014, (2) limited ability to generate
meaningful positive free cash flows and to pay down debt, owing to
the challenge to cope with increasing capital spending
requirements in the upcoming years in line with projected business
growth and combined with a sizeable interest burden, as well as
(3) ista's lower profitability in regions outside of Germany which
may dilute the group's earnings levels as sub-metering penetration
rates in these markets increase.

ista's rating benefits from a good liquidity profile. As of 30
June 2014, the group's expected cash uses including capital
expenditures of around EUR110 million annually, working capital
consumption (intra-year swings estimated at c.EUR100 million) and
working cash requirements are fully covered by its cash sources
over the next 12-18 months. Cash sources of the group comprise
funds from operations of around EUR190 million per annum, funds
available under its currently undrawn EUR150 million multicurrency
revolving credit facility (maturing 2019) as well as cash on
balance sheet amounting to EUR67 million per 30 June 2014. Moody's
notes that ista's credit agreements contain conditionality
language in the form of financial covenants under which the group
maintained comfortable headroom as of 30 June 2014.

The positive outlook incorporates Moody's expectation that ista
will maintain its very strong profitability (while margins might
contract temporarily as EED driven growth requires ramp-up
investments) and further reduce adjusted leverage towards 6.5x
based on the steady growth in group earnings. The positive outlook
further reflects Moody's anticipation of ista to generate positive
free cash flows and maintain a solid liquidity profile at all
times.

Moody's could upgrade the ratings should ista manage to (1)
sustainably reduce leverage to levels of well below 7x adjusted
debt/EBITDA; and (2) improve its adjusted interest cover to at
least 1.5x EBIT/interest expense.

ista's rating could come under pressure if (1) adjusted
debt/EBITDA were to exceed 8.0x, (2) adjusted EBIT/interest
expense fell below 1.0x, and (3) adjusted EBITDA margins reduced
to levels below 40% and not only temporarily. Also, Moody's might
consider revising downward its ratings should ista fail to
generate positive free cash flows in any financial year with no
signs of improvement.

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

Headquartered in Essen (Germany), ista is a leading global
provider of energy services relating to sub-metering of heating
use and water consumption for multi-occupant housing units, energy
cost allocation and billing services as well as adjacent services
such as smoke detector installation and maintenance and legionella
analysis in drinking water. In the 12 months ended 30 June 2014
ista reported EUR768 million in group revenues of which over 50%
were generated in Germany. ista is owned by funds managed by
private equity firm CVC Capital Partners Ltd. which acquired the
group in 2013 after holding a minority stake in ista since 2007.


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


AERCAP IRELAND: Moody's Rates US$800MM Sr. Unsecured Notes 'Ba2'
----------------------------------------------------------------
Moody's Investors Service assigned a Ba2 rating to the proposed
US$800 million senior unsecured notes to be jointly issued by
AerCap Ireland Capital Limited and AerCap Global Aviation Trust,
both subsidiaries of AerCap Holdings N.V. (AerCap). The rating
outlook is stable.

Ratings Rationale

The Ba2 rating assigned to the notes is based upon terms and
conditions that are consistent with the issuers' existing senior
unsecured debt. Issued on a joint and several basis, the notes are
guaranteed unconditionally on a senior unsecured basis by the
issuers' ultimate parent AerCap and by certain AerCap
subsidiaries.

The rating of the notes also reflects the strength of AerCap's
global aircraft leasing franchise and the company's strong
prospects for achieving operational and funding efficiencies after
acquiring International Lease Finance Corporation (ILFC) in May
this year. Credit constraints include execution and performance
risks relating to the ILFC acquisition, high reliance on
confidence-sensitive capital markets funding, and modestly higher
leverage associated with the financing of the ILFC acquisition.
The stable rating outlook reflects Moody's expectation that
AerCap's operating performance will benefit from the company's
capable management of the integration of ILFC's operations.

Moody's could upgrade AerCap's ratings if the ILFC integration
progresses favorably, the company's financial performance benefits
from anticipated operating synergies, the company maintains strong
liquidity and its leverage declines.

Moody's could downgrade the ratings if AerCap's operating
prospects weaken, it loses key personnel, liquidity weakens, or if
leverage increases.

AerCap is a major commercial aircraft leasing company with
headquarters in the Netherlands and listed on the New York Stock
Exchange (AER).

The principal methodology used in this rating was Finance Company
Global Rating Methdology published in March 2012.


AERCAP IRELAND: S&P Assigns 'BB+' Rating to Sr. Unsecured Notes
---------------------------------------------------------------
Standard & Poor's Ratings Services said that it has assigned its
'BB+' issue-level rating to AerCap Ireland Capital Ltd.'s and
AerCap Global Aviation Trust's (both wholly owned subsidiaries of
and guaranteed by AerCap Holdings N.V.) senior unsecured notes,
with a recovery rating of '3', indicating S&P's expectation that
lenders would receive meaningful (50% to 70%) recovery of
principal in the event of a payment default.  The company will use
proceeds for general corporate purposes, including debt repayment.

S&P's ratings on The Netherlands-based aircraft lessor AerCap
reflect its view of its position as one of the two largest
aircraft lessors; and increased debt leverage, after its May 14,
2014 acquisition of competitor International Lease Finance Corp.
Standard & Poor's characterizes the company's business risk
profile as "satisfactory", its financial risk profile as
"significant," and its liquidity as "adequate" under S&P's
criteria.

The outlook is stable, reflecting S&P's expectations that AerCap's
credit metrics will continue to improve gradually, due to
increased earnings and cash flow.  However, S&P do not expect
credit metrics to return to previous levels for at least the next
18 to 24 months.  S&P expects AerCap to sell at least $1 billion
of aircraft a year through 2016.  S&P could raise ratings if
AerCap's aircraft sales exceed $1 billion and the company uses
proceeds to reduce debt, resulting in debt to capital declining to
the mid-70% area.  Although unlikely, S&P could lower ratings if
the company acquired a large debt-financed aircraft portfolio,
resulting in further weakening of its credit metrics (for example,
if funds from operations to debt declined to the mid-single digit
percent area and debt to capital increased to over 85% on a
sustained basis).

RATINGS LIST

AerCap Holdings N.V.
Corporate credit rating                 BB+/Stable/--

New Ratings
AerCap Ireland Capital Ltd.
AerCap Global Aviation Trust
Senior unsecured note rating           BB+
  Recovery rating                       3


EUROCREDIT CDO VI: Moody's Affirms 'Ba1' Rating on Class D Notes
----------------------------------------------------------------
Moody's Investors Service has upgraded the ratings on the
following notes issued by Eurocredit CDO VI PLC:

EUR33.5M Class B Senior Secured Floating Rate Notes due 2022,
Upgraded to Aaa (sf); previously on Sep 2, 2011 Upgraded to A1
(sf)

EUR30M Class C Senior Secured Deferrable Floating Rate Notes due
2022, Upgraded to A1 (sf); previously on Sep 2, 2011 Upgraded to
Baa1 (sf)

Moody's also affirmed the ratings of the following notes issued by
Eurocredit CDO VI PLC:

EUR125M (current balance: EUR49,742,516.4) Class A-R Senior
Secured Revolving Floating Rate Notes due 2022, Affirmed Aaa (sf);
previously on Sep 2, 2011 Upgraded to Aaa (sf)

EUR210M (current balance: EUR77,046,122.63) Class A-T Senior
Secured Floating Rate Notes due 2022, Affirmed Aaa (sf);
previously on Sep 2, 2011 Upgraded to Aaa (sf)

EUR24M Class D Senior Secured Deferrable Floating Rate Notes due
2022, Affirmed Ba1 (sf); previously on Sep 2, 2011 Upgraded to Ba1
(sf)

EUR20M (Current Balance: EUR15,832,366.57) Class E Senior Secured
Deferrable Floating Rate Notes due 2022, Affirmed Ba3 (sf);
previously on Sep 2, 2011 Upgraded to Ba3 (sf)

Eurocredit CDO VI PLC, issued in December 2006, is a
Collateralised Loan Obligation ("CLO") backed by a portfolio of
mostly high yield European loans. The portfolio is managed by
Intermediate Capital Managers Limited. The transaction's
reinvestment period ended on 4 January 2013.

Ratings Rationale

The rating actions on the notes are primarily a result of the
improvement in over-collateralization (OC) ratios since the
payment date in July 2014 and the significant amount of
deleveraging of the Class A notes following amortization of the
underlying portfolio. The Class A notes have redeemed such that
35% of the original balance remains outstanding. As a result of
the deleveraging, the OC ratios of Classes B and C have increased
significantly. According to the August 2014 trustee report the OC
ratios of Classes A/B, C, D and C are 158.81%, 132.67%, 117.23%
and 108.88% compared to 137.90%, 122.66%, 112.70% and 106.98%
respectively in June 2014.

The key model inputs Moody's uses in its analysis, such as par,
weighted average rating factor, diversity score and the weighted
average recovery rate, are based on its published methodology and
could differ from the trustee's reported numbers. In its base
case, Moody's analyzed the underlying collateral pool as having a
performing par and principal proceeds balance of EUR220 million, a
weighted average default probability of 22.38% (consistent with a
WARF of 3397.96), a weighted average recovery rate upon default of
47.69% for a Aaa liability target rating, a diversity score of 32
and a weighted average spread of 4.04%.

The default probability derives from the credit quality of the
collateral pool and Moody's expectation of the remaining life of
the collateral pool. The estimated average recovery rate 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 a recovery of 50% of the 93.40% of the portfolio exposed
to first-lien senior secured corporate assets upon default and of
15% of the remaining non-first-lien loan corporate assets upon
default. In each case, historical and market performance and a
collateral manager's latitude to trade collateral are also
relevant factors. Moody's incorporates these default and recovery
characteristics of the collateral pool into its cash flow model
analysis, subjecting them to stresses as a function of the target
rating of each CLO liability it is analyzing.

Methodology Underlying the Rating Action:

The principal methodology used in this rating was "Moody's Global
Approach to Rating Collateralized Loan Obligations" published in
February 2014.

