/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/081017.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 17, 2008, Vol. 9, No. 207 Headlines A U S T R I A JET MARINE: Claims Registration Period Ends October 28 LUCIJA SOKCEVIC: Claims Registration Period Ends October 28 NORBERT LATTNER: Claims Registration Period Ends October 27 E S T O N I A SUPERSEACAT: Distributes Liquidation Bulletin to Passengers F R A N C E ELECTRICITE DE FRANCE: Withdraws Bid for Constellation Energy PARIS PRIME: S&P Junks Rating on Class D Notes to CCC- THOMSON SA: Third Quarter Revenue Down by 15% * FRANCE: Gov't. Package Helps Restore Confidence, Moody's Says G E R M A N Y ALPHA 1 HAUSVERTRIEB: Claims Registration Period Ends Oct. 24 AXXIS MARKETING: Claims Registration Period Ends October 24 CAMA FERTIGUNGSTECHNOLOGIE: Claims Registration Ends Oct. 20 CRIVITZ CONSULT: Claims Registration Period Ends October 24 EVENT-ART: Claims Registration Period Ends October 24 FIP PUBLISHING: Creditors' Meeting Slated for October 24 GP VERMOEGENSVERWALTUNGS: Claims Filing Period Ends Oct. 20 IFE PRIVAT-INSTITUT: Creditors Meeting Slated for October 24 KIFFE AMC: Claims Registration Period Ends October 20 TAS GMBH: Claims Registration Period Ends October 23 TS CO.MIT: S&P Downgrades Ratings on Class E and F Notes to B/CCC VULCAN LIMITED: Fitch Affirms EUR3MM Class G Notes Rating at 'BB' WOLFGANG BAUER: Creditors Meeting Slated for October 24 H U N G A R Y * HUNGARY: Forint and Stock Drop Wednesday on Foreign Lending Cuts I C E L A N D * S&P Lists Synthetic CDO Tranches Exposed to Icelandic Banks I T A L Y ALITALIA SPA: Italy Notifies EU on Administration Procedure BANCA ITALEASE: Fitch Keeps 'BB' Securities Rating Under RWN BANCAPULIA SPA: Moody's Retains Stable Outlook on D+ BFSR * S&P Hikes High Constant Payment Rate Assumption for Italian RMBS K A Z A K H S T A N ANT BUILDER: Creditors Must File Claims by November 25 DATA WIZARDS: Claims Deadline Slated for November 25 ENERGO SERVICE: Claims Filing Period Ends November 25 FOSFOHIM+ LLP: Creditors' Claims Due on November 21 KAGANAT-1 LLP: Claims Registration Ends November 25 KOSTANAI-PRESS LLP: Creditors Must File Claims by November 25 KPP-AKTAU LLP: Claims Deadline Slated for November 25 SERVICE-JOLY LLP: Claims Filing Period Ends November 25 SIMAKS LIMITED: Creditors' Claims Due on November 21 SPETS COMPLECT: Claims Registration Ends November 25 K Y R G Y Z S T A N CITY VISION: Creditors Must File Claims by November 19 L U X E M B O U R G EVRAZ GROUP: Crude Steel Production Volume Up 32% in 3Q 2008 RUSSIAN FACTORING: S&P Puts BB Rating on RUR200MM Mezzanine Loan N E T H E R L A N D S ASTIR BV: Fitch Withdraws Ratings on Lack of Ongoing Information PANGAEA ABS: Fitch Puts 'BB-'Rated Class F Notes Under Watch Neg. * Moody's Gives Negative Credit Outlook for Dutch Insurance Sector P O R T U G A L * PORTUGAL: Retains 2.2% of GDP Budget Deficit Target for 2009 R U S S I A EVRAZ GROUP: Crude Steel Production Volume Up 32% in 3Q 2008 GLOBEX: Bars Withdrawals Wednesday Amid Bank Run KHNATI MANSISK: Rumors on Insolvency Prompt Heavy Withdrawals NIZHNI NOVGOROD: Account Closures Rise Amid Financial Crunch PENOIZOL LLC: Creditor Must File Claims by November 3 SIBUR HOLDING: Moody's Confirms Ba2 Corporate Family Rating TOMSKOE AIRCRAFT: Creditors Must File Claims by November 26 URAL CONSTRUCTION: Creditor Must File Claims by November 3 WEST SIBERIAN: Standard & Poor's Affirms Short-Term Rating at 'C' YAMAL-NENETS: West Siberian Share Increase Won't Hurt S&P Ratings YURYUZANSKAYA ENERGY: Creditors Must File Claims by November 3 ZENIT LLC: Creditor Must File Claims by November 3 S P A I N AYT DEUDA: S&P Slashes Rating on Class C Notes to BB S W E D E N SEQUANA CAPITAL: S&P Withdraws B Short-Term Corp. Credit Rating S W I T Z E R L A N D BAGGI'S DESKTOP-TEAM: Creditors Must File Claims by Oct. 30 CORMEX LLC: Deadline to File Proofs of Claim Set Oct. 30 EMEAA COMPUTER: Creditors Have Until Oct. 30 to File Claims LOCHER CONSULTING: Proofs of Claim Filing Deadline is Oct. 30 NOVASEP JSC: Creditors' Proofs of Claim Due by Oct. 30 SASSA LLC: Oct. 30 Set as Deadline to File Claims SCHIFFSKONSTRUKTIONEN LLC: Deadline to File Claims Set Oct. 29 UBS AG: Takes Measures to De-Risk and Reduce Balance Sheet T U R K E Y * TURKEY: Banking System Still Resilient, Moody's Says U K R A I N E COMMUNAL SERVICES: Creditors Must File Claims by October 22 GLUKHOV PLANT: Creditors Must File Claims by October 22 INDUSTRIAL BUILDING: Creditors Must File Claims by October 22 KIROVOGRAD REGIONAL: Creditors Must File Claims by October 22 KHLEBODAR LLC: Creditors Must File Claims by October 22 PENEZHKOVOYE LLC: Creditors Must File Claims by October 22 PRIOZERNOYE: Creditors Must File Claims by October 22 REPAIR AND BUILDING: Creditors Must File Claims by October 22 SOBOL LLC: Creditors Must File Claims by October 22 SOKHA LLC: Creditors Must File Claims by October 22 TOOL PRODUCTION: Creditors Must File Claims by October 22 UKRAINIAN BUILDING: Creditors Must File Claims by October 22 * ODESSA: S&P Puts B+ Credit Rating on WatchNeg Over Growing Risks * UKRAINE: Rising Deficits Cue S&P to Put Low-B Ratings on Watch * S&P Puts Ratings on 6 Ukrainian Governments Under Negative Watch U N I T E D K I N G D O M AERCO LTD: S&P Drops Rating on Class A-3 Notes to 'BB' BRITISH AIRWAYS: Drops Fuel Surcharge by Up to GBP13 GREGOR SHORE: Calls in Administrators from Deloitte and Touche KAUPTHING SINGER: Liquidator In Talks with Potential Buyers LE FROG BISTRO: Calls in Begbies Traynor as Administrators LEHMAN BROTHERS: Hedge Funds Await UK Unit's US$65BB Frozen Assets NORTHERN ROCK: Reports Encouraging Progress Against Plan OXFORD UNIVERSITY: Losses GBP30 Mil. on Icelandic Banking Crisis STORM FUNDING: Appoints Joint Administrators from PwC SWANSONS LTD: Brings in Joint Administrators from Deloitte TAG ENVIRONMENTAL: Calls in Administrators from Tenon Recovery TURKEY REALESTATE: Taps Moore Stephens to Administer Assets VIRGIN MEDIA: Seeks Amendments to Senior Facilities Agreement VIRGIN MEDIA: Fitch Affirms LT Issuer Default Rating at 'BB-' VIRGIN MEDIA: S&P's Ratings Unhurt By Proposed Amendment Requests * S&P Examines Exposure of European CDO Transactions to AIG * Financial Turmoil Hits UK Retail Sales, BRC-KPMG Monitor Shows * KPMG Appoints John Griffith-Jones as EMA Region Chairman * BOOK REVIEW: Distressed Investment Banking: ********* ============= A U S T R I A ============= JET MARINE: Claims Registration Period Ends October 28 ------------------------------------------------------ Creditors owed money by LLC Jet Marine have until Oct. 28, 2008, to file written proofs of claim to the court-appointed estate administrator: Dr. Gerd Moessler St. Veiter Strasse 9 9020 Klagenfurt Austria Tel: 0463/507 510 Fax: 0465/507 510-11 E-mail: rechtsanwalt@kucher-moessler.at Creditors and other interested parties are encouraged to attend the creditors' meeting at 11:00 a.m. on Nov. 4, 2008, for the examination of claims at: The Land Court of Klagenfurt Meeting Room 225 Second Floor Klagenfurt Austria Headquartered in Klagenfurt, Austria, the Debtor declared bankruptcy on Sept. 29, 2008, (Bankr. Case No. 40 S 58/08g). LUCIJA SOKCEVIC: Claims Registration Period Ends October 28 ----------------------------------------------------------- Creditors owed money by KEG Lucija Sokcevic have until Oct. 28, 2008, to file written proofs of claim to the court-appointed estate administrator: Dr. Stephan Riel Landstrasser Hauptstrasse 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 12:15 a.m. on Nov. 11, 2008, for the examination of claims at: The Trade court of Vienna Room 1701 Vienna Austria Headquartered in Vienna, Austria, the Debtor declared bankruptcy on Sept. 29, 2008, (Bankr. Case No. 6 S 116/08p). NORBERT LATTNER: Claims Registration Period Ends October 27 ----------------------------------------------------------- Creditors owed money by LLC Norbert Lattner have until Oct. 27, 2008, to file written proofs of claim to the court-appointed estate administrator: Dr. Klaus Doernhoefer Franz Liszt-Gasse 1 7000 Eisenstadt Austria Tel: 02682/62468 Fax: 02682/66214 E-mail: office@wirhabenrecht.at Creditors and other interested parties are encouraged to attend the creditors' meeting at 11:05 a.m. on Nov. 10, 2008, for the examination of claims at: The Land Court of Eisenstadt Hall F Eisenstadt Austria Headquartered in Eisenstadt, Austria, the Debtor declared bankruptcy on Sept. 30, 2008, (Bankr. Case No. 26 S 86/08m). ============= E S T O N I A ============= SUPERSEACAT: Distributes Liquidation Bulletin to Passengers ----------------------------------------------------------- SuperSeaCat is going into liquidation according to a bulletin the company distributed to passengers at the port of Tallinn in Estonia, Newsroom Finland reports. The company, previously known as SeaContainers Finland, blames financing difficulties and intense competition for its decision to liquidate the business. In an interview with the Finnish News Agency, Mr. Simo Zitting, of the Finnish Seamen's Union, estimates around 150 jobs lost from discontinued operations. Mr. Peter Walker, SuperSeaCat chief executive, promised customers that tickets will be refunded, the report added citing Finnish Daily, Helsingin Sanomat. =========== F R A N C E =========== ELECTRICITE DE FRANCE: Withdraws Bid for Constellation Energy ------------------------------------------------------------- Electricite de France SA aka EDF said Wednesday it would not make a competing bid for U.S. power company Constellation Energy Group Inc. because the credit crisis has made financing more difficult to obtain, Reuters reports. MidAmerican Energy, a unit of Warren Buffett's Berkshire Hathaway Inc., purchased Constellation Energy Group last month for US$4.7 billion in cash after fears that the U.S. power company could face liquidity issues sent its shares plummeting. EDF later disclosed that, along with private equity funds Kohlberg Kravis Roberts & Co and TPG, it had proposed a US$6.24 billion bid to Constellation Energy Group, Reuters writes. That offer received no response from Constellation Energy Group, which moved ahead with the MidAmerican bid instead. EDF, which owns nearly 10% of Constellation Energy Group, had continued to examine its options for a deal with the U.S. power company until the economic downturn made the transaction too difficult, FT says. Shares of Constellation Energy Group fell US$1.57, or 6.13%, to close at $24.05 on the New York Stock Exchange Wednesday, the FT states. Even if EDF had managed to put together a higher bid for the company, it would have been tough for it to prevail in buying Constellation Energy Group, the FT comments. EDF would also have to contend with U.S. regulations for ownership of nuclear plants and a standstill agreement it had signed with Constellation Energy Group that limits its ability to raise its stake in the company. Nevertheless, EDF said the United States was still one of its four target countries for international nuclear development, the FT notes. The FT adds that EDF is already acquiring British Energy Group Plc, owner of the UK reactor's network, for GBP12.5 billion. About Constellation Energy Group Baltimore, Maryland-based Constellation Energy Group Inc. -- http://www.constellation.com/-- is an energy company that conducts its business through various subsidiaries, including a merchant energy business and Baltimore Gas and Electric Company (BGE). BGE is a regulated electric transmission and distribution utility company and a regulated gas distribution utility company with a service territory that covers the City of Baltimore and all or part of 10 counties in central Maryland. The company's operating segments are Merchant Energy, Regulated Electric and Regulated Gas. Its remaining non-regulated businesses design, construct and operate renewable energy, heating, cooling and cogeneration facilities. As reported by the Troubled Company Reporter on Sept. 25, 2008, MidAmerican Energy Holdings Company and Constellation Energy reached a tentative agreement in which MidAmerican purchased all of the outstanding shares of Constellation Energy Group for US$4.7 billion, or US$26.50 per share. On Sept. 19, 2008, Constellation Energy Group said it entered into an agreement and plan of merger, with MidAmerican Energy Holdings Company, and MEHC Merger Sub Inc., a Maryland corporation and a wholly owned subsidiary of MidAmerican. Under the deal, MidAmerican agreed to make a US$1 billion investment into Constellation, in exchange for shares of 8% convertible preferred stock of Constellation Energy Group. The stock purchase agreement provides for the private placement of 10,000 shares of series A convertible preferred stock of Constellation Energy Group for an aggregate purchase price of US$1 billion or roughly about 20% stake. About Electricite de France Headquartered in Paris, France, Electricite de France SA (PA: EDF) is a France-based integrated energy operator active in the generation, distribution and transmission of electrical energy. Although based in France, the company is active globally; it provides energies and services to 37.8 million customers throughout the world. The EDF Group is made up of Electricite de France SA, the parent company, and a network of over 75 affiliates and investments established in Europe and around the world. Over 70% of the Group's energy is generated using nuclear technology; around 20% is of thermal origin; hydroelectricity and other renewable energies make up the remaining 10%. The Group network carries out energy-related activities focused on the core businesses of generation, trading, transmission, distribution, supply and services. PARIS PRIME: S&P Junks Rating on Class D Notes to CCC- ------------------------------------------------------ Standard & Poor's Ratings Services has lowered to 'CCC-' from 'BBB' and kept on CreditWatch with negative implications its credit rating on the class D notes issued by Paris Prime Commercial Real Estate FCC. All classes of notes in the transaction remain on CreditWatch negative. The notes were initially placed on CreditWatch negative on Sept. 17, following the appointment of an administrator for Lehman Brothers International (Europe) and the filing for Chapter 11 bankruptcy protection of Lehman Brothers Holdings Inc. The rating on the class E notes was subsequently lowered to 'CCC-' on Oct. 8. S&P has taken the rating action because of its increased concerns about the recoverability of the interest shortfall that is likely to occur for the class D notes on the next note interest payment date (IPD) in October 2008. Lehman Brothers International (Europe) acts as swap provider at the issuer level. The management company (EuroTitrisation S.A.) terminated the issuer-level swap transactions on Sept. 22, by sending a notice to Lehman Brothers International (Europe). S&P understands that the management company is considering the implications of this swap termination. In view of the insolvency proceedings, S&P assumed that the issuer will not receive any amounts from Lehman on the next IPD. Consequently, S&P understands that interest is not likely to be paid in full to the class D noteholders on the upcoming IPD. S&P notes, however, that the issuer is likely to be able to meet its interest obligations on the class D notes on the following IPD (January 2009) and the subsequent IPDs. It is uncertain whether the October 2008 interest shortfall will be recovered by the legal final maturity date of the notes. S&P is currently investigating the implications for the class A to C notes and consequently may take further rating actions as hedging arrangements are implemented. S&P will continue to liaise closely with the parties involved to resolve the CreditWatch placements in due course. Paris Prime Commercial Real Estate FCC -- EUR452.15 Million Commercial Mortgage-Backed Floating-Rate Notes Rating Lowered And Kept On CreditWatch Negative: Class To From ----- -- ---- D CCC-/Watch Neg BBB/Watch Neg Ratings Kept On CreditWatch Negative: A AAA/Watch Neg X1 AAA/Watch Neg X2 AAA/Watch Neg B AA/Watch Neg C A/Watch Neg E CCC-/Watch Neg THOMSON SA: Third Quarter Revenue Down by 15% --------------------------------------------- Thomson SA recorded a 15% decline in third quarter revenues. From EUR1.38 billion in the same period in 2007, revenues are down to EUR1.17 billion for the three months ending Sept. 30, 2008, Jethro Mullen of Dow Jones Newswires reports. Mr. Frederic Rose, chief executive, said, "Our businesses must pursue revenues that are profitable - not revenues for their own sake - and our cost base will be tailored accordingly." On Aug. 6, 2008, TCR-Europe reported that Standard & Poor's Ratings Services lowered Thomson SA's long-term corporate credit and senior unsecured bank loan ratings to 'B+' from 'BB-'. At the same time, the 'B' short-term corporate credit rating was affirmed. The outlook remains negative. On Aug. 4, 2008, TCR-Europe reported that Moody's Investor's Service downgraded Thomson SA's Corporate Family Rating to B1 from Ba2 and downgraded the junior subordinated rating for perpetual junior subordinated bonds to Caa1 from B2 reflecting a LGD 6 loss given default assessment given the deeply subordinated status of this instrument. The outlook has been changed to stable. Headquartered in Boulogne-Billancourt, France, Thomson SA (NYSE: TMS, Euronext: TMS) -- http://www.thomson.net/-- provides solutions for the creation, management, delivery and access of video, for the Communication, Media and Entertainment industries. The has main offices in Indianapolis, Burbank, Princeton, London, Rennes, Bangalore and Beijing. * FRANCE: Gov't. Package Helps Restore Confidence, Moody's Says --------------------------------------------------------------- Moody's Investors Service commented on the statement made by the French Government regarding a package to restore confidence in the French financial and banking system. Moody's views the announcement as a very positive development, in helping to restore confidence in the banking system. Moody's believes that these actions will support greater stability for ratings of French banks although the rating agency does not expect wholesale rating changes in the sector, where ratings of large banks are already incorporating external support. The announcement includes the following: (i) the creation of a new public body ("Caisse de Refinancement des Etablissements de Credits"), benefiting from an explicit State guarantee, to provide loans to the French banks for up to EUR320 billion (ii) the provision of EUR40 billion of funds to the "Societe de prises de participation de l'Etat" to subscribe to Tier 1 subordinated capital, preference shares or ordinary shares of banks (including the participation recently taken in Dexia's capital) (iii) the confirmation of the guarantee on Dexia's interbank and institutional funding, as agreed with the Governments of Belgium and Luxembourg on September 30. All financial institutions headquartered in France and respecting regulatory ratios are eligible to apply for loans of a maturity of up to five years, until December 31, 2009. The loans granted by the "Caisse de Refinancement des Etablissements de Credits" will be collateralized by the following assets: -- first lien mortgage loans -- non-mortgage backed property loans, for properties based in France -- loans to public sector bodies -- high quality corporate loans -- consumer loans to French residents The pricing of the loans will incorporate the refinancing costs of the "Caisse de Refinancement des Etablissements de Credits" and an additional spread reflecting the State guarantee. Also to restore confidence in the system, the Government, through its "Societes de prises de participation de l'Etat", will be able to subscribe to subordinated capital or Preference Shares of banks. The Government will decide which banks are eligible for this measure. In addition, the "Societes de prises de participation de l'Etat" will also be able to subscribe to ordinary shares of banks facing difficulties and which failure could create systemic problems. Those capital interventions are not limited in time but will be temporary. The French plan is in accordance with the coordinated Eurozone plan announced on October 12. It has been approved by the French Cabinet on October 13 and will be submitted to the French Parliament under an emergency procedure. While to varying degrees, systemic support already had been incorporated into our ratings for the larger banks the provision of liquidity and capital by government actions will result in a reduction of the pace of negative rating actions. However, rating actions (positive or negative) will continue to be influenced by underlying credit and franchise fundamentals utilizing Moody's established bank rating methodology and will anticipate franchise strength following the scaling back of these support programs when the financial crisis abates. The exception will be for obligations of banks for which there is clear substitution of risk by the government for that of the bank, as in the case of explicit guarantees. Here, Moody's will de-link the risk assessment from the bank and apply the appropriate government rating to the specific obligations. Moody's Perspective On October 8, Moody's released a Special Comment on its approach towards incorporating government support for banking systems into its ratings titled "Assessing the Rating Implications for Banks of the Current Market Turmoil and Governmental Interventions to Support Their Banking Systems" and on October Moody's 14 released another Special Comment on the coordinated European response to the crisis titled "Actions by European Sovereigns provide substantial de-risking for large European banks". Moody's expects the announced plan to provide French banks with significant capital cushions if needed in a difficult environment. Moody's also expects that the overall demonstrated support by the French and European authorities, through capital, loans or guarantees, will ease the liquidity pressures exerted on banks through the loss of market confidence. ============= G E R M A N Y ============= ALPHA 1 HAUSVERTRIEB: Claims Registration Period Ends Oct. 24 ------------------------------------------------------------- Creditors of Alpha 1 Hausvertrieb GmbH have until Oct. 24, 2008, to register their claims with court-appointed insolvency manager Ruediger Bauch. Creditors and other interested parties are encouraged to attend the meeting at 10:00 a.m. on Nov. 26, 2008, at which time the insolvency manager will present his first report on the insolvency proceedings. The meeting of creditors will be held at: The District Court of Braunschweig E 01 Martinikirche 8 38100 Braunschweig Germany The Court will also verify the claims set out in the insolvency manager's report during this meeting, while creditors may constitute a creditors' committee or opt to appoint a new insolvency manager. The insolvency manager can be reached at: Ruediger Bauch Damm 18 38100 Braunschweig Germany Tel: 0531 38848-10 Fax: 0531 38848-11 The District Court of Braunschweig opened bankruptcy proceedings against Alpha 1 Hausvertrieb GmbH on Aug. 21, 2008. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: Alpha 1 Hausvertrieb GmbH Brabandtstr. 5 38100 Braunschweig Germany Attn: Hans Moser, Manager Am Sagisdorfer Park 13 06116 Halle Germany AXXIS MARKETING: Claims Registration Period Ends October 24 ----------------------------------------------------------- Creditors of Axxis Marketing GmbH have until Oct. 24, 2008, to register their claims with court-appointed insolvency manager Stephan Muenzel. Creditors and other interested parties are encouraged to attend the meeting at 9:10 a.m. on Nov. 24, 2008, at which time the insolvency manager 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 Fourth Floor Annex Civil Justice Bldg. Sievkingplatz 1 20355 Hamburg Germany The Court will also verify the claims set out in the insolvency manager's report during this meeting, while creditors may constitute a creditors' committee or opt to appoint a new insolvency manager. The insolvency manager can be reached at: Stephan Muenzel Bachstrasse 85 a 22083 Hamburg Germany The District Court of Hamburg opened bankruptcy proceedings against Axxis Marketing GmbH on Sept. 16, 2008. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: Axxis Marketing GmbH Attn Ahmet Guener, Manager Suederstrasse 30 20097 Hamburg Germany CAMA FERTIGUNGSTECHNOLOGIE: Claims Registration Ends Oct. 20 ------------------------------------------------------------ Creditors of CAMA Fertigungstechnologie und Maschinenbau GmbH have until Oct. 20, 2008, to register their claims with court-appointed insolvency manager Michael Pfeffer. Creditors and other interested parties are encouraged to attend the meeting at 10:00 a.m. on Nov. 19, 2008, at which time the insolvency manager will present his first report on the insolvency proceedings. The meeting of creditors will be held at: The District Court of Aschaffenburg Meeting Hall 5.103 Schlossplatz 5 63739 Aschaffenburg Germany The Court will also verify the claims set out in the insolvency manager's report during this meeting, while creditors may constitute a creditors' committee or opt to appoint a new insolvency manager. The insolvency manager can be reached at: Michael Pfeffer Kapuzinerplatz 1 63739 Aschaffenburg Germany Tel: 06021/386710 Fax: 06021/3867130 The District Court of Aschaffenburg opened bankruptcy proceedings against CAMA Fertigungstechnologie und Maschinenbau GmbH on Aug. 29, 2008. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: CAMA Fertigungstechnologie und Maschinenbau GmbH Daimlerring 5 63839 Kleinwallstadt Germany CRIVITZ CONSULT: Claims Registration Period Ends October 24 ----------------------------------------------------------- Creditors of Crivitz Consult GmbH have until Oct. 24, 2008, to register their claims with court-appointed insolvency manager Andreas Franz. Creditors and other interested parties are encouraged to attend the meeting at 9:45 a.m. on Nov. 24, 2008, at which time the insolvency manager will present his first report on the insolvency proceedings. The meeting of creditors will be held at: The District Court of Schwerin Hall 7 Demmlerplatz 14 Germany The Court will also verify the claims set out in the insolvency manager's report during this meeting, while creditors may constitute a creditors' committee or opt to appoint a new insolvency manager. The insolvency manager can be reached at: Andreas Franz Steinstrasse 26 19053 Schwerin Germany Tel: 0385/714446 The District Court of Schwerin opened bankruptcy proceedings against Crivitz Consult GmbH on Sept. 9, 2008. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: Crivitz Consult GmbH Attn: Sabine Blatt, Manager Parchimer Strasse 64 19089 Crivitz Germany EVENT-ART: Claims Registration Period Ends October 24 ----------------------------------------------------- Creditors of Event-Art Gastronomiegesellschaft mbH have until Oct. 24, 2008, to register their claims with court-appointed insolvency manager Gerhard Brinkmann. Creditors and other interested parties are encouraged to attend the meeting at 10:30 a.m. on Dec. 3, 2008, at which time the insolvency manager will present his first report on the insolvency proceedings. The meeting of creditors will be held at: The District Court of Rostock Hall 330 Zochstrasse 13 18057 Rostock Germany The Court will also verify the claims set out in the insolvency manager's report during this meeting, while creditors may constitute a creditors' committee or opt to appoint a new insolvency manager. The insolvency manager can be reached at: Gerhard Brinkmann Freiligrathstrasse 1 18055 Rostock Germany The District Court of Rostock opened bankruptcy proceedings against Event-Art Gastronomiegesellschaft mbH on Sept. 12, 2008. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: Event-Art Gastronomiegesellschaft mbH Attn: Remo Herbst, Manager Kistenmacherstrasse 17/18 18055 Rostock Germany FIP PUBLISHING: Creditors' Meeting Slated for October 24 -------------------------------------------------------- The court-appointed insolvency manager for FIP Publishing GmbH, Dr. Bjoern Gehde will present his first report on the Company's insolvency proceedings at a creditors' meeting at 9:20 a.m. on Oct. 24, 2008. The meeting of creditors and other interested parties will be held at: The District Court of Charlottenburg Hall 218 Second Floor Amtsgerichtsplatz 1 14057 Berlin Germany The Court will also verify the claims set out in the insolvency manager's report at 9:20 a.m. on Jan. 30, 2009, at the same venue. Creditors have until Dec. 4, 2008, to register their claims with the court-appointed insolvency manager. The insolvency manager can be reached at: Dr. Bjoern Gehde Goethestr. 85 10623 Berlin Germany The District Court of Charlottenburg opened bankruptcy proceedings against FIP Publishing GmbH on Sept. 4, 2008. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: FIP Publishing GmbH Bleibtreustrasse 38 10623 Berlin Germany GP VERMOEGENSVERWALTUNGS: Claims Filing Period Ends Oct. 20 ----------------------------------------------------------- Creditors of GP Vermoegensverwaltungsgesellschaft mbH have until Oct. 20, 2008, to register their claims with court-appointed insolvency manager Dr. Christian Frystatzki. Creditors and other interested parties are encouraged to attend the meeting at 9:00 a.m. on Nov. 20, 2008, at which time the insolvency manager will present his first report on the insolvency proceedings. The meeting of creditors will be held at: The District Court of Cologne Meeting Hall 1240 12th Floor Luxemburger Str. 101 50939 Cologne Germany The Court will also verify the claims set out in the insolvency manager's report during this meeting, while creditors may constitute a creditors' committee or opt to appoint a new insolvency manager. The insolvency manager can be reached at: Dr. Christian Frystatzki Sankt Augustiner Str. 94 a 53225 Bonn Germany The District Court of Cologne opened bankruptcy proceedings against GP Vermoegensverwaltungsgesellschaft mbH on Aug. 27, 2008. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: GP Vermoegensverwaltungsgesellschaft mbH Adenauerallee 50-52 53113 Bonn Germany Attn: Erwin Heuser-Hahn, Manager Markgrafenstr. 33 53639 Koenigswinter Germany IFE PRIVAT-INSTITUT: Creditors Meeting Slated for October 24 ------------------------------------------------------------ The court-appointed insolvency manager for IfE Privat-Institut fuer Entsorgungswirtschaft und Recycling GmbH, Christian Koehler- Ma, will present his first report on the Company's insolvency proceedings at a creditors' meeting at 11:15 a.m. on Oct. 24, 2008. The meeting of creditors and other interested parties will be held at: The District Court of Charlottenburg Second Stock Hall 218 Amtsgerichtsplatz 1 14057 Berlin Germany The Court will also verify the claims set out in the insolvency manager's report at 10:30 a.m. on Jan. 23, 2009, at the same venue. Creditors have until Nov. 24, 2008, to register their claims with the court-appointed insolvency manager. The insolvency manager can be reached at: Christian Koehler-Ma Kurfuerstendamm 26 a 10719 Berlin Germany The District Court of Charlottenburg opened bankruptcy proceedings against IfE Privat-Institut fuer Entsorgungswirtschaft und Recycling GmbH on July 31, 2008. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: IfE Privat-Institut fuer Entsorgungswirtschaft und Recycling GmbH Koenigsallee 10 14193 Berlin Germany KIFFE AMC: Claims Registration Period Ends October 20 ----------------------------------------------------- Creditors of KIFFE AMC GmbH have until Oct. 20, 2008, to register their claims with court-appointed insolvency manager Michael Moenig. Creditors and other interested parties are encouraged to attend the meeting at noon on Nov. 10, 2008, at which time the insolvency manager will present his first report on the insolvency proceedings. The meeting of creditors will be held at: The District Court Muenster Meeting Hall 101 B First Floor Gerichtsstr. 2-6 48149 Muenster Germany The Court will also verify the claims set out in the insolvency manager's report during this meeting, while creditors may constitute a creditors' committee or opt to appoint a new insolvency manager. The insolvency manager can be reached at: Michael Moenig Von-Steuben-Strasse 18 48143 Muenster Germany Tel: 0251/38484-333 Fax: +4925138484300 The District Court of Muenster opened bankruptcy proceedings against KIFFE AMC GmbH on Sept. 1, 2008. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: KIFFE AMC GmbH Albersloher Weg 54 48155 Muenster Germany Attn: Dr. Hans-Burchard Turner and Elke Turner-Kiffe, Managers Admiral-Scheer-Str. 14 48145 Muenster Germany TAS GMBH: Claims Registration Period Ends October 23 ---------------------------------------------------- Creditors of Tas GmbH have until Oct. 23, 2008, to register their claims with court-appointed insolvency manager Dr. Juergen M. Thiel. Creditors and other interested parties are encouraged to attend the meeting at 9:00 a.m. on Nov. 13, 2008, at which time the insolvency manager will present his first report on the insolvency proceedings. The meeting of creditors will be held at: The District Court of Bielefeld Hall 4065 Fourth Floor Gerichtstrasse 66 33602 Bielefeld Germany The Court will also verify the claims set out in the insolvency manager's report during this meeting, while creditors may constitute a creditors' committee or opt to appoint a new insolvency manager. The insolvency manager can be reached at: Dr. Juergen M. Thiel Markt 8 32423 Minden Germany The District Court of Bielefeld opened bankruptcy proceedings against Tas GmbH on Sept. 3, 2008. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: Tas GmbH Gellertstr. 11 32584 Loehne Germany TS CO.MIT: S&P Downgrades Ratings on Class E and F Notes to B/CCC ----------------------------------------------------------------- Standard & Poor's Ratings Services has lowered its ratings on the class E and F notes issued by TS Co.mit One GmbH, a German SME collateralized loan obligation transaction. The rating on the class F notes has been removed from CreditWatch with negative implications and the class E notes remain on CreditWatch negative. At the same time, the ratings on the class A to D notes were affirmed. The class E and F notes were placed on CreditWatch negative on July 10, 2008. The rating actions follow S&P's full credit and cash flow analysis of the underlying portfolio of certificates of indebtedness (Schuldscheine) issued by German small and midsize enterprises (SMEs). This analysis relies on an updated mapping of Commerzbank AG's internal ratings for SME assets. The mapping was used to assess the most recent internal rating assigned to each obligor in the portfolio and derive an updated rating estimate from it. Note that the mapping update included the identification and correction of an earlier mapping error S&P made. Although the correction led to a more conservative mapping, S&P confirms that the error has had no impact on the initial ratings in this transaction. At closing, the portfolio contained 396 certificates of indebtedness relating to 372 obligors. Following amortization, defaults, and the removal of certain certificates due to ineligibility, the total number of certificates reduced to 288 as of Sept. 20, 2008. Of these 288 certificates, 14 are Schuldscheine that have already triggered a principal deficiency event in the transaction. The underlying portfolio in TS Co.mit One has demonstrated weak performance since 2006. Cumulative defaults total more than 5% (2.9% after the removal of ineligible certificates) of the initial pool balance and the overall credit quality of the portfolio has deteriorated. According to Commerzbank's internal rating model, at closing the weighted-average portfolio rating was 3.0; it is currently 3.6. Cumulative defaults grossed up to EUR25.3 million (EUR14.6 million after the removal of ineligible certificates) and were caused by the default of 21 certificates of indebtedness (15 after the removal of ineligible certificates). The entire exposure was credited to the transaction's principal deficiency ledger (PDL) and has gradually been cleared through excess spread and recoveries. On the most recent payment date, the PDL was zero. At the same time, however, the reserve was fully depleted and also currently stands at zero. In its projections, S&P does not expect the reserve to build to its required level over the remaining life of the transaction. S&P's credit and cash flow analysis has shown that the class F notes are facing the apparent risk of not being fully repaid. Furthermore, S&P remains cautious with regard to the class E notes on the expectations of further portfolio deterioration. The senior notes in the transaction are well protected following the substantial de-leverage of the structure and the decrease of the weighted-average life (WAL) of the portfolio. The WAL of the pool was 1.45 years on the last payment date. TS Co.mit One GmbH -- EUR503 Million Floating-Rate Asset-Backed Notes Ratings Lowered And Remaining On CreditWatch Negative: Class To From ----- -- ---- E B/Watch Neg BB/Watch Neg Rating Lowered And Removed From CreditWatch Negative: Class To From ----- -- ---- F CCC B/Watch Neg Ratings Affirmed: A AAA AAA B AA AA C A A D BBB BBB VULCAN LIMITED: Fitch Affirms EUR3MM Class G Notes Rating at 'BB' ----------------------------------------------------------------- Fitch Ratings has revised the Outlook on Vulcan (European Loan Conduit No. 28) Limited's class E, class F and class G commercial mortgage-backed notes to Negative from Stable and affirmed the outstanding ratings. The ratings are: -- EUR784.8 million XS0314738963 Class A due May 2017: affirmed at 'AAA'; Outlook Stable -- EUR0.1 million XS0314739342 Class X due May 2017: affirmed at 'AAA'; Outlook Stable -- EUR20.9 million XS0314739938 Class B due May 2017: affirmed at 'AAA'; Outlook Stable -- EUR73.6 million XS0314740431 Class C due May 2017: affirmed at 'AA'; Outlook Stable -- EUR75.3 million XS0314740944 Class D due May 2017: affirmed at 'A'; Outlook Stable -- EUR38 million XS0314741595 Class E due May 2017: affirmed at 'BBB'; Outlook revised to Negative from Stable -- EUR3 million XS0314742056 Class F due May 2017: affirmed at 'BBB-'; Outlook revised to Negative from Stable -- EUR3 million XS0314742213 Class G due May 2017: affirmed at 'BB'; Outlook revised to Negative from Stable The principal reason for the revision of Outlook is the underperformance of the largest loan in the pool, the Tishman German Office loan (35.2% of the current balance). This is due to an increase in vacancy level to 29% by floor area (from 20% at closing), combined with an increase in non-recoverables by nearly 50%. This had led to a fall in the securitized interest coverage ratio to 1.03x (1.5x at closing) and of 0.71x on the whole loan ICR (1x at closing), implying a shortfall in interest payment on the whole loan. This shortfall had initially been funded through a EUR3.5m interest reserve the sponsor had put in place, which at this stage has been used up. The sponsor has committed to an additional reserve guarantee of EUR4.5 million. This would at the current conditions be sufficient for another year of interest coverage. Although Tishman Speyer has so far re-let around 16,000 sqm of vacant space this year, Fitch is concerned that if no additional re-letting is achieved, the increase in non-recoverables is likely to be of permanent nature. Fitch is also concerned that once the guarantee has been used up, Tishman Speyer could decide to not further support this loan. In addition, even though ring-fenced a potential default of Tishman Speyer could have implications on the underlying fund holding this loan. Two additional loans are currently on the servicer's watchlist due to an ICR dividend trap breach. PFF France's (11.6% of the portfolio) ICR has dropped to 1.23x (1.7x at closing); however, this is due to a rent free period granted to the largest tenant, Ministre de la Justice (30% by total passing rent), in exchange for extending its lease, bringing the 12 months projected ICR to 2.03x. On Inovalis Eboue the whole loan ICR is at 1.06 (1.34x at senior level) which is due to a fall in net revenue as well as an increase in the expenses. On the positive side, vacancy has slightly decreased, a new lease has been signed and two other tenants are going to renew their leases although they are still in dispute over the determination of rent level. Overall, the transaction coverage levels are broadly stable, with ICR at 1.71x (1.7x at closing) and debt service coverage ratio at 1.62x (1.7x). Fitch will continue to monitor the performance of the transaction. WOLFGANG BAUER: Creditors Meeting Slated for October 24 ------------------------------------------------------- The court-appointed insolvency manager for Wolfgang Bauer GmbH, Dr. Petra Hilgers, will present his first report on the Company's insolvency proceedings at a creditors' meeting at 10:50 a.m. on Oct. 24, 2008. The meeting of creditors and other interested parties will be held at: The District Court of Charlottenburg Second Stock Hall 218 Amtsgerichtsplatz 1 14057 Berlin Germany The Court will also verify the claims set out in the insolvency manager's report at 10:15 a.m. on Jan. 28, 2009, at the same venue. Creditors have until Nov. 24, 2008, to register their claims with the court-appointed insolvency manager. The insolvency manager can be reached at: Dr. Petra Hilgers Goethestr. 85 10623 Berlin Germany The District Court of Charlottenburg opened bankruptcy proceedings against Wolfgang Bauer GmbH on Aug. 25, 2008. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: Wolfgang Bauer GmbH Nunsdorfer Ring 25 - 27 12277 Berlin Germany ============= H U N G A R Y ============= * HUNGARY: Forint and Stock Drop Wednesday on Foreign Lending Cuts ------------------------------------------------------------------ Hungary plunged into financial uncertainty Wednesday, October 15, with its currency and stock market falling sharply and bankers reporting credit shortages, as concern spread across eastern Europe about the impact of the global financial crisis, The Financial Times reports. In Budapest, the forint fell 5.3% to HUF266.09 to the euro and the BUX index of leading stocks closed down 11.9%, dragged down by a 15% fall of shares in OTP, the biggest bank, the FT relates. Currencies and stock markets also fell in Poland, the Czech Republic, Romania and Ukraine. According to the FT, the Hungarian turmoil followed moves by leading Budapest banks to stop or curtail foreign currency lending, the dominant form of credit in Hungary in recent years. As cited by the FT, Gyorgy Barcza, chief treasury economist at K&H Bank, part of Belgium's KBC group, said: "If there is no foreign currency lending in Hungary, it will mean the capital inflow will be smaller. Currently that capital inflow amounts to about EUR3 billion to EUR4 billion a year, which is close to the current account gap." Hungarian officials, FT writes, indicated that they were working on a package to support the markets with the help of the International Monetary Fund. But the central bank declined to give details. ============= I C E L A N D ============= * S&P Lists Synthetic CDO Tranches Exposed to Icelandic Banks ------------------------------------------------------------- Standard & Poor's Ratings Services said that a substantial number of global synthetic collateralized debt obligation (CDO) transactions have exposure to one or more of three Icelandic banks -- Glitnir Bank, Landsbanki Islands, and Kaupthing Bank -- that Iceland's banking supervisor has placed into receivership. S&P lowered the long-term counterparty credit rating on Glitnir Bank to 'D' on Oct. 9, 2008. S&P believes the impact of these exposures is likely to be significant for transactions that reference these and other obligors, such as Lehman Bros. and Washington Mutual, that have recently experienced credit events. Synthetic CDO Exposure Glitnir Landsbanki Kaupthing Two of All (No.) only only only three three ----- ---- ---- ---- ----- ----- U.S. Transactions 7 10 79 128 87 Tranches 12 14 108 174 162 Europe Transactions 14 31 96 114 214 Tranches 16 32 125 126 263 Asia-Pacific (excl. Japan) Transactions 3 4 7 32 49 Tranches 3 4 7 32 59 Japan Transactions 0 3 23 23 26 Tranches 0 4 26 26 39 ========= I T A L Y ========= ALITALIA SPA: Italy Notifies EU on Administration Procedure ----------------------------------------------------------- The Italian Government has notified the European Commission of an extraordinary administration procedure for Alitalia SpA, including a sale of the company's assets, an October 14 article posted on World Aeronautical Press Agency's site said. According to the article, the notification was made to obtain legal certainty, in conformity with the principle of loyal cooperation that has constantly guided relations between Italy and the European Commission in the context of the Alitalia case. The European Commission, the article said, will assess the content of the notification in accordance with the normal procedures in order to verify its compatibility with community rules in matter of state aid. A TCR-Europe report on Oct. 6, 2008, said low fare airline Ryanair submitted a formal complaint to the EU Commission regarding the latest bailout of Alitalia. Ryanair said it has previously submitted several complaints against Alitalia and other flag carrier airlines, including Olympic, Air France and Lufthansa, against which the EU Commission has taken no action. Ryanair highlighted that this ongoing unlawful protection of flag carriers by their member state governments, which amounts to billions of euro, increasingly makes a mockery of the EU Commission's enforcement