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

                           E U R O P E

           Tuesday, December 5, 2017, Vol. 18, No. 241


                            Headlines


F R A N C E

CASINO GUICHARD-PERRACHON: Moody's Assigns First Time Ba1 CFR


G E R M A N Y

WEPA HYGIENEPRODUKTE: S&P Lowers CCR to 'BB-', Outlook Stable


I R E L A N D

ADAGIO III: Moody's Hikes Class E Notes Rating to Ba2(sf)
GRAND CANAL 2: Moody's Assigns Ba3 Rating to Class D Notes
HARVEST CLO XVIII: Moody's Assigns (P)B2 Rating to Class F Notes
HARVEST CLO XVIII: S&P Assigns Prelim B- Rating to Class F Notes
WILLOW PARK: Moody's Assigns B2 Rating to Class E Notes


I T A L Y

SOCIETA CATTOLICA: S&P Rates Fixed-To-Floating-Rate Notes 'BB+'


L U X E M B O U R G

4FINANCE: S&P Alters Outlook to Stable, Affirms B+ Credit Rating
GALILEO GLOBAL: S&P Assigns 'B' Long-Term CCR, Outlook Stable


N E T H E R L A N D S

SAPPHIRE BIDCO: Moody's Rates Proposed EUR950MM Term Loan (P)B2
SUNSHINE MID: S&P Assigns Preliminary 'B+' CCR, Outlook Stable
TELEFONICA EUROPE: S&P Rates Proposed Hybrid Notes 'BB+'


N O R W A Y

NORSKE SKOGINDUSTRIER: S&P Revises CCR to 'D' on Missed Payments


R O M A N I A

* ROMANIA: Over 4,440 Companies Become Insolvent in 1H of 2017


R U S S I A

GAZPROMBANK JSC: Fitch Affirms BB+ IDR, Outlook Positive
LSR GROUP: Fitch Affirms B Long-Term IDR, Outlook Stable


S W I T Z E R L A N D

DARWIN AIRLINE: Files for Insolvency, To Restructure as ACMI
GATEGROUP HOLDING: S&P Cuts CCR to 'B', Outlook Stable


U N I T E D   K I N G D O M

E20 STADIUM: London Assembly Demands to See 2016/2017 Accounts
FEATHER & BLACK: Goes Into Administration, 123 Jobs at Risk
HOTCHA: Enters Administration, 145 Jobs Affected
MARSTON'S ISSUER: S&P Lowers Rating on Class B Notes to BB (sf)
STANLEY GIBBONS: Guernsey Unit Placed Into Administration

STONEPEAK SPEAR: Moody's Assigns B2 CFR, Outlook Stable
STONEPEAK SPEAR: S&P Assigns Prelim 'B' CCR, Outlook Stable
TICKETLINE UK: Competitive Market Prompts Administration
VIRGIN MEDIA: S&P Affirms 'BB-' CCR, Outlook Stable


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F R A N C E
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CASINO GUICHARD-PERRACHON: Moody's Assigns First Time Ba1 CFR
-------------------------------------------------------------
Moody's Investors Service has assigned a Ba1 corporate family
rating (CFR) and Ba1-PD probability of default rating to the
French food retailer Casino Guichard-Perrachon SA. Moody's has
also assigned Ba1 ratings (LGD3) to Casino's senior unsecured
unsubordinated debt, Ba3 ratings (LGD6) to its deeply
subordinated perpetual bonds and NP rating to its commercial
paper. The outlook on the ratings is stable.

"Casino's Ba1 CFR reflects its strong positions in France and
Latin America as well as the successful repositioning of its
store portfolio" says Vincent Gusdorf, a Moody's Vice
President -- Senior Analyst and lead analyst for Casino.
"However, the rating also factors in the company's high debt,
although Moody's expect Casino to deleverage over the next 12
months, as well as the fiercely competitive retail environment in
France which Moody's do not think will abate."

RATINGS RATIONALE

The Ba1 rating of Casino incorporates (1) its number four
position in the French retail market (2) its co-leading position
of the Brazilian food market along with Carrefour S.A. ((P)Baa1
stable), which provides geographic diversity and good earnings
growth potential; (3) a portfolio of French stores mostly focused
on proximity; and (4) its ownership of Cdiscount, the second
largest online retailer in France behind Amazon.com, Inc. (Baa1
positive).

However, Casino's rating also factors in (1) its high leverage,
with a Moody's adjusted (gross) debt/EBITDA ratio of 6.8x at
year-end 2016; (2) fierce competition in the French retail
market; (3) earnings volatility stemming from a sizable exposure
to Latin America; and (4) its ownership by the leveraged holding
company Rallye, which constrains the company's ability to cut
dividend payments if need be.

Further improvement in financial profile is expected in the next
12-18 months to position the company more adequately in the Ba1
rating category. Moody's-adjusted debt/EBITDA should decline to
about 5.3x in 2018 from 6.8x in 2016 thanks to debt repayments
and moderate earnings growth. Moody's assumes that Casino will
sell its stake in its Brazilian non-food subsidiary Via Varejo
and that it will use part of the proceeds for debt repayment.

However, cash flow generation will remain low. The Moody's
adjusted free cash flow should fall to about -EUR0.9 billion in
2017 because working capital fluctuations (excluding movements
related to tax credits) will lead this year to a cash outflow.
This is partly due to increasing inventories at Cdiscount and the
slowdown of Colombian operations. Still, Moody's adjusted free
cash flow should converge towards zero from 2018 onwards.

Moody's finally notes that Jean-Charles Naouri is Casino's Chief
Executive Officer and main shareholder through the holding
company Groupe Rallye where he acts as Chairman of the Board of
Directors. Whilst the rating agency believes that this presents a
degree of key man risk, Moody's expects that appropriate measures
have been put in place to address this risk if and when it
materializes.

STRUCTURAL CONSIDERATIONS

The group structure remains fairly complex although it has been
simplified over the past few years. Casino fully owns most of its
French operations. However, it only holds part of the capital of
its key international subsidiaries, which are nonetheless fully
consolidated.

Casino's debt is located at the level of Casino France (EUR6.9
billion as of December 31, 2016), the Brazilian subsidiary Grupo
Pao de Acucar (EUR1.7 billion) and the Colombian subsidiary Exito
(EUR1.3 billion). There is no cross default or guarantees between
these subsidiaries. Moody's considers all the debt instruments in
the capital structure to be unsecured and to rank pari passu
within each subsidiary, with the exception of the deeply
subordinated perpetual bonds issued by Casino France which
amounted to EUR1.4 billion as of June 30, 2017.

The probability of default rating is based on a 50% family
recovery assumption, which reflects a capital structure including
bonds and bank debts with loose covenants.

RATINGS OUTLOOK

The stable outlook reflects Moody's expectation that Casino will
improve its credit ratios by using its excess cash to repay its
gross debt and by maintaining positive operating momentum in
France and in Latin America. It also factors in Moody's view that
Casino's dividend policy will not change.

WHAT COULD CHANGE THE RATING UP/DOWN

At this juncture, rating upside is limited and would require a
meaningful improvement in the financial profile from the current
levels. Moody's could upgrade Casino's ratings if its gross
debt/EBITDA fell to the middle of the 4x-4.5x range and its
Retained Cash Flow/net debt exceeded 15%, on a Moody's-adjusted
basis, for a prolonged period of time. This would require a
significant increase in revenues combined with a meaningful
improvement in profitability. An upgrade would also require that
minorities do not increase within the group and that financial
policy remains prudent.

Conversely, Moody's could downgrade the ratings if Casino failed
to bring back its Moody's adjusted debt/EBITDA to the middle of
the 5x-5.5x range. This scenario could unfold if, for instance,
the group did not use any of its excess cash to repay its debt or
if operating conditions deteriorated, either in France or in
Latin America. Moody's could also lower Casino's ratings if its
financial policy became more aggressive with, for instance,
unexpected acquisitions or increase in shareholder remuneration.
Lastly, Moody's could also downgrade the ratings if Rallye's
credit quality deteriorated significantly.

PRINCIPAL METHODOLOGY

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

With EUR36 billion of reported revenues in 2016 and a market
capitalization of EUR5.6 billion, France-based Casino is one the
largest food retailers in Europe. Its main shareholder is the
French holding company Groupe Rallye, which owned 51.1% of
Casino's capital and 63.6% of its voting rights as of June 30,
2017.


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G E R M A N Y
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WEPA HYGIENEPRODUKTE: S&P Lowers CCR to 'BB-', Outlook Stable
-------------------------------------------------------------
S&P Global Ratings said that it has lowered to 'BB-' from 'BB'
its long-term corporate credit rating on Germany-based tissue
paper producer WEPA Hygieneprodukte GmbH. The outlook is stable.

S&P said, "At the same time, we lowered our issue rating on
WEPA's EUR450 million senior secured notes maturing in 2024 to
'BB-' from 'BB'. The recovery rating is '4' indicating our
expectation of average recovery (rounded estimate 35%) in the
event of a default."

The downgrade follows WEPA's weaker-than-expected results as of
Sept. 30, 2017, with its EBITDA margin having shrunk to 11.1%
from 13.3% one year earlier. The main reasons for the decline are
adverse trends in European tissue markets, where sales prices
have dropped while the price of raw material (namely pulp and
recovered paper) increased significantly compared with that in
2016. We understand that WEPA has partially hedged against raw
materials price increases, but it is suffering from sales price
reductions and certain unhedged pulp prices.

S&P said, "We believe that raw material market conditions will
remain tough for the next year, leading us to revise our
forecasts. We now believe WEPA's EBITDA margin is likely to be in
the 10.5%-11.0% range over 2017-2018 compared with the 12.7%
reported in 2016. As a result, we anticipate worsening credit
metrics -- with the adjusted debt-to-EBITDA ratio close to 5.0x
in 2017 and 2018 after 3.9x in 2016 -- that are not commensurate
with our current financial risk profile assessment.

"We expect to see a gradual improvement in results, thanks to the
renegotiation of contracts with customers (the average contract
duration is one year). WEPA should be in a position to pass raw
material cost increases to its customers over the next year.
Although negotiations with some customers have probably already
started, we believe the bulk of the renewals will occur in the
first half of 2018. So the new sales prices will start having an
effect only in the second part of next year, with the full effect
in 2019, when we forecast WEPA's EBITDA margin will be at 11.5%-
12.0% and its adjusted debt to EBITDA comfortably in the 4.0x-
4.5x range.

"We anticipate that WEPA's business risk profile will remain in
the fair category. The group's profitability has been quite
volatile in recent years, due to fluctuating input costs for pulp
and recovered paper, WEPA's relatively small size and scope, and
sales that are mainly in mature Western European tissue markets.
European tissue markets are highly competitive, and raw material
price increases can normally only be passed on with a time lag,
since sales prices are fixed on average for 12 months, posing the
risk of short-term volatility in margins. In addition, WEPA is
exposed to concentration risk because its three largest customers
account for about 25% of the group's volumes. However, this is
partly offset by the long-term relationships WEPA has with those
customers. Key factors supporting WEPA's competitive position
include the group's strong position in the private-label tissue
segment in Germany, stable and noncyclical end-customer demand, a
well-invested asset base, and WEPA's focus on portfolio
optimization and profitability improvements.

"We also evaluate as positive the group's increasing exposure to
the away-from-home segment, which shows different market dynamics
compared with the consumer tissue segment. As of Sept. 30, 2017,
this segment represented 17% of WEPA's total sales, including the
acquisition of Netherlands-based Van Houtum, which was completed
the previous quarter and complements WEPA's geographic footprint.
We see limited integration risks associated with the acquisition
because Van Houtum has only one plant, but acknowledge that it is
likely to slightly dilute WEPA's margin. Nevertheless, we think
WEPA will be able to strengthen margins at this plant through its
continuous improvement programs.

"The stable outlook reflects our expectation that, from first-
half 2018, WEPA will be able to implement sales price increases,
thereby passing on the previous spike in raw material costs to
customers. We believe that WEPA's reported EBITDA margin will
decrease to 10.5%-11.0% over 2017-2018 before improving in 2019,
due to the full contribution of the new sales prices.
Furthermore, we think WEPA will maintain a debt-to-EBITDA ratio
of 4.7x-4.8x in 2017-2018 while posting positive free operating
cash flow, partly thanks to an expected reduction in capex from
2018.

"We could take a negative rating action if we saw clear signs
that adjusted debt to EBITDA would exceed 5x at end-2018. This
could happen if, from the second half of next year, the EBITDA
margin had not improved, due to difficulties in negotiating sales
price increase or continuing increases in raw material prices
that cannot be recovered in 2018.

"We would also view as negative a decline in cash flow
generation, due to larger-than-expected acquisitions or dividend
distribution, which would translate into a more aggressive
financial policy.

"We could consider a positive rating action if the group's credit
metrics improved to such an extent that debt to EBITDA stayed
sustainably well below 4x, free operating cash flow remained
significantly positive, and we believed the company's resilience
to new adverse market conditions had improved, implying no
further significant deterioration of the operating margin and
credit ratios."


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I R E L A N D
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ADAGIO III: Moody's Hikes Class E Notes Rating to Ba2(sf)
---------------------------------------------------------
Moody's Investors Service has upgraded the ratings on the
following notes issued by Adagio III CLO P.L.C:

-- EUR25.8M Class B Senior Floating Rate Notes due 2022,
    Upgraded to Aaa (sf); previously on Jul 25, 2014 Upgraded to
    Aa1 (sf)

-- EUR31.5M Class C Senior Subordinated Deferrable Floating Rate
    Notes due 2022, Upgraded to Aa1 (sf); previously on Jul 25,
    2014 Upgraded to A1 (sf)

-- EUR28.5M Class D Senior Subordinated Deferrable Floating Rate
    Notes due 2022, Upgraded to Baa2 (sf); previously on Jul 25,
    2014 Upgraded to Baa3 (sf)

-- EUR17.5M (Current Outstanding Balance EUR15.8M) Class E
    Senior Subordinated Deferrable Floating Rate Notes due 2022,
    Upgraded to Ba2 (sf); previously on Jul 25, 2014 Upgraded to
    Ba3 (sf)

Moody's also affirmed the ratings of the following notes issued
by ADAGIO III CLO P.L.C.:

-- EUR153M (Current Outstanding Balance EUR29.58M) Class A1A
    Senior Floating Rate Notes due 2022, Affirmed Aaa (sf);
    previously on Jul 25, 2014 Affirmed Aaa (sf)

-- EUR38.3M Class A1B Senior Floating Rate Notes due 2022,
    Affirmed Aaa (sf); previously on Jul 25, 2014 Upgraded to Aaa
    (sf)

-- EUR150M (Current Outstanding Balance EUR53.23M) Class A3
    Senior Floating Rate Notes due 2022, Affirmed Aaa (sf);
    previously on Jul 25, 2014 Upgraded to Aaa (sf)

-- EUR5M Class U Combination Notes due 2022, Affirmed Aa2 (sf);
    previously on Sep 28, 2015 Downgraded to Aa2 (sf)

ADAGIO III CLO P.L.C., issued in August 2006, is a multi-currency
Collateralised Loan Obligation ("CLO") backed by a portfolio
predominantly comprising of high yield senior secured European
loans. The portfolio is managed by AXA Investment Managers Paris.
The transaction ended its reinvestment period on September 15,
2013.

RATINGS RATIONALE

The rating actions on the notes are primarily a result of the
deleveraging of the senior notes following amortisation of the
underlying portfolio since the payment date in March 2017. The
transaction pays semi-annually and on the September 2017 payment
date an amount of EUR125.79M was used to delever the senior notes
of the transaction. Currently EUR128.21M out of an original Class
A amount of EUR361.30M remains outstanding, a factor of 35.5%,
and overcollateralisation (OC) ratios have increased as a result
of the deleveraging. As of the October 31, 2017 trustee report,
the Class A/B, C, D and E OC ratios are reported as 160.17%,
132.97%, 115.26% and 107.32% compared to values of 132.92%,
119.47%, 109.45% and 104.58% as of the 31st March 2017 trustee
report.

The rating on the combination notes address the repayment of the
rated balance on or before the legal final maturity. For the
Class U combination note, the 'rated balance' at any time is
equal to the principal amount of the combination note on the
issue date minus the sum of all payments made from the issue date
to such date, of either interest or principal. The rated balance
will not necessarily correspond to the outstanding notional
amount reported by the trustee. The Class U note is backed by
Obligation Assimilable du TrÇsor securities issued by the French
treasury which have been stripped ("OAT Strips") and the rating
of the Class U note is a look-through to the rating of the
Government of France. Stripping consists of separating a bond's
interest and principal payments.

