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

                           E U R O P E

          Tuesday, December 4, 2018, Vol. 19, No. 240


                            Headlines


A U S T R I A

SCHUR FLEXIBLES: S&P Assigns Preliminary 'B' LongTerm ICR


I C E L A N D

WOW AIR: Indigo Partners Agrees to Invest in Business


I T A L Y

ALBA 10 SPV: Moody's Assigns Ba2 Rating to EUR75MM Class C Notes
PRO-GEST SPA: S&P Raises Long-Term ICR to 'BB', Outlook Stable


L U X E M B O U R G

LSF9 BALTA: S&P Lowers Issuer Credit Rating to B, Outlook Stable


N E T H E R L A N D S

NOSTRUM OIL: S&P Lowers Long-Term ICR to 'B-', Outlook Stable


P O L A N D

STAR ITS: Files Application for Bankruptcy


R U S S I A

ALFA-BANK: Fitch Affirms BB+ Long-Term IDRs, Outlook Stable
LEADER INVEST: S&P Alters Outlook to Pos. & Affirms 'B/B' ICRs
PIK GROUP: S&P Affirms 'B' Issuer Credit Rating, Outlook Stable


S P A I N

DIA GROUP: Mulls Rescue Options Following Financial Woes
SANTANDER HIPOTECARIO 3: Fitch Cuts Class C Notes Rating to Csf


T U R K E Y

ALLIANZ SIGORTA: Moody's Withdraws Ba1 IFS Rating


U N I T E D   K I N G D O M

ALLIED HEALTHCARE: Health Care Resourcing Acquires Business
GRAINGER PLC: S&P Raises Long-Term ICR to 'BB+', Outlook Stable
KIER GROUP: Launches GBP264-Mil. Emergency Rescue Rights Issue
MIPL GROUP: Moody's Lowers CFR to Ba2, Outlook Stable
RESIDENTIAL MORTGAGE 31: S&P Assigns CCC Rating to X1-Dfrd Notes

THOMAS COOK: S&P Alters Outlook to Negative & Affirms 'B+ LT ICR


                            *********



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A U S T R I A
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SCHUR FLEXIBLES: S&P Assigns Preliminary 'B' LongTerm ICR
---------------------------------------------------------
S&P Global Ratings assigned its preliminary 'B' long-term issuer
credit rating to Austria-based Schur Flexibles GmbH. The outlook
is stable.

S&P said, "We also assigned our preliminary 'B' issue and '3'
recovery ratings to the proposed EUR25 million revolving credit
facility (RCF) due 2024 and EUR275 million senior secured term
loan B due 2025. The recovery rating indicates our expectation of
meaningful (50%-70%; rounded estimate 50%) recovery of principal
in the event of a payment default.

"The final ratings will depend on our receipt and satisfactory
review of all final transaction documentation. Accordingly, the
preliminary ratings should not be construed as evidence of final
ratings. If S&P Global Ratings does not receive final
documentation within a reasonable time frame, or if final
documentation departs from materials reviewed, we reserve the
right to withdraw or revise our ratings. Potential changes
include, but are not limited to, use of loan proceeds, maturity,
size and conditions of the loans, financial and other covenants,
security, and ranking.

"Our rating reflects Schur's exposure to the very fragmented and
competitive flexible packaging market and S&P Global Ratings-
adjusted leverage of 5.8x for 2019." Although Schur is the fourth
largest flexible packaging player in Europe, its market share is
small at around 2%. It is smaller and geographically less
diversified than the top three European players--Amcor Ltd.
(BBB/Stable/A-2), Mondi (BBB+/Stable/--), and Constantia
Flexibles (not rated)."

Schur focuses on small and medium-sized customers, who make up
around 70% of its revenues. The company's end markets are
relatively stable and relate to food (66% of 2017 revenues),
health care (11%), specialty products (11%), and tobacco (12%).
Schur has leading niche positions in the European tobacco and
pharmaceutical segments.

Of its revenues, 30% are generated from the DACH region (Germany,
Austria, and Switzerland), 9% from Southern and Central Europe,
8% from the Nordics, and 22% from the U.K and Benelux (Belgium,
the Netherlands, and Luxembourg). The remaining 19% relates to
the rest of the world (including the U.S. and Asia). Schur's 23
plants are spread across Europe, allowing it to serve customers
at short notice. The majority of its revenues relate to
conversion (including printed, laminated films), and the
remainder to extrusion (the production of plastic films).
Although the group has longstanding customer relations and good
customer retention rates, most of its products as fairly
commoditized.

Schur has some customer concentration, particularly in the
tobacco and pharmaceutical segments. Its top 10 customers
generate about 30% of sales.

Schur has some raw material price exposure, mainly to resin. In
about 70% of sales, the company has no resin price exposure, as
input costs are directly passed through to end customers. The
remaining 30% of sales contracts stipulate resin price pass-
through mechanisms (quarterly adjustments), where Schur is able
to pass on price increases with a typical industry time lag of
three-to-six months. The purchasing power of its polymer trading
division (which purchases around twice the volumes that Schur
consumes) results in lower resin prices.

In the financial year (FY) ending December 2019, S&P estimates
pro forma sales of around EUR500 million and S&P Global Ratings-
adjusted EBITDA of EUR58 million, resulting in an adjusted EBITDA
margin of 11.4%. This includes the full-year contribution of the
acquisitions made in 2018 (UNI Packaging, Cats-Haensel, and
Nimax).

In 2018, Schur shouldered a series of one-off costs to address
operational issues faced in 2017: the implementation of new
tobacco packaging regulation, integration costs linked to the
recent acquisitions, and restructuring costs. Profitability was
also hit by resin price increases, which Schur was only able to
pass through with a timelag.

S&P said, "We expect EBITDA margins to remain weak and free
operating cash flow (FOCF) generation to remain negative in 2018.
Our assessment relies on the company's ability to achieve
expected cost savings, both at an EBITDA and FOCF level from 2019
onwards, with a significant improvement in margins expected as a
result.

"Schur's highly leveraged financial risk profile reflects our
adjusted debt to EBITDA of around 5.8x and funds from operations
(FFO) to adjusted debt of about 11.5%.

"Given the group's financial sponsor ownership, we do not
anticipate any significant leverage reduction. We have not
assumed any acquisitions but do not rule out opportunistic bolt-
on acquisitions."

S&P's base case assumes:

-- Eurozone GDP growth of 2.0% in 2018 and 1.7% in 2019,
    supported by domestic demand, exports, and low unemployment.

-- Revenue growth of 3% in FY2019 and FY2020. In 2019, this
    growth will primarily reflect the full-year contribution of
     acquisitions as well as additional sales to the
     confectionery, tea, and coffee segment. S&P also assumes some
     revenue growth in pharma, tobacco, cheese, and diary.

-- Adjusted EBITDA margins at 11.4% in FY2019 and 12% in FY2020,
    up from 7% in 2018 (on a pro forma basis). This improvement
    reflects the non-recurrence of the one-off costs seen in 2017
    and 2018 and the benefit from recent initiatives (footprint
    optimization; improved product mix).

-- Capital expenditure (capex) of approximately EUR22 million-
     EUR23 million in FY2019 and FY2020. Two thirds of these
     relate to maintenance and efficiency related investments.

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

  -- Adjusted debt to EBITDA of 5.8x in 2019 and 5.2x in 2020;

  -- FFO to debt of about 11.5% in 2019 and 13% in 2020; and

  -- Negative reported FOCF in 2018, improving to EUR6 million in
     2019 and EUR11 million in 2020.

S&P said, "The stable outlook reflects our expectation that Schur
will generate positive but weak FOCF of about EUR6 million in
2019, with the one-off costs that characterized 2017 and 2018
falling away. Over the following 12 months we expect adjusted
leverage to remain close to 5.8x and FFO to debt of about 11.5%.

"We could lower the rating if Schur experienced unexpected
customer losses or margin pressures -- due to resin or energy
price increases, or delays in the implementation of its cost
rationalizations -- preventing material deleveraging and
resulting in negative cash flows, with debt to EBITDA
persistently above 7.0x. We could also lower the rating if the
headroom under its financial maintenance covenant significantly
tightened or its financial policy became more aggressive, for
example through the implementation of dividend recaps.

"We view an upgrade as unlikely in the near term, given Schur's
high leverage, weak EBITDA margins and FOCF generation, and its
financial sponsor ownership. Any upside would most likely be
caused by a material improvement in the financial metrics, with a
decline in debt to EBITDA to materially below 5.0x and a
commitment from the sponsor to maintain debt to EBITDA below 5.0x
on a sustainable basis."



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I C E L A N D
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WOW AIR: Indigo Partners Agrees to Invest in Business
-----------------------------------------------------
Josh Spero at The Financial Times reports that the fortunes of
low-cost Icelandic airline Wow Air took another dramatic turn on
Nov. 30 when a US private equity business agreed to invest in it,
a day after rival Icelandair abandoned its takeover plan.

According to the FT, Indigo Partners, which already owns
Hungary's Wizz Air and Mexico's Volaris Airlines, said agreement
had been reached in principle for the investment but did not
disclose any terms.

On Nov. 27, Wow issued a profit warning and said it was working
on securing long-term funding, the FT recounts.

"Significant bad publicity about the financial health of the
company . . . ended up having a more negative impact on
the company's sales and credit position than anticipated," the FT
quotes Wow as saying.

The publicity came while Wow was trying to get away a EUR60
million bond issuance with a high interest rate of 9% in
September, the FT notes.  It also cited the collapse of low-cost
rival Primera for worsening sentiment in the sector and pressure
on cash flow from creditors who have demanded stricter payment
terms, the FT relates.



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I T A L Y
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ALBA 10 SPV: Moody's Assigns Ba2 Rating to EUR75MM Class C Notes
----------------------------------------------------------------
Moody's Investors Service has assigned the following definitive
ratings to the debts issued by Alba 10 SPV S.r.l.:

EUR408,400,000 Class A1 Asset-Backed Floating Rate Notes due
October 2038, Assigned Aa3 (sf)

EUR200,000,000 Class A2 Asset-Backed Floating Rate Notes due
October 2038, Assigned Aa3 (sf)

EUR130,000,000 Class B Asset-Backed Floating Rate Notes due
October 2038, Assigned A3 (sf)

EUR75,000,000 Class C Asset-Backed Floating Rate Notes due
October 2038, Assigned Ba2 (sf)

Moody's has not assigned a rating to the EUR 145,434,000 Class J
Asset-Backed Floating Rate Notes due October 2038 which are
issued at closing.

Alba 10 SPV S.r.l. is a cash securitisation of lease receivables
originated by Alba Leasing S.p.A. and granted to individual
entrepreneurs and small and medium-sized enterprises domiciled in
Italy mainly in the regions of Lombardia and Veneto.

RATINGS RATIONALE

The ratings of the Notes are primarily based on the analysis of
the credit quality of the underlying portfolio, the structural
integrity of the transaction, the roles of external
counterparties and the protection provided by credit enhancement.

