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

                           E U R O P E

          Friday, December 28, 2018, Vol. 19, No. 256


                            Headlines


B E L G I U M

EUROSTAR DIAMOND: Enters Restructuring Proceedings in Belgium


C Z E C H   R E P U B L I C

RESIDOMO SRO: S&P Affirms 'BB-' Rating on EUR680 Sec. Notes


F R A N C E

ACROPOLE HOLDING: S&P Assigns B- Long-Term ICR, Outlook Stable
NOVAFIVES: S&P Alters Outlook to Negative & Affirms B+ LT ICR
TEREOS SCA: S&P Cuts Issuer Credit Rating to 'BB-', Outlook Neg.


G E R M A N Y

HSH NORDBANK: Fitch Withdraws BB+ LT IDR for Commercial Reasons
PHOENIX PHARMAHANDEL: S&P Alters Outlook to Neg., Affirms BB+ ICR
SC GERMANY 2018-1: S&P Assigns BB Rating to Cl. D-Dfrd Notes
TAKKO FASHION: S&P Lowers Long-Term ICR to 'B-', Outlook Stable
TUI AG: Moody's Affirms Ba2 Corp. Family Rating, Outlook Pos.


G R E E C E

NAVIOS MARITIME: Moody's Raises CFR to B2, Outlook Stable


I R E L A N D

PROVIDUS CLO II: Fitch Assigns B-sf Rating to Class F Debt
TAURUS 2018-3: Moody's Assigns B1 Rating to Class F Notes


N E T H E R L A N D S

DRYDEN 66: Moody's Rates EUR10.5MM Class F Notes 'B2'
DRYDEN 66: Fitch Assigns B-sf Rating to Class F Debt


P O R T U G A L

SATA AIR: Moody's Assigns Ba1 Rating to EUR65MM Unsecured Notes


R U S S I A

TATTELECOM PJSC: Fitch Affirms BB Long-Term IDR, Outlook Stable


S P A I N

ALMIRALL SA: Moody's Affirms Ba3 CFR, Outlook Stable
ZINKIA ENTERTAINMENT: Makes Second Payment of Insolvency Debt


U K R A I N E

INTERSTATE BANK: Fitch Affirms BB LT IDR, Outlook Positive


U N I T E D   K I N G D O M

DEBENHAMS PLC: Landlord Sues Over GBP132,600 in Unpaid Rent
FERROGLOBE PLC: Fitch Puts B LT IDR on Rating Watch Negative
GOURMET BURGER: CVA Process to Help Improve Performance
HORIZON INSURANCE: Placed Into Administration
NEW LOOK: To Cut GBP1.3BB Debt Amid Tough Trading Conditions

SEADRILL PARTNERS: Moody's Affirms Caa2 CFR, Outlook Stable


U Z B E K I S T A N

UZBEKISTAN: S&P Assigns 'BB-/B' Sovereign Credit Ratings


X X X X X X X X

[*] BOOK REVIEW: Macy's for Sale


                            *********



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B E L G I U M
=============


EUROSTAR DIAMOND: Enters Restructuring Proceedings in Belgium
-------------------------------------------------------------
Joshua Freedman at Diamonds.net reports that Eurostar Diamond
Traders has entered restructuring proceedings in Belgium, having
amassed substantial debts, according to the company's court-
appointed administrator.

The Antwerp-based diamond manufacturer owes more than US$500
million to creditors across its global operations, Alain Van den
Cloot -- vandencloot@dcadvocaten.be -- one of the administrators,
estimated in an email to Rapaport News, Diamonds.net relates.

Two Antwerp courts designated Mr. Van den Cloot and a second
attorney, Nathalie Vermeersch -- nv@vermeerschdepaep.be -- as
provisional administrators for Eurostar's Belgian business last
month, Diamonds.net recounts.  Their role is to help the company
protect its assets and pay off its debts, Diamonds.net notes.

"The reasons why [Eurostar] suffered those severe losses the last
two years are under investigation," Diamonds.net quotes Mr. Van
den Cloot, a lawyer at de Clippele Advocaten, as saying.
"Receivables should cover some debts, but if that's still the
situation, I can't assess right now."

The court documents list the trustees of bankrupt Antwerp-based
diamond company Exelco among those that petitioned the court, as
Eurostar owed the Exelco estate US$600,320 for an unpaid invoice,
Diamonds.net discloses.



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C Z E C H   R E P U B L I C
===========================


RESIDOMO SRO: S&P Affirms 'BB-' Rating on EUR680 Sec. Notes
-----------------------------------------------------------
S&P Global Ratings said that it is affirming its 'BB-' issue
rating on Residomo s.r.o's EUR680 senior secured notes. S&P has
assigned a recovery rating of '3' to the debt, indicating its
expectation of meaningful recovery (50%-70%; rounded estimate;
65%) in the event of a default.

S&P said, "We are now assigning a recovery rating to Residomo's
senior secured debt because the Czech Republic's jurisdiction,
ranked in category 'B', now falls under analytical recovery
coverage. The recovery rating reflects our view of Residomo's
valuable asset base, comprising investment properties, as well as
its limited amount of prior ranking debt instruments. We
therefore expect the recovery rate will be in the 50%-70% range
and the recovery rating will be in line with the issuer credit
rating. In our hypothetical default scenario used for the
recovery analysis, we assume a severe macroeconomic downturn in
the Czech Republic, resulting in market depression and
exacerbated competitive pressure. We value the group as a going
concern. Our stressed valuation figure comprises the stressed
value of the company's property portfolio.

"Our view of Residomo's business risk profile remains unchanged
and continues to reflect its relatively small and geographically
concentrated residential investment property portfolio in the
Moravia-Silesia region of Czech Republic, comprising 43,268
apartments of 2.6 million square meters and 1,748 commercial
units. However, it's small portfolio size is somewhat offset by
the company's position as one of the largest residential property
companies in Central and Eastern Europe, its strong rental
reversionary potential, stable operating dynamics, with no
reliance on a single asset, and a broad tenant base.

"In our view, Residomo's financial risk profile also remains
unchanged, still underpinned by stable recurring cash flows and
sound EBITDA interest coverage, but offset by relatively high
indebtedness with a debt-to-debt plus equity ratio projected at
about 70% over the next 12-18 months. We still believe that
Residomo's ultimate shareholders, Blackstone and Round Hill
Capital, which we consider financial sponsors, are committed to
the company, with no plans for divestment or dividends in the
medium term. Their financial policy targets a loan-to-value ratio
of about 55% in the next two years, and EBITDA interest coverage
comfortably above 2.0x at all times."



===========
F R A N C E
===========


ACROPOLE HOLDING: S&P Assigns B- Long-Term ICR, Outlook Stable
--------------------------------------------------------------
S&P Global Ratings said that it assigned its 'B-' long-term
issuer credit rating to Acropole Holding, an intermediate holding
company of France-based insurance brokerage services group Siaci
Saint Honore, and to Acropole Holding's financing subsidiary,
Sisaho International SAS. The outlook on both these entities is
stable.

S&P said, "At the same time, we assigned our 'B-' issue rating
and '3' recovery rating to Sisaho International's proposed EUR485
million senior secured term loan maturing in 2025. The '3'
recovery rating reflects our expectation of average recovery
prospects (50%-70%; rounded estimate: 55%) in the event of a
payment default.

"The ratings are in line with the preliminary ratings we assigned
on July 26, 2018."

The rating action follows the acquisition of Siaci Saint Honore
by the existing management team and private equity firm
Charterhouse. Siaci Saint Honore's principal activity is to
provide insurance brokerage and associated advisory services to
large and midsized corporates in France--mainly focusing on
employee benefits, such as pension and medical insurance--and
industrial risk protection (IRP), including specialty risk
insurance.

The business risk profile is constrained by:

-- Siaci Saint Honore's relatively small size in absolute terms.
    It reported gross revenues of about EUR344 million and S&P
     Global Ratings-adjusted EBITDA of about EUR75 million in
     2017.  S&P sees Siaci Saint Honore as significantly smaller
     than some of its peers, for example, USI and Broadstreet in
     the U.S., and Hyperion in the U.K. Its size makes it
     vulnerable to increased competition should its peers decide
     to expand their presence in the French market.

-- Its limited end-product diversity. It generates over 65% of
    its revenues from the competitive and fragmented employee
    benefits-related insurance brokerage services segment for
    companies operating in France and abroad. It generates its
    remaining revenues in the specialty risk insurance brokerage
    segment.

-- Its geographic concentration in France, where it generates
    about 75% of gross sales, although it is expanding its
    presence in international markets in Africa, the Middle East,
    and Asia.

-- Its lower-than-peers' adjusted EBITDA margin of about 21% in
    2017. By contrast, S&P expects some of its direct U.S. peers,
    including Alera and Broadstreet, to show adjusted EBITDA
    margins above 25%.

In addition, Siaci Saint Honore's need to retain its skilled
workforce could make it harder to cut costs quickly to protect
margins during times of stress, particularly since the French
market is characterized by relatively employee-friendly labor
laws. That said, this is relatively common for professional
services companies. S&P understands about 60% of the group's
workforce is based in France and part of it is employed through
temporary contracts, which enhances its cost flexibility.

S&P said, "We also consider that Siaci Saint Honore has higher
reinvestment needs than many of its direct peers due to
historical underinvestment in the group's IT platform. While we
acknowledge management's plans to address these legacy issues and
build the group's digital offering, we expect capital expenditure
(capex) of 4%-5% of sales per year, which is above average for
the broader business services industry.

"Our assessment of Siaci Saint Honore's business risk profile
acknowledges the group's leading position in the niche markets in
which it operates and its large and diversified client base
(3,500 clients, of which the top 30 clients generated 30% of
gross sales in 2017). Siaci Saint Honore's concentrated exposure
in the employee benefits-related insurance brokerage market is
somewhat mitigated by its exposure to different subsegments, such
as health, pension, savings, and international mobility. We also
consider that the predictability of future earnings is supported
by its long track record of operations, the long-term nature of
its relationships, and retention rates of around 95%." Siaci
Saint Honore's relatively high retention rates are supported by
the group's in-house expertise in the French employee benefit-
related insurance market and its ability to progressively
increase its share of client spending by cross-selling its
services in the employee benefit and IRP segments. This has
helped it generate relatively stable organic revenue growth of
about 5% per year. Siaci Saint Honore exhibits good end-market
diversity, with revenues being generated across industries that
are not directly correlated, such as construction, utilities,
transport, health care, and luxury & consumer goods; this should
partially mitigate the group's relatively high concentration to
the French market.

Siaci Saint Honore acquired 15 companies between 2015 and 2017,
mostly small brokerage firms that were already included in Siaci
Saint Honore's network and systems. S&P said, "We consider that
Siaci Saint Honore's acquisitive nature supports the growth of
its EBITDA base, but creates some integration risks. However, we
acknowledge the entity's solid track record in integrating
acquired businesses, facilitated by the existing relationship,
the experience of its management team, and its strategy of
pursuing relatively small transactions. We expect Siaci Saint
Honore to continue this strategy, given the highly fragmented
nature of the insurance brokerage services market."

S&P said, "We assess Siaci Saint Honore's financial risk profile
as highly leveraged. We anticipate the acquisition of the group
by Charterhouse will result in adjusted debt to increase to
approximately EUR1.1 billion by end-2018, including a EUR485
million proposed term loan B, approximately EUR77 million in
operating lease commitments, EUR52 million in acquisition-related
contingent liabilities, and about EUR460 million of convertible
bonds and preference shares. We view the convertible bonds and
preference shares as debt-like, because the documentation does
not sufficiently restrict cash payments at a fixed rate on those
instruments. The convertible bonds can also be converted to
preference shares at the option of the bondholders."

S&P's base case assumes:

-- Revenues to grow organically in line with Siaci Saint
    Honore's historical growth of about 5.0%. S&P also factors in
    Siaci Saint Honore's recent acquisitions and expected future
     external growth, which it expects to support revenue growth
     in 2018 of about 15%. In 2019, S&P forecasts 7.0%-10.0%
     revenue growth, including expected bolt-on acquisitions;

-- An adjusted EBITDA margin of about 21%-22% in 2018, in line
    with Siaci Saint Honore's adjusted EBITDA margin of 21% in
    2017. S&P expects this to increase slightly to about 22.0%-
    22.5% by 2020 due to ongoing efficiency initiatives.

-- The group will continue to incur restructuring and
     acquisition costs, which S&P sees as recurring in the context
     of Siaci Saint Honore's external growth strategy and
     efficiency improvement programs. S&P estimates these
     restructuring and acquisition costs to be about EUR8 million
     per year, compared with EUR10 million-EUR18 million in
     previous years. Over the past three years, the group has
     undertaken significant IT investments and incurred material
     restructuring expenses.

-- About EUR25 million cash payments related to bolt-on
    acquisitions per year.

-- Capex of about EUR30 million in 2018, reducing to EUR20
    million-EUR25 million in 2019.

-- Working capital outflows of about EUR5 million per year, to
    support the expected rapid revenue growth.

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

-- Adjusted EBITDA of 12x-13x at end-2018, falling to about 12x
    in 2019.

-- Adjusted FFO to debt of 3-4% in 2018 and 2019.

S&P said, "The stable outlook reflects our view that Siaci Saint
Honore will continue to increase its EBITDA base and generate
positive free operating cash flow in the next 12 months, based on
supportive operating conditions in its market and on the seamless
integration of recently acquired entities.

"We see limited pressure on the rating in the near term. However,
we could lower the rating if we became concerned about the
sustainability of Siaci Saint Honore's capital structure or
liquidity. Specifically, we would consider lowering the rating if
free operating cash generation were to turn negative for a
prolonged period.

"We could consider raising the rating if Siaci Saint Honore were
to demonstrate a faster-than-expected increase in its EBITDA base
and a more robust free operating cash flow generation, resulting
in rapid deleveraging."


NOVAFIVES: S&P Alters Outlook to Negative & Affirms B+ LT ICR
-------------------------------------------------------------
S&P Global Ratings said that it revised its outlook on France-
based industrial engineering group Novafives to negative from
stable. S&P also affirmed its long-term issuer credit rating at
'B+'.

S&P said, "At the same time, we affirmed our 'B+' issue rating on
the group's outstanding EUR600 million senior secured notes. The
'4' recovery rating reflects our expectation of average recovery
prospects (30%-50%; rounded estimate: 35%) in the case of a
default.

"We also affirmed our 'BB' issue rating on the group's EUR115
million super senior revolving credit facility (RCF). The
facility has a recovery rating of '1', indicating our expectation
of very high recovery prospects (90%-100%; rounded estimate:
95%)."

The outlook revision follows Novafives' profit warning, with
challenging contract execution, especially in the metals,
automotive, and energy segments, as well as U.S. trade sanctions
affecting exposures in Russia and Iran, resulting in a reduction
in forecast EBITDA for 2018 to EUR95 million from EUR135 million.
It reflects that S&P could downgrade Novafives in the next six to
12 months if it doesn't see clear EBITDA margin improvement to
more than 6% in 2019 from a low of 4%-5% in 2018.

S&P said, "As a result, we now expect Novafives' S&P Global
Ratings-adjusted funds from operations (FFO) to debt will decline
to about 4.5% by the end of 2018, but will rebound to about 12%
by the end of 2019. However, we consider the burden on EBITDA
observed in 2018 as temporary and expect a material improvement
in margins to about 6.0%-6.5%% in 2019, back to 2017 levels,
supported by a strong backlog of about EUR1,570 million. In
addition, we expect profitability will improve in 2019,
underpinned by the logistics division and restructuring
measures."

