/raid1/www/Hosts/bankrupt/TCREUR_Public/181206.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

                           E U R O P E

          Thursday, December 6, 2018, Vol. 19, No. 242


                            Headlines


A R M E N I A

ARMENIA: Fitch Affirms B+ LongTerm IDRs, Outlook Positive
YEREVAN CITY: Fitch Affirms B+ LT IDRs, Outlook Positive


G E R M A N Y

A-BEST 16: S&P Assigns BB+ Rating to EUR11MM Class E Notes
RAFFINERIE HEIDE: Moody's Alters Outlook on B3 CFR to Negative
SKW STAHL-METALLURGIE: Insolvency Plan Comes Into Force


I R E L A N D

ORANJE 32: S&P Assigns BB+ Rating to EUR4.2MM Class E Notes
TAURUS 2018-3: Moody's Assigns (P)B1 Rating to Class F Notes


I T A L Y

KOBE SPV: Moody's Rates EUR10.5MM Class B Notes 'Ba2'


K A Z A K H S T A N

TSESNABANK: S&P Lowers Long-Term Issuer Credit Rating to 'B-'


R U S S I A

BELGOROD REGION: Fitch Withdraws BB+ IDRs for Commercial Reasons


S P A I N

EURONA WIRELESS: Obtains Court Approval for Refinancing Deal
IM BCC CAJAMAR 2: Moody's Raises Series B Notes Rating to B3


U N I T E D   K I N G D O M

CROSSRAIL LTD: To Demand "Hundreds of Millions" of Pounds From UK
ELEMENT MATERIALS: S&P Affirms 'B' ICR on Planned PIK Debt
NEWDAY GROUP: S&P Affirms B+ Issuer Credit Rating, Outlook Stable
PATISSERIE VALERIE: Appoints Nick Perrin as Interim CFO
SHOP DIRECT: Fitch Affirms B Long-Term IDR, Outlook Negative

THOMAS COOK: Fundamentals Still Robust, Invesco Says
THOMAS COOK: Moody's Lowers CFR to B2 & Alters Outlook to Neg.
UNIQUE PUB: S&P Affirms B Rating on Class N Notes


                            *********



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A R M E N I A
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ARMENIA: Fitch Affirms B+ LongTerm IDRs, Outlook Positive
---------------------------------------------------------
Fitch Ratings has affirmed Armenia's Long-Term Foreign- and
Local-Currency Issuer Default Ratings at 'B+' with a Positive
Outlook.

KEY RATING DRIVERS

Armenia's ratings balance a credible monetary policy framework
and stronger income per capita and governance indicators relative
to peers against high public and external debt and tense
relations with some neighbouring countries.

The Positive Outlook reflects Armenia's stronger growth outlook
relative to peers, the start of a fiscal consolidation process
that Fitch expects will deliver a gradual decline in government
debt over the medium term, and institutions that have underpinned
macroeconomic and financial stability through a period of
significant political change.

The fiscal deficit in 2018 is on track to be better than
budgeted, and well below the current peer median, due to an
under-execution of spending. Fitch projects the state budget
deficit to decline to 2.2% of GDP (4.3% current peer median) from
4.8% in 2017, and a target of 2.7%. The new government is
reviewing spending across all areas to understand its structure
and pinpoint inefficiencies, which has slowed execution. Fitch
expects a widening of the deficit to 2.6% of GDP in 2019 and
2020, slightly above the 2.2% and 2.3% government projections,
reflecting its expectation of slower revenue growth and faster
execution of expenditure. The government is hoping to build
fiscal space to allow higher but deficit-neutral allocations to
social spending and public sector wages. The 2019 budget was the
first to be consistent with new fiscal rules.

Fitch projects a small primary surplus in 2018 and a broadly
balanced position in 2019 and 2020, supporting a gradual decline
in public debt. General government debt/GDP is forecast to fall
to 56.2% at end-2020 from 58.9% at end-2017, compared with a
current 'B' median of 60.5%. Debt is exposed to exchange rate
risks; at end-October 2018 80.8% of government debt was foreign-
currency denominated.

The political transition that began with large-scale public
protests and forced the resignation of the prime minister earlier
in the year looks set for completion, following the scheduling of
snap legislative elections for December 9. The coalition headed
by Nikol Pashinyan, the figurehead of the protest movement,
appears on course for a parliamentary majority, which will smooth
the implementation of an agenda that is focussed on fighting
corruption and tackling the monopolies and vested interests
associated with the previous administration. Fitch notes that the
transition process has been peaceful and in line with
constitutional mechanisms. Governance indicators, as measured by
the World Bank, are slightly better than the current peer median.

Armenia's traditional foreign policy approach balancing relations
with Russia, the US, EU and Iran has been maintained and external
powers do not appear to be exerting undue influence on the new
administration. Borders are closed with two neighbours and the
long-standing conflict with Azerbaijan over Nagorno-Karabakh has
the potential to escalate.

Armenia has continued to demonstrate macroeconomic and financial
stability throughout this year's political volatility as well as
increased geopolitical tensions related to Russia and increased
emerging market risk aversion, reflecting the policy framework's
credibility and improved capacity to absorb economic and
political shocks. Inflation (2.8% in October) has remained below
the central bank's medium-term target of 4%. The central bank has
kept interest rates at 6% since February 2017 and stated its
readiness to tighten policy if demand pressures increase. Fitch
expects inflation to average 2.7% in 2018 and move toward the
medium-term target in 2019, still below the forecast 5% for the
current 'B' median.

Economic growth is moderating, but remains robust and is forecast
at 5% in 2018. Private consumption and investment have led growth
this year, with the former driven by rising credit growth and
remittances and the latter benefiting from a strengthening
construction sector. Growth is forecast to ease to 4.2% in 2019
and 4.0% in 2020, with the forecast 2018-2020 average of 4.4%
higher than the 3.6% current 'B' median for the same period. The
halt to construction of a foreign-owned gold mine due to local
residents' protests over environmental concerns has created some
uncertainty about prospects for the sector.

Strong domestic demand has put pressure on the current account
deficit, which is projected to widen to 5.1% of GDP in 2018
(rising above the projected current peer median of 4.1%) from
2.4% in 2017. Ongoing import growth in line with higher planned
public investment will keep the deficit average at 4.3% in 2019-
2020, despite healthy performance in exports, remittances and
tourism. Public sector external borrowing and equity FDI will
finance the bulk of the deficit, although there are dual-sided
risks to Fitch's forecast. Net external debt/GDP, at a projected
47.8% at end-2018 is almost double that of the current peer
median of 25.3%.

External liquidity indicators are weaker than peers, with the
international liquidity ratio projected at 125.4% at end-2018,
below the 145% current peer median. Foreign exchange reserves of
USD2.08 billion at end-October were down by 10% from end-2017,
but had recovered somewhat from their low point of USD1.99
billion at end-June. Fitch forecasts reserves to end the year
equivalent to around 3.5 months of current external payments in
line with the current 'B' median. Exchange rate flexibility and
access to external financing reduce the risk of near-term
balance-of-payment pressures. The authorities are keen to agree a
non-disbursing programme with the IMF after the elections.

The banking system remains stable and did not experience
destabilising liquidity pressures in April-May. Capitalisation
levels remain adequate and the non-performing loan ratio (up to
270 days overdue) was 6.3% in June, down from 6.6% in April.
Despite a gradual declining trend, financial dollarisation
remains high, at 53% for deposits and 56% for borrowings at end-
October. The central bank has discouraged foreign currency loans
(through differentiated reserve requirements and risks weights)
and required banks to maintain a balanced FX position.

SOVEREIGN RATING MODEL (SRM) and QUALITATIVE OVERLAY (QO)
Fitch's proprietary SRM assigns Armenia a score equivalent to a
rating of 'B+' on the Long-Term Foreign-Currency (LT FC) IDR
scale.

Fitch's sovereign rating committee did not adjust the output from
the SRM to arrive at the final LT FC IDR.

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

RATING SENSITIVITIES

The main factors that could, individually or collectively, lead
to an upgrade are:

  - Greater confidence that the government debt-to-GDP ratio is
on a downward trajectory;

  - Confidence that improvements in the economic policy framework
and governance and institutional effectiveness are being
entrenched; and

  - A sustained improvement in the external balance sheet.

The main factors that could, individually or collectively, lead
to the Outlook being revised to Stable are:

  - Failure to put government debt/GDP on a downward trajectory
over the medium term, for example due to fiscal slippage and/or
growth underperformance;

  - A sustained weakening of external indicators, including the
current account deficit, net external debt and/or foreign
exchange reserves.

KEY ASSUMPTIONS

Fitch assumes that Armenia will continue to experience broad
social and political stability and that there will be no
prolonged escalation in the conflict with Azerbaijan over
Nagorno-Karabakh to a level that would affect economic and
financial stability.

Fitch assumes that the Russian economy will grow 1.5% in 2019 and
1.9% in 2020.

The full list of rating actions is as follows:

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

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

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

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

Country Ceiling affirmed at 'BB-'

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

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

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


YEREVAN CITY: Fitch Affirms B+ LT IDRs, Outlook Positive
--------------------------------------------------------
Fitch Ratings has affirmed the Armenian City of Yerevan's
Long-Term Foreign- and Local-Currency Issuer Default Ratings
(IDRs) at 'B+' with Positive Outlooks and Short-Term Foreign-
Currency IDR at 'B'.

The affirmation reflects Fitch's unchanged rating case scenario
regarding the city's satisfactory fiscal performance amid
Armenia's weak institutional framework for local and regional
governments (LRGs), nonetheless supported by steady transfers
from the central government. The ratings also factor in the
city's capital status and zero debt. The Positive Outlook
reflects that on the sovereign ratings.

KEY RATING DRIVERS

Institutional Framework (Weakness)

Yerevan's ratings remain constrained by those of Armenia
(B+/Positive), in particular the country's institutional
framework for LRGs, which Fitch assesses as weak. It has a
shorter track record of stable development than many
international peers. Weak institutions lead to lower
predictability of Armenian LRGs' budgetary policies, narrow their
planning horizon and hamper long-term development plans.