Moody's notes as credit strengths of the transaction its static
nature as well as the structure's efficiency, provides for the
application of all cash collections to repay the Class A and B
Notes should the portfolio performance deteriorate beyond certain
limits (i.e. Class C interest subordination event). Other credit
strengths include (i) the granular portfolio composition as
reflected by low single lessee concentration (with the top lessee
and top 5 lessees group exposure being 0.86% and 3.67%
respectively); (ii) limited industry sector concentration (i.e.
lessees from top 2 sectors represent not more than 33.17% of the
pool with 17.57% in the building and real estate industry
according to Moody's classification); and (iii) no potential
losses resulting from set-off risk as obligors do not have
deposits and did not enter into a derivative contract with Alba
Leasing S.p.A. However, the transaction has several challenging
features, such as: (i) the impact on recoveries upon originator's
default (in Italian leasing securitisations future receivables
not yet arisen, such as recoveries, might not be enforceable
against the insolvency of the originator); and (ii) the potential
losses resulting from commingling risk that are not structurally
mitigated but are reflected in the credit enhancement levels of
the transaction. Moody's valued positively the appointment of
Securitisation Services S.p.A. as back up servicer on the closing
date. Finally, Moody's considered a limited exposure to fixed-
floating interest rate risk (5.29% of the pool reference a fixed
interest rate) as well as basis risk given the discrepancy
between the interest rates paid on the leasing contracts compared
to the rate payable on the Notes and no hedging arrangement being
in place for the structure.

Key collateral assumptions:

Mean default rate: Moody's assumed a mean default rate of 9.4%
over a weighted average life of 2.9 years (equivalent to a Ba3/B1
proxy rating as per Moody's Idealized Default Rates). This
assumption is based on: (1) the available historical vintage
data; (2) the performance of the previous transactions originated
by Alba Leasing S.p.A. (including the still outstanding Alba 7
SPV S.r.l., Alba 8 SPV S.r.l. and Alba 9 SPV S.r.l.); and (3) the
characteristics of the loan-by-loan portfolio information.
Moody's also took into account the current economic environment
and its potential impact on the portfolio's future performance,
as well as industry outlooks or past observed cyclicality of
sector-specific delinquency and default rates.

Default rate volatility: Moody's assumed a coefficient of
variation (i.e. the ratio of standard deviation over the mean
default rate explained) of 54.7%, as a result of the analysis of
the portfolio concentrations in terms of single obligors and
industry sectors.

Recovery rate: Moody's assumed stochastic recoveries with a mean
recovery rate of 35%, a standard deviation of 20%, and a 10.5%
recovery rate mean upon insolvency of the originator. The mean
recovery assumption is primarily based on the characteristics of
the collateral-specific loan-by-loan portfolio information,
complemented by the available historical vintage data.

Portfolio credit enhancement: the aforementioned assumptions
correspond to a portfolio credit enhancement of 21%, that takes
into account the Italian current local currency country risk
ceiling (LCC) of Aa3.

As of the valuation date (October 12, 2018), the portfolio
principal balance amounted to EUR 950,696,912.63. The portfolio
is composed of 11,518 leasing contracts granted to 7,852 lessees,
mainly small and medium-sized companies. The leasing contracts
were originated between 2010 and 2018, with a weighted average
seasoning of 0.66 years and a weighted average remaining life of
approximately 5.84 years. The interest rate is floating for 95%
of the pool while the remaining part of the pool bears a fixed
interest rate. The weighted average spread on the floating
portion is 2.48%, while the weighted average interest on the
fixed portion is 2.12%.

Assets are represented by receivables belonging to different sub-
pools: real estate (19.20%), equipment (57.37%) and auto
transport assets (21.89%). A small portion (1.54%) of the pools
is represented by lease receivables whose underlying asset is an
aircraft, a ship or a train. The securitized portfolio does not
include the so-called "residual value instalment", i.e. the final
instalment amount to be paid by the lessee (if option is chosen)
to acquire full ownership of the leased asset. The residual value
instalments are not financed - i.e. it is not accounted for in
the portfolio purchase price - and is returned back to the
originator when and if paid by the borrowers.

Key transaction structure features:

Reserve fund: The transaction benefits from EUR 8,134,000 reserve
fund, equivalent to 1% of the original balance of the rated
Notes. The reserve will amortise to a floor of 0.5% in line with
the rated Notes.

Counterparty risk analysis:

Alba Leasing S.p.A. acts as servicer of the receivables on behalf
of the Issuer, while Securitisation Services S.p.A. is the back-
up servicer and the calculation agent of the transaction.

All of the payments under the assets in the securitised pool are
paid into the servicer account and then transferred on a daily
basis into the collection account in the name of the Issuer. The
collection account is held at Citibank, N.A. (A1 long term bank
deposits rating), acting through its Milan Branch with a transfer
requirement if the rating of the account bank falls below Baa2.
Moody's has taken into account the commingling risk within its
cash flow modelling.

Principal Methodology:

The principal methodology used in these ratings was "Moody's
Approach to Rating ABS Backed by Equipment Leases and Loans"
published in December 2015.

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

The Notes' ratings are sensitive to the performance of the
underlying portfolio, which in turn depends on economic and
credit conditions that may change. The evolution of the
associated counterparties risk, the level of credit enhancement
and Italy's country risk could also impact the Notes' ratings.


PRO-GEST SPA: S&P Raises Long-Term ICR to 'BB', Outlook Stable
--------------------------------------------------------------
S&P Global Ratings raised the long-term issuer credit rating on
Italy-based Pro-Gest SpA to 'BB' from 'BB-'. The outlook is
stable.

S&P said, "We also raising the issue rating on the EUR250 million
3.25% senior unsecured notes due 2024 to 'BB' from 'BB-'. The
recovery rating remains unchanged at '4'. The recovery rating
indicates our expectation of average (30%-50%; rounded estimate
40%) recovery of principal in the event of payment default.

"The upgrade follows Pro-Gest's strong operating performance in
2017 and 2018 so far, which have facilitated a reduction in
financial leverage that we expect to be sustainable for at least
the next 24 months."

The company's outperformance reflects favorable market
conditions. Since China started restricting waster paper imports
in the fourth quarter of 2017, containerboard producers have
benefitted from low input prices (old corrugated cardboard [OCC]
and waste paper). S&P doesn't expect this to change in the near
term.

However, new capacity additions (including from Pro-Gest) and a
potential slowdown in the European economy have led to a slight
decline in containerboard prices in fourth-quarter 2018, which
S&P expects to continue over the near term.

S&P said, "Pro-Gest has now largely finalized the conversion of a
former newspaper plant to a state-of-the-art containerboard plant
in Mantova. Production testing began in October 2018 and is
scheduled to fully start in January 2019, slightly after our
initial expectations of July 2018. We expect the plant to break
even in 2018, based on an output of 30,000 tons. From 2019
onward, we expect output to increase to 192,000 tons."

The Mantova plant will produce light-weight containerboards (70-
160 grams per square meter), which are increasingly popular and
well suited for e-commerce. This will entail a reduction of
revenues per square meter (containerboard prices are weight-
based), but S&P expects this to be more than offset by higher
volumes.

The group expects to receive approval in 2019 to increase the
plant's production to 400,000-450,000 tons per year. Because
approval is still pending, S&P has not factored this higher
production into its projections.

Pro-Gest benefits from its leading niche position, technological
know-how, cost leadership, strong EBITDA margins, good
manufacturing footprint, and long-standing customer relations.
S&P said, "Our assessment of its business risk profile also takes
into account its small size and strong reliance on Italy. Pro-
Gest has high operational leverage and some customer
concentration, particularly in the containerboard segment. We
also consider the standardized nature of Pro-Gest's products and
its exposure to volatile input costs (including energy, OCC, and
containerboard prices)."

S&P said, "We assess Pro-Gest SpA's financial risk profile as
significant, reflecting our expectation that S&P Global Ratings-
adjusted leverage will drop to around 2.9x by December 2018 and
that free cash flows will be positive from 2019 onward. The
negative free cash flows in 2017 and 2018 primarily related to
the build-out of the Mantova plant, which has now been completed.

"The stable outlook reflects our expectation that Pro-Gest will
continue to capitalize on its solid client relationships and
leading niche position in Italy. In 2019, we expect revenues to
grow by around 14% and EBITDA margins to improve as
containerboard production ramps up in Mantova. Although FOCF will
remain undermined by heavy investments at Mantova in 2018, we
expect positive FOCF starting from 2019.

"We could raise the rating upon the successful ramp-up of
production at the Mantova plant, the realization of the expected
margin improvements, and generation of sustainably positive FOCF
with FFO to debt comfortably above 37%. We would also expect a
financial policy that supports such ratios, and to see track
records of steady earnings growth and the ability to consistently
meet its budget, including top-line growth and profit margins.

"We could lower the rating if FOCF remains negative in 2019, for
example due to delays in the ramp-up of production at Mantova. We
could also lower the rating if FFO to debt falls below 20% or
EBITDA margins decline below 19%. This would most likely result
from unexpected costs at Mantova, a strong decline in
containerboard prices, or significant legal claims. A more
aggressive financial policy -- if the company made a large
payment to shareholders or a large debt-funded acquisition that
prevented material deleveraging -- could also trigger a downgrade
of the rating."



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L U X E M B O U R G
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LSF9 BALTA: S&P Lowers Issuer Credit Rating to B, Outlook Stable
----------------------------------------------------------------
S&P Global Ratings lowered to 'B' from 'B+' its long-term issuer
credit rating on Luxembourg-based LSF9 Balta Issuer S.A. (Balta).
The outlook is stable.

S&P said, "At the same time, we lowered our issue rating on the
existing EUR68 million super senior revolving credit facility
(RCF) maturing in 2021 to 'BB-' from 'BB'. The '1' recovery
rating on the debt is unchanged. We also lowered our issue rating
on the EUR235 million outstanding senior secured notes to 'B'
from 'B+'. We revised the recovery rating on the notes to '4'
from '3', indicating our expectation of average recovery
prospects (30%-50%; rounded estimate: 35%) in the event of
payment default.

"The downgrade reflects our view that Balta will continue to face
a number of operational challenges in the next 12 months, which
will pressure its profitability and free operating cash flow
generation. For these reasons, we revised downward our base-case
projections, which lead to weaker forecast operating metrics. We
now expect the company to post S&P Global Ratings-adjusted debt
to EBITDA of 5.0x-5.5x in the next 12 months; we previously
expected this to stay below 5.0x."

Balta faces a difficult trading environment in the U.K., one of
its main markets for the residential segment, representing
slightly below 20% of total sales in 2018. U.K. retailers
continue to experience significant challenges, leading to reduced
retail footfall and less need for new or renovated flooring. For
example, Carpetright, one of Balta's main U.K. clients, has
entered into a company voluntary arrangement due to negative
performance in 2018 and is closing some stores. In addition,
weakened consumer confidence and higher competition have hit
sales volumes.

