/raid1/www/Hosts/bankrupt/TCREUR_Public/180412.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

                           E U R O P E

          Thursday, April 12, 2018, Vol. 19, No. 072


                            Headlines


C R O A T I A

TEHNIKA: Court Dismisses Zagorje-Tehnobeton's Bankruptcy Petition


C Z E C H   R E P U B L I C

VITKOVICE ENGINEERING: Starts Insolvency Proceedings


F R A N C E

CGG: S&P Assigns 'B' Rating to New $650MM Senior Secured Notes
NOVAFIVES: S&P Raises Long-Term ICR to B+, Outlook Stable
VALLOUREC: S&P Rates New EUR300MM Unsecured Bond due 2023 'B'


G E R M A N Y

DEA DEUTSCHE: S&P Withdraws 'BB-' Long-Term Issuer Credit Rating
PRODUCT TRADE: Seafood Importer-Distributor Files for Insolvency


I R E L A N D

MAN GLG CLO I: Moody's Assigns (P)B2 Rating to Cl. F Notes


I T A L Y

ALITALIA SPA: Receives Takeover Offers, Easyjet Among Bidders


K A Z A K H S T A N

ASIA LIFE: Fitch Puts 'B' IFS Rating on Watch Negative
ASIACREDIT BANK: Fitch Cuts IDR to 'CCC' Then Withdraws Rating


L U X E M B O U R G

ORION ENGINEERED: S&P Alters Outlook to Pos. & Affirms 'BB' ICR


N E T H E R L A N D S

ARES EUROPEAN IX: Moody's Assigns B1 Rating to Class F Notes
EAGLE SUPER: S&P Assigns 'B' Corp Credit Rating, Outlook Stable


S P A I N

* S&P Raises ICR on Spanish Banks on Reduced Funding Risks


U N I T E D   K I N G D O M

CARILLION PLC: Former Offices Sold for GBP1.45 Million
COMET BIDCO: S&P Assigns 'B-' Long-Term Issuer Credit Rating
COVER STRUCTURE: Financial Difficulties Prompt Administration
DRAX GROUP: S&P Affirms 'BB+' Long-Term Issuer Credit Rating
PARAGON BANKING: Fitch Raises Subordinated Notes Rating from BB+

SEPLAT PETROLEUM: Fitch Assigns Final 'B-' Long Term IDR
ULTIMO: Opts to Cease Operations in United Kingdom


                            *********



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C R O A T I A
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TEHNIKA: Court Dismisses Zagorje-Tehnobeton's Bankruptcy Petition
-----------------------------------------------------------------
SeeNews report that Croatian construction company Tehnika said on
April 10 that the Zagreb Commercial Court has dismissed a request
for the launch of bankruptcy proceedings filed by peer Zagorje-
Tehnobeton.

According to SeNews, the Croatian company said in a filing with
the Zagreb Stock Exchange the request for the launch of
bankruptcy proceedings was unfounded as the total value of the
assets of Tehnika is higher than its liabilities.

Tehnika said in February that Zagorje-Tehnobeton is seeking its
bankruptcy over what is described as "unfounded" debt claims,
SeeNews recounts.  The construction company explained that
Zagorje-Tehnobeton is not a creditor of the company, SeeNews
notes.

Earlier in February, Tehnika said it suffered a consolidated net
loss of HRK141.8 million  (US$23.8 million/EUR19.1 million) in
2017 versus a profit of HRK926,300 a year earlier, partially due
to the crisis in Croatia's ailing Agrokor concern, SeeNews
relates.  Tehnika, as cited by SeeNews, said the loss was mostly
due to the write-off of Tehnika's claims it held towards
companies of Agrokor.



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C Z E C H   R E P U B L I C
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VITKOVICE ENGINEERING: Starts Insolvency Proceedings
----------------------------------------------------
Chris Johnstone at Czech Radio reports that one of the Czech
Republic's flagship engineering companies, Vitkovice Engineering,
has said it has itself proposed insolvency proceedings. The move
was indicated last month by details on the insolvency register,
the report says.

According to the report, Vitkovice Engineering in March appeared
to be lined up for a lifeline from the arms company of Czech
businessman Jaroslav Strnad. He however said that he intended to
invest in another part of the V°tkovice Group, V°tkovice Heavy
Engineering. That move has been approved by a court, Czech Radio
says.

V°tkovice Engineering employs around 650 in and around Ostrava.
Many of them have been sent home since January and are waiting
for unpaid wages, the report discloses. Operations at the firm
have been interrupted because there is not enough cash to pay for
raw materials or key components, Czech Radio adds.


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F R A N C E
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CGG: S&P Assigns 'B' Rating to New $650MM Senior Secured Notes
--------------------------------------------------------------
S&P Global Ratings has assigned its 'B' issue rating to France-
based seismic company CGG's proposed $650 million first-lien
senior secured notes due in 2023. The recovery rating is '2',
indicating S&P's expectation of about 85% recovery in the event
of a default.

S&P understands that the issuance proceeds, along with a small
amount of cash on the balance sheet, will be used to repay the
outstanding $664 million bond due 2023.

The notes will be issued by CGG HOLDING (U.S.) INC., CGG's wholly
owned subsidiary, and guaranteed by CGG and certain of its
subsidiaries.

ISSUE RATINGS--RECOVERY ANALYSIS Key analytical factors:

The recovery rating of '2' on the new first-lien notes is
supported by the comprehensive collateral package, including
tangible asset security. The recovery rating on CGG's $355
million and EUR80 million second-lien facilities due 2024 is '5',
reflecting these facilities' subordination in the waterfall and
the substantial amount of prior-ranking debt secured by the
company's most valuable assets.

S&P said, "In our hypothetical default scenario, we assume that a
stressed operating environment, combined with increasing vessel
overcapacity, would lead to a default in the second half of 2020.
We value the company as a going concern due to CGG's important
market position and valuable customer base. In our analysis, we
use a discrete asset-valuation methodology under which we apply
haircuts to the book value of the company's assets. One of the
main assets on the company's balance sheet is its multiclient
library. This includes surveys that the company has completed
mainly in the past two to three years and can sell to future
customers. The value of the library is linked to the company's
ability to conduct new surveys and update its database.
Otherwise, the value will be subject to high amortization. We do
not assign a value to the company's vessels, which belong to a
joint venture alongside other debt."

Simulated default assumptions

-- Year of default: 2020
-- Jurisdiction: France

Simplified waterfall

-- Gross recovery value: $0.95 billion
-- Net recovery for waterfall after administrative expenses
   (5%): $0.9 billion
-- Estimated first-lien claim: $0.7 billion (1)
-- Recovery range: 70%-90% (rounded estimate 85%) (2)
    --Recovery rating: 2
-- Estimated senior secured notes claim: $0.6 billion (3)
-- Recovery range: 10%-30% (rounded estimate 15%)
    --Recovery rating: 5

(1) Includes six months of prepetition interest.
(2) Despite recovery prospects being around 85%, the recovery
rating is capped at '2' due to S&P's view of multi-jurisdictional
risk.
(3) Includes CGG's accrued payment-in-kind debt until default and
six months of prepetition interest.


NOVAFIVES: S&P Raises Long-Term ICR to B+, Outlook Stable
---------------------------------------------------------
S&P Global Ratings raised its long-term issuer credit ratings on
France-based industrial engineering group Novafives to 'B+' from
'B'. The outlook is stable.

S&P said, "At the same time, we assigned our 'B+' issue rating to
the group's proposed EUR600 million senior secured notes. The '4'
recovery rating reflects our expectation of average recovery
prospects (30%-50%; rounded estimate: 35%) in case of a default.
We also assigned our 'BB' issue rating to the group's proposed
EUR115 million super senior revolving credit facility (RCF). The
'1' recovery rating indicates our expectation of very high
recovery prospects (90%-100%; rounded estimate: 95%).

"In addition, we raised our ratings on Novafives' currently
outstanding EUR580 senior secured notes to 'B+' from 'B', in line
with the issuer credit rating. The recovery rating remains at
'4'. We also raised to 'BB' from 'BB-' our rating on the group's
existing EUR90 million super senior RCF. The recovery rating
remains at '1'. These ratings will be withdrawn following the
refinancing.

"The upgrade points to our expectations that Novafives' credit
ratios will continue to improve over 2018, supported by the
group's healthy operating and financial performances and the
conversion of shareholder loan instruments into equity, which
will benefit the group's S&P Global Ratings-adjusted credit
metrics. In addition, increased revenues and strengthening
profitability will contribute to positive free cash flow
generation and deleveraging. These developments have led us to
positively reassess Novafives' financial risk profile to
aggressive from highly leveraged."

On April 9, 2018, Novafives announced plans to refinance its
existing debt facilities with new EUR600 million senior secured
notes and a new EUR115 million super senior RCF. The group also
plans to redeem its existing EUR160 million shareholder loan
(including capitalized interests) with equity that will be paid
by the Canadian institutional investors CDPQ and PSP -- which S&P
views as strategic, long-term investors -- following Ardian's
pending sale of a portion of its stake in Novafives. The closing
of the transaction is pending regulatory approvals and is
expected by end-May 2018. S&P said, "The conversion of the
shareholder loan instruments will benefit the group's S&P Global
Ratings-adjusted credit ratios, since we treated these
instruments as debt in our calculations. We therefore think that
the conversion will simplify and strengthen Novafives' financial
risk profile."

S&P said, "According to our calculations pro forma both the
share-transfer and refinancing, the outstanding debt will amount
to EUR600 million senior secured notes and EUR48 million existing
amortizing bank debt. We expect adjusted funds from operations
(FFO) to debt to improve materially to 14.2%-14.6% in 2018. This
will stem from the group's sizable accumulated cash balances,
which we include in our adjusted debt calculation excluding cash
considered not available (20% of cash balance), and positive
trends in its operational and financial performance. We forecast
adjusted EBITDA margin will increase to about 7.1% in 2018 and
7.2% in 2019, from 6.1% in 2017, driven by the decrease in
restructuring costs, the boom in the logistics segment, and the
recovery in several other end-markets, such as stronger
contributions from the metal and energy division.

"In addition, we assume Novafives's FFO-to-debt ratio will reach
about 14.5% in 2018, gradually improving toward 20.0% in 2019,
and positive free operating cash flow.

"We continue to think that the group's business risk profile is
constrained by the moderate scale of its operations compared with
other capital goods sector companies. Despite its small size,
however, Novafives has a wide product offering and operates in
several different niche markets, where it often ranks among the
top-three players. Furthermore, the group enjoys a pronounced
presence outside in the U.S., Japan, and China, among other non-
European markets. In addition, owing to the variety of end
markets it serves and on the strength of its leading market
position, Novafives does not face customer or supplier
concentration. These strengths are somewhat offset, in our
opinion, by our view of the highly competitive industrial
engineering market, which has intensified pressure on margins in
the recent past."

Novafives' asset-light business model supports its business
profile. By externalizing most of the manufacturing process, the
group benefits from a relatively flexible cost structure and
limited capital expenditures (capex). Novafives' good end-market
and geographic diversification, as well as its flexible cost
structure, offset slightly below-average profitability. The
group's restructuring measures launched in 2016, to cope with
underutilized assets in its metals and energy segments, weigh on
profitability. S&P said, "Consequently, we expect that the group
will generate, in the coming year, an adjusted EBITDA margin of
around 7.0%-7.5%. Because we consider this level to be below
average for the capital goods sector, and still far from the
group's historical profitability margin of around 9%, we apply a
negative modifier in our comparable ratings analysis."

S&P said, "In our view, the agreement signed in December 2017
with CDPQ (30% of the shares), PSP (30%), and Ardian (8%) does
not have an impact on the group's governance. Furthermore, we see
the common equity contribution of the new shareholders as long-
term strategic investors and not as financial sponsors. The
management still controls the group structure, with 32% of the
shares and the majority of the voting rights through a golden
share.

"The stable outlook reflects our expectation that Novafives' FFO
to debt will improve toward 14%-15% by end-2018, before
increasing toward 20% over the following 12 months, and this is
comfortably within the thresholds for our aggressive financial
risk category. At the same time, we anticipate that the group
will maintain adequate liquidity and demonstrate FFO interest
coverage of above 4.0x. We also project that unadjusted free
operating cash flows will be slightly positive in 2018, and the
group will improve its EBITDA margins to above 7.0%.

"We could lower the rating if the group's EBITDA margin decreases
below 6.0% and the group underperformed our base-case
expectations due to weaker-than-expected demand, the protracted
absence of large contracts, or higher restructuring charges--all
of which could lead to material negative FOCF. Deteriorating
liquidity, which could stem from noncompliance with covenants
threshold, and FFO to debt below 12% would create rating
pressure.

"We could upgrade Novafives if we saw sustainable recovery across
its end-markets that translated into higher order intakes,
including large contracts. An upgrade would also hinge on
deleveraging achieved through FFO to debt improving to 20% on the
back of positive FOCF generation and prudent financial policy
that does not include dividend distribution or sizable debt-
funded acquisitions. Furthermore, we could consider a positive
rating action if we saw a sustainable margin improvement to at
least 9%-10%."


VALLOUREC: S&P Rates New EUR300MM Unsecured Bond due 2023 'B'
-------------------------------------------------------------
S&P Global Ratings said that it assigned its 'B' issue rating to
the new EUR300 million unsecured bond due 2023 to be issued by
France-based seamless steel tube producer Vallourec
(B/Negative/B).

The '3' recovery rating on the proposed issue reflects S&P's
expectation of about 50% recovery in the event of default.

