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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

           Thursday, April 5, 2018, Vol. 19, No. 067


                            Headlines


C R O A T I A

ZAGREBACKA BANKA: S&P Raises CCR to 'BB+' on Sovereign Upgrade


C Y P R U S

CYPRUS COOPERATIVE: Moody's Puts Caa2 LT Deposit Rating on Review


I R E L A N D

TORO EUROPEAN 5: S&P Assigns B- (sf) Rating to Class F Notes


I T A L Y

BANCA NAZIONALE: Fitch Affirms bb+ Viability Rating
PIAGGIO & C: Moody's Alters Outlook to Pos., Affirms B1 CFR
UNIPOL BANCA: Fitch Affirms BB Long-Term IDR, Outlook Stable


L A T V I A

ABLV: Forced Liquidation Humiliation for EU, Latvia Authorities


N E T H E R L A N D S

SYNCREON GROUP: S&P Cuts Long-Term ICR to 'CCC+', Outlook Stable


P O L A N D

BANK MILLENNIUM: Moody's Affirms ba2 Baseline Credit Assessment
PFLEIDERER GROUP: S&P Alters Outlook to Stable & Affirms B+ ICR
VIATRON SA: Gdansk Court Opens Arrangement Proceedings


R U S S I A

AHML 2011-2: S&P Puts BB+(sf) Class A2 Notes Rating on Watch Pos.
MORTGAGE AGENT 3: S&P Puts 'BB+(sf) A Notes Rating on Watch Pos.
SKB-BANK: Fitch Affirms and Then Withdraws B- IDR
SOVCOMBANK: Moody's Affirms Ba2 LT Counterparty Risk Assessment


S P A I N

BANCO POPULAR: Bondholders Launch Legal Proceedings in N.Y. Court
NH HOTEL: Fitch Raises Long-Term IDR to B+, Outlook Positive


S W I T Z E R L A N D

GATEGROUP HOLDING: S&P Affirms 'B-' ICR, Off Watch Positive
MATTERHORN TELECOM: S&P Raises ICR to 'B+', Outlook Stable


T U R K E Y

IGA: In Talks with Lenders for EUR1 Billion in New Loans


U N I T E D   K I N G D O M

AIB GROUP: Moody's Assigns Ba2 Senior Unsecured Debt Rating
CONVIVIALITY: C&C Buys Two Businesses, 2,000 Jobs Saved
GALAXY FINCO: Moody's Affirms B2 CFR, Outlook Stable
TRINITY SQUARE 2015-1: Moody's Affirms Ba1 Rating to Cl. E Notes


U Z B E K I S T A N

TURON BANK: S&P Lifts Issuer Credit Rating to 'B', Outlook Stable


X X X X X X X X

* EMEA Consumer Loan ABS 90-180 Day Delinquencies Up in January


                            *********



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C R O A T I A
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ZAGREBACKA BANKA: S&P Raises CCR to 'BB+' on Sovereign Upgrade
--------------------------------------------------------------
S&P Global Ratings raised its long-term rating on Zagrebacka
Banka dd (Zaba) to 'BB+' from 'BB'. The outlook is stable.

S&P said, "The rating action mirrors our recent upgrade of
Croatia. Now that the sovereign rating is 'BB+', we can factor
one notch of extraordinary group support into our issuer rating
on Zaba.

"Our long-term rating on the bank remains capped at the sovereign
level. This is because we think it highly unlikely that
UniCredit's support would be sufficient to withstand Croatia
defaulting."

With 2.8% GDP growth in 2017, Croatia is continuing the upward
economic trend that started in 2015 after six years of recession.
S&P now believes that the economy will grow by a cumulative 7.8%
in 2018-2020, mainly driven by external and domestic demand.

These more favorable economic conditions, together with an active
secondary market for nonperforming exposures (NPEs) disposals,
should support a recovery in the domestic private sector's
creditworthiness, in our view.

S&P said, "We are therefore expecting domestic banks' asset
quality to gradually improve in 2018-2020. Specifically, we
anticipate that Croatian banks will likely report a cost of risk
as high as 180 basis points of their customer loans in 2018,
while decreasing to a more normal level of about 109% in 2019.
Our forecasts factor in the base-case scenario of an orderly
resolution of Agrokor, which currently exposes the banking system
to a rather large stock of NPEs.

"In this context, we expect Zaba to remain focused on working-out
its NPE portfolio over the next two years, although we anticipate
that its NPE ratio will likely remain above the system average
given its higher starting point--its NPE ratio was 15.4% as of
end-2017 compared to a system average of 11.3%--and its higher-
than-system-average exposure to Agrokor.

"The bank is likely to increase its provisioning for its exposure
to Agrokor in 2018. We incorporate this in our current
capitalization forecast of 40-50 additional basis points, which
informs our cost-of-risk projection.

"At the moment, uncertainty lingers as to the final resolution of
the Agrokor case but we expect to have more clarity before July
this year. If the details of the resolution differ materially
from our current assumptions, we will reassess our risk-adjusted
capital (RAC) ratio forecast.

"Our rating incorporates Zaba's high single-name concentration
with its top-20 corporate exposures standing at about 0.9x its
total-adjusted capital as of Dec. 31, 2017. This high
concentration, resulting from its being a corporate bank in a
small economy and its material exposure to Agrokor, will continue
to weigh on the rating.

"At the same time, we expect Zaba to continue reporting good
capitalization and maintaining a RAC ratio between 9% and 10%
(9.8% as of Dec. 31, 2017) over the next 18-24 months.

"The outlook on Zaba is stable, mirroring that on Croatia. It
incorporates our view that Zaba will preserve its strategic role
within the UniCredit group over the next 12 months as an
important conduit for the group's retail and corporate activities
in Croatia and Bosnia and Herzegovina.

"It also reflects our view that a potential deterioration in the
bank's risk position and capital--either from a materially worse-
than-expected resolution of Agrokor and/or the default of other
large exposures--would not in and of itself lead to a downgrade.
This is because we would incorporate another notch of
extraordinary group support, in accordance with our methodology.
Nevertheless, this is not our base-case scenario.

"We could raise our long-term rating on Zaba following a similar
action on the sovereign, all else remaining the same.

"We could lower our long-term rating on Zaba if we lowered our
rating on Croatia. We could also lower our long-term rating on
Zaba if we came to believe that its strategic importance within
the UniCredit group had materially diminished."


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C Y P R U S
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CYPRUS COOPERATIVE: Moody's Puts Caa2 LT Deposit Rating on Review
-----------------------------------------------------------------
Moody's Investors Service has placed on review with direction
uncertain Cyprus Cooperative Bank Ltd's (CCB) Caa2 long-term,
local and foreign currency deposit ratings and downgraded the
bank's baseline credit assessment (BCA) and adjusted BCA to ca
from caa2. The bank's long-term Caa1(cr) Counterparty Risk
Assessment (CRA) has also been placed on review with direction
uncertain while CCB's Not-Prime short-term deposit ratings and
NP(cr) short-term CRA have been affirmed.

The rating action follows the bank's announcement on March 19,
2018 that it has appointed a financial adviser to assist in
identifying interested parties for an investment in either (1)
the fully licensed bank or (2) all or part of CCB's assets and
liabilities. CCB, which is effectively wholly owned by the
government of Cyprus, is the second largest Cypriot bank and has
a predominantly retail focus in loans and deposits.

A full list of affected ratings can be found at the end of this
press release.

RATINGS RATIONALE

-- LOWER BCA REFLECTS CAPITAL SHORTFALL

Moody's says that the two-notch downgrade of the bank's BCA to ca
from caa2 reflects the rating agency's view that the bank has a
provision shortfall which will have to be filled either through a
capital increase, with funds coming from private investors or the
government, or through the sale of all or part of the bank's
assets and liabilities.

Although CCB currently satisfies all of its regulatory
requirements, the bank's capital shortfall stems from weak
solvency and limited progress to date in tackling its asset
quality issues. CCB's stock of nonperforming exposures (NPEs)
stood at 59% of gross loans as of September 2017, down slightly
from its peak of 60%. The bank's provision coverage, the ratio of
loan loss reserves to NPEs, at 45%, remained low. Accordingly
CCB's capital buffer, with a ratio of tangible common equity to
risk weighted assets at 11.3% as of September 2017, is vulnerable
owing to its high provision gap.

-- REVIEW WILL CONSIDER THE OUTCOME OF THE BANK'S ATTEMPT TO
RAISE CAPITAL OR SELL ASSETS AND LIABILTIIES

The review on CCB's Caa2 deposit ratings will focus on the
outcome of the process launched by the bank, on 19 March, to find
investors willing to either subscribe additional capital, or to
buy its assets and liabilities. The extent of any capital raised,
or the credit profile of the acquirer of the bank's assets and
liabilities will be key drivers of the direction of the resulting
rating action.

FACTORS THAT COULD LEAD TO AN UPGRADE/DOWNGRADE

An upgrade in the BCA could arise in the event of the bank
significantly increasing its capital and/or reducing its bad
loans. The BCA would be downgraded to c in the event the bank was
placed into liquidation.

The deposit ratings could be downgraded if the bank is
unsuccessful in its efforts to find an investor or the credit
risk profile of an acquirer of the bank's assets and liabilities
is weaker than the bank's current deposit ratings.

The deposit ratings could be confirmed or upgraded if there is a
capital infusion or improvement in the bank's coverage of NPEs,
or if the bank is acquired by an entity with a credit risk
profile in line with or stronger than that of CCB.

LIST OF AFFECTED RATINGS

Placed On Review for Direction Uncertain:

-- LT Bank Deposits, currently Caa2, Outlook changed To Rating
    Under Review From Stable

-- LT Counterparty Risk Assessment, currently Caa1(cr)

Downgrades:

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

-- Baseline Credit Assessment, Downgraded to ca from caa2

Affirmations:

-- ST Bank Deposits, Affirmed NP

-- ST Counterparty Risk Assessment, Affirmed NP(cr)

Outlook Actions:

-- Outlook, Changed To Rating Under Review From Stable

PRINCIPAL METHODOLOGY

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


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TORO EUROPEAN 5: S&P Assigns B- (sf) Rating to Class F Notes
------------------------------------------------------------
S&P Global Ratings assigned its credit ratings to Toro European
CLO 5 DAC's class X, A, B-1, B-2, C-1, C-2, D, E, and F notes.
The issuer also issued unrated subordinated notes.

Toro European CLO 5 is a European cash flow collateralized loan
obligation (CLO), securitizing a portfolio of primarily senior
secured leveraged loans and bonds. The transaction is managed by
Chenavari Credit Partners LLP.

The ratings assigned to the notes reflect our 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 bankruptcy
    remote.

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

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

"In our cash flow analysis, we used the EUR400 million target par
amount, the covenanted weighted-average spread (3.70%), the
reference weighted-average coupon (4.55%), 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.

"The Bank of New York Mellon, London Branch is the bank account
provider and custodian. The documented downgrade remedies are in
line with our current counterparty criteria.

"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 rating levels.

"We consider that the issuer is bankruptcy remote, in accordance
with our legal criteria.

