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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

          Wednesday, February 19, 2020, Vol. 21, No. 36

                           Headlines



B E L G I U M

ASIT BIOTECH: To Establish Plan of Judicial Reorganization


C Y P R U S

LAIKI BANK: ICSID Has Jurisdiction Over Investment Case v. Cyprus


G E O R G I A

GEORGIA: Fitch Affirms BB LT Issuer Default Rating, Outlook Stable


G E R M A N Y

THYSSENKRUPP AG: Moody's Cuts CFR to B1 with Developing Outlook


L U X E M B O U R G

PACIFIC DRILLING: Subsidiaries Appeal Arbitration Award in London


N O R W A Y

PGS ASA: S&P Assigns 'B' LT Issuer Credit Rating, Outlook Stable


R U S S I A

YUKOS: Dutch Court Upholds Appeal in US$50BB Compensation Case


T U R K E Y

DENZINBANK AS: Fitch Affirms B+ Foreign Curr. IDR, Outlook Stable
ING BANK: Fitch Affirms B+ Foreign Currency IDR, Outlook Stable
QNB FINANSBANK: Fitch Affirms B+ Foreign Curr. IDR, Outlook Stable
TURK EKONOMI: Fitch Affirms B+ Foreign Curr. IDR, Outlook Stable


U N I T E D   K I N G D O M

BURY FC: Owner Defaults on CVA to Settle GBP5-Million Debt
INOVYN LTD: S&P Alters Outlook to Stable & Affirms 'BB-' ICR
INTU: May Face Showdown with Investors Over Executive Pay
MAGENTA PLC 2020: DBRS Assigns Prov. BB Rating on Class E Notes
MICRO FOCUS: S&P Alters Outlook to Negative & Affirms 'BB-' ICR


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B E L G I U M
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ASIT BIOTECH: To Establish Plan of Judicial Reorganization
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ASIT biotech, a clinical stage biopharmaceutical company focused on
the research and development of breakthrough immunotherapy, obtains
the benefit of the judicial reorganization by collective agreement
in execution of the judgment delivered on February 11, 2020 by the
Commercial Court of Liege in application of the law of August 11,
2017 inserting Book XX "Insolvency of Enterprises" in the Code of
economic law (hereinafter the "Law"), as well as a suspension of
payment expiring on 11th June 2020.

According to the Law, ASIT biotech will establish a plan of
judicial reorganization explaining its proposal regarding the
conditions under which the Company's creditors will be repaid.
This plan will be deposit in the central solvency register at least
20 days prior to May 26, 2020, audience where it will be submitted
to the approval of the Company's creditors.

This judicial reorganization's procedure is an important step
allowing the management of ASIT biotech to explore strategic
options to preserve the interests of the creditors and shareholders
to the maximum extent possible.

                       About ASIT biotech

ASIT biotech  (BSE:ASIT) (Paris:ASIT) (ASIT - BE0974289218) --
http://www.asitbiotech.com-- is a Belgian clinical stage
biopharmaceutical company focused on the development and future
commercialization of a range of breakthrough immunotherapy products
for the treatment of allergies.  Thanks to its innovative ASIT+(TM)
technology platform, ASIT biotech is currently the only developer
of allergy immunotherapy (AIT) product candidates consisting of a
unique mixture of highly purified natural allergen fragments in an
optimal size selection. This innovation results in a short
treatment, expected to improve patient compliance and real-life
effectiveness.  ASIT biotech's product pipeline contains three
novel ASIT+(TM) product candidates targeting respiratory allergies
with the highest prevalence (i.e. grass pollen: gp-ASIT+(TM) -- in
ongoing phase III -- and house dust mite: hdm-ASIT+(TM)), and food
allergies (peanut allergy: pnt-ASIT+(TM)) that could significantly
expand the current immunotherapy market.  The Company believes that
its innovative ASIT+(TM) platform is flexible and would be
applicable across a range of allergies.




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C Y P R U S
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LAIKI BANK: ICSID Has Jurisdiction Over Investment Case v. Cyprus
-----------------------------------------------------------------
In a landmark decision issued Feb. 7, the International Centre for
Settlement of Investment Disputes, an international tribunal
affiliated with the World Bank, ruled that it has jurisdiction over
arbitration proceedings brought by Grant & Eisenhofer against the
Republic of Cyprus on behalf of almost 1,000 Greek bank depositors
and bondholders who claim heavy losses in the wake of Cyprus' 2013
financial crisis.

In a 160-page decision, the ICSID tribunal ruled that 956
investors' claims arise under identical treaty provisions, are all
based on Cyprus' 2013 actions against its banks, and affected all
claimants in similar fashion.  All claims were therefore held
sufficiently homogenous to proceed by way of a mass claim in a
single arbitration.  It is the first mass claim to do so since the
Argentinian bond cases.  The tribunal will now assess Cyprus'
liability for discriminating against foreign investors and illegal
expropriation without paying fair compensation.

Leading financial litigation law firms Grant & Eisenhofer; Kessler
Topaz Meltzer & Check; and Kyros Law; along with international law
firm Fietta LLP, represent the claimants, including Greek
individuals and institutional investors, in their efforts to
recover their losses, estimated at over EUR300 million.

The international investment arbitration proceeding was first filed
with ICSID in 2015 after the Cyprus government failed to negotiate
with investors seeking to recover their losses.  

Grant & Eisenhofer and their partner firms represent the 956 Greek
depositors and bondholders of Laiki Bank and the Bank of Cyprus
seeking to hold the Cypriot government accountable for its role in
causing investors' lost life savings, college funds and pensions
when they were wrongly confiscated by Cyprus, in violation of
international law, as part of its EUR10 billion bank "bail-in" and
restructuring of its financial sector.

Greek investors claim that they were discriminated against during
the bail-in.  Foreign investors were subject to extreme measures
while a number of Cypriot entities -- including the government
itself –- were intentionally shielded from such treatment.  While
the Cyprus crisis was a tragedy for everyone involved, foreigners
were hit twice as hard as the Cypriots themselves.

"This precedent-setting decision has major implications for
investor-state arbitration," said Olav Haazen, the Grant &
Eisenhofer director in charge of the matter.  At a time where
investor-state arbitration is under attack and the EU is trying to
put an end to bilateral investment treaties between member states,
the Adamakopoulos v. Cyprus decision catapults ICSID, once again,
to the forefront of international arbitration jurisprudence.

"It opens up a new avenue for smaller investors who were wronged by
foreign governments.  They can now join forces and seek collective
redress, even if the host states' own laws offer investors no
equivalent access to effective and impartial justice," Mr. Haazen
said.

He added, "This is a significant victory for Greek investors in
Cyprus who lost basically everything.  The actions of the
government of Cyprus during the bail-in amounted to
state-sanctioned theft.  We look forward to continuing this
litigation to recover the tremendous financial losses of the nearly
1,000 institutions and individuals."

The case is captioned: Theodoros Adamakopoulos and others v.
Republic of Cyprus (ICSID Case No. ARB/15/49)

Grant & Eisenhofer regularly represents U.S., European, Asian,
Australian, South American and other international institutional
investors.  The firm has successfully litigated major investor
lawsuits in Germany, France, the U.K. and the Netherlands.  That
includes leading coalitions of global investors in successfully
bringing securities class actions against Fortis in the Netherlands
and against Royal Bank of Scotland in the U.K., which were both
accused of vastly overstating their liquidity and understating
their exposure to the toxic U.S. subprime market. These
unprecedented actions led to settlements of $1.5 billion and $1
billion respectively -- among the largest securities fraud
settlementss ever in Europe.

                   About Grant & Eisenhofer P.A.

Grant & Eisenhofer -- http://www.gelaw.com-- is one of the
U.S.A.'s leading litigation firms, with a highly successful track
record representing plaintiffs in complex litigation and
arbitration matters.  The firm has offices in Wilmington
(Delaware), New York, and Chicago, and an international docket of
high-profile cases.  G&E's clients include institutional investors
and other plaintiffs in U.S. and international securities matters,
derivative and corporate governance lawsuits, shareholder activism
matters, bankruptcy litigation, antitrust actions, consumer class
actions, whistleblower cases involving the False Claims Act, mass
tort and environmental suits, birth injury litigation, intellectual
property disputes, and civil rights suits.  The firm has recovered
over $27 billion for clients in the last ten years, and has twice
been cited by RiskMetrics for securing the highest average investor
recovery in securities class actions.  G&E has been named one of
the country's top plaintiffs' law firms by The National Law Journal
for more than a decade, and was named one of the U.S.'s "Most
Feared Plaintiffs Firms" as well as one of Delaware's "Regional
Powerhouses for 2018" by Law360.

                      About Kessler Topaz

Kessler Topaz Meltzer & Check -- http://www.ktmc.com-- is one of
the largest firms in the world specializing in the prosecution of
complex litigation.  Since the Firm's founding in 1987, Kessler
Topaz has developed a global reputation for excellence in
shareholder, ERISA, consumer protection & antitrust, fiduciary and
whistleblower litigation.  With a large and sophisticated client
base, Kessler Topaz has been responsible for many of the largest
plaintiffs' recoveries on record in both the U.S. and around the
world.

                         About Kyros Law

The attorneys at Kyros Law Offices, including John Kyriakopoulos,
offer specialized knowledge with certified training accreditation
in Financial and Banking law, Capital Markets, Commercial,
Corporate, Labor and Administrative law.  Kyros Law has significant
experience providing top quality advice to institutional and
private investors, both Greek and foreign.  Through its strategic
alliances with prestigious law firms in the U.S. and Europe, the
Kyros Law is able to cater to the needs of its clients with
multifaceted and integrated solutions both in Greece and
internationally.  For more information, visit Kyros Law's U.S.
website at http://www.kyroslawoffices.comor its Greece website at
http://www.kyroslawoffices.gr

                          About Fietta LLP

Fietta -- http://www.fiettalaw.com-- is a law firm dedicated to
public international law.  It is acting as co-counsel with the
above firms in the ICSID arbitration that is pending against the
Republic of Cyprus.  A specialist boutique firm with a track record
of success, Fietta competes with the world's largest law firms and
international disputes practices.  The Firm has won landmark
victories in pioneering cases involving State boundaries and
territory, multi-billion-dollar investments, international
environmental law and human rights.  Fietta's lawyers bring
together a wide range of experience from top global law firms,
international organizations, and government.  




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G E O R G I A
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GEORGIA: Fitch Affirms BB LT Issuer Default Rating, Outlook Stable
------------------------------------------------------------------
Fitch Ratings affirmed Georgia's Long-Term Foreign Currency Issuer
Default Rating at 'BB' with a Stable Outlook.

KEY RATING DRIVERS

Georgia's ratings are supported by governance and business
environment indicators that are above the current medians of 'BB'
category peers, and a track record of macroeconomic resilience
against regional shocks. Confidence in the authorities' economic
strategy is also anchored by an IMF Extended Fund Facility (EFF)
programme. These credit strengths are balanced by government debt's
significant exposure to foreign-currency (FC) risk, high financial
dollarisation, and external finances that are significantly weaker
than the majority of 'BB' category rated peers'.

Georgia's economy has been resilient against a testing external
environment. Real GDP growth in 2019 is estimated by Fitch at 5.2%,
outperforming the agency's 4.3% projection, and up from 4.8% in
2018. The impact on Georgia's tourism sector (7.6% of GDP in 2018)
from Russia's flight embargo (in place since June 2019) has been
weaker-than-expected as higher visitor numbers from Turkey and the
EU have offset the fall in visitors from Russia. Despite weak
economic growth in some major export partners (e.g Azerbaijan,
Russia and Turkey), total export growth remained positive,
supported by a diverse base of export markets and depreciation of
the Georgian lari. Meanwhile, revised national accounts data,
starting from 2010, lifted nominal GDP by 8.6% as of 2018.

Economic growth is forecast by Fitch to ease to 4.4% in 2020; just
above the five-year average growth rate (4.2%) of 'BB' category
peers. The slower growth mainly reflects a weaker outlook for
domestic demand due to a tighter monetary policy. Downside risks
are significant. Ongoing uncertainty in global trade markets, in
addition to recent domestic social and political unrest, could
weigh on growth prospects, particularly investment. Inflows of
foreign direct investment (FDI) have slowed since mid-2018, partly
due to the winding down of the TANAP gas pipeline project, but also
due to a weak Turkish economy. The recent termination of contracts
to construct the Anaklia deep-sea port project has led Fitch to
lower its FDI projections.