The key model inputs Moody's uses in its analysis, such as par,
weighted average rating factor, diversity score and the weighted
average recovery rate, are based on its published methodology and
could differ from the trustee's reported numbers. In its base
case, Moody's analysed the underlying collateral pool as having a
performing par of EUR210.68M and GBP 4.90M, principal proceeds
balance of EUR24.62M and GBP 1.59M, defaulted par of GBP 1.31M, a
weighted average default probability of 17.47% (consistent with a
WARF of 2661), a weighted average recovery rate upon default of
46.49% for a Aaa liability target rating, a diversity score of 24
and a weighted average spread of 3.51%. The GBP-denominated
assets are fully hedged with a macro swap, which Moody's also
modelled.

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. 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
analysing.

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.

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

In addition to the base-case analysis, Moody's conducted
sensitivity analyses on the key parameters for the rated notes,
for which it assumed 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 A1A, A1B, A3 and B within one notch of
the base-case results for Classes C, D and 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:

* 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.

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

* Long-dated assets: The presence of assets that mature beyond
the CLO's legal maturity date exposes the deal to liquidation
risk on those assets. Moody's assumes that, at transaction
maturity, the liquidation value of such an asset will depend on
the nature of the asset as well as the extent to which the
asset's maturity lags that of the liabilities. Liquidation values
higher than Moody's expectations would have a positive impact on
the notes' ratings.

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


GRAND CANAL 2: Moody's Assigns Ba3 Rating to Class D Notes
----------------------------------------------------------
Moody's Investors Service has assigned definitive credit ratings
to the following notes issued by Grand Canal Securities 2 DAC:

-- EUR230,866,000 Class A Mortgage Backed Floating Rate Notes
    due December 2058, Definitive Rating Assigned A2 (sf)

-- EUR9,317,000 Class B Mortgage Backed Floating Rate Notes due
    December 2058, Definitive Rating Assigned Baa3 (sf)

-- EUR10,094,000 Class C Mortgage Backed Floating Rate Notes due
    December 2058, Definitive Rating Assigned Ba1 (sf)

-- EUR11,906,000 Class D Mortgage Backed Floating Rate Notes due
    December 2058, Definitive Rating Assigned Ba3 (sf)

Moody's has not assigned ratings to EUR12,164,000 Class E1,
EUR12,164,000 Class E2, EUR12,164,000 Class E3, EUR11,906,000
Class P and EUR207,055,000 Class F Mortgage Backed Notes due
December 2058.

This transaction represents the third securitisation transaction
that Moody's rates in Ireland that is backed by non-performing
loans ("NPL"). The assets supporting the notes are performing
loans ("PLs") and NPLs extended to borrowers in Ireland.

The portfolio is serviced by Mars Capital Finance Ireland DAC
("Mars Capital"; NR). Mars Capital performs the role of the
special servicer in this transaction delegating the primary
servicing to Acenden Limited (NR).

RATINGS RATIONALE

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

At the pool cut off date (October 31, 2017) the definitive pool
amounts to EUR517,640,558. In order to estimate the cash flows
generated by the pool Moody's has split the pool into PLs and
NPLs.

In analysing the PLs, Moody's determined the MILAN Credit
Enhancement (CE) of 42% and the portfolio Expected Loss (EL) of
17.0%. The MILAN CE and portfolio EL are key input parameters for
Moody's cash flow model in assessing the cash flows for the PLs.

MILAN CE of 42%: this is above the average for other Irish RMBS
transactions and follows Moody's assessment of the loan-by-loan
information taking into account the historical performance and
the pool composition including (i) the high weighted average
current loan-to-value (LTV) ratio based on the original property
value as of the loan advance date of 109.5% and indexed LTV of
117.9% of the total pool and (ii) the inclusion of restructured
loans.

Portfolio expected loss of 17%: This is above the average for
other Irish RMBS transactions and is based on Moody's assessment
of the lifetime loss expectation for the pool taking into account
(i) the historical collateral performance of the loans to date,
as provided by the seller; (ii) the current macroeconomic
environment in Ireland, (iii) benchmarking with similar Irish
RMBS transactions and (iv) the inclusion of restructured loans.

In order to estimate the cash flows generated by the NPLs,
Moody's used a Monte Carlo based simulation that generates for
each property backing a loan an estimate of the property value at
the sale date based on the timing of collections.

The key drivers for the estimates of the collections and their
timing are: (i) the historical data received from the servicer;
(ii) the timings of collections for the secured loans based on
the legal stage a loan is located at; (iii) the current and
projected house values at the time of default and (iv) the
servicer's strategies and capabilities in maximising the
recoveries on the loans and in foreclosing on properties.

Hedging: As the collections from the pool are not directly
connected to a floating interest rate, a higher index payable on
the notes would not be offset with higher collections from the
NPLs. The transaction therefore benefits from an interest rate
cap, linked to one-month EURIBOR, with HSBC Bank plc (Aa3/ P-1/
Aa2(cr)/ P-1(cr)) as cap counterparty. The notional of the
interest rate cap is equal to the closing balance of the Class A,
B, C and D notes. The cap expires five years from closing.

Coupon cap: The transaction structure features coupon caps that
apply when five years have elapsed since closing. The coupon caps
limit the interest payable on the notes in case of rising
interest rates following the expiration of the interest rate cap.

Transaction structure: The definitive Class A note size is 44.6%
of the total collateral balance with 55.4% of credit enhancement
provided by the subordinated notes. The payment waterfall
provides for full cash trapping: as long as Class A is
outstanding, any cash left after replenishing the Class A reserve
will be used to repay Class A.

The transaction benefits from an amortising Class A reserve equal
to 3.0% of the Class A note outstanding balance. The Class A
reserve can be used to cover senior fees and interest payments on
Class A. The amounts released from the Class A reserve form part
of the available funds in the subsequent interest payment date
and thus will be used to pay the servicer fees and/or to amortise
Class A. The Class A reserve would be sufficient to cover around
15 months of interest on the Class A notes and more senior items,
at the strike price of the cap. Class B benefits from a dedicated
Class B interest reserve equal to 7.0% of Class B balance at
closing which can only be used to pay interest on Class B while
Class A is outstanding. The Class B interest reserve is
sufficient to cover around 33 months of interest on Class B,
assuming EURIBOR at the strike price of the cap. Class C benefits
from a dedicated Class C interest reserve equal to 12.0% of Class
C balance at closing which can only be used to pay interest on
Class C while Classes A and B are outstanding. The Class C
interest reserve is sufficient to cover around 41 months of
interest on Class C, assuming EURIBOR at the strike price of the
cap. Class D benefits from a dedicated Class D interest reserve
equal to 15.0% of Class D balance at closing which can only be
used to pay interest on Class D while Classes A, B and C are
outstanding. The Class D interest reserve is sufficient to cover
around 40 months of interest on Class D, assuming EURIBOR at the
strike price of the cap. Unpaid interest on Class B, C and Class
D is deferrable with interest accruing on the deferred amounts at
the rate of interest applicable to the respective note.

Servicing disruption risk: Intertrust Finance Management
(Ireland) Limited (NR) is the back-up servicer facilitator in the
transaction. The back-up servicer facilitator will help the
issuer to find a substitute servicer in case the servicing
agreement with Mars Capital is terminated. Moody's expect the
Class A reserve to be used up to pay interest on Class A in
absence of sufficient regular cashflows generated by the
portfolio early on in the life of the transaction. It is
therefore likely that there will not be sufficient liquidity
available to make payments on the Class A notes in the event of
servicer disruption. In addition, the servicer fee due senior in
the waterfall is capped at 0.40% and increases to 0.48% in case
the servicing agreement with Mars Capital is terminated. The
senior servicing fee cap could make it more difficult for the
back-up servicer facilitator to find a substitute servicer
willing to service the portfolio under these conditions. The
insufficiency of liquidity in conjunction with the lack of a
back-up servicer mean that continuity of note payments is not
ensured in case of servicer disruption. This risk is commensurate
with the single-A rating assigned to the most senior note.

Moody's Parameter Sensitivities: The model output indicates that
if on the non-performing pool house price volatility were to be
increased to 7.10% from 5.92%, it would take an additional 12
months to go through the foreclosure process with MILAN CE
increased to 50.4% from 42% and EL increased to 20.4% from 17% on
the performing pool the Class A notes would remain at A2. Moody's
Parameter Sensitivities provide a quantitative/model-indicated
calculation of the number of rating notches that a Moody's
structured finance security may vary if certain input parameters
used in the initial rating process differed. The analysis assumes
that the deal has not aged and is not intended to measure how the
rating of the security might migrate over time, but rather how
the initial rating of the security might have differed if key
rating input parameters were varied.

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

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

Factors that may lead to an upgrade of the ratings include that
the recovery process of the NPLs produces significantly higher
cash flows realised in a shorter time frame than expected and a
better than expected performance on the PLs.

Factors that may cause a downgrade of the ratings include
significantly less or slower cash flows generated from the
recovery process on the NPLs and a worse than expected
performance on the PLs compared with Moody's expectations at
close due to either a longer time for the courts to process the
foreclosures and bankruptcies or a change in economic conditions
from Moody's central scenario forecast or idiosyncratic
performance factors. For instance, should economic conditions be
worse than forecasted, falling property prices could result, upon
the sale of the properties, in less cash flows for the Issuer or
it would take a longer time to sell the properties and the higher
defaults and loss severities resulting from a greater
unemployment, worsening household affordability and a weaker
housing market could result in downgrade of the rating.
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.

The ratings address the expected loss posed to investors by the
legal final maturity. 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 date,
and ultimate payment of interest and principal with respect to
Classes B, C and D by legal final maturity. Moody's ratings
address only the credit risks associated with the transaction.
Other non-credit risks have not been addressed, but may have a
significant effect on yield to investors.


HARVEST CLO XVIII: Moody's Assigns (P)B2 Rating to Class F Notes
----------------------------------------------------------------
Moody's Investors Service has assigned provisional ratings to
eight classes of notes to be issued by Harvest CLO XVIII DAC:

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

-- EUR197,000,000 Class A-1 Senior Secured Floating Rate Notes
    due 2030, Assigned (P)Aaa (sf)

-- EUR30,000,000 Class A-2 Senior Secured Fixed Rate Notes due
    2030, Assigned (P)Aaa (sf)

-- EUR56,500,000 Class B Senior Secured Floating Rate Notes due
    2030, Assigned (P)Aa2 (sf)

-- EUR33,500,000 Class C Senior Secured Deferrable Floating Rate
    Notes due 2030, Assigned (P)A2 (sf)

-- EUR22,000,000 Class D Senior Secured Deferrable Floating Rate
    Notes due 2030, Assigned (P)Baa2 (sf)

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

-- EUR10,500,000 Class F Senior Secured Deferrable Floating Rate
    Notes due 2030, Assigned (P)B2 (sf)

Moody's issues provisional ratings in advance of the final sale
of financial instruments, but these ratings only represent
Moody's preliminary credit opinions. Upon a conclusive review of
a transaction and associated documentation, Moody's will
endeavour to assign definitive ratings. A definitive rating (if
any) may differ from a provisional rating.

RATINGS RATIONALE

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

Harvest XVIII is a managed cash flow CLO. At least 90% of the
portfolio must consist of secured senior obligations and up to
10% of the portfolio may consist of unsecured senior loans,
unsecured senior bonds, second lien loans, mezzanine obligations,
high yield bonds and/or first lien last out loans. At closing,
the portfolio is expected to be comprised predominantly of
corporate loans to obligors domiciled in Western Europe. The
remainder of the portfolio will be acquired during the nine month
ramp-up period in compliance with the portfolio guidelines.

Investcorp 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 reinvestment period.
Thereafter, purchases are permitted using principal proceeds from
unscheduled principal payments and proceeds from sales of credit
improved and credit risk obligations, and are subject to certain
restrictions.

In addition to the eight classes of notes rated by Moody's, the
Issuer will issue EUR39,200,000 of subordinated notes. Moody's
will not assign a rating to this class of notes.

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

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

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

Loss and Cash Flow Analysis:

Moody's modeled the transaction using a cash flow model based on
the Binomial Expansion Technique, as described in Section 2.3.2.1
of the "Moody's Global Approach to Rating Collateralized Loan
Obligations" rating methodology published in August 2017.

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

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

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

Target Par Amount: EUR400,000,000

Defaulted par: EUR0

Diversity Score:40

Weighted Average Rating Factor (WARF): 2275

Weighted Average Spread (WAS): 3.50%

Weighted Average Recovery Rate (WARR): 44.00%

Weighted Average Life (WAL): 8.72 years

As part of its analysis, Moody's has addressed the potential
exposure to obligors domiciled in countries with local currency
government bond ratings of A1 or below. According to the
portfolio constraints, the total exposure to countries with a
local currency country risk bond ceiling ("LCC") below Aa3 shall
not exceed 10%, the total exposure to countries with an LCC below
A3 shall not exceed 5% and the total exposure to countries with
an LCC below Baa3 shall not exceed 0%. Given this portfolio
composition, the model was run with different target par amounts
depending on the target rating of each class of notes as further
described in the methodology. The portfolio haircuts are a
function of the exposure size to countries with LCC of A1 or
below and the target ratings of the rated notes, and amount to
0.75% for the Class X, A-1 and A-2 Notes, 0.50% for the Class B
Notes, 0.375% for the Class C notes and 0% for Classes D, E and F
Notes.

Stress Scenarios:

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

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

Percentage Change in WARF -- increase of 15% (from 2775 to 3191)

Rating Impact in Rating Notches:

Class X Senior Secured Floating Rate Notes: 0

Class A-1 Senior Secured Floating Rate Notes:0

Class A-2 Senior Secured Fixed Rate Notes:0

Class B Senior Secured Floating Rate Notes: -1

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: 0

Class F Senior Secured Deferrable Floating Rate Notes: 0

Percentage Change in WARF -- increase of 30% (from 2775 to 3608)

Class X Senior Secured Floating Rate Notes: 0

Class A-1 Senior Secured Floating Rate Notes:0

Class A-2 Senior Secured Fixed Rate Notes:0

Class B Senior Secured Floating Rate Notes: -2

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: 0

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.


HARVEST CLO XVIII: S&P Assigns Prelim B- Rating to Class F Notes
----------------------------------------------------------------
S&P Global Ratings assigned its preliminary credit ratings to
Harvest CLO XVIII DAC's class X, A1, A2, B, C, D, E, and F notes.
At closing, the issuer will also issue unrated subordinated
notes.

The preliminary ratings assigned to Harvest CLO XVIII's notes
reflect S&P's assessment of:

-- The diversified collateral pool, which consists primarily of
    broadly syndicated speculative-grade senior secured term
    loans and bonds that are governed by collateral quality
    tests.

-- The credit enhancement provided through the subordination of
    cash flows, excess spread, and overcollateralization.

-- The collateral manager's experienced team, which can affect
    the performance of the rated notes through collateral
    selection, ongoing portfolio management, and trading.

-- The transaction's legal structure, which is expected to be
    bankruptcy remote.

S&P said, "We consider that the transaction's documented
counterparty replacement and remedy mechanisms adequately
mitigate its exposure to counterparty risk under our current
counterparty criteria.

"Following the application of our structured finance ratings
above the sovereign criteria, we consider the transaction's
exposure to country risk to be limited at the assigned
preliminary rating levels, as the exposure to individual
sovereigns does not exceed the diversification thresholds
outlined in our criteria (see "Ratings Above The Sovereign -
Structured Finance: Methodology And Assumptions," published on
Aug. 8, 2016).

"At closing, we consider that the transaction's legal structure
will be bankruptcy remote, in line with our legal criteria.

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

Harvest CLO XVIII is a European cash flow corporate loan
collateralized loan obligation (CLO) securitization of a
revolving pool, comprising euro-denominated senior secured loans
and bonds issued mainly by European borrowers. Investcorp Credit
Management EU Ltd. is the collateral manager.

RATINGS LIST

  Preliminary Ratings Assigned

  Harvest CLO XVIII DAC
  EUR412.7 Million Senior Secured Floating- And Fixed-Rate Notes
  (Including EUR39.2 Million Subordinated Notes)

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

  X              AAA (sf)            3.0
  A1             AAA (sf)          197.0
  A2             AAA (sf)           30.0
  B              AA (sf)            56.5
  C              A (sf)             33.5
  D              BBB (sf)           22.0
  E              BB- (sf)           21.0
  F              B- (sf)            10.5
  Sub.           NR                 39.2

  NR--Not rated.
  Sub.--Subordinated.