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

RATINGS LIST

Ratings Assigned

  Toro European CLO 5 DAC
  EUR414.37 Million Senior Secured Fixed- And Floating-Rate Notes
  (Including EUR41.25 Million Unrated Subordinated Notes)

  Class          Rating            Amount
                                 (mil. EUR)

  X              AAA (sf)            2.25
  A              AAA (sf)          232.50
  B-1            AA (sf)            34.00
  B-2            AA (sf)            22.85
  C-1            A (sf)             14.50
  C-2            A (sf)             10.00
  D              BBB (sf)           21.72
  E              BB (sf)            23.45
  F              B- (sf)            11.85
  Sub notes      NR                 41.25

  NR--Not rated.
  Sub--Subordinated.


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BANCA NAZIONALE: Fitch Affirms bb+ Viability Rating
---------------------------------------------------
Fitch Ratings has affirmed Banca Nazionale del Lavoro's (BNL)
Long-Term Issuer Default Rating (IDR) at 'BBB+' and Viability
Rating (VR) at 'bb+'. The Outlook on the Long-Term IDR is Stable.

KEY RATING DRIVERS
IDRS, SENIOR DEBT AND SUPPORT RATING

The IDRs and Support Rating (SR) reflect institutional support
from BNL's parent, BNP Paribas (BNPP, A+/Stable), as Fitch views
BNL as core to BNPP's strategy and Italy the second-largest
market for the group after France. Nonetheless, BNL's IDRs are
capped at one notch above Italy's sovereign rating to reflect
Fitch's view that the bank is vulnerable to the risk of
restrictions being imposed on its ability to service its
obligations if Italy's operating environment materially worsens,
therefore constraining BNPP's ability to support BNL. In this
context, the weak operating environment in Italy could affect the
attractiveness of BNL for the French group, negatively affecting
the parent group's financial profile and ultimately potentially
reducing the latter's commitment to its Italian subsidiary.

VR
BNL's VR primarily reflects the weak asset quality of the bank,
which in turn weighs on its capitalisation, and adequate
liquidity and funding. It also reflects the benefits of ordinary
support from its parent and as well as improved but still low
profitability.

BNL's asset-quality indicators are gradually improving but the
bank's impaired loans ratio, which Fitch estimate at above 15%,
remains high by international comparison. In 2017, the bank
adopted a more active approach towards reducing impaired loans
through a number of actions (e.g. selective portfolio disposals,
increasing write-offs of fully-covered doubtful loans and
improving recoveries). Furthermore, the bank's reduced risk
appetite and economic growth in Italy resulted in lower inflows
of new impaired loans since 2016. However, working out its large
stock of problem assets remains a challenge.

Despite the gradual improvement over the past years and ordinary
parent support, in Fitch's opinion BNL's capital remains at risk
from unreserved impaired loans, which weighs on the bank's
capitalisation. Capital buffers are moderately above regulatory
minimum requirements.

BNL's liquidity benefits from ordinary support from BNPP and a
stable customer deposit base. Wholesale funding is managed at the
parent level, which transfers part of its wholesale and ECB
funding to BNL in the form of interbank lending.

BNL's profitability has been improving since 2015, as a result of
lower loan impairment charges (LICs), but remains low. The bank's
revenue generation remains modest, due to prolonged low interest
rates and stiff competition for higher-quality borrowers
domestically. Net commissions have been gradually increasing and
represented over 40% of total revenue in 2017, also benefitting
from a full range of products made available by BNPP.

RATING SENSITIVITIES
IDRS, SENIOR DEBT AND SUPPORT RATING

BNL's IDRs and Support Rating are primarily sensitive to a change
in Italy's sovereign rating and would likely be downgraded if
Italy is downgraded. The IDRs and Support Rating are also
sensitive to a change in Fitch's assessment of BNPP's propensity
and ability to provide support to the Italian subsidiary. A
downgrade of BNPP's IDRs will only affect BNL's IDRs and Support
Rating if the parent's Long-Term IDR is downgraded by more than
three notches.

The Short-Term IDR may come under pressure if short-term
liquidity support from BNPP weakens, which Fitch does not expect.

VR

BNL's VR could come under pressure if the bank does not meet its
targets to reduce impaired loans or if its capital remains highly
exposed to unreserved impaired loans. Conversely, over the longer
term BNL's ratings could benefit from sustained improvements in
the economic conditions in Italy and materially stronger asset
quality combined with acceptable and sustainable profitability
and sound capital levels.

The rating actions are as follows:

Long-Term IDR affirmed at 'BBB+'; Outlook Stable
Short-Term IDR affirmed at 'F2'
Viability Rating affirmed at 'bb+'
Support Rating affirmed at '2'
Senior debt and EMTN programme: affirmed at 'BBB+'


PIAGGIO & C: Moody's Alters Outlook to Pos., Affirms B1 CFR
-----------------------------------------------------------
Moody's Investors Service has changed the outlook on Piaggio & C.
S.p.A.'s (Piaggio) B1 ratings to positive from stable. All
ratings, including the B1 corporate family rating (CFR), the B1-
PD probability of default rating (PDR) and the B1 senior
unsecured rating assigned to Piaggio's EUR250 million worth of
senior notes due in 2021 were affirmed.

"The positive outlook reflects Moody's expectation that Piaggio
's credit metrics will further improve during the next 12 to 18
months, confirming the progress that the company already achieved
during 2017", says Paolo Leschiutta a Moody's Vice President -
Senior Credit Officer and lead analyst for Piaggio. "Our
expectation reflects the macroeconomic recovery across Europe,
the strong growth experienced in the Indian two-wheeler market
and the company's efforts to improve its performance in both
India and Vietnam. Success in sustaining a leverage below 4.5x
and a retained cash flow to net debt ratio above the mid-teens in
percentage terms could result in a rating upgrade over the next
12 to 18 months", added Mr Leschiutta.

RATINGS RATIONALE

Piaggio's operating profit growth and gross debt reduction were
above Moody's expectations in 2017. During the year the company's
reported EBITDA grew by 12.6% to EUR192.3 million and its gross
financial debt reduced by 15.8% to EUR574.8 million. These
results were achieved thanks to a strong recovery in the European
scooter market, boosted by changes in environmental regulations,
and a strong growth in the company's 2 wheelers segment in India
which more than compensated for the ongoing difficulties the
company is experiencing in the commercial vehicle segment in
India and in the 2 wheelers segment in Vietnam.

Debt reduction was partially driven by one-off movements, as 2016
debt levels were inflated by prefunding of upcoming debt
maturities. During the year the company also generated
approximately EUR44 million of free cash flow generation,
including dividend payment, which was also above the rating
agency's expectation and further supported debt reduction during
the year.

Following Piaggio's 2017 results, its (gross) debt to EBITDA
ratio reduced from 6.0x to 4.2x and its retained cash flow to net
debt improved from 10.7% to 19.2%, both on a Moody's-adjusted and
on a preliminary basis. Moody's expect further improvement in
Piaggio's performance, albeit at a slower pace than in 2017.
Before Moody's can consider a rating upgrade, however, the
company will have to demonstrate its ability to further improve
its profitability while maintaining its current financial
profile. In this respect Moody's notes that the recovery in the
Western European two-wheeler market and the company's efforts to
restore volume growth in Asia should help.

Moody's also expects a stable dividend policy and a modest
increase in capital expenditure towards the company's long term
target of around EUR100 million. In this respect, Piaggio's
liquidity profile is seen as adequate with available liquidity
and cash flow from operations during the next 12 months
sufficient to cover the group's cash requirements for investments
and debt repayment.

Moody's cautions however that trading conditions in some emerging
markets such as Vietnam remain challenging, owing to volatile
demand and fierce competition, and these could impede a
sustainable strengthening in the company's credit metrics.

The current B1 rating continues to be supported by (1) Piaggio's
good business profile, underpinned by its leading position in a
number of markets across Western Europe and Asia, a portfolio of
well-known brands including the iconic Vespa brand as well as
Aprilia and Moto Guzzi and increasing geographical
diversification, with a growing presence in Asia and, more
recently, in Latin America; and (2) improving financial leverage.
Balancing these elements are (1) a high degree of business
cyclicality and seasonality as illustrated by declining volumes
during the 2011-14 crises; (2) strong competition in some of
Piaggio's key markets; and (3) small scale relative to other more
diversified consumer durables manufacturers. Together, these
factors pressure operating margins which remain in the mid-single
digit range.

POSITIVE OUTLOOK

The positive outlook reflects Moody's expectation that Piaggio's
key credit metrics will further improve compared to their 2017
level, albeit at a slower pace than during the last 12 months.
The outlook also recognises the recovery in macroeconomic
conditions in a number of European countries which Moody's
expects will support purchases of two-wheelers.

WHAT COULD CHANGE THE RATING UP/DOWN

Piaggio's ratings could be upgraded if (1) Piaggio demonstrates
success in maintaining a Moody's adjusted EBIT margin in the mid
to high-single-digit level in percentage terms (5.7% at 2017);
(2) success in maintaining a financial leverage, measured as
Moody's adjusted debt to EBITDA, comfortably below 4.5x for a
prolonged period of time and a ratio of retained cash flow to net
debt above 10% (including Moody's adjustments).

On the other side, Piaggio's rating could be lowered in case of
(1) deterioration in its operating performance; (2) failure to
maintain a leverage below 5.5x on a sustained basis (including
Moody's adjustments).

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Consumer
Durables Industry published in April 2017.

Based in Italy, Piaggio & C. S.p.A. is a leading global
manufacturer and distributor of light mobility vehicles for both
personal and business purposes. With a global production and R&D
presence, and robust portfolio of brands (nine names including
Vespa, Piaggio, Aprilia and Moto Guzzi), the group has solid
market positions in the two-wheeler (scooters and motorbikes)
market and in the three- and four-wheel commercial vehicles
sector. In particular, Piaggio is the largest European
manufacturer of two-wheelers and the market leader in the scooter
segment by sales volume, ahead of Honda Motor Co, Ltd (A2
stable). In India, Piaggio ranks second in the three-wheeler
vehicle markets, behind the local manufacturer Bajaj Auto Ltd.

In 2017, the company sold 552,800 vehicles (+3.9% from 2016) and
reported total consolidated revenue of EUR1,342 million (+2.2%)
and EBITDA of EUR192.3 million (+14.3%). Piaggio is listed on the
Italian Stock Exchange. The largest shareholder is IMMSI S.p.A.
(a listed holding company controlled by Piaggio's CEO, Roberto
Colaninno and his family), which owns about 50% of the capital.


UNIPOL BANCA: Fitch Affirms BB Long-Term IDR, Outlook Stable
------------------------------------------------------------
Fitch Ratings has affirmed Unipol Banca S.p.A.'s Long-Term Issuer
Default Rating (IDR) at 'BB' and Viability Rating (VR) at 'b'.
The Outlook on the Long-Term IDR is Stable.

KEY RATING DRIVERS
IDRS AND SUPPORT RATING (SR)

The affirmation of Unipol Banca's IDRs and SR reflects Fitch's
view of a moderate probability that support would be provided, in
case of need, from the bank's ultimate parent company Unipol
Gruppo S.p.A. (UG, BBB-/Stable). The bank and its parent are
regulated and supervised as a single entity by the Italian
regulator, the Banca d'Italia, who in Fitch opinion would favour
such support.

