TCRAP_Public/130925.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

         Wednesday, September 25, 2013, Vol. 16, No. 190



ADVANCE METAL: Sheet Metal Firm Collapses After 27 Years
RUTHERGLEN HOLIDAY: Quamby Owners Buy Holiday Retreat Facility


MODERN LAND: Moody's Assigns First-Time B2 CFR; Outlook Stable
WUZHOU INT'L: Fitch Rates US$100MM Notes at 'B'


ARENE LIFE: CRISIL Assigns 'B-' Rating to INR140MM Loans
BEE PATH: CRISIL Assigns 'BB-' Ratings to INR29.5MM Loans
BEMCO HYDRAULICS: CRISIL Cuts Ratings on INR350MM Loans to 'D'
HOWRAH GASES: CRISIL Cuts Ratings on INR140MM Loans to 'BB+'
INDIAN BANK: Fitch Lowers LT Issuer Default Rating to 'BB+'

INTER PUBLICITY: CRISIL Reaffirms 'BB-' Rating on INR310MM Loans
JRE VALVES: CRISIL Reaffirms 'B' Ratings on INR101.6MM Loans
SONIC BIOCHEM: CRISIL Reaffirms 'BB+' Ratings on INR983.9MM Loans
SPIRE INDUSTRIES: CRISIL Reaffirms D Ratings on INR256.5MM Loans

XPLORE INFRA: CRISIL Downgrades Rating on INR130MM Loan to 'D'


* SOUTH KOREA: Corporate Bankruptcies Drop to 85 in August

N E W  Z E A L A N D

BEN NEVIS: Ordered to Pay Back-Taxes or Face Liquidation
CHORUS LTD: ASX, ASIC Asked to Probe Insolvency Speculation

S R I  L A N K A

NATIONAL DEVELOPMENT: Fitch Rates USD-Denominated Notes at 'B+'
NATIONAL DEVELOPMENT: S&P Assigns 'B+' Rating to Sr. Unsec. Notes


VIETNAM: Slow Reforms A Drag on Banks' Risk Profiles, Fitch Says


* Upcoming Meetings, Conferences and Seminars

                            - - - - -


ADVANCE METAL: Sheet Metal Firm Collapses After 27 Years
Melinda Oliver at SmartCompany reports that Advance Metal Products
has gone into liquidation.  The 27-year-old company is now under
the management of Grant Thornton Australia administrators Paul
Billingham and Andrew Sallway, the report says.

Messrs. Billingham and Sallway said in a statement to SmartCompany
that they are "urgently assessing the future viability of the

They said they were investigating "whether a sale of all or part
of the business is capable of being achieved," SmartCompany

The administration was reported as voluntary on Australian
Securities and Investment Commission, the report notes.

Advance Metal Products is a New South Wales-based sheet metal
manufacturing family business launched in 1986.  The business,
which also trades under the names Bosco Storage Solutions and
Boscotek, has two engineering and manufacturing facilities and
approximately 150 employees.

RUTHERGLEN HOLIDAY: Quamby Owners Buy Holiday Retreat Facility
Cliff Sanderson at reports that Rob Sherrard and
Brett Godfrey, owners of QUAMBY, have purchased holiday retreat
Rutherglen Holiday Village from liquidators Pitcher Partners.

It has been confirmed in reports that Messrs. Godfrey and
Sherrard, Virgin Australia co-founders, were buyers of the
development following negotiations with liquidators. notes that Rutherglen is composed of a bistro,
bar, 20 motel suits, cafe, recreational and sporting facilities
and conference facilities that can accommodate up to 200 people.

According to the report, the two new Rutherglen owners made an
announcement that they had purchased the Tasmanian Walking
Company, the owner of the Bay of Fires Lodge walk and Cradle
Mountain Huts walk.  About a year and a half ago, the business
partners reportedly reopened Quamby Estate, the report says.


MODERN LAND: Moody's Assigns First-Time B2 CFR; Outlook Stable
Moody's Investors Service has assigned a first-time B2 corporate
family rating to Modern Land (China) Co., Ltd.

At the same time, Moody's has assigned a provisional (P)B2 senior
unsecured rating to its proposed USD notes.

The outlook for the ratings is stable.

The proceeds from the proposed bonds will be used to fund the
company's development of property projects and general working
capital needs.

Moody's will remove the provisional status of the rating for the
USD notes once Modern Land completes the bond issuance on
satisfactory final terms and conditions.

"Modern Land's B2 corporate family rating reflects the company's
successful track record of commercializing its concept of
comfortable and eco-friendly homes -- a niche market -- to
generate stable sales," says Lina Choi, a Moody's Vice President
and Senior Analyst.

Modern Land reported stable contracted sales of RMB2.3-2.8 billion
per annum for 2010-2012, helped by increasing recognition and
acceptance of its green homes in Beijing and provincial capital
cities, such as Taiyuan and Changsha. In all these locations, fast
economic growth has pushed up pollution and energy costs.

"The rating also considers Modern Land's small scale and its
exposure to market volatility as it needs to access more capital
and as it grows fast," says Choi, who is the lead analyst for
Modern Land.

To date, its operational scale has been limited to around RMB3
billion in contracted sales. It plans to expand out of its core
markets of Beijing and Shanxi Province, and enter Hunan and Hubei
provinces. In the last 5-6 years, it has expanded market coverage
to another 4 cities in 3 provinces, but most of these cities are
second- or third-tier with less advanced economies than Beijing.

Its small scale means sales volatility as it relies on the
performance of a few projects each year. Its new targeted
geographic markets also present execution risk as buyers have to
accept its product concept. All these factors can slow sales

"On the other hand, the rating also reflects the high
profitability associated with Modern Land's niche products," says

Its eco-friendly designs cater to demand for better air and water
quality, and therefore can command a unit pricing premium over
similar offerings in the same locations. In this way, it has
achieved good profit margins. Its gross profit margins before Land
Appreciation Tax were 43 - 44% for 2011 -- 2012.

Further driving its high profit margins is its low land costs.
Modern Land followed a very modest pace of development before its
IPO. Thus, it consumed its land bank slowly. It was able to keep
overall land costs low as selling prices rose over time.

Revenue recognized in 2012 and 2013 year to date is based on
saleable resources in Beijing, Taiyuan, Changsha and Nanchang,
where it bought its land parcels before 2010.

At June 30, 2013, its total land bank (excluding investment
properties and properties held for own use) amounted to 2,277,200
square meters. The average unit acquisition cost was RMB859 per
square meter, accounting for approximately 10% of the unit price
of current contracted sales. Such a situation favors high profit

But such an advantage could diminish as the company buys more land
in the current market of rising prices to support fast growth.

"Modern Land's pre-IPO and current credit profiles could change,
given its fast expansion, and could fall to therefore match the
mid-B rating level," says Choi.

The company deleveraged before its IPO and debt/total
capitalization fell from 65% in 2010 to 50% in 2012. Its key
credit metrics -- EBITDA/interest of about 4.8x and
debt/capitalization of 41% at June 30 2013 -- are strong compared
with those of its single-B peers.

But, Moody's notes that Modern Land will need to increase
borrowings to acquire more land and expand its scale. Under this
scenario of fast expansion, Moody's expects its credit metrics to
deteriorate, with EBITDA/interest at 2.5x -- 3.0x and adjusted
debt/total capitalization at 60% - 65%, which together match a
mid-B rating.

Despite the challenges in its expansion, its liquidity position is
adequate. It has a good track record of cash collections, equal to
90% from its contracted sales in the last few years. Its
unrestricted cash balance, after raising equity funding of RMB506
million in July 2013, amounted to RMB1.7 billion at July 31 2013.
This amount is more than sufficient to cover RMB234 million in
short-term debt.

