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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, June 1, 2017, Vol. 18, No. 108


                            Headlines


A Z E R B A I J A N

INT'L BANK: Moody's Places Caa3 Rating on Review for Downgrade


G E O R G I A

LIBERTY BANK: S&P Affirms B/B CCRs & Revises Outlook to Positive


G E R M A N Y

LOGWIN AG: S&P Raises CCR to 'BB' on Solid Performance
RICKMERS: HSH Nordbank Denies Approval of Restructuring Terms


G R E E C E

GREECE: Creditors Unlikely to Offer Improved Debt Relief Package


I R E L A N D

AVOCA CLO XI: Moody's Assigns B2(sf) Rating to Cl. F-R Notes
ARDAGH GROUP: S&P Hikes Long-Term Corporate Rating to B+


I T A L Y

BPER BANCA: Fitch Rates Subordinated Tier 2 Notes 'BB-'


K A Z A K H S T A N

KAZKOMMERTSBANK: Azerbaijan Bank Default Spreads Shockwaves


L U X E M B O U R G

ARMACELL HOLDCO: Moody's Alters Outlook to Pos. & Affirms B3 CFR


N E T H E R L A N D S

HIGHLANDER EURO II: Moody's Affirms Ba2(sf) Rating on Cl. E Notes
VEON LTD: Fitch Affirms BB+ Long-Term IDR, Outlook Stable
VEON LTD: S&P Affirms BB LT Corp. Credit Rating, Outlook Stable


R O M A N I A

GLOBALWORTH REAL: Moody's Assigns Ba2 CFR, Outlook Stable


R U S S I A

BANK ROSSIYSKY: Fitch Puts BB- IDRs on Rating Watch Negative


S P A I N

PRISA: Creditors Taps Houlihan Lokey Amid Financial Woes


S W E D E N

HOIST KREDIT: Moody's Raises LT Sr. Unsec. Debt Rating From Ba1


U K R A I N E

MRIYA AGRO: Agrees on Debt Restructuring Terms with IFC


U N I T E D   K I N G D O M

BRITISH AIRWAYS: S&P Hikes LT Corp. Credit Rating to 'BB+'
CPUK FINANCE: Fitch Rates Proposed Cl. B3 & B4 Notes 'B(EXP)'
CPUK FINANCE: S&P Gives (P)Bsf Rating to New Sub. B3 & B4 Notes
KIRS MIDCO 3: Moody's Assigns (P)B3 CFR, Outlook Positive
RZB FINANCE: S&P Hikes Ratings on Hybrid Instruments to BB+

SPIRIT ISSUER: Moody's Affirms Ba1(sf) Rating on Cl. A7 Notes
TAURUS CMBS 2014-1: Fitch Affirms BB+ Rating on Class C Notes


                            *********



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A Z E R B A I J A N
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INT'L BANK: Moody's Places Caa3 Rating on Review for Downgrade
--------------------------------------------------------------
Moody's Investors Service said that the foreign-currency senior
unsecured debt rating of International Bank of Azerbaijan (IBA)
is unaffected at Caa3, under review for downgrade. The rating
agency downgraded the bank's long-term foreign- and local-
currency deposit ratings to Caa2 from B1 and changed the review
to direction uncertain from review for downgrade. IBA's baseline
credit assessment (BCA) of ca was has also been placed on review
with direction uncertain. In addition, Moody's downgraded IBA's
long-term counterparty risk assessment (CRA) to Caa1(cr) from
Ba3(cr) and changed the review to direction uncertain from review
for downgrade. IBA's Not Prime short-term foreign- and local-
currency deposit ratings and Not Prime(cr) short-term CRA were
affirmed.

RATINGS RATIONALE

IBA's foreign-currency debt rating of Caa3 reflects the likely
loss for creditors as a result of a proposed debt restructuring.
Based on the terms of this restructuring announced on May 23,
which proposes several options to investors including a proposed
exchange ratio of 0.8 in sovereign bonds against existing claims,
Moody's estimates the loss to be at about 20%, which is
consistent with the current Caa3 debt rating. The rating agency
maintains the review for possible downgrade on the bank's debt
ratings, which was opened on May 15. In Moody's view, given the
significant weight of Azerbaijani government-related entities
amongst the creditors, coupled with the threat of a liquidation
of the bank should the proposal be rejected, there is little
prospect for creditor losses to be less than the agency now
assumes. However, there remains a possibility of higher losses,
should the proposal fail and the authorities proceed to liquidate
the bank.

The downgrade of the bank's deposit ratings (which cover only
uninsured deposits under Moody's definitions) to Caa2 from B1
reflects Moody's view that the probability of government support
is lower than previously anticipated, and the agency now
considers this probability to be 'High' rather than 'Very High'.
The government and the bank have officially stated that
individual and corporate deposits are not affected by the
restructuring. Insured deposits at IBA include all retail
deposits without an interest cap. Moody's expects further support
for the bank after the restructuring; however, the change in
public policy and the possibility of a liquidation make this less
certain than before. As a result, the rating agency now
incorporates two notches of government support uplift in its
long-term deposit ratings.

IBA's BCA of ca continues to reflect its default on foreign debt,
driven in turn by its negative capitalization according to
preliminary IFRS results for 2016.

The reviews with direction uncertain on the BCA and deposit
ratings reflect two diverging scenarios. In the event of the
successful completion of the debt restructuring, the bank's
capital and financial metrics will improve, potentially leading
to a higher BCA and deposit ratings. On the other hand, should
creditors reject the restructuring and the authorities commence a
liquidation of the bank, the BCA would be downgraded to c and
uninsured deposits would likely be exposed to higher losses.

The rating agency expects to resolve the reviews on IBA's ratings
following the final decision of the creditors regarding debt
restructuring. The claimants' meeting is scheduled for July 13.

WHAT COULD MOVE THE RATINGS DOWN / UP

If creditors accept the restructuring plan, the bank will be
recapitalized, and other elements of the restructuring plan would
lead to improvements in prospects for its asset quality,
profitability, funding and liquidity. This would likely lead to a
higher BCA and in turn, potentially higher long-term deposit
ratings.

If creditors do not accept the restructuring plan, the bank may
be placed into liquidation, resulting in a downgrade of the BCA,
higher losses for the foreign currency debt and likely losses for
uninsured deposits, and hence lower ratings.

Should the proposed restructuring of foreign debt be completed,
Moody's would expect to withdraw its foreign currency debt
issues' ratings and assign new ratings to any new debt issued by
IBA.

LIST OF AFFECTED RATINGS

Issuer: International Bank of Azerbaijan

Downgrade and Placed Under Review Direction Uncertain from
Ratings Under Review Downgrade :

-- LT Bank Deposits (Local & Foreign Currency), Downgraded to
    Caa2 Rating Under Review from B1 Rating Under Review

-- LT Counterparty Risk Assessment, Downgraded to Caa1(cr) from
    Ba3(cr)

Affirmed and Placed Under Review Direction Uncertain:

-- Baseline Credit Assessment, currently ca

Affirmations:

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

-- Adjusted Baseline Credit Assessment, Affirmed ca

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

PRINCIPAL METHODOLOGY

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



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G E O R G I A
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LIBERTY BANK: S&P Affirms B/B CCRs & Revises Outlook to Positive
----------------------------------------------------------------
S&P Global Ratings revised its outlook on Georgia-based Liberty
Bank to positive from stable. At the same time, S&P affirmed its
'B/B' long- and short-term counterparty credit ratings.

The positive outlook reflects S&P's opinion that Liberty Bank
continues to enjoy a track record of healthy earning generation
capacity that supports its capitalization, despite uncertainties
related to the bank's ownership structure. S&P believes that the
bank benefits from a well-established market position in Georgia
in the consumer finance segment mainly focusing on low-risk
clients (with regular inflows into their accounts at the bank,
either as salaries, state pensions, or welfare payments). The
bank also enjoys low single-name concentrations in its loan book
and funding base. In addition, we think that Liberty Bank has
moderate systemic importance in Georgia's banking sector, given
its exclusive role in the distribution of pensions and social
welfare.

Liberty Bank ranks fourth in Georgia in terms of assets, which
totaled Georgian lari (GEL) 1.5 billion (about US$641 million) as
of March 31, 2017, and has a 5.4% market share. The bank's
business focus is somewhat unique for Georgia because it has been
granted the sole right to distribute pensions and welfare
payments throughout the country, according to an agreement with
the government that was renewed in December 2014 and expires in
December 2019. Therefore, we believe that the bank's core
franchise is solid and supports revenue sustainability.

By order of the Tbilisi City Court, in connection with civil
litigation that started in 2013, 58.18% of Liberty Bank's
ordinary shares remain encumbered. The outcome of this case might
influence the bank's ownership structure and, eventually, its
strategy and capital management policy. So far, these
uncertainties have not hurt the bank's performance; Liberty Bank
continues to demonstrate consistent revenue generation.
Furthermore, we consider that its management team is professional
and experienced, and, therefore, capable of sustaining good
financial performance and delivering on targets.

S&P said, "We believe that Liberty Bank will continue to show
healthy results, given the bank's sustainable competitive
position in a protected market niche, allowing the bank to keep
its net interest margin at above 10% and stabilizing credit costs
in the 3.5%-4.0% range of average customer loans, reflecting the
bank's retail specialization, pressures from the economic
slowdown in Georgia, and seasoning of the rapidly accumulated
loan book. Therefore, we forecast that its internal capital
generation capacity, despite a forecast 50% dividend payment
ratio, will be slightly higher than risk-weighted assets growth.
As a result, we expect its risk-adjusted capital (RAC) ratio will
gradually climb past 6.0% over the next 12-18 months from 5.5% as
of year-end 2016. However, should the bank opt for higher growth
rates or follow a more aggressive dividend strategy, pressure on
the RAC ratio might arise, leading us to revise our view of the
bank's capital and earnings."

Liberty Bank differs positively from other financial institutions
in Georgia in that its loan book has very low levels of single-
name concentrations (top-20 loans to total loans represent less
than 2% of total loans as of Dec. 31, 2016). Also, the bank does
not provide loans in foreign currency; therefore, its loan book
is less prone to exchange rate volatility.

Liberty Bank's funding is average and its liquidity adequate, in
S&P's opinion. The bank is mostly funded by customer deposits,
with a relatively low level of single-name concentration (top-20
depositors contribute about 14% of total customer deposits). The
bank's loan-to-deposit ratio was a low 54% as of Dec. 31, 2016,
but S&P expects it will increase to 60%-70% within the next 12-24
months, due to anticipated loan portfolio growth plans. Customer
accounts dominate funding sources representing 90% of total
liabilities. Retail accounts have proven to be more stable
historically and the bank aims to further substitute large
corporate clients with retail ones and increase the
percentage of retail accounts in total customer accounts above
the current 55%. The bank maintains an adequate liquidity
cushion, with cash and money market instruments comprising about
46% of total assets as of Dec. 31, 2016, and covering wholesale
debt maturing over 2017 by more 34x.

The positive outlook on Liberty Bank reflects the possibility
that S&P could raise the long-term rating in the next 12 months
if S&P observes that, as per its expectations, the bank continues
demonstrating strong growth while maintaining its asset quality
and capital position at least at the current level.

S&P could revise the outlook to stable if it observes that the
bank is following a more aggressive capital management policy,
demonstrating higher growth than it currently envisages, or
increased dividends, which could squeeze its capital position as
measured by its RAC ratio or lead to notable deterioration of
loan book performance, increased provisioning needs, and lower
earnings.

Furthermore, S&P could take a negative rating action on Liberty
Bank if it observes that the uncertainties regarding the bank's
ownership end up constraining financial performance or
management's efficiency, or if possible future changes to the
ownership structure are detrimental to the bank's business
stability or capital position.

S&P may take a positive rating action if the bank continues to
show good asset quality, compared with that of local peers and
similar consumer finance banks, with no additional risk-taking,
while at the same time targeting growth and maintaining a capital
position at least at the current level, with a RAC ratio at about
6%.

Moreover, S&P would consider an upgrade if the bank finds
strategic owners, quelling uncertainties related to the ownership
structure, and if the new owners display a supportive and
cautious approach with regard to capital management and
maintaining the bank's focus on its core areas of expertise.
However, this is a remote possibility over the next 12-18 months,
in its opinion.



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G E R M A N Y
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LOGWIN AG: S&P Raises CCR to 'BB' on Solid Performance
------------------------------------------------------
S&P Global Ratings raised its long-term corporate credit rating
on logistics service provider Logwin AG to 'BB' from 'BB-'. The
outlook is stable.

The upgrade reflects the company's solid operating performance
and improvement of its Solutions division, which is its contract
logistic segment. This was mainly driven by positive trading
conditions and strict cost controls combined with high customer
retention in the last year. As a result, improving EBITDA
and cash flow generation led to stronger credit metrics at the
end of 2016 -- than S&P previously anticipated. Furthermore, the
company's prudent financial policies and ample cash balance
(offering some headroom for potential discretionary spending)
support our expectation that debt leverage metrics will remain
near current levels in the next one to two years. As such, S&P
forecasts that the company's adjusted funds from operations (FFO)
to debt and debt to EBITDA will remain above 45% and below 2.0x,
respectively in the next years. S&P also expects that Logwin will
continue generating unadjusted positive free cash flow of EUR25
million to EUR30 million each year, underpinning the company's
ability to maintain credit metrics commensurate with a 'BB'
rating.

"We expect Logwin to maintain a strong commitment to high service
quality and customer retention with customized service to key
clients, as it has done in the past. We expect stabilization of
the Solutions segment as the company's cost optimization measures
have strengthened its resiliency to volume decline to some
extent. While we factor in the business improvement and the
company's ability to maintain a similar customer base over the
years, our overall business assessment remains constrained by
Logwin's relatively small scale and exposure to the highly
fragmented and competitive underlying logistics industry. Logwin
is also exposed to cyclical end-markets such as retail,
automotive, and chemicals, which can undermine the company's
earnings stability, in particular in the Solutions division," S&P
said.

"We also see the scale of the company's operations as narrower
than those of market leaders with a global reach and greater
customer diversity. Logwin's profitability is constrained by its
track record of relatively low and volatile EBIT margins, albeit
partially offset by its asset-light business model, to some
extent flexible cost base, and minimal capital expenditure
(capex) needs. Nevertheless, Logwin generated an EBITA margin of
3.6% as of year-end 2016, which is relatively low, compared with
the broader range of peers in the railroad and package express
industry. While the EBITA margin in the Air and Ocean division
continues to be relatively resilient in a mid-single-digit range,
we expect that the EBITA margin in the Solutions division will
remain thin at around 1% because of high degree of service
customization and large exposure to seasonality leading to
network underutilization in some months. We also view the
company's modest absolute level of EBITDA as a weakness because
it provides limited protection against market fluctuations and
high-impact and low-probability events, such as significant
economic downturn in China or loss of major customers," S&P said.

Logwin's modest financial risk profile is based on S&P's forecast
that its weighted-average FFO-to-debt and debt to EBITDA ratio
will remain above 45% and below 2.0x in 2017-2019, respectively.
This is further supported by the company's prudent financial
policy and low absolute level of debt, which S&P does not
envisage will materially change over the forecast period. S&P
also projects a continuation of good EBITDA-to-cash conversion
and positive free cash flows beyond 2017, underpinned by
relatively low capex requirements and strict working capital
control.

S&P's main assumptions include:

- In the Air and Ocean division, S&P anticipates modest revenue
growth of 1%-2%, supported by its expectations of volume
increase, linked to itsestimates of annual GDP growth rates for
Europe and Asia-Pacific and based on the company's 2016 weighted-
average sales breakdown in each of the.

- On the other hand, in the Solutions division, S&P forecasts a
slight decline in the operating margin in 2017 compared with the
previous year, hindered by the challenging trading environment in
the company's key business segments.

- Overall group EBITA margin of around 3.0%-3.5% in 2017-2018,
mostly driven by cost reduction and productivity improvement
measures in the contract logistics operations.

- Annual capex of EUR6 million to - EUR7 million.

- About EUR5 million - EUR6 million for dividend payments.

Based on these assumptions, S&P arrived at the following credit
measures:

- FFO to debt of about 45%-50% in 2017-2019, compared with
   around 50% achieved in 2016.

- Debt to EBITDA of 1.6x in 2017-2019, compared with 1.6x
   achieved in 2016.

The stable outlook reflects S&P's expectation that Logwin's
credit measures will remain at current levels over the next one
to two years, such that weighted-average FFO to debt remains at
least at or above 45% and debt to EBITDA remains below 2.0x. The
outlook is also based on our expectation that the company will
maintain a prudent approach toward dividend payouts and
investments without affecting its credit metrics.

