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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

           Thursday, January 26, 2017, Vol. 18, No. 19


                            Headlines


A U S T R I A

HYPO ALPE ADRIA: March 31 Deadline Set for Binding Offers


B E L A R U S

BELAGROPROMBANK JSC: S&P Affirms B-/C Counterparty Credit Ratings


C Z E C H   R E P U B L I C

RPG BYTY: Fitch Affirms Then Withdraws 'B+' LT IDR


D E N M A R K

* DENMARK: Regulator to Take Aggressive Approach with Banks


F R A N C E

FCC SURF: S&P Puts Cl. B1 & B2 Notes' 'BB' Ratings on Watch Pos.
LION/SENECA FRANCE: Moody's Continues Ratings Review for Upgrade


I R E L A N D

BUS EIREANN: Unions to Meet Today to Discuss Strategy
KBC BANK: Parent Set to Provide EUR5-Bil. Funding Line


I T A L Y

BANCO POPOLARE: Fitch Withdraws 'BB-/B' Issuer Default Ratings
MONTE DEI PASCHI: Regulator Seeks to Protect Jr. Bondholders
SESTANTE FINANCE 3: S&P Cuts Ratings on 2 Note Classes to 'CCC-'


N E T H E R L A N D S

ALPHA 2: Moody's Assigned B2 CFR, Outlook Stable
DELFT 2017: Moody's Assigns Ba2 Definitive Rating to Cl. E Notes
LAURELIN II: Fitch Affirms Rating on Class E Notes at 'BBsf'


N O R W A Y

SPAREBANKEN VEST: Fitch Withdraws BB+ Support Rating Floor


P O R T U G A L

BANCO COMERCIAL: Moody's Affirms B1 LT Deposit & Sr. Debt Ratings


R U S S I A

RENAISSANCE CAPITAL: Fitch Affirms RFHL's B- IDR, Outlook Stable


S P A I N

AYT KUTXA: Fitch Affirms Rating on Class C Notes at 'CCCsf'


S W I T Z E R L A N D

GATEGROUP HOLDING: Moody's Affirms B1 CFR, Outlook Now Stable


U N I T E D   K I N G D O M

B&M EUROPEAN: Moody's Assigns Ba3 CFR, Outlook Stable
RICHMOND UK: S&P Assigns Preliminary 'B' CCR, Outlook Stable
TATA STEEL UK: British Steel Turnround Under Way Following Sale


                            *********



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A U S T R I A
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HYPO ALPE ADRIA: March 31 Deadline Set for Binding Offers
---------------------------------------------------------
HETA Asset Resolution d.o.o. is part of HETA Group, a wind-down
corporation owned by the Republic of Austria.  Its statutory task
is to dispose of the non-performing and non-strategic portion of
Hypo Alpe Adria, nationalized in 2009, as effectively as possible
while preserving value.

In the process of single loan sales HETA is presenting an
attractive opportunity to invest in over EUR120 million claims.
The claims towards nine individual borrowers from Slovenia are
diversified across industries, maturity and type of collateral.

More information about the individual claims and selling process
can be found at www.har.si.

Binding offers shall be submitted by March 31, 2017, 12:00 noon
(CET) at the latest.

HETA will at its discretion invite the interested parties to
perform due diligence of the financing documentation for relevant
claims.  To receive the documentation access, the interested
party must sign a non-disclosure agreement (NDA) and provide
adequate proof of possessing sufficient funds to execute the
intended purchase.  HETA may set additional conditions with
regard to granting access.

HETA reserves the right to extend or to alter any process
deadlines in the Claims selling process and / or to stop the
process altogether or partially at any time in accordance with
the principles of an open, transparent, unlimited, and non-
discriminatory process.

Expression of interest has to be sent to the Company's broker:

PRINCE CAPITAL ADVISORS, Investment Banking Advisory
New York Office
14 Wall Street, 20th Floor
New York, New York 10005

London Office
Berkeley Square House
London, W1J 6BD

Jonathan B. Horn
E-mail: Jhorn@princeca.com

Samuel P. Boyd
E-mail: Sboyd@princeca.com


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B E L A R U S
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BELAGROPROMBANK JSC: S&P Affirms B-/C Counterparty Credit Ratings
-----------------------------------------------------------------
S&P Global Ratings affirmed its long- and short-term local and
foreign counterparty credit ratings on Belarus-based
Belagroprombank JSC at 'B-/C'.  The outlook is stable.

The affirmation reflects S&P's view that ongoing support from the
Belarusian government and Belagroprombank's established market
position will balance the risks stemming from the bank's low
profitability, elevated nonperforming loans, and growing credit
costs.  The rating largely mirrors the foreign currency sovereign
credit rating on Belarus (B-/Stable/B), since the bank operates
exclusively in Belarus and remains highly exposed to the
country's risky operating environment.

S&P believes that the bank's liquidity position has improved over
the first nine months of 2016 and will remain adequate over the
coming 12 months.  In particular, the bank has reversed the
deposit outflow observed in 2015, reporting growth of customer
deposits by 5.3% in the first three quarters of 2016, supported
by the exchange rate stabilization and introduction of more
supportive deposit regulation for banks.  S&P thinks that the
risk of significant deposit withdrawals at Belagroprombank has
substantially reduced.  The bank's broad liquid assets to short-
term wholesale funding amounted to 2.03x, and net broad liquid
assets to short-term customer deposits amounted to 33.1% on
Sept. 30, 2016.  This is a significant improvement compared with
year-end 2014 and the beginning of 2015, and is now in line with
local peers'.

S&P notes, however, that Belagroprombank is still largely
dependent on short-term interbank funding for covering liquidity
gaps.  Short-term wholesale funding accounted for 17.2% of the
total funding base as of Sept. 30, 2016, which is in line with
peer banks' in Belarus.

S&P's ratings continue to be constrained by Belagroprombank's
concentration on Belarus, which is reflected in its 'b-' anchor,
which is the starting point for rating Belarusian commercial
banks.  The ratings also incorporate S&P's assessment of the
bank's adequate business position as the second-largest domestic
bank and the largest lender to the strategically important
agribusiness sector.

S&P also assess the bank's risk position as adequate.  Although
S&P expects nonperforming loans to grow in 2017 due to a
difficult macroeconomic environment, S&P considers that the
related risk will be mitigated by the bank's option to transfer
some of its problem assets to the government's Agency for Asset
Management and by the state guarantees that cover around 40% of
the bank's loan portfolio.

S&P views Belagroprombank's capital and earnings as moderate in
light of the bank's historically low margins and gradually
growing credit costs due to significant exposure to the
vulnerable agribusiness sector.  The moderate level of
capitalization and sufficient solvency levels are supported by
ongoing capital support from the government.

S&P assess the funding profile of Belagroprombank as average,
based on support from government-related entities (GREs), which
provided around 35% of the bank's funding base as of Sept. 30,
2016.  The loan-to-deposit ratio was 107.9% on Sept. 30, 2016
(improved from 120.8% at year-end 2015), while the stable funding
ratio reached 118% on the same date (improved from 111.6% on
Dec. 31, 2015).  These metrics are largely in line with local
peers'.

S&P continues to classify Belagroprombank as a GRE but S&P do not
factor into the ratings any uplift for extraordinary government
support.  In S&P's opinion, there is a moderately high likelihood
of the Belarusian government providing Belagroprombank with
timely and sufficient extraordinary support in the event of
financial distress.  S&P bases this on its view of
Belagroprombank's:

   -- Very important role in the local economy as the largest
      lender to the strategic agribusiness sector, which employs
      about one-third of Belarus' working population, and its
      high systemic importance.

   -- Limited link with the government, given that large
      contingent liabilities in Belarus affect the government's
      capacity to provide extraordinary support to GREs.

The stable outlook on Belagroprombank mirrors that on the
sovereign.  It reflects S&P's view that the bank's low
profitability and pressure on capital due to growing credit costs
will be balanced by the government's ongoing financial support
over the next 12 months.

S&P could lower the ratings if it believed that the sovereign's
ability to support Belagroprombank had diminished, as evidenced
by a weakened ability to provide funding and liquidity support.
S&P could also lower the ratings if it was to lower its sovereign
ratings on Belarus.

S&P could consider revising downward its stand-alone credit
profile (SACP) on Belagroprombank if problem loans increased
substantially within the next 12 months and required additional
provisions, with no corresponding increase in capital to maintain
S&P's risk-adjusted capital ratio sustainably above 5%.  This
might lead S&P to revise downward its assessment of the bank's
capital or risk position.  However, S&P notes that a change in
the SACP would not trigger a rating change, provided S&P
continued to incorporate ongoing government support assumptions
into its ratings on the bank.

Any positive rating action on Belagroprombank would be contingent
on the restoration of the bank's capital and earnings assessment
to adequate, as well as on a positive rating action on the
sovereign.


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C Z E C H   R E P U B L I C
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RPG BYTY: Fitch Affirms Then Withdraws 'B+' LT IDR
--------------------------------------------------
Fitch has affirmed RPG byty's Long-Term Issuer Default Rating at
'B+' with Stable Outlook. Fitch's rating on the Czech property
company has been simultaneously withdrawn for commercial reasons.
Accordingly, Fitch will no longer provide ratings or analytical
coverage for RPG.

KEY RATING DRIVERS

Not applicable

RATING SENSITIVITIES

Not applicable.


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D E N M A R K
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* DENMARK: Regulator to Take Aggressive Approach with Banks
-----------------------------------------------------------
Frances Schwartzkopff at Bloomberg News reports that Denmark's
financial regulator plans to take an aggressive approach with
banks that don't meet new rules designed to protect taxpayers.

"We need to act a lot earlier than we have acted," Bloomberg
quotes Jesper Berg, the director general of the Financial
Supervisory Authority in Copenhagen, as saying in a phone
interview.

As a regulator in the first European country ever to force losses
on senior bank creditors, Mr. Berg says Italy's plight with Banca
Monte dei Paschi di Siena is proof regulators can't afford to
wait when capital levels test lower limits, Bloomberg notes.  He
said the same conclusion can be drawn from Denmark's own
experiences during the financial crisis, Bloomberg relays.

Denmark, Bloomberg says, is taking an aggressive tack amid a lack
of clarity over what regulatory action a breach of minimum
requirements for own funds and liabilities (MREL) should trigger.
The rule is the linchpin in Europe's plan to avoid government
bailouts of banks, but according to the European Banking
Authority, the legal framework in question doesn't specify what
steps local authorities should take, according to Bloomberg.

The EBA said in December the options that authorities have are
generally "too slow" or "too uncertain," creating "practical
enforcement problems", Bloomberg recounts.  The EU has since
proposed expanding regulators' powers, Bloomberg states.

Mr. Berg says history shows it's wise to err on the side of
caution, Bloomberg relays.  "From the cases we had over the last
couple of years there have been huge losses to simple creditors,
so we need to act a lot earlier," Bloomberg quotes Mr. Berg as
saying.

Danske Bank A/S and a handful of other Danish lenders deemed to
be of systemic importance to the domestic economy must hold MREL
equal to almost a third of risk-weighted assets, Bloomberg
discloses.  As well as the existing stack of capital
requirements, MREL will include recapitalization and loss-
absorbing buffers, Bloomberg states.

