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

                           E U R O P E

         Wednesday, December 27, 2017, Vol. 18, No. 256


                            Headlines


G E R M A N Y

MONITCHEM HOLDCO: S&P Lowers CCR to 'B-', Outlook Negative
NIKI LUFTFAHRT: Staff to Get December Salaries
UNITYMEDIA GMBH: Fitch Upgrades Rating on Senior Notes to 'B+'


I R E L A N D

BLACK DIAMOND 2017-2: Moody's Assigns B2 Rating to Class F Notes
EIRCOM HOLDINGS: Iliad Deal No Impact on Fitch's B+ Rating
HALCYON LOAN 2017-2: Moody's Assigns B1 Rating to Class F Notes


I T A L Y

INTER MEDIA: S&P Rates EUR300MM Bond 'BB-', Outlook Stable
* Italian RMBS 60+ and 90+ Day Delinquencies Slightly Decreased


K A Z A K H S T A N

SAMRUK-ENERGY: S&P Alters Outlook to Pos & Affirms 'B+/B' CCRs


N E T H E R L A N D S

UPC HOLDING: Fitch Affirms BB- Long-Term IDR, Outlook Stable
* Netherlands RMBS 60+ day Delinquencies Drop in September 2017


P O R T U G A L

LUSITANO MORTGAGES 1: S&P Affirms B- (sf) Rating on Class E Notes
PORTO CITY: Fitch Raises Long-Term IDR From BB+, Outlook Stable


R U S S I A

BANK RESERVE: Liabilities Exceed Assets, Assessment Shows
DETSKY MIR: S&P Cuts CCR to 'B' Then Withdraws Rating
EVRAZ GROUP: Fitch Alters Outlook to Positive, Affirms BB- IDR
GENBANK JSC: Bank of Russia OKs Amendments to Resolution Measures
PROMSVYAZBANK PJSC: Amendments to Bankruptcy Measures Approved


S E R B I A

FABRIKA AKUMULATOR: Batagon Inks EUR7.35MM Acquisition Agreement


S P A I N

BANCAJA 5 FONDO: S&P Lowers Class C Notes Rating to B- (sf)
BANCO POPULAR: SRB Prepares Non-Confidential Version of Valuation

* Spanish Prime RMBS 90+ Day Delinquencies Stabilizes


U N I T E D   K I N G D O M

NEW LOOK: Fitch Places 'CCC' IDR on Rating Watch Positive
NEWDAY GROUP: S&P Affirms 'B+' ICR, Outlook Stable
TICKETLINE UK: Loss of Ticketing Contract Major Cause of Collapse
VIRGIN MEDIA: Fitch Affirms BB- Long-Term IDR, Outlook Stable

* UK Buy-to-Let RMBS 90-Plus Day Delinquencies Remained Stable


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G E R M A N Y
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MONITCHEM HOLDCO: S&P Lowers CCR to 'B-', Outlook Negative
----------------------------------------------------------
S&P Global Ratings lowered its long-term corporate credit rating
on Monitchem Holdco 2 S.A. (CABB), holding company for Germany-
headquartered chemicals producer CABB International GmbH, to 'B-'
from 'B'. The outlook is negative.

S&P said, "We also lowered our issue rating on the EUR100 million
super senior revolving credit facility (RCF) due 2020 to 'B+'
from 'BB-'. The recovery rating is at '1+', versus '1'
previously, indicating our expectation of full recovery (100%+)
in the event of a payment default.

"We lowered the issue rating on the EUR410 million senior secured
notes to 'B-' from 'B'. The recovery rating remains at '3',
reflecting our expectations of meaningful recovery (50%-70%;
rounded estimate: 60%) in the event of a payment default.
Finally, we lowered the issue rating on the EUR175 million senior
unsecured notes to 'CCC' from 'CCC+'. The recovery rating is '6',
indicating our expectations of negligible recovery (0%-10%;
rounded estimate: 0%) in the event of a payment default.

"The downgrade follows the release of CABB's third-quarter
results, highlighting the continued weakness in the crop-
protection sector, combined with the disruption on the Rhine
Valley Railway ("Rheintalbahn") between August and October 2017.

"We continue to see weakness in the agrochemical industry. Many
of the market participants have reported lower sales due to
inventory overstocking and depressed incomes in the farming
industry, which have reduced demand for enhanced crop-protection
products.

"We still consider CABB a leading manufacturer of monochloracetic
acid (MCA; used in the production of agrochemicals, food
additives, and personal care). CABB maintained adjusted EBITDA
margins in excess of 19% in 2015 and 2016, but the group has
reported negative year-on-year growth in six of the last seven
quarters. This has depressed CABB's free operating cash flow
(FOCF) while at the same time it has maintained its capital
expenditure (capex) plans."

In addition to this, on Aug. 12, 2017, water and earth collapsed
into the east bore of the Rastatt Tunnel in the course of
construction works. The permanent way and tracks of the
Rheintalbahn (Rhine Valley line) above the tunnel settled by up
to 30 cm in the affected area. This led to major disruption on
the key Rheintalbahn supply route between West Germany and major
ports, impacting CABB's ability to receive inventory and
distribute end products until October. While the group put
alternative plans into action to transport goods via road, CABB
reported either a delay in sales, or an outright loss of sales
depending on the nature of the contracts in place.

S&P said, "Now that the incident has been resolved, we expect
CABB to regain some custom manufacturing sales, thanks to
flexibility in the supply chain and long-term contracts with
customers. However we believe the more commoditized acetyls sales
may have been lost, as customers shifted to those suppliers
unaffected by the disruption. We note that, although this
highlights a vulnerability in CABB's supply chain model, there
are currently few economic alternatives and it was a one-time
event."

As a result of the disruption, CABB reported an 8% drop to
approximately EUR72 million in last-12-months' EBITDA between
second- and third-quarter 2017. S&P said, "We estimate some
recovery of sales in the fourth quarter, leading to our full-year
EBITDA forecast of EUR77 million-EUR80 million. This leads to our
forecast of adjusted debt to EBITDA of approximately 8x, and
We acknowledge that CABB has maintained its market position, but
we understand that the industry is still at the bottom of the
cycle and will not emerge until after 2018. As such, our base-
case prediction is for minimal growth in EBITDA, continued
negative FOCF (as CABB is carrying on with its capex plans) and
adjusted leverage in excess of 8x. This adds to pressure on the
corporate credit rating, and leads to our negative outlook."

S&P said, "Our assessment of CABB's business risk profile takes
into consideration its leading position as a MCA manufacturer,
with about 125,000 metric tons of production capacity and a 40%
market share in Europe -- in line with The Netherlands-
headquartered coatings and chemicals producer, Akzo Nobel. It
also takes into consideration the group's exposure to stable,
albeit cyclical, end markets, notably agrochemicals, food, and
personal care, which we estimate at more than 70% of revenues.
Our assessment also reflects the group's ability to generate a
strong EBITDA margin, but we note that the margin has declined
each year from its peak in 2013.

"Furthermore, our assessment also takes into consideration the
recent weakness in CABB's core crop-protection and custom
manufacturing segments, with bottom-of-the-cycle conditions in
the agrochemical industry and weak farm economics affecting
CABB's top-line growth. A further weakness, in our view, is the
group's small size and scope compared with its key MCA competitor
Akzo Nobel, and that of its clients, who are typically
significant players in the chemicals industry.

"In our view, CABB's key business constraints comprise its
notable dependence on a single product, MCA; a degree of customer
concentration in the custom manufacturing segment; and some
sensitivity to feedstock prices (notably acetic acid and acetic
anhydride). That said, we recognize that CABB benefits from pass-
through clauses, and has worked to reduce supplier concentration
in recent years."

The group has invested heavily in recent years, with peak capex
of EUR75 million in 2015, including the recently completed EUR50
million electrolysis project (a switch from mercury to membrane
technology) at its fine chemical plant facility in Pratteln, and
the construction of a new high quality 25 kiloton MCA plant in
China. S&P said, "We anticipate capex will remain elevated, at
about EUR40 million in 2017, before rising to near EUR50 million
in 2018 -- above the perceived run-rate capex of approximately
EUR30 million -- as CABB aims to grow organically, aided by the
strong market position of its key customers.

"Our assessment of CABB's financial risk profile primarily takes
into consideration the group's high leverage, with forecast
adjusted debt-to-EBTIDA in excess of 8x at year-end 2017, and
minimal improvement in 2018, owing to recent market weakness in
CABB's agrochemicals and crop protection markets. Our negative
outlook reflects the likelihood of debt to EBITDA deviating
beyond levels that we view as commensurate with our 'B-' rating,
combined with our forecast of negative EUR10 million FOCF per
year in 2018-2019 as CABB continues its capex plans of
approximately EUR50 million each year.

"While we acknowledge that CABB's maturity profile and
approximately 2.5x adjusted EBITDA cash-interest coverage ratio
support the rating, we note that the group's leverage has
continued to deteriorate since Permira took control of the group
in June 2014.

"For year-end 2017, we forecast adjusted total debt of about
EUR650 million. This includes EUR225 million senior secured notes
due 2021, EUR175 million senior secured floating rates notes due
2021, EUR175 million senior unsecured notes due 2021, operating
lease adjustments of EUR5 million, asset retirement obligations
of EUR3 million, EUR50 million of pension and other post-
retirement obligations, and EUR20 million of unamortized
borrowing costs.

"The group's capital structure also includes a EUR100 million
super senior RCF due 2020, which we forecast will be fully
undrawn at year-end 2017, but we anticipate some usage in 2018
following our forecast of CABB generating negative FOCF. The RCF
agreement contains springing covenants at 30% headroom. Once 30%
of the facility has been drawn, CABB must abide by a fixed-charge
coverage ratio of 2.1:1.0, and a consolidated leverage ratio of
8.1x-8.3x over the next 12 months.

"In our base case, we consider continued weakness across CABB's
markets in 2018 and 2019, with limited recovery in the
agrochemical industry. Based on capex of up to EUR50 million,
combined with neutral to negative working capital at year-end
2017, we forecast FOCF of approximately negative EUR10 million
and an adjusted debt to EBITDA ratio in the region of 8x in
2018."
Our assumptions include:

-- Group revenue decline of 1%-2% in 2017 to approximately
    EUR440 million, mainly due to weaker custom manufacturing,
    followed by modest growth of 1%-2% in 2018.

-- Reported EBITDA margin declining to 17.5%-18.0% following
    continued market low demand, and lost sales from the
    Rheintalbahn incident, but supported by recent cost-cutting
    initiatives and the implementation of various projects.

-- Capex of approximately EUR40 million in 2017 and up to EUR50
    million per year in 2018-2019.

-- No dividends or acquisitions.

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

-- Reported gross debt to EBITDA of 7.5x-8.0x in 2017,
    strengthening to approximately 7.5x in 2018 and 2019.

-- Negative adjusted FOCF of EUR6 million-EUR10 million in 2017,
    and remaining negative in 2018-2019 due to subdued markets
    and increased capex.

-- EBITDA cash interest coverage of approximately 2.5x in 2018-
    2019.

S&P said, "The negative outlook on CABB reflects our view that
the group will report EBITDA of EUR77 million-EUR80 million in
2017, rising to EUR80 million-EUR83 million in 2018. This leads
to our forecast that the group will generate negative FOCF in
both years, and a reported debt-to-EBITDA ratio of approximately
8x. Our outlook assumes that EBITDA interest coverage will remain
at approximately 2.5x over the next 12-18 months.

"We could lower the ratings on CABB if the prolonged weakness in
the crop-protection industry continues to depress the group's
cash flows, leading to reported debt to EBITDA in excess of 8x,
constrained EBITDA cash interest coverage, and continued negative
FOCF. We could also lower the ratings if the group's liquidity
weakens.

"We could revise the outlook to stable, if the group were to
report "debt to EBITDA in the region of 7.0x-7.5x over the next
12 months, providing confidence that the group can maintain such
leverage. Positive FOCF generation, greater diversity of revenue
sources, and increased scale of operations would all support such
a decision."


NIKI LUFTFAHRT: Staff to Get December Salaries
----------------------------------------------
Kirsti Knolle at Reuters reports that Niki works council chief
Stefan Tankovits on Dec. 22 said December salaries will be paid
to staff of the insolvent airline, whose administrators are
working on selling its remaining assets.

"I was told that the (December) salaries will be paid,"
Mr. Tankovits told Reuters.

As reported by the Troubled Company Reporter-Europe on Dec. 15,
2017, the management of NIKI Luftfahrt GmbH on Dec. 13 filed with
the local court of Berlin-Charlottenburg a petition for the
opening of insolvency proceedings over the assets of NIKI.

