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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

          Thursday, July 25, 2019, Vol. 20, No. 148

                           Headlines



A Z E R B A I J A N

AZERBAIJAN: Fitch Affirms BB+ LT IDR, Outlook Stable


C R O A T I A

ULJANIK: Court Sets Unfinished Dredger Price at HRK1.59 Bil.


F R A N C E

NOVARTEX SAS: Fitch Downgrades LT IDR to C; Removes from RWN
NOVARTEX SAS: Moody's Downgrades CFR to Ca; Alters Outlook to Neg.
NOVARTEX: S&P Lowers Bond Ratings to 'CC', On Watch Negative


G R E E C E

EKTASIS DEVELOPMENT: Put Into Administration by Athens Court


I C E L A N D

HOUSING FINANCING: S&P Alters Outlook to Negative, Affirms BB+ ICR


I R E L A N D

CLOVERIE PLC 2007-52: Fitch Keeps BB on US$10MM Notes on Watch Neg.
EUROPEAN RESIDENTIAL 2019-NPL1: Moody's Rates Class C Notes B3(sf)
HARVEST CLO X: Fitch Upgrades EUR12.4MM Class F Debt to B+sf
INVESCO EURO II: Moody's Assigns B2(sf) Rating to Class F Notes
SOUND POINT II: Moody's Puts (P)B3 Rating to EUR9MM Class F Notes



I T A L Y

BANCA IFIS: Fitch Affirms BB+ LT IDR, Outlook Stable
COOPERATIVA MURATORI: Moody's Withdraws Ca CFR due to Lack of Info


L U X E M B O U R G

ALTISOURCE SARL: Moody's Affirms B3 CFR; Alters Outlook to Stable


N E T H E R L A N D S

TIKEHAU CLO V: Moody's Rates EUR25.3MM Class E Notes (P)Ba3(sf)


R U S S I A

IPOTEKA-BANK: Fitch Assigns BB- LT IDR, Outlook Stable
ORENBURG REGION: Fitch Affirms BB+ LT IDRs, Outlook Stable


S W E D E N

INTRUM AB: Moody's Rates Proposed Sr. Unsec. Bonds (P)Ba2


T U R K E Y

ANADOLU ANONIM: Fitch Lowers IFS Rating to BB, Outlook Negative
ISTANBUL: Fitch Downgrades LT IDR to BB-, Outlook Negative
TURKCELL FINANSMAN: Fitch Downgrades LT IDR B+, Outlook Negative
TURKIYE IHRACAT: Fitch Downgrades IDR to B+, Outlook Negative
TURKIYE PETROL: Fitch Downgrades LT IDR to BB-, Outlook Negative



U K R A I N E

ODESSA CITY: Fitch Affirms B- LT IDRs, Outlook Stable


U N I T E D   K I N G D O M

CARLAUREN GROUP: Financial Difficulties Prompt Administration
SIRIUS MINERALS: Fitch Rates Proposed $500MM Bond Issue 'B(EXP)'
STAGECARRIAGE: Goes Into Administration, X8 Service Affected
WESTON ELECTRICAL: Enters Administration, 17 Jobs Affected
[*] UK: Number of Company Insolvencies Down in 2nd Quarter 2019


                           - - - - -


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A Z E R B A I J A N
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AZERBAIJAN: Fitch Affirms BB+ LT IDR, Outlook Stable
----------------------------------------------------
Fitch Ratings has affirmed Azerbaijan's Long-Term Foreign-Currency
Issuer Default Rating at 'BB+' with a Stable Outlook.

KEY RATING DRIVERS

Azerbaijan's 'BB+' ratings balance a strong external balance sheet
and low government debt, with a heavy dependence on hydrocarbons,
an underdeveloped, although improving policy framework, and a weak
banking sector and governance indicators.

Higher average oil prices supported further strengthening of the
fiscal position in 2018, with the government recording a
consolidated fiscal surplus of 5.6% of GDP in 2018 (including the
State Oil Fund of Azerbaijan, Sofaz), versus a 2.6% deficit for the
current 'BB' median. Fitch expects a surge in gas production from
the coming onstream of the Shah Deniz 2 gas field, and contained
expenditure growth will support sustained fiscal surpluses at a
forecast 3.7% of GDP in 2019 and 3.5% in 2020.

The revised 2019 budget includes a package of social measures,
including a rise in public sector wages, pensions and social
benefits and debt-reducing measures for households, financed by
re-allocation of spending from capital to social expenditure and
efficiency measures. The revised budget complies with the fiscal
rule adopted in 2018, which provides for caps on yearly
consolidated expenditure growth and oil revenue spending, and a
decline in non-oil deficit/non-oil GDP. The 2018 tax reform, which
aims at reducing the shadow economy and broadening the tax base,
could bolster employment and tax receipts in the medium term.

The policy framework has improved with the adoption of a fiscal
rule and medium-term debt management strategy. A track record of
compliance with the fiscal rules would help further increase
buffers and enhance predictability and credibility of the policy
framework. However, the vulnerability to shocks remains high, with
commodity dependence at 68% of current account receipts. The
stability of the exchange rate at AZN1.7/USD1 despite oil price
volatility raises questions about whether the authorities would
allow the currency to act as a shock absorber if there was a new
oil price collapse.

At 18.7% of GDP in 2018, Azerbaijan's gross general government
debt/GDP was less than half the current 'BB' median of 44% and
Fitch expects it to remain around 20% over 2019-2021, in line with
the government's medium-term debt management strategy. Fiscal
surpluses are recorded by Sofaz, which uses them to buy foreign
assets, while Fitch forcasts the central government will post a
deficit of 2.5% of GDP. Contingent liabilities are high, and
include domestic guarantees of 14.7% of GDP in 1Q19, most of which
relates to the state-owned bad bank, Aqrarkredit. External
guarantees account for 15.6% of GDP in 1Q19, a majority of which
stem from the Southern Gas Corridor-related projects. State-owned
enterprises' debt is high, with that of the state-oil company of
Azerbaijan (SOCAR) accounting for 17% of GDP at end-2018 (a small
part of which is included in external guarantees, with the
remainder unguaranteed).  

Azerbaijan's external balance sheet strengthened further in 2018,
with Sofaz assets reaching USD38.5 billion at end-2018 (USD40
billion at end-1Q19) as the fund recorded a 7.7% of GDP surplus.
Sovereign net foreign assets (SNFA) were equivalent to 73% of GDP,
versus a debtor position of 0.8% for the current 'BB' median. A
sustained balance of payments surplus will support further
accumulation of SNFA to 76.6%% of GDP in 2019.  

Higher oil prices and healthy non-oil sector exports, notably from
tourism, brought the current account surplus to 12.9% of GDP in
2018, compared with a deficit of 3.2% for the current 'BB' median.
Increased government ownership in the country's largest oil field
(ACG) following adoption of the new profit sharing agreement (PSA)
will lead to an improvement in the primary income account, while a
surge in gas production starting in 2019 will partly offset lower
forecast oil prices and support a current account surplus over 9%
of GDP in 2019-2020. Net foreign direct investment turned negative
in 2018, due to the completion of large energy projects and a
change in ownership in the new ACG PSA, leading to lower
reinvestments from foreign energy companies. Official reserves
stood at USD6.7 billion at end-2018 (3.6 months of current external
payments), still half the pre-crisis level.

Economic recovery is ongoing with growth reaching 1.4% in 2018,
compared with a five-year average of 0.3% and a 'BB' median of 3%.
Non-oil sector growth reached 1.8%, while the hydrocarbon sector
expanded by 0.7%, supported by a 5.6% rise in gas production. Fitch
expects growth to pick up in 2019 to 2.7% as gas production
ramps-up and the government social measures boost private
consumption. However, diversification remains limited, with the oil
sector accounting for 42% of GDP and 91% of good exports and 63% of
fiscal receipts.

Inflation remains close to the lower bound of the Central Bank of
Azerbaijan (CBAR) target band of 2%-4% at 2.4% in May 2019, from
2.3% at end-2018, due to a stable exchange rate and imported
disinflation. CBAR cut its refinancing rates four times by a
cumulative 125bp since the beginning of 2019. However, monetary
policy remains constrained by the high level of dollarisation and
shallow domestic capital market.

The banking sector remains weak, as reflected by a Fitch Banking
System Indicator (BSI) score of 'b', with a high ratio of
non-performing loans at 12.7% in May 2019 (14.5% at end-2018).
Dollarisation remains elevated at 59.6% of deposits and 35.0% of
loans, albeit declining due to prudential measures, favourable
rates on manat deposits and stable exchange rate. The restructuring
of the sector is progressing, and credit growth to the private
sector has recovered, reaching 14.9% in 2018. Capitalisation
increased to 24.3% in May 2019 (19.4% at end-2018), and measures to
reduce household debt burdens in the revised budget could further
improve asset quality and relieve some bank capital, although at a
very moderate pace. The net FX open position of the sector
accounted for USD1.1 billion (2.3% of GDP) at end-2018 (USD1
billion of which is borne by IBA) and could represent an additional
cost to the state.

GDP per capita and governance indicators are below peers.
Azerbaijan scores better than peers in the World Bank Ease of Doing
Business indicator, and has gained 32 places in the 2019 ranking to
25th out of 190 countries, from 57th in 2018, but the ability to
attract significant FDI in the non-oil sector to diversify the
economy remains uncertain. The long-standing conflict with Armenia
over Nagorno-Karabakh has the potential to escalate, although a
succession of meetings between the two countries' officials,
including one between the heads of state in Vienna in March 2019,
might bode well for the opening of negotiations.

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


Fitch's sovereign rating committee adjusted the output from the SRM
to arrive at the final LT FC IDR by applying its QO, relative to
rated peers, as follows:

  - External Finances: +1 notch, to reflect the size of Sofaz
assets, which underpin Azerbaijan's exceptionally strong foreign
currency liquidity position and the very large net external
creditor position of the country.

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

RATING SENSITIVITIES

The main factors that could, individually or collectively, trigger
positive rating action are:

  - A significant improvement in public and external balance
sheets.

  - Improvement in the macroeconomic policy framework,
strengthening the country's ability to address external shocks and
reducing macro volatility.

  - Separation of the economy from its dependence on the
hydrocarbon sector, for example due to an improvement in governance
and the business environment.

The main factors that could, individually or collectively, trigger
negative rating action are:

  - An oil price or other external shock that would have a
significant adverse effect on the economy, the public finances or
the external position.

  - Developments in the economic policy framework that undermine
macroeconomic stability.

  - Weakening growth performance and prospects.



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C R O A T I A
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ULJANIK: Court Sets Unfinished Dredger Price at HRK1.59 Bil.
------------------------------------------------------------
SeeNews reports that a Croatian court has set the value of an
unfinished self-propelled cutter suction dredger built by indebted
shipyard Uljanik for Luxembourg-based Jan De Nul Group at HRK1.59
billion (US$240.7 million/EUR215.2 million).

The Commercial Court in Pazin has also set the terms of the ship's
planned sale, which will be carried out by the country's financial
agency FINA via an online auction, SeeNews relays, citing the
court's decision filed by Uljanik to the Zagreb Stock Exchange.

State-run news agency Hina reported on July 23 that an invitation
for the first auction could be announced already by the end of
July, with the sales process expected to be completed by late
September, SeeNews discloses.

Until then, it might become clearer whether the Croatian government
will be able to redeem all or part of the HRK900 million state
guarantee it paid out to Jan De Nul earlier this year, after
Uljanik failed to deliver on its shipbuilding contract with the
company, SeeNews notes.

Croatian finance minister Zdravko Maric said in May the government
had that far paid HRK4.42 billion worth of activated state
guarantees provided to Uljanik shipyard, including the HRK900
million guarantee extended for the construction of the ship for Jan
De Nul, SeeNews states.  He added the government had yet to pay a
further HRK120 million of state guarantees issued to the ailing
shipyard, according to SeeNews.

In May, the Pazin court launched bankruptcy proceedings against
Uljanik over the shipyard's overdue debts, SeeNews recounts.




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F R A N C E
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NOVARTEX SAS: Fitch Downgrades LT IDR to C; Removes from RWN
------------------------------------------------------------
Fitch Ratings has downgraded Novartex SAS's Long-Term Issuer
Default Rating to 'C' from 'CCC-' and removed it from Rating Watch
Negative. It has also downgraded the company's senior secured 'New
Money' debt rating to 'C'/'RR5' from 'CCC-'/'RR4' and removed it
from RWN.

The downgrade of the IDR follows the announcement by Vivarte that
it will not repay the EUR97 million due in October 2019 under the
New Money agreement, following its decision to abandon the disposal
process of one of its main brands, and a breach of the Fiducie (a
French transactional mechanism to hold in trust specific assets for
certain beneficiaries such as creditors and permitting them to
swiftly take control over the assets) leverage covenant. The
company has approached its shareholders and bondholders to activate
the Fiducie to allow the New Money bond to be converted into
equity, which under Fitch's methodology would constitute a
Distressed Debt Exchange (DDE).

If the restructuring plan is approved, upon completion of the DDE
Fitch will downgrade the IDR to 'RD' (Restricted Default).

KEY RATING DRIVERS

Key Disposals Abandoned: Vivarte has declined the offers received
for the shoe brand Minelli, and subsequently abandoned the disposal
process. The expected consideration was critical to the EUR97
million debt repayment due in October 2019. As a result Vivarte
would not be able to repay the amount due in October 2019 solely
from the on-balance-sheet cash without undermining its operating
liquidity and severely constraining its ability to make much needed
investments into the development of its core brands. Consequently
it has decided to not meet its October payment obligation and
declared its intention to activate the Fiducie agreement.

Debt-to-Equity Conversion Likely: The proposed activation of the
Fiducie mechanism would result in the New Money bond being fully
converted into equity. Such a move is consistent with a 'C' IDR.

Covenant Breaches, Events of Default Looming: The company has
breached its New Money and Fiducie leverage covenant as of May
2019, the latter potentially triggering an event of default if not
cured by August 5. Vivarte suffered from adverse trading conditions
during April and May as it launched its spring/summer collection,
resulting in a sharp decline in EBITDA. Although Vivarte partly
bridged its profitability gap during June, EBITDA is still behind
previous year, and Fitch forcasts EBITDA for financial year to
August 2019 at around EUR45 million, 13% below FY18's. Fitch
expects the New Money leverage covenant to be breached again in
August 2019, which would constitute an event of default under the
New Money debt restructuring agreement.

Below-average Recovery Expectations: Fitch estimates recoveries of
the New Money debt as being below- average in 'RR5', against its
prior estimates in 'RR4', due to growing uncertainties around the
success of the turnaround plan. Fitch still regards selling Vivarte
as a going concern would offer somewhat higher recovery prospects
to bondholders as opposed to balance-sheet liquidation. Its
assumptions are mainly supported by the residual value embedded in
La Halle, Caroll and Minelli brands despite uncertain recovery
prospects for the underperforming La Halle banner in a challenging
French retail environment.

Success of Turnaround Uncertain: Management has announced a
strategy focused on transforming the core brands by making
investments in store openings and remodeling, logistics
optimisation and IT system upgrades. Fitch has some doubts
regarding management's ability to consistently generate positive
like-for-like sales growth in a difficult market that is
experiencing a deep restructuring with an uncertain outcome. The
re-positioning of brands can be challenging in attracting new
customers without alienating the existing customer base. While
certain critical durable cost- and cash-savings have been achieved,
weak revenue performance and near-breakeven profitability remain
challenges, undermining the company's ability to rejuvenate the
brands through adequate capex.

Challenging Retail Environment: The French women's clothing market
is highly fragmented, competition remains fierce and 'bricks and
mortar' groups such as Vivarte are finding it difficult to increase
prices above inflation, as discounting has been rife, and to
maintain volumes. Further to challenges from store-based groups
such as H&M and Zara, Vivarte is also facing pure online retailers
and discount brands such as Primark, which are much more aggressive
in pricing, have lower costs and more flexibility with deliveries
and challenge traditional fast-fashion retailers. Recent signs of
improving consumer confidence remain fragile against a weak
macro-economic growth outlook in France, which will continue to
impact consumers' behaviour in the near-term.

DERIVATION SUMMARY

Vivarte has a lower EBITDAR margin (17% in FY18) than most non-food
retailers, due to its uncompetitive position in the fast-changing
mass market clothing market. Its traditional store-based business
model, a large debt burden and significant capex needs, combined
with heavy restructuring costs, also weaken its free cash flow
(FCF) compared with asset-light competitors. As with other non-IG
clothing groups (such as New Look Bond Limited (CCC+)), leverage is
high (on a FFO lease-adjusted net leverage basis) and liquidity
tight (unfunded for Vivarte) with little flexibility due to nearly
fully drawn debt and letter of credit facilities.


