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

                           E U R O P E

          Wednesday, October 11, 2017, Vol. 18, No. 202


                            Headlines


B E L A R U S

BELARUS REPUBLIC: S&P Raises LT Sovereign Credit Ratings to 'B'
EUROTORG LLC: Fitch Assigns 'B-(EXP)' LT Issuer Default Rating
EUROTORG LLC: S&P Assigns Prelim 'B-/B' CCR, Outlook Stable


C R O A T I A

AGROKOR DD: Failed to Report HRK3.9 Billion of Liabilities


G E R M A N Y

AIR BERLIN: To Cease Flight Operations by October 28


I R E L A N D

ST PAUL IV: Fitch Assigns 'B-(EXP)' Rating to Class E Notes


I T A L Y

BANCA CARIGE: Fitch Keeps B- LT IDR on Rating Watch Negative
BANCA IFIS: Fitch Assigns BB(EXP) Rating to Sub. Tier 2 Notes
CIRENE FINANCE: S&P Lowers Class E CMBS Notes Rating to D (sf)


L U X E M B O U R G

ALTICE FINCO: Moody's Rates EUR675MM Senior Unsecured Notes B3
BANQUE INT'L: Moody's Assigns Ba2(hyb) Rating to AT1 Securities


M O N T E N E G R O

MONTENEGRO: S&P Alters Outlook to Stable, Affirms 'B+/B' Ratings


N E T H E R L A N D S

JUBILEE CLO 2014-XII: Moody's Assigns B2 Rating to Cl. F Notes


P O R T U G A L

NOVO BANCO: Moody's Confirms Caa2 LT Sr. Unsec. Debt Ratings


R U S S I A

KARELIA REPUBLIC: Fitch Affirms B+ LT Issuer Default Ratings
MOSCOW REGION: Fitch Affirms BB+ Long-Term IDR, Outlook Positive
OTKRITIE BANK: Posts RUR350-Bil. Balance Sheet Hole


U N I T E D   K I N G D O M

CFG HOLDINGS: S&P Affirms 'B' Issuer Credit Ratings
ENSCO PLC: Moody's Lowers Corporate Family Rating to B2
INOVYN LIMITED: Moody's Hikes CFR to B1, Outlook Stable
MONARCH AIRLINES: Pilot Union Calls for Probe Into Collapse
MONARCH AIRLINES: Grayling in Talks with Credit, Debit Card Firms


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B E L A R U S
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BELARUS REPUBLIC: S&P Raises LT Sovereign Credit Ratings to 'B'
---------------------------------------------------------------
S&P Global Ratings raised its long-term local and foreign
currency sovereign credit ratings on the Republic of Belarus to
'B' from 'B-'.

At the same time, S&P affirmed the local and foreign currency
short-term ratings at 'B'. The outlook on the long-term ratings
is stable.

OUTLOOK

S&P said, "The stable outlook reflects our expectation that
Belarus' external imbalances will reduce moderately while the
fiscal stance remains comparatively tight over the next 12
months. It is also based on our expectation that the government
will be able to successfully implement refinancing plans for debt
falling due beyond 2018.

"We could consider lowering the ratings if the government's
refinancing plans came under threat in the future, for example
due to a reversal of political and economic support from Russia.
We could also take a negative rating action if contingent fiscal
risks from the banking or public enterprise sectors were to
crystalize at higher levels than we expect on the sovereign
balance sheet.

"We could consider an upgrade if Belarus implemented a credible
reform program that resulted in a substantial reduction of the
country's external vulnerabilities, and addressed weaknesses in
the public enterprise and bank sectors."

RATIONALE

S&P said, "The upgrade reflects Belarus' economic growth
exceeding our expectations. Although the expansion of output
throughout 2017 is mainly due to cyclical rather than structural
factors, we believe it is nevertheless positive for sovereign
reditworthiness. In our view, the stronger growth forecast over
the next four years will support better fiscal performance and
the standing of the
banking system."

In addition, the upgrade takes into account Belarus' securing of
foreign financing, which should allow it to meet the upcoming
external public debt payments in 2018. Through two Eurobond
issues amounting to a combined $1.4 billion in June this year,
Belarus has also managed to beef up its gross foreign exchange
reserves, providing a short-term balance-of-payments buffer.

S&P's ratings on Belarus are primarily supported by the potential
for financial assistance from the Russian government, which has
been extended multiple times in the past despite occasional
disputes between the two countries.

Still, the ratings are constrained by the country's low
institutional effectiveness, vulnerable fiscal and balance of
payments positions, and the limited effectiveness of the monetary
policy conducted by the National Bank of the Republic of Belarus
(NBRB; the central bank).

Institutional and Economic Profile: Growth set to moderately
strengthen as trade partners' economic performance firms up

-- S&P expects a cyclical strengthening in Belarus' economy,
    largely reflecting the better anticipated performance of key
    trade partners.

-- Growth is also supported by a normalization of relations with
    Russia following the resolution of the gas price dispute.

-- The domestic institutional environment remains weak,
    characterized by high centralization of power and limited
    checks and balances between state institutions.

According to official estimates, the economy of Belarus expanded
by 1.6% over the first eight months of 2017 in year-on-year
terms. Having previously forecast no growth, S&P now anticipates
full-year growth of 1.8%. In S&P's view, several factors underpin
the stronger macroeconomic dynamics.

S&P said, "First, we believe headline growth has been supported
by the normalization in the bilateral relations between Russia
and Belarus. A dispute previously arose after Belarus
unilaterally reduced the price it pays for Russian gas, after
which Russia responded by lowering the amount of duty-free oil
supplied to Belarus' export-oriented refineries. We understand
that following its apparent resolution earlier in April, the
supplies of oil have picked up, contributing to growth in
industrial output of over 6% year-on-year through August. Our
baseline forecast is that bilateral relations will remain stable
over the medium term, although they have tended to be volatile in
the past and the emergence of new disputes cannot be ruled out.

"Second, we consider that the economic performance of Belarus'
trade partners is gradually strengthening. Russia plays an
important role here as well, as a key market where close to 50%
of Belarus' goods are exported. We forecast that growth in Russia
will average close to 2% over 2017-2020 following two years of
recession. Firmer growth in the EU should also favor cyclical
recovery in Belarus.

"Nevertheless, beyond cyclical developments, we see limited
potential for structural growth improvements. Belarus issued a
Eurobond in June and, following the warming of relations with
Russia, was able to receive a $700 million bilateral loan.
Furthermore, financing from the Eurasian Fund for Stabilization
and Development (EFSD) resumed. We estimate that these resources
should allow the government to meet its debt repayments in 2018.
As such, the need to engage in a funded IMF program has
diminished and, consequently, the incentives to implement major
structural reforms have also likely reduced.

"In our view, over the last few years the authorities have taken
several important policy steps, including adhering to a tighter
fiscal policy and transitioning to a more flexible exchange rate
arrangement. Nevertheless, we believe that several fundamental
weaknesses are still characteristic of Belarus and as such
constrain the country's development prospects. These include the
state's pervasive role in the economy, which ultimately results
in an inefficient allocation of resources and the existence of a
multitude of lossmaking public enterprises. Consequently,
although strengthening, Belarus' growth rates would still remain
below those of countries with a similar level of economic
development.

"More broadly, Belarus' institutional effectiveness remains weak,
with President Alexander Lukashenko controlling the government's
branches of power.

High centralization of power makes policymaking difficult to
predict and we believe there are only limited checks and balances
in place between various state institutions. The so-called
"unemployment tax" sparked public protests at the beginning of
the year, but they have since subsided. We do not anticipate any
major changes in Belarus' political arrangements over the next
few years."

Flexibility and Performance Profile: Balance-of-payments
vulnerabilities remain a key risk

-- Balance-of-payments risks remain a key factor constraining
the sovereign ratings.

-- Although fiscal policy will remain tight, public debt will
continue to grow, reflecting the projected moderate currency
weakening and crystallizing contingent liabilities.

-- Monetary flexibility is constrained owing to the limited
independence of the National Bank of Belarus, underdeveloped
local capital markets and high levels of dollarization.

Belarus' balance of payments vulnerabilities remain the key
constraint on S&P's sovereign ratings. Although the headline
current account deficits are comparatively modest (averaging
around 4% of GDP over the last three years), the economy's
external debt net of liquid public and financial sector foreign
assets is high at a projected 83% of current account receipts in
2017. Belarus consistently faces elevated external financing
requirements. The bulk of the country's gross external debt
pertains to the public sector and is characterized by a heavy and
uneven debt service profile with repayment peaks every few years.

Following the resolution of disputes with Russia, Belarus managed
to secure a $700 million bilateral loan and received further
disbursements from the EFSD. The government also issued two
Eurobonds amounting to $1.4 billion in total, with maturities of
five and 10 years. As such, S&P estimates that the liquidity at
hand will cover the majority of public external debt payments for
2018. Beyond that, attracting additional resources will be
required given the additional repayments coming up in 2019.

S&P said, "Absent foreign financing, we view Belarus' own
external buffers as weak. We note that as of September 2017,
NBRB's gross foreign exchange (FX) reserves totaled about $7
billion. However, the NBRB has FX obligations to domestic banks
of about $2 billion and a government FX deposit of around $4
billion, underpinned by a recent bond issuance. The government
will draw on its deposits with NBRB to meet the Eurobond $800
million payment in January 2018.

"Beyond that, we believe the government may not be able to deploy
its resources at the NBRB in full, given the necessity to
maintain a balance of payments buffer. We also note that in
addition to the obligations highlighted above, NBRB has external
debt of around $1.4 billion booked on its balance sheet.

"In our view, continued support from Russia remains central to
Belarus' ability to service its commercial debt. By support we
primarily mean favorable trade conditions, such as continued
supply of hydrocarbons at attractive prices, and the willingness
to refinance existing debt. We note that as of end-2016 Russia
accounted for around 50% of Belarus' total public sector external
debt. We currently expect bilateral relations to remain stable
over the medium term, although downside risks exist.

"We believe Belarus' fiscal position remains weak. Although the
general government sector has posted headline surpluses averaging
an estimated 1% of GDP over the past five years, debt has been
increasing at a considerably faster pace, averaging over 6% of
GDP annually over the same time period. This has been primarily
due to the depreciation of the local currency (given that over
90% of government debt is denominated in foreign currency) as
well as some contingent liabilities materializing. We note that
the government cleaned up the balance sheets of several banks
throughout 2015 and 2016 by swapping nonperforming loans in the
wood processing and agricultural sectors for central and local
government bonds. We estimate that the gross government debt
reached 41.5% of GDP in 2016.

"In our view, the domestic banking system remains strained and
consequently it poses a moderate contingent liability for the
government, which may need to undertake more balance sheet clean-
ups in the future (see "Banking Industry Country Risk Assessment:
Belarus," published on May 18, 2017, on RatingsDirect). Coupled
with a projected further moderate weakening of the currency, we
believe general government debt will continue to increase faster
than the headline fiscal deficits imply even given the relatively
tight fiscal stance.

"Our ratings on Belarus remain constrained by the limited
effectiveness of the country's monetary policy. Although
transitioning to a more flexible exchange rate arrangement has
allowed NBRB to relieve some external pressures, its ability to
influence domestic economic conditions remains restricted. In our
view, the institution still lacks independence in key decisions
while the weak position of the banking system and very high
deposit and loan dollarization inhibit the monetary transmission
channel.

"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 the fiscal flexibility assessment and
debt burden assessment had improved. All other 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
  Belarus (Republic of)
   Sovereign Credit Rating
  Foreign and Local Currency       B/Stable/B      B-/Stable/B
  Transfer & Convertibility Assessment   B              B-
  Senior Unsecured
   Foreign and Local Currency            B              B-


EUROTORG LLC: Fitch Assigns 'B-(EXP)' LT Issuer Default Rating
--------------------------------------------------------------
Fitch Ratings has assigned Belarus-based Eurotorg LLC an expected
Long-Term Issuer Default Rating (IDR) of 'B-(EXP)' with a Stable
Outlook. At the same time, Fitch has assigned an expected rating
of 'B-(EXP)'/'RR4' to Eurotorg's proposed five-year loan
participation notes (LPNs). The assignment of final ratings is
contingent on the successful placement of LPNs and refinancing of
Eurotorg's short-term debt maturities. Final documents should
conform to information already received.

The LPNs will be issued by Bonitron Designated Activity Company,
an SPV domiciled in Ireland. The SPV will be limited to issuing
the notes and providing a loan to Eurotorg. The notes will be
secured by a loan to Eurotorg, which will rank equally with other
senior unsecured obligations of Eurotorg.

The 'B-(EXP)' IDR reflects Fitch views that even after the
intended refinancing, which should improve Eurotorg's liquidity
position, the company's financial flexibility is limited by
significant FX risks and a currently high debt burden.
Positively, the rating is supported by Eurotorg's strong business
profile, underpinned by the company's unrivalled position in
Belarusian food retail market, limited entry threat from
international chains, solid profitability and some growth
opportunities arising from the low penetration of modern retail
in the country.

