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

                           E U R O P E

          Thursday, April 20, 2017, Vol. 18, No. 78


                            Headlines


B U L G A R I A

NATSIONALNA ELEKTRICHESKA: S&P Affirms 'B' Corp. Credit Rating


G E R M A N Y

KLEOPATRA HOLDINGS: S&P Puts 'B' CCR on CreditWatch Developing


G R E E C E

SEANERGY MARITIME: Two Deals to Hike Pro-Forma Equity by 62%
SEANERGY MARITIME: Jelco Delta Holds 68.4% Stake as of March 21


L A T V I A

SC CITADELE: Moody's Hikes LT Deposit Rating to Ba2, Outlook Pos.


L U X E M B O U R G

ARVOS MIDCO: Moody's Affirms B3 CFR, Revises Outlook to Positive


N E T H E R L A N D S

HALCYON LOAN 2014: S&P Assigns 'B-' Rating to Class F-R Notes
JUBILEE CLO 2014-XI: S&P Assigns 'B-' Rating to Cl. F-R Notes
ARES EUROPEAN VI: S&P Assigns 'B-' Rating to Cl. F-R Notes


P O L A N D

CYFROWY POLSAT: S&P Affirms 'BB+' CCR & Revises Outlook to Pos.


R U S S I A

KOKS PAO: Fitch Affirms 'B' Long-Term IDR, Outlook Negative
KOKS PJSC: Moody's Puts B3 CFR on Review for Upgrade
KOKS PJSC: S&P Puts 'B-' CCR on CreditWatch Positive
NATIONAL FACTORING: S&P Raises Counterparty Credit Rating to 'B'
OSTANKINO DAIRY: Vozrozhdeni Files Bankruptcy Petition

PERESVET JSC: Russia Regional Development Bank to Manage Rescue
PHOSAGRO BOND: Moody's Assigns Ba1 Rating to Proposed Sr. Notes
PHOSAGRO BOND: Fitch Rates Proposed USD500MM Notes 'BB+(EXP)'

* RUSSIA: Amends Provisions of Bankruptcy, Liquidation Procedures


U K R A I N E

MHP SA: S&P Puts 'B-' CCR on CreditWatch Positive


U N I T E D   K I N G D O M

ASHTEAD GROUP: S&P Raises CCR to 'BB+' on Strong Performance
CARD LAND: In Liquidation, Store Closes
CFO LENDING: Collapses Into Administration
COOTES CONCRETE: Owed GBP3.4 Mil. at Time of Administration
DRAX POWER: S&P Raises CCR to 'BB+' on Refinancing

ISTMO RE: In Administration, Probitas 1492 Still in Business
JAEGER: Begins Process of Closing Stores, 200+ Jobs at Risk
VOYAGE BIDCO: Moody's Affirms B2 CFR, Outlook Stable
VOYAGE CARE: S&P Assigns 'B+' Rating to GBP205MM Sr. Sec. Notes


                            *********



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B U L G A R I A
===============


NATSIONALNA ELEKTRICHESKA: S&P Affirms 'B' Corp. Credit Rating
--------------------------------------------------------------
S&P Global Ratings affirmed its 'B' long-term corporate credit
rating on the Bulgarian electricity company Natsionalna
Elektricheska Kompania EAD (NEK) and removed it from CreditWatch,
where S&P placed it with negative implications on Dec. 28, 2016.
The outlook is negative.

The affirmation reflects S&P's expectation that NEK's parent,
Bulgarian Energy Holding (BEH), will post stable performance and
exhibit liquidity recovery in 2016-2017, which underpins the
group's ability to provide ongoing and extraordinary support to
NEK.

NEK is Bulgaria's operator of hydropower plants and electricity
supplier to protected customer groups.  NEK is 100% owned by BEH.
BEH is a 100% state-owned holding that controls a number of
assets in the Bulgarian electricity sector, including electricity
generation, transmission, distribution, gas transmission, and
coal mining.  S&P expects BEH's consolidated EBITDA in 2016-2017
to be about Bulgarian lev (BGN) 0.6 billion-BGN0.7 billion (about
EUR300 million-EUR350 million) with consolidated debt to EBITDA
of 4x-5x.

NEK's profitability and cash flow remains well below S&P's
expectations, despite better supplier terms and the compensation
of expenses via the Security of the Electricity System Fund
established by the regulator.  NEK continues to carry out the
function of a public electricity provider in the country and
electricity prices remain low.

S&P continues to believe that NEK's financial position remains
unsustainable in the long term and its stand-alone capacity to
meet its financial obligations mainly depends on how quickly
changes in regulatory conditions will translate into positive
cash flow generation.  S&P understands that NEK's losses have
reduced, but the company's EBITDA and funds from operations (FFO)
remained negative in 2016.

S&P notes NEK generated strongly negative EBITDA of BGN72 million
in the first half of 2016 recovering to negative BGN10 million-
BGN20 million for full-year 2016.  In S&P's base case, it expects
the company to start generating positive EBITDA in 2017 but
substantial interest expenses will result in still neutral to
negative FFO.  S&P expects FFO to become positive only in 2018.
S&P's 'ccc+' assessment of NEK's stand-alone credit profile
(SACP) includes ongoing support from the parent.

As of Dec. 31, 2016, more than 70% NEK's debt was to BEH and
about 25% directly to the Bulgarian government, with external
debt being very low.  In December 2016, NEK received a EUR601.6
million loan from the government and fully repaid its litigation
liability due to Russian nuclear builder Atomstroyexport.  The
government loan is long-term (seven years), zero-interest, and
doesn't stipulate an event of default, but it is not subordinated
to NEK's other debt and would need to be repaid immediately if
NEK manages to sell the nuclear assets received from
Atomstroyexport.  Therefore, S&P treats it as debt, although S&P
notes its favorable structure.

S&P continues to regard NEK as a strategically important
subsidiary of BEH.  S&P consequently factors in two notches of
uplift from NEK's 'ccc+' SACP.  S&P's rating on NEK is capped at
one notch below the 'b+' group credit profile (GCP).  Although
S&P do not rate BEH, S&P factors its credit quality into its
rating on NEK.  S&P's assessment of BEH's GCP is 'b+', reflecting
weak and politicized electricity sector regulation, moderately
high risk of operating in Bulgaria, relatively high debt, partly
mitigated by BEH's vertically integrated structure, dominant
position on the market.  S&P understands that in 2016, BEH issued
Eurobonds to refinance NEK's legacy payables.  S&P also
understands that BEH faces large maturities of EUR500 million
(about BGN1 billion) in 2018.  Although BEH's debt is not
guaranteed by the Bulgarian government, S&P views it as a GRE
with moderately high likelihood of extraordinary government
support factor it in S&P's assessment of the GCP.

In S&P's view, NEK should avoid default on its minimal external
debt obligations over the next 12 months if it obtains timely
financial support from BEH and the government.  If NEK fails to
obtain such support, S&P may reassess its view on NEK's status in
the group and with regard to the government.

The negative outlook reflects that S&P could downgrade NEK
because the company remains highly vulnerable on a stand-alone
basis and highly dependent on parental support.  If BEH's
performance is below S&P's expectations, or if BEH experiences
liquidity shortages, the parent's ability to support NEK could
deteriorate, which would pressure the rating on NEK.

S&P would likely lower the rating on NEK if BEH's credit quality
deteriorated materially, including group operational performance,
liquidity, and ability to refinance EUR500 million bonds maturing
in November 2018.  S&P could also lower the rating if parental
support from BEH diminishes, or if NEK's liquidity pressures
significantly increase.

S&P sees its upside scenario as currently remote.  S&P could
revise the outlook to stable if the reforms address structural
flaws in the Bulgarian power system and enable swift turnarounds
in NEK's earnings, liquidity, and credit ratios.  S&P could also
take a positive rating action on NEK if S&P believes that the
government's willingness and ability to provide extraordinary
support, either directly or indirectly through BEH, has
strengthened or if BEH has demonstrated substantially better
performance and lower leverage.


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G E R M A N Y
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KLEOPATRA HOLDINGS: S&P Puts 'B' CCR on CreditWatch Developing
--------------------------------------------------------------
S&P Global Ratings said that it placed its 'B' long-term
corporate credit rating on Germany-based packaging manufacturer
Kleopatra Holdings 2 S.C.A. on CreditWatch with developing
implications.

At the same time, S&P placed on CreditWatch developing its 'B'
rating on Kleopatra's senior secured debt.  The recovery rating
on the debt remains '4', indicating S&P's expectation of average
recovery prospects (rounded estimate: 40%) in the event of a
payment default.

S&P also placed on CreditWatch developing our 'CCC+' rating on
Kleopatra's senior unsecured debt.  The recovery rating on the
debt remains '6', indicating S&P's expectation of negligible
recovery prospects (rounded estimate: 0%) in the event of a
payment default.

The CreditWatch placement follows the announcement that Germany-
based Kleopatra Holdings 2 S.C.A., the parent of plastic film
packaging manufacturer Kloeckner Pentaplast, has signed an
agreement to acquire LINPAC, a film producer and converter for
food packaging in Europe.  At this stage, the details of the
transaction have not been disclosed.  The transaction is subject
to regulatory approval and S&P expects to have analyzed the
combined group and new capital structure within the next three
months, at which time S&P would resolve the CreditWatch
placement. The outcome of the CreditWatch placement will depend
on the funding of the acquisition and the combined group's
strategy. Although S&P believes that, with pro forma sales of
about EUR2 billion, the acquisition of LINPAC will add to the
overall scale and diversity of Kloeckner Pentaplast, with
exposure to growing food packaging markets in Eastern Europe, S&P
believes that the business risk profile is likely to remain fair.

The CreditWatch placement with developing implications reflects
that S&P could consider a change in ratings in either direction
depending on S&P's analysis of the combined group's business risk
profile and new capital structure once the financing details are
disclosed.

S&P could affirm the 'B' rating and assign a stable outlook if
the company's resulting leverage metrics were consistent with the
upper end of the highly leveraged financial risk profile, with
EBITDA interest coverage remaining at over 2x.

S&P could raise the rating to 'B+' if it assessed the new capital
structure as having significantly lower leverage, as a result of
the acquisition being funded by a meaningful equity injection.
In that case, S&P would typically anticipate debt to EBITDA of
below 5x and funds from operations to debt over 12%, but
importantly S&P would also need to be satisfied that the group's
financial policy would be revised in order to support such credit
metrics on a sustained basis.

Alternatively, S&P could lower the rating to 'B-' if the
company's post-acquisition capital structure demonstrates
significantly weakened credit metrics from S&P's current base-
case forecasts, in particular if EBITDA interest coverage fell
below 1.5x, or S&P saw pressure on the group's liquidity.


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G R E E C E
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SEANERGY MARITIME: Two Deals to Hike Pro-Forma Equity by 62%
------------------------------------------------------------
In Form FWP filed with the Securities and Exchange Commission,
Seanergy Maritime Holdings Corp. (NASDAQ: SHIP) announced on
April 10, 2017, its pro-forma capitalization giving effect to the
definitive agreement with one of its senior lenders for the early
repayment of a loan facility at a 30% discount that is expected
to generate a gain and equity accretion of $11.4 million, as well
as the previously announced memorandum of agreement to purchase a
Korean, 2012 built Capesize vessel, which is to be renamed
Partnership, for $32.65 million.

Assuming the completion of the two transactions, the pro-forma
total capitalization and total equity of the Company as of April
10 is estimated to be $279.4 million and $49.9 million,
respectively.  In addition, these transactions are expected to
result in a 62% increase of total pro-forma equity.

A full-text-copy of Form FWP is available for free at
https://is.gd/SZ2uMo

                      About Seanergy

Athens, Greece-based Seanergy Maritime Holdings Corp. is an
international company providing worldwide seaborne transportation
of dry bulk commodities.  The Company owns and operates a fleet
of seven dry bulk vessels that consists of three Handysize, two
Supramax and two Panamax vessels.  Its fleet carries a variety of
dry bulk commodities, including coal, iron ore, and grains, as
well as bauxite, phosphate, fertilizer and steel products.

For the year ended Dec. 31, 2015, the Company reported a net loss
of US$8.95 million on US$11.2 million of net vessel revenue
compared to net income of US$80.3 million on US$2.01 million of
net vessel revenue for the year ended Dec. 31, 2014.

As of Sept. 30, 2016, Seanergy had US$203.60 million in total
assets, US$184.45 million in total liabilities and US$19.15
million in stockholders' equity.

Ernst & Young (Hellas) Certified Auditors-Accountants S.A., in
Athens, Greece, issued a "going concern" qualification on the
consolidated financial statements for the year ended Dec. 31,
2015, citing that the Company reports a working capital deficit
and estimates that it may not be able to generate sufficient cash
flow to meet its obligations and sustain its continuing
operations for a reasonable period of time, that in turn raise
substantial doubt about the Company's ability to continue as a
going concern.


SEANERGY MARITIME: Jelco Delta Holds 68.4% Stake as of March 21
---------------------------------------------------------------
In an amended Schedule 13D filed with the Securities and Exchange
Commission, these reporting persons disclosed beneficial
ownership of Seanergy Maritime as of March 21, 2017:

                                 Shares         Percentage
                              Beneficially          of
  Name                           Owned            Shares
  ----                        ------------      ----------
Jelco Delta Holding Corp.      43,649,230          68.4%
Comet Shipholding Inc.            853,434           2.4%
Claudia Restis                 44,502,664          69.7%

On March 28, 2017, Seanergy Maritime and Jelco entered into an
amendment to the revolving convertible promissory note issued by
the Issuer to Jelco, dated Sept. 7, 2015, as amended, pursuant to
which the Applicable Limit (as defined in the Convertible Note)
will no longer be reduced on Sept. 7, 2017, and instead the
Applicable Limit will be reduced by $3.1 million on each of Sept.
7, 2018, and Sept. 7, 2019.  Further, on March 28, 2017, the
Company entered into a $47.5 million secured loan agreement with
Jelco.  Under the terms of the Jelco Backstop Facility, the
Company has agreed that as a condition precedent to any advance,
the Issuer will obtain an independent third party fairness
opinion stating the conversion price under the Convertible Note
that is fair to all the Issuer's shareholders and enter into an
amendment to the Convertible Note amending the conversion price
in the Convertible Note to the lower of (i) the conversion price
as defined in the Convertible Note and (ii) the price determined
by the fairness opinion.