Fitch believes that any support required by Unipol Banca would be
manageable for UG, given its excess resources compared with the
size of its subsidiary. A default of Unipol Banca would carry
high reputational risk for UG as both operate in the same
jurisdiction and share the same brand. UG and its main insurance
subsidiary, UnipolSai, injected EUR900 million in Unipol Banca in
July 2017 to facilitate its balance sheet clean-up and restore
its viability, which Fitch views as evidence of UG's propensity
to support the bank subsidiary.

The two-notch difference between the ratings of Unipol Banca and
UG reflects Fitch's opinion that the bank does not play a
strategic role in the group, and synergies developed so far have
been weak. Unipol Banca's performance track record to date has
been a drag on UG's financial profile, in Fitch's view. Fitch
believes that UG will continue to evaluate strategic options for
Unipol Banca and that the subsidiary's recently completed
restructuring will, possibly, make it more attractive to
integrate its banking subsidiary with other domestic banks.

Unipol Banca's Stable Outlook is in line with that on UG.

VR
Unipol Banca's VR reflects improvement in the bank's asset
quality and capitalisation following the restructuring, which
started in 2H17 and was completed in 1Q18. This has reduced
impaired loans as well as the weight of unreserved NPLs on
capital and also allowed increased provisioning on residual NPLs
that mostly include unlikely-to-pay (UTP) exposures. The bank in
February 2018 spun-off about EUR3 billion of doubtful loans in a
newly created company (NewCo) owned by UG and UnipolSai, thus
reducing its pro-forma gross impaired loans ratio to around 10%
at end-2017 from over 35% at end-1H17.

Unipol Banca expects to maintain an NPL ratio at around 13.5% (as
calculated by the bank) throughout its strategic plan to 2020 and
coverage levels in line with best industry practices at over 60%
on doubtful loans and around 40% on UTP. 2018 coverage ratios
will further benefit from the first time adoption of IFRS9. Flows
of new impaired loans have been declining since 2015 and should
contribute to meeting these objectives.

However, despite these improvements, the VR also reflects Unipol
Banca's structurally weak operating profitability, reflecting
poor revenue generation from a franchise that lacks depth and
size, but also high operating costs and loan impairment charges
(LICs). Following the restructuring, Fitch expect profitability
to benefit from lower LICs but a full turnaround is contingent on
a sustainable and acceptable level of earnings generation from
core business and improved operating efficiency. The bank's track
record on achieving these objectives is largely untested given
its weak performance track record to date.

Following the capital injection, the common equity tier 1 (CET1)
ratio rose to about 15.2% at end-2017, but is estimated to have
decreased to around 10.8% on a fully-loaded basis after the bank
transferred its portfolio of NPLs, other assets and EUR313
million of capital to the NewCo in early 2018. Unipol Banca's
capitalisation will benefit from reduced encumbrance by
unreserved impaired loans, which had already decreased to below
100% at end-2017 (following the capital increase but excluding
the NPLs and capital transferred to the NewCo). Fitch expects the
bank to maintain its unreserved impaired loans/ Fitch Core
Capital (FCC) ratio below this threshold in the medium-term but
for it to remain high compared with stronger domestic banks and
international averages.

Unipol Banca is mainly funded by deposits. Total central bank
funding utilisation remained stable during 2017 at about 5% of
the bank's total assets, which is limited relative to other
domestic peers. Unipol Banca's standalone liquidity profile
benefits from the bank being part of UG group, given the latter's
ability to provide liquidity if necessary, which, in Fitch
opinion, improves the stability of the subsidiary's deposit base
and remains important in Fitch assessment of liquidity.

RATING SENSITIVITIES
IDRS AND SR

Unipol Banca's IDRs and SR are sensitive to a change in UG's
ability and propensity to support the bank subsidiary. This means
that the bank's IDRs are primarily sensitive to changes in UG's
ratings. The ratings would also be affected by a change in Fitch
assessment of UG's propensity to support Unipol Banca. A sale of
the bank or a reduction in UG's stake in the subsidiary would
likely diminish the parent's propensity to provide support.

VR
The VR could be upgraded if Unipol Banca demonstrates its ability
to implement its declared strategy and achieve a sustainable
turnaround in structural profitability while maintaining adequate
capital levels and strong control on its asset quality. The
rating could be downgraded if the bank fails to return to
profitability and if impaired loans increase significantly and
weigh heavily on its capitalisation.

The rating actions are:

Long-Term IDR: affirmed at 'BB'; Outlook Stable
Short-Term IDR: affirmed at 'B'
Viability Rating: affirmed at 'b'
Support Rating: affirmed at '3'


===========
L A T V I A
===========


ABLV: Forced Liquidation Humiliation for EU, Latvia Authorities
---------------------------------------------------------------
Richard Milne at The Financial Times reports that the forced
liquidation of ABLV, Latvia's third-biggest bank, following US
assertions of "institutionalized money laundering" -- including
violations of North Korean sanctions -- is a humiliation for both
Latvian and European authorities.

According to the FT, Europe's top financial regulator,
Daniele Nouy of the European Central Bank, told a member of the
European Parliament last week: "I agree with you it's very
embarrassing to depend on the US authorities to do the job."

Concerns about the high level of deposits from foreigners, or
non-residents, were raised during Latvia's accession to both the
euro and the OECD this decade, the FT relates.  But despite a
crackdown by Latvian regulators in recent years, a red line for
the US was crossed by the alleged breach of international
sanctions on North Korea, the FT notes.

The US went public with its claims against ABLV in February,
saying that the lender had "facilitated transactions related to
North Korea" even after announcing a no- tolerance policy in the
summer of 2017, the FT discloses.  Just 10 days later, the ECB
pulled the plug on the Latvian bank, the FT recounts.

The affair has revealed serious deficiencies in how Europe fights
money laundering, the FT states.  Competence for checking
breaches of anti-money laundering rules lies with national
authorities, not with the ECB, which was the banking supervisor
of ABLV, according to the FT.

Latvia's financial regulator says that the allegations against
ABLV were historical and already covered by a fine and remedies
imposed in 2016, the FT discloses.

ABLV also raises awkward questions for the ECB, the FT says.
Even though it has no competence for money laundering, the ECB's
supervision arm -- the Single Supervisory Mechanism --
scrutinizes the business models and governance of banks, the FT
states.

According to the FT, Dana Reizniece-Ozola, Latvia's finance
minister nd Ms. Nouy argue that Europe could or should have some
sort of centralised body for dealing with money laundering.  But
it is unclear how much political will there is to take the
problem seriously, the FT relays.

For a bank that had just EUR3.6 billion in assets, ABLV has
highlighted big problems in how European banks and regulators
handle money laundering, the FT states.  Urgent action is
required, according to the FT.


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


SYNCREON GROUP: S&P Cuts Long-Term ICR to 'CCC+', Outlook Stable
----------------------------------------------------------------
S&P Global Ratings said that it lowered its long-term issuer
credit rating on Michigan-based logistics services provider,
syncreon Group Holdings B.V. to 'CCC+' from 'B-'. The outlook is
stable.

S&P said, "At the same time, we lowered our issue rating on
syncreon's $525 million senior secured term loan maturing in
October 2020 and $100 million senior secured revolving credit
facility (RCF) to 'CCC+' from 'B-'. The recovery rating is '4',
indicating our expectation of modest recovery prospects (30%-50%;
rounded estimate: 40%) in the event of a payment default.

"We have also lowered to 'CCC-' from 'CCC' our issue rating on
the $225 million senior unsecured notes that mature in October
2021. The recovery rating is '6', indicating our expectation of
negligible recovery prospects (0%-10%) in the event of a payment
default.

"In 2016, syncreon embarked on a growth plan targeted at
broadening its brand awareness and strengthening its offerings
within logistics services in the technology and automotive
sectors. We acknowledge that the company won new contracts
throughout 2017 with both existing and new clients, particularly
in the automotive sector. We expect this will contribute to
revenue growth in 2017 and 2018.

"However, we also note that pricing pressure and weaker volumes,
alongside the group's expansionary operational and capital
investments, weighed on its operating performance in 2017,
particularly in its technology business. As a result, we expect
syncreon's full-year 2017 results will be materially weaker than
our projections. In particular, we expect syncreon's reported
EBITDA margins will be about 200 basis points (bps) lower than we
previously forecast, at 5%-6%, resulting in substantially lower
free operating cash and weaker interest coverage metrics than we
expected.

"We view positively the steps that the company has taken to
address its near-term liquidity issues through the recently
announced amendment and extension of the $100 million senior
secured RCF." Under the terms of the agreement, the maturity of
the facility has been extended to the end of October 2020, in
line with the maturity on the group's senior secured term loan.
In addition, syncreon has removed the existing springing senior
secured net leverage covenant, which will increase the
availability of funds under the facility. In return, the group
will pay a higher rate of cash-paying interest. Syncreon will
also commit to contributing to the group the interest payable on
the proportion of its $225 million senior unsecured notes--which
are held outside the restricted group by the the group's holding
company--in the form of a secured loan. This will provide
additional liquidity.

At the same time, the group announced that it has entered into an
asset-backed facility of up to $100 million secured against a
proportion of the group's total receivables, the proceeds of
which will be used to repay a secured bridging facility provided
by the group's holding company from outside the restricted group.
Despite paying a higher rate of cash interest than the term loan
and RCF, S&P views this facility as super-senior to the
aforementioned facilities because, under the terms of the
transaction, the security will be transferred out of the
restricted group on a nonrecourse basis.

S&P said, "We acknowledge the actions the group has taken to
address its near-term liquidity issues. However, we expect that
without a significant improvement in operating performance and
working capital management over the next two years, the addition
of further cash-interest-paying instruments, and an increase in
the interest rate on the existing RCF will result in credit
metrics remaining in-line with the current elevated levels. At
these levels, we would consider metrics to be unsustainable and
the successful refinancing of the senior secured term loan and
RCF in 2020 to be reliant on favorable business, financial, and
economic conditions, assuming no financial improvement.

"The stable outlook reflects our view that the group's treasury
policies have resolved the group's liquidity issues for the next
12 months.

"However, we base the current 'CCC+' rating on our assessment
that the addition of new cash-interest-paying facilities and
increased interest on the RCF will result in credit metrics
remaining at current levels. At these levels, we would consider
the group to be reliant on favorable business, financial, and
economic conditions, to successfully refinance its capital
structure in 2020, absent financial improvement.

"We could take a negative rating action if the company fails to
materially improve its operating performance and cash generation
in 2018, such that we see a heightened risk of financial
restructuring.

"We consider a positive rating action to be unlikely in the short
term due to our expectation of continued free operating cash
consumption. We could take a positive rating action if the
group's operating performance were to materially improve,
resulting in an expectation of sustainable, positive free
operating cash flow, which we would consider supportive of a
successful refinancing of the group's capital structure in 2020."


===========
P O L A N D
===========


BANK MILLENNIUM: Moody's Affirms ba2 Baseline Credit Assessment
---------------------------------------------------------------
Moody's Investors Service has affirmed Bank Millennium S.A.'s
Baa3/Prime-3 long-term (LT) and short-term (ST) deposit ratings,
its ba2 baseline credit assessment (BCA) and Adjusted BCA, and
its Baa2(cr)/Prime-2(cr) LT and ST Counterparty Risk Assessments
(CR Assessment). The outlook on the LT deposit ratings has been
changed to positive from stable.

