/raid1/www/Hosts/bankrupt/TCREUR_Public/180220.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

                           E U R O P E

          Tuesday, February 20, 2018, Vol. 19, No. 036


                            Headlines


A Z E R B A I J A N

AZERBAIJAN: Legacy Effects of Oil Shock Affects Credit Profile


C R O A T I A

AGROKOR DD: Seeks More Time to Reach Settlement with Creditors


D E N M A R K

TDC A/S: Moody's Puts Ba2 Jr. Sub. Rating on Review for Downgrade


F R A N C E

ELIS SA: Fitch Assigns BB+ Rating to EUR3BB EMTN Programme


G E R M A N Y

KME AG: Fitch Assigns Final 'B-' Issuer Default Rating
SIEMENS BANK: Moody's Hikes Standalone Credit Profile to Ba1
* GERMANY: Corporate Insolvencies Hit Record Low in 2017


G R E E C E

* GREECE: Won't Backtrack on Privatization Plan After Bailout


H U N G A R Y

BUDA-CASH: Liquidator Gets Favorable Ruling in Saxo Bank Case


I T A L Y

BANCO BPM: DBRS Changes Trend on BB Notes Rating to Negative
FINO 1: Payment Amendments No Impact on DBRS BB Notes Ratings


N E T H E R L A N D S

ARES EUROPEAN IX: S&P Assigns B-(sf) Rating to Class F Notes


R U S S I A

MCC EUROCHEM: Fitch Affirms & Then Withdraws BB Long-term IDR


S P A I N

CAJA GRANADA 1: Fitch Affirms CCsf Ratings on 2 Tranches


U N I T E D   K I N G D O M

CARILLION PLC: Judge Orders Liquidation of 10 Subsidiaries
NEWDAY FUNDING: DBRS Rates VFN-F1 Ser. V1 Class F Notes 'B(high)'
NEWDAY PARTNERSHIP: DBRS Rates VFN-P1 Ser. V1 Class F Notes 'Bsf'
SANDWELL COMMERCIAL 2: S&P Lowers Class D Notes Rating to D(sf)
TAURUS UK 2017-2: DBRS Finalizes BB(low) Rating on Class E Notes

TOWD POINT 2016-VANTAGE1: DBRS Confirms B Rating on Class F Notes
WATERLOGIC GROUP: Moody's Assigns B2 CFR, Outlook Negative


                            *********



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A Z E R B A I J A N
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AZERBAIJAN: Legacy Effects of Oil Shock Affects Credit Profile
--------------------------------------------------------------
Moody's Investors Service says that Azerbaijan's (Ba2 stable) GDP
growth and fiscal revenue will benefit from higher oil prices, but
the legacy effects of the 2014-16 oil shock that significantly and
durably hit the government's fiscal strength will continue to
weigh on both factors.

In particular, the sharp depreciation in the country's currency
and high inflation, as well as tight fiscal and monetary policies,
continue to pressure the economy and the government's finances.

Moreover, the banking sector remains fragile and credit continues
to contract, which also weighs on growth.

Overall, Moody's forecasts that Azerbaijan's GDP growth will
register 1.5% in 2018, after averaging 0.2% during 2014-17.
Moody's also expects the fiscal balance to turn into a small
surplus of 1.0% of GDP in 2018 after three consecutive years of
deficits.

Moody's analysis is contained in its recently-released report
titled "Government of Azerbaijan: FAQ on impact of oil prices on
growth and public finances, and prospects for economic
diversification."

Moody's expects government debt, including guarantees, to remain
around 53% of GDP in 2018 - more than triple the levels seen in
2014.

Fiscal revenue remains weak, preventing a marked improvement in
fiscal metrics in the near term, although still-sizeable assets in
the sovereign wealth fund provide substantial support to fiscal
strength.

Limited prospects for diversification leave the sovereign
vulnerable to shifts in supply and demand for oil over the medium
term.

Moody's says that a set of "strategic road maps" approved in
December 2016 identified a number of key focus areas for
diversification away from hydrocarbons.

Moody's points out that progress has been more evident in tourism
and transport and logistics, but Azerbaijan's weak skill levels
and pervasive corruption will constrain the effectiveness of the
government's push for diversification. And, some of the
diversification projects' reliance on government incentives
indicates that the gains for fiscal revenue could also prove
limited.



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C R O A T I A
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AGROKOR DD: Seeks More Time to Reach Settlement with Creditors
--------------------------------------------------------------
bne IntelliNews reports that stricken Croatian food and retail
giant Agrokor plans to ask for three extra months to reach a
settlement with creditors, the group's extraordinary manager
Ante Ramljak told a parliamentary committee on Feb. 15.

The group, which came close to collapse in early 2017 after a run
on its bonds, is trying to restructure around EUR5.5 billion worth
of debt, bne IntelliNews relays.  In November, Agrokor accepted
creditor claims worth HRK41.2 billion (EUR5.4 billion) but
disputed other claims worth a total of HRK16.5 billion, bne
IntelliNews recounts.

An emergency law adopted last year sets April 10 as the deadline
to reach a final settlement with creditors, but there is the
possibility to secure a three-month extension, bne IntelliNews
notes.

Mr. Ramljak told the committee discussion with creditors on the
settlement are "moving forward", bne IntelliNews relates.
However, he added that Agrokor's management wanted to have a
permanent council of creditors in place to vote on the settlement
proposal, which for procedural reasons is not possible before the
April 10 deadline, according to bne IntelliNews.

The group's temporary creditors council endorsed a draft of a debt
settlement plan that includes a debt-for-equity swap and debt
write-offs on Dec. 20, bne IntelliNews discloses.  If adopted, the
plan will see a new holding set up, owned by Agrokor's creditors,
bne IntelliNews states.

Talks between the company's extraordinary management led by
Ramljak are ongoing, bne IntelliNews says.

                       About Agrokor DD

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

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

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

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

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

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



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D E N M A R K
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TDC A/S: Moody's Puts Ba2 Jr. Sub. Rating on Review for Downgrade
-----------------------------------------------------------------
Moody's Investors Service has placed TDC A/S's ("TDC" or "the
company") ratings on review for downgrade. TDC is Denmark's
largest telecommunications company.

The rating action follows the announcement that the company has
received a buyout offer for its entire share capital for an all-
cash consideration of DKK50.25 per share (approximately EUR5.4
billion) or around 8.0x 2017 EBITDA. The offer is subject to the
planned merger between TDC and MTG's Nordic Entertainment & Studio
Business, announced on February 1, 2018, not proceeding. While
there is no certainty that a transaction will occur, Moody's
believes that it is likely that the offer will be accepted, since
TDC's Board has recommended the offer to its shareholders.

RATINGS RATIONALE

TDC has received a takeover offer from DK Telekommunikation ApS, a
company controlled by a consortium of Danish pension funds (PFA,
PKA, ATP) and Macquarie Infrastructure and Real Assets. The
consortium plans to create a separately managed business unit
focused on developing and managing TDC's telecommunications
networks, such that TDC's entire fixed and mobile networks will be
open for use by all telecommunications brands and retailers.

The ratings review will focus on the potential ramifications for
TDC's financial and operating strategies as a result of the buyout
offer. At this point, there are significant uncertainties as to
the company's future capital and financial structure as well as to
how the group's strategy in developing its business going forward
will be affected.

The review could result in a downgrade into non-investment grade
territory, which could potentially be multi-notch, depending on
the financing structure put in place.

WHAT COULD CHANGE THE RATING UP / DOWN

Prior to the review process, Moody's had indicated that the rating
could come under positive pressure on evidence that the company
would achieve sustained improvements in its debt protection
ratios, such as adjusted RCF/gross debt above 20% and gross
adjusted debt/EBITDA trending to 2.5x, based on an improved
business environment.

Prior to the review process, Moody's had indicated that it would
consider downgrading TDC's rating if (1) the company were to
deviate from the execution of its new strategy, as evidenced by
deviation from a reported EBITDA of DKK8.3 billion for 2017; (2)
the company were to embark on an aggressive expansion/acquisition
program, most likely outside of its existing footprint, leading to
higher financial, business and execution risk; or (3) its credit
metrics were to deteriorate, including adjusted RCF/gross debt
falling to below 15% or adjusted gross debt/EBITDA trending
towards 3.5x on an ongoing basis.

LIST OF AFFECTED RATINGS

Issuer: TDC A/S

Placed On Review for Downgrade:

-- LT Issuer Rating, currently Baa3

-- Senior Unsecured Regular Bond/Debenture, currently Baa3

-- Junior Subordinate, currently Ba2

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

-- Junior Subordinate MTN Program, currently (P)Ba2

Outlook Actions:

-- Outlook, Changed To Rating Under Review From Stable

PRINCIPAL METHODOLOGY

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

TDC A/S, domiciled in Copenhagen, is the principal provider of
fixed-line, mobile, broadband data services and cable television
(CATV) offerings in Denmark. The company also provides telecoms
services, including TV, mobile and broadband, to customers in
Norway. In 2017, TDC generated revenues and EBITDA of DKK 20.3
billion and DKK 8.2 billion, respectively.



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F R A N C E
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ELIS SA: Fitch Assigns BB+ Rating to EUR3BB EMTN Programme
----------------------------------------------------------
Fitch Ratings has assigned a final senior unsecured rating of
'BB+' to Elis S.A's EUR3 billion EMTN programme.