S&P said, "We could lower the rating if an unexpected
deterioration in operating conditions, that may occur for example
from the loss of one or more key customers or significant
economic downturn in China affecting trade volumes, led to a
material weakening in Logwin's profitability and credit metrics.
We could also lower our rating if the company unexpectedly
engaged in debt-financed dividend or acquisitive activity
resulting in additional leverage of adjusted FFO to debt below
45% and debt to EBITDA of more than 2.0x on a sustained basis.
Based on the current level of EBITDA and debt, the company would
need to add about $40 million of debt, for leverage to rise above
2.0x (assuming EBITDA remains in line with our expectations),
which we view as unlikely.

"We view an upgrade as unlikely at this stage because of Logwin's
limited scale and relatively low level of EBITA margin compared
with the broader range of global peers in the railroad and
package express industry. We believe that the company's absolute
EBITDA size provides limited downside protection and renders it
susceptible to adverse trading conditions. However, we could
consider raising the rating if the company strengthened its
business by further increasing its scale and scope of operations
(organically or via profitability-enhancing complementary
acquisition) while strengthening credit metrics, such that debt
to EBITDA were sustainably less than 1.5x and FFO to debt above
60%."


RICKMERS: HSH Nordbank Denies Approval of Restructuring Terms
-------------------------------------------------------------
The Board of HSH Nordbank AG has surprisingly denied approval of
the term sheet regarding the financial restructuring of the
Rickmers Group.  Rickmers Holding AG strives for restructuring in
self-administration on the basis of continuation of the business
and vessel operations.

On April 19, 2017, Rickmers Holding AG reached an understanding
with, inter alios, HSH Nordbank AG on a term sheet regarding the
restructuring of material financial liabilities of the Rickmers
Group that was subject to corporate approval of HSH Nordbank AG
and contingent on the restructuring of the bond 2013/2018 issued
by Rickmers Holding AG (ISIN: DE000A1TNA39 / WKN: A1TNA3)
("Rickmers Bond").

Until May 31, 2017, Rickmers Group has accomplished all agreed
and required steps to prepare the restructuring (in particular
consisting in presenting a restructuring opinion certifying a
positive restructuring prognosis, reaching commercial agreement
with all other financing banks, and obtaining positive binding
tax rulings for the debt-push-up structure).  Notwithstanding,
HSH Nordbank AG has highly surprisingly informed Rickmers Holding
AG that the board of HSH Nordbank AG has rejected the credit
applications of Rickmers Group and denied approval to the term
sheet dated April 19, 2017 and rejected further negotiations of
the restructuring.

As a result, the term sheet of April 19, 2017, on the basis of
which the bondholders' meeting was convened, cannot be
implemented anymore.  According to the assessment of the
management board and supervisory board of Rickmers Holding AG,
the positive going concern prognosis of Rickmers Holding AG does
therefore no longer apply.  The management board of Rickmers
Holding AG is forced to file for insolvency without undue delay.
The management board of Rickmers Holding AG strives for
restructuring in self-administration, on the basis of
continuation of business and vessel operations.  The management
board and supervisory board of Rickmers Holding AG have initiated
corresponding preparations.

For the second bondholders' meeting scheduled for today, i.e.
June 1, 2017, registrations for more than EUR100 million of the
bond nominal (approx. 37% of the outstanding bond nominal) have
been received, and, according to the current status, a high ratio
of approval of the proposed restructuring concept is apparent.
The second bondholders' meeting scheduled for today, June 1,
2017, will now resolve exclusively on the election of the joint
representative of the bondholders.

                   About the Rickmers Group

The Rickmers Group is an international service provider in the
maritime transport sector and a vessel owner, based in Hamburg.
In the Maritime Assets segment the Rickmers Group is active as
Asset Manager for its own vessels and also for those of third
parties.  The Group initiates and coordinates shipping
projects, organizes financing and acquires, charters and sells
ships.  In the Maritime Services business segment the Rickmers
Group provides ship management services for its own vessels as
well as for those owned by third parties; these services comprise
technical and operational management, crewing, newbuild
supervision, consultancy and insurance-related services.



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G R E E C E
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GREECE: Creditors Unlikely to Offer Improved Debt Relief Package
----------------------------------------------------------------
Alessandro Speciale and Viktoria Dendrinou at Bloomberg News
report that Greece may not be offered a substantially improved
debt-relief package when euro-area finance ministers discuss its
bailout in Luxembourg this month.

According to Bloomberg, officials directly involved in the
negotiations said euro-zone creditors are unlikely to commit to
further details of measures beyond the extension of maturities in
rescue loans that they previously discussed.  They said such a
deal on its own might still not be enough to convince the
European Central Bank to start buying Greek bonds, Bloomberg
notes.

According to Bloomberg, Bank of Greece Governor Yannis
Stournaras warned that Greece's economy "cannot withstand the
uncertainty of one more year on whether there is going to be some
debt measures or not."

That demand for clarity comes after euro-area finance ministers
on May 22 failed to reach an agreement on how to ease Greece's
debt burden, Bloomberg notes.  Hopes for a deal that would also
pave the way for the disbursement of funds to meet debt
repayments in July are now pinned on the Eurogroup's next
meeting, scheduled for June 15, Bloomberg states.

The officials, as cited by Bloomberg, said it is unlikely that
ministers will offer much-improved debt-relief terms compared to
the ones presented in May.

"Greece should reinforce ownership of the program policies
instead of focusing on further debt relief," Bloomberg quotes
European Stability Mechanism Chief Economist Rolf Strauch, said
at a speech in Athens as saying on May 31.

Greece's creditors so far have been unable to resolve differences
over the measures required to bring the country's debt --
currently about 180 percent of gross domestic product -- back to
a sustainable path, Bloomberg discloses.  A compromise offered by
the euro zone for an extension of up to 15 years was deemed
insufficient by the International Monetary Fund, Bloomberg
relays.

                     *     *     *

On May 10, 2017, the Troubled Company Reporter-Europe reported
that the preliminary agreement between Greece and its
international creditors is a positive step towards unlocking
funds to enable the country to meet its July debt maturities,
Fitch Ratings says.  It is also a prerequisite for discussions on
longer-term debt relief but the eventual timing and outcome of
these remains uncertain.

The Greek government and the country's international creditors
said on May 2 that they had reached a preliminary agreement on
the second review of Greece's third bailout program.  Greece has
committed to further cut pensions, raise some taxes, and reform
labor and energy markets.  If the Greek parliament approves these
measures, eurozone finance ministers could approve the release of
around EUR7 billion of European Stability Mechanism (ESM) funds.
The funds will be partly used for clearance of general government
arrears with the private sector as well as for covering EUR6.3
billion of debt due for repayment in July.

Fitch said, "This would be consistent with our baseline
assumption when we affirmed Greece's 'CCC' sovereign rating in
February.  We took into account Greece's broad program
compliance and the eurozone authorities' desire to avoid a fresh
Greek crisis.  We also acknowledged that popular and political
opposition in Greece to elements of the program remains high,
which create substantial implementation risk.  But we think
government MPs are more likely to approve the reforms than reject
them."

As reported by the Troubled Company Reporter-Europe on March 1,
2017, Fitch Ratings affirmed Greece's Long-Term Foreign and Local
Currency Issuer Default Ratings (IDRs) at 'CCC'.  The issue
ratings on Greece's long-term senior unsecured foreign- and
local-currency bonds are also affirmed at 'CCC.  The Short-term
Foreign and Local Currency IDRs and the rating on Greece's short-
term debt have all been affirmed at 'C', and the Country Ceiling
at 'B-'.  Greece's 'CCC' IDRs reflect the following key rating
drivers:

The Greek government is broadly complying with the terms of the
EUR86 billion European Stability Mechanism (ESM) program.  The
second review of the program remains incomplete and there are
disagreements among the country's European creditors and the IMF
around the long-term sustainability of Greek public debt.  The
delay in the completion of the second review increases the risk
that the recent economic recovery will be undermined by a hit to
confidence or by the Greek government building up arrears with
the private sector to preserve liquidity.



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AVOCA CLO XI: Moody's Assigns B2(sf) Rating to Cl. F-R Notes
------------------------------------------------------------
Moody's Investors Service has assigned definitive ratings to ten
classes of notes (the "Refinancing Notes") issued by Avoca CLO XI
Designated Activity Company:

-- EUR3,000,000 Class X Senior Secured Floating Rate Notes due
    2030, Assigned Aaa (sf)

-- EUR300,000,000 Class A-R Senior Secured Floating Rate Notes
    due 2030, Assigned Aaa (sf)

-- EUR20,000,000 Class B-1R Senior Secured Fixed Rate Notes due
    2030, Assigned Aa2 (sf)

-- EUR27,000,000 Class B-2R Senior Secured Floating Rate Notes
    due 2030, Assigned Aa2 (sf)

-- EUR13,000,000 Class B-3R Senior Secured Floating Rate Notes
    due 2030, Assigned Aa2 (sf)

-- EUR21,000,000 Class C-1R Deferrable Mezzanine Floating Rate
    Notes due 2030, Assigned A2 (sf)

-- EUR15,000,000 Class C-2R Deferrable Mezzanine Floating Rate
    Notes due 2030, Assigned A2 (sf)

-- EUR23,000,000 Class D-R Deferrable Mezzanine Floating Rate
    Notes due 2030, Assigned Baa2 (sf)

-- EUR27,500,000 Class E-R Deferrable Junior Floating Rate Notes
    due 2030, Assigned Ba2 (sf)

-- EUR15,800,000 Class F-R Deferrable Junior Floating Rate Notes
    due 2030, Assigned B2 (sf)

RATINGS RATIONALE

Moody's ratings of the notes address the expected loss posed to
noteholders. The ratings reflect the risks due to defaults on the
underlying portfolio of assets, the transaction's legal
structure, and the characteristics of the underlying assets.

The Issuer has issued the Refinancing Notes in connection with
the refinancing of the following classes of notes: Class A Notes,
Class B Notes, Class C Notes, Class D Notes, Class E Notes and
Class F Notes due 2027 (the "Original Notes"), previously issued
on June 5, 2014 (the "Original Closing Date"). On the Refinancing
Date, the Issuer will use the proceeds from the issuance of the
Refinancing Notes to redeem in full its respective Original
Notes. On the Original Closing Date, the Issuer also issued one
class of subordinated notes, which will remain outstanding.

Avoca CLO XI is a managed cash flow CLO. The issued notes are
collateralized primarily by broadly syndicated first lien senior
secured corporate loans. At least 90% of the portfolio must
consist of senior secured loans, senior secured bonds and
eligible investments, and up to 10% of the portfolio may consist
of second lien loans, unsecured loans, mezzanine obligations and
high yield bonds.

KKR Credit Advisors (Ireland) (UK) Unlimited Company (the
"Manager") manages the CLO. It directs the selection,
acquisition, and disposition of collateral on behalf of the
Issuer. After the reinvestment period, which ends in July 2021,
the Manager may reinvest unscheduled principal payments and
proceeds from sales of credit risk obligations, subject to
certain restrictions.

The transaction incorporates interest and par coverage tests
which, if triggered, divert interest and principal proceeds to
pay down the notes in order of seniority.

Loss and Cash Flow Analysis:

Moody's modeled the transaction using a cash flow model based on
the Binomial Expansion Technique, as described in Section 2.3.2.1
of the "Moody's Global Approach to Rating Collateralized Loan
Obligations" rating methodology published in October 2016.

The cash flow model evaluates all default scenarios that are then
weighted considering the probabilities of the binomial
distribution assumed for the portfolio default rate. In each
default scenario, the corresponding loss for each class of notes
is calculated given the incoming cash flows from the assets and
the outgoing payments to third parties and noteholders.
Therefore, the expected loss or EL for each tranche is the sum
product of (i) the probability of occurrence of each default
scenario and (ii) the loss derived from the cash flow model in
each default scenario for each tranche. As such, Moody's
encompasses the assessment of stressed scenarios.

The key model inputs Moody's used in its analysis, such as par,
weighted average rating factor, diversity score and the weighted
average recovery rate, are based on its published methodology and
could differ from the trustee's reported numbers. For modeling
purposes, Moody's used the following base-case assumptions:

Performing par and principal proceeds balance: EUR500,000,000

Diversity Score: 35

Weighted Average Rating Factor (WARF): 2700

Weighted Average Spread (WAS): 3.70%

Weighted Average Coupon (WAC): 5.50%

Weighted Average Recovery Rate (WARR): 42.0%

Weighted Average Life (WAL): 9 years

Moody's has analysed the potential impact associated with
sovereign related risk of peripheral European countries. As part
of the base case, Moody's has addressed the potential exposure to
obligors domiciled in countries with local currency country risk
ceiling of A1 or below. Following the effective date, and given
the portfolio constraints, up to 10% of the pool can be domiciled
in countries with local currency government bond rating below Aa3
with a further constraint of 5% to exposures with local currency
government bond rating below A3. However, the eligibility
criteria require that an obligor be domiciled in a Qualifying
Country. At present, all Qualifying countries have a local
currency government bond rating of at least A3. Therefore at
present, it is not possible to have exposures to countries with a
local currency government rating of below A3. Given this
portfolio composition, there were no adjustments to the target
par amount, as further described in the methodology.

Methodology Underlying the Rating Action:

The principal methodology used in these ratings was "Moody's
Global Approach to Rating Collateralized Loan Obligations"
published in October 2016.

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

The performance of the notes is subject to uncertainty. The
performance of the notes is sensitive to the performance of the
underlying portfolio, which in turn depends on economic and
credit conditions that may change. The Manager's investment
decisions and management of the transaction will also affect the
performance of the notes.

Stress Scenarios:

Together with the set of modeling assumptions above, Moody's
conducted an additional sensitivity analysis, which was a
component in determining the provisional ratings assigned to the
rated notes. This sensitivity analysis includes increased default
probability relative to the base case.

Below is a summary of the impact of an increase in default
probability (expressed in terms of WARF level) on the notes
(shown in terms of the number of notch difference versus the
current model output, whereby a negative difference corresponds
to higher expected losses), assuming that all other factors are
held equal.

Percentage Change in WARF -- increase of 15% (from 2700 to 3105)

Rating Impact in Rating Notches:

Class X Notes: 0

Class A-R Notes: 0

Class B-1R Notes: -2

Class B-2R Notes: -2

Class B-3R Notes: -2

Class C-1R Notes: -2

Class C-2R Notes: -2

Class D-R Notes: -2

Class E-R Notes: 0

Class F-R Notes: 0

Percentage Change in WARF -- increase of 30% (from 2700 to 3510)

Rating Impact in Rating Notches:

Class X Notes: 0

Class A-R Notes: -1

Class B-1R Notes: -3

Class B-2R Notes: -3

Class B-3R Notes: -3

Class C-1R Notes: -4

Class C-2R Notes: -4

Class D-R Notes: -3

Class E-R Notes: -1

Class F-R Notes: 0


ARDAGH GROUP: S&P Hikes Long-Term Corporate Rating to B+
--------------------------------------------------------
S&P Global Ratings raised the long-term corporate rating on
Ireland-based glass and metal packaging manufacturer Ardagh
Packaging Group Ltd. to 'B+' from 'B'. "In addition, we assigned
our 'B+' long-term rating to Luxembourg registered Ardagh Group
S.A. (Ardagh), the publicly listed entity and immediate parent of
Ardagh Packaging Group. The outlooks are positive. Going forward,
Ardagh Group S.A. will be the main rated entity and the issuer
ratings on Ardagh Packaging Group Ltd. and Ardagh Packaging
Holdings Ltd. will be discontinued," S&P said.

S&P said, "We also raised our issue ratings on Ardagh's senior
secured debt instruments to 'BB' from 'BB-'. The recovery rating
is unchanged at '1', indicating our expectations of very high
recovery (90%-100%; rounded estimate 95%) in the case of default.

"We also raised our issue ratings on the group's senior unsecured
debt instruments and subordinated payment-in-kind (PIK) toggle
notes to 'B-' from 'CCC+'. The recovery rating on these notes is
unchanged at '6', indicating our expectation of negligible
recovery (0%-10%; rounded estimate 0%) in case of default.

"The upgrade is based on our view of the group's improving
competitive position. Ardagh has grown rapidly over the last few
years through debt-funded acquisitions, with the $3 billion
recent acquisition of beverage can assets from Ball and Rexam
transforming the group's balance and scale. While we still
believe there are risks in successfully integrating a merger of
the beverage can assets, these appear to be diminishing. We note
Ardagh's strong record in integrating, finding synergies, and
improving the profitability of its large-scale acquisitions. In
our view, continued success on this front could lead us to
improve our business risk assessment."

