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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

          Tuesday, February 25, 2020, Vol. 21, No. 40

                           Headlines



F R A N C E

HESTIAFLOOR 2: Fitch Assigns B+(EXP) LongTerm IDR, Outlook Stable
HESTIAFLOOR 2: Moody's Assigns B2 CFR, Outlook Stable
HESTIAFLOOR 2: S&P Assigns Preliminary 'B' ICR, Outlook Stable


I R E L A N D

CARLYLE EURO 2020-1: Fitch Assigns B-(EXP) Rating on Cl. E Debt
CARLYLE GLOBAL 2015-1: Fitch Assigns B-sf Rating on Class E Debt
CARLYLE GLOBAL 2015-1: S&P Assigns B-(sf) Rating on Class E-R Notes


I T A L Y

SISAL PAY: S&P Assigns 'BB-' Issuer Credit Rating, Outlook Stable


K A Z A K H S T A N

EASTCOMTRANS LLP: Moody's Affirms B3 CFR & Alters Outlook to Pos.


L U X E M B O U R G

SBM BALEIA: Fitch Affirms BB- Rating on 2012-1 Sec. Notes


N E T H E R L A N D S

FUGRO NV: Fitch Corrects Feb. 21 Ratings Release
FUGRO NV: Moody's Assigns B2 Corp. Family Rating, Outlook Stable
FUGRO NV: S&P Assigns Prelim. 'B' LongTerm Issuer Credit Rating


R U S S I A

KALUGA GAS: Bank of Russia Approves Financial Resolution Plan
NVKBANK JSC: Put on Provisional Administration, License Revoked
TAJIKISTAN: S&P Affirms 'B-/B' Sovereign Credit Ratings


T U R K E Y

TURKEY: Fitch Affirms BB- LT Issuer Default Rating, Outlook Stable


U N I T E D   K I N G D O M

BRITISH STEEL: Jingye Writes to French Gov't to Save Rescue Deal
EMF-UK PLC 2008-1: Fitch Upgrades Class B1 Notes to BBsf
FINSBURY SQUARE 2020-1: Fitch Assigns BB+sf Rating on Cl. X Notes
HSS HIRE: Moody's Assigns B2 Corp. Family Rating, Outlook Stable
KIER GROUP: UK Government Taps Deloitte to Monitor Finances

SIRIUS MINERALS: Anglo Says More Attractive Investment Than BHP
SIRIUS MINERALS: Odey Converts Derivative Position Into Shares

                           - - - - -


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F R A N C E
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HESTIAFLOOR 2: Fitch Assigns B+(EXP) LongTerm IDR, Outlook Stable
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Fitch Ratings assigned Hestiafloor 2 (Gerflor) an expected
Long-Term Issuer Default Rating of 'B+(EXP)'. The Outlook is
Stable.

The 'B+(EXP)' IDR reflects Gerflor's key capabilities in various
flooring market segments, which has led to the group establishing a
leading market position in Europe with extensive coverage of the
resilient-flooring end-markets. Gerflor also benefits from
significant exposure to renovation activities (around 75% of sales
for the year to December 2019 (FY19)) rather than new-build
projects, and also benefits from good customer diversification.
This has allowed Gerflor to generate stable margins and strong
levels of free cash flow (FCF).

The rating is constrained by Gerflor's high leverage and its
relatively small scale. Fitch expects deleveraging over the rating
horizon to be supported by good cash generation, but Fitch's
leverage metrics are expected to remain high and in line with the
'B' rating category.

Cobepa's acquisition of Gerflor is expected to close in March and
be funded with EUR850 million of senior secured term loan B, with
Hestiafloor 2 the original borrower, together with a total equity
injection of EUR800 million. A EUR125 million revolving credit
facility (RCF), expected to be undrawn at closing, will also be
available.

The assignment of final ratings is subject to the review of final
financing documents conforming to information already received by
Fitch as well as the completion of the acquisition of a majority
stake in Gerflor by Cobepa.

KEY RATING DRIVERS

High Leverage: Gerflor's acquisition by Cobepa, with a 50/50
financing split between debt and equity will result in high initial
leverage for Gerflor, which Fitch expects to be at 7.3x on a funds
flow from operations (FFO) to gross debt basis in FY20. The initial
leverage is high for the rating, but not out of line with similarly
rated peers (Assemblin and Quimper; both B/Stable). However, Fitch
expects Gerflor to deleverage significantly by FY22.

Strong FCF Provides Deleveraging Capacity: Gerflor's market
position and good customer and geographic diversification have
enabled the group to deliver strong, stable margins with a solid
level of FCF generation. Fitch therefore expects leverage to
improve to below 6.0x by FY23 on the back of increasing cash flow
generation. Fitch expects FFO fixed charge cover to remain above
4.0x over its projections, highlighting satisfactory financial
flexibility.

Increasing Penetration of LVT Products: Resilient-flooring
penetration in Europe has been consistently increasing versus other
materials, with management estimating market share gains of 21% to
24% over 2010-2019, continuing to 25% by 2023. This has been driven
by increasing demand for vinyl products, notably luxury vinyl tiles
(LVT), which offer product differentiation against competing
materials, including their hygienic nature (easy-clean aligning
itself to healthcare, hospitality, technology operations),
configurable design and ease of installation.

Renovation Market Drives Stability: Gerflor's contract division is
driven by its exposure to the less cyclical renovation construction
segment rather than the new build segment. With 80% of Gerflor's
Contract division sales being generated through renovation
activities, this has resulted in good historical organic growth
with relatively stable margins, providing a hedge to the volatility
in new-build construction markets.

Direct Distribution Channel: Gerflor operates two distribution
channels with 60% direct sales to end-market customers and 40%
sales via an intermediary (distributor). While the direct
distribution channel provides Gerflor with flexibility over its
pricing, leading to higher margins, the group employs a sales force
of 850 people across Europe, representing high staff costs at
around 7% of sales.

Fitch views the distribution channel diversification positively,
which is further enhanced by the direct distribution channel
resulting in a relationship-based, long-term, repeat customer base.
Fitch also believes that a direct sales approach may limit new
customer exposure (that might be achieved through distributors),
particularly in a more competitive market, such as the residential
market where Gerflor has 11% sales and face higher competition.

High Barriers to Entry: Barriers to entry are supported by the
group's vertical product integration combined with its strong focus
on product development. Additionally, the relationship-based nature
of the direct distribution channel strengthens barriers to entry,
with close cooperation with customers or stakeholders (including
architects, designers or administrators) providing the opportunity
for repeat work and recurring revenue. The often technical nature
of Gerflor's products requires high R&D than more standardised
residential flooring, which improves the group's resilience.

Leader in Some Niche Industries: Gerflor has strong market
positions in the transport flooring and resilient sport indoor
(worldwide) segments. Geographically it is the leader in the French
and German contract vinyl markets and is a top-three provider for
the rest of Europe. The specialised nature of some of Gerflor's
products means its scale is less than that of some more generalist
floor suppliers, such as Mohawk Industries Inc (EUR8.5 billion of
sales ), Shaw Floors (EUR4.5 billions ) and Tarkett (EUR2.8
billion, all in 2018).

Gerflor's customer base is well diversified with more than 12,000
customers across varied end-user segments, such as hospitals,
social housing, sport premises, schools, retail, residential and
transport.

Sound Profitability, Better Resilience Through Cycle: Gerflor's
profitability is relatively strong with EBITDA and FFO margins
expected to be above 15% and 10%, respectively, from FY21. Fitch
believes margin resilience is a result of the well-managed, niche
targeted business model, well-managed input and sales prices and
strong customer relationships (around 26 years for the top 20
customers). Gerflor has some flexibility in its costs base, as 37%
of material costs and 15% of sales & marketing costs are variable,
translating into healthy FCF margins of more than 5.0% over its
rating horizon.

Proven Strategy Despite Ownership Change: Gerflor's strategy
remains focused on organic growth through the development of new
products to gain market share. However, the company has
historically been acquisitive with small bolt-on acquisitions.
Accordingly Fitch forecasts limited bolt-on acquisitions of EUR30
million per year. Despite the change in ownership, Fitch
understands that Cobepa's investment intention is long-term
focused, aligning with management's current operational strategy.

Good Recovery Prospects for Senior Secured Lenders: The expected
senior secured debt rating is 'BB-(EXP)', one notch higher than the
IDR to reflect Fitch's expectation of above-average recoveries for
the term loan B and RCF in a hypothetical default scenario. The
'RR3' reflects recovery prospects between 51% and 70% in a default
situation, as per Fitch's criteria. In its recovery assessment,
Fitch conservatively values Gerflor on the basis of a 5.5x
distressed multiple applied to an estimated post-restructuring
EBITDA of EUR114 million, which is 25% below its forecast 2020
EBITDA of EUR153 million.

DERIVATION SUMMARY

Gerflor is larger than both Victoria plc (BB-/Stable) and Balta
Group and has developed leading market positions in its niche
resilient flooring segment although is smaller than Mohawk
Industries (BBB+/Stable). The group is similarly well
geographically diversified compared with L'isolante K-Flex SpA
(B+/Stable). However, like most building products companies it has
limited product differentiation.

The group has developed innovative product solutions enabling it to
cater to a wide range of end-customers, which compares positively
with peers such as Polygon (B+/Stable). Gerflor's distribution
channels deliver strong exposure to renovation or refurbishment
construction activities similar to Quimper AB, which is supported
through their significant sales force resulting in strong
relationships and delivering good levels of repeat business.

Gerflor and Victoria present similar financial metrics in term of
scale (EBITDA margins and FCF margins but Gerflor's FFO adjusted
leverage is higher than Victoria's over its rating horizon. Fitch
expects Gerflor's FFO adjusted leverage to improve below 6.0x by
2023 versus Victoria's FFO adjusted leverage below 4.5x over the
same period. Compared with Assemblin and Quimper, Gerflor has more
stable EBITDA margin generation than Assemblin and a higher FCF
margin than Quimper.

KEY ASSUMPTIONS

  - Sales growth of CAGR 4.39% from FY19-FY23

  - EBITDA margin improving to 15.4% by 2023 as a result
    of better product mix and small bolt-on acquisitions
    of EUR30 million per year

  - EUR30 million bolt-on acquisition per year

  - Working capital outflow of around EUR10 million per year

  - Cash taxes around EUR30 million per year

  - Capex intensity between 3.1%-2.8% over the rating horizon

RATING SENSITIVITIES

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

  - FFO adjusted leverage below 4.5x on a sustainable basis

  - Increase in scale with EBITDA trending toward EUR250 million
    while keeping FCF margins at mid-single digit

  - Increased diversification in segments (e.g. sport with North
    America representing over 50% of sales) or geographies

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

  - Failure to deleverage below 6.5x on FFO adjusted leverage
    by December 2021

  - Transformational acquisitions (larger than EUR70 million per
year)
    eroding margins

  - FCF margin neutral to negative

LIQUIDITY AND DEBT STRUCTURE

Sound Liquidity: Gerflor's expected liquidity position is
comfortable and in line with a 'B' category rating, supported by
the non-amortising nature of the planned term loan B with no debt
maturity before 2027. Financial flexibility is enhanced by a EUR125
million RCF, expected to be fully undrawn following the closing of
the transaction. Liquidity is further supported by its expectation
of positive FCF generation over the medium term.

ESG CONSIDERATIONS

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


HESTIAFLOOR 2: Moody's Assigns B2 CFR, Outlook Stable
-----------------------------------------------------
Moody's Investors Service assigned a B2 Corporate Family Rating and
a B2-PD Probability of Default Rating to Hestiafloor 2.
Concurrently, Moody's assigned a B2 rating to the senior secured
EUR850 million term loan B with 7 years tenor and to the senior
secured EUR125 million revolving credit facility with 6.5 years
tenor. The outlook on the ratings is stable.

The new financing, in combination with common equity, will be used
to fund the leverage buyout of the company by Cobepa which will
control a majority stake alongside ICG, the previous majority
shareholder, and management. The sale is conditional upon
regulatory clearance and is expected to close in February 2020.

RATINGS RATIONALE

Gerflor's B2 CFR is primarily supported by (1) its established
market position in the attractive and growing vinyl contract market
with an estimated 24% market share across Europe; (2) its good
geographical and end-market diversification; (3) its long track
record of profitable growth through the construction cycle; (4)
strong free cash flow (FCF) supported by solid profitability,
modest maintenance capex and working capital requirements; and (5)
experienced management team with a long and proven track record.

At the same time, the CFR is constrained by (1) the elevated
opening leverage for the rating category with Moody's adjusted
debt/EBITDA expected at 6.5x pro-forma for the new capital
structure, (2) its exposure to economic and construction cycles
although partially mitigated by the high share of renovation; (3)
the competitive market with high pricing pressure; and (4) exposure
to volatile input costs.

Moody's adjusted opening leverage is 6.5x at December 2019 pro
forma for the transaction and the full year effect of acquisitions,
but before any future synergies and expected cost savings. While
the initial leverage is high for a B2 rated company, Moody's
expects leverage to decline to below 6.0x in the next 18 months.
Gerflor's well-established position in its key markets and exposure
to the fast growing Luxury Vinyl Tiles (LVT) product should support
the company's organic growth, which Moody's expects to be at least
in line with market growth rates.