Factors that would lead to an upgrade or downgrade of the rating:

In addition to the base-case analysis, Moody's conducted
sensitivity analyses on the key parameters for the rated notes,
for which it assumed lower credit quality in the portfolio to
address refinancing risk. Loans to European corporates rated B3 or
lower and maturing between 2014 and 2015 make up approximately
3.4% of the portfolio, which could make refinancing difficult.
Moody's ran a model in which it raised the base case WARF to 3525
by forcing ratings on 50% of the refinancing exposures to Ca; the
model generated outputs that were within one notch of the base-
case results. Also Moody's ran a model in which it lowered the
weighted average spread by 30 basis points; the model generated
outputs that were within one notch of the base-case results.

This transaction is subject to a high level of macroeconomic
uncertainty, which could negatively affect the ratings on the
note, in light of uncertainty about credit conditions in the
general economy. CLO notes' performance may also be impacted
either positively or negatively by 1) the manager's investment
strategy and behavior and 2) divergence in the legal
interpretation of CDO documentation by different transactional
parties because of embedded ambiguities.

   * Portfolio amortization: The main source of uncertainty in
this transaction is the pace of amortization of the underlying
portfolio, which can vary significantly depending on market
conditions and have a significant impact on the notes' ratings.
Amortization could accelerate as a consequence of high loan
prepayment levels or collateral sales by the collateral manager or
be delayed by an increase in loan amend-and-extend restructurings.
Fast amortization would usually benefit the ratings of the notes
beginning with the notes having the highest prepayment priority.

   * Around 43.22% of the collateral pool consists of debt
obligations whose credit quality Moody's has assessed by using
credit estimates.

   * Recovery of defaulted assets: Market value fluctuations in
trustee-reported defaulted assets and those Moody's assumes have
defaulted can result in volatility in the deal's over-
collateralization levels. Further, the timing of recoveries and
the manager's decision whether to work out or sell defaulted
assets can also result in additional uncertainty. Moody's analyzed
defaulted recoveries assuming the lower of the market price or the
recovery rate to account for potential volatility in market
prices. Recoveries higher than Moody's expectations would have a
positive impact on the notes' ratings.

   * Foreign currency exposure: The deal has a significant
exposure to non-EUR denominated assets. Volatility in foreign
exchange rates will have a direct impact on interest and principal
proceeds available to the transaction, which can affect the
expected loss of rated tranches.

In addition to the quantitative factors that Moody's explicitly
modelled, qualitative factors are part of the rating committee's
considerations. These qualitative factors include the structural
protections in the transaction, its recent performance given the
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, can influence the final rating decision.


EUROCREDIT CDO VII: Moody's Raises Rating on Class Q Notes to Ba1
-----------------------------------------------------------------
Moody's Investors Service has upgraded the ratings on the
following notes issued by Eurocredit CDO VII PLC:

EUR38.3M Class B Senior Secured Deferrable Floating Rate Notes
due 2023, Upgraded to Aaa (sf); previously on Sep 9, 2011 Upgraded
to Aa3 (sf)

EUR31.2M Class C Senior Secured Deferrable Floating Rate Notes
due 2023, Upgraded to A2 (sf); previously on Sep 9, 2011 Upgraded
to Baa1 (sf)

EUR8M Class Q Combination Notes due 2023, Upgraded to Ba1 (sf);
previously on Sep 9, 2011 Upgraded to Ba2 (sf)

EUR15M Class R Combination Notes due 2023, Upgraded to A2 (sf);
previously on Sep 9, 2011 Upgraded to Baa3 (sf)

EUR6M Class S Combination Notes due 2023, Upgraded to Aaa (sf);
previously on Sep 9, 2011 Upgraded to Aa3 (sf)

Moody's also affirmed the ratings of the following notes issued by
Eurocredit CDO VII PLC:

EUR125M (Current Balance: EUR63,864,463.01) Revolving Loan
Facility Notes, Affirmed Aaa (sf); previously on Sep 9, 2011
Upgraded to Aaa (sf)

EUR221.5M (Current Balance: EUR131,135,070.07) Class A Senior
Secured Floating Rate Notes due 2023, Affirmed Aaa (sf);
previously on Sep 9, 2011 Upgraded to Aaa (sf)

EUR29.1M Class D Senior Secured Deferrable Floating Rate Notes
due 2023, Affirmed Ba1 (sf); previously on Sep 9, 2011 Upgraded to
Ba1 (sf)

EUR19.8M (Current Balance: EUR7,522,226.93) Class E Senior
Secured Deferrable Floating Rate Notes due 2023-1, Affirmed Ba3
(sf); previously on Sep 9, 2011 Upgraded to Ba3 (sf)

Eurocredit CDO VII PLC, issued in April 2007, is a Collateralised
Loan Obligation ("CLO") backed by a portfolio of mostly high yield
European loans. The portfolio is managed by Intermediate Capital
Managers Limited. The transaction's reinvestment period ended on
17 April 2013.

Ratings Rationale

The rating actions on the notes are primarily a result of the
improvement in over-collateralization (OC) ratios since the
payment date in April 2014 and the significant amount of
deleveraging of the senior Revolving Loan Facility and Class A
notes (collectively "Class A") following amortization of the
underlying portfolio. The Class A notes have redeemed such that
59% of the original balances remain outstanding. As a result of
the deleveraging, the OC ratios of Classes B and C have increased
significantly. According to the August 2014 trustee report the OC
ratios of Classes B, C, D and C are 138.44%, 121.83%, 109.57% and
106.79% compared to 127.60%, 115.69%, 106.42% and 104.26%
respectively in February 2014. The OC ratios will improve further
following the October 2014 payment date.

The ratings on the combination notes address the repayment of the
rated balance on or before the legal final maturity. For the Class
R notes, the 'rated balance' at any time is equal to the principal
amount of the combination note on the issue date times a rated
coupon of 1.50% per annum accrued on the rated balance on the
preceding payment date, minus the sum of all payments made from
the issue date to such date, of either interest or principal. For
the Classes Q and S, the rated balances at any time are equal to
the principal amount of the combination notes on the issue date
minus the sums of all payments made from the issue date to such
date, of either interest or principal. The rated balances will not
necessarily correspond to the outstanding notional amounts
reported by the trustee.

The key model inputs Moody's uses in its analysis, such as par,
weighted average rating factor, diversity score and the weighted
average recovery rate, are based on its published methodology and
could differ from the trustee's reported numbers. In its base
case, Moody's analyzed the underlying collateral pool as having a
performing par and principal proceeds balance of EUR238 million, a
weighted average default probability of 21.5% (consistent with a
WARF of 3207.37), a weighted average recovery rate upon default of
46.64% for a Aaa liability target rating, a diversity score of 28
and a weighted average spread of 3.46%.

The default probability derives from the credit quality of the
collateral pool and Moody's expectation of the remaining life of
the collateral pool. The estimated average recovery rate 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 a recovery of 50% of the 90.40% of the portfolio exposed
to first-lien senior secured corporate assets upon default and of
15% of the remaining non-first-lien loan corporate assets upon
default. In each case, historical and market performance and a
collateral manager's latitude to trade collateral are also
relevant factors. Moody's incorporates these default and recovery
characteristics of the collateral pool into its cash flow model
analysis, subjecting them to stresses as a function of the target
rating of each CLO liability it is analyzing.

Methodology Underlying the Rating Action:

The principal methodology used in this rating was "Moody's Global
Approach to Rating Collateralized Loan Obligations" published in
February 2014.

Factors that would lead to an upgrade or downgrade of the rating:

In addition to the base-case analysis, Moody's conducted
sensitivity analyses on the key parameters for the rated notes,
for which it lowered the weighted average spread by 30 basis
points; the model generated outputs that were within one notch of
the base-case results.

This transaction is subject to a high level of macroeconomic
uncertainty, which could negatively affect the ratings on the
note, in light of uncertainty about credit conditions in the
general economy. CLO notes' performance may also be impacted
either positively or negatively by 1) the manager's investment
strategy and behavior and 2) divergence in the legal
interpretation of CDO documentation by different transactional
parties because of embedded ambiguities.

    * Portfolio amortization: The main source of uncertainty in
this transaction is the pace of amortization of the underlying
portfolio, which can vary significantly depending on market
conditions and have a significant impact on the notes' ratings.
Amortization could accelerate as a consequence of high loan
prepayment levels or collateral sales by the collateral manager or
be delayed by an increase in loan amend-and-extend restructurings.
Fast amortization would usually benefit the ratings of the notes
beginning with the notes having the highest prepayment priority.

   * Around 39.56% of the collateral pool consists of debt
obligations whose credit quality Moody's has assessed by using
credit estimates.

   * Recovery of defaulted assets: Market value fluctuations in
trustee-reported defaulted assets and those Moody's assumes have
defaulted can result in volatility in the deal's over-
collateralization levels. Further, the timing of recoveries and
the manager's decision whether to work out or sell defaulted
assets can also result in additional uncertainty. Moody's analyzed
defaulted recoveries assuming the lower of the market price or the
recovery rate to account for potential volatility in market
prices. Recoveries higher than Moody's expectations would have a
positive impact on the notes' ratings.

   * Foreign currency exposure: The deal has an exposure to non-
EUR denominated assets. Volatility in foreign exchange rates will
have a direct impact on interest and principal proceeds available
to the transaction, which can affect the expected loss of rated
tranches.

In addition to the quantitative factors that Moody's explicitly
modelled, qualitative factors are part of the rating committee's
considerations. These qualitative factors include the structural
protections in the transaction, its recent performance given the
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, can influence the final rating decision.


HARVEST CLO III: S&P Raises Ratings on 2 Note Classes to 'B+'
-------------------------------------------------------------
Standard & Poor's Ratings Services raised its credit ratings on
Harvest CLO III PLC's class A, B, C-1, C-2, D-1, D-2, E-1, E-2,
and N combination (combo) notes.  At the same time, S&P has
withdrawn its 'AA+p (sf)' ratings on the class Q combo, R combo, S
combo, and U combo notes following pay downs.

The rating actions follow S&P's credit and cash flow analysis of
the transaction using data from the trustee report dated July 31,
2014 and the application of its relevant criteria.

"Since our previous review of the transaction, the proportion of
assets that we consider to be rated in the 'CCC' category ('CCC+',
'CCC', and 'CCC-') has declined to 3.47% from 8.94% as a
percentage of the total portfolio.  The weighted-average spread
earned on the collateral pool has increased since our previous
review to 4.00% from 3.48%.  All par coverage tests continue to
comply with the required triggers as set out in the transaction
documents," S&P said.

