/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/160824.mbx 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 Wednesday, August 24, 2016, Vol. 17, No. 167 Headlines C Z E C H R E P U B L I C VITKOVICE ENVI: Files for Insolvency, Owes CZK155 Million D E N M A R K DANSKE BANK: Fitch Affirms BB+ Tier 1 Capital Instruments Rating NYKREDIT REALKREDIT: Fitch Affirms 'BB+' Tier 1 Notes Rating I R E L A N D JJ RED HOLDINGS: Henciti to Oppose Appointment of Examiner I T A L Y MONTE DEI PASCHI: Chief Executive, Ex-Chair Face Judicial Probe N E T H E R L A N D S HERBERT PARK: S&P Affirms B Rating on Class E Notes HOLLAND HOMES: Fitch Affirms 'BBsf' Rating on Class B Notes LAURELIN II: S&P Raises Rating on Class E Notes to BB+ PANTHER CDO: Fitch Hikes Class C Notes Rating to 'BBsf' R U S S I A SOGAZ OJSC: S&P Revises Outlook to Positive & Affirms BB+ Ratings S L O V A K R E P U B L I C RETAIL VALUE: Creditors' Committee Approves Restructuring Plan U N I T E D K I N G D O M ECO-BAT TECHNOLOGIES: Moody's Withdraws B2 Corp. Family Rating MASCOTT CONSTRUCTION: In Administration, 30 Jobs Affected WILLIAM ANELAY: May Enter Administration if CVA Proposal Fails ********* =========================== C Z E C H R E P U B L I C =========================== VITKOVICE ENVI: Files for Insolvency, Owes CZK155 Million --------------------------------------------------------- CTK reports that Vitkovice Holding spokeswoman Eva Kijonkova said Vitkovice Envi, another firm of the group owned by entrepreneur Jan Svetlik, has filed for insolvency, along with a petition for the court to permit its restructuring. Vitkovice Envi, employing 100 people, is a subsidiary of Vitkovice Power Engineering, which filed for insolvency and restructuring last week, CTK discloses. The court is expected to decide on Vitkovice Power Engineering's insolvency this week, CTK says. Vitkovice Envi's board of directors filed the insolvency petition with the Regional Court in Ostrava on Aug. 22, CTK relates. Vitkovice Envi has about 130 creditors and its debts amount to about CZK155 million, with claims worth CZK153 million being unsecured, CTK states. According to CTK, Ms. Kijonkova said Vitkovice Envi's situation has been caused mainly by contracts in Poland and Serbia that failed to be materialized. "A notable contribution to the insolvency situation also came from the worsened situation on the Arabian market, on which Vitkovice Envi also directed its activities. Another reason was the fact that the company failed to obtain operating loans from banks," Ms. Kijonkova said, notes the report. According to Ms. Kijonkova, Vitkovice Envi has already submitted a plan for its restructuring to its creditors and about a half of them have approved it, CTK relates. Vitkovice Envi produces tanks for biogas stations, water treatment plants and storage. ============= D E N M A R K ============= DANSKE BANK: Fitch Affirms BB+ Tier 1 Capital Instruments Rating ---------------------------------------------------------------- Fitch Ratings has affirmed Danske Bank's (Danske) and its mortgage bank subsidiary Realkredit Danmark's (Realkredit) Long-Term Issuer Default Ratings (IDRs) at 'A', Short-term IDRs at 'F1', and Viability Ratings (VRs) at 'a'. The Outlooks on the Long-Term IDRs are Stable. The rating actions are part of a periodic portfolio review of two major Danish banking groups rated by Fitch. KEY RATING DRIVERS - DANSKE'S IDRS, VR AND SENIOR DEBT Danske's ratings reflects the bank's strong universal Danish and, to a lesser extent, pan-Nordic franchises. These provide stable revenue generation across a wide range of products, strong capitalization as well as healthy funding and liquidity, although wholesale funding reliance makes the bank sensitive to a loss of investor confidence. Fitch said, "We view positively management's renewed strategic focus on relationship banking in the Nordics, whereby we believe past mistakes such as the expansion into Ireland are unlikely to be repeated." "The bank has also taken steps to strengthen its risk management framework, and we expect this to translate into further asset quality improvements. The level of impaired loans has fallen in recent years on the back of a domestic economic recovery, enhanced underwriting standards and ongoing wind-down of the non- core Irish portfolio, which is no longer a material risk to the bank. The ratio of impaired loans to gross loans was 2.9% at end- June 2016." Fitch said. Profitability metrics have also improved significantly, primarily as a result of lower loan impairment charges but also thanks to tight cost control and stronger revenue generation. Fitch expects resilient income generation in 2016 and beyond, supported by modest volume growth and continued strengthening of fee and commission income. Negative interest rates in Denmark have had a manageable impact on the bank's margins, being partly offset by re-mortgaging and repricing activity. For mortgage financing (mainly through Realkredit), Danske earns a fixed margin because the market interest rate on the covered bonds is passed through to the borrower. Danske is reliant on wholesale funding, like most Nordic banks, and has a well-diversified funding base. Its mortgage business (via Realkredit) is by law entirely wholesale-funded by mortgage bonds that match the interest term of the underlying mortgage loan. Fitch expects continued strong demand for Danish mortgage bonds in light of the need for domestic financial institutions, insurance companies and pension funds to hold highly liquid, high quality, securities in domestic currency. This is reinforced by a fairly limited outstanding volume of Danish government bonds. Nonetheless, maintaining a significant liquidity portfolio to mitigate refinancing risk is key for Danske's ratings. Danske's risk-weighted