Modern Land's senior unsecured bond rating is rated at the same
level as its corporate family rating, reflecting the fact that its
domestic subsidiaries' borrowings accounted for 12.5% of total
assets at July 31 2013 and Moody's expectation that this ratio
will remain below 15% in the coming 12-18 months.

The stable outlook reflects Moody's expectation that the company
will maintain adequate liquidity and will grow sales as planned.
Moreover, it will exercise flexibility in its expansion, adjusting
its plan in accordance with market conditions to avoid a material
deterioration in its credit profile.

Upward rating pressure could emerge over the medium term if Modern
Land establishes a track record of: (1) achieving planned sales in
new locations outside Beijing over the next 1-2 years; (2)
maintaining a reasonable cash balance consistently around 10-12%
of total assets; and (3) demonstrating strong financial discipline
in land acquisitions, and maintaining adjusted debt capitalization
below 60% on a sustained basis.

Downward rating pressure could emerge if (1) Modern Land's
liquidity and operating cash flow generation develop weaker than
anticipated, due in turn to declining contracted sales, aggressive
land acquisitions, or the emergence of more severe regulatory
controls on China's property sector; (2) there is a decline in
prices, slower-than-expected revenue recognition, or a fall in
profit margins, negatively affecting interest coverage and
financial flexibility; or (3) the company engages in material
debt-funded acquisitions.

In such a situation, balance sheet cash (including restricted and
unrestricted cash) could fall below 50% of short-term debt, and/or
its credit metrics could deteriorate with EBITDA/interest below
1.5x on a sustained basis.

The principal methodology used in this rating was the Global
Homebuilding Industry Methodology published in March 2009.

Modern Land was founded in 2000 in Beijing by Mr. Zhang Lei
(Chairman), a real estate developer based and principally focused
in China. Modern Land specializes in developing comfortable
housing units. It is one of the few early leaders in green and
eco-friendly lifestyles in China.

Modern Land was listed on the Hong Kong Stock Exchange in July
2013 (Stock Code: 1107). As of June 30 2013, the company had a
total land bank of 2,277,200 sqm in gross floor area (GFA) in
China (excluding investment properties held for own use), located
in Beijing, Jiujiang, Nanchang, Taiyuan, Changsha and Xiantao.

WUZHOU INT'L: Fitch Rates US$100MM Notes at 'B'
Fitch Ratings has assigned China-based commercial property
developer Wuzhou International Holdings Limited's (Wuzhou,
B/Stable) USD100m 13.75% notes due 2018 a final rating of 'B'. The
assignment of the final rating follows the receipt of documents
conforming to information already received and the final rating is
in line with the expected rating assigned on 16 September 2013.

The notes are rated at the same level as Wuzhou's senior unsecured
rating as they represent direct, unconditional, unsecured and
unsubordinated obligations of the company.

Key Rating Drivers

Small-scale property developer: Wuzhou's rating is constrained by
its small scale compared with Fitch-rated peers. With historical
contracted sales of CNY1.2bn, CNY2.1bn and CNY2.8bn in 2010-2012,
Wuzhou is still a small property developer in China. It faces
concentration risk with 55% of its contracted sales in H113
derived from Jiangsu province and seven out of 11 of its completed
projects in Wuxi. It remains to be seen whether Wuzhou can
successfully transfer its business model from Wuxi into other
cities in China. As the number of projects under management
increases across different provinces, it will be challenging for
the company to maintain a high-quality tenant mix in each project.

Volatile commercial property sales: As a commercial property
developer in China, Wuzhou is exposed to higher risk than
residential property developers. Commercial property sales mainly
target investment demand, which can be adversely affected during
economic downturns or in an environment of tighter liquidity.
Investment demand is also highly dependent on brand reputation,
which is susceptible to operating performance of existing
projects. In general, cash flow projection from property sales is
less predictable for commercial property developers, compared with
residential property developers.

Strong commercial sites limited: With a longer list of
requirements, including high foot traffic, easy accessibility and
high residents' income levels, commercial property sites with
strong development potential are harder to come by than
residential sites. Wuzhou's upcoming projects are mostly situated
in third-tier cities. While the company enjoyed low land cost
(typically a few hundred CNY/sqm), it faces the risk of whether
there will be enough consumption demand in third-tier cities to
support retail outlets in the projects.

Operational success in Wuxi: Wuzhou has completed two wholesale
markets and five mixed-use commercial complexes in Wuxi,
establishing a critical mass in its hometown. Wuzhou has been
successful in selling the majority (80%-90%) of its project space
on a strata-title basis and keeping the remainder for lease
income. The company actively manages the tenant mix for shop
buyers after the projects open and its properties enjoy an average
occupancy rate of above 90%. Capitalising on its success and
experience in Wuxi, Wuzhou is now expanding in the eastern,
central, south-western and north-eastern part of China. With a
quick churn-out business model, Wuzhou targets to grow its
contracted sales to CNY5bn in 2013 from CNY2.8bn in 2012. Wuzhou
recorded contracted sales of CNY2.8bn in the year to August 2013,
up 76% yoy.

After-sale tenant-mix management: Wuzhou differentiates itself
from other commercial property developers by providing after-sale
tenant-mix management and negotiating leases with prospective
tenants on behalf of shop owners. In return, Wuzhou charges shop
owners a commercial management service fee. The fee is equal to
100% of the rental value in the first three years of the lease and
then 8%-10% of the rental value in the fourth year onwards. If
Wuzhou can continue maintaining an optimal tenant mix and high
occupancy rates in its existing projects, it could enhance its
brand reputation and attract more buyers to its future projects.

Strong network of buyers: Wuzhou's founder, Mr. Shu Cecheng, was
in the trading and manufacturing business before turning to
property development in 2004. Mr. Shu has an extensive business
network, which offers Wuzhou a pool of potential tenants and shop
buyers, especially in wholesale markets. This is crucial to Wuzhou
as it relies heavily on project sales, which generate cash and
enable the company to replenish its land bank quickly.

Sufficient liquidity: Fitch expects Wuzhou to have sufficient
liquidity to cover its short-term debts. As at mid-2013, Wuzhou
had CNY1.8bn of cash (of which CNY377m was restricted cash and
pledged deposits) and CNY1.6bn in undrawn credit facilities. That
is more than enough to cover its CNY835m debt to be repaid in the
coming 12 months. However, Wuzhou's financial flexibility is
limited because all of its debt is secured debt. The company plans
to diversify its funding sources and reduce its reliance on
secured debt. Also, the company plans to reduce the proportion of
trust loans in its portfolio to less than 25% in the next one-two
years from 33% as of end-H113 to reduce its overall borrowing

Rating Sensitivities

Positive: Future developments that may collectively lead to
positive rating actions include:

- Annual contracted sales sustained above CNY8bn while
  maintaining current margins and credit metrics, and

- Increase in geographical diversification by establishing its
  presence in a greater number of provinces, and

- Satisfactory operating conditions for completed projects, in
  particular for those that have been open for more than three

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

- A significant reduction in annual contracted sales

- Deviation from the current fast churn-out business model

- Net debt/adjusted inventory being sustained above 40%
  (2012: 31%)

- EBITDA margin staying below 20% on a sustained basis (2012:

- Contracted sales/ total debt staying below 1.0x on a sustained
  basis (2012: 1.2x)

Headquartered in Wuxi in Jiangsu province, Wuzhou is a commercial
property developer focusing on specialised wholesale market and
multi-functional commercial complexes in the second- and third-
tier cities in China.