"We factored in the above observations and subjected the capital
structure to our cash flow analysis, based on the methodology and
assumptions outlined in our corporate collateralized debt
obligation (CDO) criteria, to determine the break-even default
rates (BDR) for each class, at each rating level.  The BDR
represents our estimate of the maximum level of gross defaults,
based on our stress assumptions, that a tranche can withstand and
still fully repay the noteholders.  We used the reported portfolio
balance that we considered to be performing, the principal cash
balance, the current weighted-average spread, and the weighted-
average recovery rates calculated in line with our criteria.  We
applied various cash flow stress scenarios using various default
patterns and timings for each liability rating category, in
conjunction with different interest rate stresses," S&P added.

At the same time, S&P has conducted its credit analysis to
determine the scenario default rate (SDR) for each rated class of
notes.  S&P used its CDO Evaluator to determine the default rate
expected in the portfolio at each rating level, which S&P then
compared with the respective BDR.

As a result of S&P's analysis, it considers the available credit
enhancement for the class A, B, C-1, C-2, D-1, D-2, E-1, E-2, and
N combo notes to be commensurate with higher ratings than those
currently assigned.  S&P has therefore raised its ratings on these
classes of notes.

The class Q combo, R combo, S combo, and U combo notes have fully
redeemed since S&P's previous review.  S&P has therefore withdrawn
its 'AA+p (sf)' ratings on these classes of notes.

S&P has analyzed the derivative counterparties' exposure to the
transaction, and concluded that the counterparty exposure is
currently sufficiently limited and therefore doesn't affect the
assigned ratings.

Harvest CLO III is a cash flow CDO transaction that securitizes
loans to primarily speculative-grade corporate firms.  The
transaction closed in April 2006 and is managed by 3i Debt
Management Investments Ltd.  It is currently amortizing.

RATINGS LIST

Harvest CLO III PLC
EUR722.515 mil senior and subordinated deferrable fixed- and
floating-rate notes
                                     Rating
Class             Identifier         To                 From
A                 XS0247648263       AAA (sf)           AA- (sf)
B                 XS0247650244       AA+ (sf)           A- (sf)
C-1               XS0247651481       A (sf)             BB+ (sf)
C-2               XS0247652455       A (sf)             BB+ (sf)
D-1               XS0247653180       BBB- (sf)          BB- (sf)
D-2               XS0247654824       BBB- (sf)          BB- (sf)
E-1               41752SAA0          B+ (sf)            B- (sf)
E-2               XS0247656449       B+ (sf)            B- (sf)
N Combo           XS0248902107       A+ (sf)            BB+ (sf)
Q Combo           XS0247659625       NR                 AA+p (sf)
R Combo           XS0247660631       NR                 AA+p (sf)
S Combo           XS0247661100       NR                 AA+p (sf)
U Combo           XS0248903253       NR                 AA+p (sf)

NR -- Not Rated.


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


BORMIOLI ROCCO: S&P Revises Outlook to Neg. & Affirms 'B+' CCR
--------------------------------------------------------------
Standard & Poor's Ratings Services said it revised to negative
from stable its outlook on Italy-based glass and plastic packaging
company Bormioli Rocco Holdings S.A.  At the same time, S&P
affirmed its 'B+' long-term corporate credit rating on the
company.

In addition, S&P affirmed its 'B+' issue rating on Bormioli
Rocco's EUR250 million senior secured notes.  The recovery rating
on the notes is unchanged at '3', indicating S&P's expectation of
meaningful (50%-70%) recovery in the event of a payment default.

The outlook revision reflects Bormioli's performance in the first
half of 2014, which fell short of S&P's expectations.  This was
primarily due to production problems, including furnace stoppages
and breakdowns.  At the same time, still-difficult economic
conditions in Europe are depressing trading conditions.  This is
significantly weakening Bormioli's profitability, with metrics now
below the industry average.

S&P sees that some production problems relate to one-off
incremental heavy maintenance costs.  However, S&P believes there
is a risk that Bormioli could experience additional productivity
issues in 2014, which may also affect the company's performance in
2015.  The outlook revision also factors in S&P's view that
trading conditions could weaken in some of Bormioli's key markets
in Europe.

Consequently, S&P is revising downward its credit metric
expectations for 2014.  S&P now forecasts Bormioli's ratio of
adjusted funds from operations (FFO) to debt to be below 10% and
debt to EBITDA to be above 5x in 2014.  This is weaker than S&P's
previous estimates of FFO to debt in the range of 10%-12% and debt
to EBITDA between 4x and 4.5x.  S&P still expects the company's
metrics to recover in 2015 after a very weak 2014.  S&P expects
FFO to debt of 10%-12% and debt to EBITDA to be well below 5x next
year.  This recovery reflects both the increase in production
capacity and penetration in new regions.  Nevertheless, S&P's
base-case assumptions for 2015 have significant downside risk.
The main risk is further production inefficiencies and stoppages
in plants, given the company's efforts to rebuild and maintain
some of its furnaces.  Furthermore, S&P sees a risk that the
company's trading may continue to suffer in key European markets,
namely Italy and France.  S&P also expects free cash flow to be
negative over 2014 and 2015 as Bormioli ramps up capital
expenditure (capex) to refurbish its furnaces and improve
productivity and efficiency.

"We view Bormioli's business risk profile as "fair," reflecting
the company's relatively small scope of operations, below-average
margins for the industry, sensitivity to volatile input costs, and
relatively high capital intensity.  Bormioli also lacks
significant geographic diversification, with Italy and France
representing about 60% of sales.  Nevertheless, Bormioli has a
leading niche position in the mature and consolidated Italian and
French markets and long-standing relationships with customers in
the relatively stable end markets of pharmaceuticals and food and
beverages.

S&P continues to view the company's financial risk profile as
"aggressive."  Bormioli has the potential to deleverage over the
medium term, but is currently reinvesting free cash into the
business, mainly to finance the refurbishment of furnaces nearing
the end of their technical life, increase production capacity, and
improve operating flexibility.  These factors will likely result
in negative free cash flow over 2014 and 2015.

S&P applies a one-notch downward adjustment to the rating based on
its comparable ratings analysis.  This stems from S&P's
expectation that Bormioli's key ratio of FFO to debt will likely
stay between 10% and 12% over the next couple of years, marginally
below the border for S&P's "aggressive" category.  It also takes
into account S&P's expectation that free cash flow will likely be
negative.

In S&P's base case, it assumes:

   -- Revenues will decline by about 10%-13% in 2014, reflecting
      the sale of the perfumery business, with broadly stable
      growth thereafter;

   -- Reported EBITDA in 2014 lower than in 2013, due to still-
      difficult operating conditions and production stoppages to
      refurbish furnaces.

   -- EBITDA to recover significantly in 2015;

   -- Increased capex to refurbish furnaces and improve
      productivity and efficiency; and

   -- No dividends or acquisitions.

Based on these assumptions, S&P arrives at these credit measures
for Bormioli:

   -- FFO to debt of less than 10% in 2014 and 10%-12% in 2015;
   -- Debt to EBITDA above 5x in 2014 and 4.5x-5.0x in 2015; and
   -- Negative free cash flow in 2014 and 2015.

The negative outlook reflects S&P's view that we may downgrade
Bormioli over the next 12 months if it considers that its
profitability is not recovering in 2015, leading to credit metrics
not commensurate with the current ratings.  This could be as a
result of difficult trading conditions, or additional furnace
stoppages, beyond S&P's base-case forecasts.

S&P could downgrade Bormioli if, contrary to its base-case
scenario, the company credit's metrics do not recover in 2015.
Specifically, S&P could lower the ratings if adjusted FFO to debt
remained well below 12% and adjusted debt to EBITDA stayed above
5x on a sustained basis with no indication of a swift reversal.
In such a case, S&P would revise down its assessment of the
financial risk profile to "highly leveraged."

S&P could also consider a downgrade if liquidity weakened or if
Bormioli's shareholders adopted a more aggressive financial
policy, resulting in weaker credit measures.

S&P could revise the outlook to stable if the profitability trend
reversed in 2015, leading to adjusted FFO to debt of about 12% and
debt to EBITDA in the range of 4.0x-4.5x.  This could happen if
economic conditions in Europe improved, and if the company
increased its production efficiency, with no further furnace
stoppages or breakdowns.


UNIONE DI BANCHE: S&P Raises Rating on EUR300MM Notes From 'BB+'
----------------------------------------------------------------
Standard & Poor's Ratings Services said it has corrected by
raising to 'BBB-' from 'BB+' its issue rating on the EUR300
million callable step-up floating rate subordinated notes due 2018
(ISIN: XS0272418590) issued on Oct. 30, 2006, by Unione di Banche
Italiane (UBI Banca; formerly BPU Banca).  S&P has also removed
the UCO identifier from the rating on these notes.

On Sept. 9, 2013, UBI Banca offered to buy back its EUR300 million
callable step-up floating rate subordinated notes, and informed
the noteholders that the amount not bought back would become
senior unsecured debt on Oct. 30, 2013, through changes in the
notes' terms and conditions.  S&P understands the remaining amount
of the notes after the buy-back was completed ranks pari passu
with other senior unsecured debt instruments.  S&P understands
that all the other terms and conditions remained unchanged.  As
S&P was only recently made aware of the change to the notes' terms
and conditions, it did not take the relevant rating action at the
time of the change to the notes' terms and conditions.  The
nominal value of the notes still outstanding at the time of the
change in the notes' terms and conditions was EUR111.3 million.

S&P has also removed the UCO identifier from the rating on the
notes, where it was placed on Sept. 18, 2014, in light of its bank
hybrid capital criteria.  Since S&P now has become aware that the
notes are senior unsecured, they are no longer in scope of the
above-mentioned criteria.


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


LEOPARD CLO I: S&P Cuts Ratings on 2 Note Classes to 'CCC (sf)'
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered to 'CCC (sf)' from 'B-
(sf)' its credit ratings on Leopard CLO I B.V.'s class D-1 and D-2
notes.  At the same time, S&P has affirmed its ratings on the
class C, E-1, and E-2 notes.

The rating actions follow S&P's analysis of the transaction using
data from the trustee report dated Aug. 1, 2014 and the
application of S&P's relevant criteria.

