/raid1/www/Hosts/bankrupt/TCRAP

/raid1/www/Hosts/bankrupt/TCRAP_Public/110308.mbx T R O U B L E D C O M P A N Y R E P O R T E R A S I A P A C I F I C Tuesday, March 8, 2011, Vol. 14, No. 47 Headlines C H I N A SUNAC CHINA: Fitch Assigns 'BB-' Long-Term Issuer Default Rating SUNAC CHINA: S&P Assigns 'BB-' Corporate Credit Rating H O N G K O N G HVB CAPITAL: Members' Final Meeting Set for April 6 JARDINE M&E: Ying and Chan Step Down as Liquidators JIU FENG: Creditors' Proofs of Debt Due April 4 LANDFORD HOLDINGS: Creditors' Proofs of Debt Due April 7 LITAO COMPANY: Placed Under Voluntary Wind-Up Proceedings OFFICEMAX HK: Members' Final Meeting Set for April 6 OXON LIMITED: Members' Final Meeting Set for April 8 PERFECT SMART: Creditors' Proofs of Debt Due April 4 RAINBOW TRADE: Commences Wind-Up Proceedings SENCO INDUSTRIES: Lam and Boswell Step Down as Liquidators SHARPGAIN INTERNATIONAL: Commences Wind-Up Proceedings SHELL NANHAI: Ying and Chan Step Down as Liquidators ZOPPAS INDUSTRIES: Members' Final Meeting Set for April 4 I N D I A AHW STEELS: CRISIL Reaffirms 'BB+' Rating on INR45.6MM Term Loan APT PACKAGING: CRISIL Assigns 'D' Rating to Various Bank Debts ASTRA CHEMTECH: CRISIL Places 'BB-' Rating on INR75MM Cash Credit BLACK BURN: CRISIL Assigns 'BB-' Rating to INR35MM Term Loan B.N. EXPORTS: CRISIL Reaffirms 'B+' Rating on INR3.7MM Term Loan BORSE BROTHERS: CRISIL Assigns 'C' Rating to INR15MM Cash Credit CANARA BANK: Fitch Assigns 'BB-' Ratings on Foreign Currency Bonds CIBI INTERNATIONAL: CRISIL Assigns 'B-' Rating to Cash Credit DEEPAK SPINNERS: Fitch Puts 'BB-' Rating to 'Non-Monitored' Status DIAGEMS EXPORTS: CRISIL Assigns 'P4' Rating to Packing Credit EVERPLUS PLASTICS: CRISIL Puts 'B' Rating on INR27.5MM Cash Credit IMPERIAL READYMADE: Fitch Assigns 'B' National Long-Term Rating KJ'S EDUCATIONAL: CRISIL Reaffirms 'D' Rating on INR245MM Loan MACHHI RAM: CRISIL Rates INR150 Million Cash Credit at 'B' MALIRAM JEWELLERS: CRISIL Rates INR65 Million Cash Credit at 'BB MEGHA FRUIT: CRISIL Reaffirms 'BB+' Rating on INR20MM Term Loan MERCURY FABRICS: CRISIL Assigns 'BB+' Rating to INR166.3MM Loan MSL IMPEX: CRISIL Reaffirms 'P4' Rating on INR10MM Packing Credit ORIENTAL PLANTS: CRISIL Assigns 'BB+' Rating to INR20.4MM Loan PENVER PRODUCTS: CRISIL Upgrades Rating on INR26MM Loan to 'B+' PHOENIX FOILS: CRISIL Reaffirms 'B+' Rating on INR19.6MM LT Loan SHREE BABA: CRISIL Reaffirms 'B+' Rating on INR75.6MM Term Loan SHREE SAI: CRISIL Reaffirms 'BB+' Rating on INR120.6MM LT Loan SHREE SAI ROLLINGS: CRISIL Reaffirms 'BB+' Rating on Term Loan SHREE SAI SMELTERS: CRISIL Reaffirms 'BB+' Rating on LT Loan TIRUPATI MEDICARE: CRISIL Upgrades Rating on Term Loan to 'B+' J A P A N CLOVER LLC: Moody's Assigns Definitive Ratings to Corporate Loans TAKEFUJI CORP: Bidding Deadline Moved March 22 TAKEFUJI CORP: Receives 776,000 Customer Claims for Refunds YAMAGUCHI FINANCIAL: Fitch Affirms Ratings on Two Subsidiary Banks N E W Z E A L A N D CENTURY CITY: Serepisos Gets Three Day Reprieve from Liquidation EQUITABLE MORTGAGES: S&P Affirms 'D' Financial Strength Ratings NATHANS FINANCE: Ex-Director Pleads Guilty, Gets Home Detention X X X X X X X X * BOND PRICING: For the Week February 28 to March 4, 2011 - - - - - ========= C H I N A ========= SUNAC CHINA: Fitch Assigns 'BB-' Long-Term Issuer Default Rating ---------------------------------------------------------------- Fitch Ratings has assigned Chinese property developer, Sunac China Holdings Limited, a Long-term Foreign Currency Issuer Default Rating of 'BB-' with Stable Outlook. Fitch has also assigned Sunac a senior unsecured rating of 'BB-' and its proposed USD senior unsecured notes issue an expected rating of 'BB-(exp)'. The final rating is contingent upon the receipt of final documents conforming to information already received. Sunac's ratings are constrained by its limited geographical diversification and relatively small scale. Its focus on high quality mid- and high-end properties implies that it is more exposed to the home purchase restrictions recently imposed by the government, though Fitch notes that this niche position is the main driver of its high profitability, a key rating driver. The high quality of the company's land bank, its strong market position in Tianjin and low debt levels are also supportive of its ratings. Fitch views Sunac's liquidity position to be moderate. Sunac's land bank size and diversification is low compared with other residential developers rated in the 'BB' category. The company's land bank by available gross floor area is 6.8m square metres and spread over 15 ongoing and new developments concentrated in Tianjin and Chongqing. Each of the two cities make up roughly 30% of the total with the rest spread out in Beijing, Wuxi and Suzhou, though contracted sales are evenly spread in Tianjin, Wuxi and Chongqing. The company's contracted sales volume reached CNY8.3bn in 2010 and is likely to grow to levels that are more in line with other mid-sized developers. With the exception of Chongqing, the cities that Sunac operates in have materially higher rates of disposable income than the national average. This, along with the company's focus on high- end and luxury housing development, allowed it to achieve high average selling prices (ASPs) of CNY11,438 per square metre and high EBITDA margin of 42% in 2010. Sunac has a particularly strong presence in Tianjin, with the largest number of high-end housing developments. Its strong brand name, good locations and spacious estate designs have allowed its developments to achieve higher ASPs than neighbouring developments by competitors. However, Fitch believes that Sunac's markets, being major municipalities and large second tier cities, are more likely to be impacted by government policy measures that aim to curb excessive investment in residential properties. The company's plans to launch a larger floor area for sale in coming years may offset the effects of these policies. Sunac's conservative financial profile is supported by its low leverage with its net debt/inventory ratio remaining consistently below 30% since 2007. Fitch believes that Sunac will be able to generate a stable earnings stream over the next three years from its existing projects; more than half of its developments are into their later phases, offering sales visibility. This will allow the company to maintain the net debt/inventory ratio around 30% despite a program to replenish land bank amid increasing land prices. The company's policy is to replenish its land bank at land cost of no higher than 20% of the ASP for the locality. Fitch estimates that 2011 funds from operations generation and end-2010 cash balance of CNY4 billion will be sufficient to meet the company's CNY4.2 billion land premium payments and CNY1.1 billion short-term debt maturities in 2011. The proposed notes issue, if successful, will lengthen Sunac's debt maturity profile and improve its liquidity position. The Stable Outlook reflects Fitch's expectations that despite government policies, Sunac's financial profile and liquidity position are likely to remain consistent with its current rating parameters. Factors that may lead to a negative rating action include adverse changes to Sunac's markets and product mix leading to an EBITDA margin below 25% and aggressive acquisition of land bank resulting in FFO interest coverage below 2x and/or a net debt/inventory ratio above 35%. No positive rating action is envisaged over the next 24 months given the constraints posed by scale and diversification. SUNAC CHINA: S&P Assigns 'BB-' Corporate Credit Rating ------------------------------------------------------ Standard & Poor's Ratings Services said that it had assigned its 'BB-' long-term corporate credit rating to Tianjin-based real estate developer Sunac China Holdings Ltd. The outlook is stable. At the same time, Standard & Poor's assigned its 'B+' issue rating to the company's proposed issue of senior unsecured notes. Sunac will use the bond proceeds to finance land acquisitions and for general corporate purposes. The rating on the notes is subject to S&P's review of the final issuance documentation. "The rating on Sunac reflects the company's project and geographic concentration risks, and the sensitivity of China's high-end residential property market to policy changes. In addition, Sunac has a record of weak corporate governance and an aggressive growth appetite," said Standard & Poor's credit analyst Bei Fu. "These weaknesses are tempered by Sunac's proven operating track record in Tianjin, Chongqing, and Wuxi, which account for over 80% of its attributable land reserves. The rating also factors in the company's reasonable financial performances in the past three years and its low-cost land bank." Sunac has limited diversity compared with similarly rated peers'. Almost all of its land bank is for mid- to high-end residential property development. Tianjin, Chongqing, and Wuxi accounted for more than 90% of contract sales in 2010. Demand is less volatile in such cities, and mainly driven by owner-occupiers. However, the company's exposure to mid- to high-end development is likely to create challenges, given the tight regulatory environment. As Sunac's fund-raising efforts boost its liquidity, S&P believes its expansion is likely to accelerate. It has already spent more than Chinese renminbi 5 billion on land acquisitions during the past three months. S&P is likely to review the rating if the pace of Sunac's acquisitions does not slow down in the remainder of this year. Many of Sunac's management team was previously employed at Sunco China Holdings Ltd., a property company that nearly defaulted in 2007 due to aggressive expansion. Sunac's chairman, Mr. Sun Hong Bin, still holds 5.26% in one of Sunco's subsidiaries, but is no longer involved in its management. S&P note that Sunac's growth to date has been less aggressive than Sunco's. S&P expects Sunac's financial performances to be in line with those over the past three years and therefore commensurate with the current rating, in its opinion. Its results have been less volatile than those of its peers. In 2008-2010, its EBITDA interest coverage was well above 3.5x and its ratio of debt to EBITDA below 3x. In its base-case scenario, S&P expects higher revenue to be offset by greater leverage in 2011. The company has locked in 25% of its revenue target for 2011 and mature projects will contribute more than 70% of the contract sales target for 2011 and 2012. Sunac's liquidity is adequate, in S&P's view. As at Dec. 31, 2010, it had unrestricted cash on hand totaling RMB3,958 million against short-term debt of RMB1,068 million. At the end of February 2011, it also had about RMB2.00 billion in unused and uncommitted bank facilities and RMB3.21 billion in outstanding land premiums. S&P expects Sunac's construction spending to increase over the next 12 months as it grows in scale. S&P believes it can satisfy most of its cash outflow needs with cash sales as well as proposed financing activities, despite the more challenging credit environment in China. "The stable outlook reflects S&P's expectation that Sunac will maintain adequate liquidity while pursuing growth mainly in its existing markets. S&P also expects the company to expand in a disciplined manner, keep its EBITDA margin at more than 30% in 2011-2012, and hold at least RMB1.5 billion cash balances annually," said Ms. Fu. S&P could lower the rating if Sunac's presales or margins are materially weaker than S&P expected, and debt-funded expansion is more aggressive than S&P expected, such that its debt-to-EBITDA ratio is above 5x and its EBITDA interest coverage is less than 3x. The upside to the rating is currently limited due to the concentration risk that Sunac faces. S&P could raise the rating if the company can demonstrate reasonable growth discipline and deliver consistent financial management while expanding its scale and diversification. ================ H O N G K O N G ================ HVB CAPITAL: Members' Final Meeting Set for April 6 --------------------------------------------------- Members of HVB Capital Asia Limited will hold their final meeting on April 6, 2011, at 10:00 a.m., at 31/F., The Center, 99 Queen's Road Central, in Hong Kong. At the meeting, Ng Kit Ying Zelinda and Michel Henricus Bots, the company's liquidators, will give a report on the company's wind-up proceedings and property disposal. JARDINE M&E: Ying and Chan Step Down as Liquidators --------------------------------------------------- Ying Hing Chiu and Chan Mi Har stepped down as liquidators of Jardine M&E Contracting (China) Limited on Feb. 24, 2011. JIU FENG: Creditors' Proofs of Debt Due April 4 ----------------------------------------------- Creditors of Jiu Feng Arco Shipping Co. Limited, which is in members' voluntary liquidation, are required to file their proofs of debt by April 4, 2011, to be included in the company's dividend distribution. The company commenced wind-up proceedings on Feb. 18, 2011. The company's liquidators are: Thomas Andrew Corkhill Iain