A full-text copy of the regulatory filing is available at:

                   https://is.gd/qX1xFG

                      About Seanergy

Athens, Greece-based Seanergy Maritime Holdings Corp. is an
international company providing worldwide seaborne transportation
of dry bulk commodities.  The Company owns and operates a fleet
of seven dry bulk vessels that consists of three Handysize, two
Supramax and two Panamax vessels.  Its fleet carries a variety of
dry bulk commodities, including coal, iron ore, and grains, as
well as bauxite, phosphate, fertilizer and steel products.

For the year ended Dec. 31, 2015, the Company reported a net loss
of US$8.95 million on US$11.2 million of net vessel revenue
compared to net income of US$80.3 million on US$2.01 million of
net vessel revenue for the year ended Dec. 31, 2014.

As of Sept. 30, 2016, Seanergy had US$203.60 million in total
assets, US$184.45 million in total liabilities and US$19.15
million in stockholders' equity.

Ernst & Young (Hellas) Certified Auditors-Accountants S.A., in
Athens, Greece, issued a "going concern" qualification on the
consolidated financial statements for the year ended Dec. 31,
2015, citing that the Company reports a working capital deficit
and estimates that it may not be able to generate sufficient cash
flow to meet its obligations and sustain its continuing
operations for a reasonable period of time, that in turn raise
substantial doubt about the Company's ability to continue as a
going concern.


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L A T V I A
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SC CITADELE: Moody's Hikes LT Deposit Rating to Ba2, Outlook Pos.
-----------------------------------------------------------------
Moody's Investors Service upgraded SC Citadele Banka's (Latvia)
(Citadele Banka) long-term deposit ratings to Ba2 from B1. The
rating agency also upgraded the bank's baseline credit assessment
(BCA) and adjusted BCA to b1 from b3; and its long-term
Counterparty Risk Assessment (CR Assessment) to Ba1(cr) from
Ba3(cr) The outlook on the long-term deposit ratings remains
positive. The bank's short-term Not Prime (cr) Counterparty Risk
Assessment and short-term Not Prime deposit ratings were affirmed
by today's rating action.

This rating action captures Citadele Banka's improved macro
profile, owing to an increase in the proportion of business it
conducts in the Baltics, away from weaker markets, and Moody's
views that the banking industry structure in all three Baltic
countries has improved following a wave of consolidation in
recent years. The action also reflects parallel improvements in
Citadele Banka's intrinsic credit fundamentals, most notably
significantly strengthened capitalisation and a continued
improving trend in asset quality.

While these macro profile and fundamental improvements led to a 2
notch BCA upgrade, Moody's Loss Given Failure approach and
government support assumptions remain unchanged, leading to a
BCA-driven 2 notch upgrade in Moody's long-term deposit ratings.

The positive outlook reflects Moody's expectation that the bank's
strategic focus on expanding its franchise in the Baltics, while
reducing further its exposure to the Commonwealth of Independent
States (CIS), will lead to further improvements in asset quality
and the bank's overall credit profile. Moody's also expects
Citadele Banka to maintain steady capital and asset quality
metrics, despite its rapid growth.

RATINGS RATIONALE

  - RATIONALE FOR THE UPGRADE OF THE BCA

A primary driver for the upgrade of Citadele Banka's BCA is an
increase in its weighted macro profile by one notch to Moderate
+, reflecting both the bank's increased focus on its strongest
markets and improving conditions in these markets.

Moody's recently increased Estonia's Macro profile to Strong --,
from Moderate +, to reflect the banking sector's improved
earnings predictability following a period of consolidation. At
the same time, Citadele Banka's exposure to Estonia and Lithuania
(both with Macro Profile scores of Strong -) has increased to 11%
and 24% in December 2016 respectively, from 5% and 21% in June
2015, while its exposure to CIS countries, (Macro Profile of Weak
+) declined to about 1% from 6% over the same period.

The other key driver for the upgrade is a strengthening in
Citadele Banka's credit fundamentals over the course of 2016,
most notably an increase in capitalisation, but also an expected
improvement in asset risk.

Moody's expects that the bank will be able to maintain strong
capitalization despite its rapid growth. Prior to its
privatization in April 2015, Citadele Banka was prohibited from
accumulating capital in excess of 50 basis points above its
regulatory requirements. However, this limit has since been
eliminated, freeing it to build up more ample headroom. Moody's
note that by the end of 2016, its Common Equity Tier 1 ratio
increased to 13.5% from 10.7% at June 2015. This significantly
strengthens Citadele Banka's capital headroom over minimum
regulatory capital requirements, which are currently estimated at
10.4%, including a 1.5% buffer due to its classification as an
Other Systemically Important Institution, which is being phased
in by June 2018.

The bank's problem loans as a proportion of gross loans is
expected to continue declining, supported by improving economic
conditions in the Baltics. Citadele Banka's non-performing loans
dipped to 9.9% at end-December 2016 from 10.8% a year earlier and
from over 12% prior to the bank's privatization in 2015. When
considered together with the relatively strong level of
provisions taken against remaining problem loans, with loan loss
reserves over problem loans at 63%, Moody's forecasts that the
bank will benefit from decreasing credit costs going forward.
Problem loans over Tangible Common Equity and Loan loss reserves
improved to 39.8% at end of 2016 from 46.8% at June 2015.

Moody's notes that Latvian banks face a foreign currency funding
constraint arising from the decision by some foreign banks to
discontinue handling USD settlements in Latvia. This requires
local banks to establish new foreign currency clearing
arrangements. Although Moody's views Citadele Banka's foreign
currency funding needs as manageable given its sizeable foreign
currency liquidity cushion, there remain operational and business
risks which the bank is in the process of addressing through the
establishment of alternative foreign currency channels.

  - RATIONALE FOR THE UPGRADE OF THE LONG-TERM DEPOSIT RATING

While macro profile and fundamental improvements led to a 2 notch
BCA upgrade, Moody's Loss Given Failure approach and government
support assumptions remain unchanged. Accordingly, the upgrade of
Citadele Banka's long-term deposit rating to Ba2 from B1
therefore reflects: (1) the upgrade of the bank's BCA and
adjusted BCA to b1; (2) Moody's Advance Loss-Given Failure (LGF)
analysis, which results in two notches of uplift for the deposit
ratings above the BCA; and (3) Moody's assessment of a low
probability of government support for Banka Citadel, which
results in no uplift for the deposit ratings.

  - RATIONALE FOR THE POSITIVE OUTLOOK

The outlook on Citadele Banka's long-term deposit rating remains
positive, reflecting Moody's expectation that the new strategic
direction of the bank and improved operating conditions will lead
to a further strengthening of its credit profile. Moody's
forecasts real GDP in the Baltics to grow by 2.5% and 3.9% in
2017 and in 2018, with continued low interest rates.

  - RATIONALE FOR UPGRADING THE CR ASSESSMENT

As part of today's rating action, Moody's upgraded Citadele
Banka's CR Assessment to Ba1(cr), three notches above the BCA of
b1. The CR Assessment is driven by the bank's adjusted BCA, a low
likelihood of systemic support and by the cushion against default
provided by senior obligations represented by subordinated
instruments and junior deposits.

FACTORS THAT COULD LEAD TO AN UPGRADE

Citadele's deposit ratings would experience upward pressure if it
reported further improvements in asset quality and profitability
as it pursues its new business strategy, while maintaining strong
capital buffers. The bank would also need to demonstrate that it
had found a sustainable solution to the reduction in foreign
currency counterparts conducting business in Latvia.

  - FACTORS THAT COULD LEAD TO A DOWNGRADE

Downward pressure on Citadele's ratings would likely arise from a
change in strategy towards riskier markets and customer segments,
or if Moody's anticipated a significant reduction in the bank's
client base and earnings due to an unexpected loss of access to
USD settlement that could lead to difficulties in executing
clients' USD payments.

LIST OF AFFECTED RATINGS

Issuer: SC Citadele Banka

Upgrades:

-- LT Bank Deposits (Local & Foreign Currency), Upgraded to Ba2
    from B1, Outlook Remains Positive

-- Adjusted Baseline Credit Assessment, Upgraded to b1 from b3

-- Baseline Credit Assessment, Upgraded to b1 from b3

-- LT Counterparty Risk Assessment, Upgraded to Ba1(cr) from
    Ba3(cr)

Affirmations:

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

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

Outlook Actions:

-- Outlook, Remains Positive

PRINCIPAL METHODOLOGY

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


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L U X E M B O U R G
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ARVOS MIDCO: Moody's Affirms B3 CFR, Revises Outlook to Positive
----------------------------------------------------------------
Moody's Investors Service affirmed the B3 Corporate Family Rating
and the B3-PD Probability of Default Rating of Arvos Midco
S.a r.l.  At the same time Moody's affirmed the B2 ratings
assigned to the first lien senior secured term loan B and the
senior secured revolving credit facility (RCF) of Arvos Bidco
S.a.r.l. and the Caa2 rating assigned to the second lien term
loan of Arvos Ljungstrom LLC (formerly Arvos Inc.). The rating of
the second lien term loan will be withdrawn upon full repayment
from proceeds of a proposed term loan add-on. The outlook on all
ratings has been changed to positive from stable.

RATINGS RATIONALE

The change in outlook has been triggered by (i) Arvos' ability to
maintain fairly stable EBITDA while experiencing a material
change in its market environment leading to a further revenue
decline during FY 2016/17 (March 31), (ii) track record of
material free cash flow generation, (iii) good revenue visibility
for the next 12-18 months resulting from a solid order book and
stable aftermarket revenues, (iv) Moody's expectation of a
gradual strengthening of key credit metrics supported by the
completion of the company's restructuring program. In addition,
the planned refinancing of the company's $163 million second lien
term loan borrowed at Arvos Ljungstrom LLC (formerly Arvos Inc.)
by increasing its first lien term loan by EUR130 million will
reduce the currency mismatch and lead to reduced interest expense
supporting the generation of free cash flow.

The B3 corporate family rating (CFR) reflects (1) the group's
small size compared with other European speculative grade
manufacturing companies, as illustrated by revenues in the last
twelve months (LTM) to December 2016 of EUR454 million; (2) high
financial leverage, with debt/EBITDA (as adjusted by Moody's)
expected to be around 6.0x as of end-March 2017; (3) limited
business diversification, with around 60% of group revenue
generated by the Air Preheaters division; (4) relatively high,
albeit declining, exposure to the mature coal-powered electricity
markets of Europe and the United States, which collectively face
long-term structural challenges because of tightening
environmental legislation; and (5) dependence on the investment
decisions of companies operating in the cyclical oil & gas
sector, affecting primarily the Heat Transfer Solutions business.

These negatives are, however, partly balanced by the group's (1)
strong competitive position in certain niche areas of the global
steam auxiliary components market with a broad product portfolio
and global production capability; (2) established position in a
mature industry, which is supported by long-standing customer
relationships, as well as existing technological know-how; (3)
increasing order success in the large Asian markets, in
particular in China; (4) a sizeable and higher-margin aftermarket
business (which accounts for around 60% of group turnover) which
offers a higher level of revenue and earnings stability than the
new equipment business; (5) benefits from the shift of operations
to the more stable and higher-margin aftermarket business (6) a
stable positive free cash flow (FCF) generation.

LIQUIDITY

Moody's considers Arvos' liquidity to be adequate. At the end of
December 2016, the company had EUR43.6 million of cash on the
balance sheet and had access to a EUR40 million RCF, which was
fully undrawn at the end of December 2016. Over the next twelve
months, Moody's expects that Arvos will generate around EUR40-50
million of Funds From Operations (FFO) as well as positive free
cash flow with FCF / debt in the mid-single digits. Debt
amortization under the group's lending facilities will be
manageable.

STRUCTURAL CONSIDERATIONS

In Moody's assessments of the priority of claims in a default
scenario for Arvos, Moody's distinguish between two layers of
debt in the capital structure. The senior secured EUR40 million
RCF, EUR159.5 million outstanding and $195.5 million outstanding
senior secured first lien term loans and trade payables rank pari
passu on top of the capital structure. Behind these debt
instruments are pension and lease obligations.

Part of Arvos's equity is provided by way of a shareholder loan,
which Moody's has considered to be an equity like instrument in
line with Moody's methodology for hybrid debt instruments.

With the refinancing currently contemplated, Arvos will take out
the first loss cushion provided by the 2nd lien term loan through
increasing its senior secured 1st lien borrowings. In the context
of Arvos' strong positioning in the B3 rating category and the
positive outlook on the rating, Moody's has left the instrument
ratings on the 1st lien facilities unchanged at B2, i.e. one
notch above the Corporate Family Rating. In case Moody's
assessments of Arvos rating positioning changes to the negative,
such as through a stabilization of the outlook or more negative
rating action, Moody's will likely remove the one-notch rating
differential and align the 1st lien instrument ratings with the
Corporate Family Rating.