This rating action is subsequent to the rating action on the
parent Banco Comercial Portugues, S.A. (BCP: LT Deposits B1,
Positive; BCA b2) on March 22, 2018, where BCP's ratings and
ratings inputs were affirmed and the outlook on senior ratings
was changed to positive from stable.

RATINGS RATIONALE

DEPOSIT RATINGS AND COUNTERPARTY RISK ASSESSMENT

The affirmation of Bank Millennium long-term deposit ratings
follows the affirmation of the bank's BCA and Adjusted BCA and
incorporates Moody's Advanced Loss Given Failure (LGF) analysis
that indicates a very low loss-given-failure for junior
depositors of Bank Millennium, resulting in a two-notch uplift in
the deposit ratings from the bank's Adjusted BCA. Moody's has
maintained its assessment of low probability of government
support for bank's junior depositors which does not result in any
additional uplift in deposit ratings.

As part of rating action, Moody's has also affirmed the LT and ST
CR Assessments of Bank Millennium, following the affirmation of
the bank's adjusted BCA. The CR Assessment is positioned three
notches above the Adjusted BCA, reflecting Moody's view that its
probability of default is lower than that of deposits due to a
significant cushion against default provided by the moderate
volume of junior deposits.

CR Assessments are opinions of how counterparty obligations are
likely to be treated if a bank fails, and relate to a bank's
contractual performance obligations (servicing), derivatives
(e.g., swaps), letters of credit, guarantees and liquidity
facilities. Senior obligations represented by the CR Assessment
will be more likely preserved in order to limit contagion and
avoid disruption of critical functions.

STANDALONE BASELINE CREDIT ASSESSMENT AND ADJUSTED BASELINE
CREDIT ASSESSMENT

The affirmation of Bank Millennium's BCA reflects its (1) largely
stable asset quality with non performing to gross loans ratio of
4.57% and satisfactory loan loss provision to non-performing
loans of 66%; (2) adequate capital position with Core Equity Tier
1 over risk weighted ratio of 20.03% and over total assets of
9.2% and (3) good earnings generation with net income of 0.96% of
tangible assets as of yearend-2017. Although gradually declining,
FX mortgages still amount to 30.0% of the bank's gross loans, the
highest proportion amongst its peers, as of yearend-2017. The
strong capital and earnings of the bank provide resilience to the
expected impact of the regulatory proposals regarding foreign-
exchange mortgage conversion measures in Poland. Bank
Millennium's overall liquidity profile is sound, supported by
primarily domestic deposits funding with loan-to-deposit ratio of
85% but has a high derivatives reliance to finance FX-mortgages.

Furthermore, Moody's consider that subsidiaries are likely to be
affected by the weaker credit profile of their parent. As a
result, this rating action follows the affirmation of Bank
Millennium's parent BCP and its outlook change to positive from
stable. Bank Millennium's BCA is positioned three-notches higher
than its parent's. The three notch difference, which also acts as
a constraint on the bank's BCA, is underpinned by the limited
operational inter-linkages, full funding independence from the
parent, and close regulatory supervision by the Polish Financial
Supervision Authority. Therefore, a potential upgrade of BCP's
BCA indicated by recently assigned positive outlook on its
deposit ratings will result in the BCA constraint on Bank
Millennium to move in tandem.

OUTLOOK CHANGE TO POSITIVE FROM STABLE

The outlook change to positive from stable on Bank Millennium's
LT deposit ratings follows a similar change on BCP's ratings,
indicating the upward pressure on the bank's BCA. Based on the
current constraint of Bank Millennium's BCA at three notches
above the BCA of its parent as well as assuming unchanged limited
inter-linkages between parent and subsidiary bank, Moody's
expects to reflect improvements in BCP's credit profile over the
next 12 to 18 months in Bank Millennium's BCA. These assumptions
are reflected in the positive outlook on the bank's ratings.

WHAT COULD MOVE THE RATING -- UP/DOWN

A improvement, or deterioration, in the country's Macro Profile,
and/or in bank's or BCP's standalone financial metrics may have
positive or negative rating implications. A material reduction in
the banks' foreign currency-mortgage exposure, without a
significant adverse cost could provide positive pressure on the
bank's ratings in tandem with continued improvement in BCP's BCA.
An adverse policy proposal in Poland on foreign currency
mortgages that will result in Polish banks bearing a higher-than-
anticipated burden in Moody's sensitivity studies would result in
negative rating implications.

A change in the banks' liability structures may change the uplift
provided by Moody's Advanced LGF analysis and lead to a higher or
lower notching from the banks' adjusted BCAs, thereby affecting
deposit ratings.

LIST OF AFFECTED RATINGS

Issuer: Bank Millennium S.A.

Affirmations:

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

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

-- Adjusted Baseline Credit Assessment, affirmed ba2

-- Baseline Credit Assessment, affirmed ba2

-- Long-term Counterparty Risk Assessment, affirmed Baa2(cr)

-- Short-term Counterparty Risk Assessment, affirmed P-2(cr)

Outlook Action:

-- Outlook changed to Positive from Stable

PRINCIPAL METHODOLOGY

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


PFLEIDERER GROUP: S&P Alters Outlook to Stable & Affirms B+ ICR
---------------------------------------------------------------
S&P Global Ratings revised to stable from positive its outlook on
Poland-based wood panels producer Pfleiderer Group S.A. and its
wholly-owned German subsidiary PCF GmbH. S&P affirmed its 'B+'
long-term issuer credit ratings on the companies.

S&P said, "We also affirmed our 'B+' issue rating on the EUR350
million senior secured loan due 2024 borrowed by PCF GmbH and the
EUR100 million revolving credit facility (RCF) available to the
major companies of the Pfleiderer Group S.A., including PCF GmbH.
The recovery rating remains unchanged at '4', indicating average
recovery prospects (30%-50%; rounded estimate: 40%) in the event
of default.

"The outlook revision reflects our expectation that Pfleiderer's
profitability and credit metrics are likely to remain unchanged
in the next 12 months. We lowered our credit metrics expectations
for 2018 and now view an upgrade as less likely.

"In 2018, we expect S&P Global Ratings-adjusted EBITDA margins to
improve to 14%, due to price increases effective from January
2018, volume growth, and cost savings. Nevertheless, we think S&P
Global Ratings-adjusted EBITDA margins will fall short of our
previous expectation of about 16%.

"For 2018, we now expect FFO to debt of 20% and debt to EBITDA to
be 3.8x, compared with 33% and 2.5x previously.

"The market is relatively consolidated among the four major
players. Although the company is able to pass cost increases on
to customers, it is only able to do so with a time lag of three-
to-four months. In 2017, this resulted in some margin erosion. We
expect price increases, volume growth, and product mix
improvements to improve EBITDA margins from 2018 onward.

"We view Pfleiderer's financial policy as shareholder-friendly
and potentially detrimental to cash generation. Although we
expect capital investments to improve its competitive position in
the long term, they will undermine the group's cash flow
generation in the short term. Pfleiderer's ownership structure is
dominated by investors (Atlantik and SVP Global), which we view
as potentially aggressive. They could implement larger share buy-
backs than we forecast notably if Pfleiderer's share price falls
short of expectations. However, we also believe that these two
shareholders could sell their shares in the medium term if
Pfleiderer's share price continues to develop positively.

"We consider Pfleiderer's credit metrics to be weaker than peers'
and we reflect this in our negative comparable ratings analysis
modifier."

Pfleiderer's business risk profile is constrained by its exposure
to the highly cyclical and commoditized wood-based panels
industry, characterized by price-based competition, volatile
demand, and a high sensitivity to raw material costs. Pfleiderer
has leading market positions in Germany and Poland (especially in
raw and higher value-added particleboard and MDF product
categories).

S&P said, "Our assessment is constrained by Pfleiderer's
relatively limited size and scope, with production concentrated
at eight sites in Germany and Poland, and a major portion of
sales from the European markets. We also consider Pfleiderer's
historical underinvestment in core assets as a constraint,
although this is somewhat mitigated by recent investments to
improve the efficiency of its plants. We believe that
Pfleiderer's profitability will remain highly dependent on the
general economic environment, its ability to implement price
increases, and cost-saving initiatives. We also believe that a
decline in consumer confidence could hamper sales and that any
additional restructuring costs could impact margins.

"That said, we think that Pfleiderer will continue to benefit
from strong market sentiment in Germany and Poland, a low-cost
base in Poland, its focus on value-added products and cost
savings, and the ongoing integration of the German and Polish
business units."

S&P's base case for 2018 and 2019 assumes:

-- Eurozone GDP growth of 2.0% and 1.7% in 2018 and 2019;
    Germany GDP growth of 1.9% and 1.7%; and Poland GDP growth of
    3.8% and 3.5%.

-- Organic sales of growth of about 6% and 5% in 2018 and 2019,
    respectively, supported by the positive macroeconomic
    environment, especially in Poland. Growth is largely from
    investments in value-added products such as ramping up a new
    lacquering line in Leutkrich.

-- Higher adjusted EBITDA margin of 14.0% in 2018 and 14.5% in
    2019.

-- S&P expects improved pricing, higher volumes, and cost
    reduction initiatives to offset higher wood and glue prices.

-- Capital expenditure (capex) of about EUR80 million in 2018
    and 2019, including maintenance capex of about EUR20 million.

-- Annual dividends in the range of EUR17 million to EUR25
    million in 2018 and 2019.

-- Share buybacks of about EUR35 million in 2018.

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

-- S&P Global Ratings-adjusted FFO to debt of 22.5% in 2018 and
    24.5% in 2019.

-- Adjusted debt to EBITDA of 3.3x in 2018 and 3.0x in 2019.

S&P said, "The stable outlook takes into account our expectations
that Pfleiderer's operational performance will improve slightly
in 2018 and that this, together with a supportive financial
policy, will allow the company to maintain rating-commensurate
ratios, such as FFO to debt ratio of about 22% over the next 12
months.

"We could raise the rating if Pfleiderer's resilient earnings and
improving profitability lead to its adjusted FFO-to-debt ratio
reaching 25%--the level we view as commensurate with a higher
rating--and we believe that this level is sustainable. This could
happen if Pfleiderer continues to improve its product mix and
improve its cost base via efficiency measures. For an upgrade we
would also need to believe that the risk of higher leverage was
low and that Pfleiderer's shareholders were not going to
implement a more aggressive financial policy.

"Although unlikely in the next 12 months, we could lower the
rating if operating performance deteriorated sharply or if
restructuring costs continued to be high, resulting in FFO to
debt of less than 15%. We could also lower the rating if
Pfleiderer engaged in large-scale debt-funded shareholder returns
or acquisitions."


VIATRON SA: Gdansk Court Opens Arrangement Proceedings
------------------------------------------------------
Reuters reports that Herkules SA said the court in Gdansk opens
arrangement proceedings for the company's unit Viatron SA.

Viatron S.A., a crane company, installs and assembles wind
turbines primarily in Poland.


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


AHML 2011-2: S&P Puts BB+(sf) Class A2 Notes Rating on Watch Pos.
-----------------------------------------------------------------
S&P Global Ratings placed on CreditWatch positive its 'BB+ (sf)'
credit rating on the class A2 notes issued by CJSC 'Mortgage
Agent of AHML 2011-2'.