Gerflor has also grown historically through acquisitions, and
Moody's expects the company to continue its external growth
strategy which could potentially slowdown the deleveraging pace.
However Moody's understands that these will largely be funded from
internal cash given the company's ability to generate strong FCF.
While the company is exposed to ongoing pricing pressure and cost
inflation, Moody's recognises Gerflor's strong track record of
maintaining and growing its margins even through the economic and
construction cycles. This was achieved in part from ongoing
productivity gains but also due to its large exposure to the less
cyclical renovation and non-residential market, as well as good end
market and geographic diversification. The current rating does not
factor in any shareholder distributions.

ESG CONSIDERATIONS

Increasing environmental awareness related to the release of
harmful chemicals such as phthalate and volatile organic compound
(VOC) have posed significant technical challenges to global
resilient flooring manufacturers. Although Gerflor is exposed to
these changing demands and regulatory requirements, its strong
technical capabilities and high focus on innovation enabled the
company to adapt swiftly to these developments. Moody's understands
that the company is compliant with the different regulatory
requirements and its products are certified by reputable
Certification Organizations.

Governance risks mainly relate to the company's private-equity
ownership which tends to tolerate a higher leverage with a more
aggressive external growth strategy. However, Moody's understands
that Cobepa, ICG and management, are supportive of a sustainable
growth strategy.

An anti-trust fine was imposed by the French Competition
Authorities in 2017 following an investigation that started in
2013. However Moody's understands that since this was raised in
2011 the company has substantially reinforced the required
compliance and audit systems, and therefore there are no other
investigation expected in this regard.

STRUCTURAL CONSIDERATIONS

The new EUR850 million term loan B and the new EUR125 million RCF
are rated in line with the CFR. The instruments are senior secured,
share the same security package, rank pari passu and are guaranteed
by a group of companies representing at least 80% of the
consolidated group's EBITDA. The borrower of these instruments is
the top entity of the restricted group Hestiafloor 2. Moody's has
considered the security package, consisting of shares, bank
accounts and intragroup receivables, as limited and have used a
recovery rate of 50%, reflecting the covenant-lite capital
structure.

LIQUIDITY

Moody's views Gerflor's liquidity position as good. This is
supported by a cash on balance sheet of EUR42 million, pro forma
for the transaction, and a sizeable new and fully undrawn RCF of
EUR125 million maturing in 2026. The liquidity profile is further
supported by Gerflor's strong funds from operations which should
comfortably cover the seasonality of its working capital and
capital spending requirements for the period. There are no major
debt maturities until 2027. The company's liquidity profile is
characterized by the existence of a springing covenant (with ample
capacity) to be tested only when the RCF is drawn by more than 40%
with a net leverage covenant of 9.0x.

OUTLOOK

The stable outlook reflects Moody's expectations that in the next
12-18 months, Gerflor will be able to grow organically with a
slight expansion in profit margins which should support a gradual
deleveraging of Moody's adjusted debt/EBITDA to below 6.0x.

WHAT COULD CHANGE THE RATING UP/DOWN

Upward pressure on the ratings could develop if Gerflor is able to
(1) improve its Moody's adjusted debt/EBITDA ratio to below 4.5x on
a sustainable basis, (2) maintain a strong profitability with
Moody's adjusted EBITA margins above 12% and (3) Moody's adjusted
FCF/debt above 5% with a good liquidity profile.

Downward pressure on the ratings could arise if (1) Moody's
adjusted leverage remains above 6.0x on a sustainable basis, (2)
its profitability deteriorates with EBITA margins decline to below
12% and (3) its Moody's adjusted free cash flow deteriorates
towards break-even or its liquidity position weakens.

PRINCIPAL METHODOLOGY

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

COMPANY PROFILE

Headquartered in Villeurbanne, France, Gerflor is a manufacturer of
resilient flooring products, largely for the non-residential
end-market throughout Europe but also with operations in the
Americas and APAC. The company's activities are organised in four
main divisions: contract, sports, transport and residential. It
designs, manufactures and distributes its products through 19
manufacturing plants and logistic hubs. For 2019 the company had
around 4,200 employees and generated revenues of around EUR1
billion.


HESTIAFLOOR 2: S&P Assigns Preliminary 'B' ICR, Outlook Stable
--------------------------------------------------------------
S&P Global Ratings assigned its preliminary 'B' ratings to French
resilient flooring manufacturer Gerflor's intermediate parent
company Hestiafloor 2 and to the proposed EUR850 million term loan
B due 2027, with a recovery rating of '3'.

In December 2019, Cobepa signed an agreement to acquire Gerflor.
As part of the transaction, Gerflor plans to issue:

-- EUR850 million term loan B due 2027; and

-- EUR125 million revolving credit facility (RCF)
    due 2027, assumed undrawn at closing.

The proceeds will be used to fund the buyout, refinance Gerflor's
debt, and pay the transaction costs. There is also EUR29 million of
rolled over debt in the capital structure.

Gerflor is a market leader in resilient flooring (flooring made of
vinyl, linoleum, and rubber). With a 24% market share, the company
co-leads the European resilient flooring market with Tarkett. It
has strongholds in France and in Germany. S&P siad, "We understand
that the European resilient flooring market comprises four main
players. We also note Gerflor's solid market position in the sport
end-market and in the transportation flooring business (mainly
aviation and buses). While the company has a strong presence in
Asia and the U.S., we still consider Gerflor as concentrated in
Europe, which represent 70% of the company's sales."

S&P said, "We expect Gerflor will maintain a strong organic growth
profile.   Over the past five years, Gerflor has experienced strong
average organic growth of 5.3%. This is thanks to an increasing
rate for vinyl tiles over alternative flooring products, and the
development of Gerflor's product offerings on the back of
continuous innovation. Gerflor also expanded through bolt-on
acquisitions, which accounted for EUR169 million of additional
sales between 2014 and 2019. While our base case does not assume
any mergers and acquisitions (M&A) due to uncertainty surrounding
their timing or size, we understand the company will likely
continue its bolt-on acquisition strategy."

While Gerflor has started to enter new markets, such as linoleum,
S&P views the company as somewhat less diversified than other peers
such as Tarkett or Mohawk.  Resilient flooring represents 25% of
the estimated flooring market. The rest of the market is split
between ceramics, carpets, and laminates.

S&P said, "We forecast S&P Global Rating adjusted EBITDA margins of
15.5%-16.0% in 2020-2021.  We believe this is in line with that of
other peers in the building material sector. We note that Gerflor
has improved its margins over the last few years, boosted by cost
control and some positive product mix in, for example, the
transport end-market. Gerflor has continued to increase its EBITDA
throughout the economic cycles, with uninterrupted growth since
2006. Moreover, Gerflor's M&A have not resulted in any major margin
deviation. In the coming years, we believe Gerflor could also
benefit from its current cost saving plan, which is focused on
logistic, marketing, and cost saving initiatives.

"We expect capex will normalize to 3.0%-3.5% of sales, and free
cash flows of at least EUR40 million-EUR45 million on a recurring
basis over 2020-2021.  This is because Gerflor should not have
significant capital expenditure (capex) requirements in the next
couple of years. In 2019, the company completed a major capex
project in France, adding new capacity in its luxury vinyl tiles
and technical tiles divisions, also increasing recyclable content.

"We forecast S&P Global Ratings adjusted debt to EBITDA of about
6.2x for Gerflor in 2020.  While we expect gradual deleveraging,
supported by business growth and margin controls, we believe that
adjusted leverage will remain above 5.0x over the next two years.
Our assessment of Gerflor's financial risk profile is mainly
constrained by the group's high debt, which we estimate at about
EUR1 billion at closing of the acquisition (including an undrawn
RCF).

"We believe financial sponsor ownership limits the potential for
leverage reduction over the medium term.   Although we do not
deduct cash from debt in our calculation owing to Gerflor's
private-equity ownership, we expect that cash will be partly used
to fund bolt-on M&A. In the medium term, the financial sponsor's
commitment to maintaining financial leverage sustainably below 5.0x
would be necessary for an improved financial profile assessment.

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

"The stable outlook reflects our view that Gerflor will continue to
and perform well thanks to new product launches and the increasing
penetration rate for resilient flooring. We expect adjusted debt to
EBITDA will gradually decrease to below 6.0x, and anticipate
Gerflor will continue to generate positive free operating cash flow
(FOCF).

"We could lower the rating if Gerflor experiences prolonged
weakening in profitability and cash flow generation due to
deteriorating market conditions. We could also lower the rating if
the company adopts more aggressive financial policies--including
debt-financed dividend recapitalization or acquisitions--that
result in leverage above 6.5x on a prolonged basis, with low
prospects for improvement.

"We could raise the rating if the company reported adjusted
leverage sustainably below 5x and funds from operations (FFO) to
debt sustainably above 12%. In addition, strong commitment from the
private-equity sponsor to maintain leverage commensurate with a
higher rating would be an important consideration for an upgrade."




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CARLYLE EURO 2020-1: Fitch Assigns B-(EXP) Rating on Cl. E Debt
---------------------------------------------------------------
Fitch Ratings assigned Carlyle Euro CLO 2020-1 DAC expected
ratings.

The assignment of final ratings is contingent on receipt of final
ratings conforming to information already reviewed.

RATING ACTIONS

Carlyle Euro CLO 2020-1 DAC

Class A-1;    LT AAA(EXP)sf;  Expected Rating

Class A-2A;   LT AA(EXP)sf;   Expected Rating

Class A-2B;   LT AA(EXP)sf;   Expected Rating

Class B;      LT A(EXP)sf;    Expected Rating

Class C;      LT BBB-(EXP)sf; Expected Rating

Class D;      LT BB-(EXP)sf;  Expected Rating

Class E;      LT B-(EXP)sf;   Expected Rating

Subordinated; LT NR(EXP)sf;   Expected Rating

TRANSACTION SUMMARY

Carlyle Euro CLO 2020-1 DAC is a cash-flow collateralised loan
obligation (CLO). Net proceeds from the notes will be used to
purchase a EUR450 million portfolio of mainly euro-denominated
leveraged loans and bonds. The transaction has a 4.5-year
reinvestment period and a weighted average life of 8.5 years. The
portfolio of assets will be managed by CELF Advisors LLP.

KEY RATING DRIVERS

'B'/'B-' Portfolio Credit Quality: Fitch places the average credit
quality of obligors in the 'B'/'B-' category. The weighted-average
rating factor (WARF) of the identified portfolio is 34.8.

High Recovery Expectations: At least 90% of the portfolio comprises
senior secured obligations. Recovery prospects for these assets are
typically more favourable than for second-lien, unsecured and
mezzanine assets. The weighted-average recovery rating (WARR) of
the identified portfolio is 67.3%.

Diversified Asset Portfolio: The covenanted maximum exposure to the
top 10 obligors limit for assigning expected ratings is 20% of the
portfolio balance. The transaction has various concentration
limits, including a maximum exposure of 40% to the three-largest
Fitch-defined industries in the portfolio. These covenants ensure
that the asset portfolio will not be exposed to excessive
concentration.

Portfolio Management: The transaction features a 4.5-year
reinvestment period and includes reinvestment criteria similar to
other European transactions'. Fitch's analysis is based on a
stressed-case portfolio with the aim of testing the robustness of
the transaction structure against its covenants and portfolio
guidelines

Cash Flow Analysis: Fitch used a customised proprietary cash flow
model to replicate the principal and interest waterfalls, and the
various structural features of the transaction, as well as to
assess their effectiveness, including the structural protection
provided by excess spread diverted through the par value and
interest coverage tests.

RATING SENSITIVITIES

A 125% default multiplier applied to the portfolio's mean default
rate, and with this increase added to all rating default levels,
would lead to a downgrade of up to two notches for the rated notes.
A 25% reduction in recovery rates would lead to a downgrade of up
to three notches for the rated notes.


CARLYLE GLOBAL 2015-1: Fitch Assigns B-sf Rating on Class E Debt
----------------------------------------------------------------
Fitch Ratings assigned Carlyle Global Market Strategies Euro CLO
2015-1 DAC final ratings.

The assignment of the final ratings is contingent on the receipt of
final documents conforming to information already reviewed.

RATING ACTIONS

Carlyle Global Market Strategies Euro CLO 2015-1 DAC

Class X;      LT AAAsf New Rating;  previously at AAA(EXP)sf

Class A-1-R;  LT AAAsf New Rating;  previously at AAA(EXP)sf

Class A-2A-R; LT AAsf New Rating;   previously at AA(EXP)sf

Class A-2B-R; LT AAsf New Rating;   previously at AA(EXP)sf

Class B;      LT Asf New Rating;    previously at A(EXP)sf

Class C;      LT BBB-sf New Rating; previously at BBB-(EXP)sf

Class D;      LT BB-sf New Rating;  previously at BB-(EXP)sf

Class E;      LT B-sf New Rating;   previously at B-(EXP)sf

Sub. Notes;   LT NRsf New Rating;   previously at NR(EXP)sf

TRANSACTION SUMMARY

Carlyle Global Market Strategies Euro CLO 2015-1 DAC is a
securitisation of mainly senior secured obligations with a
component of senior unsecured, mezzanine, second-lien loans and
high-yield bonds. The issuer has issued the rated notes to redeem
all existing notes, except the subordinated notes. The portfolio
with a target par of EUR450 million is actively managed by CELF
Advisors LLP. The collateralised loan obligation (CLO) has a
4.5-year reinvestment period and an 8.5-year weighted average life
(WAL).