KEY RATING DRIVERS

Largest Food Retailer in Belarus: The rating is supported by
Eurotorg's strong market position as the largest food retailer in
Belarus with a 19% market share by sales in 1H17. This ensures
strong bargaining power with suppliers and should help Eurotorg
preserve its gross margin and win market share from traditional
retail, which accounts for 55% of retail sales in the country.
Although the company is large by Belarusian standards, its
absolute scale (2016 EBITDAR of around USD170 million) is smaller
than other Fitch-rated food retailers and commensurate only with
a 'B' rating category.

Material FX Exposure: Limited financial flexibility stems from an
inherent, material mismatch between the currencies of Eurotorg's
profits and debt. As a company with only domestic operations,
Eurotorg generates its profits in Belarusian roubles, while over
80% of its debt is in hard currency. In addition, the company's
operating lease agreements are in euros, though it has some
negotiation power with landlords in case of sharp local currency
depreciation. In Fitch sensitivity analysis, a depreciation of
the local currency of a similar magnitude seen in 2015/16 would
push leverage higher by 1x, partly mitigated by rising inflation
in such scenario.

LfL Sales Growth to Accelerate: Fitch projects Eurotorg's like-
for-like (LfL) sales growth to accelerate to mid-single digits
due to Fitch expectations of stabilisation of consumer sentiment
as Belarus' GDP resumes growth. The company's LfL sales grew a
modest 1% over 2015-1H17 due to weak consumer spending, sales
cannibalisation from rapid expansion in 2014-2016 and, most
recently, a nationwide marketing campaign. Fitch assumes that
none of these factors would have a material impact on sales over
2018-2020.

EBITDA Margin Growth: Based on management accounts, Eurotorg's
EBITDA margin increased to 9% in 1H17 (1H16: 5.5%) due to
marketing activities and, to a greater extent, better terms from
suppliers achieved at the expense of shorter payables days. Fitch
expects Eurotorg to maintain EBITDA margins at around current
levels over the medium term. This is based on Fitch assumptions
that cost efficiencies (especially in personnel expenses) would
offset growth in operating lease expenses as the company opens
new stores mostly on leasehold premises.

FCF Partly Mitigates Refinancing Risks: Fitch expects Eurotorg to
generate positive free cash flow (FCF) at around 2%-3% of sales
over 2017-2020, due to moderate expansionary capex and projected
stable operating performance. Fitch also assumes that
shareholders would stay committed to the company's deleveraging
and accumulation of cash buffer ahead of the LPNs' repayment over
2021-2022.

High Leverage to Decrease: Over 2013-2016 Eurotorg's funds from
operations (FFO)-adjusted gross leverage had been within 5.5x-
6.0x, which is commensurate with food retail peers in the 'B'
rating category. Nevertheless, Fitch views these leverage levels
as high for Eurotorg, given the company's inherent FX exposure
and challenging operating environment in Belarus. Fitch ratings
assumes that Eurotorg's FFO adjusted gross leverage would fall
below 4x over the next three years due to stabilisation in FX
exchange rates and mild growth in consumer spending. However,
deleveraging is contingent on the Belarusian rouble not
depreciating sharply against the US dollar, the major currency of
Eurotorg's debt.

Limited Diversification: Eurotorg operates grocery and consumer
electronics stores but the latter is immaterial relative to its
core food retail operations and thus provides little
diversification benefit. Geographic diversification is also
limited as the company operates only in Belarus. Eurotorg's
presence across different regions of the country puts the company
in a better position than competitors but does not reduce
concentration risks as Belarus is a small economy.

Weak Corporate Governance: Eurotorg's lack of adherence to best
corporate governance practices is a weakness for the company's
credit profile. Eurotorg is a private company with limited
information disclosure and key-man risk from two dominant
shareholders. In addition, its financials have multiple
restatements. A prudent financial policy targeting net
debt/EBITDA of 3.0x and dividend suspension after 2014 provide
some credit support. Fitch therefore views corporate governance
practices as neutral to the rating.

DERIVATION SUMMARY

Eurotorg's market position and bargaining power in Belarus is
stronger than Russian peers X5 Retail Group N.V. (BB/ Stable),
Lenta LLC (BB/ Stable) and O'Key Group S.A. (B+/ Stable). This is
due to the large distance in market shares between Eurotorg and
its next competitor and significant price advantage. However, in
absolute terms based on annual EBITDAR, Eurotorg is substantially
smaller than Russian peers. In addition, it has weaker credit
metrics, more limited access to liquidity and, in contrast to
Russian peers, material exposure to FX risks, which substantially
reduces the company's financial flexibility.

KEY ASSUMPTIONS

Fitch's key assumptions within Fitch ratings case for the issuer
include:
- BYN/USD at 2.04 in 2017, 2.16 in 2018 and 2.31 in 2019;
- 4% selling space CAGR over 2017-2020;
- 9% revenue CAGR over 2017-2020;
- EBITDA margin at 8.6%-8.7%;
- Investment in working capital of around BYN100 million in
   2017;
- Capex around 1.5% of revenue over the next four years;
- No dividends until net debt-to-EBITDA falls below 3x; and
- No M&A.

RATING SENSITIVITIES

Future Developments That May, Individually or Collectively, Lead
to a Change of Outlook to Positive
- FFO-adjusted gross leverage sustainably below 4.5x (2016:
   5.5x) and FFO fixed charge coverage trending towards 2x (2016:
   1.4x).
- Sustained positive FCF and maintenance of conservative
   financial policy.

The Belarus Country Ceiling being upgraded (currently B-) would
be a pre-requisite for any upgrade consideration.

Future Developments That May, Individually or Collectively, Lead
to Negative Rating Action
- Inability to place LPNs and refinance short-term debt
   maturities, resulting in the liquidity ratio sustainably below
   1x
- FFO adjusted gross leverage sustainably above 5.5x and FFO
   fixed charge coverage trending to 1.2x due to operating
   underperformance, greater-than-expected debt-funded capex or
   sharp depreciation of Belarusian rouble

LIQUIDITY

Liquidity to Improve post-LPNs Issue: Although Eurotorg's
liquidity profile is currently limited Fitch expects it to
strengthen substantially after the planned LPN placement and
subsequent refinancing of short-term debt maturities. As at end-
June 2017 Eurotorg's cash of USD14 million and expected positive
FCF were insufficient to cover short-term debt of around USD90
million. After the refinancing pro-forma short-term debt would
reduce to USD34 million and would be sufficiently covered by pro-
forma cash of USD54 million.


EUROTORG LLC: S&P Assigns Prelim 'B-/B' CCR, Outlook Stable
-----------------------------------------------------------
S&P Global Ratings said that it has assigned its preliminary 'B-'
long-term and preliminary 'B' short-term corporate credit ratings
to Belarus-based food retailer Eurotorg LLC. The outlook is
stable.

S&P said, "At the same time, we assigned our preliminary 'B-'
issue rating to the proposed LPNs to be issued by special-purpose
vehicle Bonitron Designated Activity Co. The issue rating is
based on the preliminary terms and conditions of the LPNs.

"The ratings are subject to the successful issuance of the LPNs
and our review of the final documentation. If we do not receive
the final documentation within a reasonable time frame, or if the
final documentation departs materially from what we have already
reviewed, we reserve the right to withdraw or revise our
ratings."

The preliminary rating reflects the risks related to Eurotorg
operating in volatile emerging markets. More specifically, the
company has geographic concentration in Belarus, elevated
leverage, and foreign currency risks owing to the majority of its
borrowings being denominated in foreign currency, while revenues
are generated in Belarusian rubles. Very high country risks and
weak performance of Belarus' economy also constrain the ratings
on Eurotorg.

At the same time, Eurotorg's creditworthiness is supported by the
company's leading position in Belarus' fragmented food retail
market, where its share exceeds that of the next five competitors
combined, as well as by its broad footprint across the country
and cash-generative nature of its business. S&P said, "Likewise,
we view as credit positive Eurotorg's meaningful scale in the
local market that supports its valuable relationship and
negotiating power with suppliers, which underpin the company's
profitability. We also note Eurotorg's beneficial stance with
regard to local trade legislation, which stipulates that a large
share of certain product groups have to be locally produced and,
in turn, enhances barriers to the entry of international players.

"The preliminary 'B-' rating on Eurotorg's proposed LPNs is in
line with the preliminary corporate credit rating. This reflects
the group's intention to replace a large share of its secured
debt with the proceeds of the proposed issuance so that the
overall share of secure debt reduces to less than 50%. If the
final issuance amount results in the share of secured debt
remaining above 50%, we could assess unsecured creditors'
position as subordinated to a large amount of secured debt. In
turn, this could lead us to assign a lower final rating to the
LPNs.

"We consider Eurotorg's highly leveraged capital structure and
large exposure to foreign currency risk as the major rating
constraints. The company plans to use the majority of the LPN
issuance proceeds to refinance its near- and medium-term secured
debt. As such, we don't anticipate meaningful debt reduction in
the coming years. We expect that over 2017-2019 the company's S&P
Global Ratings-adjusted debt to EBITDA will remain in the 4.0x-
5.0x range and funds from operations (FFO) to debt at 10%-15%,
compared with 5.1x and 10%, respectively, in 2016. We don't net
any cash from Eurotorg's debt in our calculations. Also, we
expect that the group's ratio of EBITDA plus rent (EBITDAR) to
cash interest plus rent, a ratio we use to analyze retail
companies, will remain at about 1.8x, in line with the 1.7x
Eurotorg posted in 2016."

After the LPNs are issued, about 85% of Eurotorg's debt will be
denominated in foreign currencies, primarily U.S. dollars, while
all of its revenues are generated in Belarusian ruble. The
company does not hedge its foreign currency risk and will be
fully exposed to movements in the exchange rate of the Belarusian
ruble, a volatile currency that has depreciated 6.5x since 2010
and lost about 50% of its value since late 2014. The combination
of high leverage and unhedged foreign exchange risk leads us to
assess the company's capital structure as negative.

The group plans to mitigate this risk by keeping $40 million of
the LPN proceeds, on top of the cash generated by its operations,
at its bank accounts at all times, and in the original currency.
This amount should serve as a liquidity cushion against sharp,
unexpected movements in exchange rates, which will have a similar
effect on interest expenses. The $40 million represents just
above 50% of the company's post-transaction annual interest
expense, which should provide sufficient support to the group's
reduced cash flow generation caused by higher interest expense,
in case the local currency depreciates sharply.

S&P said, "We expect Eurotorg's capital structure will feature
elevated foreign exchange risk for the foreseeable future, since
the company plans to reduce the share of debt secured by asset
pledges. The availability of unsecured debt in local currency
could be limited, in part owing to local regulation, with raising
foreign-currency debt being a more likely option.

"In our view, Eurotorg's business risk profile is primarily
constrained by the very high country risk in Belarus, where the
company conducts all of its business. We consider Belarus to be
still underpenetrated by modern retail formats, with the top-five
retailers controlling close to 30% of the market, of which
Eurotorg commands about 19%. This provides opportunities for
further growth. Apart from its market share and brand
recognition, Eurotorg's competitive advantage also lies in having
one of the largest logistics systems in the country. The group is
one of the largest importers of food, part of which it resells as
a wholesaler.

"The company's business includes Statusbank, a small retail bank,
which we deconsolidate from Eurotorg's accounts in making our
calculations. We believe the bank is not a key part of the
company's strategy and could be sold if a suitable opportunity
arises. We expect the company will not be making material
investments in developing the bank's business.

"The stable outlook on Eurotorg reflects our expectation that the
group will continue to deliver stable operating results over the
next 12 months. We expect that, after refinancing, the group will
focus on operating efficiency and utilize its free operating cash
flow (FOCF) to moderately reduce debt. At the same time, we
expect that Eurotorg will proactively negotiate a covenant reset
or waiver should its headroom under any of the maintenance
covenants come under pressure.

"We could lower the rating if Eurotorg's liquidity deteriorates
as a result of sharp exchange rate movements, significantly
weaker operating performance resulting in decreasing cash
generation, lack of access to cash at banks, or inability to
service foreign-currency-denominated debt on time owing to
currency control restrictions. We could downgrade Eurotorg if
FOCF were to turn negative or if we considered a covenant breach
likely and the company is unable to reset the covenants or obtain
a waiver in a timely manner."

A negative rating action on Eurotorg could also result from a
similar action on the sovereign rating.

Upside for the rating is remote over the next 12 months because
the rating is constrained by the limitations of Eurotorg's
capital structure and the sovereign rating on Belarus.


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C R O A T I A
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AGROKOR DD: Failed to Report HRK3.9 Billion of Liabilities
----------------------------------------------------------
Jasmina Kuzmanovic and Luca Casiraghi at Bloomberg News report
that Agrokor d.d., the conglomerate under the largest state-led
restructuring in Croatian history, failed to report more than
HRK3.9 billion (US$616 million) of liabilities at the end of
2015.

The firm released audited results for 2016 and reviewed financial
reports for the previous years, confirming earlier warnings from
Ante Ramljak, a government-appointed commissioner, that the
original results may have contained irregularities, Bloomberg
relates.