capital ratios compare well with international peers, although they are somewhat lower than some Swedish peers due to higher risk weights. Leverage is acceptable in a European context, with a fully loaded Basel III leverage ratio of 4.0% at end-June 2016. KEY RATING DRIVERS - REALKREDIT'S IDRS, VR AND SENIOR DEBT Realkredit's IDRs and VR reflects Fitch's view that profitability, although moderate, will enable the mortgage bank to absorb unexpected shocks in Denmark. Realkredit's rating are based on its standalone financial strength, despite the sharing of some central functions and distribution channels with its parent bank. Fitch also expects that to a significant extent, capital is fungible between Danske and Realkredit, and thus Fitch is likely to retain the VRs within one notch of each other. Realkredit's ratings reflect its strong domestic franchise as the second-largest mortgage lender, its strong capitalization and its resilient asset quality. The ratings are constrained by the bank's monoline business model and wholesale funding reliance, although risks associated with the latter are mitigated by a large, deep and liquid domestic covered bond market, and access to funding from its parent if needed. Realkredit's assets represent the majority of Danske's mortgage loan exposure. Fitch expects the quality of this portfolio to remain strong, supported by a stabilizing Danish economy. We expect profitability to remain low, but stable, underpinned by resilient revenue generation (given higher administration margins), tight cost control and a continued focus on underwriting. Realkredit is by law entirely wholesale-funded, largely through issuance of Danish mortgage bonds. Similar to its domestic peers, about 20% of Realkredit's bonds mature within a year to match the duration of the bank's underlying mortgage loans. Fitch said, "We believe that recent mortgage price adjustments will help reduce those volumes further. The supportive dynamics of the Danish mortgage bond market and Denmark's law on mortgage bond maturity extensions will help reduce refinancing risks." Realkredit's risk-weighted capital ratios compare strongly with those of domestic and international peers, although boosted by relatively low risk weights on mortgage loans. Leverage is good in a European context, with a tangible equity/tangible asset ratio of 5.6% at end-June 2016. SUPPORT RATING AND SUPPORT RATING FLOOR Danske's Support Rating (SR) of '5' and Support Rating Floor (SRF) of 'No Floor' reflect Fitch's view that senior creditors cannot rely on receiving full extraordinary support from the sovereign in the event of it becoming non-viable. The EU's Bank Recovery and Resolution Directive (BRRD) provides a framework for resolving banks that is likely to require senior creditors participating in losses, if necessary, instead of or ahead of a bank receiving sovereign support. Realkredit's SR of '1' reflects an extremely high probably that support would be provided by Danske, if required. In Fitch's view, Danske would have high propensity to support Realkredit given the latter's role as the group's main domestic mortgage provider, and the significant reputational risk Danske would face in the event of a default of Realkredit. Any required support would likely be manageable relative to Danske's ability to provide it. Fitch said, "Realkredit's SRF of 'No Floor' has been withdrawn as we believe the Danske is the most likely source of support, and the SRF is therefore no longer relevant to our coverage." SUBORDINATED DEBT AND OTHER HYBRID SECURITIES Subordinated debt and other hybrid capital issued by Danske are all notched down from the bank's VR and have been affirmed accordingly. In accordance with Fitch's criteria, subordinated debt and CRD IV-compliant Tier 2 instruments are rated one notch below Danske's VR to reflect the above-average loss severity of this type of debt relative to average recoveries. The narrow notching partly reflects the absence of contractual full write-down or conversion language. Fitch rates Danske's other Tier 2 instruments three notches below the VR to reflect loss severity (one notch) and incremental non- performance risk (two notches). Of the latter, compared to new CRD IV-compliant Tier 2 notes, Fitch has applied an additional single notch for incremental non-performance risk to legacy issues because of the issuer's ability to defer coupons. The ability to defer interest is the differentiation between the old- style Tier 2 instruments and the new CRD IV-compliant Tier 2 notes Hybrid Tier 1 capital notes, Tier 1 instruments and Additional Tier securities are rated three, four and five notches, respectively, below Danske's VR to reflect the higher than average loss severity risk of these securities (two notches) as well as high risk of non-performance (an additional one, two and three notches, respectively). RATING SENSITIVITIES DANSKE'S IDRS, VR AND SENIOR DEBT A continued sustained and material improvement in asset quality and profitability metrics could result in positive rating pressure in the medium term. This would also require management to successfully execute its current strategy, with a clear focus on Nordic home markets, while maintaining solid capital, funding and liquidity ratios. While unexpected, a downgrade could also result from a prolonged inability to competitively access debt capital markets, if the Danish business faces a significant asset quality deterioration that materially impacts capitalization or if the improving earnings trend reverses. At the current rating, Fitch expects Danske to maintain a large liquidity buffer and minimize maturity gaps to mitigate funding risks. The agency expects the bank to continue to have strong access to debt capital markets. REALKREDIT'S IDRS, VR AND SENIOR DEBT The