As a result of the acquisition, Ardagh is the third-largest
global manufacturer of metal beverage cans, complementing its
leading positions in glass beverage packaging and metal food
packaging. The group now derives about 60% of sales from metal
and 40% from glass packaging. S&P believes Ardagh's business risk
profile has been enhanced by these assets, since they improve
scale and partly mitigate substitution risk from the mature glass
business. Ardagh's primary focus is on the relatively stable
beverage and food end-markets, while the global glass container
and metal packaging markets are relatively consolidated. S&P's
business risk assessment also reflects Ardagh's relatively strong
profitability, underpinned by its scale, efficient cost base, and
ability to manage input cost changes.

Partially offsetting these strengths is a degree of customer
concentration, the capital-intensive nature of its glass
operations, its exposure to volatile raw material prices, and
high energy costs, despite the group's prudent hedging strategy.
This exposure can erode profitability if the group fails to
effectively manage selling prices. The risk relates to contracts
without automatic price-adjustment mechanisms, although we see
limited risk of pricing not reflecting input costs outside of
short-term (three-to-six month) lags. Ardagh's sales also depend
largely on mature western markets, which have limited growth
prospects, albeit with highly stable end-markets.

Weighing on the group's credit profile is Ardagh's considerable
adjusted debt of over EUR10 billion, which translated into
adjusted debt to EBITDA of 9.2x at March 31, 2017. Although S&P
anticipates an uptick in capital expenditure (capex), it
forecasts Ardagh to generate material free operating cash flow
(FOCF) of EUR250 million-EUR300 million in the coming years,
which if allocated to debt repayment could see leverage reduce to
about 7.0x by year-end 2017 and below 6.5x over the next couple
of years.

At the Ardagh Group level (so excluding the PIK toggle notes
issued by the holding company ARD Finance S.A. and S&P's
adjustments), S&P expects reported leverage to drop below 4.5x-
5.0x, which is consistent with what management has intimated as
an acceptable upper limit for the listed entity. These public
statements, following the minority IPO listing, mark a potential
shift in the group's financial policy from its track record of
aggressive debt-funded investments and shareholder returns.
Although S&P's adjusted leverage of the consolidated group will
remain somewhat higher while the PIK toggle notes are in place,
S&P believes that releveraging the group is now less likely.
Further large opportunistic acquisitions cannot be ruled out
given that this has been a core part of the group's growth
strategy, but S&P believes there is now a reduced risk of a
material increase in leverage and extraordinary shareholder
returns; a track record of allocating cash to debt repayment,
combined with increased confidence that debt at the holding
company level will not increase and could therefore also
contribute to ratings upside.

In its base case, S&P assumes:

- The continued successful integration and consolidation of the
   Ball and Rexam assets will have a strong pro forma impact on
   revenues in 2017. We expect organic revenues to increase at
   about 2% in 2017, in line with our GDP forecasts for Europe
   and North America.

- Adjusted EBITDA margins improving to 17.5%-18.0% from 2017
   from 16.0% in 2016, due to expected synergies and operational
   improvements.

- FOCF generation expected to remain robust at about EUR250
   million-EUR300 million.

- No major new acquisitions or divestitures in the near term.

- Stable dividends following the IPO, with about $130 million
   cash outflows used to service the PIK toggle notes and to
   minority shareholders.

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

- Adjusted debt-to-EBITDA ratio by year-end 2017 of about 7.0x,
   dropping to below 6.5x over the next couple of years.

- Adjusted funds from operations (FFO) to debt improving to
   7%-8% from 4.4% in 2016.

- Improving EBITDA interest coverage to about 2.5x following the
   group's recent refinancings, from about 2.0x in 2016.

The positive outlook reflects S&P's view that there is at least a
one-in-three chance of a further upgrade in the next year if the
company successfully integrates its acquired assets and S&P sees
further evidence of a less aggressive financial policy.

S&P could raise the ratings on Ardagh on the successful
integration of recent acquisitions, as shown by continued stable
underlying operating performance, with improved profitability and
cash flows. Ratings upside could also arise if S&P thinks the
group's financial policy has become more creditor-friendly and
S&P believes that FOCF will be utilized primarily for debt
repayment, with a diminished likelihood of leveraging increasing
to above 7.0x.

S&P could revise the outlook to stable if operational performance
weakened, for example due to issues with integrating the group's
new assets; if there are problems with product quality; or if the
loss of key customers means we observe that profitability is not
improving and business risk has not been materially enhanced by
recent acquisitions. S&P could also revise the outlook to stable
if Ardagh's financial risk profile deteriorated, or it no longer
believe that financial policy has become more benign -- for
instance after large pure-debt funded acquisitions or any
increase in shareholder remuneration beyond the group's stated
dividend policy.



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


BPER BANCA: Fitch Rates Subordinated Tier 2 Notes 'BB-'
-------------------------------------------------------
Fitch Ratings has assigned BPER Banca S.p.A.'s (BPER,
BB/Stable/bb) issue of subordinated Tier 2 debt a 'BB-' long-term
rating.

The notes, issued under BPER's EUR6 billion EMTN programme, are
gone-concern securities, qualifying as Tier 2 capital under Basel
III and contain contractual loss absorption features, which will
be triggered only at the point of non-viability of the bank. The
status and subordination treatment of the notes is governed by
Italian law. The notes are listed on the Luxemburg Stock
Exchange.

KEY RATING DRIVERS

The notes are rated one notch below BPER's Viability Rating (VR)
to reflect the below-average recovery prospects for the notes in
case of their non-performance. Fitch apply zero notches for non-
performance risk since the securities qualify as gone-concern
instruments and the write-down of the notes will only occur once
the point of non-viability is reached, and there is no coupon
flexibility prior to non-viability.

RATING SENSITIVITIES

The notes' rating is primarily sensitive to a change of the
bank's VR, from which it is notched. The notes' rating is also
sensitive to a change in notching should Fitch change its
assessment of loss severity or relative non-performance risk.



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


KAZKOMMERTSBANK: Azerbaijan Bank Default Spreads Shockwaves
-----------------------------------------------------------
Nariman Gizitdinov and Olga Voitova at Bloomberg News report that
shockwaves from a default by the biggest bank in Azerbaijan are
spreading to its neighbor on the opposite shore of the Caspian
Sea.

Already burned by the International Bank of Azerbaijan's missed
payment and its effort to wrest a 20% principal writedown in a
proposed debt restructuring, investors are starting to wonder if
Kazakhstan's Kazkommertsbank is the next domino to fall,
Bloomberg says.  Its US$250 million of subordinated bonds are
trading below par only two weeks before maturity, a sign the
bank's ability to come through is in doubt, Bloomberg notes.

"Certainly some bondholders fear" that the Kazakh bank will
follow in the footsteps of the Azeri lender, Bloomberg quotes
Lutz Roehmeyer, who manages about US$2.2 billion including IBA
and Kazkommertsbank bonds at Landesbank Berlin Investment, as
saying.  "The ranking of the bonds is similar. I think the fear
here is simply non-payment."

The crash in oil prices exposed vulnerabilities in the economies
of Kazakhstan and Azerbaijan, the former Soviet Union's second
and third biggest crude producers, by shaking the confidence in
banks and forcing currency devaluations, Bloomberg relays.  The
handling of Kazkommertsbank could risk further backlash among
investors already put off by a decade of defaults, debt
restructurings and bailouts of Kazakh lenders, Bloomberg states.

Kazkommertsbank lost its footing after absorbing twice-defaulted
BTA Bank in 2014, with its finances further upended by oil's
collapse, Bloomberg recounts.  According to Bloomberg, until
recently the top asset holder among Kazakh lenders, it's already
required a KZT2.4 trillion (US$7.7 billion) state bailout via a
purchase of bad assets to pave the way for its acquisition by
Halyk Bank.

Kazkommertsbank has a total of US$3.8 billion in debt, according
to data compiled by Bloomberg.  After its June 2017 notes mature,
the Kazakh lender has a US$300 million bond coming due next May,
followed by US$750 million in December 2022 securities which
could be called in June 2017, Bloomberg discloses.


                             *   *   *

As reported by the Troubled Company Reporter-Europe on March 28,
2017, Moody's Investors Service concluded its review of
Kazkommertsbank's ratings and confirmed its B3 long-term deposit
and the Caa2 senior unsecured debt ratings, to which it assigned
a positive outlook. The rating agency also affirmed Halyk Savings
Bank of Kazakhstan's (Halyk) Ba2 deposit and Ba3 debt ratings and
changed the outlook on these ratings to developing from negative.



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


ARMACELL HOLDCO: Moody's Alters Outlook to Pos. & Affirms B3 CFR
----------------------------------------------------------------
Moody's Investors Service has changed to positive from stable the
outlook on Luxembourg-based equipment insulation and engineered
foams specialist Armacell Holdco Luxembourg S.a r.l..
Concurrently, Moody's affirmed Armacell's B3 corporate family
rating (CFR) and B3-PD probability of default rating (PDR).
Moody's also affirmed the B2 ratings on the EUR622 million backed
senior secured term loan (maturing 2023) and the EUR100 million
backed senior secured revolving credit facility (RCF, maturing
2022), raised by Armacell Bidco Luxembourg S.a r.l. The outlook
on Armacell Bidco Luxembourg S.a r.l. remains stable.

RATINGS RATIONALE

The outlook change to positive recognizes Armacell's robust
performance during the first quarter of 2017 (Q1-17) and good
growth expectations for the next 12 to 18 months. In Q1-17,
Armacell reported consolidated sales and EBITDA (company-
adjusted) increasing by 14.6% and 19.6% year-on-year,
respectively, driven by growth across all key regions and
segments. Combined organic mid-single-digit volume growth in Q1-
17, profit contributions from new business acquisitions, a
material reduction in non-recurring costs as well as a
substantial financial currency gain in 2016, likewise boosted
Armacell's EBITA as adjusted by Moody's to about EUR89 million
(15.4% margin) in the 12 months ended (LTM) March 31, 2017 from
EUR64 million in 2015 (11.9%). Excluding the currency gain,
earnings growth and EBITA margins (13.8%) were still stronger
than anticipated at the time of the group's acquisition by KIRKBI
A/S and Blackstone in early 2016, when Moody's assigned the B3
rating and stable outlook. Despite the sound profitability
improvements, Armacell's Moody's-adjusted leverage of 6.6x
debt/EBITDA (or around 7.1x excluding the currency gain) at
March-end 2017 remains high. This mainly reflects the group's
debt-financed acquisition of the insulation business of US-based
Nomaco for almost EUR55 million in January 2017, which also
confirms Moody's assessment of a fairly aggressive financial
policy of the group. Nonetheless, Moody's expects additional
profits from Armacell's three latest acquisitions (in Brazil and
Denmark, besides Nomaco) to strongly support a further de-
leveraging during 2017. In addition, management has identified
considerable synergy potential from these acquisitions (e.g. in
the areas of freight, selling/marketing or manufacturing
optimizations) of more than EUR10 million over the next two
years. For 2017, Moody's therefore projects Armacell's sales to
grow by 10-12% (of which about 4-5% organically), including
through ongoing insulation penetration, material substitution and
new applications, and EBITA margins to range between 13.5%-14.5%
on a Moody's-adjusted basis. That said, such margins assume that
Armacell will be able to pass on higher raw material costs to its
customers via planned price increases during the remainder of
2017, which have partly soared (rubber prices in particular)
since the beginning of the year.

Moody's also forecasts Armacell's interest coverage to strengthen
to at least 2.5x Moody's-adjusted EBITA/interest over the next
12-18 months (2x as of LTM Q1-17 including the one-off currency
gain in 2016), a level commensurate with a B2 CFR. Besides
projected EBITA growth, the improvement in the interest coverage
will be supported by expected annual interest savings of
approximately EUR7 million following the group's successful
refinancing in March 2017, which included a 100 basis-points
margin reduction on its EUR622 million senior secured term loan,
while the outstanding second lien term loan was repaid in full.
The reduced cash interest will further support the group's free
cash flow generation, which Moody's forecasts to improve to
around EUR20-30 million this year.

LIQUIDITY

Armacell's liquidity is adequate. The group's internal cash
sources, including around EUR32 million of cash on the balance
sheet as of March 31, 2017 as well as expected operating cash
flows before working capital spending of at least EUR60 million
per annum, will more than sufficiently cover its short-term cash
needs. Cash outflows mainly comprise projected capital
expenditures of close to EUR30 million, minor working capital
consumption as well as remaining payments (less than EUR5
million) for recent acquisitions. Liquidity is further bolstered
by Armacell's EUR100 million multi-currency revolving credit
facility, which remained largely undrawn at March-end 2017. While
the facility agreement contains one springing covenant (first
lien senior net leverage ratio, to be tested if the RCF is drawn
by more than 35%), Moody's expects Armacell to preserve
sufficient headroom under this covenant at all times.

STRUCTURAL CONSIDERATIONS

Following the group's March 2017 refinancing, which included the
full repayment of all outstanding second lien debt by upsizing
its first lien term loan to EUR622 million (maturing 2023),
Moody's distinguishes between two layers of debt in Armacell's
capital structure. In its loss-given-default (LGD) assessment
Moody's ranks first the group's senior secured term loan and
EUR100 million RCF (maturing 2022), which are guaranteed on a
pari-passu basis by operating entities accounting for at least
80% of consolidated EBITDA of the restricted group and are
secured by certain assets of the guarantors. These obligations,
together with trade payables, rank ahead of unsecured pensions
and short term lease commitments at the level of operating
entities. While there is no loss absorption capacity left from
the second lien debt post the refinancing, Moody's maintains its
B2 ratings on the senior secured debt instruments, i.e. one above
the B3 CFR. This mainly recognizes the group's still sizeable
junior-ranking pension obligations, allowing for an override of
the LGD indication, but also the strong positioning of Armacell's
CFR at the B3 level as indicated by the positive outlook.
However, Moody's notes that an upgrade of the CFR to B2 would
trigger a reassessment of the instrument ratings, which would
then likely be aligned with the CFR in line with the model
indication in such a scenario. Likewise, if Armacell's
performance were to unexpectedly deteriorate materially,
resulting in a negative rating action, including an outlook
stabilization, Moody's would consider downgrading the ratings on
the senior secured instruments to be in line with the group's
CFR.

Armacell's capital structure also includes approximately EUR330
million worth of preferred equity certificates (PECs) which
Moody's treats as 100% equity due to the long maturity of the
instrument (2045), their non-cash interest characteristic and
full subordination to all other indebtedness of the group.

OUTLOOK

The positive outlook reflects Moody's expectation of Armacell's
sales to grow by a low double-digit rate in 2017, fuelled by
moderate organic volume growth and the first-time inclusion of
its recent acquisitions. Assuming overall stable profitability
such as Moody's-adjusted EBITA margins of around 14% and no
additional debt-funded external growth, this should enable the
group to de-lever sustainably towards 6x Moody's-adjusted
debt/EBITDA over the next 12-18 months.

WHAT COULD CHANGE THE RATING

Moody's might consider upgrading Armacell's ratings, if (1)
Moody's-adjusted EBITA margins above 12% could be sustained, (2)
leverage reduced towards 6x Moody's-adjusted debt/EBITDA, and (3)
interest coverage of 2x Moody's-adjusted EBITA/interest expense
or higher could be maintained.

Downward pressure on Armacell's ratings would build, if (1)
leverage were to materially exceed 7x Moody's-adjusted
debt/EBITDA, (2) interest coverage fell below 1x Moody's-adjusted
EBITA/interest expense, and (3) liquidity were to deteriorate,
driven by negative free cash flow generation or narrowing
headroom under the financial covenant.

PRINCIPAL METHODOLOGY

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

Armacell Holdco Luxembourg S.Ö r.l. is an intermediate holding
company of the Armacell group, headquartered in Capellen,
Luxembourg. Armacell is a global leading producer of equipment
insulation materials and engineered foams primarily used for
insulation across building and various industrial applications.
In the 12 months ended March 31, 2017, the group generated EUR578
million in net sales and EBITDA (before unusual items and
excluding the full-year impact of recent acquisitions) of
EUR104.5 million. Armacell operates 25 production facilities in
16 countries and employs over 2,800 people in 33 countries
worldwide. The group is owned by private equity funds managed by
Blackstone and Danish holding and investment company KIRKBI A/S
(owned by the Kirk Kristiansen family).