Ferguson Bruce 8th Floor, Gloucester Tower The Landmark 15 Queen's Road Central, Hong Kong LANDFORD HOLDINGS: Creditors' Proofs of Debt Due April 7 -------------------------------------------------------- Creditors of Landford Holdings Limited, which is in members' voluntary liquidation, are required to file their proofs of debt by April 7, 2011, to be included in the company's dividend distribution. The company's liquidator is Yuen Shu Tong. LITAO COMPANY: Placed Under Voluntary Wind-Up Proceedings --------------------------------------------------------- At an extraordinary general meeting held on Feb. 25, 2011, creditors of Litao Company Limited resolved to voluntarily wind up the company's operations. The company's liquidator is: Siu Yee Cheong Stephen Room 1003, Easey Commercial Building 253-261 Hennessy Road Hong Kong OFFICEMAX HK: Members' Final Meeting Set for April 6 ---------------------------------------------------- Members of Officemax Hong Kong Limited will hold their final meeting on April 6, 2011, at 10:00 a.m., at 7th Floor, Alexandra House, 18 Chater Road, Central, in Hong Kong. At the meeting, Philip Brendan Gilligan, the company's liquidator, will give a report on the company's wind-up proceedings and property disposal. OXON LIMITED: Members' Final Meeting Set for April 8 ---------------------------------------------------- Members of Oxon Limited will hold their final general meeting on April 8, 2011, at 3:00 p.m., at Block D, 15/F., 30-36 Mongkok Road, in Kowloon. At the meeting, Lam Yat Chung, the company's liquidator, will give a report on the company's wind-up proceedings and property disposal. PERFECT SMART: Creditors' Proofs of Debt Due April 4 ---------------------------------------------------- Creditors of Perfect Smart Limited, which is in members' voluntary liquidation, are required to file their proofs of debt by April 4, 2011, to be included in the company's dividend distribution. The company's liquidator is: Sung Mi Yin Suite No. A, 11th Floor Ritz Plaza, 122 Austin Road Tsimshatsui, Kowloon Hong Kong RAINBOW TRADE: Commences Wind-Up Proceedings -------------------------------------------- Members of Rainbow Trade Company Limited, on Feb. 25, 2011, passed a resolution to voluntarily wind up the company's operations. The company's liquidator is: Ko Chi Keung 5/F., Dah Sing Life Building 99-105 Des Voeux Road Central, Hong Kong SENCO INDUSTRIES: Lam and Boswell Step Down as Liquidators ---------------------------------------------------------- Rainier Hok Chung Lam and Anthony David Kenneth Boswell stepped down as liquidators of Senco Industries Limited on Feb. 22, 2011. SHARPGAIN INTERNATIONAL: Commences Wind-Up Proceedings ------------------------------------------------------ Members of Sharpgain International Limited, on Feb. 25, 2011, passed a resolution to voluntarily wind up the company's operations. The company's liquidator is: Ko Chi Keung 5/F., Dah Sing Life Building 99-105 Des Voeux Road Central, Hong Kong SHELL NANHAI: Ying and Chan Step Down as Liquidators ---------------------------------------------------- Ying Hing Chiu and Chan Mi Har stepped down as liquidators of Shell Nanhai Limited on Feb. 28, 2011. ZOPPAS INDUSTRIES: Members' Final Meeting Set for April 4 --------------------------------------------------------- Members of Zoppas Industries Asia Limited will hold their final general meeting on April 4, 2011, at 10:00 a.m., at 5/F., Dah Sing Life Building, 99-105 Des Voeux Road Central, in Hong Kong. At the meeting, Yan Tat Wah, the company's liquidator, will give a report on the company's wind-up proceedings and property disposal. ========= I N D I A ========= AHW STEELS: CRISIL Reaffirms 'BB+' Rating on INR45.6MM Term Loan ---------------------------------------------------------------- CRISIL's ratings on the bank facilities of AHW Steels Ltd continue to reflect AHW's below-average financial risk profile marked by an aggressive total outside liabilities to tangible net worth ratio and inadequate debt protection metrics. Facilities Ratings ---------- ------- INR490.0 Million Cash Credit BB+/Stable (Reaffirmed) INR45.60 Million Term Loan BB+/Stable (Reaffirmed) INR164.4 Million Letter of Credit P4+ (Reaffirmed) The ratings also factor in the company's working-capital-intensive operations, and susceptibility to intense competition and cyclicality in the secondary steel industry. These rating weaknesses are partially offset by AHW's established position in the eastern markets of India, supported by the experience of its promoters in the steel industry. Outlook: Stable CRISIL believes that AHW will continue to benefit over the medium term from its established market position, supported by its promoters' industry experience, its strong relationships with its customers and suppliers, and its overall buoyancy in the steel sector. The outlook may be revised to 'Positive' in case the capital structure improves significantly, primarily backed by fresh equity infusion, or if there is sharp and sustained improvement in profitability levels. Conversely, the outlook may be revised to 'Negative' if there is any further stretch in AHW's working capital cycle, or any significant debtors' write-off, or if the company undertakes any aggressive debt-funded capital expenditure programme, leading to further deterioration in its capital structure. About AHW Steels AHW is part of the Bagaria group, which has business interests in the tea estate, steel, and power sectors. AHW, the steel and power arm of the group, began rolling mill operations in 1985. Currently, the company's mill in Sodepur (West Bengal) has an installed capacity to manufacture up to 72,000 tonnes per annum of steel rods and bars; the company derives around 60% of its revenues from trading in steel products, and the rest from sale of thermo-mechanically treated bars and wire rods. In 2005-06 (refers to financial year, April 1 to March 31), the company entered the power business, and currently has two wind turbine generators, with a total power generation capacity of 2.5 megawatts, in Maharashtra. The TMT bars are sold under the brand name, Shan. AHW reported a profit after tax (PAT) of INR37.7 million on an operating income of INR4.5 billion for 2009-10, against a PAT of INR29.3 million on an operating income of INR3.4 billion for the previous year. APT PACKAGING: CRISIL Assigns 'D' Rating to Various Bank Debts -------------------------------------------------------------- CRISIL has assigned its 'D/P5' ratings to Apt Packaging Ltd's bank facilities. The ratings reflect delay by Apt in servicing its debt; the delay was primarily because of company's weak liquidity. Facilities Ratings ---------- ------- INR61.1 Million Rupee Term Loan D (Assigned) INR22.5 Million Cash Credit-Book Debt D (Assigned) INR22 Million Cash Credit-Stock D (Assigned) INR11 Million Packing Credit P5 (Assigned) INR24 Million Deferred Payment P5 (Assigned) Guarantee INR11 Million Post Shipment Credit P5 (Assigned) INR22 Million Letter of Credit P5 (Assigned) Apt has a weak financial risk profile, marked by high gearing, weak debt protection metrics, and small net worth, and small scale of operations. These rating weaknesses are partially offset by Apt's established customer relationships. Apt, set up in 1979 as Anil Chemicals Pvt Ltd, was listed on the Bombay Stock Exchange in 1985 as Anil Chemicals and Industries Ltd; it got its current name in 2008. Apt currently manufactures co-extruded plastic tubes for fast-moving consumer goods companies. Around 40% of Apt's products are exported to various international markets in Australia, Egypt, the US, and the Middle East, while the remainder is sold in India. The company has been registered with the Board for Industrial and Financial Reconstruction since 2002. Apt reported a profit after tax (PAT) of INR101.3 million on net sales of INR172.1 million for 2008-09, against a PAT of INR141.6 million on net sales of INR212.7 million for 2007-08. ASTRA CHEMTECH: CRISIL Places 'BB-' Rating on INR75MM Cash Credit ----------------------------------------------------------------- CRISIL has assigned its 'BB-/Stable/P4+' ratings to the bank facilities of Astra Chemtech Pvt Ltd. Facilities Ratings ---------- ------- INR75.0 Million Cash Credit BB-/Stable (Assigned) INR2.5 Million Cheque Discounting BB-/Stable (Assigned) INR57.0 Million Rupee Term Loan BB-/Stable (Assigned) INR5.0 Million Proposed Long-Term BB-/Stable (Assigned) Bank Loan Facility INR20.0 Million Letter of Credit P4+ (Assigned) The ratings reflect Astra's weak financial risk profile, marked by high gearing, small net worth and average debt protection metrics, small scale of operations, and large working capital requirements. These weaknesses are partially offset by the longstanding experience of Astra's promoters in the adhesives industry. Outlook: Stable CRISIL believes that Astra will benefit over the medium term from the healthy demand for adhesives on account of growth in end-user, packaging and construction, industries. The outlook may be revised to 'Positive' in case of significant improvement in its financial risk profile, most likely because of large equity infusion and significant improvement in its turnover and profitability. Conversely, the outlook may be revised to 'Negative' if the company's financial risk profile deteriorates because of delays in receivable collection, or a large debt-funded capital expenditure programme. About Astra Chemtech Astra was incorporated as S S Formulations Pvt Ltd by Mr. Rashid Ibrahim Sorathiya in 2000. The company got its present name in 2007. The company manufactures water- and solvent-based synthetic adhesives. It also manufactures construction chemicals, textile speciality chemicals, speciality resins, speciality coating and speciality esters on a smaller scale. The company has an installed capacity to produce around 1000 tonnes of adhesive per month at its manufacturing facilities in Boisar (Maharashtra). Astra reported a profit after tax (PAT) of INR7.5 million on net sales of INR381.4 million for 2009-10 (refers to financial year, April 1 to March 31), against a PAT of INR7.0 million on net sales of INR297.1 million for 2008-09. BLACK BURN: CRISIL Assigns 'BB-' Rating to INR35MM Term Loan ------------------------------------------------------------ CRISIL has assigned its 'BB-/Stable/P4+' ratings to the bank facilities of Black Burn & Company Pvt Ltd. Facilities Ratings ---------- ------- INR100 Million Cash Credit BB-/Stable (Assigned) INR35 Million Term Loan BB-/Stable (Assigned) INR45.5 Million Letter of Credit P4+ (Assigned) INR3.5 Million Bank Guarantee P4+ (Assigned) The ratings reflect Black Burn's large working capital requirements, small scale of operations, and weak capital structure. These weaknesses are partially offset by the company's diversified product profile. Outlook: Stable CRISIL believes that Black Burn will benefit over the medium term from the extensive experience of its promoters in the plastic products industry, and its diversified product offering. The outlook may be revised to 'Positive' if the company reports strong increase in revenues and profitability. Conversely, the outlook may be revised to 'Negative' if the company reports lower-than- expected revenues and profitability, or undertakes a larger-than- expected debt-funded capital expenditure programme, leading to deterioration in its financial risk profile. About Black Burn Black Burn, established in 1982 by Mr. Alok Somani and his father, the late Mr. Bhimraj Somani, manufactures various plastic products. The company has two manufacturing units: one in Kolkata (West Bengal) and another in Baddi (Himachal Pradesh). It offers products such as cable accessories, glass-filled nylon liners, and dowels. Black Burn also manufactures plastic-based products used in lighting electronics for Philips Electronics India Ltd, and the plastic bodies of electric meters manufactured by Landis + Gyr AG. Recently, Black Burn developed self-lubricating and wear-resistant plastic products in technical collaboration with the UK-based Tenmat Ltd; the main customer for this product line is the Indian Railways. Black Burn reported a profit after tax (PAT) of INR6.2 million on net sales of INR168.5 million for 2009-10 (refers to financial year, April 1 to March 31), against a PAT of INR8.4 million on net sales of INR187.3 million for 2008-09. B.N. EXPORTS: CRISIL Reaffirms 'B+' Rating on INR3.7MM Term Loan ---------------------------------------------------------------- CRISIL's ratings on the bank facilities of B.N. Exports (BNE; part of the BN group) continue to reflect the BN group's weak financial risk profile marked by large working capital requirements, the vulnerability of its operating margin to volatility in raw material prices and vagaries of monsoon, and the vulnerability of its business to unfavorable changes in government policies. The impact of these rating weaknesses is mitigated by the steady growth in the group's revenues, backed by its promoters' experience in the rice industry. Facilities Ratings ---------- ------- INR150 