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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

           Tuesday, April 26, 2016, Vol. 17, No. 081


                            Headlines


C Y P R U S

CYPRUS: Fitch Affirms B+ Long-Term Issuer Default Ratings


C Z E C H   R E P U B L I C

NEW WORLD: OKD Unit May Commence Insolvency Proceedings This Week


F R A N C E

LAFARGE SA: Egan-Jones Withdraws BB Sr. Unsecured Debt Rating
VINCI SA: Egan-Jones Cuts Sr. Unsecured Rating to BB From BB-


G E R M A N Y

SENVION TOPCO: Moody's Affirms B1 Corporate Family Rating


I R E L A N D

LION I RE: Fitch Affirms B+sf Rating on EUR190MM Notes


M A L T A

DANIELS SHOPPING: Judge Orders Liquidation Following Insolvency


P O R T U G A L

BANCO BPI: S&P Revises BB- Rating CreditWatch to Developing


R O M A N I A

COMPLEXUL ENERGETIC: To Undergo Restructuring, Close Mines


R U S S I A

KHAKASSIA REPUBLIC: Fitch Cuts LT Issuer Default Ratings to BB-
KEMEROVO REGION: Fitch Affirms BB- LT Issuer Default Ratings
MARI EL REPUBLIC: Fitch Affirms BB LT Issuer Default Ratings
SOLLERS-FINANCE: Fitch Assigns B+ LT Issuer Default Ratings
UDMURTIA REPUBLIC: Fitch Affirms BB- LT Issuer Default Ratings

UNITED CONFECTIONERS: Fitch Affirms B LT Issuer Default Rating


S P A I N

BANCO POPULAR ESPANOL: Fitch Assigns 'B-' Preferred Secs. Rating
REPSOL SA: Egan-Jones Cuts LC Commercial Paper Rating to B
TELEFONICA SA: Egan-Jones Cuts FC Sr. Unsecured Rating to BB-
* Fitch Says Spain 2015 Deficit Highlights Fiscal Challenge


T U R K E Y

MINTAY: Files Bankruptcy Protection, Operations to Continue


U K R A I N E

NAFTOGAZ NJSC: Fitch Affirms CCC LT Issuer Default Ratings


U N I T E D   K I N G D O M

ANGLO AMERICAN: Egan-Jones Assigns BB- Sr. Unsecured Rating
BAKKAVOR FINANCE: S&P Raises CCR to B+, Outlook Stable
BESTWAY UK: Moody's Issues Correction to April 19 Rating Release
BHS GROUP: Enters Administration, 11,000 Jobs at Risk
DECO 11 - UK: S&P Lowers Rating on Class D Notes to CCC-

INOVYN LTD: S&P Assigns Preliminary B CCR, Outlook Stable
KENSINGTON MORTGAGE 2007-1: S&P Lifts Rating on Cl. B2 Notes to B
POLESTAR UK: Enters Administration Following Pre-Pack Sale
SUNEDISON INC: Ecotricity Acquires UK Rooftop Solar Business


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C Y P R U S
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CYPRUS: Fitch Affirms B+ Long-Term Issuer Default Ratings
---------------------------------------------------------
Fitch Ratings has affirmed Cyprus's Long-term foreign and local
currency Issuer Default Ratings (IDRs) at 'B+'. The Outlooks are
Positive. The issue ratings on Cyprus's senior unsecured foreign
and local currency bonds have also been affirmed at 'B+'. The
Country Ceiling is affirmed at 'BB+' and the Short-term foreign
currency IDR at 'B'.

KEY RATING DRIVERS

Cyprus is undergoing a major financial sector, fiscal, and
economic adjustment following the 2013 banking sector crisis and
the ensuing EU/IMF bail-out program. The country's early exit
from the macroeconomic adjustment program in March 2016 reflects
a track record of fiscal consolidation, progress in financial
sector restructuring and economic recovery.

A number of factors, however, continue to weigh heavily on
Cyprus's credit profile. At close to 109% of GDP in 2015, gross
general government debt (GGGD) is more than twice the 'B' median,
reducing Cyprus's fiscal scope to absorb domestic or external
shocks. With assets at 4x GDP, the banking sector's exceptionally
weak asset quality undermines economic stability and growth. The
country's weak external position implies that further economic
rebalancing may be in prospect over the medium term.

Economic recovery is underway. GDP grew 1.6% in 2015, following
three years of contraction resulting in a cumulative 11% loss of
output until end-2014. Fitch projects GDP growth of around 2% per
year for 2016-17, supported by household consumption benefitting
from a decline in unemployment, and a pickup in tourism and
investment.

Banks remain fundamentally weak and pose an ongoing risk to the
economy and public finances. The ratio of consolidated sector
NPEs (non-performing exposures) to total loans stood at 45% in
December 2015, one of the highest of Fitch-rated sovereigns,
though down from a peak of over 50% in 2014. Unreserved problem
loans, represented by gross NPEs minus system-wide reserves,
stood at EUR16.9bn (97% of GDP) at end-2015, compared with total
bank capital of EUR6.6bn.

Major steps have been taken to restructure the banking sector.
The new regulatory framework put in place since 2015 has enhanced
the restructuring toolkit and contributed to a rise in
restructurings, albeit from a low level. However, some 30% of
restructured loans since January 2014 were in arrears (including
of short duration) by end-2015. Progress is ongoing in bank
supervision, both through the central bank and the EU Single
Resolution Board, in full effect from January 2016.

The economic recovery is also translating into improved sector
capitalization and liquidity. In a sign of increased confidence,
the central bank has reduced its dependence on emergency
liquidity assistance, to EUR3.4bn in February 2016 from over
EUR11bn in 2013. Deposits have been broadly stable since capital
flow restrictions were lifted in April 2015.

Fiscal policy management has been strong, with the government
continuing to over-achieve fiscal targets. Cyprus delivered a
general government deficit of 0.5% of GDP for 2015, after a
deficit of 0.2% in 2014. Fitch projects budget surpluses of 0.2%
and 1% of GDP for 2016 and 2017, respectively, reflecting a
neutral fiscal stance that is supported by the economic recovery.
GGGD peaked at 108.9% of GDP in 2015, and is projected by Fitch
to decline to below 100% by 2017. Debt-management operations and
cash buffers, which at around 5.5% of GDP fully cover 2016
financing needs, reduce refinancing risks.

At 128% of GDP in 2015, Cyprus's net external debt (NXD) is the
third-highest of Fitch-rated sovereigns, reflecting a highly
indebted private sector and the capital-intensive nature of the
shipping industry. The current account position improved in 2015,
albeit still a deficit of 3.6% of GDP in 2015.

Progress has been made with structural reforms, including selling
the Limassol port and Casino. However, a number of bills are
currently awaiting discussion in parliament following the May
elections. The improved economy and exit from the adjustment
program could reduce the urgency for reform.

Negotiations for a reunification deal between Greek and Turkish
Cypriots are underway. The likelihood of success and the terms of
a potential deal remain uncertain. A deal would benefit both
sides in the long term by boosting the Cypriot economy, giving
the Greek side access to Turkey, and the Turkish side greater
access to the rest of the world, but would likely entail short-
term cost and uncertainties.

RATING SENSITIVITIES

Future developments that may, individually or collectively, lead
to an upgrade include:

-- Further signs of a stabilization in the banking sector,
    including a pick-up in loan restructurings

-- Further track record of economic recovery and reduction in
    private sector indebtedness

-- Continued fiscal adjustment leading to a decline in the
    government debt-to-GDP ratio

-- Narrowing of the current account deficit and reduction in
    external indebtedness

-- A sustained track record of market access at affordable rates

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

-- Re-intensification of the banking crisis in Cyprus

-- A reversal of fiscal discipline, resulting in a less
    favorable trajectory in debt-to-GDP

-- A return to recession or deflation with adverse consequences
    for public debt

-- A lack of market access, putting pressure on government and
    banking system liquidity.

KEY ASSUMPTIONS

In its debt sensitivity analysis, Fitch assumes a primary surplus
averaging around 2% of GDP, trend real GDP growth averaging 1.9%,
an average effective interest rate of 3.6% and GDP deflator
inflation of 1.3%. On the basis of these assumptions, the debt-
to-GDP ratio would fall steadily to around 85% by 2025.

Debt-reducing operations such as privatization (EUR1.4 billion by
2018) are not incorporated in Fitch debt dynamics. Our
projections also do not include the impact on GDP growth of
potential gas reserves off the southern shores of Cyprus.

According to ECB rules, which exclude speculative-grade rated
borrowers from the ECB scheme unless a bailout-related waiver is
in place, Cyprus is no longer eligible for QE support. Fitch
assumes that Cyprus will not need QE support to tap markets,
although that could be more challenging in the event of shocks or
less favorable market conditions.

Fitch's base case is for Greece to remain a member of the
eurozone, though it recognizes that a resurfacing of 'Grexit'
fears is a risk. Cyprus is exposed to Greece mainly via
confidence effects, as its financial ties have been reduced
significantly. Banks no longer hold Greek government bonds and
are no longer exposed to the Greek private sector. The
subsidiaries of the big four Greek banks in Cyprus have also been
ring-fenced.



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C Z E C H   R E P U B L I C
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NEW WORLD: OKD Unit May Commence Insolvency Proceedings This Week
-----------------------------------------------------------------
Ladka Bauerova at Bloomberg News reports that New World Resources
Plc, the only remaining Czech producer of coking coal, says its
main unit OKD may start insolvency proceedings as early as the
end of the week if no agreement is reached on the company's debt
restructuring with the government.

It's unclear whether an agreement can be reached by that date as
government representatives haven't responded to NWR owners'
requests for further talks, the miner, as cited by Bloomberg,
said in an e-mailed statement.  It said an insolvency would lead
to the end of its mining operations, Bloomberg notes.

"Given the current status of these discussions it is unclear
whether agreement on a restructuring plan can be reached before
OKD has exhausted all available sources of financing and thus,
whether OKD may be obliged to commence insolvency proceedings,"
Bloomberg quotes the company as saying.

NWR faces default less than two years after restructuring debt
and receiving cash from investors, Bloomberg discloses.

New World Resources Plc is the largest Czech producer of coking
coal.



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F R A N C E
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LAFARGE SA: Egan-Jones Withdraws BB Sr. Unsecured Debt Rating
-------------------------------------------------------------
Egan-Jones Ratings Company withdrew the BB senior unsecured
ratings on Lafarge SA on April 14, 2016.

Lafarge is a French industrial company specialising in three
major products: cement, construction aggregates, and concrete.
The company has become a world leader in building materials.


VINCI SA: Egan-Jones Cuts Sr. Unsecured Rating to BB From BB-
-------------------------------------------------------------
Egan-Jones Ratings Company lowered the senior unsecured ratings
on debt issued by Vinci SA to BB from BB- on April 13, 2016.

Vinci, corporately styled VINCI, is a French concessions and
construction company founded in 1899 as Societe Generale
d'Enterprises. It employs over 179,000 people and is the largest
construction company in the world by revenue.



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


SENVION TOPCO: Moody's Affirms B1 Corporate Family Rating
---------------------------------------------------------
Moody's Investors Service affirmed the B1 corporate family rating
(CFR) and the B1-PD probability of default rating (PDR) of
Senvion TopCo GmbH, the holding company of the Senvion group at
the top of the restricted group, as well the B2 rating of the
EUR400 million senior secured notes issued by Senvion Holding
GmbH and guaranteed, among others, by Senvion TopCo GmbH.
Concurrently Moody's has changed the outlook the ratings to
positive from stable.

