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

                           E U R O P E

          Friday, September 23, 2016, Vol. 17, No. 189


                            Headlines


G E R M A N Y

KUKA AG: Moody's Raises CFR to Ba1 & Changes Outlook to Stable
SCOUT24 AG: Moody's Hikes Corporate Family Rating to Ba3


H U N G A R Y

PALOC NAGYKERESKEDELMI: Files for Bankruptcy, Franchise Canceled


I T A L Y

MONTE DEI PASCHI: Investors Worry Over EUR5-Bil. Recapitalization


L U X E M B O U R G

PERTENTO SARL: Moody's Affirms B2 Corporate Family Rating


N E T H E R L A N D S

AI ALABAMA: Moody's Lowers CFR to B3, Outlook Stable
AI ALABAMA: S&P Revises Outlook to Negative & Affirms 'B' CCR
ALCOA NEDERLAND: Moody's Assigns Ba3 CFR, Outlook Stable


R O M A N I A

ELCEN: To File for Insolvency Amid RADET Heat Supply Dispute
RADET: Files for Insolvency Amid ELCEN Row on Overdue Payments


R U S S I A

FINPROMBANK: Moody's Lowers Long-Term Deposit Ratings to C
PROMSVYAZBANK: S&P Affirms 'BB-/B' Counterparty Credit Ratings
RAIFFEISEN BANK: Moody's Changes Ba1 Rating Outlook to Positive
TINKOFF BANK: Moody's Changes Outlook on B2 Ratings to Positive
VOZROZHDENIE BANK: S&P Affirms BB-/B Counterparty Credit Ratings

* S&P Revises Outlooks on 11 Russia-Related Finc'l Institutions
* S&P Takes Various Rating Actions on Russian Corporations


S W I T Z E R L A N D

PETROPLUS MARKETING: Sept. 26 Distribution List Appeals Deadline


U N I T E D   K I N G D O M

FAB UK 2004-1: S&P Lowers Rating on Class BE Notes to CC
GULF KEYSTONE: Lenders Back Proposed Restructuring
JERROLD HOLDINGS: S&P Puts 'BB-' Rating on CreditWatch Negative
MARKETPLACE ORIGINATED 2016-1: Moody's Rates Cl. D Notes (P)Ba3
SEAPETS: Goes Into Administration


X X X X X X X X

* EUROPE: Biggest Banks Need to Set Aside Funds Twice ECB Capital
* BOOK REVIEW: The First Junk Bond


                            *********



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G E R M A N Y
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KUKA AG: Moody's Raises CFR to Ba1 & Changes Outlook to Stable
--------------------------------------------------------------
Moody's Investors Service has upgraded KUKA AG's corporate family
rating to Ba1 from Ba2, as well as its probability of default
rating (PDR) to Ba1-PD from Ba2-PD.  Concurrently, Moody's has
changed the outlook on the ratings to stable from positive.

                         RATINGS RATIONALE

The rating action primarily reflects KUKA building a further track
record of maintaining a conservative balance sheet, as exhibited
by KUKA's debt/EBITDA, as adjusted by Moody's, staying at or below
2.0x.  In combination with the relatively high cash balance this
provides for a sufficient cushion of the capital structure to
weather a potential downturn in its end markets.  In addition, the
rating action reflects KUKA's business profile, which has improved
considerably over the past couple of years by KUKA diversifying
away from its core customer industry, the auto sector, into other
general industries.

Moody's expects KUKA's financial policy to remain conservative,
even if Midea Group Co., Ltd. (A3 stable), who in May this year
made a tender offer that was accepted by a vast majority of KUKA's
current shareholders, becomes its anchor shareholder.  Moody's
understands that Midea, inter alia, has provided commitments (i)
not to cause KUKA to relocate or change any location of the
current KUKA Group sites, (ii) not to initiate any changes
relating to KUKA's workforce at KUKA's locations, (iii) to support
KUKA in its existing strategy (in particular with regards to R&D
expansion), (iv) to maintain the Executive Board's independence,
(v) not to cause KUKA to grant Midea access to any business
partner data and (vi) not to pursue a domination agreement or
delisting.

Even though at this point KUKA's CFR does not incorporate any
support from its prospective shareholder, the rating agency views
the Midea offer to be credit positive, because it would cement
KUKA's strategic position in China and also support its strategy
to diversify beyond the supply of robotics to the automotive
sector by increasing its exposure to the faster growing general
industry segment.  Additionally, Midea's higher rating, the
majority ownership and the strategic rationale of the transaction
for Midea could lead to some positive rating pressure for KUKA
once the transaction has successfully closed.

KUKA continues to grow at a fast pace.  In the second quarter its
order intake was the highest in the company's history, being 29%
up year-on-year at group level, with a book-to-bill ratio of
almost 1.3x.  This, together with a healthy order backlog of
EUR1.9 billion at group level, provides a good basis for sustained
revenue growth in the next months to come.  Even though KUKA's
profitability has decreased somewhat year-on-year due to mix
skewed towards generally lower-margin automotive business, as well
as higher R&D investments, Moody's believes that this development
is only temporary and that higher R&D spendings will benefit
future profitability.  Moody's also expects that KUKA will return
to a positive free cash flow generation in the next 12-18 months,
which is now burdened by high working capital outflow.  However,
the healthy levels of free cash flow seen between 2012-2014 are
unlikely to be repeated, given the potentially further increasing
investments into R&D and capex.  A return to a sustained material
positive free cash flow generation is one of the key
considerations for KUKA moving into investment grade rating.

                   RATIONALE FOR A STABLE OUTLOOK

The stable outlook reflects Moody's expectation that KUKA will
retain its conservative capital structure with Moody's adjusted
debt/EBITDA at around 2.0x and return to a positive free cash flow
generation in the next 12-18 months.

                WHAT COULD CHANGE THE RATINGS UP/DOWN

The rating agency could upgrade KUKA's ratings, if KUKA is able to
maintain debt/EBITDA, as adjusted by Moody's at around 2.0x even
in adverse economic environment, while further diversifying its
end markets exposure.  An upgrade would also require return to a
sustainable material positive free cash flow generation and
improvement of profitability to at least 7% Moody's adjusted EBITA
margin.  A successful closure of the Midea takeover, in
combination with the maintenance of the current capital structure
and profitability, could also put KUKA's rating under positive
pressure.

Moody's could downgrade KUKA's ratings if (1) there is an evidence
of more aggressive financial policies, as exhibited by Moody's
debt/EBITDA sustainably above 2.5x, (2) free cash flow remains
negative for a prolonged period of time; (3) its liquidity
deteriorates.

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


SCOUT24 AG: Moody's Hikes Corporate Family Rating to Ba3
--------------------------------------------------------
Moody's Investors Service upgraded the corporate family rating
(CFR) of Scout24 AG to Ba3 from B1 and its probability of default
rating (PDR) to Ba3-PD from B2-PD.

Concurrently Moody's has upgraded to Ba3 from B1 the ratings on
the EUR595 million senior secured Term Loan B (TLB) due 2021,
EUR400 million senior secured Term Loan C (TLC) due 2022 and the
EUR45.6 million senior secured Revolving Credit Facility (RCF) due
2020 assigned at Scout24 AG. The outlook on all ratings is stable.

Moody's decision to upgrade Scout24's CFR to Ba3 reflects the
consistent deleveraging trajectory on the back of improving
performance and voluntary debt repayments -- EUR40 million in June
2016 and EUR60 million in September 2016 -- in line with the
company's strategy to reduce reported net leverage to 2.5x. At the
end of June 2016, the company reported Net Leverage of 3.4x.

The upgrade also reflects the ongoing market leading position and
the growth in ARPU achieved during the first six months of 2016
across its two vertical platform: IS24 (German real estate
platform) and AS24 (European auto platform).

RATINGS RATIONALE

Moody's recognizes the improving Scout24's financial metrics since
the IPO in October 2015. As of June 2016, the company's Moody's
adjusted leverage has reduced to 3.5x from 4.5x post-IPO.

During H1 2016, IS24 has been able to offset higher than expected
agents churn rates, 1,800 net loss in core agents compared to
total agents at the end of June 2015, with solid ARPU increase on
the back of a new pricing plan. The company estimates that
approximately 40% of net churn was caused by customers going out
of business. Moody's expects that churn level, excluding impact
from customers going out of business, will reduce by the beginning
of 2017 once the company finalizes its transition to a membership-
based pricing strategy at the end of 2016. As of June 2016, the
company reported that 82% of membership migration was completed.

An ongoing focus on enhancing customers' experience coupled with
efforts to increase products upselling opportunities while
maintaining and growing the core base of agents and dealers should
provide revenue and EBITDA growth for the next 12-18 months.

Moody's notes the positive free cash flow generation supported by
the high company's profitability, company's adjusted EBITDA margin
above 50%, and limited capex, around 5% of revenue. The company
may continue to use excess cash flow to further reduce debt until
its target net leverage of 2.5x is reached. Moody's expects that
the company will balance shareholders' remuneration with the need
to invest in order to continue to consolidate its market
positioning and grow its business.

Scout24 AG's Ba3 corporate family rating (CFR) takes into account
(1) Scout24's market leading position; (2) high level of recurring
subscription-based revenues and track record of solid and
consistent growth over the past years; (3) ARPU growth across
platforms; (4) the positive free cash flow generation; and (5) the
consistent deleveraging in line with the stated financial policy
of achieving a target net leverage of 2.5x.

The CFR also reflects (1) the company's modest size compared with
the universe of rated Business & Consumer Services peers; (2) the
high concentration around two verticals with meaningful exposure
to the German real estate sector; (3) the embedded threat of
disruptive new models or increase in competition from established
digital players; and (4) the uncertainty surrounding the shift of
IS24 to a membership-based pricing which has increased agents
churn rates in H1 2016.

RATIONALE FOR STABLE OUTLOOK

The stable outlook reflects Moody's expectation that Scout24 will
be able to maintain its leading positions in its core markets and
continues to improve its ARPU. The outlook also incorporates
Moody's assumption that the Group will continue to reduce its
leverage through EBITDA growth and will not embark on any
transforming acquisitions or adopt a more aggressive financial
policy with regard to shareholder distributions.

WHAT COULD CHANGE THE RATING - UP

Scout24's modest size and the high concentration around two
verticals with meaningful exposure to the German real estate
sector limit the likelihood of a rating upgrade. Moody's said,
"However, if the scale and the business diversification improve
over time combined with a solid track record, we would consider an
upgrade if (i) revenues continue to grow steadily and EBITDA
margins improve on a sustained basis"; (ii) Moody's adjusted debt/
EBITDA reduces below 2.5x on a sustained basis; and (iii) Moody's
adjusted Free Cash Flow/debt is maintained at around 20%.

WHAT COULD CHANGE THE RATING - DOWN

Conversely, downward ratings pressure could develop if (i)
Scout24's competitive profile weakens with material decline in its
leading positions in its core markets; (ii) loss of agents
continues beyond 2016 threatening IS24's revenue and
profitability; (iii) Moody's adjusted debt/ EBITDA increases above
4.0x; or (iv) the liquidity profile significantly weakens.

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Business and
Consumer Service Industry published in December 2014.

Scout24 AG (Scout24; formerly known as Asa Newco GmbH) is the
parent company of Scout24 Holding GmbH, a leading online
classifieds platform dedicated to the real estate and the
automotive sectors in Germany and other European countries.
Scout24 operates via two brands: ImmobilenScout24 (IS24), the
market leading online real estate classifieds portal in Germany,
and AutoScout24 (AS24), an online car and motorbike classifieds
platform with market leading positions in Italy, Belgium and the
Netherlands, and number 2 position in Germany. AS24 also operates
in Austria, Spain and France and offers local language versions in
11 additional countries. The company is listed on the Frankfurt
Stock Exchange with public free float of 42.9%. The market
capitalization at the end of August 2016 was EUR3.6 billion. For
the last twelve months to June 2016, the company reported revenue
of EUR420 million and EBITDA of EUR203 million.



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H U N G A R Y
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PALOC NAGYKERESKEDELMI: Files for Bankruptcy, Franchise Canceled
----------------------------------------------------------------
Budapest Business Journal reports that Hungarian retail store
operator Paloc Nagykereskedelmi voluntarily filed for bankruptcy
at a local court in Balassagyarmat on Sept. 20.

Paloc announced last week that Hungarian-owned retail chain CBA
had canceled its franchise contract for all its 80 stores, BBJ
relates.  Last week, the company had said its stores would reopen
this week, BBJ notes.

The Balassagyarmat court's press secretary Jozsef Soos said the
company is now under a temporary payment moratorium, and if the
court accepts the company's filing, a trustee will be appointed to
manage it, BBJ relays, citing Hungarian news agency MTI.
According to BBJ, Mr. Soos said several creditors of the company
have also asked for its liquidation.

Last week, CBA charged the franchise partner with failing to
fulfill its contractual obligations, and therefore removed it from
the franchise network and prohibited it from using marketing
elements and logos of CBA, BBJ recounts.

Jozsef Czekman, the managing director of Paloc Nagykereskedelmi,
which employs about 1,300 people in Nograd County, confirmed
reports about the closing of stores, adding that after assessment
of inventories, all the stores would reopen this week, BBJ
relates.  He added that potential buyers had already expressed
interest in the stores, BBJ relays, citing MTI.

Hungarian news agency MTI reported on Sept. 20 that the company
has been loss-making in the last three years and some of its
stores have had problems with inventories and supply management in
recent weeks, BBJ notes.



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I T A L Y
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MONTE DEI PASCHI: Investors Worry Over EUR5-Bil. Recapitalization
-----------------------------------------------------------------
Rachel Sanderson and Martin Arnold at The Financial Times report
that there's a growing investor concern that the world's oldest
bank will be unable to pull off a EUR5 billion recapitalization
and EUR30 billion bad loan disposal demanded by regulators.

According to the FT, the increasing possibility that Monte Paschi
will have to be bailed-in under new EU rules comes as worries
mount over the political and financial stability of the eurozone's
third-largest economy, which will this autumn hold a referendum on
constitutional reform.

Political analysts consider the referendum, which is due in late
November or early December, to be a major political risk to Europe
as it threatens to unseat Italy's reformist prime minister Matteo
Renzi and bring anti-euro populist party Five Star Movement to
power, the FT discloses.

Despite the efforts of bankers and the Italian government to keep
the events separate, the referendum and Monte Paschi's woes have
entered a "doom loop" which threatens to undermine both events,
say senior bankers, the FT notes.

Mr. Renzi had pushed for a market solution to dispose of about
EUR30 billion in Monte Paschi gross bad loans and raise EUR5
billion in capital rather than face a bail-in of the bank, which
would hit retail investors and savers, the FT recounts.

Yet against the backdrop of the referendum, senior bankers who are
part of the JPMorgan-led consortium providing a soft underwriting
for the mooted deal admit it is tough to find EUR5 billion in new
capital for a bank which emerged the worst loser from July's
European bank stress tests, the FT states.