ARENE LIFE: CRISIL Assigns 'B-' Rating to INR140MM Loans
CRISIL has assigned its 'CRISIL B-/Stable' rating to the long-term
bank facilities of Arene Life Sciences Ltd.

   Facilities            (INR Mln)   Ratings
   ----------            ---------   -------
   Proposed Long-Term       10       CRISIL B-/Stable
   Bank Loan Facility
   Cash Credit              50       CRISIL B-/Stable

   Long-Term Loan           80       CRISIL B-/Stable

The rating reflects ALSL's modest scale of operations, weak
financial risk profile marked by high gearing, low networth and
weak debt protection metrics, and its working capital intensive
nature of operations. These rating weaknesses are partially offset
by extensive industry experience of its promoters'.

Outlook: Stable

CRISIL believes that ALSL will continue to benefit over the medium
term from its promoter's extensive industry experience and its
established relationship with customers and suppliers. The outlook
may be revised to 'Positive' if there is improvement in the
company's financial risk profile led by better-than-expected cash
accruals arising due to improvement in scale of operations and
profitability or fresh equity infusion. Conversely, the outlook
may be revised to 'Negative' if ALSL's financial risk profile
deteriorates, most likely because of a significant increase in its
working capital requirements or pressure on its profitability, or
larger than expected debt-funded capital expenditure resulting in
deterioration of financial risk profile.

Incorporated in 2004, ALSL is engaged in manufacturing of bulk
drugs intermediaries. Promoted by Mr. K. Satyanarayana Reddy and
associates, ALSL's manufacturing facility is located in Patancheru
(Medak Dist) in Andhra Pradesh.

ALSL, on a provisional basis, reported a net loss of INR38.7
million on net sales of INR455 million for 2012-13 (refers to
financial year, April 1 to March 31); it reported a net loss of
INR41.5 million on net sales of INR338 million for 2011-12.

BEE PATH: CRISIL Assigns 'BB-' Ratings to INR29.5MM Loans
CRISIL has assigned its 'CRISIL BB-/Stable/CRISIL A4+' ratings to
the bank facilities of Bee Path Castings (P) Ltd.

   Facilities            (INR Mln)   Ratings
   ----------            ---------   -------
   Long-Term Loan            4.5     CRISIL BB-/Stable

   Letter of Credit         30.0     CRISIL A4+

   Bank Guarantee            5.5     CRISIL A4+

   Cash Credit              25.0     CRISIL BB-/Stable

The ratings reflect the extensive experience of BCPL's promoters
in the steel long-products industry and its above-average
financial risk profile, marked by moderate net worth and debt
protection metrics. These rating strengths are partially offset by
the company's modest scale of operations in the highly fragmented
steel long-products industry, with geographical concentration in
its revenue profile.

Outlook: Stable

CRISIL believes that BCPL will continue to benefit over the medium
term from its promoters' extensive industry experience. The
outlook may be revised to 'Positive' if BCPL significantly
increases its scale of operations while maintaining its margins,
resulting in greater than expected cash accruals. Conversely, the
outlook may be revised to 'Negative' if the company's relationship
with its key customer deteriorates, leading to a decline in sales
or profitability, or if it undertakes a large, debt-funded capital
expenditure programme, resulting in deterioration in its financial
risk profile.

BCPL was incorporated in 2002, promoted by Mr. Palakkandy
Usmankoya Moidenkoya, Mr. Mujeeb Rehman Charupadikal, and Mrs. P
Mumtaz. The company manufactures mild steel ingots, cold twisted
bars and thermo-mechanically-treated bars.

BCPL reported a profit after tax (PAT) of INR18 million on net
sales of INR567 million for 2011-12 (refers to financial year,
April 1 to March 31), against a PAT of INR2 million on net sales
of INR496 million for 2010-11.

BEMCO HYDRAULICS: CRISIL Cuts Ratings on INR350MM Loans to 'D'
CRISIL has downgraded its ratings on the bank facilities of Bemco
Hydraulics Ltd to 'CRISIL D/CRISIL D' from 'CRISIL C/CRISIL A4'.

   Facilities            (INR Mln)   Ratings
   ----------            ---------   -------
   Bank Guarantee            75      CRISIL D (Downgraded from
                                     'CRISIL A4')

   Bank Guarantee            57.5    CRISIL D (Downgraded from
                                     'CRISIL A4')

   Cash Credit               60.0    CRISIL D (Downgraded from
                                     'CRISIL C')

   Letter of Credit          30.0    CRISIL D (Downgraded from
                                     'CRISIL A4')

   Letter of Credit           2.5    CRISIL D (Downgraded from
                                     'CRISIL A4')

   Proposed Long-Term        105     CRISIL D(Downgraded from
   Bank Loan Facility                'CRISIL C')

   Term Loan                  20     CRISIL D(Downgraded from
                                     'CRISIL C')

The rating downgrade reflects Bemco's continuously overdrawn cash
credit account for more than 30 days, and delays in servicing its
debt over several months through August 2013; this was because of
the company's weak liquidity. There have also been multiple
instances of devolvement of letters of credit. Bemco's weak
liquidity is driven by its large working capital requirements.

Bemco has a weak financial risk profile, marked by high gearing
and below-average debt protection metrics, large working capital
requirements, and a modest scale of operations. However, the
company benefits from its niche product profile and its promoters'
extensive industry experience.

Bemco was originally incorporated as New Bemco Engineering
Products Company Ltd in 1957; the name was changed in 1976. The
company manufactures hydraulic presses and equipment that are used
in the automobile, defence, railways, and other heavy engineering

HOWRAH GASES: CRISIL Cuts Ratings on INR140MM Loans to 'BB+'
CRISIL has downgraded its ratings on the bank loan facilities of
Howrah Gases Ltd to 'CRISIL BB+/Stable/CRISIL A4+' from 'CRISIL
BBB-/Negative/CRISIL A3'.

   Facilities          (INR Mln)   Ratings
   ----------          ---------   -------
   Bank Guarantee        28.5      CRISIL A4+ (Downgraded from
                                   'CRISIL BBB-/Negative')

   Cash Credit          140.0      CRISIL BB+/Stable (Downgraded
                                   from 'CRISIL A3')

The ratings downgrade reflect CRISIL's belief that HGL's business
risk profile will remain weak over the medium term marked by
significantly elongated working capital cycle and pressure on
operating margins. Because of the downturn in the sponge iron
industry, HGL is facing significant stretch in its debtor cycle
reflected in estimated debtor of 187 days as on March 31, 2013 as
against 100 days, a year earlier. The company's debtors more than
six months constitute about 34 per cent of the total debtors as on
March 31, 2013. CRISIL believes that HGL's working capital cycle
will remain stretched over the medium given the weak industry
environment. CRISIL also believes that HGL's operating margins
will remain under pressure because of increasing input prices; its
operating margins have been on a declining trend for last four
years ended March 31, 2013. The company's estimated operating
margin has declined to 5.8 per cent for 2012-13 (refers to
financial year, April 1 to March 31) from historical levels of 9
to 11 per cent. HGL's return on capital employed has remained low
at less than 3.50 per cent for 2012-13 because of large working
capital requirements, declining operating margins and non-
operational ingot unit.

CRISIL's ratings on the bank facilities of Howrah Gases Limited
(HGL) reflect HGL's moderate financial risk profile, marked by low
gearing and moderate debt-protection metrics, and its promoters'
extensive industry experience. These rating strengths are
partially offset by HGL's modest scale of operations, exposure to
intense competition in the steel industry and working capital
intensive operations.