RATINGS RATIONALE

"The rating action primarily reflects Senvion's strong
operational performance especially during the last two quarters,
exceeding our original expectations", says Martin Fujerik,
Moody's lead analyst for Senvion. Revenues and EBITDA, as
adjusted by Senvion, for the 12 months to December 2015 period
increased by 11% and 46% , respectively, compared to the period
of 12 months to March 2015. In addition to that Senvion has
managed to release a substantial amounts of working capital,
primarily owing to successful implementation of efficiency
measures, but also enabled by healthy order intake that often
ties sizable advance payments. As a consequence, Senvion reported
a net cash position as of end-December 2015.

The rating agency calculates that Senvion achieved Moody's
adjusted debt/EBITDA of around 2.9x and Moody's adjusted EBITA
margin of around 6% for the 12 months to December 2015 period,
which are levels that could be commensurate even with a higher
rating. However, Moody's notes that sustainability of such strong
performance and credit metrics still needs to be established.

Even though Senvion's backlog (around EUR3.4 billion as of
December 2015, excluding service backlog) provides good revenue
and credit metrics visibility for 2016, there is a risk of a
slowdown in order intake in Senvion's key markets of Germany and
the UK in the next 12-18 months driven by regulatory changes.
Senvion is trying to address that risk by entering new markets
with growth potential, such as India. Even though this track
record still needs to be established, Moody's recognizes that in
the last couple of years Senvion has managed to enter and build
good presence in new markets, such as Canada or Australia.

In addition to that, a track record of conservative financial
policies aimed at deleveraging after the sale of the group to the
private equity owner in April 2015 is still fairly short.
Dividend policy, even post the IPO in April 2016 when a 29% stake
became free float, remains largely undefined, stating preference
for using available cash to support operations and growth of the
business. However, divided pay-outs are not excluded and possible
up to the level of 50% of net income. It also still remains to be
seen what is the normalized level of working capital going
forward. An ability to maintain good free cash flow generation
even in a situation of declining order intake is one of the key
considerations for further upgrades.

WHAT COULD CHANGE THE RATING UP/DOWN

Upward pressure on the rating could arise if Senvion were to
demonstrate its ability to (1) sustain its Moody's adjusted EBITA
margin above 5%; (2) further build on its track record of
meaningful positive free cash flow generation; (3) maintain its
Moody's-adjusted debt/EBITDA below 3.0x; and (4) further
diversify the group in terms of end markets.

Moody's could downgrade Senvion if its (1) Moody's EBITA margin
were to fall sustainably well below 5%, indicating that it is
unable to withstand competitive pressure in the market; (2) free
cash flow turned negative for a pro-longed period; (3) Moody's-
adjusted debt/EBITDA deteriorated sustainably above 4.0x; or (4)
liquidity profile deteriorated.

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Global
Manufacturing Companies published in July 2014.

Senvion TopCo GmbH is a holding company of the Senvion group at
the top of the restricted group. Headquartered in Hamburg,
Germany, Senvion is one of the leading manufacturers of wind
turbine generators (WTGs). The group develops, manufactures,
assembles and installs WTGs with rated outputs ranging from 2 MW
to 6.2 MW, covering all wind classes in both onshore and offshore
markets. The group does not engage in project development or wind
farm ownership. Senvion employs a workforce of more than 3,700
worldwide and generated revenues of more than EUR2.1 billion in
the 12-month period to December 2015, with cumulative installed
capacity worldwide of approximately 13.7 GW. In April 2016, a
private equity firm Centerbridge Partners sold around 29% stake
in Senvion S.A., the publicly quoted entity holding 100% of share
capital at Senvion TopCo GmbH, to private investors in an IPO.



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I R E L A N D
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LION I RE: Fitch Affirms B+sf Rating on EUR190MM Notes
------------------------------------------------------
Fitch Ratings affirms the 'B+sf' rating to the Principal At-Risk
Variable Rate Notes issued by Lion I Re Limited, a special
purpose reinsurance vehicle in Ireland as follows:

-- EUR190,000,000 Principal At-Risk Variable Rate Notes;
    scheduled maturity April 28, 2017.

The Rating Outlook is Stable.

This affirmation is based on Fitch's annual surveillance review
of the notes that includes a scheduled evaluation of the natural
catastrophe risk, counterparty exposure, collateral assets and
structural performance

KEY RATING DRIVERS

The notes are exposed to European windstorm losses as reported by
the ceding insurer, Assicurazioni Generali S.p.A. (Generali).
There were no reported Covered Events that exceeded the Trigger
Amount of EUR400 million in the second Risk Period of the
transaction from Jan. 1, 2015 through Dec. 31, 2015.

On Dec. 15, 2015, Risk Management Solutions, Inc. (RMS), acting
as the Reset Agent, completed the Reset Report that indicated an
attachment probability as 2.25% for the third Risk Period
(Jan. 1, 2016 through April 14, 2017). This corresponds to an
implied rating of 'B+' per the calibration table listed in
Fitch's 'Insurance-Linked Securities Methodology'. The updated
attachment probability includes updated property exposures within
the Subject Business in the Covered Area that have been run
through an escrowed RMS model. This is a slight decrease from the
prior attachment probability of 2.32%.

The Trigger Amount and Exhaustion Amount remain unchanged at
EUR400 million and EUR800 million, respectively.

Per a specified formula in the Indenture (the Risk Spread
Calculation), the Updated Risk Interest Spread was reset to 2.31%
which is a small reduction from the prior period of 2.36%. This
reflects a decrease in the Updated Modeled Expected Loss to 1.05%
from 1.09% but is higher than the Initial Modeled Expected Loss
of 1.00%.

Fitch upgraded Generali's Issuer Default Rating (IDR) to 'A-'
with a Stable Outlook on Sept. 15, 2015. Previously, Generali had
an IDR of 'BBB+', Stable Outlook. This upgrade did not affect the
rating of the Lion I Re Note as Fitch rates to the weakest link
which is currently the implied rating of the catastrophe event.

The Fitch IDR of the collateral assets, notes issued by the
European Bank for Reconstruction and Development (EBRD), remain
at 'AAA', Stable Outlook.

Fitch believes the notes and indirect counterparties are
performing as required. There have been no reported early
redemption notices or events of default and all agents remain in
place.

Additional information regarding the notes can be found in prior
rating action commentaries on April 25, 2014 and April 22, 2015.

RATING SENSITIVITIES

This rating is sensitive to the occurrence of a covered event,
Generali's election to reset the notes' attachment levels,
changes in the data quality, the counterparty rating of Generali
and the rating on the assets held in the collateral account.

If qualifying covered event occurs that causes a per occurrence
loss to exceed the attachment level, Fitch will downgrade the
notes reflecting an effective loss of principal and issue a
Recovery Rating.

To a lesser extent, the notes may be downgraded if the EBRD notes
or Generali are sufficiently downgraded to a level commensurate
with the implied rating of the natural catastrophe risk.

The catastrophe risk element is highly model-driven and actual
losses may differ from the results of the simulation analysis.
The escrow models may not reflect future methodology enhancements
by RMS which may have an adverse or beneficial effect on the
implied rating of the notes were such future methodology
considered.

DUE DILIGENCE USAGE

No third party due diligence was provided or reviewed in relation
to this rating action.



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M A L T A
=========


DANIELS SHOPPING: Judge Orders Liquidation Following Insolvency
---------------------------------------------------------------
Jacob Borg at Times of Malta reports that a judge has ordered the
winding up of Daniels shopping complex in Hamrun after declaring
it insolvent.

Legal action was taken against the owners of the complex in 2014
by one of its creditors, Panta Contracting Ltd., over an
outstanding debt of EUR1.5 million, Times of Malta relates.

According to Times of Malta, the court heard that, apart from the
debt with Panta Contracting, the company responsible for the
shopping complex, D.A. Holdings, had several other creditors, who
were owed over EUR12 million plus interest.

Panta Contracting argued that D.A. Holdings was in a state of
insolvency and only appeared solvent on paper due to a EUR20
million revaluation of its properties in 2012, the last time the
company filed its accounts, Times of Malta relays.

Manuel Castagna, a partner at the company's auditors, Nexia BT,
told the court the company did not have enough money to pay its
creditors on time, Times of Malta discloses.  He said the only
way creditors could be paid was through the sale of the company's
properties or a fresh capital injection, Times of Malta notes.

The company went in the red while operating the debt-ridden More
Supermarkets chain as it was unable to keep up with its debts,
Times of Malta recounts.

Mr. Justice Joseph Zammit McKeon ordered the dissolution of the
company, Times of Malta discloses.

Dr Galea Debono was appointed as the company's liquidator, Times
of Malta relates.  A verification of the company's assets will
take place and a report will be presented on June 16, Times of
Malta says.



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


BANCO BPI: S&P Revises BB- Rating CreditWatch to Developing
-----------------------------------------------------------
Standard & Poor's Ratings Services said that it affirmed its
'BBB/A-2' long- and short-term counterparty credit ratings on
Spain-based Caixabank S.A.  The outlook remains stable.

In a related action, S&P revised the CreditWatch status of the
'BB-' long-term ratings on Portugal-based Banco BPI S.A. (BPI),
and its core subsidiary Banco Portugues de Investimento S.A., to
developing from negative.  S&P affirmed its 'B' short-term rating
on both BPI and Banco Portugues de Investimento.

The rating actions follow the announcement by Caixabank on
April 18 of its new attempt to launch a tender offer to acquire
the 55.9% stake in Portugal-based BPI that it still does not own.
Caixabank expects to be able to register the offer in September
and to close the transaction, if successful, in the third
quarter.

The affirmation of Caixabank reflects S&P's belief that it is
committed to largely offset the impact of the acquisition on its
capital base.  In particular, it aims to restore its fully loaded
common equity Tier I (CET1) ratio to above 11% post-transaction.
S&P also believes that the bank would be able to complete any
capital-raising initiatives needed to achieve that goal.

According to S&P's estimates, achieving a fully loaded CET1 ratio
above 11% at the Caixabank level would mean that the group's end-
2015 consolidated risk-adjusted capital (RAC) ratio would hover
at around 5% on a pro forma basis -- only slightly below S&P's
current projection.  S&P estimates that the impact of the full
acquisition could detract about 40 basis points from S&P's RAC
measure. Furthermore, S&P expects the group to continue to
strengthen its capital base, both organically and through the
issuance of hybrid instruments, which are currently nonexistent
in its capital structure.  S&P therefore expects Caixabank's RAC
ratio would stand more comfortably in the moderate category (5%-
7%) over the two-year outlook horizon.  An improvement in S&P's
assessment of economic risks in Spain could also boost the
group's capital ratios by around 50 basis points, according to
S&P's estimates.

S&P does not see the acquisition as transformational for
Caixabank. BPI would add just 11.5% to the group's asset base.
S&P also sees the benefits of wider geographic diversification as
limited, not only because of BPI's limited size in the group
context, but also because of the strong interconnectedness
between the Portuguese and Spanish economies and Portugal's
comparatively risky economic environment, despite its ongoing
recovery.  BPI's relatively sound credit quality and funding
profile provides us comfort, though.

If the tender offer completes, it would be the first time that
Caixabank operated a retail banking network abroad.
Nevertheless, S&P do not expect the integration of BPI and the
implementation of its restructuring plan, which are intended to
turn around profitability, to represent a significant managerial
challenge for Caixabank.  This is because Caixabank has, in
recent years, gained significant expertise in integrating other
Spanish entities into the group, and has prior knowledge of BPI
as it has been part of its shareholder structure for many years.
Caixabank will, however, remain challenged to correct the
regulatory breach related to excessive risk concentration in
Angola and ensure potential disagreements among shareholders do
not constrain the management team's ability to execute its
strategy.