Stable Outlook reflects Fitch's view that Realkredit will maintain its focus on asset quality and continue to generate capital internally. An upgrade is unlikely given its already high ratings for a monoline business model. A downgrade would most likely be a result of Realkredit being unable to competitively access wholesale funding markets or if it significantly increases its reliance on international debt investors who may prove less stable during financial stress. A downgrade of Danske's ratings, or reduced focus on liquidity, would also be rating negative. SUPPORT RATING AND SUPPORT RATING FLOOR An upgrade of Danske's SR or upward revision of the SRF would be contingent on a positive change in Denmark's propensity to support its banks. While not impossible, this is highly unlikely, in Fitch's view. Realkredit's SR of '1' is sensitive to any perceived change in Danske's propensity or ability to provide support. SUBORDINATED DEBT AND OTHER HYBRID SECURITIES As subordinated debt and other hybrid securities are notched down from Danske's VR, their respective ratings are sensitive to a change in Danske's VR. They are also sensitive to Fitch changing its assessment of the probability of their non-performance risk relative to the risk captured in Danske's VR. The rating actions are as follows: Danske Bank -- Long-Term IDR: affirmed at 'A', Outlook Stable -- Short-Term IDR: affirmed at 'F1' -- Viability Rating: affirmed at 'a' -- Support Rating: affirmed at '5' -- Support Rating Floor: affirmed at 'No Floor' -- Senior unsecured debt: affirmed at 'A' -- Short-term debt: affirmed at 'F1' -- Commercial paper program: affirmed at 'A'/'F1' -- CRD IV-compliant Tier 2 instrument (ISIN: XS0974372467): affirmed at 'A-' -- Subordinated debt: affirmed at 'A-' -- Legacy Tier 2 debt (ISIN: XS0176929684): affirmed at 'BBB' -- Tier 1 instruments: affirmed at 'BBB-' -- Additional Tier 1 capital instruments (ISIN: XS1044578273 and XS1190987427): affirmed at 'BB+' Danske Corporation -- Commercial paper program: affirmed at 'A'/'F1' Realkredit Danmark -- Long-Term IDR: affirmed at 'A', Outlook Stable -- Short-Term IDR: affirmed at 'F1' -- Viability Rating: affirmed at 'a' -- Support Rating: Upgraded to '1' from '5' -- Support Rating Floor: affirmed at 'No Floor' and withdrawn NYKREDIT REALKREDIT: Fitch Affirms 'BB+' Tier 1 Notes Rating ------------------------------------------------------------ Fitch Ratings has affirmed Denmark-based Nykredit Realkredit A/S's (Nykredit) Long-Term Issuer Default Rating (IDR) at 'A', Short-Term IDR at 'F1' and Viability Rating (VR) at 'a'. The Outlook on the Long-Term IDR is Stable. Fitch has also affirmed wholly-owned subsidiary Nykredit Bank A/S's Long-Term IDR at 'A' with a Stable Outlook, and Support Rating at '1'. The rating actions are part of a periodic portfolio review of two major Danish banking groups rated by Fitch. KEY RATING DRIVERS VR, IDRS AND SENIOR DEBT Nykredit's ratings reflect the bank's leading Danish mortgage lending franchise, resilient asset quality, and robust capitalization. The ratings also factor in Nykredit's moderate profitability and wholesale funding reliance, although the latter is mitigated by a large, deep and liquid domestic covered bond market. The loan book is of good quality, with a ratio of impaired-to- gross loans of 1.6% at end-March 2016. The vast majority are performing mortgage loans, with a small proportion of higher-risk non-mortgage lending in Nykredit Bank (impairment ratio of 7.3% at end-2015). Fitch expects the quality of mortgage lending to remain resilient, supported by a gradual domestic economic recovery and conservative risk appetite. Management aims to gradually grow and diversify the bank's franchise in Denmark, although Fitch expects this to be achieved without increasing the group's risk appetite as growth will mainly focus on cross-selling and broadening the product offering with existing clients. The bank's capitalization is solid and compares well with peers, both on a risk-weighted and leverage basis. Its Fitch core capital (FCC) ratio amounted to 20% at end-March 2016, and its Basel III leverage ratio was 4.3%. "Nykredit benefits from resilient core revenue generation and sound cost management, but margins are low and reflect its low-risk business model. The bank recently announced a price increase on its administration margin (effective from July 1, 2016) that we believe will have a material positive earnings impact. Negative interest rates in Denmark have had a manageable impact on the bank's margins. The bank is not directly exposed to interest rate risk in its mortgage financing (due to the Danish covered bond funding structure) although it is sensitive to lower treasury returns." Fitch said. Nykredit's mortgage business is by law entirely wholesale-funded, by mortgage bonds that match the interest term of the underlying mortgage loan. The group has actively reduced the share of bonds maturing within one year to just over 20% at end-2015 (from over one-third at end-2012), and the proportion of loans requiring refinancing on an annual basis to less than 10% of gross lending at end March 2016 (from just over 20% at end-2014). Fitch said, "We believe that the bank's recently announced mortgage price adjustments will help reduce those volumes further." "We believe the risk of wholesale market dislocation is partly offset by the group's strong and sophisticated approach to wholesale funding requirements, and this dependence on short-term wholesale funding is also partially mitigated by structural features in the Danish mortgage covered bond market. We expect continued strong demand for Danish mortgage covered bonds in light of the need for domestic financial institutions, insurance companies and pension funds to hold highly liquid, high quality, securities