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

                          E U R O P E

          Friday, January 24, 2020, Vol. 21, No. 18

                           Headlines



B O S N I A   A N D   H E R Z E G O V I N A

SECERANA: Reduces Asset Price to BAM9-Mil., Jan. 27 Auction Set


C R O A T I A

ULJANIK: Creditors Opt to Commence Liquidation Process


F R A N C E

BANIJAY GROUP: Moody's Lowers CFR to B2, Outlook Stable
BANIJAY GROUP: S&P Retains 'B+' ICR on CreditWatch Negative
COOKIE ACQUISITION: S&P Assigns Prelim. 'B' ICR, Outlook Stable
COOKIE INTERMEDIATE: Moody's Assigns 'B3' CFR, Outlook Stable
SISAHO INT'L: Moody's Alters Outlook on B2 CFR to Negative

SOCIETE GENERALE: S&P Raises 2014-104 Notes Rating to 'B+p'


G E R M A N Y

TECHEM VERWALTUNGSGESELLSCHAFT: S&P Rates Sr. Secured Notes 'B+'


N E T H E R L A N D S

UNITED GROUP: S&P Affirms 'B' Issuer Credit Rating, Outlook Stable


R U S S I A

EVRAZ PLC: Fitch Affirms BB+ Issuer Default Rating, Outlook Stable
LENTA LIMITED: Moody's Withdraws Ba3 CFR for Business Reasons
PAO TMK: Moody's Affirms B1 CFR & Alters Outlook to Positive
SOVCOM CAPITAL: Fitch Assigns B(EXP) Rating on Perpetual AT1 Notes
UC RUSAL: Fitch Alters Outlook on BB- LongTerm IDR to Negative

UNITED CONFECTIONERS: Fitch Affirms B LongTerm IDR, Outlook Stable


S E R B I A

AGROKOR DD: Mercator Refinances Serbian Unit's Debt with AIK
JUGOREMEDIJA: Swiss-Based Fund Files Attractive Offer for Assets


S P A I N

AERNNOVA AEROSPACE: Fitch Assigns 'B+(EXP)' LT IDR, Outlook Stable
DEOLEO SA: S&P Lowers ICR to 'SD' on Agreed Debt Restructuring
LECTA SA: Moody's Affirms Caa3 CFR, Outlook Negative
MEIF 5 ARENA: S&P Affirms 'BB' ICR on Proposed Refinancing


U N I T E D   K I N G D O M

73 RETAIL: Files for CVA, Timberland to Close 12 UK Stores
HANDMADE BURGER: Enters Administration, 283 Jobs Affected
MACCLESFIELD FOOTBALL CLUB: Judge Adjourns Winding Up Petition
VICTORIA PLC: S&P Retains BB- on Sec. Notes After Proposed Tap


X X X X X X X X

[*] BOOK REVIEW: Hospitals, Health and People

                           - - - - -


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B O S N I A   A N D   H E R Z E G O V I N A
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SECERANA: Reduces Asset Price to BAM9-Mil., Jan. 27 Auction Set
---------------------------------------------------------------
SeeNews reports that the bankruptcy management of Bosnian sugar
mill Secerana has lowered the price for the company's assets to
BAM9.0 million (US$5.4 million/EUR4.9 million) from BAM9.5 million
in the last unsuccessful auction held in November.

The new auction will take place on Jan. 27, SeeNews relays, citing
news wire Indikator.ba.

According to SeeNews, the news outlet noted that investors from
Turkey, Vietnam, Serbia, as well as Bosnian firm Pavgord have shown
interest in Secerana's assets but none of them has managed to match
the ask price for its assets and reach an agreement with its
creditors.

Indikator.ba said Secerana's assets were first offered for sale in
2017 for BAM15 million and since then the price has been cut by
BAM500,000 in each of the subsequent attempts to sell them, SeeNews
relates.

The company went bankrupt some four years ago over an outstanding
debt of BAM16.5 million, SeeNews discloses.

Secerana is based in Bijeljina.




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C R O A T I A
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ULJANIK: Creditors Opt to Commence Liquidation Process
------------------------------------------------------
SeeNews reports that the creditors of financially troubled
shipbuilding group Uljanik have decided to send it into the process
of liquidation due to a lack of conditions for restarting its
production.

According to SeeNews, the government Croatian said in a statement
the decision was taken by the group's creditors at a hearing in the
commercial court in Pazin on Jan. 22.

The statement reads bankruptcy trustee, Marija Ruzic, has
established that there is no basis for drafting a bankruptcy plan
for the company that could lead it out of the crisis and its
liquidation is imminent, because the value of its assets is HRK1.75
billion (US$261 million/EUR235 million) while liabilities total
HRK5.0 billion and the group is generating no business revenue,
SeeNews relates.

At the same time, Ms. Ruzic has proposed to delay the sale of part
of Uljanik Group's assets, which could be transferred to a newly
registered company, Uljanik Brodogradnja 1856, SeeNews discloses.
The latter could also obtain Uljanik's concession rights on 666,000
sq m of maritime area and try to renew the shipbuilding activities,
according to SeeNews.  Ms. Ruzic was quoted as saying for the
purpose, the new company will also need a financial support by the
government, SeeNews notes.

This plan has been supported by the creditors and now needs the
approval of the government, Uljanik's largest creditor, SeeNews
states.  The government noted that it needs to take a final
decision on any such move after considering the risks to the state
budget, as well as its compliance with EU state aid rules,
according to SeeNews.

In late 2018, the government had to pay state guarantees worth
HRK2.54 billion on behalf of Uljanik, after the group failed to
meet contractual obligations, SeeNews recounts.

                       About Uljanik Group

Uljanik Group is a shipbuilding company and shipyard in Pula,
Croatia.  It comprises of Uljanik Shipyard and 3.Maj.  It employed
about 1,000 people at May 2019.

On May 13, 2019, the commercial court in Pazin launched bankruptcy
proceedings against the Uljanik Group. Marija Ruzic is named as
bankruptcy trustee.

The Company's accounts have been frozen for more than 200 days by
the time if filed for bankruptcy. Uljanik encountered financial
troubles in the past years due to a global crisis in the
shipbuilding sector. The Croatian government also declined to
support a restructuring of the Company in early 2019.




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F R A N C E
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BANIJAY GROUP: Moody's Lowers CFR to B2, Outlook Stable
-------------------------------------------------------
Moody's Investors Service downgraded Banijay Group S.A.S.'s
corporate family rating to B2 from B1 and its probability of
default rating to B2-PD from B1-PD.

Concurrently, Moody's has assigned a B1 rating to the new EUR953
million equivalent senior secured term loan B due 2025, EUR850
million senior secured notes due 2025 and the EUR170 million senior
secured revolving credit facility due 2024, raised by Banijay
Entertainment S.A.S. and Banijay Group US Holdings Inc. Moody's has
also assigned a Caa1 rating to the new EUR400 million senior
unsecured notes due 2026 issued by Banijay Group S.A.S.. Moody's
has confirmed the B1 rating on the existing EUR365 million senior
secured notes issued by Banijay Group S.A.S, which will be
refinanced as part of this transaction, and its rating will be
withdrawn upon repayment.

The outlook on all entities is stable.

The rating action concludes the review process initiated on October
30, 2019, when the company announced the acquisition of Endemol
Shine Group (ESG, rated at MediArena Acquisition B.V., Caa1,
ratings under review). Proceeds from the new debt issuance will be
used to fund the acquisition of ESG and refinance its existing
indebtedness.

"The downgrade reflects the significant increase in Banijay's
leverage and the execution and integration risks associated with
ESG's acquisition, which is large and transformational for
Banijay," says Victor Garcia Capdevila, Moody's lead analyst for
Banijay.

"We expect Moody's-adjusted gross leverage for the combined entity
to be around 6.4x by year-end 2020, compared to Banijay's
standalone leverage of 4.5x in the last 12 months to September
2019. Despite the material increase in leverage, the B2 rating with
a stable outlook reflects the strategic benefits of the combination
and the stronger business risk profile of the group," adds Mr
Garcia.

RATINGS RATIONALE

Banijay's acquisition of ESG will create the largest independent
content producer worldwide, with an estimated combined proforma
revenue of around EUR2.9 billion in 2019 and 120 production
entities across 22 different countries. The enlarged group will
benefit from higher economies of scale, cost synergies, production
efficiencies and a stronger market positioning which should enable
it to enhance its ability to protect and leverage its intellectual
property rights. The transaction will also allow Banijay to further
diversify its revenue base by increasing its share of scripted
production revenue to around 18.5% at transaction closing from 13%
in 2018.

Industry demand dynamics are expected to be favorable over the next
few years. Moody's base case scenario assumes that Banijay's
content production revenue will grow in the low single digit range
on the back of healthy demand from local and international
over-the-top (OTT) platforms as well as traditional broadcasters
looking to increase its original content offering to remain
relevant and retain audience levels, particularly amongst the
younger and most profitable demographic segments.

The group will benefit from an extensive library of around 85,000
hours of content and will control the majority of the intellectual
property of the produced formats on a combined basis. The content
portfolio is broad and well diversified by geography, format and
program, however, there is a material client concentration risk
around the top ten clients which represent around 50% of the
group's total production revenue.

The rating also factors in the execution and integration risks
associated with ESG's acquisition. The size and the
transformational nature of the transaction (ESG will generate 66%
of revenues of the combined entity) implies a degree of risk that
could emerge in the form of loss of key employees, such as creative
talent, senior management distractions, or unexpected costs.
However, integration risks are somewhat mitigated by the
similarities in the culture and business model of both entities,
and the fact that some members of Banijay's management team held
management positions at ESG in the past.

Moody's-adjusted gross leverage proforma for the transaction is
very high at 7.1x in 2019, as most of the total consideration (85%)
is funded with debt, with a relatively small equity portion (15%).
The rating agency forecasts a rapid deleveraging towards 6.4x in
2020 and 5.9x in 2021 mainly led by strong EBITDA growth. Despite
the high leverage at transaction closing, Moody's draws comfort
from the company's strong operational track record and the
management's proven ability to deliver on a consistent basis
against the business plan. Having said that, the group has limited
headroom for operating or financial underperformance in the current
rating category and a failure to materially reduce leverage over
the next 12-18 months would put significant negative pressure on
the ratings.

The rating also considers the following environmental, social and
governance factors. Evolving demographic and societal trends are
the key social risks for Banijay. It needs to continuously refresh
and adapt its content production pipeline to adjust it to the
changes in viewers tastes and preferences. In terms of governance,
Banijay's financial policy has historically been prudent and
conservative, and the combined entity will need to demonstrate its
ability to operate under a highly levered capital structure. The
board of directors following the acquisition of Endemol Shine will
be comprised of five directors appointed by LOV, one director
appointed by De Agostini, one director appointed by Fimalac and
three directors appointed by Vivendi SA. Moody's sees the current
shareholder structure as a positive factor because of the extensive
experience and expertise of LOV and Vivendi SA (Baa2, stable) in
the TV production and distribution business and its long-term
commitment to Banijay.

LIQUIDITY

The liquidity profile of the combined entity is adequate, although
liquidity has weakened relatively to Banijay's standalone profile.
The starting cash balance at closing of the transaction will be
around EUR100 million and its new RCF of EUR170 million is modest
relative to the size of the combined group.

Liquidity profile of the combined entity will be supported by
Moody's expectation of free cash flow of around EUR50 million in
2020 and EUR100 million in 2021, the new EUR170 million revolving
credit facility, which is subject to a springing financial covenant
of Senior Secured Net Leverage Ratio tested when 40% of the
facility is drawn and a EUR225 million receivable securitization
facility. The company will not have significant debt repayments
until the maturity in 2025 of its EUR953 million term loan B and
EUR850 million senior secured notes.

STRUCTURAL CONSIDERATIONS

The security package for the senior secured instruments is limited
to share pledges, intercompany receivables and bank accounts. All
material subsidiaries (accounting for more than 5% of proforma
EBITDA) are guarantors, except those located in excluded
jurisdictions (Argentina, Brazil, China, India, Mexico, Russia,
South Korea and Thailand). The group is subject to a minimum EBITDA
guarantor coverage test of 75%.

The B2-PD probability of default rating is in line with the B2 CFR,
reflecting the 50% family recovery rate assumption, in line with
Moody's standard approach for bond and loan capital structures. The
ratings on the senior secured notes and the senior secured bank
credit facilities are B1, one notch above the CFR, reflecting their
priority in ranking with respect to the senior unsecured notes,
which are rated Caa1.

RATIONALE FOR STABLE OUTLOOK

While Banijay will be initially weakly positioned in the B2 rating
category, the stable outlook reflects Moody's expectation of a
rapid reduction in Moody's-adjusted gross leverage towards 6.4x in
2020 and 5.9x in 2021, driven by strong EBITDA growth. The stable
outlook is also predicated on the expectation that Banijay will
continue to generate positive free cash flow and will always
maintain an adequate liquidity profile.

WHAT COULD CHANGE THE RATINGS UP/DOWN

Positive rating pressure is unlikely in the near future because
Banijay needs to demonstrate the successful integration of the two
businesses and develop a track record of deleveraging to levels
more consistent with the current rating. However, upward pressure
could build up on the ratings if Moody's-adjusted gross leverage is
reduced sustainably below 5.0x and RCF/net debt increases above 10%
on a sustained basis.

Negative pressure on the rating could develop if operating
performance deteriorates or Banijay's engages in material debt
funded acquisitions resulting in a Moody's-adjusted gross leverage
sustainably above 6.0x. Negative free cash flow generation leading
to a deterioration in the company's liquidity profile would also
exert negative pressure on the ratings.

LIST OF AFFECTED RATINGS

Issuer: Banijay Group S.A.S.

Downgrades:

  Probability of Default Rating, Downgraded to B2-PD from B1-PD

  Corporate Family Rating, Downgraded to B2 from B1

Confirmation:

  Backed Senior Secured Regular Bond/Debenture, Confirmed at B1

Assignment:

  Backed Senior Unsecured Regular Bond/Debenture, Assigned Caa1

Outlook Action:

  Outlook, Changed To Stable From Ratings Under Review

Issuer: Banijay Entertainment S.A.S.

Assignments:

  Senior Secured Bank Credit Facility, Assigned B1

  Backed Senior Secured Regular Bond/Debenture, Assigned B1

Outlook Action:

  Outlook, Assigned Stable

Issuer: Banijay Group US Holdings Inc.

Assignment:

  Senior Secured Bank Credit Facility, Assigned B1

Outlook Action:

  Outlook, Assigned Stable

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.

