/raid1/www/Hosts/bankrupt/TCREUR_Public/190531.mbx        T R O U B L E D   C O M P A N Y   R E P O R T E R

                          E U R O P E

          Friday, May 31, 2019, Vol. 20, No. 109

                           Headlines



B E L G I U M

ONTEX GROUP: Moody's Lowers CFR to Ba3, Outlook Negative


G E R M A N Y

AI PLEX: Fitch Assigns 'B(EXP)' Long Term Issuer Default Rating
AI PLEX: Moody's Assigns B2 Corp. Family Rating, Outlook Stable
EUROMAX VI: Fitch Hikes Rating on Class B Debt to CCC
NOVEM GROUP: S&P Assigns Prelim. 'B+' LongTerm ICR, Outlook Stable


I R E L A N D

SYNCREON GROUP: S&P Lowers ICR to 'CC' on Debt Exchange Offer


I T A L Y

[*] ITALY: Warned by Brussels of Rising Debt Levels


K A Z A K H S T A N

NOMAD INSURANCE: A.M. Best Alters Ratings Outlook to Stable


L U X E M B O U R G

MATADOR BIDCO: Fitch Gives First Time BB(EXP) Issuer Default Rating


N O R W A Y

SECTOR ALARM: S&P Assigns Prelim 'B' LongTerm ICR, Outlook Stable


R U S S I A

BORETS INT'L: Fitch Affirms 'BB-' LongTerm IDRs, Outlook Stable
KOKS GROUP: Fitch Affirms B Issuer Default Ratings, Outlook Stable
MTS BANK: Fitch Alters Outlook on IDR to Stable & Confirms BB- IDR
NOVIKOMBAK JSCB: Moody's Hikes LongTerm Deposit Ratings to 'Ba3'


S P A I N

CAIXABANK CONSUMO 3: Moody's Affirms B3 Rating on Class B Notes
RURAL HIPOTECARIO VII: Moody's Affirms Caa2 on Class D Notes
VALENCIA: S&P Alters Outlook to Stable & Affirms 'BB/B' ICRs


U K R A I N E

CREDIT AGRICOLE: Fitch Affirms 'B-/B' Issuer Default Ratings


U N I T E D   K I N G D O M

ARCADIA GROUP: Green Offers GBP185MM to Cut Pension Deficit
DONCASTERS GROUP: S&P Cuts ICR to CCC- on Risk of Default
FONTAIN: Enters Liquidation, Owes GBP3.6MM to Unsecured Creditors
JOSS ENGINEERING: Bought Out of Administration, 20 Jobs Saved
LAMP INSURANCE: Unable to Make Claim Payments to Policyholders

LINKS OF LONDON: Appoints New Creative Director Amid CVA Rumors
SELECT: Administrators Launch Company Voluntary Arrangement
SOUTHERN PACIFIC 05-B: Fitch Affirms BB+ on Class E Debt
THOMAS COOK: Moody's Lowers CFR to Caa2, Outlook Negative


X X X X X X X X

[*] BOOK REVIEW: GROUNDED: Destruction of Eastern Airlines

                           - - - - -


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B E L G I U M
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ONTEX GROUP: Moody's Lowers CFR to Ba3, Outlook Negative
--------------------------------------------------------
Moody's Investors Service has downgraded Ontex Group NV's corporate
family rating (CFR) to Ba3 from Ba2 and its probability of default
rating (PDR) to Ba3-PD from Ba2-PD. The outlook is negative.

"The rating downgrade reflects Ontex's current weaker operating
performance because of rising competition, negative foreign
currency impact and higher raw material costs. We expect that any
recovery will be slower than previously anticipated, as the
transformation plan announced will take time to bear fruits and
will entail one-off costs and capex that will depress profits and
cash flows in the next 2 years," says Lorenzo Re, a Moody's Vice
President - Senior Analyst and lead analyst for Ontex.

"In addition, we note the deterioration in Ontex's liquidity owing
to the reduced headroom under financial covenants of its revolving
credit facility," Mr. Re added.

RATINGS RATIONALE

The rating downgrade to Ba3 reflects the company's current weak
operating performance and Moody's expectation that any recovery
will be slower than previously anticipated, with operating margin
improvements depending on the successful execution of the ongoing
restructuring plan.

Ontex's operating performance in the first quarter of 2019
continued to be affected by raw material cost increases and foreign
currency volatility, that were only partially offset by cost
savings and price increases.

Moreover, strong competition resulted in lower volume sales and
higher marketing costs to support sales. As a result, revenue
declined by 2.1% on a reported basis (-1.5% on a constant currency
basis) and EBITDA dropped by 18.3% (-5.2% on a constant currency
basis).

Ontex launched a restructuring program to revamp sales and increase
operational efficiency by 2021. This plan entails EUR130 million
investments, including EUR45 million incremental capex and EUR85
million restructuring costs, over a three year period, of which up
to EUR50 million will be spent in 2019.

While some of the pressures related to raw material prices and
foreign currency volatility may ease in the coming quarters,
Moody's forecasts that EBITDA will remain subdued in 2019 and 2020.
Moreover, the investments related to the restructuring plan will
hamper cash generation such that Ontex's free cash flow generation
will remain negative in 2019 and 2020 at approximately EUR70
million and EUR20 million, respectively.

As a result, Moody's anticipates that credit metrics will further
deteriorate in the next 18 months, with leverage (measured as
Moody's-adjusted gross debt/EBITDA, and excluding from EBITDA the
impact of one-off costs) at 5.5x in 2019, well outside the
threshold of 4.0x for the previous Ba2 rating. Moody's expects
leverage to reduce to 5.0x in 2020 and to return towards 4.5x only
in 2021.

Ontex's liquidity has weakened. Its liquidity comprises EUR131
million in cash as of December 2018, a EUR300 million revolving
credit facility (drawn for EUR82 million as of year-end 2018) and a
EUR100 million accordion facility available under the EUR250
million term loan facility maturing in 2024. The company has no
debt maturities until December 2022 when the EUR600 million Term
Loan B becomes due.

Moody's expects the company free cash flow to remain negative in
2019 at around EUR70 million, after the payment of around EUR170
million in capital spending and the EUR33 million dividend,
implying that Ontex will need to further draw on its revolver to
cover this deficit. However, the RCF and the Term Loan B facility
include a net leverage maintenance covenant, and Moody's forecasts
that Ontex will have limited headroom under this covenant, which
limits its capacity to access additional funding.

Ontex's rating continues to be supported by the company's: (1)
leading market position in the production of retailer brand
hygienic disposable products in Europe; and (2) good product and
geographical diversification. However, the rating also reflects the
price-competitive nature of the industry and a degree of customer
concentration.

RATIONALE FOR NEGATIVE OUTLOOK

The negative outlook reflects Moody's expectations that Ontex's
credit metrics will remain weak for the next 18 months, with
Moody's adjusted leverage at 5.5x in 2019, 5.0x in 2020 and 4.5x
only in 2021. This recovery is subject to the successful execution
of the restructuring plan.

The negative outlook also reflects the worsening liquidity position
owing to the tight headroom under the financial covenants of the
revolving credit facility.

WHAT COULD CHANGE THE RATING UP/DOWN

An upgrade of the ratings is unlikely given the negative outlook.
Positive pressure on the ratings could develop overtime if (1) a
successful execution of Ontex's transformation plan leads to a
material improvement in operating performance and profitability,
with EBIT margin trending towards 10%; (2) Moody's-adjusted (gross)
Debt/EBITDA declines below 4.0x on a sustained basis; and (3)
Moody's-adjusted retained cash flow/net debt increases towards the
high teens in percentage terms.

The ratings could be lowered in case of (1) a continued
deterioration in operating performance, and the company fails to
address the decline in operating margin; (2) a further
deterioration in the liquidity profile; or (3) a sustained
deterioration in credit metrics, such that Moody's-adjusted (gross)
Debt/EBITDA remains above 4.5x following the completion of the
restructuring plan.

LIST OF AFFECTED RATINGS

Downgrades:

Issuer: Ontex Group NV

  -- Probability of Default Rating, Downgraded to Ba3-PD
     from Ba2-PD

  -- Corporate Family Rating, Downgraded to Ba3 from Ba2

Outlook Actions:

Issuer: Ontex Group NV

-- Outlook, Changed To Negative From Stable

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Global Packaged
Goods published in January 2017.

CORPORATE PROFILE

Ontex Group NV, headquartered in Aalst-Erembodegem, Belgium, is a
leading manufacturer of branded and retailer-branded hygienic
disposable products across Europe, the Americas, the Middle East
and Africa. Ontex operates in three product categories: baby care,
adult incontinence and feminine care. The company sells its
products in more than 110 countries, with more than half of its net
sales coming from outside of Western Europe. With 19 production
facilities in 14 countries, Ontex generated net sales of around
EUR2.3 billion in 2018 and EBITDA of EUR267 million
(Moody's-adjusted). Ontex is a public company listed on the
Euronext Brussels stock exchange.



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G E R M A N Y
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AI PLEX: Fitch Assigns 'B(EXP)' Long Term Issuer Default Rating
---------------------------------------------------------------
Fitch Ratings has assigned AI PLEX AcquiCo GmbH expected ratings
for its Long-Term Issuer Default Rating (IDR) of 'B(EXP)' with a
Stable Outlook and its senior secured ratings of
'B(EXP)'/'RR4'/40%, subject to receipt of final documents.

AI PLEX is the financing vehicle used by Advent International to
fund the EUR2,200 million acquisition of the methacrylate business
of German specialty group Evonik (MADRID) and is issuing a EUR1,485
million Term Loan B to fund the transaction.

AI PLEX's IDR reflects MADRID's position as a leading European
producer of methyl methacrylates (MMA), polymerised MMA (PMMA) and
MMA derivatives, which are sectors with high barriers to entry, the
company's strong cost position in Europe, its good diversification
by geography and end-consumer, and its solid, albeit volatile,
EBITDA margins.

The rating is constrained by a highly leveraged capital structure
with limited deleveraging on a gross debt basis over the medium
term and MADRID's exposure to commodity-based products that create
earnings volatility.

KEY RATING DRIVERS

European Market Leader: MADRID is a European market leader in the
production of MMA and its derivatives, and of PMMA, with a total
capacity in 2018 of 1,100,000 tons. The industry is consolidated
and has high barriers to entry including technological know-how and
raw material access. MADRID holds a leading position in Europe in
most of its segments and is generally ranked second globally, with
production facilities in Germany, the US, and China. Vertical
integration provides the downstream business with a stable supply
of MMA and is enabling the group to implement its strategy of
gradually expanding its presence in specialty grades.

High Financial Leverage: Fitch forecasts that MADRID's funds from
operations (FFO) adjusted gross leverage will increase to 6.6x in
2020 when EBITDA will decline to its 'new normal' level. Fitch
considers this leverage as high for a commodity-based chemicals
group displaying volatility and cyclicality, but sustainable given
MADRID's good cash conversion and consistently positive free cash
flows (FCF). Fitch forecasts that, on a net leverage basis, MADRID
will see greater deleveraging as cash will accumulate on its
balance sheet due to positive FCF generation and minimal mandatory
debt amortizations.

Although the gradual build-up of cash reserves provides a buffer
for potential shareholder distributions or M&A, those are not
forecast under Fitch's rating case, in line with management
expectations. Fitch focuses on gross leverage metrics at this
rating level.

Margin Volatility Reflects Commodity Exposure: The majority of
MADRID's external sales still come from commodity bulk monomers and
standard grades of downstream product, which contributed to 41% and
23% of 2018 sales, respectively. Earnings have historically
exhibited more margin volatility than peers with a higher focus on
specialty chemicals, with vulnerability to variations in supply and
oil prices.

MMA demand grew at a steady 3% a year over the past three years,
but prices have been volatile. In 2017-2018, outages across the
industry led to shortages that supported high-capacity utilisations
and exceptionally high prices. Fitch views positively the fact that
about half of customer contracts are long-term and indexed to raw
material prices, allowing MADRID some pass-through.

Earnings to Normalise from 2020: Fitch believes that earnings and
margins will reduce to more normalized levels from 2020 and will be
stable over the medium term as it sees capacity additions as
broadly aligned with demand growth. Fitch also forecasts positive
FCF over Fitch's horizon, despite slightly higher CapEx than
historically (about 5% of sales), reflecting MADRID's good cash
conversion rate.

Weaker Cost Position in the Americas: MADRID's well-invested
production assets in Germany place it in the top cost position in
EMEA. In the Americas, however, it ranks towards the lower end
while its Chinese facility has a middle ranking. The group has
successfully piloted a proprietary technology called LiMA in the US
to produce MMA using cheap ethylene feedstock (known as C2 process)
that would give MADRID a leading cost position in the Americas and
low dependency on oil prices.

Fitch notes that Saudi Methacrylates Company (SAMAC), a joint
venture (JV) between Saudi Basic Industries Corporation (SABIC;
A+/Stable) and Mitsubishi Chemical Corporation (BBB/Stable), has
recently brought on-stream new C2-based production that would
compete directly with LiMA, but Fitch does not view this as a
near-term threat for MADRID since SAMAC's capacity is initially
being channeled to Asia and Europe, where there is the greatest
demand. However, no decision has been taken regarding LiMA. Fitch
understands from management that it is only considering options
that include equity funding from the new owners, a joint venture
with a strategic partner, or a ring-fenced non-recourse project
financing.

High Exposure to Cyclical End-Markets: About 60% of MADRID's
external sales are to the construction and auto sectors, which are
cyclical and currently under pressure in certain markets. Fitch
sees this exposure as mitigated by good end-customer
diversification and growth in demand for MADRID's products,
supported by increasing penetration into new applications. Fitch
anticipates that demand growth in all of MADRID's segments will be
2.5%-4.5% over the medium term.

Key Recovery Assumptions

As part of its bespoke recovery analysis, Fitch estimated the
post-restructuring EBITDA at EUR210 million, representing a 30%
discount on Fitch's through-the-cycle EBITDA of EUR300 million.

