/raid1/www/Hosts/bankrupt/TCREUR_Public/181101.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

                           E U R O P E

          Thursday, November 1, 2018, Vol. 19, No. 217


                            Headlines


F R A N C E

FAURECIA SA: Fitch Affirms 'BB+' Issuer Default Rating
FINANCIERE IKKS: Fitch Affirms C LT Issuer Default Rating


I R E L A N D

CVC CORDATUS IV: Moody's Affirms B2 Rating on EUR12.9MM F Notes
CVC CORDATUS XII: Fitch Assigns B-(EXP) Rating to Class F Debt
GRIFFITH PARK: Fitch Assigns B-(EXP) Rating to Class E Notes


I T A L Y

ALITALIA SPA: FS to Put Up Bid, Major Firms Rule Out Involvement
ALITALIA SPA: Banking Foundations to Oppose Any CDP Investment


L U X E M B O U R G

BELRON GROUP: Moody's Revises Outlook on Ba3 CFR to Negative
BELRON GROUP: S&P Affirms BB Issuer Credit Rating, Outlook Stable


N O R W A Y

PETROLEUM GEO-SERVICES: Fitch Alters Outlook on B- IDR to Stable


R U S S I A

STAVROPOL REGION: Fitch Affirms BB LT IDR, Outlook Positive
SVERDLOVSK REGION: Fitch Affirms BB+ LT IDRs, Outlook Stable


S P A I N

AYT DEUDA SUBORDINADA 1: Fitch Withdraws D Rating on 2 Tranches


S W E D E N

RADISSON HOSPITALITY: Fitch Assigns B+ LT IDR, Outlook Stable


T U R K E Y

* TURKEY: Many Companies with FX Debts "Technically Bankrupt"


U K R A I N E

CB PRIVATEBANK: Fitch Affirms B- LT IDRs, Outlook Stable
KERNEL HOLDING: S&P Affirms 'B' Long-Term ICR, Outlook Stable
UKRAINE: Fitch Affirms B- Long-Term IDR, Outlook Stable


U N I T E D   K I N G D O M

DBS LAW: Failure to Settle Debts Prompts Administration
EVANS CYCLES: Mike Ashley Buys Business Out of Administration
PATISSERIE VALERIE: To Hold Shareholder Vote Today


                            *********



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F R A N C E
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FAURECIA SA: Fitch Affirms 'BB+' Issuer Default Rating
------------------------------------------------------
Fitch Ratings has affirmed French automotive supplier Faurecia's
S.A.'s Long-Term Issuer Default Rating at 'BB+'. The Outlook is
Stable.

The rating action reflects the mildly positive effect from the
acquisition of Clarion on Faurecia's business profile and
moderately negative impact on the group's credit metrics. Fitch
projects funds from operations (FFO) adjusted net leverage to
increase to about 2.3x at end-2019, from 1.6x at end-2017, but
still below its negative sensitivity of 2.5x.

Fitch believes this transaction reinforces Faurecia's footprint
in the more highly-technological and faster-growing segments of
automotive infotainment, connectivity and advanced driver-
assistance systems as well as gain a recognised brand name and
enhance the group's exposure to Asia and the US.

KEY RATING DRIVERS

Leading Market Positions: The ratings of Faurecia are supported
by its diversification, size and leading market positions as the
10th-largest global automotive supplier. Its large and
diversified portfolio is a strength in the global automotive
market, which is being reshaped by the development of global
platforms and the acceleration of new technologies and demand
from large manufacturers. Fitch also believes that the group is
well-positioned in some fast-growing segments to outperform the
overall auto supply market, notably by offering products that
increase fuel efficiency of its customers' vehicles.

Business Refocus: The Clarion acquisition is in line with its
expectations of Faurecia refocusing to higher added-value and
faster-growing segments and accelerating investment in both
sustainable mobility and the interior business. Fitch expects
Faurecia to combine the recently-acquired Parrot and Coagent with
Clarion to form a new business group of more than EUR1.5 billion
in revenue. This new segment will accelerate Faurecia's
participation in the intelligent cockpit business, including
stronger positions in human-machine interface, audio systems and
cloud data management, and provide opportunities to develop
aftermarket and fleet solutions.

Improving Earnings: Faurecia's operating margin, including
restructuring expenses, has increased continuously since 2012, to
6.4% in 2017 from 5.7% in 2016. Fitch expects a further increase
to more than 7% by 2020, a level more in line with peers' and the
rating. All divisions have strengthened their earnings and all
regions returned to profitability in 2017. The robust order book
also provides earnings visibility for the next two to three
years. The consolidation of Clarion will dilute the operating
margin in 2019 because of its lower profitability than Faurecia's
and restructuring and integration costs.

Underlying cash generation has also improved to levels more
commensurate with the high end of the 'BB' category with the
funds from operations (FFO) margin set to increase to about 9% by
2020, from 7.9% in 2017 and 7.6% in 2016.

Weak FCF: Free cash flow (FCF) increased to just over EUR220
million in 2017 (1.3% of value-added sales) from about breakeven
in 2015 and 2016. The improvement was driven chiefly by more than
EUR200 million of working capital inflow and higher FFO
offsetting increased dividends and capex. Fitch expects the FCF
margin to decline to 0.5% in 2018 and remain between 0.5% and
1.5% through to 2021, as cash generation will be further burdened
by integration costs related to Clarion. This is at the low end
of Fitch's typical requirements for a 'BB+' rating and leaves
limited headroom to the ratings following the increase in
leverage from the Clarion acquisition. Fitch also believe that
FCF remain at risk of a working capital reversal in the medium-
term and increasing investment to meet the group's business
refocus and accelerating demand towards shifting automotive
trends.

Clarion Acquisition to Increase Leverage: Faurecia's FFO adjusted
net leverage remained stable at 1.6x at end-2017 as positive FCF
funded a few small acquisitions. However, Fitch expects it to
increase to about 2.3x at end-2019 because of the Clarion
acquisition for an enterprise value of about EUR1.2 billion
financed entirely by debt, before gradually declining towards 2x
by end-2021, a level more commensurate with the rating.

Weak Linkage with PSA: Fitch applied its parent and subsidiary
rating linkage (PSL) methodology and assessed that Faurecia has a
credit profile similar to its parent PSA (46.3% stake and 63.1%
voting rights). Fitch also deems the legal, operational and
strategic ties between the two entities weak enough to rate
Faurecia on a standalone basis.
DERIVATION SUMMARY

Faurecia's business profile compares adequately with auto
suppliers at the low-end of the 'BBB' category. The share of the
group's aftermarket business, which is less volatile and cyclical
than sales to original equipment manufacturers (OEMs), is smaller
than tyre manufacturers' such as CGE Michelin (A-/Stable) and
Continental AG (BBB+/Stable). Faurecia's portfolio has fewer
products with higher added-value and substantial growth potential
than other leading and innovative suppliers including Robert
Bosch GmbH (F1), Continental and Aptiv PLC (BBB/Stable). However,
similar to other large and global suppliers, it has a broad and
diversified exposure to the large international auto
manufacturers.

With an EBIT margin at around 6.5%, profitability is lower than
that of investment grade-rated peers, such as Continental,
BorgWarner, Inc. (BBB+/Stable) and Aptiv. Faurecia's FCF is weak
for the ratings and at the low-end of Fitch's portfolio of auto
suppliers in the 'BB+'/'BBB-' rating categories. FFO adjusted net
leverage will increase to about 2.3x following the Clarion
acquisition, a level commensurate with the ratings, but higher
than investment-grade peers'.

KEY ASSUMPTIONS

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

  -- Revenue to increase in mid-single digits p.a. in 2018-2021.
     Fitch is now assessing revenue based on value-added sales,
     excluding catalytic converter monoliths, in line with the
     group's new reporting method. Monoliths represented EUR3.2
     billion revenue in 2017

  -- Clarion to be consolidated into Faurecia's accounts in April
     2019

  -- Operating margin to increase gradually to more than 7% by
     2020, including restructuring expenses

  -- Moderate cash outflows from working capital developments in
     2019-2021

  -- Capex to decrease slightly as a percentage of sales after
     2018, but increase gradually to EUR1.4 billion per year by
     2021

  -- Dividend payout ratio of 25%

  -- Acquisitions of about EUR1.3 billion in 2019, including
     Clarion, and EUR250 million per year in 2020 and 2021

RATING SENSITIVITIES

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

  -- EBIT margin above 8% (2017: 6.4%)

  -- FCF margin around 2% (2017: 1.3%)

  -- FFO adjusted net leverage below 1.5x (2017: 1.6x)

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

  -- EBIT margin below 5%

  -- FCF margin below 0.5%

  -- FFO adjusted net leverage above 2.5x

LIQUIDITY AND DEBT STRUCTURE

Sound Liquidity: Liquidity is supported by EUR1.2billion of
readily available cash at end-2017 according to Fitch's
adjustments for minimum operational cash of about EUR0.4 billion.
Total committed and unutilised credit lines maturing in June 2023
were EUR1.2 billion, largely covering short-term debt of EUR0.4
billion at end-2017.


FINANCIERE IKKS: Fitch Affirms C LT Issuer Default Rating
---------------------------------------------------------
Fitch Ratings has affirmed French retailer Financiere IKKS
S.A.S.'s Long-Term Issuer Default Rating (IDR) at 'C' following
the announcement of the group's debt restructuring plan.

KEY RATING DRIVERS

DDE under Negotiation: The proposed debt restructuring plan
announced on October 15, 2018 came after the group missed a
coupon payment on July 13, 2018. Fitch views the proposed debt
restructuring as a distressed debt exchange (DDE) under its
criteria because it will result in a material reduction in the
terms of the existing debt and Fitch believes the restructuring
is conducted to avoid bankruptcy given an unsustainable capital
structure and compromised liquidity position.

Should the DDE complete in line with the proposed terms, Fitch
will downgrade the IDR to 'RD' before assigning an appropriate
IDR for the group's post-exchange capital structure, risk profile
and prospects. Should the proposed DDE not receive bondholders'
approval, Fitch believes the group is likely to enter some form
of administration and the IDR will likely be downgraded to 'D'.

Material Reduction in Terms: The debt restructuring proposal
includes the partial conversion of around EUR200 million
(including July 2018 and January 2019 unpaid coupons) out of
EUR320 million senior secured notes into subordinated PIK
instruments and the extension by three years of the maturity of
the reinstated EUR140 million senior secured notes. Under the
proposal, the coupon on the reinstated notes will combine a 6.75%
cash-pay element and a 1.25% PIK element. The plan also includes
the injection of a super senior 'new money' note of EUR70 million
issued at HoldIKKS that will be used to refinance the EUR33
million outstanding RCF.

Average Expected Recoveries: In line with its previous Rating
Action Commentary dated August 6, 2018, Fitch has maintained its
post-restructuring EBITDA of around EUR40 million (after creation
costs of about EUR6 million) and its distressed enterprise value
(EV)/EBITDA multiple of 5.0x for a going concern valuation of the
business. In its view, the 5.0x multiple for IKKS continues to
reflect its intact brand, the quality of its store network, as
well as its multiple store formats and distribution channels.

Under its assumptions, the super senior RCF lenders recover 100%
of their claims, leading to an RCF instrument rating of
'CCC'/'RR1'. Fitch estimates that holders of the senior secured
notes, which rank second on enforcement, would recover around 41%
of their claims, leading to an instrument rating of 'C'/'RR4'.

Continued Operational Challenges: With 1H18 revenue up 3.8%
versus 1H17 Fitch expects to see some trading consolidation for
the full year 2018. However, even assuming the approval of the
proposed debt restructuring, Fitch expects no meaningful
improvement in sales in the short term due to uncertainty in the
non-food retail sector. The EBITDA margin continues to erode and
was 4.9pp lower in 1H18 than in 1H17 (as reported by the
company).