in domestic currency. This is reinforced by a fairly limited outstanding volume of Danish government bonds. Nonetheless, maintaining a significant liquidity portfolio to mitigate refinancing risks is a key factor for Nykredit's current ratings." Fitch said. SUPPORT RATING AND SUPPORT RATING FLOOR Nykredit's '5' Support Rating (SR) and Support Rating Floor (SRF) of 'No Floor' reflect Fitch's view that senior creditors cannot rely on receiving full extraordinary support from the sovereign in the event of the bank becoming non-viable. The EU's Bank Recovery and Resolution Directive provides a framework for resolving banks that will require senior creditors to participate in losses, if necessary, instead of or ahead of a bank receiving sovereign support. SUBORDINATED DEBT AND OTHER HYBRID SECURITIES Subordinated debt and other hybrid capital issued by Nykredit are all notched down from its VR and have been affirmed accordingly. In accordance with Fitch's criteria, subordinated debt is rated one notch below Nykredit's VR to reflect the higher-than-average loss severity of this type of debt. Tier 2 contingent capital instruments and Additional Tier 1 securities are rated three and five notches, respectively, below Nykredit's VR to reflect the higher-than average loss severity risk of these securities (two notches) as well as the high risk of non-performance (an additional one and three notches, respectively). SUBSIDIARY AND AFFILIATED COMPANY Nykredit Bank's IDRs and debt ratings are aligned with Nykredit's given the subsidiary's core position within the Nykredit group, including full ownership, strong support track record, and likely high reputational risk from allowing the subsidiary to default. Nykredit also provides a full range of services to Nykredit Bank's customers, which the mortgage institution itself is unable to provide. Given its close integration into the larger group, including various shared services, we have not assigned a VR to the subsidiary. RATING SENSITIVITIES VR, IDRS AND SENIOR DEBT The Stable Outlook reflects Fitch's view that Nykredit will continue to maintain strong asset quality while improving its earnings to internally generate capital. Although not expected by Fitch, pressure on the ratings could come from an adverse change in investor sentiment materially affecting Nykredit's ability to access competitively priced funding or from reduced emphasis on liquidity. An increased reliance on international debt investors who may prove less stable during financial stress, or increasing risk appetite - particularly at Nykredit Bank - would also be rating-negative. An upgrade is currently unlikely given the group's already high ratings and limited product breadth. In the longer term, an upgrade would be contingent on Nykredit broadening its product offering, providing it with more diversified revenue streams. SUPPORT RATING AND SUPPORT RATING FLOOR An upgrade of the SR or upward revision of the SRF would be contingent on a positive change in Denmark's propensity to support its banks. While not impossible, this is highly unlikely in Fitch's view. SUBORDINATED DEBT AND OTHER HYBRID SECURITIES The ratings of subordinated debt and hybrid securities issued by Nykredit are sensitive to a change in Nykredit's VR. Tier 2 contingent capital instruments and Additional Tier 1 securities are also sensitive to Fitch changing its assessment of the probability of their non-performance risk relative to the risk captured in Nykredit's VR. SUBSIDIARY AND AFFILIATED COMPANIES Nykredit Bank's ratings are sensitive to the same factors that may drive changes to Nykredit's IDRs. The rating actions are as follows: Nykredit Realkredit A/S -- Long-Term IDR: affirmed at 'A', Stable Outlook -- Short-Term IDR: affirmed at 'F1' -- Viability Rating: affirmed at 'a' -- Support Rating: affirmed at '5' -- Support Rating Floor: affirmed at 'No Floor' -- Senior unsecured debt: affirmed at 'A' -- Subordinated debt: affirmed at 'A-' -- Tier 2 contingent capital notes: affirmed at 'BBB' -- Additional Tier 1 notes: affirmed at 'BB+' Nykredit Bank A/S -- Long-Term IDR: affirmed at 'A', Stable Outlook -- Short-Term IDR: affirmed at 'F1' -- Support Rating: affirmed at '1' -- Senior unsecured debt: affirmed at 'A'/'F1' ============= I R E L A N D ============= JJ RED HOLDINGS: Henciti to Oppose Appointment of Examiner ---------------------------------------------------------- Aodhan O'Faolain at The Irish Times reports that the High Court heard on Aug. 19 the appointment of an examiner to JJ Red Holdings is to be opposed. Ms. Justice Caroline Costello on Aug. 18 appointed insolvency practitioner Tom Murray as interim examiner to JJ Red Holdings, the operator of the Dublin Citi Hotel and the Trinity Bar & Venue at Dame Street, Dublin that employs more than 50 people, The Irish Time relates. According to The Irish Times, the company cited a dispute with its landlord Henciti Ltd., over claims for arrears of rent allegedly due, as the reason why it was seeking the protection of the court. Barrister Rossa Fanning, counsel for Henciti, said his client would be opposing JJ Red Holdings' bid to enter examinership when the matter returns before the court in September, The Irish Times relays. JJ Red Holdings, which has been operating the 27-bedroom hotel since 2006 sought the protection of the court after it was unable to fulfill terms of a settlement agreement it had entered with its landlord, The Irish Times recounts. ========= I T A L Y ========= MONTE DEI PASCHI: Chief Executive, Ex-Chair Face Judicial Probe --------------------------------------------------------------- James Politi at The Financial Times reports that the chief executive and former chairman of Monte dei Paschi di Siena are under investigation for alleged market manipulation and false