                         About Air Berlin

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

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

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

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

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


UNITYMEDIA GMBH: Fitch Upgrades Rating on Senior Notes to 'B+'
--------------------------------------------------------------
Fitch Ratings has affirmed Unitymedia GmbH's (UM) Long-Term
Issuer Default Rating (IDR) of 'B+'. The Outlook is Stable. At
the same time Fitch has upgraded the group's senior notes to
'B+'/RR4 from 'B'/RR5.

UM's ratings are supported by the company's strong operating
profile including its strong challenger position in consumer and
small business broadband markets, solid growth, high earnings and
cash-flow margins. These factors are offset by an industry
structure that remains fragmented with UM covering around a third
of the country and limited prospects of further consolidation
outside the potential for wider cooperation or asset swaps with
Vodafone (BBB+/Stable), along with financial leverage which is
relatively high.

KEY RATING DRIVERS

Stable Market: The German broadband market continues to grow in
the mid-single digits by subscribers, mostly driven by the cable
segment and fibre rollout. Fitch expects cable to maintain its
broadband speed advantage given Deutsche Telekom's VDSL-focused
fibre strategy and the evolving capabilities of DOCSIS
technology. Competition remains rational albeit price competition
is high in fixed broadband and all operators offering high
quality fixed-line services. Cable operators continue to benefit
from established relationships with legacy analogue cable TV
subscribers, gradually switching them to premium TV services and
upselling internet and VoIP telephony services.

TV content is not in Fitch's view a major differentiating factor
for the competition in the German pay-TV market and no company
puts much effort and money into exclusive content, preferring
instead a revenue-sharing model with a vast number of content
providers. At the same time, the demand for premium video
services is modest, partially due to the high quality of free-to-
air content in Germany. The cable companies cannot fully offset
the decline in basic cable subscribers with enhanced digital TV
services, but this is compensated by higher ARPU for the latter
resulting in flat or modestly growing TV revenues.

Strong Operating and Financial Trends: UM's revenue has been
steadily growing in the mid-single digits in the last four years,
albeit with a gradual slowdown. Fitch conservatively expect the
growth rate to continue decelerating at 1-2pp per year in 2018-
2020 on the back of strong competition and a gradually maturing
broadband market. Bundles remain an important driver for the
company's growth as evidenced by their growing share in the
customer base. Almost half of UM's customer base has 2- and 3-
play bundles with majority of them being 3-play.

At the same time the amount of single-product customers (mostly
basic cable) remains high which leaves room for further
improvements and service upselling. LG's experience and expertise
in product development - examples including the group-wide roll-
out of its Connect Box WiFi router, Horizon video platform - and
experience in content aggregation support service quality.
Limited opportunity exists for cost synergies given the already
high EBITDA margin reported, although scale economies and the
limited marginal cost of up-selling services could support some
margin expansion.

Cable Market Not Fully Consolidated: Germany's "legacy" Level 3/4
cable structure has in Fitch's view led to a degree of
fragmentation and less developed approach to network upgrades and
key performance metrics. Nonetheless, UM's footprint covers about
77% of the households in the three German states where it
operates and therefore has considerable scale. Scale economies
are evident in financial performance, while network investment
including the upgrade of in-building networks is addressing some
of the industry's former structural complexity.

High Leverage Sustainable: Fitch expect UM's leverage to remain
high at 5.6x funds from operations (FFO) adjusted net leverage in
2018-2020. The most recent amendment of UM's senior secured
facilities agreement implies a relaxation of debt incurrence
covenants to 4.5x and 5.5x consolidated net leverage ratio
excluding and including subordinated debt, respectively (from
4.0x and 5.0x previously). Fitch expect the company to maintain
headroom of 0.2-0.3x below the covenants in order to be able to
refinance selected facilities on more beneficial terms when
market conditions allow doing so.

Fitch recognises UM's capacity for organic deleveraging on the
back of strong free cash flow (FCF) generation. However, Fitch
expect that the majority of free cash flows will be distributed
to the shareholder.

Senior Facilities' Rating Upgrade: Fitch have upgraded the rating
of senior facilities to 'B+'/'RR4' from 'B'/'RR5' on the back of
the higher enterprise value available for creditors' claims in a
distress scenario driven by the growth in the company's going-
concern EBITDA assumption. 'RR4' recovery implies no notching to
company's IDR.

DERIVATION SUMMARY

UM's operating and market position compare well relative to
similarly leveraged European telecoms peers. The company has
stronger revenue growth and cash-flow generation than many of its
peers, and has a good organic deleveraging capacity. Its
relatively low funding costs and continued growth expectations,
in Fitch's view, are likely to ensure that parent company,
Liberty Global, maintains slightly higher leverage at UM than at
Telenet or Virgin Media -- both rated 'BB-'/Stable. The peer
group further includes the wider cable sector peers, including
UPC Holding (BB-/Stable) and VodafoneZiggo (BB-/Negative), as
well as Italy's alternative telco, WIND Tre (B+/Stable) and Irish
incumbent, eir (B+/Stable). Compared with these, UM displays
above sector average growth, consistently high margins and strong
cash-flow generation. Forecast leverage driven by anticipated
shareholder payments is the key metric anchoring the rating at
'B+'.

KEY ASSUMPTIONS

Fitch's key assumptions within Fitch rating case for the issuer
include:
- mid-single-digit revenue growth in 2017-2018, slowing
   thereafter as the market matures;
- adjusted EBITDA margin in 2017-2020 of around 63.5%;
- EUR620 million-EUR660 million of capex per year in 2018-2020;
- cash tax at around EUR30 million per year in 2017-2020
- cash distributions in the form of shareholder loan payments in
   line with available free cash flow and a bank covenant of up
   to 5.5x total net debt to annualised EBITDA.

KEY RECOVERY RATING ASSUMPTIONS
- The recovery analysis assumes that Unitymedia would be
   considered a going concern in bankruptcy and that the company
   would be reorganised rather than liquidated.
- Fitch have assumed a 10% administrative claim
- The going-concern EBITDA estimate of EUR1.2 billion reflects
   Fitch's view of a sustainable, post-reorganisation EBITDA
   level upon which Fitch base the valuation of the company.

- The going-concern EBITDA is 20% below LTM 3Q2017 EBITDA,
   assuming likely operating challenges at the time of distress
- An enterprise value (EV) multiple of 6x is used to calculate a
   post-reorganisation valuation and reflects a conservative mid-
   cycle multiple
- Fitch calculates the recovery prospects for the super senior
   and senior secured instruments at 100% which implies three
   notches uplift of the ratings relative to company's IDR, ie
   'BB+'/'RR1' rating. The recovery rating on the senior
   unsecured debt is 'RR4' and the instrument rating at 'B+' in
   line with UM's IDR.

RATING SENSITIVITIES

Future Developments That May, Individually or Collectively, Lead
to Positive Rating Action
- FFO-adjusted net leverage lower than 5.0x (5.3x at end 2016)
   on a sustainable basis, with strong and stable FCF generation,
   reflecting a stable competitive and regulatory environment

Future Developments That May, Individually or Collectively, Lead
to Negative Rating Action
- FFO-adjusted net leverage above 5.8x (5.3x at end 2016) on a
   sustainable basis (this guideline was previously set at 5.5x)
- FCF margin consistently below 10% (21% at end 2016)

LIQUIDITY

Strong Liquidity: Liquidity is provided by undrawn bank lines -
the group has a EUR80 million super senior RCF due 2023 and
EUR420 million senior secured RCF due 2023 both fully available
based on September 2017 compliance reporting. Underlying cash-
flow generation is strong although Fitch expects available cash
to be upstreamed to parent company, LG subject to group leverage.

FULL LIST OF RATING ACTIONS

Unitymedia GmbH
Long-Term Issuer Default Rating: affirmed at 'B+', Outlook Stable
Senior notes: upgraded to 'B+'; recovery rating 'RR4' from
'B'/'RR5'
Unitymedia Hessen GmbH & Co KG
Super senior revolving credit facility: affirmed at 'BB+';
recovery rating 'RR1'
Senior secured revolving credit facility: affirmed at 'BB+';
recovery rating 'RR1'
Unitymedia Hessen GmbH & Co. KG and Unitymedia NRW GmbH as co-
issuers
Senior secured notes: affirmed at 'BB+'; recovery rating 'RR1'
Unitymedia Finance LLC
Senior secured loan facilities: affirmed at 'BB+'; recovery
rating 'RR1'


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I R E L A N D
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BLACK DIAMOND 2017-2: Moody's Assigns B2 Rating to Class F Notes
----------------------------------------------------------------
Moody's Investors Service has assigned definitive ratings to nine
classes of notes (the "Notes") issued by Black Diamond CLO 2017-2
Designated Activity Company ("Black Diamond CLO" or the
"Issuer"):

-- EUR142,000,000 Class A-1 Senior Secured Floating Rate Notes
    due 2032, Definitive Rating Assigned Aaa (sf)

-- USD55,800,000 Class A-2 Senior Secured Floating Rate Notes
    due 2032, Definitive Rating Assigned Aaa (sf)

-- EUR30,000,000 Class A-3 Senior Secured Fixed Rate Notes due
    2032, Definitive Rating Assigned Aaa (sf)

-- USD15,000,000 Class A-4 Senior Secured Fixed Rate Notes due
    2032, Definitive Rating Assigned Aaa (sf)

-- EUR56,000,000 Class B Senior Secured Floating Rate Notes due
    2032, Definitive Rating Assigned Aa2 (sf)

-- EUR30,900,000 Class C Senior Secured Deferrable Floating Rate
    Notes due 2032, Definitive Rating Assigned A2 (sf)

-- EUR23,000,000 Class D Senior Secured Deferrable Floating Rate
    Notes due 2032, Definitive Rating Assigned Baa2 (sf)

-- EUR18,000,000 Class E Senior Secured Deferrable Floating Rate
    Notes due 2032, Definitive Rating Assigned Ba2 (sf)

-- EUR12,100,000 Class F Senior Secured Deferrable Floating Rate
    Notes due 2032, Definitive Rating Assigned B2 (sf)

RATINGS RATIONALE

Moody's rating of the Notes addresses the expected loss posed to
noteholders. The rating reflects the risks due to defaults on the
underlying portfolio of assets, the transaction's legal
structure, and the characteristics of the underlying assets.

Black Diamond CLO is a managed cash flow CLO. The issued notes
are collateralized primarily by broadly syndicated first lien
senior secured corporate loans. At least 90% of the portfolio
must consist of senior secured loans, senior secured bonds and
eligible investments, and up to 10% of the portfolio may consist
of second lien loans, unsecured loans, mezzanine obligations and
high yield bonds.

Black Diamond CLO 2017-2 Adviser, L.L.C. (the "Manager") manages
the CLO. It directs the selection, acquisition, and disposition
of collateral on behalf of the Issuer. After the reinvestment
period, which ends in January 2022, the Manager may reinvest
unscheduled principal payments and proceeds from sales of credit
risk and credit improved obligations, subject to certain
restrictions.

In addition to the nine classes of notes rated by Moody's, the
Issuer will issue EUR21.5m and USD23.6m of subordinated notes
which will not be rated.

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

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

The 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:

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

Diversity Score: 40

Weighted Average Rating Factor (WARF): 2800

Weighted Average Spread (WAS): 3.85%

Weighted Average Coupon EUR: 6.00%

Weighted Average Coupon USD: 7.00%

Weighted Average Recovery Rate (WARR): 44.5%

Weighted Average Life (WAL): 8.5 years

As part of the base case, Moody's has addressed the potential
exposure to obligors domiciled in countries with local currency
country risk ceiling (LCC) of A1 or below. As per the portfolio
constraints, exposures to countries with a LCC of A1 or below
cannot exceed 10%, with exposures to countries with a LCC of Baa1
to Baa3 further limited to 5%. Exposures to countries with a LCC
below Baa3 is prohibited. As a worst case scenario, a maximum 5%
of the pool would be domiciled in countries with LCC of Baa1 to
Baa3. The remainder of the pool will be domiciled in countries
which currently have a LCC of Aa3 and above. 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 peripheral countries and the
target ratings of the rated notes and amount to 0.75% for the
Class A notes, 0.50% for the Class B notes, 0.375% for the Class
C notes and 0% for Classes D, E and F.

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.