As a reaction to the weaker-than-expected 2018 results, the
group's restructuring measures launched in 2016 to cope with
underutilized assets in its metals segments, will be extended to
2019, to mitigate any further delays in contract execution. S&P
expects this will weigh on Novafives profitability.

S&P continues to consider that the group's business risk profile
is constrained by the moderate scale of its operations compared
with other capital goods sector companies. However, despite its
small size, Novafives has a wide product offering and operates in
several different niche markets, where it often ranks among the
top-three players. Furthermore, the group enjoys a pronounced
presence outside in the U.S., Japan, and China, as well as other
non-European markets. In addition, owing to the variety of end
markets it serves, and the strength of its market position,
Novafives does not face customer or supplier concentration. These
strengths are somewhat offset, in S&P's opinion, by its view of
the highly competitive industrial engineering market, which has
recently intensified pressure on margins.

Novafives' asset-light business model supports its business
profile. By externalizing most of the manufacturing process, the
group benefits from a relatively flexible cost structure and
limited capital expenditures (capex). Novafives' good end-market
and geographic diversification offset slightly below-average
profitability. The rating also reflects the company's below
average profitability level relative to the wider capital goods
sector, and compared with the group's historical EBITDA margin of
about 9%.

S&P said, "In our view, the agreement signed in December 2017
with Caisse de depot et placement du Quebec (30% of the shares),
Public Sector Pension investment (30%), and Ardian (8%), does not
affect the group's governance. Furthermore, we see these two new
shareholders as long-term strategic investors rather than
financial sponsors. Novafive's management still controls the
group structure, with 32% of the shares, and the majority of the
voting rights through a golden share."

S&P's base case assumes:

-- Real GDP growth of 1.7% in the eurozone, 2.2% in the U.S.,
    and 5.5% in Asia-Pacific.

-- Revenue of about EUR2 billion in 2018, increasing by about 3%
    in 2019, driven by the logistics segment thanks to positive
    mega-trends (e-commerce, automation, etc.), and healthy
     investment in sorting and order fulfilment hubs on the back
     of e-commerce and courier services players.

-- EBITDA margin of about 4.5% in 2018 and about 6.0%-6.5% in
    2019, supported by the restructuring measures and the
    execution of renewed backlog.

-- Capex of EUR26 million-EUR28 million in 2018 and 2019.

-- No dividends.

-- No major acquisitions.

-- About EUR100 million cash available as of Sept. 30, 2018,
    excluding about EUR20 million cash available (20%) to net the
    debt.

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

-- Total FFO to debt of about 4.5% in 2018, increasing to about
    12% in 2019;

-- FFO to cash interest cover of2.0x-2.5x in 2018, increasing to
    3.5x-4.0x in 2019; and

-- Break-even FOCF in 2018 and about EUR60 million-EUR65 million
    in 2019, compared with EUR61.8 million in 2017.

The negative outlook reflects the possibility of a downgrade in
the next six to 12 months if Novafives' EBITDA margin does not
improve to more than 6% in 2019, from a low of 4%-5% in 2018, and
FFO to debt remains below 12%. Such a scenario could materialize
if high restructuring costs, unprofitable contract execution, or
loss of market shares prevent an improvement in profitability.
S&P currently sees only limited headroom under Novafives credit
metrics to remain consistent with a 'B+' rating.

S&P could revise the outlook to stable if restructuring measures
and continued sales growth help to restore profitability and
credit metrics, including an EBITDA margin above 6% and a FFO-to-
debt ratio of about 12%.


TEREOS SCA: S&P Cuts Issuer Credit Rating to 'BB-', Outlook Neg.
----------------------------------------------------------------
On Dec. 21, 2018, S&P Global Ratings lowered its issuer credit
rating on French sugar producer Tereos SCA to 'BB-' from 'BB'.
The outlook remains negative.

At the same time, S&P lowered its issue-level rating on the
senior unsecured notes issued by Tereos Financing Groupe 1 and
guaranteed by Tereos SCA to 'BB-' from 'BB', in line with the
issuer credit rating. The recovery rating remains '4', indicating
S&P's expectation for average (30%-50%; rounded estimate: 30%)
recovery in the event of a payment default.

The negative outlook reflects S&P's view that Tereos' credit
metrics may not gradually recover next year if the profitability
of the European sugar activities remains weak.

S&P said, "The downgrade reflects our opinion that Tereos'
operating performance will be weaker than expected this year and
a strong rebound in EBITDA is still uncertain for next year. We
have lowered our EBITDA forecast to about EUR350 million-EUR375
million (compared with EUR400 million-$450 million previously)
for this year (year-end March 2019). We see a high degree of
uncertainty as to whether profitability in sugar operations
(notably in Europe) would rebound strongly in the second half of
next year. This means it remains highly uncertain at this stage
that adjusted EBITDA could reach EUR500 million or above next
year. Tereos may thus not be able to clearly reduce its adjusted
debt leverage from 6x (forecast for March 2019) to below 5x by
March 2020.

"We believe that Tereos' EBITDA base will drop by about 30% this
year, mostly due to the very weak profitability of its European
sugar operations (which accounted for 30% of group EBITDA last
year). To a lesser extent, we see lower profitability in Sugar
International (52% of group EBITDA last year and comprising
mostly the sugar and ethanol businesses in Brazil), due to still
low global and Brazilian domestic sugar prices."

In Europe, the price for sugar in the European Union was reported
at EUR347 per ton in September 2018 while the global price for
white sugar was about $335 per ton in mid-November 2018. At these
prices, most sugar producers operate below their cost of
production, notably in Western Europe. S&P said, "We think it is
still uncertain whether sugar prices in Europe could rebound
significantly from historical lows next year. At this stage,
Europe will notably still bear a sugar production surplus and
consumption is declining. We think it will also take time for
higher prices to translate into higher profit for Tereos as the
new contracts at higher price will likely only kick in in the
second half of next fiscal year. We also believe that Tereos will
likely reduce its minimum beet price paid to farmers, which
should support profitability, but the magnitude has yet to be
confirmed." Meanwhile, European ethanol price and profitability
remain highly volatile, moving between recurring sector
overcapacities and volatile feedstock costs."

For Sugar International, world sugar prices have rebounded a
little bit at $12.5 cents/lb in the anticipation of future sugar
deficits this year and next year, notably due to lower-than-
expected sugar production in India, Brazil, and Europe because of
adverse weather conditions. That said, the deficit forecast for
next year is yet to be confirmed and will take months to confirm.
S&P said, "We continue to see the direction of global sugar
prices as uncertain because they are linked to unpredictable
external factors like changing weather conditions in key regions,
government price policies and export subsidies in India,
government ethanol policies in Brazil, Petrobras pricing in
Brazil, and currency exchange movements like BRL/US$ (Brazil is
one of the largest sugar producers). In terms of earnings from
ethanol in Brazil, we believe that despite low global oil prices
(now below $60 per barrel) and an increase in supply, the
increased number of flex vehicles and government policies should
continue to support ethanol demand and prices in Brazil."

S&P said, "Overall, we still believe that it's unclear at this
stage what the timing and magnitude of the rebound of sugar
prices in Europe and globally will be. There is thus still high
uncertainty regarding the potential rebound in profitability of
Tereos' sugar operations next year. We also note the high
sensitivity of the group's adjusted debt leverage to any
potential downward revision to our base-case EBITDA projections.
A 100-basis-point decrease in EBITDA could lead to adjusted debt
to EBITDA remaining between 5x and 6x next year.

"In terms of free cash flow, we see Tereos being able to slightly
lower capital spending to about EUR400 million annually, which
should help stabilize free operating cash flow to a neutral level
this and next year. This means that the group's adjusted debt
level should remain relatively stable at about EUR2.4 billion-
EUR2.5 billion this and next year.

"We anticipate that Tereos will proactively manage its upcoming
debt maturities, notably the EUR500 million of senior notes
maturing in March 2020. We understand that the group can call the
instrument at par and make partial repayments from March 2019.
The group has already raised EUR225 million of undrawn committed
credit lines which can be used for this purpose and should retain
the support of its key relationship banks, notably large French
lenders.

"The negative outlook reflects our view that there is at least a
one-in-three chance that Tereos' credit metrics will continue to
be under pressure next year for the rating category.

"We believe this could occur if earnings from Sugar Europe
continue to be very weak due to still-low market prices and an
inability to significantly adjust its operating cost structure,
and beet prices, to the new market conditions. We would also view
negatively weakening lower profitability in ethanol operations in
Brazil, for example, due to changes in regulation or policies,
accentuated by adverse currency and oil price movements.

"We could consider a downgrade should debt leverage remain at 6x
and funds from operations (FFO) to debt remain below 10% on a
sustained basis.

"We could revise the outlook to stable if we were to see a sharp
and sustained increase in the profitability of the European sugar
operations in the next 12-18 months. This could arise from higher
market prices due to lower supply of sugar in Europe and higher
global prices. We would also assume stable earnings from the
ethanol operations in Brazil and the S&S operations, which have
better market conditions than sugar.

"In terms of credit metrics we would need to see Tereos clearly
able to reach adjusted debt leverage of 5x and EBITDA interest
coverage near 3x in the next 12- 18 months."



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G E R M A N Y
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HSH NORDBANK: Fitch Withdraws BB+ LT IDR for Commercial Reasons
---------------------------------------------------------------
Fitch Ratings has affirmed HSH Nordbank's Long-Term Issuer
Default Rating (IDR) at 'BB+' with a Stable Outlook. Fitch has
simultaneously withdrawn HSH's ratings for commercial reasons.

Fitch will no longer provide ratings or analytical coverage of
HSH.

KEY RATING DRIVERS

VR, IDRS AND SENIOR DEBT

HSH's VR, IDRs and senior debt ratings reflect its corporate
banking focused business model, significantly improved asset
quality and capitalisation balanced by low operating profit,
which Fitch expects to improve gradually, and a predominantly
wholesale-driven funding profile despite plans to increase retail
funding. HSH maintains its business focus on Germany, where Fitch
expects the operating environment to remain solid.

Fitch expects HSH to develop its business model under new
ownership and with a cleaned-up balance sheet. However, Fitch
views HSH's franchise as moderate as it operates in the highly
competitive German corporate banking sector, with a less diverse
business model than universal bank peers, by concentrating on
corporate customers.

Fitch expects profitability to be supported by lower loan
impairment charges following the clean-up of HSH's balance sheet,
and by the bank's plans to significantly increase cost-
efficiency, apply sound pricing discipline, increase fee-
generating businesses and lower funding costs. Fitch believes
that the bank will face challenges in improving revenue given
HSH's role as a commercial bank in a competitive sector, with
relatively high funding costs that should improve only gradually.
Moreover, Fitch believes that the bank's business model and
exposure to cyclical industries, including commercial real
estate, could make the bank's profitability more volatile through
economic cycles.

HSH's asset quality has improved significantly following the
disposal and further run-down of non-core and non-performing
assets. Fitch expects the gross non-performing loan (NPL) ratio
to drop and stabilise at around 2%-3% in the next five years as
NPLs fall to below EUR1 billion at end-2018 from EUR7.4 billion
at end-2017. However, Fitch's assessment of asset quality also
reflects concentration risk in HSH's commercial real estate and
shipping credit exposures, and in the bank's corporates book
remaining skewed towards the home regions in northern Germany.

HSH's common equity tier 1 (CET1) ratio should improve
substantially by end-2018 following the announced repurchase of
hybrid Tier 1 silent participations well below par value. For the
next four years, Fitch therefore expects the CET1 ratio to remain
comfortably above 15%, which Fitch views as adequate, given the
reduction in HSH's risk appetite and exposure on the bank's
balance sheet. However, Fitch's assessment of capitalisation also
factors in weak internal capital generation, given low net income
expected in the coming years, which Fitch believes is vulnerable
to cyclical performance swings.

Fitch's assessment of funding and liquidity are based on the
expectation that HSH will remain predominantly wholesale-funded
and that its customer loans/deposits ratio will increase. Fitch
believes that the agreement reached between the bank and the
German banking association (Bundesverband Deutscher Banken) for a
smooth transition to a senior membership in its voluntary deposit
protection fund of the private sector banks by 2022 should
compensate the loss of funding benefits that HSH has had to date
as a member in the institutional support scheme of the
Landesbanken and savings banks.

The reliance on wholesale funding is mitigated by the bank's
plans to increase its retail deposits base and to raise about
EUR8 billion retail deposits by 2022, representing over half of
total deposits. HSH has already raised more than EUR3 billion
retail deposits this year, which indicates that its target is
realistic. HSH has access to other funding sources, including
covered bonds, asset-backed financing and funding from
development banks. Finally, the implementation of Bank Resolution
and Recovery Directive (BRRD) 2 in Germany allows HSH to issue
senior preferred debt, which ranks senior to senior non-preferred
debt and should allow the bank to reduce funding costs.

SUPPORT RATING AND SUPPORT RATING FLOOR

Following the privatisation, HSH's Support Rating and Support
Rating Floor reflect Fitch's view on support from the authorities
in case of need. Institutional support from HSH's former owners
is no longer factored into the bank's ratings, and in its
opinion, institutional support from the new private-sector
owners, while possible, cannot be relied on.

The Support Rating assessment of '5' and Support Rating Floor
assessment of 'No Floor' reflect its view that, following the
implementation of legislation and resolution tools pursuant to
the BRRD in Germany in 2015, senior creditors can no longer rely
on receiving full extraordinary support from the German
sovereign, should HSH become non-viable.

SENIOR PREFERRED, DERIVATIVE COUNTERPARTY RATING (DCR) AND
DEPOSIT RATINGS

Fitch rates HSH's debt that ranks pari passu with senior
preferred debt, Deposit Ratings and DCR one notch above HSH's
Long-Term IDR. Under German insolvency law, senior unsecured
bonds that were issued prior to July 2018 and which are not
deemed 'plain vanilla', rank senior to other senior unsecured
bonds issued before that date and rank pari passu with senior
preferred debt issued after that date.

The debt ratings at one notch above the Long-Term IDR reflect its
view that HSH's consolidated buffer of subordinated debt and debt
that ranks pari passu with senior non-preferred debt is likely to
be maintained well above 8% of the bank's risk-weighted assets
and will therefore be sufficient to recapitalise the bank,
preventing a default on other senior preferred liabilities,
including deposits, upon resolution.

STATE-GUARANTEED/GRANDFATHERED SECURITIES

The rating of HSH's state-guaranteed and grandfathered senior
debt and subordinated debt reflect the credit strength of the
guarantor - the federal state of Schleswig Holstein and the City
of Hamburg - and its view that they will continue to honour their
guarantees after the sale of HSH.

RATING SENSITIVITIES

Not applicable.

The rating actions are as follows:

HSH Nordbank AG Bank

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

Short-Term IDR: affirmed at 'B' and withdrawn

Support Rating: affirmed at '5' and withdrawn

Support Rating Floor: affirmed at No Floor and withdrawn

Derivative Counterparty Rating: affirmed at 'BBB-(dcr)' and
withdrawn

Viability Rating: affirmed at 'bb+' and withdrawn

Long-term senior unsecured debt, including programme rating:
affirmed at 'BB+' and withdrawn

Long term senior preferred debt, including programme rating:
affirmed at 'BBB-' and withdrawn

Short term senior preferred debt issuance programme: affirmed at
'F3' and withdrawn

Long-term deposits: affirmed at 'BBB-' and withdrawn

Short-term deposits: affirmed at 'F3' and withdrawn

State-guaranteed/grandfathered senior and subordinated debt:
affirmed at 'AAA' and withdrawn


PHOENIX PHARMAHANDEL: S&P Alters Outlook to Neg., Affirms BB+ ICR
-----------------------------------------------------------------
S&P Global Ratings revised to negative from stable its outlook on
Germany-based pharmaceutical distributor PHOENIX Pharmahandel
GmbH & Co KG (Phoenix). S&P also affirmed its 'BB+' long-term
issuer credit rating on the company.