Fiscal Performance (Neutral)

In line with Fitch's unchanged rating case, Fitch expects the
city to continue posting a satisfactory fiscal performance with a
single-digit operating margin in 2018-2020 (2017: 2.9%). Fitch
expects an improvement of the city's operating margin on the back
of projected economic growth over the medium term in Armenia.
Yerevan's interim overall surplus was 15% of total revenue at
end-September 2018, while the city had collected only about 60%
of the annual revenue. Fitch expects the city will post close to
balanced budgets in 2018-2020 (2017: surplus 0.7%).

Due to statutory arrangements, Yerevan's fiscal performance
remains dependent on financial aid from the central government.
Fitch believes the city will continue receiving financial support
from the central government in line with its solid track record.
Current transfers stood at 72% of the city's operating revenue in
2017. The city's capex was 7.3% of total spending at end-2017, in
line with the previous year's low point when it dropped to 7.0%
from an average of 19.5% in 2013-2015.

Fitch projects a gradual improvement in capex realisation up to
8%-9% of total expenditure in 2018-2020. Most of the city's capex
is funded by central government transfers and donor grants,
supplemented by asset sales.

Debt and Other Long-Term Liabilities (Neutral)

At end-September 2018, Yerevan was free from any debt or
guarantees. The city has maintained its debt-free status since
forming a community in 2008. Statutory provisions of the national
legal framework guiding debt or guarantees issuance restrict the
city from incurring significant debt. The city's interim
liquidity position was sound, with average monthly cash holdings
of AMD7.5 billion as of end-September 2018 (2017: AMD1.9
billion). The city holds its cash in the national treasury,
earning AMD178 million of interest revenue as of end-September
2018.

Economy (Weakness)

Yerevan is likely to benefit from the projected economic recovery
in Armenia over the medium term. In its recently updated macro
forecast, Fitch expects full-year growth of the national economy
at 4.7% yoy in 2018 and 4.1% yoy in 2019. As the country's
capital and most populated city, Yerevan is Armenia's largest
market with a developed services sector. At the same time,
Yerevan's wealth metrics remain relatively modest in the
international context, as Fitch estimates Armenia's 2017 GDP per
capita at USD3,928 using market exchange rates.

Management and Administration (Neutral)

Yerevan's administration demonstrates adherence to a prudent
fiscal policy aimed at balanced budgets, while central government
remains a key funding source for the city. Due to institutional
limitations, the city's planning horizon is rather short - bound
to one fiscal year - which hinders the administration's
forecasting ability and complicates strategic planning and
investments allocation.

On September 23, 2018, Yerevan's city council was re-elected
ahead of schedule, following power reshuffling in Armenia.
Despite a change in the governing political coalition, the
municipal administration is functioning smoothly taking care of
uninterrupted provision of services and budget management.

RATING SENSITIVITIES

Changes to the sovereign ratings will be mirrored on the city's
ratings, as Yerevan is capped by Armenia's ratings.



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G E R M A N Y
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A-BEST 16: S&P Assigns BB+ Rating to EUR11MM Class E Notes
----------------------------------------------------------
S&P Global Ratings assigned its credit ratings to Asset-Backed
European Securitisation Transaction Sixteen UG
(Haftungsbeschrankt)'s (A-BEST 16) class A, B, C, D, and E euro-
denominated asset-backed floating-rate notes. At closing, A-BEST
16 also issued unrated class M fixed-rate notes.

A-BEST 16 is FCA Bank's 16th publicly rated transaction. The
transaction securitizes a portfolio of German auto loan
receivables. FCA Bank Deutschland granted the loan contracts to
its German commercial and private customers.

RATING RATIONALE

Sector Outlook

S&P said, "In our base-case scenario, we forecast that Germany
will record GDP growth of 2.0% in 2018, 1.7% in 2019, 1.5% in
2020, and 1.3% in 2021, compared with 2.5% in 2017. At the same
time, we expect unemployment rates to decrease even further,
reaching record lows. We forecast unemployment to be 3.3% in
2018, 3.0% in 2019, 2.8% in 2020, and 2.6% in 2021, compared with
3.8% in 2017. In our view, changes in GDP growth and the
unemployment rate largely determine portfolio performance. We set
our credit assumptions to reflect our economic outlook. Our near-
to medium-term view is that the German economy will remain
resilient and record positive growth."

Operational Risk

FCA Bank Deutschland is an experienced originator in the German
auto loan market. S&P said, "Our ratings on the class A, B, C, D,
and E notes reflect our opinion of FCA Bank Deutschland's well-
established underwriting policies, as well as our evaluation of
its ability to fulfil its role as servicer under the transaction
documents. We have reviewed the quality of the originator's
underwriting and servicing policies."

S&P said, "We have applied our operational risk criteria in our
analysis. The collateral in this pool comprises prime auto loans.
Under our operational risk criteria, auto loans are considered as
having low severity and portability risks. As such, these
criteria do not impose any cap on the maximum achievable rating
due to operational risks."

Credit Risk

S&P said, "We have used performance data from FCA Bank
Deutschland's loan portfolio and from benchmark transactions
(with similar portfolio characteristics) to analyze credit risk.
We expect to see about 3.95% of defaults in the securitized pool.
As for comparable transactions, we have sized our base-case
defaults expectation based on five subpools: amortizing loans and
balloon loans for new cars and used cars, and formula loans (new
and used cars combined). Furthermore, we have sized for market
value decline risk as some of the loans contain a balloon
payment. We also sized stressed recoveries of 35% for all rating
levels based on recovery data from FCA Bank Deutschland's loan
book and previous transactions. We have analyzed credit risk by
applying our European auto asset-backed securities (ABS)
criteria."

Counterparty Risk

S&P said, "Our ratings on the rated notes also reflects the
replacement mechanisms implemented in the transaction documents,
which adequately mitigate the transaction's exposure to
counterparty risk. The transaction is exposed to counterparty
risk through BNP Paribas Securities Services (Frankfurt Branch)
as bank account provider, and Credit Agricole Corporate and
Investment Bank as the class A, B, C, D, and E notes stand-by
interest rate swap counterparty. Under the interest rate swap
set-up, FCA Bank Deutschland is the front swap counterparty and
Credit Agricole Corporate and Investment Bank is the stand-by
swap provider. In our analysis of the interest rate swap, we only
rely on our rating on, and commitment of, Credit Agricole
Corporate and Investment Bank. We analyzed counterparty risk by
applying our current counterparty criteria."

Legal Risk

S&P said, "In our opinion, the transaction may be exposed to
commingling risk if the servicer becomes insolvent. The
transaction's commingling reserve fund partially mitigates the
commingling risk. We have considered the transaction's exposure
to commingling risk in our cash flow analysis and sized for the
uncovered exposure. We have analyzed legal risk, including the
special purpose entity's bankruptcy remoteness, under our legal
criteria. The legal opinion at closing provided comfort that the
sale of the assets would survive the seller's insolvency."

Cash Flow Analysis

S&P said, "Our ratings on the class A, B, C, D, and E notes
reflect our assessment of the transaction's payment structure as
set out in the transaction documents. The credit enhancement
would build up quickly under our base-case scenario due to the
sequential payment structure. Our analysis indicates that the
available credit enhancement for the class A, B, C, D, and E
notes is sufficient to withstand the credit and cash flow
stresses that we apply at assigned ratings."

Ratings Stability

S&P said, "In our review, we have analyzed the effect of a
moderate stress on the credit variables and their ultimate effect
on the ratings on the notes. We have run two scenarios and the
results are in line with our credit stability criteria."

  RATINGS ASSIGNED

  Asset-Backed European Securitisation Transaction Eleven UG
  (haftungsbeschrankt)

  Class              Rating      Amount (mil. EUR)
  A                  AAA (sf)              540.0
  B                  AA (sf)                18.0
  C                  A (sf)                 20.0
  D                  BBB (sf)               16.0
  E                  BB+ (sf)               11.0
  M                  NR                     26.6

  NR--Not rated.


RAFFINERIE HEIDE: Moody's Alters Outlook on B3 CFR to Negative
--------------------------------------------------------------
Moody's Investors Service has changed the outlook of Raffinerie
Heide GmbH to negative from stable and at the same time affirmed
the B3 corporate family rating, the B3-PD probability of default
rating, as well as the B3 rating of the senior secured EUR250
million bond due 2022.

"Today's rating action reflects Heide's weak refinery margin,
which will increase Moody's adjusted leverage towards 10.0x debt
to EBITDA by the end of 2018, well above expectations of 6.0x for
its B3 rating ", says Janko Lukac, Moody's analyst for Heide."
"While maintaining adequate liquidity, 2019's market environment
needs to improve significantly in order to reduce leverage
towards levels expected for a B3 rating", adds Janko Lukac.

RATINGS RATIONALE

RATIONALE FOR THE AFFIRMATION OF THE CFR

Moody's affirmed the B3 ratings for Heide, as operating
performance is likely to improve in 2019 and 2020 if Brent oil
prices remain at lower levels and result in improving crack
spreads. Further, Heide is likely to benefit from: i) its
significant sales of petrochemicals (around 15% of 2017's sales),
which crack spreads have strengthened on the back of lower oil
prices and, ii) the upcoming IMO regulations on environmental
fuel specifications for ships in 2020. IMO is likely to increase
crack spreads of middle distillates and hereby improve the
profitability of high complex refineries such as Heide starting
in the second half of 2019.

In the first nine months of 2018, gross refinery margin of Heide
has been impacted significantly by higher Brent crude and natural
gas prices, a weak margin environment for chemicals, an increase
of CO2 certificate prices and an appreciation of the EUR vs the
USD resulting in a decline of the group's reported EBITDA to
EUR25.8 million from EUR91.5 million in the same period of 2017.
Moody's expects full year EBITDA to improve above EUR40 million,
positively impacted by Brent prices falling towards 60 USD per
barrel by the end of November 2018 from levels between 70 to 80
USD per barrel during the first nine months of 2018.

Consequently, Moody's expects Heide to have a cash outflow of
EUR20 million in 2018, mainly driven by tax payments following
the strong years of 2016/2017 and an increase in adjusted capex
spending towards EUR30 million due the scheduled cleaning shut
down in spring and autumn. In 2019, Moody's forecasts that
Heide's cash flow will most likely remain negative at around
EUR15 million as CAPEX spending will further increase moderately
due to the turnaround of the refinery's steam cracker unit
scheduled in 2019. For 2019 Moody's expects leverage to decline
towards 6.0x Moody's adjusted debt to EBITDA.

