/raid1/www/Hosts/bankrupt/TCREUR_Public/061027.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
E U R O P E
Friday, October 27, 2006, Vol. 7, No. 214
Headlines
A U S T R I A
BE-KA LLC: Creditors' Meeting Slated for November 13
BRUECKENWIRT LLC: Klagenfurt Court Orders Business Closure
LICA LLC: Creditors' Meeting Slated for November 6
LUNZ OEG: Claims Registration Period Ends November 4
SOLKAV LLC: Claims Registration Period Ends November 7
B E L G I U M
GOODYEAR TIRE: Moody's Assigns Loss-Given-Default Ratings
TENNECO INC.: Moody's Assigns Loss-Given-Default Ratings
F R A N C E
BOMBARDIER INC: Wins EUR2.7-Bln Train Deal with France's SNCF
EUROTUNNEL GROUP: Board Okays Draft Safeguard Restructuring Plan
LEVEL 3: Moody's Affirms Caa1 Corporate Family Rating
METALDYNE CORP: Moody's Assigns Loss-Given-Default Ratings
SKYEPHARMA PLC: Lehman Holds 5.33% of Issued Share Capital
SOTHEBY'S HOLDINGS: Moody's Assigns Loss-Given-Default Ratings
G E R M A N Y
AMAZON.COM: Moody's Assigns Loss-Given-Default Ratings
BOMBARDIER INC: Wins EUR2.7-Bln Train Deal with France's SNCF
EFT CAPITAL: Creditors' Meeting Slated for November 2
FRANKE SCHIFFAHRT: Claims Registration Ends November 2
GLASBAU KIELWEIN: Creditors' Meeting Slated for November 2
IT NETZWERK: Claims Registration Ends November 2
KGS-TECHNIK: Claims Registration Ends November 2
LEAR CORP: Moody's Assigns Loss-Given-Default Ratings
METALDYNE CORP: Moody's Assigns Loss-Given-Default Ratings
NACHBARSCHAFTSLADEN E.V.: Creditors' Meeting Slated for Nov. 2
NEUBAU GMBH: Claims Registration Ends November 3
PARKETT DOKTOR: Claims Registration Ends November 2
PRO-BAU: Claims Registration Ends November 2
UM-LOGISTIK-GMBH: Claims Registration Ends November 2
VEREINS MEDICENT: Claims Registration Ends November 3
VVB NUTZFAHRZEUGE: Claims Registration Ends November 2
G R E E C E
TECHNICAL OLYMPIC: S&P Cuts Ratings on Expected Asset Impairment
H U N G A R Y
BANTA CORP: High Leverage Prompts Moody's to Assign Ba2 Rating
I T A L Y
SOTHEBY'S HOLDINGS: Moody's Assigns Loss-Given-Default Ratings
K A Z A K H S T A N
AKTOBEBURSERVICE LLP: Creditors Must File Claims by Nov. 22
FESTA LLP: Creditors Must File Claims by Nov. 21
A&K LLP: Proof of Claim Deadline Slated for Nov. 21
KASPYI OIL: Proof of Claim Deadline Slated for Nov. 26
OT-KOL LLP: Creditors' Claims Due Nov. 24
PROGRESS LLP: Creditors' Claims Due Nov. 24
TENDIK LLP: Claims Registration Ends Nov. 17
TRANSSFERA LLP: Court Starts Bankruptcy Procedure
TRANSTORGSTROY LLP: Claims Registration Ends Nov. 22
K Y R G Y Z S T A N
EAST-WEST LLC: Claims Filing Period Ends Dec. 13
L A T V I A
LATEKO BANKA: Fitch Revises Outlook to Positive & Keeps B+ IDR
N E T H E R L A N D S
ALFA BANK: Forecasts Credit Portfolio to Quadruple in 2008
EURO GALAXY: Moody's Assigns Low-B Ratings to Two Note Classes
GOODYEAR TIRE: Moody's Assigns Loss-Given-Default Ratings
LFEC IV: Moody's Rates EUR7.4-Mln Class V Mezzanine Notes at Ba3
UNITED BISCUITS: Blackstone & PAI to Buy Business for GBP1.6 Bln
UNITED BISCUITS: Transfers Nik Naks, Crunchies Production to UK
P O R T U G A L
LUSITANO SME: S&P Rates EUR34-Mln Class C Notes at BB
LUSITANO SME: Fitch Puts BB Rating on EUR34.07-Mln Class C Notes
R U S S I A
459 WOOD: Amur Court Names L. Fedotova as Insolvency Manager
AGRICULTURAL INDUSTRIAL: N. Mutallapov to Manage Assets
ALFA BANK: Forecasts Credit Portfolio to Quadruple in 2008
AMUR-FUEL: Amur Court Starts Bankruptcy Supervision Procedure
AMUR OJSC: Primorye Bankruptcy Hearing Slated for Mar. 7
AUTO-AGGREGATE: Ivanovo Bankruptcy Hearing Slated for Feb. 12
DAL-LEASING: Khabarovsk Court Starts Bankruptcy Supervision
LEMESHINSKAYA: Court Names E. Pukhova as Insolvency Manager
MINERAL LLC: Court Names S. Gavryutina as Insolvency Manager
OPOCHETSKIY BUTTER: Court Names N. Vereshak to Manage Assets
POLOVINSKIY BUTTER: Court Names V. Vinogradov to Manage Assets
RAJ-REINFORCED-CONCRETE: Names V. Vinogradov to Manage Assets
SEVERSTAL OAO: Targets US$1.7 Billion Proceeds from London IPO
SUAL GROUP: Initial Investment on Merged Co Pegged at US$16 Bln
TANAS OJSC: Court Names A. Lebedev as Insolvency Manager
TNK-BP HOLDING: Mulls Raising US$1 Bln to Balance Debt Portfolio
VNESHTORGBANK JSC: To Start Chinese Operations in 2008
VOLOGDA-PROM-WOOD-EXPORT: Names A. Belyaev to Manage Assets
YALUTOROVSKIY TIMBER: Names S. Vinnik as Insolvency Manager
S W I T Z E R L A N D
CABLECOM LUXEMBOURG: Moody's Rates Proposed Notes at (P)B3
SUAL GROUP: Initial Investment on Merged Co Pegged at US$16 Bln
U K R A I N E
AGROKOM LLC: Court Names Irina Stuk to Liquidate Assets
ARSENAL-CENTER: Odessa Court Names L. Ilyenok as Liquidator
BANK MRIYA: Fitch Changes Outlook to Positive & Keeps IDR at BB-
BATIR LLC: Odessa Court Names L. Ilyenok as Insolvency Manager
INTERMEDTEH LLC: Court Names Irina Horoz as Insolvency Manager
KORVET: Court Names Svitlana Safronova as Insolvency Manager
OLG LLC: Lviv Court Names Gennadij Marchuk as Insolvency Manager
PRIVATBANK CJSC: Fitch Revises Rating Outlook to Positive
PROCREDIT UKRAINE: Fitch Revises BB- IDR's Outlook to Positive
RADGOSP-PLANT YEVPATORIJSKIJ: Bankruptcy Supervision Starts
SOLODOSHI LLC: Court Names V. Ribachuk as Insolvency Manager
UKRAINIAN BEER: AR Krym Court Starts Bankruptcy Supervision
UKREXIMBANK JSC: Fitch Revises BB- IDR's Outlook to Positive
UKRSIBBANK JSIB: Fitch Changes Outlook to Positive on BB- IDR
* Fitch Changes Ukraine's Outlook to Positive & Keeps BB- Rating
U N I T E D K I N G D O M
A & P POOLS: Appoints Liquidator from Begbies Traynor
AMAZON.COM: Moody's Assigns Loss-Given-Default Ratings
BERTRAM & WATTS: Brings In Liquidators from CBA
BRISTOW GROUP: Weak Profile Spurs S&P to Rate Pfd. Stock at B
BRITANNIA BULK: Moody's Assigns B3 Corporate Family Rating
BRITANNIA BULK: S&P Assigns B- Rating on Proposed Bond Issue
CHATTERBOX GREETINGS: Names Nimish Chandrakant Patel Liquidator
CHC HELICOPTER: S&P Revises Outlook to Stable & Affirms Ratings
COOPER TIRE: Moody's Assigns Loss-Given-Default Ratings
CRAEGMOOR FUNDING: Moody's May Cut Ratings on Class B Notes
CRUM & FORSTER: S&P Removes BB Credit Ratings from CreditWatch
E & P COATINGS: Cattles Invoice Taps CLB Coopers as Receivers
EUROTUNNEL GROUP: Unveils Proposals to Restructuring Plan
EXCELLENCE THROUGH: Claims Filing Period Ends Nov. 30
EXITECH LIMITED: Appoints Joint Administrators from PwC
F1 HIRE: Hires Liquidator from B & C Associates
F1 LOGISTIX: Hires Jeffrey Mark Brenner to Liquidate Assets
F.N. METALWORK: Joint Liquidators Take Over Operations
FAIRFAX FINANCIAL: S&P Affirms BB Counterparty Credit Ratings
HIRT COMBUSTION: Brings In KPMG to Administer Assets
HOUSE OF EUROPE: Fitch Affirms BB Rating on EUR50-Mln Notes
ILLUMA LIGHTING: Brings In Grant Thornton as Administrators
INCO LIMITED: Moody's Confirms Ba1 Subordinate Bond Rating
INTERNATIONAL SHIPHOLDING: Moody's Assigns LGD6 Rating on Notes
JANUS TECHNOLOGIES: Hires Liquidators from Poppleton & Appleby
KB HOME: Filing Delay Cues S&P to Put Ratings on Watch Negative
KEISS CONTRACTS: Claims Registration Ends Dec. 11
KIRKLAND AGENCIES: Taps Liquidator from Deloitte & Touche LLP
KM ENGINEERING: Creditors Confirm Liquidator's Appointment
MANSARD MORTGAGES: Fitch Assigns BB Rating on GBP20-Mln Notes
METOKOTE CORP: Moody's Assigns Loss-Given-Default Ratings
NYT LIMITED: Appoints Joint Administrators from Leonard Curtis
ODYSSEY RE: S&P Affirms BB Preferred Stock Ratings
OVERSEAS SHIPHOLDING: Moody's Assigns Loss-Given-Default Ratings
POLYPORE INT'L: Moody's Assigns Loss-Given-Default Ratings
PUREGLOW LIMITED: Calls In Liquidator from Begbies Traynor
PURE PRINT: Names Liquidators from Insol House
QUIBEC PROPERTIES: Hires PKF to Administer Assets
ROSSMORE HOUSE: Appoints Liquidators from PKF (U.K.) LLP
SEVERSTAL OAO: Targets US$1.7 Billion Proceeds from London IPO
SKYEPHARMA PLC: Lehman Holds 5.33% of Issued Share Capital
SMARTHAUL LTD: Taps Joint Administrators from Herron Fisher
SOLO CUP: Moody's Assigns Loss-Given-Default Ratings
THINKSUMMER LIMITED: Taps Liquidators from Fisher Partners
TIG HOLDINGS: S&P Affirms BB- Counterparty Credit Ratings
TNK-BP HOLDING: Mulls Raising US$1 Bln to Balance Debt Portfolio
TRADE AND INVEST: Brings In DTE Leonard Curtis as Administrators
TRW AUTOMOTIVE: Moody's Assigns Loss-Given-Default Ratings
UNITED BISCUITS: Blackstone & PAI to Buy Business for GBP1.6 Bln
UNITED BISCUITS: Transfers Nik Naks, Crunchies Production to UK
VNESHTORGBANK JSC: To Start Chinese Operations in 2008
WESCO INT'L: S&P Assigns B Rating on Proposed US$250-Mln Notes
WESSEX BINDING: Appoints Administrators from Tenon Recovery
WOOD NORTON: Hires Alisdair J. Findlay to Liquidate Assets
WORKMART LIMITED: Calls In Liquidators from RMT
* Moody's Sees Trough in West European Credit Quality in H1 2007
* BOOK REVIEW: Leveraged Management Buyouts: Causes and
Consequences
*********
=============
A U S T R I A
=============
BE-KA LLC: Creditors' Meeting Slated for November 13
----------------------------------------------------
Creditors owed money by Construction LLC BE-KA (FN 250472t) are
encouraged to attend the creditors' meeting at 10:00 a.m. on
Nov. 13 to consider the adoption of the rule by revision and
accountability.
The creditors' meeting will be held at:
The Trade Court of Vienna
Room 2102
21st Floor
Vienna, Austria
Headquartered in Vienna, Austria, the Debtor declared bankruptcy
on May 18 (Bankr. Case No. 45 S 30/06z). Georg Kahlig serves as
the court-appointed property manager of the bankrupt estate.
The property manager can be reached at:
Dr. Georg Kahlig
c/o Mag. Gerhard Stauder
Siebensterngasse 42
1070 Vienna, Austria
Tel: 523 47 91
Fax: 523 47 91 33
E-mail: kahlig.partner@aon.at
BRUECKENWIRT LLC: Klagenfurt Court Orders Business Closure
----------------------------------------------------------
The Land Court of Klagenfurt entered an order Sept. 11 closing
the business of LLC Brueckenwirt (FN 181555v). Court-appointed
property manager Johann Winkler recommended the business closure
after determining that the Debtor's continuing operations would
reduce the value of the estate.
The property manager can be reached at:
Dr. Johann Winkler
Peraustrasse 31
9500 Villach, Austria
Tel: 04242/27835
Fax: 04242/26107-19
E-mail: rae.pototschnig-winkler@aon.at
Headquartered in Villach, Austria, the Debtor declared
bankruptcy on Aug. 1 (Bankr. Case No. 41 S 86/06d).
LICA LLC: Creditors' Meeting Slated for November 6
--------------------------------------------------
Creditors owed money by LLC Lica (FN 190766p) are encouraged to
attend the creditors' meeting at 11:00 a.m. on Nov. 6 to
consider the adoption of the rule by revision and
accountability.
The creditors' meeting will be held at:
The Trade Court of Vienna
Room 1705
Vienna, Austria
Headquartered in Vienna, Austria, the Debtor declared bankruptcy
on Sept. 11 (Bankr. Case No. 3 S 130/06x). Stephan Riel serves
as the court-appointed property manager of the bankrupt estate.
Johannes Jaksch represents Dr. Riel in the bankruptcy
proceedings.
The property manager and his representative can be reached at:
Dr. Stephan Riel
c/o Dr. Johannes Jaksch
Landstrasser Main Street 1/2
1030 Vienna, Austria
Tel: 713 44 33
Fax: 713 10 33
E-mail: kanzlei@jsr.at
LUNZ OEG: Claims Registration Period Ends November 4
----------------------------------------------------
Creditors owed money by OEG Lunz (FN 191380t) have until Nov. 4
to file written proofs of claims to court-appointed property
manager Julius Bitter at:
Dr. Julius Bitter
Schmideggstrasse 55
4560 Kirchdorf/Krems, Austria
Tel: 07582/60040
E-mail: ra.bitter@aon.at
Creditors and other interested parties are encouraged to attend
the creditors' meeting at 1:30 p.m. on Nov. 14 to consider the
adoption of the rule by revision.
The meeting of creditors will be held at:
The Land Court of Steyr
Hall 7
2nd Floor
Steyr, Austria
Headquartered in Micheldorf, Austria, the Debtor declared
bankruptcy on Sept. 11 (Bankr. Case No. 14 14 S 49/06p).
SOLKAV LLC: Claims Registration Period Ends November 7
------------------------------------------------------
Creditors owed money by LLC Solkav (FN 224861d) have until
Nov. 7 to file written proofs of claims to court-appointed
property manager Christian Bachmann at:
Dr. Stephan Riel
c/o Dr. Johannes Jaksch
Landstrasser Main Street 1/2
1030 Vienna, Austria
Tel: 713 44 33
Fax: 713 10 33
E-mail: kanzlei@jsr.at
Creditors and other interested parties are encouraged to attend
the creditors' meeting at noon on Nov. 21 to consider the
adoption of the rule by revision.
The meeting of creditors will be held at:
The Trade Court of Vienna
Room 1701
Vienna, Austria
Headquartered in Vienna, Austria, the Debtor declared bankruptcy
on Sept. 11 (Bankr. Case No. 6 S 80/06s). Johannes Jaksch
represents Dr. Riel in the bankruptcy proceedings.
=============
B E L G I U M
=============
GOODYEAR TIRE: Moody's Assigns Loss-Given-Default Ratings
----------------------------------------------------------
In connection with Moody's Investors Service's implementation of
its new Probability-of-Default and Loss-Given-Default rating
methodology for the U.S. Automotive and Equipment sectors, the
rating agency confirmed its B1 Corporate Family Rating for The
Goodyear Tire & Rubber Company. Additionally, Moody's revised
or held its probability-of-default ratings and assigned loss-
given-default ratings on these loans and bond debt obligations:
Issuer: The Goodyear Tire & Rubber Company
Projected
Old POD New POD LGD Loss-Given
Debt Issue Rating Rating Rating Default
---------- ------- ------- ------ ----------
First Lien Credit
Facility Ba3 Ba1 LGD 2 10%
Second Lien Term
Loan B2 Ba3 LGD 3 35%
Third Lien Secured
Term Loan B3 B2 LGD 4 63%
11% Senior Secured
Notes B3 B2 LGD 4 63%
Floating Rate Senior
Secured Notes B3 B2 LGD 4 63%
9% Senior Notes B3 B2 LGD 4 63%
6-5/8% Senior Notes B3 B3 LGD 6 94%
8-1/2% Senior Notes B3 B3 LGD 6 94%
6-3/8% Senior Notes B3 B3 LGD 6 94%
7-6/7% Senior Notes B3 B3 LGD 6 94%
7% Senior Notes B3 B3 LGD 6 94%
Senior Unsecured
Convertible Notes B3 B3 LGD 6 94%
Issuer: Goodyear Dunlop Tires Europe B.V.
Projected
Old POD New POD LGD Loss-Given
Debt Issue Rating Rating Rating Default
---------- ------- ------- ------ ----------
Euro Revolving
Credit Facilities B1 Ba1 LGD 2 10%
Euro Secured
Term Loan B1 Ba1 LGD 2 10%
Moody's explains that current long-term credit ratings are
opinions about expected credit loss which incorporate both the
likelihood of default and the expected loss in the event of
default. The LGD rating methodology will disaggregate these two
key assessments in long-term ratings. The LGD rating
methodology will also enhance the consistency in our notching
practices across industries and will improve the transparency
and accuracy of our ratings as our research has shown that
credit losses on bank loans have tended to be lower than those
for similarly rated bonds.
Probability-of-default ratings are assigned only to issuers, not
specific debt instruments, and use the standard Moody's alpha-
numeric scale. They express Moody's opinion of the likelihood
that any entity within a corporate family will default on any of
its debt obligations.
Loss-given-default assessments are assigned to individual rated
debt issues -- loans, bonds, and preferred stock. Moody's
opinion of expected loss are expressed as a percent of principal
and accrued interest at the resolution of the default, with
assessments ranging from LGD1 (loss anticipated to be 0% to 9%)
to LGD6 (loss anticipated to be 90% to 100%).
The Goodyear Tire & Rubber Company (Goodyear) is a manufacturer
of tires and rubber products, engaging in operations in most
regions of the world.
TENNECO INC.: Moody's Assigns Loss-Given-Default Ratings
--------------------------------------------------------
In connection with Moody's Investors Service's implementation of
its new Probability-of-Default and Loss-Given-Default rating
methodology for the U.S. Automotive and Equipment sectors, the
rating agency confirmed its B1 Corporate Family Rating for
Tenneco Inc. Additionally, Moody's revised or held its
probability-of-default ratings and assigned loss-given-default
ratings on these loans and bond debt obligations:
Projected
Old POD New POD LGD Loss-Given
Debt Issue Rating Rating Rating Default
---------- ------- ------- ------ ----------
Senior Secured
Revolving Credit
Facility Ba3 Ba1 LGD2 15%
Senior Secured
Term Loan B Ba3 Ba1 LGD2 15%
Senior Secured
Revolver B-1 Ba3 Ba1 LGD2 15%
10.25% Senior Notes B2 Ba3 LGD3 42%
8.625% Subordinated
Notes B3 B3 LGD6 92%
Moody's explains that current long-term credit ratings are
opinions about expected credit loss, which incorporate both the
likelihood of default and the expected loss in the event of
default. The LGD rating methodology will disaggregate these two
key assessments in long-term ratings. The LGD rating
methodology will also enhance the consistency in our notching
practices across industries and will improve the transparency
and accuracy of our ratings as our research has shown that
credit losses on bank loans have tended to be lower than those
for similarly rated bonds.
Probability-of-default ratings are assigned only to issuers, not
specific debt instruments, and use the standard Moody's alpha-
numeric scale. They express Moody's opinion of the likelihood
that any entity within a corporate family will default on any of
its debt obligations.
Loss-given-default assessments are assigned to individual rated
debt issues -- loans, bonds, and preferred stock. Moody's
opinion of expected loss are expressed as a percent of principal
and accrued interest at the resolution of the default, with
assessments ranging from LGD1 (loss anticipated to be 0% to 9%)
to LGD6 (loss anticipated to be 90% to 100%).
Tenneco, headquartered in Lake Forest, Illinois, is a leading
manufacturer of automotive ride control and emissions control
products and systems for both the worldwide original equipment
market and aftermarket. Leading brands include Monroe(R),
Rancho(R), and Fric Rot ride control products and Walker(R) and
Gillet emission control products.
The company has global operations in Argentina, Japan, and
Germany, among others, with its European operations
headquartered in Brussels, Belgium.
===========
F R A N C E
===========
BOMBARDIER INC: Wins EUR2.7-Bln Train Deal with France's SNCF
-------------------------------------------------------------
Bombardier Transportation has been selected by SNCF, French
National Railways, to supply the future Ile-de-France commuter
train, after a call for tenders launched in February 2004.
The contract is for the delivery of a total of 372 trains that
will operate on the Greater Paris/Ile-de-France suburban
network, and includes an initial order of 172 trains valued at
an estimated EUR1.35 billion.
The total value of the contract is estimated at EUR2.7 billion.
SNCF announced its decision at the conclusion of its Board
meeting on Oct. 25, 2006, convened to review the opinion of its
contract committee.
Contract signing is expected to take place in the near future.
Delivery of the first trains is scheduled to begin in November
2009 and continue until 2015.
The new train will be designed, manufactured and built at the
Bombardier Transportation facility in Crespin, in the
Valenciennes region, France.
Bombardier Transportation's future Ile-de-France commuter train
is an articulated train featuring extra-wide carriages which
provide an unusually large internal volume for passengers, wide
seats and especially wide doors to increase the ease and speed
of passenger movement. Each train consists of seven or eight
carriages in a single unit and can also be operated as a double
or triple unit. The capacity of the trains will vary from 800 to
1,000 passengers, depending on the configuration and layout. The
new train is designed for maximum comfort, safety and security
and is based on Bombardier's proven technology already in
commercial service, offering a high level of reliability.
"We believe that this new train will transform the travelling
experience for passengers in Ile-de-France and we are delighted
to support the ambitious policy of STIF (transport authority of
Ile-de-France) and SNCF to renew the Ile-de-France rolling
stock," Andre Navarri, President of Bombardier Transportation,
said.
"We are particularly proud of the confidence that SNCF has shown
in us," Jean Berge, President Bombardier Transportation, France,
said. "This success confirms the role that Bombardier
Transportation is currently playing in the field of regional
railway transport in France. It is also a source of pride for
the national railway industry."
In France, Bombardier Transportation operates primarily at its
Crespin factory in the Valenciennes region, which employs 1,600
people and is the leading French manufacturing site in the
railway industry. Bombardier Transportation is involved in all
TGV (high-speed rail) programs. The group manufactures a wide
range of rolling stock for public transport. Among these
products are the MF2000 vehicles for the Paris metro, the
Marseille, Nantes and Saint-Etienne tramways, and the recent RER
(commuter train) vehicles. Bombardier is a major player in
regional transportation with its TER2N NG railcars and the AGC
(Autorail Grande Capacit,/high-capacity rail liner), which 21
French regions have ordered to date. Bombardier Transportation
is recognized as a global partner of the transport authorities
in France.
About Bombardier
Headquartered in Valcourt, Quebec, Bombardier Inc. (TSX: BBD) --
http://www.bombardier.com/-- manufactures innovative
transportation solutions, from regional aircraft and business
jets to rail transportation equipment. The company is a global
corporation. In Europe, it maintains operations in Northern
Ireland, United Kingdom, Germany, Switzerland, Sweden, and
Austria. Its revenues for the fiscal year ended Jan. 31, 2006
were US$14.7 billion and its shares are traded in the Toronto
Stock Exchange.
* * *
As reported in the TCR-Europe on Oct. 25, Fitch Ratings placed
the debt and Issuer Default Ratings for both Bombardier Inc. and
Bombardier Capital Inc. on Rating Watch Negative. The existing
ratings are:
Bombardier Inc.
-- IDR BB;
-- Senior unsecured debt BB;
-- Bank facilities BB; and
-- Preferred stock B+.
Bombardier Capital Inc.
-- IDR BB; and
-- Senior unsecured debt BB.
These ratings cover approximately US$4.2 billion of outstanding
debt and preferred stock. Due to the existence of a support
agreement and demonstrated support by the parent, BC's ratings
are linked to those of BI.
Bombardier Inc.'s 6.3% Notes due 2014 also carry Moody's
Investor Service's Ba2 rating and Standard & Poors' and Fitch
Ratings' BB ratings.
EUROTUNNEL GROUP: Board Okays Draft Safeguard Restructuring Plan
----------------------------------------------------------------
The Board of Eurotunnel Group approved proposals for a draft
safeguard restructuring plan put forward by the company with the
support of the representatives nominated by the Paris Commercial
Court.
Terms of the Plan
The principal elements of the proposal are:
1) the creation of a new company, Groupe Eurotunnel, which
will launch an Exchange Tender Offer to Eurotunnel's
current shareholders. The shareholders will hold a
minimum 13% of the equity in Groupe Eurotunnel;
2) Groupe Eurotunnel will subscribe to a new long-term loan
of GBP2.840 billion (less than half of the current debt)
from an international banking consortium;
3) Groupe Eurotunnel will issue GBP1.275 billion of
convertible hybrid notes. The hybrid notes will be
convertible over a maximum of three years and one month.
Approximately 61.7% of the hybrids are redeemable by the
company.
4) current Eurotunnel shareholders, who subscribe to the ETO,
will hold a minimum of 13% of the equity in Groupe
Eurotunnel. They can subscribe directly to the hybrid, up
to a value of GBP60 million (EUR87.7 million) and will
benefit from free warrants. The redemption of hybrid
notes by the company would allow them to increase their
share of the equity from 13% to 67%.
"These proposals represent the best possible equilibrium between
the demands of the different stakeholders; they retain an
exceptional amount of equity and accretion potential for
shareholders in comparison to other restructurings," Jacques
Gounon, Chairman and Chief Executive said. "With the debt write
off, Groupe Eurotunnel will be able to re-launch from a solid
base, and finally develop and grow."
About the Company
Headquartered in Folkestone, United Kingdom and Calais, France,
Eurotunnel Group -- http://www.eurotunnel.co.uk/-- operates a
fleet of 25 shuttle trains, which carry cars, coaches and
trucks. It manages the infrastructure of the Channel Tunnel and
receives toll revenues from train operating companies whose
trains pass through the Tunnel.
The British and French governments have granted Eurotunnel a
concession to operate the Channel Tunnel until 2086.
* * *
Company Crisis
Eurotunnel's crisis began when costs to build the tunnels that
connect U.K. and France started to overrun before it opened in
1994. The Iraq war followed, which didn't help as tourist
traffic fell. In May 2004, Eurotunnel appointed Lazard (global
coordinator) and Lehman Brothers as bank advisors, and Dresdner
Kleinwort Wasserstein as restructuring adviser.
In July 2004, auditor KPMG Audit Plc said the company faced
uncertainty after 2005. The firm's survival is dependent upon
its ability to put in place a refinancing plan or, if not, to
obtain an agreement with the lenders under the existing Credit
Agreement within the next two years, the auditor said.
LEVEL 3: Moody's Affirms Caa1 Corporate Family Rating
-----------------------------------------------------
Moody's Investors Service assigned a B2 rating to Level 3
Financing, Inc.'s new US$600 million fixed rate senior notes due
2014. The proceeds from new financing will be used to fund
acquisitions and capital expenditures.
Moody's has affirmed Level 3 Communications, Inc.'s corporate
family rating at Caa1 with a stable rating outlook, as the pro-
forma leverage (total debt-to-EBITDA, Moody's adjusted) is
expected to remain below the 10.0x level Moody's previously
indicated could put downward pressure on the rating, and as the
rating agency continues to expect the company to commence
generating free cash flow in 2008.