S&P said, "The CreditWatch positive placement follows our Feb.
23, 2018 raising of our long-term foreign currency sovereign
credit rating on Russia to 'BBB-' from 'BB+' and the subsequent
raising of our issuer credit rating (ICR) on VTB Bank JSC on
March 6, 2018.

"The March 2018 upgrade of VTB Bank raised the effective
counterparty cap in this transaction to 'BBB' from 'BB+',
according to the contractual replacement language in the
transaction documents and following the application of our
current counterparty criteria. The transaction is also capped at
our ICR on DPM.RF JSC (previously Agency for Housing Mortgage
Lending OJSC; BB+/Positive/B) acting as a master servicer and a
financial aid provider to the issuer. We will review the scope of
the transaction's dependency on DOM.RF, considering the
significant increase in the available credit enhancement for the
class A2 notes and the changes in the fast-evolving mortgage
market in Russia since our previous review.

"We aim to resolve the CreditWatch placement in the course of a
full surveillance review within the next 90 days."


MORTGAGE AGENT 3: S&P Puts 'BB+(sf) A Notes Rating on Watch Pos.
----------------------------------------------------------------
S&P Global Ratings placed on CreditWatch positive its 'BB+ (sf)'
credit rating on 'Mortgage Agent Absolut 3' LLC's class A notes.

S&P said, "The CreditWatch positive placement follows our Feb.
23, 2018 raising of our long-term foreign currency sovereign
credit rating on Russia to 'BBB-' from 'BB+' and the subsequent
raising of our issuer credit rating (ICR) on VTB Bank JSC on
March 6, 2018.

"Our current counterparty criteria constrain our rating on the
class A notes at the ICR on VTB Bank due to the issuer's
inability to find an eligible successor in 2015 when the
replacement trigger was hit. Consequently, the March 2018 upgrade
of VTB Bank has raised the effective counterparty cap in this
transaction.

"We aim to resolve the CreditWatch placement in the course of a
full surveillance review within the next 90 days."


SKB-BANK: Fitch Affirms and Then Withdraws B- IDR
-------------------------------------------------
Fitch Ratings has affirmed Russian-based SKB-Bank's (SKB) Long-
Term Issuer Default Rating (IDR) of 'B-' with Stable Outlook.
Fitch has simultaneously withdrawn the ratings for commercial
reasons and will no longer provide ratings and analytical
coverage of SKB.

KEY RATING DRIVERS

The affirmation of SKB's ratings reflects limited changes to the
bank's credit profile since the last review in November 2017. The
ratings factor in the bank's limited franchise, vulnerable
business model reliant on retail customers, significant related-
party exposure and still weak asset quality metrics. For more
details see 'Fitch Affirms SKB, Maintains APB and UTB on RWN'
dated 14 November 2017 on www.fitchratings.com.

RATING SENSITIVITIES

Not applicable.

The rating actions are as follows:

Long-Term IDR affirmed at 'B-'; Outlook Stable; withdrawn
Short-Term IDR affirmed at 'B'; withdrawn
Support Rating affirmed at '5', withdrawn
Support Rating Floor affirmed at 'No floor'; withdrawn
Viability Rating affirmed at 'b-'; withdrawn


SOVCOMBANK: Moody's Affirms Ba2 LT Counterparty Risk Assessment
---------------------------------------------------------------
Moody's Investors Service has affirmed Sovcombank's Ba3/NP long-
and short-term global local and foreign currency deposit ratings
and ba3 baseline credit assessment (BCA). Moody's also affirmed
Sovcombank's Ba2(cr)/NP(cr) long- and short-term Counterparty
Risk Assessments respectively. All long term deposit ratings have
a stable outlook. A full list of affected ratings can be found at
the end of this press release.

The affirmation of Sovcombank's ratings follows the announcement
on March 13, 2018 by Sovcombank that it would increase its
ownership in Rosevrobank (not rated) to 92% effective stake from
the current 45%. Sovcombank expects to close the acquisition in
H1 2018, subject to regulatory approvals, and to merge with
Rosevrobank in 2019.

Following consolidation with Rosevrobank, Sovcombank's
consolidated assets will increase by around 30% and the group
will become the 11th largest bank in Russia by total assets.

RATINGS RATIONALE

The affirmation of Sovcombank's ratings reflects Moody's
expectation that its credit profile, following the acquisition
and merger with Rosevrobank, will remain stable over the next 12-
18 months. Moody's also expects that in the longer term
Sovcombank will benefit from the merger because the banks'
business models complement one another well, and the merger will
create a large and diversified financial institution.

Moody's expects that solvency metrics of the combined bank will
remain solid, supported by good asset quality, strong
profitability and healthy capital position of both banks.

The rating agency estimates that as a result of acquisition and
subsequent consolidation, Sovcombank's consolidated Tangible
Common Equity ratio (Moody's key measure of capital) will
initially decline, but remain solid, above 13% by the end of 2018
(14.5% as at end of September 2017) and commensurate with Ba-
rated peers, supported by strong internal capital generation.

Sovcombank will continue to report strong profitability, reducing
its reliance on one-off gains. Moody's estimated that, Sovcombank
and Rosevrobank combined IFRS net profit was RUB 25.4 billion as
at September 30, 2017, which translated into a strong annualized
Return on combined Average Assets of around 4.4%. Moody's expects
that Sovcombank's robust recurring profitability will sustain in
the long term, and will benefit from Rosevrobank's low cost of
funding, strong fees and commissions and cost-efficient business
model.

Asset quality is another relative credit strength for both banks
and Moody's expects that the combined entity will benefit from
Sovcombank and Rosevrobank's good asset diversification with
significant exposure to creditworthy customers from corporate and
sub-sovereign sectors and increased focus on secured retail
loans. At the end of Q3 2017, Sovcombank and Rosevrobank Non-
Performing loans (loans overdue more than 90 days) accounted for
2.8% and 2.0% of their gross loans, respectively, and were
sufficiently covered by loan loss reserves. At the same time
Sovcombank will remain exposed to an elevated market risk given
that the bank's fixed income portfolio accounted for around 50%
of total assets or over 400% of the bank's equity as of September
30, 2017. The portfolio is predominantly consisted of Russian
Eurobonds and bonds issued by government related issuers rated Ba
with a relatively short duration and bear limited credit risk.

Moody's also expects Sovcombank's liquidity profile to remain
healthy over the next 12-18 months. Sovcombank's funding base
mainly comprising retail deposits will benefit from Rosevrobank's
focus on corporate deposits and will become more balanced and
diversified with reduced reliance on interbank funding related to
Repo transactions.

In addition, Sovcombank's successful experience in merging and
integrating banks in recent years significantly reduces execution
risks.

WHAT COULD MOVE THE RATINGS UP/DOWN

An upgrade in the bank's ratings could result from a longer track
record of sustainable and robust financial performance or if the
bank, given its increased asset base is designated as a
systemically important financial institution.

Conversely, the ratings could be downgraded if there were a sharp
deterioration in the operating environment in Russia that would
lead to a substantial deterioration of the bank's asset quality,
capitalization or liquidity profile.

LIST OF AFFECTED RATINGS

Issuer: Sovcombank

Affirmations:

-- LT Bank Deposits, Affirmed Ba3, Outlook remains Stable

-- ST Bank Deposits, Affirmed NP

-- Adjusted Baseline Credit Assessment, Affirmed ba3

-- Baseline Credit Assessment, Affirmed ba3

-- LT Counterparty Risk Assessment, Affirmed Ba2(cr)

-- ST Counterparty Risk Assessment, Affirmed NP(cr)

Outlook Actions:

-- Outlook, Remains Stable

PRINCIPAL METHODOLOGY

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



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


BANCO POPULAR: Bondholders Launch Legal Proceedings in N.Y. Court
-----------------------------------------------------------------
Robert Smith at The Financial Times reports that bondholders who
had their investments in Banco Popular wiped out last year have
launched fresh proceedings in a New York court, in a bid to bring
the powers of the US legal system to bear on their existing
action against European authorities.

US investors Pimco and Anchorage Capital filed a petition in a
New York court late on April 3, the FT relates.  According to the
FT, the investors are looking to uncover documents and
communications relating to Santander's purchase of Banco Popular
in June last year.  Spain's largest lender bought Popular for a
symbolic price of EUR1 after EU authorities declared the Madrid-
based lender "failing or likely to fail".

Investors have attempted to obtain documents used in the handling
of the crisis at Banco Popular, including a report by Deloitte
valuing the lender, but so far only a redacted version of the
document has been released, the FT notes.

It also follows a similar move by a group of Mexican shareholders
in the collapsed lender, who last month filed proceedings in the
same New York court, the FT recounts.

The shareholders and bondholders are trying to use a US federal
law designed for claimants in foreign proceedings, as long as a
respondent is "found" in the relevant US district, the FT
discloses.

According to the FT, Richard East, lead partner at the bondholder
group's law firm Quinn Emanuel, said that they made the
application to support their existing legal actions in Luxembourg
and Spain.  The bondholders' main avenue of redress is a claim at
the European Court of Justice against the EU authorities that
engineered the sale and rescue of Popular.

"Santander was the principal and significant beneficiary of the
resolution action," the FT quotes Mr. East as saying.  "It is
only right that they be required to disclose key documents about
their involvement in the purchase of Banco Popular, which led to
the loss of our clients' investments."

Investors have raised a series of questions about the process
that led to the sale, not least how Banco Popular was valued, why
other offers of help were not taken up and why the bank ran out
of emergency liquidity so quickly, the FT relays.

                       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.


NH HOTEL: Fitch Raises Long-Term IDR to B+, Outlook Positive
------------------------------------------------------------
Fitch Ratings has upgraded NH Hotel Group S.A.'s (NH) Long-Term
Issuer Default Rating (IDR) to 'B+' from 'B'. The Outlook is
Positive. Fitch has also upgraded NH's senior secured rating to
'BB' with Recovery Rating 'RR2' from 'BB-' with Recovery Rating
'RR2'.

The upgrade reflects a marked improvement in NH's operating
performance and leverage metrics. The improvement capex plan
deployed since 2015, coupled with a more efficient cost structure
and effective pricing management, has enabled NH to reposition
its offer along a more upscale segment, reduce costs and increase
profit margin. NH has also reduced its gross debt levels.

The Positive Outlook reflects Fitch expectation of further
profitability and free cash flow (FCF) improvements over the next
two years, as well as scope for further deleveraging towards the
'BB' territory. Conversion of NH's EUR250 million convertible
bond by end-2018 would enhance the group's capital structure.
Conversely if NH chooses to allocate its operating cash flow
generation to larger capex, M&A or shareholder returns, the
rating would likely remain at 'B+'.

KEY RATING DRIVERS

Solid Operational Performance to Continue: The 2017 operating
performance of NH illustrated the benefits from its heavy
improvement capex over 2014-2017. Those refurbishments allowed
increases in average room rates (ADR) of 21% since 2014, and 4.9%
in 2017 alone, confirming the move away from lower-margin tour
operator bookings. The next few years should continue to benefit
from the improvement capex investments.