Liquidity of the refinery remains adequate with EUR148 million
cash on balance by the end of September 2018 of which around EUR
15 million are restricted. Additionally, the company has a
factoring facility of EUR125 million of which 80% have been
utilized by the end of Q3 2018 and an inventory financing
facility for its crude intake in place. The factoring, facility
can be canceled with a notice period of six months to the end of
an annual quarter and the inventory financing facility with six
months' notice after May 2020. Heide has no significant upcoming
maturities until November 2022, when its EUR250 million senior
secured bond comes due.

RATIONALE FOR THE NEGATIVE OUTLOOK

The negative outlook on Heide's ratings reflects the group's weak
operating performance on the back of the challenging market
environment in the first three quarters of 2018, which will
increase leverage towards 10.0x Moody's adjusted debt to EBITDA
by the end of 2018.

WHAT CAN CHANGE THE RATING UP / DOWN

Albeit currently unlikely, Heide's rating could be upgraded to B2
if the refinery shows a larger resilience to volatile crude, gas,
CO2 certificates and FX movements and lowers adjusted debt/EBITDA
below 4.5x and RCF/debt above 10% on a sustained basis, while
maintaining an adequate liquidity profile.

The rating could be downgraded to Caa1 if the company is unable
to significantly improve operating profitability and hereby lower
its adjusted debt/EBITDA below 6.0x and at the same time increase
its RCF/Debt ratio to above 5% over the next 12 -- 18 months. The
rating could also be downgraded if the liquidity profile weakens.

The principal methodology used in these ratings was Refining and
Marketing Industry published in November 2016.


SKW STAHL-METALLURGIE: Insolvency Plan Comes Into Force
-------------------------------------------------------
The Appellate Court (Landgericht Muenchen), by a decision dated
November 28, 2018, granted a motion of release according to sec.
253 para. 4 Insolvency Code, thereby rejecting the last pending
of two complaints that had been filed against the competent
insolvency court's approval of the insolvency plan of SKW Stahl-
Metallurgie Holding AG on August 14, 2018.  The insolvency plan
thereby comes into force and can now be executed.

The insolvency plan determines all measures for the financial
restructuring of the Company.  Current shareholders exit the
Company by transfer of their shares to Speyside Equity.
Furthermore, after a capital decrease to zero, the insolvency
plan provides for a swap of a major part of credit claims
acquired by the Speyside Equity into equity of SKW Holding. With
the implementation of these capital-related measures, SKW's
shares will be delisted (DE000SKWM021).  For all non-subordinated
insolvency creditors, the insolvency plan provides for full
economic satisfaction of 100% of their respective claims.

The SKW Metallurgie Group -- http://www.skw-steel.com--
is a provider of chemical additives for hot metal
desulphurization and for cored wire and other products for
secondary metallurgy.



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ORANJE 32: S&P Assigns BB+ Rating to EUR4.2MM Class E Notes
-----------------------------------------------------------
S&P Global Ratings assigned credit ratings to Oranje (European
Loan Conduit No. 32) DAC's class A to E notes. At closing, the
issuer also issued unrated class X certificates.

S&P's ratings reflect its assessment of the underlying loans'
credit, cash flow, and legal characteristics, and an analysis of
the transaction's counterparty and operational risks.

The transaction is backed by five senior loans, which Morgan
Stanley Bank N.A. (Morgan Stanley) originated between September
2017 and June 2018 to facilitate the refinancing of three loans
as well as the acquisition of a property portfolio and a single
asset in the Netherlands.

The senior loans backing this true sale transaction equal
EUR207.3 million. The loans are secured by 78 office, industrial,
residential, and retail properties in the Netherlands.

Since S&P assigned preliminary ratings, the loan balances have
been adjusted to reflect a combination of scheduled amortization,
partial sponsor equity pay down (the Phoenix Loan), and a
property sale (the Cygnet loan). All amounts were applied at the
most recent loan interest payment date (Nov. 15, 2018).

The issuer created a 5% (of the securitized senior loans)
vertical risk retention loan interest (VRR loan) in favor of
Morgan Stanley to satisfy E.U. and U.S. risk retention
requirements.

  RATINGS ASSIGNED

  Oranje (European Loan Conduit No. 32) DAC

  Class     Rating        Amount (mil. EUR)
  A         AAA (sf)                128.2
  B         AA (sf)                  17.8
  C         A- (sf)                  27.5
  D         BBB- (sf)                19.3
  E         BB+ (sf)                  4.2
  X         NR                        0.1

  NR--Not rated.


TAURUS 2018-3: Moody's Assigns (P)B1 Rating to Class F Notes
------------------------------------------------------------
Moody's Investors Service has assigned the following provisional
ratings to the debt issuance of Taurus 2018-3 DEU DAC:

EUR 193,700,000 Class A Commercial Mortgage Backed Floating Rate
Notes due 2029, Assigned (P)Aaa (sf)

EUR 62,700,000 Class B Commercial Mortgage Backed Floating Rate
Notes due 2029, Assigned (P)Aa3 (sf)

EUR 45,100,000 Class C Commercial Mortgage Backed Floating Rate
Notes due 2029, Assigned (P)A3 (sf)

EUR 80,700,000 Class D Commercial Mortgage Backed Floating Rate
Notes due 2029, Assigned (P)Baa3 (sf)

EUR 79,500,000 Class E Commercial Mortgage Backed Floating Rate
Notes due 2029, Assigned (P)Ba2 (sf)

EUR 13,300,000 Class F Commercial Mortgage Backed Floating Rate
Notes due 2029, Assigned (P)B1 (sf)

Moody's has not assigned provisional ratings to the Class X Notes
of the Issuer.

Taurus 2018-3 DEU DAC is a true sale transaction backed by two
floating rate loans secured by two properties located in Germany.
The loans were granted by Bank of America Merrill Lynch
International DAC to refinance existing debt.

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

RATINGS RATIONALE

The rating actions are based on (i) Moody's assessment of the
real estate quality and characteristics of the collateral, (ii)
analysis of the loan terms and (iii) the expected legal and
structural features of the transaction.

The key parameters in Moody's analysis are the default
probability of the securitised loans (both during the term and at
maturity) as well as Moody's value assessment of the collateral.
Moody's derives from these parameters a loss expectation for the
securitized loans. Moody's default risk assumptions are low/
medium for the two loans.

The key strengths of the transaction include (i) the quality of
the collateral consisting of a highly modern office and hotel
complex, (ii) strong tenant covenants and (iii) two well
performing Hilton hotels that benefit from direct connection to
the airport terminal.

Challenges in the transaction include (i) the non-traditional
office location likely only attracting tenants who want to be in
close proximity to the airport, (ii) exposure to hotel operating
performance, which is more volatile than other property types,
(iii) concentrated tenant exposures, (iv) increased refinancing
risk due to high leverage and short remaining lease terms and (v)
the borrower not being a newly established special purpose
entity.

Moody's term loan to value ratio (LTV) is 80.8% for the combined
loans compared to a Moody's LTV at loan maturity of 87.4%. This
reflects the lower property value in the event that KPMG do not
renew their lease or execute their break option. Moody's has
applied a property grade of 1.5 for both loans.

Methodology Underlying the Rating Action:

The principal methodology used in these ratings was "Moody's
Approach to Rating EMEA CMBS Transactions" published in November
2018.

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

(i) a decline in the property values backing the underlying
loans, (ii) an increase in the default probability driven by
declining loan performance or increase in refinancing risk, or
(iii) an increase in the risk to the notes stemming from
transaction counterparty exposure (most notably the account bank,
the liquidity facility provider or borrower hedging
counterparties).

Main factors or circumstances that could lead to an upgrade of
the ratings are generally (i) an increase in the property values
backing the underlying loans, or (ii) a decrease in the default
probability driven by improving loan performance or decrease in
refinancing risk. For further details, please refer to the
presale report available in due course.

The ratings for the Notes address the expected loss posed to
investors by the legal final maturity. Moody's ratings address
only the credit risks associated with the transaction; other non-
credit risks have not been addressed but may have significant
effect on yield to investors. Moody's ratings do not address the
payments of EURIBOR Excess Amounts, Exit Payment Amounts or Pro
Rata Default Interest Amounts as defined in the Offering
Circular.



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


KOBE SPV: Moody's Rates EUR10.5MM Class B Notes 'Ba2'
-----------------------------------------------------
Moody's Investors Service has assigned definitive long term
credit ratings to the following classes of Notes issued by Kobe
SPV S.r.l.:

EUR260,000,000 Class A Residential Mortgage Backed Floating Rate
Notes due October 2058, Assigned Aa3 (sf)

EUR10,500,000 Class B Residential Mortgage Backed Floating Rate
Notes due October 2058, Assigned Ba2 (sf)

Moody's has not assigned any ratings to EUR 19,437,000 Class J1
Residential Mortgage Backed Floating Rate and Additional Return
Notes due October 2058 and EUR 19,911,000 Class J2 Residential
Mortgage Backed Floating Rate and Additional Return Notes due
October 2058.

The transaction represents the second residential mortgage
securitization transaction originated by Banca Alpi Marittime
Credito Cooperativo Carru SocietÖ Cooperativa per Azioni (NR) and
the first issued by Banca Cassa di Risparmio di Savigliano S.p.A.
(NR). The assets supporting the Notes, which amount to around EUR
300,630,331.06, consists of mortgage loans extended to
individuals and are backed by the first economic lien on
residential properties located in Italy.

The portfolio will be serviced by both originators, BAM and CRS,
for their portion of the portfolio. BAM and CRS will also serve
as back-up servicers, in case the servicer agreement is
terminated. Furthermore, if the servicer report is not available
at any payment date, continuity of payment for rated Notes will
be assured by the computation agent preparing the payment report
on estimates.

RATINGS RATIONALE

The ratings of the Notes are based on an analysis of the
characteristics of the underlying pool of home loans, sector wide
and originator specific performance data, protection provided by
credit enhancement, the roles of external counterparties and the
structural integrity of the transaction.

The expected portfolio loss is 2.75% of original balance of the
portfolio at closing, and the MILAN Credit Enhancement ("MILAN
CE") of 13% served as input parameters for Moody's cash flow
model, which is based on a probabilistic lognormal distribution.

The key drivers for the portfolio expected loss, which at 2.75%
is in line with the Italian RMBS sector average, are: (i) the
analysis of the static information on delinquencies and
recoveries received from the originator; (ii) benchmarking with
comparable transactions in the Italian market; (iii) the
performance of the originators' preceding transactions; and (iv)
the current and future macroeconomic environment in Italy.

