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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, May 22, 2015, Vol. 16, No. 100

                            Headlines

A U S T R I A

KA FINANZ: Fitch Affirms 'B' Rating on Lower Tier 2 Debt


B U L G A R I A

FIRST INVESTMENT: Fitch Lowers IDR to 'B-' on Support Revision


C Y P R U S

CYPRUS: Takes Necessary Steps to Obtain Next Bailout Tranche


F R A N C E

DEXIA CREDIT: Fitch Affirms 'C' Rating on Tier 1 Hybrid Secs.
REXEL SA: Moody's Assigns (P)Ba3 Rating on New EUR500MM Notes
REXEL SA: Fitch Assigns 'BB(EXP)' Rating to EUR500MM Sr. Notes


G E R M A N Y

AAREAL CAPITAL: Fitch Affirms 'BB-' Rating on Tier 1 Securities
DEUTSCHE PFANDBRIEFBANK: Fitch Withdraws 'BB' Sub. Debt Rating


G R E E C E

GREECE: Schauble Doesn't Rule Out Default as Talks Continue
GREECE: DBRS Lowers Long-Term Currency Issuer Ratings to 'CCC'


I R E L A N D

ALLIED IRISH: Fitch Lowers Issuer Default Ratings to 'BB/B'
ENDO INTERNATIONAL: S&P Affirms 'B+' CCR, Outlook Stable
ST PAULS CLO II: Fitch Affirms 'BB+sf' Rating on Class E Notes


I T A L Y

CORDUSIO RMBS 4: Fitch Lowers Rating on Class D Notes to 'Bsf'


L U X E M B O U R G

BSN MEDICAL LUXEMBOURG: S&P Affirms 'B+' LT CCR, Outlook Stable


M O N T E N E G R O

MONTENEGRO: Moody's Says Fiscal Strength Deteriorates


N E T H E R L A N D S

MESDAG BV: Fitch Affirms 'CCsf' Rating on Class F Notes
REFRESCO GERBER: Moody's Raises CFR to 'Ba3', Outlook Stable
SRLEV NV: Moody's Reviews B3(hyb) Subordinated Debt Rating
STORK TECHNICAL: Moody's Affirms 'Caa1' CFR, Outlook Stable


P O L A N D

BANK OCHRONY: Fitch Lowers IDR to 'BB' on Support Revision


P O R T U G A L

BANCO COMERCIAL PORTUGUES: Fitch Lowers LongTerm IDR to 'BB-'


R O M A N I A

KAZMUNAYGAS INTERNATIONAL: Fitch Affirms 'B+' IDR, Outlook Stable


R U S S I A

COMSOTSBANK BUMERANG: Bank of Russia Revokes Banking License
VOSTOCHNY EXPRESS: Moody's Cuts Deposit & Debt Ratings to 'B3'


S L O V E N I A

ABANKA VIPA: Fitch Lowers Issuer Default Rating to 'B+'


S P A I N

MAPFRE SA: Fitch Raises Subordinated Debt Rating to 'BB+'
PYMES SANTANDER 11: Moody's Rates EUR178.8MM Serie C Notes 'Ca'
PYMES SANTANDER 11: DBRS Finalizes C Rating on Series C Notes


S W I T Z E R L A N D

VISTAJET GROUP: S&P Assigns Prelim. 'B+' CCR, Outlook Stable


U K R A I N E

UKRAINE: Russia to Seek Timely Repayment of Debt Despite New Law


U N I T E D   K I N G D O M

BARCLAYS BANK: Fitch Affirms 'BB+' Rating on Tier 1 Instruments
BOING TOPCO: S&P Affirms, Then Withdraws 'B' Corp. Credit Rating
DFS FURNITURE: S&P Raises CCR to 'B+' on IPO Completion
SERVICE ALUMINIUM: Cash Flow Pressures Prompt Administration
STICHTING PROFILE: Fitch Affirms 'B+' Rating to Class E Notes

TULLIS RUSSELL: More Job Losses After No Buyer Found


X X X X X X X X

* BOOK REVIEW: The Money Wars


                            *********

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A U S T R I A
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KA FINANZ: Fitch Affirms 'B' Rating on Lower Tier 2 Debt
--------------------------------------------------------
Fitch Ratings has downgraded Kommunalkredit Austria's (KA) and KA
Finanz's (KF) Long-term Issuer Default Ratings (IDRs) to 'BBB+'
from 'A' and 'A+' respectively.  The Outlooks are Stable.

The rating actions are in conjunction with Fitch's review of
sovereign support for banks globally, which the agency announced
in March 2014.  In line with its expectations announced in March
last year and communicated regularly since then, Fitch believes
legislative, regulatory and policy initiatives have substantially
reduced the likelihood of sovereign support for US, Swiss and
European Union commercial banks.

The EU's Bank Recovery and Resolution Directive (BRRD) and the
Single Resolution Mechanism (SRM) are now sufficiently progressed
to provide a framework for resolving banks that is likely to
require senior creditors participating in losses, if necessary,
instead of or ahead of a bank receiving sovereign support.  The
BRRD has been fully implemented (ie including its bail-in tool)
into Austrian law with effect from Jan. 1, 2015.

Although KA and KF are subject to BRRD, Fitch believes that it
will not be applied to them as long as their orderly wind-down
progresses in line with plans agreed with the European
Commission's (EC) state aid authorities.  However, should state
aid be required further to what has been approved by the EC, the
bank may be required to take resolution measures potentially
including some bail-in of senior creditors.  This risk is
reflected in today's downgrade of the IDRs.

Furthermore, we believe that the recent measures taken by the
Austrian authorities to resolve Heta Asset Resolution AG (Heta),
which includes a 15-month moratorium on Heta's debt payments,
could indicate a decrease in the Austrian state's propensity to
provide support for wind-down banks.  The resulting uncertainty
is no longer commensurate with Support Rating Floors (SRF) in the
'A' range.

KEY RATING DRIVERS

The ratings of KA and KF reflect Fitch's view of the high
likelihood of support from the Republic of Austria (AA+/Stable),
KF's sole owner, which also owns 99.78% of KA.  The government
has stated that it intends to remain KF's sole shareholder until
the bank's wind-down is completed.

Austria's approach to KA's and KF's wind-down was clearly
formulated at an early stage, consistently executed since the
inception of both banks' wind-down plans and is progressing ahead
of expectation.  Fitch expects that KA and KF, unlike Heta, will
not suffer major losses in the foreseeable future under
reasonable stress assumptions.  In Fitch's view, these
characteristics significantly and positively differ from the
aggressive resolution measures imposed on Heta since 2014, driven
by the government's clear intention to impose a large-scale
burden sharing on Heta's senior creditors.  The measures taken
with Heta were driven by the large scale and highly volatile
development of Heta's losses.

Fitch's assessment of the remaining high likelihood of state
support for KA and KF is driven by qualitative factors, primarily
the banks' state ownership, Austria's commitment and some
flexibility to provide support to KA and KF, as outlined in their
EC state aid decisions.  The strength of the support structures
in place for KA and KF and Austria's financial strength are the
key rating drivers for both banks.  Given the small size of KA
and KF in relation to Austria's financial resources, the
downgrade of the sovereign's rating to 'AA+' from 'AAA' in
February 2015 has not affected Fitch's view of the sovereign's
ability to support.

As part of the EC state aid decisions, the Austrian government is
committed to maintaining a Tier 1 ratio of 7% for KF and we
understand from management that this commitment (and the EC's
state aid decisions) is unaffected by the planned partial merger
of KA's assets and liabilities into KF.  KF has received net
EUR2bn in state support, including EUR1bn in 2011 following
Greece-driven losses, and a shareholder contribution of EUR350m
in 2013 that allowed the bank to comply with Basel III
regulations (it maintained a total capital ratio of 20.9% and a
CET1 ratio of 14.5% at end-2014) while actively reducing risk-
weighted assets.

Fitch expects that KF will need no additional capital for the
foreseeable future, given the nature of its remaining assets
which are systematically running off.  Concentration in KF's
public sector-focussed portfolio remains high but is rapidly
declining, increasingly mitigating the risk of significant single
losses.

The EC state aid decision concerning KA allows Austria to provide
capital and liquidity support, if required, although we
understand from management that KA's wind-down plan does not
assume any draw-down on available state support.  However,
depending on the magnitude of any credit losses that may arise
and the speed of asset disposal and run-off, further capital
injections by the Austrian government could, in Fitch's view,
become necessary. Should this be the case, Fitch believes that
the Austrian government's propensity to provide capital and/or
funding support to KF remains high, even if additional capital
requirements would prove to be substantial.  This is also true
for KA to the extent it remains under Austria's ownership, either
directly or as part of KF.

KF benefits from substantial funding guarantees from Austria.
These guarantees are large in absolute terms and compared with
total liabilities: they amounted to 35% of non-equity funding at
KF based on EUR2.4 billion utilization at end-2014.  This could
be diluted to around 20% of non-equity funding after the planned
integration of KA and assuming a full utilization of EUR3
billion.  In our view, this represents a strong incentive for the
authorities to provide additional support, if required, to
protect their investment until the banks' assets are wound down.
Moreover, Fitch understands from management that the EC state aid
decisions would allow a substantial increase of the volume of
state-guaranteed debt.

Most of KA's rated debt securities are on Rating Watch Negative
(RWN) following the bank's announcement in March 2015 about the
partial sale of KA, in which the government will spin off about
EUR4.3 billion of KA's assets and a corresponding volume of its
debt to a newly established bank to be sold to a consortium
consisting of English Interritus Limited and Irish Trinity
Investments Limited, managed by London-based asset manager
Attestor Capital LLP.

The RWN signals an expected multi-notch downgrade of the notes on
transfer to the newly established bank, as they would no longer
benefit from sovereign support.  Fitch expects this new entity's
credit profile to be substantially weaker than necessary to
support 'BBB+' ratings.  The extent of the downgrade of the notes
could be to below investment grade, depending on whether Fitch
considers new capital and liquidity buffers substantial enough to
protect the senior notes at an investment grade level.  The
extent of the downgrade will also take into account Fitch's view
of likely support from the new owners.  Fitch does not usually
factor in support from private equity investors into its ratings
as their ability and/or commitment to fully support creditors
typically cannot be relied upon.

The remainder of KA's assets (about EUR7bn) and liabilities will
then be merged into KF.  A failure of KA's sale to the private
investors could result in 100% of KA's assets and liabilities
being merged into KF.  Therefore, KF is highly likely to become
KA's legal successor and we expect it to retain all rights and
obligations attached to this status.  For this reason, Fitch has
equalized the ratings of the two entities.

Approval for the transaction is pending from KA's relevant
governing bodies and regulatory authorities.  The transaction is
expected to complete by mid-2015.  The planned merger of KA's
remaining assets and liabilities into KF could necessitate some
formal changes to the existing support structures in place for KF
and agreed with the EC.  However, Fitch would expect any changes
to have limited effects because the planned merger of KA's
remaining assets and liabilities into KF is unlikely to hinder
their wind-down.

KA has published a list of notes which it expects to transfer to
KF.  The notes on this list rated by Fitch are: XS1017111029,
XS1072804484, XS1003354252, XS0235597068, XS1020014608,
XS1016032457, XS1040273267, XS1015492595, AT0000329859 and
XS0255439803.  Fitch believes that further rated notes might
eventually be transferred to KF.  However, until the full list
has been published, most notes will remain on to reflect the risk
that they may be transferred to the private investors.

Fitch does not assign Viability Ratings to KA or KF because they
are wind-down institutions whose business models would not be
viable without external support.

RATING SENSITIVITIES

KA's and KF's ratings will remain primarily sensitive to
Austria's ability and propensity to provide support.  Fitch does
not believe that the ability of Austria to support KA and KF will
diminish materially as long as it remains in the 'AA' category.

The ratings are particularly sensitive to KF's continued progress
with its orderly wind-down in accordance with the plan agreed
with the EC once it has absorbed the assets and liabilities it
receives along with the KA transfer.  Deviation from the plan
would likely trigger a fresh state aid review and heighten the
likelihood of the EC and/or the Single Resolution Board requiring
more stringent measures, which could include burden-sharing for
senior creditors. This scenario could be driven by large single
credit losses that would mean KF requiring further state support,
although this is unlikely given that KF's concentration risk has
declined significantly in recent years.

Fitch expects to resolve the RWN on KA's notes when the final
list of notes to be transferred to the new private investor-owned
entity is provided, which we expect to be by end-2Q14.  The
ratings of the notes to be retained by KF will be equalized with
KF's IDRs while the ratings of the notes to be transferred to the
new entity are could be downgraded by several notches,
potentially to below investment grade, at the time of transfer.
The extent of the downgrade will depend on whether Fitch
considers new capital and liquidity buffers substantial enough to
protect the senior notes at an investment grade level.  The
extent of the downgrade will also take into account Fitch's view
of the likelihood support from the new owners.

KEY RATING DRIVERS AND SENSITIVITIES- SUBORDINATED LOWER TIER 2
DEBT

The 'B' ratings of performing subordinated lower Tier 2 debt
securities issued by KF reflect the still material credit risk if
state support is excluded and lack of financial flexibility for
subordinated instruments.  The material credit risk is driven by
potential bail-in of the banks' subordinated debt holders that
would be triggered by any additional state support to accompany
the orderly wind down of these banks and facilitated by BRRD
legislation.

In the absence of a VR or alternative rating that could act as an
anchor, Fitch has adopted a bespoke analysis of the risks of non-
performance and loss severity risks for KF's subordinated lower
Tier 2 debt.  Fitch differentiates between KF's subordinated
lower Tier 2 debt ratings and those of its wind-down bank peers
within the 'B' category by comparing these banks' respective
operating income forecasts, credit exposures and related
potential losses and available capital buffers to determine the
potential need for further extraordinary state support.  The
notching differences reflect Fitch's view of the somewhat
different probability of further state support requirement for
each bank.

There is upside potential for the subordinated lower Tier 2 debt
rating should KF's wind-down progress significantly with capital
being retained at the same time.  Downside pressure arises from
the risk of the instruments being bailed-in if new state aid is
required.  Should these instruments be bailed in then loss
severity would likely be high, which could result in a downgrade
to 'CC' or 'C'.

KEY RATING DRIVERS AND SENSITIVITIES - JUNIOR SUBORDINATED DEBT

KF's junior subordinated debt rating of 'C' reflects the deferral
of coupon payments and Fitch's view that payments are unlikely to
be resumed given that KF is in wind-down.  Fitch does not expect
that this instrument will become performing and therefore sees no
upside for the instruments' ratings.

KEY RATING DRIVERS AND SENSITIVITIES - GUARANTEED DEBT

The Short-term rating of KF's government-guaranteed commercial
paper program (EUR3 billion, of which about EUR2.4 billion was
outstanding at end-2014) has been affirmed at 'F1+' and reflects
the state guarantee supporting the program.  A negative rating
action would be triggered in the highly unlikely event of a
downgrade of Austria's Short-term IDR.

The rating actions are:

Kommunalkredit Austria AG

Long-term IDR: downgraded to 'BBB+' from 'A', Stable Outlook
Short-term IDR: downgraded to 'F2' from 'F1'
Support Rating: downgraded to '2' from '1'
Support Rating Floor: revised to 'BBB+' from 'A'
Long-term senior unsecured notes: downgraded to 'BBB+' from 'A'.

These notes are affected:

XS1017111029, XS1072804484, XS1003354252, XS0235597068,
XS1020014608, XS1016032457, XS1040273267, XS1015492595,
AT0000329859 and XS0255439803.
Long-term senior unsecured notes: downgraded to 'BBB+' from 'A';
maintained on RWN

These notes are affected:

XS0219895413, XS0219500500, XS0220012727, XS0223008813,
XS0312417313, XS0312417743, XS0972624117, XS0200950599,
XS0981809584, XS0238189657, XS0238190150, XS0234510930,
XS0236347240, XS1005197477, XS0238071228, XS0241451581,
XS0186736228, XS0187975262, XS0247759094, XS1048251091,
XS1055031139, CH0025370906, XS1073920255, XS0266826659,
XS0223929216, XS0363735712, XS0252593198, XS0171595183,
XS0172076365, XS0214564972, XS0190348952, XS0192480977,
XS0100920353, AT0000320858, XS0163624504, XS0104786263,
XS0208913276, XS0210167218, XS0212470149, XS0213230047,
XS0215049395, XS0215865287, XS0218474533, XS0252786669,
XS0218874633, XS0221102840, XS0222391632, XS0224859545,
XS0231018747, XS0231084293, XS0239396905, XS1013581274,
XS0243179354, XS0157911958, XS0161439954, XS0162167398,
XS0169415659, XS0170583123, XS0190871409, XS0194530571,
XS0201565115, XS0214981812, XS0216184621, XS0222762477,
XS0234789351, XS0243771218, XS0253410236, XS0253139686,
XS0231118455, XS0184959376, XS0205974701, XS0168795689,
XS0169291829, XS0169321832, XS0169641312, XS0170243702,
XS0169901328, XS0172801986, XS0173644724, XS0188313414,
XS0189430183, XS0200492436, XS0215839019, XS0238702400,
XS0242667888, XS0243373247, XS0244638770, XS0245268015,
XS0248796749, XS0254901852, XS0254902405, XS0258515443,
XS0306952598.

Long-term senior unsecured market-linked notes: downgraded to
'BBB+emr' from Aemr'; maintained on RWN

These notes are affected:

XS0313834557, XS0227969929, XS0233055424, XS0169312179,
XS0172124603, XS0193213393, XS0230962002, XS0340901908,
XS0158079540, XS0158239680, XS0164432394, XS0166841121,
XS0160009493, XS0162912934, XS0164603036, XS0167712016,
XS0167426864, XS0168578317, XS0168909108, XS0170112519,
XS0171468746, XS0181793935, XS0185849568.

Short-term senior unsecured notes rating: downgraded to 'F2' from
'F1', remains on RWN

Debt issuance program: downgraded to 'BBB+'/'F2' from 'A'/'F1',
remains on RWN

KA Finanz AG

Long-term IDR: downgraded to 'BBB+' from 'A+'; Outlook Stable
Short-term IDR: downgraded to 'F2' from 'F1+'
Support Rating: downgraded to '2' from '1'
Support Rating Floor: revised to 'BBB+' from 'A+'
Long-term senior unsecured notes: downgraded to 'BBB+' from 'A+'
Short-term senior unsecured notes: downgraded to 'F2' from 'F1+'
Subordinated lower tier 2 debt (XS0257275098, AT0000441209,
XS0185015541, XS0144772927 and XS0255270380): affirmed at 'B'
Junior subordinated debt (XS0284217709 and XS0270579856):
affirmed at 'C'
Government-guaranteed commercial paper program: affirmed at
'F1+'



===============
B U L G A R I A
===============


FIRST INVESTMENT: Fitch Lowers IDR to 'B-' on Support Revision
--------------------------------------------------------------
Fitch Ratings has downgraded Bulgaria-based First Investment Bank
AD's (FIBank) Long-term Issuer Default Rating-(IDR) 'B-' from
'BB-'.  The Outlook on the Long-term IDR is Stable.

The rating actions are in conjunction with Fitch's review of
sovereign support for banks globally, which the agency announced
in March 2014.  In line with its expectations announced in March
last year and communicated regularly since then, Fitch believes
legislative, regulatory and policy initiatives have substantially
reduced the likelihood of sovereign support for US, Swiss and
European Union commercial banks.

As a result, Fitch believes that, in line with our Support Rating
(SR) definition of '5', extraordinary external support, while
possible, can no longer be relied upon for FIBank.  Fitch has,
therefore, downgraded its SR to '5' from '3' and revised its
Support Rating Floor (SRF) to 'No Floor' from 'BB-'.

As a result of the revision to the SRF, the Long-term IDR is now
driven by FIBank's standalone creditworthiness as expressed in
its Viability Rating (VR), which has been affirmed at 'b-'.

KEY RATING DRIVERS - IDRS, VR AND SENIOR DEBT

The bank's IDRs, VR and senior debt rating reflect Fitch's view
of weaknesses in corporate governance, high borrower
concentrations in the loan book, deteriorating asset quality,
weak recurring profitability and moderate capitalization.
However, the bank's solvency has benefitted moderately from
improvements in reserve coverage of its non-performing loans
(NPLs) and a reduced ratio of uncovered NPLs to Fitch Core
Capital (FCC).

The deposit run in June 2014 suggested that customer funding may
not be stable in all circumstances; however, liquidity is
currently satisfactory following support from the Bulgarian
authorities and sizeable recovery in the deposit book.  Provision
of the liquidity support extended to FIBank and its subsequent
prolongation until May 2016 was considered state aid and the bank
is implementing a restructuring plan agreed with the European
Commission (EC).

The implementation of the plan is monitored by an independent
company and adherence to the plan as well as progress on its
implementation is reported quarterly to the EC.  The main focus
of the plan is to restore deposit stability at FIBank and improve
its funding profile.  According to the restructuring plan, key
weaknesses in corporate governance are also to be addressed, with
the introduction of CRO function, inclusion of the CFO in the
management board, addition of one independent member to the
supervisory board and clearer segregation of duties.  The plan
also envisages concrete changes in the risk management process at
the loan origination and underwriting stage as well as during the
monitoring process.

Fitch believes that the implementation of the plan could have a
moderate positive impact on the risk characteristics of the newly
underwritten exposures and lead to somewhat better control over
the legacy portfolio.  However, given the size of the largest
exposures, their long- term nature and limited amortization,
risks related to the legacy portfolio will at best unwind only
gradually and will weigh on FIBank's risk profile over the medium
term.

Borrower concentrations are high, at several times of the bank's
FCC.  Some of the largest borrowers have been granted additional
facilities, further increasing concentrations.  Within the
largest borrowers, there are a few which are classified as NPLs.

FIBank's regulatory NPL ratio, although lower than the banking
system average of 16.7%, is still high, amounting to 10.8% at
end-2014, and in part reflects the unseasoned nature of the
portfolio. The asset quality trend for the bank has been
moderately negative, while the sector's asset quality shows signs
of stabilizing. Reserve coverage increased substantially over
2014 both through additional build-up of specific provisions and
large charges to the Incurred But Not Reported (IBNR) reserve.
Total provision coverage (specific plus IBNR) of FIBank's NPLs
increased to close to 77% at end-2014 from 37% a year previously.
Restructured loans not included in impaired exposures are fairly
low and watch-list loans accounted for around 6.5% of gross
loans.

Recurring pre-impairment profit has been moderate and internal
capital generation weak, with a return on equity of just below 5%
in 2014.  The additional charge to IBNR reserves were largely
offset by one-off gains booked on the sale of repossessed
property.

Some capital generated internally in 2014, coupled with
marginally lower risk-weighted assets (RWAs), resulted in an
improvement in the FCC ratio to 11.2% from 10.6% at end-2013.
Improved reserve coverage resulted in improvement in the quality
of FIBank's capital, with uncovered NPLs falling to a moderate
23% of FCC at end-2014 (2013: 60%).  Regulatory Tier 1
capitalization is supported by EUR100m of privately placed hybrid
debt.  The bank has also some Tier 2 debt, but this is already
amortizing for regulatory purposes.

FIBank is classified as a domestically significant financial
institution, and as such is subject to an additional 3pts Core
Equity Tier 1 (CET1) capital requirement as well as a capital
conservation buffer of 2.5pts.  The reported regulatory CET1
ratio of 10.8% in 2014 was only marginally higher than the 10%
minimum required.

RATING SENSITIVITIES - IDRS, VR AND SENIOR DEBT

The bank's IDRs, VR could be downgraded in case of (i) further
marked deterioration in FIBank's loan performance or underlying
asset quality, resulting in increased pressure on the bank's
capitalization; or (ii) renewed and sustained pressure on the
bank's liquidity, if this is not offset in a timely fashion by
external liquidity support.

Upside potential for the VR is limited in the short and medium-
term given that the potentially positive impact of actions taken
within the scope of the restructuring plan will take time to feed
through, while legacy issues will continue to weigh on the bank's
risk profile.  However, amortization of some of the largest
credit exposures, reduced risk concentrations and improved
performance could lead to an upgrade.

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

The SR and SRF reflect Fitch's view that senior creditors can no
longer rely on receiving full extraordinary support from the
sovereign in the event that FIBank becomes non-viable.  In
Fitch's view, the EU's Bank Recovery and Resolution Directive
(BRRD) are now sufficiently progressed to provide a framework for
resolving banks that is likely to require senior creditors
participating in losses, if necessary, instead of or ahead of a
bank receiving sovereign support.  In the EU, BRRD has been
effective in member states since 1 January 2015, including
minimum loss absorption requirements before resolution financing
or alternative financing (eg, government stabilization funds) can
be used.  Full application of BRRD, including the bail-in tool,
is required from Jan. 1, 2016.

An upgrade to the SR and upward revision to the SRF could be
driven by a positive change in the sovereign's propensity to
support its banks.  While not impossible, this is highly unlikely
in Fitch's view.

The rating actions are:

First Investment Bank AD

Long-term IDR downgraded to 'B-' from 'BB-'; Outlook Stable
Short-term IDR affirmed at 'B'
Viability Rating affirmed at 'b-'
Support Rating downgraded to '5' from '3'
Support Rating Floor revised to 'No Floor' from 'BB-'



===========
C Y P R U S
===========


CYPRUS: Takes Necessary Steps to Obtain Next Bailout Tranche
------------------------------------------------------------
DPA reports that bailout-recipient Cyprus on May 20 said it has
taken the necessary steps for its creditors to consider a new aid
tranche following delays over key reforms.

The European Commission, European Central Bank and International
Monetary Fund said in a statement Nicosia has now introduced the
"main elements" of frameworks on insolvency and foreclosure aimed
at reducing the country's high level of non-performing loans, DPA
relates.

This is an "essential step to restoring growth and job creation
in Cyprus," the creditors, as cited by DPA, said, while warning
that further action will be necessary, including the introduction
of laws making it easier to sell bank loans.

They also stressed the need to press ahead with reforms, notably
relating to the public sector and privatizations, DPA relays.

The final decision to grant Cyprus its next bailout tranche rests
with the Eurogroup of eurozone finance ministers, upon successful
conclusion of the current review being carried out by creditors,
DPA notes.