S&P understands that the proceeds of the new issuance will be
used to repay a portion of Vallourec's existing EUR400 million
bond when it matures in August 2019.

ISSUE RATINGS--RECOVERY ANALYSIS

Key analytical factors

-- The 'B' issue rating on Vallourec's proposed EUR300 million
    due 2023 unsecured notes is in line with the issuer credit
    rating.

-- The '3' recovery rating, underpinned by the company's
    substantial asset base, supports the rating, but S&P regards
    the notes' unsecured nature as a weakness.

-- Under S&P's hypothetical default scenario, it assumes a
    combination of the loss of key customers and a prolonged
    downturn in the industry, leading to lower pricing and
    operational issues.

-- S&P assumes that the company will repay and refinance its
    EUR400 million notes due August 2019, mostly with the
    proceeds of the new bond. Moreover, S&P assumes that, on the
    path to default, the company would refinance a material
    portion of its EUR400 million and EUR450 million revolving
    credit facilities (RCFs) when they mature, respectively, in
    July and February 2020.

-- Based on S&P's calculations, it assumes that about 50% of the
    RCFs will remain undrawn at the point of default, given the
    current size of the RCFs and the historic utilization rates.

-- S&P values Vallourec as a going concern, given its market-
    leading position and diversified product offering.

Simulated default assumptions

-- Year of default: 2021
-- Jurisdiction: France

Simplified waterfall

-- Emergence EBITDA: EUR318 million Multiple: 5x
-- Gross recovery value: EUR1.6 billion
-- Net recovery value for waterfall after admin. expenses (5%):
    EUR1.5 billion
-- Estimated first-lien debt claim: approximately EUR2.9
    billion*
-- Recovery range: 50%-70% (rounded estimate: 50%)
-- Recovery rating: 3

*All debt amounts include six months of prepetition interest.


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G E R M A N Y
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DEA DEUTSCHE: S&P Withdraws 'BB-' Long-Term Issuer Credit Rating
----------------------------------------------------------------
S&P Global Ratings said that it had withdrawn its 'BB-' long-term
issuer credit rating on German-based oil and gas company DEA
Deutsche Erdoel AG at the issuer's request. At the time of the
withdrawal, the rating was on CreditWatch with positive
implications.

DEA Deutsche Erdoel AG is a company within the DEA group. S&P
continues to rate the main company within the DEA group, L1E
Finance GmbH & Co. KG. The 'BB-' long-term issuer credit rating
on L1E Finance remains on Creditwatch positive.


PRODUCT TRADE: Seafood Importer-Distributor Files for Insolvency
----------------------------------------------------------------
Fish Information & Services, citing NWZonline, reports that
Product Trade Center Germany (PTC) is in financial distress.

At the company with administration in the Lower Rhine Kempen and
production and processing plant in Bremerhaven, the preliminary
insolvency proceedings have now been opened, FIS discloses. The
district court of Krefeld has appointed Dr. Klaus Krefeld as
provisional insolvency administrator.

"Together with the management of PTC Germany, I will do my utmost
to preserve this company," the report quotes Mr. Hoos as saying.
Business should continue unrestrictedly even after the initiation
of insolvency proceedings.

PTC Germany, founded in 2009, is an importer of fish and seafood.
Customers include retail chains as well as international
wholesalers. In Germany, PTC recently generated sales of EUR150
million and employed 194 people.


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MAN GLG CLO I: Moody's Assigns (P)B2 Rating to Cl. F Notes
----------------------------------------------------------
Moody's Investors Service announced that it has assigned the
following provisional ratings to notes to be issued by Man GLG
Euro CLO I Designated Activity Company (the "Issuer" or "GLG
CLO"):

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

-- EUR219,000,000 Class A-1 Senior Secured Floating Rate Notes
    due 2030, Assigned (P)Aaa (sf)

-- EUR15,000,000 Class A-2 Senior Secured Fixed Rate Notes due
    2030, Assigned (P)Aaa (sf)

-- EUR42,000,000 Class B-1 Senior Secured Floating Rate Notes
    due 2030, Assigned (P)Aa2 (sf)

-- EUR13,000,000 Class B-2 Senior Secured Fixed Rate Notes due
    2030, Assigned (P)Aa2 (sf)

-- EUR26,000,000 Class C Deferrable Mezzanine Floating Rate
    Notes due 2030, Assigned (P)A2 (sf)

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

-- EUR22,200,000 Class E Deferrable Junior Floating Rate Notes
    due 2030, Assigned (P)Ba2 (sf)

-- EUR12,000,000 Class F Deferrable Junior Floating Rate Notes
    due 2030, Assigned (P)B2 (sf)

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

RATINGS RATIONALE

Moody's provisional rating of the rated notes addresses the
expected loss posed to noteholders by legal final maturity of the
notes in October 2030. The provisional ratings reflect the risks
due to defaults on the underlying portfolio of loans given the
characteristics and eligibility criteria of the constituent
assets, the relevant portfolio tests and covenants as well as the
transaction's capital and legal structure. Furthermore, Moody's
is of the opinion that the collateral manager, GLG Partners LP
("GLG Partners"), has sufficient experience and operational
capacity and is capable of managing this CLO.

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

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

In addition to the nine classes of notes rated by Moody's, the
Issuer will issue EUR38,000,000 of subordinated notes. Moody's
has not assigned rating to this class of notes.

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

Methodology Underlying the Rating Action:

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

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

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

Loss and Cash Flow Analysis:

Moody's modeled the transaction using CDOEdge, a cash flow model
based on the Binomial Expansion Technique, as described in
Section 2.3 of the "Moody's Global Approach to Rating
Collateralized Loan Obligations" rating methodology published in
August 2017. The cash flow model evaluates all default scenarios
that are then weighted considering the probabilities of the
binomial distribution assumed for the portfolio default rate. In
each default scenario, the corresponding loss for each class of
notes is calculated given the incoming cash flows from the assets
and the outgoing payments to third parties and noteholders.
Therefore, the expected loss or EL for each tranche is the sum
product of (i) the probability of occurrence of each default
scenario and (ii) the loss derived from the cash flow model in
each default scenario for each tranche. As such, Moody's
encompasses the assessment of stressed scenarios.

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

Par Amount: EUR400,000,000

Diversity Score: 46

Weighted Average Rating Factor (WARF): 2980

Weighted Average Spread (WAS): 3.55%

Weighted Average Coupon (WAC): 5.00%

Weighted Average Recovery Rate (WARR): 44.0%

Weighted Average Life (WAL): 8.5 years

As part of the base case, Moody's has addressed the potential
exposure to obligors domiciled in countries with local a currency
country risk ceiling (LCC) of A1 or below. As per the portfolio
constraints, exposures to countries with a LCC of A1 or below
cannot exceed 10%, with exposures to countries with LCCs of Baa1
to Baa3 further limited to 2.5%. As a worst case scenario, a
maximum 2.5% of the pool would be domiciled in countries with
LCCs of Baa1 to Baa3 while the remaining 7.5% would be domiciled
in countries with LCCs of A1 to A3. The remainder of the pool
will be domiciled in countries which currently have a LCC of Aa3
and above. Given this portfolio composition, the model was run
with different target par amounts depending on the target rating
of each class of notes as further described in the methodology.
The portfolio haircuts are a function of the exposure size to
peripheral countries and the target ratings of the rated notes
and amount to 0.375% for the Class X and Class A notes, 0.250%
for the Class B notes, 0.188% for the Class C notes and 0% for
Classes D, E and F.

Stress Scenarios:

Together with the set of modelling assumptions above, Moody's
conducted additional sensitivity analyses, which were an
important component in determining the provisional rating
assigned to the rated notes. These sensitivity analyses includes
increased default probability relative to the base case. Below is
a summary of the impact of an increase in default probability
(expressed in terms of WARF level) on each of the rated notes
(shown in terms of the number of notch difference versus the
current model output, whereby a negative difference corresponds
to higher expected losses), holding all other factors equal:

Percentage Change in WARF: WARF + 15% (to 3427 from 2980)

Ratings Impact in Rating Notches:

Class X Senior Secured Floating Rate Notes: 0

Class A-1 Senior Secured Floating Rate Notes: 0

Class A-2 Senior Secured Fixed Rate Notes: 0

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

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

Class C Deferrable Mezzanine Floating Rate Notes: -2

Class D Deferrable Mezzanine Floating Rate Notes: -2

Class E Deferrable Junior Floating Rate Notes: -1

Class F Deferrable Junior Floating Rate Notes: 0

Percentage Change in WARF: WARF +30% (to 3874 from 2980)

Class X Senior Secured Floating Rate Notes: 0

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

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

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

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

Class C Deferrable Mezzanine Floating Rate Notes: -4

Class D Deferrable Mezzanine Floating Rate Notes: -3

Class E Deferrable Junior Floating Rate Notes: -1

Class F Deferrable Junior Floating Rate Notes: -1


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ALITALIA SPA: Receives Takeover Offers, Easyjet Among Bidders
-------------------------------------------------------------
Benjamin Katz, Tara Patel and Alessandra Migliaccio at Bloomberg
News report that Alitalia SpA has attracted interest from a host
of European rivals including budget carrier EasyJet Plc and
Deutsche Lufthansa AG of Germany as part of a government-led
rescue effort for the cash-strapped Italian airline.

Alitalia, which is based in Rome, has said it received three
offers, without specifying from whom, Bloomberg relates.
According to Bloomberg, Lufthansa confirmed on April 11
submitting a document, while EasyJet, which is Europe's second-
biggest low-cost airline, said on April 10 its "revised
expression of interest" was made as part of a consortium, without
naming the other members.  Both carriers referred to a
restructured version of Alitalia, Bloomberg.

Air France-KLM Group and private equity investor Cerberus Capital
Management are part of the EasyJet group, Bloomberg relays,
citing a person familiar with the matter who asked not to be
identified.  A spokeswoman for the French airline said it doesn't
plan on taking a stake in Alitalia, while a representative of
Cerberus could not provide immediate comment, Bloomberg notes.

This is the second time in a decade that Alitalia has sought to
attract an international partner after filing for bankruptcy,
Bloomberg states.  The carrier, which is on government life
support, was declared insolvent almost a year ago and has been in
talks with a number of foreign investors interested in acquiring
parts of its business, which could provide a gateway for
competitors into the Mediterranean market, Bloomberg recounts.
Italy has pumped EUR900 million (US$1.1 billion) into the airline
through bridge loans during the past year to keep it afloat,
Bloomberg discloses.

"There is no certainty at this stage that any transaction will
proceed, and EasyJet will provide a further update in due course
if and when appropriate," Bloomberg quotes the Luton, England-
based carrier as saying in its statement.

Lufthansa, which has its main hub in Frankfurt, said its document
outlined ideas for a "restructured" Alitalia and could envisage
further talks, according to Bloomberg.

                          About Alitalia

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

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

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

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

                         Chapter 15

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


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


ASIA LIFE: Fitch Puts 'B' IFS Rating on Watch Negative
------------------------------------------------------
Fitch Ratings has put Kazakhstan-based Joint-Stock Company Life
Insurance Company Asia Life's (Asia Life) Insurer Financial
Strength (IFS) Rating 'B' and National IFS Rating 'BB+(kaz)' on
Rating Watch Negative (RWN).

KEY RATING DRIVERS

The RWN follows a weakening in Asia Life's regulatory solvency
position concurrent with a change in the ownership structure.

Asia Life's solvency margin ratio declined to 116% at end-
February 2018 from 167% at end-October 2017, largely due to the
sale of a commercial property valued at KZT330 million, which was
completed with a delayed payment. The receivables from this sale
are not recognised as available capital under the Kazakh
regulatory formula. Fitch also notes the heightened credit risk
associated with the delayed receipt of payment from the
commercial property sale, as the proceeds of the sale have been
outstanding for around four months.

In late 2017 Asia Life's majority individual shareholder
concluded a preliminary agreement to sell his stake to a group of
individuals. Following this, other minority shareholders also
started to sell their stakes. This change in ownership structure
may increase operational risks to Asia Life, for example with
changes to the management team leading to a loss of business
continuity or lower business volumes.

Business volumes weakened in the first two months of 2018,
declining 22% on a gross basis and 38% on a net basis compared
with 2M17. The main reason behind the decline is a decrease of
the pension annuity business, which resulted in a notably high
concentration on the workers' compensation insurance, which
accounted for 64% of net premiums written in 2M18 (39% for 2017).

Based on the unaudited 2017 results, Asia Life reported a net
profit of KZT41 million in 2017, considerably weaker than the net
profit of KZT410 million in 2016. The company's return on equity
decreased to 1.7% in 2017 from 16.1% in 2016. The key reason
behind the weakened profitability was a more intense use of
reinsurance with the reinsurance utilisation ratio increasing to
68% in 2017 from 36% in 2016 and insufficiently prudent expense
management in the context of decreased net business volumes and
unchanged investment income.

RATING SENSITIVITIES

The RWN on Asia Life's ratings could be resolved in the following
events:

- The restoration of the company's solvency margin, following
the full receipt of the proceeds of the recent real estate sale,
and the absence of negative consequences of a change in ownership
structure, evidenced by weaker sales or earnings, could result in
an affirmation of Asia Life's ratings.

- The non-payment of the proceeds related to the divested real
estate asset could lead to a downgrade of Asia Life's IFS Rating
to 'B-' and the National IFS Rating by at least one notch.


