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

                           E U R O P E

           Thursday, August 3, 2017, Vol. 18, No. 153


                            Headlines


A Z E R B A I J A N

AZERBAIJAN: S&P Affirms 'BB+/B' Sovereign Credit Ratings


B E L A R U S

BELARUS: Fitch Affirms B- IDRs, Revises Outlook to Positive


C Y P R U S

CYPRUS: Moody's Ups Long-Term Issuer Rating to Ba3


F R A N C E

KERNEOS HOLDING: Moody's Withdraws B1 Corporate Family Rating
PROMONTORIA MCS: S&P Affirms 'BB-' Counterparty Credit Rating


G E R M A N Y

ORION ENGINEERED: S&P Upgrades CCR to 'BB', Outlook Stable


G R E E C E

FRIGOGLASS: UK High Court Approves Senior Notes Restructuring


I R E L A N D

DARTRY PARK: Moody's Affirms B2(sf) Rating on Class E Notes
DARTRY PARK: Fitch Affirms B- Rating on EUR11.5MM Class E Notes


I T A L Y

ALITALIA SPA: Italy to Give Preference to Bids for Whole Company


K A Z A K H S T A N

EURASIAN RESOURCES: Moody's Hikes CFR to B3, Outlook Stable
HALYK SAVINGS: Moody's Affirms Ba1 Deposit Rating, Outlook Stable


L U X E M B O U R G

ACCUDYNE INDUSTRIES: Moody's Affirms B3 CFR, Outlook Stable


N E T H E R L A N D S

BRIGHT BIDCO: Loan Increase No Impact on Moody's Ba3 Rating
BRIGHT BIDCO: S&P Assigns 'B+' CCR, Outlook Negative


P O L A N D

GREENKO DUTCH: Fitch Rates USD1 Billion Notes Final 'BB-'
PLAY COMMUNICATIONS: Moody's Assigns Ba3 CFR, Outlook Stable


P O R T U G A L

BANCO ESPIRITO: Creditors Lose Bid to Annul Plan Ruling


R U S S I A

ARCELORMITTAL: Fitch Affirms BB+ Long-Term Issuer Default Rating
CB KRYLOVSKY: Put on Provisional Administration, License Revoked
DETSKY MIR: S&P Places 'B+' CCR on CreditWatch Negative
SOVCOMBANK: Moody's Hikes Deposit Ratings to Ba3, Outlook Stable
VNESHECONOMBANK: S&P Affirms 'BB+/B' ICR, Revises Outlook to Pos.


S P A I N

EMPARK APARCAMIENTOS: S&P Affirms 'BB' CCR, Outlook Stable
FONDO UCI 10: S&P Affirms B- (sf) Rating on Class B Notes


S W I T Z E R L A N D

NG GREEN: FINMA Initiates Bankruptcy Proceedings


U N I T E D   K I N G D O M

ASA RESOURCE: Board Appoints Administrators
FINSBURY SQUARE 2017-2: Fitch Assigns CCC Rating to Class D Notes
FINSBURY SQUARE 2017-2: Moody's Assigns B3 Rating to Cl. D Notes
FIRST FLEXIBLE NO.7: S&P Affirms B- (sf) Rating on Class C Notes
GALAXY FINCO: S&P Affirms 'B' Corp Credit Rating, Outlook Stable

OSPREY ACQUISITIONS: Fitch Affirms 'BB' IDR, Outlook Stable


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A Z E R B A I J A N
===================


AZERBAIJAN: S&P Affirms 'BB+/B' Sovereign Credit Ratings
------------------------------------------------------
On July 28, 2017, S&P Global Ratings affirmed its long- and
short-term foreign and local currency sovereign credit ratings on
the Republic of Azerbaijan at 'BB+/B'. The outlook for the long-
term ratings remains negative.

OUTLOOK

The negative outlook primarily reflects the risks of Azerbaijan's
external performance being weaker than in our baseline forecast
over the next six to 12
months.

S&P could lower the ratings if:

-- Balance of payments pressures do not recede, leading, for
    example, to a further decline in central bank reserves or
    accumulated savings in Azerbaijan's Oil Fund (SOFAZ); or
-- The government's fiscal flexibility is reduced, for instance
    because containing spending becomes challenging for political
    reasons.

S&P could revise the outlook to stable if balance of payments
pressures abated while the country's growth prospects and
domestic banking system stability improved.

RATIONALE

S&P's ratings on Azerbaijan are primarily supported by the
sovereign's strong fiscal position, underpinned by the large
stock of foreign assets accumulated in the sovereign wealth fund,
SOFAZ. The ratings are constrained by weak institutional
effectiveness, the narrow and concentrated economic base, and
limited monetary policy flexibility.

Institutional and Economic Profile:

-- Adjustment to lower commodity prices continues but growth is
    set to gradually strengthen.
-- S&P expects Azerbaijan to experience a second year of
    recession with output contracting by 1% in 2017.
-- Economic performance should gradually strengthen thereafter
    but still remain below that of other countries at a similar
    level of economic development.
-- Azerbaijan's institutional arrangements remain weak and S&P
    expects limited progress on the structural reform front over
    the next few years.

This year, Azerbaijan's economy has continued to adjust to lower
commodity prices. More than a year after the devaluation of the
manat, the repercussions are still being felt, not least in
Azerbaijan's weakened financial sector.

S&P said, "We forecast the Azerbaijani economy will remain in
recession in 2017 with output projected to contract by 1% in real
terms, after contracting by just over 3% in 2016, as the
devaluation of the manat and public spending cuts constrained
demand and confidence.

"We project investment will begin to recover this year owing to
the ongoing work on the Southern Gas Corridor project, which is
intended to bring Azeri gas from the offshore Shah Deniz Stage II
gas field (SDII) in the Caspian first to Turkey at the end of
2018 and eventually to Europe by 2020. At the same time, we
anticipate that consumption growth will be lacklustre reflecting
elevated inflation, and the rise in precautionary savings. We
also expect exports to contract this year in real terms owing to
both Azerbaijan's participation in OPEC output cuts and the
natural aging of the country's oilfields. We understand that,
absent sustained investment, oil production will likely decline
gradually over our four-year forecast horizon.

"We expect the economy will turn the corner in 2018 with growth
strengthening further and reaching 3.5% in 2019. The launch of
new gas exports from SDII is the key factor underpinning this
forecast. Additionally, we consider that consumption and non-
hydrocarbon-related investments should post a stronger
performance as confidence improves and inflation subsides.

"Still, even with the launch of the large SDII field, we expect
Azerbaijan's growth to lag that of countries at a similar level
of economic development over the next few years. At present, gas
exports account only for an estimated 2% of total exports. Even
as production is expanded threefold, this is unlikely to bring
back the pre-2008 growth rates that emerged on the back of rapid
expansion of oil output at the time.

"More generally, we believe that at a time of lower and more
volatile oil prices, the economic outlook for heavily commodity-
reliant Azerbaijan will depend on the authorities' reform agenda,
including efforts to improve the business environment and
ultimately diversify the economy away from commodities. At
present, we do not expect significant progress on the structural
reform front.

"We view Azerbaijan's institutional arrangements as weak,
characterized by highly centralized decision-making, which lacks
transparency and makes future policy responses difficult to
predict. Political power remains concentrated around the
President and his administration, with limited checks and
balances in place. The referendum in September 2016, followed by
amendments to Azerbaijan's constitution, has further centralized
the president's power, in our view."

Flexibility and Performance Profile:

-- The balance sheet is strong but balance of payments
    vulnerabilities persist.
-- A strong fiscal position is the main factor supporting the
    ratings.
-- Nevertheless, net debt has risen rapidly reflecting the
    materialization of contingent liabilities at International
    Bank of Azerbaijan (IBA).
-- External position remains strong on a stock basis but
    downside risks persist.
-- Monetary policy effectiveness is limited.

Azerbaijan's strong fiscal position remains the main factor
supporting the sovereign ratings. It is underpinned by the large
foreign assets accumulated in the sovereign wealth fund SOFAZ. We
forecast these will amount to about 80% of GDP at year-end 2017,
and the sovereign will remain in a net asset position averaging
40% of GDP over the four-year forecast horizon.

Even though the sovereign balance sheet is still strong, fiscal
pressures remain elevated. S&P said, "We forecast that the
consolidated budget will post a deficit of 3.2% of GDP in 2017,
following deficits averaging 3% in 2015-2016. This compares to a
decade of average fiscal surpluses of almost 7% of GDP. The
projected deterioration of fiscal performance this year primarily
reflects the one-off transfer from the country's sovereign wealth
fund SOFAZ to the Central Bank of Azerbaijan (CBA), which has
previously spent most of its reserves defending the peg that was
later abandoned. We understand that this transfer is needed to
underpin confidence and arrest the balance of payments crisis of
2015-2016.

"Net of the transfer to CBA, we estimate the consolidated budget
at close to balance. We note the high fiscal flexibility on the
expenditure side reflecting both the high level of capital
spending and the government's willingness to quickly adjust
spending when required. This has prevented the fiscal flow
performance from weakening further over the last two years.
Looking ahead, budgetary outcomes will also be supported by the
weaker exchange rate, launch of gas exports from SDII, and some
recovery in oil prices. The latter should be particularly
important as Azerbaijan's government revenues remain
substantially dependent on the hydrocarbon sector. Still, we
continue to see downside risks to fiscal performance and
flexibility, particularly if keeping expenditures under control
becomes difficult for social or political reasons given the
already sharp adjustment in living standards."

Importantly, however, general government debt has expanded at a
considerably faster pace than the headline deficits imply over
the last two years. This is primarily due to the materialization
of contingent liabilities in the banking system: the government
has contributed substantial resources to the majority state-owned
International Bank of Azerbaijan in 2016. In May 2017, the bank
announced its intention to undertake a debt restructuring to
address its weak financial position (see "Azerbaijan 'BB+/B'
Ratings Affirmed Following Announced IBA Debt Exchange; Outlook
Remains Negative," published May 26, 2017).

On July 18, the proposed exchange was approved by the creditors.
S&P said, "In line with our previous expectations, the government
will therefore assume additional net debt of roughly 9% of GDP in
relation to IBA--6% due to the direct assumption of IBA's foreign
liabilities, and another 3% from SOFAZ's deposit at IBA, which we
now exclude from our calculation of government liquid assets.

"We do not expect IBA's debt exchange to lead to broader
repercussions for other banks. Still, we believe that the
domestic banking system remains weak and vulnerable to difficult
economic conditions. The CBA reports nonperforming loan levels of
close to 12% as of May 2017 but we consider this to be an
underestimate, with the actual amount of toxic assets being
higher.

"Mirroring the developments on the fiscal side, Azerbaijan's
external position remains strong on a stock basis, and we expect
the country's liquid external assets to exceed external debt for
the foreseeable future. Nevertheless, Azerbaijan's net external
asset position (external assets net of external liabilities) is
weakening and could decline to a level insufficient to fully
mitigate the risks from its volatile export revenue base,
constraining the government's ability to respond to potential
adverse shocks in the future.

"e currently project a gradual improvement in external flows,
which should help arrest the decline in accumulated buffers.
However, if that does not happen, ratings pressure could emerge.
This could result from a combination of weaker-than-projected oil
prices and delays in the SDII gas project launch, among other
factors. We also note the only limited available data for
Azerbaijan's balance of payments and international investment
position, which possibly leads to an underestimation of external
risks.

"Our ratings on Azerbaijan remain constrained by the limited
effectiveness of its monetary policy. We believe that the
increased flexibility of the manat exchange rate has helped
lessen external pressures and husband foreign exchange reserves.

"At the same time, apart from setting the country's foreign
exchange regime and undertaking interventions, the CBA's ability
to influence economic developments remains considerably
constrained. We estimate that the resident deposit dollarization
remains at over 60%, which in our view severely limits the CBA's
attempts to influence domestic monetary conditions. In addition,
Azerbaijan's local currency debt capital market remains small and
underdeveloped, while CBA's operational independence remains
limited.

"In accordance with our relevant policies and procedures, the
Rating Committee was composed of analysts that are qualified to
vote in the committee, with sufficient experience to convey the
appropriate level of knowledge and understanding of the
methodology applicable (see 'Related Criteria And Research')." At
the onset of the committee, the chair confirmed that the
information provided to the Rating Committee by the primary
analyst had been distributed in a timely manner and was
sufficient for Committee members to make an informed decision.

After the primary analyst gave opening remarks and explained the
recommendation, the Committee discussed key rating factors and
critical issues in accordance with the relevant criteria.
Qualitative and quantitative risk factors were considered and
discussed, looking at track-record and forecasts.

The committee agreed that all key rating factors were unchanged.

The chair ensured every voting member was given the opportunity
to articulate his/her opinion. The chair or designee reviewed the
draft report to ensure consistency with the Committee decision.
The views and the decision of the rating committee are summarized
in the above rationale and outlook. The weighting of all rating
factors is described in the methodology used in this rating
action (see 'Related Criteria And Research').

RATINGS LIST

                                         Rating
                                 To                From
  Azerbaijan (Republic of)
   Sovereign Credit Rating
    Foreign and Local Currency   BB+/Negative/B    BB+/Negative/B
Transfer & Convertibility
    Assessment                   BB+               BB+


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B E L A R U S
=============


BELARUS: Fitch Affirms B- IDRs, Revises Outlook to Positive
-----------------------------------------------------------
Fitch Ratings has revised the Outlook on Belarus's Long-Term
Foreign- and Local-Currency Issuer Default Ratings (IDRs) to
Positive from Stable and affirmed the IDRs at 'B-'. The issue
ratings on Belarus's senior unsecured foreign-currency bonds have
also been affirmed at 'B-'. The Country Ceiling has been affirmed
at 'B-' and the Short-Term Foreign- and Local-Currency IDRs at
'B'.

KEY RATING DRIVERS

The revision of the Outlook on the Long-Term IDRs to Positive
reflects the following key rating drivers and their relative
weights:

MEDIUM

Improved access to external financing and increased international
reserves have reduced financing risks for 2017 and 2018. Gross
international reserves have increased by USD1.7 billion to USD6.6
billion in 1H17 boosted by external disbursements and FX
purchases from residents. The net reserve position improved and
remains slightly positive. However, Fitch estimates that liquid
assets as a share of short-term liabilities (at 49% in 2018)
remains the lowest in the 'B' category.

Belarus's gross external financing requirement (current account
deficit plus medium- and long-term amortisations) has declined
significantly from previous peaks (223% in 2014) but remains high
at 141% of international reserves. Fitch expects net external
debt (47% of GDP) and external debt service (21% of CXR) are to
stabilise over the forecast period, although they are more than
double their respective 'B' medians.

The resolution of the gas price dispute with Russia and the
resumption of disbursements by the Eurasian Fund for Social
Development (EFSD) have paved the way for Belarus to return to
international capital markets. The EFSD released two tranches (in
April and June) totalling USD600 million, and Belarus issued
USD1.4 billion in Eurobonds in June, securing the funds to repay
the January 2018 USD800 million Eurobond maturity.

In addition, the government expects three additional
disbursements from the EFSD by the end of 2018 totalling USD600
million, a USD700 million 10-year loan agreed with Russia for
refinancing purposes and USD1.6 billion non-debt foreign currency
revenues to meet USD3.4 billion in 2018 foreign currency debt
service. Discussions with the IMF regarding a potential programme
have not made substantial progress on key points of contention
due to their political sensitivity: SOE and utilities reform.
Fitch does not factor IMF disbursements into its forecasts.

Belarus has improved the consistency and sustainability of its
policy framework. Better coordination between monetary and fiscal
policy, an improved focus on price stability, increased exchange
rate flexibility and an effort to reduce distortionary policies
(such as programme lending) have delivered signs of improving a
historically weak macroeconomic performance and balance of
payments position. Inflation fell further in 1H17, averaging 6.9%
(6.5% in June on an annual basis). Monetary authorities could
meet their objective of bringing inflation below 9% in 2017,
depending on the pace of administered price adjustments,
volatility of food prices, and the success of keeping inflation
and expectations under control in the event of exchange rate
volatility.

The central bank maintains a tight policy stance and is working
on a strategy to reduce inflation to 5% and move toward a full-
fledged inflation targeting regime by 2020. The disinflation
process is likely to be gradual and improving the effectiveness
of monetary policy is dependent upon reducing programme lending
and financial dollarisation (71% of deposits).

The ratings also reflect the following key rating drivers:

Belarus's ratings balance high external vulnerabilities and a
track record of frequent crises with relatively strong public
finances, a clean debt repayment record and structural
indicators, notably, GDP per capita and human development, well
above peers.

The current account deficit is forecast at 3.2% of GDP in
2017(down from 3.6% in 2016 and below the 5.6% B median) and to
average 3.8% in 2018-19, reflecting the improved external demand
outlook and the resolution of the oil/gas dispute with Russia.
Exports recorded strong growth in the first part of the year and
could continue to benefit from the improving growth outlook for
Russia, the CIS and Europe. Import recovery, on the other hand,
will be contained by the lagging pace of domestic demand.

Fitch expects the economy to grow by 0.5% in 2017 (in contrast to
its previous forecast of -1% in February) and gain moderate
traction in 2018-19 expanding by 1.3% and 1.8%, respectively. The
cyclical recovery is being driven by improving external demand in
Russia and other key trade partners. Achieving sustained growth
in the absence of progress in the reform agenda is likely to be
challenging.

Fitch expects fiscal policy to remain conservative and focused on
generating surpluses for debt repayment purposes. Fitch forecasts
a surplus of 0.7% of GDP in 2017 for the consolidated budget,
(compared with the budget target of 1.4%) due to the still weak
performance of the economy and expenditure pressures derived from
the social impact of the economic crisis. These factors could
further erode the budget surplus in 2018-2019. Fitch forecasts
Belarus will run a general government deficit of -1.8% of GDP in
2017, reflecting potential materialisation of guarantees and
costs related to banking sector capitalisation and asset clean-up
process. However, the financial sector clean-up process could
require additional resources over the medium term.

Government debt equalled 52.5% of GDP in 2016, but will likely
approach the 'B median of 56% in 2017. Fitch includes government
guarantees, totalling 10.5% of GDP, in its total debt
calculations, due to the high likelihood that the government will
need to meet state-owned enterprises' repayment obligations.
Belarus's debt is highly exposed to currency volatility (89% is
foreign currency-denominated), and interest rate risk (50%
floating rate).

Regulatory NPLs (the three riskiest categories) stood at 13.6% of
gross credit exposure at the beginning of June. Authorities have
established the SC Assets Management Agency to address bad assets
from the banking sector. Capitalisation levels have improved, but
remain modest given high credit risks. The large presence of the
public sector (65% of assets) creates fiscal risks for the
sovereign due the potential need of further capital injections,
execution of guarantees and issuance of securities in exchange of
loan transfers.

Belarus scores lower than the 'B' median in the World Bank
Governance Indicators. Political power is concentrated in the
hands of President Lukashenko who has been in power since 1994.
The opposition is weak, and Fitch assumes that Lukashenko will
remain in power over the medium term. The resolution of the gas
price dispute reduces near-term uncertainty, as Russia remains a
key partner for Belarus from a trade, financing and political
perspectives.

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

Fitch's proprietary SRM assigns Belarus a score equivalent to a
rating of 'B+' on the Long-Term FC IDR scale.
Fitch's sovereign rating committee adjusted the output from the
SRM to arrive at the final LTFC IDR by applying its QO, relative
to rated peers:

- Macro: -1 notch, to reflect a history of weak economic policy
   management leading to frequent crises. Improved policy
   consistency could bring macroeconomic performance closer to
   peers, but growth prospects remain weak.