The notes issued under the EUR3 billion EMTN programme will be
unsecured and guaranteed by M.A.J, the group's main operating
subsidiary, owning most of the other operating subsidiaries and
acting as head of the group's cash pooling structure (excluding
Berendsen). The issued notes will rank pari passu with all other
unsubordinated, unsecured indebtedness of the issuer and are
subject to a negative pledge (not including private debt). The
proceeds will be used for the repayment of some of the group's
outstanding debt, including the bridge loan used to partly finance
the acquisition of Berendsen, for general corporate purposes or
on-lent or made available to the guarantor.

Elis will not have any meaningful debt at the level of its
subsidiaries, eliminating the risk of structural subordination for
unsecured creditors of Elis SA.

The 'BB+' IDR reflects Elis's strong business profile following
the transformational acquisition of Berendsen, which improves the
group's scale, market position and diversification and will allow
for future cost and capex savings. Profitability is strong
relative to rated peers, but post-transaction leverage will remain
high and deleveraging will be contingent upon management's ability
to generate cost savings from the acquisition, as well as other
areas of the business. The high leverage reduces the headroom at
the current rating, and the lack of meaningful deleveraging could
put the ratings under pressure over the medium term.

KEY RATING DRIVERS

Stronger Business Profile: The acquisition of Berendsen by Elis,
which completed in September 2017, positions the group quite
strongly among its European business service peers, as a leader in
rental services of flat linen, work clothes, hygiene, and well-
being equipment in most of the markets in which it operates. The
combined group's business profile will benefit from a strengthened
market position, scale and both segment and geographic
diversification outside of its core French market. Overall, Fitch
view the group's business profile as commensurate with an
investment grade profile.

Resilient Income Base: Elis's rating reflects the high proportion
of contracted earnings and low churn rate. In their contractual
arrangements with the group, customers typically pay for a minimum
volume of services covering the initial investments. Elis builds
sustainable relationships with its customers, as illustrated by
multi-year contracts (the average length of its customer
relationship is eight years).

Service providers benefit from the ongoing trend for outsourcing
and workwear rental and laundry services, in particular given
increasingly stringent regulatory and safety requirements. The new
group's scale should also lead to improved quality, reliability
and pricing, which are key differentiators given the associated
reputation risk.

Stronger Diversification: Prior to the Berendsen acquisition, Elis
was highly oriented towards the French market, which generated 57%
of sales and about 75% of EBITDA. These numbers will now fall to
about 32% and 35%, respectively. This reduces the group's exposure
to the risk of individual economies slowing down. It also opens up
the potential for Elis to grow in other markets that are not
overly concentrated, providing good opportunities for organic
growth and bolt-on acquisitions.

The acquisition will also reduce Elis's exposure to the more
cyclical hospitality segment, which also brings an element of
seasonality, boosting its presence in workwear across different
segments, and healthcare.

Limited Leverage Headroom: Elis's rating is constrained by its
aggressive financial structure with FFO adjusted gross leverage at
about 5.6x in 2018. However, the rating assumes that it will
deleverage to below 5.0x thereafter. This level is considered high
for the current rating, compared with rated peers. As a result,
Elis's financial flexibility is very limited and should there be
no evidence of a steady deleveraging path within two years, the
ratings could come under pressure. Balancing this Fitch expect
that the group will be cash generative, which coupled with
improving profitability, should lead to sustained deleveraging
capacity. Management has stated that net debt/EBITDA (as
calculated by Elis) will be around 3.0x by FY18.

Moderate Integration Risks: Given the scale of the acquisition of
Berendsen, and the different operating environments in the UK and
Europe, Fitch believe that there could be some risks with the
potential cost savings, especially from the UK where Berendsen was
underperforming. However, Fitch expect that Elis should deliver at
least EUR40 million per year, and note that management has
recently increased its forecast for these.

It has a good track record of integrating acquisitions, albeit of
much smaller scale, and improving market positions in different
regions. These mainly relate to central costs and corporate
overheads, while the enlarged group should also see some economy
of scale benefits. Fitch have also included some smaller cost
savings following the acquisitions of Lavebras and Indusal in
2017.

Good FCF Generating Ability: Fitch expect the group will be able
to generate strong and improving FCF as a result of improving
profitability, coupled with lower capex. Fitch forecast that
industrial capex will be somewhat higher in 2018 and 2019 driven
by the acquisition but that it will settle at about 6.5% of sales
(excluding purchase of linen) from 2020. After considering some
further outflows for annual bolt on acquisitions, Fitch expect
that the group will continue to generate cash, which should allow
for some level of gross debt reduction in the medium term.

DERIVATION SUMMARY

Elis is one of the leading providers of flat linen globally.
Following its acquisition of Berendsen in 2017, the group
solidified its market position in Europe, while it also has
growing operations in Latin America. Similar to business services
peer Elior (BB/Stable), Fitch consider that the group has many
characteristics that are commensurate with an investment grade
profile. However, the business profiles of both entities are not
as strong as Compass Group plc (A-/Stable) and Sodexo S.A
(BBB+/Stable), which provide contract catering services globally,
and also have stronger financial profiles.

S&P views Elior and Elis's financial profiles as comparable, with
slightly higher leverage for Elis but also higher profitability
and significantly higher FFO fixed charge coverage. Fitch view
diversification as the main differentiating characteristic between
Elis and Elior. Elior has a larger concentration in France. This
factor has improved considerably after completing the Berendsen
acquisition.

KEY ASSUMPTIONS

Fitch's Key Assumptions Within Fitch Rating Case for the Issuer

- Organic growth of roughly 2% per year complemented with some
   small size bolt-on acquisitions
- EBITDA margins (after reclassification of linen investments as
   operating costs) improving to over 21% by 2019
- Slight annual working capital outflows
- Slightly higher capex (excluding linen investments) in 2018
   and 2019 following the Berendsen acquisition before
   stabilising from 2020
- Small annual increases in dividends in line with increased
   amount of shares and driven by improved profitability
- Some annual outflows (EUR70 million) considered for bolt-on
   acquisitions
- Some early debt repayments such that the year-end cash balance
   remains stable

RATING SENSITIVITIES

Developments That May, Individually or Collectively, Lead to
Positive Rating Action

- Successful integration of Berendsen and realisation of
   synergies leading to improved operating performance and
   resulting in FFO adjusted gross leverage falling to below 4.0x
   or FFO adjusted net leverage below 3.5x on a sustained basis,
   coupled with:
- FFO fixed charge coverage remaining above 4.0x on a sustained
   basis
- FCF margin above 5% on a sustained basis

Developments That May, Individually or Collectively, Lead to
Negative Rating Action

- Lack of visibility related to FFO adjusted gross leverage
   falling to 5.0x or FFO adjusted net leverage falling to 4.5x
   over the rating horizon, possibly as a result of lower than
   expected cost savings following the acquisition or weak
   organic growth
- Weak FCF margin below 2% as a result of operational weakness,
   other unexpected cash outflows or sustainably increased
   dividends

LIQUIDITY

Good Liquidity: Following issuance of the planned new notes
effectively refinancing the 2017 Bridge Facility, there will be no
material maturity until 2022, when the EUR800 million unsecured
notes and senior credit facilities come due for repayment. Fitch
expect that the group will maintain a year-end cash balance of
around EUR250 million per annum, while the group's liquidity is
backed up by two undrawn revolving credit facilities totalling
EUR900 million (EUR400 million is used as a back-up for commercial
paper).



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G E R M A N Y
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KME AG: Fitch Assigns Final 'B-' Issuer Default Rating
------------------------------------------------------
Fitch Ratings has assigned KME AG a final Issuer Default Rating
(IDR) of 'B-'. The Outlook is Stable. Fitch has also assigned a
final rating of 'B' with a Recovery Rating of 'RR3' (65%) to KME's
new EUR300 million senior secured notes. KME is a German-based
processor and manufacturer of copper and copper-alloy products for
various industrial end-markets.

The final rating follows the receipt of documents conforming to
information already received and is in line with the expected
rating published on Jan. 30, 2018.

KME's 'B-' rating is constrained by the group's high leverage
compared with peers, weak free cash-flow (FCF) generation and low,
but improving margins. The rating also reflects the group's
leading positions in the copper-processing industry, aided by a
diversified geographic footprint, the group's large-scale
operations and improving profitability on the back of a
restructuring programme.

The rating of the notes takes into account their equal ranking
with the group's borrowing base facility (BBF) and factoring lines
in right of payment, and the effective subordination of the
collateral securing those facilities. However, Fitch understands
from the management that the security package for each facility is
different, and that the noteholders will be given first-priority
payments on KME's Osnabruck property. Hence, Fitch has based its
recovery analysis on the value of this real estate.

KEY RATING DRIVERS

Rating Constrained by Leverage: Fitch views KME's financial
leverage as high and a rating constraint, with an estimated funds
from operations (FFO) adjusted gross leverage of around 7.2x in
2018, pro forma for the recent refinancing. De-leveraging
prospects are moderate, with FFO adjusted gross leverage remaining
broadly flat over 2017-2020. KME's FFO fixed charge cover is
expected to be in a range of 1.6x to 2.0x over 2017-2020. High
financial leverage represents a key constraint on the IDR, and
results in tight headroom under the 'B-' rating. Any
underperformance against Fitch's rating case would lead to
negative rating action.

Successful Refinancing: The refinancing has smoothed KME's debt
repayment profile and improved the group's liquidity. New mid-term
funding in the shape of the EUR300 million senior secured notes
matures in 2023. At the same time, the refinancing renewed the
factoring lines (Factorance and Mediocredito) and BBF, to be fully
utilised by letters of credit, for three years. A newly arranged
EUR30 million shareholder working capital facility line, which was
undrawn at closing, further supports the group's liquidity
profile.