accounting, casting a cloud over Italy's embattled lender nearly three weeks after it agreed to a dramatic EUR5 billion rescue package. News that Fabrizio Viola, the chief executive, and Alessandro Profumo, the former chairman, are the subject of a judicial probe by prosecutors in Milan was first reported by Reuters and confirmed by an MPS spokesman on Aug. 18, the FT relates. The investigation centers around the allegedly improper accounting treatment of Alexandria and Santorini, two derivatives trades booked by Monte dei Paschi di Siena between 2011 and 2014, the FT discloses. This was the subject of a shareholder complaint that was rejected by other investors in April -- and MPS suggested it was routine for prosecutors to probe the allegation, the FT notes. The investigation marks another chapter in MPS's travails, the FT states. Amid a dramatic decline in its share price this year, the oldest bank in the world has been under intense pressure to raise new capital in order to ensure its survival, particularly since it was the worst performer in Europe-wide bank stress test results published in late July, the FT relays. MPS has for now narrowly avoided a recapitalization by Italian taxpayers, which would have thrust it fully into the political spotlight, agreeing instead to a private rescue plan that will allow it to rid its balance sheet of its large portfolio of bad loans, the FT states. But the success of the plan still hinges on a EUR5 billion capital-raising exercise led by JPMorgan, which is due to be completed by the end of the year, so any loss of confidence in the company's management could hurt its chances, according to the FT. About Monte dei Paschi Banca Monte dei Paschi di Siena SpA -- http://www.mps.it/-- is an Italy-based company engaged in the banking sector. It provides traditional banking services, asset management and private banking, including life insurance, pension funds and investment trusts. In addition, it offers investment banking, including project finance, merchant banking and financial advisory services. The Company comprises more than 3,000 branches, and a structure of channels of distribution. Banca Monte dei Paschi di Siena Group has subsidiaries located throughout Italy, Europe, America, Asia and North Africa. It has numerous subsidiaries, including Mps Sim SpA, MPS Capital Services Banca per le Imprese SpA, MPS Banca Personale SpA, Banca Toscana SpA, Monte Paschi Ireland Ltd. and Banca MP Belgio SpA. ===================== N E T H E R L A N D S ===================== HERBERT PARK: S&P Affirms B Rating on Class E Notes --------------------------------------------------- S&P Global Ratings affirmed its credit ratings on Herbert Park B.V.'s class A-1, A-2, B, C, D, and E notes following review. The affirmations follow S&P's analysis of the transaction's performance and the application of its relevant criteria. S&P subjected the capital structure to our cash flow analysis to determine the break-even default rate (BDR) for each class of notes at each rating level. The BDRs represent S&P's estimate of the level of asset defaults that the notes can withstand and still fully pay interest and principal to the noteholders. S&P has estimated future defaults in the portfolio in each rating scenario by applying S&P's updated corporate collateralized debt obligation (CDO) criteria. S&P's analysis indicates that the available credit enhancement for all of the rated classes of notes is still commensurate with the currently assigned ratings. Therefore, S&P has affirmed its ratings on the class A-1 to E notes. Herbert Park is a cash flow collateralized loan obligation (CLO) transaction. A portfolio of loans to mainly speculative-grade corporates backs the transaction. RATINGS LIST Herbert Park B.V. EUR413.18 mil floating-rate and subordinated notes Rating Class Identifier To From A-1 42704GAA3 AAA (sf) AAA (sf) A-2 42704GAC9 AA (sf) AA (sf) B 42704GAE5 A (sf) A (sf) C 42704GAG0 BBB (sf) BBB (sf) D 42704GAJ4 BB (sf) BB (sf) E 42704GAL9 B (sf) B (sf) HOLLAND HOMES: Fitch Affirms 'BBsf' Rating on Class B Notes ----------------------------------------------------------- Fitch Ratings has downgraded Holland Homes Oranje MBS B.V.'s class A notes (ISIN XS0238851827) to 'A+sf' from 'AAsf'. The Outlook is Stable. The class S (ISIN XS0729849439) and class B (ISIN XS0238855141) notes have both been affirmed at 'BBB+sf' and 'BBsf' respectively, with Stable Outlooks. The Dutch RMBS transaction is backed by Nationale Hypotheek Garantie (NHG) residential mortgage loans originated by DBV Levensverzekeringsmaatschappij B.V. (DBV; part of SNS Bank N.V.; BBB+/Stable/F2). KEY RATING DRIVERS Counterparty Exposure The downgrade reflects the application of Fitch's revised Counterparty Criteria for Structured Finance and Covered Bonds 18 July 2016 regarding counterparty exposure. Under the latest criteria, the link between the senior notes' rating and the rating of the collection account, which for this transaction is ABN Amro (A+/Stable/F1), is only applicable up to the 'Asf' category. Under the old criteria, the rating of the senior notes was previously capped at three notches above ABN Amro, which was rated 'A' at the point of the last review. The structure continues to have insufficient liquidity to fully cover senior payment obligations in the event of a default of the servicer Stater Nederland (RPS1-), as highlighted in previous rating action commentaries (dated 29 January 2016 and 2 March 2016). Stable Asset Performance The transaction continues to exhibit stable asset performance, with only a marginal decline in late-stage arrears (loans that have been delinquent for over three months) of 0.02% over the last 12 months. It also continues to outperform the Fitch Netherlands All NHG Index which is currently at 0.23%, against the