---

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

                           E U R O P E

           Tuesday, March 28, 2017, Vol. 18, No. 62


                            Headlines



C R O A T I A

AGROKOR DD: Croatia to Draw Up Law Amid Financial Woes
CROATIA: S&P Affirms 'BB' Long-Term Sovereign Credit Rating


F I N L A N D

TALVIVAARA MINING: Has Yet to Respond to Restructuring Program


F R A N C E

ALBEA BEAUTY: Moody's Rates New USD816MM Sr. Secured Loan B B2


G E O R G I A

GEORGIA: Fitch Affirms 'BB-' LT Issuer Default Ratings


G E R M A N Y

HP PELZER: S&P Revises Outlook to Positive & Affirms 'B+' CCR


I T A L Y

UNICREDIT SPA: Moody's Assigns ba1 Adjusted BCA Rating


K A Z A K H S T A N

GRAIN INSURANCE: S&P Affirms 'B' Counterparty Credit Rating
KAZKOMMERTSBANK: Moody's Confirms Caa2 Sr. Unsecured Debt Rating


L U X E M B O U R G

ZOBELE GROUP: S&P Affirms Then Withdraws 'B+' CCR


N E T H E R L A N D S

PALLAS CDO II: S&P Raises Rating on Class C Notes to 'BB+'


P O L A N D

PFLEIDERER GROUP: S&P Affirms 'B+' CCR, Outlook Remains Positive


R U S S I A

BANK ICBC: S&P Affirms 'BB+/B' Ratings; Outlook Revised to Pos.
TENEX-SERVICE: S&P Affirms 'BB/B' Ratings, Outlook Positive
VNESHECONOMBANK: S&P Affirms 'BB+/B' ICRs, Outlook Developing
VODOKANAL ST. PETERSBURG: S&P Affirms 'BB/B' CCRs, Outlook Pos.


S P A I N

TENEDORA DE ACCIONES: S&P Affirms 'BB+/B' Ratings, Outlook Pos.


S W E D E N

COM HEM: S&P Revises Outlook to Positive & Affirms 'BB' CCR


S W I T Z E R L A N D

SELECTA GROUP: S&P Affirms 'B' CCR on Acquisition Announcement


T U R K E Y

TURKIYE HALK: Moody's Assigns (P)B1 LT FC Sub. Debt Rating
TURKIYE HALK: Fitch Rates Tier 2 Capital Notes 'BB(EXP)'


U K R A I N E

UKRAINE: Parliament Simplifies Bank Capitalization Procedure


U N I T E D   K I N G D O M

ASTON MARTIN: Moody's Affirms B3 Corporate Family Rating
ASTON MARTIN: S&P Affirms 'B-' CCR; Outlook Stable
BAKKAVOR FINANCE: S&P Affirms Then Withdraws 'B+' CCR
BORETS INTERNATIONAL: Fitch Assigns 'BB-' LT IDR, Outlook Stable
CAMBRIAN PARK: Rescued from Administration; 150 Jobs Saved

CLEEVE LINK: Care Services to be Split Between Six Organizations
CO-OPERATIVE BANK: Hedge Funds Plan to Form Bondholder Committee
STONEHOUSE CREEK: Council Bosses Claim Not Aware of Liquidation


                            *********



=============
C R O A T I A
=============


AGROKOR DD: Croatia to Draw Up Law Amid Financial Woes
------------------------------------------------------
Reuters reports that Croatia's Deputy Prime Minister Martina
Dalic said on March 24 the government is drawing up a law to
protect the economy if a major company runs into trouble.

According to Reuters, she said the law could be used for debt-
laden food business Agrokor, a major employer whose creditors
include Russia's Sberbank.

She denied the legislation was being drawn up because of
Agrokor's problems, Reuters notes.

"The law, which I expect to be ready very soon, will be relevant
for companies with more than 8,000 employees and a debt of at
least one billion euros (US$1.1 billion) they cannot regularly
service," Reuters quotes Ms. Dalic as saying.

Agrokor, the largest food producer and retailer in the Balkans
with revenues equivalent to 15% of Croatia's gross domestic
product, is under pressure from investors and the government to
clear up its debts, Reuters discloses.

Ms. Dalic said the law would define a framework for stabilizing
an indebted company's operations during its business, financial
and ownership restructuring, Reuters relays.

Prime Minister Andrej Plenkovic has already urged Agrokor owner,
Croatian businessman Ivica Todoric, and the firm's management to
take "wise and useful" decisions, Reuters discloses.

According to Reuters, analysts say Agrokor piled up debts to
support its rapid expansion but relied on borrowing at high
interest rates.

Agrokor says it is servicing its obligations and stabilizing the
business, which extends across Slovenia, Serbia and Bosnia,
Reuters relays.

Zagreb-based Agrokor is the biggest food producer and retailer in
the Balkans, employing almost 60,000 people across the region
with annual revenue of some HRK50 billion (US$7billion).


CROATIA: S&P Affirms 'BB' Long-Term Sovereign Credit Rating
-----------------------------------------------------------
S&P Global Ratings affirmed its 'BB' long-term and 'B' short-term
foreign and local currency sovereign credit ratings on the
Republic of Croatia.  The outlook is stable.

                            RATIONALE

S&P's ratings on Croatia are supported by the country's declining
general government deficit, notwithstanding a projected slight
widening in 2017, and its gradually falling external
indebtedness, primarily on the back of continued banking sector
deleveraging.  At the same time, the ratings remain constrained
by Croatia's still-high government debt burden, low income levels
in a European comparison, and the new administration's relatively
short track record of implementing structural reforms and
consolidating public finances.

In 2017, S&P expects economic growth in Croatia will accelerate
to slightly over 3.0% from 2.9% in 2016.  Export growth should
remain strong as the positive momentum in the tourism industry
will likely be sustained due to continuously increasing capacity.
At the same time, export growth is becoming more diversified
including in the pharmaceutical and shipbuilding industry.
Moreover, domestic demand will remain strong, in S&P's view.
Household consumption benefits from strong labor market
improvements including a drop in the unemployment rate to below
13%.  While still high, this is a marked improvement from the
16.3% just a year earlier.  At the same time, last year's tax
reform that came into effect this year, and included changes to
personal and corporate income taxes, positively affects household
disposable incomes, and should lead to continued investment in
the corporate sector.  Nonetheless, S&P expects growth to slow to
around 2.5% in the medium term due to structural factors such as
an aging population; a still comparatively weak business
environment as reflected in the sixth-lowest score, among EU
countries, in the World Bank's study, Doing Business 2016; and a
still very large state sector.

That said, the political uncertainty that overshadowed an
otherwise positive 2016 seems to have abated, with the HDZ-MOST
government operating largely without significant publicly visible
dissent.  The government has initiated important reforms, such as
the already mentioned tax reform, and has identified a number of
structural reforms including improvements in the business
environment, reduction of parafiscal charges, and reforms in the
health care sector.  Maintaining strong reform momentum will be
key to raising Croatia's potential growth rate, bringing public
finances sustainably on a healthier footing, and building a track
record of continued reform implementation.

In 2016, S&P expects the government deficit will have markedly
reduced to about 1.3% of GDP, down from 3.3% in 2015.  The
improvement was likely driven by strengthening revenues, although
also by expenditure restraint and a still low absorption of EU
funds.  S&P expects a slight loosening of the fiscal stance in
2017 on the back of recent wage agreements in the public sector
and a stronger push for EU co-sponsored investment projects.
Until 2020, S&P expects the deficit will decline again to below
2% of GDP.

Croatia's lower-than-expected general government deficit also
means that the still-high government debt burden has passed its
inflection point and declined, for the first time since 2007, to
an estimated 84.1% of GDP. Over our forecast horizon through to
2020, S&P expects a further gradual reduction to about 79% of GDP
by 2020.  Croatia's large government debt burden also leads to
one of the highest government interest expenditure to revenue
ratios in the EU at an estimated 8.2% in 2016.

Moreover, Croatia's debt profile remains characterized by the
domestic banking sector's relatively large exposure to the
Croatian government--23% of total banking sector assets are in
the form of loans to or securities holdings of the general
government sector.  The Croatian government also has a high share
of foreign-currency denominated debt--over two-thirds of its debt
is denominated in a foreign currency, mostly the euro.  This
makes Croatia more sensitive to changes in global monetary
conditions and sentiment, which could push up interest rates and
result in higher debt-servicing costs, eroding the progress made
on achieving a primary surplus.

Croatia's external profile continues to strengthen.  On a flow
basis, strong export growth and continued net transfers from the
EU budget should support the current account, which S&P expects
will remain in surplus throughout its forecast horizon.  As a
result of continued strong and positive net foreign direct
investment inflows, S&P forecasts the financial account will also
improve until 2020.  At the same time, a relatively high import
component of goods exports and strong domestic demand will also
lead to robust import growth.  As a result of the strong external
flows and continued external deleveraging in the Croatian banking
sector, S&P expects the country's external indebtedness will
decrease further.  Narrow net external debt, our preferred
measure, is forecast to decline to around 50% of current account
receipts (CARs) by 2020, while gross external financing needs
could drop to about 80% of CARs over the same period.  General
government external debt could broadly stay at its current level
with external borrowing solely matching external refinancing and
the rest of financing needs being met on domestic markets, which
remain highly liquid.

Croatian banks returned to stronger profitability in 2016 with
the return on equity averaging 12.8% in the first three quarters
after a slump in 2015, as a result of the forced conversion of
Swiss franc loans.  Still, nonperforming loans (NLPs) remain high
at slightly below 15% of total loans, although sales of NPL
packages -- mostly to foreign investors -- are accelerating, with
legislation in progress that should facilitate the workout of
corporate NPLs.  Credit growth remains tepid with corporate loans
increasing by 1.3% in 2016.  However, as a result of improving
bank balance sheets and a still accommodative monetary policy
stance by the Croatian National Bank, S&P expects credit growth
will pick up further in 2017.  The Croatian National Bank
Hrvatska Narodna Banka; the central bank) is committed to the
quasi Croatian kuna-euro peg, which limits monetary policy
flexibility, as does the highly euro-ized economy.  As of January
2017, 64% of loans and 64% of deposits were denominated in or
linked to a foreign currency, usually the euro.  Currently, a
second version of thedraft amendments to the Law on Hrvatska
Narodna Bankais being worked on.  The last draft entailed
amendments that would have seen increased scope for audits by the
State Audit Office and was criticized by the European Central
Bank (ECB) and the central bank.  S&P understands that any
further drafts will also be subject to a review by the ECB and
that the final version should fully comply with ECB rules.
Should a version of the law more akin to the intial draft pass
parliament and be signed into law, it could increase concerns
over the perceived political interference with central bank
operations.

                              OUTLOOK

The stable outlook reflects S&P's view of balanced upside and
downside risks to the ratings over the next 12 months.

S&P could raise its ratings on Croatia if the economic recovery
remains on track while the government continues to show ability
and willingness to implement structural reforms and stick to its
fiscal consolidation agenda, leading to a faster-than-forecast
consolidation of the government deficit.  Moreover, S&P could
consider an upgrade if Croatia's external ratios improve faster
than in S&P's base-case scenario as a result of stronger external
deleveraging or faster growth of current account receipts.

S&P could lower its ratings if Croatia's contingent liabilities,
such as the lawsuits against the government, translated into a
higher government debt burden, or if structural reform efforts
slowed leading to lower economic growth and higher-than-forecast
deficits.  Moreover, S&P could consider a downgrade if amendments
to the Act on Hrvatska Narodna Banka were passed that raised
concerns over the central bank's independence.


=============
F I N L A N D
=============


TALVIVAARA MINING: Has Yet to Respond to Restructuring Program
--------------------------------------------------------------
Talvivaara Mining Company Plc ("Talvivaara" or the "Company") on
March 23 disclosed that it has been informed by the administrator
of its corporate reorganization proceedings (the "Administrator")
that the District Court of Espoo has requested the Company to
give a response in the matter concerning the confirmation request
filed to the District Court by the Administrator on March 6,
2017.

Concurrently, the Company was notified that Finnvera Plc, Nordea
Bank AB (Publ.), Finnish branch, Danske Bank Plc, OP Corporate
Bank Plc and Svenska Handelsbanken AB, Finnish branch have given
a response to the District Court where they have objected the
confirmation of the restructuring program, requesting the
cessation of the corporate reorganization proceedings and placing
the Company in bankruptcy.  The Company has also been informed
that the representative of the Company's bond holders has filed a
response supporting the confirmation of the restructuring
program.  The Company and the Administrator will give their
responses to the District Court of Espoo in due course.  The
Company's and Administrator's view is that the Company has
fulfilled the special conditions set for the entry into force of
the restructuring program as they were approved by the creditors
in the creditors' voting procedure.  The Company anticipates the
District Court of Espoo to announce its decision in the matter in
the next few weeks.

                   About Talvivaara Mining

Talvivaara Mining Co. Ltd. is a Finnish nickel producer.  It
filed for a corporate reorganization on Nov. 15, 2013, to raise
funds and avoid bankruptcy.  The company suffered from falling
nickel prices and a slow ramp-up at its mine in northern Finland,
forcing it to seek fundraising help from investors and creditors.


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


ALBEA BEAUTY: Moody's Rates New USD816MM Sr. Secured Loan B B2
--------------------------------------------------------------
Moody's Investors Service has assigned a B2 rating to the new
USD816 million-equivalent senior secured term loan B, which
includes US dollar and Euro tranches due 2024 and the USD105
million revolving credit facility (RCF) due 2023 issued by Albea
Beauty Holdings S.A., (Albea), a leader in beauty and personal
care packaging.

Concurrently, Moody's has affirmed the B2 corporate family rating
(CFR) and B2-PD probability of default rating (PDR) of Albea.

Moody's will withdraw the B2 rating on the existing EUR245
million and USD385 million of senior secured notes due 2019
issued by Albea Beauty Holdings S.A. following their redemption.

