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

                           E U R O P E

          Tuesday, October 16, 2018, Vol. 19, No. 205


                            Headlines


F R A N C E

DELACHAUX GROUP: Moody's Assigns B2 CFR, Outlook Stable


G E R M A N Y

P&R: Unnamed Investor Seeks Damages From BaFin


H U N G A R Y

NITROGENMUVEK ZRT: S&P Cuts Long-Term ICR to 'B-', Outlook Stable


I R E L A N D

EIRCOM HOLDINGS: Fitch Affirms B+ LT IDR, Outlook Stable


I T A L Y

ALITALIA SPA: Italy May Own 15% Stake of Relaunched Business
ITALY: Tria Says Gov't Bond Yields Not Justified by Fundamentals
WIND TRE: S&P Affirms BB- Issuer Credit Rating, Outlook Stable


L I T H U A N I A

MAXIMA GRUPE: S&P Assigns BB+ Long-Term ICR, Outlook Stable


L U X E M B O U R G

PUMA INT'L: Moody's Affirms Ba2 Sr. Unsecured Notes Rating


N E T H E R L A N D S

CREDIT EUROPE: Fitch Affirms BB- LT IDR, Outlook Stable
STEINHOFF INTERNATIONAL: Seeks Extension of Lock-Up Agreement


P O R T U G A L

LUSITANO MORTGAGES NO. 3: S&P Affirms B- Rating on Cl. D Notes


R U S S I A

KEMEROVO: Fitch Revises Outlook & Then Withdraws BB-/B IDRs
NOVOROSSIYSK COMMERCIAL: S&P Puts 'BB-' ICR on Watch Positive


T U R K E Y

MANISA METROPOLITAN: Fitch Affirms BB/BB+ LongTerm IDRs


U N I T E D   K I N G D O M

CAPRI ACQUISITIONS: Moody's Affirms B3 CFR, Outlook Stable
CAPRI ACQUISITIONS: S&P Affirms 'B-' ICR, Outlook Stable
GOURMET BURGER: Moves Closer to Launching Formal CVA, Reports Say
PATISSERIE VALERIE: "Business as Normal" Following Rescue Package


                            *********



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F R A N C E
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DELACHAUX GROUP: Moody's Assigns B2 CFR, Outlook Stable
-------------------------------------------------------
Moody's Investors Service has assigned a B2 corporate family
rating and a B2-PD probability of default rating to Delachaux
Group S.A. Concurrently, Moody's has assigned a B2 rating to the
group's senior secured term loans, borrowed by Delachaux: the
EUR386 million TL-B1, the EUR187 equivalent USD-denominated
TL-B2, the EUR65 million equivalent GBP-denominated TL-B3
(outstanding amounts), and the EUR75 million senior secured
revolving credit facility. The outlook is stable. This is the
first time Moody's has assigned ratings to Delachaux.

RATINGS RATIONALE

Delachaux's B2 CFR reflects the group's dominant niche market
positions in its core rail activities and in conductic and
chromium businesses with a relatively stable and solid earnings
profile (Moody's-adjusted EBITA margins averaging around 13% over
2013-2017). The group has a large proportion of recurring
revenues, relatively good lead times on new contracts in its rail
fastening and rail welding businesses, high barriers to enter
these markets, but also a largely variable cost base. This,
combined with low capex requirements have enabled the group to
generate sustained positive free cash flows (FCF) in the past
(EUR43 million on average on a Moody's-adjusted basis in 2015-
2017) and which Moody's expects to remain positive in the short
to medium-term.

Factors constraining Delachaux's ratings relate to a degree of
cyclicality, but even in a relatively sharp downturn Moody's
expects that the group should be able to generate positive FCF as
it did back in 2009. Another rating constraint represents the
group's highly leveraged capital structure with a Moody's-
adjusted debt/EBITDA ratio of 5.9x for the 12 months ended June
2018. That said, the assigned B2 rating and stable outlook also
incorporate Moody's expectation that there will be no material
increase in leverage or change in Delachaux's capital structure
after the proposed acquisition of CVC Capital Partners' stake in
the Delachaux group by Caisse de depìt et placement du Quebec
(CDPQ), which was announced in June 2018 and is expected to close
in the next few months. Challenges for the group further pose its
exposure to short-term headwinds from higher input costs as seen
in recent months, due to the time lag of pass-through of price
increases to customers, as well as (translational) foreign
exchange risk given a high share of revenues generated in non-
euro currencies (e.g. British pound, US dollar, Chinese yuan).

Moody's expects Delachaux's management to adhere to a balanced
financial policy in the future, although regular dividend
payments following the proposed acquisition cannot be ruled out
at present.

LIQUIDITY

Delachaux's liquidity is solid. Available cash sources as of June
30, 2018 comprised EUR152 million of cash on balance sheet as
well as an undrawn EUR75 million revolving credit facility with
sufficient covenant headroom. These liquidity sources and
expected funds from operations (FFO) provide the group with an
ample cushion to cover expected working-capital spending, capex
and minor scheduled debt repayments. Moody's would also expect
the group to maintain sufficient cash on its balance sheet for
day-to-day cash needs such as for seasonal working capital
swings.

STRUCTURAL CONSIDERATIONS

The EUR638 million senior secured term loans (outstanding as of
June 30, 2018) and the EUR75 million revolving credit facility
are issued by Delachaux and certain of its subsidiaries and
guaranteed by all material subsidiaries. Combined, these must
represent at least 80% of the group's consolidated EBITDA.
Security is provided in the form of shares of all material
subsidiaries as well as material bank accounts, intercompany
receivables and other material assets of material subsidiaries
incorporated in France, England, Germany, Delaware and New
Jersey. According to Moody's Loss Given Default (LGD) analysis,
the senior secured facilities are rated in line with the
corporate family rating at B2, reflecting that Moody's does not
differentiate priority of claims in this capital structure.
Considering the financial covenants are not constraining the
financial flexibility, the recovery in case of default is
modelled as 50%, hence a PDR at B2-PD.

RATING OUTLOOK

The stable outlook reflects the solid rating positioning in the
B2 category and Moody's expectation of a sustained benign rail
market environment in which the group operates. This should
support leverage remaining below 6.5x Moody's-adjusted
debt/EBITDA and continued positive FCF generation, whilst
assuming a balanced financial policy following the pending
acquisition.

WHAT COULD CHANGE THE RATINGS UP/DOWN

Positive rating action is likely where the group demonstrates its
commitment to deleverage to below 5.5x Moody's-adjusted gross
debt/EBITDA on a sustainable basis, which appears as achievable
over the next couple of years. Moody's would also expect FCF/debt
to remain around the mid-single digit range, market positions in
rail fastening or welding to remain at current dominant levels
with no material reduction in the level of maintenance revenues
seen in 2017. Moreover, Moody's would expect EBITDA margins to
remain above 12% on a sustainable basis.

Negative rating action, though unlikely at this point in the
absence of more aggressive financial policy actions, could be
driven by Moody's-adjusted gross debt/EBITDA consistently
exceeding 6.5x or where, including material dividend payouts, the
group would generate consistently negative free cash flow. Signs
of a material weakening in its core market positions with a
deterioration in EBITA margins to below 10% may also exert
downward pressure on the rating as indicative of fiercer
competition and/or pricing pressure.

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Global
Manufacturing Companies published in June 2017.

Delachaux Group S.A. was initially founded in 1902 by the
Delachaux family with operations primarily in rail
infrastructure. The company generated EUR841 million of revenues
and EUR127 million of reported EBITDA in 2017. The Rail
Infrastructure division represented the group largest division in
terms of group revenues in 2017 (57%), while the Diversified
Industrials division, comprising Energy and Data Transmission
Systems, Chromium Metal and Magnetism product lines, accounted or
a 43% revenue share in 2017. Currently, the main two shareholders
are (i) Ande Investissements, controlled by the Delachaux family
(49.89% stake), and (ii) Financiere Danube, controlled by funds
advised by affiliates of CVC Capital Partners Limited (49.89%).
In June 2018, the company has announced that Caisse de depìt et
placement du Quebec (CDPQ) agreed to buy CVC Capital Partners
stake in the Delachaux Group.



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G E R M A N Y
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P&R: Unnamed Investor Seeks Damages From BaFin
----------------------------------------------
According to Bloomberg News' Lukas Strobl, Der Spiegel, citing
attorney Wolfgang Schirp, reports that an unnamed investor in
bankrupt German container leasing firm P&R is seeking damages
from The Federal Financial Supervisory Authority or BaFin,
Germany's financial market regulator.

Bloomberg relates that "many more" claims from investors could
follow.

The lawsuit alleges that P&R prospectuses wrongly received BaFin
approvals, Bloomberg discloses.

Bafin counters that it checks prospectuses for coherence and
completeness, not economic viability, Bloomberg notes.

Creditors will hold its first meeting in Munich this week,
Bloomberg states.



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H U N G A R Y
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NITROGENMUVEK ZRT: S&P Cuts Long-Term ICR to 'B-', Outlook Stable
-----------------------------------------------------------------
S&P Global Ratings lowered to 'B-' from 'B' its long-term issuer
credit rating on Hungary-based nitrogen fertilizer producer
Nitrogenmuvek Zrt. The outlook is stable.

S&P said, "At the same time, we lowered to 'B-' from 'B' our
issue rating on the EUR200 million euro-denominated fixed-rate
notes due 2025 and issued by Nitrogenmuvek.

"The downgrade reflects Nitrogenmuvek's weak operating
performance so far this year, leading us to significantly revise
our forecasts. We now expect S&P Global Ratings-adjusted debt of
EBITDA of above 10.0x and funds-from-operations (FFO) to debt of
less than 5% in 2018, recovering to about 6.5x-7.0x and about
10%, respectively, in 2019. This is in contrast with our previous
expectations in May of adjusted debt to EBITDA below 6.0x and FFO
to debt of about 12%, in both 2018 and 2019."

Following a weak 2017, Nitrogenmuvek's EBITDA declined to HUF4.3
billion in the first half of 2018, from an already low HUF6.8
billion over the same period in 2017. This was because of a sharp
increase in European natural gas prices, combined with lower
nitrogen fertilizer prices (in particular, calcium ammonium
nitrate prices) due to lower volumes thanks to unexpected adverse
weather conditions in Europe and a 13-day outage at
Nitrogenmuvek's ammonia plant.

S&P said, "We expect Nitrogenmuvek's credit metrics will
gradually recover, although at a much slower rate than we
previously expected, with debt to EBITDA improving to about 6.5x-
7.0x and FFO to debt to 9%-10% in 2019. We anticipate that
volumes will recover in the fourth quarter of 2018 and the first
quarter of 2019, from the very low level seen in the second and
third quarters of this year. This is because the demand for
nitrogen fertilizers in the company's key markets in Central and
Eastern Europe remains robust, despite temporary seasonal swings.
Furthermore, in the third quarter of 2018, pricing started to
increase in the European market. We expect this will continue
into 2019, supported by the gradual passing on of a substantial
increase in natural gas prices to customers, especially after the
stocks produced under lower gas costs are sold out in the
European market. However, we expect gas prices will increase
further in 2019, continuing to suppress margins."