RATIONALE FOR POSITIVE OUTLOOK

The positive outlook assigned to Arvos Midco S.a r.l.
incorporates Moody's expectations that the company's strong order
backlog and a solid aftermarket business will allow the company
to return to topline growth and support EBITDA generation above
the current level over the short to medium term. It also assumes
that the group will continue to generate positive free cash flow,
which will be applied to debt reduction (cash sweep of 50% of
excess cash and scheduled amortization). Overall Moody's would
expects leverage as measured by adjusted debt/EBITDA to reduce to
around 5.5x.

Failure to grow topline and reduce financial leverage on the back
of growing EBITDA and FCF application to debt reduction, also if
caused by an adverse macroeconomic environment or debt-funded M&A
activity, would most likely result in the stabilization of the
outlook change. In such as case, it is likely that Moody's will
align the instrument ratings of the 1st lien instruments with the
CFR as described under structural considerations.

WHAT COULD CHANGE THE RATINGS UP/DOWN

An upgrade would require financial leverage as measured by
adjusted debt/EBITDA sustainably moving towards 5.5x with
FCF/Debt maintained in the mid-single digits. An upgrade of the
CFR would not trigger an upgrade of the instrument ratings.
Downgrade pressure could be exerted on the rating in the event of
weaker operating performance leading to debt/EBITDA increasing
above 6.5x for an extended period of time and to negative free
cash flow generation.

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

Arvos Midco S.a r.l. is the parent company of Arvos BidCo
S.a.r.l., the parent company of the Arvos Group. Arvos Group is
an auxiliary power equipment provider operating in new equipment
and offering aftermarket services. In the twelve months period to
December 2016 Arvos generated EUR454 million of sales (EUR496.5
million in FY2015/16 ended March 31), a company adjusted EBITDA
of EUR108.8 million (EUR95.2 million) and an EBITDA margin of
23.9% (19.2%). Arvos Group is a carve-out from Alstom and is
fully owned by Triton funds and management.


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


HALCYON LOAN 2014: S&P Assigns 'B-' Rating to Class F-R Notes
-------------------------------------------------------------
S&P Global Ratings assigned its credit ratings to Halcyon Loan
Advisors European Funding 2014 B.V.'s (Halcyon 2014) class A-R,
B-R, C-R, D-R, E-R, and F-R notes.  The unrated subordinated
notes initially issued were not redeemed and remain outstanding
with an extended maturity to match the newly issued notes.

The ratings assigned to Halcyon 2014's notes reflect S&P's
assessment of:

   -- The diversified collateral pool, which consists primarily
      of broadly syndicated speculative-grade senior secured term
      loans and bonds that are governed by collateral quality
      tests.

   -- The credit enhancement provided through the subordination
      of cash flows, excess spread, and overcollateralization.

   -- The collateral manager's experienced team, which can affect
      the performance of the rated notes through collateral
      selection, ongoing portfolio management, and trading.

   -- The transaction's legal structure, which is bankruptcy
      remote.

In S&P's view, the transaction's documented counterparty
replacement and remedy mechanisms adequately mitigate its
exposure to counterparty risk under S&P's current counterparty
criteria.

The application of S&P's structured finance ratings above the
sovereign criteria indicates that the transaction's exposure to
country risk is limited at the assigned rating levels, as the
exposure to individual sovereigns does not exceed the
diversification thresholds outlined in S&P's criteria.

S&P considers that the transaction's legal structure is
bankruptcy emote, in line with S&P's legal criteria.

Following S&P's analysis of the credit, cash flow, counterparty,
operational, and legal risks, S&P believes its ratings are
commensurate with the available credit enhancement for each class
of notes.

The proceeds from the issuance of these notes were used to redeem
the existing class A, B, C, D, E, and F notes.

Halcyon 2014 is a European cash flow corporate loan
collateralized loan obligation (CLO) securitization of a
revolving pool, comprising euro-denominated senior secured loans
and bonds issued mainly by European borrowers.  Halcyon Loan
Advisors (UK) LLP is the collateral manager.  The transaction is
a reset of an existing transaction, which closed in 2014.

RATINGS LIST

Halcyon Loan Advisors European Funding 2014 B.V.
EUR313.9 Secured Million Floating-Rate Notes (Including EUR31
Million Unrated Notes)

Class                   Rating           Amount
                                       (mil. EUR)
A-R                     AAA (sf)         179.80
B-R                     AA (sf)           39.70
C-R                     A (sf)            20.90
D-R                     BBB (sf)          15.40
E-R                     BB (sf)           17.75
F-R                     B- (sf)            9.30
Subordinated            NR                31.00

NR--Not rated.


JUBILEE CLO 2014-XI: S&P Assigns 'B-' Rating to Cl. F-R Notes
-------------------------------------------------------------
S&P Global Ratings assigned its credit ratings to Jubilee CLO
2014-XI B.V.'s (Jubilee XI) class X, A-R, B-R, C-R, D-R, E-R, and
F-R notes.  The unrated subordinated notes initially issued were
not redeemed at closing and remain outstanding, with an extended
maturity to match the newly issued notes.

The ratings assigned to the notes reflect S&P's assessment of:

   -- The diversified collateral pool, which consists primarily
      of broadly syndicated speculative-grade senior secured term
      loans and bonds that are governed by collateral quality
      tests.

   -- The credit enhancement provided through the subordination
      of cash flows, excess spread, and overcollateralization.

   -- The collateral manager's experienced team, which can affect
      the performance of the rated notes through collateral
      selection, ongoing portfolio management, and trading.

   -- The transaction's legal structure, which is bankruptcy
      remote.

S&P considers that the transaction's documented counterparty
replacement and remedy mechanisms adequately mitigate its
exposure to counterparty risk under S&P's current counterparty
criteria.

Under S&P's structured finance ratings above the sovereign
criteria, the transaction's exposure to country risk is limited
at the assigned rating levels, as the exposure to individual
sovereigns does not exceed the diversification thresholds
outlined in S&P's criteria.

The transaction's legal structure is bankruptcy remote, in line
with S&P's legal criteria.

Following S&P's analysis of the credit, cash flow, counterparty,
operational, and legal risks, S&P believes its ratings are
commensurate with the available credit enhancement for each class
of notes.

Jubilee XI is a European cash flow corporate collateralized loan
obligation (CLO) securitization of a revolving pool, comprising
euro-denominated senior secured loans and bonds issued mainly by
European borrowers.  Alcentra Ltd. is the collateral manager.

RATINGS LIST

EUR415.65 Million Floating-Rate Notes (Including EUR42.25 Million
Unrated Subordinated Notes)

Class                   Rating          Amount
                                      (mil. EUR)
X                       AAA (sf)           2.0
A-R                     AAA (sf)         235.0
B-R                     AA (sf)           46.5
C-R                     A (sf)            36.5
D-R                     BBB (sf)          23.0
E-R                     BB (sf)           18.6
F-R                     B- (sf)           11.8


ARES EUROPEAN VI: S&P Assigns 'B-' Rating to Cl. F-R Notes
----------------------------------------------------------
S&P Global Ratings assigned its credit ratings to Ares European
CLO VI B.V.'s class A-R, B-1-R, B-2-R, C-R, D-R, E-R, and F-R
notes.  An unrated subordinated class of notes initially issued
in 2013 was not redeemed and remains outstanding with an extended
maturity to match the newly issued notes.

The transaction is a reset of the already existing transaction,
which closed in 2013.

The proceeds from the issuance of these notes were used to redeem
the existing rated notes.  In addition to the redemption of the
existing notes, the issuer used the remaining funds to purchase
additional collateral and to cover fees and expenses incurred
during the reset period.  The issuer also reset key transactional
features, such as the weighted-average life and the reinvestment
period.

The ratings assigned to the notes reflect S&P's assessment of:

   -- The diversified collateral pool, which consists primarily
      of broadly syndicated speculative-grade senior secured term
      loans and bonds that are governed by collateral quality
      tests.

   -- The credit enhancement provided through the subordination
      of cash flows, excess spread, and overcollateralization.

   -- The collateral manager's experienced team, which can affect
      the performance of the rated notes through collateral
      selection, ongoing portfolio management, and trading.

   -- The transaction's legal structure, which is bankruptcy
      remote.

S&P considers that the transaction's documented counterparty
replacement and remedy mechanisms adequately mitigate its
exposure to counterparty risk under S&P's current counterparty
criteria.

Following the application of S&P's structured finance ratings
above the sovereign criteria, S&P considers the transaction's
exposure to country risk is limited at the assigned rating
levels, as the exposure to individual sovereigns does not exceed
the diversification thresholds outlined in S&P's criteria.

S&P considers that the transaction's legal structure is
bankruptcy remote, in line with S&P's European legal criteria.

Following S&P's analysis of the credit, cash flow, counterparty,
operational, and legal risks, S&P believes that its ratings are
commensurate with the available credit enhancement for each class
of notes.

Ares VI European CLO VI is a European cash flow corporate loan
collateralized loan obligation (CLO) securitization of a
revolving pool, comprising euro-denominated senior secured loans
and bonds issued mainly by European borrowers.  Ares European
Loan Management LLP is the collateral manager.

RATINGS LIST

Ratings Assigned

Ares European CLO VI B.V.
EUR362.5 Million Floating-Rate Notes Including EUR46 Million
Subordinated Notes

Class                   Rating           Amount
                                       (mil. EUR)
A-R                    AAA (sf)          208.15
B-1-R                   AA (sf)           39.25
B-2-R                   AA (sf)            5.00
C-R                      A (sf)           21.70
D-R                    BBB (sf)           17.30
E-R                     BB (sf)           20.40
F-R                     B- (sf)            4.70
Subordinated                NR            46.00

NR--Not rated.


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


CYFROWY POLSAT: S&P Affirms 'BB+' CCR & Revises Outlook to Pos.
---------------------------------------------------------------
S&P Global Ratings revised its outlook on Polish media and
telecom group Cyfrowy Polsat S.A. to positive from stable and
affirmed its 'BB+' long-term corporate credit rating.

The outlook revision reflects S&P's view that Cyfrowy will
demonstrate solid deleveraging capacity in 2017-2018, based on
S&P's projections that the company's S&P Global Ratings-adjusted
debt to EBITDA will decline to about 3.1x in 2017 and to about
2.8x by 2018 from about 3.3x in 2016.  This is supported by S&P's
anticipation of stable operating performance over the next 24
months, due to its solid position in the competitive Polish media
and telecom market and continued growth in revenue-generating
units, and somewhat offset by regulation and continued fierce
competition in the mobile segment, as well as by solid free cash
flow generation -- most of which S&P understands management would
like to use to reduce debt.  S&P expects that Cyfrowy's annual
reported free operating cash flow (FOCF) will total around Polish
zloty (PLN)1.6 billion (around US$400,000) or slightly above,
slightly higher than in 2016.  Cyfrowy's capacity to generate
FOCF will be supported by expected stable EBITDA as well as lower
interest expenses after repaying the Litenite's notes with 10%
coupon at the end of April 2017.  At the same time, S&P expects
that Cyfrowy's dividend payout will remain moderate, and
deleveraging will remain their priority.

In S&P's view, Cyfrowy's business risk profile remains supported
by its stable No. 3 position in the competitive four-player
Polish telecom market, where Cyfrowy held 25.3% market share in
terms of service revenues in 2016.  Cyfrowy is also the dominant
Polish private TV broadcaster, with around 25% of the audience,
and the leading satellite platform in Europe, providing satellite
TV services to about 3.5 million TV subscribers.  Cyfrowy's long-
term evolution (LTE) coverage is 99%, and it boasts the largest
LTE-advanced coverage in Poland of 40%.  S&P also takes into view
that Cyfrowy is one of the two operators (along with Orange
Polska) that has a convergent offer (SmartDom) in the Polish
market, as opposed to Play and T-Mobile. Cyfrowy's multiplay
strategy is particularly successful in rural areas, where there
is limited availability of cable and fixed broadband, supporting
the above-average profitability, with an adjusted EBITDA margin
of over 42%.

That said, S&P's satisfactory assessment of Cyfrowy's business
risk profile remains constrained by the concentration of the
group's operations in a single country, Poland, and by pronounced
competition, notably in the mobile market, which, in S&P's view,
would result in continued price pressure and subscriber churn.

The positive outlook reflects that S&P may raise the rating to
'BBB-' over the next 12 months if the company continues to
demonstrate resilient operating performance with at least stable
EBITDA, while using free cash flow to reduce adjusted debt to
EBITDA to below 3.0x and FOCF to debt to more than 15% by 2018.

An upgrade would hinge on the company's commitment to proactively
refinance its senior facility agreement due in 2020.

S&P could consider revising the outlook to stable if weaker
operating performance, as a result of fiercer-than-currently-
anticipated competition, results in a deterioration of Cyfrowy's
metrics.  This would lead S&P to anticipate slower deleveraging.


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


KOKS PAO: Fitch Affirms 'B' Long-Term IDR, Outlook Negative
-----------------------------------------------------------
Fitch Ratings has affirmed Russian pig iron company PAO Koks's
(the group) Long-Term Foreign- and Local-Currency Issuer Default
Ratings (IDRs) at 'B' with a Negative Outlook. Fitch has
simultaneously assigned Koks Finance DAC's up to USD500 million
proposed notes an expected senior unsecured rating of 'B(EXP)'.
Fitch will assign the notes a final rating upon receipt of final
documentation materially conforming to the information reviewed.