The outlook on all ratings is stable.

RATINGS RATIONALE

Albea's refinancing of its existing senior secured notes with a
new term loan B will both significantly reduce the ongoing cash
interest cost to the company as well as extend the maturity date
to 2024 from 2019. The pricing on the new term loan is expected
to compare favourably to the pricing of 8.75% and 8.375% on the
existing bonds due 2019.

The refinance will improve liquidity by generating significant
cash interest savings and provide additional financial
flexibility which will help offset the impact of rising raw
material and energy prices.

Albea has largely completed a growth strategy acquiring and
integrating six businesses, most notably Rexam Personal Care in
2012, to create a leading player in the beauty and personal care
packaging market operating through four business lines: Tubes
(42% of FY2016 revenues), Dispensing (19%), Cosmetic Rigid
Packaging (CRP 34%) and Beauty Solutions (5%). The reduction in
interest costs and improvement to liquidity support Moody's
expectation that adjusted leverage will reduce to below 5.0x by
the end of 2018.

As part of the transaction, Albea proposes paying a dividend of
USD67.8 million to shareholder, Sun Capital which acquired the
company in 2010 and has supported a sustained period of
investment into the business. Nevertheless, the transaction
demonstrates a more shareholder-friendly financial policy than
Moody's had expected.

The announced transaction will increase adjusted leverage to 5.8x
pro forma for the new financing, up from 5.0x as at 31 December
2016. Moody's views the increase in leverage as a risk to the
business at a time when it has several remaining strategic
business actions aimed at delivering topline growth by increasing
its share of wallet with customers and further operational
improvements aimed at improving profitability.

Liquidity Profile

Moody's views Albea's liquidity profile as good following the
transaction. On opening, the company will have USD84.5 million in
cash and full availability of its: (i) USD105 million pari passu
revolving credit facility; (ii) USD60 million committed North
American ABL facility; and (iii) EUR100 million committed
European receivables facility (factoring).

STABLE OUTLOOK

The stable outlook balances the progress made in improving
Albea's cash flow profile with its high leverage and the
challenging growth environment in which it operates.

WHAT COULD CHANGE THE RATING -- UP/DOWN

For upgrade pressure, Moody's would expect the company to
continue to improve EBITDA margins resulting in a deleveraging
measured by debt/EBITDA (as adjusted by Moody's) below 5x.
Moody's would also expect the company to sustain its positive
free cash flow with FFO/debt maintained above 12%.

Downward pressure could occur if improvements in operating
performance from growth opportunities and cost efficiencies fail
to materialize, debt/EBITDA (as adjusted by Moody's) increases
above 6x or if there is a material deterioration in liquidity.

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Packaging
Manufacturers: Metal, Glass, and Plastic Containers published in
September 2015.

COMPANY PROFILE

Albea was acquired by Sun Capital Partners in 2010 as a buy and
build strategy. The company has grown to become a leading global
player in the cosmetics and personal care packaging markets. In
2016, the company reported revenues of USD1,402 million.


=============
G E O R G I A
=============


GEORGIA: Fitch Affirms 'BB-' LT Issuer Default Ratings
------------------------------------------------------
Fitch Ratings has affirmed Georgia's Long-Term Foreign- and
Local-Currency Issuer Default Ratings (IDR) at 'BB-' with Stable
Outlooks. The issue ratings on Georgia's senior unsecured
Foreign- and Local-Currency bonds have also been affirmed at
'BB-'. The Short-Term Foreign- and Local-Currency IDRs, and the
issue ratings on short-term bonds, have been affirmed at 'B'. The
Country Ceiling has been affirmed at 'BB'.

KEY RATING DRIVERS

Georgia's 'BB-' ratings balance weak external finance indicators,
including large current account deficits, high net external debt
and low external liquidity, with economic resilience and
favourable governance indicators.

Georgia's 'BB-' IDRs also reflect the following key rating
drivers:

Structural features are broadly in line with 'BB' rated peers.
Per capita income is relatively low, both at market exchange rate
and in PPP terms, but the human development index is broadly
aligned with the 'BB' median. Additionally, governance and
business environment indicators compare favourably with 'BB'
medians, underpinned by open and business-friendly policies. The
Georgian Dream coalition was renewed following the October 2016
legislative elections, securing a large majority. In Fitch's
view, the election outcome and the newly signed IMF programme
will result in policy continuity.

The country's exposure to financial shocks is mitigated by the
overall soundness of the banking sector. Low open FX positions
and devaluation buffers built into foreign currency loans limited
the impact of the 2015-2016 depreciation. With an aggregate
capital adequacy ratio of 15.8% at end-2016 and a NPL ratio of
3.5%, the sector appears to be in a position to further weather
potential other external shocks.

Real GDP growth slowed down to 2.7% in 2016 (2015:2.9%) due to a
continuously weak external environment and moderate domestic
consumption. However, it remains higher than 'BB' medians on a
five-year average (4% against 3.5%), and prospects are better for
2017, thanks to base effects, an expected recovery in some key
trading partners (including Russia) and on-going FDI in
infrastructure. Inflation remains under control despite the 2015-
2016 exchange rate depreciations, at 1.6% on average over the
past five years, and much below peers. This illustrates a degree
of effectiveness of the monetary policy's inflation-targeting
framework despite the high dollarisation of the economy (70% of
deposits were in foreign currency at end-2016).

External finances remain a key rating vulnerability. The lari
further depreciated by 10.5% against the US dollar in 2016, after
28.5% in 2015. This was driven by trade partners' currency
weakness as well as a further widening in the current account
plus net FDI deficit to an estimated 4.4% of GDP (2015:4.5%),
much weaker than the 'BB' median of a 0.5% of GDP surplus.
Tourism receipts and remittances had reasonable growth, but goods
exports declined by 4% in nominal terms during the year. However,
the recently signed trade agreements with EU could improve export
prospects over the medium term.

The country's net external debt, at an estimated 65.7% of GDP at
end-2016, is three times higher than the 'BB' median of 20.2%.
Despite its favourable composition (around 45% of gross external
debt is either long-term official lending, or intercompany loans
to the private sector), external interest and debt service ratios
are significantly higher than peers. The external liquidity
position is also weak, with international reserves covering
around three months of current account payments, and a liquidity
ratio below 100% (against a BB median of 150.4%), although the
flexible exchange rate reduces the need for large FX buffers.

Public finances appear neutral for the 'BB' rating category. A
counter-cyclical policy has increased the general government (GG)
budget deficit to 4.2% of GDP in 2016, higher than the 'BB'
median of 3.3%. However, the new IMF programme signed in March
2017 anchors fiscal consolidation, targeting a GG budget deficit
of 3.1% of GDP by 2020 and targeting public debt of maximum 45%
of GDP. The 2017 budget, targets a stable GG budget deficit of
4.1% of GDP, but includes ambitious reforms for both revenue and
spending. The increase in excise duties will more than balance
the revenue shortfall from the corporate income tax reform, while
restrictions on current spending will improve spending
composition.

The gradual improvement in budget composition as well as a number
of envisaged structural reforms (including on pensions) could
help consolidate public finances over the medium term. Fitch has
a slightly more conservative growth assumption than the
authorities, but estimates that public debt could broadly
stabilise at around 45%-46% of GDP by 2018, absent any further
exchange rate shock (79% of public debt was foreign-currency
denominated at end-2016). This would maintain it broadly in line
with 'BB' medians, while the large share of official lending (70%
of total public debt at end-2016) will likely maintain interest
payments and moderate debt maturities.

SOVEREIGN RATING MODEL (SRM) and QUALITATIVE OVERLAY (QO)

Fitch's proprietary SRM assigns Georgia a score equivalent to a
rating of 'BB' on the Long-Term FC IDR scale.

Fitch's sovereign rating committee adjusted the output to arrive
at the final LT FC IDR by applying its QO, relative to rated
peers, as follows:

- External finances: -1 notch, to reflect high net external debt

Fitch's SRM is the agency's proprietary multiple regression
rating model that employs 18 variables based on three year
centred averages, including one year of forecasts, to produce a
score equivalent to a LT FC IDR. Fitch's QO is a forward-looking
qualitative framework designed to allow for adjustment to the SRM
output to assign the final rating, reflecting factors within
Fitch criterias that are not fully quantifiable and/or not fully
reflected in the SRM.

RATING SENSITIVITIES

The main factors that, individually or collectively, could
trigger positive rating action are:

- A revival of strong and sustainable GDP growth accompanied by
   fiscal discipline
- A decline in net external indebtedness

The main factors that, individually or collectively, could
trigger negative rating action are:

- A loosening of the government's commitment to fiscal
   discipline, leading to further rises in budget deficits and
   public debt
- A decline in foreign exchange reserves, for example by a
   widening of the current account deficit not financed by FDI
- Deterioration in either the domestic or regional political
   environment that affects economic policy making or regional
   growth and stability.

KEY ASSUMPTIONS

Fitch assumes that Russia's economy will grow by 1.4% in 2017 and
2.2% in 2018, supporting growth in Georgian exports and
remittances. Economic growth in other key regional trading
partners is also expected to improve in 2017 and 2018.

Fitch does not expect deterioration of bilateral relations with
Russia and assumes that potential spikes in tensions related to
the latent conflict in Abkhazia and South Ossetia do not affect
the Georgian economy performance and stability.


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


HP PELZER: S&P Revises Outlook to Positive & Affirms 'B+' CCR
-------------------------------------------------------------
S&P Global Ratings revised its outlook on German auto supplier HP
Pelzer Holding GmbH, the 100%-owned subsidiary of Italy-based
Adler Plastic SpA, to positive from stable.  S&P affirmed its
'B+' long-term corporate credit rating on the company.

At the same time, S&P assigned its 'B+' issue rating to HP
Pelzer's proposed EUR350 million senior secured notes maturing
2024.  The '3' recovery rating indicates our expectation of
meaningful (50%-70%; rounded estimate: 55%) recovery in the event
of a payment default.

In addition, S&P affirmed its 'B+' issue rating on the company's
existing EUR280 million senior secured notes.  The recovery
rating remains at '3', indicating S&P's expectation of meaningful
(50%-70%; rounded estimate: 55%) recovery in the event of a
payment default.

The outlook revision to positive reflects the strengthening of HP
Pelzer's business risk profile since S&P assigned the corporate
credit rating in October 2014.  Since then, HP Pelzer's revenues
have grown by 44% to EUR1.3 billion as of end-2016 from
EUR885 million in 2013.  Reported EBITDA margins continuously
improved, having reached 9.1% as of last year from 7.3% in 2013,
due to cost control and cash flow management, and there is some
visibility of future revenue growth given that the current order
book totals about EUR7.1 billion.  S&P forecasts for 2017-2018
that the adjusted EBITDA margins will near 10%.  In addition, HP
Pelzer has increased its market share over the past three years
by around 10%-12% of the EUR10 billion-EUR12 billion global niche
market in which it operates.  S&P has therefore reassessed HP
Pelzer's business risk profile to fair from weak.  However, S&P
sees it as being at the lower end of S&P's fair category due the
company's lower adjusted EBITDA margins and smaller size than
peers'.

HP Pelzer is a German midsize auto supplier with revenues of
around EUR1.3 billion, specialized in the design, engineering,
and manufacturing of acoustic and thermal components, serving the
majority of original equipment manufacturers globally.  HP Pelzer
is part of the Adler Plastic group following its acquisition by
Adler Plastic and the subsequent integration of these two
companies.  HP Pelzer represents around 90% of the group's
revenues and most of its EBITDA.

Due to the change in S&P's business risk assessment, it has taken
into account the amount of unrestricted cash in S&P's net debt
calculation.  As a result, S&P's credit ratios for HP Pelzer have
significantly strengthened.  S&P expects funds from operations
(FFO) to debt will be at about 25% in 2016 and 2017, compared
with about 17% in 2015.  Excluding cash deduction, FFO to debt
improved to about 20% at the end of 2016.  Still, despite these
improvements, S&P notes that HP Pelzer still exhibits a low free
operating cash flow given its relatively high projected capital
expenditure (capex).  S&P also acknowledges that the company
approved a dividend distribution of EUR30 million in December
2016, of which EUR10 million will have been netted against an
intercompany receivable between HP Pelzer and Adler Plastic.  The
remaining EUR20 million is expected to be settled in 2017 in
cash.

In the proposed transaction, HP Pelzer intends to refinance its
existing EUR280 million senior secured notes with a new
EUR350 million issuance.  S&P therefore expects gross financial
debt to increase by EUR70 million.  However, S&P believes that
following the refinancing, the company will benefit from a
EUR5 million-EUR7 million reduction in interest expense that will
mitigate the negative impact on S&P's FFO-to-debt ratio, one of
the core metrics in its assessment of the company's
creditworthiness.  Furthermore, this transaction will eliminate
HP Pelzer's refinancing risks by extending its debt maturity to
2024.

The positive outlook reflects a one-in-three possibility that S&P
upgrades HP Pelzer by one notch within the coming year.

S&P could upgrade HP Pelzer if the Adler Plastic group posted, on
a sustainable basis, FFO to debt of more than 20% in 2017,
combined with EBITDA margins of about 10%.  S&P believes that
this could be achieved should volumes and cost reduction
materialize as expected.  This would also imply that HP Pelzer
has remained within its financial policy framework and avoided
any further significant dividends to Adler Plastic.  An upgrade
would also depend on the companies outside the restricted group
sustaining adequate liquidity and continuing to report positive
margins not far below the profitability of HP Pelzer.

S&P may revise the outlook to stable if the Adler Plastic group
does not perform in line with S&P's expectations, including FFO
to debt staying below 20%.