KEY RATING DRIVERS

'B'/'B-' Portfolio Credit Quality: Fitch places the average credit
quality of obligors in the 'B'/'B-' category. The Fitch-weighted
average rating factor (WARF) of the identified portfolio is 34.

High Recovery Expectations: At least 95% of the portfolio comprises
senior secured obligations. Fitch views the recovery prospects for
these assets as more favourable than for second-lien, unsecured and
mezzanine assets. The Fitch-weighted average recovery rate (WARR)
of the identified portfolio is 66.5%.

Diversified Asset Portfolio: The transaction includes several Fitch
test matrices corresponding to the top 10 obligors' concentration
limits and fixed-rate asset limits. The manager can interpolate
within and between the matrices. The transaction also includes
various concentration limits, including the maximum exposure to the
three-largest (Fitch-defined) industries in the portfolio at 40%.
These covenants ensure that the asset portfolio will not be exposed
to excessive concentration.

Portfolio Management: The transaction has a 4.5-year reinvestment
period and includes reinvestment criteria similar to those of other
European transactions'. Fitch's analysis is based on a
stressed-case portfolio with the aim of testing the robustness of
the transaction structure against its covenants and portfolio
guidelines.

Cash Flow Analysis: Fitch used a customised proprietary cash flow
model to replicate the principal and interest waterfalls and the
various structural features of the transaction, and to assess their
effectiveness, including the structural protection provided by
excess spread diverted through the par value and interest coverage
tests.

RATING SENSITIVITIES

A 125% default multiplier applied to the portfolio's mean default
rate, and with this increase added to all rating default levels,
would lead to a downgrade of up to two notches for the rated notes.
A 25% reduction in recovery rates would lead to a downgrade of up
to four notches for the rated notes.


CARLYLE GLOBAL 2015-1: S&P Assigns B-(sf) Rating on Class E-R Notes
-------------------------------------------------------------------
S&P Global Ratings assigned credit ratings to Carlyle Global Market
Strategies Euro CLO 2015-1 DAC's class X to E-R European cash flow
CLO reset notes. The issuer has also issued unrated subordinated
notes.

The issuer has used the proceeds from the issuance of these notes
to redeem the existing rated notes. The ratings assigned to the
notes reflect S&P's assessment of:

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

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

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

-- The transaction's legal structure, which S&P considers
bankruptcy remote.

-- The transaction's counterparty risks, which are in line with
S&P's counterparty rating framework.

Under the transaction documents, the rated notes will pay quarterly
interest unless a frequency switch event occurs. Following this,
the notes will permanently switch to semiannual payments. The
portfolio's reinvestment period will end approximately
four-and-a-half years after closing.

S&P said, "Our ratings reflect our assessment of the preliminary
collateral portfolio's credit quality, which has a weighted average
rating of 'B'. In our view, the portfolio is granular in nature,
and well-diversified across obligors, industries, and asset
characteristics when compared to other CLO transactions we have
rated recently. As such, we have not applied any additional
scenarios or sensitivity analyses when assigning ratings to this
transaction.

"Therefore, we conducted our credit and cash flow analysis by
applying our criteria for corporate cash flow CDOs.

"In our cash flow analysis, we used the EUR450 million par amount,
the covenanted weighted-average spread of 3.65%, and the covenanted
weighted-average coupon of 4.50%. For the 'AAA (sf)' rated notes,
we used the targeted minimum weighted-average recovery rates as
indicated by the collateral manager, and for all other classes of
notes, we used the actual weighted-average recovery rates generated
by the portfolio in accordance with our analysis. We applied
various cash flow stress scenarios, using four different default
patterns, in conjunction with different interest rate stress
scenarios for each liability rating category."

Until the end of the reinvestment period in July 2024, the
collateral manager can substitute assets in the portfolio for so
long as our CDO Monitor test is maintained or improved in relation
to the initial ratings on the notes. This test looks at the total
amount of losses that the transaction can sustain as established by
the initial cash flows for each rating, and compares that with the
current portfolio's default potential plus par losses to date. As a
result, until the end of the reinvestment period, the collateral
manager can, through trading, deteriorate the transaction's current
risk profile, as long as the initial ratings are maintained.

S&P said, "We consider that the transaction's documented
counterparty replacement and remedy mechanisms adequately mitigate
its exposure to counterparty risk under our current counterparty
criteria.

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

"We consider that the transaction's legal structure is bankruptcy
remote, in line with our legal criteria.

"Our credit and cash flow analysis indicates that the available
credit enhancement for the class A-2A-R to D-R notes could
withstand stresses commensurate with higher rating levels than
those we have assigned. However, as the CLO is still in its
reinvestment phase, during which the transaction's credit risk
profile could deteriorate, we have capped our assigned ratings on
the notes.

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

  Ratings List

  Class   Rating  Amount      Sub (%)   Interest rate*
                  (mil. EUR)
                  
  X       AAA (sf)   1.10     N/A      Three/six-month EURIBOR
                                         plus 0.40%

  A-1-R   AAA (sf)   279.10   37.98    Three/six-month EURIBOR
                                         plus 0.96%

  A-2A-R  AA (sf)    22.40    27.67    Three/six-month EURIBOR
                                         plus 1.70%

  A-2B-R  AA (sf)    24.00    27.67    2.05%

  B-R     A (sf)     30.00    21.00    Three/six-month EURIBOR
                                         plus 2.20%

  C-R     BBB (sf)   27.00    15.00    Three/six-month EURIBOR
                                         plus 3.40%

  D-R     BB (sf)    24.80    9.49     Three/six-month EURIBOR
                                         plus 5.50%

  E-R     B- (sf)    12.70    6.67     Three/six-month EURIBOR
                                         plus 8.03%

  Sub     NR         54.00    N/A      N/A

* The payment frequency switches to semiannual and the index
switches to six-month EURIBOR when a frequency switch event occurs.

EURIBOR--Euro Interbank Offered Rate.
NR--Not rated.
N/A--Not applicable.





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

SISAL PAY: S&P Assigns 'BB-' Issuer Credit Rating, Outlook Stable
-----------------------------------------------------------------
S&P Global Ratings said that it has assigned a 'BB-' issuer credit
rating to Sisal Pay SpA and a 'BB-' issue rating to Sisal Pay's
EUR530 million senior secured notes. The recovery rating on the
issue ratings is '4'. The outlook on Sisal Pay is stable.

The conversion follows the completion of the corporate partnership
between Sisal Group and Intesa Sanpaolo (through its subsidiary
Banca 5) and the successful issuance of the EUR530 million senior
secured notes due 2026.

These ratings are in line with the preliminary ratings S&P assigned
on Dec. 2, 2019.




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

EASTCOMTRANS LLP: Moody's Affirms B3 CFR & Alters Outlook to Pos.
-----------------------------------------------------------------
Moody's Investors Service changed to positive from stable the
outlook of Eastcomtrans LLP and has affirmed the company's B3
corporate family rating, B3-PD probability of default rating, and
B3 senior secured rating of its outstanding notes. Concurrently,
Moody's has upgraded to Ba3.kz from B1.kz ECT's national scale
corporate family rating.

RATINGS RATIONALE

The rating action reflects ECT's strengthened operating and
financial performance after the crisis of 2015-16, which, along
with the market recovery, was underpinned by the company's
improving business profile and balanced financial policy.

In particular, to reduce its historically high business and
customer concentration, since 2017, ECT has been gradually (1)
developing freight rail operator and logistics services; (2)
replacing some of its tank cars with open cars, which help to
better balance the market dynamics in different segments; and (3)
developing its business in the large Russian market. As a result of
ECT's efforts to strengthen its operating profile and supported by
the stabilised macroeconomic environment in Kazakhstan, the company
restored its revenue and adjusted EBITDA in tenge terms (the
company's reporting currency) to above the pre-crisis levels, while
preserving sound profitability. At the same time, the growth in US
dollar terms was largely offset by the persistently weak domestic
currency with earnings remaining well below the 2014 levels.

In 2020, Moody's expects a gradual improvement in market tank car
rates, coupled with the long-term contract with its largest
customer, Tengizchevroil LLP (TCO), successfully renewed in October
2019, to partly offset the developing pressure on ECT's earnings
and profitability stemming from (1) the ongoing volatility in the
tenge exchange rate; (2) weaker rates for open cars; and (3) rising
costs for railcar maintenance and repairs. Overall, ECT will likely
preserve its high Moody's-adjusted EBITDA margin of around 70%,
while its revenue could continue to grow at a double-digit rate in
percentage terms, supported by potential new fleet acquisitions
during the period.

ECT's improved operating performance helped the company to
strengthen its financials with Moody's-adjusted debt/EBITDA
decreasing to 2.0x as of September 30, 2019 from 2.4x as of
year-end 2018 and 4.4x in 2015-16, which is also below the
pre-crisis levels (2.6x in 2013 and 2.7x in 2014). ECT's financial
profile is also underpinned by its adherence to a balanced
financial policy including (1) a conservative approach to business
development and shareholder distributions; and (2) focus on a
gradual reduction of revenue-debt currency mismatch, which was the
key driver of the company's financial distress during 2015-16 (the
share of US-dollar-denominated debt decreased to 53% in 2019 from
around 80% in 2014-15).

In 2020-21, despite the resumed dividend payouts and potentially
more aggressive debt-financed acquisitions of new fleet (the actual
size of which will depend on the market conditions, the existing
long-term contracts with customers, and available funding), Moody's
expects the company's reported debt/EBITDA to stay well below its
internal cap of 3.5x. Moody's also expects ECT to continue to
reduce its foreign-currency risk via reducing the share of foreign
currency-denominated debt to around 20%-30% by year-end 2020 to
better balance the company's revenue structure, around 25% of which
is denominated in foreign currency.

ECT's liquidity will remain supported by its (1) strong cash flow
generation and comfortable debt maturity profile; as well as (2)
proven track record of established relationships with international
financial institutions and local banks, in particular, evidenced by
the successful resolution of the issue related to the covenant
breaches under various debt facilities, which the company incurred
in 2016 through Q1 2018, while still preserving access to new
funding. As of the end of September 2019, the company fully
complied with all of its covenants, which include leverage and
coverage metrics, and Moody's expects it to remain in compliance in
2020.

ECT's ratings, however, remain constrained by its (1) very small
size on a global scale; (2) still material, although gradually
declining, mismatch between the currency of debt (mainly the US
dollar) and the volatile currency of operations (the Kazakhstani
tenge); (3) still high customer concentration in TCO, partly
mitigated by ECT's established relationship and long-term contracts
with this customer; and (4) exposure to the volatile railcar lease
rates and the developing operating and macroeconomic environment in
Kazakhstan (Baa3 positive).

ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) CONSIDERATIONS

ECT has a concentrated ownership structure, which increases certain
corporate governance risks, with 93.33% of the company directly and
indirectly controlled by Marat Sarsenov. At the same time, Moody's
positively acknowledges ECT's balanced financial policy and
conservative approach to business development and shareholder
distributions. The risk of concentrated ownership is also mitigated
by the presence of International Finance Corporation (Aaa stable),
which owns a 6.67% stake in the company.

RATING OUTLOOK

The positive outlook reflects ECT's strong positioning within the
current rating category and the possibility of an upgrade over the
next 12-18 months.

WHAT COULD CHANGE THE RATING -- UP/DOWN

Moody's could consider an upgrade of ECT's ratings if the company
(1) continues to build a track record of stable operating
performance and sound profitability; (2) reduces its revenue-debt
currency mismatch; and (3) retains Moody's-adjusted debt/EBITDA at
around or below 2.5x through the cycle and below 3.5x at peaks,
while maintaining EBITDA/interest at around or above 5.0x and funds
from operations (FFO)/debt at around or above 30% on a sustainable
basis. Moody's would also assess and take into account ECT's
dependence on contractual arrangements with its largest customer,
TCO, at the time of an upgrade.

Moody's could downgrade ECT's ratings if its operating performance,
market position, financial profile or liquidity deteriorate
materially.

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Equipment and
Transportation Rental Industry published in April 2017.

Eastcomtrans LLP is one of the largest private companies in
Kazakhstan, specialising in leasing and operating freight railcars.
The company derives around 65% of its revenue from operating lease
agreements for railcars and the rest from providing rail
transportation and other related services. For the 12 months ended
September 30, 2019, ECT's revenue was KZT37.5 billion (around $99
million) and EBITDA was KZT28.5 billion (around $75 million).




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

SBM BALEIA: Fitch Affirms BB- Rating on 2012-1 Sec. Notes
---------------------------------------------------------
Fitch Ratings affirmed SBM Baleia Azul, S.a.r.l.'s series 2012-1
senior secured notes due 2027 at 'BB-'/Outlook Stable.

RATING ACTIONS

TRANSACTION SUMMARY

The notes are backed by the flows related to the charter agreement
signed with Petroleo Brasileiro S.A. (Petrobras) for the use of the
floating production storage and offloading unit (FPSO) Cidade de
Anchieta for a term of 18 years. SBM do Brasil Ltda. (SBM Brasil),
the Brazilian subsidiary of SBM Holding Inc. S.A. (SBM), is the
operator of the FPSO. SBM is the sponsor of the transaction. The
FPSO Cidade de Anchieta began operating at the Baleia Azul oil
field (now considered part of the New Jubarte field) in September
2012.