COMPANY PROFILE

Banijay Group S.A.S., headquartered in Paris, France, is the
world's largest independent content production group. It creates,
develops, sells, produces and distributes television content
worldwide across a well-diversified network of around 120
production companies in 20 different countries. The group has a
strong position in both scripted and non-scripted content
production and benefits from an extensive library of around 85,000
hours of content. Following Endemol Shine Group's acquisition, the
combined group will have pro forma reported revenue and EBITDA of
about EUR2.6 billion and EUR467 million, respectively.


BANIJAY GROUP: S&P Retains 'B+' ICR on CreditWatch Negative
-----------------------------------------------------------
S&P Global Ratings assigned a 'B' rating to the Banijay Group SAS's
proposed senior secured instruments and a 'CCC+' rating to the
company's senior notes.

All of S&P's ratings on Banijay, including the 'B+' issuer credit
rating and issue level ratings, will remain on CreditWatch with
negative implications until the acquisition closes.

S&P said, "We rate Banijay's proposed senior secured debt at 'B'
and senior notes at 'CCC+', following the announced refinancing of
the group.

"We expect debt at independent TV producer Banijay to increase
after the acquisition of ESG and that S&P Global Ratings-adjusted
leverage will remain above 5.0x for the next two years. Banijay
will raise about EUR2.2 billion of new debt and receive a EUR275
million equity injection from its shareholders." It will use these
funds to:

-- Refinance Banijay's current capital structure;

-- Pay for the acquisition of ESG, announced in October 2019;

-- Repay almost all outstanding debt at ESG;

-- Pay fees and early repayment penalties; and

-- Refinance an upfront payment relating to the acquisition of the
Bear Grylls-led production entity (adventure format) in 2019.

The new debt package will include senior secured debt comprising a
term loan B and senior secured notes (denominated in euro and U.S.
dollar), all due in 2025; a revolving credit facility (RCF) due in
2024; and senior notes due in 2026.

S&P's 'B+' rating on Banijay was placed on CreditWatch negative on
Oct, 30, 2019 and will remain on CreditWatch until the acquisition
of ESG closes.

The ESG acquisition is expected to occur in June 2020, assuming it
receives the necessary regulatory approvals. S&P expects that, as a
part of the antitrust process, Banijay will divest some operations
in Europe.

Because the ESG acquisition is mostly debt-funded and will likely
lead to higher leverage, S&P expects to lower the issuer credit
rating on Banijay by one notch to 'B'.

S&P said, "Adjusted leverage is expected to rise significantly, to
above 5.0x in 2020-2022, well above the leverage level we
anticipate for a 'B+' rating. We estimate that adjusted debt to
EBITDA will increase to 7.7x-8.2x in 2020 (pro forma 12 months of
ESG consolidation) because of the increase in the amount of debt
and despite the higher EBITDA base of the combined group. In our
previous base case for Banijay, we anticipated leverage of about
4.0x for Banijay as a stand-alone entity in 2019-2020, declining
from 4.5x in 2018. We expect that Banijay's earnings and EBITDA
will be somewhat depressed by restructuring and acquisition-related
costs, and this effect will peak in 2020 before gradually declining
over 2021-2022.

"We expect that the combined group will generate sound positive
free operating cash flows and reduce leverage from 2021 onward."

The combined Banijay and ESG group is forecast to expand its EBITDA
base and generate free operating cash flows (pro forma 12 months of
ESG consolidation) of about EUR100 million on average in 2020-2022,
supported by the group's attractive portfolio of TV shows and tight
cost control. Banijay's portfolio for 2020 contains a high share of
nonscripted shows (about 80%, pro forma the acquisition). These
have lower capital intensity than scripted shows. S&P said,
"Therefore, we anticipate that capital expenditure (capex) for the
combined group will be moderate in 2020-2022, which supports cash
flow generation. We expect Banijay to reduce leverage rapidly to
6.5x-7.0x in 2021 and toward 6.0x in 2022, unless the integration
of ESG hits unexpected complications, or restructuring and
integration costs prove higher than anticipated. Our assumptions
regarding the pace of deleveraging incorporates our expectation
that Banijay's management will maintain its prudent financial
policy and undertake no significant shareholder distributions or
large mergers or acquisitions in the period."

The ESG acquisition will strengthen Banijay's business position
within the content production industry.

Banijay will become a leading independent TV show content producer
globally following the closure of the ESG acquisition. S&P
estimates that the size of the group's operations will increase to
more than EUR3 billion anticipated revenue in 2020 (pro forma the
acquisition, including 12 months of ESG contributions) compared
with expected revenue of about EUR1 billion in 2019 for Banijay as
a stand-alone entity. S&P also anticipates increased geographic
diversification of Banijay's business and strengthening of its
market position in the U.K. and U.S. The combined group will have a
large and diversified portfolio of TV shows, formats, and
intellectual property rights, with no significant dependence on a
single format.

Banijay continues to be exposed to the volatile content production
industry, which can affect its earnings and cash flows.

Like its TV and film content production peers, Banijay's revenue,
earnings, and cash flow depends on the success of its shows and the
timing of their delivery, which is difficult to predict. S&P
considers that these risks are partly mitigated by the group's
proven track record of producing recurring shows and introducing
new successful shows to the market.

Banijay's track record to integrate assets partly mitigates
integration risks of ESG although we cannot completely rule them
out given the size of the transaction.

S&P said, "We expect that Banijay will integrate ESG over 2020-2022
with limited operational setbacks, based on its historical track
record of successfully integrating acquired assets (for example,
Castaway and the Zodiak Media group). In addition, many of
Banijay's current top managers were previously with ESG; we
consider this supports a smooth integration. That said, the ESG
acquisition is by far the largest in Banijay's history, which adds
complexity to the integration process and increases integration
risks. The ESG deal also provides an opportunity to achieve cost
synergies, mainly from personnel and rent costs, and optimization
of service contracts. This could save about EUR60 million by 2022.
We are cautious about including this saving in our forecasts,
because the phasing of restructuring costs and extracting synergies
may vary or encounter delays.

"We plan to resolve the CreditWatch placement when the transaction
closes, which we expect to occur in the second quarter of 2020.
Based on the proposed transaction and provided the group's
operating performance is in line with our base-case expectations,
we will likely lower the issuer credit rating by one notch to 'B'
from 'B+'."


COOKIE ACQUISITION: S&P Assigns Prelim. 'B' ICR, Outlook Stable
---------------------------------------------------------------
S&P Global Ratings noted that France-based biscuit manufacturer
Cookie Acquisition SAS (Biscuit International) has been acquired by
the private equity fund Platinum.  Biscuit International has a
leading position in the competitive and mature European private
label sweet biscuit market, thanks to its relatively broad
manufacturing footprint and its long history with European
retailers that translates in resilient margins in the past years,
despite an inflationary environment for certain key raw materials.

S&P is thus assigning to Biscuit International its preliminary 'B'
long-term issuer credit rating.

S&P said, "At the same time, we are assigning our preliminary 'B'
issue rating to Biscuit International's proposed EUR490 million
term loan B (TLB) and our preliminary 'CCC+' issue rating to the
company's proposed EUR110 million second-lien instrument. The
respective preliminary recovery ratings are '3', indicating our
estimate of 50% recovery prospects, and '6', indicating our
estimate of 0% recovery prospects."

S&P said, "Biscuit International is constrained by its limited
scale and relatively narrow product offering within a challenging
industry, where we see low single-digit-growth and a relatively
small scale of operations. Biscuit International is present in only
the sweet biscuit product category within the package food
industry, leading us to consider its product offering to be narrow.
The company derives the vast majority of its volume production in
the private label segment, a market expected to experience
low-single-digit growth. In 2019, the group should report EBITDA of
close to EUR80 million (pro-forma the Aviator acquisition), which
we consider as limited if compared with branded players in this
product category. However, its ability to provide a wide array of
sweet products--ranging from cakes to breakfast biscuits--with
leading position in niche products such as FEW (fresh egg waffles),
stroopwafels, sticks in Europe, cookies, and sandwich biscuits
supports our view on the business.

Inability to cope with tough price negotiations with retailers
could result in temporary margins squeeze. S&P said, "In our view,
this is a tough market since retailers' business models have been
under pressure in the recent years due to the growing popularity of
other distribution channels such as online or convenience stores.
However, Biscuit International should outperform the sweet biscuit
market average over the forecasted period thanks to its
long-lasting relationship with customers and its efficient sourcing
strategy. Even if retailers usually pressure their suppliers,
creating unbalanced relationship, we consider that France's EGalim
law should partially offset this trend." The sweet biscuits market
is expected to see slightly higher volumes in 2020 and 2021.
However, if Biscuit International cannot withstand potential
pressure from retailers in geographies, there could be temporary
pressure on margins. Biscuit International's historically resilient
EBITDA margin shows that the company has been able to manage these
challenges in the past.

A flexible Pan-European manufacturing footprint, reliability, and
quality of product offering translate into resilient margins.
Biscuit International operates 20 manufacturing sites across
Europe, enabling it to effectively meet clients' needs in term of
volume and quality in each of the group's geographies. This
commitment to quality and reliability on its products offering
enabled Biscuit International to develop a good rapport with its
customers. Also, the company has been able to propose some product
innovations--a key strength to secure long-term relationships with
retailers. In fact, its white label offer is increasingly focused
on quality in addition to price. Biscuit International intends to
increase its positioning toward organic or free from product
offering (8% of sales in 2018) to capture additional growth on
these fast-growing segments. In S&P's view, the company has
historically managed inflation in raw material prices without
significant negative impact on the EBITDA margin. This supports
Biscuit International's business and its overall credit quality.

The company's longstanding relationships with key customers should
advance its cross-selling strategy. Biscuit International has
proven, longstanding relationships with key European retailers,
such as Lidl, Aldi, Carrefour, and Leclerc, with some partnerships
spanning more than two decades. This translates into the company
providing the vast majority of volume sold by these retailers on
certain product categories like FEW, stroopwafels, and S&P believes
this protects the company from potential volume shifts from these
clients. The stickiness of these relationships should enable the
group to further strengthen its cross-selling strategy, providing
opportunities for volume growth.

Biscuit International's ambitious operational improvement plan to
further boost operating performance in the coming year and to
further integrate Aviator could squeeze free operating cash flow in
the next two years. The company's new shareholders, Platinum, will
support the launch of an ambitious operational improvement plan and
target synergies to bolster EBITDA over the next few years. S&P
said, "We are more cautious on the timing of these synergies, and
we have incorporated more conservative assumptions within our base
case. However, we recognize that some synergies following the
Aviator acquisition, mainly those on sourcing, functional
headcounts, and revenues initiatives, seem achievable in reasonable
time. This leads us to apply a milder haircut versus all measures
linked to footprint reorganization. As a result of these
initiatives and their costs, free operating cash flow (FOCF) will
still be positive in 2020 but constrained in 2021, when we expect
it to be somewhat negative due to specific investment to expand
capacity dedicated to FEW cluster in the Netherlands or optimize
some of the existing facilities."

Post closing of the LBO transaction, Biscuit International will
have a highly leveraged capital structure with debt to EBITDA
reaching 7.2x, as adjusted by S&P Global Ratings. The acquisition
of Cookie Acquisition SAS (Biscuit International) was acquired by
private equity fund Platinum Equity will be finance through a mix
of bank debt (split between a EUR490 million of TLB with a
seven-year maturity and a EUR110 million second-lien instrument
with an eight-year maturity) and pure equity. Biscuit
International's adjusted debt to EBITDA will reach 7.2x. S&P
considers this level of leverage to be aggressive but still
commensurate with its 'B' rating level.

S&P said, "The final ratings will depend on our receipt and
satisfactory review of all final documentation and final terms of
the transaction. The preliminary ratings should therefore not be
construed as evidence of final ratings. If we do not receive final
documentation within a reasonable time, or if the final
documentation and final terms of the transaction depart from the
materials and terms reviewed, we reserve the right to withdraw or
revise the ratings." Potential changes include, but are not limited
to, utilization of the proceeds, maturity, size and conditions of
the facilities, financial and other covenants, security, and
ranking.

S&P said, "The stable outlook reflects our view that Biscuit
International's operating performance should remain resilient and
its S&P Global Ratings-adjusted margin to stand between 15.5% and
16.5% over the next 12-18 months.

"In our view, the company's EBITDA margin is supported by a winning
strategy executed historically by leveraging cross selling. This is
on the back of its close ties with European retailers with whom it
shares sound relationships for more than 2 decades."

Also, the increase in scale of operation following the Aviator
acquisition will enable the group to capitalize on sourcing
opportunities where its raw materials represent 60% of its cost
structure.

S&P said, "We anticipate that the company will generate positive
FOCF of around EUR15 million in 2020, which will come under
pressure in 2021 and therefore slightly negative as the company
launches its ambitious capex program to extract synergies going
forward. Under our base case, we expect that the company will
maintain its EBITDA interest coverage at close to 3x over the next
12-18 months.

"We could downgrade the company if it pursues a more aggressive
debt-financed acquisition strategy than we currently anticipate,
resulting in a material deterioration in its leverage metrics that
hamper the expected deleveraging path."

A negative rating action could also occur if Biscuit
International's EBITDA interest coverage falls below 2.0x on a
sustained basis or if it fails to generate positive FOCF (excluding
growth capex) due to under performance on its operations. This
could result from significant deviation versus our base case linked
to fierce competition with branded companies, and lower penetration
of private label for or from an unanticipated sharp increase in raw
material cost and inability to pass-through cost increase on a
prolonged basis.

S&P could take a positive rating action if Biscuit International's
revenue and EBITDA base grow significantly higher than its current
assumptions, such that debt to EBITDA would fall below 5x and
EBITDA interest coverage clearly supports a higher rating. This
would also hinge on robust FOCF reaching at least 10% of total
debt. A higher rating would also depend on a firm commitment from
the owner to sustain such a low level of leverage. This could occur
from higher penetration of private label product category within
the company core geographies mainly France and a very successful
execution of operational improvement plan.

COOKIE INTERMEDIATE: Moody's Assigns 'B3' CFR, Outlook Stable
-------------------------------------------------------------
Moody's Investors Service assigned a first-time B3 corporate family
rating and a B3-PD probability of default rating to Cookie
Intermediate Holding II SAS, the parent company of Biscuit
International S.A.S., a European manufacturer of private label
sweet biscuits headquartered in France.

Concurrently, Moody's has also assigned a B2 rating to the EUR490
million first lien senior secured term loan B due 2027 and to the
EUR85 million revolving credit facility due 2026 to be borrowed by
Cookie Acquisition SAS and, shortly after closing, by De
Banketgroep Holding International BV, and a Caa2 rating to the
EUR110 million second lien senior secured term loan due 2028 to be
borrowed by Cookie Acquisition SAS. The outlook is stable.