WILLOW PARK: Moody's Assigns B2 Rating to Class E Notes
-------------------------------------------------------
Moody's Investors Service announced that it has assigned the
following definitive ratings to notes issued by Willow Park CLO
Designated Activity Company:

-- EUR239,000,000 Class A-1 Senior Secured Floating Rate Notes
    due 2031, Definitive Rating Assigned Aaa (sf)

-- EUR40,750,000 Class A-2A Senior Secured Floating Rate Notes
    due 2031, Definitive Rating Assigned Aa2 (sf)

-- EUR12,000,000 Class A-2B Senior Secured Fixed Rate Notes due
    2031, Definitive Rating Assigned Aa2 (sf)

-- EUR22,750,000 Class B Senior Secured Deferrable Floating Rate
    Notes due 2031, Definitive Rating Assigned A2 (sf)

-- EUR21,250,000 Class C Senior Secured Deferrable Floating Rate
    Notes due 2031, Definitive Rating Assigned Baa2 (sf)

-- EUR25,250,000 Class D Senior Secured Deferrable Floating Rate
    Notes due 2031, Definitive Rating Assigned Ba2 (sf)

-- EUR13,000,000 Class E Senior Secured Deferrable Floating Rate
    Notes due 2031, Definitive Rating Assigned B2 (sf)

RATINGS RATIONALE

Moody's definitive rating of the rated notes addresses the
expected loss posed to noteholders by legal final maturity of the
notes in 2031. The definitive ratings reflect the risks due to
defaults on the underlying portfolio of loans given the
characteristics and eligibility criteria of the constituent
assets, the relevant portfolio tests and covenants as well as the
transaction's capital and legal structure. Furthermore, Moody's
is of the opinion that the collateral manager, Blackstone/GSO
Debt Funds Management Europe Limited, has sufficient experience
and operational capacity and is capable of managing this CLO.

Willow Park CLO Designated Activity Company is a managed cash
flow CLO. At least 90% of the portfolio must consist of secured
senior obligations and up to 10% of the portfolio may consist of
unsecured senior loans, unsecured senior bonds, second lien
loans, mezzanine obligations, high yield bonds and/or first lien
last out loans. The portfolio is expected to be 78% ramped up as
of the closing date and to be comprised predominantly of
corporate loans to obligors domiciled in Western Europe. This
initial portfolio will be acquired by way of participations which
are required to be elevated as soon as reasonably practicable.
The remainder of the portfolio will be acquired during the six
month ramp-up period in compliance with the portfolio guidelines.

Blackstone/GSO Debt Funds Management Europe Limited 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 4.62 years reinvestment period. Thereafter,
purchases are permitted using principal proceeds from unscheduled
principal payments and proceeds from sales of credit risk
obligations, and are subject to certain restrictions.

In addition to the seven classes of notes rated by Moody's, the
Issuer will issue EUR38,380,000 of subordinated notes. Moody's
will not assign a rating to this class of notes.

The transaction incorporates interest and par coverage tests
which, if triggered, will 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. Blackstone/GSO Debt Funds
Management Europe Limited's investment decisions and management
of the transaction will also affect the notes' performance.

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

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

Par Amount: EUR400,000,000

Diversity Score: 38

Weighted Average Rating Factor (WARF): 2859

Weighted Average Spread (WAS): 3.65%

Weighted Average Coupon (WAC): 5.0%

Weighted Average Recovery Rate (WARR): 43.5%

Weighted Average Life (WAL): 8.5 years

Stress Scenarios:

Together with the set of modelling assumptions above, Moody's
conducted an additional sensitivity analysis, which was an
important component in determining the 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 3288 from 2859)

Ratings Impact in Rating Notches:

Class A-1 Senior Secured Floating Rate Notes: 0

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

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

Class B Senior Secured Deferrable Floating Rate Notes: -2

Class C Senior Secured Deferrable Floating Rate Notes: -2

Class D Senior Secured Deferrable Floating Rate Notes: -1

Class E Senior Secured Deferrable Floating Rate Notes: 0

Percentage Change in WARF: WARF +30% (to 3717 from 2859)

Ratings Impact in Rating Notches:

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

Class A-2A Senior Secured Floating Rate Notes: -4

Class A-2B Senior Secured Fixed Rate Notes: -4

Class B Senior Secured Deferrable Floating Rate Notes: -4

Class C Senior Secured Deferrable Floating Rate Notes: -3

Class D Senior Secured Deferrable Floating Rate Notes: -2

Class E Senior Secured Deferrable Floating Rate Notes: -2

Further details regarding Moody's analysis of this transaction
may be found in pre-sale report, available on Moodys.com.

Methodology Underlying the Rating Action:

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


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


SOCIETA CATTOLICA: S&P Rates Fixed-To-Floating-Rate Notes 'BB+'
---------------------------------------------------------------
S&P Global Ratings said that it has assigned its 'BB+' long-term
issue rating to the proposed fixed-to-floating-rate dated
subordinated notes to be issued by Italian insurer Societa
Cattolica di Assicurazione (Cattolica; BBB/Stable/--). The rating
is subject to S&P's review of the final terms and conditions.

S&P said, "The rating reflects that, based on the draft
prospectus received, we have classified the subordinated notes as
having intermediate equity content under our hybrid capital
criteria. We include securities of this nature, up to a maximum
of 25%, in our calculation of total adjusted capital (TAC), which
forms the basis of our consolidated risk-based capital analysis
of insurance companies. Such inclusion is subject to the bonds
being considered eligible for regulatory solvency treatment and
the aggregate amount of included hybrid capital not exceeding the
total amount eligible for regulatory solvency treatment. The
confirmation of the equity content and rating are also subject to
the notes' final terms and conditions. We do not expect any
changes to the draft prospectus.

"The rating on the subordinated notes is two notches below our
issuer credit rating on Cattolica, reflecting our standard
notching for subordinated debt issues. The rating is based on our
understanding that holders of the notes will be subordinated to
Cattolica's senior creditors, and that Cattolica has the option
of deferring interest. Furthermore, we note that interest
deferral is mandatory in the event of a solvency or regulatory
event.

"We also understand that the notes are callable in December 2027,
and on any interest payment date thereafter. Initially, Cattolica
will pay an annual fixed coupon until December 2027, after which
the coupon will become floating, including a step-up of 100 basis
points to the fixed-rate spread, payable quarterly if the call is
not exercised. Cattolica has the option to redeem, exchange, or
vary the terms of the notes under certain circumstances, such as
for a tax deductibility event, regulatory requirement, or rating
eligibility reasons."

Cattolica plans to use the proceeds of the proposed note to
partly finance its recently announced acquisition of a 65% share
in bancassurance joint ventures from Banco BPM, Italy's third-
largest banking group, for EUR853 million.

S&P said, "After issuing the subordinated debt, we estimate
Cattolica's consolidated financial leverage will rise toward 25%
in 2018 from 8% at year-end 2016, and its fixed-charge coverage
will fall to below 10x from over 20x. The increased leverage is
not a rating constraint but merely brings Cattolica more in line
with its peers. Thus, our view of Cattolica's overall financial
flexibility remains unchanged.

"Our ratings on Cattolica already reflect our expectation that
its consolidated capital adequacy will weaken to just below the
'BBB' level as a result of the acquisition cost and consolidation
impact of the joint ventures with Banco BPM. Our opinion takes
into consideration our estimated increase in asset and insurance
risk capital requirements, as well as the impact of the hybrid
issue, goodwill, value of in-force policies, and minorities on
the TAC."


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


4FINANCE: S&P Alters Outlook to Stable, Affirms B+ Credit Rating
----------------------------------------------------------------
S&P Global Ratings said that it has revised its outlook on
Luxembourg-based online unsecured credit provider 4finance
Holding S.A. to stable from negative. S&P affirmed its 'B+'
long-term issuer credit rating on the company.

S&P said, "At the same time, we revised our recovery rating to
'4' from '3' on the unsecured debt issued by 100%-owned
subsidiary 4finance S.A., and affirmed our 'B+' issue rating. The
'4' recovery rating indicates our expectation of recovery
prospects in the 30%-50% range (rounded estimate: 45%) in the
event of a payment default.

"The rating actions stem from our view that 4finance will
continue to work to integrate previous acquisitions, such as that
of TBI Bank, in an orderly fashion. Although 4finance's costs
have increased as a result of TBI Bank's acquisition, we believe
the group has little need for incremental funding in 2018. As
such, we anticipate that its credit metrics will remain broadly
stable. However, we consider that the group's creditworthiness
could deteriorate if it faces difficulties incorporating new
acquisitions or experiences a material increase in impairments,
which could weaken its credit metrics or profitability."

Over the past two years, 4finance has pursued an aggressive
growth strategy, which involved organic and acquisitive expansion
into new markets across Central Europe and Latin America. In
August 2016, this included the purchase of Bulgaria-based TBI
Bank, which is active in the unsecured consumer lending segment.
S&P said, "Although we recongize that TBI Bank complements the
group's product suite and geographically diverse business
operations, we consider that managing the integration of a
regulated bank would be more demanding and costly than previous
acquisitions. Nevertheless, operational risks currently appear
contained and cost-efficiency programs have been put in place to
manage the increase in costs. That said, we believe that, because
TBI Bank is a regulated entity, as its revenues increase, there
is a possibilty that the banking supervisor could create a
barrier to cash flows between the group's operating subsidiaries
and 4finance Holding (a nonoperating holding company), which
could weigh on the rating."

This year, 4finance has decided that its future growth will
primarily be organic and through the group's current platform.
S&P said, "We believe further geographic expansion to be unlikely
in the near term, since 4finance is already active in 16
countries. Conequently, we expect growth will come from
broadening the customer base and increasing penetration of the
near-prime consumer loan segment, compared with the current
subprime focus. We expect that this, in addition to building on
primary products (single payment, instalment loans, and lines of
credit) will be beneficial for the group's risk profile."

The shift in strategy coincides with changes to 4finance's
management team, including the appointment of a new CEO, who has
been an active member of the group's supervisory board since the
start of 2017.

4finance group remains concentrated on the European unsecured
short-term consumer lending market, which, in our opinion,
subjects it to material reputation, regulatory, and operational
risks. S&P said, "In addition, we see the potential for leverage
to be understated, since reported profitability and capital may
not fully translate into an appropriate level of reserves over
the medium term. This may improve after the implementation of
International Financial Reporting Standard No. 9. However, we
maintain our conservative view of the company's overall policy
toward provisioning, and apply a negative financial policy
modifier to the anchor."

S&P said, "The stable outlook reflects our view that 4finance is
in the process of managing the integration of TBI Bank and the
increased costs related to the transaction. We anticipate its
credit metrics will remain broadly stable, with our primary
metric of debt to adjusted EBITDA remaining in the 3.0x-4.0x
range over the next year. Supporting the stable outlook is the
group's management's commitment to a less-acquisitive growth
strategy in the future, showing a preference to building on the
current platform and customer base.

"We could take a negative rating action if revenue growth or
profitabilty weakened materially over the next 12 months.
Increased leverage to finance continued volume growth or other
acquisitions, leading to a debt-to-EBITDA ratio markedly higher
than 4.0x, would also have a negative impact on our ratings. In
addition, if regulated revenues were to increase materially and
created meaningful potential for supervisory barriers to cash
flows between the group's operating subsidiaries and 4finance
Holding, we could also take a negative rating action.

"We currently view a positive rating action as unlikely at this
stage. However, factors we could consider are the group's
earnings generation and leverage, as indicated by our credit
metrics."


GALILEO GLOBAL: S&P Assigns 'B' Long-Term CCR, Outlook Stable
-------------------------------------------------------------
S&P Global Ratings assigned its 'B' long-term corporate credit
rating to Luxembourg-incorporated higher education services group
Galileo Global Education Finance SARL (GGE). The outlook is
stable.

S&P said, "We also assigned our 'B' issue rating to the proposed
EUR445 million term loan B and to the proposed EUR72.5 million
revolving credit facility (RCF). The recovery rating on this debt
is '4' indicating our expectation of average recovery prospects
(30%-50%; rounded estimate: 45%) in the event of payment
default."

The rating on GGE primarily incorporates its relatively small
scale in the highly fragmented private education provider market,
as well as its high leverage and financial sponsor ownership.
GGE's small scale of operations relative to peers in the highly
competitive and fragmented private-for-profit higher educational
industry constrains our assessment of the group's business risk
profile. In our assessment, we factor in the tier 2 rankings of
some of GGE's schools, especially in the business school segment
in France, with GGE's schools having fewer accreditations than
tier 1 competitors operating in the private non-profit segment.
S&P said, "We also consider that the group has some earnings
concentration, with its top-three school brands generating more
than 30% of total reported EBITDA. However, we view favorably the
group's acquisition of two assets from Laureate International
Universities in Cyprus and in Italy. The deal will broaden GGE's
EBITDA base, with about EUR22 million of reported EBITDA expected
in 2017 for the two combined assets. It also diversifies the
group away from France, where it currently derives more than 60%
of its EBITDA and increases the group's exposure to the health
and medicine segment, where global demand is growing."

"We consider that GGE has good revenue visibility, given that
students pay tuition fees in advance, and the group has no
reliance on public funding because 99% of its revenues come from
tuition fees paid by students. Program lengths are between two
and five years, and the overall completion rate is about 70%. In
particular, we understand that GGE has secured 80% of 2018
revenues from students already enrolled or set to enroll in
September and October 2017, which makes annual performance -- and
credit metrics -- more predictable.

"Under our base-case scenario, we expect that GGE's credit
metrics will remain in the highly leveraged category over the
next couple of years, with pro forma adjusted debt to EBITDA of
about 6.0x in 2018, after less than 5.0x in 2017. We exclude the
group's preferred equity certificates from our debt adjustment
and treat them as equity in our calculation.

"Our rating on GGE also reflects our forecast that the ratio of
funds from operations (FFO) to cash interest will remain at above
2.0x, well within our thresholds for the current rating level,
with positive free operating cash flow (FOCF) generation of
between EUR15 million and EUR20 million in 2017 and 2018.

"The stable outlook on GGE reflects our expectation that its
reported EBITDA will be about EUR45 million in 2017 and between
EUR65 million and EUR70 million in 2018, including the
contributions from Laureate in Cyprus and Laureate in Italy. The
stable outlook also captures our assumptions that S&P Global
Ratings-adjusted debt to EBITDA will reach 6.0x in 2018, post
transaction, after less than 5.0x in 2017. FFO cash interest
coverage should remain well within our thresholds for the rating,
at above 2x, with positive reported FOCF.

"Because the private higher education market is fragmented and we
understand that GGE will participate in sector consolidation, we
think potential rating downside would most likely result from
further material or transformative debt-financed acquisitions
that would push up the group's leverage. We could also lower our
rating if GGE failed to manage the integration of Laureate in
Cyprus and Laureate in Italy, while also facing declining
operating performance that prompted lower profitability and FOCF
turning negative.

"We view an upgrade of GGE as unlikely over the next 12 months.
It would hinge on the group committing to a more conservative
financial policy, leading us to consider the overall likelihood
of releveraging to be remote. We could raise our rating on GGE if
S&P Global Ratings-adjusted debt to EBITDA decreased to below
5.0x on a sustainable basis, together with sizable FOCF."


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


SAPPHIRE BIDCO: Moody's Rates Proposed EUR950MM Term Loan (P)B2
----------------------------------------------------------------
Moody's Investors Service has assigned provisional (P)B2
instrument ratings to the proposed EUR950 million equivalent
first lien term loan due 2024 and the EUR150 million equivalent
revolving credit facility (RCF) due 2024 and a provisional
(P)Caa2 instrument rating to the proposed EUR200 million second
lien term loan due 2025, which are all expected to be issued by
Sapphire Bidco B.V.. The outlook on all aforementioned instrument
ratings is stable.

Sapphire Midco B.V. ("Sapphire") and Sapphire Bidco B.V. are
newly incorporated entities. Sapphire Midco B.V. is expected to
be the future holding company of TMF Group, a leading global
provider of specialised financial, legal and HR administrative
services - and the topco entity of the new restricted group.

At the same time, Moody's has placed under review for downgrade
TMF Group Holding B.V.'s (TMF) corporate family rating (CFR) of
B2 and its B2-PD probability of default rating (PDR). TMF Group
Holding B.V. is the current parent and holding company of TMF
Group.

The ratings on the outstanding debt issued by TMF Group Holding
B.V. remain unchanged and would be withdrawn upon repayment.

Should the acquisition of TMF by Sapphire conclude as envisaged,
Moody's would expect to move the CFR from TMF Group Holding B.V.
to Sapphire Midco B.V., to reflect the new corporate structure.
Moody's current expectation is also that the CFR will be
downgraded to B3 from B2, principally due to the anticipated re-
leveraging of the business by approximately 2.5x as a result of
the increase in total financial debt by EUR0.4 billion post LBO.

Pro-forma for the announced new capital structure, Moody's
adjusted gross leverage -- excluding the overdraft facility --
will increase to approximately 7.7x from 5.2x at the end of
September 2017. Moody's expects the company to deleverage towards
a Moody's adjusted gross leverage -- excluding the overdraft
facility -- of 6.5x (excluding expected on-going M&A
restructuring and integration costs) in next 12-18 months as a
result of positive revenue and EBITDA growth driven by resilient
organic performance across its major geographies, improved cost
structure following the implementation of certain initiatives,
primarily focused on FTE reduction carried out during 2017, and
declining exceptional costs.