Stress Scenarios:

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

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

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

Rating Impact in Rating Notches

Class A Senior Secured Floating/Fixed Rate Notes: 0

Class B Senior Secured Floating Rate Notes: -1

Class C Senior Secured Deferrable Floating Rate Notes: -1

Class D Senior Secured Deferrable Floating Rate Notes: -1

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 3640)

Rating Impact in Rating Notches

Class A Senior Secured Floating/Fixed Rate Notes: 0

Class B Senior Secured Floating Rate Notes: -2

Class C Senior Secured Deferrable Floating Rate Notes: -3

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


EIRCOM HOLDINGS: Iliad Deal No Impact on Fitch's B+ Rating
----------------------------------------------------------
Fitch Ratings expects the ratings of eircom Holdings (Ireland)
Limited (eir), the largest Irish telecoms operator, to remain
unchanged at 'B+'/Stable if Iliad/NJJ Telecom take a combined
majority stake in the company. The anticipated change in
shareholders by itself does not drive Fitch ratings.

Fitch does not expect a material shift in eir's operational
priorities despite the expected change in shareholders. Fitch
believe eir will continue to invest in its converged network.
Management transition should be smooth with the current eir CEO
remaining in place until the transaction successfully completes
in 1H18, subject to regulatory approvals.

Fitch expects that the capital structure will remain in place if
the transaction closes, given that the current debt documentation
includes change of control language permitting portability. There
is also early redemption of the bonds at 101 in the event of
change of control.

Xavier Niel's private investment vehicle, NJJ Telecom Europe, and
Iliad announced that it has agreed to acquire a majority
ownership stake in eir of 32.9% and 31.6%, respectively. Iliad
will receive a call option exercisable in 2024 from NJJ to
acquire 80% of NJJ's stake in eir. Existing majority shareholders
Anchorage Capital Group and Davidson Kempner have agreed to
retain a minority shareholding with a 35.5% equity stake. The new
shareholders have said they have fully committed funding to
complete the transaction


HALCYON LOAN 2017-2: Moody's Assigns B1 Rating to Class F Notes
---------------------------------------------------------------
Moody's Investors Service announced that it has assigned the
following definitive ratings to notes issued by Halcyon Loan
Advisors European Funding 2017-2 Designated Activity Company:

-- EUR193,000,000 Class A Senior Secured Floating Rate Notes due
    2031, Definitive Rating Assigned Aaa (sf)

-- EUR29,000,000 Class B-1 Senior Secured Floating Rate Notes
    due 2031, Definitive Rating Assigned Aa2 (sf)

-- EUR12,500,000 Class B-2 Senior Secured Fixed Rate Notes due
    2031, Definitive Rating Assigned Aa2 (sf)

-- EUR22,250,000 Class C Senior Secured Deferrable Floating Rate
    Notes due 2031, Definitive Rating Assigned A2 (sf)

-- EUR19,100,000 Class D Senior Secured Deferrable Floating Rate
    Notes due 2031, Definitive Rating Assigned Baa2 (sf)

-- EUR15,500,000 Class E Senior Secured Deferrable Floating Rate
    Notes due 2031, Definitive Rating Assigned Ba2 (sf)

-- EUR10,100,000 Class F Senior Secured Deferrable Floating Rate
    Notes due 2031, Definitive Rating Assigned B1 (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, Halcyon Loan
Advisors (UK) LLP ("Halcyon"), has sufficient experience and
operational capacity and is capable of managing this CLO.

The Issuer is a managed cash flow CLO. At least 90% of the
portfolio must consist of senior secured obligations and up to
10% of the portfolio may consist of senior unsecured obligations,
second-lien loans, mezzanine obligations and high yield bonds.
The portfolio is expected to be 75% ramped up as of the closing
date and to be comprised predominantly of corporate loans to
obligors domiciled in Western Europe. The remainder of the
portfolio will be acquired during the six month ramp-up period in
compliance with the portfolio guidelines.

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

In addition to the seven classes of notes rated by Moody's, the
Issuer will issue EUR33,000,000 of subordinated notes which will
not be rated.

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

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

The rated notes' performance is subject to uncertainty. The
notes' performance is sensitive to the performance of the
underlying portfolio, which in turn depends on economic and
credit conditions that may change. Halcyon'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 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.

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

Par Amount: EUR325,000,000

Diversity Score: 37

Weighted Average Rating Factor (WARF): 2750

Weighted Average Spread (WAS): 3.60%

Weighted Average Coupon (WAC): 4.25%

Weighted Average Recovery Rate (WARR): 43.5%

Weighted Average Life (WAL): 8.5 years

Moody's has addressed the potential exposure to obligors
domiciled in countries with local currency country risk ceiling
(LCC) of A1 or below. As per the portfolio constraints, exposures
to countries with LCC of A1 or below cannot exceed 10%, with
exposures to LCC of Baa1 to Baa3 further limited to 5%. In
addition, the Issuer may not invest in an obligation for which
its obligors is domiciled in a country where its LCC is below
Baa3.

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 definitive rating assigned
to the rated notes. This sensitivity analysis includes increased
default probability relative to the base case. Below is a summary
of the impact of an increase in default probability (expressed in
terms of WARF level) on each of the rated notes (shown in terms
of the number of notch difference versus the current model
output, whereby a negative difference corresponds to higher
expected losses), holding all other factors equal.

Percentage Change in WARF: WARF + 15% (to 3163 from 2750)

Ratings Impact in Rating Notches:

Class A Senior Secured Floating Rate Notes: 0

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

Class B-2 Senior Secured Fixed 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: WARF +30% (to 3575 from 2750)

Ratings Impact in Rating Notches:

Class A Senior Secured Floating Rate Notes: -1

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

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

Class C Senior Secured Deferrable Floating Rate Notes: -3

Class D Senior Secured Deferrable Floating Rate Notes: -2

Class E Senior Secured Deferrable Floating Rate Notes: -1

Class F Senior Secured Deferrable Floating Rate Notes: 0

Further details regarding Moody's analysis of this transaction
may be found in the new issue 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
=========


INTER MEDIA: S&P Rates EUR300MM Bond 'BB-', Outlook Stable
----------------------------------------------------------
S&P Global Ratings said that it has assigned its 'BB-' long-term
issue rating to the 4.875% EUR300 million secured bond issued by
Italy-based limited-purpose vehicle Inter Media and Communication
S.p.A. (MediaCo). The outlook is stable.

The recovery rating on the bond due 2022 is '4', indicating our
expectation of recovery in the 30%-50% range (rounded estimate
45%) in the event of a payment default.

The issue rating mainly reflects MediaCo's materially volatile
cash flow available for service debt, owing to short-term
contracts linked directly or indirectly to TeamCo's onfield
performance, and substantial exposure to refinancing risk.

MediaCo will service the bonds from TeamCo's assignment of its
share of revenues from the sale by the Italian national football
body (Serie A) of its broadcasting rights and, if TeamCo
qualifies for any European competitions, from broadcasting
revenues from the Union of European Football Associations (UEFA).
Additionally, MediaCo will receive and service the bond via
revenues from sponsorship agreements.

S&P assesses MediaCo's operations phase stand-alone credit
profile (SACP) at 'bb-' to reflect the material volatility of
these revenue sources, in its view. Specifically, TeamCo's
onfield performance can have an impact on MediaCo's media-rights
revenue, which is more pronounced for revenues from UEFA
competitions. Additionally, the contracts underlying these
revenues are exposed to periodical renegotiation, and revenue
distribution can be subject to change.

TeamCo's sporting performance also partly underpins its revenues
from sponsorship contracts. A successful performance track
record, as in TeamCo's case, is the basis for both an attractive
brand and any sponsorship contract. However, the market for
multimillion euro sponsorship deals is highly competitive, and
contracts tend to be short term. Additionally, contracts are
often structured with bonuses or deductions that directly link
revenues to TeamCo's sporting achievements. These factors make
revenues from sponsorship contracts more volatile than
broadcasting revenues, especially those from Serie A, and
therefore to greater market risk.

While TeamCo is one of the most successful Italian and European
football clubs, and we expect it will strengthen its brand
recognition and fan base in overseas markets, MediaCo's revenue
growth forecast is based on aggressive expansion assumptions, in
S&P's view, in particular for sponsorship and advertising.

S&P said, "In our base case, we forecast that TeamCo will achieve
at least seventh place in Serie A on average over our forecast
period. The preliminary operations phase SACP is constrained by
our assessment of the post-refinancing period, during which
annual debt service coverage ratios (ADSCRs) are lower than
before 2022, due to our assumption of a higher cost of debt after
refinancing, and lower visibility on revenues in later years. We
assess the preliminary operations phase SACP at 'b+', reflecting
our expectation that MediaCo will generate a minimum ADSCR of at
least 2.5x after refinancing. Before 2022, we project a minimum
ADSCR of 4.6x.

"The operations phase SACP of 'bb-' is one notch above the
preliminary operations phase SACP. This reflects the strong
ADSCRs under our downside scenario, whereby we simulate TeamCo's
relegation. However, upside is constrained by the risk of
volatility in the long term and weak visibility of operating and
financial performance, exacerbated by the substantial amount of
debt (91%) exposed to refinancing risk at maturity.

"In light of the legal and contractual structure in place, the
rating reflects our assessment of MediaCo on a stand-alone basis.
However, since MediaCo's business is exposed to TeamCo's
performance, we assess the rating as linked to TeamCo's
creditworthiness. The linkage to TeamCo does not currently pose a
constraint to the rating.

Although the transaction is weak linked to its bank account
provider, that counterparty does not currently constrain the
rating since it is rated higher than the project's debt.

MediaCo was established in 2014 as a limited-purpose entity to
manage its parent's media, broadcast, and sponsorship rights,
historical media archives, and intellectual property rights
relating to the Inter brand and certain employees. Since then,
MediaCo has acted as the sole manager and operator of the
football club's media, broadcast, and sponsorship business.

In connection with its establishment, MediaCo borrowed EUR230
million, secured by the revenues from its media and sponsorship
contracts as well as by cash accumulated in secured accounts.
MediaCo has used the proceeds from the issuance, together with
the cash in accounts securing its EUR208 million outstanding
loan, to refinance that debt and upstream the remainder to
TeamCo.

The bond will benefit from a fully funded reserve of EUR10.6
million, aimed to cover the lesser of the peak annual interest
service and half of peak annual debt service. The bond also
benefits from a requirement for MediaCo to prefund the operating
expenditure and debt service accounts before cash flows can be
distributed to TeamCo.

S&P said, "In our view, due to the high potential for cash flow
volatility, liquidity is less than adequate.

"The stable outlook reflects our long-term expectation that
TeamCo's onfield performance in Serie A will be no worse than
seventh place, and that MediaCo will renegotiate its existing
broadcasting rights and sponsorship contracts to support a
minimum ADSCR solidly above 2.5x.

"We could lower the rating if the transaction's minimum ADSCR
under our base case declines below 2.5x. This could result from
TeamCo's weaker-than-expected performance or declining commercial
revenues, for example, if TeamCo were unable to renew any
strategic sponsorship contracts (such as for jerseys, or
technical sponsorships). We could also lower the rating if
TeamCo's creditworthiness, which MediaCo is linked to, weakened
or if the envisaged establishment of a Chinese subsidiary
prejudiced MediaCo's insolvency protections.

"An upgrade is unlikely in the imminent future. We may consider a
positive rating action if the most recent commercial contracts
prove to be a sustainable and reliable source of funding in the
long term, resulting in a minimum ADSCR solidly above 4x."


* Italian RMBS 60+ and 90+ Day Delinquencies Slightly Decreased
---------------------------------------------------------------
According to the latest performance update published by Moody's
Investors Service, the 60+ day delinquencies in the Italian
residential mortgage-backed securities (RMBS) market slightly
decreased to 1.6% in August 2017 from 1.8 % in February 2017,
while the 90+ day delinquencies declined to 1.1 % in August 2017
from 1.3% in February 2017.

During the same period, cumulative defaults remained stable at
5.0%.

Prepayment rates increased to 5.9% in August 2017 from 5.8% in
February 2017.

As of August 2017, Moody's rated 93 transactions in the Italian
RMBS market, with a total outstanding pool balance of EUR48.3
billion, a decrease from EUR51.9 billion in February 2017.

As of August 2017, the reserve funds of 28 transactions, 9 of
which are fully drawn, were below their target levels .


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


SAMRUK-ENERGY: S&P Alters Outlook to Pos & Affirms 'B+/B' CCRs
--------------------------------------------------------------
S&P Global Ratings revised its outlook on Kazakhstan-based
electricity group Samruk-Energy to positive from stable.

S&P said "At the same time, affirmed our 'B+' long-term and 'B'
short-term corporate credit ratings and 'kzBBB' Kazakhstan
national scale long-term rating on the company."

