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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

          Wednesday, July 12, 2017, Vol. 18, No. 137


                            Headlines


B U L G A R I A

CORPORATE COMMERCIAL: BDIF Makes BGN30MM Partial Loan Payment
FIRST INVESTMENT: Fitch Raises Long-Term IDR to B, Outlook Stable


D E N M A R K

NORICAN GLOBAL: S&P Assigns B Long-Term CCR, Outlook Stable


G E O R G I A

BANK OF GEORGIA: BGEO Demerger Neutral for Ratings, Fitch Says


G E R M A N Y

HP PELZER: Fitch Affirms Then Withdraws 'B' Issuer Default Rating
* Germany Calls for Review of EU Bank-Failure Rules


I T A L Y

BERICA 6: Fitch Hikes Rating on Class C Notes from BBsf
UNIPOL BANCA: Moody's Reviews Ba2 Deposit Ratings for Upgrade


N E T H E R L A N D S

MEDIARENA ACQUISITION: S&P Cuts CCR to CCC+, Outlook Stable


R U S S I A

EUROPLAN: Fitch Affirms 'BB-' Sr. Unsecured Debt Rating
ICBC JSC: S&P Withdraws 'BB+/B' Counterparty Credit Ratings
INTERNATIONAL FINANCIAL: Moody's Cuts LT Deposit Rating to Caa1
PREMIER CREDIT: Put on Provisional Administration
SME BANK: S&P Affirms 'BB-/B' Issuer Credit Rating

YUGRA: Russia's Central Bank Begins Wind-Up Process


S P A I N

CATALONIA: Fitch Affirms 'BB' Long-Term IDR, Outlook Negative


T U R K E Y

ISTANBUL: Fitch Affirms BB+ Long-Term IDR, Outlook Stable


U N I T E D   K I N G D O M

FINSBURY 2017-2: Moody's Assigns (P)Caa1 Rating to Cl. D Notes
KELDA FINANCE: S&P Affirms BB- Long-Term CCR, Outlook Stable
MERGERMARKET MIDCO: S&P Affirms B CCR, Outlook Stable
TATA STEEL UK: Liberty House Acquires Two Steel Mills
TRAVELEX FINANCING: Moody's Rates EUR360MM Senior Sec. Notes B3


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


CORPORATE COMMERCIAL: BDIF Makes BGN30MM Partial Loan Payment
-------------------------------------------------------------
FOCUS News Agency reports that the Ministry of Finance' press
office said the Bulgarian Deposit Insurance Fund (BDIF) made a
partial payment of BGN30 million on the loan from the central
budget granted under the Loan Agreement signed between the
Republic of Bulgaria and the BDIF on December 3, 2014, to finance
the shortage of funds to pay the guaranteed deposits in Corporate
Commercial Bank (CorpBank) after the revocation of its license.

This is the second partial early loan repayment bringing the
total amount of the principal repaid by the BDIF to BGN 1,175
billion, FOCUS News Agency notes.

According to FOCUS News Agency, the BDIF plans to repay the
remaining principal amounting to BGN 500 million before the
maturity of the loan.  The next partial early repayment will be
made after the bankruptcy court gives its final ruling on the
appeals against the first partial account approved by the BDIF
for distribution of the available sums among CorpBank creditors,
FOCUS News Agency discloses.

Corporate Commercial Bank AD is the fourth largest bank in
Bulgaria in terms of assets, third in terms of net profit, and
first in terms of deposit growth.

Bulgaria's central bank placed Corpbank under its administration
and suspended shareholders' rights in June 2014 after a run
drained the bank of cash to meet client demands.


FIRST INVESTMENT: Fitch Raises Long-Term IDR to B, Outlook Stable
-----------------------------------------------------------------
Fitch Ratings has upgraded First Investment Bank AD's (FIBank)
Long-Term Issuer Default Rating (IDR) to 'B' from 'B-' and the
bank's Viability Rating (VR) to 'b' from 'b-'. The Outlook on
FIBank's Long-Term IDR is Stable. The agency has also affirmed
Raiffeisenbank (Bulgaria) EAD (Raiffeisenbank) and UniCredit
Bulbank AD (Bulbank) at Long-Term IDR 'BBB-' with a Stable
Outlook and United Bulgarian Bank AD (UBB) at Long-Term IDR
'BBB+' with a Positive Outlook.

Fitch has also upgraded UBB's VR to 'bb-' from 'b+' and affirmed
the VRs of Raiffeisenbank and Bulbank at 'bb'.

The upgrade of FIBank's Long-Term IDR and VR is driven by the
stabilisation of the bank's asset quality, improvements in
profitability and capitalisation and a moderation of the bank's
risk appetite. The upgrade of UBB's VR reflects further moderate
improvements in the bank's impaired loan ratio and coverage of
impaired loans, expected benefits from the recent acquisition by
KBC Bank (A/Stable/a) and greater emphasis in Fitch's assessment
on the bank's sound capital and funding positions. The
affirmation of the VRs of Raiffeisenbank and Bulbank reflects no
major changes to their financial metrics over the last 12 months.

The affirmation of Raiffeisenbank's, UBB's and Bulbank's IDRs
reflects Fitch's opinion of a high probability that they would be
supported, if required, by their respective parents. The three
banks are owned, respectively, by Raiffeisen Bank International
(RBI; 100% stake), KBC Bank (A/Stable/a; 99.9%) and UniCredit
S.p.A. (BBB/Stable/bbb; 99.5%).

KEY RATING DRIVERS
IDRS, SUPPORT RATINGS, SUPPORT RATING FLOOR
Bulbank and Raiffeisenbank are based in the CEE region, which is
strategically important for both Unicredit and RBI. The banks'
synergies with their respective parents are strong and
underpinned by long track records in supporting their parents'
objectives - which is likely to continue - and a high level of
management and operational integration.

Fitch see also strong synergies between UBB and KBC because
Bulgaria is strategically important for KBC. KBC acquired UBB
from National Bank of Greece (Restricted Default) on June 14,
2017 (see 'Fitch upgrades United Bulgarian Bank to 'BBB+' on
acquisition by KBC; Outlook Positive' at www.fitchratings.com).

In Fitch opinions, any required support for the three banks would
be small relative to their respective parents' ability to provide
it. Fitch opinions reflects the owners' solid credit profiles and
the small size of their Bulgarian subsidiaries relative to their
respective parents.

UBB could be rated within one notch of its parent were it not for
the constraint from Bulgaria's Country Ceiling, which caps UBB's
Long-Term IDR at 'BBB+'. Consequently, the Positive Outlook on
UBB reflects that on the Bulgarian sovereign rating (BBB-
/Positive). The Stable Outlooks on Raiffeisenbank's and Bulbank's
Long-Term IDRs reflect Fitch views that the risks related to
their parents' credit profiles are broadly balanced.

FIBank's IDRs are driven by standalone financial strength, as
expressed by the bank's VR.

The Support Rating Floor (SRF) of 'No Floor' and the Support
Rating (SR) of '5' for FIBank express Fitch's opinion that
although potential sovereign support for the bank is possible, it
cannot be relied upon. This is underpinned by the EU's Bank
Recovery and Resolution Directive, transposed into Bulgarian
legislation, which requires senior creditors to participate in
losses, if necessary, instead of or ahead of a bank receiving
sovereign support.

VRs
Bulbank
Bulbank's VR is constrained by Fitch assessment of the
challenging Bulgarian operating environment, which has
particularly weighed on the bank's asset quality. Positively, the
VR is underpinned by strong capital buffers, solid profitability,
stable funding, comfortable liquidity and Bulbank's leading
domestic market franchise.

Fitch expects Bulbank's fairly weak loan book quality to continue
to improve in 2017 due to loan write-offs and healthy new loan
origination. Its impaired loans ratio (about 11% at end-1Q17) is
considerably better than the domestic sector average (about 18%),
but is still quite high relative to other regional peers. This is
mitigated by reasonable coverage of impaired loans by total
reserves (about 73%), substantial capital buffers and a high
proportion of low-risk exposures outside the loan book.

Capitalisation is underpinned by the bank's high capital surplus
over regulatory minimums, strong recurring profitability and
moderate risk appetite. However, capital adequacy must be viewed
in the context of the still difficult operating environment. At
end-1Q17, the Fitch Core Capital (FCC) ratio, adjusting for a
likely full distribution of 2016 annual profit, was 26.9%.
Unreserved impaired loans accounted for a moderate share (about
13%) of adjusted FCC.

Bulbank's strong franchise and large size have translated into
more resilient through-the-cycle performance than Bulgarian
peers. The bank's ratio of operating profit/risk-weighted assets
(RWA; 3.8% in 2016) compares favourably with regional peers',
reflecting a still wide net interest margin (3.9% in 2016) and
high cost efficiency (cost/income ratio of 37%).

Refinancing risks are low because the bank is self-funded with
customer deposits. Bulbank has a strong deposit franchise, high
liquidity buffers and can rely on ordinary liquidity support from
its parent. The loans/deposits ratio fell to 80% at end-1Q17,
from 86% at end-2015, reflecting continuing deposit inflows.
Highly liquid assets covered 49% of customer deposits at end-
1Q17.

Raiffeisenbank
Raiffeisenbank's VR reflects the bank's successful and fast
reduction of impaired loans, cautious new lending, low
refinancing risk, robust capitalisation, improving profitability
and a moderately strong company profile.

Raiffeisenbank's asset quality should remain one of the strongest
in the banking sector due to the bank's successful and swift
portfolio clean-up and moderate risk appetite. At end-2016, the
bank's impaired loan ratio fell to 7.1% (from 19% at end-2013)
and then improved further in 1Q17. The bank's conservative
underwriting standards are underpinned by a well-developed risk-
control environment and tight parental control.

The bank is self-funded with granular deposits (89%
loans/deposits ratio at end-2016) and could also rely on
liquidity support from RBI. Its ample liquidity buffer equalled
29% of assets or 40% of customer deposits at end-2016.

At end-2016, the bank's FCC ratio was robust (about 22% net of
the proposed dividend on 2016 income). Fitch's assessment of
capitalisation is also underpinned by the bank's moderate risk
appetite, limited expansion plans and relatively stable pre-
impairment profit generation compared with local peers.

Improvement in the bank's operating profit/RWAs (2016: 4%, 2015:
2.2%) was mainly driven by smaller credit losses and lower
funding costs. However, the bank's results in 2017 will be
moderately weaker due to pressure on credit spreads and limited
opportunities for further reductions in funding and operating
costs.

At end-2016, the bank was ranked sixth by total assets (about 7%
market share). Its loan pricing power is weak, but the cost of
its deposit funding was one of the lowest in the sector. The
bank's through-the-cycle performance has been somewhat variable,
but more resilient than most local peers due to the bank's stable
business model and experienced management.

UBB
UBB's VR primarily reflects the bank's substantial capital
buffers, solid pre-impairment profitability and limited
refinancing risks. However, it also reflects the bank's weak,
albeit improving, asset quality and some profitability pressures.

The bank's impaired loans ratio has moderately improved (27.5% at
end-1Q17, down from 29.6% at end-2015) due to loan write-offs,
but it is still the highest among peers, mainly reflecting legacy
problems. The inflow of new bad debt should remain contained.
Significant improvement of loan quality metrics could be
difficult to achieve, however, due to continuing loan book
contraction. Coverage of impaired loans by total reserves
strengthened (to 56% at end-1Q17 from 51% at end-2015) but
remains only adequate compared with higher-rated peers, which is
partly mitigated by available capital buffers.

Capitalisation is underpinned by the bank's substantial capital
buffers, solid pre-impairment profits and moderate risk appetite,
which mitigate challenges stemming from the operating environment
and weak asset quality. The bank maintained high capital buffers
over regulatory minimums despite sizeable dividend pay-outs to
its previous owner in 4Q16 and 1Q17. At end-1Q17, its adjusted
FCC ratio (reflecting the dividend and 1Q17 net profit) was
24.4%. Unreserved impaired loans absorbed 54% of the adjusted
FCC. However, if all outstanding impaired loans were 80% covered,
the FCC ratio would drop to a still healthy 18.4%.

Pre-impairment profitability has been supported by strong net
interest margin (4.4% at end-2016) and good cost efficiency
(cost/income ratio of 45%), which has offset high loan impairment
charges (LICs; equal to 2.3% of average gross loans). At end-
2016, operating profit/RWAs of 2.3% was average compared with
peers. In 2017 UBB may face additional LICs due to its full asset
review following the acquisition by KBC.

UBB's limited refinancing risks reflect the bank's stable
deposit-based funding, substantial liquidity buffers and
potential liquidity support from KBC. At end-2016, the
loans/deposits ratio fell to a comfortable 82% (end-2015: 97%)
due to loan book shrinkage and deposit inflows. At end-1Q17,
highly liquid assets covered about 35% of the customer deposit
base.