Improving Margins: Fitch views as credit-positive the renewed
focus of KME on streamlining its operations, cost-cutting and
performance, with major restructuring initiatives completed over
the last two years. As a result, Fitch estimates an operating
EBITDA margin for 2017 of close to 4%, compared with roughly 2%
and 0% in 2016 and 2015, respectively. Fitch conservatively
forecasts further minor margin improvement on the back of
continuing efficiency gains and a favourable product mix.

Low FCF: Fitch projects that KME's FCF margins will remain in the
low single digits over the medium term. Such FCF margins are in
line with low non-investment grade credit risk and do not pose a
threat to KME's credit quality, as long as the group's underlying
commercial performance remains healthy and trade working capital
does not drain cash.

Diversified Customer Base: KME sells to approximately 4,700
customers across around 70 countries with a primary focus on
Europe, which accounted for around 90% of 2016 revenue. Customer
concentration is low, with the group's top 50 clients accounting
for roughly 21% of revenue. A short-dated contract portfolio (the
majority of contracts have one-year duration) limits visibility on
both revenue and cash flow. However, this is mitigated by KME's
track record of maintaining long-term customer relationships,
ranging up to 20 years with some large blue-chip clients.

Effective Cost Pass-Through: KME has only minimal exposure to
volatility in copper prices, which Fitch view as credit-positive,
so the group can fully focus on the underlying economics of its
transformation business, reflected in the fabrication cost mark-up
charged to end-customers. KME uses a contractual pass-through
("back-to-back" pricing) for essentially all of its contracts.
Under a back-to-back pricing agreement, customers pay the same
copper price KME pays to its suppliers plus a customary LME mark-
up, which covers transportation and interest costs.

Established Player: KME is an established player in the copper and
copper-alloy processing industry with a history dating back to
1886. The processing of the majority of copper and brass products
is highly commoditised, reflecting low barriers of entry. In
contrast, engineered products generate a higher margin, due to
higher technological content and a more complex manufacturing
process, creating moderate entry barriers.

Strategic Portfolio Realignments: Fitch takes a positive credit
view of KME's rebalancing towards higher value-added products,
following the sale of the UK copper plumbing unit in 2014 and
expansion in the US through the acquisition of a marine
application business, increasing the group's spectrum in higher-
margin special products. This rebalancing should support the
business model's sustainability over 2017-2020.

DERIVATION SUMMARY

KME is positioned competitively, benefiting from healthy market
shares in all its segments. Compared with direct peer Global Brass
and Copper, KME has weaker margins and is more highly leveraged.
Aluminium-processing peer Constellium is somewhat larger, and has
stronger EBITDA margins given its higher value-added product
portfolio for aerospace/automotive end-markets. At the same time,
KME has stronger FCF, driven by lower capex requirements, and is
on a par in terms of fixed charge coverage and FFO adjusted gross
leverage. When benchmarked against a broader portfolio of
diversified industrial peers, KME's metrics, in particular FFO
adjusted gross leverage (around 7.2x) and FFO fixed charge
coverage (around 2.0x), are largely in line with 'B-' rated
peers'.

KEY ASSUMPTIONS

Fitch's Key Assumptions within Fitch Rating Case for the Issuer

- New capital structure comprising a EUR300 million senior
   secured notes, a EUR350 million borrowing base facility (BBF,
   to be fully utilised by letters of credit), and a EUR30
   million shareholder working capital facility line (undrawn at
   closing)
- Revenue to grow in the low single digits, against the
   background of a broadly flat copper price assumption
- EBITDA margin of around 4% in 2017 with slight increase over
   2017-2020
- No dividends during 2017-2020
- Fitch's recovery analysis takes into account the specific
   security package for the senior secured notes, comprising
   first-priority security interests over i) land charges
   encumbering the property at the Osnabruck production site, and
   ii) machines and equipment at the same location
- Recovery values are derived using the liquidation value of
   assets, yielding a higher claim for distribution

RATING SENSITIVITIES

Developments that May, Individually or Collectively, Lead to
Positive Rating Action

- FFO adjusted gross leverage sustainably below 6.0x
- FFO fixed charge coverage sustainably above 2.0x
- Operating EBITDA margin maintained at above 4%
- Growth in production output of engineered products

Developments that May, Individually or Collectively, Lead to
Negative Rating Action

- FFO adjusted gross leverage in excess of 8x
- FFO fixed charge coverage less than 1.5x
- EBITDA margin trending towards low single digits

LIQUIDITY

Pro Forma Liquidity Satisfactory: Pro forma for the closed
refinancing, Fitch views KME's liquidity profile as satisfactory.
This is based on pro forma cash on balance sheet of EUR47 million
and access to a committed EUR350 million BBF, which will be fully
utilised for outstanding letters of credit. In addition, KME has
access to an undrawn EUR30 million shareholder working capital
facility line.


SIEMENS BANK: Moody's Hikes Standalone Credit Profile to Ba1
------------------------------------------------------------
Moody's Investors Service has affirmed Siemens Bank GmbH's
(Siemens Bank) A1 long-term and P-1 short-term issuer ratings and
upgraded its standalone credit profile to Ba1 from Ba2. The
outlook on the bank's long-term issuer ratings is stable. Siemens
Bank's ratings benefit from the rating agency's unchanged
assessment of a strong support from its parent and sole owner,
Siemens Aktiengesellschaft (Siemens, A1 stable).

RATINGS RATIONALE

UPGRADE OF STANDALONE CREDIT PROFILE

The upgrade of Siemens Bank's standalone credit profile by one
notch to Ba1 from Ba2 reflects the establishment of (1) a robust
track record in developing the bank from a cash-focused entity
into a lending-focused institution, which supports the financing
of its parent's products for Siemens customers, thereby
underpinning its strategic importance for the group; and (2) a
sustained sound financial profile during the past years.

Siemens Bank's gross loans increased from EUR3.1 billion at end-
September 2013 to EUR5.4 billion at end-September 2017, a sizeable
increase which better allows the Munich-based bank to successfully
operate as a captive finance entity in the EMEA and APAC regions.
Moody's believes the bank's prudent risk management and stringent
underwriting criteria have not led to a material adverse change in
concentration risks as well as geographic and industry exposures
during this period of extraordinary growth. Siemens Bank's lending
activities focus on providing financing to Siemens' customers for
energy finance, infrastructure, industry and healthcare projects.

Moody's assessment also takes into account Siemens Bank's
unchanged strong capitalisation and asset quality. Based on EUR1.0
billion equity as of end-September 2017, the bank's Common Equity
Tier 1 capital ratio was 19.0%, compared with 21.6% at end-
September 2016. The moderate reduction reflects higher risk-
weighted assets because of the bank's continued business
expansion. Siemens Bank's problem loans as a percentage of gross
loans decreased to 0.2% at end-September 2017 compared with 2.8%
at end-September 2016, based on Moody's calculations. During 2017,
Siemens Bank benefited from the benign environment it operates in,
mainly the EMEA and APAC regions, as well as active risk
management, which helped to further improve its asset quality.

Siemens Bank's credit profile remains constrained by its status as
a captive finance company, as well as its limited independent
funding franchise. Siemens Bank's funding remains highly reliant
on its parent resources which provided around 88% of total
liabilities at end-September 2017. This support is reflected in
Siemens Bank's long-term issuer ratings, which incorporates a
strong support assumption, while at the same time the absence of
an independent funding franchise represents a ratings constraint
for Siemens Bank's standalone credit profile. The rating agency
further sees some risks imbedded in the bank's strong lending
growth, including exposure to the construction phase of projects
financed, another constraining consideration.

AFFIRMATION OF THE LONG-TERM ISSUER RATINGS

The affirmation of Siemens Bank's A1 issuer ratings reflect the
upgrade of its standalone credit profile and Moody's unchanged
assessment of a strong support for Siemens Bank from Siemens,
which leads to six notches of rating uplift.

Siemens Bank's ratings reflect the bank's close integration in
Siemens group, underpinned by (1) its close financial links to
Siemens and its operations; (2) its high integration into Siemens'
financial activities, which are coordinated by Siemens Financial
Services (SFS) division; (3) its strong association with the
parent as reflected by the usage of the Siemens brand; and (4) a
profit and loss transfer agreement between Siemens and Siemens
Bank. The bank's ratings also benefit from a track record of
capital measures, illustrating Siemens' commitment to support the
bank's growth and consider full ownership of the bank by Siemens.

WHAT COULD CHANGE THE RATING UP/DOWN

Upwards pressure on Siemens Bank's ratings would develop if the
credit profile of its parent Siemens were to strengthen, which
Moody's does not currently expect as indicated by the stable
outlook on Siemens' A1 rating. An upgrade of Siemens Bank
standalone credit profile would require a significant improvement
of its franchise and risk position, such as establishing a
diversified funding profile, a more mature and more balanced
lending book, combined with improved financials, and developing
its own funding franchise.

Siemens Bank's rating would come under downwards pressure if
Siemens' credit profile were to weaken. The bank could be rated
lower than the parent if (1) its standalone credit profile
weakens; (2) it pursues business objectives that are not fully
aligned with its parent; and/or (3) parental support was to
deteriorate as a result of weaker and/or shorter-dated contractual
obligations, in particular the profit- and loss-sharing agreement.