Political uncertainty continues in the run-up to October's
parliamentary elections. Failure by the ruling Georgian Dream (GD)
party in November 2019 to pass promised legislative changes to the
electoral code has led to a boycott of parliament by the main
opposition party, United National Movement (UNM), as well as public
protests. Fluidity of developments leaves the election outcome
highly uncertain.

However, Fitch does not expect a material diversion away from
existing economic policy direction regardless of the election
result. The extension of the IMF programme until April 2021 will
help maintain policy credibility and direction of structural reform
through the electoral cycle.

Relations with Russia remain fragile. Notwithstanding the imposed
flight ban, sensitivity from geopolitical risks on domestic
politics and the economy remains a risk.

Headline inflation averaged 4.9% in 2019, reaching 7% in December
2019. Inflation in January 2020 eased slightly to 6.4%.
Inflationary pressures have been mainly driven by higher food
prices and a strong exchange rate pass-through as the lari
depreciated against the US dollar 7.1% in 2019 (affected by
domestic politics and the Russian flight ban). Georgia's real
effective exchange rate (REER) depreciated 5.3%.

Since September 2019, the National Bank of Georgia (NBG) has hiked
its benchmark rate four times (by a combined 250 bp), and in
keeping with its commitment towards maintaining exchange-rate
flexibility, interventions in the FX market have been small. At 9%,
the benchmark interest rate is currently at its highest since 2008.
The slowdown in domestic demand should help abate inflationary
pressures. Fitch does not envisage headline inflation to converge
towards the NBG target of 3% until 2021. Fitch forecasts inflation
to average 4.5% in 2020 and 3.2% in 2021. Fitch expects that the
NBG will likely maintain a proactive policy approach should further
price pressures from lari depreciation arise.

External vulnerabilities are a key rating weakness. The gross
external financing requirement was equivalent to 70% of
international reserves in 2019 and is set to rise in 2021 when a
USD500 million Eurobond matures. External liquidity, as measured by
the ratio of the country's liquid external assets-to- liquid
external liabilities, is weaker than peers' at 100.4% (vs 149% for
the 'BB' median) and net external debt-to-GDP is six times the
current 'BB' median ratio of 9.6% (estimate for 2019).

Georgia's current account deficit (CAD) in 2019 reached a
historical low of 4.5% of GDP by Fitch estimates; largely on
account of a smaller trade deficit as a result of weaker export
growth and contraction in imports. Fitch forecasts the CAD to reach
4.1% in 2020 and 4.2% in 2021, still significantly wider than the
median 2.6% of 'BB' category peers. Financing of the CAD is
expected to be covered by sustained net inflows of FDI, averaging
5% of GDP.

Fiscal performance has remained broadly in line with IMF programme
targets. Georgia's fiscal deficit-to- GDP (including budget
on-lending) is estimated to have reached 2.2% in 2019, within the
government target of 2.3%, and below the median 2.7% deficit of
'BB' category peers. For 2020, an augmented fiscal deficit target
(excluding budget on-lending) of 2.7% has been agreed, with a
ceiling on net budget on-lending of 0.2% of GDP for 1H20. This
follows an augmented fiscal deficit outturn of around 2% of GDP in
2019. Fitch considers that gains from improved revenue
administration and increase in excise duties will help partially
offset lower revenues from increased VAT refunds and lower grants.
Meanwhile, government expenditure will increase in education,
social benefits and pensions.

Government debt rose to 40.1% of GDP in 2019, as the impact from a
weaker lari offset a narrowing of the primary fiscal deficit. The
revised national accounts put debt/GDP closer to the 'BB' peer
median of 38.4%. IMF quantitative targets should help provide a
policy anchor to place debt on a downward trajectory in the medium
term, further supported by a moderate recovery of the domestic
currency. However, sensitivity of government debt to exchange-rate
shocks remains high given Georgia's large share of FC-denominated
debt (78%).

Georgia's banking sector is sound as reflected by Fitch's BSI score
of 'bb'. Capitalisation is high at 19.5% in 4Q19 and non-performing
loans account for 1.9% of total loans, according to IMF
methodology. Fitch's MPI score of 2* reflects a period of rapid
credit growth. New macro-prudential measures have slowed annual
household credit growth to 12% in December 2019, from 25% in
January 2018. However, lending to non-financial corporates remains
on an upward trend, with annual growth of 30% in December 2019,
compared with 12% in January 2018. Meanwhile, dollarisation remains
elevated at 61.2% of total deposits and 56.5% of loans (end-2Q19).

SOVEREIGN RATING MODEL (SRM) AND QUALITATIVE OVERLAY (QO)

Fitch's proprietary SRM assigns Georgia a score equivalent to a
rating of 'BB+' on the LTFC IDR scale.

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

  - External finances: -1 notch, to reflect that relative to its
peer group, Georgia has higher net external debt, structurally
larger CADs, and a large negative net international investment
position.

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

RATING SENSITIVITIES

The main factors that may, individually or collectively, lead to
positive rating action are:

  - A significant reduction in external vulnerability, stemming
from decreasing external indebtedness and rising external buffers.

  - Fiscal consolidation leading to a faster reduction in general
government debt and improvements in debt composition.

  - Stronger GDP growth prospects consistent with preserving macro
stability leading to higher GDP per capita.

The main factors that may, individually or collectively, lead to
negative rating action are:

  - An increase in external vulnerability, for example a sustained
widening of the CAD not financed by FDI.

  - Worsening of the budget deficit, leading to a sustained rise in
public indebtedness.

  - Deterioration in either the domestic or regional political
environment that affects economic policy-making, economic growth
and/or political stability.

KEY ASSUMPTIONS

The global economy performs in line with Fitch's Global Economic
Outlook, which forecasts eurozone growth at 1.1% in 2020 and 1.2%
in 2021

ESG CONSIDERATIONS

Georgia has an ESG Relevance Score of 5 for Political Stability and
Rights as World Bank Governance Indicators have the highest weight
in Fitch's SRM and are highly relevant to the rating and a key
rating driver with a high weight. Unresolved conflict with Russia
represents a risk to political stability.

Georgia has an ESG Relevance Score of 5 for Rule of Law,
Institutional & Regulatory Quality and Control of Corruption as
World Bank Governance Indicators have the highest weight in Fitch's
SRM and are therefore highly relevant to the rating and are a key
rating driver with a high weight.

Georgia has an ESG Relevance Score of 4 for Human Rights and
Political Freedoms as strong social stability and voice and
accountability are reflected in the World Bank Governance
Indicators that have the highest weight in the SRM. They are
relevant to the rating and a rating driver.

Georgia has an ESG Relevance Score of 4 for Creditor Rights as
willingness to service and repay debt is relevant to the rating and
is a rating driver for Georgia, as for all sovereigns.




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G E R M A N Y
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THYSSENKRUPP AG: Moody's Cuts CFR to B1 with Developing Outlook
---------------------------------------------------------------
Moody's Investors Service downgraded to B1 from Ba3 the corporate
family rating and to B1-PD from Ba3-PD the probability of default
rating of German steel and diversified industrial company
thyssenkrupp AG. Concurrently, Moody's downgraded to B1 from Ba3
the ratings on the group's senior unsecured debt instruments,
including the debt issuance programme. Moody's further affirmed the
short-term ratings of tk at NP/(P)NP. The outlook on all ratings
has been changed to developing from negative.

RATINGS RATIONALE

The downgrade to B1 reflects the further weakening operating
performance and negative free cash flow generation of tk with a
reduced likelihood of a material recovery over the next quarters
against Moody's previous expectation of a strengthening
profitability and cash generation. Credit metrics are currently
weaker than required for the B1 rating category but are expected to
be materially strengthened by the execution of upcoming asset
disposals. The assigned developing outlook balances the expected
positive impact from a timely execution of asset disposals and
upcoming cash inflows over the next quarters with the ongoing
challenges of a sustainable turnaround of profitability and free
cash flow generation of tk's residual businesses.

The downgrade follows tk's weak first quarter 2019/20 (Q1 2020)
results against persistent subdued demand, weak order intake,
especially from the automotive sector, combined with adverse price
effects in the steel and metals distribution businesses. Weaker
capacity utilization on lower volumes, depressed steel prices and
higher raw material costs particularly burdened profitability in
the Steel Europe (SE) business area, where EBIT as adjusted by the
company turned to EUR164 million negative in Q1 2020 from EUR38
million in the prior year. On a group level, company-adjusted EBIT
declined to EUR50 million in the same period, down 77%
year-over-year. At the same time, tk's free cash flow (FCF) before
M&A of EUR2.5 billion negative in Q1 2020, although including an
expected EUR370 million cartel fine payment, was weaker than
anticipated. Reported net debt, as a result, increased to a EUR7.1
billion as of December 31, 2019, including an around EUR1 billion
leasing liability following the first-time application of IFRS 16.

Although Moody's had expected adverse market conditions to continue
to burden tk's operating performance this year, the magnitude of
the earnings decline and cash drain in Q1 2020 was more severe than
anticipated. Acknowledging tk's confirmed full-year EBIT guidance
at around last year's level (EUR802 million), and FCF before M&A
below last year's EUR1.1 billion negative, achievability of these
targets appears increasingly ambitious. Particularly as to negative
FCF, the group's forecast still lacks a precise guidance, while the
additional cash drain this year could eventually turn out
significantly higher. Besides large-scale restructuring payments,
which tk expects in the mid 3-digit million euro range in financial
2020 (ended September 30, 2020), expected (seasonal) operational
improvements during the remainder of the year might be difficult to
achieve in light of an ongoing fragile business environment and
increasingly limited visibility, e.g. following the recent
Coronavirus outbreak in China.

Despite the ongoing high cash burn in this financial year, Moody's
liquidity assessment for tk remains still-adequate, albeit
predicated on the expectation of an at least partial sale of the
Elevator Technology (ET) business area, resulting in a
multi-billion euro cash injection during 2020. This assessment also
incorporates a successful near-term refinancing of upcoming debt
maturities, including the re-negotiation of the gearing covenant
well ahead of the next testing date at September 30, 2020 to
mitigate any risk of a potential breach.

Moody's assumes a material reduction of debt with proceeds from the
ET transaction, while sizeable cash needs for ongoing restructuring
in the coming years and a continued sluggish operating performance
have to be accommodated.

The developing outlook balances the potential for a substantial
strengthening of the balance sheet from a full disposal of ET,
which could be credit positive and the risk that scenarios not
leading to a material deleveraging could create further negative
rating pressure, while the B1 rating is very weakly positioned at
this point in time. Key factors in this respect mainly include (1)
the final decision by the group regarding the ET transaction (i.e.
full or partial sale), which management expects to communicate by
the end of February, (2) the amount and timing of related cash
proceeds, (3) the use of such proceeds, (4) other strategic
measures currently evaluated by management, if and when initiated,
and (5) the further development of tk's operating performance,
especially in its businesses other than ET.

WHAT COULD CHANGE THE RATING UP / DOWN

tk's rating could be downgraded, if (1) profitability could not be
improved above a Moody's-adjusted EBIT-margin of 2% in the
medium-term, be it due to continuous adverse market conditions or
ineffective restructuring, (2) leverage remained above 6x
Moody's-adjusted debt/EBITDA and RCF/Net Debt below 10% for a
prolonged time following the ET transaction, (3) free cash flow
remained negative until after financial year 2021/22; while taking
into account potentially considerably increased financial
flexibility following the ET transaction. Downward pressure would
further build if the ET transaction could not be successfully
executed in a timely manner or liquidity continued to deteriorate,
including in light of upcoming refinancing needs.

Moody's might upgrade tk's rating, if (1) profitability is
sustainably improved, especially in the group's non ET businesses,
(2) leverage reduces significantly from the current levels,
evidenced in Moody's adjusted debt/EBITDA falling well below 6x and
RCF/net debt improves to above 15% on a sustainable level following
the ET transaction, (3) free cash flow turned consistently positive
and a good liquidity profile is ensured.

LIST OF AFFECTED RATINGS

Issuer: thyssenkrupp AG

Affirmations:

Commercial Paper, Affirmed NP

Other Short-Term, Affirmed (P)NP

Downgrades:

LT Corporate Family Rating, Downgraded to B1 from Ba3

Probability of Default Rating, Downgraded to B1-PD from Ba3-PD

Senior Unsecured Medium-Term Note Program, Downgraded to (P)B1 from
(P)Ba3

Senior Unsecured Regular Bond/Debenture, Downgraded to B1 from Ba3

Outlook Action:

Outlook, Changed To Developing From Negative

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Global
Manufacturing Companies published in June 2017.