- External finances: -1 notch, to reflect a very high gross
   external financing requirement, low net international
   reserves, and reliance on often ad hoc external financial
   support, which is vulnerable to changes in relations with
   Russia, to meet external debt obligations. Belarus's net
   external debt/GDP is high.

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

RATING SENSITIVITIES

The following risk factors could, individually or collectively,
trigger positive rating action:
- Enhanced confidence in continued access to external financing
   and diversification in its sources, supported by a recovery in
   international reserves.
- Sustained consistency of the policy framework resulting in
   improved macroeconomic stability
- An improvement in Belarus's medium-term growth potential, for
   example stemming from implementation of structural reform
   agenda.

As the Outlook is Positive, Fitch does not anticipate
developments with a high likelihood of triggering a downgrade.
However, the following factors, individually or collectively,
could result in negative rating action:
- Materialisation of severe external financing stresses and
   increased risk of failure to meet foreign currency debt
   repayment obligations.
- Deterioration in public finances resulting in a significant
   rise in government debt.

KEY ASSUMPTIONS

Fitch's assumes that Belarus will receive ad-hoc financial
support from Russia.


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C Y P R U S
===========


CYPRUS: Moody's Ups Long-Term Issuer Rating to Ba3
--------------------------------------------------
Moody's Investors Service has upgraded the long-term issuer
rating of Cyprus, Government of as well as all senior unsecured
bond and programme ratings to Ba3 and (P)Ba3 from B1 and (P)B1,
respectively. The outlook has been maintained at positive.

The short-term ratings have been affirmed, at Not Prime (NP) and
(P)NP.

The key drivers for the rating action are:

1. Improvements in economic resilience that have occurred over
the past two years and that seem likely to continue in the medium
term.

2. The consistent fiscal outperformance and continuing favourable
fiscal outlook for Cyprus.

The decision to maintain a positive outlook on the rating of
Cyprus reflects Moody's view that improvements in economic
resilience and continuing fiscal outperformance are likely to be
sustained, with a reduction in the debt-to-GDP ratio as well as a
fall in the stock of non-performing loans held by the banks.

The long-term country ceilings for foreign-currency and local-
currency bonds have been raised to A3 from Baa1, to reflect
continuing improvements in economic resilience and fiscal
outperformance, and the long-term ceiling for foreign-currency
and local-currency deposits has been raised to A3 from Baa1.
Moody's maintains a six-notch gap between the government bond
rating and the bond and deposit ceilings. The short-term foreign-
currency bond and bank deposit ceilings remain unchanged at P-2.

RATINGS RATIONALE

RATIONALE FOR THE UPGRADE OF THE RATING TO Ba3

In November 2016, Moody's assigned a positive outlook to the B1
government bond ratings of Cyprus. The change in outlook
reflected the rising prospect that sustained improvements in
economic resilience and fiscal reforms would bring about a
reversal in: (i) the government debt burden; and (ii) the level
of non-performing loans in the banking system. The upgrade
reflects Moody's conclusion that the awaited reversal is indeed
occurring. The decision to maintain a positive outlook reflects
Moody's view that, whilst the Cypriot government continues to
face fiscal, financial and economic challenges, current trends
will, if sustained, further address those two key constraints on
its credit profile.

FIRST DRIVER -- IMPROVEMENTS IN ECONOMIC RESILIENCE THAT HAVE
OCCURRED OVER THE PAST TWO YEARS AND THAT LOOK LIKELY TO CONTINUE
IN THE MEDIUM TERM.

Following three years of severe economic contraction, the Cypriot
economy returned to growth in 2015, expanding by 1.7% followed by
an acceleration of 2.8% in 2016 in real terms. Moody's expects
this momentum to be sustained over the medium term, driven in
particular by private consumption supported by favourable
developments in the tourist sector and labour market.

The tourist industry, which accounts for around 13.2% of gross
value added, recorded another high of almost 3.2 million arrivals
in 2016, from around 2.7 million in 2015, with roughly a 50%
year-on-year increase in arrivals from Russia (Ba1 stable) and
Israel (A1 stable). Revenues from tourism also reached new highs
at around EUR2.4 billion in 2016, from EUR2.1 billion in 2015.
Tourist activity has begun strongly in 2017, and Moody's expects
tourism to remain one of the main growth drivers for the Cypriot
economy. Whilst the sector has benefited from ongoing
geopolitical tensions in competing destinations such as North
Africa and Turkey (Ba1 negative), the industry retains several
comparative advantages, including significant geographical
diversification in tourist arrivals, which provide a buffer
against negative external macroeconomic shocks elsewhere.

Improving economic prospects are also reflected in the labour
market. The Cypriot labour market demonstrated flexibility in
terms of wage adjustment during the downturn, a factor that has
helped to accelerate the recovery in employment and has
strengthened external competitiveness. Whilst unemployment
remained elevated at 11% as of May 2017, it had fallen from a
peak of 16.8% in January 2015, according to seasonally adjusted
data from Eurostat. The employment rate increased to 63.3% in the
first quarter of 2017, one of the highest since 2012, with job
gains mainly in the accommodation, food service, wholesale and
retail trade sectors.

Moody's also expects investment growth across the wider economy
to recover gradually, in spite of constraints upon domestic
credit growth resulting from the large number of non-performing
loans in the banking system and the high corporate debt burden.
Investment will be supported by access to European Structural and
Investment Funds (ESIF): according to the European Commission,
Cyprus was allocated EUR874 million for 2014-2020 (equivalent to
around 0.9% of GDP annually) targeted at SME competitiveness,
transport, energy and infrastructure. Investment will be
strengthened by growth-enhancing reforms intended to improve the
competitiveness of the economy in order to attract foreign
private sector investment. The government also intends to promote
a number of large investment projects which are expected to
attract significant foreign direct investment (FDI).

Looking ahead, Moody's expects a deceleration in private
consumption and therefore in real GDP growth, to 2.7% in 2017 and
2.5% in 2018, as a result of increased household loan repayment,
the recovery in oil prices and increasing inflation.
Nevertheless, private consumption and investment should remain
the main growth drivers against the backdrop of further falls in
the unemployment rate.

SECOND DRIVER -- THE CONSISTENT FISCAL OUTPERFORMANCE AND
CONTINUING FAVOURABLE FISCAL OUTLOOK FOR CYPRUS.

Cyprus left the three-year economic adjustment programme, begun
in May 2013 with the European Stability Mechanism (ESM) and the
International Monetary Fund (IMF), two months before it was
scheduled to end, having drawn only EUR7.3 billion of the EUR10
billion available under the programme. In June 2016, the European
Council closed the excessive deficit procedure for Cyprus, which
had been in operation since July 2010.

Cyprus has continued to outperform fiscal targets. The primary
surplus rose to 3.0% of GDP in 2016, and the fiscal surplus rose
to 0.4% of GDP, resulting in a structural fiscal adjustment of
5.2 percentage points of GDP between 2012 and 2016, according to
EC estimates.

Looking ahead, the 2017-2019 Medium Term Fiscal Plan of the
government assumes a broadly neutral fiscal stance. Whilst the
2017 budget targets a slightly reduced surplus of 0.2% of GDP,
medium-term projections see the surplus rising again in 2018, to
0.4% of GDP, and being maintained at that level in 2019. The
authorities project that the primary balance will remain in
surplus over the medium term, at 2.9% in 2018 and 3.0% in 2019.

Moody's projects a headline deficit of just 0.4% of GDP this year
and a primary surplus of around 2.1% of GDP in 2018, lower than
the projections of the government but still supportive of further
debt reduction. As a result, the debt burden of the government,
whilst high, is expected to decline from a debt-to-GDP ratio of
108% in 2016, to around 95% of GDP by 2020.

Moreover, debt remains affordable, with interest charges
absorbing just 6.6% of general government revenue in 2016, from a
peak of 9.2% in 2013. This may fall further over the next two
years. The improvement reflects both the benign interest rate
environment and the very large share of official sector creditors
in the total debt stock (63% as of the third quarter of 2016).

The withdrawal of Cyprus from the ESM/IMF programme increases the
potential for upward pressure upon its borrowing costs. However,
the prevailing low interest rate environment and the liquidity
buffer that covers debt repayment for the next year mitigate
liquidity risks. Moreover, Moody's expects fiscal discipline to
be sustained in spite of the end of the programme, which should
support investor confidence.

RATIONALE FOR MAINTAINING A POSITIVE OUTLOOK

The positive outlook reflects Moody's view that improvements in
economic resilience and fiscal strength are likely to be
sustained. The very high level of public and private debt, as
well as the fragile state of the banking system, which remains
very large and concentrated relative to the size of the economy,
constrain the sovereign rating at the lower end of the Ba range.

However, the policy commitment shown to fiscal reform in recent
years, the growing health of the economy, and the steps being
taken to encourage the largest banks to restructure and resolve
problem loans, will, if sustained, lead to a reduction in this
constraint. The next 12 to 18 months will offer insight into
whether this will occur.

WHAT COULD CHANGE THE RATING UP

The government bond ratings of Cyprus would be upgraded were
Moody's to conclude that a combination of government policy and
sustained investor and consumer optimism was very likely to
result, over time, in a sustained and marked fall in the debt-to-
GDP ratio of Cyprus and in the stock of bank non-performing
loans. The expectation that growth would be sustained at current
levels over the coming years would also be credit positive.

WHAT COULD CHANGE THE RATING DOWN

Downward pressure upon the government bond ratings of Cyprus
might emerge if Moody's were to conclude that the government
commitment to restoring macro-financial stability had weakened,
particularly in the context of a lower growth environment.
Evidence that the banking sector needed further recapitalisation
would also exert downward pressure upon the rating.

A re-emergence of elevated financial and debt market stress, that
might be triggered in the case of a country leaving the euro
area, for example, would also be credit negative.

GDP per capita (PPP basis, US$): 34,970 (2016 Actual) (also known
as Per Capita Income)

Real GDP growth (% change): 2.8% (2016 Actual) (also known as GDP
Growth)

Inflation Rate (CPI, % change Dec/Dec): 0% (2016 Actual)

Gen. Gov. Financial Balance/GDP: 0.4% (2016 Actual) (also known
as Fiscal Balance)

Current Account Balance/GDP: -5.3% (2016 Actual) (also known as
External Balance)

External debt/GDP: [not available]

Level of economic development: Moderate level of economic
resilience

Default history: At least one default event (on bonds and/or
loans) has been recorded since 1983.

On July 26, 2017, a rating committee was called to discuss the
rating of Cyprus, Government of. The main points raised during
the discussion were: The issuer's economic fundamentals,
including its economic strength, have materially increased. The
issuer's institutional strength/framework, have materially
increased. The issuer's fiscal or financial strength, including
its debt profile, has not materially changed. The issuer's
susceptibility to event risks has not materially changed.

LIST OF AFFECTED RATINGS

Upgrades:

Issuer: Cyprus, Government of

-- LT Issuer Rating, Upgraded to Ba3 from B1

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

-- Senior Unsecured Regular Bond/Debenture, Upgraded to Ba3 from
    B1

Affirmations:

Issuer: Cyprus, Government of

-- Commercial Paper (Local Currency), Affirmed NP

-- Other Short Term, Affirmed (P)NP

Outlook Actions:

Issuer: Cyprus, Government of

-- Outlook, Remains Positive

The principal methodology used in these ratings was Sovereign
Bond Ratings published in December 2016.

The weighting of all rating factors is described in the
methodology used in this credit rating action, if applicable.


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


KERNEOS HOLDING: Moody's Withdraws B1 Corporate Family Rating
-------------------------------------------------------------
Moody's Investors Service has withdrawn the B1 corporate family
rating and the B1-PD probability of default rating of France-
based calcium aluminate cements (CAC) manufacturer Kerneos
Holding Group SAS, following the announcement by Imerys S.A.
("Imerys", Baa2 stable) that it has completed the acquisition of
Kerneos for an enterprise value of EUR880 million. The rating
action follows the repayment of Kerneos' rated debts.

RATINGS RATIONALE

This rating action concludes the review for upgrade process,
initiated on December 13, 2016, after all necessary requirements
have been obtained for the transaction to become effective.
Kerneos has been consolidated in Imerys' accounts from 18 July
2017 onwards. Please refer to the Moody's Investors Service
Policy for Withdrawal of Credit Ratings, available on its
website, www.moodys.com.

Kerneos is the world's leading producer of CAC and provides
performance binders to monolithic refractory manufacturers
(primarily for the steel, glass and cement industries) and dry-
mix mortar producers. The group generated revenues of EUR417
million and reported EBITDA of EUR99 million in 2016.


PROMONTORIA MCS: S&P Affirms 'BB-' Counterparty Credit Rating
-------------------------------------------------------------
S&P Global Ratings affirmed its 'BB-' long-term counterparty
credit rating on French distressed debt purchaser Promontoria
MCS. The outlook is stable.

S&P said, "We also affirmed our 'BB-' issue rating on its senior
secured debt. The recovery rating is '3', indicating our
expectation of meaningful recovery (50%-70%; rounded estimate
55%) in the event of a payment default.

"The affirmation reflects our view that MCS' debt serviceability
will gradually improve through 2018, after having temporarily
deteriorated after the September 2016 EUR200 million bond
issuance. Since 2014, MCS has been 65% owned by private equity
fund Cerberus -- the rest being owned by MCS' management. Even
though such financial sponsors often tend to have a high appetite
for increasing leverage, which is a ratings weakness, we
understand from management that reducing debt metrics ranks high
in MCS' agenda, essentially via the dynamic development of cash
flows. While the company already enjoys a dominant position in
the debt purchasing market in France, MCS continues to develop
new partnerships, in particular in the asset-servicing business,
to improve cash flow generation and reduce earnings reliance on
loan purchasing. MCS has more than 30 years of expertise in these
markets and a proven track record over the cycle."

MCS is ultimately owned by France-based Promontoria MCS Holding.
S&P said, "We use the consolidated group accounts, at the level
of Promontoria MCS Holding, to derive our credit ratios and to
ensure we capture in our analysis any future leverage at the
holding-company level. MCS forms the backbone of the Promontoria
group. Other assets, although increasing, are indeed still small
in terms of size. We understand that on July 25, 2017, Louvre
Bidco, an unrated French company controlled by funds advised by
another private equity firm BC Partners, signed a put option
agreement for the acquisition of all the shares of Promontoria
MCS Holding owned by Cerberus and MCS' management. We will
monitor over time how ownership evolves and if it results in
changes to the company's strategy and financial policies.

"We assess MCS' business risk profile as fair. This assessment is
weaker than the intermediate one ascribed to pan-European leader
Intrum Justitia AB (publ), but stronger than our weak assessments
of certain U.K. peers, such as Cabot Financial Ltd. or Arrow
Global Group PLC."

This view balances MCS' focus on the expanding, but narrow,
distressed unsecured consumer debt purchase market in France
against its dominant market position there. Although it operates
in two segments, MCS' revenues are still highly concentrated. It
derives close to 90% of its revenues from asset purchasing while
the rest comes from asset servicing, a fast-developing business
with strong annuity characteristics, which could represent 25% of
revenues in 2019. This will add earnings diversity over time. MCS
focuses on two claims categories, performing and nonperforming.
However, 83% of its revenues come from nonperforming claims.
Revenues are also concentrated almost predominantly in France.
S&P said, "MCS enjoys an approximately 28% market share, which we
view as stable. The figure climbs to 38% if we subtract consumer
finance, which is out of scope of MCS' activity. MCS is the
market leader in France and the only large debt purchaser in the
higher-end claims tranche because most of its smaller competitors
focus on claims below EUR10,000.

S&P believes that MCS benefits from sustainable competitive
advantages stemming from high barriers to entry, namely:

-- The absence of credit bureau data, which protects incumbents
    such as MCS from new players and makes MCS' data generation
    on French debtors over 30 years a distinctive competitive
    asset.
-- The focus on large claims, which implies a strong and legally
    trained workforce.
-- MCS' brand and franchise reflects almost 30 years of
    cooperation with most French banks, which are MCS' clients.

S&P said, "We continue to view MCS' profitability trend as
robust, with EBITDA adjusted for depreciation of its purchased
debt portfolio increasing to about EUR80 million in 2019 from
about EUR56 million in 2016. The main driver behind increased
EBITDA will be the volume and quality of the portfolios acquired,
as well as the track record on the return on the debt portfolio,
which we estimate to be in the double digits. As for the industry
as a whole, we also foresee stable and robust EBITDA margins for
MCS, at about 80%.

"Due to the fact that debt collection is not as heavily regulated
in France, in contrast with the U.K. or other European markets,
we factor into our ratings a neutral assessment of regulatory
supervision. French debt purchasers typically bear lower
compliance costs, and the risk of conduct-related fines is lower.

"We view MCS' financial risk profile as significant, but in the
lower-end of our category. It reflects the company's leverage and
debt-service metrics. We expect these metrics will improve from
2017, after the EUR200 million bond issuance in September 2016,
which weakened debt metrics.  We apply a one-notch negative
adjustment based on comparisons with peers like U.K.-based Cabot
Financial Ltd. (B+/Stable/--), Garfunkelux Holdco 2 S.A.
(B+/Negative/B), or Arrow Global PLC (BB-/Stable/--). We see
those peers' creditworthiness as comparable to that of MCS,
although MCS has a slightly stronger business risk profile linked
to lower regulatory risks on the French market. However, the
abovementioned peers have, in contrast with MCS, larger scale and
earnings diversity. We also note MCS' financial ratios are in the
lower end in the significant category. Even if we expect them to
improve, we remain prudent about the influence of the private
equity owner and the always possible risks of higher recourse to
debt leverage.

"The stable outlook on MCS reflects our view that the company
will continue to have a moderate appetite for further leverage
and that its debt-service metrics will improve in 2017 and 2018
from 2016, when they peaked due to the EUR200 million bond
issuance. It also reflects our opinion that although MCS may
continue to consolidate its already strong position in the French
market and further expand its servicing business, ratings upside
will remain constrained by its concentrated revenue profile.

"We could lower the ratings if we saw a material increase in
shareholders' leverage tolerance, with a three-year weighted-
average gross debt-to-adjusted EBITDA ratio above 4x, a failure
in MCS' risk control framework, or adverse changes in the French
regulatory environment for debt purchasers that lead to negative
changes in its business model or an erosion in its high-margin
earnings. We believe room to absorb further debt leverage at the
current rating level is limited.

"We consider an upgrade unlikely within the next year, even if
our central scenario assumes dynamic development. We could raise
our ratings on MCS if the company appears set to sustainably
lower its debt metrics, with gross debt to EBITDA below 3x and
EBITDA interest coverage above 6x, a scenario we see as unlikely.
In the longer term, we could also raise the ratings if we saw
greater diversification in the franchise supporting the future
stability of cash flows, for instance with a material increase in
fee income generated in collection services for third parties."


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


ORION ENGINEERED: S&P Upgrades CCR to 'BB', Outlook Stable
----------------------------------------------------------
S&P Global Ratings raised its long-term corporate credit rating
on Germany-based Orion Engineered Carbons SA to 'BB' from 'BB-'.
The outlook is stable.

S&P said, "We also raised our issue ratings on Orion's EUR665
million senior secured term loan due 2021 and the EUR175 million
revolving credit facility (RCF) due 2021 to 'BB' from 'BB-'. The
'3' recovery rating on these instruments indicates our
expectation of recovery in the 50%-70% range (60% rounded
estimate).