In 2013, Cyprus was granted a EUR10 billion (US$11.3 billion)
rescue package, in return for which large depositors in two of
its main banks were forced to take considerable losses, DPA
recounts.

Nicosia last received a EUR350-million aid tranche in December,
DPA discloses.



===========
F R A N C E
===========


DEXIA CREDIT: Fitch Affirms 'C' Rating on Tier 1 Hybrid Secs.
-------------------------------------------------------------
Fitch Ratings has downgraded France-based Dexia Credit Local's
(DCL) Long-term Issuer Default Rating (IDR) to 'BBB+' from 'A'
and its Italian subsidiary Dexia Crediop's Long-term IDR to 'BBB-
' from 'BBB'.  The Outlooks on both Long-term IDRs are Stable.

The rating actions are in conjunction with Fitch's review of
sovereign support for banks globally, which the agency announced
in March 2014.  In line with its expectations announced in March
last year and communicated regularly since then, Fitch believes
legislative, regulatory and policy initiatives have substantially
reduced the likelihood of sovereign support for US, Swiss and
European Union commercial banks.

The EU's Bank Recovery and Resolution Directive (BRRD) and the
Single Resolution Mechanism (SRM) are now sufficiently progressed
to provide a framework for resolving banks that is likely to
require senior creditors participating in losses, if necessary,
instead of or ahead of a bank receiving sovereign support.

Although DCL and Dexia Crediop are subject to the BRRD, Fitch
believes that it will not be applied to them as long as their
orderly wind-down progresses in line with plans agreed with the
European Commission's (EC) state aid authorities.  However,
should state aid be required further to what has been agreed with
the EC, the bank may be required to take resolution measures
including some bail-in of senior creditors.  This risk is
reflected in today's downgrade of the IDRs.

KEY RATING DRIVERS - DCL

DCL's ratings reflect Fitch's opinion that there remains a high
probability that the states of France (AA/Stable) and Belgium
(AA/Negative) would provide additional extraordinary support to
them, if required, to accompany the orderly resolution of the
group.

Despite the implementation of BRRD, Fitch continues to factor in
state support for DCL to reflect its orderly wind-down status.
Fitch believes that the French and Belgian states will provide
further financial support if necessary to complete DCL's orderly
wind-down.  However, DCL's capacity for payment of non-guaranteed
senior unsecured debt is weakened by the introduction of senior
creditor bail-in as a prerequisite for exceptional additional
state support, meaning that the sovereign's ability to support in
full may not be as strong as it was before BRRD implementation.

Fitch considers that the risk of senior creditor "bail-in"
remains low for DCL but not impossible.  DCL's Long-term IDR of
'BBB+' reflects the French and Belgian states' financial
flexibility to provide financial support, as well as DCL's state
ownership and sizeable state guarantees for its funding.
France's and Belgium's sizeable investment in, and exposure to,
Dexia (owning 94% of the group's capital and guaranteeing,
together with Luxembourg, up to EUR85bn of its senior debt)
currently represent a very strong incentive for the authorities
to provide additional support, if required.  Fitch believes the
states will act pre-emptively to the extent possible to maintain
DCL's capitalization above minimum requirements.

Any new requirement for extraordinary support beyond the state
aid already agreed would require approval from the EC.  Fitch
would expect the EC to then liaise about the course of action to
take with the Single Resolution Board (SRB), which takes over
decisions on bank resolution from national authorities from
January 2016. While Fitch believes it likely that both parties
would seek the least disruptive solution, we also believe that
the decision is likely to depend on specific circumstances, and
especially on the extent to which the orderly wind-down is
proceeding according to plan.

Fitch does not assign a Viability Rating to DCL because it is a
wind-down institution whose business model would not be viable
without external support.

RATING SENSITIVITIES - DCL

DCL's ratings are sensitive to a reduction in the French state's
ability or propensity to provide additional state support,
including a downgrade of France's sovereign rating by more than
one notch.  A significant reduction in state-guaranteed funding
or state ownership would also be rating-negative.

The ratings are also sensitive to DCL progressing with its
orderly wind-down in accordance with the plan agreed with the EC.
Deviation from the plan would likely trigger a fresh state aid
review and heighten the likelihood of the EC and/or the SRB
requiring more stringent measures, which could include burden-
sharing for senior creditors.

Dexia's shortfall in the adverse stress scenario of the ECB's
Comprehensive Assessment illustrates its sensitivities to adverse
economic developments if it fails to run down its assets.  Assets
in euro terms increased in 2014, but this related to the
weakening of the euro against the US dollar, while on a constant
currency basis commercial loans and securities continued to run
off.  DCL's ratings may be downgraded further if further progress
with winding down its commercial loans and securities is not
evident by the time of the next rating review.

Any rating upgrade would be contingent on even greater commitment
to an orderly wind-down of DCL being demonstrated by France or
Belgium.  While not impossible, this is highly unlikely in
Fitch's view.

RATING DRIVERS AND SENSITIVITIES - DEXIA CREDIOP S.p.A.

Crediop's ratings reflect potential support from DCL.  As long as
DCL remains Crediop's majority shareholder, Fitch believes there
is a high probability that the group would provide support to
Crediop, if needed.  Fitch's view is that a default of Crediop
would result in high financial and reputational risk for DCL
group's wind-down process.

None of Crediop's liabilities are directly guaranteed by France
or Belgium, but around 30% of its non-equity funding comes from
DCL. Given the size of Crediop relative to DCL's, of around 15%
of assets and common equity, and the nature of its assets
(lending to Italian municipalities), DCL would likely be able to
provide support to Crediop if necessary without needing to call
on further state support itself.

Crediop's Long-term IDR is two notches lower than DCL's,
reflecting a remote possibility that sovereign support would be
required or that problems would arise at Crediop and DCL at the
same time.  In which case, Crediop would be less likely than DCL
to receive support from France and Belgium given its location and
business focus in Italy rather than Belgium or France and the
presence of minority shareholders, controlling 30% of the bank.

Crediop's IDRs and Support Rating are sensitive to a change in
DCL's ability (as measured by its ratings) or propensity to
support Crediop.  They are also potentially sensitive to a
downgrade of Italy's sovereign rating by several notches.

RATING DRIVERS AND SENSITIVITIES - DCL-GUARANTEED DEBT

The ratings on DCL's securities issued under guarantees from
Belgium, France and Luxembourg are aligned with the IDRs of
Belgium and France given that they are the lowest-rated guarantee
providers.  The guarantee is several but not joint, and each
state is responsible for a share of the overall guarantee.

The 'AA' long-term ratings of the securities issued under the
guarantees are sensitive to any rating action on the lowest-rated
guarantors (currently Belgium and France).  The 'F1+' rating on
the short-term securities issued under the guarantee would be
downgraded to 'F1' if the Short-term IDR of any guarantor is
downgraded to 'F1'.

KEY RATING DRIVERS AND SENSITIVITIES - DEXIA DELAWARE'S SHORT-
TERM DEBT RATING

The Short-term rating on the USCP program of Dexia Delaware LLC
has been downgraded to 'F2' in line with DCL's Short-term IDR,
reflecting Fitch's belief of an extremely high probability of
support from DCL if required.  This is based on DCL's guarantees
for the securities issued under Dexia Delaware's USCP program.
Dexia Delaware is DCL's fully-owned funding vehicle issuing USCP
(short-term debt securities).

Dexia Delaware's short-term debt is sensitive to the same factors
that would affect DCL's Short-term IDR.  DCL's IDRs are primarily
sensitive to France's and Belgium's ability and propensity to
provide support.

RATING DRIVERS AND SENSITIVITIES - SUBORDINATED DEBT AND OTHER
HYBRID SECURITIES

DCL's subordinated debt instruments XS0307581883 and XS0284386306
are dated bonds (maturing in 2017 and 2019 respectively) with
contractually mandatory coupon payment.  The 'B-' rating of these
securities reflects Fitch's view of a material credit risk
pertaining to potential 'burden sharing' on these securities
holders should Dexia receive additional state support to
accompany its orderly wind down.

Upside potential to the ratings of DCL's subordinated debt
instruments may result from Dexia's wind-down progressing
significantly with capital being maintained at solid levels at
the same time. Downside pressure may arise from any risk of
further state support being needed.  Should these instruments be
bailed-in then loss severity would likely be high, which could
result in a downgrade to 'CC' or 'C'.

Fitch has affirmed the 'C' ratings of DCL's (FR0010251421) hybrid
Tier 1 securities; the ratings reflect the coupons missed as part
of successive restructuring and orderly resolution plans, and a
continued ban on coupon payment of subordinated debt and hybrid
securities (unless contractually mandatory) imposed by the EC
since 2010 and the first restructuring plan.  Fitch does not
expect that DCL's hybrid securities will become performing and
therefore sees no upside for the instruments' ratings.

The rating actions are:

Dexia Credit Local (DCL):

Long-term IDR: downgraded to 'BBB+' from 'A'; Stable Outlook
Short-term IDR: downgraded to 'F2' from 'F1'
Senior debt: downgraded to 'BBB+' from 'A'
Market linked notes: downgraded to 'BBB+emr' from 'Aemr'
Commercial paper: downgraded to 'F2' from 'F1'
Support Rating: downgraded to '2' from '1'
Support Rating Floor: revised to 'BBB+' from 'A'
State guaranteed debt: affirmed at 'AA/F1+'
Tier 1 hybrid securities FR0010251421: affirmed at 'C'
Subordinated debt securities XS0307581883 and XS0284386306:
  affirmed at 'B-'

Dexia Delaware LLC's (Dexia Delaware)

USD25 billion US commercial paper (USCP) program's short-term
rating: downgraded to 'F2' from 'F1'

Dexia Crediop

Long-term IDR: downgraded to 'BBB-' from 'BBB'; Stable Outlook
Short-term IDR: affirmed at 'F3'
Support Rating: affirmed at '2'


REXEL SA: Moody's Assigns (P)Ba3 Rating on New EUR500MM Notes
-------------------------------------------------------------
Moody's Investors Service assigned a provisional (P)Ba3 rating to
Rexel SA's proposed EUR500 million senior unsecured notes, due
2022. Rexel's Ba2 corporate family rating, Ba2-PD probability of
default rating, Ba3 ratings on the company's existing senior
unsecured notes and the NP short-term rating of the company's
EUR500 million commercial paper program remain unchanged. The
outlook on all ratings remains stable.

Moody's understands that the proceeds of the EUR500 million of
new senior unsecured notes will be used to redeem Rexel's 6.125%
USD500 million senior unsecured notes, due 2019, with any
remainder being used for general corporate purposes.

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

The (P)Ba3 rating assigned to the proposed issuance of EUR500
million of senior unsecured notes, due 2022, reflects their pari
passu ranking with Rexel's existing senior unsecured notes and
their unmitigated structural subordination to non-financial
liabilities at the operating companies. However, the new notes
will have a lighter covenant package than the existing notes
(rated Ba3). While the covenant package for the new notes are
largely in line with existing notes, including limitations on
indebtedness, it no longer includes clauses for limitation on:
restricted payments; sales of assets and subsidiary stock; and
restrictions on distributions.

The Stable outlook reflects Moody's expectation that Rexel will
benefit from improved growth in its North American operations
bolstering a slow return to growth in its European operations. At
the same time, Moody's expects Rexel's leverage to benefit from a
portfolio rationalization which will shift more of its operations
into stronger macroeconomic growth such as the US and Asia. As a
result, the stable outlook assumes Rexel's gross leverage will
fall below 5.0x by the end of 2015.

While unlikely at this stage, upward pressure on the rating could
materialize over the medium term if Rexel demonstrates a prudent
financial policy as well as a successfully achieving its target
for improving its profitability, leading to a leverage ratio
(gross debt / EBITDA, as adjusted by Moody's) trending towards
3.5x and an retained cash flow RCF/debt (retained cash flow /
gross debt, as adjusted by Moody's) above 15%.

Downward pressure on the rating could result from any further
deterioration in Rexel's credit profile resulting from continued
adverse trading conditions or from a continuation in the decline
of Rexel's margins, such that its leverage (gross debt / EBITDA,
as adjusted by Moody's) does not fall below 4.5x within the next
18-24 months or if its RCF/ debt (as adjusted by Moody's) falls
below 10%.

The principal methodology used in this rating was Global
Distribution & Supply Chain Services published in November 2011.
Other methodologies used include Loss Given Default for
Speculative-Grade Non-Financial Companies in the U.S., Canada and
EMEA published in June 2009.

Headquartered in Paris, France, Rexel SA ("Rexel") is a global
leader in the low and ultra-low voltage electrical distribution
market. Rexel addresses three main markets: Commercial (44% of
sales); Industrial (35%); and residential (22%). For 2014, Rexel
reported total sales and EBITA of EUR13.1 billion and EUR647
million respectively. Rexel is a public company listed on
Euronext Paris.


REXEL SA: Fitch Assigns 'BB(EXP)' Rating to EUR500MM Sr. Notes
--------------------------------------------------------------
Fitch Ratings has assigned Rexel, SA's (Rexel; BB/Stable/B)
planned EUR500 million senior notes issue due in 2022 an expected
senior unsecured rating of 'BB(EXP)'.  The final rating is
contingent upon the receipt of final documents conforming to
information already received by Fitch.

Management plans to apply the proceeds of the notes towards the
early redemption of the 6.125% notes due in 2019.  The planned
bond will be unguaranteed, ranking pari passu to all existing and
future unsecured indebtedness of the issuer that is not
subordinated to the notes, including that under the senior credit
facilities.  Although under each of Rexel's bonds and the senior
credit facilities creditors only have a claim to the parent
company, there is cross-default with the securitization program
incurred by these subsidiaries.

Securitisation debt, finance lease obligations and debt incurred
by subsidiaries (together, the senior debt) will continue to rank
ahead of debt incurred by Rexel.  However, any structural
subordination concerns are mitigated by expected limited senior
leverage, measured as senior debt/EBITDA, below the threshold of
2x Fitch considers critical (1.6x based on FY14's EBITDA).  As a
result, we expect average recovery prospects for unsecured
bondholders in the event of default.  However, should Rexel
permanently incur senior indebtedness exceeding 2x EBITDA
(representing around EUR250 million of incremental debt including
availability under securitization lines) Fitch could downgrade
the senior unsecured rating by one notch.

KEY RATING DRIVERS

Weak Sales Recovery

Organic sales rebounded 1.1% in 2014, following two years of
decline.  This reflects the strong recovery in the US market (25%
of group's 2014 sales) and a milder recovery in Europe, where
growth continued to be dragged down by key markets such as France
(33% of 2014 European sales).

Fitch conservatively forecasts organic sales growth in the low
single digits over the next three years.  This is mainly due to
likely persistent weaknesses in several core European markets
and, to a lesser extent, the negative impact of low oil and
copper cable prices (together representing approximately 18% of
group 2014 sales).

Operating Margin Pressure

Rexel's EBITDA margin fell to 5.5% from 6.1% between 2012 and
2014.  This reflected tough market conditions in higher-margin
Europe (6.3% EBITA margin) and simultaneous recovery in lower-
margin North America (34% of 2014 group sales, 4.6% EBITA
margin), negative mix effect from lower-margin projects and
operating investments to streamline the group's cost structure.

Fitch expects mild margin recovery towards 5.8% in 2017,
supported by low organic sales growth and management's
initiatives to optimize group gross margin and the operating cost
structure.  In addition, completing the announced divestment of
certain less profitable businesses, such as the Latin American
operations that were sold in 1Q15, and potential economies of
scale from acquisitions should support profitability.  However,
Fitch believes greater margin enhancement remains reliant on a
stronger market recovery in Europe.

Free Cash Flow Critical

Fitch expects pre-dividend free cash flow (FCF) margin to remain
above 2% in the next three years, a healthy level for the
ratings. Rexel has demonstrated its ability to remain cash flow-
generative throughout economic cycles, due to low capital
intensity and the countercyclical nature of its working capital
needs, combined with tight management.

In 2013-2014, the group maintained a high level of FCF despite a
drop in EBITDA, due to resilient cash flow conversion and
shareholder support, with 72% of dividend payments made through
shares over this period.  Fitch expects management to maintain
strict financial discipline, supporting average annual FCF
generation of EUR240 million over the next three years.

Financial Flexibility, M&A Appetite

Rexel's business model is geared towards growing via
acquisitions, as opposed to capex.  This enables continuing
positive FCF generation but makes the pace of deployment of
resources for growth less predictable.  Overall, Fitch positively
views Rexel's acquisition strategy as it should lead to improved
product and geographic diversification as well as a higher
operating margin (through economies of scale).

However, maintaining a prudent financial policy, which includes a
flexible approach towards allocating resources between M&A and
cash dividends to cap total cash outlays in a given year, remains
a critical safeguard for the ratings.  In its 2015-2017 rating
case, Fitch has assumed EUR300 million acquisition spending and
50% of dividends paid in shares per annum.

Weak Credit Metrics

Rexel's 2014 lease-adjusted FFO net leverage (taking into account
EUR959.6 million readily available cash) was high at 5.2x and
slightly above our negative rating guideline of 5.0x.  This high
leverage results from high acquisition spending in 2012, followed
by two years of difficult economic conditions and initiatives to
diversify the group's business model, all resulting in lower
profitability.

Under Fitch's assumptions (mild top-line recovery and a strict
financial policy in terms of M&A and shareholder distribution),
Rexel should be able to regain some rating headroom from 2015
with lease-adjusted FFO net leverage falling back below 5.0x in
2016. The profile of future acquisitions in terms of spending
within the boundaries described above and with potential for
group profitability enhancement will be important for sustained
deleveraging.

LIQUIDITY AND DEBT STRUCTURE

Rexel's liquidity was healthy as of 31 December 2014 with
EUR1,160 million of cash on balance sheet, of which Fitch
considers EUR960 million readily available.  It is further
underpinned by EUR1,060 million undrawn committed bank
facilities.  Rexel also has access to various receivable
securitization programs and a EUR500 million commercial paper
program.

Once the notes have been issued and the redemption of the 2019
bond take place, Rexel will have no major debt repayment before
2020.

KEY ASSUMPTIONS

   -- Annual sales growth in the mid-single digits driven by a
      slow recovery in organic sales and acquisitions

   -- EBITDA margin trending towards 5.8% in 2017 (2014: 5.5%)

   -- Limited acceleration of working capital outflows due to
      tight management

   -- Stable dividend pay-out at EUR0.75 per share, 50% paid in
      shares over 2015-2017

   -- Average annual FCF of EUR240m over 2015-2017

   -- Annual bolt-on acquisitions spending of EUR300 million and
      marginal proceeds from divestments over 2015-2017

   -- Prepayment of the 7% EUR499 million outstanding bond due
      2018 in 1Q15 and the 6.125% USD500 million outstanding bond
      due in 2019 later this year.

RATING SENSITIVITIES

Positive: Fitch does not expect to take positive rating action
over the next three years as - although Fitch believes
management's M&A policy will reinforce the group's business
profile and cash generation capacity in the longer term, it
should also prevent any significant deleveraging.  Nevertheless,
future developments that could lead to positive rating action
include:

   -- FFO adjusted net leverage below 4.0x on a sustained basis
      and evidence of resilient profitability.

   -- Continued strong cash flow generation, measured as pre-
      dividend FCF margin comfortably above 2%.

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

   -- A large debt-funded acquisition, or a deeper than expected
      economic slowdown with no corresponding increase in FCF (
      notably due to working capital inflow and dividend
      restriction) resulting in (actual or expected) lease-
      adjusted FFO adjusted net leverage above 5.0x for more than
      two years.

   -- A contraction of pre-dividend FCF margin to below 2% as a
      result of weaker profitability and/or a less tightly
      managed working capital.

   -- A more aggressive shareholder-friendly stance leading to an
      erosion of FCF margin to below 1%.



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


AAREAL CAPITAL: Fitch Affirms 'BB-' Rating on Tier 1 Securities
---------------------------------------------------------------
Fitch Ratings has downgraded Aareal Bank AG's Long-term Issuer
Default Rating (IDR) and senior debt ratings to 'BBB+' from 'A-'
and its Short-term IDR and debt ratings to 'F2' from 'F1'. The
Outlook on the Long-term IDR is Stable.  Its Viability Rating
(VR) has been affirmed at 'bbb+'.

The rating actions are in conjunction with Fitch's review of
sovereign support for banks globally, which the agency announced
in March 2014.  In line with its expectations announced in March
last year and communicated regularly since then, Fitch believes
legislative, regulatory and policy initiatives have substantially
reduced the likelihood of sovereign support for US, Swiss and
European Union commercial banks.

As a result, Fitch believes that, in line with its Support Rating
(SR) definition of '5', extraordinary external support, while
possible, can no longer be relied upon for Aareal.  Fitch has,
therefore, downgraded its SR to '5' from '1' and revised its
Support Rating Floor (SRF) to 'No Floor' from 'A-'.  As a result,
Aareal's Long-term IDR is now driven by its standalone
creditworthiness as expressed in its VR.

KEY RATING DRIVERS AND SENSITIVITIES - IDRs, VR AND SENIOR DEBT
RATING

Aareal's IDRs and senior debt rating are driven by its VR and are
therefore sensitive to the same drivers as the VR.  Aareal's VR
reflects the bank's resilient performance and continuously
strengthening capitalization, which already comfortably fulfils
the fully-loaded requirements under Basel III.  Fitch views
management's public commitment to maintaining comfortable capital
buffers (at least 12.25% Tier 1 ratio and 20% total capital
ratios on a fully-loaded basis) as credible despite the
resumption of dividend payments following the repayment in 4Q14
of the state hybrid capital.

Fitch considers Aareal the strongest among rated German
specialized CRE lenders, and Aareal is the sole member of the
peer group that did not rely on institutional or state support or
did not need to restructure or amend its business model during
the global financial crisis.  An upgrade of Aareal's VR is
unlikely as we believe that its monoline business model focusing
on non-granular, wholesale and cyclical assets are not
commensurate with the 'a' category.  Downward pressure on the VR
could arise if it emerges that Aareal has materially
overestimated the net gain or misjudged the risk from its
Westdeutsche Immobilienbank AG (WestImmo, A-/F1; on RWN)
acquisition, which it intends to close later this year.

In the medium term, Aareal's VR will remain primarily vulnerable
to asset quality deterioration or a significant increase of
funding costs.  Fitch views the latter as highly unlikely in the
short term in light of the quantitative easing measures recently
initiated by the ECB and from which covered bond issuers should
continue to benefit.  Moreover, a reversal of the current benign
CRE market trend seems unlikely in 2015, and Aareal is only
moderately exposed to the pockets of risks that are gradually
building up in the German residential real estate market.

Aareal announced in April 2015 that it will transfer by end-1H15
Corealcredit Bank AG's (BBB+/Stable/F2) banking operations into
the group's parent entity as a branch while the legal entity
Corealcredit will remain a subsidiary without operating
activities.  Fitch expects that the profit-and-loss transfer and
control agreement between Aareal and Corealcredit will be
unaffected.

Fitch equalizes Aareal's VR with the Long-term IDR despite
significant layers of subordinated debt.  Fitch has not given any
uplift to Aareal's Long-term IDR relative to its VR because the
bank's Long-term IDR would not achieve the higher level if
Aareal's junior debt buffer was in the form of Fitch Core Capital
(FCC) rather than debt.  This is primarily because we believe
that the bank's company profile, as a largely wholesale-funded,
monoline CRE lender, constrains its VR at 'bbb+'.

KEY RATING DRIVERS AND SENSITIVITIES - SR AND SRF

The SR and SRF reflect Fitch's view that senior creditors can no
longer rely on receiving full extraordinary support from the
sovereign in the event that Aareal becomes non-viable.  In
Fitch's view, the EU's Bank Recovery and Resolution Directive
(BRRD) and the Single Resolution Mechanism (SRM) are now
sufficiently progressed to provide a framework for resolving
banks that is likely to require senior creditors participating in
losses, if necessary, instead of or ahead of a bank receiving
sovereign support.

In the EU, BRRD has been effective in member states since 1
January 2015, including minimum loss absorption requirements
before resolution financing or alternative financing (eg,
government stabilization funds) can be used.  Germany has fully
applied BRRD, including the bail-in tool, from Jan. 1, 2015.

Any upgrade to Aareal's SR and upward revision to its SRF would
be contingent on a positive change in the sovereign's propensity
to support its banks.  While not impossible, this is highly
unlikely in Fitch's view.

KEY RATING DRIVERS AND SENSITIVITIES - SUBORDINATED DEBT AND
HYBRID SECURITIES

Aareal's lower Tier 2 subordinated notes are notched down once
from its VR to reflect their higher loss severity relative to
senior debt.

The legacy, non-Basel III compliant hybrid securities issued by
Capital Funding GmbH and Aareal Capital Funding LLC (Delaware),
are notched down four times from Aareal's VR (two notches for
high loss severity risk and two notches for high non-performance
risk relative to that captured in the VR) to reflect their
distributable profit trigger or annual profit trigger combined
with a regulatory capital ratio trigger.

The Basel III-compliant additional Tier 1 (AT1) hybrid securities
are rated five notches below its VR, ie twice for loss severity
to reflect their write-down on breach of their 7% trigger, and
three times for non-performance risk.

The ratings of the lower Tier 2 subordinated notes and hybrid
instruments are primarily sensitive to changes to Aareal's VR.

The rating actions are:

Aareal Bank AG:

Long-term IDR: downgraded to 'BBB+' from 'A-'; Outlook Stable
Short-term IDR: downgraded to 'F2' from 'F1'
Viability Rating: affirmed at 'bbb+'
Support Rating: downgraded to '5' from '1'
Support Rating Floor: revised to 'No Floor' from 'A-'
Debt issuance program: downgraded to 'BBB+'/'F2' from 'A-'/'F1'
Senior unsecured notes: downgraded to 'BBB+' from 'A-'
Subordinated debt: affirmed at 'BBB'
Capital Funding GmbH (DE0007070088): affirmed at 'BB'

Aareal Capital Funding LLC (Delaware) (XS0138973010): affirmed at
'BB'
Additional Tier 1 securities (DE000A1TNDK2): affirmed at 'BB-'


DEUTSCHE PFANDBRIEFBANK: Fitch Withdraws 'BB' Sub. Debt Rating
--------------------------------------------------------------
Fitch Ratings has downgraded Deutsche Pfandbriefbank AG's (PBB)
Long-term Issuer Default Rating (IDR) and senior debt ratings to
'BBB' from 'A-' and placed them on Rating Watch Negative (RWN).
The ratings have been subsequently withdrawn as Fitch has chosen
to withdraw the ratings of PBB for commercial reasons.