KEY ASSUMPTIONS

  - Materialisation of the DDE

  - Decreasing like-for-like sales over the next four years

  - Disposal of San Marina and Cosmoparis by December 2019

  - EBITDA margin to be around 4.0%-4.5% from FY20E onwards

  - EUR30 million of capex in FY19, EUR50 million in FY20 and
around EUR30 million per year thereafter

  - Restricted cash of EUR100 million to take into account seasonal
working capital requirements and cash collateral needs of lenders

Key Recovery Assumptions

  - Vivarte would be considered a going concern in bankruptcy and
Fitch assumes that it would be reorganised rather than liquidated.
Fitch has assumed a 10% administrative claim in the recovery
analysis.

  - Fitch applied a premium to EBITDA of 5%, leading to a
post-restructuring EBITDA of EUR44 million, lower than the
previously estimated EUR51 million. This reflects growing
uncertainties around the success of the turnaround plan.

  - Fitch applied a distressed multiple at 4.0x in light of the
weakened business model. The distressed multiple is at the low end
of the sector due to the likely loss of attractiveness among
potential buyers following several previous failed restructurings
in an adverse market environment.

  - Fitch has assumed drawn existing commitments, including drawn
letters of credit, ranking ahead of the New Money debt in the
payment waterfall.

  -These assumptions result in a recovery rate for senior secured
creditors of 'RR5', representing below- average recovery prospects
in the event of default. The waterfall analysis output percentage
on current metrics and assumptions is 26%.

RATING SENSITIVITIES

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

  - Equity injection from shareholders to cure the covenant breach
and to avoid a payment default in October 2019

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

  - Execution of the DDE following approval by at least 50% of
bondholders

  - Failure to receive 50% approval for an activation of the
Fiducie, leading to a payment default

LIQUIDITY AND DEBT STRUCTURE

Unfunded Liquidity: Fitch estimates that Vivarte currently has
around EUR80 million-EUR90 million in readily available cash,
excluding around EUR100 million of restricted cash applicable and
excluding letters of credit cash collateral as defined under the
New Money bond (EUR27 million outstanding as of June 2019).

The company has a EUR97 million debt repayment due in October 2019,
which coincides with season-related high cash consumption. With the
terminated disposal of the Minelli brand and weak spring
performance, debt repayment from own cash would fully exhaust
Vivarte's liquidity reserves. Consequently, Vivarte has decided to
not make the debt repayment.

NOVARTEX SAS: Moody's Downgrades CFR to Ca; Alters Outlook to Neg.
------------------------------------------------------------------
Moody's Investors Service downgraded the corporate family rating of
Novartex S.A.S., a holding company and ultimate owner of French
apparel retailer Vivarte, to Ca from Caa3, and its probability of
default rating to Ca-PD from Caa3-PD. At the same time, Moody's has
downgraded Vivarte's senior secured notes to C from Caa3. The
outlook was changed to negative from stable.

"The rating action was prompted by Vivarte's decision to stop the
disposal process for Minelli, which was necessary to repay an
upcoming debt maturity in October 2019, and to approach its
shareholders and lenders in order to activate its Fiducie contract"
said Guillaume Leglise, Assistant Vice President and Senior Analyst
at Moody's. "An enforcement of the Fiducie contract now appear
highly likely and will result in an equitisation of the debt for
Vivarte", adds Mr Leglise.

RATINGS RATIONALE

The rating action was prompted by the company's decision to put the
disposal of Minelli on hold, because of lack of attractive bid
offers. The disposal of Minelli was considered necessary to repay
an upcoming debt maturity of around EUR100 million in October 2019.
Moody's believes that without the sale of Minelli in the next few
months, Vivarte will likely fail to address in a timely manner the
upcoming debt maturity in October 2019. While the company has
currently a cash balance of around EUR200 million, a repayment of
the October debt maturity will likely trigger a breach of the
minimum liquidity covenant.

The downgrade also reflects Vivarte's weak trading performance in
the last three quarters. Market conditions in the French apparel
retail segment have been very challenging recently, with some
disruptions yellow jackets protests during November-January and
adverse weather conditions during April-May, which both had
significant effects on footfall and sales. In the 10 months to June
2019, Vivarte's EBITDA declined to EUR48.8 million, compared to
EUR57.6 million during the same period last year, and well below
expectations.

Moody's believes that this underperformance will soon lead to a
breach of the net leverage financial covenant under the Fiducie
contract. Without any cure from Novartex's shareholders in the next
few weeks, the resultant of the financial covenant breach will
hence trigger an activation of the company's Fiducie contract. The
enforcement of the Fiducie will result in the equitisation of the
company's new money debt. As part of this process, current
shareholders will be pushed away and lenders will take the control
of the share capital of the company. The activation of the Fiducie
contract would be considered as a default by Moody's, because of
the equitisation of the debt.

The downgrade of the CFR to Ca from Caa3 reflects (1) the elevated
probability that the company will default on its debt in the
short-term as the Fiducie enforcement will result in a debt
write-off, and (2) the high projected loss given default owing to
the likely full equitisation of the debt of the company.

The downgrade of the Probability of Default rating to Ca-PD from
Caa3-PD reflects the high probability of default arising from the
likely Fiducie activation.

The downgrade of the new money bond rating to C from Caa3 reflects
Moody's expectations of very low recovery rate for creditors.

RATIONALE FOR THE NEGATIVE OUTLOOK

The negative outlook reflects the likely default arising from the
enforcement of the Fiducie contract which creates downside risk for
the recovery prospects for creditors. The negative outlook also
reflects Moody's view that Vivarte's sales and profit margins will
remain under pressure, resulting in limited recovery in
profitability.

WHAT COULD CHANGE THE RATING UP/DOWN

Downward pressure on the ratings could result from Moody's
expectations that the Fiducie will be enforced and result in debt
write-off for Vivarte's lenders.

Upward pressure on the rating is unlikely in the short term given
the action. However Moody's would consider an upgrade of the
ratings if the company manages to complete a restructuring, which
would lead to a sustainable capital structure with a reduced debt
burden and an improved liquidity profile. Positive rating pressure
would also require signs of a gradual recovery in net sales growth
and improving profitability and cash flow generation.

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Retail Industry
published in May 2018.

COMPANY PROFILE

Novartex is the holding company of Vivarte, a leading France-based
footwear and apparel retailer focusing on city centre boutiques and
out-of-town stores through its remaining 5 banners (including La
Halle, Caroll, Minelli, San Marina, and Cosmoparis) and
approximately 2,000 stores. In FY 2018 (ended August 31, 2018), the
company generated revenues of EUR1.4 billion and statutory EBITDA
of EUR50 million.

NOVARTEX: S&P Lowers Bond Ratings to 'CC', On Watch Negative
------------------------------------------------------------
S&P Global Ratings lowered to 'CC' from 'CCC' its ratings on
Novartex and on Vivarte Group's bonds due in October 2019 and
placing them on CreditWatch negative.

S&P downgraded Vivarte because it has announced that it has
breached its covenant tests for May 2019 and, more importantly,
expects it might be unable to repay the remaining EUR100 million of
its EUR300 million bond due in October 2019. The breach follows the
group's poor trading performance in April and May 2019 and, more
generally, weak prospects for fiscal year ending Aug. 31, 2019,
affected by the "yellow vest protest" in France. S&P currently
estimates Vivarte's year-end 2019 EBITDA at about EUR40 million,
which is materially below our January 2019 forecast. Although the
breach has had no operational consequences so far, it has prompted
the group to launch restructuring talks with its shareholders and
lenders.

As of May 31, 2019, Vivarte had redeemed EUR186 million of the
EUR300 million debt due in October 2019, using the proceeds of
various asset disposals. However, given the group's new money and
fiduciary covenants, notably an obligation to maintain more than
EUR100 million of cash on the balance sheet, it has announced that
it won't be in a position to repay the outstanding debt in full
while complying with this cash requirement. This follows the
company's unwillingness to accept offers for Minelli, a shoe
retailer, because it considered them too low. The proceeds from the
expected sale of Minelli were the primary source of cash to repay
the EUR100 million due in October.

Some of Vivarte's lenders are also shareholders, but not in
comparable proportions. Consequently, the interests of the
bondholders and shareholders may not be perfectly aligned,
rendering the outcome of the negotiations uncertain. Among the
likely scenarios to emerge is the implementation of a fiduciary
process in the bond's documentation, whereby the group's
outstanding debt would be converted into equity, assuming the
breach is not cured by Aug. 5, 2019. In our view, the likelihood of
an equity cure is fairly remote and, even if it were to occur, the
company will still lack sufficient funds to make the October 2019
debt payment in full, unless its lenders waive the EUR100 million
minimum cash requirement.

In S&P's view, given the company's public announcement and,
regardless of the outcome of the negotiation, it seems certain that
the money bondholders will eventually receive less value than the
original securities promised, which is tantamount to a default
under its criteria.

Despite the group's measures to improve cash flow generation, cash
on the balance sheet totaled EUR153 million as of May 31, 2019,
EUR40 million more than last year in more difficult trading
conditions. However, this amount is too low to meet both the cash
requirement due under the debt documentation and the EUR100 million
debt repayment due in October 2019. Also, even if the covenant
requirement were waived and the EUR100 million repaid, this would
leave Vivarte with very tight liquidity, given its still material
intrayear working capital needs and the likely risk of trade
creditors requiring shorter payment terms.

S&P said, "The negative CreditWatch indicates that we may lower the
ratings on Novartex and Vivarte's debt to 'SD' (selective default)
or 'D' (default), if the group fails to repay the EUR100 million
debt instalment due in October or engages in a debt restructuring.

"We continue to view Vivarte's liquidity position as weak. Vivarte
still relies on the approval of its bondholders and board to avoid
a liquidity crisis in October 2019. Moreover its poor trading
performance and tight liquidity situation could affect its
relationships with trade creditors, due to reduced cash outflows.
We note that Vivarte reported EUR153 million of cash on the balance
sheet as of May 31, 2019, but only a modest portion is available
because of the EUR100 million cash covenant requirement."



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G R E E C E
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EKTASIS DEVELOPMENT: Put Into Administration by Athens Court
------------------------------------------------------------
Ekathimerini.com reports that property development and utilization
company Ektasis Development has been put into administration by an
Athens court, but the company will continue its legal battle
through all means available to avert such a situation.

According to Ekathimerini.com, sources say the court's decision was
based on the failure of the Ektasis defense to make its main
statement, tipping the balance in favor of the crediting banks,
even though the company claims it paid EUR272 million from 2009 to
2017 to pay off debts and other obligations.

Today, Ektasis has just over 30 properties, most of them plots of
land, with an estimated combined value of EUR110 million, and
collects rents of EUR4 million per year, Ekathimerini.com
discloses.



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HOUSING FINANCING: S&P Alters Outlook to Negative, Affirms BB+ ICR
------------------------------------------------------------------
S&P Global Ratings said that it revised to negative from stable its
outlooks on four Iceland-based banks: Arion Bank, Islandsbanki hf,
Landsbankinn hf., and Housing Financing Fund Ibudalanasjodur (HFF).
At the same time, S&P affirmed the 'BBB+/A-2' long- and short-term
issuer credit ratings on Arion Bank, Islandsbanki, and
Landsbankinn, and the 'BB+/B' ratings on HFF.

S&P said, "The rating actions reflect that we now see a negative
trend for the banks' operating environment over our 24-month
horizon. The banks face an economic recession in 2019, declining
interest rates, still-high taxation, and stiff competition from
pension fund lending in an industry that is concentrated, given the
size of the economy and bankable population. The declining
profitability of many banks illustrates these challenges. While the
part of this is attributable to the additional cost of the ongoing
investments aimed at increasing efficiency, we expect banks'
profitability levels to remain structurally low at least over the
next two years, with return on equity (ROE) in the low- to
mid-single digits. In our view, the ongoing capital optimization
will only marginally improve banks' nominal ROE as they will
continue issuing relatively expensive hybrid instruments to meet
their capital targets.

"Moreover, we believe that risks could arise also from growth in
the retail mortgage lending of the pension funds. In our view,
pension funds' growing presence is distorting the competitive
landscape for mortgages, as pension funds are putting pressure on
pricing, and arguably banks' lending underwriting, in the
medium-to-long term. Pension funds enjoy lower regulatory
requirements than banks and represented about half of newly granted
mortgage loans (net) in 2018. This increased their total share in
the outstanding stock household mortgages to 26% in 2018 from 13%
three years ago. As of today, we have seen only moderate attempts
from regulators to address the potential negative effects on banks
of this distortion.

"The recent government decision to merge the market authority (FME)
and the central bank (CBI) should benefit and streamline
macro-prudential policy and financial supervision, in our view. At
the same time, we would expect this move to strengthen the ability
of the regulator to issue binding rules to support supervision of
the entire financial sector and allocate appropriate resources to
tackle increasingly demanding tasks, such as financial crime and
cyber risk."

Although Icelandic banks have regained full access to foreign debt
capital markets in the last two years and, in turn, diversified
their funding mix, foreign investor confidence remains untested in
a more turbulent economic environment. S&P calculates that the net
external debt of the banking sector, as a percentage of domestic
loans, increased to around 7.5% in 2018 from -2% in 2015. This
requires continued efforts to keep foreign currency liquidity and
funding ratios comfortable and strengthen the deposit base. The
domestic debt capital market is inherently limited and highly
concentrated by type of debt and investor, given the dominant
presence of local pension funds.

S&P said, "We have not changed our view of the overall economic
risks faced by Icelandic banks, and the trend for economic risk in
Iceland remains stable. We expect the banks to maintain a
relatively solid foothold as Iceland enters an economic recession,
with GDP set to decline by 1.5% this year under our forecasts
before returning to 2% growth in 2020-2021. The banks are more
resilient having absorbed the shocks created by the 2008 financial
crisis, with low nonperforming assets, stabilizing private sector
debt, and the successful release of capital controls. Since 2017,
growth in housing prices has cooled, following the slowdown in
tourism and an increasing housing supply, which eased the risk of
overheating. However, we consider that the banking sector might
face incremental credit risks related to commercial real estate and
tourism-related activities exposures, which we will closely
monitor.

"At present, a negative change in our assessment of industry risk
would be sufficient for us to revise down the 'bbb' anchor we apply
to financial institutions operating primarily in Iceland, which
underpins our negative outlooks on Icelandic banks."

The affirmation of the banks' ratings reflects that the three
commercial banks--Arion Bank, Islandsbanki, and Landsbankinn--share
a solid market position in Iceland, with relatively advanced
digitalized banking platforms, while their exceptional
capitalization is partially balanced by its geographic and loan
book concentrations. S&P said, "We also expect their asset quality
indicators to stabilize after a prolonged balance sheet clean-up
since inception and as a result of the economic slowdown. Moreover,
the banks have similar funding and liquidity profiles, with
liquidity buffers reducing from high levels as they extend their
funding and optimize capital. We consider the banks' funding and
liquidity positions to be in line with those of their international
peers. We believe that the Icelandic banks materially improved
their IT infrastructure and as well their ability to execute and
process many fully digital products. We see the three banks as
being well ahead of many other European banks in their preparation
for technological disruption; however, they remain concentrated on
a small market."

S&P said, "The revision of our outlook on HFF to negative from
stable reflects mainly our view that the bank's legal structure,
business set-up, and asset composition might lead to a weaker
overall composition. We base this view on the government's
intention to materially restructure HFF. We believe the
contemplated change will not strengthen HFF's public policy role
and its link to the government."

The government recently submitted a bill to the parliament to split
HFF and create a new government agency, which will receive HFF's
social loans portfolio (about 20% of total assets) in exchange for
newly issued debt instruments. The HFF fund will maintain the
ownership of the rest of the balance sheet in run-off and it will
not grant new loans. The HFF fund will then be ultimately managed
by the Ministry of Finance. The rating implications of the planned
restructuring, expected to be approved by the Parliament by
end-2019, are varied and might also incorporate considerations of
HFF's potential legal status and changes to reporting requirements.
Moreover, although the asset quality of the run-off portfolio might
improve as result of a shrinking loan book and exclusion of social
lending, the evolution of the capitalization and earnings of HFF
under the new structure remains highly uncertain.

OUTLOOKS

Landsbankinn

S&P said, "The negative outlook reflects the possibility that we
could lower the ratings on Landsbankinn over the next 24 months if
the operating environment in Iceland becomes even more difficult,
leading to banks having weaker business and profitability prospects
than peers on a sustained basis.

"At the same time, we acknowledge that Landsbankinn shows higher
market shares, better efficiency and return metrics than domestic
peers. During the next two years, we anticipate that the bank's
risk-adjusted capital (RAC) ratio will remain above 15%, despite
sustained dividend payments (ordinary or extraordinary) and other
capital optimization initiatives. We also factor into our base case
that Landsbankinn would not meaningfully change its strategy and
underwriting standards if the bank were to be partially privatized
in the next 18-24 months.