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


HIGHLANDER EURO II: Moody's Affirms Ba2(sf) Rating on Cl. E Notes
-----------------------------------------------------------------
Moody's Investors Service upgraded the ratings of the following
notes issued by Highlander Euro CDO II B.V./Highlander Euro CDO
II (Cayman) Ltd.:

-- EUR42M Class C Primary Senior Secured Deferrable Floating
Rate Notes due 2022, Upgraded to Aa1 (sf); previously on Feb 24,
2016 Upgraded to A1 (sf)

-- EUR3M Class C Secondary Senior Secured Deferrable Floating
Rate Notes due 2022, Upgraded to Aa1 (sf); previously on Feb 24,
2016 Upgraded to A1 (sf)

-- EUR28M Class D Primary Senior Secured Deferrable Floating
Rate Notes due 2022, Upgraded to Baa1 (sf); previously on Feb 24,
2016 Upgraded to Baa3 (sf)

-- EUR2.5M Class D Secondary Senior Secured Deferrable Floating
Rate Notes due 2022, Upgraded to Baa1 (sf); previously on Feb 24,
2016 Upgraded to Baa3 (sf)

Moody's also affirmed the ratings on the following notes:

-- EUR479.5M (current outstanding balance of EUR 85.05M) Class A
Primary Senior Secured Floating Rate Notes due 2022, Affirmed Aaa
(sf); previously on Feb 24, 2016 Affirmed Aaa (sf)

-- EUR56M Class B Primary Senior Secured Floating Rate Notes due
2022, Affirmed Aaa (sf); previously on Feb 24, 2016 Affirmed Aaa
(sf)

-- EUR24.5M (current outstanding balance of EUR 20.75M) Class E
Secondary Senior Secured Deferrable Floating Rate Notes due 2022,
Affirmed Ba2 (sf); previously on Feb 24, 2016 Upgraded to Ba2
(sf)

Highlander Euro CDO II B.V. / Highlander Euro CDO II (Cayman)
Ltd., issued in December 2006, is a collateralised loan
obligation (CLO) backed by a portfolio of mostly high-yield
senior secured European loans. The portfolio is managed by CELF
Advisors LLP. The transaction's reinvestment period ended in
December 2013.

RATINGS RATIONALE

The rating actions on the notes are primarily a result of the
deleveraging of the transaction. In the period between the April
2016 and the April 2017 trustee reports, the Class A notes have
been reduced by approximately EUR 203M, and by approximately EUR
206M since the last rating action in February 2016. As a result
of the deleveraging of the transaction, note
overcollateralisation levels have increased. As of the April 2017
trustee report, the Class A/B, Class C, Class D and Class E
overcollateralisation ratios are reported at 182.41%, 140.55%,
121.94% and 110.09% respectively compared with 145.55%, 125.26%,
114.61% and 107.81% as of the April 2016 trustee report. Around
18% of the April 2017 total collateral balance is comprised of
cash which Moody's understands will be used to further delever
the transaction on the next payment date in June 2017.

The key model inputs Moody's uses in its analysis, such as par,
weighted average rating factor, diversity score and the weighted
average recovery rate, are based on its published methodology and
could differ from the trustee's reported numbers. In its base
case, Moody's analysed the underlying collateral pool as having a
performing par of EUR 209.61million, principal proceeds of EUR
47.67 million, defaulted par of EUR 1.24million, a weighted
average default probability of 17.31% (consistent with a WARF of
2701 over a weighted average life of 3.79 years), a weighted
average recovery rate upon default of 43.39% for a Aaa liability
target rating, a diversity score of 21 and a weighted average
spread of 3.45%.

The default probability derives from the credit quality of the
collateral pool and Moody's expectation of the remaining life of
the collateral pool. The estimated average recovery rate on
future defaults is based primarily on the seniority of the assets
in the collateral pool. Moody's generally applies recovery rates
for CLO securities as published in "Moody's Approach to Rating SF
CDOs". In each case, historical and market performance and a
collateral manager's latitude to trade collateral are also
relevant factors. Moody's incorporates these default and recovery
characteristics of the collateral pool into its cash flow model
analysis, subjecting them to stresses as a function of the target
rating of each CLO liability it is analyzing.

Methodology Underlying the Rating Action:

The principal methodology used in these ratings was "Moody's
Global Approach to Rating Collateralized Loan Obligations"
published in October 2016.

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

In addition to the base-case analysis, Moody's conducted
sensitivity analyses on the key parameters for the rated notes,
for which it assumed a lower weighted average recovery rate for
the portfolio. Moody's ran a model in which it reduced the
weighted average recovery rate by 5%; the model generated outputs
that were unchanged for Classes A, B and E and within 2 notches
of the base-case model output for Class C and D.

This transaction is subject to a high level of macroeconomic
uncertainty, which could negatively affect the ratings on the
note, in light of uncertainty about credit conditions in the
general economy. CLO notes' performance may also be impacted
either positively or negatively by 1) the manager's investment
strategy and behaviour and 2) divergence in the legal
interpretation of CDO documentation by different transactional
parties because of embedded ambiguities.

Additional uncertainty about performance is due to the following:

1) Portfolio amortisation: The main source of uncertainty in this
transaction is the pace of amortisation of the underlying
portfolio, which can vary significantly depending on market
conditions and have a significant impact on the notes' ratings.
Amortisation could accelerate as a consequence of high loan
prepayment levels or collateral sales by the collateral manager
or be delayed by an increase in loan amend-and-extend
restructurings. Fast amortisation would usually benefit the
ratings of the notes beginning with the notes having the highest
prepayment priority.

2) Around 5.4% of the collateral pool consists of debt
obligations whose credit quality Moody's has assessed by using
credit estimates. As part of its base case, Moody's has stressed
large concentrations of single obligors bearing a credit estimate
as described in "Updated Approach to the Usage of Credit
Estimates in Rated Transactions," published in October 2009 and
available at
http://www.moodys.com/viewresearchdoc.aspx?docid=PBC_120461.

3) Recovery of defaulted assets: Market value fluctuations in
trustee-reported defaulted assets and those Moody's assumes have
defaulted can result in volatility in the deal's over-
collateralisation levels. Further, the timing of recoveries and
the manager's decision whether to work out or sell defaulted
assets can also result in additional uncertainty. Moody's
analysed defaulted recoveries assuming the lower of the market
price or the recovery rate to account for potential volatility in
market prices. Recoveries higher than Moody's expectations would
have a positive impact on the notes' ratings.

In addition to the quantitative factors that Moody's explicitly
modelled, qualitative factors are part of the rating committee's
considerations. These qualitative factors include the structural
protections in the transaction, its recent performance given the
market environment, the legal environment, specific documentation
features, the collateral manager's track record and the potential
for selection bias in the portfolio. All information available to
rating committees, including macroeconomic forecasts, input from
other Moody's analytical groups, market factors, and judgments
regarding the nature and severity of credit stress on the
transactions, can influence the final rating decision.


VEON LTD: Fitch Affirms BB+ Long-Term IDR, Outlook Stable
---------------------------------------------------------
Fitch Ratings has affirmed VEON Ltd's Long-Term IDR at 'BB+' with
a Stable Outlook. Fitch has also affirmed its senior unsecured
debt rating at 'BB+', including debt issued and guaranteed by its
subsidiaries and intermediary holding companies. Fitch has
assigned an expected rating of 'BB+(EXP)' to the prospective
issue of senior unsecured notes by VEON's subsidiary, VimpelCom
Holdings B.V. The final rating of the prospective notes is
contingent upon the receipt of final documentation confirming
materially to the preliminary documentation reviewed.

VimpelCom Holdings B.V. intends to issue USD-denominated senior
unsecured notes. The notes are expected to be of benchmark size
with a short-to-intermediate tenor. The notes' documentation
includes provisions for negative pledge and cross default of
VEON's significant subsidiaries.

The proceeds from the transaction will be used to finance the
tender offer for existing senior unsecured bonds at PJSC
Vimpelcom due 2018 and 2021 and at VimpelCom Holdings B.V. due
2022. The deal would allow VEON to reduce the amount of
guaranteed debt and Fitch views it as moderately positive for the
ratings.

KEY RATING DRIVERS

No PJSC Structural Subordination: Fitch rates VEON's parent
company debt at the same level as debt issued or guaranteed by
PJSC VimpelCom (PJSC), the operating company in Russia and the
rest of the CIS. This is because the amount of prior-ranking debt
at PJSC, the strongest operating entity within the VEON group,
should remain below 2x of the group's EBITDA and VEON intends to
discontinue relying on PJSC's guarantees for issuing debt at the
holding company. The abovementioned refinancing deal supports
Fitch views that the amount of prior-ranking debt guaranteed or
directly issued by PJSC will decline over the next few years.

Stabilising Financial Performance: Fitch expects VEON to continue
generating stable revenue and EBITDA in its core markets, which
will enable it to gradually reduce leverage. Pressures in Algeria
may continue, but as Algeria is deconsolidated under Fitch's
approach (see below), this would have a less negative impact on
Fitch-defined leverage. VEON has managed to largely stabilise its
financial performance, with organic service revenue growth of
0.5% yoy in 2016, and 2.3% yoy without Algeria. This is a gradual
improvement from -0.2% yoy in 2015 and -1.5% yoy in 2014.

Strong Russian Operations: Fitch expects VEON to remain a strong
mobile player in Russia. The company is the third-largest mobile
telecoms operator in the country with above 20% market shares by
service revenue and subscribers. Fitch believes Russian
competition is likely to become more rational. LLC T2 RTK Holding
(B+/Negative), the smallest and most aggressive operator so far,
has announced plans to discontinue its strategy of being a heavy
price discounter, having established a presence in Moscow, the
largest and most lucrative regional market in Russia.

Less price competition and a gradually recovering macroeconomic
situation in Russia are likely to bring in revenue and EBITDA
margin stabilisation, in Fitch views. VEON's cash-flow generation
in the country is likely to benefit from the company's active
involvement in network sharing with other mobile operators in
Russia.

Substantial FX Mismatch: More than 70% of debt is USD-denominated
and all cash flows are in local currencies. VEON consequently
faces a significant FX mismatch. It is planning to address this
by rebalancing its mix of debt with more funding in local
currencies. A lower FX mismatch could lead to a modest relaxation
of Fitch leverage ratings sensitivities.

Limited Leverage Headroom: VEON's leverage is close to its
downgrade threshold, and remains sensitive to any weakening of
its operating currencies. The rouble strengthened throughout 2016
(and so far in 2017), helping to reduce leverage below Fitch
threshold for a downgrade. Fitch-defined net debt/EBITDA was 2.2x
at end-2016, with Algerian operations deconsolidated and
excluding USD719 million of restricted cash in Uzbekistan, and
Fitch expects this to reach 2.0x at the end of 2018. Deleveraging
is likely to be slow over the next few years with a resumption of
meaningful dividends with approximately USD400 million paid
annually, and the announced share buy-back at GTH.

VEON's access to the cash flows of its Algerian subsidiary (46%
owned by GTH) and its unconsolidated 50/50 JV with CK Hutchison
in Italy is limited. Fitch therefore deconsolidate the results of
Algerian operations from the group's total, with only regular
dividends from Algeria and Italy treated as sustainable cash
flows to the group.

Corporate Governance, Country Risk: Consistent with other
companies that have significant operations in Russia, Fitch notch
down VEON's rating by two notches relative to international
peers. This notching factors in the Russian business and
jurisdictional environment, ownership concentration and VEON's
corporate governance policies, procedures and track record. VEON
is listed on NASDAQ and on Euronext Amsterdam. LetterOne, VEON's
largest shareholder with a 56% economic interest and a 48% voting
stake, is a private Luxembourg-based investment company whose
chairman and principal shareholder is Mr Mikhail Fridman.

DERIVATION SUMMARY

VEON benefits from established market positions across its
operating franchise. In Russia, VEON's largest market, it is the
third-placed mobile operator. Geographical diversification
provides a limited benefit as VEON operates in various countries
which have low sovereign ratings. VEON faces a higher FX mismatch
between debt and cash flow than its similarly rated peers, which
makes its leverage more sensitive to exchange-rate volatility and
leads us to establish tighter leverage rating sensitivities. The
rating incorporates a two-notch discount for the Russian
operating environment and corporate governance risks, which is
usual for companies which have significant operations in Russia.

KEY ASSUMPTIONS

Fitch's key assumptions within the rating case for VEON include
the following:

- flat to low single-digit revenue growth in Russia with a
   stable EBITDA margin of slightly below 40% in 2017-2020;

- mid- to high single-digit revenue growth in Pakistan,
   Bangladesh and Ukraine in 2017-2020;

- stable group EBITDA margin of around 40% in 2017-2020;

- capex at above 17% of revenues in 2017 and gradually declining
   in 2018-2020;

- stable dividends of slightly above USD60 million from Algeria,
   no dividends from Wind in the medium term;

- annual dividends modestly growing from USD400 million per year
   announced in February 2017;

- constant FX rates as of end-2016.

RATING SENSITIVITIES

Future developments that may, individually or collectively, lead
to positive rating action include:

- a record of strong corporate governance structures and
   practices which negate the potential negative influence of the
   dominant shareholder;

- a significant improvement in the macroeconomic operating
   environment, accompanied by sovereign ratings upgrades,
   leading to sustainably more robust free cash-flow generation.

Future developments that may, individually or collectively, lead
to negative rating action include:

- hindrances to cash-flow circulation across the key
   subsidiaries, most importantly in Russia;.

- significant operating pressures leading to lower cash-flow
   generation;

- a sustained rise in Fitch-defined net debt/EBITDA to above
   2.2x, with Algerian operations deconsolidated but reflecting
   regular dividends from Algeria and Italy in EBITDA.

LIQUIDITY

Healthy Liquidity: VEON's liquidity is strong, with USD1.9
billion of unrestricted cash and equivalents on balance sheet at
end-1Q17 (with USD698 million of restricted cash and deposits in
Uzbekistan and Ukraine excluded). This is further supported by a
multi-currency term-loan and RCF (the latter maturing in February
2020) for up to USD2.25 billion.

FULL LIST OF RATING ACTIONS

VEON Ltd

Long-Term Issuer Default Rating: affirmed at 'BB+', Outlook
Stable

Senior unsecured debt: affirmed at 'BB+'

VimpelCom Amsterdam B.V.

Senior unsecured debt: affirmed at 'BB+'

VimpelCom Holdings B.V.

Senior unsecured debt: affirmed at 'BB+'
Senior unsecured notes: assigned 'BB+(EXP)

PJSC VimpelCom

Senior unsecured debt: affirmed at 'BB+'

GTH Finance B.V.

Senior unsecured debt guaranteed by VimpelCom Holdings B.V.:
  affirmed at 'BB+'


VEON LTD: S&P Affirms BB LT Corp. Credit Rating, Outlook Stable
---------------------------------------------------------------
S&P Global Ratings affirmed its 'BB' long-term corporate credit
rating on global telecom operator VEON Ltd. (previously VimpelCom
Ltd.). The outlook is stable.

S&P said, "We have also affirmed our 'BB' long-term corporate
credit rating on The Netherlands-registered VimpelCom Holdings
B.V. and on Russia-registered Vimpel-Communications PJSC, which
are core subsidiaries of VEON Ltd. The outlook on both entities
is stable.

"We have affirmed our 'BB' issue rating on the group's senior
unsecured debt and our 'B+' rating on the structurally
subordinated debt issued by GTH Finance B.V. and guaranteed by
VimpelCom Holdings.

"At the same time, we assigned a 'BB' issue rating to the
proposed senior unsecured notes to be issued by VimpelCom
Holdings to finance an any-and-all tender offer on the existing
VimpelCom Holdings and PJSC VimpelCom bonds."

The affirmation reflects S&P's expectation that VEON will
demonstrate stable operating performance in 2017-2019, with
moderate organic growth in revenues potentially offset by
exchange rate volatility and margin pressure, in particular, in
Russia and Algeria. In S&P's view, VEON would be able to
gradually deleverage, with its adjusted debt to EBITDA dropping
below 2.5x (without it 50% Italian joint venture [JV] WIND
Telecomunicazioni S.p.A. [WIND]) by 2019 from about 2.7x at end-
2016 and 1.8x a year before. Including 50% in the WIND JV, S&P
expects that the adjusted leverage will decrease below 3.0x by
2019. This is supported by S&P's expectation of improving cash
generation capacity on the back of VEON's ongoing business
transformation and due to lower capital expenditures (capex).

S&P said, "We expect that VEON's ongoing debt rebalancing -- in
which it is moving part of group debt to the holding company
level -- should streamline its currently complex capital
structure, decrease its funding costs, which will also reduce
structural subordination of debt at the parent level, and
gradually reduce its foreign exchange mismatch. Currently most of
VEON's debt is in U.S. dollars while operating cash flows are
largely generated in local currencies. In particular, in 2016
total operating revenues in functional currencies were relatively
stable but in U.S. dollar terms (VEON's reporting currency)
reduced by 8% year on year. In the near term, we expect that
foreign currency risk will continue to hurt the group's operating
performance.