The rating actions are in conjunction with Fitch's review of
sovereign support for banks globally, which the agency announced
in March 2014.  In line with its expectations announced in March
last year and communicated regularly since then, Fitch believes
legislative, regulatory and policy initiatives have substantially
reduced the likelihood of sovereign support for US, Swiss and
European Union commercial banks.

The EU's Bank Recovery and Resolution Directive (BRRD) and the
Single Resolution Mechanism (SRM) are now sufficiently progressed
to provide a framework for resolving banks that is likely to
require senior creditors participating in losses, if necessary,
instead of or ahead of a bank receiving sovereign support.

KEY RATING DRIVERS - IDRs, SUPPORT RATING, SUPPORT RATING FLOOR
AND SENIOR DEBT

The downgrade reflects the implementation of BRRD in Germany on
January 1, 2015, which increases bail-in risk for PBB's senior
creditors, although Fitch considers that this risk remains low as
long as PBB remains indirectly state-owned.

PBB's IDRs and other support-driven ratings reflect Fitch's
opinion that there is a high probability of support from Germany
(AAA/Stable) if required.  This takes into account Germany's high
financial flexibility, PBB's indirect 100% ownership and its
status as large German Pfandbrief issuer.  Therefore, Fitch
believes the state will act pre-emptively to the extent of
maintaining PBB's capitalization above minimum requirements.

The RWN on PBB's IDRs and other support-driven ratings reflects
the increased probability of orderly reprivatization in 2015.  A
successful reprivatization would be commensurate with a Long-term
IDR driven either by PBB's VR (if the buyer is a financial buyer)
or by institutional support (strategic buyer rated higher than
PBB's VR).

If, however, the reprivatization is aborted, which Fitch views a
likely scenario, Fitch expects PBB to be orderly wound down by
SoFFin. This would be commensurate with a Long-term IDR in the
'BBB' range, similar to other state-owned wind-down banks.

The downgrade of the Short-term IDR by one notch to 'F2' (the
higher of two possible levels for a Long-term IDR of 'BBB')
reflects the bank's fairly well-matched asset-liability maturity
structure.  In addition, Fitch views the government's incentive
for a bail-in of PBB's senior unsecured creditors -- especially
in case of a short-term funding gap -- as very low due to a small
amount of outstanding unsecured debt that is not protected by
Germany's voluntary deposit protection scheme.

KEY RATING DRIVERS - VR

PBB's stand-alone profile does not yet fulfill all the main
characteristics that Fitch generally expects from specialized CRE
banks to qualify for an investment-grade VR, especially robust
recurring internal capital generation and a crisis-resilient,
standalone funding franchise.

PBB's VR reflects the bank's gradually improving performance and
capitalization but is constrained by its low profitability and
Fitch's view of its earnings prospects.  The VR takes into
account the bank's track record of solid and stable asset
quality, driven by conservative underwriting standards and a
focus on a fairly resilient CRE market.

At the same time, its asset quality still strongly benefits from
the transfer of non-performing and legacy assets to FMS WM in
2010 and from unusually benign market conditions in Germany.  The
VR also reflects improving but still high concentration risk in
its large public-sector portfolios.

Solid asset quality has been essential to maintaining adequate
risk-weighted capitalization, as PBB's cash coverage of impaired
loans is now significantly lower than its peers'.  However, this
is compensated by robust collateral in solid CRE markets, a high
portion of loans in restructuring and a fairly low non-performing
loans/total loans ratio.  Leverage has also consistently
improved, helped by shrinking legacy assets but remains high and
could somewhat constrain management's growth plans.

The VR also reflects Fitch's expectation that operating
performance will continue to improve, but that margin pressure is
likely to remain high and internal capital generation modest due
to strong competition in German CRE lending and a high share of
the low-margin public-sector business.  A normalization of loan
impairment charges (LICs) from their currently low levels will
add pressure to profitability.

While the run-off of legacy assets will provide substantial
relief, Fitch continues to take a negative view of PBB's
intention to maintain significant public investment finance as
part of its strategic activities.  These assets' low margins
structurally dilute the bank's overall modest return on assets
and tie up significant regulatory capital.

PBB has also substantially consolidated its funding profile.
Fitch expects funding costs to remain low in the short term,
driven by benign market conditions and by PBB's ultimate state
ownership.  However, PBB's unusually large size as an independent
monoline wholesale lender will make it significantly more reliant
than its peers on large, confidence-sensitive issuance in the
public market, despite its fairly well-matched asset-liability
maturity profile.

KEY RATING DRIVERS - SUBORDINATED AND HYBRID SECURITIES

PBB's lower Tier 2 subordinated notes are notched down from the
bank's VR once to reflect their higher loss severity relative to
senior unsecured debt.  The affirmation at 'C' of the EUR350
million legacy hybrid Tier 1 securities issued through Hypo Real
Estate International Trust I reflects the low likelihood and
uncertain timing of these securities being serviced again.  The
EC's agreement to HRE group's 2008 bailout by the German
government forbids voluntary profit-driven distribution on
capital instruments (excluding SoFFin-related ones) prior to re-
privatization.

The rating actions are:

Deutsche Pfandbriefbank AG:

Long-term IDR: downgraded to 'BBB' from 'A-', placed on RWN and
   withdrawn
Short-term IDR: downgraded to 'F2' from 'F1', placed on RWN and
   withdrawn
Viability Rating: affirmed at 'bb+' and withdrawn
Support Rating: downgraded to '2' from '1', placed on RWN and
   withdrawn
Support Rating Floor: revised to 'BBB' from 'A-', placed on RWN
   and withdrawn
Commercial paper: downgraded to 'F2' from 'F1', placed on RWN
   and withdrawn
Debt issuance program: downgraded to 'BBB'/'F2' from 'A-'/'F1',
   placed on RWN and withdrawn
Senior unsecured notes: downgraded to 'BBB' from 'A-', placed on
   RWN and withdrawn
Short-term debt: downgraded to 'F2' from 'F1', placed on RWN and
   withdrawn
Lower Tier 2 subordinated debt: affirmed at 'BB' and withdrawn
Hypo Real Estate International Trust I (XS0303478118) Tier 1
   securities: affirmed at 'C' and withdrawn



===========
G R E E C E
===========


GREECE: Schauble Doesn't Rule Out Default as Talks Continue
-----------------------------------------------------------
Bertrand Benoit at The Wall Street Journal reports that Germany's
finance minister said he couldn't rule out a Greek default, a
stance that will add pressure on Athens as negotiations over
much-needed financing enter their final stretch.

Asked whether he would repeat an assurance he gave in late 2012
that Greece wouldn't default, Wolfgang Schauble told The Wall
Street Journal and French daily Les Echos that "I would have to
think very hard before repeating this in the current situation."

"The sovereign, democratic decision of the Greek people has left
us in a very different situation," Mr. Schauble, as cited by The
Journal, said, referring to the January election that delivered a
radical-left government that has vowed to reverse five years of
creditor-mandated austerity and painful economic overhauls.

In an interview in his spartan Berlin office on May 19, Mr.
Schauble, a key architect of Europe's controversial austerity-
driven response to the eurozone debt crisis, showed no
willingness to compromise in the negotiations to unlock the final
installment of Greece's EUR24 billion (US$272 billion) bailout,
The Journal relates.  Without a deal, the program will expire in
six weeks, leaving Greece with no option but to default on
billions of euros in debt repayments coming due this summer, The
Journal notes.

Even as he dismissed suggestions that the rules of Greece's
bailout can be bent, Mr. Schauble said he was ready to open talks
with the U.K. about London's demand to rewrite the rules of its
European Union membership, The Journal notes.

Mr. Schauble, who will lead a meeting of Group of Seven finance
ministers and central bankers next week in Dresden, rebuffed most
ideas from Brussels to carve a way out of the impasse in bailout
negotiations, The Journal states.

He also cautioned the European Commission, which is seen in
Berlin as too lenient with Athens, to keep to its role as one of
the three monitors of the program's implementation, alongside the
International Monetary Fund and the European Central Bank, The
Journal recounts.

Among the suggestions that Mr. Schauble rejected is the idea that
negotiations over a third bailout package, which most economists
agree is unavoidable, should start before the current program is
completed, The Journal discloses.

While Greece could be eligible for a third bailout if it
completed its program successfully and achieved a budget surplus
before interest repayments, Mr. Schauble, as cited by The
Journal, said, "Greece has yet to complete the program, it no
longer has the primary surplus it had last year, and it has said
repeatedly it doesn't want a new program."

Talks of splitting the last tranche of the current bailout into
mini-installments linked to specific steps to be taken by Athens
were also off the table, Mr. Schauble said, as were calls from
Athens for a top-level political deal to override the stranded
talks between Greek officials and representatives from Athens's
creditors, The Journal relays.  These negotiations have become
mired in Athens' refusal to implement the pension, labor market
and tax overhauls mandated by the program, The Journal states.

But Mr. Schauble insisted they had to run their course until they
came to an agreement that eurozone finance ministers could either
approve or reject, The Journal notes.

"The negotiations between Greece and the three institutions (the
European Commission, the ECB and the IMF) have always been tough,
but they have always succeeded," Mr. Schauble said.  "I have no
intention of interfering in this process."


GREECE: DBRS Lowers Long-Term Currency Issuer Ratings to 'CCC'
--------------------------------------------------------------
DBRS Inc. has downgraded the Hellenic Republic's long-term
foreign and local currency issuer ratings to CCC (high) with a
Negative trend from B, and downgraded the short-term foreign and
local currency issuer ratings to R-5 with a Stable trend from
R-4.  The ratings are no longer Under Review with Negative
Implications.

As defined in EU Regulation 462/2009, amending Regulation
1060/2009 on credit rating agencies, DBRS's ratings on Greece are
subject to certain publication restrictions, as set out in
Article 8a of the Regulation, including publication in accordance
with a pre-established calendar.  Under Article 8a, deviation of
the publication of sovereign ratings from the calendar must be
accompanied by a detailed explanation of the reasons for the
deviation.  The next scheduled publication date for its ratings
on Greece is June 12, 2015.

The deviation of this review from the calendar is due to an
increase in uncertainty over government policies and Greece's
capacity to remain current on its debt.  DBRS placed the ratings
Under Review on February 4, 2015 to reflect DBRS's elevated
concern over the potential for a deterioration in Greece's
creditworthiness as a result of actions by the Greek government
following the general elections on January 25, 2015.  In light of
the change in government, and given the importance of financial
assistance from the European Commission, European Central Bank
and International Monetary Fund, DBRS's concern over Greece's
ability to meet its financing needs had increased.

The current downgrade is due to a further increase in uncertainty
over whether Greece and its creditors will reach an agreement on
a program that restores macroeconomic stability and improves
Greece's cash position.  In the absence of an agreement,
financing sources appear to be insufficient to meet Greece's
financing needs over the foreseeable future.  This shortfall is
due to the lack of access to bond markets, as well as a delay in
an agreement between Greece and its official sector creditors
over the conditions that the creditors require in exchange for
continuing the existing financial assistance program, or entering
a new longer term lending program.  DBRS's view is that a new
longer term program is likely to be necessary to restore
macroeconomic stabilization.  The delay in an agreement has had
an adverse impact on the economic recovery, on financial
stability, and on the fiscal stance.

The Negative trend reflects the risk of a missed payment to
official creditors, or the further buildup of arrears to domestic
agents. In the coming weeks Greece faces a series of payments to
the IMF and the ECB.  DBRS's view is that a default to these
official sector creditors would likely cause an acceleration in
the withdrawal of deposits from Greek banks, and would further
undermine growth prospects.  This is turn would make it more
difficult for Greece to generate primary fiscal surpluses.  Such
a default could also jeopardize ECB Emergency Liquidity
Assistance (ELA), without which Greek banks could face lower
liquidity buffers and run the risk of insolvency.

Downward pressure on the ratings would likely result if an
agreement is not reached, or if the ECB ceases to provide
liquidity support to Greek banks.  Alternatively, DBRS could move
the trend to Stable if Greece and its creditors agree on a
financial assistance program that restores liquidity and bolsters
macroeconomic stability.  This in turn would likely stabilize
bank deposits, improve fiscal sustainability and foster economic
growth.

The existing financial assistance program, the second Economic
Adjustment Program, was extended to 30 June 2015.  If Greece
meets the conditions of the program it would be eligible for a
final tranche of EUR7.2 billion.  This would help Greece's cash
position, but would be unlikely to remove uncertainty over future
payments.  As part of the existing program, the ECB and Single
Supervisory Mechanism (SSM) could request from the European
Financial Stability Facility (EFSF) an additional EUR10.9
billion, originally transferred to the Hellenic Financial
Stability Fund (HFSF) in the form of EFSF bonds and subsequently
returned to the EFSF, to be transferred back to the HFSF for the
recapitalization and resolution of Greek banks, if necessary.

The policy conditionality of the existing program's Memorandum of
Understanding is threefold: to restore competitiveness and
growth, fiscal sustainability, and financial stability.  The
current negotiations appear to be focused on two technical issues
in the labor market and the social security system.  Excessive
restrictions in the Greek labor market maintain a high cost of
doing business, and inhibit the establishment or expansion of
large firms.  Collective dismissals of workers are not allowed,
and this forces firms to offer high severance packages or resort
to bankruptcy.  The second issue is over reducing social security
contribution rates, eliminating loopholes, better targeting
lower-end contributions to reduce the cost of doing business for
firms and strengthen labor demand, and strengthening the pension
system by improving efficiency, achieving actuarial balance over
the coming decades, ensuring consistency with fiscal targets, and
making other parametric improvements.

The Greek negotiators have allegedly agreed to harmonize value-
added tax rates, improve tax collection, and privatize a number
of state-owned entities.  However, they have not agreed to make
further changes to the labor market or social security system.
The impact of the delay in an agreement has been a liquidity
squeeze, deposit outflows from Greek banks, a setback in the
economic recovery, and a slowdown in the fiscal adjustment.  From
July 2014 to March 2015, deposits declined by EUR33.7 billion,
and are at their lowest level since September 2005.  If deposit
outflows continue, this could jeopardize financial stability and
further lower prospects for economic growth, lead to a larger
primary fiscal deficit, and impair debt sustainability.

For the remainder of 2015, Greece's obligations are mainly in the
form of principal and interest charges on IMF loans, principal
and interest payments on bonds held mainly by the Eurosystem (the
ECB and national central banks within the euro area), and
interest payments on bilateral loans to Greece under the Greek
Loan Facility (GLF).  At the same time, Treasury bill redemptions
and monthly public sector wages and pensions are sizeable.  There
are also minimal principal and interest payments on restructured
bonds held by the private sector.  The central government has
also slipped into arrears with suppliers of goods and services to
the public sector.  To improve its cash position, the central
government passed a decree on 20 April 2015 requiring local
governments, state-owned companies and public pension funds to
transfer their cash reserves to the Bank of Greece.

In the absence of an agreement with its creditors, DBRS's view is
that Greece's cash position would fall short of that needed to
meet its obligations.  Although DBRS does not classify as a
default a missed payment on any obligations other than the bonded
debt held by the private sector, a missed payment to the IMF or
ECB could nonetheless lead to further deposit outflows.  This in
turn could lead to government-imposed capital controls, or a cap
on ELA.



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


ALLIED IRISH: Fitch Lowers Issuer Default Ratings to 'BB/B'
-----------------------------------------------------------
Fitch Ratings has downgraded Bank of Ireland's (BOI) and Bank of
Ireland UK plc's (BOI UK) Long- and Short-term Issuer Default
Ratings (IDR) to 'BB+'/'B' from 'BBB'/ 'F2', and Allied Irish
Banks plc's (AIB) and AIB UK's (AIBUK) Long- and Short-term IDRs
to 'BB'/ 'B' from 'BBB'/'F2'.  The Outlook for the Long-term IDRs
are Positive.

At the same time, Fitch has upgraded BOI's and BOI UK's Viability
Rating (VR) to 'bb+' from 'bb-' and AIB's VR to 'bb' from 'b+'.

The rating actions are in conjunction with Fitch's review of
sovereign support for banks globally, which the agency announced
in March 2014.  In line with its expectations announced in March
last year, and communicated regularly since then, Fitch believes
legislative, regulatory and policy initiatives have substantially
reduced the likelihood of sovereign support for US, Swiss and
European Union commercial banks.  Following the revision of our
expectation for state support, the IDRs are now driven by these
banks', or their parents' VRs.

The rating actions are also part of a periodic portfolio review
of the Irish banking groups rated by Fitch.

KEY RATING DRIVERS - IDRs, VRs AND SENIOR DEBT RATINGS

The Long-term IDRs of BOI, BOI UK and AIB are driven by these
banks' stand-alone creditworthiness as expressed in their VRs,
which Fitch has upgraded.  The ratings reflect on-going
improvements in these banks' asset quality, business prospects,
profitability and enhanced capital flexibility.

While a number of credit metrics remain weak, with significant
legacy assets that are either non-performing or low-yielding,
such assets have been declining rapidly and profitability has
been following an upward trend over the last two years and is set
to continue into the medium-term.  As a result these banks'
capital flexibility will likely be enhanced further over the next
12-18 months.

However, both BOI and AIB continue to hold large stocks of
impaired loans (end-2014: BOI reported an impaired loan ratio of
15.0%, AIB 29.2%) and while coverage has improved significantly,
the proportion of net impaired loans to Fitch Core Capital (FCC)
FCC remains high.  Nonetheless, property-secured lending should
continue to benefit from an expected pick up in real estate
prices and from increasing volumes of house sales, both of which
are supported by Ireland's improving macro-economic environment.

The rating differential between BOI and AIB reflects AIB's
greater vulnerability to its capital from negative unexpected
falls in asset values.  Furthermore, BOI's large exposure to UK
residential mortgage loans has allowed it to benefit from the
strong improvement in the performance and profitability of these
assets over the past two years.

Fitch expects that both BOI's and AIB's profitability will
continue to improve in 2015, driven by low loan impairment
charges and widening net interest margins on the back of lower
funding costs across the sector since 2H12.  However, Fitch
expects net interest revenue to suffer from the effect of
competitive pressure on domestic mortgage loans.  Efficiency at
both banks remains low, in Fitch's opinion, as business volumes
have been affected by sharp asset deleveraging and relatively low
business generations since the global financial crisis.  However,
cost-cutting measures are being addressed by both banks, with
increased investment in technology and/or digitalization planned
and supported by lower staff costs.

FCC ratios have increased significantly at both BOI and AIB over
the past year and are reaching levels which we consider to be in
line with their risk profile.  However, the improvements have
been faster at BOI than at AIB: at end-2014, BOI's FCC/ Fitch
adjusted risk-weighted assets (RWA) ratio stood at nearly 10%, up
from 6.8% at end-2013.  AIB's capitalization continues to be
supported by a large stock of perpetual government-held
preference shares.  While its FCC/RWA ratio remained a low 7.26%
at end-2014, its Fitch Eligible Capital/RWA ratio which includes
the preference shares was a healthier 13.18%.  Conversion of
these perpetual preference share to equity would boost its
regulatory CET1 ratio, but it is possible that the bank may begin
to redeem these shares as its profitability improves.

KEY RATING SENSITIVITIES - IDRs, VRs AND SENIOR DEBT RATINGS

BOI's and AIB's VRs and IDRs take account of Fitch's expectations
of improving internal capital generation through stronger
profitability in 2015 and onward, and stable or improving asset
quality and capital ratios.  Continued rehabilitation and curing
of legacy problem loans or significant non-recourse sale of
portfolios could result in positive rating action.

The Positive Outlook on BOI's Long-term IDR reflects Fitch's
expectation that the tail risk relating to its large stock of
unreserved impaired loans will likely reduce over the next 12-18
months as deleveraging of non-core assets continues and improved
profitability further enhances the banks' capital base.  As a
result, the proportion of the bank's unreserved non-performing
loans to FCC should fall to below 100%, at which point Fitch
expects the rating to no longer be constrained to below
investment-grade.  However, achieving this objective partly
depends on continued sound performance of the Irish economy,
which renders BOI vulnerable to any unexpected adverse changes to
the Irish economy.

The Positive Outlook on AIB's rating reflects our expectation
that the ratings may be upgraded further over the next 12-18
months as improvements continue to feed through to its credit
profile.  A strengthened capital profile might also include the
conversion of a proportion of its preference shares into equity
but the amount and timing of any conversion or buy-back is still
unclear.

The IDRs and VRs could face negative pressure if any of our
expectations are not met, or if macro-economic conditions reverse
and cause further weakening of asset quality to the extent that
impairment charges would compromise the banks' profitability and
hence capital flexibility.

KEY RATING DRIVERS AND SENSITIVITIES- SUPPORT RATINGS AND SUPPORT
RATING FLOORS

The downgrade of BOI and AIB's SRs to '5' from '2' and revision
of their Support Rating Floors (SRF) to No Floor' from 'BBB'
reflects Fitch's view that senior creditors can no longer rely on
receiving full extraordinary support from the sovereign in the
event that either bank becomes non-viable.

In Fitch's view, the EU's Bank Recovery and Resolution Directive
(BRRD) and the Single Resolution Mechanism (SRM) are now
sufficiently progressed to provide a framework for resolving
banks that is likely to require senior creditors participating in
losses, if necessary, instead of or ahead of a bank receiving
sovereign support.  In the EU, BRRD has been effective in member
states since Jan. 1, 2015, including minimum loss absorption
requirements before resolution financing or alternative financing
(eg, government stabilization funds) can be used.  Full
application of BRRD, including the bail-in tool, is required from
Jan. 1, 2016.

An upgrade to the SR and upward revision to the SRF would be
contingent on a positive change in the sovereign's propensity to
support its banks.  While not impossible, this is highly unlikely
in Fitch's view.

SUBSIDIARIES AND AFFILIATED COMPANIES-KEY RATING DRIVERS AND
SENSITIVITIES

EBS Limited and AIB Group (UK) Plc are wholly-owned by AIB, and
Bank of Ireland Mortgage Bank are wholly-owned by BOI.  All of
these subsidiaries are, to varying degrees, reliant on their
respective parents for funding and capital support.  Their IDRs
are therefore based on support and are equalized with their
parents', and are sensitive to the same factors that might drive
a change in their parents' ratings.

Fitch has not assigned VRs to EBS Limited, AIB Group (UK) and
Bank of Ireland Mortgage Bank as we believe that these
subsidiaries are closely integrated within their respective
parents that they cannot be analyzed meaningfully on a stand-
alone basis.

BOI UK's IDR, on the other hand, is based on its own VR, which,
in turn, is equalized to BOI's due to high level of integration
of systems and processes across the group and BOI UK's large size
relative to the group.  However, BOI UK has its own funding
franchise through the UK Post Office, as well as stronger
capitalization and asset quality by virtue of a more benign
operating environment than its parent, BOI.  Further improvement
in its stand-alone profile could support rating upgrades ahead of
its parent.

Upward pressure on BOI UK's VR and IDR to levels higher than its
parent is possible in the longer-term, but this would be
contingent on increased independence from the group and a longer
track record as a standalone entity.

KEY RATING DRIVERS AND SENSITIVITIES - SUBORDINATED DEBT AND
OTHER HYBRID SECURITIES

The subordinated debt and other hybrid capital issued by BOI and
AIB are notched off their issuer's respective VRs and reflect the
performance of these instruments.

AIB is not paying the discretionary coupons on its subordinated
notes.  The 'C' ratings of these instruments reflect their non-
performance and sustained economic losses with weak recovery
prospects.  BOI's subordinated debt is notched once off BOI's VR,
reflecting the higher loss severity.  Its upgrade follows that of
BOI's today.  BOI UK Holding's deferrable subordinated notes
guaranteed by BOI are notched three times off BOI's VR, twice for
non-performance given the notes cumulative and deferrable coupon
payments at the issuer's discretion and once for loss severity
given the absence of write down or equity conversion features.
Their upgrade mirrors that of BOI's VR.

The ratings of all subordinated instruments are primarily
sensitive to any change in the VRs of these institutions, or to
changes in their notching.

The rating actions are:

AIB

Long-term IDR: downgraded to 'BB' from 'BBB'; Outlook Positive
Short-term IDR: downgraded to 'B' from 'F2'
Viability Rating: upgraded to 'bb' from 'b+'
Support Rating: downgraded to '5'
Support Rating Floor: revised to 'No Floor' from 'BBB'
Senior unsecured notes: downgraded to 'BB' from 'BBB'
Short-term debt: downgraded to 'B' from 'F2'
Commercial paper: downgraded to 'B' from 'F2'
Subordinated notes: affirmed at 'C'

AIB (UK)

Long-term IDR: downgraded to 'BB' from 'BBB'; Outlook Positive
Short-term IDR: downgraded to 'B' from 'F2'
Support Rating: downgraded to '3' from '2'

EBS

Long-term IDR: downgraded to 'BB' from 'BBB'; Outlook Positive
Short-term IDR: downgraded to 'B' from 'F2'
Support Rating: downgraded to '3' from '2'
Senior unsecured notes: downgraded to 'BB' from 'BBB'
Short-term debt: downgraded to 'B' from 'F2'

BOI

Long-term IDR: downgraded to 'BB+' from 'BBB'; Outlook Positive
Short-term IDR: downgraded to 'B' from 'F2'
Viability Rating: upgraded to 'bb+' from 'bb-'
Support Rating: downgraded to '5'
Support Rating Floor: revised to 'No Floor' from 'BBB'
Senior unsecured notes: downgraded to 'BB+' from 'BBB'
Short-term debt: downgraded to 'B' from 'F2'
Commercial paper: downgraded to 'B' from 'F2'
Subordinated debt: upgraded to 'BB' from 'B+'
BOI UK Holdings deferrable subordinated notes guaranteed by BOI:
  upgraded to 'B+' from 'B-'

BOI Mortgage Bank

Long-term IDR: downgraded to 'BB+' from 'BBB'; Outlook Positive
Short-term IDR: downgraded to 'B' from 'F2'
Support Rating: downgraded to '3' from '2'

BOI UK Plc

Long-term IDR: downgraded to 'BB+' from 'BBB'; Outlook Positive
Short-term IDR: downgraded to 'B' from 'F2'
Viability Rating: upgraded to 'bb+' from 'bb-'
Support Rating: downgraded to '3' from '2'


ENDO INTERNATIONAL: S&P Affirms 'B+' CCR, Outlook Stable
--------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B+' corporate
credit rating on Dublin-based pharmaceutical company Endo
International PLC (Endo).  The outlook is stable.