The rating assignment follows the acquisition of Biscuit
International by funds advised by Platinum Equity Advisors, LLC
(Platinum) from Qualium Investissment. The acquisition will be
funded with a mix of debt (EUR620 million) and equity. The
transaction is pending antitrust approval and is expected to close
in the first quarter of 2020.

"Cookie Intermediate's B3 rating reflects its strong position in
the European private label sweet biscuit market, its high operating
margins, a degree of geographic diversification across Europe and
the historical resilience of the European sweet biscuit market,"
says Paolo Leschiutta, a Moody's Senior Vice President and lead
analyst for Biscuit International.

"The rating, however, also reflects the company's high initial
financial leverage of 7.6x, on a Moody's adjusted gross debt to
EBITDA basis, which will reduce towards 6.5x by the end of 2021,
its selected product focus and relatively small absolute scale,
some execution risk on the capability to deliver on the cost
optimisation plan, a track record of acquisitions and the low
growth of the sweet biscuit market across Europe," adds Mr.
Leschiutta.

RATINGS RATIONALE

The B3 CFR reflects (1) Biscuit International's strong market
position in selected private label products; (2) above peers'
average operating margins; (3) a degree of geographic
diversification with operations across five main European
countries; (4) a track record, albeit short, of being able to pass
through raw material price volatility to customers; and (5) a sound
liquidity profile and Moody's expectations for positive free cash
flow, albeit this will be depressed until 2021 by reorganization
costs.

The CFR also factors in the company's (1) client concentration
risk, with top ten customers representing 60% of revenues; (2) a
mature, albeit stable, product portfolio of private labels; (3)
concentration in one product category (sweet biscuits), which
however benefits from consumption across different occasions; (4)
exposure to fast changing consumer preferences and potentially
adverse regulatory changes; and (5) initially high financial
leverage, expected to reduce over the next 12 to 18 months.

Biscuit International is market leader in the private label
category, with number 1 market positions in certain products like
fresh egg waffles, stroopwafels and sticks. Its position is
somewhat protected by capacity related issues in the market which
supports its competitive position. These products, however,
represent only ca 25% of group revenues.

Although the reminder of the company's product portfolio is more
exposed to competition, the scale of the company's operation and
its pan European presence offer a competitive advantage against
some of its much larger customers. The concentration of the food
retail industry in a few large players, which is perceived by
Moody's as a potential risk for the company, is balanced by the
fact that Biscuit International has a long standing relationship
with most of its largest customers, often longer than 20 years, and
has a track record of being able to pass through raw material costs
inflation.

The company's focus on private-label products constrains, in
Moody's view, the company's innovation capability reducing its
pricing power against branded products. However, Moody's notes that
private labels are less sensitive to economic slowdowns and overall
sweet biscuit consumption across Europe has remained stable in
recent years, with private labels representing around 33% of the
market in value terms.

The company's initial leverage, calculated as Moody's adjusted
gross debt to EBITDA, is 7.6x, and the rating assumes a degree of
deleveraging towards 6.5x by 2021 stemming from (1) modest top line
growth and some cross selling opportunities from the expansion of
some of the company's products across Europe, and (2) focus on cost
reduction through an optimization programme.

Moody's expects the cost savings programme to result in improving
operating profit margins over the coming years. Implementation
costs, however, will weight on the company's cash flows throughout
2021 while benefits might start to arise only at a later stage.
Investment in capital expenditure for both the optimization
programme and to expand the business will likely depress the
company's free cash flow generation until 2021. Moody's nonetheless
expects the company to be able to generate positive free cash flow
on an ongoing basis.

Although Moody's derives comfort from the company's experienced
management team, the deleveraging remains exposed to execution
risks while potential acquisitions might slow down debt reduction.
Moody's views the synergies identified by the company as
reasonable, however, the rating agency cannot exclude that
implementation costs might overrun or that the company's expected
benefits might be delayed which could depress the profitability
improvement until after 2021. That said, Moody's acknowledges
Platinum's track record in delivering synergies across its
portfolio of assets.

Moody's would like to draw attention to certain social and
governance considerations with respect to Biscuit International.
The company is tightly controlled by Platinum Equity which, as is
often the case in highly levered, private equity sponsored deals,
has a high tolerance for leverage and governance is comparatively
less transparent. The company has a track record of acquisitions,
which exposes the company to integration risks as well as event
risk in the form of M&A.

In terms of social considerations, the company's product portfolio
is largely mature and sensitive to changing consumer preferences.
Although the consumption of sweet biscuits has remained relatively
stable over the last ten years across Europe, consumers increasing
focus on health, quality of food and reduction of sugar intakes
might result in a shift in demand.

LIQUIDITY

Initial cash on balance sheet will be moderate at approximately
EUR30 million, and the company's liquidity is supported by (1)
positive free cash flow generation, with only modest working
capital and cash flow generation seasonality during the year, and
(2) the new revolving credit facility of EUR85 million which will
be EUR15million drawn at closing, and with ample headroom under its
financial covenant of first lien net debt of a maximum of 8.5x
which will be tested only when drawings exceed more than 50% of the
size of the facility. The company will have no material debt
maturities until 2027 as the maturity of the first lien and second
lien facilities are in 7 and 8 years, respectively.

STRUCTURAL CONSIDERATIONS

The PDR of B3-PD reflects Moody's assumption of a 50% family
recovery rate given the presence of first lien and second lien
tranches. The EUR490 million first lien term loan, and the EUR85
million RCF rank pari passu and benefit from the same guarantees
and security package, which consists mainly of share pledges, and
that Moody's views as equivalent to unsecured debt. These
instruments are rated B2, one notch higher than the CFR.

The EUR110 million second lien tranche is rated Caa2, two notches
below the CFR, reflecting its subordinated position relative to the
first lien debt. Moody's understands that part of the term loan B
first lien facility will also be borrowed by another holding
company within the group, De Banketgroep Holding International,
benefitting from the same guarantee and security packages.

Proceeds from the facilities will be used to finance the
acquisition of Cookie Intermediate Holding II SAS, parent company
of Biscuit International SAS, by Platinum Equity. Moody's
understands that subsequent to the acquisition, the facilities will
represent most of the debt of the group with very limited financial
debt at operating companies.

RATIONALE FOR THE STABLE OUTLOOK

The stable outlook reflects Moody's expectation that Biscuit
International will maintain a prudent approach in its expansion
policy, focusing mainly on organic growth and on extracting cost
synergies from the integration of the companies acquired in recent
years. The outlook also anticipates some moderate reduction in its
financial leverage, with a Moody's-adjusted (gross) Debt / EBITDA
ratio trending towards 6.5x by 2021.

WHAT COULD CHANGE THE RATING UP/DOWN

Positive pressure could arise if the company delivers on its growth
and cost reduction programmes resulting in operating margin
improvements, while building a track record of positive free cash
flow generation and prudent financial policy with regard to future
possible acquisitions. Before considering an upgrade, the company's
Moody's adjusted debt to EBITDA has to trends towards 6.0x with an
EBIT margin remaining above the current level.

Conversely, negative pressure could be exerted on the rating or
outlook if the company's free cash flow generation becomes negative
on a sustained basis, or its Moody's adjusted debt to EBITDA
remains above 7.0x on an ongoing basis. The rating could come under
immediate negative pressure in case of a material deterioration in
the company's liquidity.

LIST OF AFFECTED RATINGS

Assignments:

Issuer: Cookie Acquisition SAS

  Senior Secured Bank Credit Facility (Local Currency), Assigned B2
(LGD3)

  Senior Secured Bank Credit Facility (Local Currency), Assigned
Caa2 (LGD6)

Issuer: Cookie Intermediate Holding II SAS

  Probability of Default Rating, Assigned B3-PD

  Corporate Family Rating, Assigned B3

Issuer: De Banketgroep Holding International BV

  Senior Secured Bank Credit Facility (Local Currency), Assigned B2
(LGD3)

Outlook Actions:

Issuer: Cookie Acquisition SAS

  Outlook, Assigned Stable

Issuer: Cookie Intermediate Holding II SAS

  Outlook, Assigned Stable

Issuer: De Banketgroep Holding International BV

  Outlook, Assigned Stable

PRINCIPAL METHODOLOGY

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

COMPANY PROFILE

Cookie Intermediate Holding II SAS is the parent company of Biscuit
International S.A.S., one of the largest European manufacturer of
private label sweet biscuits based in France. The company produces
and distributes traditional biscuits, nutrition biscuits, waffles
and other sweet products across Europe. The company was created in
2016 as a result of the combination between Poult, a French leading
biscuit producer, and Banketgroep, a Dutch waffle producer and has
completed a number of acquisitions in subsequent years. Pro-forma
for the acquisition of Aviateur, completed in mid-October 2019, the
company estimates to have sold 170 thousand tons of biscuits,
generated around EUR500 million and above EUR80 million of revenues
and EBITDA, respectively, during 2019. In 2018 c.75% of 2018 Net
Sales (pro-forma for Aviateur) were generated across France, the
Netherlands and the UK with production across 20 manufacturing
facilities.


SISAHO INT'L: Moody's Alters Outlook on B2 CFR to Negative
----------------------------------------------------------
Moody's Investors Service affirmed the B2 corporate family rating
of SISAHO International SAS, as well as its B2-PD probability of
default rating and B2 senior secured debt rating. At the same time,
Moody's has changed the outlook on SISAHO to negative from stable.

SISAHO is the parent company of SIACI Saint Honore SAS, a leading
company in the corporate insurance brokerage French market,
providing services throughout the insurance value chain (e.g.,
consulting, intermediation, claims management). SIACI Saint Honore
is also present in other European countries, in Asia, North America
and Africa.

SISAHO is 100% owned by Acropole BidCo, which in turn is owned by
Charterhouse Capital Partners and SIACI Saint Honore's management.

RATINGS RATIONALE

The change in outlook to negative from stable reflects a slower
reduction in leverage than Moody's expectation at the time of the
sale of SISAHO to Charterhouse Capital Partners and SIACI Saint
Honore's management 18 months ago and the risk that leverage
remains above Moody's expectations for SISAHO's current rating
level for a prolonged period. Moody's estimates the group's
Debt-over-EBITDA (leverage ratio) to be between 7x and 8x at
year-end 2019, following a lower than expected profitability in the
group's Industrial Risk Protection (IRP) division and a higher than
expected level of debt as the EUR80 million revolving credit
facility has been fully drawn.

At the same time, measures taken by the group to restore its
profitability should if successful result in the group's leverage
ratio falling below 7x in the next 18 months. Furthermore the
group's Supervisory Board has approved a capital increase for a
maximum amount of EUR65 million, which partly compensates the debt
levels. In addition, SISAHO's B2 CFR continues to be supported by
the group's good market position in the French Business to Business
(B2B) insurance brokerage market, good business and geographic
diversification and good profitability levels.

SISAHO reported an EBITDA of EUR82 million (excluding the effect of
transformation program which has already produced run rate savings
of EUR4 million) in 2019, EUR10 million lower than budgeted. This
was principally driven by the performance of the group's IRP
division which was impacted by soft market conditions and
investment in non-specialty activities which have not yielded
returns expected by management. The group net profit and cash
position were also negatively impacted by higher than anticipated
reorganization costs following the acquisition by Charterhouse
Capital Partners, including a significant investment (EUR45
million) in digitalization and automation, and M&A activities. The
group acquired four companies in 2019 to reinforce its IRP
(Cambiaso Risso, Drieassur, CLC) and its Health, Protection,
Pensions and Savings (Adding) divisions, and has continued to
develop its consulting activities (notably Topics). These M&A
transactions and IT investments also resulted in a higher debt
level, as the group fully drew down its EUR80 million revolving
credit facility in 2019.

Positively, SISAHO has launched a transformation program which has
already produced a run rate savings of EUR4 million as of December
2019 and is expecting to generate an additional EUR5 million in
2020. The group's Supervisory Board has also approved a capital
increase for a maximum amount of EUR65 million, of which EUR50
million of equity have been already committed by the main
shareholders, which has enabled the group to restore its cash
position and will reduce the need of further debt increase. Moody's
also expects the volume of significative investments to decrease in
the coming years further reducing pressures on leverage. As a
result, Moody's expects the leverage ratio to gradually trend down
to below 7x in the next 18 months.

WHAT COULD CHANGE THE RATING UP / DOWN

The following factors could lead to a downgrade: (i) Gross
debt-to-EBITDA (on a Moody's basis) remaining consistently above 7x
or (ii) a greater than expected deterioration in profitability,
reflected in EBITDA margins consistently below 17%.

A rating upgrade is unlikely given the negative outlook. However,
the following factors could revert the outlook on SISAHO to stable:
(i) Gross debt-to-EBITDA (on a Moody's basis) falling sustainably
below 7x and (ii) the group maintaining strong EBITDA over 17%.

SOCIETE GENERALE: S&P Raises 2014-104 Notes Rating to 'B+p'
-----------------------------------------------------------
S&P Global Ratings raised to 'B+p' from 'Bp' and removed from
CreditWatch positive its credit rating on Societe Generale's series
2014-104 notes.

The upgrade follows S&P's Jan. 9, 2020, rating action on its
long-term issuer credit rating (ICR) on Avon Products Inc..

Therefore, following S&P's recent upgrade of Avon Products, it has
consequently raised to 'B+p' from 'Bp' and removed from CreditWatch
positive its rating on Societe Generale's series 2014-104 notes.




=============
G E R M A N Y
=============

TECHEM VERWALTUNGSGESELLSCHAFT: S&P Rates Sr. Secured Notes 'B+'
----------------------------------------------------------------
S&P Global Ratings said it assigned its 'B+' issue-level rating and
'3' recovery rating to German-based energy services company Techem
Verwaltungsgesellschaft 675 mbH's (Techem 675) proposed EUR600
million senior secured bond. Techem Verwaltungsgesellschaft 675 mbH
is the wholly owned subsidiary of Techem Verwaltungsgesellschaft
674 mbH (Techem 674; formally Blitz F18 674 mbH). S&P understands
proceeds will partially refinance its existing EUR2.29 billion
senior secured term loan.

The 'B+' issue-level rating is in line with the issuer credit
rating on Techem 674. The '3' recovery rating indicates S&P's
expectation of meaningful (50%-70%; rounded estimate 60%) recovery
in the event of a default.