Moody's adjusted leverage has been determined on a pro-forma
basis taking into account the full-year EBITDA of the recently
acquired businesses and already implemented cost savings actions
in IT and FTE reduction however it excludes add-backs for
exceptional costs (EUR27.4 million in the nine months of 2017).
TMF's exceptional costs are mainly related to restructuring and
integration costs of acquired businesses which Moody's considers
recurring given the central role of bolt-on acquisitions within
the company' strategy. In addition, Moody's notes that TMF's
audited accounts present the company's notional cash pooling in
gross terms as there is no intention for physical set-off. This
has significant implications for Moody's Gross Debt ratios and
consequently, in this exceptional case, Moody's considers that a
Gross Debt excluding the outstanding overdraft facility would be
more appropriate to calculate Moody's adjusted company's leverage
than its traditional Gross Debt / EBITDA calculation. At the end
of 2016, the cash balance was EUR274 million and the related
overdraft was EUR228 million. Whilst TMF does not have a legal
right of set-off, the overdraft is covered by deposits held with
a financial institution with an A rating which Moody's considers
a lower risk than ordinary uncovered overdraft facilities.
Moody's use of a Gross Debt excluding overdraft balance in this
instance is dependent upon maintenance of cash balances
considered sufficient to cover the size of the associated
overdraft.

Moody's issues provisional ratings in advance of the final sale
of securities. Upon closing of the transaction and a conclusive
review of the final documentation, Moody's will endeavour to
assign definitive ratings. A definitive rating may differ from a
provisional rating.

RATINGS RATIONALE

The action reflects the announcement of the new capital structure
that CVC Capital Partners ("CVC") intends to put in place to
finalise the EUR1.75 billion acquisition of TMF. The transaction
is expected to complete during Q1 2018 upon regulatory approvals.
It is Moody's understanding that the sponsors will contribute
approximately EUR0.65 billion of common equity to the restricted
group.

The ratings reflect (1) TMF's strong position as a corporate
services provider complemented by a global network of over 120
offices that enables growth for clients into new regions and
offers cost-efficient outsourcing of corporate functions; (2) the
high switching costs as TMF's services are sometimes deeply
embedded in the clients' process; (3) the good organic growth in
revenue and EBITDA; and (4) the stable performance throughout the
cycle, good margins and cash flow generation.

The ratings also reflect (1) the increase in leverage following
the announced LBO; (2) the limited size and reliance on Europe,
in particular the Benelux region, for a large part of revenues
and EBITDA; (3) the need for strong compliance and know-your-
customer (KYC) procedures given the complexity of regulation, tax
and reporting requirements across the world and elevated legal
risks inherent in the industry, particularly related to
situations where TMF provides trustee, (independent) director, or
proxy management representative services for clients; and (4) the
significant restructuring and integration costs, primarily
related to acquisitions, that have historically pressured
operating cash flow generation.

Liquidity Profile

TMF's liquidity, pro-forma for the transaction, is expected to be
good supported by EUR50 million cash balance, pro-forma for the
LBO transaction, and by the new EUR150 million-equivalent
revolving credit facility (RCF) which is expected to be undrawn
at closing of the transaction.

Moody's anticipates that free cash flow - calculated after capex,
taxes and interests payments but before acquisitions - will
remain above EUR20 million in the next 12-18 months. Moody's
considers it unlikely that the company will retain significant
cash on balance sheet, applying residual cash flow toward
acquisitions.

The RCF has one springing covenant (first lien net leverage -- as
calculated by the management) that is tested when the facility is
drawn for more than 40%. This first lien net leverage covenant
level is expected to be set at a maximum of 9.50x.

The draft debt documentation reviewed includes a cash sweep
mechanism for excess cash above the greater of EUR15 million and
10% LTM consolidated EBITDA. Based on the proposed transaction,
the next debt maturity will be the revolving credit facility in
2024.

Structural Considerations

The (P)B2 rating on the first-lien term loan and RCF, all ranking
pari passu and issued by Sapphire Bidco B.V., one notch above the
likely new CFR of B3, expected to be assigned to Sapphire Midco
B.V., reflects the seniority of these facilities ahead of the
(P)Caa2 second-lien term loan and the unsecured lease rejection
claims. The company's facilities benefit from guarantees from a
number of guarantors which together represent no less than 70% of
TMF's consolidated adjusted EBITDA.

WHAT COULD CHANGE THE RATING UP/DOWN

In light of action, Moody's anticipates negative rating pressure
following its review of the final capital structure. Moody's
current expectation is that the CFR will be downgraded to B3 from
B2.

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.

CORPORATE PROFILE

TMF is a global provider of business process services mainly for
companies but also for individuals, funds and structured finance
vehicles with 59% of revenue generated in EMEA including 24% in
the Benelux region for the last twelve months to September 2017.
Global Business Services ("GBS") (58% of revenue) provides
integrated legal, tax, administrative (including payroll) and
accounting services for companies. Trust & Corporate Services
("TCS") (42% of revenue) provides services associated with the
creation and administration of financial vehicles, administration
of corporate structures for high net worth individuals and for
the administration of alternative investments especially for
Private Equity and Real Estate sectors. The group operates 39,900
client entities across 83 jurisdictions.

For the last twelve months to September 2017, TMF reported
revenue of EUR559 million (EUR506 million in LTM September 2016)
and company's adjusted EBITDA of EUR146 million and 26.2% EBITDA
margin (EUR131 million and 25.9% margin in LTM September 2016).


SUNSHINE MID: S&P Assigns Preliminary 'B+' CCR, Outlook Stable
--------------------------------------------------------------
S&P Global Ratings said it has assigned its preliminary 'B+'
long-term corporate credit rating to Sunshine Mid B.V.
(Sunshine), the new parent company of Netherlands-based
independent bottler, Refresco Group N.V. (Refresco). The outlook
is stable.

S&P said, "At the same time, we assigned our preliminary 'B+'
issue rating to the proposed EUR1.970 billion senior term loan B
facilities and EUR200 million revolving credit facility (RCF)
issued by Sunshine. The recovery rating on these issues, which
rank pari passu, is '3', indicating our expectation of meaningful
(50%-70%; rounded estimate: 50%) recovery in the event of a
payment default.

"We also assigned our preliminary 'B-' issue rating to the
subordinated EUR445 million senior unsecured debt instruments
issued by Sunshine. The recovery rating of '6' indicates our
expectation of negligible (0%-10%) recovery in the event of a
payment default.

The final ratings will be subject to the successful closing of
the proposed issuance and will depend on our receipt and
satisfactory review of all final transaction documentation.
Accordingly, the preliminary ratings should not be construed as
evidence of the final ratings. S&P said, "If the final debt
amounts and the terms of the final documentation depart from the
materials we have already reviewed, or if we do not receive the
final documentation within what we consider to be a reasonable
time frame, we reserve the right to withdraw or revise our
ratings."

The 'BB-' corporate credit rating on Refresco remains on
CreditWatch with negative implications, where it was placed on
Oct. 26, 2017. S&P said, "At the same time, we affirmed our 'BB-'
issue rating on the multicurrency senior secured term loan
facilities. The recovery rating is unchanged at '3' reflecting
our expectation of average (30%-50%; rounded estimate: 50%)
recovery in the event of default."

The proposed private equity takeover of Refresco will be partly
funded by an issuance of approximately EUR1.970 billion senior
secured debt and EUR445 million new senior unsecured debt with a
tenor of seven and eight years, respectively. S&P said, "We
expect the senior secured term loan facility to include euro,
U.S. dollar, and pound sterling tranches, while a new EUR200
million multi-currency RCF will also be available for general
corporate purposes. Refresco's remaining enterprise value will be
funded with an equity injection of at least EUR980 million from
the group's owners and management."

S&P said, "We estimate that the increase in debt obligations,
compared with Refresco's existing capital structure, will be
about EUR580 million following this transaction. The indicative
pricing on the new debt issuances is expected to result in the
average cost of debt increasing by around 1%-2% for the new
group. We anticipate, however, that the group's increased scale
and earnings base, as it integrates the recent acquisition of
Cott's bottling activities, should result in EBITDA interest
coverage metrics comfortably above 3.0x in our forecast.

"We view the group's new prospective owners as financial
sponsors, given that private equity firms pursue an aggressive
financial strategy to maximize shareholder returns. This
assessment is supported by our forecast credit metrics for the
group, including S&P Global Ratings-adjusted debt to EBITDA of
6.5x-8.0x and funds from operations (FFO) to debt of less than
12% in 2017 and 2018. Our estimates of debt include the new
proposed debt instruments totaling around EUR2.4 billion, EUR25
million of bilateral loans and additional adjustments for
operating leases, and pension obligations totaling around EUR250
million. We would no longer give benefit for surplus cash held by
the company in our forecasts, given the change in ownership.

"The group's continued focus on working capital management and
strategic capital expenditure (capex) is crucial in supporting
the group's ability to reduce gearing levels in our forecasts. We
forecast group revenue of EUR3.5 billion-EUR3.6 billion in 2018
with the completion of the Cott's acquisition, compared with
EUR2.2 billion-EUR2.3 billion in 2017, reflecting the increased
scale of the business going forward. Our estimates of adjusted
debt to EBITDA in 2018 and 2019 are expected to be 6.0x-7.0x as
we anticipate the group will focus on driving cash conversion and
reducing operational complexities and waste. Our revised
forecasts no longer include a EUR200 million rights issue in
2018, which previously supported the group's deleveraging path as
a public company. We closely monitor the free operating cash flow
(FOCF)-to-debt ratio in our forecast given the importance of
capex for operating activity as well as the level of
discretionary cash flow (DCF) cushion given the new proposed
ownership and financial policy as a private company. We expect
FOCF to be around EUR100 million-EUR125 million in 2018 and 2019,
which should result in FOCF to debt of 5%-6% and healthy DCF as
we do not expect any dividend distribution."

With the acquisition of Cott's bottling activities, Refresco will
be the world's largest independent bottler, with strong market
positions in consumer markets including Germany, Benelux, France,
Iberia, the U.K., and North America. Private equity owners PAI
Partners SAS and British Columbia Investment Management
Corporation are committed to the group's "buy and build" strategy
and support the group's endeavours to enhance profitability by
driving operating efficiency and penetrating new markets with
innovative product offerings. S&P said, "We expect the group to
record adjusted EBITDA of at least EUR260 million-EUR270 million
in 2017 rising to at least EUR400 million in 2018, including the
full-year contribution from the Cott's business. The successful
integration of this acquisition is vital to the group's strategy
as it seeks to be the preferred bottler and partner for branded
and retailer consumer products. We expect the group to bolster
production volumes in North America with the introduction of new
product sizes and varieties to its customers." This, combined
with the group's proactive purchasing practices, technical
knowledge, and continued investment in modern manufacturing
facilities should support increased productivity and
profitability in the coming years.

Refresco continues to be exposed to volatility in input prices,
including raw materials such as juice concentrate and sugar and
packaging materials including polyethylene terephthalate, liquid
paperboard, and aluminum cans. The group mitigates some of this
exposure with the use of forward purchasing in its procurement
and pass-through mechanisms in its contracts. S&P said, "The
rising trend of branded producers outsourcing the bottling
function supports growth prospects in Refresco's key markets, but
we note that the group does not have any proprietary brands and,
as such, is not able to maximize its margins by employing a
marketing strategy. We also note that the maintenance of an
optimal mix is crucial in preserving profitability across the
group as some products, such as water, generally enjoy lower
margins. Despite the group's increased scale following the Cott's
acquisition, the company's limited pricing power constrains our
current business risk profile assessment at fair."

In its base case, S&P assumes:

-- Revenue increases of 6%-9% in 2017 rising to around 52%-57%
    in 2018, reflecting the full-year contribution from the
    recent Cott acquisition. Organic growth, especially in the
    U.S., supported by product innovation and some inflationary
    price pressures, should also support top-line growth to
    surpass EUR3.5 billion in 2018. We expect the group to
    continue to make small opportunistic bolt-on acquisitions in
    its drive to increase enterprise value but that it will
    prioritize deleveraging in the near-to-medium term.

-- Steady improvement in profitability supported by management's
    cost efficiency and productivity measures helping to maintain
    reported EBITDA margins at around 10% and a reported EBITDA
    base of at least EUR220 million-EUR230 million in 2017,
    rising to about EUR350 million-EUR380 million in 2018 and
    2019.

-- Modest working capital movement reflecting growing sales
    volume as the group penetrates the U.S. market.

-- Capex of about EUR100 million-EUR125 million annually in 2017
    and 2018.

-- Bolt-on acquisitions of up to EUR35 million annually over the
    next two years as management prioritizes deleveraging.

-- No shareholder dividends in 2018 and beyond as a private
    company.

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

-- Adjusted debt to EBITDA of around 6.5x-7.0x in 2018 and 6.0x-
    6.5x in 2019 falling from a post-transaction leverage of
    around 7.7x in 2017.

-- Adjusted EBITDA interest coverage of 3.5x-4.5x in 2018 and
    2019.

-- Adjusted FOCF to debt of 5%-7% in 2018 and 2019.

S&P said, "The stable outlook reflects our expectations that the
newly combined group will benefit from increased sales volumes
and EBITDA base with marginal improvement in profitability from
procurement and operational synergies. We expect the new owners
would continue to prioritize deleveraging with FOCF following the
leveraged buyout and recent acquisition ahead of any other
discretionary spending. We expect that the group's adjusted debt
to EBITDA will be around 6.0x-7.0x and FOCF above EUR100 million
over the next 12-18 months. We also forecast that EBITDA interest
coverage will remain above 3.0x, a level we consider commensurate
with the 'B+' rating.

"We could consider lowering the ratings if the group generated
substantially lower EBITDA than our current estimates such that
the group's deleveraging profile was stagnant and FOCF generation
significantly weakened. This would most likely occur if the group
were to face considerable challenges in the integration of Cott's
bottling activities and the group's innovation and organic growth
plans failed due to competitive pressures. Given this imminent
execution risk, any disruption in Refresco's European bottling
services as result of unexpected higher raw material prices or
tighter margins could significantly weaken leverage metrics and
cash flow generation. We would consider a lower rating if
adjusted EBITDA interest coverage were to fall below 3.0x and
FOCF generation was marginal or neutral after a full-year
contribution from the Cott business. Adjusted debt to EBITDA
would most likely remain around the post-transaction levels in
this scenario.

"An upgrade of Refresco would most likely be the result of
stronger credit ratios on the back of successful integration of
the Cott's business, sustainable like-for-like growth, and
strengthening profitability. Specifically, we could raise the
ratings if we saw a sustainable improvement in the company's
adjusted debt to EBITDA to comfortably below 5.0x on a
sustainable basis, supported by EBITDA interest coverage
comfortably above 3.0x and healthy FOCF generation."


TELEFONICA EUROPE: S&P Rates Proposed Hybrid Notes 'BB+'
--------------------------------------------------------
S&P Global Ratings said that it had assigned its 'BB+' long-term
issue rating to the proposed hybrid notes to be issued by
Telefonica Europe B.V., the Dutch finance subsidiary of Spain-
based telecommunications group Telefonica S.A. (BBB/Stable/A-2),
which will guarantee the notes.

The size of the issue is expected to amount to EUR1 billion. S&P
said, "The group has already issued EUR6.5 billion in hybrids
and, before the deal, we calculated that its ratio of outstanding
hybrids to adjusted capitalization was at the higher end of the
5%-10% range at year-end 2016. We anticipate that even including
the proposed issuance, this ratio will remain well below 15%,
which is the limit for us to view hybrid leverage as having
intermediate equity content.

"We classify the proposed hybrids as having intermediate equity
content until the first reset date, because they meet our
criteria in terms of their subordination, permanence, and
optional deferability during this period.

"Consequently, when we calculate Telefonica S.A.'s adjusted
credit ratios, we will treat 50% of the principal outstanding and
accrued interest under the proposed hybrids as equity rather than
debt, and 50% of the related payments on these securities as
equivalent to a common dividend."

The two-notch difference between S&P's 'BB+' rating on the
proposed hybrid notes and its 'BBB' corporate credit rating (CCR)
on Telefonica S.A. signifies that it has made the following
downward adjustments from the CCR:

-- One notch for the proposed notes' subordination, because our
    long-term CCR on Telefonica S.A. is investment grade; and

-- An additional notch for payment flexibility due to the
    optional deferability of interest.

The notching of the proposed securities takes into account our
view that there is a relatively low likelihood that Telefonica
Europe will defer interest payments. S&P said, "Should our view
change, we may significantly increase the number of downward
notches that we apply to the issue rating. We may lower the issue
rating before we lower the CCR."

KEY FACTORS IN OUR ASSESSMENT OF THE INSTRUMENT'S PERMANENCE

Although the proposed securities are perpetual, Telefonica Europe
can redeem them as of the first call date, which falls more than
five years after issuance, and every year thereafter. If any of
these events occur, the company intends to replace the proposed
instruments, although it is not obliged to do so. In S&P's view,
this statement of intent mitigates the issuer's ability to
repurchase the notes.

The interest to be paid on the proposed securities will increase
by 25 basis points (bps) five years after the first reset date,
and by a further 75bps 20 years after the first reset date. S&P's
view the cumulative 100bps as a moderate step-up, which provides
Telefonica Europe with an incentive to redeem the instruments
after about 25 years.