The downgrade also factors in the high uncertainty surrounding
the pace of the company's deleveraging over the next two years.
This will be subject to multiple factors, such as natural gas
price development in Europe, nitrogen fertilizer pricing, which
is driven by the still fragile supply-demand balance in the
European market and unexpected adverse weather conditions, which
are outside the company's control.

S&P said, "Nevertheless, we note that the substantial reduction
in capital expenditures (capex), after completion of the
extensive investment program in 2017, will contribute to
moderately positive free operating cash flow (FOCF) generation
from 2019. In addition, we understand that the company's
financial policy remains prudent, in particular with respect to
dividend payment.

"Our assessment of Nitrogenmuvek's business risk profile
continues to reflect its relatively small size compared with that
of peers, its highly concentrated asset base (with one single
production site in Hungary), limited product, geographic
diversification, highly volatile earnings and profitability, and
exposure to the cyclical fertilizer market. Partly offsetting
these constraints are the company's dominant market position in
Hungary, with an over 70% market share and a favorable cost
position, especially in the domestic market, thanks to low
transportation costs and its extensive distribution network.

"The stable outlook reflects our expectation that Nitrogenmuvek's
credit metrics will steadily improve on the back of a moderate
increase in average fertilizer prices in 2019, as demand rises.
The outlook also factors in our expectation that Nitrogenmuvek
will maintain adequate liquidity, and generate moderate positive
FOCF from 2019, supported by the substantial reduction in capex
since the extensive investment program was completed in 2017.

"We could lower the rating if Nitrogenmuvek's operating
performance did not improve in 2019 in line with our base-case
scenario, thus leading to continued negative FOCF and EBITDA
interest coverage below 1.5x. This could result from a much
higher-than-expected increase in European gas prices, a further
decline in fertilizer prices, or a significant fall in production
(except for planned maintenance outages). While we believe that
the company has significantly reduced refinancing risk following
the bond issue in May 2018, any unanticipated pressure on
liquidity could also put pressure on the rating.

"We could raise the rating if we observed a sustained improvement
in Nitrogenmuvek's adjusted EBITDA to at least HUF13 billion-
HUF14 billion, translating into adjusted debt to EBITDA of
sustainably below 6x and an EBITDA interest coverage ratio of
over 2.5x. A potential upgrade could also hinge on Nitrogenmuvek
developing a track record of recurring positive FOCF generation."



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I R E L A N D
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EIRCOM HOLDINGS: Fitch Affirms B+ LT IDR, Outlook Stable
--------------------------------------------------------
Fitch Ratings has affirmed Irish telecom incumbent eircom
Holdings (Ireland) Limited's Long-Term Issuer Default Rating at
'B+' with Stable Outlook and senior secured ratings at 'BB-' with
a Recovery Rating 'RR3'.

The ratings of eir reflect its limited deleveraging over the past
two years due to high capital intensity and significant
restructuring costs. Fitch expects capex to remain high as eir
aims to significantly roll out fibre-to-the-home network
technology over the next five years.

The ratings also reflect eir's position as the leading telecoms
operator in a competitive Irish market. Fitch believes the recent
change in ownership is broadly positive given the strategic focus
on customer service, network investment and cashflow generation,
albeit with execution risks. In the medium-term, growing EBITDA
from stabilising revenue and a lower cost base with declining
restructuring costs should increase eir's deleveraging capacity.

KEY RATING DRIVERS

Ownership Change Broadly Positive: In April 2018, Xavier Niel-run
entities NJJ and Iliad acquired a 64.5% stake in eir. The likely
emphasis on operational efficiency in line with Niel's track
record in other countries is broadly positive for eir's ratings.
This is evident in a 25% voluntary staff reduction, which should
yield a low single-digit improvement in eir's EBITDA margin. The
new management team are also planning significant process
simplification and IT improvements, together with customer
service and network investment. These changes over the next two
to three years should improve eir's financial performance, but
there are significant execution risks in achieving these
ambitious plans.

Competitive Irish Market: eir continues to defend its market
position amid intense competition. In the financial year to June
2018, underlying revenue fell 2%, while EBITDA increased 2%. The
company's convergence strategy has underpinned the introduction
of higher-value customer bundles, with 29% of eir's customers on
a triple/quad play bundle. The quality of eir's mobile subscriber
base is improving with 52% of eir's mobile customer base now on a
post-paid contract. Fitch expects average revenue per user (ARPU)
to gradually improve in the next two years given the emphasis on
higher value products, continued fibre take-up, and general Irish
macroeconomic improvement.

FCF Generation to Improve: Personnel cost reduction, among other
things, is expected to support margin expansion into FY19. Funds
from operations (FFO) adjusted net leverage has historically been
constrained by substantial cash restructuring costs and high
capital intensity. Over the next three years, growing EBITDA from
stabilising revenue and a lower cost base with falling
restructuring costs should increase free cashflow (FCF) and
therefore eir's deleveraging capacity.

Network Investment: eir has invested heavily in its fibre network
and LTE mobile deployment (96% population coverage as at June
2018) over the past few years to become Ireland's leading fibre
and fixed-mobile convergence network. The company's fibre network
(mainly fibre to the cabinet) at end-June 2018 passed 1.8 million
premises (76% of Irish premises) and connected 635,000 customers,
at a customer penetration rate of 36%.

FTTH Roll-Out Plans: eir intends to rollout FTTH technology more
extensively into urban areas, challenging Virgin Media's cable
offering. This project will be part of a wider EUR1 billion
investment plan spread over five years, and Fitch expects capex
to remain at around 23%-24% of revenue until FY22. Fitch believes
that this will help to cement eir's position as the leading fixed
network provider in Ireland, and help it to improve its broadband
market share and ultimately grow revenue. In its view, eir's
withdrawal from the National Broadband Plan (NBP) is neutral for
the company's rating given that expected winners, such as, enet
are likely to rely on eir's infrastructure to meet its NBP
obligations.

DERIVATION SUMMARY

Relative to its European telecoms incumbent peers, such as Royal
KPN N.V (BBB/Stable) eir has higher leverage, a smaller size, and
the lack of leadership in the mobile segment. Its EBITDA margin
is similar to peers', but pre-dividend FCF margin has
historically been lower due to higher capex as a percentage of
revenue and cash restructuring costs. Leveraged peers include
Wind Tre SpA (B+/Stable standalone) and DKT Holdings ApS
(B+/Stable), with eir maintaining higher margins than Wind but in
line with DKT and displaying better potential deleveraging
capacity than both peers.

KEY ASSUMPTIONS

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

  - Revenue to decline 3.1% in FY19, followed by gradual
    stabilisation

  - EBITDA margin to increase to 45.5% in FY19 due to the
    voluntary redundancy programme

  - Capex at of around 23%-24% per year of revenue until FY22

  - No significant dividend payments

  - No M&A transactions

Key Recovery Rating Assumptions

The recovery analysis assumes that eir would be considered a
going concern in bankruptcy and that the company would be
reorganised rather than liquidated. Fitch has assumed a 10%
administrative claim in the recovery analysis.

eir's recovery analysis assumes a post-reorganisation EBITDA 25%
below FYE18's.

For its recovery analysis, Fitch applies a distress enterprise
value multiple of 5.0x, which is comparable with peers and
reflects a conservative mid-cycle multiple.

Fitch assumes fully drawn revolving credit facilities (RCF) in
its recovery analysis as super senior, given the likelihood it
will be tapped during financial distress.

RATING SENSITIVITIES

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

  - FFO adjusted net leverage expected to remain at or below 4.5x
    on a sustained basis when combined with

  - FCF margin expected to be consistently in the mid single
    digits, with ongoing revenue stability and EBITDA improvement

  - Strengthened operating profile and competitive capability
    demonstrated by stable fixed broadband market share with
    increasing fibre penetration and mobile market share

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

  - FFO adjusted net leverage above 5.0x on a sustained basis

  - Weaker cashflow generation with FCF margin expected to remain
    in the low single digits, driven by lower EBITDA or higher
    capex

  - Deterioration in the regulatory or competitive environment
    leading to a material reversal in positive operating trends

LIQUIDITY

Adequate Liquidity: Liquidity at end-June 2018 was supported by
EUR197 million of cash, an undrawn EUR150 million RCF maturing in
2022 and forecasted positive pre-dividend FCF of EUR60 million-
EUR130 million over the next four years. eir's first large debt
maturity is in 2022.

FULL LIST OF RATING ACTIONS

Eircom Holdings (Ireland) Limited

  - Long-Term Issuer Default Rating affirmed at 'B+'; Stable
    Outlook

Eircom Finco S.a.r.l.

  - Senior secured long-term rating affirmed at 'BB-'/'RR3'

Eircom Finance Designated Activity Company

  - Senior secured long-term rating affirmed at 'BB-'/'RR3'



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I T A L Y
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ALITALIA SPA: Italy May Own 15% Stake of Relaunched Business
------------------------------------------------------------
Stephen Jewkes, Alberto Sisto and Tracy Ruciski at Reuters report
that Deputy Prime Minister Luigi Di Maio said on Oct. 12 Italy
could hold around 15% of a relaunched Alitalia, with the new
company having up to EUR2 billion (US$2.3 billion) of capital.

"If France has 14.3% of Air France . . . we can imagine a similar
level of participation (in Alitalia)," Mr. Di Maio, as cited by
Reuters, said in an interview with financial daily Il Sole 24
Ore.

He said the initial capital for the flagship carrier would be
between EUR1.5 billion and EUR2 billion and the new company would
have to "purify itself of everything that has not worked until
now", Reuters relates.

Alitalia was put under special administration last year and Rome
has since been looking for a buyer, Reuters recounts.  The sale
was supposed to be concluded by April, but the deadline was moved
to the end of October due to a general election in March and a
change of government, Reuters notes.

According to Reuters, Mr. Di Maio, who is also industry minister,
said the Italian railways -- Ferrovie Dello Stato (FS) -- and one
or more international industrial partners would also be
investors.

Italian state lender Cassa Depositi e Prestiti could help fund
the acquisition or hiring of a new fleet of planes, Reuters
relays.

Mr. Di Maio forecast a binding offer, or a serious expression of
interest, for Alitalia will arrive by end of the month, Reuters
discloses.


ITALY: Tria Says Gov't Bond Yields Not Justified by Fundamentals
----------------------------------------------------------------
Alessandro Speciale and Lorenzo Totaro at Bloomberg News report
that Finance Minister Giovanni Tria said the level reached by
Italian government bond yields following the announcement of the
2019 budget plan is not justified by fundamentals and he expects
them to fall to avoid negative effects on the country's lenders.

"We hope that, as the content and spirit of our budget are better
understood, the spread will fall," Bloomberg quotes Mr. Tria as
saying on Oct. 12 on the sidelines of the G-20 Finance summit.
He was commenting on the yield difference between Italian and
German 10-year bonds that last week widened to a five-year high,
Bloomberg notes.

The Italian debt average "maturity is high so it takes a long
time for volatility, for a temporary shock of the spread to fully
translate into higher debt costs.  Clearly the impact on banks
can be more immediate and so we hope to work to reduce this
spread," Mr. Tria, as cited by Bloomberg, said.

With about EUR375 billion (US$433 billion) in holdings of Italy's
government bonds, the nation's lenders are reeling from the
impact on their capital levels due to soaring yields, Bloomberg
discloses.