In a distressed scenario, Fitch believes that a 4.5x multiple
reflects a conservative view of the going-concern value of the
business. Such multiple is supported by satisfactory industry
fundamentals and by Fitch's peer comparisons.

As per its criteria, Fitch assumes the revolving credit facility to
be fully drawn and takes 10% off the enterprise value to account
for administrative claims. Considering that all the debt ranks pari
passu, the debtholders would achieve a recovery of 45%, resulting
in a final instrument rating of 'B'/'RR4'.

DERIVATION SUMMARY

MMA producers in Fitch's rated universe include large diversified
chemical group Dow Chemical Company (BBB+/Stable) and Nouryon
Holding B.V. (B+/Stable). The latter presents a similarly high
leverage profile on a gross FFO basis but is characterized by a
larger scale and a greater emphasis on specialty products. MADRID's
financial leverage, cash flow conversion, and business
diversification compare well with 'B' category credits in Fitch's
private ratings portfolio.

No Parent/Subsidiary Linkage, Country Ceiling constraints, or
Operating Environment factors influenced the rating.

KEY ASSUMPTIONS

- Revenue CAGR of -1.6% (negative in 2019 and 2021)

- Adjusted EBITDA margins flat at 15%-16% from 2020, reflecting
   the long-term average in a balanced market

- 25% average tax rate

- Neutral networking capital flows

- Capex of 4.5%-5.5% of revenues a year

- No M&A forecast

- Annual operating lease expense of EUR8 million capitalized at
8x

- Factoring facility treated as debt: EUR42 million in 2019,
   rising to EUR125 million in 2020

- No common dividends

RATING SENSITIVITIES

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

- FFO gross adjusted leverage below 5.5x on a sustained basis

- FFO fixed charge cover sustainably above 3x

- Sustained EBITDA margins above 20% and FCF margins above 5%.
   Although not in the rating case, this may arise from the
   implementation of the LiMA project.

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

- FFO gross adjusted leverage above 7.0x on a sustained basis

- FFO fixed-charge cover sustained below 2x

- A sustained weakening of EBITDA and FCF margins, for example
   as a result of lost competitive position or an inability
   to expand a downstream business.


AI PLEX: Moody's Assigns B2 Corp. Family Rating, Outlook Stable
---------------------------------------------------------------
Moody's Investors Service assigned to AI PLEX AcquiCo GmbH (AIP) a
B2 corporate family rating (CFR), a B2-PD probability of default
rating and B2 instrument ratings to AIP's EUR1.485 billion senior
secured term loan due 2026 and to the EUR300 million senior secured
revolving credit facility due 2025, with AI PLEX US Acquico LLC as
co-borrower. The outlook is stable. This is the first time that
Moody's rates AIP.

RATINGS RATIONALE

The B2, which is weakly positioned, takes into account the high
estimated Moody's-adjusted leverage of 6.2x debt/EBITDA for the
full year 2019. Moody's expects the leverage to increase further to
around 6.5x in 2020 driven by a market-driven weakening of EBITDA.
Offsetting the high leverage is AIP's ability to generate positive
free cash flows, which will over time lead to an increase in the
company's cash balance which is needed to offset the high gross
leverage and therefore provides very limited flexibility for either
external or organic growth or even shareholder distributions. The
increase in leverage is due to the normalization of MMA prices, and
hence, a continued slight weakening of EBITDA, following the
2017-2018 period when prices were unusually high. The tight supply
then had a positive impact on selling prices and profitability
because of unplanned shutdowns. A slower-than-expected ramp-up of
new capacity in Saudi Arabia also constrained supply. Although
prices and operating margins in the past have at times been
volatile, the forthcoming incremental capacity will be absorbed by
growing demand that is tied to GDP growth plus 0.5-1.0%. There is
also very limited cushion in the rating for unexpected
underperformance.

The B2 CFR also reflects (1) AIP's scale with EUR1.8 billion of
revenues, (2) its diversified geographical footprint in EMEA, Asia
and the U.S. and (3) the leading positions AIP has along the
methacrylate (MMA) value chain, especially in EEA where it is a
strong number 2 in a fairly consolidated market. EEA is the
European Economic Area. This includes all EU member states plus
Iceland, Liechtenstein, and Norway. Its Verbund (integrated
production along the MMA chain) operational set-up allows AIP to
pursue the strategy of tilting its upstream MMA production to
higher-margin downstream products. Apart from targeted EUR30
million operating cost improvements, the contemplated mix shift
will be the other primary driver for EBITDA expansion from starting
EBITDA of EUR328 million. Management also intends to spend moderate
amounts of up to EUR15 million per project on discretionary
debottlenecking investments with a quick pay-back that will yield
more meaningful EBITDA contributions from 2022 onwards.

AIP's liquidity is good. The company will have an opening cash
balance of EUR50 million and will have access to a committed EUR300
million revolving credit facility (RCF). Funds from operations of
around EUR200 million will be sufficient to cover capital
expenditures of around EUR100-110 million and cover moderate
working capital swings. The company has the flexibility to scale
its capex down to maintenance levels of around EUR50 million in a
year. Even in an adverse, recessionary environment Moody's expects
FCF to remain near break-even levels, which is a supportive feature
to AIP's B2 rating. Management has tools at its disposal through
which it can mitigate the negative impact in case of an economic
downturn. Amongst those are reduction of investments, flexi-time
arrangements with its workforce and a variable cost structure.

Structural Considerations

Moody's rates the TL B2, in line with the CFR as these debt
instruments represent the largest debt instrument in the rating
agency's waterfall analysis. The TL ranks pari passu with the RCF.
Both facilities are guaranteed by material subsidiaries
representing 80% of consolidated EBITDA and are secured by all
assets, except for real estate and receivables, of the US
entities.

Rating Outlook

The outlook is stable and reflects Moody's tolerance of a higher
leverage as long as AIP generates strong recurring free cash flows
and over time accumulates cash on its balance sheet. There is very
limited cushion for a weaker than expected operating performance.

Factors that could change the rating -- up

Given the high leverage an upgrade is currently unlikely. Moody's
could upgrade the rating if debt/EBITDA was consistently below 5.0x
and if FCF/debt approached 10%.

Factors that could change the rating -- down

Moody's could downgrade the ratings should AIP commence a larger
debt-funded capital investment programme with recourse to AIP or
should the shareholder extract cash via dividends or other
measures. Negative rating pressure could arise if debt/EBITDA
remained consistently above 6.0x. An initially higher leverage can
only be accommodated with the expectation that cash generated will
be accumulated on the balance sheet, failure of that would lead to
negative rating pressure. In addition the rating could be
downgraded if (1) EBITDA margins were to drop to below 15% and
became volatile, and (2) FCF turned negative.

COMPANY PROFILE

AIP is one of the world's largest methyl methacrylate (MMA)
producers as measured by market share. It is currently owned by
Evonik Industries AG (Baa1 stable) who signed an agreement with
private equity firm Advent International to sell the business. AIP
in 2018 had sales of nearly EUR2.0 billion and company-adjusted
EBITDA of EUR450 million, or a 23% margin. Because of its vertical
integration, AIP is present in the MMA value chain with bulk
monomers accounting for around 41% of sales in addition to molding
components representing 23%, methacrylate resins representing 9%,
acrylic products representing 19% and CyPlus representing 7% of
annual sales.


EUROMAX VI: Fitch Hikes Rating on Class B Debt to CCC
-----------------------------------------------------
Fitch Ratings has upgraded Euromax VI ABS Limited's class A and B
notes and affirmed the class C, D and E notes.

Euromax VI is a securitization of mainly European structured
finance securities that closed in 2007.

Euromax VI ABS Limited
   
                          Rating From          Rating to
Class A XS0294719082       BBBsf                 BBsf
Class B XS0294720171       CCCsf                 CCsf
Class C XS0294720338       Csf                   Csf
Class D XS0294720841    Csf                   Csf
Class E XS0294721146       Csf                   Csf

KEY RATING DRIVERS

Portfolio Amortization: The upgrade of the class A notes reflects
increased credit protection available for the senior notes as a
result of portfolio amortization as well as improved portfolio
credit quality since Fitch's 2018 review. The class A notes paid
down by EUR4.9 million during April 2018 to April 2019, and the
credit enhancement of the class A notes has increased to 83.3% from
76.9% during the same period.

Portfolio Credit Quality: The upgrade of the class B notes reflects
the improved credit quality of the performing portfolio to 'BB+'
from 'BB'/'BB-' at the 2018 review, as well as the reduction of
'CCC' category assets to 0% from 26%. The positive impact from the
reduction of the rating default rate of the portfolio on the 'CCC'
rating stress has outweighed the reduction of the class B notes'
credit enhancement to 2.8% from 9.0% at the 2018 review following a
default of an asset which had a Fitch-derived rating of 'CCC-' at
the 2018 review.

Structure and Cash Flow Analysis: All the OC tests are failing. The
transaction benefits from excess spread after paying senior
expenses and class A and B notes' interest. Such excess spread has
been used to pay down the class A notes to cure the class A/B OC
test. The class C, D and E notes continue to defer interest.

Highly Correlated Portfolio: The performing portfolio is 100%
concentrated in RMBS. Obligor concentration continues to increase
and there are only 13 performing issuers in the transaction.

Low Recovery Expectation: Most of the assets within the portfolio
are subordinated tranches. Consequently, Fitch's recovery
expectation for the portfolio is near 0%.

RATING SENSITIVITIES

The increase of default probability by 1.25x and a haircut on the
recovery rate by 25% would have no rating impact on the rated
notes.


NOVEM GROUP: S&P Assigns Prelim. 'B+' LongTerm ICR, Outlook Stable
------------------------------------------------------------------
S&P Global Ratings assigned a preliminary 'B+' long-term issuer
credit rating to Novem Group GmbH, with a stable outlook.

At the same time, S&P has assigned a preliminary 'BB' issue rating
with a recovery rating of '1' (90%-100%, rounded estimate 95%) to
the proposed EUR75 million super senior revolving credit facility
(RCF) and a preliminary 'B+' issue rating with a recovery rating of
'3' (50%-70%, rounded estimate 60%) to the proposed EUR375 million
senior secured floating rate notes due 2024.

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

The issuer credit rating primarily reflects Novem's leading
position in the niche market for high-end decorative trim elements
and above-average EBITDA margins, but also its narrow product
portfolio, high customer concentration reflective of premium
original equipment manufacturer (OEM) market, and S&P Global
Ratings-adjusted debt to EBITDA ratio of around 3.0x-3.5x.

Based on the company's estimate, Novem holds a strong global market
share of above 40%. The company's EBITDA margin has been above the
industry average, in the high teens for the past four years, owing
to the company's competitive industrial footprint with about 75% of
employees in low cost countries, an ongoing effort to reduce costs
through efficiency gains, and purchasing optimization. The benign
market environment has also contributed to the strong performance.

This has to be balanced with the highly concentrated customer mix,
with the top two customers accounting for about two-thirds of the
company's sales and with its narrow product offering. Novem's trim
elements can be made of different materials including wood,
aluminum, carbon, and synthetic plastics. However, its addressable
market is narrow at around EUR1.5 billion-EUR2.0 billion.

S&P said, "We view Novem's customer concentration as a key
constraint to our rating because the company's earnings are more
exposed than its peers' to potential production volume declines if
its main customers face operational headwinds.

"Pro forma the proposed transaction, we expect that Novem's free
operating cash flow to debt ratio will stand at about 10%, on the
back of stable EBITDA margins and lower capital expenditure (capex)
needs of about 3%-4% of sales in fiscal years 2019 and 2020. We
forecast that its S&P Global Ratings-adjusted debt to EBITDA ratio
will remain at around 3.0x-3.5x.

"While the expected credit metrics look conservative for the
rating, we incorporate a degree of cushion due to our perception of
the financial sponsor ownership. As a result, we do not net cash
from gross financial debt. The proposed notes documentation
includes a specified change of control clause under which the
noteholders cannot put the notes if consolidated net debt to EBITDA
is below 2.5x (which was already the case at launch).

"The proposed capital structure will include a shareholder loan
with terms that meet our requirements for equity treatment. We have
therefore excluded the shareholder loan from our adjustments to
Novem's reported debt. Our debt adjustments include pension
liabilities, operating lease liabilities, and factoring
liabilities.

"The stable outlook reflects our expectations than Novem will
maintain its EBITDA margin in the high teens over the next 12
months, despite the weakening auto market. In addition, we expect
the company to sustain S&P Global Ratings-adjusted debt to EBITDA
of around 3.0x-3.5x and free operating cash flow to debt of about
10%.

"We could lower our ratings on Novem if its funds from operations
(FFO) to debt decreased to below 12% or if its debt to EBITDA
increased toward 4.5x. A large debt-financed acquisition or
additional dividend recapitalization could also lead to a negative
rating action.

"We could raise our ratings on Novem if it significantly decreased
its customer concentration and extended its product offering while
maintaining EBITDA margin in the high teens and its FFO to debt at
around 20%."




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I R E L A N D
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SYNCREON GROUP: S&P Lowers ICR to 'CC' on Debt Exchange Offer
-------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on syncreon
Group Holdings B.V. (syncreon) to 'CC' from 'CCC-', and placing the
ratings on CreditWatch with negative implications. S&P also lowered
its issue ratings on syncreon's senior secured debt to 'CC' from
'CCC-'. The recovery rating remains '3'.  