COMPANY PROFILE

Germany based thyssenkrupp AG is a diversified industrial
conglomerate operating in about 79 countries. In financial 2019
(ended September 30, 2019), tk reported revenue of EUR42 billion
and company-adjusted EBIT of EUR802 million. The group is engaged
in capital goods manufacturing through Elevator Technology (ET),
Plant Technology (PT), Marine Systems (MS), Automotive Technology
(AT) and Industrial Components (IC) divisions, as well as steel
manufacturing and steel related services through Steel Europe (SE)
and Materials Services (MX).




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L U X E M B O U R G
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PACIFIC DRILLING: Subsidiaries Appeal Arbitration Award in London
-----------------------------------------------------------------
Pacific Drilling S.A. (the "Company") on Feb. 11 disclosed that its
subsidiaries, Pacific Drilling VIII Limited ("PDVIII") and Pacific
Drilling Services, Inc. ("PDSI"), have filed an application with
the High Court in London for leave to appeal the award that has
been issued in the arbitration proceedings between PDVIII and PDSI
and Samsung Heavy Industries Co. Ltd. ("SHI") related to the
contract for the construction and sale of the Pacific Zonda.  As
previously disclosed, on January 15, 2020, an arbitration tribunal
in London, England (the "Tribunal") awarded SHI approximately $320
million with respect to its claims against PDVIII and PDSI.

Under the rules governing the arbitration proceedings, PDVIII and
PDSI have no automatic right to appeal and the grounds on which the
High Court in London may grant permission to appeal are limited.
There can be no assurance that permission to appeal will be
granted, or if granted, that the appeal will be successful.

As previously disclosed, in connection with the Company's now
concluded Chapter 11 proceedings, PDVIII and PDSI (the "Zonda
Debtors") filed a separate plan of reorganization (the "Zonda
Plan") under Chapter 11 of the U.S. Bankruptcy Code in the United
States Bankruptcy Court for the Southern District of New York,
which was confirmed on January 30, 2019.  If the Zonda Debtors are
successful in the appeal, they will emerge from their separate
bankruptcy proceedings.  If the Zonda Debtors are unsuccessful in
the appeal, the Company expects the Zonda Debtors, which have
approximately $4.5 million in cash and no other material assets,
will be liquidated in accordance with the terms of the Zonda Plan.
The Company does not expect the Tribunal's decision to have any
material adverse effect on its operations or to cause any default
under any of its material contracts including under the indentures
for its outstanding notes.

                     About Pacific Drilling

Pacific Drilling S.A. (OTC: PACDQ) (NYSE: PACD), a Luxembourg
public limited liability company (societe anonyme), operates an
international offshore drilling business that specializes in
ultra-deepwater and complex well construction services. Pacific
Drilling -- http://www.pacificdrilling.com/-- owns seven
high-specification floating rigs: the Pacific Bora, the Pacific
Mistral, the Pacific Scirocco, the Pacific Santa Ana, the Pacific
Khamsin, the Pacific Sharav and the Pacific Meltem. All drillships
are of the latest generations, delivered between 2010 and 2014,
with a combined historical acquisition cost exceeding $5.0 billion.
The average useful life of a drillship exceeds 25 years.

On Nov. 12, 2017, Pacific Drilling S.A. and 21 affiliates each
filed a voluntary petition for relief under Chapter 11 of the
United States Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No.
17-13193). The cases are pending before the Honorable Michael E.
Wiles and are jointly administered.

Pacific Drilling disclosed $5.46 billion in assets and $3.18
billion in liabilities as of Sept. 30, 2017.

The Debtors tapped Sullivan & Cromwell LLP as bankruptcy counsel
but was later replaced by Togut, Segal & Segal LLP; Evercore
Partners International LLP as investment banker; AlixPartners, LLP,
as restructuring advisor; Alvarez & Marsal Taxand, LLC as executive
compensation and benefits consultant; Ince & Co LLP and Jones
Walker LLP as special counsel; and Prime Clerk LLC as claims and
noticing agent; Deloitte Financial Advisory Services LLP, as
accounting advisor to the Debtor.

The RCF Agent tapped Shearman & Sterling LLP, as counsel, and PJT
Partners LP, as financial advisor.

The ad hoc group of RCF Lenders engaged White & Case LLP, as
counsel.

The SSCF Agent tapped Milbank Tweed, Hadley & McCloy LLP, as
counsel, and Moelis & Company LLC, as financial advisor.

The Ad Hoc Group of Various Holders of the Ship Group C Debt, 2020
Notes and Term Loan B tapped Paul, Weiss, Rifkind, Wharton &
Garrison, in New York as counsel.




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

PGS ASA: S&P Assigns 'B' LT Issuer Credit Rating, Outlook Stable
----------------------------------------------------------------
S&P Global Ratings assigned its 'B' long-term issuer credit rating
to Norway-based seismic group PGS ASA (PGS). S&P's rating is in
line with the preliminary rating it assigned on Jan. 31, 2020.

On Feb. 13, 2020, PGS announced that an extraordinary general
meeting had approved a private placement for gross proceeds of
approximately $95 million, with the possibility for an additional
$10 million in the short term.

S&P understands this will enable the company to complete its
refinancing by Feb. 18, which is in line with the expectations laid
out in "Norway-Based PGS ASA Assigned Prelim 'B' Rating; Outlook
Stable," published on Jan. 31, 2020.

After the transaction, PGS's capital structure (excluding leases)
will comprise:

-- A $523 million term loan B maturing in 2024;

-- A $215 million extension of its revolving credit facility (RCF)
by three years until September 2023;

-- About $4 million of an existing term loan due in March 2021;
and

-- About $320 million in export credit financing facilities
maturing in 2025-2027.

The company has a leading position in the seismic market, a niche
segment within oilfield services that tends to be very cyclical and
requires ongoing heavy investment.   PGS' relatively high debt is
expected to decrease in the coming years, with positive FOCF
translating into improved credit metrics, including adjusted debt
to EBITDA of 3x-4x through the cycle. After refinancing, the
company will have a comfortable maturity profile, which should
enable it to absorb a potential slower-than-expected industry
recovery.

S&P said, "Our assessment of PGS' weak business risk profile is
underpinned by its lack of operational diversity.   The company
relies heavily on investments made by oil and gas exploration and
production (E&P) companies, which tend to be highly cyclical. In
addition, building a quality data library is risky, requiring
ongoing heavy investment that is not always backed up by contracts.
In our opinion, PGS' key business strengths include its important
global position within the consolidated marine seismic sector,
supported by its relatively competitive fleet. PGS is one of the
main global players in this sector, alongside CGG, WesternGeco (A)
Pty. Ltd, TGS, and Shearwater. Moreover, we believe that the
long-term trend of replacing some onshore oil production with
deep-sea projects, in some cases, in difficult-to-reach areas,
should support demand for PGS' services in the long term.

"Our assessment of PGS' aggressive financial risk profile is
underpinned by the company's ability to generate FOCF, reduce its
sizable debt level, and maintain adjusted debt to EBITDA of 3x-4x
through the cycle.   Under our base-case scenario, we project
reported FOCF of $200 million in 2020--after estimating about $150
million in 2019--and adjusted debt to EBITDA of about 2.5x by year
end. However, we also take into the account relatively high
interest rates on the company's new loan, sizable lease payments of
about $60 million annually, its lack of track record of positive
FOCF (it was materially negative in 2017), and high absolute
reported net debt of about $1.1 billion, pro forma the planned
transactions."

The stable outlook on PGS indicates that the expected recovery in
seismic market conditions in 2020 should translate into positive
FOCF generation, a reduction in its high absolute debt level, and
the building of rating headroom over time.

S&P said, "Under our base-case scenario, we project adjusted debt
to EBITDA of about 2.5x in 2020, with reported FOCF of about $200
million. We view adjusted debt to EBITDA of 3x-4x through the cycle
as commensurate with the current rating. This range takes into
account current crude oil prices and the inherent limited
visibility of future cash flows, as well as recent changes in the
seismic industry landscape.

"We do not expect to raise the rating in the next 12-18 months. Any
upgrade would be underpinned by improved market conditions,
including more supportive oil prices and a reduction in the current
overcapacity in the seismic market."

Such a rating action would need to be supported by the following:

-- Evidence of the company's business model resiliency through the
cycle.

-- Some financial policy track record, including meeting and
maintaining its absolute debt level and its dividend policy.

-- Adjusted debt to EBITDA consistently below 3x together with
positive discretionary cash flow.

S&P said, "We could lower the rating if the industry recovery seen
in 2018-2019 didn't continue through 2020. This could be the case
if crude oil prices fell below $50 per barrel (/bbl) for an
extended period of time, pushing the oil majors to postpone their
capital expenditure (capex) programs.

"In this respect, adjusted debt to EBITDA trending above 4x for a
few quarters without the prospect of rapid further reduction would
put pressure on the rating, in our view."




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

YUKOS: Dutch Court Upholds Appeal in US$50BB Compensation Case
--------------------------------------------------------------
BBC News reports that a Dutch court has upheld an appeal by
shareholders demanding billions of dollars in compensation from the
Russian state for breaking up the once-mighty Yukos oil company.

According to BBC, the Appeals Court in The Hague said a previous
Dutch court ruling in favor of the Russian state was incorrect.

The Feb. 18 ruling restores the original US$50 billion (GBP38
billion) compensation award, made by the Permanent Court of
Arbitration, BBC notes.

Russia now plans to appeal, so the legal wrangling is set to
continue, BBC states.

The Yukos affair became a symbol of President Vladimir Putin's
determination to rein in the power of billionaire oligarchs who got
rich from controversial privatization auctions in the 1990s, BBC
discloses.

Yukos Oil's former chief Mikhail Khodorkovsky, a prominent critic
of Mr. Putin, was arrested in 2003 and the firm went bankrupt in
2006, BBC recounts.

In 2014, the Permanent Court of Arbitration, based in The Hague,
ruled that Russian officials had manipulated the legal system to
bankrupt Yukos, BBC relays.

That ruling was upheld by the appeals judges on Feb. 18, who said
Russia was obliged to enforce the 1994 international Energy Charter
Treaty, "unless it was in breach of Russian law", BBC notes.  "This
court finds that there was no breach of Russian law," they said.




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

DENZINBANK AS: Fitch Affirms B+ Foreign Curr. IDR, Outlook Stable
-----------------------------------------------------------------
Fitch Ratings affirmed Denizbank A.S.'s Long-Term Foreign Currency
Issuer Default Rating at 'B+' with a Stable Outlook and the bank's
Viability Rating at 'b+'.

The support-driven LTFC IDRs of the bank's subsidiaries Deniz
Finansal Kiralama A.S. and Joint-Stock Company Denizbank Moscow,
which are equalised with that of their parent, have also been
affirmed.

KEY RATING DRIVERS

IDRS, SUPPORT RATING AND NATIONAL RATING

Denizbank's LTFC IDR, Support Rating and National Rating are driven
by potential support from the bank's 99.9% shareholder, Emirates
NBD (ENBD, A+/Stable). Fitch's view of support, as reflected in the
'4' Support Rating, is based on the bank's ownership and strategic
importance to its parent.

ENBD acquired 99.9% of shares in Denizbank on July 31, 2019 from
Sberbank of Russia. Denizbank is increasingly integrated with its
parent in risk management and its control framework, but continues
to be run largely by local management. A number of key members of
ENBD management, including the Credit Risk Officer, spend extended
periods of time at the bank. ENBD appoints all 10 of Denizbank
board members.

Fitch regards ENBD's propensity to support Denizbank as high.
However, the bank's LTFC IDR is notched once below Turkey's 'BB-'
sovereign rating. This reflects Fitch's view that in case of a
marked deterioration in Turkey's external finances, the risk of
government intervention in the banking sector would be higher than
that of a sovereign default.

The Stable Outlook on the bank's ratings reflects the reduced risk
of a stress in Turkey's external finances and, as a result, the
lower likelihood of government intervention in the banking system
as indicated by the Stable Outlook on the sovereign rating.

Denizbank's support-driven Long-Term Local Currency (LTLC) IDR is
rated one notch above the bank's LTFC IDR, reflecting Fitch's view
of a lower likelihood of government intervention that would impede
the bank's ability to service obligations in local currency (LC).

The affirmation of Denizbank's National Rating reflects its view
that the bank's creditworthiness in local currency relative to
other Turkish issuers' remains unchanged.