If a Danish lender eats through the thin top layer of its MREL
reserves (and breaches the recapitalization buffer), the FSA is
"of the view that we can at that stage actually transfer
institutions to Financial Stability," the country's bad bank,
Mr. Berg, as cited by Bloomberg, said.  Experience shows that
waiting means "there won't be enough money," Bloomberg quotes
Mr. Berg as saying.


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F R A N C E
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FCC SURF: S&P Puts Cl. B1 & B2 Notes' 'BB' Ratings on Watch Pos.
----------------------------------------------------------------
S&P Global Ratings placed its 'BB (sf)' credit ratings on FCC
Surf's class B1 and B2 notes on CreditWatch positive.

The CreditWatch placements follow our Jan. 12, 2017 rating action
on Assured Guaranty (London) Ltd.

S&P's ratings on FCC Surf's class B1 and B2 notes are weak-linked
to the lower of (i) S&P's issuer credit rating (ICR) plus one
notch on Dexia Credit Local, as swap counterparty, and (ii) S&P's
ICR on Assured Guaranty (London), as the guarantee provider.
Under S&P's criteria applicable to transactions such as these, it
generally reflects changes to the rating on the reference
obligation in S&P's rating on the notes.

FCC Surf is a French asset-backed securities (ABS) transaction,
which securitizes the receivables arising from a bank loan to
Sanef, a French toll road operator.


LION/SENECA FRANCE: Moody's Continues Ratings Review for Upgrade
----------------------------------------------------------------
Moody's Investors Service continues to review for upgrade the
ratings of Lion / Seneca France 2 SAS and 3AB Optique
Developpement. Afflelou's ratings, including its B3 corporate
family rating (CFR), B3-PD probability of default rating, Caa2
senior unsecured rating and the B2 senior secured rating of its
subsidiary 3AB Optique Developpement were placed under review for
upgrade on October 24, 2016, following the company's filing of
document in preparation for its Initial Public Offering (IPO) on
the regulated market of Euronext Paris.

RATINGS RATIONALE

Afflelou did not launch its planned stock flotation at the end of
2016 as Moody's had initially expected, in light of unfavourable
market conditions. However, Moody's understands that Afflelou is
still considering the possibility of tapping the equity markets
in the next few months. As a result, Moody's has prolonged the
rating review.

Afflelou's plans to use proceeds from the IPO to reduce its
outstanding debt, notably redeem its senior secured and senior
unsecured notes. The execution of the IPO as proposed will lead
to a material reduction in Afflelou's net debt and a
strengthening of the company's free cash flow as a result of the
reduction in interest expense. Afflelou anticipates its net
(reported) leverage to reduce to or less than 3.0x by year-end
2017 (ending 31 July 2017) -- down from around 5.7x in Q1 2017
(ended 31 October 2016) -- should the transaction be successful.

The review will focus on how and when the equity raising will be
executed and how its proceeds will be used. The agency will also
evaluate the company's new ownership structure, financial policy
and strategic objectives. At this stage, Moody's anticipates that
the CFR could potentially be upgraded by one to two notches if
the IPO is executed as expected.

The principal methodology used in these ratings was Retail
Industry published in October 2015.

Lion / Seneca France 2 SAS is the ultimate parent holding company
of Alain Afflelou group. Headquartered in Paris, France, Afflelou
is the third largest optical retailer in the French market by
total sales volume and number two in Spain by number of
stores/sales. The company also has smaller operations in nine
other countries, notably Portugal. The company mainly operates a
franchise model mainly under the commercial names "Alain
Afflelou" and "Optical Discount" and at the end of October 2016,
the company had 1,403 stores, of which 1,215 were franchisees and
188 were directly-owned. In the twelve months to 31 October 2016
(Q1-2017), the company's revenues amounted to approximately
EUR348 million (against EUR705 million of total sales for the
whole store network).


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I R E L A N D
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BUS EIREANN: Unions to Meet Today to Discuss Strategy
-----------------------------------------------------
Martin Wall at The Irish Times reports that the Minister for
Transport Shane Ross needs to realize that the only solution to
the crisis at Bus Eireann will be for him to convene talks
involving all stakeholders, including the Department of Transport
and the National Transport Authority, unions have argued.

Management at the company was expected to reiterate to an
Oireachtas committee on Jan. 25 that the State-owned transport
operator faces running out of money within the next 18 months or
so and that all 2,600 jobs in the company are in jeopardy, The
Irish Times relates.

According to The Irish Times, unions representing employees are
to meet today, Jan. 26, to consider their strategy amid warnings
that a dispute over a radical survival plan for Bus Eireann
could, if implemented unilaterally, spread into the broader
State-transport sector including Dublin Bus and the country's
rail network.

The company experienced a setback for its industrial relations
strategy on Jan. 24 when the Labour Court declined to become
involved immediately in dealing with the financial crisis at Bus
Eireann, The Irish Times relays.


KBC BANK: Parent Set to Provide EUR5-Bil. Funding Line
------------------------------------------------------
Joe Brennan at The Irish Times, citing analysts at Deutsche Bank,
reports that Belgian-based KBC Group's EUR5 billion funding line
to its Irish unit is likely to help persuade the group to remain
in the Republic as it announces the result of a strategic review
in two weeks' time.

According to The Irish Times, KBC Group, in Ireland since 1978,
is considering whether to develop the Dublin-based unit, which
cost EUR1.4 billion to bail out during the financial crisis, into
a bank-insurance company, grow the lender organically, or sell
the business entirely.  The review has been underway for at least
a year, The Irish Times notes.

Deutsche Bank analysts said in a note published on Jan. 23 they
expect KBC Group in Brussels to maintain the "status quo", albeit
with a plan to grow organically and build up the bank-insurance
model it has in its core markets, The Irish Times relates.

"We note that the EUR5 billion of intra-group funding from KBC to
its Irish unit [is] likely to be a hurdle for a sale or exit of
the business," The Irish Times quotes the Deutsche Bank analysts,
including Flora Benhakoun, as saying, adding that KBC Group told
analysts earlier this month that it has no merger and acquisition
deals on the table at the moment.

A EUR5 billion funding line equates to about 40% of KBC Bank
Ireland's entire liabilities at the end of 2015, The Irish Times
relays, citing the company's most recent annual report.

The Financial Services Union in Dublin wrote to the chief
executive of KBC Bank Ireland, Wim Verbraeken, on Jan. 9, saying
there was "significant concern" among the bank's staff in Ireland
that its parent could sell the business here, The Irish Times
discloses.  However, the group has insisted, as a publicly quoted
company, that it could only inform staff at the same time as
other stakeholders on the outcome of the review when it publishes
its financial results on Feb. 9, according to The Irish Times.


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I T A L Y
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BANCO POPOLARE: Fitch Withdraws 'BB-/B' Issuer Default Ratings
--------------------------------------------------------------
Fitch Ratings has withdrawn Banco Popolare's and Banca Popolare
di Milano's ratings following their merger into Banco BPM S.p.A.,
which became effective on January 1, 2017. Fitch has also
affirmed and withdrawn the ratings of the outstanding rated debt
originally issued by both banks, which was transferred to the new
parent upon the merger. Fitch has also affirmed and withdrawn the
ratings of subsidiaries Banca Aletti & C. S.p.A. and Banca Akros.
Accordingly, Fitch will no longer provide ratings or analytical
coverage for these entities or their debt instruments.

KEY RATING DRIVERS
Fitch has withdrawn the ratings of Popolare and BPM as these
entities no longer exist after being merged into a newly created
parent bank. At the same time Fitch has affirmed and withdrawn
the ratings of Popolare's and BPM's outstanding debt, Banca
Aletti & C. S.p.A. and Banca Akros for commercial reasons.

The affirmation of Popolare's and BPM's outstanding debt and
Banca Aletti & C. S.p.A. and Banca Akros's ratings before their
withdrawal reflects that there have been no material changes
since the last review.

Fitch last reviewed the ratings of Popolare, BPM, their debt and
their subsidiaries' ratings on December 23, 2016 prior to the
merger. The rating action commentary published on December 23
included the key rating drivers and sensitivities and stated that
the rating action reflected our assessment of the post-merger
consolidated group.

RATING SENSITIVITIES
Not applicable.

The rating actions are:

BPM
Long-Term Issuer Default Rating (IDR): 'BB-', Stable Outlook
withdrawn
Short-Term IDR: 'B' withdrawn
Viability Rating: 'bb-' withdrawn
Support Rating: '5' withdrawn
Support Rating Floor: 'No Floor' withdrawn
Senior unsecured notes (including EMTN): long-term rating 'BB-'
and short-term rating 'B'; affirmed and withdrawn
Commercial paper: short-term rating 'B'; affirmed and withdrawn
Subordinated tier 2 debt: long-term rating 'B+'; affirmed and
withdrawn
Preferred stock and hybrid capital instrument: long-term rating
'B-'; affirmed and withdrawn

Banca Akros
Long-Term IDR: 'BB-', Stable Outlook; affirmed and withdrawn
Short-Term IDR: 'B'; affirmed and withdrawn
Support Rating: '3'; affirmed and withdrawn

Popolare:
Long-Term Issuer Default Rating (IDR): 'BB-'' Stable Outlook
withdrawn
Short-Term IDR: 'B' withdrawn
Viability Rating: 'bb-' withdrawn
Support Rating: '5' withdrawn
Support Rating Floor: 'No Floor' withdrawn
Senior debt (including programme ratings): long-term rating 'BB-'
and short-term rating 'B'; affirmed and withdrawn
Market-linked securities: long-term rating 'BB-emr'; affirmed and
withdrawn
Tier 2 subordinated debt: long-term rating 'B+'; affirmed and
withdrawn
Preferred stock, Trust preferred securities and junior
subordinated debt: long-term rating 'B-'; affirmed and withdrawn

Banca Aletti & C. S.p.A.:
Long-Term IDR: 'BB-', Stable Outlook; affirmed and withdrawn
Short-Term IDR: 'B'; affirmed and withdrawn
Support Rating: '3'; affirmed and withdrawn


MONTE DEI PASCHI: Regulator Seeks to Protect Jr. Bondholders
------------------------------------------------------------
Alberto Sisto at Reuters reports that Italy's market regulator
said on Jan. 19 retail investors in junior bonds issued by Banca
Monte dei Paschi di Siena should be reimbursed based on how much
they paid for the bonds, not the nominal value of that debt.

Italy's government has promised protection for around 40,000
retail savers who bought junior bonds from Monte dei Paschi,
which is now due a state bailout to save it from collapse,
Reuters relates.

Under a decree approved in December junior bondholders will be
able to swap their holdings, valued at 100% of their nominal
value, with shares in the bank which will then be swapped into
Monte dei Paschi's ordinary bonds, Reuters discloses.

According to Reuters, Giuseppe Vegas, chairman of market
regulator Consob, told a Senate commission the proposed
reimbursement conditions, modified according to Consob's
suggestions, should be included in a decree setting out the terms
of the bailout.