S&P said, "At the same time, we affirmed our 'BB+' issue rating
on Phoenix's EUR1.25 billion credit facility and two senior
unsecured notes of EUR300 million and EUR200 million
(outstanding). The recovery rating on debt remains '4',
indicating our expectation of average (30%-50%; rounded estimate
40%) recovery prospects in the event of a payment default.

"The outlook revision reflects our view of Phoenix's operational
challenges as a result of difficult market conditions, especially
in the U.K., Germany, and France. Furthermore, we anticipate that
a sizable portion of Phoenix's operating cash flow will continue
to be tied up in working capital because of inventory
requirements supporting growth, customer service requirements,
and stricter payment conditions that are increasingly prevalent
in the market. Despite the strong barriers to entry that protect
the business, competition among existing players is fierce.
Moreover, Phoenix's performance is vulnerable to regulatory
changes regarding reimbursement that can be difficult to predict.

"Although the company's performance is on track to achieve
budgeted EBITDA for fiscal year 2019 (fiscal year ends Jan. 31,
2019), we believe there is a one-in-three chance that EBITDA and
cash flow generation will fall short of our operating base-case
scenario that anticipates reduction in leverage to less than 4x
in calendar 2020.

"Our base-case scenario already takes into account measures taken
by the U.K. government via the Department of Health and Social
Care to reduce fee-based payments to pharmacists, which led to a
material reduction in profitability in 2017 and 2018. We have
been assuming, however, that Phoenix will progressively recover
thanks to other product sales, such as parapharmaceuticals and
cosmetics, as well as a favorable product mix. We now believe
recovery might be less pronounced, given continuing funding
pressure on the NHS and disposable incomes in the U.K."

In Germany, profitability has improved over fiscal year 2018,
sustained by increased demand, improved purchasing conditions,
and cost-efficiency measures. Nevertheless, the German market
remains very competitive and S&P believes that any further gains
will be limited. In France, the group's operations are smaller in
scale, but still negatively weigh on overall profitability, owing
to pricing pressure and limited scale.

S&P said, "We continue to believe that Phoenix's operations in
Eastern Europe and in the Netherlands should drive top-line
growth. In particular, the lifting of partial restrictions on
pharmaceutical wholesale trade in the Netherlands will support
business there.

"We anticipate reported EBITDA before lease adjustments of about
EUR445 million in fiscal 2019, a slight decrease on fiscal 2018
because of restructuring costs. We expect this will improve to
EUR470 million-EUR480 million in fiscal 2020, thanks to the full-
year impact of the Romanian acquisition, reduction in
restructuring costs, and the positive impact of cost-saving
initiatives. However, based on our estimates, the company would
need to deliver EBITDA of EUR490 million-EUR500 million to
maintain adjusted leverage below 4x, assuming unchanged debt
levels. Our main adjustment to EBITDA consists of EUR116 million
of operating leases.

"We project adjusted debt of about EUR2,350 million by the end of
fiscal 2019. We assume EUR1,600 billion of reported debt, about
EUR200 million of trade receivables sold, EUR452 million of
operating lease adjustment, and EUR157 million of pension
adjustment. We deduct EUR60 million of cash that we assume will
be on balance sheet.

"We assume operating cash flow of about EUR320 million-EUR330
million will be used to cover working capital of about EUR150
million-EUR100 million and capital expenditure (capex) of about
EUR200 million in fiscal 2019 and 2020. We note that the industry
remains highly capital intensive, and given the need to improve
service levels, it will be difficult to reduce the level of
inventories. As of half-year fiscal 2019, the working capital
outflow was EUR268 million. We believe this reflects some
seasonality and we assume a reduction. However, this would still
pressure the free operating cash flow (FOCF)."

Phoenix's funding is structured to cover working capital peaks.
The company's funding structure primarily consists of EUR1.25
billion of revolving credit facility (RCF) due 2022, and asset-
backed security (ABS) or factoring lines of about EUR800 million,
contracted with several banks and with maturity varying between
12 and 24 months. The management structures the programs in a way
that they maximize usage, therefore avoiding commitment fees on
the unused portion, and trying to use the maximum available
average trade receivables.

S&P said, "We expect the company will make progress during fiscal
2019 regarding refinancing of its EUR300 million bond due in May
2020. PHOENIX also has another bond of EUR200 million maturing in
July 2021.

"Our negative outlook on Phoenix reflects our view of a one-in-
three chance of a downgrade over the next 12 months if the
company fails to generate sufficient EBITDA and FOCF to enable it
to reduce S&P Global Ratings-adjusted leverage to comfortably
below 4x.

"We believe that recent regulatory changes and persistent
competition could hamper the company's ability to significantly
improve profitability, despite efficiency measures taken by the
management. This would result in slower deleveraging than
originally envisaged, with adjusted debt to EBITDA remaining over
4x. Furthermore, a large working capital outflow could put
pressure on the FOCF.

"We could lower the rating if Phoenix failed to increase
profitability and FOCF to the extent that it could reduce
leverage comfortably to below 4x in 2020. We could also downgrade
the ratings in the case of negative FOCF due to a large working
capital requirement.

"We could revise the outlook to stable if the company achieved a
positive operating performance, leading to a material increase in
EBITDA such that financial leverage remained comfortably below
4x, while improving its working capital management on a sustained
basis, resulting into positive FOCF."

This scenario would most likely materialize because of successful
integration of the recently acquired Romanian retail business,
costs savings initiatives, and an improving competitive and
regulatory environment.


SC GERMANY 2018-1: S&P Assigns BB Rating to Cl. D-Dfrd Notes
------------------------------------------------------------
S&P Global Ratings assigned its credit ratings to SC Germany
Consumer 2018-1 UG (haftungsbeschraenkt)'s class A, B-Dfrd, C-
Dfrd, and D-Dfrd notes. At closing, SC Germany Consumer 2018-1
also issued unrated class E-Dfrd and F-Dfrd notes.

The securitized portfolio comprises receivables from consumer
loans, which Santander Consumer Bank AG granted to its German
retail client base. This is Santander Consumer Bank's 10th true
sale consumer loan transaction.

During the transaction's revolving period, the issuer can
purchase additional loan receivables. The revolving period is
scheduled to last for 12 months, followed by sequential note
amortization. The available credit enhancement consists of
structural subordination for all of the rated classes of notes,
and of excess spread (for the class A notes only).

Santander Consumer Bank is an indirect subsidiary of Spanish
Banco Santander S.A. It is the largest noncaptive provider of
auto loans in Germany and is also a well-known originator in the
European securitization market.

S&P said, "Our ratings on the rated classes of notes reflect our
assessment of the underlying asset pool's credit and cash flow
characteristics, as well as our analysis of the transaction's
exposure to counterparty and operational risks. Our analysis
indicates that the available credit enhancement for the class A,
B-Dfrd, C-Dfrd, and D-Dfrd notes would be sufficient to absorb
credit and cash flow losses in 'AA-', 'A', 'BBB', and 'BB' rating
scenarios, respectively."

There is no back-up servicer in place at closing. The combination
of a borrower notification process, a liquidity reserve, a
commingling reserve, and the general availability of substitute
servicers will mitigate servicer disruption risk.

RATING RATIONALE

Economic Outlook

S&P said, "In our base-case scenario, we forecast that Germany
will record GDP growth of 1.8% in 2018, 1.7% in 2019, and 1.5% in
2020. At the same time, we expect unemployment rates to stabilize
at historically low levels, at 3.3% in 2018, 3.0% in 2019, and
2.8% in 2020. In our view, changes in GDP growth and the
unemployment rate are key determinants of 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."
Credit Risk

S&P said, "We have analyzed credit risk under our European
consumer finance criteria using historical loss data from the
originator's loan book since January 2004 until June 2018.
Considering our economic outlook for Germany and our view on the
originator's good servicing procedures, we have lowered our base-
case gross loss expectation on the underlying pool to 6.0%,
compared with 6.5% in the predecessor transaction, SC Germany
Consumer 2017-1 (haftungsbeschrankt). We kept our gross loss
multiple, base-case recovery rate, and recovery haircuts in line
with the previous transaction."

Payment Structure

S&P said, "Our ratings reflect our assessment of the
transaction's payment structure, cash flow mechanics, and the
results of our cash flow analysis to assess whether the notes
would be repaid under stress test scenarios. Compared to SC
Germany Consumer 2017-1, this transaction features split interest
and principal waterfalls. Principal collections can be used to
cover interest shortfalls on the most senior outstanding class of
notes. Taking into account subordination and the available excess
spread in the transaction, we consider the available credit
enhancement for the rated notes to be commensurate with the
ratings that we have assigned.

"The class B-Dfrd to D-Dfrd notes are deferrable-interest notes
and we have treated them as such in our analysis. Under the
transaction documents, the issuer can defer interest payments on
these notes. Consequently, any deferral of interest on the class
B-Dfrd to D-Dfrd notes would not constitute an event of default.
While our  'AA- (sf)' rating on the class A notes addresses the
timely payment of interest and the ultimate payment of principal,
our ratings on the class B-Dfrd to D-Dfrd notes address the
ultimate payment of principal and the ultimate payment of
interest. Furthermore, we note that there is no compensation
mechanism that would accrue interest on deferred interest in this
transaction."

Counterparty Risk

The transaction's documented replacement language is in line with
S&P's current counterparty criteria for all of the relevant
counterparties. The transaction is exposed to HSBC Bank PLC as
transaction account provider, and to Santander Consumer Bank as
commingling and setoff reserve provider.

Operational risk

Santander Consumer Bank is an indirect subsidiary of Banco
Santander. It is one of the largest German consumer banks, and
Germany's largest non-captive car finance bank. It is also a
well-known originator in the European securitization market. S&P
said, "We believe that the company's origination, underwriting,
servicing, and risk management policies and procedures are in
line with market standards and adequate to support the ratings
assigned. Our operational risk criteria focuses on key
transaction parties (KTPs) and the potential effect of a
disruption in the KTPs' services on the issuer's cash flows, as
well as the ease with which a KTP could be replaced if needed. In
this transaction, the servicer is the only KTP we have assessed
under this framework. Our operational risk criteria do not
constrain our ratings in this transaction based on our view of
the servicer's capabilities."

Legal Risk

S&P said, "The transaction may be exposed to deposit setoff and
commingling risks, in our opinion. If it becomes ineligible as a
counterparty, Santander Consumer Bank will fund the setoff and
commingling reserves, which will mitigate these risks. A reserve
will partially mitigate commingling risk and we have sized the
unmitigated exposure as an additional credit loss. We have
analyzed legal risk, including the special-purpose entity's
bankruptcy remoteness, under our legal criteria."

Ratings Stability

S&P said, "In line with our scenario analysis approach, we have
run two scenarios to test the stability of the assigned ratings.
The results show that under the scenario modeling moderate stress
conditions, the rating on the notes would not suffer more than
the maximum projected deterioration that we would associate with
each rating level in the one-year horizon, as contemplated in our
credit stability criteria."

Sovereign Risk

Considering the current unsolicited 'AAA' long-term foreign
currency sovereign rating on Germany, S&P's structured finance
ratings above the sovereign (RAS) criteria do constrain its
ratings in this transaction.

  RATINGS ASSIGNED

  SC Germany Consumer 2018-1 UG (haftungsbeschraenkt)

  Class        Rating      Amount (mil. EUR)
  A            AA- (sf)            1,304.0
  B-Dfrd       A (sf)                 68.0
  C-Dfrd       BBB (sf)               60.0
  D-Dfrd       BB (sf)                20.0
  E-Dfrd       NR                    122.0
  F-Dfrd       NR                     26.0

  NR--Not rated.


TAKKO FASHION: S&P Lowers Long-Term ICR to 'B-', Outlook Stable
---------------------------------------------------------------
S&P Global Ratings lowered to 'B-' from 'B' its long-term issuer
credit rating on Germany-based apparel retailer Takko Fashion
S.a.r.l. (Takko).

S&P said, "At the same time, we lowered the rating on the EUR510
million senior secured notes issued by Luxembourg-based Takko
Luxembourg 2 S.C.A. to 'B-' from 'B'. The notes comprise a EUR285
million fixed-rate tranche and a EUR225 million floating-rate
tranche. The recovery rating on the notes remains at '3',
reflecting our expectation of meaningful recovery (50%-70%;
rounded estimate: 55%) in the event of a payment default."

The downgrade follows Takko's recently reported third-quarter
results for fiscal 2019 (year ending Jan. 31, 2019), marking a
continued deterioration in revenues, profitability, and free
operating cash flow (FOCF). Quarterly sales dropped by 6% to
EUR282 million and reported EBITDA by 5.2% to EUR40 million,
resulting in an 18% reported year-to-date EBITDA fall, to EUR105
million and last-12-month EBITDA of EUR125 million.

S&P said, "The downgrade reflects primarily our view that the
group's liquidity cushion is rapidly eroding. As a result of
sustained expansionary capital expenditure (capex), with about
60-70 net new store openings this year (54 net new openings in
the last 12 months), a significant working capital increase due
to high inventory levels, and a material increase in income tax
payment, FOCF is now much lower than we initially anticipated.
The group's reported FOCF before financing costs is about EUR11
million and turns negative if we incorporate interest paid to
date of EUR20 million. This suggests fiscal year-end 2019 FOCF
will be significantly lower than the EUR10 million-EUR15 million
after cash interest paid we had anticipated in our previous base
case of October 2018.

"Secondly, after three consecutive quarters of declining
profitability, the group's 12.4% covenant headroom remains tight
against its EUR110 million absolute EBITDA covenant. As the
fourth quarter is less EBITDA generative, we believe year-end
headroom under the covenant is not likely to improve.

"Lastly, we expect credit metrics to remain high over the next 12
months, with S&P Global Ratings-adjusted debt to EBITDA of about
7.7x-8.0x at fiscal year-end 2019 and 2020, broadly in line with
our previous forecast. We calculate that the group's S&P Global
Ratings-adjusted EBITDA margin will remain at about 22.5%-23.0%,
still meaningfully lower than the 24.4% reported in fiscal 2018,
in spite of the group's effort to improve gross margin. Given the
inherent seasonality of the business, the fourth quarter and
first quarter of the fiscal year contribute less to sales and
EBITDA and could therefore only partially mitigate the scale of
the underperformance in the second and third quarters. That said,
our base case assumes like-for-like trends will resume in fiscal
2020, in line with the market, and if not, we expect Takko to
scale back capex for fiscal 2020, thereby mitigating the impact
on FOCF.

"We note the group's performance is very close to that of the
overall lower price segment of the TextilWirtschaft index but
still suffered a more pronounced fall than the overall market,
which was equally negatively oriented. This is in line with our
view that Takko's like-for-like trends are globally more
pronounced than that of the overall German apparel market, since
the lower price segment of the market is inherently more
sensitive to adverse weather conditions and more demand-driven.
Customers go to these stores primarily out of necessity, while
other apparel retailers traditionally incorporate more fashion
content into their offering and rely more on high street
locations to stimulate traffic in stores. This results in
volatility in earnings for the discount segment that can vary
materially from one year to the other.

"This, combined with what we perceive as more intense
competition, materially affected the group's growth trends in the
second and third quarters of the year, a trend we expect to
continue. On the one side, some players in the fast fashion space
such as H&M or Primark are looking to increase market shares
through a more aggressive pricing strategy and/or a stronger
online presence likely to attract price sensitive and
convenience-led consumers. On the other, we believe the negative
weather conditions in the first half of the year will lead to a
generally promotional environment, as apparel retailers will try
to limit inventory levels through aggressive discounts. We
understand however that, to date, Takko has not been losing
market shares to competitors on its subsegment."