The Negative Outlook is driven primarily by the continuing
liquidity risk. In particular, the Fitch-calculated liquidity
ratio was 0.5x at end-2016, or 0.8x assuming multi-year revolving
credit facilities (RCFs) due 2017 are refinanced. The ratio
remains low for the current rating level although it improved
from below 0.5x throughout 2016. The group's progress with notes
placement or with lengthening bank maturities across the debt
portfolio leading to further liquidity ratio improvement by mid-
2017 would be among key factors for Outlook stabilisation.
Conversely, failure to improve liquidity, ie, the liquidity ratio
well below 1x on a sustained basis would lead to a rating
downgrade.

KEY RATING DRIVERS

KEY RATING DRIVERS

Liquidity Tight but Manageable: Fitch considers the group's
liquidity tight as Koks depends on rolling over short-term debt
and on undrawn committed facilities. The group's short-term debt
amounted to RUB24 billion at end-2016 (end-2015: RUB37 billion),
or a significant 47% of total RUB51 billion debt, largely
consisting of RCFs with annual pay-down features. Fitch treat
these as short-term despite some RCFs being multi-year lines or
having a track record of regular refinancing.

Taking into account the diversity of short-term creditors and
available undrawn long-term debt of above RUB6 billion at end-
2016, Fitch expects refinancing risk moderation to continue,
underpinned by deleveraging and potentially by the new Eurobond
placement should it succeed and materially reduce liquidity risk.

Leverage Rebasing from 2017: Fitch expects the group's funds from
operations (FFO) adjusted leverage to fall below 3x in 2017
(2016: 4.4x), underpinned by 2017 sales peaking at above RUB85
billion (2016: RUB65 billion) and the EBITDAR margin peaking at
23% (2016: 18%) on high pig iron prices and contributions from
new coal capacities.

Fitch expects leverage to rise to around 3.5x in 2018-2019 as
price moderation alongside the pig iron value chain drives
revenues back to around RUB65 billion while margins settle around
25%, supported by the newly integrated coal operations. Fitch
conservatively incorporate capex at 10%-12% of sales and RUB9
billion investing outflow to the off-balance-sheet Tula-Steel
project during 2017-2018.

Coal Self-Sufficiency Nears Completion: In 2016, the group had
self-sufficiency of nearly 70% in iron ore and 40%-45% in coking
coal. It plans to achieve full self-sufficiency in coal during
2017 as both the Tikhova mine and the second phase of Butovskaya
mine launch in April and ramp up during the year. The group plans
to complete its integration into iron ore from 2019 as KMA Ruda's
new iron ore capacity is commissioned and ramps up to 0.9mt iron
ore concentrate additional capacity by 2022.

Tula-Steel Project: Koks is developing a steel project in Russia
with two partners, DILON Cooperatif U.A. and LLC Steel, which
control the Tula-Steel project through equity interests of 67%
and 33%, respectively. All three parties are ultimately
controlled by the Zubitskiy family. The group has no equity
participation, legal ties or debt recourse to, nor does it
consolidate the Tula-Steel project. However, the group has been
the sole project investor (end-2016: RUB7 billion) excluding
Gazprombank's committed RUB30 billion project financing (end-
2016: RUB6.4 billion drawn).

Fitch conservatively assumes the group to invest the upper amount
of RUB3 billion-RUB9 billion investment range in the project in
2017-2018. Fitch note that the group might also be obliged to
fund Tula-Steel capex overruns, although the likelihood of this
decreases as the project progresses, with commissioning expected
in late 2017. Tula-Steel will produce specialty steel for the
machinery and automotive sectors, sourcing hot pig iron from
Tulachermet, a neighbouring group subsidiary.

Not Consolidated: The group may consolidate Tula-Steel once the
project's leverage moderates. Fitch do not consolidate Tula-Steel
on the lack of legal ties and the moderate strategic importance
of the project to the group. Fitch do not expects consolidation,
if realised on a non-cash basis, to worsen the group's leverage
after 2018, although the additional secured debt layer of up to
RUB30 billion might significantly affect the recoveries of senior
unsecured debtholders.

Strong Position in Pig Iron: The group is Russia's largest
merchant coke producer and the world's largest exporter of
merchant pig iron with a 17% market share. North America and
Europe are the key markets. The group specialises in commercial
pig iron and focuses on increasing its presence in premium pig
iron used in automotive, machinery and tools industries,
requiring high-purity pig iron with low sulphur and phosphorous
content.

DERIVATION SUMMARY

Koks ranks behind its closest Russian metals and mining peers
Evraz (BB-) and Metalloinvest (BB) in terms of scale, operational
diversification and share of value-added products. Koks's
financial profile, including profitability of operations and
leverage, ranks below Metalloinvest's but above that of Evraz. No
country ceiling, parent/subsidiary or operating environment
aspects affect the rating.

KEY ASSUMPTIONS

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

- Realised input-driven pig iron price increase of nearly 35% on
   2017, followed by an almost 20% reduction in 2018-2019
- Full integration in coal on ramp-up of new Butovskaya and
   Tikhova coal capacities in 2017
- Average USD/RUB rate of 61 in 2017 with gradual rouble
   appreciation towards 58 in 2019
- Capex/sales of 10%-13% and no dividends during 2017-2019
- RUB9 billion funding contribution to non-consolidated Tula-
   Steel in 2017-2018

RATING SENSITIVITIES

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

- (Outlook Stabilisation) Adequate liquidity position and
   successful refinancing leading to a liquidity ratio at or
   above 1x on a sustained basis, coupled with FFO-adjusted gross
   leverage of below 4x from 2017 onwards

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

- Tighter liquidity and higher refinancing risk with the
   liquidity ratio at well below 1x by mid-2017
- Market deterioration or new coal capacity underperformance
   leading to FFO-adjusted gross leverage above 4x
- FFO fixed charge falling to below 2.0x (2017E: 2.7x)

LIQUIDITY

Liquidity Tight but Manageable: The group's liquidity relies on
its ability to roll over short-term debt and on undrawn committed
facilities. Its short-term debt amounted to RUB24 billion at end-
2016 (end-2015: RUB37 billion), or a significant 47% of total
RUB51 billion debt, largely consisting of RCFs with annual pay-
down features. Fitch treat these as short-term despite some RCFs
being multi-year lines or having a track record of regular
refinancing.

FULL LIST OF RATING ACTIONS

PAO Koks

- Long-Term Foreign-Currency IDR of 'B' affirmed; Outlook
   Negative
- Long-Term Local-Currency IDR of 'B' affirmed; Outlook Negative
- Short-Term IDR of 'B' affirmed

Koks Finance DAC

- Senior unsecured rating for Eurobond issue due in 2018 of
   'B'(RR4) affirmed
- Senior unsecured expected rating for the prospective notes
   assigned at 'B(EXP)'


KOKS PJSC: Moody's Puts B3 CFR on Review for Upgrade
---------------------------------------------------
Moody's Investors Service has placed the B3 corporate family
rating (CFR) and B3-PD probability of default rating (PDR) of
PJSC KOKS on review for upgrade. Moody's has also placed on
review for upgrade the B3 senior unsecured rating assigned to the
existing $201 million loan participation notes issued by KOKS
Finance D.A.C. Concurrently, Moody's has assigned a provisional
(P)B2 senior unsecured rating to the proposed notes of up to $500
million to be issued by KOKS Finance D.A.C. Pending the
conclusion of the review for upgrade on the ratings, the outlook
is also under review.

The rating of the new notes is provisional. Moody's will conclude
the review for upgrade of KOKS's ratings and assign a definitive
rating to the new notes upon completion of the issuance of the
new notes, confirmation of the use of proceeds and review of the
final notes' documentation and capital structure at closing.
Definitive ratings may differ from provisional ratings.

RATINGS RATIONALE

  -- REVIEW FOR UPGRADE --

The placement of KOKS's ratings on review for upgrade reflects
Moody's expectation that the company's liquidity will materially
improve if it successfully completes the announced transaction,
which comprises a tender offer for $201 million in outstanding
notes due 2018 and the concurrent placement of the proposed long-
term notes of up to $500 million.

If the transaction completes in line with Moody's expectations,
such that the company had sufficient liquidity to cover its debt
maturities and other obligations over at least the next 12-18
months, Moody's would likely upgrade KOKS's ratings by one notch
to B2.

As of March 31, 2017, KOKS's liquidity comprised $66 million in
cash and equivalents; $23 million in available committed credit
facilities maturing beyond the following 12 months (excluding $69
million earmarked for financing a specific capex project); and
more than $250 million in operating cash flow, which Moody's
expects the company to generate over the following 12 months.
This level of liquidity is weak because it would cover the
company's debt maturities and other obligations (excluding capex
covered by a dedicated available loan) only until the end of
2017.

Moody's expects that KOKS will use the entire proceeds from the
new placement of up to $500 million in notes to refinance its
existing debt, including part of its short-term debt and the $201
million in outstanding notes maturing in December 2018. As a
result, the company would improve its liquidity, reduce its
refinancing risks, and extend its debt maturity profile.

Aside from liquidity considerations which constrain the ratings,
Moody's continues to view KOKS as a fundamentally solid business,
owing to its low-cost position, geographic diversification of
sales, improving product mix, robust projected financial metrics,
and positive free cash flow.

KOKS's ratings take into account (1) the company's status as one
of the leading merchant pig iron producers globally, with a
fairly diversified customer base and geography of sales; (2) its
low-cost position, owing to the weak rouble and operational
enhancements; (3) Moody's expectation that its leverage and
interest coverage metrics will improve over the next 12-18
months, owing to higher average coking coal and pig iron prices,
and also the anticipated commissioning of the Tikhova and
Butovskaya mines in Q2 2017, which the company estimates will
increase its consolidated EBITDA by more than 70% after their
ramp-up by 2019; (4) KOKS's significant degree of vertical
integration, with a 50% and 71% self-sufficiency in coking coal
and iron ore, respectively; and (5) positive free cash flow
generation.

The ratings also factor in the company's (1) small scale and
limited operational and product diversification, although these
factors will improve after the commissioning of the Tikhova and
Butovskaya mines; (2) exposure to the volatile prices for steel
and feedstock; (3) debt-financed expansionary capex program; and
(4) concentrated ownership-related risks, with significant loans
provided to related parties.

   -- SENIOR UNSECURED RATING ASSIGNMENT --

The (P)B2 senior unsecured rating assigned to KOKS Finance's
proposed notes is one notch above the company's current CFR of
B3, which reflects Moody's expectation that if KOKS successfully
places the new notes and improves its liquidity, the rating
agency will upgrade by one notch the CFR and PDR as well as the
senior unsecured rating assigned to the existing notes, should
they remain outstanding.

The proposed notes' rating also factors in Moody's estimation
that (1) the notes will rank pari passu with the other senior
unsecured obligations of KOKS's group; and (2) less than 20% of
KOKS's consolidated debt is secured with assets. If the share of
secured debt were to be materially higher, the unsecured notes
could be rated below the CFR because of their subordination to a
substantial amount of secured debt.

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Global Steel
Industry published in October 2012.

PJSC KOKS is a Russia-based producer of coking coal, coke, iron
ore and pig iron. In 2016, the company produced 2.2 mt of pig
iron; 2.8 mt of coke; 2.6 mt of coking coal concentrate; and 2.2
mt of iron ore concentrate. In 2016, it generated revenues of
RUB64.5 billion (2015: RUB53.6 billion) and Moody's-adjusted
EBITDA of RUB12.9 billion (2015: RUB12.7 billion). KOKS is
majority-owned by the Zubitsky family, which holds an 86% stake
in the company.


KOKS PJSC: S&P Puts 'B-' CCR on CreditWatch Positive
----------------------------------------------------
S&P Global Ratings said that it had placed its 'B-' long-term
corporate credit rating on Russia-based vertically integrated
coking coal, coke, iron ore, and pig iron producer KOKS PJSC on
CreditWatch with positive implications.

S&P also assigned its 'B-' issue rating to the company's proposed
senior unsecured bond and placed it on CreditWatch positive.

The CreditWatch placement follows the announcement by KOKS that
it is going to place a senior unsecured Eurobond of up to
$500 million.  The company intends to use the proceeds to repay
currently outstanding short-term maturities, including an
existing $200 million Eurobond.  S&P therefore anticipates a
potential meaningful improvement in KOKS' liquidity and capital
structure, which could support an upgrade to 'B'.

S&P's forecast incorporates the expectation that KOKS will
refrain from using the bond's proceeds for large acquisitions of
noncore assets or financing current noncore assets.  Moreover,
S&P do not forecast that KOKS will make dividend payments from
the proposed debt proceeds.

S&P equalizes the rating on the proposed bond with the corporate
credit rating, since S&P assumes that KOKS will refinance part of
its secured debt with the proceeds from the new bond and the
amount of priority debt will be limited.

If S&P did not take into account KOKS' liquidity, S&P thinks its
business risk and leverage justify a higher rating, given
currently supportive prices, a relatively low cost base, and high
self-sufficiency in raw materials.  Self-sufficiency will likely
further strengthen with the launch of the Tikhova mine and the
second stage of the Butovskaya mine (both expected in the second
quarter of 2017).

The rating is at the same time constrained by the high volatility
of the prices of coal, coke, and pig iron, as well as limited
diversity of the product mix and the company's track record of
aggressive liquidity management.  Furthermore, S&P notes KOKS'
aggressive financial policy, notably noncore asset investments,
such as involvement in the steel project OOO Tulachermet-Stal,
which is currently not part of the group, or the hotel
acquisition that became part of the group in 2016.

S&P expects to resolve the CreditWatch within the next two
months. S&P will reassess KOKS' liquidity and capital structure
after it issues the bond and refinances the short-term
maturities.  At this stage, S&P believes that we would raise the
rating on KOKS if the company issues about $400 million or more
of long-term bonds, as, in that case, its liquidity should
improve meaningfully.