As was the case in early 2015, completion of the deal would be
contingent on BPI's shareholders removing the existing
limitations on voting rights and Caixabank increasing its
ownership in the bank to above 50%, as well as receipt of all
required regulatory approvals.  The recently approved legislative
change in Portugal regarding limitations on voting rights in the
financial sector may facilitate the process of removing existing
voting rights caps at BPI, thus making it more likely that
Caixabank would achieve control of the bank this time.  However,
this is still uncertain as, after more than a year of
negotiations, in S&P's view, the positions of BPI's two largest
shareholders are still not aligned.

The revision of the CreditWatch status on BPI to developing from
negative reflects the possibility of Caixabank taking control of
the bank, and thus the potential for the long-term ratings on BPI
benefiting from parent support.  S&P sees the potential rating
uplift as being limited to two notches, as S&P is unlikely to
consider BPI a core subsidiary of Caixabank immediately after
completion of the transaction.  The ratings on BPI would thus be
constrained at the level of the long-term sovereign credit rating
on Portugal.  Moreover, the removal of the existing voting rights
cap -- one of the prerequisites of the tender offer -- could
improve BPI's corporate governance, easing constraints on
management's ability to effectively run the bank and execute its
plans.  As a result, S&P would expect the negative pressure on
the bank's stand-alone credit profile (SACP) to ease.

However, S&P believes that the long-term rating on BPI is still
subject to downward pressure.  S&P would likely lower the ratings
on BPI if the Caixabank takeover fails, core shareholders remain
highly divided, the bank remains in a regulatory breach, or BPI
does not make progress in overcoming the current impasse.  As of
now, the European Central Bank (ECB) has not imposed any
financial penalties on BPI for breaching single-name
concentration rules related to the Angolan exposure.  However,
S&P will also monitor if potential regulatory fines have a
material negative impact on our current financial expectations
for BPI.

The affirmation of the short-term rating reflects that, at
present, S&P considers the maximum upside potential for the long-
term counterparty credit ratings to be up to two notches.  At the
same time, S&P's current downside scenario is limited to one
notch and is therefore unlikely to lead to a lower short-term
rating.

                              OUTLOOK

The stable outlook on Caixabank is based on S&P's expectation
that, if the tender offer goes ahead, the management team would
manage to largely offset the impact of the acquisition on its
capital, and that the group's capital base would continue to
strengthen going forward.  The stable outlook also assumes that
the execution of the deal would not encounter unexpected material
problems and would thus be implemented as planned.

Aside from the potential acquisition of BPI, S&P's stable outlook
on Caixabank factors in S&P's expectation of a more favorable
economic environment in Spain, which would help the bank to
gradually strengthen its profitability and capitalization, and to
reduce its stock of problematic assets.  S&P also expects that
the bank would maintain a balanced funding profile and
comfortable liquidity.

S&P sees the potential for an upgrade as unlikely at this point.
For that to happen, the bank would have to meaningfully
strengthen its capital, so that its RAC ratio stands sustainably
above 7%, or build up a cushion of loss-absorbing instruments
that would equal at least 4.5% of Standard & Poor's risk-weighted
assets. Conversely, the ratings could come under pressure if,
contrary to S&P's base-case expectation, the bank fails to
restore its capital position post-acquisition, or S&P anticipates
a further strengthening as less likely, or if the proposed
transaction faces meaningful setbacks, impairing the bank's
financial or business profile.

                           CREDITWATCH

The CreditWatch developing status of BPI reflects the possibility
that S&P could raise, affirm, or lower the long-term ratings on
BPI depending on the outcome of Caixabank's tender offer and
related developments, and S&P's assessment of their likely impact
on the bank's business and financial profile.

S&P could raise its long-term rating on BPI by up to two notches
if the acquisition by Caixabank goes ahead, depending on S&P's
assessment of strategic importance to its parent.  In this case,
the ratings on BPI could benefit from rating uplift, reflecting
S&P's view of the likelihood of BPI receiving financial support
from its parent if needed.  Moreover, with Caixabank becoming its
controlling shareholder, S&P would expect the current downward
pressure on BPI's creditworthiness to ease, and its SACP to
likely stabilize.

On the contrary, S&P could lower the long-term rating on BPI if
Caixabank's tender offer fails, the shareholders remain divided,
management's steering capacity is limited, or the bank does not
present a feasible plan to resolve the excessive single-name
concentration in Angola (or if the measures it considers taking
to comply with the ECB requirement weaken its creditworthiness).

Finally, S&P could affirm the ratings if Caixabank's tender offer
does not go through, but BPI manages to find an effective
solution to meet the regulator's demands without endangering its
financial and business profile, while a cohesive shareholder base
removes the current strategic impasse.



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R O M A N I A
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COMPLEXUL ENERGETIC: To Undergo Restructuring, Close Mines
----------------------------------------------------------
Romania Insider reports that Complexul Energetic Hunedoara will
enter a massive restructuring process that will include closing
two of the company's four operating coal mines.

The company will also keep only two of its power generating
units, with a total capacity of 400 MW out of a total 1,225 MW,
Romania Insider relays, citinglocal Hotnews.ro.  This will also
lead to significant layoffs, Romania Insider notes.

The company, which has over 6,000 employees, went into
insolvency, in January this year, as it couldn't pay its debts,
totaling EUR335 million, Romania Insider recounts.  The state is
the company's main creditor, Romania Insider discloses.

According to Romania Insider, Victor Grigorescu, Romania's energy
minister, said the restructuring process is the only way to save
this company, which has a strategic role in Romania's energy
system.

Complexul Energetic Hunedoara is a state-owned thermal
electricity producer.



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


KHAKASSIA REPUBLIC: Fitch Cuts LT Issuer Default Ratings to BB-
---------------------------------------------------------------
Fitch Ratings has downgraded the Russian Republic of Khakassia's
Long-term foreign and local currency Issuer Default Ratings
(IDRs) to 'BB-' from 'BB' and its National Long-term rating to
'A+(rus)' from 'AA-(rus)', while affirming its Short-term foreign
currency IDR at 'B'. The Outlooks on the Long-term ratings are
Stable.

Khakassia's outstanding senior unsecured domestic bonds have also
been downgraded to 'BB-' from 'BB' and to 'A+(rus)' from 'AA-
(rus)'.

The downgrade follows a sharp increase in Khakassia's direct
risk, driven by persistently large budget deficits during 2013-
2015, while the republic's self-funding capacity remains weak.

KEY RATING DRIVERS

The downgrade reflects the following rating drivers and their
relative weights:

High

In 2015, the republic's direct risk grew 55% to reach RUB16.5bn.
As a share of current revenue direct risk was 84.4%, above 2014's
61.5% and our expectations of 70%-75% and no longer commensurate
with a 'BB' rating. In 2015 the republic's administration
struggled to contain deficit due to increased capital
expenditure. As a result the deficit widened to 21% of total
revenue from 13% in 2014, resulting in steep debt growth.

Fitch forecasts deficit before debt variation will narrow to 8%-
10% in 2016-2018 as the region will likely scale back its capex
to about 15% (2015: 30%) and also because more than half of the
capex will be funded by earmarked transfers from the federal
budget. We forecast the on-going deficit is likely to lead to
moderate debt growth, taking direct risk to 100% of current
revenue by end-2018.

The republic's direct risk as of 1 April 2016 comprised 42.5%
bank loans, 39.8% bond issues and 17.7% budget loans. As in many
Russian LRGs, Khakassia's maturity profile is short-term with 81%
direct risk maturing in 2016-2018. Fitch expects the republic's
refinancing needs will largely be funded by market debt (bond
placements and bank loans). This exposes the region to market
interest rate volatility and could negatively impact its current
balance over the medium term.

Medium

Fitch expects the republic's operating margin to consolidate at
5%-6% over the medium term, which will be insufficient to cover
interest expenses, due to growing direct risk and increased
funding costs. Khakassia's operating margin improved to 6.4% in
2015, from -0.6% in 2014, supported by higher proceeds from
corporate income tax (up 31.5% yoy), excise duties (up 15.5% yoy)
and property tax (up 9.2% yoy). However, the higher revenue was
offset by faster growth of capex, which rose to 30.5% of total
expenditure in 2015 from an already high 23.4% in 2014. The high
capex was driven by increased investments in social
infrastructure and housing construction for victims of large
fires that occurred in spring 2015.

Khakassia's wealth metrics are in line with the national median.
However the republic's economy is concentrated in the hydro-power
generation, mining and non-ferrous metallurgy sectors. The top 10
taxpayers contributed 49.5% to the republic's tax revenue in 2015
(2014: 44.5%). Taxes accounted for 71% of operating revenue in
2015, which makes the region's budget prone to volatility. Fitch
forecasts Russia's national economy to contract 1.5% in 2016 and
believes the region will also face sluggish economic activity,
which could negatively affect Khakassia's tax base.

Khakassia's ratings also reflect the following key rating
drivers:

Russia's institutional framework for subnationals is a
constraining factor on the republic's ratings. Frequent changes
in the allocation of revenue sources and the assignment of
expenditure responsibilities between the tiers of government
limit Khakassia's forecasting ability and negatively affect its
debt and investment management.

RATING SENSITIVITIES

An upgrade may result from direct risk decreasing below 60% of
current revenue, coupled with a positive current balance on a
sustained basis.

A downgrade may result from the republic's inability to curb
direct risk growth towards 100% of current revenue, accompanied
by growing refinancing pressure.


KEMEROVO REGION: Fitch Affirms BB- LT Issuer Default Ratings
------------------------------------------------------------
Fitch Ratings has affirmed the Russian Kemerovo Region's Long-
term foreign and local currency Issuer Default Ratings (IDRs) at
'BB-' and its Short-term foreign currency IDR at 'B'. The agency
has also affirmed the region's National Long-term rating at
'A+(rus)'. The Outlooks on the Long-term ratings are Stable.

Fitch has also affirmed the region's senior unsecured debt at
Long-term local currency 'BB-' and at National Long-term
'A+(rus)'.

The affirmation reflects the recovery of Kemerovo's budgetary
performance in 2015 but also the structural weaknesses in terms
of tax concentration and volatile revenue.

KEY RATING DRIVERS

The 'BB-' ratings reflect Kemerovo's volatile budgetary
performance and high deficit before debt in the previous four
years that led to rapid debt increase, albeit from a low base.
The ratings also reflect the region's concentrated economy with a
developed tax base that is exposed to economic cycles, a weak
institutional framework and our expectation of a stagnant local
economy as a result of a recessionary environment in Russia.

Fitch expects the region's operating margin to consolidate at 5%-
6% during 2016-2018, which is close to 2015's 5.7%. This will be
sufficient to cover interest expenses, such that the current
margin will remain in small positive territory (2015: 3%).
Budgetary performance will be underpinned by strict control on
operating expenditure and improved tax proceeds following the
earnings recovery at mining and metallurgical companies, which
are the region's largest taxpayers. The recovery was driven by
the stabilization of prices of key commodities and the
depreciation of the rouble.

A stronger operating balance and a narrowing of the capital
account deficit led to the budget deficit shrinking by almost
twofold to 5.7% of total revenue in 2015. Fitch expects
Kemerovo's deficit before debt to narrow to 3.7% in 2016, due to
continuing control on operating expenditure and cuts in capex.
This will limit growth of direct risk, which we expect to
stabilize at below 65% of current revenue in 2016-2018. The wide
deficit before debt during 2012-2015 had resulted in a rapid rise
in direct risk to RUB58 bil. (61.2% of current revenue) at end-
2015, from a low RUB19 bil. (21%) in 2011.

Immediate refinancing risk is moderate. As at 1 April 2016 the
region's debt comprised RUB29.6 bil. subsidized loans from the
federal budget (47% of direct risk), which are likely to be
rolled over by the federal government. Another RUB23.7 bil. (38%)
is bank loans with maturities between 2017 and 2019, with
moderate concentration in 2018. The remaining direct risk is
represented by RUB1 bil. of domestic bonds (2%) and a RUB8.3 bil.
long-term bank loan from Vnesheconombank (VEB: BBB-/Negative/F3).