"The rating action reflects Orion's continued robust operating
performance despite volatile oil prices, which supports our
assessment of its business risk profile as fair. It also reflects
the company's track record of consistently using its positive
free cash flows to repay debts, and successful debt repricing in
recent periods. Additionally, the upgrade reflects our
expectation that private equity owners will continue to
progressively reduce their stakes in Orion, as reflected with the
sale of 5.75 million shares in March 2017 and an additional 10
million in July 2017, with the option of an additional 1.5
million sale. We therefore estimate the risk of releveraging as
relatively limited and declining subsequently with the reduction
in private equity ownership, now standing at about 38%, although
this level continues to cap the company's financial risk profile
at significant, in our view.

"We estimate the company will generate S&P Global Ratings-
adjusted EBITDA of about EUR215 million, after restructuring, in
2017. This factors in strong operational performance at the
company's two business segments, building a track record of
superior resilience to volatile oil prices. We understand the
company benefits from well-set-up pass-through mechanisms in the
commoditized rubber segment, with limited pass-through time lag,
and significant pricing power in the expanding specialty segment
where the company has largely dominant market shares. We believe
this should help to mitigate the impact of potential rising oil
prices on margins.

"With limited capital expenditures (capex) requirements in our
view, the business continues to generate material free cash flow,
covering amply its EUR10 million per quarter dividend policy.
Excess cash flows have allowed the company to pay down EUR110
million of debt in the form of voluntary repayments between
December 2015 and January 2017, which we see as a clear credit
positive. In September 2016 and May 2017, the company also
repriced its debts resulting in estimated annual interest cost
savings of about EUR11 million, which should benefit on funds
from operations (FFO) and free cash flows from 2017.

"The company's controlling ownership by financial sponsors Rhone
and Triton continues to cap our financial risk profile assessment
at significant, reflecting potentially more aggressive or
unpredictable financial policies. Nevertheless, we take into
account that the risk of releveraging has reduced significantly
since the company's listing, supported by a clear track record of
debt repayments and publicly stated leverage targets. We consider
that the recent sale of shares by the private equity owners in
March and July 2017 reflects their strategy and commitment to
progressively continue exiting their investment in Orion.

"The stable outlook reflects that Orion should continue to show a
fair degree of operating resilience, supported by pass-through
clauses, and pricing power. We also expect the company's EBITDA
to benefit from moderate market growth and internal efficiency
gains, while limiting the impact of restructuring costs. Together
with prudent capital spending, we believe these should result in
comfortably positive free cash flows in the coming years, and
adjusted debt to EBITDA of about 3.0x."

Rating upside is limited at this stage by the controlling private
equity ownership. Reduction in their stakes, together with
supportive deleveraging prospects, continued positive free cash
flows, and further voluntary debt repayments, could provide
upside to the rating.

A deterioration in credit metrics such that adjusted debt to
EBITDA would exceed 3.5x would likely put pressure on the rating.
This could arise from unforeseen market deterioration, lost
contracts, or an unexpected drawback from oil price volatility.
S&P could also lower the rating due to higher-than-expected
working capital requirements, capex impairing free cash flows,
increased dividends, or a large debt-funded acquisition.


===========
G R E E C E
===========


FRIGOGLASS: UK High Court Approves Senior Notes Restructuring
-------------------------------------------------------------
Max Bower at Global Capital reports that Frigoglass has received
approval from the UK High Court for the proposed restructuring of
its EUR250 million of senior notes due in 2018.

Frigoglass sought approval for the restructuring through a UK
scheme of arrangement, which required the consent of at least 75%
of the noteholders by value and 50% by number, Global Capital
relates.

The firm launched the solicitation in early May, based on
agreement announced on April 13, Global Capital discloses.

Frigoglass is a Greek refrigerator maker.

                          *     *     *

As reported by the Troubled Company Reporter-Europe on March 23,
2017, S&P Global Ratings said that it lowered its corporate
credit rating on Greek ice-cold merchandiser Frigoglass to 'CC'
from 'CCC+'.  S&P said the outlook is negative.  At the same
time, S&P lowered the issue rating on the EUR250 million senior
unsecured notes issued by group financing vehicle Frigoglass
Finance B.V. from 'CCC+' to 'CC'.  On March 20, 2017, Frigoglass
announced its intention, as part of a broad capital
restructuring, to offer noteholders the option to exchange their
senior notes with new first-lien notes.  The remainder of the
existing notes would be exchanged for 50% of new second-lien
notes and 50% of company shares.  S&P views this intention to
undertake an exchange offer as distressed because Frigoglass
would not meet its financial obligations under the terms of the
existing senior notes.


=============
I R E L A N D
=============


DARTRY PARK: Moody's Affirms B2(sf) Rating on Class E Notes
-----------------------------------------------------------
Moody's Investors Service has assigned the following definitive
ratings to six classes of notes issued by Dartry Park CLO
Designated Activity Company:

-- EUR238,000,000 Refinancing Class A-1A Senior Secured Floating
    Rate Notes due 2029, Definitive Rating Assigned Aaa (sf)

-- EUR5,000,000 Refinancing Class A-1B Senior Secured Fixed Rate
    Notes due 2029, Definitive Rating Assigned Aaa (sf)

-- EUR30,000,000 Refinancing Class A-2A Senior Secured Floating
    Rate Notes due 2029, Definitive Rating Assigned Aa2 (sf)

-- EUR12,000,000 Refinancing Class A-2B Senior Secured Fixed
    Rate Notes due 2029, Definitive Rating Assigned Aa2 (sf)

-- EUR24,000,000 Refinancing Class B Senior Secured Deferrable
    Floating Rate Notes due 2029, Definitive Rating Assigned A2
    (sf)

-- EUR21,500,000 Refinancing Class C Senior Secured Deferrable
    Floating Rate Notes due 2029, Definitive Rating Assigned Baa2
    (sf)

Additionally, Moody's also affirmed the ratings on the existing
following notes issued by the Issuer on the original issuance
date (the "Original Closing Date"):

-- EUR24,500,000 Class D Senior Secured Deferrable Floating Rate
    Notes due 2029, Affirmed Ba2 (sf); previously on Mar 16, 2015
    Definitive Rating Assigned Ba2 (sf)

-- EUR11,500,000 Class E Senior Secured Deferrable Floating Rate
    Notes due 2029, Affirmed B2 (sf); previously on Mar 16, 2015
    Definitive Rating Assigned B2 (sf)

RATINGS RATIONALE

Moody's definitive rating of the rated notes addresses the
expected loss posed to noteholders by the legal final maturity of
the notes in 2029. The ratings reflect the risks due to defaults
on the underlying portfolio of loans given the characteristics
and eligibility criteria of the constituent assets, the relevant
portfolio tests and covenants as well as the transaction's
capital and legal structure. Furthermore, Moody's is of the
opinion that the collateral manager, Blackstone / GSO Debt Funds
Management Europe Limited ("Blackstone/GSO"), has sufficient
experience and operational capacity and is capable of managing
this CLO.

The Issuer has issued the Refinancing Class A-1A Notes, the
Refinancing Class A-1B Notes, the Refinancing Class A-2A Notes,
the Refinancing Class A-2B Notes, the Refinancing Class B Notes
and the Refinancing Class C Notes (the "Refinancing Notes") in
connection with the refinancing of the Class A-1A Senior Secured
Floating Rate Notes due 2029, the Class A-1B Senior Secured Fixed
Rate Notes due 2029, the Class A-2A Senior Secured Floating Rate
Notes due 2029, the Class A-2B Senior Secured Fixed Rate Notes
due 2029, the Class B Senior Secured Deferrable Floating Rate
Notes due 2029 and the Class C Senior Secured Deferrable Floating
Rate Notes due 2029 ("the Original Notes") respectively,
previously issued on March 16, 2015 (the "Original Closing
Date"). The Issuer will use the proceeds from the issuance of the
Refinancing Notes to redeem in full the Original Notes that will
be refinanced. On the Original Closing Date, the Issuer also
issued two classes of rated notes and one class of subordinated
notes, which will remain outstanding.

Other than the changes to the spreads and coupon of the notes,
the main material change to the terms and conditions will involve
increasing the Weighted Average Life Test by approximately 15
months to a total of 7 years from the refinancing date. The
length of the reinvestment period will remain unchanged and will
expire on April 28, 2019. Furthermore, the manager will be able
to choose from a new set of collateral quality test covenants
(the "Matrix") and related modifiers. No other material
modifications to the CLO are occurring in connection to the
refinancing.

Moody's rating actions on the Class D Notes and Class E Notes are
primarily a result of the amendments to the transaction documents
and the issuance of the Refinancing Notes.

Dartry Park is a managed cash flow CLO. The issued notes will be
collateralized primarily by broadly syndicated first lien senior
secured corporate loans. At least 90% of the portfolio must
consist of senior secured loans or senior secured bonds and up to
10% of the portfolio may consist of unsecured senior loans,
second lien loans, mezzanine obligations, high yield bonds and/or
first lien last out loans. The underlying portfolio is expected
to be 100% ramped as of the refinancing date.

Blackstone / GSO Debt Funds Management Europe Limited (the
"Manager") manages the CLO. It directs the selection,
acquisition, and disposition of collateral on behalf of the
Issuer. After the end of the reinvestment period, the Manager may
reinvest unscheduled principal payments and proceeds from sales
of credit risk obligations, subject to certain restrictions.

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

Loss and Cash Flow Analysis:

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

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

Performing par, recoveries and principal proceeds balance:
EUR400,000,000

Defaulted par: EUR0

Diversity Score: 44

Weighted Average Rating Factor (WARF): 2845

Weighted Average Spread (WAS): 3.50%

Weighted Average Recovery Rate (WARR): 41.5%

Weighted Average Life (WAL): 7.0 years

Methodology Underlying the Rating Action:

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

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

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

Stress Scenarios:

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

Below is a summary of the impact of an increase in default
probability (expressed in terms of WARF level) on the Refinancing
Notes as well as the existing notes which are not subject to
refinancing, (shown in terms of the number of notch difference
versus the current model output, whereby a negative difference
corresponds to higher expected losses), assuming that all other
factors are held equal.

Percentage Change in WARF -- increase of 15% (from 2845 to 3272)

Rating Impact in Rating Notches:

Refinancing Class A-1A Senior Secured Floating Rate Notes: 0

Refinancing Class A-1B Senior Secured Fixed Rate Notes: 0

Refinancing Class A-2A Senior Secured Floating Rate Notes: -2

Refinancing Class A-2B Senior Secured Fixed Rate Notes: -2

Refinancing Class B Senior Secured Deferrable Floating Rate
Notes: -2

Refinancing Class C Senior Secured Deferrable Floating Rate
Notes: -2

Class D Senior Secured Deferrable Floating Rate Notes: -1

Class E Senior Secured Deferrable Floating Rate Notes: 0

Percentage Change in WARF -- increase of 30% (from 2845 to 3699)

Rating Impact in Rating Notches:

Refinancing Class A-1A Senior Secured Floating Rate Notes: -1

Refinancing Class A-1B Senior Secured Fixed Rate Notes: -1

Refinancing Class A-2A Senior Secured Floating Rate Notes: -3

Refinancing Class A-2B Senior Secured Fixed Rate Notes: -3

Refinancing Class B Senior Secured Deferrable Floating Rate
Notes: -3

Refinancing Class C Senior Secured Deferrable Floating Rate
Notes: -2

Class D Senior Secured Deferrable Floating Rate Notes: -1

Class E Senior Secured Deferrable Floating Rate Notes: -3

Further details regarding Moody's analysis of this transaction
may be found in the related new issue report, published around
the Original Closing Date in March 2015 and available on
Moodys.com.


DARTRY PARK: Fitch Affirms B- Rating on EUR11.5MM Class E Notes
---------------------------------------------------------------
Fitch Ratings has assigned Dartry Park CLO DAC refinancing notes
final ratings and affirmed the others:

EUR238 million Class A-1A-R notes: assigned 'AAAsf'; Outlook
Stable
EUR5 million Class A-1B-R notes: assigned 'AAAsf'; Outlook Stable
EUR30 million Class A-2A-R notes: assigned 'AA+sf'; Outlook
Stable
EUR12 million Class A-2B-R notes: assigned 'AA+sf'; Outlook
Stable
EUR24 million Class B-R notes: assigned 'Asf'; Outlook Stable
EUR21.5 million Class C-R notes: assigned 'BBBsf'; Outlook Stable
EUR24.5 million Class D notes: affirmed at 'BBsf'; Outlook Stable
EUR11.5 million Class E notes: affirmed at 'B-sf'; Outlook Stable
EUR 44.6 million Subordinated notes: not rated

The transaction is a cash flow collateralised loan obligation
securitising a portfolio of mainly European leveraged loans and
bonds. The portfolio is managed by Blackstone/GSO Debt Funds
Management Europe Limited. Dartry Park CLO DAC closed in March
2015 and is still in its reinvestment period, which is set to
expire in April 2019.

The issuer has issued new notes to refinance part of the original
liabilities. The refinanced notes have been redeemed in full as a
consequence of the refinancing. The refinancing notes bear
interest at a lower margin than the notes being refinanced. The
remaining terms and conditions of the refinancing notes
(including seniority) are the same as the refinanced notes.

In addition, the issuer has extended the weighted average life
(WAL) covenant to seven years from the refinancing date and has
updated the Fitch test matrices.

In its analysis, Fitch has applied a 15bp haircut to the weighted
average spread (WAS) calculation. In this transaction, the
aggregate funded spread calculation for floating rate collateral
debt obligation with an Euribor floor is artificially inflated by
the negative portion of Euribor.

KEY RATING DRIVERS

'B'/'B-' Portfolio Credit Quality
Fitch places the average credit quality of obligors in the
'B'/'B-' range. The weighted average rating factor (WARF) of the
current portfolio is 34.11, below the current WARF covenant of
35.

High Recovery Expectations
The portfolio comprises a minimum 90% senior secured obligations.
The weighted average recovery rating (WARR) of the current
portfolio is 67.7%, above the breakeven WARR of 63% for the
matrix point 35 WARF, 4.1% WAS and 5% fixed rate assets.

Extended WAL covenant
The WAL of the current portfolio is 5.12 years and the issuer has
extended the WAL covenant to seven years. The breakeven WARR was
determined based on the extended WAL covenant.

Limited Interest Rate Risk
Interest rate risk is naturally hedged for most of the portfolio,
as fixed-rate liabilities and assets represent 4.25% and between
0% and 10% of the target par amount, respectively.

Diversified Asset Portfolio
This transaction contains a covenant that limits the top 10
obligors in the portfolio to 20% of the portfolio balance. This
ensures that the asset portfolio will not be exposed to excessive
obligor concentration.

RATING SENSITIVITIES

A 125% default multiplier applied to the portfolio's mean default
rate, and with this increase added to all rating default levels,
would lead to a downgrade of two notches for the rated notes.

A 150% default multiplier applied to the portfolio's mean default
rate, and with this increase added to all rating default levels,
would lead to a downgrade of five notches for the rated notes.

A 25% reduction in recovery rates would lead to a downgrade of
two notches for the rated notes.

A 50% reduction in recovery rates would lead to a downgrade of
five notches for the rated notes.

A combined stress of default multiplier of 125% and recovery rate
multiplier of 75% would lead to a downgrade of six notches for
the rated notes.


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


ALITALIA SPA: Italy to Give Preference to Bids for Whole Company
----------------------------------------------------------------
James Politi and Tanya Powley at The Financial Times report that
the Italian government is hoping to avoid the break-up of
Alitalia by insisting it will give preference to bids for the
entire company at the launch of the final stage of its sale out
of bankruptcy.

On Aug. 1, the state-appointed commissioners running the airline
since it collapsed into administration in May set out the key
conditions for tabling bids in the upcoming public tender, the FT
relates.  They specify offers for all of Alitalia, or separate
bids for the airline operations, which includes maintenance, and
for the group's airport ground handling activities, the FT
discloses.

According to the FT, such conditions are designed to prevent
would-be buyers trying to carve off lucrative routes or valuable
assets, such as key buildings owned by Alitalia, from
participating.

The conditions state that if two offers are equal, preference
will be given to the one for the whole airline, the FT notes.

Alitalia, the FT says, has been run by three commissioners since
it collapsed in May, bringing three years of investment by
Etihad, the UAE carrier, to a bitter end.

During the past two months, the commissioners have sounded out
the market, and have received non-binding offers from at least 10
carriers, including Ryanair, Etihad and easyJet, the FT relays.
Based on the interest so far, there is growing confidence inside
Alitalia of a successful auction process, the FT states.

The Italian government agreed to pump EUR600 million in taxpayer
funds into Alitalia to keep it afloat for six months, with the
goal of selling the whole airline by the end of the year, the FT
recounts.

                          About Alitalia

Alitalia - Societa Aerea Italiana S.p.A., is the flag carrier of
Italy.  Alitalia operates 123 aircraft with approximately 4,200
flights weekly to 94 destinations, including 26 destinations in
Italy and 68 destinations outside of Italy.  It has a strong
global presence, flying within Europe as well as to cities across
North America, South America, Africa, Asia and the Middle East.
During 2016, the Debtor provided passenger service to
approximately 22.6 million passengers.  Its air freight business
also is substantial, having carried over 74,000 tons in 2016.
Alitalia is a member of the SkyTeam alliance, participating with
other member airlines in issuing tickets, code-share flights,
mileage programs and other similar services.

Alitalia previously navigated its way through a successful
restructuring.  After filing for bankruptcy protection in 2008,
Alitalia found additional investors, acquired rival airline Air
One, and re-emerged as Italy's leading airline in early 2009.

Alitalia was the subject of a bail-out in 2014 by means of a
significant capital injection from Etihad Airways, with goals of
achieving profitability during 2017.

After labor unions representing Alitalia workers rejected a plan
that called for job reductions and pay cuts in April 2017, and
the refusal of Etihad Airways to invest additional capital,
Alitalia filed for extraordinary administration proceedings on
May 2, 2017.

On June 12, 2017, Alitalia filed a Chapter 15 bankruptcy petition
in Manhattan, New York, in the U.S. (Bankr. S.D.N.Y. Case No.
17-11618) to seek recognition of the Italian insolvency
proceedings and protect its assets from legal action or creditor
collection efforts in the U.S.  The Hon. Sean H. Lane is the case
judge in the U.S. case.  Dr. Luigi Gubitosi, Prof. Enrico Laghi,
and Prof. Stefano Paleari are the foreign representatives
authorized to sign the Chapter 15 petition.  Madlyn Gleich
Primoff, Esq., Freshfields Bruckhaus Deringer US LLP, is the U.S.
counsel to the Foreign Representatives.


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


EURASIAN RESOURCES: Moody's Hikes CFR to B3, Outlook Stable
-----------------------------------------------------------
Moody's Investors Service has upgraded to B3 from Caa1 the
corporate family rating (CFR) and to B3-PD from Caa1-PD the
probability of default rating (PDR) of Eurasian Resources Group
S.a r.l. (ERG). The outlook on these ratings is stable.

RATINGS RATIONALE

The upgrade results from Moody's decision to raise ERG's baseline
credit assessment (BCA), which is a measure of the company's
standalone credit strength under Moody's government-related
issuer (GRI) rating methodology, to caa1 from caa2. ERG's BCA has
been raised reflecting an improvement in the company's liquidity
and its overall financial metrics in 2016 versus 2015, as well as
Moody's expectation of further improvement in the company's
leverage and interest coverage metrics over the next 12-18
months.

