/raid1/www/Hosts/bankrupt/TCREUR_Public/180628.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, June 28, 2018, Vol. 19, No. 127


                            Headlines


B U L G A R I A

FIRST INVESTMENT: Fitch Affirms LT IDR at 'B', Outlook Stable


F I N L A N D

TERVEYS-JA HOIVAPALVELUT: Moody's Assigns First Time B3 CFR


G E O R G I A

SILKNET JSC: Fitch Affirms B+ IDR on Geocell Acquisition


G R E E C E

GREECE: S&P Raises Long-Term SCR to 'B+', Outlook Stable
PANCRETAN COOPERATIVE: Moody's Assigns Caa2 LT Deposit Rating


I R E L A N D

ANGLO IRISH: Former Chief Executive Gets 6-Year Jail Sentence
AURIUM CLO II: Moody's Assigns (P)B2 Rating to Class F Notes


I T A L Y

MOBY SPA: S&P Cuts Issuer Credit Rating to 'B', Outlook Negative


K A Z A K H S T A N

DAMU: S&P Affirms 'BB+/B' Issuer Credit Ratings, Outlook Stable
KAZKOMMERTSBANK JSC: S&P Raises ICR to BB, Outlook Stable


L U X E M B O U R G

MONITCHEM HOLDCO: S&P Raises Super Senior RCF Due 2020 to 'BB-'


N E T H E R L A N D S

BARINGS EURO 2014-1: Fitch Rates Class F-RR Notes 'B-(EXP)sf'


P O R T U G A L

NOVO BANCO: Moody's Puts (P)Caa3 Sub. Debt Rating to Tier 2 Bond


S P A I N

AYT HIPOTECARIO 5: S&P Raises Class C RMBS Notes Rating to BB


S W E D E N

SSAB AB: S&P Hikes Issuer Credit Rating to BB, Outlook Positive


U N I T E D   K I N G D O M

FASTJET: Says May Collapse Unless New Funding Secured
NORTHERN ROCK: Band Bank Expects to Finally Wind Down by 2021
SYNTHOMER PLC: S&P Assigns Prelim 'BB' ICR, Outlook Stable
WAVES: Cancels Flights for Two Months After License Problems


X X X X X X X X

* Eurogroup Head Seeks to Examine Debt Restructuring Process


                            *********



===============
B U L G A R I A
===============


FIRST INVESTMENT: Fitch Affirms LT IDR at 'B', Outlook Stable
-------------------------------------------------------------
Fitch Ratings has affirmed Long-Term Issuer Default Ratings of
UniCredit Bulbank AD at 'BBB-', United Bulgarian Bank AD (UBB) at
'A-' and First Investment Bank AD (FIBank) at 'B'. The Outlooks
are Stable. At the same time, Fitch has upgraded the Viability
Ratings (VRs) of Bulbank to 'bb+' from 'bb' and of UBB to 'bb'
from 'bb-'. FIBank's VR has been affirmed at 'b'.

The upgrade of Bulbank's VR reflects its improved asset quality.
The upgrade of UBB's VR reflects the strengthening of its credit
risk profile as a result of significant restructuring following
its acquisition by KBC Bank (KBC, A/Positive/a).

The affirmation of Bulbank's and UBB's IDRs reflects Fitch's
opinion that there is a high and extremely high probability that
they would be supported, if required, by their respective
parents. Bulbank is owned by UniCredit S.p.A. (UniCredit,
BBB/Stable/bbb).

The affirmation of FIBank's IDRs and VR reflects no major change
in its credit profile since the last review.

KEY RATING DRIVERS

IDRS, SUPPORT RATINGS, SUPPORT RATING FLOOR

Bulbank and UBB are based in Central and Eastern European (CEE)
region, which is strategically important for UniCredit and KBC.
The banks' synergies with their respective parents are strong and
reflect a high level of management and operational integration.
Support for Bulbank is also underpinned by a long track record of
supporting its parent's objectives, which is likely to continue.
In its assessment of support, Fitch also considers the almost
full ownership of Bulbank and UBB by their parents and the
potential high reputational risk to the owners if their Bulgarian
subsidiaries default.

Fitch believes that any required support for the two banks would
be immaterial relative to their respective parents' ability to
provide it. Fitch's opinion reflects the owners' solid credit
profiles and the small size of their Bulgarian subsidiaries. The
support for Bulbank is notched once from UniCredit's IDR.

The Positive Outlook on KBC Bank's Long-Term IDR reflects Fitch's
expectation that it could rate the IDR one notch above the VR
following the build-up of a significant and sustainable junior
debt buffer that provides additional protection for senior
unsecured creditors. UBB's support-driven IDR is consequently
notched once from KBC's VR, reflecting uncertainty whether
subsidiary's senior creditors would benefit from the parent's
junior debt buffer in case of UBB's failure.

The Stable Outlook on Bulbank's Long-Term IDR mirrors that on the
parent. The Stable Outlook on UBB's Long-Term IDR reflects its
parent's stable intrinsic creditworthiness.

FIBank's IDRs are driven by its standalone financial strength, as
expressed by its VR. The Stable Outlook on FIBank's Long-Term IDR
reflects its stable intrinsic creditworthiness.

FIBank's Support Rating Floor (SRF) of 'No Floor' and the Support
Rating (SR) of '5' express Fitch's opinion that although
potential sovereign support for the bank is possible, it cannot
be relied upon. This is underpinned by the EU's Bank Recovery and
Resolution Directive, transposed into Bulgarian legislation,
which requires senior creditors to participate in losses, if
necessary, instead of or ahead of a bank receiving sovereign
support.

UBB's Short-Term IDR of 'F1' is the higher of the two
possibilities corresponding to the Long-Term IDR of 'A-'. The
bank's Short-Term IDR is underpinned by KBC's solid liquidity and
Fitch's view that parental propensity to support is more certain
in the near term.

VRS

The challenging domestic operating environment has weighed on
Bulgarian banks' company profiles and caps their VRs in the 'bb'
range. This is shown in the banks' less stable business models,
weaker asset quality and more volatile performance through the
economic cycle, compared with stronger CEE markets such as the
Czech Republic or Poland.

Bulbank's VR of 'bb+' is underpinned by its robust
capitalisation, solid profitability through-the-cycle, stable
funding, comfortable liquidity and its leading domestic market
franchise. The bank's VR also considers its recent substantial
resolution of bad debts to normalised levels.

UBB's VR of 'bb' is underpinned by its robust funding and
liquidity profile and strong capitalisation. Fitch also factors
in the bank's significant restructuring after the acquisition by
KBC (2017) and merger with CIBANK (1Q18), which resulted in the
moderation of UBB's risk appetite and strengthening of its
company profile (particularly lending and deposit franchise),
management and strategy.

FIBank's 'b' VR suffers mainly from the bank's weak (albeit
gradually improving) asset quality and capitalisation. This is
evidenced in the high ratio of legacy-impaired loans and non-
income generating repossessed assets, high capital encumbrance by
unreserved problem assets and significant single-name
concentration in the loan book. The VR also reflects FIBank's
revamped credit risk appetite, reasonable strategy for 2017-2021
and comfortable liquidity position, underpinned by stable
funding, mainly based on granular retail savings.

The banks' asset quality metrics are worse and more vulnerable to
changes in economic cycles than those at more stable countries in
CEE, which largely reflects Bulgarian country risks. Moreover,
Bulgarian banks' inflated impaired loan ratios should be also
viewed in light of the underdeveloped local market for distressed
debt and the long time required in Bulgaria to enforce
collateral.

Fitch believes that asset quality in 2018 and beyond should
improve at the three banks due to conservative origination of new
loans, moderate credit growth, portfolio cleaning and the
supportive economic environment, which contains the inflow of new
bad debts. UBB's portfolio cleaning is likely to bear fruit
faster (compared with FIBank) due to stronger coverage by loan
loss reserves, lower complexity of problem assets and strategic
push by KBC towards bad debts reduction.

At end-1Q18, impaired loan ratios equalled about 21% at FIBank
and UBB and about 8% at Bulbank, compared with the sector average
of 13.5%. FIBank also holds a substantial stock of repossessed
assets (mainly non-income generating real estate), which equalled
about 14% of assets.

Bulbank's and UBB's capitalisation is a rating strength due to
their high Fitch Core Capital (FCC) ratios, moderate risk
profiles, ordinary capital support from their respective parents
and low (Bulbank) and moderate (UBB) stock of unreserved impaired
loans. Bulbank's capitalisation is particularly strong due to its
substantial capital surplus over regulatory minimums. FIBank's
capitalisation improved in 2017, but remains a rating weakness,
due to its large (albeit gradually shrinking) concentration in
risky assets.

At end-1Q18 the FCC ratios of Bulbank (26.1% adjusted for the
announced dividend) and UBB (22.5%) were among the highest in
CEE. Fitch estimates that FIBank's FCC ratio was about 13.5% at
end-1Q18. This reflects a decrease of about 1pp in 1Q18 due to
the application of IFRS 9, while the impact on UBB and Bulbank
was modest.

The three banks' risk appetites are largely harmonised and
reflect the risks of the operating environment. Bulgarian country
risks cannot be isolated from the effects of the banks' business
models. Underwriting standards at Bulbank and UBB are reasonable
and commensurate with their business models and country risks.
FIBank's underwriting standards under its revamped risk strategy
have benefited from supportive economic environment and as a
result have not been fully tested through credit cycle yet.

Fitch believes that the banks' profitability is commensurate with
their business models and Bulgarian operating environment. The
banks' revenue is mainly sourced from lending activity. Bulbank's
profitability is the strongest among all Fitch-rated Bulgarian
banks. This reflects its stable business model and resilient
margins through-the-cycle, strong franchise, contained loan
impairment charges (LICs) and robust cost efficiency. UBB's
strengthened capacity for stable and recurring revenue and
planned cost savings reflects merger with CIBANK. UBB's operating
profit is likely to benefit from considerably lower LICs compared
with historical average.

FIBank's profitability improved in 2017 and Fitch believes that
the implementation of its strategy for 2017-2021 will further
strengthen its ability to generate capital internally. In its
assessment, Fitch takes into consideration its revised business
model, a gradual reduction of funding costs to levels comparable
with peers and moderation in credit risk cost. FIBank's
profitability is particularly sensitive to its planned increase
in lending to margin-rich SME and retail segments and its
progress with reduction of non-income generating assets (such as
foreclosed real estate).

Bulbank's ratio of operating profit/risk-weighted assets was the
most stable over the economic cycle and equalled 3.7% on average
between 2014 and 2017. After the merger, UBB's ratio recovered
strongly in 1Q18 and Fitch expects it to remain comfortably above
2.5% in the periods ahead. FIBank's ratio equalled almost 1.6% in
2017 and it believes that it should continue to gradually improve
assuming successful implementation of the bank's strategy and no
economic stress.

Funding and liquidity is a rating strength at the three banks
relative to their overall credit risk profiles. The banks are
self-funded with stable and largely granular customer deposits.
All banks' high self-financing capacity is reflected in their
moderate gross loans/deposits ratios, which equalled 75%
(Bulbank), 74% (UBB) and 78% (FIBank) at end-1Q18.

All three banks hold comfortable liquidity buffers. Bulbank and
UBB can also rely on ordinary parent liquidity support, such as
access to funding in foreign currency. Bulbank's and UBB's well-
diversified and stable deposit franchises are sufficient to
withstand even a severe market stress. FIBank's funding and
liquidity profile is moderately weaker due to its high reliance
on term deposits (although this has been gradually shrinking),
less diversified deposit franchise (which is only strong in the
retail) and smaller coverage of its short-term liabilities by
liquid assets.

At end-1Q18, Bulbank was by far the largest bank in Bulgaria,
while UBB and FIB were ranked third and fourth by assets,
respectively. The three banks are classified as systemically
important credit institutions by the Bulgarian central bank. They
operate similar and traditional banking models, with loan books
dominated by corporate clients and funding sourced mainly from
local customer deposits.

FIBank is the largest domestically-owned bank in Bulgaria and is
controlled by two Bulgarian private individuals, of whom each
holds 42.5% stake in the bank. The rest is widely held. The bank
is listed on the Bulgarian Stock Exchange - Sofia.

RATING SENSITIVITIES

IDRS, SUPPORT RATINGS

The IDRs and SRs of Bulbank and UBB are sensitive to its view of
ability or propensity of their respective parents to support
their Bulgarian subsidiaries. Fitch does not expect the banks'
owners' support propensity to weaken.

The upgrade of UBB's IDR would require both: i) an upgrade of
Bulgaria's Country Ceiling and ii) an upgrade of KBC Bank's VR or
more clarity around the potential benefit for UBB senior
creditors from the qualifying junior debt buffer at the parent
level.

FIBank's IDRs are sensitive to changes in the bank's VR.

VRs

A further upgrade of FIBank's VR would require faster resolution
of legacy-impaired loans, a reduction of loan book concentrations
and monetisation of repossessed assets without denting its
capitalisation, and a longer record of sound profitability.