"We also factor in that VEON is exposed to regulatory risk, in
particular, in Russia where implementation of data storage law,
which should come into force July 1, 2018, might require material
capital outlay. That said, we currently do not factor in our base
case any cash outflows related to this law, since we understand
there is a lot of uncertainty about the amounts of capital
investment and the timeline of the law's implementation."

The stable outlook on VEON reflects S&P's view that the group's
adjusted debt to EBITDA will remain close or below 2.5x through
our 2019 outlook horizon, reflecting the deconsolidation of WIND,
and close to 3.0x pro forma for VEON's 50% stake in the JV.

A downgrade might result if operating performance falls
significantly short of our base-case expectations and results in
S&P Global Ratings' adjusted leverage rising above 3.0x in 2016,
reflecting the deconsolidation of WIND, and 3.5x including 50% of
the JV's debt.

A negative rating action may also result from a change in the
group's financial policy related to exit of Telenor, depending on
the strategy of the new shareholder and the impact of the exit on
VEON's liquidity and capital structure.

To consider an upgrade, S&P would take into account important
factors such as:

- VEON's operating performance relative to S&P's base-case
   expectations;

- S&P's view of VEON's future financial policy; and

- VEON's ability to sufficiently strengthen its metrics,
   including S&P Global Ratings' adjusted debt to EBITDA (WIND
   having been deconsolidated) below 2.0x without the JV and 2.5x
   factoring in the JV's debt.

S&P said, "We have assigned a 'BB' issue rating to the proposed
bond to be issued by VimpelCom Holdings. This is because we
anticipate that the degree of structural subordination will
sharply drop to above 30% from above 40% after the on-going
reshuffling of the group's debt structure is complete by early
2018, and that the latter is mitigated by VEON's diverse asset
structure and a wide portfolio of assets (including participation
in the Italian JV). We also take into view the presence of
downstream intercompany loans and gradual deleveraging of the
Russian operating entity, which is the key revenue and EBITDA
generating unit of the group.

"We have affirmed our 'BB' rating on the group's senior unsecured
debt. The affirmation of our 'B+' rating on the $1.2 billion
bonds issued by GTH Finance B.V. reflects that they are
structurally subordinated to other holding company debt."



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


GLOBALWORTH REAL: Moody's Assigns Ba2 CFR, Outlook Stable
---------------------------------------------------------
Moody's Investors Service has assigned a first-time corporate
family rating (CFR) of Ba2 to Globalworth Real Estate Investments
Limited (Globalworth), a leading real estate company based in
Bucharest, Romania. The outlook on the rating is stable.

"Globalworth's Ba2 rating reflects its strong market position as
the leading office landlord in Romania. The company enjoys a
diversified international tenant base, long and triple-net leases
supporting stable cash flows," says Emmanuel Savoye, a Moody's
Assistant Vice President and lead analyst for Globalworth.

Globalworth owns and manages a EUR1.0 billion property portfolio
primarily located in Bucharest's new business center district.
Excluding developments, the company's 13 assets span
approximately 500 thousand square metres of gross lettable area
and generate EUR51.4 million contracted annual net rental income
as of 31 December 2016. Including the recently acquired Dacia
Warehouse and new leases signed, the occupancy rate is 89% on
standing commercial properties as of May 2017. Globalworth is
headquartered in Bucharest and listed on the London AIM market
with a market capitalization of EUR675 million as of May 22,
2017.

RATINGS RATIONALE

Globalworth's Ba2 CFR and stable outlook reflect (i) the high
quality of its Grade A office portfolio, (ii) its strong tenant
base made up mostly of multinationals and financial institutions,
(iii) a 6.5 year long weighted average lease maturity, (iv)
moderate leverage in terms of gross debt to total assets, as well
as a good liquidity and a high level of unencumbered assets pro-
forma for the bond issuance, (v) experienced management team and
strategic investor (Growthpoint Properties, rated Baa2).

Partly offsetting these strengths are (i) the concentration in
Bucharest's central business district area and in a small number
of properties, (ii) positive track record but limited in time
since the recent incorporation of the company in February 2013,
(iii) the willingness to grow into new markets that would improve
diversification but also introduce execution risks in the short
term.

Moody's expects continued good occupier demand for the company's
prime properties and good investor appetite for Romania's prime
commercial real estate to sustain the company's cash flows and
values. Romania (Baa3 stable) benefits from a strong
macroeconomic environment with economic growth above the EU
average in recent years. However, the market is not as mature as
in core Western European countries and is subject to more
volatility in a recession scenario that could affect property
values. Moody's notes positively that the vast majority of the
leases are denominated in Euro and largely mitigate currency
risk.

The company achieved significant growth since its relatively
recent incorporation in 2013 through acquisitions and development
projects. The portfolio is more mature and stabilised, with a
high level of occupancy and a limited proportion of development
projects representing approximately 13.1% of total assets as of
December 31, 2016 (8.1% excluding the Dacia Office which presents
lower risk due to being already 100% pre-let). Moody's expects
the company to continue its growth trajectory, possibly through
acquisitions in new markets in Central Europe. While Moody's see
an expansion in new markets as positive in terms of
diversification, it would also introduce execution risks due to
the absence of track record of operating in other countries or if
new acquisitions were to result in higher vacancies. A successful
expansion into new countries in line with the track record
achieved in Romania would improve, in Moody's views, the overall
credit standing of Globalworth.

RATIONALE FOR STABLE OUTLOOK

The company is well positioned in the Ba2 rating. The stable
outlook reflects Moody's expectations that the company will
continue to generate stable cash flows from its existing
portfolio, and that commercial real estate and economy
fundamentals will remain strong in Romania. Moody's also expects
that any expansion in new countries will not lead to significant
increases in leverage because of the company's financial policy
of maintaining loan to value below 35%, and that the company will
maintain a high level of unencumbered assets.

FACTORS THAT COULD LEAD TO AN UPGRADE

* Maintain current low level of leverage, as measured by
   Moody's-adjusted gross debt/assets

* Fixed charge cover above 2.5x on a sustained basis

* Further geographical diversification

* Successful expansion into new countries in line with the track
   record achieved in Romania, leading to growth in rental income
   and low vacancy

FACTORS THAT COULD LEAD TO A DOWNGRADE

* Effective leverage sustained above 45% as measured by Moody's-
   adjusted gross debt/assets

* Fixed charge cover sustainably below 1.5x

* Weakening of liquidity

* Weakness in the Romanian economy impacting negatively property
   values in Euro currency value equivalent

* Failure to execute the expected bond issuance

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Global Rating
Methodology for REITs and Other Commercial Property Firms
published in July 2010.



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


BANK ROSSIYSKY: Fitch Puts BB- IDRs on Rating Watch Negative
------------------------------------------------------------
Fitch Ratings has placed Bank Rossiysky Capital's (RosCap) Long-
Term Issuer Default Ratings (IDRs) of 'BB-' on Rating Watch
Negative (RWN).

KEY RATING DRIVERS
IDRS, SUPPORT RATING, SUPPORT RATING FLOOR (SRF), SENIOR DEBT

The placement of RosCap's Long-Term IDRs, Support and senior debt
ratings on RWN reflects announced plans to transfer the bank from
the current owner Depositary Insurance Agency (DIA), as a part of
its reorganisation, to the Agency for Housing Mortgage Lending
(AHML; BBB-/Stable) by end-2017. In Fitch's view, support for
RosCap from AHML is currently uncertain, as the transaction seems
to be a government directive, and AHML has yet to formulate a
strategy incorporating RosCap in its operations, while the scope
of future integration and synergy is not yet clear.

In addition the ability of AHML to support RosCap on its own
could be limited given that RosCap is comparable in size, while
its credit profile is vulnerable notwithstanding the expected
balance sheet clean-up/recapitalisation prior to transfer. Future
support may ultimately flow from the broader Russian government,
but propensity/flexibility is hard to ascertain at this stage.

Fitch expects to resolve RWN once transfer to AHML is completed
and there is more clarity about the latter's strategy with
respect to RosCap, as well as support propensity for the bank
from AHML/broader Russian authorities.

Fitch has not assigned a Viability Rating (VR) to RosCap due to
its previously limited stand-alone commercial operations and its
increased involvement in DIA's policy role. Fitch will assess the
scope for assigning the VR after the transfer and once there is
more clarity about the bank's business model and integration, or
a lack of thereof, within AHML.

Prior to the transfer DIA will recapitalise the bank through the
injection of new equity and conversion of preferred shares and
debt and buy out certain assets at gross value. However,
offsetting some of this new capital, in 2018 the bank will
increase to RUB15 billion its net exposure to a defaulted
construction company SU-155, which will likely need to be heavily
reserved. Fitch estimates that post these transfers/
recapitalisation the bank's net problem assets (including SU-155
exposure) will still be a sizable 0.6x of Fitch core capital
(FCC), while FCC will be moderate at around 10% of risk-weighted
assets (RWAs).

Further, the bank's profitability is likely to remain weak due to
high funding costs and opex, which coupled with residual
problem/high-risk exposures suggest that future capital support
may be needed even after the clean-up.

The affirmation of the bank's Short-Term IDR at 'B' reflects
Fitch's base case expectation that the bank's Long-Term IDRs are
unlikely to be downgraded below the 'B' range.

RATING SENSITIVITIES

IDRS, SUPPORT RATING, SRF, SENIOR DEBT

IDRs can be downgraded if Fitch views the bank's role as being of
limited importance for AHML or if there is a lack of integration
between them. IDRs may stabilise at 'BB-' if RosCap becomes
firmly integrated into AHML's strategy/operations providing
services core to the latter's mandate.

Also the bank's IDRs could be downgraded prior to the transfer to
AHML if (i) the Russian Federation is downgraded; (ii) if the
propensity of DIA/authorities to provide support weakens.

The rating actions are:

RosCap

Long-Term Foreign and Local Currency IDRs: 'BB-'; placed on RWN
Short-Term Foreign Currency IDR: affirmed at 'B'
Support Rating: '3'; placed on RWN
Support Rating Floor: 'BB-'; placed on RWN
Senior unsecured debt: 'BB-'; placed on RWN



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


PRISA: Creditors Taps Houlihan Lokey Amid Financial Woes
--------------------------------------------------------
Charles Penty at Bloomberg, citing El Confidencial, News reports
that HSBC, BNP Paribas and other creditors of Promotora de
Informaciones (Prisa), including Och-Ziff Capital Management,
have hired Houlihan Lokey to demand steps to shore up the
company's finances.

According to Bloomberg, the news website, citing people close to
the creditor group, said the solution for guaranteeing Prisa's
viability would include the sale of Portuguese TV unit Media
Capital and a capital increase.

El Confidencial said creditors also want change of chairman and
removal of the company's CEO, Bloomberg relates.

Promotora de Informaciones S.A. -- http://www.prisa.com/-- is a
Spain-based holding company engaged in various media activities.
The Company has six business areas: publishing, education and
training (Grupo Santillana publishes textbooks and books of
general interest); press (El Pais Internacional is engaged in the
distribution of news material and services to other newspapers
and publications worldwide); radio (Union Radio is a group
broadcasting worldwide); audiovisual (PRISA offers services and
products, including Pay TV, thorough the satellite platform
DIGITAL+, and free-to-view through the channel Cuatro); online
(Prisacom is committed to the development of multimedia content
with broadcasting for Internet-based TV) as well as commercial &
marketing (Sogecable Media SA manages all the advertising on the
Company and its group's media).  The Company is present in 22
countries, such as Portugal, Brazil or the United States.



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


HOIST KREDIT: Moody's Raises LT Sr. Unsec. Debt Rating From Ba1
---------------------------------------------------------------
Moody's Investors Service has upgraded Hoist Kredit AB's (publ)
(Hoist) long- and short-term foreign-currency issuer rating to
Baa3/Prime-3 from Ba1/Not Prime respectively, long-term foreign-
currency senior unsecured debt rating to Baa3 from Ba1, and
foreign-currency subordinated debt rating to Ba3 from B1.
Concurrently, the rating agency has also upgraded Hoist's
foreign-currency senior unsecured and subordinated EMTN programme
ratings to (P)Baa3 from (P)Ba1, and (P)Ba3 from (P)B1
respectively, as well as the short-term foreign-currency senior
unsecured programme rating to (P)Prime-3 from (P)NP. Hoist's ba3
standalone baseline credit assessment (BCA) and Adjusted BCA, and
its Baa3(cr)/P-3(cr) Counterparty Risk Assessment are not
affected by the action.

The rating action follows the successful placement of Hoist's
EUR80 million, 10 year Tier 2 subordinated debt under its EMTN
programme, which was completed on May 19, 2017. The upgrade
reflects the rating agency's assessment that the debt issuance
materially increases the loss absorption cushion available to
creditors in the unlikely event of a failure.

This rating action concludes the review for upgrade on Hoist's
ratings initiated on May 3, 2017. The full list of the affected
ratings can be found at the end of this press release.

RATINGS RATIONALE

The upgrade of Hoist's issuer, senior unsecured, subordinated
debt and programme ratings is driven by the material increase in
the loss-absorbing cushion provided by the bank's liability
structure under Moody's Advanced Loss Given Failure (LGF)
Analysis. This analysis is conducted in the context of the
European Bank Recovery and Resolution Directive, which allows for
the bail in of creditors in case of a bank failure.

Moody's has assessed the size and impact of the newly issued
subordinated debt against Hoist's balance sheet structure as of
March 2017, which indicates that the increased volume of
subordinated debt substantially enhances the cushion of
protection for senior creditors, resulting in extremely low loss-
given-failure under Moody's Advanced LGF analysis. At the same
time, subordinated creditors would face a moderate loss-given-
failure due to the larger amount of debt ranking pari passu with
the new subordinated debt-holders, allowing for losses to be
spread more widely. This results in a Preliminary Rating
Assessment (PRA) of baa3 for senior debt, three notches above the
BCA, and of ba3 for subordinated debt, at the same level as the
BCA. Moody's assessment also incorporates the agency's forward-
looking expectations with regards to the stability of the
subordinated debt in the liability structure of Hoist and the
pace of growth of the company over the medium term.

Since Moody's considers the probability of sovereign support for
Hoist's senior liabilities to be low, the ratings do not
incorporate uplift from government support.

RATIONALE FOR THE STABLE OUTLOOK

The outlook on the long-term issuer and senior unsecured ratings
is stable, reflecting the expectation that Hoist's credit
fundamentals and liability structure will remain in line with
current ratings over the next 12 to 18 months.

   -- WHAT COULD MOVE THE RATINGS UP/DOWN

An upgrade of Hoist's issuer and senior debt ratings would be
prompted by an upgrade of the company's BCA. At the same time the
subordinated ratings could be upgraded either as a result of an
upgrade of the BCA or if the company significantly increases the
size of its subordinated debt. Hoist's BCA could be upgraded if
the company: (1) significantly improves its profitability on a
sustained basis without increasing earnings volatility; (2)
increases capital targets and demonstrates ability to maintain
high capital levels; and/or (3) diversifies its business model.

Hoist's BCA could be downgraded if: (1) Hoist materially
increases its market funding reliance; (2) it experiences a
protracted decrease in profitability or in its solvency ratios;
and/or (3) the rating agency's assessment of Hoist's asset risk
deteriorates. In terms of the issuer, senior and subordinated
ratings, a downward movement is likely in the event of a
downgrade of Hoist's BCA, and/or a lower notching from Moody's
Advanced LGF analysis.

LIST OF AFFECTED CREDIT RATINGS

Issuer: Hoist Kredit AB (publ)

Upgrades:

-- LT Issuer Rating (Foreign Currency), Upgraded to Baa3 from
    Ba1, Outlook Changed To Stable From Rating Under Review

-- ST Issuer Rating (Foreign Currency), Upgraded to P-3 from NP

-- Senior Unsecured Regular Bond/Debenture, Upgraded to Baa3
    from Ba1, Outlook Changed To Stable From Rating Under Review

-- Subordinate, Upgraded to Ba3 from B1

-- Senior Unsecured MTN Program, Upgraded to (P)Baa3 from (P)Ba1

-- Subordinate MTN Program, Upgraded to (P)Ba3 from (P)B1

-- Other Short Term Program, Upgraded to (P)P-3 from (P)NP

Outlook Actions:

-- Outlook, Changed To Stable From Rating Under Review

PRINCIPAL METHODOLOGY

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



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=============


MRIYA AGRO: Agrees on Debt Restructuring Terms with IFC
-------------------------------------------------------
Kateryna Choursina at Bloomberg News reports that Mriya Agro
Holding agreed with International Financial Corporation about the
terms of restructuring for its debt.