Million Cash Credit Limit B+/Stable (Reaffirmed) INR150 Million Working Capital Demand Loan B+/Stable (Reaffirmed) INR3.7 Million Term Loan B+/Stable (Reaffirmed) For arriving at its ratings, CRISIL has combined the business and financial risk profiles of BNE and Shree Baba Naga Food Stuff Pvt Ltd, together referred to as the BN group. This is because of the two entities' common line of business, management, and buyers in the export markets, and operational and financial linkages. Outlook: Stable CRISIL believes that the BN group's financial risk profile will remain weak over the medium term because of the group's large working capital requirements. However, the business risk profile is expected to improve on the back of the group's increased domestic presence and brand recognition. The outlook may be revised to 'Positive' in case of significant and sustainable improvement in the group's capital structure. Conversely, the outlook may be revised to 'Negative' if the BN group's revenues and profitability declines or its capital structure deteriorates. About the Group BNE was promoted in the year 2000 as a partnership firm by Mr. Surinder Kumar Chadha, Mr. Krishan Kumar Chadha, Mr. Vinod Kumar Chadha, and Mr. Vijay Kumar Chadha. In 2004-05, the firm came under the control of Mr. Surinder Kumar Chadha and Mr. Krishan Kumar Chadha. BNE is engaged in milling, processing, and selling basmati rice in both the export and Indian markets, and it has a rice milling capacity of 7 tonnes per hour (tph). Its plant is located in Amritsar, Punjab. SBN was incorporated in 2007 as a private limited company by BNE's promoters and their sons, Mr. Varun Chadha, Mr. Ankush Chadha, and Mr. Deepak Chadha. The company has rice milling capacity of 12 tph. Its plant is located in Amritsar. The BN group exports basmati rice to the United Arab Emirates and Iran; and sells rice through 125 distributors in India. Exports contributed about 75% to the group's revenue in 2009-10. The group had launched the 'Season's Fresh' brand in 2008-09 to increase its presence in India. BNE reported a profit after tax (PAT) of INR7.5 million on net sales of INR1384 million for 2009-10, against a PAT of INR3.4 million on net sales of INR491 million for 2008-09. BORSE BROTHERS: CRISIL Assigns 'C' Rating to INR15MM Cash Credit ---------------------------------------------------------------- CRISIL has assigned its 'C/P4' ratings to the bank facilities of Borse Brothers Engineers & Contractors Pvt Ltd. Facilities Ratings ---------- ------- INR15.00 Million Cash Credit C (Assigned) INR60.00 Million Proposed LT C (Assigned) Bank Loan Facility INR11.00 Million Bank Guarantee P4 (Assigned) INR14.00 Million Proposed Short- P4 (Assigned) Term Bank Loan Facility The ratings reflect Borse's weak liquidity, resulting in delays in the repayment of its equipment loan these loans have not been rated by CRISIL. The rating also reflects Borse's small scale of operations in the fragmented construction industry, its large working capital requirements, weak financial risk profile, marked by small net worth, and geographical concentration in its revenue profile. These weaknesses are partially offset by the extensive experience of Borse's promoters in the construction industry. Incorporated in April 2010, Borse is in the civil construction business, undertaking civil work in the road and irrigation segments. The business was initially carried out under the proprietorship firm Borse Brothers Engineers and Contractors, which was established in 1986. The road projects are executed under Pradhan Matri Grahan Sadak Yojana, and irrigation under Tapi Irrigation Development Corporation, both of which are funded by Government of India. The current order book position is around INR340 million, which primarily constitutes civil work for irrigation facilities. The proprietorship firm, Borse Brothers Engineers and Contractors reported a profit before tax (PBT) of INR5 million on operating income of INR122 million for 2009-10 (refers to financial year, April 1 to March 31), as against a PBT of INR7.3 million on net sales of INR89 million for 2008-09. CANARA BANK: Fitch Assigns 'BB-' Ratings on Foreign Currency Bonds ------------------------------------------------------------------ Fitch Ratings has assigned India's Canara Bank's senior notes a Long-Term rating of 'BBB-'. The notes will be issued under Canara's USD1bn medium-term note programme. The expected tenure of the issue is five years. The senior notes' rating is equalised to Canara's Long-Term Foreign-Currency Issuer Default Rating of 'BBB-'. The IDR reflects the bank's reasonably strong credit metrics, which is underpinned by its well-established franchise, adequate capitalization and an improvement in its funding profile that continues to support its growing margins. This is coupled with Fitch's expectation of a high probability of support from the bank's parent - Government of India, given Canara's position as the sixth-largest bank in India (by assets). A full list of Canara's ratings is provided below: -- Long-Term Foreign-Currency IDR: 'BBB-'; Outlook Stable; -- Short-Term Foreign-Currency IDR: 'F3'; -- Foreign currency senior debt: 'BBB-'; -- Foreign currency upper tier II bonds: 'BB-'; -- Foreign currency perpetual tier 1 bonds: 'BB-'; -- Support Rating Floor: 'BBB-'; -- National Long-Term rating: 'AAA(ind)'; Outlook Stable; -- Individual rating: 'C/D'; and -- Support rating: '2'. CIBI INTERNATIONAL: CRISIL Assigns 'B-' Rating to Cash Credit ------------------------------------------------------------- CRISIL has assigned its 'B-/Stable/P4' ratings to the bank loan facilities of CIBI International (CIBI; part of the Lakshmivel group). Facilities Ratings ---------- ------- INR100 Million Cash Credit B-/Stable (Assigned) INR50 Million Proposed Cash Credit B-/Stable (Assigned) Facility INR4 Million Bank Guarantee P4 (Assigned) The ratings reflect customer concentration in the Lakshmivel group's revenue profile and the susceptibility of its margins to volatility in raw material prices. Furthermore, there are instances of delay by group company Sri Hari Process (Sri Hari) in servicing its debt (facility not rated by CRISIL). These weaknesses are partially offset by the Lakshmivel group's established presence across the value chain in the textile sector and its moderate financial risk profile, marked by moderate gearing and adequate liquidity. Analytical Approach For arriving at its ratings, CRISIL has combined the business and financial risk profiles of Sri Gugan Pvt Limited, Lakshmivel Mills Pvt Limited, Sri Hari, and CIBI, together referred to as the Lakshmivel group. T his is because all the companies are engaged in the textile value chain, and share common management. Also, the companies share close business synergy and have inter-company commercial transactions, a centralized system for procurement of raw materials, and marketing arrangements. Outlook: Stable CRISIL believes that Lakshmivel group will maintain a stable business risk profile over the medium term, supported by its established market presence and sizeable order book. The outlook may be revised to 'Positive' if there is an improvement in the group's cash accruals along with a diversification in its revenue profile. Conversely, the outlook may be revised to 'Negative' if the company undertakes more-than-expected, large, debt-funded capex programme, or report significantly lower cash accruals due to fall in order book or operating margin. About the Group The Lakshmivel group was set up in 1991 by Mr. G. Sakthivel and his wife Mrs. S. Punithavathi. The group's operations span the entire value chain of the textile business. LMPL was set up in 2006; it manufactures cotton yarn, primarily for Gugan and CIBI. LMPL has a capacity of 12,000 spindles. CIBI, the group's flagship entity, manufactures knitted garments. Sri Hari, a proprietary concern, undertakes activities such as washing, compacting, embroidery, printing, and other processes in the textile value chain. Gugan was set up in 1999; it manufactures fabric and has capacity to produce around 100 tonnes of fabric per day. The group has three windmills with an aggregate capacity of 1.75 mega watts. The Lakshmivel group reported a profit after tax (PAT) of INR92.5 million on net sales of INR3.72 billion for 2009-10 (refers to financial year, April 1 to March 31), against a PAT of INR8.8 million on net sales of INR3.06 billion for 2008-09. DEEPAK SPINNERS: Fitch Puts 'BB-' Rating to 'Non-Monitored' Status ------------------------------------------------------------------ Fitch Ratings has migrated India's Deepak Spinners Limited's 'BB- (ind)' National Long-Term rating to the "Non-Monitored" category. The rating will now appear as 'BB-(ind)nm' on Fitch's website. Simultaneously, the agency has classified these bank loan ratings as "Non-Monitored": -- INR526.2m term loans: migrated to 'BB-(ind)nm' from 'BB- (ind)'; -- INR540m fund-based working capital limits: migrated to 'BB- (ind)nm'/'F4(ind)nm' from 'BB-(ind)'/'F4(ind)'; and -- INR120m non-fund based working capital limits: migrated to 'BB-(ind)nm'/'F4(ind)nm' from 'BB-(ind)'/'F4(ind)'. The ratings have been migrated to the "Non-Monitored" category due to lack of adequate information, and Fitch will no longer provide ratings or analytical coverage of DSL. The ratings will remain in the "Non-Monitored" category for a period of six months and be withdrawn at the end of that period. However, in the event the issuer starts furnishing information during this six-month period, the ratings could be re-activated and will be communicated through a "Rating Action Commentary". DIAGEMS EXPORTS: CRISIL Assigns 'P4' Rating to Packing Credit ------------------------------------------------------------- CRISIL has assigned its 'P4' rating to the bank facilities of Diagems Exports Pvt Ltd. Facilities Ratings ---------- ------- INR100 Million Packing Credit P4 (Assigned) INR40 Million Bill Purchase- P4 (Assigned) Discounting Facility The rating reflects DEPL's weak financial risk profile, marked by high gearing, small net worth, and high bank utilization levels, small scale of operations, and high geographic and customer concentration in its revenue profile. These weaknesses are partially offset by the extensive experience of DEPL's promoters and its established presence in the premium segment of diamond- studded jewellery. DEPL was incorporated in October 2009, promoted by Mr. G K Shenoy, the erstwhile proprietor of Diagems Exports. In February 2010, DEPL commenced commercial operations in diamond-studded jewellery, the same line of business as Diagems. The previous bank facilities of Diagems have now been extended to DEPL by its banker. For arriving at DEPL's rating, CRISIL has therefore also considered Diagems' past business track record. The two are together referred to as the combine. About Diagems Exports DEPL was incorporated in October 2009, promoted by Mr. G K Shenoy (the proprietor of the erstwhile Diagems). DEPL began commercial operations in the same line of business as Diagems-diamond studded jewellery. DEPL is a 100% export-oriented unit, and is engaged in export of diamond studded jewels. Mr. Shenoy, who has experience of more than 20 years in the jewellery industry, looks after every aspect of the business. The operations of the company are spread across the Indian sub-continent and the Middle East through Shenoy Jewellers LLC, which is the marketing and distribution arm of the combine. About 90% of the combine's sales are generated through Shenoy Jewellers LLC. DEPL reported a loss of INR1 million on net sales of INR17 million for 2009-10 (refers to financial year, April 1 to March 31) which was the first year of company's operations. EVERPLUS PLASTICS: CRISIL Puts 'B' Rating on INR27.5MM Cash Credit ------------------------------------------------------------------ CRISIL has assigned its 'B/Stable/P4' ratings to the bank facilities of Everplus Plastics Pvt Ltd. Facilities Ratings ---------- ------- INR27.5 Million Cash Credit B/Stable (Assigned) INR22.5 Million Rupee Term Loan B /Stable (Assigned) INR22.5 Million Proposed Long-Term B/Stable (Assigned) Bank Loan Facility INR2.5 Million Letter of Credit P4 (Assigned) The ratings reflect EPPL's exposure to intense competition in the masterbatches business, small scale of operations, weak financial risk profile, marked by small net worth and high gearing, and susceptibility to fluctuations in raw material prices. These weaknesses are partially offset by the benefits EPPL is expected to derive from the healthy demand for masterbatches. Outlook: Stable CRISIL believes that EPPL will benefit over the medium term from the healthy demand for masterbatches, led by growth in the end- user industry. The outlook may be revised to 'Positive' if the financial risk profile of the company improves significantly, most likely because of significant equity infusion, or if the company is able to achieve more-than-expected growth in turnover and profitability. Conversely, the outlook may be revised to 'Negative' if EPPL's