As the Kazakhstan government owns a 40% stake in ERG, Moody's
applies its GRI rating methodology. The B3 CFR reflects a
combination of (1) a BCA of caa1; (2) the Kazakhstan's Baa3
foreign currency rating; (3) the high default dependence between
ERG and the government; and (4) the moderate probability of
government support in the event of financial distress.

ERG's liquidity improved as a result of the recent completion of
debt restructuring with Sberbank (Ba1 stable, ba1) and Bank VTB,
JSC (Ba1 stable, b1), the company's main lenders. As a result of
debt restructuring, ERG extended the bulk of its debt maturities
to 2022 from 2016-18, with an option of further automatic
extension to 2025 subject to the company's compliance with
certain financial covenants.

Following the restructuring, ERG is to repay $111 million of debt
until the end of 2017, $237 million in 2018, $558 million in
2019, $1 billion in 2020 (including $500 million to the state
fund "Samruk Kazyna"), $449 million in 2021 and $5.7 billion
afterwards. In addition, Moody's expects ERG to make payments
under the cash sweep, which is embedded in loan agreements with
Sberbank and Bank VTB, of around $100 million in 2017 and over
$250 million in the third quarter of 2018.

Moody's estimates that as of June 30, 2017, ERG's liquidity
comprised more than $600 million in unrestricted cash and
equivalents and around $900 million in operating cash flow, which
Moody's expects the company to generate over the following 12
months. ERG also had access to the $507 million project
financing, to be used to finance the company's RTR cobalt and
copper project in the Democratic Republic of Congo (DRC, B3
stable). In addition, the company was to receive around $80
million in prepayments from its customers in the third quarter of
2017, which will be used to finance its equity contribution in
the RTR project. This liquidity was sufficient to cover the
company's debt maturities, cash sweep obligations, capex and
anticipated dividend payouts over the following 12 months.

However, beyond the 12-month horizon ERG will likely need to
procure additional external funding to cover the liquidity gap.
Moody's views the company's refinancing risk as manageable, owing
to its expected sustainable cash flow generation, status of the
third-largest employer in Kazakhstan and social importance for
the country's regions where the company operates. In addition,
the rating agency expects that the company will be able to
postpone part of capex and/or dividend payouts if needed to
support liquidity.

Moody's expects the company to improve its leverage and interest
coverage metrics over the following 12-18 months, with leverage
declining towards or below 4.0x Moody's-adjusted debt/EBITDA by
year-end 2017 from 5.6x at year-end 2016, and EBIT interest
coverage growing towards 2.5x from 1.5x. The improvement in
financial metrics will result from the increase in EBITDA on the
back of higher commodity prices, weak tenge and lower interest
expenses following the completed debt restructuring.

In addition to the improved liquidity and financial metrics,
ERG's BCA takes into account (1) the company's good access to
high-grade and long-reserve-life mining assets in Kazakhstan; (2)
its competitive cost structure, owing to high-quality mines and
efficient processing plants, particularly in the profitable
ferroalloys core business; (3) the high degree of vertical
integration in the alumina/aluminium, ferroalloys and iron ore
concentrate/pellets value chains; (4) good operational and
product diversification, with several operating mines and
processing facilities in Kazakhstan and, for copper, in DRC; (5)
solid market position in EMEA for ferrochrome, iron ore and
aluminium; (6) high share of more than 90% of exports in the
company's revenues; and (7) strong customer base and moderate
customer diversification, with 10 largest customers representing
40%-45% of sales.

The BCA also factors in (1) the company's exposure to volatility
in prices for commodities; (2) its negative free cash flow as a
result of high capex; (3) its aggressive financial policy, with a
large debt-financed expansionary capex programme along with
dividend payouts, although dividend amounts are limited under the
company's loan documentation with banks; (4) execution risks
related to the company's development projects, which are common
for mining companies; and (5) uncertainty regarding the outcome
of pending UK Serious Fraud Office (SFO) investigation on ERG's
past M&A transactions in Africa.

RATIONALE FOR STABLE OUTLOOK

The stable outlook reflects Moody's expectation that (1) the
company will maintain adequate liquidity and prudent liquidity
management, addressing its upcoming debt maturities in a timely
fashion; and (2) its leverage and interest coverage metrics will
remain commensurate with the current rating category. The stable
outlook does not factor in the potential negative outcome of the
SFO investigation, which Moody's views as an event risk and would
assess separately, if it were to occur.

WHAT COULD CHANGE THE RATINGS UP/DOWN

Moody's could upgrade ERG's ratings if the company were to (1)
reduce its Moody's-adjusted debt/EBITDA below 4.5x on a
sustainable basis; (2) generate sustainable positive free cash
flow; and (3) maintain healthy liquidity and prudent liquidity
management, addressing upcoming debt maturities in a timely
fashion. Moody's could also consider an upgrade if it were to
reassess the assumptions related to the degree of support from
and dependence on the Kazakhstan government, based on potential
new factors indicating a stronger support or lower dependence
than currently factored in the rating. The status of the SFO
investigation would also be assessed and taken into account at
the time of an upgrade.

Moody's could downgrade the ratings if the company's (1) Moody's-
adjusted debt/EBITDA remains above 5.5x on a sustained basis; (2)
EBIT interest cover declines below 1.0x on a sustained basis; or
(3) liquidity or liquidity management deteriorates materially. A
reassessment of the probability of government support in the
event of financial distress to a weaker level would also exert
negative pressure on the rating. A negative outcome of the SFO
investigation, resulting in material fines and penalties and high
reputational damage, could also lead to a downgrade.

The methodologies used in these ratings were Global Mining
Industry published in August 2014, and Government-Related Issuers
published in October 2014.

Eurasian Resources Group S.a r.l. (ERG) is the holding company of
Eurasian Natural Resources Corporation Ltd (ENRC), a vertically
integrated mining group with main operating assets in Kazakhstan,
and a number of development assets in Brazil and Africa. The
group is primarily focused on the mining and processing of
ferroalloys, iron ore, aluminium, copper and cobalt. ERG is one
of the world's largest ferrochrome producers and a major exporter
of iron ore in Kazakhstan. In 2016, ERG generated revenue of $3.8
billion and Moody's-adjusted EBITDA of $1.3 billion. The Kazakh
government (Baa3 stable) is ERG's largest single shareholder with
a 40% stake. The company's three founding shareholders, Mr.
Machkevitch, Mr. Ibragimov and Mr. Chodiev, own in aggregate a
60% stake.


HALYK SAVINGS: Moody's Affirms Ba1 Deposit Rating, Outlook Stable
-----------------------------------------------------------------
Moody's Investors Service has changed the outlooks to stable from
negative on the ratings of five financial institutions domiciled
in Kazakhstan reflecting reduced downside risks to the ratings
from the government's credit strength. At the same time, it has
affirmed the ratings of these issuers.

These rating actions follow the stabilisation of Kazakhstan's
credit profile as captured by Moody's change of outlook to stable
from negative on Kazakhstan's government rating (Baa3) on
July 26, 2017.

Specifically, Moody's has changed the outlooks to stable and
affirmed the ratings of the following entities: Development Bank
of Kazakhstan, House Construction Savings Bank of Kazakhstan JSC,
Halyk Savings Bank of Kazakhstan, Kazkommertsbank, Fund Of
Financial Support for Agriculture JSC.

RATINGS RATIONALE

The change of the outlook on Kazakhstan's Baa3 government bond
rating to stable from negative triggered corresponding changes of
the outlooks on the ratings of the five financial institutions
whose ratings benefit from government support uplift. Moody's
believes that the capacity and willingness of the Kazakhstan
government to assist state-owned financial institutions and banks
that benefit from government support remain substantially
unchanged. The stabilisation of the sovereign credit profile has
eased the downside risks the rating agency had identified earlier
when it assigned the negative outlook and prompted the rating
agency to stabilise the outlook on Development Bank of
Kazakhstan, House Construction Savings Bank of Kazakhstan JSC,
Halyk Savings Bank of Kazakhstan, Kazkommertsbank, Fund Of
Financial Support for Agriculture JSC.

WHAT COULD MOVE RATINGS UP OR DOWN

For the majority of the affected financial institutions, with
deposit, debt and issuer ratings being already positioned at or
close to the sovereign rating level, an upgrade is unlikely in
the absence of a corresponding change in the sovereign rating and
foreign currency deposit ceiling. For other entities the upward
pressure could arise from considerable improvements of their
individual financial performances.

Conversely, the long-term ratings could be revised downwards in
case of a downgrade on the sovereign rating although, given the
stable outlook, this is unlikely in the next 12-18 months. These
ratings may come under downward pressure if Moody's observes a
substantial deterioration in the macroeconomic environment (which
is not currently anticipated), and/or if the Kazakhstan
government's capacity or propensity to render support to
systemically important and state owned financial institutions
diminishes.

LIST OF AFFECTED RATINGS

Issuer: Halyk Savings Bank of Kazakhstan

Affirmations:

-- LT Bank Deposits (Local & Foreign Currency), Affirmed Ba1,
    Outlook Changed To Stable From Negative

-- Senior Unsecured Regular Bond/Debenture, Affirmed Ba3,
    Outlook Changed To Stable From Negative

Outlook Actions:

-- Outlook, Changed To Stable From Negative

Issuer: House Construction Savings Bank of Kazakhstan JSC

Affirmations:

-- LT Bank Deposits (Local Currency), Affirmed Baa3, Outlook
    Changed To Stable From Negative

Outlook Actions:

-- Outlook, Changed To Stable From Negative

Issuer: Kazkommertsbank

Affirmations:

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

-- Senior Unsecured Regular Bond/Debenture, Affirmed B1, Outlook
    Changed To Stable From Negative

-- Senior Unsecured MTN Program, Affirmed (P)B1

Outlook Actions:

-- Outlook, Changed To Stable From Negative

Issuer: Development Bank of Kazakhstan

Affirmations:

-- LT Issuer Rating (Local & Foreign Currency), Affirmed Baa3,
    Outlook Changed To Stable From Negative

-- Senior Unsecured Regular Bond/Debenture, Affirmed Baa3,
    Outlook Changed To Stable From Negative

-- Senior Unsecured MTN Program, Affirmed (P)Baa3

Outlook Actions:

-- Outlook, Changed To Stable From Negative

Issuer: Fund Of Financial Support for Agriculture JSC

Affirmations:

-- LT Issuer Rating (Local & Foreign Currency), Affirmed Ba2,
    Outlook Changed To Stable From Negative

-- Senior Unsecured Regular Bond/Debenture, Affirmed Ba2,
Outlook
    Changed To Stable From Negative

-- Senior Unsecured MTN Program, Affirmed (P)Ba2

Outlook Actions:

-- Outlook, Changed To Stable From Negative

PRINCIPAL METHODOLOGIES

The principal methodology used in Halyk Savings Bank of
Kazakhstan, House Construction Savings Bank of Kazakhstan JSC and
Kazkommertsbank ratings was Banks published in January 2016.

The methodologies used in Development Bank of Kazakhstan and Fund
Of Financial Support for Agriculture JSC ratings were Banks
published in January 2016, and Government-Related Issuers
published in October 2014.


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


ACCUDYNE INDUSTRIES: Moody's Affirms B3 CFR, Outlook Stable
-----------------------------------------------------------
Moody's Investors Service downgraded the ratings on Accudyne
Industries Borrower S.C.A.'s proposed first-lien senior secured
revolver and term loan to B3 from B2 and withdrew the Caa2 rating
on its proposed second-lien term loan based on a shift to an all
first lien debt structure. Concurrently, Moody's affirmed
Accudyne's B3 Corporate Family Rating (CFR) and B3-PD Probability
of Default Rating (PDR). The ratings outlook is stable.

The downgrade of the first-lien debt to B3 from B2 follows the
company's revised financing structure, which now proposes an all
first-lien senior secured debt structure. The previous capital
structure had featured a second-lien term loan that would have
provided a loss absorption cushion under a default scenario. The
change in structure is debt neutral with total funded debt
outstanding following the revision of the previously proposed
capital structure unchanged at $825 million. EBIT/interest
coverage (including Moody's standard adjustments) is expected to
improve moderately to 2.6x from 2.4x at transaction close.

Proceeds from the proposed refinancing together with over $100
million of balance sheet cash are anticipated to be used towards
refinancing approximately $885 million of the company's remaining
existing debt. Of note, the company's reported funded debt
balance as of its most recent March 31, 2017 reporting period
stood at a sizable $2.15 billion. Debt was reduced to $885
million prior to the proposed refinancing due to the company
having already applied the $1.265 billion of Sullair sale
proceeds to repay debt. The proposed refinancing transaction
moderately reduces funded debt further to $825 million due to the
use of balance sheet cash as part of the transaction. Proceeds
would also be used to fund a partial debt reduction and pay the
call premium on the notes and related transaction fees and
expenses.

The following rating actions were taken on Accudyne Industries
Borrower S.C.A.:

Ratings Downgraded:

$150 million backed senior secured first-lien revolving credit
facility due 2022, to B3 (LGD-3) from B2 (LGD-3)

$825 million backed senior secured first-lien term loan due 2024,
to B3 (LGD-3) from B2 (LGD-3)

Ratings Affirmed:

Corporate Family Rating, at B3

Probability of Default Rating, at B3-PD

Ratings Withdrawn:

$120 million backed senior secured second-lien term loan due
2025, at Caa2 (LGD-6)

Ratings Unchanged (to be withdrawn upon transaction close):

Existing senior secured revolving credit facility, at Ba3 (LGD-2)

Existing $1.675 billion (approximately $235 million outstanding)
senior secured term loan due 2019, at Ba3 (LGD-2)

Existing $650 million senior unsecured global notes due 2020, at
Caa1 (LGD-5)

RATINGS RATIONALE

Accudyne's B3 CFR is based on its well-established position in
engineered products reflected in its healthy EBITDA margins,
diversity by end-market and geography (approximately 60% of
revenues generated abroad) as well as good free cash flow
generation. Expectations for further improvement in the company's
operating performance are supported by anticipated benefits from
cost saving actions and modest top line growth from stabilization
in some of the company's key industrial and energy end markets.
Positively, due to the company's large installed base of
products, Accudyne derives approximately a third of its total
revenue base from aftermarket sales that provide a recurring high
margin revenue stream. The ratings reflect Moody's expectation
that debt/EBITDA will remain under 6.5 times with EBIT/interest
coverage exceeding 2.0 times.

These positive considerations are counterbalanced by the
company's exposure to the energy markets that are highly cyclical
due to the volatile nature of oil prices. However, Moody's
expects the end-markets will continue to stabilize over the next
12-24 months due to a moderate increase in demand. In Moody's
view, the company's good liquidity underscored by healthy
projected free cash flow generation combined with excess cash
balances and revolver availability serve to partially mitigate
the high degree of cyclicality.

The B3 rating on the first-lien debt reflects the preponderance
of first-lien bank debt in the company's debt structure. The debt
is secured by substantially all of Accudyne's tangible and
intangible assets as well as guaranteed by all material domestic
subsidiaries.

Accudyne's good liquidity is based on the expectation that over
the next twelve to eighteen months the company will generate
positive annual free cash flow of $45-$55 million with free cash
flow to debt in the mid-single digit range, cash balances
exceeding $75 million and an undrawn $150 million multi-year
revolver. The first lien term loan does not have a financial
maintenance covenant. However the revolver contains a springing
leverage covenant triggered by a utilization threshold. The
covenant is not expected to be triggered and Moody's expects good
cushion within the covenant level based on the current leverage.

The stable ratings outlook is based on the expectation that the
company will continue to moderately improve earnings given
stabilizing end-market conditions in certain of the company's
end-markets while maintaining good liquidity.

A ratings downgrade would be considered if the company's
liquidity were to weaken including a decline in free cash flow
generation and/or reliance on its revolving credit facility, lack
of improvement in top line revenue performance on a year-over-
year basis as well as debt-to-EBITDA reaching and consistently
above 6.5x. A more aggressive financial policy would also exert
downward ratings pressure.

An upward rating action would be driven by expectations of debt-
to-EBITDA improving to a level sustained below 5.0x, free cash
flow-to-debt increasing to the high single digit level as well as
a sustained stabilization and improvement in end-markets and good
liquidity.

The principal methodology used in these ratings was Global
Manufacturing Companies published in June 2017.

Accudyne Industries Borrower S.C.A. (Accudyne), headquartered in
Luxembourg and with its administrative office located in Dallas,
Texas, is a manufacturer of flow control equipment. The company,
comprised of the industrial divisions of Hamilton Sundstrand, was
acquired in December 2012 from United Technologies Corporation
(UTC). The company is privately-held and owned by BC Partners
Limited and The Carlyle Group L.P. End markets served include
energy, industrials, petrochemical, water and waste water among
others. Pro forma for the sale of the Sullair business, revenues
approximate $600 million.


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


BRIGHT BIDCO: Loan Increase No Impact on Moody's Ba3 Rating
-----------------------------------------------------------
Moody's Investors Service says that the Ba3 rating will remain
unchanged as a result of the USD240 million increase to the
existing USD1.15 billion Term B Loans. This facility is
incremental to the $1.15 billion senior secured term loan B that
Bright Bidco B.V. (BBBV, parent of Lumileds, Ba3 stable) borrowed
in conjunction with the sale of an 80.1% stake of BBBV to funds
of private equity firm Apollo.

BBBV intends to use $235 million of the loan proceeds to pay a
dividend to shareholders after a strong financial performance in
Q1 2017. Although reported EBITDA in Q1 2017 improved by $24.6
million (+41.6%), the improved EBITDA only partially supports the
higher resulting leverage which Moody's estimates will reach
around 4.5 times debt/EBITDA. The higher leverage leaves the
rating weakly positioned in the Ba3 rating category. Moody's, at
the time of the rating assignment in March 2017, said that
leverage moving towards 4.5x could lead to a downgrade. At the
same time, however, the company has improved its operating
profitability a trend that is likely to continue over the
remainder of the year.

The performance improvements in Q1 2017 were in particular driven
by higher EBITDA in Auto Lamps and Specialty whilst the operating
losses for General Illumination products were reduced. Overall,
LED sales were 13% higher year-on-year and higher than for
conventional lighting products (+1.2%). This is evidence that
BBBV is able to manage the transition from conventional to LED
lighting.

Bright Bidco B.V. (BBBV) is the parent company of Lumileds
Holding B.V. (Lumileds), a manufacturer of LED components and
automotive lighting activities wholly-owned by Royal Philips N.V.
(Philips, Baa1 stable) until June 2017 when Philips sold an 80.1%
stake of Lumileds to funds of Apollo. Lumileds in fiscal year
2016 recorded nearly EUR2.0 billion in revenues. The company
employs about 8,800 people and maintains manufacturing plants in
Europe, Asia and North America.


BRIGHT BIDCO: S&P Assigns 'B+' CCR, Outlook Negative
----------------------------------------------------
S&P Global Ratings assigned its 'B+' corporate credit rating to
Bright Bidco B.V., the holding company of The Netherlands-based
lighting solutions provider Lumileds. The outlook is negative.

S&P said, "We also assigned our 'B+' issue rating to the $1,150
million first-lien-term loan B and $200 million revolving credit
facility (RCF) taken by Bright Bidco B.V. The recovery rating is
'3', indicating our expectation of 50%-70% recovery prospects
(rounded estimate: 55%) in the event of a payment default.

"The 'B+' ratings are in line with the preliminary ratings we
assigned on March 2, 2017 (see "Netherlands Lighting Solutions
Provider Lumileds (Bright Bidco) Assigned Preliminary 'B+'
Rating; Outlook Stable," on Ratings Direct). However, the outlook
is now negative because of the risk of weakening credit metrics.