DERIVATION SUMMARY

Similarly to other European clothing retailers including New Look
Retail Group Ltd (CC) and Novartex S.A. (CCC-/RWN), IKKS has been
struggling operationally, which was reflected in declining sales,
EBITDA and funds from operations (FFO) margins, and excessive
financial leverage at around 11.4x (2017) on a funds from
operations (FFO) adjusted basis.

The reasons for the operating underperformance for all three
companies are structural changes in non-food retail, with
uncompetitive offerings eroding the customer base, even in the
more conservative, and therefore traditionally more stable
premium clothing segment. While IKKS generates substantially
lower sales than New Look, both groups are struggling in a fierce
competitive environment and against low-cost pure online players.
However, Fitch believes that IKKS is slightly less exposed to
low-cost competition due to its higher-value end products.

KEY ASSUMPTIONS

Although Fitch expects the completion of the DDE will turn the
capital structure into a more sustainable one, key assumptions
within its rating case for the issuer still stand:

  - Low single-digit sales growth in 2018 and around 1%
    thereafter

  - EBITDA margin at 11% (creation costs of EUR5 million-EUR6
    million are included)

  - Restricted cash of EUR15 million per year for operating
    purposes

  - Capex scaled back to EUR13 million a year, with creation
    costs of EUR6 million excluded

  - Trade working capital outflow of EUR10 million in 2018

  - Factoring increases by EUR3 million in 2018 and EUR2 million
    thereafter

RATING SENSITIVITIES

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

  -- Post DDE, a restructuring of the group's capital structure,
     leading to improving liquidity, maturity profiles and debt
     service coverage ratios, enabling the company to operate on
     a sustainable basis

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

  -- Execution of the proposed DDE

  -- Failure to receive approval for a comprehensive debt
     restructuring, leading to administration proceedings

LIQUIDITY AND DEBT STRUCTURE

De facto Insolvent: IKKS's liquidity over the next three months
remains uncertain and fully dependent on the outcome of the
current negotiations with the creditors in the context of the
proposed DDE.

SUMMARY OF FINANCIAL STATEMENT ADJUSTMENTS

  - Operating leases are capitalised using a multiple of 8.0x and
    added to financial debt

  - EUR15 million is treated as restricted cash required for
    operations

  - Shareholder loan is treated as 100% equity

  - Creation costs of EUR6.1 million are substracted from EBITDA
    and excluded from capex

  - Senior secured notes are adjusted to face value

  - Receivables factoring is adjusted by increasing the
    inventories and financial debt by EUR3 million in 2018 and
    further EUR2 million thereafter



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I R E L A N D
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CVC CORDATUS IV: Moody's Affirms B2 Rating on EUR12.9MM F Notes
---------------------------------------------------------------
Moody's Investors Service has upgraded the ratings on the
following notes issued by CVC Cordatus Loan Fund IV Designated
Activity Company:

EUR22,600,000 Refinancing Class B-1 Senior Secured Floating Rate
Notes due 2028, Upgraded to Aa1 (sf); previously on Apr 6, 2017
Definitive Rating Assigned Aa2 (sf)

EUR24,000,000 Refinancing Class B-2 Senior Secured Fixed Rate
Notes due 2028, Upgraded to Aa1 (sf); previously on Apr 6, 2017
Definitive Rating Assigned Aa2 (sf)

EUR24,900,000 Refinancing Class C Senior Secured Deferrable
Floating Rate Notes due 2028, Upgraded to A1 (sf); previously on
Apr 6, 2017 Definitive Rating Assigned A2 (sf)

EUR18,600,000 Refinancing Class D Senior Secured Deferrable
Floating Rate Notes due 2028, Upgraded to Baa1 (sf); previously
on Apr 6, 2017 Definitive Rating Assigned Baa2 (sf)

Moody's has also affirmed the ratings on the following notes:

EUR225,400,000 Refinancing Class A Senior Secured Floating Rate
Notes due 2028, Affirmed Aaa (sf); previously on Apr 6, 2017
Definitive Rating Assigned Aaa (sf)

EUR27,600,000 Class E Senior Secured Deferrable Floating Rate
Notes due 2028, Affirmed Ba2 (sf); previously on Apr 6, 2017
Affirmed Ba2 (sf)

EUR12,900,000 Class F Senior Secured Deferrable Floating Rate
Notes due 2028, Affirmed B2 (sf); previously on Apr 6, 2017
Affirmed B2 (sf)

CVC Cordatus Loan Fund IV Designated Activity Company, issued in
December 2014 and refinanced in April 2017, is a collateralised
loan obligation (CLO) backed by a portfolio of mostly high-yield
senior secured European loans. The portfolio is managed by CVC
Credit Partners Group Limited. The transaction's reinvestment
period will end in January 2019.

RATINGS RATIONALE

The rating actions on the notes are primarily a result of the
benefit of the shorter period of time remaining before the end of
the reinvestment period in January 2019. In light of reinvestment
restrictions during the amortisation period, and therefore the
limited ability to effect significant changes to the current
collateral pool, Moody's analysed the deal assuming a higher
likelihood that the collateral pool characteristics would
maintain an adequate buffer relative to certain covenant
requirements.

The key model inputs Moody's uses in its analysis, such as par,
weighted average rating factor, diversity score and the weighted
average recovery rate, are based on its published methodology and
could differ from the trustee's reported numbers. In its base
case, Moody's analysed the underlying collateral pool as having a
performing par and principal proceeds balance of EUR 393.7
million, a weighted average default probability of 21.7%
(consistent with a WARF of 2797), a weighted average recovery
rate upon default of 44.3% for a Aaa liability target rating, a
diversity score of 41 and a weighted average spread of 4.14%.

The default probability derives from the credit quality of the
collateral pool and Moody's expectation of the remaining life of
the collateral pool. The estimated average recovery rate on
future defaults is based primarily on the seniority of the assets
in the collateral pool. In each case, historical and market
performance and a collateral manager's latitude to trade
collateral are also relevant factors. Moody's incorporates these
default and recovery characteristics of the collateral pool into
its cash flow model analysis, subjecting them to stresses as a
function of the target rating of each CLO liability it is
analysing.

Methodology Underlying the Rating Action:

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

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

This transaction is subject to a high level of macroeconomic
uncertainty, which could negatively affect the ratings on the
note, in light of uncertainty about credit conditions in the
general economy. CLO notes' performance may also be impacted
either positively or negatively by 1) the manager's investment
strategy and behaviour and 2) divergence in the legal
interpretation of CDO documentation by different transactional
parties because of embedded ambiguities.

Additional uncertainty about performance is due to the following:

  -- Weighted average life: The notes' ratings are sensitive to
     the weighted average life assumption of the portfolio, which
     could lengthen as a result of the manager's decision to
     reinvest in new issue loans or other loans with longer
     maturities, or participate in amend-to-extend offerings. The
     effect on the ratings of extending the portfolio's weighted
     average life can be positive or negative depending on the
     notes' seniority.

In addition to the quantitative factors that Moody's explicitly
modelled, qualitative factors are part of the rating committee's
considerations. These qualitative factors include the structural
protections in the transaction, its recent performance given the
market environment, the legal environment, specific documentation
features, the collateral manager's track record and the potential
for selection bias in the portfolio. All information available to
rating committees, including macroeconomic forecasts, input from
other Moody's analytical groups, market factors, and judgments
regarding the nature and severity of credit stress on the
transactions, can influence the final rating decision.


CVC CORDATUS XII: Fitch Assigns B-(EXP) Rating to Class F Debt
--------------------------------------------------------------
Fitch Ratings has assigned CVC Cordatus Loan Fund XII Designated
Activity Company expected ratings, as follows:

EUR1.6 million Class X: 'AAA(EXP)sf'; Outlook Stable

EUR242 million Class A1: 'AAA(EXP)sf'; Outlook Stable

EUR6 million Class A2: 'AAA(EXP)sf'; Outlook Stable

EUR17 million Class B1: 'AA(EXP)sf'; Outlook Stable

EUR20a million Class B2: 'AA(EXP)sf'; Outlook Stable

EUR27.2 million Class C: 'A(EXP)sf'; Outlook Stable

EUR24.1 million Class D: 'BBB-(EXP)sf'; Outlook Stable

EUR23.7million Class E: 'BB (EXP)sf'; Outlook Stable

EUR12 million Class F: 'B-(EXP)sf'; Outlook Stable

EUR36.0million subordinated notes: 'NR(EXP)sf'

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

CVC Cordatus Loan Fund XII Designated Activity Company is a
securitisation of mainly senior secured loans (at least 90%) with
a component of senior unsecured, mezzanine, and second-lien
loans. A total expected note issuance of EUR409.6 million will be
used to fund a portfolio with a target par of EUR400 million. The
portfolio will be managed by CVC Credit Partners European CLO
Management LLP. The CLO envisages a 4.5-year reinvestment period
and an 8.5-year weighted average life (WAL).

KEY RATING DRIVERS

'B/B-' Portfolio Credit Quality

Fitch places the average credit quality of obligors in the
'B'/'B-' range. The Fitch-weighted average rating factor (WARF)
of the identified portfolio is 33.52, while the indicative
covenanted maximum Fitch WARF for assigning the expected ratings
is 33.5. The WARF calculation was based on the identified
portfolio that represents 57% of the target par amount.

High Recovery Expectations

At least 90% of the portfolio comprises senior secured
obligations. Fitch views the recovery prospects for these assets
as more favourable than for second-lien, unsecured and mezzanine
assets. The Fitch-weighted average recovery rate (WARR) of the
identified portfolio is 62.54%,while the indicative covenanted
minimum Fitch WARR for assigning expected ratings is 62.5%.

Limited Interest Rate Exposure

Up to 10% of the portfolio can be invested in fixed-rate assets,
while fixed-rate liabilities represent 5% of the target par.
Fitch modelled both 0% and 10% fixed-rate buckets and found that
the rated notes can withstand the interest rate mismatch
associated with each scenario.

Diversified Asset Portfolio

The covenanted maximum exposure to the top 10 obligors for
assigning the expected ratings is 23% of the portfolio balance.
The transaction also includes limits on maximum industry exposure
based on Fitch's industry definitions. The maximum exposure to
the three largest (Fitch-defined) industries in the portfolio is
covenanted at 39%. These covenants ensure that the asset
portfolio will not be exposed to excessive concentration.

Adverse Selection and Portfolio Management

The transaction features a 4.5-year reinvestment period and
includes reinvestment criteria similar to other European
transactions. Fitch's analysis is based on a stressed-case
portfolio with the aim of testing the robustness of the
transaction structure against its covenants and portfolio
guidelines.

Cash Flow Analysis

Fitch used a customised proprietary cash flow model to replicate
the principal and interest waterfalls and the various structural
features of the transaction, and to assess their effectiveness,
including the structural protection provided by excess spread
diverted through the par value and interest coverage tests.