The downgrade and CreditWatch negative placement follow the
agreement by over 75% in value of secured debt lenders and
unsecured notes holders to a debt-exchange offer and debt-to-equity
swap that covers all of the group's capital structure. If these
offers are accepted, the company will substantially reduce its
total debt by approximately $620 million, or by just over 60%.
syncreon is seeking to issue a $125.5 million first-lien, first out
senior secured term loan, which will be temporarily backstopped by
an ad hoc group of secured lenders. The proceeds of the loan will
be used for liquidity until the completion of the U.K. scheme of
arrangement, then to repay the approximately $75 million
outstanding under the existing $70 million asset-based loan (ABL)
due 2020. Upon repayment in full of the ABL, the company intends to
replace this facility with a new $135 million ABL.  

syncreon is offering to modify its existing senior secured debt,
which includes approximately $570 million outstanding under its
term loan due 2020 and $109 million under its payment-in-kind
revolving credit facility due 2020, into a new $225 million
first-lien, second out senior secured term loan. The remaining
balance will be converted into 80% of reorganized equity in the
company. Lenders that agree to the terms three business days before
the convening hearing in the proceeding will also receive an
additional 5.5% of reorganized equity on a pro rata basis. S&P
expects to assign ratings to the proposed senior secured credit
facilities over the coming months.

Finally, syncreon is proposing to convert all of its $225 million
unsecured notes due 2021 for 4.5% of reorganized equity, and 10%
warrants of reorganized equity. An additional 2.5% of reorganized
equity will be available on a pro-rata basis to noteholders that
agree to the terms three days before the convening hearing in the
proceeding.

The agreed-upon deal would result in investors receiving less than
promised under the original securities. Since this resulted from an
unsustainable capital structure, S&P views this as a distressed
transaction.

syncreon's business prospects remain constrained due to the
still-difficult operating environment. However, if this transaction
goes through, it will substantially alleviate the company's
interest burden and leverage, allowing the group to reinvest its
cash flow into growth projects and new contracts.

S&P said, "We aim to resolve the CreditWatch placement following
the completion of the debt and equity exchange. If the offer is
completed as planned, we expect to lower our issuer credit ratings
on syncreon to 'SD' (selective default), given that the group will
be conducting a distressed exchange offer. We would also lower the
issue ratings on the group's senior secured term loan and senior
unsecured notes to 'D' (default).

"If syncreon does not complete the offer or fails to receive the
minimum consents required, we will assess the company's
creditworthiness primarily based on our view of the likelihood of a
further distressed exchange offer."




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

[*] ITALY: Warned by Brussels of Rising Debt Levels
---------------------------------------------------
Mehreen Khan at The Financial Times reports that Brussels has sent
a letter warning Italy's populist government over its rising debt
levels, setting up a fresh clash between the EU and Rome less than
week after European elections.

According to the FT, the European Commission on May 29 wrote to
Italy's finance ministry asking for an explanation on the country's
deteriorating debt situation.

"Italy is confirmed not to have made sufficient progress towards
compliance with the debt criterion for 2018," said a letter
cosigned of by Valdis Dombrovskis, vice-president for the eurozone
and Pierre Moscovici, commissioner for the economy, and seen by the
FT.

The letter is the first stage of the commission's assessment of
Italy's public debt and budget deficit -- both of which have
deteriorated in 2019, the FT states.  Rome has until today, May 31,
to respond, the FT notes.

The commission is obliged to write to eurozone governments whose
debt levels are above the mandated limit of 60 per cent of GDP and
which are not falling in line with previously agreed targets, the
FT discloses.

Brussels, the FT says, is poised to revive a disciplinary process
against Italy should the government fail to convince the commission
it is taking sufficient measures -- like cutting spending and
raising taxes -- to bring down a debt burden which is the second
highest in the eurozone after Greece.




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

NOMAD INSURANCE: A.M. Best Alters Ratings Outlook to Stable
-----------------------------------------------------------
A.M. Best has revised the outlook to stable from negative for the
Long-Term Issuer Credit Rating (Long-Term ICR) and affirmed the
Financial Strength Rating (FSR) of C++ (Marginal) and the Long-Term
ICR of "b+" of Nomad Insurance Company JSC (Nomad Insurance), the
wholly owned subsidiary of Nomad Insurance Group Limited, a private
non-operating company (both entities are domiciled in Kazakhstan).
The outlook of the FSR remains stable.

The ratings reflect Nomad Insurance's balance sheet strength, which
AM Best categorizes as adequate, as well as its adequate operating
performance, limited business profile and weak enterprise risk
management.

The revision of the Long-Term ICR outlook to stable from negative
reflects AM Best's expectation that Nomad Insurance's risk-adjusted
capitalization will remain at a strong level, as measured by Best's
Capital Adequacy Ratio (BCAR), supported by positive operating
results. The company's risk-adjusted capitalization deteriorated in
2016 and 2017 due to an increase in net underwriting leverage and
significant dividend payments. AM Best had anticipated a further
decline in 2018. Instead, BCAR scores improved to a strong level
supported by an increase in retained earnings. An offsetting factor
for balance sheet strength is the company's elevated investment
risk profile, due to the high financial system risk in Kazakhstan.

Nomad Insurance has a track record of positive, albeit volatile,
operating performance, with a five-year average return on equity of
20.6% (2014–2018). Over this period, performance benefited from a
relatively low level of loss activity and Kazakhstan's
high-interest rate environment. The company's technical results are
pressured somewhat by high acquisition and management costs, but
profits have been reported in four out of the past five years. AM
Best does not expect the expense strain to ease in the near term
due to Nomad Insurance's high-cost distribution network and lack of
scale. Prospective performance may be subject to volatility due to
the challenging market conditions in Kazakhstan.

Nomad Insurance has an established business profile in Kazakhstan.
Based on regulatory returns as of Jan. 1, 2019, Nomad Insurance
ranked fourth out of 20 active non-life market participants in
Kazakhstan, with gross written premium of KZT 18.3 billion,
translating into an 8% market share. In 2018, the company lost its
leading position in local motor third-party liability insurance and
now ranks second within the segment. Going forward, the company
aims to focus on profitability, rather than growing market share.




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

MATADOR BIDCO: Fitch Gives First Time BB(EXP) Issuer Default Rating
-------------------------------------------------------------------
Fitch Ratings has assigned Matador Bidco S.a.r.l. an expected
Long-Term Issuer Default Rating (IDR) of 'BB(EXP)' with a Positive
Outlook. Fitch has also assigned expected issue ratings for the
senior secured term loan of 'BB(EXP)'/'RR4'.

In assigning the ratings, Fitch applied its Investment Holding
Companies Rating Criteria. Matador's IDR of 'BB(EXP)' has been
derived by notching against the existing Compania Espanola de
Petroleos, S.A.U (CEPSA opco; BBB-/Positive) rating based on such
factors as income stream quality, dividend diversification,
proportionate holdco leverage, liquidity, and dividend control and
stability.

Income stream quality was considered to be in line with the CEPSA
opco Long-Term IDR of 'BBB-'. A one-notch reduction was applied to
reflect the structural subordination of the holdco. Proportionate
CEPSA opco funds from operations (FFO) gross leverage of 2.5x
compares with proportionate holdco FFO gross leverage of 3.5x. This
additional leverage results in a further notch down versus the
CEPSA opco rating. No notching has been applied with regard to the
other factors listed above. The Positive Outlook mirrors the CEPSA
opco Outlook.

The assignment of final ratings is contingent upon the completion
of the financing by The Carlyle Group with terms and conditions in
line with Fitch's assumptions. The assignment of final ratings to
the debt is contingent upon receipt of final documents conforming
to the draft information already received.

Matador Bidco S.a.r.l

  LT IDR               BB(EXP) Expected Rating  
  LT senior secured    BB(EXP) Expected Rating

KEY RATING DRIVERS

Structural Subordination: Distributions from CEPSA opco are
Matador's sole source of earnings and cash flow to support its term
loan. Fitch views Matador's cash flow stream as having minimal or
no diversity and its obligations being structurally subordinated to
the operating needs at CEPSA opco and any future operating
subsidiary level borrowings. Fitch is concerned that distributions
could decline and pressure debt service at Matador if cash flow or
profitability at CEPSA opco is impaired. Nevertheless, changes to
dividend and financial policy will require Carlyle's consent as per
the current shareholder agreement signed between the two
shareholders.

Deleveraging Expected: CEPSA's opco standalone FFO gross adjusted
leverage forecast for 2019 is 2.5x following the acquisition of a
20% stake in the Abu Dhabi concession agreement in offshore oil and
gas fields. Fitch expects gradual deleveraging, which is an
additional consideration behind the current positive rating
Outlook. Overlaying Matador's debt with the opco debt on a
proportional consolidation basis implies a significantly more
leveraged entity than CEPSA opco with FFO gross leverage of 3.5x.

Strategy Unchanged under new Structure: Fitch understands that
CEPSA opco's strategy and financial policy will not change
following the change in shareholding structure. Fitch believes that
the introduction of a minority investor is neutral for the rating.
Dividends will be set by both shareholders in relation to the
company's financial results and no special dividends are planned.
Fitch does not expect any changes to the financial profile or
dividend policy of CEPSA opco following the shareholder change.
Matador will not have full operational control over CEPSA opco.

The relationship between the shareholders will be managed in line
with the shareholder agreement. Focus on investment-grade rating at
CEPSA opco is explicitly enshrined in the document, including a
limit to net leverage of 2.0x.

Integrated Business Model: CEPSA's integrated business model
implies lower volatility of earnings and higher resilience to oil
prices and refining margins than some of its less integrated peers,
such as Marathon Petroleum Corporation (BBB/Stable), Polski Koncern
Naftowy ORLEN S.A. (PKN; BBB-/Stable) and Turkiye Petrol
Rafinerileri A.S. (Tupras; BB+/Negative). CEPSA is present in four
major business segments, which exhibit relatively little
correlation: upstream (36% of EBITDA in 2018), refining (33%),
marketing (20%) and chemicals (14%). Upstream's share of total
earnings should increase over the next two years following the
company's production growth in Abu Dhabi.

Exposure to European Downstream: The European downstream sector has
suffered from overcapacity and structural imbalances, and Fitch
assumes refining margins will revert to their five-year averages
from the highs in 2015 and 2017. Capacity additions and refinery
modernisation in Russia, the Middle East and Asia over the next few
years could keep European downstream margins relatively low.
Overall, Fitch assesses CEPSA's exposure to the European downstream
sector as moderate.

DERIVATION SUMMARY

Matador's IDR of 'BB(EXP)' has been derived by notching against
CEPSA's rating based on factors including income stream quality,
dividend diversification, proportionate holdco leverage, liquidity,
and dividend control and stability.

Income stream quality was considered to be in line with CEPSA
opco's Long-Term IDR of 'BBB-'. A one-notch reduction was applied
to reflect the structural subordination of the holdco.
Proportionate CEPSA opco FFO gross leverage of 2.5x compares with
proportionate holdco FFO gross leverage of 3.5x. This additional
leverage results in a further notch down versus the CEPSA opco
rating. No notching has been applied with regard to the other
factors listed above.

KEY ASSUMPTIONS

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

- Oil price deck: USD65/barrel in 2019, USD62.5/bbl in 2020,
USD60/bbl in 2021 and USD57.5/bbl thereafter

- Benchmark refining margins: USD5/bbl in 2019, and USD5.5/bbl
thereafter; broadly stable petrochemical margins

- Upstream production rising from 58,000bbl/d in 2018 to around
90,000bbl/d by 2021 on the back of the Abu Dhabi assets ramping up

- Capex: on average EUR1.1 billion a year over the next five
years

- Annual Dividends: EUR400 million-EUR450 million over the next
five years at opco level

- Distributions consistent with Fitch's base-case forecast for
CEPSA opco

- Amortisation and cash flow sweep consistent with the proposed
term loan terms

RATING SENSITIVITIES

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

- Positive rating action on CEPSA opco

- A sustained decline in FFO gross adjusted proportional leverage
to below 2.5x

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

- Negative rating action on CEPSA opco

- A sustained increase in FFO gross adjusted proportional leverage
to above 4.0x

- Decrease in dividends to holdco leading to less than 2.0x debt
service coverage ratio (DSCR) or use of the debt service reserve
account (DSRA)




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

SECTOR ALARM: S&P Assigns Prelim 'B' LongTerm ICR, Outlook Stable
-----------------------------------------------------------------
S&P Global Ratings assigns its preliminary 'B' long-term issuer
credit rating to Norway-based Sector Alarm Holding AS and its
preliminary 'B' long-term issue-level and '3' recovery ratings to
the group's proposed EUR590 million (NOK6 billion) term loan B and
EUR100 million revolving credit facility.

The preliminary 'B' rating reflects Sector Alarm Holding AS'
(Sector Alarm's) high debt leverage, with S&P Global
Ratings-adjusted debt to EBITDA of around 5.6x expected at the end
of 2019, pro forma for the announced refinancing and distribution
to shareholders, its modest revenues, high geographic
concentration, and exposure to technology risks. The preliminary
rating is supported by the company's integrated business model,
with low customer attrition and predominantly recurring revenues
(95% of total revenues) resulting in predictable cash flows, and
its proven ability to penetrate and scale existing and new European
markets, which, given the low level of penetration in Europe, could
drive strong growth in the future.

Founded in Norway in 1995, Sector Alarm has a long history
providing professionally monitored security solutions in Europe,
focusing primarily on residential alarms, and has proven it can
penetrate and scale new European markets. However, with revenues of
around NOK2.3 billion (EUR230 million), Sector Alarm has modest
scale. In S&P's view, scale is critical in the alarm monitoring
industry given the cost of adding or replacing a customer and the
typically high level of attrition. Despite double-digit growth in
net subscribers, Sector Alarm is six times smaller than the
European leader Verisure and closer to 20 times smaller than U.S.
Prime Security, the global leader. Sector Alarm competes with
Verisure in its two main markets, Norway and Sweden. While Sector
Alarm is number two to Verisure in these markets, it has solid
market positions, with 40% share in Norway and 35% share in Sweden.
It is also the market leader in Ireland with 60% market share.

Despite its solid market positions, Sector Alarm has a high
geographic concentration, with 93% of 2018 revenues generated in
Norway, Sweden, and Ireland (established markets), although it has
recently expanded to Finland, France, and Spain (growth markets).
Additionally, its narrow scope and concentrated market position
exposes the company to industry disruption, especially given the
recent growth in the more innovative "smart home" space,
particularly in the U.S. Also, Sector Alarm generates around 70% of
its revenues through door-to-door sales distribution. While its
competence in sales has contributed to strong growth, we think
technology disruption (for instance, if customers adopt newer,
digital go-to-market strategies or "do-it-yourself" installations)
could have a negative impact on the company, although that has not
been the case so far.