KEY RATING DRIVERS

Linkage to Petrobras' Credit Quality: Fitch uses the offtaker's
Issuer Default Rating (IDR) as the starting point to determine the
appropriate strength of the offtaker's payment obligation. On March
8, 2019, Fitch affirmed Petrobras' Long-Term IDR at 'BB-'/Outlook
Stable. Petrobras' ratings continue to reflect its close linkage
with the sovereign rating of Brazil due to the government's control
of the company and its strategic importance to Brazil as its
near-monopoly supplier of liquid fuels.

Strength of Off-taker's Payment Obligation: Fitch's view on the
strength of the off-taker's payment obligation acts as the ultimate
rating cap to the transaction. Given Fitch's qualitative assessment
of asset/contract/operator characteristics and the
off-taker's/industry's characteristics related to this transaction
the strength of such payment obligation has been equalized to
Petrobras' LT IDR.

Supply and Demand Fundamentals: The FPSO market is consistently
stable as all vessels are built for a specific purpose and the lead
time for construction is long. For Brazil in particular, FPSO's are
essential to the country's development and production of deep water
oil, which supports the strategic importance of this asset to
Petrobras's operations.

Credit Quality of the Operator/Sponsor: SBM Offshore N.V. is the
ultimate parent to SBM Holding Inc. S.A., main sponsor of the
transaction. The transaction benefits from SBM Offshore N.V.'s
solid business position, global leadership in leasing FPSOs and
overall strong operational performance of its fleet, aligning SBM's
credit quality with investment-grade metrics. The rating of the
transaction is ultimately capped by Fitch's view of the credit
quality of the sponsor.

Stable Asset Performance: Asset performance is in line with
expectations, tied to characteristics of the contract including
fixed rates, which provide for cash flow stability. Average
economic uptime levels have been stable at 98.2% on average during
2019. Average economic uptime levels, considering gas production
and water injection with bonus days, have averaged 106%, materially
higher than Fitch's base case assumption, including bonus, of
98.5%.

Leverage/Credit Enhancement: The key leverage metric for fully
amortizing FPSO transactions is debt service coverage ratio (DSCR).
This transaction has maintained quarterly DSCRs above trigger
levels and above Fitch's initial expectations. The rolling 12-month
pre-opex DSCR for the period ending December 2019 is 1.79x. This
has allowed the transaction the ability to withstand potential
one-off events that may negatively affect cash flows. While SBM
Holding is compensating the transaction structure for the cash
flows lost by the Leniency Agreement, the transaction's DSCRs are
expected to be able to withstand the reduction in cash flows and
maintain sufficient coverage in line with the rating level. Given
the expected stability of cash flows and SBM Holding's support, the
transaction's rating is not constrained by leverage and coverage
ratios.

Available Liquidity: The transaction benefits from a $26 million
(LoCs provided by ABN Amro, rated A+/Negative) debt service reserve
account (DSRA) equivalent to the following two quarterly payments
of principal and interest. As of December 2019, net debt balance
closed at approximately $283.8 million.

RATING SENSITIVITIES

The rating may be sensitive to changes in the credit quality of
Petrobras as charter off-taker and any deterioration in the credit
quality of SBM as operator and sponsor. In addition, the
transaction's rating may be impacted by the operating performance
of the FPSO Cidade de Anchieta.

ESG CONSIDERATIONS

Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of 3 - ESG issues are credit
neutral or have only a minimal credit impact on the SBM Baleia
Azul, SII/ S.a.r.l transaction either due to their nature or the
way in which they are being managed.




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

FUGRO NV: Fitch Corrects Feb. 21 Ratings Release
------------------------------------------------
Fitch Ratings replaced a ratings release on Fugro N.V. published on
February 21, 2020 to correct the name of the obligor for the
bonds.

The amended ratings release is as follows:

Fitch Ratings assigned Fugro N.V. an expected Long-Term Issuer
Default Rating of 'B(EXP)' with Stable Outlook. Fitch has also
assigned an expected rating of 'B(EXP)'/'RR4'/43% on Fugro's
upcoming EUR500 million senior secured notes due in 2025. Fugro is
a global leading geophysical services provider focusing on geo-data
acquisition, analysis and advice.

The final issuer and bond ratings are contingent on the closing of
the proposed refinancing transaction, including the equity raise
(gross proceeds: EUR82 million), and on the receipt of final
documentation conforming materially to information already
received.

The rating of Fugro is constrained by its high but falling
leverage, modest scale and limited revenue visibility that are
counterbalanced by strong market position and diversification
across end-markets. Fugro's exposure to the oil and gas (O&G)
sector has significantly reduced but remains high. Fitch expects
the company's leverage will continue to moderate on the back of
improving profitability, projected free cash flow (FCF) generation
and planned equity-raise. Fugro's expected 'B' rating also takes
into account comfortable liquidity post-refinancing.

KEY RATING DRIVERS

Gradual Performance Recovery: Fugro's revenue and earnings bottomed
out in 2017 before improving in 2018 (revenue growth on a
comparable basis: 18%) and 2019 (3%), but its financial performance
still lags behind the levels seen before oil prices collapsed in
2014-15 due to weaker rates and somewhat lower asset utilisation.
Fitch expects that Fugro's performance will gradually recover given
continued efforts to reduce costs, growth in offshore winds and
infrastructure, and continued improvements in the O&G business,
which though will remain sensitive to the market conditions.

High Exposure to O&G: Fugro's exposure to O&G has reduced but
remains high (52% of revenue in 2019 vs. 74% in 2015). The
company's performance to a significant extent remains dependent on
the level of activity in the O&G industry, though the degree of
such dependency has reduced. Fitch believes that activity in
offshore O&G will gradually pick up as most companies have adjusted
to the USD50-USD60/bbl oil price, though growth will be gradual as
oil players maintain cost discipline.

Limited Revenue Visibility: Fugro's revenue visibility is limited.
Its order backlog is short-term and normally corresponds to around
50%-60% of next year's revenue. At end-2019 the company's order
backlog increased 9.9% yoy on a constant-currency basis, which
supports its expectation of revenue growth. Furthermore, while the
Asset Integrity business lines have significant mandates for
recurring IRM (inspection, repair, and maintenance) activity,
customers have a track record of deferring such activity during
downturns.

Improved Projected EBITDA: In 2019, Fugro's Fitch-adjusted EBITDA
(pre-IFRS16, excluding Seabed) amounted to around EUR153 million,
showing a 65% gain compared to 2017 but remaining around 70% lower
than in 2013. Based on Fitch's internal conservative assumptions
Fitch assumes Fugro's EBITDA to improve to around EUR200 million by
2022-2023, and EBITDA margin to recover to around 10-11%, from 9%
in 2019 and 6% in 2017. Management expects even stronger recovery,
which could lead to faster de-leveraging than assumed in its rating
case.

Market Leader in Core Businesses: Entry barriers to the
geo-intelligence business are high given its dependence on
proprietary technology and know-how, but lower demand caused by
lower oil prices and cost discipline exercised by energy producers
have resulted in depressed prices. Fugro is the global market
leader in many services it provides, including offshore and onshore
geotechnical investigation and offshore geophysical surveying.
Fitch views its global presence, exposure to multiple end-markets
and long-standing relationships with some customers as a
competitive advantage.

Growth In Offshore Wind, Infrastructure Continues: Fugro's
performance has been lately supported by the rising importance of
renewables (mainly offshore wind), nautical and infrastructure
markets. Fitch expects the offshore wind market to keep expanding
on the back of policy targets, particularly in Europe and China,
and falling technology costs. But as the sector transitions to a
zero-subsidy business model, pricing pressure on third-party
service providers may follow. In infrastructure, Fitch expects
growth on the back of continued population growth and projects
associated with the climate change risk.

Cost-Cutting Efforts Continue: Confronted with falling revenues,
Fugro has taken steps to reduce costs and increase its flexibility,
including reduced headcount (more than 20% over 2014-2018), owned
vessel capacity (over 20%) and long-term charters (over 60%), as
well as a greater focus on centralisation. Fugro expects to cut
costs further through digitalisation, strengthened procurement,
exiting unprofitable activities and other initiatives, which could
represent upside to its more conservative rating case.

High but Falling Leverage: In 2019 Fugro's funds from operations
(FFO)-adjusted net leverage, including convertibles and excluding
capitalised leases, amounted to 3.3x, down from an average 7x over
2016-2018. Fitch projects Fugro's net leverage to fall further on
positive free cash flow (FCF) generation, equity raise and improved
profitability to 2x on average in 2020-2021 (excluding capitalised
leases). It targets to maintain net debt-to-EBITDA below 1.5x
(2020-2021E: around 2x) and to reduce the absolute quantum of debt
over time. Deleveraging could also be accelerated by disposal of
non-core assets, which apart from the agreed divestment of a 23.6%
stake in Global Marine, are not included in its forecasts.

Improving Financial Flexibility: Financial flexibility has been
improving since the onset of the O&G price downturn in 2014. This
is driven by Fugro's transition to an increasingly asset-light
business model with annual maintenance capex of EUR40 million-EUR60
million (vs. the company's total capex guidance of EUR80
million-EUR110 million, excluding Seabed), supporting a future
return to positive FCF generation. Furthermore, it has a 1.5x
company-defined net leverage target, and stopped paying dividends
in the last downturn, which should resume only once leverage allows
it.

DERIVATION SUMMARY

Fugro is a global leading geophysical services provider focusing on
geo-data acquisition, analysis and advice. Unlike other oilfield
services companies rated by Fitch, such as Precision Drilling
Corporation (B+/Stable) and PGS ASA (B-/Rating Watch Positive), it
is less exposed to the oil market and more diversified across
end-markets. Fugro's rating is constrained by small scale and
historically high but moderating leverage.

KEY ASSUMPTIONS

  - Successful refinancing and equity-raise in 2020 under
    substantially the same terms as proposed.

  - Revenue rising by CAGR of 4% in 2020-2023.

  - EBITDA margin rising to above 10% in 2020-2023 from 9% in
2019.

  - Capex at around EUR90 million over 2020-2023 (excluding
Seabed).

  - No ordinary dividends.

RECOVERY ANALYSIS

The recovery analysis assumes that Fugro would be reorganised as a
going-concern (GC) in bankruptcy rather than liquidated. Fitch has
assumed a 10% administrative claim.

  - Fugro's GC EBITDA assumption is based on 2019 EBITDA,
    excluding Seabed and pre-IFRS 16. Fitch applies a 25% haircut
    to arrive at a through-the-cycle EBITDA that Fitch views to
    be representative of a GC scenario.

  - An enterprise value (EV) multiple of 4x EBITDA is applied
    to the GC EBITDA to calculate a post-reorganisation EV.

  - Fugro's super senior revolver is assumed to be fully drawn.
    The RCF is super senior to senior secured bonds in the
    waterfall.

  - Its waterfall analysis generated a ranked recovery in the
    RR4 band for senior secured notes (EUR500 million),
    indicating a 'B(EXP)' instrument rating. The waterfall
    analysis output percentage on current metrics and assumptions
    was 43%.

RATING SENSITIVITIES

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

  - FFO-adjusted net leverage sustainably below 2x (excluding
    capitalised leases) and gross debt falling consistently below
    EUR600 million

  - EBITDA margins consistently above 14% (pre-IFRS 16)  

  - Material reduction in O&G exposure, driven by a shift
    in the fundamental business mix in line with management
    strategy

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

  - FFO-adjusted net leverage sustainably above 3.5x
    (excluding capitalised leases)

  - EBITDA margins falling consistently below 8%
    (pre-IFRS 16)

  - Consistently negative FCF

LIQUIDITY AND DEBT STRUCTURE

Pro forma for the refinancing and equity-raise, Fugro's liquidity
position is strong with no material near-term debt maturities,
except for the EUR100 million convertibles with an option put date
in November 2022. Fitch projects its liquidity scores to remain
comfortably above 1.0x over 2021-2023.

In Fitch's forecasts lease payments are treated as operating costs
and are deducted from EBITDA and FFO, and capitalised leases are
not included in the adjusted debt quantum. This is in line with the
recently published Exposure Draft: Lease Rating Criteria (January
30, 2020).

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.


FUGRO NV: Moody's Assigns B2 Corp. Family Rating, Outlook Stable
----------------------------------------------------------------
Moody's Investors Service assigned a B2 corporate family and a
B2-PD probability of default rating to Fugro N.V., concurrently the
rating agency has assigned a B3 rating to the proposed EUR550
million senior secured notes to be issued by Fugro. The outlook on
the ratings is stable.

RATINGS RATIONALE

The B2 CFR assigned to Fugro takes into account the expectation
that currently weak credit metrics will improve gradually supported
by underlying market growth and a continued repositioning of the
company's business towards new markets resulting in a continuously
decreasing exposure to the oil and gas industry and an asset
lighter operational model.