RATING SENSITIVITIES

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

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

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

DATA ADEQUACY

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

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


GRIFFITH PARK: Fitch Assigns B-(EXP) Rating to Class E Notes
------------------------------------------------------------
Fitch Ratings has assigned Griffith Park CLO DAC series of notes
expected ratings as follows:

EUR3 million Class X: 'AAA(EXP)sf'; Outlook Stable

EUR264 million Class A1A: 'AAA(EXP)sf'; Outlook Stable

EUR8.75 million Class A1B: 'AAA(EXP)sf'; Outlook Stable

EUR20.5 million Class A2A: 'AA(EXP)sf'; Outlook Stable

EUR20 million Class A2B: 'AA(EXP)sf'; Outlook Stable

EUR16.4 million Class B1: 'A (EXP)sf'; Outlook Stable

EUR15 million Class B2: 'A (EXP)sf'; Outlook Stable

EUR26.9 million Class C: 'BBB-(EXP)sf'; Outlook Stable

EUR24.45 million Class D: 'BB-(EXP)sf'; Outlook Stable

EUR11.25 million Class E: 'B-(EXP)sf'; Outlook Stable

EUR48.7 million subordinated notes: 'NR(EXP)sf'

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

Griffith Park CLO DAC is a cash flow CLO that closed in 2016. The
portfolio is actively managed by Blackstone/GSO Debt Funds
Management Europe Limited (GSO), and the asset portfolio mostly
comprises European leveraged loans and bonds. Net proceeds from
the notes are being used to redeem the old notes, with a new
identified portfolio comprising the existing portfolio, as
modified by sales and purchases conducted by the manager. The
reset CLO will feature a 4.5-years reinvestment period (ending
May 2023) and an 8.5-year WAL.

KEY RATING DRIVERS

'B'/'B-' Portfolio Credit Quality

Fitch places the average credit quality of obligors in the
'B'/'B-' range. The Fitch-weighted average rating factor (WARF)
of the identified portfolio is 31.8, below the indicative maximum
covenant WARF of 32.5.

High Recovery Expectations

At least 96% of the portfolio comprises senior secured
obligations. Fitch views the recovery prospects for these assets
as more favourable than for second-lien, unsecured and mezzanine
assets. The Fitch-weighted average recovery rate (WARR) of the
identified portfolio is 66.07%, above the indicative minimum
covenant WARR of 63%.

Limited Interest-Rate Exposure

Up to 7.5% of the portfolio can be invested in fixed-rate assets,
while fixed-rate liabilities represent 4.5% of the target par.
Fitch modelled both 0% and 7.5% fixed-rate buckets and found that
the rated notes can withstand the interest-rate mismatch
associated with each scenario.

Diversified Asset Portfolio

The covenanted maximum exposure to the top 10 obligors for
assigning the expected ratings is 20% of the portfolio balance.
The transaction also includes limits on maximum industry exposure
based on Fitch's industry definitions. The maximum exposure to
the three largest (Fitch-defined) industries in the portfolio is
covenanted at 40%. These covenants ensure that the asset
portfolio will not be exposed to excessive concentration.

Adverse Selection and Portfolio Management

The transaction features a 4.5-year reinvestment period and
includes reinvestment criteria similar to other European
transactions. Fitch's analysis is based on a stressed-case
portfolio with the aim of testing the robustness of the
transaction structure against its covenants and portfolio
guidelines.

RATING SENSITIVITIES

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

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

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

DATA ADEQUACY

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

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



=========
I T A L Y
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ALITALIA SPA: FS to Put Up Bid, Major Firms Rule Out Involvement
----------------------------------------------------------------
Giulia Segreti at Reuters reports that major companies on
Oct. 30 ruled out involvement in a new rescue of Alitalia,
complicating a plan led by Rome in which state-controlled railway
Ferrovie dello Stato (FS) will bid for the airline and look to
bring in partners.

Alitalia was put under special administration last year, leaving
the government once again seeking a buyer to save the carrier,
Reuters recounts.

FS said its board had decided to put in an offer to buy Alitalia,
but gave no further details, Reuters relates.

A source close to the deal had earlier told Reuters that FS's bid
would only be a "transitional phase".

According to Reuters, the source added the deal would be
completed in two separate steps, with FS picking up Alitalia on
set conditions and then, at a later stage, being joined by an
Italian partner and an international one, from the airline
sector.

The source, as cited by Reuters, said there was very little
visibility on the next steps, and it was not clear which partners
would join FS.

On Oct. 30, oil company Eni said that any suggestion that it
might pick up a stake in the carrier was "groundless" and that it
would not play a role in the rescue, Reuters notes.

Defense group Leonardo too will not join any relaunch of
Alitalia, which has already accumulated a loss of over EUR300
million (US$340.86 million), a separate source close to the
matter told Reuters.

Alitalia, Reuters says, has cost Italian tax payers almost EUR10
billion over the last 20 years.

Alitalia must pay back the Italian state almost EUR1 billion in a
bridge loan and related interest by mid-December, according to
Reuters.


ALITALIA SPA: Banking Foundations to Oppose Any CDP Investment
--------------------------------------------------------------
Giuseppe Fonte at Reuters reports that Italy's banking
foundations will vote against any investments state lender Cassa
Depositi e Prestiti (CDP) might be called to make in Alitalia,
the head of the foundations association ACRI Giuseppe Guzzetti
said on Oct. 30.

Banking foundations hold just over 16% of CDP, which is
controlled by the Italian Treasury, Reuters discloses.

The government coalition has recently suggested that CDP could
support the latest rescue of the ailing carrier, Reuters relates.



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


BELRON GROUP: Moody's Revises Outlook on Ba3 CFR to Negative
------------------------------------------------------------
Moody's Investors Service has affirmed the Ba3 corporate family
rating and Ba3-PD probability of default rating of Belron Group
SA, a leading provider of car glass repair and replacement
services in Europe, North America, and Australia.

Concurrently, Moody's has (1) affirmed the Ba3 instrument ratings
on the EUR1.3 billion equivalent senior secured term loans due
2024 at Belron Finance US LLC and the EUR280 million senior
secured revolving credit facility (RCF) due 2023 at Belron
Finance Limited, and (2) assigned Ba3 rating to the new EUR400
million equivalent senior secured term loan due 2025 at Belron
Finance US LLC to be denominated in USD. Proceeds from the new
term loan will be used to fund a distribution to shareholders.

The outlook was changed to negative from stable.

"The change of Belron's rating outlook to negative from stable
reflects the material releveraging impact of the distribution to
shareholders which increases the company's Moody's-adjusted
debt/EBITDA to 4.9x from 4.1x as of September 2018", says Eric
Kang, Moody's lead analyst for Belron. "We expect continued
market share gains and cost efficiencies will support revenue and
EBITDA growth in the next 12 to 18 months but the pace of growth
may be hindered by less favourable weather conditions than in the
year-to-date", adds Mr Kang.

RATINGS RATIONALE

The Ba3 CFR with a negative outlook reflects the risk that
Belron's Moody's-adjusted debt/EBITDA will remain above 4.5x for
a prolonged period of time because the envisaged debt-funded
distribution to shareholders will increase its leverage to 4.9x
from 4.1x as of September 2018. Moody's expects revenue and
EBITDA growth driven by continued market share gains and cost
efficiencies will support deleveraging in the 12 to 18 months but
cautions that the pace of growth could be hindered by less
favourable weather conditions than in the year-to-date ended
September 2018 (YTD).

The rating also reflects (1) the company's limited product
diversity and the execution risks involved in diversifying into
new markets, (2) the highly competitive industry with significant
price pressure on contract renewals; (3) the option of major
insurers to insource vehicle glass repair and replacement
services although Moody's recognises such efforts to date have
mainly been subsequently reversed; (4) the material proportion of
business not covered by insurers which is vulnerable to
competitors and postponement during economic downturns.

More positively, the rating incorporates Belron's (1) relatively
stable business model underpinned by the largely non-
discretionary nature of its services, (2) leading market
positions across diversified geographies with limited competitors
in mainly fragmented markets, (3) well established relationships
with large insurers built on high service levels, and (4) low but
stable organic through-the-cycle growth rates in developed
markets.

YTD organic revenue growth was 11.3% compared to around 5% p.a.
in 2015-2017. In Moody's view, the YTD outperformance against
prior years was mainly driven by extreme winter weather across
North America and Europe which led to an increase in market
volumes in the context of a structural decline in market volumes.
Moody's expects improving road conditions, lower average driving
distance and speed, and a potential reduction in the size of the
car parc to constrain volume growth which has been declining at
around 1% p.a. in the company's ten largest markets in the last
few years. However, declining market volumes have been offset by
an increase in the average job price driven by car parc
premiumisation, advanced driving assistance systems, and more
complex and larger windscreens.

Strong revenue growth as discussed above and cost efficiencies
led to an YTD EBITDA growth of 17.6% (as reported, before non-
recurring items and executive share plan charge), which in turn
led to a reduction in the company's Moody's-adjusted debt/EBITDA
to 4.1x as of September 2018 and prior to the distribution to
shareholders from 4.5x as of December 2017.

LIQUIDITY

Belron's liquidity is solid reflecting Moody's expectation of
positive free cash flow in the next 12 to 18 months, cash at
closing of EUR148 million, and access to an undrawn revolving
credit facility of EUR280 million with ample headroom under the
springing covenant. The nearest material debt maturity is the
revolving credit facility in November 2023.

STRUCTURAL CONSIDERATIONS

The Ba3-PD PDR is aligned with the Ba3 CFR as typical for capital
structures with first lien bank debt with only a springing
covenant. The senior secured term loans and RCF are rated Ba3,
also in line with the CFR, reflecting their first priority pari
passu ranking. These instruments are guaranteed by material
subsidiaries representing at least 80% of consolidated EBITDA,
and are secured by share pledges as well as floating charges over
all assets of the US and UK businesses.

RATING OUTLOOK

The negative outlook reflects the risk that Belron's Moody's-
adjusted debt/EBITDA will remain above 4.5x for a prolonged
period of time following the debt-funded distribution to
shareholders, which will position the rating weakly in its
category. Moody's will consider stabilising the outlook if
debt/EBITDA reduces below 4.5x in the next 12 to 18 months.

FACTORS THAT COULD LEAD TO AN UPGRADE/DOWNGRADE

While unlikely in the near term given today's rating action,
upward rating pressure could materialise overtime if (1) the
Moody's-adjusted debt / EBITDA falls sustainably towards 3.0x,
(2) the Moody's-adjusted EBITA margin remains in the high single
percentage digit, and (3) the Moody's-adjusted free cash flow /
debt rises to the high single percentage digit with a good
liquidity profile. For a potential upgrade, the company would
also need to demonstrate a track record of conservative financial
policy.

Conversely, negative pressure could be exerted on the rating if
(1) the Moody's-adjusted debt/EBITDA ratio does not reduce below
4.5x in the next 12 to 18 months, (2) the Moody's-adjusted EBITA
margin falls towards 6%, or (3) free cash flow generation or
liquidity materially weakens.

RATING METHODOLOGY

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

COMPANY PROFILE

Belron is the market leader in the vehicle glass repair &
replacement industry, with an established presence in 34
countries. The group operates under more than seven different
brands, with Carglass (Continental Europe), Autoglass (UK) and
Safelite (US) being the most well-known. The company generated
revenue of EUR3.5 billion in 2017.


BELRON GROUP: S&P Affirms BB Issuer Credit Rating, Outlook Stable
-----------------------------------------------------------------
S&P Global Ratings affirmed its 'BB' long-term issuer credit
rating on Luxembourg-based vehicle glass repair and replacement
(VGRR) services group Belron Group S.A. and its finance
subsidiary Belron Finance Ltd. The outlook is stable.

S&P said, "We also affirmed our 'BB' issue ratings on the
existing senior secured facilities, comprising a EUR280 million
revolving credit facility (RCF) maturing in 2023 and a EUR1.3
billion-equivalent term loan B maturing in 2024. The recovery
rating on these facilities is unchanged at '3', indicating our
expectation of meaningful recovery of 50%-70% (rounded estimate:
55%) in the event of a payment default.

"At the same time, we assigned our 'BB' issuer credit rating to
Belron Finance US LLC. The outlook on Belron Finance US is
stable. Finally, we assigned our 'BB' issue rating and '3'
recovery rating to the proposed EUR400 million-equivalent senior
secured term loan add-on to be issued by Belron Finance US and
maturing in 2025."