of the state aid rules. The EU Commission meanwhile said the complaint from Ryanair will be addressed in the same meticulous way as any other it receives, The Associated Press reported. Tie-Up Talks Agence France-Presse says Italian news agencies reported Wednesday that the managing director of British Airways reiterated his company's interest in a partnership with Alitalia. The reports cited by AFP said Willie Walsh of British Airways met with Roco Sabelli, the administrator of Compagnia Aerea Italiana s.r.l., a consortium of Italian investors created to save the Italian carrier. According to AFP, CAI representatives would meet next week with counterparts from Air France-KLM and the following week with those from German carrier Lufthansa, afterwhich, they will hold further discussions with British Airways. Delayed Newco Launching As reported in the Troubled Company Reporter-Europe on Oct. 14, 2008, CAI extended the deadline on its conditional offer to relaunch the national carrier until Oct. 31, 2008. CAI had originally given a deadline of October 15 but extended it to give time for CAI to complete due diligence work. A shareholder meeting has been set for October 28 to among others change the company's charter. As reported in the Troubled Company Reporter-Europe on Sept. 30, 2008, CAI is considering launching the new Alitalia by November 1. CAI revived its bid for Alitalia after it reached agreement with all the nine Alitalia unions. CAI's rescue plan calls for renaming of Alitalia and writing off between EUR1.2 billion and EUR2 billion worth of its debt. On Sept. 22, 2008, the TCR-Europe reported that CAI withdrew its bid to buy Alitalia's healthier assets after failing to win the support of labor unions. After CAI's withdrawal, Alitalia proceeded with its fourth public request for offers to buy any or all parts of the company's assets until Sept. 30, 2008. As reported in the TCR-Europe on Oct. 2, 2008, Alitalia Extraordinary Commissioner Augusto Fantozzi said he received several expressions of interest for Alitalia within the terms of the deadline on Sept. 30, 2008. However, only CAI's proposal is directly concerned with the overall activities of air transport. Other expressions of interest meanwhile concerned specific branches or activities of the various companies making up the Alitalia Group. About Alitalia Based in Rome, Alitalia S.p.A. -- http://www.alitalia.it/-- provides air travel services for passengers and air transport of cargo on national, international and inter-continental routes, including United States, Canada, Japan and Argentina. The Italian government owns 49.9% of Alitalia. Despite a EUR1.4 billion state-backed restructuring in 1997, Alitalia posted net losses of EUR256 million and EUR907 million in 2000 and 2001 respectively. Alitalia posted EUR93 million in net profits in 2002 after a EUR1.4 billion capital injection. The carrier booked annual net losses of EUR520 million in 2003, EUR813 million in 2004, EUR168 million in 2005, EUR625.6 million in 2006, and EUR494.64 million in 2007. Alitalia S.p.A. declared insolvency on Aug. 29, 2008, and filed for commencement of extraordinary administration procedure at the Tribunal of Rome. Italian Prime Minister Silvio Berlusconi has appointed Augusto Fantozzi as extraordinary commissioner. BANCA ITALEASE: Fitch Keeps 'BB' Securities Rating Under RWN ------------------------------------------------------------ Fitch Ratings is keeping Banca Italease's Long-term Issuer Default rating of 'BBB-', Short-term IDR of 'F3' and Support rating of '2' on Rating Watch Negative, where they were placed on 5 March 2008. The Individual rating is affirmed at 'D/E'. The Long-term 'BB' rating of the bank's EUR150 million trust preferred securities also remains on RWN. On October 11, 2008, Italease announced that it has agreed to establish a 40:60 joint venture with German leasing company, VR- LEASING AG (VRL; rated 'A'/Stable; see separate comment published today) to take over Italease's leasing assets of about EUR8 billion and receivables from factoring transactions of about EUR2 billion (based on end-March 2008 volumes), as well as debt for about EUR9.7 billion. Italease's main shareholders, Banco Popolare ('A'/Stable), Banca Popolare dell'Emilia Romagna ('A-'/Stable), Banca Popolare di Sondrio ('A'/Stable) and insurer, Reale Mutua di Assicurazione (IFS 'A-'/Stable), announced that they would renew the shareholders' pact for a further 28 months from its original expiry in February 2009. At the same time, Banca Popolare di Milano ('A'/Stable) announced that it would withdraw from the pact in February 2009. Fitch expects to resolve the RWN once details on the future strategy of the bank have been made available. In resolving the watch, the agency will evaluate the strategic importance of the businesses remaining in Italease for the shareholders and their potential profitability, Italease's capitalization, as well as the shareholders' ongoing commitment to the bank. Italease will announce a new strategic plan for the businesses that remain in the bank following the spin-off of the joint venture by the time it announces its financial results for FY08 in March 2009, but some indications of the future strategy are expected by December 2008. The business that remains in Italease will mainly consist of leasing contracts distributed through the bank's network of agents and intermediaries and of medium-term loans as the assets generated directly by Italease and through the shareholder banks' branch networks will be transferred to the joint venture. The announcement of the renewal of the shareholders' pact, with a longer three-year duration, in Fitch's opinion confirms the shareholders' commitment to Italease as the members have stated that they would not reduce funding lines for Italease from their current level. However, the exit of Banca Popolare di Milano from the pact and the reduction of Reale Mutua di Assicurazione's stake transferred to the pact will result in the pact controlling 32.78% of Italease's shares, compared to the current 36.96%. The transaction is subject to regulatory approval and several other conditions, including the approval of capital measures at VRL, the agreement of a funding plan and of a shareholders' agreement between Italease and VRL, by mid-December 2008, and the transaction is expected to be completed by H109. BANCAPULIA SPA: Moody's Retains Stable Outlook on D+ BFSR --------------------------------------------------------- Moody's Investors Service changed to negative from stable the outlook for the Baa2 and Prime-2 long- and short-term deposit ratings of BancApulia. The outlook for the bank's D+ Bank Financial Strength Rating (BFSR) remains stable. The bank's D+ BFSR currently maps to a Baseline Credit Assessment (BCA) of Baa3. Moody's said that the negative outlook on the deposit ratings reflects the possibility that the challenges faced by the bank, in the current difficult economic and market conditions could lead to the bank becoming more weakly positioned in the D+ BFSR category, resulting in a lowering of the bank's BCA to Ba1. Given the moderate expectation of systemic support for the bank, this would lead to a one-notch downgrade of the bank's deposit ratings. According to Moody's this change in the outlook to negative takes into account the bank's modest and weakening financial fundamentals, including its profitability and efficiency indicators in particular, and high reliance on market funding, which, in the current difficult economic and market conditions may come under increasing pressure in the coming months. BancApulia has made significant use of securitization as a means of supporting strong loan growth in recent years. This market is effectively closed at present with ongoing securitization being used to provide assets eligible for repo at the European Central Bank. Other forms of market funding are also clearly more expensive and Moody's said that it believes that the bank's business model, relying on wholesale funding may prove difficult to sustain going forward. This is also mirrored in the significant slowdown of the new lending volumes projected for this year. BancApulia's capital ratios have been declining in recent years as a result of rapid volume growth in the bank's loan portfolio. The bank plans to increase its capital by EUR20 million this year, and by EUR10 million in each of the subsequent two years. At June 30, 2008, the Tier 1 ratio of the bank was at about 7% under Basel II (estimated at 5.7% under Basel I) and it is expected to reach the 7.8% under Basel II at year-end following the recapitalization. Moody's said that it views achievement of the bank's plans to strengthen its capital as important steps in maintaining a sufficient capital cushion relative to the challenges and risks faced by the bank. Headquartered in San Severo, Italy, BancApulia reported total assets of EUR 4.49 billion at June 30, 2008. * S&P Hikes High Constant Payment Rate Assumption for Italian RMBS ------------------------------------------------------------------ Standard & Poor's Ratings Services has increased its high constant payment rate (CPR) assumption for Italian residential mortgage- backed securities (RMBS) transactions to 24% from 20%. The revision of this rating assumption follows the substantial increase in prepayment levels seen over the past year. According to S&P's latest Italian RMBS index report ("Italian RMBS Index Report Q2 2008�Issuance Volumes Pick Up, While Performance Weakens Slightly," published on Aug. 13, 2008), the average prepayment rate in the Italian RMBS market was 10.8% in the second quarter of 2008. At the beginning of 2007, the average prepayment rate was only slightly above 6%. In reviewing its high CPR assumptions, S&P has assessed the effect of the new stress test on the ratings of existing transactions. S&P's analysis showed that the updated stress does not materially affect its assessment of these transactions and as a result it does not result, per se, in any rating actions being taken. =================== K A Z A K H S T A N =================== ANT BUILDER: Creditors Must File Claims by November 25 ------------------------------------------------------ LLP Ant Builder Company has declared liquidation. Creditors have until Nov. 25, 2008, to submit written proofs of claims to: LLP Ant Builder Company Eset Batyr Str. 67a-32 Aktobe Aktube Kazakhstan DATA WIZARDS: Claims Deadline Slated for November 25 ---------------------------------------------------- LLP Data Wizards has declared liquidation. Creditors have until Nov. 25, 2008, to submit written proofs of claims to: LLP Data Wizards Kunaev Str. 106-10 Almaty Kazakhstan ENERGO SERVICE: Claims Filing Period Ends November 25 ----------------------------------------------------- LLP Energo Service & K has declared liquidation. Creditors have until Nov. 25, 2008, to submit written proofs of claims to: LLP Energo Service & K Moskovskaya Str. 3 Saran Karaganda Kazakhstan FOSFOHIM+ LLP: Creditors' Claims Due on November 21 --------------------------------------------------- The Specialized Inter-Regional Economic Court of Aktube has declared LLP Fosfohim+ insolvent. Creditors have until Nov. 21, 2008, to submit written proofs of claims to: The Specialized Inter-Regional Economic Court of Aktube Altynsarin Str. 31 Aktobe Aktube Kazakhstan KAGANAT-1 LLP: Claims Registration Ends November 25 --------------------------------------------------- The Specialized Inter-Regional Economic Court of Jambyl has declared LLP Kaganat-1 insolvent. Creditors have until Nov. 25, 2008, to submit written proofs of claims to: The Specialized Inter-Regional Economic Court of Jambyl Suleimenov Str. 17 Taraz Jambyl Kazakhstan KOSTANAI-PRESS LLP: Creditors Must File Claims by November 25 ------------------------------------------------------------- The Specialized Inter-Regional Economic Court of Kostanai has declared LLP Service-Joly insolvent. Creditors have until Nov. 25, 2008, to submit written proofs of claims to: The Specialized Inter-Regional Economic Court of Kostanai Maulenov Str. 21 Kostanai Kazakhstan KPP-AKTAU LLP: Claims Deadline Slated for November 25 ----------------------------------------------------- The Specialized Inter-Regional Economic Court of Mangistau has declared LLP KPP-Aktau insolvent. Creditors have until Nov. 25, 2008, to submit written proofs of claims to: The Specialized Inter-Regional Economic Court of Mangistau Micro District 28, 25-12 Aktau Mangistau Kazakhstan Tel: 8 (7292) 40-03-12 8 701 416 22-23 SERVICE-JOLY LLP: Claims Filing Period Ends November 25 ------------------------------------------------------- The Specialized Inter-Regional Economic Court of Kostanai has declared LLP Service-Joly insolvent. Creditors have until Nov. 25, 2008, to submit written proofs of claims to: The Specialized Inter-Regional Economic Court of Kostanai Maulenov Str. 21 Kostanai Kazakhstan SIMAKS LIMITED: Creditors' Claims Due on November 21 ---------------------------------------------------- The Specialized Inter-Regional Economic Court of Aktube has declared LLP Simaks Limited insolvent. Creditors have until Nov. 21, 2008, to submit written proofs of claims to: The Specialized Inter-Regional Economic Court of Aktube Altynsarin Str. 31 Aktobe Aktube Kazakhstan SPETS COMPLECT: Claims Registration Ends November 25 ---------------------------------------------------- The Specialized Inter-Regional Economic Court of Karaganda has declared LLP Spets Complect Postavka insolvent. Creditors have until Nov. 25, 2008, to submit written proofs of claims to: The Specialized Inter-Regional Economic Court of Karaganda Mametov Str. 131-21 Karaganda Kazakhstan =================== K Y R G Y Z S T A N =================== CITY VISION: Creditors Must File Claims by November 19 ------------------------------------------------------ LLC City Vision Bishkek has shut down. Creditors have until Nov. 19, 2008, to submit written proofs of claim. Inquiries can be addressed to (+996 312) 66-75-22. =================== L U X E M B O U R G =================== EVRAZ GROUP: Crude Steel Production Volume Up 32% in 3Q 2008 ------------------------------------------------------------ The Evraz Group S.A. released its third quarter operational results. Product 3Q 2008 3Q 2007 3Q 2008/ 2Q 2008 3Q 2008/ '000 tonnes unless 3Q 2007, 2Q 2008 otherwise stated change** change** --------------- ------- ------- -------- ------- -------- Steel division Coke (saleable) 438 602 (27.2)% 651 (32.7)% Pig iron 3,621 2,761 31.1% 3,628 (0.2)% Pig iron (saleable) 239 230 3.8% 275 (13.3)% Crude steel 4,886 3,695 32.2% 4,743 3.0% Rolled products, net of rerolled volumes 4,491 3,460 29.8% 4,324 3,9% Semi-finished products 1,184 620 91.0% 993 19.2% Construction products 1,318 1,349 (2.4)% 1,604 (17.9)% Railway products 688 563 22.3% 622 10.7% Flat-rolled products 889 594 49.2% 759 17.1% Tubular products 254 124 104.0% 138 83.6% Other steel products 159 207 (23.1)% 207 (23.0)% Mining division Iron ore (saleable products) Lumping ore 612 n/a n/a 792 (22.7)% Concentrate 1,087 923 17.7% 867 25.3% Sinter 1,979 1,914 3.4% 1,899 4.2% Pellets 1,363 1,439 (5.3)% 1,520 (10.4)% Coal Coking coal (mined) 2,176 1,352 60.9% 2,367 (8.1)% Steam coal (mined) 1,003 1,319 (23.9)% 676 48.4% Concentrate (production) 888 784 13.4% 1,075 (17.3)% Steam concentrate (production) 195 0 n/a 131 48.2% Vanadium (tonnes of V)3 Vanadium in slag (saleable) 3,016 2,919 3.3% 2,814 7.2% Vanadium in alloys and chemicals 3,734 3,535 5.6% 4,239 (11.9)% Equity investments Raspadskaya6 Coking coal (mined) 2,939 3,684 (20.2)% 2,172 35.3% * All information on production volumes of the enterprises presented in the press release concerns only the period of their operation within Evraz Group. The total volume of rolled steel products excludes those re-rolled at other Group's plants. These volumes are eliminated as intercompany sales for purposes of Evraz's consolidated operating results. ** Percentage changes may not be exact due to rounding. 1 Operational results of the Ukrainian assets � Dnepropetrovsk Steel Works and coke chemical plants - are consolidated into the Group since Dec. 12, 2007. 2 Operational results of Claymont Steel are consolidated into the Group since January 2008. Operational results of IPSCO Canada are consolidated into the Group since June 12, 2008. 3 Calculated in pure vanadium equivalent. 4 Operational results of Nikom, a.s.,. are consolidated into the Group since Dec. 20, 2007. 5 The disposal of the Vanchem operations was implemented with effect from Aug. 29, 2008. 6 Evraz Group holds a 40% effective interest in OAO Raspadskaya. About Evraz Headquartered in Luxembourg, Evraz Group S.A. (LSE:EVR) -- http://www.evraz.com/-- manufactures and distributes steel and related products. In addition, the Company owns and operates certain mining assets. Its steel production and mining facilities are mainly located in the Russian Federation. It operates three steel mills in Russia, one mill in the Sverdlovsk region and two mills in the Kemerovo region. * * * Evraz Group S.A. continues to carry a Ba2 corporate family rating, a Ba2 rating for Senior Notes due 2009 and a Ba3 rating for Senior Notes due 2015 from Moody's Investors Service, which placed them on review in March 2008 for possible downgrade. The company also carries BB- long-term corporate credit and senior unsecured debt ratings from Standard & Poor's Ratings Services, with positive outlook. The ratings were affirmed in March 2008. Evraz carries BB long-term Issuer Default and senior unsecured ratings and B Short-term Issuer Default rating from Fitch Ratings, with stable outlook. The ratings were affirmed in March 2008. RUSSIAN FACTORING: S&P Puts BB Rating on RUR200MM Mezzanine Loan ---------------------------------------------------------------- Standard & Poor's Ratings Services has assigned its credit ratings to the RUR3.125 billion notes and RUR200 million mezzanine loan issued by Russian Factoring No. 2 S.A., a special-purpose entity based in Luxembourg. The notes and the mezzanine loan are backed by factoring receivables originated by CJSC "Eurokommerz FC", a factoring company based in Russia. This is the third factoring receivables transaction in Russia that S&P has publicly rated, and the second factoring receivables transaction originated by Eurokommerz. This transaction provides adequate structural features to mitigate loss, commingling, and fraud risks. Due to the revolving nature of the collateral which comprises short-term maturing factoring contracts, the transaction benefits from dynamic credit enhancement. This means overcollateralization increases if portfolio losses increase. The dynamic enhancement is calculated on the basis of S&P's trade receivables model. Daily and monthly performance-related triggers offer additional protection to the transaction. As a notable structural component, the transaction uses LLC "Eurokommerz Cash Manager" as the collection agent, to collect the repayments from the debtors and customers. The collection agent is used to avoid the issuer's receipts being commingled with the originator's money and with the collection account bank's estate. The collection agent was established to act as such in the first securitization transaction originated by Eurokommerz (Russian Factoring No. 1 S.A.). To spread the collection agent's functions onto the current transaction, the issue joined the collection agency agreement by accession. Russian Factoring No. 2 S.A. -- RUR3.325 Billion Senior And Mezzanine Notes Class Rating Amount (RUR) ----- ----- ------------ Senior notes BBB 3,125 Million Mezzanine loan BB 200 Million ===================== N E T H E R L A N D S ===================== ASTIR BV: Fitch Withdraws Ratings on Lack of Ongoing Information ---------------------------------------------------------------- Fitch Ratings has withdrawn the ratings on Astir B.V.'s Series 14 EUR250 million Class A1 (ISIN: XS0238951536) and Series 15 EUR10 million Class A2 (ISIN: XS0238952187) notes (also known as Regatta CDO). As a result of a recent noteholder resolution, Fitch has been informed that it will no longer receive on going portfolio information. As a result, Fitch has decided to withdraw the ratings due to lack of ongoing information. Both notes were downgraded to 'BB' from 'BBB-' and assigned Negative Outlook on October 13, 2008. PANGAEA ABS: Fitch Puts 'BB-'Rated Class F Notes Under Watch Neg. ---------------------------------------------------------------- Fitch Ratings has placed Pangaea ABS 2007-1 B.V. notes due 2096 on Rating Watch Negative, as: -- EUR216,758,733 Class A floating-rate notes (ISIN XS0287257280): 'AAA' on RWN -- EUR16 million Class B floating-rate notes (ISIN XS0287266356): 'AAA' on RWN -- EUR18 million Class C floating-rate notes (ISIN XS0287267677): 'AA' on RWN -- EUR22 million Class D floating-rate notes (ISIN XS0287268642): 'A' on RWN -- EUR16 million Class E floating-rate notes (ISIN XS0287271604): 'BBB-' on RWN -- EUR5 million Class F floating-rate notes (ISIN XS0287272164): 'BB-' on RWN -- EUR4,466,525 Class S1 combination notes (ISIN XS0289328394): 'A' on RWN Pangaea is a securitization of mainly European structured finance securities with the total note issuance of EUR309.2 million invested in a EUR287 million portfolio. This action is due to portfolio performance deterioration primarily driven by the default of Lehman Brothers Holdings Inc. Fitch notes that five issuers forming 4.8% or EUR14.2 million of the portfolio are currently in default. These five issuers are all credit- linked notes issued with counterparty exposure to Lehman Brothers Holdings Inc which is in bankruptcy. Due to the defaults, Classes E and F are currently under-collateralized and as such the over-collateralization tests are 99.4% and 97.7% respectively as of the last trustee report. Although the RWN is primarily driven by the default of the five CLNs, Fitch notes that 5.3% of the portfolio is currently on RWN, suggesting future negative portfolio migration is likely. As of October 2008, the EUR287 million portfolio contained structured finance securities from 86 issuers, with the largest exposure accounting for 2.4% of the outstanding portfolio amount, and the three largest obligors counting for 7.3% of the outstanding portfolio amount. The weighted average portfolio quality is 'BBB-' and the weighted average life of the portfolio is approximately 5.6 years. The underlying securities consist primarily of RMBS (26.1%), CMBS (36.4%), CDOs (20.4%) and SME CDOs (8.8%). The portfolio is actively managed by Investec Principal Finance, a business unit division of Investec Bank (UK) Ltd. As announced in Fitch's Rating Action Commentary titled "Fitch Proposes Fully Updated Approach For SF CDOs; Places Transactions Under Analysis," published on its Web site on October 14, 2008, Fitch has announced proposals to change its rating methodology for structured finance CDOs. Fitch is reassessing its analytic views which