Moody's deems Fugro's Moody's adjusted gross leverage of 5.1x to be
high in the context of the assigned B2 rating. This view takes into
account that the company is exposed to cyclical demand and pricing
patterns, which can vary substantially depending on the type of
service provided and in which region services are provided. The
company's weak Moody's adjusted EBIT/interest expense ratio in 2019
of around 1x is reflective of a still depressed, albeit improving
profitability following the deep downturn the company has been
confronted with since 2014.

The rating favorably reflects the fact that the company's revenue
base has become more diversified since 2014 when around 78% of
Fugro's revenues were generated with the oil and gas sector, which
in 2019 only accounted for around 52% of the company's revenues.
While revenues related to the oil and gas sector have decreased
drastically since 2014, the company was able to grow its revenues
generated from the land infrastructure and offshore wind energy
sectors between 2014 and 2019, resulting in a more balanced
end-market exposure. Since 2018 the company's revenues and
profitability have shown signs of a recovery, supported by
increasing demand and more favorable pricing. The company's global
footprint in combination with leading market positions and some
flexibility to deploy assets across regions and end-markets should
allow it to further benefit from gradual improvements in end market
demand. In particular i) continued growth in offshore wind, ii) a
stabilization of the company's services rendered to the oil and gas
industry and iii) growing infrastructure spending are expected to
support the recovery of its performance. Hence, Moody's forecast
the company's leverage to decrease to below 5x in 2020 followed by
further improvements in 2021. However, unexpected project delays
and cost overruns pose an additional downside to this view.

After generating positive reported FCF in 2019, Fugro's B2 rating
incorporates Moody's expectation of FCF being moderately negative
in 2020 and around break-even levels in 2021. In combination with
disposal proceeds from the sale of the indirect share in Huawei
Marine Networks and the disposal of its minority stake in Global
Marine, this should allow the company to maintain a solid liquidity
profile over the next 12-18 month without incurring any additional
gross debt. Additional disposal proceeds from its Seabed
Geosolutions (Seabed) business, could further support Fugro's
financial flexibility, but have not been factored into the ratings
as timing and proceeds with regards to a potential disposal remain
uncertain. Although Moody's expects Seabed's profitability to
improve in 2020 a failure to dispose Seabed swiftly in combination
with an absence of any improvement in operational performance could
result in a drag on the company's profitability and FCF generation.
The rating also takes into account that gross proceeds of EUR82
million from an equity placement will be used to pay down debt, and
that the company will only pay out dividends once leverage allows.
The company has a net leverage target of below 1.5x.

LIQUIDITY

Fugro's liquidity profile is solid. Following the refinancing
transaction Fugro will have a starting cash balance of around
EUR200 million and full availability under the proposed EUR200
million super senior secured revolving credit facility. In
combination with forecasted FFO generation of around EUR130 million
in 2020 and the disposal proceeds from the recently announced
divestment of Fugro's share in Global Marine of around EUR36
million, these sources comfortably cover expected capital
expenditure of around EUR90 million in 2020 and swings in working
capital.

STRUCTURAL CONSIDERATIONS

The proposed senior secured notes are rated B3, one notch below the
corporate family rating. The B3 rating on the EUR550 million senior
secured notes reflects their ranking behind the EUR200 million
super senior secured revolving credit facility (RCF). The RCF and
the senior secured notes share the same collateral and guarantor
package. The company's capital structure furthermore contains a
EUR100 convertible bond due 2024 which is neither secured nor does
benefit from opco guarantees, hence the convertible bonds rank
behind the senior secured notes.

RATING OUTLOOK

The stable outlook on Fugro's B2 ratings reflects Moody's
expectation that the company will gradually delever to below 5x
Moody's adjusted gross debt/EBITDA and that it will not generate
meaningfully negative FCF in the next 12-18 month.

WHAT COULD CHANGE THE RATING UP/DOWN

Moody's could consider upgrading Fugro's ratings, if Moody's
adjusted debt/EBITDA remains below 4x on a sustained basis, also
supported by a gross debt reduction and the company generates
consistently positive FCF. Furthermore an upgrade would require
EBIT margins in the high single digits.

Moody's could consider downgrading Fugro's ratings, if Moody's
adjusted debt/EBITDA remains above 5x for a prolonged period of
time or negative FCF leads to a marked deterioration of the
company's liquidity profile or a material increase in gross debt.
Fugro's ratings also could be downgraded of interest coverage
measures as Moody's adjusted EBIT/Interest expense remains below
1.5x for a prolonged period of time.

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Global Oilfield
Services Industry Rating Methodology published in May 2017.

PROFILE

Founded in 1962 and headquartered in Leidschendam, The Netherlands
Fugro N.V. is specialised in collecting and analysing geo-data and
providing related consultancy services. Fugro provides its site
characterization and asset integrity services offshore and onshore.
The company's principal end markets include oil and gas (52% of
2019 revenues), infrastructure (23%), renewables (14%) nautical
(7%) and others (4%).


FUGRO NV: S&P Assigns Prelim. 'B' LongTerm Issuer Credit Rating
---------------------------------------------------------------
S&P Global Ratings assigned its preliminary 'B' long-term issuer
credit rating to Geo-data specialist Fugro N.V. and its preliminary
'B' issue rating to the company's proposed EUR500 million senior
secured bond maturing in 2025.

Fugro's credit quality reflects the company's leading position in a
niche market as well as its small scale, exposure to highly
volatile end-markets, and the company's plans to undergo a
financial transformation in the coming years.  S&P said, "We view
Fugro as a small player in the engineering and construction (E&C)
industry, with expected EBITDA of about EUR200 million in 2020,
which is expected to remain highly exposed to the global spending
on off-shore projects, notably by the oil and gas (O&G) industry.
We think the completion of the portfolio reshape should make the
company's business model more resilient. We understand that the
company's next objective is to focus on its balance sheet. Post the
equity injection the company's gross debt will be about EUR600
million, translating into S&P Global Ratings-adjusted debt to
EBITDA of about 4.5x in 2020 (equivalent to reported net debt to
EBITDA of slightly below 3.0x). Looking beyond the transaction, we
expect the debt metrics to further improve on the back of positive
free cash flow, divestments, and disciplined capital expenditure
(capex) and dividends."

Fugro's business risk profile is defined, in our view, by its small
size, exposure to few sectors, and technological leadership.  S&P
views the company as a small E&C player, similar to Michael Baker
and Pike Corp. Fugro remains heavily exposed to the volatile O&G
industry (52% of the revenues in 2019 versus 78% in 2014 excluding
Seabed). As a result, the company faced low bargaining power and
volatile earnings through the cycle (reported EBITDA in EUR100
million-EUR200 million from 2016-2019), as well as relatively low
EBITDA margins of 10%-15%.

The business transformation is likely to result in a more resilient
business model.  In the past three years, Fugro reduced its
workforce by more than 20% and divested some noncore assets (such
as the recently announced sale of Global Marine). S&P believes that
Fugro's strategy to focus on its core competencies and diversify
its revenue base can boost earnings in the medium to long term. Its
strategy will be supported by the need to invest in sustainable
energy and replace current oil production with new offshore
projects. Moreover, the high technological capabilities needed to
be competitive in this niche market will likely heighten the
industry's barriers to entry.

Fugro's current high debt level and less supportive credit metrics
underpin our highly leveraged financial risk assessment.  S&P said,
"Although we view positively the company's actions to enhance its
capital structure, including a material equity injection, the
starting point remains a credit weakness. After the planned
transactions, the company will have a reported gross debt of about
EUR600 million, and only modest free cash flow in 2020. We expect
debt reduction, facilitated by divestments, to take two to-three
years. We take into account Fugro's ability to maintain an adjusted
debt to EBITDA of 4x-5x with at least neutral free operating cash
flow (FOCF)."

S&P bases its 'B' rating on Fugro on the following capital
structure:

-- A EUR500 million bond maturing in 2025;

-- A new EUR200 million revolving credit facility (RCF),
    replacing the existing EUR575 million, maturing in 2024;

-- A private placement for gross proceeds of approximately
    EUR82 million; and

-- A EUR100 million convertible bond maturing in 2024 (the
    noteholders have a put option in 2022).

S&P said, "We believe that the planned transactions will result in
a supportive liquidity position, with a favorable maturity profile
and ample cash on the balance sheet to address near-term volatility
and the potential redemption of the convertible notes in 2022.

"The stable outlook reflects our view that Fugro will continue to
increase its EBITDA, driven by modest growth in its core markets,
O&G, and wind energy, and supporting its deleverage journey.

"Under our base-case scenario, we project an adjusted EBITDA of
about EUR200 million in 2020 with further growth afterward,
translating into an adjusted debt to EBITDA of about 4.5x
(equivalent to a reported net debt to EBITDA of slightly below
3.0x) in 2020 with a positive FOCF (excluding changes in working
capital and nonrecurring items).

"We base our preliminary rating on the company's ability to
gradually achieve a more stable EBITDA of EUR200 million on average
over the cycle, with an adjusted debt to EBITDA of 4x-5x (and
toward 4x when accounting for normalized cash on the balance sheet
of about EUR150 million), as well as neutral FOCF.

"The preliminary rating doesn't account for the potential
divestment of the Seabed operations. In our view, the divestment
might allow Fugro to build some headroom under the rating, or
offset a potential EBITDA shortfall in the near term. That said,
this transaction is less likely to result in a positive rating
action.

"We would see rating pressure if the company's efforts to improve
business model resiliency did not meet our assumptions. This would
be the case if Fugro's EBITDA fell to EUR150 million or below with
no sign of rapid improvement.

"Alternatively, we could lower the preliminary rating if the
company decided to slow its deleveraging process by approving
sizable capex projects or mergers and acquisitions, leading to an
adjusted debt to EBITDA above 5x (taking also into account excess
cash above a normalized cash balance of about EUR150 million)."

S&P sees the possibility of a positive rating action as remote in
the next 12-18 months. Beyond then, a higher rating would need to
be supported by the following:

-- Establishing a track record of a stable EBITDA of at
    least EUR200 million, with more balanced exposure to
    industries other than O&G;

-- Advances toward the company's financial objectives,
    including reported net debt to EBITDA of 1.5x, a reduction
    in its gross debt and better visibility on its dividend
    policy; and

-- Adjusted debt to EBITDA of 3x-4x, together with positive
    FOCF and adequate liquidity.




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

KALUGA GAS: Bank of Russia Approves Financial Resolution Plan
-------------------------------------------------------------
The Bank of Russia reviewed and approved amendments to the plan for
the State Corporation Deposit Insurance Agency to participate in
bankruptcy prevention measures for the Kaluga Gas and Energy
Joint-Stock Bank Gazenergobank (Joint-Stock Company) (the Bank)
(Registration No. 3252, Kaluga), including the plan for financial
resolution of the Bank.

The Bank's core business will be retail lending, which will be
developed in cooperation with PJSC SKB-Bank, the Bank's Investor.

The plan for financial resolution provides for a merger of the Bank
with the Investor by the end of 2028.  The joint venture will
comply with the Bank of Russia's mandatory requirements, including
buffers to the capital adequacy requirements, for financial
stability of credit institutions.


NVKBANK JSC: Put on Provisional Administration, License Revoked
---------------------------------------------------------------
The Bank of Russia, by virtue of its Order No. OD-111, dated
January 24, 2020, revoked the banking license of Joint-stock
Company Nizhnevolzhskiy commercheskiy bank, or JSC NVKbank
(Registration No. 931, Saratov, hereinafter, NVKbank).  The credit
institution ranked 179th by assets in the Russian banking system.

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

   -- understated the amount of loan loss provisions on a regular
      basis, thereby concealing its actual financial standing.
      Credit risks assumed by the credit institution and
      reflected in its financial statements at the Bank of
      Russia's request revealed a substantial (over 80%) decrease
      in the credit institution's capital, which is a real threat
      to the creditors' and depositors' interests;

   -- violated federal banking laws and Bank of Russia
      regulations, due to which the regulator repeatedly applied
      measures against it over the past 12 months, which
      included restrictions on household deposit-taking.

Over 65% of the loan portfolio of NVKbank represented bad loans.
This activity was primarily financed by household deposits (about
90% of funds raised by the bank).  The Bank of Russia repeatedly
requested NVKbank to create additional loss provisions. Compliance
with the above requests revealed sufficient grounds in the bank's
activities calling for action to prevent its insolvency
(bankruptcy).

NVKbank elaborated a financial stability recovery plan; however,
the supervisory body established that the main measures of the plan
were not feasible.

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

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

Deposits are to be repaid by the State Corporation Deposit
Insurance Agency (hereinafter, the Agency).  For details of the
repayment procedure, depositors may call the Agency's 24/7 hotline
(8 800 200-08-05) or refer to its website
(https://www.asv.org.ru/), the Deposit Insurance / Insured Events
section.


TAJIKISTAN: S&P Affirms 'B-/B' Sovereign Credit Ratings
-------------------------------------------------------
On Feb. 21, 2020, S&P Global Ratings affirmed its 'B-/B' long- and
short-term foreign and local currency sovereign credit ratings on
Tajikistan. The outlook is stable.

S&P also affirmed the 'B-' long-term issue rating on Tajikistan's
senior unsecured debt.

Outlook

The stable outlook reflects S&P's expectation that Tajikistan's
debt-service obligations will remain moderate in the next 12
months, owing to the still-high component of concessional borrowing
in the government's debt stock, which helps offset risks from
still-weak fiscal and external performance.