S&P could downgrade HP Pelzer if the group's adjusted FFO to debt
was below 12% or if adjusted free operating cash flow was
materially weaker than expected.  This could be the case if HP
Pelzer failed to execute its order book, contrary to S&P's
expectations, or if underperformance of the unrestricted entities
constrained the operating results at the group level.

S&P could also lower the ratings if entities outside HP Pelzer's
scope failed to address their refinancing needs on a stand-alone
basis, and if they were to significantly draw on HP Pelzer's cash
balances.  Rising leverage at these entities would also weigh on
S&P's rating on HP Pelzer.



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


UNICREDIT SPA: Moody's Assigns ba1 Adjusted BCA Rating
------------------------------------------------------
Moody's Investors Service has assigned a provisional (P)Aa2 long-
term rating to the UniCredit S.p.A - Mortgage Covered Bonds 2
(CPT) issued by Unicredit S.p.A.(the issuer, deposits rating Baa1
stable, adjusted baseline credit assessment ba1, counterparty
risk (CR) assessment Baa1(cr)), which are governed by the Italian
covered bonds law.

RATINGS RATIONALE

A covered bond benefits from (1) the issuer's promise to pay
interest and principal on the bonds; and (2) following a CB
anchor event, the economic benefit of a collateral pool (the
cover pool). The ratings therefore reflect the following factors:

(1) The credit strength of Unicredit S.p.A. (deposits rating Baa1
stable, adjusted baseline credit assessment ba1, counterparty
risk (CR) assessment Baa1(cr)) and a CB anchor of CR assessment
plus 1 notch.

(2) Following a CB anchor event the value of the cover pool. The
stressed level of losses on the cover pool assets following a CB
anchor event (cover pool losses) for this transaction is 17.9%.

Moody's considered the following factors in its analysis of the
cover pool's value:

a) The credit quality of the assets backing the covered bonds.
The mortgage covered bonds are backed by Italian residential (77%
of the cover pool) and commercial (11% of the cover pool)
mortgage loans. The collateral score for the cover pool is 7.5%.

b) The legal framework /structure of the programme. In
particular, the conditional pass-through nature of the notes
reduces the covered bonds' default probability in case the issuer
ceases to make payments to covered bond holders. However, in
Moody's views, a breach of the amortization test following an
issuer's default remains likely and it would in turn lead to the
acceleration of the bond which limits the benefit of the long
maturity extension.

c) The exposure to market risk, which is 12.9% for this cover
pool.

d) The over-collateralisation (OC) in the cover pool is 49.2%, of
which Unicredit S.p.A. provides 7.5% on a "committed" basis (see
Key Rating Assumptions/Factors, below).

The TPI assigned to this transaction is Probable. Moody's TPI
framework does not constrain the rating. The main driver for
assigning a Probable TPI is the acceleration risk embedded into
the structure, which limits the effectiveness of the conditional
pass-through features in reducing the refinancing risk. Moody's
TPI framework does not constrain the rating.

At present, the total value of the assets included in the cover
pool is approximately EUR19 billion, comprising EUR14.6 billion
residential mortgage loans, EUR2.1 billion commercial mortgage
loans and EUR2.2 billion substitute assets. The residential
mortgage loans have a weighted-average (WA) seasoning of 90
months and a WA loan-to-value (LTV) ratio of 49.2%. The
commercial mortgage loans have a WA seasoning of 100 months and a
WA LTV ratio of 29.3%.

The provisional ratings that Moody's has assigned address the
expected loss posed to investors. Moody's ratings address only
the credit risks associated with the transaction. Moody's did not
address other non-credit risks, but these may have a significant
effect on yield to investors.

Moody's issues provisional ratings in advance of the final sale
of securities and these ratings only represent Moody's
preliminary opinion. Upon a conclusive review of the transaction
and associated documentation Moody's will endeavour to assign a
definitive rating to the covered bonds.

KEY RATING ASSUMPTIONS/FACTORS

Moody's determines covered bond ratings using a two-step process:
an expected loss analysis and a TPI framework analysis.

EXPECTED LOSS: Moody's uses its Covered Bond Model (COBOL) to
determine a rating based on the expected loss on the bond. COBOL
determines expected loss as (1) a function of the probability
that the issuer will cease making payments under the covered
bonds (a CB anchor); and (2) the stressed losses on the cover
pool assets should the issuer cease making payments under the
covered bonds (i.e., a CB anchor event).

The CB anchor for this programme is CR assessment plus 1 notch.
The CR assessment reflects an issuer's ability to avoid
defaulting on certain senior bank operating obligations and
contractual commitments, including covered bonds. Moody's may use
a CB anchor of CR assessment plus one notch in the European Union
or otherwise where an operational resolution regime is
particularly likely to ensure continuity of covered bond
payments.

The cover pool losses for this programme are 17.9%. This is an
estimate of the losses Moody's currently models following a CB
anchor event. Moody's splits cover pool losses between market
risk of 12.9% and collateral risk of 5%. Market risk measures
losses stemming from refinancing risk and risks related to
interest-rate and currency mismatches (these losses may also
include certain legal risks). Collateral risk measures losses
resulting directly from cover pool assets' credit quality.
Moody's derives collateral risk from the collateral score, which
for this programme is currently 7.5%.

The over-collateralisation in the cover pool is 49.2%, of which
Unicredit S.p.A. provides 7.5% on a "committed" basis. The
minimum OC level consistent with the Aa2 rating is 3%. These
numbers show that Moody's is not relying on "uncommitted" OC in
its expected loss analysis.

All numbers in this section are based on Moody's most recent
modelling (based on data, as per 31st December 2016).

For further details on cover pool losses, collateral risk, market
risk, collateral score and TPI Leeway across covered bond
programmes rated by Moody's please refer to "Moody's Global
Covered Bonds Monitoring Overview", published quarterly.

TPI FRAMEWORK: Moody's assigns a "timely payment indicator"
(TPI), which measures the likelihood of timely payments to
covered bondholders following a CB anchor event. The TPI
framework limits the covered bond rating to a certain number of
notches above the CB anchor.

For UniCredit S.p.A - Mortgage Covered Bonds 2 (CPT), Moody's has
assigned a TPI of Probable. The main driver for assigning a
Probable TPI is the acceleration risk embedded into the
structure, which limits the effectiveness of the conditional
pass-through features in reducing the refinancing risk.

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

The CB anchor is the main determinant of a covered bond
programme's rating robustness. A change in the level of the CB
anchor could lead to an upgrade or downgrade of the covered
bonds. The TPI Leeway measures the number of notches by which
Moody's might lower the CB anchor before the rating agency
downgrades the covered bonds because of TPI framework
constraints.

Based on the current TPI of "Probable", the TPI Leeway for this
programme is 2 notches. This implies that Moody's might downgrade
the covered bonds because of a TPI cap if it lowers the CB anchor
by 2 notches all other variables being equal.

A multiple-notch downgrade of the covered bonds might occur in
certain circumstances, such as (1) a country ceiling or sovereign
downgrade capping a covered bond rating or negatively affecting
the CB Anchor and the TPI; (2) a multiple-notch downgrade of the
CB Anchor; or (3) a material reduction of the value of the cover
pool.

RATING METHODOLOGY

The principal methodology used in these ratings was "Moody's
Approach to Rating Covered Bonds" published in December 2016.


===================
K A Z A K H S T A N
===================


GRAIN INSURANCE: S&P Affirms 'B' Counterparty Credit Rating
-----------------------------------------------------------
S&P Global Ratings said that it has revised its outlook on
Kazakhstan-based Grain Insurance Co. JSC to developing from
positive.  At the same time, S&P affirmed its 'B' long-term
counterparty credit and insurer financial strength ratings, as
well as S&P's 'kzBB+' national scale rating on the company.

The outlook revision stems from the possibility that Grain
Insurance's capital or performance may be affected by changes in
the business fortune of its shareholder.  In S&P's base-case
scenario, however, it expects the main rating factors will remain
balanced over the next 12 months, and S&P continues to see
positive developments in the company's enterprise risk management
(ERM).

The rating affirmation reflects S&P's view of the company's
highly vulnerable business risk profile and weak financial risk
profile.

S&P believes that Grain Insurance's weak competitive position,
stemming from its very small size in terms of premium written,
Kazakhstani tenge (KZT) 1.6 billion (or $4.6 million) in 2016,
and its predominant focus on the agricultural sector, are so far
not affected.  Grain Insurance's financial risk profile continues
to be supported by capital adequacy that significantly exceeds
S&P's threshold for the 'AAA' level under our risk-based capital
model, as well as by S&P's overall positive view that the
regulatory framework provides some protection against negative
intervention from shareholders.

S&P notes, however, that given uncertainties with regards to the
future business fortunes of Nurlan Tleubaev, and ongoing
financial difficulties across his businesses, S&P cannot rule out
direct or indirect effects on Grain Insurance.

So far, Grain Insurance's exposure to problematic Delta Bank is
limited at 9% of its invested assets, or 12% of total adjusted
capital as of Dec. 31, 2016.  The company has not yet recognized
any losses on this exposure, but if they emerge S&P would not
expect them to damage the company's financial risk profile.

Nevertheless, S&P is revising its assessment of Grain Insurance's
liquidity to strong from exceptional, given the increased credit
risk and continued growth of reserves following premium growth in
2016; this change is neutral to S&P's rating assessment, however.

Although Grain Insurance's operating results are volatile, the
2016 pro forma results are above S&P's expectations, with the
return on equity at 14.8% and return on revenues at 36.9%.

The developing outlook on Grain Insurance indicates that S&P
could affirm, raise, or lower its ratings on the company during
the next 12 months.

A positive rating action would depend on Grain Insurance's
financial and business risk profiles remaining immune to the
ongoing financial difficulties of its shareholder, as well as on
improvements in Grain Insurance's ERM, notably the tightening and
further enhancement of risk management practices linked to
catastrophe and accumulation risks.

S&P could take a negative rating action if it sees that Grain
Insurance's financial or business risk profile is weakening as a
result of its shareholder's ongoing financial difficulties.  In
particular, S&P could downgrade the company if S&P observes
significant deterioration of capitalization or if S&P believes
that its current niche competitive position is at risk.


KAZKOMMERTSBANK: Moody's Confirms Caa2 Sr. Unsecured Debt Rating
----------------------------------------------------------------
Moody's Investors Service has concluded its review of
Kazkommertsbank's ratings and confirmed its B3 long-term deposit
and the Caa2 senior unsecured debt ratings, to which it has
assigned a positive outlook. The rating agency also affirmed
Halyk Savings Bank of Kazakhstan's (Halyk) Ba2 deposit and Ba3
debt ratings and changed the outlook on these ratings to
developing from negative.

RATINGS RATIONALE

--- KAZKOMMERTSBANK

The confirmation of Kazkommertsbank's B3 deposit and Caa2 senior
unsecured debt ratings with a positive outlook reflects
Kazakhstan authorities' decision to provide the bank with the
financial aid to address its solvency problems related to a high
stock of problem assets.

Earlier this year, the authorities agreed to allocate KZT2.4
trillion ($7.6 billion) to buy problem assets from
Kazkommertsbank. This government aid will help to address the
bank's severe solvency problems that emanate from its problematic
KZT2.4 trillion exposure to the distressed asset holding company
BTA, which is largely unprovisioned and accounted for more than
50% of gross loans as of 30 September 2016.

When finalised, the financial package is expected to materially
enhance Kazkommertsbank's solvency. However, since the exact
amount of the support package and the ultimate impact on
Kazkommertsbank's standalone credit profile are difficult to
assess at this time, Moody's has confirmed all long-term ratings
that were earlier placed on review with direction uncertain and
assigned a positive outlook to these ratings

--- HALYK SAVINGS BANK OF KAZAKHSTAN (Halyk)

The affirmation of Halyk's Ba2 long-term deposit and Ba3 senior
unsecured debt ratings with a developing outlook follows Halyk's
announcement that it has entered into a non-binding agreement to
take over Kazkommertsbank, but also the lack of clarity currently
surrounding the acquisition plans.

The recently announced agreement that Halyk will consider
absorbing Kazkommertsbank following its cleanup with government
aid, signals the increased readiness by the authorities to
support the country's largest lenders in case of need, and
demonstrates the government's strong commitment to allocate funds
to restore the system's creditworthiness while consolidating the
banking system. Kazkommertsbank's consolidation into Halyk would
enable the latter to secure a dominant position in the market
with about 40% share of customer deposits, almost doubling its
current market share. This potentially dominant market share
could prompt Moody's to reassess the probability of government
support for the bank's deposits, which would likely result in an
upgrade of its long-term deposit ratings.

On the other hand, while Kazkommertsbank's takeover would
increase Halyk's systemic importance, the consolidation of a
potentially weaker Kazkommertsbank into Halyk could weaken
Halyk's standalone credit profile, despite the mitigating factor
of the government aid. A deterioration in Halyk's standalone
credit profile following absorption of Kazkommertsbank, or the
possibility of a lowering of the sovereign ratings, as reflected
in the current negative outlook assigned to the Baa3 sovereign
ratings of Kazakhstan, could lead to lower Halyk's long-term
ratings.