The affirmation follows the announcement that Belron will raise
an additional EUR400 million-equivalent first-lien secured term
loan to distribute EUR400 million in dividends to shareholders.
S&P said, "The affirmation reflects our view that Belron's post-
transaction credit metrics remain consistent with the current
rating and the group's stated financial policy. Although we
expect the group to continue to deleverage over time on the back
of continued earnings growth, we believe that any future material
improvements in credit metrics will be temporary due to the
group's financial policy. We expect the group to favor
shareholders up to its financial policy's maximum reported net
leverage target of 4.25x."

Belron has experienced strong demand and sales growth in 2018,
especially in the U.S., driven by its leading position in the
VGRR market and strong brand recognition. The global VGRR market
is showing some signs of structural declines in volumes, albeit
with some exceptions -- most notably, the U.S. However,
increasing complexity in vehicles -- on account of lane-
monitoring systems and sensors embedded in vehicle
windscreens -- and improvements in cross-selling mean that the
average spend per repair has more than compensated for volume
declines. The group has also diversified into the automotive
damage repair and replacement and home damage repair and
replacement markets, while it has additional revenues coming from
growth in the calibration of advanced driver-assistance systems.

S&P said, "The stable outlook reflects our view that Belron will
continue to grow at healthy high-single-digit rates over the next
12 months on the back of a strong performance in 2018, mainly
driven by strong sales growth in the U.S., coupled with margin
increases in North America and the rest of the world.
Furthermore, we expect that Belron will maintain credit metrics
commensurate with the ratings, despite the dividend
recapitalization.

"We could take a negative rating action if Belron's operating
performance comes under pressure as a result of difficult
conditions in its main markets, combined with a lack of growth in
new divisions, resulting in earnings growth materially below our
current expectations.

"We could also take a negative rating action if Belron or the
wider D'Ieteren group undertook material debt-funded acquisitions
or shareholder distributions that resulted in sustainably weaker
credit metrics than we expect. The ratings could come under
pressure if Belron's adjusted leverage rose to above 4.5x or if
D'Ieteren's adjusted leverage weakened to above 4.0x.

"Although we consider it unlikely in the near term, we could
raise our ratings if we anticipated that Belron's earnings and
cash flows were likely to improve significantly more than we
expect, supporting material deleveraging. A positive rating
action would also be contingent on a commitment from the group
and its shareholders to maintain a financial policy supportive of
these improved credit metrics, with no material debt-funded
acquisitions or shareholder distributions.

"In particular, we could raise our ratings on Belron if its
credit metrics improved such that adjusted leverage fell
sustainably below 4.0x. At the same time, we would expect
D'Ieteren to exhibit leverage of below 3x before considering a
higher rating on Belron."


===========
N O R W A Y
===========


PETROLEUM GEO-SERVICES: Fitch Alters Outlook on B- IDR to Stable
----------------------------------------------------------------
Fitch Ratings has revised Petroleum Geo-Services ASA's Outlook to
Stable from Positive, and affirmed the Long-Term Issuer Default
Rating at 'B-'.

The Outlook revision reflects slower-than-expected market
recovery in the oilfield services sector as oil and gas producers
continue to keep to the strict spending discipline and have not
yet materially increased their exploration budgets. Fitch expects
to see some improvement in 2019, but progress will be slow, and
next year will overall remain challenging for the industry
despite higher oil prices. While PGS's performance has improved
over the first three quarters of this year versus 2017, its
updated forecasts show a slower progress with regard to
deleveraging and free cash flow generation ability - which is the
main reason for the Outlook change.

While PGS still retains deleveraging capacity, which over time
could result in improved credit quality and a higher rating, this
is subject to market conditions. Its rating also takes into
account realised cost-cutting and business restructuring
initiatives, its manageable liquidity, high market share and long
track record in the business.

PGS is domiciled in Norway and is a leading global marine seismic
company with a market share of around 35%. The company currently
operates eight 3D seismic vessels, two of which are used
selectively as the market remains weak. In 2017, the company
generated USD374 million in EBITDA.

KEY RATING DRIVERS

Progress Slower Than Expected: PGS has generated broadly neutral
FCF over 9M18, and its net debt at end-September has remained
broadly at the end-2017 level - implying it is unlikely to
generate materially positive FCF, which was its previous
assumption. Also, its funds from operations (FFO) margin
(adjusted for investments into its seismic data library) was
unchanged at 7%, and Fitch expects this to remain below 10% for
the whole year, versus Fitch's guideline for an upgrade
(consistently more than 20%) and its previous expectations (14%).
PGS's slower-then-expected progress is mainly the result of still
challenging market conditions, which should start gradually
improving in 2019 and onwards as oil prices remain high.

High Leverage: PGS's debt is high in view of the company's large
capital programme started when the market was stronger. In 2017
its FFO adjusted net leverage, including capitalised leases, was
5.6x (assuming investments in the library are capitalised), which
constrains the rating to the low 'B' category. Fitch expects the
company's net leverage to improve as its FCF turns materially
positive starting from 2019 but based on its updated financial
projections PGS is less likely to be eligible for an upgrade in
the next 12-18 months. Fitch now projects its net leverage remain
at or above 3.5x over 2018-20.

Commitment to Reduce Debt: The company's financial policy is to
keep unadjusted net debt/EBITDA below 1x when the market is
strong, and below 2x when the market is weak. In 2016-17, net
debt/EBITDA exceeded 3x, and Fitch expects it to fall to around
2x by 2019-20. PGS identifies debt reduction as one of its key
financial priorities, which Fitch views as credit-positive,
although its ability to reduce debt will, to a significant
extent, depend on market conditions.

Premium Niche OFS Market Player: PGS is focused on marine seismic
data acquisition, where the company has a high market share of
around 35%. PGS is exposed to oil and gas companies' exploration
budgets in the offshore segment, which are sensitive to oil
prices. The company targets the premium end of the market as the
higher number of streamers per vessel and GeoStreamer technology
translate into better service quality and higher efficiency than
for some of its competitors. However, this premium position may
not necessarily be an advantage at the lowest end of the cycle,
when some companies reduce exploration spending to a minimum.

Multi-Client Business Smooths Volatility: PGS generates revenue
through three major channels: (i) marine contract division, where
data is acquired based on a contract and the customer acquires
exclusive ownership of the data; (ii) multiclient pre-funding,
where the data is sold to a group of customers but PGS retains
the right to use them in future; and (iii) multiclient late
sales, where PGS sells data to customers from its seismic data
library.

The multiclient business is significantly less volatile than the
marine contract division, and provides some revenue stability in
downturns. In 2017, marine contract sales were 65% lower than in
2014, while multiclient revenue contracted by only 11%, resulting
in total revenue falling by 40%. However, the multiclient
business requires substantial investments to keep the library up
to date.

More Flexible Business Model: PGS's response to the market
downturn has been less radical than that of some of its
competitors, which should benefit the company as the market
recovers. PGS has stacked some of its vessels, but the amount of
active streamers (marine cables used to relay data to the
recording seismic vessel) has remained broadly stable. PGS's
business model is capital-intensive and the company owns most of
the vessels it operates. However, it has decided to use two out
of eight vessels selectively, which should reduce its fixed
operating costs.

In addition, the company has reduced its workforce, centralised
some functions and closed down some representative offices. This
should help reduce costs in 2018 and beyond and supports the
margin improvement forecast in its base case.

Exploration Budgets Cut 50%: PGS and other marine seismic market
players have been under stress since late 2014, when oil prices
collapsed and O&G companies significantly reduced their
exploration capex. According to Wood Mackenzie, global
exploration expenses shrank to USD40 billion in 2017 from around
USD80 billion in 2011-14, which has resulted in significantly
lower day rates charged by seismic companies, and lower vessel
utilisation rates. Asset-heavy companies, such as PGS, have been
hit more severely since they tend to be higher-leveraged.

Slow Recovery Ahead: High spare capacity is likely to remain a
distinct feature of the marine seismic market over the next few
years, and Fitch expects only a gradual recovery from 2019. O&G
companies are likely to start increasing exploration budgets in
2019 as many of them have adjusted to USD50-60/bbl oil prices,
though Fitch has not seen much improvement in this respect yet in
2018. The offshore OFS sector may benefit from this recovery to a
somewhat lesser extent since full-cycle costs in deep offshore
may be overall less competitive than in onshore projects.
Nevertheless, oil majors continue to show an interest in
offshore. The currently high level of oil prices may accelerate
the market recovery.

DERIVATION SUMMARY

PGS is a leading global marine seismic company with a market
share of around 35%. The group is focused on the offshore segment
of the market, which disadvantages it against more diversified
peers and some other oilfield services companies with exposure to
both offshore and onshore, eg Nabors Industries, Inc.
(BB/Negative).

PGS's leverage is high but should gradually fall as Fitch expects
the company to be FCF- positive in the next several years due to
cost-cutting measures and a gradual market improvement. The
progress, though, will be slower than previously expected - hence
the Outlook revision to Stable from Positive. In 2017 PGS's FFO
adjusted net leverage peaked at 5.6x - compared with that of JSC
Investgeoservis (B+/Stable, 1.9x) and Anton Oilfield Services
Group (B-/Stable, 4.9x). However, Fitch expects this should drop
and remain in the 3.5x-4x range over 2018-20.

PGS's liquidity is manageable, in view of a significant
unutilised portion of a committed revolving credit line due 2020,
small maturities in the next two years, its expectation of the
company turning FCF-positive in 2019, and its policy of
refinancing large maturities at least 12-18 months in advance.

KEY ASSUMPTIONS

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

  - Eight active 3D vessels, with two of them being utilised
    selectively during low season (1Q and 4Q)

  - Gradual market recovery in 2019 resulting in better
    utilisation and slightly higher rates

  - Gross cash costs re-set at around USD600 million in 2018
    versus USD690 million in 2017

  - FFO minus investments into library improving to 10%-20% in
    2019-20 from 0% in 2017

  - No dividend payments

RATING SENSITIVITIES

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

  - FFO adjusted net leverage (assuming investments into multi-
    library are capitalised) consistently below 3.5x (2017: 5.6x,
    2018E: 4x)

  - FFO margin (adjusted for investments into library) broadly at
    or above 20% (2017: 0%, 2018E: 9%)

  - Consistently positive FCF leading to balance sheet debt
    stabilising at or falling below USD1 billion

  - Successful refinancing of major debt maturities 12-18 months
    in advance, in accordance with the company's policy

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

  - Worsening liquidity

  - FFO margin (adjusted for investments into library)
    consistently and materially below 5%

  - FFO adjusted net leverage (assuming investments into multi-
    library are capitalised) consistently above 4.5x

LIQUIDITY

Adequate Liquidity: PGS's liquidity is adequate. At end-September
2018 its short-term debt of USD80 million compares well with a
cash balance of USD44 million and an unutilised portion of
committed revolving credit facility of USD115 million (falling
due in 2020). In addition, Fitch projects PGS should be able to
generate positive FCF starting from 2019, which along with its
policy of refinancing its major maturities at least 12-18 months
in advance, should gradually improve its liquidity position. Its
rating case shows PGS's credit metrics should remain comfortably
below the covenants under the RCF, though the margin of safety
will be lower than previously expected.



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


STAVROPOL REGION: Fitch Affirms BB LT IDR, Outlook Positive
-----------------------------------------------------------
Fitch Ratings has affirmed Stavropol Region's Long-Term Foreign-
and Local-Currency Issuer Default Ratings at 'BB' with Positive
Outlooks and Short-Term Foreign Currency IDR at 'B'. Stavropol
Region's outstanding senior unsecured domestic bonds have been
affirmed at 'BB'.