Bank of America Merrill Lynch analysts said in a research note
this week that investor concerns are focused on whether a EUR5
billion capital increase for a bank with a market value of EUR550
million, as of close on trading on Sept. 20, "is even possible",
the FT relates.

Bankers admit JPMorgan, which risks embarrassment if it fails to
pull off a deal, is working on an alternative recapitalization,
the FT relays.  They are seeking an anchor investor, potentially
from a sovereign wealth fund or private equity, and to swap Monte
Paschi's subordinated debt held by institutional investors for
equity, say senior bankers, according to the FT.

JPMorgan has also pledged a bridge loan of an unspecified size to
prop up the bank's capital when it disposes of its bad loans and
before it raises the fresh funding in the market, the FT states.

A failure of Monte Paschi's recapitalization has wider
implications for the Italian banking sector which is straining
under EUR360 billion of soured loans, of which EUR200 billion are
classed as non-performing, the FT notes.

                     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.



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L U X E M B O U R G
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PERTENTO SARL: Moody's Affirms B2 Corporate Family Rating
---------------------------------------------------------
Moody's Investors Service affirmed the B2 Corporate Family Rating
("CFR") and B2-PDR Probability of Default Rating ("PDR") assigned
to Pertento S.a.r.l. ("Pertento"), the parent and 100% owner of
Ufinet Telecom Holding S.L.U. ("Ufinet"), a carrier-neutral
telecommunications provider focusing on fiber infrastructure and
transmission services in Spain and Latin America. Concurrently,
Moody's has also affirmed the B2 ratings on Ufinet's EUR419
million Senior Secured Term Loan B Credit Facility due 2021 ("TL
B"), guaranteed by Pertento, and on Ufinet's EUR30 million
Revolving Credit Facility due 2020. The outlook on all ratings
remains stable.

These rating actions follow Ufinet's announcement that it is
upsizing the Term Loan B facility to EUR419 million from EUR295
million and utilizing between EUR11 and EUR17 million of own cash
in order to pay a dividend to the company's financial sponsor,
private equity firm Cinven, along with the associated transaction
fees and expenses.

RATINGS RATIONALE

The B2 ratings on the Term Loan B and the RCF reflect the security
package these instruments benefit from as well as their first
priority ranking in the company's capital structure alongside
other secured liabilities such as trade payables. The senior
secured facilities are guaranteed by a group of guarantor
subsidiaries representing no less than 80% of Ufinet's assets and
EBITDA generation.

Pertento's B2 CFR reflects: (1) the moderately high leverage
(Gross debt/EBITDA as adjusted by Moody's) of 5.1x (or 6.2x Gross
debt/Cash EBITDA) at the transaction's closing with moderate
deleveraging over the ensuing two years; (2) its exposure to Latin
American markets where the creation of a regulatory framework
brings uncertainty to future market practices; (3) a moderate
amount of customer revenue concentration -- Ufinet's top 10
clients represent around 62% of LTM 2016 revenues; and (4) the
limited track record of the company as a standalone business.

The B2 CFR also reflects (1) the significant visibility over cash
revenues with contracted backlog of EUR848 million, supported by
the long term nature of the contracts the company enters in with
its customers and the long dated and staggered nature of the
expiry of these contracts; (2) the low capital expenditure
requirements, with maintenance capex levels particularly low, as
network expansions are driven by client requirements and with
backbone extensions largely funded by irrevocable rights of use
(IRU) upfront payments; (3) the high profitability of the business
relative to its sector peers; (4) Ufinet's prudent approach to M&A
which is largely focused on bolt-on acquisitions in Latin America;
and (5) the strong fiber network of the company which offers metro
connectivity in a number of cities, including Barcelona and
Madrid, as well as long-haul connectivity across its countries of
operations.

Thus far in 2016, 88% of the company's revenues came from dark
fiber and lit fiber services and are based on long term contracts
(usually more than 10 years for dark fiber and 1-5 years for lit
fiber) providing the company with good visibility on future
revenues. These contracts do not include any early termination or
change of control clauses.

Ufinet's revenues are modestly concentrated on the company's top
10 customers who, at 2016 LTM, generated 62% of Ufinet's revenues.
This is mitigated by the above mentioned contractual terms as well
as the high cost for customers to switch providers. Moody's said,
"We also note the strong credit quality of Ufinet's customer base
with the majority of revenues being derived from large
infrastructure players and telecom operators."

The company expects to derive the bulk of its future growth from
expanding its network in Latin America where it operates in Panama
(17% of 2016 LTM revenues), Colombia (13%), Guatemala (10%), Costa
Rica (8%) and other LatAm (7% total incl. smaller operations in
neighboring countries). Half of the EBITDA and nearly half of 2016
LTM (to August 2016) EBITDA minus maintenance Capex is generated
in Latin America. In that same region, Ufinet's network overlaps
with a number of local players' own networks. The company benefits
from being the only pure carrier neutral provider, which increases
potential demand for its dark fiber offering from telecom
operators. The company also expects its lit fiber offering in
Latin America to drive strong top line growth driven by strong
demand for capacity from international carriers and for metro
Ethernet services from carriers and ISPs.

Ufinet has an adequate liquidity profile supported by the EUR30
million RCF which is undrawn and expected to remain undrawn in the
coming 12 months as the company generates positive free cash flow.
Liquidity is constrained in the short term by a low amount of cash
left on balance sheet post transaction (estimated to be around
EUR7-10 million) following the announced dividend recapitalization
transaction.

There is no scheduled amortization on the Term Loan B but a cash
sweep will be in place depending on the level of leverage carried
by the company. Moody's forecast that this cash sweep will be
minimal and will not bear a material impact on the company's
leverage in the coming two years. The RCF has a springing leverage
covenant should more than 30% of it be drawn although this is set
at 7.5x, which is a level disproportionately high compared to the
company's opening and forecast leverage.

RATIONALE FOR STABLE OUTLOOK

The stable outlook reflects the company's stable revenue streams
on the back of long-term contracts as well as the positive
underlying drivers for fiber services demand coming from the
increase in data consumption.

WHAT COULD CHANGE THE RATING DOWN / UP

Negative ratings pressure could develop if Ufinet's leverage
(measured as Moody's adjusted gross debt to EBITDA, without
adjusting for IRUs) increases sustainably above 5.25x or Moody's
adjusted Free Cash Flow to gross debt falls below 5%. Downward
pressure would also ensue should the company engage in
transformational M&A resulting in a material dilution of its high
EBITDA margin or a weaker business profile.

Positive pressure on the rating could develop if Ufinet's leverage
(measured as Moody's adjusted gross debt to EBITDA, without
adjusting for IRUs) decreases sustainably below 4.25x or Moody's
adjusted Free Cash Flow to gross debt exceeds 10%. An upgrade
would also require the company to continue building track record
as a standalone entity and succeed in growing revenues in its Lit
Fiber business and in the Latin American region.

LIST OF AFFECTED RATINGS

Affirmations:

   Issuer: Pertento S.a.r.l.

   -- LT Corporate Family Rating, Affirmed B2

   -- Probability of Default Rating, Affirmed B2-PD

   Issuer: Ufinet Telecom Holding S.L.U.

   -- Backed Senior Secured Bank Credit Facilities, Affirmed B2

Outlook Actions:

   Issuer: Pertento S.a.r.l.

   -- Outlook, Remains Stable

   Issuer: Ufinet Telecom Holding S.L.U.

   -- Outlook, Remains Stable

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Global
Communications Infrastructure Rating Methodology published in June
2011.

Ufinet is a carrier-neutral telecommunications provider with
businesses in both Spain and seven Latin American countries
(Colombia, Panama, Guatemala, Costa Rica, Nicaragua, El Salvador,
Honduras) offering leased infrastructure (dark fiber),
transmission services (lit fiber) and satellite services using its
proprietary fiber optic network spanning around 50,000 kilometers.
The company was formed in 2009 following the merger of the telecom
subsidiaries of Spanish utilities Gas Natural and Union Fenosa. In
2014, Cinven acquired Ufinet, in a carve-out transaction estimated
at a total of EUR525 million including an equity contribution of
around EUR230 million, from its then owner Gas Natural Fenosa
Finance B.V. (Baa2 Stable).



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N E T H E R L A N D S
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AI ALABAMA: Moody's Lowers CFR to B3, Outlook Stable
----------------------------------------------------
Moody's Investors Service has downgraded to B3 from B2 the
corporate family rating and to B3-PD from B2-PD the probability of
default rating (PDR) of AI Alabama Midco B.V., the ultimate
holding company of Ammeraal Beltech Holding B.V.

Concurrently, Moody's has downgraded the senior secured ratings of
the 7-year EUR290 million 1st Lien Term loan and the 6-year EUR40
million Revolving Credit Facility (RCF) borrowed at AI Alabama
B.V. to B2 (LGD3) from B1 (LGD3).  The senior secured rating of
the 8-year EUR60 million 2nd Lien Term Loan of AI Alabama B.V. has
been downgraded to Caa2 (LGD 6) from Caa1 (LGD 5).  The outlook on
all ratings is stable.

                        RATINGS RATIONALE

The downgrade of Ammeraal's ratings is due to the company's higher
than expected leverage and more aggressive financial policy than
previously assumed.  This follows the company's decision to raise
debt by around EUR85 million in order to make an exceptional
dividend payment of around EUR94 million and our expectation that
gross adjusted debt/EBITDA will now remain in excess of 6.0x until
the end of 2017 -- gross leverage was around 6.5x as at end-2015
and we forecast will be in excess of 7.5x following the further
debt raise.  The debt raise takes advantage of the low interest
rate environment, but this does not show a commitment to the
deleveraging of its balance sheet following Advent's material
debt-funded acquisition of Ammeraal 15 months ago.

Moody's believes a track record of deleveraging is important given
the company's loans do not amortize and there is capacity to
increase leverage (or maintain leverage at high levels) as a
result of the loosely set leverage tests in the company's credit
facilities.  These are considered positive to the extent that this
provides the company with flexibility to draw down further on the
RCF to support liquidity needs, however, also provides headroom
for the company to raise up to EUR50m of permitted indebtedness.

Deleveraging by end-2017 is highly dependent on reduced one-off
costs as well as the realization of cost savings from measures
introduced over the last year.  These are significant in the
context of current EBITDA.  In 2017 the company expects one-off
costs to decrease to around EUR2 million from around EUR9million
(EUR7million reflects c.17% of 2015 reported EBITDA of around
EUR40 million) and for cost savings to be around EUR6million
(around 15% of 2015 reported EBITDA).  Moody's expects underlying
EBITDA growth to be modest in comparison.  Moody's has only
partially included reduced one-off costs and increased efficiency
savings in our forecasts because one-off costs in 2015 and
forecast for 2016 are significantly higher than Moody's
anticipated.

Nevertheless, Moody's recognizes the measures Ammeraal's
restructuring and operational excellence program "Project Blue"
has focused on, which gives us some confidence that there will be
some EBITDA improvement in 2017 compared with 2016.  One-off costs
relate primarily to consulting costs and personnel redundancy
costs, while the majority of efficiency savings relate to
procurement savings from renegotiated contracts with suppliers.
Moody's also understands that the costs associated with
implementing Project Blue are nearing full execution.

In addition, in April 2016, the company further consolidated its
operations through the acquisition of Rydell Industrial (belting)
Co. (unrated), an Australian distributor for EUR14.5 million with
EBITDA of around EUR1.6 million.  In combination with the proposed
dividend payment this has further reduced liquidity headroom.
Indeed, additional acquisitions, particularly if of a similar
size, would allow the company to further consolidate market
shares, accelerate its growth plans and be EBITDA-enhancing, but
they may also have negative impacts on working capital and/or
could lead to more short-term restructuring costs, which may
further reduce liquidity headroom or limit future leverage
reduction.  Cash on balance sheet, proforma the additional EUR85
million debt increase, is forecast to be around EUR5 million,
while there is only EUR24million remaining under its EUR40 million
RCF.

Nevertheless, the rating continues to reflect the company's good
and defensive niche market positions in the relatively fragmented
light-belt industry, which we believe is evidenced by the
company's relatively good margins compared with similarly-rated
peers.  Ammeraal is exposed to cyclicality as witnessed by the
sharp decline in earnings in the downturn of 2008/09.  At the same
time Ammeraal's integrated business model (manufacture and
fabrication), product quality, innovation and good customer
relationships, have ensured a large proportion of recurring
revenues, which have otherwise afforded the company with a greater
degree of earnings stability and a relatively swift recovery
following the downturn.

The rating also reflects still good future demand fundamentals of
the light weight belting product industry, which Moody's considers
will support interest cover and positive free cash flow
generation.  Moody's forecasts that over the next 18-24 months
FCF/debt will increase towards 5%, while interest cover will
improve towards 2.5x.  However, this assumes that compared with
2016 one-off costs reduce, efficiency savings are realised and the
company refrains from making additional dividend payments and/or
material debt-funded acquisitions.

                            LIQUIDITY

Liquidity is expected to weaken following the proposed dividend
payment of EUR95 million in Q3-16.  Cash on balance sheet is
forecast to be around EUR5 million, while there is only
EUR24 million remaining under its EUR40 million RCF.  This
compares to around EUR15 million in cash and EUR38.6 million of
unused committed drawings under its RCF as at Dec. 31, 2015.  The
loosely-set covenants per the senior facilities documentation are
considered positive to the extent that this provides the company
with flexibility to raise additional debt in support of liquidity
needs.

Nevertheless, liquidity remains adequate to manage working capital
requirements, capex and meet short-term liabilities of around
EUR1-2 million, which reflect the deferred acquisition payment
relating to its acquisition of the remaining stake in unichains
Italy in January 2014.  However, Moody's considers the adequacy of
liquidity to be highly dependent on the company's material
increase in EBITDA and consequent generation of positive FCF.
Again, we would expect the company to refrain from further
dividend payments and material acquisitions.

                     STRUCTURAL CONSIDERATIONS

The B2 ratings on the EUR290 million senior secured first lien
term loan and the EUR40 million revolving credit facility are one
notch above the group's CFR.  The ratings on these instruments
reflect their contractual seniority in the capital structure and
benefits from a collateral package.  These comprise a pledge over
the majority of the group's assets as well as upstream guarantees
from most of the group's operating subsidiaries, representing more
than 80% of aggregate EBITDA and assets.  Lenders of the second
lien term loan benefit from the same collateral and guarantee
package, but on a subordinated basis.  The rating of the second
lien term loan, therefore, is two notches below the group's B3 CFR
at Caa2.

                   WHAT COULD CHANGE THE RATING UP/DOWN

An upgrade would require Ammeraal to (1) sustainably reduce
leverage to below 6.0x adjusted gross debt/EBITDA, reflecting an
improvement in EBITDA and/or reduced indebtedness, (2) provide
evidence of a greater commitment towards a more conservative
financial policy, and (3) maintain adjusted FCF/debt at or around
5%.