ISSUE RATINGS--RECOVERY ANALYSIS

Key analytical factors

-- The absence of material prior-ranking liabilities underpin the
rating on the senior secured debt, but the large amount of pari
passu senior secured debt constrains it.

-- The debt's position in the capital structure, and the senior
instruments and equity cushion, all support the rating.

-- The issue rating on the EUR414 million outstanding senior notes
borrowed by Techem is 'B-' and recovery rating is '6', reflecting
the high amount of prior-ranking debt in the group's capital
structure.

  -- This reflects S&P's expectation of negligible recovery in the
event of a default.

-- The senior secured first-lien facilities benefit from a modest
security package, which comprises share pledges, bank accounts, and
intragroup receivables.

-- There is a guarantor coverage test at 80% of consolidated
EBITDA.

-- S&P's hypothetical default scenario would be driven by a
significant increase in competitive pressure stemming from a
technological change or a change in the legislative environment in
the German submetering market, which would result in declining
revenues and margins, combined with high leverage.

-- S&P values Techem as a going concern, reflecting its view of
the company's leading market shares and high profitability.

Simulated default assumptions

-- Year of default: 2023
-- Jurisdiction: Germany
-- Emergence EBITDA: EUR279 million
-- Implied enterprise value multiple: 6.0x

Simplified waterfall

-- Net enterprise value after administrative expenses (5%): EUR1.6
billion
-- Estimated senior secured debt claims: EUR2.6 billion
    --Recovery expectation: 50%-70% (rounded estimate: 60%)
-- Second-lien debt claim: EUR425 million
    --Recovery expectations: 0%

All debt amounts include six months prepetition interest.




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

UNITED GROUP: S&P Affirms 'B' Issuer Credit Rating, Outlook Stable
------------------------------------------------------------------
S&P Global Ratings affirmed its 'B' issuer credit rating on United
Group BV and assigned its 'B' issue rating to the proposed senior
secured notes and 'B-' issue rating to the proposed payment-in-kind
(PIK) notes.

United Group BV is issuing EUR1.795 billion of notes to fund its
proposed EUR1.2 billion acquisition of Bulgarian Telecommunications
Company (Vivacom) and refinance its outstanding senior secured
notes.

Vivacom and Tele2Croatia will double United Group's scale and scope
but country-related risks remain a key constraint on operations. In
November 2019, United Group announced its proposed acquisition of
Vivacom, the largest integrated telecom operator in Bulgaria.
United Group expects to pay EUR1.2 billion, and management expects
the acquisition will close during the second quarter of 2020.
Earlier this year, United Group announced the acquisition of Tele2
Croatia for EUR220 million, for which it is awaiting approval from
the antitrust authorities. If these two transactions close as
planned, we estimate that Vivacom's pro forma revenues for 2019
will double to just below EUR1.5 billion, and its reported EBITDA
will be 85%-90% higher. Moreover, United Group's mobile operations
will increase substantially. In S&P's view, the addition of Vivacom
not only enhances the group's scale and geographic exposure, but
adds an attractive asset that benefits from an incumbent position
in Bulgaria, fully owned and well-invested fixed and mobile
networks, and a solid growth profile despite the high uptake of
telecom services in Bulgaria. The benefits of these acquisitions
will be somewhat offset by some margin dilution and higher exposure
to mobile operations, which tend to be more volatile than fixed
broadband. Furthermore, both acquisitions are unlikely to create
any imminent substantial synergies with United Group's existing
assets. The operations will remain constrained by elevated country
risks, including higher price sensitivity than in wealthier
markets, exposure to piracy, and grey market activities.

S&P said, "We expect somewhat delayed deleveraging after the
acquisition of Vivacom. The acquisition of Vivacom will be fully
debt funded. Pro forma the acquisitions of Vivacom and Tele2
Croatia, United Group's adjusted leverage is about 7.2x, according
to our estimates. We understand that United Group's free operating
cash flow (FOCF) generation will be constrained by increasing capex
as Vivacom steps up fiber investments and by upcoming spectrum
auctions mainly related to United Group's assets in Slovenia. As a
result, we expect that United Group's deleveraging capacity would
be somewhat delayed compared with our previous base case."

Vivacom's former shareholders' dispute creates a material event
risk. Vivacom is currently the subject of several litigations
between its former and current shareholders and with the Bulgarian
Confiscation Commission (BCC). The latter relates to the insolvency
of Bulgarian Corporate and Commercial Bank AD, which funded the
purchase of Vivacom by a former shareholder. The BCC's claims are
secured by shares of certain companies in the Vivacom group. The
termination and final settlement of the BCC's claims against the
Vivacom Group and release of the shares in the Vivacom companies
are conditions to closing. S&P said, "We also consider the ongoing
case in a Luxembourg court between Vivacom's former and current
shareholders. This case relates to the transfer of ownership of
Vivacom's holding company through an enforcement procedure in 2016.
We understand the matter was resolved in a London court in 2019 in
favor of the current shareholder, but was subsequently reinitiated
in Luxembourg. Nevertheless, any material delay exposes United
Group to a cash flow shortfall because it is prefunding its
acquisition of Vivacom and will need to fund ongoing interest
payments. We treat this as an unlikely event risk that could
nevertheless create rating downside."

S&P said, "The stable outlook reflects our view that that United
Group will continue to benefit from strong organic revenue growth
of more than 5% and successfully integrate Tele2 Croatia and
Vivacom, helping it reduce adjusted leverage to less than 7.0x by
2021-2022. We forecast funds FFO cash interest coverage will exceed
3.0x over 2020-2021.

"We could lower our ratings if we expect adjusted leverage to
remain above 7.5x from 2020, if FFO cash interest declines to less
than 2.5x, or if underperformance leads to sustained significant
negative FOCF that is not offset by strong commercial success. We
could also lower the rating if we view liquidity as less than
adequate, for example, if the group draws a very significant amount
from its revolving credit facility (RCF). This could happen if the
closing of the Vivacom acquisition is delayed beyond the second
quarter of 2020.

"We are unlikely to raise the rating over the next 12-24 months
because we do not anticipate any significant and sustainable
reduction in leverage under United Group's financial sponsor
ownership. Additionally, the rating will likely remain constrained
by the group's limited FOCF generation prospects due to its
ambitious growth plans, which we anticipate will result in
continued high capex and bolt-on acquisitions."




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

EVRAZ PLC: Fitch Affirms BB+ Issuer Default Rating, Outlook Stable
------------------------------------------------------------------
Fitch Ratings affirmed Russia-based steel producer Evraz plc's
Long-Term Issuer Default Rating and senior unsecured debt
instrument rating at 'BB+'. The Outlook is Stable.

The ratings of Evraz reflect the integrated nature of operations,
high self-sufficiency in raw materials and a competitive cost
profile, which underpins the sound profitability of its Russian
assets. It is a leading supplier of steel for the Russian rail and
construction markets, placing mostly long products in the market.

Over the next three years growth capex will increase to realise
several large-scale projects. Nevertheless Fitch expects debt to
remain moderate with funds from operations (FFO)-adjusted net
leverage at around 1.8x-2.0x. Fitch expects the group's financial
policies to support free cash flow (FCF) in weaker market
conditions ahead.

KEY RATING DRIVERS

Transparent Financial Policies: Evraz has expressed its commitment
to a net debt/EBITDA target of 2.0x and absolute net debt of USD3
billion-USD4 billion, even under stressed market conditions. Fitch
expects management will consider the medium-term commodity price
environment when incurring capex or recommending any dividends
above the minimum USD300 million. Such financial policies should
support FCF in weaker market conditions ahead and maintain
financial metrics broadly in line with Fitch rating sensitivities.

Moderate Leverage: Fitch estimates 2019 EBITDA at around USD2.5
billion, down from a peak USD3.75 billion a year ago, due to softer
steel markets in Russia and North America, lower coal prices as
well as swifter-than-expected normalisation of vanadium prices.
Fitch projects EBITDA over the next three years at USD2.1 billion
to USD2.2 billion, close to mid-cycle assumptions. As a result, FFO
adjusted net leverage will increase to 1.8x-2.0x (2018: 1.1x), in
line with its rating sensitivities.

Cost-Competitive Position: Evraz owns competitive metallurgical
coal resources in excess of own requirements (239% self-coverage)
and high-cost iron-ore assets (79% self-coverage). It is in the
first quartile of the global long products cost curve (on an
integrated basis) under normal-to-favourable market conditions, but
may underperform less-integrated peers with highly efficient
steel-making facilities under stressed market conditions when raw
materials are cheap. In Russia only the OEMK plant of
Metalloinvest, benefiting from cheap captive iron ore and cheap gas
and electricity supplies, has sustainably lower costs for long
products.

Product Mix a Weakness: Evraz now sells a high proportion of
semi-finished products and lower proportion of higher value added
products. Its finished products are mostly long products for
domestic rail and construction markets. The product mix overall
offers a weaker margin profile than other segments of the market,
such as flat products or steel for more advanced applications.
Strong domestic demand pushed up prices for long products in 2019,
but not enough to overtake the domestic premium for sheet
throughout the year.

Major Investments in Pipeline: Evraz intends to spend around USD1
billion capex p.a. over the next three years. Half of the capex is
for maintenance, and another USD165 million p.a. is for smaller
projects that target efficiencies and removal of bottlenecks. Major
growth investments planned for the next three years include a
USD500 million long rail mill in the US, USD180 million for
modernising the rail and beam mill at NTMK and USD650 million for a
2.5mt integrated flat casting and rolling facility at ZSMK. These
investments will improve the product mix and margin over the medium
term and strengthen its position in some of its key end-markets.

Broadly Stable Russian Steel Outlook: Fitch expects construction
activity in Russia to slow in 2020, and consequently flat or
slightly weaker demand for long products. Implementation of large
infrastructure projects will take time and hence provide support to
the steel industry only from 2021.

Limited Impact from Protectionism: Tariffs and anti-dumping
measures across the world are affecting supply chains and diverting
sales of steel products. In Europe, quotas on long product are
tighter than for flat products, but EVRAZ is not affected as it
only imports vanadium for processing in the Czech Republic.
Cancellation of tariffs between the US and Canada has supported
performance of EVRAZ's North American mills. Slabs are still
imported from Russia due to specific technical requirements for
procured supplies despite a 25% tariff, although these volumes are
not significant.

Its rating forecast does not factor in any reduction of EBITDA
linked to specific protectionist measures, but trade barriers will
reduce steel companies' flexibility to respond to changing demand.

DERIVATION SUMMARY

Evraz is one of the leading integrated long steel producers in
Russia, with top market positions for domestic rail and
construction steel as well as coking coal. Evraz produces vanadium
as a by-product at its NTMK plant. A combination of healthy margins
in the steel business, profitable coal mining in excess of own
requirements and high vanadium prices bolstered earnings in 2018.

EBITDA is normalising to lower levels due to a weaker macroeconomic
environment impacting steel and coal prices. Also, the strong
demand anticipated for vanadium after the introduction of the new
standard for high-tensile rebar in China failed to materialise, as
prices of vanadium fell sharply throughout 2019 (back to 2017
levels). Fitch forecasts EBITDA for 2019 at more than USD1 billion
below the 2018 peak of USD3.75 billion. Earnings for 2020 and
beyond are expected at USD2.1 billion-USD2.2 billion based on
mid-cycle price assumptions.

As with PJSC NLMK (BBB/Stable), PAO Severstal (BBB/Stable) and PJSC
MMK (BBB/Stable) EVRAZ benefits from a first quartile position on
the global cost curve for steel-making (on an integrated basis).
Relative to peers, EVRAZ has high exposure to long products (with
weaker margin profile than flat products), a higher proportion of
semi-finished products, a lower proportion of high value added
products and higher financial leverage. Evraz's earnings are more
variable than Severstal, MMK and NLMK (on an integrated basis after
normalising for the positive spike in vanadium prices towards
end-2018).

Iron ore is the most important resource for steel-making, followed
by coking coal. Evraz's iron ore mines show higher costs (based on
data provided by CRU Group) than major Russian and international
iron ore producers', whereas production of coking coal is
competitive and slightly ahead of Severstal. Overall, the cost
position of captive resources provides Severstal and NLMK with a
greater competitive advantage in steel production compared with
Evraz and MMK.

The evolution of the business profile of the peer group will depend
on the ability to sustainably improve their cost position, product
mix and operational flexibility through capex.

Evraz's 'BB+' IDR incorporates the higher-than-average systemic
risks associated with the Russian business and jurisdictional
environment, as do the ratings for the peers referred.

KEY ASSUMPTIONS

  - Hard coking coal price at USD140/tonne in 2020 and beyond;  
    iron ore price to decline to USD75/tonne in 2020, USD60/tonne
    in 2021 and USD55/tonne over the longer term

  - Vanadium (Ferrovanadium) prices of USD30-USD35/kg for the
    next three years

  - Russian steel volumes to incrementally increase over the next
    three years

  - Coal volumes to increase by low- to mid-single-digit
    percentage terms annually over the next three years

  - EBITDA/tonne for the Russian steel division to fall to around
    USD130 in 2021

  - EBITDA/tonne for the coal division to decrease to USD30-USD35
    for the next three years

  - Capex of USD1 billion per annum over 2020-2022

  - Dividends to absorb almost all residual cash flow, leaving FCF
    after dividends at neutral to slightly positive (USD100
million
    per annum) over the next three years

RATING SENSITIVITIES

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

  - FFO-adjusted gross leverage sustained below 1.75x
   (2019E: 2.4x)

  - FFO-adjusted net leverage sustained below 1.25x
    (2019E: 1.8x)

  - A more conservative financial policy

  - Fixed charge cover above 9.0x on a sustained basis
    (2019E: 6.5x)

  - Further strengthening of cost position in Russian
    steel, either through efficiencies achieved in the
    production of finished steel products or iron-ore
    supplies

  - Lower proportion of semi-finished products, higher
    proportion of value-added products and better
    diversification of end-markets enhancing earnings
    profile over time

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

  - FFO-adjusted gross leverage sustained above 2.5x

  - FFO-adjusted net leverage sustained above 2.0x

  - Negative FCF post-dividend

  - FFO fixed charge cover sustainably below 6.0x

LIQUIDITY AND DEBT STRUCTURE

Robust Liquidity Position: At end-June 2019, Evraz had available
USD876 million of cash and cash equivalents as well as USD300
million of committed and available asset-based lending facilities
with a 2022 maturity. The group is expected to generate
neutral-to-positive FCF after dividends over the coming years and
has refinanced its 2020 maturities. The business is funded well
into 2021 but Fitch would expect the group to address USD750
million Eurobond and RUB15 billion domestic bonds falling due in
March 2021 well in advance to maintain its healthy liquidity
headroom.