"Our 'B+' issue rating on Samruk-Energy's $500 million senior
unsecured notes remained unchanged when they were repaid on Dec.
20, 2017.

"The outlook revision reflects our expectation that Samruk-
Energy's credit metrics could improve in the coming years, if its
disposals of subsidiaries support further deleveraging and if its
liquidity strengthens. We expect the company will continue
generating operating cash flow that suffices to fund its reduced
but still significant investment program. We forecast the
company's S&P Global Ratings' adjusted debt to EBITDA will
decrease to 4.0x-4.5x at the end of 2017 and to less than 4.0x in
2018, from about 5.0x in 2016, if disposals progress as planned
and if Samruk-Energy uses the proceeds for deleveraging."

The company has refinanced its remaining $420 million Eurobonds
(it repaid $80 million ahead of schedule in September 2017),
using funding from the local market, the European Bank for
Reconstruction and Development (EBRD), and its own sources.
Consequently, the company's exposure to vulnerability of
Kazakhstan's banking system and potential limitations on
available funding has decreased. S&P said, "Still, we consider
that the banking system remains weak. Samruk-Energy's new debt
maturity profile is smooth and manageable, in our opinion,
although it still bears exposure to exchange-rate fluctuations,
with 15%-20% of the debt portfolio still denominated in U.S.
dollar after the refinancing. We therefore now assess Samruk-
Energy's stand-alone credit profile (SACP) at 'b', compared with
'b-' previously."

S&P said, "In our base case for Samruk-Energy, we expect the
company will maintain stable profitability, with an EBITDA margin
of 35%-40%. We also anticipate that it will improve performance,
with debt to EBITDA declining to below 4.0x in 2018, thanks to
the higher tariffs approved by the regulator, growing electricity
demand, and increased export sales to Russia.

"We do not adjust Samruk-Energy's debt for the put option claim
from Samsung C&T Corporation (announced in August 2016), covering
the 50%+1 stake in Balkhash TPP (BTPP) for a total of $192
million. Rather, we think that any investments in BTPP will be
funded by equity injections from the government, as was done
previously. We will continue to monitor the situation because
such claims, if they materialize, could accentuate pressure on
both credit metrics and liquidity."

The company's capital-expenditure (capex) program remains
significant, at Kazakhstani tenge (KZT)55 billion (about $165
million) annually in the next two years, despite cuts already
made from KZT80 billion-KZT100 billion in 2015-2016. S&P said,
"We project that Samruk-Energy will report moderately negative
discretionary cash flow (DCF) in 2017-2019. However, the
potential negative DCF could be offset by proceeds from the
planned disposals of certain subsidiaries under the Kazakh
state's privatization program. We understand the sales of
Mangistau Distribution Power Grid (MREK) and East Kazakhstan
Regional Energy Company have been completed and the deal
regarding Aktobe TPP is close to finalization. As such, we
include the respective proceeds from these transactions in our
base-case scenario and liquidity calculation."

S&P said, "We continue to believe there is a moderately high
likelihood that Samruk-Energy would receive timely and sufficient
extraordinary support from the Kazakh government (likely via
parent company Samruk-Kazyna), in the event of financial
distress."

This reflects our assessment of Samruk-Energy's:

-- Important role for the government, given its strategic
    position as a leading provider of electricity in Kazakhstan;
    and

-- Strong link with the government, which fully owns Samruk-
    Energy through Samruk-Kazyna.

S&P said, "We expect that the government will maintain majority
ownership of Samruk-Energy, at least for the next two years,
despite the potential privatization of a minority stake in the
company. Still, we continue to believe that the administrative
procedures for receiving extraordinary support could be complex
and time consuming.

"The positive outlook on Samruk-Energy reflects our expectation
of a one-in-three likelihood that we could raise the rating over
the next 12-24 months, based on our anticipation of stronger
liquidity and improving credit ratios, with debt to EBITDA
sustainably below 4.0x and funds from operations to debt at about
20%. We anticipate that the company will use the proceeds from
its asset disposals to repay existing debt ahead of the maturity
dates and keep its investment program at a manageable level. The
positive outlook also incorporates that our view of extraordinary
government support to Samruk-Energy remains moderately high and
potential claims from Samsung, if they materialize, will be
covered by injections from the government rather than new debt
issues.

"We might consider an upgrade if Samruk-Energy decreased its
leverage, with debt to EBITDA sustainably below 4.0x and FFO to
debt at about 20%, with a stronger SACP at 'b+' at least." An
upgrade would also rely on:

-- S&P's assessment of liquidity as adequate, with a ratio of
    sources to uses at1.2x, at least, and no covenant breaches;

-- A smooth debt maturity profile;

-- No new significant debt-funded investment projects and no
    material increase in dividends; and

-- No claims from Samsung to exercise the put option on the BTPP
    stake or a strong commitment from the government to fund the
    potential transaction.

Pressure on the ratings might arise if Samruk-Energy adopted
more-aggressive financial policies that contrast with our current
expectations. For example, if increased investments or disposals
of EBITDA-generating assets weakened Samruk-Energy's financial
position, with deterioration of credit measures and liquidity, or
poor covenant compliance, we would likely revise the outlook to
stable. Although unlikely in the next few years, S&P would likely
lower the long-term rating by one notch if Samruk-Energy's SACP
were to weaken by two notches to 'ccc+'.


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


UPC HOLDING: Fitch Affirms BB- Long-Term IDR, Outlook Stable
------------------------------------------------------------
Fitch Ratings has affirmed UPC Holding BV's (UPC) Long-Term
Issuer Default Rating (IDR) at 'BB-'. The Outlook is Stable.

UPC's ratings take into account the company's solid business
profile with cable operations spread across seven countries,
consistent and visible revenue and cash flow and leveraged
balance sheet. Switzerland, the largest of the group's
businesses, is experiencing constrained growth due to intense
competition. With effective FX hedging in place, business
diversification is viewed positively by Fitch. Liberty Global is
likely to maintain leverage close to UPC's downgrade rating
threshold but consistent cash flow generation provides good
potential deleveraging capacity.

KEY RATING DRIVERS

Switzerland, Low-Growth, Competitive Market: Switzerland is the
portfolio's single largest market, accounting for around 47% of
9M17 revenue and is therefore an important driver of the overall
business. Switzerland is a mature broadband market (penetration
is above 90%) and has proven to be a progressive and highly
competitive telecoms market. UPC's fixed operations are pitched
against a strongly performing incumbent, Swisscom as well as
other fixed and mobile providers such as Sunrise. UPC's Swiss
revenue was down 0.7% in 9M17; an anomaly for a cable business
more typically used to enjoying challenger-type growth. Portfolio
diversification across central and eastern Europe (CEE) is
nonetheless strong and consolidated cash flow margins healthy.

CEE, Growth and Diversification: UPC is present in five CEE
countries, the largest of which, Poland, accounts for around 14%
of group revenue (9M17), followed by Hungary with a further 10%.
These businesses exhibit stronger revenue growth, which is more
consistent with challenger-type cable operations where market
share can be gained at the expense of the incumbent and through
new home network build. Portfolio diversification, growth
potential and the consistent margin performance of the CEE
operations is a credit positive. The overall business is
performing well; while diversification more generally provides
portfolio management levers and the potential for disposals or
minority spin-offs in times of leverage or liquidity pressure.

Multimedia Polska Acquisition, Ratings Accretive: The MMP
acquisition announced in 2016 has yet to be completed, following
regulatory delays. Management expect the transaction to close in
1H18, increasing's UPC's cable coverage in Poland to roughly 30%
of households from 20%. Funding for the transaction is being
provided by parent, LG and will add around EUR80 million-EUR85
million in EBITDA to consolidated results. A transaction that is
effectively equity-funded at the UPC level is expected to provide
around 0.2x-0.3x of annualised leverage relief/headroom upon
completion.

Well-Hedged Debt Portfolio: Operations in seven underlying
trading currencies could otherwise lead to currency mismatch. UPC
issues debt in USD, euro and CHF; weakness in the portfolio's
trading currencies versus its debt mix could therefore add to
leverage. UPC's treasury strategy is to fully hedge this
mismatch, effectively matching the debt portfolio's currencies
with its underlying trading currencies through the use of cross
currency swaps. UPC matches debt equivalent to roughly 5x
budgeted EBITDA per country. Fitch views the group's hedging as
well- managed and effective, insulating the group from unexpected
FX movements.

Rating Sensitivity Widened: Fitch has relaxed its leverage
downgrade sensitivity for UPC to 5.0x from 4.8x, which if
sustained would likely result in a downgrade to 'B+'. In Fitch's
view, UPC benefits from solid financial metrics, a healthy growth
profile, diversification from the CEE operations, effective
treasury management (including currency mismatch of liabilities
hedged to maturity) and a more cautious leverage than exists in
other LG portfolio assets. FCF metrics are weaker than LG's best
performing assets, largely due to new build capex and the
centralised vendor financing role that UPC has traditionally
played. Fitch nonetheless views its business and financial
strengths as consistent with UPC's 'BB-' rating and strong enough
to support a slightly higher leverage at this rating.

Instrument Ratings and Recoveries: Fitch applies a generic
approach to recoveries for UPC. The capital structure is similar
to those across the LG group portfolio, with the business
financed largely by senior secured debt and a smaller layer of
unsecured debt. Given the mix of revenue, which is concentrated
in countries with recovery caps of Group C or D, recoveries are
capped at 'RR3' for the secured debt, which is rated 'BB', one
notch above the IDR. Recoveries on unsecured debt achieve an
'RR6' recovery and the instruments at 'B' are notched down twice
from the IDR.

DERIVATION SUMMARY

UPC's ratings are positioned solidly within the leveraged telecom
peer group; with immediate peers being other LG cable
operations - Virgin Media Inc, Telenet Group Holding N.V (both
BB-/Stable) and Unitymedia GmbH (B+/Stable). VodafoneZiggo Group
B.V (BB-/Negative) of the Netherlands, a joint venture between LG
and Vodafone is a further benchmark. Relative to the peer group,
UPC is smaller, to some extent exposed to emerging market risk,
its markets more fragmented and the business delivering weaker
FCF. Business diversification, growth prospects and the
effectiveness of its FX policy provide mitigation. Fitch has
nevertheless set UPC's downgrade threshold marginally tighter
than the peer group to reflect these constraints.

KEY ASSUMPTIONS

Fitch's key assumptions within Fitch rating case for the issuer
include:
- Low-single digit revenue growth (excluding acquisitions) in
   2017-2020, reflecting competitive pressures in mature, highly
   penetrated markets, alleviated by continued stronger organic
   growth in the CEE regions;
- EBITDA margins (excluding acquisitions) to remain largely
   stable in 2017-2020;
- Cash taxes to rise steadily, reflecting earnings growth and
   the materiality of the Swiss operations to overall earnings;
- A reduction in the capex/sales ratio, reflecting a decline in
   the number of new builds in the CEE region from 2017 onwards
   and lower vendor financing-related capex;
- Modest bolt-on acquisition spend in 2017-2020, in line with
   2016. Footprint expansion through acquisition of small
   operators;
- The Multimedia Polska acquisition effective on a pro-forma
   basis from 2018, EBITDA synergies expected from 2018;
- Available cash up-streamed through shareholder loan payments
   subject to covenant headroom and Fitch's assumption that
   leverage is likely to remain lower at UPC than in other LG
   portfolio companies.

RATING SENSITIVITIES

Future Developments That May, Individually or Collectively, Lead
to Positive Rating Action
- FFO-adjusted net leverage of 4.3x or below on a sustained
   basis.
- Significant improvement in pre-dividend FCF.

Future Developments That May, Individually or Collectively, Lead
to Negative Rating Action
- FFO-adjusted net leverage above 5.0x on a sustained basis.
- Material deterioration of competitive position in key markets.

LIQUIDITY

Healthy Liquidity: The company has access to a fully undrawn UPC
Holding Bank Facility of EUR990 million and we' expect positive
FCF from 2017-2020. Cash flow generation is therefore strong but
future distributions made to LG may restrict deleveraging
capacity, keeping leverage around its current level.

FULL LIST OF RATING ACTIONS

UPC Holding BV
Long-Term IDR: affirmed at 'BB-'; Outlook Stable
Senior notes rating: affirmed at 'B'/'RR6'
UPC Financing Partnership
Senior secured debt rating: affirmed at 'BB'/'RR3'
UPCB Finance IV Limited
Senior secured debt rating: affirmed at 'BB'/'RR3'
UPCB Finance VII Limited
Senior secured debt rating: affirmed at 'BB'/'RR3'
UPC Broadband Holding B.V.
Senior secured debt rating: affirmed at 'BB'/'RR3'


* Netherlands RMBS 60+ day Delinquencies Drop in September 2017
---------------------------------------------------------------
The Dutch residential mortgage-backed securities (RMBS) market
showed strong performance in the three-month period ended
September 2017, according to the latest performance update
published by Moody's Investors Service.