Moody's might downgrade Ammeraal if (1) interest cover reduced to
below 1.0x EBITA/interest, (2) FCF was negative on a sustainable
basis, and (3) liquidity is weak, exemplified by total liquidity
(cash and available RCF) below EUR20 million.

                        PRINCIPAL METHODOLOGY

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

                          COMPANY PROFILE

Ammeraal Beltech Holding B.V., based in Alkmaar, the Netherlands,
is a global producer of light weight belting products.  Its focus
is in the manufacture but also fabrication, assembly, sales and
service of Synthetic (41% of FY15 revenues) and Modular belts (20%
of FY15 revenues) as well as Specialty (26% of FY15 revenues).  It
serves a variety of end markets including industries such as food,
logistics, industrials, airports, paper and print with customers
representing both OEMs as well as end-users.  It was fully
acquired by Advent from Gilde Buy Out Partners and Parcom Capital
Management in May 2015.


AI ALABAMA: S&P Revises Outlook to Negative & Affirms 'B' CCR
-------------------------------------------------------------
S&P Global Ratings revised its outlook on AI Alabama Midco B.V.
(AI Alabama), the holding company Of Dutch Belting Producer
Ammeraal Beltech, to negative from stable.  S&P affirmed its 'B'
long-term corporate credit rating on AI Alabama.

At the same time, S&P affirmed the 'B' issue ratings on AI
Alabama's EUR290 million first-lien term loan B, including the new
EUR85 million add-on, and the EUR40 million revolving credit
facility (RCF), borrowed by AI Alabama B.V.  The recovery rating
on both remains '3', indicating S&P's expectation of recovery in
the lower half of the 50%-70% range.

S&P also affirmed its 'CCC+' issue rating on the EUR60 million
second lien loan.  The recovery rating remains '6', indicating
S&P's expectations of negligible (0%-10%) recovery in a default
scenario.

The outlook revision follows AI Alabama's new EUR85 million add-on
to its existing term loan B, the proceeds of which it plans to
use, together with EUR11 million from the cash balance, for a
distribution to shareholders of EUR94.3 million and to pay certain
fees related to the transaction.  This debt increase and
accompanying dividend distribution was unexpected and is
aggressive, in S&P's view, leading to credit ratios outside of its
previous base case for the rating.

S&P expects the debt increase will result in a debt to EBITDA
ratio of about 10.0x-10.5x and funds from operations (FFO) to debt
of 2.3%-2.8% for 2016, compared with S&P's previous estimates of
debt to EBITDA of 8.5x-9.0x and FFO to debt of
4.0%-4.5%.  S&P now forecasts the ratio FFO cash interest coverage
ratio will deteriorate to about 2.8x, from about 4.0x.  Should the
company fail to significantly improve its EBITDA margin in line or
above S&P's expectations over the next 12 months to compensate for
the higher debt burden, this could lead S&P to downgrade AI
Alabama. This could occur if the company would incur any further
material restructuring costs or fail to realize the expected cost
savings. Any material debt financed acquisition could also lead to
rating pressure at this time.

On the positive side, S&P notices that the company experienced
strong revenue growth over the last year, and took several cost-
saving initiatives.  S&P's adjusted EBITDA has therefore been
negatively impacted by restructuring costs of EUR15 million over
the last year.  S&P believes the company has now fully implemented
its cost-efficiency program and it do not expect any further
material restructuring going forward.  S&P expects that this
together with cost saving should lead to an improvement in margins
and credit ratios over the coming year, which should support
credit ratios.

The negative outlook reflects the increased likelihood that S&P
could downgrade AI Alabama should the company fail to improve
profitability over the coming 12 months to levels that support
credit ratios that are commensurate with the current rating.

S&P could lower the ratings if the company fails to improve its
profitability over the outlook horizon and improve its adjusted
credit ratios.  This includes S&P's anticipation that the company
should be able to improve its S&P Global Ratings' adjusted EBITDA
margin of about 14.5% in 2016 to about 18% in 2017, with continued
positive free cash flow generation.  Rating-commensurate credit
measures also include FFO cash interest coverage above 2.5x.  S&P
could also take a negative rating action if liquidity is not
maintained in line with S&P's adequate assessment.  These
scenarios could materialize if the company fails to significantly
improve its EBITDA margin over the next 12 months, which could
occur if it incurs any further material restructuring costs or
fails to realize expected cost savings.  S&P could also lower the
ratings if the financial sponsor takes further aggressive actions
or the company makes any additional material debt-financed
acquisitions.

S&P could revise the outlook to stable if AI Alabama manages to
significantly improve its profitability over the near term, to an
extent that supports credit ratios commensurate with the current
rating.


ALCOA NEDERLAND: Moody's Assigns Ba3 CFR, Outlook Stable
--------------------------------------------------------
Moody's Investors Service assigned a Ba3 Corporate Family Rating
and a Ba3-PD Probability of Default rating to Alcoa Nederland
Holding B.V.  At the same time, Moody's assigned a Ba3 rating to
Alcoa Nederland's proposed senior unsecured notes.  Moody's also
assigned a Speculative Grade Liquidity Rating of SGL-2.  The
outlook is stable.  This is the first time Moody's has rated Alcoa
Nederland Holding B.V.

Alcoa Nederland is a wholly owned subsidiary of Alcoa Upstream
Corporation (Alcoa Corp.). Alcoa Corp is currently a wholly owned
subsidiary of Alcoa Inc.  Alcoa is separating into two companies:
Alcoa Corp, which will hold the bauxite, alumina, aluminum, cast
products and energy business as well as the rolling operations in
Warrick, Indiana and Alcoa Inc's 25.1% interest in the Ma'aden
Rolling Company (Ma'aden), and Arconic (the surviving Alcoa entity
that will be renamed Arconic) consisting of Global Rolled
Products, Engineered Products & Solutions and Transportation and
Solutions, the value added segments which specialize in auto sheet
and products for the aerospace, transportation, building and
construction and other industries.

Alcoa plans to distribute at least 80.1% of the issued and
outstanding shares of Alcoa Corp, separating the upstream business
from the value add mid-stream and down-stream businesses.

The notes will be issued by Alcoa Nederland Holding B.V. and prior
to the separation will be guaranteed only by Alcoa Corp.  Post
separation, the notes will be guaranteed by Alcoa Corp. and
restricted subsidiaries and have the same guarantee structure as
the unrated $1.5 billion secured revolving credit facility.
Proceeds from the note offering will be deposited into an escrow
account together with cash amounts sufficient to meet all interest
payments on the notes to separation.  Should the separation be
abandoned or not close by April 3, 2017, the notes will be
redeemed together with accrued interest.

Proceeds from the notes will be used mostly to make a distribution
to Alcoa to fund the transfer of certain assets in connection with
the separation, with the balance retained for general corporate
purposes.

Issuer: Alcoa Nederland Holding B.V.

Assignments:
  Probability of Default Rating, Assigned Ba3-PD
  Speculative Grade Liquidity Rating, Assigned SGL-2
  Corporate Family Rating, Assigned Ba3
  Senior Unsecured Guaranteed Regular Bond/Debenture, Assigned
   Ba3, LGD4

Outlook Actions:
  Outlook, Assigned Stable

                        RATINGS RATIONALE

The Ba3 CFR considers Alcoa Corp's position as a leading producer
of bauxite, alumina and aluminum, geographical and aluminum
product diversity, and operational quality.  From a business
profile perspective, the company is well positioned within its
products and markets served.  Additionally, the company has a
solid cost production profile, driven by continued refocusing of
its refining and smelting system and idling/closure of higher cost
facilities.  However, the rating also incorporates the weak
initial debt protection position, as measured by the EBIT/Interest
ratio, which we expect to be no more than 1.5x for the year ending
Dec. 31, 2016, including Moody's standard adjustments, as well as
expected margins for 2016 of approximately 4%, reflecting the
commodity oriented business model.  Leverage, as measured by the
debt/EBITDA ratio is expected to range between 3.5x and 4.x. while
free cash flow is expected to be negative given the high level of
maintenance capital expenditures.

Excluding the rolling mills, currently part of Global Rolled
Products, the majority of which will stay with Arconic, the
alumina (includes bauxite) and primary metals segments generated
$9.0 billion of net sales and $1.95 billion of EBITDA for the year
ending Dec. 31, 2015.  For the six months ending June 30, 2016,
these businesses accounted for $3.48 billion of revenue and $543
million of EBITDA.  The contribution from the Warrick rolling mill
is negligible.  The decline in revenue and EBITDA in the first
half of 2016 primarily reflects the reduced price environment for
both alumina and aluminum, the lag on lower prices flowing
through, as well as capacity reductions undertaken by Alcoa in
recent years in light of weak aluminum markets, global
overcapacity and higher cost smelters.  With respect to the
bauxite and alumina business, most of this rests within Alcoa
World Alumina & Chemicals (AWAC), which is 60% owned ultimately by
Alcoa and 40% by Alumina Ltd. (unrated).  Alcoa is the
manager/operator and fully consolidates AWAC.  On a proportionate
consolidation basis, Moody's estimates currently that this adds at
least half a turn to leverage metrics as measured by the
debt/EBITDA ratio.

Additionally, the CFR considers the company's exposure to
essentially a single metal commodity, as the demand for bauxite
and alumina is directly correlated to the demand for aluminum, the
volatility in the alumina and aluminum markets driven by weak
global growth expectations and industrial production levels,
overcapacity, particularly given the increase in Chinese smelting
capacity, which mitigates the positive impact of supply
curtailments and closures by other producers, supply/demand
imbalances, and market sentiment.  Given the challenges facing the
industry, and the relatively weak aluminum price environment,
Moody's do not anticipate strong growth in EBITDA, which it
forecasts to be around $1 billion for 2016.

Alcoa Corp's operations have historically been conducted through
two segments: Alumina and Primary Metals.  Going forward, these
businesses will be reported in five segments: Bauxite, Alumina,
Aluminum, Cast Products, and Energy, while a sixth segment will
include the rolling operations at Warrick, Indiana and the 25.1%
interest in Ma'aden.  Cast Products accounted for roughly 32% of
2015 total segment revenue, while Aluminum and Alumina each
contributed 26%, and the other three segments accounted for the
remaining 16%.  The company's operations primarily include the
mining of bauxite, the refining of bauxite into alumina, and the
production of primary aluminum and a range of cast aluminum
products.  The Warrick rolling mill will continue to produce
aluminum for the can-sheet end market, which is a lower margin,
volume driven business.

The SGL-2 Speculative Grade Liquidity rating reflects Alcoa Corp's
initial good liquidity position.  Liquidity is supported by an
undrawn $1.5 billion revolving credit facility, which is secured
by substantially all assets.  Free cash flow is expected to be
negative the next 12-18 months, driven largely by high maintenance
capital expenditures.  However, Moody's expects Alcoa Corp. to
have a comfortable cash balance at separation and this, together
with the availability under the revolver provide acceptable
support for the expected outflows.

The Ba3 senior unsecured debt rating, at the same level as the
CFR, reflects the preponderance of unsecured debt in the capital
structure, given the level of unsecured notes being issued and
unfunded pension obligations relative to the $1.5 billion secured
revolving credit facility.

The stable outlook reflects Moody's expectation for slight
improvement in Alcoa's leverage and debt protection metrics over
the next twelve to eighteen months, while also incorporating the
headwinds facing the company in light of slowing growth rates in
China, overcapacity in the global aluminum markets, and continued
pressure on aluminum and alumina prices.

The rating could be downgraded should the EBIT margin be sustained
at less than 5%, or interest coverage, as measured by the
EBIT/Interest ratio, not improve to at least 2x.  The rating could
be upgraded should the EBIT margin be sustained above 7% or CFO-
Dividends/Debt improve to more than 20%.

The principal methodology used in these ratings was Global Mining
Industry published in August 2014.

Alcoa Corp will be headquartered in New York, New York. Revenues
for the twelve months ended Dec. 31, 2015, were approximately
$11.2 billion.



=============
R O M A N I A
=============


ELCEN: To File for Insolvency Amid RADET Heat Supply Dispute
------------------------------------------------------------
Romania Insider reports Electrocentrale Bucuresti (ELCEN) intended
to file for insolvency on Sept. 23.

RADET and ELCEN have been quarreling over overdue payments in
recent years, threatening to stop providing heat to Bucharest's
residents, Romania Insider relates.  The local and Government
officials hope that insolvency will solve the problem, Romania
Insider notes.

ELCEN operates several thermal power plants in Bucharest, which
produce electricity and hot water.  ELCEN sells the hot water to
RADET, which distributes it to the households connected to the
central heating system in Bucharest.  RADET provides both heat and
running hot water.

ELCEN had over EUR450 million worth of debt at the end of last
year, Romania Insider discloses.  At the same time, the company
had some EUR536 million to recover from its clients, mainly RADET,
Romania Insider states.

One of ELCEN's biggest suppliers is state-owned gas producer
Romgaz, Romania Insider discloses.  The gas producer has
threatened ELCEN several times that it would no longer supply it
with gas until the power producer pays its debt, Romania Insider
recounts.  ELCEN has, in turn, put pressure on RADET to repay some
of its debt, Romania Insider notes.

If Romgaz decides to stop supplying gas to ELCEN, the company
would have to stop its power plants leaving Bucharest without hot
water and heat in the winter, Romania Insider says.


RADET: Files for Insolvency Amid ELCEN Row on Overdue Payments
--------------------------------------------------------------
Romania Insider reports that Bucharest's thermal energy
distributor RADET filed for insolvency after a decision made by
the Bucharest General Council on Sept. 22.

RADET and its main supplier Electrocentrale Bucuresti (ELCEN) have
been quarreling over overdue payments in recent years, threatening
to stop providing heat to Bucharest's residents, Romania Insider
relates.  The local and Government officials hope that insolvency
will solve the problem, Romania Insider notes.

According to Romania Insider, Bucharest's mayor Gabriela Firea
said that RADET's insolvency would not lead to layoffs, but that
it was a way to save the company and restructure it.  She also
promised that the delivery of thermal energy would not be
disrupted, Romania Insider relays.

Insolvency means that creditors won't be allowed to start
enforcement procedures to recover unpaid debt from RADET,
Romania Insider states.

Energy Minister Vlad Georgescu also said that he supported RADET's
insolvency, Romania Insider recounts.  The company will thus pay
its debts, Romania Insider notes.

RADET is controlled by the Bucharest City Hall.  In 2015, the
company had revenues of EUR240 million and EUR96.5 million losses,
Romania Insider discloses.  The company had 3,500 employees,
according to official data from the Finance Ministry.



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


FINPROMBANK: Moody's Lowers Long-Term Deposit Ratings to C
----------------------------------------------------------
Moody's Investors Service downgraded Finprombank's long-term
local- and foreign-currency deposit ratings to C from Caa2.  The C
ratings do not carry outlooks.  At the same time, Moody's
downgraded the bank's baseline credit assessment (BCA) and
adjusted BCA to c from caa2.  Finprombank's long-term Counterparty
Risk Assessment (CR Assessment) was downgraded to C(cr) from
Caa1(cr).  The bank's Not Prime short-term local-currency and
foreign-currency deposit ratings, as well as its short-term CR
Assessment of Not Prime(cr) were affirmed.