"I thought I've seen it all, but I've never seen losses so
consistently and successfully hidden for years," Bloomberg quotes
Mr. Ramljak as saying in Zagreb on Oct. 9.  He said Agrokor
pressed criminal charges against people responsible, Bloomberg
relays.

According to Bloomberg, Prime Minister Andrej Plenkovic said
Agrokor's future was at risk when the government stepped in on
April 10 to save jobs and shield the economy from the threatened
collapse of a company whose revenue is equal to 15% of gross
domestic product.  Founder Ivica Todoric, on the other hand, says
the government acted too hastily, didn't allow Todoric's
aggressive expansion strategy to play out and is taking Agrokor
in the wrong direction, Bloomberg notes.

The Zagreb-based food producer and retailer reported a 3% decline
in revenue in 2016 to HRK46.2 billion and a HRK10.1 billion loss
attributable to equity holders of the parent, against a HRK3.8
billion loss a year earlier, Bloomberg discloses.

The company said in a presentation on Oct. 9 accounting
irregularities stemmed from artificially improving the results
through non-disclosure of operational and financial expenses,
inadequate classifications of loans granted as cash, and
misreporting borrowings, Bloomberg relates.

According to Bloomberg, in total, Agrokor failed to disclose more
than HRK2.9 billion of extra debt as of the end of 2015,
including HRK589 million owed to Splitska Banka, then part of
Societe Generale SA, and HRK473 million to the Croatian unit of
UniCredit SpA.

The retailer's troubles started in January as creditors
questioned how it would deal with as much as US$7 billion
borrowed to finance expansion and credit rating agencies slashed
the ratings, Bloomberg recounts.

The government pushed through a special law, known as Lex
Agrokor, designed to deal with companies whose failure would
present systemic risk to the economy, Bloomberg relays.  Under
the law, which may remain in power until July at the longest, the
company's obligations are frozen as the management prepares a
settlement with creditors, Bloomberg notes.

                       About Agrokor DD

Founded in 1976 and based in Zagreb, Crotia, Agrokor DD is the
biggest food producer and retailer in the Balkans, employing
almost 60,000 people across the region with annual revenue of
some HRK50 billion (US$7 billion).

On April 10, 2017, the Zagreb Commercial Court allowed the
initiation of the procedure for extraordinary administration over
Agrokor and some of its affiliated or subsidiary companies.  This
comes on the heels of an April 7, 2017 proposal submitted by the
management board of Agrokor Group for the administration
proceedings for the Company pursuant to the Law of Extraordinary
Administration for Companies with Systemic Importance for the
Republic of Croatia.

Mr. Ante Ramljak was simultaneously appointed extraordinary
commissioner/trustee for Agrokor on April 10.

In May 2017, Agrokor dd, in close cooperation with its advisors,
established that as of March 31, 2017, it had total liabilities
of HRK40.409 billion.  The company racked up debts during a rapid
expansion, notably in Croatia, Slovenia, Bosnia and Serbia, a
Reuters report noted.

On June 2, 2017, Moody's Investors Service downgraded Agrokor
D.D.'s corporate family rating (CFR) to Ca from Caa2 and the
probability of default rating (PDR) to D-PD from Ca-PD. The
outlook on the company's ratings remains negative.  Moody's also
downgraded the senior unsecured rating assigned to the notes
issued by Agrokor due in 2019 and 2020 to C from Caa2.  The
rating actions reflect Agrokor's decision not to pay the coupon
scheduled on May 1, 2017 on its EUR300 million notes due May 2019
at the end of the 30-day grace period. It also factors in Moody's
understanding that the company is not paying interest on any of
the debt in place prior to Agrokor's decision in April 2017 to
file for restructuring under Croatia's law for the Extraordinary
Administration for Companies with Systemic Importance.

On June 8, 2017, Agrokor's Agrarian Administration signed an
agreement on a financial arrangement agreement worth EUR480
million, including EUR80 million of loans granted to Agrokor by
domestic banks in April. In addition to this amount, additional
buffers are also provided with additional EUR50 million of
potential refinancing credit. The total loan arrangement amounts
to EUR1,060 million, of which a new debt totaling EUR530 million
and the remainder is intended to refinance old debt.


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


AIR BERLIN: To Cease Flight Operations by October 28
----------------------------------------------------
Victoria Bryan, Klaus Lauer and Gernot Heller at Reuters report
that flights operated by insolvent German carrier Air Berlin will
end by Oct. 28 at the latest, it said on Oct. 9, urging staff to
seek jobs elsewhere while it works toward a carve-up of its
assets.

According to Reuters, talks with Lufthansa and easyJet are due to
run until Thursday, Oct. 12, and once a deal for parts of its
business has been agreed Air Berlin will have to wind down the
rest of the operation.

German deputy economy minister Matthias Machnig said he is
confident a deal will be reached on Thursday, Oct. 12, Reuters
relates.

"After purchase contracts have been agreed, the company must end
its own operations step by step," Reuters quotes Air Berlin as
saying in a statement.

Air Berlin said Niki, which flies to tourist destinations, and
regional airline LG Walter are not insolvent and will continue to
run, Reuters notes.  It will also continue to fly 38 planes as
part of a wet lease deal, under which Lufthansa rents crewed
planes from Air Berlin mainly for its Eurowings brand, until
competition authorities have approved the sale of assets, Reuters
discloses.

Most Air Berlin long-haul flights have already been canceled and
the remainder will end on Oct. 15, Reuters states.

                        About Air Berlin

In operation since 1978, Air Berlin PLC & Co. Luftverkehrs KG is
a global airline carrier that is headquartered in Germany and is
the second largest airline in the country.

In 2016, Air Berlin operated 139 aircraft with flights to
destinations in Germany, Europe, and outside Europe, including
the United States, and provided passenger service to 28.9 million
passengers.  Within the first seven months of 2017, the Debtor
carried approximately 13.8 million passengers.  It employs
approximately 8,481 employees.  Air Berlin is a member of the
Oneworld alliance, participating with other member airlines in
issuing tickets, code-share flights, mileage programs, and other
similar services.

Air Berlin has racked up losses of about EUR2 billion over the
past six years, and has net debt of EUR1.2 billion.

On Aug. 15, 2017, Air Berlin applied to the Local District Court
of Berlin-Charlottenburg, Insolvency Court for commencement of an
insolvency proceeding.  On the same day, the German Court opened
preliminary insolvency proceedings permitting the Debtor to
proceed as a debtor-in-possession, appointed a preliminary
custodian to oversee the Debtor during the preliminary insolvency
proceedings, and prohibited any new, and stayed any pending,
enforcement actions against the Debtor's movable assets.

To seek recognition of the German proceedings, representatives of
Air Berlin filed a Chapter 15 petition (Bankr. S.D.N.Y. Case No.
17-12282) on Aug. 18, 2017.  The Hon. Michael E. Wiles is the
case judge.  Thomas Winkelmann and Frank Kebekus, as foreign
representatives, signed the petition.  Madlyn Gleich Primoff,
Esq., at Freshfields Bruckhaus Deringer US LLP, is serving as
counsel in the U.S. case.


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


ST PAUL IV: Fitch Assigns 'B-(EXP)' Rating to Class E Notes
-----------------------------------------------------------
Fitch Ratings has assigned St. Paul CLO IV DAC refinancing notes
expected ratings, as follows:

Class X: 'AAA(EXP)sf'; Outlook Stable
Class A-1: 'AAA(EXP)sf'; Outlook Stable
Class A-2A: 'AA(EXP)sf'; Outlook Stable
Class A-2B: 'AA(EXP)sf'; Outlook Stable
Class B: 'A(EXP)sf'; Outlook Stable
Class C: 'BBB(EXP)sf'; Outlook Stable
Class D: 'BB(EXP)sf'; Outlook Stable
Class E: 'B-(EXP)sf'; Outlook Stable
Subordinated notes: not rated

The assignment of the final ratings is contingent on the receipt
of final documents conforming to information already reviewed.

St. Paul CLO IV DAC is a cash flow collateralised loan obligation
(CLO). The proceeds of this issuance will be used to redeem the
old notes, with a new identified portfolio comprising the
existing portfolio, as modified by sales and purchases conducted
by the manager. The portfolio is managed by Intermediate Capital
Managers Limited. The refinanced CLO envisages a further four-
year reinvestment period and an 8.5 year weighted average life
(WAL).

KEY RATING DRIVERS

B' Portfolio Credit Quality
Fitch views the average credit quality of obligors to be in the
'B' range. The Fitch-weighted average rating factor (WARF) of the
current portfolio is 32.7, below the indicative maximum covenant
of 34 for assigning the expected ratings.

High Recovery Expectations
At least 90% of the portfolio will comprise senior secured
obligations. Fitch views the recovery prospects for these assets
as more favourable than for second-lien, unsecured and mezzanine
assets. The Fitch-weighted average recovery rate (WARR) of the
current portfolio is 68.5%, above the minimum covenant of 65.5%
for assigning the ratings.

Limited Interest Rate Exposure
Up to 10% of the portfolio can be invested in fixed-rate assets,
while fixed-rate liabilities represent 4.7% of the target par.
Fitch modelled both 0% and 10% fixed-rate buckets and found that
the rated notes can withstand the interest rate mismatch
associated with each scenario.

Diversified Asset Portfolio
The covenanted maximum exposure to the top 10 obligors for
assigning the ratings is 21.5% of the portfolio balance. This
covenant ensures that the asset portfolio will not be exposed to
excessive obligor concentration.

TRANSACTION SUMMARY

The issuer will amend the capital structure and reset the
maturity of the notes as well as the reinvestment period. The
transaction will feature a four-year reinvestment period, which
is scheduled to end in 2021.

The issuer will introduce the new class X notes, ranking pari
passu and pro-rata to the class A-1 notes. Principal on these
notes is scheduled to amortise in six equal instalments starting
from the second payment date. Class X notional is excluded from
the over-collateralisation tests calculation, but a breach of
this test will divert interest and principal proceeds to the
repayment of the class X notes.

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 up to 2 notches for the rated notes.
A 25% reduction in recovery rates would lead to a downgrade of up
to 3 notches for the rated notes.


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


BANCA CARIGE: Fitch Keeps B- LT IDR on Rating Watch Negative
------------------------------------------------------------
Fitch Ratings has downgraded Banca Carige's Viability Rating (VR)
to 'c' from 'cc' and maintained the bank's 'B-' Long-Term Issuer
Default Rating (IDR) on Rating Watch Negative (RWN).

The downgrade of the VR reflects Fitch's view that failure of the
bank under Fitch's definitions is inevitable because the proposed
conversion of subordinated debt would be considered a distressed
debt exchange (DDE) under Fitch criterias. The subordinated debt
conversion will represent a DDE because it will result in a
material reduction in terms and Fitch believes them to be
necessary to avoid resolution or liquidation.

Following a change in senior management this year, Carige
recently approved a revised restructuring plan. This includes
capital strengthening initiatives consisting of an offer to
bondholders to convert, at a discount, EUR510 million
subordinated and junior notes into newly issued senior debt, a
EUR560 million capital increase (of which EUR60 million in the
form of a debt-to-equity swap offered to the converted
subordinated and junior bondholders) and the gains from the sale
of certain assets and activities identified by management as non-
core.

KEY RATING DRIVERS
IDRS, VR AND SENIOR DEBT

Carige's VR reflects Fitch views that failure of the bank as
defined under Fitch criterias is inevitable because it requires
an extraordinary injection of capital to meet the gross non-
performing loan and coverage targets required by the ECB and
remain viable. The capital increase should enable Carige to
dispose of EUR1.4 billion gross doubtful loans. The bank has
already securitised EUR940 million doubtful loans this year. The
VR also reflects that as part of its plans the bank intends to
convert part of its outstanding junior and subordinated debt held
by institutional investors (for a nominal value of EUR510
million) into newly issued senior notes. Fitch considers that the
debt conversion of the subordinated and junior notes, at 70% and
30% of their nominal value, respectively, represents a material
reduction in terms and that the conversion is necessary to avoid
resolution or liquidation. The conversion therefore will be
treated as a DDE under Fitch criterias.

Carige's VR also reflects its weak asset quality, with gross
impaired loans at a high 33.7% of gross loans at end-1H17, the
bank's loss-making business model, a funding franchise that in
Fitch opinions remains vulnerable to creditors' sentiment and a
liquidity profile that is weaker than most rated Italian peers.

Carige's Long-Term IDR is rated three notches above the VR to
reflect Fitch's view that the probability that senior creditors
will have to bear losses is lower than the probability of the
bank's failure. This is primarily because Fitch expects that the
bank will receive capital through a new share issue and the
conversion of its junior and subordinated debt. If the bank
raises capital successfully, senior creditors will not suffer
losses. The bank's core shareholders, which own about 30% of its
share capital, have expressed their willingness to participate in
the capital increase as have some of the subordinated and junior
bondholders in adhering to the proposed exchange.

The RWN reflects Fitch's view that failure to complete the
capital strengthening will increase the risk of losses being
imposed on senior creditors, for example in a liquidation or a
resolution, and could lead to a downgrade of the Long-Term IDR
and senior debt ratings.