S&P could affirm the rating at 'B-' if KOKS fails to issue the
bond or if the issued amount is significantly below S&P's
expectations.  At the same time, S&P currently do not think that
the inability to issue the bond will result in a downgrade,
because the company is working on alternative sources of
financing, which, coupled with positive free cash flow
generation, should allow KOKS to continue rolling over its bank
lines.


NATIONAL FACTORING: S&P Raises Counterparty Credit Rating to 'B'
----------------------------------------------------------------
S&P Global Ratings revised its outlook on Russia-based National
Factoring Co. (NFC) to stable from negative.  S&P also raised its
short-term counterparty credit rating on NFC to 'B' from 'C', and
removed this rating from "under criteria observation", where it
was placed on April 7, 2017, following the revised global
methodology for linking long-term and short-term ratings.  S&P
affirmed its 'B' long-term counterparty credit rating on NFC.

S&P also raised its Russia-national scale rating on NFC to 'ruA-'
from 'ruBBB+'.

The outlook revision reflects S&P's view that downside risks to
NFC's financial profile are abating. In 2016, NFC's asset quality
improved quicker than S&P expected, reflecting broad
stabilization in the Russian economy, as well as company-specific
developments, such as the recovery of a large legacy problem
loan, lack of new large nonperforming loan (NPL) exposure, and
overall portfolio growth.  New loss provisions declined to 1.7%
in 2016 versus 5.3% in 2015, while NPLs reduced to 7.4% (versus
10.6% in 2015).  S&P also observes an improvement in the quality
of new vintages originated in 2016 and 2017 versus those provided
earlier. Therefore, S&P expects this trend in asset quality
improvement will continue in 2017, supported by conservative
underwriting standards, good diversification, and short-term
nature of its factoring portfolio, which de facto limits the loss
in case of default, and insurance of large non-recourse risks.

S&P notes that NFC remains highly dependent on funding provided
from its sister BANK URALSIB and other related parties.  As of
Dec. 31, 2016, about 70% of funding came from BANK URALSIB
(versus 56% in 2015), while the overall funding profile remains
predominantly short term.  In S&P's view, this concentrated
wholesale funding represents a risk for NFC in the long term.
S&P believes, however, that midterm refinancing risks are low at
the moment, given S&P's view that BANK URALSIB will continue
providing ongoing funding support to NFC, given that NFC and BANK
URALSIB remain highly related.

S&P notes that NFC's factoring portfolio remains mainly short
term in nature, with average turnover of 61 days in 2016.  In
S&P's view, the rapid turnover of NFC's portfolio will continue
to support its liquidity position and will enable it to quickly
accumulate liquidity under a stress scenario.

In 2016, Vladimir Kogan, a wealthy Russian individual, received
operational control of NFC from the former owner of BANK URALSIB,
Nikolay Tsvetkov.  Since then, S&P has not seen material changes
in NFC's business model.  The new strategy, however, implies
higher business expansion and greater focus on cost control.

In S&P's view, NFC's current capital buffer will likely remain
adequate to support planned growth.  S&P expects that capital
adequacy measured by its risk-adjusted capital ratio will be in
the range of 7.6%-8.2% in the next 12-18 months versus 9.1% as of
Dec. 31, 2016.  At the same time, S&P expects that NFC's earnings
capacity will remain constrained by low operational efficiency
and declining net interest margins, while internal capital
generation will lag behind its asset growth.  S&P therefore
believes that NFC's capital position could deteriorate, but will
not likely put pressure on the ratings in the next 12-18 months,
unless growth materially exceeds S&P's forecast.

S&P raised the short-term rating to 'B' because of its updated
criteria.

The stable outlook reflects S&P's view that NFC's asset quality
will continue to gradually improve in the next 12 months amid
more supportive economic conditions in Russia and thanks to the
company's conservative approach to risk management.

It also reflects S&P's expectations that high dependence on
funding provided from related parties will not weigh on the
stability of NFC's funding profile, while the company will
maintain adequate capital buffers over the forecast period.

S&P could revise the outlook to negative in the next 12 months if
S&P sees that growth of NFC's factoring portfolio exceeds S&P's
expectations and leads to increased pressure on the company's
capital adequacy.  Relaxation of underwriting standards or
difficulties in extending its short-term funding may also prompt
S&P to revise the outlook to negative.

A positive rating action is remote in S&P's view.  S&P would
consider revising the outlook to positive if NFC diversifies its
funding profile by term and counterparty, but S&P believes it
will take time.


OSTANKINO DAIRY: Vozrozhdeni Files Bankruptcy Petition
------------------------------------------------------
Interfax-Ukraine reports that the Russian bank Vozrozhdenie filed
an application to the Moscow Arbitration Court on March 28 to
declare bankrupt the Ostankino Dairy Plant (Moscow), part of the
Milkiland Group with assets in Ukraine, in Russia and Poland.

According to the "Milkilenda" on the website of the Warsaw Stock
Exchange, the petition was filed in connection with the inability
for the company to pay back the debt to the bank in the amount of
RUR309.2 million, Interfax-Ukraine relates.

The court appointed the beginning of the hearing on April 26,
Interfax-Ukraine states.

Meanwhile, Milkiland NV, the holding company of the Milkiland
Group, which is the sole owner of the combine, initiated the
voluntary liquidation of JSC "Ostankinsky Dairy Plant" on
April 3, 2017 and appointed Lyudmila Lovenetsky as the liquidator
of the company, Interfax-Ukraine recounts.

To ensure the continuity of the plant's activities, a new legal
entity was created -- OOO Ostankinsky Dairy Plant, a 100%
subsidiary of the Milkiland Group, Interfax-Ukraine states.  The
new legal entity will be responsible for servicing contracts with
suppliers and customers of the group in Russia, Interfax-Ukraine
discloses.

Bank Vozrozhdenie was ranked 34th among Russian banks by the size
of assets in the ranking of Interfax-100 in 2016.


PERESVET JSC: Russia Regional Development Bank to Manage Rescue
---------------------------------------------------------------
Jake Rudnitsky at Bloomberg News reports that a lender controlled
by Russia's state-owned oil giant will manage the rescue of
Peresvet JSC as the central bank experiments with a new strategy
to reduce the cost of saving troubled financial institutions.

According to Bloomberg, the Bank of Russia said in a statement on
April 19 Rosneft PJSC's Russia Regional Development Bank, known
as VBRR, will receive RUR66.7 billion (US$1.2 billion) in loans
to help the lender Peresvet avoid bankruptcy.

As part of the deal, more than 70% Peresvet bondholders agreed to
convert RUR69.7 billion rubles into low-yield subordinated debt,
Bloomberg relays, citing the regulator.

The head of Rosneft, Igor Sechin, is also chairman of one of
Peresvet's creditors, state-run power utility Inter RAO UES PJSC,
which said on April 18 that it agreed to convert debt into
Peresvet capital with a nominal value of up to RUR4.76 billion,
Bloomberg notes.

An audit by the central bank and Russia's Deposit Insurance
Agency found a RUR104 billion hole in Peresvet's balance sheet,
Bloomberg discloses.


                            *   *   *

As reported by the Troubled Company Reporter-Europe on April 3,
2017, S&P Global Ratings affirmed its 'D/D' long- and short-term
counterparty credit ratings and its 'D' Russia national scale
rating on JSCB Peresvet Bank.  At the same time, S&P affirmed its
'D' ratings on the bank's senior unsecured debt.  S&P
subsequently withdrew all ratings at the bank's request.

At the time of the withdrawal, S&P's ratings on Peresvet Bank
reflected the bank's inability to honor its obligations on time
and in full.

On Oct. 21, 2016, the Central Bank of Russia announced the
appointment of a temporary administration of Peresvet Bank and
imposed a payment moratorium, citing the bank's failure to meet
creditors' claims for more than seven days.  S&P subsequently
lowered the ratings on Peresvet Bank to 'D' on Oct. 24, 2016.


PHOSAGRO BOND: Moody's Assigns Ba1 Rating to Proposed Sr. Notes
---------------------------------------------------------------
Moody's Investors Service has assigned a Ba1 rating with a loss
given default assessment of LGD4 to the proposed senior unsecured
USD loan participation notes (LPNs) to be issued by, but with
limited recourse to, PhosAgro Bond Funding Limited (Ba1 stable),
a company incorporated as a designated activity company under the
laws of Ireland.

The outlook on the ratings is stable.

PhosAgro Bond Funding Limited will issue the notes for the sole
purpose of financing a loan to PJSC PhosAgro (PhosAgro, Ba1
stable), pursuant to a loan agreement between the two companies.
The loan will be additionally guaranteed by PhosAgro's major
operating subsidiaries, JSC Apatit and JSC PhosAgro-Cherepovets
(both unrated), which account for more than 80% of the group's
consolidated revenue, EBITDA and assets.

Moody's expects that the issuance proceeds will be primarily used
for repayment of part of PhosAgro's existing bank debt.

RATINGS RATIONALE

The notes' rating of Ba1 is at the same level as PhosAgro's
corporate family rating (CFR), which reflects Moody's assumption
that the notes will rank pari passu with other unsecured and
unsubordinated obligations of PhosAgro's group, including the
Ba1-rated outstanding $500 million LPNs due February 13, 2018 of
PhosAgro Bond Funding Limited.

Moody's expects that the issuance proceeds will be mostly used
for early repayment of part of the group's existing bank debt
maturing in 2017-20. Therefore, the new notes placement will not
materially increase PhosAgro's leverage.

PhosAgro's Ba1 CFR reflects a high degree of robustness in its
financial profile, supported by (1) PhosAgro's significant global
market presence and focus on premium priced fertilizers; (2)
self-sufficiency in key raw materials and respectively low cost
base, leveraged by the weak rouble, and securing high margins
through the cycle; and (3) solid liquidity.

The CFR is constrained by PhosAgro's exposure to Russia's
macroeconomic environment and is at the same level as Russia's
sovereign rating and the foreign-currency bond country ceiling of
Ba1.

PhosAgro remains exposed to Russia's environment, despite the
significant contribution of exports to revenue (70%), given that
all company's production facilities are located within Russia.

In addition, the company's rating factors in its susceptibility
to the cyclical nature of the fertilizer industry, which is
heightened by its concentration in phosphate fertilizers and its
smaller size when compared to its global peer group.

RATIONALE FOR THE STABLE OUTLOOK

The stable outlook on PhosAgro's ratings factors in (1) the
stable outlook on Russia's sovereign rating and the positioning
of the country's sovereign ceiling; and (2) PhosAgro's solid
intrinsic credit quality.

WHAT COULD CHANGE THE RATINGS UP/DOWN

Moody's could consider upgrading PhosAgro's ratings if Moody's
was to upgrade Russia's sovereign rating and/or raise the
foreign-currency bond country ceiling, provided that there is no
material deterioration in operating conditions or company-
specific factors, and PhosAgro's largest upcoming Q1-2018 debt
maturity is fully addressed.

The ratings are likely to be downgraded if (1) there is a
downgrade of Russia's sovereign rating and a lowering of the
foreign-currency bond country ceiling; (2) the company's
liquidity profile deteriorates; and/or (3) the company fails to
deliver adjusted RCF/debt above 15% and adjusted debt/EBITDA
below 3x on a sustainable basis.

PRINCIPAL METHODOLOGY

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

Headquartered in Moscow, PhosAgro is a holding company of a group
of chemical companies engaged in the manufacture of phosphate and
complex fertilizers. In 2016, PhosAgro generated sales of
RUB187.7 billion ($2.8 billion) and adjusted EBITDA of RUB73.6
million ($1.1 billion).

The company generates nearly a third of its revenues from the
Russian market, whilst deriving the remainder from exports to 100
countries. It is ultimately controlled by Mr. Andrey Guriev and
his family members, who have a voting stake of 48.48%.


PHOSAGRO BOND: Fitch Rates Proposed USD500MM Notes 'BB+(EXP)'
-------------------------------------------------------------
Fitch Ratings has assigned PhosAgro Bond Funding Designated
Activity Company's proposed USD500 million issue of loan
participation notes (LPNs) an expected senior unsecured rating of
'BB+(EXP)'. Fitch will assign the notes a final rating upon
receipt of final documentation materially conforming to the
information reviewed.

The proposed LPNs have major terms and conditions identical to
the outstanding USD500 million LPNs due 2018 ('BB+'). Both
proposed and outstanding issues are structured in the form of a
loan from the issuer, Phosagro Bond Funding Designated Activity
Company, an Ireland-based private limited liability company, to
the borrower, PJSC PhosAgro (Phosagro) (BB+/Positive), pursuant
to the terms of a loan agreement. Operating companies, JSC Apatit
and JSC PhosAgro-Cherepovets, will provide irrevocable and
unconditional guarantees for the obligations of PJSC PhosAgro
under the loan.


KEY RATING DRIVERS

Key Terms of Notes: The proposed notes will be used to refinance
the existing floating-rate debt of PhosAgro as well as for
general corporate purposes. They contain covenants similar to the
outstanding notes', including negative pledge, pari passu, cross
default, a covenant fall-away clause under investment-grade
status, and no financial covenants.

Positive Outlook: The Positive Outlook reflects Fitch's
expectation of PhosAgro reaching its positive FFO net adjusted
leverage guideline of 1.5x by 2019 following the completion of
its expansion capex programme. This is underpinned by PhosAgro's
strong market position and market-leading cost competitiveness,
which continues to support its strong cash generation capacity
and allows it to reduce leverage at a time of low fertiliser
prices and moderate capex.