The Positive Outlook reflects the region's continued progress
towards consolidation of its operating performance and
strengthening debt metrics. At the same time, Fitch notes that
the region's fiscal capacity will remain constrained over the
medium term, as evidenced by the material proportion of transfers
from federal budget in the region's operating revenue.

KEY RATING DRIVERS

Fiscal Performance Assessed as Neutral/Positive

According to Fitch's rating case scenario, the region's operating
balance will consolidate at 13%-15% of operating revenue in 2018-
2020, which is higher than the average historical level of 9% in
2013-2016. The operating margin peaked at 17.7% in 2017,
supported by an increase in taxes and current transfers as
Stavropol benefits from the new formula of transfers allocation
among the regions. In Fitch's view, the region's operating
performance over the medium term will be supported by a steady
flow of transfers from the federal budget and cost-efficient
management.

During 8M18 the region collected 66% of revenue budgeted for the
full year, but incurred only 57% of full-year expenditure, which
led to a material interim surplus of RUB8.8 billion. Fitch
expects that acceleration of capital spending closer to the year-
end will lead the full-year budget to a low deficit at around 2%
of total revenue, limiting recourse to new debt.

Debt and Other Long-Term Liabilities Assessed as Neutral/Stable

Fitch expects stabilisation of the region's debt metrics over the
medium term, with direct risk in the range of 40%-45% of current
revenue (2017: 43%) and the direct risk to current balance ratio
(debt payback) in line with the region's weighted average life of
debt. During 2018, Stavropol's direct risk has further declined
to RUB23.5 billion as of September 1, from RUB36.7 billion at the
start of the year, driven by repayment of bank loans.

The region's direct debt is currently dominated by RUB16.7
billion budget loans at a 0.1% interest rate, which were
restructured for longer maturities and with gradual amortisation
within a state-wide programme for Russian regions launched at
end-2017. The remainder is represented by domestic bonds with
final maturities up to 2023. Fitch expects the debt payback ratio
will hover at around three years in 2018-2020, which is close to
Fitch's estimated average life of debt at 4.2 years as of
September 1, 2018.

Economy Assessed as Weakness/Stable

Stavropol's socio-economic profile is historically weaker than
that of the average Russian region. Favourable climate conditions
and rich soils led to the development of agriculture in the
region, which used to be the largest contributor to GRP. Due to
the low value added generated by this sector, Stavropol's GRP per
capita was just 67% of the national median in 2016. According to
preliminary data, the region's economy grew 2.8% in 2017 after
stagnation in 2016, outpacing the national growth of 1.5%. 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, expecting real growth of Stavropol's economy at 2%-3%
per year in 2018-2020.

Management and Administration Assessed as Neutral/Stable

The administration follows a prudent and conservative budgetary
policy, which is evident in modest opex growth averaging 3.5%
during the last five years and a moderate level of debt. At the
same time, the administration maintains a relatively high level
of capex, which averaged 20% of total spending in 2013-2017, to
invest in the development of social infrastructure in the region
(roads, kindergartens, clinics) and further development of the
agricultural sector.

At the same time, like most Russian local and regional
governments (LRGs), regional budgetary policy is strongly
dependent on the decisions of the federal authorities and
constrained by an inflexible revenue and expenditure framework.

Institutional Framework Assessed as Weakness/Stable

The region's credit profile remains constrained by a weak
institutional framework for Russian LRGs, which has a shorter
record of stable development than many of its international
peers. Weak institutions lead to lower predictability of Russian
LRGs' budgetary policies, which are subject to the federal
government's continuous reallocation of revenue and expenditure
responsibilities within government tiers.

RATING SENSITIVITIES

Maintenance of sound operating performance and a debt payback
(direct risk to current balance) in line with the region's
weighted average life of debt would lead to an upgrade.


SVERDLOVSK REGION: Fitch Affirms BB+ LT IDRs, Outlook Stable
------------------------------------------------------------
Fitch Ratings has affirmed Russian Sverdlovsk Region's Long-Term
Foreign- and Local-Currency Issuer Default Ratings at 'BB+' with
Stable Outlooks and Short-Term Foreign-Currency IDR at 'B'. The
region's outstanding senior unsecured domestic debt has been
affirmed at BB+.

The affirmation of 'BB+' ratings reflects Fitch's expectation
that Sverdlovsk will maintain moderate direct risk and
consolidate it budgetary performance with an operating balance
sufficient for interest payment coverage. The ratings also factor
in the region's developed industrialised economy, albeit exposed
to business cycle volatility, the region's limited expenditure
flexibility and weak institutional framework for Russian sub-
nationals,

KEY RATING DRIVERS

Fiscal Performance Assessed as Neutral

According to Fitch's rating case scenario Sverdlovsk will
consolidate its operating balance at about 6%-8% of operating
revenue in 2018-2020. This will be supported by moderate growth
of taxes, which contribute about 90% of operating revenue, and
continuing cost control. However, eexpenditure flexibility is
limited. The scope for capex reduction is almost exhausted, with
the share of capital outlays expected to remain below 10% of
total expenditure over the medium term.

During January-August 2018, Sverdlovsk collected 70% of revenue
budgeted for the full year and incurred 60% of full-year
expenditure, resulting in a mid-year surplus of RUB15.8 billion.
This was mostly due to postponing capex to year-end and higher-
than-expected corporate income tax revenue.

Fitch's rating case scenario envisages acceleration in
expenditure (particularly capex) by end-2018 and forecasts a
RUB5.8 billion deficit for the full year, corresponding to about
2.6% of total revenue. Under Fitch's rating case scenario,
Sverdlovsk will maintain a fiscal deficit at around 2% of total
revenue in 2019-2020, which is in line with 2016-2017 results and
a notable improvement from the large deficits of 2013-2015
averaging at 12.8%.

Debt and Other Long-Term Liabilities Assessed as Neutral

Fitch expects Sverdlovsk will maintain direct risk at moderate
levels, which should remain below 40% of current revenue
according to its rating case. Direct risk declined to RUB54.6
billion at end-August 2018 from RUB74.5 billion at end-2017, due
to a high interim fiscal surplus. Fitch expects direct risk to
increase by year-end, albeit remaining below RUB80 billion under
Fitch rating case. The debt structure is fairly diversified and
at end-2017, the region's debt portfolio was dominated by medium-
term bank loans (52%), followed by low-cost budget loans (28%)
and domestic bonds (20%).

The region remains exposed to refinancing pressure in the medium
term as about two-thirds of its direct risk maturities are
concentrated in 2018-2022. That leads to the region's weighted
average life of debt at about four years, which is short compared
with international peers'. Fitch expects that the region will
continue to have reasonable access to the capital market to
refinance its maturing debt. The region does not plan to contract
additional budget loans in 2018-2020 and will fund its
refinancing needs with bank loans and new bond issues, hence
shifting its debt structure towards debt market borrowings.

Management and Administration Assessed as Neutral

The administration's policy agenda is well-balanced, focused on
regional development with prudent fiscal management and a
conservative debt policy. At the same time as with most Russian
local and regional governments (LRGs), Sverdlovsk's budgetary
policy is dependent on the decisions of the federal authorities.
During 2016-2018, the region improved its budget performance by
streamlining and controlling expenditure and Fitch assumes no
significant changes to the budgetary practice over the medium
term.

Economy Assessed as Neutral

Sverdlovsk has a developed industrial economy weighted towards
the metallurgical and machine-building sectors. Its wealth
metrics are above the median for Russian regions with a GRP per
capita 32% above the median in 2016. However, concentration on a
few sectors of the processing industry exposes the region's
revenue to economic cycles. Fitch projects Russia's economy will
see growth slow to 1.5% yoy in 2019, from an expected 2% in 2018
and the region will likely follow this trend.

Institutional Framework Assessed as Weakness

Sverdlovsk's credit profile is constrained by the weak Russian
institutional framework for LRGs. It has a short track record of
stable development compared with many of its international peers.
The unstable intergovernmental set-up leads to lower
predictability of LRGs' budget policies and hampers the region's
forecasting ability, negatively affecting investment and debt
policies.

RATING SENSITIVITIES

A sustained improvement of budget performance with an operating
balance at above 10% of operating revenue, accompanied by a
direct risk payback (2017: 5.7 years) below weighted average life
of debt (2017: 4.3 years) could lead to an upgrade.

A weak operating balance that is insufficient to cover interest
expenses or continuous growth of direct risk toward 60% of
current revenue without material improvements to the operating
balance would lead to a downgrade.



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


AYT DEUDA SUBORDINADA 1: Fitch Withdraws D Rating on 2 Tranches
---------------------------------------------------------------
Fitch Ratings has downgraded AyT Deuda Subordinada 1, FTA and
withdrawn the ratings as follows:

  Class B: downgraded to 'Dsf' from 'CCsf'; recovery estimate of
  0%; and withdrawn

  Class C: downgraded to 'Dsf' from 'Csf'; recovery estimate of
  0%; and withdrawn

Fitch is withdrawing the ratings of AyT Deuda Subordinada 1,
FTA's class B and C notes following default. Accordingly, Fitch
will no longer provide ratings or analytical coverage for AyT
Deuda Subordinada 1, FTA class B and C notes.

The transaction is a securitisation that originally consisted of
a portfolio of 10-year bullet subordinated bonds, originated by
nine Spanish banks.

KEY RATING DRIVERS

No Remaining Assets For Class B And C

On February 1, 2018, the remaining assets (consisting of Bankia
equity shares) backing the notes were sold and, on the February
payment date, the overall sale proceeds were used to pay in full
the class A notes. The class B and C notes were not redeemed in
full on the February payment date.

Issuer Ceased to Exist

As there were no remaining assets in the portfolio, AyT Deuda
Subordinada 1 was terminated and ceased to exist on August 7,
2018, when its Act of Extinction was formalised by a Spanish
notary and the trustee. As of this date, the remaining unpaid
principal balance on the class B notes was EUR29.5 million and on
the class C notes was EUR22.8 million (equal to its original
balance). Furthermore the class C notes had unpaid interest for
EUR0.57 million. Hence Fitch has downgraded both classes to
'Dsf', with recovery estimate (RE) of 0% and has withdrawn the
ratings.

RATING SENSITIVITIES
N/A

USE OF THIRD-PARTY DUE DILIGENCE PURSUANT TO RULE 17G-10
Form ABS Due Diligence-15E was not provided to, or reviewed by,
Fitch in relation to this rating action.

DATA ADEQUACY

Fitch has checked the consistency and plausibility of the
information it has received about the performance of the asset
pool and the transactions. There were no findings that affected
the rating analysis. Fitch has not reviewed the results of any
third-party assessment of the asset portfolio information or
conducted a review of origination files as part of its ongoing
monitoring.

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

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



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


RADISSON HOSPITALITY: Fitch Assigns B+ LT IDR, Outlook Stable
-------------------------------------------------------------
Fitch Ratings has assigned Radisson Hospitality AB a final
Long-Term Issuer Default Rating of 'B+'. The Outlook is Stable.
These ratings are in line with the expected ratings assigned on
June 25, 2018.

The 'B+' IDR reflects Radisson's solid market position in the
upscale hotel segment in EMEA, and a balanced portfolio
structure. It also reflects Radisson's limited profitability. The
asset-light model and a high proportion of variable rents provide
protection in a downturn, which is a key mitigating factor to the
sector's inherent revenue cyclicality. The potential entrance of
a new shareholder introduces uncertainty to the future business
plan and the financial policy but the track record and experience
of the management team reduces execution risk related to the
group's investment plan.