Outlook: Stable

CRISIL believes that the HGL's will maintain its moderate
financial risk profile over the medium term, marked by its large
net worth and low bank debt. The outlook may be revised to
'Positive' if HGL's working capital cycle improves materially and
its net cash accruals improve significantly primarily led by
improvement in operating margins. Conversely, the outlook may be
revised to 'Negative' if there is deterioration in the company's
debt-protection metrics or increase in support to its associate
concerns materially impacting its liquidity profile.

Incorporated in 1985, HGL is promoted by the Kolkata-based Agrawal
family. The company initially manufactured only industrial and
medical oxygen and subsequently started manufacturing sponge iron
and ingots. Currently, HGL manufactures mild steel sponge iron.

For 2012-13, HGL reported, on provisional basis, a profit after
tax (PAT) of INR8.8 million on net sales of INR853 million. For
2011-12, the company reported a PAT of INR0.16 million on net
sales of INR628 million.

INDIAN BANK: Fitch Lowers LT Issuer Default Rating to 'BB+'
Fitch Ratings has downgraded Indian Bank's Long-Term (LT) Issuer
Default Rating (IDR) to 'BB+' from 'BBB-' and its Viability Rating
(VR) to 'bb+' from 'bbb-'.

Simultaneously, Fitch has downgraded Punjab National Bank's (PNB)
and Bank of Baroda's (BOB) VR by one notch to 'bb+' while
affirming their LT IDRs at 'BBB-'.

The agency has also affirmed the LT IDRs of State Bank of India
(SBI), Canara Bank (Canara), IDBI Bank (IDBI), Bank of Baroda New
Zealand (BOB NZ), ICICI Bank (ICICI) and Axis Bank (Axis) at 'BBB-
', and the VRs of SBI, ICICI and Axis at 'bbb-', Canara at 'bb+'
and IDBI at 'bb'.

The LT IDRs of SBI, BOB, PNB, Canara, IDBI and ICICI are at their
Support Rating Floors (SRF), which is driven by their systemic
importance as reflected in their support rating (SR) of '2'. The
IDRs of SBI, ICICI and Axis are also driven by their stand-alone
credit strength, which in the case of SBI and ICICI is currently
at the same level as their SRF; Axis has a lower SRF of 'BB+' and
SR of '3'.

Following the rating action, the Outlook on the IDRs for the nine
banks is Stable.

The rating actions follows a review of the Indian banking sector
against the backdrop of sharp deceleration in economic growth and
Fitch's expectation of a further deterioration in asset quality.
The economic slowdown is likely to be more protracted than Fitch
initially expected because of the currency volatility in recent
months and persistent high inflation. Fitch expects that asset
quality at Indian banks (particularly state-owned ones) will
worsen, resulting in a larger amount of stressed assets than
initially forecast and the amount would peak only in FY15 (fiscal
year ending March 2015) rather than this current financial year.

Given the build-up of stressed assets (NPL + restructured loans)
at Indian banks (10% of loans at end-June 2013, with NPLs at 3.9%
of loans), the equity buffer at many state-owned banks is looking
increasingly stretched compared with those of their private peers,
despite regular capital injections from the government. Pressures
are also building on internal capital generation as revenue growth
slows due to lower loan growth, squeezed margins from higher
funding costs and higher provisioning requirements. The outlook
for the agriculture sector has improved following good monsoons,
which should provide some cushion to the expected decline in

Fitch's stress tests show that most state-owned banks are more
sensitive to a further deceleration in economic growth due to
their greater exposure to the infrastructure and cyclical sectors
as well as their greater proportion of foreign-currency lending.
Private banks, though not unaffected, have showed superior
performance, with earnings and capital buffers at levels
significantly higher than state-owned ones.

These issues will be discussed in detail in the Fitch's
forthcoming "2014 Outlook: Indian Banks Report".

Key Rating Drivers
State-owned banks have seen a rise in stressed assets - NPLs at
the 10 largest Indian banks have increased at a compounded growth
rate of about 40% over FY10-FY13. The increase in restructured
loans has been sharper, rising by more than 50% for the 10 largest
state-owned banks in FY13 compared with a 36% rise in NPLs. In
comparison, NPLs at the country's three largest private banks rose
by 8% during FY13 while restructured loans increased by 40%.

PNB has seen a sharp increase in its stressed assets, which stood
at close to 15% of loans at FY13 (FY12: around 11%), the highest
among Fitch-rated state-owned banks. Fitch expects the proportion
of stressed assets to rise further. PNB's stressed assets stand at
134% of its equity. The downgrade to PNB's VR reflects its already
weak equity position and the expected further weakening of its
asset quality profile from current levels, which means PNB would
take longer to bounce back even under a cyclical recovery.
Notwithstanding its funding and profitability strength, Fitch
maintains a negative bias on PNB's VR.

While the ratios of stressed assets to loans at BOB and Indian
Bank are currently at 8.2% (FY13) and 11.5% (Q1 of FY14),
respectively, it is likely that more loans will need to be
restructured because of the banks' exposures to infrastructure and
cyclical sectors.

In addition, Fitch estimates that 50% of BOB's loan book is
foreign-currency denominated (both onshore and offshore loans),
which could be a greater source of instability to its credit
profile given the recent currency volatility. BOB's stressed
assets are equivalent to 85% of equity. While this is a better
buffer than PNB's, this is unlikely to be maintained given the
level of deterioration that has taken place. BOB's gross NPLs have
risen 84% in April-June 2013 yoy while Indian Bank's has increased
140% over the same period.

BOB NZ is a fully-owned subsidiary of BOB and its IDR is driven by
expectations of high support from its parent, BOB, due to the
various explicit and implicit linkages with the same.

SBI's asset quality has also deteriorated, with NPLs rising at a
compounded rate of 38% between FY10-FY13 (+30% yoy in April-June
2013). However, its VR affirmation at 'bbb-' factors in its
strength in areas such as franchise, funding and income
diversification, which other state-owned banks will find extremely
hard to replicate. Although SBI's asset quality is likely to
further deteriorate and its equity buffer is less of a strength
relative to similarly rated peers, these are balanced by its
higher NPL coverage (FY13: 57%) and composition of stressed
assets. The greater share of NPLs in its total stressed loan book
(FY13: 7.7% of total loans, NPLs at 4.8% of total loans) partly
stems from the management's philosophy of selective restructuring.

The VR affirmations for Canara at 'bb+' (downgraded from 'bbb-' in
November 2012) and IDBI at 'bb' already factor in the structural
weaknesses on the funding side and their business model. The two
banks have been wholesale-focused, which for IDBI partly stems
from its legacy as a development finance institution.
Profitability, as a result, has traditionally been on the lower
side for both and this has been further compressed in recent times
due to worsening asset quality. Canara and IDBI reported total
stressed assets of 10% (NPL ratio: 2.6%) and 9% (NPL ratio: 3.2%)
respectively, though the Canara's specific provision cover is low
at 15% compared with 50% for IDBI at end-FY13. However, potential
for further restructuring is deemed higher for IDBI given its
significant concentration to project financing, which is partly
reflected in their one-notch VR differential.

The VR affirmations for ICICI and Axis at 'bbb-' mainly stem from
their stable and consistent performance on various aspects of the
credit metrics, but particularly in asset quality, capitalisation
and their respective franchises. At ICICI and Axis, stressed
assets account for less than a quarter of their equity.

