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

                          E U R O P E

          Friday, June 7, 2019, Vol. 20, No. 114

                           Headlines



F R A N C E

CASINO GUICHARD-PERRACHON: Moody's Cuts CFR to B1, Outlook Neg.


I T A L Y

STEFANEL: To Apply for Special Administration, Shares Suspended


K A Z A K H S T A N

BI GROUP: S&P Assigns 'B-/B' Currency Ratings


N E T H E R L A N D S

KARLOU BV: S&P Assigns 'B+' Issuer Credit Rating


R U S S I A

BANK PRIME: Put on Provisional Administration, License Revoked
CB VZAIMODEISTVIYE: Put on Provisional Administration
CHUVASH REPUBLIC: Fitch Affirms 'BB+/B' IDRs, Outlook Stable
VENTRELT HOLDINGS: Fitch Affirms BB- IDRs, Outlook Stable


S P A I N

BERING III: Moody's Assigns First-Time B2 CFR, Outlook Stable


S W E D E N

INTRUM AB: Fitch Affirms 'BB/B' Issuer Default Ratings
MATRA PETROLEUM: May Need to Consider Liquidation Options


T U R K E Y

ISTANBUL: Fitch Affirms BB/BB+ Issuer Default Ratings, Outlook Neg.


U N I T E D   K I N G D O M

ARCADIA GROUP: Creditors Meetings to Vote on CVA Adjourned
COLD FINANCE: S&P Gives Prelim BB Rating on GBP34MM Class E Notes
CONTOURGLOBAL PLC: S&P Affirms 'BB-' ICR, Outlook Positive
GUILD GROUP: Enters Into Administration, Venues Closed
HEATHROW FINANCE: Fitch Affirms Outstanding Notes at 'BB+'

JUBILEE CLO 2019-XXII: S&P Rates EUR6MM Class F Notes 'B-'
KELDA FINANCE 3: S&P Alters Outlook to Negative & Affirms 'BB-' ICR
NORTHERN ROCK: Bad Bank Repays GBP48.7-Bil. Taxpayer Loan
PRECISE MORTGAGE 2019-1B: Fitch Rates Class X Notes 'BB+sf'


X X X X X X X X

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

                           - - - - -


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F R A N C E
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CASINO GUICHARD-PERRACHON: Moody's Cuts CFR to B1, Outlook Neg.
---------------------------------------------------------------
Moody's Investors Service downgraded French grocer Casino
Guichard-Perrachon SA's long-term corporate family rating to B1
from Ba3 and its probability of default rating to B1-PD from
Ba3-PD. Moody's has also downgraded Casino's senior unsecured
long-term ratings to B1 from Ba3, its senior unsecured MTN program
rating to (P)B1 from (P)Ba3, the deeply subordinated perpetual
bonds' rating to B3 from B2. In addition, Moody's has affirmed the
Not Prime commercial paper rating and the (P)NP short term rating
program. The outlook remains negative.

"We believe that the debt restructuring of Casino's main
shareholder Rallye and of its controlling holding companies creates
additional uncertainty at a time when trading conditions in the
French retail market remain highly challenging and increases the
execution risk of Casino's deleveraging," says Vincent Gusdorf, a
Moody's Vice President -- Senior Credit Officer and lead analyst
for Casino. "The safeguard proceedings process launched by its
parent holding company Rallye means Casino will need to maintain
suppliers' and lenders' confidence and good liquidity, while our
previous Ba3 rating was factoring in a substantial reduction of its
high gross debt," Mr. Gusdorf added.

RATINGS RATIONALE

The weakening credit quality of Casino's controlling holdings, and
notably of its immediate parent Rallye, has been a key driver of
previous negative rating actions on Casino. Still, Moody's has
maintained a certain delinkage between Casino's rating and the
credit quality of its parent companies to account for the
protection stemming from minority shareholders and the absence of
cross default between Casino's debt and that of Rallye.

In the long-term, a reduction in Rallye's excessive leverage which
would not affect Casino would be credit positive. In the short-term
though, Moody's believes that Rallye's debt restructuring creates
meaningful uncertainty for Casino at a time when its leverage
remains above appropriate levels for a Ba3 rating and its revenue
is stagnating in France.

Casino's controlling holdings, namely Rallye, Fonciere Euris,
Finatis and Euris, announced on May 23, 2019 that they had filed
for safeguard procedure under French law. Under this framework,
creditors' rights will be frozen for at least six months during
which the holdings will design debt restructuring plans with the
help of administrators appointed by the Paris Commercial Court.
Together, Rallye, Fonciere Euris, Finatis and Euris held EUR3,295
million of net debt as of 31 December 2018.

Moody's considers that potential developments affecting Casino's
shareholding structure and the debt of its parent holding companies
increase uncertainties on the deleveraging path of Casino and could
cause reduced creditors confidence and governance challenges.
Casino's Chief Executive Officer remains the chairman of Rallye's
board and the direct or indirect main shareholder of Fonciere
Euris, Finatis and Euris. In Moody's view, this situation is also
credit negative because it could likely distract management at a
time when the French market remains challenging and the execution
of the company's strategy requires the full attention of Casino's
Board and management team. Moreover, like other retailers, Casino
has large trade payables, which amounted to EUR6.7 billion at
year-end 2018 on a fully consolidated basis, and the company is
therefore required to maintain suppliers' confidence particularly
in light of its uneven working capital performance in recent
years.

In France, revenues at most of Casino's store brands stagnated on a
like-for-like basis during the first quarter of 2019 ended on 31
March. According to research firm Kantar Worldpanel, Casino's
market share in France was down by 50 basis points year-on-year
over the three-month period ending on 7 May 2019, although part of
the decline was due to store closures.

Although Moody's recognises that Casino's French operations had
EUR2,097 million of cash on the balance sheet as at 31 December
2018 and upcoming asset disposals could yield up to about EUR1,800
million of proceeds by the first quarter of 2020 if the divestment
program continues to be executed successfully, Moody's anticipates
limited outright debt repayments as Casino focuses on maintaining
its good liquidity buffer. At year-end 2018, Casino France had
EUR2,865 million of undrawn committed credit facilities, while a
EUR675 million bond will mature in August 2019 and another EUR497
million bond will become due in March 2020. The rating agency
forecasts limited deleveraging in 2019, with a Moody's-adjusted
debt/EBITDA of 6.2x at year-end, compared to 6.4x in 2018, well
above Moody's expectations for the previous Ba3 rating, with an
expected leverage moving towards 5.5x.

While Rallye's debt repayment freeze might alleviate pressure on
Casino to pay large dividends, the benefit may be short-lived as
dividends could be required going forward to serve holding
companies' debts after their likely restructuring. In 2018, Casino
France paid EUR400 million of dividends, of which about EUR207
million to Rallye, compared to an operating cash flow after
interests and taxes that the rating agency estimates at EUR253
million. That said, Moody's forecasts that free cash flows will be
at best close to zero in 2019 under its calculations even if
dividends were halved, assuming that payment terms to suppliers do
not change significantly. The effects of possible changes in
Casino's shareholding structure on its financial policy are also
uncertain.

STRUCTURAL CONSIDERATIONS

Casino's debt is located at the level of Casino France (EUR5.9
billion as of 31 December 2018), the Brazilian subsidiary GPA
(EUR1.2 billion), the Colombian subsidiary Exito (EUR1.0 billion)
and the Latin American holding Ségisor (EUR0.4 billion). There is
no cross-default clause or guarantees between these subsidiaries.
Moody's considers all the debt instruments to be unsecured and to
rank pari passu within each subsidiary, with the exception of
deeply subordinated perpetual bonds issued by Casino France, which
amounted to EUR1.35 billion at year-end 2018.

The probability of default rating is based on a 50% family recovery
assumption, which reflects a capital structure including bonds and
bank debts with loose financial covenants.

RATIONALE FOR THE NEGATIVE OUTLOOK

The negative outlook reflects Moody's view that the debt
restructuring of holding companies will constrain Casino's
deleveraging and may distract management at a time when the group
faces meaningful challenges in France, its main market. The debt
restructuring could also affect suppliers' and lenders' confidence
and creates uncertainties around Casino's future capital structure
and financial policy.

WHAT COULD CHANGE THE RATING UP/DOWN

Further negative pressure on the ratings could materialize if
Casino failed to reduce its Moody's-adjusted debt/EBITDA below 6x
or to improve French operations' free cash flow, excluding proceeds
from asset disposals. Moody's could also downgrade Casino if
suppliers reduced payment terms or if the debt restructuring of the
group's controlling holdings had unexpected negative consequences
for Casino's creditors. Lastly, Moody's could take a negative
rating action if Casino reduced its operating or geographic
diversity without repaying a large portion of its gross debt.

Although an upgrade is currently unlikely, Moody's could raise
Casino's ratings if it lowered its Moody's-adjusted debt/EBITDA
comfortably and sustainably below 5.5x, while maintaining adequate
liquidity including sufficient cash balances and assuming that the
group structure does not change. An upgrade would also be
contingent on a significant improvement in French operations' cash
flows, excluding proceeds from asset disposals, with sufficient
comfort that the holdings' debt restructuring will not affect
Casino's capital structure or relationships with its creditors.

COMPANY PROFILE

With EUR37 billion of reported revenue in 2018, France-based Casino
is one of the largest food retailers in Europe. Its main
shareholder is the French holding Groupe Rallye, which owned 51.7%
of Casino's capital and 63.0% of its voting rights as of December
31, 2018. Casino's Chief Executive Officer (CEO) Jean-Charles
Naouri controls Groupe Rallye through a cascade of holdings. On 23
May 2019, Casino's controlling holdings namely Rallye, Fonciere
Euris, Finatis and Euris filed for safeguard procedure under French
law.




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I T A L Y
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STEFANEL: To Apply for Special Administration, Shares Suspended
---------------------------------------------------------------
Claudia Cristoferi at Reuters reports that shares in Stefanel were
suspended on June 6 until further notice after the troubled Italian
clothing group said it would apply for special administration under
bankruptcy law.

In recent years, the company has been heavily hit by increasing
competition from fast-fashion giants and e-commerce, Reuters
relates.

In 2017, after a debt restructuring, investment fund Attestor
Capital took control of the financially stressed company through a
capital increase that diluted the stake of founder Giuseppe
Stefanel to 16%, Reuters discloses.

According to Reuters, the re-launch failed to succeed and Stefanel,
which has been without a CEO since July last year, decided in
December to seek creditor protection.

It had time until mid-June to present a restructuring plan to a
bankruptcy court but it couldn't reach agreement with the holders
of its EUR40 million debt -- creditor banks and Attestor itself,
Reuters states.

"The decision was required because of the big amount of money to be
used to refund creditors next year, resources which would have thus
been taken away from the recovery plan," Reuters quotes the
company's board as saying in a letter to employees on June 6.




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K A Z A K H S T A N
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BI GROUP: S&P Assigns 'B-/B' Currency Ratings
---------------------------------------------
S&P Global Ratings assigned its 'B-' long-term local and foreign
currency ratings, 'B' short-term local and foreign currency
ratings, and a 'kzBB-' national scale rating to BI Group
Development.

S&P said, "The rating action reflects our belief that BI Group
Development (BI) will demonstrate adjusted debt to EBITDA of below
3.0x and that its interest coverage ratio will remain above 5.0x in
2019. We understand from management that BI had no material
outstanding bank debt at end-2018, and that its financial
liabilities mostly comprised loans from other divisions of BI
Group, its controlling shareholder, that we treat as debt.
According to management, BI's related-party liabilities decreased
by about 25% year-on-year by year-end 2018.

"We factor in that BI's adjusted debt significantly contracted at
year-end 2018 after it fully repaid the loan from local bank
ATFBank. BI had raised this construction loan at a favorable rate
to finance the construction of a large residential real estate
complex, Green Quarter in Nur-Sultan (formerly Astana). We
understand that the loan was restructured and extended, partly as a
result of the cash payments timeline from the buyer, reflecting
BI's construction cycle.

"The positive effect from debt reduction in 2018 was partly offset
by a decrease in EBITDA to around KZT22 billion (11.4% EBITDA
margin), based on the management accounts for 2018, from around
KZT30 billion (17.5% EBITDA margin) in 2017. We understand that the
company underperformed in 2018 compared with its previous budget.
BI discloses combined International Financial Reporting Standards
(IFRS) financials rather than consolidated IFRS financials. We also
note that BI's IFRS accounts are issued with a significant timelag
after the end of each reporting period."

BI has a leading position in Kazakhstan's real estate industry,
where it has a market share of about 10%, according to management.
Furthermore, BI has an around 50% market share in its home market
of Nur-Sultan, allowing it be a price setter and derive a premium.
At the same time, in Almaty, the second-largest city of Kazakhstan,
BI is the second-largest market player and the company's market
share has contracted to around 8% in April 2019 from around 18% in
2018, due to high competition. S&P understands that BI Group plans
to increase the market share in Almaty to about 20% by the end of
2019.

S&P said, "We understand that BI benefits from availability of a
significant land bank, which is sufficient for around eight years
of supply in Nur-Sultan and for around three years in Almaty at the
current construction rate, according to management. Furthermore,
BI's brand recognition is strong, and its marketing capabilities
have been recently enhanced after establishing a single-window
mortgage service for homebuyers. The company also has a high level
of pre-sales before constructions are complete.

"At the same time, the rating remains constrained by BI's
concentration on a single country, Kazakhstan, where the banking
system and ease of doing business are limited. Furthermore, we
factor in that the company's scale remains small compared with
peers in Europe, the Middle East, and Africa. In addition, we
believe mortgage loan are much less available in Kazakhstan than in
other countries, which, combined with still relatively low
purchasing power of the population, constrains market growth
potential. Finally, we factor in high volatility and working
capital requirements in the industry, and significant regulatory
risks. At the same time, we believe that transition to escrow
accounts in the Kazakh real estate development industry should
improve transparency across the industry.

"Furthermore, our assessment of BI remains constrained by a lack of
details regarding the financials of its parent company, BI Group.
Based on limited disclosures and financial information, we estimate
that the overall credit profile of the group is at best at the
level of the subsidiary, despite the significantly larger scale of
the holding company. BI Group, which includes several divisions
operating in infrastructure, engineering, and construction, is
jointly owned by three Kazakh businessmen. We consider BI to be a
core subsidiary of BI Group because BI shares the same name and the
brand, is highly unlikely to be sold, and enjoys full support from
the group.

"We understand that BI generates around two-thirds of group EBITDA,
but that bank debt is concentrated at other group companies. We
understand from management that consolidated group adjusted debt to
EBITDA was below 3.0x at the end of 2018. We note that BI Group
does not prepare consolidated IFRS financials, but the debut
combined financials for the companies within the group--audited by
one of the big-four in accordance with IFRS--will be prepared by
the end of the third quarter of 2019, according to management. We
believe that a lack of audited information regarding the group's
financial standing currently constrains rating upside for BI.

"Our stable outlook reflects our view that adjusted debt to EBITDA
will remain below 3.0x and EBITDA interest coverage above 5.0x over
the next 12 months, both at the level of BI and its parent,
supported by at least stable revenues and EBITDA. To maintain its
rating, BI should not be exposed to any liquidity shortfalls,
material refinancing risks, or legal risks. It will also require
audited IFRS-based financial accounts of BI and other companies
within BI Group to be provided to us not later than third-quarter
2019."

A negative rating action may result from weaker operating
performance and an associated decline in revenues or EBITDA. For
example, adjusted debt to EBITDA above 3.0x without any potential
for near-term recovery, and EBITDA to interest coverage below 5.0x.
Liquidity shortfalls for debt repayment could also lead to a
negative rating action. A downgrade would also result if the
company fails to provide audited IFRS accounts of BI Group
Development and other companies within BI Group before the end of
third quarter 2019. Any weakening in disclosures at the level of
the group or the rated entity may also result in a withdrawal of
the rating.

An upgrade would hinge on higher transparency about the financial
position of the parent and would be supported by solid liquidity
management. For an upgrade, S&P would expect adjusted debt to
EBITDA sustainably lower than 3.0x and EBITDA interest coverage
consistently above 5.0x both at the parent and the company level.



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N E T H E R L A N D S
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KARLOU BV: S&P Assigns 'B+' Issuer Credit Rating
------------------------------------------------
S&P Global Ratings assigned Karlou B.V., a 100%-owned subsidiary of
GeoProMining Investment (CYP) Ltd. (GPM), and its senior unsecured
notes 'B+' ratings.

The 'B+' rating on the senior unsecured notes is aligned with the
rating on Karlou B.V. and the rating on GPM, the ultimate parent.
This is because there will be no structural or contractual
subordination to any other pieces of debt after the company
refinances existing bank debt with proceeds from the bond issue.
GPM will also be a guarantor on the bonds, alongside the main
operating companies.

GPM will use the issuance's proceeds to repay the majority of the
$250 million of currently outstanding debt. This transaction should
extend the group's maturity profile while providing additional
liquidity to the group.

The 'B+' rating on Karlou B.V. mirrors that on GPM (B+/Stable/--)
because we treat the 100%-owned subsidiary as a core group entity,
since it owns all of the group's assets. S&P understands that
Karlou B.V. will also become the group's main debt issuing
vehicle.

The stable outlook on Karlou B.V. mirrors that on GPM. Any rating
action on GPM will lead to a similar action on Karlou B.V.




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R U S S I A
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BANK PRIME: Put on Provisional Administration, License Revoked
--------------------------------------------------------------
The Bank of Russia, by virtue of its Order No. OD-1302, dated June
6, 2019, revoked the banking license of credit institution Bank
Prime Finance (Joint-stock Company), or Bank Prime Finance (JSC)
(Registration No. 2758, St Petersburg, hereinafter, Bank Prime
Finance). The credit institution ranked 366th by assets in the
Russian banking system.

The Bank of Russia took this decision in accordance with Clause 6,
Part 1 and Clauses 1 and 2, Part 2, Article 20 of the Federal Law
"On Banks and Banking Activities", based on the facts that Bank
Prime Finance:

   -- has completely lost its equity capital after the Bank of
      Russia revealed cash shortage totalling over RUR268 million;

   -- performed "scheme" operations to artificially maintain its
      capital to formally comply with the required ratios; and

   -- violated federal banking laws and Bank of Russia
      regulations, making the regulator repeatedly apply
      supervisory measures over the past 12 months, including
      two impositions of restrictions on attracting household
      deposits.

On May 29, 2019, a Bank of Russia inspection of tills at Bank Prime
Finance branches revealed a large cash shortage. Creation of
required loss provision for actually non-existent assets led a
complete loss of capital by the credit institution.

The Bank of Russia submitted information about the bank's
transactions suggestive of a criminal offence to law enforcement
agencies.

The Bank of Russia appointed a provisional administration to Bank
Prime Finance for the period until the appointment of a receiver or
a liquidator.  In accordance with federal laws, the powers of the
credit institution's executive bodies were suspended.

Information for depositors: Bank Prime Finance is a participant in
the deposit insurance system, therefore depositors6 will be
compensated for their deposits in the amount of 100% of the balance
of funds but no more than a total of RUR1.4 million per depositor
(including interest accrued).

Deposits are repaid by the State Corporation Deposit Insurance
Agency (hereinafter, the Agency).  Depositors may obtain detailed
information regarding the repayment procedure 24/7 at the Agency's
hotline (8 800 200-08-05) and on its website
(https://www.asv.org.ru/) in the Deposit Insurance / Insurance
Events section.


CB VZAIMODEISTVIYE: Put on Provisional Administration
-----------------------------------------------------
The Bank of Russia, by virtue of its Order No. OD-1300, dated June
6, 2019, revoked the banking license of Commercial Bank
Vzaimodeistviye Limited Liability Company, or CB Vzaimodeistviye
LLC (Registration No. 1704, Novosibirsk; hereinafter, Bank
Vzaimodeistviye).  The credit institution ranked 444th by assets in
the Russian banking system1.

The Bank of Russia took this decision in accordance with Clause 6,
Part 1, Article 20 of the Federal Law "On Banks and Banking
Activities", based on the facts that Bank Vzaimodeistviye:

   -- overstated the value of assets in order to improve its
      financial indicators and conceal its actual financial
      standing. The reflection in the credit institution's
      financial statements of the real value of assets at the Bank
      of Russia's request led to a significant (over 40%)
      decrease in its capital and, consequently, to grounds
      to take measures to prevent the credit institution's
      insolvency (bankruptcy), which created a real threat to
      interests of its creditors and depositors;

   -- failed to timely honour its obligations to creditors and
      depositors due to the loss of liquidity; and

   -- violated federal banking laws and Bank of Russia
      regulations, making the regulator repeatedly apply
      supervisory measures over the last 12 months.

The balance sheet of Bank Vzaimodeistviye held considerable volumes
of non-core and low-liquid assets primarily consisting of
non-residential real estate, including encumbered objects.  As a
result, the credit institution was unable to generate sufficient
cash flow in order to honour its obligations to creditors and
depositors on time.

The Bank of Russia appointed a provisional administration to Bank
Vzaimodeistviye for the period until the appointment of a receiver4
or a liquidator.  In accordance with federal laws, the powers of
the credit institution's executive bodies were suspended.

Information for depositors: Bank Vzaimodeistviye is a participant
in the deposit insurance system, therefore depositors6 will be
compensated for their deposits in the amount of 100% of the balance
of funds but no more than a total of RUR1.4 million per depositor
(including interest accrued).

Deposits are repaid by the State Corporation Deposit Insurance
Agency (hereinafter, the Agency). Depositors may obtain detailed
information regarding the repayment procedure 24/7 at the Agency's
hotline (8 800 200-08-05) and on its website
(https://www.asv.org.ru/) in the Deposit Insurance / Insurance
Events section.


CHUVASH REPUBLIC: Fitch Affirms 'BB+/B' IDRs, Outlook Stable
------------------------------------------------------------
Fitch Ratings has affirmed the Russian Chuvash Republic's Long-Term
Foreign- and Local-Currency Issuer Default Ratings at 'BB+' with
Stable Outlooks and Short-Term Foreign-Currency IDR at 'B'.

The affirmation is based on a 'Weaker' assessment of the republic's
risk profile and debt sustainability assessment of 'aa' according
to Fitch's rating case. This reflects the republic's sound fiscal
performance and moderate direct risk and is counterbalanced by the
modest size of the republic's economy and budget leading to a
limited fiscal capacity and flexibility.

Chuvash is located in the eastern part of European Russia. The
region's capital, the city of Cheboksary, is about 660km from
Moscow. According to budgetary regulation, Chuvash can borrow on
the domestic market. Its budget accounts are presented on a cash
basis while the law on a budget is approved for three years.

KEY RATING DRIVERS

Revenue Robustness Assessed as Weaker

Historically, Chuvash's socio-economic profile has been weak, with
GRP per capita at about USD3,650 (2018 preliminary), which
restricts the region's tax base. Together with the overall sluggish
national economic environment, this leads to limited prospects for
growth of the region's tax base. In 2018, Chuvash's GRP increased
by 0.6% yoy (issuer's estimate) continuing the trend of modest
economic growth at about 1% yoy in 2016 and 2017. This leads to
weak revenue prospects in real terms and puts a strain on revenue
robustness.

The region's revenue sources are composed of taxes (58% of total
revenue in 2018), most of which are linked to economic activity and
so exposed to economy fluctuations. Another important revenue
source is transfers from the federal budget, which contributed 38%
of total revenue in 2018. These are composed of formula-based
general purpose transfers (52% of total transfers) and other
intergovernmental grants, which are mostly discretional and exposed
to volatility.

Revenue Adjustability Assessed as Weaker

Fitch assesses Chuvash's ability to generate additional revenue in
response to possible economic downturns as limited. The federal
government holds significant tax-setting authority, which limits
Russian local and regional governments' (LRG) fiscal autonomy and
revenue adjustability. The regional governments have limited
rate-setting power over three regional taxes: corporate property
tax, gambling tax and transport tax. The proportion of these taxes
in the region's budget revenues was about 13% in 2018. Russian
regions formally have the rate-setting power over those taxes,
although the limits are set in the National Tax Code.

Expenditure Sustainability Assessed as Midrange

The region's control of expenditure is prudent, as evidenced by the
track record of the spending dynamic being close to that of revenue
during the last three years and it expects this policy to continue
in the medium term. Like other Russian regions, Chuvash has
responsibilities in education, healthcare, some types of social
benefits, public transportation and road construction. Education
and healthcare spending, which is of counter- or non-cyclical
nature, accounted for 33% of total expenditure in 2018. In line
with other Russian regions, Chuvash is not required to adopt
anti-cyclical measures, which would inflate expenditure related to
social benefits in a downturn. At the same time, the republic's
budgetary policy is dependent on the decisions of the federal
authorities, which could negatively affect the expenditure
dynamic.

Expenditure Adjustability Assessed as Weaker

Like most Russian regions, Fitch assesses Chuvash's expenditure
adjustability as low. The vast majority of spending
responsibilities are mandatory for Russian subnationals, which
leads to inflexible items dominating the expenditure structure.
Consequently, the bulk of expenditure could be difficult to cut in
response to potential revenue shrinking.

Fitch notes that the region retains some flexibility to cut or
postpone capital expenditure in case of stress, as the proportion
of capex to total expenditure averaged 24% in 2014-2018, which is
higher than the average Russian region. The ability to cut
expenditure is also constrained by the low level of per capita
expenditure (USD625 in 2018) compared with international peers.

Liabilities and Liquidity Robustness Assessed as Midrange

National budgetary regulation is generally supportive as Russian
LRGs are subject to debt stock limits and new borrowing
restrictions as well as limits on annual interest payments.
Derivatives and floating rates are prohibited for LRGs in Russia.
The limitations on external debt are very strict and in practice no
Russian region borrows externally. Chuvash follows a prudent debt
policy, reflected by its moderate fiscal debt burden (net adjusted
debt/operating revenue), which reduced to 25.0% of operating
revenue in 2018 from a peak of 40.6% in 2015. The direct debt
structure is well-balanced between market borrowings in the form of
bank loans (in total 43%) and low-cost loans from the federal
budget (57%). The republic is not exposed to material off-balance
sheet risks.

Liabilities and Liquidity Flexibility Assessed as Midrange

Chuvash's liquidity flexibility is supported by the liquidity
instruments in the form of a federal treasury line to cover
intra-year cash gaps. This treasury facility amounted to 1/12th of
annual budgeted revenue (excluding intergovernmental transfers) and
can be rolled over during the financial year. The counterparty risk
associated with the liquidity providers is 'BBB-', which limits the
assessment of this risk factor to Midrange.

Debt Sustainability Assessment: 'aa'

Like other Russian LRGs Fitch classifies Chuvash as a Type B LRGs,
which are required to cover debt service from cash flow on an
annual basis. The 'aa' assessment of debt sustainability is driven
by a strong payback ratio (net adjusted debt/operating balance),
which is the primary metric of the debt sustainability assessment
for Type B LRGs. According to Fitch's rating case, which envisages
some stress on both revenue and expenditure to capture historical
volatility, the payback ratio will remain sustainably below 5x over
the five-year projected period.

For the secondary metrics, Fitch's rating case assumes that the
fiscal debt burden will gradually increase and exceed 50% in 2023,
while the actual debt service coverage ratio (ADSCR: operating
balance to the debt service, including short-term debt maturities)
will approach 2x in 2023.

RATING DERIVATION

Fitch assesses Chuvash's standalone credit profile (SCP) at 'bb+',
which reflects a combination of a Weaker assessment of the region's
risk profile (result of three Weaker and three Midrange assessments
of Key Risk Factors) and a 'aa' assessment of debt sustainability.
The notch-specific rating positioning is assessed against Chuvash's
international peers. The IDRs are not affected by any asymmetric
risk or extraordinary support from an upper tier of government. As
a result, the republic's IDRs are equal to its SCP.

KEY ASSUMPTIONS

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

  - Tax revenue growth in line with local economy nominal growth

  - Operating expenditure growth of in line with inflation

  - Capital expenditure growth in line with local economy growth

  - Deficit is covered by new debt

  - Interest expenditure increasing in line with debt increase

Fitch's rating case envisages the following stress compared with
the base case:

  - Stress on corporate income tax by -2.2pp annually to reflect
historical volatility

  - Stress on current transfers made by +1.5pp compared with base
case growth to reflect higher inflation in the rating case

RATING SENSITIVITIES

Sustainable maintenance of fiscal debt burden below 50% in the
Fitch rating case coupled with sound payback below 4x could lead to
upgrade. A positive reassessment of Chuvash's risk profile,
particularly due to expenditure flexibility improvement, could be
positive for the ratings, provided debt sustainability metrics
remain unchanged.

The deterioration of the region's debt payback beyond five years
according to Fitch's rating case on a sustained basis could lead to
a downgrade.

VENTRELT HOLDINGS: Fitch Affirms BB- IDRs, Outlook Stable
---------------------------------------------------------
Fitch Ratings has affirmed Ventrelt Holdings Ltd's Long-Term
Foreign and Local-Currency Issuer Default Ratings at 'BB-' with a
Stable Outlook.

The ratings reflect Ventrelt's position as one of the leading
private water and waste water operators in Russia, with leasing and
long-term concession agreements signed with municipalities and
reasonable tariff growth. The ratings also incorporate the
company's solid credit metrics, smooth debt maturity and
comfortable liquidity. However, the ratings are constrained by the
lower protection granted by the rental agreements, an evolving
regulatory framework for tariff-setting and, to a lesser extent, by
the group's limited size and diversification relative to larger
peers' and 'BB' rated Russian companies'.

KEY RATING DRIVERS

Financial Profile Remains Strong: Fitch expects Ventrelt's funds
flow from operations (FFO) adjusted net leverage (net of
connections fees) to be around 2x on average over 2019-2023 (0.9x
in 2018), well below its negative rating guideline on FFO adjusted
net leverage (net of connections fees) of 4.0x and the bank loan
covenant of net debt/EBITDA of under 3.5x. This is due to healthy
tariff growth and despite its expectation that free cash flow (FCF)
will become negative on the back of increased capex plans,
especially in the regions where Ventrelt has signed concession
agreements - Tyumen and Voronezh.

Evolving Regulatory Framework: Despite the approval of long-term
tariffs for all of Ventrelt's water channels, the regional
regulator has the right to revise tariffs annually. They may also
not be completely free from political pressure. In 2019 Federal
Antimonopoly Service decreased tariffs in Tyumen and Barnaul.

Rental agreements, under which Ventrelt operates in four out of six
regions, are higher-risk in nature while some assets are leased
under short-term agreements, which are renewed annually. Concession
agreements are concluded for 25-30 years and provide better tariff
visibility and clearer cooperation with local municipalities. In
2018 Ventrelt terminated its activities in Tver city, which
accounted for around 6% of EBITDA, after the local authorities
decided to change the strategy of running water and wastewater
facilities.

Favourable Tariff Growth: Ventrelt's tariff growth was on average
slightly above inflation in 2011-2018, which was supportive against
the backdrop of the government's efforts to curb natural
monopolies' tariffs. Fitch expects new tariffs from 2020 to be
approved at about inflation level in the regions with rental
agreements, while for Voronezh and Tumen (managed under concession
agreements) tariffs will benefit from above inflation increase due
to investment programme implementation.

Expansion Strategy: Ventrelt's strategy envisages further expansion
into several Russian cities with at least 200,000 residents by
participating in concession auctions. Fitch views expanding of
business profile without significant deterioration of credit
metrics as credit-positive. Under concession auctions bidders are
selected based on the mix of proposed tariff growth, planned
investments and expected efficiencies in their business plans.
Therefore, Fitch does not expect significant M&A outflows.

Consolidated Approach: Fitch continues to rate Ventrelt based on
its consolidated profile, since the group is centrally managed
through the parent company, which wholly owns five out of six water
channels representing 82% of Ventrelt's EBITDA. Currently the
majority of debt is raised by OpCos (around 80%). Krasnodar
Vodokanal LLC, which contributes 29% of group's EBITDA, provides
sureties for RVK-Voronezh LLC (around 14% of group EBITDA) and the
holding company UK Rosvodokanal. There are no other sureties within
the group. Additionally, some loans agreements include
cross-default clauses covering debt at all water channels funded by
the bank.

DERIVATION SUMMARY

The regulatory environment and approach to asset ownership are the
key factors justifying the two-to five-notch differences between
Ventrelt's ratings and those of central European peers, Aquanet
S.A. (BBB+/Stable, SCP bbb), Miejskie Wodociagi i Kanalizacja w
Bydgoszczy Sp. z o.o. (MWiK, BBB/Stable, SCP bbb-) and Czech
Severomoravske vodovody a kanalizace Ostrava a.s. (SmVaK,
BB+/Stable), although the peers have higher leverage. Aquanet, MWiK
and SmVaK are owners of their assets and benefit from a track
record of predictable tariff-setting, while Ventrelt leases or
manages under concession its assets, and its tariffs are less
predictable.

Ventrelt is rated at the same level as Georgian Water and Power LLC
(GWP, BB-/Stable) but has a higher debt capacity (negative
sensitivity at 4.0x vs. GWP's 3.0x), since its stronger asset
quality, larger size, higher geographical diversification and
longer track record of favorable regulation are only partially
offset by GWP's asset ownership and developing regulation under the
regulatory asset base (RAB) principle. Ventrelt's financial profile
is strong compared with peers,' and the group has comfortable
leverage headroom within its ratings.

KEY ASSUMPTIONS

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

  - Moderate decline in volumes of water supply and drainage of
less than 1% annually in 2019-2023 due to efficiency measures and
expansion of water metering

  - Average tariff growth for water supply and drainage below
inflation in 2019 as approved by the regulators and at 6% on
average in 2020-2023, due mainly to the implementation of
investment programmes in Tyumen and Voronezh

  - Inflation of 5.3% in 2019 and 4.4% thereafter and operating
expenses increasing slightly below inflation

  - Capex-to-revenue ratio in line with management's forecasts

  - Dividend payments of 25% of net income from 2020

RATING SENSITIVITIES

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

  - Increased revenue and earnings visibility due to, for example,
more water channels switching to concession agreements and the
implementation of long-term tariffs

  - Sustainable positive FCF generation

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

  - Significant deterioration of the credit metrics on a sustained
basis (FFO adjusted net leverage (excluding connection fees) above
4.0x and FFO fixed charge cover (excluding connection fees) below
3.0x) due to, for example, insufficient tariff growth to cover
inflationary cost increases, or elevated borrowing costs not
compensated by capex cuts

  - A sustained reduction in cash generation through worsening
operating performance, deteriorating cash collection or
cancellation of rental agreements

LIQUIDITY AND DEBT STRUCTURE

Adequate Liquidity: At December 31, 2018 Ventrelt's cash and cash
equivalents of RUB3.7 billion were sufficient to cover current debt
maturities of RUB1.6 billion and Fitch-expected negative FCF of
about RUB1.3 billion. At end-2018 all outstanding loans were
denominated in Russian roubles.

SUMMARY OF FINANCIAL ADJUSTMENTS

Fitch does not capitalise Ventrelt's water infrastructure leases
(rent payments) as Ventrelt has no choice but to lease the assets.
Fitch capitalises other leases using a 6x multiple (Russia).

Impairment of intangible assets, gains/losses on disposal of
subsidiary, inventories and property, plant and equipment,
surpluses of inventories, written-off accounts payable and return
on national duty are excluded from EBITDA calculation.

FFO is adjusted by deducting revenue from connection fees to
calculate FFO connection fee-adjusted leverage and coverage
metrics.



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S P A I N
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BERING III: Moody's Assigns First-Time B2 CFR, Outlook Stable
-------------------------------------------------------------
Moody's Investors Service has assigned a first-time B2 corporate
family rating and a B2-PD probability of default rating to Bering
III S.a r.l. (Iberconsa S.A.), the parent company of Spanish
fishing company Grupo Iberica de Congelados S.A.. Concurrently,
Moody's has assigned a B2 rating to the EUR310 million senior
secured 1st lien term loan B facility due 2024 and to the EUR75
million Revolving Credit Facility (RCF) due 2024 (together the
senior secured facility) raised by Bering III. The outlook is
stable.

The rating assignment follows the acquisition by Platinum Equity of
a 70% stake in Iberconsa from Portobello Capital. Financing of the
transaction will include a new EUR310 million term loan, EUR10
million drawings under a new RCF and a EUR50 million Subordinated
Vendor Loan. The company expects to complete the transaction over
the next few weeks.

"Iberconsa's B2 rating reflects its well established fishing and
distribution operations as one of the largest suppliers of frozen
hake and shrimps, and the barriers to entry provided by the current
regulatory environment, which compensate for the company's
relatively small size, business concentration and exposure to
emerging markets," says Paolo Leschiutta, a Moody's Senior Vice
President and lead analyst for Iberconsa.

"Our rating assumes that the company will maintain a debt to EBITDA
ratio (as adjusted by Moody's) at around 5.0x and that it will be
able to offset potential cash flow volatility owing to factors
outside of its control such as fish availability, potential
regulatory changes and currency movements," adds Mr. Leschiutta.

RATINGS RATIONALE

Bering III is a newly formed parent company of Iberconsa, a Spanish
fishing company with operations in Argentina, Namibia, South Africa
and Spain, and distribution focus mainly across Southern Europe and
Asia.

The B2 rating assigned to Bering III is supported by Iberconsa's
(1) well established fishing operations in the southern hemisphere;
(2) the regulatory barriers provided by the current licenses and
quota systems; (3) the strong growth fundamentals in fishing
consumption globally; and (4) positive free cash flow generation
and high operating margins that allow for some volatility in
performance.

The ratings are constrained by Iberconsa modest size, narrow
geographic diversification both in terms of procurement and sales
distribution, and potential volatility in its operating performance
as the company remains exposed to a number of factors beyond
management's control like availability of fish, potential
regulatory changes, weather conditions, market prices of fish
products, oil price movements and foreign currency volatility.

The rating recognizes the protection offered by the current
regulatory environment and Iberconsa's existing licenses, which
allow for high margins and support positive free cash flow
generation. Although the quota systems have been relatively stable
over the last years, possible adverse changes in the current
fishing regulatory environment might result in increasing
competition leading to lower cash generation. Some of the company's
licenses, like the South African hake license, are up for renewal
over the coming months creating a degree of uncertainty around
future performance.

Business concentration is high as the company's Argentinian shrimp
business represent more than 50% of group profit. Moody's warns
that the company's profitability has grown in recent years thanks
to increasing contribution from a fast growing shrimp business
which has above-group average operating margins and the company
still has to demonstrate the sustainability of these results. The
shrimp and squid activities have a relatively concentrated fishing
season and are more exposed to weather conditions. As result, the
company's execution is key during the peak fishing months. However,
hake (31% of 2018 sales) is less exposed to adverse weather
conditions and catch volumes have been remarkably stable over the
last decade which provide a degree of stability in revenue
visibility.

Business seasonality due to timing of fishing and some revenue
concentration towards the end of the year, ahead of the Christmas
season, result in a peak of inventories between August and October.
This implies significant working capital requirements and cash flow
seasonality that the company needs to manage carefully.

Iberconsa's geographic diversification is also limited, with
significant reliance on emerging markets for its procurement
activity which increases operational risks and constrains the
rating. Procurement is concentrated in three countries: Argentina,
Namibia and South Africa, and distribution is concentrated in Spain
making the company's cash generation dependant on the operations in
a small number of countries.

Pro-forma for the acquisition by Platinum Equity, Moody's expects
Iberconsa to have initial leverage (measured as Moody's adjusted
debt to EBITDA) of around 5.5x, improving towards 5.0x by 2020, and
a Moody's adjusted EBIT margin around 15%.

Iberconsa's liquidity is adequate supported by the new EUR75
million RCF which can cover the company's working capital
seasonality needs and can compensate for a relatively low cash
balance at closing of EUR10 million. Despite some extraordinary
capex planned over the next three years and the implementation
costs of an efficiency optimisation programme, Moody's expects the
company to generate positive free cash flow over the next 12-18
months. Working capital peaks between June and October, when
Iberconsa builds up inventory following the start of the hake
season and the increase of shrimps in fishing grounds. The company
has one springing covenant tested only when the RCF is drawn more
than 35%.




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S W E D E N
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INTRUM AB: Fitch Affirms 'BB/B' Issuer Default Ratings
------------------------------------------------------
Fitch Ratings has affirmed Swedish-based credit management group
Intrum AB's Long-Term Issuer Default Rating at 'BB', Short-Term IDR
at 'B' and senior unsecured long-term debt rating at 'BB'. The
Outlook on the Long-Term IDR is Stable.

KEY RATING DRIVERS

IDRS AND SENIOR DEBT

The ratings of Intrum reflect its high leverage, a characteristic
of its sector and driven, in its own case, by the debt taken on as
part of its 2017 combination with the Lindorff group, and
subsequent corporate activity. They also take into account Intrum's
market-leading franchise in the European debt purchasing and credit
management sector, where the group benefits both from
diversification across 25 countries and from its high proportion of
fee-based servicing revenue, which complements more balance
sheet-intensive investment activities.

Fitch's core leverage metric for companies with proven stable
asset-based cash generation and/or significant
non-balance-sheet-related earnings, such as debt purchasers, is
gross debt-to- adjusted EBITDA (including adjustments for portfolio
amortisation). The benchmark boundary for leverage between 'b' and
'bb' range ratings is at 3.5x, and by Fitch's calculations the
end-2018 ratio was around 4.6x (after adjustment for non-recurring
items), which continues to constrain the overall rating at its
current level.

Management maintains a medium-term target for leverage on a net
debt-to-cash EBITDA basis of 2.5x-3.5x, and both gross and net
measures should decline as fuller EBITDA contributions are drawn
from acquisitions and synergies are realised. In 1Q19, on a rolling
12-month basis, Intrum saw its net debt leverage metric ease to 4x
from 4.3x at end-2018. It also expects further reduction over the
course of the year, notwithstanding a need in 2Q19 to fund both
dividend payments and investment in the Spanish real estate
servicer, Solvia Servicios Immobilarios.

Intrum's long-term funding is wholesale market-dependent, split
between bonds, private placements and a revolving credit facility.
All sources were refinanced in June 2017 as part of the Lindorff
transaction, leaving limited maturities in 2019 or 2020 but some
concentration thereafter as Intrum's revolving credit facility
(2021) and the five-year bonds (2022) fall due.

Intrum's 2018 deal with Intesa substantially increased the group's
presence in the sizeable Italian market, providing both a stake in
a EUR10.8 billion gross book value, predominantly secured loan
portfolio and an ongoing servicing partnership with one of Italy's
largest banks. Its scale brings execution risk, but management has
considerable experience in integrating new investments, notably in
respect of the merger with Lindorff, which has proceeded smoothly
for a transaction of its size.

Profitability is a rating strength for Intrum, benefiting from
recurring cash flows within its core businesses and a wide EBITDA
margin. The range of countries in which the group operates further
limits the dependence on any one market. Asset quality is driven by
the accuracy of Intrum's pricing models and strength of the group's
collection procedures - areas in which the group has a good track
record.

The rating of Intrum's senior unsecured debt is equalised with the
Long-Term IDR, reflecting Fitch's expectation for average recovery
prospects given that Intrum's funding is largely unsecured.

The Stable Outlook on Intrum's Long-Term IDR reflects its view that
Intrum should continue to report adequate profitability from its
servicing and investment activities while containing leverage.

From an ESG perspective in relation to financial transparency,
Intrum's reporting makes use of internally modelled metrics such as
estimated remaining collections. However, this is a standard
feature of the debt purchasing sector as a whole, and not specific
to Intrum.

RATING SENSITIVITIES

IDRS AND SENIOR DEBT

A sustained reduction of Intrum's cash flow leverage resulting in a
gross debt-to-EBITDA well within Fitch's 'bb' category range for
leverage (2.5x to 3.5x) could lead to an upgrade of Intrum's
Long-Term IDR and senior debt ratings.

Conversely Intrum's Long-Term IDR and senior debt ratings could be
downgraded if leverage shows a sustained increase from the current
level, or if performance weakens as a result of the group's
acquired debt portfolios not delivering the returns anticipated on
purchase or other adverse operational event.

Intrum's Short-Term IDR would only change if the group's Long-Term
IDR is upgraded above 'BB+' or downgraded below 'B-'.

Intrum's senior unsecured debt rating is primarily sensitive to
changes in Intrum's Long-Term IDR. Changes to its assessment of
recovery prospects for senior unsecured debt in a default (e.g.
introduction to Intrum's debt structure of a materially larger
revolving credit facility, ranking ahead of senior unsecured debt)
could also result in the unsecured debt rating being notched down
below the IDR.


MATRA PETROLEUM: May Need to Consider Liquidation Options
---------------------------------------------------------
Matra Petroleum AB, on May 22, 2019, disclosed that it was
evaluating a temporary restraining order and court injunction
against the company's US subsidiaries which further constrains
liquidity and refinancing options.

As the court order restricts intra-group transactions and funding
from the US subsidiaries, the group's parent company, Matra
Petroleum, currently does not have access to sufficient funding to
cover working capital requirements for the coming three months.

The court order further constrains the US subsidiaries refinancing
options as previously disclosed in the announcement of Matra's
annual report on April 29, 2019.  Matra Petroleum's U.S subsidiary
has not secured refinancing or extension of loans and commitments
that expire in the third and fourth quarters 2019, including loans
provided under credit agreements with Legacy Texas Bank and Melody
Business Finance.  As Matra's US subsidiaries are not in compliance
with the loan agreements, these lenders are in position to demand
acceleration of Matra Petroleum's obligations and/or foreclose on
collateral for the loans.

In case such demands are presented or no refinancing is in place or
if further funding of the parent company is not secured, the
conditions for continued operations would be insufficient and Matra
would need to consider liquidation options including seeking
protection under relevant insolvency legislation in Sweden and the
USA.

                  About Matra Petroleum

Matra Petroleum AB (publ) -- http://www.matrapetroleum.com-- is a
Swedish independent oil and gas exploration and production company
operating in the United States, where the company owns and operates
170 leases, covering an area of 45,640 net acres in the Panhandle
region in Texas.  Matra's reserves amount to 22.8 million barrels
of oil equivalent.  Matra Petroleum 's shares are traded on NASDAQ
First North in Sweden under the symbol MATRA.




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

ISTANBUL: Fitch Affirms BB/BB+ Issuer Default Ratings, Outlook Neg.
-------------------------------------------------------------------
Fitch Ratings has affirmed the Metropolitan Municipality of
Istanbul's Long-Term Foreign- and Local-Currency Issuer Default
Ratings at 'BB ' and 'BB+', respectively with Negative Outlooks.
The National Long-Term Rating has been affirmed at 'AAA(tur)' with
a Stable Outlook.

Istanbul's Long-Term Foreign Currency IDR is capped by the
sovereign Long-Term Foreign-Currency IDR (BB/Negative).

Fitch does not expect notable changes to the city's socio-economic
profile. According to budgetary regulation, Istanbul can borrow on
both the domestic and external markets. Its budget accounts are
presented on a modified accrual basis, while according to law
budgets are prepared for actual and two consecutive years and
approved for the actual year.

With about 15.1 million inhabitants is the largest city in Turkey,
capturing 18.4% of the nation's population. The city acts as a
business and economic hub at the intersection of the two continents
(Europe and Asia) with a geostrategic importance for the country.
Istanbul captures on average 30% of national GDP (2017: 31.2%),
significantly contributing to the nation's economy. At-end 2017,
Istanbul's GDP per capita was USD17,827, which is 235% above the
national median (USD10,602).

KEY RATING DRIVERS

Revenue Robustness Assessed as Weaker

As the main economic and business hub of Turkey, Istanbul benefits
from a well-diversified and strong tax base with sound growth
prospects. However, Fitch expects it to be adversely affected by
the continued negative national operating environment. In 2017, the
city's real GDP growth rate of 8.0% was above the national level of
7.4%, Nevertheless, due to the continuing weak national economy,
Fitch conservatively forecasts the local economy will underperform
the national economy in 2019 and gradually pick up from 2020
onwards.

Istanbul's tax revenue income is defined by law and is the main
source of the city's income. The bulk of the city's operating
revenue comes from the nationally collected and allocated tax
revenues attributable to the city's local performance, which
constitutes almost 80% (2018: 78%) of its operating revenue. This
is followed by current transfers received, comprising tax revenue
allocation by the central government according to population and
area criteria, which made up 13.2% of operating revenue. However,
the stability of these transfers should be viewed against the
sovereign rating.

Local tax revenue comprises less than 1.0% of its operating revenue
with the remainder coming from non-tax revenue such as fees, fines
and other operating revenue. Non-tax revenue is charges, rental
income and fees levied for public services such as car parking,
private bus lines, and museum entrance. The city does not have full
discretion on these items, as the range for charges and fees' rates
is predefined by the central government. In 2018, 8% of operating
revenue was generated by non-tax revenue.

Operating revenue demonstrates stable and slightly above annual
growth in comparison with the national real GDP growth rate,
underpinned by the strong GDP per capita, 235% higher than the
Turkey's median. However, the robustness of the economic resilience
should be viewed against the sub investment grade rating of the
sovereign.

Revenue Adjustability Assessed as Weaker

Istanbul's ability to generate additional revenue source in times
of local economic downturn is limited as its discretion on its tax
autonomy is restricted by nationally imposed tax rates. Within the
unitary administrative structure of the government, the central
government is the rate-setting authority, which significantly
limits Turkish local and regional governments' (LRG) fiscal
autonomy and revenue adjustability. LRGs have very limited
rate-setting power over local taxes such as property tax, natural
gas and electricity consumption tax, advertisement and promotion,
fire insurance and entertainment tax.

Expenditure Sustainability Assessed as Midrange

Istanbul's track record of control of opex is strong, as evidenced
by strong operating margins in an international context at on
average close to 45% (five-year average: 44%). By law, Turkish
metros have a strong investment profile, with investments
concentrated in the provision of large and essential infrastructure
investments; but they are not required to adopt anti-cyclical
measures, which would inflate capex in a period of economic
downturns. Accordingly, the main drivers of total spending are
capex (58.5% of total expenditure) followed by purchase of goods
and services (27.5%) and staff costs (6.0%) at end-2018.

Local elections in March 2019 led to aggressive frontloading of
capex with a share of 55% yoy on average in 2015-2018, leading to a
significant increase in borrowing, and deterioration of spending
discipline, with large deficits before financing on average close
to 30% of the total revenue.

Expenditure Adjustability Assessed as Weaker

Fitch assesses the city's ability to reduce spending in response of
shrinking revenue as weaker. The rigidity of the expenditure
structure is low by international comparison, with staff costs less
than 20% of total spending and capex consistently above 50% of
total expenditure, increasing the leeway to cut spending with
respect to the local economic cycle. However, the track record
demonstrates loosened budget discipline for the last four
consecutive years due to the large increase in capex prior to the
local elections in March 2019, thereby posting large deficits.

Although the city is mandated by law to undertake large
infrastructure investments, it has the capability to contain
non-mandatory investments and to smooth out its investment tenure
profile, and has the ability to adjust its capex investments to
economic cycles. Istanbul has been able to adjust its opex in times
of economic downturn, producing stable and strong operating
margins.

Liabilities and Liquidity Robustness Assessed as Weaker

According to national budgetary regulation, Turkish LRGs are
subject to debt revenue limits and approval from upper tier
government for their external borrowings, which it views as
credit-positive. However, Fitch believes that national debt
regulation has resulted in large Turkish metros being exposed to
material unhedged FX risk, making a significant dent in their
budgets in times of significant lira volatility. Although the use
of hedging is not prohibited by law, the lack of available
counterparties impedes the use of these instruments. This reflects
the structural weakness of capital markets in Turkey, which are
less deep and liquid.

Istanbul is heavily exposed to unhedged FX risk, as 84% of its
total debt consists of unhedged foreign debt. At end-2018, the
Turkish lira had depreciated by 33.8% yoy against the euro. This
led to a passive increase in Istanbul's debt stock, of TRY2.2
billion or 25%, as 84% of its debt stock comprised euro-denominated
loans at end-2018.

The city's debt profile is amortising and its debt stock has a
lengthy weighted average maturity of six years, with under 10% of
its debt maturing within one year, mitigating refinancing pressure.
Debt consists solely of bank loans, with the majority at variable
rates, exposing the city to interest rate risk. The city is not
exposed to material off-balance sheet risk.

Liabilities and Liquidity Flexibility Assessed as Weaker

Istanbul's liquidity is solely restricted to its own cash reserves,
where the year-end cash coverage of debt servicing costs declined
to 1.4x from the five-year average of 4.4x, mainly due to
significant offloading of capex. In addition, there are no
emergency bails out mechanisms or Treasury facilities in place to
overcome any financial squeeze. However, the city has good access
to financial markets and can generate additional liquidity through
the sale of assets, which in 2018 totalled TRY1.3 billion. Istanbul
has committed bank lines that accounted for TRY1.2 billion at
end-2018.

Debt Sustainability Assessment: 'aaa'

Istanbul's SCP is assessed at 'bbb-', which reflects a combination
of its weaker profile assessment of the city's risk profile and
'aaa' assessment of debt sustainability. The SCP also factors in an
appropriated comparison of Istanbul with its peers. Fitch did not
identify any asymmetric risk or extraordinary support from the
central government that could affect the IDR beyond the SCP
assessment. At the same time, Istanbul's Long-Term Foreign Currency
IDR is capped by Turkey's sovereign Foreign-Currency IDR.

The 'aaa' assessment is derived from a combination of a strong
payback ratio (net adjusted debt/operating balance), which is in
line with a 'aaa' assessment, a fiscal debt burden (net adjusted
debt to operating revenue) corresponding to a 'a' assessment, and a
sound actual debt service coverage ratio (ADSCR: operating
balance-to-debt service, including short-term debt maturities)
assessed at 'aa'.

Like other Turkish LRGs Istanbul is classified by Fitch as a type B
LRG, under which the city covers debt service from its cash flow on
an annual basis. According to Fitch's rating case the payback
ratio, which is the primary metric of debt sustainability
assessment for type B LRGs, will remain between 2.8x and 3.6x over
its five-year projected period. For the secondary metrics Fitch's
rating case projects that the fiscal debt burden will decrease to
122.7%, during most of the forecast period while the ADSCR will
remain above 2.5x on average in 2019-2023.

KEY ASSUMPTIONS

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

  - Annual growth rate of operating revenue on average 17.6% (1%
above the national nominal GDP growth rate for 2019-2023 on
average)

  - Annual growth rate of operating expenditure 11.5% yoy on
average

  - Proportion of capex to be around 47% of total expenditure

  - Average cost of debt to increase on average 7%

  - Following the sovereign's forecast for the EUR/TRY exchange
rate, amount of debt and proportion of foreign debt interest
expenses to increase by 7.1% and 3.4% in 2019 and 2020,
respectively

Fitch's rating case envisages the following stress compared with
the base case:

  - Annual growth rate of operating revenue to be 2.8pp lower than
base case scenario

  - Annual growth rate of operating expenditure 0.5 pp above the
base case

  - Capex to account for on average 47% of total spending

  - Average cost of debt to increase on average to 7.6%

  - EUR/TRY year-end forecasts for 2019-2020 are taken by the
sovereign. For 2021-2023, Fitch applied a prudent approach and
discounted a 15% yoy depreciation following the historical average
close to 15% yoy depreciation.

RATING SENSITIVITIES

A downgrade of the sovereign or sharp deterioration of the net
payback ratio beyond five years and the fiscal debt burden above
150% that would lead to reassessment of the debt sustainability
could lead to a downgrade.

An upgrade would be possible if the sovereign was upgraded provided
that the city maintains its robust debt sustainability.




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

ARCADIA GROUP: Creditors Meetings to Vote on CVA Adjourned
----------------------------------------------------------
James Davey at Reuters reports that Philip Green's Arcadia fashion
group adjourned the June 5 creditor meetings to vote on the
struggling British retailer's restructuring plan until June 12,
seeking more time to win over disgruntled landlords and avoid a
collapse into administration.

According to Reuters, Mr. Green needs his restructuring proposals
for each of Arcadia's brands -- Topshop, Topman, Burton Menswear,
Dorothy Perkins, Evans, Miss Selfridge and Wallis -- to be approved
by creditors, including landlords, or the group, which employs
18,000, will likely be placed into administration.

His plan consists of seven Company Voluntary Arrangements (CVAs)
that will close stores and cut rents, Reuters notes.

Arcadia's landlords include British Land, Intu Properties, Aviva
and Land Securities, Reuters states.

Arcadia said it had secured the support of its pension trustees,
the Pensions Regulator and the Pension Protection Fund, as well as
the backing of its trade creditors and "a significant number" of
landlords, Reuters relates.

Mr. Green's plan involves closing 23 of Arcadia's 566 UK and Irish
stores, threatening 520 jobs, along with steep rent reductions and
revised lease terms across 194 other locations, Reuters discloses.

Arcadia needs the support of more than 75% of unsecured creditors
present to get the CVAs through, Reuters says.

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.  


COLD FINANCE: S&P Gives Prelim BB Rating on GBP34MM Class E Notes
-----------------------------------------------------------------
S&P Global Ratings assigned preliminary ratings to Cold Finance
PLC's class A, B, C, D, and E notes.

Cold Finance is a commercial mortgage-backed securities (CMBS)
transaction backed by a loan on a portfolio of 14
temperature-controlled warehouse properties located throughout the
U.K.

To satisfy U.S. risk-retention requirements, an additional amount
of unrated class R notes, corresponding to not less than 5.0% of
each class of notes' fair value at closing (determined using a fair
value measurement framework under U.S. generally accepted
accounting principles), will be issued and will be retained by the
transaction sponsor, Lineage UK Intermediate Holdings Ltd.

The issuer will on-lend the note proceeds to the borrowers (Wisbech
Propco Ltd., Real Estate Gloucester Ltd., Harley International
Properties Ltd., and Yearsley Group Ltd.) through an
issuer/borrower loan. The borrowers will mainly apply the proceeds
of this loan toward the prepayment of a bridge loan, provided by
Goldman Sachs, for the acquisition of U.K.-based Yearsley Group and
the refinancing of the Gloucester and Wisbech properties.

Payments due under the issuer/borrower loan primarily fund the
issuer's interest and principal payments due under the notes. The
issuer borrower/loan is secured on a portfolio of 14
temperature-controlled warehouse facilities located throughout the
U.K.

The borrowers are indirectly owned (through wholly owned
intermediate holding companies) by Lineage Logistics Holdings LLC,
a specialist cold storage operator, which in turn is backed by
U.S.-based sponsor Bay Grove Capital.

The properties' current market value is GBP412.1 million, which
equates to a loan-to-value (LTV) ratio of 65.2% (based on rated
notes) and 68.6% for the full loan (including the class R retention
piece).

The issuer/borrower loan provides for cash trap mechanisms set at
76.1% for the LTV ratio, or minimum debt yields set at 9.6%. The
loan has an initial term of three years with two one-year extension
options available subject to the satisfaction of certain
conditions. The amortization schedule for the loan includes 1.0% of
principal in year two. In year three to five, if the debt yield is
above 10.7%, it will include another 1.0% each year; otherwise, if
the debt yield is below or equal to 10.7%, the loan will amortize
by 2.0%.

S&P's preliminary ratings address Cold Finance's ability to meet
timely interest payments and principal repayment no later than the
legal final maturity in August 2029. Should there be insufficient
funds on any note payment date to make timely interest payments on
the notes (except for the then-most-senior class of notes), the
interest will not be due but will be deferred to the next interest
payment date. The deferred interest amount will accrue interest at
the same rate as the respective class of notes.

  Ratings List
  
  Issuer  
  Cold Finance PLC

  Class   Prelim. rating  Prelim. amount
                            (mil. GBP)
     A    AAA (sf)      122.0
     B   AA- (sf)       40.0
     C   A- (sf)       36.0
     D   BBB- (sf)       36.0
     E   BB (sf)       34.6
     R   NR               14.2

  NR--Not rated.


CONTOURGLOBAL PLC: S&P Affirms 'BB-' ICR, Outlook Positive
----------------------------------------------------------
S&P Global Ratings affirmed its 'BB-' rating on ContourGlobal PLC
(CG) and its 'BB-' rating on CountourGlobal Power Holdings (CGPH),
based on the guarantee from CG. Finally, S&P affirmed its 'BB'
rating on the existing EUR750 million debt at CGPH. The '2'
recovery rating on is unchanged.

S&P said, "The affirmation and positive outlook reflect that we
could upgrade CG over the next 12 months if it continues to expand
successfully and acquires assets that add incremental and stable
EBITDA. CG announced two large acquisitions in 2018 and 2019--a 250
megawatt (MW) solar renewable portfolio in Spain (of which it later
disposed a 49% stake), and 518MW combined heat and power plants in
Mexico. After the Mexico acquisition closes, the company would
still have a significant pro forma cash balance of around $300
million. It also has strong cash generation ability after
accounting for committed capital expenditure (capex) and the
dividend commitment. We understand CG has identified a pipeline of
targets with a high likelihood of execution over the next 12
months, with a cash flow profile benefiting from long-term
contracts and limited exposure to commodities and foreign exchange
risk. In our view, CG's strategy has been consistent over time and
we expect to see further improvement in asset diversification by
country and power generation source, resulting in incremental cash
flow contribution to the parent with no additional leverage.

"Factoring in these acquisitions, we forecast asset-level
distribution of $280 million-$350 million over our rating horizon
of 2019-2021. We expect the holdco's adjusted debt-to-EBITDA ratio
to strengthen to 3.0x-3.5x from 3.6x in 2018 and EBITDA interest
coverage to remain above 6x. While these metrics are commensurate
with a higher rating or closer to it for the leverage ratio, an
upgrade would also depend on continued success in completing new
acquisitions, given that market multiples for similar assets are at
all-time highs. We also expect the additional cash flows to some
extent replace the weaker-than-expected cash flows from existing
wind power plants. This is because the wind resource globally was
poor in particular in Brazil (resource below projected P90 levels).
We do not forecast a reversion to more typical wind levels over the
next few years. European solar assets will also contribute with
less-than-expected cash flows due to the completion of the
sell-down of a 49% stake in 2018.

"Still, we note some risks that are more applicable to CG compared
with peers in the same rating category. CG will remain somewhat
smaller than some other 'BB' category peers such as AES Corp and
Clearway Energy Inc. Despite its increasing diversification, CG
still has meaningful exposure to developing economies. In our view,
the increased participation in emerging markets could add pressure
to its business profile and overall rating. We note that the
company requires political risk insurance to participate in
higher-risk developing economies, and this could mitigate potential
losses, though has not yet been fully tested. We understand CG will
start the construction of its 500MW lignite-fired power plant in
Kosovo in late 2019/2020. If this project proceeds with 100%
ownership retained, and if no additional growth portfolio assets
come online in the next two-to-three years, it would reduce
portfolio diversity as it could provide around 30% of
distributions. However, management has successfully improved
portfolio diversity during the past few years and we expect it will
maintain the benefits of diversification. CG's management could do
this either through selling a minority stake in that asset or
adding other assets to offset its relative effect on distribution.

"Because the asset portfolio is held in a number of non-recourse
subsidiaries, and CG benefits from a residual distribution stream
from these assets, we rate the company under our Project Developer
Criteria. Under this methodology, we look at holdco-level debt and
distributions to the holdco rather than consolidated debt and
EBITDA figures.

"The positive outlook reflects that we could upgrade CG if it
successfully executes on its pipeline of high-probability
acquisitions over the next 12 months and adds incremental and
stable EBITDA from new projects. This could support our projections
that the adjusted holdco debt-to-EBITDA ratio will strengthen to
3.0x-3.5x and holdco EBITDA to interest will remain significantly
over 6x during our two-year outlook period.

"We also expect CG's portfolio of power generation assets will
continue to operate under long-term contracts with mostly
investment-grade counterparties, and generate fairly predictable
cash flows to support its holdco debt obligations. We also expect
CG to maintain portfolio diversity in terms of the percentage of
contributions from the three largest assets.

"We would consider upgrading CG if we gain more certainty about
planned acquisitions, namely that adjusted holdco debt to EBITDA
will fall strongly to 3.0x-3.5x while EBITDA interest coverage
stays well above 6x. We would also likely need to see continued
cash flow diversification in less riskier countries. Despite the
improved size and cash flow stability over the past few years,
emerging market exposure could still limit the rating (for example,
Kosovo).

"We could downgrade CG if we see a falloff in distributions from
the asset portfolio, or an increase in debt at CGPH such that
adjusted holdco debt to EBITDA increases above 4x or we see EBITDA
to interest decline below 3x over our outlook period. The portfolio
is reasonably diversified by fuel, geography, and off-taker, and is
over 90% contracted. We therefore see counterparty risk from
off-takers or governments as the most likely cause of such a
decline, with higher capital spending on new assets, a falloff in
renewable resources, or operating cost escalation as other possible
causes. We also see rating pressure if the company does not further
diversify its cash flows to mitigate a potentially high
concentration of exposure to riskier projects and countries, such
as the construction of its 500MW coal fired power plant in
Kosovo."


GUILD GROUP: Enters Into Administration, Venues Closed
------------------------------------------------------
Business Sale reports that Guild Group Limited, the company behind
the coveted Preston Guild Hall, which has hosted stars like David
Bowie and Queen, is set to collapse into administration after
making its application to the High Court in Manchester.

Owner Simon Rigby announced the fate of the company in a statement
to the public, stating that insolvency specialists The Business
Debt Advisor have been called in to handle the administration
process, with licensed insolvency practitioner Bev Budsworth
appointed as the administrator, Business Sale relates.

Mr. Rigby, as cited by Business Sale, said the administrator would
"aim to maximize the return to the company's secured and unsecured
creditors.

"For individuals who have purchased tickets in advance, we will be
ensuring that they receive a refund if the show is not available
via the new operator."

Located in the heart of Preston, the venue was established in 1972
and at one point was the regular home of the UK Snooker
Championships and annual UCLan graduation ceremonies, Business Sale
discloses.  It sports space for 716 seats in its Charter Theatre,
and 2,000 in the Great Hall, Business Sale states.

According to Business Sale, in light of the administration, the
venues have closed indefinitely, with Rigby remarking: "The
administration strategy will be to agree terms with a chosen
operator who will take over the running of [the venue]."


HEATHROW FINANCE: Fitch Affirms Outstanding Notes at 'BB+'
----------------------------------------------------------
Fitch Ratings has affirmed Heathrow Funding Limited's class A and B
bonds at 'A-' and 'BBB', respectively, with Stable Outlooks. Fitch
has also affirmed Heathrow Finance PLC's outstanding notes at 'BB+'
with a Stable Outlook.

KEY RATING DRIVERS

The affirmations reflect Heathrow's continued strong operational
and financial performance, with traffic growth ahead of Fitch's
base case in 2018. Heathrow is a large hub gateway airport serving
a strong origin and destination market that experienced a small
peak to trough decline of 4.4% in 2008-09. The airport is well
maintained but capacity constrained. Its debt structure is
protective, secured and ring-fenced. Proven access to capital
markets mitigates refinance risk.

The bulk of capex, related to the construction of a third runway,
will be concentrated in the next regulatory period H7 (expected to
be from 2022-2026) but there is still substantial uncertainty
around the final regulatory decisions, including the allowable
return on capital (WACC) for H7. Heathrow's cash flow generation
and forecast leverage evolution is highly sensitive to WACC
changes. However, its ability to reduce or defer shareholder
distributions, together with the shareholders' stated commitment to
maintaining the existing investment grade rating could mitigate the
impact of a reduction on the allowable H7 WACC. Fitch expects
greater clarity on the H7 regulatory outcome by the end of 2019.

Large Hub with Resilient Traffic: Volume Risk – Stronger

Traffic has remained resilient, growing by 2.7% in 2018. Heathrow's
maximum peak-trough fall in traffic of just 4.4% through the 2008
economic crisis was due to a combination of factors: the
attractiveness of London as a world business centre; the role of
Heathrow as a primary hub offering strong yield for its resident
airlines; the location and connectivity of Heathrow with the
well-off western and central districts of the city; and unsatisfied
demand as underlined by the capacity constraint, which also helps
absorb shocks.

Regulated and Inflation-Linked: Price Risk – Midrange

Heathrow is subject to economic regulation, with a price cap
calculated under a single till methodology based on RPI+X, and is
currently set at RPI-1.5% for the Q6 regulatory period, which
started in April 2014 and will be extended to 2021. The cap is set
by an independent regulator, the UK Civil Aviation Authority (CAA),
whose duties include ensuring that airports' operations and
investments remain financeable and affordable.

The price cap is established to offset Heathrow's significant
market power and is highly sensitive to the assumptions made by the
regulator on several building blocks, such as cost of capital,
traffic forecast and operational efficiency. The regulatory process
that leads to the cap determination is transparent but creates
material uncertainty each time it is reset.

Capacity Constrained, Funding Uncertainty: Infrastructure
Development/Renewal - Midrange

Heathrow's next regulatory period brings more uncertainty relating
to the approval, planning, funding and execution of the third
runway project. Fitch believes that Heathrow's track record of
successfully accessing capital markets to secure funding and of
delivering capex projects mitigates some of these risks. Fitch
also notes the regulator's mandate to ensure financeability of
capex in addition to affordability to end users as supportive,
despite some uncertainty regarding timing and price-recovery of the
investment.

Refinancing Risk Substantially Mitigated: Debt Structure - Midrange
(Class A); Midrange (Class B); Weaker (HY)

The class A debt benefits from its seniority, security, and
protective debt structure (ring-fencing of all cash flows and a set
of covenants limiting leverage). It is exposed to some hedging and
refinancing risk, which is mitigated by the issuer's strong capital
market access, due to an established multi-currency debt platform
and the use of diverse maturities. The class B notes benefit from
many of the strong structural features of the class A notes. The HY
notes have a weaker debt structure due to their deep structural
subordination.

Financial Profile

Fitch's rating case five-year average post maintenance interest
coverage ratio (PMICR) is 2.0x for the 'A-' rated class A bonds,
1.7x for the 'BBB' rated class B bonds and 1.3x for the 'BB+' rated
HY bonds. In the rating case, net senior debt to EBITDA averages
about 7.4x but increases substantially from 2018 to 2023, largely
driven by the debt-funded capex. However, Heathrow's balance sheet
flexibility and/or partial equity funding of expansionary capex
could reduce the impact on projected leverage.

PEER GROUP

Heathrow is one of the most robust assets in the global sector. It
has higher leverage than its European peers (Aeroports de Paris;
A+/Stable), albeit with a better debt structure for senior debt.
Compared with Gatwick (BBB+/Stable), Heathrow's bonds benefit from
a stronger revenue risk profile.

RATING SENSITIVITIES

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

  - Class A notes: net debt to EBITDA consistently above 8x and
    average PMICR below 1.6x.

  - Class B notes: net debt to EBITDA consistently above 9x and
    average PMICR below 1.3x.

  - HY notes: net debt to EBITDA above 10x, PMICR below 1.15x
    and dividend cover below 3.0x.

Exposure to aviation downturn: A marked and durable degradation of
the British economy as a result of uncertainties regarding the
Brexit outcome, among other factors, could derail Heathrow's
resilience. Evidence of recessionary prospects over two years could
prompt negative rating action.

Financing of the third runway: a significant reduction of WACC
compared with the current level, with a knock-on impact on
projected leverage would be credit negative.

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

  - Class A notes: net debt to EBITDA below 7x and average PMICR
above 1.8x.

  - Class B notes: net debt to EBITDA below 8x and average PMICR
above 1.5x.

  - HY notes: An upgrade is unlikely given Heathrow Finance PLC's
management of its capital structure and subsequent targeting of HY
investors.

CREDIT UPDATE

Revenue grew by 3% in 2018 vs 2017 and opex grew by 0.8%, resulting
in EBITDA growth of 4.4% to GBP 1.84 billion from GBP 1.76 billion.
Heathrow's regulatory asset base also increased to GBP16.2 billion
from GBP15.8 billion. Several recent refinancings have also pushed
out debt maturities at attractive rates.

Overall, Heathrow is on track to significantly outperform the
original Q6 forecast by about 5.4% in terms of revenue, 4.5% in
terms of EBITDA, 5.3% in terms of passengers, underperform by 2.4%
in terms of opex, and delivered additional operational efficiency
of 2.8% compared to the Q6 target.

Heathrow has proposed an agreement with airlines for 2020 and 2021,
built around rebates overlayed on an extension of the existing
RPI-1.5% price path and regulatory framework. The CAA supports this
approach in principle and is currently consulting with
stakeholders. This deal may allow all parties to focus on H7 and
provide Heathrow with some downside protection. In the short term,
there will be lower prices for airlines and no negative adjustment
of the RAB in 2022.

Planning of the third runway is ongoing and Heathrow is proceeding
with stakeholder consultations ahead of submission of its final
plan to the CAA in 2020. The CAA plans to provide additional
clarity on the regulatory framework in mid-2019. The latest report
by independent consultant PWC in February 2019 suggests a
significantly lower WACC compared with previous periods, which
could strain leverage during the expansion.

Fitch Cases

Fitch's rating case from 2019-23 assumes relatively flat traffic
consistent with slightly higher airline load factors and the
airport's capacity constraint, regulatory price reductions to 2021
overlaid with the proposed airline deal and higher cost of new debt
(by 200bp) in 2020 and 2022. Fitch assumes a lower WACC for
2022-23, consistent with the CAA's public consultation materials.

Consequently, the largely debt-funded capex which ramps up by 2021
and then again in 2022-23, together with the reset of the Q6
outperformance and the reduction of WACC strains forecast leverage.
There is substantial uncertainty around the final regulatory
decision and some uncertainty around timing and price recovery of
the investment. However, Fitch notes positively that Heathrow has
additional flexibility not factored into its forecast, including
dividend deferral leading up to capex ramp-up and partial funding
of the expansion through shareholder contributions.

Asset Description

Heathrow is a major global hub airport with significant origin and
destination traffic and resilience due to its status as the
preferred London airport and capacity constraints. Peers include
Aeroports de Paris in terms of size and Gatwick in terms of
location and debt structure.

Revenues are regulated and subject to an inflation price cap on a
single till basis. Fitch views the structured, secured and
covenanted senior debt as offsetting some of the higher expected
five-year average leverage under the Fitch rating case for the
class A and B bonds compared with peers. The HY bonds are, by
nature, structurally subordinated.


JUBILEE CLO 2019-XXII: S&P Rates EUR6MM Class F Notes 'B-'
----------------------------------------------------------
S&P Global Ratings assigned its ratings to Jubilee CLO 2019-XXII's
class A, B-1, B-2, C-1, C-2, D, E, and F notes.

The ratings assigned to Jubilee XXII's notes reflect S&P's
assessment of:

-- The diversified collateral pool, which consists primarily of
broadly syndicated speculative-grade senior secured term loans and
bonds that are governed by collateral quality tests.

-- The credit enhancement provided through the subordination of
cash flows, excess spread, and overcollateralization.

-- The collateral manager's experienced team, which can affect the
performance of the rated notes through collateral selection,
ongoing portfolio management, and trading.

-- The transaction's legal structure, which S&P expects to be
bankruptcy remote.

-- The transaction's documented counterparty replacement and
remedy mechanisms adequately mitigate its exposure to counterparty
risk under our current counterparty criteria.

S&P said, "Following the application of our structured finance
ratings above the sovereign criteria, we consider the transaction's
exposure to country risk to be limited at the assigned rating
levels, as the exposure to individual sovereigns does not exceed
the diversification thresholds outlined in our criteria.

"We also consider that the transaction's legal structure to be in
line with our legal criteria (see "Structured Finance: Asset
Isolation And Special-Purpose Entity Methodology," published on
March 29, 2017).

"Following our analysis of the credit, cash flow, counterparty,
operational, and legal risks, we believe that our ratings are
commensurate with the available credit enhancement for each class
of notes."

Jubilee XXII is a broadly syndicated collateralized loan obligation
(CLO) managed by Alcentra Ltd.

Ratings List

Issuer  

Jubilee CLO 2019-XXII B.V.

Class         Rating        Amount
                          (mil. EUR)
A              AAA (sf)     228.00
B-1            AA (sf)       44.50
B-2            AA (sf)       14.50
C-1 Dfrd       A (sf)        18.00
C-2 Dfrd       A (sf)        10.00
D Dfrd         BBB- (sf)     25.50
E Dfrd         BB- (sf)      19.00
F Dfrd         B- (sf)        6.50
Subordinated   NR            41.70

NR--Not rated.



KELDA FINANCE 3: S&P Alters Outlook to Negative & Affirms 'BB-' ICR
-------------------------------------------------------------------
S&P Global Ratings revised the outlook on Kelda Finance (No. 3) PLC
to negative from stable. At the same time, S&P affirmed the 'BB-'
long-term issuer credit rating on Kelda.

S&P is also affirming the 'A-' issue rating on Yorkshire Water
Finance Ltd. (YWS)'s class A debt, the 'BBB' issue rating on its
class B debt, and the 'AA' issue rating on the senior secured bonds
issued by YWS and guaranteed by Assured Guaranty Europe PLC. The
outlook on all these issue ratings is stable.

Kelda Finance (No. 2) PLC (Kelda) is the holding company of
Yorkshire Water Services Ltd. (YWS). YWS benefits from structural
enhancements designed to reduce the risk of nonpayment of scheduled
debt service payments. These, in turn, increase the risk at the
Kelda holding level, which almost entirely depends on upstream
distributions from YWS to service its own debt.

The revision of the outlook to negative on Kelda reflects YWS's
limited financial headroom at the current ratings. With the next
regulatory period set to begin in April 2020, YWS is under pressure
to reduce leverage given the introduction of the high leverage
sharing mechanism by the regulator Ofwat, and improve its
operational performance. This, in S&P's view, might incentivize
Kelda to increase its leverage to finance cash injections at YWS.
Capital injections were mentioned as a potential way to enhance
YWS's financial resilience and improve its future credit metrics in
the revised business plan that YWS submitted to the regulator in
April 2019. There is still a high level of uncertainty as to
whether YWS's business plan will be executed in its updated form.
Like other U.K. water companies that Ofwat has placed in the
"slow-track" category, the draft and final determinations for YWS
are scheduled for July 2019 and December 2019, respectively.

The negative outlook on Kelda also reflects execution risk
concerning the refinancing that Kelda needs to complete over the
next few months. S&P said, "In our experience, a holding company's
liquidity is paramount for continued debt service in case of an
interruption by the operating subsidiary. In our current base case,
we nonetheless factor in Kelda's sound relationship with its banks
and good business standing and its ability to achieve this
refinancing in due course."

Currently, YWS operates with relatively limited headroom above the
levels S&P deems commensurate with the issue ratings on its debt,
namely, weighted average S&P Global Ratings-adjusted funds from
operations (FFO) to total debt of 6% for the subordinated debt
(class B) and of 7% for the senior debt (class A). This takes into
account the updated business plan that YWS submitted to the
regulator in April 2019.

S&P said, "The affirmation of the issue ratings on YWS' debt
reflects our expectation that despite challenging conditions in the
new regulatory period, the operating group will maintain credit
metrics commensurate with the issue ratings.

"As it stands, we believe that the proposed high-leverage mechanism
as currently defined by Ofwat for companies with gearing above 70%
will likely apply to YWS over the next regulatory period AMP7,
running from April 2020 to March 2025. This is because its
debt-to-regulatory capital value (RCV) ratio is hovering around
76%, limiting the prospects for future deleveraging and a dividend
outflow without a cash injection from its parent."

On Kelda

The negative outlook on Kelda reflects the risk that leverage may
increase if Kelda issues additional debt to finance capital
injections. The outlook also reflects S&P's expectations for lower
dividends over the next regulatory period in view of challenging
conditions at the operating level. Finally, the negative outlook
reflects growing refinancing risk regarding the GBP200 million
bullet maturity in February 2020.

S&P said, "We could take a negative rating action if Kelda's
leverage increases, for example because the group issues debt to
finance a capital injection in the operating company. A negative
rating action could also occur if dividend distributions from YWS
to Kelda were to decline materially, leading to pressure on Kelda's
ability to meet its obligations.

"Additionally, we would downgrade Kelda if it failed to make
progress to refinance its GBP200 million bullet maturity in the
coming months.

"We could revise the outlook to stable once we get more clarity on
the future capital structure of the group, including any potential
capital injection, and when Kelda has completed the refinancing of
its GBP200 million bonds due in February 2020.

"Our view of the YWS group's underlying credit quality reflects our
expectation that its sole U.K. water operating subsidiary, YWS,
will generate stable cash flows from its regulated activities and
maintain adequate operating performance. We also expect the YWS
group to maintain weighted average adjusted FFO to total debt of at
least 6% and weighted average adjusted FFO to senior (class A) debt
of at least 7% for the next two years, which we deem commensurate
with the issue ratings.

"We could lower the issue ratings on YWS's debt if we see weaker
operating performance or reduced profitability causing credit
metrics to fall below our guideline of adjusted FFO to debt of 7%
based on the senior debt (class A) only, and of 6% based on the
senior and the subordinated debt (class B). This could happen, for
example, if the group does not achieve its planned operating and
capital expenditure efficiencies, or if it fails to meet its
regulatory targets.

"Due to the limited headroom in the credit ratios and the high
leverage allowed under the finance documents, we consider an
upgrade unlikely in the near term."


NORTHERN ROCK: Bad Bank Repays GBP48.7-Bil. Taxpayer Loan
---------------------------------------------------------
BBC News reports that the "bad bank" which runs loans granted by
Northern Rock and Bradford & Bingley before their financial crisis
bailouts has repaid its GBP48.7 billion taxpayer loan.

According to BBC, UK Asset Resolution had not expected to repay the
crisis-era loan until the mid-2020s but has been able to do so more
quickly by selling off packages of loans to private equity buyers.

UKAR has 35,000 customers, fewer than around 800,000 at the outset,
BBC states.

Northern Rock imploded when the credit crunch struck, as it was
then deprived of cash on the international money markets, which it
had used as a source of funds to lend to homeowners, BBC recounts.

B&B ran into problems through an over-focus on buy-to-let and
self-certification mortgages, as well as risky sub-prime
mortgage-related investments, BBC relates.

UKAR was set up -- with its GBP48.7 billion loan -- to look after
those mortgages that were nationalized when Northern Rock and B&B
ran into their financial difficulties in 2008, BBC notes.

It will now seek to find buyers for what is left of NRAM (which
holds the remaining loans from Northern Rock) and B&B, BBC
discloses.


PRECISE MORTGAGE 2019-1B: Fitch Rates Class X Notes 'BB+sf'
-----------------------------------------------------------
Fitch Ratings has assigned Precise Mortgage Funding 2019-1B Plc's
(PMF 2019-1B) notes final ratings as follows:

Class A1: 'AAAsf'; Outlook Stable

Class A2: 'AAAsf'; Outlook Stable

Class B: 'AAsf'; Outlook Stable

Class C: 'Asf'; Outlook Stable

Class D: 'BBB+sf'; Outlook Stable

Class E: 'BBB-sf'; Outlook Stable

Class X: 'BB+sf'; Outlook Stable

This transaction is a securitisation of buy-to-let (BTL) mortgages
that were originated by Charter Court Financial Services (CCFS),
trading as Precise Mortgages (Precise), in England and Wales.

KEY RATING DRIVERS

Prime Underwriting

Fitch has treated the loans as prime. The loans have been granted
to borrowers with no adverse credit, full rental income
verification, full property valuations and with a clear lending
policy in place. The available data, although limited, shows robust
performance, which would be expected of prime loans. Fitch has
applied a lender adjustment of 1.10x to account for a certain
feature in CCFS's underwriting process and its limited performance
history.

Geographical Diversification

The pool displays no geographical concentration (ie concentration
by loan count in excess of 2x population). However, compared with
Precise Mortgage Funding 2018-2B Plc (PMF 2018-2B) there is an
increased exposure to London (27.7% by current balance, versus
14.1%); this has resulted in a higher weighted average (WA)
sustainable price discount, contributing to higher WA sustainable
LTV (sLTV) and base foreclosure frequency (FF).

Borrower Affordability

The pool displays a higher concentration of five-year fixed rate
loans (56.8% versus 36.7%) and a lower stressed WA interest
coverage ratio (94.6% versus 105.4%) compared with PMF 2018-2B.
This has contributed to a higher base FF.

Fixed Hedging Schedule

The issuer entered into a swap at closing to mitigate the interest
rate risk arising from the fixed-rate mortgages in the pool versus
the SONIA linked bonds. The swap is based on a defined schedule,
rather than the balance of fixed-rate loans in the pool; in the
event that loans prepay or default, the issuer will be over hedged.
The excess hedging is beneficial to the issuer in a
high-interest-rate scenario and detrimental in a declining interest
rate scenario.

RATING SENSITIVITIES

Material increases in the frequency of defaults and loss severity
on defaulted receivables producing losses greater than Fitch's base
case expectations may result in negative rating action on the
notes. Fitch's analysis revealed that a 30% increase in the WAFF,
along with a 30% decrease in the WA recovery rate, would imply a
downgrade of the class A notes to 'AA-sf' from 'AAAsf'.

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

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

DATA ADEQUACY

Fitch reviewed the results of a third-party assessment conducted on
the asset portfolio information, and concluded that there were no
findings that affected the rating analysis.

Fitch conducted a review of a small targeted sample of CCFS's
origination files and found the information contained in the
reviewed files to be adequately consistent with the originator's
policies and practices and the other information provided to the
agency about the asset portfolio.

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




===============
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.



                           *********


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

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

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

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