The key drivers for the MILAN CE, which at 13% is in line the
Italian RMBS sector average, are: (i) the low weighted average
Current Loan to Value, equal to 52.44%; and (ii) the fact that
the portfolio is fully performing. On the negative side, it also
takes into account: (i) the high borrower concentration, as the
top 20 borrowers represents around 4.67% of the pool; (ii) the
high provincial concentration, as loans extended in Cuneo
represent around 56% of the pool; and (iii) a qualitative
adjustment based on the quality of the portfolio information
provided.

The Notes benefit from EUR 9,197,000 Cash Reserve Fund,
equivalent to 3.4% of Class A and B Notes balance, amortizing to
the higher between: (i) 3.4% of the then outstanding amount of
the Class A and B Notes; and (ii) EUR 2,705,000 (equivalent to 1%
of the Class A and B Notes balance at closing). The Cash Reserve
Fund under the pre-acceleration priority of payments only covers
interest on the Class A and B Notes and items in priority thereto
and will be available for reimbursing the Notes at maturity.

Furthermore, all excess spread will be used to pay down the Class
A Notes, and once Class A Notes are fully repaid, to pay down the
Class B Notes.

The transaction is unhedged. At closing, Moody's analysis takes
into account the potential interest rate exposure in assessing
the ratings of the Notes. Floating-rate loans without cap
represent 62.1% of the portfolio and the fixed rate loans 37.9%.
Moody's applied a haircut to the interest that the pool is
generating in order to consider the assets-liabilities
mismatches. As Class A and B Notes have a cap on the interest
coupon, this decreases the exposure to unhedged interest rate
risk in the structure.

The definitive ratings address the expected loss posed to
investors by the legal final maturity date of the Notes. In
Moody's opinion, the structure allows for timely payment of
interest and ultimate payment of principal by the legal final
maturity date with respect to the Class A and B Notes. Other non-
credit risks have not been addressed, but may have a significant
effect on yield to investors.

The principal methodology used in these ratings was "Moody's
Approach to Rating RMBS Using the MILAN Framework" published in
September 2017.

The Credit Ratings for Kobe SPV S.r.l. was assigned in accordance
with Moody's existing Methodology entitled "Moody's Approach to
Rating RMBS Using the MILAN Framework" dated September 11, 2017.
Please note that on November 14, 2018, Moody's released a Request
for Comment, in which it has requested market feedback on
potential revisions to its Methodology for RMBS. If the revised
Methodology is implemented as proposed, the Credit Ratings on
Kobe SPV S.r.l. are not expected to be affected. Please refer to
Moody's Request for Comment, titled "Proposed Update to Moody's
Approach to Rating RMBS Using the MILAN Framework" for further
details regarding the implications of the proposed Methodology
revisions on certain Credit Ratings.

The analysis undertaken by Moody's at the initial assignment of
ratings for RMBS securities may focus on aspects that become less
relevant or typically remain unchanged during the surveillance
stage. Please see "Moody's Approach to Rating RMBS Using the
MILAN Framework" for further information on Moody's analysis at
the initial rating assignment and the on-going surveillance in
RMBS.

FACTORS THAT WOULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE
RATINGS:

Significantly different loss assumptions compared with its
expectations at close, due to either a change in economic
conditions from its central scenario forecast or idiosyncratic
performance factors would lead to rating actions. For instance,
should economic conditions be worse than forecast, the higher
defaults and loss severities resulting from a greater
unemployment, worsening household affordability and a weaker
housing market could result in downgrade of the ratings. A
deterioration in the Notes available credit enhancement could
result in a downgrade of the ratings. Additionally, counterparty
risk could cause a downgrade of the ratings due to a weakening of
the credit profile of a transaction counterparties. Finally,
unforeseen regulatory changes or significant changes in the legal
environment may also result in changes of the ratings, as well an
increase or decrease of the Italian Local Currency Country Risk
Ceiling.



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


TSESNABANK: S&P Lowers Long-Term Issuer Credit Rating to 'B-'
-------------------------------------------------------------
S&P Global Ratings lowered its long-term issuer credit rating on
Tsesnabank to 'B-' from 'B' and its Kazakhstan national scale
rating to 'kzBB-' from 'kzBB+'. At the same time, S&P placed all
the 'B-/B' long- and short-term ratings and the 'kzBB-' rating on
CreditWatch with negative implications.

S&P said, "The downgrade reflects that deposit outflows have
continued for a longer period than we previously anticipated, but
also our belief that industry risk in the Kazakh banking system
has increased. At the same time, S&P sees that deposit reduction
in November was lower than in September and October 2018. Retail
deposits decreased by 1.6% in November, versus 24.7% in September
and 22.2% in October. Corporate deposit outflows reduced by 14%
in November compared with 18% in September and 16% in October.

"We acknowledge that the bank has received substantial support of
Kazakh tenge (KZT)400 billion from the government from its
portfolio disposal, and expect the bank to receive another KZT 50
billion in the near future, as initially agreed. However, we
consider that proceeds from the sale were mostly used to repay
the deposits of corporate customers and individuals. At the same
time, the bank is maintaining a liquidity buffer of above KZT115
billion, in line with its internal liquidity management targets.

"We also note that the deposits of government-related entities
(GREs) in Tsesnabank proved to be more volatile than we assumed
in our previous base-case scenario. At the same time, as the
bank's management reports that GRE funds were invested in the
bonds issued by the bank in November, with the total amount of
the placement exceeding KZT72 billion.

"Additionally, we think it will take some time for Tsesnabank to
restore the stability of its funding base . Although the bank has
reported unaudited KZT20.2 billion of profit for the first 10
months 2018, we still expect the bank's profitability to be
pressured in the next 12-18 months, given increased risks and
competition in the sector. We have therefore revised down the
bank's stand-alone credit profile to 'ccc+' from 'b-',
considering that these factors are exacerbated by deposit
reduction and increasing reliance on wholesale funding, which
makes the bank dependent upon favorable business, financial, and
economic conditions to meet its financial commitments on the
stand-alone basis, in our view.

"At the same time, we still believe that Tsesnabank remains a
moderately systemically important in Kazakhstan and will continue
to benefit from government support. The long-term rating on
Tsesnabank therefore still incorporates one notch of uplift.

"We aim to resolve the CreditWatch in the next 90 days, as we
form a clearer understanding of the ability of the bank to
stabilize its funding base and its liquidity metrics, as well as
its asset quality going forward.

"We could lower the rating if we see that deposit outflows
continue putting pressure on its liquidity, and/or if we believe
that the bank is no longer eligible for government support.

"We will consider removing the ratings from CreditWatch and
affirming them if the funding base stabilizes and we believe that
this stabilization is sustainable."



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


BELGOROD REGION: Fitch Withdraws BB+ IDRs for Commercial Reasons
----------------------------------------------------------------
Fitch Ratings has affirmed the Russian Belgorod Region's Long-
Term Foreign- and Local-Currency Issuer Default Ratings at 'BB+'
with Stable Outlooks and Short-Term Foreign-Currency IDR at 'B'.
The region's senior debt long-term rating has been affirmed at
'BB+'.

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

KEY RATING DRIVERS

The ratings reflect the region's adequate financial resilience
and effective cost control management, which has resulted in
stable operating performance and healthy debt metrics. The
ratings also factor in the diversified regional economy, although
it lags the EU average; sizeable, but diminishing contingent
liabilities; and evolving institutional framework for the Russian
subnationals.

Fiscal Performance Assessed as Neutral/Stable

Fitch expects consolidation of the region's operating balance at
15%-17% of operating revenue over the medium term, supported by
tax revenue growth and a cautious approach to opex increases.
Taxes will continue to support the region's operating revenue,
benefiting from a developed economy in the national context.

Fitch expects the region will maintain capex at around 17% of
total spending over the medium term. This is higher than many
domestic peers as the regional government prioritises
infrastructure development in the region. Belgorod's self-
financing capacity of capex will remain high in 2018-2020, with
the current balance and capital revenue covering around 80% of
capex. This will limit the region's recourse to new borrowings.

Fitch expects an only moderate level of capex-driven deficit
before debt in 2018-2020 averaging 3% of total revenue annually,
in line with the historical average in 2014-2016. In 2017,
Belgorod recorded a 2.2% surplus before debt, which led to higher
cash reserves and lower debt.

At October 1, 2018, the region recorded an interim budget surplus
of RUB3.7 billion, but Fitch expects it will turn into a modest
full-year deficit due to the acceleration of spending - capital
in particular - closer to year-end. During 10M18 the region
incurred close to 60% of planned capital expenditure, which would
lead to an intensification of the payment schedule in the last
months of the year.

Debt and Other Long-Term Liabilities Assessed as Neutral/Stable
Fitch expects the region's debt metrics will remain healthy over
the medium term. According to its rating case, direct risk will
be in the range of 40%-45% of current revenue while debt payback
(direct risk to current balance) will be around 3.0 years in
2018-2020, which is close to the weighted average life of debt,
estimated by Fitch at 3.5 years as of October 1, 2018. In 2017,
direct risk declined to 45% of current revenue from 56% one year
earlier while debt payback improved to 2.1 years.

The region's direct risk is dominated by issued debt, which
constitutes 46% of the total, followed by budget loans that
compose another 36%. The remainder is medium-term bank loans. The
majority of budget loans were restructured according to the
programme initiated by the federal government at end 2017.
According to the programme the maturity of RUB8.2 billion budget
loans received by the region in 2015-2017 will be prolonged until
2024, with most payments closer to the end of maturity.

Management and Administration Assessed as Neutral/Stable
The administration leads a responsible and coherent budgetary
policy, which is demonstrated by the track record of a sound
operating performance and moderate debt. The region is quite
conservative in its budgetary forecast and usually records a
lower level of deficit than expected. Management is focused on
regional development and investment in infrastructure to make the
region more attractive to the residents and businesses.

Management used to provide guarantees to support the regionally
important enterprises. However, for the last five years the
amount of guarantees has been gradually declining and reached
RUB6.2 billion in 2017 compared with RUB14.9 billion in 2013.
Currently, management's policy is to limit the issuance of new
guarantees, and during 2015-2017 it provided only RUB0.45 billion
of new guarantees to the regional company for the purpose of SMEs
support, while older guarantees started to amortise. As this
cautious approach is planned for future periods, Fitch projects a
further decline of the region's contingent liabilities.