SUMMARY OF FINANCIAL ADJUSTMENTS

  - Fitch has reflected a hedged amount of USD265 million on the
balance sheet instead of the reported value of USD216 million due
to one rouble bond being converted with an asset swap into US
dollar funding.

  - Fitch has added the unamortised issue premium to reflect bond
notional at their nominal value.

ESG CONSIDERATIONS

Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of 3. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.


LENTA LIMITED: Moody's Withdraws Ba3 CFR for Business Reasons
-------------------------------------------------------------
Moody's Investors Service withdrawn Lenta Limited's Ba3 corporate
family rating, Ba3-PD probability of default rating, and stable
outlook.

RATINGS RATIONALE

Moody's has decided to withdraw the ratings for its own business
reasons.

Headquartered in Saint Petersburg, Lenta Limited is Russia's
fourth-largest food retailer by revenue, operating a chain of
hypermarkets and supermarkets. As of September 30, 2019, the
company operated 375 stores (1,471,647 square metres of selling
space, including 246 hypermarkets and 129 supermarkets) in 88
Russian cities and 12 distribution centres. For the 12 months ended
June 30, 2019, the company generated sales of RUB419.6 billion
($6.4 billion) and Moody's adjusted EBITDA of RUB43.1 billion ($0.7
billion).


PAO TMK: Moody's Affirms B1 CFR & Alters Outlook to Positive
------------------------------------------------------------
Moody's Investors Service affirmed the B1 corporate family rating,
B1-PD probability of default rating of PAO TMK, one of the world's
largest producers of steel pipe products for the oil and gas
industry. Concurrently Moody's affirmed the B1 senior unsecured
rating of the notes issued by TMK Capital S.A., a wholly owned
subsidiary of TMK. The outlook on the ratings has changed to
positive from stable.

"Our decision to change the outlook on TMK's ratings to positive
mainly reflects the fact that the company has closed the sale of
100% of shares in its US-based subsidiary IPSCO Tubulars Inc. to
Tenaris in January 2020 as well as our expectation that TMK will
use nearly all of cash proceeds from this deal of around $1.1
billion for debt repayment, which will lead to substantial
deleveraging" says Denis Perevezentsev, a Vice President-Senior
Credit Officer at Moody's.

RATINGS RATIONALE

In January 2020, TMK closed the sale of 100% stake in IPSCO
Tubulars Inc. to Tenaris, a leading supplier of tubes and related
services for the world's energy industry, for around $1.1 billion.
The transaction was signed in March 2019 and has been subject to
regulatory approvals since then, including by the US antitrust
authorities. Moody's expects that TMK will use nearly all of cash
received from this transaction for debt repayment. As a result,
TMK's leverage, as measured by Moody's adjusted debt/EBITDA, will
decrease to about 3.3x as of year-end 2020 from 5.4x as of
September 30, 2019, while TMK's interest coverage, as measured by
Moody's adjusted EBIT to interest expense, will improve to above
3.0x from 1.7x over the same period.

Repayment of upcoming debt maturities will reduce TMK's annual
interest expense by about $80 million - $100 million per year in
2020-21. This will improve the company's free cash flows and will
further the company's efforts to reduce its leverage. The
transaction will also strengthen TMK's liquidity and reduce
refinancing risks. As of September 30, 2019, the company had
significant debt maturities of about $1.4 billion until December
31, 2020, $912 million in 2021 and $751 million in 2022. Deal
proceeds, reinforced by cash balance of $267 million as of
September 30, 2019, available short-term and long term committed
facilities of around $0.9 billion as of the same date and operating
cash flows of about $0.5 billion, which Moody's expects the company
to generate from Q4 2019 through the end of 2020, will be
sufficient for the company to cover its upcoming debt maturities
and for funding its capital spending program, which will amount to
about $0.3-$0.4 billion during the same period.

Moody's expects that operating and financial performance of TMK in
the domestic market in Russia will remain strong backed by fairly
high oil prices, the growing share of horizontal drilling, and
increasing complexity of hydrocarbon production projects in Russia.
Moody's notes that despite the positive impact of the transaction
on the financial performance of TMK, it will reduce the company's
geographical diversification and increase its exposure to the
Russian market, where the launch of new capacities of welded and
seamless pipes in 2019-2023 will increase competition, reduce
capacity utilisation (currently, on average, below 50%) and will
pressure margins. The volumes of oil production and production
drilling are sensitive to the terms of OPEC+ agreement, which
constrains upside potential for Russian pipe producers. The company
has been addressing these challenges by continuing its focus on
premium products and services, including its proprietary premium
connections, with the market share in Russia estimated by the
company at about 74% in the nine months ending September 30, 2019.

In the 12 months ended September 30, 2019, TMK's Moody's-adjusted
EBITDA contracted to $629 million from $704 million in 2018 and
Moody's-adjusted EBITDA margin declined to 12.8% from 13.8% over
the same period mostly driven by poor performance of American and
European divisions. At the same time, TMK's Russian operations have
proved to be resilient due to a strong demand for OCTG pipes,
including high margin seamless pipes, where the company enjoys a
more than 60% market share in Russia. Moody's expects that the
disposal of volatile American division, and sustainable
profitability of its Russian division, supported by growing sales
of high margin products, will allow TMK to improve its Moody's
adjusted EBITDA to around $700 million and boost its profitability,
as measured by Moody's adjusted EBITDA margin, to above 16% in
2020, while the company will be able to generate positive free cash
flows in 2020 and 2021 backed by reduced capital spending and lower
interest expense.

RATIONALE FOR POSITIVE OUTLOOK

The positive outlook reflects Moody's expectation that the company
will be able to reduce its leverage towards 3.0x, as well as
Moody's expectation that TMK will continue to demonstrate a strong
operating performance and sustain its improved financial profile,
while maintaining healthy liquidity over the next 12-18 months.

WHAT COULD CHANGE THE RATINGS UP/DOWN

Moody's could upgrade TMK's ratings if the company were to (1)
reduce its Moody's-adjusted gross debt/EBITDA towards 3.0x; (2)
generate sustainable positive post-dividend free cash flow; and (3)
maintain healthy liquidity.

Moody's could downgrade the ratings if (1) the company were unable
to reduce its leverage, with Moody's-adjusted gross debt/EBITDA
above 4.5x on a sustained basis; (2) the company fails to generate
positive free cash flow on a sustained basis; or (3) its liquidity
were to deteriorate.

ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) CONSIDERATIONS

Steel is among the 11 sectors with an elevated credit exposure to
environmental risk, based on Moody's environmental risk heat map.
The global steel sector continues to face pressure to reduce CO2
and air pollution emissions and will likely incur costs to further
reduce these emissions, which could weigh on its profitability.
Additionally, the move to lighter-weight materials could lead to
lower intensity of steel usage. TMK has a fairly low exposure to
environmental risk, because the company's principal operations
include rolling and welding steel pipes, which have a significantly
lower environmental impact than steelmaking. Although TMK is
integrated into steelmaking, it produces steel via the electric arc
furnace route, which has a much lower carbon footprint than the
alternative blast furnace/basic oxygen furnace route. Environmental
projects are an essential component of TMK's development programs,
including its current strategic investment program. In 2018, TMK's
environmental expenditures totaled around $40 million and were
mainly focused on improving the environmental performance of
production processes, reducing water consumption, controlling air
pollution, and minimizing the amount of landfilled waste while
allocating necessary resources to these activities. Financing
environmental initiatives helps TMK's plants to comply with the
local environmental protection and safety laws, standards, and
regulations.

Governance risks are an important consideration for all debt
issuers and are relevant to bondholders and banks because
governance weaknesses can lead to a deterioration in a company's
credit quality, while governance strengths can benefit a company's
credit profile. Similarly to its domestic peers, TMK has a
concentrated ownership structure, with 65.1% of the company's
shares ultimately controlled by D.A. Pumpyanskiy. Concentrated
ownership structure creates the risk of rapid changes in the
company's strategy and development plans, revisions to its
financial policy and an increase in shareholder payouts that could
weaken the company's credit quality. The risk is mitigated by the
company's commitment to a conservative financial policy and
moderate shareholder distributions. Corporate governance function
is exercised through the oversight of independent members, which
make up five out of eleven of the board of directors' seats, as
well as via relevant board's committees chaired by independent
directors.

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Steel Industry
published in September 2017.

COMPANY PROFILE

TMK is Russia's largest and one of the world's largest producers of
steel pipe products for the oil and gas industry, operating across
Russia, Romania and Kazakhstan. The largest share of TMK's
shipments comprises high-margin OCTG, including tubing, casing and
drill pipes, complemented with line, large-diameter and industrial
pipes, as well as an entire range of premium connections. In the
first nine months of 2019, TMK sold 2.9 million tonnes of steel
pipes, including around 2.0 million tonnes of seamless pipes. In
the 12 months ended September 30, 2019, the company generated
revenue of $4.9 billion and Moody's-adjusted EBITDA of $629
million.


SOVCOM CAPITAL: Fitch Assigns B(EXP) Rating on Perpetual AT1 Notes
------------------------------------------------------------------
Fitch Ratings assigned SovCom Capital DAC's upcoming issue of US
dollar-denominated perpetual Additional Tier 1 notes an expected
long-term rating of 'B(EXP)'. SovCom Capital DAC, registered in
Ireland, is a financing special purpose entity of Russia-based PJSC
Sovcombank (BB+/Stable, bb+).The proceeds from the issue will be
used solely for financing a perpetual subordinated loan to SCB,
which will count as regulatory Tier 1 capital at the bank.

The amount of the issue is not yet defined. The notes will have no
established redemption date. However, SCB will have an option to
repay the notes every five years starting from 2025 subject to the
Central Bank of Russia's approval.

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

KEY RATING DRIVERS

The notes will be rated four notches below SCB's 'bb+' Viability
Rating. According to Fitch's Exposure Draft Bank Rating Criteria,
this is the highest possible rating that can be assigned to deeply
subordinated notes with fully discretionary coupon omission issued
by banks with a VR anchor of 'bb+'. The notching reflects the
notes' higher loss severity in light of their deep subordination
and additional non-performance risk relative to the VR given a high
write-down trigger and fully discretionary coupons.

The upcoming notes should qualify as AT1 capital in SCB's
regulatory accounts due to a full coupon omission option at the
bank's discretion and full or partial write-down in case either (i)
CET1 falls below 5.125% (versus a 4.5% regulatory minimum) for six
or more operational days in aggregate during any consecutive period
of 30 operational days; or (ii) the CBR approves a plan for the
participation of the CBR in bankruptcy prevention measures in
respect of SCB, or the Banking Supervision Committee of the CBR
approves a plan for the participation of the Deposit Insurance
Agency in bankruptcy prevention measures in respect of the bank.

Fitch expects any coupon omission to occur before the bank breaches
the notes' 5.125% CET1 trigger, which is more likely if the CET1
capital ratio falls below the minimum capital requirement with
buffers (7%, including capital conservation buffer of 2.5%
applicable from January 1, 2020). SCB is not included in the list
of Russia's domestically systemically important banks and does not
need to maintain a systemic importance buffer (1% starting from
January 1, 2020). The risk of coupon omission is reasonably
mitigated by SCB's stable financial profile, healthy profitability,
moderate growth and reasonable headroom over capital minimums
including buffers (consolidated CET1 ratio was 9.6% at end-3Q19,
comparing favourably with the minimum requirements).

RATING SENSITIVITIES

The issue rating could be downgraded if SCB's VR is downgraded.
This is not likely given the Stable Outlook on the bank's ratings.
If the VR is upgraded, similar rating action may be taken on the
notes.

Fitch may widen the rating notching if non-performance risk
increases. For example, this could arise if SCB fails to maintain
reasonable headroom over the minimum capital adequacy ratios
(including the buffers) or if the instrument becomes
non-performing, i.e. if the bank cancels any coupon payment or at
least partially writes off the principal. In that case, the AT1's
rating will be downgraded based on Fitch's expectations about the
form and duration of non-performance.

PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS

The expected long-term rating of SovCom Capital DAC's upcoming AT1
notes is notched four times from Sovcombank's VR.

ESG CONSIDERATIONS

Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of 3. ESG issues are credit-neutral
or have only a minimal credit impact on SCB, either due to their
nature or to the way in which they are being managed by the bank.


UC RUSAL: Fitch Alters Outlook on BB- LongTerm IDR to Negative
--------------------------------------------------------------
Fitch Ratings revised United Company RUSAL Plc's Outlook to
Negative from Stable and affirmed the metal group's Long-Term
Issuer Default Rating at 'BB-'. Fitch has also affirmed Rusal
Capital D.A.C.'s senior unsecured rating at 'BB-'/'RR4'.

The Outlook revision reflects the company's weakened operating and
financial profile due to prolonged low commodity prices, cost
inflation and slower-than-targeted debt reduction. This results in
an increase of funds from operations (FFO) adjusted gross leverage
above the range that Fitch considers as commensurate with the
rating until 2021.

The ratings of Rusal reflect a high debt burden, profitability
pressure and a challenging aluminium market. These are offset by a
competitive cost position, vertically integrated business profile,
and a leading market position. Rusal's stake in Norilsk Nickel (NN;
BBB-/Stable) also provides significant dividends and collateral
coverage. Its rating base case forecasts positive free cash flow
generation in the near term - despite substantial capex growth -
which Fitch expects to be partly directed to further debt
reduction.

KEY RATING DRIVERS

Profitability under Pressure: LME prices have fallen by over 15% in
2019, are expected to drop further in the short term before only
marginally recovering in the medium-term. This, together with an
increase in energy and raw material costs, will continue to exert
significant pressure on the profitability of Rusal's aluminium
smelters. This should prevent Rusal's profitability from returning
to its pre-US sanctions levels, and result in EBITDA margins of
10%-12% over the next three years compared with around 20% on
average for 2015-2018.

Leverage to Remain Elevated: Rusal's debt burden and leverage has
been high since the purchase of the NN stake in 2008. Despite
strong support from domestic banks and consistent deleveraging up
until last year, further meaningful debt reduction did not happen
in 2019, despite higher NN dividends. Weaker operating results and
higher capex raised FFO adjusted gross leverage to 4.7x and net
leverage to 3.7x in 2019, outside its respective 3.5x and 3.0x
sensitivities. Fitch does not expect leverage to ease back to
current rating thresholds until 2021.