Consequently, S&P said will no longer recognize the proposed
instrument as having intermediate equity content after the first
reset date, because the remaining period until its economic
maturity would, by then, be less than 20 years.

S&P said, "However, we classify the instrument's equity content
as intermediate until its first reset date, as long as we think
that the loss of the beneficial intermediate equity content
treatment will not cause the issuer to call the instrument at
that point."

KEY FACTORS IN OUR ASSESSMENT OF THE INSTRUMENT'S SUBORDINATION

The proposed securities will be deeply subordinated obligations
of Telefonica Europe, and will have the same seniority as the
hybrids issued in 2013, 2014, and 2016. As such, they will be
subordinated to senior debt instruments, and only senior to
common and preferred shares; S&P understands that the group does
not intend to issue any such preferred shares.

KEY FACTORS IN OUR ASSESSMENT OF THE INSTRUMENT'S DEFERABILITY

In S&P's view, Telefonica Europe's option to defer payment of
interest on the proposed securities is discretionary. It may
therefore choose not to pay accrued interest on an interest
payment date because it has no obligation to do so. However, any
outstanding deferred interest payment would have to be settled in
cash if an equity dividend or interest on equal-ranking
securities is paid, or if common shares or equal-ranking
securities are repurchased.

That said, this condition remains acceptable under our rating
methodology because, once the issuer has settled the deferred
amount, it can choose to defer payment on the next interest
payment date.

The issuer retains the option to defer coupons throughout the
instrument's life. The deferred interest on the proposed
securities is cash cumulative and compounding.


===========
N O R W A Y
===========


NORSKE SKOGINDUSTRIER: S&P Revises CCR to 'D' on Missed Payments
----------------------------------------------------------------
S&P Global Ratings said it has revised its long- and short-term
corporate credit ratings on Norske Skogindustrier ASA (Norske
Skog) and its core rated subsidiaries to 'D' (default) from 'SD'
(selective default) as the issuer has now defaulted on all of its
notes.

S&P said, "At the same time, we lowered our issue rating on the
unsecured notes due in 2033 and issued by Norske Skog Holding AS
to 'D' from 'C'. We also removed the issue ratings from
CreditWatch with negative implications, where we had placed them
on June 6, 2017.

"We also affirmed our 'D' ratings on the senior secured notes due
in 2019, and the unsecured notes due in 2021, 2023, and 2026."

The downgrade follows the nonpayment of the cash coupon due on
Norske Skog's unsecured notes due in 2033 before the expiry of
the grace period on Nov. 15, 2017.

The 'D' ratings on the secured notes due 2019, and the unsecured
notes due in 2021, 2023, 2026, and 2033, reflect the nonpayment
of interest payments beyond any contractual grace periods, which
S&P considers a default.

The corporate credit ratings will remain at 'D' until a
restructuring is agreed. S&P understands that Norske Skog is
reviewing the option for a consensual solution with creditors.
Meanwhile, Aker Capital AS and Oceanwood Capital Management (who
own the EUR100 million NSF securitization facility and the
majority of the EUR290 million senior secured notes due in 2019)
announced their intention to take ownership of Norske Skog's
paper mills in a competitive bidding process. This will take
place once they enforce their share pledges in Norske Skog.


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


* ROMANIA: Over 4,440 Companies Become Insolvent in 1H of 2017
--------------------------------------------------------------
Romania-Insider.com, citing Coface Romania, reports that over
4,440 companies in Romania became insolvent in the first six
months of this year.

The number of companies with a turnover of more than EUR1 million
that went into insolvency during this period increased by almost
20%, to 180, the report says.

Although the number of insolvencies in the first half of 2017 is
at the lowest level in the past 10 years, the creditors' losses
have reached the highest level, Romania-Insider.com relays. The
number of companies using data and information to minimize the
risk of default is still low.

Romania-Insider.com says the main players in the business
information market, Coface Romania, Creditinfo Business
Information, Creditreform Romania, DC Invest Information and
Keysfin, have set up the Association of Business Information
Companies (ACIA) to promote business information through credit
reports. ACIA aims to supply companies access to data from public
sources to mitigate commercial risk. It will also represent the
interests of its members in relation to local and European
authorities.


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


GAZPROMBANK JSC: Fitch Affirms BB+ IDR, Outlook Positive
--------------------------------------------------------
Fitch Ratings has affirmed the Long-Term Foreign- and Local-
Currency Issuer Default Ratings (IDRs) of Sberbank of Russia
(Sberbank), Vnesheconombank (VEB) and their leasing subsidiaries,
Sberbank Leasing and JSC VEB-Leasing, at 'BBB-'. Fitch has also
affirmed the Long-Term IDRs of Gazprombank JSC (GPB), its
subsidiary Gazprombank (Switzerland) Ltd (GPBS), and Russian
Agricultural Bank (RusAg) at 'BB+'. The Outlooks on the IDRs of
all seven entities are Positive.

KEY RATING DRIVERS
IDRS, SUPPORT RATINGS, SUPPORT RATING FLOORS (SRFs)

The affirmation of the Long-Term Foreign Currency IDRs and
Support Rating Floors (SRFs) of Sberbank and VEB at the sovereign
level of 'BBB-', and those of RusAg and GPB at 'BB+', reflects
Fitch's view of a very high propensity of the Russian authorities
to support the banks, in case of need. This is due to:

(i) majority state ownership (100% of VEB and RusAg is
government-owned; 50%+1 share in Sberbank is owned by the Central
Bank of Russia (CBR)), or a high degree of state control and
supervision by quasi-sovereign entities (GPB), most significantly
by the bank's founder and shareholder PJSC Gazprom (BBB-
/Positive);

(ii) the exceptionally high systemic importance of Sberbank, as
expressed by its dominant market shares (approximately 30% of
system loans and 45% of retail deposits at end-3Q17), VEB's
status as a development bank, RusAg's important policy role of
supporting the agricultural sector and GPB's high systemic
importance for the banking sector;

(iii) the track record of capital support to VEB, GPB and RusAg
to date; and

(iv) the high reputational risks of a potential default for the
Russian authorities/state-controlled shareholders.

The Positive Outlooks on all four state-owned banks reflect that
on the sovereign.

The affirmation of VEB's ratings also reflects Fitch's
expectation that the bank will receive sufficient and timely
government support in the near to medium term to address
weaknesses in its solvency and liquidity and enable it to service
its obligations to creditors. VEB expects to receive RUB100
billion of new equity from the government annually in 2018-2020,
which will be enough to reserve reported uncovered problem
exposures (RUB330 billion or 11% of gross loans at end-2016).
VEB's problematic Ukrainian exposure (about RUB0.4 trillion at
end-1H17) was reclassified back to performing as the state fully
guaranteed it in 2016. The guarantee was provided for five years,
but Fitch understands this can be prolonged in case of need.

Foreign wholesale funding at VEB was USD13 billion at end-1H17
with about USD3 billion maturing in 2H17-2018. Fitch believes VEB
will repay most of these upcoming repayments from new government
capital injections, refinancing the remaining part on the local
market and/or using its own liquidity cushion (about USD10
billion equivalent at end-1H17).

The ratings of GPB and RusAg are one notch lower than those of
Sberbank and VEB as the banks do not have the exceptional
systemic importance of the former or the development bank status
of the latter. The notching from the sovereign also reflects (i)
delays in provision of equity support to both banks, and their
potential remaining capital needs; and (ii) that GPB is not
directly majority-owned by the state.

The affirmation of the IDRs of Sberbank-Leasing, VEB Leasing and
GPBS in line with those of their parents reflects Fitch's view
that they are highly-integrated core subsidiaries.

DEBT RATINGS

The senior unsecured debt ratings are aligned with the banks'
IDRs.

The upgrade of GPB's 'new-style' subordinated debt issues is the
result of a reassessment of the risk of non-performance on these
instruments by Russian state-owned/controlled banks. In Fitch's
view, the track record of not imposing losses on these
instruments during the recapitalisation of the banks since 2014
suggests that their non-performance risk is likely to be close to
that of senior debt, as captured by the Long-Term IDRs, rather
than captured by Viability Ratings (VR), which reflect the banks'
standalone strength.

Accordingly, state banks' 'new style' subordinated debt issues
are now notched once from their IDRs, instead of their VRs, in
line with the existing approach for rating 'old style'
subordinated debt issues. The one notch reflects below-average
recovery prospects for all subordinated instruments in case of
default. This has resulted in GPB's 'new style' subordinated
issue being upgraded to 'BB' from 'B+'. Sberbank's new style
subordinated issue is affirmed at 'BB+' as the bank's IDR and VR
are at the same level.

The ratings of debt issued by Sberbank, VEB, RusAg, GPB and their
subsidiaries apply to debt issued prior to 1 August 2014.

VIABILITY RATINGS
SBERBANK

Sberbank's 'bbb-' VR reflects (i) the bank's exceptionally strong
competitive position and pricing power due to dominant market
shares in the Russian banking sector, (ii) the bank's cheap,
stable and granular funding base and thus robust net interest
margin and pre-impairment profitability; and (iii) reasonable
asset quality and capital position.

At end-3Q17 Sberbank's NPLs (non-performing loans; 90 days
overdue) and performing restructured loans equalled a moderate
4.6% and 4.3% of gross loans, respectively. These were 81%
covered by impairment reserves. Fitch believe that downside asset
quality risks for Sberbank are limited and expect its loan
impairment charges to stay around 1.5% of gross loans in the
medium term.

At end-2Q17, of Sberbank's 20 largest corporate borrowers (31% of
net corporate loans, or 1.5x FCC at end-1H17) Fitch identified
only two potentially risky exposures related to oil and gas,
construction and real estate industries totalling RUB0.5 trillion
net of reserves (17% of Fitch Core Capital (FCC)), although risks
are somewhat mitigated by availability of collateral. Other large
corporate loans are of low to moderate credit risks, in Fitch's
view. Retail loan quality is good, reflected by a low 1.2%
annualised NPL origination rate in 9M17.

Sberbank's FCC ratio dropped to 11.0% at end-3Q17 from 12.6% at
end-2Q17 as it switched to Basel III. The expected transition to
IFRS9 in 1Q18 may further reduce the FCC ratio by up to 50bps.
Fitch does not view this decline negatively, as the implied risk-
weighted assets (RWAs) density was very high 110% at end-3Q17 and
Sberbank targets to gradually restore its Core Tier 1 ratio to
12.5% over the medium term, which should be achievable due to
low-single-digit loan growth and healthy profit retention.

Regulatory capitalisation is also reasonable. At 1 November,
Sberbank's prudential Tier 1 capital ratio stood at 11.0% which
is 2.5pts above the statutory minimum, including buffers
applicable from 1 January 2018 (8.525%).

Sberbank's profitability is robust, with about 26% ROAE for 9M17
and Fitch expect it to stay above 20%, absent of major economic
shocks. Sberbank's annualised pre-impairment profit equalled a
high 6.5% of average gross loans in 9M17, above its cost of risk
due to wide margins and reasonable cost efficiency. Fitch do not
expect significant margin pressure for Sberbank in the medium
term as most other banks have higher funding costs, making it
difficult for them to compete with Sberbank on lending rates.

Sberbank's strong funding profile is underpinned by the bank's
dominant 45% share in sector retail deposits and significant 20%
share of on-demand customer funding in liabilities, resulting in
a low average funding cost of about 4.2% in 3Q17 compared with a
6.0% sector average. Sberbank's wholesale contractual funding
repayments in 2018 are negligible (below 1% of total
liabilities). At end-3Q17, Sberbank held a significant cushion of
liquid assets (in both local and foreign currencies) and its
overall liquidity buffer exceeded 24% of total liabilities.

GPB
The affirmation of GPB's VR at 'bb-' reflects the bank's solid
franchise, allowing lending to high profile corporate clients and
attracting stable, albeit concentrated, funding from them.
However, the rating is constrained by heightened risk appetite,
downside asset quality risks mostly stemming from the lumpy
legacy corporate exposures and tight capital position despite the
recent capital injection.

Asset quality is potentially vulnerable. NPLs stood at low 3% of
gross loans at end-2Q17 and were 2x covered by reserves. However,
impaired (but reportedly performing) loans were a high 14% at the
same date and despite a moderate reduction from 20% at end-9M16
remain the main source of risk. The bulk relates to large risky
loans (about RUB200 billion or 50% of loss absorbing capital),
which were recently guaranteed by an entity with a sovereign-
level credit rating, and loans to a distressed metals and mining
company (further 30% of loss absorbing capital). Fitch
understands the above guarantee provides temporary capital
relief, while cash recoveries on the exposures are currently
uncertain. The financial position of the metals and mining
company has somewhat improved due to higher metal prices, but
remains very sensitive to their potential decline.

Additional asset quality risks stems from GPB's large equity
(RUB114 billion net of goodwill) and debt exposures (RUB198
billion) to weakly performing non-banking subsidiaries (together
78% of loss-absorbing capital at end-1H17). Equity exposure
increased by RUB60 billion in 1H17 due to additional investment
in Gazprom Media, which corresponds to the size of the equity
contribution from Gazprom to the bank, undermining its
availability to absorb potential losses in the bank, in Fitch's
view.

Market risk appetite is high due to large investments into
equities (RUB114 billion at end-1H17, or 28% of loss-absorbing
capital), including a 49% equity stake in the subsidiary of the
above-mentioned metals and mining company (6% of loss absorbing-
capital) and a 37% stake in recently founded closed investment
fund Gazprombank-Finansovyi (another 6%), the assets of which
mostly consisted of PJSC Transneft's preference shares. Exposure
to market risk has subsequently increased after the acquisition
of a 19% stake in PJSC Megafon (BB+/Stable) from Telia in October
2017 (further 15% of end-1H17 loss-absorbing capital).

Capitalisation is tight relative to the impaired exposures and
equity holdings. The loss absorbing capital, which includes
RUB166 billion preference shares owned by Russia's Finance
Ministry and Deposit Insurance Agency, was 8.4% of Basel I RWAs
at end-1H17. Fitch Core Capital, which excludes preference
shares, was only 5% of RWAs.

Regulatory capital ratios were moderately above the minimums
including buffers at 1 October 2017: core Tier 1, Tier 1 and
total capital ratios of the banking group were at 8.8%, 9.1% and
13.2%. Absent of big losses GPB should be able to comply with the
higher buffer requirements applicable from 1 January 2018
(7.025%, 8.525%, 10.525%).

Subsequently, GPB is going to raise further RUB21.2 billion from
Gazprom through perpetual subordinated debt, which would increase
the bank's regulatory Tier 1 and total capital ratios by around
40bps.

Liquidity cushion remains sizeable with cash and short-term bank
placements covering 17% of liabilities at end-1H17, while
unpledged debt securities and loans eligible for repo with the
CBR comprised a further 23%. Refinancing risk is small, as
wholesale debt repayments in 2018 were only 2% of end-1H17
liabilities.

RUSAG
The affirmation of RusAg's VR at 'b-' reflects moderate changes
to the bank's credit profile since last review, with weak asset
quality and weak capitalisation still weighing on the rating.
Refinancing risks are moderate.

RusAg has continued provisioning and writing off its problem
loans partly thanks to new capital support from the Russian
government coming in. As a result, NPLs reduced to 16% of gross
loans at end-1H17 from 18% at end-1H16 and NPL coverage by total
loan reserves grew to a moderate 65% from 54%. However, NPL
origination is likely to remain high in the medium term given
still high restructured loans, at 34% and 33%, respectively, and,
more generally, RusAg's commitment to relatively high-risk
agricultural lending.

Fitch estimates that FCC could have notched up to a weak 2% of
Basel II RWAs at end-3Q17 from a historical low of 1% at end-1H17
owing to a RUB25 billion core capital injection in September. In
addition, preferred shares, which Fitch considers high-quality
loss absorbing capital, amounted to 4% of RWAs.

Pre-impairment core profitability improved to a moderate 2% of
average gross loans in 9M17 (annualised) after 1% in 2016 and a
loss in 2015 helping RusAg to meet its high provisioning needs.
Net profitability is likely to remain around break even for the
next several years.

Funding profile benefits from gradual repayment of wholesale
funding and good access to large local funding sources. Eurobond
repayments in 2018 could put some pressure on liquidity ratios
and the bank's funding costs. Fitch estimates RusAg's liquid
assets, net of Eurobonds due until end-2018, at 18% of customer
funding at end-3Q17. Additionally, loans eligible for repo with
the CBR made up 8% of customer funding.

RATING SENSITIVITIES
IDRS, SRs, SRFs

Rating actions on the IDRs of all entities will most likely
mirror those on Russia's sovereign ratings. Additional downside
pressure on VEB's, GPB's and RusAg's support-driven ratings could
emerge in case of weaker support track record to these entities
being insufficient to address capital/asset quality issues. In
this case the notching between their and the sovereign ratings
may be widened.