The adverse market conditions have not altered Takko's current
expansion plan, which has weighed on both working capital,
explaining part of the total working capital outflow of EUR34
million year to date, and capex, more than doubling to EUR20
million. This corresponds to the group's national and
international expansion strategy. The 60 to 70 net openings
anticipated for fiscal 2019 will help to boost traffic levels and
sales in the medium term, but weigh on the margin in the short
term, in particular in an unfavorable business environment for
discount retailers. Combined with weakening profitability, this
has resulted in negative FOCF, net of cash interests. S&P said,
"While our rating assessment initially incorporated some degree
of volatility in earnings and cash flow, we took comfort from the
past three years' track record of strong FOCF. Although the group
could have some flexibility in terms of FOCF management for
fiscal 2020, by adjusting expansionary capex, this year's
volatility in cash suggests the group's exposure to market swings
is higher than we had anticipated. In particular, in our view,
the recent working capital variations are not only a reflection
of the group's expansion plan but also indicate slower inventory
turnover."

S&P said, "Offsetting these pressures, we believe the new stores
will translate into a greater growth potential when and if the
market recovers. We also note that Takko's adjusted margins, in
the 22%-23% range, are high in comparison with other apparel
value retailers, even taking into account the recent dip in
profitability. Lastly, we also note the group's S&P Global
Ratings-adjusted debt to EBITDA excluding the payment-in-kind
(PIK) instrument (preferred equity certificates) remains below
5x."

Takko is a Germany-based value apparel retailer, targeting mid to
lower income families. It generated sales of about EUR1.1 billion
in fiscal 2018, with a company reported EBITDA of EUR148 million,
corresponding to S&P Global Ratings-adjusted EBITDA of EUR272
million and with S&P Global Ratings-adjusted FOCF of EUR44
million (post cash interest). Its product offer includes
womenswear, menswear, and kids wear. The group also benefits from
a growing international footprint with revenues outside Germany
now accounting for about 35%-40% of sales.

S&P said, "The stable outlook reflects our expectation of
moderate deleveraging and recovering FOCF over the next 12
months. These modest improvements should stem from higher
operating earnings and improving working capital management. This
will result in adjusted debt to EBITDA of about 7.0x (and 4.7x
excluding preferred equity certificates) and EBITDAR interest
plus rent cover of around 1.4x.

"We could take a negative rating action if Takko fails to
neutralize FOCF generation from the approximately negative EUR10
million-EUR15 million reported we expect in fiscal 2019, on the
back of a continued decrease in earnings, combined with still
high capex, and a further working capital increase, resulting in
a depleting cash position and weakening liquidity.

"Rating pressure will also arise if we observe that Takko's
capital structure becomes unsustainable because of further
tightening under the group's EUR110 million EBITDA covenant or
EBITDA interest plus rent coverage falling below 1.2x.

"In the event Takko were to buy back material amounts of its debt
at below-par prices, we would likely consider the transaction as
a distressed exchange and could lower the rating by more than one
notch. However, we understand that this is not management's
intention."

S&P views the potential for a positive rating action as remote in
the near term because of the group's high volatility in earnings
that could result in a rapidly diminishing liquidity cushion.
However, S&P could take a positive rating action if it sees
sustained improvement in earnings and financial metrics,
translating into reported FOCF turning meaningfully positive. A
positive rating action would also hinge on a reduction in
adjusted debt to EBITDA to below 7.0x (equivalent to 4.0x
excluding preference shares) and with a sustained EBITDAR
coverage ratio of at least 1.6x. Ratings upside would also
require continued commitment from the financial sponsors to
maintain a financial policy supportive of improved credit metrics
as well as at least adequate liquidity.


TUI AG: Moody's Affirms Ba2 Corp. Family Rating, Outlook Pos.
-------------------------------------------------------------
Moody's Investors Service has affirmed the Ba2 corporate family
rating, the Ba2-PD probability of default rating and the Ba2
senior unsecured rating of the world's leading tourism company
TUI AG. Concurrently, TUI's rating outlook remains positive.

"Our decision to affirm TUI's rating and maintain its outlook
reflects our view that the group's business model demonstrated
resilience to external shocks and structural challenges in fiscal
2018. Despite double-digit earnings decline in the group's tour
operator business, which was affected by the prolonged heatwave
last summer as well as airline disruption, TUI was able to show
solid operating results at the group level thanks to high
earnings growth in Hotel & Resorts, Cruises as well as in
Destination Experiences," says Vitali Morgovski, a Moody's
Assistant Vice President-Analyst and lead analyst for TUI.

Moody's believes that in addition to the extraordinary weather
conditions, the tour operator business is increasingly
structurally challenged by online travel agencies (OTAs),
combining hotel and flight offerings, as well as airline
operators providing hotel accommodations as add-on to their
flights. However, TUI continues to adapt its business model away
from a classic tour operator to an integrated provider of holiday
experiences. The market outlook for 2019 is challenging, but
Moody's expects that TUI will continue to improve its credit
metrics even though this will likely require more time than
initially anticipated when the positive rating outlook has been
assigned in February 2018.

RATINGS RATIONALE

TUI's underlying EBITA continued to develop strongly in fiscal
2018, showing a double-digit percentage growth for the fourth
consecutive year. This was again driven by solid performance in
the group's high margin segments -- Hotels & Resorts (up 19%) and
Cruises (up 27%) -- and despite weakness in the tour operator
business, which was down 14% on the underlying EBITA basis.
However, Moody's adjusted EBITDA remained broadly stable in
fiscal 2018, as unlike company's definition of underlying EBITA
it excludes at equity consolidated joint ventures (JVs) such as
TUI Cruises, where performance was especially strong (underlying
EBITA up 33%). Furthermore, adverse FX effects and some increase
in exceptional items, mostly arising from additional costs of
airline disruptions and Niki bankruptcy as well as the gain on
Riu disposals, held back Moody's adjusted EBITDA.

Moody's adjusted credit metrics softened somewhat during the last
fiscal year driven by an increase in gross debt that covered a
negative free cash flow generation due to the high level of
investments. This was witnessed for example by an increase of
Moody's adjusted gross debt/ EBITDA ratio to 3.7x from 3.5x a
year ago. However, investments were partly pre-funded by earlier
asset disposals totaling EUR2 billion that TUI is gradually
reinvesting into the business over the 2017-19 period. Excluding
extra capex Moody's expects TUI's free cash flow generation
(Moody's adjusted) to be positive.

Moody's definition of EBITDA excludes any contribution from JVs,
though TUI has a track-record of receiving a growing amount of
regular cash dividends from its JVs. If included, Moody's
adjusted gross leverage ratio remained broadly stable in 2018.

IFRS16 adoption for fiscal years starting in October 2019 onwards
can potentially strengthen Moody's adjusted credit metrics by
reducing adjustments currently applied for operating leases. More
public disclosures on this topic during 2019 would allow Moody's
to fine-tune its expectations and to include the impact more
implicitly into the rating.

The rating agency acknowledged positively TUI's guidance for the
fiscal 2019, which foresees a further growth of around 3% in
sales and at least 10% growth in underlying EBITA, both at
constant currencies. However, the outlook for 2019 is
characterized by a number of market headwinds ranging from an
intensified competition in the tour operator segment coming from
dynamic packaging by OTAs and Airlines; continued cost pressure
(fuel, hotel rates etc.), capacity shift from Western to Eastern
Mediterranean and the uncertainty in regards to the final outcome
of Brexit negotiations and their impact on consumer confidence
and behavior. In case any of those headwinds would prevent the
company from reaching its guidance, its rating outlook could be
stabilized or even a negative rating action could follow.

Moody's views TUI's liquidity as solid. This is underpinned by
EUR2.5 billion of cash on the balance sheet at the end of
September 2018 (unchanged compared to September 2017), of which
around EUR0.2 billion were subject to restrictions, as well as
EUR1.75 billion syndicated revolving credit facility (RCF)
maturing in 2022, which allows for EUR1,535 million cash
drawings. Cash RCF remained fully undrawn at the fiscal year-end
2018. The available liquidity is sufficient to meet TUI's high
seasonal working capital needs during the first fiscal quarter
that Moody's does not expect to exceed EUR1.5 billion.

RATIONALE FOR POSITIVE OUTLOOK

The positive outlook reflects Moody's view that TUI's operating
performance will remain largely resilient to external shocks and
structural challenges due to rising penetration of online
competitors. The outlook also assumes that the company can
deliver on its guidance of at least 10% growth in underlying
EBITA and its free cash flow generation would be positive, in
case extra capex pre-funded by earlier disposals is excluded.
Furthermore, TUI continues to have a solid liquidity position in
order to manage effectively the high seasonality of its working
capital.

WHAT COULD CHANGE THE RATING UP/DOWN

Moody's would consider upgrading TUI's rating if the company were
to demonstrate further resilience of its business model to
external shocks and to continue the adaption of its business
model to structural challenges. Quantitatively, positive pressure
could arise if the group's gross leverage ratio (Moody's
adjusted) were to fall below 3.5x and the retained cash flow/ net
debt (Moody's adjusted) to remain above 25% throughout the
seasonal swings of the year. The group is expected to retain a
good liquidity profile to address the high seasonal cash swings
during the year.

The rating could be under negative pressure should TUI not be
able to fully offset any additional external shocks that might
occur or shows a lack of ability to offset structural challenges.
Quantitatively, the rating could be lowered if the leverage ratio
(Moody's adjusted) were to increase above 4.5x and the retained
cash flow/ net debt (Moody's adjusted) were to fall below 15%, or
if the group's liquidity profile were to deteriorate materially.

PROFILE

TUI AG, headquartered in Hanover, Germany, is the world's largest
integrated tourism group. In the fiscal year to September 2018,
the group reported revenues and underlying EBITA of EUR19.5
billion and EUR1.1 billion, respectively. TUI is listed on the
Frankfurt and London Stock Exchanges with a current market
capitalisation of EUR7.5 billion.



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G R E E C E
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NAVIOS MARITIME: Moody's Raises CFR to B2, Outlook Stable
---------------------------------------------------------
Moody's Investors Service upgraded the corporate family rating of
Navios Maritime Holdings Inc. to B2 from B3 and the probability
of default rating to B2-PD from B3-PD. Moody's simultaneously
upgraded the rating of Navios Holdings' $650 million senior
secured ship mortgage notes due 2022 to B1 from B2. Further,
Moody's upgraded the rating of the $305 million senior secured
notes due 2022 to Caa1 from Caa2. The outlook is stable.

"This rating action reflects the positive momentum in the dry
bulk market notwithstanding the recent volatility, in addition to
Navios Holdings' efforts to extend the average maturity of its
charters," says Maria Maslovsky, a Moody's Vice President and
lead analyst for Navios Holdings.

RATINGS RATIONALE

The upgrade is driven by the ongoing improvement in the dry bulk
market albeit with some recent volatility in November 2018. The
average charter rate for capesize vessels, the market benchmark,
increased to $19,300 in the first eleven months of 2018 as
compared to $15,000 in 2017, an increase of over 28%, according
to Drewry Maritime Research, a shipping industry research and
advisory group. Also, as the market strengthened, Navios Holdings
has been making efforts to extend its average charter length and
as of November 16, 2018, 51 out of its 70 vessels were on
charters of less than twelve months. In addition, Navios Holdings
signed 28 indexed charters that can be converted to fixed rate at
the company's option; Moody's views this structure as a benefit
for Navios allowing the company to capture the upside in a
growing market and lock in the gains.

Navios Holdings rating continues to reflect (1) the company's
large and diverse dry bulk fleet that is 16% younger than the
industry average; (2) some indirect diversification in a
logistics business through Navios South American Logistics (NSAL)
and stakes in various affiliated companies present in the
drybulk, tanker and container shipping segments; (3) efficient
operations as a result of the economies of scale owing to the
overall size of the Navios Group incorporating over 200 vessels;
(4) experienced management team; (6) reduced leverage expected to
decline toward 7x by year-end 2018 and below 6x in the next 12-18
months from 9.4x in 2017 owing to increased EBITDA as a result of
time charter rate growth; (7) improved liquidity owing to
expected positive cash flow.

The Baltic Dry Index (BDI), which is a widely used proxy for dry
bulk rates, has been very volatile recently dropping to
approximately 1,000 points in November and subsequently
recovering close to 1,400 points in December 2018. According to
the December 6, 2018 Drewry report, the time charter rates
improved in 2019 with Capesize rates averaging $19,300/day for
the first eleven months of the year compared to $15,000 in 2017.
Moody's expects further improvement of the rates into 2019
although the dry bulk order book has grown to 10.0% in November
2018 from a historically low level of 7.9% of fleet in May 2017,
according to Drewry. The US/China trade tensions pose a potential
downside risk for the dry bulk market but Moody's expects that
any demand dislocation would be recouped by moving ships and
trade routes in a fairly short time frame. Higher charter rates
will support Navios Holdings' dry bulk business, and Moody's
expects the company's performance in 2019 to improve such that it
generates positive free cash flow.

Navios Holdings' liquidity is adequate. It is comprised of its
September 30, 2018 cash balance of $133 million and S&P's
expected FFO of $58 million in 2018. In the third quarter of
2018, Navios Holdings bought back $35.7 million in par value of
its 7.375% First Priority Ship Mortgage Notes due 2022 for $28.8
million. The company's alternative liquidity sources are
dependent on the equity prices of its subsidiaries, as most of
the dry bulk ships are encumbered already.

The B1 rating on Navios Holdings' ship mortgage notes due 2022 is
one notch above the corporate family rating of B2 reflecting the
collateral for the notes consisting of 22 dry bulk vessels. The
Caa1 rating assigned to the senior secured notes due 2022 is
notched down from Navios Holdings' corporate family rating to
reflect the notes' junior-most ranking behind significant bank
debt and ship mortgage notes.

The stable rating outlook reflects Moody's expectation that the
company's leverage will be sustained below 6x debt/EBITDA in the
next 12-18 months and that the company will generate positive
free cash flow as well as maintain an adequate liquidity profile.

Positive rating pressure would be likely if Navios Holdings
charters the majority of its fleet on a longer term basis at
fixed rates such that its leverage is sustained below 4x
debt/EBITDA while maintaining positive free cash flow and
adequate liquidity.

Negative rating pressure could result from a downturn in the dry
bulk market or a deterioration in the financial performance or
value of its investment holdings such that Navios Holdings'
leverage increases and is sustained beyond 6.5x debt/EBITDA. Any
liquidity challenges would also be a concern.

Navios Holdings is a global vertically integrated seaborne
shipping and logistics company focused on the transport and
transshipment of dry-bulk commodities, including iron ore, coal
and grain, as well as investments in other related shipping
companies in the drybulk, container and tanker segments. In 2017,
Navios Holdings generated revenues of $463 million and adjusted
EBITDA of $127 million as reported by the company.



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I R E L A N D
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PROVIDUS CLO II: Fitch Assigns B-sf Rating to Class F Debt
----------------------------------------------------------
Fitch Ratings has assigned Providus CLO II DAC final ratings, as
follows:

Class A: 'AAAsf'; Outlook Stable

Class B-1: 'AAsf'; Outlook Stable

Class B-2: 'AAsf'; Outlook Stable

Class C: 'Asf'; Outlook Stable

Class D: 'BBB-sf'; Outlook Stable

Class E: 'BB-sf'; Outlook Stable

Class F: 'B-sf'; Outlook Stable

Subordinated notes: 'NRsf'

Providus CLO II DAC is a cash flow collateralised loan obligation
(CLO). Net proceeds from the issuance of the notes are being used
to purchase a portfolio of EUR350 million of mostly European
leveraged loans and bonds. The portfolio is actively managed by
Permira Debt Managers Group Holdings Limited. The CLO envisages a
four-year reinvestment period and an 8.5-year weighted average
life (WAL).