financial risk profile deteriorates on account of a larger-than-expected debt-funded capital expenditure programme, or if growth in turnover and profitability is lower than expected. About Everplus Plastics EPPL, promoted by Mr. Gautam Somani and his brother, Mr. Siddhartha Somani in 2002, manufactures masterbatches, especially anti-fibrillation1 compounds. The company began commercial operations in 2006. Its manufacturing facilities are in Silvassa (Dadra and Nagar Haveli). Currently, the company has a capacity of around 400 tonnes per month. EPPL reported a profit after tax (PAT) of INR1.5 million on net sales of INR115.5 million for 2009-10 (refers to financial year, April 1 to March 31) as against a PAT of INR1.8 million on net sales of INR87.4 million for 2008-09. IMPERIAL READYMADE: Fitch Assigns 'B' National Long-Term Rating --------------------------------------------------------------- Fitch Ratings has assigned India's Imperial Readymade Garments Private Limited (Imperial) a National Long-Term rating of 'B(ind)'. The Outlook is Stable. The agency has also assigned 'B(ind)'/'F4(ind)' ratings to Imperial's fund-based working capital bank limits of INR80.0m, non-fund-based bank limits of INR35.0m, and term loan of INR134.8m. The ratings reflect Imperial's small scale of operations and limited operational track record (commercial operations started from FY08). It also reflects the company's operational constraints in the form of labor shortages and attrition, which have resulted in low capacity utilization (FY10: 44%) and negative financial performance (FY10: net loss INR7.0m), leading to low EBIDTA margins (4%-5%), net losses and high gearing (debt/EBIDTA: 17.4x in FY10). The ratings are also moderated by the high level of customer concentration as more than 90% of the revenues are contributed by a single customer - Jones Apparel Group Inc. Imperial's positive rating factors include the experience of management in the textile industry since the late 1980s and the long-standing relationship with the key customer. Positive rating guidelines include a sustained improvement in capacity utilization and EBIDTA margins, leading to an improvement in interest coverage to above 1.5x and leverage to below 10.0x. Any sustained deterioration in EBIDTA margins to below 5.0% and interest cover to below 1.2x would be considered as a negative rating guideline. Imperial Readymade Garments is a Chennai b INRased company, promoted by Mr. A. George in 2006. The company is engaged in the manufacturing and exporting of men's and women's apparel. During FY10, Imperial reported operating income of254.6m, EBIDTA of INR13.9 million and EBIDTA margins of 5.4%. KJ'S EDUCATIONAL: CRISIL Reaffirms 'D' Rating on INR245MM Loan -------------------------------------------------------------- CRISIL's rating on the bank facilities of KJ's Educational Institute continues to reflect instances of delay by KEI in servicing its term debt; the delays have been caused mainly by the trust's weak liquidity. Facilities Ratings ---------- ------- INR245.00 Million Term Loan D (Reaffirmed) INR255.00 Million Propsoed LT D (Reaffirmed) Bank Facility KEI has a weak financial risk profile, marked by a small net worth and weak debt protection metrics, and a small scale of operations in the intensely competitive education sector. The trust is also exposed to adverse regulatory changes. These rating weaknesses are partially offset by the extensive experience of KEI's promoters in managing educational institutions, and the healthy demand prospects for the education industry. KEI, registered in 2005, runs three colleges: KEI's Trinity College of Engineering and Research and KJ College of Engineering & Management Research (offer master of business administration [MBA] and undergraduate engineering courses), and the Trinity Institute of Management & Research (offers MBA course). These colleges have the requisite approvals from the All India Council for Technical Education, Directorate of Technical Education, and Government of Maharashtra, and are affiliated to the University of Pune. KEI reported a deficit (excess of expenditure over income) of INR43.6 million on net income of INR59.36 million for 2009-10 (refers to financial year, April 1 to March 31), against a deficit of INR27.1 million on net sales of INR22.9 million for 2008-09 MACHHI RAM: CRISIL Rates INR150 Million Cash Credit at 'B' ---------------------------------------------------------- CRISIL has assigned its 'B/Stable' rating to the cash credit facility of Machhi Ram Kishan Chand Sidana. Facilities Ratings ---------- ------- INR150 Million Cash Credit B/Stable (Assigned) The rating reflects MRKCS's weak financial risk profile, marked by high gearing and weak debt protection metrics. The rating also reflects MRKCS's large working capital requirements, and its susceptibility to adverse regulatory changes, volatility in raw material prices, and to vagaries of the monsoon. These weaknesses are partially offset by the industry experience of MRKCS's promoters. Outlook: Stable CRISIL believes that MRKCS will continue to benefit over the medium term from its experienced promoters' and well established customer relationships. The outlook may be revised to 'Positive' if MRKCS improves its capital structure significantly, most likely through equity infusion by partners, while maintaining its profitability. Conversely, the outlook may be revised to 'Negative' if the firm undertakes a large, debt-funded capital expenditure programme, or if its realizations and margins are adversely impacted by an unexpected slowdown in the basmati export industry. About Machhi Ram Established in 1983, MRKCS is a partnership firm primarily engaged in milling and processing of basmati rice. Raw, boiled, and parboiled rice constitute a small portion of its revenues. The firm sells its produce to wholesalers and distributors in both domestic and export markets. The firm's plant located in Jalalabad (Punjab) has a milling capacity of 4 tonnes per hour. The firm is promoted and managed by Mr. Surinder Kumar and Mr. Vimal Kumar. MRKCS reported a profit after tax (PAT) of INR0.83 million on net sales of INR 316 million for 2009-10 (refers to financial year, April 1 to March 31), as against a PAT of INR0.35 million on net sales of INR218 million for 2008-09. MALIRAM JEWELLERS: CRISIL Rates INR65 Million Cash Credit at 'BB ---------------------------------------------------------------- CRISIL has assigned its 'BB/Stable' rating to the bank facilities of Maliram Jewellers. Facilities Ratings ---------- ------- INR65.0 Million Cash Credit Limit BB/Stable(Assigned) The rating reflects MJ's small scale of operations, and modest financial risk profile, marked by high gearing, moderate debt protection measures, and small net worth. These weaknesses are partially offset by the longstanding experience of MJ's partners in the jewellery business. Outlook: Stable CRISIL believes that MJ will benefit over the medium term from its proprietor's industry experience. The firm's financial risk profile is, however, expected to remain constrained, on account of its small net worth and high debt levels. The outlook may be revised to 'Positive' if the proprietor infuses funds into the firm, leading to substantial improvement in the capital structure of the firm. Conversely, the outlook may be revised to 'Negative' in case the firm undertakes any large, debt funded capital expenditure programme or in case of less-than-expected profitability, leading to deterioration in its financial risk profile. About Maliram Jewellers Set up in 2006 by Mr. Shankar Kumar, MJ is a proprietorship concern engaged in the manufacture of gold- and diamond-studded jewellery. It has a manufacturing facility in Mumbai and a retail showroom, spread over 33,000 square feet, in Amritsar (Punjab). Around 80% of the firm's revenues are derived from retail sales, while the remainder is from wholesale trading. MJ reported a book profit of INR10.4 million on net sales of INR224.5 million for 2009-10 (refers to financial year, April 1 to March 31), against a book profit of INR6.6 million on net sales of INR140.9 million for 2008-09. MEGHA FRUIT: CRISIL Reaffirms 'BB+' Rating on INR20MM Term Loan --------------------------------------------------------------- CRISIL's ratings on the bank facilities of Megha Fruit Processing Pvt Ltd continue to reflect MFPPL's limited track record and small scale of operations in the fruit drinks industry. Facilities Ratings ---------- ------- INR20.0 Million Term Loan BB+/Stable (Reaffirmed) INR30.0 Million Cash Credit BB+/Stable (Reaffirmed) INR10.0 Million Letter of Credit P4+ (Reaffirmed) The ratings also reflect the company's exposure to risks related to geographical concentration in revenue profile. These rating weaknesses are partially offset by MFPPL's healthy financial risk profile, marked by a moderate gearing and healthy debt protection metrics. Outlook: Stable CRISIL believes that MFPPL will maintain its healthy financial risk profile over the medium term on the back of its improving cash accruals and its healthy profitability. The outlook may be revised to 'Positive' if the company scales up its operations materially by expanding its geographical reach, while maintaining its strong profitability. Conversely, the outlook may be revised to 'Negative' if MFPPL's capital structure deteriorates because of large, debt-funded capital expenditure, or there is considerable decline in the company's profitability. Update MFPPL's operating income increased at a healthy year-on-year rate of 91% in 2009-10 (refers to financial year, April 1 to March 31); the increase was driven mainly by healthy demand for the company's mango-based fruit drinks. However, the company's operating margin has declined to around 12.4% in 2009-10 from 16.1% in 2008-09 because of higher input costs. MFPPL is increasing its owned capacity to 300,000 cases from 150,000 cases for a cost of INR400.0 million (INR300.0 million funded by debt and the rest by internal accruals). Despite the capital expenditure, decline in operating profitability, and small net worth, MFPPL's gearing and debt protection metrics are expected to remain healthy because of strong operating income growth on the back of increase in capacities. About Megha Fruit Set up in 2004 by Mr. K Sathya Shankar, MFPPL manufactures and sells fruit drinks. The company's facility at Puttur (Karnataka) has capacity to manufacture around 300,000 cases of fruit drinks per month. The company also manufactures milkshakes, squashes, and fizzy drinks. Its products are marketed under the Sip On brand name. MFPPL reported a profit after tax (PAT) of INR17.7 million on sales of INR321 million for 2009-10, against a PAT of INR9.5 million on sales of INR148 million for 2008-09. MERCURY FABRICS: CRISIL Assigns 'BB+' Rating to INR166.3MM Loan --------------------------------------------------------------- CRISIL has assigned its 'BB+/Stable' rating to the bank facilities of Mercury Fabrics Pvt Ltd (MFPL, part of the Mercury group). Facilities Ratings ---------- ------- INR42.50 Million Cash Credit Limit BB+/Stable (Assigned) INR166.30 Million Term Loan BB+/Stable (Assigned) The ratings reflect the Mercury group's small scale, and working- capital-intensive nature, of operations, small net worth, and below-average net cash accruals to total debt ratio. These rating weaknesses are partially offset by the Mercury group's high capacity utilization level, moderate operating margin, established customer base, and improving gearing. For arriving at the ratings, CRISIL has combined the business and financial risk profiles of MFPL and MFPL's group company, Mercury Fabrics Creations (P) Ltd, together referred to as the Mercury group. This is because both the companies are in the same line of business, under a common management, and have operational linkages with each other. Mr. Tajinder Sachdeva (managing director) and his son, Mr. Rahul Sachdeva (director), control and manage the strategic functions of both the companies. These functions include procurement, marketing, and capacity expansion. MFCPL acts as a marketing arm of MFPL; sales to MFCPL account for nearly 70% of MFPL's total revenues (on an annual basis). Moreover, the management has a long-term vision of merging MFCPL with MFPL. Outlook: Stable CRISIL believes that the Mercury group will continue to benefit over the medium term from its moderate operating efficiency in the knitted-fabric-manufacturing business. The outlook may be revised to 'Positive' in case of better-than-expected growth in operating income and profitability, leading to improvement in the group's financial risk profile. Conversely, the outlook may be revised to 'Negative' in case of larger-than-expected, debt-funded capital expenditure, or decline in operating income growth and profitability, leading to further stress on the Mercury group's financial risk profile. About the Group Set up as partnership firm in 2001 by Mr. Tajinder Sachdeva, MFPL was reconstituted as a private limited company in 2006. MFPL manufactures