"We conducted our cash flow analysis to determine the break-even
default rate (BDR) for each rated class of notes at each rating
level.  The BDR represents our estimate of the maximum level of
gross defaults, based on our stress assumptions, that a tranche
can withstand and still fully repay interest and principal to the
noteholders.  We gave credit to an aggregate collateral amount of
EUR30 million, used the reported weighted-average spread of 3.64%,
and the weighted-average recovery rates calculated in accordance
with our criteria for corporate collateralized debt obligations.
We applied various cash flow stresses using our standard default
patterns for each rating category assumed for each class of notes,
combined with different interest stresses as outlined in our
corporate CDO criteria," S&P said.

The class A and B notes have fully repaid since S&P's previous
review on Sept. 18, 2012.  Additionally, the class C notes have
amortized by about EUR17 million over the same period.  In S&P's
opinion, this increased the available credit enhancement for the
class C, D-1, and D-2 notes.

However, S&P notes that since its previous review, the decrease in
the portfolio's credit quality has negatively impacted the
transaction.  The proportion of assets that S&P rates in the 'CCC'
category ('CCC+', 'CCC', and 'CCC-') has also increased to 25%
from 19% of the total portfolio balance.

Following the deterioration of the pool's credit quality and the
portfolio's increased obligor concentration -- down to 14 from 41
obligors in S&P's previous review -- the scenario default rates
(SDRs) have increased at each rating level.  The SDR is the
minimum level of portfolio defaults that S&P expects each tranche
to be able to withstand at a specific rating level using CDO
Evaluator

S&P's cash flow analysis indicates that the class C notes are able
to sustain defaults at a 'AA+ (sf)' rating level.  Nevertheless,
the application of S&P's largest obligor default test, a
supplemental stress test S&P introduced in its corporate CDO
criteria, constrains its rating on the class C notes at its
current level.  S&P has therefore affirmed its 'BB+ (sf)' rating
on the class C notes.

The cost of the capital structure is now significantly higher than
for last review.  Despite the increase in credit enhancement, the
BDR for the class D-1 and D-2 notes has reduced.  S&P has
therefore lowered to 'CCC (sf)' from 'B- (sf)' its ratings on the
class D-1 and D-2 notes.

At the same time, S&P has affirmed its 'CCC- (sf)' ratings on the
class E-1 and E-2 notes, as they are undercollateralized and still
deferring interest payments.

Leopard CLO I is a cash flow collateralized loan obligation (CLO)
transaction that securitizes loans to speculative-grade corporate
firms.  The transaction closed on Jan. 9, 2003 and M&G Investment
Management Ltd. manages it.  Its reinvestment period ended in
Feb. 2008.

RATINGS LIST

Class                Rating
             To                 From

Leopard CLO I B.V.
EUR317.05 Million Asset-Backed Fixed- And Floating-Rate Notes

Ratings Lowered

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

Ratings Affirmed

C            BB+ (sf)
E-1          CCC- (sf)
E-2          CCC- (sf)


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


UTAIR: Russian Government Explores Rescue Options
-------------------------------------------------
ROS, citing RBC Daily, reports that the Russian government is
examining several options to save Utair airline, which is
struggling to settle accounts with contractors.

According to ROS, a source familiar with the discussion told the
news agency that two options are on the table: putting the carrier
under Aeroflot management which will streamline the route network
and aircraft park or issuing a large loan with a state guarantee.

The airline has piled up large debts worth hundreds of millions of
rubles, ROS discloses.  ROS relates that a top executive of one of
the largest Russian airports was quoted as saying the problems
arose due to the weakening of the national currency.  Utair
receives ruble-denominated revenue and pays for aircraft in
dollars, ROS notes.

The warning signs of the deteriorating situation appeared in
summer, ROS relays.  At the end of July, Utair announced its plans
to cut costs by RUB5 billion (approx. US$130 million), revise the
route network and technical maintenance plan, ROS recounts.

Its revenue reached RUB32.8 billion (approximately US$855
million), while its net profit amounted to RUB5.5 million
(approximately US$143,293) in the first half of 2014, ROS
discloses.  Long-term liabilities stood at RUB27.2 billion
(approximately US$709 million), while short-term liabilities
reached RUB 57bn (approximately US$1.5 billion), ROS discloses.

Utair is Russia's third biggest air carrier.  The airline operates
131 plane and 350 helicopters.


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


DOPRASTAV: Faces Financial Woes; Gains Protection From Creditors
----------------------------------------------------------------
CTK reports that Doprastav got into financial problems this year.

According to CTK, Doprastav gained court protection from creditors
in the spring already.

It is not yet clear whether the problems will influence, for
example, completion of motorway sections in which the company
takes part, CTK notes.

Doprastav is a builder based in the Slovak Republic.


VAHOSTAV-SK: Bratislava Court Launches Bankruptcy Proceeding
------------------------------------------------------------
The Slovak Spectator, citing the TASR newswire, reports that the
district court in Bratislava launched a bankruptcy proceeding
against Vahostav-SK over unpaid debts to its partners.

According to The Slovak Spectator, the company's spokesperson,
Tomas Halan, told TASR "Vahostav-SK has recently noticed several
proposals to launch a bankruptcy proceeding, submitted by the
creditors of the company, due to the unfavorable situation in the
Slovak construction sector."

He added that the company's management continues to settle the
disputes transparently and is in negotiations with creditors, The
Slovak Spectator relates.

Mr. Halan, as quoted by TASR, said "Simultaneously, it is looking
for ways to end the launched bankruptcy proceeding and continue in
its activities", The Slovak Spectator notes.

Vahostav is currently working on six stretches of highways, The
Slovak Spectator discloses.  In two cases it has asked to postpone
the deadline of the completion, which is currently under review by
the relevant authorities, The Slovak Spectator relays.

Vahostav-SK is a construction company based in the Slovak
Republic.  The company employs 1,300 people.


===============
S L O V E N I A
===============


AHA MURA: Creditors File EUR116.5 Million in Claims
---------------------------------------------------
SeeNews, citing state-owned news agency STA, reports that a total
of EUR116.5 million (US$150 million) in claims have been filed by
71 creditors in the bankruptcy proceedings against Aha Mura.

According to SeeNews, STA reported that the company's receiver has
accepted only EUR31.7 million in claims.

Aha Mura is a Slovenian clothing company.  The Company entered
bankruptcy in May.


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


NATIONAL ELECTRIC: To Cut Up to 200 Jobs at Saab Car Plant
----------------------------------------------------------
Anna Ringstrom at Reuters reports that cash-strapped China's
National Electric Vehicle Sweden said on Sept. 24 it would lay off
up to 200 staff at its Saab car plant in Sweden as production is
unlikely to resume anytime soon.

NEVS, which bought the bankrupt Swedish carmaker Saab in 2012,
halted already-low output in May because of a shortage of money,
Reuters recounts.  In August, it obtained protection from
creditors through a Swedish court while trying to secure funding,
Reuters relates.

"The ongoing discussions on collaboration and ownership structure,
which have not yet resulted in a binding agreement, indicate that
the decision for a start-up of production will take time," Reuters
quotes NEVS as saying in a statement.

It said the layoffs, due to lack of work, were a step in a
reorganization plan that the company's administrator would present
at a creditors' meeting on Oct. 8, Reuters notes.

NEVS has earlier said it was in talks with two unnamed car firms
to secure more money, that it has external debt of about
SEK400 million (US$56 million), and that it made a pretax loss
last year of SEK601 million on sales of SEK41 million, Reuters
relays.

                           About NEVS

National Electric Vehicle Sweden AB (NEVS) is a Swedish holding
company.  NEVS is majority owned by British Virgin Islands-
registered, Hong Kong-based, National Modern Energy Holdings
Ltd., an energy company with operations in China, Macau, and Hong
Kong.  NEVS bought bankrupt carmaker Saab in 2012.

On Aug. 29, 2014, NEVS convinced a Swedish court to grant it
creditor protection while it buys time to finalize negotiations
for funding.


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


KYIV CITY: S&P Lowers Long-Term Issuer Credit Ratings to 'CC'
-------------------------------------------------------------
Standard & Poor's Ratings Services lowered its long-term issuer
credit ratings on the Ukrainian City of Kyiv and its issue ratings
on Kyiv's debt to 'CC' from 'CCC' and placed them on CreditWatch
with negative implications.

As defined in EU CRA Regulation 1060/2009 (EU CRA Regulation), the
ratings on Kyiv are subject to certain publication restrictions
set out in Art. 8a of the EU CRA Regulation, including publication
in accordance with a pre-established calendar.  Under the EU CRA
Regulation, deviations from the announced calendar are allowed
only in limited circumstances and must be accompanied by a
detailed explanation of the reasons for the deviation.  In this
case, the reason for the deviation is the event described herein.

RATIONALE

The rating actions follow Kyiv's announcement of the proposed bond
restructuring, which might constitute a default under S&P's
criteria.

The ratings also take into account S&P's view of Ukraine's very
volatile and underfunded institutional framework and weak economy,
and Kyiv's management, which S&P now views as very weak.
Moreover, S&P considers Kyiv to have very weak financial
flexibility, weak budgetary performance, weak liquidity, a very
high debt burden, and high contingent liabilities.  The issuer
credit rating on Kyiv is at the same level as its stand-alone
credit profile.

CREDITWATCH

S&P intends to resolve the CreditWatch as soon as a final decision
on the bond restructuring is taken.

S&P will likely raise the ratings if the city avoids the announced
restructuring and starts repaying the bond on the first maturity
date of Oct. 6, 2014.

Should the debt restructuring proceed, S&P will lower the ratings
to 'SD' (selective default) and review the city's credit profile
after the transaction.

In accordance with S&P's relevant policies and procedures, the
Rating Committee was composed of analysts that are qualified to
vote in the committee, with sufficient experience to convey the
appropriate level of knowledge and understanding of the
methodology applicable.  At the onset of the committee, the chair
confirmed that the information provided to the Rating Committee by
the primary analyst had been distributed in a timely manner and
was sufficient for Committee members to make an informed decision.

After the primary analyst gave opening remarks and explained the
recommendation, the Committee discussed key rating factors and
critical issues in accordance with the relevant criteria.
Qualitative and quantitative risk factors were considered and
discussed, looking at track-record and forecasts.

The committee's assessment of the key rating factors is reflected
in the Ratings Score Snapshot above.

The chair ensured every voting member was given the opportunity to
articulate his/her opinion.  The chair or designee reviewed the
draft report to ensure consistency with the Committee decision.
The views and the decision of the rating committee are summarized
in the above rationale and outlook.