"We could revise the outlook to stable should the competitive
environment become more benign, leading to improved earnings
prospects for banks. If this scenario does not materialize, to
warrant a stable outlook we would expect to see Landsbankinn
improving its returns, efficiency, and asset quality above domestic
peers, with no further widening of the gap it has with foreign
peers."

Arion

S&P said, "The negative outlook reflects the possibility that we
could lower the ratings on Arion over the next 24 months if the
operating environment in Iceland becomes even more difficult,
leading to banks having weaker business and profitability prospects
than peers on a sustained basis.

"During the next two years, we anticipate that the bank's RAC ratio
will remain above 15%, despite sustained dividend payments
(ordinary or extraordinary) and other capital optimization
initiatives. We also factor into our base case that Arion will not
meaningfully change its strategy and underwriting standards over
our outlook horizon. Moreover, we expect the sale of its subsidiary
Valitor to be executed as planned and without a meaningful negative
impact for the bank's financials, in particular its
capitalization.

"We could revise the outlook to stable should the competitive
environment become more benign, leading to improved earnings
prospects for banks. If this scenario does not materialize, to
warrant a stable outlook we would expect to see Arion improving its
returns, efficiency, and asset quality above domestic peers, with
no further widening of the gap it has with foreign peers."

Islandsbanki

S&P said, "The negative outlook reflects the possibility that we
could lower the ratings on Islandsbanki over the next 24 months if
the operating environment in Iceland becomes even more difficult,
leading to banks having weaker business and profitability prospects
than peers on a sustained basis.

"During the next two years, we anticipate that the bank's RAC ratio
will remain above 15%, despite sustained dividend payments
(ordinary or extraordinary) and other capital optimization
initiatives. We also factor into our base case that Islandsbanki
Bank will not meaningfully change its strategy and underwriting
standards over our outlook horizon. Moreover, we expect the sale of
the subsidiary Borgun to not have a meaningful negative impact on
the bank's financials.

"We could revise the outlook to stable if economic and operating
conditions in Iceland improved and, at the same time, the bank's
financial profile did not deteriorate.

"We could also revise the outlook to stable should the competitive
environment become more benign, leading to improved earnings
prospects for banks. If this scenario does not materialize, to
warrant a stable outlook we would expect to see Islandsbanki
improving its returns, efficiency, and asset quality above domestic
peers, with no further widening of the gap it has with foreign
peers."

HFF

S&P said, "The negative outlook primarily reflects the possibility
that we could lower the ratings on HFF in the next 12 months if we
expect the announced changes in HFF's scope and structure to
undermine its profitability further and lead us to materially
change our RAC projections. This could also happen if we believe
that the status of the institution and its business setup, based on
the planned structural changes, would negatively affect HFF's
relative creditworthiness.

"We could also downgrade the bank if operating environment in
Iceland became more difficult than we currently forecast and we
consider that this will not be compensated for by a stronger
financial profile or greater degree of government support.

"We could revise the outlook to stable if we view the proposed
changes as neutral for the financial profile of the rated entity,
while the operating conditions in Iceland improve and the
government commitment to HFF remains unchanged or improves."

  RATINGS LIST

  Ratings Affirmed; Outlook Action  
                         To               From
  Arion Bank
   Issuer Credit Rating BBB+/Negative/A-2 BBB+/Stable/A-2
  
  Housing Financing Fund Ibudalanasjodur
   Issuer Credit Rating BB+/Negative/B BB+/Stable/B

  Islandsbanki hf
   Issuer Credit Rating BBB+/Negative/A-2 BBB+/Stable/A-2

  Landsbankinn hf.
   Issuer Credit Rating BBB+/Negative/A-2 BBB+/Stable/A-2

  Ratings Affirmed  

  Arion Bank
   Senior Unsecured BBB+
   Subordinated    BBB-

  Housing Financing Fund Ibudalanasjodur
   Senior Unsecured BB+

  Islandsbanki hf
   Senior Unsecured BBB+
   Subordinated    BBB-

  Landsbankinn hf.
   Senior Unsecured BBB+




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CLOVERIE PLC 2007-52: Fitch Keeps BB on US$10MM Notes on Watch Neg.
-------------------------------------------------------------------
Fitch Ratings maintains the Cloverie PLC 2007-52 USD10,000,000
credit-linked notes (CLNs) rated 'BBsf' on Rating Watch Negative.

The Rating Watch on the CLNs reflects the assessment of the
transaction's main risk driver, Vale S.A., which is the
lowest-rated risk-presenting entity. The Rating Watch Negative on
Vale may not be resolved during the next six months, precluding
resolution of the Rating Watch Negative on the CLNs.

KEY RATING DRIVERS

The rating considers the credit quality of Citigroup Inc.,
(A/Stable), as the swap counterparty and issuer of the qualified
investment. The rating also considers the Issuer Default Rating
(IDR) of the reference entity, Vale, which is subject to
restructuring as a credit event. Therefore, based on the CLN
"Single-and Multi-Name Credit-Linked Notes Rating Criteria," dated
April 24, 2019, Fitch has applied a one-notch downward adjustment
to Vale's rating to 'BB+'/Rating Watch Negative from 'BBB-'/Rating
Watch Negative, prior to applying the "two-risk matrix." The Rating
Watch reflects the outlook on the main risk driver, Vale, which is
the lowest-rated risk-presenting entity.

RATING SENSITIVITIES

The CLN remains sensitive to the ratings migration of the
underlying risk-presenting entities. A downgrade of the weakest
link would result in a downgrade to the CLNs according to Fitch's
CLN criteria.


EUROPEAN RESIDENTIAL 2019-NPL1: Moody's Rates Class C Notes B3(sf)
------------------------------------------------------------------
Moody's Investors Service assigned definitive credit ratings to the
following Notes issued by European Residential Loan Securitisation
2019-NPL1 DAC:

EUR201,737,000 Class A Residential Mortgage Backed Floating Rate
Notes due August 2056, Definitive Rating Assigned A3 (sf)

EUR34,193,000 Class B Residential Mortgage Backed Floating Rate
Notes due August 2056, Definitive Rating Assigned Baa3 (sf)

EUR29,634,000 Class C Residential Mortgage Backed Floating Rate
Notes due August 2056, Definitive Rating Assigned B3 (sf)

Moody's has not assigned ratings to the EUR38,752,000 Class P
Residential Mortgage Backed Notes due August 2056 and the
EUR151,587,000 Class D Residential Mortgage Backed Floating Rate
Notes due August 2056.

This transaction represents the fifth securitisation transaction
that Moody's rates in Ireland that is backed by non-performing
loans ("NPL"). The assets supporting the Notes are NPLs extended
primarily to borrowers in Ireland. Around half of the assets within
this transaction were previously securitized within European
Residential Loan Securitisation 2017-NPL1 DAC.

The portfolio is serviced by Start Mortgages DAC (NR). The
servicing activities performed by Start are monitored by the issuer
administration consultant, Hudson Advisors Ireland DAC (NR). Hudson
has also been appointed as back-up servicer facilitator to assist
the issuer in finding a substitute servicer in case the servicing
agreement with Start is terminated.

RATINGS RATIONALE

Moody's ratings reflect an analysis of the characteristics of the
underlying pool of NPLs, sector-wide and servicer-specific
performance data, protection provided by credit enhancement, the
roles of external counterparties, and the structural integrity of
the transaction.

In order to estimate the cash flows generated by the NPLs, Moody's
used a Monte Carlo based simulation that generates for each
property backing a loan an estimate of the property value at the
sale date based on the timing of collections.

The key drivers for the estimates of the collections and their
timing are: (i) the historical data received from the servicer;
(ii) the timings of collections for the secured loans based on the
legal stage a loan is located at; (iii) the current and projected
house values at the time of default; and (iv) the servicer's
strategies and capabilities in maximising the recoveries on the
loans and in foreclosing on properties.

Hedging: As the collections from the pool are not directly
connected to a floating interest rate, a higher index payable on
the Notes would not be offset with higher collections from the
NPLs. The transaction therefore benefits from an interest rate cap,
linked to one-month EURIBOR, with Barclays Bank PLC
(A2(cr)/P-1(cr)) as cap counterparty. The notional of the interest
rate cap is equal to the closing balance of the Class A, B and C
Notes. The cap expires four years from closing.

Coupon cap: The transaction structure features coupon caps that
apply when four years have elapsed since closing. The coupon caps
limit the interest payable on the Notes in the event interest rates
rise and only apply following the expiration of the interest rate
cap.

The transaction benefits from an amortising Class A Reserve Fund
equal to 6.5% of the Class A Notes outstanding balance. The Class A
Reserve Fund can be used to cover senior fees and interest payments
on Class A Notes. The amounts released from the Class A Reserve
Fund form part of the available funds in the subsequent interest
payment date and thus will be used to pay the servicer fees and/or
to amortise Class A Notes. The Class A Reserve Fund would be
sufficient to cover around 31 months of interest on the Class A
Notes and more senior items, at the strike price of the cap.

Class B Notes benefits from a dedicated Class B interest Reserve
Fund equal to 6.5% of Class B Notes balance at closing which can
only be used to pay interest on Class B Notes while Class A Notes
is outstanding. The Class B interest Reserve Fund is sufficient to
cover around 27 months of interest on Class B Notes, assuming
EURIBOR at the strike price of the cap. Unpaid interest on Class B
Notes is deferrable with interest accruing on the deferred amounts
at the rate of interest applicable to the respective Note.

Class C Notes benefits from a dedicated Class C interest Reserve
Fund equal to 10.0% of Class C Notes balance at closing which can
only be used to pay interest on Class C Notes while Class A and B
Notes are outstanding. The Class C interest Reserve Fund is
sufficient to cover around 30 months of interest on Class C Notes,
assuming EURIBOR at the strike price of the cap. Unpaid interest on
Class C Notes is deferrable with interest accruing on the deferred
amounts at the rate of interest applicable to the respective Note.
Moody's notes that the liquidity provided in this transaction for
the respective Class B and C Notes is lower than the liquidity
provided in comparable transactions within the market.

Servicing disruption risk: Hudson is the back-up servicer
facilitator in the transaction. The back-up servicer facilitator
will help the issuer to find a substitute servicer in case the
servicing agreement with Start is terminated. Moody's expects the
Class A Reserve Fund to be used up to pay interest on Class A Notes
in absence of sufficient regular cashflows generated by the
portfolio early on in the life of the transaction. It is therefore
likely that there will not be sufficient liquidity available to
make payments on the Class A Notes in the event of servicer
disruption. The insufficiency of liquidity in conjunction with the
lack of a back-up servicer mean that continuity of Note payments is
not ensured in case of servicer disruption. This risk is
commensurate with the single-A rating assigned to the most senior
Note.

The principal methodology used in these ratings was "Moody's
Approach to Rating Securitizations Backed by Non-Performing and
Re-Performing Loans" published in February 2019.

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

Factors that may lead to an upgrade of the ratings include that the
recovery process of the NPLs produces significantly higher cash
flows realised in a shorter time frame than expected.

Factors that may cause a downgrade of the ratings include
significantly less or slower cash flows generated from the recovery
process on the NPLs compared with its expectations at close due to
either a longer time for the courts to process the foreclosures and
bankruptcies, a change in economic conditions from its central
scenario forecast or idiosyncratic performance factors.

For instance, should economic conditions be worse than forecasted,
falling property prices could result, upon the sale of the
properties, in less cash flows for the Issuer or it could take a
longer time to sell the properties. Therefore, the higher defaults
and loss severities resulting from a greater unemployment,
worsening household affordability and a weaker housing market could
result in downgrade of the ratings. Additionally counterparty risk
could cause a downgrade of the ratings due to a weakening of the
credit profile of transaction counterparties. Finally, unforeseen
regulatory changes or significant changes in the legal environment
may also result in changes of the ratings.

HARVEST CLO X: Fitch Upgrades EUR12.4MM Class F Debt to B+sf
------------------------------------------------------------
Fitch Ratings has upgraded Harvest CLO X DAC's class C, D, E and F
notes and affirmed the rest. The transaction is a cash-flow
collateralised loan obligation back by a portfolio of mainly
European leveraged loans and bonds.

The rating actions are as follows:

Class A-R EUR230.3 million: affirmed at 'AAAsf'; Outlook Stable

Class B-R EUR56.3 million: affirmed at 'AA+sf; Outlook Stable

Class C-R EUR30.4 million: upgraded to 'A+f' from 'Asf'; Outlook
Stable

Class D-R EUR23.6 million: upgraded to 'BBB+sf' from 'BBBsf';
Outlook Stable

Class E EUR29.2 million: upgraded to 'BB+sf' from 'BBsf'; Outlook
Stable

Class F EUR12.4 million: upgraded to 'B+sf' from 'Bsf'; Outlook
Stable

KEY RATING DRIVERS

Stable Transaction Performance

The upgrade reflects the end of the reinvestment period, a shorter
weighted average life of the transaction and satisfactory
performance of the transaction. The transaction is passing all the
par value and coverage tests, collateral quality tests and
portfolio profile tests except for weighted-average life (WAL) test
and Fitch Top 3 industry concentration test, which it is failing
marginally. The current portfolio's rating default rate (RDR) and
rating loss rate (RLR) is lower than levels for the transaction's
stressed portfolio. Class A has amortised by EUR34.1 million since
the expiry of the reinvestment period in November 2018.

'B' Portfolio Credit Quality

Fitch places the average credit quality of obligors in the 'B'
range. The weighted average rating factor (WARF) of the current
portfolio is 32.1, below the current maximum WARF covenant of 34.

High Recovery Expectations

The portfolio comprises a minimum of 90% senior unsecured
obligations. The weighted average recovery ate (WARR) of the
current portfolio is 67.2%, above the minimum WARR covenant of
61.8%.

Portfolio Management

The reinvestment criteria allow the manager to reinvest proceeds
from prepayment and sale of credit-impaired and -improved
obligations post reinvestment period, subject to satisfaction of
the WAL test and all other portfolio profile tests, and collateral
quality tests being maintained or improved, if failing. As per the
May 2019 investor report, the WAL test is failing therefore no
further reinvestment can be made till the test is satisfied.

Limited Interest Rate Risk

All liabilities are floating-rate while fixed-rate assets may
represent between 0% and 5% of the target par respectively. Fitch
tested both 0% and 5% fixed-rate assets and found the rated notes
can withstand the interest rate mismatch associated with each
scenario.

Euribor Not Floored at Zero

The calculation of the effective spread of assets having an
interest rate floor does not floor Euribor at zero and therefore
will lead to an inflated weighted average spread due to the
negative Euribor. This overstatement of weighted-average spread
(WAS) is offset by Euribor not being floored at zero in the
calculation of the notes' floating interests.

INVESCO EURO II: Moody's Assigns B2(sf) Rating to Class F Notes
---------------------------------------------------------------
Moody's Investors Service announced that it has assigned the
following definitive ratings to the notes issued by Invesco Euro
CLO II Designated Activity Company:

EUR2,000,000 Class X Senior Secured Floating Rate Notes due 2032,
Definitive Rating Assigned Aaa (sf)

EUR248,000,000 Class A Senior Secured Floating Rate Notes due 2032,
Definitive Rating Assigned Aaa (sf)

EUR25,000,000 Class B-1 Senior Secured Floating Rate Notes due
2032, Definitive Rating Assigned Aa2 (sf)

EUR15,000,000 Class B-2 Senior Secured Fixed Rate Notes due 2032,
Definitive Rating Assigned Aa2 (sf)

EUR25,000,000 Class C Senior Secured Deferrable Floating Rate Notes
due 2032, Definitive Rating Assigned A2 (sf)

EUR26,000,000 Class D Senior Secured Deferrable Floating Rate Notes
due 2032, Definitive Rating Assigned Baa3 (sf)

EUR21,000,000 Class E Senior Secured Deferrable Floating Rate Notes
due 2032, Definitive Rating Assigned Ba3 (sf)

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

RATINGS RATIONALE

The rationale for the ratings is based on a consideration of the
risks associated with the CLO's portfolio and structure as
described in its methodology.

The Issuer is a managed cash flow CLO. At least 90% of the
portfolio must consist of senior secured obligations and up to 10%
of the portfolio may consist of senior unsecured obligations,
second-lien loans, mezzanine obligations and high yield bonds. The
portfolio is expected to be 75% ramped as of the closing date and
to comprise predominantly of corporate loans to obligors domiciled
in Western Europe. The remainder of the portfolio will be acquired
during the 6-month ramp-up period in compliance with the portfolio
guidelines.