VR

The VR of Denizbank eflects its moderate franchise (end-9M19: 3.5%
of sector assets) and the concentration of its operations in a
challenging Turkish operating environment, which exposes it to
macro, political and geopolitical volatility. Denizbank provides a
mix of services to corporate and commercial customers, small and
medium-sized companies and retail customers. It is also active in
the niche agriculture segment where it has a 12% market share of
loans.

Asset-quality risks remain high given the below-trend, albeit
improving, growth outlook in Turkey, above-sector-average
foreign-currency (FC) lending (54% of loans at end-3Q19 versus 37%
for the sector), given that not all borrowers are likely to be
completely hedged against potential lira depreciation. Asset
quality is also vulnerable to high single-name risk, above-peer
average Stage 2 loans (that could migrate to impaired/Stage 3 loans
as loans season) and moderate SME exposure (15% of loans). The bank
has exposure to the troubled construction (7%) and energy (6%)
sectors, albeit slightly below sector averages, and also to
football clubs (0.8%). Agricultural lending, a segment which also
reports above-sector-average non-performing loans (NPLs), also
amounted to 11% of loans at end-9M19.

Project finance is also significant (about USD5 billion or 20% of
loans, equal to 1.7x Fitch core capital (FCC)) at end-9M19. It
mainly comprises long-term, FC-denominated energy loans (end-9M19:
34% of project finance) and infrastructure loans (29%). The
exposures are slowly amortising, meaning asset- quality problems
are likely to feed through only gradually, but all energy projects
are fully operational, while a third benefit from a
government-guaranteed feed-in tariff set in US dollars, mitigating
credit risks. Infrastructure projects generally also benefit from
guarantees on both state debt and revenue to some extent.

Downside risks to asset quality should also be mitigated to some
extent by the improving growth outlook in Turkey, a lower
interest-rate environment - following sharp lira rate cuts since
end-1H19 - and lower currency volatility. In addition, the bank
targets primarily LC growth.

Denizbank's impaired loan ratio (rose to 6.4% of gross loans at
end-3Q19 (end-2018: 4.6%; sector average: 5.4%), mainly reflecting
a rise in SME and agricultural impaired loans due to the
deteriorating operating environment. The share of Stage 2 loans is
also material; they rose to a high 19% at end-3Q19 (end-2018: 16%)
and about a third were restructured.

Total reserve coverage of impaired loans was above sector-average
at 109% at end-9M19, but is likely to decrease following a TRY1.9
billion write-off of fully provisioned loans in 4Q19 (about 1.5% of
total loans). Specific reserves coverage of impaired loans was a
fairly low 61%, however, reflecting reliance on collateral. Total
unreserved Stage 2 and Stage 3 loans were equal to over a fifth of
equity.

The bank's profitability metrics remained weak in 9M19 and
underperformed the sector's. Its annualised operating
profit/risk-weighted assets (RWAs) decreased to 1.1% in 9M19 as
loan impairment charges absorbed a high 75% of pre-impairment
profit, driving a sharp increase in the bank's cost of risk. This
drove a sharp increase in the bank's loan impairment
charges/average gross loans to 340bp in 9M19 from 190bp in 2018.

Asset-quality weakness is likely to continue to weigh on
performance given Denizbank's risk profile and as loan seasons.
However, pre-impairment profit (9M19: 5% of average loans;
annualised) provides an acceptable buffer to absorb unexpected
credit losses through the income statement without affecting
capital.

Earnings growth should also be supported by higher loan volumes as
the economic outlook improves and given lower funding costs -
following the sharp interest-rate cuts since end-1H19 - and still
adequate margins. However, competitive loan pricing pressure is
likely to increase.

Capitalisation is weak for Denizbank's risk profile and remains
sensitive to asset-quality weakening, concentration risk and
potential lira depreciation. Leverage is also fairly high. Growth
appetite has decreased; the bank reported 2% loan contraction (fx
adjusted basis) in 9M19 and plans to grow in line with sector
average in 2020, but internal capital generation has also weakened.
The FCC ratio rose to 10.6% at end-9M19, but the total capital
ratio was a stronger 14.8%, supported by FC-denominated
subordinated debt from ENBD, which provides a partial hedge against
lira depreciation. Denizbank converted USD400 million of
subordinated debt to paid-in capital (expected 140bp uplift to the
Tier 1 ratio) in early February 2020, while the maturities
(maturing in 2023-2024) of its remaining subordinated debt are set
to be extended.

Denizbank is largely, and intends to remain, deposit-funded (85% of
non-equity funding at end-9M19). Wholesale funding, nearly all in
FC, makes up the balance and is below the sector average. It mainly
comprises funds borrowed (6% of total non-equity funding),
subordinated debt from ENBD (4%), local bond issuance (3%) and bank
deposits and repos (2%).

Excluding parent funding, comprising subordinated debt and
interbank funding, wholesale funding amounted to 10% of non-equity
funding. However, its share could increase given that the bank is
no longer subject to European Union sanctions under its new owner
and wholesale funding markets give it the opportunity to extend its
funding tenor. In 4Q19, Denizbank attracted a USD762 million
syndication loan (one- and two-year tranches). It may also tap the
bond or securitisation markets on an opportunistic basis depending
on pricing.

FC liquidity is adequate and broadly sufficient to cover the bank's
maturing FC non-deposit liabilities over the next 12 months. It
comprises mainly interbank assets, mandatory reserves held against
LCliabilities in Turkey's reserve option mechanism and cash. Given
low external FC debt, refinancing risks at the bank should be
manageable, particularly considering potential liquidity support
from ENBD. However, FC liquidity could come under pressure from
prolonged loss of market access or FC deposit instability.

SUBSIDIARY AND AFFILIATED COMPANIES

The IDRs of Deniz Leasing and Denizbank Moscow are driven by
potential support from Denizbank. For Denizbank Moscow, Fitch
equalises its LT IDRs with Denizbank's 'B+' LTFC IDR as the source
of support for Denizbank Moscow would most likely be in the form of
FC. Its view of parental support for both Deniz Leasing and
Denizbank Moscow reflects their strategic importance to and close
integration with Denizbank, including the sharing of
risk-assessment systems, customers, branding and management
resources.

RATING SENSITIVITIES

The bank's LT IDRs and Support Rating are primarily sensitive to
Turkey's sovereign rating and changes in Fitch's view of government
intervention risk in the banking sector. An increase in
intervention risk, which could be driven by a sovereign downgrade
or a marked deterioration in Turkey's external finances, could
result in a downgrade of Denizbank's ratings. Conversely a
reduction in intervention risk, likely linked to a sovereign
upgrade or an improvement in external finances, could result in an
upgrade.

A marked reduction in ENBD's propensity to support Denizbank could
also result in a downgrade but would only result in a downgrade of
the LTFC IDR if at the same time Fitch also downgrades the bank's
VR.

The bank's VR could be downgraded due to marked deterioration in
the operating environment - as reflected in adverse changes to the
lira exchange rate, interest rates, geopolitical tensions and
economic growth prospects. A downgrade may also result from a
weakening of the bank's FC liquidity or a greater-than-expected
deterioration in asset quality that materially weakens the bank's
profitability and capital.

Upside for the VR is limited in the near term in light of the
bank's moderate franchise, risk profile and the 'BB-' LTFC IDR of
the Turkish sovereign.

The bank's National Rating is sensitive to a change in Fitch's view
of support leading to a change in the bank's LTLC IDR. It is also
sensitive to a change in the entity's creditworthiness relative to
other rated Turkish issuers'.

SUBSIDIARY AND AFFILIATED COMPANIES

The ratings of Deniz Leasing and Deniz Moscow are sensitive to
changes in the Long-Term IDRs of Denizbank.

SUMMARY OF FINANCIAL ADJUSTMENTS

An adjustment has been made in Fitch's financial spreadsheets of
Denizbank that has impacted the core and complimentary metrics.
Fitch has taken a loan that was classified as a financial asset
measured at fair value through profit and loss in the bank's
financial statements and reclassified it under gross loans as Fitch
believes this is the most appropriate line in Fitch spreadsheets to
reflect this exposure.

PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS

All IDRs of the rated entities are either driven or underpinned by
institutional support from their respective shareholders.

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
entities, either due to their nature or to the way in which they
are being managed by the entities.

ING BANK: Fitch Affirms B+ Foreign Currency IDR, Outlook Stable
---------------------------------------------------------------
Fitch Ratings affirmed ING Bank A.S.'s Long-Term Foreign-Currency
Issuer Default Rating at 'B+'. The Outlook is Stable. At the same
time, the agency has affirmed the bank's Viability Rating (VR) at
'b+'.

KEY RATING DRIVERS

VR, IDRS, NATIONAL RATING AND SUPPORT RATING

INGBT's LTFC IDR is driven by its standalone creditworthiness, as
reflected in its 'b+' VR, reflecting the concentration of the
bank's operations in the challenging Turkish operating environment,
which exposes it to market volatility and political and
geopolitical uncertainty.

The Stable Outlook reflects Fitch's view that risks to the bank's
credit profile from operating environment and asset quality
pressures should be manageable, given its level of capital,
profitability and liquidity buffers.

The VR considers INGBT's limited franchise, moderate market shares
(1.3% of sector assets at end-2019) and ensuing limited competitive
advantages. This is balanced by its record of solid performance
through the cycle, adequate loss absorption buffers and
below-peer-average risk appetite. INGBT provides a mix of services
to corporate and commercial customers, small and medium-sized
companies (SMEs), which are highly sensitive to the macro outlook,
and retail customers.

The bank is closely integrated within the ING Group in terms of its
risk management framework and control environment. Lending
contracted in 2019 (down by 16% on an FX-adjusted basis), mainly
through foreign currency (FC) and SME loan deleveraging, as it took
a conservative approach to growth in the challenging operating
environment. Loan growth in 2020 is likely to remain below the
sector average.

The bank has been actively reducing its level of parent funding
(equal to 25% of total funding at end-2019, down from 32% at
end-2018) as part of its strategy to be self-funded. As a
consequence, customer deposit funding has increased.

The bank's asset quality ratios weakened in 2018-2019, as loans
seasoned due to the weaker operating environment. Its impaired
loans (IFRS 9 Stage 3) / gross loans ratio rose to 7.0% at end-2019
(sector: 5.3%), from 4.3% at end-2018, mainly arising from the SME
segment, although the increase in the ratio should also be
considered in light of the significant contraction in SME lending.
In addition, it reported a fairly high, albeit decreasing, share of
Stage 2 loans in gross loans (10.6%), which could migrate to Stage
3 as loans season. Of these, around a fifth were restructured at
end-2019. Total loan loss allowance coverage of impaired loans is
fairly low (67% at end-2019) reflecting the bank's reliance on
collateral.

Credit risks remain high given significant FC loan exposure (44% of
loans at end-2019) and the impact of potential lira depreciation on
often weakly hedged borrowers' ability to service their debt.
However, risks are on a declining trend and now at a level broadly
in line with the sector.

Exposure to the construction (mainly contracting) and energy
sectors, which have come under pressure due to the more challenging
market conditions, pose additional risks but were below the
sector-average at 2% and 5% of loans, respectively, at end-9M19.
Single-name borrower risk is also fairly high. LTFC project finance
exposure is also limited.

Downside risks to asset quality should be mitigated to some extent,
as for the sector, given the improving growth outlook in Turkey,
the lower interest rate environment following the sharp lira rate
cuts since end-1H19, and lower currency volatility.

The bank's profitability metrics improved in 2019 and compared well
with peers. It reported a high 4.0% operating profit/risk-weighted
assets (RWA) ratio in 2019, significantly outperforming the sector
average (of 1.8%) despite a sharp contraction in lending. However,
it was mainly driven by large gains on interest rate swaps in the
high interest rate environment, in turn driving a sharp increase in
the bank's swap-adjusted net interest margin. Cost growth also
remained below inflation, reflecting good cost control, and
impairment charges were moderate (equal to 27% of pre-impairment
profit).

However, performance is expected to weaken in 2020 given the impact
of the lower interest rate environment on trading income and margin
pressure from competition on the lending side. Nevertheless,
profitability could be supported by loan growth in 2020, while
asset-quality pressures could ease as the economic outlook
improves.

Capitalisation is reasonable. INGBT's Fitch Core Capital (FCC)/ RWA
ratio was an above-peer-average 17.0% at end-2019. Its total
capital ratio was a higher 25.6%, significantly above the 12%
recommended regulatory minimum, supported by USD700 million of FC
subordinated debt from ING, which provides a partial hedge against
FC RWAs. However, like the rest of the sector, capitalisation
remains sensitive to lira depreciation (due to the inflation of FC
RWAs) and asset-quality deterioration. Unreserved NPLs were equal
to 12% of FCC at end-2019, although pre-impairment profit (equal to
6.4% of gross loans at end-2019) provides a significant buffer to
absorb losses through the income statement before hitting capital.