Carige's senior unsecured bonds are rated in line with the bank's
IDRs. The Recovery Rating of '4' (RR4) reflects Fitch's
expectation of average recovery prospects in the event of a
default of these instruments.

The Short-Term IDR is on RWN because it is mapped from the Long-
Term IDR.

SUPPORT RATING AND SUPPORT RATING FLOOR

The Support Rating and Support Rating Floor reflect Fitch's view
that although external support is possible it cannot be relied
upon. Senior creditors can no longer expect to receive full
extraordinary support from the sovereign in the event that the
bank becomes non-viable. The EU's Bank Recovery and Resolution
Directive and the Single Resolution Mechanism for eurozone banks
provide a framework for the resolution of banks that requires
senior creditors to participate in losses, if necessary, instead
of, or ahead of, a bank receiving sovereign support.

SUBORDINATED DEBT

The rated Tier 1 note (XS0372143296), which is offered 30% of its
nominal value in newly issued senior notes in the proposed
exchange, has a 'RR5' recovery rating, which is in line with
Fitch expectations of recoveries in the range of 11% to 30% for
bondholders. Fitch downgraded the note's long-term rating to 'C'
in line with Fitch criterias for rating non-performing hybrid
obligations.

RATING SENSITIVITIES
IDRS, VR AND SENIOR DEBT

Fitch expects to downgrade Carige's VR to 'f' after fresh capital
has been raised through the new share issue and the debt
conversion, before upgrading the VR to a level commensurate with
the bank's subsequent risk profile and capitalisation.

If the capital strengthening is completed successfully, the
bank's still weak capitalisation in relation to its risks and
asset quality, its unprofitable business model and franchise, and
its limited earnings potential are likely to constrain its VR at
'b-' following the completion of the transactions.

Fitch would also downgrade the VR in the event of a regulatory
action if the planned transactions fail. However, Fitch considers
this less probable at this stage.

Fitch expects to resolve the RWN on the Long-Term IDR when
Carige's capital increase and debt conversion are completed and
when more details on the disposal of non-core assets has become
available. Following the resolution of the RWN, Fitch expects the
Long-Term IDR to be rated at the same level as the VR. The
resolution of the RWN could take longer than the typical six
months if the bank's plans and regulatory authorisations are
delayed.

If the bank fails to complete the capital increase and debt
conversion, then Fitch believes there would be a heightened
probability of liquidation or other resolution action. In this
scenario, the Long-Term IDR and senior debt ratings would be
downgraded to a level commensurate with Fitch views of heightened
risk of senior creditors bearing losses.

SUPPORT RATING AND SUPPORT RATING FLOOR

An upgrade of the Support Rating and any upward revision of the
Support Rating Floor would be contingent on a positive change in
the sovereign's propensity to support Carige. While not
impossible, this is highly unlikely, in Fitch's view.

SUBORDINATED DEBT

The ratings of notes exchanged in the voluntary conversion would
be withdrawn shortly after the completion of the transaction, as
the securities are extinguished in the exchange.

The rating actions are as follows:

Long-Term IDR: 'B-', maintained on RWN
Short-Term IDR: 'B', maintained on RWN
Viability Rating: downgraded to 'c' from 'cc'
Support Rating: affirmed at '5'
Support Rating Floor: affirmed at 'No Floor'
Senior unsecured notes (including EMTN): Long-term rating of 'B-
'/'RR4' maintained on RWN, Short-term rating of 'B' maintained on
RWN
Subordinated notes (XS0372143296): downgraded to 'C'/'RR5' from
'CC'/'RR5'.


BANCA IFIS: Fitch Assigns BB(EXP) Rating to Sub. Tier 2 Notes
------------------------------------------------------------
Fitch Ratings has assigned Banca IFIS's (IFIS, BB+/Stable/bb+)
planned issue of subordinated Tier 2 bonds an expected 'BB(EXP)'
rating.

The final rating is contingent upon the receipt of final
documents conforming to information already received. The amount
and the maturity structure of the issue will be subject to market
conditions.

The notes will be issued under IFIS's EUR5 billion EMTN programme
and will qualify as Basel III-compliant Tier 2 debt. They will
contain contractual loss absorption features that will be
triggered only at the point of non-viability of the bank and no
equity conversion feature. The terms of the notes include a
reference to noteholders consenting to be bound by subordination
provisions established by Italian law.

KEY RATING DRIVERS

The notes are rated one notch below IFIS's 'bb+' Viability Rating
(VR) to reflect the below-average recovery prospects for the
notes in case of a non-viability event. Fitch does not notch the
notes for non-performance risk because there is no coupon
flexibility included in their terms.

RATING SENSITIVITIES

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


CIRENE FINANCE: S&P Lowers Class E CMBS Notes Rating to D (sf)
--------------------------------------------------------------
S&P Global Ratings lowered its credit ratings on Cirene Finance
S.r.l.'s class D and E notes.

S&P said, "We have identified an error in the application of our
structured finance temporary interest shortfall criteria on the
class E notes (see "Structured Finance Temporary Interest
Shortfall Methodology," published on Dec. 15, 2015). These
criteria state that the maximum potential rating assigned to
structured finance securities will be capped depending upon the
length of the interest shortfall, while taking into account the
expectation that interest shortfalls will be repaid in a maximum
of 12 months. If we expect the interest shortfall period to be
greater than 12 months, then we would typically consider the
interest shortfall a default and lower our rating on the security
to 'D'.

"The criteria provide a carve-out for structures that provide
economic compensation for interest deferral, if we believe that
all amounts will be paid by the transaction's maturity date.

"We understand that the class E notes have been deferring
interest since June 2013, with no further economic compensation
being paid on the deferred interest. Consequently, we have
lowered to 'D (sf)' from 'CCC- (sf)' our rating on the class E
notes in line with our interest shortfall criteria.

"We have also lowered to 'CCC- (sf)' from 'CCC (sf)' our rating
on the class D notes in line with our criteria for assigning
'CCC' category ratings (see "Criteria For Assigning 'CCC+',
'CCC', 'CCC-', And 'CC' Ratings," published on Oct. 1, 2012). Due
to the approaching legal final maturity date in December 2017,
the class D notes have become more vulnerable to non-payment and
we believe there is at least a one-in-three likelihood of
default."

Cirene Finance is a 2006 commercial mortgage-backed securities
(CMBS) transaction, backed by a pool of secured and unsecured
nonperforming loans, originated in Italy.

RATINGS LIST

  Cirene Finance S.r.l.
  EUR101.45 mil mortgage-backed floating-rate notes and
  deferrable-interest notes
                                      Rating
  Class            Identifier         To             From
  D                IT0004115470       CCC- (sf)      CCC (sf)
  E                IT0004115488       D (sf)         CCC- (sf)


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


ALTICE FINCO: Moody's Rates EUR675MM Senior Unsecured Notes B3
--------------------------------------------------------------
Moody's Investors Service has assigned B3 ratings to the EUR675
million Senior Unsecured Notes due 2028 issued by Altice Finco
S.A. Concurrently, Moody's has assigned B1 ratings to a new
EUR1,089 million equivalent EUR and USD senior secured
incremental Term Loan due 2026 issued by Altice Financing S.A.

Proceeds from the notes will be used to repay drawings
outstanding under the revolving credit facilities of Altice
Financing S.A., a wholly-owned subsidiary of Altice International
S.a.r.l (B1 stable).

Proceeds from the incremental Term Loan will be used to redeem
the senior secured EUR300 million and USD900 million 6.5% notes
due 2022 issued by Altice Financing S.A. This redemption is
expected to occur following a step down in the call price to
103.25 from December 15, 2017.

The transaction is credit neutral as the increase in finance
costs is mitigated by the enhanced maturity profile and improved
liquidity with increased revolving credit facility availability.

RATINGS RATIONALE

The B1 rating on the incremental Term Loan is in line with the B1
CFR of Altice International. The B3 rating on the new notes is
two notches below Altice International's B1 CFR, reflecting their
senior unsecured ranking and subordinated position in the capital
structure, in line with other issuance by Altice Finco S.A. At
June 30, 2017, Altice International S.a.r.l. reported (management
unaudited) EUR7.3 billion of senior debt ranking ahead of Altice
Finco S.A.

Altice International S.a.r.l.'s B1 CFR reflects (1) the rapid
pace of growth by acquisition in recent years in multiple
geographical markets; (2) the all-debt financing of the Portugal
Telecom acquisition in 2015, associated high leverage and the
complex capital structure of the company; (3) the challenging
revenue environment in Portugal; (4) the high capex investment
required; and (4) the need to maintain adequate liquidity given
the dividend payments made to cover interest obligations at
Altice Luxembourg S.A.

More positively, the rating acknowledges the focus in 2016 on the
integration and management of operating assets, as well as the
expected improvement in revenue and margin trends in
International's core markets.

The rating also reflects (1) the scale of the business and its
geographical diversification; (2) strong market-leading positions
with convergent product offer; (3) high quality, fiber-rich
infrastructure; (4) evidence of synergy delivery across the
company and particularly in Portugal; (5) early signs of revenue
growth in Portugal; and (6) the stable regulatory environment in
its main markets.

RATIONALE FOR THE STABLE OUTLOOK

The stable outlook reflects the successful integration of
acquisitions, evidenced by improved margins together with an
improved revenue outlook. Management focus on the operation of
underlying assets has intensified. Moody's expects significant
investment in fiber roll-out to limit free cash flow generation
in the next 18 months but this should create enhanced future
returns, given the higher revenues expected from fiber customers.

The stable outlook also assumes no material debt financed
acquisitions and a satisfactory outcome to the current EU
investigation into alleged pre-clearance management at the time
of the Portugal Telecom acquisition.

WHAT COULD MOVE THE RATING UP/DOWN

Upward rating pressure may arise if (1) leverage reduces, such
that Moody's Adjusted Debt/EBITDA is sustained well below 4.0x;
(2) given the close relationship with Altice Luxembourg
("Luxembourg" or "Holdco"), leverage at Holdco to be sustained
well below 4.5x; and (3) there is a general stability in the
activities of the wider Altice group and particularly within the
Luxembourg perimeter. Upward rating pressure is unlikely until
there is a track record of stronger liquidity management and
there is visibility on the impact of the potential push down of
debt from Luxembourg into International.

Downward rating pressure may develop if (1) leverage increases,
such that Moody's Adjusted Debt/EBITDA exceeds 5.25x for a
sustained period; (2) liquidity deteriorates at either Altice
International or Luxembourg; (3) operating performance weakens;
(4) there are further material debt-financed acquisitions; and
(5) there is a material negative outcome to the current EU
investigation on the Portugal Telecom merger pre-clearance.

PRINCIPAL METHODOLOGY

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

Altice International S.a.r.l. is a multinational fiber,
telecommunications, content and media company, with a presence in
four regions: Dominican Republic, Israel, Western Europe and the
French Overseas Territories. The company's direct corporate
parent is Altice Luxembourg S.A., which itself, through
Amsterdam-listed Altice NV, is controlled by French entrepreneur
Patrick Drahi. Altice NV, through Altice Luxembourg S.A., also
owns the French telecommunications company SFR Group S.A. (B1
stable).

For the year ended December 31, 2016, Altice International
generated EUR4.5 billion in revenue and EUR2.14 billion in
management reported Adjusted EBITDA.


BANQUE INT'L: Moody's Assigns Ba2(hyb) Rating to AT1 Securities
---------------------------------------------------------------
Moody's Investors Service has assigned a Ba2(hyb) rating to
Banque Internationale a Luxembourg (BIL)'s additional Tier 1
(AT1) securities issued in June 2014 and listed on the Luxembourg
Stock Exchange since September 19, 2017.

These perpetual non-cumulative AT1 securities rank junior to Tier
2 capital, pari passu with other outstanding deeply subordinated
Tier 1 instruments and senior only to ordinary shares in BIL.
Coupons may be cancelled in full or in part on a non-cumulative
basis at the discretion of the issuer and/or the financial
regulator, or mandatorily if the issuer exceeds the Distributable
Items or if solvency requirements are not satisfied as a result
of such coupon payments. The notes will convert into equity if
BIL's Basel 3 Common Equity Tier 1 (CET1) ratio falls below
5.75%. However, this trigger can be prompted at 7% at the bank's
discretion.

RATINGS RATIONALE

The Ba2(hyb) rating assigned to BIL's AT1 securities is based on
the likelihood of BIL's capital ratio reaching the conversion
trigger, the probability of a bank-wide failure and loss
severity, if either or both events occur. Moody's assesses these
probabilities using an approach that is model-based,
incorporating the bank's creditworthiness, reflected in its baa2
baseline credit assessment (BCA), its most recent CET1 level and
other qualitative considerations, particularly with regard to how
the firm may manage its CET1 level on a forward-looking basis.
Moody's rates these notes to the lower of the model-based outcome
and BIL's non-viability security rating, which also captures the
risk of coupon suspension on a non-cumulative basis. This
approach leads to a Ba2(hyb) rating for these instruments, three
notches below BIL's baa2 BCA.