"We expect Lumileds' debt will increase following a dividend
recapitalization that points to a more aggressive financial
policy than we anticipated. Lumileds' owner, private equity fund
Apollo, plans to raise a $240 million add-on to its existing
$1,150 million term loan B in order to distribute a dividend to
shareholders. The add-on term loan will have the same terms and
conditions as the existing term loan B. We expect that the
proposed transaction will lead to an increase in Lumileds'
leverage (debt to EBIDTA) to about 5.5x at year-end 2017 instead
of 4.9x as we initially anticipated. We think that there is no
longer any leeway for credit metrics to deteriorate further
within the threshold for the current rating.

"Our 'B+' rating on Lumileds is constrained by the company's
exposure to the auto and consumer electronics end-markets, which
can be subject to large swings in demand. We also factor in a
degree of customer concentration by end-market.

In S&P's view, these constraints are partly mitigated by
Lumileds':

-- Solid market positions in the conventional and LED automotive
    lighting markets;
-- Focus on differentiated lighting solutions exhibiting high
    operating margin; and
-- Adequate liquidity position.

About 60% of Lumileds' sales stem from the auto end-market, while
about 20% come from its specialty business where Lumileds
provides smartphone manufacturers with flash lights for cameras.
S&P said, "Although we recognize that Lumileds holds leading
market positions in those end markets--alongside players such as
Germany-based OSRAM and U.S.-based Cree--we believe that its
revenues can be subject to swings in demand for end-products or
destocking effects from customers as observed in 2015 and in the
first half of 2016.

"We view Lumileds as well positioned to weather the ongoing
gradual shift from conventional lamps to LED in the auto segment
thanks to its good brand recognition in the aftermarket and its
technological expertise for LEDs. Nevertheless, research and
development (R&D) and capital expenditure (capex) investments are
higher in the LED segment than in the conventional division, and
we believe this could weigh on Lumileds' free cash flow
generation if revenues from the conventional business declined
quicker than expected.

Lumileds has been operating as a stand-alone entity since the
beginning of April 2015. Apollo acquired Lumileds from
Koninklijke Philips N.V on June 30, 2017 and holds about 80% of
Lumileds' shares, while Koninklijke Philips retains the remaining
shares. Final steps for the separation with Philips will require
some additional restructuring costs, which will constrain the
EBITDA margin in 2017 and 2018. However, S&P expects that
Lumileds will continue to post solid EBITDA margin for the
industry of above 15%.

The negative outlook reflects the risk of a downgrade if
Lumileds' leverage remains above 5x and its FFO to debt decreases
to below 12% over the next 12 months. This could result from
operational difficulties or pursuit of a more aggressive
financial policy through debt-financed acquisitions or a dividend
recapitalization.

A downgrade could occur if the company's FFO to debt deteriorated
to below 12% or if its debt to EBITDA failed to decrease to below
5x. This could stem from repeating operational issues or weaker
demand in Lumileds' auto and smartphones end markets. A large
debt-financed acquisition, a dividend recapitalization, or a
weakening of the liquidity position could also prompt a
downgrade.

An upgrade is unlikely over the next 12 months. S&P could
consider a stable outlook if Lumileds maintained FFO to debt
above 12% and reduced its debt to EBITDA below 5x. Any positive
rating action would hinge on the company's commitment to maintain
stronger metrics and refrain from a dividend recap or large debt-
funded mergers and acquisitions.


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


GREENKO DUTCH: Fitch Rates USD1 Billion Notes Final 'BB-'
---------------------------------------------------------
Fitch Ratings has assigned Greenko Dutch B.V's USD1 billion
senior notes (USD650 million 5.25% notes due 2024 and USD350
million 4.875% notes due 2022) a final rating of 'BB-'. The
rating of the notes reflects the credit profile of a restricted
group of operating entities under Greenko Energy Holdings
(Greenko, B+/Stable), a company involved in renewable power
generation in India.

GBV, a subsidiary of Greenko, will use the proceeds of the US
dollar notes to refinance its existing USD550 million notes.
Greenko plans to inject new operating solar and wind assets into
the restricted group, taking its total capacity to over 1GW from
623MW. The balance of the proceeds will be used mainly to
refinance existing debt at these new operating entities. Like
previous operating entities within the restricted group, the new
entities would also issue secured Indian rupee-denominated bonds
to GBV as part of the debt refinancing. GBV will not undertake
any business activity other than investments in the rupee bonds
via issuance of the US dollar notes.

Greenko is guaranteeing the notes, which does not enhance their
assigned rating as the credit risk profile of Greenko is assessed
as weaker than that of GBV. Greenko, including over 1GW of assets
in GBV and 403MW of assets in Greenko Investment Company (senior
note rating, based on guarantee from parent: B+; standalone
profile is weaker) restricted groups, has about 2.7GW of assets,
of which 1.9GW are operational. Greenko's credit risk profile is
somewhat elevated by the construction risks of its projects as
well as the structural subordination of cash flows from a
majority of operational assets with prior ranking debt.

The assignment of the final rating follows a review of the final
documentation conforming to the draft documentation previously
received. The final rating is the same as the expected rating
assigned on July 9, 2017.

KEY RATING DRIVERS

Structural Enhancement to Notes: The structural features created
through the notes indenture provide protection via restrictions
and limitations on use of cash and additional indebtedness at the
restricted group level. The note holders benefit from access to
cash generation and assets of the restricted group through the
rupee-denominated notes, via the proceeds of the US dollar notes
that would be on-lent to the asset owners of the restricted
group. The rupee-denominated notes will have a first charge on
all assets, except the accounts receivables, of the restricted
group. The note holders also benefit from the absence of any
prior-ranking debt in the restricted group, aside from a working
capital debt facility of a maximum of USD50 million, which will
be secured against accounts receivable.

Fitch note that the dividends from the restricted group are no
longer limited to 50% of cumulative net income, unlike the
existing USD550 million notes. Also, the drop down of additional
assets is allowed till gross leverage reaches 5.5x instead of
5.0x earlier. However this does not materially affect the credit
profile. Greenko's note guarantee does not enhance the note's
rating directly as the credit risk profile of Greenko is assessed
as weaker than that of GBV. However, Greenko's guarantee would be
beneficial to note holders as the assets of the restricted group
are not effectively owned by GBV.

Seasoned, Well Diversified Portfolio: All assets within the
restricted group are operational and amount to a total capacity
of over 1GW. The power projects' diversity by type - hydro, wind
and solar, and geography - mitigates the risks from adverse
climatic conditions. The weighted average life of hydro and wind
assets is about eight years and four years, respectively. On the
other hand, its solar assets only commenced operations within the
last few years. The portfolio is well spread across six Indian
states. The off-taker mix is also diversified across state
utilities (nine) and industrial customers. The sound
diversification would provide support for generation spread
throughout the year and stable cash flows.

About 60% of the hydro assets are built around rivers in northern
India, which are glacier fed, while the rest are mainly dependent
on the monsoons for their performance. The wind assets are spread
across three states in India, though wind patterns across larger
geographic areas tend to be correlated. The solar assets are
spread across four states in India with high radiance such that
generation is spread over about nine months of a year.

Forex Hedging, Low Refinancing Risk: The restricted group's
earnings will be in Indian rupees, but the notes would be
denominated in US dollars, giving rise to foreign-exchange risk.
However, GBV plans to hedge the entire (principal as well as
semi-annual coupon payments) foreign-exchange risk. Fitch
believes the association with GIC, Singapore's sovereign wealth
fund, and Abu Dhabi Investment Authority has improved Greenko's
access to funding, including in the banking and capital markets,
resulting in lower refinancing risk in spite of the bullet
maturity of the entire long-term debt of the restricted group.

Price Certainty, Volume Risks: Long-term power-purchase
agreements (PPAs) for most of the restricted group's wind, hydro
and solar assets offer long-term visibility of cash flows and
support the credit profile of the restricted group. The offtake
spread across nine state utilities and industrial customers also
diversifies realisation risks. Although the long-term PPAs
provide protection from price risk, production volume will vary
with seasonal and climatic patterns despite the diversification
of the assets.

Financial Performance to Improve: Fitch expects the restricted
group's financial profile to improve, supported by increased cash
generation as all of the assets chalk up a full year of
operations in the financial year to March 31, 2018 (FY18). The
agency expects financial leverage (net-adjusted debt/operating
EBITDAR) of the restricted group to improve to around 5x by the
end of FY18, compared with 7.2x at end-FY17. According to the
management, 50% of net income could be up-streamed as dividends
subject to the covenants of the notes. The rest of the cash will
be retained within the restricted group to address any potential
liquidity concerns and refinancing risks. There are no plans to
add further capacity within the restricted group as well.
However, Fitch note that a more than 50% dividend pay-out and the
drop-down of more assets into the restricted group are not
prohibited by the indenture to the notes, subject to other
leverage-related covenants.

Weak Counterparty Profile: The weak credit profiles of the
restricted group's key customers, state utilities, continue to be
a rating constraint. The restricted group also has some element
of concentration in its customer mix with its top three
customers, state utilities in Andhra Pradesh, Tamil Nadu and
Karnataka, accounting for about 50% of offtake by capacity. The
utilities in Andhra Pradesh and Karnataka have a track record of
relatively timely payments, but the receivable cycle has been
longer for Tamil Nadu. However, Fitch note the state utilities
have not defaulted on their payments to renewable energy
developers in India as yet, though the payments could be delayed.
Greenko has demonstrated that it can terminate PPAs if payments
are delayed, which may give it the ability to switch customers.
However, this still exposes the restricted group to a temporary
loss of revenue and working capital pressures while it negotiates
new agreements.

DERIVATION SUMMARY

The rating on the notes reflects restrictions on cash outflow and
additional indebtedness of the restricted group, its well-
diversified portfolio with considerable operating history and a
moderate financial profile amid weak counterparties. Fitch note
that there will not be material prior-ranking debt at the
restricted group other than working capital; and if any, it will
be subject to debt/assets test of 15%. Fitch assess Greenko's
credit profile to be weaker than that of the new restricted
group, and hence the restricted group does not benefit directly
from the guarantee.

The rating on GBV's notes is comparable with that assigned to
Azure Power Energy Ltd.'s (APEL) proposed notes (BB-(EXP)) that
are also issued by a restricted group of entities. GBV has a
larger scale, longer operating history and better expected
financial profile, while APEL has a better counterparty profile
and more stable solar assets.

Neerg Energy Ltd's (senior note rating: B+, ReNew Group's
restricted group) portfolio lags GBV's in terms of operating
history. About 15% of capacity was also under construction during
Fitch ratings exercise in February this year. Neerg has exposure
to wind and solar but it lacks hydro assets. Neerg has 10
projects with a presence across five states compared with the 34
projects across six states in the subject restricted group
proposed by Greenko. GBV also benefits from better scale and
plant load factor, mainly because of its first movers' advantage
and access to better sites. GBV's financial profile is also
better than Neerg's. Hence Fitch believes a notch of difference
in their ratings is justified.

KEY ASSUMPTIONS

Fitch's key assumptions within the rating case for GBV include:
- Plant load factors in line with historical performance for
   hydro assets, about 30% for most of the wind assets and around
   23% for new solar assets
- Plant-wise tariff in accordance with the power purchase
   agreements
- EBITDA margins to decline from 87% to 85%
- Average receivable period of 90 days in the medium term
- Cash accruals either to be used for dividend pay-outs based on
   covenants of the US dollar notes or to be preserved within the
   restricted group to address liquidity concerns and refinancing
   risks to an extent

RATING SENSITIVITIES

Future Developments That May, Individually or Collectively, Lead
to Positive Rating Action
- EBITDAR net-fixed charge coverage of 2.5x or more on a
   sustained basis. The fixed charge includes the cost of forex
   hedging
- Improvement in leverage, as measured by net-adjusted
   debt/operating EBITDAR, to below 3.5x on a sustained basis.

Future Developments That May, Individually or Collectively, Lead
to Negative Rating Action
- A weakening of Greenko Energy Holdings' credit profile
- Significant increase in refinancing risks
- Failure to adequately mitigate foreign-exchange risk
- EBITDAR net-fixed charge coverage not meeting Fitch's
   expectation of around 2x on a sustained basis over the medium
   term


PLAY COMMUNICATIONS: Moody's Assigns Ba3 CFR, Outlook Stable
------------------------------------------------------------
Moody's Investors Service has assigned a Corporate Family Rating
(CFR) of Ba3 to Play Communications S.A. (Play), Poland's second
mobile operator in terms of subscribers. Concurrently, Moody's
has withdrawn the B2 CFR and the B2-PD Probability of Default
Rating (PDR) at Impera Holdings S.A. (Impera), the pre-IPO 100%
owner of Play. The outlook on the ratings is stable.

"The Ba3 rating reflects the successful completion of Play's IPO,
with half the proceeds applied to repay the full amount of the
outstanding EUR500 million PIK toggle notes, in addition to the
company's revised leverage target which should lead to more
predictable financial policies going forward," says Alejandro
N£§ez, a Moody's Vice President - Senior Analyst and lead analyst
for Play.

The Caa1 ratings on the existing 5 3/8% EUR500 million pay-in-
kind (PIK) toggle notes due 2022 issued by Impera were unaffected
by this rating action and remain unchanged, as they will shortly
be redeemed with proceeds from the initial public offering (IPO)
of Play on the Warsaw Stock Exchange (WSE). Moody's expects to
withdraw the ratings on those existing notes once they are
repaid.

RATINGS RATIONALE

The Ba3 CFR assigned to Play is two notches above the B2 CFR that
Moody's previously assigned at the Impera level. The rating
differential mainly reflects the benefit of the debt reduction
made possible by the IPO's proceeds, which will lower the
company's average cost of debt as well as it gross leverage
(Moody's-adjusted) to around 3.7x by year-end 2017, from around
4.7x pre-transaction.

Play has raised approximately PLN4.4 billion (EUR1.0 billion) of
proceeds from the IPO. After the closing of the IPO, 47.9% of
Play's shares will be free float and 52.1% will be held by the
existing shareholders prior to the IPO (Tollerton Investments
Limited and Telco Holdings S.Ö r.l, both via Play Holdings 1 S.Ö
r.l).

Of the IPO proceeds, Play has announced it will apply EUR500
million (PLN2.1 billion) plus applicable premium to repay in full
the outstanding amount of the Impera PIK toggle notes, while the
remaining portion will be applied to fund a distribution to
Play's existing shareholders (ultimately Tollerton and Telco
Holdings) and to provide partial cash settlement of the existing
employee incentive scheme.

As a result of a debt refinancing undertaken by the company in
March 2017 and the pending repayment of the PIK toggle notes at
Impera level, the group's debt structure will be simplified into
an all bank debt structure denominated entirely in Polish zloty
and with maturities ranging from 2022-2023. In light of the fact
that Play operates entirely within Poland, with zloty as its
functional currency, the March 2017 refinancing and the
prospective repayment of Play's only debt instrument not
denominated in zloty will eliminate the vast majority of Play's
foreign exchange risk.

The Ba3 rating also reflects Play's stated objective to
deleverage (as measured by reported net debt/EBITDA ratio) toward
2.5x over the medium term. Moody's estimates that, by the time
Play achieves its net leverage target of 2.5x, that level would
be equivalent to a Moody's-adjusted gross debt/EBITDA ratio of
around 2.7x.

As part of the IPO plan, Play also announced it will pay a
dividend of PLN650 million (approximately EUR153 million) for
2017 in the second quarter of 2018 and will exercise a recurring
annual dividend payout of 65%-75% of its free cash flow to equity
after lease payments from 2018 onwards. In addition, once Play
reaches its target capital structure of 2.5x net reported
debt/EBITDA, it plans to re-assess its dividend policy. The
dividend payment, together with the company's plan to increase
capex in order to extend and improve its nationwide mobile
network, will over the next couple of years lead to lower annual
free cash flow than what the company has historically generated.

The new financial leverage and shareholder remuneration targets,
as well as the partial exit of the private equity sponsors from
the shareholding structure, will provide predictability over
future financial policies, reducing the risk of an unexpected
releveraging, which had represented an overhang and limitation on
upward rating pressure for the B2 CFR previously assigned at the
Impera level.

While Play will have ample headroom under the debt maintenance
covenants of its senior bank facilities (which limits total net
leverage initially to under 5.25x), the Ba3 rating assumes that
Play will instead manage its debt toward its publicly announced
net leverage target of 2.5x.

Moody's has also reflected in its Ba3 rating, the improving trend
in key credit metrics underpinned by Play's above-average revenue
growth and rising operating margins.

RATIONALE FOR STABLE OUTLOOK

The stable outlook reflects Play's solid operating performance
and Moody's expectation that over the next 12-18 months the
company will endeavor to deleverage toward its revised leverage
target as it continues to increase EBITDA and service its
amortizing bank debt. More specifically, Moody's expects Play to
report Moody's-adjusted Gross debt/EBITDA of 3.7x in 2017 and
3.2x in 2018.

WHAT COULD CHANGE THE RATING UP / DOWN

Upward pressure on the rating could develop if the company's
Moody's-adjusted gross leverage were to decline below 3.0x and
its Retained Cash Flow (RCF) / Gross Debt to exceed 25% on a
sustained basis.

Downward pressure on the rating could develop if the company's
Moody's-adjusted gross leverage were to rise above 3.5x and its
RCF / Gross Debt to decline below 17% on a sustained basis.
Negative ratings pressure could also arise in the case of (1)
significantly weakened liquidity; and/or (2) should the company
materially increase its dividend payout policy thereby limiting
the company's financial flexibility and its ability to reduce
debt if operating trends were to deteriorate materially.

LIST OF AFFECTED RATINGS

Issuer: Play Communications S.A.

Assignments

-- LT Corporate Family Rating, Assigned Ba3

Outlook Actions:

-- Outlook, Assigned Stable

Issuer: Impera Holdings S.A.

Withdrawals:

-- LT Corporate Family Rating, previously rated B2

-- Probability of Default, previously rated B2-PD

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was
Telecommunications Service Providers published in January 2017.

Play Communications S.A. is the parent of P4 Sp. z o.o., Poland's
second mobile network operator in terms of subscribers. The
company operates under the commercial name "PLAY" and offers
voice, non-voice and mobile broadband products and services to
residential and business customers. As of December 2016, Play had
approximately 14.4 million reported subscribers (of which 58%
were contract subscribers) and a mobile market share of 26.3%.
For FY2016, Play reported revenues of PLN6.12 billion (EUR1.42
billion) and adjusted EBITDA of PLN2.04 billion (EUR473 million).
Following the closing of Play's IPO, Play's principal
shareholders are Tollerton Investments Limited, with a 26.2%
stake, and Telco Holdings S.Ö r.l, with a 25.9% stake, with the
remaining 47.9% of Play's shares as free float and trading on the
Warsaw Stock Exchange.


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


BANCO ESPIRITO: Creditors Lose Bid to Annul Plan Ruling
-------------------------------------------------------
Stephanie Bodoni at Bloomberg News reports that the EU General
Court rejects as inadmissible a challenge by Banco Espirito Santo
creditors to annul a 2014 European Commission decision on the
resolution plan of the bank.

The court gave the decision in a July 19 order posted on court's
website on Aug. 1, Bloomberg relates.

According to Bloomberg, the court said the challenge was launched
by BPC Lux 2 Sarl and other subordinated creditors of Banco
Espirito Santo holding Lower Tier 2 Bonds.

European Commission in August 2014 statement approved resolution
aid for the bank, Bloomberg recounts.