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.


SESTANTE FINANCE 3: S&P Cuts Ratings on 2 Note Classes to 'CCC-'
----------------------------------------------------------------
S&P Global Ratings lowered and removed from CreditWatch negative
its credit ratings on Sestante Finance S.r.l. series 3's class B,
C1, and C2 notes.  At the same time, S&P has affirmed its 'A
(sf)' rating on the class A notes.

The rating actions resolve S&P's Oct. 25, 2016 CreditWatch
placements of its ratings on the class B, C1, and C2 notes and
follow S&P's credit and cash flow analysis of the most recent
transaction information as of the January 2017 payment date.  S&P
has applied its European residential loans criteria and its
structured finance ratings above the sovereign criteria.

Since October 2014, credit enhancement--considering performing
collateral only--has decreased for the class B, C1, and C2 notes,
while it has increased for the class A notes.

CREDIT ENHANCEMENT

Class         Available Credit
               Enhancement (%)
A                        18.01
B                       (0.57)
C1                      (9.00)
C2                      (9.00)

The reserve fund has not been replenished since its depletion in
May 2009.

Severe delinquencies of more than 90 days, at 6.31%, are on
average higher for this transaction than our Italian residential
mortgage-backed securities (RMBS) index.  Defaults are defined as
mortgage loans in arrears for more than 12 months in this
transaction.  Cumulative defaults, at 11.55%, are also higher
than in other Italian RMBS transactions that S&P rates.
Prepayment levels remain low and the transaction is unlikely to
pay down significantly in the near term, in S&P's opinion.

After applying S&P's European residential loans criteria to this
transaction, its credit analysis results show that, since
November 2014, the weighted-average foreclosure frequency (WAFF)
has been stable at the 'AAA' and 'AA' rating levels, and has
decreased at the 'A' to 'B' rating levels.  The weighted-average
loss severity (WALS) has decreased at the 'AAA' to 'A' rating
levels and has increased at the 'BBB' to 'B' rating levels.

Rating level    WAFF (%)    WALS (%)
AAA                22.36       20.33
AA                 18.03       17.05
A                  13.77       10.98
BBB                11.07        8.14
BB                  8.88        6.37
B                   6.60        4.84

The WAFF movements are mainly due to the application of S&P's
arrears assumptions, while the WALS movements are mainly due to
the application of S&P's updated market value decline
assumptions. The overall effect is a decrease in the required
credit coverage at the 'AAA' and 'AA' rating levels and an
increase in the required credit coverage at the 'A' to 'B' rating
levels, over the same period.

Taking into account the results of S&P's credit and cash flow
analysis and the application of its RAS criteria, which
constrains the maximum potential rating in this transaction at 'A
(sf)', S&P considers that the available credit enhancement for
the class A notes is commensurate with the currently assigned
rating.  S&P has therefore affirmed its 'A (sf)' rating on this
class of notes.

In S&P's cash flow analysis and considering the reduced available
credit enhancement, the class B notes cannot withstand a
commingling stress equal to one month's collection of interest
and principal (including a certain amount of assumed
prepayments).  S&P has applied this stress as its rating on this
class of notes is no longer weak-linked to the long-term issuer
credit rating on Banca Popolare dell'Emilia Romagna S.C. (BPER)
(the Italian collection bank account provider) following S&P's
Sept. 30, 2016, rating actions on BPER.  Therefore, S&P has
lowered to 'B (sf)' from 'BB- (sf)' and removed from CreditWatch
negative S&P's rating on the class B notes, in line with its cash
flow analysis results.

The issuer can defer interest payments on the class B, C1, and C2
notes if the cumulative gross default ratio exceeds certain
documented levels.  The interest deferral triggers are set at 16%
for the class B notes and at 12% for the class C1 and C2 notes.
The cumulative gross default ratio was 11.55% on the January 2017
interest payment date.  According to S&P's analysis, the class C1
and C2 notes' creditworthiness is now commensurate with a
'CCC- (sf)' rating, given that S&P believes the cumulative
default ratio is likely to exceed the trigger in the near term.
S&P has therefore lowered to 'CCC- (sf)' from 'CCC+ (sf)' and
removed from CreditWatch negative its ratings on the class C1 and
C2 notes.

In S&P's opinion, the outlook for the Italian residential
mortgage and real estate market is not benign and S&P has
therefore increased its expected 'B' foreclosure frequency
assumption to 2.55% from 1.50%, when S&P applies its European
residential loans criteria, to reflect this view.

Sestante Finance series 3 is an Italian RMBS transaction, which
closed in December 2005. It is backed by a pool of residential
mortgage loans originated by Meliorbanca SpA.

RATINGS LIST

Class              Rating
            To                From

Sestante Finance S.r.l.
EUR899.51 Million Asset-Backed Floating-Rate Notes Series 3

Rating Affirmed

A           A (sf)

Ratings Lowered And Removed From CreditWatch Negative

B           B (sf)             BB- (sf)/Watch Neg
C1          CCC- (sf)          CCC+ (sf)/Watch Neg
C2          CCC- (sf)          CCC+ (sf)/Watch Neg


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


ALPHA 2: Moody's Assigned B2 CFR, Outlook Stable
------------------------------------------------
Moody's Investors Service has assigned a B2 Corporate Family
Rating (CFR) and B2-PD Probability of Default Rating (PDR) to
Alpha 2 B.V. Concurrently, Moody's has assigned provisional (P)B1
ratings to the proposed $1.4 billion senior secured term loans
due 2024 and $250 million revolving credit facility due 2022, all
co-borrowed by Alpha 3 B.V. and Alpha US BidCo, Inc, both
subsidiaries of Alpha 2 B.V.. The rating agency has also assigned
a provisional (P)Caa1 rating to the proposed $425 million senior
unsecured notes due 2025, co-issued by Alpha 3 B.V. and Alpha US
BidCo, Inc. The outlook on all ratings is stable.

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

The proceeds from the issuance of ca $1.83 billion in new term
loans and unsecured notes, in combination with $1.22 billion of
new equity investment will be mainly used to fund the ca $2.76
billion purchase consideration of Atotech by its new private
equity owner, The Carlyle Group, from TOTAL S.A. (Aa3 stable).
Moody's expects the new debt issuance will also provide an
additional ca $180 million in cash to the balance sheet and that
the revolving credit facility will be undrawn at the closing of
the transaction, expected on January 31, 2017, and will be
available to fund working capital needs.

RATINGS RATIONALE

The B2 CFR reflects Atotech's (1) leading position in the niche
$4 billion plating chemicals market, with an estimated
substantial 28% market share in electronic plating chemicals and
one of the top two companies in general metal finishing (GMF)
plating chemicals that each have 19% market share; (2) high
barriers to entry due to its well invested production base with
$221 million of capex between 2013-2015, certification required
to be an approved supplier, history of collaboration with top
Original Equipment Manufacturers (OEMs) such as Samsung, Toshiba
and Intel as well as leading auto OEMs such as Ford and Toyota,
and its portfolio of over 2,000 patents; (3) strong reputation
with customers, which benefits from their focus on quality and
technical competence as well as innovation and R&D, where
Atotech's spend of 8.5% of sales is significantly above its
competitors; and (4) high reported EBITDA margins of between
22-25% during 2013-2015, reflective of its large R&D component
and focus on the most value added segments of its markets, where
it is a pioneer, such as decorative and corrosive resistant
coatings in its GMF division and High Density Interconnect (HDI)
and Integrated Circuit (IC) Carriers in the Printed Circuit Board
(PCB) industry, which will benefit from the trend of increasing
complexity of electronic products.

At the same time, the CFR reflects Atotech's (1) small size with
revenues of ca $1.1 billion in 2016 and narrow product portfolio,
with approximately 90% of sales coming from plating chemicals and
most of the rest from plating equipment; (2) technological risk,
including commoditization of existing products and associated
price deflation as rapid technology advances have shortened the
life cycles of complex commercial electronic products, despite
resilient selling prices for most of its top products from 2011-
2016; (3) high initial gross Moody's adjusted leverage of ca 6.7x
that Moody's expects to fall towards 6.0x in the next 18 months;
(4) exposure to cyclical end markets, with the smartphone
industry accounting for ca 23% of sales and the automotive
industry ca 30%; and (5) exposure to raw material supply and
price risks.

In 2015, Atotech's total sales of $1.1 billion were down 13% year
on year, driven mostly FX movements and tough comparables with
strong equipment sales in 2014. In its Electronics division,
chemistry sales suffered from the low demand both for high end
smartphones and in China. Underlying chemistry sales in its GMF
division were flat as it managed its product portfolio and a
growing automotive market was offset by oil and gas and mining
markets. Despite the fall in sales, Atotech was able to keep
EBITDA of $271 million roughly flat compared to 2014 while
increasing its reported EBITDA margin to 25% from 22%. This was
due to a favourable mix in both electronics and GMF chemistry,
optimization and renewal of its product portfolio and a reduction
in cost of goods sold.

For FY2016, the company expects to report revenues in the range
of $1.09-1.11 billion, flat with 2015 but up 2-4% on a constant
currency basis. It estimates that the Electronics division will
have an underlying sales decline of between 2-4%, driven by lower
volumes as a result of decreased market demand but that
underlying GMF sales will rise 4-6% due to increased volumes in
the automotive market. The company expects EBITDA, as adjusted by
it, in the range of $282-292 million, excluding $22 million in
pro forma cost savings expected within 18 months. This is an
increase of 4-8% compared to $271 million in 2015 and equivalent
to an increase in margin to 26%. The increased margin is a result
of higher product margins in most of its top products across both
divisions.

Going forward, in 2017 and 2018, Moody's expects flat sales
growth, with declining product margins as the benefits of some
raw material price declines fall away, countered by $22 million
in costs savings by the end of 2018, with half of that achieved
in 2017. This should result in reported EBITDA of $287-302
million in 2017-2018, with an EBITDA margin ranging from 26%-27%.
The company has identified a total of $74 million (out of $824
million of costs) of potential annual cost savings within five
years, with $22 million of that achieved in the first 18 months.
If it meets or exceeds that expectation, EBITDA margins will be
higher than Moody's currently expects by potentially 2-4%.

Over the medium-term, whilst Moody's expects the overall
electronics market to grow with GDP, the rating agency expects
Atotech to benefit from its focus on higher growth PCB areas like
HDI and IC Carrier, with rising PCB requirements for faster data
transmission, shrinking features (i.e., lightweight and thin),
and lower power consumption resulting in the migration to more
complex PCBs from conventional multi-layer technologies. Moody's
expects the GMF plating market to track automotive demand, where
the rating agency expects global light vehicle sales to grow 1.1%
in 2017 after 2.7% in 2016. There is upside to this from
potential increased plating penetration, more environmentally
friendly products as well as increased growth in industrial
machinery demand.

For 2016, Moody's estimates Moody's adjusted funds from
operations will be $120-$130 million, with ca $80 million in
capital expenditure leading to $45-55 million in free cash flow,
pro forma for the new debt structure. In 2017, the rating agency
expects this to grow to ca $125-145 million, leading to $60-80
million in free cash flow after ca $50 million in capital
expenditure and no dividends. Moody's also expects retained cash
flow /debt of 6-8% in 2017 compared to 6% in 2016.