In the rugs division (representing about 30% of revenues, and
about 36% of EBITDA as of September 2018), the difficult trading
environment that developed in Europe in the second quarter
persisted in the third quarter of the year with organic revenue
decline of about 15% year-on-year (YoY) in the first nine months
of 2018. Even though the U.S. rugs business seems to be returning
to growth (the company announced they expect an improvement in
the last quarter), after successfully regaining some previously
lost market shares, especially on the outdoor rugs segment, we
believe that the challenges in Europe may persist and could hit
the entire rug division's performance in the first half of 2019.

In the residential division (representing about 32% of revenues,
and 17% of EBITDA as of September 2018), S&P now expects a bigger
organic revenue decline in 2018 than anticipated, due to a
gradual structural shift in the residential segment away from
soft to hard flooring, which will continue to weigh on the entire
category. Although Balta completed its operational footprint
organization in 2018, the benefits are still largely offset by
significant volume declines.

Balta also continues to face raw material price inflation.
Polypropylene and polyamide (plastics used for carpet and rug
production) costs have been gradually rising in the past 18
months, and Balta has not been able to fully recover the loss
through price increases, considering the competitive environment
and its limited pricing power.

SP said, "We understand that the group is preparing strategic
responses to the different challenges. For example, Balta intends
to reposition its residential product portfolio toward higher-
margin segments. The group also plans to gradually increase
prices as it introduces new products to the market. However, we
believe the implementation is exposed to execution risk and could
be subject to delays through 2019.

"That said, we continue to view positively Balta's commercial
division (representing about 33% of revenues, and 43% of EBITDA
as of September 2018), which is performing well in terms of
organic growth (with about 12% YoY increase during 2018) and
benefits from the positive contribution of Bentley Mills, the
U.S.-based commercial carpet manufacturer acquired in March 2017.

"We also continue to view positively the group's long-term
customer relationships with large international retailers and
furniture chains. Balta benefits from leading market positions in
its niche markets.

"We adjusted Balta' gross debt in 2017 by adding factoring lines,
capitalized financing fees, and about EUR35 million of operating
lease commitments. Balta remains a private equity-controlled
company (Lone Star has 54% of total stake upon full vesting of
the management incentive program).

"The stable outlook reflects our view that Balta will continue to
report adjusted EBITDA margins of about 10%-12% in the next 12
months and gradually stabilize its cash flow generation in 2019
thanks to a gradual business repositioning and lower
restructuring costs. We believe the group will maintain S&P
Global Ratings-adjusted leverage of 5.0x-5.5x, and that the
EBITDA interest coverage will remain close to 3.0x in the next 12
months.

"We could lower our rating if Balta's credit metrics weakened
such that EBITDA interest coverage approaches 2x. This could
result for example from a material deterioration in profitability
(about 300 basis points) combined with revenue decline. We could
also lower the rating if free operating cash flow continued to be
materially negative in 2019. This would most likely be the result
of raw material prices continuing to increase, persisting revenue
declines in the rugs and residential divisions, and lower-than-
expected performance in the commercial segment. Finally, we could
lower our rating if Balta's liquidity position deteriorated.

"We could raise the rating if Balta's S&P Global Ratings-adjusted
debt-to-EBITDA metrics reduced below 5x on a sustained base, and
if it generated a good track record of materially positive free
operating cash flow. This would most likely result from improved
trading conditions in Europe, a return to positive organic growth
in the rugs division, and continued strong growth in the
commercial division."



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


NOSTRUM OIL: S&P Lowers Long-Term ICR to 'B-', Outlook Stable
-------------------------------------------------------------
S&P Global Ratings said that it had lowered to 'B-' from 'B' its
long-term issuer credit rating on Netherlands-registered
hydrocarbons exploration and production company Nostrum Oil and
Gas PLC, which operates in Kazakhstan. The outlook is stable.

S&P said, "At the same time, we lowered to 'B-' from 'B' our
long-term issue ratings on the company's senior unsecured notes,
issued by Nostrum's financial subsidiary Nostrum Oil & Gas
Finance B.V. These instruments are guaranteed by all the group's
entities."

The downgrade reflects the lower production guidance for 2019 of
30,000 boepd (against our previous estimates of 40,000 boepd), as
well as our expectation that Nostrum will not be able to
demonstrate sizable deleveraging because of it. Nostrum's
concentration of wells -- 42 currently in operation -- and
relatively small production size have made its performance
vulnerable to operational issues at the existing wells.

The company's gradual decline in production from 46,000 boepd in
2013 to 40,000 boepd in 2015-2016 and 39,000 boepd in 2017
accelerated in 2018 when two production wells were idled because
of water inflow. We now see that our previous estimates of 15%-
25% annual production growth in 2019-2020 translating into
sizable credit metric improvements are unlikely to be fulfilled.
Nostrum has not achieved any meaningful success with drilling in
new areas, and we see limited likelihood of material production
increase in 2019-2020. In S&P's updated base case, it assumes
only very modest oil and gas output recovery to 38,000 boepd in
2020, allowing the company to maintain just stable credit
metrics.

S&P said, "At the same time, we see no reasons to believe that
production will fall below 30,000 boepd, which is a level that
should allow for at least neutral FOCF. We also recognize the
company's sizable cash position of more than $100 million and
absence of debt maturities until 2022 as supportive factors for
the rating."

Nostrum earlier expressed ambitious plans to increase production
to 100,000 boepd in 2020. To do this, Nostrum has been
constructing a $500 million new gas treatment facility, GTU3.
However, the completion of this project has been delayed several
times from the original date of commissioning in 2016. Now we
assume the commissioning will be final only in early 2019.
Compounding this is the fact that the ramp up of GTU3 will
require additional volumes and is therefore dependent on
Nostrum's success in boosting production.

S&P said, "An important variable factor is the drilling budget
for the next two years, which we think would largely depend on
results achieved in exploratory drilling in new areas of the
field, as well as factual oil prices.

"The stable outlook on Nostrum reflects our expectation of no
significant production growth in 2019 compared with the 31,000
boepd which we anticipate the company will report for 2018. We
think that this level of production will allow the company to
generate neutral to modestly positive FOCF without a threat to
the liquidity position and maintain the credit metrics
commensurate with a 'B-' level of FFO to debt at 10%-11% and debt
to EBITDA of 5.0x-5.5x in the next two years.

"We might lower the ratings if Nostrum's liquidity weakens with
its cash position falling below $50 million as a result of
negative FOCF generation. That might be driven by further
declines in production to sustainably below 30,000 boepd,
significantly higher capital expenditures, or the Brent oil price
settling below $60/bbl."

Although not expected in the next 12 months, ratings upside might
arise if Nostrum achieves and sustains oil production growth
resulting in strongly positive FOCF and credit metric improvement
so that FFO to debt comfortably is above 12% and debt to EBITDA
is well below 5.0x, with no liquidity squeezes.

  Ratings List
  Downgraded
                                     To             From
  Nostrum Oil and Gas PLC
   Issuer Credit Rating              B-/Stable/--   B/Negative/--

  Nostrum Oil & Gas Finance B.V.
   Senior Unsecured                  B-             B
   Zhaikmunai LLP
   Senior Unsecured                  B-             B



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


STAR ITS: Files Application for Bankruptcy
------------------------------------------
Reuters reports that Qumak SA said on Nov. 30 its units, Star ITS
Sp. z o.o. and Skylar Sp. z o.o., filed applications for
bankruptcy.

Star ITS Sp. z o.o. and Skylar Sp. z o.o. are based in Poland.



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


ALFA-BANK: Fitch Affirms BB+ Long-Term IDRs, Outlook Stable
-----------------------------------------------------------
Fitch Ratings has affirmed the Long-Term Foreign- and Local-
Currency Issuer Default Ratings of Russia-based Joint Stock
Company Alfa-Bank at 'BB+' and the Long-Term IDR of its Cyprus-
based holding company ABH Financial Limited at 'BB'. The Outlooks
are Stable.

KEY RATING DRIVERS

Alfa-Bank

IDRS, VIABILITY RATING (VR)

Alfa-Bank's 'BB+' Long-Term IDRs are based on its 'bb+' VR, the
highest level for Russian privately-owned banks. The affirmation
reflects limited changes in Alfa-Bank's credit profile since the
last review. The ratings continue to reflect a well-developed
domestic franchise, a track record of sound management, the
bank's access to top tier Russian borrowers/depositors, strong
funding profile and liquidity, good asset quality, solid capital
position, and sound profitability. The ratings also take into
account some uncertainty and risks stemming from a recent changes
in the senior management team and an emphasis on rapid retail
expansion in the new strategy.

Fitch's view of the bank's solid franchise reflects the fact that
it serves 15.8 million retail clients, accounting for more than
20% of the Russian economically active population. Alfa-Bank has
a significant share of the deposits market and specifically 9%
share of individuals' current accounts. Interest-free funding,
comprising around half of the bank's deposits, benefits its
funding costs and pricing power.

Fitch assesses this year's significant changes in the bank's
senior management team as moderately negative, given the scale of
changes and the uncertainty they create for strategy execution.
The appointment of a new chief executive in August 2018 has been
followed to date by changes at other senior positions, including
chief of treasury and chief operating officer. Fitch believes the
sustainability of the bank's business model and corporate culture
may suffer, given that new appointments were filled with external
hires.

Alfa-Bank's asset quality has been consistently improving since
the last crisis due to strong recoveries. The absence of large
new corporate defaults (Alfa-Bank generally lends to larger and
financially more stable Russian companies), and low single-digit
default rates in predominantly unsecured retail lending have
helped keep asset-quality metrics almost unchanged since end-
2017.

Stage-3 loans were a moderate 7% of gross loans at end-1H18. Non-
performing loans (overdue by more than 90 days), which were
included in impaired exposures, stood at a mere 2% of gross
loans. Loan loss allowances coverage was a moderate 40% of
impaired loans, supported by Alfa-Bank's strong record of
distressed loan recoveries and its collateral coverage of
impaired exposures.

Profitability moderately suffered in 1H18 as the total
comprehensive income fell to an annualised 14% of average equity
in 1H18 from 17% for full year 2017, reflecting the sensitivity
of the bank's performance results to movements in the USD/RUB
exchange rate. However, core pre-impairment profit increased to a
high 6.0% of average gross loans compared with 4.5% for 2014-
2017, thanks to continued strengthening of the net interest
margin.

Capitalisation remains adequate and stable. Fitch Core Capital
(FCC) divided by Basel II risk-weighted assets (RWA) was 14.8% at
end-1H18 (14.0% at end-2017). However, Alfa-Bank's regulatory
capitalisation is tighter due to higher than 100% risk weights on
certain loans: the core Tier I regulatory capital ratio was at
10.0% and the total regulatory capital ratio was 14.5% at end-
1H18. However, these levels are comfortably above the fully
loaded requirements with maximum buffers to be phased in over the
next year.