The 60+ day delinquencies of RMBS - Netherlands, including Dutch
mortgage loans benefitting from a Nationale Hypotheek Garantie
decreased to 0.30% of the outstanding balance in September 2017
from 0.35% in June 2017.

The 90+ day delinquencies also declined to 0.22% of the
outstanding balance in September 2017 from 0.25% in June 2017.

Cumulative defaults continued to increase to 1.07% of the
original balance, plus additions (in the case of master issuers)
and replenishments, from 1.04% in June 2017, which represent an
increase of 2.88% during the three-month period. This compares to
cumulative defaults of 1.07% in March 2017.

Cumulative losses remained at 0.17% in September 2017.

As of June 2017, the 89 Moody's-rated RMBS - Netherlands
transactions had an outstanding pool balance of EUR181.24
billion, representing a year-over-year decrease of 8.2%.


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


LUSITANO MORTGAGES 1: S&P Affirms B- (sf) Rating on Class E Notes
-----------------------------------------------------------------
S&P Global Ratings took various credit rating actions in Lusitano
Mortgages No. 1 PLC.

Specifically, S&P has:

-- Raised and removed from CreditWatch positive our ratings on
    the class A and B notes;

-- Raised our ratings on the class C and D notes; and

-- Affirmed our rating on the class E notes.

S&P said, "On Oct. 10, 2017, we placed on CreditWatch positive
our ratings on Lusitano Mortgages No. 1's class A and B notes
following our Sept. 15, 2017, raising of our unsolicited foreign
currency long-term sovereign rating on the Republic of Portugal.

S&P said, "The rating actions follow our credit and cash flow
analysis based on the most recent transaction information that we
have received, and the application of our European residential
loans criteria and our structured finance ratings above the
sovereign criteria.

"Available credit enhancement, based on nondefaulted loans, has
increased since our previous full review to 46.2% from 33.1% for
the class A notes, to 30.6% from 21.8% for the class B notes, to
18.6% from 13.1% for the class C notes, to 7.8% from 5.2% for the
class D notes, and to 5.4% from 3.5% for the class E notes.

"This transaction features a reserve fund and a liquidity
facility, which are currently at their respective target levels
and do not amortize. We considered this in our cash flow
analysis.

"The transaction's performance has improved since our previous
review: severe delinquencies of more than 90 days (excluding
repossessions) now account for 1.7% of the performing pool
compared with 2.5% in June 2015. Prepayment levels remain low at
2.9% over the past year and the transaction is unlikely to pay
down significantly in the near term, in our opinion.

"After applying our European residential loans criteria to this
transaction, our credit analysis results show a decrease in both
the weighted-average foreclosure frequency (WAFF) and the
weighted-average loss severity (WALS) at each rating level."

  Rating level    WAFF (%)    WALS (%)
  AAA                20.92       2.00
  AA                 15.83       2.00
  A                  13.06       2.00
  BBB                 9.59       2.00
  BB                  6.38       2.00
  B                   5.41       2.00

The decrease in the WAFF figures is primarily due to the higher
proportion of loans benefitting from the highest seasoning
credit, and lower arrears. The decrease in the WALS is primarily
due to the decrease in the pool's weighted-average current loan-
to-value ratio, which has resulted from the loans' amortization
and the increasing house prices in Portugal.

As the pool's attributes indicate better credit quality than the
archetype, S&P increased the projected loss that it modeled to
meet the minimum floor under its European residential loans
criteria.

The transaction comprises loans that benefit from a government
subsidy with regard to mortgage interest payments. In order to
account for the risk of a sovereign default, which would affect
the performance of the transaction, S&P has incorporated cash
flow stresses on such subsidies at rating levels above the
sovereign rating on the Republic of Portugal. S&P said, "For
rating levels up to four notches above the rating on the
sovereign, we assume that 75% of subsidized interest is lost in
the first 18 months of our recessionary period. For rating levels
greater than four notches above the rating on the sovereign, we
assume that 100% of subsidized interest is lost in the first 18
months of our recessionary period."

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

"Our RAS criteria constrain our ratings on the class A and B
notes at 'AA- (sf)' and 'A (sf)', respectively, which is six and
four notches, respectively, above our 'BBB-' long-term rating on
the sovereign. We have therefore raised to 'AA- (sf)' from 'A+
(sf)' and removed from CreditWatch positive our rating on the
class A notes, and to 'A (sf)' from 'A- (sf)' and removed from
CreditWatch positive our rating on the class B notes.

"Our analysis indicates that the available credit enhancement for
the class C and D notes is sufficient to support the stresses
that we apply at the 'BBB-' and 'BB+', respectively, rating
levels under our European residential loans criteria. We have
therefore raised to 'BBB- (sf)' from 'BB- (sf)' our rating on the
class C notes, and to 'BB+ (sf)' from 'B+ (sf)' our rating on the
class D notes.

"The available credit enhancement for the class E notes is
commensurate with our currently assigned rating. The pool's asset
performance is stable, the reserve fund is fully funded and
continues to increase as a percentage of the outstanding balance,
and prepayments are low. Therefore, we do not expect the issuer
to be dependent upon favorable business, financial, and economic
conditions to meet its financial commitment on the class E notes
within the next 12 months. Consequently, we have affirmed our 'B-
(sf)' rating on this class of notes.

"We also consider credit stability in our analysis. To reflect
moderate stress conditions, we adjusted our WAFF assumptions by
assuming additional arrears of 8% for one- and three-year
horizons. This did not result in our rating deteriorating below
the maximum projected deterioration that we would associate with
each relevant rating level, as outlined in our credit stability
criteria.

"In our opinion, the outlook for the Portuguese residential
mortgage and real estate market is not benign and we have
therefore increased our expected 'B' foreclosure frequency
assumption to 3.33% from 2.00%, when we apply our European
residential loans criteria, to reflect this view. We base these
assumptions on our expectation of modest economic growth and
continuing high unemployment."

Lusitano Mortgages No. 1 is a Portuguese residential mortgage-
backed securities (RMBS) transaction, which closed in December
2002 and securitizes first-ranking mortgage loans. Novo Banco
S.A. originated the pool, which comprises loans granted to prime
borrowers for the acquisition of residential properties located
in Portugal.

RATINGS LIST

  Class              Rating
              To                From

  Lusitano Mortgages No. 1 PLC
  EUR1.01 Billion Residential Mortgage-Backed Floating-Rate Notes

  Ratings Raised and Removed From CreditWatch Positive

  A           AA- (sf)          A+/Watch Pos (sf)
  B           A (sf)            A-/Watch Pos (sf)

  Ratings Raised

  C           BBB- (sf)         BB- (sf)
  D           BB+ (sf)          B+ (sf)

  Rating Affirmed

  E           B- (sf)


PORTO CITY: Fitch Raises Long-Term IDR From BB+, Outlook Stable
---------------------------------------------------------------
Fitch Ratings has upgraded the City of Porto's Long-Term Foreign-
and Local-Currency Issuer Default Ratings (IDR) to 'BBB' from
'BB+'. The Outlooks are Stable. Fitch has also upgraded the
Short-Term Foreign-Currency IDR to 'F2' from 'B'.

Under EU credit rating agency (CRA) regulation, the publication
of sovereign (including by CRA definition regional or local
authorities of a state) reviews is subject to restrictions and
must take place according to a published schedule, except where
it is necessary for CRAs to deviate from this in order to comply
with their legal obligations.

Fitch interprets this provision as allowing us to publish a
rating review in situations where there is a material change in
the creditworthiness of the issuer that Fitch believe makes it
inappropriate for us to wait until the next scheduled review date
to update the rating or Outlook/Watch status. In this case the
deviation was caused by the upgrade of Portugal's IDRs on 15
December 2017.

Following the sovereign upgrade Fitch have taken similar rating
action on Porto as its ratings are constrained by the
sovereign's. Porto's intrinsic credit profile is stronger than
its ratings indicate, due to the city's healthy budgetary
performance and its moderate debt, as well as the strong
oversight by the central government. Prudent administration and
Porto's role as service centre in north Portugal are also credit-
positive.

KEY RATING DRIVERS

The upgrade of Porto's IDR reflects the following key rating
drivers and their relative weights:

HIGH

The upgrade reflects the upgrade of Portugal's IDRs to 'BBB' from
'BB+':

Institutional Framework - Neutral
Porto's ratings remain constrained by the Portuguese sovereign,
in accordance with Fitch's criteria. Like other Portuguese
cities, Porto's accounts and budgets are overseen by the central
government and its financial liabilities are approved by the
national Court of Accounts. The limited role of the intermediate
tiers of government (province and region) in Portugal strengthens
the link between the central government and cities.

Porto's 'BBB' IDRs also reflect the following key rating drivers:

Budgetary Performance - Strength
Porto has maintained high operating margins through the cycle at
above 17% since 2009. Combined with capex flexibility, this has
allowed the city to report a surplus before debt variation every
year over the same period. The 2016 accounts confirm the city's
consistent performance, with an operating margin of 24%, partly
driven by one-off tax and fee revenue. Tax revenues of EUR105.2
million in 2016 were up 21.2% year on year.

Fitch's base case scenario expects softer, albeit still robust,
budgetary indicators for Porto in 2017, with a current margin
around 15% and the capital account partly funded with debt. Fitch
expect moderate growth in tax and fee revenues, at least in par
with the national expected national GDP growth, of around 2% over
the medium term.

Debt and Contingent Liabilities - Strength
Porto reduced outstanding debt to EUR33.3 million in 2016 from
EUR80.1 million in 2015, following a EUR28.7 million
expropriation settlement used to redeem debt ahead of schedule.
Debt-to-current revenue was at a record low of 18% at end-2016,
and the administration plans to take on new debt in 2017 of
around EUR20 million, to fund rehabilitation of housing and
public infrastructure.

Fitch expects gradual debt growth, towards 50% of current
revenues over the medium term, after several years of
deleveraging, to sustain a capex programmes in diverse areas,
such as the refurbishment of several of the city's districts or
the improvement of a ring road. Porto has no contingent
liabilities and retains control of the public sector, which
posted a surplus in 2016.

Economy - Neutral
With an estimated population of 214,000 in 2015, Porto is the
second-largest cultural, administrative and economic Portuguese
centre, providing services to a greater metropolitan area of 14
municipalities with 1.7 million inhabitants. GDP resumed growth
in 2014, and is expected to grow around 1.5%-2.0% per year over
the next two years, driven by the healthy performance of the
external and hospitality sectors.

Management and Administration - Strength
Porto's transparent, extensive reporting as well as conservative
debt and budgetary management practices are also credit positive.

RATING SENSITIVITIES

Porto's intrinsic credit profile is well above the sovereign's,
and will remain strong under Fitch base case scenario. However,
Porto's IDRs are constrained by the sovereign IDRs and are
therefore sensitive to changes in the sovereign rating.


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


BANK RESERVE: Liabilities Exceed Assets, Assessment Shows
---------------------------------------------------------
The provisional administration to manage the credit institution
BANK RESERVE (JSC), appointed by Bank of Russia Order No. OD-
2241, dated August 9, 2017, following the revocation of its
banking license, in the course of examination of the bank's
financial standing has revealed operations towards siphoning off
of assets by extending loans to borrowers with dubious solvency
or unable to meet their liabilities, to a total of more than
RUR730 million; furthermore, these operations included the
purchase of a liquidated company's promissory note worth RUR90.6
million, according to the press service of the Central Bank of
Russia.

The provisional administration estimates the value of the Bank's
assets to be under RUR1,128.24 million, vs RUR1,305.73 million of
its liabilities to creditors including 1280.46 million rubles to
individuals.

On October 11, 2017, the Arbitration Court of the Chelyabinsk
Region recognized BANK RESERVE (JSC) as insolvent (bankrupt).
The State Corporation Deposit Insurance Agency was appointed as a
receiver.

The Bank of Russia submitted the information on financial
transactions bearing the evidence of the criminal offence
conducted by the former management and owners of BANK RESERVE
(JSC) to the Prosecutor General's Office of the Russian
Federation, the Ministry of Internal Affairs of the Russian
Federation and the Investigative Committee of the Russian
Federation for consideration and procedural decision making.