Moody's will withdraw all the bank's ratings following the
revocation of its banking license by the Central Bank of Russia
(CBR), as announced by the CBR on Sept. 19, 2016.

                         RATINGS RATIONALE

The rating action and Moody's subsequent ratings withdrawal follow
the CBR's announcement on Sept. 19, 2016, that it had revoked
Finprombank's banking license, as a result of the entity's
violation of federal banking laws and CBR regulations, as well as
its inability to process creditor claims in time because of
unsatisfactory quality of its assets.

The downgrade of Finprombank's ratings reflects Moody's
expectations of heavy losses that the bank's creditors are likely
to incur as a result of its liquidation, given: (1) the bank's
poor asset quality; and (2) historically low recovery rates for
similar cases in Russia, when banks' licenses have been revoked.

                       PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Banks
published in January 2016.

Headquartered in Moscow, Russia, Finprombank reported total assets
of RUB44 billion and total equity of RUB7.8 billion under
unaudited IFRS as of June 30, 2016.


PROMSVYAZBANK: S&P Affirms 'BB-/B' Counterparty Credit Ratings
--------------------------------------------------------------
S&P Global Ratings affirmed its 'BB-/B' long- and short-term
counterparty credit ratings on Russia-based Promsvyazbank.  The
outlook is negative.

S&P also affirmed its 'ruAA-' Russia national scale rating on the
bank.

The affirmation reflects S&P's view that Promsvyazbank's tier 1
capital increases of Russian ruble (RUB)12.1 billion (about
$190 million) in the first half of 2016 and RUB15.7 billion in
2015, should reduce short-term pressure on the bank's capital
ratios, somewhat offsetting weakened profitability.

However, S&P continues to view Promsvyazbank's capital and
earnings as weak, reflecting S&P's belief that the bank's risk-
adjusted capital (RAC) ratio (as measured by S&P Global Ratings'
RAC framework) will remain within the 3.0%-3.3% range in the next
12-18 months, despite recent initiatives to strengthen core
capital.  S&P also believes that downside risks to this forecast
could be material.

The weakened economic conditions in Russia and high concentrations
in the bank's loan book resulted in higher credit costs and
therefore a weaker overall reported financial performance in 2015,
with net losses of RUB16.4 billion and credit costs of 5.8% of the
bank's average gross loan portfolio for 2015.  S&P notes that for
the first six months of 2016, Promsvyazbank posted a net profit of
RUB1.6 billion, largely supported by the positive revaluation
(plus RUB8.4 billion for the first six months of 2016) of
investment property received from the major shareholder, rather
than core profitability improvements.  S&P notes that recent
initiatives to strengthen the bank's capital are partly offsetting
potential losses.  However, the bank's prospective capital
position will also depend on future asset quality and net interest
margin recovery.

"In our view, internal capital generation continues to constrain
the bank's credit quality, because we do not believe that earnings
retention alone will boost capitalization sufficiently.  In
addition, we believe that noncore assets, notably investment
property and assets held for sale (about 7% of total assets as of
June 30, 2016), tie up capital and limit the bank's financial
flexibility considerably.  We believe that these assets increase
the bank's vulnerability to market risk, due to the change in
valuations and liquidity risk, which are a result of the illiquid
nature of these assets.  Should this exposure increase further, it
might lead us to revise the bank's risk position downward," S&P
said.

"The bank's annualized credit costs for the first six months of
2016 stabilized at about 4%, and we expect they will remain within
the 3.5%-4.0% range in 2016.  As of the same date, the bank's
nonperforming loans (NPLs; loans overdue by 90 days or more)
increased to 7.8% from 4% at end-2015.  However, we continue to
assess Promsvyazbank's risk position as adequate, because we
believe that the bank's risk profile is not materially different
from the average risk profile of a Russia-based financial
institution.  Our opinion is also supported by NPLs' provisioning
coverage of 110%.  We note that, in 2015, the bank managed to
attract large higher-quality borrowers, benefitting from increased
demand for corporate loans in an environment where external
markets are closed to top-tier Russian corporations.  This could
curb the bank's credit risk, in our view," S&P said.

In 2015, the bank's majority parent Promsvyaz Capital B.V.
acquired Vozrozhdenie Bank, with total assets of about
RUB223 billion as of June 30, 2016.  S&P understands the banks
will continue to operate as separate legal entities and will not
be merged in the next 12-18 months.

S&P considers Promsvyazbank to have moderate systemic importance
in Russia's banking sector, given its strong market presence and
well-developed branch network nationwide.  The bank's customer
deposit market share is about 1.8%, which S&P considers sizable,
given the market's high concentration.  Among the bank's key
clients are large Russian corporate entities, including
government-related entities, which S&P believes also signals the
bank's relative importance in the context of Russia's banking
sector.  Therefore, S&P incorporates one notch of uplift to the
bank's stand-alone credit profile of 'b+' for the moderate
likelihood of extraordinary government support that might be
available for the bank if needed.

The negative outlook primarily reflects S&P's concerns about the
high operating risks in Russia, as well as potential downside
risks to the bank's asset quality and capital position, which S&P
believes could materialize in the next 12-18 months.

S&P could take a negative rating action if the bank's asset
quality deteriorates by more than S&P currently expects, or the
workout of problem assets becomes more prolonged.  A negative
rating action could also follow if the RAC ratio falls below 3%
due to higher-than-expected growth, higher reported losses, or
other one-time effects, such as a risky merger or acquisition,
which could put downward pressure on the bank's financial profile.

An outlook revision to stable would depend on the stabilization of
operating conditions in Russia and of the bank's own financial
profile.


RAIFFEISEN BANK: Moody's Changes Ba1 Rating Outlook to Positive
---------------------------------------------------------------
Moody's Investors Service changed the outlook to positive from
stable on Raiffeisen Bank SA's Ba1 long-term local and foreign-
currency deposit ratings. Concurrently, the rating agency has
affirmed the bank's ba3 baseline credit assessment (BCA) and
adjusted BCA, its Ba1 long-term local and foreign-currency deposit
ratings and Baa3(cr) Counterparty Risk Assessment (CRA). This
rating action reflects the positive outlook assigned to Raiffeisen
Bank SA's parent Raiffeisen Bank International AG (RBI; Baa2
positive/Baa2 positive; ba3) and the rating agency's assessment
that the additional costs from a recently adopted law on mortgages
in Romania will be manageable for the bank.

The bank's short-term Not-Prime deposit ratings and its
Prime-3(cr) CRA are unaffected by the rating action.

RATINGS RATIONALE

By affirming Raiffeisen Bank SA's ba3 BCA, Moody's has taken into
account the bank's credit profile which is characterized with
asset quality that is better than the Romanian system average,
with a non-performing loan (NPL) ratio of 8.5% as of year-end
2015. At the same time the bank maintains acceptable NPLs coverage
at 63%. Raiffeisen Bank SA demonstrates strong profitability,
although net income decreased by 16.8% in 2015, driven by a modest
decline in revenues and increased operating costs. As a result the
bank's return on assets declined to 1.4% in 2015 from 1.9% in
2014. Raiffeisen Bank has a good capital adequacy with a Tier 1
ratio of 13.9% and Total Capital ratio of 18.5% as of year-end
2015. However, these ratios have declined from 15.1% and 20.2%,
respectively, as of year-end 2014, following a substantial
dividend payment in the amount of 120% of the prior year profits.
The risks of further large dividend payments, coupled with
increasing level of risk-weighted assets (as a result of loan
growth) could result in a moderate decline in the capital adequacy
ratio. Raiffeisen Bank SA is fully deposit funded with a gross
loan-to-deposit ratio of 81% as of year-end 2015, unchanged from
year-end 2014, as customer loans and customer deposits grew at a
similar pace. The bank holds adequate liquidity reserves with
liquid assets to total assets at 40% as of year-end 2015.

Moody's notes, that Raiffeisen Bank SA, similar to other Romanian
banks, is affected by a law adopted in late April 2016 that allows
mortgage borrowers to opt for a strategic default, (i.e.,
defaulting on the debt while being financially able to service it)
and be discharged of all financial obligations under the mortgage
agreement. The rating agency understands that so far only limited
number of borrowers have decided to make use of this provision of
the law. However, the full negative impact of the implementation
of the law may become clear after several months as more borrowers
may decide to default and banks may challenge the retrospective
application of the law in courts. In H1 2016 Raiffeisen Bank SA
recognized EUR42.5 million (about 1% of gross loans as of year-end
2015) additional provisions stemming from the provisions of the
law which were absorbed by the bank's income.

Raiffeisen Bank SA's affirmed adjusted BCA of ba3 currently does
not benefit from uplift from parental support from RBI because the
BCAs of the two banks are at the same level. However, Raiffeisen
Bank SA's adjusted BCA and the long-term deposit ratings could be
upgraded if RBI's BCA is upgraded to ba2 from ba3.

The affirmation of Raiffeisen Bank SA's deposit ratings of Ba1
reflect Moody's Advanced Loss Given Failure (LGF) analysis, which
provides two notches of uplift from the bank's adjusted BCA of
ba3. The bank benefits from a large volume of deposits, and
limited senior and subordinated debt, resulting in very low loss
given failure for its deposits.

The positive outlook on Raiffeisen Bank SA's Ba1 deposit ratings
reflects the scope for higher rating uplift based on the rating
agency's assumption of parental support from RBI in combination
with the positive outlook assigned to RBI's long-term debt and
deposit ratings.

WHAT COULD MOVE THE RATINGS UP/DOWN

The ongoing improvement in the operating environment for Romanian
banks leading to a considerable reduction in the bank's problem
loans and maintaining strong capital ratios, could have positive
rating implications. An upgrade of RBI's BCA could result in an
upgrade of Raiffeisen Bank SA's deposit ratings and CRA.

A material deterioration in the bank's loan book quality affecting
its profitability and capital adequacy may have negative rating
implications. However, downward pressure on Raiffeisen Bank SA's
deposit ratings owing to a weakening of its standalone profile
could potentially be at least partially mitigated by our
assessment of affiliate support from RBI. A change of the outlook
on RBI's ratings to stable will likely have a similar effect on
Raiffeisen Bank SA's ratings outlook.

Furthermore, alterations in the bank's liability structure may
change the amount of uplift provided by Moody's Advanced LGF
analysis and lead to a higher or lower notching from the bank's
adjusted BCA, thereby affecting deposit ratings and CRA.

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Banks
published in January 2016.


TINKOFF BANK: Moody's Changes Outlook on B2 Ratings to Positive
---------------------------------------------------------------
Moody's Investors Service has changed the outlook to positive from
stable on the B2 local- and foreign-currency long-term deposit
ratings of Tinkoff Bank.  At the same time, the B2 long-term
deposit ratings, B3 subordinated debt ratings and the Not Prime
local- and foreign-currency short-term deposit ratings have been
affirmed.

The rating action is driven by the recovery in the bank's
profitability metrics over recent quarters and Moody's expectation
of robust financial results in the next 12-18 months.  The
standalone baseline credit assessment (BCA) of Tinkoff Bank of b2,
its adjusted BCA of b2 and Counterparty Risk Assessment (CRA) of
B1(cr)/Not Prime (cr) were affirmed as part of this rating action.

Concurrently, Moody's assigned B2 long-term global scale local-
currency debt ratings to the senior unsecured debt instrument
issued by Tinkoff Bank.  Any subsequent local-currency senior
unsecured debt issuance by Tinkoff Bank will be rated at the same
rating level subject to there being no material change to the
bank's overall credit profile.

                         RATINGS RATIONALE

The outlook change to positive from stable on Tinkoff Bank's long-
term ratings is largely driven by improvements in the bank's
profitability, as a result of reduced funding and credit costs,
and Moody's expectation of strong bottom line results in 2016-17.
The affirmation of the ratings reflects Moody's expectation that
Tinkoff Bank's credit profile will remain resilient to the
challenges in Russia's operating environment.  The rating agency
expects that the bank will maintain healthy capital and liquidity
ratios in the next 12 to 18 months.

The bank's interim profitability metrics have materially improved
over the last several quarters, as reflected in its annualized
return-on-average equity (ROAE) of 36.9% for the six months ending
June 30, 2016.  Net income has been bolstered by: (1) the decline
in credit costs to 7.7% in Q2 2016 from 16.5% in Q2 2015 owing to
tight risk controls and continued consumer deleveraging; and (2)
the recovery of net interest income amid the declining cost of
funds.  Barring material external shocks, the rating agency
expects the bank to post strong financial results in 2016-17.

In addition, the bank's asset quality and capital adequacy levels
will likely remain solid in the short term.  As of H1 2016, the
bank reported a non-performing loan ratio of 10.9%, with its
problem loans sufficiently covered by loan loss reserves (over
140%) and healthy capital buffers with a Tier 1 ratio of 14.4% and
a total capital adequacy ratio (CAR) of 17.2% under Basel III.
Moody's views these levels as robust, providing it with a
sufficient cushion to absorb potential credit losses.  The rating
agency expects the bank's capital adequacy metrics to stabilize at
the current level amid expected growth of risk-weighted assets and
strong bottom line results.

The assigned B2 long-term local currency debt ratings are in line
with Tinkoff Bank's global scale local currency deposit rating,
which is, in turn, based on the bank's standalone BCA of b2 and
does not incorporate any external support uplift.

                  WHAT COULD MOVE THE RATINGS UP/DOWN

Tinkoff Bank's ratings could be upgraded given: (1) evidence of
sustainable and robust financial results, along with a strong
loss-absorption capacity in line with Moody's expectations in the
next 12-18 months; or (2) material diversification of the bank's
business model and revenues.

The outlook could return to stable or the ratings be downgraded
if: (1) Tinkoff Bank loses control over its credit costs or pre-
provision income; (2) its loss absorption capacity in terms of its
Tier 1 capital or non-performing loan coverage significantly
deteriorates; or (3) the bank experiences funding or liquidity
difficulties.

                          PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Banks
published in January 2016.


VOZROZHDENIE BANK: S&P Affirms BB-/B Counterparty Credit Ratings
----------------------------------------------------------------
S&P Global Ratings affirmed its 'BB-' long-term and 'B'
short-term counterparty credit ratings on Russia-based
Vozrozhdenie Bank.  The outlook remains negative.

At the same time, S&P affirmed its 'ruAA-' long-term Russia
national scale rating on the bank.