Funding profile and liquidity are rating strengths. After this
week's USD500 million repayment of senior unsecured Eurobonds the
bank retains a solid USD6 billion cushion of cash and short-term
investment-grade bank placements to comfortably meet upcoming
senior and subordinated bond repayments, i.e. USD0.6 billion in
2019, USD1.1 billion in 2020 and USD0.9 billion in 2021, net of
repurchased securities. Half of Alfa-Bank's unencumbered liquid
assets, at 34% of total liabilities at end-1H18, comprised
repoable securities.

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

Given Alfa-Bank's considerable franchise and previous state
support to other (smaller) Russian banks, in Fitch's view there
is a moderate probability of support from the Russian
authorities, as reflected in the '4' SR and 'B' SRF.

Alfa-Bank's owners have supported the bank in the past, and in
Fitch's view, would have a strong propensity to do so again, if
required. Their ability to provide support is also likely to be
significant, as they seem to have little debt and significant
cash reserves following past asset sales. However, Fitch does not
factor shareholder support into the ratings given the limited
visibility of the shareholders' current financial position and
Alfa-Bank's significant size.

ABHFL

IDRS, SR

Fitch has affirmed ABHFL's 'BB' Long-Term IDR and '3' SR given
the limited changes in Fitch's view of a support probability to
this entity from Alfa-Bank. In assessing support prospects, Fitch
expects that default risks for the bank and the holding company
are likely to be highly correlated due to a high degree of
fungibility of capital and liquidity within the group, which is
managed as a single entity.

ABHFL's double leverage, defined by Fitch as equity investments
in subsidiaries divided by the holdco's equity, fell to a
moderate 114% at end-1H18 from 156% at end-1H17, sustaining the
entity's deleveraging in recent years. The currently moderate
volume of ABHFL's third-party debt further supports close
alignment of its ratings with those of Alfa-Bank.

The one-notch differential between the bank's and the holding
company's ratings reflects the absence of any consolidated
regulation for two entities due to them being incorporated in
different jurisdictions. However, Fitch does not expect this to
be a significant constraint on Alfa-Bank's support of its holdco.

DEBT RATINGS

Alfa-Bank AND ABFHL

The senior unsecured debt of both entities is rated in line with
their Long-Term IDRs in respective currencies.

Alfa-Bank's 'BB' subordinated debt rating is notched down once
from the VR, which incorporates: (i) zero notches for incremental
non-performance risk; and (ii) a notch for higher loss severity
relative to senior unsecured creditors.

Alfa-Bank's perpetual notes, classified as AT1-eligible, are
rated 'B', four notches lower than the bank's VR. The notching
comprises: (i) two notches for higher loss severity due to their
deep subordination relative to senior unsecured creditors; and
(ii) a further two notches for non-performance risk, as Alfa-Bank
has an option to cancel coupon payments at its discretion. The
latter is more likely if the capital ratios fall in the capital
buffer zone, although this risk is somewhat mitigated by Alfa-
Bank's stable financial profile.

RATING SENSITIVITIES

Alfa-Bank's VR and IDRs could be upgraded in case of a further
improvement in the Russian operating environment and consistently
robust bank financial metrics in terms of asset quality,
profitability and further capitalisation. Conversely, Alfa-Bank's
ratings could be downgraded in case of a significant
deterioration of asset quality, erosion of capital without the
latter being replenished by shareholders, and/or significant
liquidity outflows.

An upgrade of the Russian sovereign rating (BBB-/Positive) could
be a pre-requisite for an upgrade of Alfa-Bank, as Fitch is
likely to maintain at least a notch difference between the
ratings of the sovereign and the bank. However, a sovereign
upgrade would not automatically result in an upgrade of Alfa-Bank
without further strengthening of the bank's financial profile,
which is indicated by the Stable Outlook on Alfa-Bank's IDRs.

A downgrade of the sovereign (not currently expected given the
Positive Outlook on the rating) would most likely lead to a
downgrade of the bank.

ABFHL's ratings would likely move in tandem with Alfa-Bank's
Long-Term Foreign-Currency IDR. However, the ratings could be
aligned in case of a sustainable and significant reduction in
ABFHL's third-party debt and its double leverage ratio.

The debt ratings are sensitive to changes in respective issuer
ratings.

The rating actions are as follows:

Joint Stock Company Alfa-Bank

  Long-Term Foreign- and Local-Currency IDRs: affirmed at 'BB+';
  Outlook Stable

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

  Viability Rating: affirmed at 'bb+'

  Support Rating: affirmed at '4'

  Support Rating Floor: affirmed at 'B'

  Senior unsecured debt: affirmed at 'BB+'

  Subordinated debt: affirmed at 'BB'

Alfa Bond Issuance Public Limited Company

  Senior unsecured debt: affirmed at 'BB+'

  Dated subordinated debt: affirmed at 'BB'

  Perpetual subordinated debt: affirmed at 'B'

ABH Financial Limited

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

  Short-Term IDR: affirmed at 'B'

Alfa Holding Issuance plc

  Senior unsecured debt: affirmed at 'BB'


LEADER INVEST: S&P Alters Outlook to Pos. & Affirms 'B/B' ICRs
--------------------------------------------------------------
S&P Global Ratings revised its outlook on Russia-based property
developer Leader Invest JSC (Leader) to stable from positive and
affirmed the 'B/B' long- and short-term issuer credit ratings.

S&P said, "The outlook revision to stable reflects our view that
despite some operating underperformance in 2018, compared to our
previous forecasts, Leader will continue to strengthen its
position as high quality property developer operating, and
growing, in Moscow. We previously forecasted revenue growth of
more than 50% in 2018 and more than 25% in 2019. We understand
now that Leader's revenues in 2018 will demonstrate more moderate
growth because the company has restaggered its deliveries.

"That said, we believe that the company is on track to build up
its scale in 2019-2020. In particular, we expect that the launch
of new large-scale projects (Nagatino and Lobachevsky 120) will
support top-line build-up.

"We also note the company has 22 high quality real estate
development projects currently on sale in Moscow, which is more
than other Moscow developers according to Leader's management.
Furthermore, Leader has 20 projects under active construction,
which is one of the strongest pipelines in this segment in
Moscow.

"Our rating on Leader remains supported by its progress in
lengthening its debt maturity profile and improving its liquidity
position. In February 2018, Leader issued a five-year Russian
ruble (RUB) 5 billion ($75 million) bond with a put option in
February 2021, and used proceeds to materially reduce its short-
term debt, including partial repayment of the RUB3 billion bond
that had a put option in June 2018." The company's average debt
maturity has increased to more than two years as a result.
Additionally, Leader has signed a loan agreement with Sberbank
for RUB14.6 billion. The loan is a six-year, project-based
secured loan, and is currently largely undrawn.

Leader benefits from being a subsidiary of large Russia-based
investment holding, Sistema (B+/Stable). Sistema provided Leader
with 42 land plots from former automatic telephone exchange
buildings in established residential areas across the city of
Moscow. Moreover, Sistema provided Leader with two larger land
plots to be developed as master plan development projects, and
S&P expects that Sistema will provide Leader with additional land
plots in the next two to three years. That said, we do not factor
in any strong extraordinary support to Leader from Sistema.

S&P said, "We note that Leader has historically demonstrated
above-industry-average profitability with S&P Global Ratings-
adjusted EBITDA margins of around 30%. We understand that this
margin is underpinned by a premium to the market average price
due to Leader's attractive product offering, as most of Leader's
projects are positioned in the niche area of midrise apartment
blocks in established residential areas where investment in
infrastructure is lower compared to greenfield development
projects. Leader mostly receives these land plots from its parent
Sistema.

"Less positively, we understand that Leader's EBITDA margin will
decline to around 20% in 2018 because it has incurred additional
marketing expenses promoting three new brands, including
Happiness--an umbrella brand for Leader's spot projects. We also
understand that Leader has incurred additional costs to improve
its operational control and project surveillance systems, and to
reshuffle the subcontractor base. Nevertheless, we believe that
in 2019-2020 Leader's EBITDA margin will recover to historical
levels because we believe part of the costs incurred in 2018 are
one-off nature.

"We understand that competition in the key segment of Leader's
operations--spot (infill) development -- is currently limited and
Leader has the strongest position in this segment. In other
segments -- largescale greenfield projects (Lobachevsky 120) and
largescale redevelopment projects (Nagatino) -- competition is
significantly higher, and Leader will still need to position
itself against other market players.

"We believe that Leader remains compliant with the new regulatory
requirement to maintain a separate project vehicle for each
project. We also understand that Leader should have reasonably
good access to project finance loans from banks, which are meant
to substitute homebuyers' advances. These loans will be backed by
homebuyers' cash in escrow accounts, and have lower interest
rates compared to normal loans, as we understand it. Positively,
Leader has a track record of cooperation with Sberbank, which has
extended a long-term secured facility to finance the Lobachevsky
120 project.

"We understand that Leader has moderate exposure to Russian
mortgage rate dynamics. This is because over 40% of Leader's new
sales are mortgage-backed. The average mortgage rate in Russia
has continued to decline in recent years to reach a historical
minimum of around 9.5% at mid-2018, and then started to grow to
mirror the key rate increase in September 2018 from 7.25% to
7.50%. We expect that moderate mortgage rate growth will not have
a material negative impact on mortgage affordability, and
subsequently on Leader's performance, in the near term.

"Our view of Leader's financial risk profile reflects our
base-case expectation of moderate leverage ratios, with gross S&P
Global Ratings-adjusted debt to EBITDA (which takes into
consideration our adjustment to debt of around RUB2 billion to
factor in potential acquisitions of land plots for construction)
below 4x in 2018-2019 (compared to 2.2x in 2017) and minimal
reported net debt decreasing by 21% in first-half 2018 compared
to the previous reporting date. We also expect EBITDA interest
coverage of close to 1.5x in 2018 improving to about 3.5x in 2019
(compared to 1.8x in 2017). Importantly, in our calculation of
interest expense we currently include a significant financing
component, imposed by the application of IFRS 15, and which
reflects the time value of homebuyers' advances. This financing
component does not trigger any cash outflows. As a result, we
expect that Leader's EBITDA to cash interest coverage will remain
above 3.0x in 2018-2019 (although closer to the lower end of the
range in 2018).

"The inherent cash-flow volatility, arising from a long operating
cycle, weighs on Leader's financial risk profile, in our view. We
take into account the multiyear volatility of working capital,
which is specific to developers and homebuilders, due to the
capital-intensive business and length of projects. We estimate
that Leader will generate moderately negative free operating cash
flow because it is still an active growth phase."

S&P's base case factors in the following assumptions:

-- Consumer price inflation of 3.0% in 2018 and 4.0% in 2019
    (compared with 3.7% in 2017), and Russian GDP growth of 1.6%
    in 2018 and 1.7% in 2019 (compared with 1.5% in 2017).

-- Leader's sustainable strong market share in Moscow's high
    quality development segment.

-- Strong completion pipeline, in particular in 2019 when growth
    of completions in the spot (infill) segment will be coupled
    with completions in the Nagatino and Lobachevsky projects.