The finance chief described next year's budget, including a
target of deficit at 2.4% of economic output, as "clearly
expansionary but prudent," adding that it will favor a reduction
of the debt ratio to gross domestic product, Bloomberg relays.

On Oct. 12, investors demanded higher interest at the Italian
Treasury's auction of 3-, 7- 15- and 20-year bonds, Bloomberg
recounts.  The sale took place after Fitch Ratings said that
Italy's budget-deficit target for next year underscores fiscal
risks looming over one of the euro area's most indebted
economies, Bloomberg notes.

"For now, refinancing keeps flowing, auctions are carried out
regularly, clearly with higher yields, but I don't see investors
retreating," Mr. Tria, as cited by Bloomberg, said, speaking
alongside Bank of Italy Governor and European Central Bank
governing council member Ignazio Visco.  The minister also said
that he met with the European Commissioner for Economic Affairs
Pierre Moscovici and that the dialogue with Brussels on the
budget is "constructive."

Earlier this month, Mr. Moscovici told Mr. Tria in a letter that
Rome's fiscal targets are a "source of serious concern" as they
"point to a significant deviation from the fiscal path" commonly
agreed to by EU governments, Bloomberg relates.


WIND TRE: S&P Affirms BB- Issuer Credit Rating, Outlook Stable
--------------------------------------------------------------
S&P Global Ratings affirmed its 'BB-' long-term issuer credit
rating on Italian mobile operator Wind Tre S.p.A. and on its
wholly owned subsidiary, Wind Acquisition Finance. The outlook is
stable.

S&P said, "At the same time, we affirmed our 'BB-' issue rating
on Wind Tre's senior secured debt. The recovery rating on the
debt is '3', reflecting our expectation of a meaningful recovery
(50%-70%; rounded estimate 65%) in the event of a default.

"We also removed the ratings from CreditWatch with positive
implications, where we initially placed them on July 9, 2018,
following the announcement by CK Hutchison Holdings Ltd.
(Hutchison; A/Stable/--) that it would buy the remaining 50%
stake in the company, thereby becoming its 100% owner.

"The rating affirmation follows Hutchison's acquisition of the
remaining 50% of Wind Tre, and reflects that our assessment of
the likelihood of potential future parental support remains
unchanged at this stage, translating into a one-notch uplift from
Wind Tre's stand-alone credit quality.

"We do expect Hutchison's full ownership and a stable shareholder
structure will result in additional operational benefits for Wind
Tre, and we note that Wind Tre will account for a sizeable part
of the group's consolidated earnings (about a fifth of pro forma
EBITDA). That said, we are unlikely to revise our assessment of
potential future parental support until Wind Tre establishes a
longer track record of effectively and successfully confronting
the Italian mobile market's very challenging conditions, and,
longer term, addressing future refinancing needs. The operational
rebound would in turn involve completing ongoing modernization of
its network (involving capital expenditures [capex] of EUR1.4
billion on average in 2018-2019) and slowing the rapid pace at
which its retail customer base is shrinking. Our assessment also
factors in our understanding that Hutchison's investment strategy
aims to maintain Wind Tre as a self-funding, self-standing
subsidiary, and the currently demanding market conditions.

"We believe that the market environment has deteriorated over the
past few months, due to very aggressive price offers and the
stronger-than-expected commercial success of the new entrant
Iliad, leading us to lower our assessment of Wind Tre's business
risk profile. Within about three months after entering the
market, Iliad had seized two million customers in a market of
about 83 million SIM cards and we assume its market share will
approach 10% by 2020. Iliad's performance is putting additional
pressure on Wind Tre's retail mobile-subscriber base, which we
anticipate could decrease by more than 20% cumulatively by year-
end 2020. We also factor into our assessment the hefty outlays
and execution time still needed to complete network
modernization, a critical requirement for helping strengthen Wind
Tre's commercial positioning and its customer mix and retention."

With an about one-third share of customers in the Italian market,
Wind Tre is the largest mobile operator in the country, ahead of
Telecom Italia and Vodafone (each with an about 25% market
share), Iliad, and a few mobile virtual network operators.
However, Wind Tre is heavily exposed to Iliad's market entry,
reflecting its positioning in the low-to-mid price range segment
of the mobile market, and Vodafone's and Telecom Italia's overall
stronger networks. S&P thinks that Wind Tre's market share will
drop toward 27% by 2020 reflecting Iliad's rapid commercial ramp-
up and some lingering customer loss to other competitors in a
fiercely price competitive market. The entry of Iliad has
triggered a number of initiatives from Wind Tre's competitors
seeking to better protect themselves from the new player, and has
led to disruptive price behaviors and a spike in customer churn
in the mobile market. Therefore, it is difficult to gauge at this
stage to what extent, and by when, Wind Tre's network
modernization will allow it to better retain customers and
stabilize its retail revenues.

S&P said, "Nevertheless, we think that the pace of decline in
Wind Tre's mobile-subscribers base will decelerate from 2020,
because the quality of its network will improve. The company is
currently rolling out a structural network upgrade and merger
program, involving radio equipment renewals and radio sites
network optimization. This should help to improve network quality
and perception compared with Vodafone and Telecom Italia, and its
customer mix.

"In addition, we believe that aggressive cost cutting (including
an additional EUR200 million savings to be reaped in 2018-2019,
which together with already realized synergies will contribute to
achieving the company's EUR490 million operating expense
synergies target) and strong, albeit temporary, roaming revenues
recieved from Iliad, peaking in 2019-2020 and representing a
critical buffer, will result in stable or slightly increasing
absolute EBITDA in 2019. This is because we estimate that the
ramp-up in roaming revenues, propelled by Iliad's rapidly
increasing customer base, will offset the decline in Wind Tre's
retail customer base next year. Critically, we also think that
Wind Tre will consistently generate positive free operating cash
flow (FOCF) before spending on frequencies (EUR517 million
outlays staggered over 2018-2022 for the recently acquired 5G
spectrum), reaching a low of EUR100 million-EUR150 million in
2019 and rebounding toward EUR300 million from 2020. This stems
from our assumption that Wind Tre will post EBITDA margins in the
high thirties over 2018-2020 thanks to active cost cutting and
roaming benefits, an assumed 24% decline in investments after a
peak of EUR1.5 billion (close to 30% of sales) in 2019, and the
company's low average cost of debt of 2.7%.

"Lastly, we believe that Wind Tre's sole shareholder will likely
be instrumental in maintaining a tight focus on the company's
profitability and positive FOCF generation, and debt reduction.
We believe that Hutchison will provide ongoing managerial
support, and maintain execution discipline and a strategy aimed
at better monetizing its network once the upgrade is complete."

After 2019-2020, however, visibility on EBITDA is limited. On the
one hand, roaming revenues are likely to gradually decline
because Iliad will likely seek to rapidly build its own radio
access network. On the other hand, Wind Tre's stronger network
should help to increase its customer retention and improve the
customer mix. Furthermore, Wind Tre's EBITDA trend will also
depend on whether the now four-operator market remains as
intensely price competitive.

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

-- Around 20% total contraction of the mobile subscriber base by
    2019, compared with end-2017, itself stemming from the
     ramping-up of the new mobile entrant Iliad and some
     persisting customer loss to other competitors;

-- Total revenues including roaming dropping by 13% year on year
     in 2018 and by 3%-4% in 2019 because the sharp rise in
     roaming revenues in 2019, on the back of Iliad's rapid
     commercial ramp-up, provides a strong buffer; in 2020, S&P
     foresees a potential decline of more than 5%, assuming the
     roaming revenues start to decrease, assuming still very
     difficult  market conditions;

-- An overall reported EBITDA after cost synergies and roaming
    revenues declining by 8% in 2018 and slightly increasing in
    2019 due to the higher roaming buffer, leading to an average
    reported margin of 38%-39%;

-- A relatively stable S&P Global Ratings-adjusted EBITDA (after
    integration costs) of EUR2.2 billion in 2018, thanks to
     materially lower integration costs (about EUR150 million,
     down from EUR266 million in 2017) and a higher operating-
     lease adjustment (EUR269 million, up from EUR235 million in
     2017), and the wholesale revenues ramp-up; stable adjusted
     EBITDA again in 2019, reflecting further increasing roaming
     revenues offsetting the impact of lower retail revenues; for
     2020, adjusted EBITDA could resume its decline, assuming
     persistent top-line pressure, but this would also depend on
     any new cost measures;

-- Capex of EUR1.4 billion on average in 2018-2019; in 2020
    investments would fall to EUR1.1 billion as the upgrade nears
    completion;

-- 5G spectrum payments of EUR0.2 billion over 2018-2020; and

-- No dividend distribution.

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

-- Reported net senior debt leverage increasing to 4.9x in
    December 2018 from 4.5x in June 2018, reducing somewhat to
     4.8x in 2019, and possibly increasing again to more than 5x
     in 2020 as the benefits from the roaming inflows diminish.

-- Adjusted debt (including EUR1.8 billion of shareholder loans,
    and net of cash balances) to EBITDA (after restructuring
     costs) of about 5.9x (5.1x excluding the shareholder loans)
     in 2018, 5.7x (4.9x) in 2019, and potentially rising to more
     than 6x (5x) in 2020.

-- Adjusted funds from operations (FFO) to debt of 12%-14% in
    2018-2020.

-- Reported FOCF (before 5G spectrum spending) of about EUR200
     million in 2018, declining to EUR100 million-EUR150 million
     in 2019, before rebounding toward EUR300 million in 2020 as a
    result of fewer investments.

-- Adjusted FOCF (before 5G spectrum spending) to debt
   (excluding the shareholder loans) of about 4% in 2018, 3% in
    2019, and rebounding toward 5% thereafter.

S&P said, "The stable outlook reflects our view that the
challenges faced by Wind Tre, such as the shrinking retail EBITDA
and client base, heavy investments, and the network upgrade, are
mitigated by our anticipation of a considerable cushion over
2019-2020 resulting from wholesale roaming revenues, and ongoing
management support and execution discipline fostered by
Hutchison.

"It also factors in our expectation of consistently positive FOCF
before spectrum costs of EUR100 million-EUR150 million in 2019,
rebounding to EUR300 million thereafter, translating into S&P
Global Ratings-adjusted leverage of 5.9x-5.7x (5.1x-4.9x
excluding the shareholder loans) over 2018-2019 and FOCF to debt
(excluding shareholder loans and before spectrum) strengthening
toward 5% after 2019.

"We could lower our rating if the underlying EBITDA decline was
sharper than we expected in 2018-2019, or if the network upgrade
encountered any setback or proved insufficient to better confront
competition from 2019 and to reduce the pace of decline in the
mobile-subscriber base.

"We could also lower the rating should we increasingly expect
that EBITDA, after the beneficial roaming ramp-up effect in 2019,
could fall materially in 2019-2020, leading to an S&P Global
Ratings-adjusted leverage meaningfully above 6x (5x excluding
shareholder loans), preventing FOCF to debt (excluding
shareholder loans and before spectrum) strengthening toward 5%
after 2019.

"We could raise the rating if the company's operating performance
meaningfully improved, leading to an S&P Global Ratings-adjusted
ratio of debt to EBITDA falling toward 5.0x (4.2x excluding
shareholder loans) and FOCF to debt above 5.0%.

"We could also raise the rating if we believed Wind Tre's
importance to Hutchison had increased, but we think this is
unlikely until the company has establishes a track record of
operating more successfully in the current market environment."