DETSKY MIR: S&P Cuts CCR to 'B' Then Withdraws Rating
-----------------------------------------------------
S&P Global Ratings lowered its long-term corporate credit rating
on Russia-based children's goods retailer Detsky Mir to 'B' from
'B+', following the downgrade of parent Sistema.

S&P said, "We subsequently withdrew the ratings on Detsky Mir at
the issuer's request. The outlook was negative at the time of the
withdrawal.

"The rating action follows our downgrade of Sistema, the majority
owner of Detsky Mir.

"We consider that Sistema's weakened financial position and
liquidity would constrain its ability to provide financial
support to Detsky Mir if the latter were to fall into financial
difficulty.

"Notwithstanding the implications from the Sistema ownership, we
do not expect Detsky Mir's stand-alone creditworthiness to
materially change over the next 12 months. We understand from
management that the covenant that was breached as of June 30,
2017 and subsequently waived, will be removed from credit
agreements by the end of December 2017, and therefore is not
likely to be violated again.

"We subsequently withdrew the ratings on Detsky Mir at the
issuer's request. The outlook was negative at the time of the
withdrawal reflecting our view that Detsky Mir's credit quality
might come under pressure as a result of negative developments at
Sistema."


EVRAZ GROUP: Fitch Alters Outlook to Positive, Affirms BB- IDR
--------------------------------------------------------------
Fitch Ratings has revised Russia-based Evraz Group SA's (Evraz
Group) Outlook to Positive from Stable, while affirming the steel
company's Long-Term Issuer Default Rating (IDR) and senior
unsecured rating at 'BB-'. The Short-Term IDR has been affirmed
at 'B'.

The revision of the Outlook reflects faster deleveraging than
expected by Fitch in May 2017, made possible by a continued
improvement in the steel and coking coal price environment as
well as management focus on debt reduction. Fitch expects funds
from operations (FFO) adjusted gross leverage below 3x at end-
2017, down from 4.4x in 2016. Fitch base case forecasts a spike
in leverage to 3.3x in 2018 due to expected correction in raw
materials prices (iron ore, coking coal) following several
quarters of recovery since 2H16. Fitch expect the ratio to remain
below below 3x thereafter as positive free cash flow (FCF)
supports continued gross debt reduction.

KEY RATING DRIVERS

Commitment to Debt Reduction: The Positive Outlook on the rating
reflects Fitch view that management's commitment to debt
reduction vs. shareholder friendly measures should support FFO
adjusted leverage below Fitch 3.0x positive sensitivity beyond
2018. Fitch expect Evraz's total adjusted debt to decrease to
USD5.3 billion at end-2017 from USD5.9 billion at end-2016 as
improved cash flow generation is applied towards deleveraging.

Growth in Russian Steel Consumption: Fitch assume a moderate
increase in Russian steel demand of around 2%-3% in 2018, based
on Fitch expectations of consistent mild GDP growth in 2018.
Fitch projects GDP growth of 2% in 2018-2019, on the back of
reduced economic uncertainty, a less restrictive monetary policy
and a benign oil price outlook. Fitch also expect a pick-up in
the domestic construction industry and an increase in investment
in the energy sector as oil prices increase.

Structural Changes in Global Steel Industry: Steel prices have
materially increased since 2H16 due to supply side reforms in
China and resulting lower Chinese steel exports to international
markets. Stronger-than-expected raw materials prices (iron ore,
coking coal) also contributed to the recent increase of steel
prices by way of a "cost push" effect. Fitch expect a correction
in raw materials prices following several quarters of recovery
since 2H16.

Prices Likely to Stabilise in Russia: Positive signs are emerging
from domestic demand in Russia, which Fitch believe may support
Russian steel prices in the longer term. Evraz's key domestic
end-markets are construction (35% of 2016 sales volumes), and
railway products (10%), while about 47% of Russian production is
exported in the form of semi-finished products. Following
positive market structural changes for steel, prices for
construction and railway products recovered by 40% yoy in 9M17,
but Fitch believe that prices will likely stabilise in 2Q18 as
raw material prices moderate.

Cost-Competitive: Evraz benefits from high self-sufficiency in
iron ore of 81% and coking coal of 195%, including supplies of
coal from its subsidiary Raspadskaya. Consequently, it is better
placed across the steel market cycle to control the cost base of
its upstream operations than less integrated Russian and
international steel peers.

Limited Profitability: In terms of EBITDA generation, Evraz has
the lowest profitability among its Russian peer group due partly
to its exposure to the fragmented Russian construction market,
more specifically to the less value-added long-steel product
market. Competition from a number of small/mid-sized players has
been fierce, leading to lower margins for rebar. Evraz's coking
coal division has benefited from positive price momentum since
4Q16 and contributed around 60% to total EBITDA in 1H17, compared
with 24% in 2015.

DERIVATION SUMMARY

Evraz's 'BB-' rating is adequately positioned against its Russian
steel peers PJSC Novolipetsk Steel (NLMK, BBB-/Stable), PAO
Severstal (BBB-/Stable) and OJSC Magnitogorsk Iron & Steel Works
(MMK, BBB-/Stable) on comparative measures such as scale of
operations, business diversification and self-sufficiency. Evraz
is, however, more reliant on the more competitive domestic
construction market when peers are mostly exposed to the more
concentrated flat-steel product market. EBITDA margin was 23% in
1H17 compared with 33% for Severstal, 27% for NLMK, and 25% for
MMK. Evraz also has higher leverage than its peers.

Evraz's 'BB-' IDR rating also incorporates the higher-than-
average systemic risks associated with the Russian business and
jurisdictional environment.

KEY ASSUMPTIONS

Fitch's key assumptions within Fitch rating case for the issuer
- USD/RUB 59 in 2017, 60 in 2018 and 61 in 2019.
- Steel and coal sales volumes to increase in 2017 by 2%-3% and
   to remain flat thereafter.
- Increase in prices of steel products in 2017 (30%), followed
   by a price correction in 2018 and 2019 and a moderate recovery
   thereafter.
- USD640 million capex in 2017 and USD600 million thereafter.
- Fitch assumes dividend payout at 40%-60% of free cash flow
   (FCF) in 2017-2020 in new dividend policy.

RATING SENSITIVITIES

Future Developments That May, Individually or Collectively, Lead
to Positive Rating Action
- Further absolute debt reduction with FFO-adjusted gross
   leverage sustainably below 3.0x.
- FFO-adjusted net leverage below 2.5x.
- Clarity on the future dividend policy and further evidence of
   management commitment to a conservative financial policy.

Future Developments That May, Individually or Collectively, Lead
to the Outlook Stabilisation
- FFO adjusted gross leverage sustained above 3.0x.
- FFO-adjusted net leverage sustained above 2.5x.
- Failure to generate material positive FCF.

LIQUIDITY

Strong Liquidity: Fitch view Evraz's liquidity as comfortable.
Management has refinanced the company's significant Eurobond debt
maturities falling in 2018-2020.

In 9M17, management tendered some of the notes maturing in 2018
and 2020, using proceeds from the new USD750 million Eurobond,
redeemed the USD345 million secured notes held by Evraz North
America initially due in 2019, and applied USD295 million net
proceeds from the sale of the port Nakhodka to reducing total
debt. Additionally, in October Evraz announced the full
redemption via make-whole of USD271 million Eurobonds maturing in
2018. Fitch expect total debt to amount to USD5.3 billion by end-
December 2017 (down 11% yoy).

At end-2017, Fitch expect that Evraz will have only USD47 million
debt maturities in 2018 against USD1 billion of cash balances as
of June 2017 (post make-whole). In addition, Fitch expects the
company to generate around USD300 million FCF in 2018.


GENBANK JSC: Bank of Russia OKs Amendments to Resolution Measures
-----------------------------------------------------------------
The Bank of Russia has approved amendments to the plan for the
State Corporation Deposit Insurance Agency to participate in
bankruptcy prevention measures for JSC GENBANK (Reg. 2490),
according to the press service of the Central Bank of Russia.

As decided, JSC Sobinbank (Reg. No. 1317) will be the investor.


PROMSVYAZBANK PJSC: Amendments to Bankruptcy Measures Approved
--------------------------------------------------------------
The Bank of Russia approved amendments to the plan of its
participation in bankruptcy prevention measures for Promsvyazbank
Public Joint-Stock Company (Reg. No. 3251), further referred to
as the Bank, which provide for its recapitalization from the
Banking Sector Consolidation Fund. Pursuant to the Federal Law
"On Banks and Banking Activities" and the Federal Law "On
Insolvency (Bankruptcy)", this is the basis for termination
(exchange or conversion) of the Bank's liabilities under
subordinated loans (deposits, bond-secured loans) and termination
of financial obligations to the Bank's executives and controlling
entities, according to the press service of the Central Bank of
Russia.


===========
S E R B I A
===========


FABRIKA AKUMULATOR: Batagon Inks EUR7.35MM Acquisition Agreement
----------------------------------------------------------------
SeeNews reports that Switzerland-based Batagon International
signed an agreement for the acquisition of Serbian insolvent car
battery maker Fabrika Akumulatora Sombor (FAS) for EUR7.35
million (US$8.7 million).

News portal SoInfo quoted the insolvency administrator of the car
battery maker, Predrag Ljubovic, as saying on Dec. 19 the
acquisition offer of Batagon was approved earlier this month by
the International Finance Corporation (IFC), Serbian brokerage
Mediolanum Invest and a representative of the employees of FAS,
which together have a majority in the company's board of
creditors, SeeNews relates.

According to SeeNews, SoInfo quoted Batagon's representative in
the talks, Dalibor Matic, as saying earlier in December "The
company should start with 450-500 workers, and their number
should later rise to 800, as much as it was in the past.  FAS
would mainly produce [car batteries] for the markets of Russia,
Germany, Switzerland, Italy and France".



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


BANCAJA 5 FONDO: S&P Lowers Class C Notes Rating to B- (sf)
-----------------------------------------------------------
S&P Global Ratings lowered its credit ratings on Bancaja 5 Fondo
de Titulizacion de Activos' class B and C notes. At the same
time, S&P raised its rating on the class A notes.

S&P said, "The rating actions follow our credit and cash flow
analysis of the most recent transaction information that we have
received and the October 2017 investor report. Our analysis
reflects the application of our European residential loans
criteria, our structured finance ratings above the sovereign
(RAS) criteria, and our current counterparty criteria."

Available credit enhancement for the class A, B, and C notes has
increased since our previous review. This is mainly due to the
class A amortization and the reserve fund being at its floor
level of EUR5 million. The cash reserve can only be used to pay
interest, except for the last payment date, on which it can also
be used to pay principal.

  Class        Available credit
         enhancement, excluding
            defaulted loans (%)
  A                       13.54
  B                       10.28
  C                        4.97

Mortgage loans in arrears for more than 18 months are classified
as defaulted in this transaction, and, consequently, provisioned
for with available interest and principal collections in the
transaction. The outstanding balance of defaulted assets
(excluding assets that have been through the recovery process) is
significantly lower than in other Spanish residential mortgage-
backed securities (RMBS) transactions that we rate, at 1.75%.
About 49% of the collateral pool is concentrated in the Valencia
region, which was the home region of the originator. S&P said,
"As per our European residential loans criteria, we have factored
this in our credit analysis by applying adjustment factors to the
foreclosure frequency."

S&P said, "After applying our European residential loans criteria
to this transaction, our credit analysis results show a decrease
in the weighted-average foreclosure frequency (WAFF) and a
decrease in the weighted-average loss severity (WALS) for all
rating levels.

"The WAFF decreased compared with our previous review mainly
because it benefitted from the pool's high seasoning and the
lower arrears level. The WALS did not change, as the
transaction's current indexed loan-to-value ratio is very low."

  Rating     WAFF     WALS      level       (%)      (%)
  AAA       12.30     2.00    AA         9.10     2.00
  A          7.41     2.00    BBB        5.41     2.00
  BB         3.42     2.00    B          2.84     2.00

As the pool's attributes indicate better credit quality than the
archetype, S&P increased the projected loss that it modeled to
meet the minimum floor under our European residential loans
criteria.

S&P said, "Citibank Europe PLC (Madrid branch) is the transaction
account provider. Therefore, in accordance with our bank branch
criteria, we rely on the rating on the parent company, Citibank
Europe PLC (A+/Stable/A-1) and the sovereign rating on the
Kingdom of Spain to derive our rating on the counterparty. The
downgrade language in the transaction account agreement is in
line with our current counterparty criteria. Therefore, this
counterparty does not cap our ratings on the notes."