S&P said, "We view Sector Alarm's vertically integrated presence in
the value chain positively. Its core offerings include sales,
installation, monitoring, and customer services. We believe its
deep level of involvement with its customers has contributed to
among the lowest attrition rates in the industry of around 6% (on
par with Verisure) compared to more narrowly focused U.S. alarm
companies peers, which generally have attrition rates above 10%."

Sector Alarm's growth markets are significantly less penetrated
than its established markets. Sector Alarm's growth markets have
market penetration (defined as the percent of residential dwellings
that utilize alarm monitoring services) in the 18%-27% range,
compared to 8%-14% penetration in its growth markets. S&P believes
Sector Alarm's track record of building market awareness in
underpenetrated European countries through its commission-based,
door-to-door sales strategy could lead to strong future growth.

S&P said, "We expect revenues to grow in the high-single-digit
percent range over the next 12 months driven by 3%-5% revenue
growth in its established markets and over 50% growth in its growth
markets, which currently represent 7% of revenues. Adjusted EBITDA
margins were around 43% of revenues in 2018. We expect EBITDA
margins to decline as the company invests in sales in marketing to
sustain growth in its maturing established markets, but to remain
above 40% through 2020.

"Our view of Sector Alarm's financial risk profile considers its
high leverage, with S&P Global Ratings-adjusted debt to EBITDA of
around 5.6x expected at the end of 2019, pro forma for the
transaction. The company is majority owned and controlled by its
founder, and we assume this will not change in the near term.
However, we do not expect significant deleveraging following the
transaction and we expect that the company will prioritize customer
acquisitions, especially in its growth markets, over debt
repayment. As a result, we believe adjusted debt to EBITDA will
remain above 5x through 2020. We expect minimal free cash flow
generation in the 12 months after transaction close. However, we
recognize that a large portion of annual capital expenditures (over
NOK600 million) relates to acquiring new customers, which we view
as more discretionary than capital costs necessary for operations.

"We rate several of Sector Alarm's peers in Europe and the U.S. We
view Verisure (B/Stable/--) as the closest peer to Sector Alarm
given its focus on Europe as the regional leader and its similar
value proposition to its customers. Although both companies have
comparable EBITDA margins, customer attrition, and track records of
growth, we view Verisure's business profile more favorably given
its much larger scale, its more geographically diversified revenue
base, and its larger market share in the mature countries that both
companies compete.

"The stable outlook reflects our expectation that the company will
continue to invest in subscriber growth resulting in strong annual
revenue growth of around 7%-10% through 2020, with adjusted EBITDA
margin in the low-40% range. We expect these investments will
result in minimal, but positive, free cash flow and adjusted debt
to EBITDA remaining above 5x through 2020.

"We could raise the rating if continued growth in EBITDA reduces
adjusted debt to EBITDA to less than 5x, supported by a more
conservative financial policy. An upgrade would require revenue and
EBITDA to at least remain stable.

"We could lower the rating if technological disruption, operational
missteps, or other factors result in declining EBITDA and negative
free cash flow, or if the company adopts a more aggressive
financial policy such that adjusted debt to EBITDA increases to
above 7x."




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

BORETS INT'L: Fitch Affirms 'BB-' LongTerm IDRs, Outlook Stable
---------------------------------------------------------------
Fitch Ratings has affirmed Borets International Limited's Long-Term
Foreign- and Local-Currency Issuer Default Ratings (IDR) at 'BB-'.
The Outlook is Stable. Fitch has also affirmed Borets Finance DAC's
senior unsecured rating at 'BB-'.

The ratings reflect Borets' lack of geographic, product and
customer diversification against the company's solid financial
profile with a Fitch-defined fund from operations (FFO) margin
exceeding 15% and sustainably positive Fitch-defined free cash flow
(FCF). The ratings also reflect its leading position in a niche
market in Russia and globally, stable demand for its key products
and a solid share of aftermarket service revenue.

KEY RATING DRIVERS

Squeezed FCF, but Sustainably Positive: In line with the company's
strategy towards increasing rental business Borets' working capital
needs increasing in 2018. Together with decreased revenue, EBITDA
and ongoing capex, this resulted in a reduction of FCF. However, it
remains positive and in line with the 'BB' mid-point for industrial
companies. Fitch forecasts Borets will generate continued positive
FCF supported by expected increasing Fitch-defined EBITDA and FFO
generation over the forecast horizon.

Revenue and Margin Decline in FY18: The top line and EBITDA margin
declined to USD545 million (FY17: USD600 million) and 27.2% (FY17:
30.4%), respectively, as a result of further rouble depreciation
and lower service activity, due to the reduced share of business
from Rosneft, the company's largest customer. The oil major is in
the process of diversifying and expanding participants in its
supply chain, which affected Borets. Fitch does not expect any
further reduction of Borets' Russian business and with
international expansion expect stable or slightly increasing
margins. However, given the FY18 underperformance relative to
Fitch's previous expectations, a continued decline in the operating
performance would likely move the company close to Fitch's negative
rating sensitivities.

Growing Rental Business: Borets provides aftermarket services to
oil producers globally, but primarily in Russia, based on a wide
network of service centers located close to major oilfields. In
addition, the company is aiming to enlarge its rental services
business, which is more profitable and together with the long-term
nature of rental contracts, enhances Borets' profit inflows. The
company intends to maintain a high share of service and rental
income at over 40% of total revenue, which distinguishes it from
other Russian industrial peers. An increase in the rental business
is marginally positive for Borets in the medium term.

Customers Concentration Still High: Borets' key customers are large
oil majors, including Rosneft, with a share that has decreased to
29% in 2018 from about 42% in 2017, enabling a certain customer
diversification improvement. Nevertheless, with the top five
customers contributing about 55% of total revenue in 2018, customer
concentration is still high. The decrease in Borets' revenue in
2018 was partly driven by reducing service revenue from Rosneft,
which also slightly eroded the company's EBITDA profitability. The
contraction of the business with Rosneft is offset by the growing
order book from other Russian oil majors and from the international
expansion that should support Borets' profitability in the medium
term.

Among Leaders in Niche Market: Borets specializes primarily in the
production of electrical submersible pump (ESP) systems and is the
leading manufacturer globally, with a market share of about 26% by
installed base, and the third-largest global player in value terms.
Almost all global oil wells rely on artificial lift technology, of
which ESP systems contribute about 16% by unit and about 45% by
value. A strong position, successful long-term cooperation with
major oil producers and high capital expenses in manufacturing
facilities act as significant barriers to entry in the company's
niche market.

Robust Operating Profile: Stable demand for ESPs has a low to
moderate correlation with oil price fluctuations as these systems
are vital for oil producers and funds spent on it are viewed as
operating expenses rather than capex. Oil production would be
impossible in existing oilfields without ESP systems. Installed
ESPs have to be replaced at the end of their average life cycle of
two to five years due to the severe environment of the wellbore.
The resilience of the ESP market to oil price fluctuations provides
sustainable revenue generation for Borets in the long term.

Strong FFO Generation: Borets has historically reported a healthy
EBITDA margin and generated positive free cash flow (FCF) of over
2% on a sustained basis and FFO exceeding 15%, which enables the
group to repay debt and finance business operations. Solid cash
flow generation is rating positive, positioning Borets favorably
with peers. In addition, the company benefits from mainly
rouble-linked costs and a leading market position.

Limited Diversification: Borets' ratings are constrained by limited
geographic diversification and a narrow range of products. Borets
derives the majority of its revenue from Russia. Revenue generated
outside Russia represented 25%-35% of total sales over the last two
years. The company is developing its international business and
plans to expand it to around 45% of total revenue by 2019-2020.
Business activity is primarily focused on the production of ESP
systems for oil extraction, making its revenue sensitive to an
output of oil producers as key customers. The limited range of
products is mitigated by a material share of more profitable
aftermarket services and rental revenues as well as the resilient
nature of ESP business, resulting in a stable demand for ESP in the
long term.

Moderate FX Risk: Borets' revenue and cost structure are favorable
in terms of currencies. The majority of costs are linked to roubles
while the company's revenue linked to non-rouble currencies will
increase from about 35% to 45% in the medium term. The majority of
the company's debt is US dollar-denominated. Should the rouble
depreciate sharply, there is a risk of a considerable increase in
leverage. Fitch's base case does not include major movements in the
USD/RUB exchange rate.

DERIVATION SUMMARY

Borets' ratings reflect its leading market position in a niche
market, stable long-term demand for ESPs produced by the company,
higher profitability in comparison to peers, the solid share of
service revenue and positive FCF generation on a sustained basis,
albeit squeezed in 2018. Borets' strong market position and the
sustainability of the business offset its relatively small scale of
operations versus international peers, lack of customer and
geographic diversification and limited product range.

Borets is one of the top ESPs producers globally. The company is
less geographically diversified and has a limited product range
compared with international peers like Flowserve Corporation
(BBB-/Negative).

Borets has a good financial profile, maintaining FFO-adjusted net
leverage at around 3.0x, which is comparable with JSC HMS Group
(HMS; B+/Stable), but higher than JSC Transmashholding (TMH;
BB/Stable). Borets is better-positioned relative to HMS due to the
higher share of service revenue and sustainably positive FCF.

No Country Ceiling, parent/subsidiary or operating environment
aspects have an impact on the rating.

KEY ASSUMPTIONS

Fitch's Key Assumptions Within Its Rating Case for the Issuer

- The low single-digit decrease in revenue in 2019 and
   a further slight rise in revenue in 2019-2022 of 3% annually

- EBITDA margin averaging at around 28% during 2019-2022
   which should remain at a high level due to an expanding,
   more profitable rental and international business

- Capex increases to about 5% of revenue in 2019 mainly due
   to international expansion. This figure is expected to
   ease to about 4.5% of revenue thereafter

- Repayment of debt in line with the maturity schedule

- No dividend payments over 2019-2022

RATING SENSITIVITIES

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

-- An upgrade is unlikely unless the business profile
    improves materially, including a major increase in
    scale and improvement in geographical diversification

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

-- FCF margin below 1% on a sustained basis

-- Extensive capex, acquisition programme or significant
    adverse change in the dividend policy

-- FFO adjusted net leverage above 3.5x on a sustained basis

-- FFO fixed charge coverage below 3.0x on a sustained basis


KOKS GROUP: Fitch Affirms B Issuer Default Ratings, Outlook Stable
------------------------------------------------------------------
Fitch Ratings has affirmed Russian pig iron company PAO Koks
Group's (the group) Long-Term Foreign- and Local-Currency Issuer
Default Ratings (IDRs) at 'B' with Stable Outlooks. Koks Finance
DAC's senior unsecured bond rating has been affirmed at
'B'/RR4/45%. The affirmation and Stable Outlook reflect Fitch's
view that despite higher leverage than Fitch previously expected
(4.7x in 2018 remaining above 4.0x over the rating horizon, vs. the
previous estimate of 3.5x), the company's main projects are on
track, as demonstrated by the recent completion of the Tula-Steel
facility and by the continued efforts toward increased vertical
integration.

KEY RATING DRIVERS

Leverage Expected to Rebase Above 4x: FFO adjusted leverage
increased to 4.7x in 2018 from 4x in 2017, largely due to a
combination of unfavorable FX effects on US dollar-denominated debt
and additional financing of the Tula-Steel project. Fitch expects
leverage to remain in the range of 4.3x to 4.5x over the rating
horizon. Fitch conservatively assumes the Tula-Steel Project to
still require additional funding from Koks over the next three
years to ensure coverage of Gazprom Bank maturities during the
ramp-up period. In addition, Fitch assumes that a significant
increase in the company's capex will be required in 2020-2022, to
continue the efforts toward vertical integration, particularly in
iron ore and the pig iron segment.

Tula-Steel Project Completed: The plant is running commissioning
tests and will be commissioned in July 2019. Koks's subsidiary PJSC
Tulachermet, Sipco B.V., and OOO Stal, which are ultimately
controlled by the Zubitskiy family, all have or had various level
of equity interests in the project over the last few years. At
present, the group temporarily holds 33% of the project, but this
ownership is expected to be transferred to another entity under a
common shareholder control. The group has been the sole project
investor (around RUB20 billion lent to date) excluding
Gazprombank's committed RUB30 billion project financing (end-2018:
RUB27 billion drawn).

Tula-Steel will produce specialty steel for the machinery and
automotive sectors, sourcing hot pig iron from the Tulachermet
plant. Koks may consider consolidating Tula-Steel when the project
generates enough cash to ensure deleveraging to the level
comparable with that of the group. Fitch currently do not
consolidate the project due to the lack of other risks than
construction and moderate strategic importance to the group.

Vertical Integration to be Achieved by 2025: At present, the
company's self-sufficiency stands at 63% in coal and 76% in iron
ore concentrate. The coal production increase is driven by the
expansion of the Tikhova and Butovskaya mines launched in 2017. The
output from these mines is expected to ramp up in stages, with the
second stage on the Tikhova mine in 2024 to allow the company to be
fully self-sufficient in coal by 2025.

Ramp up in iron ore production is dependent on the development of a
second mining level at KMAruda. The mining is expected to start in
2H19, increasing self-sufficiency to 85%-90% by 2025. Other
significant investment projects include the reconstruction of the
blast furnace at Tulachermet and the new type coke battery at
Kemerovo cocking plant in 2024. The maintenance CapEx represents
around RUB2 billion and management has publicly affirmed that the
CapEx programme is flexible and can be postponed, prioritizing the
deleveraging. However, in its forecasts, Fitch incorporates the
capital intensity ratio to average 12% over the next four years and
to remain between RUB10 billion and RUB12 billion (Fitch
assumption) to enable the group to proceed with the volume increase
and productivity improvements.