Although not a base case scenario, the SRFs of all four entities
could be lowered, leading to the downgrade of the IDRs of VEB,
GPB and RusAg, in case of new, more severe sanctions against
Russia, if Fitch takes a view that it results in weaker sovereign
propensity to support foreign creditors of state-owned banks.

A significant weakening of the propensity of parent banks to
provide support (not expected by Fitch at present) to subsidiary
entities could result in downgrades of the subsidiaries' ratings.

DEBT RATINGS

The senior unsecured and subordinated debt ratings would likely
change in tandem with the respective banks' Long-Term IDRs.

VRs
An upgrade of Sberbank's VR could be triggered by a sovereign
upgrade, as Fitch believes that Sberbank's intrinsic credit
strength is close to and correlated with that of the sovereign. A
downgrade of Sberbank's VR could be driven by a sharp
deterioration of the operating environment and Sberbank's asset
quality, although Fitch views this as fairly unlikely at present.

An upgrade of GPB's and RusAg's VRs would require a substantial
improvement in their asset quality, capital adequacy and
performance (the latter particularly for RusAg). Conversely,
these two banks could be downgraded in case of weakening of their
asset quality and capitalisation if this is not promptly offset
by new solvency support from the sovereign.

The rating actions are as follows:

Sberbank of Russia
Long-Term Foreign- and Local-Currency IDRs: affirmed at 'BBB-';
Outlooks Positive
Short-Term Foreign- and Local-Currency IDRs: affirmed at 'F3'
Viability Rating: affirmed at 'bbb-'
Support Rating: affirmed at '2'
Support Rating Floor: affirmed at 'BBB-'

SB Capital S.A.
Senior unsecured debt: affirmed at 'BBB-'
'Old-style and 'New-style' subordinated debt: affirmed at 'BB+'

Vnesheconombank
Long-Term Foreign- and Local-Currency IDRs: affirmed at 'BBB-';
Outlooks Positive
Short-Term Foreign-Currency IDR: affirmed at 'F3'
Support Rating: affirmed at '2'
Support Rating Floor: affirmed at 'BBB-'
Senior unsecured debt: affirmed at 'BBB-'

VEB Finance PLC:
Senior unsecured debt: affirmed at 'BBB-'

Gazprombank JSC:
Long-Term Foreign- and Local-Currency IDRs: affirmed 'BB+';
Outlooks Positive
Short-Term Foreign-Currency IDR: affirmed at 'B'
Viability Rating: affirmed at 'bb-'
Support Rating: affirmed at '3'
Support Rating Floor: affirmed at 'BB+'
Senior unsecured debt: affirmed at 'BB+'

GPB Eurobond Finance PLC:
Senior unsecured debt: affirmed at 'BB+'
'Old-style' subordinated debt: affirmed at 'BB'
'New-style' subordinated debt: upgraded to 'BB' from 'B+'

Russian Agricultural Bank
Long-Term Foreign- and Local-Currency IDRs: affirmed at 'BB+';
Outlooks Positive
Short-Term Foreign-Currency IDR: affirmed at 'B'
Viability Rating: affirmed at 'b-'
Support Rating: affirmed at '3'
Support Rating Floor: affirmed at 'BB+'
Senior unsecured debt: affirmed at 'BB+'

RSHB Capital S.A.:
Senior unsecured debt: affirmed at 'BB+'

Gazprombank (Switzerland) Ltd
Long-Term Foreign-Currency IDR: affirmed at 'BB+'; Outlook
Positive
Short-Term Foreign-Currency IDR: affirmed at 'B'
Support Rating: affirmed at '3'

Sberbank Leasing
Long-Term Foreign- and Local-Currency IDRs: affirmed at 'BBB-';
Outlooks Positive
Short-Term Foreign-Currency IDR: affirmed at 'F3'
Support Rating: affirmed at '2'

JSC VEB-Leasing
Long-Term Foreign- and Local-Currency IDRs: affirmed at 'BBB-';
Outlooks Positive
Short-Term Foreign-Currency IDR: affirmed at 'F3'
Support Rating: affirmed at '2'
Senior unsecured debt: affirmed at 'BBB-'


LSR GROUP: Fitch Affirms B Long-Term IDR, Outlook Stable
--------------------------------------------------------
Fitch Ratings has affirmed the Long-Term Foreign-Currency Issuer
Default Rating (IDR) of OJSC LSR Group at 'B' with a Stable
Outlook. Fitch has also affirmed the senior unsecured rating of
the outstanding bond issues at 'B'/RR4 and assigned the senior
unsecured ratings of 'B'/RR4 to RUB5 billion bond maturing in
September 2021, RUB5 billion bond maturing in April 2022 and RUB5
billion bond maturing in September 2022.

The affirmation reflects Fitch's expectation that LSR's leverage
will remain within the rating sensitivities, despite the large
working capital increase driven by its sizeable investment in the
development of the large housebuilding site (ZIL) in Moscow.

KEY RATING DRIVERS

Interest Rates Drive Mortgage Market
Householders are likely to rely on the mortgage market more
heavily, given the challenging economic environment, which would
support housebuilders. The mortgage market has stabilised
following a gradual decrease in the Central Bank of Russia's
(CBR) key rate, which has allowed Russian banks to reduce
mortgage rates to historical lows below 11%. The volume of
mortgages is still smaller than in 2014, but further cuts to the
CBR's interest rates will support the market.

Prominent Market Position in Russia
LSR is one of the top-three real estate developers in the highly
fragmented Russian residential construction market. The company
is the largest homebuilder for high-end residential real estate,
and is also one of the leading mass-market real-estate companies
in St. Petersburg and Moscow. LSR is also the leading producer of
building materials in Russia, which offsets some of its
construction risk.

Large Housebuilders Preferred
Some housebuilders continue to struggle despite cuts in interest
rates in the mortgage market. This allows larger housebuilders,
such as LSR, to increase market share, because customers as well
as banks and construction companies choose established companies.
Smaller housebuilders tend to be more opportunistic, but this
might hurt their financial profiles and could result in their
bankruptcy. Because of its size, LSR is in a stronger position to
develop more lucrative projects, especially in Moscow, and to
attract more customers who prefer to work with the stable
housebuilders.

Diversified Portfolio
The majority of LSR's real-estate portfolio is located in St.
Petersburg and the surrounding Leningrad region (64% of the net
sellable area and 60% of the market value). With the acquisition
of ZIL and other smaller projects, LSR has become one of the
largest companies in the most lucrative markets including Moscow.
LSR has also increased its share of higher-end "business class"
projects, which provide higher revenue and margins. Fitch views
the further diversification into the Moscow region and higher-end
projects as being credit positive for the company, as Fitch
consider the Moscow market to be the most stable in Russia.

Working Capital Outflow Drives Leverage
Fitch expects LSR's EBITDA and funds from operations (FFO)
margins to remain stable over 2017-2020 and revenues to increase
following the completion of projects. Fitch expects the outflow
of working capital over 2017-2018 to affect LSR, due to the need
to invest in large projects. This could lead to an increase in
the company's FFO leverage to above 4.0x, the level of Fitch
negative rating guideline in 2017-2019 from 3.5x at end-2016. By
end-2020, Fitch expect the company to reduce the FFO leverage to
3.4x as a result of working capital reversal.

Moscow Renovation Might Pressure Ratings
A comprehensive urban renovation project in Moscow would, if it
goes as planned, create a massive oversupply of housing in the
region and could force most of the housebuilders to quit the
Moscow market in the long-term. The Moscow and the Federal
Government have announced the start of the renovation project
aims to replace around 25 million square meters of buildings with
new housing for sale on the open market, with the total cost of
the programme to be around RUB3.5 trillion.

Operating Environment Discount
Fitch applies a one-notch discount to account for the company's
exposure to the Russian operating environment from the standalone
rating level of the company of 'B+'.

DERIVATION SUMMARY
LSR is one of the leading Russian housebuilders focused on the
most lucrative areas - St. Petersburg and Moscow - with a large
portfolio of projects. The company compares well with other
Russian housebuilders in terms of scale, geographical
diversification and financial profile. Within the EMEA region,
operating and regulatory environments vary significantly, making
comparisons hard. Fitch views French housebuilder Kaufman & Broad
as a 'BB' credit because the favourable VEFA framework and land
option system does not fully offset its high leverage position.
UK housebuilder Taylor Wimpey (BBB-/Stable), operates in a more
stable environment and has a GBP450 million net cash position.
Fitch view the ratings of LSR to be constrained by the cyclical
and capital-intensive nature of the housebuilding industry; high
execution risk should the company develop too many projects
simultaneously; a lack of medium-term certainty over project
development; and higher-than-average risks associated with the
Russian business environment and jurisdiction.

KEY ASSUMPTIONS

Fitch's key assumptions within Fitch rating case for the issuer
include:
- Double-digit revenue growth in 2017-2018
- Stable margins
- Large working capital outflow over 2017-2018 followed by a
reversal of working capital in 2019-2020

RATING SENSITIVITIES

Future Developments That May, Individually or Collectively, Lead
to Positive Rating Action
- Sustainable improvement in the financial metrics leading to
EBIT margin above 15%.
- FFO-adjusted gross leverage below 3x for a sustained period.
- Positive FCF generation on a sustained basis.

Future Developments That May, Individually or Collectively, Lead
to Negative Rating Action
- Market deterioration leading to EBIT margin below 10% and/or
worsened liquidity.
- FFO-adjusted gross leverage sustainably above 4x.

LIQUIDITY

Satisfactory Liquidity Position: LSR's short-term debt as of 1H17
was RUB7.4 billion, while the company's cash position stood at
RUB28 billion. This, coupled with available undrawn credit
facilities from the major Russian banks should be sufficient to
cover immediate liquidity requirements. The company does not pay
commitment fees for the undrawn credit facilities, which is a
common practice in Russia. The company is not exposed to FX risk,
as all of the debt is raised in roubles.

Full List of Rating Actions
- Long-Term Foreign-Currency IDR affirmed at 'B'; Outlook Stable
- Local-currency senior unsecured rating affirmed at 'B',
   Recovery Rating 'RR4'
- Local currency senior unsecured rating assigned at 'B',
Recovery Rating 'RR4' to RUB5 billion bond maturing in September
2021, RUB5 billion bond maturing in April 2022 and RUB5 billion
bond maturing in September 2022.


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


DARWIN AIRLINE: Files for Insolvency, To Restructure as ACMI
------------------------------------------------------------
CAPA - Centre for Aviation reports that Darwin Airline (Adria
Airways Switzerland) filed for insolvency on Nov. 27, 2017.  The
carrier said after commencing a "promising restructuring process
under new ownership", it "encountered several unfavorable market
impacts".

CAPA relates that Darwin Airline stated it has "been challenged
with the termination of all business contracts by Alitalia",
while the unexpected insolvency of airberlin "lead to significant
negative impacts such as bad debt, loss of existing business and
future business opportunities".

According to CAPA, Darwin Airline "has developed a solution in
order to save as many work positions as possible", including:

* continue to operate under the existing AOC "for the time
   being";

* move to become a crew service provider (ACMI operator); and

* offer maintenance for own aircraft and third parties.

CAPA relates that Darwin said the new organisational structure
will require between 100 and 120 employees.

Darwin Airline is regional carrier based in Lugano, Switzerland.


GATEGROUP HOLDING: S&P Cuts CCR to 'B', Outlook Stable
------------------------------------------------------
S&P Global Ratings lowered to 'B' from 'B+' its long-term
corporate credit rating on Switzerland-based airline solutions
provider gategroup Holding AG. The outlook is stable.

S&P said, "The downgrade follows our revision of HNA Group's GCP
to 'b' from 'b+'. HNA Group is the controlling owner of gategroup
and we apply our group rating methodology. We consider gategroup
to be a moderately strategic subsidiary of the HNA Group because
it provides backward integration to its airline businesses and
complements its other at-airport services subsidiaries. Our
ratings on gategroup are therefore affected by our view of HNA
Group's aggressive acquisition policy, tolerance for high
leverage, and tightening liquidity burdened by significant debt
maturities over the next several years. While HNA Group continues
to access the capital markets, its funding costs appear to be
meaningfully higher than a year ago. We are closely monitoring
HNA Group's access to, and cost of, external sources of funding
to determine whether a further reassessment of its GCP is
necessary. Under our group rating methodology, we generally do
not rate a subsidiary higher than the GCP, even if the SACP of
the subsidiary is higher than the GCP. This is mainly because we
believe the weaker parent could divert assets from its subsidiary
or burden it with liabilities during periods of financial stress.
In addition, the subsidiary's flexibility with regard to raising
debt and capital could also be significantly reduced.

"That said, we have also revised gategroup's SACP upward to 'bb'
from 'bb-' because we have gained more visibility on the
company's financial policy and credit ratios after the
acquisition of HNA. The lack of clarity had previously
constrained the SACP. The business risk profile remains unchanged
and reflects the company's strong market position in airline
catering, but also its exposure to the cyclical and competitive
airline industry.

"Under our base-case scenario we expect that, with the
acquisition of Servair, gategroup will enhance its geographic
diversity in emerging markets, such as Africa where growth and
margins are generally higher than in mature markets. We forecast
that funds from operations (FFO) to debt will be close to 20% at
year-end 2017 (compared to 17% in 2016 and 13% in 2015) and
improve thereafter. The improvement stems from enhanced
operational performance driven by cost-saving initiatives,
synergies, and reduced interest costs. HNA is currently
evaluating the idea of undertaking a re-IPO of gategroup shares
on the Swiss Stock Exchange. The structure and timing of any
offering and listing are yet to be determined, so we do not
currently factor this into our rating."

S&P's base-case scenario includes:

-- Revenue growth of 30%-35% in 2017, mainly due to the full-
    year impact of the recent acquisitions (mainly Servair). In
    2018-2019, we assume organic growth of more than 2%, mainly
    linked to our weighted-average GDP growth forecast for each
    country where the company generates its revenue.

-- Reported EBITDA margin to improve to about 6% in 2017 and
    2018 (from 4.3% in 2016) on the back of direct cost savings,
    synergies from IFS and Servair, and stricter contract renewal
    process.

-- Capital expenditure (capex) of about Swiss franc (CHF) 140
    million in 2017 and CHF160 million in 2018.

-- No major acquisitions.

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

-- Adjusted FFO to debt of close to 20% in 2017 (from 17% in
    2016), improving to about 23% in 2018.

-- Adjusted debt to EBITDA of about 3.4x in 2017, improving to
    about 3.1x in 2018.

S&P said, "We assess gategroup's liquidity as strong, reflecting
our view that the company's liquidity sources will exceed uses by
more than 1.5x for the next 12 months and above 1x for the
subsequent 12 months. As of Sept. 30, 2017, gategroup had a large
cash position and ample availability under its committed credit
facility relative to its debt maturity profile. We understand
that the company had significant leeway under the facilities'
financial covenants and no material debt maturities until 2020."

S&P forecasts total sources of liquidity for the 12 months to
Sept. 30, 2018 to include:

-- Unrestricted cash and cash equivalents of about CHF125
    million;

-- Unadjusted FFO of about CHF190 million; and

-- Availability of about CHF160 million under a EUR350 million
    five-year multicurrency revolving credit facility.

S&P forecasts the following uses of liquidity over the same
period:

-- Short-term debt of about CHF10 million;

-- Capex of about CHF150 million;

-- Working capital outflow of about CHF10 million during the
    year; and

-- Dividend payments of about CHF20 million-CHF25 million to the
    minority shareholder of consolidated joint ventures.

S&P said, "The stable outlook reflects our expectation that HNA
Group's GCP will remain unchanged in the next 12 months.

"Our rating on gategroup is currently capped at HNA Group's GCP
of 'b'. Any downgrade is, therefore, likely to be based on
changes to the credit quality of HNA Group, rather than on
gategroup. In our view, gategroup has stronger credit metrics, on
a stand-alone basis, than its parent. Based on gategroup's
current debt levels, the company has significant headroom for
operational underperformance before the 'B' rating would be
affected.

"We could raise the rating on gategroup if HNA Group materially
reduced its financial leverage and stabilized its liquidity
position. Furthermore, we could upgrade gategroup if we reassess
our view of its group status within HNA."


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


E20 STADIUM: London Assembly Demands to See 2016/2017 Accounts
--------------------------------------------------------------
Daily Mal Online reports that London Assembly members have
demanded to see the financial accounts of the company that owns
West Ham's London Stadium home amid concerns it is heading
towards insolvency.

The centrepiece of the 2012 Olympic and Paralympic Games is owned
by E20 Stadium LLP, a joint venture between the London Legacy
Development Corporation (LLDC) and Newham Council, according to
the report.

Despite having West Ham as an anchor tenant, the GBP752 million
stadium has been dogged by financial concerns as the price tag
for converting it from an athletics venue to a football ground,
and vice-versa, has repeatedly surpassed estimates, Daily Mail
states.