KEY RATING DRIVERS

Good Positioning in EMEA: Radisson is one of the key players in
the European hotel market, well-positioned as an upscale operator
covering differentiated target customers, which is a risk-
mitigating factor. Despite its presence in 66 countries, it is
concentrated in Nordic and western Europe countries. It benefits
from the right to use the brands, the loyalty programme and
reservation system -- among other services outlined in a master
franchise agreement -- of the wider Radisson Hotel Group, which
also operates in Asia and North America. While operating as a
separate, ring-fenced entity, being part of a worldwide group
provides scale and brand awareness and facilitates the signing of
new management and franchise contracts with hotel owners.

Balanced Portfolio Structure and Segmentation: Radisson has a
balanced portfolio structure with an asset-light model (18% of
the rooms are leased). This business model with a recurrent fee
nature mitigates revenue and profit volatility in a cyclical
sector, in its view. Radisson's client base is well-distributed
between 54% business clients with a generally upscale profile,
and 46% leisure travellers. Being present in key cities makes
their hotels an appealing destination both for holidays and for
business purposes, which reinforces Radisson's solid business
profile for the ratings.

Ambitious Repositioning Plan: Radisson is working on an ambitious
five-year plan that includes a significant repositioning of 30-35
hotels (roughly 9% of its total portfolio), 25,000 new rooms
(mostly through management and franchise contracts) and an
optimisation plan to gain organisational efficiency. Due to
Radisson's positioning and the track record of management,
execution risk of the business plan is deemed to be limited.

Limited but Protected Profitability: The group's EBITDA margin is
limited compared with industry peers' which Fitch believes is due
to a combination of the fees paid to parent Radisson Hospitality
Inc. and an expensive lease and staff structure. The lease costs
are partially mitigated by an efficient cap mechanism. Ninety
percent of the leases comprise a variability component: in case
of a downturn in revenue, a large part of the rents would become
fixed and consume an agreed cap before turning fully variable,
offering downside protection. Once the one-off costs from
reorganisation have been absorbed and exit contracts completed,
Fitch projects EBITDA margin should improve towards 13% in 2021
from 8.5% in 2017.

Moderate Leverage: The bulk of Radisson's debt stems from
operating leases, which Fitch capitalises by using a blended
multiple of 5.6x for 2017 to reflect variable leases. Fitch
projects funds from operations (FFO) adjusted net leverage to
decline to 4.0x from 4.7x between 2018 and 2021, due to a
strengthening of FFO. This leverage profile is in line with
Radisson's rating. Fitch expects free cash flow (FCF) to remain
slightly negative over the next two years due to Radisson's capex
plans. The ratings assume that the main shareholder will maintain
a conservative financial policy, reflecting an appropriate
balance between shareholders' and creditors' interests. Should
Jin Jiang International Holdings Co., Ltd, (Jin Jiang) which is
in the process of acquiring a majority stake in Radisson
replacing HNA as the majority shareholder, need to raise debt to
proceed with its acquisition, this will remain outside the
restricted group.

Changing Shareholder Structure: If Jin Jiang's stake exceeds 50%,
which could happen by end-2018, it will have to launch a
mandatory public tender offer for the remaining shares in
Radisson AB. This would not trigger a change of control put
option for the bondholders since they have already waived such a
clause. Should the new shareholder, however, introduce any
changes to the capital structure of Radisson or accelerate its
business plan development by stepping up the pace of capex
rollout, this might put pressure on the rating.

Experienced Management Team: Radisson has a recently renewed and
experienced management team, which combines both solid experience
of managers within the group and of professionals with a proven
track record in the industry. The management team makes
independent decisions as Directors representing shareholders only
hold a minority of seats on the Board of Directors. Should the
new ownership change the governance structure, Fitch would assess
any credit implications in due course. At this stage Fitch does
not assume a credit impact from governance changes.

DERIVATION SUMMARY

Radisson is the fifth-largest hotel chain in Europe, but its
scale and diversification are limited in a hospitality industry
dominated by leaders with a significant presence such as Marriot
International Inc. (BBB/Positive), Accor SA (BBB-/Positive) and
Meliā€ . Radisson is comparable with NH Hotel Group (B+/Positive)
in size and urban positioning, although Radisson is present in a
greater number of cities. Being part of a global group and
focused on the attractive upscale segment provides adequate brand
awareness worldwide. This market recognition and the capability
to grow under an asset-light model acts as a competitive
advantage compared with more local and asset-heavy peers, such as
Whitbread PLC (BBB/RWN) or Travelodge.

Radisson operates with limited EBITDA margins compared with
peers, due to above-average rent expenses, high fees derived from
the master franchise agreement with Radisson Hotel Group, high
salaries in Nordic and western Europe countries and a sub-optimal
pricing strategy. However, a variability mechanism deployed in
its lease contracts establishes a loss limit in the case of a
downturn. As a consequence, Radisson's EBITDA, despite being low
relative to immediate rated peers, is more stable in the medium
term than that of peers such as NHH.

KEY ASSUMPTIONS

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

  -- New 12,500 net rooms between 2018 and 2022 with stable
     occupancy and higher average room rate (compound annual
     growth of 5% from 2018 to 2021)

  -- Stable management and franchises fee scheme and portfolio
     composition

  -- EBITDA margin improving above 13% by 2021

  -- EUR440 million of capex for 2018 to 2022, including
     maintenance capex and M&A

  -- One third of net profit in dividends distribution as per the
     group's financial policy

The recovery analysis is based on a going-concern approach given
Radission's asset-light model. Fitch uses its estimate for a
post-distress EBITDA of EUR52 million after applying a discount
rate of 50% in a stressed scenario.

Fitch applies a distressed enterprise value (EV)/EBITDA multiple
of 4.0x, due to Radisson's lack of real estate assets and brand
ownership.  After deducting the customary administrative charges
of 10% and super senior creditors claims, Fitch estimates that
the holders of the senior secured notes, which rank second on
enforcement after a super-senior revolving credit facility (RCF)
of EUR20 million that Fitch assumes would be fully drawn in
distress, will recover up to 67% of the claims, leading to an
instrument rating of 'BB-'/'RR3' (67%), one notch above the IDR.

RATING SENSITIVITIES

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

  -- Successful implementation of the transformation plan,
     leading to EBIT margin sustainably above 6%.

  -- FFO lease adjusted net leverage below 4x on a sustained
     basis

  -- EBITDAR/(gross interest + rents) consistently above 1.8x

  -- Sustained positive FCF

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

  -- No evidence of successful implementation of the
     transformation plan, leading to EBIT margin below 1.5% on a
     sustained basis

  -- FFO lease adjusted net leverage above 5x

  -- EBITDAR/(gross interest + rents) below 1.3x

  -- Continuing negative FCF

LIQUIDITY AND DEBT STRUCTURE

Strong Liquidity, Efficient Treasury Management: Radisson has a
new RCF of EUR20 million at 2.75% interest rate and maturing end-
2022, which was fully undrawn at end-September 2018. This amount
should allow the group to meet its short-term obligations and
cover its working capital needs.

In July 2018, Radisson issued a EUR250 million bond with a 6.875%
coupon, maturing in 2023. There are currently no significant
maturities before that date. The group intends to keep a sizeable
liquidity cash balance on its balance sheet (Fitch estimates over
EUR100 million), which should allow the it to implements its
capex plans.

Radisson has a strong cash position on its balance sheet (EUR229
million unrestricted at end-September 2018). However, this amount
is expected to decrease significantly in accordance with the
capex outlined in the five-year plan. Excess liquidity is managed
centrally by the central treasury function and placed where there
is a deficit balance. The central treasury function monitors the
cash position of the different entities daily, to ensure an
efficient and adequate use of cash and overdraft facilities.

SUMMARY OF FINANCIAL STATEMENT ADJUSTMENTS

Variable leases have been considered for the lease capitalisation
multiple calculations leading to a blended multiple of 5.5x,
5.4x, 5.4x and 5.6x from 2014 to 2017 respectively.

An average of EUR18 million as minimum operating cash on a
continuing basis has been considered restricted and hence not
readily available for debt service. For 2016 and 2017 displaying
lower year-end cash positions, EUR8 million and EUR7 million have
been restricted.



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


* TURKEY: Many Companies with FX Debts "Technically Bankrupt"
-------------------------------------------------------------
Cagan Koc at Bloomberg News reports that JCR Eurasia Rating
Chairman Orhan Okmen said in an e-mailed statement that an
important proportion of the companies that have foreign
liabilities have become technically bankrupt because of exchange
rate loss.

According to Bloomberg, rise in exports and tourism limits
economic slowdown but contraction in imports perpetuates it.
Turkey can't prevent economic contraction if banks' mechanisms to
extend credits aren't restored, Bloomberg states.

CBRT's latest interest rate decision relatively lowered the mass
bankruptcy possibility for SMEs that have to borrow in liras,
Bloomberg notes.



=============
U K R A I N E
=============


CB PRIVATEBANK: Fitch Affirms B- LT IDRs, Outlook Stable
--------------------------------------------------------
Fitch Ratings has affirmed Ukraine's PJSC CB PrivatBank's
Long-Term Foreign- and Local-Currency Issuer Default Ratings at
'B-'. The Outlooks are Stable. Simultaneously, Fitch has affirmed
the bank's 'b-' Viability Rating and upgraded the National Long-
Term Rating to 'AA(ukr)' from 'AA-(ukr)'.

KEY RATING DRIVERS

IDRS, VR AND NATIONAL RATING

PB's Long-Term IDRs are aligned with the bank's VR, which in turn
reflects its significant direct exposure to Ukrainian sovereign
risks, a large stock of distressed loans exposure (although
almost fully provisioned), moderate loss absorption capacity and
liquidity risks as well as potential litigation risk associated
with a USD0.4 billion lawsuit against the bank.

The upgrade of PB's National Long-Term Rating to 'AA(ukr)' from
'AA-(ukr)' reflects Fitch's reassessment of the bank's credit
profile relative to its main peers, two Fitch-rated state-owned
Ukrainian banks, Oschadbank and Ukreximbank, both rated 'B-
'/Stable.

PB's standalone credit profile is closely linked with that of the
Ukrainian sovereign through its large portfolio of long-term
sovereign bonds, totaling 60% of assets at end-June 2018, which
was largely built up from equity contributions in 2017. Further
public sector risks are low, given the bank's limited lending to
and borrowing from Ukraine's state-controlled companies.

The loan portfolio (17% of assets net of loan loss allowances at
end-1H18) remains burdened by the high impaired (IFRS Stage-3)
loans, at 85% of gross loans at end-1H18, including a part of the
loan portfolio the bank classifies as linked with its previous
owners and senior management (76% of gross loans). However,
incremental legacy-loan risks appear to be mitigated by strong
reserve coverage (83% of gross loans), and Fitch believes the
bank has already recognised most of the asset quality problems.

Capitalisation is moderate. At end-June 2018, the Fitch Core
Capital was a high 19% of reported Basel I risk-weighted assets,
the same level as the regulatory total capital ratio. However,
Basel I RWA are calculated using zero risk weights on local-
currency sovereign bonds. Aligning the risk weights for the local
and foreign currency instruments would reduce the FCC/RWA ratio
to a moderate 14%.

PB is exposed to contingent risk from a litigation claim by the
holders of the bailed-in senior unsecured Eurobonds. The claim
amounts to USD375 million plus accrued interest, or about 35% of
end-1H18 FCC. This will likely be a lengthy resolution process.

The bank is also exposed to a moderate net long open currency
position, calculated on the basis of IFRS statements, at 98% of
FCC at end-1H18 (down from 1.5x capital at end-7M17). This is
primarily driven by a large exposure to Ukrainian hryvnia-
denominated sovereign bonds for which repayments will be linked
to the maturity date's US dollar and euro exchange rates. Fitch
understands the bank plans to maintain or even increase this
position.