Initially in US dollars, the VEB loan was re-denominated in
roubles at a favorable exchange rate of RUB/USD 33.62 in 2015
(current official exchange rate is RUB/USD 66.22), eliminating
foreign-currency risk. The loan also bears low annual interest
rates (1%) and has a long maturity till 1 January 2035, which
mitigates pressure on the region's debt servicing needs.

The region has a concentrated economy weighted towards coal
mining and ferrous metallurgy. This provides an extensive tax
base for the region's budget at 80% of operating revenue.
However, this also means a large portion of the region's tax
revenues depends on companies' profits, resulting in high revenue
volatility through the economic cycle.

Kemerovo saw marginal real GRP growth in 2015, outperforming the
3.7% contraction of national GDP. Fitch expects the local economy
to stagnate in the medium term.

Russia's institutional framework for subnationals is a
constraining factor on the region's ratings. Frequent changes in
the allocation of revenue sources and the assignment of
expenditure responsibilities between the tiers of government
limit Kemerovo's forecasting ability and negatively affect the
region's fiscal capacity and financial flexibility.

RATING SENSITIVITIES

An improvement in the operating balance to 6%-8% of operating
revenue and maintaining a debt payback ratio (direct risk-to-
current balance) at below 10 years (2015: 20.7 years) on a
sustained base could lead to an upgrade.

An inability to maintain a positive operating balance on a
sustained basis along with an increase in direct risk above 90%
of current revenue could lead to a downgrade.


MARI EL REPUBLIC: Fitch Affirms BB LT Issuer Default Ratings
------------------------------------------------------------
Fitch Ratings has affirmed the Russian Mari El Republic's
Long-term foreign and local currency Issuer Default Ratings
(IDRs) at 'BB', with Stable Outlooks, and Short-term foreign
currency IDR at 'B'.

The agency has also affirmed the republic's National Long-term
rating at 'AA-(rus)' with Stable Outlook. Mari El's outstanding
senior debt ratings have been affirmed at 'BB' and 'AA-(rus)'.

The affirmation reflects Fitch's largely unchanged base case
scenario regarding the republic's stable fiscal performance and
moderately increasing direct risk, which are commensurate with
its ratings.

KEY RATING DRIVERS

The 'BB' ratings reflect the republic's moderate direct risk with
increased exposure to refinancing risk, a modest economic profile
amid a deteriorating macro-economic environment in Russia as well
as satisfactory fiscal performance.

Fitch expects Mari El to record stable fiscal performance in
2016-2018, with an operating balance at about 8%-10% of operating
revenue (2015: 11.2%). This will be driven by prudent management
aimed at cost control and an expected steady increase in
operating revenue of 5% per year over the medium term. Revenue
will be driven by modest growth of tax revenue from processing
industries, in line with expected economic growth and stable
transfers from the federal government.

The republic recorded deficit before debt variation at 10% of
total revenue at end-2015, in line with the previous year's
figure. The deficit was driven by financing needs for capex,
which represented 20% of total spending, in line with the
republic's five-year average.  "We project the region will
slightly narrow its deficit before debt to about 8% of total
revenue by end-2018, driven by lower capex averaging 16% of total
spending over the medium term."

Fitch projects continued growth of Mari El's direct risk to RUB20
bil. by end-2018, or about 80% of current revenue (2015: 60%).
Direct risk in 2015 increased slightly above our last year's
expectation to RUB13 bil., from RUB10.7 bil. a year earlier. The
increase is primarily driven by RUB2.5 bil. new low-cost budget
loans from the federal government to fund the region's budget
deficit and partly replace maturing bank loans and bonds. By
refinancing with budget loans, the republic has been able to
avoid increased costs of borrowing arising from interest rate
volatility.

"We do not expect Mari El's direct debt (bank loans and bonds) to
exceed 60% of current revenue over the medium term. However, the
region's recently intensified use of short-term bank loans, away
from funding with medium-term loans (in 2012-2014), has
significantly increased refinancing risk, with 67% of outstanding
debt maturing in 2016. In Fitch's view continued reliance on
primarily short-term bank loans will weaken debt metrics,
potentially leading to negative rating action."

Russia's institutional framework for subnationals is a
constraining factor on the republic's ratings. Frequent changes
in both the allocation of revenue sources and the assignment of
expenditure responsibilities between the tiers of government
limit Mari El's forecasting ability and negatively affect the
republic's strategic planning, and debt and investment
management.

Mari El's socio-economic profile is historically weaker than the
average Russian region. Its per capita gross regional product
(GRP) was 30% lower than the national median in 2012-2015 but
performed better than the national economy in 2015. Mari El's GRP
increased 3.8% yoy in 2015, according to the region's preliminary
estimates, in contrast to Russia's 3.7% decline in GDP. The
republic projects 2.5%-3.5% economic growth over the medium term.

RATING SENSITIVITIES

The ratings could be positively affected by improved budgetary
performance leading to deficit before debt decreasing below 5% of
total revenue, coupled with an extension of the debt maturity
profile.

Conversely, a downgrade or revision of the Outlook to Negative
could result from sustained deterioration of operating
performance, with an operating margin below 5%, along with
increased direct debt to above 60% of current revenue over the
medium term.


SOLLERS-FINANCE: Fitch Assigns B+ LT Issuer Default Ratings
-----------------------------------------------------------
Fitch Ratings has assigned Russia-based Sollers-Finance's (SF)
Long-Term Issuer Default Ratings (IDRs) of 'B+' with a Stable
Outlook.

KEY RATING DRIVERS

The Long-term IDR of 'B+' reflects the risks of the currently
difficult economic environment, SF's narrow domestic franchise,
limited track record, the somewhat lower liquidity of the
company's leasing property (represented mainly by trucks)
compared with peers and tight liquidity cushion.

The ratings also factor in SF's currently low leverage --
although this could increase if market growth returns -- well-
controlled residual value risk, adequate asset quality metrics
and healthy performance to date. They further take into account a
granular lease book generating stable and predictable cash flows
significantly exceeding expected debt maturities.

The Stable Outlook reflects SF's significant margin of safety in
terms of both capital and liquidity (based on positive
asset/liability mismatches), allowing it to sustain considerable
deterioration of asset quality and performance before its ratings
could be downgraded. SF is also likely to benefit (more than its
main peers) from expected government support of the leasing
industry in 2016, as this will presumably target only commercial
vehicles rather than passenger cars.

SF is a young Russian leasing company, founded in 2008 by Russian
auto manufacturer Sollers, mainly to support its sales of trucks
and light commercial vehicles. In 2010, Sollers sold a 50% share
to Russian Sovcombank (B+/Stable/b+). At end-2015, SF was
significantly smaller than its main Fitch-rated peers (Europlan,
Carcade and Baltic Leasing) and operates via only 10 branches.
The agency views SF's ability to scale up its business as
somewhat limited.

Financial leverage (as expressed by the net debt-to-tangible
equity ratio) was a comfortable 0.8x at end-2015 (1.1x post
expected dividends payment), which is significantly lower than
1.5x at end-2014 and 1.9x at end-2013 due to a contraction of the
lease portfolio, proceeds from which were used to redeem almost
all third-party loans. According to management, a SF will
tolerate leverage of up to 5x. We therefore expect leverage to
increase as soon as the Russian economy recovers.

In 2015, SF's reported profit was solid (ROAE of 24%) driven
mainly by wide margins despite increased funding costs (13.3% in
2015, a 250bps increase from 2014). The hike in funding cost was
offset by an increase in effective finance lease rate (defined as
finance lease income divided by average net investment in lease)
of 420bps, underpinned partially by the state subsidy of lessees'
advance payments during 2015.

Fitch considers SF's liquidity position as adequate given that
the debt repayment schedule is notably longer than asset
amortization. However, SF has maintained a negligible liquidity
cushion, using all proceeds from leases to redeem outstanding
borrowings. To meet immediate liquidity needs SF uses a
permanently available revolving credit line from its shareholder,
Sovcombank, which also acts as treasury for the company.
Refinancing risk is limited given that the bulk of SF's funding
at end-2015 was from Sovcombank.

RATING SENSITIVITIES

Fitch does not expect negative rating action given SF's moderate
leverage and reasonable performance to date, which is reflected
in the Stable Outlook. However, a sharp increase of SF's
leverage, or a considerable deterioration of asset quality and
performance could result in a downgrade of the ratings.

Upgrade potential for SF's ratings is currently limited unless
the company significantly develops its franchise, diversifies
underlying assets by type and reduces dependence on Sovcombank
for liquidity support.

The rating actions are as follows:

  Long-term foreign and local currency IDRs: assigned at 'B+',
  Stable Outlook

  Short-term foreign currency IDR: assigned at 'B'

  National Long-Term rating: assigned at 'A(rus)', Stable Outlook


UDMURTIA REPUBLIC: Fitch Affirms BB- LT Issuer Default Ratings
--------------------------------------------------------------
Fitch Ratings has affirmed Russian Republic of Udmurtia's Long-
term foreign and local currency Issuer Default Ratings (IDRs) at
'BB-', Short-term foreign currency IDR at 'B' and National Long-
term rating at 'A+(rus)'. The Outlooks on the Long-term IDRs and
the National Long-term rating are Negative.

The republic's outstanding senior unsecured domestic bonds have
been affirmed at 'BB-' and 'A+(rus)'.

The affirmation and Negative Outlook reflect Fitch's unchanged
baseline scenario regarding the region's growing direct risk and
risk to restoring its current balance to positive territory over
the medium-term.

KEY RATING DRIVERS

The ratings reflect Udmurtia's weak operating performance and
high level of direct risk. The ratings also take into account a
diversified local economy, which has been decelerating since
2014, in line with the national economic downturn, and a weak
institutional framework for Russian sub-nationals.

Fitch expects Udmurtia's operating margin will remain weak, but
still positive at 1%-2% in 2016-2018, reflecting a sluggish
regional economy and rigid operating spending after the 2015
expenditure reduction. In 2015 the republic achieved a positive
operating margin of 2.6% (vs. an average negative 3.4% in 2012-
2014) as the administration optimized goods and services
procurement, contained operating expenditure and received higher
tax proceeds from the military industry following increased
defense spending by the federal government.

Fitch expects the republic will shrink its budget deficit to 9%-
10% of total revenue over the medium-term, from an average of
14.6% in 2012-2015, by restraining both capex and operating
expenditure. However, a substantial decrease in capex is unlikely
after having reached a low 11.2% of total expenditure in 2015
(vs. an average 15% in 2012-2014).

The budget deficit will continue to lead to increases in direct
risk, which we forecast will approach 100% of current revenue by
end-2018. In 2015 direct risk increased mildly to 79.4% of
current revenue, from 75.4% in 2014, as Udmurtia used accumulated
cash to finance part of its deficit. Despite growing debt,
interest expenditure is expected to stabilize at 5%-6% of
operating revenue due to an increased share of low-cost federal
loans in the debt structure. Nevertheless, we forecast current
margin will remain weak at a negative 3%-4% over the medium-term,
compared with a negative 2.9% in 2015.

Udmurtia is exposed to refinancing pressure as 76% of direct risk
matures in 2016-2018. In 2016 the republic faces RUB10.1 bil. of
repayments (22% of direct risk as of April 1, 2016). During 1Q16
the republic received RUB5.9 bil. of three-year federal budget
loans at near-zero interest to replace part of its commercial
debt, which helped ease refinancing pressure. The region's
remaining 2016 maturities are expected to be covered by a
combination of bond issuance, bank credit facilities and federal
budget loans.