RATINGS LIST

Downgraded; CreditWatch/Outlook Action
                                        To                 From
Kyiv (City of)
Issuer Credit Rating            CC/Watch Neg/--    CCC/Stable/--
Senior Unsecured                CC/Watch Neg       CCC

Kyiv Finance PLC
Senior Unsecured                CC/Watch Neg       CCC


UKRAINIAN AGRARIAN: S&P Lowers CCR to 'CCC'; Outlook Stable
-----------------------------------------------------------
Standard & Poor's Ratings Services said it lowered its local
currency long-term corporate credit rating on Ukraine-based
farming group Ukrainian Agrarian Investments S.A. (UAI) to 'CCC'
from 'B-'.  Simultaneously, S&P affirmed its 'CCC' foreign
currency long-term corporate credit rating on UAI.  The outlook on
both ratings is stable.

The lowering of the local currency long-term rating on UAI
reflects S&P's decision to equalize its foreign and local currency
ratings.  S&P thinks that, with UAI's average debt-to-EBITDA ratio
of close to 5x, all of the group's obligations are likely to be
equally disadvantaged from a liquidity perspective under a
sovereign default scenario.

S&P regards UAI as exposed to high country, transfer, and currency
risks, because its assets are concentrated in Ukraine (foreign
currency CCC/Stable/C, local currency B-/Stable/B, Ukraine
national scale uaBB+).

S&P consequently caps the foreign and local currency ratings on
UAI based on its 'CCC' transfer and convertibility (T&C)
assessment on Ukraine because S&P thinks the group's ability to
service its foreign currency debt obligations would be constrained
if the government implemented restrictions on foreign currency
conversion and foreign currency cross-border transactions in the
event of a sovereign default.  S&P considers that UAI's accessible
liquidity sources in such a stress scenario would be insufficient
to cover its liquidity needs, including its short-term debt
obligations and working-capital requirements.

Still, S&P has left its assessment of UAI's 'b-' stand-alone
credit profile (SACP) unchanged.  S&P considers UAI's stand-alone
credit quality, before taking into account potential negative
sovereign intervention, to be higher than that of the sovereign,
as our SACP on the group reflects.

"We base our SACP on UAI on its "vulnerable" business risk
profile, primarily factoring in our view of the very high risk of
doing business in Ukraine, as well as the plunge in group EBITDA
to about US$10 million in 2013, from about US$50 million in 2012.
This steep erosion in profits followed sharp drops in prices after
a strong harvest in North America affecting supply and demand.
Weak crop yields owing to wet weather conditions delayed both the
planting and the harvesting periods, taking a toll on the group's
production that further exacerbated the EBITDA slide," S&P said.

"In our SACP, we also take into account the UAI's "aggressive"
financial risk profile, owing to our expectation that our
supplementary ratio of EBITDA interest coverage for the group will
be higher than 2x.  Our core debt-to-EBITDA ratio slightly exceeds
the 4x-5x range under our five-year average (2012-2016), with a
high of more than 8x at year-end 2013, but we anticipate a quick
recovery to below 5x as early as 2014.  We further expect that
UAI's operating performance will rebound in 2014 on markedly
enhanced crop yields and likely more favorable weather conditions.
We think EBITDA will top US$25 million although cereals prices
will likely fall further during the year.  This is because we
expect much enhanced yields amid favorable weather conditions,"
S&P added.

The stable outlook on UAI reflects S&P's stable outlook on
Ukraine.

Under S&P's methodology and based on its 'b-' SACP on UAI, S&P
could raise the ratings if it raised the ratings on Ukraine and it
saw lower operating risks in Ukraine.  Any rating upside would be
also hinge on UAI's debt to EBITDA dropping below 5x at year-end
and EBITDA significantly recovering from the 2013 trough.

S&P could lower the ratings on UAI if it lowered its ratings on
Ukraine and revised down its T&C assessment.  However, a sovereign
downgrade would not automatically result in a negative rating
action on UAI if it showed resilience to country-specific factors,
including the risk of stricter currency restrictions.  Major
operating setbacks due to extreme weather conditions, or
additional pronounced drops in crop prices, could also trigger
liquidity troubles and prompt a negative rating action, in S&P's
view.


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


AUSTIQUE: In Administration, FC Fund Buys Firm
----------------------------------------------
Jill Geoghegan at Drapers reports that the company assets of
womenswear independent Austique have been sold to FC Fund
Managers, after the two-store London business went into
administration.

The 10-year old retailer, which has stores in Notting Hill and
Chelsea, appointed Asher Miller -- asher@drpartners.com -- and
Henry Lan -- henry@drpartners.com -- of David Rubin & Partners as
joint administrators on September 9, according to Drapers.  A sale
of the business had previously been sought in August but it was
deemed not possible "for a solvent sale to happen", triggering the
administration, the report relates.

Its stock and stores were sold on September 19 to FC Fund
Managers, the investment firm headed by restructuring specialist
Jason Granite -- jason.granite@fcfundmanagers.com -- that took
over Internacionale before it went into administration in
February, the report notes.

The report discloses that the Notting Hill store at 79-81 Ledbury
Road closed at the end of August but the Chelsea store at 330
King's Road continues to trade, with FC Fund Managers reportedly
in discussions with staff about its future.

Mr. Miller told Drapers there are approximately 100 creditors,
many of which are suppliers, and they are owed about GBP500,000 in
total.  Mr. Miller suspects the creditors' recovery on the debt
will be "limited," the report notes.

Austique stocks premium labels such as Goat, MiH Jeans and
Christophe Sauvat, alongside its eponymous own label.

The business was founded by Katie Canvin, who now runs unrelated
lingerie brand Cheek Frills.  Canvin stepped back from the day-to-
day running of the business in January and her management took
over, led by managing director Rachel Morris.


EUROSAIL-UK 2007-2NP: S&P Affirms B- Rating on Class E1c Notes
--------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its credit ratings on
the class A2, A3, M1, C1a, D1, and E1c notes in Eurosail-UK 2007-
2NP PLC.  At the same time, S&P has affirmed and removed from
CreditWatch positive its ratings on the class B1 notes.

The affirmations follow S&P's credit and cash flow analysis of
June 2014 information and the application of its relevant
criteria.

In the Dec. 2012 investor report, the servicer (Acenden Ltd.)
updated how it reports arrears to include amounts outstanding,
delinquencies, and other amounts owed.

Other amounts owed include, among other items, arrears of fees,
charges, costs, ground rent, and insurance.  Delinquencies include
principal and interest arrears on the mortgages, based on the
borrowers' monthly installments.  Amounts outstanding are
principal and interest arrears, after payments by borrowers are
first allocated to other amounts owed.

In this transaction, the servicer first allocates any arrears
payments to other amounts owed, then interest and principal
amounts.  From a borrowers' perspective, the servicer first
allocates any arrears payments to interest and principal amounts,
and then to other amounts owed.  This difference in the servicer's
allocation of payments for the transaction and the borrower,
results in amounts outstanding being greater than delinquencies.

The pool factor (the outstanding collateral balance as a
proportion of the original collateral balance) in this transaction
is 45.62%.  Acenden references the level of amounts outstanding to
arrive at the 90+ days arrears trigger.  The level of 90+ days
amounts outstanding (including repossessions) has been rising and
is at 24.59%.  Total amounts outstanding have increased,
representing 33.52% of the pool, up from 25.81% in March 2012.

The notes in this transaction amortize sequentially, as the pro
rata conditions are not satisfied.  Amounts outstanding continue
to increase and with cumulative losses at 3.34% (the threshold is
1.25%), it is very likely that the transaction will continue
paying principal sequentially.  S&P has incorporated this
assumption in its cash flow analysis.  This transaction benefits
from increased credit enhancement compared with S&P's last review,
due to a nonamortizing reserve fund and the sequential
amortization.

S&P lists its weighted-average foreclosure frequency (WAFF) and
weighted-average loss severity (WALS) assumptions at each rating
level below:

Expected credit
                    WAFF (%)            WALS (%)          loss (%)
AAA                 42.70               55.43             23.67
AA                  34.65               48.64             16.86
A                   27.79               38.60             10.73
BBB                 22.91               32.74              7.50
BB                  17.37               28.13              4.89
B                   14.86               24.57              3.65

S&P's current WAFF assumptions have increased marginally, because
it applied a higher arrears projection (3.30% in the 90+ days
arrears bucket) than in its previous review.  S&P did so because
the transaction has underperformed its U.K. nonconforming
residential mortgage-backed securities (RMBS) index.  S&P's WALS
assumptions have increased because it expects potential losses to
be higher, given the servicer's method of allocation of payments
of other amounts owed for the transactions.

The increase in expected losses is offset by the increase in
available credit enhancement.  Based on the results of S&P's cash
flow analysis, it has affirmed its ratings on the class A2, A3,
M1, C1a, D1a, D1c, and E1c notes.

On May 14, 2014, S&P placed on CreditWatch positive its ratings on
the class B1a and B1c notes, following its upgrade of Danske Bank
A/S--the transaction account provider.  However, taking into
account the results of S&P's credit analysis, the adjustments for
other amounts owed, and the fact that the liquidity facility fees
have recently increased, the class B1a and B1c notes only achieve
'A- (sf)' ratings.  S&P has therefore affirmed and removed from
CreditWatch positive its 'A- (sf)' ratings on the class B1a and
B1c notes.

The bank account is not in line with S&P's current counterparty
criteria.  Accordingly, S&P's ratings on the notes in this
transaction are capped at its 'A' long-term issuer credit rating
(ICR) on Danske Bank.

S&P's credit stability analysis for this transaction indicates
that the maximum projected deterioration that it would expect at
each rating level over one and three-year periods, under moderate
stress conditions, is in line with S&P's credit stability
criteria.

This transaction is a U.K. nonconforming RMBS transaction,
originated by Southern Pacific Mortgage Ltd., GMAC Residential
Funding Co. LLC, Preferred Mortgages Ltd., and London Mortgage
Company.