LIST OF AFFECTED RATINGS

Issuer: Kazkommertsbank

Confirmations:

-- LT Bank Deposits (Local & Foreign Currency), Confirmed at B3,
    Outlook Changed To Positive From Rating Under Review

-- Senior Unsecured Regular Bond/Debenture (Foreign Currency),
    Confirmed at Caa2, Outlook Changed To Positive From Rating
    Under Review

-- Subordinate (Foreign Currency), Confirmed at Caa3

-- BACKED Junior Subordinate (Foreign Currency), Confirmed at Ca
    (hyb)

-- Senior Unsecured MTN (Foreign Currency), Confirmed at (P)Caa2

-- LT Counterparty Risk Assessment, Confirmed at B2(cr)

Affirmations

-- ST Deposit Rating (Local & Foreign Currency), Affirmed NP

-- Adjusted Baseline Credit Assessment, Affirmed ca

-- Baseline Credit Assessment, Affirmed ca

-- ST Counterparty Risk Assessment, Affirmed NP(cr)

Outlook Actions:

-- Outlook, Changed To Positive From Rating Under Review

Issuer: Halyk Savings Bank of Kazakhstan

Affirmations:

-- LT Bank Deposits (Local & Foreign Currency), Affirmed Ba2,
    Outlook Changed To Developing From Negative

-- ST Bank Deposits (Local & Foreign Currency), Affirmed NP

-- Senior Unsecured Regular Bond/Debenture (Local & Foreign
    Currency), Affirmed Ba3, Outlook Changed To Developing From
    Negative

-- BACKED Senior Unsecured Regular Bond/Debenture (Foreign
    Currency), Affirmed Ba3, Outlook Changed To Developing From
    Negative

-- Adjusted Baseline Credit Assessment, Affirmed ba3

-- Baseline Credit Assessment, Affirmed ba3

-- LT Counterparty Risk Assessment, Affirmed Ba1(cr)

-- ST Counterparty Risk Assessment, Affirmed NP(cr)

Outlook Actions:

-- Outlook, Changed To Developing From Negative

PRINCIPAL METHODOLOGY

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


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


ZOBELE GROUP: S&P Affirms Then Withdraws 'B+' CCR
-------------------------------------------------
S&P Global Ratings said it has affirmed its 'B+' long-term
corporate credit rating on Luxembourg-incorporated Zobele Group
(Z Beta S.a.r.l.).  Subsequently, S&P withdrew its ratings on
Zobele and its debt at the issuer's request.  The outlook was
stable at the time of withdrawal.

On Feb. 2, 2017, Zobele Group fully repaid its EUR180 million
senior secured notes due in 2018 at a redemption price of 100% of
the principal amount plus accrued and unpaid interest.  The bond
repayment has been realized with a new EUR145 million term loan
due in 2023 and new amortized debt of EUR35 million due in 2022.

At the time of withdrawal, Zobele's business risk profile
reflected the company's limited scale and relatively high
customer concentration.  The company also operates as a private
label company under a business-to-business model, which can weigh
on its profitability.

Positively, the company has shown good resilience over the past
few years by efficiently enlarging its product offerings in the
home care and personal care segments.  S&P's business assessment
also considers its assessment of a moderately positive trend for
the overall industry based on potential growth in emerging
markets.


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


PALLAS CDO II: S&P Raises Rating on Class C Notes to 'BB+'
----------------------------------------------------------
S&P Global Ratings raised its credit ratings on Pallas CDO II
B.V.'s class A-1-a, A-1-d, A-2, B, C, P Combo, and R Combo notes.
At the same time, S&P has affirmed its ratings on the class D-1-a
and D-1-b notes.

The rating actions follow S&P's assessment of the transaction's
performance using data from the Jan. 31, 2017, trustee report.

S&P subjected the capital structure to a cash flow analysis to
determine the break-even default rate (BDR) for each rated class
of notes at each rating level.  The BDR represents S&P's estimate
of the maximum level of gross defaults, based on S&P's stress
assumptions, that a tranche can withstand and still fully repay
the noteholders.  In S&P's analysis, it used the portfolio
balance that it considers to be performing (EUR190,876,694), the
current weighted-average spread (1.39%), and the weighted-average
recovery rates calculated in line with S&P's corporate
collateralized debt obligation (CDO) of pooled structured finance
assets criteria.  S&P applied various cash flow stresses, using
its standard default patterns, in conjunction with different
interest rate stress scenarios.

Since S&P's July 10, 2015 review, the aggregate collateral
balance has decreased by 25.10% to EUR196.58 million from
EUR262.47 million.

The class A-1-a and A-1-d notes have paid down by an aggregate
amount of EUR61.54 million since S&P's previous review.  In S&P's
view, this has increased the available credit enhancement for all
rated classes of notes, except the class D-1-a and D-1-b notes.
The weighted-average spread and the coverage tests have also
improved since S&P's previous review.

Taking into account the results of S&P's credit and cash flow
analysis and the application of its current counterparty
criteria, S&P considers that the available credit enhancement for
the class A-1-a, A-1-d, A-2, B, C, P Combo, and R Combo notes is
commensurate with higher ratings than those previously assigned.
S&P has therefore raised its ratings on these classes of notes.

Following the application of S&P's 'CCC' ratings criteria, it
considers that the class D-1-a and D-1-b notes remain vulnerable
to default and that the current ratings are commensurate with
their risk profiles.  S&P has therefore affirmed its ratings on
these classes of notes.

The portion of performing assets not rated by S&P Global Ratings
is 20.8%.  In this case, S&P applies its criteria "CDOs: Mapping
A Third Party's Internal Credit Scoring System To Standard &
Poor's Global Rating Scale," published on May 8, 2014, to map
notched ratings from another ratings agency and to infer S&P's
rating input for the purpose of inclusion in CDO Evaluator.  In
performing this mapping, S&P generally applies a three-notch
downward adjustment for structured finance assets that are rated
by one rating agency and a two-notch downward adjustment if the
asset is rated by two rating agencies.

Pallas CDO II is a cash flow CDO transaction of primarily
European asset-backed securities (ABS). The transaction is
managed by M&G Investment Management Ltd.

RATINGS LIST

Class              Rating
           To                 From

Pallas CDO II B.V.
EUR498.6 Million Senior Secured Fixed- And Floating-Rate Notes

Ratings Raised

A-1-a      A+ (sf)             A (sf)
A-1-d      A+ (sf)             A (sf)
A-2        BBB+ (sf)           BBB (sf)
B          BBB (sf)            BB+ (sf)
C          BB+ (sf)            BB (sf)
P Combo    BBB-p (sf)          BB+p (sf)
R Combo    BBB-p (sf)          BB+p (sf)

Ratings Affirmed

D-1-a      CCC+ (sf)
D-1-b      CCC+ (sf)


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


PFLEIDERER GROUP: S&P Affirms 'B+' CCR, Outlook Remains Positive
----------------------------------------------------------------
S&P Global Ratings affirmed its 'B+' long-term corporate credit
rating on Poland-based wood panel producer Pfleiderer Group S.A.
and its wholly owned Germany-based subsidiary PCF GmbH.  The
outlook remains positive.

At the same time, S&P assigned its 'B+' issue rating to the
proposed EUR350 million senior secured loan due 2024 and the
EUR100 million revolving credit facility (RCF) to be issued by
PCF GmbH.  The recovery rating is '4', indicating average
recovery prospects (30%-50%; rounded estimate: 40%) in the event
of default.

S&P also affirmed its 'B+' rating on the existing EUR321.7
million senior secured notes due 2019, with a '4' recovery
rating.  S&P will withdraw the ratings on these notes once the
refinancing has been completed.

The affirmation follows the announcement that Pfleiderer intends
to refinance its outstanding EUR321.7 million notes with a new
EUR350 million senior secured loan maturing in 2024.  S&P sees
this as positive for the company's cash flow generation, and
hence its credit metrics, since interest expenses on the new term
loan are likely to be considerably lower than the current 7.875%
coupon Pfleiderer is paying on its notes.

S&P also believes that the company may improve its earnings and
cash flow generation in 2017, thanks to a reduction of
restructuring costs and higher integration between the Polish and
German operations.  However, a longer track record of
improvements is necessary before S&P considers an upgrade, as
indicated in its research update, "Poland-Based Wood Panel
Producer Pfleiderer Group Upgraded To 'B+' On Improving Financial
Profile; Outlook Positive," published Jan. 20, 2017, on
RatingsDirect.

The positive outlook takes into account S&P's expectations that
Pfleiderer's operational performance will improve slightly in
2017 and that this, in combination with lower interest expenses
and restructuring costs, will support improving credit metrics,
possibly to the extent that S&P could raise the rating by one
notch in the coming 12 months.

S&P could raise the rating if Pfleiderer continues to display
resilient and improving earnings and if S&P thinks that there is
limited risk of credit metrics deteriorating.  S&P thinks that
this scenario could materialize if Pfleiderer continues to
improve its product mix, while internal efficiency measures
further improve its cost base.  S&P would view a ratio of FFO to
debt of consistently around 25% as commensurate with a higher
rating.  For an upgrade S&P would also have to believe that the
risk of higher leverage was low and that Pfleiderer's
shareholders would not push for a more aggressive financial
policy.

S&P could revise the outlook to stable if it thinks upside to the
rating is limited.  This could be the case if Pfleiderer's
operating performance deteriorated sharply, if restructuring
costs continued to be high, or if the planned refinancing did not
materialize, hence limiting any improvement in Pfleiderer's
credit metrics.  S&P could also revise the outlook to stable or
potentially lower the rating if Pfleiderer engaged in any large-
scale debt-funded mergers or acquisitions, although S&P thinks
such a scenario is unlikely in the coming year.


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


BANK ICBC: S&P Affirms 'BB+/B' Ratings; Outlook Revised to Pos.
---------------------------------------------------------------
S&P Global Ratings said that it revised its outlook to positive
from stable on these three Russian financial institutions:

   -- BNP PARIBAS BANK JSC;
   -- Bank ICBC JSC (Bank ICBC); and
   -- Credit Suisse Securities (Moscow) Ltd (CSSM).

At the same time, S&P affirmed its 'BB+/B' long- and short-term
counterparty credit ratings and S&P's 'ruAA+' Russia national
scale ratings on BNP PARIBAS BANK JSC, Bank ICBC, and CSSM.

                             RATIONALE

The outlook revision follows that on Russia.  The outlook
revision on Russia reflects S&P's expectations that the country's
GDP growth will pick up, averaging about 1.7% in 2017-2020, and
that this will lead to lower risk of large capital outflows and
moderating external pressures.  Therefore, S&P thinks that the
Russian economy will continue to adapt to the relatively low oil
price environment while maintaining its strong net external asset
position.  At the same time, S&P notes that the economy will
remain constrained by ongoing structural impediments, such as a
weak business environment, geopolitical tensions, and sanctions,
which will limit Russia's medium-term economic growth prospects.

S&P considers that the operating environment for Russian banks
will remain challenging.  Although S&P thinks that the peak of
asset quality deterioration for the Russian banking sector took
place in 2016, and the situation has been gradually stabilizing,
the amount of accumulated problem loans is significant and S&P
expects that banking sector recovery will take a long time and be
uneven.

S&P believes that nonperforming loans (NPLs) will stabilize at
8%-10% in 2017.  The NPL coverage ratio is good at about 100%
compared with NPL figures.  However, S&P estimates that, in
addition to pure NPLs, about 14%-16% of total loans are
represented by restructured loans that are currently classified
as performing.  These loans could later be reclassified into
NPLs, especially if S&P observes worse macroeconomic indicators
than those underlying S&P's base-case scenario.  Moreover,
capitalization in the banking sector is moderate, in S&P's view,
and it thinks that capital buffers are scarcely able to cover
potential future losses.

S&P has observed some stabilization in the banking sector, and
its previous concerns regarding sector liquidity and extreme
volatility of deposits observed in 2014-2015 have subsided.  At
the same time, new business growth in the banking sector has been
weak in the corporate and retail segments, reflecting depressed
economic growth in Russia.  S&P thinks that reshaping banking
models to adjust to a low economic growth environment and to
control costs will remain among the main challenges for banks
operating in Russia in 2017-2018.

The anchor -- S&P's starting point for assigning issuer credit
ratings to banks -- remains 'bb-' for banks operating primarily
in Russia.

The positive outlooks on BNP PARIBAS BANK JSC, Bank ICBC, and
CSSM reflect that on Russia.  In S&P's opinion, these financial
institutions' financial profiles and performance will remain
highly correlated with the sovereign's creditworthiness, owing to
their group status and expected support from the parent banking
institutions.

At the same time, S&P has affirmed its long- and short-term
ratings on the three financial institutions.  This indicates that
S&P expects its long-term ratings on these institutions to remain
at the current level over the next 12-18 months.  Any possible
positive rating action on these entities would occur if S&P
raised its ratings on Russia, all else being equal.  Similarly, a
negative rating action on Russia would result in a similar action
on the financial institutions.

                              OUTLOOK

BNP PARIBAS BANK JSC

The positive outlook on Russia-based BNP Paribas Bank JSC mirrors
that on Russia as the bank operates solely in the Russian market
and is therefore exposed to the risks related to operations in
Russia.  If S&P upgraded Russia in the next 12-18 months, it
would also upgrade BNP Paribas Bank JSC, assuming that the bank's
parent continued to view Russia as an important region for
business presence.

S&P could revise its outlook on BNP Paribas Bank JSC back to
stable if S&P revised the sovereign outlook on Russia to stable.

Bank ICBC JSC

S&P's positive outlook on Bank ICBC mirrors that on Russia.  If
S&P upgraded Russia in the next 12-18 months, it would also
upgrade Bank ICBC, assuming that Bank ICBC's parent group
continued to view Russia as an important region for business
expansion and continued providing capital and other support for
Bank ICBC.

S&P could revise its outlook on Bank ICBC back to stable if S&P
revised the sovereign outlook on Russia to stable.

Credit Suisse Securities (Moscow) Ltd.

The positive outlook on CSSM mirrors that on Russia as CSSM
operates exclusively in the Russian market and is therefore
exposed to Russian market risks.

S&P could consider a positive rating action on CSSM in the next
12-18 months if S&P took a similar action on the sovereign,
assuming Credit Suisse AG continued to view Russia as an
important region for business expansion and continued providing
capital and other support to its Russian subsidiary.

S&P could revise its outlook on CSSM back to stable if S&P
revised the sovereign outlook on Russia to stable.