The collection account is held with Bankia S.A. in the name of
the servicer, which is also Bankia. The documents reflect that no
later than two days after the receipt of the collections, the
available funds are transferred to the transaction account in the
name of the fund. Consequently, the transaction is exposed to
commingling risk. S&P has therefore stressed commingling risk as
a loss of one month of interest and principal collections on day
one.

S&P said, "Credit Suisse International (A/Stable/A-1) is the swap
counterparty. We do not consider the replacement language in the
swap agreement to be in line with our current counterparty
criteria, although it does feature a replacement framework that
we give some credit to in our analysis. Under our current
counterparty criteria, if we give credit to support from the swap
in our analysis, our ratings are capped at our long-term issuer
credit rating (ICR) on the corresponding swap counterparty, plus
one notch ('A+' for this transaction). We have therefore analyzed
the transaction without giving benefit to the swap agreement. Our
ratings on all of the notes are delinked from the long-term ICR
on the swap counterparty.

"Our credit and cash flow analysis indicates that the class A
notes pass our stresses at the 'AA+' rating level, excluding the
support from the swap. Our RAS criteria designate the country
risk sensitivity for RMBS as moderate and therefore cap our
rating on the class A notes at five notches above our 'BBB+'
foreign currency long-term sovereign rating on Spain. We have
therefore raised to 'AA (sf)' from 'AA- (sf)' our rating on the
class A notes."

The transaction structure features an interest deferral trigger
for the class B and C notes based on the outstanding balance of
90+ day arrears plus defaults over the outstanding collateral
balance, rather than the closing collateral balance, which is a
unique feature in the Spanish RMBS market. The risk of a triggers
breach given current performance is most likely to manifest
itself at the end of the transaction's life when the collateral
balance is low. If triggered, the interest payments are
subordinated below principal and cash reserve replenishment in
the priority of payments, which would lead to a deferral of
interest on the respective class of notes. These triggers are at
8.00% and 5.00% for the class B and C notes, respectively. At the
October 2017 interest payment date the trigger level was 2.26%.
However, the class B trigger can only be breached if the class A
notes are still outstanding. Similarly, the class C trigger can
only be breached if the class A and B notes are still
outstanding.

S&P said, "In our previous reviews, we considered these triggers
as remote given the historical pool performance, and our
expectations of continued improvements in collateral performance.
However, given the amortization of the collateral since our
previous review and stable as opposed to improving collateral
performance, a potential breach of the triggers is now a more
near-term risk, in our view. Although the transaction's
performance is stable, if the balance of 90+ day arrears
including defaults increases or remains constant, the likelihood
of the interest deferral triggers for the class B and C notes
being breached under our current ratings stress scenarios is a
nearer term risk, compared to our previous review.

"However, in our opinion, the class B and C notes are unlikely to
default over a three-year horizon based on the current constant
prepayment rate (CPR) levels and pool performance. Whether, and
at what point in time, the triggers are ultimately reached, will
depend on how a number of factors develop, including CPR levels,
the level of 90+ day arrears plus defaults, recovery timings, and
which classes of notes are then outstanding. We will closely
monitor the evolution of these factors.

"Considering the aforementioned factors, we have lowered to 'BB+
(sf)' from 'A+ (sf)' our ratings on the class B notes.

"In our opinion, the class C notes are currently not vulnerable
to nonpayment. Our opinion is based on the current credit
enhancement level of 4.97% stemming from the fully funded cash
reserve, compared with only 2.26% of 90+ day arrears (including
defaults). Considering the positive macroeconomic conditions for
the Spanish economy and the high seasoning of the assets, we do
not expect the underlying collateral's performance to
deteriorate. Therefore, in line with our criteria for assigning
'CCC' category ratings, we have lowered to 'B- (sf)' from 'BB+
(sf)' our rating on the class C notes.

"In our opinion, the outlook for the Spanish residential mortgage
and real estate market is not benign, and we have therefore
increased our expected 'B' foreclosure frequency assumption to
3.33% from 2.00%, when we apply our European residential loans
criteria, to reflect this view. We base these assumptions on our
expectation of modest economic growth, continuing high
unemployment, and house price stabilization during 2017."

Bancaja 5 is a Spanish RMBS transaction that closed in April 2003
and securitizes first-ranking mortgage loans, originated between
1999 and 2002. Caja de Ahorros de Valencia Castell¢n y Alicante
(now Bankia) originated the underlying collateral, mainly in the
Valencia region.

  RATINGS LIST

  Class             Rating
              To              From
  Bancaja 5, Fondo de Titulizacion de Activos
  EUR1 Billion Mortgage-Backed Floating-Rate Notes

  Rating Raised

  A           AA (sf)         AA- (sf)

  Ratings Lowered

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


BANCO POPULAR: SRB Prepares Non-Confidential Version of Valuation
-----------------------------------------------------------------
James Kraus at Bloomberg News reports that Single Resolution
Board says it's preparing a non-confidential version of the
valuation report made by an independent valuer in the context of
the resolution of Banco Popular.

According to Bloomberg, the process won't be completed before
mid-January, as necessary consultations are taking place
involving EU and national authorities and entity concerned SRB
appeal panel confirmed in recent decisions on cases 38/17 to
43/17 that full disclosure of certain documents related to
resolution of Banco Popular would raise financial stability
concerns.

SRB concurrently decided to make public elements of valuation
report, the Resolution Plan 2016 and the Resolution Decision,
which the Appeal Panel considered to be of a non-confidential
nature, Bloomberg discloses.

                      About Banco Popular

Banco Popular Espanol SA is a Spain-based commercial bank.  The
Bank divides its business into four segments: Commercial Banking,
Corporate and Markets; Insurance Activity, and Asset Management.
The Bank's services and products include saving and current
accounts, fixed-term deposits, investment funds, commercial and
consumer loans, mortgages, cash management, financial assessment
and other banking operations aimed at individuals and small and
medium enterprises (SMEs).  The Bank is a parent company of Grupo
Banco Popular, a group which comprises a number of controlled
entities, such as Targobank SA, GAT FTGENCAT 2005 FTA, Inverlur
Aguilas I SL, Platja Amplaries SL, and Targoinmuebles SA, among
others.  In January 2014, the Company sold its entire 4.6% stake
in Inmobiliaria Colonial SA during a restructuring of the
property firm's capital.

As reported in the Troubled Company Reporter-Europe on June 15,
2017, S&P Global Ratings said that it raised its long- and short-
term counterparty credit ratings on Banco Popular Espanol S.A.
to 'BBB+/A-2' from 'B/B'.  The outlook is positive.

In addition, S&P lowered its issue-level ratings on Banco
Popular's outstanding preference shares and subordinated debt to
'D' from 'CC' and 'CCC-', respectively, and S&P subsequently
withdrew them.

The rating actions follow the Single Resolution Board's
announcement on June 7, 2017, that it had taken a resolution
action in respect of Banco Popular.  This resulted from the ECB's
conclusion that the bank was failing or likely to fail as a
result of a significant deterioration in its liquidity position.
The resolution entailed the sale of Banco Popular to Banco
Santander S.A. (A-/Stable/A-2) for EUR1, after absorption of
losses by Banco Popular's shareholders and holders of Tier 1 and
Tier 2 capital instruments.


* Spanish Prime RMBS 90+ Day Delinquencies Stabilizes
-----------------------------------------------------
The 90+ day delinquencies stabilized at 0.80% of the current pool
balance in October 2017 from 0.81% in July 2017 in the Spanish
prime residential mortgage-backed securities (RMBS) market,
according to the latest performance update published by Moody's
Investors Service ("Moody's"). During the same period, the 60+
day delinquencies decreased to 1.18% of the current pool balance
in October 2017 from 1.23% in July 2017.

The rate of cumulative defaults increased to 4.28% of the
original balance in October 2017 from 4.20% in July 2017.

The annualised constant prepayment rate increased to 3.35% in
October 2017 from 3.17% in July 2017.

As of October 2017, the reserve funds of 47 transactions were
partially below their target levels and 20 were fully drawn,
compared with 42 partially drawn and 20 fully drawn transactions
in July 2017.

As of October 2017, Moody's rated 160 transactions in the Spanish
Prime RMBS market, with a total outstanding pool balance of
EUR89.79 billion, a 4.33% decrease from EUR93.85 billion in July
2017.


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


NEW LOOK: Fitch Places 'CCC' IDR on Rating Watch Positive
---------------------------------------------------------
Fitch Ratings has placed the ratings of New Look Retail Group Ltd
and U.S.J. - Acucar e Alcool S.A. on Rating Watch Positive.

KEY RATING DRIVERS

The rating action reflects the publication of the Exposure Draft:
Corporate Rating Criteria.

RATING SENSITIVITIES

Fitch expects to resolve the Negative Rating Watches within the
next six months upon finalization of the exposure draft period.

If the final criteria are substantially similar to the Exposure
Draft, then the rating is likely to be impacted after the final
criteria are published.

FULL LIST OF RATING ACTIONS

Fitch has placed the following ratings on Rating Watch Positive:

New Look Retail Group Ltd
-- Long-Term IDR 'CCC'.

New Look Secured Issuer plc
-- Senior secured debt 'CCC'/'RR4'.

New Look Senior Issuer plc
-- Senior secured debt, rated 'CC'/'RR6'.

U.S.J. - Acucar e Alcool S.A.
-- Foreign Currency Long-Term IDR 'CCC';
-- Local Currency Long-Term IDR 'CCC',
-- National Long Term Rating 'CCC(bra)',
-- Senior secured debt 'CCC+'/'RR3',
-- Senior unsecured debt 'CCC+'/'RR3'.


NEWDAY GROUP: S&P Affirms 'B+' ICR, Outlook Stable
--------------------------------------------------
S&P Global Ratings said that it affirmed its 'B+' long-term
issuer credit rating on NewDay Group (Jersey) Ltd. The outlook is
stable.

At the same time, S&P affirmed its 'B' issue rating on the
group's senior secured notes, issued by NewDay BondCo PLC.

S&P said, "The affirmation and unchanged stable outlook reflect
our expectation that NewDay will maintain its concentrated focus
on specific segments of the U.K. credit card market, while
continuing to embed new initiatives that target improving the
group's operating model and cost efficiency. We expect the
consistency of its strategic focus and new retail partnerships
will support its market position and that increasing scale will,
over time, bring benefits to its efficiency and profitability.
Combined with the absence of one-off costs associated with its
change in ownership, we anticipate a moderate improvement in
NewDay's statutory earnings over the next 12 months. While we
remain cognizant of the current cyclical low levels of arrears
and provisions for NewDay and the broader sector, we believe
NewDay has appropriate risk management framework. For example,
NewDay recently tightened its underwriting criteria to improve
borrowers' risk profiles.

"At the same time, NewDay's low level of tangible capital
continues to constrain the rating. In addition to potential asset
quality or operational issues, we expect its high rate of credit
growth will likely offset its otherwise good internal capital
generation, which is supported by its fairly predictable high-
margin earnings. Although we don't believe that NewDay has
increased risk appetite or relaxed its underwriting standards,
and acknowledge that it is a growth business, we also note that
very high loan growth rates can often be a precursor to asset
quality or operational pressures, over time. Despite these
challenges, we currently consider that a negative outlook would
overstate the likelihood of a possible future downgrade. However,
the group would become more vulnerable to a negative rating
action if, for example, we see evidence of weaker asset quality
through a marked increase in its impairment rate or materially
lower risk-adjusted margins.

"We continue to closely monitor regulatory developments in the
sector. Although NewDay is not prudentially regulated, the
Financial Conduct Authority (FCA) oversees the U.K. consumer
credit industry primarily from a business conduct perspective. On
Dec. 14, the FCA published an update on its proposed rules for
credit card firms to help customers get out of persistent debt.
FCA extended a comment period to Jan. 25, 2018, after which the
rules are likely to be finalized fairly quickly. NewDay is
updating its IT systems to make earlier interventions possible,
but any related financial effect is unclear as it will largely
depend on the definition of what a "persistent" debtor is. Our
base-case expectation is that it will not challenge NewDay's
existing operating model, and that the group would be able to
comfortably absorb any negative impact through its current high-
margin earnings."

In the nine months to Sept. 30, 2017, NewDay reported a statutory
loss before tax of GBP22.6 million, compared with a profit of
GBP51.1 million in the same period one year earlier. This
difference primarily reflected one-off, acquisition-related
expenses, one-off costs related to the bond issuance in January
2017, recurring interest paid on the bonds and on the group's
shareholder loans, and recurring amortization on the group's
acquisition intangibles. Over the same period, gross receivables
increased by close to 22% to about GBP2.0 billion, mostly driven
by a 25% increase in its near-prime own-brand book, which makes
up 63% of its total receivables. S&P said, "We expect further
organic annual growth in total receivables of 15%-20%, and
increasing scale to benefit the group's efficiency. Combined with
the reduction in one-off items, we expect a moderate improvement
in statutory earnings through 2018."