RATINGS LIST

Eurosail-UK 2007-2NP PLC
EUR480.7 mil, œ267.575 mil mortgage-backed floating-rate notes and
an overissuance excess spread backed floating-rate notes
                                    Rating
Class           Identifier          To                From
A2a             29881AAD2           A (sf)            A (sf)
A2c             29881AAF7           A (sf)            A (sf)
A3a             29881AAG5           A (sf)            A (sf)
A3c             29881AAJ9           A (sf)            A (sf)
M1a             29881AAK6           A (sf)            A (sf)
M1c             29881AAM2           A (sf)            A (sf)
B1a             29881AAN0           A- (sf)      A- (sf)/Watch Pos
B1c             29881AAQ3           A- (sf)      A- (sf)/Watch Pos
C1a             29881AAR1           BBB (sf)          BBB (sf)
D1a             29881AAU4           B (sf)            B (sf)
D1c             29881AAW0           B (sf)            B (sf)
E1c             29881AAY6           B- (sf)           B- (sf)


EUROSAIL-UK 2007-1NC: S&P Affirms 'CCC' Rating on Class FTc Notes
-----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its credit ratings on
all classes of notes in Eurosail-UK 2007-1NC PLC.

The affirmations follow S&P's credit and cash flow analysis of
June 2014 information and the application of its relevant
criteria.

In the Dec. 2012 investor report, the servicer (Acenden Ltd.)
updated how it reports arrears to include amounts outstanding,
delinquencies, and other amounts owed.

Other amounts owed include, among other items, arrears of fees,
charges, costs, ground rent, and insurance.  Delinquencies include
principal and interest arrears on the mortgages, based on the
borrowers' monthly installments.  Amounts outstanding are
principal and interest arrears, after payments by borrowers are
first allocated to other amounts owed.

In this transaction, the servicer first allocates any arrears
payments to other amounts owed, then interest and principal
amounts.  From a borrowers' perspective, the servicer first
allocates any arrears payments to interest and principal amounts,
and then to other amounts owed.  This difference in the servicer's
allocation of payments for the transaction and the borrower,
results in amounts outstanding being greater than delinquencies.

The pool factor (the outstanding collateral balance as a
proportion of the original collateral balance) in this transaction
is 36.43%.  Acenden references the level of amounts outstanding to
arrive at the 90+ days arrears trigger of 22.50%.  The level of
90+ days amounts outstanding (including repossessions) has been
rising and is at 45.31%. Total amounts outstanding have increased,
representing 54.65% of the pool, up from 43.04% in Dec. 2011.

The notes in this transaction amortize sequentially, as the pro
rata conditions are not satisfied.  Amounts outstanding continue
to increase and with cumulative losses at 4.86% (the threshold is
1.50%), it is very likely that the transaction will continue to
pay sequentially.  S&P has incorporated this assumption in its
cash flow analysis.  This transaction benefits from increased
credit enhancement compared with our last review, due to a
nonamortizing reserve fund and the sequential amortization.

S&P lists its weighted-average foreclosure frequency (WAFF) and
weighted-average loss severity (WALS) assumptions at each rating
level below:

Expected credit
                    WAFF (%)            WALS (%)         loss (%)
AAA                 57.14               55.55              31.74
AA                  50.34               49.93              25.14
A                   42.41               40.83              17.32
BBB                 37.36               35.80              13.37
BB                  31.49               32.03              10.09
B                   28.23               28.92               8.16

S&P's current WAFF assumptions have increased marginally, because
it applied a higher arrears projection (5.73% in the 90+ days
arrears bucket) than in S&P's previous review.  S&P did so because
the transaction has underperformed its U.K. nonconforming
residential mortgage-backed securities (RMBS) index.  S&P's WALS
assumptions have increased because it expects potential losses to
be higher, given the servicer's method of allocation of payments
of other amounts owed for the transactions.

Furthermore, in March 2014, the liquidity facility provider made a
claim for increased costs of 0.48% per year.  S&P has incorporated
the increased costs in its cash flow analysis.

The increases in expected losses and liquidity fees are offset by
the increase in available credit enhancement.  Based on the
results of S&P's cash flow analysis, it has affirmed its ratings
on the class A3, B1, and C1a notes.

S&P's cash flow modeling shows that the class D1, E1, and FTc
notes miss interest payments or fail to repay principal by the
final legal maturity date under a 'B' stress scenario.

Payment of interest and repayment of principal on the FTc notes
are wholly reliant on the availability of excess spread.  Although
excess spread has increased over recent quarters, (averaging over
2% on an annualized basis), historically, the transaction has
witnessed severe reserve fund draws between 2009 and 2011, during
which the reserve fund level was zero.  Based on that, coupled
with the results of S&P's credit analysis and its treatment of
other amounts owed, S&P has affirmed its 'B- (sf)' ratings on the
class D1 and E1 notes, and its 'CCC- (sf)' rating on the class FTc
notes.

The swap counterparty documentation is not in line with S&P's
current counterparty criteria.  Accordingly, S&P's ratings on the
notes in this transaction are capped at 'A+', which is one notch
above S&P's 'A'long-term issuer credit rating on Barclays Bank
PLC.

S&P's credit stability analysis for this transaction indicates
that the maximum projected deterioration that it would expect at
each rating level over one and three-year periods, under moderate
stress conditions, is in line with S&P's credit stability
criteria.

This transaction is a U.K. nonconforming RMBS transaction,
originated by Southern Pacific Mortgage Ltd., Preferred Mortgages
Ltd., London Mortgage Company, London Personal Loans Ltd., and
Southern Pacific Personal Loans Ltd.

RATINGS LIST

Eurosail-UK 2007-1NC PLC
EUR552.15 mil, GBP357.3 mil mortgage-backed floating-rate notes,
excess-spread-backed floating-rate notes
                                    Rating
Class             Identifier        To                  From
A3a               298800AG8         A+ (sf)             A+ (sf)
A3c               298800AJ2         A+ (sf)             A+ (sf)
B1a               298800AL7         BBB (sf)            BBB (sf)
B1c               298800AN3         BBB (sf)            BBB (sf)
C1a               298800AP8         BB (sf)             BB (sf)
D1a               298800AS2         B- (sf)             B- (sf)
D1c               298800AU7         B- (sf)             B- (sf)
E1c               298800AW3         B- (sf)             B- (sf)
FTc               298800AY9         CCC (sf)            CCC (sf)


KPM UK: Alan Bradstock Appointed as Administrator
-------------------------------------------------
Eco City Vehicles PLC on Sept. 24 provided an update regarding KPM
UK Taxis Plc and One80 Limited.

Further to prior announcements Alan Bradstock -- asb@aabrs.com --
of Accura Accountants Business Recovery Turnaround Limited was
appointed as administrator of KPM and Robert Croxen --
robert.croxen@kpmg.co.uk -- and Colin Haig --
colin.haig@kpmg.co.uk -- both of KPMG LLP were appointed as
administrators of One80 on Sept. 24.

The Directors of ECV continue to evaluate the impact on the Group
of the appointment of administrators to its two principal
subsidiaries.


NEWCASTLE BUILDING: Fitch Affirms Long-Term IDR at 'BB+'
--------------------------------------------------------
Fitch Ratings has upgraded Yorkshire Building Society's
(Yorkshire) Long- and Short-term Issuer Default Ratings (IDR) and
Viability Rating (VR) to 'A-'/'F1'/'a-' from 'BBB+'/'F2'/'bbb+'
and Skipton Building Society's (Skipton) Long- and Short-term IDRs
and VR to 'BBB'/'F2'/'bbb' from 'BBB-'/'F3'/'bbb-'.  The Outlook
of Skipton's IDR has been revised to Positive from Stable.

Fitch has also upgraded Leeds Building Society's (Leeds) Short-
term IDR to 'F1' from 'F2'.  Fitch has affirmed the Long-term IDRs
of Coventry Building Society (Coventry) at 'A'; Leeds at 'A-';
Principality Building Society (Principality) at 'BBB+' and
Newcastle Building Society (Newcastle) at 'BB+'.  Except for
Skipton, the Outlooks on all IDRs are Stable.

The Support Ratings (SR) and Support Rating Floors (SRF) of all
these building societies have been affirmed at '5' and 'No Floor',
respectively.

The six building societies are all mutual mortgage lenders in the
UK: their lending is heavily focused on prime residential mortgage
loans and their funding is mostly obtained from customers in the
form of saving deposits.  Over the past year, they have all
benefited from cheaper funding costs, from a gradual improvement
in the UK operating environment, and from a recovery in the
housing market.

The Long-term IDRs of the societies are all driven by the
intrinsic strength, as indicated by their VRs, and range from 'A'
for Coventry to 'BB+' for Newcastle.  In Fitch's opinion,
variations in risk appetite, asset quality and management of net
interest margins are the key rating differentiators between these
societies.

Although profit maximization is not their goal, societies have all
reported an improvement in performance, albeit from a low base.
Profitability therefore remains moderate in most cases, given low
business/product diversification.  Improved performance has
stemmed mostly from a marked reduction in customer and wholesale
funding costs, itself driven largely by the secondary effects of
the government's funding for lending scheme (FLS).  As a result
net interest margins have widened across the sector despite a
continued low base rate environment.

Wider margins have been complemented by volume growth and lower
loan impairment charges, due to improving confidence in the
sector, falling unemployment, and rising house prices.  On the
other hand, non-interest expenses have seen pressure from the
increasing costs of compliance.  New regulations, in the form of
the Retail Distribution Review and the Mortgage Market Review, are
likely to continue to have a negative impact on both revenues and
costs.

Liquidity at all these building societies has built up following
the crisis and is generally seen as a rating strength.  Liquidity
in the system (whether on-balance sheet or through the extensive
contingency liquidity facilities made available by the Bank of
England) is deemed to be strong.  The Short-term IDRs of the
societies have therefore been assigned at the higher of the two
options available under Fitch's correspondence table under its
rating criteria.

Capital ratios are sound and improving.  Most of these societies
continue to report under the standardized method for credit risk
and thus allocate ample capital against residential mortgage
loans.  Leverage at these societies is therefore also generally
viewed as moderate.

YORKSHIRE BUILDING SOCIETY

KEY RATING DRIVERS - IDRs AND VR

Yorkshire's rating upgrade takes into account its diminishing risk
profile as it progresses with the consolidation of the various
acquisitions it has made since the crisis.  The acquisitions of
Chelsea Building Society (2010), Norwich and Peterborough Building
Society (2011) and the savings and mortgage business of Egg
(October 2011) raised the society's operational risk and costs,
but Fitch believes that control over this risk is now adequate.