Invesco European RR L.P. will manage the CLO. It will direct the
selection, acquisition and disposition of collateral on behalf of
the Issuer and may engage in trading activity, including
discretionary trading, during the transaction's four and a
half-year reinvestment period. Thereafter, subject to certain
restrictions, purchases are permitted using principal proceeds from
unscheduled principal payments and proceeds from sales of credit
risk obligations or credit improved obligations.

Interest and principal amortisation amounts due to the Class X
Notes are paid pro rata with payments to the Class A Notes. The
Class X Notes amortise by 12.5% or EUR250,000.00 over the first
eight payment dates starting on the first payment date.

In addition to the eight classes of notes rated by Moody's, the
Issuer has issued EUR39,500,000.00 of Subordinated Notes which are
not rated.

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

Methodology underlying the rating action:

The principal methodology used in these ratings was "Moody's Global
Approach to Rating Collateralized Loan Obligations" published in
March 2019.

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

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

Moody's modeled the transaction using a cash flow model based on
the Binomial Expansion Technique, as described in Section 2.3 of
the "Moody's Global Approach to Rating Collateralized Loan
Obligations" rating methodology published in March 2019.

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

Par Amount: EUR400,000,000.00

Diversity Score: 44

Weighted Average Rating Factor (WARF): 2850

Weighted Average Spread (WAS): 3.65%

Weighted Average Coupon (WAC): 5.25%

Weighted Average Recovery Rate (WARR): 44.00%

Weighted Average Life (WAL): 8.5 years

Moody's has addressed the potential exposure to obligors domiciled
in countries with local currency ceiling (LCC) of A1 or below. As
per the portfolio constraints and eligibility criteria, exposures
to countries with LCC of A1 to A3 cannot exceed 10% and obligors
cannot be domiciled in countries with LCC below A3.

SOUND POINT II: Moody's Puts (P)B3 Rating to EUR9MM Class F Notes
-----------------------------------------------------------------
Moody's Investors Service announced that it has assigned the
following provisional ratings to notes to be issued by Sound Point
Euro CLO II Funding Designated Activity Company:

EUR2,000,000 Class X Senior Secured Floating Rate Notes due 2032,
Assigned (P)Aaa (sf)

EUR248,000,000 Class A Senior Secured Floating Rate Notes due 2032,
Assigned (P)Aaa (sf)

EUR24,000,000 Class B-1 Senior Secured Floating Rate Notes due
2032, Assigned (P)Aa2 (sf)

EUR15,000,000 Class B-2 Senior Secured Fixed Rate Notes due 2032,
Assigned (P)Aa2 (sf)

EUR25,000,000 Class C Senior Secured Deferrable Floating Rate Notes
due 2032, Assigned (P)A2 (sf)

EUR27,500,000 Class D Senior Secured Deferrable Floating Rate Notes
due 2032, Assigned (P)Baa3 (sf)

EUR22,500,000 Class E Senior Secured Deferrable Floating Rate Notes
due 2032, Assigned (P)Ba3 (sf)

EUR9,000,000 Class F Senior Secured Deferrable Floating Rate Notes
due 2032, Assigned (P)B3 (sf)

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

RATINGS RATIONALE

The rationale for the ratings is based on a consideration of the
risks associated with the CLO's portfolio and structure as
described in its methodology.

Sound Point Euro CLO II Funding Designated Activity Company is a
managed cash flow CLO. At least 90.0% of the portfolio must consist
of senior secured loans and senior secured bonds and up to 10.0% of
the portfolio may consist of unsecured obligations, second-lien
loans, mezzanine loans and high yield bonds. The portfolio is
expected to be approximately 75% ramped up as of the closing date
and to be comprised predominantly of corporate loans to obligors
domiciled in Western Europe.

Sound Point CLO C-MOA, LLC ("Sound Point", the "Manager"), will
manage the CLO. It will direct the selection, acquisition and
disposition of collateral on behalf of the Issuer and may engage in
trading activity, including discretionary trading, during the
transaction's 4.66-year reinvestment period. Thereafter, subject to
certain restrictions, purchases are permitted using principal
proceeds from unscheduled principal payments and proceeds from the
sale of credit risk obligations, and are subject to certain
restrictions.

Interest and principal amortisation amounts due to the Class X
Notes are paid pro rata with payments to the Class A Notes. The
Class X Notes amortise by EUR333,333.34 over six payment dates
starting on the 2nd payment date.

In addition to the eight classes of notes rated by Moody's, the
Issuer will issue EUR33,750,000 of subordinated notes which will
not be rated.

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

Methodology Underlying the Rating Action:

The principal methodology used in these ratings was "Moody's Global
Approach to Rating Collateralized Loan Obligations" published in
March 2019.

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

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

Moody's modeled the transaction using CDOEdge, a cash flow model
based on the Binomial Expansion Technique, as described in Section
2.3 of the "Moody's Global Approach to Rating Collateralized Loan
Obligations" rating methodology published in March 2019.

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

Par amount: EUR400,000,000

Diversity Score: 42

Weighted Average Rating Factor (WARF): 2850

Weighted Average Spread (WAS): 3.70%

Weighted Average Coupon (WAC): 5.00%

Weighted Average Recovery Rate (WARR): 44.50%

Weighted Average Life (WAL): 8.5 years

Moody's has addressed the potential exposure to obligors domiciled
in countries with local currency ceiling (LCC) of A1 or below. As
per the portfolio constraints and eligibility criteria, exposures
to countries with LCC of A1 to A3 cannot exceed 10% and obligors
cannot be domiciled in countries with LCC below A3.



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

BANCA IFIS: Fitch Affirms BB+ LT IDR, Outlook Stable
----------------------------------------------------
Fitch Ratings has affirmed Banca IFIS S.p.A.'s Long-Term Issuer
Default Rating at 'BB+' and Viability Rating at 'bb+'. The Outlook
on the Long-Term IDR is Stable.

KEY RATING DRIVERS

IDRS, VR AND SENIOR DEBT

The ratings of IFIS reflect its specialised business model with
moderate franchises in key business segments, healthy earning
generation through the cycle and adequate capital buffers over
minimum Supervisory Review and Evaluation Process (SREP)
requirement. The ratings also reflect the bank's limited progress
in reducing impaired loans generated from credit activities.

IFIS's business model is quite unique in the Italian banking
sector, focused on providing factoring, leasing and structured
finance solutions to domestic SMEs. The bank is also a leading
purchaser of domestic unsecured retail non-performing loans (NPLs),
which generate a significant proportion of its earnings and
supported profitability against a low-interest rate environment
through the cycle.

However, Fitch believes that increased reliance on earnings from
NPL investments could expose the bank to heightened downside risks,
since the market for unsecured retail loans, in which IFIS is
specialised, is at a mature stage and its ability to expand
sustainably into other asset classes is untested. The bank recently
acquired FBS SpA, the fourth national credit servicer by size
focused on secured and corporate NPLs, which should enable growth
in these NPLs segments.

Its operating profit/risk-weighted assets (RWAs) of 2.1% in 2018
remains satisfactory compared with domestic industry averages. In
2018 and 1Q19, the combination of higher purchased NPL volumes,
good recovery performance and growing factoring turnover continued
to support the bank's profitability. However, Fitch believes that
the bank will face increased challenges from growing competition in
the market and slower economic growth in Italy. The bank will also
face a potential reduction in its net interest income, given the
gradual reduction of Purchase Price Allocation (PPA) generated from
Interbanca's assets, which has an expected residual life of three
years, and a potential rise in its cost of funding.

Fitch believes that the bank has room for rationalising its cost
base, which has been increasing through the cycle as a result of
business acquisitions and larger NPL volumes. Fitch expects
strategic guidelines under the new CEO to discontinue IFIS's
acquisition-led strategy and to focus on streamlining the bank's
current business operations and develop them in a more efficient
manner.

Our assessment of asset quality acknowledges that IFIS's
non-traditional activity as NPL investor implies high levels of
impaired loans but also that credit risk arising from purchased
NPLs is manageable given the bank's conservative pricing of these
loans and good track record of recoveries.

When excluding purchased NPLs, IFIS's impaired loans ratio of 23%
at end-March 2019 would reduce to around 9.8%, the coverage of
which, at around 52%, is sound and consistent with the bank's
approach on managing its NPLs through internal workout.

IFIS's Fitch core capital (FCC) ratio of around 15% and common
equity Tier 1 ratio of 10.3% at end-March 2019 compare well
domestically with other second-tier banks'. Leverage is sound with
a tangible common equity-to-tangible assets ratio of almost 14%.
Own generated impaired loans accounted for around 23% of its FCC at
end-March 2019, which is manageable and one of the lowest among its
domestic rated banks.

Customer deposits are generally stable and gathered through its
online savings accounts. Other sources of funding are modestly
diversified and access to wholesale markets through unsecured
issuance is only partially tested. Liquidity is sound as a
significant proportion of assets is short- term.

The Short-Term IDR of 'B' maps to, and the senior unsecured debt
rating of 'BB+' is aligned with, the bank's Long-Term IDR.

SUPPORT RATING AND SUPPORT RATING FLOOR

The Support Rating (SR) of '5' and Support Rating Floor (SRF) of
'No Floor' reflect Fitch's view that, although external support is
possible, it cannot be relied upon. Senior creditors can no longer
expect to receive full extraordinary support from the sovereign if
the bank becomes non-viable. The EU's Bank Recovery and Resolution
Directive and the Single Resolution Mechanism for eurozone banks
provide a framework for the resolution of banks that requires
senior creditors to participate in losses, if necessary, instead of
or ahead of a bank receiving sovereign support. In addition, it
reflects the lack of systemic importance of IFIS.

DEPOSIT RATING

The Long-Term Deposit Rating is line with IFIS's Long-Term IDR.
Fitch believes that the bank's buffer of qualifying junior and
senior debt does not provide sufficient protection to uninsured
depositors in a resolution or liquidation. The buffer does not give
sufficient assurance that a default on deposits could be avoided in
case of a default on other obligations. This is due to uncertainty
over future buffer evolution.

SUBORDINATED DEBT

Tier 2 subordinated debt is rated one notch below the VR for loss
severity to reflect below-average recovery prospects. No notching
is applied for incremental non-performance risk because write-down
of the notes will only occur once the point of non-viability is
reached and there is no coupon flexibility before non-viability.

RATING SENSITIVITIES

IDRS, VR AND SENIOR DEBT

IFIS's ratings could be downgraded if IFIS's profitability
deteriorates materially, as a result of weaker revenue generation
from key business segments amid a more challenging operating
environment. The ratings are also sensitive to prolonged slowdown
in Italy's operating environment if this leads to significant
deterioration in recovery prospects for purchased NPLs and higher
impaired loans formation from its lending activities, resulting in
a material erosion of its capital buffers.

Rating upside is limited, but IFIS' ratings could over time benefit
from a stabilisation of the bank's business model and evidence of
sustainable profit generation while maintaining adequate
capitalisation and good control over NPLs.

SUPPORT RATING AND SUPPORT RATING FLOOR

An upgrade of the SR and upward revision of the SRF would be
contingent on a positive change in the sovereign's propensity to
support the bank. In Fitch's view, this is highly unlikely,
although not impossible.

DEPOSIT RATING

The long-term Deposit Rating is primarily sensitive to changes in
the bank's Long-Term IDR. The rating is also sensitive to IFIS's
ability to maintain and eventually increase its buffers of senior
and junior debt.

SUBORDINATED DEBT

The rating of subordinated debt is primarily sensitive to changes
in the VR, from which it is notched. The rating is also sensitive
to a change in the notes' notching, which could arise if Fitch
changes its assessment of their non-performance relative to the
risk captured in the VR or their expected loss severity.

The rating actions are as follows:

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

Short-Term IDR: affirmed at 'B'

Viability Rating: affirmed at 'bb+'

Support Rating: affirmed at '5'

Support Rating Floor: affirmed at 'No Floor'

Senior unsecured debt: affirmed at 'BB+'

Long-term Deposit Rating: affirmed at 'BB+'

Subordinated Tier 2 notes: affirmed at 'BB'

COOPERATIVA MURATORI: Moody's Withdraws Ca CFR due to Lack of Info
------------------------------------------------------------------
Moody's Investors Service has withdrawn its ratings on Italian
construction company Cooperativa Muratori e Cementisti C.M.C.,
including the Ca corporate family rating, the Ca-PD/LD probability
of default rating and the Ca instrument ratings on the senior
unsecured notes due 2022 and 2023, as well as the negative
outlook.

RATINGS RATIONALE

Moody's has decided to withdraw the ratings because it believes it
has insufficient or otherwise inadequate information to support the
maintenance of the ratings.

COMPANY PROFILE

Cooperativa Muratori e Cementisti, headquartered in Ravenna, Italy,
is a cooperative construction company with consolidated revenues of
approximately EUR1.2 billion in 2017. Projects include highways,
railways, water dams, tunnels, subways, ports, commercial as well
as mining and industrial facilities. CMC is the fourth largest
construction company in Italy by revenue and has long developed an
international presence. Established in 1901, CMC is a
mutually-owned entity with around 470 current members.



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

ALTISOURCE SARL: Moody's Affirms B3 CFR; Alters Outlook to Stable
-----------------------------------------------------------------
Moody's Investors Service affirmed Altisource S.a.r.l.'s B3
Corporate Family and Senior Secured Bank Credit Facility Ratings.
The outlook for Altisource was revised to stable from positive.

As part of the same rating action, Moody's has withdrawn the
outlooks on Altisource's Long-Term Corporate Family rating and
Senior Secured Bank Credit Facility rating for its own business
reasons.

While the ratings affirmation reflects Moody's view of Altisource's
unchanged credit profile, the change in outlook to stable from
positive reflects the significantly reduced likelihood of
Altisource reaching a direct services agreement with New
Residential Investment Corp. (Ba3 stable). The agreement would have
kept Altisource as the exclusive provider of certain mortgage
services, in the event that New Residential were to move servicing
from Ocwen to another subservicer, for mortgage servicing rights
owned by New Residential and the underlying loans subserviced by
PHH Mortgage Corp. (fka Ocwen Loan Servicing, LLC). Altisource
continues to provide services on New Residential's portfolio
subserviced by Ocwen under its agreements with Ocwen and its
cooperative brokerage agreement with New Residential.

Affirmations:

Issuer: Altisource S.a.r.l.

Corporate Family Rating, Affirmed B3

Senior Secured Revolving Credit Facility, Affirmed B3

Senior Secured Term Loan B, Affirmed B3

Outlook Actions:

Issuer: Altisource S.a.r.l.

Outlook, Changed To Stable From Positive

RATINGS RATIONALE

The affirmation of Altisource's ratings resulted from Moody's
unchanged assessment of the firm's credit profile. Altisource's
ratings are based on its B3 standalone assessment, reflecting the
firm's strong cash flow, as well as revenue concentration in
default management related services. The ratings also reflect the
company's continued reliance for a large percentage of its revenues
on the servicing portfolio of PHH Mortgage Corp., a subsidiary of
Ocwen Financial Corporation (Caa1 stable).

The change in outlook to stable from positive reflects the
significantly reduced likelihood of Altisource and New Residential
signing a direct services agreement which would have provided that
Altisource remain the service provider even if Ocwen were no longer
the subservicer, as evidenced by the December 15, 2018 expiration
of the non-binding letter of intent entered into on August 28, 2017
between Altisource and New Residential. Absent the direct services
agreement, there is no certainty that Altisource would continue to
be New Residential's exclusive services provider of default-related
services for the loans subserviced by PHH Mortgage if it were no
longer the subservicer.

Altisource's financial position continues to be highly reliant on
Ocwen from whom 58% of Altisource's revenues are derived.
Altisource has made expanding its businesses and building out its
suite of products a priority with modest success. However, the
cashflow and profitability of such businesses currently make a very
small contribution to total revenues and an even smaller
contribution to net income.

Altisource's services contract with Ocwen runs through 2025.
However, Altisource's default related services revenue from New
Residential's Ocwen subserviced portfolios, which is unrelated to
revenue generated from Altisource's cooperative brokerage agreement
with New Residential, could be at risk if New Residential were to
move its servicing from to another subservicer.

The current stable outlook incorporates Moody's expectations that
Altisource will continue to grow its non-Ocwen revenues.

WHAT COULD CHANGE THE RATINGS UP/DOWN

Altisource's ratings could be upgraded if its financial profile
strengthens through a significant increase in income from the
company's non-Ocwen business, or significant deleveraging.

Altisource's ratings could be downgraded in the event of a material
reduction in net income or increase in leverage. In addition, a
ratings downgrade could result if the volume of non-Government
Sponsored Enterprise loans for which Ocwen owns the mortgage
servicing rights and services declines significantly.

The principal methodology used in these ratings was Finance
Companies published in December 2018.