Banco Esp°rito Santo (BES) is a Portugal-based bank. The Bank
organizes its business into six operational segments: Domestic
Commercial Banking, which includes the Retail, Corporate,
Institutional and Private Banking sub segments, International
Commercial Banking, Investment Banking, Asset Management, Markets
and Strategic Investments and Corporate Centre. Together with its
subsidiaries, BES provides a range of financial products and
services, including deposits, credit and debit cards, savings
accounts, asset management, loans, investment banking and
brokerage, custodian services, investment funds management, as
well as life and non-life insurance products.



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


ARCELORMITTAL: Fitch Affirms BB+ Long-Term Issuer Default Rating
----------------------------------------------------------------
Fitch Ratings has affirmed ArcelorMittal's (AM) Long-Term Issuer
Default Rating (IDR) and senior unsecured ratings at 'BB+'. Fitch
has also revised the Outlook on the company's IDR to Positive
from Stable. The Short-Term IDR has been affirmed at 'B'.

The Outlook revision reflects Fitch views that AM's financial
policy now includes a stronger commitment to absolute debt
reduction than previously. Steel markets have also improved since
mid-2016, which together with the measures AM has taken to
improve its balance sheet and decrease costs have led us to
revise Fitch projections upwards. Fitch now expects AM to achieve
FFO adjusted leverage of around 3x by end-2017 (a year before
Fitch previously expected). Fitch project AM will generate over
USD1 billion of free cash flow (FCF) in each of the next three
years with the majority of this used for absolute debt reduction.
As a result, under Fitch's base case, Fitch assume that net debt
will decrease by around USD4 billion over the next three years.

KEY RATING DRIVERS

Increased Commitment to Debt Reduction: Fitch views AM's
announcement during its 1H17 results to continue decreasing debt
together with its commitment to achieve an investment-grade
rating as positive and the driver of the Positive Outlook. The
actions AM has implemented since the beginning of 2016 to repair
its balance sheet together with the improvement in steel markets
have so far resulted in AM decreasing reported debt by USD4
billion during 2016.

Fitch believes that AM will continue to reduce gross debt using
FCF over the next two to three years and as a result, Fitch base
case assumes that net debt will fall by approximately USD4
billion over the period to the end of 2019. As a result, Fitch
projects that AM will be able to achieve credit metrics in line
with an investment-grade rating over the next 18-24 months.

Improved Credit Metrics: In 2016 AM's FFO adjusted gross leverage
fell to 4.1x from 7.4x. The large drop in leverage was because of
an increase in reported EBITDA by 20% and AM's efforts to
strengthen its balance sheet, which include the USD3 billion
rights issue, the USD1 billion asset sale of Gestamp and AM's
Action 2020 plan which included further structural improvements.

"Fitch has revised Fitch projections and now expect EBITDA to be
around USD8 billion in 2017 and USD7 billion in 2018. Fitch
expects working-capital investment of USD1.5 billion in 2017, and
that the company will resume small dividends payments in 2018,
resulting in FCF of around USD1.5 billion for 2017 and 2018,
which Fitch expects to be predominantly used for debt reduction.
This will result in a gradual decrease in leverage to around 2.8x
by the end of 2019," Fitch says.

Ilva Deal Strengthens European Business: Fitch view the recent
Ilva transaction as on balance a positive development for AM as
it complements and strengthens AM's current European business
while limiting the financial risk of the transaction and the
impact on the company's balance sheet.

End-Market Demand Positive: Fitch expects the underlying end-
market demand for AM's products in a majority of its core markets
to be positive for 2017. Fitch expects AM's total steel shipments
in 2017 to remain around 84mt. Fitch changed the sector outlook
for western Europe steel to stable for 2017 from negative in
2016. The stable sector outlook reflects Fitch Ratings' view that
demand for steel from key consuming sectors will continue to grow
and that import levels for key steel products have probably
peaked.

Raw Material Prices Key: Fitch expects iron ore and coal prices
to be the main driver for steel prices in 2017 and hence
gradually decline throughout the year, from the highs seen in the
first quarter 2016. There are positive signs from anti-dumping
measures and Fitch believes that this may support steel prices in
the longer term. In the short term, however, Fitch expects
changes in the raw material prices to have a stronger impact on
price.

Significant Scale and Diversification: The ratings reflect AM's
position as the world's largest steel producer. AM is also the
world's most diversified steel producer by product and geography,
and benefits from a solid and increasing level of vertical
integration into iron ore.

Mid-Point Cost Position: Fitch estimates that AM has an average
cost position (higher second quartile) overall, varying across
the key regions in which it operates. The cost positions of
individual plants significantly differ, with those in Europe
generally operating at higher costs. Management has various cost
initiatives, but Fitch does not expects any short-term material
shift in the company's cost position.

DERIVATION SUMMARY

Comparing AM to European peers: ThyssenKrupp (BB+/Stable), like
AM has a strong market position in many of its segments and also
has relatively higher value added product mix. TK is however more
diversified in its business profile with several capital goods
businesses, which provide relative stability. AM is more
geographically diversified and has higher raw material self-
sufficiency.

Comparing AM to Russian peers: The Russian steel companies, PAO
Severstal (BBB-/Stable), PJSC Novolipetsk Steel (NLMK) (BBB-
/Stable) and OJSC Magnitogorsk Iron & Steel Works (BBB-/Stable)
are less diversified with a lower value added product mix in
comparison to AM. However, the Russian steel companies have lower
leverage and are industry cost leaders as they also benefited
from the weakening of the rouble relative to the dollar.

KEY ASSUMPTIONS

Fitch's key assumptions within Fitch ratings case for the issuer
include:
- high single-digit percentage increase in average selling
   prices in 2017;
- steel prices to decline in 2018 driven by Fitch views of a
   decline in steel-making raw material prices;
- continued reduction in cash costs to support future
   profitability;
- iron ore price - USD55/t in 2017 and USD45 thereafter;
- capex of USD2.9 billion in 2017;
- dividends reinstated in 2018.

RATING SENSITIVITIES

Future Developments That May, Individually or Collectively, Lead
to Positive Rating Action
- EBIT margin above 8%
- FFO gross leverage sustained below 3x
- FCF (post dividends) margin above 2%

Future Developments That May, Individually or Collectively, Lead
to Negative Rating Action
For a Stable Outlook
- EBIT margin below 6%
- FFO gross leverage sustained above 3x
- FCF (post dividends) margin below 1.5%
- Failure to use FCF to decrease debt (which will not be in line
   with management's stated intention)

LIQUIDITY

Sufficient Liquidity: At December 31, 2016, AM had cash of USD1.4
billion (Fitch has adjusted the reported cash position by USD1
billion which relates to non-readily available cash) and undrawn
long-term credit lines of USD5.5 billion (USD2.3 billion matures
in December 2019, USD3.2 billion matures in December 2021). This
Fitch believes adequately covers short-term debt of USD3.5
billion.

FULL LIST OF RATING ACTIONS

Long-Term IDR affirmed at 'BB+', Outlook changed to Positive from
Stable
Short-Term IDR affirmed at 'B'
Senior unsecured rating affirmed at 'BB+'


CB KRYLOVSKY: Put on Provisional Administration, License Revoked
----------------------------------------------------------------
The Bank of Russia, by its Order No. OD-2190, dated August 2,
2017, revoked the banking license of Krasnodar-based credit
institution Joint-stock Commercial Bank Krylovsky from August 2,
2017, according to the press service of the Central Bank of
Russia.

According to the financial statements, as of July 1, 2017, the
credit institution ranked 360th by assets in the Russian banking
system.

The credit institution's resource base was mainly formed by
borrowed household funds.  In 2017, the bank pursued an
aggressive household fund raising policy.  The Bank of Russia has
repeatedly applied supervisory measures to Joint-stock Commercial
Bank Krylovsky, including restrictions (twice) and a prohibition
(once) on household deposit taking.

On July 26, in the course of the inspection of tills at several
offices of Joint-stock Commercial Bank Krylovsky, the Bank of
Russia revealed a large-value cash shortage.  Creation of
required loss provisions for actually missing assets revealed a
full loss of capital by the credit institution.

The management and owners of the bank failed to take effective
measures to normalize its activities. In addition, their behavior
was unscrupulous: they submitted unreliable statements to the
Bank of Russia and withdrew assets to the detriment of creditors
and depositors' interests.  The Bank of Russia will forward
information about the mentioned facts to law enforcement
authorities. Under these circumstances, the Bank of Russia
performed its duty on the revocation of the banking license from
Joint-stock Commercial Bank Krylovsky in accordance with Article
20 of the Federal Law "On Banks and Banking Activities".

The Bank of Russia took such an 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, because all capital adequacy ratios of this credit
institution were below 2% and its equity capital dropped below
the minimum authorized capital value established as of the date
of state registration, and taking into account the repeated
application within a year of measures envisaged by the Federal
Law "On the Central Bank of the Russian Federation (Bank of
Russia)".

The Bank of Russia, by its Order No. OD-2191, dated August 2,
2017, appointed a provisional administration to Joint-stock
Commercial Bank Krylovsky for the period until the appointment of
a receiver pursuant to the Federal Law "On 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.

Joint-stock Commercial Bank Krylovsky is a member of the deposit
insurance system. The revocation of the banking license 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.


DETSKY MIR: S&P Places 'B+' CCR on CreditWatch Negative
-------------------------------------------------------
S&P Global Ratings said that it placed its 'B+' corporate credit
rating on Russia-based children's goods retailer Detsky Mir on
CreditWatch with negative implications.

S&P said, "The CreditWatch placement follows our CreditWatch
placement on Sistema, the majority owner of Detsky Mir
(moderately strategic to Sistema), due to uncertainties stemming
from the potential indirect impact on Detsky Mir from the outcome
of Rosneft's Russian ruble (RUB) 170.6 billion ($3 billion
equivalent) claim on Sistema (see "Russian Holding Company
Sistema 'BB' Rating Placed On Watch Negative On Pending Court
Decision," published July 18, 2017, on RatingsDirect). We see
potential pressure on our rating on Detsky Mir if the claim
results in a multi-notch downgrade of Sistema, if we revise the
strategic status of Detsky Mir to non-strategic, or if Detsky
Mir's shareholder distributions are above our base-case scenario.

"At the same time, in the absence of material harm to Sistema due
to the claim or other factors, we would likely resolve the
CreditWatch on Detsky Mir without any rating action.

"We do not expect Detsky Mir's stand-alone creditworthiness to
materially change over the next 12 months. We believe that Detsky
Mir will continue with robust, but slowing revenue growth
reflecting both increased like-for-like sales and a rise in the
number of stores. Additionally, we anticipate that profitability
will continue to strengthen owing to better capacity utilization
as the top-line grows and tight control over fixed costs. This
should allow the company to maintain credit metrics commensurate
with current stand-alone credit profile of 'b'. In particular, we
expect Detsky Mir will maintain its adjusted debt-to-EBITDA ratio
of comfortably less than 5x over the next 12 months, while
EBITDAR to cash interest plus rents will stay at 1.6x-2.2x and
reported free operating cash flow (FOCF) will remain positive.

"We still consider Detsky Mir a moderately strategic subsidiary
of Sistema but this assessment will depend on the extent of the
implications of Rosneft's claim on Sistema's liquidity and
leverage. If we believed that Sistema's ability to provide
support to Detsky Mir, in the event the subsidiary fell into
financial difficulty, had diminished, we could revise our opinion
of Detsky Mir's strategic status for the investment holding
company.

"We consider Detsky Mir's lack of end-market diversity with a
focus on competitive children and baby product markets, its
geographic concentration in the Russian market, and risks related
to operating in volatile emerging markets to be the main
constraints for the business. Detsky Mir operates in a fragmented
retail market exposed to the relatively discretionary nature of
demand for nonfood products, with demand softening for children's
and baby goods when the economy weakens and disposable income
shrinks.

"At the same time, Detsky Mir benefits from its position as the
leading player in the Russian children's and baby goods retail
market with its strong brand recognition and solid store network
in 178 cities across Russia and Kazakhstan. Detsky Mir benefits
from its solid position in the baby food segment, the most
resilient to economic downturns. In addition, the high share of
apparel sales that Detsky Mir derives from its own private label
products and its centralized distribution center support sound
profitability and a competitive pricing policy.

"We see a relatively strong level of credit metrics such as S&P
Global Ratings-adjusted debt to EBITDA of 3x-4x, funds from
operations (FFO) to debt of 15%-20%, and positive FOCF generation
over 2017-2019 as supporting factors for the rating. Detsky Mir
has adopted a financial policy such that the target weighted-
average maturity of the company's debt is set to be at least two
years."

S&P's base case assumes:

-- Anticipated total annual sales growth of 15%-25% in the next
    two years, reflecting the improved economic climate in
    Russia, the company's accelerated store expansion program,
    and our expectation of robust like-for-like sales growth
    underpinned by Detsky Mir's strong market positions.
-- Profitability will continue to benefit from the ongoing cost
    efficiency program and centralized logistics, allowing the
    company to raise its reported EBITDA margins of consistently
    higher than 10.5% in the medium term, compared with 10.3% in
    2016 and 8.5% in 2015.
-- S&P Global Ratings-adjusted debt of about RUB70 billion in
    December 2017. We add an adjustment of about RUB55 billion
    reflecting commitments under the operating leases (increasing
    in line with sales from the RUB46 million reported as of Dec.
    31, 2016), and deduct about RUB1 billion surplus cash that is
    not "trapped" in tills or in transit, as it is used to
    partially cover sizable short-term debt maturities.
-- About RUB1 billion outflow on working capital in order to
    facilitate the store opening program, and RUB2.0 billion-
    RUB2.2 billion annual capital expenditure (capex).
-- FOCF excluding our adjustments of about RUB3.7 billion-RUB4.0
    billion in 2017, compared with RUB 4.1 billion in 2016,
    rising to over RUB6 billion in 2018 primarily driven by an
    increase in EBITDA and capex remaining broadly stable.
-- Dividends of RUB2.6 billion in 2017, increasing in line with
    net income thereafter, in line with publicly stated policy of
    at least a 50% net income payout.

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

-- Adjusted EBITDA of RUB15.0 billion-RUB20.0 billion in 2017,
    compared with RUB15.2 billion in 2016.
-- Adjusted debt to EBITDA of about 3.0x-4.0x in 2017- 2018,
    compared with 3.9x posted in 2016. FFO to debt of about 15%-
    20% in 2017-2018, compared with 14.9% in 2016.
-- Adjusted EBITDAR to cash interest plus rents coverage of
    1.8x-2.0x in 2017 and 2018. This compares with 1.6x posted in
    2016.

S&P said, "We expect to resolve the CreditWatch on Detsky Mir
when the implications of Rosneft's claim on Sistema's liquidity
and leverage become clearer. Depending on how the situation
develops, we could maintain the CreditWatch for longer than our
typical three-month horizon.

"We could lower the rating on Detsky Mir if we no longer
considered it moderately strategic for Sistema or if our rating
on Sistema were lowered by more than one notch. This could happen
if the court decided in Rosneft's favor leading to material
pressure on Sistema's liquidity or financial risk profile.

"If the case closed with limited or zero implications for
Sistema, we would likely affirm the rating on Detsky Mir."


SOVCOMBANK: Moody's Hikes Deposit Ratings to Ba3, Outlook Stable
----------------------------------------------------------------
Moody's Investors Service upgraded Sovcombank's Baseline Credit
Assessment (BCA) and adjusted BCA to ba3 from b1, its long-term
local- and foreign-currency deposit ratings to Ba3 from B1, and
its long-term Counterparty Risk Assessment (CR Assessment) to
Ba2(cr) from Ba3(cr).

The rating agency also affirmed the bank's short-term local- and
foreign-currency deposit ratings of Not Prime and its short-term
CR Assessment of Not Prime (cr).

All long term deposit ratings carry a stable outlook.

RATINGS RATIONALE

The BCA upgrade to ba3 from b1 reflects recent improvements in
Sovcombank's financial performance and its business profile,
which Moody's expects to remain solid and sustained in the long
term and commensurate with those of Ba-rated peers.

Sovcombank continues to report strong profitability, reducing its
reliance on one-off gains. For Q1 2017, Sovcombank posted net
profit of RUB 8.3 billion, which translated into a strong
annualized Return on Average Assets of 5.9% and Return on Equity
of 52%. The bank's core profitability from net interest income
and fees and commissions accounted for 70% of its operating
income in Q1 2017 compared to 42% in H1 2016. Moody's expects
that Sovcombank's robust recurring profitability will sustain in
the long term, supported by its healthy margins (over 5%), strong
fees and commissions and the bank's cost efficient business
model.

The rating action also reflects Sovcombank's improved loss
absorption, supported by the bank's robust capital buffers and
strong income generating capacity. At the end of March 2017,
Sovcombank's consolidated Tier 1 and Total Capital Adequacy
ratios increased to 14.2% and 17.8% respectively from 12.7% and
16.0% at the end of 2016, and Moody's expects its capital
adequacy to remain solid in the long term supported by its
internal capital generation.

The bank's asset quality is another relative credit strength for
Sovcombank. The bank displays good asset diversification with
significant exposure to creditworthy customers from corporate and
sub-sovereign sectors and increased focus on secured retail loans
which accounted for around 50% of total retail portfolio in Q1
2017.

As at March 31, 2017, the bank's problem loans (impaired
corporate and retail loans overdue more than 90 days) accounted
for 2.9% of gross loans, down from 4.4% as at June 30, 2016 and
were sufficiently covered by loan loss reserves. A more
substantial 49% of its asset base was invested in fixed-income
securities, which predominantly consisted of Russian Eurobonds
rated Ba and bear limited credit risk.

Recent M&A deals have already positively affected Sovcombank's
performance and will improve its market position in auto loan,
mortgage and bank guarantee businesses and strengthen its
earnings-generating capacity in the long term.

Moody's expects Sovcombank's liquidity profile to remain healthy
over the next 12-18 months. The bank's funding structure reflects
its high reliance on interbank funding related to Repo
transactions, which accounted for around 32% of total liabilities
at the end of March 2017, down from 46% at the end of June 2016.
However, the bank funding and liquidity profiles benefit from its
established deposit-taking franchise, which provides the bank
with a granular and stable funding source.

Given a stable operating environment (with the Russian economy
returning to modest growth), the bank's focus on less risky
borrowers and a benign liquidity outlook for the sector, Moody's
expects Sovcombank to maintain its improved financial metrics in
the coming years commensurate with its Ba rated peers.

WHAT COULD MOVE THE RATINGS UP/DOWN

A further upgrade in the bank's BCA could result from a material
strengthening of Sovcombank's market position, along with a
longer track record of sustainable and robust financial
performance driven by recurring income. Conversely, the ratings
could be downgraded if there were a sharp deterioration in the
operating environment in Russia that would lead to a substantial
deterioration of the bank's asset quality, capitalization or
liquidity profile.

LIST OF AFFECTED RATINGS

Issuer: Sovcombank

Upgrades:

-- LT Bank Deposits (Local & Foreign Currency), Upgraded to Ba3
    from B1, Outlook Remains Stable

-- Adjusted Baseline Credit Assessment, Upgraded to ba3 from b1

-- Baseline Credit Assessment, Upgraded to ba3 from b1

-- LT Counterparty Risk Assessment, Upgraded to Ba2(cr) from
    Ba3(cr)

Affirmations:

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

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

Outlook Actions:

-- Outlook, Remains Stable

PRINCIPAL METHODOLOGY

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


VNESHECONOMBANK: S&P Affirms 'BB+/B' ICR, Revises Outlook to Pos.
-----------------------------------------------------------------
S&P Global Ratings revised its outlook on Vnesheconombank (VEB)
to positive from developing. S&P said, "At the same time, we
affirmed the 'BB+/B' long- and short-term foreign currency issuer
credit ratings and the 'BBB-/A-3' long- and short-term local
currency issuer credit ratings on VEB.