FIBank
The upgrade of FIBank's VR predominantly reflects the
stabilisation of the bank's asset quality metrics and
improvements in the risk management framework, including
consistent application of loan classification criteria in line
with industry standards. It also reflects the reduction of
unreserved impaired exposures, improved capitalisation - albeit
this is still weak compared with peers - and improved loss
absorption capacity through recurring profit generation. The VR
is also supported by the bank's stable funding based on granular
retail deposits and healthy liquidity.

FIBank's VR continues to reflect significant asset quality
problems associated with legacy loans, with the impaired loans
ratio materially above the sector average, unreserved impaired
loans equal to 71% of FCC, and a large stock of non-income
generating repossessed assets equal to around 123% of FCC at end-
2016. The VR also factors in significant and only gradually
declining single-name concentrations in the loan book and still
only moderate, albeit improved, capital buffers given FIBank's
risk exposures.

FIBank's risk management framework has improved and risk appetite
has been reduced. The record of the bank's operation under the
new risk management structure is, however, still short and legacy
problems will continue to weigh on the risk profile of the bank
over the medium term. Corporate governance deficiencies have
largely been addressed, but some weaknesses are still present, in
Fitch's view. These relate mainly to limited representation of
independent members in the board.

The bank's impaired loans ratio remained broadly unchanged at
24.4% at end-2016 (end-2015: 23.9%). Fitch expects the reported
asset quality ratio to improve over 2017, driven by a contained
inflow of new impaired loans, modest growth of new lending and
moderate clean-up of the impaired loan stock through work-outs
and write-offs. Coverage of impaired loans by provisions improved
over 2016, but remained modest at 58% at end-2016. The loan book,
although reasonably well-diversified across economic sectors, has
large single-name concentrations. These are being gradually
reduced, but no material reduction is expected over the medium
term given the long-term nature of many of the largest exposures.

The bank returned to operating profitability based on recurring
revenues in 2016 supported by a strong net interest margin
(around 5%) and reasonable cost efficiency (49% cost/income
ratio) as well as more moderate impairment charges (around 260bps
of average gross loans; 2015: 520bps). The record of improved
profitability is short; however, operating profitability is
likely to be supported by contained impairment charges driven by
an improved economic environment.

Earnings have, however, been weaker and more volatile through the
cycle than at peers. Some weaknesses in FIBank's lending
franchise and a reduction of risk appetite are putting pressure
on lending margins, and further potential reduction in funding
costs may not be sufficient to mitigate these. This was evident
in 1Q17 results, with the net interest margin falling to around
4.2%, albeit still in line with that posted by peers in 2016.

FIBank's FCC ratio improved over 2016 to 13.7% due to profits
generated during the year, which will be fully retained. The
quality of capital has also improved, although unreserved
impaired loans still accounted for a high 71% of FCC at end-2016
(2015: 93%). Loss absorption capacity is enhanced by BGN210
million (equal to 3.4% of RWAs) of Basel 3 compliant AT1
securities included in regulatory Tier 1 capital. Capital buffers
above Tier 1 regulatory minimum were moderate at end-2016, but
will increase by around 160bp following the inclusion of 2016
profit.

Funding is a rating strength and refinancing risk is low.
Granular, mostly retail customer deposits accounted for 96% of
total funding at end-2016. The growth of customer deposits in
both 2015 and 2016 suggests that FIBank's deposit franchise has
recovered from the turbulence that resulted in state liquidity
support in 2014, which was fully repaid in 2016. However,
FIBank's deposit funding relies mostly on term deposits, while
the share of cheaper current and saving account deposits is lower
than peers.

RATING SENSITIVITIES
IDRS AND SUPPORT RATINGS

The IDRs and SR of Raiffeisenbank, Bulbank and UBB are sensitive
to Fitch views of ability or propensity of their respective
parents to support their Bulgarian subsidiaries. Fitch does not
expects the banks' owners' support propensity to weaken. UBB
would be upgraded if Bulgaria's Country Ceiling is revised
upwards.

FIBank's IDRs are sensitive to changes in the bank's VR.

VRs
An upgrade of Raiffeisenbank's and Bulbank's VRs would require an
improvement of the operating environment and a further
strengthening of overall credit profile (Raiffeisenbank).

An upgrade of UBB would require a significant reduction of its
high impaired loans, a strengthening of its general risk
management framework and an extended record of solid financial
results.

A further upgrade of FIBank would require faster resolution of
legacy impaired loans, a reduction of loan book concentrations
and monetisation of repossessed assets without denting its
capitalisation, and a longer record of sound profitability.

Deterioration in the operating environment, which would result in
a substantial inflow of new bad debt and capital erosion at the
four banks, could lead to downgrades of their VRs.

The rating actions are as follows:

Bulbank
Long-Term IDR: affirmed at 'BBB-'; Outlook Stable
Short-Term IDR: affirmed at 'F3'
Support Rating: affirmed at '2'
Viability Rating: affirmed at 'bb'

FIBank
Long-Term IDR: upgraded to 'B' from 'B-'; Outlook Stable
Short-Term IDR: affirmed at 'B'
Viability Rating: upgraded to 'b' from 'b-'
Support Rating: affirmed at '5'
Support Rating Floor: affirmed at 'No Floor'

Raiffeisenbank
Long-Term IDR: affirmed at 'BBB-'; Outlook Stable
Short-Term IDR: affirmed at 'F3'
Support Rating: affirmed at '2'
Viability Rating: affirmed at 'bb'

UBB
Long-Term IDR: affirmed at 'BBB+'; Outlook Positive
Short-Term IDR affirmed at 'F2'
Support Rating: affirmed at '2'
Viability Rating: upgraded to 'bb-' from 'b+'


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D E N M A R K
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NORICAN GLOBAL: S&P Assigns B Long-Term CCR, Outlook Stable
-----------------------------------------------------------
S&P Global Ratings said it has assigned its 'B' long-term
corporate credit ratings to Denmark-based Norican Global A/S and
its core issuing subsidiary Norican A/S. The outlooks are stable.

At the same time, S&P said, "we assigned a 'B' issue rating to
Norican's EUR340 million senior secured notes. The recovery
rating is '4', indicating our expectation of average recovery
(30%-50%; rounded estimate 35%) in the event of a payment
default.

"The ratings are in line with the preliminary ratings we assigned
on May 2, 2017."

Norican closed its acquisition of Light Metal Casting Solutions
Group (LMCS) on April 28, 2017. The group issued a six-year
EUR340 million senior secured note to finance the acquisition and
transaction-related costs, and to repay all of its outstanding
debt, which included a EUR50.1 million term loan A, EUR100.1
million term loan B, and EUR15 million of drawings on a revolving
credit facility (RCF). The group also issued a EUR75 million
super-senior RCF, with a EUR55 million cash sub-limit, which was
undrawn on completion of the acquisition.

Norican group, created by the merger of DISA and Wheelabrator in
2008, is a global manufacturer of technology and services for
formation and preparation in the metallic parts enhancement value
chain. Norican has acquired LMCS, a provider of integrated light-
weight metal processing within parts formation. The combined
group's pro forma 2016 revenue was about EUR555 million and
EBITDA was about EUR70 million. S&P's 'B' rating on Norican
reflects its view of the combined group's highly leveraged
financial risk profile and weak business risk profile after the
LMCS transaction.

Despite the LMCS acquisition, Norican remains smaller than global
capital goods peers that operate across many markets and sectors.
Although Norican is the leader in most of its areas of operations
within metallic parts formation and preparation, it represents a
small share of the highly fragmented metallic parts enhancement
market. The group has a solid customer base and geographic
diversification, but with end-market concentration in the
cyclical automotive sector where it generates about two-thirds of
its sales. This, together with its limited size and scope makes
the company vulnerable to external changes and downturns,
especially in the automotive sector. The group's equipment is of
top industry standard; however, service sales have relatively
limited technological content, leading to lower barriers to
entry. This is partly mitigated by Norican's global service
network and proximity to its customers.

These weaknesses are partly mitigated by Norican's position as
one of the largest manufacturers and service providers in its
niche markets. The acquisition of LMCS further enhances Norican's
position in the parts-formation sector and will complement the
group's product offering with casting equipment for the aluminum
foundry industry. The group benefits from its relatively large
installed base of machines and its global sales and service
platform, which contributes to recurring aftermarket revenues.
S&P views as positive the group's relatively large share of
aftermarket sales, representing about 42% of sales after the
transaction, which are more stable and offer higher profitability
than its cyclical and competitive equipment sales.

The major constraints to Norican's financial risk profile are the
group's aggressive financial policy, owing to its private-equity
ownership and highly leveraged capital structure. S&P said, "We
forecasts pro forma debt to EBITDA at 5.5x-5.7x and funds from
operations (FFO) to debt at 7%-9% for 2017. The group's financial
risks are partly mitigated by the low capital intensity of the
business, with replacement capital expenditures estimated at only
about 1.0%-1.5% of sales, and moderate working capital needs. We
therefore expect the company will be able to generate positive
free operating cash flows (FOCF), despite its relatively high
cash-paying interest and tax burden. We also take into account
the group's relatively strong FFO cash interest coverage, which
we forecast will remain above 2.5x over 2017-2019.

"The stable outlook reflects our expectation that Norican will
maintain its solid position within its target market and achieve
an adjusted EBITDA margin of 12.5%-13.5% and debt to EBITDA of
about 5.5x-5.7x in 2017. We anticipate gradual deleveraging and
that Norican's financial risk profile will remain at the stronger
end of the highly leveraged category, with FFO cash interest
coverage above 2.5x and debt to EBITDA below 5.5x after 2017. We
also expect liquidity will remain adequate.

"We could lower the ratings if Norican's operating performance
were weaker than our forecasts, or if the company introduced a
more aggressive financial policy than we expected. This might
occur if FFO cash interest coverage deteriorated to below 2.5x or
if Norican's debt to EBITDA exceeded 5.5x over a prolonged period
and the company failed to generate sustainably positive FOCF. We
could also consider a downgrade if Norican did not maintain
adequate liquidity. These scenarios could materialize from
weaker-than-expected market conditions or operating performance,
a larger-than-expected debt-financed acquisition or integration
costs, or synergies not being fully realized.

"Rating upside is limited in our view. We could consider raising
the rating if Norican's credit metrics materially and sustainably
strengthened, for example with debt to EBITDA consistently below
5x and FFO to debt above 12.0%. An upgrade would be subject to
our view that any improvement would be sustained by a
conservative financial policy."


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G E O R G I A
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BANK OF GEORGIA: BGEO Demerger Neutral for Ratings, Fitch Says
--------------------------------------------------------------
Fitch Ratings says the recent announcement of BGEO Group PLC to
demerge into a London-listed banking business and a London-listed
investment business should be neutral for the ratings of Bank of
Georgia (BoG, BB-/Stable/bb-) and its Georgia-based holding
company JSC BGEO Group (BGEO, BB-/Stable/bb-).

Currently, BoG is 99.6%-owned by BGEO, which in turn is fully
owned by UK-based holding BGEO Group PLC, which is listed on the
London Stock Exchange. Fitch understands from management that
BGEO will remain the holding company for Bank of Georgia
following the demerger. However, BGEO will cease to be the
holding company for the group's investment business.

The demerger will not have a direct impact on BoG's financial
metrics, in Fitch's view, as the investment business was already
deconsolidated from BoG as a result of a legal restructuring in
August 2015. Fitch also believes the refinancing risks of the
bank will be manageable in case of a transfer of the USD350
million senior Eurobond from the BGEO level to the bank. The bond
is equal to a significant 10% of the bank's end-1Q17 liabilities,
but USD150 million of the bond proceeds have already been on-lent
by BGEO to BoG, and the bank maintains a sizeable liquidity
cushion (at end-1Q17 equal to 19% of its liabilities). The
details on how BGEO might transfer the Eurobond to BoG are
unclear at present.

The direct impact on the financial profile of BGEO should be
moderate, in Fitch's view. The transaction will likely be
accounted as an equity distribution for BGEO, but Fitch estimates
that double leverage should not increase as a result and should
remain below 120% in the medium term.

The ratings of BoG reflect the bank's adequate asset quality,
reasonable capitalisation, sound profitability metrics and a
stable funding profile. The ratings also capture the bank's high
lending dollarisation level and significant borrower
concentrations. Upside for BoG's ratings is limited, as they are
already at the same level as the Georgian sovereign.

The 'BB-' Long-Term Issuer Default Rating of BGEO is at the same
level as that of BoG, its main operating subsidiary, reflecting
Fitch's view that the default risk of the holding company is
highly correlated with that of BoG.

On July 3, 2017 BGEO Group PLC announced its intention to demerge
the group into a London-listed banking business (Bank of Georgia
Group PLC) and a London-listed investment business (BGEO
Investments PLC). Management believes this should create
additional value to the shareholders, enhance growth
opportunities for both businesses and help to avoid any cross-
business conflict of interest. According to management, the
transaction should be completed in 1H18.