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

TIKEHAU CLO V: Moody's Rates EUR25.3MM Class E Notes (P)Ba3(sf)
---------------------------------------------------------------
Moody's Investors Service announced that it has assigned the
following provisional ratings to notes to be issued by Tikehau CLO
V B.V.:

EUR2,200,000 Class X Senior Secured Floating Rate Notes due 2032,
Assigned (P)Aaa (sf)

EUR272,800,000 Class A Senior Secured Floating Rate Notes due 2032,
Assigned (P)Aaa (sf)

EUR36,800,000 Class B-1 Senior Secured Floating Rate Notes due
2032, Assigned (P)Aa2 (sf)

EUR5,000,000 Class B-2 Senior Secured Fixed Rate Notes due 2032,
Assigned (P)Aa2 (sf)

EUR19,300,000 Class C-1 Senior Secured Deferrable Floating Rate
Notes due 2032, Assigned (P)A2 (sf)

EUR7,100,000 Class C-2 Senior Secured Deferrable Floating Rate
Notes due 2032, Assigned (P)A2 (sf)

EUR24,800,000 Class D-1 Senior Secured Deferrable Floating Rate
Notes due 2032, Assigned (P)Baa3 (sf)

EUR6,000,000 Class D-2 Senior Secured Deferrable Floating Rate
Notes due 2032, Assigned (P)Baa3 (sf)

EUR25,300,000 Class E Senior Secured Deferrable Floating Rate Notes
due 2032, Assigned (P)Ba3 (sf)

EUR12,100,000 Class F Senior Secured Deferrable Floating Rate Notes
due 2032, Assigned (P)B3 (sf)

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

RATINGS RATIONALE

The rationale for the ratings is based on a consideration of the
risks associated with the CLO's portfolio and structure as
described in its methodology.

Tikehau Capital Europe Limited will manage the CLO. It will direct
the selection, acquisition and disposition of collateral on behalf
of the Issuer and may engage in trading activity, including
discretionary trading, during the transaction's four year and four
and a half month reinvestment period. Thereafter, subject to
certain restrictions, purchases are permitted using principal
proceeds from unscheduled principal payments and proceeds from
sales of credit risk obligations or credit improved obligations.

Interest and principal amortisation amounts due to the Class X
Notes are paid pro rata with payments to the Class A Notes. The
Class X Notes amortise by 16.6% or EUR366,666 over the first 6
payment dates starting on the second payment date.

In addition to the ten classes of notes rated by Moody's, the
Issuer will issue EUR39.8 million of Subordinated Notes which will
not be rated.

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

Methodology underlying the rating action:

The principal methodology used in these ratings was "Moody's Global
Approach to Rating Collateralized Loan Obligations" published in
March 2019.

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

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

Moody's modeled the transaction using CDOEdge, a cash flow model
based on the Binomial Expansion Technique, as described in Section
2.3 of the "Moody's Global Approach to Rating Collateralized Loan
Obligations" rating methodology published in March 2019.

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

Par Amount: EUR440,000,000

Diversity Score: 49

Weighted Average Rating Factor (WARF): 2850

Weighted Average Spread (WAS): 3.70%

Weighted Average Coupon (WAC): 5%

Weighted Average Recovery Rate (WARR): 43%

Weighted Average Life (WAL): 8.5 years

Moody's has addressed the potential exposure to obligors domiciled
in countries with local currency ceiling (LCC) of A1 or below. As
per the portfolio constraints and eligibility criteria, exposures
to countries with LCC of A1 to A3 cannot exceed 10% and obligors
cannot be domiciled in countries with LCC below A3.



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

IPOTEKA-BANK: Fitch Assigns BB- LT IDR, Outlook Stable
------------------------------------------------------
Fitch Ratings has assigned Uzbekistan-based Ipoteka-Bank Foreign
and Local Currency Long-Term Issuer Default Ratings of 'BB-'. The
Outlook on the IDRs is Stable. The agency has also assigned the
bank a Viability Rating of 'b'.

KEY RATING DRIVERS

IDRS, SUPPORT RATING AND SUPPORT RATING FLOOR
Ipoteka's 'BB-' Long-Term IDRs reflect Fitch's view of a moderate
probability of support from the Uzbekistan sovereign (BB-/Stable)
in case of need, as reflected in the bank's Support Rating (SR) of
'3' and Support Rating Floor (SRF) of 'BB-'. This view is based on
full state ownership, which has a high influence on the ratings,
the low cost of potential support relative to the sovereign's
foreign currency reserves, Ipoteka's role as a policy bank where it
extends mortgage loans, and a track record of support for the
country's public sector banks that dominate the banking sector.

The sovereign's ability to provide support is solid, in its view,
given the moderate size of the banking sector relative to the
economy (total banking sector assets of USD25 billion with a
loans/GDP ratio of 41% at end-2018), while Uzbekistan's FC reserves
are relatively large at around USD27 billion. However, support
considerations also factor in high concentration in the banking
sector where state-owned banks represent around 80% of sector
assets, sector loan dollarisation of close to 60% and vulnerability
to external shocks given a commodities-based economy whose external
finances rely on remittances.

Ipoteka is the fourth-largest bank in Uzbekistan where it
controlled a 9% share of system assets and deposits and 10% of
system loans at end-1H19.

Plans to sell a controlling stake in Ipoteka by end-2022 are in
place, according to a government decree dated June 25, 2019. In its
view, change of ownership could take time and until this occurs,
the state remains committed to supporting the bank. This explains
the IDRs' Stable Outlook.

VR

Ipoteka's 'b' VR is heavily influenced by the challenging operating
environment in Uzbekistan, potential deficiencies in underwriting
standards, the bank's limited commercial franchise, rapid loan
growth and high single-name concentrations in the loan book.

Ipoteka has a strong franchise in the domestic mortgage lending
market where it controls a share of around 20%. The bank is the
main operator of the state-funded affordable housing programmes
under which mortgage loans are extended at subsidised rates and on
preferential terms. The government's intention is to gradually
phase out these programmes from 2020 in favour of market-based
mortgage lending, but Fitch expects Ipoteka to remain one of the
leading mortgage banks in Uzbekistan going forward.

Plans to transform the bank's business, in line with privatisation,
are underway. Fitch views this positively, especially as proposals
include the potential for the International Financial Corporation
(IFC) to acquire a 15% stake which could help improve corporate
governance over time.

Like many state-owned banks in Uzbekistan, Ipoteka is reliant on
state capital and funding support. Since 2015, the bank received
about USD145 million of common equity from the state, including
USD50 million in 1H19. Additionally, over 70% of the bank's
liabilities at end-2018 comprised state-related funds.

Impaired loans represented only 1.7% of gross loans at end-2018,
but loan growth has averaged an annual 44% over the past four years
and this distorts asset quality figures. This is the case for many
Uzbek banks. Its assessment is that a truer picture of asset
quality will emerge across the sector once loan books season.

Concentrations by single borrower are high, as is the case for
several peers. At end-2018, the 25-largest exposures represented
56% of gross loans. The three-largest exposures, representing 48%
of the loan book, are large state-owned entities and the largest
exposure (28% of loans) benefits from a state guarantee. The
remaining loans are quite granular and comprise loans to SMEs in
manufacturing, services and textile industries. Devaluation of the
soum, as was the case in 2017, can be detrimental to asset quality
as borrowers with local currency revenues struggle to meet rising
debt servicing costs as a result of a weaker local currency . The
low dollarisation of Ipoteka's loan book (39% at end-2018) compared
with other local state-owned banks is credit-positive, in its view.


In 2018, Ipoteka reported reasonable performance with a net return
on average assets and equity, respectively of 1.1% and 12.3%.
Performance metrics compare favourably with peers' as Ipoteka's
share of less profitable, directed corporate lending is low
compared with other state-owned peers and margins on subsidised
loans are relatively high and stable.

Capitalisation levels are determined by the state, as is the case
for peers, and regular capital injections ensure that regulatory
capital adequacy ratios are maintained above minimum requirements.
Its assessment is that capitalisation is tight, considering risks.
Fitch Core Capital (FCC) represented 13.7% of regulatory
risk-weighted assets (RWAs) at end-2018. Regulatory Tier 1 and
Total capital ratios improved to 13.2% and 17.5% at end-1H19,
respectively, following a USD50 million capital contribution from
the state. The bank's planned 30% loan growth in 2019 will likely
put pressure on capital ratios.

The bank relies on state funding in the form of direct loans and
deposits from government and quasi-government institutions.
Non-state customer funding represented 16% of end-2018 liabilities,
while wholesale borrowings (mostly from international financial
institutions), represented a further 13%. The bank's liquidity
buffer, comprising cash, short-term placements with the Central
Bank of Uzbekistan and local banks, and government bonds, was 7% of
end-2018 assets. This is low, but adequate considering the stable
and predictable nature of funds provided by the state. Net of
upcoming wholesale debt repayments, liquid assets were sufficient
to cover a moderate 12% of customer accounts, which Fitch views as
adequate.

Similar to other Uzbek state-owned banks, Ipoteka has an ESG
Relevance Score of '4' for Governance Structure as the State of
Uzbekistan is highly involved in the bank at board level and in the
business. Therefore, environmental, social and governance
assessments are relevant to Ipoteka's ratings but are not rating
drivers.

RATING SENSITIVITIES

IDRS, SUPPORT RATING AND SUPPORT RATING FLOOR

Rating actions on Ipoteka's support-driven IDRs, SR and SRF will
likely result from a strengthening or weakening of the sovereign's
credit profile and mirror changes to Uzbekistan's sovereign
ratings. The ratings are also sensitive to ownership changes
especially if this triggers a reduction in the state's propensity
to support the bank. However, the Outlook on the sovereign ratings
is Stable and ownership changes are not imminent.

VR

Ipoteka's VR could be downgraded as a result of deterioration in
asset quality, excessive loan growth or capital weakness in the
absence of fresh capital injections. An upgrade of the VR would
require a substantial improvement in Uzbekistan's operating
environment and strengthening of the bank's commercial franchise
and business model.

ORENBURG REGION: Fitch Affirms BB+ LT IDRs, Outlook Stable
----------------------------------------------------------
Fitch Ratings has affirmed the Russian Orenburg Region's Long-Term
Foreign- and Local-Currency Issuer Default Ratings at 'BB+' with
Stable Outlooks.

KEY RATING DRIVERS

The ratings reflect a 'Weaker' risk profile assessment and debt
sustainability assessment of 'aa' under Fitch rating case. The
ratings also reflect the region's moderate debt and sound fiscal
performance supported by a strong tax base. This is counterbalanced
by the concentrated profile of Orenburg's economy in the oil and
gas sector, which exposes the region's revenue to potential
volatility.

Orenburg region lies in the south-east of European Russia,
bordering Kazakhstan (BBB/Stable) to the south. Orenburg's economic
profile is supported by the extraction of oil and gas, and its GRP
per capita is 12% above the national median. According to budgetary
regulation, Orenburg can borrow on the domestic market. The
region's budget accounts are presented on a cash basis while budget
law is approved for a three-year period.

Revenue Robustness Assessed as Weaker

The 'Weaker' assessment is derived from the region's concentrated
tax base that exposes the region to volatility due to dependence on
economic cycles and commodities markets. The top 10 taxpayers
contributed 50% to the region's tax revenue in 2018. Corporate
income tax (CIT), which is most volatile, has historically been the
region's largest revenue contributor at 38% of total revenue in
2018. At the same time Orenburg's economic profile is stronger than
the average Russian region due to rich deposits of oil and gas, and
Fitch expects the region's tax base will continue to expand,
supported by new investments into extraction and processing of oil
and gas.

Revenue Adjustability Assessed as Weaker

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

Expenditure Sustainability Assessed as Midrange

The region's administration demonstrates sound control over
expenditure, as evidenced by a track record of spending trend
closely tracking that of revenue during the last five years. Fitch
expects this prudent approach to continue in the medium term. As
with other Russian regions, Orenburg has responsibilities in
education, healthcare, provision of some types of social benefits,
public transportation and road construction. Spending in education
and healthcare, which are of counter- or non-cyclical nature,
accounted for 33% of total expenditure in 2018. In line with other
Russian regions, Orenburg is not required to adopt anti-cyclical
measures, which would inflate expenditure on social benefits in a
downturn.

Expenditure Adjustability Assessed as Weaker

The majority of spending responsibilities are mandatory for Russian
subnationals, which leaves little scope for cutbacks in response to
potential revenue shrinking. Orenburg's flexibility to cut capex is
also limited by capex averaging a modest 13% of total spending in
2017-2018. The ability to cut expenditure is also constrained by
the low level of per capita expenditure (USD658 in 2018), compared
with international peers. The budgetary policy of Russian regions
is also dependent on decisions of the federal authorities, which
could negatively affect the expenditure dynamic.

Liabilities and Liquidity Robustness Assessed as Midrange

The assessment is supported by a national budgetary framework with
strict rules on regional debt management. 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.

Orenburg follows a consistent debt policy aimed at maintaining
moderate debt levels and minimising the cost of debt. In 2018, the
region's debt declined to 28% of current revenue from an average
38% in 2014-2017, supported by a large budget surplus at 12.6% of
total revenue. The region's weighted average life of debt is around
six years, which provides a favourable comparison with most of
national peers who resort to short-term debt. As of July 1, 2018,
Orenburg's debt was split between budget loans (57%) and domestic
bonds (43%). The region's contingent's liabilities are low and
under control.

Liabilities and Liquidity Flexibility Assessed as Midrange

Orenburg had not held large cash reserves until 2018 when the
region accumulated RUB9 billion revenue due to favourable market
conditions. Fitch expects most of the accumulated cash will be
gradually depleted over the medium-term, though the region's
liquidity is likely to remain stronger than average RUB0.7 billion
in 2014-2017.

Liquidity flexibility is also supported by a federal treasury line
covering intra-year cash gaps. Fitch assesses that Orenburg has
reasonable access to domestic capital market and can borrow in case
of need, as evident from its long track record in domestic bond
placements. Nonetheless, due to the 'bbb-' counterparty risk of
domestic liquidity providers, its assessment of this risk factor is
'Midrange'.

Debt Sustainability Assessment: 'aa'

As with other Russian LRGs Fitch classifies Orenburg region as a
Type B LRG, which covers debt service from cash flow on an annual
basis, under the agency's Rating Criteria for International Local
and Regional Governments. The 'aa' assessment is derived from a
combination of a sound payback ratio (net adjusted debt/operating
balance), which, according to Fitch's rating case, will remain in
line with 'aa'; a low fiscal debt burden (net adjusted
debt-to-operating revenue), corresponding to a 'aaa' assessment;
and a weak actual debt service coverage ratio (ADSCR: operating
balance-to-debt service, including short-term debt maturities)
equivalent to 'bb' in majority of the period under its rating
case.

According to Fitch's rating case, the payback ratio will remain
below 5x in 2019-2021 before rising above this level in 2022-2023.
Fitch's rating case projects that the fiscal debt burden will not
exceed 50% over the next five years, while the ADSCR will average
1.5x before approaching 1x in 2023. The combination of the metrics
results in a 'aa' overall debt sustainability assessment.

DERIVATION SUMMARY

Fitch assesses Orenburg's standalone credit profile (SCP) at 'bb+',
which reflects a combination of a 'Weaker' risk profile and a 'aa'
assessment of debt sustainability. The notch-specific rating
factors in comparison with Orenburg's international peers and takes
into account the strong payback ratio and low indebtedness
counterbalanced by a weak ADSCR (typical of Russian regions). The
IDRs are not affected by any asymmetric risk or extraordinary
support from upper tiers of government. As a result, the region's
IDRs are equal to the SCP.

KEY ASSUMPTIONS

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

  - 2019 revenue outturn close to the region's budget

  - CIT to grow in line with the local economy's nominal growth in
2020-2023

  - Other tax growth in line with inflation in 2020-2023

  - Operating expenditure growth in line with inflation

  - Proportion of capex to average 13% of total expenditure over
the next five years, in line with historical average

  - Budget loans will cease to dominate the region's debt portfolio
over the medium-term

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

  - Stress on CIT by -2.14 pp annually in 2020-2023 in case of
weaker economic environment to reflect historical CIT volatility

  - Stress on operating expenditure by +0.9 pp annually in
2019-2023 to reflect historical operating expenditure volatility.



===========
S W E D E N
===========

INTRUM AB: Moody's Rates Proposed Sr. Unsec. Bonds (P)Ba2
----------------------------------------------------------
Moody's Investors Service assigned a provisional (P)Ba2 rating to
the proposed long-term senior unsecured bonds to be issued by
Intrum AB (Publ). Intrum's Ba2 Corporate Family Rating and existing
Ba2 senior unsecured ratings are unaffected by this rating action,
while the outlook is stable.

Moody's issues provisional ratings in advance of the final sale of
securities. These ratings represent the rating agency's preliminary
credit opinion. A definitive rating may differ from a provisional
rating if the terms and conditions of the final issuance are
materially different from those of the draft prospectus reviewed.