At the same time, S&P is affirming its 'BB' rating on senior
secured debt co-issued by Endo Luxembourg Finance I S.a.r.l. and
Endo LLC, subsidiaries of Endo.

S&P placed its 'B+' ratings on senior unsecured debt co-issued by
Endo Finance LLC and Endo Finco Inc., subsidiaries of Endo, on
CreditWatch with negative implications, reflecting the dilutive
impact of the expansion in overall debt levels on unsecured
recovery.  S&P will resolve its CreditWatch once the details of
the acquisition financing are announced.

"The rating affirmation reflects our belief that Endo can
successfully integrate Par's business, enhance cash flow
generation, and deleverage its balance sheet, albeit at a slower
pace than we had originally expected," said Standard & Poor's
credit analyst Colm Kelly.

The ratings on specialty pharmaceutical company Endo reflect
business risk that is characterized by a sizable and diverse
high-margin pharmaceutical portfolio offset by increased generic
competition to lead product Lidoderm and relatively high
leverage.

Endo competes in the specialty branded and generic drug business,
and has a growing international presence in select markets.  The
company's business continues to be in transition.  The company's
long-standing top products -- the branded patented pain
medication patch Lidoderm as well as a number of other key
branded products
-- have lost market exclusivity in recent years, and sales and
earnings have significantly declined.  To offset the lost EBITDA
and cash flows, the company has been aggressive on the
acquisition front, acquiring or planning to acquire a number of
companies in the past year, such as generic drug makers Boca
Pharmacal LLC and Dava and specialty pharmaceutical companies
Paladin Labs and Auxilium.

Endo focuses on difficult-to-manufacture generics that are less
susceptible to competition, steadily launching new generic drugs
and capitalizing on pricing opportunities.  The company has a
solid franchise in pain management medication, which also has
relatively more limited competition.

The acquisition of Par will provide Endo with additional scale,
product diversification, and research and development
capabilities in the competitive generic pharmaceutical market,
where cost, reliability, and breadth of product offering are
critical, but does not alter S&P's assessment of Endo's business
risk as "fair".

S&P's stable outlook incorporates its expectations that the
company will effectively and efficiently integrate its acquired
businesses, and quickly realize synergies.  Margins should remain
steady to improving.  However, S&P also expects the company will
remain acquisitive, keeping leverage in excess of the 6x area.

Should Endo encounter a disruption to its current solid free cash
flow generation, possibly due to acquisition missteps or a
weakening of its generic franchise, S&P would consider a
downgrade.

A sustained decline in debt leverage, to under 5x, would drive a
future ratings upgrade.  However, given S&P's expectation that
Endo will remain acquisitive over the long term, it thinks an
upgrade due to de-levering is unlikely.  Instead, an upgrade
scenario is more likely predicated on the company achieving a
greater presence in the specialty and generic drug markets and a
more established product pipeline, factors that would strengthen
business risk.  This would likely occur over a multi-year
timeframe and would be indicated by the company generating
incremental generic market share from its existing asset base.


ST PAULS CLO II: Fitch Affirms 'BB+sf' Rating on Class E Notes
--------------------------------------------------------------
Fitch Ratings has affirmed St Pauls CLO II Limited as:

EUR240 million class A affirmed at 'AAAsf'; Outlook Stable
EUR40 million class B affirmed at 'AAsf'; Outlook Stable
EUR26 million class C affirmed at 'Asf'; Outlook Stable
EUR17 million class D affirmed at 'BBBsf'; Outlook Stable
EUR15 million class E affirmed at 'BB+sf'; Outlook Stable
EUR62 million subordinated notes: not rated

St Paul's CLO II Limited is an arbitrage cash flow collateralized
loan obligation.  Net proceeds from the issuance of the notes
were used to purchase a EUR400 million portfolio of European
leveraged loans and bonds.  The portfolio is managed by
Intermediate Capital Managers Limited, a wholly owned subsidiary
of Intermediate Capital Group PLC.

KEY RATING DRIVERS

The affirmation reflects the transaction's stable performance
over the last 12 months.  There have been no reported defaults
over this period and the transaction is currently passing all
portfolio profile and collateral quality tests.

The portfolio has lost EUR1.39 million of par during the same
period, mainly due to the sale of distressed assets in December
2014 and February 2015, but remains EUR0.29 million above target
par.  The portfolio notional has increased by EUR12.6 million to
EUR395 million as only 1.2% is currently held as cash compared
with 4.3% a year ago.

The portfolio has experienced negative rating migration over the
last 12 months with assets rated 'B+' or above falling to 19.14%
from 29.84%.  Assets rated 'B-' or below have subsequently
increased to 80.8% from 69.1%.

Healthcare remains the largest Fitch industry concentration and
the portfolio has increased exposure to the pharmaceuticals and
packaging and containers.  Portfolio concentration has fallen
within retail and food, beverage and tobacco.

Assets from Germany, UK and France account for over 50% of the
portfolio.  Peripheral exposure (defined as exposure to countries
with a Country Ceiling below 'AAA') accounts for 4% of the
portfolio and resides within Italy and Spain.  This represents a
1.7% fall in peripheral exposure compared with a year ago.

RATING SENSITIVITIES

A 25% increase in the expected obligor default probability or
reduction in the expected recovery rates would lead to a
downgrade of up to three notches for the rated note.



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


CORDUSIO RMBS 4: Fitch Lowers Rating on Class D Notes to 'Bsf'
--------------------------------------------------------------
Fitch Ratings has upgraded one tranche of the Cordusio RMBS
series, downgraded one and placed three tranches of Cordusio 4 on
Rating Watch Negative (RWN).  11 tranches have been affirmed, as:

Cordusio RMBS S.r.l (Cordusio 1):

  Class A2 (ISIN IT0003844948): affirmed at 'AA+sf'; Outlook
   Stable
  Class B (ISIN IT0003844955): affirmed at 'AA+sf'; Outlook
Stable
  Class C (ISIN IT0003844963): affirmed at 'BBB+sf'; Outlook
   Stable

Cordusio RMBS 2 S.r.l (Cordusio 2):

  Class A2 (ISIN IT0004087174): affirmed at 'AA+sf'; Outlook
   Stable
  Class B (ISIN IT0004087182): upgraded to 'AA+sf' from 'AAsf';
   Outlook Stable
  Class C (ISIN IT0004087190): affirmed at 'BBB+sf'; Outlook
   revised to Stable from Negative

Cordusio RMBS 3 - UBCasa 1 S.r.l. (Cordusio 3):

  Class A2 (ISIN IT0004144892): affirmed at 'AA+sf'; Outlook
   Stable
  Class B (ISIN IT0004144900): affirmed at 'AAsf'; Outlook Stable
  Class C (ISIN IT0004144934): affirmed at 'A+sf'; Outlook
revised
   to Stable from Negative
  Class D (ISIN IT0004144959): affirmed at 'BBB-sf'; Outlook
   Negative

Cordusio RMBS Securitisation S.r.l. - Series 2007 (Cordusio 4):

  Class A2 (IT0004231236): 'AA+sf'; placed on RWN
  Class A3 (IT0004231244): 'AA+sf'; placed on RWN
  Class B (IT0004231285): 'AA-sf'; placed on RWN
  Class C (IT0004231293): affirmed at 'Asf'; Outlook Negative
  Class D (IT0004231301): downgraded to 'Bsf' from 'BBsf';
Outlook
   Stable
  Class E (IT0004231319): affirmed at 'CCCsf'; Recovery Estimate
   revised to 75%

The four prime Italian RMBS are backed by loans originated and
serviced by UniCredit S.p.a. (BBB+/Stable/F2).

KEY RATING DRIVERS

Payment Interruption Risk Unmitigated

Fitch has tested the liquidity available in the transactions to
cover senior fees, swap payments and interest on notes following
a servicer disruption event.  In Fitch's opinion, Cordusio 4 is
exposed to payment interruption risk as the cash reserve is
currently depleted due to the transaction's deteriorating
performance.  For this reason we have placed the class A2, A3 and
B notes on RWN.  The agency will monitor the progress of
potential remedial actions (if any) for Cordusio 4 and take
rating action accordingly.

Fitch found that the available cash reserves and the other
structural mitigants in Cordusio 1, 2 and 3 are currently
sufficient to mitigate payment interruption risk for at least one
payment date under an increasing Euribor scenario.

Diverging Asset Performance

Cordusio 1 and 2 have continued to show a solid performance in
the past 12 months.  The volume of defaulted claims, defined as
loans in arrears for more than 12 months, ranges between 1.3%
(Cordusio 1) and 1.9% (Cordusio 2) of the initial pool, while
late stage arrears (loans with three or more monthly payments
overdue) are reported around 1.6% of the current pool.

In contrast, Cordusio 3 and 4 have shown a weaker asset
performance as the volume of gross defaults now ranges between
4.2% (Cordusio 4) and 4.9% (Cordusio 3) of the initial pool, up
by 50 bp compared with February 2014.  The advanced delinquency
ratio has remained broadly stable in Cordusio 4 at 2.2% of the
current pool, while in Cordusio 3 it increased to 2.7% from 2.2%
in February 2014.

In Fitch's view the weaker asset performance of Cordusio 3 and 4
is driven by the more prominent exposure to foreign borrowers,
between 16.75% (Cordusio 4) and 18.5% (Cordusio 3), and broker-
originated loans, between 62% (Cordusio 4) and 92.3% (Cordusio 3)
of the current pool.

Fitch believes that the performance of Cordusio 1 and 2 is likely
to remain stable, reflected in the upgrade of the mezzanine
tranche of Cordusio 2 and the affirmation and Stable Outlook on
the rest of the notes.  In contrast, Cordusio 3 and 4 may
experience further performance volatility given the more adverse
portfolio characteristics, as reflected in the Negative Outlooks
on the bottom of the capital structure for both transactions.
This is also reflected in the downgrade of the class D notes in
Cordusio 4, in addition to the thin credit support available to
this class of notes.

Recovery Income within Expectations

Fitch received loan-by-loan recovery data, which showed that as
of August 2014 between 6.7% (Cordusio 4) and 27.3% (Cordusio 1)
of the defaulted claims had been closed with an average recovery
rate above 90% of the defaulted balance.  Between 5.2% (Cordusio
3 and 4) and 7.8% (Cordusio 2) of the loans are re-performing,
while loans under payment plans are about 11%.  In Fitch's view,
the recovery timing remains lengthy and strongly affects the
final recovery rate.  Nevertheless, given the low current loan-
to-value ratios of between 25% (Cordusio 1) and 46% (Cordusio 3),
Fitch believes that losses on defaulted positions should remain
limited.

Adequate Credit Support

The credit support available to majority of the rated notes
increased over the past year in response to the steady
amortisation of the underlying pools, at an average annual rate
between 11.7% (Cordusio 4) and 24.2% (Cordusio 1).  This is
currently sufficient to withstand current rating stresses, as
reflected in the affirmation of the majority of the tranches and
the higher rating for the mezzanine tranche of Cordusio 2.

RATING SENSITIVITIES

Changes to Italy's Long-term Issuer Default Rating (BBB+/Stable)
and the rating cap for Italian structured finance transactions,
currently 'AA+sf', could trigger rating changes on the notes.

Further drawings to the cash reserve of Cordusio 3 (currently at
66.3% of its target) could expose the transaction to unmitigated
payment interruption risk and trigger negative rating action on
the junior notes.



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


BSN MEDICAL LUXEMBOURG: S&P Affirms 'B+' LT CCR, Outlook Stable
---------------------------------------------------------------
Standard & Poor's Ratings Services said that it affirmed its 'B+'
long-term corporate credit rating on BSN Medical Luxembourg Group
Holding S.a.r.l. (BSN; formerly Boston Luxembourg II S.a.r.l.),
the parent company of Germany-based health care group BSN
Medical. The outlook is stable.

At the same time, S&P assigned a 'B+' issue rating to the
proposed EUR360 million term loan due in 2019.  S&P assigned a
recovery rating of '3' to the proposed notes, indicating S&P's
expectation of meaningful (50%-70%) recovery in the event of a
payment default.  Recovery expectations are in the lower half of
the 50%-70% range.

The issue and recovery ratings on the proposed term loans are
based on preliminary information and are subject to the
successful issuance of the notes and S&P's satisfactory review of
the final documentation.

S&P also placed the 'BB-' rating on BSN's senior secured bank
facilities on CreditWatch with negative implications.

S&P understands that BSN plans to raise a EUR360 million senior
secured term loan to partially refinance its mezzanine debt and
senior secured bank facilities.  The affirmation reflects S&P's
view that the refinancing will not weaken BSN's debt protection
metrics beyond the levels S&P assumes under its base case, and
that it is therefore neutral to S&P's assessment of BSN's
financial risk profile.

BSN plans to use the EUR360 million loan, alongside cash on its
balance sheet, to partially refinance its existing mezzanine debt
of EUR287 million, the EUR31 million drawn portion of its capital
expenditure (capex)/acquisition facility, and its EUR50 million
equivalent Australian dollar-denominated term loan B.  S&P
anticipates that the downsized mezzanine debt will be re-priced
with the existing mezzanine lenders, and the new capital
structure should eventually lead to lower interest expense,
improving debt-service metrics.  The new debt will mature in
2019, which is similar to the maturity of the existing senior
bank facility.  S&P expects BSN's leverage to slightly improve to
10.4x in 2015 from 11.5x in 2014.  S&P projects that BSN should
be able to maintain Standard & Poor's-adjusted funds from
operations (FFO) cash interest coverage at about 2.5x in 2015-
2016, improving thereafter.

S&P derives its 'B+' long-term corporate credit rating on BSN
from its anchor of 'b+' (S&P's starting point for assigning an
issuer credit rating under its corporate criteria), which in turn
is based on S&P's assessments of BSN's business risk profile as
"satisfactory" and its financial risk profile as "highly
leveraged."  None of the analytical modifiers affect the anchor.

BSN is one of the leading manufacturers of orthopedic, wound
care, and compression therapy products.  S&P views this section
of the medical supplies market as niche because of the relatively
specialized, and in some cases custom-made, products.  Although
they play an important part in the treatment process, the cost of
BSN's products generally account for only a fraction of the cost
of treatments.  As such, S&P considers that these products should
be more resilient to cuts in health care spending and disposable
income than many other types of health care products and
equipment.

In S&P's opinion, BSN's well-established brands and its
consequent ability to charge premium prices are reflected in its
solid operating margin of about 23%-24%.

These strengths are partially offset, in S&P's view, by BSN's
exposure to changes in reimbursement policies, because reimbursed
products account for most of the company's revenues.  S&P
anticipates that austerity measures and cuts in public funding
will continue to keep overall care costs under the constant
scrutiny of health care buyers in BSN's major markets.

S&P's assessment of BSN's financial risk as "highly leveraged"
reflects S&P's base case that that the Standard & Poor's-adjusted
debt-to-EBITDA ratio will be about 10.3x on average over the next
two years.  S&P's adjustments also include about EUR690 million
of preferred equity certificates and adjustments of about EUR79
million for operating leases and pensions.  Although S&P views
the shareholder loan as debt-like, it recognizes its cash-
preserving function.  Excluding this debt-like instrument, S&P
would still assess the financial risk profile as "highly
leveraged" because it forecasts debt to EBITDA at more than 5x by
Dec. 31, 2015.  BSN's high leverage is, in S&P's view, partially
mitigated by the company's relatively low ongoing capital
investments and working capital requirements, which, together
with strong conversion of profits into cash, translates into
relatively stable free operating cash flow (FOCF; defined as cash
flow from operations after interest, tax, working capital, and
capex) on an average over the next two years.

In addition, S&P forecasts that the company will be comfortably
able to service its cash paying interest obligations of about
EUR69 million.  S&P estimates that FFO (EBITDA minus net interest
expenses and current tax expenses, plus any other applicable
adjustments) cash interest coverage will remain about 2.5x on
average over the next two years.  S&P expects the company to have
negative free operating free cash flows in 2015 due to ongoing
footprint rationalization and the need to maintain inventories.
However, S&P anticipates that BSN will return to neutral or
positive free operating cash flows in 2016 and beyond.

S&P's base case assumes:

   -- Minimal impact from macroeconomic cycles, as the health
      care equipment/products industry is noncyclical in nature.

   -- Wound care and vascular segment and the orthopedics segment
      of the health care equipment and products industry to grow
      at a low- to mid-single-digit rate, reflecting an ageing
      population, and increased prevalence and diagnosis of
      diabetes and hypertension.

   -- Revenue growth in the mid-single-digit range in 2015-2016,
      reflecting strong performance in the advanced wound care
      segment, incorporating the benefits of the new product
      development and wider sales footprint.  S&P anticipates
      that the orthopedics segment will grow in the low-single-
      digit range, which is in line with overall market growth.

   -- EBITDA margins of 23%-24% in 2015-2016, reflecting ongoing
      improvements in operating efficiency, an improving product
      mix from the higher growth rate of the wound care and
      vascular segment, and economies of scale as BSN utilizes
      its global platform more.  Capex of US$40 million in 2015-
      2016.

   -- No acquisitions in 2015-2016.

   -- No shareholder remuneration in terms of cash dividends or
      share buy backs in 2015-2016.

Based on these assumptions, S&P arrives at these credit measures
for 2015-2016:

   -- EBITDA margins of 23%-24%.

   -- Debt/EBITDA of 10.3x on average in 2015-2016.

   -- FFO cash interest coverage of more than 2.5x.

The stable outlook reflects S&P's view that, over the next 12 to
18 months, BSN will likely sustain underlying revenue growth,
despite potentially challenging conditions depending on changes
to government funding of health care.

This should enable BSN to at least maintain Standard & Poor's-
adjusted funds from operations (FFO) cash interest coverage of
above 2x -- a level that should enable the company to adequately
service its debt liabilities and other fixed charges, as well as
comply with its covenants.  S&P views this level of debt service
coverage, combined with stable and improving free cash flow
generation, as commensurate with S&P's 'B+' rating on BSN.

S&P could lower the rating if BSN experiences a significant
decline in its operating performance and profitability, which
could cause S&P to review its assessment of its business risk
profile.  The most likely reason for such a decline would be
deteriorating operating margins, because of an inability to
innovate and pass on price increases or following a loss of key
accounts.  S&P could also lower the rating if the company's
ability to comfortably service its fixed costs deteriorates or if
the covenant headroom narrows to levels that S&P no longer views
as adequate.

In S&P's opinion, a positive rating action is unlikely over the
next 12-18 months due to BSN's high adjusted leverage.  However,
S&P could raise the rating if the group were to achieve and
maintain debt to EBITDA below 5x.  In view of the amount of
deleveraging required to achieve this, S&P considers it would
most likely occur because of a change in financial policy.



===================
M O N T E N E G R O
===================


MONTENEGRO: Moody's Says Fiscal Strength Deteriorates
-----------------------------------------------------
Montenegro's (Ba3 negative) fiscal strength has deteriorated in
the wake of the double-dip recession of 2008-09 and 2012,
reflected in its debt-to-GDP ratio which has increased to almost
58.0% in 2014, more than doubling from 2007's 27.5% level.
Moody's Investors Service notes that the construction of the
mostly loan-funded, EUR809 million (about 23.8% of GDP) Bar-
Boljare highway's priority section over the next four years will
increase the debt ratio further to almost 70% of GDP.

Moody's report, an annually updated analysis of the government of
Montenegro. Moody's subscribers can access this report via the
link provided at the end of this press release.

The increased investment activity amid a subdued savings rate
also implies a widening of external imbalances. The construction
of the highway has been a key priority for the Montenegrin
government since the country's independence in 2006 as it is
expected to benefit Montenegro's longer-term growth, trade and
diversification potential in the tourism industry.

Mitigating the deteriorating debt metrics is the country's high
revenue generation capacity, which supports debt affordability
even at the higher projected level in line with Ba3 peers. The
country's growth outlook is likely to benefit from the highway
construction in addition to a heavy pipeline of mostly FDI-funded
investment projects already underway in the tourism and energy
sectors.

Montenegro's institutional strength benefits from progress in EU
integration and accession negotiations, which is driving
improvements in institutional quality and in the operating
environment.

The outlook on Montenegro's Ba3 government bond rating is
negative. Evidence of fiscal or external metrics performing worse
than expected, due to cost overruns or the crystallization of
contingent liabilities, could put further downward pressure on
the rating, as could signs of reduced access to the international
capital markets to roll over maturing liabilities. Negative
foreign direct investment (FDI) or weaker tourism activity from a
prolonged Russia/Ukraine conflict would also be credit negative.

Conversely, a lower-than-expected deterioration in fiscal and
external imbalances, or positive economic spillovers in the form
of significantly higher growth rates following a boost in capital
deepening, could stabilize Montenegro's rating outlook.



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


MESDAG BV: Fitch Affirms 'CCsf' Rating on Class F Notes
-------------------------------------------------------
Fitch Ratings has affirmed Mesdag (Delta) B.V.'s notes, as:

  EUR376.7 million class A (XS0307565928) affirmed at 'BBsf';
   Outlook Stable

  EUR44.7 million class B (XS0307574599) affirmed at 'BB-sf';
   Outlook revised to Negative from Stable

  EUR50.9 million class C (XS0307576701) affirmed at 'B-sf';
   Outlook Negative

  EUR61.1 million class D (XS0307578749) affirmed at 'CCCsf';
   Recovery Estimate RE10%

  EUR46.7 million class E (XS0307580307) affirmed at 'CCsf; RE0%

  EUR24.7 million Class F (XS0307581370) not rated

KEY RATING DRIVERS

The affirmation and revision of the Outlook on the class B notes
to Negative reflects the ongoing underperformance of the Dutch
secondary property market, despite some signs of stabilization in
certain markets, and lower recovery expectations for the loan,
which is among the largest in the European CMBS portfolio.

The remaining 58 commercial properties (predominantly office,
retail and industrial) located in the Netherlands are valued at
EUR573.6 million, based on a valuation completed in December
2014.  Fitch considers this figure to be in excess of possible
purchase prices, particularly when considering the limited term
to maturity and current market conditions for secondary assets.

The vacancy level was reported at 21.7% in April 2015, up from
11.3% at closing in July 2007 but stable since the last rating
action in May 2014.  In contrast, the net operating income for
the portfolio has declined, reducing by around 7.5% since the
last rating action.

Since the last rating action, there have not been any loan
repayments, either through asset sales or cash sweep, leaving
EUR604.8 million outstanding at the April 2015 interest payment
date (IPD).  There are two sales expected in the near future, the
Bingerweg 1 property that will result in a EUR550,000 repayment
at the July 2015 IPD.  The servicer has again waived the
requirement to repay the allocated loan amount (ALA) and 15%
disposal premium (the minimum disposal proceeds), but the sale
does meet the ALA alone.  The other potential sale is subject to
certain approvals from its municipality in relation to zoning
conditions and has a market value of EUR3.7 million.  The failure
of the last sales to meet the ALAs (leaving aside the additional
15% release premium) or only meet the ALAs indicates how levered
the loan has become and the related difficulties the borrower
will face in obtaining refinancing.

Fitch does not expect the loan to repay in full by its maturity
in December 2016.  Instead, repayment will likely require a
workout to be carried out by the issuer, probably at a
substantial loss for junior noteholders.  To avoid defaulting on
the notes, the issuer will have until note maturity in January
2020 to complete liquidation in the event of loan default.

RATING SENSITIVITIES

Further deterioration in the performance of the income profile of
the portfolio or a worsening of the Dutch secondary property
markets could lead to negative rating actions.

Fitch estimates 'Bsf' recoveries of EUR433.1 million.


REFRESCO GERBER: Moody's Raises CFR to 'Ba3', Outlook Stable
------------------------------------------------------------
Moody's Investors Service upgraded the corporate family rating of
Refresco Gerber B.V. to Ba3 from B2 and its probability of
default rating to Ba3-PD from B2-PD. Concurrently, Moody's has
upgraded to B1 from B3 the rating on the senior secured notes due
to be redeemed on June 1, 2015. The rating outlook is stable.

The rating action concludes Moody's review of Refresco Gerber's
capital structure after completion of the Amsterdam initial
public offering (IPO), with approximately 48% of the capital now
in public ownership. Together with a new bank loan of EUR522
million and EUR71 million of cash on balance sheet, net IPO
proceeds of EUR91 million from the primary offering will be used
to redeem existing floating and fixed rate notes and pay call
premium as well as associated transaction fees.

Pro-forma for the IPO and the refinancing, Refresco Gerber's
adjusted gross leverage ratio (as adjusted by Moody's mainly for
operating leases) as of 31 December 2014 improved to 3.2x from
3.8x prior to the transaction.

The Ba3 CFR also reflects the company's (1) solid position as a
leading European producer of private-label beverages with a
strengthening European A-brand contract manufacturing business;
(2) relatively strong product diversity and good geographic
diversity; (3) recent improvement in profitability mainly driven
by merger synergies ; and (4) good liquidity profile, which
Moody's projects to be maintained through the intermediate term.
However, Moody's notes that the rating remains constrained by the
company's (1) weak underlying volume growth; (2) exposure to
volatile commodity prices and price competition from branded
competitors; and (3) high customer concentration, albeit
declining.

Refresco Gerber achieved strong improvement in margins last year
as reflected by Moody's adjusted EBITA margin up to 6.8% in FY
2014 from 4.8% for FY 2013, and approximately half of the margin
improvement related to merger synergy benefits with the rest
related to the company's decision to let go lower-margin
contracts and the benign commodity price environment. In the
first quarter of 2015 the company reported revenue of EUR458.2
million, in line with the same period last year. EBITDA improved
to EUR37.1 million compared to EUR31.7 million in first quarter
2014, mainly driven by the increase in gross profit margin per
litre of 14.2 euro cents (13.8 euro cents in Q1 2014) thanks to
synergies benefits derived from the merger.