The society's risk appetite is fairly conservative, with a focus
on low-risk prime residential mortgage lending and while its book
contains a small exposure to commercial real estate (CRE) and
specialist loans, the agency considers the risk on these as
manageable.  Yorkshire is more exposed than some of its higher-
rated peers to higher loans-to-values (LTVs) and while its arrears
and impaired loans ratio have improved considerably over the past
four years, they have stabilized slightly above those of its
higher-rated peers.

Profitability has remained resilient and has recently been
improving in line with the market, although part of the
improvement has consisted of one-off items, including the release
of fair value reserves (2013) and gains on the buyback of its debt
(2012).  Improving profitability has boosted its capitalization,
which Fitch considers as sound, both on a risk-weighted and on a
non-risk weighted basis.

Funding and liquidity have a high influence on the society's IDRs
and VR.  Its liquidity levels remains sound with high-quality
assets primarily consisting of cash placed at the Bank of England.
Although predominantly customer-funded, the society has also
accessed the FLS and its access to wholesale funds remains solid.

RATING SENSITIVITIES - IDRs AND VR

Yorkshire's ratings are sensitive to it maintaining a low-risk
appetite.  Should there be a material increase in higher LTV
lending or significantly higher commercial lending, the ratings
could be downgraded.  Maintaining solid capitalization and a sound
funding and liquidity profile are also key to current ratings.

COVENTRY BUILDING SOCIETY

KEY RATING DRIVERS - IDRs AND VR

Coventry is the third-largest building society in the UK.  Its
low-risk appetite, driven by strong underwriting standards and its
resulting strong asset quality have a high influence on its IDRs
and VR.  Its focus has remained on low-LTV lending, with no
appetite for specialist mortgage loans and CRE loans.
Consequently, impaired loans are low and impairment charges
consistently small.

Fitch views Coventry's capitalization as strong, given its
negligible exposure to CRE and historically low impairment losses.
Leverage, which became high as a result of pressure from strong
loan growth, has reduced following the recent issue of its
Additional Tier 1 notes and is now deemed to be more comfortable.
While the society is at risk from regulatory changes in leverage
requirements and calculations given the recently announced review
of the leverage ratio framework by the UK Financial Policy
Committee, Fitch believes that Coventry would be reasonably able
to manage capital and to build up capital internally, if required.

While profitability has strengthened recently, Fitch expects it to
stabilise at more moderate levels in the medium-term.  The ability
to control costs and loan impairment charges is a vital component
of the society's low-LTV and -margin business model.

Coverage of impaired loans is low by sector standards and exposes
the society to negative asset price movements, although Fitch
recognizes that this is partly offset by the low average LTV
nature of its assets.

RATING SENSITIVITIES - IDRs AND VR

The Stable Outlook reflects Fitch's view that neither an upgrade
nor a downgrade in the IDRs is envisaged in the short- to medium-
term.  Fitch believes that upside to the VR is generally
constrained in the 'a' category because of its undiversified
business model, the high indebtedness of UK households and its
fairly small franchise.  The ratings could be downgraded should
there be deterioration in asset quality, particularly in the non-
prime residential loan segment to which it is exposed (47% of FCC
at 1H14) or if the society increases its risk appetite,
particularly into higher-LTV loans.

SKIPTON BUILDING SOCIETY

KEY RATING DRIVERS - IDRs AND VR

The upgrade in Skipton's ratings reflects the strongly improved
performance of its core mortgage and savings business, which Fitch
believes to be sustainable due to structural changes in the
composition of its loan book, coupled with its reduced risk
appetite for specialist and CRE loans.  The society's growth focus
is in its prime residential, low-LTV loan book.

Asset quality continues to improve.  While Skipton continues to
have exposure in CRE (6.6% of the loan book at end-1H14), higher-
risk specialized lending (self-certified, sub-prime or near prime
sectors), a fairly large interest-only book, and high LTV legacy
loans, Fitch believes that the risk arising from a potential
deterioration in asset quality is manageable.  Overall risk has
also been reduced through the sale of parts of its investment
portfolio.

The society's performance continues to be supported by the strong
profits reported by its estate agency subsidiary, Connells, whose
business has continued to generate capital for the society
throughout the crisis.  This business is a possible strong source
of capital for the society in case of need.

Liquidity remains sound and buffers are composed of quality
assets.  Funding has also improved with the removal of its
reliance on short-term wholesale funding and a stronger focus on
its UK retail franchise.

Fitch views Skipton's strengthened capital level as satisfactory
and believes that it could be further improved by end-2014 through
divestments.  The society's reported leverage ratio was 5.6% in
1H14, representing a satisfactory buffer above expected minimum
regulatory requirements.

RATING SENSITIVITIES - IDRs AND VR

The Positive Outlook on Skipton's IDR reflects Fitch's view that
as profitability from its mortgage and savings business continues
to improve, the IDR could be upgraded.  However, this is to be
viewed in conjunction with its stated continued low-risk appetite.
The ratings could also be upgraded once asset quality improves as
legacy operations continue to run off.

On the other hand, negative rating action could be taken should
pressure materialize on capital or funding and liquidity or as a
result of an unexpected material deterioration in the specialist
book following a rise in base rates.

LEEDS BUILDING SOCIETY

KEY RATING DRIVERS - IDRs AND VR

Sound profitability and strong internal capital generation have a
strong influence on the IDRs and VR of Leeds.  These are
underpinned by sound interest rate management relative to peers
and the composition of its loan book, which has a stronger
presence than average in higher- yielding but higher-risk sectors
such as shared ownership and buy-to-let and an appetite for
lending at higher LTVs.

Historically, profitability has been boosted by the society's
ability to retain a large proportion of its mortgage book on its
administered rate, which remains one of the highest in the sector,
although Fitch expects retention rates to fall as competition
among lenders increases.  Cost efficiency remains strong, driven
by stronger-than-average revenue generation and a low fixed cost
base, which provides a buffer against higher impairment charges.

A sound funding and liquidity profile also has a high influence on
the society's ratings.  Funding is mostly in the form of customer
deposits although the society also has access to wholesale funds.
On-balance sheet liquidity buffer is sound and is composed of
quality assets.

As a result of its exposure to higher-yielding loans, loan
impairment charges as a proportion of gross loans are higher than
the building society peers' in this review, but are still low
compared with many European banks.  They are mainly driven by its
legacy mortgage and CRE portfolios.  The society's exposure to CRE
(50% of Fitch Core Capital at 1H14) continues to act as a drag on
profitability.  Although the book is in wind-down, Fitch expects
loan impairment charges on this portfolio to continue to account
for a high proportion of the total given the slow recovery of the
sector.

Fitch views capitalization as satisfactory, particularly as
concentration in its CRE book is diminishing.  Nonetheless some
concentration remains.  Leverage is low, with a reported tangible
common equity to tangible assets ratio of 5.5% at end-1H14

RATING SENSITIVITIES - IDRs AND VR

Given their importance to the IDRs and VR of Leeds, the ratings
are primarily sensitive to a weakening of earnings, most likely a
result of a deterioration of asset quality, or to a decrease in
funding and liquidity.  A rise in negative equity mortgage loans
or exposure to interest-only mortgages could also put the ratings
under pressure.

PRINCIPALITY BUILDING SOCIETY

KEY RATING DRIVERS - IDRs AND VR

Principality's ratings reflect the generally low overall risk
profile of the society's assets, which, however, continue to
encompass a modest appetite for loans backed by CRE and second-
charge mortgages.  Despite being higher risk, Fitch considers the
book to be of generally sound quality, underpinned by performing
prime residential loans.  Nonetheless, some vulnerability remains
in the CRE and second-charge books.

The society's ratings also reflect its satisfactory earnings and
capitalization and a sound funding and liquidity profile.

The society's profitability has improved in line with the sector.
However, while spreads on prime first-charge residential mortgages
have remained wide, spreads in the second-charge mortgage loan
book are reducing due to tougher competitive pressure.
Profitability continues to be impacted by the CRE book, which only
became marginally profitable in 1H14 after two years of losses as
a result of higher impairment charges.

Fitch views the society's liquidity and funding as comfortable,
with strong access to contingent liquidity resources and some
diversification, and little reliance on wholesale markets.
Capitalization is satisfactory, but is considered marginally
weaker than some of its peers' in the context of higher risk in
the second-charge book, concentrations present in the CRE book and
its fairly small absolute size.

RATING SENSITIVITIES - IDRs AND VR

Upside potential in the society's ratings is limited given its
small franchise, which limits its pricing power, its fairly
undiversified business model, and its presence in the higher-risk
segments.  Ratings would be negatively affected, on the other
hand, by weaker capitalization or by an increased risk appetite.

NEWCASTLE BUILDING SOCIETY

KEY RATING DRIVERS - IDRs AND VR

Newcastle has the smallest franchise of its peer group.  Its
ratings are driven by its current limited ability to raise
additional revenues to absorb unexpected losses, low absolute
level of equity and a fairly large exposure to CRE, particularly
when viewed as a proportion of Fitch Core Capital.  The ratings
also factor in a low-risk and performing core residential mortgage
book, the revenue diversification provided by the society's third-
party savings management business and a solid liquidity profile.

Underlying profitability has been weak since the crisis due
largely to significant loan impairment charges and a higher-than-
average exposure to housing association loans (1H14: 27% of gross
loans), which although low-risk, are low-yielding.  In line with
the sector, the operating profitability of its core mortgage
business has been boosted by a widening of net interest margins,
driven by the secondary effects of the government's FLS.

Loan impairment charges have been falling as a proportion of gross
assets since 2011 due to the high quality of its prime residential
mortgage book and a strong recent economic and property market
recovery in the UK.  Although the society's exposure to CRE loans
has reduced noticeably in recent years, it remains concentrated
and accounts for a significant proportion of Fitch Core Capital
(145%).  Fitch therefore believes that a large CRE default could
have a disproportionate effect on the society's capitalization,
which reports otherwise satisfactory risk-weighted ratios.
Nonetheless, Fitch expects impairment charges to remain manageable
in the medium-term while recent growth in mortgage lending,
following a number of years of contraction, should lead to a
modest improvement in profitability.

Newcastle's Solutions business, which manages retail deposit bases
on behalf of other financial institutions, continues to perform
well, providing an element of revenue diversification away from
the society's traditional member business, which has posted a loss
every year since the crisis.  Although the Solutions business been
negatively affected by recent low demand for retail funding, Fitch
expects revenues to grow again as FLS is withdrawn.