Moody's has also affirmed the ratings of existing debt at
Level 3 and Financing.
Rating actions:
Issuer: Level 3 Communications, Inc.
* Corporate Family Rating: affirmed Caa1
* Probability of Default Rating: affirmed Caa1
* Senior Notes: Caa2 affirmed; to LGD5-70% from LGD4-67%
* Senior Euro Notes: Caa2 affirmed; to LGD5-70% from
LGD4-67%
* Convertible Senior Notes: Caa2 affirmed; to LGD5-70%
from LGD4-67%
* Convertible Subordinated Notes: affirmed Caa3, LGD6-94%
* Outlook - Stable
Issuer: Level 3 Financing, Inc.
* New US$600 million Senior Notes: assigned B2, LGD3-30%
* Senior Secured Term Loan: affirmed B1, LGD1-3%
* Senior Floating Rate Notes: B2 Affirmed; to LGD3-30%
from LGD2-28%
* Senior Notes: B2 affirmed, to LGD3-30% from LGD2-28%
* Outlook - Stable
The Caa1 rating reflects the overall high business risk for the
long-haul carrier industry, Level 3's high financial risk and
continued cash burn, which is partly mitigated by its very good
near-term liquidity. In addition, the company faces challenges
in integrating the recently announced acquisitions. Broadwing
is the sixth announced acquisition in the past year by Level 3,
with the prior five recently closing. Although Broadwing offers
primarily the same services as Level 3's core business, the
recent acquisitions of metropolitan telecommunications companies
represent a new line of business for Level 3, and it puts the
company in competition with some of its larger customers, giving
rise to potential channel conflicts.
The stable outlook reflects Moody's views that Level 3 will
continue to achieve synergies from its acquisitions as it
focuses on the core telecommunications business, and the
expectation that should acquisition activity continue, it will
not materially impact the company's credit profile.
Level 3 is a leading nationwide communications service provider
with sales of US$3 billion in the last twelve months ending
3Q 2006, excluding the revenues of Software Spectrum business
which the company sold during 3Q 2006. The company's
headquarters are located in Broomfield, Colorado.
METALDYNE CORP: Moody's Assigns Loss-Given-Default Ratings
----------------------------------------------------------
In connection with Moody's Investors Service's implementation of
its new Probability-of-Default and Loss-Given-Default rating
methodology for the U.S. Automotive and Equipment sectors, the
rating agency confirmed its Caa1 Corporate Family Rating for
Metaldyne Corporation. Additionally, Moody's revised or held
its probability-of-default ratings and assigned loss-given-
default ratings on these loans and bond debt obligations:
Issuer: Metaldyne Corporation
Projected
Old POD New POD LGD Loss-Given
Debt Issue Rating Rating Rating Default
---------- ------- ------- ------ ----------
10% Senior Notes Caa2 Caa2 LGD 4 69%
11% Subordinated
Notes Caa3 Caa3 LGD 6 92%
Issuer: Metaldyne Company LLC
Projected
Old POD New POD LGD Loss-Given
Debt Issue Rating Rating Rating Default
---------- ------- ------- ------ ----------
Senior Secured
Revolving Credit
Facility B3 B2 LGD 2 25%
Senior Secured
Synthetic L/C
Facility B3 B2 LGD 2 25%
Senior Secured
Term Loan D B3 B2 LGD 2 25%
Moody's explains that current long-term credit ratings are
opinions about expected credit loss which incorporate both the
likelihood of default and the expected loss in the event of
default. The LGD rating methodology will disaggregate these two
key assessments in long-term ratings. The LGD rating
methodology will also enhance the consistency in our notching
practices across industries and will improve the transparency
and accuracy of our ratings as our research has shown that
credit losses on bank loans have tended to be lower than those
for similarly rated bonds.
Probability-of-default ratings are assigned only to issuers, not
specific debt instruments, and use the standard Moody's alpha-
numeric scale. They express Moody's opinion of the likelihood
that any entity within a corporate family will default on any of
its debt obligations.
Loss-given-default assessments are assigned to individual rated
debt issues -- loans, bonds, and preferred stock. Moody's
opinion of expected loss are expressed as a percent of principal
and accrued interest at the resolution of the default, with
assessments ranging from LGD1 (loss anticipated to be 0% to 9%)
to LGD6 (loss anticipated to be 90% to 100%).
Headquartered in Plymouth, Mich., Metaldyne Corp --
http://www.metaldyne.com/-- is a leading global designer and
supplier of metal-based components, assemblies and modules for
transportation related powertrain and chassis applications
including engine, transmission/transfer case, wheel end and
suspension, axle and driveline, and noise and vibration control
products to the motor vehicle industry. In Europe, the company
maintains operations in France and Germany.
SKYEPHARMA PLC: Lehman Holds 5.33% of Issued Share Capital
----------------------------------------------------------
SkyePharma PLC filed a Form 8-K report with the U.S. Securities
and Exchange Commission that, on Oct. 19, 2006, Lehman Brothers
held 40,178,002 ordinary shares, representing 5.33% of the
Company's issued share capital.
About SkyePharma PLC
Headquartered in London, SkyePharma PLC (Nasdaq: SKYE; LSE: SKP)
-- http://www.skyepharma.com/-- develops pharmaceutical
products benefiting from world-leading drug delivery
technologies that provide easier-to-use and more effective drug
formulations. There are now twelve approved products
incorporating SkyePharma's technologies in the areas of oral,
injectable, inhaled and topical delivery, supported by advanced
solubilisation capabilities.
* * *
Going Concern Doubt
PricewaterhouseCoopers LLP in London, disclosed that there is
uncertainty as to when Skyepharma PLC's certain strategic
initiatives may be concluded and their effect on the Company's
working capital requirements. PwC said that this raises
substantial doubt on the Company's ability to continue as a
going concern. PwC disclosed this explanatory paragraph after
auditing the Company's financial statement for the year ended
Dec. 31, 2005.
SOTHEBY'S HOLDINGS: Moody's Assigns Loss-Given-Default Ratings
--------------------------------------------------------------
In connection with Moody's Investors Service's implementation of
its new Probability-of-Default and Loss-Given-Default rating
methodology for the United States and Canadian Retail sector,
the rating agency confirmed its Ba3 Corporate Family Rating for
Sotheby's Holdings, Inc.
Additionally, Moody's revised its probability-of-default ratings
and assigned loss-given-default ratings on these loans and bond
debt obligations:
Projected
Old POD New POD LGD Loss-Given
Debt Issue Rating Rating Rating Default
---------- ------- ------- ------ ----------
US$100 Mil. Sr.
Unsecured Notes B1 B2 LGD6 90%
Sr. Unsecured
Shelf Registration (P)B1 (P)B2 LGD6 90%
Moody's explains that current long-term credit ratings are
opinions about expected credit loss, which incorporate both the
likelihood of default and the expected loss in the event of
default. The LGD rating methodology will disaggregate these two
key assessments in long-term ratings. The LGD rating
methodology will also enhance the consistency in Moody's
notching practices across industries and will improve the
transparency and accuracy of Moody's ratings as Moody's research
has shown that credit losses on bank loans have tended to be
lower than those for similarly rated bonds.
Probability-of-default ratings are assigned only to issuers,
not specific debt instruments, and use the standard Moody's
alpha-numeric scale. They express Moody's opinion of the
likelihood that any entity within a corporate family will
default on any of its debt obligations.
Loss-given-default assessments are assigned to individual rated
debt issues -- loans, bonds, and preferred stock. Moody's
opinion of expected loss are expressed as a percent of principal
and accrued interest at the resolution of the default, with
assessments ranging from LGD1 (loss anticipated to be 0% to 9%)
to LGD6 (loss anticipated to be 90% to 100%).
Headquartered in New York City, Sotheby's Holdings, Inc.
(NYSE:BID) -- http://www.search.sothebys.com/-- is the parent
company of Sotheby's worldwide auction businesses, art-related
financing and private sales activities. The Company operates in
34 countries, with principal salesrooms located in New York and
London. The company also regularly conducts auctions in 13
other salesrooms around the world, including Australia, Hong
Kong, France, Italy, the Netherlands, Switzerland and Singapore.
=============
G E R M A N Y
=============
AMAZON.COM: Moody's Assigns Loss-Given-Default Ratings
------------------------------------------------------
In connection with Moody's Investors Service's implementation of
its new Probability-of-Default and Loss-Given-Default rating
methodology for the US and Canadian Retail sector, the rating
agency confirmed its BA3 Corporate Family Rating for Amazon.com,
Inc.
Additionally, Moody's revised and held its probability-of-
default ratings and assigned loss-given-default ratings on these
loans and bond debt obligations:
Projected
Old POD New POD LGD Loss-Given
Debt Issue Rating Rating Rating Default
---------- ------- ------- ------ ----------
US$900 million
4.75% Convertible
Subordinated Notes B2 B2 LGD5 82%
US$306 million
6.75% Premium Adj.
Convertible Sec. B2 B2 LGD5 82%
Senior Unsecured
Shelf Registration (P)B1 (P)Ba2 LGD3 35%
Subordinated
Shelf Registration (P)B2 (P)B2 LGD5 82%
Preferred Stock
Shelf Registration (P)B3 (P)B2 LGD6 97%
Moody's explains that current long-term credit ratings are
opinions about expected credit loss, which incorporate both the
likelihood of default and the expected loss in the event of
default. The LGD rating methodology will disaggregate these two
key assessments in long-term ratings. The LGD rating
methodology will also enhance the consistency in Moody's
notching practices across industries and will improve the
transparency and accuracy of Moody's ratings as Moody's research
has shown that credit losses on bank loans have tended to be
lower than those for similarly rated bonds.
Probability-of-default ratings are assigned only to issuers, not
specific debt instruments, and use the standard Moody's alpha-
numeric scale. They express Moody's opinion of the likelihood
that any entity within a corporate family will default on any of
its debt obligations.
Loss-given-default assessments are assigned to individual rated
debt issues -- loans, bonds, and preferred stock. Moody's
opinion of expected loss are expressed as a percent of principal
and accrued interest at the resolution of the default, with
assessments ranging from LGD1 (loss anticipated to be 0% to 9%)
to LGD6 (loss anticipated to be 90% to 100%).
Based in Seattle, Wash., Amazon.com, Inc. (Nasdaq: AMZN) a
Fortune 500 company, opened on the World Wide Web in July 1995
and offers Earth's Biggest Selection. Amazon.com seeks to be
Earth's most customer-centric company, where customers can find
and discover anything they might want to buy online, and
endeavors to offer its customers the lowest possible prices.
Amazon.com and other sellers offer millions of unique new,
refurbished and used items in categories such as health and
personal care, jewelry and watches, gourmet food, sports and
outdoors, apparel and accessories, books, music, DVDs,
electronics and office, toys and baby, and home and garden.
Amazon.com and its affiliates operate retail sites
http://www.amazon.com/http://www.amazon.co.uk/
http://www.amazon.de/http://www.amazon.co.jp/
http://www.amazon.fr/http://www.amazon.ca/and
http://www.joyo.com/
The company has fulfillment centers in Japan and China. Other
office locations include Germany, India, and the United Kingdom.
BOMBARDIER INC: Wins EUR2.7-Bln Train Deal with France's SNCF
-------------------------------------------------------------
Bombardier Transportation has been selected by SNCF, French
National Railways, to supply the future Ile-de-France commuter
train, after a call for tenders launched in February 2004.
The contract is for the delivery of a total of 372 trains that
will operate on the Greater Paris/Ile-de-France suburban
network, and includes an initial order of 172 trains valued at
an estimated EUR1.35 billion.
The total value of the contract is estimated at EUR2.7 billion.
SNCF announced its decision at the conclusion of its Board
meeting on Oct. 25, 2006, convened to review the opinion of its
contract committee.
Contract signing is expected to take place in the near future.
Delivery of the first trains is scheduled to begin in November
2009 and continue until 2015.
The new train will be designed, manufactured and built at the
Bombardier Transportation facility in Crespin, in the
Valenciennes region, France.
Bombardier Transportation's future Ile-de-France commuter train
is an articulated train featuring extra-wide carriages which
provide an unusually large internal volume for passengers, wide
seats and especially wide doors to increase the ease and speed
of passenger movement. Each train consists of seven or eight
carriages in a single unit and can also be operated as a double
or triple unit. The capacity of the trains will vary from 800 to
1,000 passengers, depending on the configuration and layout. The
new train is designed for maximum comfort, safety and security
and is based on Bombardier's proven technology already in
commercial service, offering a high level of reliability.
"We believe that this new train will transform the travelling
experience for passengers in Ile-de-France and we are delighted
to support the ambitious policy of STIF (transport authority of
Ile-de-France) and SNCF to renew the Ile-de-France rolling
stock," Andre Navarri, President of Bombardier Transportation,
said.
"We are particularly proud of the confidence that SNCF has shown
in us," Jean Berge, President Bombardier Transportation, France,
said. "This success confirms the role that Bombardier
Transportation is currently playing in the field of regional
railway transport in France. It is also a source of pride for
the national railway industry."
In France, Bombardier Transportation operates primarily at its
Crespin factory in the Valenciennes region, which employs 1,600
people and is the leading French manufacturing site in the
railway industry. Bombardier Transportation is involved in all
TGV (high-speed rail) programs. The group manufactures a wide
range of rolling stock for public transport. Among these
products are the MF2000 vehicles for the Paris metro, the
Marseille, Nantes and Saint-Etienne tramways, and the recent RER
(commuter train) vehicles. Bombardier is a major player in
regional transportation with its TER2N NG railcars and the AGC
(Autorail Grande Capacit,/high-capacity rail liner), which 21
French regions have ordered to date. Bombardier Transportation
is recognized as a global partner of the transport authorities
in France.
About Bombardier
Headquartered in Valcourt, Quebec, Bombardier Inc. (TSX: BBD) --
http://www.bombardier.com/-- manufactures innovative
transportation solutions, from regional aircraft and business
jets to rail transportation equipment. The company is a global
corporation. In Europe, it maintains operations in Northern
Ireland, United Kingdom, Germany, Switzerland, Sweden, and
Austria. Its revenues for the fiscal year ended Jan. 31, 2006
were US$14.7 billion and its shares are traded in the Toronto
Stock Exchange.
As reported in the TCR-Europe on Oct. 25, Fitch Ratings placed
the debt and Issuer Default Ratings for both Bombardier Inc. and
Bombardier Capital Inc. on Rating Watch Negative. The existing
ratings are:
Bombardier Inc.
-- IDR BB;
-- Senior unsecured debt BB;
-- Bank facilities BB; and
-- Preferred stock B+.
Bombardier Capital Inc.
-- IDR BB; and
-- Senior unsecured debt BB.
These ratings cover approximately US$4.2 billion of outstanding
debt and preferred stock. Due to the existence of a support
agreement and demonstrated support by the parent, BC's ratings
are linked to those of BI.
Bombardier Inc.'s 6.3% Notes due 2014 also carry Moody's
Investor Service's Ba2 rating and Standard & Poors' and Fitch
Ratings' BB ratings.
EFT CAPITAL: Creditors' Meeting Slated for November 2
-----------------------------------------------------
The court-appointed provisional administrator EFT Capital
Consulting GmbH, Detlef Ruediger Beckmann, will present his
first report on the Company's insolvency proceedings at a
creditors' meeting at 10:20 a.m. on Nov. 2.
The meeting of creditors and other interested parties will be
held at:
The District Court of Charlottenburg
II. Stock Hall 218
District Court Place 1
14057 Berlin, Germany
The Court will also verify the claims set out in the
administrator's report at 10:10 a.m. on Feb. 15, 2007, at the
same venue.
Creditors have until Dec. 14 to register their claims with the
court-appointed provisional administrator.
The District Court of Charlottenburg opened bankruptcy
proceedings against EFT Capital Consulting GmbH on Sept. 14.
Consequently, all pending proceedings against the company have
been automatically stayed.
The Debtor can be reached at:
EFT Capital Consulting GmbH
Rodensteinstrasse 43
13593 Berlin, Germany
The administrator can be reached at:
Dr. Detlef Ruediger Beckmann
Lietzenburger Road 77
10719 Berlin, Germany
FRANKE SCHIFFAHRT: Claims Registration Ends November 2
------------------------------------------------------
Creditors of FRANKE Schiffahrt + Logistik GmbH have until Nov. 2
to register their claims with court-appointed provisional
administrator Bernd Sundermeier.
Creditors and other interested parties are encouraged to attend
the meeting at 2:40 p.m. on Nov. 23 at which time the
administrator will present his first report on the insolvency
proceedings.
The meeting of creditors will be held at:
The District Court of Oldenburg
Meeting Room
2nd Floor
Elizabeth Route 6
26135 Oldenburg, Germany
The Court will also verify the claims set out in the
administrator's report during this meeting, while creditors may
constitute a creditors' committee or opt to appoint a new
insolvency manager.
The District Court of Oldenburg opened bankruptcy proceedings
against FRANKE Schiffahrt + Logistik GmbH on Sept. 11.
Consequently, all pending proceedings against the company have
been automatically stayed.
The Debtor can be contacted at:
FRANKE Schiffahrt + Logistik GmbH
Attn: Werner Fleischer, Manager
Werftstr. 15a
26135 Oldenburg, Germany
The administrator can be contacted at:
Dr. Bernd Sundermeier
Alte Wiefelsteder Road 3
26316 Varel, Germany
Tel: 04451/913880
Fax: 04451/913839
GLASBAU KIELWEIN: Creditors' Meeting Slated for November 2
----------------------------------------------------------
The court-appointed provisional administrator Glasbau Kielwein
GmbH, Christoph Schulte-Kaubruegger, will present his first
report on the Company's insolvency proceedings at a creditors'
meeting at 9:10 a.m. on Nov. 2.
The meeting of creditors and other interested parties will be
held at:
The District Court of Charlottenburg
II. Stock Hall 218
District Court Place 1
14057 Berlin, Germany
The Court will also verify the claims set out in the
administrator's report at 9:00 a.m. on Jan. 25, 2007, at the
same venue.
Creditors have until Nov. 15 to register their claims with the
court-appointed provisional administrator.
The District Court of Charlottenburg opened bankruptcy
proceedings against Glasbau Kielwein GmbH on Sept. 15.
Consequently, all pending proceedings against the company have
been automatically stayed.
The Debtor can be reached at:
Glasbau Kielwein GmbH
Stromstr. 44
10551 Berlin, Germany
The administrator can be reached at:
Dr. Christoph Schulte-Kaubruegger
Genthiner Str. 48
10785 Berlin, Germany
IT NETZWERK: Claims Registration Ends November 2
------------------------------------------------
Creditors of IT Netzwerk-Consult GmbH have until Nov. 2 to
register their claims with court-appointed provisional
administrator Martin Manstein.
Creditors and other interested parties are encouraged to attend
the meeting at 10:00 a.m. on Nov. 23 at which time the
administrator will present his first report on the insolvency
proceedings.
The meeting of creditors will be held at:
The District Court of Munich
Meeting Room 102
Infanteriestr. 5
Munich, Germany
The Court will also verify the claims set out in the
administrator's report during this meeting, while creditors may
constitute a creditors' committee or opt to appoint a new
insolvency manager.
The District Court of Munich opened bankruptcy proceedings
against IT Netzwerk-Consult GmbH on Aug. 31. Consequently, all
pending proceedings against the company have been automatically
stayed.
The Debtor can be contacted at:
IT Netzwerk-Consult GmbH
Boschetsrieder Str. 71
81379 Munich, Germany
The administrator can be contacted at:
Martin Manstein
Prannerstr. 11
80333 Munich, Germany
Tel: 089/211115-00
Fax: 089/211115-55
KGS-TECHNIK: Claims Registration Ends November 2
------------------------------------------------
Creditors of KGS-Technik GmbH have until Nov. 2 to register
their claims with court-appointed provisional administrator
Sabine Aldermann.
Creditors and other interested parties are encouraged to attend
the meeting at 1:15 p.m. on Dec. 6 at which time the
administrator will present her first report on the insolvency
proceedings.
The meeting of creditors will be held at:
The District Court of Dortmund
Hall 3.201
2nd Floor
Court Place 1
44135 Dortmund, Germany
The Court will also verify the claims set out in the
administrator's report during this meeting, while creditors may
constitute a creditors' committee or opt to appoint a new
insolvency manager.
The District Court of Dortmund opened bankruptcy proceedings
against KGS-Technik GmbH on Sept. 12. Consequently, all pending
proceedings against the company have been automatically stayed.
The Debtor can be contacted at:
KGS-Technik GmbH
Werver Mark 146
59174 Kamen, Germany
Attn: Peter Rosenkranz, Manager
Wilhelmsbau 9
59425 Unna, Germany
The administrator can be contacted at:
Dr. Sabine Aldermann
Landgrafenstr. 2 a
44139 Dortmund, Germany
LEAR CORP: Moody's Assigns Loss-Given-Default Ratings
-----------------------------------------------------
In connection with Moody's Investors Service's implementation of
its new Probability-of-Default and Loss-Given-Default rating
methodology for the U.S. Automotive and Equipment sectors, the
rating agency confirmed its B2 Corporate Family Rating for
Lear Corporation. Additionally, Moody's revised or held its
probability-of-default ratings and assigned loss-given-default
ratings on these loans and bond debt obligations:
Projected
Old POD New POD LGD Loss-Given
Debt Issue Rating Rating Rating Default
---------- ------- ------- ------ ----------
Secured Term Loan B2 B2 LGD 4 50%
5.75% Senior Notes B3 B3 LGD 4 61%
Zero-Coupon
Convertible Senior
Notes B3 B3 LGD 4 61%
8.125% Senior Notes B3 B3 LGD 4 61%
8.11% Senior Notes B3 B3 LGD 4 61%
Shelf Senior
Unsecured (P)B3 (P)B3 LGD 4 61%
Shelf Subordinated (P)Caa2 (P)Caa1 LGD 6 97%
Shelf Preferred (P)Caa3 (P)Caa1 LGD 6 97%
Moody's explains that current long-term credit ratings are
opinions about expected credit loss, which incorporate both the
likelihood of default and the expected loss in the event of
default. The LGD rating methodology will disaggregate these two
key assessments in long-term ratings. The LGD rating
methodology will also enhance the consistency in our notching
practices across industries and will improve the transparency
and accuracy of our ratings as our research has shown that
credit losses on bank loans have tended to be lower than those
for similarly rated bonds.
Probability-of-default ratings are assigned only to issuers, not
specific debt instruments, and use the standard Moody's alpha-
numeric scale. They express Moody's opinion of the likelihood
that any entity within a corporate family will default on any of
its debt obligations.
Loss-given-default assessments are assigned to individual rated
debt issues -- loans, bonds, and preferred stock. Moody's
opinion of expected loss are expressed as a percent of principal
and accrued interest at the resolution of the default, with
assessments ranging from LGD1 (loss anticipated to be 0% to 9%)
to LGD6 (loss anticipated to be 90% to 100%).
Headquartered in Southfield, Michigan, Lear Corporation
(NYSE: LEA) -- http://www.lear.com/-- supplies automotive
interior systems and components. Lear provides complete seat
systems, electronic products and electrical distribution systems
and other interior products.
METALDYNE CORP: Moody's Assigns Loss-Given-Default Ratings
----------------------------------------------------------
In connection with Moody's Investors Service's implementation of
its new Probability-of-Default and Loss-Given-Default rating
methodology for the U.S. Automotive and Equipment sectors, the
rating agency confirmed its Caa1 Corporate Family Rating for
Metaldyne Corporation. Additionally, Moody's revised or held
its probability-of-default ratings and assigned loss-given-
default ratings on these loans and bond debt obligations:
Issuer: Metaldyne Corporation
Projected
Old POD New POD LGD Loss-Given
Debt Issue Rating Rating Rating Default
---------- ------- ------- ------ ----------
10% Senior Notes Caa2 Caa2 LGD 4 69%
11% Subordinated
Notes Caa3 Caa3 LGD 6 92%
Issuer: Metaldyne Company LLC
Projected
Old POD New POD LGD Loss-Given
Debt Issue Rating Rating Rating Default
---------- ------- ------- ------ ----------
Senior Secured
Revolving Credit
Facility B3 B2 LGD 2 25%
Senior Secured
Synthetic L/C
Facility B3 B2 LGD 2 25%
Senior Secured
Term Loan D B3 B2 LGD 2 25%
Moody's explains that current long-term credit ratings are
opinions about expected credit loss which incorporate both the
likelihood of default and the expected loss in the event of
default. The LGD rating methodology will disaggregate these two
key assessments in long-term ratings. The LGD rating
methodology will also enhance the consistency in our notching
practices across industries and will improve the transparency
and accuracy of our ratings as our research has shown that
credit losses on bank loans have tended to be lower than those
for similarly rated bonds.
Probability-of-default ratings are assigned only to issuers, not
specific debt instruments, and use the standard Moody's alpha-
numeric scale. They express Moody's opinion of the likelihood
that any entity within a corporate family will default on any of
its debt obligations.
Loss-given-default assessments are assigned to individual rated
debt issues -- loans, bonds, and preferred stock. Moody's
opinion of expected loss are expressed as a percent of principal
and accrued interest at the resolution of the default, with
assessments ranging from LGD1 (loss anticipated to be 0% to 9%)
to LGD6 (loss anticipated to be 90% to 100%).
Headquartered in Plymouth, Mich., Metaldyne Corp --
http://www.metaldyne.com/-- is a leading global designer and
supplier of metal-based components, assemblies and modules for
transportation related powertrain and chassis applications
including engine, transmission/transfer case, wheel end and
suspension, axle and driveline, and noise and vibration control
products to the motor vehicle industry. In Europe, the company
maintains operations in France and Germany.
NACHBARSCHAFTSLADEN E.V.: Creditors' Meeting Slated for Nov. 2
--------------------------------------------------------------
The court-appointed provisional administrator
Nachbarschaftsladen e.V. i.L., Joachim Voigt-Salus, will present
his first report on the Company's insolvency proceedings at a
creditors' meeting at 10:10 a.m. on Nov. 2.
The meeting of creditors and other interested parties will be
held at:
The District Court of Charlottenburg
II. Stock Hall 218
District Court Place 1
14057 Berlin, Germany
The Court will also verify the claims set out in the
administrator's report at 10:00 a.m. on Feb. 15, 2007, at the
same venue.
Creditors have until Dec. 14 to register their claims with the
court-appointed provisional administrator.
The District Court of Charlottenburg opened bankruptcy
proceedings against Nachbarschaftsladen e.V. i.L. on Sept. 15.
Consequently, all pending proceedings against the company have
been automatically stayed.
The Debtor can be reached at:
Nachbarschaftsladen e.V. i.L.
Kamminer Road 32
10589 Berlin, Germany
The administrator can be reached at:
Joachim Voigt-Salus
Rankestrasse 33
10789 Berlin, Germany
NEUBAU GMBH: Claims Registration Ends November 3
------------------------------------------------
Creditors of Neubau GmbH WICO have until Nov. 3 to register
their claims with court-appointed provisional administrator
Holger Lessing.
Creditors and other interested parties are encouraged to attend
the meeting at 10:10 a.m. on Nov. 28 at which time the
administrator will present his first report on the insolvency
proceedings.
The meeting of creditors will be held at:
The District Court of Frankfurt/Main
Hall 2
Building F
Klingerstrasse 20
60313 Frankfurt/Main, Germany
The Court will also verify the claims set out in the
administrator's report during this meeting, while creditors may
constitute a creditors' committee or opt to appoint a new
insolvency manager.
The District Court of Frankfurt/Main opened bankruptcy
proceedings against Neubau GmbH WICO on Aug. 11. Consequently,
all pending proceedings against the company have been
automatically stayed.
The Debtor can be contacted at:
Neubau GmbH WICO
Darmstadter Highway 199
60598 Frankfurt, Germany
The administrator can be contacted at:
Dr. Holger Lessing
Hanauer Highway 287-289
60314 Frankfurt/Main, Germany
Tel: 069/15051300
Fax: 069/15051400
PARKETT DOKTOR: Claims Registration Ends November 2
---------------------------------------------------
Creditors of Parkett Doktor Sudhoff GmbH i.L. have until Nov. 2
to register their claims with court-appointed provisional
administrator Christoph Schulte-Kaubruegger.
Creditors and other interested parties are encouraged to attend
the meeting at 1:20 p.m. on Dec. 6 at which time the
administrator will present his first report on the insolvency
proceedings.
The meeting of creditors will be held at:
The District Court of Dortmund
Hall 3.201
2nd Floor
Court Place 1
44135 Dortmund, Germany
The Court will also verify the claims set out in the
administrator's report during this meeting, while creditors may
constitute a creditors' committee or opt to appoint a new
insolvency manager.