Economy Assessed as Neutral/Stable

Belgorod has a developed economy in the national context with GRP
per capita at 136% of the national median in 2016. The most
important sectors for the regional economy include agriculture,
mining (mostly iron ore) and processing industry (metal and food
production are among the largest subsectors). Fitch forecasts
growth of the national economy will slow to 1.5% in 2019, from
2.0% in 2018 while the regional government expects Belgorod's
economy will continue to outperform the national one with around
3.5% growth per year in 2018-2020. In 2017 Belgorod's GRP was up
by 3.6% while Russia's GDP grew 1.5%.

Institutional Framework Assessed as Weak/Stable

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



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


EURONA WIRELESS: Obtains Court Approval for Refinancing Deal
------------------------------------------------------------
Reuters reports that Eurona Wireless Telecom SA on Dec. 3 said it
received court approval for the refinancing deal reached by
Eurona Wireless Telecom, Eurona Telecom Services and Quantis
Global with their creditors.

According to Reuters, the refinancing deal in its standard
conditions consists of five years delay period for each affected
debt instrument.

The deal opens Eurona to possible injection of funds from
Magnetar Capital LLC and other institutions via a loan of up to
EUR30 million, Reuters discloses.

Eurona Wireless Telecom SA is a telecommunications company based
in Barcelona, Spain.


IM BCC CAJAMAR 2: Moody's Raises Series B Notes Rating to B3
------------------------------------------------------------
Moody's Investors Service has upgraded the ratings of Class A and
Class B Notes in IM BCC CAJAMAR PYME 2, FONDO DE TITULIZACION.
The rating action reflects the increase in the levels of credit
enhancement for the affected notes due to deleveraging and
repurchase of 348.2 millions of the portfolio.

  EUR760.0M Serie A Notes, Upgraded to Aa1 (sf); previously on
  May 3, 2018 Definitive Rating Assigned A2 (sf)

  EUR240.0M Serie B Notes, Upgraded to B3 (sf); previously on May
  3, 2018 Definitive Rating Assigned Caa2 (sf)

IM BCC CAJAMAR PYME 2, FONDO DE TITULIZACION is a static cash
securitisation of term loans granted by Cajamar Caja Rural,
Sociedad Cooperativa de Credito to small and medium-sized
enterprises and self-employed individuals located in Spain.

RATINGS RATIONALE

The rating action is prompted by deal deleveraging due to the
repurchase of part of the portfolio by the originator (Cajamar)
on the October 29, 2018 resulting in an increase in credit
enhancement for the affected tranches.

Revision of Key Collateral Assumptions

As part of the rating action, Moody's reassessed its default
probability and recovery rate assumptions for the portfolio
reflecting the collateral performance to date.

The performance of the transactions has continued to be stable
since the deal closing in May 2018. Total delinquencies are at
8.9% of the outstanding pool balance, with 90 days plus arrears
currently standing at 1.4% of current pool balance. There are
currently no defaulted loans in the pool of the transaction.

For IM BCC CAJAMAR PYME 2, FONDO DE TITULIZACION, the current
default probability has been slightly increased to 15% from 13%
at closing to reflect the portfolio composition based on updated
loan by loan information, taking into consideration the current
industry concentration among other credit risk factors. As part
of the analysis Moody's has reduced recovery rate assumption to
35% fixed from 40% stochastic. Portfolio credit enhancement in
the transaction is 38.5%, which, combined with the revised key
collateral assumptions, corresponds to a CoV of 58.3%.

Increase in Available Credit Enhancement

Sequential amortization and non-amortising reserve fund led to
the increase in the credit enhancement available in this
transaction.

For instance, the credit enhancement for the most senior tranche
affected by the rating action increased from 27% to 53.8% since
closing.

Counterparty Exposure

The rating actions took into consideration the Notes' exposure to
relevant counterparties, such as servicer, account banks or swap
providers.

Moody's considered how the liquidity available in the
transactions and other mitigants support continuity of Note
payments, in case of servicer default, using the CR Assessment as
a reference point for servicers. The ratings of the Notes are not
constrained by operational risk.

Moody's matches banks' exposure in structured finance
transactions to the CR Assessment for commingling risk. Moody's
has introduced a recovery rate assumption of 45% for this
exposure.

Moody's also assessed the default probability of the
transaction's account bank providers by referencing the bank's
deposit rating. The ratings of the rated Notes are not
constrained by the issuer account bank exposure.

There is no swap exposure for IM BCC CAJAMAR PYME 2, FONDO DE
TITULIZACION.

Principal Methodology

The principal methodology used in these ratings was 'Moody's
Global Approach to Rating SME Balance Sheet Securitization'
published in August 2017.

The Credit Rating for IM BCC CAJAMAR PYME 2, FONDO DE
TITULIZACION was assigned in accordance with Moody's existing
Methodology entitled " Moody's Global Approach to Rating SME
Balance Sheet Securitization," dated August 2017. Please note
that on November 14 2018, Moody's released a Request for Comment,
in which it has requested market feedback on potential revisions
to its Methodology for ABS SME. If the revised Methodology is
implemented as proposed, the Credit Rating on IM BCC CAJAMAR PYME
2, FONDO DE TITULIZACION may be neutrally affected. Please refer
to Moody's Request for Comment, titled " Proposed Update to
Moody's Global Approach to Rating SME Balance Sheet
Securitizations," for further details regarding the implications
of the proposed Methodology revisions on certain Credit Ratings."

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

Factors or circumstances that could lead to an upgrade of the
ratings include (1) performance of the underlying collateral that
is better than Moody's expected, (2) deleveraging of the capital
structure ,(3) improvements in the credit quality of the
transaction counterparties and (4) a decrease in sovereign risk.

Factors or circumstances that could lead to a downgrade of the
ratings include (1) an increase in sovereign risk, (2)
performance of the underlying collateral that is worse than
Moody's expected, (3) deterioration in the Notes' available
credit enhancement and (4) deterioration in the credit quality of
the transaction counterparties.



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


CROSSRAIL LTD: To Demand "Hundreds of Millions" of Pounds From UK
-----------------------------------------------------------------
Gill Plimmer and Jim Pickard at The Financial Times report that
Crossrail will demand "hundreds of millions" of pounds from the
government in its third bailout of the year, according to people
familiar with the growing crisis at the London rail project.

The news comes as controversy mounts over whether Sadiq Khan, the
mayor of London, misled the public over the project's delays and
cost overruns, the FT notes.

Ministers were furious in August after Crossrail management
admitted that the project's completion would be delayed by a year
to the autumn of 2019, the FT recounts.

According to the FT, Mr. Khan told the National Audit Office last
month that the project would require further cash despite having
already received an injection of GBP590 million in July and a
further GBP350 million loan in October -- which increased the
total cost of the scheme to GBP15.8 billion.

Terry Morgan, the Crossrail chairman who is expecting to be
sacked this week from his post and also as chairman of the HS2
rail project, confirmed that another request was imminent, the FT
notes.

The precise amount for the extra funding has not been decided and
will depend on the findings of a KPMG report into governance at
Crossrail, which is close to completion, the FT states.

However, the request will amount to hundreds of millions of
pounds, according to several people close to the project, the FT
discloses.  An announcement is expected within weeks, according
to the FT.


ELEMENT MATERIALS: S&P Affirms 'B' ICR on Planned PIK Debt
----------------------------------------------------------
S&P Global Ratings said that it affirmed its 'B' long-term issuer
credit rating on U.K.-based materials testing group Element
Materials Technology Ltd. and on its subsidiaries, Greenrock
Midco Ltd. and Greenrock Finance Inc. The outlook is stable.

At the same time, S&P affirmed its 'B' issue rating on the
Element's upsized senior debt. The '3' recovery rating is
unchanged, reflecting its expectation of average (50%-70%;
rounded estimate: 50%) recovery in the event of payment default.

The affirmation follows a number of planned revisions to
Element's capital structure; the group is issuing a circa $340
million euro-equivalent payment-in-kind (PIK) instrument from new
holding company -- EMT Finance 1 Ltd. -- above the Element
Materials Technology Ltd. and restricted group. The proceeds of
this will repay the $320 million shareholder loan notes held by
Bridgepoint and management, plus approximately $13 million
accrued interest and $9 million expected transaction expenses.
Element is also tapping its term loan B (TLB) by $80 million
euro-equivalent, with the proceeds repaying approximately $78
million of existing drawings under the group's $125 million
capital expenditure (capex) and acquisition facility, while at
the same time upsizing the facility by around $75 million.
Finally, the group is looking to lower the price of its second-
lien facility by 50 basis points, which will support cash
generation.

S&P said, "We view the transaction as broadly neutral to credit
quality, as there are no material changes to our adjusted
leverage calculation. We consider in our adjusted debt the
shareholder loan that is being replaced with the new externally
held PIK instrument, as well as approximately $700 million of
preference shares. While cash payments can be made, subject to
the restrictions of the senior debt documentation, both these
instruments are expected to accrue non-cash interest, and are
outside of the restricted group.

"Our assessment of Element's financial risk profile reflects its
very high leverage following the acquisition of Exova Group, as
well as the leveraged buyout by financial sponsor Bridgepoint in
early 2016. We forecast the group's S&P Global Ratings-adjusted
debt will amount to approximately $2.6 billion at year-end 2018,
or $1.6 billion excluding the non-cash pay debt-like instruments
outside of the restricted group. The capital structure includes
the new c.$340 million PIK loan issued at new holdco, EMT Finance
1, and non-common equity financing provided by Element's
financial sponsor in the form of $650 million of preferred shares
plus accrued interest.

"We forecast that Element's key credit metrics will remain
consistent with current levels over the medium term, with a
gradual reduction in the adjusted cash leverage ratio to below
6.0x by 2020 (excluding the PIK and preference shares), but more
limited deleveraging when including non-cash pay debt-like
instruments outside of the restricted group, which we expect to
remain above 10x. We note however the group's solid free
operating cash flow (FOCF) generation compared with peers in the
same rating category, supported by moderate working capital
intensity and limited capex requirements. While the Exova
acquisition caused some margin dilution in the first year due to
Exova's presence in certain lower-margin segments and integration
costs, we expect the group will gradually improve adjusted EBITDA
margins on the back of synergies and reduced restructuring costs.
This will further support the group's cash flow generation and
cash interest coverage metrics."