Atotech's initial Moody's adjusted gross leverage of ca 6.7x, is
based on a reported EBITDA of $287 million, which is the midpoint
of the range given for 2016 by management and excludes the $22
million in pro forma cost savings. Moody's adjusted debt of ca
$2.0 billion, includes $143 million in pension adjustment and $45
million from capitalising leases (using a 3x rent multiple).
Moody's expects the company to reduce Moody's adjusted
debt/EBITDA towards 6.0x over the next 12-18 months through a
combination of EBITDA growth and debt paydown of between $60-120
million.

Moody's considers that Atotech has a good liquidity position over
the next 12-18 months, supported by a ca $180 million cash
balance at the closing of the transaction and a new undrawn $250
million revolving credit facility (RCF) due 2022. Moody's expects
positive free cash flow of between $60-80 million a year over the
next 12-18 months, due to moderate capex of ca $50 million,
limited working capital requirements and no dividends. Although
the term loans will only have 1% amortisation per annum, they
will have a 50% excess cash flow sweep as long as first lien
leverage is above 4.25x, which steps down based on certain
leverage thresholds. Moody's estimates that this ratio is
currently at ca 3.9x. However, Moody's anticipates that a portion
of the company's relatively high cash balance, as a result of the
ca $180 million in cash overfunding from the proposed debt
issuance will be used to prepay debt and accelerate deleveraging
as the company puts in place stand-alone treasury and cash
pooling capabilities. The RCF will have a springing net leverage
covenant when 35% is drawn that Moody's expects to have good
headroom over the next 12-18 months if it were tested.

Moody's assumes a group recovery of 50%, resulting in a PDR of
B2-PD, in line with the CFR, as is typical of capital structures
consisting of a mix of secured and unsecured debt. The
provisional (P)B1 rating on the new $1.4 billion secured term
loans, one notch above the CFR, reflects that there is $425
million of unsecured debt, rated provisional (P)Caa1, ranking
below it in the capital structure. The term loans will be
guaranteed by all material subsidiaries of the group and will be
secured on a first priority basis by substantially all the
material owned assets of the group, including those in China.
However, Chinese guarantees are still subject to approval from
China's State Administration of Foreign Exchange (SAFE). The term
loans will have customary negative covenants but no financial
covenants. The (P)Caa1 rating on the unsecured notes, two notches
below the CFR, reflects the substantial amount of secured debt in
the structure. The notes will have operating guarantees from
entities that only represent 36% of EBITDA for the twelve months
to September 2016 and 67% of assets. The large difference in
guarantee coverage compared to the term loans is because the
Chinese assets are expected to guarantee the term loans but not
the unsecured notes.

RATING OUTLOOK

Atotech's stable outlook reflects Moody's expectation that the
company will preserve its high EBITDA margins and deleverage
through a combination of improving EBITDA and debt prepayment. It
also assumes that the company will maintain good liquidity.

WHAT COULD CHANGE THE RATINGS UP/DOWN

The B2 CFR is currently weakly positioned due to the high
leverage so positive pressure is unlikely in the near term.
However, the ratings could be upgraded if Moody's adjusted
debt/EBITDA falls below 5.0x and retained cash flow/debt is above
10%, both on a sustained basis, while maintaining a solid
liquidity position. Conversely, the ratings could be downgraded
if the company does not reduce Moody's adjusted debt/EBITDA
towards 6.0x within 18 months, retained cash flow/debt falls
towards 5% on a sustained basis, liquidity significantly
deteriorates or the company undertakes a large acquisition.

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Global
Chemical Industry Rating Methodology published in December 2013.

Alpha 2 B.V., is an indirect parent of Atotech B.V., which has
management based in Berlin, Germany. The company produces and
sells plating chemicals to improve other materials protection,
appearance and electrical conductivity. It has two main division,
Electronics and Global Metal Finishing that account for 57% and
43% of the company's reported EBITDA. For the twelve months ended
September 2016, its revenues and reported EBITDA were 1.1 billion
and $278 million, respectively.


DELFT 2017: Moody's Assigns Ba2 Definitive Rating to Cl. E Notes
----------------------------------------------------------------
Moody's Investors Service has assigned definitive long-term
credit ratings to notes issued by Delft 2017 B.V.:

-- EUR98.9M Class A mortgage backed floating rate notes due
January 2040, Definitive Rating Assigned Aaa (sf)

-- EUR19.0M Class B mortgage backed floating rate notes due
January 2040, Definitive Rating Assigned Aa1 (sf)

-- EUR7.4M Class C mortgage backed floating rate notes due
January 2040, Definitive Rating Assigned Aa3 (sf)

-- EUR7.4M Class D mortgage backed floating rate notes due
January 2040, Definitive Rating Assigned A3 (sf)

-- EUR9.0M Class E mortgage backed floating rate notes due
January 2040, Definitive Rating Assigned Ba2 (sf)

Moody's has not assigned ratings to the EUR 14.0M Class Z
mortgage backed zero coupon notes due January 2040 or the
Residual Certificates.

The portfolio backing this transaction consists of Dutch Non-
conforming residential mortgage loans originated by ELQ
Portefeuille I B.V. The portfolio in its entirety was securitized
in EMF-NL 2008-1 B.V. (not rated). On the closing date EMF-NL
2008-1 B.V. sold the portfolio to Morgan Stanley Principal
Funding, Inc. (not rated). In turn, Morgan Stanley Principal
Funding, Inc. sold the portfolio to Delft 2017 B.V.

RATINGS RATIONALE

The ratings take into account the credit quality of the
underlying mortgage loan pool, from which Moody's determined the
MILAN Credit Enhancement and the portfolio expected loss, as well
as the transaction structure and legal considerations.

--Expected Loss and MILAN CE Analysis

The expected portfolio loss of 9.5% and the MILAN required credit
enhancement of 35% serve as input parameters for Moody's cash
flow model and tranching model, which is based on a probabilistic
lognormal distribution.

Portfolio expected loss of 9.5%: this is based on Moody's
assessment of the lifetime loss expectation taking into account:
(i) the high weighted average CLTV of around 98.7% on a non-
indexed basis; (ii) the collateral performance to date along with
an average seasoning of 9.2 years: 17.8% of the pool is in
arrears as of 31 December 2016, of which 17.0% is more than 30
days in arrears; (iii) the current macroeconomic environment and
Moody's views of the future macroeconomic environment in the
Netherlands, and (iv) benchmarking with similar transactions in
the Dutch Non-conforming sector.

MILAN CE of 35%: this follows Moody's assessment of the loan-by-
loan information taking into account the historical performance
available and the following key drivers: (i) the high weighted
average CLTV of 98.7% on a non-indexed basis; (ii) the high
proportion of borrowers that self-certified their income at
24.8%; (iii) around 99.1% of interest only loans; (iv) borrowers
with adverse credit history accounting for 35.8% of the pool; (v)
the level of arrears around 17.0% as of 31 December 2016, and
(vii) benchmarking with other Dutch Non-conforming RMBS
transactions.

-- Transaction structure

The final mortgage pool balance consists of EUR156 million of
loans. The total reserve fund is funded to 2.0% of the initial
balance of Classes A to Z and will not amortise. The total
reserve fund is split into the Liquidity Reserve Fund and the Non
Liquidity Reserve Fund. The Liquidity Reserve Fund Required
Amount is equal to 2.0% of Class A outstanding amount and will be
available only to cover senior expenses and Class A interest. The
Liquidity Reserve Fund is floored at 1% of the initial principal
balance of Class A and will be released only after Class A is
fully repaid. The Non Liquidity Reserve Fund is equal to the
difference between the total reserve fund and the Liquidity
Reserve Fund, and will be used to cover interest shortfalls and
to cure PDL on Classes A to E.

Interest on the notes (excluding Class A) is subject to a Net
Weighted Average Coupon (Net WAC) Cap. Net WAC additional amounts
are paid junior in the revenue waterfall being the difference
between the class B, C, D and E coupon and the Net WAC Cap. Net
WAC additional amounts arise when the coupons of the respective
notes are greater than the Net WAC Cap. Moody's ratings assigned
to the Class B, C, D and E do not address the timely and/ or
ultimate payment of Net WAC additional amounts.

Moody's notes that the Net WAC Cap formula defined in the deal
divides the scheduled weighted average loan rate net of fees by
the proportion of the rated notes to the aggregate current
balance of the loans. Consequently, should the aggregate current
balance of the loans become less than the rated notes as a result
of high portfolio losses leading to unpaid PDL on the rated
notes, the Net WAC Cap calculation result would decrease and
potentially reduce the size of promised interest payment to be
received by investors under the Class B through Class E notes to
below their stated coupon and furthermore below the scheduled WAC
of the pool. Moody's views the likelihood of such scenario as
consistent with the ratings of the notes.

-- Operational Risk Analysis

Adaxio B.V. (not rated) is acting as servicer and cash manager on
day 1. For 12 months after the transaction closing Adaxio B.V.
will delegate certain collection and payment processing services
to Stater Nederland B.V. (not rated), thereafter these
responsibilities will be assumed by Adaxio B.V. Intertrust
Administrative Services B.V. (not rated) acts as independent back
up cash manager as well as back-up servicer facilitator, using
commercially reasonable efforts to find a substitute servicer in
case of servicer termination. To ensure payment continuity over
the transaction's lifetime the transaction documents incorporate
estimation language whereby the cash manager can use the three
most recent servicer reports to determine the cash allocation in
case no servicer report is available. The transaction also
benefits from principal to pay interest for the Class A notes and
for Class B to E notes, subject to certain conditions being met.

-- Interest Rate Risk Analysis

All the loans in the portfolio pay a floating rate of interest
linked to 1 month Euribor, while the notes pay a floating rate of
interest linked to 3 months Euribor. The interest rate risk in
the transaction will be unhedged. Moody's has taken into
consideration the risk of margin compression in the portfolio as
well as the basis mismatch in its cash flow modelling.

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 for Class A
notes, ultimate payment of interest on or before the final legal
maturity date for Classes B, C, D and E notes; and ultimate
payment of principal at par on or before the final legal maturity
date for all rated notes. Other non-credit risks have not been
addressed, but may have a significant effect on yield to
investors.

The principal methodology used in these ratings was "Moody's
Approach to Rating RMBS Using the MILAN Framework" published in
September 2016.

The analysis undertaken by Moody's at the initial assignment of
ratings for RMBS securities may focus on aspects that become less
relevant or typically remain unchanged during the surveillance
stage.

-- Parameter Sensitivities

Moody's Parameter Sensitivities: If the portfolio expected loss
was increased from 9.5% to 16.6% of current balance, and the
MILAN CE remained unchanged, the model output indicates that the
Class A notes would still achieve Aaa(sf) assuming that all other
factors remained equal. Moody's Parameter Sensitivities quantify
the potential rating impact on a structured finance security from
changing certain input parameters used in the initial rating.