-- Rises in apartment prices above the market as we expect that
    many of Leader's project will be selling at a more advanced
    stage of construction cycle. That said, S&P expects that
     weighted average price growth in 2018-2019 will decline as
     the share of spot (infill) construction, which is in the
     premium pricing segment, will gradually decline in favor of
     the projects in business segment, where average prices are
     lower.

-- Revenue growth of around 20% in 2018 and above 50% in 2019,
    based on expected construction progress.

-- EBITDA margin of close to 20% in 2018 and recovery to around
    30% in 2019-2020, which is close to the company's
    expectations.

-- The average cost of debt about 11.3% (compared to around
     12.4% a year before) resulting from a domestic bond placement
     in 2018 at a favorable rate.

-- No dividends.

-- Around RUB2 billion annual cash outflow in 2018-2019 for land
    acquisitions.

Based on these assumptions, S&P arrives at the following credit
measures over the next 12-18 months:

-- S&P Global Ratings-adjusted debt to EBITDA of around 3.9x in
    2018 declining to around 2.0-2.2x in 2019, compared with 2.5x
    in 2016 and 2.2x in 2017.

-- EBITDA to interest ratio above 1.5x in 2018 and above 3.0x in
    2019 (compared with 1.9x in 2017 and 5.3x a year before).

S&P said, "The stable outlook on Leader reflects our expectation
of top-line growth in 2019-2020 and EBITDA margin recovery,
supported by the launch of new projects and by operational risk
management and efficiency improvements. We also expect that
Leader will successfully meet new industry regulations and that
it will maintain adequate liquidity and access to capital
markets. Finally, we do not expect any rating pressure from
Sistema.

"We could revise the outlook to negative if Leader's margin does
not improve. This could happen as a result of construction delays
(which we currently do not expect), a higher-than-expected cost
base, or a negative market environment resulting in leverage
above 4x without near-term recovery prospects. We could also take
a negative rating action if the company's liquidity position
weakens or its debt maturity profile declines below 2x, which
could be the case if the company does not proactively refinance
its maturing debt obligations.

"We could take a positive rating action if Leader succeeds in
increasing its revenue base to close to RUB20 billion in 2019-
2020, while maintaining an EBITDA margin of close to or more than
30%. In our view, this may contain leverage below 3.0x. An
upgrade would also require Leader to maintain average debt
maturity of more than two years, and adequate liquidity. There
could be additional upside if we considered that the company's
position within Sistema had strengthened and we believed it was
likely to receive extraordinary support from Sistema."


PIK GROUP: S&P Affirms 'B' Issuer Credit Rating, Outlook Stable
---------------------------------------------------------------
S&P Global Ratings affirmed its 'B' long-term issuer credit
rating on Russia-based residential property developer JSC PIK
Group. The outlook is stable.

S&P's rating affirmation reflects its view that PIK will maintain
its leading position in the Russian real estate development
market and its S&P Global Ratings-adjusted debt to EBITDA will
remain below 3.0x as a result of sustained cash collection from
pre-sales. PIK's leverage increased to 5.9x at the end of 2016
and 4.3x at the end of 2017 after the acquisition of Morton, one
of the largest housing developers in the greater Moscow region.

Furthermore, consolidation of Morton has weighed on PIK's
margins, with adjusted EBITDA margin declining to around 8.1% in
2017 from 19.1% a year before, as a result of revaluation to
market value of Morton's projects and recognition of most
earnings on those projects when the group completed the
acquisition at end-2016. S&P now expect the margin to improve in
2018, although moderately, driven by integration of Morton,
vertical integration into production of pre-fabricated panels and
by economies of scale. This should also result in a stronger debt
payback capacity, with debt to EBITDA falling below 3.0x in 2018-
2019 (before taking into consideration IFRS 15 standard
application starting from 2018, which allows for earlier
recognition of revenues from part of contracts).

Additionally, PIK's business profile remains supported by its
strong pre-sales and cash flow collection. PIK's cash collection
in the first nine months of 2018 increased by 15.2% to Russian
ruble RUB156.3 billion (US$2.4 billion), while volumes sold over
January-September of this year increased by 6.4% to 1.3 million
square meters (sqm).

S&P said, "Our assessment of PIK's business risk also continues
to reflect the company's status as the largest developer in
Russia. PIK's current construction volume (6.8 million sqm) is
around 40% higher than that of LSR (not rated), the second
Russian developer. PIK has an attractive land bank covering six
years of operations, and a reputation for fast and reliable
construction project execution. Importantly, PIK benefits from a
strong order book, with around 80% of projects pre-sold before
completion.

"We also see PIK's exposure to the dynamic Moscow Metropolitan
area as a strength. PIK's operations are concentrated in Moscow
and Moscow region where 86% of its sellable area (12,030 thousand
sqm in total) is located. We believe that demand for new housing
in these regions will remain more robust than the average demand
across Russia, due to sustainably strong immigration in Moscow
from the Russian regions. We also factor in PIK's presence in
eight large Russian cities, with the highest exposure in
Novorossiysk (the Russian south) and Yekaterinburg (the Urals).

"In our view, rating constraints still include PIK's high
exposure to the cyclical and capital-intensive property
development industry (which comprises 100% of PIK's EBITDA),
significant competition in the industry, and concentration on
Russia, where we assess country risk as high. We expect
oversupply in the market--which we believe is more pronounced in
the economy segment than in the comfort and business segments--
will persist and put pressure on price growth. This is balanced
by some contraction of new housing supply in 2018, in particular,
in the Moscow region.

"We also assume that as a developer focusing on economy segment
housing and generating 65% of sales from mortgage-backed
transactions, PIK is quite sensitive to mortgage rate changes. We
understand that after reaching the historic minimum of around
9.5%, the average mortgage rate in Russia is starting to
demonstrate moderate growth, mirroring the key rate increase.
That said, we believe that a small increase of mortgage rates
should not materially affect near-term demand for new housing.

"We assume that PIK will remain resilient to changing industry
regulation that aims to protect cash of homebuyers and
incentivize developers to use project finance lines, backed by
homebuyers' cash restricted in banks' escrow accounts. This is
mainly because the company maintains solid access to funding
sources due to strong relationship with banks. In particular, we
factor in that, in October 2018, PIK signed a RUB19.9 billion
debut project finance facility with VTB Bank (which is also PIK's
shareholder with a 7.6% stake) at a favorable rate.

"We believe that the current market environment supports the
market consolidation trend, and we assume that PIK might have
appetite for acquisitions. That said, we understand that PIK
would focus on new land acquisitions and would try to minimize
effective cash outflows. We also understand that PIK has adopted
a new dividend policy targeting at least 30% of operating cash
flow. We therefore continue to assess the company's financial
policy as a negative rating factor.

"The stable outlook reflects our view that PIK will likely
sustain its leading market position and maintains its adjusted
debt to EBITDA below 3.0x, which we consider commensurate with
the current rating.

"We could raise the rating if PIK's credit protection metrics
improve because of stronger cash collection than we currently
anticipate, with gross debt to EBITDA below 3x and EBITDA
interest coverage rising to more than 6x. Rating upside would
also depend on PIK's ability to maintain adequate liquidity and
an absence of near-term refinancing risk.

"We could lower the rating if the level of operating cash flow or
profitability is lower than our base-case projections, resulting
in debt to EBITDA higher than 4x or a five-year weighted-average
EBITDA interest coverage lower than 3x. This could occur in the
event of a higher-than-expected cost base or lower demand for new
apartments and lower presales (which we currently do not expect),
combined with still-large cash outflows for new developments."
Negative rating pressure might also materialize if PIK's debt
maturity profile shortens or if liquidity were to materially
deteriorate.


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


DIA GROUP: Mulls Rescue Options Following Financial Woes
--------------------------------------------------------
Ian Mount at The Financial Times reports that it has been a grim
few months for Spanish supermarket chain Dia Group.

The company's chairwoman and chief executive have resigned, the
head of finance has been fired, while its dividend has been
slashed and its debt downgraded to junk, the FT relates.
The bad news has crushed the group's shares, which have this year
plummeted more than 80% to under EUR0.70, and pushed down the
company's long-term debt to around half its face value, the FT
discloses.

The question now on the lips of analysts and investors is whether
Spain's third-largest grocery chain can turn itself round, the FT
notes.

Today, Dia and its franchisees have a huge network of more than
7,400 stores across Spain, Portugal, Brazil and Argentina -- many
in prime locations, the FT states.

But Dia's greatest hope may be Russian billionaire Mikhail
Fridman's holding company, LetterOne, which through its L1 Retail
fund has the biggest stake in Dia with a holding of 29%,
according to the FT.

Some think it is possible Mr. Fridman will launch a bid for
complete control of the group as he seeks to step up his attempts
to revive it, the FT states.

Indeed, LetterOne has hired Paul J Taubman's PJT Partners to
recapitalize Dia through a capital increase and to investigate a
possible takeover, the FT relays, citing Spanish financial daily
elEconomista.

According to the FT, a spokesperson for the Madrid office of PJT
Partners confirmed that it had been contracted to "study
different restructuring scenarios" but declined to comment on
those options.

To avoid breaking its covenants, chief executive Antonio Coto,
said the company was looking to sell its Clarel home and beauty
chain, the FT relates.  But that may not be enough to avoid a
renegotiation of its debt, which Dia management is attempting, or
a dilutive capital raise, the FT notes.


SANTANDER HIPOTECARIO 3: Fitch Cuts Class C Notes Rating to Csf
---------------------------------------------------------------
Fitch Ratings has upgraded 19, downgraded two and affirmed 24
tranches of nine Spanish RMBS transactions. Four Outlooks are
Positive and the rest are Stable.

The transactions comprise Spanish mortgages serviced by Kutxabank
S.A. (BBB+/Stable/F2) for AyT CGH Caja Vital 1 (Vital 1), Banco
de Sabadell S.A. (unrated) for Caixa Penedes 1 (Penedes 1), Banco
Bilbao Vizcaya Argentaria S.A. (A-/Stable/F2) for BBVA RMBS 1-3,
Bankia S.A. (BBB-/Positive/F3) for Madrid RMBS 1-3, and Banco
Santander S.A. (A-/Stable/F2) for Santander Hipotecario 3
(Santander 3).

KEY RATING DRIVERS

High Seasoning and Asset Performance

The rating actions reflect Fitch's expectation of stable credit
trends given the significant seasoning of the securitised
portfolios of more than 12 years, the prevailing low interest
rate environment and the Spanish macroeconomic outlook. Three-
month plus arrears (excluding defaults) as a percentage of the
current pool balance remains below 1% in all cases as of the
latest reporting date.

Credit Enhancement (CE) Trends

Fitch expects CE ratios to remain stable for Penedes 1 as the pro
rata amortisation of the notes will most likely continue. This
will switch to sequential when the outstanding portfolio balance
represents less than 10% of its original amount (currently 23%)
or sooner if certain performance triggers are breached.

The CE ratios of the senior notes for the remaining eight
transactions should continue to increase, driven by their
sequential amortisation, which Fitch expects to continue.