Newcastle has the lowest loan/deposit ratio of its peer group.
While its overall funding and liquidity profile is considered
solid, its access market access is considered weaker than peers'.

RATING SENSITIVITIES - IDRs AND VR

The society's ratings could be upgraded should it materially
reduce its legacy exposures and if internal capital generation
increases, but the society's small franchise means the extent of
any upgrade will be modest.  The ratings, however, will be under
pressure if increased profitability is achieved through an
increased risk appetite or if capitalization weakens, for example,
due to a notable weakening of asset quality.

KEY RATING DRIVERS AND SENSITIVITIES - SUPPORT RATING AND SUPPORT
RATING FLOOR

The SRs and SRFs of all the building societies included in this
commentary have been affirmed at '5' and 'No Floor', indicating
that Fitch believes that while sovereign support is possible for
each individual building society, in case of need, it is unlikely.
This view is derived from the societies' low domestic systemic
importance, combined with our view that they could be resolved, if
needed, using existing legislation.  This assessment is unlikely
to change.

SUBORDINATED DEBT AND HYBRID RATINGS - RATING DRIVERS AND
SENSITIVITIES

The ratings of all building societies' subordinated debt and
hybrid securities are notched down from their issuers' respective
VRs, reflecting a combination of Fitch's assessment of their
incremental non-performance risk relative to their VRs (up to
three notches) and assumptions around loss severity (one or two
notches).  The ratings are mainly sensitive to the same
considerations that might affect their VRs.

All the UK societies' permanent interest-bearing securities (PIBS)
are rated four notches below their respective VRs, comprising two
notches for their deep subordination and two notches for
incremental non-performance.

Dated subordinated notes are rated one notch below their VRs,
reflecting their subordination.

Yorkshire's outstanding GBP25.6m 13.5% subordinated contingent
convertible Tier 2 notes (due 1 April 2025,) are notched down
twice from the society's VR to reflect a low conversion trigger
(5% regulatory core Tier 1 capital) compared with the bank's
current Core Tier 1 ratio (13.9% at end-2013).  Fitch therefore
views the incremental non-performance risk of the instrument as
minimal relative to the VR.

Coventry's AT1 securities are rated five notches below the
society's VR, comprising two notches for loss severity to reflect
the conversion into core capital deferred shares (CCDS) on breach
of a 7% CRD IV common equity Tier 1 (CET1) ratio, and three
notches for non-performance risk, reflecting the instruments'
fully discretionary interest payment.  The rating is primarily
sensitive to changes in Coventry's VR, but is also sensitive to a
change in capital management or flexibility or an unexpected shift
in regulatory buffers, for example.

The rating actions are as follows:

Yorkshire Building Society:

Long-term IDR upgraded to 'A-' from 'BBB+'; Outlook Stable
Short-term IDR upgraded to 'F1' from 'F2'
Viability Rating upgraded to 'a-' from 'bbb+'
Support Rating affirmed at '5'
Support Rating Floor affirmed at 'No Floor'
Senior unsecured debt and programme rating upgraded to 'A-'/ 'F1'
from 'BBB+' / 'F2'
Subordinated dated debt upgraded to 'BBB+' from 'BBB'

PIBS: upgraded to 'BB+' from 'BB'
Convertible subordinated notes upgraded to 'BBB' from 'BBB-'
Coventry Building Society:
Long-term IDR affirmed at 'A'; Outlook Stable
Short-term IDR affirmed at 'F1'
Viability Rating affirmed at 'a'
Support Rating affirmed at '5'
Support Rating Floor affirmed at 'No Floor'
Senior long-term and short-term unsecured EMTN programme and notes
affirmed at 'A'/'F1'
Subordinated perpetual notes (PIBS): affirmed at 'BBB-'
Additional tier 1 securities: affirmed at 'BB+'

Skipton Building Society:
Long-term IDR: upgraded to 'BBB' from 'BBB-' ; Outlook revised to
Positive from Stable
Short-term IDR: upgraded to 'F2' from 'F3'
Viability Rating: upgraded to 'bbb' from 'bbb-'
Support Rating affirmed at '5'
Support Rating Floor affirmed at 'No Floor'
Subordinated dated debt: upgraded to 'BBB-' from 'BB+'
PIBS: upgraded to 'BB-' from 'B+'
Leeds Building Society:
Long-term IDR: affirmed at 'A-' ; Outlook Stable
Short-term IDR: upgraded to 'F1' from 'F2'
Viability Rating : affirmed at 'a-'
Support Rating affirmed at '5'
Support Rating Floor affirmed at 'No Floor'
Senior long-term unsecured EMTN programme and notes: affirmed at
'A-'
Senior short-term unsecured EMTN programme and notes: upgraded to
'F1' from 'F2'
PIBS: affirmed at 'BB+'
Subordinated dated debt: affirmed at 'BBB+'
Principality Building Society:
Long-term IDR affirmed at 'BBB+'; Outlook Stable
Short-term IDR affirmed at 'F2'
Viability Rating affirmed at 'bbb+'
Support Rating affirmed at '5'
Support Rating Floor affirmed at 'No Floor'
Senior unsecured debt and programme rating affirmed at 'BBB+'/'F2'
Subordinated dated debt: affirmed at 'BBB'
PIBS: affirmed at 'BB'
Newcastle Building Society:
Long-term IDR affirmed at 'BB+'; Outlook Stable
Short-term IDR affirmed at 'B'
Viability Rating affirmed at 'bb+'
Support Rating affirmed at '5'
Support Rating Floor affirmed at 'No Floor'
Senior long-term and short-term unsecured EMTN programme and notes
affirmed at 'BB+'/'B'
Subordinated Notes: affirmed at 'BB'


PHONES 4U: 15 Jobs Lost in Aberdeen and Elgin Amid Administration
-----------------------------------------------------------------
Evening Express reports that a total of 15 people in the North-
east have lost their jobs as a result of a major phone retailer
going into administration.

Phone retailer Phones 4U has been forced to shut 362 stores across
the UK, according to Evening Express.

In Aberdeen, 12 jobs have been lost due to the closure of the
company's stores on Union Street and in the St Nicholas Center,
the report notes.

The report relates that a further three people have been made
redundant at the firm's Elgin branch.

Four jobs will be transferred from Phones 4U, which is operating
in Curry's, to Dixons, the report says.

Evening Express discloses that mobile operator Vodafone is taking
over 140 of the Phones4U stores and 58 will be bought over by EE.

In total, 1,679 staff are being made redundant across the UK, the
report notes.  But 720 staff members will stay on to help with the
wind down, the report relays.

Phones4U blamed going into administration on mobile network EE's
decision not to renew its contract, which followed a similar move
from Vodafone earlier this month, the report discloses.

The report notes that Rob Hunt -- rob.hunt@uk.pwc.com -- joint
administrator and PricewaterhouseCoopers partner, said: "It is
with much regret that we have today made the difficult decision to
close a large number of stores.

"It is a very sad day for the staff working at those locations and
our thoughts are with them.  We will make every effort to help the
affected staff, working with the Phones4u HR team over the coming
days to support employees," Mr. Hunt added.


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


* BOOK REVIEW: Transnational Mergers and Acquisitions in the U.S.
-----------------------------------------------------------------
Author: Sarkis J. Khoury
Publisher: Beard Books
Softcover: 292 pages
List Price: $34.95
Review by Gail Owens Hoelscher
Order your personal copy today at http://is.gd/hl7cni

Transnational Mergers and Acquisitions in the United States will
appeal to a wide range of readers. Dr. Khoury's analysis is
valuable for managers involved in transnational acquisitions,
whether they are acquiring companies or being acquired themselves.
At the same time, he provides a comprehensive and large-scale look
at the industrial sector of the U.S. economy that proves very
useful for policy makers even today. With its nearly 100 tables of
data and numerous examples, Khoury provides a wealth of
information for business historians and researchers as well.

Until the late 1960s, we Americans were confident (some might say
smug) in our belief that U.S. direct investment abroad would
continue to grow as it had in the 1950s and 1960s, and that we
would dominate the other large world economies in foreign
investment for some time to come. And then came the 1970s, U.S.
investment abroad stood at $78 billion, in contrast to only $13
billion in foreign investment in the U.S. In 1978, however, only
eight years later, foreign investment in the U.S. had skyrocketed
to nearly #41 billion, about half of it in acquisition of U.S.
firms. Foreign acquisitions of U.S. companies grew from 20 in
1970 to 188 in 1978. The tables had turned an Americans were
worried. Acquisitions in the banking and insurance sectors were
increasing sharply, which in particular alarmed many analysts.

Thus, when it was first published in 1980, this book met a growing
need for analytical and empirical data on this rapidly increasing
flow of foreign investment money into the U.S., much of it in
acquisitions. Khoury answers many of the questions arising from
the situation as it stood in 1980, many of which are applicable
today: What are the motives for transnational acquisitions? How do
foreign firms plans, evaluate, and negotiate mergers in the U.S.?
What are the effects of these acquisitions on competition, money
and capital markets; relative technological position; balance of
payments and economic policy in the U.S.?

To begin to answer these questions, Khoury researched foreign
investment in the U.S. from 1790 to 1979. His historical review
includes foreign firms' industry preferences, choice of location
in the U.S., and methods for penetrating the U.S. market. He
notes the importance of foreign investment to growth in the U.S.,
particularly until the early 20th century, and that prior to the
1970s, foreign investment had grown steadily throughout U.S.
history, with lapses during and after the world wars.

Khoury found that rates of return to foreign companies were not
excessive. He determined that the effect on the U.S. economy was
generally positive and concluded that restricting the inflow of
direct and indirect foreign investment would hinder U.S. economic
growth both in the short term and long term. Further, he found no
compelling reason to restrict the activities of multinational
corporations in the U.S. from a policy perspective. Khoury's
research broke new ground and provided input for economic policy
at just the right time.

Sarkis J. Khoury holds a Ph.D. in International Finance from
Wharton. He teaches finance and international finance at the
University of California, Riverside, and serves as the Executive
Director of International Programs at the Anderson Graduate School
of Business.


                            *********

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.

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.


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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, and Peter A. Chapman, Editors.

Copyright 2014.  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.


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