RATINGS LIST

Ratings Affirmed; Outlook Action

                                     To             From
BNP PARIBAS BANK JSC
Credit Suisse Securities (Moscow) Ltd.
Bank ICBC JSC
Counterparty Credit Rating          BB+/Pos./B     BB+/Stable/B
Russia National Scale               ruAA+/--/--    ruAA+/--/--


TENEX-SERVICE: S&P Affirms 'BB/B' Ratings, Outlook Positive
-----------------------------------------------------------
S&P Global Ratings revised its outlook on Russian nuclear sector
leasing company TENEX-Service to positive from stable.

At the same time, S&P affirmed its 'BB/B' long- and short-term
counterparty credit ratings and S&P's 'ruAA' Russia national
scale rating on TENEX-Service.

The outlook revision on TENEX-Services mirrors that on its
parent, state-owned Atomic Energy Power Corp. JSC.  S&P considers
TENEX-Service to be a captive leasing company and a highly
strategic subsidiary of AtomEnergoProm.  As such, S&P rates
TENEX-Service one notch below AtomEnergoProm (BB+/Positive/B;
Russia national scale 'ruAA+').  Although it is small compared
with the parent group, TENEX-Service has a very high level of
integration with its parent.

TENEX-Service's strategy, risk management, funding, and client
base are shared with, or provided by, AtomEnergoProm, and it has
limited business scope outside the group.  In S&P's view, TENEX-
Service is not separable from the rest of the group and therefore
it enjoys a very high likelihood of extraordinary support from
its parent, if required.

Although S&P views TENEX-Service itself as a government-related
entity, like AtomEnergoProm, S&P assess its link to the
government as limited, based on the sovereign's indirect
ownership of TENEX-Services through AtomEnergoProm.  TENEX-
Service does not directly play a central role in meeting the
Russian government's key economic and social objectives, so S&P
considers that it has limited importance for the government.  At
the same time, TENEX-Service's business activities are secured by
Presidential Act No. 556, which currently identifies TENEX-
Service as the only entity able to lease nuclear equipment in
Russia.  Any government support to TENEX-Service, if needed,
would likely be extended indirectly through AtomEnergoProm.

The positive outlook on TENEX-Service mirrors that on its parent
entity, AtomEnergoProm.  This reflects S&P's expectation that in
the next 12-18 months TENEX-Service will continue to benefit from
its high level of strategic and operational integration with its
parent.

S&P could consider revising the outlook on TENEX-Service to
stable if S&P revises the sovereign outlook on Russia to stable.
S&P could consider a negative rating action if AtomEnergoProm
modified its approach to favor direct purchases over leasing or
S&P observed other changes of strategy with regards to operations
of TENEX-Service, which would signal a decrease of TENEX-
Service's importance to, and integration with, the AtomEnergoProm
group.

A positive rating action would follow a positive rating action on
the parent entity, all else being equal.


VNESHECONOMBANK: S&P Affirms 'BB+/B' ICRs, Outlook Developing
-------------------------------------------------------------
S&P Global Ratings said that it had revised its outlook on
Russian state-owned development bank Vnesheconombank (VEB) to
developing from negative.  At the same time, S&P affirmed the
'BB+/B' long- and short-term foreign currency issuer credit
ratings and the 'BBB-/A-3' long- and short-term local currency
issuer credit ratings.

The outlook revision reflects the recent change of the outlook on
Russia to positive, together with the government's new long-term
strategy for VEB.  S&P currently still lacks details regarding
implementation of the strategy.

In late 2016, the Russian government approved VEB's new strategy
through to year-end 2021.  The strategy somewhat adjusts VEB's
business model and the policy mandate.  According to the strategy
document, the bank will focus on supporting only infrastructure,
manufacturing, conversion of the defense industry to civil needs,
and high-tech and non-commodity export support.  In the past, the
mandate was much wider.  The government has approved the
restructuring of some of VEB's assets and proposed that some
subsidiaries, namely some financial institutions, be divested.
However, the exact details and visibility on how the revised
strategy will be executed remain limited and the new bank
management's track record is relatively short.

S&P continues to view VEB as a government-related entity (GRE)
with an almost certain likelihood of receiving extraordinary
support from the Russian government in the event of financial
difficulties.  Accordingly, S&P equalizes its ratings on VEB with
those on Russia.

In accordance with S&P's criteria for GREs, S&P's view that there
is an almost certain likelihood of extraordinary government
support is based on S&P's assessment of VEB's:

   -- Critical role for Russia as the government's prime public
      development institution, a role that cannot be readily
      undertaken by a private entity.

   -- The VEB group's assets currently represent about 5.5% of
      Russia's GDP; and

   -- Integral link with Russia.  This is because of VEB's unique
      status as a state corporation operating under the law "On
      The Bank For Development," with strong oversight from the
      federal government and prime minister, represented on its
      supervisory board.  Also, the government has a proven track
      record of providing timely support to VEB in all
      circumstances, including a US$6 billion subsidy in 2015, a
      Russian ruble (RUB) 150 billion injection in 2016, and a
      budgeted commitment to inject RUB150 billion into the bank
      annually in 2017-2019 to meet its debt repayment needs.
      Furthermore, high-ranking government and central bank
      officials have reiterated the government's strong
      commitment to VEB since the imposition of U.S. sanctions.

The developing outlook reflects the fact that there is now at
least a one-in-three chance that S&P may raise or lower the
rating.

S&P could take a positive rating action if it raises its rating
on Russia, assuming S&P's view of VEB's public policy role and
link with government remain unchanged.

Conversely, S&P could take a negative rating action, if it
concludes that the actual implementation of the government's new
strategy for VEB, as well as government policies, resulted in a
weaker public policy role for and/or weaker link with the state.
For example, this could be signaled by a rapidly rising risk of
material weakening of VEB's capitalization or liquidity.

S&P could revise the outlook to stable if it revised its outlook
on Russia to stable and S&P concluded that the implementation of
VEB's new strategy effectively addresses concerns regarding the
bank's role for and link with the government.


VODOKANAL ST. PETERSBURG: S&P Affirms 'BB/B' CCRs, Outlook Pos.
---------------------------------------------------------------
S&P Global Ratings said that it has revised its outlooks on two
Russian water utility companies to positive from stable: regional
water provider Vodokanal St. Petersburg (VKSPB) and Moscow-based
Mosvodokanal JSC (MVK).

At the same time, S&P affirmed its 'BB/B' long- and short-term
corporate credit and 'ruAA' national scale ratings on VKSPB, as
well as S&P's 'BB' issue rating on VKSPB's senior unsecured debt.
S&P also affirmed its 'BB+/B' long- and short-term corporate
credit and 'ruAA+' national scale ratings on MVK.

The outlook revisions follow that on Russia on March 17, 2017.

                     VODOKANAL ST. PETERSBURG

S&P continues to assess VKSPB's stand-alone credit profile (SACP)
at 'bb' and forecast that the company will maintain comfortable
financial metrics, with debt to EBITDA below 1.5x and funds from
operations (FFO) to debt above 60% at least over the next two
years.

S&P believes that there is a very high likelihood of
extraordinary government support for VKSPB, based on S&P's
assessment of VKSPB's:

   -- Very important role for St. Petersburg, given its strategic
      importance to the city as the sole provider of essential
      infrastructure services; and

   -- Very strong link with the city's government, given
      St. Petersburg's 100% ownership of VKSPB, S&P's expectation
      that the company will not be privatized in the medium term,
      the city's commitment to finance a portion of VKSPB's
      capital expenditure program, and the risk to the city
      government's reputation if VKSPB were to default.

The positive outlook reflects S&P's view of positive trends in
St. Petersburg's creditworthiness.  S&P expects that if
St. Petersburg's credit quality were to strengthen further, it
would incorporate one notch of uplift for extraordinary
government support into S&P's long-term rating on VKSPB, all
other factors remaining unchanged.

S&P would revise its outlook on VKSPB to stable if
St. Petersburg's creditworthiness were to deteriorate.

                            MOSVODOKANAL

S&P continues to assess MVK's SACP at 'bb+'.  In S&P's base case,
it assumes that the company's stand-alone performance will remain
sustainable, with debt to EBITDA below 2.5x and FFO to debt above
45%.  S&P also anticipates adequate liquidity and no delays in
reporting under International Financial Reporting Standards.

S&P sees a very high likelihood that the Moscow government, which
owns 100% of the company, would provide timely and sufficient
extraordinary support to MVK in the event of financial distress.
S&P views the company's role for the government as very important
and its link with the government as very strong.  In particular,
S&P thinks that privatization risk is low because current
legislation restricts privatization of water utilities.

The positive outlook on MVK reflects that on the City of Moscow.
S&P expects that, if Moscow were upgraded, it would incorporate
one notch of uplift for extraordinary government support into
S&P's long-term rating on MVK, assuming the company's SACP
doesn't deteriorate.

S&P would revise the outlook to stable in case of similar action
on Moscow.

RATINGS LIST

Ratings Affirmed; Outlook Action
                                        To            From
Vodokanal St. Petersburg
Corporate Credit Rating                BB/Pos./B     BB/Stable/B
Russia National Scale                  ruAA/--/--    ruAA/--/--
Senior Unsecured                       BB            BB

Mosvodokanal JSC
Corporate Credit Rating                BB+/Pos./B
BB+/Stable/B
Russia National Scale Rating           ruAA+/--/--   ruAA+/--/--


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


TENEDORA DE ACCIONES: S&P Affirms 'BB+/B' Ratings, Outlook Pos.
---------------------------------------------------------------
S&P Global Ratings said that it affirmed its 'BBB-/A-3' long- and
short-term counterparty credit ratings on Spain-based Bankia S.A.
The outlook remains positive.

S&P has also affirmed the 'BB+/B' long- and short-term
counterparty credit ratings on Bankia's parent company Tenedora
de Acciones S.A.U. (BFA).  The outlook remains positive.

S&P's ratings on Bankia continue to reflect the bank's solid
domestic franchise and management's track record in executing its
restructuring plan.  Over the years, risk management practices
have been reinforced and the bank's asset quality ratios
improved. Although Bankia's recurring profitability remains
subdued, S&P factors into its ratings its strengthened solvency,
which S&P considers adequate for the risks it undertakes.

Balance sheet deleveraging, disposals of noncore assets, and
retained earnings have underpinned Bankia's capital position over
the past few years.  S&P projects the bank's risk-adjusted
capital (RAC) ratio to reach 9.0%-9.5% by 2018 from around 8% as
of December 2016.  This is based on S&P's expectations of around
6% return on equity in the next two years, a cash dividend payout
of about 35% at the Bankia S.A. level, the issuance of additional
Tier 1 instruments to fully fill the regulatory capital bucket,
and no upstreaming of capital from BFA to the state.

S&P believes that Bankia's management has been able to
significantly enhance the bank's risk management and accelerate
the clean-up of its credit portfolio.  This should enable it to
maintain impaired assets below the domestic sector average and
low cost of risk of around 35 basis points (of total average
loans) in both 2017 and 2018.  Specifically, S&P expects Bankia
to continue reducing its stock of nonperforming assets (NPAs) by
10% year-on-year over 2017-2018, reducing the NPA ratio below 10%
from 12.5% currently.  This improvement will come on the back of
net nonperforming loan (NPL) outflows and sustained write-offs
and asset sales.  Bankia also maintains prudent coverage of its
NPLs, with reserves covering about 56% of the stock as of
December 2016.

In the past few years, Bankia has managed to successfully
rebalance its funding profile, mainly by deleveraging sharply and
significantly reducing its commercial gap.  The bank's loan-to-
deposit ratio stood at about 111% as of December 2016, down from
140% at end-2012.  At the same time, the bank's stable funding
ratio increased to about 116% from 80% at end-2013.  S&P expects
Bankia to marginally improve its funding and liquidity profile as
both its loan book and securities portfolio should reduce
further. In turn, the bank's reliance on wholesale (mostly
covered bonds and repo) and central bank financing should reduce
as well.

Bankia's ultimate shareholder, the state-owned Fund for Orderly
Bank Restructuring (FROB), recently announced that the merger of
Bankia and Banco Mare Nostrum SA (BMN; not rated) would be the
best strategy to maximize the recovery of state aid.  As a
result, both banks are starting to analyze the deal and, if
decide to go ahead, will then seek approvals from their
respective governing bodies, general assemblies, and regulators.
Since the FROB is the controlling shareholder of both banks, with
a stake of around 65%, S&P considers it highly probable that this
deal will go ahead.  If so, S&P expects it to materialize in the
second half of the year. However, since the final terms of the
deal are still to be agreed upon, S&P will assess the full impact
on Bankia's creditworthiness at that stage.

If the merger goes ahead as planned, Bankia would expand its
presence in the southern regions of Spain and strengthen its
position as the fourth-largest domestic bank by increasing by
around 20% its loan book.  It would also have opportunities for
synergies, especially on costs.  Moreover, S&P believes that
Bankia's management has a good track record in integrating banks
and strengthening risk management practices so that, in S&P's
view, the execution risk of this deal would be relatively low.

Nevertheless, the deal would present a number of financial
challenges for Bankia's management.  BMN has a weaker asset
quality profile, with an NPA ratio of 16% compared with Bankia's
12.5% and NPA coverage of 33% compared with Bankia's 51%, which
adds pressure at a time when Bankia's management is still dealing
with the workout of its still-sizable portfolio of impaired
assets.  Moreover, BMN reported a return of equity of 3% as of
June 2016, which would represent a drag on the already-subdued
profitability of Bankia.  In addition, depending on the agreed
terms of the deal, the solvency of the combined entity could end
up being weaker than Bankia alone, and its capital could be of
lower quality given the relatively large amount of deferred tax
assets held by BMN (110% of total adjusted capital versus 60% for
Bankia).

The positive outlook on Bankia S.A. indicates the possibility of
Spain's economic and operating environment becoming more
supportive, ultimately resulting in a strengthening of banks'
creditworthiness in the next 12-24 months and therefore a higher
anchor for banks operating primarily in Spain.