could also impact existing ratings, including the ratings assigned to the securities referred to in this announcement. Resolution of the current Rating Watch Negative status will consider all updated criteria assumptions once published, as well as any additional credit migration with respect to the underlying portfolio, or any credit risk sales undertaken by the asset manager. The notional amount for Class F excludes deferred interest which is currently EUR122,660 which results in a total principal amount outstanding of EUR5,122,660. The notional amount of Class S1 combination note refers to the outstanding rated balance. This takes into account all previous payments that have been used to reduce the note balance, in accordance with the terms and conditions of the notes. * Moody's Gives Negative Credit Outlook for Dutch Insurance Sector ------------------------------------------------------------------ The fundamental credit outlook for the Dutch insurance industry is negative, reflecting the absence of growth opportunities in the non-life segment, uncertainties surrounding the health segment and the negative prospects for the life insurance market, Moody's Investors Service says in a new Industry Outlook. The outlook also reflects the pressures on profitability in all the segments of the industry. Moody's negative outlook for the Dutch insurance industry expresses the rating agency's view on the likely future direction of fundamental credit conditions in the industry over the next 12 to 18 months. It does not represent a projection of rating upgrades versus downgrades. "The Dutch life insurance market has been hit by a controversy relating to unit-linked contracts, including an investigation by the financial services ombudsman revealing some evidence of a lack of transparency in the cost structure of these contracts. It is now clear that insurers will be obliged to indemnify policyholders, but the costs for the industry remain uncertain. However, more important than the financial impact, Moody's believes this situation will depress sales of retail insurance savings products for the medium-term, especially in the unit- linked segment, as well as the future profitability of life players. Relative demand for guaranteed products will also increase," says Benjamin Serra, a Moody's Analyst and author of the report. In Moody's opinion, these negative impacts will be exacerbated by the increased competition in the savings segment introduced by new legislation allowing banks to sell savings products with the same favorable taxation as insurance products. However, some opportunities will arise for life insurance companies in the pension segment, although insurers also have to compete with pension funds in this area. Nonetheless, annuities already represent a significant part of Dutch insurers' liabilities and successful growth in the pensions segment would lead to life players being increasingly exposed to longevity risk. "As far as non-life insurance is concerned, the Dutch market is mature, with limited growth opportunities. High competition also translates into a decreasing trend in average premiums. This phenomenon has been reinforced recently by the rapid growth in competition from low-cost Internet players. Moody's therefore expects the profitability of the industry to steadily decline going forward," adds Mr Serra. Meanwhile, health insurance, the largest segment in terms of premiums since the healthcare system was privatized in 2006, is characterized by ongoing uncertainties, as the legislation governing this segment is still evolving. This political risk may weigh on the profitability of this sector. In addition, expenses have increased in all segments, driven by IT investments aimed at improving services to customers and intermediaries, which will likely weigh on profitability in the near term. In this context, most insurers are focusing on improving efficiency and creating economies of scale, which has led to significant market consolidation recently, which Moody's expects to continue in the short to medium term. However, this will be accompanied by significant execution risks. Nonetheless, Moody's recognizes that the Dutch insurance industry remains adequately capitalized and its asset quality is relatively good. However, solvency ratios have declined in recent months given the recent decrease in equity markets, interest rate increases and spread widening. Financial flexibility has also deteriorated recently, due to the combination of decreases in capitalization and higher funding costs. =============== P O R T U G A L =============== * PORTUGAL: Retains 2.2% of GDP Budget Deficit Target for 2009 -------------------------------------------------------------- Portugal's finance minister Fernando Teixeira Santos said Wednesday that the country's economic growth was expected to slide to 0.8% this year and 0.6% in 2009, down from previous government forecasts of 1.5% for 2008 and 2% for 2009, The Financial Times reports. He set the 2009 budget deficit target at 2.2% of gross domestic product, unchanged from 2008 in response to the global financial crisis and economic slowdown. The government, the FT recalls, had previously agreed with the European Commission to cut the deficit to 1.5% of GDP next year. The new target marks the postponement of successful efforts to cut a soaring budget deficit, which had spiraled to 6.8% of GDP in 2004, shortly before the Socialists took office, the FT notes. After three years of austerity that brought the deficit well below 3% of GDP, the maximum limit allowed under the European Union's fiscal rules, Portugal was poised for economic recovery when the onset of the global crisis hit growth prospects, the FT writes. As cited by the FT, Mr. Teixeira Santos said the budget proposals were an attempt to respond to the challenges of the global crisis while maintaining the government's commitment to disciplining public finances. Under the proposals, the FT relates that state workers will receive their biggest pay rise in seven years. The planned increase of 2.9% is the first time the Socialist government has offered public employees a pay increase above inflation, which the government forecasts at 2.9% this year and 2.5% in 2009. Portugal, the FT reports, will vote in local, European and parliamentary elections next year. However, Mr. Teixeira Santos said the public sector pay increase was a planned compensation for sacrifices workers had made in recent years and was not related to the election calendar. =========== R U S S I A =========== EVRAZ GROUP: Crude Steel Production Volume Up 32% in 3Q 2008 ------------------------------------------------------------ The Evraz Group S.A. released its third quarter operational results. Product 3Q 2008 3Q 2007 3Q 2008/ 2Q 2008 3Q 2008/ '000 tonnes unless 3Q 2007, 2Q 2008 otherwise stated change** change** --------------- ------- ------- -------- ------- -------- Steel division Coke (saleable) 438 602 (27.2)% 651 (32.7)% Pig iron 3,621 2,761 31.1% 3,628 (0.2)% Pig iron (saleable) 239 230 3.8% 275 (13.3)% Crude steel 4,886 3,695 32.2% 4,743 3.0% Rolled products, net of rerolled volumes 4,491 3,460 29.8% 4,324 3,9% Semi-finished products 1,184 620 91.0% 993 19.2% Construction products 1,318 1,349 (2.4)% 1,604 (17.9)% Railway products 688 563 22.3% 622 10.7% Flat-rolled products 889 594 49.2% 759 17.1% Tubular products 254 124 104.0% 138 83.6% Other steel products 159 207 (23.1)% 207 (23.0)% Mining division Iron ore (saleable products) Lumping ore 612 n/a n/a 792 (22.7)% Concentrate 1,087 923 17.7% 867 25.3% Sinter 1,979 1,914 3.4% 1,899 4.2% Pellets 1,363 1,439 (5.3)% 1,520 (10.4)% Coal Coking coal (mined) 2,176 1,352 60.9% 2,367 (8.1)% Steam coal (mined) 1,003 1,319 (23.9)% 676 48.4% Concentrate (production) 888 784 13.4% 1,075 (17.3)% Steam concentrate (production) 195 0 n/a 131 48.2% Vanadium (tonnes of V)3 Vanadium in slag (saleable) 3,016 2,919 3.3% 2,814 7.2% Vanadium in alloys and chemicals 3,734 3,535 5.6% 4,239 (11.9)% Equity investments Raspadskaya6 Coking coal (mined) 2,939 3,684 (20.2)% 2,172 35.3% * All information on production volumes of the enterprises presented in the press release concerns only the period of their operation within Evraz Group. The total volume of rolled steel products excludes those re-rolled at other Group's plants. These volumes are eliminated as intercompany sales for purposes of Evraz's consolidated operating results. ** Percentage changes may not be exact due to rounding. 1 Operational results of the Ukrainian assets � Dnepropetrovsk Steel Works and coke chemical plants - are consolidated into the Group since Dec. 12, 2007. 2 Operational results of Claymont Steel are consolidated into the Group since January 2008. Operational results of IPSCO Canada are consolidated into the Group since June 12, 2008. 3 Calculated in pure vanadium equivalent. 4 Operational results of Nikom, a.s.,. are consolidated into the Group since Dec. 20, 2007. 5 The disposal of the Vanchem operations was implemented with effect from Aug. 29, 2008. 6 Evraz Group holds a 40% effective interest in OAO Raspadskaya. About Evraz Headquartered in Luxembourg, Evraz Group S.A. (LSE:EVR) -- http://www.evraz.com/-- manufactures and distributes steel and related products. In addition, the Company owns and operates certain mining assets. Its steel production and mining facilities are mainly located in the Russian Federation. It operates three steel mills in Russia, one mill in the Sverdlovsk region and two mills in the Kemerovo region. * * * Evraz Group S.A. continues to carry a Ba2 corporate family rating, a Ba2 rating for Senior Notes due 2009 and a Ba3 rating for Senior Notes due 2015 from Moody's Investors Service, which placed them on review in March 2008 for possible downgrade. The company also carries BB- long-term corporate credit and senior unsecured debt ratings from Standard & Poor's Ratings Services, with positive outlook. The ratings were affirmed in March 2008. Evraz carries BB long-term Issuer Default and senior unsecured ratings and B Short-term Issuer Default rating from Fitch Ratings, with stable outlook. The ratings were affirmed in March 2008. GLOBEX: Bars Withdrawals Wednesday Amid Bank Run ------------------------------------------------ Globex banned depositors Wednesday from withdrawing their money as confidence in the Russian banking system began to show signs of evaporating, The Financial Times writes. Globex, a mid-sized retail bank with assets of US$4 billion (EUR2.95 billion, GBP2.32 billion), is the first Russian bank to experience a run on deposits during the crisis, the report notes. An economist at a western bank in Moscow said Globex was probably the first in what could be a number of bank panics, if the government did not take concerted action soon, the FT reports. As cited by the FT, Maxim Raskosnov, an analyst at Renaissance capital, said the bank lost 13% of its deposits last month. It further lost 15% this month according to Emilya Alieva, Globex's vice-president. Despite a Kremlin promise of US$200 billion in relief funds �- US$87 billion this week -� the fall-out of a stock market plunge and the global credit crunch appears to be worse than anticipated, the FT quotes analysts as saying. The crunch has not affected the living standards of ordinary Russians, but a rash of bank failures could, the FT says. Banks across Russia have faced a rise in outflows as depositors have begun to lose trust in banks. Mr. Raskosnov, FT relates, said Globex was in an especially difficult situation, as a high concentration of its lending was in property, one of the sectors most under pressure from the credit crunch. He said the bank was also not rated by a leading credit rating agency, the prerequisite for central bank funding. Globex confirmed that the ban on withdrawals had been in effect since Tuesday, according to the report. Globex blamed "demand from depositors, many of whom explained their wish to transfer their money to VTB or Sberbank". In the past two months three Russian banks have been forced into mergers as a result of the credit crisis, and analysts expect more consolidation, the report continues. Russia's central bank, however, made no public mention of Globex crisis, sparking criticism from analysts, the FT notes. KHNATI MANSISK: Rumors on Insolvency Prompt Heavy Withdrawals ------------------------------------------------------------- At least a dozen Russian banks have reported a sharp rise in withdrawals and account closures, The Financial Times reports. According to the report, Tatyana Sadovskaya, the director of a branch of Khnati Mansisk Bank in the city of Nizhnevartovsk, responded Wednesday to the Interfax news agency in relation to rumors of her bank's insolvency. She said "People have formed long lines at cashiers and at bankomats, people are taking their deposits and closing their accounts." The crunch has not affected the living standards of ordinary Russians, but a rash of bank failures could, the FT says. Banks across Russia have faced a rise in outflows as depositors have begun to lose trust in banks. In the past two months three Russian banks have been forced into mergers as a result of the credit crisis, and analysts expect more consolidation, the report continues. NIZHNI NOVGOROD: Account Closures Rise Amid Financial Crunch ------------------------------------------------------------ At least a dozen Russian banks have reported a sharp rise in withdrawals and account closures, The Financial Times relates. As cited by the FT, Natalia Elisseva, vice-president for financial development at the Bank Nizhni Novgorod, said the number of clients closing accounts had risen. "If there is something that can sink the banks, it is panic amongst the population . . . . If there is a panic, not one bank will stand, regardless of state support." The crunch has not affected the living standards of ordinary Russians, but a rash of bank failures could, the FT says. Banks across Russia have faced a rise in outflows as depositors have begun to lose trust in banks. In the past two months three Russian banks have been forced into mergers as a result of the credit crisis, and analysts expect more consolidation, the report continues. PENOIZOL LLC: Creditor Must File Claims by November 3 ----------------------------------------------------- Creditors of LLC Penoizol Production Commercial Firm ( Heat and Sound-Insulating Materials and Items Production) have until Nov.3, 2008 to submit proofs of claims to: V. Kevarkov Temporary Insolvency Manager Apt.15 Generalskaya Str. 12 620062 Yekaterinburg Russia The Arbitration Court of Chelyabinskaya will on Dec. 10, 2008, to hear bankruptcy supervision procedure. The case is docketed under Case No. A76�7442/2008�55-121. The Arbitration Court of Chelyabinsk Vorovskogo Str. 2 454091 Chelyabinsk Russia The Debtor can be reached at: LLC Penoizol Postysheva Str. 2 454091 Chelyabinsk Russia SIBUR HOLDING: Moody's Confirms Ba2 Corporate Family Rating ----------------------------------------------------------- Moody's Investors Service has confirmed the Ba2 Corporate Family Rating and the Ba2 Probability of Default rating of Sibur Holding OJSC with a stable outlook. The ratings were put on review for possible downgrade in May 2008 following the announcement of the contemplated management buyout of 50% +1 share of the company from its main shareholder Gazprombank (Baa1, stable) for approximately US$2.3 billion (RUR 53.5 billion). In September 2008, the company announced the cancellation of the MBO transaction due to unfavorable market conditions, and advised that it does not intend to resume such activity in the foreseeable future. In its action plan aiming at mitigating the potential chemical market downturn, the company re-evaluated and re-prioritized its investment program (including acquisition activity) and embarked on a cost-saving program. The company is expected to repay its debt of US$542 million maturing in 2009 thanks to a moderate non- discretionary capex that should be fully financed by operating cash-flow and available bank facilities of US$570 million. Based on year 2007 and expected LTM 2008 financial results, Sibur is strongly positioned in its rating category, given its high profitability vis-a-vis industry peers (EBITDA margin of 23% in 2007, 27% in 2008), low leverage of Debt/EBITDA comfortably below 1 and positive free cash flow. However, Moody's notes that Sibur might consider to increase capex spending up to ca. US$6 billion for 2009-2010, which would require to raise new debt. The agency will monitor the company's ability to raise required financing for potential tightening of liquidity. The stable outlook reflects Moody's expectation that the company will be able to defend its margins in the lower phase of the chemical cycle, adhere to conservative financial policies and liquidity management and apply prudent project selection criteria. In view of the planned ambitious capex program and potential acquisition activity, Moody's expects Sibur to be able to maintain over time the level of Cash From Operations (CFO) to Debt consistently above 30%, and leverage measured by adjusted Debt/EBITDA below 1.5x. A failure to maintain such metrics might create negative pressure on the rating. Domiciled in St. Petersburg, Russian Federation OJSC Sibur Holding is the largest Russian vertically integrated petrochemical holding, producing hydrocarbon feedstock, fertilizers, Synthetic rubbers, polymers and tyres. Sibur's reported revenues in 2007 amounted to RUR143 billion, EBITDA RUR34 billion and net income RUR22.3 billion. TOMSKOE AIRCRAFT: Creditors Must File Claims by November 26 ----------------------------------------------------------- Creditors of OJSC Tomskoe Aircraft Producion Association (TIN 7017115933, PSRN 1057000135455) have until Nov. 26, 2008, to submit proofs of claims to: N. Razumov Insolvency Manager Office 207 Nakhimova Str. 13/1 634045 Tomsk Russia The Arbitration Court of Tomskaya commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No.A67-9053/06. The Court can be reached at: The Arbitration Court of Tomsk Kirova Pr. 10 634050 Tomsk Russia The Debtor can be reached at: OJSC Tomskoe Aircraft Producion Association Airport poselok 634539 Tomskaya Russia URAL CONSTRUCTION: Creditor Must File Claims by November 3 ---------------------------------------------------------- Creditors of LLC Ural Construction Technology have until Nov. 3, 2008, to submit proofs of claims to: I. Bulatov Temporary Insolvency Manager Zavodskaya Str.29 Plast 457020 Chelyabinskaya Russia The Arbitration Court of Chelyabinskaya will convene at 3:00 p.m. on Dec. 10, 2008, to hear bankruptcy supervision procedure. The case is docketed under Case No. A76�7434/2008�55-122. The Court is located at: The Arbitration Court of Chelyabinsk Vorovskogo Str. 2 454091 Chelyabinsk Russia The Debtor can be reached at: LLC Ural Construction Technology Khudyakova Str. 12 454080 Chelyabinsk Russia WEST SIBERIAN: Standard & Poor's Affirms Short-Term Rating at 'C' ----------------------------------------------------------------- Standard & Poor's Ratings Services has placed its 'B' long-term counterparty credit and 'ruBBB+' Russia national scale ratings on West Siberian Commercial Bank on CreditWatch with developing implications. At the same time, the 'C' short-term rating was affirmed. "The CreditWatch placement follows the announcement that a 50.2% stake in the bank will be acquired by two local regional governments," said S&P's credit analyst Victor Nikolskiy. "Uncertainties regarding the financial condition of the bank also played a significant role in the CreditWatch placement." The Tyumen Oblast (not rated) and Yamal-Nenets Autonomous Okrug (AO; BB+/Stable/--; Russia national scale 'ruAA+'), the two regional governments acquiring West Siberian, have not disclosed the price and structure of the acquisition. S&P considers that the acquisition could positively affect the bank's liquidity, financial flexibility, and capitalization, and offer some protection in the current domestic financial crisis. At the same time, the sudden change of ownership and the difficult operating environment Russian banks are experiencing create uncertainties about West Siberian's current creditworthiness, which could lead us to lower the ratings on the bank. "We will resolve the CreditWatch placement upon the completion of the acquisition and our evaluation of its impact on the bank," said Mr. Nikolskiy. This will include a review of the bank's financial condition, changes in strategy and management, and most importantly, the capacity and willingness of the majority shareholders to provide financial support, including new capital and funding resources. YAMAL-NENETS: West Siberian Share Increase Won't Hurt S&P Ratings ----------------------------------------------------------------- Standard & Poor's Ratings Services said that the planned increase of the Russian Yamal-Nenets Autonomous Okrug's (AO; B+/Stable/--; Russia national scale 'ruAA+') share in the capital of West Siberian Commercial Bank (B/Watch Dev/--; Russia national scale 'ruBBB+') has no immediate negative impact on the okrug's creditworthiness. Yamal-Nenets AO's robust finances, with budget surpluses and large cash reserves, and with no direct debt, make it capable of withstanding the increase in contingent liabilities associated with a larger share in an important regional bank. The okrug, together with neighboring Tyumen Oblast (not rated), decided to increase their share in the capital of the bank to 25.1% each. The two regions have committed to supporting the bank in order to secure its important role in the territory -� servicing retail depositors and providing payroll services in the public sector and loans to citizens and local enterprises. This decision increases Yamal-Nenets AO's contingent liabilities. The amount of Yamal-Nenets AO's injections to the bank's capital is still under discussion, along with the scope and form of additional financial support from both regions. S&P doesn't expect the assistance to the bank will negatively impact the okrug's creditworthiness in the medium term, due to the okrug's comfortable liquidity, zero direct debt, and financial flexibility. Should the assistance to the bank be imprudently high and lead to consistently negative operating performance and/or depletion of liquidity reserves, the ratings on Yamal- Nenets AO could come under pressure. The okrug's direct debt is zero after the Russian ruble 1.8 billion bond repayment in August 2008. Yamal Nenets AO's liquidity is currently secured by a budget surplus and cash on accounts, which together represented 20% of the okrug's expenditures as of Oct. 1, 2008. The okrug's financial flexibility is better than that of most Russian peers, due to high per capita revenues (the bulk of which is provided by OAO Gazprom {BBB/Stable/--}). Wealth indicators in the okrug are high, with estimated per-capita gross regional product of