WHAT COULD CHANGE THE RATING UP/DOWN

BIL's AT1 securities rating could be upgraded as a result of an
upgrade of the bank's BCA. The latter could result from BIL's
improved profitability and/or asset risk while maintaining its
capital base, or if uncertainties stemming from the bank's recent
acquisition by a new shareholder are reduced.

Conversely, AT1 securities rating could be downgraded as a result
of a downgrade of BIL's BCA. This could result from an unexpected
deterioration in its profitability or material losses caused, for
instance, by widening sovereign spreads and/or a severe downturn
in the Luxembourg macroeconomic environment. However, given the
positive outlook currently assigned to BIL's long-term deposit,
issuer and senior unsecured ratings, the likelihood of a
downgrade is low.

LIST OF ASSIGNED RATINGS

-- Preferred Stock Non-cumulative, Assigned Ba2(hyb)

PRINCIPAL METHODOLOGY

The principal methodology used in this rating was Banks published
in September 2017.


===================
M O N T E N E G R O
===================


MONTENEGRO: S&P Alters Outlook to Stable, Affirms 'B+/B' Ratings
----------------------------------------------------------------
On Oct. 6, 2017, S&P Global Ratings revised to stable from
negative its outlook on the Republic of Montenegro. At the same
time, S&P affirmed its 'B+/B' long- and short-term foreign and
local currency sovereign credit ratings on Montenegro.

OUTLOOK

S&P said, "The outlook revision reflects our expectation that the
government will firmly press ahead with its consolidation efforts
by implementing the recently legislated revenue and expenditure
measures. These efforts would enable the rapid curtailment of
government deficits, especially following the end of the
construction of the first section of the Bar-Boljare highway
scheduled for 2019 and would kick start a reduction of government
debt in 2020.

"We could lower the ratings over the next 12 months if the
government failed to implement its fiscal consolidation measures,
preventing a meaningful deficit reduction in the medium term; or
if external financing pressures emerged.

"We could raise the ratings on Montenegro if, in addition to the
mentioned fiscal improvements, external vulnerabilities reduced
significantly. However, we currently view an upgrade as highly
unlikely over the next two years."

RATIONALE

The ratings are constrained by Montenegro's high government debt
burden, which will continue to rise until 2019 because of
elevated expenditures related to ongoing highway construction.
Due to these costs, the benefits of the government's
consolidation efforts will only become visible on the country's
balances from 2020. The other main constraint on Montenegro's
creditworthiness is the country's high current account deficit
and external vulnerabilities to potential shifts in flows of
foreign financing. Montenegro lacks monetary flexibility given
its unilateral adoption of the euro. S&P also takea into account
the country's moderate income levels and the limited
predictability of policymaking.

Institutional and Economic Profile: Growth rates remain sound,
but the potential for ongoing investments to bolster the economy
is uncertain

-- S&P projects real GDP growth to average 3.4% in 2017-2018, on
    the back of private consumption and investments, before
    slightly decelerating thereafter.

-- Montenegro joined the North Atlantic Treaty Organization
    (NATO) in June 2017, underpinning the country's Euro-Atlantic
    integration aspirations.

-- The current trials on an alleged coup attempt around last
    year's elections highlight some of the internal divisions and
    policy challenges.

S&P said, "We expect that Montenegro's economy will expand by
about 3.4% in 2017 and 2018, on the back of private consumption
and investments. Both of these driving factors benefit from the
country's record tourist season in 2017. Although construction of
the priority section of the Bar-Boljare highway, alongside
projects related to the tourism sector, is fueling investment
growth, these investments are also propelling imports. At the
same time, recovering credit growth, especially household loans,
is supporting consumption growth. The government's consolidation
efforts will weigh on both government and private consumption in
the coming years, and with the completion of several large-scale
investment projects, we project a deceleration in growth in 2019-
2020.

"Although imports related to foreign-funded investment projects
contribute to the persistently negative trade balance, we
anticipate that the completion of projects in the energy,
agriculture, and notably the tourism sector over the coming two
years will strengthen the potential for export-led growth. This
is the case for the Bar-Boljare highway project, which could
ultimately benefit the country's role as a tourist destination if
connections to Serbia are improved. Currently, while contributing
to economic growth, the project's interlinkage with Montenegro's
economy remains constrained due to the limited domestic content
of the project."

Following last year's parliamentary elections, the Democratic
Party of Socialists (DPS) continues to control the domestic
political landscape, albeit with a slim majority in parliament.
Montenegro's institutional and governance effectiveness continues
to be constrained by several structural problems, including in
the judicial system. Montenegro joined NATO in June 2017. Because
Montenegro's EU integration is likely to proceed slowly over the
coming years, NATO accession could be seen as a signal of
stability for investment in the country and support structural
reform momentum.

However, parts of the population remain opposed to Montenegro's
NATO accession, and tension among the country's internal
divisions could re-intensify. The ongoing trials against
opposition party members and foreign nationals on allegations of
an attempt to topple the government on election day last year
point to these internal divisions.

Furthermore, these trials and NATO accession raised concerns on
Montenegro's international relationships, particularly with
Russia, a key investor and trading partner. However, recent
reports seem to indicate that the number of Russian tourists
visiting Montenegro in 2017 has actually increased from last
year.

Flexibility and Performance Profile: Fiscal consolidation is key
to offset the country's low shock-absorption capacity

-- Earlier this year the government drew up an ambitious fiscal
    consolidation strategy that, if completely implemented, would
    curtail deficits noticeably, particularly from 2020 when the
    completion of highway construction will ease pressure on
    fiscal balances.

-- Montenegro's external position remains vulnerable to foreign
    financing shifts, and external financing needs will remain
    high in 2017-2020.

-- Montenegro's unilateral adoption of the euro constricts its
    monetary policy flexibility.

S&P said, "In line with our previous expectations, Montenegrin
legislators have developed a comprehensive fiscal consolidation
strategy, in addition to the measures stipulated in the 2017
budget. This new strategy comprises measures on the revenue side,
such as a VAT and excise increase as well as on the expenditure
side, reducing public sector wages and certain social benefits.
If carried out as planned, the consolidation measures would
substantially reduce general government deficits.

"Still, government deficits will remain high, averaging 4.8% of
GDP over 2017-2020, because of the rigid budget of the ongoing
highway construction until the first section of the Bar-Boljare
highway is completed in 2019. We now project that, over our
forecast period, the government will be able to reduce its
underlying budget deficit (excluding highway-related spending)
more significantly than under our previous forecast, owing to the
gradual implementation of the now-adopted consolidation measures.
From 2020, general government deficits will be lower if
consolidation is not reversed; we still project a deficit of 2.3%
of GDP in 2020, as opposed to the authorities' projection of a
budget surplus. Nevertheless, highway-related expenditures will
increase general government debt to almost 74% of GDP by 2019,
almost double the 2009 level. This underlines the constraints to
the government's fiscal flexibility over the coming years and the
need to curb rising public debt to contain vulnerabilities to
external shocks, especially given the country's limited monetary
flexibility due to its unilateral adoption of the euro. Despite
the government's firm commitment, political risks to the fiscal
trajectory remain, in our view, given the weak fiscal track
record and risk of uptick in ad hoc current expenditure.
Moreover, we view the government's volatile debt redemption
profile as a potential vulnerability particularly since
Montenegro's Eurobonds fall due in 2019-2021.

"The construction of the first phase of the Bar-Boljare highway
commenced in 2015. Eighty-five percent of the financing for this
phase will be met through a $944 million (over 20% of GDP) loan
from the Export-Import Bank of China (Chinese Eximbank), and the
remainder via market issuance. We anticipate that the government
will rely on public-private partnerships or concessions, among
other financing instruments, to fund the works on the other
sections of the highway, rather than lean further on borrowings.

"We acknowledge, nevertheless, that additional risks from the
highway construction persist, for example those stemming from
cost overruns or currency risk, since Montenegro must service its
loan from the Chinese Eximbank in U.S. dollars. We understand
that the government is contemplating ways to hedge its exchange
rate risk. We do not consider the bilateral loan from the Chinese
Eximbank to be commercial debt. However, by potentially receiving
preferential treatment, the liability could, in our opinion,
weaken Montenegro's capacity to pay its commercial debt, which we
estimate at over 50% of total government debt."

Montenegro's external position remains vulnerable over 2017-2020,
with sizable external financing needs totaling over 140% of
current account receipts and usable reserves, on average, and
high external debt with external debt net of liquid assets
averaging almost 180% of current account receipts. Overall net
external liabilities even surpass 500% of current account
receipts. Current account deficits exceeding 20% of GDP over that
period reflect an even higher trade deficit. This is partly
mitigated by a surplus in the services balance due to the
country's coastal tourism destinations -- the country has
reported a record tourist season in 2017.

However, an important source of Montenegro's external financing,
net foreign direct investment (FDI), decreased substantially in
2016 to 10% of GDP from 17% the year before. While mainly
reflecting one-time events, the decrease was also likely linked
to lower inflows in the construction and real estate sector, and
highlights Montenegro's vulnerability to external developments.
FDI recovered in the first half of 2017 and we project that net
FDI inflows will average 11% in 2017-2020, which will cover most
of the current account deficit as investments, for example in the
tourism and energy sectors, proceed. In 2020, S&P projects a
decrease of the current account deficit as sizable investments
are completed.

Montenegro's external accounts show large, persistent, and
positive errors and omissions, which -- following recent data
revisions--average 5% of GDP over the past five years. These
discrepancies may reflect unrecorded tourism export revenues and
the underestimation of remittances from the large Montenegrin
diaspora, among other factors. This could mean that the current
account deficit may be lower than the reported data indicate.
Also, S&P has limited information on Montenegro's external
assets. As such, external ratios are likely to indicate higher
net leverage than is actually the case.

Montenegro's unilateral adoption of the euro prevents the Central
Bank of Montenegro from setting interest rates and controlling
the money supply, and restricts its ability to act as a lender of
last resort. While the central bank has some options to provide
liquidity support to banks, its inability to create the currency
needed in a stress scenario effectively prevents the bank from
fulfilling a lender of last-resort function, in S&P's view.
Unilateral euro adoption also makes the country's economy highly
sensitive to cross-border capital movements. Despite efforts to
reduce the level of nonperforming loans (NPLs), the NPL ratio
remains high at 8% as of July 2017. The authorities are
monitoring the situation in the increasingly competitive banking
sector, and potential effects of the economic and lending
environment and fiscal consolidation on banks' asset quality.

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 the fiscal assessment: flexibility and
performance had improved and that the fiscal assessment: debt
burden had deteriorated. All other 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
  Montenegro (Republic of)
   Sovereign Credit Rating
  Foreign and Local Currency          B+/Stable/B  B+/Negative/B
  Transfer & Convertibility Assessment  AAA               AAA
  Senior Unsecured
   Local Currency                       B+                B+


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


JUBILEE CLO 2014-XII: Moody's Assigns B2 Rating to Cl. F Notes
--------------------------------------------------------------
Moody's Investors Service announced that is has assigned the
following definitive ratings to refinancing notes ("Refinancing
Notes") issued by Jubilee CLO 2014-XII B.V. (the "Issuer"):

-- EUR4,000,000 Class X Senior Secured Floating Rate Notes due
    2030, Definitive Rating Assigned Aaa (sf)

-- EUR304,000,000 Class A Senior Secured Floating Rate Notes due
    2030, Definitive Rating Assigned Aaa (sf)

-- EUR32,000,000 Class B1 Senior Secured Floating Rate Notes due
    2030, Definitive Rating Assigned Aa2 (sf)

-- EUR25,000,000 Class B2 Senior Secured Fixed Rate Notes due
    2030, Definitive Rating Assigned Aa2 (sf)

-- EUR29,500,000 Class C Deferrable Mezzanine Floating Rate
    Notes due 2030, Definitive Rating Assigned A2 (sf)

-- EUR25,500,000 Class D Deferrable Mezzanine Floating Rate
    Notes due 2030, Definitive Rating Assigned Baa2 (sf)

-- EUR34,000,000 Class E Deferrable Junior Floating Rate Notes
    due 2030, Definitive Rating Assigned Ba2 (sf)

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

RATINGS RATIONALE

Moody's definitive ratings of the notes address the expected loss
posed to noteholders by the legal final maturity of the notes in
2030. The definitive ratings reflect the risks due to defaults on
the underlying portfolio of assets, the transaction's legal
structure, and the characteristics of the underlying assets.
Furthermore, Moody's is of the opinion that the collateral
manager, Alcentra Limited ("Alcentra" or the "Manager"), has
sufficient experience and operational capacity and is capable of
managing this CLO.

The Issuer has issued the Refinancing Notes in connection with
the refinancing of the following classes of notes: Class A Notes,
Class B1 Notes and Class B2 Notes, which were refinanced in
January 2017 and Class C Notes, Class D Notes, Class E Notes and
Class F Notes due 2027 (the "Original Notes"), previously issued
in May 2014 (the "Original Closing Date"). On the Refinancing
Date, the Issuer has used the proceeds from the issuance of the
Refinancing Notes to redeem in full the Original Notes. On the
Original Closing Date the Issuer also issued Subordinated Notes,
which will remain outstanding.

Jubilee CLO 2014-XII B.V. is a managed cash flow CLO with a
target portfolio made up of EUR500,000,000 par value of mainly
European corporate leveraged loans. At least 90% of the portfolio
must consist of senior secured loans and senior secured bonds and
up to 10% of the portfolio may consist of unsecured senior loans,
second-lien loans, mezzanine obligations and high yield bonds.
The portfolio may also consist of up to 10% of fixed rate
obligations. The portfolio is expected to be 100% ramped up as of
the closing date and to be comprised predominantly of corporate
loans to obligors domiciled in Western Europe.

Alcentra will actively manage the collateral pool of the CLO. It
will direct the selection, acquisition and disposition of
collateral on behalf of the Issuer and may engage in trading
activity, including discretionary trading, during the
transaction's four-year reinvestment period. Thereafter,
purchases are permitted using principal proceeds from unscheduled
principal payments and proceeds from sales of credit risk and
credit improved obligations, and are 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.

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

The performance of the notes is subject to uncertainty. The
performance of the notes is sensitive to the performance of the
underlying portfolio, which in turn depends on economic and
credit conditions that may change (including a change of
sovereign related risks with regards to the country of domicile
of obligors). The Manager's investment decisions and management
of the transaction will also affect the performance of the notes.

Loss and Cash Flow Analysis:

Moody's modeled the transaction using a cash flow model based on
the Binomial Expansion Technique, as described in Section 2.3.2.1
of the "Moody's Global Approach to Rating Collateralized Loan
Obligations" rating methodology published in August 2017. The
cash flow model evaluates all default scenarios that are then
weighted considering the probabilities of the binomial
distribution assumed for the portfolio default rate. In each
default scenario, the corresponding loss for each class of notes
is calculated given the incoming cash flows from the assets and
the outgoing payments to third parties and noteholders.
Therefore, the expected loss or EL for each tranche is the sum
product of (i) the probability of occurrence of each default
scenario and (ii) the loss derived from the cash flow model in
each default scenario for each tranche. As such, Moody's
encompasses the assessment of stressed scenarios.

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

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

Defaulted par: EUR0

Diversity Score: 38

Weighted Average Rating Factor (WARF): 2800

Weighted Average Spread (WAS): 3.5%

Weighted Average Recovery Rate (WARR): 43%

Weighted Average Life (WAL): 8.5 years

As part of its analysis, Moody's has addressed the potential
exposure to obligors domiciled in countries with a local currency
country risk ceiling of A1 or below. As per the portfolio
constraints, exposures to countries with a local currency country
risk ceiling of A1 or below cannot exceed 10%. However, the
eligibility criteria require that an obligor be domiciled in a
non-emerging market country. At present, all countries classified
as non-emerging market under this transaction have a local
currency country risk ceiling of at least A1. Therefore at
present, it is not possible to have exposures to countries with a
local currency country risk ceiling of below A3.

Stress Scenarios:

Together with the set of modeling assumptions above, Moody's
conducted an additional sensitivity analysis, which was a
component in determining the definitive ratings assigned to the
rated notes. This sensitivity analysis includes increased default
probability relative to the base case. Below is a summary of the
impact of an increase in default probability (expressed in terms
of WARF level) on the notes (shown in terms of the number of
notch difference versus the current model output, whereby a
negative difference corresponds to higher expected losses),
assuming that all other factors are held equal.

Percentage Change in WARF -- increase of 15% (from 2800 to 3220)

Rating Impact in Rating Notches:

Class X Senior Secured Floating Rate Notes: 0

Class A Senior Secured Floating Rate Notes: 0

Class B1 Senior Secured Floating Rate Notes: -2

Class B2 Senior Secured Fixed Rate Notes: -2

Class C Deferrable Mezzanine Floating Rate Notes: -2

Class D Deferrable Mezzanine Floating Rate Notes: -2

Class E Deferrable Junior Floating Rate Notes: -1

Class F Deferrable Junior Floating Rate Notes: 0

Percentage Change in WARF -- increase of 30% (from 2850 to 3640)

Rating Impact in Rating Notches:

Class X Senior Secured Floating Rate Notes: 0

Class A Senior Secured Floating Rate Notes: -1

Class B1 Senior Secured Floating Rate Notes: -4

Class B2 Senior Secured Fixed Rate Notes: -4

Class C Deferrable Mezzanine Floating Rate Notes: -4

Class D Deferrable Mezzanine Floating Rate Notes: -2

Class E Deferrable Junior Floating Rate Notes: -2

Class F Deferrable Junior Floating Rate Notes: -2

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

Methodology Underlying the Rating Action:

The principal methodology used in these ratings was "Moody's
Global Approach to Rating Collateralized Loan Obligations"
published in August 2017.


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


NOVO BANCO: Moody's Confirms Caa2 LT Sr. Unsec. Debt Ratings
------------------------------------------------------------
Moody's Investors Service has taken the following actions on Novo
Banco, S.A.'s (Novo Banco) ratings and assessments: (1) upgraded
the bank's baseline credit assessment (BCA) and adjusted BCA to
caa2 from ca; (2) confirmed the bank's long-term senior unsecured
debt ratings of Caa2; and (3) confirmed the long-term
Counterparty Risk Assessment (CR Assessment) of B3(cr). Novo
Banco's long-term deposit ratings of Caa1 remain on review for
downgrade. The outlook on the long-term senior debt ratings
changed to positive from Ratings under Review.

The rating action follows Novo Banco's announcement on October 4,
2017 of the outcome of the liability management exercise (LME) on
its senior debt -- that despite being below the targeted minimum
acceptance rate, the bank has fulfilled the target of raising
capital in the amount of EUR500 million. The rating action also
reflects the conclusion of the acquisition by the private equity
firm Lone Star of 75% of Novo Banco's capital, which is still
subject to formal authorization by the European Commission.

This rating action concludes the review for downgrade on Novo
Banco's long-term senior debt ratings, which was initiated on 5
April 2017.

The short-term deposit and programme ratings of Not Prime and
short-term CR Assessment of Not Prime(cr) are unaffected by
rating action.

RATINGS RATIONALE

-- RATIONALE FOR THE BCA

The upgrade of Novo Banco's BCA to caa2 from ca reflects Moody's
view that the bank's standalone creditworthiness has improved
following its recapitalization by close to EUR2 billion due to
the LME and the acquisition by Lone Star. More important, the
closing of the transaction ensures that Novo Banco will continue
to operate as a going concern.

As a result of the LME, Novo Banco has purchased and redeemed
senior bonds for an amount that represents 73% of total
outstanding senior debt (EUR3 billion as of end-June 2017). This
has resulted in a capital increase of EUR500 million in the form
of upfront capital gains and interest savings over a period of
five years.

Under the sale agreement, Novo Banco will also benefit from a
capital injection by Lone Star of EUR1 billion, of which EUR750
million will be provided at the closing of the acquisition and
the remaining EUR250 million over the next three years.
Furthermore, as part of the acquisition, the Portuguese
resolution fund (which will hold 25% of Novo Banco's capital) has
agreed on a contingent capital mechanism that could lead to a
capital injection of a maximum EUR3.9 billion under specific
conditions and in the event that the bank fails to comply with
minimum regulatory capital requirements.

Novo Banco's recapitalization will improve its capital position
by more than 300 basis points at the closing of the transaction.
The bank displayed a tangible common equity to risk-weighted
assets ratio of 6.6% at end-June 2017. However, Novo Banco's
improved capital position needs to be balanced against its very
weak asset risk, with the non-performing asset (NPA) ratio
estimated at a very high 39% and an NPA coverage ratio of 43% as
of end-June 2017.

In Moody's view, significant challenges to the bank's risk
profile remain, even after its sale to Lone Star, which reflect
the high degree of uncertainty around Novo Banco's medium-term
strategy.

-- RATIONALE FOR SENIOR DEBT RATINGS

The confirmation of the bank's long-term senior debt ratings at
Caa2 reflects: (1) the upgrade of the bank's BCA to caa2; (2) no
uplift from Moody's Advanced Loss Given Failure (LGF) analysis,
which is based on the rating agency's estimates of Novo Banco's
liability structure after the completion of the LME that has
triggered the redemption of 73% of the bank's outstanding senior
debt; and (3) the assessment of a low probability of government
support for Novo Banco that results in no further uplift for
these ratings.

Novo Banco's Caa2 senior debt ratings now carry a positive
outlook reflecting the potential benefit to the bank's BCA if the
acquisition and recapitalization by Lone Star results in a
further de-risking of its balance sheet and restructuring of its
operations. In Moody's view, this will be key to ensuring the
bank's sustained viability and future profitability.

-- RATIONALE FOR THE DEPOSIT RATINGS

The extension of the review for downgrade on Novo Banco's Caa1
long-term deposit ratings reflects: (1) the upgrade of the bank's
BCA to caa2; (2) the assessment of a low probability of
government support for the bank that results in no further uplift
for these ratings; and (3) the downside risks to Novo Banco's
deposit ratings stemming from the lower loss absorption provided
by the reduced volume of senior debt resulting from the LME.

This could result in a Preliminary Rating Assessment (PRA) of
Caa2 for the deposits, in line with the BCA. However, as per the
terms and conditions of the LME, a large portion of the bank's
senior debt bonds that have been purchased and redeemed will
remain in the bank in the form of deposits. Furthermore, Novo
Banco's deposits could benefit from a potential improvement of
the bank's standalone BCA.

Moody's expects to conclude the review process once it has full
visibility on Novo Banco's liability structure following the
closing of the LME and the acquisition by Lone Star. The rating
agency will also assess the liability profile of the bank along
with its near-term funding plan.

-- RATIONALE FOR THE CR ASSESSMENT

As part of rating action, Moody's has also confirmed the long-
term CR Assessment of Novo Banco at B3(cr), two notches above the
adjusted BCA of caa2, reflecting the cushion provided by the
volume of bail-in-able debt and deposits, which would likely
support operating obligations in the event of a resolution.

WHAT COULD CHANGE THE RATINGS UP/DOWN

The standalone BCA of Novo Banco could be upgraded once the
rating agency has visibility on the bank's risk profile and
strategy. The bank's BCA could also benefit if the bank achieves
a material improvement to its key solvency metrics, namely by
reducing the stock of NPAs and improving profitability.

Downward pressure could be exerted on Novo Banco's BCA if the
bank's risk-absorption capacity deteriorates due to a
deterioration of its asset risk or larger than anticipated
losses; and/or (2) the bank's liquidity deteriorates from its
current position.

In addition, any change to the BCA would also be likely to affect
deposit and debt ratings, as they are linked to the standalone
BCA.

Novo Banco's deposit ratings could also change as a result of
changes to the loss-given-failure faced by these liabilities.

LIST OF AFFECTED RATINGS

Issuer: Novo Banco, S.A.

Upgrades:

-- Adjusted Baseline Credit Assessment, upgraded to caa2 from ca

-- Baseline Credit Assessment, upgraded to caa2 from ca

Confirmations:

-- Long-term Counterparty Risk Assessment, confirmed at B3(cr)

-- Senior Unsecured Regular Bond/Debenture, confirmed at Caa2,
    outlook changed to Positive from Rating under Review

Extension of Review for downgrade:

-- Long-term Bank Deposits, currently Caa1 Ratings under Review

Outlook: Ratings under Review

Issuer: NB Finance Ltd.

Confirmations:

-- Backed Senior Unsecured Regular Bond/Debenture, confirmed at
    Caa2, outlook changed to Positive from Rating under Review

Outlook Action:

-- Outlook changed to Positive from Ratings under Review

Issuer: Novo Banco S.A., London Branch

Confirmation:

-- Long-term Counterparty Risk Assessment, confirmed at B3(cr)

Extension of Review for downgrade:

-- Long-term Bank Deposits, currently Caa1 Ratings under Review

Outlook: Ratings under Review

Issuer: Novo Banco S.A., Luxembourg Branch

Confirmations:

-- Long-term Counterparty Risk Assessment, confirmed at B3(cr)

-- Senior Unsecured Regular Bond/Debenture, confirmed at Caa2,
    outlook changed to Positive from Ratings under Review

Extension of Review for downgrade:

-- Long-term Bank Deposits, currently Caa1 Ratings under Review

Outlook: Ratings under Review

Issuer: Novo Banco, S.A., Cayman Branch

Confirmation:

-- Long-term Counterparty Risk Assessment, confirmed at B3(cr)

Extension of Review for downgrade:

-- Long-term Bank Deposits, currently Caa1 Ratings under Review

Outlook: Ratings under Review

Issuer: Novo Banco, S.A., Madeira Branch

Confirmation:

-- Long-term Counterparty Risk Assessment, confirmed at B3(cr)

Extension of Review for downgrade:

-- Long-term Bank Deposits, currently Caa1 Ratings under Review

Outlook: Ratings under Review

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Banks
published in September 2017.


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


KARELIA REPUBLIC: Fitch Affirms B+ LT Issuer Default Ratings
------------------------------------------------------------
Fitch Ratings has affirmed the Russian Republic of Karelia's
Long-Term Foreign- and Local-Currency Issuer Default Ratings
(IDRs) at 'B+' with Stable Outlooks. The agency has also affirmed
the republic's Short-Term Foreign-Currency IDR at 'B'. Karelia's
outstanding senior unsecured debt ratings have been affirmed at
'B+'.