Moody's Parameter Sensitivities provide a quantitative/model-
indicated calculation of the number of rating notches that a
Moody's 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 and is not
intended to measure how the rating of the security might migrate
over time, but rather how the initial rating of the security
might have differed if key rating input parameters were varied.
Parameter Sensitivities for the typical EMEA RMBS transaction are
calculated by stressing key variable inputs in Moody's primary
rating model.

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

Significantly different loss assumptions compared with Moody's
expectations at close due to either a change in economic
conditions from Moody's central scenario forecast or
idiosyncratic performance factors would lead to rating actions.
For instance, should economic conditions be worse than forecast,
the higher defaults and loss severities resulting from a greater
unemployment, worsening household affordability and a weaker
housing market could result in a downgrade of the ratings.
Deleveraging of the capital structure or conversely a
deterioration in the notes available credit enhancement could
result in an upgrade or a downgrade of the ratings, respectively.


LAURELIN II: Fitch Affirms Rating on Class E Notes at 'BBsf'
------------------------------------------------------------
Fitch Ratings has upgraded Laurelin II B.V.'s class B and C notes
and affirmed the rest, as follows:

Class B-1: upgraded to 'AAAsf' from 'AAsf'; Outlook Stable
Class B-2: upgraded to 'AAAsf' from 'AAsf'; Outlook Stable
Class C: upgraded at 'A+sf' from 'Asf'; Outlook Stable
Class D-1: affirmed at 'BBBsf'; Outlook Stable
Class D-2: affirmed at 'BBBsf'; Outlook Stable
Class E: affirmed at 'BBsf'; Outlook Stable

Laurelin II B.V. is a securitisation of mainly senior secured,
senior unsecured, second-lien and mezzanine loans (including
revolvers) extended to mostly European obligors. At closing, a
total note issuance of EUR450m was used to invest in a target
portfolio of EUR438m. The portfolio is actively managed by
GoldenTree Asset Management L.P.

KEY RATING DRIVERS
The upgrade reflects increased credit enhancement (CE), which
outweighed the increased obligor concentration. CE available to
the rated notes has increased significantly over the past 12
months due to the deleveraging of the transaction. The class A-1
and A-2 notes have been paid in full. CE for the class B and C
notes has increased to 84.8% and 63.1%from 41.3% and 31.1%
respectively, at last review. The affirmation of the class D and
E notes reflect the stable portfolio quality.

The portfolio quality remains largely unchanged. The Fitch
weighted average rating factor, as calculated by the trustee, has
increased to 27.7 from 27.0. The 'CCC' rated obligations
decreased to EUR1.3m from EUR22.5m as the assets fully redeemed.
There is one defaulted obligor of EUR5.6m, which is unchanged
from last review.

The transaction initially featured multi-currency class A-1R
variable funding notes and class A-2 notes to hedge sterling
exposure. However, following the repayment of these notes, there
are no sterling liabilities outstanding, but there are GBP19.5m
assets remaining in the current portfolio, which accounts for
19.2% of the performing portfolio balance. The currency mismatch
introduces additional performance volatility for the transaction.
Fitch incorporated the impact of potential currency mismatch into
its cash flow analysis.

Fitch found that the transaction can withstand the various
combinations of interest rate and currency stresses between
sterling and euro assets at proposed rating stress levels.

CRITERIA VARIATIONS
OCU Stress in Portfolio Credit Model
According to the Global Rating Criteria for CLOs and Corporate
CDOs, when running the Portfolio Credit Model, Fitch applies a
stress to the five largest risk-contributing entities of 0.75x
the assumed recovery rate and 50% correlation stress increase, to
take into account obligor concentrations. The agency has decided
to apply a variation from its criteria and to apply the stresses
above to all obligors with a notional amount above 3.5% of the
total portfolio instead of the five largest risk-contributing
entities. This is in light of the high obligor concentration of
the Harbourmaster pool.

The structure has significantly deleveraged over the last 12
months and the number of obligors has decreased to 23 from 41. As
a result, obligor concentration has increased. The 10 largest
obligors represent 62.8% of the portfolio notional. Therefore the
committee decided to apply the variation as outlined above.

RATING SENSITIVITIES
In its rating sensitivity analysis, Fitch found that a 25%
increase of the default probability would result in downgrade of
one notch for all notes apart from the class C notes. A 25%
reduction of the recovery rate would result in downgrade of up to
two notches for class D and E notes.

USE OF THIRD-PARTY DUE DILIGENCE PURSUANT TO RULE 17G-10
Form ABS Due Diligence-15E was not provided to, or reviewed by,
Fitch in relation to this rating action.

DATA ADEQUACY
Fitch has checked the consistency and plausibility of the
information it has received about the performance of the asset
pool and the transaction. There were no findings that were
material to this analysis. Fitch has not reviewed the results of
any third party assessment of the asset portfolio information or
conducted a review of origination files as part of its ongoing
monitoring.

The majority of the underlying assets have ratings or credit
opinions from Fitch and/or other Nationally Recognised
Statistical Rating Organisations and/or European Securities and
Markets Authority registered rating agencies. Fitch has relied on
the practices of the relevant Fitch groups and/or other rating
agencies to assess the asset portfolio information.

Overall, Fitch's assessment of the information relied upon for
the agency's rating analysis according to its applicable rating
methodologies indicates that it is adequately reliable.

SOURCES OF INFORMATION
The information below was used in the analysis.
   - Loan-by-loan data provided by BNY Mellon as at January 3,
2017
  - Transaction reporting provided by BNY Mellon as at January 3,
  2017


===========
N O R W A Y
===========


SPAREBANKEN VEST: Fitch Withdraws BB+ Support Rating Floor
----------------------------------------------------------
Fitch Ratings has affirmed Sparebanken Vest's Long-Term Issuer
Default Rating (IDR) at 'A-' with Stable Outlook, Short-Term IDR
at 'F2' and Viability Rating (VR) at 'a-'. Fitch has
simultaneously withdrawn the ratings of SV for commercial
reasons.

KEY RATING DRIVERS
IDR, VR AND SENIOR DEBT
The ratings reflect SV's strong regional franchise around the
Bergen area, healthy profitability, resilient asset quality, and
sound capital ratios. The ratings also factor in significant
property price increases in recent years, geographically
concentrated lending, and liquidity management in the context of
wholesale funding reliance.

Fitch expects SV's asset quality to remain strong, driven by a
benign operating environment and prudent underwriting standards.
Concentration risk relating to large exposures is being reduced,
and Fitch expects SV to continue to implement a low-risk business
model, and to focus on retail and small-and medium-sized
customers. SV's direct exposure to the oil and offshore sector is
limited.

Pre-impairment profitability is good, and the regional franchise
supports stable revenue generation. Cost efficiency is
acceptable. Fitch expects modest loan impairment charges in 2017,
despite continued low oil prices.

SV's capitalisation compares well with those of Norwegian and
international peers. Leverage remains low in a European context.
As with most Nordic peers, SV is reliant on the wholesale markets
for its funding. Maintaining a large liquidity buffer is critical
to mitigating refinancing risks.

The 'F2' Short-Term IDR of SV maps to the lower of the two
options for a 'A-' Long-Term IDR. While Fitch believes the bank
has good funding and liquidity, its liquidity is not notably
better than the rating level would suggest.

SUPPORT RATING AND SUPPORT RATING FLOOR
SV's Support Rating of '3' and Support Rating Floor of 'BB+'
reflect Fitch's view of a moderate probability of support, if
required, from the Norwegian authorities, given SV's strong
regional franchise, Norway's exceptionally strong financial
flexibility and little progress to date with implementing bank
resolution legislation.

RATING SENSITIVITIES
IDR, VR AND SENIOR DEBT
Not applicable

SUPPORT RATING AND SUPPORT RATING FLOOR
Not applicable

The rating actions are:

Sparebanken Vest:
Long-Term IDR affirmed at 'A-'; Outlook Stable and withdrawn
Short-Term IDR affirmed at 'F2' and withdrawn
Viability Rating affirmed at 'a-' and withdrawn
Support Rating affirmed at '3' and withdrawn
Support Rating Floor affirmed at 'BB+' and withdrawn
Senior unsecured debt affirmed at 'A-'/'F2' and withdrawn


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


BANCO COMERCIAL: Moody's Affirms B1 LT Deposit & Sr. Debt Ratings
-----------------------------------------------------------------
Moody's Investors Service has affirmed Banco Comercial Portugues,
S.A.'s (BCP) long-term deposit and senior debt ratings at B1, as
well as its long-term Counterparty Risk Assessment (CRA) at
Ba2(cr). At the same time, the rating agency has upgraded the
following ratings: (1) the bank's baseline credit assessment
(BCA) and adjusted BCA to b2 from b3; (2) the bank's subordinated
programme ratings to (P)B3 from (P)Caa1; and (3) the bank's
preference shares to Caa2(hyb) from Caa3(hyb). The outlook on the
long-term debt and deposit ratings is stable.

The rating action was triggered by the bank's announcement on 9
January 2017 that its board of directors had approved a EUR1.33
billion capital increase which is fully underwritten. In Moody's
opinion, this transaction will enable BCP to strengthen its loss
absorption capacity in the face of still significant asset
quality challenges faced by the bank and to repay the EUR700
million of outstanding contingent convertible securities (CoCos)
purchased by the Portuguese government in 2012.

The affirmation of BCP's long-term deposit and senior debt
ratings reflects: (1) the upgrade of the standalone BCA to b2 on
the back of the announced capital raising; and (2) the outcome of
Moody's Advanced Loss Given Failure (LGF) Analysis after
incorporating into the bank's balance sheet structure the lower
protection for senior creditors in light of the near-term
redemption of the CoCos.

BCP's short-term deposit ratings of Not Prime, its short-term
programme ratings at (P)Not Prime and its short-term CRA of Not
Prime(cr) are unaffected by rating action.

RATINGS RATIONALE

-- RATIONALE FOR UPGRADING THE BCA

The upgrade of BCP's BCA to b2 from b3 reflects the bank's
announcement on 9 January 2017 a fully underwritten capital
increase of EUR1.33 billion and Moody's views that this
transaction enhances the bank's risk-absorption capacity against
its still very weak asset risk profile.

BCP will issue 14,169,365,580 new shares at a price of EUR0.0940
per share, which will increase the bank's share capital to
EUR5.60 billion from EUR4.27 billion and Moody's adjusted
Tangible Common Equity (TCE) to Risk-Weighted Assets ratio to an
estimated 9%.

Since the public recapitalisation in 2012 with EUR3 billion of
CoCos purchased by the Portuguese government, BCP has been able
to strengthen its capital base mainly through continued
deleveraging and tapping the markets to raise capital. The
announced transaction will enable the bank to repay the remaining
EUR700 million of CoCos before the mid-2017 deadline, as well as
to enhance its solvency levels despite the large losses booked in
the first nine months of 2016 owing to a significant
extraordinary provisioning effort.

From a regulatory perspective, this transaction and the full
repayment of CoCos will result into a pro-forma phased-in common
equity Tier 1 (CET1) ratio of 14.1% and a fully loaded CET1 ratio
of 11.4% at end-September 2016, according to the bank's
estimates. As of that date, BCP reported a phased-in CET1 ratio
of 12.2% and a fully loaded CET1 ratio of 9.5%.