S&P expects that, over this year and next, Bankia will gradually
continue to strengthen its solvency through earnings retention
and issuance of hybrid instruments, reducing its stock of
problematic assets, while maintaining a balanced funding profile
and comfortable liquidity.

Although the likelihood of a successful merger with BMN has
increased, key details on the structure of the deal are still to
be agreed upon.  As a result, S&P will likely assess the
financial impact and the ratings implications once the terms of
the deal are disclosed.

S&P could revise the outlook back to stable if it do not see
prospects of the economic or operating risk environment in Spain
easing further for banks, or other risks offset the potential
benefits of a likely more supportive environment.  This could
happen if the group's capitalization and asset quality were to
materially weaken, for example as a result of the integration of
BMN or BFA upstreaming significant capital to the state.

The outlook on Bankia's parent BFA is also positive as S&P
expects the ratings on the holding company and the operating
entity to move in tandem.


===========
S W E D E N
===========


COM HEM: S&P Revises Outlook to Positive & Affirms 'BB' CCR
-----------------------------------------------------------
S&P Global Ratings revised its outlook to positive from stable on
Swedish cable operator Com Hem Holding AB (publ) and on its
subsidiaries NorCell Sweden Holding 3 AB(publ) and NorCell Sweden
Holding 2 AB(publ).  S&P affirmed the 'BB' long-term corporate
credit rating on the three entities.

At the same time, S&P affirmed its 'BB' issue rating on NorCell
Sweden Holding 3 AB's senior unsecured debt.  The recovery rating
remains at '3', indicating S&P's expectation of meaningful (50%-
70%; rounded estimate: 60%) recovery for creditors in the event
of a payment default.

The positive outlook takes into account Com Hem's improved cash
flow generation -- adjusted FOCF jumped to SEK1.49 billion in
2016 from SEK962 million in 2015 -- following stronger-than-
expected operating performance in 2016, and S&P's projection that
Com Hem's credit metrics will strengthen further in 2017 as
Boxer, a digital terrestrial television (DTT) provider, will be
fully consolidated, following its acquisition by Com Hem in
September 2016.

In S&P's view, Com Hem has potential for additional revenue and
EBITDA growth in the coming years.  The company's strategy to
expand into the single dwelling unit (SDU) market, which is
expected to add about 800,000 households to its addressable
footprint, provides opportunities for organic growth in the DTV
and broadband segments.  In 2016, digital television (DTV)
revenue rose by 4% and broadband by almost 12%.  In both
segments, roughly one-half of the growth stemmed from volume
growth and the other half from price increases.  Additionally,
S&P expects that the full consolidation of Boxer will add EBITDA
of Swedish krona (SEK) 300 million in 2017.  Furthermore, Com Hem
has continuously reduced its interest expenses since the IPO in
2014.  The latest refinancing, completed in November 2016,
reduced the average interest to 2.9% in the last quarter of 2016,
compared with 5.3% in the same period in 2014.  As a result, S&P
expects that funds from operations (FFO) to debt will continue
strengthening, exceeding 20.0% in 2017, following the improvement
to 19.2% in 2016 from 17.5% in 2015.

In addition, S&P expects that capital expenditures (capex) will
be contained to about 15%-16% of sales in 2017-2018, compared
with nearly 20% in 2015, following lower capex requirements in
the mature multiple dwelling unit (MDU) market and in Boxer's
operations.  As such, S&P expects Com Hem's cash flow generation
to remain strong and S&P Global Ratings-adjusted FOCF to debt to
stand comfortably above 10% in 2017-2018 (following an
improvement to 12.5% in 2016 from 8.0% in 2015).

Still, in October 2016 Com Hem announced a pronounced increase in
dividends to SEK4.00 per share from SEK1.50 per share to be paid
in 2017.  The company also announced a mandate to repurchase own
shares of up to SEK70 million per month in the same year.  This
corresponds to a shareholder remuneration of about SEK1.5
billion, and S&P therefore expects Com Hem to redistribute its
entire FOCF to its shareholders in 2017.  However, as EBITDA
grows both organically and through the consolidation of Boxer,
S&P expects that leverage will trend below its adjusted leverage
ratio of 4.0x in 2017 and stay between the company's financial
policy target of 3.5x-4.0x.

S&P's assessment of Com Hem's business risk profile is based on
the company's leading market position in the Swedish DTV market,
incorporating the acquisition of Boxer, resulting in the
consolidated group's market share of about 40%.  Furthermore, Com
Hem is well established in the fixed-line broadband market and
continues to increase its market share, albeit marginally.  The
company has connections to about 47% of the Sweden's households,
which S&P also expects to increase over the coming years given
the company's launch into the SDU market.  Com Hem has a well-
invested and upgraded hybrid-fiber-coaxial DOCSIS 3.0 network
that offers internet speeds of 500 megabits per second in 92% of
its coverage area, which is superior to the speeds offered by its
competitors. Moreover, S&P expects that Com Hem will continue to
post high margins.  S&P notes, however, that the lower-margin
Boxer business will dilute Com Hem's profitability, based on
S&P's calculation that, on a consolidated basis, the reported
margin will drop to about 39% in 2017 from about 44% in 2016.

These strengths are partly offset by intense competition from
various technology platforms in multi-dwelling areas, including a
70% overlap with fiber networks (although Com Hem's superior
network offers higher speeds in 80% of the area in which it
operates).  Com Hem competes with TeliaSonera AB and Telenor ASA,
which are much larger operators and use several alternative
technologies, including digital subscriber lines and fiber optic
networks.

In S&P's view, Com Hem's strong improvement in cash flow
generation and interest coverage ratios has strengthened Com
Hem's financial risk profile.  However, S&P's assessment is
constrained by the company's leverage target and its shareholder
remuneration policy (including dividends and share buybacks) that
we think will result in distributing all of its FOCF in 2017.
S&P assumes that management will remain committed to its
financial policy, which targets a reported leverage ratio of
3.5x-4.0x.  S&P anticipates that this will translate into S&P
Global Ratings-adjusted leverage of 3.7x-4.2x.  Still, S&P
expects that the company will remain in the lower half of the
range, based on its opinion that large acquisitions are unlikely
in the near term.

Due to Com Hem's lack of a track record in the SDU market,
coupled with S&P's expectation of adjusted leverage just below
4.0x in 2017, S&P currently sees the company's overall credit
quality as somewhat weaker than peers' in S&P's 'BB+' category.
S&P notes, however, that it sees potential for improvement in its
base case.

The positive outlook reflects the possibility that S&P could
upgrade Com Hem by one notch over the next 12 months if its
credit ratios continue to strengthen combined with a stronger
market position, likely stemming from its expansion strategy in
the SDU market.

S&P could raise the rating if Com Hem's revenues and EBITDA
continue to grow, coupled with adjusted debt to EBITDA below 4.0x
and FOCF to debt comfortably above 10%.  This would then reflect
S&P's updated view that Com Hem's financial policy would underpin
maintenance of these ratios on a sustainable basis.

S&P could revise the outlook to stable if revenue and EBITDA
growth are weaker than S&P expects, for example, absent growth in
the SDU market or if the company's market share erodes.  S&P
could also revise the outlook to stable if adjusted leverage
remains at or above 4x, following sizable acquisitions or a
larger-than-anticipated shareholder remuneration.


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


SELECTA GROUP: S&P Affirms 'B' CCR on Acquisition Announcement
--------------------------------------------------------------
S&P Global Ratings said that it affirmed its 'B' long-term
corporate credit rating on Switzerland-based Selecta Group B.V.
The outlook is negative.

At the same time, S&P affirmed its 'BB-' issue rating on
Selecta's super senior revolving credit facility (RCF) due in
2019.  The recovery rating on this facility is '1', indicating
S&P's expectation of very high (90%-100%; rounded estimate: 95%)
recovery prospects in the event of a payment default.

S&P has also affirmed its 'B' issue rating on the EUR350 million
and Swiss franc (CHF) 245 million senior secured notes due June
2020.  The recovery rating on the notes is '3', indicating S&P's
expectation of meaningful (50%-70%; rounded estimate: 60%)
recovery prospects in the event of a default.

The rating affirmation follows Selecta's announcement of its
intention to acquire Netherlands-based coffee and vending service
company Pelican Rouge Group B.V.  The acquisition is expected to
be funded with EUR180 million additional payment-in-kind (PIK)
notes from the group's majority shareholder KKR (90%), and
EUR375 million of loan notes to be offered to Pelican Rouge's
existing debt holders in conjunction with the proposed
transaction.  S&P treats the PIK as debt.  S&P understands that
Selecta is also in the process of increasing its RCF by
EUR50 million to EUR100 million, which should provide Selecta
with adequate financial flexibility.

The Pelican Rouge acquisition provides a significant increase in
machine density for Selecta in key geographies.  S&P views
Pelican Rouge's strength in the Benelux coffee and vending market
and office coffee solutions in the Nordic region as largely
complimentary to Selecta's automated coffee distribution
business, while the addition of roasting capabilities provides
further vertical integration in the coffee service business.
Furthermore, S&P views the acquisition of Pelican Rouge as being
transformational for the group, with the addition of Pelican
Rouge expected to add 60%-70% to Selecta's existing EBITDA.

While S&P recognizes the positive impact the acquisition would
have on the company's scale, scope, and diversification, S&P
would be unlikely to consider this sufficient to revise its view
of the business risk profile, which remains constrained by the
fragmented nature of the vending market and weaker operating
efficiency compared with other business services companies.
Furthermore, S&P notes that there is material execution risk
associated with an acquisition of this size and Selecta has a
limited track record of integrating sizable acquisitions.

S&P expects the acquisition to have a slightly positive impact on
Selecta's credit metrics due to the valuation of Pelican at about
7.3x EBITDA (according to Selecta's definition) to be funded by
additional debt and an increase of the PIK note.  This is well
below Selecta's S&P Global Ratings-adjusted debt to EBITDA of
10.5x in 2016.  S&P notes, however, that Pelican's EBITDA had
been normalized for certain items that we might consider to be
part of normal operating expenses.  S&P will also likely adjust
for certain off-balance-sheet items for Pelican Rouge, which
again, is likely to have a negative impact on combined credit
metrics.  S&P currently estimates that Selecta's debt to EBITDA
pro forma the transaction will decrease to about 8.0x-8.5x.
Although S&P views the PIK notes as debt like, it recognizes
their cash-preserving function.  Excluding these debt-like
instruments, Selecta's financial risk profile pro forma the
transaction would remain in line with a highly leveraged
assessment with debt to EBITDA of about 6.0x.  S&P also views
positively the group's enhanced cash flow generation profile.
S&P anticipates that the combined entity should be able to
comfortably generate more than EUR20 million free operating cash
flow (FOCF) after integration costs over the coming two years,
which should facilitate the necessary refinancing of the group's
notes maturing in 2020.

"We assess Selecta's liquidity as adequate, despite our forecast
that sources of liquidity will exceed uses by more than 1.5x over
the next 24 months pro forma the transaction.  In our view,
Selecta would be unable to absorb high impact, low-probability
events without refinancing, does not have a high enough standing
in the credit markets, or sufficient headroom under its financial
covenants to be considered to have strong liquidity.  It also
captures that the transaction still needs to be settled," S&P
said.

S&P notes that absent successful closing of the transaction, S&P
would reassess the group's liquidity situation given the group's
negative FOCF generation and tightening covenant headroom under
the RCF, which resulted in reduced financial flexibility over
recent years.

The negative outlook reflects the risk that S&P could downgrade
Selecta by one notch if, unexpectedly, the transaction does not
close.  It also reflects the risks of the company underperforming
against S&P's base case given the material execution risk
associated with integrating Pelican Rouge's operations into
Selecta.  In S&P's opinion, Selecta should generate FOCF of
comfortably above EUR20 million in the coming two years, with a
prospect of further increasing cash generation in later years.

S&P could take a negative rating action if the transaction does
not materialize and Selecta generates adjusted FOCF of less than
3% of debt on a stand-alone basis in financial 2017.  This could
occur if the group failed to improve its adjusted EBITDA margin
to above 16% due to lower-than-expected organic growth, a loss of
a key customer, or additional restructuring, which S&P do not
incorporate into its forecast.

S&P could revise the outlook to stable if Selecta completes the
acquisition and demonstrates progress in both integrating the
Pelican Rouge business and meeting its growth plans for financial
2017.  Specifically, S&P could revise the outlook if it expects
the company to generate reported FOCF of comfortably more than
EUR25 million in financial 2017, with an improving trend in the
years after.


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


TURKIYE HALK: Moody's Assigns (P)B1 LT FC Sub. Debt Rating
----------------------------------------------------------
Moody's Investors Service has assigned a provisional (P)B1 (hyb)
long-term foreign-currency subordinated debt rating to Turkiye
Halk Bankasi A.S.'s (Halkbank -- long term foreign currency
deposit rating of Ba2 with a negative outlook, short term foreign
currency deposit rating of NP and BCA of ba2) planned USD500mn US
dollar-denominated contractual non-viability Tier 2 bond issuance
(the notes).

RATINGS RATIONALE

The provisional rating assigned to the subordinated debt
obligations of Halkbank is positioned two notches below the
bank's adjusted baseline credit assessment (BCA) of ba2, in line
with Moody's standard notching guidance for subordinated debt
with loss triggered at the point of non-viability, on a
contractual basis. The provisional rating does not incorporate
any uplift from government support.

The planned subordinated debt issuance is expected to be Basel
III-compliant and eligible for Tier 2 capital treatment under
Turkish law. The positioning of Halkbank's provisional rating two
notches below the bank's adjusted BCA reflects the potential for
greater uncertainty associated with the timing of a principal
write-down when compared to any "plain vanilla" subordinated
debt. In this respect, Moody's highlights that - as a way for the
bank to avoid a bank-wide resolution - the notes may be forced to
absorb losses ahead of "plain vanilla" subordinated debt, if any.