The bank is largely deposit funded (end-2019: 68% of total funding)
and the deposit base is fairly granular, reflecting a high share of
retail deposits. Customer deposits grew by 18% in FX-adjusted terms
in 2019, mainly due to an increase in FC deposits. Combined with
loan deleveraging and a reduction in wholesale funding in 2019,
this led to further improvement in the gross loans-to-deposit ratio
to 116% at end-2019 from a very high 163% at end-2018.

Although declining, parent funding remains material (around 25% of
total funding at end-2019), reflecting INGBT's strategy to become
increasingly self-funded, largely through customer deposits.
External wholesale funding - comprising largely trade finance and
bilateral loans - was equal to about 6% of total funding at
end-2019.

The bank's available FC liquidity - comprising cash and interbank
balances (including balances placed with the Central Bank of
Turkey), maturing FX swaps and government securities - comfortably
covered short-term non-deposit FC liabilities falling due within a
year at end-9M19, meaning the bank should be able to cope with a
short-term market closure. Consequently, and given its moderate
external debt exposure, refinancing risks should be manageable,
particularly considering potential liquidity support from INGBT.
Nevertheless, FC liquidity could come under pressure in case of a
prolonged loss of market access and deposit instability.

SUPPORT RATING

The bank's LTFC IDR is also underpinned at the 'B+' level by
potential institutional support ('4' Support Rating) from its
ultimate controlling shareholder, ING Bank N.V. (AA-/Stable/a+).
Fitch's view of support is based on the bank's strategic importance
to its parent, integration, role within the wider group and shared
branding. However, its LTFC IDR is capped at 'B+' on the basis of
support, one notch below Turkey's 'BB-' rating, reflecting its view
that in case of a marked deterioration in Turkey's external
finances, the risk of government intervention in the banking sector
would be higher than that of a sovereign default.

The bank's LT Local-Currency (LC) IDR is rated one notch above its
LTFC IDR at 'BB-', and as such is driven by institutional support
rather than the bank's standalone creditworthiness. This reflects
its view of a lower likelihood of government intervention that
would impede the bank's ability to service obligations in LC. The
Stable Outlook on the LTLC IDR consequently mirrors the Outlook on
the sovereign.

Turkey's high external funding requirement creates a significant
incentive for the authorities to retain market access and avoid
capital controls, in its view. However, in case of marked
deterioration in the country's external finances, some form of
intervention in the banking system that might impede the banks'
ability to service their FC obligations would become more likely.

NATIONAL RATING

The affirmation of the National Rating reflects its view that the
creditworthiness relative to other Turkish issuers has not
changed.

RATING SENSITIVITIES

VR, IDRS, AND NATIONAL RATING

The bank's LT IDRs and Support Rating are primarily sensitive to
Turkey's sovereign rating and changes in Fitch's view of government
intervention risk in the banking sector. An increase in
intervention risk, which could be driven by a sovereign downgrade
or a marked deterioration in Turkey's external finances, could
result in a downgrade of INGBT's ratings, whereas a reduction in
intervention risk, likely linked to a sovereign upgrade or an
improvement in external finances, could result in an upgrade.

A marked reduction in Fitch's view of ING's propensity to support
INGBT could also result in a downgrade, but would only result in a
downgrade of the LTFC IDR and senior debt rating if at the same
time Fitch also downgraded the bank's VR.

The VR could be downgraded in case of a marked deterioration in the
operating environment, as reflected in adverse changes to the lira
exchange rate, domestic interest rates, economic growth prospects,
and external funding market access; a weakening of the bank's
foreign currency liquidity position, most likely due to deposit
outflows or an inability to refinance maturing external
obligations, without this being offset by shareholder support; or
greater than expected pressure on asset quality or high loan growth
that leads to a marked erosion of the bank's capital position.

Upside for the VR is limited in the near term, in light of INGBT's
moderate franchise, asset quality pressures, only moderate core
capitalisation and the 'BB-' LTFC IDR of the Turkish sovereign.

The National Rating is sensitive to a change in Fitch's view of
support leading to a change in INGBT's LTLC IDR. It is also
sensitive to a change in the entity's creditworthiness relative to
other rated Turkish issuers.

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.


QNB FINANSBANK: Fitch Affirms B+ Foreign Curr. IDR, Outlook Stable
------------------------------------------------------------------
Fitch Ratings affirmed QNB Finansbank A.S.'s Long-Term
Foreign-Currency Issuer Default Rating (LTFC IDR) at 'B+'. The
Outlook is Stable. At the same time the bank's Viability Rating
(VR) is affirmed at 'b+'.

The support-driven LTFC IDRs of the bank's subsidiaries QNB Finans
Finansal Kiralama A.S. (Finansleasing) and QNB Finans Faktoring
A.S. (QNB Faktoring), which are equalised with that of their
parent, have also been affirmed.

KEY RATING DRIVERS

VR, LTFC IDR, NATIONAL RATING, SENIOR DEBT RATING

The LTFC IDR and senior debt rating of QNB Finansbank are driven by
its standalone creditworthiness, as expressed by its 'b+' VR,
reflecting the concentration of the bank's operations in the
challenging Turkish operating environment, which exposes it to
market volatility and political and geopolitical uncertainty.
However, short-term operating environment risks have partly abated
given Turkey's progress in stabilising and rebalancing the economy,
reducing downside risks to the bank's credit profile.

The Stable Outlook on the LTFC IDR reflects Fitch's view that at
the current rating level risks to the bank's credit profile from
the operating environment and asset-quality pressures should be
manageable given QNB Finansbank's capital, profitability and
liquidity buffers.

The VR also considers the bank's moderate franchise (end-2019: 4%
share of banking-sector assets) and ensuing limited competitive
advantages. The bank provides a mix of services to corporate and
commercial customers - a segment where it is looking to increase
its market shares - small and medium-sized companies (SMEs, which
are highly sensitive to the macro outlook) and retail customers. As
a key subsidiary of Qatar National Bank (QNB, A+/Stable) Fitch also
sees increasing integration with the wider group in its risk
management and control environment and policies and procedures.

QNB Finansbank posted above-sector-average loan growth in 2019
(11.8% on an FX-adjusted basis), driven mainly by local-currency
lending to corporate, commercial and retail segments, while its
growth appetite in the high-risk SME segment was lower than peers'.
Foreign-currency (FC) loan growth was slower, but above
sector-average despite exchange-rate volatility. The bank continues
to target above-sector-average loan growth in 2020, balanced mainly
between retail and business banking. Over the medium- to long-term,
management guides that this will come from its primary focus on
corporate banking.

The bank's asset quality weakened in 2019, due to loan seasoning
and pressure notably on its SME and retail portfolios under
challenging conditions over the last two years. The IFRS 9 Stage 3
/gross loans ratio rose to 7% at end-2019 (sector average: 5.3%),
but is distorted by regular non-performing loan (NPL) sales and
/write-offs (2019: equal to 77bp of gross loans), as for many banks
in the sector. Stage 2 loans were also fairly high (9.7% of gross
loans at end-2019, up from 9.2% at end-2018), of which nearly
two-thirds were restructured. Total loan loss allowance coverage of
impaired loans was 100% at end-2019, slightly above the sector
average (95%). Management aims to increase this level further in
2020.

Credit risks at the bank are heightened by high, albeit below
sector-average, FC lending (end-2019: 32% of gross loans), given
the potential impact of local-currency (LC) depreciation on often
weakly hedged borrowers' ability to service debt, and by its
exposure to the high-risk SME segment (end-2019: 30% of gross
loans). Exposure to the construction (9M19: 6%) and energy (4%)
sectors - which have come under pressure in the challenging
operating environment - are additional credit risk factors.
Single-name concentration risk at the bank is moderate relative to
capital.

QNB Finansbank's exposure to project finance is also significant;
it amounted to around one-fifth of gross loans at end-9M19 (1.5x
Fitch core capital (FCC)) and mainly comprised long-term,
FC-denominated, slowly amortising energy project (16% of the
portfolio) and infrastructure (64%). Credit risk in the book is
partly mitigated by around 60% of project-finance loans being
covered by state guarantees on debt and revenue, or feed-in tariffs
set in US dollars in the case of some renewable energy projects.

Fitch believes that further downside risks to the bank's asset
quality is reduced to some extent, as for the sector, given the
improving growth outlook in Turkey, the lower interest-rate
environment - following sharp lira rate cuts since end-1H19 - and
lower currency volatility.

QNB Finansbank's profitability metrics remained above
sector-average in 2019. It reported an operating
profit/risk-weighted assets (RWA) of 2.2%. Performance has been
underpinned by its above-sector- average net interest margin
(reflecting its focus on higher-yielding, more high-risk segments),
above-sector-average loan growth and moderate impairment charges to
date (2019: equal to 36% of pre-impairment profit). However, it
remains sensitive to asset-quality weakening, while competitive
pricing on loans could erode margins, despite lower lira funding
costs. Cost-efficiency ratios have improved steadily in recent
years (end-2019: non-interest expense-to-average total assets of
2.3%), albeit slightly underperforming the sector's due to QNB
Finansbank's lack of scale.

Core capitalisation is only moderate given the bank's risk profile
(end-2019: FCC ratio of 10.1%) and growth appetite. Its total
regulatory capital ratio was more comfortable (end-2019: 15.2%
versus the 12% recommended regulatory minimum), supported by FC
subordinated debt from QNB. The QNB debt provides a partial hedge
against potential lira depreciation. Buffers over Basel III capital
requirements are moderate.

Capitalisation remains sensitive, as for the sector, to lira
depreciation, via inflation of FC RWAs and asset-quality weakening.
However, pre-impairment profit (2019: equal to 4.4% of average
loans) provides a reasonable buffer to absorb losses through the
income statement.

The bank is mainly deposit funded (2019: 65% of total funding).
Around half of customer deposits are in FC, broadly in line with
the sector's. It has an above-sector-average loans/deposit ratio
(125% at end-2019), however, reflecting reliance on FC wholesale
funding (end-2019: 30% of total funding).

FC liquidity is adequate and was broadly sufficient to cover
short-term liabilities maturing within one year as at end-9M19,
meaning the bank should be able to cope with a short-lived market
closure. Refinancing risk is also mitigated by potential liquidity
support from QNB. Available FC liquidity comprises cash and
interbank placements (including balances with the Central Bank of
Turkey), maturing FX swaps and government securities. However, FC
liquidity could come under pressure from prolonged loss of market
access or FC deposit instability.

SUPPORT RATING

The bank's LTFC IDR is also underpinned, at the 'B+' level, by
potential institutional support ('4' Support Rating) from QNB.
Fitch's view of support is based on the bank's strategic importance
to QNB, integration, role within the wider group and shared
branding. However, its LTFC IDR is capped at 'B+' on the basis of
support, one notch below Turkey's 'BB-' rating, reflecting its view
that, in case of a marked deterioration in Turkey's external
finances, the risk of government intervention in the banking sector
would be higher than that of a sovereign default.

The bank's Long-Term Local-Currency IDR, which is also driven by
institutional support, is however rated one notch above the LTFC
IDR at 'BB-', as Fitch sees a lower likelihood of government
intervention that would impede the bank's ability to service
obligations in LC than in FC. The Stable Outlook on the LTLC IDR
consequently mirrors the Outlook on the sovereign.

Turkey's high external funding requirement creates a significant
incentive for the authorities to retain market access and avoid
capital controls. However, in case of marked deterioration in the
country's external finances, some form of intervention in the
banking system that might impede banks' ability to service FC
obligations would become more likely.

NATIONAL RATING

The affirmation of the National Rating reflects its view that the
bank's creditworthiness relative to other Turkish issuers' has not
changed.

SUBSIDIARY AND AFFILIATED COMPANIES

The support-driven ratings of Finansleasing and QNB Faktoring are
equalised with those of QNB Finansbank, reflecting their strategic
importance to and close integration with their parent (including
the sharing of risk-assessment systems, customers, branding and
management resources).

RATING SENSITIVITIES

VR, IDRS, NATIONAL RATING, SUPPORT RATING AND SENIOR DEBT RATING

The bank's LT IDRs, Support Rating and senior debt rating are
primarily sensitive to Turkey's sovereign rating and changes in
Fitch's view of government intervention risk in the banking sector.
An increase in intervention risk, which could be driven by a
sovereign downgrade or a marked deterioration in Turkey's external
finances, could result in a downgrade of QNB Finansbank's ratings,
whereas a reduction in intervention risk, likely linked to a
sovereign upgrade or an improvement in external finances, could
result in an upgrade.