Bulbank's and UBB's VR upgrade would require an improvement of
the operating environment or strengthening of the UBB's overall
credit risk profile (particularly a significant reduction of its
high impaired loans).

Deterioration in the operating environment, which would result in
a substantial inflow of new bad debts and capital erosion at the
banks, could lead to their downgrade.

The rating actions are as follows:

Bulbank

Long-Term IDR: affirmed at 'BBB-'; Outlook Stable

Short-Term IDR: affirmed at 'F3'

Support Rating: affirmed at '2'

Viability Rating: upgraded to 'bb+' from 'bb'

UBB

Long-Term IDR: affirmed at 'A-'; Outlook Stable

Short-Term IDR: affirmed at 'F1'

Support Rating: affirmed at '1'

Viability Rating: upgraded to 'bb' from 'bb-'

FIBank

Long-Term IDR: affirmed at 'B'; Outlook Stable

Short-Term IDR: affirmed at 'B'

Support Rating: affirmed at '5'

Support Rating Floor: 'No Floor'

Viability Rating: affirmed at 'b'


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F I N L A N D
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TERVEYS-JA HOIVAPALVELUT: Moody's Assigns First Time B3 CFR
-----------------------------------------------------------
Moody's Investors Service assigned a first time B3 Corporate
Family Rating (CFR) and a B3-PD Probability of Default Rating
(PDR) to Terveys-ja hoivapalvelut Suomi Yhtyma Oy (Mehilainen), a
leading provider of healthcare and social care services in
Finland. Concurrently, Moody's has assigned B2 ratings to the
EUR760 million first lien term loan and to the EUR125 million
revolving credit facility (RCF), as well as a Caa2 rating to the
EUR200 million second lien term loan, all borrowed by Terveys-ja
hoivapalvelut Suomi Oy. The outlook on all ratings is stable.

The ratings are conditional upon the preference shares, still to
be issued, meeting all of Moody's criteria for equity credit.

Proceeds from the loans along with EUR981 million of equity will
be used to finance the acquisition of Mehilainen Group by funds
managed by CVC Capital Partners, the life insurance company
LocalTapiola, the two pension insurance companies Varma and
Ilmarinen, and the management.

Moody's rating action reflects the following interrelated
drivers:

  - The company's high opening Moody's debt/EBITDA ratio of 8.4x
LTM March 2018 PF (7.4x including run-rate adjustments as of May)
and its weak interest cover expected to remain below 2x Moody's
EBITA/interest over the next two years;

  - MehilÑinen's good business profile as a leading and
diversified player in the Finnish market which exhibits
favourable trends for private providers.

As a result, MehilÑinen's CFR is solidly positioned within the B3
category.

LIST OF ASSIGNED RATINGS

Assignments:

Issuer: Terveys-ja hoivapalvelut Suomi Oy

EUR760 million senior secured first lien term loan, Assigned B2
(LGD3)

EUR125 million senior secured revolving credit facility, Assigned
B2 (LGD3)

EUR200 million senior secured second lien term loan, Assigned
Caa2 (LGD6)

Issuer: Terveys-ja hoivapalvelut Suomi Yhtyma Oy

Probability of Default Rating, Assigned B3-PD

Corporate Family Rating, Assigned B3

Outlook Actions:

Issuer: Terveys-ja hoivapalvelut Suomi Oy

Outlook, Assigned Stable

Issuer: Terveys-ja hoivapalvelut Suomi Yhtyma Oy

Outlook, Assigned Stable

RATINGS RATIONALE

Mehilainen's B3 Corporate Family Rating (CFR) is supported by:
(1) its leadership position in Finland's privately provided
healthcare and social care market which exhibits favourable
trends in terms of growth (+4% CAGR expected for 2016-22
according to a third party due diligence provider and the
company) and no evidence of cost pressure due to shortage of
medical staff, (2) the company's diversification in terms of
services offered, customers and funding sources and (3) its track
record of above average market growth driven by acquisitions and
improved profitability.

Conversely, the CFR is constrained by (1) a high starting
leverage at 8.4x PF LTM March 2018 PF as adjusted by Moody's
(7.4x run-rate), (2) the company's concentration to Finland only
and therefore exposure to its regulatory risks and (3) risk of
future debt financed acquisitions as evidenced by the EUR125
million RCF in place.

The company has grown significantly during 2015-17 (+50% topline)
mainly through acquisitions while diversifying its service
offering and improving its profitability to 12% EBITA margin as
adjusted by Moody's. Mehilainen is the biggest player in Finland
by revenue size (13% market share in 2017 according to
Management) and also the most diversified. The company benefits
from barriers to entry including its strong brand built thanks to
its long track record in the market and the local complex
regulatory environment.

The company's future growth will, as in previous years, be driven
mainly by greenfield investments and smaller-sized bolt-ons,
which will consume the cash flow generated internally. As a
result of EBITDA growth, the Moody's debt/EBITDA ratio will
gradually improve but will remain above the 6.5x level for the
next 12-18 months. Moreover, since the growth will be mainly
driven by acquisitions, there are some execution risks associated
with the deleveraging prospects. Finally, part of the company's
RCF might be used as well to finance the external growth which
could slowdown future deleveraging.

LIQUIDITY

Moody's considers Mehilainen's liquidity to be good. At closing,
Mehilainen's liquidity is expected to be supported by a cash
balance of around EUR40-50 million, expected positive cash flow
generation (excluding discretionary greenfield and add-on capex)
and a new EUR125 million RCF, undrawn at closing. However,
Mehilainen's future growth will be driven by significant
investments in greenfield and add-ons and so the rating agency
expects that the company will need to use part of its RCF to
finance such growth. Moody's nonetheless expects that a
significant part of the RCF will remain available.

STRUCTURAL CONSIDERATIONS

The B2 ratings of the EUR760 million first lien term loan and of
the EUR125 million RCF are one notch above the B3 CFR. This
reflects the loss absorption cushion from the EUR200 million
second lien term loan rated Caa2.

The instruments share the same security package and are
guaranteed by a group companies representing at least 80% of the
consolidated group's EBITDA. The security package consists of
shares, bank accounts and intragroup receivables.

OUTLOOK

The stable outlook reflects Moody's expectations that market
conditions will remain stable and that the Moody's debt/EBITDA
ratio will gradually improve within the next 12-18 months. The
stable outlook assumes no material debt funded acquisitions and
no shareholder distributions.

WHAT COULD CHANGE THE RATING UP/DOWN

Positive rating pressure could develop should the company
maintain stable margins, reduce its Moody's debt/EBITDA ratio
sustainably below 6.5x and increase its Moody's EBITA/interest
ratio sustainably above 2x.

Downward rating pressure could develop should a deteriorating
operating performance or an increasingly aggressive financial
policy lead to an increase in leverage from the opening level,
the free cash flow remain negative for a prolonged period of time
and/or the liquidity profile deteriorate.

PRINCIPAL METHODOLOGY

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

PROFILE

Mehilainen, headquartered in Helsinki Finland is a provider of a
wide range of services within the healthcare (66% of 2017
revenue) and social care (34%) sectors. The company operates
exclusively in Finland through a network of 360 units and
reported revenue of EUR756 million in 2017. On May 2018, CVC
Capital Partners, the life insurance company LocalTapiola, the
two pension insurance companies Varma and Ilmarinen, and the
management have announced the acquisition of Mehilainen Group.


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G E O R G I A
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SILKNET JSC: Fitch Affirms B+ IDR on Geocell Acquisition
--------------------------------------------------------
Fitch Ratings has affirmed Georgian-based telecoms company JSC
Silknet's Long-Term Issuer Default Rating (IDR) at 'B+' and
removed it from Rating Watch Positive following the acquisition
of Geocell, Georgia's second-largest mobile operator. The Outlook
is Stable.

The affirmation is driven by a significant rise in leverage and
FX risks, with the acquisition financing package and available
refinancing options likely leading to a majority of total debt
being denominated in foreign currency. Silknet's strategy
suggests that the company may pursue further diversification
including into financial services, which may require additional
investments and delay deleveraging.

Silknet is the incumbent fixed-line telecoms operator in Georgia
with an extensive backbone and last-mile infrastructure across
the country. The company holds sustainably strong market shares
of above 35% in fixed-voice, broadband services and pay-TV
services by revenue. The acquisition of Geocell in 2018 has
turned the company into a full bundle-enabled operator. Silknet's
small absolute size is a strategic weakness; it services fewer
than 350,000 fixed lines and Fitch expects it to generate an
equivalent of approximately USD70 million of EBITDA in 2018, pro-
forma for the Geocell acquisition.

KEY RATING DRIVERS

Stronger Operating Profile: The acquisition of the second-largest
mobile operator in Georgia has a strong strategic rationale,
enabling Silknet to start offering bundled fixed and mobile
services and improving its competitive standing versus its key
domestic rival Magticom, which is also fully four-play-enabled.

Competitiveness to Improve: Fitch expects Silknet to maintain and
gradually improve its competitive position after becoming four-
play-enabled (ie offering fixed voice, broadband, pay-TV and
mobile services), and on the back of significant network
investments already consummated in 2015-2017 and expected in
2018-2019.

Market Share Pressures: Siknet's broadband and pay-TV market
shares have been under significant pressure throughout 2017 and
1Q18 as Magticom has actively promoted bundling services to win
customers. As a result, Silknet ceded its revenue market share
leadership to Magticom in both segments. Silknet's broadband
retail revenue market share declined to 37% in 1Q18 from 40% in
2016, and the company's pay-TV market share was estimated at 38%
in 1Q18, down from 39% in 2016, according to data by GNCC, the
national telecoms regulator.

Intense Competition: An acute rise in price competition, driven
by aggressive promotions by Magticom and Silknet's retaliatory
price cuts in 2H17, is likely to pressure Silknet's revenue and
be a significant drag on margins at least in 2018. While the
promotional activity has seemingly abated so far into 2018 with
operators keen to increase their tariffs, longer-term market
stability is not guaranteed. A recent spike in promotional
campaigns suggests that bundling competition may intensify,
resulting in significant negative financial impact. According to
GNCC, Silknet's broadband revenue fell 4.7% yoy in 1Q18.

Execution Risks in Bundling Strategy: Silknet's strategy of
offering bundling services after the mobile acquisition entails
significant execution risks, in Fitch's view. Aggressive
marketing moves are likely to trigger competitive reaction, as
evidenced by pricing pressures in 2H17 and Magticom's readiness
to exploit the company's bundling capabilities. Nevertheless,
Silknet is now better-positioned than smaller competitors without
bundled services. Also, lower churn, typically associated with
bundled offers, may lead to subscriber acquisition and retention
savings.

Substantial Merger Synergies: Fitch believes the acquisition will
allow Silknet to achieve significant operating and revenue
synergies. The networks of the two merging operators are likely
to be, to a large degree, complimentary. The extensive broadband
network of Silknet would allow it to more efficiently carry
rapidly growing data traffic generated in Geocell's 4G network
that is currently in a roll-out phase. Cost synergies are likely
to be easily achieved while revenue synergies would depend on the
market adoption of bundled services and competitors' moves.

Higher FX Risk: The acquisition financing debt package increased
the share of FX debt to in Silknet's total debt to above 70%,
leading to higher FX risk as most of the company's revenue is in
local currency. Available refinancing options are unlikely to
reduce FX exposure, in Fitch's view. Fitch has reflected the
higher FX risk in tighter downgrade leverage triggers for
Silknet.

Financial Services Diversification Plan: The company's
diversification strategy suggests that Silknet may expand into
financial services to seek synergies with its telecoms
operations. While financial services/telecoms integration may
take various forms providing longer-term strategic flexibility,
immediate benefits are not obvious. For example, acquiring a weak
bank may dilute Silknet's credit profile, exposing it to risks
not typical of the telecoms industry.

Capex Pressures Cash Flow: Fitch projects that ongoing large
capex to modernise both mobile and fixed-line infrastructure will
pressure free cash flow (FCF) generation in 2018-2019. Silknet
continues to actively invest in fibre infrastructure to mass-
migrate its remaining ADSL customers and to catch up with peers
in terms of 4G coverage. Cash flow generation is likely to
improve after the company completes network upgrades in the
medium-term. Fitch estimates that FCF margin may reach double
digits provided the company maintains its high profitability and
keep capex at below 20% of revenue.

Leverage Spikes on Acquisition: Fitch expects Silknet's funds
from operations (FFO) adjusted net leverage to spike to 3.3x at
end-2018, driven by the Geocell acquisition including significant
one-off costs. Leverage is likely to ease back to around 3.0x by
end-2019 on the back of acquisition synergies leading to stronger
EBITDA and FFO. Fitch estimates that the company's deleveraging
capacity will improve after 2019, supported by stronger FCF
generation.

Dominant Shareholder Influence: The company's 100% shareholder
Silk Road Group can exercise significant influence on the company
and has access to Silknet's cash flows as was demonstrated by
Silknet bypassing formal restrictions on dividends when it
guaranteed GEL35 million of its shareholder's loan in 2016. Fitch
treats this guarantee as off-balance sheet debt, and include it
in all leverage calculations. Silknet's governance is
commensurate with the 'B'-range rating category. Silk Road Group
does not publicly disclose its financial results.

DERIVATION SUMMARY

Silknet benefits from its established customer franchise and the
wide network of a telecoms incumbent combined with a growing
mobile business similar to its higher-rated emerging markets
peers such as Kazakhtelecom JSC (BB+/Stable) and PJSC Tattelecom
(BB/Stable). However, Silknet is smaller in size with revenue of
less than EUR150 million and faces significantly higher FX risks.
Its corporate governance is shaped by dominant shareholder
influence.

KEY ASSUMPTIONS

Fitch's key assumptions within the rating case for Silknet
include:

  - Significant reduction of interconnect revenue proportional to
the regulator-announced interconnect rate cuts pressuring
headline revenue growth in both fixed-line and mobile segments;

  - Broadband revenue growth in high-to-mid single digits, pay-TV
revenue growth in the double digits in 2018-2020, gradually
declining to high-single digits afterwards;

  - High-to-mid single digit mobile revenue growth excluding
interconnect;

  - Substantial integration synergies following the acquisition
of Geocell leading to absolute EBITDA increase and margin
improvement in 2018 and 2019;

  - Regular dividends in line with the historical pay-outs;

  - High capex of above 25% of revenue in both 2018 and 2019,
declining to slightly below 20% thereafter.

RATING SENSITIVITIES

Positive: Future developments that may, individually or
collectively, lead to positive rating action include:

  -  Improved market positions, stronger FCF generation post-
Geocell acquisition, alongside comfortable liquidity and a track
record of improved corporate governance, and

  - FFO adjusted net leverage sustainably below 2.5x in the
presence of significant FX risks.

Negative: Future developments that may, individually or
collectively, lead to negative rating action include:

  - FFO-adjusted net leverage rising above 3x on a sustained
basis without a clear path for deleveraging in the presence of
significant FX risks, and

  - A rise in corporate governance risks due to, among other
things, related-party transactions or up-streaming excessive
distributions to shareholders.

LIQUIDITY

Liquidity Reliant on Bank: Silknet heavily relies on TBC Bank
(BB-/Stable), its largest creditor and key relationship bank, for
refinancing and liquidity support. Liquidity may improve after
the company refinances its debt acquisition facilities.


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G R E E C E
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GREECE: S&P Raises Long-Term SCR to 'B+', Outlook Stable
--------------------------------------------------------
On June 25, 2018, S&P Global Ratings raised its long-term foreign
and local currency sovereign credit ratings on Greece to 'B+'
from 'B'. The outlook is stable. At the same time, S&P affirmed
its 'B' short-term foreign and local currency sovereign credit
ratings.

As a "sovereign rating" (as defined in EU CRA Regulation
1060/2009 "EU CRA Regulation"), the ratings on Greece are subject
to certain publication restrictions set out in Art 8a of the EU
CRA Regulation, including publication in accordance with a pre-
established calendar. Under the EU CRA Regulation, deviations
from the announced calendar are allowed only in limited
circumstances and must be accompanied by a detailed explanation
of the reasons for the deviation. In this case, the reason for
the deviation is the announcement of substantial cash buffers and
additional debt relief for Greece by the Eurogroup on June 21,
2018.

The next scheduled rating publication on Greece will be on July
20, 2018.

OUTLOOK

The stable outlook on Greece reflects the balance of risks to the
sovereign's creditworthiness. On the one hand, last week's
Eurogroup decision to provide Greece with additional maturity
extensions and a sizeable cash buffer has further improved
Greece's already exceptionally favorable sovereign debt profile.
At the same time, Greece's banks are making progress on reducing
high levels of nonperforming loans, which should support
financial conditions, and help boost growth. On the other hand,
public and private debt remains high, and the authorities' track
record on attracting foreign direct investment is weak.

S&P said, "We could consider raising the ratings if policy
predictability strengthens, net foreign direct investment rises,
and we see further progress on the reduction in the nonperforming
assets of the impaired banking system. Under this scenario we
think that GDP growth, including investment growth, would
accelerate, benefiting Greece's financial strength.

"We could lower the ratings if there are large policy shifts that
reverse the reform process, or if growth outcomes are
significantly weaker than we expect, which would restrict
Greece's ability to continue fiscal consolidation and debt
reduction."

RATIONALE

On June 22, 2018, the Eurogroup approved the creation of a
sizeable cash buffer for Greece ahead of Greece's graduation from
the third economic adjustment program in August 2018. The final
disbursement under the program, of EUR15 billion, will take
Greece's overall cash buffer to EUR24 billion (about 13% of
estimated 2018 GDP). S&P said, "Given our expectation that
government finances will remain broadly balanced, we expect the
cash buffer will fully cover Greece's sovereign debt amortization
until 2021 and partly cover repayments coming due in 2022. We
assume treasury bills will be rolled over. In our view, the cash
buffer significantly reduces refinancing risks for the government
and increases the possibility of market access at more favorable
terms for both the sovereign and the banking sector."

Greece's creditors also approved further debt relief measures.
Among others, these include measures to extend the maturity of
Greece's sovereign debt via a deferral of interest and the
amortization of European Financial Stability Facility loans, that
is, the largest portion of Greece's outstanding debt stock. S&P
anticipates that conditionality related to the use of the cash
buffers, alongside post program monitoring, will prevent the
rolling back of previous reforms and will also anchor additional
reform efforts. The latter will be particularly important to
restore economic health and confidence in the banking sector as
well as to attract foreign capital inflows to finance growth.

S&P said, "Our ratings on Greece are supported by the unusually
low cost of servicing much of its general government debt burden
and official creditors' ongoing support in the form of very long-
dated concessional loans and debt relief. Even before additional
debt relief measures were announced, the average maturity of
Greece's overall debt stock was more than 18 years--the longest
of the sovereigns we rate."

Still, the size of Greece's general government debt is an
important ratings constraint. After Japan, Greece has the second-
highest gross general government debt-to-GDP ratio of the
sovereigns S&P rates. Greece's history of policy uncertainty and
clientelism has also weighed on its creditworthiness by
prolonging economic weakness and uncertainty, deterring inflows
of foreign capital, and prompting sizable deposit outflows from
the banking sector, a process that intensified during June-August
2015. As a consequence of this loss of retail funding, Greece's
financial sector remains dependent on European Central Bank (ECB)
financing. Future prospects for Greece's banks, and their ability
to improve their loan books, also depend on additional actions to
improve the efficiency of Greece's judiciary.

In accordance with S&P's relevant policies and procedures, the
Rating Committee was composed of analysts that are qualified to
vote in the committee, with sufficient experience to convey the
appropriate level of knowledge and understanding of the
methodology applicable. At the onset of the committee, the chair
confirmed that the information provided to the Rating Committee
by the primary analyst had been distributed in a timely manner
and was sufficient for Committee members to make an informed
decision.
After the primary analyst gave opening remarks and explained the
recommendation, the Committee discussed key rating factors and
critical issues in accordance with the relevant criteria.
Qualitative and quantitative risk factors were considered and
discussed, looking at track-record and forecasts.

The committee's assessment of the key rating factors is reflected
in the Ratings Score Snapshot above.

The chair ensured every voting member was given the opportunity
to articulate his/her opinion. The chair or designee reviewed the
draft report to ensure consistency with the Committee decision.
The views and the decision of the rating committee are summarized
in the above rationale and outlook. The weighting of all rating
factors is described in the methodology used in this rating
action.

  RATINGS LIST

  Upgraded; Outlook Action
                                         To              From
  Greece
   Sovereign Credit Rating          B+/Stable/B      B/Positive/B
   Senior Unsecured                       B+              B


  Ratings Affirmed

  Transfer & Convertibility Assessment    AAA
  Commercial Paper                        B


PANCRETAN COOPERATIVE: Moody's Assigns Caa2 LT Deposit Rating
-------------------------------------------------------------
Moody's Investors Service has assigned a long-term domestic and
foreign currency deposit rating of Caa2 with a stable outlook,
and a short-term domestic and foreign currency deposit rating of
Not-Prime (NP) to Pancretan Cooperative Bank Ltd (Pancreta Bank).
At the same time, Moody's has assigned a baseline credit
assessment (BCA) and an adjusted BCA of caa3 to Pancreta Bank.
This is the first time that Moody's has assigned ratings to
Pancreta Bank.

The rating agency said that the bank's BCA reflects certain
fundamental credit challenges including its high level of problem
loans combined with relatively weak regulatory capital metrics,
balanced by the bank's favourable funding profile and positive
earnings track record during very difficult economic conditions.
In addition, the bank's deposit rating is mainly driven by its
strong deposit pool in its home market, which according to
Moody's advanced loss given failure (LGF) analysis provides a
relatively good protection to senior creditors and preferred
depositors in a possible resolution scenario.

RATINGS RATIONALE

The BCA assigned to Pancreta Bank takes into consideration its
relatively low Common Equity Tier 1 (CET1) ratio of 9.4% in
December 2017, the lowest among its domestic rated peers but
likely to increase in 2018, and the high volume of problem loans
at 55.4% of gross loans as defined by Moody's. In addition, the
bank's regulatory capital ratio is undermined by its high
Deferred Tax Assets (DTAs) of around EUR50 million, of which
EUR46 million are eligible for conversion to deferred tax credits
under certain conditions and comprised approximately 38% of its
CET1 as of December 2017. Moody's does not consider these DTAs as
tangible common equity, due to the still weak creditworthiness of
the sovereign, a common feature among all Greek banks.

The bank, which is the smallest among all rated Greek banks with
a market share of only around 0.5% on a national level, reported
a nonperforming exposures (NPE) to gross loans ratio (including
performing restructured loans) of 61.6% in December 2017, down
from 63.6% in December 2016. The cash provisioning coverage for
these problem loans is relatively low at 38% in December 2017,
which will make it difficult for the bank to reduce/manage this
high volume of NPEs through write-offs or sale. Concurrently, the
bank's BCA also takes into account the challenge to expand and
diversify its earnings, which are highly dependent on net
interest income, and better manage its liquidity.

The bank's deposit rating, counterparty risk rating (CRR) and
counterparty risk assessment (CRA) take into account the recent
improvements in its funding profile, through the full elimination
of its emergency liquidity assistance (ELA) as of December 2017
from around EUR200 million in June 2015, and the rating agency's
assessment through its advanced LGF analysis for the potential
severity of loss for each creditor class. The fact that the bank
is almost fully funded through customer deposits, given its
relatively strong deposit franchise in Crete, without the use of
any Eurosystem funding or inter-bank repos, benefits
significantly its senior obligations and any counterparty
creditors.

OUTLOOK

The outlook on the bank's deposit ratings is stable balancing the
bank's earnings performance combined with a good local deposit
franchise, against the bank's weak asset quality with very high
levels of NPEs and relatively low provisioning coverage.

WHAT COULD CHANGE THE RATING UP/DOWN

Over time, upward deposit rating pressure could arise following
an improvement in Greece's macroeconomic environment, combined
with an enhanced franchise and earnings diversification. Stronger
fundamentals for the bank, such as improved capital base, asset
quality, profitability and funding through more customer deposits
would also exert upward rating pressure.

Downward pressure would develop on Pancreta Bank's ratings from a
significant deterioration in the domestic operating conditions in
Greece, and more specifically in Crete. The asset-quality
deterioration, arising either from the weakening credit profile
of the bank's large domestic customers or a material
deterioration in its capitalisation, profitability and liquidity
because of intrinsic factors, would also exert negative rating
pressure.

The ratings and inputs to ratings assigned to Pancreta Bank are
as follows:

  - Baseline Credit Assessment: caa3

  - Adjusted Baseline Credit Assessment: caa3

  - Long-term bank deposit ratings (domestic and foreign
currency): Caa2 Stable

  - Short-term bank deposit ratings (domestic and foreign
currency): NP

  - Long-term Counterparty Risk Rating (domestic and foreign
currency): B3

  - Short-term Counterparty Risk Rating (domestic and foreign
currency): NP

  - Long-term Counterparty Risk Assessments: B3(cr)

  - Short-term Counterparty Risk Assessments: NP(cr)

  - Outlook: Stable

Pancreta Bank is based in Crete, Greece, and had total assets of
EUR1.5 billion at the end of December 2017.

The principal methodology used in these ratings was Banks
published in June 2018.


=============
I R E L A N D
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ANGLO IRISH: Former Chief Executive Gets 6-Year Jail Sentence
-------------------------------------------------------------
BBC News reports that former Anglo Irish Bank chief executive
David Drumm has been sentenced to six years in jail.

He was sentenced on June 20 at the Dublin Criminal Court,
BBC relates.

The ex-banker was found guilty earlier in June of authorizing a
EUR7.2 billion (GBP5.4 billion) conspiracy to defraud and of
false accounting, BBC recounts.

Mr. Drumm had pleaded not guilty to conspiring to dishonestly
make Anglo's balance sheet look better between March and
September 2008, BBC relays.

He also denied knowingly giving false figures to the market that
December, BBC notes.

Anglo Irish, which was nationalized in 2009 and wound down from
2011, was synonymous with the lending practices that drove the
"Celtic Tiger" boom and subsequent bust, pushing the Republic of
Ireland to the brink of meltdown in 2010, BBC discloses.

Mr. Drumm moved to the US in 2009 but was extradited in 2016,
BBC states.

Judge Karen O'Connor, as cited by BBC, said that people were
entitled to trust their banks and this was grossly reprehensible
behavior. She said Mr. Drumm was in a position of trust in the
bank.

Judge O'Connor sentenced him to six years and ordered that he
would get credit for the five months he had spent in a prison in
Boston, before being extradited to Ireland in March 2016,
according to BBC.

                         About Anglo Irish

Anglo Irish Bank was an Irish bank headquartered in Dublin from
1964 to 2011.  It went into wind-down mode after nationalization
in 2009.  In July 2011, Anglo Irish merged with the Irish
Nationwide Building Society, with the new company being named the
Irish Bank Resolution Corporation (IBRC).

The former Irish bank sought protection from creditors under
Chapter 15 of the U.S. Bankruptcy Code on Aug. 26, 2013 (Bankr.
D. Del., Case No. 13-12159).  The former bank's Foreign
Representatives are Kieran Wallace and Eamonn Richardson.  Its
U.S. bankruptcy counsel are Mark D. Collins, Esq., and Jason M.
Madron, Esq., at Richards, Layton & Finger, P.A., in Wilmington,
Delaware.


AURIUM CLO II: Moody's Assigns (P)B2 Rating to Class F Notes
------------------------------------------------------------
Moody's Investors Service announced that it has assigned the
following provisional ratings to notes to be issued by Aurium CLO
II Designated Activity Company:

EUR 210,000,000 Class A Senior Secured Floating Rate Notes due
2029, Assigned (P)Aaa (sf)

EUR 45,500,000 Class B Senior Secured Floating Rate Notes due
2029, Assigned (P)Aa2 (sf)

EUR 24,000,000 Class C Senior Secured Deferrable Floating Rate
Notes due 2029, Assigned (P)A2 (sf)

EUR 18,000,000 Class D Senior Secured Deferrable Floating Rate
Notes due 2029, Assigned (P)Baa2 (sf)

EUR 17,500,000 Class E Senior Secured Deferrable Floating Rate
Notes due 2029, Assigned (P)Ba2 (sf)

EUR 10,500,000 Class F Senior Secured Deferrable Floating Rate
Notes due 2029, 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 endeavor
to assign definitive ratings. A definitive rating (if any) may
differ from a provisional rating.

RATINGS RATIONALE

Moody's provisional ratings of the rated notes address the
expected loss posed to noteholders by the legal final maturity of
the notes in 2029. 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, Spire Management
Limited), has sufficient experience and operational capacity and
is capable of managing this CLO.

The Issuer will issue the 2018 Notes in connection with the
refinancing of the following classes of notes: Class A Notes,
Class B Notes, Class C Notes, Class D Notes, Class E Notes and
Class F Notes all due 2029, previously issued on June 22, 2016.
On the refinancing date, the Issuer will use the proceeds from
the issuance of the Refinancing Notes to redeem in full its
respective Original Notes. On the Original Closing Date, the
Issuer also issued EUR 35 million of Subordinated Notes, which
remain outstanding. However, the terms and conditions of the
Subordinated Notes were amended in accordance with the
Refinancing Notes' conditions.

Aurium CLO II Designated Activity Company is a managed cash flow
CLO. At least 90.0% of the portfolio must consist of senior
secured loans and senior secured bonds and up to 10.0% of the
portfolio may consist of unsecured obligations, second-lien
loans, mezzanine loans and high yield bonds. The portfolio is
expected to be fully ramped up as of the closing date and to be
comprised predominantly of corporate loans to obligors domiciled
in Western Europe.

Spire Management 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 2-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.

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. Spire Management's investment
decisions and management of the transaction will also affect the
notes' performance.

Loss and Cash Flow Analysis:

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

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

Par amount: EUR 350,000,000

Diversity Score: 50

Weighted Average Rating Factor (WARF): 2800

Weighted Average Spread (WAS): 3.5%

Weighted Average Recovery Rate (WARR): 43.5%

Weighted Average Life (WAL): 7.25 years

As part of its analysis, Moody's has addressed the potential
exposure to obligors domiciled in countries with a local currency
country risk ceiling of A1 or below. Given the portfolio
constraints and the current sovereign ratings in Europe, such
exposure may not exceed 10% of the total portfolio with exposures
to countries with local currency country risk ceiling of Baa1 to
Baa3 further limited to 5%. As a worst case scenario, a maximum
5% of the pool would be domiciled in countries with A3 and a
maximum of 5% of the pool would be domiciled in countries with
Baa3 local currency country ceiling each. The remainder of the
pool will be domiciled in countries which currently have a local
currency country ceiling of Aaa or Aa1 to Aa3. Given this
portfolio composition, the model was run with different target
par amounts depending on the target rating of each class as
further described in the methodology. The portfolio haircuts are
a function of the exposure size to peripheral countries and the
target ratings of the rated notes and amount to 0.75% for the
Class A Notes, 0.50% for the Class B Notes, 0.38% for the Class C
Notes and 0% for classes D, E and F.

Stress Scenarios:

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

Change in WARF: WARF + 15% (to 3220 from 2800)

Ratings Impact in Rating Notches:

Class A Senior Secured Floating Rate Notes: 0

Class B Senior Secured Floating Rate Notes: -1

Class C Senior Secured Deferrable Floating Rate Notes: -2

Class D Senior Secured Deferrable Floating Rate Notes: -2

Class E Senior Secured Deferrable Floating Rate Notes: -1

Class F Senior Secured Deferrable Floating Rate Notes: 0

Percentage Change in WARF: WARF +30% (to 3640 from 2800)

Ratings Impact in Rating Notches:

Class A Senior Secured Floating Rate Notes: -1

Class B Senior Secured Floating Rate Notes: -3

Class C Senior Secured Deferrable Floating Rate Notes: -4

Class D Senior Secured Deferrable Floating Rate Notes: -3

Class E Senior Secured Deferrable Floating Rate Notes: -1

Class F Senior Secured Deferrable Floating Rate Notes: -2


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


MOBY SPA: S&P Cuts Issuer Credit Rating to 'B', Outlook Negative
----------------------------------------------------------------
S&P Global Ratings said that it lowered its long-term issuer
credit rating on Italian ferry operator Moby SpA to 'B' from
'B+'. The outlook is negative.

S&P said, "We also lowered the issue rating on Moby's senior
secured debt to 'B+' from 'BB-'. The recovery rating is unchanged
at '2', indicating our expectation of substantial recovery (70%-
90%; rounded estimate: 85%), for the secured lenders in the event
of a payment default.

"We removed the ratings from CreditWatch with negative
implications where they were placed on Dec. 20, 2017.

"The downgrade reflects that on the back of a more competitive
trading environment than previously expected, Moby's reported
EBITDA base has fallen to close to EUR110 million (excluding the
gain from asset disposals) in 2017 and we do not think it will
climb to our previously forecast levels of EUR130 million-EUR140
million in 2018-2019. This weakness has diminished the company's
financial flexibility to confront potential operational setbacks
and unexpected cash calls.

"We expect Moby will continue to face intense competition, which
combined with potential regulatory fines from ongoing several
legal proceedings, could reduce its ability to improve credit
metrics (which are currently weak for the rating) and could lead
to a liquidity shortfall depending on the severity of fines. In
the 12 months ending March 31, 2018, Moby's credit metrics
weakened further due to the fierce competition in its core and
new routes, particularly to the island of Sicily where the
company competes with a well-established player. As such, its
adjusted funds from operations (FFO) to debt reached 10% compared
with about 15% in 2016. During this period, Moby communicated a
EUR22 million loss from the new routes. While we expect a slight
improvement in 2018, we believe increased fuel prices and the
adverse change in the competitive landscape will constrain the
company's ability to reach break-even levels on the new routes.

"Furthermore, we believe that Moby is at risk of breaching the
net leverage covenant test in June 2019 when the level will step
down to the original threshold of maximum of 3.5x from the most
recently relaxed maximum of 5.5x (as agreed with the lender
group) for the June 2018 and December 2018  tests."

The rating remains under pressure from the uncertainty regarding
the European Commission (EC) investigation, which could result in
significant cash calls on the company, and a potential Italian
anti-trust regulatory fine of up to EUR29 million. The EC is
investigating historical and existing subsidies from the Italian
state to Tirrenia-CIN and Toremar (Moby's wholly-owned
subsidiary). The investigation started in 2011, but the EC is yet
to determine if such subsidies constitute incompatible state aid
and threatens to distort competition. Until the commission
concludes the investigation, the Italian government is contracted
to pay annual subsidies amounting to about EUR87 million for all
of Tirrenia-CIN's and some of Toremar's loss-making routes, in
exchange for provision of services, especially in winter. The
ongoing investigation also encompasses other issues related to
allegations that the privatization of the Tirrenia-CIN business
was conducted unfairly.

To provision for an adverse ruling, Moby agreed with Tirrenia-CIN
at the time of the acquisition in 2012 to defer EUR180 million of
the acquisition price (included in debt) and suspend the payment
until the EC concludes the investigation. S&P said, "We consider
that the deferred payment provides a cushion for Moby because it
can be reduced or terminated if the company is subject to the EC
fine. It has also been negotiated to be paid in deferred
installments (EUR55 million already due and suspended, EUR65
million due in April 2019, and EUR60 million in April 2021) if
the EC doesn't overrule this payment agreement. However, we
acknowledge that the EUR180 million may not cover all the
possible outcomes and, depending on the EC ruling in terms of
severity of fines and payment schedule, Moby could face a
liquidity shortfall, which would lead us to lower the rating."

S&P's base case assumes:

-- Sales growth of about 2.0%-2.5% in 2018 and 2019, linked to
    S&P's estimates of annual GDP and inflation growth rates for
    Italy and the eurozone (down from 9% in 2017 supported by new
    routes).

-- Low cost-base inflation given that Moby has hedges on the
    vast majority of its bunker fuel volumes in 2018, although we
    note there are no hedges in 2019. S&P said, "We believe that
    the company will continue updating its hedging program.
    However, we acknowledge that an increase in fuel prices will
    make hedging more expensive."

-- Annual capital expenditure (capex) of around EUR35 million
    for the next two years to cover investments in fleet
    refitting and dry-docking.

-- State grants continuing in 2018 and 2019. S&P assumes that
    Moby could terminate the services or implement other
    efficiency measures to mitigate any potential changes to the
    system of state grants.

-- No dividend distribution.

-- About EUR105 million of the company's cash to be immediately
    accessible to repay debt in 2018 and 2019. This amount
    corresponds to the first installment of EUR55 million for the
    deferred payment to the Tirrenia group (due in April 2016 but
    suspended), and EUR50 million for the amortization of the
    secured term loan in February 2019.

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

-- S&P Global Ratings-adjusted FFO to debt of about 14%-15% in
    2018 and 17% in 2019 (from 10% in 2017).

-- Adjusted debt to EBITDA of about 5.0x-4.5x in 2018 and
    improving to about 4.2x in 2019, compared with 5.9x in 2017.*

*S&P's adjusted calculation for debt to EBITDA is not consistent
with the bank's definition of net debt leverage used for the
purpose of leverage covenant calculation. This is mainly due to
S&P's standard operating lease and surplus cash adjustments to
total adjusted debt.

As a ferry operator with a fleet of 47 passenger and cargo
ferries and 17 tugboats, Moby predominantly serves routes between
continental Italy and Italian islands (as well as French island
Corsica). S&P's business assessment for Moby continues to reflect
the company's exposure to the cyclical transportation industry
and its narrow business scope compared with other global ship
operators and transport service providers.

S&P said, "Furthermore, we consider that Moby participates in a
competitive market where strategic pricing to maintain market
share will continue pressuring profitability. As a seasonal
business, Moby's revenues are highly concentrated in Sardinian
routes, some of which are not profitable outside the tourist
season, and we note that certain routes never turn a profit.
While we assume that Moby will continue receiving state grants in
2018 and 2019 (EUR86 million per year), we view negatively the
termination of such aid in 2020. However, we assume that Moby
could discontinue the services, sell vessels, charter them out,
or implement other efficiency measures to mitigate any potential
changes to the system of state grants. On top of its passenger
ferry operations, Moby generates about 30% of its total revenue
from cargo transportation, which we consider to have more stable
volume patterns throughout the year.

"Moby's leading position as a ferry operator in the niche Italian
market supports the rating, in our view. It has a well-recognized
and long-standing brand and has operated in the maritime industry
since the 18th century. Moby's relatively young and difficult-to-
replicate fleet of vessels is also a relative strength. We
consider the fundamentals of the ferry industry to be more
favorable than traditional cyclical transportation because demand
and pricing is generally more stable and capital intensity is
lower.

"The negative outlook reflects our view that Moby's credit
metrics could remain below a level commensurate with the 'B'
rating in 2018 to an extent that we see an elevated risk of
covenant breach in 2019. The outlook also takes into account that
the cash fines imposed by the EC may exceed our base-case
expectations.

"We would lower the rating in the next 12 months if EBITDA
generation deteriorated, such that adjusted FFO to debt appeared
to remain below 12% in 2018. This could occur, for example, if
the cost of fuel were 10% higher than expected, hitting
profitability, or if new routes generated similar losses to those
in 2017 (EUR22 million) amid competitive pricing pressure.

"We would also lower the rating by one or more notches if the
EC's ruling resulted in Moby having to pay a fine significantly
higher than the deferred payment amount of EUR180 million and
within a short period of time, which would likely lead to a
liquidity shortfall.

"We would revise the outlook to stable if the company performs
better than expected and restores adequate headroom under the
leverage covenant for tests in 2019. This could occur, all other
things being equal, if Moby recovers from the operating losses in
the new routes reaching break-even levels."


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


DAMU: S&P Affirms 'BB+/B' Issuer Credit Ratings, Outlook Stable
---------------------------------------------------------------
S&P Global Ratings said that it affirmed its long- and short-term
foreign- and local-currency issuer credit ratings on DAMU
Entrepreneurship Development Fund (DAMU) at 'BB+/B'. At the same
time, S&P affirmed the Kazakhstan national scale rating on DAMU
at 'kzAA-'. The outlook is stable.

S&P said, "The affirmation primarily reflects our view that--
given its mandate to support and develop the small and midsize
enterprise (SME) sector in Kazakhstan--DAMU remains a core
institution within the Baiterek Holding group (Baiterek group).
The affirmation also reflects our view of an extremely high
likelihood that the government of Kazakhstan would provide timely
extraordinary support to DAMU in a financial stress scenario."

The Baiterek group credit profile (GCP) of 'bb+' reflects the
creditworthiness of the consolidated operations group, taking
into account extraordinary government support and the 'BBB-'
sovereign credit ratings on Kazakhstan. S&P's assessment of the
GCP at 'bb+' is one notch lower than the sovereign ratings, which
balances the negative trends in Kazakhstan's government-related
entities (GREs) sector.

S&P said, "We view DAMU as playing a core role within the
Baiterek group and therefore we equalize the rating on DAMU with
the Baiterek group's GCP. DAMU accounted for about 10% of the
group's consolidated assets as of end-2017. DAMU's general
mandate to contribute to the development of Kazakhstan's
entrepreneurship and the SME sector closely aligns with the
overall Baiterek group strategy. We also consider it is highly
unlikely that DAMU would be sold."

S&P also believes there is an extremely high likelihood that the
government would provide timely extraordinary support to DAMU if
needed, based on:

-- DAMU's integral link with the government of Kazakhstan, which
    fully owns DAMU through National Management Holding Baiterek.
    DAMU was established in 1997 by presidential decree. The
    status of DAMU is reflected in the law "On Private
    Entrepreneurship," which refers to the fund as an institution
    contributing to entrepreneurship development on behalf of the
    government. S&P does not expect DAMU to be privatized in the
    foreseeable future.

-- DAMU's very important role for the government as the
    institution supporting the SME sector in Kazakhstan. The
    government has set out the expansion of the sector as a
    priority for the development and diversification of the
    Kazakh economy. DAMU contributes to implementing several
    government development programs including the SME support
    program Business Roadmap 2020, the infrastructure program
    Nurly Zhol, as well as a new program focused on the
    development of productive employment and entrepreneurship for
    2017-2021.

S&P said, "We expect that DAMU will continue supporting the SME
sector and will implement various government programs. We
understand, however, that the funding will predominantly come
from nongovernment sources, namely from international financial
institutions.

"Our ratings on DAMU are four notches higher than its stand-alone
credit profile (SACP), which we have affirmed at 'b'. The SACP
reflects the combination of the 'bb-' anchor for Kazakhstan
banks, which is driven by high economic and industry risks for
the system, and factors specific to DAMU. In particular, the SACP
reflects DAMU's relatively small size compared to midsize Kazakh
commercial banks and its focus on providing loans to commercial
banks.

"We expect DAMU's capitalization to remain strong, although we
project that it will fall in the next 18 months, taking into
account significant growth that the fund is targeting.
The fund's risk position is comparable to the average of the
Kazakh banking system, reflecting its concentrated exposure to
the Kazakh banking sector, where we have seen a few defaults over
the past 18 months; its growing exposure to SMEs through the
provision of guarantees; as well as sound risk management
practices."

The fund's liquid assets adequately cover its short-term debt
repayments, but the fund is vulnerable to refinancing risk, as
concentrated wholesale funding dominates its funding profile.
DAMU aims to diversify its lending across a variety of market
sources and to reduce its reliance on government funding.

S&P said, "The stable outlook on DAMU mirrors our outlook on the
sovereign ratings on Kazakhstan. Any rating action on the
sovereign would likely result in a similar action on the fund.

"We could lower our ratings on DAMU if we saw signs of waning
government support to the Baiterek group, or, more broadly, to
other GREs over the next 12 months.

"We could raise the ratings on DAMU if Kazakhstan's monitoring of
its GRE debt and the efficiency of its administrative mechanisms
to provide extraordinary support to Kazakh GREs were to improve
significantly."


KAZKOMMERTSBANK JSC: S&P Raises ICR to BB, Outlook Stable
---------------------------------------------------------
S&P Global Ratings said that it raised its long-term issuer
credit rating on Kazkommertsbank (KKB) to 'BB' from 'B+' and
removed the rating from CreditWatch with positive implications
where it was placed on Dec. 22, 2017. The outlook is stable.

S&P said, "We also revised the outlook on Halyk Savings Bank of
Kazakhstan (Halyk Bank) to stable from negative, and affirmed our
long-term ratings on the bank at 'BB'.

"At the same time, we affirmed the 'B' short-term issuer credit
ratings on both banks.

"We also raised our Kazakhstan national scale rating on Halyk
Bank to 'kzA+' from 'kzA'. We raised our Kazakhstan national
scale rating on KKB to 'kzA+' from 'kzBBB-' and removed it from
CreditWatch positive."

The rating actions follow the announcement that Halyk Bank has
received approval from the National Bank of Kazakhstan to proceed
with the merger of KKB into Halyk Bank. Shareholders of both
banks have approved the merger and the giving up of KKB's banking
licence. Preparations for the merger, in terms of cost
optimization and the integration of information systems and
processes, have been progressing as planned. S&P therefore expect
the banks will merge in the third quarter of 2018 and believe
that the merger is almost certain.

S&P said, "Consequently, we now view KKB as a core subsidiary of
Halyk Bank and expect Halyk Bank will provide support to KKB
under any foreseeable circumstances in the next few months prior
to the legal merger. We therefore equalize our ratings on Halyk
Bank and KKB. On the completion of the merger, we will likely
discontinue the ratings on KKB, and KKB will transfer all its
obligations to Halyk Bank.

"We revised the outlook on Halyk Bank to stable from negative
because of the group's stronger capitalization. We forecast Halyk
Bank's risk-adjusted capital (RAC) ratio to be 7.2%-7.4% during
the next 12-18 months, up from 7.1% at the end of 2017. This is
contrary to our previous assumptions that the RAC ratio would
possibly decline to 5.5%-6.5%. We expect that the bank's credit
costs will be about 1.9%-2.1% of total loans during this period,
up from 0.9% (the average level that Halyk Bank reported annually
in 2012-2016 before Halyk acquired KKB in 2017).

"We now estimate that Halyk Bank's nonperforming loans (NPLs;
loans overdue more than 90 days) make up about 13% of the bank's
total loans. Another 13% comprise restructured loans and
repossessed collaterals, which is high compared with global
peers. We expect that the bank's NPLs will decrease to about 10%
in the next 12-18 months and the bank will make considerable
progress in realizing its noncore assets repossessed from its
defaulted borrowers.

"We also expect that Halyk Bank will have a cautious approach to
new lending in the next 12-18 months, concentrating mainly on the
integration process and cleaning up KKB's problem assets, which
will keep it from accumulating additional risks, in our view.

"We see Halyk Bank's business position as strong, reflecting its
leading domestic franchise in key business lines, sound business
diversification, and experienced management team with a proven
track record of sound financial performance. Halyk Bank market
shares were 30% by loans and 36% by customer deposits on May 1,
2018.

"In our view, KKB's own creditworthiness (stand-alone credit
profile; SACP) has somewhat strengthened following the
acquisition by Halyk Bank. We also believe that the bank will be
able to meet its financial commitments over the next 12-18 months
thanks to its liquidity buffers. KKB's broad liquid assets
accounted for about 57% of total assets as of March 31, 2018, and
amply covered short-term wholesale funding by 80x and all
customer deposits by 82%. We expect the share of broad liquid
assets will somewhat reduce through liability repayments but
remain above 40% in the next 12 months. In February 2018, the
bank prepaid $100 million perpetual subordinated bonds, and in
May 2018, it fully repaid $300 million Eurobonds. The remaining
Kazakhstani tenge (KZT) 60 billion senior unsecured and KZT13.5
billion subordinated bonds are due in 2018-2019, while the $750
million senior unsecured bonds are due in 2022 and the KZT101
billion subordinated bonds are due in 2025.

"We continue to see KKB's capital position as weak. Our RAC ratio
reached 2.8% at year-end 2017 because we adjust the bank's
capital for substantial tax loss carry-forwards, equity in its
insurance subsidiary, and International Financial Reporting
Standard 9 provisions. We expect our RAC ratio will strengthen to
about 4% over the next 24 months, supported by our expectation of
positive net income coupled with a small decline in net loans due
to recoveries, write-offs, or additional provisions.

"We still see significant remaining risks in KKB's loan
portfolio, although we note a positive trend in the bank's
reported asset quality and provisioning of nonperforming loans.
We therefore assess its risk position as weak in comparison with
other large Kazakhstani banks and peers from countries with the
same economic risks as in Kazakhstan. KKB's NPLs decreased to
25.7% as of May 1, 2018, from the high of 37.1% as of Nov. 1,
2017, as reported by the regulator, due to restructuring and
write-offs. This still compared poorly with the system average of
about 9%. Provisions covered 53% of total loans as of March 31,
2018.

"The stable outlooks on Halyk Bank and KKB reflect our
expectation that the consolidated group's credit profile will
likely remain broadly unchanged in the next 12 months. We expect
the group will continue to improve its asset quality indicators
through additional provisions and write-offs.

"We could take a negative rating action on Halyk Bank during the
next 12-18 months if its asset quality or capitalization
deteriorated significantly. This could happen, for example, if
the bank had to report significant additional loan loss
provisions or other unexpected losses related to assets it
received from KKB, which could cause our RAC ratio to fall below
5%."

A positive rating action is remote at this stage. It would depend
on the stabilization of economic risks in the Kazakh banking
sector and Halyk Bank's progress in working out its problem
assets.


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


MONITCHEM HOLDCO: S&P Raises Super Senior RCF Due 2020 to 'BB-'
---------------------------------------------------------------
S&P Global Ratings said that it raised its issue rating on
Monitchem Holdco's EUR100 million super senior revolving credit
facility (RCF) due 2020 to 'BB-' from 'B+'. The recovery rating
has been revised upward to '1+' from '1', indicating S&P's
expectation of full recovery (100%) in the event of a payment
default.

S&P said, "At the same time, we affirmed our 'B-' long-term
issuer credit rating on Monitchem Holdco 2 S.A. (CABB), holding
company for Germany-headquartered chemicals producer CABB
International GmbH. The outlook is negative.

"We also affirmed our 'B-' issue rating on the EUR410 million
senior secured notes due 2021. The recovery rating is unchanged
at '3', reflecting our expectations of meaningful recovery (50%-
70%; rounded estimate: 60%) in the event of a payment default.

"Finally, we affirmed our 'CCC' issue rating on the EUR175
million senior unsecured notes due 2022. The recovery rating is
unchanged at '6', indicating our expectations of negligible
recovery (0%-10%; rounded estimate: 0%) in the event of a payment
default.

"We raised our rating on CABB's super senior RCF to 'BB-' from
'B+' to reflect our assessment of the security pledged, and the
limitation on incremental debt being issued that ranks equal or
more senior to the instrument. We consider that the super senior
RCF has a first-priority pledge over security of sufficient value
to allow for full recovery in the event of a hypothetical
default. The security pledged includes real estate and
receivables.

"Under the terms of the senior facilities agreement, no more than
EUR100 million in debt can be raised that ranks equal or more
senior to the facility; we assess the risk of such debt being
raised as limited. The facility is subject to a fixed-charge
coverage ratio and a consolidated senior secured leverage ratio,
but also subject to certain carve-outs for permitted debt. Our
assessment does not consider how the proceeds of any such issued
debt will be used."

The issue ratings on CABB's senior secured notes and senior
unsecured notes are unaffected by this action, and remain at 'B-'
and 'CCC', respectively.

S&P affirmed its rating on CABB to signify that, in our view, the
decline in CABB's revenue and EBITDA over the past few quarters
is primarily due to the low cycle conditions in the agrochemical
industry and results from inventory overstocking and depressed
incomes in the farming industry and reduced demand for crop-
protection products.

CABB still leads the monochloroacetic acid (MCA) market jointly
with Netherlands-headquartered coatings and chemicals producer,
Akzo-Nobel, despite the emergence of new competitor PCC Rokita
and an increase in competition in China. Some Chinese domestic
producers have increased their product quality in response to the
higher environmental standards implemented by the government,
while other producers have partially or fully shut down.

CABB continues to win significant contracts for new, high-margin
business, which requires further investment. For instance, after
winning the contract for two new molecules, CABB plans a
selective standstill at its Pratteln plant in Switzerland for
capacity improvements in the second and third quarters of 2018.
Its high capital expenditure (capex) is a direct response to
winning new contracts. S&P said, "Following completion of the
works, we assume in our base-case scenario that the higher
productivity and higher-margin molecules should enable CABB's
custom manufacturing division to increase EBITDA before the end
of 2018. Our affirmation is supported by CABB's adequate
liquidity, which includes EUR43 million cash on balance sheet at
the end of first-quarter 2018, and full use of its EUR100 million
RCF."

S&P said, "Despite this, we do not predict a meaningful
turnaround in CABB's industry segments before the end of 2018.
CABB's new product launches from its Pratteln plant, combined
with its focus on improving operational efficiencies, caused us
to forecast adjusted gross debt-to-EBITDA of approximately 8.0x,
in line with 2017.

"We anticipate that the crop-protection industry will recover
after 2018, returning to growth of about 2%-3%, supported by
stronger crop prices and rising incomes among farmers. We
understand that crop commodity prices -- particularly maize,
wheat, and soy -- have stabilized, allowing manufacturers to
focus more on future product launches."

In addition, CABB's acetyls business, which services specifically
agrochemicals, pharmaceuticals, food, and personal care, has been
more robust and continues to see strong demand, despite some
weakness in China where the MCA market continues to be
oversupplied. The phase-out of chlorine mercury cell technology
has contributed to stronger prices for caustic soda.

Looking beyond 2018 and 2019, strong structural growth drivers,
such as population growth, the emerging middle class, and a
change in dietary habits support the business.

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

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

In S&P's view, CABB's key business constraints are:

-- Its exposure to key product, MCA, in the acetyls business;

-- A degree of customer concentration in the custom
manufacturing segment; and

-- Some sensitivity to feedstock prices (notably acetic acid and
    acetic anhydride).

That said, S&P recognizse that CABB benefits from pass-through
clauses, albeit with some time lag, and has worked to reduce
supplier concentration in recent years.

The group has invested heavily in recent years. Its capex peaked
at EUR75 million in 2015, which included the recently completed
EUR50 million electrolysis project (a switch from mercury to
membrane technology) at its fine chemical plant facility in
Pratteln, and the construction of a new high-quality 25-kiloton
MCA plant in China. S&P anticipates capex of around EUR50
million-EUR55 million in 2018 -- above the perceived run-rate
capex of approximately EUR30 million -- as CABB aims to grow
organically, aided by the strong market position of its key
customers.

S&P said, "In our view, CABB's financial risk profile primarily
depends on the group's high leverage. We forecast S&P Global
Ratings-adjusted debt-to-EBTIDA in excess of 8x at year-end 2018,
followed by a slight improvement to 7.75x-8.00x in 2019, owing to
recent market weakness in CABB's agrochemicals and crop
protection markets.



"Our negative outlook reflects the likelihood of debt-to-EBITDA
deviating beyond levels that we view as commensurate with our 'B-
' rating, combined with our forecast of -EUR10 million FOCF per
year in 2018-2019, largely because CABB plans to invest
approximately EUR50 million-EUR55 million of capex each year.

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

For year-end 2018, S&P forecasts adjusted total debt of about
EUR660 million. This includes:

-- EUR225 million senior secured notes due 2021,

-- EUR175 million senior secured floating rates notes due 2021,

-- EUR175 million senior unsecured notes due 2021,

-- Operating lease adjustments of EUR9 million,

-- Asset retirement obligations of EUR2 million,

-- EUR40 million of pension and other postretirement
obligations,

-- EUR20 million of unamortized borrowing costs, and

-- Drawings on the super senior RCF due 2020."

The RCF agreement contains springing covenants that come into
effect if the RCF is 30% drawn. Once 30% of the facility has been
drawn, CABB must abide by a fixed-charge coverage ratio of
2.1:1.0, and a consolidated leverage ratio of 8.0x-8.3x over the
next 12 months.

The crop protection markets is a key sector for CABB's custom
manufacturing unit. S&P said, "Our base-case scenario considers
the continued weakness in this sector in 2018, as historically
high commodity stocks and low commodity prices weighed on demand
from farmers. Having said that, our base case also considers the
potential for top-line improvements in 2019 as steady demand and
new mandates come on line in the custom manufacturing unit. The
acetyls unit has seen steady growth thanks to robust demand from
the pharma, food, and personal care end markets."

-- 2018 group revenue growth of approximately 2.5%-2.8%, driven
    predominantly by CABB's acetyls business. S&P said, "Our base
    case assumes CABB will benefit from more stable demand from
    the farming community and new, more profitable, product l
    launches in the second half of 2018 in the custom
    manufacturing unit. In 2019, our base case forecasts
    continued revenue growth of 2.7%-3.0%, despite some weakness
    in CABB's Chinese acetyls operations, where MCA is
    oversupplied."

-- Reported EBITDA margin of just above 17%, due to continued
    raw material price pressures, the planned standstill at the
    Pratteln plant in the second and third quarter 2018,
    partially offset by continued cost-cutting initiatives.

-- Capex of approximately EUR50 million-EUR55 million in 2018,
    constituting various maintenance and efficiency programs and
    the group's growth capex for new product launches developed
    jointly with customers, including the planned works at
    Pratteln. S&P's base case also considers approximately EUR45
    million in 2019, subject to any further contract wins.

-- Small working capital outflow of EUR1 million-EUR2 million
    over the course of 2018, benefitting from recent focus on
    inventory reduction and receivables management.

-- S&P does not anticipate any dividends, acquisitions,
    disposals, or debt refinancing.

Based upon these assumptions, S&P arrives at the following credit
measures for the company:

-- Adjusted debt-to-EBITDA of approximately 8.0x, in line with
    2017, because EBITDA has increased only marginally over the
    period. S&P's base-case forecast top-line growth in 2019
    should lead to improved leverage in 2019 (7.75x-8.0x).

-- Adjusted FOCF of -EUR15 million to -EUR20 million in 2018
    following continued capex on growth projects. This should
    improve in 2019 following improved EBITDA.

-- Adjusted EBITDA cash interest coverage of 2.7x-3.0x over the
    forecast horizon.

S&P said, "The negative outlook on CABB reflects our view that
the group will generate EBITDA of EUR75 million-EUR80 million in
2018, rising to EUR80 million-EUR85 million in 2019. This leads
to our forecast that the group will generate negative FOCF in
both years (approximately -EUR10 million to -EUR15 million in
2018), and an adjusted debt-to-EBITDA ratio of approximately 8x.
Our outlook assumes that EBITDA interest coverage will remain at
approximately 2.5x-2.7x over the next 12-18 months.

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

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


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


BARINGS EURO 2014-1: Fitch Rates Class F-RR Notes 'B-(EXP)sf'
-------------------------------------------------------------
Fitch Ratings has assigned Barings Euro CLO 2014-1 B.V.
reissuance notes expected ratings, as follows:

Class X: 'AAA(EXP)sf'; Outlook Stable

Class A-RR: 'AAA(EXP)sf'; Outlook Stable

Class B-1-RR: 'AA(EXP)sf'; Outlook Stable

Class B-2-RR: 'AA(EXP)sf'; Outlook Stable

Class C-RR: 'A(EXP)sf'; Outlook Stable

Class D-RR: 'BBB(EXP)sf'; Outlook Stable

Class E-RR: 'BB(EXP)sf'; Outlook Stable

Class F-RR: 'B-(EXP)sf'; Outlook Stable

Subordinated-R: not rated

Barings Euro CLO 2014-1 B.V., formerly Babson Euro CLO 2014-1
B.V., (the issuer) is a cash flow collateralised loan obligation
(CLO). On the issue date, assets in the existing transaction will
be liquidated and the proceeds used to redeem the existing notes.
Net proceeds from the new notes will then be used to purchase
back the portfolio. The new eligibility criteria will only be
required to be satisfied in respect of assets being purchased
after the issue date. The portfolio is managed by Barings (U.K.)
Limited The refinanced CLO envisages a reinvestment period ending
July 15, 2022 and a 8.5-year weighted average life (WAL).

The assignment of the final ratings is contingent on the receipt
of final documents conforming to information already reviewed.

KEY RATING DRIVERS

'B/B-' Portfolio Credit Quality

Fitch assesses the average credit quality of obligors at the
'B/B-' category. The Fitch calculated weighted average rating
factor (WARF) of the underlying portfolio is 33.96, below the
maximum covenanted WARF of 35.5.

High Recovery Expectations

At least 90% of the portfolio comprises senior secured
obligations. Recovery prospects for these assets are typically
more favourable than for second-lien, unsecured and mezzanine
assets. The Fitch calculated weighted average recovery rate
(WARR) of the identified portfolio is 63.37%, above the minimum
covenanted WARR of 62.00%.

Diversified Asset Portfolio

The covenanted maximum exposure to the top 10 obligors for
assigning the expected ratings is 22% of the portfolio balance.
This covenant ensures that the asset portfolio will not be
exposed to excessive obligor concentration. The transaction also
includes limits on maximum industry exposure based on Fitch
industry definitions. The maximum exposure to the three largest
Fitch industries in the portfolio is covenanted at 40.0%.

Limited Interest Rate Risk

Unhedged fixed rate assets cannot be less than 10% and cannot
exceed 17.5% of the portfolio while there are 7.5% fixed-rate
liabilities. Therefore the interest rate risk is partially
hedged.

Diversified Asset Portfolio

The transaction is governed by collateral quality and portfolio
profile tests, which limit potential adverse selection by the
manager. These limitations are based, among others, on Fitch
ratings and recovery ratings.

Limited FX Risk

The transaction is allowed to invest up to 20% of the portfolio
in non-euro-denominated assets, provided these are hedged with
perfect asset swaps within six months of purchase.

TRANSACTION SUMMARY

The issuer will amend the capital structure and reset the
maturity of the notes as well as the reinvestment period. The
four year reinvestment period is scheduled to end in 2022. The
issuer will introduce the new class X notes, the interest payment
of which will rank pari passu and pro-rata to the class A-RR
notes. Principal on these notes is scheduled to amortise in four
equal instalments starting from the first payment date. Class X
notional is excluded from the over-collateralisation test
calculation, but a breach of this test will divert interest and
principal proceeds to the repayment of the class X notes.

RATING SENSITIVITIES

A 125% default multiplier applied to the portfolio's mean default
rate, and with this increase added to all rating default levels,
would lead to a downgrade of up to two notches for the rated
notes. A 25% reduction in recovery rates would lead to a
downgrade of up to three notches for the rated notes.

USE OF THIRD-PARTY DUE DILIGENCE PURSUANT TO RULE 17G-10

Form ABS Due Diligence-15E was not provided to, or reviewed by,
Fitch in relation to this rating action.

DATA ADEQUACY

The majority of the underlying assets or risk-presenting entities
have ratings or credit opinions from Fitch and/or other
Nationally Recognised Statistical Rating Organisations and/or
European Securities and Markets Authority-registered rating
agencies. Fitch has relied on the practices of the relevant
groups within Fitch and/or other rating agencies to assess the
asset portfolio information.

Overall, Fitch's assessment of the asset pool information relied
upon for the agency's rating analysis according to its applicable
rating methodologies indicates that it is adequately reliable.


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


NOVO BANCO: Moody's Puts (P)Caa3 Sub. Debt Rating to Tier 2 Bond
----------------------------------------------------------------
Moody's Investors Service has assigned a provisional (P)Caa3
long-term domestic-currency subordinated debt rating to Novo
Banco, S.A.'s (Novo Banco -- long-term deposit rating of Caa1
with a positive outlook, long-term senior unsecured debt of Caa2
with positive outlook and BCA of caa2) planned EUR-denominated
plain vanilla Tier 2 bond issuance (the notes).

Moody's issues provisional ratings in advance of the final sale
of the securities. The ratings, however, only represent Moody's
preliminary credit opinion. Upon conclusive review of all
transaction and associated documents, Moody's will endeavour to
assign definitive ratings to the notes. A definitive rating may
differ from a provisional rating.

RATINGS RATIONALE

The provisional (P)Caa3 rating assigned to the subordinated debt
obligations of Novo Banco reflects the security's loss absorbing
features in the case of failure, being subordinated to senior
obligations. The rating is positioned one notch below the bank's
adjusted baseline credit assessment (BCA) of caa2, in line with
Moody's standard notching guidance for plain vanilla subordinated
debt instruments. The provisional rating does not incorporate any
uplift from government support.

The planned subordinated debt issuance is expected to be eligible
for Tier 2 capital treatment under European law. The positioning
of Novo Banco's provisional rating one notch below the bank's
adjusted BCA reflects the probability of default in line with the
Adjusted BCA and the high loss severity for subordinated
creditors in the event of the bank's failure, due to the limited
volume of debt and limited protection from more subordinated
instruments and residual equity.

WHAT COULD CHANGE THE RATING UP/DOWN

Novo Banco's subordinated debt ratings are linked to the
standalone BCA. As such, any change to the BCA would also likely
affect these ratings. The bank's subordinated debt ratings could
also change as a result of changes in the loss given failure that
these securities face.

LIST OF AFFECTED RATINGS

Issuer: Novo Banco, S.A.

Assignment:

Subordinate Regular Bond/Debenture, assigned (P)Caa3

PRINCIPAL METHODOLOGY

The principal methodology used in this rating was Banks published
in June 2018.



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


AYT HIPOTECARIO 5: S&P Raises Class C RMBS Notes Rating to BB
-------------------------------------------------------------
S&P Global Ratings raised and removed from CreditWatch positive
its credit ratings on AyT Hipotecario Mixto V, Fondo de
Titulizacion de Activos' class A, B, and C notes.

S&P said, "The rating actions follow the application of our
relevant criteria and our full analysis of the most recent
transaction information that we have received, and reflect the
transaction's current structural features. We have also
considered our updated outlook assumptions for the Spanish
residential mortgage market.

"Our structured finance ratings above the sovereign (RAS)
criteria classify the sensitivity of this transaction as
moderate. Therefore, after our March 23, 2018 upgrade of Spain to
'A-' from 'BBB+', the highest rating that we can assign to the
senior-most tranche in this transaction is six notches above the
Spanish sovereign rating, or 'AAA (sf)', if certain conditions
are met. For all the other tranches, the highest rating that we
can assign is four notches above the sovereign rating.

"Following the sovereign upgrade, on April 6, 2018, we raised our
long-term issuer credit ratings (ICRs) on Banco Santander S.A.,
the bank account provider and, Banco Bilbao Vizcaya Argentaria
S.A., Caixabank S.A., and Bankia S.A., which are the servicers in
this transaction.

"We have not given benefit to the swap counterparty in our
analysis at rating levels above our long-term 'BBB' ICR on
Cecabank S.A. because it did not previously take remedial actions
when required to do so under the terms of the transaction
documents. Due to the high credit enhancement, credit quality of
the assets, and the nature of the swap counterparty, the class A
and B notes can achieve higher ratings when our analysis assumes
there is no swap counterparty present in the transaction and the
ratings are delinked from our long-term ICR on Cecabank. The
class C notes continue to rely on the support of the swap
counterparty and our rating on this class of notes is capped at
our long-term 'BBB' ICR on Cecabank.

"Our European residential loans criteria, as applicable to
Spanish residential loans, establish how our loan-level analysis
incorporates our current opinion of the local market outlook. Our
current outlook for the Spanish housing and mortgage markets, as
well as for the overall economy in Spain, is benign. Therefore,
we revised our expected level of losses for an archetypal Spanish
residential pool at the 'B' rating level to 0.9% from 1.6%, in
line with table 87 of our European residential loans criteria, by
lowering our foreclosure frequency assumption to 2.00% from 3.33%
for the archetypal pool at the 'B' rating level.

"After applying our European residential loans criteria to this
transaction, the overall effect in our credit analysis results is
a decrease in the required credit coverage for each rating level
compared with our previous review, mainly driven by our revised
foreclosure frequency assumptions."

  Rating level     WAFF (%)     WALS (%)

  AAA               21.61       21.45
  AA                15.03       17.04
  A                 11.48       10.32
  BBB               8.64        7.11
  BB                5.70        5.11
  B                 3.39        3.54


S&P said, "Since our previous review, the class A, B, and C
notes' credit enhancement has increased to 16.3%, 9.7%, and 2.4%,
from 14.1%, 8.6%, and 2.1% respectively, due to the sequential
amortization of the notes.

"Following the application of our criteria, we have determined
that our assigned ratings on the classes of notes in this
transaction should be the lower of (i) the rating as capped by
our RAS criteria, (ii) the rating as capped by our counterparty
criteria, or (iii) the rating that the class of notes can attain
under our European residential loans criteria.

"In addition to taking into account the results of our credit and
cash flow analysis and the application of our European
residential loans and RAS criteria, we consider that the stronger
credit quality of the assets and credit enhancement for the class
A notes are commensurate with a 'AA (sf)' rating. We have
therefore raised to 'AA (sf)' from 'AA- (sf)' and removed from
CreditWatch positive our rating on this class of notes.

"The application of our RAS criteria caps our rating on the class
B notes at our unsolicited 'A-' long-term sovereign rating on
Spain. Our rating is no longer capped under our current
counterparty criteria by the swap contract as we have not given
benefit to the swap counterparty in our analysis at rating levels
above our long-term 'BBB' ICR on Cecabank. We have therefore
raised to 'A- (sf)' from 'BBB (sf)' and removed from CreditWatch
positive our rating on this class of notes.

"Our rating on the class C notes is not capped by our RAS
analysis as the application of our European residential loans
criteria, including our updated WAFF and WALS analysis, the
modestly increasing credit enhancement since our previous review,
and the fact that these notes are the most junior class is
commensurate with a 'BB (sf)' rating. This class continues to
rely on the support of the swap counterparty as we have given
benefit to the swap counterparty in our analysis at rating levels
equal or below our long-term 'BBB' issuer credit rating (ICR) on
Cecabank S.A. We have therefore raised to 'BB (sf)' from 'B-
(sf)' and removed from CreditWatch positive our rating on this
class of notes."

AyT Hipotecario Mixto V is a Spanish residential mortgage-backed
securities (RMBS) transaction, which closed in July 2006 and
securitizes first-ranking mortgage loans. Caja General de Ahorros
de Granada (now CaixaBank), Caja de Ahorros y Monte de Piedad de
Navarra (now Bankia), and Unnim Banc (now BBVA) originated the
pool, which comprises loans granted to Spanish residents, mainly
located in Navarra, Andalucia, and Catalonia.

  RATINGS LIST

  Class             Rating
              To              From

  AyT Hipotecario Mixto V, Fondo de Titulizacion de Activos
EUR675 Million Mortgage-Backed Floating-Rate Notes

  Ratings Raised And Removed From CreditWatch Positive

  A           AA (sf)         AA- (sf)/Watch Pos
  B           A- (sf)         BBB (sf)/Watch Pos
  C           BB (sf)         B- (sf)/Watch Pos



===========
S W E D E N
===========


SSAB AB: S&P Hikes Issuer Credit Rating to BB, Outlook Positive
---------------------------------------------------------------
S&P Global Ratings said that it has raised its long-term issuer
credit rating on Swedish steelmaker SSAB AB to 'BB' from 'BB-'.
At the same time, S&P affirmed the 'B' short-term issuer credit
ratings on the company. The outlook is positive.

S&P said, "We also raised our issue ratings on SSAB's senior
unsecured debt to 'BB' from 'BB-'. The recovery rating on this
debt is unchanged at '3', indicating our expectation of
meaningful recovery (50%-70%; rounded estimate: 65%) in the event
of a payment default.

"The upgrade reflects our expectation for credit metrics to
strengthen faster on the back of continued strong end-market
demand. In our view, the current market conditions may soften a
bit in 2019, but will remain favorable compared with 2017. We now
expect SSAB to have an adjusted EBITDA of SEK10 billion in 2018,
compared with the previous assumption of SEK8 billion,
translating into an adjusted FFO to debt exceeding 60% in 2018
and well above 85% in 2019. Moreover, we understand the company
will continue to emphasize strengthening its balance sheet and
the majority of the free cash flow will be allocated to reducing
its reported debt. In our view, the positive trend can support
further rating upside to 'BB+' in the coming 12 to 18 months.

"We view the company's actions over the past few years to reduce
its absolute debt positively, as running the company in the
future with lower debt is a corner stone for the existing rating
and over time may support a higher rating. We understand the
company would like to maintain a robust balance sheet to absorb
the intrinsic volatility of the steel industry.  As of March 31,
2018, the company had a net reported debt of SEK11 billion,
compared with a peak net debt level of SEK25 billion in 2014.
Under our base-case, we expect the company to generate about
SEK4.0 billion of discretionary cash flow in each of the coming
two years, which could dismiss SSAB's net reported debt.
Furthermore, we think that the company will likely stick to its
current dividend policy.

"We continue to view SSAB's business risk profile at the high end
of the weak category, reflecting the company's strong market
share in specific regions and products, but at the same time its
relative weak profitability historically, although it has shown
an upward trend since 2016. We believe SSAB's business risk
profile compares favorably with peers such as US Steel and AK
Steel.

"In response to the industry downturn in recent years, SSAB, like
most steel producers, has focused on efficiency (including
shutting down capacity, lowering the headcounts, and more). We
now expect SSAB to have EBITDA margins of more than 12% in 2018
(compared with EBITDA margins of about 5%-7% during the trough of
the cycle in 2013-2015). That said, the healthy margins cannot be
linked solely to the improvement of the business, and are also
driven by the favorable conditions of the industry. In this
respect, we believe the company will need to take further steps
to improve its resilience through the cycle, namely improving the
portion of special steel and premium products out of total sales
(35% in 2017 of total production). The demand for special steel,
unlike commodity grade steel, is more stable and profitable. That
said, the special steel remains a niche market and requires the
producers to work with the end users on the application of
special steel in their products.

SSAB's key strength is its strong market position in special-
grade steel products. For example, it is a global market leader
(market share of about 40%) in quenched and tempered steels,
along with a 5% market share in some advanced high strength
steels, and around 28% in heavy plates in North America,
according to its own estimates. Following the merger with
Rautaruukki, it also commands about a 40% share of the flat
carbon steels and tubes market in the Nordic region.

Despite the company's position in the North American market, the
company presented fairly weak results in 2017 compared with other
U.S. steel producers. For example, its EBITDA per ton in North
America was about $50 per ton, compared with close to $80 per ton
for US Steel or the North American division of ArcelorMittal. The
company believes the structural change in the plate market in
North America moving to a capacity deficit, should be very
beneficial.

SSAB Europe should see the share of premium products increase to
40% by 2020 driven mainly by automotive take-up, while growth in
the special steels segment will likely come from customer
upgrades, a process that takes longer to bear fruit but will have
a meaningful impact on profitability. On the cost side, the more
than SEK3 billion of cost savings (including workforce
reductions, asset rationalization, and other measures post-Ruukki
merger) provide a good basis for maintaining, if not increasing,
profitability. In S&P's view, challenges for SSAB include the
risk of new specialty grade steel capacity from competitors and
the pace of take-up of special-grade steel products by equipment
manufacturers.

S&P said, "Under our base-case scenario, we expect an adjusted
EBITDA of SEK10 billion for 2018. During 2017, SSAB saw a strong
demand for its products across its key markets (Europe and North
America) and strengthening steel margins, resulting in EBITDA of
about SEK7.8 billion. In the first quarter of the year, the
company reported an adjusted EBITDA of SEK1.9 billion and for the
full year, we forecast a step up in the profitability to be
driven by macroeconomic factors such as a solid GDP growth (2.4%-
3.0%), but also from the company's ability to improve its product
mix (increasing share of special steels and premium products) and
benefits from its past cost optimization efforts. Our forecast
takes into account the strong demand for SSAB's products, higher
utilization rates and margins in the second quarter, as well as
positive market sentiment in the third quarter. In addition, we
understand that some of the price increases that were announced
in the previous quarters in North America will be reflected fully
in the second half of the year. Looking into 2019, we assume
EBITDA of SEK9.5 billion-SEK10 billion."

The positive outlook reflects a further upside for the rating in
the coming 12-18 months, if the current market environment remain
supportive, translating into strong credit metrics and a
reduction in the company's reported net debt.

S&P said, "Under our base-case, with an adjusted EBITDA of
between SEK9.5 billion-SEK10.0 billion in 2018 and in 2019, we
assume our adjusted FFO to debt to be more than 60% in 2018 and
well above 85% in 2019, well above the adjusted FFO to debt of
45%-60% that we consider to be commensurate with the current
rating in the current favorable market conditions (or an adjusted
FFO to debt of more than 30% in a downturn)."

An upgrade would be subject to:

-- Adjusted FFO to debt rising above 60% on average through the
    cycle during supportive or mid-cycle industry conditions, and
    about 45% during the bottom of the cycle.

-- SSAB reducing its adjusted debt level to SEK8 billion or less
    (equivalent to a reported net debt of about SEK4.0 billion).
    S&P said, "Under our base-case, we assume the company would
    be able to reach this target already in 2019. In our view,
    such a debt level would allow the company to maintain a
    robust balance sheet and to absorb potential volatility in
    the market, including a material drop in EBITDA."

S&P said, "In our view, given the current favorable market
conditions and relatively low capex spending, we expect the
company to meet those thresholds already in 2019. In this
respect, we will need to assess the company's ability and
willingness to develop a longer track record.

"Alternatively, we could also consider a higher rating if SSAB
improved its competitive position, turning its business to be
more resilient during downturns than in the past. In our view, a
positive assessment of the competitive position would take into
account the company's ability to present EBITDA margins of more
than 12% in the current market conditions, further improvement in
its product mix towards higher added-value products, and
operational efficiency improvements.

"We could revise the outlook to stable should the current market
conditions be short-lived, and if the company cannot meet the
thresholds for a higher rating in the next 12-18 months, or we
believe the company won't be able to establish a track record of
a robust financial policy over the cycle (if among others:
introduced large scale growth projects and changed its dividend
policy)."


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


FASTJET: Says May Collapse Unless New Funding Secured
-----------------------------------------------------
Rhiannon Curry at The Telegraph reports that African budget
airline Fastjet has warned that it could go bust unless it
secures new funding, knocking more than two-thirds off the value
of its shares in a matter of hours.

According to The Telegraph, the company said that as of June 18,
it had a cash balance of US$3.3 million (GBP2.5 million) and was
talking to its major shareholders regarding a potential equity
fundraising.

"While initial discussions with certain shareholders have been
positive, discussions are ongoing and there can be no guarantee
of a successful outcome," The Telegraph quotes the company as
saying on June 27.

If no new funds emerge, Fastjet, as cited by The Telegraph, said
it might not be "able to continue trading as a going concern" and
could be suspended from trading on London's Aim market.

Fastjet Plc is a British/South African-based holding company for
a group of low-cost carriers that operate in Africa.


NORTHERN ROCK: Band Bank Expects to Finally Wind Down by 2021
-------------------------------------------------------------
Lucy Burton at The Telegraph reports that the state-supported
"bad bank" created to manage the assets of collapsed lenders
Northern Rock and Bradford & Bingley said it expects to finally
wind down by 2021.

UK Asset Resolution (UKAR), formed by the UK Government after the
financial crisis, said it has now shrunk its balance sheet by 83%
or GBP96 billion since it was set up eight years ago, The
Telegraph relates.

According to The Telegraph, the unit said its customer balances
will fall below GBP11 billion this year as it plans to sell a
GBP900,000 portfolio following the sale of GBP5 billion worth of
loans back in April.

As a result, it said it was now "probable" it will offload all of
its assets within three years, subject to market conditions, The
Telegraph notes.


SYNTHOMER PLC: S&P Assigns Prelim 'BB' ICR, Outlook Stable
----------------------------------------------------------
S&P Global Ratings said that it had assigned its preliminary 'BB'
issuer credit rating to London-based chemicals producer Synthomer
PLC. The outlook is stable.

S&P said, "At the same time, we assigned our preliminary 'BB'
issue rating to the proposed EUR300 million senior unsecured
notes and proposed EUR300 million senior unsecured revolving
credit facility. The recovery rating on these instruments is '3'
indicating our expectation of 50%-70% recovery prospects (rounded
estimate 50%) in the event of a payment default.

"Our ratings are preliminary and subject to our review of the
final documentation. Any change in assumptions may result in a
change in the assigned final ratings.

"The rating reflects our view of the proposed capital structure,
with the proposed issuance of EUR300 million senior notes and
about GBP190 million of adjusted EBITDA expected in 2018,
resulting in about 1.7x adjusted debt to EBITDA. In the next few
years, we expect that Synthomer's operating performance will
benefit from its diversified business model, from leading market
shares in some divisions, favorable unit costs for its styrene
butadiene rubber (SBR) and nitrile butadiene rubber (NBR)
chemistries, and from an increasing presence in higher-margin
dispersions and specialty activities. We expect the company will
continue to invest in significant discretionary growth capital
spending (capex) focused on expanding capacity in high growth
NBRs, mainly for the medical sector, and in dispersion products
for construction, adhesives, and paints.

"We therefore expect limited but positive free cash flow in the
coming years. We also expect the company will continue to expand
through acquisitions, based on its recent track record, either
with strategically targeted bolt-on acquisitions, or through a
prudently funded large acquisition. While such an acquisition may
bring strategic benefits, we believe that adjusted debt to EBITDA
could deviate somewhat from our current base case, increasing
from less than the 2.0x (S&P Global Ratings-adjusted) currently
forecast to about 2.0x-3.0x depending on size and funding. This
would remain fully consistent with the company's stated financial
policy, in our view."

Synthomer is a London-based chemicals producer, with an
international footprint across 18 countries, with 25
manufacturing sites. The company reported GBP1.5 billion in
revenues in 2017 and GBP170 million adjusted EBITDA (i.e., about
GBP122 EBITDA per ton). The company has been listed on the London
stock exchange since 1971, with GBP1.8 billion market
capitalization as of June 2018. The business generates most of
its revenues in Europe (60%) and Asia (29%).

S&P views the business as fairly well diversified across four
different chemistries:

-- SBR (31% of revenues), where the company benefits from a
    leading position in a highly concentrated market (33% market
    share). S&P said, "We view this segment as less specialized
    than other parts of the business, due to its high volume, low
    margin nature. However, considering Synthomer's scale and
    favorable cost position in the top quartile, according to
    management, we view the segment's relatively stable margins
    and resilience as positive factors. The segment focuses
    mainly on Europe, and products are mainly for the coated
    paper, packaging, carpets, and foam markets.

-- NBR (16% of revenues), where the company operates as No.2
    globally in a fairly concentrated market (27% market share).
    The products are mainly for the medical industry, for which
    S&P views favorable growth prospects. This chemistry benefits
    from a dedicated site and very large batch reactor in
    Malaysia, hence benefiting from a favorable cost position
    close to end customers, and from strong technical knowhow.

-- Dispersions (26% of revenues) consisting of water-based
    solutions for construction, adhesives, and paints. Synthomer
    benefits from having some of the largest plants in the
    sector, and its leading market position (18% market share).
    S&P views the products as more specialized, benefiting from
    research and innovation; less sensitive to price volatility;
    and more focused on technical merit. Synthomer made its
    biggest recent acquisition in this segment in June 2016 for
    GBP166 million.

-- Specialties (27% of revenues) consisting of a mix of
    unrelated specialty type products, mainly PVC modifiers and
    additives for paints.

S&P said, "Overall, we view the company's profitability as
average, with an 11%-12% EBITDA margin, and relatively resilient
in terms of EBITDA per ton, as compared with raw materials price
volatility. Unit margins have been fairly well protected for
instance in 2017 in a rising price environment, despite having a
mechanical impact on margins as a percentage of revenues. The
company produces both specialty chemicals bringing higher value-
added and market diversity, and high-end commodity or semi-
specialty chemicals with which the company benefits from good
cost position, high scale, and strong market penetration. We also
consider the business as cash generative, in view of its limited
capex requirements (about GBP20 million maintenance), although we
factor in that discretionary investments have been materially
increased as a result of capacity expansion projects, which are
expected to continue in the NBR, adding 60,000-90,000 tons by
2020, and dispersions segments.

"Key risks for the business, in our view, include the relative
size of its main markets, including SBR, NBR, and dispersions,
which are relatively consolidated and subject to possible intense
competition, and the overall size of Synthomer's EBITDA, which is
rather modest in our view. Raw materials concentration,
particularly in the very volatile butadiene and styrene markets,
which together represent 42% of total raw materials, is also a
risk area. This is partly compensated by the company's focus on
efficient sourcing and cost pass-through mechanisms (with average
time lag of one month). We also bear in mind that the company
serves several cyclical end markets, notably construction, as
well as the structurally declining paper end market.

"We view the company's capital structure, with the proposed
EUR300 million senior notes, as relatively conservative,
resulting in adjusted debt to EBITDA of 1.7x in 2018, which is
very strong for the rating, with deleveraging potential over the
next few years as a result of positive free cash flow generation.
This includes ongoing elevated discretionary capex to increase
the capacities in NBR and dispersions, and working capital
outflows in line with the forecast growth in the business and the
commissioning of new lines. Hence, although adjusted debt to
EBITDA and funds from operations to debt exceed the thresholds
for the current rating, we believe the free cash flow and
discretionary cash flow better reflect Synthomer's projected
credit profile.

"The company's stated financial policy also supports the rating
level in our view. It targets about 1.0x-2.0x unadjusted net debt
to EBITDA under mid-cycle market conditions, on a sustainable
basis. This level would not exceed 3.0x according to management
in the case of a large debt-funded acquisition, and would involve
a possible equity increase, as we understand. Management is also
firmly committed to returning this ratio to 2.0x within 12 months
of the acquisition, should such a scenario materialize. We
believe continued external growth is likely and we factor in
modest bolt-on acquisitions in our base case, although we do not
consider they would have more than a limited impact. However, we
also factor in flexibility for the structure to support a
potentially larger business add-on.

"The stable outlook reflects our expectation that Synthomer
should show profit resilience in the coming years, supported by
modest diversity, favorable market positions, and organic -- and
potentially inorganic -- growth. This is balanced against the
high discretionary growth capex out of free cash flow. We expect
this capex will increase capacities and result in adjusted debt
to EBITDA that we think will remain strong for the rating, at or
slightly less than 2.0x. We nevertheless factor in flexibility
for the stated financial policy leverage target, as well as,
importantly, the possibility of a larger debt-funded acquisition.

"Rating upside may arise from a tightened financial policy, such
that the company would maintain less than 2.0x adjusted debt to
EBITDA, which we think is realistic, given the current
conservative capital structure. However, we think the current
rating is consistent with management's leverage target and the
risk of carrying higher debt in the case of a large acquisition.
Rating upside would also appear along with an extended track
record of resilient operating performance."

Pressure on the rating would arise from lower-than-expected free
cash flows, either from unexpectedly high capex or from earnings
volatility stemming from butadiene or styrene price swings or
lost market share in one of the key NBR, SBR, or dispersions
markets. S&P could also take a negative rating action in case of
a much larger debt-funded acquisition, or a material deviation in
financial policy.


WAVES: Cancels Flights for Two Months After License Problems
------------------------------------------------------------
BBC News reports that flights have been cancelled by Waves for
two months after a "tumultuous" first year in operation.

The airline, which launched in Guernsey at the start of 2017,
will not resume flying until Sept. 1, BBC discloses.

According to BBC, the "Uber-style" company said passengers with
bookings during the cancellation period would be getting refunds.

Nick Magliocchetti, founder of the firm, said its momentum had
been "damaged" after a judicial review last year limited the way
seats could be booked, BBC notes.

The airline originally sold individual seats on its aircraft as
an "air-taxi service", believing it was exempt from licensing
regulations, BBC relays.

However, after complaints from competing airline Blue Islands,
Waves had to move to a "whole-aircraft charter service" for four
months while its route license application was processed by
Guernsey's Transport Licensing Authority, BBC recounts.

The airline resumed selling individual seats when their
application was approved in April, BBC relates.

"[It] ultimately had a detrimental effect on the business, our
staff and our customers", BBC quotes Mr. Magliocchetti as saying.


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


* Eurogroup Head Seeks to Examine Debt Restructuring Process
------------------------------------------------------------
NEOnline reports that Eurogroup President Mario Centeno will seek
a mandate to define the process of sovereign public debt
restructuring.  His announcement came after the publication of a
letter addressed to European Council President Donald Tusk ahead
of the EU Summit on June 28-29, NEOnline notes.

In making the announcement, Centeno proposed a restructuring
process based on new issuance of single-limb Collective Action
Clauses to prevent holdouts, NEOnline relays, citing Reuters.

According to NEOnline Italy's Finance Minister Giovanni Tria and
the former chief economist at Italy Treasury Department, Lorenzo
Codogno opposed the proposal, with the latter calling the move "a
bombshell," as it could encourage investors to bet on a
forthcoming restructuring process and trigger a rise in sovereign
bond yields.



                            *********

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
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Information contained herein is obtained from sources believed to
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                 * * * End of Transmission * * *