The District Court of Dortmund opened bankruptcy proceedings
against Parkett Doktor Sudhoff GmbH i.L. on Sept. 15.
Consequently, all pending proceedings against the company have
been automatically stayed.
The Debtor can be contacted at:
Parkett Doktor Sudhoff GmbH i.L.
Kupferstr. 5
44577 Castrop-Rauxel, Germany
Attn: Dr. Bernhard Sudhoff, Liquidator
Lette 14 a
59192 Bergkamen, Germany
The administrator can be contacted at:
Dr. Christoph Schulte-Kaubruegger
Rheinlanddamm 199
44139 Dortmund, Germany
PRO-BAU: Claims Registration Ends November 2
--------------------------------------------
Creditors of PRO-BAU Projektentwicklungs-und
Wohnungsbaugesellschaft mbH have until Nov. 2 to register their
claims with court-appointed provisional administrator Manfred
Gottschalk.
Creditors and other interested parties are encouraged to attend
the meeting at 8:30 a.m. on Dec. 4 at which time the
administrator will present his first report on the insolvency
proceedings.
The meeting of creditors will be held at:
The District Court of Bochum
Hall A29
Ground Floor
Principal Establishment
Viktoriastrasse 14
44787 Bochum, Germany
The Court will also verify the claims set out in the
administrator's report during this meeting, while creditors may
constitute a creditors' committee or opt to appoint a new
insolvency manager.
The District Court of Bochum opened bankruptcy proceedings
against PRO-BAU Projektentwicklungs-und Wohnungsbaugesellschaft
mbH on Sept. 14. Consequently, all pending proceedings against
the company have been automatically stayed.
The Debtor can be contacted at:
PRO-BAU Projektentwicklungs-und
Wohnungsbaugesellschaft mbH
Attn: Ruediger Pfannkuche and Volker Kriener, Managers
Gerichtsstrasse 3
58452 Witten, Germany
Attn: Raymond Petzold, Manager
Bonhoefferstr. 36
48493 Wettringen, Germany
The administrator can be contacted at:
Manfred Gottschalk
Kirchender Dorfweg 14
58313 Herdecke, Germany
UM-LOGISTIK-GMBH: Claims Registration Ends November 2
-----------------------------------------------------
Creditors of UM-Logistik-GmbH have until Nov. 2 to register
their claims with court-appointed provisional administrator Olaf
Kupke.
Creditors and other interested parties are encouraged to attend
the meeting at 9:45 a.m. on Nov. 28 at which time the
administrator will present his first report on the insolvency
proceedings.
The meeting of creditors will be held at:
The District Court of Chemnitz
Hall 27
Law Courts Prince Road 21
Chemnitz, Germany
The Court will also verify the claims set out in the
administrator's report during this meeting, while creditors may
constitute a creditors' committee or opt to appoint a new
insolvency manager.
The District Court of Chemnitz opened bankruptcy proceedings
against UM-Logistik-GmbH on Sept. 5. Consequently, all pending
proceedings against the company have been automatically stayed.
The Debtor can be contacted at:
UM-Logistik-GmbH
Attn: Franz-Xaver Eichinger, Manager
Walther-Bogsch-Road 3
09496 Marienberg, Germany
The administrator can be contacted at:
Olaf Kupke
Leipziger Road 58
09113 Chemnitz, Germany
E-mail: tackwagner@aol.com
VEREINS MEDICENT: Claims Registration Ends November 3
-----------------------------------------------------
Creditors of Vereins MEDICENT e.V. have until Nov. 3 to register
their claims with court-appointed provisional administrator
Achim Ahrendt.
Creditors and other interested parties are encouraged to attend
the meeting at 10:50 a.m. on Dec. 4 at which time the
administrator will present his first report on the insolvency
proceedings.
The meeting of creditors will be held at:
The District Court of Hamburg
Hall B 405 (Civil Law Courts)
4th Floor Anbau
Sievkingplatz 1
20355 Hamburg, Germany
The Court will also verify the claims set out in the
administrator's report during this meeting, while creditors may
constitute a creditors' committee or opt to appoint a new
insolvency manager.
The District Court of Hamburg opened bankruptcy proceedings
against Vereins MEDICENT e.V. on Sept. 14. Consequently, all
pending proceedings against the company have been automatically
stayed.
The Debtor can be contacted at:
Vereins MEDICENT e.V.
Dehnhaide 79
22081 Hamburg, Germany
Attn: Michael and Silke Schoenherr, Managers
Oversand 30a
21217 Seevetal, Germany
The administrator can be contacted at:
Dr. Achim Ahrendt
Albert-Einstein-Ring 11/15
22761 Hamburg, Germany
VVB NUTZFAHRZEUGE: Claims Registration Ends November 2
------------------------------------------------------
Creditors of VVB Nutzfahrzeuge GmbH have until Nov. 2 to
register their claims with court-appointed provisional
administrator Olaf Buechler.
Creditors and other interested parties are encouraged to attend
the meeting at 9:10 a.m. on Nov. 30 at which time the
administrator will present his first report on the insolvency
proceedings.
The meeting of creditors will be held at:
The District Court of Hamburg
Hall B 405 (Civil Law Courts)
4th Floor Anbau
Sievkingplatz 1
20355 Hamburg, Germany
The Court will also verify the claims set out in the
administrator's report during this meeting, while creditors may
constitute a creditors' committee or opt to appoint a new
insolvency manager.
The District Court of Hamburg opened bankruptcy proceedings
against VVB Nutzfahrzeuge GmbH on Sept. 4. Consequently, all
pending proceedings against the company have been automatically
stayed.
The Debtor can be contacted at:
VVB Nutzfahrzeuge GmbH
Moorfleeter Str. 48
22113 Hamburg, Germany
Attn: Thorsten Herring, Manager
Hauptstrasse 8
23898 Sirksfelde, Germany
The administrator can be contacted at:
Dr. Olaf Buechler
Herrengraben 3
20459 Hamburg, Germany
===========
G R E E C E
===========
TECHNICAL OLYMPIC: S&P Cuts Ratings on Expected Asset Impairment
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating assigned to Technical Olympic USA Inc. to 'B' from 'B+'.
At the same time, the senior unsecured note rating is lowered to
'B-' from 'B+', and the senior subordinated note rating is
lowered to 'CCC+' from 'B-', both of which reflect structural
subordination relative to senior secured creditors. The outlook
on the company remains negative.
"The downgrades reflect our anticipation of a material
impairment charge caused by an ill-timed investment in the
troubled Transeastern joint venture, combined with our
expectation that ongoing challenges in Technical Olympic's key
Florida markets will negatively affect credit metrics in the
near term," said credit analyst Tom Taillon.
Mr. Taillon added that negative outlook reiterates Standard &
Poor's opinion that weaker homebuilding conditions, specifically
in Technical Olympic's core Florida markets, will continue to
challenge the company in the near term. It also reflects
uncertainty with regard to ongoing distractions related to the
restructuring of the Transeastern debt. Stability in the key
Florida markets and reduced debt levels from inventory
liquidation would be required for the outlook to return to
stable.
=============
H U N G A R Y
=============
BANTA CORP: High Leverage Prompts Moody's to Assign Ba2 Rating
--------------------------------------------------------------
Moody's Investors Service assigned a Ba2 rating to the proposed
senior secured bank credit facility of Banta Corp. The majority
of the proceeds of the proposed facility will fund an
approximately US$390 million special shareholder dividend.
Moody's also assigned a Ba2 corporate family rating, a Ba3
probability of default rating, and an SGL-1 speculative grade
liquidity rating to Banta. The outlook is stable.
The Ba2 corporate family rating reflects relatively high
leverage at closing (3.9 times debt-to-EBITDA), weak industry
prospects, modest EBITDA margins (in the 11-12% range as per
Moody's standard adjustments) and event risk.
The rating also reflects relatively good liquidity, including
expectations for positive free cash flow; a fairly restrictive
credit agreement that somewhat mitigates event risk; and the
company's meaningful scale in comparison to other industry
participants.
Ratings assigned:
Banta Corp.
* Ba2 Corporate Family Rating
* Ba3 Probability of Default Rating
* Ba2 Senior Secured Bank Rating, LGD3, 39
* SGL-1 Speculative Grade Liquidity Rating
* Outlook: Stable
The credit agreement consists of a US$465 million senior secured
term loan and a US$50 million revolving credit facility,
expected to be undrawn at close. Pro forma for the transaction,
Moody's estimates Banta's leverage will rise to 3.9 times debt-
to-EBITDA (as per Moody's standard adjustments and based on
trailing 12 months results through June 30).
Expectations for continued positive free cash flow (after
capital expenditures and the regular annual dividend of
approximately US$18 million) support the stable outlook.
Moody's anticipates Banta will apply a portion of its free cash
flow to debt repayment, resulting in a decline in leverage to
approximately 3 times debt-to-EBITDA by year end 2007 (as per
Moody's standard adjustments).
The SGL-1 rating indicates very good liquidity, based on:
-- Moody's expectation of positive free cash flow over
the next 12 months,
-- full availability under the planned
US$50 million revolver, and
-- covenant cushion (to be finalized) of at least 15%.
Moody's would consider a downgrade or negative outlook if Banta
increased leverage to fund a shareholder reward beyond the
announced US$16 special dividend and modest share repurchase.
Deterioration in margins to the single digit level (as per
Moody's standard adjustments), whether the result of an
inability to cut costs as projected, poor execution of proposed
initiatives in its supply chain management segment, or industry
conditions could also pressure the rating down.
The company is the subject of a hostile bid by Cenveo, and
concerns over event risk limit upward ratings momentum.
Evidence of moderating event risk and the ability and
willingness to repay debt with free cash flow could over time
result in an upgrade or positive outlook.
Banta Corp. provides a combination of printing and digital
imaging solutions to publishers and direct marketers through its
printing services segment, and a range of outsourcing
capabilities through its supply-chain management services. With
headquarters in Menasha, Wisconsin, the company generates
approximately US$1.5 billion of annual revenue, deriving about
three-fourths of that amount from its printing services segment.
=========
I T A L Y
=========
SOTHEBY'S HOLDINGS: Moody's Assigns Loss-Given-Default Ratings
--------------------------------------------------------------
In connection with Moody's Investors Service's implementation of
its new Probability-of-Default and Loss-Given-Default rating
methodology for the United States and Canadian Retail sector,
the rating agency confirmed its Ba3 Corporate Family Rating for
Sotheby's Holdings, Inc.
Additionally, Moody's revised its probability-of-default ratings
and assigned loss-given-default ratings on these loans and bond
debt obligations:
Projected
Old POD New POD LGD Loss-Given
Debt Issue Rating Rating Rating Default
---------- ------- ------- ------ ----------
US$100 Mil. Sr.
Unsecured Notes B1 B2 LGD6 90%
Sr. Unsecured
Shelf Registration (P)B1 (P)B2 LGD6 90%
Moody's explains that current long-term credit ratings are
opinions about expected credit loss, which incorporate both the
likelihood of default and the expected loss in the event of
default. The LGD rating methodology will disaggregate these two
key assessments in long-term ratings. The LGD rating
methodology will also enhance the consistency in Moody's
notching practices across industries and will improve the
transparency and accuracy of Moody's ratings as Moody's research
has shown that credit losses on bank loans have tended to be
lower than those for similarly rated bonds.
Probability-of-default ratings are assigned only to issuers,
not specific debt instruments, and use the standard Moody's
alpha-numeric scale. They express Moody's opinion of the
likelihood that any entity within a corporate family will
default on any of its debt obligations.
Loss-given-default assessments are assigned to individual rated
debt issues -- loans, bonds, and preferred stock. Moody's
opinion of expected loss are expressed as a percent of principal
and accrued interest at the resolution of the default, with
assessments ranging from LGD1 (loss anticipated to be 0% to 9%)
to LGD6 (loss anticipated to be 90% to 100%).
Headquartered in New York City, Sotheby's Holdings, Inc.
(NYSE:BID) -- http://www.search.sothebys.com/-- is the parent
company of Sotheby's worldwide auction businesses, art-related
financing and private sales activities. The Company operates in
34 countries, with principal salesrooms located in New York and
London. The company also regularly conducts auctions in 13
other salesrooms around the world, including Australia, Hong
Kong, France, Italy, the Netherlands, Switzerland and Singapore.
===================
K A Z A K H S T A N
===================
AKTOBEBURSERVICE LLP: Creditors Must File Claims by Nov. 22
-----------------------------------------------------------
The Specialized Inter-Regional Economic Court of Aktube Region
declared LLP Aktobeburservice insolvent.
Creditors have until Nov. 22 to submit written proofs of claim
to:
LLP Aktobeburservice
Altynsarin Str. 31
Aktube
Aktube Region
Kazakhstan
Tel: 8 (3132) 21-30-32
FESTA LLP: Creditors Must File Claims by Nov. 21
------------------------------------------------
The Specialized Inter-Regional Economic Court of East Kazakhstan
Region declared LLP Festa insolvent on Aug. 25. Subsequently,
bankruptcy proceedings were introduced at the company.
Creditors have until Nov. 21 to submit written proofs of claim
to:
LLP Festa
Tekstilshikov Ave. 15/1-101
Ust-Kamenogorsk
East Kazakhstan Region
Kazakhstan
Tel: 8 (3232) 57-33-41
A&K LLP: Proof of Claim Deadline Slated for Nov. 21
---------------------------------------------------
The Specialized Inter-Regional Economic Court of East Kazakhstan
Region declared LLP Firma A&K insolvent on Aug. 25.
Subsequently, bankruptcy proceedings were introduced at the
company.
Creditors have until Nov. 21 to submit written proofs of claim
to:
LLP A&K
Tekstilshikov Ave. 15/1-101
Ust-Kamenogorsk
East Kazakhstan Region
Kazakhstan
Tel: 8 (3232) 57-33-41
KASPYI OIL: Proof of Claim Deadline Slated for Nov. 26
------------------------------------------------------
CJSC Kaspyi Oil Engineering has declared insolvency. Creditors
have until Nov. 26 to submit written proofs of claim to:
CJSC Kaspyi Oil Engineering
Valihanov Str. 8
Atyrau
Atyrau Region
Kazakhstan
Tel: 8 (3272) 59-66-49
OT-KOL LLP: Creditors' Claims Due Nov. 24
-----------------------------------------
The Specialized Inter-Regional Economic Court of Almaty declared
LLP Ot-Kol insolvent on Aug. 28.
Creditors have until Nov. 24 to submit written proofs of claim
to:
LLP Ot-Kol
Office 523
Maulenov Str. 92
Almaty, Kazakhstan
Tel: 8 (3272) 67-65-03
8 (7017) 52-71-62
PROGRESS LLP: Creditors' Claims Due Nov. 24
-------------------------------------------
The Specialized Inter-Regional Economic Court of Almaty declared
LLP Progress insolvent on Aug. 31.
Creditors have until Nov. 24 to submit written proofs of claim
to:
LLP Progress
Office 523
Maulenov Str. 92
Almaty, Kazakhstan
Tel: 8 (3272) 67-65-03
8 (7017) 52-71-62
TENDIK LLP: Claims Registration Ends Nov. 17
--------------------------------------------
The Tax Committee of Almaty Region entered an order placing
LLP Tendik (RNN 53020000030) into compulsory liquidation.
Creditors have until Nov. 17 to submit written proofs of claim
to:
LLP Tendik
Room 208
Jangusurov Str. 113a
Taldykorgan
Almaty Region
Kazakhstan
Tel: 8 (32822) 24-19-77
TRANSSFERA LLP: Court Starts Bankruptcy Procedure
-------------------------------------------------
The Specialized Inter-Regional Economic Court of North
Kazakhstan Region commenced bankruptcy proceedings against
LLP Scientific-Engineering Rail Road Company Nauchno-Injenernaya
Jeleznodorojnaya Kompanya Transsfera on Sept. 12.
TRANSTORGSTROY LLP: Claims Registration Ends Nov. 22
----------------------------------------------------
The Specialized Inter-Regional Economic Court of Aktube Region
declared LLP Transtorgstroy insolvent.
Creditors have until Nov. 22 to submit written proofs of claim
to:
LLP Transtorgstroy
Altynsarin Str. 31
Aktobe
Aktube Region
Kazakhstan
Tel: 8 (3132) 21-30-32
===================
K Y R G Y Z S T A N
===================
EAST-WEST LLC: Claims Filing Period Ends Dec. 13
------------------------------------------------
LLC East-West has declared insolvency. Creditors have until
Dec. 13 to submit written proofs of claim to:
LLC East-West
Suyumbaev Str. 14-64
Bishkek, Kyrgyzstan
Tel: (+996 312) 29-58-01
===========
L A T V I A
===========
LATEKO BANKA: Fitch Revises Outlook to Positive & Keeps B+ IDR
--------------------------------------------------------------
Fitch Ratings changed the Outlook on Latvia-based Lateko Banka's
Issuer Default rating to Positive from Stable. The bank's
ratings are affirmed at Issuer Default B+, Short-term B,
Individual D, and Support 5.
The change in the Outlook reflects the bank's strategy to move
towards domestic business, as well as some improvements in its
funding profile. It is important for this strategy that funding
continues to improve and lengthen, and that capital is injected
on a timely basis to support the bank's growth.
Previously, Lateko had a high level of non-resident business,
primarily servicing CIS, mainly Russian, clients who were making
payments into the EU. While this business will remain, it will
diminish in importance. The target for funding is to be largely
from Latvian residents, and for lending to be 70% resident.
"If Lateko is successful in developing a domestic franchise and
in producing tangible results from it, its IDR may be upgraded,"
says Tim Beck, Director in Fitch's Financial Institutions Group.
"Equally, a failure to do so will likely result in a revision of
the Outlook to Stable."
Straumborg, a family-owned Icelandic investment company,
purchased a majority stake of 51% in Lateko in January 2006.
The previous majority shareholders, two Latvian individuals, own
around 20%. The bank remains small; at end-2005 it was the
ninth largest Latvian bank with a market share of 2.4% of system
assets.
=====================
N E T H E R L A N D S
=====================
ALFA BANK: Forecasts Credit Portfolio to Quadruple in 2008
----------------------------------------------------------
OJSC Alfa Bank expects its retail credit portfolio to reach
US$500 million at the end of the year and US$2 billion by the
end of 2007, CBonds reports.
Rushan Khvesyuk, board chairman of Alfa-Bank, said the figures
were the expected output of the company's investment program,
which aims to develop the group's retail network.
Under the program, Cbonds says, Alfa-Bank will:
-- invest US$120-US$130 million through 2008;
-- increase the number of branches in 11 Russian regions in
2007 and 2008;
-- refrain from regional acquisitions;
-- develop motor and home credit sectors; and
-- keep real overdue debt on retail credits below 12%.
About Alfa Bank
Headquartered in Moscow, Russia, Alfa Bank --
http://www.alfabank.com/-- provides services in every key
sector of the financial service industry, including corporate
banking, retail banking, investment banking, trade finance,
insurance and asset management. Alfa-Bank's branch network has
grown to 121, including subsidiary banks in Russia, Ukraine,
Kazakhstan and the Netherlands.
In 2005 total assets of the Alfa-Bank and its subsidiaries grew
to US$9.8 billion, total equity increased to US$855.8 million,
loan portfolio net of provisions increased to US$5.7 billion.
The net profit for a year 2005 was US$180.6 million.
* * *
As reported in TCR-Europe on Oct. 6, Fitch Ratings assigned Alfa
MTN Issuance Limited's US$400 million 7.875% notes issue due
October 2009 a Long-term BB- rating. The proceeds from the
issue will be on-lent to Alfa-Bank, rated Issuer Default BB-
/Outlook Stable, Short-term B, Support 4, Individual C/D, and
National Long-term A+/Outlook Stable.
As reported in TCR-Europe on Sept. 12, Fitch Ratings upgraded
Russia-based Alfa Bank's ratings to Issuer Default BB- from B+,
Individual C/D from D and National Long-term to A+ from A. The
Outlooks on the Issuer Default and National Long-term ratings
remain Stable. Alfa's other ratings are affirmed at Short-term
B and Support 4.
Alfa's outstanding senior unsecured debt issues are also
upgraded to BB- from B+ and its subordinated debt issue due
December 2015 to B+ from B-. The two-notch upgrade of the
subordinated debt reflects the rules-based, rather than
recoveries-based, approach to assigning Recovery Ratings to
issues of entities rated BB- and above.
As reported in TCR-Europe on July 17, Moody's Investors Service
upgraded Alfa Bank's Financial Strength Rating to D from D- and
changed its outlook to stable from positive.
At the same time, the bank's Ba2 long-term foreign currency
deposit and senior unsecured debt ratings have been affirmed
with their corresponding outlooks changed to stable. The bank's
Not-Prime short-term foreign currency deposit and debt ratings
and their outlook remain unchanged.
EURO GALAXY: Moody's Assigns Low-B Ratings to Two Note Classes
--------------------------------------------------------------
Moody's assigned definitive credit ratings to these eleven
classes of notes issued by Euro Galaxy CLO B.V., a Dutch special
purpose company:
-- EUR88,000,000 Class A-1 Senior Floating Rate Notes
due 2021: Aaa;
-- EUR178,500,000 Class A-2 Senior Floating Rate
Delayed Draw Notes due 2021: Aaa;
-- EUR16,000,000 Class B-1 Senior Floating Rate Notes
due 2021: Aa2;
-- EUR12,000,000 Class B-2 Senior Fixed Rate Notes
due 2021: Aa2;
-- EUR24,500,000 Class C Deferrable Interest
Floating Rate Notes due 2021: A2;
-- EUR14,000,000 Class D Deferrable Interest
Floating Rate Notes due 2021: Baa2;
-- EUR13,500,000 Class E Deferrable Interest
Floating Rate Notes due 2021: Ba2;
-- EUR14,000,000 Class P Combination Notes due 2021: Aa2;
-- EUR4,000,000 Class Q Combination Notes due 2021: Ba1;
-- EUR3,500,000 Class R Combination Notes due 2021: Baa2; and
-- EUR8,275,000 Class S Combination Notes due 2021: Aaa.
Euro 36,500,000 Class F Subordinated Notes due 2021 have also
been issued but are not be rated by Moody's.
The ratings address the expected loss posed to investors by the
legal final maturity in October 2021.
The ratings of the Class Q Combination Notes, Class R
Combination Notes and Class S Combination Notes address the
expected loss posed to investors by the legal final maturity in
October 2021 as a proportion of the Rated Balance, where the
"Rated Balance" is equal, at any time, to the principal amount
of such Combination Notes on the Issue Date (being respectively
EUR4,000,000 for Class Q, EUR3,500,000 for Class R,
EUR 8,275,000 for Class S) minus the aggregate of all payments
made from the issue date to such date, either through interest
or principal payments. It is not an opinion about the ability
of the issuer to pay interest.
The rating of the Class P Combination Notes addresses the
expected loss posed to investors by the legal final maturity in
October 2021 as a proportion of the Rated Balance and of the
Rated Coupon, where the Rated Balance is equal, at any time, to
the principal amount of the Class P Combination Notes on the
closing date plus a Rated Coupon of 3-Months Euribor plus 1.50%
per annum applied on the outstanding Rated Balance minus the
aggregate of all payments made from the closing date to such
date, either through interest or principal payments.
Moody's ratings address only the credit risks associated with
the transaction. Other non-credit risks, such as those
associated with the timing of principal prepayments and other
market risks, have not been addressed and may have a significant
effect on yield to investors.
These definitive ratings are based upon:
-- An assessment of the eligibility criteria and
portfolio guidelines applicable to the future additions
to the portfolio;
-- The protection against losses through the subordination
of the more junior classes of notes to the more
senior classes of notes;
-- The overcollateralization of the Notes;
-- The proposed currency swap transactions, which
insulate the Issuer from the volatility of the
foreign currency exchange rates in respect of
non-Euro denominated obligations; and
-- the proposed interest rate swap transactions,
which substantially mitigate the risk to the Issuer
from the potential fixed/floating interest
mismatch between the collateral portfolio and the Notes;
-- The expertise of AIG Global Investment Corp. (Europe)
Ltd. as a collateral manager; and
-- The legal and structural integrity of the issue.
This transaction is a high yield collateralized loan obligation
related to a collateral portfolio of approximately EUR 375
million, comprised primarily of European senior and mezzanine
loans (with a predominance of senior secured loans) and high
yield bonds. This portfolio is dynamically managed by AIG
Global Investment Corp. (Europe) Ltd. This portfolio will be
partially acquired at closing date and partially during the 9
months ramp-up period in compliance with portfolio guidelines
(which include, among other tests, a diversity score test, a
weighted average rating factor test and a weighted average
spread test). Thereafter, the portfolio of loans will be
actively managed and the portfolio manager will have the option
to buy or sell assets in the portfolio. Any addition or removal
of assets will be subject to a number of portfolio criteria.
The transaction is arranged by Morgan Stanley.
GOODYEAR TIRE: Moody's Assigns Loss-Given-Default Ratings
----------------------------------------------------------
In connection with Moody's Investors Service's implementation of
its new Probability-of-Default and Loss-Given-Default rating
methodology for the U.S. Automotive and Equipment sectors, the
rating agency confirmed its B1 Corporate Family Rating for The
Goodyear Tire & Rubber Company. Additionally, Moody's revised
or held its probability-of-default ratings and assigned loss-
given-default ratings on these loans and bond debt obligations:
Issuer: The Goodyear Tire & Rubber Company
Projected
Old POD New POD LGD Loss-Given
Debt Issue Rating Rating Rating Default
---------- ------- ------- ------ ----------
First Lien Credit
Facility Ba3 Ba1 LGD 2 10%
Second Lien Term
Loan B2 Ba3 LGD 3 35%
Third Lien Secured
Term Loan B3 B2 LGD 4 63%
11% Senior Secured
Notes B3 B2 LGD 4 63%
Floating Rate Senior
Secured Notes B3 B2 LGD 4 63%
9% Senior Notes B3 B2 LGD 4 63%
6-5/8% Senior Notes B3 B3 LGD 6 94%
8-1/2% Senior Notes B3 B3 LGD 6 94%
6-3/8% Senior Notes B3 B3 LGD 6 94%
7-6/7% Senior Notes B3 B3 LGD 6 94%
7% Senior Notes B3 B3 LGD 6 94%
Senior Unsecured
Convertible Notes B3 B3 LGD 6 94%
Issuer: Goodyear Dunlop Tires Europe B.V.
Projected
Old POD New POD LGD Loss-Given
Debt Issue Rating Rating Rating Default
---------- ------- ------- ------ ----------
Euro Revolving
Credit Facilities B1 Ba1 LGD 2 10%
Euro Secured
Term Loan B1 Ba1 LGD 2 10%
Moody's explains that current long-term credit ratings are
opinions about expected credit loss which incorporate both the
likelihood of default and the expected loss in the event of
default. The LGD rating methodology will disaggregate these two
key assessments in long-term ratings. The LGD rating
methodology will also enhance the consistency in our notching
practices across industries and will improve the transparency
and accuracy of our ratings as our research has shown that
credit losses on bank loans have tended to be lower than those
for similarly rated bonds.
Probability-of-default ratings are assigned only to issuers, not
specific debt instruments, and use the standard Moody's alpha-
numeric scale. They express Moody's opinion of the likelihood
that any entity within a corporate family will default on any of
its debt obligations.
Loss-given-default assessments are assigned to individual rated
debt issues -- loans, bonds, and preferred stock. Moody's
opinion of expected loss are expressed as a percent of principal
and accrued interest at the resolution of the default, with
assessments ranging from LGD1 (loss anticipated to be 0% to 9%)
to LGD6 (loss anticipated to be 90% to 100%).
The Goodyear Tire & Rubber Company (Goodyear) is a manufacturer
of tires and rubber products, engaging in operations in most
regions of the world.
LFEC IV: Moody's Rates EUR7.4-Mln Class V Mezzanine Notes at Ba3
----------------------------------------------------------------
Moody's assigned credit ratings to these eight classes of Notes
issued and one Revolving Facility entered into by LFEC IV B.V.,
a Dutch special purpose company:
-- EUR26,000,000 Class I-D Senior Floating Rate
Delayed Funding Notes due 2022: Aaa
-- EUR158,300,000 Class I-N Senior Floating Rate Notes
due 2022: Aaa;
-- EUR30,000,000 Revolving Facility: Aaa;
-- EUR26,300,000 Class II Senior Floating Rate Notes
due 2022: Aa2;
-- EUR11,700,000 Class III Deferrable Mezzanine
Floating Rate Notes due 2022: A2;
-- EUR19,900,000 Class IV Deferrable Mezzanine
Floating Rate Notes due 2022: Baa3;
-- EUR7,400,000 Class V Deferrable Mezzanine
Floating Rate Notes due 2022: Ba3;
-- EUR6,400,000 Class P Combination Notes due 2022: Aaa; and
-- EUR25,400,000 Class Q Combination Notes due 2022: Aaa.