S&P's base-case scenario assumes:

-- Revenue growth of about 8% in 2018, including 3%-5% like-for-
    like revenue growth and about 5% due to favorable foreign
    exchange impacts. Strong growth in the aerospace,
     transportation, and industrials segments, but slow recovery
     in the oil and gas segment, partially explains our revenue
     growth assumption.

-- Revenue growth of about 3% in 2019 and beyond, supported by a
    production backlog relating to main clients in aerospace and
    rebound in the oil and gas segment, but constrained by global
    macroeconomic slowdown.

-- Adjusted EBITDA margins of about 27% in 2018, increasing to
    29%-30% in 2019, resulting from the full impact of synergies
    and gradual reduction of restructuring and integration costs.

-- Capex of about $50 million per year, including both
    maintenance and growth capex.

-- S&P assumes about $30 million of new acquisitions per year,
    given the group's track record of implementing an active
    merger and acquisition strategy.

-- Moderate working capital outflows of about $10 million per
    year, reflecting S&P's anticipated modest revenue growth.

-- No dividends.

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

-- Adjusted debt to EBITDA of about 12.0x by year-end 2018
    (approximately 7.0x excluding the PIK and non-common equity
    instruments), with a gradual reduction in the adjusted cash
    leverage ratio to about 6.0x and below in 2019 and 2020.
    Nevertheless, the PIK and a large portion of preferred shares
    with accrued interest will continue to burden S&P's view of
    total adjusted leverage, which it expects will remain above
    10x over its forecasts.

-- Sound FOCF generation that compares well with peers in the
    same rating category, supported by moderate working capital
    intensity and limited capex requirements.

-- Funds from operations (FFO) cash interest coverage of around
    2.5x, improving toward 3.0x by 2020.

S&P said, "The stable outlook on Element reflects S&P Global
Ratings' view that the group is progressing well with the
integration of Exova Group, acquired in June 2017. In our view,
the combined group will strengthen its leading position in niche
segments in the U.S. and Europe, and gradually improve its
operating margins, despite some margin dilution in the short
term. In addition, we project that Element will maintain credit
metrics in line with a highly leveraged financial risk profile in
the near term, including a ratio of adjusted debt to EBITDA well
above 5.0x.

"We could consider a negative rating action if revenue and
operating margins deteriorated significantly below our base-case
assumptions, due to difficult trading conditions in the group's
main markets or higher-than-expected restructuring costs related
to the integration of Exova. We would also take a negative rating
action if FOCF after all exceptional costs turned negative, or if
our adjusted FFO cash interest coverage figure declined to about
2.0x. In addition, any further significant debt- or cash-funded
acquisitions could trigger a negative rating action.

"Due to the group's high adjusted debt leverage and aggressive
financial policy, we are unlikely to raise the ratings in the
near future. However, we could consider an upgrade if Element
demonstrated a track record of improved credit metrics, such that
adjusted debt to EBITDA was sustained below 5.0x, and the group
altered its financial policy so that we believed stronger credit
metrics would be sustainable. An improvement in credit metrics
could result from better operating conditions than we currently
forecast, leading to accelerated growth of adjusted EBITDA."


NEWDAY GROUP: S&P Affirms B+ Issuer Credit Rating, Outlook Stable
-----------------------------------------------------------------
S&P Global Ratings affirmed its 'B+' long-term issuer credit
rating on NewDay Group (Jersey) Ltd. The outlook is stable.

At the same time, S&P affirmed its 'B' issue rating on the
group's senior secured notes, issued by NewDay BondCo PLC.

S&P said, "The affirmation reflects our expectation that NewDay
will continue to focus on the U.K. near-prime credit market in
its own-brand segment and prime market in its co-brand segment,
expanding its customer base and delivering cost efficiencies
across the business. Unless it incurs further one-off costs, we
expect these initiatives to enable NewDay to deliver profitable
underlying growth over 2018-2020, and so slowly replenish its
capital base. However, individual insolvencies across the U.K.
are currently at a near six-year high, despite largely benign
economic conditions, and could see further deterioration.
Although we consider that NewDay remains stringent in its
underwriting, adapting to deterioration quickly and taking
credit-tightening measures, we think its business model could
make it sensitive to any change in underlying conditions.

"Alongside this, NewDay's low level of tangible capital
constrains our rating. Despite improvements in profitability,
NewDay's significant on-balance-sheet goodwill and intangibles,
as well as a GBP213 million one-off impact from the
implementation of International Financial Reporting Standards
(IFRS) 9, leave the business with a severely depleted capital
base under our capital measurements. Although we forecast that
the capital base will recover as earnings improve, earnings in
2018 will be eroded by strategy implementation costs and some
structural challenges, notably insolvencies across the portfolio.
We expect earnings to improve in 2019-2020.

"Positively, we anticipate that NewDay will continue to grow its
loan book prudently, tightly controlling and managing its
expansion. For example, the group has tightened underwriting
standards for its own-brand book, introducing more-stringent
criteria that now exclude the top 5% of high-risk accounts.
In the nine months to September 2018, the group posted a
statutory loss after tax of GBP10.4 million, although the third
quarter itself was roughly break even. We attribute much of the
losses to about GBP18 million of exceptional implementation costs
related to IT projects and programs designed to improve NewDay's
operating efficiency."

Over the same period, growth in receivables was robust, at 12%,
with gross own-brand receivables at GBP1.476 billion, and co-
brand receivables at GBP881 million at the end of the period. S&P
said, "We expect this growth trend to continue over 2019-2020,
and gross receivables to increase by 10%-13% across our two-year
forecast period. That said, IFRS9 has had an adverse impact on
the business' provisioning rate -- total provisions are some 8-10
percentage points ahead of historical rates, as a percentage of
gross receivables. Similarly, impairment rates through the profit
and loss account are forecast to be about 2.0-2.5 percentage
points higher. Ultimately, we do not consider either change
represents a significant alteration in the business' financial
risk, but they will hold back statutory capital generation, to
some extent."

The fast pace of receivables growth was funded by the group's
publicly listed asset-backed term debt and variable funding
notes. S&P said, "As a nonprudentially regulated financial
institution with a relatively limited suite of available
wholesale funding, we consider this to be a key risk for
NewDay -- especially while its confidence sensitivity has the
potential to affect the group's significant growth ambitions.
Nevertheless, we consider its established funding structure
leaves the group better positioned than finance company peers, in
part because of the familiarity of credit cards as a securitized
asset class, the group's supportive investor base, and its well-
managed maturity profile. Given NewDay's U.K. focus, we expect
that pricing may increase across its asset-backed securitization
(ABS) programs in 2019, but expect that the strong securitization
franchise and growing access to the U.S.'s deep ABS market will
keep pricing largely supportive." The group also has a GBP30
million super senior revolving credit facility, which is
currently undrawn, and supports the group's access to short-term
liquidity.

S&P said, "We do not consider that the Financial Conduct
Authority's new rules on persistent credit card debt will
materially diminish NewDay's franchise or earnings under our
forecasts. We expect that the impact of remediation will be
modest over our forecast and believe that the business is well
prepared to monitor and manage any risk that does arise. We note
positively the company's success in implementing its new payment
plans, which are designed to counteract early-stage persistent
debt.

"Beyond the previous factors, we apply one notch of positive
comparable ratings adjustment, as we believe the group's low
level of fraud and absence of material payment protection
insurance conduct costs relative to peers, as well as its high-
margin earnings prospectively, support a 'B+' issuer credit
rating (ICR).

"The 'B' senior secured debt rating reflects the group's
significant proportion of encumbered assets relative to the rated
debt, given its funding profile. When a high proportion of assets
are encumbered, they are not available to help repay obligations
until the securitized debt has been repaid, which affects
prospects for the senior secured notes, in our view. We calculate
adjusted assets as total assets minus goodwill and intangibles,
minus assets pledged to the securitization facilities (given that
it is nonrecourse).

"The stable outlook reflects our expectation of improving
statutory profitability over the next 12 months. We also expect
NewDay to maintain its underwriting discipline and that it will
not materially accelerate its lending growth.

"We could lower the rating in the next 12 months if NewDay's
performance appears likely to significantly undershoot our
current expectations. This could stem from a worsening U.K.
macroeconomic environment suppressing profitability and capital
generation by driving up the cost of risk and write-offs in the
loan book. Similarly, we may take a negative rating action if we
become concerned that NewDay's risk appetite has increased or
that it faces operational issues associated with high receivables
growth. Dividend distributions that further weaken NewDay's
capital base could also lead us to lower the ratings.

"We consider an upgrade to be unlikely over the next 12 months,
in part due to NewDay's relatively new ownership structure and
concentrated business model. Factors we might consider as
positive include a material increase in capitalization beyond our
current expectations, supported by sustainable growth, high
profit retention, and an improving market position.

"We could raise the rating on the senior secured notes and
equalize it with the group credit profile if NewDay funds more of
its assets with retained earnings, rather than with
securitization."


PATISSERIE VALERIE: Appoints Nick Perrin as Interim CFO
-------------------------------------------------------
Camilla Hodgson at The Financial Times reports that cafe chain
Patisserie Valerie announced the appointment of an interim chief
financial officer on Dec. 5, a month after his predecessor
resigned amid the company's near collapse.

According to the FT, Nick Perrin will take up the role until the
board appoints a permanent CFO.

Mr. Perrin's predecessor, Chris Marsh, and Patisserie Valerie's
former CEO Paul May resigned weeks after the chain was rocked by
accounting irregularities, which prompted a shareholder rescue
and investigations by the UK's accounting watchdog and Serious
Fraud Office, FT relates.


SHOP DIRECT: Fitch Affirms B Long-Term IDR, Outlook Negative
------------------------------------------------------------
Fitch Ratings has affirmed Shop Direct Limited's Long-Term Issuer
Default Rating at 'B' with Negative Outlook. Fitch has also
affirmed Shop Direct Funding plc's GBP550 million senior secured
notes at 'B'/'RR4'/35%.