According to Bloomberg, IFC and Mriya agreed on the split of debt
into secured/unsecured portions and on the terms of restructuring
for secured debt.

The unsecured debt will be restructured on same terms as other
unsecured creditors, Bloomberg states.

The deal with IFC completes the process of agreeing debt
restructuring terms with secured creditors, Bloomberg notes.

The company will now be able to begin restructuring its unsecured
debt, Bloomberg discloses.

As reported by the Troubled Company Reporter-Europe on Sept. 21,
2015, Interfax-Ukraine related that in August 2014, Mriya
reported arrears worth US$9 million of interest earnings and
nearly US$120 million of debt held under the company's
obligations, Interfax-Ukraine disclosed.  Mriya's total debt
equaled US$1.3 billion when the company's bankruptcy was
announced, Interfax-Ukraine noted.

Mriya Agro Holding is a Ukrainian agriculture company.



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U N I T E D   K I N G D O M
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BRITISH AIRWAYS: S&P Hikes LT Corp. Credit Rating to 'BB+'
----------------------------------------------------------
S&P Global Ratings said it has raised its long-term corporate
credit rating on U.K. based British Airways PLC (BA) to 'BB+'
from 'BB'. The outlook is stable.

S&P said, "We also raised our long-term issue rating on BA's
class B enhanced equipment trust certificates (EETCs) to 'BBB+'
from 'BBB' and affirmed the class A EETCs at 'A'. The 'A' rating
is capped at the rating on liquidity facility provider,
Landesbank Hessen-Thueringen Girozentrale (A/Stable/A-1).

"At the same time, we raised to 'B+' from 'B' our issue ratings
on BA subsidiary British Airways Finance (Jersey) L.P.'s EUR300
million notes."

IAG and BA's financial credit metrics have materially improved
in recent years. S&P expects IAG's S&P Global Ratings-adjusted
FFO to debt to remain between 30%-45% in the short-to-medium term
due to the ongoing strong performance of its subsidiaries, and
despite IAG's announcement of a EUR500 million share-buy-back
program in 2017.

IAG was founded in 2010, after the merger between BA and IBERIA,
to play a major role in consolidating the European airline
industry. IAG's financial ratios could therefore be potentially
affected by further acquisitions, however, S&P currently does not
include this in our base case. BA's ratio of adjusted FFO to debt
declined to 32% in 2016 from 37% in 2015, mainly due to the
weakening pound sterling compared to the U.S. dollar, which led
to an increase in leasing obligations as these are mainly U.S.
dollar-denominated.

In S&P's view, the potential adverse implications stemming from
the Brexit vote have not changed materially in the last 12
months. The group has demonstrated resilient operational
performance and we think that its financial strength is
sufficient to cope with respective headwinds. However, these
headwinds are currently difficult to quantify. The main profit
engine for BA is its business class segment for transatlantic
flights departing from its hub Heathrow. BA's management is
clearly focused on this segment, with the company expected to
invest GBP400 million in the customer experience over the next
couple of years. BA's business and leisure traffic is exposed to
the strength of the U.K.
economy and notably to London's role as a leading international
touristic, economic, and financial center. S&P currently expects
the U.K.'s GDP to grow by 1.7% (real) in 2017 and by 1.2% in
2018, as compared with 1.8% in 2016 and 2.2% in 2015.

BA shows better profitability levels compared to European legacy
carrier peers, realizing the benefits from its good grip on cost
control, complemented by solid passenger volumes and load
factors. According to our current base case, BA will likely
sustain its ratio of adjusted FFO to debt above 30%, which we
view as rating commensurate and which incorporates the agreement
with the trustees of BA's main pension schemes. The company
agreed to make minimum annual payments to the scheme of GBP300
million per year for the New Airways Pension Scheme until 2027.
This scheme has a GBP2.8 billion deficit based on actuarial
assumptions, while the second largest scheme (Airways Pension
Scheme) has a deficit of GBP680 million based on the same
calculation method. We have only added a GBP627 million pension
deficit to our debtcalculations in line with International
Financial Reporting Standards.

S&P continues to assess BA's competitive position as strong.
However, the company's business risk profile is somewhat tempered
by the fundamental characteristics of the airline industry, such
as BA's susceptibility to European and global economic cycles,
oil price fluctuations, high capital intensity, and unforeseen
events including global terrorism and disease outbreaks. The
nature of the airline business and BA's meaningful exposure to
the transatlantic premium market has led to significant volatile
profitability over the last economic cycle. These factors are
partially offset by BA's ability to use its market position, with
about 50% of the landing and takeoff rights at Heathrow, and
generate higher profitability than its peers operating
under similar business models.

Low-cost, long-haul flights have been discussed for years and
some airlines offer this service -- mainly from secondary
airports -- but the market segment is still small. IAG will now
start a low-cost service to America from Barcelona under the new
brand "Level" (operated initially by IBERIA). Furthermore, BA's
main hub, Heathrow, is planning to build a third runway, which
would increase landing and takeoff rights at this slot-
constrained airport. Heathrow hopes to receive full approval by
the end of 2020 and begin construction, completing the third
runway in 2025. S&P will monitor these two developments closely,
but S&P does not think that they will have a material impact on
our ratings on BA in the next two years.

On May 27, BA was affected by a major IT system failure due to a
power supply shortage which caused server disruptions to its
flight operations worldwide and continued to affect BA's service
during the long memorial weekend. S&P thinks that this will be a
one-off event and therefore assume that the IT failure will only
marginally affect BA's credit metrics.

S&P continues to view BA as a strategically important subsidiary
for IAG based on its view that:

-- It is a profitable and successful business on a stand-alone
    basis;

-- It is unlikely to be sold;

-- It is important to IAG's long-term strategy; and

-- IAG's management would support BA if it falls into financial
    difficulty.

The long-term ratings on strategically important subsidiaries are
capped at the level of the GCP, which S&P currently assesses at
'bb+' based on IAG's overall credit profile.

The stable outlook reflects S&P's view that the group's financial
strength is sufficient to cope with potential economic headwinds
stemming from a weaker U.K. economy and currency fluctuation. S&P
thinks that BA or IAG will maintain FFO to debt at or above 30%
over the next two years.

S&P could raise the ratings on BA if IAG and BA sustain their
strong competitive position, with FFO to debt above 45%. This
could happen if good operating performance continues and free
cash flow is not used for acquisitions, large fleet expansion, or
shareholder remunerations.

S&P could lower the ratings if adjusted FFO to debt dropped below
30%. In our view, this could happen if the oil price increased to
above $65 per barrel on a sustainable basis and the increased
costs are not compensated by higher average ticket prices.


CPUK FINANCE: Fitch Rates Proposed Cl. B3 & B4 Notes 'B(EXP)'
-------------------------------------------------------------
Fitch Ratings has assigned CPUK Finance Ltd.'s (CPUK) upcoming
class A4 tap issue notes an expected rating of 'BBB(EXP)' and a
'B(EXP)' expected rating to the proposed new class B3 and B4
notes. The Outlooks are Stable. The final ratings are contingent
upon the receipt of final documentation conforming materially to
the information already received.

Fitch expects the existing class A notes to be unaffected on
completion of the transaction.

The ratings consider CPUK's demonstrated ability to maintain high
and stable occupancy rates, increase price in excess of inflation
and, ultimately, deliver strong financial performance with an 11
year EBITDA CAGR of 8.7% (6.6% per parc) since 2006. Fitch
expects the proactive and experienced management to continue
leveraging on the good quality estate and deliver steady
financial performance over the medium term, despite the weaker UK
economic outlook and increased uncertainty following the UK
referendum vote to leave the EU.

The extensive creditor protective features embedded in the debt
structure support the class A ratings, while deep subordination
of the class B notes weighs negatively on their ratings. The
ratings also consider CPUK's exposure to the UK holiday and
leisure industry, which is highly exposed to discretionary
spending.

TRANSACTION SUMMARY

The transaction is a GBP100 million tap of the outstanding GBP140
million class A4 notes and GBP730 million new issue and full
refinancing of the outstanding GBP560 million class B notes.
Terms and conditions of the class A notes are unchanged. Class B
legal final maturity (LFM) has been extended by five years to
2047 in line with time to LFM at 2012 transaction close. This
allows more time for repayment, and is reflected in improved
synthetic debt service coverage ratio (DSCR) metrics.

Pro-forma net debt to EBITDA based on full year EBITDA to April
2017 of GBP213 million is 4.8x and 8.3x through the class A and B
notes, respectively, vs. 5.2x and 8.0x at the last partial
refinancing in June and August 2015, respectively. Projected
deleveraging and full repayment dates of the class A and B notes
under Fitch's base case are in line with 2015. The class B notes'
full repayment date is unchanged despite a slight loosening in
the gross debt to EBITDA distribution covenant to 7.75x from
7.5x.

Performance Update

Recent performance has been strong and in line with the long-term
trend. For the 36 weeks ending December 29, 2016, revenue was up
3.9% to GBP312.6 million and EBITDA was up 5.6% to GBP155.2
million. Average daily rate (ADR) and rent per available lodge
night (RevPAL) were up 6.0% and 4.9% to GBP185.16 and GBP179.59,
respectively. Center Parcs Limited's (CPL) capex programme has
continued, with 2.5% of accommodation offline for upgrade during
the 36 weeks ending December 29, 2016. EBITDA for the 36 weeks
grew by GBP8.2 million or 5.6%. The 11-year revenue and EBITDA
CAGRs to FY17 remain strong at 5.8% and 8.7% (3.6% and 6.6% on a
per-parc basis), respectively.

Fitch Cases

Under Fitch's base case, EBITDA is projected to grow at a long-
term CAGR of 0%. However, EBITDA generated is higher than the
CAGR suggests given the convex shape of the curve. This reflects
CPUK's industry risk, whereby strong recent historical
performance is reflected over the short to medium-term forecasts.
However, beyond 10 years revenue visibility reduces resulting in
a projected decline over the long term. Fitch forecasts free cash
flow (FCF) to grow at a CAGR of -1.0% after taking capex, working
capital and tax into account.

The resulting deleveraging profile envisages class A and B full
repayment by 2027 and 2034 respectively, broadly in line with
2015. Both class A and B synthetic annuity based DSCR metrics
have slightly improved to 2.8x and 1.9x vs. 2.2x and 1.6x, due to
lower class A leverage and lower cost of debt (4.83% vs. 4.97%
class A weighted average), as well as extended legal final
maturity for the class B notes.

KEY RATING DRIVERS

KRD - Industry Profile: Weaker - Operating Environment Drives
Assessment
Sub-KRDs: operating environment - 'weaker', barriers to entry -
'midrange', sustainability - 'midrange'

The UK holiday parks sector has both price and volume risk, which
makes the projection of long-term future cash flows challenging.
It is highly exposed to discretionary spending and to some extent
commodity and food prices. Events and weather risks are also
significant, with Center Parcs (CP) having been affected by a
fire and minor flooding in the past. Fitch views the operating
environment as a key driver of the industry profile, resulting in
its overall 'weaker' assessment.

In terms of barriers to entry, there is a scarcity of suitable,
large sites near major conurbations, which is credit positive.
Sites require significant development time and must adhere to
stringent planning processes, and development cost is
prohibitively high. A high level of capital spending is also
required to maintain site quality. However, the wider industry is
competitive and switching costs are low, in Fitch views. The
offering is also exposed to changing consumer behaviour (e.g.
holidaying abroad or in alternative UK sites).

KRD - Company Profile: Stronger -Strong Performing Market Leader
Sub-KRDs: financial performance - 'stronger', company
operations - 'stronger', transparency - 'stronger', dependence on
operator - 'midrange', asset quality - 'stronger'

CP is the UK's leading family-orientated short break holiday
village operator, offering around 830 villas per site set in a
forest environment with significant central leisure facilities.
Fitch views CP as a medium-sized operator with FY17 (52 weeks
ended April 2017) EBITDA of GBP213 million, and it benefits from
some economies of scale. Revenue and EBITDA growth has been
consistent through the cycle.

Growth has been driven by villa price increases, bolstered by
committed development funding upgrading villa amenities and
increasing capacity. An aspect of revenue stability is the high
repeating customer base, with around 60% of guests returning over
five years and 35% within 14 months. CP also benefits from a high
level of advanced bookings. There are no direct competitors and
the uniqueness of its offer differentiates the company from
camping and caravan options or overseas weekend breaks.
Management has been stable, with the current CEO having been in
place since 2000 and there are no known corporate governance
issues.

The CP brand is fairly strong and the company benefits from other
brands operated on a concession basis at its sites. As the
business is largely self-operated, insight into underlying
profitability is good. An increasing portion of food and beverage
revenues are derived from concession agreements, but these are
fully turnover-linked, thereby still giving some visibility of
the underlying performance.

CP is reliant on high capex in order to keep its offer current
and remains a well-invested business with around GBP580 million
of capex since 2006 (around GBP350 million of
investment/refurbishment capex). Accommodation upgrades have now
been completed, with the final 121 units of accommodation
upgraded by end-December 2016. A new, less transformational
refurbishment cycle began in April 2016, with upgrade costs
roughly half those of Project Spring. The first stage covering
125 units was completed in June 2016. The second stage covering a
further 125 units at Elveden is expected to complete during May
2017.

KRD - Debt Structure: Class A - Stronger, Class B - Weaker;
Structure Favours Class A
Sub-KRDs: debt profile - class A: 'stronger', class B: 'weaker',
security package - class A: 'stronger', class B: 'weaker',
structural features - class A: 'stronger', class B 'weaker'

All principal is fully amortising via cash sweep and the
amortisation profile under Fitch's base case is commensurate with
the industry and company profile. There is an interest-only
period in relation to the class A notes, but no concurrent
amortisation. The class A notes also benefit from the
deferability of the junior-ranking class B. Additionally, the
notes are all fixed-rate, avoiding any floating-rate exposure and
swap liabilities.

The class B notes are sensitive to small changes in operating
stress assumptions and particularly vulnerable towards the tail
end of the transaction. This is because large amounts of accrued
interest may have to be repaid, assuming the class B notes are
not repaid at their expected maturity. The sensitivity stems from
the interruption in cash interest payments upon a breach of the
class A notes' cash lockup covenant (at 1.35x FCF DSCR) or
failure to refinance any of the class A notes one year past
expected maturity.

The transaction benefits from a comprehensive WBS security
package, including full senior-ranking asset and share security
available for the benefit of the noteholders. Security is granted
by way of fully fixed and qualifying floating security under an
issuer-borrower loan structure. The class B noteholders benefit
from a topco share pledge structurally subordinated to the
borrower group, and as such would be able to sell the shares upon
a class B event of default (e.g. failure to refinance in 2022).
However, as long as the class A notes are outstanding, only the
class A noteholders are entitled to direct the trustee with
regard to the enforcement of any borrower security (e.g. if the
class A notes cannot be refinanced one year after their expected
maturity).

Fitch views the covenant package as slightly weaker than other
typical WBS deals. The financial covenants are only based on
interest cover ratios (ICR) as there is no scheduled amortisation
of the notes. However, the lack of DSCR-based cash lockup
triggers and covenants is compensated by the cash sweep feature.
At GBP80 million, the liquidity facility is appropriately sized
covering 18 months of the class A notes' peak debt service. The
class B notes do not benefit from any liquidity enhancement but
benefit from certain features while the class A notes are
outstanding such as the operational covenants.

PEER GROUP

The most suitable WBS comparisons are WBS pubs, and to some
extent Arsenal Securities plc (BBB/Stable), a WBS transaction of
Arsenal football club ticket receipts, as they share exposure to
consumer discretionary spending meaning there is some commonality
in the revenue risk. Arsenal is arguably less exposed to this
risk given the strong established fan base. CP has proven to be
less cyclical than the leased pubs with strong performance during
major economic downturns. However, with just five sites, Fitch
considers CP less granular than WBS pub transactions. In terms of
projected metrics, CP tends to have higher coverage at a given
rating level than the Fitch rated pubcos, reflecting the 'weaker'
industry profile assessment, vs. 'midrange' for pubs.

RATING SENSITIVITIES

Future developments that may, individually or collectively, lead
to negative rating action include:

Class A notes

- A deterioration of the expected leverage profile with net debt
   to EBITDA above around 3.5x by 2022

- A full debt repayment of the notes beyond 2027 under Fitch's
   base case

- A fall of Fitch- synthetic FCF DSCR metrics below around 2.0x
   under Fitch's base case

Class B notes

- Under Fitch's base case, the class B notes are expected to be
   repaid by around 2034, with a median synthetic FCF DSCR of
   around 1.9x. Any significant deterioration in these metrics
   could result in negative rating action.