The rating action follows Intrum's announcement on July 19, 2019
that it had launched an offering of EUR600 million maturing in
2026, whose proceeds will be used to refinance Intrum's outstanding
EUR300 million senior floating rate notes due 2022 and SEK3,000
million senior floating rate notes due 2022.

RATINGS RATIONALE

The Ba2 ratings of Intrum's EUR1.5 billion fixed senior notes and
EUR900 million fixed senior notes, and the (P)Ba2 rating of the
expected EUR600 million fixed rate notes reflect the results of
Moody's Loss Given Default (LGD) analysis for Speculative-Grade
Companies and their positioning within the company's funding
structure and the amount outstanding relative to total debt. The
model outcome for the notes is Ba3, one notch below the current Ba2
rating: however the senior unsecured debt rating of Ba2 is driven
by Moody's expectation that the revolving credit facility (RCF)
drawings will in the medium to longer term be at a lower level than
at present.

WHAT COULD CHANGE THE RATING UP / DOWN

Moody's could upgrade Intrum's CFR because of: (i) a significantly
reduced level of execution and operational risk as a result of
material progress in achieving targets related to the Lindorff AB
merger in June 2017 and the Intesa Sanpaolo S.p.A. (Intesa
Sanpaolo, Baa1/Baa1 stable, baa3) deal; and/or (ii) a material
improvement in its leverage position. An upgrade of Intrum's CFR
would likely result in an upgrade of its debt ratings.

Moody's could downgrade Intrum's CFR should: (i) the company
perform materially worse than expected, with sustained net income
to average total assets well below 1% and EBITDA interest coverage
falling well below 3.5x; (ii) the company's leverage rise well
above 5.0x; (iii) Intrum's liquidity position materially worsen,
for example if the RCF is highly utilised over a prolonged period
and the company is unable to reduce utilisation; and/or (iv) the
company fails to appropriately manage the risks related to its
acquisitions. A downgrade of Intrum's CFR would likely result in a
downgrade of its debt ratings. Further, Moody's could downgrade
Intrum's senior unsecured debt ratings due to an increased amount
of drawings under its EUR1.4 billion RCF which is senior to the
company's senior unsecured liabilities.

PRINCIPAL METHODOLOGY

The principal methodology used in this rating was Finance Companies
published in December 2018.

LIST OF AFFECTED RATINGS

Issuer: Intrum AB (publ)

Assignment:

Senior Unsecured Regular Bond/Debenture (Foreign Currency),
Assigned (P)Ba2



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

ANADOLU ANONIM: Fitch Lowers IFS Rating to BB, Outlook Negative
---------------------------------------------------------------
Fitch Ratings has downgraded Anadolu Anonim Turk Sigorta Sirketi's
Insurer Financial Strength Rating to 'BB' from 'BB+'. The Outlook
is Negative.

KEY RATING DRIVERS

The downgrade of Anadolu Sigorta's rating follows the downgrade of
Turkey's Long-Term Local-Currency Issuer Default Rating to 'BB-'
from 'BB+' on July 12, 2019 and the downgrade of several Turkish
banks' ratings on July 19. This reflects Anadolu Sigorta's
substantial exposure to Turkish assets (government bonds and
deposit with local banks) and to the wider Turkish economy.

The Negative Outlook mirrors that on Turkey's LC IDR and that on
major Turkish banks. Anadolu Sigorta's investment portfolio is
highly concentrated, with 72% in the form of deposits in Turkish
banks. The credit quality of Anadolu Sigorta is therefore highly
correlated with that of Turkish banks and the sovereign.

RATING SENSITIVITIES

Anadolu Sigorta's International IFS rating will be downgraded if
the insurer's asset quality, which is primarily represented by the
company's exposure to major Turkish banks, deteriorates, or in the
event of a downgrade of Turkey's LC IDR.

The rating could also be downgraded if the insurer's capital
position deteriorates, as measured by a regulatory solvency ratio
below 100%, which could be caused by a substantial underwriting or
investment loss.

The Outlook could be revised to Stable if the Outlooks on Turkey's
LC IDR and on major Turkish banks are revised to Stable.

ISTANBUL: Fitch Downgrades LT IDR to BB-, Outlook Negative
----------------------------------------------------------
Fitch Ratings downgraded the Long-Term Foreign-Currency Issuer
Default Ratings of Metropolitan Municipality of Istanbul,
Metropolitan Municipality of Izmir, Metropolitan Municipality of
Bursa, Antalya Metropolitan Municipality and Manisa Metropolitan
Municipality of Manisa to 'BB-' from 'BB'. The Outlooks on
Istanbul, Izmir and Manisa are Negative, while Bursa and Antalya
have been maintained on Rating Watch Negative.

Under EU credit rating agency (CRA) regulation, the publication of
sovereign (including by CRA definition regional or local
authorities of a state) reviews is subject to restrictions and must
take place according to a published schedule, except where it is
necessary for CRAs to deviate from this in order to comply with
their legal obligations.

Fitch interprets this provision as allowing us to publish a rating
review in situations where there is a material change in the
creditworthiness of the issuers that Fitch believes makes it
inappropriate for us to wait until the next scheduled review dates
(Istanbul: November 22, 2019, Izmir: November 01, 2019, Bursa:
November 01, 2019, Antalya: October 04, 2019 and Manisa: October
11, 2019) to update the ratings or Outlook/Watch status. In this
case the deviation was caused by the downgrade of Turkey's IDRs on
July 12, 2019.

Fitch may revise Turkey's National Rating Scale following a
recalibration under review.

KEY RATING DRIVERS

The downgrade of the IDRs reflect the following key rating drivers
and their relative weights:

HIGH

Following the downgrade of Turkey's Long- Term Foreign- and
Local-Currency IDRs, the Long-Term Foreign and Local Currency IDRs
of Istanbul, Izmir, Bursa, Antalya and Manisa and the Outlooks are
now equalised with those of the sovereign. Since local and regional
governments cannot usually be rated above the sovereign according
to Fitch's Rating Criteria for International Local and Regional
Governments, the IDRs and Outlooks of Istanbul, Izmir, Bursa,
Antalya and Manisa needed to be revised in line with the
sovereign.

The centralised nature of Turkish local governments (metropolitan
municipalities in general) is reflected by the close financial
linkage between the central government and the metropolitan
municipalities, and tight oversight, and control of their accounts
and budgets by the central government, and approval of their
financial liabilities by upper tier government tiers.

TURKCELL FINANSMAN: Fitch Downgrades LT IDR B+, Outlook Negative
----------------------------------------------------------------
Fitch Ratings has downgraded Turkcell Finansman A.S.'s Foreign and
Local Currency Long-Term Issuer Default Ratings to 'B+' from 'BB'.
The Outlook is Negative.

The rating action reflects a similar rating action on TFS's parent
Turkcell Iletisim Hizmetleri A.S.

KEY RATING DRIVERS

TFS's ratings are based on potential support from Turkcell. Fitch
believes Turkcell would have a strong propensity to support TFS
given (i) its 100% stake in and full operational control of TFS;
(ii) the close integration of the subsidiary within its parent; and
(iii) TFS's role in customer base acquisition for Turkcell.

The one-notch difference between the ratings of Turkcell and TFS
reflects the subsidiary's focus on a different segment (finance
rather than telecom services), its short operating history and
different branding. These factors, in Fitch's view, moderately
reduce the reputational risk for the parent or potential negative
impact on other parts of Turkcell in case of a default by TFS. The
Negative Outlook reflects that on Turkcell.

RATING SENSITIVITIES

As TFS's IDR is bound to Turkcell's, changes to the latter will be
reflected on the subsidiary. The IDR of Turkcell is currently rated
in line with Turkey's sovereign IDR of 'BB-' and may move in line
with it.

An equalisation of TFS's ratings with those of Turkcell is unlikely
because TFS's business segment (finance) is less important to
Turkcell than its core telecom business.

A weakening of TFS's strategic importance or Turkcell's propensity
or ability to support TFS may result in a widening of the notching
from the parent's rating.

The rating actions are as follows:

Long Term Local and Foreign Currency IDRs: downgraded to 'B+' from
'BB', Outlook Negative

Short Term Local and Foreign Currency IDRs: affirmed at 'B'

Support Rating: downgraded to '4' from '3'

TURKIYE IHRACAT: Fitch Downgrades IDR to B+, Outlook Negative
-------------------------------------------------------------
Fitch Ratings has downgraded the support-driven Long-Term Foreign
Currency Issuer Default Ratings of 12 foreign-owned Turkish banks
and their subsidiaries, and two state-owned development banks,
Turkiye Ihracat Kredi Bankasi A.S. and Turkiye Kalkinma Bankasi
A.S.

The agency has also downgraded the Long-Term Local Currency IDRs of
22 banks and their subsidiaries. The Outlooks on all banks'
Long-Term IDRs are Negative. Viability Ratings are not affected as
a result of these rating actions.

The rating actions follow the downgrade of Turkey's sovereign
rating on July 12, 2019. In Fitch's view, the dismissal of Turkey's
central bank governor heightens doubts about the authorities'
tolerance for a period of sustained below-trend growth and
disinflation that Fitch considers consistent with a rebalancing and
stabilisation of the economy, and highlights a deterioration in
Turkey's institutional independence and economic policy coherence
and credibility.

The downgrades of the foreign-owned Turkish banks' LTFC IDRs to
'B+' from 'BB-' reflects increased risk of government intervention
in the banking sector in case of a marked deterioration in Turkey's
external finances. Fitch continues to view the risk of intervention
that would prevent banks from servicing their FC obligations to be
slightly higher than that of a sovereign default, and this result
in these ratings being capped one notch below the sovereign LTFC
IDR.

The one-notch downgrades of the support-driven LTFC IDRs of
state-owned development banks TKYB, to 'BB-', and Turk Eximbank, to
'B+', reflect Fitch's view of the increased risks to the ability of
the Turkish authorities to provide timely and sufficient support in
foreign currency (FC) given the increased potential for stress in
the country's external finances. Turk Eximbank is rated one notch
below Turkey, while TKYB is equalised with the sovereign rating due
to its small size and high, albeit reduced, proportion of Turkish
treasury-guaranteed funding.

The VRs of all banks under review, and of other Fitch-rated Turkish
banks, are unaffected following the sovereign downgrade. This
reflects its view that VRs are already in the 'b' category and
therefore capture higher systemic risk: the highest Turkish bank
VRs of 'b+' are still one notch below the sovereign ratings.

KEY RATING DRIVERS

IDRS, SUPPORT RATINGS AND SENIOR DEBT RATINGS OF FOREIGN-OWNED
BANKS

Turkiye Garanti Bankasi A.S. (Garanti BBVA; LTFC IDR B+/Negative)

Yapi ve Kredi Bankasi A.S. (YKB; LTFC IDR B+/Negative)

Turk Ekonomi Bankasi (TEB; LTFC IDR B+/Negative)

QNB Finansbank A.S. (LTFC IDR B+/Negative)

ING Bank A.S. (LTFC IDR B+/Negative)

Kuveyt Turk Katilim Bankasi (Kuveyt Turk; LTFC IDR B+/Negative)

Alternatifbank A.S. (Alternatifbank; LTFC IDR B+/Negative)

Turkiye Finans Katilim Bankasi (TFKB; LTFC IDR B+/Negative)

Burgan Bank A.S. (Burgan Bank Turkey; LTFC IDR B+/Negative)

ICBC Turkey Bank A.S. (LTFC IDR B+/Negative)

BankPozitif Kredi ve Kalkinma Bankasi (BankPozitif; LTFC IDR
B+/Negative)

Denizbank A.S. (LTFC IDR B+/Negative)

The foreign-owned banks' LTFC IDRs and FC senior debt ratings are
downgraded by one notch to 'B+', one notch below the sovereign LTFC
IDR. This reflects its view that in case of a marked deterioration
in Turkey's external finances, the risk of government intervention
in the banking sector would be higher than that of a sovereign
default.

In Fitch's view, Turkey's high external funding requirement creates
a significant incentive to retain market access and avoid capital
controls. Nevertheless, if there were a marked deterioration in
Turkey's external finances some form of intervention in the banking
system that might impede the banks' ability to service their FC
obligations would become more likely, in Fitch's view.

Nine foreign-owned banks now have FC IDRs and FC senior debt
ratings at the level of their VRs, but also underpinned by
shareholder support. The FC IDRs of Alternatifbank, Burgan Bank
Turkey and BankPozitif remain driven solely by shareholder support.
Fitch's view of support for all foreign-owned banks is based on
their strategic importance, to varying degrees, for their parents,
integration, roles within their respective groups and, for some,
common branding.

All foreign-owned banks' LT LC IDRs are also downgraded by one
notch. Their LT LC IDRs are one notch above their LTFC IDRs,
reflecting its view of a lower likelihood of government
intervention that would impede the banks' ability to service
obligations in local currency.

IDRs, SUPPORT RATINGS AND SENIOR DEBT RATINGS OF STATE-OWNED
COMMERCIAL BANKS AND DEVELOPMENT BANKS

T.C. Ziraat Bankasi A.S. (Ziraat; LTFC IDR B+/Negative)

Turkiye Halk Bankasi A.S. (Halk; LTFC IDR B+ /Negative)

Turkiye Vakiflar Bankasi A.S. (Vakifbank; LTFC IDR B+ /Negative)

Vakif Katilim Bankasi A.S. (Vakif Katilim; LTFC IDR B+/Negative)

Turkiye Sinai Kalkinma Bankasi A.S. (TSKB; LTFC IDR B+/Negative)

Turkiye Ihracat Kredi Bankasi A.S. (Turk Eximbank; LTFC IDR B+
/Negative)

Turkiye Kalkinma ve Yatirim Bankasi A.S. (TKYB; LTFC IDR
BB-/Negative)

TKYB's LTFC IDR has been downgraded by one notch to 'BB-' from
'BB'. The bank's ratings remain equalised with the sovereign,
reflecting its small size and still largely treasury-guaranteed
funding base.

Turk Eximbank's LTFC IDR has also been downgraded by one notch, to
'B+' from 'BB-'. The bank's ratings reflect Fitch's view of the
high propensity of the government to provide support given Turk
Eximbank's ownership, policy role and high level of state-related
funding. However, Turk Eximbank is rated one notch below the
sovereign due to its larger (than TKYB) balance sheet and volumes
of foreign funding and risks to the ability of the authorities to
provide support in FC.

The Support Rating Floors (SRFs) of the state-owned commercial
banks (Ziraat, Vakifbank, Halk, Vakif Katilim), and of privately
owned development bank TSKB, have been affirmed at 'B+' despite the
sovereign downgrade.

This reflects a degree of rating compression at lower rating
levels, and also considers the high government propensity to
support these banks given their majority state ownership (except
for TSKB), systemic importance (Ziraat, Vakifbank, Halk), policy
roles (Ziraat, Halk, TSKB), significant state-related funding,
state guarantees in the case of TSKB, and the recent record of
support. The one-notch difference between the sovereign rating and
those of these banks reflects the limited ability of the
authorities to provide support in FC.

The authorities have shown a strong commitment to support the state
banks, as indicated by capital increases in September 2018 and
April 2019.

The LTFC IDRs of Halk and Vakif Katilim have been affirmed
following the affirmation of their SRFs, which drive their LTFC
IDRs.

The LTLC IDRs of the state-owned commercial banks and the
development banks have been downgraded to 'BB-' and are equalised
with the sovereign rating, reflecting the stronger ability of the
sovereign to provide support in LC.

The Negative Outlooks on the banks' Long-Term IDRs mirror those on
the sovereign ratings. For Ziraat, Vakifbank and TSKB, which have
VRs at the level of their SRFs, the Outlooks on the LTFC IDRs also
reflect the potential for their VRs to be downgraded if there were
further deterioration in the operating environment or increases in
risk appetite that place greater-than-expected pressure on
financial metrics (Ziraat and Vakifbank only) .

LONG-TERM LOCAL CURRENCY IDRS AND SUPPORT RATING FLOORS OF AKBANK
AND ISBANK

Akbank TAS (LTFC IDR 'B+'/Negative)

Turkiye Is Bankasi (LTFC IDR 'B+'/Negative)

The LTLC IDRs of Akbank and Isbank have been downgraded to 'B+'
from 'BB-' and are now in line with their LTFC IDRs. The LTLC IDRs
are underpinned by potential state support and the downgrades
reflect the sovereign downgrade.

Both the banks' LTLC IDRs and LTFC IDRs are now in line with their
VRs. The Negative Outlooks on their IDRs reflect the potential for
further deterioration in the operating environment, which could
place greater pressure on the banks' financial metrics.

The affirmation of the 'B' SRFs of Akbank and Isbank, two notches
below the sovereign LTFC IDR (at the level of the domestic
systemically important bank (D-SIB) SRF for Turkish banks),
reflects their systemic importance, but also their private
ownership and the Turkish authorities' limited ability to provide
support in FC, if needed.

SUBORDINATED DEBT RATINGS

The subordinated notes ratings of YKB, Kuveyt Turk, Garanti and
Alternatifbank are notched down once from their IDRs and have been
downgraded by one notch in line with the downgrades of their anchor
ratings. The notching in each case includes one notch for loss
severity and zero notches for non-performance risk (relative to the
anchor ratings).

SUBSIDIARY RATINGS

Ak Yatirim (LTFC IDR 'B+' /Negative)

Ak Finansal Kiralama (LTFC IDR 'B+' /Negative)

Alternatif Finansal Kiralama AS (LTFC IDR 'B+'/Negative)

Deniz Finansal Kiralama (LTFC IDR 'B+'/Negative)

Joint-Stock Company Denizbank Moscow (LTFC IDR 'B+'/Negative)

Garanti Faktoring (LTFC IDR 'B+'/Negative)

Garanti Finansal Kiralama (LTFC IDR 'B+'/Negative)

Is Finansal Kiralama (LTFC IDR 'B+'/Negative)

QNB Finans Finansal Kiralama A.S. (LTFC IDR 'B+'/ Negative)

Yapi Kredi Finansal Kiralama (LTFC IDR 'B+'/ Negative)

Yapi Kredi Faktoring (LTFC IDR 'B+'/ Negative)

Yapi Kredi Yatirim Menkul Degerler (LTFC IDR 'B+'/Negative)

Ziraat Katilim Bankasi (LTFC IDR 'B+' /Negative)

Subsidiary ratings are equalised with those of parent banks,
reflecting their strategic importance to, and integration within,
their respective groups. The downgrades of the LT IDRs of the
subsidiaries of foreign-owned banks (Alternatifbank, Denizbank,
Garanti, QNB Finansbank and YKB), and of the LTLC IDRs of the
subsidiaries of Akbank, Isbank and Ziraat, mirror the rating
actions on their respective parents.

RATING SENSITIVITIES

FOREIGN-OWNED BANKS

The LT IDRs, Support Ratings and senior debt ratings of
foreign-owned banks could be downgraded if Fitch believes the risk
of government intervention in the banking sector has increased
materially. The Negative Outlooks on these banks reflect the
potential for a further deterioration in Turkey's external
finances, which could increase the risk of such intervention. A
sovereign downgrade would be likely to lead to downgrades of these
banks.

STATE-OWNED COMMERCIAL AND DEVELOPMENT BANKS

The IDRs and senior debt ratings of Ziraat, Halk, Vakifbank, Vakif
Katilim, TSKB, Turk Eximbank and TKYB could be downgraded if Fitch
concludes that the ability of the sovereign to provide support has
weakened. However, the ratings of Ziraat, Vakifbank and TSKB would
only be downgraded if their 'b+' VRs were also lowered.

AKBANK AND ISBANK

The LTFC IDRs and senior debt ratings of Akbank and Isbank are
sensitive to any changes to their VRs. The banks' LTLC IDRs are
underpinned by state support at the 'B+' level, and so would only
be downgraded if both its assessment of support weakened and the
VRs were downgraded.

SUBORDINATED DEBT RATINGS

Subordinated debt ratings are primarily sensitive to changes in
banks' anchor ratings, namely the Long-Term IDRs for YKB, Garanti,
Kuveyt Turk and Alternatifbank.

These ratings are also sensitive to a change in notching from the
anchor ratings due to a revision in Fitch's assessment of the
probability of the notes' non-performance risk or of loss severity
in case of non-performance.

SUBSIDIARY RATINGS

The ratings of these entities are sensitive to changes in the
Long-Term IDRs of their parents.

TURKIYE PETROL: Fitch Downgrades LT IDR to BB-, Outlook Negative
----------------------------------------------------------------
Fitch Ratings has downgraded Turkiye Petrol Rafinerileri A.S.'s
Long-Term Issuer Default Rating (IDR) to 'BB-' from 'BB+' following
a similar action on the Turkish sovereign ratings. The Outlook is
Negative, in line with that on Turkey's sovereign IDR
(BB-/Negative).

KEY RATING DRIVERS

FX Risk Managed: Tupras's debt and costs are predominantly in US
dollars, while the majority of sales (86%) are denominated in
Turkish lira. The resulting FX risks are mitigated by the natural
hedge presented by the company's US dollar-linked inventories for
crude oil and oil products and by the company's hedging programme
with several major domestic and international banks for commodity
prices and crack spreads. Any negative effects of Tupras's leverage
ratios should be temporary and are most likely to occur if there is
significant lira weakening around the year-end. To further mitigate
the effects of FX volatility Tupras maintains ample liquidity in US
dollar and euro-denominated deposits.

Business Fundamentals Support Profitability: Tupras's operations
benefit from the company's leadership position in an
under-supplied, growing Turkish refined product market, combined
with the company's ability to access and process cheaper, heavier
and sour crudes from a number of suppliers. These advantages
translated into a 2018 reported net refining margin of USD9.3/bbl,
double the Mediterranean complex margin, despite sharply higher oil
price and lira volatility. The company generated TRY5.6 billion of
Fitch-adjusted funds from operations (FFO) in the same year, up 7%
yoy.

Rating in Line with Country Ceiling: Domestic operations and a
policy of holding cash in Turkish banks cap the rating at Turkey's
Country Ceiling (BB-), in line with its Corporates Exceeding the
Country Ceiling Rating Criteria. Sovereign credit factors, such as
a weaker lira, lower growth and weaker domestic demand have had a
limited impact on Tupras's results so far. A material, prolonged
economic slowdown could have negative consequences on industrial
activity and depress demand for two of Tupras's major products -
jet fuel and diesel. However, demand for middle distillates
continues to grow, up 10.5% for jet fuel and 3.5% for diesel in
2018.

IMO 2020: Tupras is well-positioned to benefit from the
introduction of the IMO 2020 regulation, which will limit the
sulphur content in marine fuels to 0.5%, from 3.5% currently. Fitch
believes the reduction will happen at the point of production,
rather than consumption, with ship owners switching to compliant
fuels, rather than installing scrubbers. This should drive up
prices and margins for compliant fuels, such as marine gasoil, at
least in the medium term, and will benefit complex refiners that
have the capacity to produce them, such as Tupras, which has a high
middle distillate yield (52% in 2018) and low fuel oil output (7%
in 2018).

STAR Commissioning Rating Neutral: Construction of the STAR
refinery, operated by competitor SOCAR (State Oil Company of the
Azerbaijan Republic, BB+/Stable) was completed in October 2018,
with a full ramp-up expected by mid-2019. Fitch believes the
commissioning will be rating-neutral for Tupras with no material
impact on the company's results forecast. The Turkish market for
diesel, Tupras's key product, will remain in deficit, so average
realised product prices should not be adversely affected.

Moreover, Tupras will remain in a relatively stronger competitive
position given its wider geographical footprint, with its four
refineries located in different regions of the country, and a more
developed transportation, storage and import infrastructure than
SOCAR.

High Complexity, Low Integration: Tupras maintains a leading
position in the Turkish oil refining market and operates some of
the most complex set of refineries in EMEA. Tupras remains focused
on refining and has little vertical integration compared with MOL
and PKN, which are diversified into upstream, petrochemicals and
retail. Tupras's 40% stake in Opet, Turkey's second-largest fuel
retailer partly mitigates this lack of integration, which increases
Tupras's earnings volatility through the cycle.

National Scale Recalibrated: Fitch is recalibrating its Turkish
National Rating scale. This is to better reflect the changes in the
relative creditworthiness among Turkish issuers that have taken
place since the downgrade of the country's long-term sovereign
ratings to 'BB-' on July 12, 2019. The recalibration may result in
rating actions on some issuers with Turkish national scale ratings,
including those of Tupras, after the recalibration exercise is
finalised, expected by early August.

DERIVATION SUMMARY

Tupras's closest EMEA peers are Polski Koncern Naftowy ORLEN S.A.
(PKN, BBB-/Stable) and MOL Hungarian Oil and Gas Company
(BBB-/Stable). PKN's 689 mbbl/d downstream capacity exceeds
Tupras's (564 mbbl/d), and the gap is expected to widen to around
350 mbbl/d should PKN's planned acquisition of Grupa LOTOS S.A.
(Lotos) go ahead. Moreover, PKN benefits from an integrated
petrochemical segment, a large retail network and some exposure to
upstream activities.

MOL's downstream capacity (417 mbbl/d) is smaller than Tupras's,
but the company's credit profile is stronger due to an integrated
business profile with a 100 mbbl/d of upstream production that
provides countercyclical cash flows. Unlikely MOL and PKN, Tupras
operates in a deficit fuels market, while the coastal location of
its two principal refineries allows it to actively manage crude
feedstock supplies. The combination of these factors contributes to
higher and more stable downstream margins. Tupras's leverage is
higher than that of MOL and PKN due to high historical and
projected dividends, but the company has lower capital intensity
than its peers.

KEY ASSUMPTIONS

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

  - USD/TRY FX of 5.9 in 2019, 6 in 2020, 6.1 in 2021 and 6.3
thereafter

  - Benchmark refining margin of USD4/bbl in 2019, rising to
4.5/bbl in 2020 and remaining stable thereafter

  - Capital intensity of around 1.6% over the next four years

  - Dividend payout ratio of 90% of net IFRS profits

RATING SENSITIVITIES

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

  - Positive rating action on Tupras would be conditional on
similar action on Turkey sovereign rating and/or a corresponding
stronger assessment of Turkey's Country Ceiling

  - FFO-adjusted net leverage consistently below 3.5x

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

  - FFO-adjusted net leverage consistently above 4.0x

  - Consistently negative FCF

  - Substantially higher capex or dividends leading to
higher-than-expected leverage

  - A downgrade of Turkey's sovereign rating and a corresponding
weaker assessment of Turkey's Country Ceiling, or a worsening
operating environment in the country

LIQUIDITY AND DEBT STRUCTURE

As of end-2018 reported cash and cash equivalents of TRY4.6 billion
(net of restricted cash) covered short-term debt of TRY4.1 billion.
However, Tupras's liquidity appears weaker when short-term
maturities are adjusted for TRY2.3 billion of factoring, which
brings the total short-term debt to TRY6.4 billion. Combined with
Tupras's debt maturity profile over the next 24 months, the
company's liquidity is therefore contingent on continued access to
domestic banks. This is not uncommon among Turkish corporates but
exposes the company to systemic liquidity risk. Positively, Fitch
projects positive FCF generation over the next four years, which
combined with the company's track record of access to domestic and
international banks, should ensure successful continued
refinancing.

Tupras maintains large deposits with related-party bank Yapi ve
Kredi Bankasi. These deposits amounted to TRY2.4 billion (52% of
total) in 2018 and TRY4.9 billion (65% of total) in 2017.



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

ODESSA CITY: Fitch Affirms B- LT IDRs, Outlook Stable
-----------------------------------------------------
Fitch Ratings has affirmed the Ukrainian City of Odessa's Long-Term
Foreign- and Local-Currency Issuer Default Ratings at 'B-'. The
Outlooks are Stable.

The affirmation reflects Fitch's unchanged view that the city is
constrained by the sovereign rating of Ukraine (B-/Stable). Fitch
also assesses the city's standalone credit profile (SCP) at 'bb-',
based on the combination of Odessa's vulnerable risk profile and a
'aaa' debt sustainability assessment.

The affirmation also reflects Fitch's expectations that the city's
sound operating results and debt metrics will be maintained over
the medium term. This is despite the projected moderate growth of
the city's net adjusted debt following investments.

Odessa is the third-largest city in Ukraine (1 million inhabitants)
and has its key port in the Black Sea. The city is an important
administrative, industrial, educational and cultural centre. Its
economy is diversified across services and manufacturing. Fitch
estimates the Ukrainian economy to grow 2.9% in 2019, supporting
the city's economic prospects and tax revenue growth. However, the
wealth indicators of Ukraine and Odessa are weak by international
comparison, with a national GDP per capita well below the EU
average.

KEY RATING DRIVERS

Revenue Robustness Assessed as Weaker

Odessa's revenue framework is unstable amid constant changes to tax
and budgetary regulation. The city's operating revenue is dominated
by taxes, which are all collected by the national tax office, and
represented on average 55% in 2014-2018 (58% in 2018). Transfers
from the central government represented on average 36% of the
city's revenue. The city's operating margin has historically been
sound, at over 20% in 2015-2018. However, ongoing amendments to
national fiscal regulations and dependence on a weak counterparty
for a material portion of the city's revenue drive the "Weaker"
assessment of the robustness of Odessa's revenue framework.

Revenue Adjustability Assessed as Weaker

Fitch assesses Odessa's ability to generate additional revenue in
response to possible economic downturns as limited, similar to
other Fitch-rated Ukrainian cities. Although the city has
rate-setting power over a number of local taxes, which accounted
for 18% of the city's operating revenue in 2018, the ability to
generate additional revenue is limited. Any potential increase in
local tax rates is constrained by both legally set ceilings and the
relatively low income of the city's residents.

Expenditure Sustainability Assessed as Weaker

The city's spending dynamic during the last five years has been
influenced by high, albeit easing, inflation and reallocation of
spending responsibilities. Odessa's main spending responsibilities
are in education and healthcare, which are of a counter-cyclical
nature. However, the city is only responsible for the maintenance
of schools and healthcare institutions while the salaries of
teachers and healthcare personnel are financed by transfers from
the national budget. Further shifts of responsibilities to
municipalities are probable as has been the case with the recent
transfer of certain social benefits. Therefore Odessa's expenditure
framework is characterised as fragile, leading to a "Weaker"
assessment of its sustainability.

Expenditure Adjustability Assessed as Weaker

Fitch assesses the city's ability to reduce spending in response to
shrinking revenue as weak, similar to other Fitch-rated Ukrainian
cities. This is evidenced by a material proportion of inflexible
items in the city's operating expenditure and overall low per
capita spending compared with international peers. Although the
city's capital expenditure averaged 26% of total spending in
2015-2018, it does not provide the city with much expenditure
flexibility in light of the city's high overall infrastructure
needs amid serious infrastructure underfinancing during a prolonged
period of time.

Liabilities and Liquidity Robustness Assessed as Weaker

Ukraine's framework for debt and liquidity management is weak. The
national capital market is underdeveloped while the unfavourable
credit history of the sovereign exerts further downward pressure.
The city resumed borrowing in 2017 and entered into medium-term
loans with local banks and the Nordic Environment Finance
Corporation (NEFCO). Odessa's debt portfolio (2018: UAH1 billion)
is solely in local currency and has fixed interest rates.
Repayments are smooth (quarterly or semi-annually), reducing
refinancing risk. For 2019, the city contracted a further UAH1
billion five-year credit line with a local bank.

Odessa supports investments made through the municipal companies,
taking advantage of the loans from the international institutions
such as EBRD/World Bank. The loans, granted in euros and US dollars
are guaranteed by the city. In 2018, the value of these guarantees
totalled UAH1.1 billion and may rise further if the city's
transportation company starts to construct the 'North-South' tram
route. Fitch has decided to include the guaranteed debt of the
city's companies into "Other Fitch-classified debt" and thus in net
adjusted debt of the city as Odessa supports the repayment of debt
(including FX risk) through its budget (capital injections to
companies).

Liabilities and Liquidity Flexibility Assessed as Weaker

Similar to other Ukrainian cities, Odessa's available liquidity is
restricted to the city's own cash reserves and the loans provided
by local banks ('b-' rated counterparties), which justifies a
"Weaker" assessment for the liquidity profile. There are no
emergency bail-out mechanisms from the national government in place
due to the fragile capacity and hence weak public finance position
of the sovereign, which is dependent on IMF funding for the smooth
repayment of its external debt.

Debt Sustainability Assessment: 'aaa'

Under Fitch's rating case Odessa's debt payback ratio (net adjusted
risk-to-operating balance) will remain strong and far below five
years over the next five years, which underpins the city's debt
sustainability assessment of 'aaa'. The fiscal debt burden (net
adjusted risk-to-operating revenue) also supports a strong debt
sustainability assessment of 'aaa'.

According to Fitch's rating case, the payback ratio will gradually
rise to around 2x in 2023 from close to 1x in 2018 as debt
increases. The fiscal debt burden will double to about 40% in 2023
(2018: 18%). The average actual debt service coverage ratio
(ADSCR), which is currently very strong (2018: 7.6x), may weaken in
the projection period due to higher repayments, but should remain
sound at about 2x under Fitch's rating case. The ADSCR reflects the
nature of the Ukrainian capital market, which offers short- to
medium-term maturities only.

RATING DERIVATION

A combination of a 'Vulnerable' risk profile assessment and a 'aaa'
debt sustainability leads to an overall SCP assessment in the 'bb'
category. Odessa's SCP is finally assessed at 'bb-', reflecting a
slightly weaker ADSCR and an operating balance-to-debt service,
including short-term debt maturities), that falls into 'aa'
category, as well as comparison with peers. The IDR is constrained
at the sovereign's 'B-' IDR, reflecting a lack of fiscal autonomy.

KEY ASSUMPTIONS

Fitch's key assumptions within its rating case for 2019-2023
include:

  - Nominal growth of operating revenue of 13% in 2019 and at 7%
CAGR (in line with expected inflation) for 2020-2023;

  - Nominal growth of operating expenditure above inflation at CAGR
of 8%;

  - Capex about 20% of total expenditure, below the four-year
historical average;

  - Cost of debt on average at 20%; and

  - Net adjusted debt growing to UAH6 billion at end-2023 (2018:
UAH1.9 billion) due to investments.



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

CARLAUREN GROUP: Financial Difficulties Prompt Administration
-------------------------------------------------------------
William Telford at PlymouthLive reports that Carlauren Group, the
company which owns the Grade II listed wedding venue Langdon Court
Hotel, has gone into administration.

The Somerset-based company announced to staff on July 24 that
administrators had been called in, PlymouthLive relates.

No further details were given and it is understood chief operating
officer Andrew Jamieson is to make a statement within the next 24
hours, PlymouthLive notes.

According to PlymouthLive, the company is understood to be in
financial difficulties for some time now and a petition to wind up
an associated company, CHF 3 Limited which trades from the same
address as Carlauren Group, has been presented by a creditor at the
High Court in Manchester.


SIRIUS MINERALS: Fitch Rates Proposed $500MM Bond Issue 'B(EXP)'
----------------------------------------------------------------
Fitch Ratings has assigned Sirius Minerals Plc's proposed USD500
million high yield bond issue an expected rating of 'B(EXP)' with a
Stable Outlook.

The final rating is contingent on the receipt of final documents
materially conforming to information already received.

The expected rating reflects the mining project's complex and
large-scale construction works, the lack of fixed-price
date-certain construction contracts and a reliance on key
contractors due to the application of bespoke technology. During
construction the high level of completion and financing risk
results in considerable uncertainty regarding the project's
financial profile during the operational phase. Its financial
analysis of the project reflects its economic viability but also
its vulnerability to increased costs and construction delays and
these factors ultimately result in the expected rating of
'B(EXP)'.

Sirius is developing a polyhalite mine in North Yorkshire,
England.

KEY RATING DRIVERS

Large Scale, Bespoke Construction Project: Completion Risk -
Weaker:

Sirius' polyhalite mine development project is large-scale with an
estimated capex of USD3.5 billion, a completion timeline of over
four years and a number of complex technical solutions, which are
unique in combination. The project's infrastructure includes two
deep mine shafts reaching 1.6km underground and the construction of
a 37km long underground tunnel that will connect the mine shafts to
the material processing facility at Teesside near the Redcar Bulk
Terminal (RBT), where the product will be exported.

There are four main construction contracts and a number of smaller
contracts forming the construction package, all of which Sirius
self-manages, including the interface risk between them. Fitch
views two contracts as central to the project: DMC Mining's
contract for the construction of deep mine shafts and Strabag's
contract for the construction and fit-out of the mineral transfer
tunnel. Together these account for roughly 60% of the total capex
estimate and Fitch recognises that both contractors are highly
experienced in their sectors. However, DMC Mining's contract is
based on a target price so cost escalation is possible while
Strabag's contract has fixed unit rates, which also expose the
project to cost increases.

Due to the bespoke nature of the project with no cost benchmarks
and lack of fixed-price contracts, there is a risk of cost
escalation beyond the estimated contingency of USD456 million, as
well as a delay risk beyond the six months recommended by the
lenders' technical advisor as a downside sensitivity. If realised,
this could result in further funding being required to complete
construction.

Abundant Mineral Reserves: Supply Risk - Midrange:

Sirius has carried out geological testing to reach 'probable'
mineral reserve status of 290 million tonnes (mt) of polyhalite,
which should cover the majority of the initial 25-year mine plans
production. 'Probable' reserve status infers sufficient confidence
in the estimate for mine development as assessed by Sirius'
independent advisors. Despite this, some supply risk is still
present for the project regarding the grade of polyhalite as the
reserves have not yet reached 'proven' status. However, extensive
geological studies provide considerable certainty that the resource
is there to be mined. These factors, along with the successful
mining of polyhalite at the nearby Boulby mine, make it reasonable
to deem the resource as abundant, therefore leading to a "Midrange"
assessment.

In addition, its breakeven analysis indicates that only 32% of the
"probable" reserves would be needed to reach a project life
coverage ratio (PLCR) of 1.0x at completion, further supporting its
"Midrange" assessment.

Market-Driven Product Pricing: Revenue Risk - Weaker:

To date, Sirius has entered into 11 take-or-pay offtake agreements
to sell polyhalite from the Redcar Bulk Terminal (RBT). Offtake
commitments start from the year of completion, ramping up over five
to seven years to cover around 80% of the intended 13mtpa
production. Offtakers are diversified agricultural companies in the
US, China, Latin America, Southeast Asia and Middle East. Only one
(ADM) is rated by Fitch at 'A'/Stable.

The signed offtake agreements attest to the commercial proposition
of the project and confirm market acceptance of polyhalite as a
premium fertiliser product. This is further supported by the nearby
competitor Boulby mine (part of Israel Chemicals, BBB-/Positive)
selling a similar product for over three years, although in much
smaller volumes.

Pricing under the offtake agreements is based on market prices for
the closest substitute fertiliser products and adjusted for the
nutrient content of polyhalite. The overall assessment of revenue
risk is limited to "Weaker" due to market-driven pricing and mostly
weaker or unrated counterparties.

Self-operated and Unproven Cost Budget: Operation Risk - Weaker:
The project is unique in scale as only one other mine worldwide
commercially produces polyhalite. The unique nature of the project
increases the uncertainty in the production and operational plan:
while the techniques intended to be used are all proven
individually, their application to polyhalite mining and
combination is bespoke and there are no directly comparable
benchmarks.

Sirius intends to operate the mine and associated infrastructure
themselves. Although the company has an established in-house team
and made operating cost estimates supported by the technical
advisor, in its view the operating cost profile remains unproven
and will only be established once the project has completed the
production ramp-up and reached a steady state of operations.

Significant Refinancing Risk: Debt Structure - Weaker:
Sirius plans to issue a USD500 million bullet bond (7.5 year
maturity) and obtain a USD2.5 billion revolving credit facility
(RCF) with a seven-year tenor.

The RCF will contain a security demand feature where Sirius will be
obliged to issue a bond each time the outstanding RCF balance
reaches USD500 million and use the proceeds to pay off the RCF
balance. After each successful security demand payment, the RCF
commitment will reduce by 60% of the issued securities demand
amount. This mechanism makes available up to USD3.9 billion under
the RCF if at least USD3.5 billion is issued via securities
demands. If a securities demand is not met within 90 days, the RCF
interest rate increases to be in line with the interest rate of the
longest tenor outstanding bond and then by another 50bp every 90
days thereafter.

Both the USD500 million bond and the RCF will be senior and will
rank pari passu with each other. There will be no amortisation of
senior debt, apart from the planned cash sweep of the outstanding
RCF balance once the project reaches completion. Debt will be
issued in US dollars, reflecting the currency of revenues and the
finance documentation will require the construction costs (which
are mostly in sterling) to be hedged at financial close. However,
this does not fully eliminate foreign currency risk during
construction as any unplanned capital costs may be exposed to
currency fluctuations.

The "Weaker" assessment of debt structure is driven by significant
refinancing risk and a weak covenant package for both senior debt
instruments as well as the interest rate step-up mechanism of the
RCF, which further exposes the project to refinancing risk.

Financial Profile:

The Fitch base case mostly follows management's and lenders'
assumptions including a P65 capex contingency, six-month
construction delay sensitivity and uses the lenders' market
advisor's base case price forecasts. In this scenario the project
exhibits a minimum interest coverage ratio of 1.8x completion
leverage (gross senior debt/EBITDA) of 5.4x. As the debt is
non-amortising, Fitch also considered the PLCR at completion as an
indication of the project's capacity to repay the debt, assuming a
25-year mine life. The PLCR under Fitch base case is 3.2x, which
underscores the strong economics of the project after construction
is completed.

Under the Fitch rating case, a slower production ramp-up profile is
applied along with a mid-point between the lenders' market
advisor's base-case and low-case price forecasts, a 12-month
construction delay, including P90 capex contingency, and a stressed
refinancing rate of 14%. This leads to a funding shortfall and
initial interest coverage ratio below 1.0x in the first year after
construction, highlighting the vulnerability of the project to
further delays and heightened refinancing costs. The PLCR is lower
in the Fitch rating case at 1.9x.

Fitch runs breakeven scenarios to a PLCR of 1.0x at completion to
test the project's capacity to pay off the outstanding debt.
Polyhalite prices can be 46% lower than Fitch base case, while the
maximum production rate can drop by 55%. These breakeven results
support its view that the project can withstand a reasonable level
of volatility in pricing and production levels.

PEER GROUP

Iowa Fertilizer Company (IFCo, B-/Positive) is a nitrogen
fertiliser project in the US that uses established technology and
sells its products to farmers and distributors at market prices. It
has now reached steady-state operations although it has experienced
some ramp-up issues. IFCO does not tap into natural resources but
uses pipeline natural gas in an industrial process to produce
nitrogen. Fitch base case average debt service coverage ratio
(DSCR) is 3.1x while Fitch rating case average DSCR is 1.5x with a
minimum of 1x, positioning the rating in the 'B' category.

Fitch rates a number of corporate fertiliser companies, with
ratings ranging from 'BBB' to 'B'. Nitrogenmuvek Zrt (IDR B-/
Stable) has a single-site and small-scale operations, with a single
product (nitrogen fertiliser) representing over 80% of its output.
The company's lack of diversification and high leverage position
the rating in the 'B' category.

RATING SENSITIVITIES

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

  - A prolonged construction delay and cost over-run

  - Difficulty in raising debt on the capital markets that is
required for construction completion

  - Non-performance of key construction counterparties

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

  - Proven ability to successfully produce and market polyhalite

Criteria Variation

A variation has been applied to Fitch's criteria regarding the
requirement to have a rating on major construction contractors for
the completion risk analysis. Given the project's low rating level
and contractual structure, the lack of ratings of the construction
counterparties was deemed acceptable.

TRANSACTION SUMMARY

Sirius is raising USD500 million as part of its stage 2 financing
which will ensure the project is fully funded to complete
construction. The US dollar high yield bond issue is a requirement
to unlock the commitment of a USD2,500 million RCF.

Fitch Cases

The Fitch base case scenario applies a six-month delay to first
polyhalite production, limits the mine to 25-years of production
and 278mt of polyhalite output and reduces the ramp-up profile to
4.5mtpa in 2024, 8.5mtpa in 2025 and 10mtpa in 2026 before reaching
13mtpa in 2028. The Fitch base case also only recognises the
offtake contract with ADM and recognises all other revenue as
uncontracted at the prices forecast by the lenders market advisor.
Along with this a 15% operating expenditure stress and P65 capex is
applied. This leads to a PLCR, interest coverage ratio (ICR) and
gross debt/EBITDA at completion of 3.2x, 1.8x and 5.4x
respectively.

The Fitch rating case applies further stresses to the Fitch base
case, including a slower ramp-up profile resulting in 2Mtpa in
2024, 5.7mtpa in 2025, 7.2mtpa in 2026, 10mtpa in 2027 and 13mtpa
in 2029. Fitch also applies a lower price forecast that uses the
median of the lenders market advisors base and low price forecasts,
a 25% stress on operating expenditure, a 12-month construction
delay, P90 capex, 1% Libor stress and a 14% coupon rate for future
issuance. This leads to a PLCR, ICR and gross debt/EBITDA at
completion of 1.9x, 0.9x and 7.3x respectively.

Asset Description

Polyhalite is a naturally occurring mineral comprising potassium,
calcium, sulphur and magnesium: four of the six macro-nutrients
that are essential for plant growth. The polyhalite will be mined
and processed by Sirius to produce a granulated fertiliser product
that will be sold under the tradename POLY4.

The various components of the project are spread across a wide area
from the main mine site located near Whitby to the
minerals-handling and port-loading facilities located on Teesside.
The project is about two years in construction and currently on
schedule. Construction is contracted to two main contractors:
Strabag and DMC Mining, with several additional contracts and a
large share of own works in the construction budget. Total capital
cost to complete construction is estimated at USD3.5 billion and
the planned capacity is initially 10mtpa with plans to increase to
13mtpa and then 20mtpa in the longer term.

Sirius plans to start first production in 2022. The company has
signed a number of offtake agreements with various international
agricultural companies, with contracted volumes increasing up to
10.25mtpa from 2023 to 2033. Only one of the 11 off-takers is a
rated counterparty (ADM) whose offtake volumes ramp up to reach
1.5mtpa, 15% of initial capacity.

STAGECARRIAGE: Goes Into Administration, X8 Service Affected
------------------------------------------------------------
Jim Scott at The Northern Echo reports that the future of "vital"
bus services is uncertain as a North-East bus firm folded on July
22.

Middlesbrough-based Stagecarriage, which ran service buses and
private coach hire across Teesside, reportedly ceased trading on
July 22, The Northern Echo relates.

The firm also operated the "well-used" X8 service, which was seen
as a "vital link" for residents in rural parts of the borough, The
Northern Echo discloses.

According to The Northern Echo, in a letter to the Tees Valley
Mayor Ben Houchen, the Labour MP for Stockton North Alex Cunningham
raised his concern over the cancellation of the X8 service, calling
on Mr. Houchen to step in.

Councillor Mike Smith, Stockton-on-Tees Borough Council's cabinet
member for environment and transport, said it was now approaching
existing operators to see whether or not the service could be
revived, The Northern Echo notes.

"We are sorry to hear Stagecarriage have gone into administration
and they have confirmed that the X8 service will no longer be
operating," The Northern Echo quotes Mr. Smith as saying.  "We're
approaching other bus operators to gauge their interest in taking
the service on."

It is currently unclear how many employees have been affected by
the company's closure, The Northern Echo notes.


WESTON ELECTRICAL: Enters Administration, 17 Jobs Affected
----------------------------------------------------------
Hannah Baker at BristolLive reports that Weston Electrical Services
has gone into administration and 17 workers have lost their jobs.

According to BristolLive, the company blamed the loss of a key
contract earlier in 2019 for "severe" cash-flow problems and
"unfavourable" contract terms for a period of difficult trading.

Business advisory firm FRP Advisory has appointed joint
administrators, Andrew Sheridan and Geoff Rowley, to manage the
winding up of the company, BristolLive relays, citing Business
Live.


[*] UK: Number of Company Insolvencies Down in 2nd Quarter 2019
---------------------------------------------------------------
Pat Sweet at Accountancy Daily reports that despite a number of
high profile insolvencies hitting the headlines, the number of
companies entering administration in England and Wales fell during
the second quarter of this year.

KPMG, which conducted the analysis, said the decrease in
insolvencies could be a temporary effect caused by pre-Brexit
uncertainty, Accountancy Daily relates.

According to Accountancy Daily, the firm's study of notices in the
London Gazette shows that a total of 310 companies went into
administration between April and June 2019, compared with 361 in
the previous quarter--a fall of 14%.

Nevertheless, activity across the quarter was broadly on a par with
the 303 companies that went into administration during the same
period last year, Accountancy Daily notes.

While high street names such as Bathstore and Select entered into
insolvency, the number of retailers going into administration
remained relatively flat, falling from 28 in Q1 2019 to 26 in Q2,
Accountancy Daily states.

It was a similar picture for restaurants, pubs and clubs, which
collectively saw 14 administrations over the quarter, including
those of the Jamie Oliver Restaurant Group and the Red's True
Barbecue chain, Accountancy Daily relays.  This compared to 12 seen
in Q1 2019, according to Accountancy Daily.

However, there was a slightly more pronounced increase in the
number of operators across the wider food and drink sector entering
into administration over the quarter--up from 13 in Q1 to 18 in Q2,
Accountancy Daily discloses.



                           *********


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

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

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

This material is copyrighted and any commercial use, resale or
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Information contained herein is obtained from sources believed to
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The TCR Europe subscription rate is US$775 per half-year,
delivered via e-mail.  Additional e-mail subscriptions for
members of the same firm for the term of the initial subscription
or balance thereof are US$25 each.  For subscription information,
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