"The affirmation reflects that we now have more clarity on
Vozrozhdenie Bank's future business strategy after recent changes
in the bank's ownership structure.  Dmitry Orlov, the founder and
previous majority shareholder of the bank, passed away in 2014.
In the third quarter of 2015, Promsvyaz Capital B.V. -- holding
company of Russia-based Promsvyazbank OJSC -- accumulated about
75% of Vozrozhdenie Bank's share capital.  We understand that the
new majority shareholder is unlikely to make significant changes
to Vozrozhdenie Bank's historically prudent and well-articulated
strategy, which has allowed it to post recurring, healthy
operating profits in previous years.  We also understand that
during the past 12 months Vozrozhdenie Bank has enjoyed fairly
stable client confidence despite the changes at the shareholder
level," S&P said.

"We believe that Vozrozhdenie Bank's credit standing is somewhat
protected from the potential negative impact that could result
from Promsvyaz Capital's other activities.  At the same time, we
consider the bank to be a highly strategically important member of
the consolidated Promsvyaz Capital banking group.  Although
Vozrozhdenie Bank contributes almost 18% of the group's equity or
15% of the consolidated group's assets, in our opinion, it is
insulated from the unsupported group credit profile (GCP), which
we assess at 'b+'.  We assess Vozrozhdenie Bank's stand-alone
credit profile (SACP) at 'bb-'," S&P said.

In S&P's opinion, the effects of potential weakening of the GCP on
Vozrozhdenie Bank's credit profile will be limited in the short to
medium term.  S&P considers that the amount of financial support
Vozrozhdenie Bank might extend to the members of the Promsvyaz
Capital group will likely be modest.  This is because Vozrozhdenie
Bank is a regulated financial institution, and Russia's prudential
regulations limit exposure to related parties to 25% of its
regulatory capital (20% starting from 2017).  Moreover, S&P
anticipates that the Central Bank of Russia (CBR) would likely
intervene, if needed, to limit potential financial support from
Vozrozhdenie Bank to the wider group if it observed a possible
negative impact on the bank's credit standing.  As of June 30,
2016, Vozrozhdenie Bank's gross loans to related parties comprised
2.2% of its gross loan book, which S&P considers moderate.  On the
same date, funding from related parties was close to 0.1% of
Vozrozhdenie Bank's total liabilities.  In S&P's base-case
scenario, it believes that the group's strategy with respect to
Vozrozhdenie Bank is clear and, in particular, the parent has a
compelling economic incentive to preserve the bank's credit
strength.

S&P continues to view Vozrozhdenie Bank's strategy as relatively
conservative, which explains the bank's generally stable
performance through the cycle.  At the same time, S&P cannot
exclude the possibility that the new controlling shareholder may
eventually introduce more significant changes to the bank's
strategy that might incorporate a combined view on the development
of both Vozrozhdenie Bank and Promsvyazbank.  S&P could revise its
opinion if it was to see the new owners shift toward a more
aggressive risk appetite, hampering the predictability and
sustainability of the bank's business position.  During the first
half of 2016 and most of 2015, the bank's business growth
indicators stagnated, owing to the challenging operating
environment in Russia.

Vozrozhdenie Bank's reported net profit of Russian ruble
(RUB)0.5 billion (about $7.7 million) for the first half of 2016
compared with a loss of RUB0.5 billion during the same period in
2015, owing to a decrease in annualized loan loss provisioning to
2.6% in the first six months of this year versus 5.7% for
full-year 2015.  S&P anticipates that the bank's credit costs will
remain at about 2.5% in 2016.  At the same time, the bank's
revenue base is broadly stable, indicating more sustainable
earnings capacity in its core banking business than many of its
peers.  This has helped support its net interest margin at 4.5%-
5.0% throughout 2015, while sector-average metrics were well below
this range.  Overall, the bank's earnings structure is healthy,
with about 95% of revenues coming from interest, fees, and
commissions.

The share of Vozrozhdenie Bank's non-performing loans (NPLs) is
generally in line with the sector average and stood at 7.8% of
gross loans on June 30, 2016, when the bank's loan loss provision
coverage ratio was an adequate 124% of NPLs.  S&P believes that
Vozrozhdenie Bank's business profile has been more sustainable
than that of most midsize banks in Russia, owing to its well-
established position in the relatively wealthy Moscow region, its
adequate business mix, and less aggressive growth targets.
Because of its track record of sound core banking profitability
and strong franchise in the rich and diversified Moscow region,
S&P currently considers Vozrozhdenie Bank's business position to
be adequate, despite low systemwide market shares in the highly
fragmented Russian market.  S&P believes Vozrozhdenie Bank's new
majority shareholder will aim to maintain the bank's historically
sound business focus and strategy at least in the near term.

The negative outlook reflects the challenges of the difficult
operating environment in Russia, which S&P expects will constrain
profitability due to high credit costs.  This could potentially
erode the bank's capital buffers.

S&P could lower the ratings on Vozrozhdenie Bank if such operating
conditions lead to a significant deterioration of its risk profile
or earnings power, resulting in an increase in NPLs and
significantly higher loan losses than the system average.  This
could weaken the bank's capital position, as shown by S&P's
forecast risk-adjusted capital ratio falling below 5%.

A downgrade could also stem from a marked increase in risk
appetite driven by changes in the bank's ownership and strategy.
In our opinion, a potential merger with Promsvyazbank might
introduce implementation challenges for both banks, especially in
the current adverse market conditions.  In S&P's base-case
scenario, it doesn't expect the two banks to be merged in the next
12-18 months, however.

S&P does not expect to revise the outlook to stable within the
next 12-18 months because operating conditions in Russia will
likely remain tough over that period.


* S&P Revises Outlooks on 11 Russia-Related Finc'l Institutions
---------------------------------------------------------------
S&P Global Ratings on Sept. 20 said that it had revised its
outlooks on 11 Russia-related financial institutions to stable
from negative following its similar action on the sovereign.  The
counterparty credit ratings on the financial institutions were
also affirmed.

                           RATIONALE

Government-Related Entities

S&P revised its outlooks and affirmed the ratings on these
government-related entities (GREs) and members of GRE groups.  The
revision reflects the somewhat stabilizing economic environment in
Russia and the government's capacity to provide timely and
sufficient extraordinary support to these GREs.

   -- VTB Bank JSC (BB+/Stable/B)

The outlook on VTB Bank JSC reflects that on Russia.

S&P equalizes the ratings and outlooks on these core VTB group
members with those on VTB Bank JSC:

   -- VTB-Leasing (BB+/Stable/B)
   -- VTB-Leasing Finance (BB+/Stable/B)
   -- VTB Capital PLC (BB+/Stable/B)
   -- VTB Insurance Ltd. (BB+/Stable/--)

These banks have high strategic importance to the VTB group, and
S&P rates these group members one notch below VTB Bank JSC.

   -- VTB Bank (Kazakhstan) (BB/Stable/B)
   -- VTB Bank (Deutschland) AG (BB/Stable/B)

         MEMBERS OF LARGE FOREIGN GROUPS OPERATING IN RUSSIA

S&P revised its outlooks and affirmed its ratings on these members
of large foreign groups that operate in Russia because of S&P's
view of somewhat reducing pressure from the sovereign rating and
reflecting the application of S&P's criteria, given that all of
them are exposed predominantly to the Russian market.  S&P
continues to cap the long- and short-term ratings on these
entities at the level of S&P's foreign currency sovereign ratings
on Russia (BB+/Stable/B):

   -- BNP PARIBAS BANK JSC (BB+/Stable/B)
   -- AO UniCredit Bank (BB+/Stable/B)
   -- Bank ICBC JSC (BB+/Stable/B)
   -- Credit Suisse Securities (Moscow) Ltd. (BB+/Stable/B)

The outlooks on all these entities are now stable, mirroring the
outlook on the sovereign.

RATINGS LIST

Outlook Action; Ratings Affirmed

                                    To               From
VTB Bank JSC
VTB-Leasing
VTB-Leasing Finance
VTB Capital PLC
Counterparty Credit Rating         BB+/Stable/B    BB+/Neg./B

VTB Insurance Ltd.
Counterparty Credit Rating
  Local Currency                    BB+/Stable/--   BB+/Neg./--
Financial Strength Rating
  Local Currency                    BB+/Stable/--   BB+/Neg./--

VTB Bank (Kazakhstan)
VTB Bank (Deutschland) AG
Counterparty Credit Rating         BB/Stable/B     BB/Neg./B

BNP PARIBAS BANK JSC
Counterparty Credit Rating         BB+/Stable/B    BB+/Neg./B

AO UniCredit Bank
Counterparty Credit Rating         BB+/Stable/B    BB+/Neg./B

Bank ICBC JSC
Counterparty Credit Rating         BB+/Stable/B    BB+/Neg./B

Credit Suisse Securities (Moscow) Ltd.
Counterparty Credit Rating         BB+/Stable/B    BB+/Neg./B


* S&P Takes Various Rating Actions on Russian Corporations
----------------------------------------------------------
S&P Global Ratings on Sept. 20 said that it has taken various
rating actions on a number of Russian corporations following the
sovereign outlook revision.

COMMODITY PRODUCERS (EXPORTERS):

   -- S&P revised the outlook on Gazprom PJSC to stable from
      negative, and affirmed the 'BB+/B' foreign currency (FC)
      ratings and the 'BBB-/A-3' local currency (LC) ratings.

   -- S&P revised the outlook on Gazprom Neft PJSC to stable from
      negative, and affirmed the 'BB+' ratings.  S&P revised the
      outlook on LUKOIL PJSC to stable from negative, and
      affirmed the 'BBB-' ratings.  S&P revised the outlook on
      NLMK PJSC to stable from negative, and affirmed the 'BBB-'
      ratings.

   -- S&P revised the outlook on Oil Company Rosneft OJSC to
      stable from negative, and affirmed the 'BB+' ratings.  S&P
      revised the outlook on PAO Severstal to stable from
      negative, and affirmed the 'BBB-' ratings.  S&P affirmed
      the 'BBB-' ratings on MMC Norilsk Nickel OJSC.  The outlook
      remains negative.

   -- S&P affirmed the 'BBB-' ratings on PhosAgro OJSC.  The
      outlook remains negative.  S&P affirmed the 'BB+' ratings
      on OAO Novatek and subsequently placed them on CreditWatch
      with positive implications.

TELECOM OPERATORS:

   -- S&P revised the outlook on Mobile TeleSystems (OJSC) to
      stable from negative and affirmed the 'BB+' ratings.  S&P
      revised the outlook on Rostelecom OJSC to stable from
      negative, and affirmed the 'BB+' ratings.

   -- S&P revised the outlook on MegaFon PJSC to stable from
      negative, and affirmed the 'BB+' FC and 'BBB-' LC ratings.

RETAIL COMPANIES:

   -- S&P revised the outlook on PJSC Magnit to stable from
      negative, and affirmed the 'BB+' ratings.

TRANSPORTATION COMPANIES:

   -- S&P revised the outlook on PAO Sovcomflot to stable from
      negative, and affirmed the 'BB+' ratings.

INFRASTRUCTURE AND UTILITY COMPANIES:

   -- S&P revised the outlook on OAO AK Transneft to stable from
      negative, and affirmed the 'BB+' FC and the 'BBB-' LC
      ratings.

   -- S&P revised the outlook on Federal Grid Co. of the Unified
      Energy System to stable from negative, and affirmed the
      'BB+' ratings.  S&P revised the outlook on JSC Federal
      Passenger Company to stable from negative, and affirmed the
      'BB+' ratings.

   -- S&P revised the outlook on Mosenergo PJSC to stable from
      negative, and affirmed the 'BB+' ratings.  S&P revised the
      outlook on Public Joint Stock Company Rosseti to stable
      from negative, and affirmed the 'BB+/B' ratings.

   -- S&P revised the outlook on Russian Railways JSC to stable
      from negative, and affirmed the 'BBB-' LC and 'BB+' FC
      ratings.

   -- S&P has affirmed the 'BB+/B' ratings on DME Ltd.  The
      outlook remains negative.

The outlook revisions on 17 of the entities included in the rating
actions mirror the action on Russia.  However, in some cases, S&P
continues to see downside risks driven by entities' stand-alone
characteristics.  This led S&P to maintain the negative outlooks
on Norilsk Nickel, PhosAgro, and DME Ltd.  S&P placed the ratings
on Novatek on CreditWatch with positive implications as it
believes the company could withstand a hypothetical sovereign
default and potentially be rated higher that the sovereign, which
S&P plans to assess in the next month.

The outlook on Norilsk Nickel is negative as S&P thinks leverage
in 2016-2017 will be close to the maximum level that S&P sees
commensurate with the 'BBB-' rating.  Similarly, the negative
outlook on PhosAgro accounts for the negative pricing environment
and resulting risk of weakening credit metrics.  The negative
outlook on DME Ltd. reflects S&P's view of possible deterioration
in credit metrics due to weaker profitability and the company's
capital expenditure (capex) plans.

Currently, the ratings on five companies already exceed the FC
sovereign credit rating and T&C assessment on Russia: LUKOIL,
Norilsk Nickel, Severstal, NLMK, and PhosAgro.

                   COMMODITY PRODUCERS (EXPORTERS)

Gazprom PJSC

The outlook revision to stable from negative follows the rating
action on Russia.  The sovereign is Gazprom's controlling
shareholder.

S&P continues to assess Gazprom's stand-alone credit profile
(SACP) as 'bbb-'.  In S&P's base case, it assumes that the company
will adapt its strategy to the revised industry conditions of
materially lower gas prices.  S&P also assumes that it can achieve
neutral free cash flow generation, despite its strategic
investments into Power of Siberia and Nord Stream-2 projects.  S&P
generally expects Gazprom's funds from operations (FFO) to debt
will exceed 45% on average in 2016-2018.

S&P would likely lower the ratings on Gazprom if S&P was to lower
the sovereign ratings.  Because S&P views Gazprom as a government-
related entity (GRE) with very strong link to and critical role
for the government, S&P do not expect to rate Gazprom above the
sovereign, which would constrain any upside potential in the
absence of a sovereign upgrade.  At the same time, S&P would
likely affirm the ratings if Gazprom's SACP significantly
deteriorated while the sovereign rating remained unchanged.  This
could happen if the company made large debt-financed investments,
which S&P do not include in its base case.

Gazprom Neft PJSC

The outlook revision to stable from negative follows the rating
action on Russia.  S&P would likely lower the ratings on Gazprom
Neft if S&P lowered the ratings on its parent, Gazprom.  In turn,
S&P could downgrade the parent in the event of a sovereign
downgrade because of S&P's view of Gazprom as a GRE with very
strong links to the state, implying the risk of negative sovereign
interference.

S&P do not expect to rate Gazprom Neft above its parent or the
sovereign.  In S&P's view, the company's financial performance and
funding are ultimately driven by similar key industry and country
sovereign factors as those its parent operates with.

                            LUKOIL PJSC

The outlook revision to stable from negative follows the rating
action on Russia.

LUKOIL generated about 85% of its EBITDA in Russia in 2015.  S&P
could lower its rating on LUKOIL by one notch if S&P lowered the
T&C assessment and our FC sovereign rating on Russia.  Similarly,
any positive rating action on Russia could result in ratings
upside for LUKOIL.