transaction's figure of 0.09%. RATING SENSITIVITIES The class S notes have low credit enhancement relative to other Dutch transactions with similar pool characteristics. Hence, this tranche is more sensitive to a change in asset performance and an increase in arrears and defaults, beyond Fitch's stresses, could have a negative impact on the ratings. Additional liquidity in the structure would likely address payment interruption risk and lead to a positive rating action. USE OF THIRD-PARTY DUE DILIGENCE PURSUANT TO RULE 17G-10 Form ABS Due Diligence-15E was not provided to, or reviewed by, Fitch in relation to this rating action. DATA ADEQUACY Fitch has checked the consistency and plausibility of the information it has received about the performance of the asset pool and the transaction. There were no findings that affected the rating analysis. Fitch has not reviewed the results of any third party assessment of the asset portfolio information or conducted a review of origination files as part of its ongoing monitoring. Fitch did not undertake a review of the information provided about the underlying asset pool ahead of the transaction's initial closing. The subsequent performance of the transaction over the years is consistent with the agency's expectations given the operating environment and Fitch is therefore satisfied that the asset pool information relied upon for its initial rating analysis was adequately reliable. Overall, Fitch's assessment of the information relied upon for the agency's rating analysis according to its applicable rating methodologies indicates that it is adequately reliable. SOURCES OF INFORMATION The information below was used in the analysis. -- Loan-by-loan data provided by SNS Bank as at July 1, 2016 -- Transaction reporting provided by Intertrust Management B.V. as at July 20, 2016 -- Discussions with the servicer dated August 17, 2016 MODELS The models below were used in the analysis. -- ResiEMEA -- EMEA RMBS Surveillance Model. -- EMEA Cash Flow Model. LAURELIN II: S&P Raises Rating on Class E Notes to BB+ ------------------------------------------------------ S&P Global Ratings raised its credit ratings on all classes of notes in Laurelin II B.V. The upgrades follow S&P's analysis of the transaction using data from the August 2016 trustee report, and the application of S&P's relevant criteria. S&P conducted its cash flow analysis to determine the break-even default rate (BDR) for each rated class of notes at each rating level. The BDR represents S&P's estimate of the maximum level of gross defaults, based on its stress assumptions, that a tranche can withstand and still fully repay the noteholders. S&P gave credit to an aggregate collateral amount of EUR195.6 million, down from EUR425 million at S&P's previous review, and used the reported weighted-average spread of 4.39%, and the weighted- average recovery rates calculated in accordance with S&P's riteria for corporate collateralized debt obligations (CDOs). S&P applied various cash flow stresses using our standard default patterns and timings for each rating category assumed for each class of notes, combined with different interest stresses as outlined in S&P's corporate CDO criteria. The portfolio's credit quality has improved since S&P's previous review. The proportion of assets that S&P considers to be defaulted has decreased to EUR5.6 million from EUR9.4 million, and the proportion of assets that we rate in the 'CCC' category ('CCC+', 'CCC', and 'CCC-') has also decreased to EUR9.3 million from EUR19.2 million. The issuer entered into options agreements with Barclays Bank PLC (A-/Negative/A-2). According to S&P's current counterparty criteria, in cases where the replacement language in the derivative agreements is in line with any of S&P's previous counterparty criteria, the maximum achievable rating on a tranche is equal to the counterparty's long-term issuer credit rating (ICR) plus one notch, unless S&P applies additional stresses in its cash flow analysis to capture that risk. Therefore, in S&P's cash flow analysis, it has tested additional scenarios by assuming that there are no options in the transaction for all classes of notes that have a rating higher than the counterparty's long-term ICR plus one notch, 'A (sf)'. The results of S&P's analysis indicate that the available credit enhancement for all classes of notes is commensurate with higher ratings than those currently assigned. S&P has therefore raised its ratings on all classes of notes in this transaction. Laurelin II is a multiple-currency cash flow CDO transaction, backed primarily by leveraged loans to speculative-grade corporate firms. The transaction closed on July 11, 2007, and is managed by GoldenTree Asset Management L.P. The reinvestment period ended in 2014. RATINGS LIST Class Rating To From Laurelin II B.V. EUR405 Million And GBP30.405 Million Secured Floating-Rate Notes Ratings Raised A-1E AAA (sf) AA+ (sf) A-1R AAA (sf) AA+ (sf) A-1S AAA (sf) AA+ (sf) A-2 AAA (sf) AA (sf) B-1 AAA (sf) A+ (sf) B-2 AAA (sf) A+ (sf) C AA+ (sf) A- (sf) D-1 A+ (sf) BBB- (sf) D-2 A+ (sf) BBB- (sf) E BB+ (sf) BB (sf) PANTHER CDO: Fitch Hikes Class C Notes Rating to 'BBsf' ------------------------------------------------------- Fitch Ratings has upgraded Panther CDO V B.V. notes, as follows: -- EUR99mClass A1 (ISIN XS0308593671): upgraded to 'AAsf' from 'A+sf'; Outlook stable -- EUR29.8mClass A2 (ISIN XS0308594059): upgraded to 'AAsf' from 'BBBsf'; Outlook stable -- EUR24.5m Class B (ISIN XS0308594489): upgraded to 'Asf' from 'BBsf'; Outlook stable -- EUR17.5m Class C (ISIN XS0308594729): upgraded to 'BBsf' from 'Bsf'; Outlook Stable -- EUR18m Class D (ISIN XS0308595296): affirmed at 'CCCsf' -- EUR4m Class E (ISIN XS0308595536): affirmed at 'CCCsf' Panther CDO V B.V. is a managed cash