The republic has a diversified industrial economy with a focus on
the oil extraction, metallurgy, machine-building and military
sectors. This helps to smooth business cycles and keeps
Udmurtia's wealth metrics in line with the national median. In
2015 the republic's GRP contracted 2.4%, slower than the national
average decline of 3.7%. Fitch expects national GDP to shrink
1.5% in 2016, which could negatively impact the region's tax
base.

Russia's institutional framework for subnationals is a
constraining factor on the republic's ratings. Frequent changes
in the allocation of revenue sources and the assignment of
expenditure responsibilities between the tiers of government
limit Udmurtia's forecasting ability and negatively affect its
debt and investment management.

RATING SENSITIVITIES

An inability to restore the current balance to positive territory
and to ease high refinancing pressure, with direct risk edging
towards 100% of current revenue, could lead to a downgrade.


UNITED CONFECTIONERS: Fitch Affirms B LT Issuer Default Rating
--------------------------------------------------------------
Fitch Ratings has revised Russia-based OJSC Holding Company
United Confectioners' (UC) Outlook to Stable from Negative while
affirming the Long-term Issuer Default Rating (IDR) at 'B'.

The revision of the Outlook to Stable reflects our expectation
that UC's net outflows to related parties and dividends will be
moderate over 2016-2019, following a material reduction in 2015.
This should enable the company to keep fund from operations (FFO)
adjusted gross leverage at 2.5x-3.0x and support adequate access
to bank financing.

"While we expect UC's business profile and credit metrics to
remain consistent with higher-rated peers over the medium term
the ratings remain constrained by high corporate governance risk.
The ratings factor in our expectation that UC will be able to
maintain its sales volumes and pass on some of the raw materials
cost increase to customers over 2016-2019. This will protect
profits from a material decline in a challenging consumer
environment in Russia," Fitch said.

KEY RATING DRIVERS

Leading Market Position

"The ratings reflect UC's leading positions in the core
confectionery market segments of Russia and a strong portfolio of
nationally recognized brands. We believe that the company's focus
on the medium price segment and increasing presence in the
economy segment, together with high customer loyalty and a wide
distribution network across the country, will enable UC to retain
its leading position in the Russian confectionery market over the
medium term. These strengths should also allow UC to continue to
see resilient revenue performance in the current difficult market
environment, as demonstrated in 2015.

Subdued Consumer Sentiment

"Since 2015, consumer spending in UC's home market of Russia has
been contracting, affecting confectionery sales. We expect this
weak demand to persist in 2016 and to translate into further
declines in sales volumes of confectionery. However, the
company's increased focus on the economy segment and on bakery
and sugary sweets, which tend to see greater demand when
consumers trade down, should allow UC to outperform the market in
2016 and limit sales volumes declines to the low single digits.
We also take into account the company's continued efforts to
increase direct contracts with retailers, which should provide
additional support to sales volumes.

EBITDA Margin under Pressure

"We estimate UC's EBITDA margin to have decreased to 12% in 2015
from 14% in 2014 and expect a further reduction to around 10% in
2016 due to continued increases in raw materials costs. These raw
material costs remain largely outside the company's control and
have increased as a result of swings in prices for major inputs,
such as cocoa and sugar, and also because of the depreciation of
the rouble as they are USD-linked. UC was, however, able to
increase average prices by more than 20% in 2015, which we
believe may have enabled it to protect its EBITDA and outperform
our expectations.

Further pressure on the EBITDA margin in 2016 will stem from
changes in the product mix towards less profitable bakery and
sugary sweets. However, we expect this figure to improve to 11%
in 2017-2019 on the likely recovery of demand for chocolate
sweets."

Loose Corporate Governance Practices

Weak corporate governance remains a key credit risk, in
particular with respect to aggressive and variable cash
distributions either in the form of dividends or loans to related
parties. Lack of management independence and a large portion of
UC's cash being held at Guta Bank demonstrate UC's dependence on
its shareholder Guta Group.

"We view weak corporate governance as potentially adversely
affecting unsecured creditors and therefore cap UC's ratings at
the current 'B' level, although the company's credit metrics and
business profile are commensurate with higher rating.

"We assume that outflows to shareholder and related parties would
be at manageable levels over 2016-2019, allowing UC to maintain
moderate leverage and retain adequate access to bank financing.
The Outlook revision also takes into account the material
reduction in 2015 of net outflows to related parties and
shareholders, enabling the company to reduce its debt burden and
increase its headroom under the current rating."

Moderate Leverage

Fitch estimates UC's FFO adjusted gross leverage to have
decreased to 2.4x in 2015 (2014: 2.9x) as a result of debt
reduction by around RUB2bn following the substantial decrease in
net outflows to related parties and the shareholder.  "We project
FFO adjusted gross leverage to rise to 2.5x-3.0x over 2016-2018
due to lower EBITDA margin and a possible resumption of outflows
to related parties, dividends or acquisitions of non-core assets.
We assume though that total payments and outflows for each year
would not exceed prior-year net profit."

Despite the projected increase in leverage, expected credit
metrics are strong compared with peers, allowing comfortable
headroom under the 'B' rating.

KEY ASSUMPTIONS

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

-- 1% decrease in sales volumes in 2016 and 1%-2% growth
    Thereafter

-- Revenue up 20% in 2015, followed by mid-single digit growth
    over 2016-2019

-- Decline in EBITDA margin to 12% in 2015 and to around 10% in
    2016 as a result of higher raw materials prices. EBITDA
    margin to improve to 11% in 2017-2019.

-- Capex at around 2%-3% of revenue over 2016-2019

-- Cash distributions (dividends, loans to related parties and
    investments in non-core assets) equal to prior-year net
    profit

-- Adequate liquidity

RATING SENSITIVITIES

Positive: An upgrade is unlikely unless there is consistent
evidence of improved corporate governance practices.

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

-- Sustained material deterioration in free cash flow (FCF)
    generation, driven by operating underperformance

-- Larger-than-expected distribution of funds to Guta Group or
    material investments in non-core assets not balanced by
    greater pre-dividend FCF

-- Sustained FFO-adjusted gross leverage above 4.0x

LIQUIDITY

As at end-2015 Fitch-adjusted unrestricted cash of RUB0.2 bil.,
available undrawn committed bank lines of RUB4.4 bil. and
expected positive FCF were not sufficient to cover short-term
debt of RUB7.6 bil. However, we estimate the company's liquidity
position to have improved substantially after it signed an
agreement for an additional RUB4 bil. credit facility in March
2016 and refinanced a large portion of its short-term maturities.
Liquidity and refinancing risks may increase in case of large and
uncontrolled cash leakage to related parties and dividends.

SUMMARY OF FINANCIAL STATEMENTS ADJUSTMENTS

-- Operating leases: Fitch adjusted debt by adding 8x of yearly
    operating lease expense (2014: RUB93 mil.).

-- Cash: Fitch adjusted available cash at end-2015 by deducting
    RUB2.1 bil. for cash held at related-party bank.

FULL LIST OF RATING ACTIONS

OJSC Holding Company United Confectioners

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

  National Long-term rating: upgraded to 'BBB(rus)' from 'BBB-
  (rus)', Outlook Stable

OOO United Confectioners-Finance

  National senior unsecured rating: affirmed at 'B'/'RR4'



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


BANCO POPULAR ESPANOL: Fitch Assigns 'B-' Preferred Secs. Rating
----------------------------------------------------------------
Fitch Ratings has assigned Banco Popular Espanol S.A.'s (Popular)
issue of additional tier 1 high trigger contingent convertible
perpetual preferred securities (AT1) a rating of 'B-'.

KEY RATING DRIVERS

SUBORDINATED DEBT AND OTHER HYBRID SECURITIES

The notes are AT1 instruments with fully discretionary interest
payments and are subject to conversion to common equity on a
breach of the common equity tier 1 (CET1) ratio at 7%, which is
calculated on a 'phase-in' basis using Popular's individual and
consolidated accounts.

The rating of the securities is three notches below Popular's
'bb-' Viability Rating (VR), in accordance with Fitch's criteria
for assigning ratings to hybrid instruments. The rating of the
AT1 instrument takes into account the Positive Outlook on the
bank's rating, reflecting Fitch's expectation of an improvement
in its financial profile, as well as the bank's strong SME
franchise.

The rating also considers Popular's end-2015 CET1 ratio of 13.1%
and a CET1 ratio of 16.1% on an unconsolidated basis, which
provide it with a buffer from the equity conversion trigger
level. Fitch expects the non-payment of interest on this
instrument will occur before it breaches the notes' 7% CET1
trigger level, as Popular's Supervisory Review and Evaluation
Process (SREP) requirement was set at 10.25%. Payment of coupons
is made with the parent's distributable reserves, which totalled
EUR3.1bn at end-2015, the last available date.

RATING SENSITIVITIES

SUBORDINATED DEBT AND OTHER HYBRID SECURITIES

The notes' rating is primarily sensitive to a change in the VR.
The securities' rating is also sensitive to changes in their
notching from Popular's VR, which could arise if Fitch changes
its assessment of the probability of their non-performance
relative to the risk captured in the VR. This may reflect a
change in capital management in the group or an unexpected shift
in regulatory buffer requirements, for example. Under Fitch's
criteria, a one-notch upgrade of the AT1 instrument would be
conditional upon a two-notch upgrade of Popular's VR.


REPSOL SA: Egan-Jones Cuts LC Commercial Paper Rating to B
----------------------------------------------------------
Egan-Jones Ratings Company lowered the local currency commercial
paper rating on Repsol SA to B from A3 on April 12, 2016.

Repsol S.A. is an integrated global energy company based in
Madrid, Spain. It carries out upstream and downstream activities
throughout the entire world. It has more than 24,000 employees
worldwide.


TELEFONICA SA: Egan-Jones Cuts FC Sr. Unsecured Rating to BB-
-------------------------------------------------------------
Egan-Jones Ratings Company lowered the foreign currency senior
unsecured rating on debt issued by Telefonica SA to BB- from BB
on April 12, 2016.

Telefonica, S.A. is a Spanish broadband and telecommunications
provider with operations in Europe, Asia, and North, Central and
South America.


* Fitch Says Spain 2015 Deficit Highlights Fiscal Challenge
-----------------------------------------------------------
Spain's larger-than-forecast 2015 fiscal deficit, confirmed by
Eurostat, highlights the challenge the sovereign faces in
reducing its high public debt, Fitch Ratings says. The
authorities' policy response will be an important factor in
restoring credibility to efforts to improve Spain's structural
fiscal position.

Spain's general government deficit fell to 5.1% of GDP (5.0%
excluding bank recapitalization costs) from 5.9% in 2014, but
well short of the official target of 4.2% (and our forecast of
4.7%). Regional and social security budgets missed their targets
by 1pp and 0.7pp respectively, whereas the central government
deficit was 0.3pp within target at 2.6% of GDP as strong GDP
growth boosted revenues. Overall, recent general government
deficit reduction has been driven by economic recovery and low
funding costs, with no improvement in the cyclically adjusted
balance.

The 2015 fiscal slippage reinforces our view that Spain's high
public debt, at 99% of GDP more than double the 'BBB' category
median, will fall only gradually, and that the 2016 deficit will
not come close to the 3% of GDP threshold to exit the Excessive
Deficit Procedure (EDP). Earlier this week, the government
revised up its 2016 budget deficit target from 2.8% of GDP to
3.6%, requiring an extension to the EDP deadline.

The European Commission has highlighted weak enforcement of 2012
Budgetary Stability Law (BSL) powers over regional budgets. A
track record of more effective enforcement would be positive for
Spain's fiscal credibility. BSL mechanisms such as notifying
regions when they should submit adjustment plans, and jointly
drafting binding expenditure and liquidity management plans, have
been more actively applied recently. Spain's interim government
has outlined further measures including a pre-defined process if
regional budgets go off-track, with the threat of using BSL
powers to withhold funds if adjustment plans are inadequate, and
a working group is assessing regional financing reform options.