Marked Deleveraging Path: Leverage metrics have markedly improved
over the past two years, mostly due to enhanced profitability,
and should continue to exhibit a deleveraging trend, solidly
anchoring NH in the mid-to-upper range of the 'B' category. Funds
from operations (FFO) lease-adjusted leverage declined to 6.0x at
end-2017 from 8.6x at end-2015, and Fitch expect this ratio to
sustainably trend towards 5.5x by 2019-2020, excluding the
conversion of the EUR250 million convertible bond. Such
conversion (in October 2018 at the latest) would further
accelerate deleveraging to around 5.0x, and lead leverage metrics
towards the 'BB' category.

Lease Portfolio Optimisation: The lease-adjusted leverage metrics
remain impacted by a rather high burden of operating leases,
accounting for around 76% of total adjusted indebtedness of the
group after a 7.7x capitalisation. Most of these leases are fixed
leases. NH has been actively renegotiating or cancelling some
onerous leases, leading to a dramatic reduction of the number of
hotels displaying negative EBITDA, to just 15 hotels in 2017 from
92 in 2013, and this active renegotiation policy is continuing.
The introduction of a lease cancellation option in case of losses
mitigates the risk of negative EBITDA in a downturn.

Enhanced Financial Flexibility: NH has further enhanced its
financial flexibility in 2017 due to the voluntary redemption and
cancellation of its EUR100 million 2019 bond. Taking aside the
convertible maturing in October 2018 (which could be fully repaid
by cash and by drawing on an EUR250 million undrawn revolving
credit facility (RCF) should it not convert), the next sizeable
debt maturity for NH is in 2023 for EUR400 million. NH has also
lowered its average cost of debt to 3.9% (from 4.7%). A sizeable
unencumbered asset base (market value at around EUR1.3 billion as
of end-2017), is also a positive for NH's future financial
flexibility and supports the ratings.

Structurally Boosted Profitability: NH's 2017 results showed an
EBITDA margin increase of 3.8 percentage points, reflecting the
strategic repositioning of the group to a more upscale and
profitable offer, coupled with cost control measures that saw
staff cost and operating expenses rising slower than revenue.
Active management of pricing and a growing proportion of internet
bookings also supported the increase in profitability.

DERIVATION SUMMARY

Fitch views NH's operations as slightly weaker than those of
major European peers such as Melia Hotels International and Accor
SA (BBB-/Positive). NH focuses on urban cities and business
travellers, while Accor and Melia benefit from being better
diversified across leisure and business customers. Accor has more
hotel brands across the hotel spectrum but NH has been
diversifying upscale with its NH Collection brand, which makes up
20% of rooms. Also, NH's FFO lease adjusted net leverage at 5.9x
(adjusted for variable leases) at end-2017 is higher than its
peers' due to a large exposure to fixed and variable leases. In
this respect NH remains a more asset-heavy hotel group than peers
although the use of management contracts has increased and now
represents around 23% of the total hotel portfolio. NH
nevertheless owns a material proportion of its hotel assets,
which provides some flexibility in a downturn.

KEY ASSUMPTIONS

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

- Stable occupancy, with revenue per available room (RevPAR)
   increasing on average by around 1.5% p.a.
- EBITDA margin stabilising at 16.8%
- Operating lease costs around 19.5% of sales after the sale
   leaseback and new openings of leased rooms
- Capex in line with management projections reflecting the New
   York refurbishment and expansion plan
- Conversion of EUR250 million convertible bond into equity in
   October 2018
- Progressive dividend policy in line with management's guidance

NH's Recovery Rating 'RR2 ' for the senior secured notes' rating
reflects the collateral assets of the EUR400 million secured
notes and the EUR250 million RCF, which rank equally with each
other. Collateral includes hotels with a market value of EUR261
million and share pledges on companies operating and owning
hotels with a market value of EUR847 million at end-December
2016.

The expected distribution of recovered proceeds results in
potential full recovery for senior secured creditors, including
for senior secured bonds. The Recovery Rating is, however,
constrained by Fitch's country-specific treatment of Recovery
Ratings for Spain, effectively capping the uplift from the IDR to
two notches at 'BB'/'RR2'.

RATING SENSITIVITIES

Developments That May, Individually or Collectively, Lead to
Positive Rating Action
- Continued momentum in operating profile improvement measured
   in terms of EBIT margin (2017: 8.1%) and RevPar (FY17:
   EUR67.4) uplift.
- FFO lease-adjusted net leverage below 5x on a sustained basis
   (2017: 5.9x).
- EBITDAR/gross interest +rent consistently above 1.8x (2017:
   1.6x).
- Sustained positive FCF.

Developments That May, Individually or Collectively, Lead to
Negative Rating Action including a revision of Outlook to Stable
- Weakening trading performance leading to group EBIT margin
   (excluding capital gains) trending toward 6%.
- FFO lease-adjusted net leverage above 5.5x on a sustained
   basis.
- EBITDAR/(gross interest +rent) below 1.3x.
- Evidence of continuing moderately negative FCF.
- Non-conversion of the EUR250 million convertible bond
   affecting the liquidity profile.

LIQUIDITY

Strong Liquidity: With the signing of the five-year EUR250
million RCF in September 2016, NH has significantly enhanced its
liquidity profile, providing substantial operational and
financial flexibility. The RCF remained undrawn at end-2017 and
provides a healthy liquidity buffer, in addition to EUR80 million
of cash on balance sheet. The cash balance increased in February
2018 after the sale and lease-back of the Barbizon Palace in
Amsterdam, which represented a net cash proceed of EUR122
million. Available liquidity is solid, enabling the group to
repay the EUR250 million convertible bonds due in October 2018
should bondholders decide not convert at that time. In addition
the EUR115 million tap issue on the existing EUR285 million 2023
bond and early redemption of the EUR100 million 2019 bond in cash
demonstrated NH's proactive financial management to lower
interest costs and further de-leverage the group's balance sheet.
The EUR1.3 billion of un-encumbered asset base provides
additional financial flexibility.


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


GATEGROUP HOLDING: S&P Affirms 'B-' ICR, Off Watch Positive
-----------------------------------------------------------
S&P Global Ratings affirmed its 'B-' long-term issuer credit
rating on Switzerland-based airline solutions provider gategroup
Holding AG and removed the rating from CreditWatch with positive
implications where it was placed on March 8, 2018. The outlook is
stable.

S&P said, "Our removal of the rating from CreditWatch positive
reflects the recent announcement from the company, and its parent
HNA Group, that it will not pursue its intended IPO of about 65%
of its share capital due to unfavorable market conditions.

"We continue to consider gategroup as part of the HNA Group and
our issuer credit rating on gategroup is therefore materially
affected by our view of HNA Group's weaker overall credit
standing. Looking at gategroup on a stand-alone basis, we do not
have any current liquidity concerns, nor do we believe that the
company is dependent on favorable business, financial, or
economic conditions to meet its financial commitments. The
company's 2017 financial results to Dec. 31, 2017 were fully in
line with our expectations, and we believe that its market
position in airline catering remains strong. The SACP for
gategroup therefore remains 'bb'."

S&P's base-case scenario for gategroup includes:

-- In 2018 and 2019, S&P assumes sales growth of between 3.5%
    and 6.0% per year due to the full-year effect of the Servair
    acquisition and the opening of operations in South Korea.
    More than 2.0% of the growth is linked to its weighted-
    average GDP growth forecast for all the countries in which
    the company generates revenue.

-- S&P's unadjusted EBITDA margin to improve to about 6.4% in
    2018 (from 6.0% in 2017) on the back of direct cost savings,
    synergies from acquisitions, and a stricter contract renewal
    process.

-- Capital expenditure (capex) of about Swiss franc (CHF) 180
    million in 2018 and CHF125 million in 2019.

-- S&P includes AirFranceKLM's put option -- currently valued at
    about CHF260 million -- to sell its remaining 50% stake in
    Servair to gategroup as a debt-like obligation in our base-
    case scenario.

-- No material acquisitions.

Based on these assumptions, S&P arrives at the following credit
measures for 2018 and 2019:

-- Adjusted FFO to debt of about 18%-20%, which is in line with
    2017 (19%). S&P notes that excluding the put option, which it
    views as debt-like, the ratios are nearer 23%-25%.

-- Adjusted debt to EBITDA of about 3.5x-3.8x (or about 3.1x in
    2018 and below 3.0x in 2019 excluding the put option).

S&P said, "The stable outlook reflects our view that gategroup
has much stronger credit metrics, on a stand-alone basis, than
its parent. Based on gategroup's current debt levels, the company
has significant headroom for operational underperformance before
the 'B-' issuer credit rating would be affected. Furthermore, S&P
currently does not assume negative interventions from HNA Group
that would undermine gategroup's ability to pay its debt
obligations in the next 12 months.

"We could lower our rating on gategroup if HNA Group adversely
intervened or if gategroup were drawn into any potential
insolvency or distressed restructuring as a result of HNA Group's
weak credit position.

"We could raise the rating on gategroup if HNA Group materially
reduced its financial leverage and stabilized its liquidity
position such that we revised HNA Group's GCP upward and
considered it commensurate with a 'B' or higher rating.
Furthermore, we could upgrade gategroup if we reassess our view
of its group status within HNA."


MATTERHORN TELECOM: S&P Raises ICR to 'B+', Outlook Stable
----------------------------------------------------------
S&P Global Ratings raised its long-term issuer credit rating on
Switzerland-based telecommunications group Matterhorn Telecom
Holding S.A. (Matterhorn or the group) and its subsidiary
Matterhorn Telecom S.A. to 'B+' from 'B'. The outlook is stable.

S&P said, "At the same time, we raised our issue rating on
Matterhorn's senior secured debt to 'B+' from 'B'. The recovery
rating is unchanged at '3', indicating our expectation of
meaningful recovery prospects (50%-70%; rounded estimate: 55%) in
the event of a payment default.

"We have also raised our issue rating on the group's senior
unsecured notes to 'B-' from 'CCC+'. The recovery rating remains
at '6', indicating our expectation of negligible recovery (0%-
10%; rounded estimate: 0%) in the event of a payment default."

The upgrade follows Matterhorn's continued positive EBITDA and
free operating cash flow (FOCF) generation in 2017 thanks to the
group's continued focus on cost efficiencies. This is despite a
moderate rise in capital expenditures (capex), given the group's
investments in accessing Swiss fiber-to-the-home (FTTH) networks.
The group's cost-effective approach offset planned, although
slowing, revenue deterioration given that growth in post-pay
subscriber base did not compensate for lower mobile termination
rates and lower average revenues per user (ARPU), since almost
all its customer base has been transferred to Matterhorn's
current offering. S&P said, "We also note that management's and
shareholders' financial policy will be less aggressive than
before, but remain opportunist in the medium term. We now
anticipate that the group will allocate cash flow generation for
financing activities and debt reduction."

S&P said, "We have reassessed Matterhorn's financial risk profile
to aggressive from highly leveraged. The improvement stems from
stronger EBITDA, voluntary debt repayment of about EUR50 million
in September 2017, and sustained cash flow generation that we
expect will continue, despite additional investment in
backhauling and fiber network access. This leads us to forecast,
in 2018-2019, adjusted debt to EBITDA at or below 5x and FOCF to
debt sustained above 5%.