Payment Interruption Risk Caps Ratings

The 'A+sf' rating on the class A notes of Vital 1, BBVA RMBS 1
and BBVA RMBS 2 reflects the exposure of these transactions to
payment interruption risk, as Fitch assesses the available cash
reserves as insufficient to cover stressed senior fees, net swap
payments and stressed senior note interest amounts in the event
of a servicer disruption.

High Cumulative Defaults (BBVA RMBS, Madrid RMBS and Santander 3)
Cumulative gross defaults for these seven transactions are high
but show signs of continuous flattening, ranging between 6.1% for
BBVA RMBS 1 and 22.6% for Madrid RMBS 3 relative to the initial
portfolio balances as of the latest reporting periods. Defaults
are defined as loans in arrears for more than six, 12 and 18
months for Madrid RMBS, BBVA RMBS and Santander 3, respectively.

These high levels of cumulative defaults are above the average
5.8% for other Spanish RMBS rated by Fitch. This is partly
explained by the high original loan-to-value ratios of these
portfolios. The large volume of defaults has caused various
tranches to carry negative CE ratios, by which Santander 3's
junior notes are the most affected, and interest payments on
junior tranches of BBVA RMBS 3, Madrid RMBS 3 and Santander 3
have moved to a subordinate position within the waterfall of
payments.

RATING SENSITIVITIES

A worsening of the Spanish macroeconomic environment, especially
employment conditions, or an abrupt shift of interest rates could
jeopardise the underlying borrowers' affordability. This could
have negative rating implications, especially for junior tranches
that are less protected by structural CE.

For Vital I, BBVA RMBS 1 and BBVA RMBS 2, as long as payment
interruption risk is not fully mitigated, the maximum achievable
rating of these transactions will remain capped at 'A+sf' in
accordance with Fitch's Structured Finance and Covered Bonds
Counterparty Rating Criteria.

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
pools 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. Fitch did not undertake a review of the information
provided about the underlying asset pools ahead of the
transactions' initial closing. The subsequent performance of the
transactions over the years is consistent with the agency's
expectations given the operating environment and Fitch is
therefore satisfied that the asset pool information relied upon
for its initial rating analysis was adequately reliable. 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.

SOURCES OF INFORMATION

The information here was used in the analysis.

Loan-by-loan data sourced from the European Data Warehouse as at:

June 2018 for Penedes 1

July 2018 for BBVA RMBS 3 and Santander 3

August 2018 for BBVA RMBS 1-2 and Madrid RMBS 1-3

September 2018 for Vital 1

Issuer and servicer reports provided by Europea de Titulizacion
SGFT, S.A. as at:

September 2018 for BBVA RMBS 1 and BBVA RMBS 2

August 2018 for BBVA RMBS 3

Issuer and servicer reports provided by Haya Titulizacion SGFT,
S.A. as at:

May 2018 for Vital

Issuer and servicer reports provided by Titulizacion de Activos
SGFT, S.A. as at:

July 2018 for Penedes 1

August 2018 for Madrid RMBS 1-3

Issuer and servicer reports provided by Santander de
Titulizacion, S.A. as at:

July 2018 for Santander 3

MODELS

ResiGlobal.

EMEA Cash Flow Model.

Fitch has taken the following rating actions:

BBVA RMBS 1:

Class A2 (ISIN ES0314147010): upgraded to 'A+sf' from 'BBB+sf';
Outlook Stable

Class A3 (ISIN ES0314147028): upgraded to 'A+sf' from 'BBB+sf';
Outlook Stable

Class B (ISIN ES0314147036): upgraded to 'BBBsf' from 'B+sf';
Outlook Positive

Class C (ISIN ES0314147044): upgraded to 'Bsf' from 'CCCsf';
Outlook Positive

BBVA RMBS 2:

Class A2 (ISIN ES0314148018): upgraded to 'A+sf' from 'BBBsf';
Outlook Stable

Class A3 (ISIN ES0314148026): upgraded to 'A+sf' from 'BBBsf';
Outlook Stable

Class A4 (ISIN ES0314148034): upgraded to 'A+sf' from 'BBBsf';
Outlook Stable

Class B (ISIN ES0314148042): upgraded to 'BBBsf' from 'BB-sf';
Outlook Positive

Class C (ISIN ES0314148059): upgraded to 'Bsf' from 'CCsf';
Outlook Positive

BBVA RMBS 3:

Class A1 (ISIN ES0314149008): upgraded to 'Bsf' from 'CCCsf' ;
Outlook Stable

Class A2 (ISIN ES0314149016): upgraded to 'Bsf' from 'CCCsf';
Outlook Stable

Class B (ISIN ES0314149032): affirmed at 'CCsf'; Recovery
Estimate (RE) revised to 30% from 0%

Class C (ISIN ES0314149040): downgraded to 'Csf' from 'CCsf'; RE
maintained at 0%

Madrid RMBS 1:

Class A2 (ES0359091016) affirmed at 'A-sf'; Outlook Stable

Class B (ES0359091024) affirmed at 'BBB-sf'; Outlook Stable

Class C (ES0359091032) upgraded to 'Bsf' from 'CCCsf'; Outlook
Stable

Class D (ES0359091040) affirmed at 'CCCsf'; RE revised to 90%
from 0%

Class E (ES0359091057) affirmed at 'CCsf'; RE maintained at 0%

Madrid RMBS 2:

Class A2 (ES0359092014) affirmed at 'A-sf' ; Outlook Stable

Class A3 (ES0359092022) affirmed at 'A-sf'; Outlook Stable

Class B (ES0359092030) affirmed at 'BBB-sf'; Outlook Stable

Class C (ES0359092048) upgraded to 'B+sf' from 'CCCsf'; Outlook
Stable

Class D (ES0359092055) affirmed at 'CCCsf'; RE revised to 90%
from 0%

Class E (ES0359092063) affirmed at 'CCsf'; RE revised to 50% from
0%

Madrid RMBS 3:

Class A2 (ES0359093012) upgraded to 'BBBsf' from 'BB-sf'; Outlook
Stable

Class A3 (ES0359093020) upgraded to 'BBBsf' from 'BB-sf'; Outlook
Stable

Class B (ES0359093038) upgraded to 'BB+sf' from 'Bsf'; Outlook
Stable

Class C (ES0359093046) upgraded to 'B-sf' from 'CCCsf'; Outlook
Stable

Class D (ES0359093053) affirmed at 'CCsf'; RE revised to 40% from
0%

Class E (ES0359093061) affirmed at 'Csf'; RE maintained at 0%

Penedes 1:

Class A (ISIN ES0313252001): affirmed at 'A+sf'; Outlook Stable

Class B (ISIN ES0313252019): affirmed at 'BBBsf'; Outlook Stable

Class C (ISIN ES0313252027) affirmed at 'BBsf'; Outlook Stable

Santander 3:

Class A1 (ISIN ES0338093000) affirmed at 'CCCsf'; RE maintained
at 90%

Class A2 (ISIN ES0338093018) affirmed at 'CCCsf'; RE maintained
at 90%

Class A3 (ISIN ES0338093026) affirmed at 'CCCsf'; RE maintained
at 90%

Class B (ISIN ES0338093034) affirmed at 'CCsf'; RE revised to 70%
from 0%

Class C (ISIN ES0338093042) downgraded to 'Csf' from 'CCsf'; RE
maintained at 0%

Class D (ISIN ES0338093059) affirmed at 'Csf'; RE maintained at
0%

Class E (ISIN ES0338093067) affirmed at 'Csf'; RE maintained at
0%

Class F (ISIN ES0338093075) affirmed at 'Csf'; RE maintained at
0%

Vital 1:

Class A notes (ISIN ES0312273081): affirmed at 'A+sf', Outlook
Stable

Class B notes (ISIN ES0312273099): upgraded to 'A+sf' from 'A-
sf'';Outlook Stable

Class C notes (ISIN ES0312273107): upgraded to 'BB+sf' from
'BBsf'; Outlook Stable

Class D notes (ISIN ES0312273115): affirmed at 'CCCsf'; RE
maintained at 50%



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


ALLIANZ SIGORTA: Moody's Withdraws Ba1 IFS Rating
-------------------------------------------------
Moody's Investors Service has withdrawn the ratings (insurance
financial strength Ba1, National Scale insurance financial
strength Aaa.tr) on Allianz Sigorta AS. At the time of the
withdrawal, the outlook was Negative.

RATINGS RATIONALE

Moody's has decided to withdraw the ratings for its own business
reasons.

LIST OF AFFECTED RATINGS

Issuer: Allianz Sigorta AS

Withdrawals:

Insurance Financial Strength, previously Ba1

NSR Insurance Financial Strength, previously Aaa.tr

Outlook Action:

Outlook changed to Ratings Withdrawn from Negative



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


ALLIED HEALTHCARE: Health Care Resourcing Acquires Business
-----------------------------------------------------------
Gill Plimmer at The Financial Times report that Allied
Healthcare, one of Britain's largest home care providers has been
sold just weeks after the care regulator warned it was on the
brink of bankruptcy and may have to cease providing services.

According to the FT, the company, which provides services to
13,500 people across 150 local authorities in the UK, and
out-of-hours GP services for the NHS, has been bought by Health
Care Resourcing Group, which runs recruitment agency CRG
Healthcare, for an undisclosed amount.

Ian Munro, group chief executive of CRG, said all of Allied's
existing contracts would be transferred and that it was working
with local authorities and regulatory bodies to guarantee no
disruption to people's care, the FT relates.

"It's very much business as usual," the FT quotes Mr. Munro as
saying.

The company had agreed an emergency rescue plan in May, blaming
its troubles in part on an increase in the minimum wage, which it
said had added GBP65,000 per week to the payroll of its 8,700
employees, the FT discloses.  A squeeze on local authority
budgets for social care and a rise in the cost of nurses and
doctors as a result of tighter immigration rules had also
contributed to its problems, the FT notes.

In October, the Care Quality Commission warned local authorities
to make contingency plans after it said it had not received
"adequate assurance that [Allied Healthcare] has, or will have,
the ongoing funding or new investment necessary to ensure the
business can operate" beyond November 30, 2018, the FT recounts.


GRAINGER PLC: S&P Raises Long-Term ICR to 'BB+', Outlook Stable
---------------------------------------------------------------
S&P Global Ratings raised its long-term issuer credit rating on
U.K.-based residential real estate company Grainger PLC to 'BB+'
from 'BB'.

S&P also affirmed its 'BBB-' issue rating on Grainger's senior
secured notes. The '1' recovery rating on these notes is
unchanged, reflecting its rounded estimate of 95% recovery in the
event of default.

The upgrade follows Grainger's announcement that it will acquire
the 75% of GRIP that it did not own from Dutch pension fund, APG.
It will finance most of the deal through an equity rights issue.
The company will therefore generate a larger share of rental
income and reduce its reliance on property sales, which S&P views
as more variable. This has improved S&P's view of Grainger's
financial risk profile.