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L I T H U A N I A
=================


MAXIMA GRUPE: S&P Assigns BB+ Long-Term ICR, Outlook Stable
-----------------------------------------------------------
S&P Global Ratings assigned its 'BB+' long-term issuer credit
rating to Baltic retailer Maxima Grupe UAB. The outlook is
stable.

At the same time, we assigned our 'BB+' long-term issue credit
rating to Maxima Grupe's EUR300 million senior unsecured bonds.
These ratings are in line with the preliminary issuer credit
rating we assigned on July 17, 2018, and the preliminary issue
credit rating on Aug. 29, 2018.

Maxima Grupe successfully placed EUR300 million of senior
unsecured bonds in September 2018. This was part of the group's
refinancing plans to enable its acquisition of Polish retailer
Emperia Holding SA, the owner of Polish retail chain Stokrotka.
The bonds' final terms are largely in line with our expectations
and the group's credit metrics remain within the thresholds for
S&P's 'BB+' rating.

Maxima Grupe is a leading Lithuanian retail chain with a focus on
food retail (over 75% of revenues) operating in the Baltics since
1998. It owns retail chain Maxima (in the Baltic states),
Stokrotka and Aldik (in Poland), T-Market (in Bulgaria), and food
e-store Barbora, which operates in Lithuania and Latvia. In 2017,
pro forma the recent acquisition of Emperia and the integration
of Franchisee Franmax, it generated EUR3.4 billion of sales, with
about EUR221 million of reported EBITDA. The company is fully
owned by Vilniaus Prekyba -- a holding company with other stakes
in retail and real estate -- and is the group's most important
asset, with Maxima expecting to represent about 75% of the
group's overall EBITDA in 2018.

S&P said, "The 'BB+' rating reflects our assessment of Maxima
Grupe's leading position in the Baltics region, a market we deem
less competitive than other European retail markets because of
its relatively limited size and demographics. It also
incorporates our view that the group's debt to EBTIDA, in
particular on a reported basis, is somewhat lower than that of
some other retail peers of comparable size, and further supported
by a clear financial policy aimed at gradual deleveraging from
the 2018 high point, due to the Emperia Holding acquisition for
EUR285 million, excluding transaction-related costs. This stems
from our anticipation of an increasing EBITDA margin and positive
discretionary cash flow, despite a material dividend
distribution."

Maxima has maintained its leading position (28% market share) in
the Baltics, despite the greater pressures due to the arrival in
Lithuania of large international discount retailer Lidl in 2016.
S&P said, "In our view, this is thanks to Maxima's competitive
price positioning and high brand awareness. We do not expect
competition in the Baltics to escalate further, given the
market's overall modest size, already competitive nature, and
what we perceive as limited remaining growth avenues for new
entrants."

S&P said, "We see Maxima's Baltic operations as a strength, given
our expectation that the group's like-for-like growth in the
region will remain in excess of 1.5%, driven by real GDP growth
of about 3%-4% per year. That said, we expect that the Baltics
combined GDP for 2018 will be about 4x less than that of Poland,
where the group aims to continue expanding following the Emperia
Holding acquisition. We forecast that the supportive
macroeconomics trends, alongside the group's expansion plan in
Poland as well as the Baltics, will result in overall growth of
about 7% per year. We also believe the resilience and relative
predictability of the food retail industry, as well as the
group's modest exposure to foreign exchange risk -- in particular
in comparison with other Eastern European peers' thanks to the
Baltics' adoption of the euro -- provides the group with some
visibility on revenues and earnings.

"The group also benefits from a resilient operating model. In
particular, we note the meaningful sales contribution from
private labels of about 17%, which is in line with that of
Western European peers, as well as its diversified store formats.
Proximity format as of end-2017, as per the company's definition
and without taking into account Emperia Holding's store network,
already represented 45% of sales and about 77% of formats, and we
expect these shares will rise. Both factors, in our view, support
margins and help maintain Maxima's strong competitive advantage
over peers. We understand that the group has a local sourcing
strategy that provides the group with fairly good bargaining
power, despite its overall limited size. Additionally, we believe
the group benefits from a partly owned real estate network, with
a book value estimated by management at approximatively EUR500
million and a market value that is likely higher.

"Lastly, while online sales still represent a very small part of
the group's revenues (less than 1% of sales), we believe the
group is well positioned in that space, since it faces little
competition and already has an online-dedicated offering through
the Barbora website.

"Our view of Maxima's business profile is constrained by its
relatively small size, scale, and EBITDA base compared with other
rated food retailers, as well as its still-substantial, but
declining, geographic concentration (the Baltics represent over
75% of revenues). These factors tend to limit the group's
bargaining power with suppliers, and its relatively narrow EBITDA
base means less flexibility to adapt to potential disruptions,
either from competition or unforeseen operating events, without
hurting credit ratios. Additionally, the group's concentration of
revenues exposes it to potential macroeconomic headwinds in the
Baltics, although this is not our base case. Furthermore, while
the expansion into Poland will improve diversification, we see a
degree of execution risk given the presence of several large
competitors in that market.

"We anticipate a moderate increase in margins, notably thanks to
the integration of the highly EBITDA-accretive Franchisee
Franmax, and to synergies from the Emperia Holding acquisition.
Maxima's adjusted EBITDA margin was about 7.2% in 2017, and we
forecast it will increase to about 8.0%-8.5% in 2018. While
Maxima's adjusted EBITDA margin is somewhat higher than that of
larger Western European peers, it remains modest, in our view,
given that the group owns 45% of its store network (which should
reduce fixed costs) and is of a much more moderate size, which we
consider facilitates implementation of cost-control initiatives.
Maxima's margins are below what we see for Russian retail peers,
such as X5 and Magnit, who typically have adjusted EBITDA margins
of about 11%-12%.

"The group's debt increased in 2017 and 2018 owing to the Emperia
acquisition. We understand the group plans to refinance part of
the bank debt raised for that purpose, which could translate into
EUR150 million of new funding from 2017 levels. We estimate that
this will result in adjusted debt to EBITDA of about 2.7x-2.8x in
2018, and 2.4x-2.6x from 2019 as the group's EBITDA base
increases. The S&P Global Ratings-adjusted metrics incorporate
our operating lease adjustment, which in the case of Maxima Grupe
is significant, pro forma the Emperia Holding acquisition, with
about EUR496 million of operating lease adjustments for 2018
against EUR282 million based on 2017's audited figures.
Mitigating this, we note the group's comfortable EBITDAR ratio of
over 3x and solid free operating cash flow (FOCF), despite high
capital expenditures (capex).

"That said, we expect deleveraging will slow because of the
group's expansion plans, which entail annual investments of about
EUR90 million-EUR100 million in 2018 and 2019, as well as planed
annual dividends of about EUR90 million-EUR100 million. That
said, excluding the Emperia Holding deal, we expect discretionary
cash flow generation will remain positive throughout the period,
enabling the group to comply with its net leverage ratio
threshold under the current financial policy. We also note that
the business has working-capital-supportive characteristics.

"Importantly, Maxima Grupe is part of a wider group, Vilniaus
Prekyba, whose main consolidated asset is Maxima. Vilniaus
Prekyba also consolidates a pharmacy business Euroapotheca, which
we expect will generate about EUR45 million of reported EBITDA in
2018, and consider has fairly good geographic diversification.
Vilniaus Prekyba also owns a real estate business, Akropolis,
which we assume will generate about EUR22 million of EBITDA.
Vilniaus Prekyba is slightly more leveraged than Maxima alone on
a net reported basis, by about 0.2x-0.3x as per our estimates.
That higher level of leverage results from the acquisition of
ApoteksGrupen in Sweden by Euroapotheca for a EUR334 million cash
consideration. Offsetting this, we understand Vilniaus Prekyba is
looking at various alternatives to deleverage the business and to
reduce debt at the holding level. We expect the gross reported
debt at the Vilniaus Prekyba level to stand at around EUR1
billion for 2018, with about EUR446 million of cash immediately
available and a comparable operating leases adjustment. Thanks to
incremental EBITDA provided by the group's other businesses,
adjusted leverage stands around 2.5x-2.7x, slightly lower than
that of Maxima Grupe.

"Given that Maxima Grupe contributes the bulk of the overall
group revenues and earnings, and because we consider Maxima Grupe
the largest business of founder Mr. Nerijus Numavicius, we
believe it is a core entity to the wider group. We also
understand there is no plan for a partial listing of Maxima Grupe
and that main shareholders intend to retain control of the
company going forward.

"Lastly, we note that Vilniaus Prekyba services a very modest
dividend to entities above it in the group, which we understand
are debt free on a stand-alone basis. We assess the wider group
credit profile (GCP) at 'bb+', which is driven by and consistent
with our assessment of Maxima's stand-alone credit profile (SACP)
at 'bb+'. Hence, our final rating on Maxima Grupe is in line with
its SACP and the GCP.

"The stable outlook reflects our expectation that Maxima Grupe
will defend or strengthen its already solid position in the
Baltic food retail markets, and soundly execute on its Polish
acquisition. This should allow the group to augment its revenues
and earnings, underpinned by the recent strengthening in
operating margins stemming from the Franchisee Franmax
integration and cost-control efforts.

"We think the group will gain some upside from acquisition-
related synergies, partially offset by the impact of incremental
restructuring costs and inflationary pressures.

"In our base case, we forecast S&P Global Ratings-adjusted FFO to
debt at about 30% and adjusted debt to EBITDA of about 2.7x-2.8x
in 2018 and trending toward 2.5x by end-2019.

"Our stable outlook also points to our anticipation of balanced
financial policies, particularly related to capex and dividends,
and comparable credit metrics at the Vilniaus Prekyba group
level, namely FFO to debt of around 30% in 2018 and above 35% in
2019.

"We could consider a downgrade if there was a significant decline
in operating performance, with profitability deteriorating
substantially because of stiff market competition, or a weaker
market environment in the Baltics or Poland, or because of a
difficult integration of Emperia Holding weighing on margins.

"Although not in our base case, we could also consider a negative
rating action if Maxima Grupe's current financial policy became
more aggressive in the form of increased dividend distribution or
large-scale, debt-funded acquisitions.

"Such a scenario would result in weakening credit metrics from
what we currently anticipate at the group level, for example, the
adjusted debt to EBITDA increased to above 2.8x in 2018, or if
FFO to debt meaningfully lower than 30%.

"An upgrade is remote at this stage, since we see Maxima Grupe's
overall size and narrow EBITDA base constraining our overall
assessment of its credit quality.

"Over the next 18-24 months, Maxima Grupe's SACP may benefit from
a marked improvement in trading, resulting in an EBITDA margin in
excess of 10%. This could translate into improved credit metrics
stemming from stronger free cash flow generation, causing
adjusted FFO to debt to move closer to 45%, with adjusted debt to
EBITDA decreasing toward 2x on a consistent basis. Even if we
were to revise upward our assessment of Maxima Grupe's SACP, an
upgrade would still hinge on our view of the credit profile of
the wider Vilniaus Prekyba group. For any rating upside, there
needs to be a low risk of releveraging at both Maxima Grupe and
the Vilniaus Prekyba group level, based on our assessment of the
group's financial policy. Additionally, we would need to see
similar improvement in the wider Vilniaus Prekyba group's credit
metrics, to comparable levels as that of Maxima Grupe, and a
track record of prudent financial policy across the whole group."