EUR27,200,000 Subordinated Notes due 2022 have also been issued
but are not be rated by Moody's.
The ratings address the expected loss posed to investors by the
legal final maturity in 2022. Moody's ratings address only the
credit risks associated with the transaction. Other non-credit
risks, such as those associated with the timing of principal
prepayments and other market risks, have not been addressed and
may have a significant effect on yield to investors.
The rating of the Class P Combination Notes addresses the
expected loss posed to the investors by the legal final maturity
in 2022 as a proportion of the Rated Balance, where the Rated
Balance is equal, at any time, to the principal amount of the
Class P Combination Notes on the closing date minus the
aggregate of all payments made from the closing date to such
date, either through interest or principal payments.
The rating assigned to the Class Q Combination Notes by Moody's
addresses the expected loss posed to the investors by the legal
final maturity in 2022 as a proportion of the Rated Balance and
of the Rated Coupon, where the Rated Balance is equal, at any
time, to the principal amount of the Class Q Combination Notes
on the closing date plus a Rated Coupon of 0.25% per annum
applied on the outstanding Rated Balance minus the aggregate of
all payments made from the closing date to such date, either
through interest or principal payments.
These ratings are based upon:
-- An assessment of the eligibility criteria and
portfolio guidelines applicable to the future additions
to the portfolio;
-- The protection against losses through the subordination
of the more junior classes of notes to the more
senior classes of notes;
-- The overcollateralization of the Notes;
-- The currency swap transactions, which insulate the
Issuer from the volatility of the foreign
currency exchange rates in respect of non-Euro
denominated obligations;
-- The expertise of the Leveraged Funds Group of
BNP Paribas as collateral manager; and
-- The legal and structural integrity of the issue.
This transaction is a high yield collateralized loan obligation
related to a collateral portfolio of EUR301 million, comprised
primarily of senior secured loan obligations (at least 90% of
the portfolio) senior unsecured loan obligations and mezzanine
loans issued primarily by companies located in Western Europe.
This portfolio is dynamically managed by the Leveraged Funds
Group of BNP Paribas. This portfolio will be partially acquired
at closing date (target 75%) and partially during the 365 days
ramp-up period in compliance with the Eligibility Criteria, the
Portfolio Profile Tests, the Coverage Tests and the Collateral
Quality Tests. Thereafter, the portfolio of loans will be
actively managed and the portfolio manager will have the option
to buy or sell assets in the portfolio. Any addition or removal
of assets will be subject to a number of portfolio criteria.
The transaction is arranged by BNP Paribas.
UNITED BISCUITS: Blackstone & PAI to Buy Business for GBP1.6 Bln
----------------------------------------------------------------
United Biscuits Group has reached an agreement to sell UB in its
entirety to a consortium made up of The Blackstone Group and PAI
Partners for GBP1.6 billion (US$3 billion).
The purchase will be financed through an equal combination of
equity from Blackstone and PAI, and debt financing, The
Associated Press reports. The buyers expect to complete the
deal by December. United Biscuits will be owned equally by both
companies.
"We are attracted to United Biscuits' market position as well as
its existing and new product lines," David Blitzer, senior
managing director of The Blackstone Group, was quoted by the
International Herald Tribune as saying.
Simon Bowers of The Guardian says that the company's backers
Cinven, PAI and MidOcean Partners decided against a stock market
flotation after receiving an offer from Blackstone and PAI
In 2001, Cinven, MidOcean, PAI and Kraft Foods bought United
Biscuits with Cinven and MidOcean each holding a 30% stake in
the business, and PAI 15%.
According Jamie Cregan of Food Business Review, Kraft sold its
25% stake early this year. In February 2006, Goldman Sachs was
appointed to handle the sale of the company after Cinven and
MidOcean opted to sell their stake, Mr. Cregan relates.
The deal is subject to the clearance by the European Commission
as well as consent of the U.K. Pension Regulator. UB will also
be informing all relevant employment bodies as required.
UB is the number one player in the U.K. biscuit market with
well-known household brands such as McVitie's, go ahead! and
Jacob's. UB is also the number two business in the biscuit
markets in France and Belgium, joint number one in the
Netherlands, the number two in the U.K. bagged snacks market and
U.K. cake market and the number one in the U.K. branded nuts
market.
"Blackstone has a successful track record of owning and
developing companies such as UB and I believe the Company will
benefit from their involvement," Malcolm Ritchie, UB Chief
Executive, says. "I am delighted that PAI has decided to remain
a shareholder and participate in the next phase of the company's
development and growth. I would also like to thank both Cinven
and MidOcean, our departing shareholders, for their support and
valued advice over the past six years. We delivered a strong
half-year result and we continue to see opportunities to further
develop our key brands in all sectors."
About Blackstone
Headquartered in New York, U.S.A., The Blackstone Group --
http://www.blackstone.com/-- invests on private equity, real
estate, corporate debt, distressed debt, and marketable
alternative investments. The Corporate Advisory Services and
Restructuring & Reorganization Advisory Services businesses have
handled assignments valued at over US$550 billion.
About PAI Partners
Headquartered in Paris, France, PAI Partners --
http://www.paimanagement.com/-- invests in medium- to large-
sized public or private business buyouts in Europe, targeting
the consumer goods or general industrial sectors. Key portfolio
companies include waste management provider Saur, dairy product
leader Yoplait (from Sodiaal), and Italian apparel retailer
Gruppo Coin. The investment company owns and operates
facilities in London, Madrid, Milan, and Paris.
About United Biscuits
Headquartered in London, United Kingdom, United Biscuits Group -
- http://www.unitedbiscuits.com/-- manufactures biscuit and
snacks. UB's biscuit and snack cake brands include stalwarts
BN, Carr's, Cream Crackers, Delacre, Jacob's, Krackawheet, and
McVitie's Digestive Biscuits. Its nut and snack brands include
KP Nuts, McCoy's, and Hula Hoops.
* * *
As reported in the TCR-Europe on Oct. 23, Fitch Ratings has
withdrawn the B-/RR4 ratings on United Biscuits Finance PLC's
10.625% euro-denominated and 10.75% sterling-denominated senior
notes, which were on Rating Watch Positive. This follows the
early redemption of these instruments with the net proceeds from
the sale of UB's Southern European business completed in early
September.
These ratings remain on RWP:
-- Regentrealm Limited Issuer Default rating: B- on RWP;
-- Regentrealm Limited Sr. secured debt: BB-/RR1 on RWP; and
-- United Biscuits Finance PLC IDR: B- on RWP.
As reported in the TCR-Europe on Oct. 20, Moody's downgraded to
B2 from B1 the rating of United Biscuits Finance plc's "first
loss" term loan C. Following the early redemption in October of
the Eurobonds due 2011, which were previously subordinated to
other debt within the capital structure, the senior facilities
currently represent virtually the entire remaining debt of the
group. As such, the ranking of "first loss" Term loan C has
weakened relative to the remaining senior facilities.
Ratings affected:
United Biscuits Finance plc
* B1 corporate family rating affirmed.
Regentrealm Limited
* Ba3 rating of the senior secured credit facilities
A and B and the revolving credit facility affirmed.
* B1 rating of "first loss" term loan C borrowed at
United Biscuits (U.K.) Ltd. lowered to B2.
Moody's said the outlook for all ratings is stable.
UNITED BISCUITS: Transfers Nik Naks, Crunchies Production to UK
---------------------------------------------------------------
Following the acquisition of the brands and certain associated
assets of Nik Naks and Wheat Crunchies in February 2006 from
Golden Wonder, United Biscuits transfers the production of these
brands to its U.K. snacks factories in 2007.
The transition is expected to be complete by Spring 2007 after
which Nik Naks will be made at UB's snacks factory in Ashby-de-
la-Zouch and Wheat Crunchies will be made at UB's Teesside
factory.
"Nik Naks and Wheat Crunchies are proving to be an excellent
addition to the U.K. snack portfolio, Benoit Testard, UB U.K.
Managing Director. The moving of production to UB factories
means that Nik Naks and Wheat Crunchies will benefit from UB's
world class operating procedures and support the long term
future of our UK factories."
UB's acquisition of the brands has boosted its value share of
the bagged snacks market to 17% ACNielsen 52 w/e 7.10.06 and
further strengthened its position as the number two savoury
snacks supplier in the U.K. The company has given its
commitment to the long-term growth and investment behind Nik
Naks and Wheat Crunchies.
As part of its ongoing health and nutrition strategy, UB has
already reduced the saturated fat content by 50% and sodium
content by up to 30% in both brands, as well as removing all
artificial sweeteners. The reformulation makes the brands
healthier whilst retaining the same well-loved taste and
texture.
About United Biscuits
Headquartered in London, United Kingdom, United Biscuits Group -
- http://www.unitedbiscuits.com/-- manufactures biscuit and
snacks. UB's biscuit and snack cake brands include stalwarts
BN, Carr's, Cream Crackers, Delacre, Jacob's, Krackawheet, and
McVitie's Digestive Biscuits. Its nut and snack brands include
KP Nuts, McCoy's, and Hula Hoops.
* * *
As reported in the TCR-Europe on Oct. 23, Fitch Ratings has
withdrawn the B-/RR4 ratings on United Biscuits Finance PLC's
10.625% euro-denominated and 10.75% sterling-denominated senior
notes, which were on Rating Watch Positive. This follows the
early redemption of these instruments with the net proceeds from
the sale of UB's Southern European business completed in early
September.
These ratings remain on RWP:
-- Regentrealm Limited Issuer Default rating: B- on RWP;
-- Regentrealm Limited Sr. secured debt: BB-/RR1 on RWP; and
-- United Biscuits Finance PLC IDR: B- on RWP.
As reported in the TCR-Europe on Oct. 20, Moody's downgraded to
B2 from B1 the rating of United Biscuits Finance plc's "first
loss" term loan C. Following the early redemption in October of
the Eurobonds due 2011, which were previously subordinated to
other debt within the capital structure, the senior facilities
currently represent virtually the entire remaining debt of the
group. As such, the ranking of "first loss" Term loan C has
weakened relative to the remaining senior facilities.
Ratings affected:
United Biscuits Finance plc
* B1 corporate family rating affirmed.
Regentrealm Limited
* Ba3 rating of the senior secured credit facilities
A and B and the revolving credit facility affirmed.
* B1 rating of "first loss" term loan C borrowed at
United Biscuits (U.K.) Ltd. lowered to B2.
Moody's said the outlook for all ratings is stable.
===============
P O R T U G A L
===============
LUSITANO SME: S&P Rates EUR34-Mln Class C Notes at BB
-----------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary
credit ratings to the EUR834.572 million asset-backed floating-
rate notes to be issued by Lusitano SME No. 1 PLC, a special
purpose entity.
At the same time, the issuer will issue EUR28.035 million of
unrated class D asset-backed floating-rate notes and
EUR8.626 million of unrated class E variable return notes. The
class E notes are not backed by assets and will fund the reserve
fund.
The originator is Banco Esp¡rito Santo S.A. At closing, it will
sell to Lusitano SME No. 1 Fundo (a Portuguese securitization
fund) an EUR862.6 million portfolio of secured and unsecured
loans granted to Portuguese SMEs.
"The ratings reflect the transaction's structural enhancements,
such as the swap agreement, the excess spread, amortization of
the notes, and the reserve fund," said Standard & Poor's credit
analyst Antonio Farina.
The preliminary rating on the class B notes also reflects a
guarantee by the European Investment Fund (EIF).
"Under the terms of the guarantee, EIF will irrevocably and
unconditionally guarantee timely payment of interest and
ultimate repayment of principal at the legal maturity date of
the class B notes," Mr. Farina explained.
There will be a quarterly revolving period in the first three
years, during which the pool will be replenished. Triggers will
be in place to stop the purchases and amortize the transaction
if the performance of the pool deteriorates.
Lusitano SME No. 1 will be the first CLO completed by Banco
Esp¡rito Santo of its loans originated to SME clients.
Ratings List
Lusitano SME No. 1 PLC
EUR862.6 Million Asset-Backed Floating-Rate Notes
Prelim. Prelim.
Class(1) rating amount (Mil. EUR)
----- ------ ------
A AAA 759.525
B AAA 40.974
C BB 34.073
D NR 28.035
(1) A fully funded reserve fund of EUR8.626 million will
be provided by class E variable return notes at closing.
The class E notes are not backed by assets.
NR-Not rated.
LUSITANO SME: Fitch Puts BB Rating on EUR34.07-Mln Class C Notes
----------------------------------------------------------------
Fitch Ratings assigned expected ratings to Lusitano SME No. 1
PLC's upcoming issue of EUR834.57 million floating-rate notes
due 2028.
This transaction is a cash flow securitization of a provisional
EUR904 million pool of loans granted by Banco Espirito Santo to
over 1,500 small and medium-sized Portuguese enterprises. This
is the first SME loan cash securitization to be launched by BES
and the ninth securitization of BES overall.
-- EUR759.53 million Class A: AAA;
-- EUR40.97 million Class B: AAA; and
-- EUR34.07 million Class C: BB.
The final ratings are contingent on the receipt of final
documents conforming to information already received.
The European Investment Fund will guarantee the timely payment
of interest and ultimate repayment of principal on the Class B
notes. The transaction benefits from structural protection via
a principal deficiency ledger to trap excess spread for
predefined amounts of defaulted loans, subordination and a fully
funded reserve fund.
The expected ratings are based on the quality of the collateral,
available credit enhancement, the financial structure of the
transaction, the underwriting and servicing of the collateral,
the guarantee from the EIF and the transaction's legal
structure.
The expected ratings address timely payment of interest and the
repayment of principal by legal final maturity for each note in
accordance with the terms and conditions of the documentation.
The transaction will have a three-year revolving period, during
which maturing and amortizing exposures may be replenished with
other exposures that meet certain eligibility criteria. When
deriving the credit quality of the portfolio, Fitch has used its
proprietary cumulative default rate model for the Portuguese SME
sector.
The issuer is a company with limited liability, incorporated
under the laws of Ireland. The proceeds from the note issuance
will be used to purchase a portfolio of trust preferred
securities issued by primarily banks and insurance companies.
===========
R U S S I A
===========
459 WOOD: Amur Court Names L. Fedotova as Insolvency Manager
------------------------------------------------------------
The Arbitration Court of Amur Region appointed Ms. L. Fedotova
as Insolvency Manager for OJSC 459 Wood Processing Combine. She
can be reached at:
L. Fedotova
Chaykovskogo Str. 171
Blagoveshensk
675000 Amur Region
Russia
The Court commenced bankruptcy proceedings against the company
after finding it insolvent. The case is docketed under Case No.
A04-6338/06-12/187 B.
The Debtor can be reached at:
OJSC 459 Wood Processing Combine
Chaykovskogo Str. 171
Blagoveshensk
675000 Amur Region
Russia
AGRICULTURAL INDUSTRIAL: N. Mutallapov to Manage Assets
-------------------------------------------------------
The Arbitration Court of Bashkortostan Republic appointed Mr. N.
Mutallapov as Insolvency Manager for CJSC Agricultural
Industrial Investment Company (TIN 0254007105). He can be
reached at:
N. Mutallapov
Post User Box 1193
Ufa
450000 Bashkortostan Republic
Russia
The Court commenced bankruptcy proceedings against the company
after finding it insolvent. The case is docketed under Case No.
A07-20491/06-G-GRA.
The Arbitration Court of Bashkortostan Republic is located at:
Oktyabrskoy Revolyutsii Str. 63a
Ufa
Bashkortostan Republic
Russia
The Debtor can be reached at:
CJSC Agricultural Industrial Investment Company
Lenina Str. 62
Baymak
453650 Bashkortostan Republic
Russia
ALFA BANK: Forecasts Credit Portfolio to Quadruple in 2008
----------------------------------------------------------
OJSC Alfa Bank expects its retail credit portfolio to reach
US$500 million at the end of the year and US$2 billion by the
end of 2007, CBonds reports.
Rushan Khvesyuk, board chairman of Alfa-Bank, said the figures
were the expected output of the company's investment program,
which aims to develop the group's retail network.
Under the program, Cbonds says, Alfa-Bank will:
-- invest US$120-US$130 million through 2008;
-- increase the number of branches in 11 Russian regions in
2007 and 2008;
-- refrain from regional acquisitions;
-- develop motor and home credit sectors; and
-- keep real overdue debt on retail credits below 12%.
About Alfa Bank
Headquartered in Moscow, Russia, Alfa Bank --
http://www.alfabank.com/-- provides services in every key
sector of the financial service industry, including corporate
banking, retail banking, investment banking, trade finance,
insurance and asset management. Alfa-Bank's branch network has
grown to 121, including subsidiary banks in Russia, Ukraine,
Kazakhstan and the Netherlands.
In 2005 total assets of the Alfa-Bank and its subsidiaries grew
to US$9.8 billion, total equity increased to US$855.8 million,
loan portfolio net of provisions increased to US$5.7 billion.
The net profit for a year 2005 was US$180.6 million.
* * *
As reported in TCR-Europe on Oct. 6, Fitch Ratings assigned Alfa
MTN Issuance Limited's US$400 million 7.875% notes issue due
October 2009 a Long-term BB- rating. The proceeds from the
issue will be on-lent to Alfa-Bank, rated Issuer Default BB-
/Outlook Stable, Short-term B, Support 4, Individual C/D, and
National Long-term A+/Outlook Stable.
As reported in TCR-Europe on Sept. 12, Fitch Ratings upgraded
Russia-based Alfa Bank's ratings to Issuer Default BB- from B+,
Individual C/D from D and National Long-term to A+ from A. The
Outlooks on the Issuer Default and National Long-term ratings
remain Stable. Alfa's other ratings are affirmed at Short-term
B and Support 4.
Alfa's outstanding senior unsecured debt issues are also
upgraded to BB- from B+ and its subordinated debt issue due
December 2015 to B+ from B-. The two-notch upgrade of the
subordinated debt reflects the rules-based, rather than
recoveries-based, approach to assigning Recovery Ratings to
issues of entities rated BB- and above.
As reported in TCR-Europe on July 17, Moody's Investors Service
upgraded Alfa Bank's Financial Strength Rating to D from D- and
changed its outlook to stable from positive.
At the same time, the bank's Ba2 long-term foreign currency
deposit and senior unsecured debt ratings have been affirmed
with their corresponding outlooks changed to stable. The bank's
Not-Prime short-term foreign currency deposit and debt ratings
and their outlook remain unchanged.
AMUR-FUEL: Amur Court Starts Bankruptcy Supervision Procedure
-------------------------------------------------------------
The Arbitration Court of Amur Region commenced bankruptcy
supervision procedure on LLC Amur-Fuel. The case is docketed
under Case No. A04-4195/06-6/104 b.
The Temporary Insolvency Manager is:
E. Paskannyj
Amurskaya Str. 279/1
675000 Blagoveshensk Region
Russia
The Debtor can be reached at:
LLC Amur-Fuel
Sergeevka
Blagoveshenskiy Region
675513 Amur Region
Russia
AMUR OJSC: Primorye Bankruptcy Hearing Slated for Mar. 7
--------------------------------------------------------
The Arbitration Court of Primorye Region will convene on
March 7, 2007, to hear the bankruptcy supervision procedure on
OJSC Amur. The case is docketed under Case No. A51-8568/
06 21-252-b.
The Temporary Insolvency Manager is:
V. Kudinov
Verkhneportovaya Str. 66-137
690003 Vladivostok Region
Russia
The Debtor can be reached at:
OJSC Amur
Zarudnichnaya Str. 40
Partizansk
692850 Primorye Region
Russia
AUTO-AGGREGATE: Ivanovo Bankruptcy Hearing Slated for Feb. 12
-------------------------------------------------------------
The Arbitration Court of Ivanovo Region will convene at 1:00
p.m. on Feb. 12, 2007, to hear the bankruptcy supervision
procedure on OJSC Auto-Aggregate. The case is docketed under
Case No. A17-1793/06-10-B.
The Temporary Insolvency Manager is:
A. Popov
Post User Box 345
115230 Moscow-230
Russia
The Arbitration Court of Ivanovo Region is located at:
B. Khmelnitskogo Str. 59B
Ivanovo Region
Russia
The Debtor can be reached at:
OJSC Auto-Aggregate
2nd Shuyskaya Str. 1
Kineshma
Ivanovo Region
Russia
DAL-LEASING: Khabarovsk Court Starts Bankruptcy Supervision
-----------------------------------------------------------
The Arbitration Court of Khabarovsk Region commenced bankruptcy
supervision procedure on CJSC Dal-Leasing. The case is docketed
under Case No. A73-8775/2006-38.
The Temporary Insolvency Manager is:
G. Chmutina
Office 806
Shernova Str. 56a
680000 Khabarovsk Region
Russia
The Debtor can be reached at:
CJSC Dal-Leasing
Kalinina Str. 107
680028 Khabarovsk Region
Russia
LEMESHINSKAYA: Court Names E. Pukhova as Insolvency Manager
-----------------------------------------------------------
The Arbitration Court of Vladimir Region appointed Ms. E.
Pukhova as Insolvency Manager for LLC Weaving Mill Lemeshinskaya
Manufacture. She can be reached at:
E. Pukhova
Velizhskaya 8-615
153022 Ivanovo Region
Russia
The Court commenced bankruptcy proceedings against the company
after finding it insolvent. The case is docketed under Case No.
A11-5482/2006-K1-361B.
The Arbitration Court of Vladimir Region is located at:
Oktyabrskiy Pr. 14
600025 Vladimir Region
Russia
The Debtor can be reached at:
LLC Weaving Mill Lemeshinskaya Manufacture
Velizhskaya 8-615
153022 Ivanovo Region
Russia
MINERAL LLC: Court Names S. Gavryutina as Insolvency Manager
------------------------------------------------------------
The Arbitration Court of Ulyanovsk Region appointed Ms. S.
Gavryutina as Insolvency Manager for LLC Mineral. She can be
reached at:
S. Gavryutina
Office 37
Krymova Str. 12
432071 Ulyanovsk Region
Russia
The Court commenced bankruptcy proceedings against the company
after finding it insolvent. The case is docketed under Case No.
A72-5324/06-19/49-B.
The Debtor can be reached at:
LLC Mineral
Silikatnyj
Sengileevskiy Region
Ulyanovsk Region
Russia
OPOCHETSKIY BUTTER: Court Names N. Vereshak to Manage Assets
------------------------------------------------------------
The Arbitration Court of Pskov Region appointed Mr. N. Vereshak
as Insolvency Manager for CJSC Opochetskiy Butter and Cheese
Making Factory. He can be reached at:
N. Vereshak
Post User Box 169
Central Post Office
Tver Region
Russia
The Court commenced bankruptcy proceedings against the company
after finding it insolvent. The case is docketed under Case No.
A52-101/2006/4.
The Debtor can be reached at:
CJSC Opochetskiy Butter and Cheese Making Factory
2nd Leninskaya Str. 19
Opochka
Pskov region
Russia
POLOVINSKIY BUTTER: Court Names V. Vinogradov to Manage Assets
--------------------------------------------------------------
The Arbitration Court of Kurgan Region appointed Mr. V.
Vinogradov as Insolvency Manager for OJSC Polovinskiy Butter
Making Factory. He can be reached at:
V. Vinogradov
50 Let Profsoyuzov Str. 61
644065 Omsk Region
Russia
The Court commenced bankruptcy proceedings against the company
after finding it insolvent. The case is docketed under Case No.
A34-2259/2006.
The Debtor can be reached at:
OJSC Polovinskiy Butter Making Factory
Polovinnoye
641000 Kurgan Region
Russia
RAJ-REINFORCED-CONCRETE: Names V. Vinogradov to Manage Assets
-------------------------------------------------------------
The Arbitration Court of Khanty-Mansiyskiy Autonomous Region
appointed Mr. V. Vinogradov as Insolvency Manager for CJSC Raj-
Reinforced-Concrete. He can be reached at:
V. Vinogradov
50 Let Profsoyuzov Str. 61
644065 Omsk Region
Russia
The Court commenced bankruptcy proceedings against the company
after finding it insolvent. The case is docketed under Case No.
A-75-6465/2006.
The Arbitration Court of Khanty-Mansiyskiy Autonomous Region is
located at:
Lenina Str. 54/1
Khanty-Mansiysk Autonomous Region
Russia
The Debtor can be reached at:
CJSC Raj-Reinforced-Concrete
Baza SMU-4
Belyj Yar
Surgutskiy Region
Khanty-Mansiyskiy Autonomous Region
628433 Tyumen Region
Russia
SEVERSTAL OAO: Targets US$1.7 Billion Proceeds from London IPO
--------------------------------------------------------------
OAO Severstal expects to raise US$1.7 billion in fresh funds
from the sale of 15% of its total shares in an initial public
offering in London in November.
Alexei Mordashov, Severstal's main shareholder, is offering 15%
of the company's shares from his stake, effectively cutting his
holdings from 90% to 75%. The IPO would also increase Severstal
shares on free float from a current 10% to 15%.
As reported in the TCR-Europe on Oct. 12, Severstal plans to use
the IPO proceeds to:
-- improve the quality of its production facilities;
-- improve operating efficiencies; and
-- expand its core business, including funding of potential
acquisitions and participation in joint ventures.
"We will be ready for big moves in the future in terms of
mergers and acquisitions," Mr. Mordashov told Reuters. "How far
and to what extent it is difficult to say now."
Aside from providing fresh funds, the IPO would also boost
Severstal's profile with foreign investors. The IPO will also
value the company between US$10 billion to US$20 billion.
The company will commence its road show for the listing on
Oct. 30. Severstal has acquired the service of Citigroup Inc.,
UBS AG and Deutsche Bank AG as joint coordinators and bookrunner
for the London listing.
About Severstal
Headquartered in Cherepovets, Russia, OAO Severstal --
http://www.severstal.com/-- is the country's largest steel
producer, with steel production of 17.1 million tons in 2005.
The Company owns Severstal North America, the fifth largest
integrated steel maker in the U.S. with 2005 production of 2.7
million tons, and Lucchini, Italy's second largest steel group
with 2005 production of 3.5 million tons. Severstal is one of
the world's lowest cost and most profitable steel producers,
with 2005 EBITDA per ton of approximately EUR150 per ton.
As of Dec. 31, 2005, Severstal had US$10.75 billion in total
assets, US$3.66 billion in total liabilities and US$7.09 billion
in total shareholders' equity.
* * *
As reported in TCR-Europe on July 5, Standard & Poor's Ratings
Services kept its 'B+' long-term corporate credit rating on
Russian steelmaker OAO Severstal on CreditWatch with positive
implications following the consolidation of the company's mining
assets.
The rating was placed on CreditWatch on May 26, following the
announcement of a previously agreed merger between Severstal and
Luxembourg-based steelmaker Arcelor S.A. This merger was
cancelled on June 30.
As reported in TCR-Europe on June 28, Fitch Ratings maintained
the Rating Watch Positive status for OAO Severstal's ratings of
Issuer Default BB-, senior unsecured BB-, Short-term B and
National Long-term A+.
SUAL GROUP: Initial Investment on Merged Co Pegged at US$16 Bln
----------------------------------------------------------------
RusAl, SUAL Group and Glencore International will inject US$16
billion into United Company RusAL to develop the merged
businesses within the next five years, RIA Novosti reports
citing a senior RusAl official.
"Our ambition is to have a capitalization of at least US$100
billion, and we plan to invest some US$16 billion [in the
company's development] -- a little over US$3 billion a year,"
Alexander Lipschitz, RusAL's Director for International and
Special Projects, told RIA Novosti.
Mr. Lipschitz added that when the merged company reached the
target capitalization, it would enter the metals and energy
sectors.
As reported in the TCR-Europe on Oct. 11, the combined company
will own bauxite mining, alumina refinery, aluminium smelting
and foil production facilities. Under the terms of the share-
for-share deal, RusAl will own 66% of the new company, with Sual
owning 22% and Glencore 12%.
About Glencore
Headquartered in Baar, Switzerland, Glencore International AG --
http://www.glencore.com/-- engages in the smelting, refining,
mining, processing, purchasing, selling and marketing of metals
and minerals, energy products and agricultural products.
Glencore operates on a global scale, marketing physical
commodities produced in its industrial assets or purchased from
third parties to industrial consumers, such as those in the
automotive, steel, power generation, oil and food processing
industries. Energy products and commodities are marketed and
coordinated primarily in Glencore's headquarters in Baar,
Switzerland and through the offices of its subsidiaries in
London, Stamford and Singapore.
About RusAl
Headquartered in Moscow, Russia, Russky Alyuminiyum --
http://www.rusal.com/-- produces and smelts aluminium with
US$6.65 billion in revenues in 2005. The group produced 2.714
million tons of primary aluminium in 2005. RusAl employs about
50,000 people in nine Russian regions and thirteen countries.