Downside scenario

S&P could take a negative rating action if the strain on
Tajikistan's government debt-servicing capacity materially
increased, for example, as a result of widening fiscal deficits, or
the government taking on substantial amounts of commercial debt to
fund infrastructure projects. Downward pressure on the rating may
also build if current account imbalances widened significantly and
the net external debt position deteriorated sharply, given the low
level of foreign-exchange reserves, excluding monetary gold.

Upside scenario

Conversely, S&P could consider an upgrade if strong economic growth
resulted in materially higher GDP per capita than it currently
anticipates. A material reduction of government debt and improved
effectiveness of monetary policy could also lead S&P to take a
positive rating action. This could happen, for example, as a result
of stronger fiscal performance and a significant reduction of
financial dollarization alongside a material strengthening of the
banking system.

Rationale

S&P said, "The ratings on Tajikistan reflect weak institutional
effectiveness that could weigh on policy predictability, and
estimated 2020 per capita GDP that is among the lowest of all the
sovereigns we rate at $917. However, in our view, low wealth levels
are partially offset by the economy's strong growth prospects,
relative to peers with a similar level of economic development. The
ratings are constrained by Tajikistan's weak external position,
with a large trade deficit on a narrow export base, high reliance
on workers' remittances, and increased foreign debt against low
external buffers. Public finances are still weak, with high
contingent liability risks stemming from financially weak
state-owned enterprises (SOEs). We estimate outstanding debt of
SOEs at about 21% of GDP.

"Our assumptions regarding the financing of the Rogun Dam
hydropower project (HPP) have a significant effect on our
forecasts. We understand that the total cost of the project will be
about $4 billion, to be payable over 2017-2027, about 4%-5% of GDP
on average each year. The government's $500 million Eurobond
issuance in 2017 was largely to fund the first two turbines
launched in November 2018 and September 2019. Over 2020-2023, we
estimate project financing needs will remain high at about $1.5
billion. In our view, it is currently unclear how the government
will fund these financing needs. At this time, we do not assume the
government will issue additional external debt to finance the
project. In our view, a shortfall in funding could result in
potential construction delays."

Institutional and economic profile: Relative political stability
and strong GDP growth amid still-low economic wealth levels

-- In S&P's view, political institutions in Tajikistan are at a
developing stage and decision-making remains highly centralized.

-- Political stability has endured under the long-serving
president.

-- S&P expects economic growth rates will be stronger than peers',
yet insufficient to materially raise GDP per capita.

Tajikistan has been politically stable since the late 1990s, when
it ended a long civil war and recovered from a substantial economic
decline following the collapse of the Soviet Union. S&P sees this
stability as centered on President Emomali Rahmon, who has ultimate
decision-making power and is currently serving his fourth
consecutive term. However, decision-making remains highly
centralized, which can reduce policymaking predictability, in our
view. The president's administration controls strategic decisions
and sets the policy agenda. Consequently, S&P views accountability
and checks and balances as weak. S&P does not see immediate risks
to domestic political stability that would undermine policy
predictability. Relations with Russia are constructive; financial
links with China are increasing; and economic relations with
Uzbekistan have improved.

S&P said, "Following strong economic expansion reported at 7.5% in
2019, we expect economic growth will slow to 6.3% in 2020 and
stabilize at about 6.0% in 2021-2023. This implies growth will
still be higher than that of peers with a similar level of economic
development. That said, we think there could be some
inconsistencies with regard to national accounts data, with actual
growth rates being lower than reported.

"In our view, spending on public projects will taper off from the
peak in 2018. Consequently, the contribution of public investments
to overall economic growth will reduce over the forecast period.
The steady inflow of remittances from Russia, however, will support
economic activity by stimulating private consumption. On the supply
side, we expect the industrial sector will expand on account of new
capacity in the food processing, mining and metallurgy, and energy
sectors. The construction sector will remain supportive of growth,
despite reduced public investment.

"We forecast Tajikistan's GDP per capita will remain low, at under
$1,000 on average in 2020-2023, owing to high population growth and
the depreciation of the Tajikistan somoni (TJS)."

Flexibility and performance profile: Twin balances are forecast to
stay in deficit over 2020-2023

-- In S&P's forecast horizon, it expects the twin fiscal and
external deficits will be slightly narrower than in recent years,
supported by lower fiscal spending on public infrastructure
projects.

-- General government debt is still moderate, however, the high
debt of loss-making SOEs, in particular in the energy sector, poses
contingent risks to government debt sustainability.

-- Still-high financial dollarization, shallow capital markets,
and credit risks in the banking system remain constraints on
monetary policy effectiveness.

S&P said, "We expect Tajikistan's trade deficit will continue
exceeding 20% of GDP in the next few years. The country's trade
deficits are to some extent offset by large remittance inflows, and
we estimate the overall current account deficit (CAD) narrowed to
about 4.0% of GDP in 2019, compared with a deficit of 5.0% in 2018.
The improvement was a result of increased electricity exports,
slower growth of capital goods imports, and high foreign income
transfers, which somewhat mitigated downside risks from lower
export earnings from minerals and cotton and increased import bills
for food and petroleum products.

"We project the CAD will narrow to 2.4% of GDP in 2020 but
gradually reverse to 3.3% through 2023. This reflects our view that
capital goods import growth will taper off on the back of lower
fiscal spending, including for the Rogun project, but
import-spurred private consumption will continue rising; and
exports of key commodity products and services, including cotton,
aluminum, and minerals, will reduce moderately.

"Foreign direct investment (FDI) remains the primary source of
financing for the CAD. In 2020-2023, we expect net FDI will average
about 2% of GDP given ongoing Chinese investment in a broad array
of sectors, including raw materials, aluminum, metallurgy, and
retail. We think concessional borrowing will be limited mainly to
the financing of projects in the public investment program. The
Rogun project is not included in this program, however. Although
not in our base-case scenario, we think the government might
consider further external borrowing for the timely construction of
the project.

"Driven by persistent current account imbalances, Tajikistan's
external debt net of liquid external assets will continue to rise
to 94% of current account receipts (CARs) by 2023. We project gross
external financing needs will average about 100% of CARs plus
usable reserves over the same period. In addition, we expect usable
reserves will remain stable at about four-and-a-half months of
current account payments throughout the forecast horizon, since
they will be regularly replenished through the purchase of
nonmonetary gold from the domestic market in local currency.

"In contrast to a significant fiscal expansion in 2016-2017, we
estimate that the budget deficit narrowed to under 2% of GDP in
2019 from 3.3% in 2018, and project similar deficits in 2020-2023.
Although the policy trajectory will align with consolidation
efforts initiated in 2018, financing constraints could also limit
the government's capacity to spend on infrastructure projects. We
think that fiscal spending on nonpriority infrastructure projects
and associated goods and services will be pared back in response to
a potential shortfall in revenue collection or higher-than-budgeted
expenses incurred in the social sector. Although construction of
the Rogun HPP is a priority, we assume its funding will be cut
compared with the past two years, resulting in potential
construction delays." According to the Budget Law for 2020, about
TJS2.1 billion (or about $210 million) is allocated for the
project's construction versus about TJS3.5 billion (or about $360
million) spent in 2019.

The 2020 fiscal deficit will be financed mainly by external funding
from concessional sources. The government expects about $230
million in concessional loans this year to finance public
infrastructure projects, excluding the Rogun HPP. Albeit in a
limited amount, monetization of the government's gold deposits with
the domestic issuance of government securities will also fill the
financing shortfall. The country's budget law for 2020 does not
envision another Eurobond issuance. S&P said, "Although not in our
base-case assumptions, we think the government might raise
additional external funding from commercial market sources to
finance the next phases of the Rogun HPP. In our view, this would
pose material risks to the government's debt sustainability."

S&P expects moderate currency devaluation (about 80% of the debt
stock is denominated in foreign currency) will result in higher
government debt accumulation in absolute terms than implied by
fiscal deficits. However, with GDP increasing at a strong pace,
Tajikistan's general government debt net of liquid assets will
gradually fall to 36% of GDP through 2023. Due to a high share of
concessional loans in the total debt stock, the cost of debt will
remain low, at about 3.5% of budget revenue. Downside risks to the
debt burden could stem from higher fiscal spending on
infrastructure projects than we currently anticipate and the
possible liquidation of two troubled banks, Tojiksodirotbank (TSB)
and Agroinvestbank (AIB), the full resolution of which still
requires a government decision.

S&P said, "Our assessment of the government's fiscal debt profile
includes contingent liabilities from SOEs. These enterprises
account for 30% of employment and more than 40% of GDP, and are
regularly involved in quasi-fiscal activities. In our view, high
debt levels at loss-making SOEs, in particular in the energy
sector, pose contingent risks to the government. We estimate the
outstanding debt of SOEs at about 21% of GDP in 2019. About 80% of
SOEs' total debt is attributed to national power company Barki
Tojik, which also generates over 95% of SOEs' operating losses. The
second-largest debtor is aluminum company TALCO, which contributes
about 12%.

"In our view, monetary policy effectiveness remains restricted by
the still-weak domestic banking system, shallow capital markets,
high dollarization, and the National Bank of Tajikistan's (NBT's)
lack of operational independence. Financial dollarization is still
high, although we note that the foreign currency share of total
deposits and total credits declined to 47% and 49% respectively in
2019, compared with peak levels of 62% and 69% in 2015."

High credit risks in the banking system still constrain the
effectiveness of monetary transmission channels. Nevertheless, S&P
notes that nonperforming loans (NPLs) as a percentage of total
loans reduced markedly to about 25.6% in 2019 from peak levels of
46.9% in 2016. The NBT uses a relatively conservative reporting
standard for NPLs, recording loans overdue by more than 30 days
instead of the more internationally used 90-day measure. NPLs
stemmed largely from the unfavorable economic and financial
situation in the region, which in turn decreased the population's
purchasing power and hit private-sector income. Banks' asset
quality continues to be weighed down by troubled lenders TSB and
AIB, which the government recapitalized in 2016. Downside risks to
banks' asset quality could stem from high vulnerabilities of the
banking system to local currency depreciation and high dependence
of favorable economic conditions on remittance inflows.

Despite accelerating in 2019, S&P expects inflation will stay under
7% in the forecast horizon, within the NBT's medium-term inflation
target of 6% plus or minus 2 percentage points. This will be
supported by surplus liquidly management accompanied by potentially
further tightening of monetary conditions and relatively low
hydrocarbon prices. Intensified inflationary pressures in 2019
largely reflected the ongoing hikes in regulated utility tariffs, a
rise in the price of imported foods, and the pass-through of
exchange rates, which came under increased pressure in May last
year. Following the policy loosening in 2019, The NBT recently
increased the refinancing rate by 50 basis points to 12.75%.

After remaining stable since July 2018, the official TJS/U.S dollar
exchange rate was devalued by 2.76% in August 2019. The devaluation
occurred to close the spread between the official and nonbank cash
market rates, which reached 6% in May, exceeding the NBT's 2%
target. S&P said, "We expect the somoni will steadily depreciate by
4%-5% annually in 2020-2023, and view the exchange-rate regime as
akin to a crawl-like arrangement. Despite large trade deficits, we
expect steady remittance inflows, the relative stability of trading
partner currencies, and advanced economies' dovish monetary
policies should prevent excessive exchange-rate volatility. We note
that the NBT intends to implement inflation-targeting and a fully
flexible exchange rate by 2023."

In accordance with S&P's relevant policies and procedures, the
Rating Committee was composed of analysts that are qualified to
vote in the committee, with sufficient experience to convey the
appropriate level of knowledge and understanding of the methodology
applicable. At the onset of the committee, the chair confirmed that
the information provided to the Rating Committee by the primary
analyst had been distributed in a timely manner and was sufficient
for Committee members to make an informed decision.

After the primary analyst gave opening remarks and explained the
recommendation, the Committee discussed key rating factors and
critical issues in accordance with the relevant criteria.
Qualitative and quantitative risk factors were considered and
discussed, looking at track-record and forecasts.

The committee's assessment of the key rating factors is reflected
in the Ratings Score Snapshot above.

The chair ensured every voting member was given the opportunity to
articulate his/her opinion. The chair or designee reviewed the
draft report to ensure consistency with the Committee decision. The
views and the decision of the rating committee are summarized in
the above rationale and outlook. The weighting of all rating
factors is described in the methodology used in this rating
action.

  Ratings List

  Ratings Affirmed
  Tajikistan

  Sovereign Credit Rating                 B-/Stable/B
  Transfer & Convertibility Assessment    B-
  Senior Unsecured                        B-




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

TURKEY: Fitch Affirms BB- LT Issuer Default Rating, Outlook Stable
------------------------------------------------------------------
Fitch Ratings affirmed Turkey's Long-Term Foreign-Currency Issuer
Default Rating at 'BB-' with a Stable Outlook.

KEY RATING DRIVERS

Turkey's 'BB-' rating reflects weak external finances, a track
record of economic volatility, high inflation and political and
geopolitical risks. These factors are set against Turkey's large
and diversified economy, GDP per capita and Ease of Doing Business
indicators that compare favourably with 'BB' medians, and moderate
levels of government and household debt.