S&P might consider a negative rating action if LUKOIL's currency
liquidity resources declined while its hard currency short-term
maturities increased, or if S&P saw a pronounced deterioration in
business conditions for Russian companies beyond S&P's base-case
scenario.  This might happen, for example, if the government were
to materially amend the taxation system, which S&P currently do
not anticipate.

A negative rating action could also stem from a marked decline in
production, large debt-financed investments or shareholder
distributions, a prolonged period of limited access to financing,
or the ratio of FFO to adjusted debt falling less than 60%
protractedly.  That said, S&P sees these scenarios as relatively
unlikely in the next 12 months.

                            NLMK PJSC

The outlook revision follows a similar action on Russia and
reflects S&P's view that NLMK's credit metrics will remain
commensurate with the current ratings, with debt to EBITDA below
1.5x and FFO to debt above 60%.  S&P also expects NLMK to have
enough cash in its foreign divisions and maintain significant
export cash flows versus limited debt maturities to pass S&P's
stress test conditions to be rated above the long-term FC
sovereign rating and the T&C assessment.  Pressure on the rating
might also stem from substantial deterioration of steel demand or
the pricing environment that resulted in material EBITDA
contraction, or if higher dividends or investments led to FFO to
debt falling below 60% and debt to EBITDA exceeding 1.5x on a
protracted basis.  Ratings upside is currently limited since S&P
cannot rate NLMK by more than one notch above the long-term FC
rating and T&C assessment on Russia.

                     Oil Company Rosneft OJSC

The outlook revision follows the rating action on Russia, the
company's controlling shareholder.  S&P assumes that Rosneft's FFO
to debt, as adjusted by S&P Global Ratings, will remain at about
20%-25% in 2016-2017.  S&P believes that Rosneft's credit metrics
have limited potential to improve in 2016-2017, absent more asset
disposals than S&P currently anticipates, as the company is
undertaking a number of investment projects that will constrain
free cash flow generation.

S&P believes that the rating on Rosneft cannot exceed that on the
government, which limits ratings upside even in the event of an
improvement in the company's SACP.  At the same time, absent a
sovereign downgrade, S&P could lower the rating only if it was to
revise down its assessment of Rosneft's SACP to 'b+' -- which
would only occur in the event of liquidity pressures or a material
increase in leverage -- a scenario S&P sees unlikely over the next
12 months.

                          PAO Severstal

The outlook revision follows a similar action on Russia and
reflects S&P's view that Severstal's credit metrics will remain
commensurate with the current ratings, with debt to EBITDA below
1.5x and FFO to debt above 60%.  S&P also expects Severstal to
have enough cash in its foreign divisions and maintain significant
export cash flows versus limited debt maturities to pass S&P's
stress test conditions to be rated above the long-term FC
sovereign rating and the T&C assessment.  Rating pressure might
also arise from substantial deterioration of steel demand or the
pricing environment that resulted in material EBITDA contraction,
or if higher dividends or investments led to FFO to debt falling
below 60% and debt to EBITDA exceeding 1.5x on a prolonged basis.
Ratings upside is currently limited since S&P cannot rate
Severstal by more than one notch above the long-term FC rating and
T&C assessment on Russia.

                      MMC Norilsk Nickel OJSC

S&P continues to believe that, due to depressed commodity price
environment conditions, Norilsk Nickel might face difficulties in
the next 12 months maintaining credit metrics that are
commensurate with the current rating, notably debt to EBITDA of
below 2x (including our adjustments).  S&P could lower the ratings
if EBITDA declines because of lower nickel prices or in case of
aggressive financial policies, resulting in less supportive
liquidity, or adjusted debt to EBITDA exceeding 2x for an extended
period.  S&P could also take a negative rating action if conflict
over financial policy and control of the group resurfaces among
the major shareholders.  S&P could revise the outlook to stable if
it considers that the company is solidly placed to maintain an
adjusted ratio of debt to EBITDA of 2x or below in 2017-2018.

                           PhosAgro OJSC

The negative outlook factors in the negative price environment in
the industry.  S&P could take a negative rating action in case FFO
to debt were to deteriorate markedly below 45% in 2016 and/or the
adjusted debt to EBITDA ratio exceeds 2x due to this weaker
industry environment than currently assumed.  S&P could also take
a negative action in case of weakening of PhosAgro's meaningful
cash and liquidity cushion, which currently supports its rating
above that of the sovereign.

                            OAO NOVATEK

The CreditWatch placement reflects the likelihood that S&P could
raise the rating on Novatek to 'BBB-' if S&P concludes that the
company could withstand a sovereign default.  S&P's assessment of
the company's SACP is 'bbb-'.  Moreover, Novatek's leverage
continues to decline on the back of having sold its 10% stake in a
major Yamal LNG project and thanks to generally moderate capex.
S&P notes that Novatek's foreign currency revenues are steadily
increasing, as is the share of liquids, which unlike gas, the
company can export.  At the same time, the company is gradually
repaying its foreign currency debt, thereby improving the debt
maturity profile.  Importantly, the company has also arranged the
financing package for Yamal LNG and the risk of material cash
outlays related to it has reduced.

S&P expects to resolve the CreditWatch within the next 30 days.
S&P could raise the rating to 'BBB-' if S&P concludes that the
company could withstand a hypothetical sovereign default.
Otherwise, S&P could revise the outlook to stable from negative,
to reflect the outlook on Russia, and affirm the 'BB+' ratings.

                         TELECOM OPERATORS

Mobile TeleSystems (OJSC) (MTS)

The stable outlook on MTS mirrors the outlook on Russia and
reflects S&P's expectation of an adjusted debt-to-EBITDA ratio
consistently below 2x and discretionary cash flow generation close
to break-even.

S&P could lower the ratings on MTS if S&P revised down its
assessment of its SACP, which could occur if S&P's adjusted debt-
to-EBITDA ratio were consistently higher than 2x and discretionary
cash flow generation turned strongly negative.  That said, S&P do
not currently expect this to occur.  S&P could also lower the
rating if industry or regulatory conditions in any important
jurisdictions where MTS operates deteriorate significantly.

S&P do not see downward pressure from the ratings of holding
company Sistema.

S&P could lower the rating on MTS if S&P revises the T&C
assessment on Russia downward, or lower S&P's ratings on Russia.
Upside is limited as S&P caps its rating on MTS at the 'BB+' T&C
assessment for Russia because MTS does not have any meaningful
hard currency earnings.

                          Rostelecom OJSC

The outlook revision follows the rating action on Russia and
reflects S&P's expectations that Rostelecom will continue to
demonstrate adjusted debt to EBITDA of below 2.5x and moderately
positive free operating cash flow (FOCF).  S&P expects its
liquidity to remain adequate.  S&P could take a negative rating
action if Rostelecom's adjusted debt-to-EBITDA ratio exceeded 2.5x
and/or if FOCF to debt were below 5% due to financial policy
decisions (including those related to its mobile joint venture
with Tele2 Russia) or underperformance of the core business.  In
addition, S&P might consider a downgrade if Rostelecom's liquidity
position deteriorates, for example as a result of untimely
refinancing of upcoming maturities.  S&P could also lower the
rating on Rostelecom in the event of a sovereign downgrade because
the company is a non-exporter.  Upside is limited at this stage.

                           MegaFon PJSC

The rating action on MegaFon follows the rating action on Russia.
S&P's stable outlook on MegaFon reflects its expectation that it
will maintain moderate debt leverage and solid liquidity.

S&P could lower the ratings if MegaFon's adjusted debt to EBITDA
exceeds 2x on a prolonged basis, as a result of financial policy
decisions, or in case of a pronounced weakening of the operating
performance, driven by the weaker market environment in Russia.
Upside on the rating is constrained by the rating and T&C
assessment on Russia, as S&P do not expect to rate MegaFon above
the sovereign on a foreign currency basis.

                         RETAIL COMPANIES

PJSC Magnit

The outlook revision to stable follows the same action on Russia.
It reflects S&P's view that Magnit's resilient operational
performance will continue.  S&P also expects Magnit's adjusted
debt to EBITDA will remain broadly at the current level, despite
its continued focus on growth and expansionary capital spending.
S&P could lower the rating if Magnit's liquidity worsens to less
than adequate, and if the company's adjusted debt to EBITDA
surpasses 2x because of financial policy decisions, or in case of
a significant decline in operating performance caused by the
weaker market environment in Russia.  The rating has no upside
potential, as S&P do not expect to rate Magnit above the
sovereign.

                        TRANSPORTATION COMPANIES

PAO Sovcomflot

The outlook revision follows the same action on Russia.  Because
S&P considers Sovcomflot to be a GRE, it could lower the rating on
Sovcomflot if S&P lowered the rating on Russia, all else remaining
equal.  S&P could also lower the ratings if it revised downward
its assessment of the likelihood of government support.  This
could arise if, for example, the government decreased its stake in
the company to less than 75%, commenced important hydrocarbon
energy projects without Sovcomflot, or became less involved in
determining Sovcomflot's strategy.

S&P could also lower the ratings if Sovcomflot's SACP
deteriorated.  This would occur if we believed that the company's
ratio of liquidity sources to uses deteriorated to less than 1.2x,
which could happen, for example, if Sovcomflot were unlikely to
retain ready access to ship financing or generated materially
lower EBITDA than in S&P's base case, due for instance to lower-
than-anticipated charter rates.  Likewise, rating downside could
arise if Sovcomflot pursued large debt-funded investments beyond
S&P's base-case forecast for capex and failed to achieve a rating-
commensurate ratio of adjusted FFO to debt of more than 12%.  Such
deterioration in the SACP might also signal a weakening of
Sovcomflot's role for and link with the government, leading S&P to
reassess its view of the likelihood of government support.

                 INFRASTRUCTURE AND UTILITY COMPANIES

OAO AK Transneft

The outlook revision follows a similar action on Russia.  S&P
continues to see an extremely high likelihood that the Russian
government would provide timely and sufficient extraordinary
support to Transneft in the event of financial distress, and S&P
assess Transneft's SACP at 'bbb'.  S&P would likely lower its
ratings on Transneft if S&P was to lower its sovereign credit
ratings on Russia.  This is because S&P currently caps the ratings
on Transneft at the level of S&P's ratings on Russia, based on the
group's status as a GRE with a very strong link to and critical
role for the government.  S&P also incorporates its view of the
risk of negative government intervention if the government is
under stress.  Therefore, S&P do not expect to rate Transneft
above the sovereign.  If S&P revised down the SACP to 'bb',
provided that the sovereign credit ratings and the level of
government support remain unchanged, S&P would lower its long-term
LC rating on Transneft to 'BB+'.  S&P could lower the long-term FC
rating to 'BB' if the SACP fell below 'bb-'.  This could occur if
the company took on debt-financed investments or dividends
markedly larger than S&P's current base-case assumptions.  Ratings
upside is currently limited due to the cap by the sovereign
ratings.

Federal Grid Co. of the Unified Energy System (FGC).  The outlook
revision follows the rating action on Russia.

In S&P's view there's still a very high likelihood that FGC would
receive timely and sufficient extraordinary support from the
Russian government, if needed.  S&P continues to assess FGC's SACP
as 'bb+'.

S&P expects that the rating on FGC will continue to be capped by
the long-term FC sovereign credit rating on Russia, given the full
exposure of the company's operations to Russia country risk, its
very strong links with the government, and the risks of negative
sovereign intervention.

Conversely, S&P's expectation of a very high likelihood of
sovereign support creates some cushion against any weakening in
the stand-alone performance, which S&P currently do not expect.
If the sovereign credit rating and S&P's assessment of the
likelihood of extraordinary support to the company remain
unchanged, the rating on FGC would move down if the company's SACP
weakens from 'bb+' currently to 'b+', which is very far from S&P's
base-case scenario.

JSC Federal Passenger Company (FPC)

The outlook revision follows the rating action on Russia.  S&P
believes there is a high likelihood of the Russian government
providing timely and sufficient extraordinary support to FPC if
needed.  S&P continues to assess FPC's SACP as 'bb+'.

The ratings on FPC continue to be capped by the ratings on Russia,
as the company conducts all of its business in Russia and has a
strong link with the Russian government.  S&P expects that FPC
will maintain its stable market positions, its important role in
passenger transportation in Russia, and its moderate leverage
level.  S&P expects that FPC's ratio of FFO to debt will not fall
below 45% in the coming months.  If this were to happen, S&P could
revise FPC's SACP downward to 'bb', although this would not prompt
S&P to lower the rating on FPC.

S&P could lower the rating on FPC if S&P was to reassess the SACP
on FPC to 'b+'.

Mosenergo PJSC
The outlook revision follows the rating action on ultimate parent
company Gazprom.

In S&P's view Mosenergo remains a moderately strategic subsidiary
of the Gazprom group, which results in a one-notch uplift from the
SACP.  S&P continues to assess Mosenergo's SACP as 'bb'.

S&P expects that the ratings on Mosenergo will continue to be
capped by the FC rating on Gazprom, given the company's status
within the group.

S&P would lower its rating on Mosenergo if S&P lowers the LC or FC
rating on Gazprom, because it would signal Gazprom's lessened
ability to support the company.  S&P could also lower the rating
if it saw significant deterioration in Mosenergo's SACP, for
example, if the company made acquisitions, with debt to EBITDA
exceeding 3x and FFO to debt falling below 30%.

Public Joint Stock Company Rosseti

The outlook revision follows the same action on Russia.  S&P
continues to see a very high likelihood that the Russian
government would provide extraordinary support to Rosseti, given
the company's position as the monopoly electricity transmission
and dominant distribution provider in Russia, strong track record
of ongoing government support to the company (via capital
injections and infrastructure bonds), and the government's
position as a stable majority shareholder with a strong influence
over the company's strategy.  On the stand-alone level, S&P
expects Rosseti's performance to remain relatively stable, with
solid market position, EBITDA margin of about 30%, debt to EBITDA
of less than 4x, FFO to debt of above 20%, adequate liquidity, and
manageable maturity profile.  S&P's base-case scenario does not
include any material change to the group structure and, therefore,
market position.

Russian Railways JSC (RZD)

The outlook revision follows the rating action on Russia.

S&P continues to see the likelihood of timely and sufficient
extraordinary financial support from the Russian government for
RZD as extremely high.  The ratings on RZD continue to be capped
by the ratings on Russia, reflecting the fact that all of RZD's
operations are in Russia and that the company has a very strong
link with the government through tariff setting, strategic
planning, and ongoing financial support.

S&P could lower its ratings on RZD, all else being equal, if S&P
revised its assessment of its SACP down to 'b+'.  This could occur
if the company's operational performance deteriorated
significantly, due to freight traffic declines, weaker economic
conditions, lower-than-anticipated ongoing government financial
support, increased investments (including acquisitions), or
excessive debt accumulation above our expectations.  S&P would
reassess RZD's SACP to 'b+', provided that the company's business
risk profile remained in S&P's satisfactory category, if its
adjusted credit metrics deteriorated substantially.  Specifically,
this would include FFO to debt falling below 12% and debt to
EBITDA rising above 5x, in the absence of a sound plan to improve
these ratios over the next few years.