Phosphate Pricing Bottoming Out: Phosphate fertiliser prices
dropped by 25%-30% during 2016. Fitch Ratings expects diammonium
phosphate (DAP) pricing to have bottomed out as additional
capacity from Office Cherifien des Phosphates (OCP, BBB-
/Negative) and Ma'aden (not rated) is offset by capacity
reduction in China, and because of feedstock (ammonia) price
increases and robust demand. Fitch however sees the longer-term
DAP price increase being limited despite feedstock price
increases. This is due to low global operating rates higher up
the cost curve as well as due to the flattening of the global
cost curve driven by the new capacity.

Urea Pricing Modest Recovery: Urea pricing reached a trough in
mid-2016 and has been increasing since 4Q16 into 2017. An
increase in coal prices is driving up Chinese urea producers'
costs, and as a result there is a tightening in the regional
supply/demand balance, reinforced by a build-up of inventory
ahead of the spring application season. In addition, tighter
domestic pricing and low operating rates in China leading to
China exporting less urea suggest an increase in urea prices,
aided by a moderation in post-2017 global urea capacity
additions.

Strong Performance Despite Pressure: PhosAgro's credit profile
has remained strong during the ongoing broad market pressure if
compared to those of its peers like Mosaic (BBB-/Stable) due to
the rouble depreciation having pushed it to the first position on
the DAP cash cost curve since 2015, as the majority of its costs
are rouble-denominated. PhosAgro also has a smaller capex
programme than peers such as OCP, which peaked in 2016 and which
will be reduced after 2016 as it completes its 760kt ammonia and
500kt urea plants, as well as mining and beneficiation capex.

Capex Moderate After 2018: PhosAgro's capex will remain
significant over 2017 and 2018 as it aims to further secure its
raw material supply and attain full vertical integration through
the construction of new low-cost ammonia and urea plants in
Cherepovets, expansion at the Kirovsk phosphate mining site and
further efficiencies in its production lines. Most projects are
close to completion, with expectations that capex will normalise
at a level considerably below the company's target of 50% capex
to EBITDA after 2018.

Commitment to Reduce Leverage: Management has a publicly
announced target to de-lever to 1x net debt/EBITDA, which it came
close to reaching in 2015 after paying back debt and posting
record earnings. The company deviated from the target in 2016 due
to the fertiliser price fall combined with the temporary capex
peak and a dividend payout that was linked to the previous year's
strong performance. Large capex projects will come to an end in
2017 and with prices expected to bottom out at current levels,
Fitch forecasts PhosAgro will be able to achieve its positive
guideline after 2018 and foresees a general reduction in leverage
over the rating horizon.

A combination of dividend policy (up to 50% of net income) and
capex policy (up to 50% of EBITDA) would translate into neutral
free cash-flow generation and an ability to stay at a targeted
leverage level given broadly stable fertiliser and FX markets.
However, significant market volatility, similar to that in 2015-
2016, may translate into a deviation from the company's
commitment to reduce leverage. Remedial measures such as a
temporary dividend and/or a capex cut would become critical to
the company's ability to revert to the targeted leverage level
within a reasonable period.

DERIVATION SUMMARY

PhosAgro's 'BB+' rating corresponds to a 'BBB' standalone rating
excluding the two-notch corporate governance discount, which is
the highest rating amongst all Fitch-rated fertiliser companies.
This reflects PhosAgro's strong operational cash-flow generation,
which largely covers its capex and dividends, as well as
operations being in the first quartile of the global phosphate
fertilisers cost curve. Its phosphate peers include OCP
(BBB-/Negative) and Mosaic (BBB-/Stable). Both leveraged at over
4x on low fertiliser pricing and are expected by Fitch to
deleverage towards 3x over the rating horizon as OCP completes
its capex programme and Mosaic deleverages after its acquisition
of Vale's fertiliser assets.

PhosAgro's Russian peers include EuroChem (BB/Negative) and
Uralkali (BB-/Negative), both on Negative Outlook. EuroChem is
facing low fertiliser prices and is expected to reduce leverage
after its 2017 capex peak as its potash projects come online.
Uralkali's 2015-2016 share buybacks, amidst low fertiliser
pricing, are driving its Negative Outlook. The ability to reduce
leverage in a depressed price environment is key in current
market circumstances.

No Country Ceiling, parent/subsidiary or operating environment
aspects impact the rating.

KEY ASSUMPTIONS

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

- DAP/MAP FOB Tampa to average at USD330/t in 2017-2018 before
   moving up to USD350/t by 2020;
- USD/RUB forecast to move from 61 in 2017 towards 57 in 2020;
- dividend payout assumed to moderate at 40% in 2017 before
   increasing towards 50% in 2019-2020;
- post 2017 positive FCF leading to debt reduction and FFO
   adjusted net leverage at or below 1.5x.


RATING SENSITIVITIES

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

- Post-2017 positive FCF leading to debt reduction and FFO
   adjusted net leverage at or below 1.5x
- Evidence of moving towards management's leverage target of net
   debt-to-EBITDA of 1x

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

- FFO adjusted net leverage sustainably at or above 2.5x
- EBITDAR margin sustainably below 20%

LIQUIDITY

Liquidity Healthy: PhosAgro maintained strong liquidity
throughout 2016 as its end-2016 short-term debt of RUB14 billion
is comfortably covered by cash cushion (RUB7 billion) and undrawn
committed banking facilities (RUB96 billion) while Fitch
expectations of positive free cash-flow generation in 2017 add
comfort to the issuer's liquidity level.


* RUSSIA: Amends Provisions of Bankruptcy, Liquidation Procedures
-----------------------------------------------------------------
Sergei Blagov at Bloomberg BNA reports that Russian authorities
have amended provisions of the country's legislation applicable
to bankruptcy and liquidation procedures.

President Vladimir Putin signed Federal Law No. 68-FZ to amend
provisions of the Code on Administrative Offenses, Bloomberg BNA
relays, citing the presidential press-service's statement.

It said the new law revises procedures to remove businesses from
the national company register following bankruptcy and
liquidation of these businesses, Bloomberg BNA notes.
According to Bloomberg BNA, the statement said under the law,
businesses removed from the Unified State Register of Legal
Entities due to insolvency are no longer liable for earlier
administrative penalties.



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


MHP SA: S&P Puts 'B-' CCR on CreditWatch Positive
-------------------------------------------------
S&P Global Ratings said that it placed its 'B-' local and foreign
currency long-term corporate credit ratings on Ukraine-based
farming group MHP S.A. on CreditWatch with positive implications.

S&P also placed its 'B-' issue rating on MHP's unsecured bonds on
CreditWatch positive, given that the issue rating will likely
remain aligned with the corporate credit rating on MHP.

In addition, S&P assigned a 'B' issue rating to the proposed
Eurobond issuance.

The CreditWatch placement reflects MHP's announcement on April
18, 2017, that it plans to issue a new Eurobond.  S&P understands
that MHP will use the proceeds of the issuance to repay long- and
short-term debt.  Moreover S&P understands that the group is
currently negotiating a long-term upsized pre-financing export
facility (PFX) with its banks.

This will considerably reinforce the group's liquidity, which
would allow S&P to remove the negative adjustment for its
liquidity assessment that currently caps the group's stand-alone
credit profile (SACP) at the 'b-' level of the long-term foreign
currency rating on Ukraine.  Upon completion of the proposed
issuance, S&P would reassess the group's overall credit quality
under its methodology for rating issuers above the sovereign,
given that its SACP would be higher than the level of the long-
term foreign currency rating on Ukraine.

The CreditWatch positive reflects S&P's opinion that there is a
50% likelihood that MHP will successfully place the instrument
and use its proceeds to redeem most of its short-term debt,
paving the way for it to pass all our stress-test requirements
under S&P's methodology for rating issuers above the sovereign.

MHP operates in a volatile agricultural industry and faces high
risk from operating in Ukraine, which leads to S&P's current
business risk assessment.  However, S&P has revised up its
competitive position assessment, given that the group's strong
portfolio of land leases acts as competitive advantage, as does
its established position as a systemically important food
producer and exporter.  Moreover, the group's unique vertically
integrated business model allows it to deliver best-in-class
operating margins while mitigating the volatility of
profitability.

Margins are supported by MHP's self-sufficiency in procuring
feedstock through its grains division and a very effective
cluster structure, in which farms and processing facilities are
near each other, allowing significant reduction in transportation
costs.

The group's increasing portion of export sales is another credit-
positive factor because it increases MHP's access to hard
currency, mainly U.S. dollar.

On the other hand, the group's relatively small size (compared
with global players in the agri-commodity industry, such as ADM,
Bunge, Cargill, and Louis Dreyfus), and a limited product
diversification (with poultry's division accounting for 65% of
EBITDA) could be viewed as the main factors capping S&P's current
competitive position assessment at fair.

Despite MHP's debt-to-EBITDA ratio likely remaining around 2.5x-
3.0x over the next two years, with an EBITDA interest coverage of
about 3.5x-4.0x, S&P assess MHP's financial policy as a negative
credit factor because management has large planned investments,
while capital expenditures (capex) are usually maintained above
10% of sales, which puts pressure on free cash flow generation.
As a result S&P believes that free cash flow generation could be
hampered in 2017 by large capex in to fund additional capacity at
the Vinnytsia facility.  Moreover, S&P believes that the group
has an appetite for external growth.

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

   -- Strong revenue increase of about 10% in 2017, mainly
      supported by new contracts in the Middle East and North
      Africa region for poultry's division, despite expected
      lower revenues for the grains division, mainly owing to
      lower volumes harvested than in 2016 and still low global
      prices.

   -- A reported EBITDA margin of about 33% in 2017 and in 2018.

   -- Annual capex of $130 million in 2017 and $150 million in
      2018.

   -- Dividend of about $80 million, in line with previous years.

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

   -- Adjusted debt to EBITDA of 2.6x on a five-year weighted-
      average basis in 2017-2019.

   -- Five-year weighted average adjusted EBITDA interest
      coverage of more than 4.0x.

S&P plans to resolve the CreditWatch after MHP places the
proposed Eurobond.  S&P will likely raise the corporate credit
rating on the group by one notch and align the issue rating on
the group's 2020 bond with the corporate credit rating.  An
upgrade will also be contingent on the group's ability to
successfully pass S&P's stress test, implying an enhanced
liquidity assessment stemming from a reduction of the group's
outstanding amount of short-term debt.


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


ASHTEAD GROUP: S&P Raises CCR to 'BB+' on Strong Performance
------------------------------------------------------------
S&P Global Ratings said it has raised its long-term corporate
credit rating on U.K. industrial equipment hire group Ashtead
Group PLC to 'BB+' from 'BB'.  The outlook is stable.

At the same time, S&P raised its issue ratings on the company's
$900 million and $500 million second-lien notes to 'BBB-' from
'BB+'.  The recovery rating is unchanged at '2', reflecting
substantial recovery (70%-90%; rounded estimate: 75%) in the
event of a default.

The upgrade reflects Ashtead's strong operating performance
driven by favorable markets and prudent financial policy,
resulting in solid profitability and our expectation of positive
cash flow generation in the next two years.  It is also based on
S&P's expectation that Ashtead will maintain credit metrics in
line with the rating, with funds from operations (FFO) to debt
above 45% and debt to EBITDA below 2.0x in the next two years.
S&P has therefore revised its assessment of the company's
financial risk profile to intermediate from significant.

Ashtead's operating performance has been consistently resilient
over the last five years.  The equipment rental industry has been
enjoying positive trends, with the nonresidential construction
market remaining strong in the U.S. and U.K.  Moreover, an
ongoing shift toward renting has provided for additional
equipment market penetration and allowed the company to
strengthen its positions on the U.S. market.  The company has
been able to expand sales significantly to GBP3.5 billion (S&P's
estimate for fiscal 2018) compared to sales of about GBP1 billion
in 2011.  This has enabled the company to expand margins each
year maintaining above average EBITDA margins for the industry.
S&P expects it will continue to post a resilient EBITDA margin
over the next few years in the range of 48%-49% on the adjusted
basis.  S&P also expects Ashtead to deliver return on capital of
about 18%.

Ashtead's capital expenditure (capex) remains elevated to grow
its business and take advantage of favorable market conditions.
Due to the strong margin expansion, S&P now thinks that Ashtead
will be able to generate positive free operating cash flows
(FOCF) in fiscal 2018 and 2019.  Additionally, Ashtead has
entered a two-to-three year phase where replacement capex will be
lower as Ashtead is mainly replacing fleet bought in 2009, 2010,
and 2011 -- when capital expenditure was low at the bottom of the
cycle.  Moreover, S&P expects it to continue to prudently manage
its balance sheet. Despite S&P's expectation that the company
will continue to make bolt-on acquisitions and pay dividend and
repurchase shares, S&P expects its leverage to remain in line
with the company's public guidance of debt to EBITDA of 1.5x-
2.0x.

S&P's view of Ashtead's business risk profile is supported by the
group's strong market position in the fragmented U.S. market, and
the scale of its operations, which enhances its purchasing power
with suppliers.  S&P also views positively Ashtead's strong
profitability, which is supported by a competitive average
utilization rate -- 72% for the nine months to Jan. 31, 2016 --
and a fairly low average fleet age.  S&P also considers that the
company has a fairly flexible business model that allows capex to
be lowered during industry downturns.  This was evident from its
ability to reduce its exposure to the oil and gas markets during
the recent downturn.  The company managed to dispose of oil and
gas assets while further diversifying in growing markets such as
event management.  However, the high capital intensity of the
equipment rental sector, the cyclicality of its end-markets--
mainly nonresidential construction--as well as its limited
geographic diversity are factors that constrain S&P's business
risk assessment.

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

   -- Real GDP growth in the U.S. of 2.3% in 2017 and 2.4% in
      2018.