Grainger launched GRIP as a joint venture with APG in 2013, and
already manages the properties. S&P expects the operational
impact to be minimal; indeed, Grainger could see some cost
savings. The acquisition will bring around 1,700 private rented
sector (PRS) units worth GBP697 million gross asset value under
Grainger's control, and, more importantly, provide it with
additional recurring rental income.

Although management's strategy over the years has been to focus
more on rental income-producing investment properties and reduce
its reliance on property trading, taking control of GRIP marks a
significant step up in the PRS asset base over our previous base
case. S&P estimates that PRS will now make up over 50% of
Grainger's gross asset value (GAV).

Most of the GBP396 million acquisition will be funded through a
GBP347 million fully underwritten equity rights issue. S&P views
this choice as positive. Grainger will also fully consolidate
GRIP's GBP217 million outstanding debt, which will likely mean
that its financial ratios will remain broadly similar. S&P
expects Grainger to satisfy its financial policy of maintaining a
loan-to-value ratio of below 45%. The company has also
successfully reduced its cost of debt to around 3.2% through its
recent refinancing activities.

The GRIP acquisition will enhance the scale and scope of the
business, increasing the wholly owned property portfolio to about
GBP2.8 billion from GBP2.2 billion. Nevertheless, S&P's
assessment of Grainger's business risk profile remains unchanged.
Grainger achieved positive metrics in its 2018 financial year
(FY), including a 4.0% overall like-for-like rental growth, an 8%
increase in net rental income, and continued solid sales
performance.

GRIP's assets are primarily based in London and the southeast,
where Grainger already has significant exposure. It is feasible
that this part of the U.K. housing market will be the most
affected by Brexit uncertainties in the short-to-medium term. S&P
said, "However, we are conscious of the difference between the
PRS segment and the home ownership market. In the longer term, we
expect to see sustained tenant demand for PRS homes, given the
significant undersupply of housing in the U.K. and the increasing
proportion of renting versus home ownership in the U.K. We
therefore view Grainger's market standing as the largest listed
U.K. owner and trader of residential real estate assets as
supportive for our business risk assessment."

Grainger also continues to invest heavily in its PRS pipeline, as
it has increased its secured pipeline to GBP988 million
(including GRIP's pipeline) in FY2018 from GBP651 million in
FY2017. This will provide more recurring rental income for the
business in the coming years, and bring Grainger's income mix
more in line with other European residential real estate players.
That said, the leasing contracts in Grainger's PRS portfolio have
relatively short tenures, at about two years, compared with
continental European peers.

S&P said, "The stable outlook reflect our view that the
increasing proportion of rental income implies robust revenues in
next 12-24 months as we see demand from tenants remaining solid
in Grainger's main geographic locations, even with the Brexit
uncertainty. Overall, we estimate Grainger will maintain an
interest coverage ratio around 3.2x and a ratio of debt to debt
plus equity below 45%.

"We could lower our rating if Grainger fails to maintain an
EBITDA interest coverage ratio of above 3x or if debt to debt
plus equity rises above 50% on a sustainable basis. We would also
view a large fall in revenue caused by a severe drop in U.K.
house prices or declining rental income as negative.

"We could raise the rating if Grainger materially decreases the
exposure of its company cash flows to sales of regulated
tenancies, and fulfilled some characteristics of a REIT, growing
substantially the absolute earnings base it derives from rental
operations.

"We could also raise the rating if Grainger were to maintain an
interest coverage ratio above 3.8x and a ratio of debt to debt
plus equity of below 35% on a sustainable basis."


KIER GROUP: Launches GBP264-Mil. Emergency Rescue Rights Issue
--------------------------------------------------------------
Gill Plimmer and Andrew Whiffin at The Financial Times report
that Kier Group, the construction and support services business,
launched a GBP264 million emergency rescue rights issue on
Nov. 30 as it warned that lenders were seeking to cut their
exposure to the UK building sector.

The company said it was planning to offer 64.5 million new shares
at 409p per share, a discount of 46 per cent to the closing price
on Nov. 29, the FT relates.  The FTSE 250 group's shares, which
have fallen more than 40% this year, fell a further 17% following
the announcement, the FT notes.

Kier Group, which last year had revenues of GBP4.2 billion,
employs more than 20,000 people, and has construction and public
services divisions, the FT discloses.

Kier, as cited by the FT, said that its net debt had increased
from GBP186 million in June to GBP624 million at the end of
October.

The rights issues will ease fears over the health of the company,
which had been one of the most heavily shorted stocks by hedge
funds betting that the share price would fall, the FT states.

According to the FT, the company said the deal was fully
underwritten and the cash would be received by Dec. 20 and 21.
The proceeds would be used to speed up its net debt reduction
plans and strengthen its balance sheet, the FT says.


MIPL GROUP: Moody's Lowers CFR to Ba2, Outlook Stable
-----------------------------------------------------
Moody's Investors Service has downgraded the corporate family
rating of MIPL Group Limited (Mondrian) to Ba2 from Ba1. Moody's
concurrently assigned a Ba2-PD probability of default rating to
MIPL Group Limited. The rating outlook remains stable.

RATINGS RATIONALE

The downgrade to Ba2 from Ba1 primarily reflects deterioration in
the company's market position and assets under management (AUM)
due to sustained net client outflows. These outflows occurred in
the context of a long period of sustained global equity market
growth, which has meant challenging investment performance for
the asset managers in the value space, such as MIPL Group. The
firm's ability to regain its competitive position will be a
challenge given the ongoing shift within the industry to more
passive management and Mondrian's investment performance results.

Moody's does not believe the company's improving leverage profile
offsets the weakening market position, and therefore leads the
rating agency to put greater emphasis on the persistent net
outflows that continue to weigh on the firm's top line revenue
and profitability over the other published rating triggers. While
Moody's does not see a near term catalyst that would reverse the
negative trend in the company's operating fundamentals, the
positioning of the outlook at stable reflects the company's
manageable debt and its solid position within the Ba2 rating
category despite some persistent business challenges.

Mondrian's credit profile has weakened as it lost AUM and failed
to stem net client outflows. Mondrian reported $8.3 billion of
net outflows for the last 12 months ending Q3 2018 and firm AUM
is down 23% to $60.8 billion from its peak of $79.3 billion in
July 2014. Mondrian's top line has also declined 26% over this
same period, lowering its profitability, although its low cost
base means it has retained an EBITDA margin above 50%..

As an active, value-oriented investment manager, Mondrian must
navigate industry pain points arising from the secular rotation
of assets into passive products and alternatives. The steps the
firm has been taking to strengthen its business, via geographical
expansion, wider channels of distribution and organic product
development, have yet to materialize and may not be enough, in
Moody's view, to offset the negative impact the deterioration of
the firm's business profile has had on Mondrian's overall credit
profile. Mondrian's product diversification is low as its AUM
remain heavily concentrated in equity strategies (95% of its
AUM). Its geographical footprint is very limited with more than
90% of its AUM stemming from US investors and Mondrian's investor
base is also concentrated, making the firm more vulnerable to
changes in investor preferences.

Mondrian's financial flexibility continues to be an important
credit support of its Ba2 rating. Mondrian has continued to
materially deleverage its balance sheet - the firm's financial
leverage was 0.3 times EBITDA as of September 30, 2018 as
calculated by Moody's from 0.9 times at the end of 2014. Mondrian
has made voluntary loan prepayments on the backed senior secured
bank credit facility of MIP Delaware, LLC of $62 million in 2017
and $44 million in 2016, bringing the outstanding balance, due in
March 2020, to $31 million.

WHAT COULD CHANGE RATING UP / DOWN

Although unlikely in the near term, upward pressure on the rating
could result from: (1) sustained net inflows, resulting in
revenue growth in excess of 20%; (2) AUM retention rate
consistently above 85% and replacement rate above 90%; (3)
broadening of the product mix and distribution channels for a
better resilience to market trends; and (4) increased
diversification of the client base by type and regions.

Downwards rating pressure could result from: (1) continued
sustained net outflows that would negatively affect revenues and
result in a persistent decline in management fees; (2) a decline
in the AUM retention rate to below 75%; (3) an increase in gross
debt/EBITDA to above 2x; and (4) a substantial decline in pre-tax
income margin below 7.5%.

MIPL Group Limited, headquartered in London, is an independent,
privately held asset management firm, specialized in value
investment style. The firm had $60.8 billion of assets under
management as of September 30, 2018. MIPL Group Limited is the
parent company of MIP Delaware, LLC, the issuing entity.

LIST OF AFFECTED RATINGS

Issuer: MIPL Group Limited

Downgrade:

Corporate Family Rating, downgraded to Ba2 from Ba1

Assignment:

Probability of Default Rating, assigned Ba2-PD

Outlook Action:

Outlook remains Stable

Issuer: MIP Delaware, LLC

Downgrade:

Backed Senior Secured Bank Credit Facility, downgraded to Ba2
from Ba1

Outlook Action:

Outlook remains Stable


RESIDENTIAL MORTGAGE 31: S&P Assigns CCC Rating to X1-Dfrd Notes
----------------------------------------------------------------
S&P Global Ratings assigned its credit ratings to Residential
Mortgage Securities 31 PLC's (RMS 31) class A, B-Dfrd, C-Dfrd,
D-Dfrd, E-Dfrd, F1-Dfrd, and X1-Dfrd notes. S&P's ratings address
the timely receipt of interest and the ultimate repayment of
principal on the class A notes, and the ultimate payment of
interest and principal on the other rated classes of notes. At
closing, RMS 31 also issued unrated class F2, F3, X2, and Z
notes.

RMS 31 is a securitization of a pool of buy-to-let and owner-
occupied residential mortgage loans to nonconforming borrowers,
secured on properties in England, Scotland, Wales, and Northern
Ireland.

The collateral pool comprises seasoned loans from a number of
originators including Southern Pacific Mortgages Ltd. (48.09%),
Preferred Mortgages Ltd. (35.42%), and London Mortgage Company
Ltd. (13.19%). At closing, the issuer purchased the portfolio
from the seller (Kayl PL S.a.r.l.) and obtained the beneficial
title to the mortgage loans. The majority (71.48%) of the initial
pool was previously securitized in transactions, which S&P rated.
These transactions have already redeemed.

At closing, the issuer used the proceeds from the class Z notes
to fund the general reserve fund at 3.0% of the class A to F3
notes' balance. The target balance of the general reserve fund
remains 3.0% of the class A to F3 notes' closing balance until
the class A to F2 notes are fully redeemed. Thereafter, the
general reserve fund target amount is zero.

There is also a liquidity reserve, which is funded from principal
receipts if the general reserve fund amounts fall below 1.5% of
the outstanding balance of the class A to F3 notes. The required
balance of the liquidity reserve is 2% of the class A notes and
amortizes in line with the class A notes. Funding the liquidity
reserve is not a debit on the principal deficiency ledger (PDL).
However, using the liquidity reserve to pay senior fees or the
class A notes' interest would cause a debit to the PDL.