arbitrage securitisation of a diverse pool of assets, including high-yield bonds, asset- backed securities, senior loans, second lien loans and mezzanine loans. The portfolio is managed by M&G Investment Management Limited. KEY RATING DRIVERS The upgrades reflect increases in credit enhancement (CE) across the capital structure and broadly stable asset performance, which outweighs the loss incurred by the transaction over the last 12 months. The class A1 notes have amortised by EUR48.2m over the past year. This resulted in CE increasing in all rated notes, ranging from an increase of 9% to 52.8% for the class A notes to an increase of 0.12% to 8.12% for the class E notes. As of the review date, there is EUR23.9m collected in the principal account, which we expect to be distributed on the October payment date, thus further increasing CE on the class A1 notes by 5.7%. The portfolio is a combination of ABS assets and leveraged loans. The proportion of ABS assets has increased to 50.3% from 46.2% over the last 12 months and subsequently the leveraged loans exposure has decreased to 49.7% from 53.8%. Overall, the portfolio quality has slightly improved as Fitch calculates that the proportion of investment-grade assets has increased to 42.7% from 36.7% during the same period. The portfolio performance migration is also illustrated by the proportion of upgrades (13.1% of the portfolio) versus downgrades (2.9%) over the same period period. The exposure to Europe's periphery (Italy, Spain, Poland and Portugal) has fallen marginally to 19.3% from 19.6%. Two defaulted assets were sold with a total principal amount of EUR4.7m, resulting in a EUR3.8m realised loss. However, there are two new defaults over the year with a total principal amount of EUR4.9m. As a result, defaulted assets have increased to EUR13.2m from EUR13m. The 'CCC' or below rated assets are unchanged at 6.7%. The portfolio remains diversified despite the top obligor exposure having increased to 4% from 2.9% and top 10 obligor exposures to 31.6% from 23.7%. The portfolio is distributed across 14 countries and 19 industries with the largest country and industry at 38% and 6.8%, respectively. Fixed-rate assets decreased to 2.3% from 6.9% after the transaction's macro interest rate swap expired on October 2015 payment date. RATING SENSITIVITIES Fitch found that reducing the recovery rate or increasing the default rate by 25% each would not have any impact on the ratings of the notes. DUE DILIGENCE USAGE No third party due diligence was provided or reviewed in relation to this rating action. DATA ADEQUACY Fitch has checked the consistency and plausibility of the information it has received about the performance of the asset pool and the transaction. There were no findings that were material to this analysis. Fitch has not reviewed the results of any third party assessment of the asset portfolio information or conducted a review of origination files as part of its ongoing monitoring. The majority of the underlying assets have ratings or credit opinions from Fitch and/or other Nationally Recognised Statistical Rating Organisations and/or European Securities and Markets Authority registered rating agencies. Fitch has relied on the practices of the relevant Fitch groups and/or other rating agencies to assess the asset portfolio information. Overall, Fitch's assessment of the information relied upon for the agency's rating analysis according to its applicable rating methodologies indicates that it is adequately reliable. SOURCES OF INFORMATION The information below was used in the analysis. -- Investor report as of 29 July 2016 provided by The Bank of New York Mellon -- Loan-by-loan data as of 29 July 2016 provided by The Bank of New York Mellon =========== R U S S I A =========== SOGAZ OJSC: S&P Revises Outlook to Positive & Affirms BB+ Ratings ----------------------------------------------------------------- S&P Global Ratings revised its outlook on Russia-based insurance company OJSC SOGAZ to positive from stable. At the same time, S&P affirmed its 'BB+' long-term insurer financial strength and counterparty credit ratings and 'ruAA+' Russia national scale rating on the company. The outlook revision stems from S&P's view that SOGAZ is a clear outperformer against peers. At the same time, S&P considers that its profitable corporate-focused business is somewhat insulated from the poorly performing Russian non-life market, where retail motor business dominates. Based on S&P's measures, SOGAZ's capital adequacy has improved to extremely strong from very strong, following internal capital generation and lower asset-risk charges stemming from reduced investments in equities and property. S&P expects that SOGAZ's earnings stream will remain stable in 2016 under S&P's base-case scenario, with net income exceeding Russian ruble (RUB) 17.8 billion (about $270 million) in 2016 and RUB19 billion (almost $300 million) in 2017. S&P believes that internal capital generation and modest dividend demands from SOGAZ's shareholders will enable it to maintain extremely strong capital adequacy. "We assess SOGAZ's risk position as moderate. The company diversified its portfolio of investments in 2015 toward government-related banks and banks we consider to be highly systemically important. We exclude such institutions from our portfolio diversification calculations, prompting reduced concentrations, over the past year, for SOGAZ by sector to 20% from 35% and by obligor to 6% from 8%," S&P said. S&P's weighted average of SOGAZ's assets is still in the 'BB' range, however. As a result, S&P assess the asset quality of its investment portfolio as less than adequate. This is the key constraint on S&P's assessment of SOGAZ's financial risk profile. The positive outlook on SOGAZ reflects S&P's view that it will