The BSL's role in improving the regions' aggregate fiscal
performance supported our introduction of a 'BBB-' ratings floor
for Spanish regions in March 2013 (the floor does not currently
apply to Catalonia). However, regional fiscal slippage against
central government targets, as seen in 2015, highlights the
importance of structural reform of regional funding alongside
enforcement.

Preliminary 2015 Ministry of Finance accounts show a negative
regional operating balance of EUR6.4bn, up from EUR3.3bn in 2014.
Many regions have budgeted for a positive current balance in
2016, but we forecast that the sector will report another overall
negative balance. Repeated negative current balances mean that
debt repayment must be funded from debt issuance. The
availability of debt service mechanisms such as the Regional
Liquidity Fund helps offset this risk and is another key support
of our regional ratings floor.

Discussions regarding the regions' funding responsibilities in
areas such as healthcare, which could address their complaints of
underfunding, have resumed, but may be slow due to the political
uncertainty following last December's inconclusive general
election. Meanwhile, spending cuts could face considerable
opposition from regions, and tension may increase as the central
government introduces additional conditions for transfers from
the Regional Liquidity Fund, which can require reprioritization
of EUR10 bil. of regional budgets (equivalent to 8% of regional
operating expenditure).

More generally, uncertainty over the composition of the next
government adds to uncertainty about fiscal consolidation. We do
not anticipate significant changes to the 2016 budget by the
current interim government, with deficit reduction continuing to
be driven by higher revenues from above-trend GDP growth.



===========
T U R K E Y
===========


MINTAY: Files Bankruptcy Protection, Operations to Continue
-----------------------------------------------------------
Benjamin Harvey at Bloomberg News reports that Mintay has filed
for bankruptcy protection.

According to Bloomberg, Cuneyt Ozen, Mintay's lawyer, as cited by
Hurriyet, said the company will continue to operate and filed to
seek time to overcome financial troubles.

The company, founded in 2000, has production facilities in Corum,
Istanbul and Beylikduzu, but hasn't been producing in Corum for
some time, Bloomberg relates.

Turkey-based Mintay is producer of Ravelli brand shirts.



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


NAFTOGAZ NJSC: Fitch Affirms CCC LT Issuer Default Ratings
----------------------------------------------------------
Fitch Ratings has affirmed NJSC Naftogaz of Ukraine's (Naftogaz)
long-term foreign and local currency Issuer Default Ratings (IDR)
at 'CCC'.

Naftogaz's ratings reflect its strong links with the state of
Ukraine (CCC), its sole shareholder, its weak though gradually
improving financial profile and its exposure to political and
legal risks. The state continued to support the company in 2015,
via equity injections to cover the disparity between imported gas
prices and domestic regulated gas prices for households and
heating utilities. However, the company's negative operating
deficit significantly improved in 2015, and should improve
further on the gradual liberalization of the natural gas market.
We expect the state will continue to support the company, eg by
assisting in re-financing its debt portfolio. A significant part
of Naftogaz's debt portfolio is represented by domestic banks and
is guaranteed by the state.

Naftogaz is Ukraine's major natural gas production, supply and
transit company. In 2015, it produced 16 billion cubic meters
(bcm) of gas and imported 15.4bcm from the EU and Russia.

KEY RATING DRIVERS

Rating Linked With Sovereign

Naftogaz's ratings are aligned with those of Ukraine. This
reflects Naftogaz group's strategic importance to the state as
the sole gas operator of the gas transmission system and its
status as a guaranteed natural gas supplier. In 2015, Naftogaz
continued to receive equity injections from the state budget,
which may not be needed in 2016, provided the planned natural gas
tariffs adjustment takes place. The state directly guarantees
some of Naftogaz's loans, which is another indication of its
support. In addition, Naftogaz's performance is closely monitored
by the IMF, Ukraine's major lender, which creates incentives for
the state to keep Naftogaz adequately funded.

Reducing Operating Deficit

Ukraine has committed to eliminate Naftogaz's operating deficit
by 2017, when the 100% parity between the domestic gas tariffs
and the cost of imported gas is to be achieved, as part of its
deal with the IMF. As expected, in April 2015 the state raised
domestic natural gas prices for households to 56% and for heating
utilities to 30% of the imported gas price. However, a further
increase, to 75% of the parity intended to come into force from 1
April, 2016, was delayed due to political reasons.

Naftogaz's operating deficit in 2016 will largely be driven by
the pace of price liberalization, as well as the level of
imported gas prices and the hryvna exchange rate. The company may
not require equity injections from the state if the price
liberalisation process proceeds as planned. However, we expect
the state to step in and support Naftogaz if the planned
indexation does not take place, or other factors (such as rising
imported gas prices or further hryvna depreciation) significantly
affect the company.

Disputes With Gazprom

Naftogaz's strained relations with its former major supplier PAO
Gazprom (BBB-/Negative) mirror the political tensions between
Russia and Ukraine and negatively affect Naftogaz's credit
quality. There are a number of claims and legal disputes
initiated by both Naftogaz and Gazprom against each other, with
yet unclear implications.

Naftogaz and Gazprom signed a 10-year gas supply contract in
2009. However, this has effectively been abandoned as Naftogaz
believes the contract is unfair and is disputing it with the
Stockholm arbitration court. Naftogaz claims it overpaid for
natural gas delivered in 2010-2015, and seeks to recover losses,
while Gazprom is attempting to enforce the 'take-or-pay'
provision.

In addition, Naftogaz and Gazprom signed a 10-year gas transit
contract in 2009. This contract is also being disputed in the
Stockholm arbitration court. Naftogaz believes it incurred losses
as Gazprom decreased transit volumes from those originally
contracted; it also claims the transit fees should be calculated
in accordance with the EU regulations, rather than as originally
stipulated in the agreement. Gazprom denies the claim.

The legal proceedings between Naftogaz and Gazprom may take a
significant amount of time and the outcome is difficult to
predict. This exposes Naftogaz to significant legal risks.
Potential interruption of transit and/or supplies is another
risk.

Transit Volumes to Decrease

"Ukraine remains a major transit route for Russian natural gas
sold to Europe. However, its significance has reduced after
Russia launched the Nord Stream pipeline in 2011-2012. In 2015
transit volumes remained at 67bcm, compared with 93bcm in 2011;
we expect such volumes to remain relatively stable in 2016. We
also expect that the total transit fee for 2016 will not exceed
USD2 bil., compared with USD3bn earned in 2011. In the longer
term, the decline in transit volumes may take on greater
significance, considering Gazprom's efforts to bypass Ukraine as
a transit country," Fitch said.

Lower Import Prices Positive

"Falling natural gas prices in Europe and the diversification of
supplies have led to lower import prices for Naftogaz, which has
helped reduce its operating deficit. In 4Q15, Naftogaz's average
imported gas price fell to USD228/thousand cubic meters (mcm),
compared with USD360/mcm in 4Q14 (-37% year-on-year). We expect
that Naftogaz's average import price will not exceed USD200/mcm
in 2016; however, prices are likely to increase further as we
expect oil prices to eventually rise from the current low level.
European natural gas prices are largely driven by the dynamics of
oil prices, though the share of traditional oil-linked contracts
has reduced in recent years."

Supply Diversification

Naftogaz's has taken steps to diversify away from Russian gas and
these have helped reduce effective import prices and strengthened
its business profile, as political tensions between the two
countries continue. In 2015, Naftogaz purchased 9.3bcm of natural
gas from the EU and 6.1bcm from Gazprom, compared with 4.9bcm
from the EU and 14.4bcm from Gazprom in 2014. Ukraine imports gas
from the EU through the so called "reverse flow" scheme, via
Slovakia, Hungary and Poland. Currently, the reverse flow
capacity is around 58mcm per day, which technically allows
Naftogaz to satisfy its gas import needs.


Upcoming Reorganization

Ukraine's government has committed to reform the energy sector,
according to the EU Third Energy Package; this implies marked
liberalization and the unbundling of transmission and
distribution functions from trading and production. We believe
that Naftogaz is likely to remain as a legal entity after a
possible reorganization, and that its ratings should not be
immediately affected, as long as its links with the state remain
strong.


KEY ASSUMPTIONS

-- Gradual indexation of gas tariffs; the state steps in to
    support the company if required.

-- European natural gas prices remain below USD200/mcm in 2016,
    gradually rising thereafter.

-- Natural gas transit fees of around USD2bn p.a.

-- Naftogaz's domestic loans falling due are mostly extended;
    EBRD and Gazprombank loans are being repaid according to the
    schedule.

RATING SENSITIVITIES

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

-- sovereign rating downgrade, resulting from intensification of
    political and/or economic stress, potentially leading to a
    default on government debt; and

-- evidence of less state support.

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

-- sovereign rating upgrade, resulting from an improvement in
    political stability, progress in implementing the economic
    policy agenda agreed with the IMF, and an improvement in
    external liquidity;

-- positive free cash flow from rising domestic gas tariffs; and

-- greater financial transparency, such as more prompt
    publication of consolidated financial reports.

LIQUIDITY

Weak Liquidity

"Naftogaz's liquidity remains extremely weak; at end-2015 its
cash balances were at UAH7.1 bil., (USD297 mil.) compared to
short-term debt of UAH15.5 bil. (USD644 mil.). We expect that
Naftogaz will continue to service its external debt, including
the USD1.4 bil. Gazprombank loan due 2018 and the recently
received USD300 mil. EBRD loan. We also expect that Ukraine's
domestic banks will refinance Naftogaz's loans falling due, as
has been the case in recent years," Fitch said.



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


ANGLO AMERICAN: Egan-Jones Assigns BB- Sr. Unsecured Rating
-----------------------------------------------------------
Egan-Jones Ratings Company assigned BB- senior unsecured ratings
on debt issued by Anglo American PLC on April 14, 2016.

Anglo American plc is a multinational mining company based in
Johannesburg, South Africa and London, United Kingdom.


BAKKAVOR FINANCE: S&P Raises CCR to B+, Outlook Stable
------------------------------------------------------
Standard & Poor's Ratings Services said that it raised to 'B+'
from 'B' its long-term corporate credit rating on Bakkavor
Finance 2 PLC, a financing vehicle for U.K.-based fresh prepared
food producer Bakkavor.  The outlook is stable.

At the same time, S&P raised the issue rating to 'B+' from 'B' on
Bakkavor's existing GBP117 million senior secured notes and
GBP150 million senior secured notes.  S&P revised the recovery
rating on these notes up to '3' from '4', indicating its
expectation of 50%-70% recovery in the event of a payment
default, at the high end of the range.

The upgrade reflects an improvement in Bakkavor's earnings and
cash flow over the past few quarters, and S&P's view that
increased cost-saving initiatives should enable further earnings
growth in 2016 and 2017.  Under S&P's base case, it forecasts
continued improvements in Bakkavor's credit measures, alongside
material free operating cash flow (FOCF) generation, despite
relatively high volumes of growth-oriented capital expenditure
(capex).

The upgrade also reflects Bakkavor's lower debt leverage and
improving funding mix.  In February 2016, Bakkavor used
internally generated cash to prepay GBP75 million of the GBP192
million 8.25% senior secured notes.  This followed last year's
prepayment of GBP140 million of the same notes with greater use
of cheaper funding in the form of bank term loans.

In light of these funding initiatives, as well as S&P's
expectations for stronger operating performance and continued
free cash flow generation, S&P's base-case scenario shows steady
improvement in credit metrics that are commensurate with a higher
credit rating.  S&P consequently revised its financial risk
profile assessment upward to significant from aggressive.