US$46,041.40 in 2007. YURYUZANSKAYA ENERGY: Creditors Must File Claims by November 3 -------------------------------------------------------------- Creditors of CJSC Yuryuzanskaya Energy Saving Company (TIN 7410006224) have until Nov. 3, 2008, to submit proofs of claims to: K. Rudakov Insolvency Manager Post User Box 12555 454080 Chelyabinsk Russia The Arbitration Court of Chelyabinsk commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A76-7859/2008-34-74. The Court is located at: The Arbitration Court of Chelyabinsk Vorovskogo Str. 2 454091 Chelyabinsk Russia The Debtor can be reached at: CJSC Yuryuzanskaya Energy Saving Company Varganova Str. 1 Yuryuzan Chelyabinskaya Russia ZENIT LLC: Creditor Must File Claims by November 3 -------------------------------------------------- Creditors of LLC Zenit Insurance Entity have until Nov. 3, 2008 to submit proofs of claims to: A. Tsekh Temporary Insolvency Manager Office 31 Kavalergardskaya Str. 6 191015 Saint-Petersburg Russia The Arbitration Court of Moscow will convene on Jan. 13, 2009, to hear bankruptcy supervision procedure. The case is docketed under Case No. A40�36988/08�71-89 B . The Court is located at: The Arbitration Court of Moscow Building 1 Novaya Basmannaya Str.13/2 107078 Moscow Russia The Debtor can be reached at: LLC Zenit Building 2 Obrucheva Str. 34/63 117342 Moscow Russia ========= S P A I N ========= AYT DEUDA: S&P Slashes Rating on Class C Notes to BB ---------------------------------------------------- Standard & Poor's Ratings Services has lowered and removed from CreditWatch with negative implications its credit ratings on the class A, B, and C notes issued by AyT Deuda Subordinada I, Fondo de Titulizacion de Activos. The rating actions are based on a review of the current pool credit quality and concentration risks given the credit profile. S&P's review concluded that the overall pool credit quality has deteriorated since closing, giving rise to an increase in assessed default risk for each class of notes. At the same time, given the present financial situation there is a higher risk of co- dependence of the assets. AyT Deuda Subordinada I issued EUR298 million of notes in November 2006, backed by nine subordinated debt bonds issued by nine Spanish savings banks. The bonds were tailored specifically for the purpose of this issuance�their terms and conditions match those of the issued notes. AyT Deuda Subordinada I, Fondo de Titulizacion de Activos -- EUR298 Million Asset-Backed Floating-Rate Notes Ratings Lowered And Removed From CreditWatch Negative: Class To From ----- -- ---- A A AAA/Watch Neg B BBB- A/Watch Neg C BB BBB-/Watch Neg =========== S W E D E N =========== SEQUANA CAPITAL: S&P Withdraws B Short-Term Corp. Credit Rating --------------------------------------------------------------- Standard & Poor's Ratings Services has withdrawn its 'B' short- term corporate credit rating on Sequana at the company's request. ===================== S W I T Z E R L A N D ===================== BAGGI'S DESKTOP-TEAM: Creditors Must File Claims by Oct. 30 ----------------------------------------------------------- Creditors owed money by LLC Baggi's Desktop-Team are requested to file their proofs of claim by Oct. 30, 2008, to: R. Baggenstos Fasanenstrasse 5 5737 Menziken Switzerland The company is currently undergoing liquidation in Menziken. The decision about liquidation was accepted at an extraordinary shareholders' meeting held on Aug. 13, 2008. CORMEX LLC: Deadline to File Proofs of Claim Set Oct. 30 -------------------------------------------------------- Creditors owed money by LLC Cormex are requested to file their proofs of claim by Oct. 30, 2008, to: Corina Girell di Giovanoel LLC Cormex Leimstrasse 3A 4805 Vordemwald Switzerland The company is currently undergoing liquidation in Vordemwald. The decision about liquidation was accepted at an extraordinary shareholders' meeting held on Sept. 8, 2008. EMEAA COMPUTER: Creditors Have Until Oct. 30 to File Claims ----------------------------------------------------------- Creditors owed money by JSC EMEAA Computer are requested to file their proofs of claim by Oct. 30, 2008, to: Werner Wild Obermattweg 12 6052 Hergiswil 6 Switzerland The company is currently undergoing liquidation in Hergiswil NW. The decision about liquidation was accepted at an extraordinary shareholders' meeting held on Sept. 11, 2008. LOCHER CONSULTING: Proofs of Claim Filing Deadline is Oct. 30 ------------------------------------------------------------- Creditors owed money by LLC Locher Consulting are requested to file their proofs of claim by Oct. 30, 2008, to: Marianne Locher Herbstackerstrasse 35 8472 Seuzach Switzerland The company is currently undergoing liquidation in Zurich. The decision about liquidation was accepted at an extraordinary shareholders' meeting held on May 24, 2005. NOVASEP JSC: Creditors' Proofs of Claim Due by Oct. 30 ------------------------------------------------------ Creditors owed money by JSC NOVASEP (Switzerland) are requested to file their proofs of claim by Oct. 30, 2008, to: Martin Herb Herb Takata Rechtsanwalte Kappelergasse 15 Mail Box 2400 8022 Zurich Switzerland The company is currently undergoing liquidation in Zurich. The decision about liquidation was accepted at an extraordinary shareholders' meeting held on Sept. 12, 2008. SASSA LLC: Oct. 30 Set as Deadline to File Claims ------------------------------------------------- Creditors owed money by LLC Sassa are requested to file their proofs of claim by Oct. 30, 2008, to: Jeannette Bussmann-Rechsteiner Aegerisaumweg 6B 6300 Zug Switzerland The company is currently undergoing liquidation in Zug. The decision about liquidation was accepted at an extraordinary shareholders' meeting held on April 11, 2008. SCHIFFSKONSTRUKTIONEN LLC: Deadline to File Claims Set Oct. 29 -------------------------------------------------------------- Creditors owed money by LLC Schiffskonstruktionen are requested to file their proofs of claim by Oct. 29, 2008, to: Dr. Werner Dessauer JSC Commercial Investment Alte Landstrasse 134 8702 Zollikon 6 Switzerland The company is currently undergoing liquidation in Glarus. The decision about liquidation was accepted at an extraordinary shareholders' meeting held on Sept. 15, 2008. UBS AG: Takes Measures to De-Risk and Reduce Balance Sheet ---------------------------------------------------------- The Swiss National Bank and UBS yesterday unveiled a comprehensive solution to materially de-risk and reduce UBS's balance sheet. Peter Kurer, Chairman of UBS said, "In these turbulent times we want to ensure that we do everything possible to safeguard the solidity of our bank. We are taking practical steps to eliminate legacy risks. We thank the Swiss Government and the Swiss National Bank for their willingness to develop a commercial solution under economic terms that will support both the stability of the Swiss financial system and UBS. Their efforts and decisiveness to act swiftly demonstrates the professionalism of the Swiss financial center, to which we are deeply committed." Marcel Rohner, Group CEO said, "This transaction gives comfort in UBS's future. The extremely difficult market environment led us to accelerate our risk reduction with a definitive move. Our aim is to protect our clients from the impact of the crisis to the fullest extent possible and to provide our shareholders an opportunity to renew their confidence in the bank. Our shareholders have borne the losses from this crisis. They now have the certainty that our risks related to these distressed assets have been substantially removed while still participating in the recovery of these assets." Up to US$60 billion in assets to be transferred to new entity, fully owned and controlled by SNB Based on an agreement with the SNB, UBS will transfer up to US$60 billion of assets to a newly created fund entity. UBS will capitalize the fund with equity of up to US$6 billion. The SNB will finance the fund with a loan of up to US$54 billion, secured on the assets of the fund. At the time it grants the loan, the SNB will take over control and ownership of the entity by purchasing the equity for a nominal price of US$1. The loan will be non-recourse to UBS, assuming no change of control of UBS and will be priced at LIBOR plus 250 basis points. It will mature in eight years, but the maturity may be extended to 10 or 12 years. The US$6 billion equity will absorb any potential realized losses up to this amount. The purpose of the fund is to ensure an orderly financing and liquidation of securities that are currently illiquid as well as other assets from UBS's balance sheet over the long-term. The assets transferred into the fund include around US$31 billion (as per valuation at September 30, 2008) of primarily cash securities, previously disclosed in these categories: * US sub-prime * US Alt-A * US prime * US commercial real estate and mortgage-backed securities * US student loan auction rate certificates and other securities backed by student loans * US reference-linked note program (RLN) (1) At completion of the transaction, UBS's net exposure in these risk categories will be reduced to nearly zero (compared to US$44.2 billion on June 30, 2008), with residual long positions held by UBS in these asset classes hedged through existing short positions, including credit protection embedded in the RLN programs. UBS will also transfer additional, mainly non-US debt instruments with a total net value of US$18 billion to the fund � a wide range of securities backed by a variety of asset classes. The inclusion of these positions follows UBS's decision to downsize its securitization business and provides a better diversification of the fund's portfolio. The transfer of the US$49 billion of assets will take place over the coming months, during fourth quarter 2008 or first quarter 2009, but will be priced at valuations as of September 30, 2008. These prices will be verified by independent third parties and potential differences will be recorded in the bank's income statement. UBS will have the right to transfer up to an additional US$9 billion of assets into the fund at a later stage. These include up to US$5 billion of student loan auction rate securities the bank may buy back from clients as part of the recent settlements and up to US$3.5 billion of positions which may become unhedged in the event of commutation of the credit protection contracts with one or more monoline insurers. (2) UBS will act as the investment manager of the fund, overseen by a board controlled by the SNB. The oversight board will approve specified matters including certain major transactions and changes in investment guidelines. It will also be empowered to change the investment manager. As part of this transaction, UBS has been granted the option to buy back the equity of the entity, once the loan is fully repaid, by paying the SNB US$1 billion plus 50% of the amount by which the equity value at the time of exercise exceeds that amount. Any remaining equity up to US$1 billion will go to the SNB and UBS will participate in 50% of the equity value exceeding US$1 billion. The option will be carried on UBS's balance sheet at its fair value. If � over the life of the transaction � the fund equity declines in value, the SNB will be able to participate in some manner in the appreciation of the UBS share price. The arrangement will be based on no more than 100 million UBS shares and will be further defined early next year. The transaction will result in a significant reduction in UBS's risk-weighted assets and its balance sheet total. The impact of the transaction and related capital measures will be shown in the fourth quarter results separately from the operating performance. On a preliminary basis, UBS estimates that the transaction will result in a charge against earnings of approximately CHF4 billion. These impacts would produce a year-end Tier 1 ratio of approximately 11.5%, before any other fourth quarter effects. UBS to Raise CHF6 Billion of New Capital to Fund Entity UBS will raise CHF6 billion of new capital in the form of mandatory convertible notes (MCN). This will allow the bank to retain a strong Tier 1 capital ratio, even after providing the equity to the newly established entity. The MCN has been fully placed with the Swiss Confederation. The Swiss Confederation reserves the right to reduce part or all of its investment by transferring the MCN to third party investors. The MCN issue is subject to approval by UBS shareholders who will vote on the creation of the required conditional capital underlying the MCN at an extraordinary general meeting (EGM) to be held in late November 2008. The MCN will count as Tier 1 capital for BIS capital adequacy purposes following EGM approval. Issuance of the MCN is expected to take place five business days after the EGM. The MCN will pay a coupon of 12.5% until conversion into UBS registered shares, which must take place no later than 30 months after issuance. The MCN will have a minimum conversion price corresponding to the reference price and a maximum conversion price set at 117% of the reference price. The reference price of the MCN will be determined as the lower of: * the volume-weighted average price (VWAP) of UBS shares on SWX Europe on the trading day preceding this announcement (CHF20.24 on 15 October 2008), and * the average of the daily VWAP on each of the three trading days ending on the day before the EGM. However, in no case will the reference price be less than CHF18.21, or 90% of the VWAP of October 15, 2008. Upon conversion of the MCN, the Swiss Confederation will hold approximately 9.3% of UBS's share capital, on the basis of currently outstanding shares and assuming conversion of the mandatory convertible notes issued in March 2008. A summary of the terms and conditions of the MCN can be found at www.ubs.com/media. UBS shareholders will be provided with more details on the proposed transactions together with the invitation to the EGM. Update on Third Quarter Results In line with the pre-announcement on October 2, UBS recorded a small net profit attributable to its shareholders of CHF296 million for third quarter 2008. Estimated third quarter results by division are: * Global Wealth Management & Business Banking's profit before tax rose 66% from second quarter 2008 to CHF1,862 million. The previous quarter, however, included a provision of CHF919 million for the expected costs of the repurchase of auction rate securities and related costs, including fines. * Global Asset Management's pre-tax profit was CHF414 million, up 18% from the previous quarter. This includes an extraordinary gain of approximately CHF168 million from the previously announced disposal of Adams Street Partners. * The Investment Bank's pre-tax result was negative CHF2,748 million, compared to a loss of CHF5,233 million in the second quarter. As credit spreads widened in the third quarter, the Investment Bank recorded gains of CHF2,207 million on own credit (compared to CHF122 million in second quarter). Disclosed concentrated risk positions were significantly reduced by US$13.5 billion, mainly through the sale of assets. Writedowns and losses on those disclosed positions totaled US$4.4 billion (compared to US$5.1 billion in second quarter), recorded in the Investment Bank's Fixed Income, Currencies and Commodities (FICC) business. Revenues were down across businesses, in line with prevailing market conditions. Corporate Center recorded a pre-tax loss of CHF7 million (CHF330 million in second quarter). Group results in third quarter include a tax credit of CHF912 million. Costs were again reduced across the bank, with cuts in discretionary spending and lower personnel expenses, reflecting lower staff levels and a decrease in bonus accruals in line with business performance. During third quarter, UBS reduced its balance sheet by around CHF80 billion to CHF1,997 billion. UBS's total BIS capital ratio on September 30 was estimated at 14.8% and its Tier 1 ratio at approximately 10.8%, compared to 15.7% and 11.6% respectively at the end of June. Wealth Management & Business Banking invested assets were CHF1,932 billion. The division recorded net new money of negative CHF49.3 billion in the third quarter, with a significant part of the outflow taking place in the last few weeks of the quarter. Global Asset Management invested assets were CHF708 billion with net new money negative 34.4 billion. With today's measures, in addition to its earlier steps, UBS is confident that it has created the conditions necessary to reverse the outflow of client assets. UBS's concentrated risk positions were reduced substantially during the quarter. In line with the recently announced re-positioning of the Investment Bank, UBS will continue to manage capital and resources carefully and diligently. More detailed third quarter results will be disclosed on November 4, 2008, as planned. 1) The US reference-linked program will continue to be operated by UBS. 2) The difference between the maximum facility size of US$60 billion and the total amount of securities described above resulted from asset sales and write-downs from mid September to the September 30 valuation date. About UBS AG Based in Zurich, Switzerland, UBS AG -- http://www.ubs.com/-- is a global provider of financial services for wealthy clients. UBS's financial businesses are organized on a worldwide basis into three Business Groups and the Corporate Center. Global Wealth Management & Business Banking consists of three segments: Wealth Management International & Switzerland, Wealth Management US and Business Banking Switzerland. The Business Groups Investment Bank and Global Asset Management constitute one segment each. The Industrial Holdings segment holds all industrial operations controlled by the Group. Global Asset Management provides investment products and services to institutional investors and wholesale intermediaries around the globe. The Investment Bank operates globally as a client-driven investment banking and securities firm. The Industrial Holdings segment comprises the non-financial businesses of UBS, including the private equity business, which primarily invests UBS and third-party funds in unlisted companies. * * * As reported in the Troubled Company Reporter-Europe on July 8, 2008, Moody's Investors Service downgraded to B- from B the financial strength rating (BFSR) of UBS AG. The rating outlook is stable. For second quarter of 2008, UBS reported a Group net loss attributable to shareholders of CHF358 million. As reported in the Troubled Company Reporter-Europe on Oct. 6, 2008, UBS said it will reposition its Investment Bank following a detailed review of the strategy by the Chairman and CEO of the Investment Bank, Jerker Johansson, members of the Group Executive Committee and the UBS Board of Directors. According to UBS, the Investment Bank will re-prioritize its business portfolio to preserve its core strengths and client franchises across Equities, IBD and FICC, while downsizing or exiting certain business activities. The Investment Bank will reduce net headcount by an additional 2,000, bringing staffing levels to approximately 17,000 by year-end, a reduction of around 6,000 since the peak in third quarter 2007. Reductions will be predominantly targeted to businesses being exited or downsized in order to protect and sustain core client franchises. =========== T U R K E Y =========== * TURKEY: Banking System Still Resilient, Moody's Says ------------------------------------------------------ The Turkish banking system is continuing to exhibit healthy profitability and mostly solid asset quality on the back of a growing though slowing economy, says Moody's Investors Service in its new Banking System Outlook for Turkey. However, Turkey's vulnerability to global financial market shocks and weakening economic conditions could have an adverse impact on domestic banking conditions, with the degree of deterioration in asset quality and profitability dependent on the magnitude and duration of the economic weakening. As a result, Moody's fundamental credit outlook for the Turkish banking system is now stable-to-negative. This outlook expresses the rating agency's view on the likely future direction of fundamental credit conditions in the industry over the next 12 to 18 months. It does not represent a projection of rating upgrades versus downgrades. "Turkish banks generally remain in a relatively healthy condition: profitability, capitalization and asset quality are all currently at strong levels and their liquidity positions are adequate. The largest banks have grown rapidly and aggressively in recent years as branches typically become profitable very quickly, while expansion strategies are now more targeted. In addition, the participation of foreign banks in the capital of many Turkish banks has reaped benefits in terms of franchise development and risk management," explains George Chrysaphinis, a Moody's Vice President / Senior Analyst and author of the report. As a result of the progress the sector has made since 2002, Moody's is confident that the Turkish banks' business models and franchises will prove resilient to financial market turbulence, with the domestic market still offering considerable potential for growth. Nonetheless, the rating agency anticipates that the global credit crunch and weakening economic conditions in most of Europe could spread into Turkey, possibly sooner rather than later, with Turkish real GDP growth expected to slow in 2008 and further in 2009. "As the domestic economy slows down and loan growth eases, we would expect a moderate deterioration in asset quality over the coming months. However, if the Turkish economic environment were to weaken more severely than we currently anticipate and the availability of credit to Turkish companies become significantly restricted, banks could face more substantial asset quality problems," says Mr. Chrysaphinis. Moody's base scenario is for only a moderate increase in non-performing loans that would be well within the banks' ability to provision. Nonetheless, given continuing turbulence on the global financial markets, the situation could change rapidly, in which case Moody's could incorporate a more severe scenario into its analysis, with possible negative rating consequences for the Turkish banks. ============= U K R A I N E ============= COMMUNAL SERVICES: Creditors Must File Claims by October 22 ----------------------------------------------------------- Creditors of OJSC South Electrical Engineering Plant Subsidiary Company Communal Services (code EDRPOU 30769169) have until Oct. 22, 2008, to submit proofs of claim to: Nikolay Krizhanovsky Liquidator Ap. 18 Kalinin Str. 125-A 73008 Herson Ukraine Tel: 8(050)318-62-65, 8(0552)31-13-17 The Economic Court of Herson commenced and bankruptcy proceedings against the company after finding it insolvent on Sept. 10, 2008. The case is docketed as 12/219-B-08. The