Moody's issues provisional ratings in advance of the final sale
of the securities. The ratings, however, only represent Moody's
preliminary credit opinion. Upon conclusive review of all
transaction and associated documents, Moody's will endeavour to
assign definitive ratings to the notes. A definitive rating may
differ from a provisional rating if the terms and conditions of
the issuance are materially different from those of the
preliminary prospectus reviewed.

WHAT COULD CHANGE THE RATING UP/DOWN

The assigned rating is notched from the adjusted BCA of Halkbank
and further movements will be contingent on the changes in this
reference point.

PRINCIPAL METHODOLOGY

The principal methodology used in this rating was Banks published
in January 2016.


TURKIYE HALK: Fitch Rates Tier 2 Capital Notes 'BB(EXP)'
--------------------------------------------------------
Fitch Ratings has assigned Turkiye Halk Bankasi A.S.'s (Halk;
BB+/Stable/bb+) planned issue of Basel III-compliant Tier 2
capital notes an expected rating of 'BB(EXP)'. The size of the
issue is not yet determined but is likely to be approximately
USD500m.

The final rating is subject to the receipt of final documentation
conforming to information already received by Fitch.

The notes qualify as Basel III-complaint Tier 2 instruments and
contain contractual loss absorption features, which will be
triggered at the point of non-viability of the bank. According to
the draft terms, the notes are subject to permanent partial or
full write-down upon the occurrence of a non-viability event
(NVE). There are no equity conversion provisions in the terms.
The notes have an expected 10-year maturity and a call option
after five years.

An NVE is defined as occurring when the bank has incurred losses
and has become, or is likely to become, non-viable as determined
by the local regulator, the Banking and Regulatory Supervision
Authority (BRSA). The bank will be deemed non-viable when it
reaches the point at which either the BRSA determines that its
operating licence is to be revoked and the bank liquidated, or
the rights of Halk's shareholders (except to dividends), and the
management and supervision of the bank, should be transferred to
the Savings Deposit Insurance Fund on the condition that losses
are deducted from the capital of existing shareholders.

KEY RATING DRIVERS

The notes are rated one notch below Halk's Viability Rating (VR)
of 'bb+' in accordance with Fitch's "Global Bank Rating
Criteria". The notching includes zero notches for incremental
non-performance risk relative to the VR and one notch for loss
severity. Extraordinary state support is not factored into the
rating as Fitch believes sovereign support cannot be relied upon
to extend to bank junior debt obligations in Turkey.

Fitch has applied zero notches for incremental non-performance
risk, as the agency believes that write-down of the notes will
only occur once the point of non-viability is reached and there
is no coupon flexibility prior to non-viability.

The one notch for loss severity reflects Fitch's view of below-
average recovery prospects for the notes in case of an NVE. Fitch
has applied one notch, rather than two, for loss severity, as
partial, and not solely full, write-down of the notes is
possible. In Fitch's view, there is some uncertainty as to the
extent of losses the notes would face in case of an NVE, given
that this would be dependent on the size of the operating losses
incurred by the bank and any measures taken by the authorities to
help restore the bank's viability.

RATING SENSITIVITIES

As the notes are notched down from Halk's VR, their rating is
primarily sensitive to a change in the VR. The notes' rating is
also sensitive to a change in notching due to a revision in
Fitch's assessment of the probability of the notes' non-
performance risk relative to the risk captured in Halk's VR, or
in its assessment of loss severity in case of non-performance.

Halk's ratings are listed as follows:

T2 capital notes rating: assigned at 'BB(EXP)'

The following ratings are unaffected by action:

Long-Term Foreign IDR: 'BB+'; Stable Outlook
Short-Term Foreign IDR: 'B'
Long-Term Local Currency IDR: 'BBB-'; Stable Outlook
Short -Term Local Currency IDR: 'F3'; Stable Outlook
National Long-Term Rating: 'AAA(tur)'; Stable Outlook
Viability Rating: 'bb+'
Support Rating: '3'
Support Rating Floor: 'BB+'
Long-term senior unsecured rating: 'BB+'


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


UKRAINE: Parliament Simplifies Bank Capitalization Procedure
------------------------------------------------------------
world.24-my.info reports that the National Bank of Ukraine
welcomed the decision of Parliament on the simplification of the
procedure of capital increase.

The Parliament adopted the law on the facilitation of the
capitalization and restructuring of banks on March 23,
world.24-my.inf relates.

According to world.24-my.info, in Ukraine, 37 banks have to
increase their share capital to UAH200 million until at least
July 11, 2017.

Now the requirement to increase capital are performed at the
expense of additional contributions of shareholders, however,
with the adoption of the law opens the possibility to consolidate
the banking sector through merger of banks, world.24-my.info
notes.

Reorganization of banks will be possible under the shortened
procedure, which will be reduced from six years to three or four
months, world.24-my.info states.

The law also gives banks the opportunity to refuse a banking
license without liquidation of a legal entity and to continue as
a non-banking financial sector, having done the obligations to
depositors and other creditors, world.24-my.info discloses.


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


ASTON MARTIN: Moody's Affirms B3 Corporate Family Rating
--------------------------------------------------------
Moody's Investors Service has affirmed the B3 corporate family
rating (CFR) and B3-PD probability of default ratings of Aston
Martin Holdings (UK) Limited (Aston Martin). At the same time
Moody's has assigned a B3 instrument rating to the proposed
GBP530 million equivalent senior secured notes (consisting of a
GBP and a USD tranche) to be issued by Aston Martin Capital
Holdings Limited. The outlook for Aston Martin Capital Holdings
Limited is positive.

Moody's will likely withdraw the B3 rating for the existing
GBP304 million senior secured notes issued by Aston Martin
Capital Limited once these have been repaid using the proceeds of
this transaction.

The outlook on the ratings of Aston Martin has been changed to
positive from stable.

"Aston Martin's outlook change to positive reflects the company's
better than expected operating performance in fiscal year 2016
and moreover Moody's view of a continued substantial improvement
over the period 2017-2019 driven by the successful renewal of
Aston Martin's sports car range, following the strong demand for
the new DB11 launched in Q4 2016," says Falk Frey a Moody's
Senior Vice President and lead analyst for Aston Martin.

RATINGS RATIONALE

On the basis of the strong demand for the newly launched DB11 in
Q4 2016, Aston Martin's reported EBITDA in Q4'16 reached GBP69
million, bringing FY2016 reported EBITDA to GBP101 million. On a
Moody's adjusted basis EBITDA was still negative at GBP-14
million (adjusted for capitalized development cost) but
significantly improved from a negative GBP36 million in 2015 and
negative free cash flow was reduced to GBP57 million from a
negative GBP118 million. For the current year Moody's anticipates
a significant improvement in Aston Martin's financial metrics
based on the strong order book for DB11 and its full year
availability. Moody's anticipates Aston Martin to achieve its
full-year 2017 guidance generating a reported EBITDA of between
GBP160-165 million which would translate into a gross leverage
(debt/EBITDA) of 11x however with a still negative free cash flow
generation given the anticipated high level of investments for
the renewal of the remaining sports car models, the announced SUV
model and investments into the development of the announced
electric car as well as into new technologies reducing emissions.
The most significant risk that Moody's expects for Aston Martin
to not reach this level is potential issues with the roll-out of
the new DB11 at the expected run rate.

Aston Martin's liquidity profile will be further strengthened by
this refinancing transaction and the increased size of the
revolving credit facility to GBP80 million from the current
facility amount of GBP40 million. Together with a cash position
of GBP126 million after the successful issuance of the new bond
(GBP102 million as of Dec 30, 2016) these sources should be
sufficient to cover Aston Martin's anticipated cash needs for
more than the next 18 months.

RATIONALE FOR THE POSITIVE OUTLOOK

The positive outlook is based on Moody's expectation of a
continued strong demand for Aston Martin's DB11 model and a
successful renewal of the other sports car models (Vantage and
Vanquish) that will lead to a material improvement in operating
performance over the next 2 years, e.g. a positive EBITA result
in 2017 and a positive free cash flow by 2018 (as defined by
Moody's).

WHAT COULD CHANGE THE RATINGS DOWN/UP

The ratings could be upgraded if Aston Martin is able to
successfully execute its product development plan, which would
help turn into a positive free cash flow generation in 2018 at
the latest. and in case of visibility of achieving a leverage
moving (debt/EBITDA) towards 6.0x.

Moreover, Aston Martin would have to maintain a solid liquidity
profile with sufficient cushion to cover cash needs over a period
of at least 12 months, on a rolling basis.

The ratings could come under pressure in case of (1) weakening
operating performance and cash generation with an expected
negative free cash flow above GBP100 million per annum (before
Moody's adjustments) for longer than 18 months or (2) evidence of
execution issues associated with the roll out of the new DB11 or
the development of its next core models, or with its strategic
supply agreement with Daimler AG.

The principal methodology used in these ratings was Global
Automobile Manufacturer Industry published in June 2011.

Based in Gaydon, UK, Aston Martin is a car manufacturer focused
on the high luxury sports car segment. Aston Martin's current
core products include five core models (DB11, V8 Vantage S, V12
Vantage S, Vanquish S and Rapide S) and generated sales of GBP593
million in 2016 and an adjusted EBITDA (as defined by the
company) of approximately GBP101 million from the sale of total
3,687 cars of which 1,005 were made from its new DB11 (market
launch during Q4 2016).


ASTON MARTIN: S&P Affirms 'B-' CCR; Outlook Stable
--------------------------------------------------
S&P Global Ratings affirmed its 'B-' long-term corporate credit
rating on U.K.-based auto-manufacturer Aston Martin Holdings (UK)
Ltd. (AM).  The outlook remains stable.

At the same time, S&P assigned its 'B-' issue rating to the
proposed GBP530 million senior secured notes to be issued by
Aston Martin Capital Holdings Ltd.  The recovery rating is '4',
indicating S&P's expectation of a 30% prospect of recovery in the
event of a payment default.

S&P also affirmed its 'B-' senior secured debt rating on the
GBP304 million notes issued by Aston Martin Capital Ltd.  The
recovery rating on these notes is unchanged at '4', indicating
S&P's expectation of a 30% prospect of recovery in the event of a
payment default.

S&P also affirmed its 'CCC' subordinated debt rating on the
GBP177 million ($165 million original issue amount) 10.25%
unsecured subordinated payment-in-kind (PIK) notes due July 2018,
issued by AM.  The recovery rating on these notes is unchanged at
'6', indicating S&P's expectation of 0% recovery in the event of
a payment default.

S&P will withdraw the issue and recovery ratings on the existing
senior secured notes and PIK notes once the transaction is
completed.

The ratings on the proposed senior secured notes are subject to
the successful completion of the transaction, and to S&P's review
of the final documentation.  If S&P Global Ratings does not
receive the final documentation within a reasonable timeframe, or
if the final documentation departs from the materials S&P has
already reviewed, it reserves the right to withdraw or revise its
ratings.

The affirmation reflects the turnaround that is underway in AM's
business prospects as it starts to successfully deliver on its
roll-out of new car models, notably the DB11 in October 2016, and
special editions.  S&P expects the positive momentum to continue,
which will further rebuild AM's competitive position.  Over the
next two years, S&P expects AM to become profitable and cash flow
generative.

AM's progress gives us more confidence in the viability of the
business over the medium term.  That said, S&P had expected much
of the improvement already seen and it had factored it into its
ratings.  AM also still has some way to go to sufficiently
demonstrate the rebuilding of its business and operating
performance, and show a stronger track record of delivering on
its growth strategy.

To become financially self-sufficient and not require ongoing
capital raising (as it has done during the last three years),
AM's strategy is to upgrade and refresh its entire range of
production sports cars, and expand into new segments, by 2020.
The first step was the successful launch of the DB11 sports
car -- a clear sign that AM can deliver on its strategy.  It has
additional new models planned, including its first SUV, the DBX,
in 2019.

Over the next two-to-three years, AM will need continued heavy
and higher levels of investment in research and development (R&D)
and capital expenditures (capex) to deliver on its strategy.
While S&P forecasts a turnaround in profits and cash flows during
this period, in S&P's base case it continues to expect EBITDA
losses on an S&P Global Ratings-adjusted basis in 2017, because
of high R&D costs, before becoming profitable in 2018.  (Note
that S&P expenses all R&D costs whereas the company largely
capitalizes them).  For funds from operations (FFO), S&P
forecasts positive levels only from 2019, due to high interest
costs.  S&P expects free operating cash flow (FOCF) to remain
significantly negative in 2017, reducing considerably in 2018 and
becoming positive only in 2019.

The company's operating results for 2016 were stronger year-on-
year and better than S&P expected, but remained weak.  On an S&P
Global Ratings-adjusted basis, EBITDA was a loss of GBP13 million
and FFO was negative GBP62 million.  AM also has substantial
interest expenses, which are partly non-cash on PIK notes and
preference shares that are capitalized and added to reported
debt. FOCF was negative at GBP56 million.

Adjusted debt as of Dec. 31, 2016, was GBP788 million, slightly
ahead of reported gross debt of GBP701 million because S&P adds
GBP59 million for pensions and GBP29 million for operating
leases. S&P do not deduct any cash -- which was GBP102 million --
in its debt calculation.  Under S&P's criteria for noncommon
equity financing, it regards the GBP218 million of preference
shares as debt-like obligations.  Redeemable in 2025, interest on
these instruments accrues at 15% annually.

In S&P's base case for 2017 and 2018 it assumes:

   -- Continued volume growth in the luxury auto segment.  This
      is ahead of the 2%-3% we expect for the global auto market,
      in line with global GDP growth.  Much higher revenues for
      AM in both years, supported by higher volumes and average
      selling prices, reflecting the success of the DB11, and
      special limited edition models, as well as future new
      models.  A significant improvement in reported EBITDA to
      GBP160 million-GBP165 million in 2017 (in line with
      management guidance), with a further increase in 2018.
      Higher substantial capex (including capitalized R&D) in
      2017 of GBP250 million-GBP260 million, reducing in 2018.