DME Ltd.

The negative outlook on Domodedevo airport reflects the risks
brought by the economic slowdown in Russia, which could lead to
weaker profitability for DME in the coming months.  The negative
outlook also reflects airport's investment program which could
result in our ratio of funds from operations to debt declining to
below 45% on a sustainable basis.

S&P could revise the outlook on DME to stable if S&P saw a
sustainable recovery of passenger traffic and profitability at the
airport and a more conservative investment program largely funded
by internally generated cash flows.

RATINGS LIST

                                Gazprom PJSC

Outlook Action; Ratings Affirmed
                                 To                 From
Gazprom PJSC
Corporate Credit Rating
   Foreign Currency              BB+/Stable/B       BB+/Neg./B
   Local Currency                BBB-/Stable/A-3    BBB-/Neg./A-3

                              Gazprom Neft PJSC

Outlook Action; Ratings Affirmed
                                 To                 From
Gazprom Neft PJSC
Corporate Credit Rating         BB+/Stable/--      BB+/Neg./--
Russia National Scale           ruAA+              ruAA+

                                  LUKOIL PJSC

Outlook Action; Ratings Affirmed
                                  To                 From
LUKOIL PJSC
Corporate Credit Rating          BBB-/Stable/--     BBB-/Neg./--
Russia National Scale            ruAAA              ruAAA

                                  NLMK PJSC

Outlook Action; Ratings Affirmed
                                  To                 From
NLMK PJSC
Corporate Credit Rating          BBB-/Stable/--     BBB-/Neg./--
Russia National Scale            ruAAA              ruAAA

                                  Oil Company Rosneft OJSC

Outlook Action; Ratings Affirmed
                                  To                 From
Oil Company Rosneft OJSC
Corporate Credit Rating          BB+/Stable/--      BB+/Neg./--

                                   PAO Severstal

Outlook Action; Ratings Affirmed
                                To                 From
PAO Severstal
Corporate Credit Rating        BBB-/Stable/--     BBB-/Neg./--
Russia National Scale          ruAAA              ruAAA

                                MMC Norilsk Nickel OJSC

Ratings Affirmed

MMC Norilsk Nickel OJSC
Corporate Credit Rating        BBB-/Neg./--
Russia National Scale          ruAAA

                                PhosAgro OJSC

Ratings Affirmed

PhosAgro OJSC
Corporate Credit Rating        BBB-/Negative/--
Russia National Scale          ruAAA

                                OAO Novatek

CreditWatch Action; Ratings Affirmed
                                To                 From
OAO NOVATEK
Corporate Credit Rating        BB+/Watch Pos/--   BB+/Neg./--
Russia National Scale          ruAA+              ruAA+

                                Mobile TeleSystems (OJSC)

Outlook Action; Ratings Affirmed
                                To                 From
Mobile TeleSystems (OJSC)
Corporate Credit Rating        BB+/Stable/--      BB+/Neg./--

                              Rostelecom OJSC

Outlook Action; Ratings Affirmed
                              To                 From
Rostelecom OJSC
Corporate Credit Rating      BB+/Stable/--      BB+/Neg./--

                                 MegaFon PJSC

Outlook Action; Ratings Affirmed
                                 To                 From
MegaFon PJSC
MegaFon Finance LLC
Corporate Credit Rating
  Foreign Currency               BB+/Stable/--      BB+/Neg./--
  Local Currency                 BBB-/Stable/--     BBB-/Neg./--
Russia National Scale           ruAAA              ruAAA

                                 PJSC Magnit

Outlook Action; Ratings Affirmed
                                 To                 From
PJSC Magnit
Corporate Credit Rating         BB+/Stable/--      BB+/Neg./--

                                 PAO Sovcomflot

Outlook Action; Ratings Affirmed
                                 To                 From
PAO Sovcomflot
Corporate Credit Rating         BB+/Stable/--      BB+/Neg./--
Russia National Scale           ruAA+              ruAA+

                                 OAO AK Transneft

Outlook Action; Ratings Affirmed
                                 To                 From
OAO AK Transneft
Corporate Credit Rating
  Foreign Currency               BB+/Stable/--      BB+/Neg./--
  Local Currency                 BBB-/Stable/--     BBB-/Neg./--

                 Federal Grid Co. of the Unified Energy System

Outlook Action; Ratings Affirmed
                                 To                 From
Federal Grid Co. of the Unified Energy System
Corporate Credit Rating         BB+/Stable/--      BB+/Neg./--
Russia National Scale           ruAA+              ruAA+

                          JSC Federal Passenger Company

Outlook Action; Ratings Affirmed
                                  To                 From
JSC Federal Passenger Company
Corporate Credit Rating          BB+/Stable/--      BB+/Neg./--

                                Mosenergo PJSC

Outlook Action; Ratings Affirmed
                                  To                 From
Mosenergo PJSC
Corporate Credit Rating          BB+/Stable/--      BB+/Neg./--
Russia National Scale            ruAA+              ruAA+

                          Public Joint Stock Company Rosseti

Outlook Action; Ratings Affirmed
                                  To                 From
Public Joint Stock Company Rosseti
Corporate Credit Rating          BB+/Stable/B       BB+/Neg./B
Russia National Scale            ruAA+              ruAA+

                                Russian Railways JSC

Outlook Action; Ratings Affirmed
                                To                 From
Russian Railways JSC
Corporate Credit Rating
  Foreign Currency              BB+/Stable/--      BB+/Neg./--
  Local Currency                BBB-/Stable/--     BBB-/Neg./--
Russia National Scale          ruAAA              ruAAA

                                DME Ltd.

Ratings Affirmed

DME Ltd.
Hacienda Investments Ltd
Domodedovo International Airport CJSC
Corporate Credit Rating        BB+/Neg./B

                 Rosneft International Holdings Limited

Outlook Action; Ratings Affirmed

Rosneft International Holdings Limited
Corporate Credit Rating        BB+/Stable/--       BB+/Neg./--

                              Gazprom Capital OOO

Outlook Action; Ratings Affirmed

Gazprom Capital OOO
Corporate Credit Rating
   Local Currency               BBB-/Stable/--      BBB-/Neg./--
   Foreign Currency             BB+/Stable/--       BB+/Neg./--

                             SCF Capital Limited

Outlook Action; Ratings Affirmed

SCF Capital Limited
Corporate Credit Rating        BB+/Stable/--       BB+/Neg./--
Russia National Scale          ruAA+               ruAA+

                           Novatek Finance Ltd.

CreditWatch Action

Novatek Finance Ltd.
Senior Unsecured Rating        BB+/Watch Pos/--    BB+/--

NB: This list does not include all the ratings affected.



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


PETROPLUS MARKETING: Sept. 26 Distribution List Appeals Deadline
----------------------------------------------------------------
The provisional distribution list for the first interim payment
that has been drawn up in the debt restructuring proceedings with
assignment of assets concerning Petroplus Marketing AG in debt
restructuring liquidation, Industriestrasse 24, 6304 Zug, will be
open to inspection by the creditors concerned between
September 14, 2016 and September 26, 2016 at the offices of the
liquidators, Brigitte Umbach-Spahn and Karl Wuethrich,
Attorneys-at-Law, Wenger Plattner, Seestrasse 39, Goldbach-Center,
8700 Kuesnacht (please call the hotline on +41 43 222 38 50 to
arrange an appointment).

Appeals against the provisional distribution list must be lodged
with the Obergericht Zug, Beschwerdeabteilung als
Aufischtsbehoerde ueber Schuldbetreibung und Konkurs,
Kirchenstrasse 6, Postfach 760, 6301 Zug, within ten 10 days of
the list's publication, i.e. by September 26, 2016 (date of
postmark of a Swiss post office).  If no appeals are lodged, the
first interest payment will be made as provided for in the
provisional distribution list.



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


FAB UK 2004-1: S&P Lowers Rating on Class BE Notes to CC
--------------------------------------------------------
S&P Global Ratings took various rating actions in FAB UK 2004-1
Ltd.

Specifically, S&P has:

   -- Raised its ratings on the class A-1E, A-1F, A-2E, and S1
      notes;
   -- Affirmed its ratings on the class A-3E and A-3F notes; and
   -- Lowered its rating on the class BE notes.

The rating actions follow S&P's updated credit and cash flow
analysis of the transaction using data from the July 2016 trustee
report, and the application of its relevant criteria.

Similar to S&P's previous review of the transaction, the class
A-1E and A-1F notes have continued to amortize as the transaction
continues to deleverage.

At closing, the class S1 notes represented GBP10 million of
combination notes, which comprise GBP7.5 million of class A-1F
notes and GBP2.5 million of class C subordinated notes.  S&P's
rating on the class S1 combination notes addresses the payment of
GBP7.5 million of principal, of which S&P calculates an
outstanding rated balance of GBP1.3 million.  Based on the
reduction in the outstanding rated balance, S&P's credit and cash
flow analysis indicates that the class S1 notes are able to
achieve a higher rating.  S&P has therefore raised its rating on
this class of notes.

Since S&P's previous review, the class A-1E and A1-F notes have
amortized by approximately GBP6.8 million, which has increased the
available credit enhancement for all classes of notes.

Overall, S&P's analysis indicates that the underlying portfolio's
general credit quality has remained relatively stable at the 'BBB'
rating category.  Despite this, S&P has seen an increase in the
assets rated in the 'CCC' category, with one such asset now
representing 5.2% of the outstanding portfolio, up from 1.3% at
S&P's previous review.

The portion of performing assets not rated by S&P Global Ratings
is 1.7%.  In this case, S&P applies its third-party mapping
criteria to map notched ratings from another ratings agency and to
infer our rating input for the purpose of inclusion in CDO
Evaluator.  In performing this mapping, S&P generally applies a
three-notch downward adjustment for structured finance assets that
are rated by one rating agency and a two-notch downward adjustment
if the asset is rated by two rating agencies.

Taking into account the ratings on the portfolio, S&P's credit
analysis indicates that its scenario default rates (SDRs) -- the
level of defaults that S&P expects the transaction to incur at the
respective rating levels -- have decreased since S&P's previous
review at all levels except for the 'AAA' and 'AA+' levels.

The class A overcollateralization test is now passing.

"We conducted our cash flow analysis to determine the break-even
default rate (BDR) for each rated class of notes.  The BDR
represents our estimate of the maximum level of gross defaults,
based on our stress assumptions, that a tranche can withstand and
still fully repay the noteholders.  We used the portfolio balance
that we consider to be performing, the reported weighted-average
spread, and the weighted-average recovery rates that we considered
to be appropriate.  We incorporated various cash flow stress
scenarios using our shortened and additional default patterns and
levels for each rating category assumed for each class of notes,
combined with different interest stress scenarios as outlined in
our criteria," S&P said.

Overall, S&P's credit and cash flow results indicate that the
available credit enhancement for the class A-1E, A-1F, and A-2E
notes is commensurate with higher ratings than those currently
assigned.  S&P has therefore raised its ratings on these classes
of notes.

S&P's analysis also indicates that the available credit
enhancement does not support its current ratings on the class
A-3E and A-3F notes.  However, the current BDR is still positive.
S&P has therefore affirmed its 'CCC- (sf)' ratings on these
classes of notes in line with S&P's criteria for assigning 'CCC'
category ratings.

At the same time, S&P has lowered to 'CC (sf)' from 'CCC- (sf)'
its rating on the class BE notes as the available credit
enhancement is not commensurate with the currently assigned
rating.

FAB UK 2004-1 is a cash flow mezzanine structured finance
collateralized debt obligation (CDO) transaction that closed in
April 2004.

RATINGS LIST

Class              Rating
            To                From

FAB UK 2004-1 Ltd.
GBP214.5 Million Fixed-, Floating-, And Zero-Coupon Notes

Ratings Raised

A-1E        BBB (sf)          BB+ (sf)
A-1F        BBB (sf)          BB+ (sf)
A-2E        BB (sf)           B+ (sf)
S1          AAp (sf)          BBB- (sf)

Ratings Affirmed

A-3E        CCC- (sf)
A-3F        CCC- (sf)

Rating Lowered

BE          CC (sf)           CCC- (sf)


GULF KEYSTONE: Lenders Back Proposed Restructuring
--------------------------------------------------
Proactive Investors reports that Gulf Keystone Petroleum Limited's
lenders have overwhelmingly supported the troubled oil firm's
proposed restructuring.

In a statement on Sept. 22, Gulf Keystone confirmed that 90% of
the guaranteed noteholders have voted to accept the proposal, and
84% of the convertible bondholders also gave their approval for
the restructuring which will see US$500 million of debt swapped
for new shares in the company, Proactive Investors relates.

Gulf Keystone highlighted that the restructuring, which also
includes a fresh USUS$25 million fundraise, was "on track" and is
expected to complete on or around Oct. 14, Proactive Investors
relays.

According to Proactive Investors Jon Ferrier, Gulf Keystone chief
executive, told investors that the company will soon be in "the
strongest position it has been in for a number of years" once the
restructuring has been secured.

"Upon completion of the restructuring we will be able to
effectively relaunch Gulf Keystone," Proactive Investors quotes
Mr. Ferrier as saying.

"We will benefit from an enhanced balance sheet, a well understood
field which continues to perform above expectations and a clear
path to significantly increasing production and growing value over
time."

The new cash raised in the restructuring is earmarked for
maintenance and investment, which is expected to protect the
Shaikan field from decline, with output rates anticipated at
around 40,000 bopd as a result, Proactive Investors discloses.

                       Debt-for-Equity Swap

As reported by the Troubled Company Reporter-Europe on July 19,
2016, Reuters related that distressed debt funds will become big
shareholders in troubled oil firm Gulf Keystone after bondholders
agreed to swap US$500 million of debt for equity, wiping out some
of the world's top funds as shareholders.  According to Reuters,
the firm has been fighting to avoid insolvency after low oil
prices and overdue oil export payments from the Kurdistan
regional government crippled its balance sheet.

Gulf Keystone Petroleum Limited is an oil and gas exploration and
production company operating in the Kurdistan region of Iraq.  It
is listed on the main market of the London Stock Exchange.


JERROLD HOLDINGS: S&P Puts 'BB-' Rating on CreditWatch Negative
---------------------------------------------------------------
S&P Global Ratings said that it placed its 'BB-' long-term
counterparty credit rating on Jerrold Holdings Ltd. (trading as
Together) on CreditWatch with negative implications.

At the same time, S&P placed the 'BB-' issue rating on Jerrold
Finco PLC's senior secured notes on CreditWatch with negative
implications.

Together announced on Sept. 15, 2016 that its majority shareholder
intends to undertake a debt-financed buyout of its two private
equity investors, Equistone and Standard Life, which have been
shareholders since 2006 and jointly hold 30% of voting rights.
The group expects the debt to be issued from a new intermediate
holding company, which will sit above Jerrold Holdings Ltd. in the
legal structure.  If the transaction proceeds, S&P notes that the
Moser family will own all of the company excluding a continued
small non-voting stake held by other members of the senior
management team.