LIST OF AFFECTED RATINGS

Affirmations:

-- LT Issuer Rating (Local & Foreign Currency), Affirmed at A1,
    Outlook remains Stable

-- ST Issuer Rating (Local & Foreign Currency), Affirmed at P-1

Outlook Action:

-- Outlook, Remains Stable

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Finance
Companies published in December 2016.


* GERMANY: Corporate Insolvencies Hit Record Low in 2017
--------------------------------------------------------
According to Xinhua News Agency, a report published on Feb. 15 by
the commercial credit rating agency CRIF Buergel finds that the
number of German corporate insolvencies has fallen to a record low
in 2017.

Only 20,276 German firms were forced to declare insolvency last
year, Xinhua relays, citing CRIF Buergel.

This marked a decline of 6.9% to the lowest ever level recorded
since the implementation of current bankruptcy regulations in
1999, Xinhua notes.  The number of insolvencies in Germany has now
declined for eight consecutive years and nearly halved compared to
the statistical high point of 39,320 insolvencies in 2003, Xinhua
discloses.

"Companies are benefiting from stable economic momentum, favorable
financing conditions and once again strong exports," Xinhua quotes
a statement by Ingrid Riehl, director of CRIF Buergel as saying.
Ms. Riehl added that rising wages and purchasing power in Germany
had also had a "positive effect."

However, CRIF Buergel warned that the long-standing positive trend
could reverse in 2018, according to Xinhua.  A slight increase in
insolvencies was not improbable given an increase in companies
with weak finances, Xinhua states.

Most of the firms which had to declare insolvency in 2017 were
small and had failed to establish themselves in their respective
markets, Xinhua says.  About 81% of the corporate entities
affected had less than five employees and half of them were less
than 10 years old, Xinhua notes.  Around 15% of bankrupt firms
already collapsed in the first two years following their founding,
according to Xinhua.

In relation to the number of registered companies, Berlin recorded
the highest number of insolvencies with 92 out of 10,000 firms on
average, Xinhua relays.  The lowest number of bankruptcy
declarations were made in Bavaria, which was 43 out of 10,000
firms on average, Xinhua discloses.



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


* GREECE: Won't Backtrack on Privatization Plan After Bailout
-------------------------------------------------------------
Reuters reports that Rania Ekaterinari, the head of the head of
Greece's state assets fund said, the country won't backtrack on
its privatization plan after its bailout ends and expects state
companies to submit plans by April to make themselves more
competitive.

Greece, whose bailout ends in August, has agreed with lenders to
raise another EUR3 billion (GBP2.63 billion) by 2019 from state
asset sales and has promised to launch stake sales in Athens
International Airport (AIA), gas company DEPA and oil refiner
Hellenic Petroleum by next month, Reuters relates.

Privatizations have been a pillar of the country's three bailouts
since 2010, when its debt crisis exploded, Reuters notes.  But
they have raised proceeds of just EUR5 billion, rather than a
targeted EUR50 billion, mainly due to the crisis, political and
union resistance and bureaucracy, Reuters states.

Ms. Ekaterinari told Reuters that Greece is committed to pushing
ahead with privatizations, which have been agreed with lenders.

Ms. Ekaterinari took over a year ago as CEO of the Hellenic
Corporation of Assets and Participations (HCAP), set up in 2016 as
part of a bailout that kept Greece in the euro zone, Reuters
recounts.  It oversees the agency in charge of state asset sales,
HRADF, Reuters discloses.

Creating HCAP, which will manage state assets for 99 years, was
seen by many Greeks as a major concession by the government to its
lenders in 2015, when the country signed up to its third bailout,
and a strike against its sovereignty, Reuters relays.



=============
H U N G A R Y
=============


BUDA-CASH: Liquidator Gets Favorable Ruling in Saxo Bank Case
-------------------------------------------------------------
MTI-ECONEWS reports that the liquidator of failed independent
brokerage Buda-Cash Brokerhaz won a case against Saxo Bank in the
Budapest Municipal Court on Feb. 16.

According to MTI-ECONEWS, the court ruled Saxo Bank must pay Buda-
Cash's liquidator HUF1.17 billion and EUR2.5 million, with
interest.  Saxo Bank must also return securities to the plaintiff,
MTI-ECONEWS discloses.

The ruling may be appealed, MTI-ECONEWS notes.

Buda-Cash Brokerhaz is based in Hungary.



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


BANCO BPM: DBRS Changes Trend on BB Notes Rating to Negative
------------------------------------------------------------
DBRS Ratings Limited confirmed the ratings of Banco BPM SpA (Banco
BPM or the Group), including the Long-Term Issuer Rating of BBB
(low), and the Short-Term Issuer rating of R-2 (middle). The trend
on all the ratings was revised to Negative from Stable.
Concurrently DBRS maintained the Group's Intrinsic Assessment (IA)
at BBB (low) and the Support Assessment at SA3. As part of this
rating action, DBRS also confirmed the BBB (low) / R-2 (middle)
Issuer ratings of Banca Akros, the corporate and investment
banking subsidiary of Banco BPM SpA, and also changed the trend to
Negative. Banca Akros is a core component of Banco BPM's franchise
and, therefore, DBRS has maintained a support assessment of SA1 on
Banca Akros which implies strong and predictable support from the
Parent. As a result, the ratings of Banco Akros are at the same
level as the Group. These rating actions follow DBRS's annual
review of the Group's credit profile.

The confirmation of the ratings takes into consideration the
Group's progress in executing its 2016-2019 Strategic Plan,
notably IT migration, business re-organisation and simplification,
as well as a reduction in the level of non-performing loans
(NPLs). However, the trend has been changed to Negative,
reflecting the still very large stock of NPLs and the challenges
the Group will likely face to further accelerate the reduction of
this portfolio. DBRS expects Banco BPM to take additional actions
to improve its asset quality, in light of the increasing pressure
from both market participants and regulators. Any further
improvement in asset quality would be viewed positively by DBRS.
However, the acceleration of NPL reduction will likely add
pressure to the Group's financial position. This view takes into
consideration the Group's modest earnings profile and the gap
between its coverage levels and market values for NPLs in Italy.
At September 2017, the Group reported a total NPL coverage ratio
of 49% and a total coverage ratio for bad debts of 60%, which are
below the peers' average. The lower provisioning levels, however,
reflect the Bank's higher portion of loans backed by real estate
collateral.

The Group is currently undertaking measures to improve its asset
quality, as part of the merger plan which sets a target to reduce
NPLs as a percentage of gross loans of 17.9% (nominal) at end-
2019. This target has been recently revised downward to 16.1% to
reflect improved expectations on recoveries and inflows. The
Group's stock of NPLs was reduced to EUR 27.5 billion at end-
September 2017, or 22.6% of gross loans, from EUR 31.1 billion
(nominal) at end-2016, as a result of a combination of disposals
and internal workout measures. During the first nine months of
2017, Banco BPM sold NPLs for a total gross book value of EUR 1.3
billion and is expected to complete a transaction of around EUR 2
billion in unsecured bad loans in 4Q17. The Group is also planning
to undertake an NPL securitisation for around EUR 3.5 billion in
1H18. DBRS also notes that the Group registered an improvement in
collections and lower NPL inflows during 9M17.

Banco BPM's underlying profitability remains generally modest, due
to compressed margins and the still high cost of risk, which were
only partially mitigated by lower funding costs and growing fees
from wealth management. The Group is making progress in improving
efficiency supported by its restructuring actions. In 2017, Banco
BPM completed the IT integration of the merged banks, and
streamlined their combined network with the reduction of around
700 in headcount and around 50 branch closures. Further synergies
are expected from the ongoing integration process, including the
re-organisation of the corporate and investment banking activities
and private banking business of Banca Akros and Banca Aletti.
Furthermore, in 2017, the Group entered into new partnership
agreements in bancassurance.

At 9M17, the Group reported a CET1 ratio, on a phased-in basis, of
11.01% (or 10.32% fully loaded) and a total capital ratio of
13.86%. On a pro-forma basis, including the benefits from the
disposal of Aletti Gestielle and the reorganization of the
bancassurance business, the Group's CET1 ratio would have been
higher at 12.82% (or 12.49% fully loaded). Additional capital
management actions are expected in the coming quarters, including
the application of AIRB models to the former BPM's credit
portfolio. These actions should provide some flexibility to
improve asset quality and deal with the evolving regulatory
environment.

RATING DRIVERS

A significant improvement in asset quality supported by adequate
capital buffers and improved earnings could lead to the trend
returning to Stable. Conversely, negative rating implications
could arise if there is a material deterioration in the Group's
capital position or if the Group struggles to achieve material
reductions in its NPLs stock.

The Grid Summary Grades for Banco BPM SpA are as follows:

Franchise Strength ? Good;
Earnings ? Moderate/Weak;
Risk Profile ? Weak;
Funding & Liquidity ? Good;
Capitalisation ? Moderate/Weak.

Notes: All figures are in Euros unless otherwise noted.