Future developments that may, individually or collectively, lead
to positive rating action include:

Class A notes

- Any significant improvement in performance above Fitch's base
   case, with a resulting improvement in the projected
   deleveraging profile to below around 3x in 2022
- A full debt repayment of the notes before 2027 under Fitch's
   base case

- The class A notes are unlikely to be rated above 'BBB+'. This
   is mainly due to the sector's substantial exposure to consumer
   discretionary spending and uncertainty as to whether the CPL
   concept will remain in favour over the long term.

Class B notes

- Given the sensitivity of the class B notes to variations in
   performance due to its deferability, they are unlikely to be
   upgraded above the 'B' category in the foreseeable future.

- However, the notes could be upgraded based upon:

   -- Any significant improvement in performance above Fitch's
      base case, with a resulting improvement in the projected
      deleveraging profile to below around 6x in 2022

   -- A full debt repayment of the notes before 2034 under
      Fitch's base case

Asset Description

CPUK Finance Limited is a securitisation of five holiday villages
in the UK operated by Center Parcs Limited. The holiday villages
are Sherwood Forest in Nottinghamshire, Longleat Forest in
Wiltshire, Elveden Forest in Suffolk, Whinfell Forest in Cumbria
and Woburn Forest in Bedfordshire.

The rating actions are:

- GBP240 million 3.59% fixed rate class A4 notes maturing 2042:
   assigned 'BBB(EXP)'; Outlook Stable

- GBP[365] million fixed rate class B3 notes maturing 2047:
   assigned 'B(EXP)'; Outlook Stable

- GBP[365] million fixed rate class B4 notes maturing 2047:
   assigned 'B(EXP)'; Outlook Stable

The ratings of the existing notes are:

- GBP440 million 7.24% fixed rate class A2 notes maturing 2042:
   'BBB', Outlook Stable

- GBP350 million 2.67% fixed rate class A3 notes maturing 2042:
   'BBB', Outlook Stable

- GBP140 million 3.59% fixed rate class A4 notes maturing 2042:
   'BBB', Outlook Stable

- GBP560 million 7.00% fixed rate class B2 notes maturing 2042:
   'B', Outlook Stable

At closing, the GBP560 million class B2 notes will be refinanced
by the new class B3 and B4 notes while the amount of class A4
notes will increase to GBP240 million from GBP140 million.


CPUK FINANCE: S&P Gives (P)Bsf Rating to New Sub. B3 & B4 Notes
---------------------------------------------------------------
S&P Global Ratings assigned its preliminary 'BBB (sf)' credit
ratings to CPUK Finance Ltd.'s class A4 GBP100 million tap
issuance. At the same time, S&P have assigned its preliminary 'B
(sf)' credit ratings to CPUK Finance's new subordinated class B3-
Dfrd and B4-Dfrd notes.

The transaction will be, in part, a refinancing of the existing
high yield class B2 notes that CPUK Finance issued in August 2015
ahead of their first call date in August 2017. In conjunction,
S&P understands that The Royal Bank of Scotland PLC will replace
Deutsche Bank AG (London Branch) as one of the two liquidity
facility providers. The terms of the existing liquidity facility
agreement will essentially remain unchanged and, as a result, the
maximum supported rating continues to be the lowest issuer credit
rating among the liquidity providers (see "New Issue: CPUK
Finance Ltd.," published on June 1, 2015).

On the issue date, S&P understands that the issuer will issue two
new tranches of class B notes totaling GBP730 million, expected
to be split broadly evenly between the class B3-Dfrd and class
B4-Dfrd notes. These new notes will rank pari passu with each
other, and will have a staggered maturity profile with expected
maturity dates that should be in August 2022 and August 2024,
respectively, and a common final maturity date in February 2047.
The terms and conditions of the new class B notes will be broadly
similar to those of the existing class B2 notes, most notably
interest on these instruments remains fully deferrable and they
are fully subordinated. S&P's preliminary ratings on these junior
notes only address ultimate payment of interest and principal.

At the same time, CPUK Finance is expected to issue a GBP100
million tap issuance of the class A4 notes. The further class A4
notes will be totally fungible with the existing class A4 notes.

S&P anticipates that these new issuances and tap will increase
the leverage ratios to 5.0x and 8.5x (from 4.5x and 7.2x) for the
class A notes and class B notes, respectively (based on last 12
months reported EBITDA as of the end of calendar year 2016).

On the issue date, S&P understands that CPUK Finance will lend
the proceeds from the issuance of the new notes to the borrowers,
via issuer/borrower loans. The borrowers will use the loans to
repay (including a make-whole premia) the existing class B2 loan.
In turn, the issuer will repay the class B2 notes. S&P
understands the borrowers will use the remainder of the issuance
proceeds to pay a dividend to CP Cayman Midco 1 Ltd., the entity
directly outside the securitization group.

Following the issuance, the class B3-Dfrd and B4-Dfrd notes will
have access to the same security package as the existing class B2
notes. Notably, the class B3-Dfrd and B4-Dfrd notes will continue
to have the benefit of a share pledge over the shares of CP
Cayman Midco 2 Ltd. (Topco - the topmost entity in the
securitization group outside of the corporate securitization)
that may be enforced upon a failure to refinance on their
expected maturity dates.

Operating cash flows from the day-to-day business of Center Parcs
(UK) Group Ltd. in the U.K. will service the borrowers' financial
obligations under the issuer/borrower loans. In turn, CPUK
Finance's primary sources of funds for principal and interest
payments on the notes are the loan interest and principal
payments from the borrowing group, amounts available from the
liquidity facility (for the class A notes only), and payments
from Topco under the Topco payment undertaking (for the class B3-
Dfrd and B4-Dfrd notes only).

The transaction will likely qualify for the appointment of an
administrative receiver under the U.K. insolvency regime. An
obligor default would allow the noteholders to gain substantial
control over the charged assets prior to an administrator's
appointment, without necessarily accelerating the secured debt,
both at the issuer and at the borrower level.

S&P's preliminary rating on the GBP100 million class A4 notes tap
issuance reflects the borrowing group's fair business risk
profile, the assets' strong performance and cash flow generating
potential, and any structural protections available to the
noteholders.

Under S&P's cash flow projections, which are commensurate with a
'BBB' stress scenario, we do not expect the class A4 notes tap
issuance to experience any interest shortfalls, and S&P expects
principal to be fully repaid before the legal final maturity
date. S&P has therefore assigned its preliminary 'BBB (sf)'
rating to the class A4 notes tap issuance.

The class B3-Dfrd and B4-Dfrd notes are structured as soft-bullet
notes due in February 2047, but with interest and principal due
and payable to the extent received under the B3-Dfrd and B4-Dfrd
loans. Under the terms and conditions of the class B3-Dfrd and
B4-Dfrd loans, if the loans are not repaid on their expected
maturity dates (August 2022 and 2024), interest will no longer be
due and will be deferred. Similarly, if the class A loans are not
repaid on the second interest payment date following their
respective expected maturity dates, the interest on the class B
loans will be deferred. The deferred interest, and the interest
accrued thereafter, becomes due and payable on the final maturity
date of the class B3-Dfrd and B4-Dfrd notes in 2047. S&P's
analysis focuses on scenarios in which the loans underlying the
transaction are not refinanced at their expected maturity dates.
S&P therefore considers the class B3-Dfrd and B4-Dfrd notes as
deferring accruing interest one year after the class A3 notes'
expected maturity date and receiving no further payments until
all of the class A debt is fully repaid.

Moreover, under their terms and conditions, further issuances of
class A notes are permitted without consideration given to any
potential impact on the then current ratings on the outstanding
class B notes.

Both the extension risk, which S&P views as highly sensitive to
the future performance of the borrowing group given its
deferability, and the ability to issue more senior debt without
consideration given to the class B notes, may adversely affect
the ability of the issuer to repay the class B3-Dfrd and B4-Dfrd
notes. "As a result, the uplift above the borrowing group's
creditworthiness reflected in our preliminary ratings is limited.
Consequently, we have assigned our preliminary 'B (sf)' ratings
to the class B3-Dfrd and B4-Dfrd notes," said S&P.

Center Parcs is a family-oriented year-round short break holiday
provider in the U.K. The business currently comprises five
villages in Nottinghamshire, Suffolk, Wiltshire, Cumbria, and
Bedfordshire. Center Parcs continues to be the leading provider
in the U.K. with no direct local competitors.

The business continued to show a stabilized growth in fiscal year
2016 and during the first three quarters of fiscal year 2017. The
opening of the fifth village, Woburn, in June 2014, added about
20% of capacity, leading to a balanced share of revenues and
EBITDA between the five sites. For the first three quarters of
fiscal year 2017, reported net revenues increased by 3.9% to
ú312.6 million, driven by accommodation revenue (growing at
5.2%), and by on-village revenue (growing at a slower pace around
2%). Occupancy rates, fostered by high customer loyalty, have
remained in line with their five-year average of about 97%
despite 2.5% of the group's capacity being off-line for upgrades
and therefore unavailable for sale. At the same time, average
daily rent supported by a sustained investment program has
continued to improve, resulting in revenue per available lodge
night of GBP179.6, a 4.9% increase as of the end of the third
quarter of fiscal year 2017. The factors above enabled an
improvement of the reported EBITDA to GBP155.2 million, compared
to GBP147.0 million for the first three quarters of the previous
fiscal year, and of the reported EBITDA margin to about 49.6% as
of the third quarter of fiscal year 2017, compared to 46% in
2016, partly absorbing the impact of the introduction of the
National Living Wage regulation on April 1, 2016.

The transaction blends a corporate securitization of the
operating business of the Center Parcs group in the U.K. with a
subordinated high-yield issuance (the class B3-Dfrd and B4-Dfrd
notes).

RATINGS LIST

CPUK Finance Ltd.
GBP1.760 Million Fixed-Rate Secured Notes

Class                Prelim.          Prelim.
                     rating            amount
                                     (mil. GBP)

A4 (Tap)             BBB (sf)           100.0
B3                   B (sf)             365.0
B4                   B (sf)             365.0


KIRS MIDCO 3: Moody's Assigns (P)B3 CFR, Outlook Positive
---------------------------------------------------------
Moody's Investors Service has assigned a Corporate Family Rating
(CFR) of (P)B3 to KIRS Midco 3 plc (KIRS), an intermediate
holding company of the new KIRS group and a subsidiary of KIRS
Group Limited. Moody's has also assigned a (P)Ba3 rating to the
proposed GBP90 million backed super senior secured revolving
credit facility (RCF) and a (P)B3 rating to the proposed GBP800
million sterling equivalent backed senior secured bonds to be
issued by KIRS Midco 3 plc. The outlook on KIRS Midco 3 plc is
positive. Concurrently, Moody's affirmed KIRS Finco Plc's B3 CFR
and changed the outlook to positive from negative.

The proceeds from the bonds will be used to repay existing debt
obligation of KIRS Finco Plc (previously TIG Finco Plc) and
partly finance the combination of KIRS Finco plc, parent company
of Towergate, and Nevada Investments Topco Limited (Nevada) under
KIRS.

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

RATINGS RATIONALE

  --- Corporate Family Rating ---

The (P)B3 CFR on KIRS reflects the group's strong business
profile and product diversification together with good EBITDA
margins and earnings growth prospects. The rating is constrained
by the high level of debt and Moody's expectation of moderate net
cash flows over the coming 12-18 months, as a result of
significant near term exceptional cash outflows.

Upon completion of the combination, KIRS will fully own Towergate
and become a majority shareholder in Autonet, Price Forbes,
Direct Group and Chase Templeton. Moody's views KIRS' business
profile as a key rating strength, including the group's: (i)
strong position in the UK P&C insurance broker market with an
extensive UK distribution network, and focus on niche segments
where barriers to entry and customer retention rates are high and
growth prospects favourable; (ii) the group's significant
influence over carriers and purchasing power thanks to its size
and proximity to customers; and (iii) highly diversified business
model with KIRS providing services across the entire insurance
value chain.

However, KIRS has a limited track record of operating as a
combined group and will remain in transition at least until 2018
with some execution risk. Moody's acknowledges the material
cross-sell opportunities resulting from the combination and
material investments made within Towergate during 2016 and
2017YTD to build a scalable platform with GBP56 million of
identified annual run-rate savings by YE2020. However, at this
juncture, the magnitude of earnings benefits remains uncertain,
and may cost more or take longer than anticipated to fully
materialise.

The CFR is also constrained by the group's weak financial
flexibility profile. Following the GBP800 million sterling
equivalent senior secured bond issuance, pro-forma gross debt-to-
EBITDA would exceed 8x on a Moody's adjusted basis YE2016
excluding run-rate savings. However, Moody's acknowledges the
material run-rate savings the group expects to realise and
expects gross leverage to reduce towards 6.5x over the next 18
months.

Moody's expects KIRS' organic cash flow generation to remain
relatively modest during 2017 and 2018, adversely affected by
near term extraordinary CAPEX investments, exceptional costs and
interest payments on the new senior secured bonds. However, the
GBP90 million RCF provides a buffer should the group require
additional liquidity.

  -- Debt Ratings --

Moody's (P)Ba3 rating on the GBP90 million super senior secured
RCF is 3 notches above the (P)B3 senior secured debt rating,
reflecting the super senior secured RCF's priority over
enforcement proceeds.

The RCF and debt ratings also incorporate Moody's view of the
value of the notes' secured status over certain material assets
of Towergate, Direct Group and Chase Templeton, and the benefit
from upstream guarantees.

  -- Outlook --

The positive outlook on KIRS reflects Moody's view that, as and
when the majority of run-rate saving have materialised and
exceptional costs reduce, the group will be in a strong position
to grow its statutory earnings, start generating good positive
net cash flows and deleverage rapidly.

The change in outlook on KIRS Finco plc to positive from
negative, reflects the benefits of the Towergate operations being
part of the larger, more diverse and less levered KIRS group
following completion of the combination transaction.

RATING DRIVERS

Moody's says the following factors could lead to a ratings
upgrade on KIRS: (1) positive Free Cash Flows % Debt consistently
above 3%; (2) gross debt-to-EBITDA below 6.5x with EBITDA-CAPEX
coverage of interest sustainably above 2.0x; and (3) Moody's
adjusted EBITDA surpassing GBP125 million with EBITDA margins
above 25%.

Whilst unlikely given the positive outlook, the following factors
could lead to a downgrade on KIRS: (1) adjusted gross debt-to-
EBITDA remaining above 8.0x; (2) a weakening in the group's
liquidity position or cash flows generation; and/or (3) EBITDA
before exceptional items, excluding run-rate cost savings below
GBP100 million with EBITDA margins below 23%.

RATINGS LIST

Moody's has assigned the following ratings on KIRS Midco 3 plc:

  --- Corporate Family Rating at (P)B3

  --- GBP800 million sterling equivalent Backed Senior Secured
      Debt Rating at (P)B3

  --- GBP90 million Backed Super Senior Secured Debt Rating at
      (P)Ba3

The outlook for KIRS Midco 3 plc is positive.

Moody's affirmed the following ratings on KIRS Finco Plc:

  --- Corporate Family Rating at B3

  --- Probability of Default Rating at B3-PD

The outlook for KIRS Finco Plc changed to positive from negative.

For 12 months to December 31, 2016, KIRS' pro-forma total revenue
amounted to GBP491 million and adjusted EBITDA to GBP134 million.
For the same period, Towergate reported total revenues of GBP319
million and adjusted EBITDA of GBP52 million.

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Insurance
Brokers and Service Companies published in December 2015.


RZB FINANCE: S&P Hikes Ratings on Hybrid Instruments to BB+
-----------------------------------------------------------
S&P Global Ratings said that it had revised its outlook on
Raiffeisen Bank International AG (RBI) to positive from negative.
At the same time, S&P affirmed its 'BBB+/A-2' long- and short-
term counterparty credit ratings on the bank.

S&P also affirmed the 'BBB+' rating on RBI's senior unsecured
debt and the 'BBB-' rating on RBI's non-deferrable subordinated
debt.

At the same time, S&P raised the ratings on the hybrid capital
instruments issued via RZB Finance (Jersey) IV Ltd. to 'BB+' from
'BB'.

The outlook revision to positive from negative reflects S&P's
opinion that downside risks to Raiffeisen Banking Group's (RBG's)
risk profile and capitalization have receded. This reflects the
recent significant de-risking in foreign operations and
stabilization of the geopolitical and economic risk conditions in
higher risk countries where RBG operates. Indeed, S&P now sees
some upside to RBG's creditworthiness in the next two years.