The redemption of the outstanding EUR700 million CoCos is also
positive for BCP's profitability, given the very high cost of
these instruments (EUR61 million pre-tax interests per year).
Moody's expects the bank's profitability metrics to improve in
2017, with both Portugal and the international operations
positively contributing to the group's bottom line result,
although the rating agency believes that the bank's recurring
earnings will continue to be challenged by the very low interest
rate environment and subdued business volumes.

Despite the above-mentioned improvements, Moody's notes that
BCP's asset risk profile remains very weak. The stock of
problematic exposures, albeit stabilising, is very high and will
continue to challenge the bank's credit profile. According to the
criteria of the European Banking Authority (EBA), BCP had a ratio
of non-performing exposures (NPEs) of 20.1% at end-June 2016
(latest available data), significantly above the reported credit
at risk ratio of 11.9%. BCP's problematic assets (measured as
NPEs and foreclosed real estate assets) ratio stood at 22.5% as
of the same date, indicating the existing balance-sheet pressure
the bank is facing.

Overall, Moody's views that BCP's risk-absorption capacity is
still modest, as evidenced by the ratio of problematic exposures
as a percentage of loss-absorbing balance sheet cushions
(shareholder's equity, loan loss reserves and real estate
reserves), which stood at a pro-forma 113% at end-June 2016,
including the announced capital increase.

  -- RATIONALE FOR AFFIRMING THE LONG-TERM DEPOSIT AND SENIOR
DEBT RATINGS WITH A STABLE OUTLOOK

The affirmation of BCP's long-term deposit and senior debt
ratings at B1 reflects: (1) the upgrade of the bank's BCA and
adjusted BCA to b2 from b3; (2) no uplift from Moody's Advanced
LGF analysis; and (3) Moody's assessment of moderate probability
of government support for BCP, which results in an unchanged one
notch of uplift for both the deposit and the senior debt ratings.

Taking account of the bank's balance sheet structure at end-June
2016 and its near term funding plan, the rating agency's LGF
Analysis indicates that the bank's deposits and senior debt are
likely to face a moderate loss-given failure, due to the loss
absorption provided by subordinated debt, as well as the volume
of deposits and senior debt themselves. This results in a
Preliminary Rating Assessment (PRA) of b2 for deposits and senior
debt, at the same level as the BCA. This is lower than under the
previous analysis, which was based on data as of end-December
2015 and resulted in a one notch uplift from the BCA, mainly
because of the expected redemption of EUR750 million CoCos since
June 2016, which has reduced the loss absorption for deposits and
senior debt liabilities issued by the bank.

Moody's has maintained its expectation of government support for
BCP's deposits and senior instruments at moderate in line with
the rating agency's view of its domestic systemic importance.
This results into a one-notch of uplift from the bank's b2 PRA.

The stable outlook on the long-term deposit and senior debt
ratings of BCP reflects Moody's views that the bank's credit
profile will be resilient despite the continued challenges
stemming from Portugal's persistently weak operating environment.

  -- RATIONALE FOR AFFIRMING THE CR ASSESSMENT

As part of rating action, Moody's has also affirmed the CR
Assessment of BCP at Ba2(cr), three notches above the adjusted
BCA of b2.

The CR Assessment is driven by the banks' adjusted BCA and by the
cushion against default provided to the senior obligations
represented by the CR Assessment by subordinated instruments
amounting to 12% of tangible banking assets. The CR Assessment
also benefits from a moderate probability of government support,
in line with Moody's support assumptions on deposits and senior
debt. However, this support doesn't result in any uplift for the
bank's CR assessment, from the previous one-notch uplift.

WHAT COULD CHANGE THE RATINGS UP/DOWN

Upward pressure on BCP's BCA could be driven by: (1) stronger TCE
levels; (2) a material improvement in its asset risk metrics - on
absolute and relative terms when compared to the bank's loss-
absorbing balance-sheet cushions; and (3) a sustainable recovery
in the bank's recurring earnings. As the bank's debt and deposit
ratings are linked to the standalone BCA, any change to the BCA
would likely also affect these ratings.

BCP's deposit and senior debt ratings could also change due to
movements in the loss-given failure faced by these securities.

Downward pressure on the bank's BCA could develop as a result of:
(1) a reversal in current asset risk trends with an increase in
the stock of nonperforming loans (NPLs) and/or other problematic
exposures; and (2) a weakening of BCP's risk-absorption capacity.
As the bank's debt and deposit ratings are linked to the
standalone BCA, any change to the BCA would likely also affect
these ratings.

BCP's deposit and senior debt ratings could also change due to
movements in the loss-given failure faced by these securities.

In addition, any changes to Moody's considerations of government
support could trigger downward pressure on the bank's deposit and
debt ratings.

LIST OF AFFECTED RATINGS

Issuer: Banco Comercial Portugues, S.A.

Upgrades:

-- Subordinate Medium-Term Note Program, upgraded to (P)B3 from
(P)Caa1

-- Pref. Stock Non-cumulative, upgraded to Caa2(hyb) from
Caa3(hyb)

-- Adjusted Baseline Credit Assessment, upgraded to b2 from b3

-- Baseline Credit Assessment, upgraded to b2 from b3

Affirmations:

-- Long-term Counterparty Risk Assessment, affirmed Ba2(cr)

-- Long-term Deposit Ratings, affirmed B1 Stable

-- Senior Unsecured Regular Bond/Debenture, affirmed B1, outlook
changed to Stable from Negative

-- Senior Unsecured Medium-Term Note Program, affirmed (P)B1

Outlook Action:

-- Outlook changed to Stable from Stable(m)

Issuer: BCP Finance Bank, Ltd.

Upgrade:

-- Backed Subordinate Medium-Term Note Program, upgraded to
(P)B3 from (P)Caa1

Affirmations:

-- Backed Senior Unsecured Medium-Term Note Program, affirmed
(P)B1

-- Backed Senior Unsecured Regular Bond/Debenture, affirmed B1,
outlook changed to Stable from Negative

Outlook Action:

-- Outlook changed to Stable from Negative

Issuer: BCP Finance Company

Upgrades:

-- Backed Subordinate Shelf, upgraded to (P)B3 from (P)Caa1

-- Backed Pref. Stock Non-cumulative, upgraded to Caa2(hyb) from
Caa3(hyb)

Outlook Action:

-- No Outlook assigned

Issuer: Banco Comercial Portugues, SA, Macao Br

Affirmations:

-- Long-term Counterparty Risk Assessment, affirmed Ba2(cr)

-- Long-term Deposit Rating, affirmed B1 Stable

Outlook Actions:

-- Outlook remains Stable

Issuer: Banco Comercial Portugues, SA, Madeira

Affirmation:

-- Long-term Counterparty Risk Assessment, affirmed Ba2(cr)

Outlook Action:

-- No Outlook assigned

PRINCIPAL METHODOLOGY

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


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R U S S I A
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RENAISSANCE CAPITAL: Fitch Affirms RFHL's B- IDR, Outlook Stable
----------------------------------------------------------------
Fitch Ratings has revised the Outlook on Renaissance Financial
Holding Limited's (RFHL) Long-Term Issuer Default Rating (IDR) to
Stable from Negative and affirmed the IDR at 'B-'. RFHL is the
holding company of the Russia-headquartered investment banking
group Renaissance Capital (RenCap).

KEY RATING DRIVERS
IDRS AND SENIOR DEBT
The revision of the Outlook to Stable reflects (i) reduced
pressure on RFHL's performance and risk profile due to the
stabilisation of the Russian operating environment; (ii) an
extended record of stable operations and liquidity management
since the takeover of the company in 2012, in part due to
shareholder support; and (iii) reduced contingent risks from
sister retail bank Rencredit as the latter's performance somewhat
improved in 2016.

RFHL's 'B-' Long-Term IDR continues to reflect weak asset quality
and solvency due to a large USD1.3bn related party exposure (40%
of RFHL's assets, 3x of Fitch Core Capital at end-1H16). Of this,
USD0.9bn represents an exposure to RFHL's holding company
Renaissance Capital Investments Limited (RCIL), USD0.2bn
comprises a loan to an RCIL subsidiary, which is the holding
company of Rencredit, and USD0.2bn includes loans to companies of
the broader Onexim group, RFHL's ultimate owner.

According to management, the unwinding of these exposures would
require some form of shareholder support as part of the
attraction of a new strategic investor. In Fitch's view, finding
such an investor could be challenging, given RFHL's limited
franchise and moderate performance prospects. Capital is further
undermined by a non-core USD0.1bn investment in an agricultural
holding in Ukraine, although according to management, the company
is performing reasonably.

Repo funding comprised 41% of total liabilities at end-1H16, with
the remainder mainly made up of broker/customer payables and
short positions in securities. RFHL's short-term liabilities
consistently exceed its liquid assets due to large non-core and
related party assets significantly exceeding equity. The company
therefore relies on unsecured borrowings of securities (about
USD0.8bn) from some of its broker clients (some of them could be
related parties, in Fitch's view) to be able to raise market repo
funding. About half of repo funding was collateralised with these
securities. In Fitch's view continued access to these securities
or other shareholder funding support is crucial for the liquidity
profile of the company and its ability to continue to service its
liabilities.

In addition to partially funding non-core/related-party
exposures, repo funding is used to finance similarly
collateralised margin loans on the asset side of the balance
sheet. A liquidity buffer of about USD100m-USD150m is usually
maintained to mitigate potential gaps in variation margin
requirements, as there may be a small delay (one or two days) in
receiving corresponding collateral from borrowers under margin
loans.

Market risk relating to potential proprietary trading is modest,
as RenCap has limited amounts of such operations, reflected in
low value at risk (USD1m at end-1H16).

Profitability is weak and cyclical, but positively the company
managed to achieve a small USD3m net profit in 1H16 (annualised
ROAE of 1%). However, net of interest income less interest
expense associated with related party exposures, the company
would have reported a net loss of USD7m (-3% ROAE).

RFHL has benefited from support provided by Onexim, including
USD350m emergency liquidity support in 4Q12 (later repaid),
USD186m to fund a eurobond repayment in April 2014 and USD100m
(later repaid) in 4Q14 to support short-term liquidity allowing
to benefit from market volatility at that time. Onexim has
expressed its commitment to RFHL and provided business to the
company. However, uncertainty remains about Onexim's propensity
to provide support over the long term and in all circumstances,
in particular given the absence to date of measures to decisively
strengthen the company's solvency.

The bond rating of 'B-' is driven by the Long-Term IDR and
Fitch's assessment of average recovery prospects in the event of
a default.

RATING SENSITIVITIES
IDRS, NATIONAL RATINGS AND SENIOR DEBT
RFHL could be downgraded if (i) it is no longer able to borrow
securities from its broker clients or otherwise support its
access to short-term funding; (ii) the company's performance
deteriorates significantly; or (iii) Rencredit's performance
continues to weaken, to the extent that this materially increases
contingent risks for RFHL.

