/raid1/www/Hosts/bankrupt/TCREUR_Public/171027.mbx         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

          Friday, October 27, 2017, Vol. 18, No. 214


                            Headlines


F R A N C E

* FRANCE: Business Failures Down 5.2% in Third Quarter 2017


G E R M A N Y

ADLER REAL ESTATE: S&P Raises CCR to 'BB', Outlook Stable
INEOS STYROLUTION: Moody's Hikes CFR to Ba2, Outlook Stable
TAKKO FASHION: Moody's Hikes CFR to B2, Outlook Stable
TAKKO FASHION: S&P Places 'CCC+' CCR on CreditWatch Positive
TELE COLUMBUS: Moody's Revises Outlook to Pos., Affirms B2 CFR


I R E L A N D

CORDATUS LOAN: Moody's Hikes Class E Notes Rating From Ba2
WEATHERFORD INT'L: S&P Cuts CCR to 'B', Outlook Negative


I T A L Y

ALITALIA SPA: Cerberus Capital Makes Takeover Proposal
BPER BANCA: Moody's Lowers Sr. Unsecured Issuer Rating to Ba3
SALINI IMPREGILO: Fitch Raises Long-Term IDR to BB+


N E T H E R L A N D S

ACCUNIA EUROPEAN II: Moody's Assigns B1 Rating to Class F Notes
ACCUNIA EUROPEAN II: S&P Assigns B- (sf) Rating to Class F Notes
BABSON EURO 2015-1: Moody's Hikes Class F Sr. Notes Rating to B1
NORTHERN LIGHTS III: Moody's Cuts US$1BB Notes Rating to B2


P O R T U G A L

HEFESTO STC: Moody's Assigns (P)Caa3 Rating to Class B Notes


R U S S I A

PETROPAVLOVSK PLC: S&P Places B- CCR on CreditWatch Positive
PETROPAVLOVSK PLC: Fitch Rates Proposed Guaranteed Notes B-(EXP)
RUSSIA: Strongest Non-Financial Cos. Ratings Remain Fixed at Ba1


S P A I N

BBVA CONSUMO 7: Moody's Ups B1 Class B Notes Rating From B1
CODERE SA: S&P Affirms 'B' Corp Credit Rating, Outlook Stable


S W E D E N

LM ERICSSON: Moody's Lowers CFR to Ba2, Outlook Negative


T U R K E Y

FIBABANKA AS: Fitch Rates US$300MM Sr. Unsecured Notes 'BB-(EXP)'


U K R A I N E

CAPITAL BANK: Market Removal Decision Upheld by Supreme Court


U N I T E D   K I N G D O M

COGENPOWER PLC: Creditors Back Company Voluntary Arrangement
ENQUEST PLC: Faces Cash Woes One Year Following Rescue Deal
MONARCH AIRLINES: Administrators Seek Judicial Review on Slots
WELLINGTON PUB: Fitch Affirms B- Rating Class B Notes

* European ABS SME Loan/Lease 60-90 day Delinquencies Improved


X X X X X X X X

* BOOK REVIEW: AS WE FORGIVE OUR DEBTORS


                            *********


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

* FRANCE: Business Failures Down 5.2% in Third Quarter 2017
-----------------------------------------------------------
Rudy Ruitenberg at Bloomberg News, citing data-analysis firm
Altares, reports that companies in France that filed for
protection from creditors, were placed in receivership or filed
for bankruptcy fell 5.2% in the third quarter of 2017 from the
year-earlier period.

According to Bloomberg, French business failures in the third
quarter of 2017 totaled 10,830, down from 11,422 a year earlier.

Quarterly business failures fell below 11,000 for the first time
in a decade, Bloomberg discloses.



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


ADLER REAL ESTATE: S&P Raises CCR to 'BB', Outlook Stable
---------------------------------------------------------
S&P Global Ratings raised its long-term corporate credit rating
on German property investment company Adler Real Estate AG to
'BB' from 'BB-'. The outlook is stable.

The upgrade reflects Adler's recently revised financial policy
with a tighter target loan-to-value ratio of below 55% (62% as of
June 30, 2017, as per the company's calculation of total assets
minus cash to reported debt minus cash, versus 67% debt-to debt-
plus equity as calculated by S&P Global Ratings). S&P said, "We
also factor in our expectation of improvements in Adler's debt-
protection metrics already by end-2017 thanks to positive
revaluations and debt repayment with part of proceeds from its
sale of 80% of its subsidiary, Accentro Real Estate AG, which
specializes in selling properties to individuals, to Vestigo
Capital Advisors. Adler recently announced this transaction,
which includes the sale of 92% of its convertible bonds issued by
Accentro, for a total price of EUR180 million. We understand that
Adler has already received the first payment and will continue to
do so in tranches over the next 13 months. This transaction does
not affect our calculation of Adler's EBITDA, as we originally
excluded gains from the sale of apartments from it, since we
treated such revenues as volatile and nonrecurring."

S&P said, "As a result, we project the S&P Global Ratings-
adjusted ratio of debt to debt plus equity for Adler will be
lower than 65%, and the adjusted EBITDA-to-interest-coverage
ratio will exceed 1.3x by the end of 2017. We also understand
that Adler plans to accelerate its disposal program of its non-
core assets, and this should lead to improvements in its
occupancy ratio by a few percentage points from the current 90%.
We also expect improvement in occupancy on the back of Alder's
strategy of active asset management and a better tenant
proposition through integrating all property management services
in-house.

"In our view, Adler has a sound portfolio of residential
properties in the north and west of Germany, mainly in smaller
cities. Adler is one of the largest property companies in
Germany, managing a portfolio of about 50,000 units valued at
about EUR2.4 billion. Adler enjoys a high degree of tenant and
asset diversity, which we believe compares favorably with that of
most peers we rate in the same business risk category. The
average stay per tenant is long, at 10 years, with a low
percentage of tenants leaving each year.

"Our assessment of Adler's business risk reflects our view that
German residential properties benefit from lower volatility in
rents and asset values than in other countries and the commercial
real estate sector as a whole. We think that demand from German
households for midsize apartments with midmarket rents will
remain stable in the portfolio's main geographic locations. We
believe that rents will continue to increase steadily in the next
two to three years, due to low levels of new construction. We
note that there is limited development risk in the portfolio
because development is confined to the renovation of existing
properties.

"The main constraints to Adler's business risk profile are the
smaller portfolio size than that of other rated German peers,
relatively high vacancy rate (10%), exposure to smaller cities
with limited opportunities for employment, and lower rent levels
than the regional market average. While Adler focuses on smaller
cities and secondary locations, its strategy is to choose
apartment portfolios in cities with low unemployment and
established employers in the region, or are close to large
metropolitan areas. We understand that there is some potential
rent adjustment at renewal and re-letting, since Adler's rent
levels (EUR5 per square meter) are below market average in the
respective regions.

"The stable outlook reflects our expectation of continued
favorable demand for residential real estate in Germany
translating into positive revaluations of Alder's portfolio. Over
the next year we anticipate the S&P Global Ratings-adjusted ratio
of debt to debt plus equity for Adler will be less than 65% and
that its interest coverage ratio will be more than 1.3x.

"We could raise the rating if Adler demonstrates a stronger
improvement in credit metrics than we anticipate in our base case
and strengthens its financial risk profile. This could occur if
the debt-to-debt-plus-equity ratio is below 60% and EBITDA
interest coverage surpasses 1.8x on a sustainable basis. We
consider that this could result from higher-than-expected
positive portfolio revaluation in 2018 combined with the
company's refinancing efforts.

"We could consider lowering the rating if, in particular, Adler's
debt to debt plus equity stayed above 65% and its EBITDA interest
coverage ratio drops below 1.3x, as a result of unexpected debt-
financed acquisitions or lower-than-expected revaluations and
higher cost of funding. A negative rating action might also
follow if the company's operating performance is weaker than we
anticipated. The company's ability to improve its vacancy rate
will be a key area to monitor."


INEOS STYROLUTION: Moody's Hikes CFR to Ba2, Outlook Stable
-----------------------------------------------------------
Moody's Investors Service has upgraded INEOS Styrolution Holding
Limited's (Styrolution) Corporate Family Rating (CFR) to Ba2 from
Ba3 and Probability of Default Rating (PDR) to Ba2-PD from Ba3-
PD. Concurrently, the rating agency upgraded to Ba2 from Ba3 the
ratings of the outstanding term loan B facilities due March 2024,
borrowed by INEOS Styrolution Group GmbH and INEOS Styrolution US
Holding LLC. The outlook on all ratings is stable.

RATINGS RATIONALE

The upgrade acknowledges the improved operating performance of
Styrolution over the last 18 months, the improvement in debt
protection metrics, low leverage of about 1.2x pro forma for the
repayment of the EUR250 million borrowed from INEOS Group
Holdings SA (INEOS), and solid liquidity position.

Styrolution's improved earnings and cash flow profile is driven
by the strong market fundamentals close to top of the cycle for
styrene monomers and pricing improvement across Styrolution's
product chain. The company's Moody's adjusted EBITDA margin
remains high at 16.6% at the end of June 2017, even if slightly
under the historically strong margin of 18.9% achieved in 2016.
Styrolution is also focusing more on specialized products as
evidenced from the acquisition of K-Resin in South Korea closed
in March this year, which will further strengthen the company's
market share in the region. The development of the specialized
products portfolio is a strategic axe and should somewhat reduce
the EBITDA volatility in the future from the more commoditised
products. The company's profitability is also supported by
management's focus on costs, which places Styrolution as one of
lower cost producer globally.

While the styrene monomer market saw some capacity
rationalization and industry consolidation over the past decade,
the market is currently seen as being close to top of the cycle
and Moody's expects that Styrolution's profitability will soften
next year because of pressure on prices. Styrene is a cyclical
commodity widely produced globally and prices remain the main
differentiating factor. Moody's expects the company's adjusted
EBITDA to be around EUR690 million in 2018, compared to EUR846
million achieved in 2016 and top of cycle EBITDA of between
EUR850 and EUR870 million expected for this year. Moody's
considers that specifics issues such as outages and supply
concerns which benefitted the company during 2016 and in the
first quarter of 2017 will not reoccur next year and that the
market will normalise.

Moody's believes that the company's free cash flow (FCF) will
remain solid in 2018 at about EUR175 million, compared to EUR149
million in 2016 and despite the expected lower Moody's adjusted
EBITDA. FCF will however be down from the historically high level
expected this year of approximately EUR300 million, before any
effect of the proposed INEOS loan repayment. Compared to 2016,
the company's cash generation will benefit this year from savings
on the interests estimated at about EUR50 million following the
repayment of the expensive PIK loan and repayment of EUR100
million of the term loan made at the end of 2016. Cash savings on
the service of the debt also come from the successive rounds of
debt re-pricings and proposed debt repayment to INEOS. FCF should
however be constrained by the higher anticipated capital
expenditures next year due to various product portfolio or
capacity increase projects.

Styrolution's Moody's adjusted gross debt to EBITDA at the end of
June 2017 was low at 1.5x, down from 2.2x at the end of 2016.
Styrolution's reduced its leverage mostly because of stronger
EBITDA. In line with Moody's expectations of lower EBITDA and pro
forma of the debt repayment to INEOS, Moody's adjusted leverage
should marginally increase to around 1.6x in 2018.

Stryrolution's credit metrics are currently solid for the Ba2
rating category. However this reflects the top of cycle
conditions for the cyclical and commoditized styrene monomer
market. Moody's expects that the company will be able to defend
the headroom built over the last 18 months with the rating agency
expectation that the Ba2 rating could be maintained in weaker
market conditions. The rating also reflects the benefits from the
integration into the INEOS chemical group.

Styrolution's Ba2 CFR is supported by (1) the company's strong
operating performance since 2015, expected to remain robust in
the next 12 to 18 months, supporting positive cash flow
generation; (2) low leveraged and prudent financial policy of net
leveraged of under 2x through the cycle; (3) leading global
market share in the styrenics market based on capacity, combined
with a global operational footprint; (4) cost leadership
position, improved because of cost reductions associated with the
restructuring programs in place; and (5) benefit from integration
in the wider INEOS Limited chemical group of companies.

The CFR rating is constrained by (1) Styrolution's exposure to
economic cycles and feedstock price volatility, with its large
exposure to cyclical industries such as the automotive,
construction and electronics; (2) lack of product
diversification, focused on the styrenics chain; and (3)
substitution threat for its polystyrene and most standard ABS
products from other plastic types.

LIQUIDITY

Moody's views Styrolution's liquidity profile as solid and
underpinned by positive cash generation and EUR295 million of
cash on the balance sheet at end of June. Styrolution's cash
generation should also benefit from the lower annual cash
interest from the re-pricing of the term loan facilities and debt
repayment.

In addition to the positive FCF, the company can access a EUR500
million securitization program to support its working capital
swings. At the end of June 17, EUR290 million were available.
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 due in March 2019, the first maturity is
the term loan B due in March 2024.

RATING OUTLOOK

The stable outlook incorporates Moody's expectation that the
company will maintain a strong financial profile over the next 18
months. Additionally, the outlook contemplates that Styrolution
will remain free cash flow generative and continue to strengthen
its balance sheet, in line with its financial policy.

WHAT COULD CHANGE THE RATING UP/DOWN

Given the company's size and its exposure to a cyclical industry,
Moody's considers any further upgrade unlikely in the short term,
unless the company is able to improve its product mix towards
specialties products, leading to a more stable Moody's adjusted
EBITDA through the cycle. Moody's could also consider an upgrade
if Styrolution maintains an adjusted gross debt to EBITDA below
2x through the cycle and the company develops a track record of a
conservative financial policy.

Conversely, ratings could be downgraded if performance
deteriorates such that (1) the company's adjusted EBITDA margin
trends sustainably around 10%; (2) its Moody's adjusted gross
debt to EBITDA rises above 3.0x on a sustained basis; and (3) the
company's financial policy deteriorates notably with increased
dividends or a material change in the company's relationship with
the wider INEOS Limited group of companies.

PRINCIPAL METHODOLOGY

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

INEOS Styrolution Holding Limited, with management based in
Frankfurt, Germany, is a leading global styrenics supplier (based
on revenues), especially in Europe and North America. INEOS
Styrolution is focused on the production and sale of polystyrene,
acrylonitrile butadiene styrene (ABS), styrene monomer, and other
styrenic specialities. The group is a wholly owned subsidiary of
INEOS AG (unrated). In 2016, INEOS Styrolution's revenues and
Moody's-adjusted EBITDA were EUR4.5 billion and EUR846 million,
respectively.


TAKKO FASHION: Moody's Hikes CFR to B2, Outlook Stable
------------------------------------------------------
Moody's Investors Service has upgraded the corporate family
rating (CFR) of Takko Fashion S.a.r.l. to B2 from Caa1 and its
probability of default rating (PDR) to B2-PD, from B3-PD.
Concurrently, Moody's assigned a B2 (LGD4) rating to the proposed
new EUR510 million senior secured fixed and floating notes to be
issued by Takko Luxembourg 2 S.C.A., the proceeds of which will
be used to repay that company's existing notes totalling EUR525
million. The ratings of the existing notes will be withdrawn upon
repayment but in the meantime continue to be rated Caa1. The
outlook on all the ratings is stable.

"The upgrade to B2 primarily reflects the substantial and
sustained improvement in operating performance, as well as the
launch of the refinancing transaction. Together, those elements
put the company and its capital structure on a sustainable path."
says David Beadle, a Moody's Vice President -- Senior Credit
Officer and lead analyst for Takko.