"The equalization of the outlook on VEB and the Russian
Federation reflects progress in the government's efforts to steer
the bank's business model away from large unprofitable projects,
the government's strong commitment to continue supporting VEB's
debt service and capital cushion, and what we regard as the
bank's stronger stand-alone credit profile (SACP) as a result of
these measures. These underpin our opinion that the bank's
exposure to transition risk in government support is now
contained."

Over the last 12 months the Russian government has:

-- Approved VEB's new strategy through to year-end 2021. The
    strategy adjusted VEB's business model and narrowed its
    public policy mandate, with a focus on supporting only
    infrastructure, manufacturing, conversion of the defense
    industry to civil needs, and high-tech and noncommodity
    export support. In the past, the mandate was much wider;
-- Supported restructuring of some of VEB's underperforming
    assets. The government in particular orchestrated the
    offloading of the bank's assets that were exposed to
    Ukraine's credit risk to a nonprofit entity and backed it up
    with a sovereign guarantee of Russian ruble (RUB) 550 billion
    (about $9 billion; about 5% of the bank's total assets);
-- Refrained from mandating that VEB take on new large and
    politically driven projects; and
-- Explicitly legislated annual capital injections to VEB of
    RUB150 billion in its budget acts for 2016 and 2017-2019 to
    support the bank's capitalization and external debt service.

S&P said, "These developments support our view that VEB is a
government-related entity (GRE) with an almost certain likelihood
of receiving extraordinary support from the Russian government in
the event of financial difficulties. Accordingly, we equalize our
ratings on VEB with those on Russia."

S&P believes that there is an almost certain likelihood of
extraordinary government support due to its assessment of VEB's:

-- Critical role for Russia as the government's prime public
    development institution, a role that cannot be readily
    undertaken by a private entity.
-- The VEB group's assets currently represent over 4% of
    Russia's GDP; and
-- Integral link with Russia.

This is because of VEB's unique status as a state corporation
operating under the law "On The Bank For Development," with
strong oversight from the federal government and prime minister,
represented on its supervisory board. Also, the government has a
proven track record of providing timely support to VEB in all
circumstances, including a subordinated deposit of $6 billion in
2014, and RUB150 billion injections in 2016 and 2017, and the
legislated commitment for further support in 2018-2019.
Furthermore, high-ranking government and central bank officials
have reiterated the government's strong commitment to VEB since
the U.S. imposed sanctions in 2014.

S&P said, "We have also revised our assessment of VEB's SACP to
'b-' from 'ccc+', reflecting received and committed government
support to the bank's capital buffers. Our assessment of the
bank's SACP is based on our 'bb-' anchor for financial
institutions operating primarily in Russia, as well as the bank's
adequate business position, moderate capital and earnings, weak
risk position, average funding, and moderate liquidity.

"The revised assessment of capital and earnings reflects our
expectation that the projected risk-adjusted capital ratio for
VEB, before diversification, will likely stay above 5% in the
next 12-18 months. We note that this ratio benefits from the
government's capital support and the decline in the bank's risk-
weighted assets.

"Our assessment for VEB's business position as adequate reflects
strong continued government capital and funding support to help
VEB continue its operations, the bank's established special role
in the Russian economy and the banking sector, as well as its
updated long-term strategy that implies a narrower public mandate
and slightly improved credit risk profile as a result of the
restructuring of its existing portfolio and recent changes to its
strategy. At the same time, we note that VEB's own capacity to
generate sustainable core operating income remains weak. Our
understanding also is that, eventually, VEB plans to sell its
commercial bank subsidiaries, although currently the terms and
timing for such sale remain highly uncertain.

"We consider VEB's risk position as weak because of the bank's
public policy role, and its significant involvement in
government-led projects, which are often loss-making. According
to International Financial Reporting Standards, at 2016-end VEB's
gross nonperforming loans represented 17.3% of the loan book,
which is a slight reduction from 19.9% a year ago, but
substantially worse than the average in the Russian banking
sector. We expect that, in the future, profitability will still
not feature in VEB's mandate, which remains essentially quasi-
fiscal.

"Our assessment of VEB's average funding and moderate liquidity
reflects potential refinancing risks stemming from limited
capital market access due to the U.S. sanctions. We estimate
VEB's foreign currency-denominated debt due in 2017 will be $2.5
billion and about $2.4 billion 2018-2020. At the same time, we
believe that VEB will continue relying on the government to
refinance this debt in line with the track-record established in
2014-2017.

"Given VEB's high strategic importance to the government and
ongoing access to government support, we view the bank's
liabilities as resilient to a loss of market confidence. As of
Dec. 31, 2016, about 26.5% of the bank's liabilities stem from
the National Welfare Fund, the Russian government, and the
Central Bank of Russia."

The positive outlook mirrors that on Russia. Future rating
actions on VEB, positive or negative, will likely follow those on
the sovereign.

S&P said, "We might take a negative rating action over the next
12 months--even if the sovereign rating remains unchanged--if we
conclude that the implementation of the government's new strategy
for VEB, as well as government policies, had resulted in a weaker
public policy role for or weaker link with the state. For
example, this could be signaled by a rapidly rising risk of
material weakening of VEB's capitalization or liquidity."


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


EMPARK APARCAMIENTOS: S&P Affirms 'BB' CCR, Outlook Stable
-----------------------------------------------------------
S&P Global Ratings said it has affirmed its 'BB' long-term
corporate credit rating on Spanish car park operator EMPARK
Aparcamientos y Servicios, S.A. (Empark). The outlook is stable.

S&P said, "At the same time, we affirmed our 'BB' issue ratings
on the EUR235 million secured fixed-notes due December 2019 and
the EUR150 million secured floating rate notes due December 2019.
The recovery rating is unchanged at '4', reflecting our
expectations of average (30%-50%; rounded estimate: 45%)
recovery.

"The revision of the business risk profile assessment reflects
our opinion of Empark's relatively small size and small
diversification compared with other transportation infrastructure
peers. While Empark is a market leader in the Iberian Peninsula
in terms of parking spaces operated (about 530,000) and has been
successful in generating volume growth in the off-street
concessions business (+7% revenue growth in financial year 2016
on a like-for-like basis), with EBITDA of about EUR70 million, it
is relatively small compared with some other rated car park
operators, making it more vulnerable to potential changes in the
car park industry.

"In our view, Empark's size and limited geographic
diversification leave it more exposed to potential upcoming
challenges for the car park industry in the medium to long term.
For example, green policies promoted by local municipalities
could reduce growth opportunities in the on-street segment, which
contributes to about 15%-20% of Empark's EBITDA, while
developments in the automotive industry (such as connectivity,
electrification, and autonomous driving) and mobility patterns
(e.g., shared mobility) might reduce a long-term demand for
parking spaces or require car park operators to provide different
services. We think that large urban areas featuring a high number
of vehicles are particularly likely to adopt such new mobility
trends."

A relatively limited geographic spread in the markets served--
with almost 90% of total revenues generated in Spain and Portugal
and a specific focus on the cities of Madrid and Lisbon--
restricts the company's ability to respond to unfavorable trends
in developed markets by capturing growth opportunities overseas
in other countries with higher urbanization and car penetration
potential.

Furthermore, the company's exposure to on-street concessions and
contract management operations, which we don't consider
infrastructure business but rather as a provision of services,
has insulated the company from volume fluctuations, given the
typical fixed-fee remuneration of these contracts. However, this
is reflected in Empark's lower profitability (about 34%-35%
EBITDA margin), compared with peers that are more focused on
long-term off-street concessions.

S&P said, "Despite our revision of the business risk profile, the
company generated total revenue growth of 6% in 2016, translating
into 7%-8% adjusted EBITDA growth, mainly driven by volume growth
in the off-street concessions business. The contribution of the
on-street business weakened in 2016, with a 13% decline of EBITDA
in this segment to EUR11 million from about EUR13 million. We
understand this was driven by a few expired concessions, such as
one in Lisbon, which was not retendered by the municipality. We
expect the on-street segment to grow again in 2017, backed by a
few new concessions awarded and the completion of the ramp-up
phase of a new concession in Oporto, Portugal.

Given the almost stable amount of financial debt, EBITDA growth
has increased funds from operations (FFO) to debt to 8% in 2016
from 7% in 2015.

Overall, S&P expects Empark's credit metrics will continue
improving on the back of Spanish economic recovery and limited
concession maturities in the off-street segment, such as Plaza
d'Espa§a, which expired in 2017, and Plaza Mayor, expiring in
2018 (about EUR5 million combined EBITDA), which have not yet
been retendered and which have been replaced by few new
concessions awarded.

S&P's base-case forecast includes:

-- Annual revenue growth of about 3.0%-3.5% in 2017 and
    2.0%-2.5% in 2018, driven by Spanish and Portuguese GDP and
    consumer price index increases, as well as limited concession
    maturities;
-- Stable adjusted EBITDA margin at about 35%-36%;
-- Capital expenditures (capex) of about EUR28 million and EUR25
    million in 2017 and 2018;
-- Limited debt repayment of about EUR10 million in 2017 and
    2018; and
-- Stable capital structure and shareholder financial policies.

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

-- FFO to debt of 8%-9% in 2017 and 2018;
-- Debt to EBITDA of 6.5x-7.0x in 2017 and 2018; and
-- FFO cash interest coverage of 2.5x-3.0x in 2017 and 2018.

S&P said, "The stable outlook reflects our view that Empark will
be able to maintain adjusted FFO to debt at about 8%-9% and
adjusted debt to EBITDA below 7.5x over the next 12 months,
thanks to volume and price growth supported by favorable
macroeconomic conditions in the Iberian Peninsula. We expect the
company to promptly refinance the existing debt after the current
disposal process and that the new shareholders will not
materially affect the current capital structure and financial
policies.

"We could take a positive rating action if the company was able
to increase its FFO to debt ratio above 9%, while maintaining its
debt to EBITDA below 6.0x. In our view, this would require the
company to refinance the existing debt at favorable conditions
without materially increasing the leverage and, at the same time,
to continue delivering EBITDA growth.

"We could take a negative rating action if Empark's FFO to debt
was trending down to 6%. Given current favorable macroeconomic
conditions and limited concessions maturities, this is more
likely to result from a material increase in the company's
leverage, rather than from a drop in the company's EBITDA, in our
view."


FONDO UCI 10: S&P Affirms B- (sf) Rating on Class B Notes
---------------------------------------------------------
S&P Global Ratings affirmed its credit ratings in Fondo de
Titulizacion Hipotecaria UCI 10, Fondo de Titulizacion de Activos
UCI 11, and Fondo de Titulizacion Hipotecaria UCI 12.

S&P said, "The affirmations follow our credit and cash flow
analysis of the most recent transaction information that we have
received as part of our surveillance review cycle. Our analysis
reflects the application of our European residential loans
criteria, our current counterparty criteria, and our structured
finance ratings above the sovereign (RAS) criteria (see
"Methodology And Assumptions: Assessing Pools Of European
Residential Loans," published on Dec. 23, 2016, "Counterparty
Risk Framework Methodology And Assumptions," published on June
25, 2013, and "Ratings Above The Sovereign - Structured Finance:
Methodology And Assumptions," published on Aug. 8, 2016).

"Delinquencies have been stable since our previous full reviews
in November 2014 (see "Ratings Lowered In Spanish RMBS
Transactions UCI 10, 11, And 12 Following Application Of Updated
Criteria," published on Nov. 28, 2014)."

Severe delinquencies of more than 90 days are at 1.38% for UCI
10, 2.55% for UCI 11, and 2.39% for UCI 12, and are on average
lower for these transactions than our Spanish residential
mortgage-backed securities (RMBS) index report (see "Spanish RMBS
Index Report Q1 2017," published on June 1, 2017).

Collateral performance has remained relatively stable since mid-
2012, following an improvement after 2009. However, the asset
pools also include loans to borrowers under payment arrangements
and with capitalized amounts. S&P said, "Some of these loans are
not in arrears, but may be at higher risk of default, in our
view, and we have therefore considered performing arrangements in
our credit projections.

"When a pool exceeds both the threshold province and region
concentration limits, we apply the highest province adjustment.
We have applied the highest province adjustment in our analysis
of UCI 11, as the Las Palmas province and Canary Islands region,
where it belongs, exceed the maximum limits."

These transactions each feature an amortizing reserve fund. UCI
10's reserve fund is senior to the notes' amortization and the
interest deferral. UCI 11 and UCI 12's reserve funds are
subordinated to the notes' amortization in the priority of
payments. The reserve funds are at their target levels. Only UCI
10's has been able to amortize in the past due to the
transaction's stable performance. Although UCI 11 and UCI 12's
performance has been stable, 90+ days delinquencies have been
above the trigger levels for their respective reserve funds to
amortize. Of the outstanding balances of the notes, the reserve
funds represent 5.30% for UCI 10, 7.06% for UCI 11, and 3.45% for
UCI 12. The reserve funds have never been used and, given the
historical performance, we do not expect them to be used in the
future.

S&P said, "Since our previous review, available credit
enhancement has increased for the three transactions. The credit
enhancement for the class A notes has increased to 11.30% from
10.15%, to 23.05% from 18.87%, and to 16.44% from 13.95% for UCI
10, UCI 11, and UCI 12, respectively.

These improvements, together with the stable collateral
performance seen in these transactions, are not enough for them
to achieve higher ratings as the tightened inflows assumptions
and structural features constrain the available credit
enhancement for the notes. In particular in UCI 10, the reserve
fund is subordinated to the amortization of the notes, which,
together with the current pro rata amortization of the notes,
would make the notes more vulnerable to credit enhancement levels
in a stressful scenario.

"There is no swap in these transactions. We have therefore
applied our basis risk stress and margin compression assumptions.
These adjustments reflect the risk in the transactions that is
not mitigated because of the lack of a swap and that affects the
transactions' cash flows as inflows decrease and are not able to
pay the weighted-average cost of the notes plus the transactions'
fees at the current rating levels.

"The only counterparty risk is related to the guaranteed
investment contract (GIC) account, which is provided by Santander
UK PLC (A/Negative/A-1). The replacement language in the GIC
account agreements of these transactions is in line with our
current counterparty criteria.

In our opinion, the outlook for the Spanish residential mortgage
and real estate market is not benign and we have therefore
increased our expected 'B' foreclosure frequency assumption to
3.33% from 2.00%, when we apply our European residential loans
criteria, to reflect this view (see "Outlook Assumptions For The
Spanish Residential Mortgage Market," published on June 24,
2016). We base these assumptions on our expectation that economic
growth will mildly evolve, unemployment will remain high, and the
increase in house prices will slow down in the remaining of 2017
and 2018.

"Under our RAS criteria, we applied a hypothetical sovereign
default stress test to determine whether a tranche has sufficient
credit and structural support to withstand a sovereign default
and so repay timely interest and principal by legal final
maturity.

"Following the application of our relevant criteria, we have
determined that our assigned rating on each class of notes in
each transaction should be the lower of (i) the rating as capped
by our RAS criteria and (ii) the rating that the class of notes
can attain under our European residential loans criteria.

"We also consider credit stability in our analysis (see
"Methodology: Credit Stability Criteria," published on May 3,
2010). To reflect moderate stress conditions, we adjusted our
weighted-average foreclosure frequency assumptions by assuming
additional arrears of 8% for one- and three-year horizons, for
30-90 days arrears, and 90+ days arrears. This did not result in
our ratings deteriorating below the maximum projected
deterioration that we would associate with each relevant rating
level, as outlined in our credit stability criteria.

"Taking into account the results of our credit and cash flow
analysis, the application of our criteria, and the transactions'
counterparties, we have affirmed our ratings on all classes of
notes in in UCI 10, UCI 11, and UCI 12."

UCI 10, UCI 11, and UCI 12 are Spanish RMBS transactions, which
closed in May 2004, November 2004, and June 2005, respectively.
They securitize portfolios of residential mortgage loans, which
Union de Creditos Inmobiliarios, Establecimiento Financiero de
Credito originated, mainly through brokers, and services. The
residential mortgage loans are distributed among all Spanish
regions, mainly in Madrid, Andaluc°a, and Catalonia.

RATINGS LIST

  Class       Rating

  Rating Affirmed

  Fondo de Titulizacion Hipotecaria UCI 10
  EUR700 Million Mortgage-Backed Floating-Rate Notes

  A           BBB- (sf)
  B           B- (sf)

  Fondo de Titulizacion de Activos UCI 11
  EUR850 Million Mortgage-Backed Floating-Rate Notes

  A           A (sf)
  B           BB- (sf)
  C           B- (sf)

  Fondo de Titulizacion Hipotecaria UCI 12
  EUR900 Million Mortgage-Backed Floating-Rate Notes

  A           A+ (sf)
  B           B+ (sf)
  C           B- (sf)


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


NG GREEN: FINMA Initiates Bankruptcy Proceedings
------------------------------------------------
The Swiss Financial Market Supervisory Authority (FINMA) has
initiated bankruptcy proceedings against NG Green Trade AG.


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


ASA RESOURCE: Board Appoints Administrators
-------------------------------------------
On July 28, 2017, ASA Resource Group PLC disclosed that it had
requested a suspension of trading of its shares with immediate
effect pending clarification of the Company's financial position
and that the board of directors was taking advice from insolvency
practitioners as to the most appropriate course of action they
should take.

On July 30, 2017, having carefully considered the financial
position and prospects of the Company the board appointed
Mark Skelton -- mark.skelton@duffandphelps.com -- and Trevor
Birch -- trevor.birch@duffandphelps.com. -- of Duff & Phelps Ltd
as joint administrators (the "administrators") of the Company
with immediate effect.  The notice of appointment was filed at
Court on August 1, 2017.

It should be noted that at present the administrators will not
consent to a transfer of shares in the Company during the course
of the administration. If this changes shareholders will be
updated accordingly.

It is the current intention that the Company's subsidiaries
(together with Asa, the "Group") will continue to be managed by
their existing management teams so as to ensure that the
administration of the Company causes as little disruption as
possible to the day to day operations of those businesses.

One of the immediate tasks of the administrators will be to
undertake an investigation into the prior affairs of the Company.
This will include investigating the activities and banking
affairs of Asa Resource Group Inc and Asa Resource Group Limited
and the relationships and dealings between Asa and other
companies in the Group or third parties connected with the
Company or any other companies in the Group.  In addition to
investigating the activities set out above, the administrators
will work with the Group's key stakeholders to decide the best
way forward for the Group.

The administrators will make their reports to creditors and any
other applicable parties as soon as possible and in accordance
with their statutory duties arising under the provisions of the
Insolvency Act 1986.

Accordingly, pending the outcome of the administration process
and resolution and clarification of the group's financial
position, the Company's ordinary shares will remain suspended
from trading on AIM until further notice.

Further announcements will be made by the Company as appropriate.
Market Abuse Regulation (MAR) Disclosure

Certain information contained in this announcement would have
been deemed inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014 until the release of this
announcement.

Headquartered in London, United Kingdom, Asa Resource Group Plc
(Asa), formerly Mwana Africa Plc, is engaged in exploration,
development and production of gold, nickel, copper and diamonds.


FINSBURY SQUARE 2017-2: Fitch Assigns CCC Rating to Class D Notes
-----------------------------------------------------------------
Fitch Ratings has assigned Finsbury Square 2017-2 plc's notes
final ratings.