knitted fabrics using a variety of yarns such as cotton, blended, synthetic, and silk yarns. The company has an installed capacity to manufacture 250 tonnes of knitted fabric per month at its unit in Bawal (Haryana) MFPL sells its products to MFCPL and to large ready-made garment exporters such as Gokaldas Exports Ltd, Orient Craft Ltd, and Pearl Global Ltd. MFCPL functions as MFPL's marketing and distribution arm, and accounts for around 70% of MFPL's total revenues. MFCPL does not undertake any manufacturing activity. It sells MFPL's products to around 50 ready-made garment exporters in India such as Shahi Exports (P) Ltd, Pratibha Syntex (P) Ltd, and Paragon Apparels (P) Ltd. The Mercury group reported a profit after tax (PAT) of INR8.6 million on net sales of INR349 million for 2009-10 (refers to financial year, April 1 to March 31), against a PAT of INR1.5 million on net sales of INR249 million for 2008-09. MSL IMPEX: CRISIL Reaffirms 'P4' Rating on INR10MM Packing Credit ----------------------------------------------------------------- CRISIL has reaffirmed its 'P4' rating on the bank facilities of MSL Impex Pvt Ltd. Facilities Ratings ---------- ------- INR10 Million Packing Credit P4 (Reaffirmed) INR90 Million Letter of Credit P4 (Reaffirmed) The rating continues to reflect MSL's weak financial risk profile, marked by small net worth, high ratio of total outside liabilities to tangible net worth (TOL/TNW) and weak liquidity, and the vulnerability of its operating margin to volatility in the Indian rupee. These rating weaknesses are partially offset by the benefits that MSL derives from its promoters' experience in the agricultural commodity trading business. Update: MSL's operating income in 2009-10 (refers to financial year, April 1 to March 31) was marginally lower than CRISIL had estimated. In 2010-11, sales are expected to be substantially lower than CRISIL's estimates, on account of the good monsoon, resulting in better domestic crop for pulses. Moreover, the prices of imported pulses are on par with domestic prices, leading to reduced trading opportunities for the company. The working capital requirements remain large, with increase in the inventory level; however, debtors are expected to remain in line with CRISIL's estimates. The overall financial risk profile remains constrained by high TOL/TNW levels of 33 times, as on March 31 2010, largely on account of small net worth of INR6.8 million. Though the company has infused equity of INR5 million in 2010-11, the overall net worth remains small, leading to high TOL/TNW ratio for the medium term. The interest coverage also remains weak, in the range of 1.5 times, and is expected to remain at similar levels over the next few years. The liquidity of the company is moderate, as indicated by average monthly bank limit utilization levels of around 70% from April to November 2010. About MSL Impex Set up in 2006 by Mr. Madasamy Thangasamy, MSL trades in agricultural commodities such as pulses and spices, which have varied applications in the food and food products industry. MSL procures around 80% of its requirement from group company Jaisree Impex Pvt Ltd in Singapore, which has been in the business for more than 15 years. The pulses and spices are sold in the domestic spot markets. MSL reported a profit after tax (PAT) of INR2 million on net sales of INR 920 million for 2009-10, against a PAT of INR 0.1 million on net sales of INR1,001 million for 2008-09. ORIENTAL PLANTS: CRISIL Assigns 'BB+' Rating to INR20.4MM Loan -------------------------------------------------------------- CRISIL has assigned its 'BB+/Stable/P4+' ratings to the bank loan facilities of Oriental Plants and Equipments Pvt Ltd (OPEL, part of the OPEL group). Facilities Ratings ---------- ------- INR50.00 Million Cash Credit BB+/Stable (Assigned) INR20.40 Million Rupee Term Loan BB+/Stable (Assigned) INR10.00 Million Letter of Credit P4+ (Assigned) INR14.00 Million Bank Guarantee P4+ (Assigned) The ratings reflect the OPEL group's small scale of operations in the intensely competitive engineering industry, and large working capital requirements. These rating weaknesses are partially offset by the group's moderate financial risk profile, marked by a low gearing and sound debt protection metrics, extensive industry experience of the promoters, and strong client base. For arriving at its ratings, CRISIL has combined the business and financial risk profiles of OPEL and Propel Industries Ltd, together referred to as the OPEL group. PIL is a subsidiary of OPEL, and both the companies have strong business linkages with each other. Outlook: Stable CRISIL believes that the OPEL group will continue to benefit from its moderate financial risk profile and established relationships with key clients, over the medium term. However, its credit risk profile will continue to remain constrained by its small scale of operations and large working capital requirements. The outlook may be revised to 'Positive' if the group increases its scale of operations, while improving its working capital management. Conversely, the outlook may be revised to 'Negative' in case of any larger-than-expected, debt-funded capital expenditure, or if the group's liquidity weakens because of incremental working capital requirements or pressure on margins. About the Group Set up as a partnership firm in 1962 by Mr. A V Varadharajan and Mr. A V Ranganathan, OPEL was reconstituted as a private limited company in 1991. OPEL is engaged in the machining of various engineering components such as wind mills, valves, and auto components. The company has a presence in both domestic and export markets, and earns 20% of its revenues from exports. OPEL's manufacturing facility is located at Coimbatore (Tamil Nadu). PIL is a fully owned subsidiary of OPEL, and commenced commercial operations in 2009-10 (refers to financial year, April 1 to March 31). It manufactures stone crushing equipment. The promoters have set up three other group companies: Sandfits Foundries Pvt Ltd, Bull Agro Machines Pvt Ltd, and Bull Agro Implements. The OPEL group reported a profit after tax (PAT) of INR16.1 million on an operating income of INR289.3 million for 2009-10, against a PAT of INR17.1 million on an operating income of INR296.7 million for 2008-09. PENVER PRODUCTS: CRISIL Upgrades Rating on INR26MM Loan to 'B+' --------------------------------------------------------------- CRISIL has upgraded its rating on the long-term bank facility of Penver Products Pvt Ltd to 'B+/Stable' from 'B/Stable', while reaffirming the rating on the company's short-term facilities at 'P4'. Facilities Ratings ---------- ------- INR26.0 Million Long-Term Loan B+/Stable (Upgraded from 'B/Stable') INR63.0 Million Packing Credit P4 (Reaffirmed) Limits INR110.0 Mil. Bill Discounting P4 (Reaffirmed) Limits The rating upgrade is driven by the improvement in PPPL's capital structure and debt protection metrics, on the back of a steady operating margin and low reliance on debt. The upgrade also reflects CRISIL's belief that PPPL will register healthy revenue growth over the medium term, driven by buoyant demand for seafood in the company's key export markets. CRISIL's ratings continue to reflect PPPL's average financial risk profile marked by high gearing levels and weak debt protection metrics, and exposure to risks inherent in the seafood exports industry. These rating weaknesses are partially offset by the benefits that PPPL derives from its promoters' industry experience. Outlook: Stable CRISIL believes that PPPL will continue to benefit over the medium term from its established relationships with customers. However, the company's financial risk profile is likely to remain weak during this period because of large working capital requirements. The outlook may be revised to 'Positive' if PPPL scales up its operations substantially, leading to better-than-expected cash accruals and financial risk profile. Conversely, the outlook may be revised to 'Negative' if PPPL undertakes a large, debt-funded capex programme, leading to deterioration in its capital structure, or if its volumes or margins decline steeply, resulting in weakening of its financial risk profile. About Penver Products Set up in 1997 as a partnership firm by Mr. Philips Thomas and Mr. Papachan Francis, PPPL was reconstituted as a private limited company in 1998. Currently, Mr. Thomas and Mr. Vinod Kumar are the company's directors. The Kerala-based company exports seafood such as shrimps, cuttlefish, squid, tuna, and octopus. For 2009-10 (refers to financial year, April 1 to March 31), PPPL reported a profit after tax (PAT) of INR5.3 million on net sales of INR418.6 million, against a PAT of INR5.1 million on net sales of INR459.6 million for 2008-09. PHOENIX FOILS: CRISIL Reaffirms 'B+' Rating on INR19.6MM LT Loan ---------------------------------------------------------------- CRISIL's ratings on the bank facilities of Phoenix Foils Pvt Ltd continue to reflect PFPL's weak financial risk profile marked by high gearing and weak debt protection metrics, and small scale of operations in the fragmented steel products industry. These rating weaknesses are partially offset by the benefits PFPL derives from its promoter's extensive experience in the steel products industry. Facilities Ratings ---------- ------- INR75 Million Cash Credit B+/Stable (Reaffirmed) INR19.6 Million Long-Term Loan B+/Stable (Reaffirmed) INR90 Million Letter of Credit P4 (Reaffirmed) Outlook: Stable CRISIL believes that PFPL's financial risk profile will remain constrained because of its weak capital structure over the medium term. The outlook may be revised to 'Positive' if PFPL sustains growth in its revenues, maintains stable profitability, and benefits from large capital infusion by promoters. Conversely, the outlook may be revised to 'Negative' if PFPL undertakes larger-than-expected, debt-funded capital expenditure (capex) programme, thereby weakening its capital structure. Update PFPL's revenues increased by 28% in 2009-10 (refers to financial year, April 1 to March 31) to INR 501 million from that in the previous year, largely driven by higher sales of value added products and marginal volume growth. Operating profit margin, however, declined to 7.4% in 2009-10 from 9.8% in the previous year because of higher raw material cost and increase in competitive pressures. PFPL has reported provisional sales of INR256 million for the period April 1 to September 30 in 2010; CRISIL believes that PFPL's topline will grow moderately by 8 to 12% in 2010-11. PFPL reported a profit after tax (PAT) of INR7.3 million on net sales of INR501.0 million for 2009-10, against a PAT of INR3.7 million on net sales of INR392.4 million for 2008- 09. PFPL's working capital requirements reduced in 2009-10 to a gross current asset level of 129 days, compared to 174 days in the previous year. However, with increasing scale of PFPL's operations and higher sales of value added products, CRISIL believes PFPL's working capital requirements will increase along with increasing sales and increased bank funding. PFPL's financial risk profile, despite improving, remains weak. It had a high gearing of 2.9 times as on March 31, 2010 (3.9 times a year earlier). The company's debt protection indicators also continue to be weak, with interest coverage ratio at 1.7 times and the net cash accruals to total debt ratio at 0.07 times for 2009-10. For 2010-11, PFPL has plans for a capex of around INR15 million for purchase of machinery; this is expected to be funded by debt of around INR10 million and internal accruals. The company's gearing is expected to remain high above 3 times over the medium term. PFPL's liquidity remains moderate, with high bank limit utilization of 89% on an average for the 12 months ended September 2010 and modest unencumbered cash and bank balance of INR0.7 million as on March 31, 2010. The company's current ratio was moderate at 1.1 times as on March 31, 2010. However, its net cash accruals, estimated to be in the range of INR15 million to INR20 million for 2010-11, is expected to be sufficient to meet its long-term debt obligations of around INR10 million maturing during the year. About Phoenix Foils Established in 2005 by Mr. Mukesh Bhandari and his son, Mr. Kapil Bhandari, PFPL manufactures thin-gauge stainless-steel, cold- rolled coils and foils. The company's plant in Umbergaon (Gujarat) has capacity to manufacture 5000 tonnes of coils and foils per annum. SHREE BABA: CRISIL Reaffirms 'B+' Rating on INR75.6MM Term Loan --------------------------------------------------------------- CRISIL's ratings on the bank facilities of Shree Baba Naga Food Stuff Pvt Ltd (SBN; part of the BN group continue to reflect the BN group's weak financial risk profile marked by large working capital requirements, the vulnerability of its operating margin to volatility in raw material prices and vagaries of monsoon, and the vulnerability of its business to unfavorable changes in government policies. The impact of these rating weaknesses is mitigated by the steady growth in the group's