About SUAL
Headquartered in Moscow, Russia, Siberian-Urals Aluminium
Company -- http://www.sual.com/-- produces and smelts aluminium
and ranks amongst the world's top ten producers. It comprises
18 businesses that are located in nine Russian regions and in
Ukraine, Zaporozhye City, are involved in the production of
bauxite, alumina, primary aluminium, silicon, semi-finished and
finished aluminium products. The Group's revenue for the year
ended Dec. 31, 2005, was US$2.7 billion. It has 60,000
employees.
* * *
Standard & Poor's Ratings Services assigned its 'BB-'long-term
corporate credit rating to SUAL International Ltd. The outlook
is stable. Standard & Poor's also assigned its 'ruAA-' Russian
national scale rating to SUAL.
At the same time, Moody's Investors Service, assigned 'Ba3'
corporate family rating to SUAL International Ltd. Outlook is
stable.
TANAS OJSC: Court Names A. Lebedev as Insolvency Manager
--------------------------------------------------------
The Arbitration Court of Sakha Republic-Yakutiya appointed Mr.
A. Lebedev as Insolvency Manager for OJSC Sewing Factory Tanas.
He can be reached at:
A. Lebedev
8th Marta Str. 65
677015 Yakutsk Region
Russia
The Court commenced bankruptcy proceedings against the company
after finding it insolvent. The case is docketed under Case No.
A58-6826/05.
The Arbitration Court of Sakha Republic-Yakutiya is located at:
Kurashova Str. 28
677000 Sakha Republic-Yakutiya
Russia
The Debtor can be reached at:
OJSC Sewing Factory Tanas
Karla Marksa Str. 23
Neryungri
Sakha Republic-Yakutiya
Russia
TNK-BP HOLDING: Mulls Raising US$1 Bln to Balance Debt Portfolio
----------------------------------------------------------------
OAO TNK-BP Holding considers issuing bonds and taking loans to
balance its debt portfolio, RIA Novosti reports.
James Owens, TNK-BP's chief financial officer, said the company
is reviewing plans to raise around US$1 billion possibly through
raising bank loans and borrowing funds and via debt financing
instruments in 2007.
About TNK-BP
Headquartered Moscow, Russia, TNK-BP Holding OAO --
http://www.tnk-bp.com/-- operates six refineries in Russia and
Ukraine, and markets products through 2,100 retail service
stations operating under TNK and BP brand. TNK owns 56.5% of
TNK-BP Holding, and Onako and Sidanco hold 6.8% and 30.9%,
respectively. The other 5.8% belongs to TNK-BP shareholders.
TNK-BP holds a strategic position as the second largest liquids
producer in the Russian intergraded operating environment,
accounting for approximately 18% of Russia's total crude oil
production.
* * *
Standard & Poor's assigned BB+/Stable foreign currency local
currency ratings to TNK-BP on June 30, 2006.
Moody's assigned Ba2/Positive foreign currency rating to the
company on Jan. 24, 2006.
Fitch assigned BB+/Positive foreign currency rating to TNK-BP on
Feb. 13, 2006, and BB+/Positive local currency rating on Aug.
24, 2005.
VNESHTORGBANK JSC: To Start Chinese Operations in 2008
------------------------------------------------------
JSC Vneshtorgbank will open a branch in China in 2008 to cater
to Russian corporate clients operating in the Asian country, RIA
Novosti reports.
"We will establish a branch [in China] whose services will focus
on Russian corporate clients," Andrei Kostin, VTB Chairman, was
quoted by RIA Novosti as saying.
About Vneshtorgbank
Headquartered in Moscow, Russia, JSC Vneshtorgbank and its
subsidiaries are a leading Russian commercial banking group,
offering a wide range of banking services and conducting
operations in both Russian and international markets.
As of Dec. 31, 2005, the Group had a network of 151 branches,
including 55 branches of VTB, 42 branches of VTB Retail Services
and 54 branches of Industry and Construction Bank, located in
major Russian regions. The Group operates through three
subsidiaries located in the CIS (Armenia, Georgia, Ukraine),
seven subsidiaries located in Western Europe (Austria, Cyprus,
Switzerland, Germany, Luxembourg, France) and Great Britain and
through five representative offices located in India, Italy,
China, Byelorussia and Ukraine.
* * *
As reported in TCR-Europe on July 31, following the recent
upgrade of the Russian sovereign foreign and local currency IDRs
to BBB+ from BBB, Fitch ratings lifted Vneshtorgbank and
Vnesheconombank ratings at:
Vnesheconombank:
-- Upgraded to IDR BBB+ from BBB with a Stable Outlook; and
-- Short-term upgraded to F2 from F3, Support affirmed at 2.
Vneshtorgbank:
-- Upgraded to foreign currency and local currency IDR BBB+
from BBB with a Stable Outlook;
-- Short-term upgraded to F2 from F3;
-- Individual affirmed at C/D; and
-- Support affirmed at 2.
VOLOGDA-PROM-WOOD-EXPORT: Names A. Belyaev to Manage Assets
-----------------------------------------------------------
The Arbitration Court of Vologda Region appointed Mr. A. Belyaev
as Insolvency Manager for CJSC Vologda-Prom-Wood-Export. He can
be reached at:
A. Belyaev
Post User Box 38
Cherepovets
162606 Vologda Region
Russia
The Court commenced bankruptcy proceedings against the company
after finding it insolvent. The case is docketed under Case No.
A13-3839/2006-22.
The Arbitration Court of Vologda Region is located at:
Hall 4
Gertsena Str. 1a
Vologda Region
Russia
The Debtor can be reached at:
CJSC Vologda-Prom-Wood-Export
Pushkinskaya Str. 4
Suda
Cherepovetskiy Region
Vologda Region
Russia
YALUTOROVSKIY TIMBER: Names S. Vinnik as Insolvency Manager
-----------------------------------------------------------
The Arbitration Court of Tyumen Region appointed Mr. S. Vinnik
as Insolvency Manager for OJSC Yalutorovskiy Timber Mill. He
can be reached at:
S. Vinnik
Post User Box 2699
Central Post Office
644099 Omsk Region
Russia
The Court commenced bankruptcy proceedings against the company
after finding it insolvent. The case is docketed under Case No.
A-70-5841/3-06.
The Arbitration Court of Tyumen Region is located at:
Khokhryakova Str. 77
627000 Tyumen Region
Russia
The Debtor can be reached at:
OJSC Yalutorovskiy Timber Mill
Revolyutsii Str. 132
Yalutorovsk
Tyumen Region
Russia
=====================
S W I T Z E R L A N D
=====================
CABLECOM LUXEMBOURG: Moody's Rates Proposed Notes at (P)B3
----------------------------------------------------------
Moody's Investors Service rated a (P)B3 the proposed senior
notes in the amount of EUR300 million to be issued by Cablecom
Luxembourg S.C.A. Concurrently, Moody's affirmed Cablecom's
existing ratings. The outlook on the ratings is stable.
Ratings affected:
Cablecom Luxembourg S.C.A.
* Corporate Family rating at B1
* CHF1,330 million senior secured bank facility at B1
* EUR290 million senior notes due 2014 at B3
Moody's notes that the proceeds of the issuance will be used to
repay the existing EUR290 million senior notes on or after 15
April 2007 -- a call redemption date. The notes will be
defeased until the call date. The proceeds of the newly issued
notes will be placed in a defeasance account to fund the
redemption. Since the notes are funded for their repayment,
Moody's believes that the risk of non-payment on the existing
bonds is significantly reduced.
The proposed refinancing of the existing notes is one of the
steps towards Cablecom's fold-in into the corporate structure of
UPC Holding B.V. Cablecom is indirectly owned by Liberty Global
Inc., a parent company of UPC. The notes will become
obligations of UPC Holding B.V. once Cablecom is absorbed in
UPC's corporate and capital structure. In this case, the notes
will be governed by the terms and conditions substantially
similar to those of the existing notes at UPC Holding level.
Due to the relevant provisions in Dutch law, the notes will
benefit from a third ranking pledge over UPC's shares versus
first and second ranking pledges for the existing notes. This
will, however, be mitigated by the intercreditor agreement which
stipulates that all the notes will share equally in the security
package in the event of insolvency.
Moody's understands that as a part of this issuance, UPC has
created an option to refinance through a combination of
borrowings under the UPC Broadband Holding Bank Facility and/or
available cash EUR550 million paid-in-kind notes issued by
Liberty Global Switzerland to acquire Cablecom and the existing
senior secured bank facility at Cablecom Luxembourg S.C.A. Once
the fold-in is finalized, Moody's will withdraw its corporate
family rating at Cablecom's level.
On a combined pro-forma basis, including Cablecom fold-in with
all the required refinancing and excluding the EUR290 million
senior notes, UPC is currently leveraged at 5.8x Total Debt to
EBITDA or 5.5x Net Debt to EBITDA on an annualized H1 2006 basis
excluding any relevant pension and lease adjustments. On a
stand-alone basis, UPC currently reports leverage at 4.6x Total
Debt to EBITDA as defined by the UPC Broadband Holding bank
facility as per June 30, 2006.
UPC's ratings currently rely on Moody's assumption that UPC
could fold-in Cablecom's corporate and capital structure once
its combined leverage drops below 5.0x at UPC Holding level and
4.0x at UPC Broadband Holding level, the leverage parameters
enshrined in the bond and the bank documentation. Subject to
UPC's adhering to its publicly stated leverage targets, Moody's
is likely to affirm UPC's ratings following the fold-in.
Cablecom Luxembourg, whose operating company is located in
Zurich, Switzerland, is a leading provider of analog cable,
digital cable, Internet broadband and telephony services in
Switzerland. In H1 2006, the company generated CHF472.6 million
in revenue and CHF191.2 million in EBITDA.
SUAL GROUP: Initial Investment on Merged Co Pegged at US$16 Bln
----------------------------------------------------------------
RusAl, SUAL Group and Glencore International will inject US$16
billion into United Company RusAL to develop the merged
businesses within the next five years, RIA Novosti reports
citing a senior RusAl official.
"Our ambition is to have a capitalization of at least US$100
billion, and we plan to invest some US$16 billion [in the
company's development] -- a little over US$3 billion a year,"
Alexander Lipschitz, RusAL's Director for International and
Special Projects, told RIA Novosti.
Mr. Lipschitz added that when the merged company reached the
target capitalization, it would enter the metals and energy
sectors.
As reported in the TCR-Europe on Oct. 11, the combined company
will own bauxite mining, alumina refinery, aluminium smelting
and foil production facilities. Under the terms of the share-
for-share deal, RusAl will own 66% of the new company, with Sual
owning 22% and Glencore 12%.
About Glencore
Headquartered in Baar, Switzerland, Glencore International AG --
http://www.glencore.com/-- engages in the smelting, refining,
mining, processing, purchasing, selling and marketing of metals
and minerals, energy products and agricultural products.
Glencore operates on a global scale, marketing physical
commodities produced in its industrial assets or purchased from
third parties to industrial consumers, such as those in the
automotive, steel, power generation, oil and food processing
industries. Energy products and commodities are marketed and
coordinated primarily in Glencore's headquarters in Baar,
Switzerland and through the offices of its subsidiaries in
London, Stamford and Singapore.
About RusAl
Headquartered in Moscow, Russia, Russky Alyuminiyum --
http://www.rusal.com/-- produces and smelts aluminium with
US$6.65 billion in revenues in 2005. The group produced 2.714
million tons of primary aluminium in 2005. RusAl employs about
50,000 people in nine Russian regions and thirteen countries.
About SUAL
Headquartered in Moscow, Russia, Siberian-Urals Aluminium
Company -- http://www.sual.com/-- produces and smelts aluminium
and ranks amongst the world's top ten producers. It comprises
18 businesses that are located in nine Russian regions and in
Ukraine, Zaporozhye City, are involved in the production of
bauxite, alumina, primary aluminium, silicon, semi-finished and
finished aluminium products. The Group's revenue for the year
ended Dec. 31, 2005, was US$2.7 billion. It has 60,000
employees.
* * *
Standard & Poor's Ratings Services assigned its 'BB-'long-term
corporate credit rating to SUAL International Ltd. The outlook
is stable. Standard & Poor's also assigned its 'ruAA-' Russian
national scale rating to SUAL.
At the same time, Moody's Investors Service, assigned 'Ba3'
corporate family rating to SUAL International Ltd. Outlook is
stable.
=============
U K R A I N E
=============
AGROKOM LLC: Court Names Irina Stuk to Liquidate Assets
-------------------------------------------------------
The Economic Court of Chernigiv Region appointed Irina Stuk as
Liquidator/Insolvency Manager for Agricultural LLC Agrokom. The
Court commenced bankruptcy proceedings against the company after
finding it insolvent on Sept. 12. The case is docketed under
Case No. 5/169 B.
The Economic Court of Chernigiv Region is located at:
Miru Avenue 20
14000 Chernigiv Region
Ukraine
The Debtor can be reached at:
Agricultural LLC Agrokom
Fastovtsi
Bahmach District
16550 Chernigiv Region
Ukraine
ARSENAL-CENTER: Odessa Court Names L. Ilyenok as Liquidator
-----------------------------------------------------------
The Economic Court of Odessa Region appointed for LLC Arsenal-
Center (code EDRPOU 32428904). The Court commenced bankruptcy
proceedings against the company after finding it insolvent on
Sept. 21. The case is docketed under Case No. 2/273-06-9110.
The Economic Court of Odessa Region is located at:
Shevchenko Avenue 4
65032 Odessa Region
Ukraine
The Debtor can be reached at:
LLC Arsenal-Center
Staroportofrankivska Str. 95/14
Odessa Region
Ukraine
BANK MRIYA: Fitch Changes Outlook to Positive & Keeps IDR at BB-
----------------------------------------------------------------
Fitch Ratings changed to Positive from Stable the Outlook on the
foreign currency and local currency Issuer Default rating of
Bank Mriya.
All ratings of Mriya are affirmed at foreign currency IDR BB-,
local currency IDR BB, Short-term foreign currency B, Support 3,
and Individual D/E. This follows the revision in the Outlook of
Ukraine's foreign and local currency IDRs of BB- to Positive
from Stable.
The change in Outlooks on the IDRs of Mriya reflects the
potential change to Ukraine's Country Ceiling, as reflected in
the change in Outlook on Ukraine's IDRs.
At present, the Country Ceiling of Ukraine limits the extent to
which support from the shareholders of the bank can be factored
into their foreign currency IDR, and the local currency IDR also
take into account Ukrainian country risks.
Mriya is 98%-owned by Russia's Vneshtorgbank. The IDRs, Short-
term and Support ratings of Mriya reflect the moderate
probability of support being forthcoming from their majority
shareholders, in case of need.
BATIR LLC: Odessa Court Names L. Ilyenok as Insolvency Manager
--------------------------------------------------------------
The Economic Court of Odessa Region appointed Mr. L. Ilyenok as
Liquidator/Insolvency Manager for LLC Batir (code EDRPOU
31977071).
The Court commenced bankruptcy proceedings against the company
after finding it insolvent on Sept. 21. The case is docketed
under Case No. 2/271-06-9109.
The Economic Court of Odessa Region is located at:
Shevchenko Avenue 4
65032 Odessa Region
Ukraine
The Debtor can be reached at:
LLC Batir
Mala Arautska Str. 12/11
Odessa Region
Ukraine
INTERMEDTEH LLC: Court Names Irina Horoz as Insolvency Manager
--------------------------------------------------------------
The Economic Court of Lviv Region appointed Irina Horoz as
Liquidator/Insolvency Manager for LLC Intermedteh (code EDRPOU
13798554).
The Court commenced bankruptcy proceedings against the company
after finding it insolvent on April 11. The case is docketed
under Case No. 6/151-4/84.
The Economic Court of Lviv Region is located at:
Lichakivska Str. 81
79010 Lviv Region
Ukraine
The Debtor can be reached at:
LLC Intermedteh
Ivasuk Str. 139
79017 Lviv Region
Ukraine
KORVET: Court Names Svitlana Safronova as Insolvency Manager
------------------------------------------------------------
The Economic Court of Odessa Region appointed Svitlana Safronova
as Liquidator/Insolvency Manager for LLC Korvet (code EDRPOU
31976411).
The Court commenced bankruptcy proceedings against the company
after finding it insolvent on Sept. 8. The case is docketed
under Case No. 32/194-06-7218.
The Economic Court of Odessa Region is located at:
Shevchenko Avenue 4
65032 Odessa Region
Ukraine
The Debtor can be reached at:
LLC Korvet
Zhukov Avenue 89A/65
Odessa Region
Ukraine
OLG LLC: Lviv Court Names Gennadij Marchuk as Insolvency Manager
----------------------------------------------------------------
The Economic Court of Lviv Region appointed Gennadij Marchuk as
Liquidator/Insolvency Manager for LLC Olg (code EDRPOU
20803089).
The Court commenced bankruptcy proceedings against the company
after finding it insolvent on Nov. 11. The case is docketed
under Case No. 6/259-5/203.
The Economic Court of Lviv Region is located at:
Lichakivska Str. 81
79010 Lviv Region
Ukraine
The Debtor can be reached at:
LLC Olg
Gruntova Str. 1
Lviv Region
Ukraine
PRIVATBANK CJSC: Fitch Revises Rating Outlook to Positive
---------------------------------------------------------
Fitch Ratings revised to Positive from Stable the Outlook on the
foreign currency and local currency Issuer Default rating of
CJSC Privatbank.
All ratings of Privat are affirmed at foreign currency IDR B,
Short-term foreign currency B, Support 4, and Individual D.
This follows the revision in the Outlook of Ukraine's foreign
and local currency IDRs of BB- to Positive from Stable.
The change in Outlook on the IDR of Privat reflects the
increased likelihood of an improvement in the government's
ability to provide support in case of need, as reflected in the
change in the Outlooks on the sovereign IDRs.
Privat's Issuer Default, Short-term and Support ratings reflect
Fitch's view of the strong propensity of the Ukrainian
authorities to provide support for the bank in case of need,
based on Privat's size and importance to the banking sector: it
is the country's largest bank, with shares of approximately 11%
in sector assets and 14% in retail deposits.
However, Fitch again notes the limited ability of the
authorities to provide support if required, as reflected in the
BB- sovereign IDRs.
PROCREDIT UKRAINE: Fitch Revises BB- IDR's Outlook to Positive
--------------------------------------------------------------
Fitch Ratings revised to Positive from Stable the Outlook on the
foreign currency and local currency Issuer Default rating of
ProCredit Bank (Ukraine).
All ratings of ProCredit Ukraine are affirmed at foreign
currency IDR BB-, local currency IDR BB, Short-term foreign and
local currency B, Support 3, Individual D/E, and National Long-
term AAA/Stable. This follows the revision in the Outlook of
Ukraine's foreign and local currency IDRs of BB- to Positive
from Stable.
The change in Outlooks on the IDRs of ProCredit Ukraine reflects
the potential change to Ukraine's Country Ceiling, as reflected
in the change in Outlook on Ukraine's IDRs.
At present, the Country Ceiling of Ukraine limits the extent to
which support from the shareholders of the bank can be factored
into their foreign currency IDR, and the local currency IDR also
take into account Ukrainian country risks.
ProCredit Ukraine is 60%- owned by Germany's ProCredit Holding.
The IDRs, Short-term and Support ratings of ProCredit Ukraine
reflect the moderate probability of support being forthcoming
from their majority shareholders, in case of need.
RADGOSP-PLANT YEVPATORIJSKIJ: Bankruptcy Supervision Starts
-----------------------------------------------------------
The Economic Court of AR Krym Region commenced bankruptcy
supervision procedure on State Enterprise Radgosp-Plant
Yevpatorijskij (code EDRPOU 00412990). The case is docketed
under Case No. 2-6/11905-2006.
The Temporary Insolvency Manager is:
Oleg Chervinskij
Simferopol, Stantsionna Str. 111
AR Krym Region
Ukraine
The Economic Court of AR Krym Region is located at:
Karl Marks Str. 18
Simferopol
95000 AR Krym Region
Ukraine
The Debtor can be reached at:
State Enterprise Radgosp-Plant Yevpatorijskij
Molodizhn Str. 45
Veresayeve
Saki District
AR Krym Region
Ukraine
SOLODOSHI LLC: Court Names V. Ribachuk as Insolvency Manager
------------------------------------------------------------
The Economic Court of Ivano-Frankivsk Region appointed Mr. V.
Ribachuk as Liquidator/Insolvency Manager for LLC Trade House
Solodoshi (code EDRPOU 32941657).
The Court commenced bankruptcy proceedings against the company
after finding it insolvent on Sept. 26. The case is docketed
under Case No. B-1/73.
Pidgiryanka Str. 28/1
78000 Ivano-Frankivsk Region
Ukraine
The Economic Court of Ivano-Frankivsk Region is located at:
Shevchenko Str. 16a
76000 Ivano-Frankivsk Region
Ukraine
The Debtor can be reached at:
LLC Trade House Solodoshi
Galitska Str. 20a
Rogatin
77000 Ivano-Frankivsk Region
Ukraine
UKRAINIAN BEER: AR Krym Court Starts Bankruptcy Supervision
-----------------------------------------------------------
The Economic Court of AR Krym Region commenced bankruptcy
supervision procedure on Ukrainian Beer Company (code EDRPOU
30411752). The case is docketed under Case No. 2-6/14123-2006.
The Temporary Insolvency Manager is:
Vasil Kuhta
Vinogradna Str. 32
Alushta
AR Krym Region
Ukraine
The Economic Court of AR Krym Region is located at:
Karl Marks Str. 18
Simferopol
95000 AR Krym Region
Ukraine
The Debtor can be reached at:
Ukrainian Beer Company
Vinogradna Str. 32
Alushta
AR Krym Region
Ukraine
UKREXIMBANK JSC: Fitch Revises BB- IDR's Outlook to Positive
------------------------------------------------------------
Fitch Ratings changed to Positive from Stable the Outlook on the
foreign currency and local currency Issuer Default rating of
JSC The State Export-Import Bank of Ukraine (Ukreximbank).
All ratings of Ukrexim are affirmed at foreign currency IDR BB-,
Short-term foreign currency B, Support 3, Individual D/E, and
National Long-term AA/Stable. This follows the revision in the
Outlook of Ukraine's foreign and local currency IDRs of BB- to
Positive from Stable.
The change in Outlook on the IDR of Ukrexim reflects the
increased likelihood of an improvement in the government's
ability to provide support in case of need, as reflected in the
change in the Outlooks on the sovereign IDRs.
Ukrexim's Issuer Default, Short-term and Support ratings reflect
Fitch's view of the very strong propensity of the Ukrainian
authorities to provide support for the bank in case of need,
although the ability to provide that support is less certain, as
reflected in Ukraine's BB- IDRs.
Ukrexim is 100%-owned by the state, and non-binding letters of
support from the government have been provided in the offering
circulars of the bank's international debt issues.
UKRSIBBANK JSIB: Fitch Changes Outlook to Positive on BB- IDR
-------------------------------------------------------------
Fitch Ratings changed to Positive from Stable the Outlook on the
foreign currency and local currency Issuer Default rating of
JSIB Ukrsibbank.
All ratings of Ukrsib are affirmed at foreign currency IDR BB-,
local currency IDR BB, Short-term foreign currency B, Support 3,
and Individual D/E. This follows the revision in the Outlook of
Ukraine's foreign and local currency IDRs of BB- to Positive
from Stable.
The change in Outlook on the IDR of Ukrsib reflects the
potential change to Ukraine's Country Ceiling, as reflected in
the change in Outlook on Ukraine's IDRs.
At present, the Country Ceiling of Ukraine limits the extent to
which support from the shareholders of the bank can be factored
into their foreign currency IDR, and the local currency IDR also
take into account Ukrainian country risks.
Ukrsib is 51%-owned by France's BNP Paribas. The IDRs, Short-
term and Support ratings of Ukrsib reflect the moderate
probability of support being forthcoming from their majority
shareholders, in case of need.
* Fitch Changes Ukraine's Outlook to Positive & Keeps BB- Rating
----------------------------------------------------------------
Fitch Ratings revised the Outlooks on Ukraine's foreign and
local Issuer Default ratings to Positive from Stable and
affirmed the ratings at BB-. The agency has also affirmed the
Country Ceiling at BB- and the Short-term rating at B.
The rating action reflects Fitch's assessment that Ukraine's
sovereign ratings could continue to move up the scale as the
economy develops and the country establishes a longer record of
political stability.
"Ukraine's economy should grow an impressive 5.5% in 2006,
shrugging off political uncertainty and January's rise in gas
import prices," Andrew Colquhoun, Director in Fitch's Sovereigns
Group disclosed.
"The peaceful appointment of a new government in August after
reasonably fair elections marks a milestone on the road to
political stability. However, these are still early days for
the government and political risk hasn't faded entirely," he
added.
While it is too early to judge the new government's policies,
the authorities appear committed to securing entry to the World
Trade Organization in early 2007, which is a positive sign.
Fitch expects Ukraine's economy to be supported by strong
consumption and a pick-up in investment. The price Ukraine pays
Russia for gas imports rose to US$95/thousand cubic meters in
January from US$50 tcm, but the increase seems to have been
absorbed smoothly. This lends confidence that the energy-
intensive economy can weather a further hike to US$130/tcm
expected in 2007.
Ukraine's ability to deal with external shocks has improved as
official reserves have increased to US$19.4 billion, some 23% of
GDP, covering about 4.5 months of imports. Ukraine's expected
2006 liquidity ratio of 112% is below the BB median of 156%, but
stronger than key rated peers like Turkey (83%) and Indonesia
(98%). Encouragingly, foreign direct investment picked up from
previously low levels to US$7.8 billion in 2005; Fitch expects
inflows of around US$3 billion in 2006.
Bank credit to the private sector grew 64% in 2005, raising some
concern given the relative weakness of the banking system.
However, the fast-increasing share of foreign ownership in the
system promises to raise risk-control standards quickly while
offering additional sources of support in a crisis.
Inflation fell following a currency revaluation in April 2005,
but remains relatively high at 9.1% year-on-year in
September 2006, highlighting the need for the authorities to
remain vigilant for signs of overheating in the economy.
Fiscal finances remain a clear rating strength. Ukraine's stock
of gross general government debt-to-GDP stood at 18.4% of GDP at
end-2005, well below the BB median of 45.6%. Furthermore,
Ukraine is one of only four net public external creditors in the
BB rating bracket, and the second-strongest relative to GDP.
===========================
U N I T E D K I N G D O M
===========================
A & P POOLS: Appoints Liquidator from Begbies Traynor
-----------------------------------------------------
Richard Andrew Segal of Begbies Traynor was appointed Liquidator
of A & P Pools (Fareham) Limited on Oct. 12 for the creditors'
voluntary winding-up procedure.
Headquartered in Fareham, England, A & P Pools (Fareham) Limited
-- http://www.appools.co.uk/-- designs and builds concrete,
tiled & mosaic swimming pools, heat retaining liner pools,
indoor & outdoor, for commercial or residential use.
AMAZON.COM: Moody's Assigns Loss-Given-Default Ratings
------------------------------------------------------
In connection with Moody's Investors Service's implementation of
its new Probability-of-Default and Loss-Given-Default rating
methodology for the US and Canadian Retail sector, the rating
agency confirmed its BA3 Corporate Family Rating for Amazon.com,
Inc.
Additionally, Moody's revised and held its probability-of-
default ratings and assigned loss-given-default ratings on these
loans and bond debt obligations:
Projected
Old POD New POD LGD Loss-Given
Debt Issue Rating Rating Rating Default
---------- ------- ------- ------ ----------
US$900 million
4.75% Convertible
Subordinated Notes B2 B2 LGD5 82%
US$306 million
6.75% Premium Adj.
Convertible Sec. B2 B2 LGD5 82%
Senior Unsecured
Shelf Registration (P)B1 (P)Ba2 LGD3 35%
Subordinated
Shelf Registration (P)B2 (P)B2 LGD5 82%
Preferred Stock
Shelf Registration (P)B3 (P)B2 LGD6 97%
Moody's explains that current long-term credit ratings are
opinions about expected credit loss, which incorporate both the
likelihood of default and the expected loss in the event of
default. The LGD rating methodology will disaggregate these two
key assessments in long-term ratings. The LGD rating
methodology will also enhance the consistency in Moody's
notching practices across industries and will improve the
transparency and accuracy of Moody's ratings as Moody's research
has shown that credit losses on bank loans have tended to be
lower than those for similarly rated bonds.
Probability-of-default ratings are assigned only to issuers, not
specific debt instruments, and use the standard Moody's alpha-
numeric scale. They express Moody's opinion of the likelihood
that any entity within a corporate family will default on any of
its debt obligations.