RATINGS RATIONALE

The B2 CFR reflects Takko's (1) sustained improvement in
operating performance, including profitability and cash flow
metrics, (2) established brand and successful business model in
the value apparel segment, (3) some degree of geographic
diversification; and (4) reasonable opening pro forma leverage
with potential for deleveraging through further growth in
profitability.

At the same time, the B2 CFR is constrained by the company's (1)
exposure to the highly competitive and fragmented fashion market
with sales concentration in Germany, (2) relatively small size
and market share compared to main competitors; and (3) execution
risk associated with the resumption of a net store opening
strategy.

Improvement in profitability has resulted in Moody's-adjusted
free cash flow (FCF, before debt repayments in Moody's
definition) improving since FY2015 and returning to positive
territory from FY2016. For the LTM to July 2017, helped by
controlled capex needs and efficient working capital management,
the company generated EUR45 million of Moody's adjusted FCF.
Moody's expects the company to continue to generate meaningful
positive free cash flow due to limited working capital needs and
in spite of an uptick in expansion capex, linked to store opening
plans.

Pro forma for the refinancing transaction, Moody's-adjusted gross
leverage at the end of July 2017 was 4.7x, a level the rating
agency typically considers acceptable for a B2 rated retailer.
Moody's expects that leverage will move towards 4.5x by FY2019.
This will be achieved through EBITDA growth rather than debt
repayments given the absence of the debt maturities until 2023.
The main EBITDA growth drivers will be: (i) low single-digit
like-for-like growth; (ii) store openings; (iii) continued focus
on operating costs. However, while expecting Takko's gross
margins to remain strong the rating agency cautions recent levels
may not be fully sustainable in the medium term.

Moody's views Takko's liquidity as adequate as at the end of July
2017, supported by strong operating cash flow resulting in a
fully undrawn RCF and EUR60 million of cash at that stage. This
should be sufficient to withstand seasonal fluctuations in
working capital. However, Takko's liquidity is also dependent on
continuing favourable terms with suppliers, which are supported
by typical usage of the Letter of Credit (LC) Facility of around
EUR150 million. Takko's Revolving Credit Facility (RCF) has a
single minimum EBITDA covenant against which comfortable headroom
is expected to be maintained.

STRUCTURAL CONSIDERATIONS

The proposed refinancing will include a 6 year maturity for the
new senior secured notes, while the new maturity date for the RCF
and LC Facility will be 5.5 years after closing of the bond
transaction. The RCF and LC Facility limits will initially
continue to be EUR85 million and EUR190 million respectively,
before stepping down to EUR71.5 million and EUR185 million
respectively in April 2018, which was the original maturity date
under the existing documentation.

As with the existing financing structure, under the terms of an
Inter-Creditor Agreement, the RCF and LC Facility rank ahead of
the senior secured notes in an enforcement payment waterfall,
despite sharing the same guarantors and first-priority security
package.

The PDR of B2-PD reflects the use of a 50% family recovery
assumption, consistent with a capital structure including a mix
of bond and bank debt. The B2 (LGD4) rating assigned to the
proposed new senior secured notes reflects their presence as the
largest debt instrument in the capital structure, ranking behind
the super-senior RCF. In Moody's loss-given-default analysis
Moody's have assumed trade payables would rank alongside the RCF
given the support available to qualifying trade payables via the
LC Facility.

RATIONALE FOR THE STABLE OUTLOOK

The stable outlook reflects Moody's view that operating results
will be at least stable over the next 12 to 18 months. Indeed,
the rating agency expects continued steady improvement in
profitability, driven by positive like-for-like sales, resilient
gross margin and good operating cost management.

WHAT COULD CHANGE THE RATING UP/DOWN

Positive rating pressure is unlikely in the short term but could
develop if Moody's adjusted gross leverage reduced sustainably
below 4.5x while the business remains free cash flow generative.
The company will also need to demonstrate its ability to carry
out its store opening plans successfully.

Downward pressure on the ratings could arise if earnings or cash
flow generation weaken as a result of lower than expected like-
for-like sales growth, cost inflation or poor execution of the
company's strategy, notably in terms of store openings. In
addition, quantitatively, negative pressure would be exerted on
the rating if Moody's adjusted gross leverage increased above
5.5x. Deteriorating liquidity would also lead to downward rating
pressure.

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Retail
Industry published in October 2015.

COMPANY PROFILE

Founded in 1982, Takko is a German discount fashion retailer,
offering a range of own-label apparel products and accessories
for women, men and children. Takko operates a portfolio of around
1,850 retail stores, principally in out-of-town locations. Since
2011, the business has been majority owned by funds advised by
private equity firm Apax Partners.

During the 12-months period ended July 31, 2017 (LTM July 2017),
Takko reported net sales of approximately EUR1.1 billion and
adjusted EBITDA of EUR144 million, of which 64% and 67% came from
Germany, respectively. The company also has a presence in 15
other European countries, including Austria, the Netherlands, the
Czech Republic, Hungary, Romania, Poland, Slovakia and Italy.


TAKKO FASHION: S&P Places 'CCC+' CCR on CreditWatch Positive
------------------------------------------------------------
S&P Global Ratings said that it placed its 'CCC+' long-term
corporate credit rating on Germany-based discount apparel
retailer Takko Fashion S.a.r.l. on CreditWatch with positive
implications.

S&P said, "At the same time, we assigned a 'B' issue-level rating
to the proposed EUR510 million senior secured notes to be issued
by Takko Luxembourg 2 S.C.A, comprised of floating-rate and
fixed-rate tranches. The recovery rating is '3', indicating a
'meaningful' recovery (50%-70%; rounded estimate 55%).

"In addition, we affirmed our 'CCC+' rating on the existing
EUR145 million floating-rate and EUR385 million fixed-rate senior
secured notes issued by Takko Luxembourg 2 SCA; the recovery
rating is unchanged at '4'.
The proposed ratings are subject to the successful completion of
the transaction, including receipt of the final documentation. If
the refinancing transaction does not complete or the scope of the
transaction departs materially from the current plan, we reserve
the right to withdraw or revise our ratings."

"We aim to review the CreditWatch placement when the proposed
refinancing has been completed and we have reviewed the final
results of the refinancing exercise, the final documentation of
Takko's notes offering and debt prepayment, and the extended
maturity of the group's RCFs," said S&P Global Ratings credit
analyst Mickael Vidal.

S&P said, "We will likely raise the long-term corporate credit
rating on Takko to 'B' if it successfully completes the
refinancing, repays the existing notes, and extends the debt
maturities.

"Failure to implement the planned changes to the group's capital
structure or further significant delays (more than 90 days) in
implementing them would likely prompt us to affirm the 'CCC+'
rating. We could limit an upgrade to one notch only if the final
transaction terms differ materially from our base case, in
particular if our expectation of comfortable level of reported
free operating cash flow is no longer applicable."


TELE COLUMBUS: Moody's Revises Outlook to Pos., Affirms B2 CFR
--------------------------------------------------------------
Moody's Investors Service has affirmed the ratings of Tele
Columbus AG including the B2 corporate family rating (CFR), the
B2-PD probability of default rating (PDR) and the company's B2
senior secured bank facility ratings. At the same time, Moody's
changed the ratings outlook to positive from stable.

"The change in outlook to positive takes into account the
continued healthy operating momentum in Tele Columbus' business
since the acquisitions of primacom and pepcom in H2 2015. The
company has been able to maintain a stable homes connected base
and remains on track to achieve its robust revenue and Normalised
EBITDA guidance for 2017," says Gunjan Dixit, a Moody's Vice
President -- Senior Credit Officer and lead analyst for Tele
Columbus.

"The rating action also reflects Moody's expectations for Moody's
adjusted gross debt/ EBITDA for Tele Columbus to trend towards
the threshold defined for upward ratings pressure of below 4.5x
in the next 12-18 months," adds Ms. Dixit.

RATINGS RATIONALE

The acquisitions of primacom and pepcom continue to support the
achievement of mid-single-digit revenue growth in percentage
terms targeted for 2017. In H1 2017, Tele Columbus' normalised
EBITDA growth was up 7% from H1 2016and the company is on track
to achieve its guided c 10% Normalised EBITDA growth for 2017.

Moody's acknowledges the potential for further margin increase as
the company realizes synergies from the integration of pepcom and
primacom, and continues to extend its share of homes connected
and upgraded for two-way communication. The company is targeting
synergies related to operating costs and capital spending of
around EUR40 million run rate by 2018, out of which EUR25 million
are expected to be achieved in 2017 with the completion of the
core IT systems integration.

Tele Columbus' reported net debt/normalised EBITDA stood at 4.9x
for the 12 months ended June 31, 2017 compared with around 4.3x
as of March 2015, prior to the acquisitions of primacom and
pepcom. The company's leverage is currently exceeding its own
publicly stated medium term net debt/normalised EBITDA target of
3.0x-4.0x, but it aims to return to its target corridor in the
next 12-24 months. Moody's-adjusted Gross debt/ EBITDA for Tele
Columbus stood at 5.1x for the last twelve months ending June 30,
2017. Moody's expects the company to remain focused on achieving
deleveraging such that its Gross debt/ EBITDA ratio (as adjusted
by Moody's) trends below 4.5x in the next 12-18 months.

As of June 2017, 64% of total homes connected of Tele Columbus'
network were fully upgraded to two-way communication, and the
company continues to invest toward its medium-term target of 71%.
In line with the company's investment strategy, Moody's expects
its reported capital spending/sales to remain high at 33%-35% for
2017, after which it will gradually decline toward the historical
industry average of around 20%-25%. The reduction in capex should
enable the company to generate positive free cash flow (after
capex) from 2018 onwards. Whilst the company currently does not
pay dividends, Moody's expects that growing free cash flow
generation will increase pressure to establish a dividend policy,
which the agency believes will have to balance shareholder and
creditor interests, within the limits of the company's net
leverage target of between 3.0x and 4.0x.

Tele Columbus's B2 CFR continues to reflect the (1) company's
solid market position in core eastern German territories as well
as key cities such as Hamburg, Berlin, Leipzig and Munich; (2)
high quality of the fully owned and upgraded network; (3)
significantly increased financial and operational flexibility
after its IPO in January 2015; (4) company's well defined growth
strategy for the medium term; and (5) its good cost control,
supporting overall Normalised EBITDA growth.

However, the rating also remains cognizant of (1) the relatively
small scale of company's operations compared with other rated
peers; (2) intense competition mainly from telecoms (in
particular Vodafone) especially for large housing association
contracts; (3) high reported leverage, above the company's
medium-term target; and (4) capital spending peak through in 2017
limits free cash flow generation.

RATIONALE FOR THE POSITIVE OUTLOOK

The positive outlook reflects Moody's view that the company
remains on track to achieve its medium term revenue and
Normalised EBITDA growth guidance of mid-to-high single digit and
high single digit, respectively. The agency would also expect the
company to have future dividend policy that allows it to operate
within its stated leverage policy target ratio of 3.0x-4.0x on a
sustained basis.

In addition, the positive outlook assumes that the company will
pursue opportunities for consolidation of smaller German cable
companies and that those will be funded without a material
increase in leverage.

WHAT COULD CHANGE THE RATING - UP/DOWN

Upgrade ratings pressure is likely to develop with (1) steady
operating progress including a continued growth in in the share
of homes connected and upgraded for two-way communication while
maintaining a stable homes connected base; and (2) Moody's
adjusted gross debt/EBITDA ratio is maintained sustainably below
4.5x together with positive free cash flow generation (after
capex and dividends).

Downward pressure for the rating or outlook could ensue in case
of (1) a more than temporary deterioration of Tele Columbus'
Moody's adjusted gross debt/EBITDA leverage ratio to a level
above 5.5x; (2) a failure in strategy execution e.g. RGU per
subscriber and ARPU growth stall; or (3) the company begins to
experience a material deterioration in the "homes connected"
base.

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Global Pay
Television - Cable and Direct-to-Home Satellite Operators
published in January 2017.

LIST OF AFFECTED RATINGS

Affirmations:

-- Corporate Family Rating, Affirmed B2

-- Probability of Default Rating, Affirmed B2-PD

-- Senior Secured Bank Credit Facility, Affirmed B2

Outlook Actions:

-- Outlook, Changed To Positive From Stable

Tele Columbus AG is a holding company, which through its
subsidiaries offers basic cable television services (CATV),
premium TV services and, where the network is migrated and
upgraded, Internet and telephony services in Germany where it is
the third largest cable operator. The company is based in Berlin,
Germany and reported revenue of EUR486 million and EBITDA of
EUR257 for the last twelve months period to June 30, 2017.


=============
I R E L A N D
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CORDATUS LOAN: Moody's Hikes Class E Notes Rating From Ba2
-----------------------------------------------------------
Moody's Investors Service announced that it has taken rating
actions on the following classes of notes issued by Cordatus Loan
Fund I P.L.C.:

-- EUR24.3M (current balance EUR5.8M) Class C Deferrable Secured
    Floating Rate Notes due 2024, Upgraded to Aaa (sf);
    previously on Dec 16, 2016 Upgraded to Aa1 (sf)

-- EUR31.5M Class D Deferrable Secured Floating Rate Notes due
    2024, Upgraded to Aaa (sf); previously on Dec 16, 2016
    Upgraded to A3 (sf)

-- EUR18M Class E Deferrable Secured Floating Rate Notes due
    2024, Upgraded to Aa2 (sf); previously on Dec 16, 2016
    Affirmed Ba2 (sf)

Cordatus Loan Fund I PLC, issued in January 2007, is a
collateralised loan obligation (CLO) backed by a portfolio of
mostly high-yield senior secured European loans managed by CVC
Credit Partners Group Ltd. The transaction's reinvestment period
ended in January 2014. GBP liabilities in the transaction have
repaid in full; as per the latest trustee report, GBP assets
remaining total GBP 7.25 million.

RATINGS RATIONALE

According to Moody's, the rating actions taken on the notes are a
result of significant deleveraging of the Variable Funding Notes
(VFN), Class A2 and Class B notes following amortisation of the
portfolio and the improvement in the credit quality of the
underlying collateral pool since the last rating action in
December 2016. In addition, principal proceeds of EUR10.58
million and GBP 1.35 million are reported in the September 2017
trustee data.

VFN, Class A2, Class B and Class C notes paid down by GBP 14.24
million, GBP 7.67 million, EUR39.6 million and EUR18.48 million
respectively on the July 2017 payment date. As a result of the
deleveraging, over-collateralisation (OC) ratios have increased
across the capital structure. According to the trustee report
dated September 2017, Class C, Class D and Class E OC ratios are
reported at 1538.62%, 239.89% and 161.83% respectively, compared
to the October 2016 OC levels of 152.40%, 126.23%, and 114.95%
respectively.

The key model inputs Moody's uses in its analysis, such as par,
weighted average rating factor, diversity score and the weighted
average recovery rate, are based on its published methodology and
could differ from the trustee's reported numbers. In its base
case, Moody's analysed the underlying collateral pool as having a
performing par and principal proceeds of EUR89.07 million, zero
defaults, a weighted average default probability of 11.37%
(consistent with a WARF of 2242 over a weighted average life of
2.89 years), a weighted average recovery rate upon default of
40.19% for a Aaa liability target rating, a diversity score of 9
and a weighted average spread of 3.63%.

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

Methodology Underlying the Rating Action

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

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

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

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

Additional uncertainty about performance is due to the following:

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

2) Foreign currency exposure: The deal has some exposure to non-
EUR denominated assets. Volatility in foreign exchange rates will
have a direct impact on interest and principal proceeds available
to the transaction, which can affect the expected loss of rated
tranches.

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


WEATHERFORD INT'L: S&P Cuts CCR to 'B', Outlook Negative
--------------------------------------------------------
S&P Global Ratings lowered its corporate credit rating on
Ireland-incorporated diversified oilfield services company
Weatherford International plc to 'B' from 'B+'. The outlook is
negative.

S&P said, "At the same time, we lowered our issue-level ratings
on the company's secured term loan and its senior unsecured
guaranteed revolving credit facility to 'BB-' from 'BB'. The
recovery on this debt remains '1', indicating our estimate of
very high (90% to 100%; rounded estimate: 95%) recovery to
creditors in the event of a payment default. We also lowered our
issue-level ratings on the company's senior unsecured debt to 'B-
' from 'B'. The recovery rating on this debt remains '5',
indicating our estimate of modest (10% to 30%; rounded estimate:
15%) recovery to creditors in the event of a payment default.

"The downgrade reflects a reassessment of expected financial
performance for the remainder of 2017 and 2018, such that funds
from operations (FFO)/debt will remain under pressure as the
recovery in industry conditions will be weaker-than-expected and
the full impact of Weatherford's cost-reduction initiatives will
take longer to fully materialize. We have lowered our projected
cash flows for the rest of 2017 and 2018, limiting both FFO and
cash flow available for debt repayment. As a result, we now
expect FFO/debt to remain below 5% through 2018, increasing above
5% in 2019. We have not assumed any potential asset sales beyond
the OneStim joint venture previously announced, although we
believe the likely positive benefits from any additional
portfolio rebalancing could improve leverage starting next year.

"The negative outlook reflects our view that Weatherford's credit
measures could remain weak for our expectations for the rating in
2018, unless the market recovers more quickly than we anticipate
or the company is able to reduce total debt through potential
asset sales. Although Weatherford has indicated that it is
undergoing a strategic review of its business lines and
formulating plans to delever significantly by 2019, the steps may
not be enough to both improve FFO/debt back to the 12% level in
2018 and keep the company's business risk in line with higher-
rated peers.

"We could lower the rating if we no longer expect Weatherford's
FFO/debt to improve back to around 5%, or if liquidity
deteriorated. This would most likely occur if the company's
margins did not improve next year, as we currently expect.

"We could revise the outlook to stable if we expected
Weatherford's FFO/debt to approach 12% for a sustained period
along with adequate liquidity, which would most likely occur if
the company were able to improve operating margins and free cash
flows by realizing the full effects of cost-cutting initiatives,
or if the company uses potential asset sale proceeds to pay down
debt."


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


ALITALIA SPA: Cerberus Capital Makes Takeover Proposal
------------------------------------------------------
James Politi at The Financial Times reports that Cerberus Capital
Management, the US private equity group, has approached Alitalia
about a bid that would allow Italy's troubled flag carrier to
remain independent, in a move that could alter the race to
control the airline, say people close to the talks.

The move by Cerberus comes one week after potential trade buyers
including EasyJet and Lufthansa submitted binding offers for
Alitalia, or parts of it, to the formal sale process being run by
officials in Rome, the FT notes.

Since collapsing into administration in May, Alitalia has been
managed by three government-appointed commissioners and the
government has extended a EUR900 million bridge loan to keep the
company flying through September 2018, the FT relays.

Cerberus opted not to submit its own binding offer because it
considered the terms of the public tender too restrictive, the FT
states.

According to the FT, the people said the New York-based buyout
group had since told Alitalia it was still interested in buying
the lossmaking airline if it could be comprehensively
restructured.  They added that Cerberus had been studying
Alitalia for the past few months and held several conversations
with the commissioners about its interest, the FT notes.

Cerberus has suggested that it would be willing to invest funds
worth somewhere in the "low nine-digits", or between EUR100
million and EUR400 million, to gain control of Alitalia, the FT
discloses.

Its plan also calls for the Italian government to retain a stake
in the airline, while trade unions would benefit from some form
of "profit sharing" in the Cerberus scheme, according to the FT.

People briefed on the talks said Cerberus had argued to the
commissioners and the company that it could make Alitalia
"sustainable, competitive and independent" through a bid for the
whole company, the FT relays.

The people, as cited by the FT, said Cerberus has also offered to
"step in" to get a "head start" on reorganizing Alitalia for no
fee even before making its investment, to take advantage of the
broad powers the commissioners have to revamp the airline during
the insolvency process.

                         About Alitalia

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

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

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

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

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


BPER BANCA: Moody's Lowers Sr. Unsecured Issuer Rating to Ba3
-------------------------------------------------------------
Moody's Investors Service downgraded the senior unsecured MTN and
issuer ratings of BPER Banca S.p.A. (BPER) to (P)Ba3 and Ba3
respectively, from (P)Ba2 and Ba2. At the same time, the rating
agency affirmed BPER's ba3 standalone baseline credit assessment
(BCA) and Adjusted BCA, the deposit ratings at Baa3/Prime-3 and
the CR Assessments at Baa3(cr)/Prime-3(cr). A full list of
affected ratings can be found at the end of this press release.

The downgrade of the senior MTN and issuer ratings reflects
BPER's reducing stock of bail-in-able debt, which results in
higher loss-given-failure for senior unsecured instruments.

The outlook on the long-term deposit was changed to negative from
stable, and the outlook on the issuer rating remains negative.

RATINGS RATIONALE

Moody's affirmed BPER's ba3 standalone BCA, reflecting the
agency's opinion that the bank's financial metrics remain overall
stable yet weak. Its capital and liquidity are satisfactory while
the very large stock of problem loans together with its low
profitability makes the bank vulnerable to negative developments.

Moody's considers that BPER's credit profile remains constrained
by its weak asset risk. Although the bank has managed to reduce
its non-performing loan (NPL) ratio from a peak of 23.5% at end-
June 2016 to 21% at end-June 2017, it remains well above the
Italian banking system's average of around 17% (as of end-
December 2016, latest data available). The overall coverage of
NPLs stood at around 47% at end-June 2017, which also compares
unfavourably to the system average of 51%.

BPER plans to increase its level of provisions by around EUR1
billion in 2018. The coverage of bad loans will improve to around
65%-70% from the 59% reported at end-June 2017, while the
coverage of unlikely-to-pay loans will rise to around 35% from
26% at end-June 2017. The additional provisions can be
accommodated by BPER's satisfactory capital position. At end-June
2017, BPER reported an adequate phased-in Common Equity Tier 1
(CET 1) ratio of 13.4% (13.2% on a fully-loaded basis), compared
to a 7.25% prudential minimum requirement, and a fully loaded
leverage ratio of 6.1%. The bank expects this ratio to stand
close to 14% by year-end 2017, thanks to some capital enhancement
measures that will materialize before the end of the year. This
will allow the bank to increase its problem loan coverage while
preserving a phased-in CET 1 ratio of around 12% in 2018.

In Moody's opinion, BPER's wholesale funding usage, currently
representing 25% of its funding, and liquidity, with unencumbered
liquid assets of EUR5 billion, will remain satisfactory.

DOWNGRADE OF SENIOR MTN AND ISSUER RATINGS DRIVEN BY REDUCING
STOCK OF BAIL-IN-ABLE DEBT

Moody's said that the downgrade of BPER's senior MTN and issuer
ratings reflect the bank's reduced stock of bail-in-able debt,
which results in higher loss-given-failure for this instrument.

In line with a trend common to many Italian banks, BPER has
typically not rolled-over retail bonds maturing in recent years.
The proceeds from these retail bonds have generally been
reinvested by clients in wealth management products and/or
recycled into retail deposits. This trend does not have a
material impact on BPER's overall funding or standalone
creditworthiness, but a lower stock of senior unsecured bonds
increases their own loss-given-failure in a resolution scenario.
Moody's said that, using most recent data, its LGF analysis
indicates that BPER's senior debt is likely to face moderate
loss-given-failure, from low loss-given-failure previously; this
does not provide any uplift from the ba3 adjusted BCA, from one
notch previously.

NEGATIVE OUTLOOKS REFLECT PRESSURE ON CAPITAL

The outlooks on BPER's ratings are negative, reflecting the
potential for a deterioration in the bank's risk-absorption
capacity, in response to an additional increase in provisions,
for example if required by the supervisory authority or initiated
by the bank to accelerate further the reduction of its very large
stock of NPLs.

FACTORS THAT COULD LEAD TO AN UPGRADE

Moody's could return the outlook to stable and ultimately upgrade
BPER's ratings if the bank (1) significantly reduced problem
loans while maintaining strong levels of capitalization; and (2)
showed a sustained increase in profitability.

FACTORS THAT COULD LEAD TO A DOWNGRADE

Conversely, the rating agency could downgrade the bank's ratings
if: (1) problem loans failed to decline materially; (2) capital
fell further than expected; or (3) there were a structural
decline in profitability.

LIST OF AFFECTED RATINGS

Issuer: BPER Banca S.p.A.

Affirmations:

-- Long-term Counterparty Risk Assessment, affirmed Baa3(cr)

-- Short-term Counterparty Risk Assessment, affirmed P-3(cr)

-- Long-term Bank Deposits, affirmed Baa3, outlook changed to
    Negative from Stable

-- Short-term Bank Deposits, affirmed P-3

-- Subordinate Regular Bond/Debenture, affirmed B1

-- Subordinate Medium-Term Note Program, affirmed (P)B1

-- Adjusted Baseline Credit Assessment, affirmed ba3

-- Baseline Credit Assessment, affirmed ba3

Downgrades:

-- Long-term Issuer Rating, downgraded to Ba3 Negative from Ba2
    Negative

-- Senior Unsecured Medium-Term Note Program, downgraded to
    (P)Ba3 from (P)Ba2

Outlook Action:

-- Outlook changed to Negative from Stable(m)

PRINCIPAL METHODOLOGY

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


SALINI IMPREGILO: Fitch Raises Long-Term IDR to BB+
---------------------------------------------------
Fitch Ratings has upgraded Italy-based construction group Salini
Impregilo S.p.A.'s (Salini) Long-Term Issuer Default Rating (IDR)
to 'BB+' from 'BB'. The Outlook is Stable. It has also upgraded
the senior unsecured rating to 'BB+' from 'BB'.

The upgrade reflects Salini's improved business profile, which
includes increased scale, broader diversification and diminished
project concentration. The company's ability to win contracts
across various sub-sectors, particularly large hydro and
tunnelling projects, adequate financial flexibility, and
effective risk management, further support the ratings.

KEY RATING DRIVERS

Solid Business Profile: The company has a well-established
position in the global engineering and construction markets and
maintains a prudent balance sheet, a solid order backlog of 4.8
years, a diverse project portfolio, and effective risk
management. The acquisition of US-based construction company Lane
has further improved Salini's overall risk profile, adding
recurring revenue from the company's road surfacing division.

Subject to reduced customer concentration Salini's business
profile is now considered by Fitch to be comparable to an
investment-grade rating, due to the company's geographical
diversification and solid market positioning. Salini is the
global leader in the water infrastructure sub-segment and boasts
leading positions in civil buildings and transportation.

Business Plan on Track: In the past three years, Salini has met
its forecasts, achieving consistent growth and solid margins. For
2017, the company is targeting double-digit revenue growth, while
reducing gross debt to around EUR100 million. With EUR4.billion
of new orders won in 1H17, Fitch expects the company to meet
expectations.

Healthy Backlog: The backlog has increased over the past year
primarily owing to new awards booked by US subsidiary Lane in the
US, as well as projects won by Salini in the Middle East. The mix
of large and highly complex works with smaller, less demanding
ones, helped diversify its portfolio's risk. The plants and
paving division of Lane - accounting for around one third of
Lane's revenue - provides more predictable, although less
profitable, income with limited risk.

Effective Risk Management: Risk management policies identify and
assess the risk and reward of pricing contracts in the bidding
phase. Projects are then monitored closely to prevent large,
unexpected working capital outflows. Salini tends to lead
consortia to try and maintain full control of all project phases.

Improving Financial Profile: The acquisition of Lane led to an
increase in Salini's debt at end-2016. Fitch forecast funds from
operations (FFO) adjusted net leverage to exceed 2.0x at end-
2017. However, Fitch expect this to decline below 1.5x over the
next 24 months, supported by healthy trading, in the absence of
large M&A transactions.

DERIVATION SUMMARY

In contrast to other Fitch-rated engineering & construction
entities, Salini has a limited presence in concessions. Its
strategy focuses on large, complex, value-added infrastructure
projects with high engineering content. The acquisition of Lane,
completed in January 2016, enhanced Salini's presence in the US,
which is now one of the key countries for the company and
mitigates its presence in higher-risk developing countries. While
its business profile is now commensurate with an investment-grade
rating, its net leverage exceeds higher-rated peers' such as
Ferrovial SA (BBB/Stable), which together with Vinci SA (A-
/Stable), generates stable dividend streams from their concession
business.

KEY ASSUMPTIONS

Fitch's key assumptions within Fitch rating case for the issuer
include:
- Revenue growth supported by a robust backlog;
- Profitability of Lane in the mid-single digits;
- Disciplined working capital management;
- No further acquisitions over the next three years; and
- Dividends payout ratio of around 20%-30%.

RATING SENSITIVITIES

Future Developments That May, Individually or Collectively, Lead
to Positive Rating Action
- Funds from operations (FFO)-adjusted net leverage below 1.0x
   on a sustained basis (2016: 3.0x).
- Reduced concentration of top 10 contracts to below 40% (1H17:
   49%).

Future Developments That May, Individually or Collectively, Lead
to Negative Rating Action
- FFO adjusted net leverage above 2.0x on a sustained basis.
- Weak performance on major contracts with a material impact on
   profitability.
- Problems in collecting receivables.
- Increasing share of high-risk countries in portfolio.

LIQUIDITY

Extended Debt Maturities: Salini is in the process of refinancing
its existing debt with around EUR 1 billion of new facilities.
The envisaged transaction includes a new seven-year bond of
EUR500 million and bank loans of about EUR380 million. As part of
the refinancing, Salini will also extend the maturity of its
committed revolving credit facility (RCF) -- unused as of June
2017 -- to 2022. Based on current market conditions, Fitch expect
the refinancing to reduce the average cost of financing.


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


ACCUNIA EUROPEAN II: Moody's Assigns B1 Rating to Class F Notes
---------------------------------------------------------------
Moody's Investors Service announced that it has assigned the
following definitive ratings to notes issued by Accunia European
CLO II B.V. (the "Issuer"):

-- EUR223,500,000 Class A Senior Secured Floating Rate Notes due
    2030, Definitive Rating Assigned Aaa (sf)

-- EUR38,100,000 Class B-1 Senior Secured Floating Rate Notes
    due 2030, Definitive Rating Assigned Aa2 (sf)

-- EUR9,000,000 Class B-2 Senior Secured Fixed Rate Notes due
    2030, Definitive Rating Assigned Aa2 (sf)

-- EUR23,100,000 Class C Senior Secured Deferrable Floating Rate
    Notes due 2030, Definitive Rating Assigned A2 (sf)

-- EUR17,300,000 Class D Senior Secured Deferrable Floating Rate
    Notes due 2030, Definitive Rating Assigned Baa2 (sf)

-- EUR21,700,000 Class E Senior Secured Deferrable Floating Rate
    Notes due 2030, Definitive Rating Assigned Ba2 (sf)

-- EUR12,500,000 Class F Senior Secured Deferrable Floating Rate
    Notes due 2030, Definitive Rating Assigned B1 (sf)

RATINGS RATIONALE

Moody's definitive ratings of the rated notes address the
expected loss posed to noteholders by the legal final maturity of
the notes in 2030. The provisional ratings reflect the risks due
to defaults on the underlying portfolio of loans given the
characteristics and eligibility criteria of the constituent
assets, the relevant portfolio tests and covenants as well as the
transaction's capital and legal structure. Furthermore, Moody's
is of the opinion that the collateral manager, Accunia
Fondsmëglerselskab A/S ("Accunia Credit Management"), has a team
with sufficient experience and operational capacity and is
capable of managing this CLO.

The Issuer is a managed cash flow CLO. 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
loans, second-lien loans, mezzanine obligations and high yield
bonds. The portfolio is expected to be approximately 70% ramped
up as of the closing date and to be comprised predominantly of
corporate loans to obligors domiciled in Western Europe. The
remaining of the portfolio will be acquired during the 90 days
expected ramp-up period.

Accunia Credit Management will manage 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.

In addition to the seven classes of notes rated by Moody's, the
Issuer has issued EUR41,400,000 of subordinated notes, which will
not be rated.

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

Loss and Cash Flow Analysis:

Moody's modelled the transaction using CDOEdge, a cash flow model
based on the Binomial Expansion Technique, as described in
Section 2.3 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.

Moody's used the following base-case modeling assumptions:

Par amount: EUR375,000,000

Diversity Score: 42

Weighted Average Rating Factor (WARF): 2800

Weighted Average Spread (WAS): 3.5%

Weighted Average Recovery Rate (WARR): 42.75%

Weighted Average Life (WAL): 8 years

Moody's has analysed the potential impact associated with
sovereign related risk of peripheral European countries. As part
of the base case, Moody's has addressed the potential exposure to
obligors domiciled in countries with local currency country risk
ceiling of A1 or below. Following the effective date, and given
the portfolio constraints, only up to 10% of the pool can be
domiciled in countries with foreign currency government bond
rating between A1 and A3 with no exposure allowed to countries
with a lower ceiling. Given this portfolio composition, there
were no adjustments to the target par amount, as further
described in the methodology.

Stress Scenarios:

Together with the set of modelling assumptions above, Moody's
conducted additional sensitivity analysis, which was an important
component in determining the definitive rating 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 each of the rated notes (shown in terms of the
number of notch difference versus the current model output,
whereby a negative difference corresponds to higher expected
losses), holding all other factors equal:

Percentage Change in WARF: WARF + 15% (to 3220 from 2800)

Ratings Impact in Rating Notches:

Class A Senior Secured Floating Rate Notes: 0

Class B-1 Senior Secured Floating Rate Notes: -2

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

Class C Senior Secured Deferrable Floating Rate Notes: -2

Class D Senior Secured Deferrable Floating Rate Notes: -2

Class E Senior Secured Deferrable Floating Rate Notes: -1

Class F Senior Secured Deferrable Floating Rate Notes: 0

Percentage Change in WARF: WARF +30% (to 3640 from 2800)

Ratings Impact in Rating Notches:

Class A Senior Secured Floating Rate Notes: -1

Class B-1 Senior Secured Floating Rate Notes: -3

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

Class C Senior Secured Deferrable Floating Rate Notes: -4

Class D Senior Secured Deferrable Floating Rate Notes: -3

Class E Senior Secured Deferrable Floating Rate Notes: -1

Class F Senior Secured Deferrable Floating Rate Notes: -3

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.


ACCUNIA EUROPEAN II: S&P Assigns B- (sf) Rating to Class F Notes
----------------------------------------------------------------
S&P Global Ratings assigned its credit ratings to Accunia
European CLO II B.V.'s fixed- and floating-rate class A, B-1, B-
2, C, D, E, and F notes. At closing, Accunia European CLO II also
issued an unrated subordinated class of notes.

Accunia European CLO II is a European cash flow collateralized
loan obligation (CLO) transaction, securitizing a portfolio of
primarily senior secured euro-denominated leveraged loans and
bonds issued by European borrowers. Accunia Fondsmëglerselskab
A/S is the collateral manager.

Under the transaction documents, the rated notes pay quarterly
interest unless there is a frequency switch event. Following such
an event, the notes permanently switch to semiannual payment. The
portfolio's reinvestment period ends approximately four years
after closing.

S&P said, "Our ratings reflect our assessment of the collateral
portfolio's credit quality, which has a weighted-average 'B'
rating. The portfolio is well-diversified, primarily comprising
broadly syndicated speculative-grade senior secured term loans
and senior secured bonds. Therefore, we have conducted our credit
and cash flow analysis by applying our criteria for corporate
cash flow collateralized debt obligations (see "Global
Methodologies And Assumptions For Corporate Cash Flow And
Synthetic CDOs," published on Aug. 8, 2016).

"In our cash flow analysis, we used the EUR375 million target par
amount, the covenanted weighted-average spread (3.625%), the
covenanted weighted-average coupon (4.500%), the target minimum
weighted-average recovery rates at the 'AAA' level, and the
actual weighted-average recovery rates for all other rating
levels. We applied various cash flow stress scenarios, using four
different default patterns, in conjunction with different
interest rate stress scenarios for each liability rating
category.

"The Bank of New York Mellon, London Branch is the bank account
provider and custodian. The documented downgrade remedies are in
line with our current counterparty criteria (see "Counterparty
Risk Framework Methodology And Assumptions," published on June
25, 2013).

"Following the application of our structured finance ratings
above the sovereign criteria, we consider that the transaction's
exposure to country risk is sufficiently mitigated at the
assigned rating levels (see "Ratings Above The Sovereign -
Structured Finance: Methodology And Assumptions," published Aug.
8, 2016).

"The issuer is bankruptcy remote, in accordance with our legal
criteria (see "Structured Finance: Asset Isolation And Special-
Purpose Entity Methodology," published on March 29, 2017).

"Following our analysis of the credit, cash flow, counterparty,
operational, and legal risks, we believe our ratings are
commensurate with the available credit enhancement for each class
of notes.

RATINGS LIST

  Ratings Assigned

  Accunia European CLO II B.V.
  EUR386.60 Million Senior Secured Floating- And Fixed-Rate Notes
(Including EUR41.4 Million Unrated Subordinated Notes)

  Class
                        Rating           Amount
                                       (mil. EUR)
  A                     AAA (sf)          223.5
  B-1                   AA (sf)            38.1
  B-2                   AA (sf)             9.0
  C                     A (sf)             23.1
  D                     BBB (sf)           17.3
  E                     BB (sf)            21.7
  F                     B- (sf)            12.5
  Subordinated notes    NR                 41.4

  NR--Not rated.


BABSON EURO 2015-1: Moody's Hikes Class F Sr. Notes Rating to B1
----------------------------------------------------------------
Moody's Investors Service has assigned definitive ratings to six
classes of notes (the "Refinancing Notes") issued by Babson Euro
CLO 2015-1 B.V., (the "Issuer"):

-- EUR206,700,000 Refinancing Class A-1R Senior Secured Floating
    Rate Notes due 2029, Definitive Rating Assigned Aaa (sf)

-- EUR5,300,000 Refinancing Class A-2R Senior Secured Fixed Rate
    Notes due 2029, Definitive Rating Assigned Aaa (sf)

-- EUR32,600,000 Refinancing Class B-1R Senior Secured Floating
    Rate Notes due 2029, Definitive Rating Assigned Aa2 (sf)

-- EUR10,600,000 Refinancing Class B-2R Senior Secured Fixed
    Rate Notes due 2029, Definitive Rating Assigned Aa2 (sf)

-- EUR22,000,000 Refinancing Class CR Senior Secured Deferrable
    Floating Rate Notes due 2029, Definitive Rating Assigned A2 \
    (sf)

-- EUR21,600,000 Refinancing Class DR Senior Secured Deferrable
    Floating Rate Notes due 2029, Definitive Rating Assigned Baa2
    (sf)

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

-- EUR26,400,000 Class A-3 Senior Secured Fixed/Floating Rate
    Notes due 2029, Affirmed Aaa (sf); previously on Sep 8, 2015
    Definitive Rating Assigned Aaa (sf)

-- EUR31,200,000 Class E Senior Secured Deferrable Floating Rate
    Notes due 2029, Affirmed Ba2 (sf); previously on Sep 8, 2015
    Definitive Rating Assigned Ba2 (sf)

Additionally, Moody's has upgraded the ratings on the existing
Class F notes issued by the Issuer on the original issuance date:

-- EUR12,400,000 Class F Senior Secured Deferrable Floating Rate
    Notes due 2029, Upgraded to B1 (sf); previously on Sep 8,
    2015 Definitive Rating Assigned B2 (sf)

RATINGS RATIONALE

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

The Issuer will issue the Refinancing Class A-1R Notes, the
Refinancing Class A-2R Notes, the Refinancing Class B-1R Notes,
the Refinancing Class B-2R Notes the Refinancing Class CR Notes
and the Refinancing Class DR Notes (the "Refinancing Notes") in
connection with the refinancing of the Class A-1 Senior Secured
Floating Rate Notes due 2029, the Class A-2 Senior Secured Fixed
Rate Notes due 2029, the Class B-1 Senior Secured Floating Rate
Notes due 2029, the Class B-2 Senior Secured Fixed Rate Notes due
2029, the Class C Senior Secured Deferrable Floating Rate Notes
due 2029 and the Class D Senior Secured Deferrable Floating Rate
Notes due 2029 ("the Original Notes") respectively, previously
issued on September 8, 2015 (the "Original Closing Date"). The
Issuer will use the proceeds from the issuance of the Refinancing
Notes to redeem in full the Refinanced Notes. On the Original
Closing Date, the Issuer also issued three classes of rated notes
and one class of subordinated notes, which will remain
outstanding.

Other than the changes to the spreads and coupon of the notes,
the main material change to the terms and conditions will involve
increasing the Weighted Average Life Test by 18 months to a total
of 7.5 years from the refinancing date. The length of the
reinvestment period will remain unchanged and will expire on
October 25, 2019. Furthermore, the manager is expected to be able
to choose from a new set of collateral quality test covenants
(the "Matrix") and Euribor floors are introduced to all floating
rate notes except for Class A-1. No other material modifications
to the CLO are occurring in connection to the refinancing.

Moody's rating actions on Class A-3, Class E and Class F Notes
are primarily a result of the amendments to the transaction
documents and the issuance of the Refinancing Notes.

Babson Euro CLO 2015-1 B.V.is a managed cash flow CLO. The issued
notes will be collateralized primarily by broadly syndicated
first lien senior secured corporate loans. At least 90% of the
portfolio must consist of senior secured loans or senior secured
bonds and up to 10% of the portfolio may consist of unsecured
senior loans, second lien loans, mezzanine obligations, high
yield bonds and/or first lien last out loans. The underlying
portfolio is expected to be 100% ramped as of the refinancing
date.

Barings (U.K.) Limited, (the "Manager") manages the CLO. It
directs the selection, acquisition, and disposition of collateral
on behalf of the Issuer. After the reinvestment period, which
ends in October 2019, the Manager may reinvest unscheduled
principal payments and proceeds from sales of credit improved and
credit risk obligations, subject to certain restrictions.

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

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

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

Loss and Cash Flow Analysis:

Moody's modeled the transaction using CDOEdge, a cash flow model
based on the Binomial Expansion Technique, as described in
Section 2.3 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, recoveries and principal proceeds balance:
EUR400,000,000

Diversity Score: 46

Weighted Average Rating Factor (WARF): 3100

Weighted Average Spread (WAS): 4.00%

Weighted Average Coupon (WAC): 5.50%

Weighted Average Recovery Rate (WARR): 39.80%

Weighted Average Life (WAL): 7.5 years

Stress Scenarios:

Together with the set of modelling assumptions above, Moody's
conducted an additional sensitivity analysis, which was a
component in determining the ratings assigned to the Refinancing
Notes. This sensitivity analysis includes increased default
probability relative to the base case. Below is a summary of the
impact of an increase in default probability (expressed in terms
of WARF level) on the Refinancing Notes (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 3100 to 4030)

Rating Impact in Rating Notches:

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

Refinancing Class A-2R Senior Secured Fixed Rate Notes: -1

Class A-3 Senior Secured Fixed Rate Notes: -1

Refinancing Class B-1R Senior Secured Floating Rate Notes: -2

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

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

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

Class E Senior Secured Deferrable Floating Rate Notes: -1

Class F Senior Secured Deferrable Floating Rate Notes: 0

Percentage Change in WARF -- increase of 30% (from 2800 to 3640)

Rating Impact in Rating Notches:

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

Refinancing Class A-2R Senior Secured Fixed Rate Notes: -1

Class A-3 Senior Secured Fixed Rate Notes: -1

Refinancing Class B-1R Senior Secured Floating Rate Notes: -4

Refinancing Class B-2R Senior Secured Fixed Rate Notes: -4

Refinancing Class CR Senior Secured Deferrable Floating Rate
Notes: -4

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

Class E Senior Secured Deferrable Floating Rate Notes: -2

Class F Senior Secured Deferrable Floating Rate Notes: -2

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

Methodology Underlying the Rating Actions:

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


NORTHERN LIGHTS III: Moody's Cuts US$1BB Notes Rating to B2
-----------------------------------------------------------
Moody's Investors Service has downgraded the rating on Repack
notes of Northern Lights III B.V. Series 2012-1:

-- US$1,000,000,000 Loan Participation Notes due August 2019
    Series 2012-1, Downgraded to B2; previously on May 4, 2016
    Downgraded to B1

RATINGS RATIONALE

Moody's explained that the rating action taken is the result of a
rating action on the Government of Angola, which was downgraded
to B2 from B1 on October 20, 2017.

The issue proceeds from the notes were used to fund a loan
facility agreement ("the Loan Agreement") made between Northern
Lights III B.V. ("the Issuer") as lender and the Government of
Angola through its Ministry of Finance as borrower. Payments
received by the Issuer under the Loan Agreement are used to make
payments due under the Notes.

Methodology Underlying the Rating Action:

The principal methodology used in this rating was "Moody's
Approach to Rating Repackaged Securities" published in June 2015.

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

This rating is essentially a pass-through of the rating of the
underlying loan. Noteholders are exposed to the credit risk of
the Government of Angola and therefore the rating moves in lock-
step.

Moody's notes that this transaction is subject to a high level of
macroeconomic uncertainty, which could negatively impact the
ratings of the notes, as evidenced by 1) uncertainties of credit
conditions in the general economy and 2) more specifically, any
uncertainty associated with the underlying credit in the
transaction could have a direct impact on the repackaged
transaction.


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


HEFESTO STC: Moody's Assigns (P)Caa3 Rating to Class B Notes
------------------------------------------------------------
Moody's Investors Service has assigned provisional long-term
credit ratings to the following notes to be issued by Hefesto,
STC, S.A.:

EUR[123,000,000] Class A Asset Backed Floating Rate Notes due
[November 2037], Assigned (P) Baa3(sf)

EUR[19,500,000] Class B Asset Backed Floating Rate Notes due
[November 2037], Assigned (P) Caa3(sf)

Moody's has not assigned any rating to EUR[29,548,000] Class J
Asset Backed Variable Return Notes due [November 2037] and
EUR[4,275,000] Class R Notes due [November 2037].

This is the first transaction backed by non-performing loans
"NPLs" rated by Moody's with loans originated by a Portuguese
bank (Caixa Economica Montepio Geral, Caixa Economica Bancaria,
S.A. ("CEMG") ((P)B3 LT Senior Unsecured / B3 LT Bank Deposit /
B1 (cr)). The assets supporting the notes are NPLs with a gross
book value ("GBV") of EUR[580.6] million and an unpaid principal
balance of EUR[414.4] million. The total issuance of Class A,
Class B and Class J Notes is equal to EUR[172,0] million, [29.6]%
of the GBV. The NPLs consist of defaulted mortgage loans, equal
to EUR[271.2] million, which are backed by residential and/or
commercial properties located in Portugal. The mortgage loans
were extended both to individuals as well as companies. Of the
EUR[271.2] million GBV of the defaulted mortgage loans, EUR[63.6]
million are backed by mortgages that are of a second or lower
ranking lien. The pool further contains unsecured defaulted
loans, for an amount equal to around EUR[309.4] million, extended
to individuals, as well as companies.

The secured portfolio will be serviced by Whitestar Asset
Solutions, S.A. ("Whitestar", NR) and the unsecured portfolio
will be serviced by HG PT, Unipessoal, Lda. ("Hipoges", NR) in
their role as special servicers. The servicing activities
performed by both servicers are monitored by the monitoring
agent.

EAM -- Evora Asset Management, S.A. (NR) has been appointed as
asset manager at closing. The asset manager will be a limited
liability company with the exclusive purpose of managing and
promoting the disposal of the properties to third parties from
enforcement on the mortgage loans. The asset manager will not
benefit from the statutory segregation and the privileged credit
entitlement foreseen in the Portuguese Securitisation Law.
However, a number of contractual mechanisms have been put in
place to mitigate the risk of the asset manager's insolvency and
mitigate the risk of third party claims being made against the
asset manager.

RATINGS RATIONALE

Moody's ratings reflect an analysis of the characteristics of the
underlying pool of defaulted loans, sector-wide and originator-
specific performance data, protection provided by credit
enhancement, the roles of external counterparties and the
structural integrity of the transaction.

In order to estimate the cash flows generated by the pool Moody's
used a model that, for each loan, generates an estimate of: (i)
the timing of collections; and (ii) the collected amounts, which
are used in the cash flow model that is based on a Monte Carlo
simulation.

Collection Estimates: The key drivers for the estimates of the
collections and their timing are: (i) the historical data
received from the special servicers, which shows the historical
recovery rates and timing of the collections for secured and
unsecured loans; (ii) the portfolio characteristics and (iii)
benchmarking with comparable EMEA NPL transactions.

Portfolio is split: (i) [34.9]% in terms of GBV of the defaulted
borrowers are individuals, while the remaining [65.1]% are
companies; (ii) loans representing around [53.3]% of the GBV are
unsecured loans, while the remaining [46.7]% of the GBV are
secured loans whereof about [11.0]% in terms of GBV are secured
with a second or lower ranking lien; (iii) of the secured loans,
[74]% are backed by residential properties, and the remaining
[26]% by different types of non-residential properties.

Hedging: As the collections from the pool are not directly linked
to a floating interest rate, a higher index payable on the notes
would not be offset with higher collections from the pool. The
transaction therefore benefits from an interest rate cap, linked
to six-month EURIBOR, with J.P. Morgan AG (Aa2(cr)/P-1(cr)) as
cap counterparty. The cap will have a strike of [0.50]%. The
interest rate cap will terminate in May 2030.

Transaction Structure: The transaction benefits from an
amortising liquidity reserve equal to [3.0]% of the rated notes
balance (equivalent to EUR[4.275] million at closing), which will
be funded through a Note R retained by the seller. However,
Moody's notes that the cash reserve is not available to cover
Class B notes' interest and that unpaid interest on Class B notes
is deferrable and accruing interest on interest. Additional
secured and unsecured expense accounts will be opened in the name
of the issuer and the amounts standing to the credit of these
accounts will be available to cover senior costs and expenses
relating to the secured and unsecured loans, respectively. At
closing, these accounts will be funded at EUR[3] million and
EUR[0.28] million, respectively.

Servicing Disruption Risk: Moody's has reviewed procedures and
practices of Whitestar and Hipoges and found these parties
acceptable in the role of special servicers. The monitoring agent
will help the issuer to replace the servicer(s) in case the
servicing agreement with either Whitestar or Hipoges is
terminated. The reserve fund together with the expenses accounts
should be sufficient to pay around 12 months of interest on the
Class A notes and items senior thereto, calculated at the strike
price for the cap. The limited liquidity in conjunction with the
lack of a back-up servicer means that continuity of note payments
is not ensured in case of servicer disruption. This risk is
commensurate with the rating assigned to the most senior note.

True Sale and Transfer of Security: the assignment of the secured
loans can only be deemed effective against third parties
following registration of such assignment on behalf of the issuer
and the asset manager. Registration will allow the issuer and the
asset manager to request the substitution of CEMG as creditor in
the proceedings. Once the registration is completed the
assignment is valid from the date the application of registration
was accepted. Moody's expects to assign definitive ratings once
the registration application is accepted by the land registry for
the whole secured mortgage pool.

Cash Flow Modeling: Moody's used its NPL cash-flow model as part
of its quantitative analysis of the transaction. Moody's NPL
model enables users to model various features of a European NPL
ABS transaction -- including recovery rates under different
scenarios, yield as well as the specific priority of payments and
reserve funds on the liability side of the ABS structure.

Moody's Parameter Sensitivities: The model output indicates that
if price volatility were to be increased to 11.52% from 9.60% for
residential properties and to 14.40% from 12.00% for commercial
properties and it would take an additional 18 months to go
through the foreclosure process the Class A notes rating would
move to Ba1 (sf) assuming that all other factors remained
unchanged. Moody's Parameter Sensitivities provide a
quantitative/model-indicated calculation of the number of rating
notches that a Moody's structured finance security may vary if
certain input parameters used in the initial rating process
differed. The analysis assumes that the deal has not aged and it
is not intended to measure how the rating of the security might
migrate over time, but rather how the initial rating of the
security might have differed if key rating input parameters were
varied. Parameter Sensitivities for the typical EMEA ABS
transaction are calculated by stressing key variable inputs in
Moody's primary rating model.

METHODOLOGY

The principal methodology used in these ratings was "Moody's
Approach to Rating Securitisations Backed by Non-Performing and
Re-Performing Loans" published on August 2, 2016.

The preliminary ratings address the expected loss posed to
investors by the legal final maturity of the notes. In Moody's
opinion, the structure allows for timely payment of interest and
ultimate payment of principal with respect to the Class A notes
by the legal final maturity. Other non-credit risks have not been
addressed, but may have significant effect on yield to investors.

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

FACTORS THAT WOULD LEAD TO A UPGRADE OR DOWNGRADE OF THE RATINGS:

Factors that may lead to an upgrade of the ratings include that
the recovery process of the defaulted loans produces
significantly higher cash flows/collections in a shorter time
frame than expected. Factors that may cause a downgrade of the
ratings include significantly less or slower cash flows generated
from the recovery process compared with Moody's expectations at
close due to either a longer time for the courts to process the
foreclosures and bankruptcies, a change in economic conditions
from Moody's central scenario forecast, or idiosyncratic
performance factors. For instance, should economic conditions be
worse than forecasted and the sale of the properties would
generate less cash flows for the issuer or it would take a longer
time to sell the properties, all these factors could result in a
downgrade of the ratings. Additionally, counterparty risk could
cause a downgrade of the rating due to a weakening of the credit
profile of transaction counterparties. Finally, unforeseen
regulatory changes or significant changes in the legal
environment may also result in changes of the ratings.


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


PETROPAVLOVSK PLC: S&P Places B- CCR on CreditWatch Positive
------------------------------------------------------------
S&P Global Ratings assigned its 'B-' long-term corporate credit
rating to Russia-based gold producer Petropavlovsk PLC and placed
the rating on CreditWatch with positive implications. S&P also
rated at 'B-' the proposed senior unsecured notes of at least
US$450 million to be issued by Petropavlovsk 2016 Ltd., a finance
vehicle wholly owned by Petropavlovsk PLC. The issue rating is
also on CreditWatch positive.

The rating reflects the company's position as a relatively small
gold producer. It has four open pit mines in the Russian Far East
region of Amur, and produced 416,000 ounces (oz) in 2016. It also
reflects the execution risks and significant capital expenditure
(capex) outlays related to the company's Pressure Oxidation Hub
(POX Hub) project; relatively short proved reserve life; a
historical track record of operational set-backs and debt
restructuring; and less than adequate liquidity. S&P takes a
positive view of the company's cost position and management's
more recently improved track record in building and running the
operations.

Petropavlovsk has about 8 million oz of reserves, including 0.8
million oz of proved reserves. This translates into a short
proved reserve life of about two years, based on last year's
production. The short reserve life is partly mitigated, in S&P's
view, by the company's good track record of greenfield and
brownfield exploration and its ability to fully replace reserves
every year by converting probable reserves into proven and
resources into reserves.

About half of the company's reserves and resources come from
refractory ore -- rock that is resistant to recovery by standard
cyanidation and carbon absorption methods and is therefore not
yet being exploited by the company. The POX plant that
Petropavlovsk is currently investing in is scheduled for ramp up
at the end of 2018 and should allow Petropavlovsk to unlock this
50% of its existing reserve base. The company expects that about
a third of its production will come from refractory ore in 2019,
supporting an increase in production to 550,000 oz-600,000 oz in
2019-2021 from 416,000 oz in 2016 and 420,000 oz-460,000 oz
guidance for 2017.

Although construction is 75% complete and the technical
consultants have verified the project design, the project is
still exposed to execution risks related to cost overrun or
delays in ramping up. There are uncertainties around future
production costs, which is typical for this kind of project.
Additional execution risks are associated with the current
development of underground mining at two of the mines, Pioneer
and Malomir.

S&P said, "In addition to these factors, our weak business risk
profile assessment is also constrained by the inherent volatility
of the gold mining industry and our view that operating in Russia
implies high country risk.

"We take a positive view of the company's position in the lower
part of the industry cost curve, with total cash costs of $660
per ounce (/oz) and all-in sustaining costs of $807/oz in 2016.
The improvement in the cost position over the past two years was
supported by the devaluation of the Russian ruble and cost-
cutting measures initiated in 2013. Going forward, we anticipate
that it will be supported by the switch to underground mining,
which should enable Petropavlovsk to efficiently tap the highest-
grade reserves as open pits deepen, as well as by the POX plant
launch."

That said, costs increased in the first half of this year as the
ruble appreciated and management has issued guidance that total
cash costs will rise this year to about US$700/oz, at the upper
end of the earlier guidance of US$600-US$700/oz. The mining tax
concession, which means Petropavlovsk will not have to pay a 6%
tax on revenues for 24 months from July 1, 2016, has more than
compensated for the negative effect of foreign currency movements
on the first half results.

S&P said, "Our assessment of the company's highly leveraged
financial risk profile balances our expectation of improving
leverage metrics against high capex outlays that are largely
related to the completion of the POX plant, resulting in limited
free operating cash flow. We also take into account the inherent
volatility of cash flows, which is only partly offset by the
company's hedging of about 40% of production over 2017-2019."

Petropavlovsk's $862 million S&P Global Ratings-adjusted debt
currently includes:

-- $504 million in outstanding bank debt;

-- $100 million nominal value of the 2020 convertible notes; and

-- $234 million outstanding principal of iron ore producer IRC's
    project finance facility, which is 100% guaranteed by
    Petropavlovsk.

S&P said, "We also make adjustments for asset retirement
obligations, unamortized capitalized borrowing costs, and
operating leases. The company has a 31.1% equity interest in IRC,
with a mark-to-market value of approximately US$70 million as of
Oct. 15, 2017. If the eurobond issuance is successful, we expect
the company's capital structure to improve. It will have minimal
maturities in 2017-2019 and very limited secured debt. We believe
that this change in capital structure will be very supportive to
the company's credit quality, helping to mitigate the currently
high leverage and execution risks on the landmark POX project.

"We note the recent changes in the six-member board. Three new
non-executive directors have replaced three old ones following
the June annual general meeting (AGM). The company has also
welcomed a new independent nonexecutive chairman since the AGM
and a new acting CEO arrived in mid-July. We expect that these
changes in top management and the composition of the board will
not affect the company's strategy and financial policy. The
largest holders of voting rights as of July 4, 2017, were Renova
Group (14.8%), Vailaski Holdings (9.6%), Sothic Capital
Management (11.1%), DE Shaw (7.8%), and Prudential PLC (6.9%)."

The following assumptions underpin S&P's base-case forecast:

-- Gold price of $1,250/oz for the rest of 2017 and 2018 and
    expected realized gold prices after hedging of $1,260/oz in
    2017 and 2018;

-- Russian ruble/U.S. dollar average exchange rate of 59.0 for
    the remainder of 2017 and 61.5 in 2018;

-- About 450,000 oz of gold production in 2017 and about 435,000
    oz in 2018, compared with 416,000 oz in 2016;

-- Minimal contribution to production volumes from the POX
    facility in 2018 and about one-third of total production in
    2019. The underground operations are set to make a minimal
    contribution to production this year and contribute a
    mid-teen percentage of total production starting 2018;

-- Capex of about $100 million in 2017 and about $115 million in
    2018, reflecting the last stages of the POX Hub finalization,
    tapering to about $43 million in 2019; and

-- No dividends.

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

-- Under S&P's base-case scenario, S&P projects adjusted EBITDA
    to be $190 million-$220 million in 2017 and $220 million-$270
    million in 2018, compared with $187 million in 2016, on the
    back of increasing volumes and further cost control;

-- S&P therefore expects Petropavlovsk's funds from operations
    (FFO) to debt to be at the lower end of the 12%-20% range in
    2017 and at the upper end in 2018 (it was around 11% in
    2016); and

-- S&P expects adjusted debt to EBITDA of 4.0x-4.6x in 2017 and
    below 4.0x in 2018 (4.7x in 2016).

S&P saidn, "To maintain the given rating, we expect the company
to sustainably maintain FFO to debt above 12%.

"We assess Petropavlovsk's liquidity as less than adequate based
on the ratio of sources to uses of liquidity of about 1.0x in the
next 12 months, limited cash balances, and no committed backup
facilities. We also see minimal headroom under bank loan
covenants that stipulate consolidated debt to EBITDA of a maximum
of 3.75x and EBITDA to net finance charges of a minimum of 4.00x
at end-December 2017. We see a risk of a breach at the end-
December 2017 test date if production is at the lower end of the
company's guidance or if costs increase further in the second
half of the year.

"That said, we expect the company's two key banks, Sberbank and
VTB, to remain supportive and provide waivers if required, and
from the next testing date in June 2018, we expect covenant
headroom to be comfortably above 15% for both metrics on a pre-
eurobond basis. In the medium term, bank support will also depend
on our view on the company's successful ramp up of the POX Hub."

S&P projects the following principal liquidity sources for the 12
months from Sept. 30, 2017:

-- Reported cash and cash equivalents of about $18 million;
-- No available committed undrawn credit facilities; and
-- FFO of about $120 million-$140 million.

Principal liquidity uses for the same period are:

-- Short-term debt of $54 million, representing Sberbank and VTB
    bank debt;

-- Capex of about $110 million, including POX Hub-related capex
    of about $60 million, with the remainder split mainly between
    development of the underground operations and exploration;
    and

-- Neutral working capital.

S&P said, "We would expect liquidity to remain less than adequate
after the issuance of the eurobond, because although short-term
debt maturities would be only US$9 million in the next 12 months
(US$36 million in the second year out), assuming a $US450 million
eurobond, the company will still have no committed lines and
minimal cash balances and will remain reliant on own cash
generation to support capex spending and any unforeseen working
capital outflows.

"The CreditWatch placement reflects our expectation that we will
raise our rating on Petropavlovsk to 'B' if it successfully
issues a eurobond of at least US$450 million and allocates the
proceeds as it indicated to us--that is, refinancing of bank debt
maturities in 2017-2019 such that maturities over this period
would become minimal. We believe that this important change in
the capital structure will partly mitigate the risks related to
the current high leverage and POX project execution.

"Should the main parameters of the intended eurobonds change --
that is, Petropavlovsk issues less than US$450 million -- or
should the company use the proceeds in a different way, we will
review the implications for the capital structure and the
ratings.

"We expect to resolve the CreditWatch soon after the issuance of
the eurobonds."


PETROPAVLOVSK PLC: Fitch Rates Proposed Guaranteed Notes B-(EXP)
----------------------------------------------------------------
Fitch Ratings has assigned Petropavlovsk PLC an expected Long-
Term Issuer Default Rating (IDR) of 'B-(EXP)' with a Stable
Outlook and an expected senior unsecured rating of 'B-(EXP)'. At
the same time, Fitch has assigned an expected rating of 'B-
(EXP)'/'RR4' to proposed guaranteed notes (notes) to be issued by
Petropavlovsk 2016 Limited, the group's wholly owned subsidiary.

The expected IDR is predicated on the successful notes issue of
at least USD450 million, which will be used to repay most
existing loan facilities from VTB and Sberbank of Russia (BBB-
/Positive). The final rating for the notes is contingent upon the
receipt of final documentation conforming materially to
information already received and details regarding the amount and
tenor of the notes.

The IDR of 'B-(EXP)' reflects Petropavlovsk's small scale of
operations, the group's medium-to-high cost position, completion
risks associated with the POX Hub construction and ramp-up, as
well as the planned refinancing pending a successful notes
issuance. It also reflects the group's tight liquidity for the
next 12 months, with a limited margin for possible contingencies.
Projected near-term liquidity has weakened since June, partially
due to a stronger rouble exchange rate and higher operating
costs.

The Stable Outlook is driven by the expected deleveraging,
pending the successful POX Hub ramp-up. It would also lead to an
improvement in the business profile through an increase in total
gold output and a lower cost position.

KEY RATING DRIVERS

Tight Liquidity: Petropavlovsk's tight liquidity for the next 12
months is reflected in lower-than-expected cash holdings of
USD32.7 million at end 1H17, albeit up from USD18.3 million at 31
December 2016. The group's convertible bonds contain an
incurrence provision of 2.5x (net debt/EBITDA) that effectively
prohibits the group from raising a revolving credit facility
(RCF) as long as the convertibles are outstanding. Fitch expect
positive free cash flow (FCF) in 2017 and 2018 of USD38 million.
The group has some limited headroom to cut discretionary capex
and opex by about USD38 million in aggregate by end-2018. Fitch
believe that the liquidity profile will improve after 2018, when
capex decreases to a more normalised level and the benefits of
the POX Hub materialise.

Small Russian Gold Producer: Petropavlovsk is a small gold mining
company. The group operates four main mines in the Amur region in
the Far East of Russia: Pioneer, Pokrovskiy, Malomir and Albyn.
In 2016 the total gold production was 416Koz, which is
substantially lower than that of its Russian gold mining peers
PJSC Polyus (BB-/Positive; 1,915Koz) and Nord Gold S.E.
(Nordgold, BB-/Positive; 869Koz). In 1H17 Petropavlovsk posted a
19% yoy increase in total gold production to 232Koz. The group
affirmed its production forecast for 2017 of 420Koz-460Koz. Fitch
expect a step-up in Petropavlovsk's production in 2019 to around
450Koz, albeit lower than management's expectations of 550Koz,
once the POX Hub is in operation as the group starts processing
refractory ore. This should lead to a moderate improvement in the
group's business profile.

POX Hub Drives Improvement: The group is constructing the
pressure oxidation (POX) Hub at Pokrovskiy to process refractory
gold ore, which accounted for around 50% of its reserve base at
end-2016. As of 12 September 2017, 75% of the POX Hub
construction was complete. POX Hub commissioning is scheduled to
start from 4Q18, with ramp-up throughout 2019. Refractory ore is
harder and more costly to process than non-refractory ore. It
contains sulphide minerals, which encapsulate gold particles,
making it difficult for the leach solution to reach the gold.
Therefore, oxidation of sulphide minerals is necessary to recover
gold. While the technology is more expensive, Petropavlovsk will
benefit from the increase in production scale.

A successful implementation of the POX Hub project drives Fitch
projections of the improvement in the group's financials and
hence any delay in its construction and commissioning would be
credit-negative and would likely lead to negative rating action.

Expected Deleveraging by 2020: At end-2016, the group reported
funds from operations (FFO)-adjusted gross leverage of 5.5x,
including the off-balance sheet guarantee. Fitch expect
Petropavlovsk's leverage to improve from 2018, as the POX Hub
starts to add to the group's bottom-line, to 2.6x by end-2019, a
level that is more appropriate for a 'B' category-rated company
with Petropavlovsk's business profile.

Fitch expect a moderate decrease in leverage in 2017-2018 despite
high annual capex of around USD100 million. This de-leveraging is
driven by an increase in EBITDA due to lower total cash costs
(TCC) and a decrease in off-balance sheet debt, ie, the gradual
repayment of the ICBC project finance facility. Fitch expect a
steep reduction in leverage from end-2019, as Fitch project a
step-up in production from Malomir, which outweighs an output
decline from Albyn, and more normalised capex levels at around
USD30 million p.a.

TCC to Decline: The group has improved its historically high TCC,
which declined in 2016 to USD660/oz, down from USD749/oz in 2015
and USD865/oz in 2014. Nonetheless, Petropavlovsk's TCC are high
in comparison to those of Russian gold mining peers such as
Polyus (USD389/oz) and Nordgold (USD648/oz). The group's TCC
guidance for 2017 is USD700/oz. As the POX Hub ramps up, Fitch
expect TCC to decline to slightly above USD500/oz in 2020, a
level more in line with peers'. This expected cost decline is
mainly due to lower TCC at Malomir, as a result of the benefits
of the extra volumes following the commissioning of the POX Hub
and no production from Pokrovskiy mine after 2018, which has high
TCC (2016: USD878/oz, 1H17: USD1,286/oz).

IRC Guarantee Increases Leverage: Petropavlovsk guarantees the
USD234 million project finance facility from Industrial and
Commercial Bank of China Limited (ICBC, A/Stable) drawn by IRC
Limited, the group's associate listed on the Hong Kong stock
exchange. Petropavlovsk's current shareholding in IRC is 31.1%.
The loan proceeds were used to fund the construction of IRC's
Kimkan and Sutara iron ore mine (K&S) located in the Russian Far
East. The mine began commissioning in 3Q16 and its ongoing ramp-
up continues with near full capacity expected by end-2017.

Fitch adjust Petropavlovsk's debt to incorporate the guarantee.
At full capacity, K&S mine is expected to produce 3.2Mtpa of
concentrate, which should be enough to cover loan repayments in
2018 and 2019 at iron ore prices of USD45/t. Fitch projections
assume that IRC will be able to meet the debt repayments, which
start in 2018, and therefore the amount of the guarantee
decreases by USD60 million each in 2018 and in 2019 and USD51
million in 2020.

Corporate Governance Changes: Following the AGM in June 2017, the
board now has a majority of independent directors with four out
of six seats including the chairman. Although the group continues
to look for a permanent CEO, Fitch do not expect a significant
change in its strategy, with a focus on the successful completion
and operation of the POX Hub project.

DERIVATION SUMMARY

Petropavlovsk is smaller in scale and asset diversification, has
higher TCC and a weaker financial profile than its Russian gold
mining peers Polyus (BB-/Positive) and Nordgold (BB-/Positive).
Its current market position, revenue and liquidity are comparable
to that of Solway Investment Group GmbH (B-/Stable), although it
is few times larger than Solway in terms of EBITDA. Fitch expect
the completion and a successful ramp-up of the POX Hub to help
Petropavlovsk partially close the gap with Polyus and Nordgold
and move well ahead of Solway.

Following the planned notes placement, Petropavlovsk's liquidity
would still trail that of its Russian gold mining peers and of
PAO KOKS (B/Stable), until after the POX Hub is fully
operational.
No country ceiling, parent/subsidiary or operating environment
aspects affect the rating.

KEY ASSUMPTIONS

Fitch's key assumptions within the rating case for Petropavlovsk
include:
- Fitch gold price deck of USD1,200/oz in 2017-2020;
- Gold hedges for over 600Koz at around USD1,250/oz in 2017-2019
   (at 30 September 2017 contracts for 463Koz were outstanding);
- TCC decrease by 20% in 2017-2020;
- Capex of around USD110 million p.a. in 2017-2018 and of around
   USD30 million on average p.a. after 2018; and
- No dividend payments.

RATING SENSITIVITIES

Positive: Future developments that may, individually or
collectively, lead to positive rating action include:
- FFO-adjusted gross leverage remaining sustainably below 4x
   (2016: 5.5x);
- Successful completion of POX Hub in line with the current
   plans; and
- Improved liquidity over the next 12 months.

Negative: Future developments that may, individually or
collectively, lead to negative rating action include:
- POX Hub completion is delayed by 12 months or longer;
- FFO-adjusted gross leverage remaining sustainably above 4.5x;
- EBITDA margin below 30% on a continuous basis (2016: 36%); and
- Liquidity becoming unsustainable.

LIQUIDITY

Planned Notes Improve Maturities: Petropavlovsk's pre-refinancing
liquidity is weak, eg, the group's average daily cash balances in
1Q17-3Q17 were only USD30 million and with no unused back-up
credit lines. The group is intending to issue five-to-seven-year
guaranteed notes of at least USD450 million. The proceeds from
the notes will be used to repay most current Sberbank and VTB
facilities, leaving the USD100 million convertible bond due in
2020 as the large outstanding debt. Assuming the USD450 million
notes and subsequent bank loan repayment, the company's next debt
due would be USD18 million in 2H18, USD36 million in 2019 and
USD100 million in 2020.


RUSSIA: Strongest Non-Financial Cos. Ratings Remain Fixed at Ba1
----------------------------------------------------------------
The ratings of Russia's strongest non-financial companies remain
fixed at Ba1 because the sovereign rating and the country's
foreign currency bond ceiling, both of which are at Ba1, are
acting as a double cap on domestic ratings, says Moody's
Investors Service in a report published. As a result, no Russian
company is rated above the sovereign.

The country ceiling encapsulates risks posed by the sovereign
such as government intervention, and the expropriation or
nationalisation of local assets. While many Russian firms
generate a large proportion of their revenues from exports, they
remain exposed to ceiling risks as their management and assets
are predominantly based in Russia.

"Russia's credit profile continues to be a major constraint on
the country's strongest companies, restricting their rating to
Ba1, even though fundamentals might suggest a higher rating,"
says Denis Perevezentsev, Vice President -- Senior Credit Officer
at Moody's. "However, if the sovereign rating is upgraded or the
sovereign ceiling is raised, the strongest companies might be
considered for an upgrade if their standalone credit profiles
merit it."

Russian oil and gas, steel, mining and chemical companies are
among the strongest on the back of their substantial export
revenues and diversified funding sources. In addition, these
companies' foreign currency revenues and largely rouble cost
bases help to offset pressure on cash flow and earnings when
commodity prices fall and the rouble depreciates.

Russian exporters' credit profiles compare favourably with
international peers. Low cash costs, a weak local currency, the
completion of major investment cycles (in steel), and the
offsetting impact of lower oil-linked taxes (in oil and gas) on
earnings, have led to deleveraging in the steel sector and fairly
stable credit metrics in oil and gas despite lower oil prices and
elevated capital spending. The strongest of the mining and
chemical companies are similarly distinguished by their low cost
position and strong cash flow generation, which supports solid
financial profiles.

Russian utilities, telecommunications and infrastructure
companies lack revenue diversification and are therefore more
vulnerable to domestic macroeconomic stresses than exporters.
While these companies with largely domestic assets and revenues
are less likely to warrant a rating above the sovereign, domestic
leaders in fairly stable industries with solid credit metrics
might be considered for an upgrade if the sovereign rating and/or
sovereign ceiling is raised.

Liquidity among the strongest rated Russian companies is good,
but if US sanctions are expanded it could lead to shrinking
funding sources and greater reliance on state-controlled banks.

That said, the strongest companies from the steel and chemical
sectors are resilient to some degree to sovereign stress due to
their strong credit metrics, substantial free cash flows and good
access to capital markets. Similarly, oil and gas companies
benefit from oil-linked taxation and have sizeable liquidity
cushions with diversified funding base.

Moody's report, "Non-financial companies -- Russia: Russia's
credit profile continues to weigh on the strongest domestic
companies," is available on www.moodys.com. Moody's subscribers
can access this report via the link provided at the end of this
press release. The rating agency's report is an update to the
markets and does not constitute a rating action.


=========
S P A I N
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BBVA CONSUMO 7: Moody's Ups B1 Class B Notes Rating From B1
-----------------------------------------------------------
Moody's Investors Service has upgraded the ratings of two
tranches in BBVA Consumo 7, FT. The rating action reflects (1)
better than expected collateral performance and (2) the increased
levels of credit enhancement for the affected notes.

Issuer: BBVA Consumo 7, FT

-- EUR1239.7M Class A Notes, Upgraded to Aa2 (sf); previously on
    Jul 28, 2015 Definitive Rating Assigned Aa3 (sf)

-- EUR210.3M Class B Notes, Upgraded to Baa3 (sf); previously on
    Jul 28, 2015 Definitive Rating Assigned B1 (sf)

The transaction is a revolving cash securitisation of consumer
loans extended to obligors in Spain by Banco Bilbao Vizcaya
Argentaria, S.A. (Baa1(cr)/P-2(cr), A3 LT Bank Deposits). The
revolving period lasts 17 months and ended on the payment date
falling in December 2016.

RATINGS RATIONALE

The rating action is prompted by better than expected collateral
performance and deal deleveraging resulting in an increase in
credit enhancement for the affected tranches.

Increase in Available Credit Enhancement

Due to the portfolio amortization the credit Enhancement level
for Class A notes in BBVA Consumo 7 has increased to 26.4% from
19.0% at closing, At the same time, the credit enhancement for
Class B notes have increased to 6.3% from 4.5% observed at
closing.

Credit enhancement takes the form of subordination and reserve
fund, which is funded at its target level. Since June 2017 the
performance related trigger to stop the amortization of the
target reserve fund has been breached. The non-amortization
reserve fund provides the protection against further defaults and
arrears in the current portfolio.

Revision of Key Collateral Assumptions

As part of the rating action, Moody's reassessed its default
probability and recovery rate assumptions for the portfolio
reflecting the collateral performance to date.

The performance of the transaction has continued to be stable
since July 2015. As of September 2017, 90 days plus arrears stood
1.35% of current pool balance. Cumulative defaults currently
stand at 0.26% of original pool balance plus replenishments.

The current default probability is 8.0% of the current portfolio
balance, translating into a lower DP assumption of 4.0% as of
original balance vs 8.0% at closing. Moody's left unchanged the
fixed recovery rate of 20.0% and the portfolio credit enhancement
of 19.0%.

The principal methodology used in these ratings was "Moody's
Approach to Rating Consumer Loan-Backed ABS" published in
September 2015.

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

Factors or circumstances that could lead to an upgrade of the
ratings include (1) a decrease in sovereign risk, (2) performance
of the underlying collateral that is better than Moody's
expected, (3) deleveraging of the capital structure and (4)
improvements in the credit quality of the transaction
counterparties.

Factors or circumstances that could lead to a downgrade of the
ratings include (1) an increase in sovereign risk, (2)
performance of the underlying collateral that is worse than
Moody's expected, (3) deterioration in the notes' available
credit enhancement and (4) deterioration in the credit quality of
the transaction counterparties.


CODERE SA: S&P Affirms 'B' Corp Credit Rating, Outlook Stable
-------------------------------------------------------------
S&P Global Ratings affirmed its 'B' corporate credit rating on
Spain-based gaming company Codere S.A. The outlook is stable.

S&P said, "At the same time, we affirmed our 'B' issue ratings on
the EUR500 million and $300 million senior secured notes maturing
in 2021.

"The recovery rating is unchanged at '3', which indicates our
expectation for meaningful recovery (50%-70%; rounded estimate
60%) of principal in the event of a payment default.


"The affirmation reflects our expectation that, despite adverse
regulatory changes in several markets where Codere operates, the
company will continue its growth strategy over the next 12
months, leading to low-single-digit revenue growth and a close to
16% reported EBITDA margin.

"Codere's significant exposure to Latin American markets --
notably Argentina and Mexico from where the company derives over
70% of EBITDA -- continues to weigh on our assessment of its
business profile. We see these markets as riskier than Europe due
to their political, foreign exchange, and labor-market
instabilities. Codere is also subject to significant regulatory
changes, characteristic of the gaming industry as a whole, which
could pressure its profitability and cash flows; for instance,
the recent tax increases in Italy and Argentina will likely
prevent the company from achieving its profitability targets in
2017. Codere's EBITDA margin and profitability metrics remain
below industry average compared to other similar rated peers.

"However, we acknowledge that Codere continues to reinforce its
position in most of its markets of operation by increasing and
maintaining its market share. For example, in Spain Codere is the
second biggest player in slot machines and leads the very
competitive sports betting sector. Codere also operates through
licenses, which create certain barriers to entry due to heavy
regulatory requirements and the substantial capital needed to
obtain them. We also recognize Codere's recent successful
restructuring. This introduced cost efficiencies and the
refinancing of its debt, which decreased its finance expenses and
improved liquidity.

"Codere's financial risk profile is characterized by its
conservative financial policy of maintaining reported net
leverage at 2.5x-3.0x. Considering that its 2016 reported figures
were affected by sizeable non-recurring costs mainly related to
the restructuring, we take a forward-looking view in our analysis
of its credit metrics. We forecast S&P Global Ratings-adjusted
leverage will remain at 3x-4x in the next three years, FFO to
debt at 12%-20%, and free operating cash flows (FOCF) to debt at
below 5%. FOCF is likely to be negative in FY2017, as a result of
the additional capital expenditure (capex) needed for license
renewals and catch-up capex from the restructuring, but then turn
slightly positive in FY2018 and FY2019.

"Our rating on Codere also reflects the company's current lack of
hedging against the risk of currency fluctuations stemming from
its exposure to Latin American markets. Even though there's a
large liquidity cushion of about EUR145 million in cash and a
EUR75 million undrawn revolving credit facility (RCF), we believe
that the lack of hedging could put pressure on our forecasts for
profitability and cash flow generation, a risk that we do not
currently factor into our base case."

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

-- Positive GDP forecast in all Codere's key markets: Real GDP
    growth of 3.0% in Argentina, 1.7% in Colombia, 1.9% in
    Mexico, 1.2% in Italy, and 3.0% in Spain in 2017.

-- For 2018, S&P expects stronger growth in LatAm countries with
    real GDP growth of 3.0% in Argentina, 2.2% in Colombia, 2.2%
    in Mexico, and slightly lower GDP growth in Italy and Spain
    at 1.0% and 2.6%.

-- FY2017 revenues to increase by the low single digits thanks
    to stronger performances in Argentina and Mexico in line with
    first-half 2017 results.

-- In FY2018 and FY2019, S&P expects high-single-digit revenue
    growth as a consequence of continued expansion of the sports
    betting business in Spain, deployment of online gambling in
    Mexico and Colombia, and ongoing modest and organic M&A
    activity.

-- S&P expects reported EBITDA margin to be around 16.0%-16.5%
    over the next three financial years, in line with the latest
    interim results.

-- S&P believes that the company's cost efficiencies will offset
    adverse regulatory and tax changes.

-- Capex of about EUR150 million-EUR160 million in 2017 and
    EUR110 million-EUR120 million over the following two years.

-- S&P assumes around EUR30 million-EUR40 million in debt
    repayments in each of the following two years.

-- S&P doesn't expect any dividend payments in the next two-to-
    three years.

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

-- Adjusted debt to EBITDA of 3.2x-3.8x over the next three
    years.

-- Adjusted FFO to debt of 13%-17% over the same period.

-- Adjusted EBITDA interest coverage of around 3.7x in 2017 and
    up to 4.2x by 2019.

-- Weighted average adjusted FOCF to debt of around 2% over the
    next three financial years.

S&P said, "The stable outlook reflects our opinion that Codere's
revenues will grow at the low single digits and it will continue
to focus on improving its operating performance. This should
offset the negative impact from tax increases in Argentina and
Italy. We expect Codere's adjusted debt to EBITDA will remain at
3x-4x and EBITDA interest coverage above 2x over the next 12
months. We also expect Codere to maintain adequate liquidity and
to start generating positive FOCF in 2018.

"We could take a negative rating action if Codere's revenues and
EBITDA deteriorated significantly as a result of unfavorable
market or regulatory/taxation conditions alongside adopting a
more aggressive financial policy regarding growth, investments,
or shareholder returns, leading to debt to EBITDA of close to 5x
and persistently negative FOCF. If Codere's liquidity were to
weaken and its covenant headroom reduced to less than 15%, we
could also consider lowering the ratings.

"We could consider taking a positive rating action if the company
reported revenue and EBITDA growth significantly above our base
case, leading adjusted debt to EBITDA closer to 3.0x and FFO to
debt well above 20%. This could happen if Codere's growth
strategy bears fruit and it manages to grow revenues at a double-
digit rate despite adverse regulatory changes. Improvement in
credit measures would need to be coupled with sustainably
positive FOCF and our understanding that the reduction of
leverage is sustainable and a part of the company's financial
policy."


===========
S W E D E N
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LM ERICSSON: Moody's Lowers CFR to Ba2, Outlook Negative
--------------------------------------------------------
Moody's Investors Service has downgraded to Ba2 from Ba1 the
corporate family rating (CFR) of Telefonaktiebolaget LM Ericsson
(Ericsson), a leading global provider of telecommunications
equipment and related services to mobile and fixed network
operators, while changing the ratings outlook to negative from
stable.

Concurrently, Moody's has downgraded Ericsson's probability of
default rating (PDR) to Ba2-PD from Ba1-PD, the senior unsecured
long-term ratings to Ba2 from Ba1 and the senior unsecured medium
term note (MTN) program rating to (P)Ba2 from (P)Ba1.

"The downgrade to Ba2 with a negative outlook reflects Moody's
expectation that Ericsson's operating profit and free cash flow
in 2017 and 2018 will continue to be negative, due to rising
restructuring charges and provisions," says Alejandro Nunez, a
Moody's Vice President -- Senior Analyst and lead analyst for
Ericsson. "We believe that the turnaround of Ericsson's business
and operating performance will take longer than previously
anticipated with no expectation of a meaningful recovery until
late 2018 at the earliest."

RATINGS RATIONALE

The downgrade reflects Moody's view that the company's turnaround
period will extend well into 2018 and will be longer than
previously anticipated. It also reflects the sustained negative
near- and medium-term financial implications that will arise in
2017-2018 from the company's restructuring charges and
provisions, as announced by the company in the first half of
2017, as well as the continued weakness in operating profits that
Moody's anticipates over the next year.

Following Ericsson's Q3 2017 results, Moody's expects sustained
(reported) revenue declines of around 10% in 2017 and in the mid-
single digits in 2018 in percentage terms (contrasted with a 10%
contraction in 2016 and 8% reported revenue growth in 2015),
along with negative free cash flow generation for a fourth
consecutive year in 2018. During its Q3 2017 results, the company
announced that its restructuring program expenses for full-year
2017 would be in the range of SEK9.0 billion - SEK10.0 billion,
up from the SEK3.0 billion of restructuring charges for full-year
2017 announced in January 2017.

Although Moody's expects that Ericsson's operating margin
(Moody's-adjusted, including restructuring charges and
provisions) will continue to be negative in 2018 (at just below
zero), the pace of decline in the company's key credit metrics
over the coming year should diminish. Assuming a constant debt
level and including the effects of the recently announced
restructuring and provisions charges, Ericsson's gross debt-to-
EBITDA ratio (Moody's-adjusted) will decline in 2018 to around 4x
from 15x in 2017. However, credit metrics could weaken further if
additional provisions or restructuring charges materialize since
only 13 out of 42 underperforming contracts (primarily in Managed
Services) have been renegotiated to date.

While recognizing that the company's turnaround phase will
persist during most of 2018 meaning there will be further
weakness in operating and credit metrics during that period,
Moody's views positively the fact that the company continues to
invest in R&D for the long term in key areas -- such as Networks
and IT & Cloud -- in order to remain sustainably competitive
particularly before the advent of the 5G cycle.

Despite the company's publicly stated financial policies, its
relatively high exposure to the competitive wireless networking
equipment market without sufficiently offsetting earnings
contribution from other market segments, coupled with its revenue
headwinds and uncompetitive cost structure, will continue to
hamper Ericsson's ability to exhibit credit characteristics
consistent with an investment-grade profile over the next two
years.

The Ba2 ratings reflect: (1) Moody's expectation that the
company's revenue and earnings growth will remain negative in
2017 and 2018, driven by soft market demand during a cyclical
trough, as well as intense competition amid gradual structural
shifts in the telecom networking equipment market's competitive
and technological landscape; (2) the revenue and earnings drag
from the company's sub-scale IT & Cloud and Media divisions that
further reduces the cyclically weak earnings in the Networks
division; (3) the structural challenge that Ericsson faces
because of its high exposure to the wireless networking equipment
market which is unlikely to see material growth before 2020 as
the next technology investment cycle (5G) is expected to ramp up
more significantly around 2020; and (4) the company's weakening
financial profile, due to its relatively high cost base and
declining revenue, leading to significantly lower operating
earnings and continued negative free cash flow generation.
Furthermore, the unpredictable development of pending questions
from US authorities regarding Ericsson's anti-corruption program
and specific cases represents an event risk that further
constrains the rating in the short to medium term.

These negative considerations are offset by: (1) Moody's
expectation that the company's cost-saving activities will help
stabilize its operating earnings by 2019; (2) the company's good
liquidity position; (3) financial policies (including dividend
payments) within the limits of the company's free cash flow
generation and liquidity resources; and (4) a track record of
shareholder support. Moody's considers Ericsson's good liquidity
and main shareholders' support to be the company's two principal
supportive credit factors during this period of cyclical and
structural challenges.

RATIONALE FOR NEGATIVE OUTLOOK

The negative outlook reflects Moody's views and expectations
that:

(1) Ericsson's core market weakness is likely to extend into 2018
following Moody's expectation of a 10% (reported) revenue
contraction in 2017;

(2) This weakness will likely translate into additional
restructuring charges and/or provisions, beyond those announced
to date, that would require further cash outflows over the next
two years;

(3) The company will report high gross leverage in 2017 of around
15x (Moody's-adjusted), which is expected to improve in 2018
toward the 4x area;

(4) Operating margins (Moody's-adj., including restructuring
charges and provisions) and free cash flows will be negative in
2017 and 2018.

WHAT COULD CHANGE THE RATING UP/DOWN

Negative pressure could be exerted on Ericsson's ratings if: (1)
the company reported a 2018 negative operating margin (Moody's-
adjusted, including restructuring charges and provisions) similar
to or worse than the 2017 level (-6%); and/or (2) there were no
material improvement in gross leverage in 2018 from the 2017
level (15x); and/or (3) the company's competitive position
diminished, particularly in the core Networks division, as the 5G
investment cycle approaches; and/or (4) the company registered a
further material decline in its internal liquidity sources;
and/or (5) a material fine were to be imposed as a result of
pending questions from US authorities.

Given the negative outlook, a rating upgrade over the short to
medium term is unlikely. However, over time, upward rating
pressure could develop if: (1) the announced restructuring
program were to start yielding results, leading to a sustainable
recovery in the company's operating performance such that its
operating margin were to consistently be at least in the high
single-digit percentage range; (2) the company were to better
diversify its earnings base, which is currently highly exposed to
the cyclical and highly competitive wireless networking equipment
market; (3) Ericsson demonstrated a sustainably robust
competitive position and technological leadership; (4) end-market
demand were to rebound quicker than currently anticipated, into
the positive revenue growth territory over a 12-month horizon;
(5) free cash flow were to be materially and sustainably
positive; and (6) Ericsson's own liquidity sources were to
improve materially from currently projected 2018 levels such that
the company reported a higher net cash position (including
pension deficit) and reduced gross leverage from the currently
high levels.

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Diversified
Technology Rating Methodology published in December 2015.

LIST OF AFFECTED RATINGS

Downgrades:

Issuer: Telefonaktiebolaget LM Ericsson

-- LT Corporate Family Rating, Downgraded to Ba2 from Ba1

-- Probability of Default Rating, Downgraded to Ba2-PD from Ba1-
    PD

-- Senior Unsecured Medium-Term Note Program, Downgraded to
    (P)Ba2 from (P)Ba1

-- Senior Unsecured Regular Bond/Debenture, Downgraded to Ba2
    from Ba1

Outlook Actions:

Issuer: Telefonaktiebolaget LM Ericsson

-- Outlook, Changed To Negative from Stable

Telefonaktiebolaget LM Ericsson (Ericsson) is a world-leading
provider of telecommunication equipment and related services to
mobile and fixed-network operators globally. The company's
equipment is used by over 1,000 networks in more than 180
countries and around 40% of the global mobile traffic passes
through its systems. In the nine months to September 30, 2017,
the company's Networks division represented 74.4% of group
revenue, followed by IT & Cloud at 21.3% and Media at 4.3%. The
company's revenue is geographically well diversified across all
major regions, with North America, Europe & Latin America, Asia
and Middle East/Africa/Other each representing approximately 25%
of group revenues. The company's revenues in the last twelve
months (LTM) to September 30, 2017 were SEK209.3 billion. The
company's largest shareholders are Investor AB and AB
Industrivarden, with voting rights of 22.2% and 15.2%,
respectively.


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


FIBABANKA AS: Fitch Rates US$300MM Sr. Unsecured Notes 'BB-(EXP)'
-----------------------------------------------------------------
Fitch Ratings has assigned Fibabanka A.S.'s (Fiba) upcoming issue
of US$300 million senior unsecured notes an expected long-term
rating of 'BB-(EXP)'. The issue is expected to have a five-year
tenor.

The final rating is contingent upon the receipt of final
documents conforming to information already received.

KEY RATING DRIVERS

The senior unsecured notes are rated at the same level as Fiba's
Long-term Foreign-Currency Issuer Default Rating (IDR), as the
notes constitute Fiba's direct, unconditional, unsubordinated and
unsecured obligations and will rank pari passu among themselves
and with all of the bank's other unsubordinated and unsecured
obligations. The Long-Term IDR of Fiba is in turn driven by the
bank's standalone strength, as reflected in its Viability Rating
(VR) of 'bb-'.

Fiba's VR reflects the bank's limited franchise in the Turkish
banking sector, small absolute size and rapid growth in recent
years. It also reflects Fiba's record of reasonable financial
metrics and sound execution.

RATING SENSITIVITIES

Changes to Fiba's VR, which drives the Long-Term IDRs, would
impact the issue's rating. Fiba's VR could be downgraded in case
of a significant deterioration in asset quality that put pressure
on performance and capital ratios. Material strengthening of
Fiba's franchise without a sharp increase in risk appetite could
result in upside for the bank's VR.

Fiba's other ratings are unaffected by this action, and are as
follows:
Long-Term Foreign- and Local-Currency IDRs: 'BB-'; Stable Outlook
Short-Term Foreign- and Local-Currency IDRs: 'B'
National Long-Term Rating: 'A+(tur)'; Stable Outlook
Viability Rating: 'bb-'
Support Rating: '5'
Support Rating Floor: 'No Floor'
Tier 2 capital notes: 'B+'


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


CAPITAL BANK: Market Removal Decision Upheld by Supreme Court
-------------------------------------------------------------
Interfax-Ukraine reports that the National Bank of Ukraine said
the Supreme Court of Ukraine on Oct. 24 upheld the lawfulness of
removal of insolvent bank Capital and Ukrinbank from the market.

The court annulled all court rulings of lower instances and
issued new rulings, which did not satisfy the claims of the
banks' shareholders, Interfax-Ukraine discloses.

At present, 21 similar cases are being heard in courts of lower
instances, Interfax-Ukraine notes.

The NBU placed bank Capital to the list of insolvent banks on
July 20, 2015 and Ukrinbank on December 24, 2015, Interfax-
Ukraine recounts.

According to Interfax-Ukraine, the regulator made the decision
regarding the bank Capital, as the quality of its assets was
unsatisfactory and there was a liquidity risk, as most of the
bank's assets and some operating facilities were lest on the
temporarily occupied territory of Ukraine.  The decision to
declare Ukrinbank insolvent is linked to the fact that the bank
was not able to meet the claims of creditors on time, and its
operations was not in line with the requirements of the banking
legislation and NBU's legal acts, Interfax-Ukraine states.



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


COGENPOWER PLC: Creditors Back Company Voluntary Arrangement
------------------------------------------------------------
Tapan Panchal at Alliance News reports that Cogenpower PLC said
on Oct. 25 that its creditors have approved a company voluntary
arrangement and the company is progressing with the disposal of
current businesses to Francesco Vallone and other members of the
operating management team.

The UK listed energy business also said that it has completed its
previously announced GBP550,000 fund raise, Alliance News
relates.

The suspension of Cogenpower's shares was expected to be lifted
Oct. 26, Alliance News notes.


ENQUEST PLC: Faces Cash Woes One Year Following Rescue Deal
-----------------------------------------------------------
Jillian Ambrose at The Telegraph reports that troubles in the
North Sea have forced oil minnow Enquest to resort to a US$100
million (GBP76 million) fundraising, just one year after securing
a financial rescue deal.

According to The Telegraph, the debt-wracked oil explorer has
taken the unusual move of refinancing one of its Malaysian
oilfields and locking in an oil "pre-sale" contract to shore up
its balance sheet just weeks after admitting that its cornerstone
North Sea project was not producing as much oil as hoped.

The embattled company emerged from one of the North Sea's most
complex financial restructurings this time last year after
running up major debts by developing the Kraken oilfield during
the oil market downturn, The Telegraph recounts.

The project was expected to kick-start a production boom that it
needed to help pay off its debts, but in recent months Enquest
has admitted that it is falling short of expectations, in part
due to the technical complexity of the floating production unit
used to access the offshore reservoirs, The Telegraph relates.

Last month, Enquest returned to its lender base to ask for its
debt terms to be waived after plunging to a half-year loss, The
Telegraph discloses.

Under the terms of Enquest's refinancing it must keep its net
debt within 2.7 times its earnings before interest, tax,
depreciation and amortization, The Telegraph states.  By the end
of the year the ratio will tighten further to 2.25 times
earnings, meaning that further waivers are likely to be
necessary, The Telegraph relays.

EnQuest is an oil and gas development and production company
based in the United Kingdom.

As reported by the Troubled Company Reporter-Europe on
September 22, 2017, Moody's Investors Service affirmed EnQuest
plc's corporate family rating (CFR) and probability of default
rating (PDR) at Caa1 and Caa1-PD, respectively. At the same time,
Moody's changed the outlook on all ratings to stable from
positive.


MONARCH AIRLINES: Administrators Seek Judicial Review on Slots
--------------------------------------------------------------
Alistair Smout and Victoria Bryan at Reuters report that the
administrators of failed British airline Monarch are seeking
clarification in court about whether or not they have the right
to sell Monarch's airport slots, potentially the most valuable
remaining part of the business.

The status of Monarch's airport slots has been ambiguous since
the airline went bust at the start of October, Reuters notes.

According to Reuters, administrators at KPMG have maintained they
have the right to sell the slots, reportedly worth GBP60 million
(US$79 million), and said on Oct. 26 they wanted to establish
that right in court.

"Given the complexity of the slot exchange process, we are
seeking a judicial review on this particular matter," Reuters
quotes Blair Nimmo, partner at KPMG and joint administrator, as
saying in a statement.  "We believe this to be in the wider
public interest, with the intention of resolving this matter
quickly and with the greatest chance of maximising the continued
use of the slots."

The chief executives of British Airways owner IAG and Norwegian
Air Shuttle have both told Reuters they are interested in using
the slots, even though the process by which they might be
acquired was unclear.

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.


WELLINGTON PUB: Fitch Affirms B- Rating Class B Notes
-----------------------------------------------------
Fitch Ratings has affirmed Wellington Pub Company plc's notes as
follows:

GBP104.5 million Class A fixed-rate notes due 2029: affirmed at
'B+'; Outlook Stable
GBP24.0 million Class B fixed-rate notes due 2029: affirmed at
'B-'; Outlook Stable

KEY RATING DRIVERS

The untied leased business model hinders the group's ability to
adapt to the dynamic and increasingly competitive UK eating and
drinking out market. Declining and low projected free cash flow
(FCF) debt service coverage ratio (DSCR) metrics, weak structural
features and deficiencies in the transaction's legal structure
also constrain the ratings. Fitch's projected FCF DSCRs at 1.4x
and 1.1x for the class A and B notes are aligned with pub sector
peers when considering the structural weaknesses.

Fitch has applied its Rating Criteria for Infrastructure and
Project Finance. Fitch also identified two qualitative key rating
drivers (KRDs) from its UK Whole Business Securitisation Rating
Criteria: Industry Profile and Company Profile, to assess
Wellington's ratings. Wellington does not have an issuer/borrower
structure. As a result this does not meet one of the key WBS
criteria assumptions of being able to appoint an administrative
receiver upon borrower event of default. This precludes it from
being rated under Fitch's UK Whole Business Securitisation (WBS)
Rating Criteria.

Structural Decline but Strong Culture - KRD: Industry Profile -
Midrange
The UK pub sector has a long history, but trading performance has
shown significant weakness in the past. The sector has been in
structural decline for the past three decades due to demographic
shifts, pricing pressure, greater health awareness and the
growing presence of competing offerings. Exposure to
discretionary spending is high and revenues are therefore linked
to the broader economy. Competition is high, including off-trade
alternatives, and barriers to entry are low. Despite the on-going
contraction, Fitch views the sector as sustainable in the long
term, supported by the strong UK pub culture.

Sub KRDs: operating environment - weaker, barriers to entry -
midrange, sustainability - midrange.

Free-of-Tie Model, Under-Invested Estate - KRD: Company Profile -
Weaker
Stronger trading within the Greater London area, possibly due to
subdued competition from falling number of pubs, improved the
portfolio performance over the past 12 months. Repossessions and
rent arrears stabilised and are declining, albeit the levels are
still high and may affect revenue sustainability. Wellington's
acquisitions are insufficient to compensate the revenue loss from
the disposal of weaker pubs. Positively, the number of pubs on
long leaseholds has been stable for the last few years.

The company's and tenants' low capex adversely impacts property
values and pub profitability. The asset manager estimates that
40% of the portfolio is suffering from noticeable deferred
maintenance. The free-of-tie model implies limited operational
management but reduces visibility on tenants' profitability and
increases projected cash flows uncertainty.

Sub-KRDs: financial performance - weaker, company operations -
weaker, transparency - weaker, dependence on operator - stronger,
asset quality - weaker

Structural Issues Drive Weaker Assessment - KRD: Debt Structure -
Weaker
The class A and B notes are fully amortising, secured and fixed-
rate, and class B notes' debt service is structured to decrease
over time. The class B notes rank junior to the class A notes.
The security package features first-ranking fixed and floating
charges over the issuer's assets weakened by the lack of
issuer/borrower structure.

Structural features are weak because of the non-orphan SPV
structure, limited contractual provisions, and an inadequate
liquidity reserve which only covers about four months of class A
debt service. Financial covenants that would provide bondholders
with more control through the appointment of an administrative
receiver well ahead of a payment default are missing. The
subordinated class B notes could deplete the liquidity reserve as
it is not tranched among the class A and B notes. The restricted
payment condition covenant is set at 1.25x, but in practice a
lock-up has never been triggered despite the actual DSCR having
been below 1.25x, since a surplus cash account is included in the
DSCR cash release income cover test.

Metrics: Updated Fitch rating case (FRC) projected metrics have
improved from the previous year, to 1.41x from 1.32x for the
class A notes, and to 1.14x from 1.08x for the class B notes. Net
debt to EBITDA has also improved over the year to 4.6x and 5.7x
as at June 2017.

PEER ANALYSIS

Wellington is the only Fitch-rated free-of-tie pub transaction.
Fitch consider tied leased/tenanted pub WBS transactions such as
Punch B as peers, albeit with different business models and
revenue streams. Compared with Punch B and Unique, Wellington's
financial performance is relatively weak, and the pubs are
significantly less profitable as measured by EBITDA per pub.
Fitch perceive asset quality to be weaker than that of Punch B
and Unique, with similar transparency issues. Wellington's FCF
DSCRs and debt-to-EBITDA multiples are better than its peers, but
its ratings take into account its weaker business model and debt
structure.

RATING SENSITIVITIES

Future developments that may, individually or collectively, lead
to negative rating action:
- Further FCF deterioration beyond FRC assumptions as a result
   of an increase in arrears, pub vacancies and/or foreclosure
   rates and slower-than-expected deleveraging leading to
   projected FCF DSCR metrics below 1.2x and 1.0x for the class A
   and B notes, respectively.

Future developments that may, individually or collectively, lead
to positive rating action:
- The notes are unlikely to be upgraded in the foreseeable
   future given the weak structural features and weaknesses in
   the legal structure.

If Wellington and/or its affiliates' combined portion of holdings
in the transaction's senior notes exceeds 75% (currently 60%),
Fitch will withdraw the ratings as the majority noteholder will
be able to amend the terms of the notes at its own discretion.


* European ABS SME Loan/Lease 60-90 day Delinquencies Improved
--------------------------------------------------------------
The 60-90 day delinquency rate of asset-backed securities (ABS)
backed by loans and leases to small and medium-sized enterprises
(ABS SME) in Europe improved in the six months ended June 2017,
according to the latest performance update published by Moody's
Investors Service.

The 60-90 day delinquency rate decreased to 0.4% in June 2017
from 0.6% in December 2016. The 90-360 day delinquency marginally
improved to 1.1% in June 2017, compared to 1.2% in December 2016.

The performance of Italian transactions slightly improved in June
2017; the 90-360 day delinquency rate decreased to 1.8% in June
2017 from 2.1% recorded in December 2016. Belgian transactions
showed stable performance with the 90-360 day delinquency rate
for the Belgian overall trend remaining at around 0.3% in June
2017. The 90-360 day delinquency rate of Spanish transactions
slightly increased to 1.4% in June 2017, compared with 1.2% in
December 2016.

The prepayment rate across Europe decreased to 6.7% in June 2017
from 7.0% in December 2016.

As of June 2017, the 96 outstanding European ABS SME loan and
lease transactions rated by Moody's had an outstanding pool
balance of EUR68.3 billion, compared with EUR74.2 billion a year
earlier, representing a 8.0% decrease. The biggest players in the
European SME market by outstanding pool balance are Italy
(EUR22.3 billion), Belgium (EUR18.1 billion) and Spain (EUR15.5
billion).


===============
X X X X X X X X
===============


* BOOK REVIEW: AS WE FORGIVE OUR DEBTORS
----------------------------------------
Authors: Teresa A. Sullivan, Elizabeth Warren,
& Jay Westbrook
Publisher: Beard Books
Softcover: 370 Pages
List Price: $34.95
Review by: Susan Pannell
Order your personal copy today at
http://www.beardbooks.com/beardbooks/as_we_forgive_our_debtors.ht
ml

So you think you know the profile of the average consumer
debtor: either deadbeat slouched on a sagging sofa with a
threeday growth on his chin or a crafty lower-middle class type
opting for bankruptcy to avoid both poverty and responsible debt
repayment.

Except that it might be a single or divorced female who's the
one most likely to file for personal bankruptcy protection, and
her petition might be the last stage of a continuum of crises
that began with her job loss or divorce. Moreover, the dilemma
might be attributable in part to consumer credit industry that
has increased its profitability by relaxing its standards and
extending credit to almost anyone who can scribble his or her
name on an application.

Such are among the unexpected findings in this painstaking study
of 2,400 bankruptcy filings in Illinois, Pennsylvania, and Texas
during the seven-year period from 1981 to 1987. Rather than
relying on case counts or gross data collected for a court's
administrative records, as has been done elsewhere, the authors
use data contained in the actual petitions. In so doing, they
offer a unique window into debtors' lives.

The authors conclude that people who file for bankruptcy are, as
a rule, neither impoverished families nor wily manipulators of
the system. Instead, debtors are a cross-section of America. If
one demographic segment can be isolated as particularly
debtprone, it would be women householders, whom the authors found
often live on the edge of financial disaster. Very few debtors
(3.7 percent in the study) were repeat filers who might be
viewed as abusing the system, and most (70 percent in the study)
of Chapter 13 cases fail and become Chapter 7s. Accordingly, the
authors conclude that the economic model of behavior -- which
assumes a petitioner is a "calculating maximizer" in his in his
decision to seek bankruptcy protection and his selection of
chapter to file under, a profile routinely used to justify
changes in the law -- is at variance with the actual debtor
profile derived from this study.

A few stereotypes about debtors are, however, borne out. It is
less than surprising to learn, for example, that most debtors
are simply not as well-off as the average American or that while
bankrupt's mortgage debts are about average, their consumer
debts are off the charts. Petitioners seem particularly
susceptible to the siren song of credit card companies. In the
study sample, creditors were found to have made between 27
percent and 36 percent of their loans to debtors with incomes
below $12,500 (although the loans might have been made before
the debtors' income dropped so low). Of course, the vigor with
which consumer credit lenders pursue their goal of maximizing
profits has a corresponding impact on the number of bankruptcy
filings.

The book won the ABA's 1990 Silver Gavel Award. A special 1999
update by the authors is included exclusively in the Beard Book
reprint edition.



                            *********

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 * * *