A marked reduction in Fitch's view of QNB's propensity to support
QNB Finansbank could also result in a downgrade, but would only
result in a downgrade of the LTFC IDR and senior debt rating if at
the same time Fitch also downgrades the bank's VR.

The VR could be downgraded in case of a marked deterioration in the
operating environment, as reflected in adverse changes to the lira
exchange rate, domestic interest rates, economic growth prospects,
and external funding market access. This may also result from a
weakening of the bank's FC liquidity, most likely due to deposit
outflows or an inability to refinance maturing external
obligations, without this being offset by shareholder support; or
greater-than-expected pressure on asset quality or high loan growth
that leads to a marked erosion of the bank's capital position.

Upside for the VR is limited in the near term, in light of QNB
Finansbank's moderate franchise, asset- quality pressures, only
moderate core capitalisation and the 'BB-' LTFC IDR of the Turkish
sovereign.

The National Rating is sensitive to a change in Fitch's view of
support leading to a change in QNB Finansbank's LTLC IDR. It is
also sensitive to a change in the entity's creditworthiness
relative to other rated Turkish issuers'.

SUBSIDIARY AND AFFILIATED COMPANIES

The ratings of Finansleasing and QNB Faktoring are sensitive to
changes in the Long-Term IDRs of QNB Finansbank.

SUMMARY OF FINANCIAL ADJUSTMENTS

An adjustment has been made in Fitch's financial spreadsheets of
QNB Finansbank that has impacted core and complimentary metrics.
Fitch has taken a loan that was classified as a financial asset
measured at fair value through profit and loss in the bank's
financial statements and reclassified it under gross loans as Fitch
believes this is the most appropriate line in Fitch spreadsheets to
reflect this exposure.

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.


TURK EKONOMI: Fitch Affirms B+ Foreign Curr. IDR, Outlook Stable
----------------------------------------------------------------
Fitch Ratings affirmed Turk Ekonomi Bankasi A.S.'s Long-Term
Foreign-Currency Issuer Default Rating at 'B+'. The Outlook is
Stable. Fitch has also affirmed the bank's Viability Rating (VR) at
'b+'.

KEY RATING DRIVERS

VR, LTFC IDR, SENIOR DEBT RATING

The LTFC IDR and senior debt rating of TEB are driven by its
standalone creditworthiness, as expressed by its 'b+' VR. The
latter reflects the concentration of the bank's operations in the
challenging Turkish operating environment, which exposes TEB to
market volatility and political and geopolitical uncertainty.
However, short-term operating environment risks have partly abated
given Turkey's progress in stabilising and rebalancing the economy,
reducing downside risks to the bank's credit profile.

The Stable Outlook on the LTFC IDR reflects Fitch's view that at
the current rating level risks to the bank's credit profile from
operating environment and asset-quality pressures should be
manageable given TEB's capital, profitability and liquidity
buffers.

The VR considers the bank's moderate franchise and market shares
(end-2019: 2.4% of banking sector assets) and ensuing limited
competitive advantages. TEB has a high exposure to the fairly
high-risk SME segment (end-2019: 35% of performing loans,
unconsolidated basis), which is highly sensitive to macro risks.
The remaining portfolio is about evenly split between corporate and
retail borrowers. As a BNP Paribas S.A. (BNPP) subsidiary, TEB is
fairly integrated into the wider BNPP group in its risk management
and control environment and its policies and procedures are fully
aligned with those of the group in this respect.

TEB has historically taken a fairly conservative approach to
growth, typically reporting below sector-average FX-adjusted
growth. However, it targets above-sector-average loan growth of
16%-17% in 2020 (2019: 4% actual), driven largely by
local-currency, unsecured consumer loans, short- to medium-term
working capital loans to large corporates and foreign-currency (FC)
export loans. Capitalisation is moderate, but should the bank
pursue a more aggressive growth strategy this could put pressure on
capital ratios, given its moderate internal capital generation
capacity.

The bank's asset quality weakened in 2018-2019, reflecting loan
seasoning and pressures mainly in the SME portfolio due to a
deteriorating operating environment. The impaired loans (NPL) ratio
rose to 5.8% at end-2019, versus the sector-average of 5.3%, but
was distorted by regular NPL sales and /write-offs (2016-2019:
equal to 70bp-90bp of gross loans annually), as for many banks in
the sector. TEB's NPL origination and generation rates increased to
a high 4.6% and 3% of average performing loans, respectively, in
2019. The bank also reported fairly high - albeit decreasing -
Stage 2 loans (12.5% of gross loans; about one-fourth
restructured), which could migrate to Stage 3 as loans season.
Total reserve coverage of NPLs was below the sector average at 88%
at end-2019. Specific reserves held against NPLs amounted to a
lower 57%, but this is partly due to the bank's focus on SME, and
therefore collateralised, lending.

Credit risks are heightened by fairly high FC lending (end-2019:
19% of gross loans; albeit below peer- and sector-averages), given
the potential impact of local currency (LC) depreciation on often
weakly hedged borrowers' ability to service debt, and exposure to
the troubled real estate and construction sector (end-3Q19: 9% of
gross loans, excluding factoring receivables). However, the bank
has limited exposure to long-term FC investment and project finance
loans and single-name borrower risk is low relative to capital and
below peers'.

Downside risks to asset quality should also be mitigated to some
extent, by the improving growth outlook in Turkey, a lower
interest-rate environment - following sharp lira rate cuts since
end-1H19 - and lower currency volatility.

TEB's performance metrics are moderate, primarily reflecting a high
cost base, limited economies of scale (costs/assets of 3.2% at
end-2019 versus 2% for the sector), fairly high funding costs and
conservative growth appetite despite a focus on higher-margin SME
lending. Fitch expects profitability to remain below sector-average
in 2020, although higher budgeted loan growth and the improving
economic outlook should partly mitigate asset-quality pressures.

Pre-impairment profit rose to a solid 2.9% of average total assets
in 2019, underpinned by a widening of the bank's net interest
margin (NIM) in the higher interest-rate environment. However, the
NIM was significantly lower after being adjusted for FC swap costs
(9M19: equal to about 180bp of average earning assets; annualised).
The bank's operating profit/risk-weighted asset (RWA) ratio was
stable at 1.7% in 2019. High loan impairment charges (LICs)
absorbed 50% of pre-impairment operating profit in 2019 (2018:
48%).

TEB's core capitalisation is only moderate (end-2019: Fitch Core
Capital ratio of 10.8%) for the bank's risk profile, internal
capital generation and asset quality. Its total regulatory capital
was more comfortable at 16.7%, and above the 12% regulatory
recommended level. It is supported by FC subordinated Tier 2 debt,
largely from BNPP, which provides a partial hedge against potential
lira depreciation. Buffers over Basel III capital requirements are
sound.

The bank's capitalisation remains sensitive, as for the sector, to
lira depreciation (via inflation of FC RWAs) and asset-quality
pressures. However, pre-impairment profit provides a reasonable
buffer to absorb losses through the income statement; it was equal
to 4.2% of average loans in 2019.

TEB is largely deposit-funded (end-2019: 80% of total funding) and
its loans/deposits ratio (end-2019: 99%) outperforms the sector's.
Customer deposits, primarily sourced from retail customers, are
fairly granular. At end-2019, over half were in FC, broadly in line
with the sector's. Wholesale funding, largely in FC (72% of the
total), is nevertheless fairly high (end-2019: 20% of total
funding). However, it includes material BNPP group funding (almost
half of FC wholesale funding), excluding which, external FC debt
amounted to over two-fifths of FC wholesale funding (or 6% of total
funding).

The bank's available FC liquidity - comprising maturing FX swaps,
interbank balances (including unrestricted balances placed with the
Central Bank of Turkey), unencumbered FC government securities and
cash - comfortably covered short-term non-deposit FC liabilities
falling due within a year at end-9M19. Consequently, and given low
external FC debt, refinancing risks at the bank should be
manageable, particularly considering potential liquidity support
from BNPP. However, FC liquidity could come under pressure from a
prolonged loss of market access or FC-deposit instability.

SUPPORT RATING

The bank's LTFC IDR is underpinned, at the 'B+' level, by potential
institutional support from BNPP (A+/Stable), as reflected in its
'4' Support Rating. TEB is 55%-owned, but fully controlled, by TEB
Holding, in which BNP Paribas Fortis (BNPPF; A+/Stable) has a 50%
stake. TEB is fully consolidated by BNPPF, which in turn is a core
subsidiary of BNPP. BNPP ultimately holds a 72.5% stake in TEB,
including a 23.7% stake it holds in the bank directly. Fitch's view
of support is based on TEB's strategic importance to the parent,
majority ownership, integration with and role within the wider BNPP
group and small size relative to BNPP's ability to provide
support.

Based on its assessment of institutional support, the bank's LTFC
IDR is capped at 'B+', one notch below Turkey's 'BB-' rating,
reflecting Fitch's view that in case of marked deterioration in
Turkey's external finances, the risk of government intervention in
the banking sector would be higher than that of a sovereign
default.

TEB's LTLC IDR, which is driven by institutional support, is
however one notch above the bank's LTFC IDR at 'BB-', as Fitch sees
a lower likelihood of government intervention that would impede the
bank's ability to service obligations in LC than in FC. The Stable
Outlook on the LTLC IDR consequently mirrors the Outlook on the
sovereign.

Turkey's high external funding requirement creates a significant
incentive for the authorities to retain market access and avoid
capital controls, in its view, but in case of marked deterioration
in the country's external finances, some form of intervention in
the banking system that might impede banks' ability to service
their FC obligations would become more likely.

NATIONAL RATING

The affirmation of the bank's National Rating reflects its view
that TEB's creditworthiness relative to other Turkish issuers' has
not changed.

RATING SENSITIVITIES

VR, IDRS, SUPPORT RATING, SENIOR DEBT RATING AND NATIONAL RATING

The bank's LT IDRs, Support Rating and senior debt rating are
primarily sensitive to Turkey's sovereign rating and changes in
Fitch's view of government intervention risk in the banking sector.
An increase in intervention risk, which could be driven by a
sovereign downgrade or a marked deterioration in Turkey's external
finances, could result in a downgrade of TEB's ratings, whereas a
reduction in intervention risk, likely linked to a sovereign
upgrade or an improvement in external finances, could result in an
upgrade.

A marked reduction of BNPP's ability and propensity to support TEB
could also result in a downgrade, but would only result in a
downgrade of the LTFC IDR and senior debt rating if at the same
time Fitch also downgrades the bank's VR.

The VR could be downgraded in case of a marked deterioration in the
operating environment, as reflected in adverse changes to the lira
exchange rate, domestic interest rates, economic growth prospects,
and external funding market access. It may also result from a
weakening of the bank's FC liquidity, most likely due to deposit
outflows or an inability to refinance maturing external
obligations, without this being offset by shareholder support; or
greater-than-expected pressure on asset quality or high loan growth
that leads to a marked erosion of the bank's capital position.

Upside for the VR is limited in the near term, in light of TEB's
moderate franchise, asset-quality pressures, only moderate core
capitalisation and the 'BB-' LTFC IDR of the Turkish sovereign.

The National Rating is sensitive to a change in Fitch's view of
support leading to a change in TEB's LTLC IDR. It is also sensitive
to a change in the entity's creditworthiness relative to other
rated Turkish issuers'.

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.




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

BURY FC: Owner Defaults on CVA to Settle GBP5-Million Debt
----------------------------------------------------------
David Conn at The Guardian reports that Bury Football Club's owner
Steve Dale has defaulted on the company voluntary arrangement (CVA)
he agreed last summer to settle the club's GBP5 million debts,
having failed to provide the money required to fund it.

According to The Guardian, the deadline passed on Feb. 11 and the
supervisor of the CVA, the accountant Steven Wiseglass, confirmed
that the funding had not been provided to service it.  

Mr. Dale's failure makes it almost certain that the 135-year-old
club, expelled from the Football League in August 2019 because Dale
did not provide convincing evidence that he had the money to fund
it for a season, will go into liquidation, The Guardian notes.

Mr. Wiseglass, a director at the insolvency firm Inquesta, as cited
by The Guardian, said in a statement: "The CVA has formally
defaulted and we will now be looking at taking the necessary action
to deal with the default."