KEY RATING DRIVERS

B' Portfolio Credit Quality

Fitch places the average credit quality of obligors in the 'B'
range. The Fitch-weighted average rating factor of the current
portfolio is 32.1.

High Recovery Expectations

At least 90% of the portfolio will comprise senior secured
obligations. Fitch views the recovery prospects for these assets
as more favourable than for second-lien, unsecured and mezzanine
assets. The Fitch-weighted average recovery rate of the current
portfolio is 68.7%.

Diversified Asset Portfolio

The transaction includes four Fitch matrices that the manager may
choose from, corresponding to the top 10 obligors limited at 16%
and 26%, and with fixed-rate assets limited at 0% and 10%. The
manager is allowed to interpolate between these matrices. The
transaction also includes limits on maximum industry exposure
based on Fitch's industry definitions. The maximum exposure to
the three-largest (Fitch-defined) industries in the portfolio is
covenanted at 40%. These covenants ensure that the asset
portfolio will not be exposed to excessive concentration.

Portfolio Management

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

Cash Flow Analysis

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

RATING SENSITIVITIES

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

DATA ADEQUACY

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

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


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

EUR193,700,000 Class A Commercial Mortgage Backed Floating Rate
Notes due February 2029, Definitive Rating Assigned Aaa (sf)

EUR62,700,000 Class B Commercial Mortgage Backed Floating Rate
Notes due February 2029, Definitive Rating Assigned Aa3 (sf)

EUR45,100,000 Class C Commercial Mortgage Backed Floating Rate
Notes due February 2029, Definitive Rating Assigned A3 (sf)

EUR80,700,000 Class D Commercial Mortgage Backed Floating Rate
Notes due February 2029, Definitive Rating Assigned Baa3 (sf)

EUR79,500,000 Class E Commercial Mortgage Backed Floating Rate
Notes due February 2029, Definitive Rating Assigned Ba2 (sf)

EUR13,300,000 Class F Commercial Mortgage Backed Floating Rate
Notes due February 2029, Definitive Rating Assigned B1 (sf)

Moody's has not assigned a rating 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.

RATINGS RATIONALE

The rating action is 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 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:

Main factors or circumstances that could lead to an downgrade of
the ratings are (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.

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.



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


DRYDEN 66: Moody's Rates EUR10.5MM Class F Notes 'B2'
-----------------------------------------------------
Moody's Investors Service announced that it has assigned the
following definitive ratings to notes issued by Dryden 66 EURO
CLO 2018 B.V.:

EUR238,000,000 Class A Senior Secured Floating Rate Notes due
2032, Definitive Rating Assigned Aaa (sf)

EUR12,400,000 Class B-1 Senior Secured Floating Rate Notes due
2032, Definitive Rating Assigned Aa2 (sf)

EUR31,600,000 Class B-2 Senior Secured Fixed Rate Notes due 2032,
Definitive Rating Assigned Aa2 (sf)

EUR27,000,000 Class C Mezzanine Secured Deferrable Floating Rate
Notes due 2032, Definitive Rating Assigned A2 (sf)

EUR25,000,000 Class D Mezzanine Secured Deferrable Floating Rate
Notes due 2032, Definitive Rating Assigned Baa3 (sf)

EUR23,500,000 Class E Mezzanine Secured Deferrable Floating Rate
Notes due 2032, Definitive Rating Assigned Ba3 (sf)

EUR10,500,000 Class F Mezzanine Secured Deferrable Floating Rate
Notes due 2032, Definitive Rating Assigned B2 (sf)

RATINGS RATIONALE

Moody's definitive rating of the rated notes addresses the
expected loss posed to noteholders by legal final maturity of the
notes in 2032. The definitive ratings reflect the risks due to
defaults on the underlying portfolio of loans given the
characteristics and eligibility criteria of the constituent
assets, the relevant portfolio tests and covenants as well as the
transaction's capital and legal structure. Furthermore, Moody's
is of the opinion that the collateral manager, PGIM Limited, has
sufficient experience and operational capacity and is capable of
managing this CLO.

Dryden 66 is a managed cash flow CLO. At least 92.5% of the
portfolio must consist of senior secured loans and senior secured
bonds and up to 7.5% of the portfolio may consist of unsecured
senior loans, second-lien loans, mezzanine obligations and high
yield bonds. The portfolio is expected to be at least 80% ramped
up as of the closing date and to be comprised predominantly of
corporate loans to obligors domiciled in Western Europe.

PGIM Limited will manage the CLO. It will direct the selection,
acquisition and disposition of collateral on behalf of the Issuer
and may engage in trading activity, including discretionary
trading, during the transaction's 4.5 years reinvestment period.
Thereafter, purchases are permitted using principal proceeds from
unscheduled principal payments and proceeds from sales of credit
risk, and are subject to certain restrictions.

In addition to the seven classes of notes rated by Moody's, the
Issuer will issue EUR 43,000,000 of subordinated notes which will
not be rated.

The transaction incorporates interest and par coverage tests
which, if triggered, divert interest and principal proceeds to
pay down the notes in order of seniority.

Methodology Underlying the Rating Action:

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

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

The rated notes' performance is subject to uncertainty. The
notes' performance is sensitive to the performance of the
underlying portfolio, which in turn depends on economic and
credit conditions that may change. PGIM Limited's investment
decisions and management of the transaction will also affect the
notes' performance.

Moody's modeled the transaction using CDOEdge, a cash flow model
based on the Binomial Expansion Technique, as described in
Section 2.3 of the "Moody's Global Approach to Rating
Collateralized Loan Obligations" rating methodology published in
August 2017.

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

Par amount: EUR 400,000,000

Diversity Score: 44

Weighted Average Rating Factor (WARF): 2,850

Weighted Average Spread (WAS): 3.60%

Weighted Average Recovery Rate (WARR): 41.5%

Weighted Average Life (WAL): 8.5 years

As part of the base case, Moody's has addressed the potential
exposure to obligors domiciled in countries with local currency
country risk ceiling (LCC) or foreign currency country risk
ceiling (FCC) of A1 or below. As per the portfolio constraints,
exposures to countries with an LCC or FCC of A1 or below cannot
exceed 10% and per the Eligibility Criteria obligors domiciled in
countries with an LCC or FCC below Baa1 is prohibited. As a worst
case scenario, a maximum 10% of the pool would be domiciled in
countries with an LCC or FCC of Baa1. The remainder of the pool
will be domiciled in countries which currently have an LCC or FCC
of Aa3 and above. Given this portfolio composition, the model was
run with different target par amounts depending on the target
rating of each class of notes as further described in the
methodology. The portfolio haircuts are a function of the
exposure size to countries with a LCC or FCC of A1 or below and
the target ratings of the rated notes and amount to 1.5% for the
Class A notes, 1.00% for the Class B-1 and Class B-2 notes, 0.75%
for the Class C notes and 0% for Classes D, E and F notes.


DRYDEN 66: Fitch Assigns B-sf Rating to Class F Debt
----------------------------------------------------
Fitch Ratings has assigned Dryden 66 Euro CLO 2018 B.V. final
ratings, as follows:

Class A: 'AAAsf'; Outlook Stable

Class B-1: 'AAsf'; Outlook Stable

Class B-2: 'AAsf'; Outlook Stable

Class C: 'Asf'; Outlook Stable

Class D: 'BBB-sf'; Outlook Stable

Class E: 'BB-sf'; Outlook Stable

Class F: 'B-sf'; Outlook Stable

Sub Notes: 'NRsf'

Dryden 66 Euro CLO 2018 B.V. is a cash flow collateralised loan
obligation (CLO). Net proceeds from the issuance of the notes are
being used to purchase a EUR400 million portfolio of mostly
European leveraged loans and bonds. The portfolio is actively
managed by PGIM Limited. The CLO envisages an approximately 4.5-
year reinvestment period and an 8.5-year weighted average life
(WAL).

KEY RATING DRIVERS

'B' Portfolio Credit Quality

Fitch places the average credit quality of obligors in the 'B'
range. The Fitch weighted average rating factor (WARF) of the
identified portfolio is 31.7.

High Recovery Expectations

At least 92.5% of the portfolio comprises senior secured
obligations. Fitch views the recovery prospects for these assets
as more favourable than for second-lien, unsecured and mezzanine
assets. The Fitch weighted average recovery rate (WARR) of the
identified portfolio is 62.67%.

Interest Rate Exposure Partially Hedged

Fixed-rate liabilities represent 7.9% of the target par, while
unhedged fixed-rate assets can represent up to 20% of the
portfolio. The transaction is therefore partially hedged against
rising interest rates.

Diversified Asset Portfolio

The transaction includes two Fitch matrices the manager may
choose from, corresponding to the top 10 obligors, limited at 15%
and 27.5%. The transaction also includes limits on maximum
industry exposure based on Fitch's industry definitions. The
maximum exposure to the largest three Fitch-defined industries in
the portfolio is covenanted at 40%.

Portfolio Management

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

Cash Flow Analysis

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

RATING SENSITIVITIES

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

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

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

DATA ADEQUACY

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

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



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


SATA AIR: Moody's Assigns Ba1 Rating to EUR65MM Unsecured Notes
---------------------------------------------------------------
Moody's Investors Service has assigned a Ba1 rating to the EUR65
million guaranteed unsecured notes due 2028 issued by SATA Air
Acores, S.A. The outlook is stable.

The assigned Ba1 rating is based solely upon the unconditional
and irrevocable guarantee of scheduled principal and interest
provided by the Autonomous Region of Azores (Ba1 stable).

SATA Air is one of six airlines owned by SATA, with headquarters
in Azores. SATA plays a major role in providing accessibility for
those who live on the islands.

RATINGS RATIONALE

The Ba1 rating assigned to SATA Air's EUR65 million Notes is in
line with long-term issuer rating of Azores, which provides an
unconditional and irrevocable guarantee of scheduled principal
and interest. The terms of the guarantee are sufficient for
credit substitution in accordance with Moody's credit
substitution methodology.

In particular, Moody's considers that the terms of the guarantee
have characteristics of strong guarantee arrangements:

  - the guarantee is irrevocable and unconditional and ensures
that obligations under the guarantee rank pari and passu with
Azores' present or future, direct, unconditional, unsecured and
unsubordinated obligations

  - the guarantee promises full and timely payment of the
obligation including interest and principal payments

  - the guarantee covers payment -- not merely collection

  - the guarantee extends as long as the term of the underlying
obligation will be reinstated and become effective again if
Noteholders have to return moneys after the date on which
guarantee has expired due to any insolvency proceeding or any
court proceeding

  - the guarantee is enforceable against the guarantor and also
in accordance with Portuguese law

  - the guarantee cannot be transferred, assigned or amended by
the guarantor

The guarantee does not explicitly state that it waives all
suretyship defenses, but there are provisions in the Deed of
Guarantee stating that the guarantor would pay all obligations in
full without any exception, reserve, condition or claim. All
payments to be made by the Guarantor under the guarantee shall
also be made without set off or counterclaim and without
deduction for or on account of any present or future taxes,
duties, withholdings or other charges.

WHAT COULD CHANGE THE RATING UP/DOWN

The guaranteed senior debt rating is fundamentally linked to the
rating of Azores. Any change in Azores' rating would be expected
to translate into a rating change on the Notes.



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


TATTELECOM PJSC: Fitch Affirms BB Long-Term IDR, Outlook Stable
---------------------------------------------------------------
Fitch Ratings has affirmed Russia-based PJSC Tattelecom's
(Tattel) Long-Term Issuer Default Rating (IDR) and senior
unsecured rating at 'BB' and Short-Term IDR at 'B'. The Outlook
on the Long-Term IDR is Stable.

Tattel is a regional fixed-line incumbent operator in the Russian
Republic of Tatarstan (BBB-/Positive) with leading or strong
market positions in traditional voice telephony, broadband and
pay-TV segments. The company's challenger mobile segment is
likely to be a key growth driver in the medium term, compensating
for a modest contraction of fixed-line services. Fitch expects
the company's funds from operations (FFO) adjusted net leverage
to remain moderate, at below 2x.

The ratings are constrained by the company's small size,
resulting in lower profitability and scale synergies versus peers
and limited access to capital markets.

KEY RATING DRIVERS

Strong Regional Incumbent: Fitch believes Tattel will be able to
sustain its strong regional positions supported by its dense
infrastructure coverage, full bundling capabilities, incumbent-
friendly regulation and a dedicated regional focus. The company
estimates its subscriber market shares at approximately 60% in
broadband, above 70% in traditional voice telephony and above 50%
in the pay-TV segment. Tattel's positions are stronger and more
defensive outside large cities benefiting from scarce
infrastructure coverage by alternative operators and lower
competition.

Local Strengths: The company's local focus makes Tattel a more
agile competitor than most of its larger federal peers, with
promotional activities tailored for even smaller communities,
enabling greater pricing and territorial segmentation
flexibility. In its view, Tattel is unlikely to face
infrastructure competition from Rostelecom (BBB-/Stable), the
national fixed-line telecoms incumbent. Rostelecom is a key
contractor under the bridging digital divide project for the
provision of broadband services in rural and sparsely populated
areas, which implies potential overlap with Tattel. However, so
far it has primarily relied on Tattel's network and is unlikely
to expand its own infrastructure coverage in Tatarstan.

Full Bundling Capabilities: After launching its mobile
operations, Tattel can offer a four-play bundled services package
to its customers which Fitch views as positive. Strategically,
the company is well-equipped to withstand the bundling
competition that is becoming more active in Tatarstan. Tattel
offers pay-TV through both IPTV and cable platforms, which gives
it a wider customer reach and is unmatched by peers.

Mobile Regulation Challenges: The 2018 cancellation of national
mobile roaming charges under a regulatory requirement puts Tattel
into a more challenging situation than its larger nationwide
mobile peers. Tattel will continue facing costs for customers
using mobile service including both data and voice outside its
network but it will no longer be able to fully charge for this.
Fitch believes potential roaming limitations may hinder its
market share gains, make its services less fit for corporate
customers, and will generally shape the company's profile as a
niche mobile operator. Tattel gained a 7.2% subscriber market
share in Tatarstan by end-2017, an increase of 2.8pp for the
year, but further progress may be more paced, in its view. The
company is targeting a 15% market share and more than one million
subscribers within three years, which Fitch sees as challenging.

Positive Revenue Growth: Fitch expects Tattel to maintain
positive low single digit revenue dynamics in the medium term,
supported by continuing mobile expansion and wider take-up of
pay-TV services but pressured by secular, close to double-digit
yoy percentage declines of traditional voice telephony. Broadband
is no longer a growth driver, with only modest subscriber
additions.

Modest Profitability Pressure: Tattelecom's profitability is
likely to come under modest pressure by its estimates, as
sluggish revenue growth will be outpaced by cost inflation, while
opportunities for additional cost-cutting are limited, including
due to the company's small size. Fitch expect the company's
EBITDA margin to be in the range of 26%-27% in the medium term.
The company cut its average headcount by 6% yoy. However, its
payroll expenses grew by 5.2% yoy in the fixed-line division in
2017. The mobile segment is still in the expansion phase, which
will also likely require additional expenses, including higher
inter-operator chargers for domestic roamers.

Robust Free Cash Flow: Fitch expects Tattel to maintain positive
pre-dividend free cash flow (FCF) generation in the low-to-mid
single digit territory in the medium term. Cash flow will be
supported by lower capex, which Fitch expects to sustainably
decline to 18%-19% of revenues in 2018-2021 from close to 30% in
2014-2015 on the completion of mobile network roll-out. Stronger
improvement in the cash flow generation is unlikely in view of
the company's tight EBITDA profitability.