Positive rating action would be contingent on (i) a considerable
strengthening of the company's solvency through the unwinding of
at least part of the related-party exposure/ non-core
investments, or recapitalisation by Onexim/a potential new
investor; (ii) reduced reliance on securities borrowings to
support liquidity; or (iii) a further decrease of contingent
risks related to sister bank Rencredit.

RFHL's senior bond's rating is likely to move in tandem with the
company's Long-Term IDR.

The rating actions are as follows:

Long-Term Foreign Currency IDR: affirmed at 'B-'; Outlook revised
to Stable from Negative
Short-Term IDR: affirmed at 'B'
Long-Term senior unsecured rating: affirmed at 'B-'/'RR4'


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


AYT KUTXA: Fitch Affirms Rating on Class C Notes at 'CCCsf'
-----------------------------------------------------------
Fitch Ratings has revised the Rating Watch on AyT Kutxa
Hipotecario II, FTA to Negative (RWN) from Positive (RWP) as
follows:

Class A (ES0370154009) 'Asf'; Rating Watch revised to Negative
from Positive

Class B (ES0370154017) 'BBsf'; placed on Rating Watch Negative

Class C (ES0370154025): affirmed at 'CCCsf'; revised Recovery
Estimate (RE) to 65% from 90%

AyT Kutxa Hipotecario II, FTA is a Spanish RMBS transaction of
residential mortgages originated and serviced by Kutxabank, SA
(BBB/OutP/F3).

KEY RATING DRIVERS
Credit Assessment on Modified Loans
The RWN reflects Fitch's treatment of modified loans under the
agency's updated Spanish RMBS criteria, whereby restructured
loans for which full payment history over the past four years has
not been received should be treated as delinquencies over 90
days, which are linked to a default frequency much higher than
performing loans.

Fitch estimates that approximately 2% of the current portfolio
balance has been subject to maturity extensions. The agency has
just received additional information from the transaction trustee
for determining the credit performance trends of maturity
extension loans. Fitch expects to resolve the RWN over the next
two months once it has completed its analysis of the maturity
extension loans. The transaction allows for loan restructurings
in the form of maturity extensions or interest rate reductions to
a maximum of 10% of the initial portfolio balance.

RWP Resolution
Class A notes 'Asf' rating was placed on RWP in July 2016 to
signal a potential upgrade as under Fitch's updated counterparty
criteria payment interruption risk is mitigated if the collection
bank rating is within five notches of the structured finance
rated note, which was the case for Kutxabank SA, it being rated
at 'BBB'. However, in accordance with Fitch's latest credit
analysis of the transaction projected credit enhancement is not
sufficient to support a higher rating than the current 'Asf'.

Portfolio Credit Trends
Fitch expects cumulative gross defaults on the portfolio to
stabilise at current level of 5.9% of the original balance, as
the current arrears pipeline shows a downward trend. Cumulative
gross defaults remain slightly above the average observed for
Spanish RMBS of 5.5%. Cumulative net defaults relative to the
original portfolio balance continued to decrease and now stand at
2.25%, compared with 2.6% in October 2015. However, Fitch
understands from Kuxtabank that it intends to repurchase
defaulted assets, a practice that Fitch considers not sustainable
in times of stress and consequently is not factored in by the
agency when estimating recovery expectations.

Arrears over 90 days also follow the development of the Spanish
average, which is showing a decreasing trend since their peaks in
2013. AyT Kuxta II's 90+ day arrears have decreased to 0.75% from
over 1% over the last months, versus an average of 0.93% for
Spanish RMBS rated by Fitch.

RATING SENSITIVITIES
Class A and B notes could be subject to a downgrade of three
notches if Fitch's assesses the credit quality of the modified
loans as being much weaker than the rest of the portfolio. On the
other hand, Class A and B ratings would most likely be affirmed
if the assessment suggests comparable performance trends on
maturity extension loans versus the rest of the portfolio.

A worsening of the Spanish macroeconomic environment, especially
employment conditions, or an abrupt shift of interest rates could
jeopardise the underlying borrowers' affordability. A
deterioration of the asset performance beyond Fitch expectations
would lead to negative rating actions.

USE OF THIRD-PARTY DUE DILIGENCE PURSUANT TO RULE 17G-10
Form ABS Due Diligence-15E was not provided to, or reviewed by,
Fitch in relation to this rating action.

DATA ADEQUACY
Fitch has checked the consistency and plausibility of the
information it has received about the performance of the asset
pool and the transaction. There were no findings that affected
the rating analysis. Fitch has not reviewed the results of any
third party assessment of the asset portfolio information or
conducted a review of origination files as part of its ongoing
monitoring.

Fitch did not undertake a review of the information provided
about the underlying asset pool ahead of the transaction's
initial closing. The subsequent performance of the transaction
over the years is consistent with the agency's expectations given
the operating environment and Fitch is therefore satisfied that
the asset pool information relied upon for its initial rating
analysis was adequately reliable.

Overall, Fitch's assessment of the information relied upon for
the agency's rating analysis according to its applicable rating
methodologies indicates that it is adequately reliable.

SOURCES OF INFORMATION
The information below was used in the analysis:
-Issuer and servicer reports provided by Haya Titulizacion,
S.G.F.T., S.A.U. since close of the deal and until October 2016

-Loan level data dated December 31, 2016, were used to run the
surveillance model and the relevant data sources were the
European Data Warehouse


=====================
S W I T Z E R L A N D
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GATEGROUP HOLDING: Moody's Affirms B1 CFR, Outlook Now Stable
-------------------------------------------------------------
Moody's Investors Service changed the outlook on the ratings of
gategroup Holding AG to stable from positive. Moody's has also
affirmed the company's B1 corporate family rating (CFR) and B1-PD
probability of default rating (PDR).

"We have changed Moody's outlook on gategroup to stable to
reflect the company's slower than expected deleveraging resulting
from the debt funded acquisition of Servair in January 2017.
However, the decision to affirm the ratings reflects the strong
financial performance achieved in 2016 leading to pro-forma
leverage metrics still commensurate with the current B1 rating",
says Emmanuel Savoye, an AVP at Moody's.

RATINGS RATIONALE

On January 1, 2017 gategroup took control of Servair, the
inflight catering unit of Air France, by acquiring 50% minus 1
share in the company for an enterprise value of EUR238 million.
The transaction has been funded by a bridge facility which is
expected to be taken out by a capital market transaction in the
first half of 2017.

The change in rating outlook to stable from positive reflects the
slower than expected prospects of deleveraging since Moody's
assigned a positive outlook in May 2015 due to the debt funded
acquisitions of Servair which follows the acquisition of IFS in
2016 for CHF130 million and demonstrates the company's appetite
for acquisitions in a consolidating market . Based on available
information, Moody's expect gategroup's pro forma debt to EBITDA,
as adjusted by Moody's, to be similar to the 4.5x ratio as of
September 2016 based on the full consolidation of Servair
although higher on a proportional consolidation basis.

Moody's view positively the acquisition of Servair due to its
strong presence in France and Africa which complements well
gategroup's network and strengthens its business profile. The
acquisition allows the company to increase its geographical reach
and the attractiveness of its offering to global clients, and to
expand into the fast-growing and higher margin African market.
Annual revenues following the acquisition are expected to be in
excess of CHF4.4 billion, compared to CHF 3.3 billion in LTM Q3
2016. However, Moody's note that limited information has been
made public with respect to Servair including any pension
liabilities and operating leases.

gategroup delivered a solid performance in 2016, with reported
revenue and Moody's adjusted EBITDA up by 10% and 26%
respectively in the last 12 months (LTM) to September 2016
compared to the previous year. The positive operating performance
was supported by 1) the contribution from newly acquired
companies; 2) organic growth; and 3) the positive impact from
efficiency measures and cost initiatives. In addition, contract
renewals remained high at 96% in the 9 months period to September
2016.

The group's liquidity remains good, including about CHF140
million cash on balance sheet at year-end 2016 and the
significant amount available under the EUR350 million revolving
credit facility. There is no scheduled debt amortization (apart
from the one year bridge loan used to acquire control in Servair)
until the loan maturity in 2020 and ample headroom under the
covenants.

Outlook

The stable outlook reflects the good operating performance of the
company during the first three quarters of 2016 and Moody's
expectations of a continuation of this trend in 2017 supported by
positive growth prospects in the airline industry.

What Could Change the Rating - Up

A ratings upgrade would require gross adjusted Debt / EBITDA to
fall below 4.0x, free cash flow to stay positive, and (EBITDA -
Capex) / Interest expense ratio to be sustained well above 2.0x.
Additionally, Moody's will consider the extent to which the
company has increased its geographical and customer
diversification.

What Could Change the Rating - Down

Negative pressure would likely be exerted on the rating if
gategroup's gross adjusted Debt/EBITDA rises above 5.0x, free
cash flow turns negative, or the (EBITDA - Capex) / Interest
expense ratio falls below 1.5x. A material deterioration in the
liquidity position of the company or a sizeable debt funded
acquisition would also be negative for the company's rating.

The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.

Headquartered in Zurich, gategroup Holding AG is the leading
independent airline caterer and hospitality and logistic services
provider in the world.


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


B&M EUROPEAN: Moody's Assigns Ba3 CFR, Outlook Stable
-----------------------------------------------------
Moody's Investors Service has assigned a first-time corporate
family rating (CFR) of Ba3 and probability of default rating
(PDR) of Ba3-PD to B&M European Value Retail S.A. Concurrently,
Moody's assigned a (P)Ba3 instrument rating to the GBP250 million
senior secured notes due 2022 to be issued by B&M. The outlook on
all ratings is stable.

Moody's issues provisional ratings in advance of the final sale
of securities and these ratings reflect Moody's preliminary
credit opinion regarding the transaction only. Upon a conclusive
review of the final documentation, as well as the final terms of
the transaction, Moody's will endeavour to assign definitive
ratings to the new contemplated notes. A definitive rating may
differ from a provisional rating.

RATINGS RATIONALE

The Ba3 corporate family rating reflects the strengths of B&M's
business model as evidenced by its rapid growth over recent years
in a very competitive market place, its solid margins and good
free cash flow generation before shareholder distributions. The
rating in particular considers B&M's ability to compete with much
larger competitors through its careful product selection of
secondary brands, private label goods and size/flavour variations
of primary brands. A more narrow selection of products across a
wide range of groceries and general merchandise compared to
traditional retailers also enables the company to quickly adapt
to competition and changing customer preferences. In addition,
B&M's lean cost structure with the majority of employees at
minimum wage, the selective expansion of its store network in a
favourable rent environment and direct sourcing from Asia
supports margins. Limited upfront investment required for new
stores and limited maintenance capex from a relatively young
store portfolio support significant operating cash flows that
have been the main source to finance B&M's rapid growth.