Among the two, Axis manages its capital relatively tightly, though
it raised USD1bn of fresh capital early in calendar 2013 via an
equity sale. In FY13, ICICI and Axis reported Tier 1 capital
ratios of 12.8% (FY12: 12.7%) and 12.2% (FY12: 9.5%) respectively.
Among the large private banks, ICICI and Axis's stressed assets
ratios are higher at 5.2% and 3.4% respectively, although overall
asset quality has been largely stable. While ICICI's gross NPL
ratio has steadily declined since 2008, provision cover has been
robust for both in the range of 70%-80%.

ICICI and Axis have higher exposure to the infrastructure sector,
and they face the prospect of an increase in asset restructuring
as economic growth slows and commercial start dates for projects
are pushed back. However, Fitch notes that they are able to
withstand stress at current equity levels - even under
considerable stress conditions; ICICI and Axis are expected to
have common equity Tier 1 above 8%.

Rating Sensitivities - IDRs and VRs
IDRs of SBI, BOB, PNB, Canara, IDBI, IB and ICICI are at the same
level as their SRFs, and will not be affected by a downgrade of
their VRs, unless considerations underpinning the 'BBB-' SRF also
weaken. However, a downgrade of India's sovereign rating (BBB-
/Stable) will also trigger a downgrade of all IDRs, which are
currently at the same level as the sovereign. Likewise, a change
in the sovereign's outlook will also lead to a revision of the
outlook on banks' IDRs. Axis's IDR is solely driven by its VR
(which is higher than its SRF) and a downgrade to its VR (though
unlikely in the near-term) will also lead to a downgrade to its

The VRs for the rated banks factor in some amount of incremental
deterioration to asset quality and earnings capability. However,
higher-than-expected deterioration in the above variables not
matched by adequate capital buffers could make a case for further
downgrade of the VRs for banks on a relatively weaker footing.
While most state-owned banks are expected to see a rise in
stressed assets, the negative bias on PNB's VR largely stems from
the potential additions to its already high stock of stressed
assets, which could diminish its buffers by more than the expected
levels. Canara's NPL ratio has been relatively range-bound over
the last four quarters, but its large funded infrastructure book
could significantly add to its existing stock of stressed assets.
However, Canara has made progress in consolidating its balance
sheet, including in funding, which adds some cushion to its VR.

BOB and IB, which have relatively better capital and earnings
strength, have lower downside risk to their VRs. However, given
their credit concentrations in the infrastructure and cyclical
sectors (including BOB's higher foreign-currency exposure), their
asset quality will remain under pressure.

SBI, the only state-owned bank at 'bbb-' VR, will also experience
a further rise in NPLs and a case for a VR downgrade could be made
if capital and earnings buffers weaken significantly from expected

Compared to state-owned banks, the likelihood of downside to the
VR of private banks is viewed to be relatively low in the near
term, given their robust performance and available capital and
earnings buffers, which makes them more resilient to stress than
their state-owned peers.

For banks in the 'bb' VR category, an upside to the VR is unlikely
but would hinge on the ability of the banks to successfully
consolidate their asset books while simultaneously building higher
capital and earnings buffers. SBI's VR could be upgraded only if
the sovereign is upgraded, though it is unlikely in the near-term.

The senior debt ratings are linked to the banks' IDRs and these
will change if the IDRs vary. The ratings of the Tier 1
subordinated bonds and Upper Tier 2 bonds are notched off the VR
and are consistent with the approach taken for other similar
performing securities based on Fitch's criteria.

Rating Sensitivities - SRs and SRFs
The SRs and SRFs are determined by the agency's assessment of the
government's propensity and ability to support a bank determined
by its relative size and systemic importance. A change in the
government's ability to provide extraordinary support due to a
change in the sovereign ratings would affect the SRs and SRFs. The
SRs and SRFs will also be impacted by any change in the
government's willingness to extend timely support.

The rating actions are as follows:

- Long-Term IDR affirmed at 'BBB-'; Outlook Stable
- Short-Term IDR affirmed at F3'
- Viability Rating affirmed at 'bbb-'
- Support Rating affirmed at '2'
- Support Rating Floor affirmed at 'BBB-'
- USD5bn MTN programme affirmed at 'BBB-'
- USD400m perpetual tier 1 bonds affirmed at 'B'

- Long-Term IDR affirmed at 'BBB-'; Outlook Stable
- Short-Term IDR affirmed at 'F3'
- Viability Rating downgraded to 'bb+' from 'bbb-'
- Support Rating affirmed at '2'
- Support Rating Floor affirmed at 'BBB-'

- Long-Term IDR affirmed at 'BBB-'; Outlook Stable
- Short-Term IDR affirmed at 'F3'
- Viability Rating downgraded to 'bb+' from 'bbb-'
- Support Rating affirmed at '2'
- Support Rating Floor affirmed at 'BBB-'
- USD500m senior notes under MTN programme affirmed at 'BBB-'
- USD350m senior notes under MTN programme affirmed at 'BBB-'
- USD300m upper tier 2 notes under MTN programme affirmed at 'B+'

- Long-Term IDR affirmed at 'BBB-'; Outlook Stable
- Support Rating affirmed at '2'

- Long-Term IDR affirmed at 'BBB-'; Outlook Stable
- Short-Term IDR affirmed at 'F3'
- Viability Rating affirmed at 'bb+'
- Support Rating affirmed at '2'
- Support Rating Floor affirmed at 'BBB-'
- USD2bn MTN programme affirmed at 'BBB-'
- USD350m of senior notes under MTN programme affirmed at 'BBB-'
- USD250m upper tier 2 notes under MTN programme affirmed at 'B+'

- Long-Term IDR affirmed at 'BBB-'; Outlook Stable
- Short-Term IDR affirmed at 'F3'
- Viability Rating affirmed at 'bb'
- Support Rating affirmed at '2'
- Support Rating Floor affirmed at 'BBB-'

Indian Bank
Long-Term IDR downgraded to 'BB+' from 'BBB-'; Outlook revised to
Short-Term IDR downgraded to 'B' from 'F3'
Viability Rating downgraded to 'bb+' from 'bbb-'
Support Rating affirmed at '3'
Support Rating Floor affirmed at 'BB+'

- Long-Term IDR affirmed at 'BBB-'; Outlook Stable
- Short-Term IDR affirmed at 'F3'
- Viability Rating affirmed at 'bbb-'
- Support Rating affirmed at '2'
- Support Rating Floor affirmed at 'BBB-'
- USD2.9bn senior notes affirmed at 'BBB-'
- USD1.5bn upper tier 2 bonds affirmed at 'B+'

- Long-Term IDR affirmed at 'BBB-'; Outlook Stable
- Short-Term IDR affirmed at 'F3'
- Viability Rating affirmed at 'bbb-'
- Support Rating affirmed at '3'
- Support Rating Floor affirmed at 'BB+'
- Foreign currency senior debt affirmed at 'BBB-'
- EUR3bn MTN programme affirmed at 'BBB-'
- USD1.6bn senior unsecured notes affirmed at 'BBB-'

INTER PUBLICITY: CRISIL Reaffirms 'BB-' Rating on INR310MM Loans
CRISIL's rating on the bank facilities of Inter Publicity Pvt Ltd
continues to reflect IPPL's established market position in the
advertising agency space, particularly in the financial services
niche, and its promoters' extensive industry experience. These
rating strengths are partially offset by IPPL's weakened business
risk profile marked by declining operating profitability, and
below-average financial risk profile on account of losses, leading
to high dependence on promoters' support.