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G E R M A N Y
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HP PELZER: Fitch Affirms Then Withdraws 'B' Issuer Default Rating
-----------------------------------------------------------------
Fitch Ratings has affirmed HP Pelzer GmbH's (Pelzer) Long-Term
Issuer Default Rating (IDR) at 'B'. The Outlook is Stable. Fitch
has simultaneously withdrawn the rating.

The withdrawal of the ratings is due to commercial reasons. Fitch
will no longer provide ratings or analytical coverage of the
company.

KEY RATING DRIVERS

Business Profile: Pelzer's rating reflects Fitch assessment of a
business profile at the high end of the 'B' category. The company
benefits from its strong position in the global automotive
acoustic and thermal insulation materials markets, its long-
standing relationships with most of the largest global original
equipment manufacturers (OEM), its worldwide industrial footprint
close to automotive manufacturers production hubs, and its
balanced geographic diversification. Negative factors include the
relatively small size of its manufacturing operations, its
exposure to narrowly defined markets with a product portfolio
mostly composed of relatively low- to mid-value-added products
out of sight of end-customers.

Improving Operating Performance: Pelzer continued to post strong
sales growth in 2015 and 2016 benefiting from higher production
and the consolidation of the Adler-related auto businesses.
Operating EBIT margin also continued to strengthen and recent
performance has confirmed that profitability is now in line with
a 'B+' rating. Pelzer's consolidate its profitability over the
first nine months of 2016 with the September 2016 last-twelve-
months (LTM) EBIT margin settled at 5.6%, the same level as in
2015. It has benefited from higher volume, procurement
optimisation, and the declining costs of basic materials and
energy inputs which offset higher personnel and depreciation and
amortisation expenses.

Fitch expects operating margins will remain broadly stable and in
line with Fitch expectations for a rating in the high end of the
'B' rating category. Fitch is confident that Pelzer will be able
to maintain the profitability improvements achieved through a
combination of strict cost control and favourable oil-based
material costs. This will also provide time to further reduce the
breakeven point and gradually address the need for higher R&D
spending. Risks to this scenario remain. Challenges include
faster and larger than expected raw materials and energy prices
increases, and failure to tackle slower growth rates in key
markets.

Positive FCF Expected: For the LTM to end-September 2016, FCF
generation improved, but was negative and remains weak for the
rating despite more solid underlying funds from operations (FFO)
and cash flow from operations generation (CFO). Fitch project
that its free cash-flow (FCF) margin will continue to improve,
reaching 1.0% by 2018, a level well in line with Fitch
expectations for the rating. This development will be driven by
Fitch expectations of greater operating cash flow thanks to
positive EBITDA development, lower cash interests following the
refinancing, and Pelzer's efforts to better manage its working-
capital positon and keep its capital spending in check.

Weak Financial Structure: Fitch expects EBITDA gross leverage to
remain commensurate with the current rating over the foreseeable
future, but with limited headroom. The likely increase in gross
debt following the recent refinancing of the senior secured notes
is projected to partly offset the expected improvement in EBITDA
generation, leading to an EBITDA gross leverage remaining above
3.5x at end-2019. In April 2017 Pelzer issued EUR350 million of
senior secured notes to refinance EUR280 million of senior
secured notes issued in 2014. Fitch also believes that there is a
risk that debt-funded acquisitions could delay the reduction in
gross and net leverage.

DERIVATION SUMMARY

HP Pelzer is a sound niche player with good market positions in
its core product fields. The scale of its operations and the
added value of the auto parts manufactured are well in line with
Fitch expectation for an auto-supplier rated in the high end of
the 'B' category. Pelzer also benefits from adequate geographical
diversification, similar to a larger global peer, such as
Continental ('BBB+'/Stable). However, Pelzer remains in a weaker
competitive position than major global auto-suppliers, such as
Faurecia ('BB'/stable) and Tenneco (BB+/Stable), based on the
technology content and the variety of its product range as well
as the size of its manufacturing operations. The business profile
of Pelzer is also characterised by the absence of activity in the
more stable and profitable aftermarkets businesses. Recent
improvements are making the EBIT and FFO profitability
commensurate with 'B+' rated peers while FCF generation is weak
for the current rating. Leverage metrics are commensurate with
'B' rated peers. No country-ceiling, parent/subsidiary or
operating environment aspects impacts the rating.

KEY ASSUMPTIONS

Fitch's key assumptions within Fitch rating case for the issuer
include:
- single-digit increase in revenue each year from 2017 to 2019;
- operating EBITDA margins slightly below or at 9.0% over 2017-
   2019;
- operating EBIT margins slightly below or at 5.5% over 2017-
   2019;
- aggregate working-capital outflow of around EUR35 million over
   2017-2019;
- average capex intensity of 3.8% over 2017-2019;
- no dividends assumed.

RATING SENSITIVITIES

Future Developments That May, Individually or Collectively, Lead
to Positive Rating Action
- None as the rating is withdrawn.
   Future Developments That May, Individually or Collectively,
   Lead to Negative Rating Action
- None as the rating is withdrawn.


* Germany Calls for Review of EU Bank-Failure Rules
---------------------------------------------------
Alexander Weber and Rainer Buergin at Bloomberg News report that
German Finance Minister Wolfgang Schaeuble joined his
counterparts from the Netherlands and Austria in calling for a
review of European Union bank-failure rules after Italy won
approval to pour as much as EUR17 billion (US$19.4 billion) of
taxpayers' cash into liquidating two regional lenders.

Mr. Schaeuble, as cited by Bloomberg, said Italy's disposal of
Banca Popolare di Vicenza SpA and Veneto Banca SpA revealed
differences between the EU's bank-resolution rules and national
insolvency laws that are "difficult to explain."

According to Bloomberg, he said that's why finance ministers have
to discuss the Italian cases and consider "how this can be
changed with a view to the future".

Dutch Finance Minister Jeroen Dijsselbloem said the focus should
be on EU state-aid rules for banks that date from 2013, before
the resolution framework was put in place, Bloomberg relates.
Italy relied on these rules for its state-funded liquidation of
the two Veneto banks and its plan to inject EUR5.4 billion into
Banca Monte dei Paschi di Siena SpA, Bloomberg discloses.

The EU laid down new bank-failure rules in the 2014 Bank Recovery
and Resolution Directive after member states provided almost EUR2
trillion to prop up lenders during the financial crisis,
Bloomberg notes.

According to Bloomberg, Elke Koenig, head of the euro area's
Single Resolution Board, said that the framework for failing
lenders needs to be reviewed to "see how to align the rules
better."

The EU commissioner in charge of financial-services
policy, Valdis Dombrovskis, said that this could only happen once
banks have built up sufficient buffers of loss-absorbing debt,
Bloomberg relays.

The EU's handling of the Italian banks was held up by U.S.
Federal Reserve Bank of Minneapolis President Neel Kashkari as
evidence that requiring banks to have "bail-in debt" doesn't
prevent bailouts, Bloomberg notes.

In the wind-down of the two Veneto banks, Mr. Koenig's SRB
decided that resolution under BRRD wasn't warranted because of
the firms' small size, says the report.

That meant Italian authorities were free to dispose of the
lenders under national insolvency law, using public funds and
shielding senior bondholders from losses they would have faced
under BRRD, Bloomberg relays.  Italy's plan relied on EU state-
aid rules set out by the European Commission in the 2013 Banking
Communication, Bloomberg states.

"The question is of course if the state-aid rules that apply in
any case should not be adjusted now that we're in a new time of
the BRRD framework," Bloomberg quotes Mr. Dijsselbloem as saying
on June 10.  "We need to make sure that even if other legal
frameworks apply, the state-aid rules should be to the same kind
of level."

Austrian Finance Minister Hans Joerg Schelling said the EU
doesn't need new rules, "but we need everyone to finally adhere
to the rules.  It will have to be discussed why it was decided
that way.  Why was national law applied instead of the European
directive?", Bloomberg recounts.



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


BERICA 6: Fitch Hikes Rating on Class C Notes from BBsf
-------------------------------------------------------
Fitch Ratings has taken rating actions on Berica 6 Residential
MBS S.r.l. (Berica 6) as follows:

Class A2 (ISIN IT0004013790) downgraded to 'A-sf' from 'Asf'; off
Rating Watch Negative (RWN); Outlook Stable

Class B (ISIN IT0004013808) affirmed at 'BBBsf'; off RWN; Outlook
Stable

Class C (ISIN IT0004013816) upgraded to 'BBBsf' from 'BBsf'; off
RWN; Outlook Stable

Berica 6 is an Italian RMBS transaction originated by the Banca
Popolare di Vicenza (BPVi) group. On June 27, 2017, Fitch
downgraded BPVi's Long- and Short-Term Issuer Default Ratings
(IDRs) to 'D' from 'CCC' and 'C', respectively, following the
announcement that BPVi had been placed into liquidation.

Servicing of the Berica transactions, including Berica 6, is not
affected by the liquidation as the underlying loans will continue
to be fully serviced by Intesa Sanpaolo (for loans originated by
BPVi) and Banca Nuova (for the loans it originated).

Fitch placed Berica 6's notes on RWN in January 2017 because of a
mismatch between assets and liabilities (less than EUR350,000)
that if not cured could have determined a loss at legal final
maturity for all notes, despite the cash reserve being at its
target amount and the principal deficiency ledger (PDL) being
clear.

KEY RATING DRIVERS
Assets and Liabilities Mismatch Cured
The assets and liabilities mismatch was cured on the payment date
falling in January 2017 with some fees and interest collections
diverted to principal available funds on a one-off basis. As a
result, the transaction now benefits from more than EUR900,000
over-collateralisation, also thanks to provisioning of delinquent
loans, in addition to defaulted loans, via the PDL, as per the
transaction documentation.

Proceeds from Defaults' Buyback
In October 2016, the BPVi group repurchased EUR62 million of
defaulted claims at par. The proceeds from the disposal of
distressed loans have been trapped in the structure and have
funded an extra reserve account that will be used to pay
interests on the notes, clear the PDL, if any, and replenish the
cash reserve to its target. As of 1Q17, the balance of the extra
reserve account was EUR58 million. In Fitch's stressed rating
scenarios, this extra reserve is key in maintaining the PDL
cleaned and the cash reserve at its target amount for many note
payment dates.

Swap Counterparty Risk
Berica 6 benefits from a total return swap with Commerzbank AG
(BBB+/F2, Derivative Counterparty Rating A-(dcr)), whereby the
issuer pays all interest earned on the collateral portfolio while
the swap party pays an amount equal to the weighted average
interest rate on the class A2, B and C notes plus a margin of 75
bps multiplied by a notional amount defined as the principal
amount outstanding on the portfolio multiplied by the interest
earned on the portfolio and divided by the scheduled interest on
the portfolio. The swap party also pays the issuer the
transaction's senior expenses.

In Fitch's view, this swap has non-standard features and is
providing the issuer with substantial credit support. As such, it
may not be replaceable under the same terms with an alternative
hedging counterparty.

In addition, according to the transaction's documentation, the
proceeds from defaults' buyback standing to the extra reserve
account could be used to pay the swap subordinated termination
payments to the swap party, if the latter defaults, because on
any payment date the extra reserve is replenished junior to this
potential payment. Given the termination amount is of uncertain
size, it could be a drag for the extra reserve, and leave the
noteholders with less protection.

For those reasons, Fitch has capped the rating of the class A
notes at the rating of the swap counterparty. Fitch has
downgraded the class A notes to 'A-sf', the Derivative
Counterparty Rating of Commerzbank AG.

Switch to Sequential Paydown Could Protect Senior Notes
The class A, B and C notes are still being repaid on a pro rata
basis despite the continued weak performance of the underlying
pool. All pro rata conditions, including a clear PDL and the cash
reserve at its target, are met and, according to the legal
documentation, there is no mandatory switch back to a sequential
paydown mechanism in the tail of the transaction. The pro-rata
paydown is credit positive for the class B and C notes, whereas
it is detrimental for the senior notes. The affirmation of the
class B notes and upgrade of the class C notes reflect the pro-
rata amortisation they have been benefiting from so far.

Fitch expects the pro-rata paydown to continue. However, Fitch
note that in Fitch stressed scenarios, the pro-rata allocation of
principal available funds will switch back to sequential due to
the high level of new defaults depleting the extra reserve and
bringing the balance of the cash reserve below its target. The
switch back to sequential paydown under Fitch's stressed
scenarios will provide more protection to the class A notes than
the class B and C notes, which is reflected in the higher rating
of the senior notes.

No Interest Deferral on Mezzanine Notes
Interest payments on class B and C will be subordinated to the
PDL if the gross cumulative default ratio exceeds 12%. Cumulative
gross defaults currently stand at 10.7%.