revenues, backed by its promoters' experience in the rice industry. Facilities Ratings ---------- ------- INR135.3 Million Cash Credit Limit B+/Stable (Reaffirmed) INR75.6 Million Term Loan B+/Stable (Reaffirmed) For arriving at its ratings, CRISIL has combined the business and financial risk profiles of BNE and Shree Baba Naga Food Stuff Pvt Ltd, together referred to as the BN group. This is because of the two entities' common line of business, management, and buyers in the export markets, and operational and financial linkages. Outlook: Stable CRISIL believes that the BN group's financial risk profile will remain weak over the medium term because of the group's large working capital requirements. However, the business risk profile is expected to improve on the back of the group's increased domestic presence and brand recognition. The outlook may be revised to 'Positive' in case of significant and sustainable improvement in the group's capital structure. Conversely, the outlook may be revised to 'Negative' if the BN group's revenues and profitability declines or its capital structure deteriorates. About the Group BNE was promoted in the year 2000 as a partnership firm by Mr. Surinder Kumar Chadha, Mr. Krishan Kumar Chadha, Mr. Vinod Kumar Chadha, and Mr. Vijay Kumar Chadha. In 2004-05, the firm came under the control of Mr. Surinder Kumar Chadha and Mr. Krishan Kumar Chadha. BNE is engaged in milling, processing, and selling basmati rice in both the export and Indian markets, and it has a rice milling capacity of 7 tonnes per hour (tph). Its plant is located in Amritsar, Punjab. SBN was incorporated in 2007 as a private limited company by BNE's promoters and their sons, Mr. Varun Chadha, Mr. Ankush Chadha, and Mr. Deepak Chadha. The company has rice milling capacity of 12 tph. Its plant is located in Amritsar. The BN group exports basmati rice to the United Arab Emirates and Iran; and sells rice through 125 distributors in India. Exports contributed about 75% to the group's revenue in 2009-10. The group had launched the 'Season's Fresh' brand in 2008-09 to increase its presence in India. SBN reported a profit after tax (PAT) of INR7.5 million on net sales of INR1029 million for 2008-09, against a PAT of INR0.1 million on net sales of INR537 million for 2008-09. SHREE SAI: CRISIL Reaffirms 'BB+' Rating on INR120.6MM LT Loan -------------------------------------------------------------- CRISIL's rating on the bank facilities of Shree Sai Prakash Alloys Private Limited, a part of the Saiji group, continues to reflect the Saiji group's exposure to the cyclicality inherent in the steel business and to the weak business climate in Meghalaya, and working-capital-intensive nature of operations leading to stretched liquidity. These rating weaknesses are partially offset by the integrated nature of operations of the group entities, leading to improvement in the Saji group's market position, and the group's moderate financial risk profile. Facilities Ratings ---------- ------- INR160.0 Million Cash Credit BB+/Stable (Enhanced from INR55.0 Million) INR155.0 Million Long Term Loan BB+/Stable (Enhanced from INR29.8 Million) INR120.6 Million Proposed LT BB+/Stable (Reaffirmed) Bank Loan Facility INR50.0 Million Letter of Credit P4+ (Assigned) INR20.0 Million Bank Guarantee P4+ (Assigned) For arriving at its rating, CRISIL has combined the business and financial risk profiles of Shree Sai Rolling Mills (India) Ltd, SSP, Shree Sai Smelters (India) Ltd, and Shree Sai Megha Alloys Ltd, together referred to as the Saiji group. This is because ingots produced by SSS and SSP are used by SSR, while SSM has guaranteed all the loans of SSS and SSP. Outlook: Stable CRISIL believes that the Saiji group will continue to benefit from its integrated operations and established market position in the steel segment, over the medium term. The outlook may be revised to 'Positive' if the group successfully stabilizes its ongoing capital expenditure (capex), leading to significant improvement in its scale of operations, while maintaining its profitability. Conversely, the outlook may be revised to 'Negative' if there is cost and time overrun in executing the project, or if the group's working capital intensity deteriorates further. About the Group SSP, based in Byrnihat (Meghalaya), is part of the Saiji group, promoted by Mr. J P Jaiswal and Mr. Sandeep Bhagat. The group has a manufacturing presence in Assam, Meghalaya, West Bengal, and Arunachal Pradesh. It has an installed capacity to produce 60,000 tonnes per annum (tpa) of rolling materials in SSR, 32,000 tpa of ingots and 4000 tpa of ferroalloys in SSS, and 28,000 tpa of ingots in SSP. The group's ongoing capex is aimed at increasing its rolling capacity by 68,400 tpa and billet capacity by 40,400 tpa. For 2009-10 (refers to financial year, April 1 to March 31), the Saiji group reported a consolidated profit after tax (PAT) of INR19 million on net sales of INR1 billion; it had reported a PAT of INR33 million on net sales of INR826 million for the previous year. SHREE SAI ROLLINGS: CRISIL Reaffirms 'BB+' Rating on Term Loan -------------------------------------------------------------- CRISIL's rating on the bank facilities of Shree Sai Rolling Mills (India) Ltd, a part of the Saiji group, continues to reflect the Saiji group's exposure to the cyclicality inherent in the steel business and to the weak business climate in Meghalaya, and working-capital-intensive nature of operations leading to stretched liquidity. These rating weaknesses are partially offset by the integrated nature of operations of the group entities, leading to improvement in the Saji group's market position, and the group's moderate financial risk profile. Facilities Ratings ---------- ------- INR24.0 Million Rupee Term Loan BB+/Stable (Reaffirmed) INR256.0 Million Cash Credit BB+/Stable (Reaffirmed) For arriving at its rating, CRISIL has combined the business and financial risk profiles of SSR, Shree Sai Prakash Alloys Pvt Ltd, Shree Sai Smelters (India) Ltd, and Shree Sai Megha Alloys Ltd, together referred to as the Saiji group. This is because ingots produced by SSS and SSP are used by SSR, while SSM has guaranteed all the loans of SSS and SSP. Outlook: Stable CRISIL believes that the Saiji group will continue to benefit from its integrated operations and established market position in the steel segment, over the medium term. The outlook may be revised to 'Positive' if the group successfully stabilizes its ongoing capital expenditure (capex), leading to significant improvement in its scale of operations, while maintaining its profitability. Conversely, the outlook may be revised to 'Negative' if there is cost and time overrun in executing the project, or if the group's working capital intensity deteriorates further. SSR, based in Byrnihat (Meghalaya), is part of the Saiji group, promoted by Mr. J P Jaiswal and Mr. Sandeep Bhagat. The group has a manufacturing presence in Assam, Meghalaya, West Bengal, and Arunachal Pradesh. It has an installed capacity to produce 60,000 tonnes per annum (tpa) of rolling materials in SSR, 32,000 tpa of ingots and 4000 tpa of ferroalloys in SSS, and 28,000 tpa of ingots in SSP. The group's ongoing capex is aimed at increasing its rolling capacity by 68,400 tpa and billet capacity by 40,400 tpa. For 2009-10 (refers to financial year, April 1 to March 31), the Saiji group reported a consolidated profit after tax (PAT) of INR19 million on net sales of INR1 billion; it had reported a PAT of INR33 million on net sales of INR826 million for the previous year. SHREE SAI SMELTERS: CRISIL Reaffirms 'BB+' Rating on LT Loan ------------------------------------------------------------ CRISIL's rating on the bank facilities of Shree Sai Smelters India Limited, a part of the Saiji group, continues to reflect the Saiji group's exposure to the cyclicality inherent in the steel business and to the weak business climate in Meghalaya, and working- capital-intensive nature of operations leading to stretched liquidity. These rating weaknesses are partially offset by the integrated nature of operations of the group entities, leading to improvement in the Saji group's market position, and the group's moderate financial risk profile. Facilities Ratings ---------- ------- INR76.5 Million Cash Credit BB+/Stable (Enhanced from INR56.8 Million) INR27.5 Million Long-Term Loan BB+/Stable (Enhanced from INR4.5 Million) INR53.5 Mil. Proposed Long-Term BB+/Stable (Reaffirmed) Bank Loan Facility INR20 Million Bank Guarantee P4+ (Assigned) For arriving at its rating, CRISIL has combined the business and financial risk profiles of Shree Sai Rolling Mills (India) Ltd, Shree Sai Prakash Alloys Pvt Ltd, SSS, and Shree Sai Megha Alloys Ltd, together referred to as the Saiji group. This is because ingots produced by SSS and SSP are used by SSR, while SSM has guaranteed all the loans of SSS and SSP. Outlook: Stable CRISIL believes that the Saiji group will continue to benefit from its integrated operations and established market position in the steel segment, over the medium term. The outlook may be revised to 'Positive' if the group successfully stabilizes its ongoing capital expenditure (capex), leading to significant improvement in its scale of operations, while maintaining its profitability. Conversely, the outlook may be revised to 'Negative' if there is cost and time overrun in executing the project, or if the group's working capital intensity deteriorates further. About the Group SSS, based in Byrnihat (Meghalaya), is part of the Saiji group, promoted by Mr. J P Jaiswal and Mr. Sandeep Bhagat. The group has a manufacturing presence in Assam, Meghalaya, West Bengal, and Arunachal Pradesh. It has an installed capacity to produce 60,000 tonnes per annum (tpa) of rolling materials in SSR, 32,000 tpa of ingots and 4000 tpa of ferroalloys in SSS, and 28,000 tpa of ingots in SSP. The group's ongoing capex is aimed at increasing its rolling capacity by 68,400 tpa and billet capacity by 40,400 tpa. For 2009-10 (refers to financial year, April 1 to March 31), the Saiji group reported a consolidated profit after tax (PAT) of INR19 million on net sales of INR1 billion; it had reported a PAT of INR33 million on net sales of INR826 million for the previous year. TIRUPATI MEDICARE: CRISIL Upgrades Rating on Term Loan to 'B+' -------------------------------------------------------------- CRISIL has upgraded its rating on the bank facilities of Tirupati Medicare Ltd to 'B+/Stable' from 'D'. Facilities Ratings ---------- ------- INR112.5 Million Rupee Term Loan B+/Stable (Upgraded from 'D') INR150 Million Cash Credit B+/Stable (Upgraded from 'D') The rating upgrade reflects TML's improved liquidity, driven by better working capital management, and supported by increase in working capital funding to INR150 million from the previous INR87.5 million in the second half of 2010-11 (refers to financial year, April 1 to March 31). The upgrade also factors in CRISIL's belief that TML will maintain its liquidity over the medium term on the back of improved revenues, and steady operating margins. The rating also reflects TML's below-average financial risk profile marked by a high gearing and weak debt protection metrics. The rating also factors in the company's small scale of operations and small net worth. These rating weaknesses are partially offset by the benefits that TML derives from its moderate operating efficiencies and reputed customer base. Outlook: Stable CRISIL believes that TML will maintain its credit profile over the medium term on the back of growth in revenues, and steady operating margins. The outlook may be revised to 'Positive' if TML scales up its operations to higher than expected levels, without affecting its financial risk profile, and sustains its profitability, or receives fresh equity infusion leading significant improvement in the capital structure. Conversely, the outlook may be revised to 'Negative' in case of substantial weakening in the company's financial risk profile, driven by a large, debt-funded capex programme or incremental working capital requirements. About Tirupati Medicare Incorporated in September 2007, TML commenced commercial operations in March 2008. Led by Mr. Ashok Goyal (director), TML is engaged in contract manufacturing of generic pharmaceutical formulations. The company's product range includes laxatives, pain-killers, analgesic, nutritional, and anti-diabetic formulations. TML's manufacturing facility, located in Sirmour (Himachal Pradesh), has installed capacity to produce 4 million tablets, 0.75 million capsules, 3 million powder sachets, and 0.1 million liquid boxes per day. The unit operated at around 60% of its capacity in 2009-10. Moreover, as its plant is located in Himachal Pradesh, TML enjoys excise, sales, and income tax benefits. TML reported a profit after tax (PAT) of INR1.7 million on net sales of INR454 million for 2009-10, against a PAT of INR0.05 million on net sales of INR137 million for 2008-09. ========= J A P A N ========= CLOVER LLC: Moody's Assigns Definitive Ratings