Economic growth is recovering strongly, inflation has fallen from
20% at the beginning of last year, the current account has improved
and external risks, although still high, have eased, supported by
the real effective exchange rate adjustment and private sector
deleveraging. The relative resilience of the banking and corporate
sectors to the 2018 crisis contributes to its expectation for a
'V-shaped' recovery.

Fitch forecasts GDP growth of 3.9% in 2020 (an upward revision of
0.8pp since its last review), after 0.4% in 2019, driven by private
consumption and a more gradual recovery in investment. Lower
interest rates and a sharp pick-up in credit are fuelling domestic
demand. Private bank lending is growing at 27% and consumer credit
46% (on a 13-week annualised basis), and Fitch expects full-year
aggregate credit growth above 15%. Pent-up demand, mildly positive
labour market dynamics, a 15% minimum wage hike, and recovering
confidence indicators also support stronger domestic demand. Fitch
forecasts similar GDP growth in 2021, of 4.0% (but with stronger
investment, some moderation in private consumption growth and a
smaller drag from net exports), compared with the 'BB' category
median of 3.4% in 2020-2021. Fitch continues to estimate Turkey's
trend rate of growth at 4.3%.

Turkey's large external financing requirement remains a source of
vulnerability, but has reduced to around USD170 billion (including
short-term debt) or 161% of foreign exchange reserves in 2020, from
USD211 billion in 2018. This is driven by the current account
moving to a surplus of 0.2% of GDP in 2019 from a deficit of 3.5%
in 2018, mainly due to import compression, although export growth
is also supported by the real effective exchange rate (12% below
the end-2017 level) and buoyant tourism. Fitch forecasts the
current account returns to deficit, of 0.9% of GDP in 2020 and 1.8%
in 2021, as recovering domestic demand lifts imports and, to a
lesser extent, high inflation begins to erode competitiveness
gains.

Banks' external debt due over the next 12 months has fallen to
USD82 billion, from USD90 billion a year earlier. Fitch expects
banks' FX borrowing to remain muted in 2020, partly due to ongoing
weak demand for FX credit (which declined 6% in 2019) and
sufficient FX liquidity (which rose USD9 billion in 9M19 to USD86
billion, helped by an increase in FX customer deposits of USD32
billion in 2019). The corporate sector has steadily deleveraged,
with the negative net FX position falling to USD176 billion in
November from USD207 billion a year earlier, and the debt rollover
rate was a robust 89% in December (on a rolling 12-month basis).
Highly supportive global financing conditions have also helped
limit downward pressure on the lira. Gross foreign exchange
reserves increased to USD105.5 billion at end-December, from
USD96.3 billion six months earlier.

Weak monetary policy credibility and the deeper than expected cuts
in the policy interest rate from 24% in June to 10.75%, which took
the real rate (based on current inflation) from 8.3% to -1.3%,
increase risks of renewed market volatility. This followed the
sacking of the central bank governor and replacement of other
senior officials in the context of President Erdogan's unorthodox
views on the relationship between inflation and interest rates.
Inflation in Turkey has averaged 11.7% over the past five years,
compared with the 'BB' median of 3.2%, and has been above the 5%
central bank target since 2011. Fitch forecasts inflation will
remain relatively high, reducing from 12.2% in January to 10.5% at
end-2020, helped by tax adjustments and lower energy prices, and to
10.0% at end-2021.

There has been limited progress in the implementation of key
structural reform measures set out in the New Economy Programme
(NEP). However the recovering economy, together with the
three-and-a-half-year window to the next scheduled elections,
provides a more conducive backdrop for reform. Notwithstanding
widespread speculation, it is not obvious what would be gained by
calling early elections, in Fitch's view (despite reported tensions
within the coalition government and the potential for the steady
erosion of support to opposition parties). Notable measures the
government plans to advance this year include a new insolvency law,
complementary pension system, and severance pay reform.

Fitch continues to view the NEP assumptions (for GDP growth of 5%,
and inflation falling to the 5% target and the current account
balancing by 2022) as highly optimistic. The Turkish economy has
not previously sustained such a combination, and there has been a
long-standing close correlation between stronger economic activity,
high credit growth and an increasing current account deficit. It is
currently unclear how the authorities view such trade-offs, with a
risk that policy settings result in a build-up over time of
unsustainable credit growth and greater external imbalances,
particularly if structural reform progress remains slow.

A number of near-term geopolitical risks weigh on Turkey's rating.
The US Risch-Menendez sanctions bill is likely to be enacted in
1H20, when it will require implementation within 30 days of
sanctions listed by the earlier CAATSA, although Fitch expects the
US administration will select the lighter measures allowed. The
extent to which other sanctions in the bill will be legislated,
such as on Turkish banks and public institutions involved in
operations in Syria, is currently uncertain. Direct clashes in
recent weeks between Turkish and Syrian forces contribute to an
increased risk of a further escalation, heightened tensions with
Russia, and adverse spillovers, compounded by the likely further
displacement of Syrians from Idlib region. Fitch views risks from
Turkey's military operation in Libya, the US court case against
Halkbank, and potential EU sanctions for gas drilling in Cyprus, as
lower impact but still with the potential to damage investor
sentiment.

Fitch forecasts the general government deficit remains at 3.2% of
GDP in 2020, and edges down to 3.0% in 2021, anchored by the high
prioritisation the government attaches to hitting its fiscal
targets. Use of one-off measures in 2019 such as transferring the
central bank accumulated reserve (0.9% of GDP), and cutting capital
spending (by 20% in real terms) contained the increase in the
central government deficit to 2.9% of GDP from 2.0% in 2018. Fitch
views the 2020 budget target for nominal revenue growth of 17% as
achievable given the expected pick-up in GDP growth, phasing out of
special consumption taxes, and additional taxes on higher-rate
income, property, and the digital sector (totalling 0.2% of GDP).
Fitch anticipates the government would implement additional in-year
measures in 2020 and 2021 if the central government budget is off
track.

General government debt is projected to be broadly flat at 32.3% of
GDP in 2020-2021, having increased from 28.2% in 2017, well below
the current 'BB' category median of 46.5%. Fitch anticipates only a
gradual reversal of the shift towards foreign-currency and
shorter-term debt issuance since 2018 (the average maturity of
domestic borrowing in 2019 was just 30.1 months, compared with 71.2
in 2017). Contingent liabilities have increased from a low base,
and Fitch expects direct government guarantees (including the
Credit Guarantee Fund) to stabilise at near 5% of GDP in 2020 and
2021, on top of which Fitch estimates other contingent liabilities
from public-private partnerships of a similar magnitude. On-budget
transfers relating to these guarantees increased close to 70% in
2019 to 0.4% of GDP.

Banking sector metrics reflect the challenging operating
conditions, but short-term risks have eased alongside economic
stabilisation. The NPL ratio increased to 5.4% in January from 3.9%
at end-2018 and Fitch expects a further rise (partly due to
still-high Stage 2 loans of 11%) but at a declining pace. High
impairments and weak GDP growth lowered the return on equity to
11.5% in 4Q19 from 14.7% a year earlier, although stronger credit
should drive a moderate improvement in profitability this year. The
average funding cost fell to 7.3% in December from 8.1% in June,
and is likely to further benefit from the lower policy interest
rate. The common equity Tier 1 ratio was unchanged in 2H19 at
14.2%, supported by new issuance and foreign currency loan
deleveraging. Pre-impairment profit provides a buffer to absorb
credit losses but is weaker in state banks, and capital ratios
remain sensitive to potential lira depreciation. Fitch anticipates
only a gradual improvement in the deposit dollarisation ratio,
which remains high at 50.8% despite falling 3.4pp in 2H19.

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

Fitch's proprietary SRM assigns Turkey a score equivalent to a
rating of 'BBB-' on the Long-Term Foreign-Currency (LT FC) IDR
scale.

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

  - Macroeconomic policy and performance: -1 notch, to reflect
    weak macroeconomic policy credibility and coherence and
    downside risks to macroeconomic stability.

  - External finances: -1 notch, to reflect a very high gross
    external financing requirement and low international
    liquidity ratio.

  - Structural features: -1 notch, to reflect an erosion of
    checks and balances and institutional quality, downside
    risks in the banking sector and the risk of developments
    in geopolitics and foreign relations that could impact
    economic stability.

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

RATING SENSITIVITIES

The main factors that may, individually, or collectively, result in
positive rating action are:

  - Greater confidence in the sustainability of the external
    position alongside healthy GDP growth.

  - Implementation of structural reforms that raise domestic
    savings, reduce dollarisation and make GDP growth less
    dependent on credit growth and external borrowing.

  - An improvement in governance standards, political or
    geopolitical risks for example from the conflict in Syria,
    and from US sanctions.

  - A sustained decline in inflation and a rebuilding of
    monetary policy credibility.

The main factors that may, individually, or collectively, result in
negative rating action are:

  - Disruption to the path of economic stabilisation and
    rebalancing, potentially caused by policy settings that
    result in a build-up of unsustainable credit growth, higher
    inflation and greater external imbalances.

  - Renewed stresses in the corporate or banking sectors,
    potentially stemming from a sudden stop to capital inflows
    or currency volatility.

  - A marked worsening in the government debt/GDP ratio or broader
    public balance sheet.

  - A serious deterioration in the domestic political or security
    situation or international relations.

KEY ASSUMPTIONS

Fitch forecasts Brent Crude to average USD62.5/b in 2020 and
USD60.0/b in 2021.

ESG CONSIDERATIONS

Turkey 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. Turkey faces geopolitical risks
and security threats and is involved in conflicts in neighbouring
countries.

Turkey 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.

Turkey has an ESG Relevance Score of 4 for Human Rights and
Political Freedoms as the Voice and Accountability pillar of the
World Bank Governance Indicators are relevant to the rating and a
rating driver.

Turkey has an ESG Relevance Score of 4 for International Relations
and Trade. Bilateral relations with key partners have been
volatile, including threats of US sanctions and periodic tensions
with the EU. This turbulence hurts investor confidence, brings
risks to external financing and can impact trade performance and is
a rating driver for Turkey.

Turkey 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 Turkey, as for all sovereigns.




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

BRITISH STEEL: Jingye Writes to French Gov't to Save Rescue Deal
----------------------------------------------------------------
Nikou Asgari and Michael Pooler at The Financial Times report that
British Steel's Chinese bidder has written to the French government
in an effort to save its stalling takeover of the collapsed UK
manufacturer.

According to the FT, people with knowledge of the matter said with
the clock ticking down on a deadline for the deal to be completed,
Chinese conglomerate Jingye has sent a letter to the French finance
ministry to persuade Paris of the plan's merits.

UK officials agreed a GBP50 million rescue deal with Jingye in
November, the FT recounts.  Under the agreement, Jingye would take
control of the group's plants in Britain, France and the
Netherlands, the FT discloses.

But the takeover, which is set to save 5,000 jobs after the group
fell into insolvency in May, has faced hurdles in Paris, where the
government has the power to veto the sale of the French factory
because it is considered of strategic importance, the FT states.

Jingye has until the end of February to complete its takeover of
the company, the FT relays, citing people familiar with the matter.


If the deal is not done, the manufacturer may be broken up and sold
off in parts by the UK's official receiver, which is overseeing the
sale, the FT notes.

The collapse of the GBP50 million rescue deal would throw doubts on
to the future of the whole of British Steel and its workers, many
of whom are based in Scunthorpe, according to the FT.

Jingye, the FT says, is trying to reassure French authorities that
it would be the best owner of Hayange, British Steel's plant in
northern France, and convince them of the merits of its investment
plans for the future of the company.  As well as sending the
letter, Jingye representatives have met French ministers to discuss
the bid, the FT relates.

According to the FT, people with knowledge of the matter said the
French authorities have been eyeing up alternatives including
ArcelorMittal, the world's largest steelmaker, as a viable
alternative buyer for Hayange, which supplies rail for the
country's state-owned SNCF network.

Jingye has pledged to increase British Steel's production by 30%
and invest EUR60 million into Hayange, five times more than
investment under previous owners, according to two people, the FT
notes.

But French officials said Jingye's plans to increase production
were "not logical" because Europe's steel industry is struggling
with overcapacity, partly as a result of Chinese steelmakers
historically dumping underpriced products into the EU, the FT
relates.

                        About British Steel

British Steel Limited is a long steel products business founded in
2016 with assets acquired from Tata Steel Europe by Greybull
Capital.  The primary steel production site is Scunthorpe
Steelworks, with rolling facilities at Skinningrove Steelworks,
Teesside and Hayange, France.

British Steel has about 5,000 employees.  There are 3,000 at
Scunthorpe, with another 800 on Teesside and in north-eastern
England.  The rest are in France, the Netherlands and various sales
offices round the world.

British Steel was placed in compulsory liquidation on May 22, 2019.
The liquidation came after the Company failed to obtain an
emergency state loan of about GBP30 million.

The Government's Official Receiver has taken control of the company
as part of the liquidation process.  Accountancy firm EY has been
named Special Manager in the case, and will be assisting the
Receiver.