Fitch expects the default trigger to be breached during the life
of the transaction, but the agency does not expect interest
payments on the class B and C notes to be deferred. In Fitch's
view, the current balance of the extra reserve and the cash
reserve at target will allow to maintain a clean PDL, so that
class B and C interest will still get paid regardless of the
trigger breach. This expectation is reflected in the investment
grade rating of the mezzanine notes.

Recovery Rate Cap
Fitch has increased the maximum recovery rate to 80% of the
outstanding and new defaults from 70% recovery cap assumed in the
last surveillance review, in line with its recovery assumptions
for Berica ABS 5 rated by Fitch in March 2017, for which the
agency received updated recovery performance data.

Similarly, Fitch also increased the recovery period to 14 years
from 12.5 years assumed in the last surveillance review, in line
with the initial rating analysis of Berica ABS 5.

RATING SENSITIVITIES
A one-notch downgrade of the swap counterparty would affect the
class A notes, as their rating is capped at the swap
counterparty. A multi-notch downgrade of the swap party would
also trigger a rating action on class B and C, as the rating cap
would become a constraining factor also for those tranches.

Further deterioration in asset performance beyond Fitch's
standard assumptions would trigger negative rating action.


UNIPOL BANCA: Moody's Reviews Ba2 Deposit Ratings for Upgrade
-------------------------------------------------------------
Moody's Investors Service has placed on review for upgrade the
following ratings of Unipol Banca S.p.A. (Unipol Banca): (1) the
local and foreign currency Ba2 long-term and Not Prime short-term
deposit ratings; (2) the local currency Ba3 long-term senior
unsecured rating; (3) the standalone baseline credit assessment
(BCA) of caa1 and adjusted BCA of b2; and (4) the long-term and
short-term Counterparty Risk Assessments (CRAs) of Ba2(cr) and
Not Prime(cr) respectively.

RATINGS RATIONALE

RATIONALE FOR THE BCA

The review for upgrade of the caa1 BCA is driven by the prospect
of a significant reduction in Unipol Banca's problem loans to
around 10% of its total loan book (compared to 36% at end-2016),
with a relatively limited impact on its capital, given that most
related losses will be taken by other entities within the broader
Unipol group.

On June 30, Unipol Banca's parent Unipol Gruppo S.p.A. (UG, rated
Ba2/Negative) announced a group reorganisation and restructuring
plan of the bank including (1) the transfer of EUR3 billion of
bad loans (out of total problem loans of EUR3.7 billion at end-
2016) from the bank's balance sheet to a new entity within the UG
group; (2) the write-down of bad loans and unlikely-to-pay loans
to 20% and 60% of face value respectively; and (3) that the cost
(after tax) for the group of EUR780 million will have a limited
impact on the banking group's Common Equity Tier 1 ratio of about
1 percentage point. The group expects to implement the plan by Q1
2018, and aims to pursue strategic options in the context of the
Italian banking consolidation.

In Moody's opinion, the transfer of bad loans and the
strengthened coverage of the remaining unlikely-to-pay loans to
more prudent levels will significantly strengthen Unipol Banca's
asset risk profile. That said, Moody's considers that the
estimated 10% CET1 ratio is below the Italian average but
adequate given the bank's much improved asset risk profile and
the ongoing support the bank is receiving from the group.
Although loan loss provisions will decline next year,
profitability will remain weak.

Moody's expects to conclude its review when technical details of
the restructuring, including the loan loss provisions to be borne
by the bank, are disclosed together with the semiannual results,
expected in August.

RATIONALE FOR THE LONG-TERM RATINGS

The reviews of the Ba2 deposit rating and Ba3 senior unsecured
rating are driven by Moody's expectation that the banks'
standalone creditworthiness will strengthen. However, this might
be partly offset by a potential reduction in the support from UG
currently incorporated into the ratings, given that UG has stated
that it is in search of a strategic partner for the bank.

WHAT COULD CHANGE THE RATINGS UP/DOWN

Moody's could upgrade Unipol Banca's ratings if the restructuring
leads to a sustained reduction in problem loans with limited
capital impact.

A downgrade of the banks' ratings is unlikely given the current
review for upgrade.

LIST OF AFFECTED RATINGS

Issuer: Unipol Banca S.p.A.

On Review for Upgrade:

-- LT Bank Deposits (Local & Foreign Currency), currently Ba2,
    Outlook Changed To Rating Under Review From Stable

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

-- Senior Unsecured Regular Bond/Debenture, currently Ba3,
    Outlook Changed To Rating Under Review From Stable

-- Adjusted Baseline Credit Assessment, currently b2

-- Baseline Credit Assessment, currently caa1

-- LT Counterparty Risk Assessment, currently Ba2(cr)

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

Outlook Actions:

-- Outlook, Changed To Rating Under Review From Stable

PRINCIPAL METHODOLOGY

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


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


MEDIARENA ACQUISITION: S&P Cuts CCR to CCC+, Outlook Stable
-----------------------------------------------------------
S&P Global Ratings lowered to 'CCC+' from 'B-' its long-term
corporate credit rating on MediArena Acquisition B.V., the parent
of Netherlands-based Endemol Holdings B.V. and Endemol Shine
Group (ESG). The outlook is stable.

S&p said, "We also lowered our issue ratings on the group's
senior secured first-lien term debt due 2021 to 'CCC+' (unchanged
recovery rating of '4' [30%-50%]) and our issue rating on the
$457 million second-lien term loan maturing in 2022 to 'CCC-'
(unchanged recovery rating of '6' [0%-10%]).

"The downgrade primarily reflects our view of the group's
mounting liquidity pressure. It also reflects the group's weak
credit metrics and our view that the current debt leverage is
unsustainable over the long term. Finally, we consider that the
local bankruptcy filing of the Turkish entity announced today
will not materially affect the group at this stage."

Due to audience fragmentation and the arrival of new entrants
into the TV/video market, quality content has become critical to
retaining and attracting new consumers for traditional
broadcasters and for new entrants including over-the-top (OTT)
players such as Amazon and Netflix. In particular, there is a
strong demand for scripted shows (for drama in particular)
compared to unscripted shows.

In this context, TV production company ESG continues to rebalance
its production toward scripted shows while its unscripted shows
(including successful shows like Big Brother and MasterChef)
still generated about 70% of the group's EUR1.9 billion revenues
in 2016.

However, scripted shows require heavier investment and a longer
production period while they are also typically more subject to
potential delays/rescheduling from broadcasters. This adds
volatility to the group's earnings and cash flows, leading S&P to
project that the company need for working capital will keep
increasing and assume a longer wait for investments to payback
and improve ESG's credit metrics.

The company has so far met this higher cash flow need by drawing
on its revolving credit facilities (RCF) and establishing a
securitization facility.

S&P believes headroom for further drawing remains only limited
because:

-- S&P sees limited immediate improvement in the company's
    earnings and cash flow due to the longer payback period of
    scripted shows;
-- Undrawn lines have come down: at end-March 2017 only $47.7
    million was available under the $100 million receivable
    facility and EUR25 million under the EUR125 million RCF; and
-- Covenant headroom under the group's debt facilities
   (excluding the receivables facility) had tightened to close to
    5% at end-March 2017, which could restrain the group's access
    to the undrawn part of the RCF.

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

-- Fairly stable revenues in 2017 and 2018 from the EUR1.9
    billion generated in 2016. This reflects the limited
    improvement in performance in the first quarter of 2017 as
    well as the typically longer payback period for scripted
    shows and the lumpy characteristics of the business, which
    can lead to some delay in scheduled broadcasting time (and
    further lengthen the payback period).
-- Limited improvement in reported EBITDA margins due to the
    group's stronger focus on scripted compared to unscripted
    shows. S&P understands that scripted shows typically have
    lower profitability than scripted, at least for the first 12-
    24 months.
-- Moderate improvement in adjusted EBITDA margins. S&P assumes
    that restructuring costs will continue to decrease from the
    2015-2016 peak following the 2014 merger with Shine, and
    therefore its adjusted EBITDA margin (which is calculated
    after restructuring costs) may modestly improve to 10%-11%,
    from 9.2% in 2016.
-- Increase in working capital due to the group's increasing
    production of scripted shows.
-- Net capex of about EUR15 million annually.
-- No M&A or shareholder return due to the group's stretched
    liquidity position, high leverage, and absence of cash.

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

-- Debt-to-EBITDA to remain around 10x; and
-- Negative free cash flow generation.

Finally, S&P said, "at this stage we understand that the group's
internal control deficiencies in Turkey, resulting in the Turkish
entity filing for bankruptcy locally, will have a limited impact
on the rest of the group. This is because the Turkish entity is
immaterial to the group as per the definition of the debt
documentation, and therefore this bankruptcy filing in Turkey
does not trigger the acceleration of the group's debt.

"The stable outlook reflects our view that the company will
continue to rebalance its production toward more-scripted shows,
which we view as more working-capital-intensive and having a
longer payback period than unscripted productions. We believe
this leaves limited room for improvement in the group's leverage
and cash generation. We also project debt to EBITDA will remain
unsustainable at 10x and liquidity will remain constrained by
negative free cash flow, tight covenant headroom, and limited
undrawn committed back-up lines.

"It also reflects our understanding that the local bankruptcy
filing of the Turkish entity will have a limited impact on the
rest of the group and, in particular, will not trigger the
acceleration of the group's debt.

"We could lower the rating if we believed that the group's
probability of default had increased, especially if we saw a risk
of its liquidity running dry for the following 12 months or if we
believed that the local bankruptcy filing of the Turkish entity
would have a material impact on the group. We believe this could
happen if the group's working capital needs increased beyond our
current expectations, which would lead to a covenant breach and
weaken liquidity.

"We view an upgrade as unlikely over the next 12 months given the
group's planned expansion into scripted production. This will
continue to pressure its credit metrics and free cash flow
generation until the investment starts paying back and feeding
through to the metrics. We expect this to take at least one year.
Nonetheless, rating upside could stem from the group restoring
its EBITDA generation such that leverage sustainably reduces and
it can cover its interest expense by at least 1.5x. An upgrade
would hinge on the group meaningfully improving its free
operating cash flow while restoring sustainable liquidity such
that cash and undrawn committed back-up lines comfortably cover
upcoming shortfalls in free cash flow and short-term debt
maturities."


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


EUROPLAN: Fitch Affirms 'BB-' Sr. Unsecured Debt Rating
-------------------------------------------------------
This commentary replaces the version published on June 30, 2017.
It corrects the rating action on the senior unsecured rating of
JSC Leasing company Europlan's bonds to affirmation at 'BB-'
following the transfer of the notes from PJSC Europlan, and not
withdrawn at PJSC Europlan and assigned at opco as stated
initially.

Fitch Ratings has withdrawn PJSC Europlan's ratings, including
its Long-Term Issuer Default Ratings (IDRs) of 'BB-'.
Simultaneously, the agency has assigned the newly created JSC
Leasing company Europlan (LC Europlan) Long-Term IDRs of 'BB-'
with a Stable Outlook.

The rating actions follow the completion of the reorganisation of
PJSC Europlan. The reorganisation involved the transfer from PJSC
Europlan to its new subsidiary LC Europlan of all financial
liabilities relating to its leasing business (including
outstanding bonds and bank loans) and all of its leasing assets,
but only a portion of its cash and liquid assets.

Fitch has withdrawn PJSC Europlan's ratings as it has undergone a
reorganisation. Accordingly, Fitch will no longer provide ratings
or analytical coverage for PJSC Europlan.

KEY RATING DRIVERS

The asset/liability transfer is the second stage of Europlan's
reorganisation, the ultimate purpose of which is to create a
holding company for the non-bank financial assets of Safmar
Group, which apart from Europlan include a 49% stake in VSK
Insurance (BB-/Stable), and a 100% stake in Safmar pension fund.

The first stage of the reorganisation was completed in December
2016, when Safmar contributed its stakes in the pension fund and
insurance company to PJSC Europlan, which additionally raised
RUB15 billion of equity contributed in cash via a secondary
public offering.

The rating actions reflect Fitch's view that LC Europlan's credit
profile does not significantly differ from that of PJSC Europlan
before it received stakes in the pension fund and VSK.

LC Europlan's management has informed us that there are no plans
to change the strategy of the company after the carve-out. The
company will continue to focus on retail financial leasing of
vehicles. LC Europlan will retain its core management team and
existing branding.

LC Europlan's 'BB-' Long-Term IDRs and senior debt rating reflect
the company's significant franchise in the Russian auto leasing
sector, so far conservative management and risk appetite, and
sound financial metrics. At the same time, the ratings also
reflect the high-risk Russian operating environment and contagion
risks resulting from Europlan's shareholder, Safmar Group
(previously known as B&N Group).

As per preliminary management accounts after the reorganisation,
LC Europlan's leverage (defined as debt/equity) has increased to
3.3x compared with 1.5x at PJSC Europlan prior to reorganisation,
as a result of PJSC Europlan retaining a sizable part of its cash
and liquid assets. However, Fitch views this leverage as
consistent with a 'BB-' rating.

The senior unsecured notes issued by PJSC Europlan were
transferred to LC Europlan's as part of the group reorganisation
and have been affirmed at 'BB-'. LC Europlan's senior debt rating
is aligned with the company's Local-Currency IDR, reflecting
Fitch's view of average recovery prospects for unsecured senior
creditors in case of default. This in turn is driven by the
moderate proportion of company assets that have been pledged to
secured creditors.

RATING SENSITIVITIES

An upgrade of LC Europlan's IDRs is currently unlikely given the
still challenging operating environment and expected further
increase in leverage from renewed business growth.

The company could be downgraded if its asset quality and
performance weaken significantly, to the extent that this results
in a marked increase in the company's leverage or compromises the
quality of its capital.

LC Europlan could be also downgraded if Fitch concludes that its
strategy, risk appetite, balance sheet structure and/or financial
metrics are likely to significantly weaken following shareholder
actions, or if the company become significantly exposed to
related parties, non-core assets or other contingent risks
arising from the other assets of its owner.

The senior debt rating could be downgraded in case of downgrade
of the company's Local-Currency IDR, or a marked increase in the
proportion of pledged assets, potentially resulting in lower
recoveries for unsecured senior creditors in a default scenario.

The rating actions are as follows:

PJSC Europlan
Long-Term Foreign- and Local-Currency IDRs: 'BB-'; withdrawn
Short-Term Foreign-Currency IDR: 'B'; withdrawn

JSC Leasing company Europlan
Long-Term Foreign- and Local-Currency IDRs: assigned at 'BB-';
Outlooks Stable
Short-Term Foreign-Currency IDR: assigned at 'B'
Senior unsecured debt: affirmed at 'BB-' (transferred from PJSC
Europlan)


ICBC JSC: S&P Withdraws 'BB+/B' Counterparty Credit Ratings
-----------------------------------------------------------
S&P Global Ratings said that it affirmed its 'BB+/B' long- and
short-term counterparty credit ratings on Russia-based Bank ICBC
JSC.

S&P subsequently withdrew its ratings on Bank ICBC JSC at the
bank's request.

At the time of withdrawal, the outlook on the counterparty credit
ratings was positive.

The affirmation reflects the bank's highly strategic status for
its parent, Industrial and Commercial Bank of China Ltd. (ICBC
Ltd.), as well as its good asset quality and reasonable financial
performance. S&P said, "We believe the ICBC group intends to
retain its market presence in Russia despite challenging market
conditions in order to be able to service its long-term clients.
We expect the parent bank to be able to provide support to the
Russian subsidiary in the case of need.

"At the time of withdrawal, the outlook was positive, mirroring
that on the sovereign rating on Russia and reflecting our view of
Bank ICBC JSC's substantial exposure to the risks of operating in
Russia."


INTERNATIONAL FINANCIAL: Moody's Cuts LT Deposit Rating to Caa1
---------------------------------------------------------------
Moody's Investors Service has downgraded International Financial
Club's long-term local- and foreign-currency deposit ratings to
Caa1 from B3, and has affirmed its Not Prime short-term deposit
ratings. Concurrently, Moody's has downgraded International
Financial Club's baseline credit assessment (BCA) and adjusted
BCA to caa1 from b3. Moody's has also downgraded the bank's long-
term Counterparty Risk Assessment (CR Assessment) to B3(cr) from
B2(cr) and affirmed the bank's short-term CR Assessment of Not
Prime(cr).

All long term deposit ratings carry a developing outlook.

RATINGS RATIONALE

Moody's downgrade of the bank's BCA to caa1 from b3 is driven by
International Financial Club's very weak solvency metrics. Its
higher than expected credit costs and losses from consolidation
of troubled Bank Tavricheskiy exerted additional pressure and
wiped the bank's equity to a negative RUB8.5 billion as at year-
end 2016, while the capital support provided by the bank's
shareholders in recent months was not sufficient to restore the
bank's consolidated capital position to the level commensurate
with B-rated peers.

The Central Bank of Russia provided regulatory forbearance,
allowing to defer provisioning expenses by year-end 2017. As a
result, International Financial Club's regulatory capital has not
deteriorated and the bank remained in formal compliance with
regulatory capital requirements with regulatory total and Tier 1
capital adequacy ratios (N 1.0 and N 1.2) of 14.3% and 13.4%,
respectively, reported at June 1, 2017, in accordance with local
GAAP.

Based on the latest available consolidated audited IFRS report as
at YE2016, Moody's estimates that after International Financial
Club received capital support from its shareholders in H1 2017,
its Tangible Common Equity (Moody's key measure of capital
defined as common equity Tier 1 (CET1) capital minus intangible
assets and minus deferred tax assets) remains negative.

To offset losses and restore the capital base, International
Financial Club's shareholders provided capital support to the
bank with a positive effect on its Tier 1 capital of around RUB10
billion in March-April 2017, and around RUB1.0 billion will be
injected into the bank's capital in Q3 2017.

As part of the support package, the bank sold a bulk of its
problem loans (RUB12.2 billion) to shareholders and Moody's
estimated that the level of its problem loans decreased to around
15% of gross loans as at end May 2017 from around 30% at YE2016.

Moody's expects that International Financial Club's profitability
will stabilize over the next 12-18 months. The bank reported a
RUB13.8 billion consolidated loss in 2016 and remained loss
making in Q1 2017 under consolidated IFRS. A higher-than-expected
loss from the consolidation of bailed out Bank Tavricheskiy put
additional pressure on International Financial Club's
consolidated financial results in 2016.

DEVELOPING OUTLOOK

The developing outlook reflects the simultaneous presence of both
possible upward and downward ratings pressures during a period of
ongoing bank's restructuring, aiming at addressing current
solvency risks as well as uncertainty with regards of
implementation of bank's new development strategy over the next
12-18 months.

WHAT COULD CHANGE THE RATING UP/DOWN

International Financial Club's deposit ratings could be upgraded
if the bank materially strengthens its consolidated capital
position and improves profitability. The rating agency could
downgrade ratings in case of weakening liquidity and funding
profile and further material erosion of the bank's capital
position.

LIST OF AFFECTED RATINGS

Issuer: International Financial Club

Downgrades:

-- LT Bank Deposits (Local & Foreign Currency), Downgraded to
    Caa1 from B3, Outlook Changed To Developing From Negative

-- Adjusted Baseline Credit Assessment, Downgraded to caa1 from
    b3

-- Baseline Credit Assessment, Downgraded to caa1 from b3

-- LT Counterparty Risk Assessment, Downgraded to B3(cr) from
    B2(cr)

Affirmations:

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

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

Outlook Actions:

-- Outlook, Changed To Developing From Negative

PRINCIPAL METHODOLOGY

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


PREMIER CREDIT: Put on Provisional Administration
-------------------------------------------------
The Bank of Russia, by its Order No. OD-1907, dated July 10,
2017, revoked the banking license of Moscow-based credit
institution public joint-stock company Premier Credit Bank
Incorporated or Premier Credit Bank Inc. from July 10, 2017,
according to the press service of the Central Bank of Russia.
According to the financial statements, as of June 1, 2017, the
credit institution ranked 369th by assets in the Russian banking
system.

The activities of Premier Credit Bank Inc. are characterised by
the low quality of assets. Considerable portion of the credit
portfolio consists of outstanding loans of borrowers bearing the
signs of shell companies.  As the credit institution has
consistently underestimated credit risk assumed, the Bank of
Russia has repeatedly requested that it create additional
provisions for possible losses.  The high-risk credit policy
pursued by Premier Credit Bank Inc. has led to the emergence of
grounds in its operations for regulatory measures to be taken to
prevent its failure (bankruptcy), and has put its creditors' and
depositors' interests under real threat. Besides, due to the loss
of liquidity the credit institution failed to timely honour its
obligations to creditors.

The Bank of Russia repeatedly applied supervisory measures to
Premier Credit Bank Inc., including restrictions on household
deposit taking.

The management and owners of the bank failed to take effective
measures to normalize its activities. Under the circumstances,
the Bank of Russia has made the decision to withdraw Premier
Credit Bank Inc. from the banking services market.

The Bank of Russia takes this extreme measure -- revocation of
the banking license -- because of the credit institution's
failure to comply with federal banking laws and Bank of Russia
regulations, due to repeated application within a year of
measures envisaged by the Federal Law "On the Central Bank of the
Russian Federation (Bank of Russia)", considering a real threat
to the creditors' and depositors' interests.

The Bank of Russia, by its Order No. OD-1908, dated July 10,
2017, appointed a provisional administration to Premier Credit
Bank Inc. for the period until the appointment of a receiver
pursuant to the Federal Law "On the Insolvency (Bankruptcy)" or a
liquidator under Article 23.1 of the Federal Law "On Banks and
Banking Activities".  In accordance with federal laws, the powers
of the credit institution's executive bodies have been suspended.

Premier Credit Bank Inc. is a member of the deposit insurance
system.  The revocation of the banking licence is an insured
event as stipulated by Federal Law No. 177-FZ "On the Insurance
of Household Deposits with Russian Banks" in respect of the
bank's retail deposit obligations, as defined by law.  The said
Federal Law provides for the payment of indemnities to the bank's
depositors, including individual entrepreneurs, in the amount of
100% of the balance of funds but no more than a total of RUR1.4
million per one depositor.


SME BANK: S&P Affirms 'BB-/B' Issuer Credit Rating
--------------------------------------------------
On July 7, 2017, S&P Global Ratings affirmed its long- and short-
term issuer credit ratings on SME Bank at 'BB-/B'. The outlook
remains stable.

S&P said, "The rating on SME Bank is supported by our view of its
important role for, and very strong link to, the Russian
government as well as its moderate business position based on the
bank's role in providing lending to SMEs, and strong capital and
earnings supported by projected risk-adjusted capital adequacy of
11%-13%, which compares well with regional peers.

"However, rating constraints include the bank's exposure to
changes in the government's economic policy, challenging and
volatile operating environment for banks in Russia, in particular
increasing credit risk, as well as SME Bank's limited earnings
power. In our view, the change in its business model to more
direct lending could pose risks to the bank's business and risk
position, given the riskier nature of direct lending. The bank
now intends to bring the portfolio of direct lending to about
RUB25 billion by the end of 2017 (around 26% of loan book).
However, we still view this strategy as challenging because of
the need to tighten risk management controls and risk selection.
In our view, despite challenges that the bank might face, it will
be helped by its expertise in the SME sector and management's
intention to only gradually transition to the new segment."

Currently 100% of shares in the bank belong to the JSC RSMB
Corporation, a GRE that is owned 62.5% by the government and
37.5% by Vnesheconombank (VEB). Ownership was transferred from
VEB to the Corporation in 2015. The Corporation's strategy is
positioned within the framework of the government policy for
diversification of the Russian economy as well as the socially
important goal of long-term employment stability. The
institution's objectives include improving SMEs' access to
lending across the country, implementing the state guarantee
programs for SMEs, and channeling a portion of state procurement
to the SME sector.

In 2017 SME Bank has been accepted into the RSMB Corporation
warranty scheme and stands to benefit from about RUB18 billion in
a three-year program. The bank has already received RUB1.4
billion of this support. While other forms of support from the
direct owner might include capital injections, at this stage
deposit placement and subordinated loans are restricted under the
terms of the Corporation's investment declaration. S&P said, "We
remain uncertain as to whether this will change, therefore we do
not give any support uplift to the rating on SME Bank from the
RSMB Corporation. At the same time, we believe that the
government would mitigate the effects of potential negative
extraordinary intervention from the group; albeit such
interventions are very unlikely, in our view."

SME Bank interacts directly with some ministries of the federal
government, in particular, the Ministry of Economic Development,
which manages a public policy program aimed at developing SMEs,
and the Ministry of Industry responsible for programs in economic
innovation.

S&P regards SME Bank as a GRE with a high likelihood of timely
and sufficient extraordinary support from the Russian government.
This is based on SME Bank's:

-- Important role in implementing the state's public policy for
the development of the SME sector. Although SME Bank estimates
that bank loansare about 1.4% of total bank lending to SMEs in
Russia, the bank historically accounts for 10%-20% of overall
long-term funding to the SME sector in Russia. We note, however,
that from the government's point of view SME Bank's importance is
not in terms of market share, but its role in the development of
SME lending infrastructure and new products, closing market gaps,
and keeping interest rates low.

-- Very strong link with the Russian Federation. The state's
full ownership and strong oversight of the bank's business and
financial plans will, in S&P's view, continue. In addition to its
functions related to supporting SMEs, SME Bank is Russia's sole
entity with a primary focus on financing SME lending to
infrastructure companies, such as leasing and factoring
institutions, and providing funding to regional financial
institutions.