S&P calculates Bakkavor's Standard & Poor's-adjusted debt-to-
EBITDA ratio as 3.9x and its EBITDA interest coverage as
approximately 3.0x as of Dec. 31, 2015.  Mainly due to a lower
debt burden, S&P projects these metrics to improve to 3.3x and
3.7x, respectively, by the end of 2016.

S&P's view of Bakkavor's weak business risk profile reflects its
exposure to volatile input prices and limited pricing flexibility
in the mature U.K. market, which contributes about 95% of the
group's EBITDA.  Because of Bakkavor's focus on private labels,
S&P anticipates that the company will likely grow through
expanding its portfolio of contracts with the main U.K.
supermarket chains in the core business areas of salads, deserts,
bread and pizza, and ready meals.  Bakkavor's operational success
continues to depend on its ability to maintain high volume
throughput at its production facilities in the U.K., while
securing contracts that focus on higher-value-added products and
offer the best possible margins.  In S&P's view, Bakkavor's niche
businesses in the U.S. and Asia are likely to grow their
contribution thanks to their well-defined scope and operational
efficiency at the local level.

Bakkavor's long-standing private shareholders, the Gudmundsson
brothers, maintain a controlling interest in the company.  All of
the rest of the equity is owned by a strategic investor, the
hedge fund Baupost Group.  S&P's rating reflects its view that
both groups of major shareholders intend to pursue a long-term
investment in Bakkavor and are likely to prioritize business
development needs over short-term shareholder returns.  That
said, S&P considers that the possibility of a higher rating would
be contingent on Bakkavor confirming longer-term debt leverage
targets and financial risk parameters that would guide dividends
and other returns of funds to shareholders.  Due to this
uncertainty regarding future decisions on shareholder returns,
S&P applies a negative financial modifier.  This means that the
final rating is one notch below the 'bb-' anchor that reflects
the combination of S&P's significant financial risk and weak
business risk profile assessments.

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

   -- A 2% revenue decline in 2016 and 3% growth in 2017.  The
      decrease this year is mainly due to minor contract losses
      and discontinued business as well as food price deflation.
      For next year, S&P projects stronger growth prospects
      driven by strategic investments in the U.S. and Asia.

   -- Continued product innovation and increased operating
      efficiency following restructuring and recent investments
      in modern machinery, which is helping to bolster
      profitability.

   -- Adjusted EBITDA margin increasing to 8.7% by the end of
      2017.

   -- Annual capex of about GBP60 million this year and about
      GBP50 million next year.

   -- Interest cost savings as a result of the partial
      refinancing of the currently outstanding GBP117 million
      senior secured notes due in 2018.

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

   -- Debt to EBITDA of 3.3x in 2016, improving to 3.1x in 2017.
   -- EBITDA interest coverage of about 3.7x in 2016, improving
      to 4.3x in 2017.

The stable outlook reflects S&P's view that Bakkavor will
continue to increase EBITDA as the group keeps driving down costs
and enhancing its operating efficiency.  Under S&P's base case,
it expects the group to continue its deleveraging path over the
next 18-24 months.  Although S&P's base case projects an adjusted
debt-to-EBITDA ratio of 3x-4x, it believes that the group is yet
to determine its optimal long-term debt leverage range.

S&P could raise the rating if Bakkavor further improves operating
performance and cash flow generation.  S&P could also take a
positive rating action if the company performs in line with S&P's
base case and it become more certain that the new shareholder
group has committed to a permanent reduction in leverage to below
4x on an adjusted basis.

S&P could lower the rating if Bakkavor's EBITDA deteriorates or
if working capital mismanagement erodes FOCF through great cash
absorption, pushing EBITDA interest coverage toward 2x and
materially reducing the FOCF base.  The likelihood of a downgrade
would also increase if the group's financial policy indicates a
higher debt leverage tolerance, for example with the ratio of
adjusted debt to EBITDA permanently at the high end of the 4x-5x
range.


BESTWAY UK: Moody's Issues Correction to April 19 Rating Release
----------------------------------------------------------------
Moody's Investors Service corrected the headline to the April 19,
2016 Release: Moody's upgrades Bestway's senior secured rating to
Ba3; stable outlook Global Credit Research

In the Headline, the ratings class description was changed to
"senior secured."

A full text copy of the press release is available free at:

                         http://is.gd/txYUS2


BHS GROUP: Enters Administration, 11,000 Jobs at Risk
-----------------------------------------------------
James Davey and Kate Holton at Reuters report that British
department stores group BHS was placed into administration on
April 25, putting the 88-year-old retailer in danger of
disappearing from the high street and placing 11,000 jobs at
risk.

Once a mainstay of the British high street, BHS has been in
decline for years, unable to keep up with demand for fast
fashion, online sales and improved customer services, Reuters
relays.

BHS employs about 8,000 people, while a further 3,000 contractors
work with the company's 164 stores, Reuters discloses.

With a pension deficit of 571 million pounds, the pensions
regulator is investigating whether previous owners sought to
avoid their obligations, Reuters says.

"The group will continue to trade as usual whilst the
administrators seek to sell it as a going concern," Philip Duffy
and Benjamin Wiles -- benjamin.wiles@duffandphelps.com --
managing directors of restructuring firm Duff & Phelps who have
been appointed joint administrators, as cited by Reuters, said.

BHS had in March won the support of its creditors for a rescue
plan that gave it big cuts to its rent bill, Reuters recounts.

However, saddled with over 1 billion pounds of debt, including
the pension deficit, BHS failed to raise the additional funds it
required, particularly from planned asset sales, to meet all its
contractual payments, prompting the administration process,
Reuters notes.

BHS Group is a department store chain.


DECO 11 - UK: S&P Lowers Rating on Class D Notes to CCC-
--------------------------------------------------------
Standard & Poor's Ratings Services lowered its credit ratings on
DECO 11 - UK Conduit 3 PLC's class A-1A, A-1B, A-2, B, C, and D
notes.  At the same time, S&P has affirmed its ratings on the
class E and F notes.

DECO 11 - UK Conduit 3 is a U.K. multi-loan commercial mortgage-
backed securities (CMBS) transaction that closed in December
2006. It was originally backed by 17 loans.  The rating actions
follow S&P's review of the four remaining loans in the
transaction.

MAPELEY GAMMA (83% OF THE POOL)

The whole loan and securitized balance is GBP216.4 million.  The
loan entered special servicing in October 2012 due to a loan-to-
value (LTV) event of default.  The loan matures in January 2017.

The loan is secured against 25 office properties located in U.K.
regional and provincial towns.

As of the January 2016 servicer report, the reported securitized
LTV ratio was 159.1%, based on a July 2015 valuation of GBP136.0
million.

S&P has assumed principal losses in our 'B' rating stress
scenario.

                WILDMOOR NORTHPOINT (14% OF THE POOL)

The securitized balance is GBP37.1 million and junior debt
balance is GBP4.5 million.  The loan entered special servicing in
March 2010 due to an LTV breach.  The loan matured in July 2010.

The loan is secured by a shopping center in Hull, Yorkshire.  The
property is located approximately 4.5 miles north of Hull city
center.

As of the January 2016 servicer report, the reported securitized
LTV ratio was 155.9%, based on a July 2012 valuation of GBP23.8
million.

S&P has assumed principal losses in its 'B' rating stress
scenario.

                 CPI RETAIL ACTIVE (3% OF THE POOL)

The whole loan and securitized balance is GBP7.2 million.  The
loan defaulted in November 2010 due to an interest coverage ratio
(ICR) breach and entered special servicing.  The loan matured in
July 2011.

The loan is secured by a purpose-built shopping center in the
regional town of Ross-on-Wye, 15 miles from Gloucester and 20
miles from Cheltenham.

As of the January 2016 servicer report, the reported securitized
LTV ratio was 119.8%, based on a December 2010 valuation of
GBP6.0 million.

S&P has assumed principal losses in its 'B' rating stress
scenario.

                INVESTCO ESTATES (0.5% OF THE POOL)

The whole loan and securitized balance is GBP1.4 million.  The
loan entered special servicing in October 2013 due to a maturity
event of default.

The loan is backed by four freehold industrial buildings
consisting of warehouse space, office units, and storage situated
in Nuneaton, which is east of Birmingham and north of Coventry in
the West Midlands.

As of the January 2016 servicer report, the reported securitized
LTV ratio was 112.4%, based on a January 2014 valuation of GBP1.2
million.

S&P has assumed principal losses in its 'B' rating stress
scenario.

                      INTEREST SHORTFALLS

The class C, D, and E notes experienced an interest shortfall on
the January 2016 interest payment date for the first time.  S&P
understands the shortfall related to the reimbursement of legal
expenses.

S&P examined the details of the interest shortfall and determined
that the interest shortfall would likely repay on the next
payment date (i.e., a temporary shortfall).  It is S&P's view
that an immediate downgrade to a 'D' rating would not be the most
appropriate indicator of credit risk.

                         RATING RATIONALE

S&P ratings address the timely payment of interest, payable
quarterly in arrears, and payment of principal not later than the
legal final maturity date in January 2020.

The credit enhancement to the class A-1A notes from the junior
classes has deteriorated, in S&P's opinion.  Additionally, the
timing risk relating to the repayment of principal not later than
the legal final maturity date has increased.  The transaction's
legal final maturity date is approximately 3.5 years away.

S&P has therefore lowered to 'BBB- (sf)' from 'A- (sf)' its
rating on the class A-1A notes to reflect these risks in
accordance with S&P's European CMBS criteria and our credit
stability criteria.

S&P's analysis indicates that the available credit enhancement
for the class A-1B notes is no longer commensurate with S&P's
'B+ (sf)' rating on this class of notes.  Therefore, S&P has
lowered to 'B- (sf)' from 'B+ (sf)' its rating on this class of
notes.  S&P believes that the repayment of this class of notes
does not depend on favorable business, financial, and economic
conditions.

In accordance with S&P's criteria for assigning 'CCC' category
ratings, it has lowered its ratings on the class A-2, B, C, and D
notes to 'CCC+ (sf)', 'CCC (sf)', 'CCC- (sf)', and 'CCC- (sf)',
respectively.  S&P believes that the repayment of these classes
of notes depends on favorable business, financial, and economic
conditions.  In S&P's opinion, these notes face at least a one-
in-two likelihood of default.

The class E and F notes are currently rated 'D (sf)' following
non-accruing interest amounts and interest shortfalls.  S&P has
affirmed its 'D (sf)' ratings on these classes of notes.

DECO 11 - UK Conduit 3 is a U.K. multiloan CMBS transaction that
closed in December 2006.  It was originally backed by 17 loans,
of which four remain.

RATINGS LIST

DECO 11 - UK Conduit 3 PLC
GBP444.387 mil commercial mortgage-backed floating-rate notes

                                     Rating        Rating
Class            Identifier          To            From
A-1A             XS0279810468        BBB- (sf)     A- (sf)
A-1B             XS0279812597        B- (sf)       B+ (sf)
A-2              XS0279814452        CCC+ (sf)     B- (sf)
B                XS0279815426        CCC (sf)      B- (sf)
C                XS0279816580        CCC- (sf)     CCC+ (sf)
D                XS0279817398        CCC- (sf)     CCC (sf)
E                XS0279817711        D (sf)        D (sf)
F                XS0279818289        D (sf)        D (sf)


INOVYN LTD: S&P Assigns Preliminary B CCR, Outlook Stable
---------------------------------------------------------
Standard & Poor's Ratings Services said that it assigned its
preliminary 'B' long-term corporate credit rating to U.K.-
headquartered INOVYN Ltd., a manufacturer of polyvinyl chloride
(PVC) and other chlorine derivatives.  The outlook is stable.

At the same time, S&P placed its 'B-' long-term corporate credit
rating on INOVYN's operating subsidiary Kerling PLC on
CreditWatch with positive implications.