Banco BPM SpA

Debt Rated                Action        Rating        Trend
----------                ------        ------        -----
Long-Term Issuer Rating   Trend Change  BBB(low)      Neg
Long-Term Senior Debt    Trend Change  BBB(low)      Neg
Short-Term Debt           Trend Change  R-2 (middle)  Neg
Long-Term Critical
  Obligations Rating       Trend Change  BBB(high)     Neg
Short-Term Critical
  Obligations Rating       Trend Change  R-1(low)      Neg
Senior Notes
(ISIN XS1024830819)       Trend Change  BBB (low) Neg
Mandatory Pay
  Subordinated Debt
(ISIN XS0597182665)       Trend Change  BB            Neg
Perpetual Subordinated
  Notes
  (ISIN XS0372300227)      Trend Change  B             Neg
Long-Term Deposits        Trend Change  BBB (low)     Neg
Short-Term Deposits    Trend Change  R-2 (middle) Neg
Short-Term Issuer Rating  Trend Change  R-2 (middle) Neg
Long-Term Senior Debt
  - EUR25 billion EMTN
    Programme              Trend Change  BBB (low)     Neg
Short-Term Debt -
  EUR25 billion EMTN
  Programme                Trend Change  R-2 (middle)  Neg
Mandatory Pay
  Subordinated Debt
  (ISIN XS1686880599)      Trend Change  BB            Neg

Banca Akros SpA

Debt Rated                Action        Rating        Trend
----------                ------        ------        -----
Long-Term Issuer Rating   Trend Change   BBB(low)      Neg
Long-Term Issuer Rating   Trend Change   BBB (low)     Neg
Short-Term Issuer Rating  Trend Change   R-2 (middle)  Neg
Long- Term Deposits       Trend Change   BBB (low)     Neg
Short-Term Deposits       Trend Change   R-2 (middle)  Neg
Long-Term Senior Debt     Trend Change   BBB (low)     Neg
Short-Term Debt           Trend Change   R-2 (middle)  Neg


FINO 1: Payment Amendments No Impact on DBRS BB Notes Ratings
-------------------------------------------------------------
DBRS Ratings Limited acknowledges the execution of an amendment to
the Purchase Agreement and to the Terms and Conditions, which
includes changes to the Pre-Enforcement Priority of Payments and
to the Post-Enforcement Priority of Payments set out in the Terms
and Conditions under the following notes issued by Fino 1
Securitisation S.r.l. (the Issuer):

-- EUR650,000,000 Class A Notes at BBB(high)(sf) (IT0005277311)
-- EUR29,640,000 Class B Notes at BB(high)(sf) (IT0005277337)
-- EUR40,000,000 Class C Notes at BB(sf) (IT0005277345)

The order of priority of certain senior items in the Pre-
Enforcement Priority of Payments and to the Post-Enforcement
Priority of Payments will be amended as follows:

(1) Pay on a pro rata basis: a) Senior Special Servicing Fee
     (other than Junior Special Servicing Fees) and any fee which
     was not paid to the Special Servicer during the previous two
     years as a result of the occurrence of a Special Servicing
     Fee Subordination Event; b) Tax and Expenses; c) Master
     Servicing Fee.

(2) Replenish on a pro rata basis the General Expenses Account
     and the Servicing Expenses Account (through collections).

(3) Pay the upfront costs on the first interest payment date and
     the ongoing costs on the following interest payment dates
     (through collections).
(4) Pay the Portfolio Monitoring Agent Fee.

The order of priority of all other items in the Pre-Enforcement
Priority of Payments and the Post-Enforcement Priority of
Payments, with the exclusion of the items above, as well as any
other structural elements remain unchanged.

The transaction documents amendments in itself will not result in
a change or withdrawal of the current BBB (high) (sf) ratings on
the Class A Notes, the current BB (high) (sf) ratings on the Class
B Notes and the current BB (sf) ratings on the Class C Notes (the
Notes).



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


ARES EUROPEAN IX: S&P Assigns B-(sf) Rating to Class F Notes
------------------------------------------------------------
S&P Global Ratings assigned its preliminary credit ratings to Ares
European CLO IX B.V.'s class A, B-1, B-2, C, D, E, and F notes. At
closing, the issuer will also issue unrated subordinated notes.

Ares European CLO IX is a European cash flow collateralized loan
obligation (CLO), securitizing a portfolio of primarily senior
secured euro-denominated leveraged loans and bonds mainly issued
by European borrowers. Ares European Loan Management LLP is the
collateral manager.

The preliminary ratings assigned to the notes reflect S&P's
assessment of:

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

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

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

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

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

S&P said, "Our preliminary ratings reflect our assessment of the
preliminary collateral portfolio's credit quality, which has a
weighted-average 'B' rating. We consider that the portfolio at
closing will be well-diversified, primarily comprising broadly
syndicated speculative-grade senior secured term loans and senior
secured bonds. Therefore, we have conducted our credit and cash
flow analysis by applying our criteria for corporate cash flow
collateralized debt obligations.

"In our cash flow analysis, we used the EUR400 million target par
amount, the covenanted weighted-average spread (3.42%), the
reference weighted-average coupon (4.50%), and the target minimum
weighted-average recovery rate at the 'AAA' rating level as
indicated by the collateral manager. We applied various cash flow
stress scenarios, using four different default patterns, in
conjunction with different interest rate stress scenarios for each
liability rating category."

Citibank N.A. London Branch is the bank account provider and
custodian. At closing, we anticipate that the documented downgrade
remedies will be in line with our current counterparty criteria.

S&P said, "Under our structured finance ratings above the
sovereign criteria, we consider that the transaction's exposure to
country risk is sufficiently mitigated at the assigned preliminary
rating levels. At closing, we consider that the issuer will be
bankruptcy remote, in accordance with our legal criteria.

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

  RATINGS LIST

  Preliminary Ratings Assigned

  Ares European CLO IX B.B.
  Senior Secured Fixed- And Floating-Rate Notes
  (Including Unrated Subordinated Notes)

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

  A              AAA (sf)          228.00
  B-1            AA (sf)            29.80
  B-2            AA (sf)            30.00
  C              A (sf)             26.80
  D              BBB (sf)           22.40
  E              BB (sf)            23.10
  F              B- (sf)            11.10
  Sub.           NR                 42.50

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



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


MCC EUROCHEM: Fitch Affirms & Then Withdraws BB Long-term IDR
-------------------------------------------------------------
Fitch Ratings has affirmed Russia-based JSC MCC EuroChem's Long-
Term Issuer Default Rating (IDR) at 'BB' with a Negative Outlook,
and simultaneously withdrawn it.

Fitch has chosen to withdraw the ratings of JSC MCC EuroChem for
commercial reasons. It will no longer provide ratings or
analytical coverage for the company.

The Long-Term IDR of JSC MCC EuroChem's parent company, EuroChem
Group AG (EuroChem), of 'BB' with Negative Outlook is unaffected
by the withdrawal.

KEY RATING DRIVERS

The Negative Outlook: The Outlook reflects Fitch expectations that
EuroChem's leverage will peak at around 5x in 2018, well above
Fitch's negative rating guidelines. This is driven by a prolonged
supply-driven weakness in fertilisers, coupled with the group's
significant potash and ammonia capex. Fitch sees leverage falling
after 2018 once capex moderates and projects ramp up, but the
current metrics offer limited headroom for further unexpected
pressure on cash flows.

Markets, Capex Pressure Ratings: Weak fertiliser markets and
EuroChem's commitment to the two potash and one ammonia project
will lead funds from operations net adjusted leverage (leverage)
towards 5x in 2018 (end-2016: 4.0x). The projects aim to commence
operations and start generating operational cash flow from 2018,
and represent almost 70% of the group's 2017-2018 capex, limiting
moderate capex flexibility until 2019. Fitch consolidate project
financing for EuroChem's Baltic ammonia and Usolskiy potash
projects despite some non-recourse features due to the projects'
strategic importance to EuroChem and the cross-default clauses in
the financing agreements.

Potash Projects Near Completion: EuroChem expects the Usolskiy and
VolgaKaliy potash projects to deliver their first potash in 2018.
Both projects have two fully operational shafts with largely on-
surface capex remaining. The ramp-up is typically prolonged for
potash operations and is planned to reach almost half of 4.6mt
incombined first-phase capacity in 2019 and full capacity from
2021. Fitch expect the projects to be in the first quartile of the
global potash cost curve and to add USD400 million-USD500 million
of EBITDA, or almost half of 2017's estimated EBITDA, from 2021.
They will enhance EuroChem's global scale, integration into
nutrients and overall cost position.

Covenants Headroom Manageable: EuroChem's 3.5x leverage covenant
excludes project finance debt (end-3Q17: USD862 million) and Fitch
expect it to remain below 3x until end-2018, which provides it
with manageable covenant headroom. A shareholder loan with a
USD1.5 billion limit (USD250 million utilised so far) could be
used to reduce the risk of a breach of covenant if needed during
2018.

Pressure on Prices until 2018: Fitch conservatively assume a low
single-digit reduction in fertiliser prices in 2018 on continued
capacity additions across all three major nutrients (nitrogen,
phosphates and potash) from 2H17 temporary highs. Fitch forecast
protracted weakness in potash prices beyond 2018 as EuroChem and
K+S ramp up their new capacity, of which the first phases
represent over 6 million tonnes, or almost 10% of current potash
consumption. For other nutrients, Fitch expect a modest low
single-digit recovery in prices after 2018 as the supply/demand
gap narrows.

Strong Business Fundamentals: EuroChem has a strong presence in
European and CIS fertiliser markets (almost 60% of 2016 sales)
with around 20% share of premium fertiliser sales. It is the
seventh-largest EMEA fertiliser company by total nutrient
capacity. The group also has access to the premium European
compound fertiliser market, with production in Antwerp,
trademarks, and third-party sales (25% of sales) distributed
through its own network. EuroChem's Russia-based phosphate and
nitrogen production assets are comfortably placed in the first and
second quartiles of the respective global cost curves, although
profitability was reduced by the stronger rouble.