The fast pace of receivables growth was funded by the group's
publicly listed asset-backed term debt and variable funding
notes. As a non-prudentially regulated financial institution with
a relatively limited suite of available wholesale funding, we
consider this to be a key risk for NewDay -- especially while its
confidence sensitivity has the potential to impact the group's
significant growth ambitions. Nevertheless, we consider its
established funding structure leaves the group better positioned
than finance company peers, in part because of the familiarity of
credit cards as a securitized asset class, the group's supportive
investor base, and its well-managed maturity profile. The group
also has a GBP30 million super senior revolving credit facility,
which is currently undrawn, and supports the group's access to
short-term liquidity.

S&P said, "Beyond the aforementioned factors, we apply one notch
of positive comparable ratings adjustment, as we believe the
group's low level of fraud and absence of material payment
protection insurance conduct costs relative to peers, as well as
its high-margin earnings, support a 'B+' issuer credit rating
(ICR).

"Our 'B' issue rating on the senior secured notes issued by
NewDay BondCo PLC reflects the guarantee by NewDay and is one
notch below the 'B+' ICR on NewDay. This reflects the group's
significant proportion of encumbered assets relative to the rated
debt, given its funding profile. When a high proportion of assets
are encumbered, they are not available to help repay obligations
until the securitized debt has been repaid, which in our view
affects recovery prospects for the senior secured notes.

"The stable outlook reflects our expectation of improving
statutory profitability over the next 12 months, and stable risk
appetite amid the high growth. We currently assume that the
proposed FCA rules on persistent debt will not materially affect
NewDay's franchise or earnings.

"We could lower the rating in the next 12 months if NewDay's
performance appears likely to significantly undershoot our
current expectations, for example due to a lack of progress on
its statutory profitability that affects its ability to
internally generate capital. A downgrade could also be prompted
by concerns that NewDay's risk appetite has substantially
increased, indicated by a significant weakening in asset quality
or operational issues associated with high receivables growth.

"We consider an upgrade to be unlikely over the next 12 months,
in part due to NewDay's relatively new ownership structure and
concentrated business model. Factors we might consider as
positive include a material increase in capitalization beyond our
current expectations supported by sustainable growth, high profit
retention, and an improving market position. We could raise the
rating on the senior secured notes and equalize it with the group
credit profile, as NewDay funds more of its assets with retained
earnings rather than with a securitization."


TICKETLINE UK: Loss of Ticketing Contract Major Cause of Collapse
-----------------------------------------------------------------
Ruth Mosalski at WalesOnline reports that a major part in the
collapse of Cardiff ticket company Ticketline (UK) Limited was
losing the contract for the city's Winter Wonderland.

Thousands of customers were left in limbo after the company went
into liquidation last month, WalesOnline recounts.

According to WalesOnline, Elias Paourou -- epaourou@cvr.global --
and David Oprey -- doprey@cvr.global -- partners at CVR global
and liquidators of Ticket Line (UK) Limited, have now said that
the "principal" reason for its decline was losing the ticketing
service they provided for Winter Wonderland.

The creditors say that was not a decision by Cardiff council but
one relating to a subcontractor, WalesOnline notes.

Insolvency and restructuring firm CVR Global was called in after
the company was said to have "suffered a downturn in trade",
WalesOnline relays.

Earlier this month, a spokesman for CVR Global said around three
or four members of staff at the company were made redundant,
WalesOnline relates.

Ticketline (UK) Limited, based in Westgate Street in Cardiff,
provided tickets for live shows, sporting events and day trips,
mainly to London.


VIRGIN MEDIA: Fitch Affirms BB- Long-Term IDR, Outlook Stable
-------------------------------------------------------------
Fitch Ratings has affirmed Virgin Media Inc.'s (VMED) Long Term
Issuer Default Rating (IDR) at 'BB-' and Short-Term IDR at 'B'.
The group's senior secured, receivables financing notes and
unsecured ratings are affirmed at 'BB+'/'RR1', 'B+'/'RR5' and
'B'/'RR6', respectively. The Outlook on the Long-Term IDR is
Stable.

The ratings take into account VMED's consistent operating
performance, high quality network and well-established customer
base, a competitive but rational UK fixed communications market
and VMED's measured approach to content aggregation. Operating
cash flow is among the strongest in the peer group, providing
VMED with a deleveraging capacity that is available to few of its
competitors. It also allows management to keep leverage high/
closer to Fitch's downgrade threshold than might otherwise be
tolerated without pressure on its ratings.

VMED is the largest European company in parent company Liberty
Global plc's (LG) portfolio. Investment in Project Lightning, its
4 million new premises network build, and sizeable payments to
the shareholder are expected to keep leverage towards the upper
end of its target net debt/EBITDA leverage of 5.0x.

KEY RATING DRIVERS

Consistently Strong Operating Performance: VMED has developed as
a strong second incumbent business across the UK and Ireland, its
fibre coax network covering approximately 50% of the UK with
significant further network build underway. Operating performance
is consistently strong; the company enjoys leading in-franchise
broadband market share - that part of the telecoms value chain
that is generating strongest growth and economic value. The
company's broadband-led commercial strategy tied to an agnostic
approach to content aggregation drives consistent average revenue
per user metrics, high margins and visible cash flow.

Competitive but Rational Fixed Market: Competition in the UK
communications market is well-developed and intense. BT Group plc
(BBB+/Stable) is a progressive incumbent whose service offer has
been enhanced by its investment in sports/TV content and fibre
and more recently its EE mobile acquisition, while Sky plc's
(BBB-/RWP) leading pay-TV business enjoys consistently strong
operating metrics and revenue growth, having developed a broad
communications offer including the addition of mobile. The market
has proven resilient to cyclical downturns with pricing supported
by demand for high-quality broadband and pay TV. Broadband-led
businesses have proven particularly well positioned.

Project Lightning Gaining Momentum: Project Lightning is VMED's
project to extend the company's network to pass an additional 4
million UK premises, taking its network coverage to 65% of the
population. VMED has a proven track record and established demand
for its communications offer; Fitch therefore believes VMED's
project target of developing an additional GBP1 billion of
revenue once the project is fully mature to be well-founded. With
close to 950,000 new homes passed at end-3Q17 the project has
started to build scale, with operating metrics so far tracking
management's targets. The project is expected by Fitch to keep
capex high at least through 2020 and potentially beyond

MVNO Might Not Be Enough: VMED is partnered with BT's EE mobile
network providing mobile and quad-play services to its fixed
subscriber base. Fitch believes a mobile virtual network operator
(MVNO) model is appropriate to meet consumer needs at this stage.
However, Fitch are less certain service quality will be
adequately supported as the market moves from a discounted bundle
at present to a more nuanced convergent market where consumers
demand seamless content access across multiple technology
platforms. Break clauses in its MVNO contract provide a
contingent should an owned infrastructure prove more necessary.
Such a development would however come at a significant capital
cost and the MVNO model remains Fitch medium-term central
premise.

Capex, Shareholder Payments Drive Leverage: Project Lightning is
budgeted at roughly GBP3 billion in incremental investment; Fitch
expects the project to keep capex-to-sales in the high 20%/low
30% range through 2019. As stated the project economics appear
well thought out and in Fitch's view a good use of capital. VMED
is LG's largest European cable asset and strongest cash
contributor. LG maintains a sizeable buyback programme and
shareholder payments from VMED are therefore likely to remain
high. Fitch assume leverage will remain close to the company's
upper end of net debt / EBITDA target of 5.0x (excluding vendor
finance).

DERIVATION SUMMARY

VMED's ratings are underpinned by a strong operating profile,
developed but rational UK convergent market, technological
advantage and broadband-led business strategy. The company's
closest peers include fellow Liberty Global-owned cable
operators, Telenet N.V, UPC Holding B.V (each rated BB-/Stable)
and VodafoneZiggo Group B.V (BB-/Negative) . Telenet is arguably
its closest peer given the developed stage of their respective
business strategies and strong competitive position in their
markets. The overall importance of VMED's cash flow to LG and the
latter's sizeable share buyback programme imply that VMED's
leverage is likely to be close to historical levels. The
deleveraging capacity provided by the company's underlying free
cash flow (FCF) and strong operating profile would allow for a
higher rating if not for the shareholder's/VMED's stated leverage
policy. No country-ceiling, or parent/subsidiary aspects impact
the ratings.

KEY ASSUMPTIONS

Fitch's key assumptions within Fitch rating case for the issuer
include:
- Revenue growth of around 4%-7% over the next few years, driven
   by Project Lightning and price increases;
- Modest EBITDA margin expansion over the coming years due to
   benefits of economies of scale as Project Lightning is
   completed;
- Capital intensity (property & equipment additions including
   those funded through vendor finance as a percentage of
   revenue) to remain elevated in the high 20%/low 30% range over
   2017-2019, before declining as Project Lighting approaches
   completion; and
- Funds from operations (FFO) adjusted net leverage to be
   maintained at or close to Fitch's downgrade trigger of 5.2x
   through cash repatriation / repayment of parent company loans.

RATING SENSITIVITIES

Future Developments That May, Individually or Collectively, Lead
to Positive Rating Action
- A firm commitment by VMED to a more conservative financial
   policy (for example, FFO adjusted net leverage of 4.5x).
- Continued sound operational performance, as evidenced by key
   performance indicator (KPI) trends and progress in both
   investment and consumer take-up with respect to Project
   Lightning.

Future Developments That May, Individually or Collectively, Lead
to Negative Rating Action
- FFO adjusted net leverage expected to remain above 5.2x (2016:
   5.1x) on a sustained basis.
- FFO fixed charge cover expected to remain below 2.5x (2016:
   3.5x) on a sustained basis.
- Material decline in operational metrics, as evidenced by
   declining KPIs such as customer penetration, revenue-
   generating units per subscriber and ARPUs. Evidence that
   investment in Project Lightning is being scaled to proven
   demand will be an important driver

LIQUIDITY

Sufficient Liquidity Profile: In Fitch's view the liquidity
profile is sufficient on the basis of positive FCF expected
during 2017-2020, full availability under VMED's GBP675 million
revolving credit facility and unrestricted cash and cash
equivalents at end-3Q17 of GBP42.8 million. LG manages liquidity
across its portfolio on a flexible basis and would be expected to
provide support to or reduce shareholder payments from VMED if
necessary. Reported short term maturities at 3Q17 include
approximately GBP1.7 billion of vendor financing related debt.
This value however includes GBP800 million of receivable
financing notes maturing 2024. Nonetheless liquidity is managed
more tightly than at other LG portfolio businesses.

FULL LIST OF RATING ACTIONS

Virgin Media Inc.
Long-Term IDR: affirmed at 'BB-'; Outlook Stable
Short-Term IDR: affirmed at 'B'

Virgin Media Secured Finance Plc
Senior secured debt rating: affirmed at 'BB+'/'RR1'

Virgin Media Investment Holdings Limited
Senior secured debt rating: affirmed at 'BB+'/'RR1'

Virgin Media Bristol LLC
Senior secured debt rating: affirmed at 'BB+'/'RR1'

Virgin Media SFA Finance Limited
Senior secured debt rating: affirmed at 'BB+'/'RR1'

Virgin Media Receivables Financing 1 DAC
Senior secured debt rating: affirmed at 'B+'/'RR5'

Virgin Media Finance Plc
Senior notes rating: affirmed at 'B'/'RR6'


* UK Buy-to-Let RMBS 90-Plus Day Delinquencies Remained Stable
--------------------------------------------------------------
The 90-plus day delinquencies of UK buy-to-let residential
mortgage-backed securities (RMBS) remained stable at about 0.4%
of current balance between June 2017 and September 2017,
according to the latest performance update published by Moody's
Investors Service ("Moody's").

Cumulative losses also remained stable at 0.3% of original pool
balance between June 2017 and September 2017. The total
redemption rate increased to 21.6% from 20.3% over the same
period.

As of September 2017, the total outstanding pool balance of the
42 outstanding UK BTL RMBS transactions rated by Moody's was GBP
32.8 billion.



                            *********

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

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

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


                            *********


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

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

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

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

Information contained herein is obtained from sources believed to
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delivered via e-mail.  Additional e-mail subscriptions for
members of the same firm for the term of the initial subscription
or balance thereof are US$25 each.  For subscription information,
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                 * * * End of Transmission * * *