to Corporate Loans ----------------------------------------------------------------- Moody's Japan K.K. has assigned definitive ratings to the Synthetic CLOs of Regional Financial Institutions (Clover, LLC.) referencing corporate loans to small and medium-sized Japanese enterprises. The ratings address the expected loss posed to investors by the final maturity date. The structure allows for the timely payments of interest and ultimate payment of principal by the final maturity date. The rated promise on the Class C notes is that the total amount of principal paid on the notes be equal to the initial principal amount of the notes. The rating on the Class C notes does not take into account interest payments. The complete rating actions are: * Deal Name: Synthetic CLO of Regional Financial Institutions (Clover, LLC.) Issuer: Clover, LLC. -- Class, Issue Amount, Rating -- Series One Class A Unsecured Notes, JPY 1,900,000,000, Aaa (sf) -- Series One Class B Unsecured Notes, JPY 578,646,000, Baa2 (sf) -- Series One Class C Unsecured Notes, JPY 175,928,000, Caa2 (sf)* * The rating on the Class C notes does not take into account interest payments. -- Interest Rate: Floating -- Payment Frequency: Quarterly -- Issue Date: March 11, 2011 -- Final Maturity Date: May 28, 2014 -- Reference Obligation: Loans to small and medium-sized enterprises (SMEs) in Japan -- Initial Total Reference Obligation Amount: JPY 3,141,574,000 -- Number of Obligors: 140 (The obligor with the highest loan amount comprises approximately 3% of the Initial Total Reference Obligation Amount.) -- Originator/First CDS Buyer/Servicer: THE SAIKYO SHINKIN BANK, Toyama Shinkin Bank, KITAISEUENO SHINKIN BANK, Osaka Shinkin Bank, The Awaji Shinkin Bank -- First CDS Seller/Second CDS Buyer: Japan Finance Corporation (JFC, Aa2) -- Second CDS Seller: Clover, LLC. -- Independent Auditor: Tokyo Kyodo Accounting Office -- Note Trustee/Initial Deposit Bank: Mizuho Corporate Bank, Ltd. (Mizuho Corporate Bank, Aa3/P-1) -- Calculation Agent: Mizuho Trust & Banking Co., Ltd. -- Arranger: Mitsubishi UFJ Morgan Stanley Securities Co., Ltd. Rating Rationale JFC and each originator entered a credit default swap (First CDS) agreement that referenced a pool of corporate loans for SMEs from each originator. The originators, as the protection buyers under the First CDS agreements, will pay a premium to JFC, as the protection seller, which in turn will make a credit protection payment to each of the originators (under certain conditions) if the reference pool suffers a credit event. JFC entered a credit default swap (Second CDS) agreement with the Issuer to transfer the credit risk proceeds from the First CDS agreements to the Issuer. JFC, as the protection buyer under the Second CDS agreement, will pay a premium to the Issuer, as the protection seller, which in turn will make a credit protection payment to JFC (under certain conditions) if the reference pool suffers a credit event. The Issuer will issue the Class A, B, and C Notes. At closing, the proceeds from the notes will be deposited into fixed-term deposit accounts at Mizuho Corporate Bank. The deposit will be used for the principal payment and credit protection payment. Credit enhancement is provided by the senior/subordinated structure. Subordination comprises around 39.5% for the Class A Note, 21.1% for the Class B Note, and 15.5% for the Class C Note. The formula used to calculate the subordination in this transaction is A / B, where "A" equals the total principal amount of the Notes subordinated to the subject Notes and the total amount of the credit protection threshold, and "B" equals the initial total reference obligation amount. The Originators will individually hold the credit protection threshold amounts and use them to cover losses incurred on the loans that they themselves have originated (the "sub-pool"). The credit protection threshold amounts cannot be used to cover losses incurred against other sub-pools. However, the Class B and C Unsecured Notes can be used to cover losses incurred in all the sub-pools. Redemption of the Class A and B Notes will be made every quarter on a pass-through basis (basically pro-rata) in accordance with reductions in the notional amounts. Redemptions of the Class C Note will be made by hard-bullet payment. The proceeds from the interest on the deposits and the CDS premium payments by JFC will be used for the coupon payments on the Class A to C Notes. The weighted average life of the reference pool is approximately 1.5 years. The waterfall is designed to prioritize coupon payments on the Class A and B Notes over the Class C Note if the buyers of the CDS go bankrupt or fail to pay premiums and then this will result in the termination of the CDS agreement causing shortfalls in the coupons on the Class A and B Notes. Liquidity support is also available in the form of a cash reserve mechanism that sets aside the first and second coupon payments on the Class C Note. The ratings are based mainly on the strength of transaction structure, the credit of the reference obligation, the credit of the deposit bank and the servicer's experience. Moody's estimates the annualized expected default rate in the reference pool at approximately 2.9%, taking into consideration the attributes of the reference obligations, performance data on existing securitization pools, macroeconomic trends, and government support measures for SME financing. Moody's also assumes a zero recovery rate from a credit event. To determine the rating, Moody's also conducted a cash flow analysis, adding stress consistent with the assigned rating on parameters such as the expected default rate. The principal payments of the Notes will be deposited into an account at an eligible financial institution (with a Moody's long- term deposit rating of A2 or higher and a short-term rating of P- 1) pursuant to the documents governing this transaction. At closing, the proceeds from the notes will be deposited in fixed- term deposit accounts at Mizuho Corporate Bank. Moody's examined the operations of the originator and considers it sufficiently capable of servicing the reference obligations as servicer, given its substantial SME lending experience. Moody's did not receive or take into account any third-party due diligence reports on the underlying assets or financial instruments in this transaction. The V score for this transaction is Medium. Moody's has assigned ratings to JFC's SME CLOs for six years. The reference obligations and the structure of this transaction is a common one, and the level of complexity is similar to that of other JFC SME CLOs. Moody's V scores provide a relative assessment of the quality of available credit information and the potential variability of various inputs in a rating determination. The V score ranks transactions by the potential for significant rating changes owing to uncertainty about the assumptions due to data quality, historical performance, the level of disclosure, transaction complexity, modeling, and the transaction governance that underlie the ratings. V scores apply to the entire transaction, not to individual tranches. If the transaction default rate used in determining the initial rating were changed to 4.0% or 5.0%, the model output for the Class A would not change. However, the model output for Class B and Class C would change from Baa2 to Baa3 or Ba2(Class B); from Caa2 to Ca or Ca (Class C), respectively (the "parameter sensitivities"). Parameter sensitivities are not intended to measure how the rating of the security might migrate over time; rather, they are designed to provide a quantitative calculation of how the initial rating might change if key input parameters used in the initial rating process differed. The analysis assumes that the deal has not aged, and does not factor structural features such as sequential payment effect. Parameter sensitivities reflect only the ratings impact of each scenario from a quantitative/model-indicated standpoint. Qualitative factors are also taken into consideration in the ratings process, so the actual ratings that would be assigned in each case could vary from the information presented in the parameter sensitivity analysis. TAKEFUJI CORP: Bidding Deadline Moved March 22 ---------------------------------------------- Atsuko Fukase at Dow Jones Newswires reports that the court- appointed administrator for failed consumer lender Takefuji Corp. said Friday that bidding for the company will take place on March 22, a delay from the initial date of March 10, as more time is needed for due diligence. According to Dow Jones, Eiichi Obata, a lawyer who is charged with Takefuji's sale, said at a press conference that administrators are currently receiving questions from bidders and need more time to complete due diligence procedures. Mr. Obata added that he hoped the final bidder will be selected as early as the end of March, Dow Jones relates. Takefuji had shortlisted five potential bidders to sponsor the company. The finalists include TPG Capital, Cerberus Capital Management, J Trust, Tokyo Star Bank and Korea's A&P Financial, Dow Jones says citing people familiar with the matter. Takefuji Corp. filed a bankruptcy petition with the Tokyo District Court on September 28, 2010, with debts of JPY433.6 billion. Bloomberg News said the company has become the biggest casualty of Japan's four-year crackdown on coercive lending practices by consumer finance companies. The lender is seeking to restructure as borrower claims of overpaid interest are estimated to exceed JPY1 trillion. About Takefuji Takefuji Corporation (TYO:8564) -- http://www.takefuji.co.jp/-- is a Japan-based company mainly engaged in the consumer finance business. The Company operates in two business segments. The Consumer Finance segment covers the loan and credit card businesses. The Others segment is involved in the operation of golf courses, the development, management and leasing of real estate, the venture capital business, as well as the investment business, among others. The Company has eight subsidiaries. TAKEFUJI CORP: Receives 776,000 Customer Claims for Refunds ----------------------------------------------------------- The Nikkei reports that Eiichi Obata, the court-appointed administrator of Takefuji Corp., said the company had by the end of February received requests from 776,000 customers for refunds of overpaid interest. The Nikkei relates that Mr. Obata said the figure is expected to eventually hit about 1 million, roughly the number of customers who had asked for refund forms by the end of last month. If all of them request refunds, The Nikkei relates, Takefuji's liabilities are expected to increase by about JPY1 trillion from the JPY430 billion it owed when it filed for bankruptcy protection last October. The company had 580 billion yen in assets then. The Nikkei notes that total refund figure will be calculated by the end of April and incorporated into a rehabilitation plan to be drafted in July. Given the number of people asking for their money back, Takefuji will probably fall into negative net worth, with total liabilities far exceeding its assets, according to The Nikkei. Takefuji Corp. filed a bankruptcy petition with the Tokyo District Court on September 28, 2010, with debts of JPY433.6 billion. Bloomberg News said the company has become the biggest casualty of Japan's four-year crackdown on coercive lending practices by consumer finance companies. The lender is seeking to restructure as borrower claims of overpaid interest are estimated to exceed JPY1 trillion. About Takefuji Takefuji Corporation (TYO:8564) -- http://www.takefuji.co.jp/-- is a Japan-based company mainly engaged in the consumer finance business. The Company operates in two business segments. The Consumer Finance segment covers the loan and credit card businesses. The Others segment is involved in the operation of golf courses, the development, management and leasing of real estate, the venture capital business, as well as the investment business, among others. The Company has eight subsidiaries. YAMAGUCHI FINANCIAL: Fitch Affirms Ratings on Two Subsidiary Banks ------------------------------------------------------------------ Fitch Ratings has affirmed the ratings of two subsidiary banks under Japan's Yamaguchi Financial Group, Inc, Yamaguchi Bank, Ltd. and Momiji Bank, Ltd. At the same time, Fitch has withdrawn the ratings as they are no longer considered by the agency to be relevant to its coverage. Fitch will no longer provide ratings or analytical coverage of these issuers. The rating actions are: Yamaguchi Bank, Ltd.: -- Long-Term Foreign and Local Currency Issuer Default Ratings affirmed at 'BBB+', Outlook Stable; withdrawn -- Short-Term Foreign and Local Currency IDRs affirmed at 'F2'; withdrawn -- Individual Rating affirmed at 'C'; withdrawn -- Support Rating affirmed at '2'; withdrawn -- Support Rating Floor affirmed at 'BBB-'; withdrawn Momiji Bank, Ltd.: -- Long-Term Foreign and Local Currency IDRs affirmed at 'BBB+', Outlook Stable; withdrawn -- Short-Term Foreign and Local Currency