DERIVATION SUMMARY

JSC MCC EuroChem's 'BB' rating is equalised with the rating of
Swiss-based parent company EuroChem, in line with Fitch's Parent
and Subsidiary Rating Linkage (August 2016). This is based on the
companies' comparable credit profile as JSC MCC EuroChem accounts
for over 70% of the group's EBITDA and is exposed (directly or
through guarantees) to 70%-80% of the group's debt.

FULL LIST OF RATING ACTIONS

JSC MCC EuroChem

- Long-Term Foreign- and Local-Currency IDRs: Affirmed at 'BB'
   with Outlook Negative; withdrawn

- Short-Term Foreign-Currency IDR: affirmed at 'B'; withdrawn

- Local-currency senior unsecured rating on domestic bond issues:
   affirmed at 'BB'; withdrawn



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


CAJA GRANADA 1: Fitch Affirms CCsf Ratings on 2 Tranches
--------------------------------------------------------
Fitch Ratings has upgraded three tranches of AyT CGH Caja Granada
(CGH Granada), one tranche of AyT Caja Granada Hipotecario 1
(Granada 1), affirmed the others and removed the Rating Watch
Evolving (RWE):

Granada 1:

Class A notes (ISIN ES0312212006): upgraded to 'A+sf' from 'Asf';
off RWE; Outlook Stable
Class B notes (ISIN ES0312212014): affirmed at 'CCCsf'; off RWE;
Recovery Estimates (RE) revised to 100% from 90%
Class C notes (ISIN ES0312212022): affirmed at 'CCsf'; off RWE; RE
revised to 60% from 0%
Class D notes (ISIN ES0312212030): affirmed at 'CCsf'; off RWE; RE
0%

CGH Granada:

Class A notes (ISIN ES0312273164): upgraded to 'A+sf' from 'A-sf';
off RWE; Outlook Stable
Class B notes (ISIN ES0312273172): upgraded to 'A+sf' from
'BB+sf'; off RWE; Outlook Stable
Class C notes (ISIN ES0312273180): upgraded to 'BB+sf' from
'CCCsf'; off RWE; Outlook Stable
Class D notes (ISIN ES0312273198): affirmed at 'CCsf'; off RWE; RE
revised to 40% from 0%

The transactions comprise prime Spanish residential mortgage loans
serviced by Bankia (BBB-/Stable/F3) originally issued in 2007 and
2008.

KEY RATING DRIVERS

Disparate Asset Performance
Granada 1 has shown weak performance since closing compared with
Fitch-rated Spanish RMBS while CGH Granada has tended to perform
better. The level of cumulative defaults relative to the original
portfolio balance are 7.4% and 3.9%, respectively, compared with a
sector average of 5.9%. However, the performance in terms of
arrears improves, with three-months plus arrears (excluding
defaults) as a percentage of the current pool balance standing at
1.6% and 1.4%, respectively, as of November 2017 compared with
4.1% and 1.7% in November 2016.

Credit Enhancement (CE) Trends
Fitch expects CE for Granada 1 and CGH Granada's senior notes to
increase as both transactions are currently paying sequentially.
Due to three-months plus arrears levels above the triggers
specified for each transaction and reserve funds not being at
their target levels, Fitch does not expect a switch to pro-rata in
the near future. Fitch considers the existing and projected CE as
sufficient to support the ratings, as reflected in the rating
actions. Fitch expects CE for both transactions to increase,
especially for the senior notes. However, the transactions feature
outstanding principal deficiency ledgers (defaults which have not
been cured by the excess spread), impacting the mezzanine and
junior tranches.

Counterparty Exposure
Both transactions have dedicated cash reserves aimed at mitigating
payment interruption risk for the senior notes in the event of
servicer disruption. Fitch considers Granada I's reserve offers
sufficient protection against this risk, but views CGH Granada's
dynamic reserve as insufficient considering it does not account
for replacement servicer fees or net swap payments. Consequently,
CGH Granada's class A notes' rating is capped at 'A+sf' as per
Fitch's counterparty criteria.

In addition, the documentation provides that the reserves on both
transactions would not be available anymore once the servicer's
short-term rating is 'F2'. According to Fitch's counterparty
criteria, the maximum achievable rating that can be supported by
mitigating payment interruption risk at the loss of 'F2' is in the
'A' category. This will apply to all the notes of both
transactions.

Fitch believes that the transactions are exposed to potential
commingling losses because cash collections from the underlying
mortgages are clustered in few particular dates within every
month. Fitch believes that Granada 1's cash reserve is sufficient
to mitigate this additional stress, and the agency has modelled
this stress as a loss under its analysis of CGH Granada and found
the current and projected CE to be sufficient to mitigate the
risk.

Lower Recoveries Assumed on Prior Defaults
Taking into account the significant balance of outstanding non-
foreclosed defaulted loans in both transactions compared with the
level of recoveries as of the last investor report, Fitch assumed
lower recoveries on these loans especially for those that have
been in default for a long period.

RATING SENSITIVITIES

If payment interruption risk was fully mitigated in Granada 1 and
CGH Granada, the senior notes could be upgraded, all else being
equal.

A worsening of the Spanish macroeconomic environment especially
employment conditions, or an abrupt shift of interest rates could
jeopardise the underlying borrowers' affordability. This could
have negative rating implications, especially for junior tranches
that are less protected by structural CE.



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


CARILLION PLC: Judge Orders Liquidation of 10 Subsidiaries
----------------------------------------------------------
Sian Harrison and Jan Colley at Press Association report that a
judge has ordered the winding up of 10 Carillion companies at the
High Court.

Mr. Justice Nugee, sitting in London on Feb. 16, heard directors
of the crisis-hit construction firm concluded there was no
alternative but to place the subsidiary companies into compulsory
liquidation, Press Association relates.

Lawyers for Carillion, as cited by Press Association, said the 10
companies, including Carillion Holdings Ltd. and Carillion JM
Ltd., are "cash flow insolvent".

According to Press Association, Matthew Abraham, representing the
firm's directors, told the court: "The companies have run out of
cash and cannot continue trading any longer."

Carillion, which delivered a number of Government contracts for
services including schools, hospitals and transport, collapsed
last month with debts of GBP1.3 billion and pension liabilities of
GBP587 million, Press Association recounts.

The group, which also owes GBP75 million to HMRC, announced it
would be seeking compulsory liquidation after being refused an
11th-hour GBP20 million Government lifeline, Press Association
relays.

Mr. Abraham told the court the Government classified Carillion as
a "key strategic supplier" and held crisis talks in the weeks
leading up to its collapse, Press Association notes.

"The group was aware, and made clear to the Government, that the
consequences of a failed restructuring would go beyond those
typically associated with a major corporate insolvency and would
include, among other things, a material adverse impact on the
public sector and very significant job losses (of approximately
44,000 staff which the group employed)," Press Association quotes
Mr. Abraham as saying.

The parent company, Carillion PLC and five subsidiaries were wound
up on Jan. 15 and the court heard a further 11 Carillion companies
have been wound up since, Press Association recounts.  The court
heard there are more than 100 Carillion group companies in England
and Wales, plus more companies in other jurisdictions, Press
Association relays.

Mr. Justice Nugee ordered that the Official Receiver should become
the liquidator of the 10 companies and that partners from
PricewaterhouseCoopers be appointed as special managers, Press
Association discloses.

According to Press Association, some of the companies were part of
Carillion's pensions arm and the court heard the public Pension
Protection Fund (PPF) supports their entry into liquidation.

Headquartered in Wolverhampton, United Kingdom, Carillion plc --
http://www.carillionplc.com/-- is an integrated support services
company.  The Company operates through four business segments:
Support services, Public Private Partnership projects, Middle
East construction services and Construction services (excluding
the Middle East).


NEWDAY FUNDING: DBRS Rates VFN-F1 Ser. V1 Class F Notes 'B(high)'
-----------------------------------------------------------------
DBRS Ratings Limited (DBRS) assigned ratings to the Sub-series V1
and V2 of the VFN-F1 Loan Notes (collectively, the Notes) issued
by NewDay Funding Loan Note Issuer Ltd (the Issuer) as follows:

In respect of Sub-series V1:

-- BBB (low) (sf) to the Class A Notes
-- BB (low) (sf) to the Class E Notes
-- B (high) (sf) to the Class F Notes

In respect of Sub-series V2:

-- AAA (sf) to the Class A Notes
-- AA (high) (sf) to the Class B Notes
-- A (high) (sf) to the Class C Notes
-- BBB(low) (sf) to the Class D Notes
-- BB (low) (sf) to the Class E Notes
-- B (high) (sf) to the Class F Notes

The ratings of the Class A Notes address the timely payment of
interest and ultimate payment of principal by the final maturity
date. The ratings of other classes of the Notes address the
ultimate payment of interest and principal by the final maturity
date.

The ratings are based on the considerations listed below:

-- The sufficiency of available credit enhancement in the form of
subordination, a liquidity reserve (if applicable) and excess
spread.

-- The ability of the transaction's structure and triggers to
withstand stressed cash flow assumptions and repay the various
classes of the Notes in full according to the terms of the
transaction documents.

-- The Originator and its delegates' capabilities of performing
activities with respect to originations, underwriting, cash
management, data processing and servicing.

-- The legal structure and presence of legal opinions addressing
the assignment of the assets to the Receivables Trustee and the
consistency with DBRS's "Legal Criteria for European Structured
Finance Transactions" methodology.

The transaction cash flow structure was analysed in DBRS's
proprietary Excel-based tool.

Notes: All figures are in British pound sterling unless otherwise
noted.


NEWDAY PARTNERSHIP: DBRS Rates VFN-P1 Ser. V1 Class F Notes 'Bsf'
-----------------------------------------------------------------
DBRS Ratings Limited assigned ratings to the Sub-series V1 and V2
of the VFN-P1 Loan Notes (collectively, the Notes) issued by
NewDay Partnership Loan Note Issuer Ltd as follows:

In respect of Sub-series V1:

-- A (sf) to the Class A Notes
-- BB (sf) to the Class E Notes
-- B (sf) to the Class F Notes

In respect of Sub-series V2:

-- AAA (sf) to the Class A Notes
-- AAA (sf) to the Class B Notes
-- AA (high) (sf) to the Class C Notes
-- A (sf) to the Class D Notes
-- BB (sf) to the Class E Notes
-- B (sf) to the Class F Notes

The ratings of the Class A Notes address the timely payment of
interest and the ultimate payment of principal by the final
maturity date. The ratings of other classes of the Notes address
the ultimate payment of interest and principal by the final
maturity date.

The ratings are based on the considerations listed below:

-- The sufficiency of available credit enhancement in the form of
subordination, a liquidity reserve (if applicable) and excess
spread.

-- The ability of the transaction's structure and triggers to
withstand stressed cash flow assumptions and repay the Notes in
full according to the terms of the transaction documents.

-- The Originator and (if any) its delegates' capabilities of
performing activities with respect to originations, underwriting,
cash management, data processing and servicing.

-- The legal structure and presence of legal opinions addressing
the assignment of the assets to the Receivables Trustee and the
consistency with DBRS's "Legal Criteria for European Structured
Finance Transactions" methodology.

Notes: All figures are in British pound sterling unless otherwise
noted.


SANDWELL COMMERCIAL 2: S&P Lowers Class D Notes Rating to D(sf)
---------------------------------------------------------------
S&P Global Ratings lowered its credit ratings on Sandwell
Commercial Finance No. 2 PLC's class D and E notes.

S&P said, "We understand that as the outstanding loan pool is
being worked out, a number of loans (no longer in the pool) are
being repaid at a loss. In this transaction, principal losses are
not directly applied reverse sequentially toward the notes'
redemption, but instead accrue on a principal deficiency ledger
(PDL).

As of the December 2017 investor report, the class D notes
experienced an application of PDL amounts for the first time,
while losses have been accruing on the class E notes' PDL since
June 2014. The PDL amount of GBP759,293 applied to the class D
notes represents 3.5% of the original class D note balance, while
the PDL on the class E notes represents 100% of the outstanding
class E notes' balance. Furthermore, interest shortfalls on the
class E notes are being deferred and capitalized through the PDL.

While the liquidity facility is available to cover interest
amounts due and payable on the class A to D notes, it is not
available for the class E notes. The transaction documents do not
permit liquidity drawings for the classes of notes with a PDL
amount equal to or greater than 50% of the principal amount
outstanding of the relevant class of notes. Principal amounts can
also be diverted in this transaction to pay interest amounts.

S&P said, "Our ratings on Sandwell Commercial Finance No. 2's
notes address timely payment of interest and repayment of
principal not later than the September 2037 legal maturity date.

"Given the application of PDL amounts on the class D notes at the
most recent interest payment date (December 2017), we believe the
likelihood of default to be virtually certain. We have therefore
lowered to 'CC (sf)' from 'CCC- (sf)' our rating on this class of
notes, in line with our criteria for assigning 'CCC' category
ratings.

"Although the unpaid interest on the class E notes is being
deferred and capitalized through the PDL, we expect this class of
notes to continue to experience interest shortfalls in the future
as revenue shortfall amounts are currently taking place. With this
in mind, we believe that there is a virtual certainty that the
deferred interest and principal amounts will not be made in full
at or before the legal final maturity date due to the
deterioration of the transaction's credit quality. We have
therefore lowered to 'D (sf)' from 'CC (sf)' our rating on the
class E notes in line with our criteria."

S&P's ratings on the class A, B, and C notes remain unaffected by
the rating actions.

  RATINGS LIST

  Sandwell Commercial Finance No. 2 PLC
  GBP350 Million Commercial Mortgage-Backed Floating-Rate Notes

  Class        Rating
          To             From

  Ratings Lowered

  D       CC (sf)        CCC- (sf)
  E       D (sf)         CC (sf)


TAURUS UK 2017-2: DBRS Finalizes BB(low) Rating on Class E Notes
----------------------------------------------------------------
DBRS Ratings Limited finalised the provisional ratings of the
following classes of the Commercial Mortgage-Backed Floating-Rate
Notes due November 2027 (collectively, the Notes) issued by Taurus
2017-2 UK Designated Activity Company (the Issuer):

-- Class A Notes rated AAA (sf)
-- Class B Notes rated AA (sf)
-- Class C Notes rated A (low) (sf)
-- Class D Notes rated BBB (low) (sf)
-- Class E Notes rated BB (low) (sf)

All trends are Stable.

Taurus 2017-2 UK Designated Activity Company is a securitisation
of one floating-rate senior commercial real estate loan, which was
advanced by Bank of America Merrill Lynch International Limited
(BAML) to finance the acquisition of 127 urban logistic and multi-
let industrial properties (the Portfolio) in United Kingdom by
Blackstone Real Estate Partners (the Sponsor). Blackstone
purchased the Portfolio from Brockton Capital (the Vendor) in an
off-market deal for a purchase price of approximately GBP 560
million inclusive of transaction costs.

BAML initially provided a total of GBP 436.8 million (79.7% loan-
to-value (LTV)) acquisition financing, consisting of a 66.4% LTV,
GBP 364 million senior term loan (the Senior Facility) and a GBP
72.8 million mezzanine term loan (the Mezzanine Facility).

In addition, a GBP 3.9 million capex facility was funded at
closing, which was split into a GBP 3.25 million (65.0% loan-to-
cost (LTC)) senior capex facility (the Senior Capex Facility and,
together with the Senior Term Facility, the Senior Facilities) and
GBP 0.65 million (77.5% LTC) mezzanine capex facility (the
Mezzanine Capex Facility and, together with the Mezzanine
Facility, the Mezzanine Facilities).

The Mezzanine Facilities are structurally and contractually
subordinated to the Senior Facilities and are not part of the
commercial mortgage-backed securities (CMBS) transaction. BAML
sold 95% of the senior facilities to the Issuer and retains an
ongoing material economic interest of not less than 5% to maintain
compliance with applicable regulatory requirements. The floating-
rate senior loan is 95% hedged with an interest rate cap that has
a strike rate of 2.0%. The cap was provided by Bank of America
Merrill Lynch.

The Portfolio is 92% occupied and benefits from a granular source
of income secured by over 1,000 tenants, predominantly composed of
small- and medium-sized enterprises. No single tenant represents
more than 2.0% of the gross rental income (GRI). The properties
backing the loan are geographically well diversified across 101
towns and cities in the U.K., with a concentration in the
economically stronger regions of East England and Greater London
(34% of the lettable area and 40% of GRI).

In DBRS's view, the Senior Facilities represent moderate leverage
financing with a 67.13% LTV. The relatively high DBRS LTV is
mitigated by the debt yield as the collateral currently generates
a Net Operating Income (NOI) of approximately GBP 33 million,
translating into a relatively conservative day-one senior debt
yield of 9.0%. The loan is interest-only (IO) and has a two-year
maturity with three one-year extension options subject to certain
conditions including hedging.

The facility agreement provides the Sponsor with the opportunity
to sell the entire Portfolio without repaying the loan in case of
an initial public offering (IPO) or upon disposal to a company
owning (directly or indirectly) commercial real estate assets with
an aggregate market value (1) of not less than EUR 2 billion in
Europe or (2) of not less than EUR 5 billion worldwide. Those
conditions are not applied if at the time of the sale the LTV
ratio is lower than 65% and the properties in the portfolio are
going to be managed by an experienced asset manager, with at least
10 million square feet of logistics, industrial and warehouse
assets under management. Such Sponsor disposals of the entire
portfolio are permitted changes of control.

The loan structure does not include financial default covenants
prior to a permitted change of control, but provides other
standard events of default including: (1) any missing payment,
including failure to repay the loan at maturity date; (2) borrower
insolvency; (3) a loan default arising as a result of any
creditors' process or cross-default. In DBRS's view, potential
performance deteriorations would be captured and mitigated by the
presence of cash trap covenants: (1) an LTV cash trap covenant set
at 75% and (2) a debt yield cash trap covenant set at: (a) 8.0% in
Year One to Three, (2) 8.5% in Year Four and (3) 9.1% in Year
Five.

The DBRS net cash flow (NCF) for the portfolio is GBP 26.2
million, which represents a 20.7% discount to the sponsor's NOI.
DBRS applied a blended capitalisation rate of 6.5% to the
aggregate NCF to arrive at a DBRS stressed value of GBP 400.5
million, which represents a 26.5% haircut to the market value
provided by CBRE's valuation completed in July 2017. The DBRS LTV
of the Senior Facilities is 91%.

The transaction is supported by a GBP 8.0 million liquidity
facility, which is provided by Bank of America N.A., London
Branch. The liquidity facility can be used by the Issuer to fund
expense shortfalls (including any amounts owing to third-party
creditors and service providers that rank senior to the Notes),
property protection shortfalls and interest shortfalls (including
with respect to deferred interest, but excluding default interest
and exit payment amounts) in connection with interest due on the
Class A and Class B notes in accordance with the relevant
waterfall. The liquidity facility cannot be used to fund
shortfalls due to the Class X Notes. As of closing, DBRS estimated
that the commitment amount was equivalent to approximately 12
months of coverage on the covered notes.

The final legal maturity of the Notes is in November 2027, five
years after the third one-year maturity extension option
negotiated under the loan agreement. If necessary, DBRS believes
this provides sufficient time, given the security structure and
jurisdiction of the underlying loan, to enforce on the loan
collateral and repay the bondholders.

Notes: All figures are in British pound sterling unless otherwise
noted.


TOWD POINT 2016-VANTAGE1: DBRS Confirms B Rating on Class F Notes
-----------------------------------------------------------------
DBRS Ratings Limited took rating actions on the Class A1, A2, B,
C, D, E and F Notes (the Rated Notes) issued by Towd Point
Mortgage Funding 2016-Vantage1 Plc (Vantage1) as follows:

-- Class A1 Notes confirmed at AAA (sf) for the full and timely
payment of interest and the full and ultimate payment of
principal.

-- Class A2 Notes confirmed at AAA (sf) for the full and timely
payment of interest and the full and ultimate payment of
principal.

-- Class B Notes confirmed at AA (sf) for the full and ultimate
payment of interest (disregarding any Net WAC Additional Amounts)
and principal.

-- Class C Notes upgraded to A (high) (sf) from A (sf) for the
full and ultimate payment of interest (disregarding any Net WAC
Additional Amounts) and principal.

-- Class D Notes upgraded to BBB (high) (sf) from BBB (low) (sf)
for the full and ultimate payment of interest (disregarding any
Net WAC Additional Amounts) and principal.

-- Class E Notes upgraded to BBB (low) (sf) from BB (sf) for the
full and ultimate payment of principal.

-- Class F Notes confirmed at B (sf) for the full and ultimate
payment of principal.

The rating actions followed an annual review of the transaction
and were based on the following analytical considerations, as
described more fully below.

-- Portfolio performance in terms of delinquencies and defaults.

-- Portfolio default rate (PD), loss given default rate (LGD)
    and expected loss assumptions for the remaining collateral
    pool.

-- Current credit enhancement (CE) available to the notes to
    cover the expected losses at their respective rating levels.

Vantage1, which closed in December 2016, is a securitisation of
non-conforming mortgages secured over residential properties and
originated by various specialised lenders in the U.K. The
mortgages were later purchased by Promotoria (Vantage) Limited in
2015. Cerberus Europeans Residential Holdings B.V. acquired this
portfolio of mortgages and sold it to Vantage1 on the transaction
closing date. Pepper (U.K.) Limited is the Servicer of the
mortgage portfolio.

At the transaction closing, there were loans in arrears. In
addition, 41.7% of the loans had gone through restructuring
arrangements. As of 31 October 2017, the loans more than 90 days
in arrears were 16.6% of the outstanding portfolio balance, down
from 22.0% at the transaction closing. The decline in arrears was
partially driven by the continuing loan restructuring, which
increased to 49.3% of the outstanding portfolio. At the same time,
1.8% of the portfolio balance at the transaction closing went
under repossession while 0.4% of losses realized. The performance
is within DBRS's expectations. DBRS maintained its base case PD
and LGD assumptions on the transaction at 45.9% and 21.6%,
respectively.

The CE to the Rated Notes has increased as the transaction is
deleveraging. As of the November 2017 payment date, the CE to the
Class A1, A2, B, C, D, E and F Notes increased to 49.3%, 44.9%,
38.1%, 30.4%, 25.1%, 19.1%, and 11.0% from 45.0%, 41.0%, 34.8%,
27.8%, 22.9%, 17.4%, and 10.0%, respectively. The sources of CE to
each Rated Notes are its subordinate Notes. The increase in CE
prompted the rating actions herein.

Elavon Financial Services DAC, UK Branch, is the Account Bank in
the transaction and has a DBRS private rating that complies with
the Account Bank Minimum Institution Rating criteria, given the
ratings assigned to the Class A1 and A2 Notes, as described in
DBRS's "Legal Criteria for European Structured Finance
Transactions" methodology.

Notes: All figures are in British pound sterling unless otherwise
noted.


WATERLOGIC GROUP: Moody's Assigns B2 CFR, Outlook Negative
----------------------------------------------------------
Moody's Investors Service has assigned a B2 corporate family
rating (CFR) and B2-PD probability of default rating (PDR) to
Waterlogic Group Holdings Limited (Waterlogic or the company), a
leading manufacturer and global distributor of point-of-use water
coolers.

Concurrently, Moody's has assigned B2 ratings to the new USD45
million senior secured revolving credit facility due 2024 and the
new USD440 million equivalent senior secured term loans due 2025
at Waterlogic Holdings Limited. The term loans will include a EUR
tranche of c. USD250 million equivalent, a GBP tranche of c.
USD120 million equivalent, and an AUD tranche of c. USD70 million
equivalent. Net proceeds from the new term loans will be used to
refinance existing credit facilities of USD350 million equivalent
while USD86 million will be held as excess to fund future
acquisitions.

The outlook on the ratings is negative. This is the first time
Moody's has assigned a public rating to the company.

"Waterlogic's B2 CFR with a negative outlook reflects the high
Moody's-adjusted debt/EBITDA of 6.4x at closing as well as
execution risks with respect to deleveraging to below 6.0x in the
next 12 months", says Eric Kang, a Moody's analyst. "The company's
acquisitive strategy could also slow the deleveraging profile if
future acquisitions are funded with additional debt", adds Mr
Kang.

RATINGS RATIONALE

The B2 CFR incorporates the company's (1) well-established market
position as a leading provider of point-of-use water coolers; (2)
revenue visibility as the majority of revenue is derived from the
recurring rental business; (3) low customer concentration and
churn rates; and (4) Moody's expectation that operating
performance will be supported by a gradual, but continuing shift
from bottled water coolers to point-of-use solutions.

However, the CFR also reflects (1) the company's modest scale and
limited product diversity; (2) the highly fragmented and
competitive water cooler market with fairly low barriers to entry
to both small local players and large multinational companies
entering the market; (3) Moody's expectation that the group will
continue to make acquisitions to support growth, which will weigh
on net cash flow generation and could slow deleveraging; and (4)
the high initial leverage.

Moody's views the company's Moody's-adjusted debt/EBITDA of 6.4x
at closing as high for the current B2 CFR (based on 2017 pro-forma
EBITDA excluding potential acquisitions, and after investments in
growth initiatives of USD6.5 million and M&A and integration costs
of USD3.7 million). The rating agency expects acquisitions funded
with excess cash and organic EBITDA growth to support deleveraging
to below 6.0x in the next 12 to 18 months but this will entail
execution risks. Moody's expects organic growth to be supported by
the continuing market shift from bottled water coolers to point-
of-use water coolers as well as the recent recruitment of sales
personnel in a number of key markets including the US, France,
Germany and Spain. However, the company operates in a highly
fragmented and competitive industry with low customer switching
costs in Moody's view. That being said, Moody's notes that
customer churn has been low at around 8%.

Additionally, further debt-funded acquisitions may slow the
company's deleveraging profile. The market for water coolers
remains fragmented and Moody's expects the company will continue
to be acquisitive as it seeks to create further consolidation in
market. The rating agency recognises that these are likely to
enhance the group's credit profile, mainly due to cost advantages
from efficiency and improved route density.

LIQUIDITY

Waterlogic's liquidity is adequate. At closing, Moody's expects
cash balances of USD108 million albeit a significant portion will
be earmarked to fund future acquisitions. The company will also
have access to a new undrawn USD45 million revolving credit
facility. Lastly, Moody's expect the company to maintain adequate
covenant headroom under its single net leverage financial
maintenance covenant to be tested quarterly from December 2018.

STRUCTURAL CONSIDERATIONS

The senior secured credit facilities are rated B2 in line with the
CFR as they are only class of debt in the capital structure. The
credit facilities will be secured, among other things, by material
assets of the US, UK and Australian operations and guaranteed by
operating companies representing at least 80% of total EBITDA.

OUTLOOK

Negative outlook reflects the high Moody's-adjusted debt/EBITDA of
6.4x at closing as well as execution risks with respect to
deleveraging to below 6.0x in the next 12 months. Moody's will
consider stabilising the outlook if leverage reduces comfortably
below 6.0x on a sustained basis in the next 12 months.

FACTORS THAT COULD LEAD TO AN UPGRADE/DOWNGRADE

While an upgrade of the ratings is unlikely in the near term,
upward pressure on the rating would be dependent upon the company
improving its business profile through increased scale and
diversity while (i) maintaining a Moody's-adjusted EBITA margin in
the high teens, reducing the Moody's-adjusted debt/EBITDA to below
4.5x on a sustained basis, and maintaining a solid liquidity
profile including a Moody's-adjusted free cash flow/debt of at
least 5%.

Negative pressure could arise due to an erosion in profitability
or margins, the Moody's-adjusted debt/EBITDA remaining sustainably
above 6.0x, or weakening liquidity or free cash flow generation.
Any material debt-funded acquisition or further shareholder
friendly action could further put pressure on the ratings.

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

Headquartered in the United Kingdom, Waterlogic is a leading
manufacturer and global distributor of mains attached point-of-use
drinking water purification and dispensing systems designed for
environments such as offices, factories, hospitals, hotels,
schools, restaurants and other workplaces. The company generated
pro-forma revenues of USD272 million in 2017.



                            *********

Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par.  Prices are
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S U B S C R I P T I O N   I N F O R M A T I O N

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