   Facilities       (INR Mln)   Ratings
   ----------        ---------   -------
   Cash Credit         150      CRISIL BB-/Negative (Reaffirmed)
   Term Loan           160      CRISIL BB-/Negative (Reaffirmed)

Outlook: Negative

CRISIL believes that IPPL's financial risk profile will remain
constrained over the medium term due to decreased advertising
spend by its key customers. The rating may be downgraded if IPPL's
customer profile weakens, thereby adversely affecting its
profitability, or if the promoters' funding is untimely, leading
to pressure on the company's working capital management.
Conversely, the outlook may be revised to 'Stable' if IPPL
improves its sales and operating profitability, thereby improving
its financial risk profile, particularly its liquidity.


On a provisional basis, IPPL reported revenue of INR922.4 million
during 2012-13 (refers to financial year, April 1 to March 31)
against INR860.3 million in 2011-12, on account of addition of
customers. The company's operating profitability declined to
around 1.0 per cent in 2012-13 from 2.0 per cent in 2011-12,
mainly because of a large pool of customers being added at a lower
commission than previously. CRISIL expects the addition of
customers to support IPPL's profitability and revenue growth over
the medium term.

The company's financial risk profile remains below average on
account of losses suffered during the last two years. The company
witnessed cash losses of around INR26 million in 2012-13 and
around INR20 million in 2011-12, which lead to some erosion of
capital. The company has depended on support from its promoters to
fund operations; CRISIL believes that IPPL will continue to
receive support from its promoters, for funding working capital,
as well as debt and interest payment requirements. The promoters
plan to infuse unsecured loans or equity of INR150 million into
the company in the near term, which is expected to support the
company's liquidity and substantially reduce its interest expenses
over the medium term. IPPL's bank limit utilisation remained
moderate, at an average of 87 per cent, during the 12 month
through July 2013.

IPPL's working capital cycle has lengthened, with gross current
assets of around 163 days as on March 31, 2013; year-end balances
of assets were higher also on account of 40 per cent of the sales
being generated during the last quarter of 2012-13. CRISIL
believes that IPPL's working capital requirements will remain
large on account of the company's low bargaining power with
creditors; the company has a stringent payment cycle of 60 days
and has debtors of over 90 days, which increase its dependence on
external funding for its working capital requirements. Its GCAs
are expected at 130 to 150 days over the medium term.

Established in 1964, IPPL is a full-service advertising and
communication agency, which offers services such as market
research, strategy planning, concept development, design and
execution, and media selection and buying.

IPPL, on a provisional basis, reported a loss of INR46.3 million
on net sales of INR922.4 million for 2012-13, against a loss of
INR43.2 million on net sales of INR860.3 million for 2011-12.

JRE VALVES: CRISIL Reaffirms 'B' Ratings on INR101.6MM Loans
CRISIL's rating on the bank facilities of JRE Valves & Pumps Pvt
Ltd continue to reflect JRE's modest scale operations, with
geographic and customer concentration in its revenue profile.

   Facilities         (INR Mln)   Ratings
   ----------         ---------   -------
   Export Packing       3.7       CRISIL B/Stable (Reaffirmed)

   Term Loan           97.9       CRISIL B/Stable (Reaffirmed)

The ratings also factor in the company's large working capital
requirements and continuous capital expenditure (capex), leading
to stretched liquidity, and its susceptibility to volatility in
raw material prices and in foreign exchange rates. These rating
weaknesses are partially offset by JRE's moderate financial risk
profile, marked by moderate gearing and debt protection metrics,
supported by its healthy operating profitability and the extensive
experience of its promoters in the industry.

Outlook: Stable

CRISIL believes that JRE will continue to benefit over the medium
term from the extensive industry experience of its promoters. The
outlook may be revised to 'Positive' if JRE significantly scales
up its revenues while maintaining its profitability, leading to
higher-than-expected cash accruals with consequent improvement in
its liquidity. Conversely, the outlook may be revised to
'Negative' if JRE's financial risk profile, particularly its
liquidity, deteriorates, most likely because of larger-than-
expected working capital requirements, lower cash accruals, or
time and cost overruns in its ongoing capex programme.

JRE, set up in 2004, manufactures castings and sub-assemblies used
in the valve and pump industry. The company's unit near Coimbatore
(Tamil Nadu) has a capacity to manufacture over 1200 tonnes of
castings per annum; it also has a small machining capacity to
manufacture valve sub-assemblies. The company derives almost its
entire revenues from exports, mainly to Germany and the US. During
2012-13 (refers to financial year, April 1 to March 31), JRE's
Indian promoters sold their entire stake to their foreign partner,
Thomas Kluas of Kluas Union GmBH.

JRE is currently undertaking a large capex programme to set up a
new unit to augment its casting capacity; the unit is expected
start commercial operations during 2013-14.

JRE reported a profit after tax (PAT) of INR19 million on an
operating income of INR298 million for 2012-13, against a PAT of
INR18 million on an operating income of INR284 million for 2011-

CRISIL's rating on the long-term bank facility of Polygon
Chemicals Pvt Ltd continues to reflect the company's
susceptibility to volatility in raw material prices and intense
industry competition.

   Facilities         (INR Mln)   Ratings
   ----------         ---------   -------
   Cash Credit            80      CRISIL BB/Stable

These rating weaknesses are partially offset by PCPL's above-
average financial risk profile, marked by low gearing and
satisfactory debt-protection metrics, and established client base.

Outlook: Stable

CRISIL believes that PCPL will continue to benefit from its
established clientele and sufficient cash accruals, over the
medium term. The outlook may be revised to 'Positive' if PCPL
substantially scales up its operations, while maintaining its
financial risk profile. Conversely, the outlook may be revised to
'Negative' if the company's profitability declines materially or
if its financial risk profile deteriorates because of a stretch in
working capital requirements or larger-than-expected debt-funded
capital expenditure.

Set up by Mr. Kunwar Singh Panwar and Mr. Vishwas Giridhar Patil
in 1999, PCPL manufactures construction chemicals. The company
also manufactures specialty chemicals for water treatment and oil
processing. PCPL also exports bitumen membrane to Saudi Arabia.

SONIC BIOCHEM: CRISIL Reaffirms 'BB+' Ratings on INR983.9MM Loans
CRISIL's ratings on the bank facilities of Sonic Biochem
Extractions Ltd continue to reflect SBEL's established market
position, diverse clientele and product profile, and wide
geographic reach.

   Facilities        (INR Mln)   Ratings
   ----------        ---------   -------
   Bank Guarantee       25       CRISIL A4+ (Reaffirmed)

   Cash Credit         605       CRISIL BB+/Stable (Reaffirmed)

   Letter of Credit    155       CRISIL A4+ (Reaffirmed)

   Long-Term Loan      378.9     CRISIL BB+/Stable (Reaffirmed)

These rating strengths are partially offset by SBEL's below-
average financial risk profile, marked by a high gearing and
inadequate debt protection metrics, and exposure to risks inherent
in the agricultural-commodity-related businesses.

Outlook: Stable

CRISIL believes that SBEL will continue to benefit over the medium
term from its diverse customer base and its product profile and
its wide geographical reach. The outlook may be revised to
'Positive' if the company improves its capital structure through
significant equity infusion by its promoters, or generates
significantly higher-than-expected accruals. The outlook may be
revised to 'Negative' if SBEL fails to ramp up its operations as
envisaged, or records decline in its profitability or
unprecedented lengthening of its cash cycle.

SBEL is part of the Indore (Madhya Pradesh)-based Matlani group of
companies, which has interests in real estate development and soya
bean products. The group companies are headed by Mr. Girish
Matlani. SBEL manufactures more than 10 products from non-
genetically-modified soya bean, including soya flour, soya oil,
texturised soya protein, lecithin liquid & powder and tocopherol.
The company has four manufacturing units: two in Indore (Pithampur
and Pithampuar SEZ), one in Mandideep, and one in Mandsaur (Madhya
Pradesh). SBEL has soya extraction plants in Mandideep and
Mandsaur, which manufacture soya flour, flakes, soya textured
protein, and crude soya oil from soyabean seeds The Indore plants
manufacture tecopherol, lecithin liquid, lecithin powder, choline
from crude lecithin and soya flour, and badi-textured protein from
soya grits.