Strong Pig Iron and Coke Position: The group is Russia's largest
merchant coke producer and the world's largest exporter of merchant
pig iron with a 16%-17% market share, with North America and Europe
the key destinations. The group specializes in commercial pig iron
and focuses on increasing its presence in premium pig iron used in
the automotive, machinery and tools industries, requiring
high-purity pig iron with low sulfur and phosphorus content.

Material Related-Party Transactions: Koks' significant
related-party transactions include the loan funding of the
Tula-Steel. The entity equity holders are jointly and severally
liable to any Tula-Steel project funding shortfall.

Koks' pig iron exports, totaling RUB50 billion, or 55% of the
group's RUB90 billion revenues in 2018, were routed through a
trader that the company's auditors qualify as a related party under
common control. Given the arms-length basis of trading operations,
with the limited difference between realized and market-based pig
iron dynamics, and taking into account the relatively small pig
iron merchant market with a limited number of traders, Fitch does
not currently view this as a significant risk to the company's
profile. The company intends to change its trader to another
related party this year. This does not change Fitch's risk
assessment.

DERIVATION SUMMARY

Koks ranks behind CIS metals and mining closest peers Evraz (BB+),
Metalloinvest (BB+) and METINVEST B.V. (B+ capped by the sovereign)
in terms of the scale of operations, operational diversification
and share of value-added products. Koks' scale is more comparable
with Ukrainian pellet producer Ferrexpo (B+/Stable) while its
margins fall behind.

Koks' financial profile, including its financial leverage and
operational margins, ranks behind that of Evraz, Metalloinvest and
METINVEST's. No Country Ceiling, parent/subsidiary or operating
environment aspects impact the rating.

KEY ASSUMPTIONS

Fitch's Key Assumptions Within Its Rating Case for the Issuer

- Tikhova and Butovskaya mines ramp up by 2025, starting
   to contribute to EBITDA margin improvement of 21%-23% in
   2020-2021;

- USD/RUB rate of 67.5 in 2019-2022 ;

- average capex/sales of 12%

- no dividends during 2019-2022;

- Tula-Steel is not consolidated

- RUB4 billion-RUB5 billion loans to non-consolidated
   Tula-Steel in 2019

- Fitch does not assume any recovery of the amounts
   invested in Tula-Steel in the next four years.

Fitch's Key Recovery Rating Assumptions:

The recovery analysis assumes that Koks would be considered a going
concern in bankruptcy and that the company would be reorganized
rather than liquidated. Fitch has assumed a 10% administrative
claim in the recovery analysis.

Koks' recovery analysis assumes a post-reorganization EBITDA at
RUB13 billion, or 25% below its last 12 months EBITDA of RUB17
billion, to incorporate the potential price moderation and
volatility across Koks' product portfolio. A distressed EV/EBITDA
multiple of 4.5x has been used to calculate post-reorganization
valuation and reflects a mid-cycle multiple. This is in line with
other natural resources 'B' rating category issuers reflecting the
substantial market position in global merchant pig iron market and
adequate growth prospects.

Fitch's assumptions result in a 45% recovery corresponding to an
'RR4' recovery for the senior unsecured loan participation notes
which rank pari passu with other senior unsecured drawn and undrawn
committed debt across the group and subordinated to the secured
drawn and undrawn committed debt. Hence the 'B' senior unsecured
rating is in line with Koks' IDR.

Fitch will update its recovery analysis in case of a consolidation
of Tula-Steel (the entity under common shareholder control) into
the group's perimeter.

RATING SENSITIVITIES

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

- FFO adjusted leverage at or below 3x

- Enhanced business profile through larger scale and/or
   product diversification

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

- FFO adjusted gross leverage above 4.5x driven by market
   deterioration or underperformance of new

capacities or by more significant than expected support to
Tula-Steel

- Increasing reliance on short-term debt financing or
   tightening of liquidity with liquidity ratio falling below 1x

- FFO fixed charge falling to below 2.0x


MTS BANK: Fitch Alters Outlook on IDR to Stable & Confirms BB- IDR
------------------------------------------------------------------
Fitch Ratings changed the outlook on the issuer's default long-term
issuer rating (IDR) of MTS-Bank PJSC from "Negative" to "Stable"
and confirmed long-term IDR at the level "BB-". This action follows
the corresponding rating action with respect to the bank’s parent
structure, Mobile TeleSystems PJSC.

KEY RATING FACTORS

OF IDR AND RATING SUPPORT

IDR and MTS-Bank support rating is conditioned by potential support
from the parent structure of the bank, MTS, if necessary. According
to Fitch, MTS has a high willingness to provide bank support with a
majority of 95% stake in the bank, strategic advantages due to
synergies between the bank and the telecommunications company,
which can be realized with increasing integration, as well as a
common brand and reputational factors.

The two-level difference between the ratings of MTS and MTS Bank
reflects the limited size of the business of the subsidiary and
therefore the limited strategic importance of the bank to the
parent company, still low, although increasing integration with the
parent structure and a limited history of profitable activities.

FACTORS WHICH CAN IMPACT ON RATINGS IN FUTURE

IDRES AND RATING SUPPORT

The IDR and bank support rating are affected by MTS ratings or any
changes in the readiness of the parent structure to support.

Rating Actions are taken:

  Long-term IDR affirmed at 'BB-', outlook changed
  from 'Negative' to 'Stable'

  Short-term IDR affirmed at "B"

  Resilience rating "b+" is not affected by rating action.

  Support rating is affirmed at "3".


NOVIKOMBAK JSCB: Moody's Hikes LongTerm Deposit Ratings to 'Ba3'
----------------------------------------------------------------
Moody's Investors Service upgraded Novikombank JSCB's long-term
deposit ratings to Ba3 from B1, its Baseline Credit Assessment
(BCA) and Adjusted BCA to b2 from b3, its long-term Counterparty
Risk Assessment to Ba2(cr) from Ba3(cr), and its long-term
Counterparty Risk Ratings to Ba2 from Ba3. The rating agency
affirmed the bank's Not Prime short-term deposit ratings, Not
Prime(cr) short-term Counterparty Risk Assessment, and Not Prime
short-term Counterparty Risk Ratings. The outlook on the Ba3
long-term bank deposit ratings was changed to stable from positive.


RATINGS RATIONALE

The upgrade of Novikombank's long-term deposit ratings and its
Baseline Credit Assessment reflects the improvement in the bank's
solvency metrics as well as improved earnings generation relative
to its risk appetite, following the increased integration of the
bank's operations with its shareholder, the Russian state-owned
corporation Rostec (not rated).

While still remaining weak and providing limited resilience to
potential impairments of largest credit exposures, Novikombank's
ratio of Tangible Common Equity to Risk Weighted Assets increased
to 6.6% as at December 31, 2018 from 2.0% as at December 31, 2017.
The bank not only improved its capital adequacy ratio in 2018 but
also decreased the ratio of problem loans to gross loans to 8.5%
from 23.6% and improved its coverage of problem loans by loan loss
reserves to 111% from 80%. Along with the recovery of the bank's
capital adequacy metrics, the recent inflow of customer funds
helped the bank to expand its corporate business, boosting net
interest income and operating efficiency. Moody's expects the bank
to generate annual operating income before loan loss provisions and
taxes at around 2-3% of its average assets in 2019-2020. This
improved earning generation capacity provides a reasonable buffer
in order to shield the bank's still limited capital metrics from
unexpected asset impairments, given existing high single-name
concentrations in the loan book.

Because new loans are now mostly made to state-owned companies of
strategic importance for the Russian government, Moody's believes
asset risks to be limited in the medium term, such that the
currently strong operating performance will enable Novikombank to
generate sufficient capital to balance the ongoing rapid growth of
the loan book.

The bank's liquidity profile compares well to lower-rated Russian
peers. Most of the non-equity funding is sticky in nature because
largest deposits are attracted from companies that are controlled
by Rostec. At the same time, a large cushion of liquid assets (cash
equivalents and liquid bonds), at above 40% of customer funds,
provides a good buffer against the risk of decline in deposits
caused by operational needs of the bank's largest clients.

OUTLOOK

The stable outlook on Novikombank's long-term deposit ratings
reflects the bank's recently stabilized credit profile as reflected
in its b2 baseline credit assessment and is aligned with the stable
outlook on the Russian government's Baa3 issuer ratings. Moody's
continues to incorporate a high level of support from the Russian
government that lifts the bank's Ba3 deposits ratings two notches
above its b2 BCA.

WHAT COULD MOVE THE RATINGS UP/DOWN

The bank's long-term ratings and BCA could be upgraded in the event
of further improvements in solvency, thanks to profit retention
resulting in higher capital adequacy, in combination with a more
granular loan portfolio and deposit base.

Novikombank's ratings may be downgraded if the quality of its
largest credit exposures were to weaken, profitability or capital
were to decline, or if the Russian government's capacity or
propensity to support the bank were to diminish.

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Banks published
in August 2018.

LIST OF AFFECTED RATINGS

Issuer: Novikombank JSCB

Upgrades:

  LT Bank Deposits, upgraded to Ba3 from B1, Outlook Changed
  to Stable from Positive

  Baseline Credit Assessment, Upgraded to b2 from b3

  Adjusted Baseline Credit Assessment, Upgraded to b2
  from b3

  LT Counterparty Risk Assessment, Upgraded to Ba2(cr)
  from Ba3(cr)

  LT Counterparty Risk Ratings, Upgraded to Ba2 from Ba3

Affirmations:

  ST Counterparty Risk Assessment, Affirmed NP(cr)

  ST Counterparty Risk Ratings, Affirmed NP

  ST Bank Deposits, Affirmed NP

Outlook Action:

  Outlook Changed to Stable from Positive




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

CAIXABANK CONSUMO 3: Moody's Affirms B3 Rating on Class B Notes
---------------------------------------------------------------
Moody's Investors Service has upgraded the rating of Class A Notes
and affirmed the rating of Class B Notes in CAIXABANK CONSUMO 3,
FONDO DE TITULIZACION. The rating action reflects the increased
level of credit enhancement for the Class A Notes.

-- EUR2278.5 million Class A Notes, Upgraded to Aa1 (sf);
    previously on Jul 25, 2018 Upgraded to Aa3 (sf)

-- EUR171.5 million Class B Notes, Affirmed B3 (sf);
    previously on Jul 25, 2018 Confirmed at B3 (sf)

CAIXABANK CONSUMO 3, FONDO DE TITULIZACION is a static cash
securitisation of unsecured consumer loans as well as consumer
loans backed by first lien and second lien consumer mortgages and
consumer drawdowns of related mortgage lines of credit extended to
obligors in Spain by Caixabank, S.A.

RATINGS RATIONALE

The rating action is prompted by an increase in credit enhancement
available for the affected tranches. Moody's affirmed the ratings
of the tranches that had sufficient credit enhancement to maintain
their current ratings.

Increase in Available Credit Enhancement:

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

The credit enhancement for the Class A Notes increased to 20.7%
from 15.1% since the last rating action in July 2018.

In the analysis Moody's has taken into account that a portion of
the credit enhancement is provided by a reserve fund which is not
allowed to amortise the first two years after closing, i.e. until
July 2019. Currently the reserve is fully funded, standing at EUR
98 million, equal to approximately 7.5% of the outstanding Class A
and Class B Notes balance. After two years from closing have
passed, the reserve fund will be allowed to amortize to its dynamic
target amount defined as 4% of the outstanding balance of Class A
and Class B Notes.

The rating action took into consideration the Notes' exposure to
relevant counterparties, such as servicer or account bank.
Counterparty risk exposure does not constrain the ratings of the
Notes.

Principal Methodology:

The principal methodology used in these ratings was "Moody's
Approach to Rating Consumer Loan-Backed ABS" published in March
2019.

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

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

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


RURAL HIPOTECARIO VII: Moody's Affirms Caa2 on Class D Notes
------------------------------------------------------------
Moody's Investors Service has downgraded the ratings of four Notes
and affirmed the ratings of eight Notes in three Spanish RMBS
transactions. The rating action reflects deterioration in the
levels of credit enhancement for the affected notes, taking into
account better than expected collateral performance.

Moody's affirmed the ratings of the notes that had sufficient
credit enhancement to maintain the current ratings on the affected
notes.

List of Affected Credit Ratings:

Issuer: RURAL HIPOTECARIO VIII, FTA

  EUR802.4 million Class A2a Notes, Affirmed Aa1 (sf); previously
  on Jun 29, 2018 Affirmed Aa1 (sf)

  EUR350 million Class A2b Notes, Affirmed to Aa1 (sf); previously
  on June 29, 2018 Affirmed Aa1 (sf)

  EUR27.3 million Class B Notes, Downgraded to Baa1 (sf);
  previously on Jun 29, 2018 Upgraded to Aa3 (sf)

  EUR15.6 million Class C Notes, Affirmed Ba2 (sf); previously
  on Jun 29, 2018 Upgraded to Ba2 (sf)

  EUR7.2 million Class D Notes, Affirmed Caa2 (sf); previously
  on Jun 29, 2018 Affirmed Caa2 (sf)

Issuer: RURAL HIPOTECARIO IX, FTA

   EUR1021.7 million Class A2 Notes, Downgraded to A1 (sf);
   previously on Jun 29, 2018 Upgraded to Aa2 (sf)

   EUR210 million Class A3 Notes, Downgraded to A1 (sf);
   previously on Jun 29, 2018 Upgraded to Aa2 (sf)

   EUR29.3 millio Class B Notes, Affirmed Ba1 (sf);
   previously on Jun 29, 2018 Upgraded to Ba1 (sf)

   EUR28.5 million Class C Notes, Affirmed B3 (sf);
   previously on Jun 29, 2018 Affirmed B3 (sf)

Issuer: RURAL HIPOTECARIO XI, FTA

   EUR2113.1 million Class A Notes, Affirmed Aa1 (sf); previously
   on Jun 29, 2018 Affirmed Aa1 (sf)

   EUR25.3 million Class B Notes, Downgraded to A1 (sf);
   previously on Jun 29, 2018 Upgraded to Aa3 (sf)

    EUR61.6 million Class C Notes, Affirmed Baa3 (sf); previously
    on Jun 29, 2018 Upgraded to Baa3 (sf)

RATINGS RATIONALE

This rating action is prompted by a reduction in the levels of
available credit enhancement as a result of amortizing reserve
funds and repayment of mezzanine and junior notes ahead of the
senior notes in the three transactions, taking into account better
than expected collateral performance.

Moody's affirmed the ratings of the notes that had sufficient
credit enhancement to maintain the current ratings.

Decrease in Available Credit Enhancement:

Triggers related to 90 days+ delinquencies were breached for a
number of periods before the time of the last rating action in June
2018 on the affected notes, resulting in no amortization of reserve
funds nor mezzanine or junior notes. Some of these triggers have
now cured which drove reserve funds amortizations and cash being
allocated to repay mezzanine and junior notes to reach the ratios
(percentages of outstanding notes) contemplated in the
documentation.

For RURAL HIPOTECARIO VIII, FTA, the reserve fund reduced from
EUR11.7 million to EUR5.85 million (floor level) in July 2018; for
RURAL HIPOTECARIO IX, FTA, the reserve fund started amortizing in
August 2018, when it decreased from EUR15.0 million to EUR8.6
million, and continued to amortize down to EUR8.2 million in
February 2019; for RURAL HIPOTECARIO XI, FTA, the reserve fund
reduced from EUR71.5 million to EUR52.9 million in June 2018 and
continued to amortize down to EUR48.9 million in March 2019.

As a result credit enhancement for the affected notes reduced as
following, compared to the levels considered at the time of the
last rating action taken in June 2018:

RURAL HIPOTECARIO VIII, FTA:

-- Class A2a notes to 11.79% from 21.41%;
-- Class A2b notes to 11.79% from 21.41%;
-- Class B notes to 7.59% from 11.95%;
-- Class C notes to 5.19% from 6.55%;
-- Class D notes to 2.33% from 4.05%.

RURAL HIPOTECARIO IX, FTA:

-- Class A2 notes to 11.11% from 16.04%;
-- Class A3 notes to 11.11% from 16.04%;
-- Class B notes to 7.20% from 12.13%;
-- Class C notes to 3.40% from 5.73%;
-- Class D notes to 2.00% from 3.37%.

RURAL HIPOTECARIO XI, FTA:

-- Class A notes to 14.40% from 18.22%;
-- Class B notes to 12.10% from 15.92%;
-- Class C notes to 6.50% from 8.55%.

Revision of Key Collateral Assumptions:

As part of the rating action, Moody's reassessed its lifetime loss
expectation for the portfolios reflecting the collateral
performance to date.

The performance of the transactions has continued to improve since
June 2018. Total delinquencies have decreased in the past year,
with 90 days plus arrears currently standing at 0.71% as of April
2019 current pool balance for RURAL HIPOTECARIO VIII, FTA, at 0.67%
of February 2019 pool balance for RURAL HIPOTECARIO IX, FTA and at
0.81% of March 2019 pool balance for RURAL HIPOTECARIO XI, FTA.
Cumulative defaults remained stable at 2.1% of original pool
balance for RURAL HIPOTECARIO VIII, FTA, at 5.3% for RURAL
HIPOTECARIO IX, FTA and at 3.4% for RURAL HIPOTECARIO XI, FTA.

Moody's decreased the expected loss assumption to 1.6% of original
pool balance from 1.8% for RURAL HIPOTECARIO VIII, FTA, to 3.8%
from 4.1% for RURAL HIPOTECARIO IX, FTA and to 2.9% from 3.5% for
RURAL HIPOTECARIO XI, FTA due to the improving performance.

Moody's has also assessed loan-by-loan information as a part of its
detailed transaction review to determine the credit support
consistent with target rating levels and the volatility of future
losses. As a result, Moody's has decreased the MILAN CE assumption
to 10% from 10.5%, to 13% from 15% and to 12% from 13% for RURAL
HIPOTECARIO VIII, FTA, RURAL HIPOTECARIO IX, FTA and RURAL
HIPOTECARIO XI, FTA respectively.

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


VALENCIA: S&P Alters Outlook to Stable & Affirms 'BB/B' ICRs
------------------------------------------------------------
S&P Global Ratings on May 24, 2019, revised its outlook on the
Autonomous Community of Valencia to stable from positive, and
affirmed its 'BB/B' long- and short-term issuer credit ratings on
the region.

Outlook

The stable outlook on Valencia reflects S&P's expectation of
continued central government support for the region, which in its
view mitigates the risks arising from Valencia's high deficits and
very high levels of indebtedness.

Downside scenario

S&P could downgrade Valencia if it expected the region to increase
expenditure in a way that would lead to materially widening
budgetary deficits, which could bring into question the regional
government's commitment to budgetary consolidation.

Upside scenario

S&P said, "We could upgrade Valencia if the central government
wrote off a substantial portion of the loans it lent to the region.
We would not consider debt relief from the central government a
default, given our view of Valencia's debt with the central
government as intergovernmental debt.

"We could also upgrade Valencia if the region's budgetary
performance materially improved, signaling a renewed commitment to
budgetary consolidation, so that we forecast deficits after capital
accounts structurally below 10% of total revenue."

Rationale

S&P said, "The outlook revision reflects our view that there is now
a lower likelihood of Valencia outperforming our base-case scenario
and structurally improving its budgetary performance. We currently
expect the region will continue posting sizable negative operating
balances and only slightly declining deficits after capital
accounts during our forecast period through 2021."

Valencia increased its operating deficit to 8.4% of operating
revenue in 2018, from 4.4% in 2017. This followed lower revenue
growth than the region expected, coupled with higher expenditure
growth than S&P anticipated, as the region tries to catch up with
the Spanish average in terms of per capita spending on essential
social services. Valencia's budgetary performance suffers from the
region's continued below-average funding compared with other
Spanish normal-status regions.

S&P said, "Despite the challenges that the regional financing
system poses for Valencia, we expect the region's revenue will
continue to expand, driven by Spain's (and Valencia's) ongoing
economic recovery. Despite relatively high deficits, this should
allow Valencia to stabilize its very high debt burden. In our
previous base case, we envisaged a slight deleveraging in relative
terms.

"At the same time, the rating affirmation reflects our view of the
strength and reliability of central government liquidity support,
which we expect will continue to be available to Valencia as
required through our forecast horizon to 2021."

Valencia benefits from a supportive framework, but the regional
financing system is not favorable to the region

S&P said, "We believe that the Spanish institutional framework
under which Valencia operates is generally supportive. Spain's
central government provides financial support to the regional tier
via liquidity facilities that were first created in 2012. These
facilities have gradually evolved to meet practically all of the
funding needs of those regions that adhere to them, including
Valencia, on very favorable terms. From 2012 to March 2019, the
region received about EUR43 billion from these liquidity
facilities, and an additional EUR8.8 billion to finance supplier
payables between 2012 and 2014. About 83% of Valencia's debt at
year-end 2018 is due to the central government's liquidity
facilities.

"However, we think that the regional financing system still suffers
from weaknesses. In our view, the main drawback is the difficulty
in matching revenues and expenditures, especially at low points of
the economic cycle. Reform of the system is overdue, in our view.
While technical analysis has advanced, with several proposals on
the table from experts and regions, we understand the current
electoral cycle (with national and regional elections in 2019), as
well as a generally fragmented political spectrum, has once again
delayed the political negotiations that would be required to change
the system. We therefore can't predict the timing or extent of a
potential reform.

"Overall, we continue to deem this reform as crucial to ensuring
the long-term sustainability of Spanish regional finances. Given
the comparatively very low levels of funding that Valencia receives
from the current system, such a reform is even more urgent for the
region.

"With Spain's economic growth continuing (albeit at a gradually
slower pace, according to our forecasts), and despite the absence
of a new financing system, regions' revenues continue to expand,
although in 2018 Valencia's growth was slower than other Spanish
regions'.

"Given the strong equalization component of Spain's public finance
system for normal-status regions, we take national GDP per capita
figures into consideration when evaluating the economy of such
regions. We expect economic growth will translate into higher
revenue for Valencia. However, we also factor in that Valencia's
socioeconomic profile is less favorable than that of other Spanish
regions. Valencia's GDP per capita is 87.5% of the national
average, based on 2018 data from the national statistics office.
The region's unemployment rate, at 14.3% of the active population,
is now largely in line with the national average, but continues to
be high in an international comparison. We believe that Valencia's
relatively weak socioeconomic profile is not adequately compensated
by Spain's equalization system."

Valencia has so far failed to comply with the official deficit
targets set by the central government even though its deficit has
materially shrunk since the crisis years. In 2014, Valencia posted
a deficit of 2.6% of regional GDP, which has gradually fallen,
reaching 0.82% of regional GDP by 2017. However, in 2018 the
deficit climbed back up to 1.29%, against a target of 0.4%.

High deficits and very high debt burden remain long-term
constraints

S&P said, "We expect Valencia to continue recording very weak
budgetary performance, with a sizable operating deficit for the
next three years, despite growing revenues. Nevertheless, we
estimate operating deficits and deficits after capital accounts
should gradually improve over the period.

"We expect Valencia's revenue will continue expanding on the back
of Spain's economic recovery. We assume an annual increase in
operating revenue of 3.5%, on average, over 2019-2021, broadly in
line with our projections of Spain's nominal GDP growth."

Valencia has included in its 2019 budget, as it did in previous
years, about EUR1.3 billion of additional transfers from the
central government as a way to request the reform of the regional
financing system and offset the region's structural underfunding.
However, the central government has yet to grant these amounts or
overhaul the system, and S&P therefore does not include them in its
assessments.

S&P said, "In our base case, we anticipate that Valencia's
operating expenditure will increase by close to 3% annually over
2019-2021--below the growth rate of operating revenue.
Consequently, we expect Valencia will reduce its operating deficit
to close to 6.6% of operating revenue by 2021, from 8.4% in 2018.
At the same time, we expect the region to only gradually reduce its
deficit after capital accounts, to 10.6% of total revenue in 2021
from 13.3% in 2018.

"In our view, Valencia's budgetary flexibility is weak, given the
region's limited ability to cut expenditure. The region's operating
expenditure per capita is already among the lowest in Spain,
reflecting the region's relative underfunding. This largely
explains the obstacles the region faces in reducing its deficits.

"We expect Valencia will continue accumulating debt in nominal
terms and therefore its debt will remain very high. Nevertheless,
thanks to expanding revenue and gradually amortizing company debt,
we estimate that tax-supported debt will stabilize at about 330% of
consolidated operating revenue during our forecast horizon of
2019-2021.

"We take into account that the central government is refinancing
the region's long-term debt. Importantly, debt maturities of
companies under the scope of European System of National and
Regional Accounts (ESA)-2010 are eligible for central government
funding as well. This mitigates the risk arising from Valencia's
large stock of tax-supported debt, in our opinion.

"In our view, the regional government's measures to streamline its
public-sector companies and directly manage its debt limit the
impact of these companies on Valencia's credit profile. We include
all of the debt of Valencia's satellite companies in our
calculation of tax-supported debt. Given the broad perimeter of
consolidation, we believe Valencia has low contingent liabilities.

"In our view, Valencia has very low capacity to generate cash
internally because it still presents deficits after capital
accounts. We understand that the region has slightly more than EUR2
billion of short-term facilities. We calculate that the average
cash holdings and the unused portion of short-term facilities cover
less than 40% of Valencia's debt service for the next 12 months,
which we estimate at EUR5.7 billion. In our view, this low debt
service coverage ratio is mitigated by Valencia's strong access to
central government liquidity mechanisms. Our expectation that
central government liquidity support will be sufficient and timely
underpins our ratings on Spanish normal-status regions, including
Valencia."




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

CREDIT AGRICOLE: Fitch Affirms 'B-/B' Issuer Default Ratings
-------------------------------------------------------------
Fitch Ratings has affirmed 3 Ukrainian foreign-owned banks'
Long-Term Foreign-Currency Issuer Default Ratings (IDRs) at 'B-'
and their Long-Term Local-Currency IDRs at 'B' with Stable
Outlooks. The banks are:

- PJSC Credit Agricole Bank (CAB);
- ProCredit Bank (Ukraine) (PCB); and
- PRAVEX-BANK JSC (PXB).

The affirmation of the Long-Term IDRs reflects Fitch's unchanged
view of support prospects for the banks.

Fitch has further affirmed CAB and PCB's VRs at 'b' and PXB's VR at
'b-' due to limited changes in the banks' credit profiles since the
last review.

The revision of the Outlooks to Stable from Negative on PXB's
Long-Term Local-Currency IDR of 'B' and National Long-Term Rating
of 'AA+(ukr)' reflects Fitch's view that the long-term risks from
potential disposal of the bank have abated given a more extended
record of PXB's operations under a tighter parent-subsidiary
integration framework and absence of the parent's near-term plans
to sell.

KEY Rating DRIVERS

IDRS, NATIONAL RATINGS, SUPPORT RATINGS (SRs)

The Long-Term Foreign-Currency IDRs of 'B-' and SRs of '5' reflect
the limited extent to which institutional support from these banks'
foreign shareholders can be factored into the ratings because of
Ukraine's high transfer and convertibility risks as captured by the
Country Ceiling of 'B-'.

The Long-Term Local-Currency IDRs of 'B', one notch above their
Long-Term Foreign Currency IDRs and the sovereign rating, take into
account the slightly more limited impact of Ukraine's country risks
on the issuers' ability to service senior unsecured obligations in
the local currency, hryvnia, than in foreign currency.

The National Long-Term Ratings of 'AAA(ukr)' reflect CAB and PCB's
status as some of the highest rated local issuers. CAB is fully
owned by Credit Agricole S.A. (A+/Stable). PCB is controlled (89.3%
of voting stock) by Germany's ProCredit Holding AG & Co. KGaA
(BBB/Stable).

PXB's National Long-Term Rating of 'AA+(ukr)' reflects Fitch's view
that, relative to its higher-rated peers on the national scale, the
bank has a more limited role in the parent's group and its weak,
albeit slightly improving, performance and prospects. The bank is
fully owned by Intesa Sanpaolo S.p.A (BBB/Negative). Since 2014,
PXB had been managed as a non-core asset, before being reassigned
to the parent's International Subsidiaries Division in mid-2018,
where it currently operates. Nonetheless, Fitch believes PXB
retains very limited importance for the Intesa group because of the
subsidiary's small size, significant concerns about future
performance and prospects and Fitch's view that disposal would not
alter the parent's franchise.

KEY Rating DRIVERS

VRS

CAB and PCB

CAB and PCB's VRs of 'b', one notch above Ukraine's sovereign
rating, reflect their relatively strong (in the local context)
financial profiles due to long records, meaningful franchises, low
impaired loans, sound capital positions, robust through-the-cycle
performance, as well as ordinary benefits of shareholder support.
PCB's credit profile, although somewhat constrained by its
previously higher loan growth, unseasoned portfolio and generally a
weaker borrower profile, further benefits from a record of regular
and material core capital injections by its parent company, which
has supported the growth of the Ukrainian franchise.

CAB and PCB's reasonably conservative underwriting standards have
resulted in a relatively low generation of impaired (IFRS 9 Stage
3) loans, at 8% of loans at CAB and 4% at PCB at end-1Q19 with loan
loss allowances held against these loans at 8% and 3% of loans,
respectively. Both banks' asset-quality metrics experienced
volatility in a market stress situation in the past but their
strong loss-absorption capacity allowed impaired loans to be
written off quickly.

Capitalization for both banks has strengthened further due to
moderate risk-weighted assets (RWA) growth. The Fitch Core Capital
(FCC) was 17% of RWA at CAB and 18% at PCB at end-1Q19.

Capitalization was further supported by strong performance results,
with return on average equity at a high 40% at CAB and 27% at PCB
in 2018, as well as by another parent capital injection for PCB in
2018. PCB has also informed Fitch that a parent's subordinated debt
(2% of RWA at end-1Q19) conversion into core capital is also
considered for 2019.
Funding and liquidity profiles of both banks benefit from a low
share of wholesale debt funding in the liabilities and high
liquidity coverage. Liquid assets, comprising cash, short-term
investment-grade bank placements, and local-currency central bank
notes, net of 2018 wholesale debt repayments, were a high 28% of
total liabilities at CAB. A more moderate 17% at PCB was only due
to a material share of IFI funding to which PCB has maintained
adequate access.

PXB

PXB's lower VR of 'b-' continues to reflect its weaker franchise,
loss-making, albeit improved, core and operating performances,
evolving business model and recently resumed fast loan growth.

At the same time, the VR factors in the bank's currently limited
credit risks exposure, which resulted from the loan book's clean-up
and re-capitalization by the parent in 2017-2018.

Since last year the bank has been lending significantly more
actively after years of uncertainty around its future strategy. PXB
has so far chosen to attract larger and financially more stable
borrowers, which, Fitch believes, would be difficult to maintain
given the bank's high appetite for fast loan growth. IFRS 9 Stage 3
loans were 5% of gross loans at end-1Q19 and loan loss allowances
fully covered outstanding impaired loan exposures.

PXB's post-cleaning FCC ratio remains at higher levels (35% at
end-1Q19), but Fitch expects the ratio to decline in the medium
term due to planned high loan growth and still loss-making
pre-impairment and operating performances.

In Fitch's view, absent a broader economic deterioration, PXB is on
track to report profitable this year or early next year as net
losses narrow.

Liquidity was in large surplus at end-1Q19 given the liquid assets
at 1.3x deposits. While potentially helped by PXB's association
with its Italian parent, the bank's liquidity might become tighter
as it will most certainly be absorbed through loan growth.

RATING SENSITIVITIES

The IDRs and SRs could be upgraded if Ukraine's sovereign ratings
are upgraded and the Country Ceiling is revised upwards and
downgraded in case of a sovereign downgrade.

The banks' VRs could come under downward pressure if additional
loan impairment recognition undermines capital positions without
sufficient support being made available. Upside potential for VRs
is currently limited.

The rating actions are as follows:

PJSC Credit Agricole Bank

Long-Term Foreign-Currency IDR: affirmed at 'B-';
  Outlook Stable
Long-Term Local-Currency IDR: affirmed at 'B';
  Outlook Stable
Short-Term Foreign- and Local- Currency IDRs:
  affirmed at 'B'
National Long-Term Rating: affirmed at 'AAA(ukr)';
  Outlook Stable
Viability Rating: affirmed at 'b'
Support Rating: affirmed at '5'

ProCredit Bank (Ukraine)

Long-Term Foreign-Currency IDR: affirmed at 'B-';
  Outlook Stable
Long-Term Local-Currency IDR: affirmed at 'B';
  Outlook Stable
Short-Term Foreign- and Local- Currency IDRs:
  affirmed at 'B'
National Long-Term Rating: affirmed at 'AAA(ukr)';
  Outlook Stable
Viability Rating: affirmed at 'b'
Support Rating: affirmed at '5'

PRAVEX-BANK JSC

Long-Term Foreign-Currency IDR: affirmed at 'B-';
  Outlook Stable
Long-Term Local-Currency IDR: affirmed at 'B';
   Outlook revised to Stable from Negative
Short-Term IDR: affirmed at 'B'
National Long-Term Rating: affirmed at 'AA+(ukr)';
  Outlook revised to Stable from Negative
Viability Rating: affirmed at 'b-'
Support Rating: affirmed at '5'




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

ARCADIA GROUP: Green Offers GBP185MM to Cut Pension Deficit
-----------------------------------------------------------
Grace Whelan at Drapers reports that Sir Philip Green has offered a
further GBP185 million from property assets to help reduce Arcadia
Group's pension deficit, in an effort to win approval for its
company voluntary arrangement (CVA).

The offer was made in reaction to a letter from Mr. Green's
longtime critic Frank Field MP, Drapers notes.  The letter asked
the Arcadia boss to make a commitment in the form of a personal
payment should the proposed deficit reduction plan fail, Drapers
discloses.

Arcadia's pension debt is reportedly around GBP565 million, Drapers
states.  According to Drapers, the CVA proposal would reduce the
contributions from the company to the pension schemes from GBP50
million to GBP25 million per year, for three years, with security
over certain assets being granted in order to provide support to
the schemes.

Twenty-five stores were earmarked for closure in the CVA proposal,
Drapers says.  However, a further 25 Miss Selfridge and Evans
stores are likely to shutter as the property holding companies for
both businesses face administration, Drapers relays.

Arcadia Group Ltd. is the UK's largest privately owned fashion
retailer with seven major high street brands: Burton, Dorothy
Perkins, Evans, Miss Selfridge, Topshop, Topman and Wallis, along
with its out-of-town fashion destination Outfit.  


DONCASTERS GROUP: S&P Cuts ICR to CCC- on Risk of Default
---------------------------------------------------------
S&P Global Ratings lowered its issuer rating on Doncasters Group to
'CCC-'.

S&P is also lowering its issue-level rating on the company's
first-lien secured term loan to 'CCC-'. The recovery rating is
unchanged at '4', indicating its expectation of average (30%-50%;
rounded estimate 35%) recovery in a default scenario.

S&P said, "We are lowering our issue rating on the second-lien
secured term loan to 'C'. The recovery rating is unchanged at '6',
indicating our view of negligible recovery in a default scenario.

"The downgrade reflects our view of the risk that Doncasters will
not be able to target its 2020 debt maturities in a timely manner
and at favorable terms, and that there is a substantial possibility
of a default or partial restructuring over the next 12 months. The
first-lien loan is due in April 2020 and consists of GBP106 million
and $390 million tranches. The $76.5 million second-lien loan is
due in October 2020. We also believe that clarity about the
company's liquidity is limited over the next 12 months because its
asset-back lending (ABL) facility is also due in January 2020.

"We understand that management is attempting to reduce leverage by
executing targeted sales of assets, subject to gaining right
valuation. In 2019/2020, Doncasters' management plans to dispose of
European structural castings, turbochargers, forgings, centrifugal,
fabrications, and automotive operations. Proceeds from the sale of
the above-mentioned assets will be directed to repaying the ABL
facility and first-lien loan as they are due and any remaining debt
may be a subject to amendment and extension by the end of 2019.

"We currently have a very limited view of the magnitude of deals
the company is able to execute. The amount of proceeds and,
simultaneously, the level of debt repayment are not committed at
this point. Excluding assets for sale, the company will operate
within its three core segments -- Superalloys, U.S. Structural
Castings, and Turbine Airfoils. We've seen some stabilization in
the top line; we expect EBITDA of about GBP60 million and that free
operating cash flows (FOCF) will remain negative compared to cash
interest payments of about GBP10 million per quarter. The EBITDA
and FOCF figures account for continuing operations and excludes the
U.K.-based Fabrications and Automotive business.

"We now regard liquidity as weak. The company's ability to
refinance its ABL revolver due before the first-lien debt appears
greatly reduced. As of March 2019, Doncasters held GBP19.7 million
of cash and GBP72 million undrawn--the latter is technically
available under its GBP120 million ABL. However, Doncasters has an
asset base that allows borrowings up to GBP87 million, therefore it
has a drawable headroom of GBP39 million. Despite significantly
lower capex, we do not rule out the company facing unexpected
working capital swings, which would diminish its liquidity
position.

"The negative outlook reflects that the approaching maturities
could lead to restructuring or default in less than 12 months
absent favorable changes in the issuer's circumstances, or if it
cannot agree on an amended or extended capital structure.

"We could lower the rating if it becomes clear that Doncasters
cannot refinance its 2020 debt maturities, increasing the risk that
the company may pursue what we would consider a debt restructuring
or default."

Ratings upside is unlikely at this point.


FONTAIN: Enters Liquidation, Owes GBP3.6MM to Unsecured Creditors
-----------------------------------------------------------------
Rhys Handley at PrintWeek reports that Fontain has shut down and
gone into liquidation with more than GBP3.6 million in unsecured
debt.

A notice posted to the London Gazette Tuesday, May 28, confirmed
that Adam Stephens -- adam.stephens@smithandwilliamson.com -- and
Henry Shinners -- henry.shinners@smithandwilliamson.com -- of
London-based Smith & Williamson were appointed as liquidators of
the company on May 21 as it is to be wound up voluntarily,
PrintWeek relates.

Mr. Shinners told PrintWeek that, following the approval of a
company voluntary arrangement to pay back in excess of GBP1 million
in liabilities to creditors, one of Bermondsey, South London-based
Fontain's "principle print equipment suppliers" sought to terminate
its agreement and instructed solicitors to recover the equipment.

According to PrintWeek, he added that due to the termination of its
supplier agreement, which resulted in "high termination charges
that it was unable to pay" and the loss of "a major customer" after
its CVA was reported, the commercial outfit was unable to fulfill
its CVA and ceased to trade on May 3.

One the same day, all 28 employees were made redundant with
GBP41,139.03 due in wage arrears and holidays, PrintWeek
discloses.

Smith & Williamson has appointed agents to deal with Fontain's
plant and machinery, while the company's secured creditor is now
working to realise outstanding book debts and any surplus above the
GBP492,673.20 it is due will be paid to it in the liquidation
estate, PrintWeek states.

Unsecured creditor claims came to GBP3,559,949.87, PrintWeek
relays, citing Mr. Shinners.


JOSS ENGINEERING: Bought Out of Administration, 20 Jobs Saved
-------------------------------------------------------------
Cumbria Crack reports that Joss Engineering, a Barrow engineering
firm which was established more than 35 years ago, has been
acquired out of administration in a deal that has saved 20 jobs.

Ian McCulloch -- ian.mcculloch@begbies-traynor.com -- and Dean
Watson -- dean.watson@begbies-traynor.com -- of insolvency and
restructuring experts Begbies Traynor were appointed Joint
Administrators of the company on May 17, 2019, Cumbria Crack
relates.

According to Cumbria Crack, the pre-pack administration deal
arranged by Begbies Traynor saves 20 jobs and ensures a continuity
of trade for staff and customers.

"Like many SME's across our region, Joss Engineering experienced
some cashflow issues at the start of the year. Ultimately, this
resulted in the director of the company presenting a proposal to
ensure creditors of the company received 100p in the pound under a
company voluntary arrangement (CVA)," Cumbria Crack quotes Mr.
McCulloch, director of Begbies Traynor, as saying.  "Unfortunately,
this was rejected by creditors, leaving no alternative but to
complete a pre-pack administration."


LAMP INSURANCE: Unable to Make Claim Payments to Policyholders
--------------------------------------------------------------
Sam Barker at The Telegraph reports that thousands of people have
been left unable to make insurance claims following the collapse of
Lamp Insurance last week.

The insurer sold cover for landlords, holiday homes, healthcare,
buildings and legal expenses, among other areas.  But Lamp was
forced into insolvency when it ran out of money and failed to bring
in extra funding, The Telegraph relates.

According to The Telegraph, a statement on the insurer's website
said it is "unable to make claim payments" though its policies are
still technically valid.  It added: "Policyholders should
immediately consider acquiring alternative insurance protection."

Lamp is now trying to find a buyer, but could go into liquidation
following the outcome of a court case this week, The Telegraph
discloses.


LINKS OF LONDON: Appoints New Creative Director Amid CVA Rumors
---------------------------------------------------------------
Stacey Hailes at Professional Jeweller reports that Links of London
has appointed critically acclaimed, British jewellery designer,
Dominic Jones, as the brand's new global creative director.

It is hoped that Mr. Jones will be able to connect the brand with a
new generation of consumers and establish Links of London as a
leading lifestyle brand, Professional Jeweller discloses.

This news comes as Links of London fights back from rumours that
the brand is on the verge of collapse, Professional Jeweller
notes.

Reports emerged earlier this year that the jewellery brand could be
the next British retailer to consider a company voluntary
arrangement (CVA) in order to reduce rents, close stores and shore
up its finances, but sources told Professional Jeweller that Links
of London has successfully implemented a turnaround strategy and is
on track for future growth.



SELECT: Administrators Launch Company Voluntary Arrangement
-----------------------------------------------------------
Alys Key at Press Association reports that administrators have
launched a last-ditch attempt to save women's fashion retailer
Select and its 1,800 high street employees.

The chain, which operates from 169 UK stores, went into
administration earlier this month after a period of subdued sales,
Press Association relates.

According to Press Association, administrators at advisory firm
Quantuma have launched a company voluntary arrangement (CVA) in a
bid to save the company from ceasing trading.

Under the plans, no immediate store closures or redundancies would
be made, Press Association discloses.  However, advisers said some
may occur even if the proposals are approved, Press Association
notes.

If landlords do not approve the measures and no buyer is found for
the business, it is expected that it will cease trading, Press
Association states.

The company passed another CVA in April last year, securing a
reduction to its rent bill from landlords, Press Association
recounts.

However, it went into administration in May this year after low
consumer confidence, Brexit uncertainty and volatile currency
weighed on performance in the early part of the year, Press
Association relays.


SOUTHERN PACIFIC 05-B: Fitch Affirms BB+ on Class E Debt
--------------------------------------------------------
Fitch Ratings has upgraded 10 tranches of Southern Pacific
Financing 05-B Plc, Southern Pacific Financing 06-A Plc, Southern
Pacific Securities 05-3 Plc, and Southern Pacific Securities 06-1
Plc, and affirmed 14 other tranches.

The transactions comprise residential loans that were originated by
Lehman Brothers International (Europe).

KEY RATING DRIVERS

Strong Credit Enhancement

Fitch's analysis concluded the current levels of credit enhancement
(CE) were sufficient to withstand the rating stresses, leading to
the upgrades and affirmations of the note ratings. Fitch expects CE
to continue building up as the transactions amortize sequentially.

Stable Asset Performance

Loans that are three months or more in arrears have shown steady
improvement post-financial crisis. These loans have fallen over the
past year to between 7% and 21% of their respective pool balances
from between 9% and 23%.

The servicer reports delinquencies as loans whose balance is in
arrears for overdue monthly contractual payments. "Amounts
outstanding" refers instead to arrears for overdue monthly
contractual payments and/or outstanding fees or other amounts due.
Fitch has used the delinquencies figures in its analysis in line
with guidance from the Financial Conduct Authority.

Sequential Payments to Continue

Fitch expects both transactions to continue amortizing on a
sequential basis. Fitch does not expect previous breaches in
pro-rata payment conditions to be cured.

RATING SENSITIVITIES

As the loans are paying a margin linked to Libor, an increase in
market interest rates could cause additional stress on borrowers'
affordability and result in performance deterioration. Fitch models
affordability tests that assume Libor reverts to long-term
averages, leaving ample buffer for rates increases over the medium
term. An unexpected increase in market rates could, however, result
in negative rating actions.

DATA ADEQUACY

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

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

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

The rating actions are as follows:

Southern Pacific Financing 05-B Plc

Class A ISIN (XS0221839318): affirmed at 'AAAsf'; Outlook Stable
Class B ISIN (XS0221840324): affirmed at 'AAAsf'; Outlook Stable
Class C ISIN (XS0221840910): upgraded to 'AA+sf' from 'AAsf';
Outlook Stable
Class D ISIN (XS0221841561): upgraded to 'A+sf' from 'A-sf';
Outlook Stable
Class E ISIN (XS0221842023): affirmed at 'BB+sf'; Outlook Stable

Southern Pacific Financing 06-A Plc

Class A ISIN (XS0241080075): affirmed at 'AAAsf'; Outlook Stable
Class B ISIN (XS0241082287): affirmed at 'AA+sf'; Outlook Stable
Class C ISIN (XS0241083764): upgraded to 'A+sf' from 'Asf'; Outlook
Stable
Class D1 ISIN (XS0241084572): upgraded to 'BBB+sf' from 'BBBsf';
Outlook Stable
Class E ISIN (XS0241085033): affirmed at 'BBsf'; Outlook Stable

Southern Pacific Securities 05-3 Plc

Class B1a ISIN (XS0235516084): affirmed at 'AAAsf'; Outlook Stable
Class B1c ISIN (XS0235516241): affirmed at 'AAAsf'; Outlook Stable
Class C1a ISIN (XS0235516324): affirmed at 'A+sf'; Outlook Stable
Class C1c ISIN (XS0235516753): affirmed at 'A+sf'; Outlook Stable
Class D1a ISIN (XS0235516837): upgraded to 'BBB+sf'; from 'BBBsf':
Outlook Stable
Class D1c ISIN (XS0235517215): upgraded to 'BBB+sf'; from 'BBBsf':
Outlook Stable
Class E1c ISIN (XS0235517728): upgraded to 'BB-sf' from 'B+sf';
Outlook Stable;

Southern Pacific Securities 06-1 plc

Class B1c ISIN (XS0240950880): affirmed at 'AAAsf'; Outlook Stable
Class C1a ISIN (XS0240951185): affirmed at 'A+sf'; Outlook Stable
Class C1c ISIN (XS0240952076): affirmed at 'A+sf'; Outlook Stable
Class D1a ISIN (XS0240952316): upgraded to 'BBB+sf'; from 'BBBsf':
Outlook Stable
Class D1c ISIN (XS0240953470): upgraded to 'BBB+sf'; from 'BBBsf':
Outlook Stable
Class E1c ISIN (XS0240954015): upgraded to 'BB-sf'; from 'Bsf':
Outlook Stable
Class FTc ISIN (XS0240956572): affirmed at 'CCCsf'; Recovery
Estimate: not calculated


THOMAS COOK: Moody's Lowers CFR to Caa2, Outlook Negative
---------------------------------------------------------
Moody's Investors Service has downgraded the corporate family
rating (CFR) of the British tourism group Thomas Cook Group plc to
Caa2 from B3 and its probability of default rating (PDR) to Caa2-PD
from B3-PD. Moody's has also downgraded to Caa2 from B3 the rating
on Thomas Cook's EUR 750 million senior unsecured notes due 2022
and downgraded to Caa2 from B3 its EUR400 million senior unsecured
notes due 2023 issued under Thomas Cook Finance 2 plc. The outlook
on both entities has changed to negative from rating under review.
The rating action concludes the review initiated on April 26,
2019.

The rating action reflects:

-- Weak trading performance in the six months ended
    March 2019 and challenging outlook for the summer
    2019 season

-- Decline in liquidity headroom and expectations for
    further cash outflows

-- The availability of the new financing to support
    liquidity over the company's winter low point is
    reliant on certain conditions related to the Airline
    Strategic Review process

-- Concerns of sustainability of the company's capital
   structure regardless of the whether the airline sold

RATINGS RATIONALE

The Caa2 CFR reflects the company's: 1) weak liquidity position
with large seasonal working capital outflows during each winter
period; 2) reliance on the sale of part or all of its airline
division to support additional liquidity; 3) weak trading in the
fiscal year 2018, ended 30 September 2018, and in fiscal 2019 year
to date with bookings and margin pressures expected in summer 2019;
4) continued free cash outflows expected in 2019; and 5) concerns
over sustainability of the capital structure even if the airline
division is sold.

It also reflects the company's 1) large scale as Europe's
second-largest tourism business; 2) diversification in terms of
product offering and regional presence; and 3) the favourable
long-term growth prospects for the travel market.

The company has been under trading and liquidity pressure since
fiscal year 2018, as a result of several factors including high
summer temperatures reducing travel demand and resulting effects on
overcapacity and margins. However whilst the company has reduced
capacity in response, further trading challenges have arisen which
have dampened demand, increased competition and put additional
pressure on margins. Weak consumer sentiment particularly in the UK
and Germany alongside cost inflation are the key drivers of weaker
performance, and customer confidence is expected to remain low in
the key 2019 summer season.

In addition the company's liquidity is weak with limited headroom
during the winter seasonal low. As a result of continued cash
outflows and reduction in short term commercial paper financing,
liquidity has continued to deteriorate. The company announced a
strategic review of its airline division and reports to have
received multiple bids for all or part of the airline.

However Moody's continues to believe that there are execution
challenges in delivering a sale capable of generating meaningful
proceeds.

The company has announced that it has agreed a new GBP 300 million
super senior revolving credit facility to provide additional
working capital. However availability of this facility is subject
to progress on executing the strategic review of the airline
business and hence is subject to a significant uncertainty. Moody's
is also concerned that short term financing and other supplier
credit may be reduced and put further pressure on liquidity.
Moody's also notes that company's auditors refer to material
uncertainty related to going concern, as a result of the
conditionality of new financing, within its interim financial
statements at March 2019.

In the event that the airline is sold, Moody's considers that there
would remain significant risks over the sustainability of the
remaining capital structure, particularly as part of the proceeds
will likely be used to replenish working capital.

STRUCTURAL CONSIDERATIONS

The Caa2 rating for the two senior unsecured notes reflects their
pari passu ranking with the majority of Thomas Cook's debt.

OUTLOOK

The negative outlook reflects the expectation that trading
performance will continue to deteriorate in fiscal 2019, with
further negative cash flows, putting increasing pressure on
liquidity. It also assumes significant execution risks in
delivering a sale of the airline business and risks of
sustainability of the capital structure.

WHAT COULD CHANGE THE RATING UP/DOWN

The rating is weakly positioned and an upgrade therefore is not
expected in the near term. Positive pressure would build if the
likelihood of a restructuring is substantially reduced, the company
sustainably and significantly improves its liquidity headroom, and
operating performance stabilizes or improves.

The rating could be downgraded if there is a material worsening in
the company's prospects in respect of a restructuring and in
expectations for debt recoveries, or if there is further
deterioration in liquidity.

LIST OF AFFECTED RATINGS

Issuer: Thomas Cook Finance 2 plc

Downgrade:

-- BACKED Senior Unsecured Regular Bond/Debenture,
    Downgraded to Caa2 from B3

Outlook Action:

-- Outlook, Changed To Negative From Rating Under Review

Issuer: Thomas Cook Group plc

   Downgrades:

   -- LT Corporate Family Rating, Downgraded to Caa2 from B3

   -- Probability of Default Rating, Downgraded to Caa2-PD
      from B3-PD

   -- Senior Unsecured Regular Bond/Debenture, Downgraded to
      Caa2 from B3

Outlook Action:

   -- Outlook, Changed To Negative From Rating Under Review

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





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

[*] BOOK REVIEW: GROUNDED: Destruction of Eastern Airlines
----------------------------------------------------------
Grounded: Frank Lorenzo and the Destruction of Eastern Airlines
Author: Aaron Bernstein
Publisher: Beard Books
Softcover: 272 Pages
List Price: $34.95
Order a copy today at
http://www.beardbooks.com/beardbooks/grounded.html

Barbara Walters once referred to Frank Lorenzo as "the most hated
man in America." Since 1990, when this work was first published and
Eastern Airlines' troubles were front-page news, there have been
many worthy contenders for the title. Nonetheless, readers
sensitive to labor-management concerns, particularly in the context
of corporate restructurings, will find in this book much to support
Barbara Walters' characterization.

To recap: For a few brief and discordant years, Frank Lorenzo was
boss of the biggest airline conglomerate in the free world
(Aeroflot was larger), combining Eastern, Continental, Frontier,
and People Express into Texas Air Corporation, financing his empire
with junk bonds. TAC ultimately comprised a fleet of 451 planes and
50,000 employees, with revenues of $7 billion.

But Lorenzo was lousy on people issues, famously saying, "I'm not
paid to be a candy ass." The mid-1980s were a bad time to take that
approach. Those were the years when the so-called Japanese model of
management, which emphasized cooperation between management and
labor, was creating a stir. The Lorenzo model was old school: If
the unions give you any trouble, break 'em.

That strategy had worked for him at Continental, where he'd filed
Chapter 11 despite the airline's $60 million in cash reserves, in
order to exploit a provision in Bankruptcy Code allowing him to
abrogate his contracts with the unions. But Congress plugged that
loophole by the time Lorenzo went to the mat with Charles Bryan, I
AM chapter president. Lorenzo might have succeeded in breaking the
machinists alone, but when flight attendants and pilots honored the
picket lines, he should have known it was time to deal. He didn't.
Instead he tried again for a strategic advantage through the
bankruptcy courts, by filing Chapter 11 in the Southern District of
New York where bankruptcy judges were believed to be more favorably
disposed toward management than in Miami where Eastern was
headquartered. Eastern had to hide behind the skirts of its
subsidiary, Ionosphere Clubs, Inc., a New York corporation, in
order to get into SDNY. Six minutes later, Eastern itself filed in
the same court as a related proceeding.

The case was assigned to Judge Burton Lifland, whom Eastern's
bankruptcy lawyer, Harvey Miller, knew well, but Lorenzo was
mistaken if he believed that serendipitous lottery assignment would
be his salvation. Judge Lifland a year later declared Lorenzo unfit
to run the airline and appointed Martin Shugrue as trustee. Most
hated man or not, one wonders whether the debacle was all Lorenzo's
fault. Eastern's unions, in particular the notoriously militant
machinists, were perpetual malcontents, and Charlie Bryan was an
anti-management zealot, to the point of exasperating even other IAM
officers.

The book provides a detailed account of the three-and-a-half-year
period between Lorenzo's acquisition of Eastern in the autumn of
1986 and Judge Lifland's appointment of the trustee in April 1990.

It includes the history of Eastern's pre-Lorenzo management, from
World War I flying ace Eddie Rickenbacker to astronaut Frank
Borman.

Aaron Bernstein won numerous awards during his 20-year career as a
professional journalist. He is an associated editor for Business
Week.

Aaron Bernstein is the editor of Global Proxy Watch, a corporate
governance newsletter for institutional investors. He is also a
non-resident Senior Research Fellow at the Pensions and Capital
Stewardship Project at Harvard Law School. He left BusinessWeek
magazine in 2006 after a 23-year career as an editor and senior
writer covering workplace and social issues.



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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-
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