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===================


PUMA INT'L: Moody's Affirms Ba2 Sr. Unsecured Notes Rating
----------------------------------------------------------
Moody's Investors Service affirmed Puma Energy Holdings Pte.
Ltd's Ba2 corporate family rating and Ba2-PD probability of
default rating. Moody's also affirmed the Ba2 ratings assigned to
the senior unsecured notes issued by Puma International Financing
S.A. and guaranteed by Puma Energy. Concurrently, Moody's changed
the outlook on all ratings to negative from stable.

RATINGS RATIONALE

The revision of the rating outlook to negative from stable
largely reflects the uncertainty that is weighing on Puma
Energy's operating performance in the near term, particularly in
Angola (B3 stable) where the group generated around 20% of its
gross profit in 2017. Moody's believes that Puma is likely to
post a year-on-year decline in reported EBITDA of more than 20%
in 2018, which would lead to an increase in financial leverage
with Moody's adjusted total debt to EBITDA rising above 5x at
year-end against 4.6x in 2017.

Since the start of 2018, Puma has been facing challenging trading
conditions in some of its key markets amid the ongoing
depreciation of emerging market currencies against the dollar.
This led the group to post a 23% decline in EBITDA to $288
million in H1 2018.

More specifically, the contribution from its Angola-based
operations has been affected by the freeze on refined oil product
prices imposed in March 2018 by the Angolan government in the
context of its macroeconomic stabilisation programme. This
followed the decision taken by the National Bank of Angola to
exit the exchange rate peg to the US dollar earlier in the year,
which has led to a 56% depreciation in the Angolan kwanza against
the US dollar year to date. As a result, Moody's expects Puma's
gross profit in Angola to more than halve in 2018, against $270
million posted in 2017.

In addition, Puma's Downstream results in Australia (16% of the
group's Downstream gross profit in 2017) have been depressed by
intensifying competitive pressures, higher credit card sales
effected at a discount, as well as increased personnel costs
incurred by the group following the conversion of some of its
CoDo retail sites to the CoCo model. Also, Midstream EBITDA (15%
of group total) was affected by the loss of the Ghana pipeline
concession.

In H2 2018, Puma's results will be again pressured by the
continuing oil price freeze in Angola and further depreciation of
the kwanza against the US dollar, as well as the tough
competitive environment in Australia. Moody's expects Puma's
reported EBITDA to fall to around $560 million in 2018 (i.e. 24%
down year-on-year) and leverage metrics to weaken with Moody's
adjusted total debt to EBITDA rising to around 5.2x at year-end
against 4.6x in 2017.

Further ahead, any future recovery in Puma's profitability will
largely depend on whether the Angolan authorities decide to bring
the price of refined oil products back in line with international
markets. In this context, we notes that the government of Angola
requested an economic programme from the IMF, which could be
supported by an Extended Fund Facility (EFF) to help shore up the
country's fiscal and external position.

As part of the negotiations that were scheduled to start in
October 2018, we expects the IMF to make a number of
recommendations to the Angolan government. These will likely
include adjusting domestic fuel prices to reflect changes in
international fuel prices and the exchange rate while introducing
an automatic price adjustment mechanism, as well as liberalising
the import of refined oil products into Angola (currently a
monopoly of the country's national oil company Sonangol).

While the adoption of any of the measures and the timing of their
implementation remain highly uncertain at this stage, they would
support a recovery in Puma's financial results. That said, should
a favourable outcome fail to materialise within the next 3-6
months, Puma Energy's Ba2 ratings would clearly be at risk.

In H1 2018, despite lower EBITDA generation, a $24 million
working capital inflow combined with a 43% cut in capex to $112
million and the sale of a 20% interest in the Langsat bitumen
terminal in Malaysia for $24 million, helped the group generate a
small cash surplus of $7 million before debt financing.

In the near-term, we expects Puma to focus on preserving cash
flow by tightly managing working capital and keeping capital
expenditure close to its H1 2018 level. This should enable the
group to be mildly free cash flow positive in 2018, and keep
within the financial covenants governing its bank facilities by
containing the increase in its financial leverage.

In this context, Moody's views Puma's current liquidity position
as satisfactory. At the end of June 2018, Puma held cash balances
of approximately $579 million and had total availabilities under
committed credit lines of $955 million, of which $520 million
under revolving credit facilities expiring within twelve months.
In addition, Puma continues to have access to a $500 million
committed shareholder loan from Trafigura.

WHAT COULD CHANGE THE RATING UP/DOWN

Puma Energy's ratings could be downgraded should the prospects
for a sustained recovery in operating profitability that would
enable the group to lower adjusted total debt to EBITDA close to
4.5x times, fail to materialise within the next 3-6 months.

While unlikely at this juncture considering the negative outlook,
the continued expansion and diversification of the group's
geographic footprint together with consistent positive free cash
flow generation after capex and dividends resulting in a
permanent reduction in Moody's adjusted total debt to EBITDA
ratio below 3.5x could lead to an upgrade.

The principal methodology used in these ratings was Midstream
Energy published in May 2017.

Puma Energy Holdings Pte. Ltd ("Puma Energy") is an integrated
midstream and downstream oil products group active in Africa,
Latin America, North East Europe, the Middle East and Asia-
Pacific. Trafigura Beheer BV, a global commodity and logistics
firm, established Puma Energy in 1997 as a storage and
distribution network in Central America, and the company has
since grown into a global network operating across 49 countries
worldwide, with approximately 7.6 million cubic metres of storage
capacity and a network of approximately 3,105 retail service
stations across Africa, Latin America, and Australia. In the
twelve months to the end of June 2018, Puma Energy sold 24.0
million cubic metres of oil products and its facilities handled
almost 15.7 million cubic metres of petroleum products.

Trafigura (not rated), a global commodities trader, continues to
own 49.3% of Puma Energy. Sonangol (not rated), the state-owned
national oil company of Angola, is Puma's other major shareholder
with a 27.9% stake. In addition, Cochan Holdings LLC owns 15.5%
with the remaining owned by private investors.



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CREDIT EUROPE: Fitch Affirms BB- LT IDR, Outlook Stable
-------------------------------------------------------
Fitch Ratings has affirmed Credit Europe Bank N.V.'s Long-Term
Issuer Default Rating at 'BB-' with a Stable Outlook and
Viability Rating at 'bb-' and removed them from Rating Watch
Positive.

The rating actions follow the completion of the spin-off of CEB's
Russian subsidiary, Credit Europe Bank. CEBR's ownership has been
transferred to CEB's ultimate parent, Fiba Group but CEB will
retain a minority 10% stake in CEBR. The affirmation of CEB's
Long-Term IDR and the VR and the removal from RWP reflects
Fitch's view that the expected positive impact of the spin-off on
the bank's credit profile, primarily through reduced exposure to
volatile markets and expected lower volatility of earnings and
asset quality, is offset by the recent sharp deterioration of the
Turkish operating environment, to which CEB remains materially
exposed.

KEY RATING DRIVERS

CEB's IDRS AND VR

CEB's ratings reflect its reduced but still significant direct
and indirect exposure to volatile operating environments, in
particular Turkey, inherent to its business model. They also
reflect a niche but established trade finance franchise,
comfortable funding and liquidity and strengthened
capitalisation. The latter provides a buffer against CEB's
deteriorated asset quality, which is a rating weakness.

As a result of CEBR's spin-off, the share of developed markets in
CEB's total on- and off-balance sheet risk exposure and in gross
loans increased to 52% and 37%, respectively, at end-June 2018.
Fitch expects the share of business conducted in western Europe
to increase further. However, CEB will remain significantly
exposed to emerging markets through its presence in Romania
(almost a third of gross loans) and reducing but still material
direct exposure to Turkey (about a quarter of gross loans). In
its view, CEB's approach of targeting local operations of large
Turkish corporates in Europe may also further indirectly expose
it to the deterioration of the Turkish operating environment, as
weakening of the parents' credit profiles could have a negative
spill over effect on their international operations, which CEB
lends to.

CEB's Stage 3 loans are elevated, at 7.7% of gross loans at end-
June 2018 (the denominator includes EUR152 million of loans that
are mandatorily carried at fair value under IFRS 9 but are not
staged; excluding these the ratio would have been 8.1%). Legacy
foreign currency mortgage loans in Romania comprised about half
of total Stage 3 loans. Fitch believes that the risk of further
losses on this portfolio is limited given extra provisions booked
in 2016-2017 and in light of the steady growth of local real
estate prices. However, the recovery of these non-performing
loans is likely to be slow, and they will continue to weigh on
its assessment of CEB's asset quality. At end-June 2018, CEB also
reported a high volume of Stage 2 loans (18% of gross loans).
About 40% of these came from Turkey, suggesting the potential for
further pressure on asset quality as the impact of Turkish lira
exchange rate volatility, recent interest rate hikes and weaker
growth outlook feeds through into CEB's Turkish client base.

CEB's capitalisation has been strengthened by the shareholder in
anticipation of the spin-off by a USD25 million equity injection
and a USD50 million additional Tier 1 placement. The bank's Fitch
Core Capital (FCC) ratio and its fully-loaded common equity Tier
1 (CET1) capital ratio pro-forma for CEBR deconsolidation both
stood at an adequate 14.1% at end-June 2018, up by about 200bp in
the last two years. High risk-weight density results in low
leverage in the European context. Fitch estimates that the pro-
forma tangible equity/tangible assets ratio was 10.7%. Its
assessment of CEB's capitalisation also takes into account high
single name concentration in the loan book. The on- and off-
balance sheet exposure to 20 largest borrowers accounted for more
than 2x FCC at end-June 2018. High concentrations are partly
mitigated by the close involvement of the bank's executives in
managing corporate customers.

Profitability recovered in 1H18 after a muted performance in
2016-2017, with annualised operating profit/RWAs of 2.3% (pro-
forma for the spin-off). Operating profit benefited from releases
from loan loss allowances in Romania, which Fitch does not expect
to be repeated at the same scale. At the same time, CEB's ratings
reflect its expectation that the weak performance of recent years
will not be repeated, and that profitability will be less
volatile. Fitch also expects that CEB's ability to generate
capital internally will improve due to the almost full
elimination of hedging costs related to the bank's Russian
rouble-denominated investment in CEBR (recorded in other
comprehensive income and in recent years consuming the bulk of
CEB's consolidated profit).

Granular deposits are CEB's main funding source, and most are
collected in the Netherlands and Germany (60% of total funding
excluding derivatives and other liabilities). The majority of
deposits are covered by the Dutch deposit guarantee, which
contributes to funding stability. Liquidity is comfortable, with
high-quality liquid assets (cash, central bank deposits and
securities that can be pledged with central banks) amounting to
19% of pro-forma total assets at end-June 2018.

CEB's SUPPORT RATING AND SUPPORT RATING FLOOR

CEB's Support Rating of '5' and Support Rating Floor of 'No
Floor' reflect Fitch's view that senior creditors cannot rely on
receiving full extraordinary support from the sovereign if CEB
becomes non-viable. This reflects the bank's lack of systemic
importance in the Netherlands, as well as the implementation of
the EU's Bank Recovery and Resolution Directive and the Single
Resolution Mechanism. These provide a framework for resolving
banks which is likely to require senior creditors participating
in losses, if necessary, instead or ahead of a bank receiving
sovereign support.

Similarly, support from the bank's private shareholder, although
possible, cannot be reliably assessed.

CEB's SUBORDINATED DEBT

CEB's Tier 2 subordinated debt is rated one notch below the
banks' VR, reflecting below-average recovery prospects for this
type of debt.

CEBR's SUPPORT RATING AND SUPPORT RATING FLOOR

As a result of the spin-off, Fitch has downgraded CEBR's Support
Rating to '5' from '4' since Fitch cannot reliably assess the
ability and propensity of Fiba Group, the bank's new majority
shareholder, to provide extraordinary support in case of need.
Fitch has also assigned CEBR a Support Rating Floor of 'No
Floor', reflecting its view that support from the Russian
authorities cannot be relied upon due to the bank's low systemic
importance.

RATING SENSITIVITIES

CEB's IDRS AND VR

The ratings could be downgraded in case of a larger than expected
deterioration of CEB's asset quality that would put pressure on
the bank's capitalisation. An upgrade would require a track
record of loan book resilience and a reduction of risks stemming
from the bank's exposure to the Turkish operating environment.

CEB's SUPPORT RATING AND SUPPORT RATING FLOOR

An upgrade of the Support Rating and upward revision of the
Support Rating Floor would be contingent on a positive change in
the Netherlands' propensity to support its banks and a
significant increase in CEB's systemic importance. While not
impossible, this is highly unlikely in Fitch's view.

CEB's SUBORDINATED DEBT

CEB's subordinated debt rating is sensitive to changes in CEB's
VR.

CEBR's SUPPORT RATING AND SUPPORT RATING FLOOR

A higher Support Rating and Support Rating Floor for CEBR would
require a significant increase of the bank's systemic importance
in Russia, which Fitch views as unlikely.

The rating actions are as follows:

Credit Europe Bank N.V.

Long-Term IDR affirmed at 'BB-'; , off RWP, Outlook Stable

Short-Term IDR affirmed at 'B'

Viability Rating affirmed at 'bb-'; off RWP

Support Rating affirmed at '5'

Support Rating Floor affirmed at 'No Floor'

Subordinated debt long-term rating affirmed at 'B+'; off RWP

Credit Europe Bank

Long-Term IDR unaffected at 'BB-'; Stable Outlook

Short-Term IDR unaffected at 'B'

Viability Rating unaffected at 'bb-'

Support Rating downgraded to '5' from '4'; off Rating Watch
Negative

Support Rating Floor assigned at 'No Floor'


STEINHOFF INTERNATIONAL: Seeks Extension of Lock-Up Agreement
-------------------------------------------------------------
Renee Bonorchis at Bloomberg News reports that Steinhoff
International Holdings NV said it has asked creditors to agree to
an extension of the lock-up agreement, delaying it to Nov. 20
from Oct. 20.

"We have continued to receive significant support from creditors
under the lock-up agreement and we remain in positive discussions
with them," Bloomberg quotes Danie van der Merwe, acting head of
Steinhoff, as saying in the statement on Oct. 15.

"Negotiations on the implementation documentation are now well
advanced and the one-month extension to the long stop date will
give us the necessary time to complete that process ahead of any
necessary restructuring processes being launched."

Steinhoff International Holdings NV's registered office is
located in Amsterdam, Netherlands.



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


LUSITANO MORTGAGES NO. 3: S&P Affirms B- Rating on Cl. D Notes
--------------------------------------------------------------
S&P Global Ratings raised and removed from CreditWatch positive
its credit rating on Lusitano Mortgages No. 3 PLC's class A
notes. At the same time, S&P has affirmed and removed from
CreditWatch positive its ratings on all other classes of 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 Portuguese
residential mortgage market.

"Our structured finance ratings above the sovereign (RAS)
criteria classify the sensitivity of this transaction as
moderate. Therefore, the highest rating that we can assign to the
senior-most tranche in this transaction is six notches above the
Portuguese sovereign rating, or 'AA- (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.

"Under our counterparty criteria, we continue to delink our
ratings on the class A notes from our long-term issuer credit
rating (ICR) on the swap counterparty (Banco Santander S.A.), as
these classes of notes can achieve a higher rating when giving no
benefit to the swap provider."

S&P's European residential loans criteria, as applicable to
Portuguese residential loans, establish how S&P's loan-level
analysis incorporates S&P's current opinion of the local market
outlook.

S&P said, "Our current outlook for the Portuguese housing and
mortgage markets, as well as for the overall economy in Portugal,
is benign. Therefore, we revised our expected level of losses for
an archetypal Portuguese residential pool at the 'B' rating level
to 1.0% from 1.7%, in line with table 80 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
loss severity assumptions, resulting primarily from lower
repossession market value declines."

  Rating level     WAFF (%)    WALS (%)
  AAA                 21.48        3.36
  AA                  14.85        2.15
  A                   11.23        2.00
  BBB                  8.44        2.00
  BB                   5.62        2.00
  B                    3.44        2.00

The level of credit enhancement has increased for all classes of
notes due to the non-amortizing reserve fund being at its
required level and floor for over five years. The cotes are
currently paying on a pro-rata basis.

S&P said, "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.

"The class A notes have sufficient available credit enhancement
to withstand our stresses at the 'AA+' rating level. However, our
RAS criteria constrain our rating on the class A notes at 'A
(sf)'. We have therefore raised to 'A (sf)' from 'A- (sf)' and
removed from CreditWatch positive our rating on the class A
notes.

"The class B notes have sufficient available credit enhancement
to withstand our stresses at the 'BB' rating levels. Considering
this and owing to the current pro-rata priority of payments, we
have affirmed and removed from CreditWatch positive our 'BB-
(sf)' rating on the class B notes.

"The class C notes have sufficient available credit enhancement
to withstand our stresses at the 'B' rating level. We have
therefore affirmed and removed from CreditWatch positive our 'B
(sf)' rating on the class C notes.

"We have affirmed and removed from CreditWatch positive our 'B-
(sf)' rating on the class D notes because in our view it is
currently not dependent upon favorable business, financial, and
economic conditions to meet its financial commitments and is
unlikely to default in the next 12 months."

Lusitano 3 is a Portuguese residential mortgage-backed securities
transaction that closed in November 2004 and securitizes first-
ranking mortgage loans. Banco Esp°rito Santo S.A. (now Novo
Banco, S.A.) originated the pool, which comprises loans granted
to prime borrowers for the acquisition of residential properties
located in Portugal.

  RATINGS AFFIRMED AND REMOVED FROM CREDITWATCH POSITIVE

  Lusitano Mortgages No. 3 PLC

                        Rating
  Class            To          From
  B                BB- (sf)    BB- (sf)/Watch Pos
  C                B (sf)      B (sf)/Watch Pos
  D                B- (sf)     B- (sf)/Watch Pos

  RATING RAISED AND REMOVED FROM CREDITWATCH POSITIVE

  Lusitano Mortgages No. 3 PLC

                        Rating
  Class            To          From
  A                A (sf)      A- (sf)/Watch Pos



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


KEMEROVO: Fitch Revises Outlook & Then Withdraws BB-/B IDRs
-----------------------------------------------------------
Fitch Ratings has revised Russian Kemerovo Region's Outlook to
Positive from Stable and affirmed the Long-Term Foreign- and
Local-Currency Issuer Default Ratings at 'BB-' and Short-Term
Foreign-Currency IDR at 'B'. Kemerovo Region's outstanding senior
unsecured domestic bonds have been affirmed at 'BB-'.

The revision of the Outlook to Positive reflects Fitch's view
that the region will consolidate its improved fiscal performance
and debt metrics in the medium term. At the same time, Fitch
notes that the region's dependence on commodity markets will
continue to put pressure on its budgetary performance.

At the same time, the agency has withdrawn the region's ratings
for commercial reasons, and will no longer provide ratings or
analytical coverage for the issuer and its bonds.

KEY RATING DRIVERS

The Outlook revision reflects the following rating drivers and
their relative weights:

HIGH

Fiscal Performance Assessed as Weakness, Trend is Positive
According to Fitch's rating case scenario, the region's operating
performance will normalise in the medium term after peaks in
2017-2018, mostly caused by external factors. The agency expects
the operating margin will be around 8% in 2019-2020, which is
higher than the 2.6% average in 2013-2016. In 2017, the operating
margin peaked at 22.4% and Fitch expects it will remain high at
16% in 2018. These positive developments were supported by a
material increase in corporate income tax (CIT), the region's
largest revenue source. CIT almost doubled in 2017 on the back of
rising coal prices, which is the vital commodity for the region's
economy.

In 8M18, the region had already collected 80% of revenue budgeted
for a full year and incurred only 61% of expenditure budgeted for
the full year, which led to a significant interim budget surplus
of RUB25 billion. The strong interim result was supported by
continuous upward trend for coal prices, which are currently
close to their five-year maximum. Fitch expects most of the
surplus to be depleted by year-end due to the seasonal
acceleration of spending in 2H18. Nevertheless, the full-year
balance is likely to remain positive for the second year in a row
after a long track record of budget deficits.

Direct Debt and Other Long-Term Liabilities Assessed as Neutral,
Trend is Stable

Fitch expects Kemerovo's debt metrics will be more sustainable in
the medium term compared with the historical average. During 2018
the region has repaid the full portion of its RUB21 billion bank
loans, which allowed for a further reduction in its debt burden.
According to Fitch's rating case, direct risk will remain between
30%-40% of current revenue in the medium term, which is lower
than 55% in 2013-2017. The debt payback ratio (direct risk to
current balance) will be around five to six years in 2019-2020
compared with an average 25 years in 2015-2016. Fitch estimates
the region's weighted average life of debt at around 12 years.

As of September 1, 2018, more than 70% of the region's direct
risk was composed of budget loans at a 0.1% interest rate, most
of which have been restructured for longer maturities and with
gradual amortisation within a state-wide programme for Russian
regions. The agency views immediate refinancing risk for the
region as limited. The maturities of 2018-2020 are fully covered
by strengthened liquidity.

MEDIUM

Economy Assessed as Neutral, Trend is Stable

The region's economic profile is dominated by the coal and metal
industries. These sectors provide a broad tax base for the
region, but also make the region's revenue prone to volatility on
the corresponding commodities markets. The top 10 taxpayers
provided 25% of total taxes in 2017. Of these, seven companies
are engaged in coal mining. Fitch forecasts the growth of
national economy will slow to 1.5% in 2019, from 2.0% in 2018.
The regional government is more optimistic and expects growth of
close to 4% in 2018-2019. In 2017 the regional economy grew 2.1%
outpacing the national economy growth of 1.5%.

LOW

Management and Administration Assessed as Neutral, Trend is
Stable

In September 2018, a new head of the region was elected following
the resignation of his long-serving predecessor, who had been in
the post since 1997. In terms of budget and debt management the
former administration's approach was rather conservative and
mostly prudent. Fitch assumes continuity of these policies and
practices over the medium term, allowing the region to record a
budgetary performance in line with its expectations and limit
growth of debt.

Institutional Framework Assessed as Weakness, Trend is Stable

The region's credit profile remains constrained by the weak
institutional framework for Russian local and regional
governments (LRGs). It has a short track record of stable
development compared with many of its international peers. The
frequent reallocation of revenue and expenditure responsibilities
within tiers of government reduces the predictability of LRGs'
budgetary policies and hampers Kemerovo's forecasting ability.

RATING SENSITIVITIES

Not applicable.


NOVOROSSIYSK COMMERCIAL: S&P Puts 'BB-' ICR on Watch Positive
-------------------------------------------------------------
S&P Global Ratings said that it had placed its 'BB-' long-term
issuer credit rating on Russia-based stevedoring company
Novorossiysk Commercial Sea Port PJSC (NCSP) on CreditWatch with
positive implications.

The CreditWatch placement follows Transneft's acquisition of a
50% stake in Novoport Holdings Ltd., which owns 50.1% of NCSP,
for $750 million, increasing its share in Novoport to 100%. With
a direct 10.52% stake in NCSP, Transneft now controls 62.% of the
company (including about 1.4% of the shares held by NCSP's
subsidiaries, which Transneft indirectly controls through its
control of NCSP).

S&P said, "We could raise the rating on NCSP by either one or two
notches, depending on Transneft's strategy regarding parental
support, potential asset disposals, any changes in NCSP's
leverage and capital structure, and potential improvements in
NCSP's management and governance practices. Following the
acquisition, we see significant uncertainties regarding
Transneft's strategic vision for NCSP's development and financial
policy. In the coming months we expect clarification of
Transneft's strategy regarding oil and non-oil parts of NCSP's
business, including potential asset disposals, utilization of
proceeds, target leverage, and capital structure. We also expect
better visibility on port expansion plans, which previously
focused on non-oil cargo, such as containers, grains, and bulk.

"We could upgrade NCSP by one notch based on our expectation of
parental support, and if NCSP's stand-alone credit metrics, asset
composition, internal control, and governance practices remain
essentially unchanged. Currently, we believe that NCSP would
likely be considered at least moderately strategic to Transneft,
translating into a one-notch uplift from NCSP's stand-alone
credit profile (SACP). Transneft has strong positions in oil
transportation through pipelines, some of which end at NCSP's
terminals in Novorossiysk and Primorsk, and is thus a natural
extension of Transneft's core business. Nevertheless, NCSP is
relatively small compared to Transneft (about 10% of EBITDA), and
only part of NCSP's business is related to oil transport
infrastructure. To make a final assessment NCSP's group status,
we will seek clarity on Transneft's future strategy regarding
NCSP and its readiness to support the company.

"We could upgrade NCSP by two notches if we revised up NCSP's
SACP to 'bb' from 'bb-', and assessed the company's status within
the group as moderately strategic. We could positively reassess
the SACP if we believed Transneft would improve internal controls
and strengthen governance practices at NCSP, with NCSP's asset
composition, profitability, and financial metrics remaining
essentially unchanged." This could be achieved, for example,
through ensuring tighter control over treasury policies and
assigning key management positions (NCSP doesn't currently have a
CFO). Stronger financial metrics could also support an upward
revision of the SACP, for example if Transneft decided to
refinance NCSP's debt at the parent level, or use part of NCSP's
solid free operating cash flow to reduce leverage.

Liquid cargo handling, including oil and oil products, and which
fits into Transneft's business, generated only 35% of NCSP's
revenues in 2017. Remaining revenues come from dry cargo,
bunkering, and additional port services, which are not
necessarily essential for Transneft. S&P could affirm the ratings
on NCSP if it saw meaningful non-oil asset disposals, negatively
affecting NCSP's business risk, and if the proceeds from such
disposals were not used for debt repayments, resulting in higher
leverage. In this scenario, parental support would be offset by a
weakening SACP.

S&P said, "We don't expect the potential conversion of NCSP's
U.S. dollar-denominated tariffs to rubles will negatively affect
the ratings, because of NCSP'S relatively moderate debt-to-EBITDA
ratio of below 3x, and our expectation that in this scenario NCSP
would refinance its debt into ruble. This would, most likely,
increase the cost of funding and interest expenses, but the
effect should be manageable for the company.

"We expect that NCSP will continue to pay dividends close to 100%
of its free cash flows in the near term."

NCSP is Russia's largest stevedoring group, with a total handling
volume of 143.5 million tons and a market share of 18.3% in 2017.
The group operates two major ports, port of Novorossiysk and port
of Primorsk, and is a market leader in the export of several
commodities, such as crude oil (30% market share), oil products
(21% share), ferrous metals (42% share), iron ore (40% share) and
grains (23% share). In 2017, NCSP's revenues reached USD 900
million with a reported EBITDA of $647.2 million, translating
into EBITDA margin of 72%. The company's funds from operations
(FFO) to debt stood at 31.2% and S&P Global Ratings-adjusted debt
to EBITDA was 2.4x. Transneft is a Russian state-controlled
monopoly operator of oil pipeline networks. It transports about
90% of the country's crude oil production and about 25% of its
oil products to domestic and international destinations. In 2017,
Transneft's revenues reached Russian ruble (RUB) 884.3 billion
($15.2 billion) with reported EBITDA of RUB408.3 billion,
translating into EBITDA margin of 46%. The company's FFO to debt
stood at 70% and S&P Global Ratings-adjusted debt to EBITDA stood
at 1.2x.

S&P said, "The CreditWatch placement reflects our view that we
could raise the rating on NCSP in the next ninety days by either
one or two notches, depending on the future positioning of NCSP
within Transneft group. In particular, we could raise the rating
by one notch based on our expectation of parental support, and
assuming no changes to NCSP's stand-alone business, financial
metrics, or governance practices. We could upgrade NCSP by two
notches if, in addition to parental support, NCSP also benefitted
from improved internal controls, governance, or lower leverage.
We could affirm the ratings on NCSP if the parental support was
offset by negative changes to the company's business risk, such
as through meaningful asset disposals, or increased leverage
should the proceeds from asset disposals not repay existing
debt."



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


MANISA METROPOLITAN: Fitch Affirms BB/BB+ LongTerm IDRs
-------------------------------------------------------
Fitch Ratings has affirmed the Metropolitan Municipality of
Manisa's Long-Term Foreign Currency Issuer Default Rating (IDR)
at 'BB' and Long- Term Local Currency IDR at 'BB+'. Fitch has
also affirmed Manisa's National Long-Term Rating at 'AA(tur)'
with a Stable Outlook.

The ratings reflect Manisa's expected robust operating
performance despite operating spending growth exceeding operating
revenue growth. The ratings also factor in a significant increase
in infrastructure investments related to Manisa's new
responsibilities as a new metropolitan municipality and therefore
a rapid accumulation of debt and increase in net overall risk.

The Negative Outlook reflects that on the sovereign, as Manisa's
Long-Term IDRs are at the same level as Turkey's.

KEY RATING DRIVERS

Fiscal Performance (Strength/Stable): Interim budgetary results
showed Manisa reporting an interim operating margin at a high
50%. The municipality has collected 49.8% of its budgeted
operating revenue while realising 56% of its operating spending
for the year. In line with its expectations Manisa's operating
expenditure growth surpassed that of operating revenue in 1H18,
due to increased goods and services.

Fitch has a slightly more conservative rating case than the
administration's and expects Manisa's operating margin to average
35%-40% due to a slowdown of the national economy in 2018.
However, Fitch expects Manisa's local economy to remain resilient
and perform above the nation's average, due to a well-
diversified, buoyant local economy. This will be driven by a
nominal increase in shared tax revenue of 19% on average in 2018-
2020 and operating spending control after 2018.

Fitch expects capex to total TRY1.5 billion in 2018-2020, which
will largely be funded by borrowing (current balance-to-capex at
60% on average). Fitch expects capex to be scaled back after
March 2019 local elections and to account for 65% of the budgeted
amount in 2018 before gradually decreasing to about 45%. In its
assessment Fitch has a conservative approach and did not
incorporate the capital revenue to be generated through a large
development including a 5-star hotel and a shopping mall located
in the city centre for 2020. The development is planned to be
finalised in 2019, but may be postponed due to unexpected market
conditions.

Overall, Fitch expects Manisa to continue to post a large deficit
of about 45% of total revenue in 2018, and at a smaller 15% in
2019, which will be solely capex-induced. Fitch, however, expects
coverage of capex by the current balance to improve to about 70%
once the envisaged capex is implemented in 2018-2019, from 27.4%
in 2017.

Debt & Liquidity (Neutral / Negative): Fitch expects direct debt
to increase to about 100% of current revenue or TRY1.2 billion
(2017: TRY451.1 million and 67.7% of current revenue) over the
medium term. This is due to expected significant increase in
capex and thereby high leverage ahead of upcoming local
elections. Its conservative approach does not include expected
capital revenue by 2020, as the realisation of revenue, which
would decrease capex-induced debt, is subject to market
conditions.

Fitch expects Manisa's direct debt payback ratio - a measure of
debt sustainability - to increase on average to about 3.8 years
in 2018-2020 (2017: 2.3 years), which is commensurate with 'BB'
category peers', before gradually declining after 2020. All of
the new borrowings are bank loans in Turkish lira, with a
majority of loans from IL Bank (Turkish Municipal bank) and state
banks such as Halk Bank and Vakif Bank.

Economy (Neutral / Stable): Manisa is the 14th largest city by
population and the 19th largest by budget size out of 30
metropolitan municipalities. At end-2017, its population
increased 1.2% to 1,413,041 inhabitants or 1.7% of Turkey's
population. Although its GDP per capita of USD 11,112, according
to the latest statistics from 2014, is 8% below the national
average, Manisa has a well-diversified and buoyant local economy
with a far lower unemployment rate of 6.4% against Turkey's
11.1%.

Management (Neutral / Stable): Manisa was awarded its
metropolitan status after Law 6360 was implemented in 2014. The
city has a stable track record of budget performance, with
prudent cost discipline. The administration's commitment to
operating spending control was weakened by large capex
realisations in 2017. Fitch expects a return to spending
restraint from 2018 onwards, as no additional capex is being
planned.

The administration has an ambitious capex programme to upgrade
the basic infrastructure network of Manisa, such as the public
transport network or construction of diverse service units,
following the enlargement of the boundaries alongside the
municipality's metropolitan status.

Institutional Framework (Weakness /Stable): Manisa's credit
profile is constrained by a weak institutional framework for
Turkish subnationals, reflecting a short track record of a stable
inter-governmental relationship between the central and local
governments on the allocation of revenue and responsibilities, a
weak financial equalisation system and evolving debt management
in comparison with their international peers.

RATING SENSITIVITIES

Sustained reduction of debt-to-current revenue to below 50% and
continuation of sound fiscal performance with a current margin
sufficient to cover at least 60% of capex (2017: 27.4%) on a
sustained basis, together with operating spending being on
budget, could trigger a positive rating action.

Inability to adjust capex in relation to its current balance and
to apply cost control, leading to weaker budget performance with
a debt-to-current balance above four years, would result in a
downgrade.



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


CAPRI ACQUISITIONS: Moody's Affirms B3 CFR, Outlook Stable
----------------------------------------------------------
Moody's Investors Service has affirmed the B3 corporate family
rating and B3-PD probability of default of Capri Acquisitions
BidCo Limited. Moody's has also downgraded to B2 from B1 the
instrument ratings on the USD950 million senior secured first
lien term loan (including the USD120 million add-on) due 2024,
the EUR250 million senior secured first lien term loan due 2024
and the GBP80 million senior secured revolving credit facility
due 2023 which are issued by Capri Acquisitions BidCo Limited.
The outlook on all the ratings is stable.

RATINGS RATIONALE

The action was prompted by CPA Global's debt-financed acquisition
of an IP renewal management business on 1 October 2018 for
approximately GBP80 million, funded by a USD120 million add-on to
the existing USD830 million term loan with cash-overfunding of
approximately GBP8 million after costs. Moody's adjusted
debt/EBITDA, pro forma for the transaction, increases to 7.9x,
approximately the same as the 2017 LBO leverage of 8x. Although
Moody's regards the transaction as credit neutral, the downgrade
of the 1st Lien debt was due to the increased proportion of 1st
Lien debt in the capital structure and the consequent reduction
in the relative proportion of the subordinated debt cushion.

Capri Acquisitions BidCo Limited's rating reflects (1) CPA's
global leading market position in the patent renewal niche
market; (2) the good revenue visibility, on a 12 months basis,
supported by the resilient patent renewal business, which
represents about 70% of the company's gross income; (3) the
company's historical low customer churn of less than 5%; and (4)
the good customer diversification with its main client
representing 4% of the company's gross income (top 10 clients
19%).

This is partially offset by the company's (1) very high financial
leverage of 7.9x (Moody's adjusted debt/EBITDA) pro forma for the
new acquisition, almost back to the 8x pro forma for the original
transaction in 2017; (2) the high level of operating leverage
which is partially mitigated by the good track record of managing
its fixed cost base, and; (3) the dependence on certain law firms
in accessing a high number of small clients partially offset by
the presence of long-term agreements and dedicated services.

Liquidity analysis

CPA's liquidity pro-forma for the transaction is good, supported
by (1) GBP46 million cash balance after transaction close; (2)
GBP80 million-equivalent undrawn revolving credit facility (RCF)
with a springing covenant and large headroom; (3) significant
positive free cash flow projected, and; (4) no debt maturities
before 2023. The USD first lien term loan amortizes at 1% per
annum. In addition, the debt documentation contains a cash sweep
mechanism for excess cash above GBP7.5 million.

Outlook

The stable outlook reflects Moody's expectation that the company
will deleverage towards 7x in next 12-18 months driven by
positive EBITDA growth as a result of moderate volume growth in
its renewal business as well as additional focus on cross-selling
of products and services. The stable outlook assumes no material
debt-funded acquisitions or shareholder distributions and that
the company will maintain a good liquidity profile.

What can change the rating up/down

Upward pressure on the rating could materialize if the company
delivers positive organic growth through resilient operating
performance in its renewal business supported by expansion of its
IP software and services offering and adjusted debt/EBITDA moves
sustainably below 6.5x while generating positive free cash-flow
and maintaining good liquidity.

Factors that could lead to a downgrade

Downward pressure on the rating would develop if the company
fails to maintain the current momentum in its operational
performance such that Moody's adjusted debt/EBITDA is sustainably
above 8.0x or its liquidity profile weakens materially.

Structural considerations

The B2 rating on the first-lien term loans and RCF, all ranking
pari passu and issued by Capri Acquisitions BidCo Limited, one
notch above the B3 CFR, reflects the seniority of these
facilities ahead of the unsecured floating rate notes and the
unsecured lease rejection claims. The company's facilities
benefit from a security package which includes subsidiaries'
shares, bank accounts, material IP and intercompany receivables;
they also benefit from guarantees from a number of guarantors
which together represent no less than 80% of CPA's consolidated
adjusted EBITDA.

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

Profile

Headquartered in Jersey, CPA, formerly known as Computer Patent
Annuities, is a leading global provider of intellectual property
(IP) management services and software. The company has three main
business areas (1) IP Transaction Processing, which mainly
includes the renewals business, (accounting for 79% of the
company's gross income in FY 2017), (2) IP Software, which
focuses on IP management, data and analytics and innovation
management, (13% of gross income) and (3) IP Services, which
delivers dedicated solutions to the US Patent Office and other IP
professionals, (8% of gross income).

For the financial year ending July 31 2018, CPA generated revenue
of GBP1,332.5 million.


CAPRI ACQUISITIONS: S&P Affirms 'B-' ICR, Outlook Stable
--------------------------------------------------------
S&P Global Ratings affirmed its 'B-' long-term issuer credit on
Jersey-based Capri Acquisitions Bidco (Capri) and Delaware-based
Capri Finance LLC, a finance subsidiary of Capri. The outlook is
stable.

S&P said, "At the same time, we affirmed our 'B-' issue ratings
and '3' recovery ratings on the group's senior secured term loan
and revolving credit facilities (RCF). The '3' recovery rating
reflects our expectation of meaningful recovery prospects in the
event of a payment default (50%-70%; rounded estimate 55%)."

On Oct. 11, 2018, CPA Global announced the acquisition of a U.S.-
based provider of patent and trademark payment and intellectual
property portfolio management solutions for $105 million, plus
fees.

S&P said, "We view the acquisition as complementary for CPA
Global because it is acquiring a competitor in the U.S. market
with a portfolio of blue-chip customers that it did not
previously service given the sticky nature of relationships in
the market. While CPA's superior scale and product offering
presents opportunities for revenue and cost synergies, the
acquisition does not change our view of the group's business risk
profile.

"The group plans to fund the acquisition through a $120 million
add-on to the existing $830 million senior secured term loan,
issued by parent Capri. Given our estimation that the acquisition
will provide incremental EBITDA in financial year 2018 of about
$6 million, we consider the acquisition multiple of about 16x to
be substantial and leverage-increasing.

"However, we believe growth in the year to July 31 has been
sufficient such that, upon closing, leverage will be similar to
what it was following the acquisition of CPA Global by Leonard
Green & Partners and Partners Group. While our forecast of the
group's debt to EBITDA and FFO to debt of 20x-22x (10x-12x
excluding preference shares) in the 12 months to end-December
2018 and also in 2019 makes it one of the most highly leveraged
business services providers we rate in Europe, we forecast that
Capri will continue to generate relatively good FOCF given the
group's low capital intensity and tax burden. As a result, and in
the absence of any short-term liquidity pressure, we are
affirming the rating."

S&P's base case assumes:

-- GDP growth in 2.9% in 2018 and 2.3% in 2019 in the U.S.; 1.0%
    and 1.2% in Japan; and 2.0% and 1.7% in the eurozone.

-- Growth in the volume of patent and trademark renewals of 4%-
    5% in 2018 and 2019, with stable pricing.

-- Total revenue growth of about 5% in 2018 and 2019 driven by
    robust growth in the underlying renewals business.

-- Adjusted EBITDA margins to grow to 9%-10% in 2018 and above
    10% in 2019 due to lower exceptional costs.

-- Capital expenditure (capex) of about ú25 million per year and
     working capital outflows of about ú5 million in 2018 and
     2019.

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

-- Debt to EBITDA of 20x-22x (10x-12x excluding preference
    shares) in the 12 months to end-December 2018 and in 2019.

-- FFO cash interest coverage of 2.0x-2.2x in 2018 and 2019.

-- FOCF of greater than ú45 million in 2018 and 2019.

S&P said, "The stable outlook reflects our opinion that Capri
will maintain FFO cash interest of close to 2x, while retaining
its leading position in the intellectual property renewals
market, with healthy revenue growth, stable operating margins,
and relatively good FOCF generation.

"We could lower the rating if weaker EBITDA margins resulted in
Capri reducing its FOCF generation. Specifically, we could take a
negative rating action if we expected FOCF to be negative on a
sustained basis.

"We could raise the rating if Capri increased its revenues and
EBITDA and made voluntary debt prepayments in line with
management's plan. Specifically, we could consider raising the
rating if cash-paying debt to EBITDA fell below 8x and FFO cash
interest coverage improved to greater than 3x on a sustained
basis, while the group continues to generate good FOCF."


GOURMET BURGER: Moves Closer to Launching Formal CVA, Reports Say
-----------------------------------------------------------------
Global Insolvency, citing City A.M., reports that Gourmet Burger
Kitchen is drawing nearer to a controversial company voluntary
arrangement (CVA) used to shut stores and renegotiate rents, in a
battle that would likely pitch the beleaguered restaurant chain
against its landlords.

Speculation around GBK's potential insolvency has been mounting
over the last several months, after the firm's South African
owner Famous Brands said it was mulling "strategic options
relating to a subsidiary" in July, Global Insolvency relates.

The burger brand also said in August that operating losses
widened to GBP2.2 million in the 22 weeks to July 29, Global
Insolvency recounts.

According to Global Insolvency, reports in The Sunday Times
suggested that the company was moving closer to launching a
formal CVA, although Deloitte, which was hired last month to
advise on the restructuring, declined to comment.

Much like a number of other embattled high-street restaurant
chains, GBK has been hit by a combination of business rates,
rising food costs and higher wages within the last several years,
Global Insolvency notes.


PATISSERIE VALERIE: "Business as Normal" Following Rescue Package
-----------------------------------------------------------------
Kalyeena Makortoff and Alys Key at Press Association report that
Luke Johnson, Patisserie Valerie's chairman, has said it will be
"business as normal" at the cafe chain after swooping in with a
rescue package that saved nearly 3,000 jobs and the company from
collapse.

Mr. Johnson told the Press Association said that while he was
unlikely to open more stores in the near future, his "huge
personal commitment" to the business should be enough to reassure
both shareholders and employees.

The chairman came through with a major rescue package on Oct. 12
that saw him pledge up to GBP20 million in new loans to keep the
company afloat, Press Association recounts.

The company also successfully raised more than GBP15 million
through the issue of new shares, Press Association notes.

"The money will flow into the business in the coming days," Press
Association quotes Mr. Johnson as saying.

Funds raised through the share placement will be used to pay back
around half the money loaned by Mr. Johnson, as well as to meet
outstanding liabilities including a major tax bill owed to HM
Revenue & Customs, Press Association states.

While at least two London stores were shuttered by landlords over
overdue rent payments, Mr. Johnson, as cited by Press
Association, said: "No stores will be taken back (by landlords)."

Mr. Johnson, a serial entrepreneur, is the largest shareholder in
Patisserie Holdings, and had a 37% stake in the business ahead of
the rescue deal, Press Association discloses.

The company's future was thrown into question after it uncovered
fraudulent activity around its financial accounts and was served
a wind-up order by the taxman over GBP1.14 million owed to HM
Revenue & Customs, Press Association recounts.

In a statement issued to the market on Oct. 12, Patisserie
Holdings said the loans would enable it to continue trading for
the "forseeable future", Press Association relays.

It had been feared that the company could go into administration
with advisers at PwC thought to be on stand-by for a collapse,
according Press Association.

"We are going to cease new openings for a period and focus on
making the most of what we have, we are going to stabilize our
relations with suppliers, landlords, etc., we're going to beef up
our systems and controls," Mr. Johnson, as cited by Press
Association, said in an interview with Press Association.
"Obviously we are going to make some additions to the senior
leadership, particularly in finance."

Patisserie Holdings -- which owns additional brands such as
Druckers, Philpotts and Baker & Spice -- trades from more than
200 stores and also has a partnership with Sainsbury's, with
branded counters present in the supermarket.





                            *********

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

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

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


                            *********


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

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

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

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

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

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