The ratings of SDL reflects its high leverage, which is balanced
by a sustainable business model and the healthy underlying
performance of its retail operations enabled by consumer finance.
Fitch expects retail-only sales growth to remain positive
influenced by Very, amid an extremely competitive UK retail
market. Fitch expects uncertainties on consumer confidence and
exchange rate volatility will weigh on profitability in FY19.
Strict cost control and continuing sales growth should however
reflect in an enhanced outlook on EBITDA margin and cash flows
complemented by the end of PPI claims (affecting consumer
finance) in August 2019. This should result in deleveraging
capacity.

The Negative Outlook reflects the downside risks derived from a
potentially more painful economic adjustment post Brexit, or
larger -than-expected remaining PPI payouts, leading to weak cash
flow and tighter liquidity headroom.

Key Rating Drivers

Growing Very Offsets Declining Littlewoods: SDL has consolidated
its presence in UK retail despite competition from traditional
retailers with an increasing online presence and pure-play
internet retailers (eg Amazon, ASOS and Boohoo). This is driven
by the success of Very, which accounted for 68% of retail sales
in (the financial year ended June 2018, and counteracted a
managed decline at Littlewoods. Its positive view of SDL's market
position is offset by the group's concentrated presence in the
UK's highly competitive market, which has seen a number of
innovators in retail, technology and customer reach emerge. SDL's
non-UK operations (primarily Ireland) represent just 3% of the
group's EBITDA.

Captive Client Base, Online Retail: Shop Direct Finance Company
Limited (SDFCL), a wholly-owned subsidiary of SDL and guarantor
of the issued bond, provides consumer financing as a
complementary core offering to its online general merchandise
retail operations. The profitability stemming from loans given to
retail customers allows spending on operating, IT and marketing
costs to support retail sales volume growth on a mutually
beneficial basis. Fitch views this feature as being supportive of
SDL's sustainable business model.

SDFCL has managed its loan portfolio adequately with a declining
impaired and non-performing loan ratio (11.4% four-year average;
9.53% as of FYE18). This ratio is high (given the profile of
targeted customers) but aligned with SDL's rating. Consumer
finance's profitability (excluding exceptional items ie. PPI
payments) is healthy at around 27% EBITDA margin.

Profitable Consumer Finance Mitigates PPI Risks: Solid consumer
finance profitability should help absorb further payments for PPI
(if they remain at an estimated GBP100 million-GBP120 million
annualised) while continuing to support marketing spend to
attract and hold onto retail customers. Currently Fitch expects
PPI payments to continue to weigh on the group's financial
flexibility up to the FCA deadline to consumers to submit new
claims by August 2019. If management demonstrates it can expand
its business profitably post-PPI, and after Brexit, with
shareholders demonstrating their commitment to the business, this
will result in the Outlook being revised to Stable.

Adequate Retail Profitability: SDL has adequate profitability for
its retail operations, adjusted for consumer finance, based on
its criteria relative to pure internet retailers of comparable
scale. Retail profitability, and its trend and volatility, are in
line with the rating. SDL also benefits from a fairly flexible
cost structure with limited use of operating leases. Retail-only
free cash flow (FCF) was mildly negative in FY18 and Fitch
expects a similar performance in FY19 due to weak funds from
operations (FFO) margin and capex, before moving to break-even in
FY20.

Leverage to Improve post FY19: High leverage is currently SDL's
main credit constraint. Following the issue of a GBP550 million
bond in December 2017, a drawdown of its GBP120 million of RCF as
of September 2018 (partly due to seasonality) and FFO weakness,
the affirmation and outlook potentially reverting to Stable is
predicated on FFO adjusted net leverage (reflecting a proxy of
retail cash flows and Fitch-adjusted debt) falling towards 5.5x
by FY21 from its expectation of around 6.5-7.0x in FY19. This
will be due to improving sales and a better outlook on profit
margins following management's cost control in spite of a product
mix shifting towards lower-margin electricals and potentially
higher unhedged purchasing costs due to sterling weakness.
Leverage is high but acceptable for the 'B' IDR given its solid
business profile.

Adjustments Follow Hybrid Business Model: In its approach Fitch
makes adjustments by stripping out the results of SDFCL to
achieve a proxy of cash flows available to service debt at SDL.
In its analysis Fitch also deconsolidates the GBP1.3 billion non-
recourse securitisation financing outside of the group under
SDFCL. This securitisation debt is core to the group's consumer
financing offer and is repaid by the collection of receivables
predominantly originated from retail.

However, because of the below-average asset quality and funding
and liquidity constraints for SDFCL (due to the encumbered nature
of SDFCL's receivables), Fitch adds back GBP286 million of debt
to SDL's retail operations. This reflects an assumed equity
injection from SDL in order to attain a capital structure for
SDFCL so that no cash calls would be required to support finance
service operations over the next four years . Fitch makes this
adjustment despite the business being financed on a non-recourse
basis via a receivables securitisation.

Commitment to Deleveraging Unproven: SDL's owners have
demonstrated their support to the business via a reduction in the
receivables position with Shop Direct Holding Limited (SDHL)
outside the restricted group of GBP100 million in June 2018. This
helped boost SDL's financial flexibility at a time of rising PPI-
related payments. The ratings reflect the risk that SDL's owners
may remain opportunistic about further cash leakages to SDHL, but
Fitch assumes such distributions will depend on future financial
performance. At present SDL is not particularly targeting
specific leverage metrics, suggesting limited commitment to
deleveraging.

Governance structure also remains weaker than peers'. SDL's
governance structure is weaker than those of listed peers, with
concentrated ownership, certain related-party transactions with
affiliate logistics entities Yodel and Arrow XL (even though
contracts are on an arm's length basis), and alack of
transparency or independent oversight.

Derivation Summary

With over 50% of the group's consolidated total assets related to
trade receivables -relative to 1.5% for Marks & Spencer Group Plc
(BBB-/Stable) or 3% for New Look Retail Group Ltd (CC) - the
asset base is inherently different from other traditional
retailers'. Financial services income at SDL is driven by a
retail customer base with over 95% of transactions including
credit.

With the focus on online retail operations and its client base,
the cost base is also different from traditional retailers'
without any meaningful fixed assets or operating leases. This is
reflected in stronger EBITDAR-based profit margin conversion into
FCF post- dividends. SDL's dedicated online retail activities are
enabled by consumer finance operations via intra-group loans.
This is an unusual business arrangement from the corporates
perspective but it helps to support its commercial proposition.

SDL's product and service offering to clients is attractive
relative to key competitor Amazon, Inc. (A+/Stable) or pure
online start-ups such as Bohoo, ASOS etc. SDL also benefits from
an efficient distribution infrastructure with the lowest picking
costs and an established online platform without duplication of
costs/capex compared with M&S, New Look or other brick-and-mortar
retailers with an expanding online presence.

Key Assumptions

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

  - Retail revenue to grow 1.7% in FY19, as growth at Very
outweighs a managed decline at Littlewoods, before gradually
accelerating to 3.8%-5.6% over FY20-FY22

  - Continued decline in retail-only EBITDA margin to 9.2% in
FY19, before increasing to around 11% over the next few years,
subject to product mix reflecting cost-control initiatives

  - Capex/revenue ratio of 4.5% in FY19 declining to around 4%
afterwards

  - Pension contribution of GBP19 million a year plus management
fees of GBP5 million a year recorded as other items before FFO

  - Non-operating/non-recurring cash outflows mainly related to
fulfilment centres

  - No shareholder distribution or cash leakages to SDHL over the
next four years

KEY RECOVERY RATING ASSUMPTIONS

Its recovery analysis continues to assume that SDL would be
considered a going concern in bankruptcy and that the group would
be reorganised (as is) as Fitch expects a better valuation in
distress than liquidating the assets (and extinguishing the
securitisation debt) after satisfying trade payables. Fitch has
assumed a 10% administrative claim.

Fitch uses its proxy retail -- only EBITDA of GBP79 million,
which excludes GBP70 million "run rate" marketing contribution
from SDFCL -- an amount deemed sustainable to continue to operate
as a combined "retail + consumer lending" platform post-
restructuring. Fitch applies a 10% discount to this EBITDA
figure, which results in stabilised "retail-only" post-
restructuring EBITDA of GBP71 million. Fitch also takes out the
GBP1.3 billion non-recourse securitisation financing outside the
group under SDFCL, as Fitch assumes that consumer finance can be
structured by a third-party bank or in a joint venture after
restructuring.

Fitch uses a 5x distressed enterprise (EV)/EBITDA multiple,
reflecting a growing online retail and technology platform and
competitive position enabled by consumer finance. In a distressed
scenario a fairly undamaged asset-light online retail brand with
attached (instead of core) consumer financing could fetch 5.0x
post-restructuring EBITDA, in its view.

For the debt waterfall Fitch assumes a fully drawn super senior
revolving credit facility of GBP100 million and GBP7.8 million of
debt located in non-guarantor entities. This debt ranks ahead of
the bonds. After satisfaction of these claims in full, any value
remaining would be available for noteholders (GBP550 million) and
a GBP50 million pari passu revolving credit facility issued by
Shop Direct Funding plc. This translates into an instrument
rating for the bonds of 'B'/'RR4'/35%.

RATING SENSITIVITIES

Future Developments That May, Individually or Collectively, Lead
to Positive Rating Action (Outlook being revised to Stable )

  - Ability and commitment to bring retail-only FFO adjusted
gross leverage below 6.5x, for example, driven by steady
profitability and more creditor-friendly financial policies

  - At least mildly positive sales growth and profitability as
reflected in an FFO margin remaining above 5%

  - Neutral-to-positive retail-only FCF along with FFO fixed
charge cover above 2.5x

  - Visibility on PPI claims resolution leading to enhanced cash
flow generation at consolidated level

  - Maintenance of adequate asset quality without affecting FS
profitability and cash flows, and ultimately continuing to
support SDL's retail activities

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

  - Retail-only FFO adjusted gross leverage staying above 7x
  - Tighter liquidity due to negative FCF, high permanent
drawings under the RCF and/or insufficient shareholder support

  - Neutral to mildly positive sales growth and profitability
under more challenging market conditions in the UK as reflected
in an FFO margin below 5%

  - FFO fixed charge cover below 2.5x

  - Deterioration in SDL's asset quality negatively affecting
consumer finance profitability and cash flows, and ultimately its
ability to support retail activities

Liquidity and Debt Structure

Satisfactory Liquidity through Low Season: Fitch views SDL's
liquidity as adequate for the rating. Liquidity headroom has
diminished given that GBP95 million was drawn under its GBP150
million total committed revolving credit lines as of June 2018.
Seasonality suggests that rather poor liquidity by end-Q119
(measured as cash minus drawn RCF) should improve in 2Q-3Q.
Therefore Fitch expects SDL will be able to cover short-term
liquidity requirements for operational needs. Its forecasts
indicate FY19 negative FCF of GBP27 million should be covered by
GBP55 million RCF availability. The group has no meaningful debt
repayments before 2022- 2023.