SPIRE INDUSTRIES: CRISIL Reaffirms D Ratings on INR256.5MM Loans
CRISIL's rating on the bank facilities of Spire Industries Pvt Ltd
continues to reflect instances of delay by Spire in servicing its
debt; the delays have been caused by the company's weak liquidity.

   Facilities            (INR Mln)   Ratings
   ----------            ---------   -------
   Rupee Term Loan          78.7     CRISIL D (Reaffirmed)

   Proposed Long-Term      177.8     CRISIL D (Reaffirmed)
   Bank Loan Facility

Spire also has a small scale of operations, and a weak financial
risk profile marked by small net worth, high gearing, and weak
debt protection metrics. However, Spire benefits from its
promoter's extensive experience in the forging industry.

Spire was set up in 2007 by Mr. Nagin Doshi. The company
manufactures forgings at its plant in Halol near Baroda (Gujarat)
and caters to a wide array of end-user industries, including the
capital goods, automobiles, and infrastructure industries.

XPLORE INFRA: CRISIL Downgrades Rating on INR130MM Loan to 'D'
CRISIL has downgraded its rating on the bank facilities of Xplore
Infrastructure Pvt Ltd to 'CRISIL D' from 'CRISIL B/Stable'.

   Facilities         (INR Mln)   Ratings
   ----------         ---------   -------
   Cash Credit          130       CRISIL D

The downgrade reflects XIPL's consistently overdrawn cash credit
limits by more than 30 days, due to stretched liquidity, resulting
from a delay in execution of its ongoing project.

The rating also reflects XIPL's exposure to risks associated with
the timely implementation and the subsequent offtake of its
ongoing project in Kolkata (West Bengal) and weak financial risk
profile These rating weaknesses are offset by the proximity of
XIPL's first information technology (IT) and IT enabled services
in the IT hub of Kolkata.

XIPL was incorporated in 2007. The company is a part of the
Kolkata-based Ganges Jute group, promoted by Mr. Rohit Poddar of
the Poddar business family. XIPL has entered into a joint
development agreement with Xplore Tech Services Pvt Ltd (land
owner) to develop Xplore Tech Park, a commercial complex, likely
to be a LEED Gold rated 'Green Building'.


* SOUTH KOREA: Corporate Bankruptcies Drop to 85 in August
Yonhap News Agency reports that the number of corporate
bankruptcies declined in August from the previous month on an
absence of a one-off factor and the economic recovery, the central
bank said.

According to the report, Bank of Korea (BOK) said the number of
companies that went belly up totaled 85 in August, down from 101
tallied in the previous month.

In July, corporate failures hit the highest level since January on
a one-off factor as the final two days of June were on a weekend,
making clearance of promissory notes defer to July, the report

The default rate of corporate bills -- bonds, checks and
promissory notes -- reached 0.1 percent last month, down from 0.14
percent in July, adds Yonhap.

N E W  Z E A L A N D

BEN NEVIS: Ordered to Pay Back-Taxes or Face Liquidation
Paul McBeth at NZN reports that companies associated with the
Trinity forestry scheme have been ordered to pay NZ$2.43 million
in 15-year-old back-taxes and penalties, or face potential

NZN relates that the Ben Nevis and Bristol forestry ventures
failed in their attempt to strike out demands by the Inland
Revenue Department relating to unpaid tax from 1998 and subsequent

According to the report, the judgment of Associate Judge John
Faire in the Auckland High Court was published on the Ministry of
Justice's website this week.

He ordered Bristol pay NZ$819,000 and Ben Nevis pay NZ$1.61
million within 10 working days of the ruling, otherwise the tax
department could apply to liquidate the companies, NZN relays.

NZN notes that the debts arose from tax deductions claimed by the
companies in the 1997 and 1998 tax years, which were then
attributed to their shareholders.

Associate Judge Faire rejected a claim that there was still a
dispute as to whether the debt was due, saying that would
undermine earlier judgments on the case, adds NZN.

CHORUS LTD: ASX, ASIC Asked to Probe Insolvency Speculation
Ongoing speculation of a risk that Chorus Ltd may become insolvent
has led New Zealand's Coalition for Fair Internet Pricing to ask
the Australian Securities Exchange (ASX) and the regulator, the
Australian Securities & Investments Commission (ASIC), to inquire
into the company.

The Prime Minister of New Zealand, Rt Hon. John Key, told
Parliament on Sept. 17, 2013, that his government has received
information from Chorus and its Chairman, Sue Sheldon, and the
country's Ministry for Business, Innovation and Employment (MBIE),
that indicated "there is a chance Chorus will go broke" if a
Commerce Commission draft determination on copper broadband
pricing stands.

The comments in Parliament follow more than four days of
conflicting statements about Chorus' financial viability by its
Chief Executive, Mark Ratcliffe, the Prime Minister and the
Minister for Communications & Information Technology, Hon. Amy

On September 19, the coalition launched a campaign against a
proposal in a discussion document for the Cabinet to take over the
regulatory function for broadband pricing from the Commerce
Commission and to align the price of copper and fibre broadband
connections to inflate Chorus' revenues by approximately NZ$600
million over six years above the level deemed fair in the Commerce
Commission draft determination.

In response to the campaign launch, the Prime Minister told
national television on September 20: "If the Commerce Commission
ruling stands there is a chance Chorus will go broke."

Media were unable last week to establish the information on which
the Prime Minister based his comments.

On national television over the weekend, Mr. Ratcliffe would not
endorse the Prime Minister's comments but said there were "some
really challenging scenarios" if the draft Commerce Commission
recommendation was accepted.

While denying his company had lobbied the government,
Mr. Ratcliffe said it had "present[ed] a range of our views" on
copper to ministers and officials.

On Monday, again on national television, the Prime Minister would
not repeat his suggestion Chorus could go broke but said the draft
Commerce Commission recommendation would put "pressure" on Chorus.

However, in Parliament on September 17, the Prime Minister said:
"I stand by my original statement which is basically that the
Commerce Commission ruling states there is a chance Chorus will go

When asked if his concerns about Chorus' finances were based on
any information not already in the public domain, the Prime
Minister said: "Advice was provided to Cabinet by officials based
on commercial-in-confidence discussions between Chorus and MBIE

The Prime Minister also confirmed some of the commercial-in-
confidence information had been conveyed to him in a phone
conversation with Ms Sheldon in December last year, telling
Parliament: "The Chairman [Ms Sheldon] gave me an indication of
her thinking about the impact that would take place, and that gave
me some understanding of the issues that [Chorus] would face."

Minister Adams was also reported yesterday as backing up the Prime
Minister's concerns saying: "You have to say it's not outside the
realms of possibility they could have serious impacts on their

However, Minister Adams appeared to have no knowledge of any
commercial-in-confidence advice from officials, saying: "What
we've seen is the stuff that's absolutely in the market already."

A spokeswoman for the Coalition for Fair Internet Pricing, Sue
Chetwin, also Chief Executive of Consumer NZ, said: "We continue
to be concerned that there may be information circulating in
Wellington, as the Prime Minister has confirmed, about the
financial viability of Chorus Ltd under the Commerce Commission's
draft determination that is not available to its shareholders or
to the broader market.