However, Moody's does not expect significant de-leveraging over
the rating horizon. Moody's cautions that margins per litre may
decrease over time as a result of the company's discretionary
pricing actions to increase volumes and of greater pricing
pressure resulting from the weak grocery retail environment in
many of Refresco Gerber's markets. On the other hand, Moody's
expects further operational synergies to come from planned and
scheduled plant closures.

Refresco Gerber benefits from a good liquidity position. In
addition to the EUR25 million cash balance pro forma the
transaction, the company has a EUR150 million 5-year RCF
available and expected to remain undrawn. Regarding Refresco
Gerber's dividend policy, Moody's expects a pay-out ratio at 35%
to 50% of net income adjusted for exceptional items.

Refresco Gerber's stable outlook reflects Moody's expectations
that the company will be able to maintain its current trading
performance over the next 12 months, as well as continue to
demonstrate the synergy benefits from the merger on both EBITDA
and margins, in addition to maintaining a solid liquidity
profile.

There could be positive pressure if (1) the Moody's-adjusted
debt/EBITDA ratio falls sustainably below 2.5x; and the company
maintains a financial policy consistent with this leverage level;
(2) the company improves its Moody's adjusted EBITA margin to
around 7% on a sustained basis; and (3) maintains a solid
liquidity profile including positive free cash flow.

The ratings could be lowered if (1) earnings deteriorated,
resulting in the Moody's-adjusted debt/EBITDA ratio reverting
towards 4.0x; or (2) EBITA margins fall and/or liquidity concerns
emerge. Moody's could also consider downgrading the ratings in
event of any material acquisitions or change in financial policy.

The principal methodology used in these ratings was Global Soft
Beverage Industry published in May 2013. 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 Rotterdam, the Netherlands, Refresco Gerber
(formerly Refresco) is a leading European manufacturer of private
label soft beverages. The company has operations in nine
countries across Europe. Refresco Gerber's private label product
portfolio includes fruit juices, carbonated soft drinks (CSD),
non-carbonated soft drinks (still drinks), functional drinks,
ready-to-drink (RTD) teas, and bottled water. The company also
manufactures widely recognized European and international brands
or "A-brands" of beverages on contract, such as Orangina-
Schweppes, Coca-Cola and PepsiCo.


SRLEV NV: Moody's Reviews B3(hyb) Subordinated Debt Rating
----------------------------------------------------------
Moody's Investors Service extended the review with direction
uncertain on the Baa3 insurance financial strength ratings
(IFSRs) of SRLEV NV and REAAL Schadeverzekeringen NV, the main
insurance operations of SNS REAAL NV, and the B3(hyb)
subordinated debt rating of SRLEV's hybrid instruments. The
program ratings of the holding company, SNS Reaal N.V., remain
unaffected by this rating action.

The review with direction uncertain was initially placed on the
Feb. 19, 2015, following the announcement of the sale to Anbang
Insurance Group Co. Ltd. (Anbag, unrated), a 100% subsidiary of
Anbang Insurance Group Co. Ltd. (unrated), a Chinese insurance
company.

Moody's said that the continuation of the review reflects the
continuing uncertainties around the completion of the disposal of
the insurance operations to Anbang. Under the agreement announced
on 16 February 2015, Anbang will pay a cash consideration of
EUR150 million. The buyer also commits to (1) strengthen the
capitalisation of the Dutch insurer to a Solvency II level of
between 140-150% (YE 2014- estimated 100%), resulting in an
additional capital injection between EUR770 million and EUR1.0
billion and (2) repay EUR552 million of internal loan between SNS
Bank and SNS Reaal N.V. The sale is expected to be completed in
the third quarter of 2015.

The review with direction uncertain on the IFSRs of SRLEV NV and
REAAL Schadeverzekeringen NV continues to reflect a variety of
positive and negative credit scenarios. Positive pressures could
arise if the Anbang transaction is completed resulting in a
capital injection of between EUR770 million to EUR1.0 billion.
Conversely, negative pressures could arise if the transaction is
not completed.

There are still some uncertainties on the completion of the sale.
In particular, in addition to the customary conditions of
regulatory approvals from the Chinese and Dutch insurance
regulators, in case of a decline in the consolidated
shareholders' equity of REAAL NV by 25% or more in the period
between Dec. 31, 2014 and June 30, 2015, Anbang has the right not
to purchase the Dutch insurer, incurring in no penalties. Moody's
believes that this introduces some uncertainty on the completion
of the sale, although Moody's note the company announced that
consolidated shareholders' equity increased in the first months
of 2015 on the announcement of the 2014 annual results in April.
In addition the group has taken various measures to protect its
capitalisation against declines in interest rates, by increasing
its hedges to protect from the low interest rate environment and
by further de-risking its investments. Nevertheless pressures on
insurance earnings, the large duration mismatch between assets
and liabilities together with the challenging insurance market in
Netherlands continues to create uncertainties on the level of
shareholders' equity that company will report as at 30 June 2015
and thus on the completion of the sale.

If the sale does not complete, Moody's expects SNS REAAL's
insurance operation to continue to weaken going-forward in the
absence of external support. The Solvency I capital ratio of the
Dutch insurer fell to 136% in 2014, resulting in a 36 percentage
points decline since YE2013, driven mainly by the reduction in
interest rates, high duration mismatch between SRLEV's assets and
liabilities, and model/parameter adjustments. Under the
forthcoming implementation of Solvency II, Reaal NV reported an
estimated Solvency II coverage of a low 100% at YE2014.

The following factors could exert upward pressure on the ratings:
(1) acquisition by Anbang which will inject between EUR770
million and EUR1.0 billion into the insurer (2) significant
improvement of the fundamentals of the insurance operations such
as sustainable good levels of capitalization and profitability,
while maintaining strong market positions.

The following factors could exert downward pressure on the
ratings: (1) no completion of the transaction with Anbang,
resulting in a sustained deterioration of capitalization of the
insurer (2) higher risk of longer coupon deferral on the hybrids
and /or not payment of the principal.

List of Affected Ratings:

The following ratings remain on review with direction uncertain

-- SRLEV NV's insurance financial strength rating Baa3;

-- REAAL Schadeverzekeringen NV's insurance financial strength
    rating Baa3;

-- SRLEV NV's backed subordinated debt rating B3(hyb);

-- SRLEV NV's backed junior subordinated debt rating B3(hyb);

The methodologies used in these ratings/analysis were Global Life
Insurers published in August 2014, and Global Property and
Casualty Insurers published in August 2014.


STORK TECHNICAL: Moody's Affirms 'Caa1' CFR, Outlook Stable
-----------------------------------------------------------
Moody's Investors Service affirmed Stork Technical Services Group
B.V.'s (STS or the company) corporate family rating at Caa1 and
probability of default rating at Caa1-PD. It also affirmed the
rating of Stork Technical Services HOLDCO B.V. senior secured
EUR273 million notes due 2017 at Caa2. The outlook on the ratings
has been changed to stable from positive.

The change in outlook to stable from positive reflects the
significant downside risks that the company faces in connection
with the reduced oil price, alongside expectations of continued
negative free cash flow. Whilst the oil price is extremely
volatile Moody's expects only a gradual recovery in oil prices
over 2015 and 2016 and that this is likely to have an adverse
effect on the company's performance. Moody's anticipates that the
company will maintain relatively stable performance in 2015 as a
result of a strong momentum of new contract wins and its high
proportion of stable maintenance service activities, but that
there are late cycle downside risks likely to materialize from
2016. Moody's considers that there are a wide range of outcomes
for trading results from 2016 and alongside the downside risks
the company may also continue in a stable trajectory, and
accordingly the outlook has been changed to stable.

The Caa1 CFR reflects: (i) the relatively low EBITDA margins
(5.4% on a reported basis in the year ended 31 December (FY)
2014) as a result of which the company is highly susceptible to
changes in volumes and pricing; (ii) the risk of price pressure
in oil and gas markets spreading from the North Sea to other
geographies, particularly on contract renewal, driven by the
lower oil price; (iii) the potential for contract cancellations
and deferrals as oil and gas customers reduce their capex
budgets; (iv) pressures on liquidity as a result of ongoing
negative free cash flow generation, seasonal swings in working
capital, contract cash flow volatility, intra-quarter
requirements and operating cash held in subsidiaries; and (v)
growing exposure to volatile emerging markets, in particular
Columbia.

However, STS's rating is supported by (i) its solid market
position as a leading provider of asset integrity services,
holding well established positions in Europe and growing in
emerging markets; (ii) the stable nature of its core maintenance
business which provides critical services to existing production
plants, with long term customer relationships, deep knowledge of
customers' assets and high risks of switching suppliers; (iii)
elements of flexibility within the company's cost base,
particularly in the North Sea where the greater risk of contract
deferral is mitigated by significant use of sub-contractors; (iv)
the strong momentum over FY2014 and positive pipeline of new
contracts; (v) the recent improvement in performance, better
contract discipline and cost savings delivered by the new
management team since 2013.

Moody's considers that the company's liquidity position remains
weak, as a result of negative free cash flow, high seasonal
working capital outflows and contract volatility. The company
expects working capital movements to continue in line with
historic trends. Liquidity headroom, excluding headroom within
its Colombian subsidiaries, amounted to EUR88 million at
December 31, 2014. However the company experiences seasonal cash
outflows over the first nine months of the year which in the
period to 30 September 2014 amounted to EUR52 million (before
one-off capital contributions). Moody's expects liquidity
headroom to reduce further as a result of intra-quarter swings,
although this will be partially mitigated by improved working
capital and management of short-term cash movements.

The company also has liquidity headroom of EUR38 million within
its Colombian subsidiaries, including approximately EUR14 million
of cash balances. Moody's anticipates that there are likely to be
some delays in the ability to transfer cash out of Colombia and
this cash is considered to provide limited support to the rest of
the company in the short term. The company's super-senior
revolving credit facility (SSRCF) amounts to EUR110 million,
expires in May 2017 and is subject to a leverage covenant which
applies at all times. Covenant headroom is currently adequate but
the levels tighten over the next 12-18 months and Moody's expects
significantly reduced headroom in December 2015 and December
2016, particularly if the company's trading performance is
adversely affected by the oil and gas market.

The stable outlook assumes the company will be moderately
affected by the low oil price over the next 12 to 18 months, as
pressure on pricing and on capex-related contracts is partially
offset by the current growth momentum, new contract wins and the
stable maintenance market. It assumes that liquidity will remain
relatively weak over this period with negative free cash flow,
but that there will remain low positive liquidity headroom at
peak periods and the SSRCF will remain fully available.

The ratings could be upgraded if leverage remains sustainably
below 5.5x (on a Moody's adjusted basis), with an improvement in
liquidity, generation of positive free cash flow and maintenance
of a solid operating performance.

The ratings could be downgraded if leverage increases sustainably
above 6.5x (on a Moody's adjusted basis), or if increased
liquidity concerns arise.

The principal methodology used in these ratings was Business and
Consumer Service Industry published in December 2014. Other
methodologies used include Loss Given Default for Speculative-
Grade Non-Financial Companies in the U.S., Canada and EMEA
published in June 2009.

Stork Technical Services Group B.V., headquartered in the
Netherlands, is a provider of asset integrity services to the oil
and gas, chemical and refining, and power sectors. For the twelve
months ended December 31, 2014, STS reported revenues and Moody's
adjusted EBITDA of EUR1.5 billion and EUR95 million respectively.



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


BANK OCHRONY: Fitch Lowers IDR to 'BB' on Support Revision
----------------------------------------------------------
Fitch Ratings has downgraded Poland-based Bank Ochrony
Srodowiska's (BOS) Long-term Issuer Default Rating (IDR) and
senior debt ratings to 'BB' from 'BBB', and its National Long-
term Rating to 'BBB(pol)' from 'A(pol)'. The Outlooks remain
Negative. The Viability Rating (VR) has been affirmed at 'bb'.

The rating actions are in conjunction with Fitch's review of
sovereign support for banks globally, which the agency announced
in March 2014.  In line with its expectations announced in March
last year and communicated regularly since then, Fitch believes
legislative, regulatory and policy initiatives have substantially
reduced the likelihood of sovereign support for US, Swiss and
European Union commercial banks.

BOS is indirectly state-owned through the bank's 56.6%
shareholder, the state-owned National Fund for Environment
Protection and Water Management (the fund).  Fitch believes that
the state would endeavor to act pre-emptively to avoid BOS
breaching regulatory capital adequacy requirements.  However, in
Fitch's opinion, the combination of Bank Recovery and Resolution
Directive (BRRD) and EU state aid considerations has reduced the
overall probability of extraordinary sovereign support being
provided to BOS.

BRRD does not prevent public owners from providing capital to
banks such as BOS.  However, BRRD will give the Polish resolution
authorities a far broader suite of powers and tools to take
resolution action on BOS, if necessary or appropriate, compared
with standard insolvency laws.  This could facilitate some form
of creditor burden-sharing, for example.  It may also make it
hard to recapitalize BOS without burden-sharing in the event of a
very large failure.

In addition, extraordinary support for BOS would need to meet EU
state aid rules, including the private investor test.  Fitch
believes it would be difficult for a capital increase directly
from the state or by the fund to be made without triggering state
aid and bail-in considerations, if the private shareholders
(mostly dispersed and listed on the Warsaw Stock Exchange)
demonstrate that they are unwilling to support the bank.  Fitch
also believes that the direct capital injection from the state or
the fund may not be able to exceed the total stake jointly held
in the bank by all state-owned entities.

As a result, Fitch believes that, in line with our Support Rating
(SR) definition of '4', there is a limited probability of
extraordinary support for BOS from the Polish sovereign.  Fitch
has, therefore, downgraded its SR to '4' from '2' and revised its
Support Rating Floor (SRF) to 'B' from 'BBB'.

As a result of the revision to the SRF, the Long-term IDR is now
driven by BOS's standalone creditworthiness, which is expressed
as the VR.  The Negative Outlook reflects Fitch's opinion that
the balance of risks on the VR and hence the IDRs is tilted to
the downside mainly due to rising single-name loan book
concentrations and worsening asset quality, which are putting
pressure on the bank's capitalization.

KEY RATING DRIVERS - IDRS, NATIONAL RATINGS, VR AND SENIOR DEBT

BOS's VR of 'bb' is driven by its weak market franchise and
acceptable, albeit weakening, asset quality.  It also reflects
the bank's only adequate capitalization -- in view of
considerable single-name loan concentrations and low reserve
coverage of impaired loans -- and weak profitability.  Fitch has
also considered the bank's significant reliance on fairly price-
sensitive retail term and corporate customer deposits and
wholesale debt markets.

At the same time, the VR is underpinned by the bank's sound
liquidity position and rather moderate overall risk appetite, as
evidenced by moderate loan growth and material concentration in
the low-risk public finance sector.

RATING SENSITIVITIES - IDRS, NATIONAL RATINGS, VR AND SENIOR DEBT

The IDRs and National Ratings are sensitive to changes in the
bank's VR.

Pressure on BOS's capitalization from continued loan quality
deterioration and rising single-name concentrations would likely
result in a downgrade of BOS's VR.  Any significant and long-
lasting pressure on the bank's funding costs, further undermining
profitability, could also lead to a downgrade.  Upside potential
for the VR is limited due to BOS's weak franchise and
considerable credit risk concentrations.

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

The downgrade of BOS's SR to '4' and the revision of its SRF to
'B' follow the revision of Fitch's assessment of the probability
of extraordinary support, if needed, from the Polish sovereign
(A-/Stable).  Fitch believes that in the event of severe stress,
there would be significant uncertainties about the adequacy of
support being made available because of potential limitations
arising from BRRD and EU state-aid rules.

In Fitch's view, the EU's BRRD is now sufficiently progressed to
provide a framework for resolving banks that is likely to require
senior creditors participating in losses, if necessary, instead
of or ahead of a bank receiving sovereign support.  In the EU,
BRRD has been effective in member states since 1 January 2015,
including minimum loss absorption requirements before resolution
financing or alternative financing (eg, government stabilization
funds) can be used.  As in other EU countries, in Poland full
implementation of BRRD will be required by Jan. 1, 2016.

BOS's SR of '4' and SRF of 'B' reflect Fitch's opinion that some
potential, albeit limited, still remains for the sovereign to
provide extraordinary support to BOS, without triggering state-
aid considerations or, from January 2016, the need for bail-in of
senior creditors.  This view is based on the state ownership of
BOS (although only indirect) and the bank's important role in
financing the country's environmental protection projects.  Fitch
has also considered BOS's limited systemic importance, dominant
share of commercial lending in the credit portfolio and rather
narrow policy role.

Any upgrade to the SR and upward revision to the SRF would be
contingent on a positive change in the sovereign's propensity to
support BOS or our assessment that potential impediments to
support are being reduced.  While not impossible, this is highly
unlikely in Fitch's view.  BOS's SR and SRF could also be
downgraded and revised to 'No Floor', respectively, if the fund's
stake in the bank falls below 50%, which Fitch considers
unlikely.

KEY RATING DRIVERS AND SENSITIVITIES - SUBORDINATED DEBT

The rating of BOS's subordinated debt is notched down once from
the bank's VR for loss severity and mapped to the Polish National
Rating Scale.  It has, therefore, been affirmed due to the
affirmation of the VR.  The subordinated debt rating is primarily
sensitive to any change in the VR.

The rating actions are:

  Long-term IDR: downgraded to 'BB' from 'BBB', Outlook Negative

  Short-term IDR: downgraded to 'B' from 'F3'

  National Long-term Rating: downgraded to 'BBB(pol)' from
  'A(pol)', Outlook Negative

  National Short-term Rating: downgraded to 'F3(pol)' from
  'F1(pol)'

  Viability Rating: affirmed at 'bb'

  Support Rating: downgraded to '4' from '2'

  Support Rating Floor: revised to 'B' from 'BBB'

  PLN2 billion senior unsecured bond program: downgraded to
  'BBB(pol)' from 'A(pol)'

  PLN2 billion senior unsecured bond program: downgraded to
  'F3(pol)' from 'F1(pol)'

  PLN83 million subordinated debt: affirmed at 'BBB-(pol)'

  EUR250 million long-term senior unsecured eurobonds issued by
  BOS Finance AB: downgraded to 'BB' from 'BBB'



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


BANCO COMERCIAL PORTUGUES: Fitch Lowers LongTerm IDR to 'BB-'
-------------------------------------------------------------
Fitch Ratings has downgraded Banco Comercial Portugues, S.A.'s
(Millennium bcp) Long-term Issuer Default Rating (IDR) to 'BB-'
from 'BB+' and that of Banco BPI, S.A. to 'BB' from 'BB+'.

At the same time, the agency has downgraded Caixa Economica
Montepio Geral's (Montepio) Long-term IDR to 'B+' from 'BB' and
that of Banif - Banco Internacional do Funchal, S.A. (Banif) to
'B-' from 'BB'.

The Outlooks are Stable for Millennium bcp, Montepio and Banif.
The Rating Watch on Banco BPI's Long-term IDR has been revised to
Positive from Evolving.  The RWP reflects potential rating upside
related to CaixaBank, S.A.'s announced voluntary tender offer for
all outstanding shares of BPI that it does not already own on
Feb. 17, 2015.

The rating actions are in conjunction with Fitch's review of
sovereign support for banks globally, which the agency announced
in March 2014.  In line with its expectations announced in March
last year and communicated regularly since then, Fitch believes
legislative, regulatory and policy initiatives have substantially
reduced the likelihood of sovereign support for US, Swiss and
European Union commercial banks.

As a result, Fitch believes that, in line with our Support Rating
(SR) definition of '5', extraordinary external support while
possible can no longer be relied upon for Millennium bcp, Banco
BPI, Montepio and Banif.  Fitch has, therefore, downgraded their
SRs to '5' from '3' and revised their Support Rating Floors
(SRFs) to 'No Floor'.

As a result of the revision to the SRFs, these banks' Long-term
IDRs are now driven by their standalone creditworthiness, as
expressed in their respective Viability Ratings (VRs).  The VRs
have been affirmed today.  Fitch has downgraded the banks' senior
debt issues in line with their Long-term IDRs and the agency has
assigned Recovery Ratings to Montepio's senior unsecured and
subordinated debt issues and to Banif's subordinated debt and
preference shares.

The rating actions are also part of a periodic portfolio review
of the Portuguese banking groups rated by Fitch.  The system
continues its path towards stabilization, particularly for asset
quality indicators, and is gradually returning to profitability,
supported by improved macro-economic trends.  Fitch expects GDP
growth of 1.5% in 2015 and a steady decline in unemployment to
13.8%.  While Fitch expects problematic assets to peak in 2015,
meaningful improvements will take time to materialize as the
stock of problematic assets is large.  Fitch expects banks'
profitability to be supported by lower funding costs,
particularly for deposits, a reduction of domestic overheads,
income from international operations and declining impairment
needs.

However, profitability will remain subdued due to low interest
rates, asset de-risking and declining loan spreads.  The bank
system has a contingent risk related to the sale of Novo Banco,
given that it would need to make up any potential losses stemming
from the process.  Fitch assumes that in the event of large
losses, these would be deferred over several years, but there is
still uncertainty over the mechanism that would be deployed for
absorbing such losses.

KEY RATING DRIVERS - IDRS, VR AND SENIOR DEBT

Millennium bcp's ratings reflect the bank's weak asset quality
indicators, which undermine profitability and internal capital
generation capacity.  The group's credit at risk ratio remained
fairly stable in 2014 and 1Q15; however, its coverage was below
peers' at about 51% and the group had a higher exposure to
foreclosed assets and recovery/corporate restructuring funds.
Fitch estimates net problematic assets would represent above 100%
of 1Q15 capital, taking into account its proposed subordinated
exchange offer.  Its ratings also consider the bank's sound
domestic franchise as well as an improved core profitability,
funding and liquidity profile.

Banco BPI's ratings reflect weak domestic earnings.  In 1Q15 it
just broke even in Portugal, due to lower business volumes,
interest rates and spreads, which were partially offset by lower
funding costs following the repayment of state cocos in 2014 and
re-pricing of deposits.  They also take into account its stronger
asset quality indicators and funding and liquidity profiles than
peers and reasonable capitalization, after the repayment of
EUR920 million cocos in 2014.

Montepio's ratings reflect the bank's fragile and volatile
profitability and a deteriorated capital position.  Fitch
believes the profitability of Montepio's core banking business
remains weak and highly vulnerable to non-recurring costs as
evidenced by the bank's large net losses posted in 2014.  The
bank's senior debt ratings are in line with its IDR, supported by
a Recovery Rating of 'RR4', reflecting Fitch's assumptions that
recoveries in the event of default, which may result in the
liquidation of the bank, would be average.

Its earnings generation capacity suffers from only modest non-
interest income generation and a loan book with a high proportion
of low-margin residential mortgages in a low interest rate
environment.  This and higher actuarial deviations weakened the
bank's CET1 ratio to 8.6% at end-1Q15, from 10.8% at end-1Q14.
The ratings also take into account initial signs of improving
asset quality and increased coverage.

Banif's ratings reflect the bank's weak capital position, pre-
impairment operating profitability and asset quality.  Its
capital ratios declined to 8.4% at end-2014 from 10.9% at end-
2013, owing to reported losses and negative actuarial deviations.
Capital will be supported by agreed asset sales in 2015, having
an estimated positive impact of about 1pp.  Nevertheless, it will
continue to be highly exposed to unreserved problematic assets.

Banif's asset quality compares unfavorably with peers, with its
credit at risk/loans ratio at 24% at end-2014, influenced by loan
de-leveraging.  The ratings also consider considerable execution
challenges in implementing an ambitious strategic plan, which is
still pending final approval from the European Commission.

The Stable Outlook on Millennium bcp, Montepio and Banif reflects
the stabilization of their risk profiles, particularly asset
quality indicators and the ratio of net problematic assets-to-
capital, which have started to show some improvements.  For
Montepio, the Stable Outlook also considers Fitch's assumption of
the successful completion of the EUR200 million issue of non-
voting participation units by end-2015.  Banif's Outlook also
takes into account the execution of the sale of Banco Mais in the
short-term.

The RWP on Banco BPI's Long-term IDR reflects rating upside
potential in case the offer results in CaixaBank taking control
of Banco BPI, and hence a likely increase in institutional
support by CaixaBank for BPI.  Fitch would view the removal of
the voting cap, currently set at 20%, as a key milestone for the
success of the acquisition.  The voting on the removal of the cap
at Banco BPI's shareholders meeting has been postponed to June
17.

RATING SENSITIVITIES - IDRS, VR AND SENIOR DEBT

Millennium bcp's, Montepio's and Banif's IDRs and senior debt
ratings are sensitive to a change in their VRs.  Upward rating
potential would arise from a sustained reduction in problem
assets while preserving capital as well as enhancing core
profitability. A continued improvement of the operating
environment should support business volumes, benefit asset
quality and a reduction in impairment charges.  This would
ultimately benefit profitability and internal capital generation.
Downward rating pressure would primarily come from a further
deterioration in asset quality and sustained losses.

Montepio's ratings are also sensitive to a failure to complete
the EUR200m issue of non-voting participation units.  The rating
on its senior debt issuance is also sensitive to developments in
encumbered asset levels, collateral constraints and/or Fitch's
assumptions of recovery prospects, which may be affected by
depositor preference following the implementation of BRRD.

Banif's ratings are sensitive to the approval of the
restructuring plan and deviations from this plan may lead to a
revision of its ratings.  Downward rating pressure would arise
from signs of an inability by management to successfully turn
around the bank and, ultimately, needing additional extraordinary
support.  Upward rating potential in the near term is limited in
view of the high execution risks of the strategic plan.

Fitch expects to resolve Banco BPI's RWP as the transaction
unfolds.  Under a successful tender offer scenario, Fitch expects
to incorporate potential institutional support from CaixaBank
into Banco BPI's ratings.  The extent of the support will depend
on CaixaBank's ability, as reflected by its Long-term IDR, and
propensity to support its subsidiary.

The agency anticipates that Banco BPI's ratings could be notched
down up to two levels from CaixaBank's ratings.  Fitch expects to
withdraw Banco BPI's SRF if CaixaBank ends up controlling Banco
BPI, as institutional support would become the more likely source
of external support for the bank.  Fitch does not assign SRFs to
banks whose IDRs are driven by institutional support.

Upward rating potential on Banco BPI's VR would primarily arise
from enhanced profitability in its domestic operations.

The banks' ratings are also sensitive to the conclusion of the
sale process of NovoBanco and potential related costs and capital
impact, if any.

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

The SR and SRF of Millennium bcp, Banco BPI, Montepio and Banif
reflect Fitch's view that senior creditors can no longer rely on
receiving full extraordinary support from the sovereign in the
event that any of these banks becomes non-viable.  In Fitch's
view, the EU's BRRD and the SRM are now sufficiently progressed
to provide a framework for resolving banks that is likely to
require senior creditors participating in losses, if necessary,
instead of or ahead of a bank receiving sovereign support.

In the EU, BRRD has been effective in member states since 1
January 2015, including minimum loss absorption requirements
before resolution financing or alternative financing (eg,
government stabilization funds) can be used.  Portugal transposed
BRRD into the national regulatory framework on March 26, 2015,
including the bail-in tool.

Any upgrade to the SR and upward revision to the SRF of these
banks would be contingent on a positive change in the sovereign's
propensity to support its banks.  While not impossible, this is
highly unlikely in Fitch's view.

KEY RATING DRIVERS AND SENSITIVITIES - SUBORDINATED DEBT AND
OTHER HYBRID SECURITIES

Subordinated debt and other hybrid capital issued by Millennium
bcp, Banco BPI, Montepio and Banif are all notched down from
their respective VRs in accordance with Fitch's assessment of
each instrument's respective non-performance and relative loss
severity risk profiles, which vary considerably.  Their ratings
are primarily sensitive to changes in their VRs.

Banco BPI's subordinated debt and preference shares remain on
RWP, reflecting a potential upgrade if parent support is provided
to neutralise non-performance risk of these instruments,
preventing them from hitting loss-absorption features.  Under
these circumstances, Fitch would notch these securities down from
the subsidiary's IDR, rather than the VR.

Montepio's subordinated debt and Banif's subordinated debt and
preference shares have been assigned a Recovery Rating.  The
rating is 'RR5' for subordinated debt, reflecting below- average
expected recoveries in case of default and 'RR6' for preference
shares, reflecting poor recovery prospects.  Recovery Ratings are
sensitive to valuation and availability of unencumbered assets
and the amount of and breakdown between unsecured and secured
liabilities.

KEY RATING DRIVERS AND SENSITIVITIES - SUBSIDIARIES AND
AFFILIATED COMPANIES

The ratings of Banco Portugues de Investimento (BPI) are
equalised with those of its 100% parent, Banco BPI.  Under
Portugal's corporate law, Banco BPI is liable for the obligations
of its wholly owned subsidiaries.

The equalization is driven by BPI's integration within its parent
bank and the benefits derived from parent support.  Fitch does
not assign VR to the institution as the agency does not view it
as an independent entity.  The ratings of BPI are sensitive to
rating actions on Banco BPI's IDRs.

Bank Millennium, 50.1% owned by Millennium bcp, is a retail bank
operating in Poland and is fully consolidated into the group's
accounts.  Fitch views Bank Millennium as a strategically
important subsidiary to its parent.  This is notwithstanding the
sale of a minority 15.4% stake in Bank Millennium in March 2015.
Fitch believes that the transaction does not point to any
weakening in Millennium bcp's strategic view of Bank Millennium
as the parent retains control over the subsidiary and has
reaffirmed its long-term commitment to it and the Polish market.

Bank Millennium's SR has been downgraded to '4' from '3' and its
SRF revised to 'No Floor'.  The latter has been withdrawn, which
reflects a change in the source of support to institutional from
sovereign.  Bank Millennium's SR is driven by potential support
from Millennium bcp and is sensitive to the parent's ability (BB-
/Stable) and/or willingness to support the subsidiary.  The
parent's ability to support also takes into account the
subsidiary's relative size.

Another potential divestment of Bank Millennium's shares by
Millennium bcp would not necessarily mean reduced control and
lower probability of support of Bank Millennium, as long as the
parent retains a controlling stake in the bank and the remaining
shareholding is widely spread.

The rating actions are:

Millennium bcp:

Long-term IDR: downgraded to 'BB-' from 'BB+'; Outlook Stable
Short-term IDR: affirmed at 'B'
Viability Rating: affirmed at 'bb-'
Support Rating: downgraded to '5' from '3'
Support Rating Floor: revised to 'No Floor' from 'BB+'
Senior unsecured debt long-term rating downgraded to 'BB-' from
  'BB+'
Senior unsecured debt short-term rating affirmed at 'B'
Lower Tier 2 subordinated debt affirmed at 'B+'
Preference shares affirmed at 'B-'

Bank Millennium:

Long-term IDR: unaffected at 'BBB-', Stable Outlook
Short-term IDR: unaffected at 'B'
Viability Rating: unaffected at 'bbb-'
Support Rating: downgraded to '4' from '3'
Support Rating Floor: revised to 'No Floor' from 'BB'; withdrawn

Banco BPI:

Long-term IDR: downgraded to 'BB' from 'BB+'; Rating Watch
  revised to Positive from Evolving
Short-term IDR: B maintained on RWP
Viability Rating: affirmed at 'bb'
Support Rating: downgraded to '5' from '3'; Rating Watch revised
  to Positive from Evolving
Support Rating Floor: revised to 'No Floor' from 'BB+'
Senior unsecured debt: downgraded to 'BB' from 'BB+'; Rating
  Watch revised to Positive from Evolving
Commercial paper program: 'B'; maintained on RWP
Lower Tier 2 subordinated debt: 'BB-'; maintained on RWP
Preference shares: 'B'; maintained on RWP

BPI:

Long-term IDR: downgraded to 'BB' from 'BB+'; Rating Watch
  revised to Positive from Evolving
Short-term IDR: 'B' maintained on RWP
Support Rating: '3' maintained on RWP

Montepio:

Long-term IDR: downgraded to 'B+' from 'BB'; Outlook Stable
Short-term IDR: affirmed at 'B'
Viability Rating: affirmed at 'b+'
Support Rating: downgraded to '5' from '3'
Support Rating Floor: revised to 'No Floor' from 'BB'
Senior unsecured debt long-term rating downgraded to 'B+' from
  'BB'; 'RR4' assigned
Senior unsecured debt short-term rating affirmed at 'B'
Lower Tier 2 subordinated debt affirmed at 'B'; 'RR5' assigned

Banif:

Long-term IDR: downgraded to 'B-' from 'BB'; Outlook Stable
Short-term IDR: affirmed at 'B'
Viability Rating: affirmed at 'b-'
Support Rating: downgraded to '5' from '3'
Support Rating Floor: revised to 'No Floor' from 'BB'
Lower Tier 2 subordinated debt affirmed at 'CCC'; 'RR5' assigned
Preference shares affirmed at 'C'; 'RR6' assigned



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KAZMUNAYGAS INTERNATIONAL: Fitch Affirms 'B+' IDR, Outlook Stable
-----------------------------------------------------------------
Fitch Ratings has affirmed Romania-based KazMunayGas
International NV's (KMGI) Long-term Issuer Default Rating (IDR)
at 'B+'.  The Outlook is Stable.

KMGI's rating is based on a bottom-up approach in line with
Fitch's parent and subsidiary rating linkage methodology.  The
rating reflects the company's standalone credit profile, assessed
at 'CCC' due to the weak financial profile (end-2014: funds from
operations (FFO) adjusted net leverage of 36x), and a three-notch
uplift for parental support from JSC National Company KazMunayGas
(NC KMG; BBB/Stable).

KEY RATING DRIVERS

Relatively Strong 2014 Results

In 2014, KMGI generated positive annual Fitch-adjusted free cash
flow (FCF) for the first time since 2002.  Better market
conditions in 2H14 and improved operational profile of the
Petromidia refinery after its modernization completed in 2012
resulted in the average net operating margin at the refinery
increasing to USD3/bbl in 2014, up from USD1.5/bbl in 2013, and
the good performance of retail and trading segments.  Significant
working capital cash inflows and a 51% capex reduction yoy
further supported cash flows.  A longer track record of improved
financial performance could lead to an upgrade of KMGI's
standalone rating, especially if the contingent liabilities
associated with a dispute with the Romanian government are
cleared.

Share Buyback Delayed

KMGI's repurchase of around 27% of Rompetrol Rafinare S.A.'s
(RRC) shares from the government for USD200 million did not take
place in 2014, as the company previously expected.  Fitch
understands the transaction needs to be initiated by the
government, which has not taken place yet.  In KMGI's view, the
repurchase is likely to be finalized in 2016.  Fitch assumes that
NC KMG will support KMGI in financing the share repurchase
through a shareholder loan or a debt guarantee, further
demonstrating parental assistance.

Parent Support

Fitch assesses the strategic and legal ties between KMGI and NC
KMG as moderate to strong, whilst operational ties are moderate,
which supports the three-notch uplift to KMGI's standalone
rating. The legal ties include a direct guarantee of KMGI's debt
(USD200 million) and a cross-default provision in the
documentation for NC KMG's USD7.5 billion Global Medium-Term Note
Programme, which also relates to KMGI's debt.  Historical
financial support has taken the form of a USD1.1 billion cash
injection as a capital increase, and shareholder loans (USD0.9
billion) converted into the 51-year hybrid loan.

Expansion of Retail Development Strategy

KMGI is keen to improve its integrated distribution (retail and
wholesale) network domestically, having completed the upgrade of
its Petromidia refinery.  KMGI will focus on the Romanian market,
where it plans to open 96 new filling stations between 2014 and
2019.  KMGI opened one new station in Romania in 2014 and plans
to open 15 new stations in 2015.  The company believes it is in a
position to increase market share in Romania from its approximate
28% share (15% retail).  In Fitch's opinion, KMGI will benefit
from a greater share of the domestic market if the expansion
program is achieved with moderate capex requirements.

Favorable European Refining Environment

European refining margins started to recover in July 2014 after
Brent began its fall from USD112/bbl.  In 1Q15 the north-west
European refining margin averaged USD7.6/bbl, up from USD4.1/bbl
in 1Q14 and from USD5.9/bbl in 4Q14.  Healthy fuel demand in
recent months exceeded market expectations and supported margins,
but this was partly driven by temporary factors including
opportunistic trading.  Overcapacity and strong competition from
refiners in oil producing countries may put pressure on European
margins later this year.

Hybrid Loan Treated as Debt

Fitch treats the 51-year hybrid loan from KazMunayGas PKOP
Investment B.V. (outstanding balance at end-2014 of USD0.9
billion) as debt because interest payments are not deferrable if
the company returns to profitability and starts paying dividends.
FFO adjusted net leverage excluding shareholder financing
totalled 13.9x at FYE14 (15.6x in FYE13).

KEY ASSUMPTIONS

Fitch's key assumptions within our rating case for the issuer
include:

   -- Annual EBITDA of approximately USD150 million.

   -- Improved leverage metrics on the back of higher cash flow
      generation.

   -- Support for NC KMG for repurchase of RRC shares.

RATING SENSITIVITIES

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

   -- Improvement in KMGI's standalone financial profile away
      from the 'CCC' rating category.

   -- Increased cash flow generation from an improving business
      profile.

   -- A longer debt maturity profile.

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

   -- Reduced support from NC KMG.
   -- Liquidity crisis related to cash flow difficulties.
   -- Large debt-financed acquisitions at the KMGI level.
   -- Large debt-financed capital expenditure at the KMGI level.

LIQUIDITY AND DEBT STRUCTURE

At end-2014, KMGI's short-term debt was USD543 million against an
unrestricted cash balance of USD141 million.  Fitch assumes KMGI
will be able to extend a significant portion of short-term credit
lines with international and domestic relationship banks in 2015.
The company's liquidity is supported by USD168 million of
committed undrawn credit facilities at end-2014.

In March 2015, KMGI has signed a USD360 credit facility, which
will be used to refinance its existing loans.  The facility
includes a USD240 million three-year committed revolving credit
line and a one-year USD120 million uncommitted overdraft.  Fitch
views the increase in the average tenor of KMGI's debt portfolio
as positive for the company's financial profile.



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


COMSOTSBANK BUMERANG: Bank of Russia Revokes Banking License
------------------------------------------------------------
By its Order No. OD-1109, dated May 20, 2015, the Bank of Russia
revoked the banking license from the Cherepovets-based credit
institution joint-stock company Commercial Bank of Social
Development Bumerang or Comsotsbank Bumerang (Registration No.
1002, the Vologda Region) from May 20, 2015.

The Bank of Russia took such an extreme measure -- revocation of
the banking license -- because of the credit institution's
failure to comply with federal banking laws and Bank of Russia
regulations, inability to meet the creditors' claims on monetary
obligations, and application of supervisory measures envisaged by
the Federal Law "On the Central Bank of the Russian Federation
(Bank of Russia)".

Due to the unsatisfactory quality of assets not generating
sufficient cash flows, Comsotsbank Bumerang failed to timely
honor its liabilities to creditors.  The management and owners of
Comsotsbank Bumerang did not take measures to normalize its
activities and recover its financial status. In these
circumstances, pursuant to Article 20 of the Federal Law "On
Banks and Banking Activities", the Bank of Russia revoked the
banking license from Comsotsbank Bumerang.

By its Order No. OD-1110, dated May 20, 2015, the Bank of Russia
has appointed a provisional administration to Comsotsbank
Bumerang for the period until the appointment of a receiver
pursuant to the Federal Law "On the Insolvency (Bankruptcy)" or a
liquidator under Article 23.1 of the Federal Law "On Banks and
Banking Activities".  In accordance with federal laws, the powers
of the credit institution's executive bodies are suspended.

Comsotsbank Bumerang is a member of the deposit insurance system.
The revocation of banking license is an insured event envisaged
by Federal Law No. 177-FZ "On Insurance of Household Deposits
with Russian Banks" regarding the bank's obligations on deposits
of households determined in accordance with the legislation.

According to the financial statements, as of May 1, 2015,
Comsotsbank Bumerang ranked 594th by assets in the Russian
banking system.


VOSTOCHNY EXPRESS: Moody's Cuts Deposit & Debt Ratings to 'B3'
--------------------------------------------------------------
Moody's Investors Service downgraded the long-term local- and
foreign-currency deposit ratings of Vostochny Express Bank to B3
from B2; and also downgraded the bank's local-currency senior
unsecured debt rating to B3 from B2. The outlook on the bank's
long-term debt and deposit ratings is negative.

Concurrently, Moody's downgraded Vostochny Express Bank's
baseline credit assessment (BCA) to b3 from b2. The bank's short-
term local-currency and foreign-currency deposit ratings were
affirmed at Not Prime.

Moody's assessment of Vostochny Express Bank's ratings is
primarily based on the bank's audited financial statements for
2014 prepared under IFRS, as well as information received from
the bank.

Moody's has also assigned long-term and short-term Counterparty
Risk Assessments (CR Assessment) of B2(cr)/Not Prime(cr) to
Vostochny Express Bank.

The downgrade of Vostochny Express Bank's ratings reflects (1) a
prolonged deteriorating trend in the bank's asset quality and
profitability because of the heightened risks in the bank's
unsecured consumer loan portfolio; and (2) its low capital
buffer, which, coupled with substantial net IFRS losses posted in
2014 and insufficient coverage of non-performing loans (NPLs) by
loan loss reserves, reveals overall weak loss-absorption
capacity.

Retail loans comprise the bulk of Vostochny Express Bank's total
loans, with unsecured consumer loans and credit card loans
dominating the loan book (69% and 17% of the total retail
portfolio, respectively, according to IFRS as of year-end 2014).
Similar to other specialist consumer lenders in Russia, the bank
displays weak asset-quality metrics and posted losses in 2014 and
the first quarter of 2015. This poor performance is driven by (1)
the rapid growth of household indebtedness in Russia in recent
years; and (2) the country's currently weak macroeconomic
outlook, which suppresses the population's net income and hence
debt-servicing capacity. As of January 1, 2015, the share of
Vostochny Express Bank's retail loans overdue by more than 90
days soared to 21.3% of the bank's total retail loans, from 14.0%
reported a year ago, and the bank's credit costs (expressed as
provisioning charges as a percentage of average gross loans)
increased to 21.7% in 2014, from 13.7% reported in 2013.

The high credit charges faced by Vostochny Express Bank led to a
substantial net IFRS loss of RUB10.7 billion (USD190 million) for
2014, which translated into negative annualized return on average
equity (ROAE) of 46.6% (in 2013, the ROAE was marginally positive
at 2.9%). Moody's does not expect Vostochny Express Bank to
return to profits in the next 12 to 18 months, because
profitability metrics are under a double pressure from the still
substantial credit losses and increased cost of funding,
reflecting the heightened key interest rate of the Central Bank
of Russia and the overall tight liquidity situation on the local
market. Furthermore, the bank's revenue generation will also
likely be suppressed by the decreased proportion of performing
loans, as its retail loan portfolio (net of loan loss reserves)
shrank 25% in 2014.

Vostochny Express Bank's loss-absorption capacity is weighed down
by insufficient loan loss reserves, which -- at January 1,
2015 -- covered only 95% of loans overdue by more than 90 days
(whereas for the majority of Russian peers this coverage ratio
exceeds 100%). Absent new capital injections, the bank's Basel I
Tier 1 and total capital adequacy ratios - of 10.5% and 15.8%,
respectively, as reported at 1 January 2015 - will decline as a
result of the need for further sizeable provisioning charges.
Furthermore, Vostochny Express Bank is now approaching the
regulatory capital adequacy minimums: on 1 April 2014, its
reported Tier 1 and total statutory capital adequacy ratios were
at 6.74% and 11.21%, respectively, whereas the minimum required
levels are 6% and 10%. Vostochny Express Bank's shareholders have
announced placement of a new share issue for a total amount of
RUB3.5 billion, which is expected to be completed in the coming
two months. However, this injection represents a moderate capital
increase, given the magnitude of past and potential future
losses. Further capital injections to the bank will be critical
to preserve financial sustainability.

Further downward pressure might develop on Vostochny Express
Bank's ratings as a result of (1) failure to recover and sustain
profitability; and/or (2) failure to match any further
deterioration of asset quality with an adequate increase in
capital and/or loan loss reserves.

Vostochny Express Bank's B3 deposit and debt ratings are unlikely
to be upgraded in the next 12 to 18 months given the negative
outlook on the ratings. The rating agency might revise the
outlook on the bank's deposit and debt ratings to stable if it
observes a sustainable stabilization of the bank's asset quality,
profitability and capital adequacy parameters.

As part of the actions, Moody's has also assigned long-term and
short-term Counterparty Risk Assessments (CR Assessment) of
B2(cr)/Not Prime(cr) to Vostochny Express Bank.

The CR Assessment reflects an issuer's ability to avoid
defaulting on certain senior operating bank obligations and other
contractual commitments, but it is not a rating. The CR
Assessment takes into account the issuer's standalone strength as
well as the likelihood of affiliate and government support in the
event of need, reflecting the anticipated seniority of
counterparty obligations in the liabilities hierarchy. The CR
Assessment also takes into account other steps authorities can
take in order to preserve the key operations of a bank in the
event of a resolution.

The principal methodology used in these ratings was Banks
published in March 2015.

Headquartered in the City of Khabarovsk in Russia's Far East
region, Vostochny Express Bank reported total assets of RUB192
billion (US$3.4 billion) and total equity of RUB17.7 billion
(US$315 million) under audited IFRS as at Jan. 1, 2015.



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


ABANKA VIPA: Fitch Lowers Issuer Default Rating to 'B+'
-------------------------------------------------------
Fitch Ratings has downgraded Slovenia-based Nova Kreditna Banka
Maribor's (NKBM) and Nova Ljubljanska Banka's (NLB) Long-term
Issuer Default Ratings (IDR) to 'B+' from 'BB-'.  At the same
time, the agency has upgraded the Long-term IDR of Abanka Vipa
(Abanka) to 'BB-' from 'B+' and affirmed Banka Koper (BK) at
'BBB'.  The Outlook on the Long-term IDRs of all four banks is
Stable.

The Viability Ratings (VRs) have been upgraded by one notch to
'bb-' for Abanka and 'b+' for NKBM and NLB and affirmed at 'bb'
for BK.

The rating actions on the three state-owned banks (Abanka, NKBM
and NLB) are in conjunction with Fitch's review of sovereign
support for banks globally, which the agency announced in March
2014.  In line with its expectations announced in March last year
and communicated regularly since then, Fitch believes
legislative, regulatory and policy initiatives have substantially
reduced the likelihood of sovereign support for US, Swiss and
European Union commercial banks.

As a result, Fitch believes that, in line with its Support Rating
(SR) definition of '5', extraordinary external support, while
possible, cannot be relied upon for NKBM, NLB and Abanka.  Fitch
has, therefore, downgraded the SRs of NKBM and NLB to '5' from
'3' and revised Support Rating Floors (SRF) to 'No Floor' from
'BB-' for NKBM and NLB, and to 'No Floor' from 'B-' for Abanka.
Abanka's SR was affirmed at '5'.

As a result of the revisions to the SRFs, the Long-term IDRs of
NKBM and NLB, as with that of Abanka, are now driven by their
standalone creditworthiness as expressed in their respective
Viability Ratings (VRs).

KEY RATING DRIVERS - IDRS (OF ABANKA, NKBM, NLB), VRS OF ALL FOUR
BANKS, SENIOR DEBT OF NLB

Abanka's, NKBM's and NLB's IDRs and NLB's senior debt are driven
by the banks' respective VRs.

The upgrades of Abanka's, NKBM's and NLB's VRs are mainly driven
by the stabilization of the banks' asset quality, and Fitch's
view that potential further losses on their legacy loan books are
now less likely to significantly threaten their solvency.  The
VRs continue to be supported by reasonable non-performing loan
(NPL) reserve coverage, adequate capital buffers and comfortable
liquidity.

The VRs also reflect high impaired loan ratios, weak
profitability and the banks' limited track record since their
failure and restructuring in 2013 to 2014.  Abanka's VR is one
notch higher than those of NKBM and NLB due to its stronger loss
absorption capacity and healthier asset quality.

BK's VR reflects its resilient asset quality and performance
through the cycle, stable capital and funding profiles and strong
risk controls and underwriting standards, benefiting from close
integration with Intesa Sanpaolo S.p.A. (ISP).  However, the VR
also reflects a fairly high impaired loans ratio and moderate
profitability.

Capitalization is adequate across the board, in Fitch's view, as
reflected by high Fitch Core Capital (FCC) ratios of 24.5%
(NKBM), 22.4% (Abanka), 18.8% (NLB) and 17.5% (BK).  Internal
capital generation remains modest, but capital ratios are
supported by loan book contraction and (at Abanka, NKBM and NLB)
by divestments of non-core assets.  Fitch estimates that BK, NLB
and NKBM have sufficient loss absorption capacity to strengthen
their loan provisioning of NPLs to a conservative 80% and still
maintain a double-digit FCC ratio.  Abanka could fully reserve
NPLs and still maintain FCC ratios over 20%.

The gradually improving, albeit still fragile, operating
environment and somewhat better prospects for the corporate
sector should help the three state-owned banks to execute their
restructuring plans.  They are committed to downsizing their
larges stocks of NPLs, which accounted for 41% (NKBM), 30% (NLB)
and 14% (Abanka) of their gross loans at end-2014.  Abanka's NPL
ratio is lower because the bank transferred a higher proportion
of its NPLs to the state-owned bad bank in October 2014.

BK's through-the-cycle resilience to asset quality and capital
pressure is the strongest of Slovenian banks rated by Fitch.  BK
was one of the few banks that did not require extraordinary
support during the sector-wide stress in 2013.  The NPL ratio at
BK was fairly high at 17% at end-2014, but the NPL inflow in 2014
and 2013 was modest and the bank did not transfer its NPLs to the
bad bank.  The NPL specific reserve coverage ratio at BK (44%)
was lower than at the state-owned banks (about 60%), in part due
to lower exposure to highly leveraged sectors.

Fitch does not expect significant improvements in the banks'
profitability in 2015 and 2016.  The banks' weak performance is
likely to continue to suffer from thin margins (driven by a low
interest-rate environment), limited demand for new credit in the
sector, weak cost efficiency and high loan impairment charges.

Robust liquidity and healthy funding structures are a rating
strength for all four banks, as they continue to enjoy a steady
inflow of granular and cheap retail deposits and managed to
accumulate sizeable liquidity cushions given limited new lending
opportunities.  The gross loans/deposits ratios at all four banks
at end-2014 dropped below 100% and customer deposits represented
around 80%-90% of total funding.

RATING SENSITIVITES - IDRS (OF ABANKA, NKBM, NLB), VRS OF ALL
FOUR BANKS, SENIOR DEBT OF NLB

Abanka's, NKBM's and NLB's IDRs and NLB's senior debt are
sensitive to changes in their VRs.

Abanka's, NKBM's and NLB's ratings could be further upgraded on
an extended track record of problem loan recoveries in accordance
with the banks' restructuring plans, improved performance and
maintenance of solid capital ratios.  For BK, a gradual reduction
of NPLs, higher profitability and a supportive operating
environment could also result in positive action on its VR.

Conversely, renewed capital pressure from additional credit
losses on legacy problem exposures or new NPL generation could
result in negative rating actions for all four banks.  The
potential for downside pressure on BK's VR is lower than other
banks in the near-term due to the bank's track record of
reasonable through-the-cycle asset quality, performance and
capitalization.

In Fitch's view, Abanka's credit risk profile is likely to remain
largely unaffected by the planned merger with Banka Celje (also
recapitalized and nationalized in December 2014).  This reflects
the banks' broadly similar key credit metrics and Celje's smaller
size.  Abanka expects to complete the legal merger in 4Q15, and
then the state aims to put the merged bank up for sale.

Media reports have suggested that NKBM could be sold to a US-
based private equity fund.  If such a sale takes place, it would
be unlikely to have any immediate impact on NKBM's ratings as, in
Fitch's view, external support from an investment fund usually
cannot be relied upon.

KEY RATING DRIVERS AND SENSITIVITIES - ABANKA's, NKBM's AND NLB'S
SUPPORT RATINGS AND SUPPORT RATING FLOORS

The banks' SRs and SRFs reflect Fitch's view that senior
creditors cannot rely on receiving full extraordinary support
from the sovereign in the event that Abanka, NKBM or NLB becomes
non-viable.  In Fitch's view, the EU's Bank Recovery and
Resolution Directive (BRRD) and the Single Resolution Mechanism
(SRM) are now sufficiently progressed to provide a framework for
resolving banks that is likely to require senior creditors
participating in losses, if necessary, instead of or ahead of a
bank receiving sovereign support.  In the EU, BRRD has been
effective in member states since January 1, 2015, including
minimum loss absorption requirements before resolution financing
or alternative financing (eg, government stabilization funds) can
be used.  Full application of BRRD, including the bail-in tool,
is required from Jan. 1, 2016.

Any upgrade to the SRs and upward revision to the SRFs could be
driven by a positive change in the sovereign's propensity to
support the banks.  While not impossible, this is highly unlikely
in Fitch's view.  The SRs could also be upgraded if any of the
banks is acquired by a highly-rated entity with a high propensity
to provide support.

KEY RATING DRIVERS AND SENSITIVITIES - BK'S IDRS AND SUPPORT
RATING

The affirmation of BK's IDRs and Support Rating of '2' reflects
Fitch's view that ISP (BBB+/Stable) will continue to have a
strong propensity to support its subsidiaries in the central and
eastern Europe (CEE) region, notwithstanding its primary focus on
the Italian market.  The Stable Outlook on BK's Long-term IDR
mirrors that on the parent.

BK's Long-term IDR could be downgraded if ISP is downgraded or if
there is evidence of a reduced commitment by the group to CEE.
Neither is expected by Fitch.

The rating actions are:

Abanka:

Long-term IDR: upgraded to 'BB-' from 'B+', Outlook Stable
Short-term IDR: affirmed at 'B'
Viability Rating: upgraded to 'bb-' from 'b+'
Support Rating: affirmed at '5'
Support Rating Floor: revised to 'No Floor' from 'B-'

Nova Kreditna Banka Maribor

Long-term IDR: downgraded to 'B+' from 'BB-', Outlook Stable
Short-term IDR: affirmed at 'B'
Viability Rating upgraded to 'b+' from 'b'
Support Rating: downgraded to '5' from '3'
Support Rating Floor: revised to 'No Floor' from 'BB-'

Nova Ljubljanska Banka

Long-term IDR: downgraded to 'B+' from 'BB-', Outlook Stable
Short-term IDR: affirmed at 'B'
Viability Rating upgraded to 'b+' from 'b'
Support Rating: downgraded to '5' from '3'
Support Rating Floor: revised to 'No Floor' from 'BB-'
Senior unsecured debt long-term rating: downgraded to 'B+' from
'BB-', Recovery Rating 'RR4'

Banka Koper:

Long-term IDR: affirmed at 'BBB', Outlook Stable
Short-term IDR: affirmed at 'F2'
Support Rating: affirmed at '2'
Viability Rating: affirmed at 'bb'



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


MAPFRE SA: Fitch Raises Subordinated Debt Rating to 'BB+'
---------------------------------------------------------
Fitch Ratings has upgraded Mapfre SA's Issuer Default Rating
(IDR) to 'BBB+' from 'BBB'.  The Outlook is Stable.
Concurrently, Fitch has upgraded Mapfre's senior unsecured debt
to 'BBB' from 'BBB-' and subordinated debt to 'BB+' from 'BB'.
The group's core operating entities' Insurer Financial Strength
(IFS) ratings have been affirmed at 'A-'.

KEY RATING DRIVERS

The upgrade of Mapfre's IDR reflects the group's sustained robust
operating performance and consistently 'Strong' risk-adjusted
capitalization as measured by Fitch's Prism Factor Based Model
(FBM), despite operating within markets characterized by
difficult economic conditions.  This resilience is also reflected
in the group's operating companies' IFS ratings being one notch
higher than the Spanish sovereign rating (BBB+/Stable).

Fitch expects that Mapfre will maintain a robust underwriting
performance.  In 2014, it reported a combined ratio of 95.7%
(2013: 96.1%) and its five-year average combined ratio is strong
at 96%.

Fitch considers Mapfre strongly capitalized, based on a 'Strong'
score from the agency's FBM.  The group's regulatory solvency
ratio also remained strong at 259% at end-2014 (end-2013: 246%).
The increase was mainly driven by an appreciation of the value of
Spanish bonds due to declining spreads.

The ratings also reflect Mapfre's strong franchise and access to
distribution in Spain and Latin America, particularly Brazil.
Mapfre is the sixth-largest European non-life insurer and the
largest insurance group in Latin America.

However, Spain's sovereign rating continues to weigh on the
group's ratings.  The ratio of Spanish fixed income instruments
to shareholders funds remained high at end-2014 at 142% (YE13:
115%), which leaves Mapfre substantially exposed to the Spanish
economy.

RATING SENSITIVITIES

Mapfre's ratings could be downgraded if its exposure to the
Spanish insurance market or sovereign debt results in investment
losses with a material impact on its capital.  Mapfre's ratings
could also be downgraded if the Spanish sovereign is downgraded.

Factors that could trigger an upgrade include an upgrade of
Spain's sovereign rating, together with strong group
capitalization (as measured by, for example, Fitch's Prism FBM
remaining 'Strong') or exposure to Spanish sovereign debt falling
below 100% of group shareholders' funds (currently 142%).

The rating actions are:

Mapfre Familiar
Mapfre Global Risks Cia De Seguros Y Reaseguos
Mapfre Vida SA De Seguros Y Reaseguros
Mapfre Re Compania De Reaseguros S.A
   IFS affirmed at 'A-'; Outlook Stable

Mapfre SA

   Long-term IDR upgraded to 'BBB+' from 'BBB'; Outlook Stable
   EUR1 billion 5.125% senior unsecured debt due 2015 upgraded
     to 'BBB' from 'BBB-'
   EUR700 million 5.91% subordinated debt due 2037 with step-up
     in 2017 upgraded to 'BB+' from 'BB'


PYMES SANTANDER 11: Moody's Rates EUR178.8MM Serie C Notes 'Ca'
---------------------------------------------------------------
Moody's Investors Service assigned the following definitive
ratings to the debts issued by Fondo de Titulizacion de Activos
PYMES SANTANDER 11 (the Fondo):

  -- EUR2681.3 million Serie A Notes, Definitive Rating Assigned
     A2 (sf)

  -- EUR893.7 million Serie B Notes, Definitive Rating Assigned
     Caa1 (sf)

  -- EUR178.8 million Serie C Notes, Definitive Rating Assigned
     Ca (sf)

FTA PYMES SANTANDER 11 is a securitization of standard loans and
credit lines granted by Banco Santander S.A. (Spain) (Santander;
Baa1,on review for upgrade/P-2 Not on Watch; Outlook: Rating
Under Review) to small and medium-sized enterprises (SMEs) and
self-employed individuals.

At closing, the Fondo -- a newly formed limited-liability entity
incorporated under the laws of Spain -- will issue three series
of rated notes. Santander will act as servicer of the loans and
credit lines for the Fondo, while Santander de Titulizacion
S.G.F.T., S.A. will be the management company (Gestora) of the
Fondo.

As of April 2015, the audited provisional asset pool of
underlying assets was composed of a portfolio of 59,592 contracts
granted to SMEs and self-employed individuals located in Spain.
In terms of outstanding amounts, around 60.52% corresponds to
standard loans and 39.48% to credit lines. The assets were
originated mainly between 2010 and 2014 and have a weighted
average seasoning of 1.51 years and a weighted average remaining
term of 3.57 years. Around 9.34% of the portfolio is secured by
first-lien mortgage guarantees. Geographically, the pool is
concentrated mostly in Madrid (21.26%), Catalonia (17.25%) and
Andalusia (13.01%). At closing, any loans in arrears more than 30
days will be excluded from the final pool.

In Moody's view, the strong credit positive features of this deal
include, among others: (i) a relatively short weighted average
life of around 2.2 years; (ii) a granular pool (the effective
number of obligors over 600); and (iii) a geographically well-
diversified portfolio. However, the transaction has several
challenging features: (i) a strong linkage to Santander. related
to its originator, servicer, accounts holder and liquidity line
provider roles; (ii) no interest rate hedge mechanism in place;
and (iii) a complex mechanism that allows the Fondo to compensate
(daily) the increase on the disposed amount of certain credit
lines with the decrease of the disposed amount from other lines,
and/or the amortization of the standard loans. These
characteristics were reflected in Moody's analysis and definitive
ratings, where several simulations tested the available credit
enhancement and 5% reserve fund to cover potential shortfalls in
interest or principal envisioned in the transaction structure.

The ratings are primarily based on the credit quality of the
portfolio, its diversity, the structural features of the
transaction and its legal integrity.

In its quantitative assessment, Moody's assumed a mean default
rate of 12.46%, with a coefficient of variation of 39% and a
recovery rate of 37.0%. Moody's also tested other set of
assumptions under its Parameter Sensitivities analysis. For
instance, if the assumed default probability of 12.46% used in
determining the initial rating was changed to 16.2% and the
recovery rate of 37% was changed to 32%, the model-indicated
rating for Serie A, Serie B and Serie C of A2(sf), Caa1(sf) and
Ca(sf) would be Baa3(sf), Caa3(sf) and Ca(sf) respectively. For
more details, please refer to the full Parameter Sensitivity
analysis included in the New Issue Report of this transaction.

The principal methodology used in this rating was Moody's Global
Approach to Rating SME Balance Sheet Securitizations published in
January 2015.

In rating this transaction, Moody's used ABSROM to model the cash
flows and determine the loss for each tranche. The cash flow
model evaluates all default scenarios that are then weighted
considering the probabilities of the Inverse Normal distribution
assumed for the portfolio default rate. On the recovery side
Moody's assumes a stochastic (normal) recovery distribution which
is correlated to the default distribution. In each default
scenario, the corresponding loss for each class of notes is
calculated given the incoming cash flows from the assets and the
outgoing payments to third parties and noteholders. Therefore,
the expected loss or EL for each tranche is the sum product of
(i) the probability of occurrence of each default scenario; and
(ii) the loss derived from the cash flow model in each default
scenario for each tranche.

Therefore, Moody's analysis encompasses the assessment of stress
scenarios.

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

Factors or circumstances that could lead to a downgrade of the
ratings affected by the action would be (1) worse-than-expected
performance of the underlying collateral; (2) an increase in
counterparty risk, such as a downgrade of the rating of
Santander.

Factors or circumstances that could lead to an upgrade of the
ratings affected by the action would be the better-than-expected
performance of the underlying assets and a decline in a decline
in counterparty risk.


PYMES SANTANDER 11: DBRS Finalizes C Rating on Series C Notes
-------------------------------------------------------------
DBRS Ratings Limited has finalized its provisional ratings of the
following notes issued by FTA PYMES SANTANDER 11 (the Issuer):

EUR 2,681.3 million Series A Notes: A (sf) (the Series A
Notes)

EUR 893.7 million Series B Notes: CCC (sf) (the Series B
Notes)

EUR 178.8 million Series C Notes: C (sf) (the Series C Notes,
together, the Notes)

The transaction is a cash flow securitization collateralized by a
portfolio of term loans and credit lines originated by Banco
Santander, S.A. (Banco Santander or the Originator) to small and
medium-sized enterprises (SMEs) and self-employed individuals
based in Spain.  As of April 14, 2015, the transaction's
provisional portfolio included 59,592 loans and credit lines to
54,662 obligors, totaling EUR3,680.6 million.  At closing, the
Originator has selected the final portfolio of EUR3,575 million
from the above-mentioned provisional pool.

The portfolio also contains loans originated by Banesto prior to
its integration into Banco Santander completed in April 2014.

The rating on the Series A Notes addresses the timely payment of
interest and the ultimate payment of principal payable on or
before the Legal Maturity Date in August 2059.  The ratings on
the Series B and Series C Notes address the ultimate payment of
interest and the ultimate payment of principal payable on or
before the Legal Maturity Date in August 2059.

The provisional pool is moderately exposed to the "Building &
Development" industry, representing 17.0% of the outstanding
balance, "Food products" (10.4%) and "Business Equipment &
Services" (8.9%) complete the top three industries based on the
DBRS Industry classification.  The provisional portfolio exhibits
low obligor concentration.  The top obligor and the largest ten
obligor groups represent 0.7% and 6.7% of the outstanding
balance, respectively.  The top three regions for borrower
concentration are Madrid, Catalonia and Andalusia representing
approximately 21.3%, 17.3% and 13.0%, of the portfolio balance,
respectively.

The historical data provided by Santander distinguishes between
"normal" loans and credit lines and loans that have been
restructured (reestructurados).  The performance of both asset
types is very different and for that reason DBRS uses two
distinct probability of default (PD) for each.  Loans classified
as restructured represent 5.5% of the outstanding balance of the
provisional pool.  DBRS assumed a PD of 15.5% for such loans and
a PD of 3.4% for the remaining portfolio.

These ratings are based upon DBRS's review of the following
items:

-- The transaction structure, the form and sufficiency of
    available credit enhancement and the portfolio
    characteristics.

-- At closing, the Series A Notes benefit from a total credit
    enhancement of 30%, which DBRS considers to be sufficient
    to support the A (sf) rating.  The Series B Notes benefit
    from a credit enhancement of 5%, which DBRS considers to be
    sufficient to support the CCC (sf) rating.  Credit
    enhancement is provided by subordination and the Reserve
    Fund.  In addition, the Series A and Series B Notes also
    benefit from available excess spread.

-- The Series C Notes have been issued for the purpose of
    funding the EUR 178.8 million Reserve Fund.

-- The Reserve Fund will be allowed to amortize after the
    first two years if certain conditions -- relating to the
    performance of the portfolio and deleveraging of the
    transaction -- are met.  The Reserve Fund cannot amortize
    below EUR89.4 million.

-- The transaction parties' financial strength and
    capabilities to perform their respective duties and the
    quality of origination, underwriting and servicing
    practices.

-- An assessment of the operational capabilities of key
    transaction participants.

-- The ability of the transaction to withstand stressed cash
    flow assumptions and repay investors according to the
    approved terms.  Interest and principal payments on the
    Series A Notes will be made quarterly on the 25th day of
    February, May, August and November with the first payment
    date on August 25, 2015.

-- The soundness of the legal structure and the presence of
    legal opinions which address the true sale of the assets to
    the trust and the non-consolidation of the special purpose
    vehicle, as well as consistency with DBRS's "Legal Criteria
    for European Structured Finance Transactions" methodology.

DBRS determined these ratings as follows, as per the principal
methodology specified below:

-- The PD for the Originator was determined using the
    historical performance information supplied. For this
    transaction DBRS assumed two annualized PD, a PD of 3.4%
    for "normal" loans, and a PD of 15.5% for restructured
    loans.

-- The assumed weighted-average life (WAL) of the portfolio
    was 2.2 years.

-- The PD and WAL were used in the DBRS Diversity Model to
    generate the hurdle rate for the target ratings.

-- The recovery rate was determined by considering the market
    value declines (MVDs) for Spain, the security level and
    type of the collateral.  For the Series A Notes, DBRS
    applied the following recovery rates: 39.2% for secured
    loans and 16.3% for unsecured loans.  For the Series B
    Notes, DBRS applied the following recovery rates: 56.0% for
    secured loans and 21.5% for unsecured loans.

-- The break-even rates for the interest rate stresses and
    default timings were determined using the DBRS cash flow
    model.

-- The rating of the Series C Notes is based upon DBRS's
    review of the following considerations:

-- The Series C Notes are in the first loss position and, as
    such, are highly likely to default.

-- Given the characteristics of the Series C Notes as defined
    in the transaction documents, the default most likely would
    only be recognized at the maturity or early termination of
    the transaction.



=====================
S W I T Z E R L A N D
=====================


VISTAJET GROUP: S&P Assigns Prelim. 'B+' CCR, Outlook Stable
------------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary 'B+'
long-term corporate credit rating to VistaJet Group Holding S.A.,
a Swiss provider of private business jet services.  The outlook
is stable.

At the same time, S&P assigned preliminary 'B-' ratings to
VistaJet Malta Finance PLC's proposed US$300 million unsecured
fixed-rate notes due 2020, guaranteed by VistaJet Group Holding
S.A.

Final ratings will depend on VistaJet's successful issuance of
the senior unsecured notes and S&P's confirmation that VistaJet
will continue to have adequate liquidity following the bond
issuance. Accordingly, the preliminary ratings should not be
construed as evidence of the final rating.  If Standard & Poor's
does not receive the final documentation within a reasonable time
frame, or if the final documentation departs from the materials
S&P has already reviewed, it reserves the right to withdraw or
revise its ratings.

The preliminary rating on VistaJet reflects S&P's view of its
strong competitive position in the private jet industry, partly
offset by its high leverage.

The "fair" business risk profile assessment reflects S&P's view
that VistaJet should be able to use its leading market positions
in Europe, the Commonwealth of Independent States, and the Middle
East to continue to generate high EBITDA margins.  VistaJet's
margins are well above its peers in the aviation industry at
around 40%.  The company's profitability is unlikely to be as
volatile as that of the general aviation industry due to its
wealthy customer base, whose spending habits tend to be less
affected by economic conditions than those of the general public.
This was highlighted in 2008-2010 when VistaJet, unlike most of
the industry, did not experience a noticeable decrease in
revenues or EBITDA.  S&P views the company as having better-than-
average operating efficiency, as illustrated by the high and
increasing utilization of its aircraft.  Furthermore, VistaJet's
near-global reach should act as a key barrier to entry, as the
company is able to serve a large proportion of the globe without
charging for empty return flights to its customers.

On the negative side, S&P considers that VistaJet is relatively
small, operating only 47 aircraft as of March 31, 2015.  In S&P's
view, the company's planned rapid growth increases risks to
creditors, despite the company's strong track record in
delivering profitable growth.  VistaJet is looking to nearly
double its fleet over the next three years.  A significant
proportion of VistaJet's customers come from countries that S&P
views as moderately high or high risk places to do business,
although only 28% of flights are from these regions.  These
regions include Russia, the Middle East, and Africa.  However,
S&P notes that VistaJet has performed well through several issues
that have affected its markets, including the current sanctions
against Russia.

In S&P's base-case scenario, it expects VistaJet to remain highly
leveraged.  Key base-case assumptions include:

   -- S&P is expecting revenues to grow materially in 2015,
      driven by an increased number of aircraft and improved
      aircraft utilization, partly offset by a lower price per
      flying hour due to the lower prices of oil and jet fuel.
      VistaJet does not take oil price risk and hence t he
      benefits of lower oil prices are passed to customers in
      contractual relationships. In times of increased fuel
      costs, S&P would expect to see these passed onto the
      customer as well.

   -- Based on the information S&P has seen, VistaJet has a
      relatively flexible cost base, and in its view costs will
      increase slightly below the revenue growth rate as higher
      utilization lead to efficiency gains.  This should allow
      EBITDA margins to improve to around 44%-46%.  S&P's
      operating cost expectations also include lower fuel costs
      offsetting the revenue decline.

   -- S&P is expecting the company to take delivery of a further
      nine aircraft in 2015, leading to a significant increase in
      debt.

S&P's base case anticipates a weighted-average funds from
operations (FFO) to debt ratio of about 8% for the period 2015-
2016.  Supplemental ratios, such as free operating cash flow to
debt and cash flow from operations, also indicate a highly
leveraged capital structure by our assessment.  The interest
coverage ratios are slightly stronger at about 3x in S&P's base-
case scenario.

The preliminary rating on VistaJet incorporates S&P's view of
several factors that S&P considers positive for the company by
comparison with its peers.  These include VistaJet's ability to
materially slow down its new jet deliveries over the next two-to-
three years, which should lead to positive free cash flow
generation and better financial ratios.  The company also has
fixed-price trade-in rights with pre-owned markets on several
aircraft and strong interest coverage ratios.  Therefore, S&P
applies its positive comparable rating analysis modifier.

S&P's preliminary issue ratings reflect its view that the most
likely center of main interest for VistaJet would be Malta, as a
material number of aircraft and key operating entities are
domiciled in Malta.  Standard & Poor's has not performed a
jurisdictional survey of Malta, which means it determine the
difference between the corporate credit rating and the issue
rating based on the amount of priority obligations ranking ahead
of the senior unsecured bond holders.  As VistaJet's current
capital structure mainly consists of finance leases and nearly
all aircraft are secured, there are limited number of
unencumbered assets.  In S&P's calculation, priority obligations
are more than 70% of the group's total assets, and therefore S&P
rates the issue two notches below the corporate credit rating at
'B-'.

The stable outlook reflects S&P's view that VistaJet will be able
to maintain adjusted FFO to debt above 8% and EBITDA interest
coverage ratios above 3x over the next 12 months, despite
significant capex.  S&P anticipates that ratios will be supported
by material revenues and profit growth due to the higher number
of aircraft in use and the company's track record of converting
capacity into sales.

S&P could take a negative rating action if VistaJet's financial
ratios decline more than anticipated, especially if adjusted FFO
to debt declined below 7% or EBITDA interest coverage dropped to
below 2.5x.  In this scenario, S&P believes the financial ratios
would be weak and the other positive credit factors, including
the ability to reduce balance sheet leverage by moderating growth
spending, would no longer support the rating.  S&P could also
lower the rating if liquidity weakened, for example because
VistaJet was unable to finance upcoming deliveries well in
advance.

S&P could take a positive rating action if VistaJet's adjusted
FFO to debt were to increase to above 12%.  In S&P's view, this
would require the company to perform significantly better than
its base-case scenario, with revenues growth more than 10% higher
and increasing profitability over the next two years.
Alternatively, S&P could raise the rating if the company
increased FFO to debt to above 12% by moderating its investment
plans and utilizing some of its cash generation for debt service.
However, S&P believes this scenario to be unlikely due to the
company's track record of profitable growth.



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


UKRAINE: Russia to Seek Timely Repayment of Debt Despite New Law
----------------------------------------------------------------
Darya Korsunskaya and Gareth Jones at Reuters report that Russia
on May 20 demanded the timely repayment of all debts owed to it
by Ukraine and accused Kiev of effectively preparing the way for
default with a new law.

Russia threatened to take the issue to international courts if
necessary, Reuters notes.

The law, approved by Ukraine's parliament on May 18, gives the
government the right to miss payments to its international
creditors as it wrangles over the terms for restructuring $23
billion worth of foreign debt, Reuters relates.

Russia holds a US$3 billion Ukrainian Eurobond whose full
repayment is due by the end of the year. Moscow, whose relations
with Kiev have been wrecked by a year-long conflict in eastern
Ukraine, has declined to join the debt restructuring talks,
Reuters discloses.

President Vladimir Putin, speaking at a meeting with government
ministers, as cited by Reuters, said he found the new law
"strange".

"To effectively announce an impending default shows a poor level
of professional responsibility, all things considered," Reuters
quotes Mr. Putin as saying, noting that the International
Monetary Fund does not lend to countries in default.

Russian Finance Minister Anton Siluanov said Moscow would seek
redress in international courts if Ukraine did not respect the
terms of its foreign debt repayments, Reuters relays.

"For the time being, we don't have any grounds (to act). If a
payment is missed, we will exercise our right to go to court,"
Mr. Siluanov, as cited by Reuters, said.  He said Ukraine was due
to make its next Eurobond repayment to Russia, worth $75 million,
on June 20, Reuters notes.

According to Reuters, Mr. Siluanov also said Russia would hold
consultations with the IMF on the Ukrainian debt issue "to defend
its interests during the provision of regular tranches of
financial help to Ukraine".

Mr. Putin said the terms of the Eurobond had been particularly
generous to Ukraine and that Russia could have demanded an
earlier redemption of the bond but had not done so at the request
of the IMF, Reuters recounts.

In addition to the Eurobond, Prime Minister Dmitry Medvedev said
Russian banks were also heavily exposed to Ukraine through loans
worth around US$25 billion, according to Reuters.

In the event of a default on either commercial or sovereign debt
held by Russia, Mr. Medvedev added, "it will be essential to use
all possible means of defense, including via the courts", Reuters
relays.



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


BARCLAYS BANK: Fitch Affirms 'BB+' Rating on Tier 1 Instruments
---------------------------------------------------------------
Fitch Ratings has affirmed Barclays Bank plc's Long-term Issuer
Default Rating (IDR) and senior debt ratings at 'A', Short-term
IDR and debt ratings at 'F1' and its Viability Rating (VR) at
'a'. The Outlook on the Long-term IDR is Stable.  At the same
time, Fitch has affirmed the ratings of Barclays plc, the bank's
holding company.

The rating affirmations are in conjunction with Fitch's review of
sovereign support for banks globally, which the agency announced
in March 2014.  In line with its expectations announced in March
last year and communicated regularly since then, Fitch believes
legislative, regulatory and policy initiatives have substantially
reduced the likelihood of sovereign support for US, Swiss and
European Union commercial banks.

As a result, Fitch believes that, in line with its Support Rating
(SR) definition of '5', extraordinary external support while
possible can no longer be relied upon for Barclays Bank.  Fitch
has, therefore, downgraded its SR to '5' from '1' and revised its
Support Rating Floor (SRF) to 'No Floor' from 'A'.  The Long-term
IDR is driven by Barclays Bank's VR and is therefore not affected
by the actions on the SR and SRF.

The ratings actions are also part of a periodic portfolio review
of the Global Trading and Universal Banks (GTUBs), which comprise
12 large and globally active banking groups.  A strong rebound in
earnings from securities businesses in 1Q15 is a reminder of the
upside potential banks with leading market shares can enjoy.
However, regulatory headwinds remain strong, with ever higher
capital requirements, costs of continuous infrastructure upgrades
and a focus on conduct risks.

As capital and leverage requirements evolve, GTUBs are reviewing
the balance of their securities operations with other businesses
and adapting their business models to provide the most capital-
efficient platforms for the future.  Fitch expects the GTUBs'
other core businesses, including retail and corporate banking,
wealth and asset management, to perform well as economic growth,
which Fitch expects to be strongest in the US and UK, will
underpin revenue.  However, pressure on revenue generation in a
low interest-rate environment is likely to persist, particularly
in Europe, but low loan impairment charges in domestic markets
should help operating profitability.

KEY RATING DRIVERS - IDRS, VR AND SENIOR DEBT

Barclays Bank's IDRs, VR and senior debt rating reflect Fitch's
expectation that the bank's diversified businesses should enable
it to generate adequate profitability while maintaining sound
capitalization.  Barclays Bank has a strong franchise in domestic
retail and corporate banking and in international cards through
Barclaycard.  Its capital markets activities are being scaled
back, but the bank will maintain a sizeable investment bank
division.

Barclays Bank has continued to strengthen its capitalization and
reported a consolidated fully loaded common equity tier 1 (CET1)
ratio of 10.6% at end-1Q15, which is within its peer group range.
The group remains committed to achieving a CET1 ratio above 11%
in 2016, targeting a management buffer of up to about 150 bps
above the regulatory minimum buffer requirements, including
pillar 2A requirements.  This means that the group is likely to
operate with a CET1 ratio of near 12%.  The group's consolidated
leverage ratio remained flat in 1Q15 at 3.7%.  The bank plans to
reach a leverage ratio of above 4%.  Although this is still
weaker than its US peers, we believe that the bank would be able
to strengthen its leverage ratio further, if required.

The operating profitability of the group's core businesses in
1Q15 benefited from the sound performance of capital markets
activities in its investment bank as market volatility led to
increased customer activity in a seasonally strong quarter.
Fitch expects the bank's retail and corporate banking businesses
to perform well and contribute to sound and stable earnings, with
profitability from its credit card business remaining solid.
Barclays continues to reduce operating expenses, which will be
important to achieving its performance targets.

Barclays Bank's profitability has been hit by conduct costs
relating to regulatory investigations and customer redress.
Conduct and litigation risk continues to affect Barclays Bank and
its GTUB peers, and we expect material further conduct costs.
The bank's IDRs and VR reflect our view that the bank should be
able to absorb sizeable fines and sanctions which, however, are
difficult to predict.  Among the outstanding investigations by
various authorities are matters relating to foreign exchange
rate-setting, which are likely to result in material fines.  At
end-1Q15, the bank held around GBP2.5bn provisions for legal,
competition and regulatory matters, of which GBP2.09bn was for
primarily foreign exchange-related investigations and litigation.

The Stable Outlook is based on Fitch's expectation that Barclays
Bank will improve its profitability in line with its business
plan and will further strengthen capitalization.

RATING SENSITIVITIES - IDRS, VR AND SENIOR DEBT

Barclays Bank's IDRs and VRs and senior debt ratings are
primarily sensitive to the bank's progress in meeting its
performance and capital targets as planned.

Risk exposure in the investment bank has declined, and the
investment bank division's profitability improved in 1Q15.  Fitch
do not expect risk appetite to increase, and earnings volatility,
while potentially higher than in other business divisions, should
decline.

Ratings would come under pressure if the division's performance
indicates increased risk appetite, or if earnings volatility
increases materially.  Ratings would also come under pressure if
the bank's capital markets franchise is damaged materially to the
extent that it affects the business model.  Upside potential for
Barclays Bank's VR is limited in the medium term as the
investment bank will remain sizeable.

The ratings are also sensitive to the bank's ability to achieve
its target CET1 and leverage ratios.  Fitch expects material
conduct costs, which however should be manageable given the
bank's capitalization.  Conduct costs above our base case
expectations that would affect capitalization without a credible
plan to restore capital ratios swiftly would lead to pressure on
Barclays Bank's ratings.  Other sanctions or business
restrictions, which could be triggered if Barclays US non-
prosecution agreement is revoked and could affect the group's
operations materially, would also put pressure on ratings.

Barclays Bank has made progress in reducing assets in its
Barclays Non-Core (BNC) unit, and we expect the bank to reduce
these assets further.  Risk-weighted assets (RWA) in BNC amounted
to GBP65bn at end-1Q15, and the unit will continue to generate
losses for the group, which should gradually narrow as assets run
off and operating costs are reduced.  Fitch expects the group to
reduce the drag on overall performance from BNC, and failure to
reduce exposure as planned, leading to weaker profitability and
capital ratios, could put ratings under pressure.

The group's structure is evolving as it will be required to
establish an intermediate holding company in the US and create a
ring-fenced bank in the UK.  The creation of separately
capitalised and ring-fenced legal entities within the group could
result in ratings differentiation between the legal entities over
time.

The group has significant layers of subordinated debt and hybrid
capital instruments, which Fitch however does not consider large
enough to provide sufficient protection of senior creditors to
warrant assigning a Long-term IDR above its VR under Fitch's
criteria.  Barclays Bank's IDR could be upgraded one notch above
its VR if debt issued by the holding company and Barclays Bank's
own external junior debt provide greater protection for senior
creditors of Barclays Bank.  Because external senior debt issued
by the holding company is currently downstreamed as senior debt
to Barclays Bank, it ranks pari passu with Barclays Bank's
external senior debt and thus does not afford protection to it.

KEY RATING DRIVERS AND SENSITIVITIES - SR AND SRF

The SR and SRF reflect Fitch's view that senior creditors can no
longer rely on receiving full extraordinary support from the
sovereign in the event that Barclays Bank becomes non-viable.  In
Fitch's view, the EU's Bank Recovery and Resolution Directive
(BRRD) and legislation and regulation in the UK are now
sufficiently progressed to provide a framework for resolving
banks that is likely to require senior creditors participating in
losses, if necessary, instead of or ahead of a bank receiving
sovereign support.  In the EU, BRRD has been effective in member
states since Jan. 1, 2015, including minimum loss absorption
requirements before resolution financing or alternative financing
(eg, government stabilization funds) can be used.  Full
application of BRRD, including the bail-in tool, is required in
the EU from Jan. 1, 2016.  In the UK, legislation and regulation
to allow for the bail-in of senior creditors has been in place
since Jan. 2015.

Any upgrade to the SR and upward revision to the SRF would be
contingent on a positive change in the sovereign's propensity to
support its banks.  While not impossible, this is highly unlikely
in Fitch's view.

KEY RATING DRIVERS AND SENSITIVITIES - SUBORDINATED DEBT AND
OTHER HYBRID SECURITIES

Subordinated debt and other hybrid capital issued by Barclays
Bank and Barclays plc are all notched down from their respective
VRs in accordance with Fitch's assessment of each instrument's
respective non-performance and relative loss severity risk
profiles, which vary considerably.

Subordinated debt and other hybrid capital ratings are primarily
sensitive to a change in Barclays Bank's or Barclays plc's VRs.
The securities' ratings are also sensitive to a change in their
notching, which could arise if Fitch changes its assessment of
the probability of their non-performance relative to the risk
captured in the issuers' VRs.  This may reflect a change in
capital management in the group or an unexpected shift in
regulatory buffer requirements, for example.

KEY RATING DRIVERS - HOLDING COMPANY

Barclays plc's IDRs and VR are equalized with those of Barclays
Bank and reflect its role as the bank holding company and the
absence of double leverage at the holding company level.  The
holding company has issued increasing volumes of debt, including
hybrid additional tier 1 instruments, tier 2 debt and senior
debt. Debt issued by the holding company is down-streamed to the
operating company as mirror instruments, and we expect double
leverage at the holding company to remain well-managed.

Fitch expects senior debt issued by the holding company to become
eligible for the proposed total loss-absorbing capacity (TLAC)
requirements, but only if internally down-streamed senior debt is
contractually rendered junior to the operating companies' senior
obligations, which may occur by 2019 or earlier to meet future
regulatory requirements.

Barclays plc's SR and SRF reflect Fitch's view that support from
the UK authorities for the holding company is possible, but
cannot be relied on, primarily because of the holding company's
low systemic importance.

KEY RATING SENSITIVITIES - HOLDING COMPANY

Fitch could notch the holding company's IDRs and VR below
Barclays Bank's ratings if double leverage at Barclays plc
increases above 120% or if the role of the holding company
changes, both of which we do not expect.  Together with the
creation of separately capitalized subsidiaries, over time
further expected debt issuance by Barclays plc could change the
relative position of creditors of different group entities, which
would be reflected in different entity ratings, including the
holding company's VR, IDR and debt ratings.

As the SRF is 'No Floor', the holding company's Long-term IDR is
driven solely by its VR and is therefore primarily sensitive to
the same drivers as Barclays Bank's VR.

The rating actions are:

Barclays Bank

Long-term IDR: affirmed at 'A'; Outlook Stable
Short-term IDR: affirmed at 'F1'
Viability Rating: affirmed at 'a'
Support Rating: downgraded to '5' from '1'
Support Rating Floor: revised to 'No Floor' from 'A'
Senior unsecured debt, including program ratings: affirmed at
  'A'/ 'F1'
Market-linked senior securities: affirmed at 'Aemr'
Government guaranteed senior long-term debt: affirmed at 'AA+'
Lower Tier 2 debt: affirmed at 'A-'
Upper Tier 2 debt: affirmed at 'BBB'
Additional Tier 1 instruments: affirmed at 'BB+'
Preference shares with no constraints on coupon omission:
  affirmed at 'BB+'
Other hybrid Tier 1 instruments: affirmed at 'BBB-'
Tier 2 contingent capital notes: affirmed at 'BBB-'

Barclays plc

Long-term IDR: affirmed at 'A'; Outlook Stable
Short-term IDR: affirmed at 'F1'
Senior debt including program ratings: affirmed at 'A'/'F1'
Viability Rating: affirmed at 'a'
Support Rating: affirmed at '5'
Support Rating Floor: affirmed at 'No Floor'
Tier 2 instruments: affirmed at 'A-'
Basel III compliant Additional Tier 1 instruments: affirmed at
  'BB+'

Barclays US CCP Funding LLC

US repo notes program: affirmed at 'F1'


BOING TOPCO: S&P Affirms, Then Withdraws 'B' Corp. Credit Rating
----------------------------------------------------------------
Standard & Poor's Ratings Services said that it affirmed and
withdrew its 'B' long-term corporate credit rating on Rose HoldCo
Ltd., and assigned a 'B' long-term corporate credit rating to
Boing TopCo Ltd.  Both entities are holding companies of U.K.-
based IMO Car Wash.  The outlook is stable.

The rating actions reflect a change in IMO's corporate structure
following a refinancing in July 2014.  The group now publishes
its annual audited accounts at Boing TopCo rather than Rose
HoldCo, and S&P has therefore transferred the 'B' rating to Boing
TopCo. The rating continues to be based on S&P's assessment of
the group's business risk profile as "weak" and its financial
risk profile as "highly leveraged."

"We view IMO's small scale and narrow scope of operations, given
its focus on conveyor car wash services, as the main constraints
in our assessment of its business risk profile.  Furthermore, the
group is reliant on two key markets, Germany and the U.K., for
almost 75% of its EBITDA.  The most significant factor affecting
IMO's business is the weather, with rainfall and mild winters
potentially having an adverse effect on the group's profitability
through lower volumes and lower-margin wash types.  IMO's
exposure to weather conditions increases the volatility of the
group's profitability during downturns.  And, although IMO has a
market-leading position within the conveyor category, the overall
car wash industry is highly fragmented; the majority of the
market is dominated by petrol stations in Germany and commercial
hand car washes in the U.K," S&P said.

These weaknesses are partly offset by the high EBITDA margins
that IMO generates, at around 44%-45% on a Standard & Poor's-
adjusted basis.  The company is able to achieve this through its
operator model, under which it does not bear staff costs at its
sites.  IMO provides equipment, consumables, and chemicals to the
site operators, who are self-employed and earn a commission for
each wash, augmented for the type of wash.  Site operators are
also able to earn additional income through ancillary services
such as car vacuuming or wheel cleaning.

S&P's assessment of IMO's business risk profile incorporates
S&P's views of "intermediate" risk for the business and consumer
services industry and "very low" country risk for the group.
IMO's operations are primarily based in very low risk countries
such as Germany and the U.K., which together account for around
two-thirds of the group's revenues, with the remainder coming
from other European countries and Australia.

The financial risk profile assessment is underpinned by IMO's
financial-sponsor ownership by TDR Capital and our projection
that IMO's adjusted debt-to-EBITDA ratio will be about 7.7x at
the end of 2015.  S&P's calculation includes our debt-like
treatment of the preference shares and shareholder loans.
Excluding these instruments, IMO's financial risk profile would
remain in line with a "highly leveraged" assessment, as S&P's
criteria defines the term, with debt to EBITDA of around 5.6x by
Dec. 31, 2015.  S&P do, however, recognize the cash-preserving
function of these instruments and forecast that IMO's FFO cash
interest coverage will exceed 3x.

S&P includes in its calculation of debt about GBP90 million of
operating lease commitments.  S&P anticipates gradually
increasing debt going forward due to the payment-in-kind nature
of the preference shares and the shareholder loans, and S&P's
view that IMO's rent obligations are likely to steadily increase
over time.

The combination of the "weak" business risk profile and "highly
leveraged" financial risk profile assessments leads to an anchor
of 'b' or 'b-' under S&P's corporate criteria.  S&P selects the
higher 'b' anchor for IMO as group's cash interest and fixed
charge coverage ratios are relatively strong compared with peers
with similar business and financial risk assessments.

S&P's base-case operating scenario for 2015 assumes:

   -- Mid-single-digit revenue growth, reflecting the new site
      opening and renovation program.

   -- Improving EBITDA margins at around 44%-45% due to
      optimizations of the existing site portfolio.  Capital
      expenditure (capex) of GBP27 million, the large majority of
      which for the renovation of existing sites and the opening
      of new sites.

   -- No dividends.

Based on these assumptions, S&P arrives at these credit measures
in 2015:

   -- Adjusted debt to EBITDA of 7.7x.
   -- FFO cash interest coverage of 3.7x.
   -- Fixed charge coverage of 1.7x.
   -- Marginally negative free operating cash flow (FOCF).

The stable outlook reflects S&P's view that IMO's position in its
niche market of conveyor car wash services will enable it to
generate growing revenues and EBITDA over the next 12-18 months.

Despite the marginally negative FOCF S&P forecasts for 2015, it
expects IMO will be able to service its debt and operating lease
obligations and maintain a fixed charge coverage ratio of about
1.7x over the coming 12-18 months.  S&P also considers IMO's
"adequate" liquidity as commensurate with a 'B' rating.

S&P considers the likelihood of a positive rating action to be
remote, due to IMO's highly leveraged balance sheet.  S&P could
consider an upgrade if IMO's adjusted leverage decreases to less
than 5x on a sustainable basis and fixed charge coverage
strengthens to comfortably more than 2x.

S&P could take a negative rating action if IMO's ability to
service its debt and operating lease obligations weakens, or if
its funds from operations (FFO) cash interest coverage ratios or
liquidity deteriorates.  The most likely cause of such
deterioration would be the operating performance of the group
coming under pressure due to unfavorable weather conditions
constraining revenues, or intensifying competitive pressure in
the car wash industry.


DFS FURNITURE: S&P Raises CCR to 'B+' on IPO Completion
-------------------------------------------------------
Standard & Poor's Ratings Services raised its long-term corporate
credit rating on U.K. upholstered furniture retailer DFS
Furniture Holdings PLC (DFS) to 'B+' from 'B'.  At the same time,
S&P removed the rating from CreditWatch with positive
implications, where it placed it on Feb. 12, 2015.

S&P subsequently withdrew the long-term rating at DFS' request.
S&P also removed its issue rating on the senior secured notes
from CreditWatch and then withdrew it along with the recovery
ratings, as the notes have been fully repaid.

The outlook was stable at the time of the withdrawal.

The upgrade followed DFS' successful IPO on the London Stock
Exchange and subsequent debt reduction.  DFS raised about GBP78
million (net of costs) through its IPO, with a free float of
40.6%, which gives the company an equity value of approximately
GBP543 million.  DFS used GBP78 million of the net proceeds,
about GBP33 million of cash in hand, and GBP200 million of the
new senior bank loan facility to repay existing senior secured
notes. In addition, all outstanding shareholder loans have been
converted into equity, and the financial sponsor owner, Advent
Diamond (Luxembourg) S.a.r.l (Advent), has reduced its
shareholding to approximately 53.2%.  As a result of the debt
repayments and reduction in ownership by the financial sponsor,
S&P is revising its assessment of DFS' financial risk profile
upward to "aggressive" from "highly leveraged."

In addition, S&P revised its assessment of DFS' financial policy
upward to "FS-5" from "FS-6," because the company's leverage was
consistent with S&P's "aggressive" financial risk profile and it
perceives the risk of it releveraging as low.  The reduction of
the private equity sponsors' shareholdings and debt reduction
should, in S&P's opinion, lead the company to pursue a more
moderate and predictable financial policy, particularly with
respect to shareholder returns.

S&P based its 'bb-' anchor on DFS on S&P's assessment of the
company's "fair" business risk profile and "aggressive" financial
risk profile.  S&P applied a one-notch downward adjustment to the
anchor to account for its "negative" comparable rating analysis--
whereby it reviewed an issuer's credit characteristics in
aggregate--to reach a corporate credit rating of 'B+'.  The
downward notching reflected that DFS' financial risk profile was
at the weaker end of S&P's "aggressive" category.


SERVICE ALUMINIUM: Cash Flow Pressures Prompt Administration
------------------------------------------------------------
Insider Media reports that Service Aluminium Co Ltd. has entered
administration following a period of losses which led to
"considerable cash flow pressures".

The company ceased trading prior to the appointment of Graham
Randall -- graham.randall@quantuma.com -- and Mark Roach --
mark.roach@quantuma.com -- from Quantuma on May 19, Insider Media
relates.

According to Insider Media, all 22 staff have been made redundant
and the administrators said they were now negotiating with
potential buyers for the business and its assets with a view to
maximizing the return to creditors.

"The company had its busiest ever year in 2008 and geared up
considerably, extending its premises and taking on additional
staff.  However a drop in sales and margins the following year
led to the company entering into a five-year company voluntary
arrangement," Insider Media quotes Mr. Randall as saying.

"Although the company completed the CVA six months ago, further
losses were incurred and new liabilities were accumulating
resulting in the company's credit rating falling and the largest
supplier recently withdrawing its support."


STICHTING PROFILE: Fitch Affirms 'B+' Rating to Class E Notes
-------------------------------------------------------------
Fitch Ratings has affirmed Stichting Profile Securitisation 1 as:

  GBP232.6 million Class SCDS notes affirmed at 'AA+sf' ; Outlook
  Negative

  GBP67.6 million Class A+ notes affirmed at 'AA+sf' ; Outlook
  Negative

  GBP17.2 million Class A notes affirmed at 'A+sf' ; Outlook
  Negative

  GBP5.4 million Class B notes affirmed at 'BBB+sf' ; Outlook
  revised to Stable from Negative

  GBP3.0 million Class C notes affirmed at 'BBBsf' ; Outlook
  revised to Stable from Negative

  GBP 3.1 million Class D notes affirmed at 'BB+sf' ; Outlook
  revised to Stable from Negative

  GBP3.7 million Class E notes affirmed at 'Bsf' ; Outlook
revised
  to Stable from Negative

Stichting Profile Securitisation 1 is a synthetic securitization
of exposures to public private partnership project loans in the
UK.

KEY RATING DRIVERS

The affirmations reflect the transaction's stable performance
during the past year.

The revisions of the Outlooks on the mezzanine and junior notes
reflect the continued amortization of underlying portfolio, which
increases the credit enhancement available to the notes, and an
improvement in credit quality due to positive rating migration.
The Outlook on the senior notes remains Negative, indicating a
vulnerability to downgrade should the quality of the underlying
portfolio deteriorate.

Since May 2014, the underlying portfolio has amortized to GBP271
million from GBP291 million, which has resulted in increased
credit enhancement across the structure.  The credit enhancement
available to the Class A+, A, B, C, D and E notes has grown to
14.3%, 7.9%, 5.9%, 4.8%, 3.7% and 2.3% from 13.3%, 7.4%, 5.5%,
4.5%, 3.4% and 2.2%, respectively.

In the same period, the weighted average rating factor of the
portfolio has reduced to 7.03 from 7.52 due to the upgrade of
four assets (marginally offset by the downgrade of one asset),
which has reduced the expected default rates in the stress
scenarios analyzed by Fitch.  There were no credit events in the
period.

The underlying portfolio remains highly concentrated, with the
largest obligor in the portfolio representing 5.1%. The top five
and top 10 obligors represent 24.7% and 46.9%, respectively.
Obligor concentration can increase volatility in a transaction as
a single default can have a large impact.  Fitch accounts for
this in its analysis by applying additional stresses to the top
five obligors.

The majority of the portfolio is exposed to the education (48.0%
of outstanding notional) and healthcare (41.5% of outstanding
notional) sectors.  This has remained largely unchanged since
origination.

Due to a strong dependence on the UK sovereign, both for revenue
and recoveries in the event of default, the notes' ratings are
capped at the rating of the UK sovereign (AA+/Stable).
Additionally, as the collateral supporting the transaction is in
the form of certificates of indebtedness from KfW
(AAA/Stable/F1+), the notes' ratings is credit linked to KfW's
rating.  A downgrade of KfW would lead to a downgrade of the
rated notes.

The Fitch estimated recovery rates on the underlying portfolio
range between 65% and 95%.  The analysis is based on asset-
specific recovery assumptions in tiers of 85% (base case) to 60%
(AAA stress case).  Additionally, the correlation assumptions for
the analysis were based on a relative ranking of project finance
correlations, which are lower than for corporate debt obligations
due to structural features.  Correlation for projects within the
UK, but from different sectors is considered to be 7%, whereas
the correlation for two projects in the UK and the same sector,
such as healthcare can be up to 13%.

RATING SENSITIVITIES

As part of its analysis, Fitch considers the sensitivity of the
notes' ratings to additional stresses on default and recovery
rate assumptions undertaken as part of the rating analysis.

The agency tested two additional sensitivities, one by increasing
the assumed default rates by 25% and the other by decreasing the
assumed recovery rates by 25%.  In the former case, there would
be a downgrade of up to three notches on the rated notes while in
the latter case, there would be a downgrade of up to six notches
on the rated notes.


TULLIS RUSSELL: More Job Losses After No Buyer Found
----------------------------------------------------
Perry Gourley at The Scotsman reports that further job losses
have been made at Tullis Russell after administrators said they
had failed to attract a buyer by a deadline of this week.

A total of 325 employees lost their jobs last month after the
business collapsed and administrators from KMPG said on May 19
that a further 21 had been made redundant, The Scotsman relates.
There are 128 employees left at the plant in Markinch where
operations are now being wound down with a view to selling the
assets, The Scotsman discloses.

Some 200 parties have been contacted by KPMG in a bid to sell the
employee-owned business but no offers had been received by the
deadline of May 18, The Scotsman relays.  Blair Nimmo, joint
administrator, as cited by The Scotsman, said the level of
interest shown in the business had been "disappointing".

"The business continues to face considerable economic challenges
as a result of weakening global demand for printed materials,
rising raw material costs and the strengthening of sterling
against the euro.

"We will now be working with the company's remaining employees to
continue to wind down operations and focus on realising the
company's assets.  Unfortunately that will mean further
redundancies but we will continue to work with government
agencies to offer support to those affected."

Tullis Russell is a Fife-based paper maker.



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


* BOOK REVIEW: The Money Wars
-----------------------------
Author: Roy C. Smith
Publisher: Beard Books
Softcover: 370 pages
List Price: $34.95
Review by David Henderson
121
Get your own personal today at
http://www.amazon.com/exec/obidos/ASIN/1893122697/internetbankrup
t

Business is war by civilized means. It won't get you a tailhook
landing on an n aircraft carrier docked in San Diego, but the
spoils of war can be glorious to behold.

Most executives do not approach business this way. They are
content to nudge along their behemoths, cash their options, and
pillage their workers. This author calls those managers "inertia
ridden." He quotes Carl Icahn describing their companies as run
by "gross and widespread incompetent management."

In cycles though, the U.S. economy generates a few business
warriors with the drive, or hubris, to treat the market as a
battlefield. The 1980s saw the last great spectacle of business
titans clashing. (The '90s, by contrast, was an era of the
investment banks waging war on the gullible.) The Money Wars is
the story of the last great buyout boom. Between 1982 and 1988,
more than ten thousand transactions were completed within the
U.S. alone, aggregating more than $1 trillion of capitalization.

Roy Smith has written a breezy read, traversing the reader
through an important piece of U.S. history, not just business
history. Two thirds of the way through the book, after covering
early twentieth century business history, the growth of financial
engineering after WWII, the conglomerate era, the RJR-Nabisco
story, and the financial machinations of KKR, we finally meet the
star of the show, Michael Milken. The picture painted by the
author leads the reader to observe that, every now and then, an
individual comes along at the right time and place in history who
knows exactly where he or she is in that history, and leaves a
world-historical footprint as a result. Whatever one may think of
Milken's ethics or his priorities, the reader will conclude that
he is the greatest financial genius this country has produced
since J.P. Morgan.

No high-flying financial era has ever happened in this country
without the frothy market attracting common criminals, or in some
cases making criminals out of weak, but previously honest men
(and it always seems to be men). Something there is about
testosterone and money. With so many deals being done, insider
trading was inevitable. Was Michael Milken guilty of insider
trading? Probably, but in all likelihood, everybody who attended
his lavish parties, called "Predators' Balls," shared the same
information.

Why did the Justice Department go after Milken and his firm,
Drexel Burnham Lambert with such raw enthusiasm? That history has
not yet been written, but Drexel had created a lot of envy and
enemies on the Street. When a better history of the period is
written, it will be a study in the confluence of forces that made
Michael Milken's genius possible: the sclerotic management of
irrational conglomerates, a ready market for the junk bonds
Milken was selling, and a few malcontent capitalist like Carl
Icahn and Ted Turner, who were ready and able to wage their own
financial warfare.

This book is a must read for any student of business who did not
live through any of these fascination financial eras. Roy C.
Smith is a professor of entrepreneurship, finance and
international business at NYU, and teaches on the faculty there
of the Stern School of Business. Prior to 1987, he was a partner
at Goldman Sachs. He received a B.S. from the Naval Academy in
1960 and an M.B.A. from Harvard in 1966.


                            *********

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.


                            *********


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 2015.  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,
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members of the same firm for the term of the initial subscription
or balance thereof are US$25 each.  For subscription information,
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202-362-8552.


                 * * * End of Transmission * * *