Leverage Below 2x: Fitch projects that Tattel's FFO adjusted
leverage will remain below or at 2x in 2018-2020. Leverage may be
modestly pushed up by dividends, with the company's dividend
policy targeting to pay out 50% of the parent company's net
profit under Russian accounting standards (RAS). With the low-
margin mobile business operated through a separate subsidiary,
the parent company's net profits are likely to be inflated under
RAS compared with the group-wide IFRS approach.

Small Size Constraints: Fitch views Tattel's small size as a
strategic constraint, reducing its operational scale benefits,
making any large scale initiatives including potentially 5G
spectrum bidding and roll-out more challenging, and limiting its
funding options. Tattel has predominantly relied on bank
financing, where size is less of an issue while even the smallest
rouble bond issue would create substantial bullet refinancing
exposure on its balance sheet.

Weak Parental Support: Fitch views operational and strategic ties
between the company and its controlling shareholder, OJSC
Svyazinvestneftekhim (SINEK; BB+/Positive), as weak. Therefore
Tattel's rating primarily reflects the company's standalone
credit profile. However, it is likely that SINEK would provide
liquidity or lobbying support if necessary.

DERIVATION SUMMARY

Tattel's wireline market positions (including all of fixed-line
telephony, broadband and pay-TV) are strong in its territory of
operations and compare well with those of Rostelecom, the Russian
nationwide incumbent telecoms operator. However, Tattel is only a
regional mobile challenger with significantly lower market share
than any of Russian federal mobile operators, PJSC Mobile
Telesystems (BB+/Negative), PJSC MegaFon (BB+/Stable), VEON
Ltd(BB+/Positive) and LLC T2 RTK Holding (B+/Stable). It is
facing larger and better capitalised competitors. Tattel's lower
than its larger peers' ratings reflect its significantly lower
size, limited geographical franchise and constrained funding
options, mitigated by its moderate leverage.

KEY ASSUMPTIONS

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

  - Stable market positions in fixed-line segments with voice
    fixed-line revenues to decline by about 9% in 2018-2021

  - Mobile subscriber market share increases to about 12%-13% by
    2021 from 7.2% at end-2017

  - Low single digits to flat annual revenue growth in 2018-2021,
    with the mobile growth compensating for fixed-line pressures

  - EBITDA margin at about 26-27% in 2018-2021

  - Capex intensity at about 18-19% in 2018-2021

  - Dividend payments of around RUB400 million per year in 2018-
    2021.

RATING SENSITIVITIES

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

Rating upside is constrained by the company's small size, its
lack of geographical diversification, and limited access to
capital markets.

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

  - A rise in FFO adjusted net leverage to above 2.5x on a
    sustained basis.

  - Cash flow pressures driven by revenue and market share
    losses, particularly in the broadband and mobile segments.

  - Deterioration in liquidity or higher refinancing risk.

LIQUIDITY

Tattel has an adequate liquidity profile in the short-term with
RUB396 million of cash and cash equivalents supported by RUB200
million of overdraft facilities at end-October 2018, which is
sufficient to cover short-term debt redemptions. The company is
facing approximately RUB385 million of debt repayment in 2019,
all of which is amortising and evenly split between the quarters.

The company is more opportunistic in terms of managing its mid to
longer term refinancing exposure, with liquidity planning taking
into account expected cash flow generation and dividend timing
flexibility if necessary. Liquidity exposure is mitigated by a
potential support from the controlling shareholder as well as by
the company's flexibility to reduce capex and strong
relationships with local banks.

FULL LIST OF RATING ACTIONS

PJSC Tattelecom

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

  - Senior unsecured rating: affirmed 'BB'

  - Short-Term IDR: affirmed 'B'



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


ALMIRALL SA: Moody's Affirms Ba3 CFR, Outlook Stable
----------------------------------------------------
Moody's Investors Service has affirmed the Ba3 corporate family
rating and the Ba3-PD probability of default rating of Almirall,
S.A. The outlook is stable.

RATINGS RATIONALE

  -- AFFIRMATION OF Ba3 CFR

Almirall's Ba3 CFR continues to reflect (1) a moderate exposure
to generic competition; (2) Almirall's overall conservative
financial policies whereby its capital structure continues to
provide a degree of flexibility for investments in bolt-on
acquisitions; (3) a product portfolio that includes several
recently approved products, and which will drive sales growth for
the foreseeable future; and (4) a solid liquidity profile.

However, the rating also takes into account (1) Almirall's
overall small size compared to other rated pharmaceutical
companies; (2) its narrow product portfolio skewed towards
dermatology; (3) a continued high exposure to Europe, although
the acquisition of Allergan's assets will lead to a more balanced
geographic footprint; and (4) a degree of M&A related event risk
as Almirall may pursue larger acquisitions exceeding the
company's free cash flow generation.

For the first nine months of 2018, Almirall grew net sales by
6.1% against the prior year. Tight cost control contributed to an
improvement in gross margin and supported a strong free cash flow
of around EUR90 million during the period. Enhanced by new
product launches and full-year contribution from the product
portfolio acquired by Allergan, Moody's believes Almirall will
grow its EBITDA to around EUR270 million by year-end 2019. Absent
material external growth, Moody's expects Almirall's leverage --
defined as Moody's adjusted gross debt/ EBITDA -- to move towards
2.5x by end 2019.

  -- RATIONALE FOR THE STABLE OUTLOOK

The outlook is stable and reflects Moody's expectations that
Almirall will continue to strengthen its operating performance
over the next 12-18 months. While Moody's considers that there is
a degree of event risk related to M&A, the stable outlook also
reflects that an increase of debt -- if any -- will remain fairly
conservative, in line with the company's objective of a maximum
reported Net Debt/EBITDA ratio of 2.0x to 2.5x.

WHAT COULD CHANGE THE RATING UP/DOWN

At this stage, upward pressure on the ratings is constrained by
the risk that Almirall could consider larger acquisitions which
could leverage further its balance sheet. A positive rating
action could occur should Almirall return to growth and maintain
a leverage (gross Debt/EBITDA, including Moody's adjustments)
below 2.5x on a sustainable basis.

Conversely, negative pressure could develop should credit metrics
deteriorate so that gross Debt/EBITDA ratio would increase above
3.5x and/or the Cash Flow from Operations (CFO)/Debt ratio
declines below 20%, for a prolonged period of time. This could be
the result of a shift towards more aggressive financial policies
including debt financed M&A transactions.


ZINKIA ENTERTAINMENT: Makes Second Payment of Insolvency Debt
-------------------------------------------------------------
Reuters reports that Zinkia Entertainment SA said on Dec. 26 the
company made a second payment of amounts owed to creditors
included in ordinary insolvency debt.

Zinkia Entertainment SA is a Spanish audiovisual and video
production company.



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


INTERSTATE BANK: Fitch Affirms BB LT IDR, Outlook Positive
----------------------------------------------------------
Fitch Ratings has affirmed Interstate Bank's (IB) Long-Term
Issuer Default Rating (IDR) at 'BB' with a Positive Outlook.
Fitch has also assigned a Short-Term IDR of 'B'.

KEY RATING DRIVERS

Fitch rates IB as a supranational administrative body (SAB),
given its unique business model as a multilateral settlement
institution operating in the Commonwealth of Independent States
(CIS) and Eurasian Economic Union (EAEU). As is typically the
case with other supranationals rated under the SAB approach, IB's
ratings are support-driven and take into account the rating of
the key shareholder (Russia: BBB-/Positive). Fitch applies a two-
notch downward adjustment from Russia's rating to reflect its
assessment of the propensity of the key shareholder to provide
support. The Positive Outlook reflects that on Russia's Long-Term
IDR.

The bank's shareholders are nine CIS countries represented by the
central bank of member states: Armenia (B+; which owns 1.8% of
the bank's capital), Belarus (B; 8.4%), Kazakhstan (BBB; 6.1%),
Kyrgyz Republic (not rated; 1.5%), Moldova (not rated; 2.9%),
Russia (BBB-; 50%), Tajikistan (not rated; 1.6%), Turkmenistan
(not rated; 1.5%), and Ukraine (B-; 20.7%).

Headquartered in Moscow, IB also has representative offices in
Armenia, Belarus, and Kyrgyz Republic. The bank provides cash and
settlement services to its clients, both in national currencies
of CIS countries and in freely convertible currencies. Central
banks of member states, CIS/EAEU financial institutions and non-
financial entities place rouble deposits with IB, and instruct
the bank to process payments on their behalf. Retail clients also
have access to the bank's services through other financial
institutions, including remittance transfers to the CIS.

In line with its mandate, IB effects cross-border payments in
national currencies. Annual turnover of settlement operations was
RUB51,085 million during FY2017, representing a 35% compounded
annual growth rate since 2014. The settlements can take place in
any currency but are primarily made in the national currencies of
member states (2017: 91.1%) with the Russian rouble accounting
the largest share in total turnover (2017: 53.9%), followed by
the Moldovan leu (16.3%) and the Kyrgystani som (13.7%).

Treasury assets accounted for 99% of total assets at end-1H18, of
which 5.8% was in the form of cash and balances with central
banks and 44.8% represents mostly overnight money-market deposits
with commercial banks. Coverage of treasury assets to deposits
due to customers was 2.3x at end-1H18, as the bank needs highly
liquid assets carry out its intra-day settlement operations. The
credit quality of short-term placements ranges from 'BBB-' to
'B+', and the securities portfolio comprises bonds issued by
Russia, state-owned entities, and international organisations
(BBB+ to BB+).

IB has no loans, there are currently no guarantees issued by the
bank, it does not provide trade financing, does not take part in
any co-financing, and is not involved in concessional lending,
project finance or loans to SMEs. The bank's business model is
not expected to change in the foreseeable future. As such, IB's
rating is anchored by Fitch's assessment of support rather than
its intrinsic profile.

The bank's main source of funding is equity (end-1H18: 57% of
total), which comprises paid-in capital, retained earnings, and
perpetual, interest-bearing, subordinated debt extended by the
central banks of member states. Deposits, mainly from CIS/EAEU
international organisations, member states' central banks and
other corresponding financial institutions, are held on-demand
and utilised to facilitate settlements. The bank has no
outstanding debt.

The bank's risk management framework is prudent outside of its
inherent concentration of Russian exposures. Liquidity management
takes into account current and projected short-term cash outflows
by currencies and maturities to ensure fulfilment of the bank's
obligations, effect payments upon instructions, and funding for
asset-related transactions. Investment securities serve as an
important buffer for the bank's demanding liquidity needs.
Furthermore, the bank faces minimal FX risk as it does not hold
open FX positions except for small cash balances. The bank
transacts in the FX spot market to effect settlements in non-
rouble currencies and passes along any cost incurred in the
transaction to the payer.

IB's rating incorporate a two-notch negative adjustment from
Russia's 'BBB-' rating, reflecting Fitch's assessment of a weak
shareholder propensity to provide support. This primarily
reflects the ease for shareholders to leave the bank, as
illustrated by the case of Uzbekistan, ultimately undermining the
institution's relevance for its key shareholder, Russia. At the
time the fifth-largest shareholder (5.5% of share capital),
Uzbekistan decided to leave the bank and withdraw from its
operations in 2012. In Fitch's view, further member state
departures could diminish Russia's propensity to provide
extraordinary support to the bank, if needed.

The notching also factors in the limited size of the bank (total
assets were RUB10.3 billion at end-1H18) relative to the region's
economy. Despite rapid growth in recent years, the share of
intra-CIS flows the bank effects has remained small relative to
intra-regional trade.

The assignment of a Short-Term IDR of 'B' is in line with Fitch's
correspondence table from the Long-Term rating scale to the
Short-Term rating scale.

RATING SENSITIVITIES

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

  - An upgrade of the Russian sovereign rating, which would
    reflect an improvement of capacity to support.

  - A positive change to its assessment of Russia's propensity to
    support the bank, which may arise from an increased share of
    settlement turnover and/or greater role in the CIS/EAEU
    economic framework.

Conversely, the main factors that could, individually or
collectively, lead to negative rating action are:

  - A downgrade of the Russian sovereign rating or revision of
    its Outlook to Stable or Negative.

  - A negative change to its assessment of Russia's propensity to
    support the bank

KEY ASSUMPTIONS

The ratings and Outlook are sensitive to a number of assumptions:

  - Russia continues to own at least 50% of IB's capital.

  - No deviation from IB's current strategy.

  - Risk management policies remain prudent and no breach is
    expected.



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


DEBENHAMS PLC: Landlord Sues Over GBP132,600 in Unpaid Rent
-----------------------------------------------------------
Sam Chambers at The Times reports that Debenhams is being sued by
a reclusive property tycoon in a dispute that illustrates the
tensions between retail landlords and ailing tenants.

According to The Times, Gainhold, an investment vehicle led by
the multimillionaire Eliasz Englander, is seeking GBP132,600 in
unpaid rent from the struggling department store chain.

The claim relates to part of Debenhams' branch in Southend-on-
Sea, Essex, that was sublet to Mothercare, The Times discloses.
The property is owned by Mr. Englander, whose family is worth
GBP359 million, The Times relays, citing The Sunday Times Rich
List.

The baby goods specialist secured a company voluntary arrangement
in June, enabling it to shut dozens of stores and slash the rent
on others, The Times recounts.  As part of that deal, Mothercare
cut its rent bill at the Southend store by 65%, The Times states.


FERROGLOBE PLC: Fitch Puts B LT IDR on Rating Watch Negative
------------------------------------------------------------
Fitch Ratings has placed Ferroglobe PLC's Long-Term Issuer
Default Rating of 'B' and senior unsecured rating of 'B+' on
Rating Watch Negative.

The RWN reflects Fitch's opinion that there are risks around the
scope and impact of Ferroglobe's responsive actions to prevent or
mitigate further financial pressure should the weakness in
silicon and manganese markets coupled with elevated input costs
protract into 2019. Single digit price and sales volumes decline
combined with elevated electrode, manganese ore and coal prices
pressured EBITDA towards its minimal level in 3Q18 over the last
year. In particular, manganese-based alloys EBITDA turned
negative in 3Q18, reducing overall reported EBITDA to USD45
million.

So far, Ferroglobe's response has been the reduction of its North
American and European silicon metal capacities by 76 thousand
tons (kt) to 328kt as well as the 112kt cut of its manganese-
based alloys capacity to 552kt. The aim is to suspend reduced-
load or loss-making plants, which should allow for destocking
from 4Q18. Fitch will monitor the operational and financial
impact of the closures as well as market developments on the
company's performance and financial profile.

Fitch expects to resolve the RWN over the next one to three
months. Over this period, Fitch expects to meet with the
company's management to better understand expectations for future
operating performance, compliance with covenants, as well as
potential options to manage indebtedness. Fitch will also monitor
the development of near-term market conditions and prices.

KEY RATING DRIVERS
Leverage Spike in 2019: Fitch conservatively expects Ferroglobe's
EBITDA to drop to USD120 million in 2019 before rebounding back
to the USD210 million-USD220 million range as silicon and
manganese markets go through rebalancing. Despite modest capex
and zero dividends behind modestly positive free cash flow and
broadly flat net debt, Ferroglobe's FFO gross adjusted leverage
is expected to spike well above the current 4x negative guideline
in 2019 before reverting back to around 4x in the following
years.

Input Costs Peak: In 2018 Ferroglobe saw a double digit increase
in production costs since early 2017 in all three major
segments - silicon metal, silicon alloys and manganese alloys. An
increase in low-ash coal and coke prices has been driven by
China's 'Blue skies' policies and hit silicon and manganese
alloys. European power prices have risen sharply in 2018 and
mostly affected silicon metal and silicon alloys. Manganese
margins were also affected by the manganese ore price, which
peaked in March 2018 and stay elevated due to strong Chinese
imports.