S&P assigned its preliminary 'B' issue rating to INOVYN's
proposed EUR240 million term loan A and up to EUR835 million term
loan B. The recovery rating on these facilities is '3',
indicating S&P's expectation of recovery prospects for creditors
in the higher half of the 50%-70% range in the event of payment
default.

S&P also placed on CreditWatch positive its 'B-' issue ratings on
Kerling's EUR785 million senior secured fixed-rate notes.  The
recovery rating on this facility is unchanged at '4'.

Finally, S&P is withdrawing its issue and recovery ratings on
Kerling's EUR75 million senior secured notes, following their
full repayment in December 2015.

S&P's final issue ratings will depend on its receipt and
satisfactory review of INOVYN's executed transaction
documentation.  Accordingly, the ratings on the proposed issues
should not be construed as evidence of final ratings.  If
Standard & Poor's does not receive final documentation within a
reasonable time frame, or if they depart from materials reviewed,
S&P reserves the right to withdraw or revise its ratings.
Potential changes include, but are not limited to, utilization of
the proceeds, maturity, size and conditions of the facilities,
financial and other covenants, security, and ranking.

Formed on July 1, 2015, INOVYN is a 50/50 joint venture between
Ineos and Solvay.  Following the settlement of a EUR335 million
payment related to the early exit of Solvay from the joint
venture, pending approval from the competition authorities,
INOVYN will be ultimately fully owned by Ineos AG.  INOVYN
operates 17 manufacturing sites in eight countries with total
production capacity of about 2.0 million tons of aggregate PVC
resins and 2.3 million of caustic soda.  The company manufactures
general and specialty-purpose vinyls (commodity and specialty
PVC), organic chlorine derivatives, and chlor-alkali such as
caustic soda and caustic potash.

INOVYN's formation alters the competitive landscape of PVC
producers in Europe, in S&P's view, placing it as the clear No. 1
producer of commodity-grade PVC, chlorine, and caustic soda, well
ahead of its nearest competitors, the newly created Vynova and
KemOne.  S&P takes a positive view of INOVYN permanently closing
its PVC capacities at Schkopau because S&P considers that it
could imply stronger pricing discipline and improvement in the
supply/demand balance in the industry.  In S&P's expectation of
an improvement in margins, it also takes into account Ineos'
excellent track record of implementing comprehensive cost
restructurings and synergy rationalization.

However, the European PVC industry continues to suffer from
overcapacity and depends on highly cyclical end-markets, notably
construction.  INOVYN is the market leader but its competitors
for specialty PVC have become stronger, with Vinnolit and
Vestolit being acquired by larger U.S. peers.  Consequently, S&P
anticipates continued volatility in INOVYN's profitability and
cash flows.  S&P views this as an important credit risk.

In S&P's base case for 2016, it assumes:

   -- Stable PVC and caustic soda volumes;
   -- EBITDA margins of about 14%-15%, supported by favorable
      cost of feedstock and operational efficiencies;
   -- Fairly high capital expenditure (capex) of about
      EUR160 million-EUR170 million;
   -- A pension deficit of about EUR380 million (after tax); and
   -- Payment to Solvay of EUR335 million.

Based on these assumptions, S&P arrives at these forecasts for
2016 and 2017:

   -- Reported EBITDA (after restructuring charges) of about
      EUR430 million-EUR440 million in 2016 and EUR390 million-
      EUR410 million in 2017;

   -- A Standard & Poor's-adjusted debt to EBITDA ratio of about
      4.2x in 2016 and 2017; and

   -- Strong free operating cash flow.

The stable outlook reflects S&P's view that INOVYN's adjusted
gross debt to EBITDA will likely be 4.0x-4.5x over 2016-2017.
S&P anticipates that the timely realization of synergies will
support the resilience of INOVYN's profitability and lead to
sustainable EBITDA margins (after restructuring charges) of at
least 14%.  S&P considers an adjusted gross debt-to-EBITDA ratio
of 3x-5x as commensurate with a 'B' rating, depending on S&P's
view of prevailing industry cycles.

S&P could lower the ratings if INOVYN's leverage increased above
5x.  This could occur, for example, if a drop in PVC demand and
prices tightened the company's margins or if its capex or
dividends are higher than S&P anticipates.

The rating is constrained by S&P's view of the volatility of the
PVC industry and the relatively high adjusted leverage of INOVYN.
However, an upgrade could become more likely if INOVYN reported
adjusted gross leverage of 2.0x-4.0x at the bottom of the cycle
and if it put in place a financial policy that supported a higher
rating.


KENSINGTON MORTGAGE 2007-1: S&P Lifts Rating on Cl. B2 Notes to B
-----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its credit ratings on
Kensington Mortgage Securities PLC series 2007-1's class A3a,
A3b, A3c, M1a, and M1b notes.  At the same time, S&P has raised
its ratings on the class M2b, B1a, B1b, and B2 notes.

The rating actions follow S&P's credit and cash flow analysis of
the most recent transaction information that S&P has received as
part of its surveillance review cycle.  S&P's analysis reflects
the application of its U.K. residential mortgage-backed
securities (RMBS) criteria and S&P's current counterparty
criteria.

S&P has observed a decrease in both our weighted-average
foreclosure frequency (WAFF) and weighted-average loss severity
(WALS) since S&P's April 29, 2013 review.

The decrease in the WAFF is mainly due to the increase in
seasoning and the decrease in total arrears to 27.28% in December
2015 from 38.72% in S&P's previous review.  The decrease in the
WALS is due to the decrease in the weighted-average current-loan-
to-value (CLTV) ratio, to 58.07% from 77.14% in S&P's previous
review (these CLTV ratio figures are based on Standard & Poor's
calculations).

Rating      WAFF       WALS
level        (%)        (%)
AAA        50.58      35.62
AA         45.31      28.41
A          38.55      17.92
BBB        33.59      12.34
BB         28.07       8.79
B          25.25       6.00

In addition, the transaction benefits from a reserve fund that
has deleveraged since S&P's previous review, which has increased
the available credit enhancement for the rated notes.
Consequently, S&P has raised its ratings on the class M2b, B1a,
B1b, and B2 notes.

On June 9, 2015, S&P lowered and removed from CreditWatch
negative its long-term issuer credit rating (ICR) on Barclays
Bank PLC, the transaction account and the liquidity facility
provider in this transaction.  As a result, the documented
replacement triggers were breached.  The issuer did not replace
Barclays Bank in the required timeframe permitted under our
current counterparty criteria.

The overarching principle behind our current counterparty
criteria is the replacement of a counterparty when the rating on
the counterparty falls below a minimum eligible rating.  Without
the implementation of the replacement mechanisms or an equivalent
remedy in the terms of the agreement with the counterparty, and
if there are no other mitigating factors, the rating on the
supported security is generally no higher than the long-term ICR
on the counterparty.

Consequently, S&P's ratings on the notes in this transaction are
capped at the 'A-' long-term ICR on Barclays Bank.  Due to an
error, S&P did not lower its ratings on the class A3a, A3b, A3c,
M1a, and M1b notes to the long-term ICR on Barclays Bank.  S&P
has therefore lowered to 'A- (sf)' from 'A (sf)' its ratings on
these classes of notes.

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

Kensington Mortgage Securities' series 2007-1 is a U.K.
nonconforming RMBS transaction that closed in March 2007.  The
collateral comprises first- and second-lien mortgages secured
over residential properties in England, Wales, and Scotland.

RATINGS LIST

Class              Rating
          To                  From

Kensington Mortgage Securities PLC
EUR492.1 Million, GBP236.3 Million, US$465 Million Mortgage-
Backed Floating-Rate Notes Series 2007-1

Ratings Lowered

A3a       A- (sf)             A (sf)
A3b       A- (sf)             A (sf)
A3c       A- (sf)             A (sf)
M1a       A- (sf)             A (sf)
M1b       A- (sf)             A (sf)

Ratings Raised

M2b       A- (sf)             BBB (sf)
B1a       BBB- (sf)           B (sf)
B1b       BBB- (sf)           B (sf)
B2        B (sf)              B- (sf)


POLESTAR UK: Enters Administration Following Pre-Pack Sale
----------------------------------------------------------
Jo francis at PrintWeek reports that Polestar UK Print and
Polestar Stones-Wheatons have gone into administration, a month
after the pre-pack sale of the group to Proventus.

Zelf Hussain -- zelf.hussain@uk.pwc.com -- and Peter Dickens --
peter.d.dickens@uk.pwc.com -- of PricewaterhouseCoopers (PwC)
have been appointed joint administrators at the businesses on
April 25, PrintWeek relates.

PrintWeek understands that Polestar's biggest customer, newspaper
publisher DMG Media, notified the group on April 22 that it would
not be novating its contract to the new business.

In a statement announcing the administration, PwC, as cited by
PrintWeek, said: "The business had previously undergone a
pre-packaged sale with the aim of protecting value and achieving
stability.  Unfortunately the decision by its largest customer
not to transfer their business to the new company as well as
continued pressure from other stakeholders has threatened the
viability of the ongoing business to the extent that directors
have sought the protection of an administration for the two
companies."

PwC, PrintWeek says, is now looking for buyers for the
businesses, which include the flagship gravure and web offset
site at Sheffield, web offset sites Bicester and Chantry,
sheetfed magazine printer Stones in Banbury, and book and
journals printer Wheatons in Exeter.

The companies will continue to trade in administration, and PwC
emphasised that employees would be paid as normal, PrintWeek
relays.

Polestar employs around 1,500 staff (including Applied
Solutions), as well as agency workers.  The GBP216.4 million
group is the UK's biggest publication printer and prints some 50m
magazines a week, according to PrintWeek.


SUNEDISON INC: Ecotricity Acquires UK Rooftop Solar Business
------------------------------------------------------------
John Parnell at PV-Tech reports that UK green utility Ecotricity
has announced the purchase of failed renewable energy developer
SunEdison's UK rooftop solar business.

The move will see Ecotricity enter the domestic solar market for
the first time, PV-Tech says.

Prior to its much vaunted exit of the UK market last year,
SunEdison launched its Energy Saver Plan scheme which comprised
almost 1,000 separate rooftop PV installs, PV-Tech relates.

The announcement came just hours after SunEdison filed for
chapter 11 bankruptcy in the US following weeks of speculation as
to the company's future, PV-Tech recounts.

                     About SunEdison, Inc.

SunEdison, Inc. is a developer and seller of photovoltaic energy
solutions, an owner and operator of clean power generation
assets, and a global leader in the development, manufacture and
sale of silicon wafers to the semiconductor industry.

On April 21, 2016, SunEdison, Inc. and 25 of its affiliates each
filed a Chapter 11 bankruptcy petition (Bankr. S.D.N.Y. Case Nos.
16-10991 to 16-11017).  Martin H. Truong signed the petitions as
senior vice president, general counsel and secretary.

The Debtors disclosed total assets of $20.71 billion and total
debts of $16.14 billion as of Sept. 30, 2015.

The Debtors have hired Skadden, Arps, Slate, Meagher & Flom LLP
as counsel, Togut, Segal & Segal LLP as conflicts counsel,
Rotschild Inc. as investment banker and financial advisor,
McKinsey Recovery & Transformation Services U.S., LLC, as
restructuring advisors and Prime Clerk LLC as claims and noticing
agent.


                            *********

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 2016.  All rights reserved.  ISSN 1529-2754.

This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers.

Information contained herein is obtained from sources believed to
be reliable, but is not guaranteed.

The TCR Europe subscription rate is US$775 per half-year,
delivered via e-mail.  Additional e-mail subscriptions for
members of the same firm for the term of the initial subscription
or balance thereof are US$25 each.  For subscription information,
contact Peter Chapman at 215-945-7000 or Nina Novak at
202-362-8552.


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