ASIACREDIT BANK: Fitch Cuts IDR to 'CCC' Then Withdraws Rating
--------------------------------------------------------------
Fitch Ratings has downgraded the Long-Term Issuer Default Ratings
(IDRs) of Kazakhstan's AsiaCredit Bank JSC (ACB) and Bank of
Astana JSC (BoA) to 'CCC' from 'B-'. The Outlook is Stable. Fitch
has simultaneously withdrawn the ratings for commercial reasons
and will no longer provide ratings and analytical coverage for
ACB and BoA.

The downgrades reflect a persistently high (increased at BoA)
volume of problem assets and risky potentially related party
exposures, as identified by Fitch, while resolving these risks
would most likely require external support, as pre-impairment
profitability on a cash basis remains weak (negative in ACB) and
capital buffers are only modest relative to the volume of high-
risk exposures. The downgrades additionally factor in the banks'
weakening competitive positions amid on-going sector
consolidation and strengthening of the larger players supported
by state capital injections.

KEY RATING DRIVERS
IDRS, VRS AND NATIONAL RATINGS
ACB

ACB's high-risk assets (net of reserves and cash collateral), as
identified by Fitch, remained broadly unchanged at 1.8x Fitch
core capital (FCC) in 2017. These include:

- Unreserved NPLs (0.2x of FCC).

- Loans for the acquisition of real estate property and to the
tenants of these premises (1.1x of FCC), some of which Fitch
considers to be potentially related to the bank. These loans have
grace periods for both principal and interest (accumulated
accrued interest already amounts to 20-30% of the gross
exposures), while repayment is uncertain and would probably
require a sale of the collateral, which Fitch believes is
unlikely without significant discounts/losses.

- Long-term project finance loans, which are mostly restructured
(0.5x of FCC). These are currently in investment phase and also
have long grace periods, while the recovery prospects are
unclear.

Core pre-impairment profit on a cash basis (excluding accrued but
not collected interest income and one-off sizeable FX gains in
2015) has been negative for three consecutive years (around 2% of
average gross loans in 2015-2017). This means that the reserving
of existing problems from profits is not possible. ACB's capital
buffer, as reflected by the FCC ratio of about 17% at end-2017,
is only modest relative to the volume of risky assets.

ACB manages liquidity reasonably conservatively, which helped it
to withstand a considerable 40% outflow of customer accounts in
4Q16-1Q17, driven by negative market sentiment and contractual
repayments of state funding. Since then, the funding base has
been stable and at end-2M18 the liquidity buffer covered customer
funding by a significant 45%. The nearest sizable refinancing
needs are relatively remote, in mid-2019, when a local bond issue
matures (7% of liabilities). However, the funding base could be
sensitive to customer sentiment, which has proved to be volatile.

BoA
BoA's NPLs accounted for a moderate 5% of gross loans and were
fully provisioned, so do not weigh significantly on Fitch
assessment of asset quality. However, Fitch identified a
significant volume of high-risk assets (equal to 2.6x FCC at end-
2017), which could be a future source of losses. These increased
over 2017 due to the creation of new such exposures.

The end-2017 figure of high risk-assets (net of reserves)
comprises:

- Problem loans in risky segments such as construction and
project finance (1.2x of FCC). These include restructured
exposures, financing of entities Fitch believes may be related
parties, FX-denominated loans not being serviced, and other non-
amortising loans.

- Reverse repo and securities exposures to related parties (0.4x
of FCC). These were originated in 2017, which in Fitch's view
undermines the quality of some of the bank's recent capital
raising transactions.

- Illiquid foreclosed assets (mostly land) (0.4x of FCC).

- Receivables on loans and guarantees from debt collectors (0.6x
of FCC) to whom the bank had sold its problem exposures with a
deferred payment.

Additional, although arguably somewhat lower, risk stems from
reportedly non-impaired FX-denominated loans (0.4x of FCC).

The bank's profitability remained weak with a modest 4% ROAE in
2017. Adjusting for interest accrued but not received in cash,
the core pre-impairment profit was only slightly above break-even
in 2017, improving from a loss of 1.5% of average assets in 2016.

BoA's capitalisation is rather tight. The FCC ratio increased to
13% at end-2017 from 11% at end-2016, as a result of the equity
raising in 2017. However, this increase was fully offset by the
one-off IFRS 9 provision adjustment in January 2018. Furthermore,
Fitch believes that the quality of some of the new equity
injections received in 2017 is questionable in view of the
similar increase in the bank's exposures to related parties in
the same period.

BoA's liquidity was negatively impacted by an estimated moderate
10% customer outflow during 2017, notably from state-related
entities. The bank's liquid assets covered deposits by 23% at
end-1M18, which is modest in view of a largest customer account
comprising one-third of total deposits.

SUPPORT RATINGS AND SUPPORT RATING FLOORS

The Support Ratings of '5' and Support Rating Floors of 'No
Floor' reflect the banks' small size and limited franchises,
making extraordinary support from the state, in case of need,
less likely. In Fitch's view, support from the banks' private
shareholders also cannot be relied upon.

SENIOR UNSECURED DEBT RATING

ACB's senior unsecured local debt ratings are aligned with the
Long-Term Local-Currency IDR and National Long-Term rating, and
reflect Fitch's assessment that recoveries are likely to be
average in the event of any default.

RATING SENSITIVITIES

Not applicable.

The rating actions are:

AsiaCredit Bank JSC
Long-Term Foreign- and Local-Currency IDRs: downgraded to 'CCC'
from 'B-', Outlooks Stable, withdrawn
Short-Term Foreign-Currency IDR: downgraded to 'C' from 'B',
withdrawn
National Long-Term Rating: downgraded to 'B(kaz)' from 'BB-
(kaz)'; Outlook Stable, withdrawn
Viability Rating: downgraded to 'ccc' from 'b-', withdrawn
Support Rating: affirmed at '5', withdrawn
Support Rating Floor: affirmed at 'No Floor', withdrawn
Senior unsecured debt: downgraded to 'CCC'/Recovery Rating 'RR4'
from 'B-'/Recovery Rating 'RR4', withdrawn
National senior unsecured debt rating: downgraded to 'B(kaz)'
from 'BB-(kaz)', withdrawn

Bank of Astana JSC
Long-Term Foreign- and Local-Currency IDRs: downgraded to 'CCC'
from 'B-', Outlooks Stable, withdrawn
Short-Term Foreign- and Local-Currency IDRs: downgraded to 'C'
from 'B', withdrawn
National Long-Term Rating: downgraded to 'B(kaz)' from 'BB-
(kaz)', Outlook Stable, withdrawn
Viability Rating: downgraded to 'ccc' from 'b-', withdrawn
Support Rating: affirmed at '5', withdrawn
Support Rating Floor: affirmed at 'No Floor', withdrawn


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


ORION ENGINEERED: S&P Alters Outlook to Pos. & Affirms 'BB' ICR
---------------------------------------------------------------
S&P Global Ratings said that it revised its outlook to positive
from stable on Luxembourg-based Orion Engineered Carbons S.A. S&P
also affirmed its long-term 'BB' issuer credit rating.

S&P said, "At the same time, we affirmed our 'BB' issue ratings
on Orion's EUR665 million senior secured term loan due 2024 and
EUR175 million revolving credit facility (RCF) due in 2021. The
'3' recovery rating on these instruments indicates our
expectation of meaningful recovery (rounded estimate: 60%) in the
event of a default.

"The revision of the outlook to positive reflects Orion's better-
than-expected credit metrics in 2017, with adjusted funds from
operations (FFO) to debt of close to 30% and adjusted debt to
EBITDA well below 3x, levels which we expect to recur or improve
slightly from 2018 onward. The company's overall superior
resilience to volatile oil prices, combined with strong positive
free cash flows, continues to support these levels. We also take
into account Orion's fine-tuned financial policy guiding 2.0x-
2.5x net debt to EBITDA (company defined), from 2.5x previously.
Orion has already outperformed that level over the course of
2017. Finally, we view the proposed share buyback as a one-off
transaction in light of the good performance last year, which we
do not expect to recur, leaving ample headroom for debt reduction
out of internally generated cash.

"We continue to view Orion's business risk profile as fair, which
is unlikely to be reassessed in the short term given the
company's overall limited size and scope, and focus on one
product type derived from carbon black. However, we acknowledge
that Orion's business performance has improved over the past few
years, building a track record of resilient profitability despite
volatile oil markets. This takes into account the company's
efficient contract setup in both rubbers and specialty products,
leading to limited sensitivity of earnings to raw materials price
volatility. The company has also restructured its operating
footprint, with a plant closure in France and realignment of its
Korean assets, which partly contributes to the strengthening of
global supply and demand. Orion's solid profitability level and
sound market shares, combined with favorable cycle conditions and
well-oriented end markets, should lead to improving EBITDA in the
coming two to three years, in our view.

"Our operating scenario should result in significant free cash
flows in the coming years. This takes into account capital
expenditure (capex) that includes expansion and realignment capex
for the transfer of the Korean capacities over 2017 and 2018. We
therefore expect capex will remain higher than maintenance in
2018, and possibly onward. However, we think that growth
prospects, strong EBITDA, and high operating cash conversion
should result in ample cash build-up to allow for debt reduction,
after factoring in modestly rising dividends. Finally, the
company has slightly tightened its financial policy, in our view,
guiding 2.0x-2.5x net debt to EBITDA, compared with 2.2x reported
at end-2017.

"On a fully S&P Global Ratings-adjusted basis, our credit metrics
at end-2017 were 29.8% FFO to debt and 2.6x debt to EBITDA. Our
main adjustments to debt include pension and operating leases
obligations. We apply a 15% haircut to cash."

S&P's base case for 2018 assumes:

  -- Adjusted EBITDA of about EUR240 million under S&P's
     assumptions.
  -- Capex of EUR80 million-EUR85 million.
  -- Potential working capital increases.
  -- Dividends of about EUR40 million, and $20 million share
     buybacks.
  -- Proceeds from sale of land in Korea.

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

  -- Unadjusted free cash flow of about EUR30 million-EUR50
     million (after interests and taxes), depending on working
     capital usage.

  -- Adjusted FFO to debt slightly exceeding 30%.

  -- Adjusted debt to EBITDA of about 2.5x.

S&P said, "The positive outlook reflects our expectation that
continued healthy market demand, combined with efficient cost
pass-through mechanisms and internal efficiency gains, should
support moderate EBITDA growth and strong free cash flow in 2018.
This should lead to adjusted debt to EBITDA well below 3x and
adjusted FFO to debt improving sustainably and comfortably above
30%, in line with the company's updated financial policy. This
would be commensurate with a higher rating in our view.

"We would revise the outlook back to stable if carbon black
markets deteriorated unexpectedly, or if we did not observe a
strong enough commitment to maintain adjusted ratios in line with
a higher rating, particularly regarding investments, dividends,
and share buybacks."


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


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

-- EUR228,000,000 Class A Senior Secured Floating Rate Notes due
    2030, Definitive Rating Assigned Aaa (sf)

-- EUR29,800,000 Class B-1 Senior Secured Floating Rate Notes
    due 2030, Definitive Rating Assigned Aa2 (sf)

-- EUR30,000,000 Class B-2 Senior Secured Fixed Rate Notes due
    2030, Definitive Rating Assigned Aa2 (sf)

-- EUR26,800,000 Class C Senior Secured Deferrable Floating Rate
    Notes due 2030, Definitive Rating Assigned A2 (sf)

-- EUR22,400,000 Class D Senior Secured Deferrable Floating Rate
    Notes due 2030, Definitive Rating Assigned Baa2 (sf)

-- EUR23,100,000 Class E Senior Secured Deferrable Floating Rate
    Notes due 2030, Definitive Rating Assigned Ba2 (sf)

-- EUR11,100,000 Class F Senior Secured Deferrable Floating Rate
    Notes due 2030, Definitive Rating Assigned B1 (sf)

RATINGS RATIONALE

Moody's definitive rating of the rated notes addresses the
expected loss posed to noteholders by the legal final maturity of
the notes in 2030. The definitive ratings reflect the risks due
to defaults on the underlying portfolio of loans given the
characteristics and eligibility criteria of the constituent
assets, the relevant portfolio tests and covenants as well as the
transaction's capital and legal structure. Furthermore, Moody's
is of the opinion that the collateral manager, Ares European Loan
Management LLP ("Ares"), has sufficient experience and
operational capacity and is capable of managing this CLO.

Ares IX is a managed cash flow CLO. At least 96% of the portfolio
must consist of senior secured loans and senior secured bonds and
up to 4% of the portfolio may consist of unsecured senior loans,
second-lien loans, mezzanine obligations and high yield bonds.
The portfolio is expected to be approximately 80% ramped up as of
the closing date and to be comprised predominantly of corporate
loans to obligors domiciled in Western Europe.

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

In addition to the seven classes of notes rated by Moody's, the
Issuer will issue EUR42.5m of subordinated notes, which will not
be rated.

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

Methodology Underlying the Rating Action:

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

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

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

Loss and Cash Flow Analysis:

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

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

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

Par amount: EUR400,000,000

Diversity Score: 41

Weighted Average Rating Factor (WARF): 2720

Weighted Average Spread (WAS): 3.42%

Weighted Average Coupon (WAC): 4.50%

Weighted Average Recovery Rate (WARR): 43.0%

Weighted Average Life (WAL): 8.5 years

Stress Scenarios:

Together with the set of modeling assumptions above, Moody's
conducted additional sensitivity analysis, which was an important
component in determining the definitive rating assigned to the
rated notes. This sensitivity analysis includes increased default
probability relative to the base case. Below is a summary of the
impact of an increase in default probability (expressed in terms
of WARF level) on each of the rated notes (shown in terms of the
number of notch difference versus the current model output,
whereby a negative difference corresponds to higher expected
losses), holding all other factors equal:

Percentage Change in WARF: WARF + 15% (to 3128 from 2720)

Ratings Impact in Rating Notches:

Class A Senior Secured Floating Rate Notes: 0

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

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

Class C Senior Secured Deferrable Floating Rate Notes: -1

Class D Senior Secured Deferrable Floating Rate Notes: -1

Class E Senior Secured Deferrable Floating Rate Notes: 0

Class F Senior Secured Deferrable Floating Rate Notes: 0

Percentage Change in WARF: WARF + 30% (to 3536 from 2720)

Ratings Impact in Rating Notches:

Class A Senior Secured Floating Rate Notes: 0

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

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

Class C Senior Secured Deferrable Floating Rate Notes: -3

Class D Senior Secured Deferrable Floating Rate Notes: -2

Class E Senior Secured Deferrable Floating Rate Notes: -1

Class F Senior Secured Deferrable Floating Rate Notes: -1


EAGLE SUPER: S&P Assigns 'B' Corp Credit Rating, Outlook Stable
---------------------------------------------------------------
S&P Global Ratings assigned its 'B' corporate credit rating to
Eagle Super Global Holding B.V. (d/b/a The LYCRA Co.). The rating
outlook is stable.

S&P said, "At the same time, we assigned our 'B' issue-level and
'3' recovery ratings to the company's proposed $800 million
senior secured notes, consisting of an approximately $300 million
euro-equivalent tranche and an approximately $500 million U.S.
dollar tranche. The '3' recovery rating reflects our expectation
for meaningful (50% to 70%; rounded estimate: 55%) recovery in
the event of a payment default. The borrower of the debt is Eagle
Intermediate Global Holding B.V."

S&P bases all issue-level ratings on preliminary terms and
conditions.

China-based Shandong Ruyi Technology Group, along with several
other co-investors, is acquiring U.S.-based INVISTA Equities'
Apparel and Advanced Textiles business, which will be referred to
as The LYCRA Co. S&P said, "We expect the transaction will close
in the second quarter of 2018 and that it will be funded with a
combination of approximately $800 million of newly issued notes
(U.S. dollar- and euro-denominated), a $100 revolving credit
facility (unrated), and approximately $1.7 billion of equity.
The stable outlook on The LYCRA Company reflects our expectation
that the company will continue to grow volumes as a result of
industry trends that require spandex, such as athleisure-wear and
stretch jeans. We also expect that producers will continue to pay
a premium for branded LYCRA and that the company will continue to
receive margins higher than peers as a result. We expect that the
company will be able to effectively manage swings in raw
materials prices, such as PTMEG, and that consumer consumption
continues to remain positive. Our base case assumes US GDP growth
of about 2.9% in 2018 and consumer consumption of about 2.7% over
the same period. Similarly, we expect 2.4% GDP growth in Europe
and 5.6% in Asia Pacific over the same period. Over the next 12
months, we expect credit metrics will remain appropriate for the
rating. More specifically, we expect debt to EBITDA to remain in
the 2.5-3x range and that FFO to debt will remain in the 20% to
25% range on a weighted average pro forma basis. We have not
factored in any significant debt-funded acquisitions or
shareholder rewards in our base case. We base all ratings on
preliminary terms and conditions and our base case assumes that
the transaction and funding closes as planned. We also assume
that the company receives all regulatory approvals."

S&P said, "We could lower ratings on the company over the next 12
months if we expected pro-forma FFO to debt to be below 20% on a
sustained basis. This could occur if organic revenue growth
stalled or turned negative. Also potentially contributing to a
downside scenario would be an economic downturn in any of the
company's key end markets, especially the apparel segment. Given
the product concentration, a downside scenario could also
transpire if there were material changes in industry trend toward
using spandex.

"Additionally, we could lower ratings if we no longer expect that
management would be committed to maintain current leverage levels
or if we expect that the owners would take any dividends. Along
these lines, we could also lower ratings if there was
deterioration at the company's majority owner, Shandong Ruyi
Technolony Group. We could also lower ratings if we expected the
company would no longer maintain liquidity, such that we believed
sources of funds would not exceed uses of funds by more than 1.2x
or if we thought the company would have pressure on its covenant.
We do not factor any material impact of tariffs from China into
our base case scenario, and we could potentially take a rating
action is we expected that heavy tariffs could affect sales.

"To consider an upgrade, we would have to assess the credit
quality of the Majority owner, Shandong Ruyi Technology Group, at
a level that does not constrain ratings on The LYCRA Company. We
could raise ratings on the company if there was a positive rating
action on the owner. We would also have to believe that The LYCRA
Company's stand-alone credit quality does not deteriorate from
this assessment."


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


* S&P Raises ICR on Spanish Banks on Reduced Funding Risks
----------------------------------------------------------
S&P Global Ratings took the following rating actions on Spanish
banks:

-- Raised S&P's long- and short-term issuer credit ratings on
    Banco Santander S.A. to 'A/A-1' from 'A-/A-2', raised the
    long-term rating on its highly strategic subsidiaries Banco
    Popular Espanol S.A. and Santander Consumer Finance S.A. to
    'A-' from 'BBB+', and affirmed the short-term ratings at 'A-
    2'. The outlooks on Banco Santander S.A. and Santander
    Consumer Finance S.A. are stable. The outlook on Banco
    Popular Espanol is positive.

-- Raised S&P's long-term ratings on Banco Bilbao Vizcaya
    Argentaria S.A. and its core subsidiary BBVA Global Markets
    B.V. to 'A-' from 'BBB+'. The outlook on both is stable. S&P
    affirmed the short-term ratings at 'A-2'. Raised the long-
    term rating on Caixabank S.A. to 'BBB+' from 'BBB' and
    affirmed the 'A-2' short-term rating. The outlook is stable.

-- Raised the long-term rating on Bankinter S.A. to 'BBB+' from
    'BBB' and affirmed the 'A-2' short-term rating. The outlook
    is stable.

-- Raised the long- and short-term ratings on Bankia S.A. to
    'BBB/A-2' from 'BBB-/A-3', and those on its holding parent
    company BFA Tenedora de Acciones S.A.U. to 'BBB-/A-3' from
    'BB+/B'. The outlook on both is stable.

-- Raised the long- and short-term ratings on Banco de Sabadell
    S.A. to 'BBB/A-2' from 'BBB-/A-3'. The outlook is stable.

-- Raised the long-term ratings on Abanca Corporaci¢n Bancaria
    S.A. to 'BB' from 'BB-' and affirmed the 'B' short-term
    ratings. The outlook remains positive.

-- Affirmed the ratings on Cecabank S.A. at 'BBB/A-2'. The
    outlook remains positive.

-- Affirmed the ratings on Kutxabank S.A. at 'BBB/A-2'. The
    outlook remains positive.

-- Affirmed the ratings on Caja Laboral Popular Cooperativa de
    CrÇdito at 'BBB-/A-3'. The outlook remains positive.

-- Affirmed the ratings on Ibercaja Banco S.A. at 'BB+/B'. The
    outlook remains positive.

S&P said, "We also raised our issue ratings on the senior
unsecured, senior nonpreferred, subordinated, and preferred debt
instruments issued or guaranteed by the entities that we
upgraded, except for the short-term debt ratings of entities
whose short-term ratings were affirmed."

S&P also took the following rating actions on the subsidiaries of
Santander, SCF, and BBVA:

-- Raised the long-term ratings on Santander's U.S. bank
    subsidiary, Santander Bank N.A., to 'A-' from 'BBB+' and
    affirmed the 'A-2' short-term rating, reflecting S&P's
    opinion that the U.S. bank is highly strategic to its parent.
    The outlook is stable.

-- Raised the long-term ratings on Santander's U.S. intermediate
    holding company, Santander Holdings USA (SHUSA), to 'BBB+'
    from 'BBB', and affirmed the 'A-2' short-term rating, in line
    with a similar upgrade of the group's operating bank, but
    respecting the one-notch difference to reflect structural
    subordination. The outlook is stable.

-- Raised to 'A-' from 'BBB+' the long-term ratings on German
    bank Santander Consumer Bank AG, core subsidiary of Santander
    Consumer Finance S.A. The outlook is stable. S&P affirmed the
    short-term ratings at 'A-2'.

-- Affirmed the long- and short-term ratings on BBVA's U.S.,
    subsidiary Compass Bank, and its intermediate holding company
    BBVA Compass Bancshares, at 'BBB+/A-2'.

-- Raised the preferred stock rating issued by Compass Loan
    Holdings (a subsidiary of Compass Bank) to 'BB' from 'BB-',
    in line with raising the parent's preferred stock rating, as
    S&P believes the risk of dividend deferral is equivalent to
    the risk on the parent's preferred stock.

-- Raised the long-term ratings on BBVA's strategic Peruvian
    subsidiary, BBVA Banco Continental, to 'BBB+' from 'BBB',
    adding one notch of group support uplift. S&P affirmed the
    'A-2' short-term rating. The outlook is stable.

-- Affirmed the 'BBB-' rating on BBVA Banco Continental's
    nondeferrable subordinated debt, as S&P considers group
    support to hybrid instruments uncertain.

RATIONALE

S&P said, "The rating actions take into account our view that,
after years of meaningful deleveraging, funding risks have
reduced for the Spanish banking system. Spanish banks have seen a
significant funding rebalancing in the past few years, with
retail customer deposits now financing the bulk of their credit
operations. Funding costs have reduced to all-time lows and
access to external funding markets has been restored, supported
by improved investor confidence in the banking system turnaround.
While the repayment of still-high European Central Bank (ECB)
borrowings remains a challenge, and Spanish banks are likely to
remain structurally more reliant than peers on foreign funding,
the ongoing strengthening of Spain's creditworthiness provides
some comfort. The financially stronger position of the sovereign
now renders it equivalent, in our view, to other European peers
in terms of its ability to act as backstop for the banking system
if funding difficulties arise. Our upgrade of Spain on March 23,
2018, was the third in the last four years.

"Our view of the industry risks faced by the Spanish banking
industry has improved (to 4 from 5, on a scale of 1-10 with 1
being the lowest risk), as has our overall view of the relative
strengths and weaknesses of the Spanish banking system, reflected
in our Banking Industry Country Risk Assessment (BICRA) for
Spain--now Group 4, from Group 5 previously.

"We have revised up our anchor for banks operating primarily in
Spain to 'bbb' from 'bbb-', which has led us to upgrade 11 banks.
The bank-specific considerations we were monitoring did not
prevent these upgrades. For example, with Banco Santander--almost
10 months after its acquisition of Banco Popular--we consider
that the integration is progressing as planned. We now believe
that the potential managerial risks posed by the integration of
Banco Popular into the group and the likelihood of the bank
having to deal with adverse financial ramifications not
previously contemplated have diminished. Similarly, we think that
the potential risks posed by the Catalonian political crisis to
the franchises and financial strength of Caixabank and Sabadell,
the two banks most exposed to the region, remain under control.
The outlooks are stable on all upgraded banks except Banco
Popular and Abanca Corporaci¢n Bancaria, which still carry
positive outlooks.

"We affirmed our ratings on four other, mostly regional and less
diversified, banks either because we see them facing more
difficulty in significantly improving returns and proving the
medium-term profitability of their business models, and enhancing
and diversifying their business (Ibercaja and Cecabank); or
because we no longer see capital compared to risks as a rating
strength (Laboral); or we are uncertain that it will remain a
rating strength (Kutxabank). In this last case, we used a
negative transition notch to set our rating on the bank below the
SACP. The long-term ratings on these four banks, however, still
have a positive outlook, reflecting the possibility of upgrades
if they manage to deliver on business plans or strengthen balance
sheets to offset the inherent weaknesses that stem from their
geographic and business concentrations.

"As part of our review, and given that our view of the funding
position of the Spanish banking system as a whole has
strengthened, we also revised to average all our bank-specific
funding assessments that we previously placed in the above-
average category. That is because we no longer see major
structural differences in the funding profiles of Spanish banks
to justify above-average assessments, particularly in the context
of our overall more positive assessment of funding for the system
as a whole. This action had no ratings impact."

The Spanish banking system still faces two main challenges--
hastening the reduction of the still-high stock of problematic
assets and improving returns. The latter remain below banks' cost
of capital, amid still very low rates, muted volume growth, and
intense competition.

S&P said, "Strong economic momentum, coupled with the ongoing
property market recovery that we now see as being in an
expansionary phase, will continue to help banks work-out their
problematic exposures as well as boost a resumption of lending
and financially strengthen households and corporates. The
government also stands to gain policy flexibility in the future.
We therefore continue to believe that economic risks could
eventually ease further for Spanish banks, but we're not there
yet. We would need to see an accelerated reduction of banks'
unproductive legacy assets to conclude that economic risks have
eased and banks are operating closer to normal. In our view, the
banks will achieve this only if they undertake more significant
disposals. Recent experience shows that nonperforming asset (NPA)
stock will only decline organically by about 1.5%-2.0% of average
loans per year, meaning a long road ahead to really leave the
problem behind. We estimate that at end-2017 the stock of NPAs
was still 13.5% of loans.

"Following the rating actions, only two of the 15 entities we
rate have speculative-grade long-term ratings, while the
unweighted-average rating of Spanish banks stands at 'BBB'.
Although still below pre-crisis levels, on average current
ratings stand two or three notches above their lowest point in
the cycle."

OUTLOOKS

BANCO SANTANDER S.A.: STABLE

The stable outlook on Banco Santander S.A. assumes that the
integration of Popular will continue smoothly, with the bank
focusing on aligning Popular with the group's operating standards
and extracting cost synergies. S&P said, "We expect the bank to
continue delivering on its 2016-2018 strategic goals, gradually
improving profitability and strengthening capital. Stronger
revenues and stable operating and credit costs should support
higher bottom-line results in 2018 and 2019, with returns on
equity improving to 8.0%-8.5%. We now see the bank's risk-
adjusted capital (RAC) ratio increasing to about 7.5% by 2019,
thanks to retained profits and further issuance of Additional
Tier 1 (AT1) instruments. We have not assumed that the bank would
face litigation charges in excess of the contingency provisions
created at the time of Popular's acquisition. While asset quality
indicators could deteriorate somewhat in some business
segments/geographies, overall we expect the group will keep
whittling down its stock of NPAs."

Wide geographic diversification will continue to favor the bank,
with strong economic momentum in Spain offsetting a potentially
less favorable U.K. economy. Political risks in Brazil remain
high and we see increasing political uncertainty in Mexico, too,
ahead of the presidential elections. S&P expects the bank will
manage through regardless.

Although the bank will continue issuing bailinable instruments to
comply with the Jan. 1, 2019 total loss-absorbing capacity
requirements, S&P thinks it unlikely that the buffer of
bailinable debt would reach 400 basis points of its S&P Global
Ratings risk-weighted assets, a level that would enable it to
benefit from a one-notch rating uplift.

S&P said, "Our base case is that the ratings will not change.
However, we could consider taking a positive rating action if the
bank shows a stronger build-up of loss-absorbing instruments than
we currently expect. Conversely, the ratings could come under
pressure if unexpected events undermine the bank's capital
position, the bank engages in challenging acquisitions or we
lower our sovereign rating on Spain."

BANCO POPULAR ESPANOL S.A.: POSITIVE

S&P said, "The positive outlook on Banco Popular reflects the
possibility that we could raise our ratings on the bank over the
next 12-24 months as integration with Banco Santander progresses,
leading us to conclude that the bank has become a core subsidiary
and is therefore likely to benefit from financial assistance from
the rest of the group under any foreseeable circumstances.
Conversely, if we do not see this happen, we would revise the
outlook to stable."

SANTANDER CONSUMER FINANCE S.A.: STABLE

S&P said, "The stable outlook on Santander Consumer Finance S.A.
(SCF) reflects that on its parent, Banco Santander S.A. As long
as we continue to assess SCF as highly strategic to Santander,
our ratings on SCF will remain one notch below those on the
parent and move in tandem with them.

"Although our base-case scenario is for the ratings to remain
unchanged, an upgrade of SCF in the next two years could be
triggered by a similar action on both the parent and the Spanish
sovereign, or by our revision of SCF's status within the group to
core. Conversely, we could lower the ratings on SCF following a
similar action on the parent, or if we believed that the parent's
commitment to SCF had weakened, leading us to revise downward our
view of the subsidiary's long-term strategic importance for the
Santander group."

SANTANDER CONSUMER BANK AG: STABLE

S&P said, "The stable outlook on SCB mirrors that on its parent
SCF, as we expect it to remain a core subsidiary and as such be
directly affected by its parent's credit profile strengthening or
weakening.

"We could raise the ratings on SCB if we upgraded SCF.
Conversely, we could lower the ratings on SCB following a similar
action on SCF, or if we revised down SCB's core status. We see
the latter scenario as remote over the outlook horizon."

SHUSA AND SANTANDER BANK: STABLE

The stable outlooks on SHUSA and Santander Bank mirror the stable
outlook on their parent, Banco Santander. S&P expects that any
changes in the ratings on SHUSA and Santander Bank over the next
two years will be linked to the ratings on the parent, as long as
S&P considers the U.S. bank highly strategic. The SACP is 'bbb-',
reflecting SHUSA's substantial exposure to subprime auto lending,
partly offset by its good northeast bank franchise and strong
capital ratios.

BANCO BILBAO VIZCAYA ARGENTARIA S.A.: STABLE

S&P said, "Our stable outlook on BBVA reflects our expectation
that all factors driving our ratings are unlikely to change over
the next 12-24 months. We expect BBVA to continue focusing on
developing its strong retail banking franchises in its several
countries of operation, aiming at strengthening profitability
while pushing for digitalization. We are not factoring in
inorganic expansion. We think the bank is well-positioned to
accommodate potentially greater uncertainty in Mexico ahead of
this year's presidential elections, and in Turkey, given Spain's
good economic momentum.

"We expect BBVA's bottom-line profitability to continue
recovering, with the Spanish division upping its contribution to
group profits thanks primarily to lower operating and credit
costs. We believe that the bank's capacity to absorb unexpected
losses in a stress scenario will remain a rating strength and
expect the bank's RAC ratio to exceed 7% this year. We see the
group's asset quality indicators continuing to trend down, with
positive developments in Spain offsetting potential deterioration
in some Latin American markets. While the bank will gradually
issue bailinable debt eligible to absorb losses in a resolution
scenario, we don't think its buffer of bailinable instruments
will be enough to see the bank benefit from a one-notch rating
uplift.

"Although we see a rating upgrade over the outlook horizon as
unlikely, we could consider it if, contrary to our expectations,
the bank builds up a buffer of loss-absorbing instruments in
resolution equivalent to 400 basis points of S&P Global Ratings
risk-weighted assets, or if it substantially improves its
profitability and proves to be an outperformer in its peer group.
In either of these scenarios, for the ratings to be raised we
would need to have upgraded Spain itself (BBVA and the sovereign
are currently at the same rating level) or we would have to be
convinced that there is an appreciable likelihood that the bank
could meet its obligations in a timely manner in the hypothetical
event of a Spanish sovereign default, a condition that BBVA did
not previously meet.

"Conversely, factors that could lead to a lower rating include a
meaningful increase of risks in Mexico or Turkey that would
hamper BBVA's financial strength, or us downgrading Spain."

BBVA COMPASS BANCSHARES AND COMPASS BANK: STABLE

The stable outlooks on U.S. intermediate holding company BBVA
Compass Bancshares and its main bank, Compass Bank are related to
the stable outlook on their parent, BBVA S.A. S&P said, "We are
not likely to lower the rating on BBVA Compass over the next two
years because it is a highly strategic subsidiary of the parent
and the rating is generally set one notch below the parent's
group credit profile or at its 'bbb+' SACP. To raise the rating
on BBVA Compass one notch to 'A-' we would need to raise the SACP
to 'a-' from 'bbb+'. This could occur if the bank demonstrated a
track record of improved competitive positions in lending and
deposit-gathering and improved earnings while maintaining strong
capital and good asset quality. We could raise Compass Loan
Holding's preferred stock rating (currently capped at the parent
preferred stock rating) if we raise the parent's preferred stock
rating."

BBVA BANCO CONTINENTAL: STABLE

The stable outlook mirrors that of the sovereign ratings on Peru
and the rating on the parent.

CAIXABANK S.A.: STABLE

S&P said, "The stable outlook reflects that our view of the
bank's creditworthiness is unlikely to change in the next 12-24
months. We expect Caixabank to meet the challenges of the
political situation in Catalonia, and remain a dominant player in
Spain. We also expect the bank to maintain a prudent funding and
liquidity profile and continue derisking its balance sheet.
Specifically, we expect the workout of NPAs to accelerate, with
the bank preserving its better-than-domestic-average asset
quality metrics. That said, and despite anticipating that the
bank will build up capital organically in a supportive economic
environment, we don't think its capital compared to risks would
be a rating strength. Finally, we expect Caixabank to continue
delivering on the restructuring of Banco BPI S.A., its recently
acquired Portuguese operations.

"Although unlikely to happen, we could consider a ratings upgrade
on Caixabank if we see its capital and profitability
strengthening well beyond our expectations, leading to a RAC
ratio sustainably above 7%, while at the same time its NPA stock
reduces meaningfully.

"Conversely, we could lower the ratings on Caixabank if its
planned reduction of NPAs slows down and its asset quality
metrics align, rather than compare well, with those of domestic
peers. We could also take a negative rating action if political
tensions in Catalonia persist over an extended period and weigh
on its franchise and market position, or on its financial
profile."

BANKIA: STABLE

The stable outlook reflects that, despite a potentially more
supportive economic environment leading to better capital
measures at Bankia, capital strengthening will unlikely be
material enough to drive an upgrade over the next 12-24 months.

S&P said, "Our current expectation is that the bank's RAC ratio
will improve to around 8.5% by the end of 2019, thanks to both
organic capital generation and issuance of hybrid instruments.
This forecast also assumes that the gradual privatization of the
bank will not meaningfully impair the group's consolidated
capitalization. An easing of economic risks in Spain would add
about 100 basis points to the bank's RAC ratio. Moreover, we
expect Bankia to reduce its NPA ratio to below 10% in the next
two years, while improving its recurrent profitability following
the integration of recently acquired BMN.

"Our base case is for the ratings to remain unchanged. However,
we could take a positive rating action if the bank manages to
strengthen its RAC ratio sustainably above 10%, while materially
improving asset quality metrics. Conversely, we could downgrade
Bankia if asset quality metrics start lagging domestic and
international peers."

BFA: STABLE

The stable outlook on BFA mirrors that of the group's operating
entity, Bankia, as S&P expects the rating on both the operating
and holding company to move in tandem.

SABADELL: STABLE

S&P said, "The stable outlook indicates that we expect our
ratings to remain unchanged over the next 12-24 months, even if
Spain's economic environment becomes more supportive. In such
scenario, the bank's capital measure could strengthen beyond our
current expectations, but not enough to become a ratings
strength. Our current forecast is that the bank's RAC ratio will
improve to around 7.2%-7.5% this year and next, supported by
earnings retention. Profitability should also improve moderately
on the back of solid fee income growth and lower credit
provisions, but will remain below the bank's cost of capital. An
easing of economic risks in Spain would add some 60 basis points
to our current forecasts.

"Our stable outlook also assumes that the bank will continue to
actively reduce its stock of NPAs--both nonperforming loans and
real estate--which should fall below 8% by end-2019. Despite the
less supportive economic environment in the U.K. post the Brexit
vote, which could challenge the bank's plans to rapidly develop
its U.K. franchise and increase its profit contribution to the
group, we don't see it as materially hampering the group's
financials. We also expect that the bank will continue to meet
the challenges posed by the political situation in Catalonia.

"At this stage, we consider an upgrade to be remote. Conversely,
we could lower our ratings if, contrary to our expectations, the
bank fails to improve its capital and maintain a RAC ratio
sustainably above 7% or the balance sheet de-risking process
slows substantially. We could also take a negative action if
political tensions in Catalonia persist over an extended period
and weigh on its franchise and market position, or on its
financial profile."

BANKINTER: STABLE

The stable outlook indicates limited likelihood of a rating
change over the next 12-24 months, even if Spain's economic risks
ease and lead to a strengthening of the bank's capitalization, as
the latter would not be material enough for us to consider the
bank's capital as strong. S&P said, "Indeed, our base case is
that Bankinter's RAC ratio will remain at the lower end of
adequate (7%-10%) this year and next. A stronger economic
environment would add about 100 basis points to our RAC
forecasts. We also expect that Bankinter will maintain
conservative underwriting standards while expanding its loan
book, will successfully develop its Portuguese activities, and
will contain its reliance on short-term wholesale financing."

S&P said, "At this stage, we consider an upgrade to be remote.
Having said that, we could consider it if, contrary to our base
case, Bankinter's solvency strengthened materially, supporting a
RAC ratio sustainably above 10% over our two-year timeframe.
Conversely, we could lower our ratings if Bankinter's risk
appetite increases as it maintains steady loan growth or its
funding profile relies more heavily on short-term sources."

CECABANK: POSITIVE

The positive outlook on Cecabank reflects the possibility that
S&P could raise its long-term rating within the next 12-24 months
if:

-- Cecabank proves able to strengthen its franchise and grow and
    diversify its business further.

-- Cecabank maintains robust capitalization, a RAC ratio
    sustainably above 15%, while preserving its risk profile,
    counterbalancing its concentrated business model. Capital
    could strengthen further if S&P's assessment of economic
    risks for the Spanish banking system were to improve.

-- S&P could revise the outlook to stable if the above looked
    unlikely to come to fruition.

KUTXABANK: POSITIVE

The positive outlook on Kutxabank reflects the possibility of an
upgrade over the next 12-24 months if the bank remains solidly
capitalized compared to the risks it faces. This could happen if:

-- The organic reduction of its NPA stock and additional
    disposals of noncore equity stakes, coupled with a further
    easing of economic risks in Spain, push the bank's RAC ratio
    sustainably above 10%, from our current estimate of 8% at
    end-2017; or,

-- The bank accelerates the reduction of its stock of NPAs
    through opportunistic sales so that its asset quality
    indicators continue comparing well with those of peers,
    rather than actually converging to the industry average.
    S&P's base case is that the bank's NPAs will account for 8%
    of loans at end-2019.

S&P said, "Our positive outlook also assumes that the bank will
maintain stricter risk controls and a clearer strategic focus
compared with peers, and that profitability will improve
moderately thanks to fee-related business and contained costs.
Still, we forecast the bank to post only mid-single digit return-
on-equity this year and next."

Conversely, S&P could revise the outlook to stable if:

-- Kutxabank's capitalization looks unlikely to strengthen
    enough.

-- The bank fails to significantly de-risk its balance sheet and
    to maintain better-than-peers asset quality metrics.

-- The bank engages in acquisitions that could impair its
    financial profile or represent a managerial challenge, or

-- The bank's business model proves insufficiently profitable.

CAJA LABORAL: POSITIVE

S&P said, "The positive outlook on Caja Laboral reflects the
possibility that we could raise our ratings within the next 12-24
months if, in the context of a further easing of economic risks
in Spain, Caja Laboral exhibits a clear capital strength, which
would help it offset the risks emanating from its inherently
concentrated business model, while preserving the value of its
franchise. This would imply achieving and sustaining a RAC ratio
above 10%.

"Our positive outlook also assumes that Caja Laboral will
maintain its currently prudent strategy and that the bank will
remain primarily retail-funded. We also expect the bank's
currently better-than-peers' asset quality measures to gradually
converge to the industry average. In particular, we forecast that
its NPAs will fall to about 7% of gross loans by end-2019. Over
the outlook horizon, we expect the bank's profitability to stand
below its cost of capital, with return on equity hovering around
5.0%-5.5%.

"We could revise the outlook to stable if, contrary to our
expectations, we don't see prospects of the economic environment
in Spain becoming more supportive for banks, rendering a material
enough capital strengthening unlikely."

IBERCAJA: POSITIVE

The positive outlook on Ibercaja reflects the possibility that
S&P could raise its ratings in the next 12 months if the entity
delivers on its strategic targets and manages to turn around its
still-weak underlying profitability or if it strengthens its
capital, thereby offsetting its comparatively limited business
and geographical diversification. The bank's new strategic plan
contemplates an improvement of the bank's return on tangible
equity to above 9.0% by 2020 from the 5.3% reported at end-2017.

S&P said, "We currently expect the bank's RAC ratio will be about
6% by end-2019, but it could strengthen by an additional 70 basis
points if Spain's economic risks ease further. We expect Ibercaja
to reduce its problem assets to 10% of gross loans by 2019.

"If Ibercaja's creditworthiness were to improve, we could raise
our ratings on the bank's AT1 preferred securities by two
notches, rather than one, owing to the bank's transition to
investment grade.

"We could revise the outlook to stable if we anticipate that
Ibercaja is going to fail to significantly improve its returns,
if it engages in acquisitions that impair its financial profile,
or we no longer see a chance of risks in Spain's economic
environment easing."

ABANCA: POSITIVE

The positive outlook on Abanca reflects the possibility that S&P
could raise its long-term rating in the next 12 months if:

-- The bank succeeds in delivering on its business plan and
    sustainably improves its operating profitability, or

-- Its capitalization further strengthens, more likely in the
    context of an easing of the economic risks faced by Spanish
    banks, such that we were to conclude that its capital vis-Ö-
    vis its risks is no longer a rating weakness.

The positive outlook also assumes that Abanca will continue to
reduce its portfolio of NPAs, while keeping adequate coverage
levels. In particular, S&P forecasts that the bank's NPAs will
fall to about 6.0%-6.5% of gross loans by end-2019.

S&P could revise the outlook to stable if it anticipates that:

-- Abanca will fail to further deliver on its strategic plan and
    sustainably improve its returns;

-- It engages in acquisitions that impair its financial profile
    or pose managerial challenges;

-- S&P doesn't see prospects of the economic environment in
    Spain becoming more supportive for banks and therefore of
    Abanca's capitalization becoming adequate (its RAC ratio
    sustainably exceeding 7%); or

-- Abanca were to face difficulties in financing new lending
    with stable funding sources and this offsets the benefits of
    a potential capital strengthening or profitability
    turnaround.

  BICRA SCORE SNAPSHOT FOR SPAIN

                             To                  From
  BICRA Group                4                   5
  Economic Risk              5                   5
  Economic resilience      Intermediate Risk   Intermediate Risk
  Economic imbalances      Intermediate Risk   Intermediate Risk
  Credit risk in the economy High Risk           High Risk

  Industry Risk              4                   5
  Institutional framework   Intermediate Risk   Intermediate Risk
  Competitive dynamics      Intermediate Risk   Intermediate Risk
  Systemwide funding        Intermediate Risk   High Risk

  Trends
  Economic risk trend        Positive            Positive
  Industry risk trend        Stable              Positive

A list of Affected Ratings can be viewed at:

          https://bit.ly/2EwGVh0


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


CARILLION PLC: Former Offices Sold for GBP1.45 Million
------------------------------------------------------
Alan Jones at Press Association reports that offices formerly
used by collapsed engineering giant Carillion have been sold for
GBP1.45 million.

According to Press Association, Midlands property investment
company NPI (Kettering) Ltd., a subsidiary of Norton Property
Investments, has acquired the freehold interest in six office
units in Kettering.  Construction firm Balfour Beatty is already
a tenant on the site, Press Association notes.

Meanwhile, evidence is emerging of sub-contractors and suppliers
going into administration as a direct result of losing business,
and money, following Carillion's demise, Press Association
discloses.


COMET BIDCO: S&P Assigns 'B-' Long-Term Issuer Credit Rating
------------------------------------------------------------
S&P Global Ratings assigned its 'B-' long-term issuer credit
rating to Comet Bidco Ltd., the parent of U.K.-based events
organizer Clarion Events. The outlook is stable.

S&P said, "At the same time, we assigned our 'B-' issue rating to
the group's proposed $230 million senior secured term loan (the
additional B2 facility). The recovery rating is '3', indicating
our expectation of average (50%-70%, rounded estimate: 50%)
recovery in the event of payment default.

"We also assigned our 'B-' issue rating to the group's existing
GBP315 million senior secured term loan B1; $190 million senior
secured term loan B2; and revolving credit facility (RCF), which
the group has proposed increasing by GBP25 million to GBP75
million. The recovery rating is '3', indicating our expectations
of average (50%-70%, rounded estimate: 50%) recovery in the event
of payment default.

"Our assigned rating reflects our view that following the
acquisition of PennWell and issuance of $230 million of new debt,
Clarion's pro forma S&P Global Ratings-adjusted leverage will be
commensurate with a 'B-' rating. Our forecast adjusted debt to
EBITDA, including the PennWell acquisition, is 7.5x-8.0x for the
financial year (FY) ending Jan. 31, 2018 and 6.4x-6.9x for
FY2019. At the same time, the rating is constrained by the
group's financial policy and the potential for restructuring and
integration charges.

PennWell is a U.S.-based exhibitions business that at its core
organizes six must-attend scale exhibitions and puts out two
publications for the public safety and energy industries. S&P
said, "In our view, this acquisition will complement Clarion's
existing portfolio and increase its scale of operations. PennWell
generated an estimated GBP45 million revenue in FY2018 and
acquiring it will enhance Clarion's geographic diversity. We
estimate Clarion's pro forma revenues will reach about GBP400
million in FY2018 and reported EBITDA will be about GBP87
million-GBP92 million."

The addition of PennWell will increase Clarion's exposure to the
U.S. exhibition market and will help reduce dependence on the
U.K.-based events. After the acquisition, the group would
generate about 25% of its revenue in the U.S., up from about 17%
currently. It will also add several successful shows, which will
be among the largest in Clarion's portfolio and provide the group
a scalable operation in the key U.S. exhibitions market.

Clarion's earnings and cash flows still vary year-on-year due to
the effect of biennial events in even fiscal years. Clarion has
two major biennial events -- Defence and Security Equipment
International (DSEI) and Latin America Defence and Security
(LAAD) -- both of which take place in odd calendar years, but
report in even fiscal years, and six smaller biennial events.
However, as the group expands its portfolio through acquisitions
such as PennWell, these additional revenue sources will help
further reduce volatility of earnings. The Blackstone Group also
merged Clarion Events with Global Sources Ltd., a Hong Kong-based
media and exhibition business that it also owns. The transaction
closed in March 2018.

S&P said, "Nevertheless, we consider Clarion a relatively small
player compared with its industry-leading peers in the very
fragmented global events market. It is still significantly
smaller than UBM and RELX and, in our view, has more niche shows.
We also factor in execution risks in achieving synergies and cost
optimization following Clarion's recent acquisitions, and
potentially higher restructuring costs that it may incur. We
expect that over the next two years, the group's profitability
will gradually improve but remain volatile. Adjusted EBITDA
margins are forecast to be 24%-27% to the end of FY2019.

"Our view of Clarion's highly leveraged capital structure remains
a key constraint for the rating. After the transaction, we
forecast that adjusted debt to EBITDA will exceed 6.5x over the
next two years, and will be about 7.5x-8.0x in FY2018 and about
6.4x-6.9x in FY2019. When calculating our adjusted debt, we
include $135 million of debt at the level of Global Sources'
subsidiaries, which are outside the restricted perimeter for the
proposed transaction. We understand the company is in the process
of disposing of several non-core real estate assets, and plans to
receive cash proceeds and repay this debt in calendar year 2018.
Therefore, in our forecast, we assume this debt will be repaid in
FY2019. Our adjusted debt also includes GBP7.2 million management
preference shares that we treat as debt, based on management
being a noncontrolling minority shareholder in the preference
shares."

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

-- Moderate GDP increases of about 1.3% in 2018 and 1.5% in 2019
    in the U.K., and stronger GDP growth of 2.9% in 2018 and 2.6%
    in 2019 in the U.S. Eurozone GDP growth is forecast to be
    2.3% and 1.9% in 2018 and 2019, respectively.

-- The exhibition business typically expands faster than GDP;
    S&P forecasts underlying revenue growth of 4.5%-7.0% in
    FY2018 and FY2019.

-- After the acquisition of PennWell, S&P estimates Clarion's
    pro forma revenues at about GBP400 million in FY2018 (this
    includes revenues from Clarion's biennial events that will
    not be repeated in 2019) and adjusted EBITDA margins of about
    24%-27% in FY2018-FY2019 on a pro forma basis.

-- Capital expenditure (capex) of 2%-3% of annual revenues, or
    about GBP12 million-GBP14 million in FY2018 and GBP6 million-
    GBP8 million in FY2019 (the decline is due to one-off capex
    on information technology of about GBP6 million in FY2018).

-- Dividends to minorities of around GBP2.2 million in FY2018
    and GBP1.6 million in FY2019.

-- No distributions to shareholders.

-- No further material acquisitions.

-- Noncore property assets to be sold and $135 million debt
    secured over these assets to be repaid in calendar year 2018.

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

-- Adjusted debt to EBITDA of about 7.5x-8.0x in FY2018, and
    about 6.4x-6.9x in FY2019.

-- EBITDA cash interest coverage of about 2.5x-3.0x in FY2018-
    FY2019.

-- Positive free operating cash flow (FOCF) above GBP35 million-
    GBP40 million over the same period.

S&P said, "The stable outlook reflects our expectation that
Clarion will integrate its recent acquisitions over the next 12
months and that adjusted pro forma leverage will be about 7.5x-
8.0x in FY2018 reducing to about 6.4x-6.9x in FY2019. This
excludes any material mergers or acquisitions and despite
forecast lower revenue and earnings from material biennial events
in uneven years. The outlook also reflects our expectation that
the company will continue to expand its operations through
organic and acquisitive growth and will maintain positive FOCF
and adequate liquidity.

"We could raise the rating if the group demonstrates a
sustainable track record of improving operating performance while
gaining further scale, successfully executes acquisitions with
contained restructuring expenses, gradually improves reported
EBITDA margins toward 24%-27%, and generates material and
sustainable free operating cash flow. An upgrade would also
require average adjusted debt to EBITDA to reduce to less than
6.5x on a sustainable basis.

"We could lower the rating if the group experienced operating
underperformance, which resulted in materially weaker adjusted
credit metrics than our base-case forecast. Similarly, we could
lower the rating if financial policy became more aggressive
through debt and cash-financed acquisitions, resulting in
sustainably higher adjusted leverage metrics. We could also lower
the rating if reported FOCF turns negative or if liquidity
weakens."


COVER STRUCTURE: Financial Difficulties Prompt Administration
-------------------------------------------------------------
Caroline Ramsey at Business-Sale reports that a pair of Leeds-
based roofing and industrial cladding firms have entered
administration, prompted by a period of severe financial
difficulties that followed their rapid expansion.

The two associated companies -- Cover Structure Ltd and Coloured
Metal Profiles Ltd -- have both appointed Simon Weir, a licensed
insolvency professional from DSi Business Recovery to oversee
operations going forward, Business-Sale relates.

Cover Structure, a roofing and cladding contractor based at the
Cross Green Industrial Estate in Leeds and with operations in
Aberdeen, was founded in 1992.

The firm previously announced it would cease trading on March 16,
though at the time was working on 20 projects throughout the UK,
including a lucrative GBP10 million to cover the Aberdeen
Exhibition and Conference Centre, Business-Sale recounts.

Coloured Metal Profiles, meanwhile, was incorporated in 1983 and
manufactures steel products and other fittings that are then used
in the roofing and cladding industry by firms like Cover
Structure.

Both firms entered administration after a period of prolonged
expansion, after increased labor, pension, manufacturing, and
exporting costs dug into revenues, Business-Sale discloses.
According to Business-Sale, both firms experienced financial
difficulty as a result of growing too quickly, higher overheads
and being forced into taking on new contracts that were not
profitable, notes the report.

The two companies employed around 90 staff between them, all of
whom were made redundant when they ceased trading in March,
Business-Sale notes.

The administrator has instructed Michael Steel and Co to assist
in the sale of the companies' assets and interested parties are
advised to contact them directly, Business-Sale relays.  Clarion
Solicitors is also assisting the administrator, Business-Sale
states.


DRAX GROUP: S&P Affirms 'BB+' Long-Term Issuer Credit Rating
------------------------------------------------------------
S&P Global Ratings said that it affirmed its long-term issuer
credit rating (ICR) on U.K.-based power generator Drax Power Ltd.
and its parent Drax Group Holdings Limited at 'BB+'. The outlook
is stable.

S&P said, "We affirmed our 'BB+' rating on the senior secured
notes issued by Drax Finco PLC, whose obligors are Drax Group
Holdings Ltd. (Drax) and the key operating subsidiaries within
the group. The recovery rating on the proposed debt is '4',
indicating our expectation of recovery prospects of about 35% in
the event of a payment default. We have also affirmed at 'BBB-'
our rating on the super senior revolving credit facility (RCF)
raised by Drax Corporate Ltd., reflecting a recovery rating of
'1' and indicating our expectation of recovery of about 95% in
the event of a payment default.

"The affirmation follows Drax' recent release of its 2017
earnings, which demonstrated strong financial performance broadly
in line with our expectations--the group EBITDA improved by 64%
on a like-for-like basis to GBP229 million. We continue to expect
that the company will be able to achieve ratios close to 45% in
terms of funds from operations (FFO) to debt by the end of 2018
and even stronger ratios after 2018 on the back of strong
positive free operating cash flows (FOCF), increased contribution
from new acquisitions, and predictable revenues from subsidized
renewable source (biomass) generation. Although the group has
successfully completed its conversion of three coal units into
biomass units, we still see some uncertainties regarding the
potential future investments in rapid response gas plants and
coal-to-gas conversion of its remaining two units. Our base case
factors in the recent acquisitions of retail subsidiary Opus
Energy and four sites to build open cycle gas turbine (OCGT)
plants. The lower-than-expected achieved price in the recent
capacity auction for delivery of power in 2021-2022 poses
uncertainty regarding the viability of Drax' future investments
in gas generation.

"We recognize that the improvement in Drax' financials stems from
the 2017 acquisitions of retail arm Opus Energy and biomass plant
LaSalle Bioenergy, which are being integrated as planned, as well
as higher power prices and more attractive compensation under the
contracts-for-differences (CfD) mechanism for biomass generation.
Our base case forecasts continue to reflect expectations that
Drax will achieve S&P Global Ratings-adjusted FFO to debt of
close to 45% in 2018, an increase from 35% in 2017. Furthermore,
we assume in our forecasts adequate operating performance because
the combustible nature of biomass could result in incidents, such
as the fire that took place before Christmas 2017.

"After 2018, we anticipate a strong increase in credit ratios due
to our expectation of strongly positive FOCF generated by the
group. That said, we expect weighted average ratios for 2018-2019
at the lower end of their financial range, which--coupled with
the uncertainties regarding future investments--weighs negatively
on our assessment. In the context of the lower-than-expected
auction price in February 2018, we see continuing uncertainty
regarding whether or not Drax will embark on the investment
related to four OCGT development projects. Furthermore, the
future auction prices will have a bearing on Drax' intention to
convert up to 3.6 gigawatts of coal-fired units into gas, which
is still at an early stage. If successful, this gas conversion
could be positive because it will extend the life of Drax'
generation fleet and enhance profits, since the coal units have
limited life due to their prohibitive carbon and environmental
costs. We also expect further investments so that Drax reaches
its target of self-supply of biomass pellets from about 20% to
about 30%, either through opportunistic acquisitions or
incremental capacity growth."

Drax' business risk profile reflects that it generates about
three-quarters of its output from predictable and subsidized
biomass generation. One-third of its biomass output is under a
fixed-price CfD, which extends to 2027. The compensation for the
CfD contract was set at GBP100 per megawatt hour (/MWh) based on
a 2012 nominal rate linked to consumer price index (CPI)
inflation. The price at April 1, 2018 was GBP111.29/MWh. This
means that revenue visibility and margins will continue to
improve, although the key constraint remains volatile power and
commodity prices that apply to Drax' coal and partly to its
biomass generation under renewable obligation certificates.

S&P applies a consolidated group approach and include in its
analysis the cash flows and debt of all subsidiaries at the level
of the ultimate parent, Drax Group PLC. The key operating
subsidiaries of Drax Group PLC are Drax Power, Haven Power, Opus
Energy, and Drax Biomass. They are obligors and guarantors on the
notes and provide asset and share pledges to the secured notes
issued by Drax Finco PLC, a subsidiary of the intermediary
holding company. The same security and guarantee arrangements
apply to the GBP350 million super senior RCF, raised by Drax
Corporate Ltd. (previously called Drax Finance Ltd.).

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

-- S&P Global Ratings-forecast power prices of GBP42/MWh in
    2017-2019 to the unhedged output and regulated remuneration
    under the CfD at GBP100/MWh (based on nominal 2012 rate
    linked to CPI inflation);

-- S&P Global Ratings forecast for GDP growth of 1.3% in 2018
    and 1.5% in 2019 on the back of Brexit uncertainties.
    Economic growth is correlated to power demand in the U.K. and
    wholesale power prices;

-- EBIT margins from the recently acquired Opus Energy of about
    5%;

-- Limited capital expenditure (capex) needs following the
    completion of most major capex projects, apart from the
    construction of four OCGTs beyond 2019;

-- Dividend policy of GBP50 million in 2017 (growing afterward);
    and

-- Share buyback of GBP50 million in 2018, as announced by the
    company.

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

-- Positive FOCF for the business over the next year, assuming
    no further material acquisitions or expansions in other
    areas; and

-- FFO to debt of close to 45% in 2018, with a very strong
    increase afterward.

S&P said, "The stable outlook on U.K.-based, diversified energy
business Drax reflects our expectations that the group's adjusted
FFO to debt will be above 45% in 2018 and will improve even
further over the next three years. The stronger credit metrics
are driven by the additional cash flows from the acquisition of
retail company Opus, higher margins under the long-term biomass
subsidy contracts, and the group's strong positive FOCF. Although
the group has successfully completed its conversion of three coal
units into biomass units, we still see some uncertainties
regarding the potential future investments in rapid response gas
plants, coal-to-gas conversion of its remaining two units, and
the group's ambitions to increase its self-supply of biomass
pellets. Our base case factors in the recent acquisitions of
retail subsidiary Opus Energy and four sites to build OCGT
plants.

"We could lower the rating if Drax encountered unexpected
operational problems coupled with less supportive power prices
and spreads, resulting in the adjusted FFO-to-debt ratio falling
below our expectation of 45% in 2018 and beyond. This could also
happen if the benefit from retail activities failed to
materialize, if the company engaged in credit-dilutive
acquisitions, or if the construction capex for new generation
plans became higher than expected after 2019.

"Ratings upside could arise once we have clarity on the
additional investments or acquisitions necessary to implement
Drax' strategy.
We could see the competitive advantage of the business as
stronger on the back of further self-supply in biomass, vertical
integration in retail, or investments in flexible gas generation.
A higher rating would also be underpinned by Drax' commitment to
its financial policy."


PARAGON BANKING: Fitch Raises Subordinated Notes Rating from BB+
----------------------------------------------------------------
Fitch Ratings has upgraded Paragon Banking Group's (previously
The Paragon Group of Companies PLC, Paragon) Long-Term Issuer
Default Rating (IDR) and senior unsecured debt rating to 'BBB'
from 'BBB-'. The Outlook on the Long-Term IDR is Stable. Fitch
has also assigned Paragon a Viability Rating (VR) of 'bbb' and a
Short-Term IDR of 'F3'.

The upgrade of the Long-Term IDR reflects the continued stability
in Paragon's profitability, risk appetite, capital targets and
business model, across changing conditions in the buy-to-let
(BTL) sector. The assignment of the VR, SR and SRF reflect the
reorganisation of Paragon into a banking group and Fitch's
assessment of the rating under the Global Bank Criteria
(previously Paragon was rated under the Non-Bank Financial
Institutions Rating Criteria).

KEY RATING DRIVERS
IDRs, VR, AND SENIOR DEBT

Paragon's IDRs, VR and senior unsecured debt ratings reflect its
stable business model, sound franchise in BTL mortgages,
consistent performance track record, sound asset quality, solid
capitalisation and adequate liquidity. The ratings also reflect
the group's limited diversification by industry, geography and
revenue streams, as well as its appetite for higher-risk business
segments. Fitch consider the group's funding profile as weaker
than similarly rated peers.

Paragon's ratings also consider a moderately high level of double
leverage between the company and its operating subsidiaries
(including Paragon Bank, the group's principal subsidiary).
However, this risk is mitigated by the high fungibility of
capital and funding between group companies.

Following a reorganisation in late 2017, Paragon is now regulated
on a consolidated basis by the UK's Prudential Regulatory
Authority (PRA), and runs its business materially out of its
banking arm, Paragon Bank. In Fitch opinion, the reorganisation
has simplified the group. Nonetheless, Paragon's business
continues to be based predominantly on BTL mortgage lending,
despite gradually diversifying into commercial lending,
development finance, owner-occupier specialist mortgages (first
and second charge), vehicle finance, and asset finance. Paragon
continues to be involved in the acquisition and recovery of
performing and non-performing loan portfolios, through its
subsidiary Idem. This focus on more specialist lending types acts
as a constraint on Fitch overall view of the company's profile.

The group's niche business focus has allowed it to develop sound
relationships and good pricing power. As a result, it has
generated a strong level of profitability, albeit highly reliant
on net interest income. Profitability is supported by a stable
and low cost base as well as consistently low loan impairment
charges (LICs). Fitch believe that LICs have probably bottomed
out as a result of the current point in the economic cycle and
may begin to increase in the medium term, as the UK base rates
rise. However, given the strong level of collateral backing the
book, Fitch consider that LICs will remain manageable.

Paragon's asset quality is sound, and while overall impaired
loans appear higher than average in the sector, they are
distorted by the inclusion of Idem's loans, which are classified
as non-performing. These loans are purchased by Paragon at a
material discount and are held at fair value (the purchase
price). To date, Paragon's collection performance for Idem loans
has been sound, reducing the risk of incremental LICs related to
Idem.

The group continues to have an above average exposure to cyclical
sectors, as well as to niche, non-conforming sectors, but Fitch
believe that underwriting standards and controls are adequate for
the risks it is taking. Reserve coverage is low but again
reflects the low acquisition price of Idem's loans as well as the
secured nature of the loan book.

Capitalisation is adequate for its risk profile. Paragon
generates a high level of capital given its strong profitability
but also has a high dividend pay-out policy (stated to be up to
40%), which it has complemented recently with share buy-back
programmes. The group aims to reduce its CET1 ratio to 13%, well
within minimum regulatory requirements, albeit with a lower
management buffer. Leverage is low and while set to increase, is
not expected to rise unduly.

Fitch consider Paragon's funding profile to be weak for its
rating, given its lack of diversification. Fitch note that
Paragon has started to diversify its funding profile by raising
retail deposits over the past few years but in Fitch view these
retail funds are highly price sensitive and volatile and cannot
be considered as core in Fitch assessment of funding stability.
Its cost is expected to rise in line with rising base rates.
Furthermore, it is relatively short-term, which gives rise to
increased refinancing risk compared with Paragon's previous sole
source of funding, securitisations.

Past securitisations continue to account for the bulk of funding,
but are set to decrease in total. These have performed well
through the cycle but gave rise to a high level of asset
encumbrance. At 75% of assets, encumbrance remains high. Paragon
has accessed the UK government-sponsored Term Funding Scheme and
Funding for Lending Scheme (GBP1,053 million at end-March 2018),
which it will have to refinance by 2021.

Liquidity is held as reserves at the Bank of England or with
highly rated banks and is ample. Paragon also now benefits from
access to contingent sources from the Bank of England.

Fitch has assigned a Short-Term IDR at the lower of the two
options available for a 'BBB' rating, because of the bank's
weaker than average funding profile and high level of asset
encumbrance.

Senior unsecured debt issued by Paragon is rated in line with its
IDR as Fitch consider there to be average recovery prospects at
the group in case of default. Fitch also do not consider that the
junior debt issued by group is sufficient to provide additional
protection to senior creditors in case of failure.

SUPPORT RATING (SR) AND SUPPORT RATING FLOOR (SRF)

Fitch has assigned Paragon an SR of '5' and SRF of 'No Floor'
reflecting Fitch's view that senior creditors cannot rely on
extraordinary support from the UK authorities in the event the
group becomes non-viable, both due to its low systemic importance
and because in Fitch opinion the legislation and regulation
implemented in the UK is likely to require senior creditors to
participate in losses for resolving the group

SUBORDINATED DEBT

Subordinated Tier 2 debt issued by Paragon is notched down from
its VR in accordance with Fitch's assessment of non-performance
risk and loss severity. Fitch have rated it one notch below the
group's VR for its loss severity, reflecting the expectation of
below average recoveries in case of failure.

RATING SENSITIVITIES
IDRS, VRs, AND SENIOR DEBT

Paragon's IDRs could be downgraded in the event of a material
weakening of its asset quality, particularly within the core BTL
mortgage book, but also as a result of its newer businesses, some
of which present higher risk to the group, in Fitch opinion. The
ratings could also be downgraded if Paragon faces increased
refinancing risk within its present range of sources of funding
and liquidity.

Holding company double leverage is currently close to the level
where Fitch would consider notching the ratings of the holding
company compared to those derived from the consolidated profile
of the group. An increase in double leverage could indicate a
structurally weakening position of holding company bondholders
relative to Paragon Bank counterparties and therefore also result
in a downgrade of Paragon's ratings. This could also be the case
should there be a material reduction in the fungibility of
capital and funding between group companies.

Given Paragon's relatively undiversified business model, it is
unlikely that the ratings would be further materially upgraded.
An upgrade of the VR and IDRs would be possible in case of an
improved funding profile and resilience of the group's new
business lines throughout the economic cycle.

The long-term senior unsecured debt rating is primarily sensitive
to a change in Paragon's IDR, with which it is aligned.

SUPPORT RATING AND SUPPORT RATING FLOOR

An upgrade of the group's SR and upward revision of the SRF would
be contingent on a positive change in the sovereign's propensity
to support the country's banks. This is highly unlikely, in
Fitch's view.

SUBORDINATED DEBT

The Tier 2 notes' rating is primarily sensitive to a movement in
Paragon's VR, from which it is notched. The rating is also
sensitive to a change in notching level, due to a revision in
Fitch's assessment of the probability of the notes' non-
performance risk relative to the risk captured in Paragon's VR,
or in its assessment of loss severity in case of non-performance.

The rating actions are:

Paragon Banking Group
Long-Term IDR upgraded to 'BBB' from 'BBB-'; Stable Outlook
Short-Term IDR: assigned 'F3'
Viability Rating: assigned 'bbb'
Support Rating: assigned '5'
Support Rating Floor: 'assigned 'No Floor'
Senior notes; XS1275325758, GBP112.5 million due August 2014,
upgraded to 'BBB' from 'BBB-'
Subordinated notes, XS1482136154, GBP150 million due September
2026, upgraded to 'BBB- from 'BB+'


SEPLAT PETROLEUM: Fitch Assigns Final 'B-' Long Term IDR
--------------------------------------------------------
Fitch Ratings has assigned Seplat Petroleum Development Company
Plc (Seplat) a first-time final Long-Term Issuer Default Rating
(IDR) of 'B-' with a Positive Outlook. Fitch has also assigned
Seplat's recently issued USD350 million 9.25% coupon senior notes
due 2023 a final senior unsecured 'B-' rating with a Recovery
Rating 'RR4'.

The assignment of the final IDR follows a successful refinancing
completed in March 2018, when Seplat issued USD-denominated
senior notes and signed a new long-term USD300 million amortising
revolving credit facility (RCF), from which it has drawn USD200
million to date. Subsequently, Seplat has repaid the existing
RCF, the term loans and the prepayment facility in full. The
assignment of a final rating to the notes follows a receipt of
final documentation being in line with draft documentation
reviewed.

The 'B-' IDR reflects Seplat's small scale of production and
reserves, concentration of onshore exploration and production
(E&P) assets in Nigeria (B+/Negative), and the cash flow
volatility that has been associated with the company's operating
environment. Specifically, between February 2016 and June 2017,
Seplat's performance was severely impacted by a militant attack
and subsequent prolonged downtime at the Forcados oil pipeline
and export terminal. The company also has large, albeit
declining, receivables from state-owned Nigerian Petroleum
Development Company (NPDC).

The force majeure was lifted in June 2017 and Seplat has been
ramping up production at its main asset. The Positive Outlook
reflects Fitch view that the Amukpe-Escravos oil pipeline, which
Seplat anticipates to be fully commissioned and operational in
3Q18, will somewhat mitigate cash flow volatility by providing a
viable alternative export route to Seplat. The successful
completion and start of operations of the Escravos oil pipeline,
coupled with continued production ramp-up across Seplat's
upstream assets, could result in an upgrade of the IDR to 'B'.

Fitch expect Seplat to maintain a conservative financial profile
over 2018-2020, with forecast funds from operations (FFO) net
adjusted leverage expected to remain comfortably below Fitch 3.5x
negative sensitivity.

KEY RATING DRIVERS

Small Nigerian E&P Company: Seplat is a small E&P company with
onshore oil and gas assets in Nigeria. The company's full year
2017 working interest (WI) production was around 37 thousand
barrels of oil equivalent per day (kboepd), split nearly equally
between liquids and natural gas. Its main assets are the Oil
Mining Leases (OMLs) 4, 38 and 41, production at which was
severely constrained in 2016-1H17 due to the closure of the
Forcados oil pipeline and export terminal following an attack.

Fitch forecast that Seplat will continue ramping up its daily oil
and gas output to 68kboepd in 2021, which incorporates Fitch
conservative estimate of a 20% additional downtime on the
management forecasts. Fitch believe that even following Seplat's
expected production ramp-up in 2018-2021 it will remain a small
E&P company with a significant onshore asset concentration in one
country. Its WI production and reserves (477mmboe of proved and
probable or 2P reserves as at 1 January 2018) remain commensurate
with the 'B' category rating for an E&P company.

Alternative Routes Improve Security: To avoid a repetition of
prolonged downtime on OMLs 4, 38 and 41 experienced when force
majeure was declared on the Forcados oil pipeline and export
terminal, Seplat and the Nigerian authorities have been working
on a number of security options and alternative export routes.
The Nigerian government has prioritised the completion of the
160kbopd Amukpe-Escravos oil pipeline. Seplat currently expects
the pipeline to be fully commissioned and operational in 3Q18.

In addition to the Escravos pipeline, two jetties at the domestic
Warri oil refinery have been upgraded to allow exports of 30kbopd
gross. However, this is a more expensive option as barging of
crude is required. Fitch expect Seplat to use Escravos as the
primary crude export route, supported by Forcados and the Warri
refinery routes. Fitch believe that these measures, when fully
operational, should provide adequate flexible cover for Seplat's
export transportation needs, but nonetheless conservatively model
additional downtime of 20% in Fitch forecasts for 2018-2020.

Stronger Financial Profile: Following the resumption of
production at OLMs 4, 38 and 41 in June 2017, Seplat's financial
profile has improved materially. In 2017 Seplat's FFO was USD124
million vs. a negative USD11 million in 2016 and its FFO adjusted
net leverage declined to 1.8x at end-2017 from 9.3x at end-2016.
Fitch expect that Seplat will maintain a conservative financial
profile over 2018-2020, with positive free cash flow (FCF), FFO
adjusted net leverage well under 2.5x and interest coverage of at
least 6x (end-2017: 2.6x).

Gas Business Provides Buffer: Seplat's 2017 gas revenues of
USD124 million were up 18% year-on-year and its daily gas sales
averaged 293MMscfd (gross, not WI) in 4Q17. Seplat aims to
increase gas supply to the domestic Nigerian market. Its gas
processing capacity stands at 525MMscfd, while current wells can
deliver around 400MMscfd (gross). Nigerian gas prices are de-
linked from oil prices, e.g. while average realised oil prices
dropped 21% between 2015 and 2016, gas prices increased 19%.
Seplat projects a higher share of gas in its production volumes,
to 60% in 2021 from 50% in 2017.

Fitch view positively the higher share of gas in the sales mix,
as it provides a more stable source of revenues. However, gas
remains the smaller business and is projected to account for less
than 25% of the company's gross revenues in 2021. Gas sales are
also subject to credit risks and FX risks, as USD-linked payments
for gas are made in naira.

Key Refinancing Terms: The senior notes and secured RCF are
issued by Seplat and benefit from pari-passu upstream guarantees
from Seplat West Ltd (contributor to almost 100% of consolidated
EBITDA in 2017), Newton Energy and Seplat East Swamp Ltd. The RCF
further benefits from a security package, including a pledge over
the shares of Seplat West and Newton, thus ranking it ahead of
senior notes under Fitch recovery analysis.

The notes benefit from a standard high-yield covenant package
including covenants on permitted payments, incurrence of
indebtedness and issuance of preferred stock, merger,
consolidation or sale of assets, investments, creation of certain
liens, pari passu in right of payment, and contain no financial
maintenance covenants.

DERIVATION SUMMARY

Onshore Nigeria-based Seplat is a small oil & gas E&P company by
production and reserves. Its operating and financial profiles are
commensurate with the middle of the 'B' rating category. Its
production and 1P reserves are higher than those of Kosmos Energy
Ltd. (B/Positive) and GeoPark Limited (B/Stable), but these two
companies operate in a more predictable business and security
environment. Kuwait Energy plc (CCC) outranks Seplat by 2P
reserves, but its reserves are predominantly in higher-risk Egypt
and Iraq, plus its liquidity is extremely weak.

No Parent/Subsidiary Linkage or Country Ceiling constraint is
applicable. The rating takes into take into consideration higher-
than-average operating environment risks.

KEY ASSUMPTIONS

Fitch's Key Assumptions within Fitch Rating Case for the Issuer
- Brent price deck of USD57.5/bbl in 2018-2021
- Successful renewal of licenses for OMLs 4, 38 and 41 that
   expire in June 2019
- Domestic gas prices of between USD2.5/mscf and USD3/mscf, in
   line with management forecasts
- Daily oil and gas production volumes ramping up to 68kboepd in
   2021 from about 37kboepd in 2017, including a 20% additional
   downtime on the management forecasts
- Opex (excluding royalties) improving to about USD6.5/boe in
   2020-2021 from about USD7.5/boe in 9M17, 20% more conservative
   than management forecasts
- Average capex of about USD126 million per annum in 2018-2021,
   in line with management forecasts
- Other cash inflows and outflows as projected plus USD150
   million additional outflows assumed by Fitch in each of 2019
   to 2021

Assumptions that relate to Recovery Estimates
- Fitch's bespoke recovery analysis considers Seplat's value on
a going-concern basis in a distressed scenario and assumes that
the company would keep its operating licenses and would be
restructured rather than liquidated

- Fitch has applied a 25% discount to 2017 EBITDA, reflecting
its view of a sustainable, post-reorganisation level upon which
Fitch base the valuation of the company. The discount reflects
risks associated with the oil price volatility, potential
unplanned downtime and other adverse factors

- A 4.5x multiple is used to calculate a post-reorganisation
enterprise value (EV), reflecting a mid-cycle multiple for oil &
gas and metals & mining companies in the EMEA region. This
reflects Seplat's lack of unique characteristics allowing for a
higher multiple, such as significant market share, or undervalued
assets

- As per Fitch's criteria, the new and prior-ranking RCF is
assumed to be fully drawn. Fitch have also taken 10% off the EV
to account for administrative claims. The noteholders' expected
recoveries are capped at 'RR4' (soft cap), in line with Fitch
criteria as Seplat's physical assets are located in Nigeria.

RATING SENSITIVITIES

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

- The successful completion and commencement of the Escravos oil
pipeline, along with production ramp-up resulting in forecast FFO
adjusted net leverage remaining below 3.5x, which could result in
an upgrade of the IDR to 'B' and a Stable Outlook.

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

- Downgrade of Nigeria and local banks where Seplat has
historically kept most of its cash

- Higher-than-forecast downtime as a result of unforeseen
events, resulting in material lost production

- Lower-than-expected production ramp-up in 2018-2021
- Failure to maintain FFO adjusted net leverage at below 3.5x on
a sustained basis

LIQUIDITY

Improved Maturity Profile Post-Refinancing: Following the
successful refinancing in March 2018, Seplat forecasts its next
principal debt maturities under the new amortising RCF at a mere
USD13 million in 2019, assuming no further drawdowns. The
subsequent RCF repayments are forecast at USD75 million in each
of 2020 and 2021 and USD22 million in 2022.

Adequate Forecast Liquidity: Seplat's projected liquidity is
supported by positive FCF generation and manageable debt
maturities. Fitch-projected post-dividend FCF is around USD427
million in total over 2018-2021, and positive in every year other
than 2019. On 31 December 2017, Seplat had the equivalent of
USD437 million in cash, of which USD139 million was used to pay
down debt during refinancing. Fitch expect Seplat to maintain
sufficient cash balances at each year-end in 2018-2021 plus it
can access the USD100 million undrawn portion of the new RCF.

Exposure to Nigerian Banks Reduced: Seplat has historically held
most of its cash at Nigerian banks, which have ratings from Fitch
of 'B+'/'Negative' and below. While most of Seplat's funds at
domestic banks are held in US dollars, large cash holdings at
Nigerian banking institutions are vulnerable to a sharp
deterioration in oil prices and naira. Seplat has reported that
following the refinancing about half of its cash balances has
been moved offshore.


ULTIMO: Opts to Cease Operations in United Kingdom
--------------------------------------------------
BBC News reports that the Ultimo underwear firm set up by
Michelle Mone is to cease trading in the UK.

The firm announced that, following an extensive review of the
business, the operation in the UK will cease trading, BBC
relates.

Staff at the Ultimo headquarters in East Kilbride have been
informed, with a formal redundancy consultation now under way
with the 11 employees at the site, BBC discloses.

Retail partners and suppliers have also been told of the
decision, BBC notes.

According to BBC, an Ultimo spokesman said: "The last few years
have been extremely challenging for Ultimo, driven by increasing
competition in the market and more cautious consumer spending due
to the uncertainty surrounding the UK economy over the last 18
months.

"Having reviewed the business' performance over the last three
years as well as future prospects and considering the retail
environment within which the business is operating, the board
has, with regret, decided to cease operations of the Ultimo
business in the UK."

Ultimo's UK operations will be wound up at the end of June, with
the company pledging to honor financial commitments with
suppliers and partners, notes the report.

Ms. Mone, now known as Baroness Mone of Mayfair, established the
lingerie brand in 1996.



                            *********

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

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

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


                            *********


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

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

Copyright 2018.  All rights reserved.  ISSN 1529-2754.

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

Information contained herein is obtained from sources believed to
be reliable, but is not guaranteed.

The TCR Europe subscription rate is US$775 per half-year,
delivered via e-mail.  Additional e-mail subscriptions for
members of the same firm for the term of the initial subscription
or balance thereof are US$25 each.  For subscription information,
contact Peter Chapman at 215-945-7000.


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