Fitch expects energy prices to remain high but to rise at a
slower pace starting from 2019-2021. Manganese ore prices are
expected to moderate but remain above the pre-2017 levels as
Ferroglobe and other producers cutting output only partly offset
the new supply coming online in 2019. Fitch also expects coal and
coke prices to moderate from the recent highs in line with
Fitch's Metals Mid-Cycle Commodity Price Assumptions (October
2018).

Production Capacity Optimised: In November 2018, Ferroglobe
announced that it will reduce its production capacity starting
from 4Q18 aiming at destocking its excess inventories coming from
weak sales volumes earlier in 2018. The idling of three US and
three France-based furnaces will lead to a 76kt reduction in
silicon metal capacity, leaving 328kt capacity under operation.
Manganese-based alloys capacity are being reduced by 112kt to
552kt. Ferroglobe's plan is to increase the load in the remaining
capacities but Fitch conservatively forecasts a production dip
for 2019 as Ferroglobe also needs to destock in silicon metal and
manganese alloys.

Silicon Markets Bottom in 2019: Silicon metal prices declined in
3Q18 and further in 4Q18 mainly due to weak demand as China
withdrew the subsidies for photovoltaic modules in 2018. On the
supply side, a surplus of silicon metal-rich aluminium scrap in
the US and increased competition from Malaysian and Eastern
European suppliers has further depressed spot prices furter.
Ferroglobe's sales volumes fell back to 2017 levels from the 1Q18
peak and led to excess inventories, driving its decision to cut
silicon metal capacity. Fitch conservatively expects annual
average silicon metal prices to dip at USD2,500/t in 2019
assuming 1H19 pressure followed by 2H19 recovery and low single-
digit recovery in later years.

Manganese Alloy Margins Squeezed: The market for manganese alloys
outside China has become oversupplied in 2018, with prices
continuing their downward trend from 2Q17. In 2018 manganese ore,
the key input, doubled from 2015-2016 levels due to strong demand
from China and squeezed the margins of the non-integrated
manganese-based alloys players elsewhere towards negative levels
in 3Q18 compared with nearly 25% in 2Q17, according to CRU. From
2019 Fitch expects the manganese segment margin to see some
recovery as manganese ore prices moderate but stay twice as high
as in 2017 while manganese alloys will be 13%-15% below the 2017
levels.

Relationship with Parent: Spain's Grupo Villar Mir (GVM), a
privately held Spanish conglomerate is Ferroglobe's majority
shareholder (53% at end-2017). Fitch considers Ferroglobe on a
standalone basis. However, most of the shares GVM owns in
Ferroglobe were pledged to secure its obligations to Credit
Agricole Corporate and Investment Bank, Banco Santander and HSBC
as of the end of 2017. Fitch understands that GVM has achieved a
refinancing of its debt with Tyrus Capital. However, it is
unclear what effects the parent's refinancing could have on
Ferroglobe's financial policies and upstream dividend
distributions, especially during times of the group's financial
distress.

Dividend Payments to Halt: Ferroglobe announced that it would
start paying dividends in 2018, and Fitch estimates 2018
dividends will equal USD21 million. In August 2018 it also
announced a share buyback of USD20 million. Fitch estimates that
from 3Q18 the company will have limited, if any, headroom to pay
dividends while maintaining reasonable leverage.

Ferroglobe paid USD77 million dividends in 2015-2016 despite high
leverage and operating losses. This is behind its lack of
assurance at this point of time that Ferroglobe will not upstream
any dividends despite it being together with its sister company,
Spanish construction player Obrascon Huarte Lain SA (OHL,
B+/Stable), the key source of cash support for its parent and
majority shareholder, GVM.

US Trade Case Unsuccessful: Silicon imports to the US from
Australia, Brazil, Kazakhstan or Norway should not be subject to
import duties according to the US Department of Commerce's final
decision made in March 2018, despite preliminary determinations
of injury caused by imports from these countries. This will be
marginally negative for Ferroglobe, which is the largest silicon
producer in the US.

Largest Western Silicon Producer: Fitch assesses Ferroglobe's
operational profile as commensurate with the low-to-mid 'BB'
rating category, reflecting the combination the company's large
scale in specialty alloys and its high cost position. The
company's 26 plants have a gross capacity of nearly 1.2 million
tons of silicon, silicon-based and manganese-based alloys
(excluding acquired Glencore plants) and are located mainly in
the US and Europe. Europe and North America accounted for nearly
85% of the company's sales, with silicon accounting for around
half of revenues.

Ferroglobe's customer base is well diversified across the steel,
aluminium and chemical sectors. Self-sufficiency in key raw
materials (the company has the resources to be 45% self-
sufficient, excluding electricity) partly supports its
competitive position but does not fully protect from cost
inflation in power, manganese ore, electrodes or coal/coke.

DERIVATION SUMMARY

Ferroglobe, the leading western producer of silicon metal,
silicon-based and manganese-based alloys, greatly depends on
volatile market prices for its products, as shown in 2015-2016
when its cash flows deteriorated sharply due to depressed prices.
Cash flow pressure repeated in 2018 when a combination of price
volatility and input cost hike caused a sharp decline in cash
flows from 2H18. Ferroglobe's business factors, such as scale of
operations, sales diversification, level of integration and
market leadership are broadly comparable with that of PAO Koks
(B/Stable) or Ferrexpo plc (B+/Stable) but fall behind larger
peers such as Evraz Group SA (BB/Stable) in terms of scale or
backward integration.

No operating environment or Country Ceiling constraint was in
effect for these ratings.

No parent/subsidiary linkage is applicable.

KEY ASSUMPTIONS

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

  - Average 2019-2021 realised prices for silicon metal, silicon-
    based alloys and manganese-based alloys of around USD2,550/t,
    USD1,770/t and USD1,140/t, respectively, with 2020-2021 low
    single-digit recovery from 2019 lows

  - Capacity cuts and inventory release coupled with high single
    digit sales volumes decline in silicon metal and manganese-
    based alloys in 2019, with sales volumes recovery back to
    2018 levels thereafter

  - Single-digit inflation in power, single-digit reduction in
    coal/coke prices and double-digit manganese ore price decline

  - EBITDA hit to around USD120 million in 2019 before post-2019
    recovery to the USD200 million-USD220 million range

  - Capex and dividends averaging USD100 million a year in 2018-
    2021

RATING SENSITIVITIES

Fitch expects to resolve the RWN over the next one to three
months. Over this period Fitch expects to meet with the company's
management to better understand expectations for future operating
performance, compliance with covenants, as well as potential
options to manage indebtedness. Fitch will also monitor the
development of near-term market conditions and prices.

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

  - Weakness in its product prices leading to sustained EBIT
    margin below 6%.

  - Sustained FFO adjusted gross leverage above 4x through the
    cycle, potentially driven by subdued prices, acquisitions or
    large dividend payments.

  - Deterioration in liquidity.

LIQUIDITY

Comfortable Liquidity: At end-September 2018, Ferroglobe had
short-term unadjusted debt of USD71 million. The short-term
unadjusted debt was comfortably covered by cash and equivalents
of USD131 million and USD21 million of Fitch-projected positive
free cash flow over the next year. The company also had an
undrawn long-term committed secured revolving credit facility
portion of USD116 million.


GOURMET BURGER: CVA Process to Help Improve Performance
-------------------------------------------------------
Larry Claasen at Business Day reports that the restructuring of a
fast-food operator Famous Brands' UK-based Gourmet Burger Kitchen
(GBK) passed an important milestone when its creditors approved
the group's turnaround plan.

According to Business Day, when Famous Brands bought GBK and its
97 stores from Nandos, the move was widely approved, but the
slowdown in the economy, along with the uncertainty created by
the UK's decision to leave the EU created a hostile trading
environment.  The premium burger market had also become
overtraded, Business Day notes.

In an effort to turn around its struggling UK operation, Famous
Brands announced in October that it was going through a company
voluntary arrangement (CVA) process, with the assistance of Grant
Thornton, Business Day relates.

Famous Brands negotiated its property portfolio so it could "be
in line with current market valuations", Business Day notes.

The CVA process gave its creditors 28 days to challenge the
restructuring proposals, Business Day states.  As no objections
were raised during the period, GBK went ahead with shutting down
14 of the 17 severely underperforming restaurants, Business Day
recounts.

The other three sites earmarked to close have improved their
performance and are staying open, but remain under review,
Business Day says.

Famous Brands, as cited by Business Day, said the CVA process has
positioned GBK to improve its performance because its existing
debt has been refinanced, and the restructuring gave it a debt
profile that is better aligned to its operational requirements.


HORIZON INSURANCE: Placed Into Administration
---------------------------------------------
Horizon Insurance Company Limited, the Gibraltarian motor
insurance company, was placed into administration on Dec. 19,
2018.

Horizon stopped taking new business on December 31, 2016, and all
live policies expired on or before December 31, 2017.  While the
firm is authorized by the Gibraltar Financial Services Commission
(GFSC), it also operated in the UK.  This means some customers
based in the UK may have had a policy with the firm and may have
an outstanding claim.

Customers of Horizon, or third parties with an outstanding claim,
should engage with Terry Clarke of Catalyst Consulting Solutions,
the existing claims handlers.  Mr. Clarke can be reached on 01245
809145 or terry.clarke@catalystcsl.co.uk


NEW LOOK: To Cut GBP1.3BB Debt Amid Tough Trading Conditions
------------------------------------------------------------
Jill Geoghegan at Drapers reports that New Look is planning to
cut its GBP1.3 billion debt in the new year, as tough trading
continues.

According to Drapers, the retailer has engaged advisers to come
up with a solution to its debt problem, the Mail on Sunday
reported, and is considering a debt-for-equity swap, whereby
bondholders would be offered shares in the business.

This year New Look underwent a company voluntary arrangement
(CVA) and closed its Chinese business in a bid to cut costs,
Drapers relates.


SEADRILL PARTNERS: Moody's Affirms Caa2 CFR, Outlook Stable
-----------------------------------------------------------
Moody's Investors Service affirmed Seadrill Partners LLC's
corporate family rating of Caa2 and probability of default rating
of Caa2-PD. Concurrently, Moody's affirmed the Caa2 rating on the
$2.9 billion senior secured term loan due 2021, borrowed by
SDLP's subsidiaries Seadrill Operating LP and Seadrill Partners
Finco LLC, and the B1 rating on the $100 million first out
secured revolving credit facility (RCF) due 2019, borrowed by
Seadrill Operating LP, Seadrill Partners Finco LLC, and Seadrill
Capricorn Holdings LLC, also a subsidiary of SDLP. The outlook on
all ratings remains stable.

RATINGS RATIONALE

The affirmation of Seadrill Partners' Caa2 CFR follows the
successful emergence from restructuring of its parent company
Seadrill Limited (unrated) with no detrimental effect on SDLP's
own operations. The rating reflects: (1) the still challenging
conditions prevailing in the deepwater and ultra-deepwater
offshore drilling market, where activity remains weak and no
material recovery is expected before 2020, (2) high consolidated
gross leverage expected to be around 6.0x in 2018 and rise again
in 2019, should SDLP's operating performance deteriorate as a
result of its failure to win new contracts and/or secure high
enough day-rates, (3) some marked customer concentration with
four out of the seven rigs in operations in 2018 being contracted
to a single customer and (4) a high degree of structural
complexity compounded by the shareholder friendly nature of the
MLP/LLC structure.

These negatives are partly mitigated by: (1) SDLP's young and
high-quality fleet of rigs and tender barges with an average age
of 7.3 years, (2) the existence of long-standing contracts
negotiated in the past at high day-rates running until Q4 2020,
(3) a customer base largely comprised of highly rated investment
grade oil majors (4) the absence of any construction risk borne
by SDLP, as vessels are only dropped down from its parent company
Seadrill Limited (SDRL) once they have been awarded long-term
contracts, and (5) expected positive albeit declining free cash
flow (FCF) generation in 2018-19 despite the weak operating
environment.

SDLP reported an order backlog of $1.1 billion as of November 20,
2018. Based on the company's current fleet status, eight out of
the company's fleet of eleven rigs are contracted until June/July
2019, of which two (and potentially three if the West Aquarius
options are exercised by Exxon) will remain in operation until Q4
2020. Therefore, revenue visibility beyond mid-2019 is limited.
Despite the recovery in oil prices from the lows recorded in
early 2016, significant uncertainty persists around the amount of
capex oil companies are willing to allocate to deepwater
exploration as opposed to further developing existing oilfields.
This is likely to constrain day-rates given the steady supply of
new builds and persisting overcapacity affecting the drilling
market.

Moody's cautions that in a downside scenario where market
conditions fail to recover and SDLP does not win any new
contracts at economic rates, EBITDA may decline towards $400
million in 2019. This would lead to an increase in financial
leverage with adjusted total debt to EBITDA rising above 7x.

Moody's expects SDLP to maintain an adequate liquidity profile in
the next 12 months. Following the receipt of approximately $250
million in proceeds from the West Leo litigation judgment in July
2018, the company had high cash balance of $882 million as of
September 2018. In addition, Moody's expects that it will
generate positive FCF of around $30-40 million in Q4 2018.
Assuming the company remains FCF positive in 2019, it should
comfortably meet debt maturities of $175 million falling due in
the period through the end of 2019. However, Moody's cautions
that in the absence of any improvement in operating performance,
the company's liquidity position will weaken during the course of
2020, when aggregate maturities of $670 million fall due.
Furthermore, SDLP may be challenged to refinance its main term
loan B facility, which expires in February 2021.

RATING OUTLOOK

The stable outlook mainly reflects SDLP's near-term adequate
liquidity profile and expected positive FCF generation despite
the prolonged industry downturn constraining revenue generation
and operating profitability.

WHAT COULD CHANGE THE RATING UP/DOWN

A rating upgrade may be considered if the company manages to
secure meaningful new contracts backed by recovery in market
conditions, which would increase its revenue visibility and
support operating performance beyond mid-2019. Concurrently,
Moody's would also require Seadrill Partners to demonstrate a
sustainable capital structure, while maintaining an adequate
liquidity profile.

Conversely, the ratings may come under pressure if the absence of
any meaningful recovery in market conditions results in a
continued deterioration in the company's operating performance
and/or marked weakening in its liquidity position.

The principal methodology used in these ratings was Global
Oilfield Services Industry Rating Methodology published in May
2017.

Seadrill Partners LLC, is a Marshall Islands registered company,
and operates under the Master Limited Partnership (MLP)
structure. SDLP is 47% owned by Seadrill Limited (SDRL, the
parent), with the remainder held by public unitholders. It is a
provider of offshore drilling services to the oil and gas
industry and its fleet consists of four 6th generation ultra-
deepwater semi-submersibles and four ultra-deepwater drillships,
two tender barges and one semi-tender barge. In the last twelve
months to September 2018 SDLP generated revenue of $871 million
excluding the proceeds from the West Leo litigation with Tullow
Oil and Moody's adjusted EBITDA of $516 million.



===================
U Z B E K I S T A N
===================


UZBEKISTAN: S&P Assigns 'BB-/B' Sovereign Credit Ratings
--------------------------------------------------------
On Dec. 21, 2018, S&P Global Ratings assigned its 'BB-/B' long-
and short-term foreign and local currency sovereign credit
ratings to Uzbekistan. The outlook is stable. The transfer and
convertibility (T&C) assessment is 'BB-'.

OUTLOOK

S&P said, "The stable outlook reflects our expectation that, over
the next year, Uzbekistan's fiscal and external net asset
positions will remain strong, albeit decline slightly, due to
expected future current account deficits and government
borrowing.

"We could raise the ratings if monetary policy effectiveness were
to improve, for example through a decline in dollarization of the
economy. Further diversification of the government's revenue base
or the composition of the economy's exports would also be
supportive of the ratings.

"We could lower the ratings if the fiscal or external positions
deteriorated, for example if fiscal deficits increased beyond our
base-case scenario or if higher-than-expected current account
deficits led to an increase in external financing needs. We could
also lower the ratings if we observed increasing weakness in key
state-owned enterprises (SOEs), leading to growing contingent
liabilities for the government."

RATIONALE

S&P said, "Our ratings on Uzbekistan are supported by the
government's strong fiscal and external positions. These
strengths predominately arise from the government's large asset
position, which stems partly from the policy of transferring part
of the revenues from commodity sales to the Uzbekistan Fund for
Reconstruction and Development (UFRD).

"Our ratings are constrained by Uzbekistan's low economic wealth,
as measured by GDP per capita. In our view, future policy
responses may be difficult to predict, given the highly
centralized decision-making process and that accountability and
checks and balances between institutions are relatively
underdeveloped. Our ratings are also constrained by low monetary
policy flexibility."

Institutional And Economic Profile: Reforms have begun to open up
the economy but challenges remain.

-- Broad-based policy reforms have improved institutions, albeit
    from a low base, and opened up the economy.

-- S&P expects decision-making to remain centralized.

-- GDP per capita remains low, at an estimated $1,200 in 2018.
    S&P expecte real GDP growth to remain relatively strong,
    averaging 5% over our forecast period to 2021.

President Mirziyoyev, who came to power after the death of
longstanding President Karimov in 2016, has initiated a series of
broad-based policy reforms, including attempts to increase the
independence of the judiciary, remove some restrictions on free
expression, and increase the government's accountability to its
citizens. Changes have also included the implementation of an
anti-corruption law, an increase in transparency regarding
economic data, and the liberalization of trade and the foreign
exchange regimes. Relationships with neighbors have also greatly
improved, evidenced by increased co-operation in border
demarcation with Kyrgyzstan and improvements in transportation
links with Kazakhstan and Tajikistan. Further reforms earmarked
for implementation beginning in 2019 are a new tax system,
reforms in the banking system, and early stage development of
domestic financial markets.

S&P said, "Notwithstanding the positive trend in strengthening
institutions, in our view, Uzbekistan is starting from a low
base. We believe that decision-making will remain highly
centralized in the hands of the president, making future policy
responses more difficult to predict. We observe that checks and
balances between institutions remain weak. Additionally,
uncertainty over any future succession remains, despite the
relatively smooth transfer of power to President Mirziyoyev.

"Over our forecast period through 2021, we expect real GDP growth
to average 5%, supported by growth in the services,
manufacturing, and natural resources sectors. The construction
sector is a small but growing part of GDP." The economy has been
government led for many years, and is dependent on SOEs, which
contribute an estimated 60% of GDP. Nevertheless, Uzbekistan has
a significant endowment of natural resources, including large
reserves of diverse commodities, the export of which have
supported past current account surpluses. Globally, the country
is one of the top 20 producers of natural gas, gold, copper, and
uranium. Uzbekistan's population is young: almost 90% is at or
below working age, presenting an opportunity for labor supply-led
growth. However, it will remain a challenge for job growth to
match demand. Despite steady growth, GDP per capita remains low,
at about $1,200 at year-end 2018.

Flexibility And Performance Profile: Fiscal and external position
to remain robust, despite expected twin deficits

-- S&P expects current account deficits over the coming years as
    imports increase to meet the consumption and investment
    demands of the more outward-facing economy.

-- S&P projects that the government will remain in a net asset
    position, despite fiscal deficits and our expectation of
    increased borrowing.

-- S&P expects the central bank will work to lower inflation,
    though it does not expect single-digit inflation within its
    forecast horizon through 2021.

S&P said, "We expect the government's fiscal balance to remain in
deficit, averaging about -1.4% of GDP over the forecast period.
We expect the government to increase social spending on areas
such as education and healthcare, but we also expect an increase
in capital expenditure, given the economy's infrastructure needs.
Currently, wages make up the largest component of expenditure, at
over 50%.

"The government is also working on a tax reform bill to be
implemented in 2019. The reforms will simplify the tax code and
lower some tax rates. Although this may help expand the tax base
and increase collection rates, we believe initially it could lead
to weaker revenues. In our view, the government's revenue base is
potentially volatile because of a high reliance on income from
extractive industries. However, the government's large liquid
assets, estimated at 37% of 2018 GDP, could have a mitigating
effect if needed.

"The government's assets are mostly kept in the UFRD. Founded in
2006, and initially funded with capital injections from the
government, the UFRD has received revenues from gold, copper, and
gas sales above certain cut-off prices. We include only the
external portion of UFRD assets in our estimate of the
government's net asset position because we view the domestic
portion -- which consists of loans to SOEs and capital injections
to banks -- as largely illiquid.

"We estimate the general government sector to be in a net asset
position of 15% of GDP at year-end 2018. The government's net
asset position will moderate somewhat over the period, as we
expect it to post small deficits, issue commercial debt, and
transfer less money into the UFRD. Currently the government has
no commercial debt, though we expect it will access the capital
markets soon. We include in our forecasts an expectation of $1
billion issuance a year until 2021, though the amount could be
lower subject to the government's policy decisions and market
conditions. Also included in our forecasts is the issuance of
local currency debt. The government plans to issue local currency
debt in the coming quarters to build depth in the local market.
It has not issued local currency debt since 2012.

"We estimate general government debt at US$8.5 billion (22% of
GDP) at year-end 2018. General government debt is almost all
external and denominated in foreign currency, making it
susceptible to exchange rate movements. Most debt is from
official creditors, of which about half is from bilateral
creditors, with the two main creditors being China and Japan.
Multilateral lenders, predominantly the Asian Development Bank
and the World Bank, provide the other half. We include in our
estimate of general government debt the US$2.5 billion (6.5% of
GDP) in external debt of SOEs guaranteed by the government, due
to the closeness of the government to the SOEs and the ongoing
support for the SOEs from the government. General government debt
service is low, due to its concessional nature. We estimate
interest payments at 1.6% of revenues on average over our
forecast period.

"We view contingent liabilities to the government from the
banking sector and other nonfinancial public enterprises as
limited. We estimate total banking sector assets at 67% of GDP in
2018. We note, however, that in 2017 the government injected
capital of approximately US$670 million (1.7% of GDP) from the
UFRD into state-owned banks. The reform agenda of the government
also emphasizes improving operations at noncompetitive SOEs.
In addition to the SOE's external debt that we include in our
definition of general government debt, the government also
guarantees about US$4.5 billion (11.5% of GDP) of foreign
currency-denominated but domestically-held debt of SOEs. These
loans are from the UFRD and we consider this as government
expenditure. However, as reforms on SOEs begin, if any weaknesses
appear or it becomes apparent that further outlays from the
government are necessary, we could reconsider our assessment of
contingent liabilities."

Uzbekistan's banking system remains relatively stable, despite
the government's large devaluation of the Uzbekistani sum in
2017, largely because of capital support the government provided
to state-owned banks. Government-controlled banks dominate the
country's banking system, with a market share of close to 84% of
systemwide total assets. S&P said, "In our view, predominance of
state-owned banks and a high share of directed lending in the
economy distort competition and the commercial nature of banking
business in Uzbekistan. Reported asset quality remains good in
2018 with reported nonperforming loans of about 1.3% because of
the high share of SOEs, which benefit from ongoing government
support, in the loan book. However, we think that problem loans
(including restructured loans) could be closer to 10%, reflecting
the large restructuring of foreign-currency denominated loans
that occurred after the devaluation. Loans denominated in foreign
currency represent around 57% of the systemwide loan book, and,
together with very high single-name loan concentrations,
represent a risk to asset quality soundness, in our view."

The Central Bank of Uzbekistan's initiatives to strengthen
banking sector capitalization and adopt some Basel III guidelines
have been moderately successful. However, significant government
involvement in decision-making at state-owned banks remains a
substantial drag on the effectiveness of banking supervision, in
our view. Customer deposits and funds from the UFRD remain the
key funding sources for banks, representing close to 70% of
systemwide liabilities. Gross external funding represents close
to 13% of systemwide liabilities and mainly includes bilateral
loans from international financial institutions to fund
preauthorized projects. S&P believes that the funding structure
will remain relatively stable over the next two to three years.
S&P thinks that the government is supportive toward the banking
sector, reflecting periodic capital injections in state-owned
banks in the previous years and the large amount of SOE debt owed
to banks guaranteed by the government.

S&P said, "Uzbekistan is in a strong net external asset position
that is largely the result of current account surpluses and the
closed nature of the economy in the recent past. We estimate that
liquid external assets will exceed external debt by 34% of
current account payments at year-end 2018. As the economy opens
up, we expect a small deterioration of this position as the
current account balance moves to a deficit. We estimate our
measure of external liquidity (gross external financing needs to
current account receipts plus usable reserves) at 90%.

"We include in our estimate of the central bank's reserve assets
its significant holdings of monetary gold, which accounts for the
majority of reserves. The central bank is the sole purchaser of
gold mined in Uzbekistan. It purchases the gold with local
currency then sells dollars in the local market to offset the
increase in reserves from the gold. We do not include UFRD assets
in the central bank's reserve assets but instead as government
external assets because we view them as fiscal reserves. Foreign
direct investment inflows are low and concentrated in the
extractive industries, particularly natural gas. Our external
analysis is complicated by a lack of historical international
investment position data.

"We expect Uzbekistan's current account balance to turn to a
deficit from 2019, averaging about -1.9% of GDP over 2019-2021.
We expect the reduced trade barriers to lead to an increase in
imports, especially capital goods and high technology goods
required to update and modernize the economy. Additionally,
consumer goods imports are likely to rise, given the increased
ease of trade. Better trade relations with neighbors should boost
Uzbekistan's exports as well, especially agricultural goods.
Exports remain heavily dependent on commodities, however, with
gold, other metals, and natural gas making up approximately 70%
of exports. In our view, this dependency could lead to volatility
in their terms of trade. Another important component of
Uzbekistan's current account are remittances from Uzbek workers,
particularly the large number of Uzbeks in Russia."

One of the most significant economic reforms that Uzbekistan has
made is the liberalization of the exchange rate regime in
September 2017 from a crawling peg over-valued in comparison with
the black market rate, to a managed float. S&P said, "Though we
believe the central bank initially intervened heavily in the
foreign exchange market, it now only intervenes intermittently to
smooth volatility. The relatively short track record of the float
constrains our assessment of monetary flexibility, as does our
perception of the potential for political interference in the
central bank's decision-making. Our assessment of monetary policy
is also constrained by high inflation and the high dollarization
of the economy, which limits the effectiveness of the monetary
policy transmission mechanism. Positively, the central bank is
moving toward inflation targeting, though we expect this
transition will take a few years."

S&P expects inflation to remain above 10% for our forecast period
and to average 17% over 2018. Average inflation reached 14% in
2017 and year-end inflation was 19%, mostly because of the
currency devaluation in September 2017. In addition to the
effects of the devaluation, more open trade policies have allowed
domestic prices to move toward regional and international prices,
putting inflationary pressure on domestic goods. Growth in public
sector wages, the liberalization of regulated prices, and energy
prices could also add to inflationary pressure over the forecast
period. S&P notes that, in response to these inflationary
pressures, the central bank raised its refinancing rate to 16% in
September 2018.

In accordance with S&P's relevant policies and procedures, the
Rating Committee was composed of analysts that are qualified to
vote in the committee, with sufficient experience to convey the
appropriate level of knowledge and understanding of the
methodology applicable. At the onset of the committee, the chair
confirmed that the information provided to the Rating Committee
by the primary analyst had been distributed in a timely manner
and was sufficient for Committee members to make an informed
decision.

After the primary analyst gave opening remarks and explained the
recommendation, the Committee discussed key rating factors and
critical issues in accordance with the relevant criteria.
Qualitative and quantitative risk factors were considered and
discussed, looking at track-record and forecasts.

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

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

  RATINGS LIST
  New Rating

  Uzbekistan
   Sovereign Credit Rating                  BB-/Stable/B
   Transfer & Convertibility Assessment     BB-



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


[*] BOOK REVIEW: Macy's for Sale
--------------------------------
Author: Isadore Barmash
Paperback: 180 pages
List price: $34.95
Review by Henry Berry
Order your personal copy today at
http://www.beardbooks.com/beardbooks/macys_for_sale.html

Isadore Barmash writes in his Prologue, "This book tells the
story of Macy's managers and their leveraged buyout, the newest
and most controversial device in the modern financial armament"
when it took place in the 1980s. At the center of Barmash's story
is Edward S. Finkelstein, Macy's chairman of the board and chief
executive office. Sixty years old at the time, Finkelstein had
worked for Macy's for 35 years. Looking back over his long career
dedicated to the department store as he neared retirement,
Finkelstein was dismayed when he realized that even with his
generous stock options, he owned less than one percent of Macy's
stock. In the 185 years leading up to his unexpected, bold
takeover, Finkelstein had made over Macy's from a run-of-the-mill
clothing retailer into a highly profitable business in the lead
of the lucrative and growing fashion and "lifestyle" field.

To aid him in accomplishing the takeover and share the rewards
with him, Finkelstein had brought together more than three
hundred of Macy's top executives. To gain his support for his
planned takeover, Finkelstein told them, "The ones who have done
the job at Macy's are the ones who ought to own Macy's." Opposing
Finkelstein and his group were the Straus family who owned the
lion's share of Macy's and employees and shareholders who had an
emotional attachment to Macy's as it had been for generations,
"Mother Macy's" as it was known. But the opponents were no match
for Finkelstein's carefully laid plans and carefully cultivated
alliances with the executives. At the 1985 meeting, the
shareholders voted in favor of the takeover by roughly eighty
percent, with less than two percent opposing it.
The takeover is dealt with largely in the opening chapter. For
the most part, Barmash follows the decision making by
Finkelstein, the reorganization of the national company with a
number of branches, the activities of key individuals besides
Finkelstein, Macy's moves in the competitive field of clothing
retailing, and attempts by the new Macy's owners led by
Finkelstein to build on their successful takeover by making other
acquisitions. Barmash allows at the beginning that it is an
"unauthorized book, written without the cooperation of the buying
group." But as he quickly adds, his coverage of Macy's as a
business journalist and his independent research for over a year
gave him enough knowledge to write a relevant and substantive
book. The reader will have no doubt of this. Barmash's narrative,
profiles of individuals, and analysis of events, intentions, and
consequences ring true, and have not been contradicted by
individuals he writes about, subsequent events, or exposure of
material not public at the time the book was written.

First published in 1989, the author places the Macy's buyout in
the context of the business environment at the time: the
aggressive, largely laissez-faire, Reagan era. Without being
judgmental, the author describes how numerous corporations were
awakened from their longtime inertia, while many individuals were
feeling betrayed, losing jobs, and facing uncertain futures.
Isadore Barmash, a veteran business journalist and author, was
associated with the New York Times for more than a quarter-
century as business-financial writer and editor. He also
contributed many articles for national media, Reuters America,
and the Nihon Kenzai Shimbun of Japan. He has published 13 books,
including a novel and is listed in the 57th edition of Who's Who
in America.



                            *********

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

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

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


                            *********


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

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

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

This material is copyrighted and any commercial use, resale or
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written permission of the publishers.

Information contained herein is obtained from sources believed to
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members of the same firm for the term of the initial subscription
or balance thereof are US$25 each.  For subscription information,
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                 * * * End of Transmission * * *