This has led the assembly's budget and performance committee to
take the rare step of issuing a summons notice for E20's 2016/17
accounts, says Daily Mail.

"This company spends vast amounts of public money and we know it
is in financial difficulty.  But we have been prevented from
seeing the accounts of E20 Stadium LLP. Why?" the report quotes
committee's chairman Gareth Bacon as saying in a statement.

"The assembly needs this information immediately so we can assess
whether (London Mayor Sadiq Khan) is making the right decisions
when it comes to the London Stadium and Olympic legacy.

"The assembly needs to do its job of scrutinising the issues that
matter to London, unhindered."

Daily Mail relates that Mayor Khan announced a review into the
Stratford venue last November and is scheduled to receive a much-
delayed report on the matter from accountancy firm Moore Stephens
by the end of this month. It is hoped that this report will be
published before the end of the year.

However, assembly members, whose job it is to hold the mayor to
account, are clearly losing patience and E20 now has two weeks to
hand over its most recent set of annual accounts, adds Daily
Mail.


FEATHER & BLACK: Goes Into Administration, 123 Jobs at Risk
-----------------------------------------------------------
Ashley Armstrong at The Telegraph reports that furniture retailer
Feather & Black has toppled into administration.

Duff & Phelps has been appointed as administrators to Feather &
Black, putting 123 jobs at risk, The Telegraph relates.

Charles Wade, whose family has worked in furnishing for three
generations, bought Feather & Black, which has 25 shops, out of
administration in 2005, The Telegraph recounts.

Duff & Phelps will continue to trade Feather & Black in
administration while looking for a buyer, The Telegraph notes.

"Many retailers have been hit by the slowdown in consumer
spending", The Telegraph quotes Allan Graham, joint
administrator, as saying.  "With inflation rising faster than
wages, consumers are beginning to feel the pinch and have cut
back on their household budgets.  As a result of these tough
trading conditions, Feather & Black could no longer meet on-going
liabilities."


HOTCHA: Enters Administration, 145 Jobs Affected
------------------------------------------------
Danielle Hoe at LincolnshireLive, reports that Hotcha, a Lincoln
Chinese takeaway which closed suddenly, will not be reopening.

Hotcha on Lincoln's High Street only opened at the start of July
this year, but customers found it had suddenly closed in October
-- leaving hungry customers without the food they ordered online,
LincolnshireLive recounts.

And now, it has been revealed the restaurant at the old George &
Dragon building, is not going to open after the company has gone
into administration, LincolnshireLive relates.

The Bristol Post reported that Hotcha branches in Bristol and
South Gloucestershire were the subject of "dawn raids" by tax
investigators over a suspected GBP35 million money laundering
operation at the beginning of October, LincolnshireLive notes.

Simon Thomas -- sthomas@moorfieldscr.com -- and Arron Kendall --
akendall@moorfieldscr.com -- of Moorfields, Wood Street, London
have been appointed as joint administrators, LincolnshireLive
relays.

According to LincolnshireLive, 145 members of staff had been made
redundant as a result of the company's decision to cease trading.


MARSTON'S ISSUER: S&P Lowers Rating on Class B Notes to BB (sf)
---------------------------------------------------------------
S&P Global Ratings has lowered its credit ratings on the notes
issued by Marston's Issuer PLC (Marston's Issuer).

Marston's Issuer is a corporate securitization backed by
operating cash flows generated by the borrower, Marston's Pub
Ltd., which is the primary source of repayment for an underlying
issuer-borrower secured loan. Marston's Pub operates an estate of
tenanted and managed pubs. The original transaction closed in
August 2005, and was tapped in November 2007.

Upon publishing S&P's revised criteria for rating corporate
securitizations, it placed those ratings that could be affected
under criteria observation. Following its review of this
transaction, the ratings are no longer under criteria
observation.

BUSINESS RISK PROFILE AND RECENT PERFORMANCE

S&P said, "We have applied our corporate securitization criteria
as part of our rating analysis on the notes in this transaction.
As part of our analysis, we assess whether the operating cash
flows generated by the borrower are sufficient to make the
payments required under the notes' loan agreements by using a
debt service coverage ratio (DSCR) analysis under a base case and
a downside scenario. Our view of the borrowing group's potential
to generate cash flows is informed by our base-case operating
cash flow projection and our assessment of its business risk
profile, which is derived using our corporate methodology."

The public house (pub) sector accounts for a quarter of the GBP88
billion eating and drinking out market in the U.K. With the long-
term trend of slowly declining alcohol consumption, pub operators
have been adjusting their portfolio through regular pub
disposals. This is evidenced by the estimated 47,000 pubs and
bars competing in the segment today in comparison to a crowded
57,500 in 2007. This represents an average annual decline of
almost 2%. The major pub operators are Greene King, Mitchells &
Butlers, Ei (previously known as Enterprise Inns), and Punch
Taverns.

As of April 2017, Marston's Pub's estate comprised 1,170 pubs
(891 leased and tenanted, and 279 managed) and represented about
75% of the total pub estate of its parent company, Marston's PLC,
and 56% of its EBITDA. Among those U.K. pub operators that we
rate, it is the smallest by EBITDA, after Mitchells & Butlers
Finance PLC, and the second smallest by number of pubs, about 16%
larger than Spirit Pub Co. (managed and leased).

Marston's Pub is smaller than its peers that have fair business
risk profiles; it has only GBP114.6 million in adjusted EBITDA
within the securitized estate, compared to GBP204.2 million for
Spirit Pub and GBP136.0 million for Unique Pub Properties.
Additionally, Marston's Pub has a higher proportion of tenanted
pubs, leading to lower overall EBITDA per pub as compared to its
peers.

OPERATING PERFORMANCE UPDATE

On Oct. 10, 2017, Marston's PLC (1,565 pubs), reported that its
destination and premium segment's like-for-like sales were 0.9%
ahead of 2016's (which were in turn 2.3% ahead of 2015's), with
stronger wet growth compared to food sales growth. Its Taverns
segment, which is generally wet-led, posted like-for-like sales
growth of 1.6% (2.7% in 2016), including the franchised estate;
over the next one to two years, the company expects most Taverns
will operate under a franchise model. Lastly, their Leased
segment reported like-for-like sales growth of 1.0% (2.0% in
2016), while Brewing reported own-brand volumes growth of 6.0%
(2.0% in 2016).

As the number of securitization pubs is heavily weighted toward
tenanted and leased (76.2% by count), the EBITDA contribution
between its managed pubs and its tenanted and leased pubs is more
evenly split, with the former contributing 48.8% of the Marston's
Pub's (the borrower) EBITDA given its relatively higher revenue
and EBITDA base. The remaining 51.2% of the securitization's
EBITDA is derived from the leased and tenanted segment. S&P said,
"While the leased and tenanted pub segment is subject to the
market-rent-only option under the Statutory Pub Code, we see a
limited impact on the pub sector as we believe pub operators
would attempt to compensate for a loss in drinks and food sales
with an increase in rental income."

Marston's Pub estate comprises well-established pub brands such
as Rotisserie, Carvery, Pitcher & Piano, and Revere.
Nevertheless, the securitization also has no geographic
diversification outside the U.K. S&P said, "We expect that the
rising National Living Wage and increasing drinks and food costs
due to the weak British pound sterling could weigh on the EBITDA
margin, particularly on the managed pub segment, which has direct
exposure to cost inflation. In addition, this could indirectly
affect the profitability of leased and tenanted pubs if publicans
struggle to pass on the cost increases to consumers, bringing
about the risk of higher business failure rates. These factors
support our assessment of the business risk profile as fair."

RATING RATIONALE

Marston's Issuer's primary sources of funds for principal and
interest payments on the outstanding notes are the loan interest
and principal payments from the borrower, which are ultimately
backed by future cash flows generated by the operating assets.

S&P's ratings address the timely payment of interest, excluding
any subordinated step-up coupons, and principal due on the notes.

A tranched liquidity facility is also available at the issuer
level and is sized to cover 18 months of peak debt service.

DSCR ANALYSIS

S&P said, "Our cash flow analysis serves to both assess whether
cash flows will be sufficient to service debt through the
transaction's life and to project minimum DSCRs in base-case and
downside scenarios."

Base-case scenario

S&P said, "Our base-case EBITDA and operating cash flow
projections for FY2018 and the company's fair business risk
profile rely on our corporate methodology, based on which we give
credit to growth through the end of FY2018. Beyond FY2018, our
base-case projections are based on our "Global Methodology And
Assumptions For Corporate Securitizations," from which we then
apply assumptions for capital expenditures (capex) and taxes to
arrive at our projections for the cash flow available for debt
service."

For Marston's Pub, S&P's assumptions were:

-- Maintenance capex: GBP15.7 million for FY2018 and thereafter,
    which is above the transaction documents' minimum
    requirement.

-- Development capex: GBP17.1 million for FY2018. Thereafter, as
    S&P's assume no growth and in line with its corporate
    securitization criteria, S&P considers no investment capex.

-- Tax: Due to the tax shield created by the debt service at
    Marston's Pub, S&P does not assume any taxes will be due.

S&P established an anchor of 'bb-' for the class A notes and an
anchor of 'b' for the class B notes based on:

-- S&P's assessment of Marston's Pub's fair business risk
    profile, which S&P associates with a business volatility
    score of '4'; and

-- The minimum DSCR achieved in S&P' base-case analysis, which
    considers only operating-level cash flows but does not give
    credit to issuer-level structural features (such as the
    tranched liquidity facility).

The notes are fully amortizing, with the amortization schedule of
the class B notes occurring from July 2032, after the repayment
of the class A notes, to July 2035.

Downside Scenario

S&P said, "Our downside DSCR analysis tests whether the issuer-
level structural enhancements improve the transaction's
resilience under a stress scenario. Marston's Pub falls within
the pubs, restaurants, and retail industry. Considering U.K.
pubs' historical performance during the financial crisis, in our
view 25% and 15% declines in EBITDA from our base case are
appropriate for the tenanted and managed pub subsectors,
respectively.

"Our downside DSCR analysis resulted in a strong resilience score
for the class A notes and a fair resilience score for the class B
notes.

The combination of a strong resilience score and the 'bb-' anchor
derived in the base-case results in a resilience-adjusted anchor
of 'bb+' for the class A notes. Similarly, the combination of a
fair resilience score and the 'bb' anchor derived in the base-
case results in resilience-adjusted anchors of 'bb' for the class
B notes.

Lastly, the issuer's GBP120 million liquidity facility balance
represents a significant level of liquidity support, measured as
a percentage of the current outstanding balance of the class A
notes. Given that the full two notches above the anchor have been
achieved in the resilience-adjusted anchor of the class A notes,
we consider a one-notch increase to their resilience-adjusted
anchor warranted.

Finally, in spite of their apportioned liquidity support from the
issuer's liquidity facility, GBP17 million of which is available
to the class B notes, being marginally above 10%, measured as a
percentage of the current outstanding balance of the class B
notes, and their resilience-adjusted anchor being two notches
above their anchor, S&P did not grant an additional notch to the
junior class B notes. In a severe cash flow disruption scenario,
we believe that their liquidity support could be partly utilized
by the issuer to service the class A notes. Considering this
factor, S&P deemed that the margin of safety above its 10%
threshold was not sufficient.

Modifiers Analysis

S&P's modifiers analysis did not lead to any specific adjustment.

Comparable Rating Analysis

S&P's comparable rating analysis did not lead to any specific
adjustment.

OUTLOOK

S&P said, "A change in our assessment of the company's business
risk profile would likely lead to rating actions on the notes. We
would require higher/lower DSCRs for a weaker/stronger business
risk profile to achieve the same anchors."

UPSIDE SCENARIO

S&P said, "We do not currently see a scenario that would lead us
to raising our assessment of Marston's Pub's business risk
profile.

"We may consider raising our ratings on the notes if our minimum
projected DSCR goes above 1.5:1 for the class A notes, and 1.2:1
for the class B notes in our base-case scenario."

DOWNSIDE SCENARIO

S&P said, "We could also lower our ratings on the notes if we
were to lower the business risk profile to fair from weak. This
could occur if cost headwinds result in a sharp decline in
reported EBITDA or margin.

"We may also consider lowering our ratings on the notes if our
minimum projected DSCRs fall below 1.3:1 for the class A notes
and 1.1:1 for the class B notes in our base-case scenario."

SURVEILLANCE

S&P said, "We currently do not expect bond cash flow disruptions
or rating implications from the potential phase out of LIBOR and
similar IBOR benchmarks after 2021. However, as new proposed
benchmarks emerge, we will need to consider whether they meet our
criteria (see "With A LIBOR Phase-Out Likely After 2021, How Will
Structured Finance Ratings Be Affected?," published on Oct. 19,
2017)."

RATINGS LIST

Marston's Issuer PLC
GBP1.135 Billion Asset-Backed Fixed- And Floating-Rate Notes

  Class                 Rating
                 To                From

  Ratings Lowered

  A1             BBB- (sf)         BBB+ (sf)
  A2             BBB- (sf)         BBB+ (sf)
  A3             BBB- (sf)         BBB+ (sf)
  A4             BBB- (sf)         BBB+ (sf)
  B              BB (sf)           BBB (sf)


STANLEY GIBBONS: Guernsey Unit Placed Into Administration
---------------------------------------------------------
ITV News reports that the stamp collecting firm Stanley Gibbons
in Guernsey has been placed into administration and has ceased
trading with immediate effect.

The rest of Stanley Gibbons Group will continue to trade as
normal, ITV News notes.

According to ITV News, the administrators will take control of
the stock and will let investors know about the options available
to them.  The four employees at Stanley Gibbons in Guernsey will
continue to the employed by the company, ITV News states.

Administrator Nick Vermeulen said the decision had been taken
after the Guernsey company had been facing increasing
difficulties, ITV News relates.

"Stanley Gibbons (Guernsey) Limited has faced a challenging
trading environment and has insufficient cash resources to
continue to trade.  The directors have therefore decided to
appoint administrators to preserve value and to deal with the
interests of investors and creditors in an equitable manner,"
ITV News quotes Mr. Vermeulen as saying.

The firm is well-known for trading in stamps, autographs and
other collectibles, as well as auctioneering.


STONEPEAK SPEAR: Moody's Assigns B2 CFR, Outlook Stable
-------------------------------------------------------
Moody's Investors Service has assigned a first-time B2 corporate
family rating (CFR) and a B2-PD probability of default rating
(PDR) to Stonepeak Spear Newco (UK) Ltd ("Stonepeak Newco"), an
affiliate of Stonepeak Infrastructure Partners ("Stonepeak") and
whose primary operating subsidiary will be euNetworks Holdings
Limited (UK) ("euNetworks" or "the company") following the
completion of its proposed acquisition by Stonepeak Newco.

This transaction, announced on November 6, 2017, is subject to
customary regulatory approvals and is expected to close in the
coming months. Concurrently, Moody's has also assigned a B2
rating to the company's proposed EUR300 million senior secured
Term Loan B due 2024. The proceeds from the term loan will be
used to fund a portion of the acquisition of euNetworks by
Stonepeak.

"The B2 ratings reflect euNetworks' stable contracted recurring
revenue base, good revenue growth, high margins and niche yet
leading position in the European data center connectivity
market," says Alejandro N£§ez, a Moody's Vice President - Senior
Analyst and lead analyst for euNetworks. "The ratings are
constrained by the company's relatively small scale, moderately
high leverage and negative free cash flow resulting from a high
level of discretionary growth capex."

RATINGS RATIONALE

The B2 CFR reflect euNetworks': (1) Good revenue growth and high
margins supported by structurally favorable secular trends such
as rising demand for data, bandwidth and cloud services; (2)
Leading positions in key European data center connectivity and
fiber bandwidth services markets; (3) Stable recurring revenue
base, with low churn from a diversified customer base, and long
contract terms; (4) Fixed asset and equity value in the company's
network assets; and (5) Significant equity contribution and
potential for additional growth funding from its financial
sponsor.

These factors are offset by the company's: (1) Small scale (as
measured by revenues) and niche market position in a fragmented
market; (2) High leverage of 5.4x (Moody's-adjusted, pro-forma at
the transaction's closing) declining modestly toward 5x in 2018;
(3) High discretionary capex resulting in negative free cash flow
through at least year-end 2019; and (4) Event risk, in the form
of M&A, as the company pursues its growth objectives.

Pro-forma for the transaction, FY2017 leverage (Moody's-adjusted)
is estimated to be 5.4x and Moody's expects leverage to decline
toward 5x by end-2018 under the assumption that euNetworks will
incur a modest amount of additional debt to fund its growth
investments while EBITDA gradually rises. Over the 2017-2019
period, Moody's expects organic revenue growth of around 8% and
reported normalized EBITDA margins in the 40% area, supported by
the company's focus on higher margin products, increasing scale
and operating leverage.

Moody's notes the supportive financial backing provided by
Stonepeak, the new sponsor owner, demonstrated by its high
proportion of new equity in addition to rolled equity from
euNetworks' existing investors. In addition, Stonepeak has also
stated its intention to provide euNetworks with additional growth
capital of up to $500 million for the purposes of euNetworks'
organic and inorganic development.