"We also factor in greater clarity on the group's financial
policy, and that management and shareholders are now striving to
achieve a net reported debt to EBITDA (leverage) of between 3.5x
and 4.0x. We therefore believe that the group will use cash on
the balance sheet to access the FTTH network, invest in its
mobile network, and reduce debt, supporting credit metrics in
line with the 'B+' rating. While we think that the group's
financial policy may remain opportunist in the medium term,
should the group materially deleverage -- through organic cash
flows in particular -- we think that it will likely keep its
adjusted leverage within the thresholds for the current rating."

Matterhorn's management has worked closely with its owner,
private holding company NJJ Capital, to streamline the group's
structure and operations and substantially lower its cost base.
Matterhorn launched a simplified post-pay offering in 2015,
rationalized its commercial, marketing and IT approach, focused
on the direct distribution channel (either physical or online),
and re-insourced network maintenance tasks. As a result, the
adjusted EBITDA margin improved to 49.1% in 2017 from 29.8% in
2015, alongside stronger FOCF on lower capex and better
collections. S&P said, "Furthermore, we view positively the
group's reduced churn rate and the uptick in its post-pay
subscriber base since third-quarter 2015. We also believe that
the group benefits from a nationwide and good-quality 4G network,
supported by ongoing and targeted investments, and can leverage
significantly larger spectrum per user than peers to underpin its
data-rich contracts. Finally, we view the recent launch of a
fixed product as a key step for the group to grow and compete in
a more converged market." Nevertheless, there is uncertainty on
Matterhorn's ability to ramp up its fixed activities without
denting profitability and cash flow generation.

S&P said, "We continue to assess Matterhorn's business risk
profile as significantly weaker than its two main competitors,
the dominant incumbent Swisscom AG and the No. 2 Sunrise
Communication Holdings S.A. Matterhorn remains at No. 3, with a
post-pay subscriber market share of about 16.5%. Although
decreasing, the subscriber churn rate remains slightly higher
than that of peers, and its ARPU has decreased following the
introduction and almost complete transfer of its customer base to
Matterhorn's Plus offer. We therefore believe that, for
Matterhorn, maintained margins and improved credit metrics will
hinge on a continuous demonstration of its ability to gain post-
pay subscribers, and to at least maintain its current level of
costs and capex efficiency in order to offset increasing
competition in the Swiss telecom market and the structural
decline of pre-pay ARPUs. We also think that operational
performance and execution risks related to the launch and
operation of fixed product exist. We think that Matterhorn's
performance will hinge on a successful ramp-up of its fixed offer
among its current mobile customer base and its ability to attract
new customers to mitigate annual fixed commitments to be paid to
access the FTTH network.

"The stable outlook on Matterhorn reflects our view that the
group will sustain its recently strengthened EBITDA margin,
continue to expand its post-pay mobile customer base, and ramp up
its fixed product on new and converged customers. We also take
into account our assumption that Matterhorn will use cash on the
balance sheet to invest in its network and to reduce debt. This
should translate into an adjusted debt-to-EBITDA ratio of 5x in
2018 and lower thereafter, and FOCF to debt remaining above 5%.

"We could consider a negative rating action if Matterhorn failed
to sustain the current level of profitability or successfully
monetize its recently launched fixed product. In particular, we
could lower the rating if margins and FOCF were to decline, for
example, due to increasingly aggressive behavior by the group's
principal competitors that results in a contraction of its post-
pay base or underperformance of its fixed offer that does not
compensate for contractual investments to access network. This
would translate into adjusted debt-to-EBITDA exceeding 5.0x on a
prolonged basis, and FOCF to debt of less than 5%. A downgrade
could also result from a more aggressive financial policy.

"We see a limited likelihood of an upgrade over the next 12
months, due to increasingly competitive fixed and mobile markets
in Switzerland that will hamper strong deleveraging prospects
beyond our base case. We also consider Matterhorn's contracted
investments to access fixed networks will constrain FOCF
generation. However, we could raise the rating if Matterhorn's
financial profile were to substantially strengthen beyond our
base case, including adjusted leverage sustainably approaching
4.0x and FOCF exceeding 10%. Any upgrade would also likely
require increased visibility on the owner, private holding
company NJJ Capital, and its capital structure, as well as a more
conservative financial policy."


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


IGA: In Talks with Lenders for EUR1 Billion in New Loans
--------------------------------------------------------
Onur Ant at Bloomberg News reports that the consortium formed to
build and operate the world's biggest airport in Istanbul was
facing enough challenges even before the government minister in
charge of the project started talking about insolvency.

In a television interview on April 2, Transport Minister Ahmet
Arslan confirmed the government was considering giving the
consortium an unspecified amount of time before requiring it to
start paying rent, which has been set at more than US$1 billion
annually over 25 years, Bloomberg relates.  But then he went a
step further, Bloomberg notes.

"We're not in a position to say 'let them build it or let them go
bust,'" Bloomberg quotes Mr. Arslan as saying.  "What's important
is that the situation remains manageable while protecting the
rights and interests of the public."

What makes the unsolicited insolvency comment interesting is that
until now there has been no such talk about the IGA consortium,
which is made up of businesses considered friendly to President
Recep Tayyip Erdogan, Bloomberg notes.

After Mr. Arslan spoke, Bloomberg reported that the consortium is
in talks with lenders for EUR1 billion in new loans to complete
the first phase of the airport, according to two people with
direct knowledge of the plan.

Financial talk aside, the project poses numerous challenges,
chief among them turning an area of wetlands larger than
Manhattan into a series of buildings and runways able to
eventually handle as many as 200 million passengers a year,
Bloomberg states.  The new airport is scheduled to open in
October, Bloomberg discloses.


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


AIB GROUP: Moody's Assigns Ba2 Senior Unsecured Debt Rating
-----------------------------------------------------------
Moody's Investors Service has assigned a Ba2 long-term local
currency rating to the senior unsecured debt issued by AIB Group
plc (AIB Group). The assignment of final ratings to AIB Group's
senior unsecured debt follows the holding company's EUR500
million issuance on March 22, 2018. The entity's establishment as
the holding company of Allied Irish Bank plc (AIB) was effective
in December 2017, and Moody's subsequently assigned provisional
ratings to AIB Group's EMTN programme on March 12, 2018
(https://www.moodys.com/research/--PR_380647). The corporate
restructuring will allow AIB to comply with the resolution
authorities' requirements under the EU Bank Recovery and
Resolution Directive (BRRD) framework: as the Single Resolution
Board's preferred resolution strategy for AIB is a so-called
"single point of entry", AIB Group will become the primary issuer
of external capital and debt securities issued to meet the
group's minimum requirement for own funds and eligible
liabilities (MREL).

The holding company senior unsecured rating was determined using
AIB's ba1 baseline credit assessment (BCA) as the anchor point
and the at failure balance sheet of the consolidated group in
Ireland in the Loss-Given-Failure (LGF) analysis.

The outlook on the overall entity and senior unsecured debt
ratings is positive, in line with the outlook on AIB's long-term
bank deposit and senior unsecured debt ratings, and incorporates
(i) AIB's on-going improvement in asset quality, which could lead
to an upgrade of the bank's baseline credit assessment (BCA) of
ba1 over the outlook period; and (ii) AIB's expected issuance
plans given its informative MREL target of 29.05% of RWAs. When
confirmed, this would provide additional protection for the
holding company's senior unsecured debt and could lead to higher
ratings over the outlook horizon.

RATINGS RATIONALE

According to Moody's banking methodology, in countries subject to
EU's Bank Recovery and Resolution Directive (BRRD), such as
Ireland, which Moody's consider an Operational Resolution Regime,
it is assumed that if a holding company forms part of the same
resolution perimeter as the bank, like in the case of AIB Group,
holding company senior obligations benefit from the subordination
of bank subordinated instruments, as well as holding company
subordinated instruments. This is because Ireland's
implementation of EU's BRRD mandates write-down and conversion
for bank-issued capital instruments as the initial source of
loss-absorbing capital. With the exception of senior unsecured
debt from the holding company, Moody's assume that holding
company debt ranks pari passu with externally issued debt of the
same class at the operating company level.

WHAT COULD CHANGE THE RATING -- UP/DOWN

A positive change in AIB's BCA would likely lead to an upgrade of
AIB Group's senior unsecured rating. The rating could also be
upgraded if the holding company were to issue significant amounts
of bail-in-able debt.

A downward movement in AIB's BCA would likely result in the
downgrade of AIB Group's senior unsecured rating.

PRINCIPAL METHODOLOGY

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


CONVIVIALITY: C&C Buys Two Businesses, 2,000 Jobs Saved
-------------------------------------------------------
Bradley Gerrard at The Telegraph reports that the maker of
Magners cider looks set to have saved around 2,000 jobs at
collapsed drinks business Conviviality after a GBP100 million
deal to buy major parts of the company.

Dublin-based C&C has bought drinks distribution business Matthew
Clark -- one of the UK's biggest suppliers to the on-trade
serving more than 20,000 pubs -- and wine-focused Bibendum from
Conviviality, which announced plans to call in administrators
last month, The Telegraph relates.

According to The Telegraph, C&C Chief executive Stephen Glancey
said his company paid a nominal GBP1 for both businesses but paid
the failed firm's banks GBP102 million -- more than half the
GBP180 million debt Conviviality owed to its lenders.

The companies will trade under the combined name of
Matthew Clark Bibendum and account for roughly 2,000 of the 2,500
jobs at Conviviality prior to its collapse, The Telegraph
discloses.

Brewing giant Anheuser-Busch InBev, which makes Budweiser and
Stella Artois, has lent C&C some of the money for the deal but
Mr. Glancey said the Belgium-headquartered company had no equity
stake in the acquisition or management involvement, The Telegraph
notes.


GALAXY FINCO: Moody's Affirms B2 CFR, Outlook Stable
----------------------------------------------------
Moody's Investors Service has affirmed the B2 corporate family
rating (CFR), the B3 rating on GBP125 million senior unsecured
notes due 2021 and the B2-PD probability of default rating of
Galaxy Finco Limited (Domestic & General, D&G or the company), a
UK-based extended warranty and service provider. The outlook is
stable. At the same time, Moody's has changed the applicable
rating methodology to "Insurance Brokers and Service Companies"
from "Business and Consumer Service Industry".

Moody's also affirmed the B2 rating on the guaranteed GBP200
million senior secured fixed rate notes due 2020 and the B2
rating on the guaranteed senior secured GBP150 million floating
rate notes (FRN) due 2020 issued by Galaxy Bidco Limited, a
company's subsidiary. The outlook is also stable.

RATINGS RATIONALE

The affirmation of the B2 CFR reflects its (1) solid market
position in the UK as the largest independent extended warranty
provider for domestic appliances; (2) longstanding relationships
with 10 of the 12 largest white goods OEMs in the UK; (3) strong
revenue visibility driven by high retention rates from sales
through direct-debit; (4) track record of stable operating
performance and cash flow generation throughout the economic
cycle. More negatively, the rating is constrained by (1) the
company's high Debt/EBITDA ratio of 5.3x at December 2017, as
adjusted by Moody's; (2) the highly competitive environment, in
which D&G is challenging large retailers and utility suppliers
such as Dixons Carphone plc and British Gas in the UK that
substantially control the sale of extended warranties for many
appliances; (3) some execution risk and additional costs as a
result of the company's strategy to transition to insurance and
maintenance service plans; (4) the expectation of dividend
distributions reducing liquidity.