Loss-given-default assessments are assigned to individual rated
debt issues -- loans, bonds, and preferred stock. Moody's
opinion of expected loss are expressed as a percent of principal
and accrued interest at the resolution of the default, with
assessments ranging from LGD1 (loss anticipated to be 0% to 9%)
to LGD6 (loss anticipated to be 90% to 100%).
Based in Seattle, Wash., Amazon.com, Inc. (Nasdaq: AMZN) a
Fortune 500 company, opened on the World Wide Web in July 1995
and offers Earth's Biggest Selection. Amazon.com seeks to be
Earth's most customer-centric company, where customers can find
and discover anything they might want to buy online, and
endeavors to offer its customers the lowest possible prices.
Amazon.com and other sellers offer millions of unique new,
refurbished and used items in categories such as health and
personal care, jewelry and watches, gourmet food, sports and
outdoors, apparel and accessories, books, music, DVDs,
electronics and office, toys and baby, and home and garden.
Amazon.com and its affiliates operate retail sites
http://www.amazon.com/http://www.amazon.co.uk/
http://www.amazon.de/http://www.amazon.co.jp/
http://www.amazon.fr/http://www.amazon.ca/and
http://www.joyo.com/
The company has fulfillment centers in Japan and China. Other
office locations include Germany, India, and the United Kingdom.
BERTRAM & WATTS: Brings In Liquidators from CBA
-----------------------------------------------
Mark Grahame Tailby and Neil Richard Gibson of CBA were
appointed Joint Liquidators of Bertram & Watts Limited on
Oct. 13 for the creditors' voluntary winding-up procedure.
Headquartered in Leicester, England, Bertram & Watts Limited
provides property maintenance services.
BRISTOW GROUP: Weak Profile Spurs S&P to Rate Pfd. Stock at B
-------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' rating to
the helicopter service company Bristow Group Inc.'s US$230
million 5.5% mandatory preferred convertible stock. At the same
time, Standard & Poor's affirmed the 'BB' corporate credit
rating on the company. The outlook is negative.
As of June 30, 2006, Lafayette, La.-based Bristow Group had
US$261.5 million of debt.
The ratings on Bristow reflect the company's weak business risk
profile. Bristow is subject to the cyclicality and volatility
of the oil and gas offshore exploration and production industry.
Flight hours are highly correlated with levels of offshore
production, as well as changes in the offshore rig count. The
offshore rig count, in turn, is heavily influenced by commodity
prices, although this is offset by flight activity in support of
offshore production, which tends to be more stable through the
industry cycle.
Revenue stability is provided by multiyear contracts that
include a fixed monthly fee for dedicating specific aircraft to
customers, as well as a variable fee based on flight hours.
While most contracts include provisions allowing for early
termination with short notice, Bristow has historically
experienced high renewal rates due to ongoing relationships with
customers, its safety performance, knowledge of site
characteristics, and an understanding of the customer's cost
structure.
"The negative outlook reflects the ongoing SEC investigation
regarding improper activities in Nigeria and Brazil, as well as
a Department of Justice investigation regarding possible
antitrust activities in the Gulf of Mexico," said Standard &
Poor's credit analyst Aniki Saha-Yannopoulos.
BRITANNIA BULK: Moody's Assigns B3 Corporate Family Rating
----------------------------------------------------------
Moody's Investors Service assigned a B3 Corporate family rating
to Britannia Bulk Plc. This is the first time that Moody's has
rated this Company. At the same time, the rating agency has
assigned a provisional debt rating of (P)B3 to the proposed
US$215 million Senior Secured Notes issuance of Britannia.
The proceeds of the issuance will be utilized in part to repay
all the existing indebtedness, to fund the acquisition of
approximately 8 dry-bulk vessels and for general corporate
purposes.
The notes will be secured by a first priority lien on all
Britannia's vessels, including the vessels to be acquired with
the proceeds of the offering.
Moody's expects to remove the provisional status and affirm the
rating upon satisfactory review of final documentation and
completion of the issuance. The outlook of the ratings is
stable.
The CFR B3 rating reflects:
-- Britannia's limited size, diversification and
concentrated customer base,
-- limited track record of the company and;
-- the current fleet average age higher than 20 years,
-- the high investment required to strengthen the
current fleet and the high refinancing risk.
However the CFR also take into account:
-- the good competitive position of the Company in a
market niche due to moderately high barriers to entry
and technical skills required to operate from the
Russian ports, which are key for loading and in
certain cases unloading cargo;
-- the good quality of the current customer base; and
-- the experienced management team.
Rating assigned:
Britannia Bulk Plc
* Corporate Family Rating: B3
* Senior Secured Notes Rating: (P)B3
All ratings carry a stable outlook.
Britannia Bulk plc (Britannia) is a holding company whose
subsidiaries operate a dry bulk fleet of about 13 vessels. At
year-end 2005, Britannia reported revenues of US$185 million.
BRITANNIA BULK: S&P Assigns B- Rating on Proposed Bond Issue
------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B-' long-term
corporate credit rating to U.K.-based shipping company Britannia
Bulk PLC. At the same time, Britannia's proposed US$215 million
secured bond has been assigned an issue rating of 'B-' with a
recovery rating of '3', reflecting our expectations of
meaningful recovery (50%-80%) of principal following a payment
default.
"The ratings on Britannia reflect its participation in the
highly cyclical, fragmented, and capital-intensive bulk market,
its small and old fleet, and its leveraged capital structure,"
said Standard & Poor's credit analyst Per Karlsson. "These
factors are only partially mitigated by Britannia's contract-
based revenue structure and its relationship with key
customers."
Standard & Poor's expects Britannia's short-term operational and
financial performance to be buoyed by the protection provided by
the company's contracts of affreightment, and the still
favorable short-term outlook for the bulk carrier market. This,
however, only limits downside risk in the short term.
Consequently, negative rating pressure could occur in
deteriorating market conditions, which could have a damaging
impact on Britannia owing to its unfavorable industry position.
Furthermore, the company's aggressive growth strategy is likely
to heighten financial risk in the medium term, especially as
newly acquired shipping vessels will be bought at high prices.
Conversely, sustained strong fundamentals for the bulk shipping
market and successful execution of its growth strategy, combined
with a display of more conservative financial policies, could
strengthen Britannia's credit profile.
CHATTERBOX GREETINGS: Names Nimish Chandrakant Patel Liquidator
---------------------------------------------------------------
Nimish Chandrakant Patel was appointed Liquidator of Chatterbox
Greetings Limited on Oct. 16 for the creditors' voluntary
winding-up procedure.
Headquartered in Hayes, England, Chatterbox Greetings Limited is
greeting card publisher and wholesaler.
CHC HELICOPTER: S&P Revises Outlook to Stable & Affirms Ratings
---------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on
Vancouver, B.C.-based CHC Helicopter Corp. to stable from
positive. At the same time, Standard & Poor's affirmed its
'BB-' long-term corporate credit and 'B' senior subordinated
debt ratings on the company.
"The outlook revision reflects the likelihood that CHC's
financial profile will not materially improve beyond that of its
current rating category in the near to medium term, given the
company's focuses on expansion and growth initiatives," said
Standard & Poor's credit analyst Jamie Koutsoukis.
"Although CHC's debt levels are at the high end for the ratings
category, we expect the company will benefit from the robust
market for its services and the significant investment it is
making in new aircraft, such that the incremental revenue
generation from its expanded fleet should improve its current
coverage metrics," Ms. Koutsoukis added.
The ratings on CHC reflect:
-- the company's reliance on the cyclical offshore oil
and gas industry,
-- competition within the helicopter services to the oil
and gas industry,
-- large capital spending requirements, and
-- aggressive leverage.
These factors, which hamper CHC's current credit profile, are
partially offset by:
-- the company's strong cost position as the world's
largest commercial helicopter services company, as well as
-- its comparatively large and modern fleet of medium
and heavy helicopters.
The stable outlook reflects Standard & Poor's expectations that
the company will continue to benefit from high oil prices and
strong demand for helicopter services in the markets it
services, and resultantly support the company's current
financial profile. In addition, the incremental cash flows
generated by the company's expanding fleet should somewhat
offset its current elevated debt levels.
The rating agency does not expect, however, that CHC's balance
sheet will materially improve in the near to medium term. An
outlook revision to positive would depend on CHC's ability to
significantly reduce its debt, combined with improvements in
free cash flow generation, which is unlikely in the near term.
Conversely, if CHC does not realize the expected improvements in
operating cash flow generation, and credit metrics continue to
deteriorate, a negative ratings action could occur.
COOPER TIRE: Moody's Assigns Loss-Given-Default Ratings
-------------------------------------------------------
In connection with Moody's Investors Service's implementation of
its new Probability-of-Default and Loss-Given-Default rating
methodology for the U.S. Automotive and Equipment sectors, the
rating agency confirmed its B2 Corporate Family Rating for
Cooper Tire & Rubber Company. Additionally, Moody's revised
or held its probability-of-default ratings and assigned loss-
given-default ratings on these loans and bond debt obligations:
Projected
Old POD New POD LGD Loss-Given
Debt Issue Rating Rating Rating Default
---------- ------- ------- ------ ----------
7.75% unsecured
notes B2 B2 LGD 4 57%
8.0% unsecured
notes B2 B2 LGD 4 57%
7.625% unsecured
notes B2 B2 LGD 4 57%
Shelf senior
unsecured (P)B2 (P)B2 LGD 4 57%
Shelf preferred (P)Caa2 (P)Caa1 LGD 6 97%
Moody's explains that current long-term credit ratings are
opinions about expected credit loss, which incorporate both the
likelihood of default and the expected loss in the event of
default. The LGD rating methodology will disaggregate these two
key assessments in long-term ratings. The LGD rating
methodology will also enhance the consistency in our notching
practices across industries and will improve the transparency
and accuracy of our ratings as our research has shown that
credit losses on bank loans have tended to be lower than those
for similarly rated bonds.
Probability-of-default ratings are assigned only to issuers, not
specific debt instruments, and use the standard Moody's alpha-
numeric scale. They express Moody's opinion of the likelihood
that any entity within a corporate family will default on any of
its debt obligations.
Loss-given-default assessments are assigned to individual rated
debt issues -- loans, bonds, and preferred stock. Moody's
opinion of expected loss are expressed as a percent of principal
and accrued interest at the resolution of the default, with
assessments ranging from LGD1 (loss anticipated to be 0% to 9%)
to LGD6 (loss anticipated to be 90% to 100%).
Cooper Tire & Rubber Company is a global company that
specializes in the design, manufacture, marketing and sales of
passenger car, light truck, medium truck tires and subsidiaries
that specialize in motorcycle and racing tires, as well as tread
rubber and related equipment for the retread industry. With
headquarters in Findlay, Ohio, Cooper Tire has 59 manufacturing,
sales, distribution, technical and design facilities within its
family of companies located around the world. Cooper also owns
the Avon Tyres brand, mostly used to produce tires for racing.
In Europe, the company is headquartered in Melksham, United
Kingdom.
CRAEGMOOR FUNDING: Moody's May Cut Ratings on Class B Notes
-----------------------------------------------------------
Moody's Investors Service placed on review for possible
downgrade Class M, Class B1 and Class B2 Notes issued by
Craegmoor Funding (No.2) Limited, a securitization of a U.K.
portfolio of elderly and specialist homes.
Although the performance of the portfolio has slightly improved
over the last few months and asset sales are progressing
according to management's expectations, the operating
performance of the portfolio continues to be below Moody's
revised expectations.
Moody's rating review will focus on:
-- the sustainability of the underlying
operating performance, especially regarding
revenue generation, cost control and progress in
the shared service centre;
-- Moody's view on the strategy of Craegmoor's management
to improve the portfolio's performance in the near
term; and
-- ability of management to provide to Moody's
detailed information on next year's budget and
proposed plans to improve performance going forward.
Moody's previously downgraded Class M, Class B1 and Class B2
Notes on March 28 due to the underperformance of the transaction
compared with original expectations.
Moody's rating action in detail (amounts reflect current
outstandings):
-- GBP30,000,000 Class M Floating Rate Notes: Baa2 on
review for possible downgrade;
-- GBP15,000,000 Class B1 Floating Rate Notes: Ba3 on
review for possible downgrade;
-- GBP42,200,000 Class B2 Fixed Rate Notes: Ba3 on review
for possible downgrade.
CRUM & FORSTER: S&P Removes BB Credit Ratings from CreditWatch
--------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'BB'
counterparty credit ratings on Fairfax Financial Holdings Ltd.
and Crum & Forster Holdings Corp. and removed them from
CreditWatch, where they were placed on July 28.
Standard & Poor's also said that it affirmed and removed from
CreditWatch a number of ratings on FFH's related entities,
including:
-- the 'BBB' counterparty credit and financial
strength ratings on FFH's core operating companies;
-- the 'BB-' counterparty credit rating on TIG Holdings Inc.;
-- the 'A-' counterparty credit and financial
strength ratings on Odyssey America Reinsurance
Corp., Clearwater Insurance Co., and Hudson
Specialty Insurance Co.; and
-- the 'BBB-' counterparty credit rating on Odyssey
Re Holdings Corp.
The outlook on all these companies is negative.
The ratings had been placed on CreditWatch negative following
the announcement by FFH of a delay of its second-quarter 2006
interim report to shareholders.
The ratings on FFH and its related core entities are based on
the group's good competitive position, improving earnings, good
and improving capitalization, and strong liquidity. Reserves,
recoverables, and financial leverage have all improved in the
last few years and are not viewed as significant negative rating
factors. "Offsetting these positive factors are FFH's
qualitative areas of governance, risk controls, and enterprise
risk management," explained Standard & Poor's credit analyst
Damien Magarelli. "These areas are the reason for the
assignment of a negative outlook."
A downgrade is possible if FFH is unable to further improve its
governance oversight, accounting risk controls, and overall risk
management by October 2007. A revision of the outlook to stable
outlook is possible if FFH meets these expectations, has a
combined ratio of less than 100% at the consolidated continuing
operations, reserve charges within expectations (although no
large charges are expected), has a capital ratio consistent with
the rating, and maintains holding-company cash at more than
US$250 million.
E & P COATINGS: Cattles Invoice Taps CLB Coopers as Receivers
-------------------------------------------------------------
Cattles Invoice Financing Ltd. appointed Mark Terence Getliffe
and Diane Elizabeth Hill of CLB Coopers joint administrative
receivers of E & P Coatings Ltd. (Company Number 02676501) on
Oct. 10.
Headquartered in Manchester, England, CLB Coopers --
http://www.clb.co.uk/-- is an independent firm of accountants
and advisers.
E & P Coatings Ltd. can be reached at:
Rossfield Road
Ellesmere Port
Merseyside CH65 3AW
United Kingdom
Tel: 0151 355 8141
Fax: 0151 356 1573
EUROTUNNEL GROUP: Unveils Proposals to Restructuring Plan
---------------------------------------------------------
The Board of Eurotunnel, approved on Oct 26 proposals for a
draft "Safeguard" restructuring plan, put forward by the company
with the support of the representatives nominated by the Paris
Commercial Court.
The principal elements of the proposals are:
1) the creation of a new company, Groupe Eurotunnel, which
will launch an Exchange Tender Offer (ETO) to Eurotunnel's
current shareholders. The shareholders will hold a
minimum 13% of the equity in Groupe Eurotunnel;
2) Groupe Eurotunnel will subscribe to a new long-term loan
of GBP2.840 billion (less than half of the current debt)
from an international banking consortium;
3) Groupe Eurotunnel will issue GBP1.275 billion of
convertible hybrid notes. The hybrid notes will be
convertible over a maximum of three years and one month.
Approximately 61.7% of the hybrids are redeemable by the
company.
4) current Eurotunnel shareholders, who subscribe to the ETO,
will hold a minimum of 13% of the equity in Groupe
Eurotunnel. They can subscribe directly to the hybrid, up
to a value of GBP60 million (EUR87.7 million) and will
benefit from free warrants. The redemption of hybrid
notes by the company would allow them to increase their
share of the equity from 13% to 67%.
"These proposals represent the best possible equilibrium between
the demands of the different stakeholders; they retain an
exceptional amount of equity and accretion potential for
shareholders in comparison to other restructurings," Jacques
Gounon, Chairman and Chief Executive said. "With the debt write
off, Groupe Eurotunnel will be able to re-launch from a solid
base, and finally develop and grow."
About the Company
Headquartered in Folkestone, United Kingdom and Calais, France,
Eurotunnel Group -- http://www.eurotunnel.co.uk/-- operates a
fleet of 25 shuttle trains, which carry cars, coaches and
trucks. It manages the infrastructure of the Channel Tunnel and
receives toll revenues from train operating companies whose
trains pass through the Tunnel.
The British and French governments have granted Eurotunnel a
concession to operate the Channel Tunnel until 2086.
* * *
Company Crisis
Eurotunnel's crisis began when costs to build the tunnels that
connect U.K. and France started to overrun before it opened in
1994. The Iraq war followed, which didn't help as tourist
traffic fell. In May 2004, Eurotunnel appointed Lazard (global
coordinator) and Lehman Brothers as bank advisors, and Dresdner
Kleinwort Wasserstein as restructuring adviser.
In July 2004, auditor KPMG Audit Plc said the company faced
uncertainty after 2005. The firm's survival is dependent upon
its ability to put in place a refinancing plan or, if not, to
obtain an agreement with the lenders under the existing Credit
Agreement within the next two years, the auditor said.
EXCELLENCE THROUGH: Claims Filing Period Ends Nov. 30
-----------------------------------------------------
Creditors of Excellence Through Training Ltd. have until Nov. 30
to send in their full names, their addresses and descriptions,
full particulars of their debts or claims, and the names and
addresses of their Solicitors (if any), to appointed Liquidator
David Kirk at:
David Kirk
5 Barnfield Crescent
Exeter
Devon EX1 1RF
United Kingdom
The company can be reached at:
Excellence Through Training Ltd.
Stoneridge
Kennford
Exeter
Devon EX6 7TH
United Kingdom
Tel: 01392 876 577
Fax: 01392 876 577
EXITECH LIMITED: Appoints Joint Administrators from PwC
-------------------------------------------------------
David James Bennett and Michael John Andrew Jervis of
PricewaterhouseCoopers LLP were appointed joint administrators
of Exitech Ltd. (Company Number 1857073) on Oct. 12.
Headquartered in London, England, PricewaterhouseCoopers LLP --
http://www.pwcglobal.com/-- provides auditing services,
accounting advice, tax compliance and consulting, financial
consulting and advisory services to clients in a variety of
industries.
Headquartered in Oxford, England, Exitech Ltd. specialized in
the use of lasers for micro and nanofabrication applications
industry.
F1 HIRE: Hires Liquidator from B & C Associates
-----------------------------------------------
Jeffrey Mark Brenner of B & C Associates was appointed
Liquidator of F1 Hire Limited on Oct. 13 for the creditors'
voluntary winding-up procedure.
The company can be reached at:
F1 Hire Limited
Unit H1
Haydock Cross Industrial Estate
Kilbuck Lane
Haydock
St. Helens
Merseyside WA11 9UX
Tel: 0870 7508050
Web: http://www.f1group.co.uk/
F1 LOGISTIX: Hires Jeffrey Mark Brenner to Liquidate Assets
-----------------------------------------------------------
Jeffrey Mark Brenner of B & C Associates was appointed
Liquidator of F1 Logistix (U.K.) Limited on Oct. 13 for the
creditors' voluntary winding-up procedure.
Headquartered in St. Helens, England F1 Logistix (U.K.) Limited
provides road haulage services.
F.N. METALWORK: Joint Liquidators Take Over Operations
------------------------------------------------------
Carl Derek Faulds and Peter Robin Bacon of Portland Business &
Financial Solutions Ltd. were appointed Joint Liquidators of
F.N. Metalwork Limited on Oct. 13 for the creditors' voluntary
winding-up proceeding.
The company can be reached at:
F.N. Metalwork Limited
Monks Brook Industrial Park
School Close
Chandlers Ford
Eastleigh
Hampshire SO534RA
United Kingdom
Tel: 023 8025 5798
Fax: 023 8025 5637
FAIRFAX FINANCIAL: S&P Affirms BB Counterparty Credit Ratings
-------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'BB'
counterparty credit ratings on Fairfax Financial Holdings Ltd.
and Crum & Forster Holdings Corp. and removed them from
CreditWatch, where they were placed on July 28.
Standard & Poor's also said that it affirmed and removed from
CreditWatch a number of ratings on FFH's related entities,
including:
-- the 'BBB' counterparty credit and financial
strength ratings on FFH's core operating companies;
-- the 'BB-' counterparty credit rating on TIG Holdings Inc.;
-- the 'A-' counterparty credit and financial
strength ratings on Odyssey America Reinsurance
Corp., Clearwater Insurance Co., and Hudson
Specialty Insurance Co.; and
-- the 'BBB-' counterparty credit rating on Odyssey
Re Holdings Corp.
The outlook on all these companies is negative.
The ratings had been placed on CreditWatch negative following
the announcement by FFH of a delay of its second-quarter 2006
interim report to shareholders.
The ratings on FFH and its related core entities are based on
the group's good competitive position, improving earnings, good
and improving capitalization, and strong liquidity. Reserves,
recoverables, and financial leverage have all improved in the
last few years and are not viewed as significant negative rating
factors. "Offsetting these positive factors are FFH's
qualitative areas of governance, risk controls, and enterprise
risk management," explained Standard & Poor's credit analyst
Damien Magarelli. "These areas are the reason for the
assignment of a negative outlook."
A downgrade is possible if FFH is unable to further improve its
governance oversight, accounting risk controls, and overall risk
management by October 2007. A revision of the outlook to stable
outlook is possible if FFH meets these expectations, has a
combined ratio of less than 100% at the consolidated continuing
operations, reserve charges within expectations (although no
large charges are expected), has a capital ratio consistent with
the rating, and maintains holding-company cash at more than
US$250 million.
HIRT COMBUSTION: Brings In KPMG to Administer Assets
----------------------------------------------------
Howard Smith and Richard Dixon Fleming of KPMG LLP were
appointed joint administrators of Hirt Combustion Engineers Ltd.
(Company Number 1560895) on Oct. 10.
Headquartered in Manchester, England, KPMG LLP --
http://www.kpmg.co.uk/-- in the U.K. is part of a strong global
network of member firms with 9,500 partners and staff working in
22 offices across the U.K. providing audit, tax and advisory
services.
Headquartered in Winsford, England, Hirt Combustion Engineers
Ltd. manufactures and installs combustion systems.
HOUSE OF EUROPE: Fitch Affirms BB Rating on EUR50-Mln Notes
-----------------------------------------------------------
Derivative Fitch affirmed all Classes of House of Europe Funding
I, Ltd. notes following a satisfactory performance review:
-- EUR880,000,000 Class A due 2015: AAA;
-- EUR65,000,000 Class B due 2047: AAA;
-- EUR50,000,000 Class C due 2047: BBB-;
-- EUR50,000,000 Class C additional interest (interest only)
due 2047: BB; and
-- EUR5,000,000 Certificates, due 2047: AAA.
HOE I is a collateralized debt obligation that was restructured
in June 2005. HOE I's collateral pool consists primarily of
European commercial mortgage-backed securities, residential
mortgage-backed securities, as well as some CDOs.
The transaction is managed by Collineo Asset Management GmbH,
rated CAM 2 for structured finance CDO asset management. The
transaction will exit the reinvestment period in December 2009.
The affirmations reflect the portfolio's stable performance to
date. As of the trustee report dated July 2006, the portfolio's
credit quality has slightly improved. The Weighted Average
Fitch Factor now equals 0.56 compared to 0.59 in March 2005.
The transaction continues to pass all coverage tests; however,
the transaction remains under collateralized with very limited
excess spread. The future performance of the Class C notes is
dependent on the asset manager's ability to build credit
enhancement through trading gains.
Since the restructuring, the manager has improved the Class C's
over collateralization ratio by eight basis points since
June 2005. Derivative Fitch will carefully monitor this trend
ILLUMA LIGHTING: Brings In Grant Thornton as Administrators
-----------------------------------------------------------
Martin Gilbert Ellis and Daniel Robert Whiteley Smith of Grant
Thornton U.K. LLP were appointed joint administrators of Illuma
Lighting Ltd. (Company Number 01359888) on Oct. 13.
Headquartered in London, England, Grant Thornton U.K. LLP --
http://www.grant-thornton.co.uk/-- provides value-added
professional services as assurance services, compensation and
benefits, merger and acquisition transaction services,
management advisory services, tax consulting and valuation
services.
Headquartered in Loughborough, England, Illuma Lighting Ltd.
manufactures lighting equipment and electric lamps.
INCO LIMITED: Moody's Confirms Ba1 Subordinate Bond Rating
----------------------------------------------------------
Moody's Investors Service downgraded Companhia Vale do Rio
Doce's local currency issuer rating to Baa3 from Baa1. At the
same time, Moody's confirmed CVRD's Aaa.br National Scale
Rating, its Baa3 foreign currency rating and the Baa3 foreign
currency rating of its wholly owned subsidiary Vale Overseas
Ltd., guaranteed by CVRD. The foreign currency rating reflects
Moody's piercing methodology.
Moody's also confirmed the Baa3 senior unsecured debt rating of
Inco Limited. The rating outlooks for both companies are
stable. These actions follow the announcement by CVRD that it
has acquired 75.7% of the shares of Inco and concludes Moody's
review of CVRD's ratings that was initiated on Aug. 11 and
Inco's on June 26.
On Oct. 24, CVRD announced that it has acquired 75.7% of the
shares of Inco, and has stated its intention to take steps to
acquire the remaining shares, which would bring the total
consideration value to US$18 billion. Within 60 days of the
acquisition of 100% of the shares of Inco, CVRD plans to have
Inco provide an upstream guarantee to the lenders under CVRD's
US$18 billion bridge acquisition facilities. CVRD intends to
refinance the bridge facilities in the long-term capital markets
at the CVRD level, without provision of an upstream guarantee
from Inco.
The downgrade of CVRD's local currency rating reflects the
significant additional debt being incurred to finance its
acquisition of Inco, with an absolute level of debt
approximating US$23 billion on a proforma basis. The downgrade
also reflects challenges over CVRD's ability to integrate Inco
in a timely fashion from a number of perspectives: reporting
systems, cultural assimilation and achieving a common culture,
labor concerns, and project execution risk. The rating also
captures CVRD's substantive capital expansion plans that may
hamper the planned deleveraging over the next 15 months, which
ability also relies on continued robust commodity prices
together with asset sales.
The rating however, acknowledges CVRD's leading global positions
in the iron ore and nickel markets, the improved breadth and
geographic scope of its business platform and its important
niche positions in bauxite, alumina, aluminum and logistics
(within Brazil).
The confirmation of Inco's Baa3 rating reflects the very strong
cash generating ability of the company given current nickel and
other metals prices, and Moody's expectation that metals prices,
while likely to moderate from current levels, will remain
sufficiently robust to permit Inco to continue to generate
strong cash flow before capital expenditures. Moody's notes
that while the effective leverage of Inco will increase
substantially given the upstream guarantees provided to CVRD,
the Baa3 rating assumes that the guarantees will be eliminated
over the next few months with the planned refinancing of CVRD
bridge loan.
Inco's current financial position indicates a rating higher than
Baa3, however, the rating is constrained by uncertainty about
Inco's future financial policies given its ownership by CVRD,
including dividends that may be paid to CVRD, Inco's ongoing
capital structure, capital expenditure levels, and investments
that may be undertaken within Inco. The rating also reflects
the continued difficulties at Goro, including cost pressures,
development delays and indigenous issues.
The stable outlook for the ratings of both companies reflect the
strong market positions and expanded market position in a number
of key minerals. The outlook also incorporates Moody's
expectations for above average, albeit moderating, LME nickel
and copper prices as well as contracted iron ore prices over the
intermediate term. An important component of the outlook is the
expectation that CVRD remain committed to reducing debt to more
manageable levels over the next fifteen months.
Downgrades:
Issuer: Companhia Vale do Rio Doce - CVRD
* Issuer Rating, to Baa3 from Baa1
Outlook Actions:
Issuer: Companhia Vale do Rio Doce - CVRD
* Outlook, Changed To Stable From Rating Under Review
Issuer: Inco Limited
* Outlook, Changed To Stable From Rating Under Review
Issuer: Vale Overseas Ltd.
* Outlook, Changed To Stable From Rating Under Review
Confirmations:
Issuer: Companhia Vale do Rio Doce - CVRD
* Issuer Rating, Confirmed at Aaa.br
* Senior Unsecured Shelf, Confirmed at (P)Baa3
Issuer: Inco Limited
* Corporate Family Rating, Confirmed at Baa3
* Subordinate Conv./Exch. Bond/Debenture, Confirmed at Ba1
* Senior Unsecured Conv./Exch. Bond/Debenture, Confirmed
at Baa3
* Senior Unsecured Regular Bond/Debenture, Confirmed at Baa3
Issuer: Vale Overseas Ltd.