Moody's expects euNetworks to maintain adequate liquidity
supported by EUR10 million of cash on balance sheet (as of the
transaction's closing) and full availability under its six-year
EUR75 million Revolving Credit Facility (RCF). In 2018-2019,
Moody's expects the company to make use of its RCF given its
anticipated negative free cash flow generation due to high growth
capex. Following the completion of Stonepeak's acquisition of
euNetworks and its associated seven-year term loan financing,
euNetworks will have no material financial debt maturities prior
to the end of 2024 and the covenants governing euNetworks'
secured debt offer a good cushion relative to the most recent
financial results.

The capital structure is covenant-lite as it is protected by only
one financial springing covenant, a secured net leverage ratio
test set at a level providing 35% headroom from post-transaction
secured net leverage (approximately 5.0x). The B2 rating on the
EUR300 million senior secured Term Loan B is in line with the CFR
given that it comprises the highest proportion of debt in the
capital structure.

RATIONALE FOR STABLE OUTLOOK

The stable outlook reflects the company's predictable revenue
streams underpinned by long-term contracts as well as the
positive underlying drivers for fiber services demand. The
company is initially weakly positioned in the rating category,
but Moody's expects euNetworks will progressively reduce leverage
towards 5.0x supported by EBITDA growth while free cash flow will
remain marginally negative over the next two years.

WHAT COULD CHANGE THE RATING UP/DOWN

Upward pressure on the ratings could develop if: (1) euNetworks'
leverage (measured as Moody's-adjusted Gross debt/EBITDA)
decreases below 4.25x on a sustained basis; and, (2) the
company's Moody's-adjusted Free Cash Flow (FCF)/Gross debt
approaches 10%.

Conversely, downward pressure on the rating could develop if: (1)
euNetworks' leverage (measured as Moody's-adjusted gross
debt/EBITDA) exceeds 5.25x on a sustained basis; and (2) the
company sustains a materially negative free cash flow position;
or (3) if liquidity were to deteriorate materially. Downward
rating pressure could also arise should the company engage in
debt-financed transformational M&A resulting in a material
dilution of its high EBITDA margin or a weaker business profile.

LIST OF AFFECTED RATINGS

Issuer: Stonepeak Spear Newco (UK) Ltd

Assignments:

-- Corporate Family Rating, Assigned B2

-- Probability of Default Rating, Assigned B2-PD

Outlook Actions:

-- Outlook, Assigned Stable

Issuer: euNetworks Holdings Limited (UK)

Assignments:

-- Senior Secured 1st Lien Bank Credit Facilities, Assigned B2

Outlook Actions:

-- Outlook, Assigned Stable

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was
Communications Infrastructure Industry published in September
2017.

Based in London (UK), euNetworks is a facilities-based bandwidth
infrastructure provider, delivering scalable, fiber based network
solutions to its customers across Europe. The company owns and
operates 1,900 kilometers of fiber in fourteen European
Metropolitan Area Networks in addition to around 18,500
kilometers of low-latency long-haul fiber. The network connects
over 300 data centers and 13 connected cloud platforms spanning
49 cities in 14 European countries. In its fiscal year ended
December 31, 2016, euNetworks generated EUR126.9 million in
revenues and EUR43.6 million in normalized EBITDA.


STONEPEAK SPEAR: S&P Assigns Prelim 'B' CCR, Outlook Stable
-----------------------------------------------------------
S&P Global Ratings assigned its preliminary 'B' long-term
corporate credit rating to U.K.-based fiber infrastructure
services provider, Stonepeak Spear Newco (UK) Ltd. and its
financing subsidiary euNetworks Holdings Ltd. (together,
euNetworks). The outlook is stable.

S&P said, "At the same time, we assigned our 'B' preliminary
issue rating to the proposed EUR300 million senior secured term
loan B that will be borrowed by Stonepeak Spear UK Newco and
subsequently pushed down to euNetworks Holdings Ltd. The
preliminary recovery rating on the loan is '3', indicating our
expectations of meaningful recovery (50%-70%; rounded estimate:
55%) in the event of a payment default.

"The preliminary ratings are subject to the completion of the
acquisition of euNetworks by Stonepeak Infrastructure Partners as
presented to us, the successful issue of the proposed facilities,
the repayment of existing debt, and our satisfactory review of
the final documentation. Accordingly, the preliminary ratings
should not be construed as evidence of final ratings. If S&P
Global Ratings does not receive the final documentation within a
reasonable time frame, or if the final documentation departs from
the materials we have already reviewed, we reserve the right to
withdraw or revise our ratings. Potential changes include, but
are not limited to, the use of proceeds, interest rate, maturity,
size, financial and other covenants, and the security and ranking
of the senior secured term loan and revolving credit facility.

"In our analysis, we factor in euNetworks' reported negative free
operating cash flow (FOCF), owing to the group's significant
upfront investment to deploy its fiber network and coverage, as a
rating constraint. The negative FOCF is partly offset by
temporarily high debt to EBITDA in 2017, adjusting for the
envisaged leveraged buyout, that should decline subsequently on
continued EBITDA growth. In our rating, we also incorporate our
view of euNetworks' good, albeit niche, positioning in the fast-
growing datacenter connectivity segment, its small size, and its
largely fixed-cost base, offset somewhat by the group's
competitive network and longstanding relationship with its
demanding and quality-oriented customers."

A London-based, pan-European provider of low-latency and high-
bandwidth infrastructure services, euNetworks focuses on
providing high bandwidth solutions to clients in the financial
services, communications, content, and media spaces through its
network of about 1,900 kilometers (km) of metro-fiber and almost
19,000 km of long-haul fiber. The group derives approximately 80%
of its revenues from high-margin focus products, including
wavelengths, dark fiber, and to a lesser extent Ethernet.
Colocation and Internet services generate most of the remaining
20%.

S&P's view of euNetworks' business is supported by the group's
strategic focus and leading position in the fast growing European
datacenter connectivity market, working with data-hungry large
enterprises, carriers, and content/cloud providers. The group has
a competitive network of both metro- and long-haul fiber routes
that connect more than 300 datacenters in Europe, of which 92 are
among the identified 102 main European datacenters. While the
capillarity of its network, as measured by total kilometers
covered, is not as broad as other competitors, euNetworks' routes
leverage strategic locations and are characterized by a wider
number of fibers per ducts that support large data and bandwidth
transport capacity. Consequently, the group generates higher
average revenues per route than peers and grows at above-market
rates. Operations are fairly diversified by customer--with the
top-15 customers generating less than 30% of annual revenues--and
by region as the group expands in Europe. euNetworks' business
model provides recurring revenues and a large contractual revenue
backlog, thanks to multiyear contracts. This model translates
into healthy profit margins, which are improving as revenues grow
and further cover the fixed-cost base. Lastly, the group does not
engage in speculative network developments. Rather, it focuses on
growth from new customer contracts, although there is a lag
between its upfront investment and its income profile, given that
it focuses its business model on monthly recurring revenues.

These strengths are partly offset by euNetworks being a niche
player, with single-digit overall market share. Moreover, it
faces competition from larger and better capitalized companies
that could upgrade and diversify their existing networks over
time. We also see a risk that current customers might move their
networks inhouse. The group's small size is a rating constraint.
It generated about EUR125 million of revenues and almost EUR60
million of S&P Global Ratings-adjusted EBITDA in 2016. Loss of a
key customer could materially change the group's revenue and
profitability patterns, but S&P has not seen this happen to date.
What's more, in line with the rest of the industry, euNetworks
faces pressure on prices of data transport, although we
understand this only happens at contract renewal and is usually
offset by volume growth due to higher data traffic. Lastly, we
think the group's contract length is on average shorter than some
of its rated peers' offering similar solutions, partly as a
result of its euTrade ultra low-latency business, which carries
shorter contract lengths. Although we acknowledge that its
contract renewal rate is high, euNetworks' revenue prospects
could decline if it faced heightened competition.

S&P said, "Our view of euNetworks' financial risk is primarily
constrained by its reported negative FOCF. Network deployment
requires large upfront investments that are not matched by a
similar revenue and cash generation profile, given that the group
receives monthly recurring payments from customers. As a
consequence, in our base case, we expect breakeven reported FOCF
only by 2019, which prevents the group from deleveraging through
voluntary debt amortization before that date. Moreover, we assess
euNetworks' capital structure as highly leveraged due to adjusted
leverage (debt to EBITDA) calculated at above 5.0x in 2017,
adjusting for the envisaged leveraged buyout, and then decreasing
to about 4.9x in 2018. An additional rating constraint is the
group's currently ultimate ownership by private-equity firm
Stonepeak Infrastructure Partners, which we consider a financial
sponsor. Still, we view positively that a meaningful portion of
the group's acquisition price has been financed with new equity
from the sponsor. We also understand that the focus of both the
sponsor and management is on network deployment and deleveraging.
The stable outlook on euNetworks reflects our view that
increasing bandwidth demand for datacenter connectivity from
large and data-hungry companies will support solid revenue growth
of 10%-15% and sound adjusted EBITDA margin of about 50% over the
next 12 months. These positives, however, are offset by our
expectation of reported negative FOCF and adjusted leverage at
about 5.0x.

"We are likely to raise our rating on euNetworks if EBITDA growth
results in higher absorption of capex, resulting in stronger
credit metrics and a reduction in adjusted leverage. This would
occur if FOCF to debt improves to about 3% and if adjusted
leverage approaches 4.5x on a sustainable basis.

"We could consider lowering our rating if the pace of euNetworks'
revenue and EBITDA growth slowed or if liquidity markedly
deteriorated. These events could occur amid increased competition
that would accentuate pressure on prices, with volume growth not
materializing or the group facing a loss of a major customer."


TICKETLINE UK: Competitive Market Prompts Administration
--------------------------------------------------------
Andy Malt at Complete Music Update reports that Cardiff-based
ticketing company Ticketline UK has gone into administration.

According to CMU, Ticketline UK says it has struggled to compete
in the increasingly competitive ticketing sector.

"Unfortunately due to the increasingly competitive market of the
ticketing industry, Ticket Line (UK) Ltd could no longer continue
trading.  We are now in the process of trying to find a potential
buyer in the best interests of the company's 2000 customers," CMU
quotes Elias Paourou -- epaourou@cvr.global -- of liquidator CVR
Global as saying in a statement.

Ticketline describes itself as "Wales's largest independent
ticket agency and event break specialist".  As well as live music
shows, it also sells tickets for sporting events, theatre shows
and day trips.


VIRGIN MEDIA: S&P Affirms 'BB-' CCR, Outlook Stable
---------------------------------------------------
S&P Global Ratings affirmed its 'BB-' long-term corporate credit
rating on Virgin Media Inc. and its various issuing entities. The
outlook is stable.

S&P said, "We also affirmed the 'BB-' issue rating on Virgin
Media's senior secured loans and notes. The recovery rating is
unchanged at '3' indicating that we expect to see meaningful
recovery prospects (rounded estimate: 55%) in the event of a
default. We also affirmed our 'B' issue rating on the senior
unsecured notes and receivables financing notes (RFNs). The
recovery rating is unchanged at '6' (rounded estimate: 0%).

"The rating affirmation signifies that we continue to see Virgin
Media as a core subsidiary of Liberty Global, given that it is
the largest entity in the group and represents over a third of
combined group revenues. It is also highly integrated in the
group's cash management and other operating functions.

"However, we are lowering Virgin Media's stand-alone credit
profile (SACP). Virgin Media has been increasing its use of
vendor financing for investments related to "Project Lightning,"
a network expansion project that it began in 2015. As a result,
the amount of debt in the company's capital structure has risen,
as has S&P Global Ratings-adjusted leverage. Adjusted leverage
was 5.6x in 2016, up from about 5x in 2015. It is expected to
rise further, to just under 6x in 2017.

"In addition to the ongoing upstreaming of Virgin Media's excess
cash to Liberty Global as part of the group's cash pooling
mechanism, we view this trend toward increased vendor financing
debt and leverage as evidence that the parent company continues
to pursue aggressive financial policies with respect to Virgin
Media.
That said, there is some potential to reduce leverage in the long
term, after the expected completion of Project Lightning, if the
vendor financing debt balance stabilizes and EBITDA growth is
supported by new cable subscribers from the network expansion.

"Our assessment of Virgin Media's business risk profile continues
to reflect its well-established position as the second-largest
pay-TV operator in the U.K. (with a market share of about 13% of
the total TV market) behind direct-to-home satellite provider
Sky; strong market positions in U.K. broadband (20% share) and
fixed-line telephony (14% share); and a strong brand. Virgin
Media is also one of the largest mobile virtual network operators
in the U.K., by number of customers. As of Sept. 30, 2017, Virgin
Media provided video, broadband internet, and fixed-line
telephony services to 5.9 million customers and mobile services
to 3 million customers. Over 60% triple-play customer penetration
demonstrates Virgin Media's strong position as a convergent
service provider, and around 2.5 average revenue generating units
per customer relationship reflects acceptance of its bundled
products."

These strengths are partially offset by the competitive market
for broadband internet, telephony, and TV in the U.K. S&P said,
"We think that competitors' product bundles and product
promotions will remain aggressive and could constrain prices and
result in high ongoing customer churn. Virgin Media also faces
competition from the fiber network upgrade program by the telecom
incumbent, BT. However, we consider this unlikely to
significantly impair its revenue growth prospects in the near
term."

Virgin Media relies on competitors Sky and BT for some key TV
content. Sky owns U.K. rights to various sports and movie
programming content, and BT also owns certain sports broadcasting
rights. S&P thinks over-the-top content providers are an
additional, although long-term, threat to cable operators' pay-TV
revenues.

S&P's base case assumes:

-- Revenue growth of about 3% over 2017-2019. This reflects
    expected cable revenue growth, with increased customer
    subscriptions due to the Project Lightening network
    expansion. Mobile revenues should continue to fall in 2017,
    with lower average revenue per user (ARPU) because of
    declining subscription revenues, before starting to stabilize
    from 2018. Business revenue growth is supported by higher
    average small office and home office (SOHO) retail generating
    units in 2017 and continued data volume uptake in future
    years.

-- Stable adjusted EBITDA margins of around 49% over 2017-2019
    from 49.3% in 2016. Increased operating expenses related to
    Project Lightning, and marketing and content costs will
    generally be offset by operating leverage.

-- Capital expenditure (capex) of about 11.5% of revenues over
    2017-2019, similar to 2016. This excludes noncash property
    and equipment investments, that is, those made through vendor
    financing and finance leases. S&P assumes total property and
    equipment investments of 31%-33% of revenues in 2017 and
    2018, as the company's investment in Project Lightning peaks.

-- Upstreaming of almost all reported free operating cash flow
    through net cash advances to Liberty Global.

Based on these assumptions, we arrive at the following adjusted
credit metrics:

-- Debt-to-EBITDA ratios of 5.8x-6.0x over 2017-2019.

-- Funds from operations-to-debt ratios of 12.5%-12.7% over
    2017-2019.

-- EBITDA interest coverage of 3.6x-3.8x over 2017-2019.

-- Free operating cash flow-to-debt ratios of 8.3%-8.5% in 2017
    and 8.2%-8.4% in 2018 and 2019.

The stable outlook on Virgin Media mirrors that on its parent
company, Liberty Global, because we consider it to be a core
subsidiary of the group. S&P said, "We do not expect to take a
rating action on Virgin Media unless we reassess the entity's
strategic importance to Liberty Global or raise or lower our
long-term rating on Liberty Global."

S&P said, "On a stand-alone basis, we expect that Virgin Media
will experience organic revenue growth and stable EBITDA margins
over 40% in the medium term. We expect adjusted leverage to
remain just below 6x over the next few years due to the continued
use of vendor financing facilities for a high proportion of the
new build investments for Project Lightning.

"We could revise our assessment of Virgin Media's 'b+' stand-
alone credit profile downward if the company's adjusted leverage
increases to well above 6x for a prolonged period. This could
happen if larger-than-expected Project Lightning investments
result in further significant increases in vendor financing debt,
or if there is an increase in acquisition activity.

"We could consider revising upward the SACP if the group's
financial policy changed and more of Virgin's investment and
upstreaming was financed through its cash generation, rather than
debt, and its credit metrics improved significantly--with
adjusted leverage below 5x, for example. This could also occur
over time through organic growth, or as investment scales back,
provided that aggressive upstreaming does not offset these
benefits.

"We could raise our rating on Virgin Media if we also raised our
rating on Liberty Global. An upgrade of Virgin Media would also
depend on our continued assessment of Virgin Media as core to the
Liberty Global group.

"Because we link our rating on Virgin Media to our rating on
Liberty Global, we would lower our rating on Virgin Media if we
lowered our rating on its parent, which is unlikely at present,
given our stable outlook on Liberty Global."



                            *********

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
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Information contained herein is obtained from sources believed to
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