S&P said, "Despite profitability remaining constrained by the
low-growth, low-interest-rate environment, we now believe that
RBG will likely further improve its internal earnings generation
capacity and capitalization and risk metrics. Moreover, RBI's
reduced reliance on wholesale funding as a result of the
downsizing of the operations in riskier markets and subsequent
lower need for related intragroup funding further supports our
view of a possible positive transformation of the group."

RBG has substantially derisked its foreign operations, and S&P
expects further reduction in nonperforming assets in foreign
operations in the medium term. This should bring RBG's metrics
closer to those more common among peers operating in similar
economic risk environments, such as Erste Group Bank AG,
Cooperatieve Rabobank U.A., Credit Agricole S.A., and Cooperative
Banking Sector Germany. While RBG continues to have a relatively
high level of nonperforming assets in its domestic operations, we
see this as a legacy issue reflecting the slow write-off practice
of local banks, and S&P expects an improvement given increasing
management focus in this area. Following the derisking, S&P also
now expects that, over the cycle, the group will report
lower and notably more stable risk costs than in the past,
supporting RBG's overall stability and internal capital
generation.

Another positive development is the easing of S&P's concerns
about RBG's lack of consolidation with regard to efficiency
improvement and harmonization of risk management. S&P expects
that the operating environment in the group's biggest core
markets will remain stable, facilitating the generation of steady
earnings from its traditional customer-led retail and corporate
customer business. S&P expects the pace of the improvement in
efficiency and financial reporting transparency to be slow but
steady. In S&P's view, RBG's earnings will continue to be
pressured by low interest rates, as being a group with focus on
retail customer business, RBG is particularly sensitive to the
prolonged low interest rates. But at the same time, S&P
anticipates that internal earnings accumulation will be
sufficient to support the low-single-digit growth the management
targets and for further accumulation of the capital buffer in the
next two years.

S&P anticipates retained earnings and potential issuance of Tier
1 instruments will outpace growth and lead to further improvement
of S&P Global Ratings' risk-adjusted capital (RAC) ratio for RBG
to around 10% by year-end 2018 from 8.5% at year-end 2016. Within
this projection, S&P assumes only marginal growth in higher-risk
countries and risk costs below its view of normalized losses
over the cycle.

Following the merger with former parent Raiffeisen Zentralbank AG
(RZB) in March 2017, RBI is now the group's central institution.
S&P views its role as core for the group's strategy. As such, S&P
equalizes its ratings on RBI with the 'bbb+' group credit profile
(GCP) of RBG. S&P doesn't assess a stand-alone credit profile for
RBI.

As for most other European markets, S&P now sees the prospects
for extraordinary government support as uncertain in Austria,
given the move to use the new bank resolution framework to deal
with failing banks and constraints on the conditions under which
taxpayer support can be provided. As a systemic banking
institution in Austria, we expect that the resolution authorities
would want to pursue a bail-in led resolution strategy for RBI
that could avoid a default on its senior obligations. However,
S&P does not incorporate any uplift under its additional loss-
absorbing capacity (ALAC) methodology to the ratings on RBI. This
is because S&P believes that RBG member banks are likely to
support core group members under any foreseeable circumstance and
derive S&P's rating on RBI based on group support.

In the next 12 months, S&P expects to have more clarity on the
resolution strategy for the group, the regulatory bail-in buffer
(MREL) requirement, and management's approach for building and
downstreaming that MREL at different tier levels within RBG. As
this clarity comes, S&P might adjust its rating approach, if ALAC
uplift to RBI rating would lead to a rating higher than that
based on the group support and if S&P was comfortable that RBI's
ALAC would not be made available to protect senior creditors' of
other RBG banks.

The upgrade of the hybrid notes issued by special purpose vehicle
RZB Finance (Jersey) IV Ltd. on behalf of RBI reflects the
changed regulatory treatment of this instrument and S&P's view
that it now faces slightly reduced coupon nonpayment risk. This
former Tier 1 instrument no longer qualifies as regulatory
capital, and S&P understands its coupon payments are not subject
to mandated suspension if coupons on Tier 1 instruments are
stopped. As a result, S&P now sees nonpayment risks to be similar
as for RBI's other Tier 2 instruments and rate it at the same
level as S&P would rate an equivalent-ranking debt of RBI.

RBI is RZB's legal successor with regard to the Support Agreement
originally extended by RZB to RZB Finance (Jersey) IV Ltd. S&P's
issue credit rating approach reflects our view that RZB Finance
(Jersey) IV Ltd. acts as a pass-through vehicle. Its debt
obligations are backed by equivalent-ranking obligations issued
by RBI, and S&P views RBI as willing and able to support the
vehicle to ensure full and timely payment of interest and
principal.

The positive outlook reflects RBI's status as a core group member
of RBG and S&P's view of RBG's GCP strengthening over the next
two years, with a likelihood of one in three, thanks to:

Increasing cohesiveness of the group's management, which would
support stronger focus on the efficiency and sustainable
improvement of internal capital generation capacity;

-- Issuance of additional Tier 1 instruments, supporting the
    capital buffer; and

-- Further improvement of funding and liquidity profile.

S&P said, "We also expect that the group will be able to defend
its market position and retail franchise in its core markets in
Central and Eastern Europe (CEE) and the Commonwealth of
Independent States, which remain highly competitive markets, and
that RBI's core role for the group will remain unchanged.

"We could consider an upgrade if growth in core operating
earnings and hybrid capital issuance (qualifying for inclusion in
our capital definition) moves the RAC ratio comfortably and
sustainably above 10%. However, we would additionally need to see
a track record of profit resilience, improved risk metrics and
efficiency in line with peers, and increased cohesiveness and
financial transparency in consolidated reporting disclosure in
RBG. A cautious growth policy in higher-risk countries would be a
pre-condition for an upgrade.

"While less likely, we could also consider the upgrade if RBG's
funding and liquidity profile continues to improve, underpinned
by materially stronger metrics than those of peer groups, and if
we gain confidence that consolidated ratios at the RBG level are
also representative of RBI's main operating subsidiaries abroad.

"We would revise the outlook to stable if RBG deviates from its
cautious expansion strategy in foreign operations and proves
unable to achieve improved efficiency over the next two years.
This, combined with unexpected pronounced credit losses and
weaker earnings in higher-risk regions, could result in a
deterioration of our RAC projection. We would also revise the
outlook to stable if economic conditions in core countries
deteriorated markedly. Exposure to geopolitical risk in some of
its extended home markets in CEE and Russia create potential
downside risk to the group's creditworthiness."


SPIRIT ISSUER: Moody's Affirms Ba1(sf) Rating on Cl. A7 Notes
--------------------------------------------------------------
Moody's Investors Service has affirmed the ratings of the Notes
issued by Spirit Issuer plc and the Counterparty Instrument
Rating on the Liquidity Facility.

-- GBP43.4M Class A1 Notes, Affirmed Ba1 (sf); previously on
    Oct. 5, 2015 Upgraded to Ba1 (sf)

-- GBP188.6M Class A2 Notes, Affirmed Ba1 (sf); previously on
    Oct. 5, 2015 Upgraded to Ba1 (sf)

-- GBP58.3M Class A3 Notes, Affirmed Ba1 (sf); previously on
    Oct. 5, 2015 Upgraded to Ba1 (sf)

-- GBP210.5M Class A4 Notes, Affirmed Ba1 (sf); previously on
    Oct. 5, 2015 Upgraded to Ba1 (sf)

-- GBP161.2M Class A5 Notes, Affirmed Ba1 (sf); previously on
    Oct. 5, 2015 Upgraded to Ba1 (sf)

-- GBP101.3M Class A6 Notes, Affirmed Ba1 (sf); previously on
    Oct. 5, 2015 Upgraded to Ba1 (sf)

-- GBP58.4M Class A7 Notes, Affirmed Ba1 (sf); previously on
    Oct. 5, 2015 Upgraded to Ba1 (sf)

-- GBP194M Liquidity Facility Agreement, Affirmed Aa3 (sf);
    previously on Oct. 5, 2015 Affirmed Aa3 (sf)

RATINGS RATIONALE

The affirmation action reflects the stable performance since
Moody's last rating action in October 2015 on a number of key
credit drivers and metrics such as Moody's Note to Value (NTV),
Free Cash Flow (FCF) and Earnings Before Interest, Tax,
Depreciation and Amortisation (EBITDA) debt multiples. On a
trailing 12 months basis, EBITDA of the securitised pubs has
increased by 3% since Moody's last rating action. The managed
estate portion was the key driver of this EBITDA growth
continuing to benefit from the significant CAPEX investment over
the last few years and improving income from food offerings. In
addition, the integration of the Spirit securitisation pubs into
Greene King's business has resulted in cost efficiencies. Moody's
expects EBITDA to decline slightly going forward given the rise
in operating costs due to expected inflation and the rise in the
National Living Wage. The rise in the National Living Wage in
April 2016 has already resulted in lower EBITDA.

The key parameters in Moody's analysis are (1) the intrinsic
credit strength of the borrower and the Sponsor group; (2) the
sustainable FCF debt multiples generated by the underlying
property portfolio and operations over the medium to long term
horizon of the transaction and (3) the structural protections
available to the noteholders aimed at limiting the sensitivity of
the credit quality of the notes from the underlying credit
quality of the borrower and its operations.

For the Counterparty Instrument Rating ("CIR"), Moody's also took
into account factors detailed in 'Moody's Approach to
Counterparty Instrument Ratings' published in June 2015.

Methodology Underlying the Rating Action:

The principal methodologies used in rating Classes A1, A2, A3,
A4, A5, A6 and A7 Notes were "Moody's Approach to Rating
Operating Company Securitizations" published in December 2015,
and "Restaurant Industry" published in September 2015. The
principal methodology used in rating Liquidity Facility Agreement
was "Moody's Approach to Rating EMEA CMBS Transactions" published
in November 2016.

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

Factors that may cause an upgrade of the ratings include a
significant improvement of the credit quality of the parent
company of the borrower and positive performance of the
underlying operations of the pubs.

Factors that may cause a downgrade of the ratings include a
significant deterioration of the credit quality of the parent
company of the borrowers and negative performance of the
underlying operations of the pubs. The increase in the National
Living Wage in April 2017 and again in April 2020 as well as the
recent implementation of the new Market Rent Option (MRO) for
tenanted and leased pubs could potentially be a cause for
negative performance. These factors affect all the notes
excluding the CIR.

An upgrade of the CIR is unlikely given the heavily operative,
whole business type operations of the borrowers. An increase of
the probability of liquidity draws and/or a decrease of the
underlying collateral value in the transaction may lead to a
downgrade of the CIR.

Loss and Cash Flow Analysis:

In this approach, Moody's analyses the credit quality of the
borrowers and the whole business securitisation structure. A
sustainable annual FCF is derived over the medium to long term
horizon of the transaction, and then multipliers are applied to
such cash flows in order to reach the debt which could be issued
at the targeted long-term rating level for the notes. In
addition, Moody's considers various haircuts on the pub values.

Stress Scenarios:

Moody's applies haircuts on the pub valuation and stresses FCF
for its analysis.

MOODY'S PORTFOLIO ANALYSIS

Spirit Issuer plc represents a whole-business securitisation of a
pool of 624 managed and 406 leased public houses located across
the UK. It originally closed in November 2004 and was
restructured in July 2006 (via a tap issuance) in 2013.

Greene King successfully acquired Spirit Pub Company for GBP774
million in June 2015. The Spirit securitisation entities now form
part of the Greene King group.

The securitisation performance over the last 24 months has been
broadly stable; however, there are some early signs that EBITDA
could be declining slightly.

A stronger performance in the managed estate over the last few
years has offset a somewhat weaker performance in the leased
estate since 2011. However, the leased estate has shown signs of
improvement over the last 12 months. EBITDA per pub within the
managed estate has increased to GPB 207,000 (on an annualised
basis) in Q2 2017 versus a trough of GBP 127,000 in Q3 2010.
Within the leased estate, EBITDA per pub has risen to GBP 89,000
(on an annualised basis) in Q2 2017 versus a trough of GBP 69,000
in Q3 2013.

Moody's FCF multiple for the Class A1 to A7 Notes is at 6.0x.
This has declined from a peak of 8.5x in Q2 2009. The Net Debt to
EBITDA has followed a similar trend declining to 4.0x as at Q2
2017 from 7.5x in Q2 2009. The NTV ratio of 73.2% has increased
from 68.7% a year ago due to a decrease in EBITDA and increase in
swap mark-to-market. However, the NTV ratio has improved slightly
from a ratio of 75.4% in Q3 2015. The NTV ratio includes the
mark-to-market valuation of the swaps included in the
securitisation.


TAURUS CMBS 2014-1: Fitch Affirms BB+ Rating on Class C Notes
-------------------------------------------------------------
Fitch Ratings has upgraded Taurus CMBS UK 2014-1 Limited's class
A and B notes and affirmed the class C notes due 2022:

EUR54.1 million class A (XS1082235299) upgraded to 'A+sf' from
'Asf'; Outlook Stable

EUR19.8 million class B (XS1082235612) upgraded to 'BBB+sf' from
'BBB-sf'; Outlook Stable

EUR11.9 million class C (XS1082235703) affirmed at 'BB+sf';
Outlook Positive

Taurus CMBS UK 2014-1 Limited is a securitisation of a 95%
participation in a GBP222.7 million commercial mortgage loan
granted by Bank of America Merrill Lynch to finance the
acquisition of properties out of various receiverships. The loan
was originally secured on a portfolio of 132 retail, office,
leisure and logistics properties throughout the UK, mainly
secondary or tertiary in quality. The sponsor's business plan
envisages asset liquidation, with any failure to meet quarterly
amortisation targets leading to full cash sweep, to be applied
sequentially.

KEY RATING DRIVERS

The upgrade reflects significant disposal activity undertaken
since the last rating action in June 2016, which has helped de-
risk the sole securitised loan. Since then, 41 assets have been
sold (80 since transaction closing in July 2014), with little
impact on the quality of the portfolio, in Fitch's view. The
associated principal repayment of EUR42.2 million since June 2016
helps keep the loan balance within repayment targets, securing
the borrower the first of two one-year extensions of the loan.

Property release principal distributions are applied on a fully
pro rata basis, which moderates the benefit of loan deleveraging
for the non-junior notes. Still, the amortisation has been
sufficient to support upgrades of these two classes of notes. The
class A notes are capped in the 'Asf' category on account of a
three-year minimum tail period (net of loan extension options)
and the lack of external issuer liquidity.

The waterfall will switch to sequential principal allocation only
after a loan event of default. Given the lack of external
liquidity facility, faster sales of the better quality properties
over a potentially prolonged piecemeal liquidation process, or
large periodic senior costs (relative to the debt quantum at that
time) being incurred by the issuer, could eventually restrict the
issuer's ability to service interest on the class C notes in such
a scenario.

In light of this, Fitch has constrained the rating of the class C
notes by its view of the loan rating, which is derived from
reducing the loan breakeven scenario in this case by one rating
category. This is based on the loan's strong financial covenants
of 1.8x interest coverage ratio (ICR) and 78.5% loan to value
(LTV), as well as the borrower's motivation to perform under the
loan given the relative ease of mortgage enforcement in the UK
(should it fail to do so). The Positive Outlook on the class C
notes reflects rating upside should the loan enjoy further
deleveraging from benign property sales. Fitch has also tested
its ratings for more conservative property disposal scenarios
involving above-average quality properties.

The LTV ratio stood at 42.3% as of end-May, down from 53.8% end-
June 2016 as a result of the release premiums paid on sold assets
(between 10% and 20%) as well as a like-for-like uplift in
reported market value to GBP213.6 million (in October 2016) from
GBP199.8 million (in September 2015). The reported ICR of 3.31x,
is up from 2.74x in June 2016 and from 2.3x at closing. Income
remains granular, with no tenant accounting for more than 4% of
total income, but asset concentration has increased, with the top
10 assets accounting for 70% of the market value, up from less
than 60% in June 2016.

RATING SENSITIVITIES

Continued de-risking based on disposals could support positive
rating action, with the C notes more likely to benefit as the
loan deleverages. The class A notes are capped at their rating. A
slowdown in the UK retail sector could result in negative
revisions in Outlooks.

Fitch estimates a 'Bsf' portfolio market value of GBP135.6
million.




                            *********

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
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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
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balance sheet for liabilities that may never materialize.  The
prices at which equity securities trade in public market are
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Each Friday's edition of the TCR includes a review about a book
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                            *********


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.

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Information contained herein is obtained from sources believed to
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