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

                          E U R O P E

          Tuesday, February 19, 2019, Vol. 20, No. 36

                           Headlines



G E R M A N Y

AIR BERLIN: Creditors' Insolvency Claims May Exceed EUR1 Billion
GERMANIA: Ten Parties Begin Due Diligence for Routes, Slots


L U X E M B O U R G

CRC BREEZE: S&P Cuts EUR300MM Sr. Secured Notes Rating to CCC+


N E T H E R L A N D S

GLOBAL UNIVERSITY: Fitch Gives BB- Final Sr. Secured Rating
[*] Fitch Takes Rating Action on 3 E-MAC RMBS Deals; Corrects Error


R U S S I A

DME LTD: Fitch Affirms Long-Term IDR at BB+, Outlook Stable


T U R K E Y

TURKEY: S&P Affirms B+ FC Sovereign Credit Rating, Outlook Stable
YUKSEL ENERJI: Declared Concordatum After Rescue Talks Fail


U K R A I N E

INTERPIPE: Postpones Deadline for Lenders to Join Lockup Agreement


U N I T E D   K I N G D O M

EG GROUP: Fitch Puts B+(EXP) Rating to AUD400M Sr. Sec. Term Loan B
EG GROUP: S&P Affirms B Rating, Alters Outlook to Stable
FLYBMI: Loganair Takes Over Three Aberdeen Routes After Collapse
IVC ACQUISITION: Fitch Assigns Final LT IDR at B, Outlook Stable
IVC ACQUISITION: S&P Assigns B Credit Rating, Outlook Stable

LUDGATE FUNDING 2008-W1: Fitch Hikes Class D Debt Rating to B+sf
WORKING LINKS: Enters Administration Following Damning Reports

                           - - - - -


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G E R M A N Y
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AIR BERLIN: Creditors' Insolvency Claims May Exceed EUR1 Billion
----------------------------------------------------------------
David Verbeek at Bloomberg News reports that Air Berlin's
administrator told Tagesspiegel claims from creditors in the
company's insolvency proceedings may exceed EUR1 billion (US$1.1
billion).

There are no reliable numbers available yet, but "we assume that
the total sum of claims will exceed the number of EUR1 billion,"
insolvency administrator Lucas Floether, as cited by Bloomberg,
said in an interview with the newspaper.

Air Berlin filed for insolvency administration in August 2017 when
its main shareholder, Abu Dhabi-based Etihad Airways PJSC, halted
support after years of losses at the German carrier, Bloomberg
recounts.

GERMANIA: Ten Parties Begin Due Diligence for Routes, Slots
-----------------------------------------------------------
Karin Matussek at Bloomberg News reports that Germania insolvency
administrator Ruediger Wienberg said in an e-mailed statement, ten
interested parties signed non-disclosure agreements and started due
diligence for potential bids for lucrative routes and profitable
slots of the German airline's business.

Mr. Wienberg declined to name any potential bidders, adding that
most are from the aviation industry, Bloomberg notes.

As reported by the Troubled Company Reporter-Europe on Feb. 6,
2019, Reuters related that holiday airline Germania had collapsed,
succumbing to wider sectoral woes after failing to secure financing
to navigate a short-term cash squeeze, cancelling all flights
immediately.  Germania, founded in 1986, blamed rising fuel prices,
a stronger dollar, delays in integrating new aircraft into its
fleet as well as a high number of maintenance services for the cash
shortage, according to Reuters.



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

CRC BREEZE: S&P Cuts EUR300MM Sr. Secured Notes Rating to CCC+
--------------------------------------------------------------
S&P Global Ratings said that it had lowered to 'CCC+' from 'B-' its
long-term issue rating on the EUR300 million senior secured notes
issued by CRC Breeze Finance S.A. (Breeze Two or the project). The
outlook is stable. The recovery rating is unchanged at '4',
indicating S&P's expectations of recovery prospects of 40%.

Breeze Two is a Luxembourg-based special-purpose vehicle that in
2006 issued EUR300 million class A notes due 2026 (CCC+/Stable/--;
recovery rating of '4'), EUR50 million class B notes due 2016 (not
rated), and EUR120 million class C notes due 2026 (not rated).
Breeze Two used the proceeds of these debt issues to finance loans
to a portfolio of wind farms: 24 in Germany (through intermediary
German holding borrower Breeze Two Energy GmbH & Co. KG) and four
in France (through intermediary French holding borrower Eoliennes
Suroit SNC). The total installed capacity of the Breeze Two
portfolio is 337.4 megawatts (MW). The wind farms have been fully
operational since 2007. They are fully cross-collateralized and
benefit from supportive regulatory regimes for renewable energy in
Germany and France.

Breeze Two's financial performance continues to deteriorate because
of increased operating costs and an eroded liquidity position. The
project has withdrawn EUR4.4 million from the senior debt service
reserve account (DSRA) since November 2016, resulting in current
funding of the DSRA at only EUR6.5 million. Under our base case, at
least EUR6.1 million from the DSRA will be needed to repay the
debt, barring any unforeseen circumstances that S&P sees as
unlikely in our downside case.

In S&P's view, Breeze Two may not be capable of timely repaying the
class A notes absent favorable wind conditions and decreasing
operating and maintenance expenses. This capacity has significantly
weakened because of the seasonality of its cash flows, which is not
mitigated by a DSRA that is funded after the junior debt service.

The key elements in S&P's assessment are:

-- Breeze Two is exposed to wind resource risk. Wind supply has
been below historical averages over the past few years. In
addition, wind power generation has been significantly irregular
throughout the past six years.

-- The overall portfolio benefits from cross-collateralization and
satisfactory diversification because the projects are located at
more than 30 different sites and in two different countries.

-- S&P expects higher-than-forecast repair and maintenance costs,
since only 66% of the installed MW benefits from a long-term,
fixed-price maintenance contract.

-- In the French regulatory system, the off‐take period runs for
20 years. However, the fixed, guaranteed offtake price runs only
for 15 years and is related to a reference yield. The project
managers must negotiate the off-take price for 2016-2020 with the
off-taker, which exposes wind farm operators to market price risk
in 2016-2020. However, S&P views market risk as not applicable,
because the French wind farms represent only 8% of the installed
capacity per MW (10% of historical revenues) so that cash flow
available for debt service under its market downside differs from
that of its base case by less than 5%.

-- There is a mismatch between debt service calculation dates
(once a year on Dec. 31) and debt service dates (on Nov. 8 and May
8 of each year).

-- Breeze Two is exposed to a material seasonality on its cash
flows. Debt service was split 50% on each repayment date.
Historically, the production for the first repayment date has been
an average of 58% of the annual production, so that cash flow
management is required to ensure sufficient payment for both
periods.

-- The project's liquidity has deteriorated, with reserves that
are already not fully funded being even further depleted. S&P's
base-case assumption is that the project will meet its debt
obligations using its reserves, however.

-- The project has weak structural protection, given that the
class A DSRA is not replenished ahead of subordinated debt service.
As such, because subordinated debt is not serviced in full, S&P
does not expect the DSRA to be replenished should drawdowns be made
from the class A DSRA.

S&P said, "The stable outlook reflects our view that the DSRA
currently provides sufficient liquidity for the next 12 months.

"We could lower the rating if Breeze Two's DSRA falls below EUR3
million, which would lead us to consider a default as possible
within the following next 12 months.

"At this stage we see limited headroom for an upgrade to 'B-', as
it would require external support or additional mitigation factors
to its seasonality."



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

GLOBAL UNIVERSITY: Fitch Gives BB- Final Sr. Secured Rating
-----------------------------------------------------------
Fitch Ratings has assigned Global University Systems Holding B.V.
(GUSH) a final senior secured rating of 'BB-' with a Recovery
Rating of 'RR2' (72%). This final senior secured rating also
applies to Markermeer Finance B.V.'s enlarged multi-tranche
GBP-equivalent 588 million term loan B (TLB) and GBP90 million
revolving credit facility (RCF), guaranteed by GUSH, which are
therefore also rated at 'BB-'/'RR2'/72%.

The final senior secured ratings take into consideration the effect
of the TLB and RCF being enlarged in size in December 2018 and are
in line with the expected ratings assigned on November 14, 2018.
This follows receipt of final documents conforming to earlier
information. GUSH's Long-Term Issuer Default Rating is 'B' with
Stable Outlook.

GUSH is a private, for-profit, higher education provider. Group
entities include the University of Law (ULaw), online specialist
Arden University, London School of Business & Finance (LSBF) and St
Patrick's International College. GUSH's recruitment & retention
division represents around 30% of EBITDA and recruits students
globally, primarily for US universities and group entities.
Privately owned, the group is acquisitive.

The ratings reflect inherently cash-generative operations, tempered
by funds from operations (FFO) lease-adjusted gross leverage at
fiscal year-end to November 2017 of 6.9x (FY17 net of readily
available cash: 4.6x). The acquisition of R3 Education Inc (in the
US) is expected to complete in 1Q19 using escrowed TLB funds.

KEY RATING DRIVERS

Recurring Diverse Income Stream: GUSH benefits from a varied income
stream stemming from its offering of geographically diverse,
single- or multi-year courses covering different subjects that also
span vocational and professional tuition. The group quotes high
student retention rates and successful employment rates. As at
October 2018, GUSH reported that its 4Q enrolment was in line with
management's expectations and around 63% of its FY19 revenue is now
booked. This revenue visibility enhances management of the group's
cost base. Although management does not report like-for-like sales
growth, excluding the effect of acquisitions, GUSH continues to
grow organic revenue according to enrolment numbers, using course
material across group entities, growth of online (through Arden),
and targeting part-time as well as full-time offers.

Private Education Offer and Demand: Higher education enrolment is
non-cyclical. There is growing inherent demand for higher education
both from within the UK and particularly from emerging countries
(Africa, Asia), coupled with an attraction to study UK
qualifications in London, online, or at group entities overseas.
The prospective R3 Education Inc. acquisition adds medical tuition
alongside law, finance, accounting and arts courses/qualifications
within the GUSH portfolio.

Limited Impact from Brexit: Demand for GUSH's courses spans local
and international students, including emerging market countries
across Africa and Asia. With regard to Brexit, although there is a
perception that the UK is raising the bar for overseas visa
applications, the UK government has proposed continued free
movement of students. Using 2017 data, GUSH states that only 7% of
its students were EU students at UK institutions. Similar
perceptions for visa applications in the US could affect student
volumes, although management reports little direct effect at this
stage.

Acquisitive Group: Fitch expects the private entrepreneur-owned
group to continue to be acquisitive. Recent sizeable acquisitions
such as UAS (Germany) and R3 Education (US) have had positive
EBITDA contributions, whereas others may take time to improve
profit levels to attain the group's aggregate 30% EBITDA profit
margin. The GUSH template of actions to improve typical
acquisitions' initial profitability is rational, but difficult to
track due to the absence of like-for-like data. The group's
financial profile continues to benefits from improved profitability
and cash generation metrics.

Recent additions to the group are plugged into the in-house
expertise of the recruitment & retention division's operating
platform, resulting in cost savings to the expanding group.
Acquisitions may cause an increase in leverage but the group has
healthy prospective free cash flow (FCF), which provides capacity
to deleverage within 18 to 24 months for a given size of
acquisition.

Improving Cash Generation: Compared with its historical profile,
GUSH should become more cash-generative as (i) expensive debt was
refinanced in January 2018; and (ii) the recruitment & retention
division's front-loaded (yet multi-year) revenue flows through to
later year's funds from operations (FFO) for the group. This did
not happen in FY16 and FY17 as the division's revenue provision
included cash flows due to be received in year two and three,
whereas the cost base was expensed as incurred. This has had the
effect of flattering EBITDA in these early years, but should make a
positive contribution to cash flow from operations (CFFO) in FY18
and thereafter.

Fitch expects the group to maintain FFO adjusted net leverage
around 4x (similar levels on an EBITDA basis), with
post-acquisition increases, and a FFO-based fixed-charge cover
ratio greater than 3x.

DERIVATION SUMMARY

Compared with Fitch's credit opinions on private education
providers at the lower end of the single 'B' rating category, GUSH
benefits from a more diversified income footprint by geography and
by type of higher education (business, vocational/professional,
under- and post-graduate) as well as format (traditional campus or
online learning). Its ULaw and LSBF institutions have a higher
profile than some peers' portfolios. GUSH is able to plug its
acquired entities into the group's high-margin centralised
recruitment & retention platform, particularly since student
recruitment and marketing costs are a significant cost burden for
smaller education groups.

GUSH's FY18 forecasted FFO-adjusted gross leverage of 5.8x (net of
cash: 3.9x) including prospective R3 Education's EBITDA, is better
than lower-rated peers', despite most peers having the FCF capacity
to deleverage swiftly. However, GUSH's lack of CFFO in FY16, which
improved in FY17 due to accrued income and working-capital items,
is a negative feature of the group's financial profile compared
with the more consistent profiles within Fitch's portfolio of
private education peers.

KEY ASSUMPTIONS

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

  - It has assumed management meets its FY18 sales expectation of
near GBP315 million (up 20% yoy) given the company's strong growth
in August 2018 YTD. From FY19 onwards, Fitch has applied Fitch's
conservative assumption of 4% organic revenue growth per year for
the group. This includes growth of 6% per year for academic &
professional revenue, and flat revenue for the recruitment &
retention division. This 4%-to-6% annual growth is conservative
given incremental revenue as courses are developed for online and
existing materials used across different group entities.

On top of this, the R3 Education acquisition is expected to bolster
sales growth in FY19 and FY20, and Fitch  has assumed GBP50 million
of acquisitions in FY20 and FY21, leading to an incremental 6%-7%
revenue growth.

  - Fitch's rating case keeps costs stable as a percentage of
revenue (without including the benefits of further synergies) thus
the EBITDA margin remains at around 32%. In FY19 there is some
dilution of group margins due to the integration of R3 Education.

  - A 20% tax rate.

Revenue provisions from the recruitment & retention segment flows
are converted to cash flow, and FFO, since the second- and
third-year income flows booked in FY15, FY16 and FY17 are scheduled
to become cash flow.

  - Post-FY18, Fitch has modelled a modest cash inflow of GBP5
million per year given that cash deposits (from student advance fee
payments) are likely to increase as the group expands.

  - Capital expenditure of around GBP20 million per year.

  - FCF will be used in FY20 and FY21 to acquire entities using
GBP50 million cash at an acquisition EBITDA multiple of 8x, and an
EBITDA margin of 20% resulting in revenue of around GBP31 million.


  - RCF upsized to GBP90 million (undrawn) from GBP75 million and
enlarged multi-tranche GBP-equivalent 588 million TLB.

KEY RECOVERY ASSUMPTIONS

Fitch believes GUSH is likely to be sold or restructured as a going
concern rather than be liquidated in a distressed scenario given
that the value of the business lies in the strength of its
institutions and recruiting operating platform. A going concern
value amounts to GBP545 million compared with a GBP121 million
liquidation value.

Based on the August 2018 LTM plus a pro forma EBITDA for the R3
Education acquisition, group EBITDA is GBP113.6 million. Fitch
maintained an EBITDA discount of 20%, which translates into a
post-restructuring EBITDA of GBP90.9 million, a level at which the
group would be generating neutral-to-marginally positive FCF. This
discount is in line with peers', weighing up the stability of
GUSH's core European business schools, the risk profile of the
recruitment & retention division, and the visibility of revenue
(multi-year courses and new student enrolment numbers) a year
ahead. A multiple of 6x is in line with peers' and reflects the
business's portfolio diversification, healthy FCF potential and
strong brands.

Fitch's recovery estimates are 72% for the senior secured ratings
of the RCF and TLB, which rank pari passu (previously 73%) with
each other. This includes the RCF enlargement to GBP90 million and
multi-tranche GBP-equivalent 588 million TLB.

RATING SENSITIVITIES

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

  - Maintaining 30% EBITDA (comparable 20% FFO) margin with
positive cash flow contribution from recruitment and retention,
stemming from successful integration of lower profit-margin
acquisitions into the group

  - FFO adjusted gross leverage below 4.5x (FFO net leverage below
3.5x) on a sustained basis

  - FFO fixed-charge cover above 2.5x on a sustained basis

  - Sustained positive FCF after acquisition

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

  - FFO adjusted gross leverage above 6.0x (FFO net leverage
between 5.0x-5.5x) on a sustained basis

  - FFO fixed-charge cover below 2.0x on a sustained basis

  - EBITDA margin below 20% (and/or FFO margin below 10%)

  - FCF margin falling to low single-digits

LIQUIDITY

Long-Dated Capital Structure: After the December 2018 refinancing,
GUSH has an enlarged multi-tranche GBP-equivalent 588 million TLB
dated 2024 and a GBP90 million RCF 2023 The TLB's euro tranche
proceeds of EUR93.3 million have been escrowed for the prospective
R3 Education acquisition and are expected to be released when the
acquisition goes ahead in 2019. Under the terms of the
documentation, proceeds are escrowed until April 2019.

GUSH has significant cash balances. This will vary according to the
period-end and the group's cycle of taking student deposits
(upfront, semi-annual, or instalments during the year). The highest
cash balance is in September/October period rather than the group's
end-November year-end.

FULL LIST OF RATING ACTIONS

Global University Systems Holding B.V.

Long-Term IDR: affirmed at 'B'/Stable

Senior Secured rating, assigned at 'BB-'/'RR2'/72%

Markermeer Finance B.V.

Senior secured rating: GBP-equivalent 588 million TLB: Final Rating
'BB-'/'RR2'/72%

Senior secured rating: GBP90 million RCF: Final Rating
'BB-'/'RR2'/72%

[*] Fitch Takes Rating Action on 3 E-MAC RMBS Deals; Corrects Error
-------------------------------------------------------------------
Fitch Ratings has upgraded five tranches, downgraded five tranches
and affirmed three tranches of three Dutch E-MAC RMBS transactions.


KEY RATING DRIVERS

Error Correction

The upgrade of the class C and class D notes of E-MAC NL 2008-I and
E-MAC NL 2008-IV is in part due to a correction of an analytical
error that occurred during the February 2018 annual surveillance
review of the transactions. For both transactions, replenishment of
the reserve fund ranks in priority to interest due on the unrated
class E Notes. This item was incorrectly modelled, as ranking
subordinated to interest due on the class E notes. Replenishment of
the reserve fund is a condition for pro-rata amortisation and can
therefore alter principal allocation to the various classes of
notes.

Asset Maturity Risks

In 2006-III Fitch identified assets with maturity dates exceeding
those of the notes. These assets comprise 0.2% of the current pool.


Note amortisation in this transaction is pro-rata given the
satisfactory performance. Note amortisation will only switch to
sequential in case of: (i) drawings on the reserve fund; (ii)
drawings on the liquidity facility; (iii) uncleared balances on the
principal deficiency ledgers; or (iv) more than 1.5% of loans being
delinquent over two months. Therefore, in a benign environment it
is possible for this transaction to amortise pro-rata until note
maturity. This implies a loss to the structure equal to the balance
of the loans that mature after the notes.

Fitch notes that the pool has a history of prepayments and the
assets affected by maturity mismatches are small as a proportion of
the current pool. Additionally, all such borrowers have at least
one loan part that matures prior to note maturity. Should the
borrower decide to refinance that loan part they will have to
refinance all their outstanding loan parts.

Fitch also notes a small number of loan parts in 2006-III maturing
within two years of the notes' legal final maturity comprising 0.8%
of the total outstanding balance of the current pool. Given the
curtailed time to note maturity, if borrowers fail to refinance
these loans the recoveries from the sale of the underlying
properties may not feed into the transaction.

Given the elevated risk to default if the asset performance remains
stable and the number of loans maturing within the two years up
until notes' legal final maturity, Fitch believes that a rating of
'Bsf' is appropriate for the collateralised notes.

Stabilising Performance

Late-stage arrears (borrowers who have been delinquent for over
three months) have stabilised over the last 12 months. As of
October 2018, late-stage arrears ranged from 0.4% (2006-III) to
0.6% (2008-IV), down from 0.65% (2006-III) and 1.0% (2008-IV) 12
months previously. Similarly, the rate at which losses are building
has slowed down.

Pro-Rata Structures

As of the October 2018 payment date, the 2006-III and 2008-IV
transactions were amortising pro-rata. E-MAC NL 2008-IV was paying
sequentially, but recently reverted to pro-rata, reducing the
credit enhancement build-up for the senior notes as per the
amortisation mechanism in the documentation. Fitch has factored
this feature into the rating analysis to the extent that the
relevant pro-rata triggers are captured by its modelling
assumptions.

Excess Spread Notes

Fitch has affirmed the excess spread note in 2006-III at 'CCCsf'.
Principal redemption of this note ranks subordinate to the payment
of extension margins on the collateralised notes in the revenue
waterfall. Fitch's ratings do not address the payment of the
extension margins, and as such they are not modelled in its cash
flow model. As the extension margin amounts have been accruing and
remain unpaid, Fitch considered full principal redemption of the
excess spread note from interest receipts as unlikely. The only
possibility that remains for the class E notes to fully amortise
would be through the release of the reserve fund if it builds up
after significant deterioration of the pool (90+ arrears above 2%)
and the built-up amounts are then released after an improvement in
performance (90+ arrears below 2%).

The reserve funds in these transactions may increase following
asset performance deterioration. Funds collected would be released
once arrears drop again below the pre-defined three-month arrears
trigger, at which point the funds released will be used towards the
redemption of the excess spread notes. As the portfolios continue
to amortise, a small number of loans can lead to greater volatility
in arrears performance, leading to the possibility of continuous
replenishments and releases in the reserve funds, and subsequent
redemptions on the excess spread notes. Given this variability, the
credit risk of the excess spread notes of 2006-III is commensurate
with the 'CCCsf' rating definition, leading to their affirmation.

RATING SENSITIVITIES

Should the assets maturing after note maturity of 2006-III prepay,
it would address the risk of the notes incurring losses at
maturity. This may lead to positive rating action.

Adverse macroeconomic factors may affect asset performance. An
increase in foreclosures and losses beyond Fitch's stresses may
erode credit enhancement, leading to negative rating action.

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

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

DATA ADEQUACY

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

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

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

SOURCES OF INFORMATION

The following information was used in the analysis.

Issuer and Servicer reports dated October 25, 2018 and provided by
CMIS Nederland B.V.

Loan-level data dated October 1, 2018 was used to run the relevant
model and the relevant data source was CMIS Nederland B.V.

Discussion with the issuer as of November 2018

MODELS

The models below were used in the analysis. Click on the link for a
description of the model.

ResiEMEA.

EMEA Cash Flow Model.

Fitch has taken the following rating actions:

E-MAC Program B.V. Compartment NL 2006-III

  - Class A2 (ISIN XS0274609923) downgraded to 'Bsf' from 'BBsf';
Outlook Stable

  - Class B (ISIN XS0274610855) downgraded to 'Bsf' from 'BBsf';
Outlook Stable

  - Class C (ISIN XS0274611317) downgraded to 'Bsf' from 'BBsf';
Outlook Stable

  - Class D (ISIN XS0274611747) affirmed at 'CCCsf'; Recovery
Estimate (RE) of 95%

  - Class E (ISIN XS0275099322) affirmed at 'CCCsf'; RE 0%

E-MAC Program III B.V. Compartment NL 2008-I

  - Class A2 (ISIN XS0344800957) downgraded to 'AA+sf' from
'AAAsf'; Outlook Stable

  - Class B (ISIN XS0344801765) upgraded at 'Asf' from 'A-sf';
Outlook Stable

  - Class C (ISIN XS0344801922) upgraded to 'BBBsf' from 'BB-sf';
Outlook Stable

  - Class D (ISIN XS0344802060) upgraded to 'B+sf' from 'CCCsf';
Outlook Stable

E-MAC Program II B.V. Compartment NL 2008-IV

  - Class A (ISIN XS0355816264) affirmed at 'AAsf'; Outlook Stable

  - Class B (ISIN XS0355816421) downgraded to 'A-sf' from 'Asf';
Outlook Stable

  - Class C (ISIN XS0355816694) upgraded to 'A-sf' from 'BBB+sf';
Outlook Stable

  - Class D (ISIN XS0355816934) upgraded to 'B+sf' from 'CCCsf';
Outlook Stable



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

DME LTD: Fitch Affirms Long-Term IDR at BB+, Outlook Stable
-----------------------------------------------------------
Fitch Ratings has affirmed DME Ltd's Long-Term Issuer Default
Rating (IDR) at 'BB+' with Stable Outlook. Fitch has also affirmed
DME Airport Designated Activity Company's USD350 million loan
participation notes due 2021 and USD300 million loan participation
notes due 2023 at 'BB+' with Stable Outlooks.

DME benefits from growing, moderately volatile, largely origin &
destination (O&D) and leisure-dominated traffic from the large
Moscow catchment area. De-regulated tariffs provide pricing
flexibility, although this is somewhat constrained by the
competitive Moscow airport market. The ongoing expansionary plan is
at a final stage and the expected decrease in medium-term
investments should be beneficial to the group's leverage profile.

Under Fitch's revised rating case, the group's leverage forecasts
remain relatively low compared with international peers. However,
the weak debt structure that is subject to refinancing and FX risk,
coupled with corporate governance and political, legal and
regulatory uncertainties constrain the ratings.

KEY RATING DRIVERS

Large Catchment Area With Strong Traffic Growth: Revenue Risk
(Volume) – Midrange

DME benefits from a large catchment area of Moscow that generates
growing O&D traffic (five-year CAGR of 6% and 98 million pax in
2018). The market is highly competitive as DME faces competition
from Sheremetyevo airport (SVO), which hosts Russia's national flag
carrier Aeroflot, and Vnukovo airport (VKO). DME lost its
leadership of the Moscow aviation market in 2015 with its market
share declining to 30% in 2018 from 39% in 2015. Its large domestic
and international destination network is served by a diversified
mix of airlines where S7 is the main airline group, accounting for
around 40% of the airport's traffic.

Competition and Limited Track Record of Liberalised Tariff: Revenue
Risk (Price) – Midrange

DME's revenue structure is well-diversified as the airport provides
a comprehensive range of services. In early 2016, the regulation of
aviation services under a dual-till regime was lifted and DME can
now set tariffs freely. However, the track record of operations in
the liberalised regime is limited and competition among Moscow
airports is increasing. Fitch believes the Russian national
regulator, Federal Antimonopoly Service, could re-introduce a
regulated tariff system if it regards any future price increases as
excessive.

Ambitious Investments at Final Stage: Infrastructure Renewal –
Midrange

DME's runway capacity is sufficient for current operations and
growth. Substantial investment in the expansion of the terminal
capacity is at the final stages. Capital expenditure is expected to
be scaled down significantly after 2019. Most future outlays are
flexible and can be postponed if needed. DME used cash flows from
operations and the proceeds from debt issuance to fund expansion
capex.

Limited Protection and Refinancing Risk: Debt Structure – Weaker

The notes are effectively structured as corporate unsecured debt.
The notes are fixed-rate with bullet maturities and bear
foreign-exchange risk. Reasonable leverage, a history of accessing
capital markets and established banking relationships mitigate
refinancing risk. There is a natural hedge through a portion of
revenue being in US dollars or euros, which lowers foreign-exchange
risk. Covenants offer some but not comprehensive protection to
noteholders. There are no liquidity reserve provisions but DME has
historically maintained prudent levels of cash.

Financial Profile

The projected five-year average Fitch-adjusted net debt/EBITDAR is
3.3x with a maximum of 3.4x at the end of 2022 and stable profile
over forecast period.

Peer Group

DME compares favourably in terms of leverage with 'BBB' category
rated airports such as Brussels Airport Company S.A./N.V.
(BBB+/Stable), Manchester Airport Group Funding PLC (BBB+/Stable)
or Copenhagen Airports A/S (BBB+/Stable). However, DME has inherent
volatility associated with emerging markets as well as FX exposure
and refinancing risk. GMR Hyderabad International Airport Limited
(BB+/Negative) is also a close peer, albeit with higher projected
leverage due to being in the active phase of its capex programme.
However, DME has higher perceived traffic risk given recent traffic
declines. DME's peers operate in a more stable regulatory, legal
and political environment and have less exposure to competition.

RATING SENSITIVITIES

Future developments that may, individually or collectively, lead to
positive rating action include:

  - A projected five-year average Fitch-adjusted net debt/EBITDAR
below 2x under the rating case.

  - Improvement in the business risk profile due to, among other
factors, completion of Terminal 2, a longer track record of
operating within a liberalised tariff environment, an improvement
in corporate governance, and reduction in political, legal and
regulatory uncertainty.

Future developments that may, individually or collectively, lead to
negative rating action include:

  - A projected five-year average Fitch's adjusted net debt/EBITDAR
above 4x under the rating case, due to, among other factors, high
shareholder returns, falling operating cash flows or effect of
rouble weakening on debt.

  - Considering the group's largely bullet debt structure, the
rating is premised on the group's ability to maintain adequate
liquidity to cover its bullet debt maturities. Consequently,
failure to prefund its debt maturities well in advance may result
in negative rating action.

CREDIT UPDATE

Growing Competitive Pressure

Following the end of the recession in Russia, in 2017 DME's traffic
increased 7.6% to 30.7 million. In particular, international
traffic grew strongly by 15%. The ban on flights to Turkey was
lifted at end-August 2016 while the ban on flights to Egypt (except
for regular flights to Cairo) is still in place.

Despite the continuing growth of Russia's economy and FIFA World
Cup, DME's 2018 performance was negative with traffic falling 4.1%
to 29.4 million driven by competitive pressure. DME was affected by
airlines bankruptcies in the past (Transaero, Vim-Avia) and
carriers relocation to competing airports (mostly to VKO amid price
discounts), while FIFA World Cup traffic was mostly captured by the
national carrier Aeroflot (domiciled in SVO). As a result DME's
market share in Moscow aviation hub decreased to 30% in 2018 from
39% in 2015.

Financial Performance

In 1H18, revenue reached RUB19.8 billion, an increase of 7.8% yoy.
However, EBITDA increased at a lower pace by 2.5% yoy to RUB6.2
billion in the same period. The increase in staff costs and
maintenance costs in the wake of Terminal 2 launch diluted margins.
The trailing 12 months EBITDA as of 1H18 was RUB14.2 billion and is
in line with Fitch's expectations. The covenanted consolidated net
debt/EBITDA stood at 2.5x and 3.1x at end-2017 and at 1H18,
respectively.

Expanding Capacity

Construction of Terminal 2 (25 millon-30 million pax capacity) to
accommodate international flights and increase the airport's
overall capacity started in 2015. Fitch understands that phase 1
will be commissioned by end-2019-mid-2020, subject to the progress
on Runway 2 construction. Runway 2 and aprons construction, which
are the government's responsibility, were stalled by the bankruptcy
of the contractor, which is expected to be replaced by summer 2019.
Full completion of Runway 2 is rescheduled for 2020.

Fitch Cases

Fitch's rating case assumes passenger volumes to grow
conservatively on average by 0.9% in 2019-2023. In its rating case,
the addition of new terminal in 2019-2020 and development of other
commercial offerings will lift commercial revenues by 3% on average
annually in 2019-2023. Under the rating case, projected
Fitch-adjusted net debt/EBITDAR (five-year average/maximum) is
3.3x/3.4x while net debt/EBITDA is 3.0x/ 3.1x.

Asset Description

DME operates Domodedovo Airport, one of the three main airports in
Moscow. DME Airport Designated Activity Company, formerly DME
Airport Limited, an Irish SPV, is the issuer of the notes, with the
proceeds on-lent to the borrower, Hacienda Investments Ltd
(Cyprus).The loans are guaranteed by the holding company DME and a
majority of DME operational subsidiaries on a joint and several
basis. The group owns the terminal buildings and leases the runways
and other airfield assets from the Russian government.



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

TURKEY: S&P Affirms B+ FC Sovereign Credit Rating, Outlook Stable
-----------------------------------------------------------------
On Feb. 15, 2019, S&P Global Ratings affirmed its unsolicited
long-term foreign currency sovereign credit rating on Turkey at
'B+' and its unsolicited long-term local currency sovereign credit
rating at 'BB-'. The outlook is stable.

S&P affirmed the unsolicited short-term foreign and local currency
sovereign credit ratings at 'B'.

S&P also affirmed the unsolicited Turkey national scale ratings at
'trAA+/--/trA-1+'.

OUTLOOK

S&P said, "The stable outlook reflects balanced risks to our
ratings on Turkey over the next 12 months.

S&P said, "We could lower our ratings on Turkey if we see an
increasing likelihood of systemic banking distress with the
potential to undermine Turkey's fiscal position. Key indicators of
this could include a rise in corporate loan book default rates in
excess of our current forecast, difficulties rolling over banks'
foreign funding, or domestic deposit withdrawals.

"We could also lower our ratings if Turkey's economic growth
weakens materially beyond our projections, for example through a
combination of persistently high inflation and tight domestic
financing conditions.

"We could consider an upgrade if the government successfully
devises and implements a credible and transparent economic
adjustment program that bolsters confidence in Turkey's banks and
economy, while reducing balance-of-payments risks and bringing
inflation under control."

RATIONALE

S&P's ratings on Turkey remain constrained by its weak
institutions. There are limited checks and balances between
government bodies, raising questions about Turkey's ability to
address the challenging environment for its financial sector and
broader economy. Following the June 2018 elections, power remains
firmly in the hands of the executive branch, with future policy
responses difficult to predict.

As capital inflows into Turkey dried up last year, the lira
weakened substantially and the historically high current account
deficit was forced into surplus. Imports fell notably as domestic
purchasing power reduced in foreign currency terms.

Despite the current account shifting into surplus, S&P believes
Turkey's balance-of-payments risks remain elevated and therefore
constrain the sovereign ratings. This is principally due to the
need to refinance a high stock of external private sector debt,
which S&P estimates amounts to about 40% of 2018 GDP. The repayment
schedule for this debt is front-loaded with almost half maturing in
the next 12 months. S&P considers this a risk given what it views
as only limited foreign exchange reserves at the Central Bank of
the Republic of Turkey (CBRT).

The ratings remain supported by Turkey's comparatively low net
general government debt burden, thanks to past economic policies.
S&P thinks the government still has some fiscal flexibility that
should help absorb the consequences of an ongoing economic
adjustment. Nevertheless, a combination of support for
public-private partnerships, weaker economic growth, and possible
external deleveraging in the private sector could rapidly erode
what appears to be a sound public balance sheet.

Institutional and Economic Profile: Turkey will feel the
consequences of the 2018 currency crisis with output contracting
and high inflation this year

-- S&P expects the Turkish economy to contract by 0.5% this year,
although there are major uncertainties surrounding this forecast.

-- Weak growth dynamics are mainly due to domestic demand. Both
consumption and investments will reduce while net exports make a
positive contribution to growth.

-- Turkey's institutional environment remains weak, with limited
checks and balances. Turkey is gearing up for the March 2019 local
elections and S&P doesn't expect any reform or policy initiatives
until these are over.

Turkey has entered a period of stagflationary adjustment and S&P
expects GDP to contract by 0.5% in real terms in 2019. This will
mark the first full-year output contraction since 2009. It follows
a period of overheating of the domestic economy, which abruptly
ended with the currency crisis in August 2018. Even though
financial market sentiment has improved and the lira has regained
some ground since then, S&P still expects the consequences will
weigh on Turkey's economic prospects in the near to medium term.

High-frequency indicators point to a pronounced slowdown in
economic activity. According to Turkstat, the Turkish economy grew
by 1.6% year-on-year in the third quarter of 2018, a major
deceleration compared to 6.0% growth in the first half of the year.
S&P estimates that the economy contracted by 2.5% in the final
months of last year. Several indicators inform its view:

-- A decline in domestic orders of manufacturing firms in the
fourth quarter of 2018;

-- Industrial production and PMI indices hitting multi-year lows;

-- Reduced consumer confidence; and

-- A substantial decline in imports.

S&P said, "We expect that domestic demand will remain weak and will
be a major contributor to Turkey's weak growth performance this
year. Following extreme currency volatility in 2018, inflation
spiked--surpassing 25% in October 2018 and marking a 15-year high.
Even though it has now somewhat reduced, inflation remained above
20% in January 2019. As high inflation will erode incomes, we
believe that consumption will likely decline by 2% this year. In
our view, government initiatives to temporarily boost domestic
demand through lower taxes will have only a limited effect. In
addition, we believe that headline inflation likely underestimates
the full impact on consumer purchasing power. For instance, food
inflation exceeded 30% toward the end of 2018, straining the
budgets of lower income households.

"We also forecast that investments--an important previous growth
driver--will decline by 5% this year. The Turkish corporate sector
remains in a short foreign-exchange position that the CBRT
estimates at about 30% of GDP. Consequently, last year's pronounced
exchange-rate weakening has increased the burden of servicing this
debt. Combined with much tighter domestic financing conditions,
partly due to CBRT interest rate hikes, there is limited scope for
investment activity. Funding pressures are exacerbated by weak
consumer demand, which limits firms' ability to pass higher prices
to domestic consumers. Companies also face cost pressures,
including a 26% hike in the minimum wage.

"Our base-case economic scenario, described above, is largely
unchanged from six months ago and remains subject to considerable
uncertainty. We currently project output contraction to be much
milder than the 5% recession Turkey experienced in 2009. This is
because, unlike 2009, external conditions are broadly favorable
this time around with Turkey's trade partners forecast to continue
growing. Net exports have so far supported economic dynamics,
cushioning subdued domestic demand. Should growth in Europe
decelerate or trade wars escalate materially, the adjustment for
the Turkish economy could prove more painful.

"We also see some potential upside stemming from a more consistent
government policy response to Turkey's economic challenges. This
could happen after the March 2019 local elections."

Beyond 2019, we believe Turkey's growth prospects could improve.
S&P said, "We note that Turkey's economy is large and diverse,
characterized by a highly flexible SME sector, a strategic
geographic location, and a young and growing population. Some
export-oriented sectors, particularly tourism, have been doing well
recently because of competitiveness gains due to the weaker lira.
Nevertheless, we expect recovery from the current downturn to be
slower compared to pre-2018 growth rates. In our view, absent
substantial reform momentum coupled with reduced political
uncertainty, faster recovery will be difficult to achieve."

Turkey's institutional arrangements have eroded substantially in
recent years and are a major constraint for the sovereign ratings.
In last year's June presidential and parliamentary elections, the
president and the Adalet ve Kalkinma Partisi (AKP)-led coalition
secured a victory that was the final chapter in Turkey's transition
to an executive presidential system. As a consequence, we expect
the executive branch will dominate future decision-making,
sidelining the few checks and balances that had remained in place,
including, by potentially increasing, off-balance-sheet financial
activities.

S&P said, "In our view, this high centralization of power has left
Turkey ill-prepared to deal with the fallout from last year's
balance-of-payments shock. We view the response so far to last
year's currency crisis as ad hoc, rather than coordinated and
consistent. The focus has been on addressing the symptoms, rather
than the underlying causes, of Turkey's economic problems. The
important exception to our assessment that the policy response has
been reactive, rather than proactive, was the CBRT's decision to
hike the one-week repurchase agreement (repo) rate by 6.25
percentage points on Sept. 13, 2018. We consider this move to have
been instrumental in stabilizing the exchange rate."

S&P said, "Turkey has been in a constant electoral cycle over the
last three years and remains so: local elections are coming up in
March 2019. Given the likely tight race in at least some of the
constituencies, including Ankara, we foresee possible further
concessions to the electorate as the ruling AKP seeks to shore-up
support. To this end, we note the government's decision to
temporarily lower some taxes until the end of March 2019 alongside
a hike in the minimum wage. We do not expect any major policy or
structural reform initiatives until the local elections are over.
We also do not anticipate that Turkey will sign up to an
International Monetary Fund program, before or after the upcoming
polls, except if far more difficult external financing conditions
arise.

"We continue to see risks stemming from Turkey's international
relations. Even though interactions with the U.S. have improved
following the earlier release of a detained U.S. citizen, multiple
points of contention remain. U.S. policy toward Turkey has also
become less predictable than in the past. Tensions between the two
countries include Turkey's alleged role in allowing Iranian
counterparties to evade American sanctions including by using
state-owned financial institutions, the Turkish government's
decision to purchase S-400 surface-to-air missiles from Russia, and
its open support of the regime of Venezuelan President Maduro, whom
the U.S. has openly denounced.

Regional security also remains a concern. Apart from geopolitical
repercussions, any deterioration could decrease tourism flows. This
could happen if tensions in Syria were to escalate or if there was
an increased domestic terrorist threat, for instance, due to
Turkish military operation against the YPG in Syria.

Flexibility and Performance Profile: Despite a turnaround in the
current account, balance-of-payments risks remain elevated, but the
government still has fiscal room to maneuver  

-- Despite the turnaround in the current account,
balance-of-payments risks persist due to the sizable stock of
external debt with a front-loaded maturity schedule.

-- In S&P's view, the authorities still command fiscal space given
that net general government debt was 26% of GDP at end-2018, which
is favorable in a global comparison.

-- S&P forecasts inflation to remain at a 15-year high, averaging
16% in 2019.

Last year's currency crisis notably affected Turkey's balance of
payments. Following years of sizable deficits (averaging 5% of GDP
in 2013-2017), the current account switched to a surplus in a
matter of weeks in August 2018. This primarily reflects the
substantial depreciation of the lira, which saw imports collapse.
It also reflects the reduced availability of external financing.

S&P said, "Rather than a rebalancing, we view this as a forced
disruptive adjustment pointing to a major contraction in domestic
economic activity. Although the lira exchange rate had recovered
some ground by end-2018, imports remained depressed and the current
account continued to post monthly surpluses through November
(latest available data). We note that sudden and pronounced swings
in external flows from deficit into surplus have historically been
associated with major economic contractions, not only in Turkey,
but also in other regions and countries (Eastern Europe, Iceland,
and elsewhere)."

Despite imports providing the main impetus behind the current
account turnaround, export performance was a bright spot in 2018
with volumes growing by an estimated 7%. In 2018, tourism arrivals
hit an all-time high. One major question for 2019 is whether the
pace of export growth can continue, particularly if the economies
of Turkey's West European trade partners exhibit a sharper
deceleration than we presently anticipate.

Despite a significant turnaround in Turkey's external flows, S&P
still views balance-of-payments risks as elevated. This is mainly
because years of past external shortfalls have led to a substantial
increase in private sector external debt to 40% of GDP at the end
of last year, from 25% in 2010. This accumulated debt is
characterized by a front-loaded repayment schedule, with almost
half maturing over the next 12 months. Of this, close to 60%
pertains to the country's banking system.

S&P said, "We previously highlighted downside risks to banks'
foreign debt refinancing (see "Turkey Long-Term Foreign Currency
Rating Lowered To 'B+' On Implications Of Extreme Lira Volatility;
Outlook Stable," published Aug. 17, 2018). Positively, and in line
with our base case, banks were able to roll over much of their
external debt coming due last autumn, even though the cost has
risen substantially. According to CBRT estimates, the rollover
ratio declined to 80% by the end of last year. That said, we
understand that some banks did not refinance maturing debt, not
because they lost market access but because credit demand was
rapidly declining and the outlook for lending was weakening.

"We currently expect some deleveraging in the banking sector in
2019 with an external debt rollover ratio of 80%-90% for the rest
of the year. Downside risks remain, for example if domestic
residents lose confidence in the financial system or if foreign
financing dries up, significantly reducing rollover ratios. If this
happens, Turkey's economic adjustment will likely be more
pronounced than the 0.5% output contraction we are currently
projecting. The exchange rate would then likely further correct,
while consumption and investment would sharply decline.

"We view the CBRT's buffers to counter a potential deterioration in
balance of payments as limited. Although headline foreign exchange
reserves amounted to US$93 billion at the end of 2018 (12% of GDP),
a large proportion pertains to the CBRT's liabilities in foreign
currency to the domestic banking system. This reflects the required
reserves on banks' foreign-exchange deposits as well as liabilities
under the reserve option mechanism. The latter allows commercial
banks to maintain some of their required reserves related to
Turkish lira deposits in foreign currency. Excluding these, we
estimate the CBRT's net reserves are a much smaller, US$40 billion
(5% of GDP)."

In contrast to the balance of payments, Turkey's fiscal position
remains supportive of the sovereign ratings. Historically, the
government ran recurrent fiscal deficits, but these have been
contained, averaging only slightly higher than 1% of GDP over the
last five years. S&P said, "We estimate that last year's deficit
was 2.5% of GDP, lower than we previously forecast. We expect a
mild widening of the deficit this year, mainly due to weaker
economic growth." Nevertheless, shortfalls will remain contained at
below 3% of GDP over the forecast horizon. Consequently, net
general government debt should hover around 25% of GDP, which
compares well globally.

S&P said, "Beyond the headline figures, Turkey's underlying fiscal
position has somewhat deteriorated in our view. We note that last
year's stronger fiscal outturn was bolstered by a series of one-off
revenue measures including the tax amnesty and the introduction of
permission for citizens to opt out of military service, for a fee.
This trend has continued in 2019. For example, the CBRT decided to
bring forward the payment of a large dividend (1% of GDP). The CBRT
made a profit in 2018 because foreign-exchange reserves were
revalued in local currency terms, owing to the lira's depreciation.
We also see risks from various potential government
off-balance-sheet commitments, such as those stemming from
public-private partnerships (PPPs). We understand the PPPs are
administered by different government bodies and there are no
consolidated published statistics. It is, however, unlikely that
the maximum theoretical government exposure to PPPs and guarantees
extended exceeds 10% of GDP.

"Despite the aforementioned risks, the government still has policy
space to leverage the public balance sheet if needed, in our view.
Such a need could arise, for example, if the government were called
to support parts of the banking system through recapitalizing
individual institutions or undertaking a broader sector clean-up by
moving nonperforming assets to a "bad bank." In our view, risks to
the stability of the Turkish banking system have risen
substantially over the last 12 months. These stem from more
difficult domestic and foreign financing conditions, and a likely
deterioration in asset quality. We revised our assessment of
contingent liability risks to the state from the banking system to
moderate from limited in August 2018.

"So far the authorities have not provided any concrete plans as to
how they might deal with a deterioration in bank asset quality,
although we understand that the "bad bank" option has not been
ruled out. The New Economy Program published in September 2018
lacked specific details on resolving banking sector problems bar a
reference to an asset quality review. Such a review was undertaken
by Turkey's Banking Regulation and Supervision Agency (BRSA) in
December, but the details have not been made public. Official
nonperforming loans are around 4.5% of system loans, which we think
underestimates existing credit risk. We forecast that problem loans
will increase, rising to double digits over the next two years.

"In our view, Turkey's monetary policy has been historically
ineffective in managing inflation. The CBRT has never met the 5%
medium-term target that was introduced in 2012, while the real
effective exchange rate has shown substantial swings. The CBRT has
faced increasing political pressure in recent years, which in our
view is impairing its effectiveness, often by delaying timely
responses to rising inflation, which soared to 25% in October 2018
and has remained above 20% since then."

Although the CBRT has maintained the key repo at a very high 24%
since September, questions remain over its future policy direction.
S&P said, "We expect the CBRT to start reducing interest rates this
year as inflation declines, but long before it approaches the
target rate. In our view, political pressure for doing so will
likely persist, particularly amid a slump in economic activity. We
also note that the CBRT declared an extraordinary early dividend of
Turkish lira (TRY) 33.7 billion (around 1% of GDP) payable to the
Treasury. It remains unclear whether this payment could help fund
additional short-term fiscal stimulus, but we anticipate that it
could flatter headline fiscal data this year."

The long-term local currency rating on Turkey is one notch higher
than the long-term foreign currency rating. S&P said, "In our view,
the floating exchange rate regime, comparatively developed local
currency capital markets, and the fact that about 50% of government
debt is denominated in local currency and almost entirely held
domestically imply a lower default risk on Turkey's
lira-denominated sovereign commercial debt compared to its foreign
currency-denominated debt. This is also premised on our expectation
that Turkey will continue to fund a large share of its financing
needs in the local currency debt capital markets and that the
process will be transparent and driven by market forces."

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
  Ratings Affirmed

  Turkey
   Sovereign Credit Rating
    Foreign Currency *                        B+/Stable/B         

    Local Currency *                          BB-/Stable/B         

   Turkey National Scale *                    trAA+/--/trA-1+     
   Transfer & Convertibility Assessment *     BB-        


  * Unsolicited ratings with issuer participation and access to
internal documents.


YUKSEL ENERJI: Declared Concordatum After Rescue Talks Fail
-----------------------------------------------------------
According to Bloomberg News' Taylan Bilgi, Yuksel Enerji, a unit of
Turkey's Yuksel Holding, has declared concordatum, Sozcu newspaper
reports, citing company chairman Emin Sazak.

Bloomberg relates that the newspaper cites Mr. Sazak as saying, "We
couldn't agree with our counterparty on restructuring."

"Only one of the creditors didn't accept restructuring.  We plan to
repay our debt in a reasonable time frame."

The court in Ankara appointed concordatum officials to the company,
Bloomberg discloses.



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

INTERPIPE: Postpones Deadline for Lenders to Join Lockup Agreement
------------------------------------------------------------------
According to Concorde Capital, a Feb. 13 report by distressed debt
information provider Reorg Research states that Ukraine's largest
pipe producer Interpipe has postponed the deadline for its lenders
to join the lockup agreement to Feb. 20 from Feb. 8.

Reorg Research said Interpipe and a coordinating lenders committee
signed the agreement on Jan. 11, Concorde Capital relates.

Reorg Research reported that in comparison with the mid-2018
proposition to the creditors, Interpipe hiked the coupon rate on
the new USD310 million six-year bond to 10.25% from 9.35%, Concorde
Capital notes.

Another change is the option for certain bank creditors to convert
their debt into either a new loan or the new bond, instead of only
into the new bond previously, Concorde Capital relays, citing Reorg
Research.

Reorg Research, citing a source close to the situation, said
Interpipe's restructuring plan has sufficient support to be
implemented by way of an English scheme of arrangement or through a
consent solicitation, Concorde Capital discloses.



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

EG GROUP: Fitch Puts B+(EXP) Rating to AUD400M Sr. Sec. Term Loan B
-------------------------------------------------------------------
Fitch Ratings has assigned EG Group Limited's (EG) new AUD400
million senior secured term loan B facility an expected issue
rating of 'B+(EXP)' with a Recovery Rating of 'RR3' (60%). The new
senior secured term loan B facility will rank pari passu with all
existing senior secured debt within the group.

Fitch has also affirmed EG's Issuer Default Rating (IDR) at 'B'
with Stable Outlook. The agency has also upgraded EG's existing
senior secured debt to 'B+'/'RR3' from 'B'/'RR4' and affirmed the
second lien debt at 'CCC+'/'RR6'.

The new loan will part-finance EG's AUD1.7 billion acquisition of
540 Woolworths Australia (WA) petrol stations and convenience
stores across Australia. This acquisition further increases EG's
geographical diversification, while making the group the largest
provider of fuel by volume on the Australian continent.

The acquisition finance is likely to be completed with either
further Australian-dollar senior secured debt and/or a combination
of US dollar, Australian dollar and/or euro-denominated senior
secured term loans or high-yield senior secured bonds.

Fitch forecasts the transaction to be broadly neutral to leverage,
in particular if EG is successful in achieving its targeted cost
synergies, hence resulting in the affirmation of the IDR at 'B'.
Fitch acknowledges the reduction in execution risks with EG, having
almost fully integrated the acquisitions conducted in Europe and
U.S. in 2018, and solid deleveraging capabilities derived from its
enlarged scale and enhanced free cash flow (FCF) generation
prospects.

Fitch expects to assign the final rating upon the receipt of final
documentation being in line with that already received.

KEY RATING DRIVERS

Leading Global PFS Operator: The IDR reflects EG's position in
western Europe and the US as a leading petrol fuel station (PFS)
and convenience retail/food-to-go (FTG) operator, following the
acquisition of Esso petrol stations in Germany and Italy and the
Kroger Co. and Minit Mart US acquisitions in 2018 These
acquisitions together with the purchase of WA's 540 PFS in
Australia in 2019 will push fuel sales volumes to close to 20
billion litres per annum and Fitch expects EG should benefit from a
better negotiating position on fuel contracts with oil majors in
2019 and beyond.

Changing, Sustainable Business Model: EG has transformed itself
from a small entrepreneurial group into a major global fuel and
retail operator in less than three years, with over 5,000 PFS. The
group has been acquisitive in 2018 as the PFS sector consolidates.
Although the group engaged in significant acquisition activity in
2018 Fitch understands from management that the group intends to
consolidate its activities in 2019, while developing its
convenience and FTG formats both in Europe, the US and Australia
where there is greatest potential. EG will also now focus on
moderately de-leveraging its balance sheet in 2019 towards a target
net debt/EBITDA of around 4.0x to 4.5x by end 2020/ beginning 2021.


Increased Scale, Diversification Benefits: Fitch sees the
geographical diversification and increase in scale as critical,
given EG's flat-to-declining fuel volumes, broadly fixed fuel
margins and growing alternative fuel usage. Fitch believes EG will
follow a similar convenience/FTG-driven strategy in Australia.

Fitch expects the WA acquisition to add around AUD5 billion (EUR3.1
billion) of revenue to EG in this coming year. EG is confident it
can integrate the new sites into its global organisation and
achieve synergies of around AUD60 million, which together with the
revised fuel supply contracts, could increase Australian EBITDA to
over AUD300 million.

Group EBITDA post-WA completion should be around a Fitch-estimated
EUR1.05 billion p.a. with a strong pro-forma FCF of between 1% and
2% of sales. This should provide support for the de-leveraging
strategy outlined for 2019 and 2020.

Good Record Integrating Acquisitions: The enlarged scale and market
reach have required changes and upgrades to management's
organisation and control functions across the wider group. However,
Fitch sees EG's business model as sustainable and management has a
history of growing the business, integrating acquisitions swiftly
and efficiently, identifying significant margin improvements and
cost-saving opportunities from the integration of its targets.

Growing Convenience, FTG Segments: EG's strategy is to develop the
convenience retail and FTG offer on its sites to capture
above-average growth in the sector as "time-short" consumers
increasingly want to shop more frequently and more easily or closer
to home or office. It also enables the group to offset stagnation
in fuel volumes and gross profits from fuel sales.

High, but Sustainable, Leverage: Fitch estimates that the entirely
debt-funded WA acquisition should be neutral to leverage (pro-forma
FFO lease adjusted gross leverage at around 7.0x and fixed charge
cover between 2.1x and 2.5x). With nearly EUR120 million of cost
savings achieved in 2018 and further cost savings identified at WA,
the group now has improved headroom at the current ratings, should
the acquisition of WA incur additional costs and reduce cash flows
for de-leveraging.

Positive FCF: Fitch expects de-leveraging to be moderate in the
next three years, and FCF should remain positive, despite
convenience/ FTG development capex and high interest payments
including new currency hedging costs. While Fitch expects the group
to continue generating positive FCF from 2019 (around 1%- 2% of
sales), EG is still somehow vulnerable to adverse events such as a
downturn in consumer spending in Europe and the US or a sharp rise
in fuel costs, as it might not be able to pass on the full increase
to customers.

Capex Fuels Diversification and Margins: Fitch projects that once
the WA acquisition is complete, EG's FCF is likely to be slightly
constrained by maintenance and growth capex of on average EUR190
million-EUR200 million a year for the enlarged group. Capex will
fund the opening of new sites, the conversion of the most promising
stations from company-owned and dealer-operated (CODO) to
company-owned and -operated (COCO) and support the roll-out of EG's
convenience retail/FTG strategy, as well as increase the group's
weighted average operating margins. Fitch expects that the US and
WA acquisitions will lead to a material increase in development
capex but with an accretive impact on the group's profit margins

DERIVATION SUMMARY

EG's 'B' IDR reflects its leading market position as an independent
petrol station operator in Europe and the US, positive FCF and
diversification towards more profitable non-fuel retailing and FTG
segments. However, with the two US and Australian acquisitions
funded entirely by debt, Fitch expects pro-forma FFO adjusted gross
leverage to remain around 7.0x by end-2019, which is high for the
rating. The large Kroger convenience store acquisition should also
be accretive on operating margins, although there is some moderate
execution risk with the Australian acquisition.

EG's business is broadly comparable to that of other peers that
Fitch covers in its food/non-food retail rating and credit opinions
portfolios, although the COCO operating model should provide more
flexibility and profitability for EG. With around 300 highway
sites, EG can also be compared with motorway services group Moto
Ventures Limited (B/Stable) and to a lesser extent with emerging
markets oil products vertically integrated storage/distributors/PFS
operators such as Puma Energy Holdings Pte Limited (BB/Negative)
and Vivo Energy Plc (BB+/Stable). Moto has slightly lower leverage
than EG and benefits from an infrastructure-like business profile.
It also operates in a regulated market with high barriers to entry
that Fitch believes are more defensive than that of EG. In
contrast, EG is more geographically diversified with exposure to
both the US and Australian markets and a strong market share in
seven western European countries, against only one in Moto's case.

KEY ASSUMPTIONS

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

European business assumptions:

  - Slight decline in fuel volumes, with stable gross margins;

  - Convenience retail sales to grow 2%-3% a year, including new
sites roll-out with stable gross margins of 32%-36%, depending on
the country;

  - Like-for-like FTG sales to increase 1% on top of new sites
roll- out with stable gross margins above 60%;

  - Stable overall EBITDA margin around 4%-5% of sales based on
current fuel prices;

Kroger carve-out assumptions:

  - USD4 billion revenue;

  - Fully debt-funded;

  - Neutral working capital;

WA assumptions:

  - AUD5.0 billion revenue; with fuel margins of EUR8.8cpl;
acquisition entirely debt- funded.

Fitch's assumptions also include:

  - EUR250 million additional cash spent on acquisitions a year
from 2019 to 2021 at 10x EBITDA multiple fully funded by debt;

  - EUR70 million a year maintenance capex;

  - Growth capex of around EUR125 million a year to fund new site
openings, COCO conversions and convenience retail and FTG roll-out
in Europe and the US;

  - No dividends;

  - 1.13EUR/GBP, 1.23EUR/USD exchange rates

KEY RECOVERY ASSUMPTIONS

According to Fitch's bespoke recovery analysis, higher recoveries
would be realised using a going-concern approach, despite EG's
reasonable asset backing. Fitch expects a better recovery by
preserving the business model, as opposed to liquidating its
balance sheet, as this reflects EG's structurally cash-generative
business.

In a liquidation scenario, the highway sites would constitute the
majority of asset value but would not be sufficient against the
recovered value of a going-concern scenario. The industry is
concentrated and undergoing further consolidation in most of EG's
geographies (Italy, Germany, UK and France) as a result of the
decline in fuel volumes of around 1% a year.

Fitch has applied a discount of 25% to the LTM 2018 Fitch-estimated
EBITDA (adjusted for the Esso, Dutch and US and Australia
acquisitions) to derive a post-restructuring EBITDA of around
EUR790 million. Fitch estimates that such discount would lead to
the group becoming FCF-neutral, while paying its cash interest,
distressed corporate tax and capex.

In a distressed scenario, Fitch believes that a 5.5x multiple
reflects a conservative view of the weighted average value of EG's
portfolio. By comparison, Moto's 7.5x distressed multiple reflects
the regulated nature of the market, the high quality of the
company's highway sites and infrastructure-like cash-flow
generation profile.

As per its criteria, Fitch assumes EG's revolving credit facilities
(RCF) and letter of credit (LC) facility to be fully drawn and
takes 10% off the enterprise value to account for administrative
claims.

These revised assumptions result in recovery expectations of 60%,
consistent with 'RR3', and a rating of 'B+' for senior secured
creditors, including the planned debt to part finance EG's
Australian acquisition. However Fitch continues to expect no
meaningful recoveries for the group's second-lien debt resulting in
0% recoveries and a rating of 'CCC+'/'RR6'.

RATING SENSITIVITIES

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

  - Evidence of success in the roll-out strategy of convenience
retail and FTG sites in Germany and Italy, leading to EBITDA margin
rising sustainably above 5%;

  - FFO fixed-charge cover above 2.5x on a sustained basis;

  - Sustainable EBITDA growth leading to FCF generation above 3% of
sales; and

  - FFO lease-adjusted gross leverage below 5.5x through the cycle,
due to additional profits from new convenience retail/FTG outlets
and/or rising fuel operating profits.

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

  - FFO lease-adjusted gross leverage sustainably above 7.5x;

  - FFO fixed-charge cover below 2x on a sustained basis; and

  - Significant decline in fuel volumes and convenience retail
sales and/or margins leading to the EBITDA margin falling below 3%
based on current fuel prices.

LIQUIDITY

Adequate Liquidity: EG had around EUR225 million in cash in
December 2018, which was sufficient to fund next year's development
capex (around EUR150 million) related to new site openings, COCO
conversions and convenience retail/FTG diversification. EG's
liquidity has also benefited from two RCF facilities (USD150
million and GBP250 million) and a EUR385 million letter of credit
facility. Changes in working capital (including longer payment
terms for fuel supplies) following the completion of the Minit Mart
and WA acquisitions should be broadly positive for the group due to
the upfront nature of payments by customers (fuel, convenience
retail and FTG).

EG GROUP: S&P Affirms B Rating, Alters Outlook to Stable
--------------------------------------------------------
U.K. petrol station operator EG Group intends to issue A$1.675
billion-equivalent of senior secured debt to finance the
acquisition of 540 fuel stations in Australia from Woolworths.

S&P Global Ratings is revising its outlook on parent company, EG
Group Ltd., to stable from negative, and affirming the 'B' rating.

At the same time, S&P is assigning a 'B' rating to the proposed
A$500 million senior secured term loan to be issued by EG Australia
Pty Ltd. as part of the petrol stations' purchase.

The outlook revision reflects EG Group's successful integration of
the five acquisitions it recently closed in 2018. Successful
integration has resulted in substantially increased earnings in the
last two quarters. This provides additional visibility over future
operating performance and contribution from the acquired
businesses, thereby significantly abating execution risk, in S&P's
view. In turn, this also supports its expectations of improved cash
generation prospects and the group's consequent deleveraging in
2019.

S&P said, "Following the high transaction costs related to the 2018
acquisitions, we estimate that EG Group's pro forma S&P Global
Ratings-adjusted debt to EBITDA including closed and planned
acquisitions was around 8.5x (or just above 7.5x excluding
preferred shares) in 2018, and that it will deleverage to 7.0x (or
just above 6.0x excluding preferred shares) in 2019. This
represents a modest improvement in the pace of deleveraging in
2019-2020 relative to our previous forecast, and should bring
credit metrics back in line with the rating.

"That said, our rating remains constrained by still quite high debt
levels built on the numerous debt-funded transactions in Italy, the
Netherlands, Germany, the U.S., and Australia, which leaves the
group with limited financial headroom to absorb any unexpected
operating underperformance. The group acquires well-established
existing sites which are already operational, as well as developing
new ones, and EG Group's progress on integrating its recent
acquisitions has in our view decreased the execution risk related
to the integration of the new businesses.

"The earnings from the new sites will initially be dampened by the
associated integration costs and the substantial cash financing
charges. The revision in our outlook therefore incorporates our
expectation that the group will make fewer large debt-funded
acquisitions over the next few years and that any new
acquisition-related transaction and integration costs will be
balanced by the now-higher operating earnings base, enabling the
group to better absorb high extraordinary costs.

"The acquisition of the Woolworths sites in Australia broadens the
group's geographic diversification and further increases the scale,
which we expect will support its negotiating power with the major
oil suppliers and could result in some modest appreciation in
margin compared with smaller competitors. Together with the earlier
acquired sites, it is also an opportunity to roll out additional
food-to-go sites that have proven to be a strong driver for
earnings and margin growth in EG Group's home market, the U.K.
These factors strengthen our view of the group's business profile,
which we believe is well positioned in comparison with peers and
competitors.

"The transaction has been approved by the Australian Competition
and Consumer Commission, and approval from the Foreign Investment
Review Board is expected imminently. In our view, the Woolworths
sites are well developed and enjoy an established convenience store
format, with sufficient scale to operate successfully in Australia.
In this new market, EG Group's planned roll out of additional
food-to-go sites over the long term will improve site-level
earnings and footfall, which also benefits the fuel sales per site.
We note that the decline in fuel volumes in 2018 within the
acquired Woolworths business, stemming from subdued demand
following strong increases in petrol prices and pricing missteps,
poses a potential risk for margins. However, we view positively the
recently renegotiated fuel supply agreement with Caltex, the main
supplier, which allows for a more competitive fuel pricing and
higher margins in 2019. We believe that the enlarged group will
benefit more from the greater regional diversification in its
earnings than from improved negotiation power, since Australian
fuel and retail supply is committed for the long term and is
organized separately from the rest of EG Group's regions."

The acquisitions will result in high S&P Global Ratings-adjusted
debt of about EUR8.0 billion in 2019, mainly comprising
approximately EUR6.2 billion of term loans and bonds, as well as
about EUR950.0 million of the present value of operating lease
commitments. S&P's adjusted debt and ratio calculations also
include the EUR700 million structurally subordinated and
pay-in-kind preferred shares issued above the restricted group and
maturing after the remaining financial debt.

The stable outlook reflects EG Group's prospects for rapid
deleveraging following the integration of its new businesses in
Australia, the U.S., Italy, Germany, and the Netherlands, as well
as a broadly stable fuel demand. S&P expects the group will rapidly
deleverage toward 7x on the back of earnings growth and substantial
FOCF generation in 2019-2020, thanks to a stable operating
environment and decreasing acquisition activity, at least relative
to the now enlarged group.

S&P said, "We could take a negative rating action within the next
12 months if the group experiences setbacks in the integration of
its acquisitions, it fails to realize expected synergies, or if
underlying operating performance weakens. If such a scenario
manifests, we could see the adjusted debt to EBITDA remaining above
8x in 2019, with the reported FOCF remaining negative. Downward
pressure could also build if further large debt-funded
opportunistic acquisitions also weaken the group's credit profile
to a similar extent.

"Due to very high debt levels and the fact that our base case
already envisions progressive deleveraging, we do not see any
rating upside over the next 12 months. However, we could take a
positive rating action if adjusted debt to EBITDA remains below 6x
on a sustainable basis on the back of the ongoing successful
integration of its recent acquisitions, improved earnings and cash
flows, and a balanced financial policy in relation to capital
expenditures, acquisitions, and shareholder returns."

EG Group Ltd. is the parent of the international petrol station,
convenience store, and food-to-go operator of the U.K.-based EG
Group, which operates in the U.K., France, Benelux, Germany, Italy,
and the U.S.

EG Group has grown rapidly in recent years on the back of numerous
recent acquisitions in the U.S., Germany, Italy, and Australia. The
company operates nearly 4,700 fuel stations or convenience retail
sites, and this number will increase to around 5,200 following the
Woolworths acquisition in Australia.

FLYBMI: Loganair Takes Over Three Aberdeen Routes After Collapse
----------------------------------------------------------------
Kirsty McKenzie at Daily Record reports that Loganair has announced
that it will be stepping in to secure all key air routes from
Aberdeen, following the news that airline Flybmi had filed for
administration.

The East Midlands-based airline confirmed on Feb. 16 that it had
suspended all future flights as announced and that the company was
filing for administration, Daily Record relates.

According to Daily Record, customers of the airline, which operates
three flights in and out of Aberdeen, were told not to come to the
airport unless they have re-booked flights with alternative
providers.

Now, Loganair has taken over all three key air routes from Aberdeen
to Bristol, Oslo and Esbjerg, Daily Record discloses.

Flights will start on March 4 and be on sale from Feb. 18, Daily
Record states.

Bmi Regional employed a total of 376 employees based in the UK,
Germany, Sweden and Belgium.

The airline cited uncertainty created by Brexit as one of their
reasons behind the sudden collapse, Daily Record notes.


IVC ACQUISITION: Fitch Assigns Final LT IDR at B, Outlook Stable
----------------------------------------------------------------
Fitch Ratings has assigned IVC Acquisition Topco Limited (IVC) a
final Long-Term Issuer Default Rating (IDR) of 'B' with a Stable
Outlook. In addition, Fitch has assigned the senior secured loans
issued by IVC Acquisition Limited a final rating of 'B+'/RR3. The
rating actions follow the receipt and review of the final bond
documentation as part of IVC's recapitalisation, including the
completion of the holdco company restructuring in line with its
assumptions and which does not affect the restricted group.

The ratings are supported by satisfactory market positions as an
emerging pan-European veterinary care business and by strong sector
fundamentals. However the rating is constrained by high opening
leverage, limited track record of the business in its current form,
as well as moderate execution risks around the group's business
integration and future external growth. The Stable Outlook reflects
Fitch's view of some deleveraging capacity driven by solid sales
growth prospects, productivity improvements, as well as
satisfactory free cash flow (FCF) generation.

KEY RATING DRIVERS

Defensive, Diversified, Customer-Centric Operations: The rating is
underpinned by IVC's satisfactory market position as an emerging
pan-European veterinary care service business, with a strong
medical and customer focus. IVC's business plan centres around
growing economies of scale, consolidating the fragmented animal
health care market and creating regionally leading veterinary
chains across western Europe. These regional operations are
supported by common head office functions realising scale benefits.
Strong market positions in selective markets (UK & Nordics) and
scalable operations should, in its view, allow IVC to diversify the
business internationally, improving underlying profitability and
optimising its mix of service offerings.

Moderate Execution Risks: Fitch views execution risks associated
with implementing IVC's ambitious growth strategy as moderate,
given the limited track record of the group as a pan-European
business created only in 2017 in its current form. The centralised
head office function, including procurement and centralised
financial management, in particular, would benefit from strict
implementation of financial disciplines and controls in order for
existing regional operations to build up to a pan-European scale.
Positively, the group has demonstrated so far satisfactory
performance and a good track record in managing its expansion
strategy. Fitch views growing scale and consolidation benefits as
further upside to its rating case.

High Indebtedness, Deleveraging Prospects: The 'B' rating is
currently constrained by high financial indebtedness with opening
funds from operations (FFO) adjusted gross leverage just above
8.0x. Fitch views such leverage as elevated particularly given
IVC's currently limited track record as a pan-European group and
its assessment of moderate execution risk to strategically grow and
integrate the operations. Assuming a financially disciplined,
targeted, yet ambitious growth strategy, Fitch would expect some
moderate deleveraging as earnings and productivity increase on
organic and external growth, as well as on scale and cost benefits.
Fitch therefore forecasts FFO adjusted gross leverage trending
towards 7.5x by 2022.

Satisfactory Cash Conversion: The rating is further supported by
IVC's satisfactory free cash flow (FCF) generation, which Fitch
expects to remain at or above 5% over the next four years,
supported by modest working capital requirements and a low capital
intensity given the group's asset-light business model. Fitch also
projects FFO fixed charge cover at around 2.0x in its rating case,
indicating satisfactory financial flexibility for the 'B' rating.

Consolidation Potential, M&A-driven Growth: Fitch's rating assumes
an acceleration of IVC's 'buy-and-build' strategy, operating as
active consolidator in the fragmented European veterinary care
market. As such Fitch's rating case assumes, in line with
management guidance, a continuation and acceleration of bolt-on
acquisitions in 2019-2022, which could lead to additional funding
and liquidity requirements over the next four years. In Fitch's
view, a key prerequisite to successfully implementing such
acquisition strategy is a disciplined approach around asset
selection and enterprise value-to-EBITDA (EV/EBITDA) multiples
paid, so that the acquired assets could enhance the deleveraging
prospect of the wider group despite being debt-funded initially.

Unregulated, Defensive Business Risk Profile: Compared with human
health care services, animal care services remain unregulated, with
pet owners having to privately pay for treatments or via insurance
policies. Fitch nevertheless views IVC's business risk profile as
defensive, having proved fairly resilient to economic cycles,
offering scale benefits from the group'sleading market position and
potential to introduce retail principles to create customer
awareness and loyalty.

Above-average Recovery Prospects: The proposed senior secured debt
is rated 'B+', one notch above the IDR to reflect Fitch's
expectation of above-average recoveries for senior secured lenders
in a default. The 'RR3' Recovery Rating reflects recovery prospects
of between 51% and 70% in a given default scenario, as per Fitch's
criteria. In its recovery assessment, Fitch conservatively values
IVC on the basis of a 5.5x EV/EBITDA multiple applied to an
estimated post-restructuring EBITDA of EUR108 million, ie. EUR155
million expected in financial year end to September 2019 discounted
by 30% (pro-forma for acquisitions already completed).

Following the application of a standard 10% administrative claim,
Fitch has assumed IVC's revolving credit facility (RCF) (deemed to
be fully drawn) and the term loan B (TLB) - both ranking pari
passu, would recover 55% of their claims in an event of default or
a forced restructuring.

DERIVATION SUMMARY

Fitch bases its rating assessment of IVC on its generic navigator
framework, overlaying it with considerations of the underlying
animal care and consumer service characteristics, which drive its
business profile. IVC's strategy of consolidating a fragmented care
market and generating benefits from scale and standardised
management structures is similar to strategies currently
implemented by other health care operations rated by Fitch such as
laboratory services and dental/optical chains. The key difference
is that the animal care markets are not regulated compared with the
human health care, which allows for greater operational
flexibility, but also introduce a higher discretionary
characteristic to an otherwise defensive spending profile.

Based on Fitch's peer analysis, IVC's rating of 'B' is well
positioned within the European health care service providers with
adequate-to-strong market positions in each of the group's regions
of operations, benefitting from attractive underlying market
fundamentals and consolidation opportunities.  

IVC is positioned well against other 'B' rated credits, underpinned
by an opening FFO adjusted gross leverage of just above 8.0x,
expected EBITDA margin improvement of around 120bp by 2020 and
satisfactory FCF generation. Compared with some of IVC's high-yield
peers such as Finnish private health operator Mehilainen Yhtym Oy
(B/Stable), and pan-European Laboratory testing company Synlab
Unsecured Bondco PLC (B/Stable), Fitch observes a similar financial
risk profile for IVC, which however is counterbalanced by a less
mature business model and at present a limited track record on
successfully implementing its rapid consolidation outside its
Nordic and UK core markets.

KEY ASSUMPTIONS

  - Organic revenue of CAGR 4.6% and total revenue growth, and
including acquisitions a CAGR of 25%

  - Underlying EBITDA margins gradually improving by around 120bp
by 2020, as productivity benefits from additional scale, further
integration, cost and supply chain synergies and optimisation of
pricing structures

  - Positive  working capital profile, representing 0.5% of sales,
driven by flexibility in term contracts

  - Limited capital intensity, with total capex at around 3% of
revenue

  - Acceleration of bolt-on acquisitions until FY22 and in line
with management guidance, potentially requiring additional debt
issuance up to FY22

  - No dividends

RATING SENSITIVITIES

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

  - Ability to further integrate operations, build scale and
profitability leading to a reduction in FFO adjusted gross leverage
below 6.5x, EBITDA margin above 17%, and FCF generation in high
single percentage points on a sustained basis

  - Satisfactory financial flexibility with FFO fixed charge cover
sustainably above 2.5x

  - Demonstration of a maturing business model, characterised by
enhanced diversification and greater scale with revenue trending
toward GBP2 billion

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

  - Erosion of profitability due to failure, or delays, to
integrate and develop the operations leading to EBITDA margin
falling below 12%

  - Negative FCF, potentially as a result of an unsuccessful
acquisition strategy driving weaker credit metrics such as FFO
adjusted gross leverage above 8.0x (pro-forma for acquisitions)

  - FFO fixed charge coverage below 1.5x on a sustained basis

LIQUIDITY AND DEBT STRUCTURE

Satisfactory Near-term Liquidity: IVC's near-term liquidity
position is comfortable, supported by the non-amortising nature of
the planned TLB with no debt maturity before 2025. Financial
flexibility is enhanced by a GBP200 million RCF, expected to be
fully undrawn following the closing of the refinancing.

Liquidity is further supported by Fitch's expectation of positive
FCF generation projected at 5%-6%. While the RCF is available to
fund acquisitions, Fitch expects additional funding requirements by
2022 to support its ambitious acquisition strategy, as the group
favours growth over deleveraging.

IVC ACQUISITION: S&P Assigns B Credit Rating, Outlook Stable
------------------------------------------------------------
U.K.-based veterinary services provider IVC Acquisition Topco Ltd.
has successfully refinanced its capital structure.  Although IVC is
the leading consolidator of veterinary practices in Europe, it has
financed much of its expansion through debt and is now highly
leveraged.

S&P Global Ratings is assigning its 'B' credit rating to IVC
Acquisition Topco Ltd. and its term loan and revolving credit
facility, in line with the preliminary ratings it assigned on Feb.
4, 2019.

S&P's ratings on IVC reflect the group's leading positions in its
main markets--Sweden and the U.K. Although these markets remain
relatively fragmented, they benefit from positive dynamics and are
resilient to economic cycles.

The secured debt that the group issued through IVC Acquisition Ltd.
as part of its refinancing includes:

-- A GBP200 million revolving credit facility (RCF) due 2025;

-- A GBP432 million term loan B1 priced at Libor + 450 basis
points (bps); and

-- A EUR400 term loan B2 priced at Euribor + 400 bps. Both of
these term loans are due in 2026.

S&P has assigned its 'B' issue-level ratings to the group's secured
debt and its and '3' recovery ratings indicate that it sees
recovery prospects of 50%-70% (rounded estimate: 65%).

The capital structure also includes a GBP238 million second-lien
term loan, also due in 2027, and GBP118 million payment-in-kind
(PIK) notes. These are not rated.

The European veterinary services industry benefits from favorable
dynamics, including loyal customers and a favorable payment system.
Like the U.S. veterinary services industry, most users pay in cash.
Cash payments support the group's cash flow generation. Pet
insurance is gaining a foothold in some markets; about 80% of
registered pets in Sweden have insurance, while the figure is about
40% in Denmark and Norway. In the U.K., approximately 30% of pet
owners had at least one pet insured in 2016 (up from 25.5% in 2011)
and pet insurance is gaining ground.

Pet health insurance is not prevalent in other national markets.
Approximately 80% of European payers are pet owners and the
remaining 20% comprises insurance companies. This is broadly
comparable with the U.S.

The industry's expansion stems from like-for-like price increases,
an increase in pet population, an increase in the number of visits,
and a shift toward more-complex care treatments. Pet ownership is
increasing in line with population expansion, at about 0.5% per
year in Europe. Owners are also spending more on their pets because
of an increased awareness of animal health. S&P expects the market
will grow at an average compound annual rate of about 3.5%-4.0% in
2017-2022.

Despite ongoing consolidation, the veterinary service market is
still relatively fragmented, increasingly competitive, and has
relatively low barriers to entry. S&P considers that external
players could easily enter the market by acquiring a small clinic
in a neighborhood or region of operation. Nevertheless, the
relationship between local vets and their customers should prevail
over pricing considerations, given the importance customers place
on the quality of services and their vet's expertise.

S&P said, "A large number of small independent clinics dominate the
market; veterinary practice groups account for only a small
proportion of the total addressable market, which we estimate is
about EUR10 billion. This presents a consolidation opportunity, in
our view, and we see the group as well-positioned to be one of the
leading players in its core markets."

IVC's high concentration in the U.K. and Sweden, which act as hubs
for acquisitions in other countries, enable it to consolidate
across Europe. IVC enjoys a No. 1 position by revenue in five of
its core markets:

-- The U.K. (23% market share);
-- Sweden (31% market share);
-- The Netherlands (20% market share);
-- Switzerland (5% market share); and
-- Finland (19% market share).

IVC ranks No. 2 in Norway, Germany, and Denmark, which it also
considers to be core markets. IVC only entered the French, Belgian,
and Irish markets in the first half of 2019. It aims to further
expand in these.

Revenues are geographically concentrated. About 60% of sales, and
72% of the group's EBITDA, are generated in the U.K. Sweden
contributes 15% of sales and 11% of total EBITDA. The group aims to
use these markets to anchor acquisitions in other countries across
Europe. If it is successful in executing its business plan, we
expect its exposure to the U.K. to fall to about 47% of group
revenues and about 51% of group EBITDA. S&P would still view this
as relatively high concentration.

Operating efficiencies are mainly based on common procurement, but
margins are lower than international peers'. By November 2018,
IVC's number of clinics had increased to about 1,000 clinics. To
help it retain existing customers, IVC typically retains the brand
name and vets in its newly acquired clinics, but centralizes the
procurement of drugs and materials (about 81%-83% of total gross
purchases) from its key suppliers. Implementing common procurement
is the group's key operating efficiency.

Historically, the group has been able to secure discounts on
purchases of about 14% through wholesale suppliers and a further
40%-42% in manufacturer rebates (as a percentage of purchases from
wholesalers).

The group has an asset-light business model. Its maintenance
capital expenditure (capex) of about 3% chiefly relates to
standardizing the new and existing clinics, and centralizing IT
systems once acquired. Rental costs account for about 4% of
revenues.

The cost structure is flexible--about 48% of the costs are linked
to staff. The salaries and commissions paid to vets and veterinary
nurses vary from country to country, but typically account for
about 45%-55% of IVC's costs. Profitability levels are further
supported by IVC's pan-European presence, which supports supplier
benchmarking, negotiating power, contractual standards, and direct
procurement. S&P expects it to achieve back-office synergies via
the centralization of processes. Centralized procurement across the
group has allowed IVC to benefit from joint volume discounts and
streamlining of stock-keeping units; this can enhance
profitability.

S&P expects S&P Global Ratings-adjusted EBITDA margins, pro forma
the refinancing, to be 15%-19% in 2020-2021. This is lower than its
U.S. peers' margins of 20%-22%. IVC also depends, to some extent,
on external short-term vets, particularly in U.K., whereas U.S.
veterinary services tend not to use external vets. Additionally,
U.S. peers seem to have higher pricing power.

IVC's business model focuses on recurring visits, which create a
recurring revenue stream that should remain resilient in an
economic downturn. Of total sales, 80% are head-to-tail check-ups
on small domestic pets. The group also offers specialist
interventions, which make up the remaining 20% of total sales.
These include cardiology, dentistry, dermatology, diagnostic
imaging, and oncology. IVC also operates its own crematoria
facilities and has a wholly owned online practice, PDOL, which
procures and sells prescription-only drugs and non-food medication,
food, and accessories to customers. These services enable the group
to offer a full range of veterinary services for pets.

About 85% of the group's revenues are recurring (defined as
customers who have visited the same clinic at least once during the
preceding year). This is broadly in line with rated peers in the
U.S. It includes PHC members, who pay a monthly
membership/insurance plan fee via direct debit. PHC members
accounted for about 8% of the group's revenue in the U.K. in the 12
months to June 2018.

Although S&P views IVC's exposure to private payers as positive, it
could expose the group to pricing pressure from competitors. These
consumers fund all treatment costs from their own pocket,
increasing the group's exposure to any macro-level shocks (such as
a delay in spending on dental treatment). That said, spending on
pet companions has been relatively recession-resistant. In Europe,
as in the U.S., customers mostly pay for servicesin cash--there is
no dependence on government revenues and low reimbursement risk.
This characteristic makes the industry highly attractive.

Leverage is likely to remain high as the group continues to finance
its expansion using debt. IVC has primarily expanded via
acquisitions over the past few years, a trend S&P expects to
continue. The group's business plan includes acquiring about
280-360 new clinics per year through to 2022.

S&P said, "We estimate that adjusted leverage at the start of 2019
was 9x. Although we expect this to fall to about 8.5x in 2020 and
to 8.0x-8.5x in 2021, we still view this as high. That said, we
understand that the group could stop making acquisitions during
this period. It has a degree of control over its cash flow
generation, which increases its resilience, even under considerable
stress.

"Our adjusted debt at the closing of the transaction includes about
GBP1,020 million of bank debt and GBP118 million in PIK notes we
consider as debt. We also adjust our debt to incorporate about
GBP300 million for operating leases. We do not net the group's cash
balances in our forecasts, given that the group is owned by a
financial sponsor."

Working capital is structurally negative because most of the
revenues are from payors who pay out of pocket. Thus, cash is
collected immediately at the time of service, which leads to
minimal account receivables. Trade payables have payment terms of
30-60 days with the main dental suppliers, which also leads to a
favorable cash conversion cycle.

S&P said, "We forecast total capex of GBP30 million-GBP50 million
over the next three years, mainly comprising maintenance capex,
investment capex, and head-office capex used to integrate and
centralize general IT functions at the new clinics. We expect
reported pro forma free operating cash flow (FOCF) generation of
GBP48 million-GBP52 million over the next three years. s

"We understand that IVC has a leverage target set at 7.5x and
intends to reduce leverage below 7.0x by 2020 on a pro forma basis.
Despite its growth strategy, the group can also choose to stop
making acquisitions if needed. Although we view such an approach as
very focused and prudent, we believe that the sheer volume of
bolt-on acquisitions per year exposes the overall group to some
integration risks, particularly from an operational point of view
(that is, information technology and finance)."

The main risk for IVC is that it will find it increasingly
expensive to pursue its debt-funded acquisition strategy and will
have to pay higher multiples. Historically, as merger and
acquisition (M&A) multiples have increased, particularly in the
U.K., the group has shifted to EU-based acquisitions.

Given the group's acquisitive strategy, the stable outlook assumes
that the group will pursue a disciplined M&A strategy and continue
to seamlessly integrate new assets. S&P also assumes it will
maintain adjusted margins comfortably in the 15%-19% range in the
next 12 months, adjusted leverage of 8x-9x, and positive FOCF of at
least GBP10 million.

S&P said, "We could lower the ratings if IVC's debt-funded
acquisition strategy were to become increasingly costly, with
leverage therefore increasing for a prolonged period. This could
happen, for example, if operating issues led to weaker
profitability, if the integration process brought additional costs,
or if acquisitions resulted in higher consolidated leverage. We
could also lower the ratings if fixed-charge coverage materially
weakened compared with our base case on a sustainable basis or if
IVC's liquidity profile deteriorated.

"Although we consider a positive rating action unlikely at this
stage, we could upgrade the group if IVC successfully integrates
the acquired entities, ensuring sound profitability and annual FOCF
that materially exceed our base-case forecasts." Such strong
operational performance would need to combine with significant debt
reduction, so that leverage falls below 5x on a permanent basis and
the private equity owner commits to maintaining it at this level.

IVC Acquisition Topco Ltd. is the holding company of a
U.K.-headquartered veterinary care provider with a presence in
eight European markets. IVC was established in May 2017 when the
private equity firm EQT merged two companies in its portfolio:
Independent Vetcare (acquired in 2016), a leading veterinary
services provider in U.K., and Evidensia (acquired in 2014), a
leading veterinary services provider in the Nordics and DACH
region. IVC completed the financial integration in September 2018,
before acquiring additional clinics and crematoria in the existing
countries, as well as in new markets--France, Belgium, and Ireland.
IVC, together with its shareholders, successfully refinanced the
existing loan facilities through a GBP432 million term loan B1 and
EUR400 million term loan B2 both due 2026, a GBP238 million
second-lien due 2027, and a GBP200 million RCF due 2025, undrawn at
closing. The refinancing aims to provide capital for the imminent
acquisitions of facilities to support the group's long-term
expansion strategy. IVC's pro forma consolidated acquisitions
revenues were about GBP800 million in 2018.

S&P's base case assumes:

-- Revenues will increase in 2019, mainly stemming from the
acquisition of new clinics. About 200 of these will be in the U.K.,
with about 150 clinics in the rest of Europe. S&P said, "Organic
growth will track the increase in the pet population, which we
expect to cause an increase in visits. We also foresee a stable
increase in like-for-like prices. We expect our adjusted pro forma
revenues to reach GBP1,060 million-GBP1,070 million in 2019, then
increase to about GBP1,280 million-GBP1,290 million in 2020."

-- S&P's adjusted pro forma EBITDA margin to be 15%-19% in 2019,
improving toward the upper end of this range in 2020-2021, driven
mainly by bolt-on acquisitions and cost efficiency measurements
regarding procurements and overheads.

-- Structurally negative working capital with positive inflows of
GBP13 million-GBP16 million over the next three years.

-- Total capex of GBP30 million-GBP50 million over the next three
years, mainly comprising maintenance capex, investment capex, and
head-office capex to integrate and centralize general IT functions
in the new clinics.

-- S&P has assumed no dividends.

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

-- Adjusted debt to EBITDA excluding shareholder loans to be about
9.0x in 2019, improving to about 8.5x in 2020 and about 8.0x-8.5x
in 2021.

-- Fixed charge coverage ratio at 1.8x on a weighted average basis
in the next three years.

-- Reported FOCF generation of GBP48 million-GBP52 million in the
next three years.


LUDGATE FUNDING 2008-W1: Fitch Hikes Class D Debt Rating to B+sf
----------------------------------------------------------------
Fitch Ratings has upgraded two tranches of Ludgate Funding Plc's
Series 2008-W1 (Ludgate 2008) and affirmed the others as follows:

Class A1 (ISIN XS0353588386): affirmed at 'AAAsf'; Outlook Stable

Class A2b (ISIN XS0353589608): upgraded to 'A+sf' from 'Asf';
Outlook Stable

Class Bb (ISIN XS0353591505): affirmed at 'BBBsf'; Outlook Stable

Class Cb (ISIN XS0353594434): affirmed at 'BBsf'; Outlook Stable

Class D (ISIN XS0353595597): upgraded at 'B+sf' from 'Bsf'; Outlook
Stable

Class E (ISIN XS0353600348): affirmed at 'CCCsf'; Recovery Estimate
(RE) 100%

Ludgate 2008 is a securitisation of near-prime and non-conforming
residential mortgages originated by Wave Lending Limited. The
mortgages were purchased by Merrill Lynch International Bank
Limited. Ludgate 2008 was the third issue under the Ludgate funding
Plc platform, following Ludgate Funding PLC Series 2006-1 FF1
(Ludgate 2006) and Ludgate Funding PLC Series 2007-1 FF1 (Ludgate
2007).

KEY RATING DRIVERS

Improved Asset Performance

Arrears and repossessions have stabilised over the last two years
and are now in line with those of the Ludgate 2006 and Ludgate 2007
pools. This is significant considering that Ludgate 2008 had
suffered historically the worst performance among the three pools,
reflected in a higher performance adjustment factor being applied
in Fitch's analysis.

Low-Yielding Assets

The mortgages in this pool all pay interest at a margin above the
Bank of England Base Rate, which is generally lower than many
non-conforming RMBS transactions rated by Fitch. The excess spread
currently earned by is lower than many peers' at 0.07%, but is in
line with the other Ludgate pools'.

Pro Rata Amortisation

The transaction is currently paying pro-rata as all relevant
triggers have been met. The pro-rata conditions dictate that the
transaction will revert to sequential redemption once the aggregate
principal outstanding reaches 10% of the amount at close. This
feature protects the transaction from excessive tail risk.

Non-Amortising Reserves

The transaction features non-amortising reserves due to having
breached a total loss trigger, which is irreversible. The liquidity
facility is available to all note classes subject to a principal
deficiency ledger (PDL) trigger. This external liquidity provision
provides support to the junior tranches in Fitch's lower rating
scenarios provided the PDL condition is not breached. The
non-amortising reserve fund is currently fully funded and results
in a build-up of credit enhancement despite the pro-rata
amortisation.

RATING SENSITIVITIES

The redemption profile of the loans is concentrated with 47% of
interest-only (IO) loans maturing in the period between 2030 and
2032. Whilst Fitch adjusts for the IO concentration risk in its
analysis, a material difficulty for borrowers refinancing at
maturity would present a negative shock for the transaction.

While this is a mixed pool the buy-to-let (BTL) component is high
at 68.6%. A downturn in this sector, which currently has a negative
asset performance outlook from Fitch, could have a material effect
on this pool compared with other mixed pools that typically have a
lower BTL component.

While the basis risk in the pool is hedged borrowers would be
exposed to a material increase in interest rates from the Bank of
England.

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

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

DATA ADEQUACY

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

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

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

WORKING LINKS: Enters Administration Following Damning Reports
--------------------------------------------------------------
BBC News reports that private firms which manage thousands of
offenders in Wales and south west England have gone into
administration.

Working Links community rehabilitation companies will hand over
their work to a firm running the service in south east England, BBC
discloses.

According to BBC, the Ministry of Justice (MoJ) said it had "taken
action to ensure continuity of probation services".

The union representing probation officers has now called for an
urgent meeting with the minister responsible, BBC relates.

Working Links was given the contract for Wales, as well as Avon and
Somerset and Devon and Cornwall, BBC states.

Last year, a further shake up of the service was announced
following a number of damning reports and recognition that the
funding model for the CRCs wasn't working, BBC recounts.

A Ministry of Justice spokesman, as cited by BBC, said: "We were
aware of Working Links' financial situation and have taken action
to ensure continuity of probation services.

"That means probation officers will continue to be supported,
offenders will be supervised, and the public will be protected.

"The chief inspector's report on these CRCs lays bare their
unacceptably poor performance and we will work closely with the new
provider to urgently raise standards."

In Wales, the service is also due to be renationalized next year
and the MoJ said it will be looking at bringing this forward,
according to BBC.

But there is anger from the union, which says the government should
have stepped in before the firm went into administration, BBC
relays.



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

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

Copyright 2019.  All rights reserved.  ISSN 1529-2754.

This material is copyrighted and any commercial use, resale or
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Information contained herein is obtained from sources believed to
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