S&P said, "Our long-term rating on SME Bank is therefore two
notches higher than the bank's 'b' SACP.

"We consider that the bank's business and risk positions could
experience pressure amid the continued contraction of the SME
sector in Russia in 2016-2017, as well as the bank itself
changing its business model to direct lending. In light of the
problems in the Russian banking sector, SME Bank decided to
review its strategy: shifting to direct lending to SMEs from the
two-level system based on lending to financial institutions. In
our view, this strategy might pose additional risks to SME Bank
because it could face competition from other banks on the back of
declining interest rates. While not in our base-case scenario,
this might raise concerns around sustainability of the bank's
business model and its ability to compete with larger market
players. This could lead to a further decline in the loan book or
additional provisioning needs due to failure of SMEs, in turn
requiring a more comprehensive risk approach."

In 2016 SME Bank recorded a negative financial result driven by
several market events. The CBR license withdrawal of Tatfondbank
resulted in a RUB2.7 billion provisioning in 2016 and a bail-in
of the troubled Peresvet Bank resulted in substantially higher
provisions in the same year. SME Bank's nonperforming loans
(NPLs) were 17.76% as of year-end 2016 compared with 8.33% in
2015. S&P said, "We anticipate that credit losses could stay in
the double digits in 2017 driven by the failure of several
smaller banks to which SME Bank provided loans.

"In addition to direct lending, we anticipate that the bank will
also continue to actively provide guarantees to banks and
individual SMEs, as well as support SME financing through
secondary markets by purchasing pools of securitized SME loans
from other banks. However, in our view, the share of this
business is unlikely to be significant compared to direct lending
and lending to banks: likely to be more than 85% of the loan book
in 2017. We expect the loan book to decline by 10% in 2017
because direct lending is unlikely to substitute contraction of
the bank loans."

Strong capitalization and earnings continue to support SME Bank's
SACP, in particular on the back of its changing focus. Despite
high loan-loss provisions in 2016, capital remained strong at
around 13.6% as of year-end 2016. S&P said, "We forecast the bank
will consume capital over the coming years because of possible
new loan provisions stemming from the failure of several smaller
banks to which SME Bank has provided loans.

"We still view the bank's funding and liquidity as moderate, and
its funding as highly concentrated. We note that SME Bank has
increased its dependence on central bank funding to 40% of total
funding at the end of 2016 compared with 37% in 2015. We think
this could increase even further." SME Bank can access dedicated
central bank facilities in the event of a liquidity queeze. These
facilities include direct repurchase agreement transactions, and
collateralized and uncollateralized loans.

S&P said, "The stable outlook reflects our view that in the next
12 months SME Bank will continue to benefit from the high
likelihood of timely and sufficient extraordinary support from
the Russian government and maintain its strong capital and
moderate risk positions.

"We could take a negative rating action in the coming 12 months
if we considered that the likelihood of timely extraordinary
government support to the bank had reduced, for instance if its
public policy role for or links with the government weakened.

"We could take a positive rating action in the coming 12 months
if we raised the local currency ratings on the bank's ultimate
owner, the Russian Federation and at the same time we did not see
any negative trends in SME Bank's business and risk positions; or
if we considered that the likelihood of support from the
government had increased, for example due to the bank's higher
public policy role, or if we could factor in support from the new
owner based on our assessment of its credit quality."


YUGRA: Russia's Central Bank Begins Wind-Up Process
---------------------------------------------------
Max Seddon at The Financial Times reports that Russia's central
bank has begun to wind up Yugra, the country's 33rd-largest
lender by assets, in what is set to become one of the country's
largest banking collapses in recent years.

The central bank said in a statement on July 10 that it had
placed Yugra under temporary administration for six months, which
could lead to the bank's closure, the FT relates.  According to
the FT, Russia's deposit insurance agency will control Yugra
while the central bank investigates its "unstable" financial
position.

"This measure will allow the interests of the bank's depositors
and creditors to be defended," the FT quotes Yugra as saying in a
statement.

Signs of Yugra's problems has emerged during the past year, the
FT notes.  The central bank gave Yugra 10 reprimands ordering it
to form reserves, the FT relays, citing Anna Orlenko, head of the
central bank's oversight department.

"They did make a few steps to solve the problem but it clearly
wasn't enough," Alexander Danilov, an analyst at Fitch, as cited
by the FT, said.  "Either the amount of the injections wasn't
enough, or the time, or the quality of them, or it was a
combination of all of the above."

In May, the bank's auditor, BDO, said Yugra had attempted to pass
off a RUR29 billion capital injection from shareholders as
operational revenue that would have given it a profit, the FT
recounts.

By that time, the central bank had banned Yugra from accepting
new deposits, the FT relays.

Ms. Orlenko said Yugra attracted at least Rbs1.88bn in the last
year by giving new deposit holders shares, allowing them to
bypass regulations, the FT notes.

Valery Pozdyshev, a deputy central bank governor, said on July 10
that regulators suspected Yugra had submitted false accounts to
regulators for months, as well as stripping assets and performing
"manipulations" with client accounts, the FT relates.

Mr. Pozdyshev said that RUR170 billion of Yugra's RUR196.8
billion in assets was eligible for insurance payments of up to
RUR1.4 million (US$20,000) starting in two weeks, according to
the FT.  The payouts would be the largest Russia's deposit
insurance agency has ever paid, the FT states.


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


CATALONIA: Fitch Affirms 'BB' Long-Term IDR, Outlook Negative
-------------------------------------------------------------
Fitch Ratings has affirmed the Autonomous Community of
Catalonia's Long-Term Foreign- and Local-Currency Issuer Default
Ratings (IDRs) at 'BB' with Negative Outlooks. Fitch has also
affirmed the Short-Term Foreign-Currency IDR at 'B'. The ratings
on the senior unsecured outstanding bonds have been affirmed at
'BB'/'B'.

The affirmation reflects the ongoing liquidity support that Fitch
assumes will be provided through the Regional Liquidity Fund
(FLA) to support Catalonia's debt obligations in 2017. The
ratings also reflect protracted political uncertainty stemming
from the evolving relationship between the executives of Spain
and Catalonia.

The Negative Outlook reflects the political risks the region
faces over the next couple of years. Potential outcomes of
ongoing political tensions could be an abrupt separation from
Spain or the withdrawal of state support over the medium term,
specifically in light of the potential vote on Catalonia's
independence scheduled in October 2017 according to the regional
government's agenda.

KEY RATING DRIVERS
Political Tension Continues
Political uncertainty continues to prevail over the region, and
the regional government, ruled by Junts Pel Si (JxS, centre-right
wing) with the support of CUP, a far left wing party, announced
in April its willingness to hold a vote on Catalonia's
independence on October 1, 2017. This is against the mandate of
the central government, which is determined to impede it and is
prosecuting any action aimed at organising such vote under
sedition felony.

Uncertainty over Catalonia since the regional government pushed
for independence has weakened the institutional relationship with
the central government, and as a result Fitch suspended its
'BBB-' support rating floor for Catalonia on November 12, 2015.
In Fitch's view, whether the October 2017 vote takes place and
its outcome will define the framework for Catalonia's
relationship with the central government over the medium term.

Moreover, regional elections are likely soon after that date, as
the governing coalition of JxSi and CUP is very much bound to the
vote and it has shown weak consensus in other areas, as
illustrated in the lengthy process of the approval of the 2017
regional budget.

Debt Redemption Supported
Fitch is monitoring the assistance the central government is
providing to Catalonia through the FLA in the region's redemption
of EUR5,341 million long-term debt in 2017. The servicing of debt
on a timely basis by the FLA is key to Catalonia's 'BB' Long-Term
IDR. An additional EUR4,429 million in short-term debt falls due
during 2017, which will be rolled over by Catalonia under the
oversight of the Ministry of Finance and Civil Service (MinHap).
Fitch believes MinHap's monitoring and the coverage of these
maturities by FLA as a last resort mitigate the liquidity risk.

Catalonia is a major recipient of state liquidity support.
Borrowing from the central government amounted to more than EUR50
billion as of December 31, 2016, around 75% of Catalonia's
estimated total debt on the same date, and the region will borrow
at least EUR7.3 billion from the FLA in 2017. MinHap coordinates
with the participant regions to serve principal and interest on
the debt, and Fitch does not expect this scheme to vary over the
medium term. However, a potential change in the regional
financial system as expected for 2018 may entail a progressive
phase-out of the mechanism. Fitch's base case scenario does not
include any assumption on this regard.

Improved Albeit Still Weak Performance
Catalonia's budgetary performance has been weak for a number of
years, but showed a marked recovery in 2016 boosted by an
additional EUR2 billion revenues from the financial system. Opex
and capex were also contained versus 2015, when unexpected
liabilities of up to EUR1.5 billion arose and a clean-up of
arrears took place. Overall, the 2016 current margin posted a
significant improvement to -3.6%, above Fitch's expectations,
from -21.7% y-o-y. The fiscal deficit also improved to 0.9% of
the region's GDP in 2016 (2.88% in 2015), but still in breach of
the 0.7% deficit goal.

The good economic momentum in Spain is particularly manifest in
Catalonia, leading to enhanced tax collection expectations for
the region in 2017. This results in at least an extra EUR1.2
billion operating revenues to Catalonia in 2017 allocated through
the financial system, allowing further budgetary consolidation.
The region may reduce its negative current margin below 3% and
see an operating break-even over 2017-2018 according to Fitch's
base case scenario.

Fitch also expect debt growth to slow on the back of higher
revenues, with debt representing around 295% of current revenue
at end-2017, after having peaked at 319% in 2015.

Regional Economy Growing
Catalonia has an above-average economic profile and is growing
more quickly than the national economy. Nominal GDP grew 3.8%
against 3.5% nationally in 2016, and the unemployment rate was
15.7% in 2016, versus 19.6% in Spain. Moreover, the number of
registered workers in Catalonia increased 3.8% yoy as of during
2016, versus 3.3% nationwide. The economic recovery has not been
affected by the current political uncertainty, but unilateral
independence of Catalonia could result in economic shock.

RATING SENSITIVITIES
Fitch will continue to monitor developments in Catalonia, in
particular the potential referendum on independence, and will
take negative rating action if state liquidity support weakens as
a result. If the political relationship with the central
government returns to normal, Fitch will reinstate the support
rating floor of 'BBB-' for Catalonia.

KEY ASSUMPTIONS
Fitch assumes that the region will continue to have access to
state support for debt servicing over the medium term.


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


ISTANBUL: Fitch Affirms BB+ Long-Term IDR, Outlook Stable
---------------------------------------------------------
Fitch Ratings has affirmed the Metropolitan Municipality of
Istanbul's (Istanbul) Long-Term Foreign Currency Issuer Default
Rating (IDR) at 'BB+' and Short-Term Foreign Currency IDR at 'B'.
Further, Fitch has affirmed Istanbul's Long Term Local Currency
IDR at 'BBB-' and National Long-Term Rating at 'AAA (tur)'. The
Outlooks are Stable.

The affirmation of the ratings reflects Istanbul's continuing
solid operating performance in line with Fitch unchanged base
case scenario and expected increase in debt stemming from large
capex realisation. Debt servicing would be supported by a healthy
operating balance, keeping debt-to-current balance at just below
two years.

The ratings further take into account the large unhedged FX
liabilities of the city and therefore the devaluation risk the
city is exposed to. This is partly mitigated by the amortising
nature and lengthy maturity of its debt and its predictable non-
seasonal monthly cash flows.

KEY RATING DRIVERS
Fiscal Performance (Strength/ Stable): Fitch projects Istanbul to
post strong, albeit declining, operating margins in the high 40s
in 2017-2019 (2016: 47%). Fitch expects operating margins to fall
on the back of higher operating expenditure ahead of the local
elections in 2019.

According to 1Q17 interim budgetary results Istanbul had already
achieved 27% of the budgeted tax revenue income, including shared
tax revenues and transfers received, reflecting continued robust
local economic growth. Such tax revenues constitute up to 70% of
the city's total income. The city also achieved 13% of its
budgeted non-tax revenue, including fees, fines and rental
income, due to the seasonality of these items. Total income
realisation at end-1Q17 was 22%.

Debt (Neutral/ Negative): Debt funding is expected to increase
due to significant capex realisation. This is likely to drive
debt-to-current balance higher to about two years from a strong
one year. In line with Fitch expectations, direct debt-to-current
revenue is forecast to increase to about 80% in 2017 from 60% at
end-2016. However, the operating balance should remain healthy
and support debt-to-current balance at just below two years.

Istanbul faces significant foreign exchange risk in times of
elevated financial volatility as 98% of its debt at end-2016 was
foreign currency-denominated and unhedged, up from 97% in 2015.
By currency, euro-denominated loans constitute 91% of the city's
foreign-currency debt, with the remainder being US dollar-
denominated loans.