Summary of Financial Adjustments

Summary of Financial Statement Adjustments

  - Fitch strips out the results of SDFCL to achieve a proxy for
retail cash flows available to servicing debt at SDL. In its
analysis Fitch also deconsolidates the GBP1.3 billion non-
recourse securitisation financing outside the group under SDFCL.
However, on the basis of its view of below-average asset quality
and less stable funding and liquidity for SDFCL Fitch adds back
GBP286 million of debt to SDL's retail operations.

  -  Fitch uses a multiple of 8x, as SDL is based in the UK, to
capitalise GBP9.6 million of annual operating leases resulting in
GBP77 million off-balance-sheet debt being added to total
adjusted debt in its leverage calculation.

  - Other items before FFO include GBP19 million pension
contributions and GBP5 million management fees.

  -  Fitch deducts GBP20 million from reported cash considering
the intra-year seasonality in working capital. The adjustment
reflects its view of average peak-to-trough cash needed for
working capital purposes and hence not readily available for debt
service.


THOMAS COOK: Fundamentals Still Robust, Invesco Says
----------------------------------------------------
Oliver Gill at The Telegraph reports that Thomas Cook's biggest
shareholder has come out fighting for the 177-year-old travel
giant, blasting a stock market sell-off as an "overreaction".

According to The Telegraph, as fears grow over the company's
future, Invesco insisted Thomas Cook's "fundamentals remain
robust".

Almost 60% was wiped off the company's market value in eight days
after Thomas Cook last week announced its second profit warning
in two months, suspended its dividends and revealed it had opened
talks with its lenders in the wake of a burgeoning debt pile, The
Telegraph relates.

Thomas Cook Group plc is a British global travel company listed
on the London Stock Exchange and is a constituent of the FTSE 250
Index.


THOMAS COOK: Moody's Lowers CFR to B2 & Alters Outlook to Neg.
--------------------------------------------------------------
Moody's Investors Service has downgraded the corporate family
rating of the British tourism group Thomas Cook Group plc to B2
from B1 and its probability of default rating to B2-PD from B1-
PD. Moody's has also downgraded to B2 from B1 the ratings on
Thomas Cook's senior unsecured notes. Concurrently, the outlook
on Thomas Cook Group plc has been changed to negative from
stable.

"Our rating action reflects the deterioration of credit metrics
after unfavourable earnings development in the fiscal 2018 and
the group's weakened liquidity. Furthermore, the negative outlook
reflects Moody's concerns regarding the company's ability to
recover its profitability and cash generation in the coming
fiscal year as the macroeconomic tailwind becomes less supportive
whereas the outcome of Brexit negotiations and their potential
impact on customer behavior that may include a shift to late
bookings exacerbates the uncertainty" says Vitali Morgovski, a
Moody's Assistant Vice President-Analyst and lead analyst for
Thomas Cook.

RATINGS RATIONALE

Thomas Cook's earnings in the fiscal 2018 dropped sharply as the
company suffered from a prolonged period of unusually hot weather
this summer that was evidenced across all of its source markets
in Europe. While the first half-year of the fiscal 2018 developed
strongly and Thomas Cook increased capacity anticipating further
positive business development, the demand dropped sharply in the
summer months as customers delayed their holiday decisions
putting profit margins under pressure. Despite initial guidance
of a broadly stable EBIT development in 2018, group's underlying
EBIT declined by 23% to GBP250 million.

The company is currently in the process of executing its
strategy, focusing on a differentiated holiday offering to
transform its business model. The group's hotel portfolio is
built around the pool of 186 higher margin own-brand hotels.
Thomas Cook has signed partnerships with Expedia and Webjet on
more commodity-type hotels, providing its customers greater
choice at a lower cost. In partnership with LMEY a hotel fund has
been established in order to accelerate the development of the
own-brand hotels, targeting 10-15 new hotels by 2020. Direct
costs have been reduced and the proportion of online sales grew
to 48% of bookings.

However, transformational programme and start-up costs resulted
in a significant increase of exceptional items (most of which
Moody's does not adjust for) totaling GBP153 million, up GBP54
million from the previous year. High and growing amount of
transformational expenses contrasts sharply with Moody's
expectation of their gradual decline. In addition to exceptional
items, hotel fund investment, final payment to Co-op along with
adverse working capital development caused by delayed customer
bookings resulted in close to GBP 200 million negative free cash
flow (Moody's adjusted). Retained cash flow (RCF)/ net debt
(Moody's adjusted) deteriorated markedly to 15.4% from 23.4% and
the gross leverage ratio (Moody's adjusted) rose to 5.3x from
4.6x at the end of September 2017, while the cash balances were
simultaneously materially coming down. Moreover, the interest
cover fell below 1x, which is very weak for a B2 rating category
according to Moody's Business and Consumer Service Methodology.

The increase in leverage at the end of the year does not fully
reflect the extent of the deterioration of the company's balance
sheet. Due to Thomas Cook's extremely high business seasonality,
the obligations to hotels and other service providers for the
previous summer season are settled during the first fiscal
quarter of the following year. Therefore, Moody's expects Thomas
Cook will not only consume its available cash at the end of
September 2018, but will also rely heavily on its revolving
credit facility (as in previous years), allowing for GBP650
million cash drawdowns. This will increase the leverage ratio
during the first fiscal quarter 2019.

Moody's believes that Thomas Cook's overall liquidity is still
adequate. However, it has a limited headroom currently and is
materially weaker than it was last year, as its cash position
shrunk to GBP1 billion at the end of fiscal 2018 versus GBP1.4
billion in 2017.

The rating agency acknowledged positively the company's focus on
improving its reported operating profit, including a target for
lower amount of separately disclosed items, as well as its free
cash flow generation. Moody's notes the Board's decision to
suspend the dividend payment, though this measure by itself will
not have any meaningful impact on group's credit metrics - GBP9
million was distributed to shareholders during the fiscal 2018.

RATIONALE FOR THE NEGATIVE OUTLOOK

The negative outlook reflects Moody's view that the company's
weak credit metrics will leave limited room for further
underperformance while its business model will remain exposed to
increasingly common external shocks that can create volatility on
the company's performance but also to the Brexit-related
uncertainty.

WHAT COULD CHANGE THE RATING UP/DOWN

The rating could be downgraded if the Moody's adjusted EBITA/
interest expense ratio remains below 1.25x, the free cash-flow
remains negative or if the group's liquidity profile deteriorates
further.

The rating could come under positive rating pressure if the
company were to demonstrate the resilience of its business model
to external shocks; Moody's adjusted EBITA/ interest expense
ratio were to increase sustainably towards 2x; Moody's adjusted
RCF/net debt ratio were to stay above 15% throughout the seasonal
swings of the year and the company were to improve its liquidity
profile.

PRINCIPAL METHODOLOGY

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

PROFILE

Thomas Cook Group plc, based in London, UK, is Europe's second-
largest tourism business after the market leader TUI AG (Ba2
positive). The company retains leading positions in the important
outbound markets of Germany, the UK and Northern European
countries. The company provides its 11 million customers an
access to a broad variety of hotels with 186 own-brand hotels
building the core of this portfolio. Furthermore, the group's
Airline business with 100 aircrafts servicing 20 million
customers is Europe's third largest airline to sun & beach
destinations. In the fiscal year to September 2018 the group
generated revenues of GBP9.6 billion. The company is listed on
the London Stock Exchange.

AFFECTED RATINGS

Downgrades:

Issuer: Thomas Cook Group plc

Probability of Default Rating, Downgraded to B2-PD from B1-PD

Corporate Family Rating, Downgraded to B2 from B1

Senior Unsecured Regular Bond/Debenture, Downgraded to B2 from B1

Issuer: Thomas Cook Finance 2 plc

Senior Unsecured Regular Bond/Debenture, Downgraded to B2 from B1

Outlook Actions:

Issuer: Thomas Cook Finance 2 plc

Outlook, Changed To Negative From No Outlook

Issuer: Thomas Cook Group plc

Outlook, Changed To Negative From Stable


UNIQUE PUB: S&P Affirms B Rating on Class N Notes
-------------------------------------------------
S&P Global Ratings affirmed its credit ratings on the class A, M,
and N notes issued by Unique Pub Finance Co. PLC (Unique
Finance).

The transaction is a corporate securitization of the U.K.
operating business of the leased and tenanted pub estate operator
Unique Pub Properties Ltd. (UPP or the borrower). It originally
closed in June 1999 and was last tapped in February 2005.

The transaction features three classes of notes (A, M, and N),
the proceeds of which have been on-lent by the issuer to UPP, via
issuer-borrower loans. The operating cash flows generated by UPP
are available to repay its borrowings from the issuer that, in
turn, uses those proceeds to service the notes.

The transaction will likely qualify for the appointment of an
administrative receiver under the U.K. insolvency regime. An
obligor default would allow the noteholders to gain substantial
control over the charged assets prior to an administrator's
appointment, without necessarily accelerating the secured debt,
both at the issuer and at the borrower level.

S&P said, "Following our review of UPP's performance, we have
affirmed our ratings on the class A, M, and N notes issued by
Unique Finance.

"Amid challenging operating conditions, characterized by
significant competition and cost inflation, we have broadly
maintained our operating cash flows forecasts, while our business
risk assessment is unchanged at fair.

"Our ratings on the notes address the timely payment of interest
and principal due on the class A notes, and the ultimate payment
of interest and principal due on the class M and N notes. They
are based primarily on our ongoing assessment of the borrowing
group's underlying business risk profile (BRP), the integrity of
the transaction's legal and tax structure, the robustness of
operating cash flows supported by structural enhancements, and
our overall view of the creditworthiness of the borrower."

  RATINGS AFFIRMED

  Unique Pub Finance Co. PLC

  Class      Rating

  A3         BB (sf)
  A4         BB (sf)
  M          B+ (sf)
  N          B (sf)



                            *********

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.


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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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