Challenging Aluminium Market Fundamentals: Weakened aluminium
demand from automotive, construction and manufacturing, trade and
geopolitical tensions, insufficient supply discipline, and a
stronger US dollar will continue to weigh on aluminium prices in
the medium term. Nevertheless, Fitch expects falling input costs to
provide some support to producers' margins. Recent LME price gains
mainly stemmed from lower Chinese production due to several
production disruptions. Fitch expects rising smelter production
from China in 2020 on capacity additions to send another strong
bearish signal to the market.

Lower Aluminium Prices Forecast: Fitch revised its aluminium price
assumptions downward on November 6, 2019 and now expects LME prices
to average USD1,750/ton in 2020, USD1,800/ton in 2021 and
USD1,900/ton in 2022. Fitch sees risk of an intensification of a
trade/geopolitical war or a prolonged recession, which Fitch does
not incorporate into its forecast but which would put further
pressure on market conditions and could negatively affect the
company's ratings.

Large Dividend Source: Rusal effectively owns 27.82% of NN, a
leading producer of refined nickel and palladium. As of January 15,
2020, the market value of this stake was around USD14.3 billion,
covering 1.7x Rusal's debt at end-September 2019. NN has one of the
highest dividend pay-outs in the mining industry. Since 2017 NN
introduced a variable dividend pay-out of 30%-60% of EBITDA and
total minimum distributions payable of USD1 billion (USD278 million
Rusal's pre-tax share). Rusal received around USD1.1 billion of
dividends from NN for 2019. Fitch expects dividends to average
around USD1 billion a year in 2020-2021, contributing to debt
service and growth.

NN Shareholder Dispute Risk Receding: Fitch views that disputes
between NN's main shareholders, Rusal and Whiteleave Holdings Ltd
(34.6% stake at end-1H19), are unlikely to re-surface. The court
injunction prohibiting Whiteleave or its affiliates from buying NN
shares from the arbiter minority shareholder, Crispian Investment
Limited, the high NN market value and difficulty in securing
financing have greatly reduced the probability of a shoot-out
materialising. Fitch expects NN to be managed in line with its
development strategy and Rusal to continue benefiting from NN
dividends at least until 2022 when the existing dividend policy
agreement expires.

Higher Capex: Fitch expects capex in 2020-2022 to rise to about
USD1 billion - USD1.1 billion, above USD550 million - USD850
million in 2016-2018 and around USD920 million estimated in 2019.
This will be driven by investments in the Taishet aluminium smelter
and anode plant as well as the Dian Dian bauxite project in Guinea.
Despite higher capex Fitch forecasts FCF generation in the next two
years, which could be directed to service Rusal's debt. Fitch
believes that Rusal has the flexibility to postpone such growth
plans in case of need.

JV Financing Risk: The JV between Rusal and US-based Braidy
Industries to produce flat-rolled aluminium for the US automotive
industry should contribute to an increase in Rusal's value-added
product (VAP) share and margins. Rusal will supply aluminium from
its new Taishet smelter. The total project cost is around USD1.7
billion, of which USD200 million will be provided by Rusal (40%
stake), USD300 million by private-equity investors and the rest by
potential project finance. The structure of the project financing
is currently unclear as negotiations are still ongoing.

Vertically Integrated Business Model: Rusal operates throughout the
aluminium value chain with bauxite mining, alumina refining and
aluminium-smelting production. This provides some insulation to
input cost inflation. Its own alumina production covers more than
100% of its aluminium smelter needs. With the completion of the
second stage of the Dian Dian bauxite project in Guinea Rusal would
also be almost 100% bauxite self-sufficient at current production
levels.

Competitive Cost Advantage: Despite cost inflation, Rusal's
smelters continue to be positioned in the first quartile of the
global aluminium cost curve. Its smelters are located in Siberia
and source most of their electricity needs from the region's
hydroelectric power stations, benefiting from low electricity
costs, albeit higher than producers with their own captive power
plants.

Currency Risk Remains: Currency depreciation has helped Rusal to
offset certain adverse market movements in the past, but Fitch does
not foresee this trend to continue in any meaningful way. Fitch
forecasts a very modest continuation of depreciation, but
nonetheless see unfavourable FX movements as a real risk.

Leading Market Position: The ratings reflect Rusal's position as
the top aluminium producer in the world outside China and one of
the top three producers worldwide (after China Hongqiao Group
Limited and Aluminum Corporation of China Limited), accounting for
around 6% of the world's aluminium. It continues to expand its
footprint with the construction of the Taishet aluminium smelter,
which is expected to produce its first metal by end-2020, and its
new aluminium rolling mill in the JV with Braidy Industries.

DERIVATION SUMMARY

Comparable Fitch-rated peers to Rusal include China Hongqiao Group
Limited (BB-/Stable), Aluminium Corporation of China (Chalco;
A-/Stable) and Alcoa Corporation (BB+/Stable).

Hongqiao benefits from greater size, higher vertical integration
and stronger margins as a result of substantial economies of scale
and a captive energy base. Fitch expects Hongqiao to continue to
post positive FCF in the near term and FFO adjusted net leverage to
be at 2.4x-2.7x between 2019 and 2022. However, uncertainties
regarding the implications of potential surcharges on its captive
generation assets to the government, which could significantly
increase its production costs, constrain the company's ratings.

Chalco's ratings are equalised with those of 33% parent Chinalco
(A-/Stable), due to strong operational and strategic linkages in
line with Fitch's Parent and Subsidiary Rating Linkage Criteria.
Fitch's internal assessment of Chinalco's credit profile is based
on its Government-related Entities Rating Criteria and is derived
from China's (A+/Stable) rating, reflecting the state's strong
incentive to support the company. Chalco's standalone credit
profile is assessed at 'b+', one notch below Rusal's IDR due to
Chalco's weaker leverage metrics and significantly lower mix of
VAPs.

Alcoa's rating reflects a stronger financial profile than Rusal's
due to low debt levels, which position the company firmly against
'BB+' metals peers.

KEY ASSUMPTIONS

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

  - Fitch aluminium LME price assumptions at USD1,750/ton in 2020,
    USD1,800/ton in 2021, and USD1,900/ton in 2022

  - RUB/USD exchange rate of 66 in 2020 and 67 in 2021-2022

  - Aluminium production increases in 2021 due to the Taishet
    aluminium smelter

  - EBITDA margins at 9%-12% in 2019-2022

  - Capex in line with guidance

  - No dividend pay-out in 2019 and 2020
  
  - Reduction of net debt to about USD6 billion by 2021

RATING SENSITIVITIES

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

  - Tangible management actions to preserve cash flow to offset
    weaker market dynamics and towards further debt reduction
    translating into FFO-adjusted gross leverage at below 3.5x
    (4.7x expected at end-2019), and net leverage below 3.0x
    (3.7x estimated at end-2019) on a sustained basis.

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

  - FFO adjusted gross leverage sustained above 3.5x.

  - FFO adjusted net leverage sustained above 3x.

  - EBITDA margin below 10% on a sustained basis.

LIQUIDITY AND DEBT STRUCTURE

Adequate Liquidity: At end-September 2019, Rusal had around USD8.4
billion of balance-sheet debt. Rusal's total short-term debt during
the same period was USD676 million, compared with USD1.6 billion of
balance-sheet cash. Scheduled maturities are modest through to
2021. Near-term liquidity is also supported by FCF generation,
which Fitch forecasts at above USD1 billion in 2019-2020, including
dividends from NN. The company also benefits from strong access to
the domestic capital market, evidenced by its successful issuance
of two tranches of Russian bond in 2H19.

SUMMARY OF FINANCIAL ADJUSTMENTS

Fitch adjusted the 2018 balance-sheet debt by capitalising the
annual operating lease expense of USD16 million using a 6x
multiple. As a result, debt increased USD96 million. Fitch also
included USD121 million of off-balance sheet debt that contains
guarantees for the financing of the BoAZ smelter under the BEMO
JV.

ESG CONSIDERATIONS

Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of 3. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or to the way in which they are being
managed by the entity.

Rusal has an ESG Relevance Score of 4 for Governance Structure due
to its ownership concentration, which has negative impact on its
credit profile and is relevant to the ratings in conjunction with
other factors. In April 2018, the US Treasury Department of Foreign
Asset Control (OFAC) imposed sanctions on the company, effectively
targeting the majority shareholder Oleg Deripaska. Although the
sanctions were lifted in January 2019 after the company agreed a
corporate restructuring which ended Mr. Deripaska's control and a
Board which consists of a majority of independent directors, in
Fitch's view Rusal is still in a process of re-establishing a track
record of stable corporate governance. Rusal is subject to ongoing
compliance with OFAC and will face consequences should it fail to
comply.


UNITED CONFECTIONERS: Fitch Affirms B LongTerm IDR, Outlook Stable
------------------------------------------------------------------
Fitch Ratings affirmed Russia-based JSC Holding Company United
Confectioners' Long-Term Issuer Default Rating at 'B'. The Outlook
is Stable.

UC's 'B' rating continues to be constrained by weak corporate
governance practices while reflecting the company's strong business
profile and moderate leverage that are consistent with those of
higher-rated peers. The Stable Outlook reflects its expectation
that outflows to related parties will not increase and that the
company's funds from operations (FFO) adjusted leverage will remain
below 4x. A conservative balance sheet should enable UC to maintain
adequate access to external liquidity to refinance its short-term
debt.

Consistent evidence of improved governance practices, including a
record of restrained related-party transactions, and greater
financial transparency while maintaining a conservative financial
structure could result in a positive rating action over the medium
term.

KEY RATING DRIVERS

Promotion-Driven Market Growth: Russian confectionery sales volumes
grew in low single-digits in 2019, driven by producers' promotional
activities, while prices remained muted. Fitch expects consumer
sentiment in Russia to remain subdued in 2020 and strong
competition to continue in all segments of the confectionery
market. Fitch projects low-single digit revenue growth for
2020-2022, supported by new products launches, innovations and
sales initiatives.

Outperformance in 9M19: UC performed strongly in 9M19, ending
September 2019, with 2% volumes growth despite price increases for
its products and reported above-industry 6% revenue growth for the
period. However Fitch expects higher promotional activity, mainly
reflected in lower prices, in 4Q19 by UC and also by its
competitors to result in lower revenue growth for the full year.

Leader Despite Market Share Losses: UC's market share declined to
12.3% in 1H19 from 15% in 2015 and Fitch does not rule out further
erosion if the competitive environment does not improve.
Nevertheless, UC remains the market leader in its largest product
category of bulk sweets and among the top-5 in others. Fitch does
not envisage a material weakening in UC's market position due to
its strong portfolio of nationally recognised brands, large scale
across the major confectionery categories and a wide distribution
network across the country. Fitch therefore expects UC's business
profile to remain strong for the 'B' rating category over the
medium term.

Improving EBITDA Margin: Fitch estimates a mild recovery of EBITDA
margin in 2019 to 10.4% (2018: 9.7%), supported by price increases
for UC's products amid favourable raw materials prices. In addition
to cocoa and nuts prices remaining low in 2019, UC enjoyed a sharp
decline in sugar prices (9M19: 15.5% yoy) due to oversupply in the
country. These benefits are being partly offset by growing personal
and logistic costs as UC continues to develop its own distribution
network in Russia's regions.

Internal Initiatives to Aid Margin: Its medium-term expectations
for the EBITDA margin incorporate continuing competitive pressures
in the confectionery market and growing bargaining power of
retailers as the food retail market consolidates. Fitch expects
this to be partly offset by UC's efficiency initiatives, including
modernisation of production facilities and the agricultural
business planned for 2020, and a declining share of the low-margin
caramel business in revenue.

Loose Corporate Governance Practices: UC's 'B' rating continues to
be heavily influenced by weak corporate governance as this could
affect unsecured creditors. However, the company's credit metrics
and business profile are commensurate with a higher rating.
Sizeable loans to related parties, a lack of management and board
independence, and the portion of UC's cash being held at the
related Guta Bank are major rating constraints. However, there has
been no record of the related-party transactions materially
affecting the financial position or distorting the credit profile
of UC.

Reduced Free Cash Flow (FCF): Fitch projects neutral-to-negative
FCF in 2019-2022 as Fitch conservatively assumes high dividend
payments during the period of around RUB2 billion p.a. In 2017-2018
UC reduced loans to related parties, but simultaneously increased
dividend payments. Fitch understands from management that this
practice would continue, but conservatively assume RUB1 billion
outflow p.a. in related-party loans. Fitch positively views this
change as it increases the transparency and predictability of
distributions to shareholders. Sustained adherence to this policy
could positively impact Fitch's assessment of UC's corporate
governance risks.

Conservative Capital Structure: Fitch assumes that outflows to
shareholders and related parties will remain at manageable levels
over the medium term, allowing UC to maintain its funds from
operations (FFO) adjusted gross leverage below its negative rating
sensitivity of 4x (2018: 2.7x) and to retain adequate access to
bank financing. Fitch understands from management that Guta Group
remains committed to keeping UC's external debt burden at
manageable levels.

DERIVATION SUMMARY

UC is smaller than leading Latin American confectionery producer
Arcor S.A.I.C. (Local-Currency IDR B+/Negative) and is less
geographically diversified, but has similarly strong brands. UC has
comparable scale and single-country asset concentration to Turkish
food and beverage producer Yasar Holding A.S. (B−/Negative) but
has lower exposure to FX risks and a more conservative capital
structure. UC has weaker corporate governance than Arcor and Yasar,
which currently constrains its rating at 'B'.

KEY ASSUMPTIONS

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

  - Flat sales volumes in 2019 and low-single-digit growth in
2020-2022;

  - Selling price increasing below CPI in 2019-2022;

EBITDA margin of around 10.5% in 2019-2022;

  - Broadly stable costs for key raw materials;

  - Capex of RUB1.8 billion in 2019 increasing to RUB3 billion in
    2020 related to investments in efficiency and modernisation
    of production facilities, before moderating to around RUB2.5
    billion in 2021-2022; and

  - Total cash distributions to shareholders and related parties
    (dividends, loans to related parties and investments in
    non-core assets to support the strategy of Guta Group) of
    around RUB3 billion per year in 2019-2022.

RATING SENSITIVITIES

Developments That May Lead to Positive Rating Action

  - Consistent evidence of improved corporate governance
    practices, including a record of restrained related-party
    transactions and greater financial transparency

  - FFO adjusted gross leverage sustainably below 3.0x

  - EBITDA margin at least around 10% on a sustained basis
    (2018: 9.7%)

Developments That May Lead to Negative Rating Action

  - Sustained material deterioration in FCF generation, driven by
    operating underperformance

  - FFO adjusted gross leverage sustainably above 4.0x

  - Larger-than-expected distributions to Guta Group or material
    investments in non-core assets not offset by greater
    pre-dividend FCF

  - Deterioration in liquidity or inability to refinance
    short-term debt

LIQUIDITY AND DEBT STRUCTURE

Adequate Liquidity: At end-September 2019, Fitch-adjusted
unrestricted cash of RUB0.4 billion (excluding RUB0.8 billion cash
held in related party Guta Bank) and available undrawn committed
bank lines of RUB4.6 billion were sufficient to cover short-term
debt of RUB3.4 billion.