   -- Revenue growth of 13%-15% in fiscal 2018 and 7%-9% in
      fiscal 2019, driven by a supportive macroeconomic
      environment, as well as increasing demand for equipment
      rental, which provides higher market penetration while
      customers adhere to outsourced model.  S&P expects this to
      be realized via same-store growth, green-fields and a
      moderate amount of mergers and acquisitions.

   -- Reported EBITDA margin above 48%-49% in fiscal 2018 and
      2019, driven by strong margins of close to 50% at Sunbelt.

   -- Capex of GBP1.0 billion in fiscal 2018, partly offset by
      GBP100 million in disposal proceeds.

   -- Positive FOCF in fiscal 2018 supported by growth in
      margins.

   -- Acquisitions of above GBP200 million in 2018, slightly
      decreasing thereafter.

   -- Cash-tax rate of 6%-7% for 2017, 28%-32% for 2018, and 34%-
      36% for 2019, depending on the level of capex.

   -- Increasing dividend outflows, in line with earnings, of
      about GBP135 million in fiscal 2018.

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

   -- FFO to debt of about 45%-50% for fiscal 2018 and 2019.
   -- Debt to EBITDA of 1.5x-2.0x for fiscal 2018 and 2019.

The stable outlook reflects S&P's expectations that Ashtead will
continue to cement its positions in the U.S. and the U.K.,
maintaining robust operating performance over the next 12 months
thanks to favorable markets.  This should result in the FFO to
debt above 45% and debt to EBITDA below 2.0x.  S&P also
anticipates that Ashtead will balance the level of capital
investments with cash flow generation, and maintain stable EBITDA
margins.  Positive FOCF would also be a supportive factor.

S&P could lower our ratings if Ashtead's operating performance
deteriorates or if an unexpected increase in fleet capex,
dividend payout, or acquisition occurs.  More specifically, we
would consider a downgrade if the company revised its internal
leverage policy upward or failed to adhere to its leverage target
on a consistent basis without expectation of recovery.  S&P could
also lower the ratings if the company continuously generates
negative FOCF or consistently falls below our expectation of debt
to EBITDA above 2x and FFO to debt below 45%.

Although unlikely, S&P would consider an upgrade if Ashtead
tightened its leverage targets and exhibited adjusted debt to
EBITDA below 1.5x and FFO to debt well above 60% on a consistent
basis.  An upgrade would also depend on the company balancing the
level of capital investments with cash flow generation.


CARD LAND: In Liquidation, Store Closes
---------------------------------------
Edwin Lawrence at Daily Record reports a shop has dramatically
closed in the swish Ayr Central shopping mall.

Deflated balloons and sad-looking teddy-bears are visible through
the Card Land window, according to Daily Record.

The report discloses cards, postcards and novelty mugs are also
still on display in the shop.

The report notes that Ayr Central manager George Reader said:
"The business trading as Card Land at Ayr Central has been placed
into liquidation and will be closed until further notice.

"We are in contact with the appointed liquidators but would
recommend further enquiries are directed to them at this time."
The liquidators are Begbies Traynor, Finlay House, 10-14 West
Nile Street, Glasgow.


CFO LENDING: Collapses Into Administration
------------------------------------------
Belfast Telegraph reports that payday lender CFO Lending has
collapsed into administration, months after being forced to fork
out GBP34 million for overcharging and threatening customers.

The redress added further pressure to CFO Lending's finances,
which shut to new business in 2014, according to Belfast
Telegraph.

The report discloses that Harrisons Business Recovery and
Insolvency said: "Trading deteriorated sharply since the start of
2017, leaving the company with no viable option for the ongoing
trading of the business other than to seek the protection of
administration while seeking a longer term solution in the
interests of all stakeholders."

More than 26,400 clients are still owed "varying sums" from the
company, totaling around GBP3.6 million, the report notes.

The report relates that the administrator is contacting all
affected current and former clients, and will continue to manage
the firm's loan book until an appropriate buyer is found.

The report relays Harrisons Business Recovery and Insolvency
director Paul Boyle said: "We shall exercise our duties as
administrators which include ensuring that client customers of
CFO Lending continue to maintain their repayments on any
outstanding loans."


COOTES CONCRETE: Owed GBP3.4 Mil. at Time of Administration
-----------------------------------------------------------
John Mulgrew at Belfast Telegraph reports that Cootes (Concrete
Products Ltd), a Co Armagh concrete business, went into
administration with debts of GBP3.4 million amid rising costs due
to planning delays and a slowdown in the construction sector.

Administrators from business advisory firm BDO were appointed to
run the company in February after almost 40 years in business,
Belfast Telegraph recounts.

Now a detailed report from the administrators shows the company
owed GBP3 million to its secured creditor, along with a further
GBP400,000 to a range of other businesses, Belfast Telegraph
relates.

According to Belfast Telegraph, in its statement of affairs, the
administrator said there were three main reasons for the
company's difficulties.

These were, it said: "The purchase of additional lands at its
Redrock Quarry, Markethill and its Fallaghern Quarry,
Sixmilecross.

"Significant delays in associated costs in obtaining the
necessary planning permissions required to extend and open the
new quarry areas . . .

"And depressed construction demand and increased competition in
local market prices for quarried stone and other concrete
products."

The firm recorded losses of GBP687,000 during the last year,
Belfast Telegraph relays.

The company supplied concrete around the Newry, Armagh, Craigavon
and Dungannon areas.

The family-run firm was set up in 1978 by husband and wife team
David and Lynne Coote and is understood to employ around 20.

Administrators, as cited by Belfast Telegraph, said while
directors and advisers had been in "ongoing discussions" with its
secured lender, those proved unsuccessful.

According to Belfast Telegraph, the report said that the "first
objective was the rescuing of the company as a going concern",
however that was not successful.

It added it was "expected there will be insufficient funds"
generated from the sale of the company's assets to pay all of its
unsecured creditors, Belfast Telegraph states.

The report said that followed complications "arising as a result"
of legal proceedings, Belfast Telegraph notes.


DRAX POWER: S&P Raises CCR to 'BB+' on Refinancing
--------------------------------------------------
S&P Global Ratings said it raised its long-term corporate credit
rating on U.K.-based power generator Drax Power Ltd. and its
ultimate parent Drax Group PLC to 'BB+' from 'BB'.

At the same time, S&P assigned its 'BB+' long-term corporate
credit rating to Drax Power's holding company Drax Group Holdings
Limited (DGHL) and subsequently withdrew the rating on Drax Group
at the issuer's request.  The outlook is stable.

S&P assigned its 'BB+' rating to the proposed senior secured
notes to be issued by Drax Finco Ltd., whose obligors are DGHL
and the key operating subsidiaries within the group.  The
recovery rating on the proposed debt is '4', indicating S&P's
expectation of recovery prospects of around 35% in the event of a
payment default.  S&P has also assigned its 'BBB-' rating to the
proposed super senior revolving credit facility (RCF) reflecting
a recovery rating of '1', indicating S&P's expectation recovery
of around 95% in the event of a payment default. Drax Corporate
Ltd. will be the issuer of the proposed super senior RCF.

Lastly, S&P affirmed its 'BB+' issue rating on Drax Power's
existing senior secured debt and removed it from CreditWatch
where it was placed with negative implications on Dec. 15, 2016.
The recovery rating on this debt is '3', indicating S&P's
expectation of recovery of around 65% in the event of a payment
default.

The upgrade follows Drax's announcement that it plans to raise
senior secured notes to refinance all of its existing debt and to
repay the drawn GBP200 million of its GBP375 million acquisition
facility.  Drax also intends to replace its existing RCF with a
super senior facility.  As the company is raising a lower amount
of debt for the recent acquisitions than S&P initially assumed,
its base-case forecasts demonstrate improved financial metrics
than S&P previously anticipated.  Under S&P's revised base case,
it expects Drax to achieve and maintain S&P Global Ratings-
adjusted funds from operations (FFO) to debt above 45% in 2018 as
the ratio strengthens from a lower level in 2017 when the group
closes its recent acquisitions.  The rebound in credit ratios is
due to the contributions of the acquired retail company Opus
Energy, which has a track record of earnings before interest and
taxes (EBIT) margins of about 5%, as well as the strongly
positive cash flows generated by the group.  S&P now has better
visibility on the group's dividend policy as the proposed notes
contain a dividend restriction covenant of 50% of net income.  A
potential downside to S&P's forecasts could come from the
construction risk related to four open-cycle gas turbine (OCGT)
development projects.  However S&P understands that the
construction is contingent on approval of long-term price
contracts under upcoming U.K. capacity market auctions and will
be executed only if a reasonable return can be guaranteed.

Drax's business risk profile reflects that it now generates about
three-quarters of its output from renewable sources (biomass).
One-third of its biomass output is under a fixed price "contract
for difference" (CfD).  This means that the revenue visibility
and margins will improve, although be partly muted by the ongoing
challenging power and commodity price outlook for U.K.
generation. Drax has recently received EU approval for its
regulated remuneration for its third biomass generation unit
under a CfD awarded by the U.K. government.  The compensation was
set at GBP100 per megawatt hour (/MWh) based on a 2012 nominal
rate with linked to consumer price index (CPI) inflation, in line
with S&P's expectations.

S&P applies a consolidated group approach and include in its
analysis the cash flows and debt of all subsidiaries within the
Drax group at the level of Drax Group PLC.  The key operating
subsidiaries are Drax Power, Haven Power, Opus Energy, and Drax
Biomass.  They are obligors and guarantors on the notes and
provide asset and share pledges to the proposed secured notes
issued by Drax Finco PLC, a subsidiary of the intermediary
holding company DGHL.  The same security and guarantee
arrangements apply to the proposed GBP350.0 million super senior
RCF, to be raised by Drax Corporate Ltd. (previously called Drax
Finance Ltd.).

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

   -- S&P Global Ratings-forecast power prices of GBP35/MWh in
      2017-2019 and regulated remuneration under the CfD at
      GBP100/MWh (based on nominal 2012 rate linked to CPI
      inflation);

   -- EBIT margins from the recently acquired Opus Energy of
      about 5%;

   -- Limited capital expenditure (capex) needs following the
      completion of most major capex projects apart from the
      construction of four OCGTs beyond 2019; and

   -- Dividend policy of 50% of net profits (not factoring in the
      potential to distribute the accelerated depreciation of
      coal plants).

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

   -- Positive free cash flow for the business over the next
      year, assuming no further material acquisitions or
      expansions in other areas; and

   -- FFO to debt of 35%-40% in 2017 strengthening to above 45%
      in 2018.

S&P assess Drax's liquidity position as adequate despite S&P's
estimation that its sources of liquidity cover its needs over the
next 12 months by more than 1.5x.  However, S&P's assessment is
constrained by the execution risk related to the refinancing of
the GBP200 million drawn under the acquisition facility (it will
otherwise need to be repaid in July 2018).  It is also
constrained by the company's limited standing in the capital
market as it does not have any listed bonds, and that, in S&P's
view, it has limited ability to absorb unexpected, high-impact
events without refinancing.  S&P's assessment is supported by
Drax's prudent treasury policies and its sound relationship with
banks.

Drax's principal liquidity sources over the next 12 months are:

   -- Unrestricted cash of about GBP228.4 million as of Dec. 31,
      2016;

   -- GBP100 million out of GBP175 million undrawn committed bank
      facilities that mature in more than one year, the remainder
      of which can be drawn for trading use, including
      collateral. This will increase after the refinancing
      resulting in GBP200 million available for cash drawdown
      under the GBP350 million RCF, although GBP35 million will
      be drawn to repay an existing index-linked loan.

   -- S&P's estimate of FFO of about GBP180 million for the next
      12 months.

Drax's principal liquidity uses over the next 12 months are:

   -- Capex, including acquisitions, under S&P's base case, of
      about GBP185 million;
   -- Dividend payments of GBP30 million; and
   -- Short-term debt maturities of GBP37.9 million although this
      will no longer be applicable post the refinancing.

The stable outlook on U.K. diversified energy business Drax
reflects S&P's expectations that the group's adjusted FFO to debt
will be above 45% by 2018 on a sustainable basis.  The stronger
credit metrics are driven by the additional cash flows from the
acquisition of Opus, the higher margins under the CfD contracts,
and the group's strong positive cash flows.  The outlook also
reflects S&P's view that the transformation phase in converting
coal into biomass units was successfully completed when Drax was
granted CfD contracts at GBP100/MWh (2012 nominal rate with CPI
inflation link) on its third biomass unit.  S&P's base case
factors in the recent acquisitions of retail subsidiary Opus
Energy and four sites to build OCGT plants as well as the group's
ambitions to acquire pellet plants in the U.S.

S&P could lower the rating if Drax encountered unexpected
operational problems coupled with less supportive power prices
and spreads, resulting in the adjusted FFO-to-debt ratio falling
below our expectation of 45% in 2018 and beyond.  This could also
happen if the benefit from retail activities failed to
materialize, if the company engaged in credit-dilutive
acquisitions, or if the construction capex for new generation
plans became higher than expected after 2019.

S&P sees ratings upside as unlikely at this stage because, in
S&P's view, Drax may use any excess cash flows to pursue
acquisitions to further diversify its business.  This may
therefore limit any upside on its financial risk profile while
S&P do not expect additional acquisitions to strengthen Drax's
business risk profile materially enough to support a higher
rating.


ISTMO RE: In Administration, Probitas 1492 Still in Business
------------------------------------------------------------
Louie Bacani at Insurance Business reports it will be business as
usual at Probitas 1492 even though its majority owner, Istmo Re,
has been placed into liquidation, the Lloyd's syndicate has said.

Panama's insurance regulator took control of Istmo Re in late
2016.  Rating agency AM Best has also downgraded the Panamian
reinsurer to "E."