Fitch has also assigned Karelia's forthcoming RUB2 billion
domestic bonds an expected senior unsecured 'B+(EXP)' long-term
local currency rating. The final rating is contingent on the
receipt of final documentation conforming materially to
information already received and details regarding the amount and
tenor.

The ratings reflect Karelia's growing debt burden due to the
republic's persistently weak fiscal performance albeit with some
prospects of restoration over the medium term. This is
counterbalanced by socio-economic metrics above the national
median supported by a diversified industrial sector. The ratings
also factor in volatile institutional framework for Russian
subnationals.

KEY RATING DRIVERS
Fitch projects Karelia's budgetary performance will moderately
recover from a prolonged period of negative operating balance and
high budget deficit. Karelia demonstrated a gradual recovery of
its budgetary performance in 2H16-1H17, and Fitch expects the
operating balance to turn to low positive values in the medium
term, so the operating margin will hover at about 2%-3%. This
will be driven by moderate growth of tax revenue and higher
transfers from the federal government, while operating
expenditure should remain under control. However, the current
balance will remain negative, reflecting the prolonged structural
imbalances of the region's budget.

Karelia's performance was in line with Fitch's expectations
during 8M17. The republic has collected 60% of full-year budgeted
revenue and incurred 59% of budgeted expenditure, which resulted
in an intra-year deficit of RUB764 million. Fitch expects
moderate acceleration of expenditure in 4Q17 and forecast a full
year deficit of about RUB2.1 billion or 6.2% of total revenue.
This is in line with 2016 actuals (RUB2.1 billion or 6.3%) and a
notable improvement compared with the 2013-2015 average annual
deficit of RUB3.8 billion or 14.4%.

Fitch expects the deficit before debt variation will narrow to
4%-5% in 2018-2019 on the back of the administration's measures
aimed at streamlining operating expenditure. Further fiscal
adjustment would be difficult without acceleration of tax revenue
as the region's capital expenditure flexibility is limited. The
share of capital outlays decreased to about 10% of total spending
in 2014-2016 (2011-2013: average 15%). Fitch expects capex to
remain at this low level in 2017-2019, unless Karelia receives
additional capital transfers from the federal government.

The republic's direct risk is almost unchanged since the
beginning of the year and accounted for RUB22.0 billion at 1
September. Fitch forecasts direct risk will moderately increase
by year-end and reach RUB24.3 billion or 78.2% of current revenue
(2016: 76.6%). It will likely edge higher to 85% in 2018-2019,
driven by a persistent, albeit narrowing, budget deficit.
However, this remains in line with the 'B' rating category.

Like most Russian regions Karelia is exposed to refinancing risk,
which stems from the region's high dependence on access to
capital market to service its debt. The debt maturity profile is
stretched to 2034, but about 97% of the risk is concentrated in
2017-2020. This results in a weighted average life of its debt of
about two years, which is short in an international context.
Fitch expects most debt due in 2017 (RUB4.9 billion) to be
financed by new RUB2 billion domestic bonds and a RUB3.5 billion
loan from the federal budget.

Karelia's tax base has historically been sound, supporting wealth
metrics above the national median. However, fiscal changes
introduced in 2012-2013 by the federal government have had a
deeply negative effect on the republic's fiscal capacity. In
addition, the negative macro-economic trend in Russia has led to
a deceleration of the local economy. Fitch projects Russia's
economy to start recovering in 2017 and its GDP to grow 1.6%-2.2%
per year in 2017-2018 and the republic will likely follow this
mild trend.

Russia's institutional framework for subnationals is a constraint
on the republic's ratings. Frequent changes in the allocation of
revenue sources and assignment of expenditure responsibilities
between the tiers of government limit Karelia's forecasting
ability and negatively affect the republic's fiscal capacity and
financial flexibility. Fitch expects the region's dependence on
financial support from the federal government to increase in
2017-2019.

RATING SENSITIVITIES

Growth of direct risk above 85% of current revenue, together with
a negative operating balance for two years in a row, would lead
to negative rating action.

Positive rating action could result from stabilised fiscal
performance with operating surpluses leading to sufficient
coverage of interest costs.


MOSCOW REGION: Fitch Affirms BB+ Long-Term IDR, Outlook Positive
----------------------------------------------------------------
Fitch Ratings has affirmed Moscow Region's Long-Term Foreign- and
Local-Currency Issuer Default Ratings (IDRs) at 'BB+' with
Positive Outlooks and Short-Term Foreign Currency IDR at 'B'.
Moscow Region's outstanding senior unsecured domestic bonds have
been affirmed at 'BB+'.

The Positive Outlook reflects Fitch's expectation that the region
will consolidate its operating performance at a sound level,
while maintaining strong debt metrics.

KEY RATING DRIVERS
Fitch forecasts Moscow region will record a sound operating
balance of 13%-15% of operating revenue in 2017-2019 supported by
growing tax revenue, which contributes about 90% of operating
revenue. The region's operating balance has been gradually
improving over the last two years, to reach 16% in 2016, up from
an average 10.2% in 2013-2015, as tax revenue growth outpaced
operating expenditure growth.

In 8M17, Moscow region's fiscal performance was in line with
Fitch's expectation. The region collected 66% of full-year
budgeted revenues and incurred 47% of full-year budgeted
expenses, which resulted in an intra-year surplus of RUB35
billion. Fitch expects some acceleration of expenditure in 4Q17,
mostly of capital nature, and projects an annual deficit of
RUB7.2 billion, which is equivalent to a marginal 1%-2% of
projected total revenue.

Fitch expects that the region will continue to make material
investments in infrastructure over the medium term and project
capital expenditure will average 15% of total expenditure in
2017-2019, in line with its historical trend. Fitch forecasts the
region's self-financing capacity will remain strong and that
about 90% of capex will be funded by the current balance and
capital revenue (2015-2016: 100%), while new borrowing
requirements will be low.

Fitch expects that the region's debt metrics will remain strong
over the medium term. Fitch projects that Moscow region's direct
risk will not exceed 30% of current revenue in 2017-2019 (2016:
23.4%) and its operating balance will be sufficient to cover
annual debt servicing (both interest and principal repayments).
The direct risk payback will be about two years (2016: 1.5
years), according to Fitch's forecast. This is below the region's
weighted average life of debt, which Fitch estimates totalled 3.3
years at end-2016.

At 1 September 2017, Moscow region's direct risk moderately
reduced to RUB92 billion from RUB98 billion at end-2016 as the
region repaid RUB6 billion maturing budget loans. The direct risk
is dominated by bank loans (52% of the debt portfolio), followed
by bonds (27%) and budget loans (21%). The region diversified its
debt portfolio in 2016 by issuing RUB25 billion seven-year bonds,
which extended 25% of its debt maturities to 2020-2023.

Nevertheless, the region's debt maturity profile remains short by
international standards with a material concentration in 2017-
2019, when 70% of the risk is due (RUB64.5 billion). In Fitch's
view, the region's refinancing risk is moderate due to a low debt
burden compared with the region's budget size and high RUB120
billion liquidity accumulated on its accounts at end-August 2017.

Moscow region has a well-diversified economy based on services
and processing industries. Its proximity to the City of Moscow
(BBB-/Positive/F3) supports the region's wealth and economic
indicators, which are strong in the national context. According
to the region's recently updated data, Moscow region's economy
outpaced the national one in 2015-2016: GRP increased by 4.3% in
2016 and 2.6% in 2015, while Russia's GDP contracted. The
region's government estimates that GRP will demonstrate 2.5%-3.5%
annual growth in 2017-2019. This will be supported by recovery of
national economy, which GDP will grow 2%-2.2% per year in 2017-
2019, according to Fitch's forecast.

Moscow region directly and indirectly controls an extensive
public sector, consisting of more than 100 companies, although
their number has decreased over the last two years. This creates
contingent risk for the regional budget through administrative
expenses, current subsidies and potential demand on extraordinary
support to the sector. At present, Fitch does not consider risk
from the sector to be significant due to the large size of the
region's budget and prudent debt practice, with no material
guarantees provided to the public sector.

The region's credit profile remains constrained by the weak
institutional framework for Russian local and regional
governments (LRGs), which has a shorter record of stable
development than many of its international peers. Weak
institutions lead to lower predictability of Russian LRGs'
budgetary policies, which are subject to the federal government's
continuous reallocation of revenue and expenditure
responsibilities within government tiers.

RATING SENSITIVITIES

Maintaining a sound operating balance at above 10% of operating
revenue, accompanied by sound debt metrics, with direct risk-to-
current balance below average debt maturity could lead to an
upgrade.


OTKRITIE BANK: Posts RUR350-Bil. Balance Sheet Hole
---------------------------------------------------
Max Seddon at The Financial Times reports that collapsed Russian
lender Otkritie posted a balance sheet hole of approximately
RUR350 billion (US$6.04 billion) on Oct. 10, one of the largest
in the country's history.
Russia's central bank rescued Otkritie in August after a deposit
run decimated what had been the country's largest privately owned
bank, the FT recounts.

Otkritie's balance sheet as of Oct. 1 now shows RUR189 billion in
negative capital -- a huge drop from RUR158 billion just a month
earlier, the FT discloses.

Trust, a failed bank Otkritie is absorbing with central bank
money, saw its balance sheet hole rise from RUR99 billion to
RUR157 billion in the same time period, the FT notes.
According to the FT, Otkritie managing director Alexander
Dmitriev said that the two banks' capital fell after they created
more reserves, saw their security portfolio lose value, and
funneled money into failing insurer Rosgosstrakh, which it is
also in the process of absorbing.
He said the bank's capital had to reach one ruble as a condition
for the rescue, the FT relays.

Russia's central bank said in August that Otkritie had a balance
sheet hole of RUR250 billion-RUR400 billion, but may revise that
initial estimate, the FT relates.

Otkritie is one of Russia's largest private listed banks.


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


CFG HOLDINGS: S&P Affirms 'B' Issuer Credit Ratings
---------------------------------------------------
S&P Global Ratings affirmed its 'B' issuer credit ratings on CFG
Holdings, Ltd. (CFGLTD). At the same time, S&P affirmed its 'B+'
issue-level ratings on its senior secured debt. The outlook is
stable.

The ratings on CFGLTD reflect its status as a non-operating
holding company. Therefore, the ratings on the company are one
notch below its consolidated operating entities'
creditworthiness.

S&P said, "Our consolidated analysis of the operating entities
reflects CFG Holdings, LP's (CFGHLP) revenue and business
concentration in its unsecured consumer lending segment. On the
other hand, the group has been able to maintain a solid capital
base through a modest growth strategy and the consistent earnings
reinvestment.  The slight deterioration in Panamanian operations
has weakened CFGHLP's asset quality metrics; however, we still
consider it to be manageable based on the group's risk profile.
In our opinion the current funding concentration reduces
financial flexibility, leaving it with few funding alternatives.

"We also affirmed the 'B+' rating on CFGLTD's $178 million senior
secured notes, given the notes' unconditional and irrevocable
guarantee from CFGHLP, and CFGLTD's existing and future
subsidiaries, subject to certain exceptions. The notes are placed
one notch above CFGLTD's issuer credit rating as the non-
operating holding company, as they rely on the creditworthiness
of the consolidated operating subsidiaries.

"The stable outlook over the next 12 months reflects our
expectation that the group will maintain a solid capital base,
backed up by continued earnings reinvestment and a modest growth
strategy. Also, we do not expect further asset quality metric
deterioration. And, finally, regulatory changes in some of the
countries where it operates will not, most likely, impact its
revenue Generation."


ENSCO PLC: Moody's Lowers Corporate Family Rating to B2
-------------------------------------------------------
Moody's Investors Service downgraded Ensco plc's (Ensco)
Corporate Family Rating (CFR) to B2 from B1, Probability of
Default Rating (PDR) to B2-PD from B1-PD and senior unsecured
notes to B2 from B1. The Speculative Grade Liquidity Rating was
affirmed at SGL-1. The rating outlook is negative. This concludes
the rating review that was initiated on May 31, 2017.

"The downgrade reflects increased financial leverage and
diminished liquidity cushion following the Atwood acquisition,
the anticipated decline in earnings and cash flow from ongoing
contract expirations, and the weak fundamentals of the offshore
drilling industry," said Sajjad Alam, Moody's Senior Analyst.
"Ensco's credit metrics will be pressured at least through 2018
despite maintaining good liquidity, a high-quality rig fleet and
a diversified global exposure."

The following summarizes rating action:

Affirmed:

Issuer: Ensco plc:

-- Speculative Grade Liquidity Rating, affirmed at SGL-1

Downgraded:

Issuer: Ensco plc:

-- Corporate Family Rating, Downgraded to B2 from B1

-- Probability of Default Rating, Downgraded to B2-PD from B1-PD

-- Senior Unsecured Regular Bond/Debentures, Downgraded to B2
    (LGD4), from B1 (LGD4), previously on review for downgrade

Issuer: ENSCO International Incorporated

-- Senior Unsecured Regular Bond/Debenture, Downgraded to B2
    (LGD4), from B1 (LGD4), previously on review for downgrade

Issuer: Pride International, Inc.