Economic Court of Herson Gorkiy Str. 18 73000 Herson Ukraine The Debtor can be reached at: OJSC South Electrical Engineering Plant Subsidiary Company Communal Services Pervomayskaya Str. 35 Novaya Kakhovka 74903 Herson Ukraine GLUKHOV PLANT: Creditors Must File Claims by October 22 ------------------------------------------------------- Creditors of OJSC Glukhov Plant on Raw Materials Processing (code EDRPOU 01878408) have until Oct. 22, 2008, to submit proofs of claim to: Eugene Chuprun Temporary Insolvency Manager Ap. 49A Petropavlovskaya Str. 74 Sumy Ukraine The Economic Court of Sumy commenced bankruptcy supervision procedure on the company on Sept. 15, 2008. The case is docketed as 7/217-08. The Economic Court of Sumy Shevchenko Avenue 18/1 40030 Sumy Ukraine The Debtor can be reached at: OJSC Glukhov Plant on Raw Materials Processing Industrial Str. 25 Glukhov 41400 Sumy Ukraine INDUSTRIAL BUILDING: Creditors Must File Claims by October 22 ------------------------------------------------------------- Creditors of LLC Industrial Building Delivery (code EDRPOU 31621058) have until Oct. 22, 2008, to submit proofs of claim to: The Economic Court of Kiev Komintern Str. 16 01032 Kiev Ukraine The Economic Court of Kiev commenced and bankruptcy proceedings against the company after finding it insolvent on Sept. 17, 2008. The case is docketed as B 11/259-08. The Debtor can be reached at: LLC Industrial Building Delivery Ap. 10 Mayakovsky Svenue 32-D 02222 Kiev Ukraine KIROVOGRAD REGIONAL: Creditors Must File Claims by October 22 ------------------------------------------------------------- Creditors of Kirovograd Regional Radiotelevision Transmission Center State Enterprise (code EDRPOU 20650935) have until Oct. 22, 2008, to submit proofs of claim to: Igor Omelchenko Temporary Insolvency Manager Ap. 72 Ac. Pavlov Str. 132 Kharkov Ukraine The Economic Court of Kirovograd commenced bankruptcy supervision procedure on the company on June 23, 2008. The case is docketed as 10/130. The Economic Court of Kirovograd Lunacharski Str. 29 25006 Kirovograd Ukraine The Debtor can be reached at: Kirovograd Regional Radiotelevision Transmission Center State Enterprise P.O. Box 300 03150 Kharkov Ukraine KHLEBODAR LLC: Creditors Must File Claims by October 22 ------------------------------------------------------- Creditors of LLC Khlebodar (code EDRPOU 31309433) have until Oct. 22, 2008, to submit proofs of claim to: The Economic Court of Kiev Komintern Str. 16 01032 Kiev Ukraine The Economic Court of Kiev commenced and bankruptcy proceedings against the company after finding it insolvent on Sept. 17, 2008. The case is docketed as B 11/257-08. The Debtor can be reached at: LLC Khlebodar Korolev Str. 4 Svetilnia Brovary District 07444 Kiev Ukraine PENEZHKOVOYE LLC: Creditors Must File Claims by October 22 ---------------------------------------------------------- Creditors of Penezhkovoye LLC (code EDRPOU 24417093) have until Oct. 22, 2008, to submit proofs of claim to: Sergey Smilianets Liquidator/Insolvency Manager Gorky Str. 14 Uman 20300 Cherkassy Ukraine Tel/fax: 8(04744)40860 The Economic Court of Cherkassy commenced and bankruptcy proceedings against the company after finding it insolvent on Sept. 9, 2008. The case is docketed as 10/3988. The Economic Court of Cherkassy Shevchenko Avenue 307 18005 Cherkassy Ukraine The Debtor can be reached at: Penezhkovoye LLC Lenin Str. 1 Penezhkovoye Khristinovsky District Cherkassy Ukraine PRIOZERNOYE: Creditors Must File Claims by October 22 ----------------------------------------------------- Creditors of State Education-Research Farm Priozernoye (code EDRPOU 00489811) have until Oct. 22, 2008, to submit proofs of claim to: The Economic Court of Herson Gorkiy Str. 18 73000 Herson Ukraine The Economic Court of Herson commenced and bankruptcy proceedings against the company after finding it insolvent on July 8, 2008. The case is docketed as 5/128-B. REPAIR AND BUILDING: Creditors Must File Claims by October 22 ------------------------------------------------------------- Creditors of OJSC South Electrical Engineering Plant Subsidiary Company Repair and Building (code EDRPOU 30769078) have until Oct. 22, 2008, to submit proofs of claim to: Nikolay Krizhanovsky Liquidator Ap. 18 Kalinin Str. 125-A 73008 Herson Ukraine Tel: 8(050)318-62-65, 8(0552)31-13-17 The Economic Court of Herson commenced and bankruptcy proceedings against the company after finding it insolvent on Sept. 10, 2008. The case is docketed as 12/218-B-08. The Economic Court of Herson Gorkiy Str. 18 73000 Herson Ukraine The Debtor can be reached at: OJSC South Electrical Engineering Plant Subsidiary Company Repair and Building Pervomayskaya Str. 35 Novaya Kakhovka 74903 Herson Ukraine SOBOL LLC: Creditors Must File Claims by October 22 --------------------------------------------------- Creditors of LLC Sobol (code EDRPOU 34002901) have until Oct. 22, 2008, to submit proofs of claim to: The Economic Court of Kiev Komintern Str. 16 01032 Kiev Ukraine The Economic Court of Kiev commenced and bankruptcy proceedings against the company after finding it insolvent on Sept. 17, 2008. The case is docketed as B 11/258-08. The Debtor can be reached at: LLC Sobol Korolev Str. 4 Svetilnia Brovary District 07444 Kiev Ukraine SOKHA LLC: Creditors Must File Claims by October 22 --------------------------------------------------- Creditors of LLC Science-Production Firm Sokha (code EDRPOU 32277235) have until Oct. 22, 2008, to submit proofs of claim to: The Economic Court of Zhytomir Putiatinskiy Square 3/65 10014 Zhytomir Ukraine The Economic Court of Zhytomir commenced and bankruptcy proceedings against the company after finding it insolvent on Sept. 4, 2008. The case is docketed as 3/142-b. The Debtor can be reached at: LLC Science-Production Firm Sokha October Str. 1 Pavelki Andrushevka District 13442 Zhytomir Ukraine TOOL PRODUCTION: Creditors Must File Claims by October 22 --------------------------------------------------------- Creditors of OJSC South Electrical Engineering Plant Subsidiary Company Tool Production (code EDRPOU 30769111) have until Oct. 22, 2008, to submit proofs of claim to: Nikolay Krizhanovsky Liquidator Ap. 18 Kalinin Str. 125-A 73008 Herson Ukraine Tel: 8(050)318-62-65, 8(0552)31-13-17 The Economic Court of Herson commenced and bankruptcy proceedings against the company after finding it insolvent on Sept. 10, 2008. The case is docketed as 12/220-B-08. The Economic Court of Herson Gorkiy Str. 18 73000 Herson Ukraine The Debtor can be reached at: OJSC South Electrical Engineering Plant Subsidiary Company Tool Production Pervomayskaya Str. 35 Novaya Kakhovka 74903 Herson Ukraine UKRAINIAN BUILDING: Creditors Must File Claims by October 22 ------------------------------------------------------------ Creditors of LLC Ukrainian Building Investment 2010 (code EDRPOU 33456157) have until Oct. 22, 2008, to submit proofs of claim to: The Economic Court of Kiev Komintern Str. 16 01032 Kiev Ukraine The Economic Court of Kiev commenced and bankruptcy proceedings against the company after finding it insolvent on Sept. 17, 2008. The case is docketed as B 11/256-08. The Debtor can be reached at: LLC Ukrainian Building Investment 2010 Korolev Str. 4 Svetilnia Brovary District 07444 Kiev Ukraine * ODESSA: S&P Puts B+ Credit Rating on WatchNeg Over Growing Risks ------------------------------------------------------------------ Standard & Poor's Ratings Services has placed its 'B+' long-term issuer credit and 'uaA+' Ukraine national scale ratings on the City of Odessa, on the Black Sea coast of southern Ukraine, on CreditWatch with negative implications. "The CreditWatch placement reflects the increased potential risks related to the safety of Odessa's deposits earmarked for 2008 debt service, which are placed in several unrated local banks," said S&P's credit analyst Boris Kopeykin. "In addition, the city has contravened its reserves policy by using for general expenses a small portion of the deposits previously earmarked for debt service only." The city's overall reserves still exceed debt service until the end of the year by 1.5x. However, two recent events make us more concerned about the city's ability to ensure the timely withdrawal of its Ukrainian hryvnia (UAH)68 million (US$13 million) deposits held in local banks for its upcoming bond repayment (the city has to repay UAH70 million on its bonds on Dec. 31): -- The National Bank of Ukraine's Oct. 13 decision to place a moratorium on the early redemption of term deposits; and -- The effect of the ongoing international market turbulence on the financial and commercial profiles of Ukrainian banks, and the consequent increasing pressure on their asset quality, liquidity, and funding. S&P will resolve the CreditWatch placement after it obtains certainty that the city will have access to enough free cash to repay its bonds coming due on Dec. 31. "If the city experiences difficulties accessing its cash deposits, and/or its overall cash levels fall below debt service, we would likely lower the ratings," said Mr. Kopeykin. * UKRAINE: Rising Deficits Cue S&P to Put Low-B Ratings on Watch ---------------------------------------------------------------- Standard & Poor's Ratings Services has placed the following ratings on Ukraine on CreditWatch with negative implications: its 'B+/B' foreign currency and 'BB-/B' local currency sovereign credit ratings on its global scale; and its 'uaAA' ratings on its national scale. A resolution of the CreditWatch action is likely this month pending further clarification of the government's strategy in addressing the intensifying stresses in Ukraine's financial sector, which could require capital injections from the government. S&P is in the process of assessing these potential fiscal costs and the impact of weakened growth prospects on the budgetary position of the government. "The CreditWatch placements reflect our concerns over the impact of a deteriorating economic situation and associated exchange-rate depreciation on the country's financial sector asset quality, especially in light of its high level of private sector foreign currency borrowing, equivalent to 35% of GDP. The current account deficit increased sixfold in U.S. dollar terms during the first half of 2008 to US$6.8 billion (an estimated 7% of GDP), but this figure is likely to shrink markedly during the remainder of 2008 and into 2009 as Ukraine faces a sudden stop in external financing," said S&P's credit analyst Frank Gill. High short-term financing needs will remain -- Ukraine's gross external financing requirements (current account balance, amortization of long-term external debt, and stock of short-term external debt) will be 147% of international reserves over the next 12 months. A reversal in terms of trade is also underway, complicating the outlook for growth in the midst of an evolving electoral cycle. The Ukrainian government is in talks with the International Monetary Fund to negotiate an arrangement that could provide long- term support for its economy. "We expect to resolve the CreditWatch placement this month, as terms of the IMF deal and any associated foreign currency funding become clear," added Mr. Gill. * S&P Puts Ratings on 6 Ukrainian Governments Under Negative Watch -----------------------------=------------------------------------ Standard & Poor's Ratings Services has placed its ratings on six rated Ukrainian local and regional governments (LRGs) on CreditWatch negative following a similar action on the sovereign. These entities include Kyiv, Lviv, Dnipropetrovsk, Ivano- Frankivsk, Lugansk, and the Autonomous Republic of Crimea. The city of Odessa (B+/Watch Neg/--) remains on CreditWatch negative where it was placed on Oct. 15, 2008. "We will resolve the placement of the six LRGs on CreditWatch following the resolution of the CreditWatch on Ukraine. The ratings on the LRGs will be affected if any downside action on the sovereign takes place following the CW resolution," said S&P's credit analyst Boris Kopeykin. "Regarding Odessa, we also need to be certain that the city will have access to enough free cash to repay its bonds, which mature on Dec. 31, 2008. If the city experiences difficulties accessing its cash deposits, and/or its overall amount of cash falls below debt service levels, we would likely lower the ratings," Mr. Kopeykin added. =========================== U N I T E D K I N G D O M =========================== AERCO LTD: S&P Drops Rating on Class A-3 Notes to 'BB' ------------------------------------------------------ Standard & Poor's Ratings Services has lowered its rating on the class A-3 notes issued by AerCo Ltd. to 'BB' from 'BBB-' and affirmed its 'A-' rating on the class A-4 notes. At the same time, S&P removed the ratings from CreditWatch negative, where they were originally placed on March 25, 2008. Additionally, S&P assigned a negative outlook to the class A-3 notes. The outlook on the class A-4 notes is stable. In addition to accounting for historically higher fuel prices and the slowing global economy, the downgrade of the class A-3 notes primarily reflects S&P's view of ongoing value declines in the transaction's portfolio (as the value of the portfolio is an indicator of future lease revenues) and the payment priority mechanisms within the structure. Like other aircraft securitizations that were originated in the late 1990s to early 2000s, the fleet in the AerCo Ltd. transaction has a significant concentration of older aircraft that were designed in the 1980s, some of which, in S&P's view, are likely to become economically obsolete earlier than originally anticipated. The weighted average age of the fleet in the AerCo Ltd. transaction, which was issued in 2000, is approximately 16 years. These planes (which include older B737s and MD80s) are less fuel efficient than newer models, which has led S&P to adjust its useful life and depreciation assumptions. Furthermore, S&P believes the slowing global economy and the likelihood of a recession in the U.S. will continue to put additional pressure on the airline industry, and in its view, lessen the credit quality of lessees contained in the securitization pool. In evaluating this transaction, S&P used the same methodology in its analysis and initial rating of previous aircraft operating lease pool securitizations. As part of this analysis, S&P reviewed various sets of cash flow stress tests designed to capture the impact of a number of risk factors and their timing on the cash flow expected to be generated by the 48 aircraft in the fleet. These cash flow stress assumptions are consistent with those applied to recent pooled aircraft asset-backed securitizations and are more conservative than those used when this transaction was originally evaluated, reflecting sector performance after 2000. Typical Cash Flow Stresses A(ii) BB(ii) ----- ------ Depression 1 start(i) Depression 2 start 2008-2012 2008-2012 Depression 3 start 2014-2017 2014-2017 Length of depression (mos) 48 48 Lessee defaults � depression 1(i) Lessee defaults � depression 2 & 3 60-65% 48-52% Lease rate decline � depression 1(i) Lease rate decline � depression 2 & 3 68-75% 38-47% Repossession/remarketing time (mos) 8-11 7-9 Lease term � depression 1(i) Lease term � depression 2 (mos) 36 36 Repossession costs (US$ mil.) 0.2-1.5 0.2-1.5 (i) At inception, S&P assumed that the securitization would experience three economic depressions. For mid-stream projections, S&P assumes that the first depression has already taken place. In these cases, S&P runs the two remaining depressions for the life of the transaction. (ii) Rating stress analysis; not indicative of the credit ratings assigned to the AerCo Ltd. notes. The A-3 notes, which were not refinanced on the expected maturity date in 2002 during adverse market conditions, have an outstanding balance of US$448.75 million. After the missed refinancing, the scheduled amortization for the A-3 notes didn't commence until early 2006. Therefore, the principal reduction of the A-3 notes will experience challenges given the current appraised value of the fleet (US$640.63 million) and S&P's forecasted cash flows generated by the planes in the securitization. The A-3 notes are ahead of their scheduled amortization, according to the base pool factors detailed in appendix A of the trust indenture. Essentially, base and extended pool factors are principal amortization schedules established by the issuer at deal inception to allocate principal among subclasses. Although the A-3 note is currently ahead of its scheduled amortization (refer to base and extended pool factors in trust indenture appendix A) and currently receives the bulk of principal, during its stressed cash flow runs, S&P expects most, if not all, available principal would be diverted to the A-4 holders to the detriment of the A-3 tranche. On the other hand, S&P affirmed its rating on the class A-4 notes, which have a significantly smaller outstanding balance (US$46.32 million) than the A-3 notes, and continue to amortize according to the base pool factors detailed in appendix A of the trust indenture. During its stressed cash flow runs, S&P expects the A- 4 notes to fall behind base or extended pool factor schedules. However, S&P also expects the structural payment mechanisms to help the principal payments to the A-4 notes ultimately "catch up." The transaction's "catch up" mechanism, along with the class' small outstanding balance, shortens the weighted average life of this tranche and ultimately enhances its ability to withstand S&P's 'A-' rating stress threshold. S&P's rating outlook for the A-3 tranche is negative and its outlook for the A-4 tranche is stable. Its rating actions and outlooks incorporate S&P's current expectations of a downturn in the global aviation market, driven by recessions or slow growth in all regions of the world, and high jet fuel prices. Still, if the downturn is materially worse than it anticipates, S&P could lower the rating on the A-3 notes further. Conversely, if the downturn turns out to meet its expectations and S&P sees the beginnings of a sustained recovery, it could revise the rating outlook for this class of securities. The stable outlook associated with class A-4 reflects its shorter weighted average life and smaller outstanding balance. BRITISH AIRWAYS: Drops Fuel Surcharge by Up to GBP13 ---------------------------------------------------- British Airways dropped its fuel surcharge by as much as GBP13, starting midnight of Oct. 15, 2008. World Traveller passengers will pay GBP13 less on longer sectors and GBP10 less on shorter sectors. World Traveller Plus passengers will pay GBP6.50 less on longer sectors and GBP5 on shorter sectors. The changes will mean: -- For World Traveller, the surcharge for long haul flights of more than nine hours will drop by GBP13 per flight from GBP109 per flight to GBP96 per flight. -- The surcharge for long haul flights of less than nine hours will drop by GBP10 per flight from GBP78 per flight to GBP68 per flight. -- For World Traveller Plus, the surcharge for long haul flights of more than nine hours will drop by GBP6.50 per flight from GBP121 per flight to GBP114.50. -- The surcharge for long haul flights of less than nine hours will drop by GBP5 per flight from GBP88 per flight to GBP83 per flight. About British Airways Headquartered in Harmondsworth, England, British Airways Plc -- http://www.ba.com/-- operates of international and domestic scheduled and charter air services for the carriage of passengers, freight and mail, and provides of ancillary services. The British Airways group consists of British Airways plc and a number of subsidiary companies including in particular British Airways Holidays Ltd. and British Airways Travel Shops Ltd. BA has offices in India and Guatemala. * * * British Airways Plc continues to carry a "Ba1" senior unsecured debt rating from Moody's with a stable outlook. GREGOR SHORE: Calls in Administrators from Deloitte and Touche -------------------------------------------------------------- Gregor Shore has gone into administration. Messrs. John Reid and Patrick Lannagan, of Deloitte and Touche, were appointed joint administrators, Erikka Askeland and Lindsay McIntosh of Scotsman report. The company said, "Due to the material downturn in the housing market, Gregor Shore has been suffering severe cash-flow problems and the directors concluded they had no other option than to appoint administrators." Gregor Shore -- http://www.gregorshore.co.uk/-- is a luxury property developer on the coast of Leith. The company employs 120 personnel. KAUPTHING SINGER: Liquidator In Talks with Potential Buyers ----------------------------------------------------------- Michael Simpson, the provisional liquidator of Kaupthing Singer and Friedlander (Isle of Man) Ltd. (KS&FIOM), on Tuesday said he has entered preliminary negotiations with parties interested in purchasing parts of the business, and has instructed lawyers in London and Iceland to assist him in attempting to receive assets of the bank currently held in those locations. According to IOM Today, there have been at least three expressions of interest from other banking institutions. Provisional Liquidation Order On Oct. 9, 2008, the Isle of Man Court made a provisional liquidation order in relation to KS&FIOM. Subsequently, Mr. Simpson of PricewaterhouseCoopers was appointed as provisional liquidator of the bank. Suspension of Banking License On Oct. 8, 2008, The Isle of Man Financial Supervision Commission suspended KS&FIOM's banking license, accordingly KS&FIOM has ceased to trade as a bank. The provisional liquidation is necessary because of the bank's financial position and to ensure that the best interests of customers and creditors are served. Operations Mr. Simpson said the purpose of the liquidation order is to seek to ensure the best long term solution can be adopted for customers and creditors. He stated KS&FIOMw ill continue to manage its current loan book and the provisional liquidator will be seeking to find purchasers for the bank's business and loan book to maximize recovery for customers and creditors. He added the existing mortgage/loan agreements of borrowers remain in place, the repayment profile of your mortgage/loans is not being changed and borrowers are not being expected to refinance elsewhere. He stressed borrowers should continue to make payments in the usual way. Mr. Simpson disclosed the directors are still the directors of KS&FIOM, however the provisional liquidator is ultimately responsible for the bank. However, he noted the directors and existing management structure will remain in place and the directors and their existing management team will be assisting the provisional liquidator with the day-to-day operations. About Kaupthing Singer & Friedlander (Isle of Man) Kaupthing Singer & Friedlander (Isle of Man) Ltd. -- http://www.kaupthingsingers.co.im/-- is the UK subsidiary of Iceland-based Kaupthing Bank hf. LE FROG BISTRO: Calls in Begbies Traynor as Administrators ---------------------------------------------------------- Le Frog Bistro has gone into administration. Following the collapse of its owner, Wolfteam Limited, the company has called in administrators from Begbies Traynor, Dominic Walsh of timesonline reports. Begbies Traynor in turn has utilized the services of Christie & Co., a property agent, to sell all 5 of Le Frog's outlets. LEHMAN BROTHERS: Hedge Funds Await UK Unit's US$65BB Frozen Assets ------------------------------------------------------------------ Richard Baker, the head of the US Managed Funds Association (MFA), one of America's biggest hedge fund industry groups, has warned that a failure to free up assets frozen in Lehman Brothers Holdings, Inc.'s could trigger "systemic" losses, Times Online's Suzy Jagger writes. The Wall Street Journal says administrator PricewaterhouseCoopers confirmed Wednesday that when Lehman's main European unit, Lehman Brothers International (Europe), entered administration last month, it took with it US$65 billion in client assets, made up of US$45 billion in long positions and US$20 billion in short holdings. Delays could be "disastrous for UK plc," Mr. Baker said in a letter to Mervyn King, Governor of the Bank of England, noting that the handling of the wind-up of Lehman Brothers and the carving up of its remaining assets is adding new uncertainty to already panicky global markets, Times Online relates. In the letter cited by Times Online, Mr. Baker explained that releasing the bank's securities would give the market "a much needed boost of liquidity and confidence." Margin Calls Tom Cahill of Bloomberg News reports that Lehman Brothers' hedge- fund clients may have to pay more collateral on the frozen assets as the value of the securities continues to fluctuate along with the markets, a process known as a margin call. Lehman's London-based prime brokerage has about 3,500 active clients including hedge funds that own about US$45 billion in securities, Steven Pearson at PricewaterhouseCoopers told Bloomberg News in an interview. Hedge funds relied on Lehman to provide loans, clear trades and handle administrative tasks. According to Bloomberg News, MKM Longboat Capital Advisors LLP will shutter its US$1.5 billion Multi-Strategy fund in part because assets are stuck at Lehman while Olivant Ltd., run by ex- UBS AG President Luqman Arnold, said this month it can't access a 2.78% UBS stake it held through Lehman. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com-- is the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Through its team of more than 25,000 employees, Lehman Brothers offers a full array of financial services in equity and fixed income sales, trading and research, investment banking, asset management, private investment management and private equity. Its worldwide headquarters in New York and regional headquarters in London and Tokyo are complemented by a network of offices in North America, Europe, the Middle East, Latin America and the Asia Pacific region. The firm, through predecessor entities, was founded in 1850. Lehman filed for chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. The September 15 Chapter 11 filing by Lehman Brothers Holdings, Inc., does not include any of its subsidiaries. Subsidiary LB 745 LLC, submitted a Chapter 11 petition on September 16 (Case No. 08-13600). The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Luc A. Despins, Esq., and Wilbur F. Foster, Jr., Esq., at Milbank, Tweed, Hadley & Mccloy LLP, in New York, and Paul Aronzon, Esq., and Gregory A. Bray, Esq., at Milbank in Los Angeles, California, represent the official unsecured creditors committee. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd., LB Holdings PLC and LB UK RE Holdings Ltd. These are currently the only UK incorporated companies in administration. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on Sept. 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. The two units of Lehman Brothers Holdings, Inc., which have filed for bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of New York, have combined liabilities of JPY4 trillion -- US$38 billion). Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Akio Katsuragi, a former Morgan Stanley executive, runs Lehman's Japan units. Lehman Brothers Asia Limited, Lehman Brothers Securities Asia Limited and Lehman Brothers Futures Asia Limited have suspended its operations with immediate effect, including ceasing to trade on the Hong Kong Securities Exchange and Hong Kong Futures Exchange, until further notice. The Asian units' asset management company, Lehman Brothers Asset Management Limited, will continue to operate on a business as usual basis. A further notice concerning the retail structured products issued by or arranged by any Lehman Brothers group company will be issued as soon as possible, a press statement said. * * * As reported by the Troubled Company Reporter on Oct. 14, 2008, Moody's Investors Service downgraded the Counterparty Ratings of Lehman Brothers Financial Products Inc. and Lehman Brothers Derivative Products Inc. from Baa3 with direction uncertain to B1 on review for downgrade. NORTHERN ROCK: Reports Encouraging Progress Against Plan -------------------------------------------------------- Northern Rock plc continues to make good progress towards achieving the objectives set out in its Business Plan approved in March 2008. Ron Sandler, Chairman, said, "I am pleased with the progress Northern Rock is making. We have continued to repay the Government loan well ahead of plan, our deposit base is growing, our restructuring program has been completed successfully, and a new and stronger management team is now in place. These are encouraging developments. However, dislocated financial markets and falling house prices mean that the pace of progress achieved to date will be significantly more challenging to maintain going forward." Repayment of Government Loan The initial priority of the Plan is repayment of the Government loan and Northern Rock is repaying the loan well ahead of target. At Sept. 30, 2008, the net balance outstanding on the loan stood at GBP11.5 billion (Dec. 31, 2007: GBP26.9 billion; June 30, 2008: GBP17.5 billion), a reduction of GBP15.4 billion since the start of the year. The net loan amount is stated after the deduction of Northern Rock's liquidity deposits held with the Bank of England of GBP7.1 billion at Sept. 30, 2008 (June 30, 2008: GBP3.5 billion). The Company's success in repaying the Government loan has been achieved primarily through its mortgage redemption program, providing assistance to customers to access new products with alternative lenders. This program will continue, although the Company anticipates that it will be more challenging in the future to maintain the 2008 redemption levels, given the significant slowdown in the housing market and reduced availability of alternative mortgage financing. As the Company announced in its Half Year Results for 2008, the Bank of England loan facilities were novated to HM Treasury during August. Funding Northern Rock has continued to attract new retail deposits in the third quarter, with total retail funding balances rising to GBP17.2 billion at the end of Sept. 2008, an increase of GBP3.0 billion since the end of June. UK retail deposits represent GBP15.5 billion of this total. The Company has committed that it will not take unfair advantage of Government support while in receipt of State aid and remains within its self-imposed Competitive Framework. This includes undertakings to avoid market-leading products and to limit Northern Rock�s share of UK retail deposit balances to 1.5%. As a consequence of the turmoil in financial markets, the rate of retail deposit inflows to Northern Rock increased markedly during Sept. In response, the Company has taken a number of actions in recent weeks to uphold its competitive commitments. These include withdrawing a number of key products, lowering savings rates and introducing caps on the size of new deposits. The Company will continue to monitor the situation and will take action as necessary to ensure that it remains compliant with the Framework. No breach of the Framework has occurred since its introduction at the end of March. Non-retail funding balances continue to reduce as the balance sheet contracts as planned. In July 2008, Northern Rock resumed new wholesale funding albeit on a modest scale, reflecting market conditions and the Company's intention to achieve a more balanced mix of retail and non-retail funding. Since the resumption, GBP927 million of new wholesale funds have been raised. Credit Quality The deterioration in economic and market conditions has resulted in mortgage arrears increasing for Northern Rock, and the sector as a whole. In addition, the reduction in the size of Northern Rock�s total mortgage book has contributed to an increase in the proportion of the book in arrears. At the end of Sept. 2008, residential arrears over three months were 1.87%, compared with 1.18% at the end of June 2008. The arrears figure on Together loans, which is included in the above, has continued to increase at a faster rate than non-Together loans. Together loans also accounted for the majority of the property possessions during the third quarter. The Company�s possessions stock increased to 4,201 at the end of Sept. 2008 (end-June 2008: 3,710). Northern Rock is continuing to strengthen its debt management capabilities, including recruitment of new management and staff, redesign of core strategies and investment in new systems. Notwithstanding these actions, the trends outlined above are anticipated to continue, resulting in further expected increases in the Company�s loan loss provisions going forward. Organization At the end of August, Northern Rock completed its formal redundancy consultation process and now employs around 4,500 staff, a reduction of approximately 1,500 from the start of the process. This reduction was achieved with no operational disruption or erosion of customer service. The Company worked hard to minimize the number of compulsory redundancies as part of this process and managed to redeploy over 600 staff into new roles within the business. It continues to work closely with the Regional Development Agency, One NorthEast, to offer comprehensive outplacement support services to help those made redundant find alternative employment. As part of the restructuring, Northern Rock has reorganized its business operations to support the delivery of its key objectives, including a significant enhancement of its risk and control environment. Northern Rock has completed the introduction of its company-wide incentive scheme as set out in the Plan. This scheme was designed alongside the Plan in March, although its introduction was deferred until the restructuring program had been completed. It applies to all staff at Northern Rock, subject to certain qualification criteria, and delivers rewards based upon the Company achieving its core Plan objectives. The Company has also taken a number of steps to strengthen significantly the management team. Mr. Gary Hoffman joined the Company as Chief Executive on Oct. 1, 2008. He leads a substantially reconstituted Executive team with some key new external appointments, including Chief Risk Officer, HR Director and Director of Debt Management. Governance The Board has been further strengthened in recent weeks by the appointments of Messrs. Kent Atkinson, Richard Coates and Bob Davies as Non-Executive Directors. These appointments bring valuable further experience to the Board and will provide considerable assistance to the Company as it proceeds towards delivery of the Plan. On Sept. 7 and Sept. 30, 2008, respectively, Messrs. Andy Kuipers and Stephen Hester resigned from the Board. Following Mr. Hester�s departure, Mr. John Devaney has been appointed Chair of the Company's Remuneration Committee. Mr. Simon Laffin has confirmed his intention to step down from the Board on Dec. 31, 2008, at which time he will also cease to be Chair of the Audit Committee, and will be replaced in this role by Mr. Atkinson with effect from Jan. 1, 2009. A review of the conduct of the previous Board in respect of funding and liquidity has been undertaken with the assistance of external advisors, Freshfields and KPMG Forensic. The Board has concluded that there are insufficient grounds to proceed with any legal action for negligence against the former Directors, and has no intention of bringing any such action. The Board has also completed a similar review in respect of the Company�s auditors and has determined that no action is warranted. Outlook As set out in the Company's Plan in March 2008 and reported for the first six months of the year, Northern Rock will be significantly loss-making in 2008, due to one-off restructuring costs, higher funding costs and the deteriorating credit environment. The extremely difficult housing and mortgage market conditions which have emerged in recent months will make the Company's achievement of its objectives more challenging going forward. Notwithstanding these conditions, however, the Company's progress to date is encouraging. The balance sheet continues to contract, retail savings balances continue to grow, the loan to the Government is being repaid rapidly, the restructuring of the organization has been satisfactorily concluded, and a new, high quality management team has been recruited. As announced in August, HM Treasury has committed to reinforce the Company's capital base through conversion into Ordinary shares of its holding of GBP400 million of Preference shares and swapping up to GBP3 billion of the outstanding debt into equity. These measures will not involve any cash transfer to Northern Rock. The Company is working with HM Treasury to finalize the package and obtain State aid approval. Over time the emphasis of the Plan will shift from repaying the government loan towards restoring profitability to allow, in due course, the lifting of the Government's deposit guarantees and the return of the Company to private ownership. About Northern Rock Headquartered in Newcastle upon Tyne, England, Northern Rock plc -- http://www.northernrock.co.uk/-- deals with mortgages, savings accounts, loans and insurance. The company also promotes secured loans to its existing mortgage customers. The company had more than US$200 billion in assets at the end of June 2007. * * * Northern Rock plc continues to carry a B1 subordinated debt rating, a B3 junior subordinated rating, a C preferred stock rating and an E+ bank financial strength rating from Moody's with developing outlook. The bank still carries an 'F' individual rating from Fitch. OXFORD UNIVERSITY: Losses GBP30 Mil. on Icelandic Banking Crisis ---------------------------------------------------------------- The University of Oxford faces losses of up to GBP30 million after becoming yet another public body to admit it had money trapped, The Telegraph reports. According to the report, the Audit Commission refused to deny that it had up to GBP10 million frozen in Reykjavik, while a spokesman said he is "not in a position to confirm anything at the moment." The disclosure, The Telegraph says, will be a blow to its credibility and will help the defense of councils and other public authorities who argue that their decision to save in Iceland was not irresponsible. The commission Web site declares that it aims to drive "economy, efficiency and effectiveness in local public services to deliver better outcomes for everyone," the report notes. The disclosure came as savers and councils were told they may be able to recover only a third of trapped deposits. The size of Oxford's stranded deposits eclipses those of other universities, including Cambridge, Manchester and the Open University, which have also been blocked from access to funds, according to the report. The Local Government Association, The Telegraph relates, said about GBP300 million frozen in British bank branches could be released sooner than it expected. But another GBP558 million was stuck in Iceland, and recovery was likely to be a slow process. Oxford said it had GBP30 million in three banks, Landsbanki, Glitnir and Kaupthing Singer and Friedlander, representing five per cent of its cash deposits. Some belonged to 17 of Oxford's individual colleges, which put money in a central fund controlled by the university finance committee. A spokesman said colleges would be fully reimbursed � leaving the university to carry the financial burden. Giles Kerr, Oxford's director of finance, said students and academics would not suffer. But it comes as a blow to the institution as it struggles to compete with the financial muscle of Ivy League universities in the US. Oxford, based on the report, has GBP600 million in cash deposits and an annual turnover of more than GBP600 million. It also has an overall endowment wealth of around GBP3.4 billion. But its Icelandic investments dwarf those of other universities. At least 12 universities have GBP77 million in the country's banks, The Telegraph notes. Cambridge placed GBP11million (3% of its cash deposits), Manchester Metropolitan invested GBP10 million, the Open University GBP6.5 million, Manchester University GBP5 million and Glyndwr University, Wrexham, has up to GBP3 million in frozen accounts. Councils stand to lose at least GBP858 million in Icelandic banks, The Telegraph reveals. But the LGA said authorities may be able to recover a third of taxpayers' funds within several weeks. The Telegraph writes that emergency finance teams have gone into three councils facing the biggest losses, including Uttlesford, in Essex, and Wyre Forest, in Worcestershire. A spokesman for Uttlesford said services would not be affected, though it had GBP2.2 million in Landsbanki. Wyre Forest council in Kidderminster, had GBP9 million in three Icelandic banks but said there was no immediate concern over services. Oxford University's Release on Exposure to Icelandic Banking Crisis The University of Oxford said it welcomed the engagement of the Higher Education Funding Council for England (HEFCE) in the issue of the higher education sector�s exposure to the Icelandic banking crisis. The University's Director of Finance has written to HEFCE urging it to do all in its power to help protect the higher education sector from the impact of the crisis. The Director of Finance, Giles Kerr, sent the letter to HEFCE, which is the regulator of universities in England, following extensive consultations. He said: "It is important that we get co-ordinated action and I know that HEFCE, DIUS and the Treasury are well aware of the challenges faced by the sector. We expect them to do all they can to protect the position of higher education institutions, which are vital to the country's future prosperity." The University's own exposure in Iceland is about five per cent of its overall cash pool, which in itself represents only a small part of the collegiate University's overall wealth. Mr. Kerr said he had contacted colleges who had money in the University cash pool to explain the position. Mr. Kerr said that colleges should be assured that the University's cash pool has more than sufficient liquidity to meet their requirements. He also said that the University will make every effort to recover deposits in Iceland in full. Mr. Kerr added: "This is clearly a difficult time across the economy, and no-one is immune. However, the finance committee is monitoring the situation closely and we are taking all necessary and available steps." The University has made no Icelandic deposits in the last 18 months. The existing ones were made with institutions with fully assessed and approved creditworthiness. Iceland was rated AAA (the highest credit rating) at the time the investments were made. The fixed-term contracts have maturity dates between next month and next June. University policy has been, and is, to have a wide a portfolio of deposits in order to spread risk, and to review them regularly. About the University of Oxford The University of Oxford aka Oxford University or Oxford, -- http://www.ox.ac.uk/-- located in the city of Oxford, Oxfordshire, England, is the oldest university in the English- speaking world. It is also regarded as one of the world's leading academic institutions. The name is sometimes abbreviated as Oxon. in post-nominals (from the Latin Oxoniensis), although Oxf is sometimes used in official publications. The University has 38 independent colleges, and 6 permanent private halls. The University of Oxford is a member of the Russell Group of research- led British universities, the Coimbra Group (a network of leading European universities), the League of European Research Universities, International Alliance of Research Universities and is also a core member of the Europaeum. Academically, Oxford is consistently ranked in the world's top 10 universities. For more than a century, it has served as the home of the Rhodes Scholarship, which brings highly accomplished students from a a number of countries to study at Oxford as postgraduates. STORM FUNDING: Appoints Joint Administrators from PwC ----------------------------------------------------- Anthony Victor Lomas, Steven Anthony Pearson, Dan Yoram Schwarzmann and Michael John Andrew Jervis of PricewaterhouseCoopers LLP were appointed joint administrators of Storm Funding Ltd. (Company Number 2682306) and Marble Commercial Funding Ltd. (Company Number 2682316) on Sept. 24, 2008. The company can be reached at: Storm Funding Ltd. 25 Bank Street London E14 5LE England SWANSONS LTD: Brings in Joint Administrators from Deloitte ---------------------------------------------------------- Richard Michael Hawes and Robin David Allen of Deloitte & Touche LLP were appointed joint administrators of Swansons (Lighting and Electrical) Ltd. (Company Number 03644433) on Oct. 1, 2008. The company can be reached at: Deloitte & Touche LLP Blenheim House Fitzalan Court Newport Road Cardiff CF24 0TS England TAG ENVIRONMENTAL: Calls in Administrators from Tenon Recovery -------------------------------------------------------------- David Willis and Jonathan Philmore of Tenon Recovery were appointed joint administrators of Tag Environmental Ltd. (Company Number 04367992) on Sept. 26, 2008. The company can be reached at: Tag Environmental Ltd. c/o Tenon Recovery Suite 5c Tower House Business Centre Fishergate York YO10 4UA England TURKEY REALESTATE: Taps Moore Stephens to Administer Assets ----------------------------------------------------------- Simon Geoffrey Paterson and David Ronald Elliott of Moore Stephens LLP were appointed joint administrators of Turkey Realestate Direct Ltd. (Company Number 05130339) on Oct. 2, 2008. The company can be reached at: Turkey Realestate Direct Ltd. Victory House Quayside Chatham Maritime Kent ME4 4QU England VIRGIN MEDIA: Seeks Amendments to Senior