likely maintain its strong competitive position in the Russian insurance market, its extremely strong capital adequacy, and at least less-than-adequate investment quality over the next 12-18 months. S&P also thinks the company will continue to benefit from its strong ties with Russian vertically integrated gas company Gazprom. S&P could consider raising the ratings if it sees SOGAZ maintaining its better-than-peer and Russian market operating performance, extremely strong capital adequacy, and at least less-than-adequate investment quality. S&P would likely lower the ratings on SOGAZ over the next 12-18 months if S&P lowered its local currency sovereign credit rating on Russia by two notches. If SOGAZ's average credit quality deteriorates to weak from less- than-adequate, S&P could also consider a negative rating action. ============================= S L O V A K R E P U B L I C ============================= RETAIL VALUE: Creditors' Committee Approves Restructuring Plan -------------------------------------------------------------- The Slovak Spectator reports that most of the creditors of the company Retail Value Stores, which operates retailer Carrefour, will not see their debts fully repaid after the creditors' committee approved the restructuring plan for the company acknowledging only 3% of the debts' value. The plan was approved by three members of the committee, while two were against it, The Slovak Spectator discloses. According to The Slovak Spectator, Ladislav Barat, restructuring administrator of Retail Value Stores, as quoted by the TASR newswire, said, "The restructuring proceeding continues; the voting ended with absolute majority voting for approval of the plan, which means three to two votes." TASR said some 400 creditors of Retail Value Stores should meet at the so-called approval meeting that is scheduled to take place in 30 days, The Slovak Spectator relates. Mr. Barat said unlike the original plan, the restructuring plan contains one additional condition, claiming that the current shareholders of the debtor who own 80% stock, want to distance themselves from any lapses of the company, The Slovak Spectator notes. =========================== U N I T E D K I N G D O M =========================== ECO-BAT TECHNOLOGIES: Moody's Withdraws B2 Corp. Family Rating -------------------------------------------------------------- Moody's Investors Service has withdrawn Eco-Bat Technologies Limited's Corporate Family Rating of B2, Probability of Default Rating (PDR) of B2-PD and negative outlook. Eco-Bat Finance plc's rating of EUR300 million Senior Unsecured Notes due 2017 was withdrawn upon repayment on Aug. 15, 2016. RATINGS RATIONALE Eco-Bat Technologies Limited ratings have been withdrawn because: following the repayment of the previously rated senior unsecured notes, the restricted group upon which the credit ratings were based no longer applies. Moody's believes that it has insufficient or otherwise inadequate information regarding Eco- Bat Technologies' parent company, EB Holding II, to monitor the wider group and support the maintenance of the ratings. Moody's has withdrawn the rating because it believes it has insufficient or otherwise inadequate information to support the maintenance of the rating. MASCOTT CONSTRUCTION: In Administration, 30 Jobs Affected --------------------------------------------------------- Margaret Canning at Belfast Telegraph reports that up to 30 jobs have been lost after Mascott Construction Ltd. went into administration. Administrators were appointed this month to the company in Belfast, which worked on high-profile contracts including the MAC Theatre, Belfast Telegraph discloses. Staff were let go after the company was found to be unfit to keep trading, Belfast Telegraph relays. According to Belfast Telegraph, a spokeswoman for business advisors EY said its restructuring specialists Charlie Dolliver and Luke Charleton -- luke.charleton@ie.ey.com -- had been appointed administrators. But since the administrators were appointed on Aug. 10, Gareth Loye, the chief executive of M&M Contractors, has established a new company, Mascott Construction (Europe) Ltd, suggesting that the business's name or assets could be revived under new ownership, Belfast Telegraph notes. Mascott Construction was set up in 1998. WILLIAM ANELAY: May Enter Administration if CVA Proposal Fails -------------------------------------------------------------- Building Design & Construction reports that William Anelay is set to enter administration unless it can secure a deal with its creditors. The company has a GBP38 million turnover and has proposed a company voluntary arrangement that will see it pay creditors a percentage of every pound owed, BDC discloses. According to BDC, unless the deal is accepted by 75% of creditors, the business has revealed that it will face administration and its 190 staff members could lose their jobs. Credit agent Top Service says that William Anelay owes 22 firms GBP200,000 in total, with five of the creditors issuing debt recovery orders with the agency, BDC relays. The company, as cited by BDC, said that it came into financial problems after a period of expansion which saw it take on projects outside its traditional work scope. During this period, the firm took on a number of problem contracts and revealed that it was unable to pay suppliers, BDC notes. The company has secured a GBP33 million workload, with GBP9 million worth of projects being considered for the end of the current financial year, BDC states. William Anelay is a York-based specialist contractor firm. The company has been in operation since 1747. ********* 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, Julie Anne L. Toledo, 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. * * * End of Transmission * * *