-- Senior Unsecured Regular Bond/Debentures, Downgraded to B2
    (LGD4), from B1 (LGD4), previously on review for downgrade

Outlook Actions:

Issuer: Ensco plc

-- Outlook, Changed To Negative from Rating Under Review

Issuer: ENSCO International Incorporated

-- Outlook, Changed To Negative from Rating Under Review

Issuer: Pride International, Inc.

-- Outlook, Changed To Negative from Rating Under Review

RATINGS RATIONALE

Ensco will benefit from the Atwood Oceanics, Inc. (Atwood, Caa1
RUR-Up) acquisition by adding 11 high quality rigs that were
built in recent years (four drillships, two semi-submersibles and
five jackups), thus improving Ensco's global scale,
diversification and marketing capability. Ensco management also
expects to achieve $80 million in annual cost synergies by 2019.
Ensco will use its pro forma cash balance to repay Atwood's
remaining $850 million of revolver debt and $449 million of
senior notes at closing of the acquisition. Moody's will withdraw
Atwood's ratings shortly thereafter.

Ensco's B2 CFR reflects its rapidly rising financial leverage,
declining cash flow and elevated re-contracting risks in a weak
offshore contract drilling market. A large number of Ensco's rigs
will come off contract and Moody's expects these rigs to
transition to lower rate contracts or go idle through 2018. While
contracting activity has picked up in 2017, especially in shallow
water markets, dayrates are likely to remain depressed near cash
breakeven levels at least through 2019, because of persistent
global oversupply of rigs and weak customer demand. While the
acquisition of Atwood's high-quality rigs has significantly
improved Ensco's market position and contracting prospects in an
eventual market recovery, these rigs may remain underutilized for
an extended period. The B2 rating is underpinned by Ensco's pro
forma $3.6 billion of contracted revenue backlog, strong
liquidity, large and relatively high quality offshore fleet,
excellent operating track record and diversification across
geography, rig types, and customers that should continue to lend
credit support in a protracted industry downturn.

Ensco will have very good liquidity through 2018, which is
reflected in the SGL-1 rating. Pro forma for the Atwood closing,
Ensco had approximately $1 billion of cash and an undrawn $2.0
billion revolving credit facility, $1.2 billion of which matures
in September 2022 with the remaining maturities in September
2019. Ensco should be able to cover all of its pro forma capital
expenditures, including $315 million of newbuild capex
commitments through 2018, with cash on hand and operating cash
flow. Moody's expects maintenance capex of $75 million in 2017
and $100 million in 2018. There are no debt maturities until
2019, which eliminates near-term refinancing risk. The revolving
credit facility has a 60% Total Debt/Book capitalization
covenant, and Moody's expects sufficient headroom through 2018.
All of Ensco's assets are unencumbered, giving the company the
flexibility to sell rigs, although executing such a sale might be
tough in weak markets.

The negative outlook reflects the risks of further degradation in
Ensco's credit metrics and the potentially prolonged nature of
the current industry downturn. A downgrade could result if the
EBITDA/Interest ratio cannot be sustained above 1.5x or if the
company substantially depletes its cash balance. Any material
increase in debt or loss of backlog will also pressure ratings.
Without significant debt reduction, a positive rating action is
unlikely. An upgrade could be considered if the debt/EBITDA ratio
can be sustained below 6x in a stable to improving industry
environment.

The principal methodology used in these ratings was Global
Oilfield Services Industry Rating Methodology published in May
2017.

Ensco plc is headquartered in London, UK and is one of the
world's largest providers of offshore contract drilling services
to the oil and gas industry.


INOVYN LIMITED: Moody's Hikes CFR to B1, Outlook Stable
-------------------------------------------------------
Moody's Investors Service has upgraded U.K. based polyvinyl
chloride (PVC) and caustic soda manufacturer INOVYN LIMITED
(Inovyn)'s corporate family rating (CFR) and probability of
default rating (PDR) to B1 from B2 and B1-PD from B2-PD,
respectively. Moody's also upgraded the rating on the senior
secured term loan facilities due 2021 and 2024 to B1 from B2, and
the rating of the senior secured notes due 2021 to B1 from B2.
The senior secured term loan facilities are borrowed by Inovyn's
subsidiary INOVYN Finance plc. The outlook on all ratings is
stable.

Inovyn has launched a re-pricing of its senior secured term loan
facilities and upsizing of its senior secured term loan B from
approximately EUR690 million to EUR830 million. The proposed
EUR140 million upsize, together with cash on the balance sheet
will be used to finance the early redemption of the EUR240
million senior secured notes due 2021. The rating of the senior
secured notes will be withdrawn upon closing of the transaction.

"The upgrade of Inovyn's CFR to B1 from B2 reflects the company's
better than expected operating performance since the start of the
year and Moody's views that the company should be able to
maintain its credit metrics at current levels and build up
substantial amount of cash over the next 12 months, which could
be used to further reduce its gross debt" says Hubert Allemani,
Moody's Vice President -- Senior Analyst and lead analyst for
Inovyn. "In addition, the proposed early redemption of the senior
secured notes together with the increase of the term loan B
should result in a 0.5x decrease of the company's Moody's
adjusted gross debt/EBITDA to 2.5x, on a last twelve months to
June 2017 pro forma basis".

Upgrades:

Issuer: INOVYN Finance plc

-- Senior Secured Bank Credit Facility, Upgraded to B1(LGD3)
    from B2(LGD3)

-- Backed Senior Secured Regular Bond/Debenture, Upgraded to
    B1(LGD3) from B2(LGD3)

Issuer: INOVYN LIMITED

-- Probability of Default Rating, Upgraded to B1-PD from B2-PD

-- Corporate Family Rating, Upgraded to B1 from B2

Outlook Actions:

Issuer: INOVYN Finance plc

-- Outlook, Remains Stable

Issuer: INOVYN LIMITED

-- Outlook, Remains Stable

RATINGS RATIONALE

The company's credit and debt protection metrics should remain
within what is expected for a B1 rating category. Moody's expects
that Inovyn's operational performance will remain solid in the
second half of the year, as evidenced by the strong current
trading and Moody's expectations that market conditions for both
PVC and caustic soda should remain favorable over the next 18
months. Moody's expects the company to achieve a Moody's adjusted
EBITDA of about EUR640 million this year, a strong improvement
from approximately EUR415 million achieved in 2016. This should
result in a deleveraging to 2.3x at the end of 2017 from 4.2x at
the end of 2016 on a Moody's adjusted basis. Despite the positive
momentum in the caustic soda market, Moody's remains cautious for
next year and believes that the company's Moody's adjusted EBITDA
would soften to approximately EUR600 million in 2018. However,
with a Moody's adjusted EBITDA margin ranging between 18.5% and
19.5% and positive free cash flow (FCF), Moody's expects that the
company will be able to build up cash and show solid deleveraging
on a net debt basis.

The rating is supported by Inovyn's (1) leading market position
in the European PVC and caustic soda markets; (2) large scale and
well invested manufacturing plants strategically located around
Europe and close to customers; (3) low cost base producer with
integrated plants into ethylene providing the company with
competitive advantage. The low cost position should be further
supported by the synergies expected to be achieved as a result of
the combination of the Kerling and ex Solvay S.A. businesses; (4)
recovery in the European PVC market and positive momentum in the
caustic soda market because of rationalization of capacity and
(5) Inovyn's favourable feedstock arrangements with strategic
suppliers across Europe.

However, the CFR is constrained by Inovyn's (1) participation in
the oversupplied and cyclical PVC market; (2) competitive pricing
pressure; (3) exposure to cyclical industries like construction
and highly variable raw material costs, especially the price of
ethylene, which the company cannot automatically pass on to
customers and (4) fairly high capital expenditure requirements of
about 5% of sales, notably from conversion or replacement of
mercury cell plants to membrane technology.

LIQUIDITY

Solid liquidity position underpinned by positive cash generation
and EUR206 million of cash on the balance sheet at end of August.
Pro forma for the early redemption of the senior secured notes
due 2021, cash on the balance would amount to EUR96 million.
Inovyn cash generation should also benefit from the lower annual
cash interest from the re-pricing of the term loan facilities
currently being negotiated.

In addition to the positive FCF, the company can access a EUR300
million securitization program due July 2018 to support its
working capital swings, and currently undrawn. However the
company does not have any committed revolving facilities, which
is seen as a negative in Moody's liquidity assessment.

The company's maturity profile is long and apart from the
securitization program, the first maturity is the senior secured
term loan A which is due in May 2021. The senior secured term
loan B is due in May 2024.

RATIONALE FOR STABLE OUTLOOK

The stable outlook reflects Moody's views that Inovyn's
operational performance should remain solid over the next 18
months allowing the company to generate high cash flow. Under
Moody's expectations, leverage should decrease to about 2.5x at
the end of 2017 and remain at around 2.5x over the next 18
months. On a net debt basis leverage would be around 2x.

WHAT COULD CHANGE THE RATING UP/DOWN

The ratings could be upgraded if (1) the company's Moody's
adjusted EBITDA margin were to stay sustainably in the high
teens; (2) Moody's-adjusted gross Debt/EBITDA falls below 2.0x on
a mid-cycle basis; and (3) free cash flow / debt trending at mid-
teens level.

Downward ratings pressure could occur if (1) INOVYN's Moody's
adjusted EBITDA margin falls towards the low teens; (2) free cash
flow / debt falls below 10% and (3) Moody's adjusted gross
Debt/EBITDA rises sustainably above 3.0x, on a mid-cycle basis
and (4) the company's financial policy deteriorates notably with
increased dividends or a material change in the company's
relationship with the wider Ineos group of companies.

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


MONARCH AIRLINES: Pilot Union Calls for Probe Into Collapse
-----------------------------------------------------------
Adam Samson at The Financial Times reports that a union
representing 400 former Monarch Airlines pilots has called for an
investigation by the UK government into the collapse earlier this
month of the discount airline.

According to the FT, BALPA, the union, said that the "House of
Commons Transport Committee should urgently investigate all the
circumstances and make its findings public."

In particular, it is seeking answers to whether the group needed
to file for insolvency on Oct. 2, and information into the recent
revelation that Boeing had been injecting capital into Monarch
from October 2016 to March this year, the FT notes.

"Monarch pilots made huge pay and pensions sacrifices in 2014 to
help Monarch turn itself around only to find that this was all in
vain.  They feel they did this simply to protect the financiers
and they have been sacrificed in the process," the FT quotes
BALPA as saying.

As reported by the Troubled Company Reporter-Europe on Oct. 3,
2017, The Financial Times related that Monarch Airlines, the UK
low-cost carrier and tour operator, had been placed in
administration leaving 110,000 holidaymakers stranded overseas
and resulting in the cancellation of 300,000 future bookings.

Monarch Airlines, also known as and trading as Monarch, was a
British airline based at Luton Airport, operating scheduled
flights to destinations in the Mediterranean, Canary Islands,
Cyprus, Egypt, Greece and Turkey.


MONARCH AIRLINES: Grayling in Talks with Credit, Debit Card Firms
-----------------------------------------------------------------
Polina Ivanova at Reuters reports that Britain's transport
minister said on Oct. 9 the costs of bringing home 110,000
customers of airline Monarch, which collapsed last week, were
being discussed with credit and debit card companies.

Monarch went bust last week amid intense competition over
passengers and a weaker pound following the Brexit vote decimated
company profits, Reuters relates.

It is the largest British airline to collapse and its demise left
thousands of customers stranded abroad, Reuters notes.  That led
the government to ask the Civil Aviation Authority (CAA) to
charter aircraft to bring them home -- Britain's biggest
peacetime repatriation operation, Reuters states.

According to Reuters, transport minister Chris Grayling told
parliament "I am also aware of the duty this government has to
the taxpayer and . . . we've entered into discussions with
several third parties with the aim of recovering costs of the
operation.

"We're currently engaged in constructive discussions with the
relevant credit and debit card providers so we recoup from them
some of the costs to taxpayers of these repatriation flights.

"We're also having similar discussions with other travel
providers through which passengers may have booked a Monarch
holiday."

Administrators at KPMG are currently in the process of selling
off Monarch's assets, a spokeswoman, as cited by Reuters, said,
including airport slots, prepaid fuel, property and equipment.

Three-quarters of Monarch passengers who were abroad when the
company folded have now been brought home, Mr. Grayling said,
with the operation requiring up to 35 planes at any one time,
borrowed from 27 different airlines, Reuters recounts.

Monarch's demise also left over 1,800 workers redundant but Mr.
Grayling said the airline's experienced former employees were in
high demand from rivals, Reuters relays.

Monarch Airlines, also known as and trading as Monarch, was a
British airline based at Luton Airport, operating scheduled
flights to destinations in the Mediterranean, Canary Islands,
Cyprus, Egypt, Greece and Turkey.


                            *********

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

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

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


                            *********


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

Troubled Company Reporter-Europe is a daily newsletter co-
published by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA.
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.


                 * * * End of Transmission * * *