Profitability has recently improved as the credit cards business
swiftly recovered in 1H18, boosting revenue streams. The bank has
also reduced funding costs, and the net interest margin improved
to an annualised 6% in 1H18. Operating profits strengthened to an
annualised 10% of RWA, compared with operating losses in 2016 and
2017. However, a large portion of interest income is derived from
the government bonds, and the bank still need to build a track
record of strong and sustainable profitable in its retail
business.

The liquidity position remains fragile with liquid assets (cash
and claims on investment-grade foreign banks) equaling a small 8%
of total liabilities at end-3Q18. However, wholesale funding is
limited as the bank is mostly deposit funded. Fitch does not view
the sovereign bonds (66% of liabilities at end-1H18) as a
reliable liquidity source for the bank because, in Fitch's view,
the National Bank of Ukraine's (NBU) repo facilities, especially
those in foreign currencies, might not be available at all times.
The bank's overdue status on a UAH9 billion loan from NBU remains
unsettled, further constraining funding profile. According to
PB's management the NBU does not plan to accelerate its claims.

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

The SR of '5' and SRF of 'B-' reflect Fitch's view that the
Ukraine authorities will likely have a high propensity to support
PB, particularly in local currency. Fitch's opinion is based on
(i) PB's 100% ownership by the government through the Ministry of
Finance; (ii) the bank's high systemic importance as warranted by
its 35% market share in the sector retail deposits; (iii) a track
record of significant post-nationalisation capital support made
available by the government in 2016 and 2017; and (iv) the
limited non-deposit liabilities remaining at the bank.

However, the ability to provide support to the bank in case of
need, in particular in foreign currency, is viewed as constrained
given the sovereign's 'B-' Long-Term Local- and Foreign-Currency
IDRs.

In Fitch's opinion, PB's state ownership is non-strategic, given
that it arose from rescue, rather than policy objectives. The
authorities also plan to dispose of a controlling stake in the
bank, potentially via an IPO, by end-2022.

RATING SENSITIVITIES

The bank's IDRs, National Long-Term Rating, and VR would likely
all be downgraded and the SRF revised down in case of a downgrade
of the sovereign rating. However, an upgrade of the sovereign
would not automatically result in an upgrade of the bank's VR or
upward revision of the SRF (the latter given the sovereign's non-
strategic ownership).

An upgrade of the bank's VR would require both a sovereign
upgrade and a strengthening of the bank's performance and
capital. The VR would also be negatively affected by the
recognition of further asset impairment not adequately offset by
capital support from the authorities, or deposit outflows that
sharply erode the bank's liquidity, in particular in foreign
currency.

The rating actions are as follows:

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

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

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

  Viability Rating: affirmed at 'b-'

  Support Rating: affirmed at '5'

  Support Rating Floor: affirmed at 'B-'

  National Long-Term Rating upgraded to 'AA(ukr)' from 'AA-(ukr);
  Outlook Stable.


KERNEL HOLDING: S&P Affirms 'B' Long-Term ICR, Outlook Stable
-------------------------------------------------------------
S&P Global Ratings said that it affirmed its 'B' long-term issuer
credit rating on Kernel Holding S.A., a Ukraine-based producer
and exporter of sunflower oil and grains. The outlook is stable.

S&P said, "At the same time, we affirmed our 'B' issue rating on
Kernel's US$500 million Eurobond maturing in January 2022.
The affirmation reflects our view that Kernel's operating
performance will bounce back from the challenging trading
conditions that have weighed on the group in the past three
fiscal years (FY; year-end is June 30). In particular, we
forecast the group's consolidated reported margins to recover to
11%-13% over the FY2019-FY2020 fiscal period and that the group
will post moderately positive free operating cash flow (FOCF) in
2020, which should enable it to reduce leverage to the lower end
of 3.5x-4.0x S&P Global Ratings-adjusted debt to EBITDA, over the
next 12 months. For FY2019, we forecast the group's FOCF to
remain in deeply negative territory of about $170 million-$190
million, far exceeding the negative $80 million posted in 2018,
as the group embarks on a heavy capital investment program over
the next 24 months."

FY2018 was another challenging year for Kernel, with crushing
margins falling to about $49 per ton (down about 36% year on year
[yoy]). This, combined with lower-than-group-average landbank-
yields, weighed heavily on the group's profitability, with
reported EBITDA falling to about $223 million (30% reduction
yoy). At the same time, the group faced higher investment needs
to try to integrate the recent acquisitions and bring the
recently acquired farm land bank to the group's average level,
which explains the negative FOCF. However, S&P forecasts that
operating performance should improve in the upcoming 12 months
with reported EBITDA comfortably exceeding $300 million. This is
on the back of supportive weather conditions in the Ukraine in
2018, with Kernel forecast to crush about 1.40-1.45 million tons
of sunflower oilseeds, and we forecast margins to rise to $55-$60
per ton. At the same time, the group's rapid progress in
integrating and improving some newly acquired lower-yield
farmland should result in a marked increase in crop yields, with
the EBITDA contribution from the farming division forecast at
about $145-$155 million in FY2019. This should support the
group's gradual leverage reduction, despite the highly
constrained FOCF.

S&P said, "We forecast Kernel will post about $500 million-$550
million in cash outflow, resulting in deeply negative FOCF of
about $170 million-$190 million in 2019 and constrained, but
positive, FOCF of $20 million-$40 million in 2020. This is due to
Kernel's planned investment program aimed at boosting existing
capacity in the crushing and grains export business, including
the construction of a new oilseed crushing facility with a
capacity of 1 million tons of oilseeds per year, and a 4 million-
ton-per-year new grain export terminal in the port of
Chornomorsk. The program will be largely debt-financed via new
$475 million long-term credit facilities from multilateral
lending institutions as well as supplementary lines from
commercial banks, which we view as a supportive factor. We also
note positively that the group has received support from lenders
and has successfully renegotiated its net debt-to-EBITDA covenant
under its bank borrowings from flat maximum of 2.5x (tested at
year-end) to 3.3x in October 2018 for the current fiscal year
subject to step downs thereafter. It has also obtained a waiver
in 2017 due to the challenging operating environment at the time.

"Our assessment of Kernel's business risk profile continues to
reflect its leading position in the sunflower oil and grains
origination and production market, and its vertically integrated
business model. In our view, this provides Kernel with a distinct
competitive advantage over other players in Ukraine. At the same
time, our assessment continues to be constrained by the group's
exposure to Ukraine, where 100% of its physical assets are
located and which we view as having a very high-risk corporate
environment. It is also constrained by the group's focus on the
lower end of the commodities value chain.

"Our 'B' rating on Kernel continues to encompass our view that
the group successfully passes our sovereign stress test,
including a transfer & convertibility (T&C) scenario assessment,
enabling us to rate it one-notch above the 'B-' long-term
sovereign foreign currency rating on Ukraine, owing to Kernel's
export-oriented business and sizable offshore cash holdings. Our
rating on Kernel is capped at one-notch above the T&C on Ukraine,
owing to its export-oriented business and that virtually all of
the group's physical assets are based in the country. A failure
to pass the T&C scenario assessment would have resulted in a cap
on the rating on Kernel at the level of the T&C of Ukraine."

S&P's base case assumes:

-- Total revenue growth of about 6.0%-7.0% in FY2019 based on
     the assumption of a strong sunflower oil harvest in Ukraine
     and strong farming division results. S&P forecasts strong
     double-digit growth in FY2020 and FY2021 due to capacity
     expansion related to the commissioning of the new grain
     terminal in the Chornomorsk port and existing crushing
     plants. S&P Global Ratings-adjusted EBITDA margins to
     strengthen to 10.0%-13.0% in FY2019 and FY2020 on the back of
     a recovery in sunflower crushing margins to $55.0-$60.0 per
     ton.

-- Net annual working capital outflows of about EUR50.0 million
    per year in FY2019 and FY2020.

-- Capital expenditure (capex) of about EUR386 million in 2019
     and EUR158 million in 2020, supporting organic growth in
     grain and infrastructure, as well as sunflower crushing
     divisions. Kernel will fund the heavy capex program mostly
     via new bank loans from multilateral lending institutions and
     other commercial banks.

-- Dividend distributions in line with the group's FY2018
    distribution of $20.5 million, broadly in line with the
    group's historical policy track record.

-- No acquisitions as Kernel focuses on the integration of the
    recently acquired farm land bank from Ukrainian Agrarian
    Investment and Agro-Invest Ukraine.

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

-- Adjusted debt to EBITDA of 3.5x-4.0x in FY2019-FY2020
    improving to closer to 3.0x in FY2021 once the capex program
    approaches its end;

-- FOCF to debt deep in the negative territory in FY2019
    improving mildly to positive territory of about 4.0%-7.0% in
    FY2020; and

-- Operating cash flow to debt of about 15.0%-20.0% in FY2019-
    FY2020 improving to close to 20.0% in FY2021.

S&P said, "The stable outlook reflects our assumption that the
group will benefit from a rebound in oilseed crushing margins to
$55-$60 per ton over the next 12 months, driven by the group's
capacity expansion efforts and rationalization in the sunflower
oil market, which should enable the group to reduce leverage to
3.5x-4.0x.

"We could lower the rating if the group did not return to
positive FOCF territory by end-FY2020, following the heavy
capital investment over the next 12 months, which would likely
put downward pressure on the group's liquidity profile. Under
such a scenario, we would likely re-assess the group's ability to
pass our sovereign stress test, including T&C scenario
assessment. Alternatively, we could also lower the rating on
Kernel if we revised downward our T&C assessment on Ukraine.

"We would raise our rating on Kernel if we revised upward our T&C
assessment on Ukraine. This is because Kernel is an exporter with
more than 90% exposure to Ukraine. Therefore, the long-term
issuer credit and debt ratings on Kernel are capped at one notch
above our T&C assessment on Ukraine."


UKRAINE: Fitch Affirms B- Long-Term IDR, Outlook Stable
-------------------------------------------------------
Fitch Ratings has affirmed Ukraine's Long-Term Foreign-Currency
Issuer Default Rating at 'B-' with a Stable Outlook.

KEY RATING DRIVERS

Ukraine's ratings balance weak external liquidity, high external
financing needs driven by sovereign external debt repayments and
structural weaknesses, in terms of a weak banking sector,
institutional constraints and geopolitical and political risks,
against improved policy credibility and consistency, improving
macroeconomic stability, declining government debt and a track
record of bilateral and multilateral support.

Ukraine's continued engagement with the International Monetary
Fund (IMF) should mitigate near-term financing risks given rising
sovereign debt repayments starting 2019 and the 2019 elections.
On October 19, Ukraine and the IMF reached a staff level
agreement for a 14-month Stand-By Arrangement (SBA) which
replaces the March 2015 four-year Extended Fund Facility (EFF).
The government obtained parliamentary approval for the 2019
budget (first reading) with a deficit target of 2.3% of GDP and
raised household gas prices by 23%. Fitch expects the IMF's board
to formally approve the programme after the final budget
approval. The 14-month SBA agreement foresees total disbursements
of SDR2.8 billion (USD3.9 billion).

An IMF programme remains key to facilitate access to external
financing, support progress in macroeconomic stability and
mitigate vulnerabilities related to weak external liquidity and a
volatile environment for emerging markets. External financing
needs (current account deficits plus public and private sector
amortisations) will remain high, averaging 90% of international
reserves in 2019-2020, significantly above the 66% 'B' median.
External public debt principal repayments will increase from USD3
billion in 2018 to USD5 billion in 2019 and USD 4.8billion in
2020 with sovereign external bond payments equal to USD2.4
billion in both 2019 and 2020, which requires that Ukraine have
timely access to external financing.