Liquidity and refinancing risks may increase in case of
larger-than-expected cash leakage to related parties, although this
is not what Fitch currently envisages.

SUMMARY OF FINANCIAL ADJUSTMENTS

Fitch adjusted debt by adding 6x annual operating lease expense
(2018: RUB320 million). The 6x lease multiple is standard for
companies operating in Russia.

Fitch adjusted available cash at end-2018 by deducting RUB1.2
billion for cash held at related-party bank.

ESG CONSIDERATIONS

Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of 3. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or to the way in which they are being
managed by the entity.

UC has an ESG Relevance Score of 5 for Governance Structure due to
the concentrated ownership, lack of board independence, complex
group structure and material related-party transactions, which has
a negative impact on the credit profile, and is highly relevant to
the rating, resulting in a lower rating.




===========
S E R B I A
===========

AGROKOR DD: Mercator Refinances Serbian Unit's Debt with AIK
------------------------------------------------------------
Marja Novak at Reuters reports that Slovenia's largest food
retailer Mercator refinanced a debt of its Serbian unit Mercator-S
to the value of EUR90 million (US$99.8 million) with Serbian bank
AIK, Mercator said on Jan. 22.

It did not give details of the deal but said the conditions of the
refinancing were "much more favourable" than those of the previous
syndicated loan which was taken in 2014 and would expire in March,
Reuters relates.

It added the refinancing will improve liquidity of the Serbian unit
over the next five years and enable further development of Mercator
in Serbia, Reuters notes.

Mercator and its indebted owner, Croatia's Agrokor, are in the
process of a major restructuring, Reuters discloses.

                        About Agrokor

Agrokor is a Croatian food company.  The company was put into state
administration in April 2017 and rescued after a settlement deal
among creditors a year ago.  The new owners changed the company's
name to Fortenova in April.


JUGOREMEDIJA: Swiss-Based Fund Files Attractive Offer for Assets
----------------------------------------------------------------
SeeNews, citing news agency Tanjug, reports that a Swiss-based
investment fund has filed the most attractive offer for the
acquisition of the assets of Serbian insolvent pharmaceutical
company Jugoremedija.

According to SeeNews, Tanjug quoted on Jan. 20 board president
Vladimir Savic as saying it is up to the board of creditors now to
decide whether Jugoremedija's assets will be sold or not.

Insolvency administrator Radovan Savic said last week
Jugoremedija's assets, including a factory in Zrenjanin, were
offered for sale through direct talks, which began earlier this
month, SeeNews recounts.

Mr. Pecikoza, as cited by SeeNews, said the board of creditors will
come up with a decision in the next few days, as the biggest
creditors from Turkey have asked to be given several days for
consultations.

Jugoremedija was declared bankrupt in 2012, SeeNews recounts.  The
Serbian government has held a total of seven unsuccessful tenders
for its sale since then, SeeNews discloses.  The most important
assets of the company are the industrial complex in Zrenjanin,
which comprises several facilities, as well as 24 trademarks, 28
motor vehicles, inventory and supplies, SeeNews states.




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

AERNNOVA AEROSPACE: Fitch Assigns 'B+(EXP)' LT IDR, Outlook Stable
------------------------------------------------------------------
Fitch Ratings assigned Aernnova Aerospace S.A.U. a Long-Term Issuer
Default Rating of 'B+(EXP)' with a Stable Outlook. In addition,
Fitch has assigned Aernnova's planned EUR490 million seven-year
Term Loan B a senior secured rating of 'BB(EXP)'/'RR2'. Final
ratings are subject to receipt of final documentation.

The rating is supported by the group's high and stable cash flow
generation, leading position in the aerostructures market, moderate
programme diversification, including presence on some successful
aircraft programmes such as the A350 and A320, and a long-term
relationship with its chief customer, Airbus.

The rating is constrained by the company's relative small scale,
limited product and customer diversification and somewhat high
leverage as a result of the proposed dividend recap. The expected
rating factors in its expectation that the group will prioritise
de-leveraging and growth ahead of shareholder returns from 2H20
onwards.

The Stable Outlook reflects its expectation that the company will
continue to generate strong cash flow margins (funds from
operations above 10% and free cash flow (FCF) above 3%) and expand
its business organically as production of certain key programmes
gradually increases.

KEY RATING DRIVERS

High Leverage: Fitch expects the proposed dividend recapitalisation
to result in FFO gross and net leverage of around 5.5x and 5x,
respectively, which will be a key rating constraint over the short
to medium term. These ratios are weak compared with most
Fitch-rated Aerospace and Defence companies, and broadly in line
with the 'B' mid-points of 6x and 5x, respectively, under Fitch's
Navigator tool for Aerospace and Defense.

Limited Business Profile: The ratings are constrained by the
company's narrow scale of operations, characterised by relatively
low product and end-market diversification, moderate commercial
aerospace programmes concentration and a low share of revenue
derived from aftermarket activities. The company has some
end-market exposure to non-aerospace sectors such as automotive,
although this is small.

Concentrated Customer Base: Aernnova's key customer is Airbus, from
which the company derives more than half of its revenue. This
presents high customer concentration risk, although this is
somewhat offset by the strong, long-term nature of the
relationship, the numerous successful Airbus programmes in which
Aernnova participates and the difficulty in replacing Aernnova in
the short term on most programmes.

Strong Aerospace Market Dynamics: The commercial aerospace market
has experienced very strong growth over the past 10 years, with
high global passenger growth numbers leading to unprecedented
demand for aircraft. At end-November 2019, the large commercial
aircraft backlog at Airbus and Boeing was over 13,000 units or over
seven years of production. This provides all companies in the
supply chain with good visibility over medium-term revenue and aids
strategic and investment decisions.

Robust Cash Flows: Aernnova's cash flow generation has been very
strong for the expected rating in recent years, although it is not
unusually high relative to some supplier sector peers. The FFO
margin has been between 14% and 18% in each of the past four years,
and although Fitch expects this to decline to around 11% over the
coming several years, it is still strong for the expected rating.
Similarly, Fitch expects FCF to remain in the range of 3%-6%, which
is considered strong for the rating.

Aernnova has consistently good underlying profitability of the
company and does not exhibit large working capital swings. Capex is
moderate at around 4%-5% of revenue and Fitch does not expect the
company to pay a regular dividend in the short to medium term.

Recovery Ratings Supported by Earnings Base: Fitch expects
Aernnova's planned EUR490 million senior secured TLB to have
superior recovery characteristics. Under its bespoke recovery
analysis, Fitch takes a going-concern approach, which it estimates
will lead to high recoveries for creditors given the group's
long-term track-record and sustainability of the business,
long-term relationships with its customers, and healthy FCF
generation.

Its going-concern value is estimated at around EUR440 million
assuming distressed EBITDA of about EUR100 million and an EV
multiple of 5.5x, and adjusting the value for potential factoring
drawdown of about EUR72 million.

Solid Liquidity Expected After Transaction Closing: Following the
closing of the proposed transaction, Fitch expects Aernnova to
exhibit solid liquidity, supported by committed revolving credit
lines of EUR100 million, a back-dated debt maturity profile and
high expected FCF generation. The company will need to regularly
repay the amortising loans from various public institutions, but
Fitch does not expect this to be burdensome.

DERIVATION SUMMARY

The FFO and FCF margins Aernnova generates are comparable with
those of 'BBB' category peers, including MTU Aero Engines AG
(BBB/Stable) and Leonardo S.p.A. (BBB-/Stable), but lower than
other aerospace suppliers such as TransDigm Inc., which reports
double-digit margins thanks to production of more value-added
components. In terms of scale, Aernnova is considerably smaller
than rated peers, including GKN Aerospace Services Limited
(BB/Stable).

In addition, Aernnova's rating is constrained by a weaker capital
structure with expected FFO gross leverage of 5.5x in 2020-2021,
versus 1.1x as at end-2018 for MTU Aero Engines and 3.2x for
Leonardo. High leverage is not uncommon for companies in the 'B'
rating category and Aernnova's leverage compares favourably with
peers such as TransDigm with reported FFO gross leverage of 7.7x as
at end-2018.

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

KEY ASSUMPTIONS

  - Materially increased revenue in 2020 as a result of a new
plant
    acquisition in UK. Single-digit revenue growth in subsequent
years
    averaging around 3% per year

  - Lower EBITDA margin from 2020 onwards of around 16% as a
result
    of agreed discounts with the customers and lower profitability
    under certain programmes as well as the less-profitable
    performance of the acquired plant in the UK

  - Ongoing capex of between 4%-5% of revenue

  - No further material M&A activity

  - No regular dividend payments

Key Recovery Rating Assumptions:

The recovery analysis assumes that the company would be considered
a going concern in bankruptcy and that it would be reorganised
rather than liquidated

A 10% administrative claim

An enterprise value multiple of 5.5x is used to calculate a
post-reorganisation valuation, and is comparable with multiples
applied to other aerospace & defence peers

Fitch deducts EUR72 million from the EV relating to the company's
various factoring facilities

Fitch estimates the total amount of senior secured debt for claims
at EUR590 million which includes planned TLB of EUR490 million and
revolving credit facility of EUR100 million

The waterfall results in 'RR2' recovery for senior secured TLB and
RCF

RATING SENSITIVITIES

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

  - Increased customer and end-market diversification

  - Fitch-defined FFO gross leverage below 5x on sustained basis

  - FCF above 5% on sustained basis

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

  - Fitch-defined FFO gross leverage above 6x on sustained basis

  - FCF margin under 3% on sustained basis

  - FFO margin under 10%

LIQUIDITY AND DEBT STRUCTURE

Liquidity To Improve: Following refinancing, Fitch expects Aernnova
to have adequate liquidity, as Fitch expects the company to
maintain modest cash balances, maintain an undrawn RCF of EUR100
million and maintain a high FCF margin, offsetting the amortisation
of public institution debt that Fitch expects to be paid from cash
flow. Fitch also assumes that all outstanding commercial paper will
be repaid. After the proposed refinancing, the group's debt
maturity profile will also improve considerably, with virtually all
of its debt maturing in 2027.

ESG CONSIDERATIONS

Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or to the way in which they are being
managed by the entity.


DEOLEO SA: S&P Lowers ICR to 'SD' on Agreed Debt Restructuring
--------------------------------------------------------------
S&P Global Ratings lowered the issuer credit rating on Deoleo S.A.
to 'SD' from 'CC' and removed it from CreditWatch, where S&P placed
it with negative implications on Sept. 13, 2019.

S&P is also lowering its issue ratings on the company's revolving
credit facility (RCF), first-lien notes, and second-lien notes to
'D' from 'CC'. S&P's recovery ratings on all rated debt are
unchanged.

The downgrade follows Deoleo's public announcement that a majority
of its shareholders has approved certain conditions required for
the restructuring of its syndicated debt to take place. This
follows Deoleo's agreement with main syndicated creditors, which
took place on Sept. 26, 2019. S&P thinks the syndicated debt is now
de facto restructured, since both syndicated creditors and
shareholders have approved decisive steps of the restructuring
process.

As part of the agreement, the syndicated debt will reduce by EUR333
million thanks to a debt-to-equity swap of up to EUR283 million and
a capital increase of up to EUR50 million. As a result of this,
syndicated creditors will acquire 49% of the capital of the
operating business. The remainder of the current debt, EUR242
million, will remain as long-term financial debt with significantly
extended maturities compared to the current ones. S&P also notes
there will be an equity segregation of Deoleo in favor of a new
legal entity.

S&P said, "Under our criteria, we consider the distressed
debt-to-equity swap to be tantamount to a default because
syndicated creditors will receive less value than originally
expected under the RCF, first-lien, and second-lien debt
instruments.

"We think the recapitalization will enable the group to focus on
necessary investments to turn the business around and provide it
with greater financial flexibility. The restructuring process does
not affect the group's nonsyndicated debt."


LECTA SA: Moody's Affirms Caa3 CFR, Outlook Negative
----------------------------------------------------
Moody's Investors Service affirmed the Ca-PD probability of default
rating of Lecta S.A. and appended the rating with a "/LD"
designation. Concurrently, the rating agency has affirmed the
company's Caa3 corporate family rating and the Ca rating on the
EUR225 million floating rate senior notes due 2022 and Ca rating on
the EUR375 million fix rate senior notes due 2023. The outlook
remains negative.

The appending of the /LD designation indicates a limited default,
reflecting the failure to cure the missed interest payment for the
existing floating rate notes due November 4, 2019 within the 30 day
grace period.

The /LD will remain in place until the company completes the
proposed restructuring of its capital structure.

RATINGS RATIONALE

The rating action reflects Moody's view that the missed interest
payment constitutes an event of default under Moody's definitions.
The ratings continue to reflect in particular the expectation that
notes holders will suffer a severe haircut on the nominal amount
following the recapitalization, not fully offset by the fact they
will receive shares in the company as well as subordinated notes.
The one notch difference of the senior secured notes rating
compared with the CFR reflects Moody's expectation that note
holders will suffer significant losses from the restructuring while
other liabilities might not be affected by a haircut.

OUTLOOK

The negative outlook reflects a degree of uncertainty around the
execution of the announced debt restructuring transaction which, if
not successful, could result in a potentially lower recovery.

WHAT COULD CHANGE THE RATINGS UP/DOWN

Lecta's ratings could be upgraded after the distressed exchange as
the capital structure will be more sustainable, and if Lecta's
operating performance were to improve driven by successfully
executed cost cutting plans and conversion projects. The ratings
could be downgraded in case expected losses for creditors would
increase versus what is currently expected.

LIST OF AFFECTED RATINGS:

Issuer: Lecta S.A.

Affirmations:

  LT Corporate Family Rating, Affirmed Caa3

  Probability of Default Rating, Affirmed Ca-PD /LD
  (/LD appended)

  BACKED Senior Secured Regular Bond/Debenture, Affirmed Ca

Outlook Actions:

  Outlook, Remains Negative


MEIF 5 ARENA: S&P Affirms 'BB' ICR on Proposed Refinancing
----------------------------------------------------------
S&P Global Ratings affirmed its 'BB' long-term issuer credit rating
on Iberian car park company MEIF 5 Arena Holdings SLU (MEIF 5) and
assigned its 'BB' issue ratings, with a '4' recovery rating, to the
proposed senior secured fixed- and floating-rate notes.