The CreditWatch reflects S&P's view that if the transaction
proceeds, Together's very strong capital position could weaken,
with the consolidated risk-adjusted capital ratio potentially
falling below the 15% threshold in our criteria.  However, S&P
expects that the ratio should remain above 10%, reflecting the
high starting point.  S&P also believes that Together will
continue to generate capital through retained earnings.
Therefore, on resolution of the CreditWatch, S&P expects any
downgrade will likely be limited to one notch.


MARKETPLACE ORIGINATED 2016-1: Moody's Rates Cl. D Notes (P)Ba3
---------------------------------------------------------------
Moody's Investors Service has assigned these provisional ratings
to notes to be issued by Marketplace Originated Consumer Assets
2016-1 plc:

  GBP114.0 million Class A Notes due October 2024, Assigned
   (P)Aa3 (sf)
  GBP7.5 million Class B Notes due October 2024, Assigned
   (P)A2 (sf)
  GBP7.5 million Class C Notes due October 2024, Assigned
   (P)Baa2 (sf)
  GBP9.0 million Class D Notes due October 2024, Assigned
   (P)Ba3 (sf)
  GBP12.0 million Class Z Notes will not be rated.

                          RATINGS RATIONALE

The provisional rating assignments reflect the transaction's
structure as a static cash securitization of unsecured consumer
loans, originated through a marketplace lending online platform in
the UK.  Zopa Limited (not rated) operates the platform and
manages the underwriting process.  P2P Global Investments PLC (not
rated) was the initial lender of the securitized loan portfolio.
The platform provider, Zopa, also acts as the servicer of the
portfolio.  Target Servicing Limited (not rated) has been
appointed as back-up servicer of the transaction.

The securitized portfolio as of Aug. 31, 2016, consists of
unsecured consumer loans to UK private borrowers.  According to
the borrower but not verified by the platform provider these loans
are mainly used to finance cars (36.2%), for debt consolidation
(34.0%) and for home improvements (22.3%).  The portfolio consists
of 27,137 contracts with a weighted average seasoning of 10 months
and a maximum loan term of five years.  Most borrowers are
employed full-time (89.9%) and their average outstanding loan
balance with Zopa is GBP 5,500.

According to Moody's, the transaction benefits from: (i) a
granular portfolio originated through the Zopa marketplace lending
platform, (ii) a static structure that does not allow to buy
additional receivables after closing, (iii) continuous portfolio
amortization from day one, (iv) an independent cash manager and
liquidity provided through two reserve funds, (v) an appointed
back-up servicer at closing, and (vi) credit enhancement provided
through subordination of the notes, reserve funds and excess
spread.

Moody's notes that the transaction may be negatively impacted by:
(i) misalignment of interest between the platform provider Zopa
and investors who finance the loans, (ii) the fact that Zopa does
not retain a direct economic interest in the securitized
portfolio, (iii) the limited historical data that does not cover a
full economic cycle, (iv) a higher fraud risk due to the online
origination process, (v) an unrated servicer with limited
financial strength, and (vi) the regulatory uncertainty due to the
still developing regulation for the marketplace lending segment.

Moody's analysis focused, amongst other factors, on (i) historical
performance data, (ii) the loan-by-loan data for the securitized
portfolio including internal and external credit scores, (iii) the
credit enhancement provided by subordination, the reserve fund and
excess spread, (iv) the liquidity support available in the
transaction by way of principal to pay interest and the liquidity
reserve for the most senior outstanding class of notes, and (v)
the appointment of the back-up servicer at closing.

                          MAIN MODEL ASSUMPTIONS

Moody's determined the portfolio lifetime expected defaults of
7.0%, expected recoveries of 5% and Aaa portfolio credit
enhancement ("PCE") of 35.0% related to the loan portfolio.  The
expected defaults and recoveries capture our expectations of
performance considering the current economic outlook, while the
PCE captures the loss we expect the portfolio to suffer in the
event of a severe recession scenario.  Expected defaults and PCE
are parameters used by Moody's to calibrate its lognormal
portfolio default distribution curve and to associate a
probability with each potential future default scenario in the
ABSROM cash flow model to rate Consumer ABS.

Portfolio expected defaults of 7.0% are higher than the EMEA
consumer loan average and are based on Moody's assessment of the
lifetime expectation for the pool taking into account (i) limited
historical performance data of the loan book of the originator,
(ii) benchmark transactions, (iii) the current economic
uncertainty in the UK, and (iv) a rather new originator with a new
business concept compared to classical loan origination.

Portfolio expected recoveries of 5% are lower than the EMEA
consumer loan average for unsecured consumer loans and are based
on Moody's assessment of the lifetime expectation for the pool
taking into account (i) the limited strength and experience of the
servicer (ii) historical performance of the loan book of the
originator, and (iii) benchmark transactions.

The Aaa PCE of 35.0% is higher than the EMEA consumer loan average
and is based on Moody's assessment of the pool taking into account
the relative ranking of the platform provider to originator peers
in the EMEA consumer loan market.  The PCE level of 35.0% results
in an implied coefficient of variation ("CoV") of 40.8%.

                           METHODOLOGY

The principal methodology used in these ratings was "Moody's
Approach to Rating Consumer Loan-Backed ABS" published in
September 2015.

The ratings address the expected loss posed to investors by the
legal final maturity of the notes.  In Moody's opinion, the
structure allows for timely payment of interest on the class A
notes and the ultimate payment of interest and principal at par on
the class A to D notes, on or before the legal final maturity.
Moody's ratings address only the credit risks associated with the
transaction.  Other non-credit risks have not been addressed but
may have a significant effect on yield to investors.

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

FACTORS THAT WOULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS:
FACTORS THAT WOULD LEAD TO AN UPGRADE OF THE RATINGS:

Significantly better-than-expected performance of the securitized
portfolio would lead to an upgrade of the ratings, all else being
equal.

FACTORS THAT WOULD LEAD TO A DOWNGRADE OF THE RATINGS:

Factors that may cause a downgrade of the rated notes include: (i)
a decline of the performance of the pool beyond our expectations,
(ii) a significant deterioration of the credit profile of the
servicer, or (iii) unexpected, negative changes in the regulatory
or market environment of the marketplace lending segment.

LOSS AND CASH FLOW ANALYSIS:

Moody's used its cash flow model Moody's ABSROM as part of its
quantitative analysis of the transaction.  Moody's ABSROM model
enables users to model various features of a standard European ABS
transaction - including the specifics of the loss distribution of
the assets, their portfolio amortization profile and yield.  On
the liability side of the ABS structure subordination and reserve
fund.

STRESS SCENARIOS:

In rating consumer loan ABS, default rate and recovery rate are
two key inputs that determine the transaction cash flows in the
cash flow model.  Parameter sensitivities for this transaction
have been tested in the following manner: Moody's tested six
scenarios derived from a combination of mean default rate: 7.0%
(base case), 7.5% (base case + 0.5%), 8.0% (base case + 1.0%) and
recovery rate: 5.0% (base case), 0% (base case - 5%).

The model output results for the class A notes under these
scenarios vary from Aa3 (base case) to A2 assuming the mean
default rate is 8.0% and the recovery rate is 0%, all else being
equal.  Parameter sensitivities provide a quantitative/model
indicated calculation of the number of notches that a Moody's
rated structured finance security may vary if certain input
parameters used in the initial rating process differed.  The
analysis assumes that the deal has not aged.  It is not intended
to measure how the rating of the security might migrate over time,
but rather how the initial model output for the class A notes
might have differed if the two parameters within a given sector
that have the greatest impact were varied.  Model output results
for the class B to D notes are shown in the pre-sale report for
this securitization.


SEAPETS: Goes Into Administration
---------------------------------
Pet Business World reports that Seapets, a long-established pet
superstore in Essex, has gone into administration after closing
suddenly.

Louise Donna Baxter -- louise.baxter@begbies-traynor.com -- and
Lloyd Biscoe -- Lloyd.biscoe@begbies-traynor.com -- of Begbies
Traynor were appointed as joint administrators to Seapets on
September 8.

Customers had turned up at Seapets, in Stanway, Colchester, Essex,
on Friday, September 2, to find its doors locked and notices in
the windows advising them the store had closed down, the report
relates.

Another notice tried to allay customer concerns that no livestock
were left in the building, saying: "Please do not worry! There is
[sic] no livestock or animals left in the building. All have now
been re-homed," the report relays.

The report discloses that Seapets had both the superstore location
and an online presence.  Its website and Facebook pages have been
taken down and the telephone line is unmanned.

Husband and wife Jerry (Jeremy) and Pauline Arnold set up Seapets
Ltd in 2003 and Seapets Online in 2012, although the business had
been selling over the internet for many years.  Jerry had a long
association with the trade, going back to 1974 and has been a new
product judge at the PATS and AQUA trade shows and a speaker at
the UK Petcare Forum.

A third director, Tamsin Hegarty, left the company in March this
year, the report notes.

Seapets described its online site as 'the UK's leading online pet,
pond and aquatic superstore' with 'over 11,000 products available
from our searchable database', though the store was an aquatics
specialist and had a large range of tanks instore, the report
relates.

Earlier this year, Seapets appointed Colchester freight delivery
provider Pallet Plus to deliver its fish tanks and terrariums.
Jerry said at the time that Seapets sent about 20 pallets a day to
customers all over the country, the report recalls.

Several customers have posted on Facebook alleging they have made
online purchases worth between GBP40 and GBP450, but that they had
not received their orders. They said they were claiming back via
Paypal or their credit card providers, the report notes.

Colchester Borough Council's Environmental Health team carried out
a routine inspection on August 23, the report relays.  At the time
of writing, neither the council nor Trading Standards at Essex
Country Council had received any complaints from customers, the
report notes.



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


* EUROPE: Biggest Banks Need to Set Aside Funds Twice ECB Capital
-----------------------------------------------------------------
Boris Groendahl at Bloomberg News reports that Elke Koenig, head
of the Single Resolution Board, said the euro area's biggest banks
will be asked to earmark funds equivalent to more than twice their
minimum capital requirements to make sure a possible emergency
doesn't cost taxpayers.

Mr. Koenig said in an interview this month the Brussels-based SRB,
the resolution authority for 142 banks including Deutsche Bank AG
and BNP Paribas SA, will use the minimum capital requirement set
by the European Central Bank as a proxy for funds that would be
needed to absorb losses and allow recapitalization in a crisis,
Bloomberg recounts.  The ECB last year set an average requirement
for the highest-quality capital of 9.9% of risk-weighted assets,
Bloomberg relays.

Mr. Koenig, as cited by Bloomberg, said requiring banks to have at
least the same amount again in loss-absorbing liabilities will
ensure that they can recapitalize themselves quickly after
restructuring.  She said this minimum requirement of own funds and
eligible liabilities, or MREL, is calculated at the
"30,000-foot level," and more precise levels tailored to each bank
will follow after the ECB sets new capital requirements and
changes are made to capital, bank-failure and insolvency rules,
Bloomberg notes.

A crucial factor in how hard it will be for banks to reach the
target could be changes to insolvency laws that have already
started in countries including Germany, France and Italy,
Bloomberg states.  Ms. Koenig said the French model, which
effectively introduces a new asset class sandwiched between senior
and hybrid bonds, could be rolled out throughout the bloc,
Bloomberg relays.


* BOOK REVIEW: The First Junk Bond
----------------------------------
Author: Harlan D. Platt
Publisher: Beard Books
Softcover: 236 pages
List Price: $34.95
Review by Gail Owens Hoelscher

Order your personal copy today and one for a colleague at
http://www.beardbooks.com/beardbooks/the_first_junk_bond.html
Only one in ten failed businesses is equal to the task of
reorganizing itself and satisfying its prior debts in some
fashion. This engrossing book follows the extraordinary journey
of Texas International, Inc (known by its New York Stock
Exchange stock symbol, TEI), through its corporate growth and
decline, debt exchange offers, and corporate renaissance as
Phoenix Resource Companies, Inc. As Harlan Platt puts it, TEI
"flourished for a brief luminous moment but then crashed to
earth and was consumed." TEI's story features attention-grabbing
characters, petroleum exploration innovations, financial
innovations, and lots of risk taking.

The First Junk Bond was originally published in 1994 and
received solidly favorable reviews. The then-managing director
of High Yield Securities Research and Economics for Merrill
Lynch said that the book "is a richly detailed case study. Platt
integrates corporate history, industry fundamentals, financial
analysis and bankruptcy law on a scale that has rarely, if ever,
been attempted." A retired U.S. Bankruptcy Court judge noted,
"(i)t should appeal as supplementary reading to students in both
business schools and law schools. Even those who practice in the
areas of business law, accounting and investments can obtain a
greater understanding and perspective of their professional
expertise."

"TEI's saga is noteworthy because of the company's resilience
and ingenuity in coping with the changing environment of the
1980s, its execution of innovative corporate strategies that
were widely imitated and its extraordinary trading history,"
says the author. TEI issued the first junk bond. In 1986 it
achieved the largest percentage gain on the NYSE, and in 1987
suffered the largest percentage loss. It issued one of the first
bonds secured by a physical commodity and then later issued one
of the first PIK (payment in kind) bonds. It was one of the
first vulture investors, to be targeted by vulture investors
later on. Its president was involved in an insider trading
scandal. It innovated strip financing. It engaged in several
workouts to sell off operations and raise cash to reduce debt.
It completed three exchange offers that converted debt in to
equity.

In 1977, TEI, primarily an oil production outfit, had had a
reprieve from bankruptcy through Michael Milken's first ever
junk bond. The fresh capital had allowed TEI to acquire a
controlling interest of Phoenix Resources Company, a part of
King Resources Company. TEI purchased creditors' claims against
King that were subsequently converted into stock under the terms
of King's reorganization plan. Only two years later, cash
deficiencies forced Phoenix to sell off its nonenergy
businesses. Vulture investors tried to buy up outstanding TEI
stock. TEI sold off its own nonenergy businesses, and focused on
oil and gas exploration. An enormous oil discovery in Egypt made
the future look grand. The value of TEI stock soared. Somehow,
however, less than two years later, TEI was in bankruptcy. What
a ride! All told, the book has 63 tables and 32 figures on all
aspects of TEI's rise, fall, and renaissance. Businesspeople will
find especially absorbing the details of how the company's
bankruptcy filing affected various stakeholders, the bankruptcy
negotiation process, and the alternative post-bankruptcy financial
structures that were considered. Those interested in the oil and
gas industry will find the book a primer on the subject, with an
appendix devoted to exploration and drilling, and another on oil
and gas accounting.

Harlan Platt is professor of Finance at Northeastern University.
He is president of 911RISK, Inc., which specializes in
developing analytical models to predict corporate distress.



                            *********

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.


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