Following the appointment of liquidators at Istmo Re, Probitas
1492 continues to have confidential discussions with a number of
new investors to replace Istmo, some of which are at an advanced
stage, according to Insurance Business.

The underwriting firm is now working closely with Lloyd's, which
has been kept "fully informed of developments," according to
Probitas 1492 Chief Executive Officer Ash Bathia.

The report says Mr. Bathia said Istmo's participation in the
syndicate's underwriting capital for the 2017 year of account is
less than 2% and will be replaced as part of the normal mid-year
coming-into-line process.

"The management continues to have sole responsibility for the
running of the Syndicate and, in accordance with the initial
agreement, we retain the right to find an acceptable buyer of
Istmo's capacity and shareholding," the report quoted Mr. Bathia
as saying.


JAEGER: Begins Process of Closing Stores, 200+ Jobs at Risk
-----------------------------------------------------------
Belfast Telegraph reports that more than 200 jobs at Jaeger are
to be axed as administrators to the stricken fashion chain begin
the process of closing twenty stores.

Last week AlixPartners was appointed to oversee the
administration process following failed attempts by the company's
private equity owner, Better Capital, to sell the struggling
retailer, Belfast Telegraph relates.

According to Belfast Telegraph, on April 18 AlixPartners said
that it has earmarked twenty "financially unviable" stores to
close down, employing a total of 165 people.

"Following consultation with all appropriate stakeholders it has
become apparent that the operating costs of a number of stores
are financially unviable given the company's difficulties.

"As a result, the joint administrators have made the difficult
but necessary decision to commence a program of store closures.
We can confirm that all employees at these stores will be paid
for the duration of the process," Belfast Telegraph quotes the
firm as saying.

In addition to the store closures, 44 people will be made
redundant at Jaeger's head office and distribution function,
impacting 32 and 12 staff respectively, Belfast Telegraph notes.

Prior to its collapse, Jaeger employed 680 staff across 46
stores, 63 concessions, its London head office and a logistics
center, Belfast Telegraph states.

Better Capital has sold Jaeger's debt to a company understood to
be controlled by the retail billionaire Philip Day, who heads up
Edinburgh Woollen Mill, Belfast Telegraph relays.

Insiders expect all of Jaeger's stores to eventually close down,
although the brand is likely to survive as part of the Edinburgh
Woollen Mill stable, which also includes Jane Norman, Peacocks
and Austin Reed, according to Belfast Telegraph.


VOYAGE BIDCO: Moody's Affirms B2 CFR, Outlook Stable
----------------------------------------------------
Moody's Investors Service has affirmed the B2 Corporate Family
Rating (CFR) and B2-PD probability of default rating (PDR) of
Voyage Bidco Limited, a UK market-leading national provider of a
diverse range of care solutions for people with complex needs.
The outlook on all ratings is stable.

The rating affirmation primarily reflects the following drivers:

* Voyage's high financial leverage, together with fee rate and
wage cost inflation headwinds faced; offset by

* The Company's stable business model, growing scale within
Community Based Care Services and steady cash generation.

Concurrently, Moody's has assigned (P)B2 and (P)Caa1 ratings,
respectively to the new GBP205 million Senior Secured Notes and
GBP40 million Second Lien Notes, both due 2023 (the Second Lien
Notes mature 6 months after the Senior Secured Notes), which are
to be issued by Voyage Care BondCo PLC and are intended to
refinance existing indebtedness.

The B2 rating of the existing GBP222 million Senior Secured
Notes, due 2018, and the Caa1 rating of the GBP50 million Second
Lien Notes, due 2019, all of which are also issued by Voyage Care
BondCo PLC are unchanged. Upon a successful conclusion to the
refinancing contemplated the existing instrument ratings will be
withdrawn.

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

RATINGS RATIONALE

The rating action was prompted by the announcement of a
refinancing process by the Company. Voyage proposes to raise new
Senior Secured Notes of GBP205 million and Second Lien Notes of
GBP40 million. The proceeds of the new issues and a new equity
injection will be applied primarily to pre-pay the existing
GBP222 million of Senior Secured Notes and GBP50 million of
Second Lien Notes, and to cover fees and expenses associated with
the refinancing. The existing GBP37.5 million Super Senior RCF
will be replaced by a new Super Senior RCF of GBP45 million, due
2022, which will be unrated. The refinancing is primarily
designed to extend the maturities of existing facilities. Moody's
calculates that these actions will result in adjusted leverage of
6.0x based on financial statements for the LTM ending December
2016.

Voyage's B2 CFR is constrained by: 1) the relatively limited
absolute scale of the Company when compared to Moody's rated
universe, albeit its leading positions in a fragmented market are
also noted; 2) the current pressure on local authority and CCG
funding, which has the potential to cause pricing pressure; 3)
increasing staff costs stemming from recent and continuing
increases in the National Living Wage ('NLW'), as well the
potential negative impact of a reliance on agency staff; 4) high
adjusted leverage of 6.0x (pro-forma for the recent refinancing);
and 5) Moody's expectation of modest deleveraging in coming years
as a result of this high leverage, somewhat limited free cash
flow generation when compared to gross debt outstanding, as well
as the Company's propensity to make small bolt-on acquisitions.

However, the rating is supported by: 1) Voyage's strong position
in a niche market as a provider of care services for people with
high acuity needs resulting from learning and often physical
disabilities, and the non-discretionary nature of demand; 2) the
robust and stable business model that benefits from long-term
contracts (around 78% of service users in Registered Care homes
have been in its care for more than 7 years); 3) strong and long-
lasting relationships with key customers, notably local
authorities and Clinical Commissioning Groups ('CCG's), which
fund the large majority of its business; 4) the Company's quality
leadership with excellent Care Quality Commission ('CQC')
ratings; 5) a solid track record of high occupancy levels; and 6)
a growing position in Community Based Care Services, which is a
high growth division with commensurately lower capital
expenditure requirements than Registered Care, albeit also a
lower margin business.

The rating and credit metrics further benefit from Voyage's
limited use of operating leases as the majority of its Registered
Care properties are freehold (236 of 278 as at December 2016),
which is a differentiating factor to some of the Company's peers
and limits exposure to rent renewals.

Moody's expects Voyage's liquidity position to remain good over
the next 12-18 months. Pro-forma for the refinancing, the
Company's estimate of cash balances is GBP6.0 million, which is
supported by a Revolving Credit Facility (RCF) of GBP45.0 million
(previously GBP37.5 million). The Company has no short-term debt
(apart from negligible finance lease obligations), with its only
long-term debt consisting of the Senior Secured and Second Lien
Notes due in 2023. Moody's expects modest free cash flow
generation moving forward, while noting that bolt-on acquisitions
have tended to absorb free cash flows historically. The new RCF
contains one springing financial covenant tested at 35%
utilization for minimum EBITDA of GBP26.2 million for which
Moody's expects headroom to remain strong.

RATIONALE FOR THE STABLE OUTLOOK

The stable outlook incorporates Moody's expectation that Voyage
will: 1) be able to deliver successfully on its business plan and
maintain its leverage at beneath 6.5x over the course of the next
12-24 months; and 2) maintain a solid liquidity profile at all
times. The outlook incorporates Moody's views that earnings will
continue to grow at a slow, steady pace, complemented by small
bolt-on acquisitions, but does not factor in any larger debt-
financed acquisitions, dividends or a material increase in capex.

WHAT COULD CHANGE THE RATING UP/DOWN

Positive ratings pressure is unlikely currently due to the
Company's elevated leverage and Moody's expectation that earnings
will grow at a slow pace. However, Voyage's rating could be
upgraded if it able to generate substantial free cash flow of
above GBP15 million per annum on a sustainable basis, with
adjusted leverage falling towards 5.5x.

Conversely the rating would come under negative pressure in a
period of sustained negative free cash flow generation or if the
criteria for the stable outlook were not to be met.

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

Headquartered in Lichfield in the UK, Voyage is a market-leading
national provider of a diverse range of care solutions for people
with complex needs, most notably learning disabilities, as well
as physical disabilities and acquired brain injuries. The large
majority of the people under its care have life-long conditions
and high acuity needs, and are assessed as 'critical' or
'substantial' by local authorities and the NHS. The Company's
operations are divided into two principal divisions 1) Registered
Care, in which it offers care to individuals in its Registered
Care homes; and 2) Community Based Care Services, which
incorporates its Supported Living operations (whereby it cares
for individuals in communal accommodation) and Outreach
activities (in which it cares for individuals in their own
homes). As of December 2016, the Company operated 278 Registered
Care homes and provided around 70,000 hours of care per week
within Community Based Care Services. On September 8, 2014,
private equity firms Partners Group and Duke Street acquired
Voyage from private equity firm HgCapital in a transaction valued
at GBP375 million. For the last 12 month period ended December
31, 2016 Voyage reported revenues and EBITDA (before exceptional
items) of GBP209.8 million and GBP39.1 million, respectively.


VOYAGE CARE: S&P Assigns 'B+' Rating to GBP205MM Sr. Sec. Notes
---------------------------------------------------------------
S&P Global Ratings assigned its 'B+' issue rating and '2'
recovery rating to the proposed GBP205 million senior secured
notes to be issued by Voyage Care Bondco PLC.  The '2' recovery
rating reflects S&P's expectation of meaningful recovery (70%-
90%, rounded estimate 85%) in the event of default.  Voyage Care
will onlend the notes' proceeds to its parent, Voyage BidCo Ltd.,
an operator of specialist care homes in the U.K.

S&P also assigned its 'CCC+' issue rating and '6' recovery rating
to Voyage Care's proposed GBP40 million senior secured second-
lien notes.  The '6' recovery rating reflects S&P's expectations
of negligible recovery (0%-10%) in the event of a default.  The
rating reflects the subordinated nature of the notes.

At the same time, S&P assigned its 'BB' issue rating and '1+'
recovery rating to Voyage Care's proposed GBP45 million super
senior revolving facility.  The '1+' recovery rating reflects
S&P's expectations of full recovery (100%) in the event of a
default.

S&P understands that Voyage Care will use the proceeds of its
proposed senior secured and second-lien notes to refinance
existing debt.  The security package provided to senior secured
noteholders is shared with revolving credit facility (RCF)
lenders and comprises share pledges and substantially all
tangible and intangible assets of the issuer and guarantors,
including trade receivables.  S&P therefore views the collateral
as a comprehensive security package.

The proposed senior secured notes and the RCF will be guaranteed
on a senior basis by Voyage Bidco Ltd., the parent guarantor, and
by subsidiaries representing at least 80% of group EBITDA before
exceptional items (as of April 2017).  Voyage Bidco Ltd. and
these subsidiaries will also guarantee the second-lien notes, but
on a subordinated basis.

The 'B' corporate credit rating on Voyage Bidco Ltd. is based on
S&P's assessment of the company's highly leveraged financial risk
profile.  It also reflects the cash-generative nature of its
business as an operator of specialist care homes in the U.K., and
the added benefit of its freehold ownership of most of its
properties.  The outlook is stable.

   -- S&P's hypothetical default scenario envisages deterioration
      in the quality of the care homes, lower occupancy rates,
      and a significant drop in fees due to budgetary constraints
      by the U.K. government.

   -- S&P anticipates that the company would likely be
      reorganized as going concern owing to its substantial real
      estate assets base, which can be run by an alternative
      operator; S&P also thinks that a discrete asset valuation
      is appropriate for a potential valuation of the business at
      default.

Simulated default assumptions:
   -- Year of default: 2020
   -- Jurisdiction: United Kingdom

Simplified waterfall:
   -- Gross recovery value: GBP236.1 million
   -- Net recovery value for waterfall after unfunded pension
      liabilities and admin expenses (5%): GBP224.3 million
   -- Estimated priority claims [ABL or other]: GBP39.8 million*
   -- Remaining value for creditors: GBP184.5 million
   -- Estimated first-lien debt claims: GBP211.2 million*
   -- Recovery range: 70%-90% (rounded estimate 85%)
   -- Recovery rating: 2
   -- Estimated second-lien debt claims: GBP41.8 million*
   -- Recovery range: 0%-10% (rounded estimate 0%)
   -- Recovery rating: 6

*All debt amounts include six months of prepetition interests.



                            *********

Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par.  Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable.  Those sources may not,
however, be complete or accurate.  The Monday Bond Pricing table
is compiled on the Friday prior to publication.  Prices reported
are not intended to reflect actual trades.  Prices for actual
trades are probably different.  Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind.  It is likely that some entity
affiliated with a TCR editor holds some position in the issuers'
public debt and equity securities about which we report.

Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than US$3 per
share in public markets.  At first glance, this list may look
like the definitive compilation of stocks that are ideal to sell
short.  Don't be fooled.  Assets, for example, reported at
historical cost net of depreciation may understate the true value
of a firm's assets.  A company may establish reserves on its
balance sheet for liabilities that may never materialize.  The
prices at which equity securities trade in public market are
determined by more than a balance sheet solvency test.

Each Friday's edition of the TCR includes a review about a book
of interest to troubled company professionals.  All titles are
available at your local bookstore or through Amazon.com.  Go to
http://www.bankrupt.com/booksto order any title today.


                            *********


S U B S C R I P T I O N   I N F O R M A T I O N

Troubled Company Reporter-Europe is a daily newsletter co-
published by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA.
Valerie U. Pascual, Marites O. Claro, Rousel Elaine T. Fernandez,
Joy A. Agravante, Julie Anne L. Toledo, Ivy B. Magdadaro, and
Peter A. Chapman, Editors.

Copyright 2017.  All rights reserved.  ISSN 1529-2754.

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

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

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


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