The weighted maturity of its FX debt was nine years at end-2016,
well above Istanbul's expected debt payback (direct debt-to-
current balance) ratio of two years. This, together with the
city's predictable and non-seasonal monthly cash flows, plus
several credit lines with state-owned and commercial banks,
mitigates short-term refinancing risk and extends the debt
servicing of FX loans.

In line with Fitch expectations Istanbul continued to increase
intercompany borrowing at zero cost from its water management
affiliate ISKI to TRY5.2 billion at end-1Q17, from TRY4billion at
end-2016, for which no repayment has been made to date. The city
will continue to borrow from its affiliate and increase borrowing
to about TRY7 billion at end-2019. Fitch expects this debt will
be netted against the transfer of assets that belong to Istanbul
and Fitch classify this debt as direct risk. ISKI is one of the
most profitable companies of Istanbul and its debt is negligible
with debt-to-current revenue below 1%. Contingent liabilities of
the city are low, as most of its companies are self-funding.
Their debt accounted for 2.4% of city's operating revenue in
2016.

Economy (Strength / Stable): Istanbul is Turkey's main economic
hub, contributing on average 30.5% of the country's gross value
added in 2006-2014 (latest available statistics), with wealth
levels far above the country's average. This helps sustain
Istanbul's fiscal strength and allows the city to readily access
financial markets. Rapid urbanisation and continued immigration
flows challenge the city with a continued need for infrastructure
investments. In 2016, the population grew 1.7% yoy to 14.8
million.

Management (Neutral/ Negative): Istanbul has a track record of
disciplined expenditure policy, with spending in 2016 being fully
on budget. Nevertheless, significant increases in capex
realisation ahead of the local elections will drive debt funding
higher, putting pressure on budgetary performance. Also the lack
of an explicit strategy regarding the repayment of intercompany
loans from ISKI makes the city's contingent liabilities less than
transparent.

RATING SENSITIVITIES
The rating of Istanbul is at the sovereign rating level. A
reduction of city's debt-to-current revenue below 60% on a
sustained basis, coupled with continued financial strength and
consistent management policies, could trigger a positive rating
action, provided the sovereign rating is also upgraded.

A negative rating action on Turkey would be mirrored on
Istanbul's ratings. A sharp increase in Istanbul's direct debt-
to-current revenue above 100%, driven by a high materialisation
rate of capex and local currency devaluation, could also lead to
a downgrade of the Long-Term IDRs.


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


FINSBURY 2017-2: Moody's Assigns (P)Caa1 Rating to Cl. D Notes
--------------------------------------------------------------
Moody's Investors Service has assigned provisional long-term
credit ratings to the Notes to be issued by Finsbury Square 2017-
2 plc:

-- GBP [*] M Class A Mortgage Backed Floating Rate Notes due
    September 2065, Assigned (P)Aaa (sf)

-- GBP [*] M Class B Mortgage Backed Floating Rate Notes due
    September 2065, Assigned (P)Aa1 (sf)

-- GBP [*] M Class C Mortgage Backed Floating Rate Notes due
    September 2065, Assigned (P)A1 (sf)

-- GBP [*] M Class D Floating Rate Notes due September 2065,
    Assigned (P)Caa1 (sf)

-- GBP [*] M Class X Floating Rate Notes due September 2065,
    Assigned (P)B3 (sf)

Moody's has not assigned rating to the GBP [*] M Class Z Floating
Rate Notes due September 2065, which will also be issued at
closing of the transaction.

The portfolio backing this transaction consists of UK prime
residential loans originated by Kensington Mortgage Company
Limited ("KMC", not rated). The loans were sold by KMC to Koala
Warehouse Limited (the "Seller", not rated) at the time of each
loan origination date. On the closing date the Seller will sell
the portfolio to Finsbury Square 2017-2. Approximately [91.0]% of
the provisional pool have been originated during 2017.

RATINGS RATIONALE

The ratings of the notes take into account, among other factors:
(1) the performance of the previous transactions launched by KMC;
(2) the credit quality of the underlying mortgage loan pool, (3)
legal considerations and (4) the initial credit enhancement
provided to the senior notes by the junior notes and the reserve
fund.

-- Expected Loss and MILAN CE Analysis

Moody's determined the MILAN credit enhancement (MILAN CE) and
the portfolio's expected loss (EL) based on the pool's credit
quality. The MILAN CE reflects the loss Moody's expects the
portfolio to suffer in the event of a severe recession scenario.
The expected portfolio loss of [2.0]% and the MILAN CE of [12]%
serve as input parameters for Moody's cash flow model and
tranching model, which is based on a probabilistic lognormal
distribution.

Portfolio expected loss of [2.0]%: this is higher than the UK
Prime RMBS sector average of ca. 1.1% and was evaluated by
assessing the originator's limited historical performance data
and benchmarking with other UK prime RMBS transactions. It also
takes into account Moody's stable UK Prime RMBS outlook and the
UK economic environment.

MILAN CE of [12]%: this is higher than the UK Prime RMBS sector
average of ca. 8.7% and follows Moody's assessment of the loan-
by-loan information taking into account the historical
performance available and the following key drivers: (i) although
Moody's have classified the loans as prime, it believes that
borrowers in the portfolio often have characteristics which could
lead to them being declined from a high street lender; (ii) the
weighted average CLTV of [72.46]%, (iii) the very low seasoning
of [0.26] years, (iv) the proportion of interest-only loans
([31.77]%); (v) the proportion of buy-to-let loans ([30.33]%);
and (vi) the absence of any right-to-buy, shared equity, fast
track or self-certified loans.

-- Transaction structure

At closing the mortgage pool balance will consist of GBP [*]
million of loans. The Reserve Fund will be equal to 2.0% of the
principal amount outstanding of Class A to D notes. This amount
will only be available to pay senior expenses, Class A, Class B
and Class C notes interest and to cover losses. The Reserve Fund
will not be amortising as long as the Class C notes are
outstanding. After Class C has been fully amortised, the Reserve
Fund will be equal to 0%. The Reserve fund will be released to
the revenue waterfall on the final legal maturity or after the
full repayment of Class C notes. If the Reserve Fund is less than
1.5% of the principal outstanding of class A to D, a liquidity
reserve fund will be funded with principal proceeds up to an
amount equal to 2% of the Classes A and B.

-- Operational risk analysis

Prior to the closing date, all loans originated between March 23,
2016 and May 31, 2017 are serviced by Acenden Limited ("Acenden",
not rated) and loans originated between December 19, 2013 and May
29, 2015 are serviced by Homeloan Management Limited ("HML", not
rated). KMC will be acting as servicer and cash manager of the
pool from the closing date and will sub-delegate certain primary
servicing obligations to Acenden. KMC will have the option to
leave the servicing of the loans originated between December 19,
2013 and May 29, 2015 with HML. In order to mitigate the
operational risk, there will be a back-up servicer facilitator
(Intertrust Management Limited, not rated, also acting as
corporate services provider), and Wells Fargo Bank International
Unlimited Company (not rated) will be acting as a back-up cash
manager from close.

All of the payments under the loans in the securitised pool will
be paid into the collection account in the name of KMC at
Barclays Bank PLC ("Barclays", A1/P-1 and A1(cr)/P-1(cr)). There
is a daily sweep of the funds held in the collection account into
the issuer account. In the event Barclays rating falls below Baa3
the collection account will be transferred to an entity rated at
least Baa3. There will be a declaration of trust over the
collection account held with Barclays in favour of the Issuer.
The issuer account is held in the name of the Issuer at Citibank,
N.A., London Branch (A1/(P)P-1 and A1(cr)/P-1(cr)) with a
transfer requirement if the rating of the account bank falls
below A3.

To ensure payment continuity over the transaction's lifetime the
transaction documents including the swap agreement incorporate
estimation language whereby the cash manager can use the three
most recent servicer reports to determine the cash allocation in
case no servicer report is available. The transaction also
benefits from principal to pay interest for Class A to C notes,
subject to certain conditions being met.

-- Interest rate risk analysis

[99]% of the loans in the provisional pool are fixed-rate
mortgage, which will revert to three-month sterling LIBOR plus
margin between November 2017 and May 2022. [1]% of the loans in
the provisional pool are floating-rate mortgages linked to three-
month sterling LIBOR. The note coupons are linked to three-month
sterling LIBOR, which leads to a fixed-floating rate mismatch in
the transaction. To mitigate the fixed-floating rate mismatch the
structure benefits from a fixed-floating swap. The swap will
mature the earlier of the date on which floating rating notes
have redeemed in full or the date on which the swap notional is
reduced to zero. BNP Paribas (A1/P-1 and Aa3(cr)/P-1(cr)) acting
through its London Branch, is expected to act as the swap
counterparty for the fixed-floating swap in the transaction.

After the fixed rate loans revert to floating rate, there is a
basis risk mismatch in the transaction, which results from the
mismatch between the reset dates of the three-month LIBOR of the
loans in the pool and the three-month LIBOR used to calculate the
interest payments on the notes. Moody's has taken into
consideration the absence of basis swap in its cash flow
modelling.

-- Stress Scenarios

Moody's Parameter Sensitivities: At the time the ratings were
assigned, the model output indicates that the Class A Notes would
still achieve Aaa(sf), even if the portfolio expected loss was
increased from 2.0% to 6.0% and the MILAN CE was increased from
12% to 16.8%, assuming that all other factors remained the same.
The Class B Notes would have achieved Aa1(sf), even if MILAN CE
was increased to 14.4% from 12.0% and the portfolio expected loss
was increased to 6.0% from 2.0% and all other factors remained
the same. The Class C Notes would have achieved A1(sf), even if
MILAN CE was increased to 14.4% from 12.0% and the portfolio
expected loss was remained unchanged at 2.0% and all other
factors remained the same. The Class D Notes would have achieved
Caa1(sf), if the expected loss remained at 2.0% assuming MILAN CE
increased to 19.2% and all other factors remained the same. The
Class X Notes would have achieved B3(sf) if the expected loss
remained at 2.0% assuming MILAN CE increased to 19.2% and all
other factors remained the same.

Moody's Parameter Sensitivities quantify the potential rating
impact on a structured finance security from changing certain
input parameters used in the initial rating. The analysis assumes
that the deal has not aged and is not intended to measure how the
rating of the security might change over time, but instead what
the initial rating of the security might have been under
different key rating inputs.

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

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

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

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

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

The provisional ratings address the expected loss posed to
investors by the legal final maturity of the Notes. In Moody's
opinion, the structure allows for timely payment of interest and
ultimate payment of principal with respect to the Class A, Class
B and Class C Notes by the legal final maturity. In Moody's
opinion, the structure allows for ultimate payment of interest
and principal with respect to the Class D and Class X Notes by
the legal final maturity. Moody's ratings only address the credit
risk associated with the transaction. Other non-credit risks have
not been addressed, but may have a significant effect on yield to
investors.

Please note that on March 22, 2017, Moody's released a Request
for Comment, in which it has requested market feedback on
potential revisions to its Approach to Assessing Counterparty
Risks in Structured Finance. If the revised Methodology is
implemented as proposed, the credit ratings of the notes issued
by Finsbury Square 2017-2 plc are not expected to be affected.
Please refer to Moody's Request for Comment, titled " Moody's
Proposes Revisions to Its Approach to Assessing Counterparty
Risks in Structured Finance," for further details regarding the
implications of the proposed Methodology revisions on certain
Credit Ratings.

Moody's issues provisional ratings in advance of the final sale
of securities, but these ratings only represent Moody's
preliminary credit opinion. Upon a conclusive review of the
transaction and associated documentation, Moody's will endeavour
to assign definitive ratings to the Notes. A definitive rating
may differ from a provisional rating. Moody's will disseminate
the assignment of any definitive ratings through its Client
Service Desk. Moody's will monitor this transaction on an ongoing
basis. For updated monitoring information, please contact
monitor.rmbs@moodys.com.


KELDA FINANCE: S&P Affirms BB- Long-Term CCR, Outlook Stable
------------------------------------------------------------
S&P Global Ratings said that it affirmed its long-term corporate
credit rating on U.K. water utility financing company Kelda
Finance (No.3) PLC (KF3) at 'BB-'. The outlook is stable.

At the same time, S&P said, "we are affirming our 'BB-' issue
ratings on KF3's guaranteed secured notes. The recovery rating on
the notes remains '3', indicating our expectation of 50%-70%
recovery prospects in the event of a payment default."

The 'BB-' rating on the KF3 reflects the structural subordination
of KF3 to the ring-fenced financing group (RFFG) around U.K.-
based regulated utility Yorkshire Water Services (YWS). KF3
almost entirely depends on upstream distributions from YWS to
service its own debt.