According to another insolvency practitioner with experience of
working on football clubs in crisis, the normal procedure when a
CVA defaults is that the supervisor of the CVA, in this case, Mr.
Wiseglass, will formally petition for the winding up of a company,
The Guardian relays.  If that happens, Bury's few remaining assets
will be sold by a liquidator, which could include the right to use
the name Bury FC, The Guardian states.

Mr. Wiseglass told creditors last month that Dale had missed the
maximum six-month deadline to provide the money to fund the CVA,
and had been given a further 21 days to do so, or the CVA would be
terminated, The Guardian recounts.  In that settlement, agreed on
July 18, Mr. Dale committed to paying the former players and other
"football creditors", owed approximately GBP1 million, in full, and
25p in the pound to HMRC and other "non-football creditors" owed
approximately GBP4 million, The Guardian notes.

"The terms of the CVA were that funds should be introduced within a
maximum period of six months," The Guardian quotes Inquesta as
saying in the letter to creditors last month.  "This came to an end
on  January 18, 2020.  Due to no funds being received, we have
issued a notice of breach to the director, giving 21 days for the
funds to be introduced.  Should the breach not be remedied within
the defined timescale, the supervisor will review the position and
will terminate the agreement."


INOVYN LTD: S&P Alters Outlook to Stable & Affirms 'BB-' ICR
------------------------------------------------------------
S&P Global Ratings revised its outlook on the 'BB-' issuer credit
rating to stable from positive and affirmed its rating on
U.K.-based PVC producer Inovyn Ltd.

S&P said, "At the same time, we are assigning our 'BB-' issue-level
rating to the proposed fungible add-on facility, aligned with the
senior secured, term loan B, which will have the same seniority.
This is in line with our issuer credit rating on Inovyn. The
recovery rating on the existing term loan B and on the fungible
add-on facility is '3', indicating meaningful recovery (50%-70%) of
principal in the event of payment default. That said, our recovery
expectations for the first-lien term loan B debt have fallen to 60%
from 65%."

Inovyn's plan to pay a EUR250 million debt-funded exceptional
dividend will weigh on its credit metrics compared with our
previous assumptions.

It already paid a dividend of EUR300 million in 2019. S&P Global
Ratings is affirming its rating and revising the outlook back to
stable because of the effect of Inovyn's proposed transaction. The
company plans to refinance its term loan B, extending its maturity
by about two years to March 2027, and to issue additional fungible
secured debt for up to EUR250 million. The transaction will fund a
EUR250 million upstream dividend to parent Ineos Ltd. that will be
used to fund various corporate activities and projects across the
wider Ineos group.

S&P said, "The additional debt will increase our adjusted leverage
by about 0.4x to 2.3x, as of February 2020, from about 1.9x at
year-end 2019. After the transaction, we anticipate total senior
secured debt will be EUR1,064 million, and that about EUR55 million
will be drawn under the securitization facility. There will be
EUR65 million-EUR70 million of available cash on the balance sheet.
In our adjusted debt figures, we include operating and finance
leases of EUR77 million and sizable underfunded pension liabilities
of EUR289 million net of taxes, which the company intends to
gradually fund over time."

Inovyn has already paid an exceptional EUR300 million dividend to
Ineos, in the first quarter of 2019. That dividend was prompted by
strong operating performance and supportive top-of-cycle conditions
in the caustic soda market. S&P said, "We consider the debt-funded
dividend to be more risky and opportunistic, especially given that
conditions seem to be reverting to the mid-cycle in 2020, and that
the company has yet to complete a large capex program. This
dividend policy is relatively aggressive, and does not support a
reduction in Inovyn's leverage to within the 1.5x-2.0x range we see
as commensurate with a higher rating."

Operational performance will continue to support the rating,
despite deteriorating market conditions.

Performance in 2020 is still expected to weaken, with EBITDA of
about EUR570 million-EUR600 million and reported margins of 16%-18%
for 2020. S&P's base-case scenario incorporates headroom for market
volatility, notably a decline from recent years' top-of-the-cycle
conditions.

As expected, market conditions in caustic soda softened modestly in
2019, especially over the fourth quarter, when demand for caustic
soda was balanced to weak. Based on unaudited management
information, Inovyn reported EBITDA for the fourth quarter of 2019
of EUR135 million--the same as in the same period in 2018, and down
from the EUR147 million reported in the third quarter of 2019.

Inovyn is expected to report adjusted EBITDA of EUR606 million for
2019, on a 17.5%-18.5% adjusted EBITDA margin. This is down from
EUR699 million, and 20.8% margins in 2018. Its margin is still
high, which could indicate above mid-cycle market conditions. S&P
expects supply and demand for chlor-alkali products in Europe--that
is, caustic soda and caustic potash, which represented about a
third of sales over 2019--to become more balanced, however. S&P's
EBITDA projections incorporate the risk of a reversion to mid-cycle
conditions over the next year.

Relatively high margins and strong cash flows are still supported
by a strong improvement in the group cost structure, lower energy
costs, and successful delivery of synergy benefits, strengthening
our view of Inovyn in recent years.

Given the softer markets, S&P anticipates Inovyn will fine-tune its
budgeted investment, but not necessarily adopt a more prudent
financial policy and tighter leverage target, which would be
commensurate with a higher rating.

Inovyn continues to expand capacity in the specialty PVC segment,
commanding margins over feedstock that are about 2x-3x higher than
low-grade, general-purpose vinyls. This strategy also partially
helped the company to achieve high adjusted margins over the past
two years.

S&P factors in that investments and capex will remain relatively
high in 2020, at about EUR200 million-EUR250 million, compared with
over EUR250 million for 2019. Approximately EUR100 million will
pertain to maintenance capex and planned turnaround expenses. That
said, Inovyn's capex plans will likely offer a higher degree of
modularity and discretion, including sizing and sequencing of
projects over the coming years, to enable it to adapt to the market
environment and alter its strategy.

S&P understands Inovyn's prudent approach to expansion and capex
addresses market uncertainties, level of capacity, and destocking
phases, as opposed to accommodating dividend payments. By
comparison with the other Ineos Ltd. entities, such as Ineos
Styrolution, Ineos Group Holdings, and Ineos Enterprises, Inovyn's
financial policy allows for a higher degree of cyclicality, due to
the nature of the industry it operates in.

Inovyn concentrates on PVC; it derived 38% of 2018 sales from
general-purpose vinyls and 11% from specialty vinyls. This remains
a constraining factor for the rating. S&P continues to see PVC as
predominantly a commoditized product, with some potential for
cyclicality in price in periods of sluggish demand or temporary
imbalance with supply.

S&P said, "Our view on Inovyn's business is further constrained by
its exposure to cyclical end markets such as construction, auto,
and consumer goods, which could pose significant risks in periods
of economic downturn. In our view, this is only partially mitigated
by the absence of large customer concentration--Inovyn's top 10
customers accounting for about 30% of sales." The company's core
markets and operations are concentrated in Europe, namely Western
European countries (Belgium, France, Germany, Norway, Spain,
Sweden, and the U.K.), making the entity more vulnerable in periods
of economic downturn than other companies in the wider Ineos
group.

The stable outlook indicates that market conditions for PVC and
prices in caustic soda are likely to soften modestly in 2020, and
performance at Inovyn to weaken, with EBITDA of about EUR570
million-EUR600 million, on still-high reported margins of 16%-18%.
Despite a reversion to mid-cycle conditions and high capex, Inovyn
is expected to report strong profit and cash flows, leading to
adjusted debt-to-EBITA ratio comfortably within 2.0x-2.5x over the
next 12 months.

S&P could lower the rating following an abrupt deterioration in PVC
and caustic soda margins, either from depressed European demand or
from significant new capacities and imports, or if increased
investments or further dividends payments were to constrain cash
levels and weaken debt leverage.

An adjusted debt to EBITDA in excess of 3x without clear prospects
of recovery could also trigger a downgrade. However, in such a
scenario, S&P would assess the parent group's commitment to support
the company's creditworthiness--this could lessen downgrade risk.

S&P could raise the rating to 'BB' if Inovyn demonstrates a
consistent track record of positive free operating cash flow and
maintaining debt to EBITDA of 1.5x-2.0x through the cycle.

This would also depend on it adopting a more conservative financial
policy and tighter leverage target at the Inovyn level. In S&P's
view, Inovyn's ability to maintain resilient margins and prudent
leverage under mid-cycle conditions, while balancing growth capex
investments and dividend payments, will be key factors for an
upgrade.


INTU: May Face Showdown with Investors Over Executive Pay
---------------------------------------------------------
Jessica Clark at City A.M. reports that beleaguered retail landlord
Intu could face a showdown with investors over executive pay, as it
seeks to hike the potential bonus of new chief executive Matthew
Roberts.

According to City A.M., Intu is seeking to bring the the potential
share awards in its long-term incentive plan back up to 250%, after
the scheme was cut back to 200% last year.

However, Mr. Roberts is expected to cut his pension contribution
from 24% of salary to 10%, City A.M. discloses.

The new boss's salary has not yet been announced, City A.M. notes.
His predecessor David Fischel received GBP615,000 a year, City A.M.
states.

The plans come as the property giant is aiming to raise around GBP1
billion in an emergency cash call as it attempts to pay down its
debts, City A.M. relates.

Last week, Link Real Estate Investment Trust pulled out of the
proposed equity raise which is expected to be launched alongside
its full-year results later this month, City A.M. recounts.

Meanwhile, Intu denied reports that it has not taken the potential
impact of Arcadia store closures fully into account, City A.M.,
City A.M. relays.

According to City A.M., A spokesperson for the landlord said the
Arcadia company voluntary arrangement is already accounted for.


MAGENTA PLC 2020: DBRS Assigns Prov. BB Rating on Class E Notes
---------------------------------------------------------------
DBRS Ratings Limited assigned provisional ratings to the following
notes expected to be issued by Magenta 2020 PLC (the Issuer):

-- Class A notes at AAA (sf)
-- Class B notes at AA (low) (sf)
-- Class C notes at A (low) (sf)
-- Class D notes at BBB (low) (sf)
-- Class E notes at BB (sf)

All trends are Stable.

Magenta 2020 PLC (the Issuer) is the securitization of a GBP 270.9
million loan (the initial senior loan was GBP 274.75 million)
advanced to DTP Subholdco Limited (the borrower) to provide
acquisition financing to DTGO Corporation Limited (the sponsor) to
acquire a portfolio of hotels from Marathon Asset Management. The
sponsor also acquired a 25% stake in the operating platform Valor
Hospitality Europe Limited (Valor Europe); however, the senior loan
was not used to fund the acquisition of this stake. The lender and
lead arranger are Goldman Sachs Bank USA (Goldman Sachs). A GBP
65.3 million mezzanine loan to DTP Regional Hospitality Group
Limited was also advanced to the borrower group and is structurally
and contractually subordinated to the senior loan but is not part
of the transaction. DBRS Morningstar understands that the sponsor
has paid a total of GBP 465 million for the acquisition, including
the payment for the purchase of the Valor stake or GBP 460 million
without.

The senior loan is secured by 17 hotels located across the UK.
Valor Europe manages these hotels and operates them under various
franchise agreements with InterContinental Hotels Group (IHG),
Hilton, and Marriott. The portfolio comprises three hotels operated
under the Hilton DoubleTree brand, seven hotels flagged by Crowne
Plaza, three by Hilton Garden Inn, two AC by Marriott, one Holiday
Inn, and one Indigo. The valuer, Savills - London Office (Savills),
has estimated the total market value (MV) (net of standard asset
sale purchaser's costs, which vary between English and Scottish
jurisdictions) to be GBP 435.55 million, or GBP 128,747 per room
based on the 3,383 rooms in the portfolio. The resulting senior
loan-to-value ratio (LTV) of the portfolio is 63% but following a
mandatory repayment of GBP 3.86 million on 10 January 2020, the LTV
is now 62.2%. The portfolio is concentrated in North West England
and the East Midlands where 55% of the total portfolio MV lies;
these two regions comprise nine hotels or 1,847 rooms, and also
56.0% of the 12-month trailing (T-12) EBITDA ended November 2019.
DBRS Morningstar's value assumption for the portfolio is GBP 347.8
million (a 20.2% haircut), resulting in a 78% stressed LTV.