* Senior Unsecured Regular Bond/Debenture, Confirmed at Baa3
* Senior Unsecured Shelf, Confirmed at (P)Baa3
CVRD is the world's largest producer of iron ore, with an
estimated 32% of the global seaborne iron ore market. CVRD also
has substantial interests in bauxite, alumina and aluminum,
copper concentrate, potash, logistics, including railroad,
shipping, and port handling operations in Brazil, and minority
interests in steel production. Following the acquisition of
Inco, the second largest global nickel producer, CVRD now ranks
among the largest mining enterprises in the world. On a pro
forma basis for FY2005, CVRD had shipments of approximately 225
million tons of iron ore and 246,000 tons of nickel, generating
revenues of roughly US$17 billion.
Headquartered in Rio de Janeiro, Brazil, CVRD reported revenues
of US$12.8 billion in 2005.
Inco is based in Toronto, Canada, with reported revenues of
US$4.5 billion in 2005.
INTERNATIONAL SHIPHOLDING: Moody's Assigns LGD6 Rating on Notes
---------------------------------------------------------------
In connection with Moody's Investors Service's implementation of
its new Probability-of-Default and Loss-Given-Default rating
methodology for the transportation sector, the rating agency
confirmed its B2 Corporate Family Rating for International
Shipholding Corp., and its Caa1 rating on the company's 7.75%
Sr. Unsec Notes due 10/15/2007. Additionally, Moody's assigned
an LGD6 rating to those bonds, suggesting noteholders will
experience a 92% loss in the event of a default.
Moody's explains that current long-term credit ratings are
opinions about expected credit loss, which incorporate both the
likelihood of default and the expected loss in the event of
default. The LGD rating methodology will disaggregate these two
key assessments in long-term ratings. The LGD rating
methodology will also enhance the consistency in our notching
practices across industries and will improve the transparency
and accuracy of our ratings as our research has shown that
credit losses on bank loans have tended to be lower than those
for similarly rated bonds.
Probability-of-default ratings are assigned only to issuers, not
specific debt instruments, and use the standard Moody's alpha-
numeric scale. They express Moody's opinion of the likelihood
that any entity within a corporate family will default on any of
its debt obligations.
Loss-given-default assessments are assigned to individual rated
debt issues -- loans, bonds, and preferred stock. Moody's
opinion of expected loss are expressed as a percent of principal
and accrued interest at the resolution of the default, with
assessments ranging from LGD1 (loss anticipated to be 0% to 9%)
to LGD6 (loss anticipated to be 90% to 100%).
Headquartered in New Orleans, Louisiana, International
Shipholding Corp. -- http://www.intship.com/-- is engaged in
various types of waterborne freight transportation including
LASH (Lighter Aboard SHip) carriage, pure car/truck carrier
services, roll-on/roll-off, breakbulk and bulk carrier services,
domestic coastwise services, and rail-ferry transportation
services. The Company owns a United States flag LASH vessel
operating in a liner service between the United States Gulf and
East Coast ports, and ports in the Red Sea and Middle East.
Its subsidiary Forest Lines offers LASH barge breakbulk and dry
bulk service between inland river and deep water ports in the
United States and North Europe/United Kingdom.
JANUS TECHNOLOGIES: Hires Liquidators from Poppleton & Appleby
--------------------------------------------------------------
Stephen James Wainwright and Stephen Lord of Poppleton
& Appleby were appointed Liquidators of Janus Technologies
Limited (formerly Hallco 647 Ltd.) on Oct. 13 for the creditors'
voluntary winding-up proceeding.
Headquartered in Manchester, England Janus Technologies Limited
-- http://www.janustech.co.uk/-- wholesales new and old
printing equipment.
KB HOME: Filing Delay Cues S&P to Put Ratings on Watch Negative
---------------------------------------------------------------
Standard & Poor's Ratings Services placed its corporate credit,
senior unsecured, and senior subordinated debt ratings on KB
Home on CreditWatch with negative implications. The CreditWatch
listings affect US$1.65 billion of senior notes and
US$750 million of senior subordinated notes.
The CreditWatch placements reflect:
-- KB Home's late quarterly financial filing status,
which becomes official at the end of Oct. 25;
-- The current independent review of its stock
option practices, which has delayed the filing of
its financials; and
-- The recent notice of default related to its filing
status and the likelihood that additional default
notices will be filed, which could accelerate the
maturity of some debt securities.
KB Home has 60 days from the date a notice of default is filed
to cure the event of default. The cure period extends through
either Dec. 17 (if the notice of default under the indenture
relating to the 6.25% senior notes due 2015 purporting Oct. 18
as the default date is valid) or Dec. 24 (if Oct. 25 is the
default date, as the indenture language indicates, and notice{s}
of default are sent, which should be expected).
Although management expects to file its 10-Q within the cure
period, the timing and outcome of the independent review of KB
Home's stock option granting practices remains uncertain and
ultimately drives KB Home's ability to file its 10-Q within the
cure period. Furthermore, an informal SEC investigation related
to the company's stock option practices could linger beyond the
completion of the internal review, which may or may not affect
the company's ability to file its 10-Q.
KB Home recently received a one-time extension until Dec. 24 to
deliver quarterly financials to its bank lenders. Furthermore,
the company commenced a consent solicitation for its senior
notes only to extend the period to cure the event of default
until Feb. 23, 2007. This consent solicitation did not include
the company's senior subordinated notes.
Standard & Poor's will continue to closely monitor these events.
We will affirm the ratings and remove them from CreditWatch upon
satisfactory resolution of the consent solicitation and/or the
10-Q filing and board options review. Alternatively, the rating
agency will lower the ratings or revise our outlook on KB Home
to negative if the potential refinancing of some debt securities
results in a material component of floating-rate short-term debt
or pressures debt protection metrics.
KB Home
Ratings Placed On Creditwatch Negative
Rating
------
To From
-- ----
Corporate credit BB+/Watch Neg/-- BB+/Stable/--
Senior unsecured notes BB+/Watch Neg BB+
Senior subordinated notes BB-/Watch Neg BB-
KEISS CONTRACTS: Claims Registration Ends Dec. 11
-------------------------------------------------
Creditors of Keiss Contracts U.K. Limited have until Dec. 11 to
send in their full names, their addresses and descriptions, full
particulars of their debts and claims, and names and addresses
of their Solicitors (if any), to appointed Liquidator
Duncan R. Beat at:
Duncan R. Beat
Tenon Recovery
75 Springfield Road
Chelmsford
Essex CM2 6JB
United Kingdom
Headquartered in Braintree, England, Keiss Contracts U.K.
Limited -- http://www.attenuators.co.uk/-- manufactures
fabricated metal products. The company's product portfolio
include acoustic attenuators, acoustic enclosures, acoustic
louvres, circular attenuators, acoustic doors, weather
enclosures, extraction systems, and kitchen canopies, among
others.
KIRKLAND AGENCIES: Taps Liquidator from Deloitte & Touche LLP
-------------------------------------------------------------
Christopher James Farrington of Deloitte & Touche LLP was
appointed Liquidator of Kirkland Agencies Limited on Oct. 6 for
the creditors' voluntary winding-up proceeding.
Headquartered in Matlock, England Kirkland Agencies Limited
engages in the retail sale of clothing.
KM ENGINEERING: Creditors Confirm Liquidator's Appointment
----------------------------------------------------------
Creditors of KM Engineering (Sutton Coldfield) Limited confirmed
Oct. 12 the appointment of Roderick Graham Butcher of Butcher
Woods as Liquidator.
KM Engineering (Sutton Coldfield) Limited
41a Hainge Road
Tividale
Oldbury
West Midlands B69 2NY
United Kingdom
Tel: 0121 520 7731
Fax: 0121 520 7731
MANSARD MORTGAGES: Fitch Assigns BB Rating on GBP20-Mln Notes
-------------------------------------------------------------
Fitch Ratings assigned Mansard Mortgages 2006-1 PLC's GBP500
million mortgage-backed floating-rate notes due in 2048 expected
ratings:
-- GBP157.5 million Class A1 notes: AAA;
-- GBP217.5 million Class A2 notes: AAA;
-- GBP65 million Class M1 notes: AA;
-- GBP27.5 million Class M2 notes: A;
-- GBP12.5 million Class B1 notes: BBB; and
-- GBP20 million Class B2 notes: BB.
Final ratings are contingent on final documents conforming to
information already received as well as on satisfactory legal
opinion.
The collateral underlying the notes in this transaction consists
solely of Rooftop Mortgage Limited originations. RML is jointly
owned by The Bear Stearns Companies Inc. (80%) and Crown Asset
Management Limited (20%).
The expected ratings are based on the quality of the collateral,
available credit enhancement, the underwriting criteria of
Rooftop Mortgages and the sound legal structure of the
transaction.
The 25.75% credit enhancement for the Class A notes is provided
by the subordination of the Class M1, Class M2, Class B1, Class
B2 notes, excess spread and a reserve fund with an initial
balance of 0.75% and a target balance of 0.8% of the total
outstanding note balance as of closing.
There is also a liquidity facility available to meet income
deficiencies, including interest shortfalls on the Class A
notes. However, it will not be available to fund any periodic
principal deficiencies.
To determine appropriate credit enhancement levels, Fitch
analyzed the collateral using its U.K. Residential Mortgage
Default Model III. The agency also modeled cash flows using the
results of the default model with structural stresses including
various prepayment and interest rate scenarios.
The cash flow tests showed that each Class of notes could
withstand loan losses at a level corresponding to the related
stress scenario without incurring any principal loss or interest
shortfall and can retire principal by legal final maturity.
This issuance marks RML's third foray into the U.K. non-
conforming market, although some of its loans also previously
formed part of the collateral for the Bluestone Securities PLC
transaction, which closed in December 2004.
METOKOTE CORP: Moody's Assigns Loss-Given-Default Ratings
---------------------------------------------------------
In connection with Moody's Investors Service's implementation of
its new Probability-of-Default and Loss-Given-Default rating
methodology for the U.S. Automotive and Equipment sectors, the
rating agency confirmed its B2 Corporate Family Rating for
MetoKote Corporation. Additionally, Moody's revised or held its
probability-of-default ratings and assigned loss-given-default
ratings on these loans and bond debt obligations:
Projected
Old POD New POD LGD Loss-Given
Debt Issue Rating Rating Rating Default
---------- ------- ------- ------ ----------
Senior Secured
Revolving Credit
Facility B2 B2 LGD 3 33%
Senior Secured
Term Loan B B2 B2 LGD 3 33%
Moody's explains that current long-term credit ratings are
opinions about expected credit loss which incorporate both the
likelihood of default and the expected loss in the event of
default. The LGD rating methodology will disaggregate these two
key assessments in long-term ratings. The LGD rating
methodology will also enhance the consistency in our notching
practices across industries and will improve the transparency
and accuracy of our ratings as our research has shown that
credit losses on bank loans have tended to be lower than those
for similarly rated bonds.
Probability-of-default ratings are assigned only to issuers, not
specific debt instruments, and use the standard Moody's alpha-
numeric scale. They express Moody's opinion of the likelihood
that any entity within a corporate family will default on any of
its debt obligations.
Loss-given-default assessments are assigned to individual rated
debt issues -- loans, bonds, and preferred stock. Moody's
opinion of expected loss are expressed as a percent of principal
and accrued interest at the resolution of the default, with
assessments ranging from LGD1 (loss anticipated to be 0% to 9%)
to LGD6 (loss anticipated to be 90% to 100%).
MetoKote Corp. provides protective coating applications such as
electrocoating, powder coating, and liquid painting. The
company's equipment division manufactures process lines and
support equipment like building racks, carriers, shipping
pallets, and part containers. MetoKote services more than 1,500
customers primarily in the automotive, agricultural and
construction equipment, and truck and bus maker industries.
MetoKote has plants in Brazil, Canada, Mexico, the U.K., and the
United States.
NYT LIMITED: Appoints Joint Administrators from Leonard Curtis
--------------------------------------------------------------
N. A. Bennett and A. Poxon of Leonard Curtis were appointed
joint administrators of NYT Ltd. (Company Number 4387775) on
Oct. 12.
Leonard Curtis -- http://www.leonardcurtis.co.uk-- provides a
national business turnaround and corporate recovery service
through our principal offices in London, Birmingham and
Manchester, utilizing the resources of over one hundred
specialist recovery team members and eight directors.
Nyt Ltd. can be reached at:
Regina House
124 Finchley Road
Camden
London NW3 5JS
United Kingdom
Tel: 020 7375 2365
Fax: 020 7046 4160
ODYSSEY RE: S&P Affirms BB Preferred Stock Ratings
--------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'A-'
counterparty credit and financial strength ratings on Odyssey
America Reinsurance Corp., Clearwater Insurance Co., and
Hudson Specialty Insurance Co. (collectively Odyssey Re) and
removed them from CreditWatch with negative implications, where
they were placed on July 28.
At the same time, Standard & Poor's affirmed its 'BBB-'
counterparty credit and 'BB' preferred stock ratings on Odyssey
Re Holdings Corp. and removed them from CreditWatch negative.
The outlook on all these entities is negative.
These ratings have been on CreditWatch negative since July 28
following the announcement of Odyssey Re's ultimate parent
Fairfax Financial Holdings Ltd. that its 2006-second quarter
interim report to shareholders would be delayed. In addition,
on Aug. 9, Odyssey Re delayed the filing of its 2006-second
quarter 10-Q report.
"The ratings on Odyssey Re are based on its strong competitive
position, improving operating performance and capitalization,
and strong liquidity," noted Standard & Poor's credit analyst
Damien Magarelli. "Offsetting these positive factors are
Odyssey Re's 80.2% ownership by lower-rated FFH and the group's
related unfavorable qualitative factors such as weak enterprise
risk management, governance, and internal accounting risk
controls."
Not withstanding Odyssey Re's strong competitive position,
improving operating performance and capitalization, and strong
liquidity, Odyssey Re's negative outlook reflects FFH's outlook
since Odyssey Re is viewed as a strategically important
subsidiary to FFH. As such, the ratings on Odyssey Re and ORH
are currently capped by a maximum of two notches above the
ratings on FFH. The two-notch limit is due to the 80.2%
ownership of ORH by FFH and an aligned board of directors.
Therefore, should the ratings on FFH and/or outlook be revised,
those on Odyssey Re and ORH would be similarly revised unless
the considerations giving rise to the two-notch limitation have
changed in the meantime.
Standard & Poor's expects that Odyssey Re will continue to
opportunistically leverage its worldwide strong competitive
presence and underwrite profitable business. The top line
growth is expected to decrease 12% in 2006 reflecting a
reduction in proportional reinsurance in U.S. property
catastrophe exposed business in conjunction with a small
migration from quota-share to excess-of-loss basis.
Softening prices in certain casualty lines and increasing
competitive pressures in some specialty classes are also
contributing factors. A benign 2006 hurricane season thus far,
coupled with hardening property rates and stabilized overall
casualty prices will bolster Odyssey Re's earnings for full-year
2006 to a strong level, resulting in an anticipated combined
ratio of about 95% and an ROR of at least 10% as strong
accident-year results continue to be modestly offset by prior-
year reserve additions. These quantitative factors are
consistent with the rating.
Standard & Poor's views the accounting restatements as a
negative factor that is reflected in the current outlook. These
accounting errors have revealed some deficiencies in Odyssey
Re's internal controls for which the company has developed an
action plan and remediation initiatives to address these weak
points.
Standard & Poor's also believes that Odyssey Re's enterprise
risk management could further improve in certain key areas such
as corporate governance and accounting. As part of its
remediation effort started in the second quarter 2006,
management is implementing new procedures in conjunction with
FFH to provide a consistent framework across the company to
address the material weaknesses.
OVERSEAS SHIPHOLDING: Moody's Assigns Loss-Given-Default Ratings
----------------------------------------------------------------
In connection with Moody's Investors Service's implementation of
its new Probability-of-Default and Loss-Given-Default rating
methodology for the transportation sector, the rating agency
confirmed its Ba1 Corporate Family Rating for Overseas
Shipholding Group, Inc.
Moody's also confirmed its probability-of-default ratings and
assigned loss-given-default ratings on these three bond issues:
Projected
POD LGD Loss-Given
Debt Issue Rating Rating Default
---------- ------- ------- -----------
7.5% Notes
due 2024 Ba1 LGD4 61%
8.25% Notes
due 2013 Ba1 LGD4 61%
8.75% Debentures
due 2013 Ba1 LGD4 61%
Moody's explains that current long-term credit ratings are
opinions about expected credit loss, which incorporate both the
likelihood of default and the expected loss in the event of
default. The LGD rating methodology will disaggregate these two
key assessments in long-term ratings. The LGD rating
methodology will also enhance the consistency in our notching
practices across industries and will improve the transparency
and accuracy of our ratings as our research has shown that
credit losses on bank loans have tended to be lower than those
for similarly rated bonds.
Probability-of-default ratings are assigned only to issuers, not
specific debt instruments, and use the standard Moody's alpha-
numeric scale. They express Moody's opinion of the likelihood
that any entity within a corporate family will default on any of
its debt obligations.
Loss-given-default assessments are assigned to individual rated
debt issues -- loans, bonds, and preferred stock. Moody's
opinion of expected loss are expressed as a percent of principal
and accrued interest at the resolution of the default, with
assessments ranging from LGD1 (loss anticipated to be 0% to 9%)
to LGD6 (loss anticipated to be 90% to 100%).
Headquartered in New Orleans, Louisiana, Overseas Shipholding
Group, Inc. -- http://www.intship.com/-- (OSG) is an
independent bulk shipping company engaged primarily in the ocean
transportation of crude oil and petroleum products. As of
December 31, 2005, OSG owned or operated a modern fleet of 89
vessels (aggregating 11.4 million deadweight tons (DWT)), of
which 79 vessels operate in the international market and 10
operate in the United States Flag market. OSG has offices in
Athens, London, Manila, Newcastle, New York and Singapore with
more than 3,337 sea and shore-based employees.
POLYPORE INT'L: Moody's Assigns Loss-Given-Default Ratings
--------------------------------------------------------
In connection with Moody's Investors Service's implementation of
its new Probability-of-Default and Loss-Given-Default rating
methodology for the U.S. Automotive and Equipment sectors, the
rating agency confirmed its B2 Corporate Family Rating for
Polypore International, Inc. Additionally, Moody's revised
or held its probability-of-default ratings and assigned loss-
given-default ratings on these loans and bond debt obligations:
Issuer: Polypore International, Inc.
Projected
Old POD New POD LGD Loss-Given
Debt Issue Rating Rating Rating Default
---------- ------- ------- ------ ----------
Unguaranteed Senior
Discount Notes Ca Caa2 LGD 6 90%
Issuer: Polypore, Inc.
Projected
Old POD New POD LGD Loss-Given
Debt Issue Rating Rating Rating Default
---------- ------- ------- ------ ----------
Senior Secured
Revolving Credit
Facility B2 Ba3 LGD 2 16%
US$ Senior Secured
Term Loan B2 Ba3 LGD 2 16%
Euro Senior Secured
Term Loan B2 Ba3 LGD 2 16%
8.750% Subordinated
Notes Caa2 Caa1 LGD 4 61%
8.750% Subordinated
Notes Caa2 Caa1 LGD 4 61%
Moody's explains that current long-term credit ratings are
opinions about expected credit loss, which incorporate both the
likelihood of default and the expected loss in the event of
default. The LGD rating methodology will disaggregate these two
key assessments in long-term ratings. The LGD rating
methodology will also enhance the consistency in our notching
practices across industries and will improve the transparency
and accuracy of our ratings as our research has shown that
credit losses on bank loans have tended to be lower than those
for similarly rated bonds.
Probability-of-default ratings are assigned only to issuers, not
specific debt instruments, and use the standard Moody's alpha-
numeric scale. They express Moody's opinion of the likelihood
that any entity within a corporate family will default on any of
its debt obligations.
Loss-given-default assessments are assigned to individual rated
debt issues -- loans, bonds, and preferred stock. Moody's
opinion of expected loss are expressed as a percent of principal
and accrued interest at the resolution of the default, with
assessments ranging from LGD1 (loss anticipated to be 0% to 9%)
to LGD6 (loss anticipated to be 90% to 100%).
Polypore International Inc. is a worldwide developer,
manufacturer and marketer of highly specialized polymer-based
membranes used in separation and filtration processes.
Polypore's products and technologies target specialized
applications and markets that require the removal or separation
of various materials from liquids, with concentration in the
ultrafiltration and microfiltration markets. As a global
provider, Polypore has manufacturing facilities or sales offices
in ten countries serving five continents. Polypore's corporate
offices are located in Charlotte, NC.
PUREGLOW LIMITED: Calls In Liquidator from Begbies Traynor
----------------------------------------------------------
David Paul Hudson of Begbies Traynor was appointed Liquidator of
Pureglow Limited on Oct. 11 for the creditors' voluntary
winding-up proceeding.
Headquartered in Enfield, England, Pureglow Limited --
http://www.pureglow.co.uk/-- specializes in the provision of
voice, data and Internet Solutions to the business community.
PURE PRINT: Names Liquidators from Insol House
----------------------------------------------
Richard Frank Simms and Martin Richard Buttriss of Insol House
were appointed Joint Liquidators of Pure Print Limited on
Oct. 11 for the creditors' voluntary winding-up proceeding.
The company can be reached at:
Pure Print Limited
5-6 Springwood Industrial Estate
Warner Drive
Braintree
Essex CM7 2YW
United Kingdom
Tel: 01376 346 065
Fax: 01376 528 821
QUIBEC PROPERTIES: Hires PKF to Administer Assets
-------------------------------------------------
C. J. Latos and B. J. Hamblin of PKF (U.K.) LLP were appointed
joint administrators of Quibec Properties Ltd. (Company Number
04516676) on Oct. 12.
Headquartered in London, England, PKF (U.K.) LLP --
http://www.pkf.co.uk-- is one of the U.K.'s leading firms of
accountants and business advisers, which specializes in advising
the management of developing private and public businesses. Its
principal services include assurance & advisory; corporate
finance; corporate recovery & insolvency; forensic; management
consultancy and taxation. It also offers financial services
through its FSA authorized company, PKF Financial Planning
Limited.
Headquartered in Borehamwood, England, Quibec Properties Ltd. is
engaged in land development.
ROSSMORE HOUSE: Appoints Liquidators from PKF (U.K.) LLP
--------------------------------------------------------
Kerry Bailey and Jonathan Newell of PKF (U.K.) LLP were
appointed Joint Liquidators of Rossmore House Limited on Oct. 13
for the creditors' voluntary winding-up procedure.
The company can be reached at:
Rossmore House Limited
Rossmore House
Rossmore Road East
Ellesmere Port
Merseyside CH653DA
United Kingdom
Tel: 0151 355 1414
Fax: 0151 355 4141
Web: http://www.rossmoregroup.co.uk/
SEVERSTAL OAO: Targets US$1.7 Billion Proceeds from London IPO
--------------------------------------------------------------
OAO Severstal expects to raise US$1.7 billion in fresh funds
from the sale of 15% of its total shares in an initial public
offering in London in November.
Alexei Mordashov, Severstal's main shareholder, is offering 15%
of the company's shares from his stake, effectively cutting his
holdings from 90% to 75%. The IPO would also increase Severstal
shares on free float from a current 10% to 15%.
As reported in the TCR-Europe on Oct. 12, Severstal plans to use
the IPO proceeds to:
-- improve the quality of its production facilities;
-- improve operating efficiencies; and
-- expand its core business, including funding of potential
acquisitions and participation in joint ventures.
"We will be ready for big moves in the future in terms of
mergers and acquisitions," Mr. Mordashov told Reuters. "How far
and to what extent it is difficult to say now."
Aside from providing fresh funds, the IPO would also boost
Severstal's profile with foreign investors. The IPO will also
value the company between US$10 billion to US$20 billion.
The company will commence its road show for the listing on
Oct. 30. Severstal has acquired the service of Citigroup Inc.,
UBS AG and Deutsche Bank AG as joint coordinators and bookrunner
for the London listing.
About Severstal
Headquartered in Cherepovets, Russia, OAO Severstal --
http://www.severstal.com/-- is the country's largest steel
producer, with steel production of 17.1 million tons in 2005.
The Company owns Severstal North America, the fifth largest
integrated steel maker in the U.S. with 2005 production of 2.7
million tons, and Lucchini, Italy's second largest steel group
with 2005 production of 3.5 million tons. Severstal is one of
the world's lowest cost and most profitable steel producers,
with 2005 EBITDA per ton of approximately EUR150 per ton.
As of Dec. 31, 2005, Severstal had US$10.75 billion in total
assets, US$3.66 billion in total liabilities and US$7.09 billion
in total shareholders' equity.
* * *
As reported in TCR-Europe on July 5, Standard & Poor's Ratings
Services kept its 'B+' long-term corporate credit rating on
Russian steelmaker OAO Severstal on CreditWatch with positive
implications following the consolidation of the company's mining
assets.
The rating was placed on CreditWatch on May 26, following the
announcement of a previously agreed merger between Severstal and
Luxembourg-based steelmaker Arcelor S.A. This merger was
cancelled on June 30.
As reported in TCR-Europe on June 28, Fitch Ratings maintained
the Rating Watch Positive status for OAO Severstal's ratings of
Issuer Default BB-, senior unsecured BB-, Short-term B and
National Long-term A+.
SKYEPHARMA PLC: Lehman Holds 5.33% of Issued Share Capital
----------------------------------------------------------
SkyePharma PLC filed a Form 8-K report with the U.S. Securities
and Exchange Commission that, on Oct. 19, 2006, Lehman Brothers
held 40,178,002 ordinary shares, representing 5.33% of the
Company's issued share capital.
About SkyePharma PLC
Headquartered in London, SkyePharma PLC (Nasdaq: SKYE; LSE: SKP)
-- http://www.skyepharma.com/-- develops pharmaceutical
products benefiting from world-leading drug delivery
technologies that provide easier-to-use and more effective drug
formulations. There are now twelve approved products
incorporating SkyePharma's technologies in the areas of oral,
injectable, inhaled and topical delivery, supported by advanced
solubilisation capabilities.
* * *
Going Concern Doubt
PricewaterhouseCoopers LLP in London, disclosed that there is
uncertainty as to when Skyepharma PLC's certain strategic
initiatives may be concluded and their effect on the Company's
working capital requirements. PwC said that this raises
substantial doubt on the Company's ability to continue as a
going concern. PwC disclosed this explanatory paragraph after
auditing the Company's financial statement for the year ended
Dec. 31, 2005.
SMARTHAUL LTD: Taps Joint Administrators from Herron Fisher
-----------------------------------------------------------
Christopher Herron and Nicola Jayne Fisher of Herron Fisher were
appointed joint administrators of Smarthaul Ltd. (Company Number
5673080) on Oct. 16.
The administrators can be reached at:
Christopher Herron and Nicola Jayne Fisher
Herron Fisher
Capital Business Centre
22 Carlton Road
Croydon
Surrey CR2 0BS
United Kingdom
Tel: 07956 640156
E-mail: chris.herron@begbies-traynor.com
Headquartered in Swindon, England, Smarthaul Ltd. --
http://www.smarthaul.com/-- is engaged in web-based haulage
library.
SOLO CUP: Moody's Assigns Loss-Given-Default Ratings
----------------------------------------------------
In connection with Moody's Investors Service's implementation of
its new Probability-of-Default and Loss-Given-Default rating
methodology for the non-paper Packaging sector, the rating
agency confirmed its B3 Corporate Family Rating for Solo Cup
Company.
Moody's also confirmed its probability-of-default ratings and
assigned loss-given-default ratings on these three loans and a
bond issue:
Projected
POD LGD Loss-Given
Debt Issue Rating Rating Default
---------- ------- ------ -------
US$150 million
Sr. Sec.
First Lien Revolver
maturing
Feb. 27, 2010 B2 LGD3 34%
US$637 million
Sr. Sec.
First Lien
Term Loan B
due Feb. 27, 2011 B2 LGD3 34%
US$80 million
Second Lien
Term Loan due
Feb 27, 2012 Caa1 LGD5 70%
US$325 million
8.5% Sr. Sub. Notes
due Feb. 15, 2014 Caa2 LGD5 87%
Moody's explains that current long-term credit ratings are
opinions about expected credit loss, which incorporate both the
likelihood of default and the expected loss in the event of
default. The LGD rating methodology will disaggregate these two
key assessments in long-term ratings. The LGD rating
methodology will also enhance the consistency in our notching
practices across industries and will improve the transparency
and accuracy of our ratings as our research has shown that
credit losses on bank loans have tended to be lower than those
for similarly rated bonds.