Facilities Agreement ------------------------------------------------------------- Virgin Media Inc. is seeking the consent of its senior lenders to amendments to its senior facilities agreement which would, alongside other changes, roll back bank amortization payments owed to participating lenders to June 2012. Virgin Media's top ten relationship banks have unanimously confirmed their support for the proposed amendments. Background to and Reasons for Amendment Request Virgin Media's senior facilities agreement currently comprises GBP4,324 million of term loans in A, B and C tranches, in addition to a GBP100 million revolving facility. The company has already repaid approximately GBP900 million of its indebtedness under its senior facilities agreement from cash generated from its operations and from the proceeds of subordinated indebtedness since March 2006. The company is on track to meet its debt obligations in the near term and expects to fund its next material amortization payment, due in Q1 2010, from available cash generated from its operations. Virgin Media originally anticipated entering into a new credit facility by mid 2009 to refinance its obligations under its senior facilities agreement. However, in light of the disruption to the credit markets, the company has decided to proactively address its amortization payments that are due in 2010 and 2011. The proposed amendments will allow Virgin Media significantly more time to seek a complete refinancing of the principal amounts that will remain outstanding under its senior facilities agreement after the amendment process is complete. Virgin Media has brought in a new experienced management team that is focusing on the core strengths of the business and maximizing the generation of cash flow. The company has also recently expanded its Board with the addition of five new directors with significant relevant experience. By seeking the amendments today, Virgin Media aims to remove any potential future concerns that might otherwise arise over its ability to meet its principal amortization obligations, thereby permitting its management to focus on continuing to enhance operations and grow cashflow over the next three years. Virgin Media therefore is requesting amendments that it believes are in the best interest of its customers, stockholders, lenders, employees and other stakeholders in light of the current status of the credit markets. The Proposed Amendments The principal aims of the proposed amendments to Virgin Media's senior facilities agreement are to: (i) defer the remaining amortization payments and the final maturity date of the A tranches and the final maturity date of the revolving facility until June 2012; (ii) obtain agreement of the lenders under the B tranches to relinquish their pro rata right to prepayments until the A tranches are repaid, in order to enable greater paydown of remaining amortization payments under the A tranches; (iii) permit additional high yield debt offerings with the net proceeds being applied to repay indebtedness under the senior facilities agreement; (iv) provide flexibility to add tranches to the senior facilities agreement that will have a maturity no earlier than the final maturity of the B tranches to be used to facilitate any additional refinancing under the senior facilities agreement; (v) relax the leverage and interest coverage financial covenants and adjust definitions to accommodate, among other things, the impact of increased interest expense and other effects of these proposed amendments to the senior facilities agreement; and (vi) add an additional debt basket for tax-related financings to be used to repay debt under the senior facilities agreement. The changes to the amortization schedule of the A tranches and the final maturity date of the revolving facility, as well as the relaxation of the financial covenant ratios, are conditional upon Virgin Media's repayment of at least 20% (approximately GBP415 million) of the amounts currently outstanding under the A tranches to those lenders. The company will have until the later of April 30, 2009 and six months after the effective date of the proposed amendments, subject to a further three-month extension right, to satisfy this repayment condition. Virgin Media must also make simultaneous payments to those B lenders who have not consented to relinquish their pro rata right to prepayments when it makes repayments under the A tranches. Virgin Media anticipates using cash generated from operations and cash on its balance sheet, supplemented by potential proceeds from debt offerings or other sources, to meet this repayment condition. The proposed amendments require the consent of two-thirds of all lenders under the senior facilities agreement as well as the consent of two-thirds of all lenders other than the lenders under the C tranche. Additionally, each lender under the A tranches and the revolving facility must individually consent to the changes to the amortization schedule of the A tranches and the final maturity date of the revolving facility and each lender under the B tranches must individually consent to the change to their pro rata right to prepayments in order for those provisions to be effective with respect to that lender. No minimum acceptance rate is required for those individual consents, and lenders who do not consent will continue to be subject to the current payment and repayment provisions governing the A and B tranches and the revolving facility. After giving effect to the proposed amendments (assuming that 100% of the lenders under the A and B tranches give their consent as outlined above), Virgin Media's first amortization payment would not be due until June 2012, after giving effect to the 20% paydown of the A tranches. The deadline for lenders to respond to the amendment request is October 31, 2008. In connection with the amendment request, Virgin Media will pay a fee to each lender who consents to the proposed amendments in an amount equal to 0.25% of the total participation of such lender. In addition, Virgin Media will pay a fee to each lender under the A and B tranches and revolving facility who individually consents to be subject to the new provisions governing those tranches (amendments (i) and (ii) above) in an amount equal to 1.00% of the amount of that lender's participation in those tranches. The total amount of fees can be up to approximately GBP70 million. Additionally, the lenders who individually consent to the new provisions governing the new A tranches and revolving facility will enjoy a margin increase of 1.375% compared to the margins on the existing A tranches and revolving facility, and the lenders who individually consent to the new provisions governing the new B tranches will enjoy a margin increase of 1.50% compared to the margins on the existing B tranches. A copy of Virgin Media's letter requesting the consent of its senior lenders to the proposed amendments to its senior facilities agreement is available on the company's Web site at www.virginmedia.com/investors. Neil Berkett, Chief Executive of Virgin Media, said, "Virgin Media has never been in better operational shape and generates significant cashflow. These amendments to our senior facilities, if approved, will enhance our financial flexibility and allow management to focus on continuing to enhance operations and grow cashflow. "We believe that these amendments are in the best interest of customers, stockholders, lenders, employees and other stakeholders in light of the current status of the credit markets." About Virgin Media Headquartered in London, England, Virgin Media Inc. (fka NTL Inc.) (NASDAQ: VMED) -- http://virginmedia.com/-- provides broadband, digital television, telephony, content and communications services, reaching over 50% of the U.K. homes and 85% of the U.K. businesses. * * * Virgin Media continues to carry a Ba3 corporate family rating from Moody's Investors Service with negative outlook. The company still carries a 'B+' long-term corporate credit rating from Standard & Poor's with positive outlook. The company also carries Fitch's 'BB-' long-term issuer default rating and 'B' short-term issuer default rating with stable outlook. VIRGIN MEDIA: Fitch Affirms LT Issuer Default Rating at 'BB-' ------------------------------------------------------------- Fitch Ratings affirmed Virgin Media Inc.'s Long-term Issuer Default Rating at 'BB-' with a Stable Outlook and Short-term IDR at 'B', following its announcement that it is seeking amendments to its senior secured facilities. All instrument ratings are affirmed, as detailed at the end of this release. "Fitch views the proposed amendments to Virgin Media's bank facility as a positive step towards addressing the refinancing risk which the company will face in 2010," says Michelle De Angelis, Senior Director in Fitch's European Leveraged Finance team. "Although, in the agency's view, Virgin Media's credit profile should ordinarily have enabled an orderly refinancing of its credit facilities when the time came, recent developments in the global financial markets and the quantum of debt involved make such a wholesale refinancing uncertain in the current environment. Therefore, Virgin Media's initiative to restructure its amortization and prepayment profile is a prudent step which, if approved, would ensure a longer refinancing window for the company." The amendments proposed would, among other things, allow the company to extend the final repayment date of at least part of its amortizing Tranche A to 2012 from 2010-2011, and enable a higher proportion of prepayments to be applied against the A tranches. In return the company has offered to prepay a part of the facilities which are extended, as well as to pay amendment fees to its lenders. Fitch views the proposed amendments as a form of insurance policy against the risk that financial markets do not recover in time. As with any insurance, there is a cost to the company, but this should be weighed against the reduction in risk which is achieved. The agency believes the additional cost can be supported by Virgin Media's strong cashflows in the coming years, and therefore there would be no change to the ratings if the amendment is approved. On the other hand, if the amendment is not approved, the agency believes there still remain some other options open to Virgin Media to address the increased refinancing risk, and would look to discuss these further with the company at that time. Instrument ratings affirmed: -- Virgin Media Investment Holdings Limited senior secured bank facility: 'BB+' -- Virgin Media Finance PLC's senior unsecured notes due 2014 and 2016: 'BB' VIRGIN MEDIA: S&P's Ratings Unhurt By Proposed Amendment Requests ----------------------------------------------------------------- Standard & Poor's Ratings Services said that its ratings and outlook on U.K.-based telecommunications provider Virgin Media Inc. (VMI) and related entities (B+/Positive/--) are unchanged by the company's announcement that it has requested various amendments to the senior facilities agreement. The proposed amendments would, among other things, enable VMI to defer the three remaining amortization payments and the final maturity date under the A tranches and the final maturity date of the revolving facilities until June 2012, to issue additional high yield debt to repay the senior facilities, and to reset interest coverage and leverage ratios. S&P recognizes that such actions, if executed, would postpone material repayments until 2012 and reduce senior debt. As a result, S&P believes that the lower amount of senior debt outstanding at default might improve recovery prospects for unsecured notes and, in particular, junior lien debt, given the small size of this instrument and its sensitivity to any redemption of the contractually senior credit facilities. Rating upside for the corporate credit rating remains reliant on VMI's continuing to focus on deleveraging to below 4x adjusted total debt to EBITDA, steadily increasing both revenue and EBITDA, and generating increasing free operating cash flow. * S&P Examines Exposure of European CDO Transactions to AIG ----------------------------------------------------------- Standard & Poor's Ratings Services said that 15 European cash flow CDO transactions remain under close scrutiny following the recent rating actions (taken on Sept. 15 and Sept. 17) affecting American International Group Inc. and its affiliated entities. While S&P considers that the collateralized debt obligations (CDOs) are currently in line with its criteria, it continues to monitor the transactions closely pending clarification of the intentions of issuers and their counterparties. AIG acts as currency swap, currency option, or interest rate swap counterparty to each of these transactions: * Adagio III CLO PLC * Alpstar CLO 2 PLC * BACCHUS 2007-1 PLC * Dalradian European CLO III B.V. * DRYDEN XIV - EURO CLO 2006 PLC * DRYDEN XV - EURO CLO 2006 PLC * eleX Alpha S.A. * Harvest CLO V PLC * Hudson CLO 1 B.V. * Jubilee CDO VII B.V. * Mercator CLO II PLC * Neptuno CLO I B.V. * OCI Euro Fund I B.V. * RMF Euro CDO V PLC * Wood Street CLO V B.V. According to S&P's most recent counterparty and supporting party criteria ("Revised Framework For Applying Counterparty And Supporting Party Criteria" published on May 8, 2007): "For 'AAA' rated structured finance transactions, any counterparty rated at least 'A-1' (or 'A+' and above if it has no short-term rating) would be eligible to provide derivatives (including interest rate and currency swaps), provided it agrees to seek a replacement or guarantor and post 'additional collateral' upon becoming ineligible. Counterparties that are financial institutions will continue to be considered eligible while rated 'A-2' (or 'BBB+' to 'A' if it has no short-term rating) provided it agrees to collateralize 100% of the contract's mark-to-market. Any counterparty replacement or guarantee will be subject to rating confirmation." Cash flow CDOs arranged before May 2007 may have a minimum rating requirement of 'A-1+' for currency swap and option counterparties. However, in the listed transactions, the documentation requiring a counterparty to seek a replacement or guarantor or post collateral once it no longer satisfies the initial documented rating requirement may differ in some respects from what is envisaged in S&P's current criteria. If S&P does not receive clarification of the intentions of issuers and AIG following its recent rating action, it may place some or all of the listed transactions under review for possible downgrade. * Financial Turmoil Hits UK Retail Sales, BRC-KPMG Monitor Shows ---------------------------------------------------------------- Turmoil in financial markets hit UK retailers with sales down six months out of seven, according to the BRC-KPMG Retail Sales Monitor for September 2008. * UK retail sales values fell 1.5% on a like-for-like basis, from September 2007, when they had risen 3.0%. Sales have now been lower than a year ago in six of the past seven months, the worst since summer 2005. * Colder, wetter weather than last September hit sales but some sunny weekends helped end-of-season clearances of summer lines. * As in August, food and drink was the only sector to show sales significantly up on a year ago. Clothing and footwear remained poor. Furniture and homewares were well down on a year ago, despite continued discounts and promotions. * Turmoil in financial markets hit consumer confidence while increasing demands on household budgets meant shoppers looked for value and discounts and planned spending carefully, both for food and nonfood items. Housing market weakness continued to hit big-ticket homewares. Stephen Robertson, Director General, British Retail Consortium, said: "The financial turmoil has further undermined consumer confidence with like-for-like sales now down in six of the last of seven months. Furniture retailers suffered their worst performance for at least eight years. Food and drink sales grew with hard-pressed families focusing on value ranges. Impulse buying is disappearing as people consider purchases carefully and actively seek out promotions. If you're after a bargain it's great news as shops have responded with some of the most dramatic discounts and offers in recent times. "Retailers will be hoping customers are willing and able to spend for Christmas as an antidote to the current gloom." Helen Dickinson, Head of Retail, KPMG, said: "Despite the ongoing turmoil in global and the UK financial markets and the doom and gloom headlines, UK retail is not in freefall. The UK consumer is still spending and total retail sales were up in September on the same period a year ago. However, the trend continues in a downward direction - the growth in total sales is marginal at 1% and at like-for-like level there is a decline, which has been the case for six of the last seven months. Inflation is behind much of the growth in food, and this is the main driver of overall performance. The non-food sectors continue to suffer, with all apart from footwear showing like-for-like falls in the month. The key question now is not what has happened but what will be the impact of the current environment on sales over the crucial Christmas trading period - many will be holding their breath." Food & Drink � Joanne Denney-Finch, Chief Executive, IGD, said: "September was a month of two halves � after a couple of quiet weeks where spending on food slowed, the end of the month saw the grocery sector bounce back to produce growth on a par with August. "IGD research has shown that, despite financial worries, consumers have been able to maintain the quality of what they are eating by putting more effort into food shopping. Over the last six months shoppers have been making some changes. For example, one in five are walking to the shops more, a quarter are spending more time over their shopping trips and a fifth are doing more meal planning." About KPMG KPMG -- http://www.kpmg.co.uk/-- is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 144 countries and have more than 104,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International, a Swiss cooperative. KPMG International provides no client services. * KPMG Appoints John Griffith-Jones as EMA Region Chairman ---------------------------------------------------------- John Griffith-Jones has been appointed as Chairman of KPMG's EMA (Europe, Middle East, Africa and India) region. EMA is the largest of KPMG's three regions, comprising more than 3,000 partners and 55,000 staff in 105 countries. John, who will also continue in his role as joint Chairman of KPMG Europe LLP, said: "I am looking forward to the challenge of ensuring that KPMG continues to expand in a region that includes some of the world's fastest growing economies. "At a time when the global business environment is changing so rapidly, part of my role will be to help member firms' clients benefit from KPMG's increased international capability and increase their awareness of our services and insights. "I will also continue to maintain my focus on the UK marketplace - meeting our senior clients, regulators and opinion formers." Mr. Griffith-Jones joined KPMG in 1975, and held senior positions in the Audit and Corporate Finance practices. He was CEO of KPMG in the UK for four years, and was appointed Chairman and Senior Partner of KPMG's U.K. member firm in 2006. He takes over from Ben van der Veer, who is also retiring as the Senior Partner of KPMG's member firm in the Netherlands. He was EMA region Chairman for three years and successfully led EMA through a period of unprecedented growth and change. KPMG has also appointed Alan Buckle as head of its Global Advisory practice, which accounts for more than 30,000 professional partners and staff in KPMG member firms globally. Advisory works with clients to help them grow their businesses, improve their performance while enhancing governance and risk management. Mr. Buckle was previously Chief Executive of KPMG's Advisory practice in Europe, and led KPMG Consulting in Europe, prior to its separation and sale. His clients have included global corporates and government agencies. Mr. Buckle said: "This is a tremendously exciting time to be asked to lead KPMG�s Advisory business, with fundamental changes occurring to economies and businesses globally. The shift of industrial activity and capital flows further east and south are changing the nature of the market for advisory services � both the demand from our firms' clients and our own internal delivery models. "Key themes for the next few years will include unparalleled focus on the fastest growing Eastern markets; the completion of the integration of our mature Western practices; and harnessing the ever increasing power of technology." Tim Flynn, Chairman of KPMG International, said: "In this time of unprecedented change for businesses globally, it is critically important that KPMG continues to advance leaders who have extensive international experience. John Griffith-Jones and Alan Buckle are outstanding professionals who are well suited to lead in this rapidly changing world, and I am proud to welcome them as they join our global executive team." About KPMG KPMG -- http://www.kpmg.co.uk/-- is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 144 countries and have more than 104,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International, a Swiss cooperative. KPMG International provides no client services. * BOOK REVIEW: Distressed Investment Banking: To the Abyss and Back --------------------------------------------- Authors: Henry F. Owsley and Peter S. Kaufman Publisher: Beard Books Hardcover: 236 pages List Price: US$59.96 Own your personal copy at http://amazon.com/exec/obidos/ASIN/1587982676/internetbankrupt This new book is the definitive work on distressed investment banking by two widely acknowledged leaders in this field. Dealing with the restructuring of troubled companies, an insider's view is provided on the methods and complexities of this fascinating area of investment banking. It demystifies what investment bankers really do and conveys difficult concepts in easily understandable terms. Particular focus is directed to unconflicted advice to boards of directors interested in recoveries of shareholders. Attorneys, accountants, crisis mangers, business students, judges, and investment bankers -- as well as management and directors of distressed companies -- all will find this book of interest. ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. 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/booksto 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. Zora Jayda Zerrudo Sala, Pius Xerxes Tovilla, Joy Agravante, Melanie Pador, Marie Therese V. Profetana and Peter A. Chapman, Editors. Copyright 2008. 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$625 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 * * *