The proposed refinancing will increase leverage to 2017 levels,
which is just above S&P's previous expectations, but the company's
fundamentals support some deleveraging.

S&P said, "In our view, the proposed refinancing will reduce MEIF
5's already limited rating headroom, since it will increase the
company's debt burden despite the increase in maturity and lower
cost of debt. The proposed refinancing includes EUR575 million of
senior secured notes (to be split between fixed-rate and
floating-rate tranches) as well as a new revolving credit facility
(RCF), which has increased to EUR100 million from EUR75 million.
Notably, the transaction will lead to an increase in adjusted debt
to EBITDA to 7.7x in 2020 from our 2019 expectation of 7.5x for the
2018-2020 period. However, we believe the company's improving
profitability and stable cash generation will support a gradual
recovery of its financial metrics in line with the current rating
of at least 7.5x. This assumption does not include any additional
debt-funded acquisitions or shareholder returns over the next few
years. Therefore, we expect the company to continue balancing its
growth strategy and shareholder returns to preserve its
creditworthiness. Empark has demonstrated a positive track record
of delivering strong operational results, with a 10% compound
annual growth for reported EBITDA since its acquisition by MEIF 5,
a fund managed by Macquarie Infrastructure and Real Estate Assets
(MIRA), in December 2017.

"We continue to expect shareholder distributions to be calibrated
to accommodate the company's expansion strategy and a leverage
ratio broadly commensurate with its current rating level.

"The affirmation also reflects our understanding that the company's
financial policy hasn't changed. We understand that shareholder
distributions will remain flexible and dependent on business
conditions--in particular the gaining of new business to replace
expiring contracts--and that shareholders are committed to
maintaining prudent leverage. Contrarily, we see an ongoing risk
that continued growth--as demonstrated in 2018 and 2019--will be
used for further shareholder remuneration rather than leverage
reduction, thereby constraining rating upside. In our base case, we
expect S&P Global Ratings-adjusted debt to EBITDA to slightly
increase above 7.5x over 2020-2021 from 6.8x at year-end 2018. We
expect FFO to debt to strengthen and remain at about 10% over this
period, which supports the current rating level."

Operating performance continues to improve due to the focus on
off-street contracts in the Iberian Peninsula and initiatives to
improve revenue and yield.

S&P said, "We expect MEIF 5's operating performance to improve on
the back of the profitability-driven management of its contracts
and reduced overheads due to scale and optimization, which will
lead to an improved EBITDA margin of 45%-50% in 2020-2021 from 40%
in 2018. This reflects the consolidated size of MEIF 5 in the
Iberian markets, supported by the expectation of profitable
renewals and new concessions, as well as new product offerings to
maximize its average ticket price and face upcoming challenges in
the car park industry from electric, shared, and autonomous
vehicles.

"The stable outlook reflects our base-case expectations that MEIF 5
will be able to maintain adjusted FFO to debt of close to 10% and
adjusted debt to EBITDA of close to 7.5x, considering the company's
capital expenditure (capex) and distribution discretion. Rating
headroom is tighter following the new debt issuance, but we still
expect the owners will balance shareholder distributions and growth
to preserve the current rating.

"We could take a negative rating action on MEIF 5 if the
deleveraging path takes longer than anticipated, or if its
weighted-average debt to EBITDA increased above 7.5x without any
expectation of deleveraging. We expect this could materialize if
the shareholder's financial policy increased shareholder
distributions at the expense of leverage ratios. We could also take
a negative rating action if the company's FFO to debt declined
toward 7%. In our view, this would likely result from an EBITDA
decline due to deteriorating macroeconomic conditions in the
Iberian Peninsula, or the company's inability to renew concessions
and expand the portfolio.

"A positive rating action is unlikely. That said, we could upgrade
the company if it was able to deliver and sustain adjusted debt to
EBITDA below 6.0x. In our view, this would require it to calibrate
shareholder distributions accordingly, while continuing to deliver
EBITDA growth."




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

73 RETAIL: Files for CVA, Timberland to Close 12 UK Stores
----------------------------------------------------------
Emma Elgee at SomersetLive reports that Timberland has announced it
will close 12 UK stores.

The global footwear has said that 12 stores, owned by their
business partner, 73 Retail, are set for the axe, SomersetLive
relates.

The news comes after the Bath store appeared to close suddenly on
Tuesday, Jan. 21, SomersetLive notes.

According to SomersetLive, Timberland has said its business partner
-- 73 Retail -- filed for Company Voluntary Arrangements to help
the company pay its debts.

The decision comes after "tough market conditions, industry
volatility and business trends", SomersetLive states.

73 Retail is also closing some The North Face and Havaianas stores
although precise numbers are not known at this time, SomersetLive
discloses.


HANDMADE BURGER: Enters Administration, 283 Jobs Affected
---------------------------------------------------------
Scott Reid at The Scotsman reports that The Handmade Burger Co has
become the latest victim of the "casual dining" downturn, closing
all of its restaurants, including four in Scotland.

The firm called in administrators who have been unable to secure a
sale of the business, The Scotsman relates.  As a result, all 18
restaurants across the UK have shut with the loss of 283 jobs, The
Scotsman discloses.

According to The Scotsman, joint administrator David Griffiths,
from Leonard Curtis Business Rescue & Recovery, said: "The casual
dining market in the UK has experienced significant challenges over
the last four years, largely as a result of overcapacity in the
sector, which has resulted in a significant number of
insolvencies.

"Sales at Handmade Burger Co restaurants have almost halved during
this period, which has proved to be unsustainable.

"It is disappointing that circumstances have meant that a sale of
the business has not been possible in this case, but our focus now
should be on those employees affected by this difficult news.  We
will work hard to provide them with all necessary assistance to
claim for monies which remain due to them."

The Handmade Burger Co has gone through a previous restructuring,
The Scotsman notes.


MACCLESFIELD FOOTBALL CLUB: Judge Adjourns Winding Up Petition
--------------------------------------------------------------
CheshireLive reports that a judge has adjourned a bid to wind up
League Two football club Macclesfield Town.

According to CheshireLive, Judge Mark Mullen considered the case at
a hearing in the specialist Insolvency and Companies Court in
London on January 15.

He said it would be reconsidered on March 25, the report relates.

CheshireLive says tax officials have asked for the Silkmen, who are
third from bottom of League Two - football's fourth tier - to be
wound up because debts have not been paid, the report says.

CheshireLive relates that former manager Sol Campbell has supported
that application.

Mr. Campbell managed Macclesfield between November 2018 and August
2019, and subsequently took over at Southend United.

Judges have been told that Macclesfield bosses owe a "very large"
amount of tax and owe Mr. Campbell more than GBP180,000, the report
relays.

According to the report, a lawyer representing HM Revenue and
Customs asked Judge Mullen on Jan. 15 to adjourn the case to give
Macclesfield bosses time to settle debts.

A lawyer representing Macclesfield told Judge Mullen that the club
intends to sell shares and an offer has been accepted.

The case was last heard in court in December, when it was adjourned
for the ninth time on that occasion, adds CheshireLive.


VICTORIA PLC: S&P Retains BB- on Sec. Notes After Proposed Tap
--------------------------------------------------------------
S&P Global Ratings said its 'BB-' issue rating on UK-based flooring
products provider Victoria PLC's (BB-/Stable/--) senior secured
notes is unchanged following the announcement of a proposed EUR170
million (GBP146 million equivalent) tap. S&P understands the
company will use the proceeds to repay its GBP143 million
outstanding term loan A and pay related fees and expenses. Victoria
also intends to increase the size of its available revolving credit
facility (RCF), which will become super senior in priority of
payment, to GBP75 million from GBP60 million.

The recovery rating on the senior secured notes is '3', reflecting
S&P's expectation of meaningful recovery prospects (50%-70%;
rounded estimate 50%) and is constrained by the larger size of the
priority-ranking RCF.

Victoria is a U.K.-based designer, manufacturer, and distributor of
flooring products. The group produces a range of carpets, ceramic
tiles, underlays, luxury vinyl tiles, artificial grass, and
flooring accessories.

S&P said, "On Sept. 30, 2019, Victoria reported solid first-half
results in line with our expectations for fiscal 2020 (ending March
31, 2020). Consequently, we continue to expect 12%-14% sales growth
for fiscal 2020, supported by the full-year integration of recent
acquisitions but partly offset by more challenging market
conditions in Australia. We remain confident that S&P Global
Ratings-adjusted EBITDA margin will increase to 17.5%-18.0%,
reflecting the integration of the more profitable ceramic tiles
businesses. For the full fiscal year, we maintain our forecast of
GBP40 million-GBP45 million of free operating cash flow and
3.5x-4.0x S&P Global Ratings-adjusted debt to EBITDA. Our rating
also factors potential large debt-financed acquisitions, since the
group intends to consolidate the sector in Europe."

Victoria's strengths include its strong and established network of
small specialists and independent retailers, which allows the
company to react quickly to changes in market dynamics and provides
some bargaining power. Additionally, the ongoing shift in product
mix toward higher-margin ceramic tiles is positive for the
company's overall profitability. However, Victoria is also exposed
to commodity price risk, since it uses raw materials such as
synthetic yarn that are prone to price volatility. That said, the
company is more diversified in raw material sourcing than rivals
only operating in the soft flooring segment. S&P continues to see
limited product and technological differentiation that would create
barriers to entry for potential new competitors, although the
company's network of specialists and independent retailers would be
difficult to replicate.




===============
X X X X X X X X
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[*] BOOK REVIEW: Hospitals, Health and People
---------------------------------------------
Author: Albert W. Snoke, M.D.
Publisher: Beard Books
Softcover: 232 pages
List Price: $34.95
Order your personal copy today at
http://www.beardbooks.com/beardbooks/hospitals_health_and_people.html
Hospitals, Health and People is an interesting and very readable
account of the career of a hospital administrator and physician
from the 1930's through the 1980's, the formative years of today's
health care system. Although much has changed in hospital
administration and health care since the book was first published
in 1987, Dr. Snoke's discussion of the evolution of the modern
hospital provides a unique and very valuable perspective for
readers who wish to better understand the forces at work in our
current health care system.

The first half of Hospitals, Health and People is devoted to the
functional parts of the hospital system, as observed by Dr. Snoke
between the late 1930's through 1969, when he served first as
assistant director of the Strong Memorial Hospital in Rochester,
New York, and then as the director of the Grace-New Haven Hospital
in Connecticut. In these first chapters, Dr. Snoke examines the
evolution and institutionalization of a number of aspects of the
hospital system, including the financial and community
responsibilities of the hospital administrator, education and
training in hospital administration, the role of the governing
board of a hospital, the dynamics between the hospital
administrator and the medical staff, and the unique role of the
teaching hospital.

The importance of Hospitals, Health and People for today's readers
is due in large part to the author's pivotal role in creating the
modern-day hospital. Dr. Snoke and others in similar positions
played a large part in advocating or forcing change in our hospital
system, particularly in recognizing the importance of the nursing
profession and the contributions of non-physician professionals,
such as psychologists, hearing and speech specialists, and social
workers, to the overall care of the patient. Throughout the first
chapters, there are also many observations on the factors that are
contributing to today's cost of care. Malpractice is just one
example. According to Dr. Snoke, "malpractice premiums were
negligible in the 1950's and 1960's. In 1970, Yale-New Haven's
annual malpractice premiums had mounted to about $150,000." By the
time of the first publication of the book, the hospital's premiums
were costing about $10 million a year.

In the second half of Hospitals, Health and People, Dr. Snoke
addresses the national health care system as we've come to know it,
including insurance and cost containment; the role of the
government in health care; health care for the elderly; home health
care; and the changing role of ethics in health care. It is
particularly interesting to note the role that Senator Wilbur Mills
from Arkansas played in the allocation of costs of hospital-based
specialty components under Part B rather than Part A of the
Medicare bill. Dr. Snoke comments: "This was considered a great
victory by the hospital-based specialists. I was disappointed
because I knew it would cause confusion in working relationships
between hospitals and specialists and among patients covered by
Medicare. I was also concerned about potential cost increases. My
fears were realized. Not only have health costs increased in
certain areas more than anticipated, but confusion is rampant among
the elderly patients and their families, as well as in hospital
business offices and among physicians' secretaries." This aspect of
Medicare caused such confusion that Congress amended Medicare in
1967 to provide that the professional components of radiological
and pathological in-hospital services be reimbursed as if they were
hospital services under Part A rather than part of the co-payment
provisions of Part B.

At the start of his book, Dr. Snoke refers to a small statue,
Discharged Cured, which was given to him in the late 1940's by a
fellow physician, Dr. Jack Masur. Dr. Snoke explains the
significance the statue held for him throughout his professional
career by quoting from an article by Dr. Masur: "The whole question
of the responsibility of the physician, of the hospital, of the
health agency, brings vividly to mind a small statue which I saw a
great many years ago.it is a pathetic little figure of a man, coat
collar turned up and shoulders hunched against the chill winds,
clutching his belongings in a paper bag-shaking, tremulous,
discouraged. He's clearly unfit for work-no employer would dare to
take a chance on hiring him. You know that he will need much more
help before he can face the world with shoulders back and
confidence in himself. The statuette epitomizes the task of medical
rehabilitation: to bridge the gap between the sick and a job."

It is clear that Dr. Snoke devoted his life to exactly that
purpose. Although there is much to criticize in our current
healthcare system, the wellness concept that we expect and accept
today as part of our medical care was almost nonexistent when Dr.
Snoke began his career in the 1930's. Throughout his 50 years in
hospital administration, Dr. Snoke frequently had to focus on the
big picture and the bottom line. He never forgot the importance of
Discharged Cured, however, and his book provides us with a great
appreciation of how compassionate administrators such as Dr. Snoke
have contributed to the state of patient care today.

Albert Waldo Snoke was director of the Grace-New Haven Hospital in
New Haven, Connecticut from 1946 until 1969. In New Haven, Dr.
Snoke also taught hospital administration at Yale University and
oversaw the development of the Yale-New Haven Hospital, serving as
its executive director from 1965-1968. From 1969-1973, Dr. Snoke
worked in Illinois as coordinator of health services in the Office
of the Governor and later as acting executive director of the
Illinois Comprehensive State Health Planning Agency. Dr. Snoke died
in April 1988.



                           *********


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

Troubled Company Reporter-Europe is a daily newsletter co-
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Marites O. Claro, Rousel Elaine T. Fernandez, Joy A. Agravante,
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Editors.

Copyright 2020.  All rights reserved.  ISSN 1529-2754.

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