   -- Sizable negative FOCF of around GBP90 million in 2017,
      reducing significantly in 2018.

Based on these assumptions, S&P expects:

   -- S&P Global Ratings-adjusted EBITDA in 2017 to be slightly
      negative before becoming positive in 2018.  S&P Global
      Ratings-adjusted FFO to be negative in both 2017 and 2018.

   -- Higher S&P Global Ratings-adjusted debt in both years.

S&P's assessment of AM's business risk profile remains
constrained by the company's limited product range and operating
diversity; its large R&D expenses, which lead to forecast EBITDA
losses in 2017; and the cyclical demand for luxury sports cars.
AM also has a niche market position compared with larger and
stronger peers.

Mitigating factors include strong brand recognition; a modular
production platform; and above-average growth rates in the super-
premium automotive segment.  S&P also recognizes the company's
successful launch of the DB11 sports car and special edition
cars, which demonstrate that a turnaround is underway in AM's
business prospects.  S&P expects this to continue, which will
further strengthen AM's competitive position and lead to improved
profitability in coming years.  AM's agreement with German auto
manufacturer Daimler AG -- in which Daimler will provide AM with
electronic architecture and engines -- is also a positive factor.

S&P's assessment of AM's financial risk profile remains
constrained by the need for continued sizeable R&D and capex;
S&P's forecast of negative FFO and heavily negative FOCF in 2017;
rising adjusted debt; and lack of meaningful leverage or coverage
metrics.

Mitigating factors include an improving trend in profitability in
2018 and lengthened debt maturity profile, as the new issuance
will repay AM's principal debt instruments that mature in July
2018.

S&P has revised its assessment of AM's business risk profile
upward to weak from vulnerable; unchanged are its highly
leveraged financial risk profile, the 'b-' anchor, and the
financial-sponsor 6 assessment.

The stable outlook reflects S&P's view that much of the
improvements in AM's business are already factored into S&P's
ratings, and it do not expect to raise the ratings within the
next year.  Nevertheless, S&P expects AM to continue to
successfully deliver on its business strategy.  For the current
ratings, S&P factors in a significant increase in reported EBITDA
in 2017 to GBP160 million-GBP165 million and S&P assumes AM will
maintain sufficient liquidity to fully fund the negative FOCF
that S&P forecasts for 2017 and 2018.

S&P could raise the ratings if AM further strengthens its
competitive position, specifically by delivering on its strategy
to refresh and replace its sports car range, which are key in
rebuilding AM business prospects.  Achieving profitability
targets would also augur well for a positive rating action.

S&P could lower the ratings if AM experienced delays or
production problems in delivering its planned volumes over the
next year, or if S&P felt that negative FOCF will not be fully
funded during 2017 or 2018 by available liquidity.  S&P could
also lower the ratings if the planned refinancing was not
completed.


BAKKAVOR FINANCE: S&P Affirms Then Withdraws 'B+' CCR
-----------------------------------------------------
S&P Global Ratings said that it affirmed and then withdrew its
'B+' long-term corporate credit rating on fresh prepared food
producer Bakkavor Finance 2 PLC.  The outlook was stable at the
time of the withdrawal.

S&P also affirmed and withdrew its 'B+' issue-level and '3'
recovery ratings on the company's GBP117 million senior secured
notes and GBP150 million senior secured notes due to the
redemption of the instruments.


BORETS INTERNATIONAL: Fitch Assigns 'BB-' LT IDR, Outlook Stable
----------------------------------------------------------------
Fitch Ratings has assigned Borets International Limited first-
time Long-Term Foreign- and Local-Currency Issuer Default Ratings
(IDR) of 'BB-' and Short-Term Foreign- and Local-Currency IDRs of
'B'. Fitch has also assigned a senior unsecured rating of 'BB-'
to the Borets Finance DAC's outstanding 2018 Eurobonds and a
senior unsecured expected rating of 'BB-(EXP)' for its Eurobonds
of up to USD400 million. The Outlook on the Foreign- and Local-
Currency IDRs is Stable.

The ratings are supported by the company's high margins, moderate
geographical diversification and good liquidity. However, a
relatively weak business profile due to lack of product
diversification constrains the ratings.

KEY RATING DRIVERS

Good Underlying Cash Flows: Borets consistently generates funds
from operations (FFO) above 14% and free cash flow (FCF) margins
above 2%. Fitch considers these good for the rating and broadly
in line with industry peers. The company is vulnerable to the
translation effect of foreign-currency swings, but its revenue
and costs are closely matched by currency, which allows margin
preservation to be maintained.

Solid Liquidity and Moderate Leverage:  Borets' liquidity is
adequate, with unrestricted cash at end-2016 of USD23 million and
unused credit facilities of USD5 million, more than sufficient to
cover short-term maturities of USD8 million relating to the
interest payment on the company's Eurobonds. Gross and net
leverage, at around 3x at end-2016, are in line with the present
rating and Fitch expects them to remain broadly stable over the
medium term.

Solid Position in a Niche Market: The market for Borets'
electrical submersible pumps (ESPs) is relatively niche but also
protected from new entrants due to the high technological content
and the need for strong relationships with the key customers.
Borets is the largest producer of ESPs globally by units. The
relatively weak diversity due to its almost exclusive focus on
ESPs is offset by its high portion of services and aftermarket
revenue, strong and long-term relationships with major oil
companies, low-cost production base, high vertical integration
and relatively high barriers to entry.

Limited Product Diversification: Borets' business profile is
restricted by a narrower product and customer range than some of
its major peers. The group's product portfolio is limited to its
ESP systems for the oil and gas industry, with most customers
based in Russia (although this is changing), exposing it to the
fortunes of these companies.

Market Protected from Oil Price Changes: Borets' products are
accounted as operating expenditures for its customers. Oil
production in the existing oilfields would be impossible without
ESPs and therefore expenditures for acquiring them cannot be
postponed. Furthermore, oil companies in Russia (and worldwide)
are focusing more on brownfield projects, requiring more ESPs and
making Borets less vulnerable to oil price shocks.

DERIVATION SUMMARY

Borets is moderately well positioned relative to peers. A
relatively weak business profile, exemplified by poor product
diversification, is offset by its strong market position in
Russia and globally, most of the company's customers having good
credit quality. Margins are stable and relatively high owing to
the company's good execution capabilities and low cost position,
while leverage is in line with peers.

KEY ASSUMPTIONS

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

- Modest revenue growth of 3%-5% annually, slightly below CAGR
   growth of 3%-6% for Borets' ESP installed base and ESPs under
   service agreements over the last 10 years
- Gradually declining EBITDA margin to around 23%, closer to the
   historical average
- Part of outstanding Eurobonds to be refinanced through the
   tender offer
- No dividend payments over the rating horizon
- Capex at around 4% of revenue over 2017-2020, slightly above
   the historical average of 3.5%

RATING SENSITIVITIES

Future Developments That May, Individually or Collectively, Lead
to Positive Rating Action

An upgrade is unlikely if the business profile does not improve
materially, including a major increase in scale and improvement
in the geographical diversification.

Future Developments That May, Individually or Collectively, Lead
to Negative Rating Action

- FCF margin below 1% on a sustained basis
- Extensive capital expenditures, acquisition programme or
   significant change in dividend policy
- FFO adjusted net leverage above 3.5x on a sustained basis
- FFO fixed charge coverage below 3.0x on a sustained basis

LIQUIDITY

Adequate Liquidity: Borets' liquidity is adequate, with
unrestricted cash of USD23 million and unused credit facilities
of USD5 million, more than sufficient to cover short-term
maturities of USD8 million, which relate to the interest payment
on the Eurobonds. The tender offer is announced for the whole
amount of the outstanding bonds of USD373 million and financed by
the proposed bond issue.

The portion of the newly issued Eurobond, which would not be used
for the repayment during the tender offer, would be kept as cash
in US dollars with the sole purpose of repayment of the 2013
Eurobond.

FULL LIST OF RATING ACTIONS

Borets International Limited
-- Long-Term Foreign-Currency IDR 'BB-'; Outlook Stable
-- Long-Term Local-Currency IDR 'BB-'; Outlook Stable;
-- Short-Term Foreign-Currency IDR 'B';
-- Short-Term Local-Currency IDR 'B'.

Borets Finance DAC
-- Senior unsecured 'BB-';
-- Senior unsecured 'BB-(EXP)'


CAMBRIAN PARK: Rescued from Administration; 150 Jobs Saved
----------------------------------------------------------
Owen Hughes at Daily Post reports more than 150 jobs have been
secured after a luxury lodge maker was saved from administration.

Cambrian Park and Leisure Homes Limited went into administration
after suffering losses and cash-flow pressures after a move to a
new purpose built manufacturing unit in Porthmadog, according to
Daily Post.

The report discloses this put around 160 jobs and the whole brand
under threat despite a strong order book thanks to the boom in
lodge holidays.

But business advisory firm FRP Advisory LLP has secured the sale
of the business to Cambrian and Sovereign Holding Group, the
report notes.

The report relates that this is a new company set-up by the
owners of Sovereign Park & Leisure Homes in Coventry. The
business will continue to operate from its main manufacturing
site at Gelert House in Porthmadog, it adds.

The report relays that Ben Woolrych, joint administrator, and
partner at FRP Advisory said: "We are delighted to have secured
the future of the Cambrian business and brand, which is one of
the leading manufacturers of luxury holiday lodges.

"This is a great result for the manufacturing sector in the area,
the employees and the customer base ahead of the UK holiday
season.

"We wish the management and staff all the very best for the
future."

The report discloses that Vincent McCullagh, managing director of
Sovereign Park & Leisure Homes Ltd and now also Cambrian, said:
"We are absolutely delighted with our acquisition which will give
us a fantastic future in the lodge manufacturing sector, which
was the next step we were looking to take following our success
in the residential park home market.

Talking about the issues that led to Cambrian entering
administration, FRP Advisory said: "Revenues at the company have
grown strongly over the past two years and the business had been
operationally restructured in the second half of 2016 including a
centralization of manufacturing to its purpose built unit in the
town.

"The transition was not as effective as envisaged which led to
significant losses and cash-flow pressure despite a strong order
book from its loyal customer base," the report relays.


CLEEVE LINK: Care Services to be Split Between Six Organizations
---------------------------------------------------------------
Josh Wright at Gazette Series reports that care provided by
Cleeve Link prior to its liquidation earlier this month will be
split between six different organizations, it has been announced.

Human Support Group will take over the home care services in the
Stroud district, as well as Gloucester, while the remainder of
Gloucestershire will be served by five other companies, according
to Gazette Series.

The report discloses that staff who stayed on unpaid to continue
providing care following Cleeve Link's liquidation will be kept
on by the new providers, according to Gloucestershire County
Council, whilst the council has also made good any missed pay in
the interim.

The report notes Cllr Dorcas Binns, cabinet member for older
people, said: "I would like to thank all the care staff who have
worked through this difficult time and the people who receive
care for their patience.

"We were only made aware of Cleeve Link's intentions at extremely
short notice and had no indication that the new owner planned to
liquidate the company.

"These new providers will make sure care continues for those most
in need."

The report notes that new organisations taking over the remainder
of the county are:

Cheltenham - Comfort Call

Forest of Dean - Radis

Cotswolds - Careful Care

Tewkesbury town and Marina Court - Live Well at Home

Wider Tewkesbury borough - Radis and Comfort Call


CO-OPERATIVE BANK: Hedge Funds Plan to Form Bondholder Committee
----------------------------------------------------------------
Ben Martin at The Telegraph reports that hedge funds invested in
Co-operative Bank have started to hold talks about forming a
bondholder committee in preparation for a painful capital raising
or wind-down of the troubled lender.

According to The Telegraph, bondholders are looking at ensuring
their interests are represented in the event the lender forces
through a debt-for-equity swap or the Bank of England intervenes
and puts it into resolution.

There is rising concern loss-making Co-op Bank will fail in its
attempt to orchestrate a rescue by attracting a suitor willing to
acquire its entire business, The Telegraph notes.

On March 24, the Co-op Bank insisted "credible" suitors are
eyeing bids, The Telegraph recounts.

CYBG, the bank behind the Clydesdale and Yorkshire brands, Virgin
Money and private equity houses are understood to be interested
in bids, but industry insiders are skeptical they will reach a
deal for the whole bank, The Telegraph relates.

Co-op Bank, The Telegraph says, is also drawing up an alternative
plan to raise GBP750 million through a debt-for-equity swap,
which is expected to see junior bond holders bailed in, and by
raising GBP300 million in new equity.  If it does not find
investors, there is speculation its senior debt investors could
also be bailed in, according to The Telegraph.

Failure would result in the Bank of England winding down Co-op
Bank by placing it in resolution, which would impose losses on
bond holders, The Telegraph states.

The Co-operative Bank is a retail and commercial bank in the
United Kingdom, with its headquarters in Balloon Street,
Manchester.  The bank has around four million customers and 105
branches.


STONEHOUSE CREEK: Council Bosses Claim Not Aware of Liquidation
---------------------------------------------------------------
Sarah Waddington at The Herald reports that council bosses said
they have 'not been formally contacted' about the apparent
liquidation of Stonehouse Creek Social Club.

The future of the Stonehouse venue hangs in the balance following
claims it had gone bust earlier this week -- with no word from
its owners over its fate, according to The Herald.

The report notes that the company which owns the long lease of
the club, Stonehouse Creek Community Development Trust Ltd., has
not issued any formal statement to the press.

Plymouth City Council, which owns the freehold to the building,
says it too has not been told about the company's current
financial situation, the report adds.



                       *********

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.


                 * * * End of Transmission * * *