GBP350,320,000 Class A: 'AAAsf'; Outlook Stable
GBP18,220,000 Class B: 'AAsf'; Outlook Stable
GBP24,300,000 Class C: 'Asf'; Outlook Stable
GBP12,160,000 Class D: 'CCCsf'; Outlook Stable
GBP10,130,000 Class X: 'BB+sf'; Outlook Stable
GBP8,100,000 Class Z: not rated

The transaction is a securitisation of owner-occupied and buy-to-
let (BTL) mortgages originated in the UK by Kensington Mortgage
Company Limited.

KEY RATING DRIVERS

Near Prime Mortgages
Fitch believes Kensington's underwriting practices are robust and
that the lending criteria do not allow for any adverse credit 24
months before application. Kensington has a manual approach to
underwriting, focusing on borrowers with some form of adverse
credit or complex income. Historical book-level performance data
displays robust performance, although data is limited, especially
for BTL originations. Fitch assigned default probabilities using
its prime default matrix, while applying an upward lender
adjustment.

Increased BTL
This transaction is the first to feature loans originated under
Kensington's New Street Brand, which offers exclusively BTL
products. As a result the concentration of BTL loans in this pool
is higher than in previous Finsbury Square transactions. Fitch
has increased the foreclosure frequency of BTL loans by 25% in
line with its published criteria.

Prefunding Mechanism
The transaction contains a prefunding mechanism through which
further loans may be sold to the issuer with proceeds from over-
issuance of notes at closing standing to the credit of the pre-
funding reserves. Fitch has been provided with the closing pool,
alongside an additional pool containing further loans identified
for sale (the full pool). Fitch has rated the transaction by
reference to the asset levels using the full pool.

Product Switches Permitted
Borrowers are permitted to make one product switch during the
mortgage term without the seller being required to repurchase the
loan. Despite restrictions around the type and volume of product
switches permissible, these loans may earn a lower margin than
the reversionary interest rates under their original terms. Fitch
has analysed the effect of product switches by assuming the
weakest pool available under the product switch restrictions
within the transaction documents.

RATING SENSITIVITIES

Material increases in the frequency of defaults and loss severity
on defaulted receivables producing losses greater than Fitch's
base case expectations may result in negative rating action on
the notes. Fitch's analysis showed that a 30% increase in the
weighted average foreclosure frequency, along with a 30% decrease
in the weighted average recovery rate, would imply a downgrade of
the class A notes to 'A+sf' from 'AAAsf'.


FINSBURY SQUARE 2017-2: Moody's Assigns B3 Rating to Cl. D Notes
----------------------------------------------------------------
Moody's Investors Service has assigned definitive long-term
credit ratings to the Notes issued by Finsbury Square 2017-2 plc:

-- GBP350.32M Class A Mortgage Backed Floating Rate Notes due
    September 2065, Definitive Rating Assigned Aaa (sf)

-- GBP18.22M Class B Mortgage Backed Floating Rate Notes due
    September 2065, Definitive Rating Assigned Aa1 (sf)

-- GBP24.3M Class C Mortgage Backed Floating Rate Notes due
    September 2065, Definitive Rating Assigned Aa3 (sf)

-- GBP12.16M Class D Mortgage Backed Floating Rate Notes due
    September 2065, Definitive Rating Assigned B3 (sf)

-- GBP10.13M Class X Floating Rate Notes due September 2065,
    Definitive Rating Assigned Ba2 (sf)

Moody's has not assigned rating to the GBP 8.1 M Class Z Floating
Rate Notes due September 2065, which was also 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 sold the
portfolio to Finsbury Square 2017-2 plc. Approximately 93.4% of
the definitive pool (which includes loans to be sold to Finsbury
Square 2017-2 plc after the Issue Date) 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 72.54%, (iii) the very low seasoning of
0.33 years, (iv) the proportion of interest-only loans (29.4%);
(v) the proportion of buy-to-let loans (28.0%); 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 consists of GBP 300 million
of loans, and additional GBP 105 million of loans will be sold to
Finsbury Square 2017-1 plc as part of prefunding after closing.
The Reserve Fund is 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 acts as servicer and cash manager of the pool from
the closing date and sub-delegates certain primary servicing
obligations to Acenden and HML. KMC has the option to leave the
servicing of the loans originated between December 19, 2013 and
May 29, 2015 with HML or migrate these loans at a future date to
Acenden. In order to mitigate the operational risk, there is 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) acts 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 is 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

99.3% of the loans in the definitive pool are fixed-rate
mortgage, which will revert to three-month sterling LIBOR plus
margin between November 2017 and May 2022. 0.7% of the loans in
the definitive 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, acts 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 Aa3(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
B3(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) assuming MILAN CE
increased to 19.2% and expected loss increased to 3.0% 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 definitive 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.


FIRST FLEXIBLE NO.7: S&P Affirms B- (sf) Rating on Class C Notes
----------------------------------------------------------------
S&P Global Ratings affirmed its credit ratings on First Flexible
(No. 7) PLC's class A, B, and C notes.

S&P said, "Today's affirmations follow our credit and cash flow
surveillance analysis under our European residential loans
criteria and our criteria for assigning 'CCC' category ratings
(see "Methodology And Assumptions: Assessing Pools Of European
Residential Loans," published on Dec. 23, 2016, and "Criteria For
Assigning 'CCC+', 'CCC', 'CCC-', And 'CC' Ratings," published on
Oct. 1, 2012).

"Collateral performance has improved since our previous review,
with the level of arrears greater than three months declining to
2.09% from 3.16% (see "All Ratings Affirmed In U.K. RMBS
Transaction First Flexible (No. 7) Following Review," published
on July 31 2014). Total delinquencies have also declined over the
same period to 3.93% from 6.78%. Although this is a noticeable
improvement for the transaction, it still underperforms our U.K.
residential mortgage-backed securities (RMBS) prime index (see
"U.K. RMBS Index Report Q1 2017," published on June 1, 2017).

"Despite the improved asset performance, the volume of interest-
only loans that have matured and not paid down their principal
balance has increased to approximately 13%, compared with 9% at
our previous review. In our analysis, we apply a 100% foreclosure
frequency to these matured loans.
Since our previous review, we have observed an increase in the
weighted-average foreclosure frequency (WAFF) in all rating
scenarios apart from the 'BBB', 'BB', and 'B' rating stress
levels. In addition, we have observed an increase in the
weighted-average loss severity (WALS) in all rating scenarios."

  Rating      WAFF (%)        WALS (%)           Loss
  level                                  coverage (%)
  AAA            25.81            9.64           2.49
  AA             22.64            5.76           1.30
  A              20.50            2.54           0.52
  BBB            18.85            2.00           0.38
  BB             17.11            2.00           0.34
  B              16.46            2.00           0.33

The increase in the WAFF for rating scenarios at and below 'BBB'
is due to the increase in the volume of matured loans. At rating
levels above 'BBB', the impact of the matured loans is offset by
the improved asset performance and increased seasoning. The
increase in the WALS is due to the increased repossession market
value declines in all rating scenarios and the need to ensure
that the loss coverage floor is met.

Even though the matured loans have materially deteriorated, the
transaction's performance parameters have generally improved
since our previous review. As a result, the available credit
enhancement for the class A notes has increased to a level
commensurate with the currently assigned rating. In addition, the
pool has paid down to a 6% pool factor (the outstanding
collateral balance as a proportion of the original collateral
balance). S&P said, "Due to the low pool factor and the
nonamortizing reserve fund being fully funded, the class A notes
will now build up credit enhancement at a faster rate. We have
therefore affirmed our 'AAA (sf)' rating on the class A notes.

"In our analysis, the class B and C notes are unable to withstand
the stresses that we apply at the 'B' rating level. Our outlook
for the U.K. residential mortgage market remains benign with
historically low unemployment (currently 4.5%), low mortgage
interest rates, and falling or stable delinquencies across the
sector. Taking these factors into account, along with improving
collateral performance and increasing credit enhancement, we have
affirmed our 'B- (sf)' ratings on the class B and C notes. We do
not believe these notes are reliant upon favorable business,
financial, or economic conditions to redeem."

First Flexible (No. 7) is a U.K. RMBS transaction that
securitizes residential and commercial mortgages that Mortgages
Trust originated.

RATINGS LIST

  Class              Rating
            To                  From

  Ratings Affirmed

  First Flexible (No. 7) PLC
  GBP 268.6 Million Mortgage-Backed Floating-Rate Notes

  A         AAA (sf)
  B         B- (sf)
  C         B- (sf)


GALAXY FINCO: S&P Affirms 'B' Corp Credit Rating, Outlook Stable
----------------------------------------------------------------
S&P Global Ratings said it has affirmed its 'B' long-term
corporate credit rating on U.K.-based warranty services provider
Galaxy Finco Ltd. (trading as Domestic & General; D&G) and core
financing subsidiary Galaxy Bidco Ltd. The outlook is stable.

S&P said, "At the same time, we affirmed our 'B' issue rating on
the GBP 175 million senior secured floating rate notes maturing
in 2019 and the GBP 200 million senior secured notes maturing in
2020, issued by Galaxy Bidco. The recovery rating on both the
senior secured floating rate notes and the senior secured notes
is '4', indicating our expectation of average recovery prospects
(30%-50%; rounded estimate: 45%) in the event of a payment
default.

"We also affirmed our 'CCC+' issue rating on the GBP 125 million
senior notes maturing in 2021, issued by D&G. The recovery rating
on the senior notes is '6', indicating our expectation of
negligible (0%-10%; rounded estimate: 0%) recovery for lenders in
the event of a payment default."

The affirmation primarily reflects D&G's stable operating
performance in financial 2017 (ending March), with revenue growth
of about 11% driven by new contract wins in the U.K. and growth
in international markets. Adjusted EBITDA margins fell to about
13%, however, due to D&G's investments in a new digitization
strategy aimed at enhancing service quality and maintaining its
leading position in the U.K. market. The company returned to
positive free operating cash flow (FOCF) generation in financial
2017 after two years of negative FOCF, owing to working capital
investments designed to raise customer renewal rates.

D&G's S&P Global Ratings-adjusted debt to EBITDA in financial
2017 was about 9.0x, including shareholder loans and preference
shares (5.6x excluding them); its funds from operation (FFO) cash
interest coverage was about 2.5x; and FOCF to debt was about
2.5%. S&P said, "Our highly leveraged financial risk profile
assessment is constrained by D&G's tolerance for highly leveraged
capital structures due to its private equity ownership.

"Our business risk profile assessment continues to reflect D&G's
leading position in the niche and mature U.K. warranty market,
longstanding contracts with original equipment manufacturers, and
relatively good customer retention rates that lead to good
revenue visibility. However, our assessment is constrained by
D&G's geographic concentration in the U.K. and its reliance on a
few customers.

"D&G generated about 40% of group EBITDA from its insurance
business. We incorporate our view of D&G's insurance business
into our overall assessment of the company's business risk
profile but, due to an error, we previously analyzed the group's
insurance business under our corporate criteria rather than under
our insurance criteria. We have now corrected this error, and the
correction did not result in any change to our 'B' corporate
credit rating or to our assessment of D&G's business risk
profile."

S&P's base case assumes:

-- Group revenue growth of 4%-6% in financials 2018 and 2019,
    compared with expected growth of about 11% for financial 2017
    and 12% in financial 2016, as demand in the U.K. remains
    solid but becomes slightly softer amid the uncertainties
    around the potential impact of Brexit negotiations on
    economic conditions; Moderately decreasing EBITDA margins of
    about 1%-2% for financials 2018 and 2019 of about 13% due to
    growth in the international market; and
-- Stable capital expenditure (capex) at about 2% of revenues
    and lower working capital requirements owing to a shift
    toward subscription business.

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

-- S&P Global Ratings-adjusted debt to EBITDA of about 8x-9x in
    financials 2018 and 2019 (about 5x-6x excluding shareholder
    loans and preference shares);
-- FFO cash interest coverage ratio of about 2.0x-3.0x in
    financials 2018 and 2019; and
-- FOCF to debt remaining positive at about 1%-2%, following
    negative FOCF generation in financials 2015 and 2016, when
    the group incurred significant cash outflows related to
    working capital build-ups.

S&P said, "The stable outlook reflects our view that D&G should
continue to see robust demand for its services over the next 12-
18 months, and that the group will manage to maintain FOCF
generation above zero, and FFO cash interest coverage above 2x.

"We could lower the ratings if D&G experienced further material
margin constraints, or poorer cash flows, leading to negative
FOCF generation and FFO cash interest coverage of below 2x. We
could also consider lowering the ratings following debt-funded
acquisitions or increased shareholder returns.

"We believe that the likelihood of an upgrade is limited at this
stage, because of D&G's high tolerance for aggressive financial
policies and very high leverage. We could raise the ratings if
D&G's credit metrics improved to levels we view as commensurate
with an aggressive financial risk profile. More specifically, an
upgrade would require the group to improve its adjusted FFO to
debt to more than 12% and its adjusted debt to EBITDA to less
than 5x (including shareholder loans and preference shares), with
clear evidence that these improvements were sustainable."


OSPREY ACQUISITIONS: Fitch Affirms 'BB' IDR, Outlook Stable
-----------------------------------------------------------
Fitch Ratings has affirmed Osprey Acquisitions Limited's Long-
Term Issuer Default Rating (IDR) at 'BB' and its senior secured
rating at 'BB+'. The Outlook on the Long-Term IDR is Stable.

The affirmation and Stable Outlook reflect the adequate dividend
capacity of Anglian Water Services Limited (Anglian Water or the
operating company (OpCo); A/BBB+/Stable) in comparison with the
debt service requirements of Osprey, adequate credit metrics, and
an expected reduction of the subordination of investors at the
Osprey level.

The rating also takes into account the market-leading operational
and regulatory performance of Anglian Water (see separate rating
action commentary "Fitch Affirms Anglian Water's Senior Secured
Debt at 'A/BBB+'; Outlook Stable", on www.fitchratings.com), the
main operating subsidiary of the group, as well as the
structurally and contractually subordinated nature of the
holding-company financing at the Osprey level.

Osprey is the holding company of Anglian Water, one of 10
appointed regulated water and sewerage companies in England and
Wales. Anglian Water (Osprey) Financing Plc (AWOF) is the
financing vehicle for Osprey.

KEY RATING DRIVERS

Adequate Dividend Cover: For AMP6, Fitch forecasts average
dividend cover of around 3.3x and average post-maintenance and
post-tax interest cover (PMICR) at around 1.2x. Fitch also
forecast Osprey will reduce gearing to around 85% of pension-
adjusted net debt/regulatory asset value (RAV) by 2020. For the
year ended March 31, 2017 (FY17) Fitch calculates Osprey's
dividend cover at 3.5x, pension-adjusted net debt/RAV at 86.5%,
and PMICR at 1.3x.

Reduced Subordination at HoldCco: Osprey's guaranteed bondholders
are subordinated to the rights of Anglian Water's bondholders. In
addition, Anglian Water's covenanted financing structure could
limit the dividends it upstreams and there is a statutory (and
contractual) limitation on the pledging of its assets to any
creditors. As Anglian Water's leverage declines during AMP6, the
subordination of Osprey's bondholders also declines as the OpCo
is further away from lock-up covenant levels.

Incremental Debt at HoldCo: The GBP450 million of debt at the
holding level represents around 6% of RAV and incurs an annual
finance charge of around GBP27 million on average for FY18 to
FY20. Fitch expects the dividend stream from the OpCo for the
remainder of the price control to comfortably allow servicing of
the debt. Osprey group also has in place GBP125 million of
committed undrawn liquidity facilities. Fitch see little
refinancing risk from the maturity of the GBP240 million bond in
January 2018 considering an additional liquidity facility (GBP240
million) put in place in March 2017.

Reliance Upon OpCo's Dividends: The OpCo is the main cash flow
source for Osprey. Therefore, Osprey and AWOF's debt service
relies upon dividends from Anglian Water. The OpCo's dividends
could be constrained by higher-than-covenanted OpCo leverage,
which is now a decreasing risk, low annual RPI used to index
revenue, and the regulated asset value (thereby constraining debt
capacity to pay dividends) and general cash-flow demands such as
capex. However, Fitch does not currently envisage any of these
factors will constrain dividends.

DERIVATION SUMMARY

The higher rating of Osprey compared to peers such as Greensands
UK Limited (B+/Stable) and Kemble Water Finance Limited (BB-
/Stable) reflects Anglian Water's better financial and regulatory
performance. Parent/subsidiary Linkage is applicable, but given
the structural and contractual ring-fence structure of the group
it does not impact the ratings.

KEY ASSUMPTIONS

Fitch's key assumptions within Fitch ratings case for Anglian
Water include:
- regulated revenues in line with the final determination of
   tariffs for April 2015 to March 2020, ie assuming no material
   over- or under- recoveries;
- combined totex outperformance and Outcome Delivery Incentive
   leakage outperformance of GBP110 million in nominal terms for
   FY18 to FY20;
- GBP100 million of additional capex to be reinvested into the
   business over FY18 to FY20 from totex efficiencies;
- slight underperformance in retail costs;
- non-regulated EBITDA of around GBP7 million per annum;
- retail price inflation of 3.1% for FY17, and 3% thereafter;
- around GBP6 million of EBITDA reduction per annum from FY18 to
   FY20 as a result of the exit of the non-household retail
   business;
- no outperformance related to Outcome Delivery Incentives
   except for leakage as the company has deferred them to AMP7.

In addition, for Osprey Acquisitions Fitch assume:
- incremental debt at holding-company level to remain at GBP450
   million;
- an annual finance charge at the holding company level on
   average around GBP27 million for FY18-FY20.

RATING SENSITIVITIES

Future Developments That May, Individually or Collectively, Lead
to Positive Rating Action
- The ratings currently do not have any upside. A higher rating
   for the holding company would be contingent on Anglian Water
   materially reducing its regulatory gearing.

Future Developments That May, Individually or Collectively, Lead
to Negative Rating Action
- A sustained drop of expected dividend cover below 3x, for
   example due to RPI remaining materially below 1.5% over an
   extended period of time
- Forecast group gearing above 85% for a sustained period,
   coupled with forecast dividend cover dropping to close to 3x
- A marked deterioration in operating and regulatory performance
   of Anglian Water or a material change in business risk of the
   UK water sector

LIQUIDITY

As of March 31, 2017, Osprey held GBP19.5 million in cash, and
AWOF had available GBP125 million of undrawn, committed bank
facilities with maturity in 2020. This is sufficient to bridge
short-term liquidity needs. For debt service, Osprey and AWOF
effectively rely on upstream cash flows from their operating
subsidiaries, primarily Anglian Water. The next bond maturity is
for GBP240 million in January 2018, for which, the company has
put in place a loan to bond bridge facility of GBP240 million in
March 2017 to mitigate refinancing risk.

FULL LIST OF RATING ACTIONS

Osprey Acquisitions Limited
-- Long-Term IDR affirmed at 'BB'; Stable Outlook
-- Senior secured rating affirmed at 'BB+';

Anglian Water (Osprey) Financing Plc
-- Senior Secured bonds issued by AWOF at 'BB+'. The bonds are
    guaranteed by Osprey, and are thus rated in line with
    Osprey's senior secured rating.



                            *********

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

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


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

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

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

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

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

The TCR Europe subscription rate is US$775 per half-year,
delivered via e-mail.  Additional e-mail subscriptions for
members of the same firm for the term of the initial subscription
or balance thereof are US$25 each.  For subscription information,
contact Peter Chapman at 215-945-7000 or Joseph Cardillo at
856-381-8268.


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