However, the Ba3 rating also continues to reflect B&M's small but
growing size relative to traditional retailers, its concentration
largely in the UK, and the somewhat leveraged capital structure,
estimated at 4.2x for March 2017 pro-forma for the notes issuance
and on a Moody's-adjusted basis. It further considers the
challenges arising from rapid growth such as the need to scale
and strengthen operational structures, and the need to balance
the focus on growth with the management of existing operations.
Investments in existing stores and operations are likely to
increase as the company grows, which could pressure margins and
cash flow generation over time. Like-for-like growth has also
slowed over the last years, partly due to the rapid store roll-
out and resulting cannibalization effects. B&M, similar to other
retailers, is also facing some cost pressure from the weakened
Sterling, given some direct sourcing in US dollars from Asia, and
from minimum wage rises over the next year. Lastly, Moody's notes
that the company is paying dividends, including a special
dividend paid in July 2016, and Moody's expects shareholder
distributions to continue to grow at least with normalised
earnings, thereby absorbing a significant share of its otherwise
good cash flow profile.

Moody's expects B&M to continue to pursue its growth strategy in
the coming years based on a new annual store roll-out broadly
similar to its plans for FY2017. With 34 net new stores in the UK
and 17 in Germany as of December 2016, the company remains on
track to achieve its target of at least 50 new stores in the UK
and 19 in Germany for FY2017. Accordingly, Moody's also expects
both significant revenue and EBITDA growth in the coming years
while free cash flow generation after dividends, based on the
company's stated dividend limit of 40% of normalized earnings and
without taking into account any additional shareholder
remuneration, should remain positive.

The (P)Ba3 rating on the GBP250 million senior secured notes
reflects the pari passu capital structure and hence shared
security and guarantee portfolio with the GBP300 million term
loan A and GBP150 million revolving credit facility. The 50%
recovery rate for B&M reflects the mix of bank and bond debt in
the capital structure and the limited set of financial covenants.

Moody's views B&M's liquidity profile as good. Pro-forma for the
transaction and as of September 2016, the company has GBP93
million of cash on the balance sheet and access to the undrawn
GBP150 million revolving credit facility due 2021 (GBP136.5
million available for cash drawings). This should comfortably
cover the company's meaningful seasonal working capital needs and
investments for expansion. Access to the revolving credit
facility is subject to one financial maintenance covenant, tested
semi-annually, under which Moody's expects B&M to retain
comfortable headroom. The company has no material debt maturities
until the 2021 maturity of the term loan A.

Rating Outlook

The stable outlook reflects Moody's expectation of continued
solid growth from new store openings. The rating and outlook also
incorporate Moody's expectation that leverage will not materially
increase from current levels and do not factor in any larger
debt-funded acquisitions.

What Can Change The Rating Up/Down

Successful execution of its growth plans and a sustained track
record of operating within its stated leverage comfort parameter,
in addition to Moody's-adjusted Debt/EBITDA falling sustainably
below 3.75x and RCF/Net Debt rising sustainably above the mid-
teens could lead to positive pressure. Conversely, the rating
could come under negative pressure if Moody's-adjusted
Debt/EBITDA rises sustainably above 4.5x or RCF/Net Debt falls
below 12%, or if Moody's becomes concerned over increasing
operational or financial risks from the company's rapid growth.
Moody's would also expect visible free cash flow generation and
continued solid liquidity for rating maintenance.

The principal methodology used in these ratings was Retail
Industry published in October 2015.

B&M European Value Retail S.A. is the owner of Liverpool
headquartered B&M and Jawoll, variety discount retailers
operating across the United Kingdom and in Germany. The company
is listed on the London Stock Exchange and the largest
shareholders are the investment vehicle for the Arora family, SSA
Investments, with 21% and private equity investor CD&R with
around 11%. Following a period of rapid growth over recent years
the company achieved GBP2.2 billion of revenues in the twelve
months to September 2016.


RICHMOND UK: S&P Assigns Preliminary 'B' CCR, Outlook Stable
------------------------------------------------------------
S&P Global Ratings assigned its preliminary 'B' corporate credit
rating to Richmond UK Holdco Ltd.  The outlook is stable.

At the same time, S&P assigned its 'B+' proposed issue rating and
'2' recovery rating to the company's proposed senior secured
credit facility, which consists of a GBP100 million revolving
credit facility (RCF) due 2023 and a GBP575 million term loan due
2024.  The '2' recovery rating indicates S&P's expectation of
significant recovery (70%-90%; lower half of the range) of
principal and interest for lenders in the event of a payment
default.

Richmond UK Bidco Ltd. is one of the co-borrowers of the senior
credit facility.

S&P will withdraw its issuer and issue ratings on Parkdean
Resorts Midco Ltd. (the entity being acquired) upon completion of
the acquisition.  This is likely to occur at the end of the first
quarter of 2017.

S&P's 'B' preliminary rating on Richmond UK Holdco, the indirect
parent company of Parkdean Resorts (PdR), principally reflects
the company's high adjusted debt leverage and its modestly
diversified and seasonal business, which offers limited brand
awareness in the context of the broader leisure space.  The new
capital structure includes a GBP100 million RCF, GBP575 million
as a first-lien facility, and GBP150 million as a second-lien
facility.  The financing also includes GBP150 million from a
ground rent transaction that is expected to close at the same
time as the acquisition and includes the sale and leaseback of 10
of the company's freehold properties.  Under S&P's criteria, it
capitalizes this entire amount and deduct the capital gain taxes
associated with the transaction.

Richmond UK Holdco is being used as an investment vehicle to
acquire PdR. PdR was formed in November 2015 when Park Resorts
and Parkdean Holidays merged to form the largest holiday park
operator in the U.K., by number of parks.  The combined group has
73 holiday park sites around the U.K., in a very fragmented
market.

S&P will refer to Richmond UK Holdco Ltd. as PdR in the rest of
the article.  PdR's weak business risk profile assessment
reflects S&P's view of its limited geographic diversity -- it
only operates in the U.K. -- and its limited accommodation
offering within the broader competitive tourism market.  Holiday
parks are typically only used for holidays and weekend retreats
and have a niche customer base.  They are also exposed to
cyclical consumer discretionary spending, which could be
threatened by Brexit concerns.  The group's revenues are
moderately seasonal and peak in correlation with school holidays.
S&P understands that PdR generates about 60% of its EBITDA in
June-August.  In addition, although S&P recognizes PdR has
recognition within the holiday park niche, its brand recognition
in the broader leisure accommodation space is lower than most
players.

That said, S&P recognizes that PdR has a track record of revenue
resilience and stable operating performance, even in a
recessionary environment.  In addition, revenues are somewhat
predictable, particularly given the annual income paid by caravan
owners (which represents about 20% of revenue), and occupancy
rates are high during peak periods.  Furthermore, S&P views the
group's profitability as solidly within the average category,
compared with lodging peers.  It is expected to report EBITDA
margins of above 25% for 2016.

The rating is constrained by S&P's assessment of PdR's highly
leveraged capital structure and its ultimate ownership by
private-equity firm Onex, which S&P considers a financial
sponsor.  This, in turn, affects S&P's assessment of PdR's
financial policy, specifically our view of the potential for
future debt-funded acquisitions or further dividend
recapitalizations.

Although S&P views the change of ownership as relatively neutral
to the business, it expects the financial policy to be
aggressive, given the initial high leverage being applied to the
business.  S&P expects S&P Global Ratings-adjusted debt to EBITDA
will be significantly above 5.0x in 2017 (at around 6.9x, pro
forma the transaction).  S&P's debt calculation includes about
GBP725 million of financial debt and has been adjusted to
incorporate about GBP170 million in operating leases-like debt.
As part of the financing, Onex and management are putting in
place about GBP545 million in the form of preference shares.  S&P
considers these to be pure equity under our criteria for the
treatment of non-common equity financing, and exclude them from
S&P's leverage and coverage calculations (subject to review of
the final documentation when S&P finalizes the rating).

S&P's financial analysis is based on an independent third-party
due diligence report for the financial year that ended in
December 2016 because full audited accounts for the year are not
yet available.

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

   -- Modest growth in the U.K. economy, with forecast GDP growth
      of 1.0% in 2017 and 1.1% in 2018;
   -- Revenue growth of about 3%-5% in 2017 and 2%-4% in 2018,
      excluding acquisitions;
   -- A modest improvement in adjusted EBITDA margins, reaching
      close to 30% in 2017 through realized synergies and cost-
      control initiatives; and
   -- Capital expenditure (capex) of GBP49.2 million in 2017,
      including growth investments.  Maintenance capex is about
      5%-6% of revenues.

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

   -- Leverage will remain elevated, at 6.9x in 2017, pro forma
      the transaction, decreasing to 6.7x in 2018;
   -- Healthy EBITDA interest cover of about 2.3x-2.4x in the
      same period;
   -- Ongoing positive free operating cash flow generation in the
      next 12-24 months; and
   -- Funds from operations (FFO) to debt of 3%-5%.

The stable outlook reflects S&P's expectation of good operating
performance and revenue growth of 3%-5% over the next year, as
well as positive free operating cash flow generation.  S&P also
anticipates adequate liquidity and credit metrics, in line with a
'B' rating, and EBITDA interest cover sustainably above 2.0x.

S&P could lower the rating if adjusted debt to EBITDA rises well
above 7x, EBITDA interest coverage falls to the 2.0x area, or
free operating cash flow turns negative.  This could occur if
operating performance meaningfully deteriorates, or leverage is
increased to pursue acquisitions or return cash to shareholders.
S&P could also lower the rating if it perceives any downward
pressures on liquidity.

S&P sees rating upside as remote over the next 12-24 months,
given the rating is currently constrained by both the high
leverage of above 5.0x and the financial sponsor ownership.  S&P
could raise the rating if leverage declined below 5.0x on a
sustainable basis, and the group posted positive FOCF and
maintained EBITDA interest cover above 2x.


TATA STEEL UK: British Steel Turnround Under Way Following Sale
---------------------------------------------------------------
Michael Pooler at The Financial Times reports that the
resurrected British Steel is on track to achieve a profit in its
first year of trading after being sold by Tata for GBP1, offering
signs of a tentative recovery in the UK steel industry.

According to the FT, a turnround under way at the privately owned
company helped deliver positive earnings before interest, tax,
depreciation and amortization in its initial seven months of
independence.

It said that this should result in a small pre-tax profit by the
end of the year, barring any significant shifts in raw material
costs, or other unforeseen circumstances, the FT relates.

Centered on the large Scunthorpe plant in northern England, the
former long products division of Tata Steel Europe was acquired
last summer by investment firm Greybull Capital for a nominal sum
as the Indian group broke up its troubled UK steel empire, the FT
discloses.

The new owners pledged a GBP400 million investment package and
renamed the business in homage to the former titan of British
industry, the FT recounts.  It makes steel for construction and
railways, with 4,400 employees at sites across Britain and 400 in
France, the FT relays.

Tata began restructuring the unit in late 2015 with mass
redundancies and demands for steep discounts from suppliers
before the disposal of two smaller mills in Scotland, the FT
recounts.

Full pay will be restored in June for workers, who had agreed to
a 3% salary sacrifice at the time of the takeover, the FT states.

Employees at most of Tata's remaining UK business, including the
Port Talbot steelworks, will soon vote on a rescue package that
involves the closure of their pension scheme, the FT says.

Tata Steel is the UK's biggest steel company.


                            *********

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 2017.  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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