EMF-UK PLC 2008-1: Fitch Upgrades Class B1 Notes to BBsf
--------------------------------------------------------
Fitch Ratings upgraded EMF-UK 2008-1 Plc's class B1 notes and
affirmed the others, as follows:

RATING ACTIONS

EMF-UK 2008-1 Plc

Class A1a XS0352932643; LT AAAsf Affirmed; previously at AAAsf

Class A2a XS1099724525; LT AAAsf Affirmed; previously at AAAsf

Class A3a XS1099725415; LT A+sf Affirmed;  previously at A+sf

Class B1 XS0352308075;  LT BBsf Upgrade;   previously at B+sf

Class B2 XS1099725928;  LT CCCsf Affirmed; previously at CCCsf

TRANSACTION SUMMARY

The transaction is a securitisation of seasoned non-conforming
residential mortgage loans originated by Southern Pacific Mortgage
Limited, Preferred Mortgages Limited, Alliance and Leicester Plc
and Matlock Bank Limited.

KEY RATING DRIVERS

Updated UK RMBS Criteria Assumptions

This rating action takes into account the updated UK RMBS Criteria
assumptions, which were published on October 4, 2019.

The upgrade of the class B1 notes stems from the application of the
new criteria assumptions. The notes' ratings have been removed from
Under Criteria Observation.

In its analysis of the portfolio, Fitch applied the buy-to-let
(BTL) foreclosure frequency matrix to the BTL portion of the
portfolio, and the non-conforming matrix to the remainder of the
pool.

Stable Asset Performance

The percentage of loans more than three months in arrears has been
below 9.0% since closing and is currently at 6.6% of the portfolio
outstanding balance, slightly up from 6.4% at last review.
Cumulative balance of loans with properties taken into possession
is reported at 6.2% of the initial pool balance. Since closing,
both metrics have been consistently below the market average.

Interest-only Concentration

The total portfolio has a high proportion of interest-only (IO)
loans (74.9%) and a material concentration of IO loans (35.8%)
maturing within a three-year period (2030-2032). The scheduled
redemption of the IO loans is well in advanced of the legal final
maturity date of the notes of March 2046, which provides a buffer
for any delayed redemptions.

Payment Interruption Risk

The transaction has a dedicated cash reserve available to cover
payment interruption risk for the senior notes in the event of a
service disruption. However, the liquidity reserve fund only covers
interest shortfalls on the class A1a and A2a notes. The absence of
dedicated liquidity for the class A3 notes prevents any upgrade
above the 'Asf' rating category.

RATING SENSITIVITIES

In Fitch's opinion, borrower affordability is being supported by
the low interest-rate environment. This is evidenced by
three-month-plus arrears consistently lower than the market
average. However, future interest increases could negatively affect
the ability to pay off borrowers not able to refinance in the
current low-interest-rate environment.


FINSBURY SQUARE 2020-1: Fitch Assigns BB+sf Rating on Cl. X Notes
-----------------------------------------------------------------
Fitch Ratings assigned Finsbury Square 2020-1 plc's notes final
ratings.

RATING ACTIONS

Finsbury Square 2020-1 PLC

Class A XS2105015767; LT AAAsf New Rating; previously AAA(EXP)sf

Class B XS2105015338; LT AAsf New Rating;  previously AA(EXP)sf

Class C XS2105014950; LT A+sf New Rating;  previously A+(EXP)sf

Class D XS2105014794; LT A+sf New Rating;  previously A(EXP)sf

Class E XS2105014281; LT CCCsf New Rating; previously CCC(EXP)sf

Class X XS2105013556; LT BB+sf New Rating; previously BB+(EXP)sf

Class Z XS2105013127; LT NRsf New Rating;  previously NR(EXP)sf

TRANSACTION SUMMARY

Finsbury Square 2020-1 PLC is a securitisation of owner-occupied
and buy-to-let mortgages originated by Kensington Mortgage Company
and backed by properties in the UK.

The transaction features recent originations of both OO and BTL
loans originated up to December 2019 and the residual origination
of the Finsbury Square 2017-1 PLC transaction.

KEY RATING DRIVERS

Pre-funding Mechanism

The transaction contains a pre-funding mechanism through which
further loans may be sold to the issuer, with proceeds from the
over-issuance of notes at closing standing to the credit of the
pre-funding reserves. Fitch has received loan-by-loan information
on additional mortgage offers that could form part of the
collateral, once advanced by the seller. However, Fitch assumed the
additional pool to be based on the constraints outlined in the
transaction documents.

Product Switches Permitted

Eligibility criteria govern the type and volume of product
switches, but these loans may earn a lower margin than the
reversionary interest rates under their original terms. Fitch has
assumed that the portfolio quality will migrate to the weakest
permissible under the product switch restrictions.

Help-to-Buy, Young Professional Products

Up to 12.5% of the prefunding pool may comprise loans in which the
UK government has lent up to 40% inside London and 20% outside
London of the property purchase price in the form of an equity
loan. This allows borrowers to pay a 5% cash deposit and borrow the
remaining balance. Fitch has taken the balances of the mortgage
loan and equity loan into account when determining these borrowers'
foreclosure frequency (FF) via Fitch-calculated debt-to-income
(DTI) and sustainable loan-to-values (sLTVs).

In the pre-funding pool, a product targeting young professionals
and another dedicated to a category of workers called "Hero" (such
as armed forces and NHS personnel, firefighters, teachers), could
be included up to 5%. Non-standard construction (such as concrete,
cob or colt) loans can also be included up to 2.5%.

Self-employed Borrowers

KMC may lend to self-employed individuals with only one year's
income verification completed or the latest year's income if profit
is rising. Fitch believes this practice is less conservative than
other prime lenders'. Fitch applied an increase of 1.3x to FF for
self-employed borrowers with verified income instead of 1.2x as per
criteria.

Error Correction

The final rating assigned to the notes incorporates the correction
of an analytical error. In its previous assignment of expected
ratings Fitch incorrectly modelled the WAFF of Help-to-Buy loans
because the balance of equity loans was incorrect in the portfolio
loan-by-loan data provided to Fitch. This resulted in lower sLTV
and DTI for those loans, which translates into lower WAFF and
ultimately resulted in higher model-implied ratings (for expected
ratings) for the class A and D notes.

RATING SENSITIVITIES

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


HSS HIRE: Moody's Assigns B2 Corp. Family Rating, Outlook Stable
----------------------------------------------------------------
Moody's Investors Service assigned a B2 corporate family rating and
B2-PD probability of default rating to HSS Hire Group plc. Moody's
has also withdrawn all ratings at Hero Acquisitions Limited. The
CFR was re-assigned to HSS Hire Group plc because Moody's no longer
receives audited financial statements for Hero Acquisitions
Limited. The outlook is stable.

RATING RATIONALE

The company's B2 corporate family rating is supported by the
company's improved performance following the reconfiguration of its
network and sale of UK Platforms, which has resulted in a decrease
in Moody's adjusted leverage to 3.1x at LTM June 2019 from around
4.2x at LTM September 2018. Moody's expects leverage to remain at
around 3x for the next 12-18 months. The rating also reflects the
company's leading position in the UK with a wide network coverage
of around 240 trading branches; its relatively better
diversification in terms of end markets compared with its rental
peers that focus on construction, and the large customer base.

HSS's rating is constrained by its weak or negative Moody's
adjusted free cash flow (FCF) negatively impacted by high interest
payments on the term loan facility, for which Moody's expects only
modest improvements in 2020; the geographic concentration of HSS'
operations within the UK where economic uncertainties exist; and
the cyclicality and high capital spending requirements in the tool
and equipment rental industry.

HSS is publicly listed on the London Stock Exchange and has a good
corporate governance track record. The company has also
demonstrated adherence to a prudent financial policy over the last
few years, which Moody's regards as commensurate with the company's
rating level.

LIQUIDITY PROFILE

HSS' liquidity is considered adequate, despite its weak FCF.
Moody's estimates cash balances of c. GBP20 million at FYE2019. The
company also has full availability under its GBP25 million
revolving credit facility , which has a maximum leverage covenant
set with comfortable headroom, and no material impending debt
repayments before 2023.

RATING OUTLOOK

The stable outlook reflects the recent positive trend in earnings
and credit metrics, while also allowing for some potential minor
underperformance which could occur in the current environment, but
assumes there will not be a material reversal of the improvements
in credit metrics achieved over the past 18 months.

WHAT COULD CHANGE THE RATING UP/DOWN

Upward pressure on the rating could occur if (1) Moody's-adjusted
leverage reduces below 3x on a sustained basis, and; (2) FCF is
positive on a consistent basis while maintaining at least adequate
liquidity.

HSS' rating could be downgraded if the positive turnaround in
rental revenue reverses; FCF is negative on a sustained basis;
adjusted leverage increases sustainably above 4.5x, or if liquidity
deteriorates.

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Equipment and
Transportation Rental Industry published in April 2017.

CORPORATE PROFILE

HSS provides tool and equipment hire and related services in the UK
and Ireland. The company operates mainly in the
business-to-business market through HSS Hire, its flagship brand
for core tool and equipment rental activities. HSS Hire Group plc
is listed on the London Stock Exchange, with a market
capitalisation of c. GBP73 million as of February 17, 2020.


KIER GROUP: UK Government Taps Deloitte to Monitor Finances
-----------------------------------------------------------
Oliver Gill at The Telegraph reports that the UK government has
hired advisers to monitor the finances of key suppliers such as
Kier amid growing fears that the HS2 contractor is facing a fresh
squeeze on its finances.

According to The Telegraph, accountancy firm Deloitte has been
appointed to support the Cabinet Office, which oversees contracting
firms that build the country's roads, railways, schools and
hospitals.

Ministers are keen to avert a repetition of the collapse of
Carillion, The Telegraph states.  The government contractor failed
two years ago after failing to secure a funding lifeline from its
banks, The Telegraph discloses.

The Cabinet Office, which employs officials called Crown
Representatives to manage the relationships with every major public
sector supplier, was criticized for a lack of oversight that could
have saved the firm, The Telegraph relates.

As reported by the Troubled Company Reporter-Europe on March 14,
2019, The Telegraph related that troubled contractor Kier shocked
investors by admitting its debt pile was GBP50 million higher than
it had previously thought.  An accounting error in Kier's half-year
results at the end of December meant net debt was GBP181 million
rather than GBP130 million, according to The Telegraph.

Kier Group plc -- https://www.kier.co.uk -- is a UK construction,
services and property group active in building and civil
engineering, support services, public and private housebuilding,
land development and the Private Finance Initiative.


SIRIUS MINERALS: Anglo Says More Attractive Investment Than BHP
---------------------------------------------------------------
Neil Hume at The Financial Times reports that Mark Cutifani, chief
executive of Anglo American, said Sirius Minerals presented a more
attractive investment opportunity than buying a stake in BHP's
giant Canadian potash project.

Anglo, a diversified miner that produces diamonds, platinum group
metals, copper and iron ore, surprised investors in January when it
announced a GBP524 million offer for Sirius, a
cash-strapped UK company trying to develop a giant fertilizer mine,
the FT discloses.

According to the FT, Mr. Cutifani said polyhalite, the commercially
unproven fertilizer Sirius is planning to produce from a mine in
North Yorkshire, was a "very differentiated" product to potash.

Some analysts and investors questioned why Anglo was interested in
buying Sirius when it could get exposure to fertilizer through BHP
Jansen potash project, the FT notes.  Anglo says it will cost more
than US$3 billion to bring the Sirius mine into production, the FT
relays.

BHP, which is now led by Mike Henry, has been searching for a
partner to develop the mine and share more than US$5 billion of
development costs, the FT states.

"We respect the BHP team deeply.  We understand they have already
put a substantial investment into Jansen," the FT quotes Mr.
Cutifani as saying.  "We think, and Mike [Henry] said it the other
day: potash is a great market.  But there's still a lot of
investment to go and it's a very different type of product."


SIRIUS MINERALS: Odey Converts Derivative Position Into Shares
--------------------------------------------------------------
Neil Hume at The Financial Times reports that Odey Asset Management
has converted its derivative position in Sirius Minerals into
shares, as the London-based hedge fund pushes for an improved
takeover offer.

Sirius, which has been struggling to finance a fertilizer mine in
North Yorkshire, has recommended a bid from Anglo American that
values the company at GBP405 million excluding debt, the FT notes.

According to the FT, Odey said it would vote against the 5.5p a
share cash offer unless it is declared final.  It claims Anglo can
afford to pay more without undermining its investment case and said
it would back a bid at 7p or above, the FT states.

Sirius has said there is no alternative to the Anglo offer and that
the company is likely to be placed into administration, threatening
the future of the project and thousands of jobs in the local area,
if the takeover fails, the FT relates.

Odey, as cited by the FT, said on Feb. 21 it had swapped contract
for difference (CFD) derivatives into underlying shares and now
owned a 1.3% stake in Sirius.

Anglo has structured its takeover offer for Sirius as a "scheme of
arrangement", which means it needs to clear two thresholds at a
meeting on March 3 in London, the FT discloses.

If Anglo thinks its offer is going to fail, it has two options, the
FT relays, citing people familiar with the deal.  They said it can
either increase its bid or switch from a scheme of arrangement to a
straightforward takeover, which comes with its own complications
and limitations, according to the FT.

Sirius was plunged into crisis last year after it was forced to
pull a US$500 million bond deal, which was needed to unlock a
US$2.5 billion funding package, the FT recounts.



                           *********


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

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

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

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