Probability-of-default ratings are assigned only to issuers, not
specific debt instruments, and use the standard Moody's alpha-
numeric scale. They express Moody's opinion of the likelihood
that any entity within a corporate family will default on any of
its debt obligations.
Loss-given-default assessments are assigned to individual rated
debt issues -- loans, bonds, and preferred stock. Moody's
opinion of expected loss are expressed as a percent of principal
and accrued interest at the resolution of the default, with
assessments ranging from LGD1 (loss anticipated to be 0% to 9%)
to LGD6 (loss anticipated to be 90% to 100%).
Headquartered in Highland Park, Illinois, Solo Cup Company --
http://www.solocup.com/-- manufactures disposable foodservice
products for the consumer and retail, foodservice, packaging,
and international markets. Solo Cup has broad expertise in
plastic, paper, and foam disposables and creates brand name
products under the Solo, Sweetheart, Fonda, and Hoffmaster
names. The Company was established in 1936 and has a global
presence with facilities in Asia, Canada, Europe, Mexico, Panama
and the United States.
THINKSUMMER LIMITED: Taps Liquidators from Fisher Partners
----------------------------------------------------------
David Birne and Stephen M. Katz of Fisher Partners were
appointed Joint Liquidators of Thinksummer Limited on Oct. 12
for the creditors' voluntary winding-up procedure.
Headquartered in Tunbridge Wells, Thinksummer Limited --
http://outdoor-leisure-garden-furniture.co.uk/-- supplies
garden furniture and outdoor leisure products.
TIG HOLDINGS: S&P Affirms BB- Counterparty Credit Ratings
---------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'BB'
counterparty credit ratings on Fairfax Financial Holdings Ltd.
and Crum & Forster Holdings Corp. and removed them from
CreditWatch, where they were placed on July 28.
Standard & Poor's also said that it affirmed and removed from
CreditWatch a number of ratings on FFH's related entities,
including:
-- the 'BBB' counterparty credit and financial
strength ratings on FFH's core operating companies;
-- the 'BB-' counterparty credit rating on TIG Holdings Inc.;
-- the 'A-' counterparty credit and financial
strength ratings on Odyssey America Reinsurance
Corp., Clearwater Insurance Co., and Hudson
Specialty Insurance Co.; and
-- the 'BBB-' counterparty credit rating on Odyssey
Re Holdings Corp.
The outlook on all these companies is negative.
The ratings had been placed on CreditWatch negative following
the announcement by FFH of a delay of its second-quarter 2006
interim report to shareholders.
The ratings on FFH and its related core entities are based on
the group's good competitive position, improving earnings, good
and improving capitalization, and strong liquidity. Reserves,
recoverables, and financial leverage have all improved in the
last few years and are not viewed as significant negative rating
factors. "Offsetting these positive factors are FFH's
qualitative areas of governance, risk controls, and enterprise
risk management," explained Standard & Poor's credit analyst
Damien Magarelli. "These areas are the reason for the
assignment of a negative outlook."
A downgrade is possible if FFH is unable to further improve its
governance oversight, accounting risk controls, and overall risk
management by October 2007. A revision of the outlook to stable
outlook is possible if FFH meets these expectations, has a
combined ratio of less than 100% at the consolidated continuing
operations, reserve charges within expectations (although no
large charges are expected), has a capital ratio consistent with
the rating, and maintains holding-company cash at more than
US$250 million.
TNK-BP HOLDING: Mulls Raising US$1 Bln to Balance Debt Portfolio
----------------------------------------------------------------
OAO TNK-BP Holding considers issuing bonds and taking loans to
balance its debt portfolio, RIA Novosti reports.
James Owens, TNK-BP's chief financial officer, said the company
is reviewing plans to raise around US$1 billion possibly through
raising bank loans and borrowing funds and via debt financing
instruments in 2007.
About TNK-BP
Headquartered Moscow, Russia, TNK-BP Holding OAO --
http://www.tnk-bp.com/-- operates six refineries in Russia and
Ukraine, and markets products through 2,100 retail service
stations operating under TNK and BP brand. TNK owns 56.5% of
TNK-BP Holding, and Onako and Sidanco hold 6.8% and 30.9%,
respectively. The other 5.8% belongs to TNK-BP shareholders.
TNK-BP holds a strategic position as the second largest liquids
producer in the Russian intergraded operating environment,
accounting for approximately 18% of Russia's total crude oil
production.
* * *
Standard & Poor's assigned BB+/Stable foreign currency local
currency ratings to TNK-BP on June 30, 2006.
Moody's assigned Ba2/Positive foreign currency rating to the
company on Jan. 24, 2006.
Fitch assigned BB+/Positive foreign currency rating to TNK-BP on
Feb. 13, 2006, and BB+/Positive local currency rating on Aug.
24, 2005.
TRADE AND INVEST: Brings In DTE Leonard Curtis as Administrators
----------------------------------------------------------------
J. M. Titley and A. Poxon of DTE Leonard Curtis were appointed
joint administrators of Trade and Invest Communications Ltd.
(Company Number 04782232) on Oct. 3.
DTE Leonard Curtis -- http://www.dtegroup.com/-- offers tax
consultancy, company secretarial services, corporate finance,
corporate recovery, turnaround, forensic accounting, financial
services and insurance & risk management.
Headquartered in Macclesfield, England, Trade and Invest
Communications Ltd. is engaged in advertising, software
consultancy and supply.
TRW AUTOMOTIVE: Moody's Assigns Loss-Given-Default Ratings
----------------------------------------------------------
In connection with Moody's Investors Service's implementation of
its new Probability-of-Default and Loss-Given-Default rating
methodology for the U.S. Automotive and Equipment sectors, the
rating agency confirmed its Ba2 Corporate Family Rating for
TRW Automotive. Additionally, Moody's revised or held its
probability-of-default ratings and assigned loss-given-default
ratings on these loans and bond debt obligations:
Projected
Old POD New POD LGD Loss-Given
Debt Issue Rating Rating Rating Default
---------- ------- ------- ------ ----------
Senior Secured
Revolving Credit
Facility Ba2 Ba1 LGD2 24%
Senior Secured
Term Loan A Ba2 Ba1 LGD2 24%
Senior Secured
Term Loan B Ba2 Ba1 LGD2 24%
Senior Secured
Term Loan E Ba2 Ba1 LGD2 24%
9.375% Senior Notes Ba3 Ba3 LGD 5 70%
10.125% Senior Notes Ba3 Ba3 LGD 5 70%
11.75% Subordinated
Notes B1 B1 LGD 6 94%
11% Subordinated
Notes B1 B1 LGD 6 94%
Moody's explains that current long-term credit ratings are
opinions about expected credit loss, which incorporate both the
likelihood of default and the expected loss in the event of
default. The LGD rating methodology will disaggregate these two
key assessments in long-term ratings. The LGD rating
methodology will also enhance the consistency in our notching
practices across industries and will improve the transparency
and accuracy of our ratings as our research has shown that
credit losses on bank loans have tended to be lower than those
for similarly rated bonds.
Probability-of-default ratings are assigned only to issuers, not
specific debt instruments, and use the standard Moody's alpha-
numeric scale. They express Moody's opinion of the likelihood
that any entity within a corporate family will default on any of
its debt obligations.
Loss-given-default assessments are assigned to individual rated
debt issues -- loans, bonds, and preferred stock. Moody's
opinion of expected loss are expressed as a percent of principal
and accrued interest at the resolution of the default, with
assessments ranging from LGD1 (loss anticipated to be 0% to 9%)
to LGD6 (loss anticipated to be 90% to 100%).
Headquartered in Livonia, Michigan, TRW Automotive Holdings
Corp. (NYSE: TRW) -- http://www.trwauto.com/-- is an automotive
supplier. Through its subsidiaries, it employs approximately
63,000 people in 25 countries. TRW Automotive products include
integrated vehicle control and driver assist systems, braking
systems, steering systems, suspension systems, occupant safety
systems (seat belts and airbags), electronics, engine
components, fastening systems and aftermarket replacement parts
and services.
UNITED BISCUITS: Blackstone & PAI to Buy Business for GBP1.6 Bln
----------------------------------------------------------------
United Biscuits Group has reached an agreement to sell UB in its
entirety to a consortium made up of The Blackstone Group and PAI
Partners for GBP1.6 billion (US$3 billion).
The purchase will be financed through an equal combination of
equity from Blackstone and PAI, and debt financing, The
Associated Press reports. The buyers expect to complete the
deal by December. United Biscuits will be owned equally by both
companies.
"We are attracted to United Biscuits' market position as well as
its existing and new product lines," David Blitzer, senior
managing director of The Blackstone Group, was quoted by the
International Herald Tribune as saying.
Simon Bowers of The Guardian says that the company's backers
Cinven, PAI and MidOcean Partners decided against a stock market
flotation after receiving an offer from Blackstone and PAI
In 2001, Cinven, MidOcean, PAI and Kraft Foods bought United
Biscuits with Cinven and MidOcean each holding a 30% stake in
the business, and PAI 15%.
According Jamie Cregan of Food Business Review, Kraft sold its
25% stake early this year. In February 2006, Goldman Sachs was
appointed to handle the sale of the company after Cinven and
MidOcean opted to sell their stake, Mr. Cregan relates.
The deal is subject to the clearance by the European Commission
as well as consent of the U.K. Pension Regulator. UB will also
be informing all relevant employment bodies as required.
UB is the number one player in the U.K. biscuit market with
well-known household brands such as McVitie's, go ahead! and
Jacob's. UB is also the number two business in the biscuit
markets in France and Belgium, joint number one in the
Netherlands, the number two in the U.K. bagged snacks market and
U.K. cake market and the number one in the U.K. branded nuts
market.
"Blackstone has a successful track record of owning and
developing companies such as UB and I believe the Company will
benefit from their involvement," Malcolm Ritchie, UB Chief
Executive, says. "I am delighted that PAI has decided to remain
a shareholder and participate in the next phase of the company's
development and growth. I would also like to thank both Cinven
and MidOcean, our departing shareholders, for their support and
valued advice over the past six years. We delivered a strong
half-year result and we continue to see opportunities to further
develop our key brands in all sectors."
About Blackstone
Headquartered in New York, U.S.A., The Blackstone Group --
http://www.blackstone.com/-- invests on private equity, real
estate, corporate debt, distressed debt, and marketable
alternative investments. The Corporate Advisory Services and
Restructuring & Reorganization Advisory Services businesses have
handled assignments valued at over US$550 billion.
About PAI Partners
Headquartered in Paris, France, PAI Partners --
http://www.paimanagement.com/-- invests in medium- to large-
sized public or private business buyouts in Europe, targeting
the consumer goods or general industrial sectors. Key portfolio
companies include waste management provider Saur, dairy product
leader Yoplait (from Sodiaal), and Italian apparel retailer
Gruppo Coin. The investment company owns and operates
facilities in London, Madrid, Milan, and Paris.
About United Biscuits
Headquartered in London, United Kingdom, United Biscuits Group -
- http://www.unitedbiscuits.com/-- manufactures biscuit and
snacks. UB's biscuit and snack cake brands include stalwarts
BN, Carr's, Cream Crackers, Delacre, Jacob's, Krackawheet, and
McVitie's Digestive Biscuits. Its nut and snack brands include
KP Nuts, McCoy's, and Hula Hoops.
* * *
As reported in the TCR-Europe on Oct. 23, Fitch Ratings has
withdrawn the B-/RR4 ratings on United Biscuits Finance PLC's
10.625% euro-denominated and 10.75% sterling-denominated senior
notes, which were on Rating Watch Positive. This follows the
early redemption of these instruments with the net proceeds from
the sale of UB's Southern European business completed in early
September.
These ratings remain on RWP:
-- Regentrealm Limited Issuer Default rating: B- on RWP;
-- Regentrealm Limited Sr. secured debt: BB-/RR1 on RWP; and
-- United Biscuits Finance PLC IDR: B- on RWP.
As reported in the TCR-Europe on Oct. 20, Moody's downgraded to
B2 from B1 the rating of United Biscuits Finance plc's "first
loss" term loan C. Following the early redemption in October of
the Eurobonds due 2011, which were previously subordinated to
other debt within the capital structure, the senior facilities
currently represent virtually the entire remaining debt of the
group. As such, the ranking of "first loss" Term loan C has
weakened relative to the remaining senior facilities.
Ratings affected:
United Biscuits Finance plc
* B1 corporate family rating affirmed.
Regentrealm Limited
* Ba3 rating of the senior secured credit facilities
A and B and the revolving credit facility affirmed.
* B1 rating of "first loss" term loan C borrowed at
United Biscuits (U.K.) Ltd. lowered to B2.
Moody's said the outlook for all ratings is stable.
UNITED BISCUITS: Transfers Nik Naks, Crunchies Production to UK
---------------------------------------------------------------
Following the acquisition of the brands and certain associated
assets of Nik Naks and Wheat Crunchies in February 2006 from
Golden Wonder, United Biscuits transfers the production of these
brands to its U.K. snacks factories in 2007.
The transition is expected to be complete by Spring 2007 after
which Nik Naks will be made at UB's snacks factory in Ashby-de-
la-Zouch and Wheat Crunchies will be made at UB's Teesside
factory.
"Nik Naks and Wheat Crunchies are proving to be an excellent
addition to the U.K. snack portfolio, Benoit Testard, UB U.K.
Managing Director. The moving of production to UB factories
means that Nik Naks and Wheat Crunchies will benefit from UB's
world class operating procedures and support the long term
future of our UK factories."
UB's acquisition of the brands has boosted its value share of
the bagged snacks market to 17% ACNielsen 52 w/e 7.10.06 and
further strengthened its position as the number two savoury
snacks supplier in the U.K. The company has given its
commitment to the long-term growth and investment behind Nik
Naks and Wheat Crunchies.
As part of its ongoing health and nutrition strategy, UB has
already reduced the saturated fat content by 50% and sodium
content by up to 30% in both brands, as well as removing all
artificial sweeteners. The reformulation makes the brands
healthier whilst retaining the same well-loved taste and
texture.
About United Biscuits
Headquartered in London, United Kingdom, United Biscuits Group -
- http://www.unitedbiscuits.com/-- manufactures biscuit and
snacks. UB's biscuit and snack cake brands include stalwarts
BN, Carr's, Cream Crackers, Delacre, Jacob's, Krackawheet, and
McVitie's Digestive Biscuits. Its nut and snack brands include
KP Nuts, McCoy's, and Hula Hoops.
* * *
As reported in the TCR-Europe on Oct. 23, Fitch Ratings has
withdrawn the B-/RR4 ratings on United Biscuits Finance PLC's
10.625% euro-denominated and 10.75% sterling-denominated senior
notes, which were on Rating Watch Positive. This follows the
early redemption of these instruments with the net proceeds from
the sale of UB's Southern European business completed in early
September.
These ratings remain on RWP:
-- Regentrealm Limited Issuer Default rating: B- on RWP;
-- Regentrealm Limited Sr. secured debt: BB-/RR1 on RWP; and
-- United Biscuits Finance PLC IDR: B- on RWP.
As reported in the TCR-Europe on Oct. 20, Moody's downgraded to
B2 from B1 the rating of United Biscuits Finance plc's "first
loss" term loan C. Following the early redemption in October of
the Eurobonds due 2011, which were previously subordinated to
other debt within the capital structure, the senior facilities
currently represent virtually the entire remaining debt of the
group. As such, the ranking of "first loss" Term loan C has
weakened relative to the remaining senior facilities.
Ratings affected:
United Biscuits Finance plc
* B1 corporate family rating affirmed.
Regentrealm Limited
* Ba3 rating of the senior secured credit facilities
A and B and the revolving credit facility affirmed.
* B1 rating of "first loss" term loan C borrowed at
United Biscuits (U.K.) Ltd. lowered to B2.
Moody's said the outlook for all ratings is stable.
VNESHTORGBANK JSC: To Start Chinese Operations in 2008
------------------------------------------------------
JSC Vneshtorgbank will open a branch in China in 2008 to cater
to Russian corporate clients operating in the Asian country, RIA
Novosti reports.
"We will establish a branch [in China] whose services will focus
on Russian corporate clients," Andrei Kostin, VTB Chairman, was
quoted by RIA Novosti as saying.
About Vneshtorgbank
Headquartered in Moscow, Russia, JSC Vneshtorgbank and its
subsidiaries are a leading Russian commercial banking group,
offering a wide range of banking services and conducting
operations in both Russian and international markets.
As of Dec. 31, 2005, the Group had a network of 151 branches,
including 55 branches of VTB, 42 branches of VTB Retail Services
and 54 branches of Industry and Construction Bank, located in
major Russian regions. The Group operates through three
subsidiaries located in the CIS (Armenia, Georgia, Ukraine),
seven subsidiaries located in Western Europe (Austria, Cyprus,
Switzerland, Germany, Luxembourg, France) and Great Britain and
through five representative offices located in India, Italy,
China, Byelorussia and Ukraine.
* * *
As reported in TCR-Europe on July 31, following the recent
upgrade of the Russian sovereign foreign and local currency IDRs
to BBB+ from BBB, Fitch ratings lifted Vneshtorgbank and
Vnesheconombank ratings at:
Vnesheconombank:
-- Upgraded to IDR BBB+ from BBB with a Stable Outlook; and
-- Short-term upgraded to F2 from F3, Support affirmed at 2.
Vneshtorgbank:
-- Upgraded to foreign currency and local currency IDR BBB+
from BBB with a Stable Outlook;
-- Short-term upgraded to F2 from F3;
-- Individual affirmed at C/D; and
-- Support affirmed at 2.
WESCO INT'L: S&P Assigns B Rating on Proposed US$250-Mln Notes
--------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' rating to
WESCO International Inc.'s proposed US$250 million convertible
senior unsecured notes 2026. Proceeds from the offering will be
used to help finance WESCO's acquisition of Communications
Supply Holdings Inc. for US$525 million. WESCO International is
the parent company of WESCO Distribution Inc., its main
operating subsidiary.
Standard & Poor's also affirmed its 'BB-' corporate credit
rating on the electrical distributor. The outlook is stable.
"The speculative-grade ratings on WESCO reflect its somewhat
aggressive financial policies, which more than offset the
company's satisfactory business-risk profile as a leading
distributor of electrical construction products; maintenance,
repair, and operating supplies; and integrated supply and
outsourcing services," said Standard & Poor's analyst Clarence
Smith.
WESSEX BINDING: Appoints Administrators from Tenon Recovery
-----------------------------------------------------------
Nigel Ian Fox and Carl Stuart Jackson of Tenon Recovery were
appointed joint administrators of Wessex Binding Ltd. (Company
Number 043292) on Sept. 20.
Headquartered in Eastleigh, England, Tenon Recovery --
http://www.tenongroup.com/-- provides accounting and business
advice to owner-managed and private business.
Wessex Binding Ltd. can be reached at:
Unit 28 Woolsbridge Ind Est
Liberty Cl
Three Legged Cross
Wimborne
Dorset BH21 6SY
United Kingdom
Tel: 012 0282 2381
Fax: 012 0282 0075
WOOD NORTON: Hires Alisdair J. Findlay to Liquidate Assets
----------------------------------------------------------
Alisdair J. Findlay of Findlay James was appointed Liquidator of
Wood Norton Conference Centre Limited on Oct. 12 for the
creditors' voluntary winding-up procedure.
Headquartered in Evesham, England, Wood Norton Conference Centre
Limited provides a modern and contrasting venue with a further
100 en-suite bedrooms and a flexible purpose built range of
meeting and syndicate rooms ideal for conferences and training
courses up to 120 delegates. Leisure facilities are available
onsite including a gym, indoor tennis courts, squash court and
billiard room. The 10 acres of grounds and woodland are ideal
for outside activities and Marquee events. Clay pigeon shooting
and motorized activities are also possible. Guests are also
welcome to take advantage of the neighboring Vale Golf and
Country Club.
WORKMART LIMITED: Calls In Liquidators from RMT
-----------------------------------------------
Anthony Alan Josephs and Linda Ann Farish of RMT were appointed
Liquidators of Workmart Limited on Oct. 6 for the creditors'
voluntary winding-up procedure.
The company can be reached at:
Workmart Limited
Unit 10
Philadelphia Complex
Philadelphia
Houghton Le Spring
Tyne And Wear DH4 4UG
United Kingdom
Tel: 0191 584 3822
Fax: 0191 584 4072
* Moody's Sees Trough in West European Credit Quality in H1 2007
----------------------------------------------------------------
Rating downgrades outnumbered upgrades among Western European
issuers of debt by a widening margin for the second consecutive
quarter in July to September this year, reports Moody's
Investors Service in a new Special Comment entitled "European
Credit Trends Q3 2006". As a result, 2006 is set to be the
first calendar year since 2003 in which downgrades will have
exceeded upgrades outright. Moody's economists interpret
forward-looking rating signals as predicting that Western
European credit quality will continue to deteriorate but will
hit a trough prior to the middle of 2007.
In the third quarter of 2006, Moody's changed the ratings of 48
Western European issuers, announcing 34 downgrades and 14
upgrades, giving a so-called 'rating gap' of -20. Following a
gap of -14 in the second quarter, this marks not only a second
consecutive deterioration but also a significant acceleration in
the negative trend. The upgrade-to-downgrade ratio also
declined, ending the third quarter at 0.4 compared to a
relatively more benign 0.6 in the previous quarter. The Q3 2006
level is also the lowest since Q1 2003, the trough in the
previous downward cycle, placing Western European credit quality
into an unambiguous soft patch.
"As a result, 2006 is the first year since 2003 in which an
outright negative performance is on the cards: only the exact
magnitude of this deterioration is uncertain at this stage,"
explains Andrea Zazzarelli, Associate Economist and co-author of
the report, adding that: "Moody's believes that tighter monetary
policy will curb the appetite for investment-related
transactions and that event risk will therefore gradually
withdraw its deteriorating effect on the credit cycle, with the
focus shifting back to credit fundamentals. However, a credit
cycle more sensitive to fundamentals and subject to higher
interest rates will put an increased strain on more leveraged
firms and on the speculative-grade segment."
By examining forward-looking rating signals (namely rating
reviews and changes in rating outlooks), Moody's predicts that
Western European credit quality will deteriorate further in the
near term but will hit a likely trough during the first half of
2007. The implied rating gap derived from developments in the
composition of the Moody's Watchlist (i.e. ratings that have
placed on review) remains in negative territory but has climbed
further off the low registered in Q1 2006. In addition, in
September outlook changes in a positive direction outnumbered
negative outlook adjustments for the first time since February,
although for the third quarter as a whole the balance of actions
was still negative.
"Nonetheless, the turnaround in rating outlook dynamics at the
very end of the third quarter is still too isolated for us to
flag it unequivocally as an inflection point," cautions Paul
Guest, Chief European Economist and co-author of the report.
"Furthermore, the deterioration in financial metrics among
investment-grade issuers could worsen as the impact of further
monetary tightening feeds through to their balance sheets.
Elevated debt servicing costs will also crimp the performance of
highly leveraged issuers, the majority of which are in the
speculative-grade segment. As a result, the maturing high-yield
cohort will act as a weight on overall credit quality."
One of the themes of the report is the larger-than-expected
surge in event risk in the third quarter and Moody's belief that
this is unlikely to be repeated in the final three months of the
year. Shifts in the composition of the Western European
Watchlist indicate that the risks of a further pronounced
deterioration in credit quality during Q4 2006 are relatively
modest: the number of issuers on review for possible upgrade
fell by 2 to 11 by end-Q3 compared to end-Q2, while the number
of issuers on review for possible downgrade declined by a much
more considerable margin of 19 units to 33. Taken as a whole,
the forward-looking rating signals suggest that industrial goods
and services and healthcare and pharmaceuticals are the most
likely sectors to outperform in the near term, followed by
retail and utilities.
Moody's believes tightening monetary policy remains a key near-
term risk, but notes that the interest rate cycle is approaching
its peak in Western Europe and the likelihood of an inflationary
overshoot is relatively small. The ECB Governing Council and
its counterparts elsewhere on the continent will opt for two to
three more clearly telegraphed moves, which eases some of the
concerns highlighted in the rating agency's previous quarterly
update. "As interest rates in Europe continue to rise,
deterioration in the credit quality of the speculative-grade
segment will lead to a gradually higher number of defaults. In
turn, investors will rebalance their risk/return trade-off in
favor of higher-rated assets, leading to a widening in high-
yield spreads. Given a benign monetary and financial backdrop,
this adjustment should proceed in an orderly fashion," concludes
Guest.
* BOOK REVIEW: Leveraged Management Buyouts: Causes and
Consequences
-------------------------------------------------------
Author: Yakov Ahihud, editor
Publisher: Beard Books
Softcover: 284 pages
List Price: US$34.95
Order your personal copy at
http://amazon.com/exec/obidos/ASIN/1587981386/internetbankrupt
This book is the outcome of a 1988 conference organized by the
Salomon Brothers Center for the Study of Financial Institutions
at the Stern School of Business of New York University. It
consists of 12 papers presented at that conference, papers that
represented the first ever in-depth study of leveraged
management buyouts (MBO).
MBOs were a hot topic in the late 1980s, as a rapidly growing
reorganization phenomenon closely tied to junk bonds. Debate
over MBOs centered around two uncertainties: fairness to
shareholders and possible conflicts of interest between
management/acquirer and shareholders, and doubts about the
future performance of companies acquired through MBOs.
The authors' objective was to expand the understanding of
academics, practitioners, and policymakers of the causes and
consequences of MBOs and to contribute to data on appropriate
policies for legislation and regulation regarding them.
The first of three sections reviews characteristics and
consequences of MBOs. The first chapter, by the editor, Yakov
Ahihud, surveys the empirical evidence on the effects of MBO
announcements on stock and bond prices.
He considers arguments for and against mandating an auction of
the MBO target firm and analyzes points of view about and
evidence on conflicts of interest between management and
shareholders. He evaluates motivations for MBOs, such as tax
benefits and improved incentives.
The second chapter compares and contrasts the characteristics of
corporations subject to MBOs with other corporations. Two
authors then look into performance of target firms before and
after buyouts.
One interviewed CEOs of corporations acquired by MBO about their
motivations for and changes in managerial strategy after the
MBO. Both authors found that buyouts were followed by
significant improvements in firms' performance.
The focal points of the second section were legal and tax
issues. The first chapter discusses the role of management in
MBOs, potential conflict with shareholder interests, and the
matter of fairness. They analyzed court decisions and the
proposed remedies, and evaluated the legal consequences of
various business practices applied in MBOs.
The second chapter discusses the sources of tax benefits and
various financing methods, with a focus on employee stock option
plans.
The final chapter concluded that other reorganization strategies
could yield the same tax benefits as MBOs.
The final section presents a lively debate on policy and
legislative options to resolve issues that arise from MBOs.
Authors include a U.S. congressman, an SEC commissioner and
professors from Harvard Law School and the School of Law at
Stanford University. Their viewpoints are discussed
compellingly and are often in opposition. One author avowed
that MBOs were already over-regulated while another argued for
the need of an auction for the corporation once an MBO proposal
was announced.
Opinion on the two main questions addressed by the book was
varied. With regard to fairness, while shareholders received an
average of 30-40 percent over market price for their shares,
some were prevented from reaping the benefits of shrewd post-
buyout strategies.
With regard to future performance clouded by heavy debt, some
MBOs failed, those that "may well have encountered difficulties
as a result of the financial pressures imposed by leveraged
transactions." More were successful, however, becoming
"reinvigorated companies that have regained a sharp competitive
edge as a result of an MBO."
Anecdotal evidence suggested the successes were due to
management's desisting from "managing so they can get to the
country club by 3:00 p.m."
Yakov Amihud is the Ira Leon Rennert Professor of
Entrepreneurial Finance at the Stern School of Business, New
York University.
*********
Each Tuesday edition of the TCR contains a list of companies
with insolvent balance sheets whose shares trade higher than
US$3 per share in public markets. 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.
A list of Meetings, Conferences and Seminars appears in each
Thursday's edition of the TCR. Submissions about insolvency-
related conferences are encouraged. Send announcements to
conferences@bankrupt.com/
Each Friday's edition of the TCR includes a review about a book
of interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter -- Europe is a daily newsletter co-
published by Bankruptcy Creditors' Service, Inc., Fairless
Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick,
Maryland USA. Jazel Laureno, Julybien Atadero, Carmel Zamesa
Paderog, Joy Agravante, and Zora Jayda Zerrudo Sala, Editors.
Copyright 2006. All rights reserved. ISSN 1529-2754.
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.
The TCR Europe subscription rate is US$575 per half-year,
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 * * *