The portfolio benefits from a stabilized occupancy rate of 83.6% as
at the end of November 2019 with a revenue per available room
(RevPAR) of GBP 72.2 per night and an average daily rate (ADR) of
GBP 86.4. According to STR data, the portfolio's overall
performance is slightly better than its competitive set. For the
T-12 ending November 2019, the portfolio generated GBP 133.8
million in revenue, and after deducting costs and expenses, the
EBITDA for the same period was GBP 35.0 million and the net
operating income (NOI) was GBP 30.3 million after management fees
and deductions for furniture, fixture, and equipment (FF&E). For
the year ending December 2018 (T-12 December 2018), the NOI was GBP
30.2 million. DBRS Morningstar's stressed net cash flow (NCF)
assumption for the portfolio is GBP 27.0 million.

All hotel properties in the portfolio, with the exceptions of
Peterborough and Liverpool (upper midscale), are graded as upscale
hotels. DBRS Morningstar notes that all the obligors are
property-owning companies (PropCos); however, DTP Hospitality UK
Limited, which is a guarantor under the senior loan facility and an
entirely separate entity to the PropCos, employs approximately
1,300 people.

Three of the properties are freehold, three are part freehold and
part long leasehold, and the remaining 11 are held wholly under
long leasehold interests. The unexpired term for the leaseholds
ranges from 78 years to 965 years with seven of these only paying a
peppercorn rent. The lease sum in total across the portfolio
amounts to approximately GBP 500,000, and this was factored into
the valuation. DBRS Morningstar notes that the franchise fee will
increase slightly this year (2020), and to maintain the current
level of NCF generated by the portfolio, turnover, and gross
operating profit will have to increase accordingly.

Prior to the senior loan utilization date of December 10, 2019,
fire safety inspections were carried out, and nine of the 17
properties were found to be potentially noncompliant with current
building fire safety regulations, particularly the properties'
external cladding and fire prevention systems. Legally, the
obligation is to comply with building regulations at the time of
construction or when substantial building works are carried out.
New or updated building regulations are not retrospective in an
application so even if a building does not comply with current
building regulations, this in itself is not a breach of law. In
relation to the nine potentially noncompliant properties, the
vendor and the sponsor obtained the fire safety reports (prepared
by BuroHappold Engineering), and the original senior lender
received reliance on these as a condition precedent to its funding
of the senior loan. Recommendations were made within the reports
citing remediation works to include replacements of cladding,
render, insulation, sheathing elements, and fire-stopping & cavity
barrier installation, amongst other things. All such remediation
work should be completed over a two-and-a-half-year period in a
planned manner to effectively remediate and minimize disruption to
the day-to-day operation of the hotels. Meantime, the sponsor
confirmed that the interim measures recommended by the independent
consultant have been implemented at the hotels.

The obligors are required to appoint a fire safety monitor to
oversee the remediation and to open a fire safety account, always
ensuring the amount held in it, aggregated with any amounts
callable under available letters of credit, is at least equal to
the then-current estimate of the costs required to complete the
remedial works. The cost of remediation is estimated to be
approximately GBP 27 million. Should the aggregated amount be less
than the current estimate, a remedial cash trap event will occur.
In this event, any surplus proceeds in the debt service account are
required to be applied towards the fire safety account from the
relevant line item in the debt service account priority of payments
(such line item falling after senior and mezzanine debt service but
before any payments to the imminent costs ledger of the FF&E
account, and payment of any surplus funds to the cash trap account,
the mezzanine cash trap account, or the general account). An event
of default will occur if a remedial works cash trap event continues
for three months.

The senior loan bears interest at a floating rate equal to
three-month Libor (subject to zero floors) plus a margin of 2.78%
per year. The expected loan maturity date is 10 December 2021 with
three one-year extension options available. The notes to be issued
by the Issuer bear a final maturity date falling in December 2029,
thereby providing a tail period of five years assuming the three
one-year extension options are exercised. The interest amounts
payable on the notes will be calculated by reference to the
Sterling Overnight Index Average (Sonia). The Issuer and Goldman
Sachs International, as swap provider, will enter into an interest
rate swap agreement for the duration of the loan term to smooth any
spikes in Sonia (linked to note payments) versus Libor (linked to
loan payments).

DBRS Morningstar notes that Libor, other interest rates, and
indices deemed to be benchmarked are the subject of ongoing
national and international regulatory reform. In the event of the
discontinuation of Libor, the hedge agreement may be terminated and
(1) the loan fallbacks to a compounded daily Sonia rate, in which
case, provided that changes are made to the observation period
under the loan, there is no mismatch with the rate payable under
the notes. If the swap had remained in place after the senior loan
initial termination date, break costs would be payable, which could
result in payments received by the Issuer on any loan interest
accrual period to be insufficient to pay in full all amounts due on
the notes relating to the corresponding note interest period.

Starting 15 months after the closing date, the borrower is required
to amortize the senior loan by 0.25% of the senior loan amount at
issuance, per quarter, forming the base amortization. In addition
to the base amortization, but only if the NOI debt yield (DY) for
that period falls below 11.3%, the borrower is required to double
the amortization payment on each IPD, unless in each case the LTV
is below 50.0%. The T-12 November 2019 NOI DY at cutoff was 11.8%.
Scheduled amortization proceeds will be distributed pro-rata to the
noteholders unless a sequential payment trigger is continuing, in
which case the proceeds will be distributed sequentially. Before a
sequential payment trigger event, in the case of a mandatory
prepayment after property disposals, the senior allocated loan
amount (ALA) along with release premiums will be allocated
pro-rata. The senior release price is set at 15% above the ALA of
the disposed of the property. In the case of voluntary prepayments
funded by equity, the note share amount will be allocated in
reverse sequential order before any pro-rata and sequential
principal payment allocation.

The senior loan has LTV and DY covenants for cash trap and events
of default. The LTV cash trap covenant is set at 67.19% whilst the
DY cash trap covenant is triggered if the DY falls below 9.59%
within the first six months, below 9.31% from six to 12 months,
9.03% from 12 to 30 months, 9.31% up to 36 months, or falls below
9.59% for the remaining term. The LTV default covenants are set at
72.19% whilst the DY default covenant is triggered if the DY falls
below 8.75% within the first six months, below 8.41% from six to 12
months, below 8.08% from 12 to 36 months, or if it falls below
8.75% for the remaining term.

The interest rate risk is fully hedged until the initial senior
loan maturity date by way of a prepaid cap with a strike rate of
1.5% provided by Standard Chartered Bank. If the term of the loan
is extended, the interest rate risk must be hedged by way of a
prepaid cap with a strike rate of not higher than 2.25%.

To maintain compliance with applicable regulatory requirements,
Goldman Sachs will retain an ongoing material economic interest of
no less than 5% of the securitization via an issuer loan, which is
to be advanced by Goldman Sachs Bank USA.

On the closing date, the Issuer will establish a reserve that will
be credited with the initial issuer liquidity reserve required
amount. Part of the noteholders' subscription for the Class A notes
will be used to provide 95% of the liquidity support for the
transaction, which is initially set at GBP 8.7 million, or 3.3% of
the total outstanding balance of the notes. The remaining 5% will
be funded by the issuer loan. DBRS Morningstar understands that the
liquidity reserve will cover the interest payments to Classes A to
C. No liquidity withdrawal can be made to cover shortfalls in funds
available to the Issuer to pay any amounts in respect of interest
due on the Class D notes or the Class E notes. Class E is subjected
to an available funds cap where the shortfall is attributable to an
increase in the weighted-average margin of the notes.

Based on a cap strike of 1.5% DBRS Morningstar estimated the
liquidity reserve will cover 17 months. On each note payment date
relating to each note interest period beginning on or after the
expected note maturity date, the Sonia component payable on the
notes is capped at 5%, in this instance the liquidity reserve will
cover 11 months of interest payments, assuming the Issuer does not
receive any revenue.

The transaction includes Class X certificates. Interest payments
due to the Class X certificates rank initially pro rata and pari
passu to the interest due on the Class A notes. However, upon
certain occurrences, including a Class X trigger event, interest
payments on the Class X certificates become subordinated to
payments due to the other notes. A Class X trigger event will occur
if the loan is not repaid on or before its maturity date, the
senior loan becomes specially serviced, and the issuer security is
enforced following the occurrence of a note event of default. The
Class X certificates will not be entitled to any principal payment.
DBRS Morningstar does not rate the Class X certificates of this
transaction.

Notes: All figures are in British pound sterling unless otherwise
noted.


MICRO FOCUS: S&P Alters Outlook to Negative & Affirms 'BB-' ICR
---------------------------------------------------------------
S&P Global Ratings revised its outlook on Micro Focus International
PLC to negative from stable. At the same time, S&P affirmed its
'BB-' long-term issuer credit rating on the company and its 'BB-'
issue rating on its senior secured bank facilities. The recovery
rating is unchanged at '3' (rounded recovery expectations: 60%).

Continued decline in core revenues weakened the 2019 figures and is
expected to further increase leverage in 2020.  Micro Focus' sales
declined by about 7% in FY2019, and its sales of new licenses in
its security division declined by even more. S&P Global Ratings
attributes the deterioration in sales performance to the difficult
integration with Hewlett Packard Enterprise's (HPE) software
business, as well as the previous attrition of the sales team.
Given that Micro Focus will still be working to integrate HPE in
FY2020, including implementing a new plan to tackle some of the
issues that have arisen, our base case for the year assumes that
revenue will once again shrink by nearly 7%. Under S&P's previous
base-case scenario, it assumed that the revenue decline would slow
to 3% by 2020. Micro Focus also plans to invest about $70
million-$80 million to improve growth prospects, which will lead to
a decline in overall EBITDA of 17%-18% in FY2020. As a result, S&P
Global Ratings-adjusted debt to EBITDA will rise to about 3.9x
before exceptional items and 4.8x fully loaded, up from 3.4x and
4.3x, respectively, in FY2019. This is close to our 4x trigger at
the current rating level.

Although the new plan may improve the company's growth prospects,
it bears significant execution risks for a relatively small
investment.  Micro Focus has identified four major areas that it
plans to tackle:

-- Transforming its go-to-market approach;

-- Running its growth portfolio of products separately (similar to
how it operated Suse):

-- Transitioning some of its products into a SaaS model; and

-- Completing the IT integration of the different operations.

S&P said, "In our view, the plan could improve the sales team's
productivity (chiefly through IT integration) and improve the sales
of licenses and SaaS for some of the company's products.
Nevertheless, executing the plan is going to be tricky, especially
as Micro Focus is still integrating HPE, and has yet to prove that
it can improve retention in its new sales team. In addition, its
new investments in research and development (R&D) have yet to be
tested and could take time to bear fruit. Given the relatively
small scale of the planned R&D investments, developing the results
may require additional investments if revenue growth is to improve.
Therefore, we assume that revenue will improve only slowly from
FY2021, at least until Micro Focus' management team has a longer
track record of delivering on its plans."

Cash flows are expected to remain robust, which may cushion the
effect of revenue decline.  FY2021 should see a meaningful
reduction in exceptional costs. S&P said, "In addition, we
understand that Micro Focus is currently prioritizing reducing its
leverage so that it is closer to its 2.7x net debt to EBITDA
target. We do not expect further extraordinary shareholder
remuneration, like the share buyback program Micro Focus executed
in 2019. Free cash flow generation is therefore expected to be
about $350 million-$400 million in FY2020 and about £550
million-$600 million in FY2021. This reflects discretionary cash
flows (after dividends) of about $150 million-$200 million in
FY2020 and $250 million-$300 million in FY2021. We affirmed the
rating because such significant cash flows should limit the effect
of the revenue decline over the medium term."

The negative outlook indicates the risk that if license and SaaS
sales do not show a tangible recovery during the second half of
FY2020, adjusted leverage will increase to 4x or above in FY2021.
S&P could also lower the rating if it considered Micro Focus'
long-term earnings to be less stable because it cannot materially
improve its sales.

S&P said, "We could lower the rating if Micro Focus' revenue is
weaker than currently forecast revenues or its operating costs
higher; this could result in adjusted leverage before exceptional
costs exceeding 4x in FY2020, with no prospects for improvement in
the near term. Operating costs could rise if R&D requirements are
higher than currently anticipated and retention of sales staff
remains poor.

"We could revise the outlook to stable if Micro Focus outperforms
our base case, so that revenue decline trends down for both license
and SaaS business and the second half of the year brings a notable
improvement."

A smaller decline in revenue, coupled with lower exceptional costs,
would lead to higher discretionary cash flows. In turn, this would
mean S&P Global Ratings-adjusted debt to EBITDA, comfortably below
4x, leaving a buffer under the current rating. In this case, S&P
would expect only minimal exceptional costs to remain in FY2021.



                           *********


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

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

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

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