The notes' interest rate is based on an index of three-month
LIBOR. Within the mortgage pool, all but a handful of the loans
are linked to the Bank of England base rate or three-month LIBOR.
There is no swap in the transaction to cover the interest rate
mismatches between the assets and liabilities.

Kensington Mortgage Company acts as the mortgage administrator
for all of the loans in the transaction.

The class X1-Dfrd notes are not supported by any subordination or
the general reserve fund. S&P said, "In our analysis, the class
X1-Dfrd notes are unable to withstand the stresses we apply at
our 'B' rating level. Consequently, we consider that there is a
one-in-two chance of a default on the class X1-Dfrd notes and
that these notes are reliant upon favorable business conditions
to redeem."

S&P said, "Our ratings reflect our assessment of the
transaction's payment structure, cash flow mechanics, and the
results of our cash flow analysis to assess whether the rated
notes would be repaid under stress test scenarios. Subordination
and the reserve fund provide credit enhancement to the notes.
Taking these factors into account, we consider the available
credit enhancement for the rated notes to be commensurate with
the ratings that we have assigned.

"Our cash flow output for the class E-Dfrd and F1-Dfrd notes
indicates a higher rating level, but we consider the currently
assigned ratings to be more appropriate, based on our sensitivity
analysis. Additionally, the class B-Dfrd notes pass our cash flow
stresses at a 'AAA' level, but we have not assigned our 'AAA
(sf)' rating to this class of notes as it can defer interest."

  RATINGS ASSIGNED

  Residential Mortgage Securities 31 PLC

  Class         Rating            Amount
                                (mil. GBP)
  A             AAA (sf)          240.41
  B- Dfrd       AA+ (sf)           11.90
  C- Dfrd       AA (sf)            13.48
  D- Dfrd       A+ (sf)            12.69
  E- Dfrd       BBB+ (sf)          16.66
  F1- Dfrd      BB (sf)             8.72
  F2            NR                  9.52
  F3            NR                  3.99
  X1-Dfrd       CCC (sf)            6.34
  X2            NR                  3.18
  Z             NR                  9.53

  NR--Not rated.


THOMAS COOK: S&P Alters Outlook to Negative & Affirms 'B+ LT ICR
----------------------------------------------------------------
S&P Global Ratings said that it revised to negative from stable
its outlook on U.K.-based tour operator Thomas Cook Group PLC
(Thomas Cook). At the same time, S&P affirmed its 'B+' long-term
issuer credit rating on the company.

S&P said, "We also affirmed our 'B+' issue rating on the senior
unsecured notes issued by Thomas Cook and its fully owned
subsidiary Thomas Cook Finance 2 PLC. The recovery rating on the
senior unsecured notes is unchanged at '3', reflecting our
expectation of meaningful recovery of principal (50%-70%; rounded
estimate: 60%) in the event of a payment default."

The outlook revision to negative reflects the significant
deterioration in Thomas Cook's operating performance, cash flow
generation, and credit metrics in the fiscal year ending Sept.
30, 2018 (FY2018), and the operating challenges and event risks
that may affect the speed and level of the company's recovery
during FY2019.

On Nov. 27, 2018, Thomas Cook announced very weak results for
FY2018, including a decline in underlying group EBIT (before
exceptional costs) to GBP250 million from the GBP320 million-
GBP330 million the company guided at the beginning of FY2018. S&P
said, "We now expect that Thomas Cook will report negative free
operating cash flow (FOCF) of about GBP150 million in FY2018 due
to materially lower EBIT, higher exceptional cash costs than we
expected, and working capital outflows. Based on this, we expect
an S&P Global Ratings-adjusted debt-to-EBITDA ratio of around
5.9x (versus our previous expectation of 4.6x-4.7x) at year-end
2018, well above the level we deem commensurate with a 'B+'
rating."

This underperformance is mainly due to an unusually hot summer in
Europe in 2018, which prompted many prospective customers in the
U.K. and Northern Europe to take holidays in their country of
residence. This resulted in lower demand for late holiday
bookings and caused an oversupply of tour packages in the market,
fierce competition, and heavy discounts. The situation in the
U.K. tour operator segment was particularly difficult, as EBIT
declined to GBP16 million in FY2018 from GBP52 million in FY2017,
due to the hot summer, strong competition, and hotel cost
inflation in the Spanish holiday market that forced Thomas Cook
to make severe cuts in the prices of its tour packages.

Thomas Cook's airline operations delivered an improved year-on-
year performance, but were still negatively affected by
disruption in the European airspace. Specifically, Air Traffic
Control strikes led to flight delays and ultimately to material
compensation that Thomas Cook paid to affected passengers.
Additionally, delays experienced by airlines re-registering
aircraft from the Air Berlin fleet also impacted Thomas Cook, and
resulted in higher wet leasing costs for summer flights. As a
result, the irregularity costs in the airline segment were GBP58
million, or 73% higher than last year. Underperformance, combined
with significant exceptional costs, resulted in adjusted debt to
EBITDA increasing to 5.9x in FY2018, from 4.8x in FY2017.

S&P said, "We believe that 2019 will be a challenging year for
Thomas Cook, in terms of it addressing the performance of its
U.K. tour operations and sizing its capacity appropriately, given
high event risks that may affect demand and an uncertain Brexit
outcome. Thomas Cook is taking actions to de-risk its business
plan, such as reducing its capacity for 2019 and stopping the
various cash-consuming projects it undertook in 2018. Based on
these initiatives and our expectations for 2019, and barring any
major unforeseen event, we believe that Thomas Cook should be
able to return adjusted leverage to below 5.0x over the next 12
months. We also expect that capital expenditures (capex) --
mostly related to aircraft maintenance and investment in digital
platforms -- as well as exceptional costs (albeit lower than in
FY2018) will continue to weigh on the company's cash flows, which
is why we expect moderately positive FOCF generation in FY2019."

Thomas Cook operates in a sector that is exposed to the
cyclicality and seasonality of the tourism industry and prone to
disruptions and geopolitical events. S&P said, "We also view the
company's business model as fairly capital intensive as a result
of it operating four airlines with about 100 leased aircrafts and
buying capacity in hotels. Equally, Thomas Cook is exposed to
uncertainties relating to Brexit, as the company generates around
one-quarter of its underlying EBIT in the U.K. These risks are
tempered, in our view, by Thomas Cook's strong position as the
No. 2 European travel operator in Europe after Tui AG; its well-
established brand; its improving geographic diversification into
new source markets, including long-haul; and its decreasing
operating leverage. We also view positively the travel industry's
underlying long-term growth."

S&P's base case assumes:

-- Some recovery in the Northern and Continental European
     markets due to the favorable macroeconomic environment. S&P
     said, "On the other hand, we forecast continuing pressure in
     the U.K. tour operator sector due to very high competition
     and continuing pressure on disposable incomes, which Brexit
     might exacerbate. That said, we expect low-single-digit
     revenue growth in FY2019 and FY2020, with revenues growing
     above GBP10 billion."

-- Some recovery of EBITDA margins in 2019 and 2020 due to lower
    restructuring costs and capacity improvements. S&P expects
     reported EBITDA margins (after exceptional costs) of 4.5%-
     5.5% in 2019-2020, compared with 3.3% in 2018.

-- Capex of about GBP210 million-GBP230 million in 2019-2020, in
    line with 2018, mostly dedicated to aircraft maintenance and
    IT development.

-- No major acquisitions or disposals.

-- No dividends to be paid in 2019.

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

-- Adjusted debt to EBITDA of around 4.5x-5.0x in FY2019 and
    around 4.0x in FY2020.
-- Adjusted interest coverage of about 2.8x in FY2019 and 3.0x-
    3.5x in FY2020.

-- Adjusted FFO to debt of around 13% in FY2019 and 13%-15% in
    FY2019.

-- Reported FOCF of GBP70 million-GBP80 million in 2019 and
    GBP150 million-GBP180 million in 2020.

S&P said, "Our assessment of Thomas Cook's liquidity as adequate
reflects our opinion that the ratio of sources to uses should
stay at around 1.4x over the next 12 months, and that the ratio
of sources of cash less uses will stay positive, even if EBITDA
declined by 15%. However, we also anticipate that headroom will
remain just below 15% compared to the maintenance covenants
included in the company's GBP875 million syndicated credit
facility." Further support for Thomas Cook's liquidity comes from
its access to capital markets and sound relationships with banks,
reflected in a track record of bond issuances and increases and
extensions of its revolving credit facility (RCF).

S&P anticipates the following liquidity sources over the 12
months to Sept. 30, 2019:

-- Access to unrestricted cash balances of about GBP1 billion as
    of Sept. 30, 2018.

-- Undrawn committed RCF of GBP662 million maturing in November
    2022.

-- FFO generation of about GBP250 million-GBP260 million.

S&P anticipates the following liquidity uses over the same
period:

-- Short-term debt maturities of GBP183 million, comprising
    about GBP177 million of commercial paper.

-- Capex of about GBP210 million-GBP230 million.

-- A seasonal working capital swing that we conservatively
    estimate at GBP1.0 billion, as the company receives cash from
    customers prior to their travel date (May to September) and
    settles with suppliers 30-60 days after the holiday has
     occurred. S&P sees the large outflow of working capital in
     the first quarter of each financial year (October to
     December) as a key constraint on Thomas Cook's liquidity.

Thomas Cook's RCF and bilateral bonding facilities are subject to
two maintenance covenants, tested quarterly, stipulating fixed-
charge coverage and leverage. S&P anticipates that the company's
covenant headroom will tighten over the next four quarters, but
should remain within 10%-15% above and below the level of each
covenant respectively over the next 12 months, barring any
unexpected event.

S&P said, "The negative outlook indicates that we could lower the
ratings if Thomas Cook is unable to restore its operating
performance during 2019 such that earnings, cash flows, and
credit ratios improve materially from their weak levels in
FY2018. The negative outlook also reflects the risk that our
base-case projections might not materialize due to uncertainty
around the speed of recovery of the U.K. tour operator sector or
continuing challenges in this sector, exacerbated by Brexit or
any unforeseen event.

"We could lower the ratings over the next 12 months if Thomas
Cook's operating performance does not improve and its adjusted
leverage remains above 5.0x and FOCF remains either negative or
marginally positive. Unexpected adverse events, like a difficult
Brexit outcome in March 2019, could also trigger a negative
rating action. In addition, any liquidity pressure stemming from
lower cash flow generation than we expect or very narrow
financial covenant headroom could also trigger a negative rating
action.

"We could revise the outlook back to stable if Thomas Cook
reduces and maintains leverage below 5.0x and generates
materially positive FOCF in FY2019 as a result of improved
operating performance and lower exceptional costs. That said,
given the high event risk in the tour operator industry, we
estimate that for Thomas Cook to be able to sustain a 'B+' rating
comfortably over the medium-to-long term, it needs to decrease
leverage to 4.0x-4.5x in order to provide headroom for unforeseen
external events like those that occurred in 2018."



                            *********

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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