"We have already asked the New Zealand Exchange (NZX) and the New
Zealand regulator, the Financial Markets Authority (FMA), to seek
clarification from Chorus, including whether Chorus should have
disclosed this information to the market.

"Given Chorus is also listed on the ASX, we have also asked that
exchange and ASIC to undertake similar inquiries."

Ms. Chetwin said shareholders and the broader market needed the
information on which the Prime Minister, Minister Adams and
Mr. Ratcliffe were basing their comments to be made publicly
available for independent analysis.

She noted that Chorus made a net profit of NZ$171 million last
year, paid NZ$95 million in dividends to its shareholders and its
shares closed at NZ$2.87 on September 17.

"On the face of it, this does not look like a company the market
thinks has a chance of going broke, or that is facing challenging
scenarios, or that might come under financial pressure," Ms.
Chetwin said.

The Coalition for Fair Internet Pricing was founded by Consumer
NZ, InternetNZ, and the Telecommunication Users Association of New
Zealand (TUANZ) and is supported by CallPlus and Slingshot, the
Federation of Maori Authorities, Greypower, Hautaki Trust,
KiwiBlog, KLR Holdings, National Urban Maori Authorities, New
Zealand Union of Students' Associations, Orcon, Rural Women, Te
Huarahi Tika Trust and the Unite Union.

Chorus Ltd -- is a telecommunications
utility provider. The Company provides services, such as network
access services, property co-location services, field services and
roadmap of services. The Company's network access services provide
direct access to Chorus local access network. It connects around
1.8 million New Zealand homes and businesses. Its property
portfolio includes local telephone exchanges, roadside cabinets,
mobile masts and radio towers. The Company manages security and
access to its buildings and infrastructure across the country. The
Company installs or repairs end customers' phone or Internet
services. The phone and Internet companies use its network to
deliver services. The Company also provides services to radio
operators or organizations that need wireless communications.
These organizations include TeamTalk, NZ Police, Civil Defense
organizations and broadcasters.

S R I  L A N K A

NATIONAL DEVELOPMENT: Fitch Rates USD-Denominated Notes at 'B+'
Fitch Ratings has assigned Sri Lanka-based National Development
Bank PLC's (NDB) proposed issue of USD-denominated notes an
expected rating of 'B+(EXP)'.

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

Key Rating Drivers
The notes are rated at the same level as NDB's Long-Term Foreign
Currency Issuer Default Rating (IDR) of 'B+' as they constitute
unsecured and unsubordinated obligations of the issuer.

In line with Fitch's criteria, Recovery Ratings are assigned to
entities with an IDR of 'B+' or below. Consequently, Fitch has
assigned a Recovery Rating of 'RR4' to the notes to reflect
average recovery prospects.

NDB's Long-Term IDR reflects its standalone risk profile and
satisfactory track record as a project financing institution with
historically stronger capitalisation, asset quality and
profitability compared with other major financial institutions in
Sri Lanka. However, these strengths are counterbalanced by
potential risks from NDB's aggressive loan growth in recent years
and its expansion into other areas of commercial lending as it
seeks to become a full-service universal bank.

Rating Sensitivities
Any change in NDB's IDRs would impact the rating of the proposed
USD notes.

Full list of NDB's ratings:

Long-Term Foreign and Local-Currency IDRs 'B+'; Stable Outlook
Proposed USD senior unsecured notes assigned 'B+(exp)' ;Recovery
Rating assigned 'RR4'
Short-term Foreign Currency IDR 'B'
Viability rating 'b+'
Support Rating '4'
Support Rating Floor 'B'
National Long-Term Rating AA-(lka)'; Stable Outlook
Outstanding Subordinated debentures 'A+(lka)'

NATIONAL DEVELOPMENT: S&P Assigns 'B+' Rating to Sr. Unsec. Notes
Standard & Poor's Ratings Services assigned its 'B+' long-term
rating to a proposed issue of senior unsecured notes by National
Development Bank PLC (NDB: B+/Stable/B).  The rating on the notes
reflects the long-term counterparty credit rating on NDB.

The proposed notes will constitute direct, unconditional,
unsecured, and unsubordinated obligations of NDB, and shall at all
times rank equally with all other unsecured obligations of the

The rating on the proposed notes is subject to S&P's review of the
final issuance documentation.


VIETNAM: Slow Reforms A Drag on Banks' Risk Profiles, Fitch Says
Fitch Ratings says in a new report that the major Vietnamese
banks' risk profiles will remain vulnerable in view of the
country's below-par economic performance, high asset-quality
risks, poor transparency and slow pace of banking restructuring,
alongside persistent global headwinds.

Stable macro policies since early 2011 have led to lower
volatility in interest rates, exchange rates, and inflation.
Sustaining a broadly steady backdrop raises the chances of a
banking-sector recovery. However, state-led reforms have been
slow; in part because the authorities probably fear exacerbating
problems in an already fragile economy. Fitch forecasts Vietnam's
GDP growth to rise modestly to around 5.5% in 2014-2015 (2013:
5.0%) - low relative to the country's record over the last decade.
Efforts to spur domestic demand have not been effective as banks
and borrowers are wary of an uncertain operating environment.
Reported loan growth was just 6% in the year to August 2013 (2012:

Fitch expects any recovery in the banking system to be gradual,
depending on the pace and effectiveness of reforms, and regulatory
discipline. The Vietnam Asset Management Company (VAMC) may not
tackle many of the asset-quality issues in the near term because
some aspects of its operations are still unclear and regulatory
rules to improve asset-quality data transparency have been delayed
until June 2014. Banking consolidation and reform of state-owned
enterprises are likely to progress slowly over the medium-term.

Vague non-performing loan (NPL) transparency and tough economic
conditions still pose impairment risks to major banks. VAMC could
remove bad debt from banks but not losses. A "true" level of the
NPL ratio (say 15% relative to the reported 3%-4%) and an 80% loss
rate would cut core Tier 1 capital adequacy ratio (CAR) of large
lenders to about 1% from the reported 10% at end-June 2013. This,
together with pressure on banks' asset quality and profit
generation, underlines the need for fresh capital, which Fitch
believes will be hard to acquire, especially for small and medium-
sized banks. Restrictive foreign ownership laws deter foreign
investment while there may not be much investor appetite locally
because of the uncertain domestic economy.

Downside rating risks could arise if the operating environment
becomes even more challenging and threatens banks' solvency, a
loss in depositors' confidence occurs, and/or if there is a
negative rating action on the sovereign. The Outlook is Stable,
however, because the banks' ratings in the single 'B' category
already factor in such vulnerabilities, and in light of the
Vietnamese sovereign's Stable Outlook.


* Upcoming Meetings, Conferences and Seminars

Nov. 1, 2013
      NCBJ/ABI Educational Program
         Atlanta Marriott Marquis, Atlanta, Ga.
            Contact: 1-703-739-0800;

Dec. 2, 2013
      19th Annual Distressed Investing Conference
          The Helmsley Park Lane Hotel, New York, N.Y.
          Contact: 240-629-3300 or

Dec. 5-7, 2013
      Winter Leadership Conference
         Terranea Resort, Rancho Palos Verdes, Calif.
            Contact: 1-703-739-0800;


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

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., Washington, D.C., USA.
Valerie U. Pascual, Marites O. Claro, Joy A. Agravante, Rousel
Elaine T. Fernandez, Julie Anne L. Toledo, Frauline S. Abangan,
and Peter A. Chapman, Editors.

Copyright 2013.  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$775 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
Peter Chapman at 215-945-7000 or Nina Novak at 202-241-8200.

                 *** End of Transmission ***