Ukraine issued a USD2 billion Eurobond shortly after the staff
level agreement announcement. The EU will likely proceed with the
disbursement of the first tranche (EUR500 million) of the EUR1
billion Macro-Financial Assistance Program, while the World Bank
will issue a USD650 million equivalent guarantee after the IMF
board approval. Ukraine could receive the first tranche of the
SBA before the end of the year (depending on the timing of the
2019 budget approval), which will be directed towards balance of
payments support.

At USD16.6 billion at the end of September international reserves
at have declined by USD2.3 billion since the peak of USD18.9
billion in November 2017, reflecting sovereign foreign currency
debt repayments, delays in external official disbursements and
National Bank of Ukraine's (NBU) interventions in the FX market.
While Fitch expects international reserves to recover to USD17.7
billion (2.7 months of CXP) by the end of 2018, Ukraine's
external buffers remain weaker than 'B' peers (3.6 months of
CXP). Increased exchange rate flexibility, unlocking of external
financing through the new IMF deal and moderate external
imbalances mitigate near-term pressures on international
reserves.

The current account deficit will widen to 3.1% of GDP in 2018 and
2019, as still favourable prices for Ukrainian exports and
continued remittances growth will partly mitigate demand-driven
import growth and higher energy prices. In the near term,
material net external borrowing by the private sector and a
strong pick-up in FDI are unlikely, maintaining reliance on
sovereign external debt financing.

Ukraine's strengthened policy framework is underpinned by
increased exchange rate flexibility, the NBU's commitment to
sustainably lowering inflation, and moderate fiscal imbalances.
After the NBU increased the policy rate by a total of 550bp to
18% since October 2017 and supply shocks abated, annual inflation
declined to 8.9% in September, down from 14.1% at the beginning
of the year. The decline in core inflation (8.7% in September)
has been more moderate, signalling domestic demand pressures and
higher labour costs. Fitch expects inflation to average 11% in
2018, more than double the 5% 'B' median, before declining
gradually to an average of 6.8% in 2020.

The authorities have tried to smooth exchange rate volatility, as
pass-through to inflation remains high and dependent on the pace
of depreciation. Net NBU purchases amounted to approximately
USD600 million over the first nine months of 2018, despite net
sales of USD600 million in 3Q. Despite a relatively vulnerable
external position and delays in external loan disbursements, the
currency and yields have not experienced the level of stress as
other emerging markets, due to tight monetary policy and lower
integration with global financial markets.

Fitch expects Ukraine's general government deficit to reach 2.5%
in 2018, close to IMF commitments and lower than the 4.1% current
'B' median, as revenue underperformance will be compensated by
lower-than-budgeted expenditures, for example due to stronger
currency and lower inflation. Fitch expects election-related
loosening in 2019 to be constrained by limited sources of
financing. Nevertheless, the government will require tight
expenditure control to accommodate expenditure pressures in terms
of wages, social benefits and subsidies and in the event of
revenue underperformance.

General government debt will fall to 57.7% of GDP (67% including
government guarantees) in 2018, reflecting reduced foreign
borrowing, continued primary surpluses and moderate depreciation.
Weak growth, continued primary surpluses and modest currency
depreciation will support a gradual further reduction. Debt
dynamics remain subject to currency risks (68% foreign currency
denominated).

Growth will remain lower than 'B' category peers. Fitch expects
growth to accelerate to 3.3% in 2018 driven by domestic demand
and a favourable base effect given the suspension of trade with
the areas of the country not controlled by the government. Growth
will slow to 2.9% in 2019 owing to tighter monetary policy,
weaker global demand conditions and commodity prices as well as
more moderate wage increases. Investment (forecast at 21.2% of
GDP in 2018) is experiencing a cyclical recovery, but it will
remain below 'B' peers (22.5%).

The financial sector continues to represent a contingent
liability for the sovereign due to the large share of state-owned
banks (55% of total assets) and weak asset quality (55.7% NPLs in
2Q18) with high concentration in state-owned banks. Near-term
risks have declined due to improved capitalisation, higher
provisioning (NPLs net of provisions are 7.4%) and a more
favourable macroeconomic backdrop. Regulatory capital (at 16.4%
in 2Q18) has improved. Further capitalisation requirements
identified after a recent stress test (comprising 24 banks
representing 90% of banking sector assets) could be met through
the restructuring of bank balance sheets rather than relying
solely on additional capital injections.

Next year, Ukrainians will vote in presidential (March) and
parliamentary (October) elections. Recent polls put former Prime
Minister Yulia Tymoshenko in front for March's presidential
contest, but there is no clear favourite among declared
candidates, especially given a large share of 'undecided' voters.
Although Ukraine's high reliance on external official and market
financing will likely constrain space for a significant departure
from the current policy direction by the next administration,
populist anti-reform campaign platforms, short-term electoral
calculations and a fragmented political landscape with powerful
vested interests create risks for smooth progress under the
agreed SBA programme.

The unresolved conflict in eastern Ukraine remains a risk for
overall macroeconomic performance and stability. There are
constant clashes along the contact line, but a material
escalation of hostilities is not part of its base case scenario.
Ukraine received a favourable ruling from the UK Court of Appeal,
opening the door for a full trial on the USD3 billion outstanding
debt dispute with Russia. The case will be heard in the Supreme
Court. Fitch currently does not expect the dispute resolution to
impair the sovereign's capacity to access external financing and
meet external debt service commitments.

SOVEREIGN RATING MODEL (SRM) AND QUALITATIVE OVERLAY (QO)

Fitch's proprietary SRM assigns Ukraine a score equivalent to a
rating of 'B-' on the Long-Term Foreign-Currency (LT FC) IDR
scale.

Fitch's sovereign rating committee adjusted the output from the
SRM to arrive at the final LT FC IDR by applying its QO, relative
to rated peers, as follows:

  - Macro: +1 notch, to reflect Ukraine's strengthened monetary
    and exchange rate policy which supports improved
    macroeconomic performance and domestic confidence. Increased
    exchange rate flexibility allows the economy to absorb shocks
    without depleting reserves

  - External Finances: -1 notch, to reflect high external
    financing needs driven by rising sovereign external debt
    repayments; access to sufficient external market and official
    financing is dependent on regular and predictable progress
    under the agreed IMF SBA programme

Fitch's SRM is the agency's proprietary multiple regression
rating model that employs 18 variables based on three-year
centred averages, including one year of forecasts, to produce a
score equivalent to a LT FC IDR. Fitch's QO is a forward-looking
qualitative framework designed to allow for adjustment to the SRM
output to assign the final rating, reflecting factors within its
criteria that are not fully quantifiable and/or not fully
reflected in the SRM.

RATING SENSITIVITIES

The main factors that could, individually or collectively,
trigger positive rating action, are:

  - Increased external liquidity and external financing
    flexibility.

  - Improved macroeconomic performance and sustained fiscal
    consolidation leading to improved debt dynamics.

The main factors that could, individually or collectively,
trigger negative rating action, are:

  - Re-emergence of external financing pressures and increased
    macroeconomic instability, for example stemming from delays
    to disbursements from, or the collapse of, the IMF programme.

  - External or political/geopolitical shock that weakens
    macroeconomic performance and Ukraine's fiscal and external
    position.

KEY ASSUMPTIONS

Fitch does not expect resolution of the conflict in eastern
Ukraine or escalation of the conflict to the point of
compromising overall macroeconomic performance.

Fitch assumes that the debt dispute with Russia will not impair
Ukraine's ability to access external financing and meet external
debt service commitments.

The full list of rating actions is as follows:

Long-Term Foreign-Currency IDR affirmed at 'B-'; Outlook Stable

Long-Term Local-Currency IDR affirmed at 'B-'; Outlook Stable

Short-Term Foreign-Currency IDR affirmed at 'B'

Short-Term Local-Currency IDR affirmed at 'B'

Country Ceiling affirmed at 'B-'

Issue ratings on long-term senior unsecured foreign-currency
bonds affirmed at 'B-'

Issue ratings on long-term senior-unsecured local-currency bonds
affirmed at 'B-'

Issue ratings on short-term senior-unsecured local-currency
bonds affirmed at 'B'



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


DBS LAW: Failure to Settle Debts Prompts Administration
-------------------------------------------------------
John Hyde at The Law Society Gazette reports that Midlands-based
DBS Law Limited has entered administration after the breakdown of
a deal to settle debts.

According to The Gazette, a spokesperson for the firm said it
remains open for business and a buyer has already been lined up
to acquire the practice, which has offices in Birmingham and
Nottingham.

Documents filed with Companies House confirm the administration
came following the failure of a company voluntary arrangement
designed to pay creditors owed money by DBS, The Gazette
discloses.

The Gazette understands the appointment of administrators was
made weeks after the suspension of one of the firm's directors,
Davinder Singh Bal, admitted 1997, following a hearing at the
Solicitors Disciplinary Tribunal.

A notice to terminate the CVA, dated Oct. 11, said the firm had
been making regular payments to creditors as prescribed in the
agreement, but had recently been experiencing difficulties and
had no alternative but to enter administration, The Gazette
relates.

The document listed 26 creditors owed around GBP684,000 but which
had yet to submit a proof of debt form, The Gazette states.

A full statement of affairs has yet to be published by
administrators Eric Walls -- ericw@ksagroup.co.uk -- and
Wayne Harrison -- WayneH@ksagroup.co.uk -- of north-east firm KSA
Group, The Gazette notes.


EVANS CYCLES: Mike Ashley Buys Business Out of Administration
-------------------------------------------------------------
BBC News reports that billionaire Mike Ashley has announced a
deal to buy Evans Cycles which will see half of the bike chain's
shops close, resulting in hundreds of job losses.

The struggling firm was placed into administration before being
sold to Sports Direct International, BBC relates.

Evans, which is nearly 100 years old, has 62 shops and employs
1,300 people, BBC discloses.

It emerged last month that the retailer was seeking a rescue
deal, with accountancy firm PwC brought in as advisers, BBC
recounts.

According to BBC, Matt Callaghan -- matthew.callaghan@uk.pwc.com
-- joint administrator and a partner at PwC, said it had been a
very difficult year for Evans following the cold snap at the
start of 2018 and a lack of cash to invest in stores and online.

"A combination of losses, the capital expenditure requirements
and tightening credit has led to a liquidity crunch," BBC quotes
Mr. Callaghan as saying.


PATISSERIE VALERIE: To Hold Shareholder Vote Today
--------------------------------------------------
Justina Lee and Will Mathis at Bloomberg News report that
Patisserie Valerie's holding company is heading for a shareholder
vote today, Nov. 1, on management's rescue plan, giving aggrieved
investors an opportunity to make their voices heard, even if
there are few options to take action.

According to Bloomberg, shareholders will vote on whether to
approve the plan, which would dilute their holdings.  The 30
million new shares at a price of 50 pence each is a stark
contrast to the chain's stock price of 429.50 pence before
trading was suspended Oct. 10, Bloomberg discloses.

Dissatisfied holders may have no option but to accept
management's plan, Bloomberg states.

Patisserie Holdings Plc, led by Chairman Luke Johnson, discovered
on Oct. 9 that its books were incorrect, Bloomberg recounts.
Rather than the GBP28.8 million (US$36.9 million) in cash it said
it had in May, the cake-shop chain had a deficit of at least
GBP9.8 million, Bloomberg notes.  The company ousted its finance
chief, who was later arrested and then released, Bloomberg
relays.



                            *********

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

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

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


                            *********


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

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

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

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

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

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


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