The change in methodology to "Insurance Brokers and Service
Companies" primarily reflects D&G's product shift towards
insurance and maintenance service plans. In October 2017 the
company announced its plans to transition its customers to an
insurance and maintenance service plan product from its current
focus on non-insurance warranty and repair products. Whilst this
shift is expected to improve D&G's service levels and business
profile in the longer term, there will be additional costs
associated with the strategy as well as increasing regulatory
capital requirements.

As part of this new strategy, the company needs to renegotiate
its terms with appliance manufacturers (OEMs), transition
customers without impacting retention rates, incur additional
costs of customer acquisition and product service, increase
regulatory capital, restructure and invest in IT and call
centres. The company estimates that the new strategy will result
in a 200 basis point reduction in reported EBITDA margin, but the
outcome is currently uncertain and cost estimates may be
exceeded. Nevertheless Moody's expects that the additional costs
will be offset by ongoing revenue growth, based on strong current
momentum, including sales growth of 7.5% in the current year
(nine months ended December 2017).

As concerns the company's debt, Moody's notes that the company
recently refinanced GBP175 million senior secured FRN due 2019
partly with GBP25 million of own cash which, on a pro-forma
basis, should reduce Debt/EBITDA to about 5.1x from 5.3x.

Liquidity

The company's liquidity is expected to remain adequate. The group
expects to upstream dividends of up to GBP30 million from cash
and surplus funds. At December 31, 2017 the company had GBP95
million of available cash and surplus funds available for
distribution from its insurance subsidiary. Liquidity is further
supported by a GBP100 million super senior revolving credit
facility, of which GBP77 million is available after L/C
utilization.

Structural Considerations

The B2 instrument ratings on the senior secured FRNs and senior
secured fixed rate notes are in line with the CFR, which reflects
their ranking ahead of the senior notes, but behind the super
senior RCF. The senior unsecured notes are rated B3 which
reflects their junior ranking within the capital structure. The
senior secured instruments are guaranteed by at least 85% of the
non-regulated subsidiaries, although total guarantor coverage is
limited because the regulated insurance company does not provide
guarantees. Security includes a UK debenture over UK assets and
receivables of guarantors.

The B2-PD probability of default rating is in line with the B2
CFR reflecting Moody's assumption of a 50% recovery rate typical
for transactions including senior secured and unsecured
instruments.

Outlook

The stable outlook reflects the expectation that D&G will report
limited growth in Moody's-adjusted EBITDA over the next 12-18
months as the additional service and other costs of the new
strategy offset the benefits of revenue growth. The new strategy
is also expected to limit cash flows to around breakeven or low
positive levels. The outlook also assumes that the company will
continue to comply with regulatory requirements within its
insurance subsidiary.

What could change the ratings up /down

Upward rating pressure could occur if D&G were to successfully
execute its new strategy such that the Moody's-adjusted
Debt/EBITDA ratio remains below 5.5x in combination with the
company generating materially positive free cash flow and
maintaining an adequate liquidity profile as measured via
Moody's-adjusted EBITDA coverage metrics.

Negative rating pressure would arise if: (i) the Moody's-adjusted
Debt/EBITDA ratio were to rise above 6.25x; or (ii) the company's
free cash flows were negative for a sustained period; or (iii)
the liquidity profile weakened meaningfully; or (iv) D&G's
business profile and market position in its niche market segment
deteriorated significantly.

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Insurance
Brokers and Service Companies published in September 2017.

Company profile

D&G is a UK-based warranty and warranty service provider. The
company offers various warranty products for domestic appliances
and consumer electronics to end-customers and households,
primarily through original equipment manufacturers but also
through retailers at the point-of-sale. The company generates the
largest part of its revenues in the UK (80% of revenues in fiscal
2017, ended March 31, 2017) with the remainder in the largest
economies in Europe and Australia (20% in international
division). In fiscal 2017 reported revenues and adjusted EBITDA
of GBP716 million and GBP95 million respectively.


TRINITY SQUARE 2015-1: Moody's Affirms Ba1 Rating to Cl. E Notes
----------------------------------------------------------------
Moody's Investors Service has upgraded the ratings of two notes
in Trinity Square 2015-1 plc. Moody's also affirmed the ratings
of four notes.

-- GBP1253M Class A Notes, Affirmed Aaa (sf); previously on Dec
    17, 2015 Definitive Rating Assigned Aaa (sf)

-- GBP71.72M Class B Notes, Upgraded to Aa1 (sf); previously on
    Dec 17, 2015 Definitive Rating Assigned Aa2 (sf)

-- GBP45.3M Class C Notes, Upgraded to A1 (sf); previously on
    Dec 17, 2015 Definitive Rating Assigned A2 (sf)

-- GBP33.97M Class D Notes, Affirmed Baa2 (sf); previously on
    Dec 17, 2015 Definitive Rating Assigned Baa2 (sf)

-- GBP22.65M Class E Notes, Affirmed Ba1 (sf); previously on Dec
    17, 2015 Definitive Rating Assigned Ba1 (sf)

-- GBP37.75M Class M Notes, Affirmed Aaa (sf); previously on Dec
    17, 2015 Definitive Rating Assigned Aaa (sf)

RATINGS RATIONALE

The upgrade actions are prompted by an increase in credit
enhancement for the affected notes. The credit enhancement of
Tranche B has increased from 12.8% in December 2015 to 16.3% in
February 2018. The Tranche C has increased from 9.8% to 12.2%
during the same period.

Moody's affirmed the ratings of the remaining tranches that had
sufficient credit enhancement to maintain the current rating on
the affected notes.

As a part of the review Moody's reassessed the transaction's
lifetime loss expectation, based on the collateral performance to
date. The performance of the transaction has continued to be
stable. Moody's maintained the Expected loss in this deal at
2.2%.

Moody's has also assessed loan-by-loan information as a part of
its detailed transaction review to determine the credit support
consistent with target rating levels and the volatility of future
losses and maintained the MILAN at 13%.

The principal methodology used in these ratings was "Moody's
Approach to Rating RMBS Using the MILAN Framework" published in
September 2017.

The analysis undertaken by Moody's at the initial assignment of
ratings for RMBS securities may focus on aspects that become less
relevant or typically remain unchanged during the surveillance
stage.

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

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

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



===================
U Z B E K I S T A N
===================


TURON BANK: S&P Lifts Issuer Credit Rating to 'B', Outlook Stable
-----------------------------------------------------------------
S&P Global Ratings said that it had raised its long-term issuer
credit rating on Uzbekistan-based Turon Bank to 'B' from 'B-'.
The outlook is stable.

At the same time, S&P affirmed its 'B' short-term issuer credit
rating on the bank.

The upgrade stems from S&P's view that Turon Bank's
capitalization has improved materially because of the significant
amount of capital provided by the Uzbekistan Fund for
Reconstruction and Development (UFRD) and the Ministry of Finance
since its last review in July 2017. Last year, Turon Bank
received Uzbek sum (UZS) 228 billion (about $28 million) in
capital support, of which UFRD provided UZS178 billion. These
capital injections enabled Turon Bank to fund an increase in
lending to government-led projects and offset the negative impact
of the sharp devaluation of the local currency.

According to a presidential decree, Turon Bank received another
UZS490 billion from UFRD earlier this month to finance a number
of projects in Uzbekistan's hydro-energy sector. After
incorporating these injections, S&P forecasts that the bank's
risk-adjusted capital ratio will remain above 10% during 2018-
2019, despite planned high lending growth over the next two
years.

S&P said, "We estimate the bank's loan portfolio growth at 85%-
90% in 2018 before decelerating to 30%-35% in 2019. This growth
rate is materially higher than our forecast for the sector, which
we expect will average 20% over that period. The bank's growth
will primarily stem from new loans to support hydro-energy
projects. We note that the government will guarantee all such
loans, which should mitigate credit risk, in our view. However,
the bank is also planning to focus on the agricultural sector,
which we view as riskier.

"We cannot exclude the possibility that the bank's actual growth
may be stronger than we currently anticipate, with a negative
impact on asset quality and quicker depletion of its capital
buffer. In addition, we consider that the bank's profitability
will likely remain weak. We think that, beyond our two-year
rating horizon, Turon Bank may be unable to support its rapid
expansion without new capital injections from the government.
These factors, coupled with challenges associated with the
management of such fast growth, which will transform the bank's
business profile, constrain our long-term rating at 'B' versus
the bank's 'b+' stand-alone credit profile (SACP).

"Our ratings continue to reflect the bank's still modest market
share, rapidly changing strategy, and limited pricing power. The
bank's closer ties with the government, which enable it to
increase its client base and revenues, counterbalance these
weaknesses.

"We see that Turon Bank's ties with the government have become
closer over the past year, with the bank being excluded from the
privatization list and receiving material capital support from
the state. Moreover, the bank is now more involved in
implementing government-related projects than one year ago. We
therefore do not expect the bank will be privatized over the next
three to five years.

"Nevertheless, we still think Turon Bank has limited importance
for the government since it is smaller than other government-
related banks, which might be able to take on a similar role in
government projects if needed. This leads us to anticipate a
moderately high likelihood that the government would provide
extraordinary support to Turon Bank if needed. Given our
assessment of the sovereign's creditworthiness, which is based
only on publicly available information, our long-term rating on
the bank does not include any uplift for potential government
support.

"In our view, Turon Bank compares well with its domestic peers in
terms of funding and liquidity metrics. We note that the bank's
funding structure is set to change materially in 2018, since the
bank will fund most of the new projects in the energy and
agricultural sectors through funds from international financial
institutions. However, we understand that the tenors of these new
facilities will match those of disbursements, and therefore not
result in any significant asset-liability mismatches.

"The stable outlook reflects the balance between Turon Bank's
improved capitalization and our anticipation of its weaker
operating performance than domestic peers, owing to low margins
on new business generated over the next 12-18 months.

"We may lower the ratings if the bank's actual growth materially
exceeds our projections, with a pronounced negative impact on its
capitalization and asset quality.

"We may raise our ratings if Turon Bank's management showed its
ability to manage the ongoing expansion, aligning the bank's
overall business profile and creditworthiness with those of
domestic peers, without hampering the bank's risk profile and
capitalization, all else being equal."



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


* EMEA Consumer Loan ABS 90-180 Day Delinquencies Up in January
---------------------------------------------------------------
The EMEA consumer loan ABS (asset-backed securities) 90-180 day
delinquencies increased to 0.4% in January 2018 compared to 0.3%
in July 2017, according to the latest performance update
published by Moody's Investors Service ("Moody's").

The cumulative defaults decreased to 1.6% in January 2018 from
2.4% in July 2017.

As of January 2018, the total outstanding pool balance in the
EMEA consumer loan ABS market was EUR28.5 billion, with 30
outstanding transactions.




                            *********

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
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Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind.  It is likely that some entity
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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
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historical cost net of depreciation may understate the true value
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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
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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

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 2018.  All rights reserved.  ISSN 1529-2754.

This material is copyrighted and any commercial use, resale or
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Information contained herein is obtained from sources believed to
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