S&P said, "We view YWS as an insulated group from KF3. This is
because YWS has independent directors on its board, there are no
cross-default provisions to entities outside the RFFG, YWS is
prohibited from merging, reorganizing, or changing its
organizational documents, all transactions with entities outside
the RFFG have to be completed on an arm's-length basis, and YWS
creditors have a security interest over the YWS' assets.

"Given KF3's reliance on distributions from YWS, we derive the
rating on KF3 by notching down from YWS' stand-alone credit
profile of 'bbb'." This is because, while YWS benefits from
structural enhancements designed to reduce the risk of nonpayment
of scheduled debt service payments, these, in turn, increase the
risk of default at the KF3 level as cash flow payments from YWS
can be stopped earlier and more easily than for standard
corporate groups.

KF3 exhibits strong stand-alone financial ratios even after the
GBP195 million increase in leverage. Because the additional
leverage improves YWS' headroom under its covenants since the
proceeds have been downstreamed to YWS, potential cash flow
available to Kelda is improving. S&P said, "We therefore continue
to expect KF3's ratio of debt to available cash to remain below
1.5x and the ratio of available cash flow to holding company
interest to stand above 10x through to 2020 (the end of the
current regulatory period, AMP6, set by U.K. water regulator
Ofwat).

"We expect that YWS will continue to distribute sufficient
dividends to KF3, which will cover the scheduled debt service
payments. We note, however, that YWS has reduced the dividend
payments to Kelda pending the cost of capital determination for
the next regulatory period (starting in 2020). This is in order
to preserve financial stability before the new cost of capital is
known and integrated into the business plan."

The rating on KF3 is constrained by the risk of cash flow
interruption. S&P said, "We expect YWS to sustain at least a 10%
decline in EBITDA without breaching its dividend lockup financial
covenants. However, we assess that YWS would breach the covenant
in the hypothetical event of a 20% drop in EBITDA. This is
unlikely to happen, however, given the strong regulatory
framework in place and high predictability of future earnings.

"We believe that KF3's creditors face liquidity risk, despite its
GBP30 million RCF, because the liquidity facility is not
mandatory in nature and the drawdowns from it are limited by the
presence of a clean-down provision that somewhat restricts the
availability of the liquidity facility, in our view.

"In our view, the rating on KF3 is affected by refinancing risk
because of the concentration of debt maturities, well above 20%
in a single year. Despite better-spread maturities following the
new debt issuance (GBP265 million due in 2020, GBP50 million due
in 2024, and GBP145 million due in 2027), we continue to consider
the concentration of maturities to be high.

"The stable outlook on KF3 reflects our opinion that Kelda
Finance Group will continue to receive forecast dividends from
YWS, and that YWS will maintain adequate headroom under its
covenants to avoid dividend lockup. We also anticipate that Kelda
Finance Group will maintain adequate liquidity headroom and its
ratios of debt to available cash flow below 1.5x and available
cash flow to interest above 10x.

"We could take a negative rating action on KF3 if the headroom
under YWS' covenant ratios, particularly the interest coverage
ratios, narrowed, and we no longer viewed liquidity as adequate.
We could also downgrade KF3 if the likelihood of a dividend
lockup at YWS increased, for example, due to operating
difficulties at YWS or adverse regulatory decisions."

Another trigger for a negative rating action on KF3 is a revision
of YWS' business risk profile or a downgrade of YWS, the source
of KF2's income. This is because a downgrade of YWS would
indicate that a dividend lockup was more likely to occur.

Finally, S&P said, "we could take a negative rating action on KF3
if KF2's GBP30 million RCF is no longer available, if a drawdown
is outstanding, if the liquidity headroom narrows, or if KF3
fails to maintain debt to available cash flow below 1.5x and
available cash flow to interest above 10x.

"We view an upgrade as unlikely in the short to medium term, due
to KF3's aggressive financial structure and the potentially
volatile nature of the dividend payments from YWS."


MERGERMARKET MIDCO: S&P Affirms B CCR, Outlook Stable
-----------------------------------------------------
S&P Global Ratings affirmed its 'B' long-term corporate credit
rating on Mergermarket Midco 2 Ltd. The outlook is stable.

S&P said, "At the same time, we assigned our 'B' issue rating to
the proposed GBP50 million revolving credit facility (RCF) and
GBP380 million first-lien term loans. The recovery rating is '3',
indicating our expectation of meaningful recovery prospects (50%-
70%; rounded estimate: 50%) in the event of a payment default.

"We also assigned our 'CCC+' issue rating to the proposed GBP70
million U.S. dollar-equivalent second-lien term loans. The
recovery rating is '6', indicating our expectation of negligible
recovery prospects (0%-10%; rounded estimate: 0%) in the event of
a payment default.

"We also affirmed our 'B' issue rating and '3' recovery rating on
the existing RCF and first-lien term loans. The recovery rating
indicates our expectations of meaningful recovery prospects (50%-
70%; rounded estimate: 60%) in the event of a payment default.
Additionally, we affirmed our 'CCC+' issue rating and '6'
recovery rating on the existing second-lien term loans. The
recovery rating indicates our expectation of negligible recovery
prospects (0%-10%; rounded estimate: 0%) in the event of a
payment default. We will withdraw the issue and recovery ratings
on the existing senior facilities once the refinancing
transaction is completed."

The affirmation follows Mergermarket's announcement that it plans
to refinance its GBP304.3 million U.S. dollar-equivalent senior
secured term loans with GBP450 million new senior secured term
loans. S&P considers that the proposed refinancing transaction
represents BC Partner's first step in exiting Mergermarket since
its initial investment in late 2013. The transaction involves
GBP295.6 million shareholder returns through full redemption on
the company's shareholder instruments and cash dividends--of
which GBP175 million will be replaced by preference shares
injection from new minority shareholder GIC, who will own 30% of
the group's common equity after the transaction.

Following the refinancing, S&P said, "we forecast our adjusted
debt to EBITDA will peak at 11.9x (or 8.6x when excluding
preference shares held by GIC) in 2017. In the absence of further
acquisitions, this could improve to 10.9x (7.6x excluding
preference shares held by GIC) in 2018. Although the high
leverage was partly driven by pound sterling depreciation, we
note that the group's deleveraging prospects could also be
constrained by exceptional costs associated with regular bolt-on
acquisitions that are included in our EBITDA. We view that the
debt amount after refinancing is very high considering reported
EBITDA of about GBP55 million in 2017. However, our affirmation
takes into consideration our forecast of adjusted fund from
operations (FFO) cash interest coverage sustainably above 2.0x,
positive free operating cash flow (FOCF) of about GBP20 million
annually (excluding one-off transaction costs in (2017) and
almost full availability under the group's GBP50 million RCF."

Based in the U.K., Mergermarket is a leading financial services
information provider of merger and acquisition news, credit news,
as well as other information services, such as regulatory and
compliance information. The group is the most well-known for its
two major information platforms, Mergermarket and Debtwire, which
generate 58% of the group's revenue. The subscription-based
business model enjoys a renewal rate in excess of 90%, providing
visibility of revenues and a negative working capital cycle that
is favorable to cash flows as the company expands. In addition,
S&P said, "we view as a weakness Mergermarket's concentration in
the financial services industry -- despite it having achieved a
dominant position in its major products -- and its relative low,
yet improving, EBITDA base on about GBP55 million that we
forecast in 2017. Finally, the group's high fixed-cost base can
leave MergerMarket's profitability very sensitive to significant
drops in prices in case of increasing market competition."

Since financial sponsor owners BC Partners acquired the group
from Pearson at end-2013, Mergermarket has been expanding rapidly
through a series of acquisitions and ongoing integration across
products. Past acquisitions include Perfect Information and Hedge
Fund Law Report in 2014; Asia Venture Capital Journal Business,
Unquote, and C6 Group in 2015; Creditflux in 2016, and TIM Group
in 2017. S&P said, "We view that regular bolt-on acquisitions
have consumed most of the group's reported FOCF, notwithstanding
low capital expenditure (capex).

"The stable outlook reflects our view that Mergermarket will
achieve sound EBITDA growth and strong FOCF generation, supported
by organic growth, ongoing integration of acquired businesses,
and strong renewal rates. Due to higher debt levels after
refinancing, there is no rating headroom for softening
performance or additional debt.

"Due to higher debt after refinancing, we could lower the ratings
in the next 12 months if management's growth plan does not
translate into sufficient profit growth, resulting in our
adjusted debt to EBITDA failing to deleverage over the next 12
months, FFO cash interest declining toward 2x, FOCF turning
negative, or liquidity weakening. Any further debt-funded
acquisition or shareholder returns could also weigh on our
ratings."

Ratings downside could also arise if the financial sponsor owners
increase leverage by adopting a more aggressive financial policy
with respect to growth, investments, or shareholder returns.

S&P said, "We currently consider an upgrade as remote due to very
high leverage and a low EBITDA base relative to other
subscription peers'. However, we could raise the ratings if the
group expands to a more mature level, deleverages on the back of
FOCF generation, resulting in adjusted debt to EBITDA falling
below 5.0x. This includes preference shares held by GIC that we
perceive have very high redemption risk."


TATA STEEL UK: Liberty House Acquires Two Steel Mills
-----------------------------------------------------
Michael Pooler and Chris Tighe at The Financial Times report that
Liberty House, the privately owned metals group, has completed a
hat-trick of transactions this month with the purchase of two
Tata Steel mills in north-east England.

The facilities in Hartlepool employ 140 people and manufacture
heavy-duty pipes for the energy, power and construction
industries worldwide, the FT discloses.

"[The] pipes business has faced difficulties in recent times due
to the downturn in the UK oil and gas sector but we are eager
to begin working with management and staff here to regain former
market share and explore expansion into new areas," the FT quotes
Sanjeev Gupta, the Indian-born businessman who heads Liberty, as
saying.

For Tata, the divestment will complete a restructuring of its
British steel empire, leaving it to concentrate on the rump
business centered around the giant Port Talbot steelworks in
south Wales that feeds several of its smaller plants around
Britain, the FT states.  It will retain ownership of another mill
at Hartlepool that makes tubes, the FT notes.

"The sale is also an important step towards developing a more
sustainable future for the rest of our UK business,"
Bimlendra Jha, chief executive of Tata Steel UK, as cited by the
FT, said.

The Indian group had threatened to quit the UK last year
following financial problems, but later changed tack and is now
pursuing a European steel merger with German rival ThyssenKrupp,
the FT recounts.

The deal is expected to complete within the next few months, the
FT says. Neither company disclosed a value for the transaction,
the FT notes.

Tata Steel is the UK's biggest steel company.


TRAVELEX FINANCING: Moody's Rates EUR360MM Senior Sec. Notes B3
---------------------------------------------------------------
Moody's Investors Service has assigned a definitive B3 (LGD4)
rating to the EUR360 million 8% worth of Senior Secured notes due
2022 issued by Travelex Financing plc, a subsidiary of foreign
currency exchange specialist TP Financing 3 Limited.

All other ratings including the B3 corporate family rating (CFR)
and B3-PD probability of default rating (PDR) of Travelex remain
unchanged. The outlook on all ratings remains negative.

RATINGS RATIONALE

The assignment of the definitive rating follows the completion of
Travelex' notes issuance and Moody's review of the final terms
and conditions. Final terms and conditions are consistent with
the drafts reviewed for the provisional rating assigned on April
24, 2017. Proceeds from the notes have been used to refinance
GBP300 million worth of outstanding notes at Travelex, and pay
related fees and expenses.

In addition, Moody's understands that Travelex completed a full
equitization of the shareholder debt instruments (including
Payment-In-Kind loans, shareholder loans and preference shares)
issued by TP Financing 3 Limited, the top entity of the
restricted group. The remaining shareholder debt instruments are
outside of the restricted group and their maturities have been
extended to 2035, i.e. after the maturity of the notes (2022).

The provisional rating was assigned on April 24, 2017, and
Moody's ratings rationale was set out in a press release
published on the same day.

PRINCIPAL METHODOLOGY

The principal methodology used in this rating was Business and
Consumer Service Industry published in October 2016.

Domiciled in Jersey, TP Financing 3 Limited, a holding company
owner of Travelex, a market leading independent retail foreign
exchange business, with a wide network of stores (more than
1,500) and ATMs (more than 1,100) concentrated in some of the
world's busiest international airports and tourist locations in
30 countries. The company also provides wholesale foreign
exchange currencies to central banks, financial institutions and
travel agents and has partnerships with supermarkets, high street
banks, travel agencies, hotels and casinos as a provider of
outsourced foreign currency services. At year-end 2016, Travelex
reported statutory revenues of GBP699 million and statutory
EBITDA of GBP40.2 million (before exceptional items, as per
statutory accounts).



                            *********

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

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

Each Friday's edition of the TCR includes a review about a book
of interest to troubled company professionals.  All titles are
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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-
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Valerie U. Pascual, Marites O. Claro, Rousel Elaine T. Fernandez,
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Peter A. Chapman, Editors.

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

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