IDRs affirmed at 'F2'; withdrawn -- Individual Rating affirmed at 'D'; withdrawn -- Support Rating affirmed at '2'; withdrawn -- Support Rating Floor affirmed at 'BBB-'; withdrawn ==================== N E W Z E A L A N D ==================== CENTURY CITY: Serepisos Gets Three Day Reprieve from Liquidation ---------------------------------------------------------------- The Dominion Post reports that the companies of Wellington property tycoon Terry Serepisos have been given an 11th hour reprieve from liquidation over a NZ$3.5 million debt to Inland Revenue. The five Century City Companies, including the one that owns the Phoenix Football team, were due to face liquidation proceedings in the High Court at Wellington yesterday, March 7. But Associate Judge David Gendall gave them till Thursday, March 10, to firm up repayment plans or make arrangements to secure the debt against other property from the Century City group. As reported in the Troubled Company Reporter-Asia Pacific on Dec. 14, 2010, the National Business Review said that the Inland Revenue Department applied to liquidate five of Mr. Serepisos' companies in October 2010. The debt claimed by the IRD is understood to be about NZ$3.58 million, the Business Review said. The Serepisos companies under threat are Century City Hunter Street, Century City Investments, Century City Developments, Century City Management and Century City Football, which owns the Wellington Phoenix. EQUITABLE MORTGAGES: S&P Affirms 'D' Financial Strength Ratings --------------------------------------------------------------- Standard & Poor's Ratings Services said that it has affirmed and withdrawn its 'D' rating on New Zealand finance company Equitable Mortgages Ltd. At the same time, the long-term issuer and financial strength ratings on Equitable Life Insurance Co Ltd. were withdrawn after first being raised to 'CCC' from 'C', removed from CreditWatch with negative implications, and assigned a negative outlook. The rating upgrade to 'CCC' on Equitable Life immediately prior to withdrawal reflected an improvement in the company's financial position, although it is still weak, as a result of it paying out its debt obligations and having no remaining debt or policy obligations. The company does not have a viable business position, as it is no longer operating (and not expected to recommence operations). NATHANS FINANCE: Ex-Director Pleads Guilty, Gets Home Detention --------------------------------------------------------------- BusinessDay reports that the Securities Commission has welcomed the conviction of former Nathans Finance director John Hotchin after he was sentenced Friday on Securities Act charges. "The starting point of the sentencing, a significant term of imprisonment, delivers a clear message to all issuers as to the importance of the Securities Act's requirements for full and truthful disclosure and the resulting impact on investors' confidence in the securities market," BusinessDay quotes commission chairman Jane Diplock as saying. BusinessDay says John Hotchin, brother of Hanover Finance boss Mark Hotchin, was sentenced to 11 months home detention after pleading guilty in the High Court at Auckland to Securities Commission charges relating to the collapse of Nathans Finance. John Hotchin was a director of Nathans, which failed in August 2007 owing $175 million, from 2001 to April 2007. According to BusinessDay, the guilty pleas were on three charges of making untrue statements in Nathans Finance documents dated December 2006 and March 2007. The untruths involved disclosures made by Nathans about its exposure to related parties, the lack of bad debts, its liquidity and the way it assessed its loans. BusinessDay relates that Justice Lang said Mr. Hotchin's crimes would normally imply a jail term of three years but mitigating circumstances, including his remorse and willingness to co-operate with prosecutors, reduced the sentence in his case to 11 months. Mr. Hotchin agreed to pay NZ$200,000 reparation to receivers of Nathans Finance and give evidence for the Crown against his former colleagues, according BusinessDay. He was ordered to do 200 hours community service. BusinessDay discloses that Nathans investors have so far received just 3.7c in the dollar and are unlikely to recover much more. Receivers PricewaterhouseCoopers said in their most recent report in October the value of Nathans' assets were materially overstated by the company in 2007 and "investors are likely to face a significant loss," according to BusinessDay. According to BusinessDay, Mr. Hotchin, fellow Nathans directors Donald Young, Kenneth Moses and Mervyn Doolan, and Nathans auditor Staples Rodway are being sued by receivers for damages totalling NZ$74.6 million. The directors also face a civil lawsuit from the Securities Commission, which is seeking declaration of civil liability and civil penalties of up to NZ$500,000 each, BusinessDay adds. About Nathans Finance Nathans Finance Ltd went into receivership when the finance company's trustee, Perpetual Trust Limited, appointed receivers on August 20, 2007. The company owed approximately NZ$174 million to some 7,000 investors. Nathans Finance is a wholly owned subsidiary of VTL Group Limited, which also went into receivership in November 2008. VTL Group owns a number of vending machine related businesses which operate in New Zealand, Australia, North America and Europe. =============== X X X X X X X X =============== * BOND PRICING: For the Week February 28 to March 4, 2011 --------------------------------------------------------- Issuer Coupon Maturity Currency Price ------ ------ -------- -------- ----- AUSTRALIA --------- ADVANCED ENERGY 9.50 01/04/2015 AUD 1.07 AINSWORTH GAME 8.00 12/31/2011 AUD 1.20 AMITY OIL LTD 10.00 10/31/2013 AUD 2.01 AMP GROUP FINANC 9.80 04/01/2019 NZD 0.95 BECTON PROP GR 9.50 06/30/2010 AUD 0.19 CENTAUR MINING 11.00 12/01/2007 USD 0.50 EXPORT FIN & INS 0.50 12/16/2019 NZD 63.40 EXPORT FIN & INS 0.50 06/15/2020 AUD 59.44 EXPORT FIN & INS 0.50 06/15/2020 NZD 61.65 FIRST AUSTRALIAN 15.00 01/31/2012 AUD 0.45 HEEMSKIRK CONSOL 8.00 04/29/2011 AUD 2.98 MINERALS CORP 10.50 09/30/2011 AUD 0.25 NEW S WALES TREA 1.00 09/02/2019 AUD 64.15 NEW S WALES TREA 0.50 09/14/2022 AUD 53.49 NEW S WALES TREA 0.50 10/07/2022 AUD 53.31 NEW S WALES TREA 0.50 10/28/2022 AUD 53.15 NEW S WALES TREA 0.50 11/18/2022 AUD 52.99 NEW S WALES TREA 0.50 12/16/2022 AUD 52.78 NEW S WALES TREA 0.50 02/02/2023 AUD 52.43 NEW S WALES TREA 0.50 03/30/2023 AUD 56.36 NEXUS AUSTRALIA 3.60 08/31/2017 AUD 72.32 NEXUS AUSTRALIA 3.60 08/31/2019 AUD 65.74 RESOLUTE MINING 12.00 12/31/2012 AUD 1.26 TREAS CORP VICT 0.50 08/25/2022 AUD 53.38 TREAS CORP VICT 0.50 11/12/2030 AUD 51.72 TREAS CORP VICT 0.50 11/12/2030 AUD 35.83 CHINA ----- CHINA GOV'T BOND 1.64 12/15/2033 CNY 61.67 CHINA POLY GRP 4.72 05/07/2014 CNY 54.60 HONG KONG --------- RESPARCS FUNDING 8.00 12/29/2049 USD 43.12 INDIA ----- POWER FIN CORP 8.99 01/15/2021 INR 9.20 PUNJAB INFRA DB 0.40 10/15/2024 INR 26.11 PUNJAB INFRA DB 0.40 10/15/2025 INR 23.79 PUNJAB INFRA DB 0.40 10/15/2026 INR 21.73 PUNJAB INFRA DB 0.40 10/15/2027 INR 19.89 PUNJAB INFRA DB 0.40 10/15/2028 INR 18.23 PUNJAB INFRA DB 0.40 10/15/2029 INR 16.74 PUNJAB INFRA DB 0.40 10/15/2030 INR 15.40 PUNJAB INFRA DB 0.40 10/15/2031 INR 14.20 PUNJAB INFRA DB 0.40 10/15/2032 INR 13.12 PUNJAB INFRA DB 0.40 10/15/2033 INR 12.15 JAPAN ----- AIFUL CORP 1.20 01/26/2012 USD 74.92 AIFUL CORP 1.99 03/23/2012 JPY 72.72 AIFUL CORP 1.22 04/20/2012 JPY 67.92 AIFUL CORP 1.63 11/22/2012 JPY 54.92 AIFUL CORP 1.74 05/28/2013 JPY 47.92 AIFUL CORP 1.99 10/19/2015 JPY 37.92 JPN EXP HLD/DEBT 0.50 09/17/2038 JPY 58.83 JPN EXP HLD/DEBT 0.50 03/18/2039 JPY 58.29 SHINSEI BANK 5.62 12/29/2049 GBP 73.70 TAKEFUJI CORP 9.20 04/15/2011 USD 17.25 MALAYSIA -------- ADVANCED SYNERY 2.00 01/26/2018 MYR 0.12 ALIRAN IHSAN RES 5.00 11/29/2011 MYR 1.41 CRESENDO CORP B 3.75 01/11/2016 MYR 1.06 DUTALAND BHD 6.00 04/11/2013 MYR 0.45 DUTALAND BHD 6.00 04/11/2013 MYR 0.76 EASTERN & ORIENT 8.00 07/25/2011 MYR 1.07 EASTERN & ORIENT 8.00 11/16/2019 MYR 1.14 KUMPULAN JETSON 5.00 11/27/2012 MYR 0.85 LION DIVERSIFIED 4.00 12/17/2013 MYR 0.60 MITHRIL BHD 3.00 04/05/2012 MYR 0.61 NAM FATT CORP 2.00 06/24/2011 MYR 0.05 OLYMPIA INDUSTRI 6.00 04/11/2013 MYR 0.30 OLYMPIA INDUSTRI 6.00 04/11/2013 MYR 0.52 OLYMPIA INDUSTRI 6.00 04/11/2013 MYR 0.30 PANTECH GROUP 7.00 12/21/2017 MYR 0.10 PUNCAK NIAGA HLD 2.50 11/18/2016 MYR 0.53 REDTONE INTL 2.75 03/04/2020 MYR 0.07 RUBBEREX CORP 4.00 08/14/2012 MYR 0.73 SCOMI ENGINEERING 4.00 03/19/2013 MYR 0.76 SCOMI GROUP 4.00 12/14/2012 MYR 0.08 TATT GIAP 2.00 06/03/2015 MYR 0.70 TRADEWINDS CORP 2.00 02/26/2016 MYR 0.85 TRADEWINDS PLANT 3.00 02/28/2016 MYR 1.55 TRC SYNERGY 5.00 01/20/2012 MYR 1.44 WAH SEONG CORP 3.00 05/21/2012 MYR 2.40 WIJAYA BARU GLOB 7.00 09/17/2012 MYR 0.24 YTL CEMENT BHD 5.00 11/10/2015 MYR 2.36 NEW ZEALAND ----------- ALLIED FARMERS 9.60 11/15/2011 NZD 34.20 DORCHESTER PACIF 5.00 06/30/2013 NZD 73.49 FLETCHER BUI 8.50 03/15/2015 NZD 7.59 FLETCHER BUI 7.55 03/15/2015 NZD 8.00 INFRATIL LTD 8.50 09/15/2013 NZD 8.20 INFRATIL LTD 8.50 11/15/2015 NZD 9.00 INFRATIL LTD 4.97 12/29/2049 NZD 60.00 KIWI INCOME PROP 8.95 12/20/2014 NZD 1.29 MARAC FINANCE 10.50 07/15/2013 NZD 1.03 SKY NETWORK TV 4.01 10/16/2016 NZD 6.04 SOUTH CANTERBURY 10.50 06/15/2011 NZD 1.00 SOUTH CANTERBURY 10.43 12/15/2012 NZD 0.76 ST LAURENCE PROP 9.25 07/15/2010 NZD 64.32 TOWER CAPITAL 8.50 04/15/2014 NZD 1.03 TRUSTPOWER LTD 8.50 09/15/2012 NZD 6.90 TRUSTPOWER LTD 8.50 03/15/2014 NZD 8.25 TRUSTPOWER LTD 7.60 12/15/2014 NZD 1.01 TRUSTPOWER LTD 8.60 12/15/2016 NZD 1.04 UNI OF CANTERBUR 7.25 12/15/2019 NZD 0.99 VECTOR LTD 8.00 06/15/2012 NZD 7.00 VECTOR LTD 8.00 10/15/2014 NZD 1.06 SINGAPORE --------- CAPITAMALLS ASIA 1.00 01/21/2012 SGD 1.00 CAPITAMALLS ASIA 2.15 01/21/2014 SGD 0.99 EQUINOX OFFSHORE 20.00 10/13/2011 USD 71.00 NEXUS 1 PTE LTD 10.50 03/07/2012 USD 0.19 SENGKANG MALL 4.88 11/20/2012 SGD 0.04 UNITED ENG LTD 1.00 03/03/2014 SGD 1.70 WBL CORPORATION 2.50 06/10/2014 SGD 1.65 SOUTH KOREA ----------- CN 1ST ABS 8.00 02/27/2015 KRW 30.35 DONGSAN DEVELOPM 3.50 05/08/2011 KRW 14.32 HOPE KOD 1ST 8.50 06/30/2012 KRW 31.00 HOPE KOD 2ND 15.00 08/21/2012 KRW 30.39 HOPE KOD 3RD 15.00 09/30/2012 KRW 30.29 HOPE KOD 4TH 15.00 12/29/2012 KRW 25.00 HOPE KOD 6TH 15.00 03/10/2013 KRW 34.21 HYUNDAI SWISS BK 8.50 07/15/2014 KRW 9.46 HYUNDAI SWISS BK 8.30 01/13/2015 KRW 10.42 HYUNDAI SWISS S 8.30 01/13/2015 KRW 10.33 IBK 17TH ABS 25.00 12/29/2012 KRW 59.47 JOONG ANG DESIGN 6.00 12/18/2012 KRW 68.90 KB 11TH ABS 23.00 07/03/2011 KRW 67.71 KB 12TH ABS 25.00 01/21/2012 KRW 65.69 KB 13TH ABS 25.00 07/02/2012 KRW 61.62 KDB 6TH ABS 20.00 12/02/2019 KRW 53.83 KEB 17TH ABS 20.00 12/28/2011 KRW 59.93 KOREA LINE CO 6.80 11/30/2011 KRW 57.13 KOREA MUTUAL SAV 8.00 09/22/2012 KRW 10.29 NACF 15TH ABS 25.00 03/18/2011 KRW 63.35 NACF 17TH ABS 20.00 06/03/2011 KRW 22.00 NACF 17TH ABS 25.00 07/03/2011 KRW 20.00 ONE KDB 1ST ABS 7.60 06/13/2011 KRW 25.00 OSAN MYTOWN 1ST 5.64 04/16/2012 KRW 68.46 OSAN MYTOWN 2ND 5.64 04/16/2012 KRW 68.25 SAM HO INTL 6.32 03/28/2011 KRW 70.96 SINBO 1ST ABS 15.00 07/22/2013 KRW 30.96 SINBO 2ND ABS 15.00 08/26/2013 KRW 33.43 SINBO 3RD ABS 15.00 09/30/2013 KRW 33.41 SINBO 4TH ABS 15.00 12/16/2013 KRW 31.25 SINBO 5TH ABS 15.00 02/23/2014 KRW 30.45 SINBO CO 1ST ABS 15.00 03/15/2014 KRW 30.16 SINGOK ABS 7.50 06/18/2011 KRW 52.35 SINGOK NS ABS 7.50 06/27/2011 KRW 52.45 SRI LANKA --------- SRI LANKA GOVT 5.35 03/01/2026 LKR 66.63 THAILAND -------- THAILAND GOVT 0.75 01/04/2022 THB 70.70 VIETNAM -------- HCMC INVT FUND 9.25 08/22/2016 VND 12.50 HCMC INVT FUND 9.25 08/31/2016 VND 12.50 VIETNAM MACHINE 9.20 06/06/2017 VND 74.61 VIETNAM SHIPBUIL 9.00 04/13/2017 VND 61.67 VIETNAM-PAR 4.00 03/12/2028 USD 73.00 ********* Tuesday's edition of the TCR-AP delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR-AP editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Tuesday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR-AP constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR-AP editor holds some position in the issuers' public debt and equity securities about which we report. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR-AP. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com Friday's edition of the TCR-AP features a list of companies with insolvent balance sheets obtained by our editors based on the latest balance sheets publicly available a day prior to publication. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. ********* 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-Asia Pacific is a daily newsletter co- published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. Valerie U. Pascual, Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez, Psyche A. Castillon, Julie Anne G. Lopez, Ivy B. Magdadaro, Frauline S. Abangan, and Peter A. Chapman, Editors. Copyright 2011. All rights reserved. ISSN: 1520-9482. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. TCR-AP subscription rate is US$625 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission ***