TCREUR_Public/081107.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, November 7, 2008, Vol. 9, No. 212

                            Headlines

A U S T R I A

GJEVDET SHALA: Claims Registration Period Ends Nov. 18
KRISTO LLC: Claims Registration Period Ends Nov. 23
QXR CLEANING: Claims Registration Period Ends Nov. 18
VADEX LLC: Claims Registration Period Ends Nov. 25


D E N M A R K

ROSKILDE BANK: EU Commission Approves Danish Liquidation Aid
KINGDOM OF DENMARK: S&P Sees Drop in Banking Sector Asset Quality


G E R M A N Y

BAV MASCHINENBAU: Claims Registration Period Ends November 13
BKR BAU: Claims Registration Period Ends November 12
E.T.S. GLAS: Claims Registration Period Ends November 12
ELEMENTS GMBH: Claims Registration Period Ends November 12
GROB AEROSPACE: German Unit Declared Insolvent

INDUSTRIAL SERVICES: Claims Registration Period Ends Nov. 12
SENSO WORKS: Claims Registration Period Ends November 12

* Fitch: German Municipal Companies -- Essentially a Public Risk


G R E E C E

TITAN CEMENT: S&P Cuts Rating to 'BB+/B' on Weak Metrics


I C E L A N D

GLITNIR BANKI: Auction Sets CDS Values at 3% on Senior Debt
GLITNIR BANKI: Auction Sets CDS Values at 0.125% on Sub. Debt
KAUPTHING BANK: Swedish Branch Sells Pension Unit to Employees
LANSBANKI: Auction Sets CDS Values at 0.125% on Sub. Debt
LANDSBANKI: Auction Sets CDS Values at 1.25% on Senior Debt

STRAUMUR BURDARAS: Fitch Cuts Individual Rating to 'D/E'


I T A L Y

ALITALIA SPA: Files Chap. 15 Petition to Save U.S. Assets
ITALFINANCE SECURITISATION: S&P Affirms Ratings on 2 Note Classes
TISCALI SPA: In Talks With BSkyB Regarding Sale of UK Business


K A Z A K H S T A N

AES COAL: Creditors Must File Proofs of Claim by December 12
AMANGELDY LLP: Creditors' Claims Deadline Slated for December 12
ASIATIC MANAGEMENT: Creditors' Claims Filing Period Ends Dec. 12
ENBEK-98 LLP: Creditors Must Register Claims by December 12
ENERGETIC-NS LLP: Creditors' Claims Due on December 12

REGION-MASH LLP: Creditors Must File Proofs of Claim by Dec. 12
SINERGIA LLP: Creditors' Claims Deadline Slated for December 12
TEMIR-JAYIK LLP: Creditors' Claims Filing Period Ends Dec. 12
TORESHE LTD: Creditors Must Register Claims by December 12
URALSKAYA BAZA: Creditors' Claims Due on December 12


K Y R G Y Z S T A N

IVANOVSKY MASHINOSTROITELNY: Claims Deadline Set on November 28


M A C E D O N I A

* Fitch Changes Macedonia's Outlook to Stable; Affirms IDRs at BB+


N E T H E R L A N D S

AZOVSTAL CAPITAL: Strong Price Reduction Cues Moody's B2 Rating
METINVEST B.V.: Weakening Demand Cues Moody's to Cut Rating to B1


P O R T U G A L

BANCO PORTUGUES: Fitch Downgrades Individual Rating to 'F'


R O M A N I A

SC HIDROELECTRICA: S&P Affirms 'BB' Ratings; Outlook Negative


R U S S I A

KAZANORGSINTEZ OJSC: Liquidity Concerns Cue S&P to Junk Rating
OPIN JSC: Fitch Holds IDR at 'B' & Changes Outlook to Stable
RBC OJSC: S&P Slashes Ratings to 'CCC/ruB' on Refinancing Concerns

* RUSSIA: PM Says Banking Industry Has Enough Liquidity
* Russian Gov't Measures Ease Emerging-Market Oil & Gas Pressures
* Most Rated Russian Local Gov'ts. to Withstand Economic Pressure


S W E D E N

KAUPTHING BANK: Swedish Branch Sells Pension Unit to Employees


S W I T Z E R L A N D

BREITENMOSER ISO: Creditors Must File Proofs of Claim by Nov. 15
COOLWAVE JSC: Deadline to File Proofs of Claim Set November 14
GIVING BASKET: Creditors Have Until Nov. 14 to File Claims
HR MANAGEMENT: Proofs of Claim Filing Deadline is Nov. 14
LMB LLC: Creditors' Proofs of Claim Due by Nov. 14

STARS & VIBES: Nov. 15 Set as Deadline to File Claims
WOBAG-IMMOBILIEN JSC: Creditors Must File Claims by Nov. 15
XARDAS LLC: Deadline to File Proofs of Claim Set Nov. 15


U K R A I N E

AZOVSTAL CAPITAL: Strong Price Reduction Cues Moody's B2 Rating
BUSINESS TECHNOGROUP: Creditors Must File Claims by Nov. 16
CENTRAL EUROPEAN: S&P Affirms 'BB' Ratings; Outlook Negative
INDUSTRIAL UNION: Moody's Puts B1 Rating on Review for Downgrade
INSTITUTE OF GEOPOLITICS: Creditors Must File Claims by  Nov. 16

METINVEST B.V.: Weakening Demand Cues Moody's to Cut Rating to B1
NASH #1: Creditors Must File Claims by November 16
FIKS LLC: Creditors Must File Claims by November 16


U N I T E D   K I N G D O M

ARTHRO KINETICS: In Talks to Sell Business; May Liquidate
BLUESTONE SECURITIES: S&P Puts 'BB' Rtngs on 3 Classes on WatchNeg
CASTLE HOLDCO: Liquidity Concerns Spur S&P to Junk L-T Rating
CEVA GROUP: Moody's Affirms Caa1 Rating on EUR225 Mil. Sr. Notes
GALVANIC TECHNICAL: Taps Joint Administrators from Baker Tilly

KAUPTHING SINGER: Chancellor Waves Responsibility for Deposits
KTS WIRE: Brings in Joint Administrators from KPMG
MAGELLAN RESIDENTIAL: Goes Into Administration
PIPE HOLDINGS: S&P Keeps 'B-' Rating; Outlook Neg on Market Woes
QUEST 4 FINANCE: Brings in Joint Administrators from BDO Stoy

SUNBERRY PROPERTIES: Taps Administrators from Grant Thornton
SUNSHINE FINE: Brings in Joint Administrators from PwC
TEATHERS LTD: Administrators Sell Private Client Broking Biz
TI AUTO: S&P Cuts Rating to 'CCC+'; Outlook Negative
TISCALI SPA: In Talks With BSkyB Regarding Sale of UK Business

WAGE PAYMENT: Taps Joint Administrators from BDO Stoy
WESTBRIDGE HOMES: Goes Into Administration

* Fitch: 30% UK House Price Decline to Hit Junior NC RMBS Notes
* Financial Sector Dominates Global Defaults, S&P Finds
* Consumer-Based Sectors Face a Frightening Environment, S&P Says
* S&P Sees High Recovery Prospects for Lenders in Oil Sector
* IFRS Changes Allow EUR Banks to Avoid Fair Value Accounting

* S&P Says Gov't. Support EU Banks, But Ratings Pressure Persists
* S&P Says No Funding Agreement-backed Issuance in October 2008
* Q2 Global Project Finance Ratings Remain Stable, S&P Says
* Upgrade Potential Falls To Four-Year Low, S&P Article Says
* S&P Says 786 Issuers Face Downgrade Risk, A Three-Year High

* BOOK REVIEW: Crafting Solutions for Troubled Businesses:


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A U S T R I A
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GJEVDET SHALA: Claims Registration Period Ends Nov. 18
------------------------------------------------------
Creditors owed money by LLc Gjevdet Shala (FN 218782p) have until
Nov. 18, 2008, to file written proofs of claim to the court-
appointed estate administrator:

         Katharina Twaroch-Nowak
         Gusshausstra=DFe 23
         1040 Vienna
         Tel: 505 88 31
         Fax: 505 94 64
         E-mail: kanzlei.twaroch@kainz-wexberg.at

Creditors and other interested parties are encouraged to attend
the creditors' meeting at 12:00 p.m. on Dec. 2, 2008, for the
examination of claims at:

         Land Court of Vienna
         Room 1701
         Vienna
         Austria

Headquartered in Vienna, Austria, the Debtor declared bankruptcy
on Oct. 7, 2008 (Bankr. Case No. 6 S 119/08d).


KRISTO LLC: Claims Registration Period Ends Nov. 23
---------------------------------------------------
Creditors owed money by LLC Kristo (FN 267850y) have until
Nov. 23, 2008, to file written proofs of claim to the court-
appointed estate administrator:

         Dr. Alexander Isola
         Marburger Kai 47
         8010 Graz
         Tel: 0316/833777
         Fax: 0316/833777-33
         E-mail: graz@gmp.at

Creditors and other interested parties are encouraged to attend
the creditors' meeting at 10:00 a.m. on Nov. 26, 2008, for the
examination of claims at:

         Land Court of Graz
         Room 222
         Graz
         Austria

Headquartered in Graz, Austria, the Debtor declared bankruptcy on
Oct. 16, 2008, (Bankr. Case No. 26 S 119/08g).


QXR CLEANING: Claims Registration Period Ends Nov. 18
-----------------------------------------------------
Creditors owed money by LLC QXR Cleaning Products (FN 273481d)
have until Nov. 18, 2008, to file written proofs of claim to the
court-appointed estate administrator:

         Dr. Katharina Widhalm-Budak
         Favoritenstrasse 22/12a
         1040 Vienna
         Tel: 504 64 08
         Fax: 504 64 08 22
         E-mail: widhalm-budak@mitrecht.com

Creditors and other interested parties are encouraged to attend
the creditors' meeting at 10:00 a.m. on Dec. 11, 2008, for the
examination of claims at:

         Trade court of Vienna
         Room 1701
         Vienna
         Austria

Headquartered in Vienna, Austria, the Debtor declared bankruptcy
on Oct. 9, 2008, (Bankr. Case No. 6 S 120/08a).


VADEX LLC: Claims Registration Period Ends Nov. 25
--------------------------------------------------
Creditors owed money by LLC Vadex (FN 293564m) have until Nov. 25,
2008, to file written proofs of claim to the court-appointed
estate administrator:

         Dr. Ute Toifl
         Tuchlauben 12/20
         1010 Vienna
         Tel: 535 46 11
         Fax: 535 46 11 11
         E-mail: office@thr.at

Creditors and other interested parties are encouraged to attend
the creditors' meeting at 11:20 a.m. on Dec. 9, 2008, for the
examination of claims at:

         Trade Court of Vienna
         Room 1606
         Vienna
         Austria

Headquartered in Vienna, Austria, the Debtor declared bankruptcy
on Oct. 8, 2008,(Bankr. Case No. 28 S 129/08m).


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ROSKILDE BANK: EU Commission Approves Danish Liquidation Aid
------------------------------------------------------------
The European Commission has authorized, under EC Treaty rules on
state aid, a package of measures to liquidate Roskilde Bank in
Denmark.  In August 2008, when it became clear that the rescue of
the bank would fail, the Danish National Bank and the Danish
association of private banks (DPB) took over, through a newly
created entity, all assets and liabilities of Roskilde Bank, with
a view to preparing an orderly winding-up.  In the context of the
liquidation, the new entity was provided with capital and
continued to benefit from the liquidity facility granted as a
rescue measure.  Furthermore, the Danish authorities agreed to
provide a guarantee to the Danish National Bank for any losses it
may incur in relation to this transaction.  The new entity will
only exist as a bank for the time needed to complete the sale of
the branches, which already took place on October 7, and the
redemption of all senior creditors of the bank.  The Commission
found the liquidation to be in line with its Guidance
Communication on state aid to overcome the financial crisis,
because it was an appropriate and proportionate measure to address
a serious disturbance of the Danish economy, while keeping the
potential distortions of competition to the minimum. The
liquidation measures are therefore compatible with Article 87.3.b.
of the EC Treaty.

Competition Commissioner Neelie Kroes said: "Thanks to good
cooperation with the Danish authorities, the Commission was able
to provide legal certainty on the liquidation of Roskilde Bank.
In the current context of financial turmoil this was important for
both Roskilde's creditors and for the Danish financial market as a
whole."

Roskilde Bank, based in the town of Roskilde, was the eighth
largest bank in Denmark, with a balance sheet total of DKK42.9
billion as of March 31, 2008.  In July 2008, in view of the
turmoil in the global financial markets and the crisis in the
Danish real estate market, the bank ran into financial
difficulties and received state aid to be able to continue its
business.  However, the rescue, approved by the Commission did not
succeed.

As a result, the Danish National Bank (DNB) and Det Private
Beredskab (DPB) decided on August 24, 2008 to take over, through a
newly created entity, all assets and liabilities of Roskilde Bank,
to wind up Roskilde Bank's activities.  The purchase price for the
transferred assets was DKK37.3 billion (around EUR5 billion).  DNB
and DPB also agreed to provide a capital base contribution of
minimum DKK4.5 billion (around EUR603 million) to the newly
created entity.  In addition, the liquidity facility granted by
DNB to Roskilde Bank was prolonged.  It was further agreed that
Roskilde Bank's creditors, apart from hybrid core capital and
subordinated loan capital, would be fully redeemed.

After subsequent negotiations, a large part of Roskilde Bank's
branches were sold on September 29, 2008 to Nordea, Spar Nord Bank
and Arbejdernes Landsbank.  The buyers agreed to take over loans
worth around DKK10 billion (around EUR1.3 billion) and deposits of
DKK5 billion (around EUR670 million).  The difference would be
paid in cash, including DKK550 million (around EUR73.7 million)
for goodwill i.e. for the value of branches sold above book value
of loans.

Following intensive contacts between the Danish authorities and
the Commission, the liquidation aid measures were formerly
notified by Denmark on October 7, 2008.

The Commission's examination showed that no state aid was involved
in the sale of the branches to Nordea, Spar Nord Bank and
Arbejdernes Landsbank, because the price achieved for the sale was
the maximum possible market price and the assets and liabilities
were transferred to the buyers without any aid attached.  In other
words, the buyers could not rely on any support from the state.

On the other hand, the rest of the measures supporting the
liquidation of the bank do constitute state aid.  However, in the
current financial situation, a possible default of Roskilde Bank
could put at risk confidence in the Danish financial system, which
is very dependent on international financing.  This constitutes a
serious risk of a systemic crisis, which may also have spill-over
effects into other business sectors.

The objective of the Danish authorities was to preserve financial
stability of the Danish financial system.  Therefore, in view of
this objective, the Commission considered the implemented measures
to be appropriate.  The measures were also necessary, as the
Danish authorities had to restore the confidence of institutional
lenders.  The Commission noted that in this context subordinated
debt was not covered by the state, which means that the risk of
moral hazard is minimized, if not avoided.  Furthermore, the
implemented measures were proportionate, as the aid and
distortions of competition were kept to the minimum, inter alia by
the contribution of the private banks, through the DPB, to the
measures.

The Commission concluded that these liquidation aid measures were
an appropriate and proportionate means of addressing a serious
disturbance of the Danish economy and as such in line with Article
87.3.b of the EC Treaty and the Commission guidance.

                     *     *     *

As reported in the Troubled Company Reporter-Europe, Moody's
Investors Service has withdrawn for business reasons all ratings
of Roskilde Bank A/S whose name was changed to Selskabet af 1.
september 2008 A/S on October 6, 2008.

"The rating withdrawal of the E Bank Financial Strength Rating
(BFSR) and the A3/Prime-1 debt and deposit ratings follows the
announcement by the Danish FSA (Finanstilsynet) that it has
withdrawn the bank's permission to operate as a bank," Eeva
Antila, Moody's analyst for Roskilde Bank, said.


KINGDOM OF DENMARK: S&P Sees Drop in Banking Sector Asset Quality
-----------------------------------------------------------------
Standard & Poor's Ratings Services revised its Banking Industry
Country Risk Assessment on the Kingdom of Denmark to Group 2 from
Group 1.  The revision reflects S&P's expectations that asset
quality in the sector will deteriorate.  It also reflects the
increasing vulnerability of the banks at the smaller end of the
sector.  This has become increasingly apparent in the currently
tight liquidity conditions in the global debt markets.

The large Danish financial institutions (Danske Bank A/S, Nordea
Bank Danmark A/S, Nykredit Realkredit A/S, and Jyske Bank A/S)
have well-established banking franchises and have not radically
changed their business and financial profiles in the last three to
four years of market bonanza, as some of the small regional and
local banks have.  As a result, they are now much more resilient
to the tougher current market conditions, underpinned by well
diversified business mixes, strong risk management, sound
underwriting criteria, and easier and more diverse access to
international funding.

S&P is concerned about credit risk in the system.  The slowdown in
the Danish economy and global demand combined with a sharp
correction in domestic housing prices has already started to put
pressure on real estate developers and construction companies as
well as on some small and midsize companies.  The resulting credit
losses will in particular impact those banks that have been
expanding their lending aggressively in recent years in a quest
for greater market share.  In the case of Roskilde Bank A/S (not
rated), the country's central bank had to intervene in July 2008
when the level of loan loss provisions rendered the bank
insolvent.

The current international financial and liquidity crisis has
exposed the weaknesses of many smaller Danish financial
institutions.  The inability of smaller banks to access liquidity
or to find financing has in many cases triggered a forced
acquisition by a larger bank.  Whereas in other countries, the
banks subject to bailouts and acquisitions have been major
players, the impact in Denmark has been on the small end of the
banking spectrum, where about 150 banks account for a small (20%-
25%) but significant proportion of the wider banking sector.

To safeguard financial stability and in line with similar measures
taken in other European countries, the Danish Parliament approved
on Oct. 10, 2008 the Act on Financial Stability, whereby all
deposits and senior unsecured debt with Danish banks will be
guaranteed for a two-year period.  Moreover, the Danish central
bank has launched a number of new lending facilities involving
further lending against collateral.  S&P believes that while the
guarantee and the central bank measures should restore confidence
in the interbank lending market, structural issues in the Danish
financial sector remain.

In S&P's opinion, Denmark has far too many small banks with very
narrow business profiles, potentially risky loan portfolios and,
given their rapid lending growth in the past few years, heavy
reliance on volatile short-term funding.  S&P believes that
consolidation in the Danish banking sector is necessary and expect
it to continue.


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BAV MASCHINENBAU: Claims Registration Period Ends November 13
-------------------------------------------------------------
Creditors of BAV Maschinenbau GmbH have until Nov. 13, 2008, to
register their claims with court-appointed insolvency manager Marc
Schaumann.

Creditors and other interested parties are encouraged to attend
the meeting at 10:00 a.m. on Dec. 4, 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 Luebeck
         Hall E3
         Burgfeld 7
         23568 Luebeck
         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:

         Marc Schaumann
         Falkenstr. 22
         23564 Luebeck
         Germany

The District Court of Luebeck opened bankruptcy proceedings
against BAV Maschinenbau GmbH on Oct. 1, 2008.  Consequently, all
pending proceedings against the company have been automatically
stayed.

The Debtor can be reached at:

         BAV Maschinenbau GmbH
         Attn: Josef Beil und
               Matthias Rudolf Mogler Managers
         Traveweg 5
         23569 Luebeck
         Germany


BKR BAU: Claims Registration Period Ends November 12
----------------------------------------------------
Creditors of BKR Bau- und Vertriebsgesellschaft mbH have until
Nov. 12, 2008, to register their claims with court-appointed
insolvency manager Dr. Achim Ahrendt.

Creditors and other interested parties are encouraged to attend
the meeting at 9:00 a.m. on Dec. 12, 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:

         Dr. Achim Ahrendt
         Albert-Einstein-Ring 11/15
         22761 Hamburg
         Germany

The District Court of Hamburg opened bankruptcy proceedings
against BKR Bau- und Vertriebsgesellschaft mbH on Sept. 23, 2008.
Consequently, all pending proceedings against the company have
been automatically stayed.

The Debtor can be reached at:

         BKR Bau- und Vertriebsgesellschaft mbH
         Attn: Rahlf und Joerg Knoop, Managers
         Chrysanderstrasse 32 a
         21029 Hamburg
         Germany


E.T.S. GLAS: Claims Registration Period Ends November 12
--------------------------------------------------------
Creditors of E.T.S. Glas-, Gebaudereinigung und Gruenanlagenpflege
GmbH have until Nov. 12, 2008, to register their claims with
court-appointed insolvency manager Dr. Stephan Laubereau.

Creditors and other interested parties are encouraged to attend
the meeting at 10:30 a.m. on Dec. 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 of Wiesbaden
         E 36 A
         Building E
         Moritzstrasse 5
         Hinterhaus
         65185 Wiesbaden
         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. Stephan Laubereau
         C/o Pluta Rechtsanwalts GmbH - Buero Frankfurt/Main
         Trakehner Strasse 7-9 / Eingang A
         60487 Frankfurt am Main
         Germany
         Tel: 069 / 850 9693 0
         Fax: 069 / 850 9693 29
         E-mail: frankfurt@pluta.net
         Web site: www.pluta.net

The District Court of COURT opened bankruptcy proceedings against
E.T.S. Glas-, Gebaudereinigung und Gruenanlagenpflege GmbH on
DATE.  Consequently, all pending proceedings against the company
have been automatically stayed.

The Debtor can be reached at:

         E.T.S. Glas-, Gebaudereinigung und
         Gruenanlagenpflege GmbH
         Attn: Edip Isiktas, Manager
         Liebigstrasse 18
         65439 Floersheim am Main
         Germany


ELEMENTS GMBH: Claims Registration Period Ends November 12
----------------------------------------------------------
Creditors of Elements GmbH have until Nov. 12, 2008, to register
their claims with court-appointed insolvency manager Nikolai
Weber.

Creditors and other interested parties are encouraged to attend
the meeting at 10:30 a.m. on Dec. 16, 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 Esslingen
         Hall One
         Insolvency Tribunal
         Strohstrasse 5
         73728 Esslingen
         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:

         Nikolai Weber
         Breitscheidstrasse 10
         70178 Stuttgart
         Germany
         Tel: 0711/252566-0
         Fax: 0711/252566-66

The District Court of Esslingen opened bankruptcy proceedings
against Elements GmbH on Oct. 1, 2008.  Consequently, all pending
proceedings against the company have been automatically stayed.

The Debtor can be reached at:

         Elements GmbH
         Fabrikstrasse 15
         73230 Kirchheim
         Germany

         Attn: Andreas Aschenbrenner, Manager
         Fabrikstrasse 5
         73230 Kirchheim
         Germany


GROB AEROSPACE: German Unit Declared Insolvent
----------------------------------------------
Grob Aerospace GmbH in Germany has been declared insolvent on
October 31, 2008.

In Switzerland, Grob Aerospace AG had been granted the
postponement of the insolvency by the competent Swiss Court until
October 31, 2008.  It is also expected that the company will be
put in insolvency by the Swiss court in the coming days.

"Since August 2008, both the Swiss and German administrators and
the entire management team of Grob Aerospace, have been working
jointly and relentlessly on a solution to secure an investment in
the near future," Grob Aerospace CEO Niall Olver said.
"We have been in discussion with a significant number of potential
investors around the world.  These interested parties included
financial investors, as well as strategic investors already active
in the aviation industry.  A number of them have performed a due
diligence process and are well advanced in the commercial and
contractual negotiations."

However, he noted "we have unfortunately not been able to finalize
the transaction at this stage, and within the timeframe allowed by
the court.  Clearly, the worldwide economic crisis and shortage of
financing capability has not helped us in this process."

Grob Aerospace GmbH in Germany had to file for preliminary
insolvency on August 18, 2008, as a result of the delays in the
spn program which in consequence led to an increased cash
requirement in order to complete the project.  The company's
former loan provider elected to discontinue their support.

From Monday, November 3, 2008, most employees will be released
from work.  A core team will remain in Mattsies to keep business
activities running on a minimum scale.  The remaining management
team of Grob Aerospace GmbH together with the Grob Aerospace AG in
Zurich are continuing the ongoing discussions with potential
investors.

As reported in the Troubled Company Reporter-Europe on
September 22, 2008, Learjet terminated its development agreement
with Grob Aerospace AG of Switzerland.

Bombardier Aerospace is assuming complete responsibility for the
detail design and manufacturing of all primary and secondary
structures for the all-new Bombardier Learjet 85 midsize business
jet, the TCR-Europe report disclosed.

Headquartered in Zurich, Switzerland, Grob Aerospace --
http://www.grob-aerospace.net/-- is one of the world's largest
and most experienced composite aircraft manufacturers since
1971.  Grob's research, development, manufacturing and assembly
facilities are located in Tussenhausen-Mattsies, Germany, where
it maintains its own purpose built airfield.   Its  central base
in the United States is located in Portsmouth, New Hampshire
with several regional sales offices throughout the USA.


INDUSTRIAL SERVICES: Claims Registration Period Ends Nov. 12
------------------------------------------------------------
Creditors of Industrial Services Paper Lenningen GmbH have until
Nov. 12, 2008, to register their claims with court-appointed
insolvency manager Dr. Jan Markus Plathner.

Creditors and other interested parties are encouraged to attend
the meeting at 10:00 a.m. on Dec. 12, 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 Esslingen
         Hall One
         Insolvency Tribunal
         Strohstrasse 5
         73728 Esslingen
         Germany
         Hall One
         Insolvency Tribunal
         Strohstrasse 5
         73728 Esslingen
         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. Jan Markus Plathner
         Lyoner Strasse 14
         60528 Frankfurt
         Germany
         Tel: 069 / 962334 - 0
         Fax: 069 / 962334 - 22

The District Court of Esslingen opened bankruptcy proceedings
against Industrial Services Paper Lenningen GmbH on Oct. 1, 2008.
Consequently, all pending proceedings against the company have
been automatically stayed.

The Debtor can be reached at:

         Industrial Services Paper Lenningen GmbH
         Attn: Axel H. Scheufelen, Manager
         Adolf-Scheufelen-Strasse 26
         73252 Lenningen
         Germany


SENSO WORKS: Claims Registration Period Ends November 12
--------------------------------------------------------
Creditors of Senso Works GmbH have until Nov. 12, 2008, to
register their claims with court-appointed insolvency manager Dr.
Achim Ahrendt.

Creditors and other interested parties are encouraged to attend
the meeting at 11:00 a.m. on Dec. 12, 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 Norderstedt
         Hall B
         Rathausallee 80
         22846 Norderstedt
         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. Achim Ahrendt
         Albert-Einstein-Ring 11
         22761 Hamburg
         Germany

The District Court of Norderstedt opened bankruptcy proceedings
against Senso Works GmbH on Oct. 2, 2008.  Consequently, all
pending proceedings against the company have been automatically
stayed.

The Debtor can be reached at:

         Senso Works GmbH
         Attn: Dr. Ralph Ottensmeyer, Manager
         Carl-Benz-Strasse 9
         24568 Kaltenkirchen
         Germany


* Fitch: German Municipal Companies -- Essentially a Public Risk
----------------------------------------------------------------
Fitch Ratings says in a special report that although German
municipal companies vary in terms of legal status, activities,
financial performance and structure, they have fundamental
similarities which are critical to their creditworthiness and
which require a specific rating approach.

The report focuses on the key characteristics of the sector.  Most
municipal companies have strong links with their municipality or
Lander and their ratings are therefore based on Fitch's criteria
for rating public-sector entities.  The agency assesses the
likelihood of support and the ability of the sponsor entity to
provide it in a timely and adequate manner should it be required.
In some cases, the legal status or a particular legal agreement
imposes a bailout obligation on the local authority.  More
frequently, the need for and the probability of support will be
assessed based on the economic and financial link (dependency)
between the entity and its sponsor.

German municipal companies are often grouped in joint
organisations called Stadtwerke.  Many of them were created in the
late 19th and early 20th Century to serve a fast-growing urban
population as the country became industrialized.  German
municipalities traditionally provide public services that aid
economic development, such as energy, water, waste disposal,
public transport and housing.

Municipal companies were established by local authorities to
fulfil public needs.  Local authorities designate their public
mission and keep control over strategic decisions (prices,
investment).  Many municipal companies provide basic public
services and there would therefore be a strong interest from local
authorities in bailing out companies that require financial
assistance.

In the vast majority of cases, a municipal company's majority
shareholder is a public body.  This is critical for their credit
quality, based on the amount and likelihood of support from the
local authority in case of need.  Public ownership is also
important for large profit-making entities in sectors that are
open to competition, because legal agreements may empower the
majority shareholder to use profits to set off operating losses
from other activities, or to provide the municipal budget with an
additional income.

The special report, entitled "German Municipal Companies -
Essentially a Public Risk", is available on the agency's public
Web site, http://www.fitchratings.com/


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G R E E C E
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TITAN CEMENT: S&P Cuts Rating to 'BB+/B' on Weak Metrics
--------------------------------------------------------
Standard & Poor's Ratings Services lowered its long- and short-
term corporate credit ratings on Greek cement manufacturer Titan
Cement Co. S.A. to 'BB+/B' from 'BBB-/A-3'.  The ratings remain on
CreditWatch with negative implications, where they were originally
placed on Oct. 27, 2008.

"The downgrade reflects our belief that the group's financial
profile will considerably weaken this year compared with last
year, and that credit metrics will not significantly improve
before 2010 at best," said Standard & Poor's credit analyst Xavier
Buffon.

This belief is founded on the ongoing market decline in Greece, an
unlikely substantial recovery in the U.S. over this time horizon,
S&P's view that the cushion provided by developing markets will
erode, and the impact of heavier interest charges.  The ratings
action also incorporates S&P's opinion that the group's liquidity
is weak, given covenant risks.  The ratings remain on CreditWatch
negative as S&P believes that as headroom under certain financial
covenants will likely be extremely tight at year-end 2008.

With sales of EUR1.2 billion in the first nine months of 2008,
Titan Cement is a midsize multiregional player in the global
cement industry.  It operates primarily in Greece, the eastern
U.S., southeastern Europe, and Egypt.

The ratings reflect the company's limited size and geographic
diversity compared with a number of peers, heavy outlays on
expansion projects and acquisitions, and an aggressive financial
profile.  These negatives are mitigated by the group's still
robust generation of cash, very strong market position in Greece,
increasing geographic diversity towards non mature markets, and
overall healthy, albeit dropping, margins and return on capital.

Standard & Poor's will re-examine the group's liquidity position
in several weeks, in order to determine if any further ratings
change is warranted.  Should S&P gets comfort on the covenants
side, it would likely affirm the ratings and remove them from
CreditWatch.  Conversely, any increased likelihood that covenant
will be breached, and if the group doesn't adequately address this
issue, could result in further ratings pressure.


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I C E L A N D
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GLITNIR BANKI: Auction Sets CDS Values at 3% on Senior Debt
-----------------------------------------------------------
Creditex and Markit, in partnership with 14 major credit
derivative dealers, on Wednesday, November 5, announced the
results of a Credit Event Auction that determined a price to
facilitate the settlement of credit derivative trades referencing
the senior debt of Glitnir Banki hf.

At 2:00 pm GMT on Wednesday, the final price for Glitnir senior
debt for the purpose of settling credit derivative transactions
was determined to be 3%.

The auction was conducted in accordance with the International
Swaps and Derivatives Association (ISDA) 2008 Glitnir CDS
Protocol.  Creditex and Markit are the official administrators of
Credit Event Auctions.

The Credit Event Auction enables market participants to cash
settle credit derivative transactions.  During a Credit Event
Auction, dealers submit orders electronically on the Creditex
platform.  The auction submissions are delivered to Markit
electronically.  Markit calculates and verifies the results, and
publishes them on www.creditfixings.com.

                         About Glitnir

Headquartered in Reykjavik, Iceland, Glitnir banki reported total
assets of ISK346 billion (EUR30.9 billion) at the end of June
2008.

                        *    *    *

As reported in Troubled Company Reporter-Europe on October 13,
2008, Standard & Poor's Ratings Services has lowered its long-term
and short-term counterparty credit ratings on Iceland-based
Glitnir Bank to 'D' from 'CCC' and 'C', respectively, after the
bank was placed into receivership by the country's banking
supervisor.

On October 2, 2008, the TCR-Europe reported that Moody's Investors
Service downgraded the Bank Financial Strength Rating (BFSR) of
Glitnir banki hf to D from C-, the long-term bank deposit and
senior debt ratings to Baa2 from A2 and the short-term rating to
Prime-2 from Prime-1.  In addition, Moody's downgraded the bank's
subordinated debt to Ba1 from A3 and its preferred stock to B1
from Baa1.  The BFSR remains on review for possible downgrade,
while the outlook on debt and deposit ratings is developing.

The rating action follows recent announcement that the Government
of Iceland provided Glitnir with a capital injection of EUR600
million, thereby giving the government a 75% stake in the bank.
The capital injection was in response to Glitnir's temporary
liquidity difficulties in light of adverse market conditions.


GLITNIR BANKI: Auction Sets CDS Values at 0.125% on Sub. Debt
-------------------------------------------------------------
Markit and Creditex, in partnership with 14 major credit
derivative dealers, on Wednesday announced the results of a Credit
Event Auction that determined a price to facilitate the settlement
of credit derivative trades referencing the subordinated debt of
Glitnir Banki hf.

At 3:45 pm GMT on Wednesday, the final price for Glitnir
subordinated debt for the purpose of settling credit derivative
transactions was determined to be 0.125%.

At 2:00 pm GMT on Wednesday, the final price for Glitnir senior
debt for the purpose of settling credit derivative transactions
was determined to be 3%.

The auctions were conducted in accordance with the International
Swaps and Derivatives Association (ISDA) 2008 Glitnir CDS
Protocol.  Markit and Creditex are the official administrators of
Credit Event Auctions.

Credit Event Auctions enable market participants to cash settle
credit derivative transactions.  During a Credit Event Auction,
dealers submit orders electronically on the Creditex platform.
The auction submissions are delivered to Markit electronically.
Markit calculates and verifies the results, and publishes them on
www.creditfixings.com.

                     About Glitnir

Headquartered in Reykjavik, Iceland, Glitnir banki reported total
assets of ISK346 billion (EUR30.9 billion) at the end of June
2008.

                        *    *    *

As reported in Troubled Company Reporter-Europe on October 13,
2008, Standard & Poor's Ratings Services has lowered its long-term
and short-term counterparty credit ratings on Iceland-based
Glitnir Bank to 'D' from 'CCC' and 'C', respectively, after the
bank was placed into receivership by the country's banking
supervisor.

On October 2, 2008, the TCR-Europe reported that Moody's Investors
Service downgraded the Bank Financial Strength Rating (BFSR) of
Glitnir banki hf to D from C-, the long-term bank deposit and
senior debt ratings to Baa2 from A2 and the short-term rating to
Prime-2 from Prime-1.  In addition, Moody's downgraded the bank's
subordinated debt to Ba1 from A3 and its preferred stock to B1
from Baa1.  The BFSR remains on review for possible downgrade,
while the outlook on debt and deposit ratings is developing.

The rating action follows recent announcement that the Government
of Iceland provided Glitnir with a capital injection of EUR600
million, thereby giving the government a 75% stake in the bank.
The capital injection was in response to Glitnir's temporary
liquidity difficulties in light of adverse market conditions.


KAUPTHING BANK: Swedish Branch Sells Pension Unit to Employees
--------------------------------------------------------------
Kaupthing Bank hf's Swedish branch has sold its pension unit
Kaupthing Pension Consulting to a group of employees for an
undisclosed amount, the Associated Press reports.

The company, as cited by the report, said the group is led by the
unit's chief executive Dick Simonsson.

"Kaupthing Sweden has, for some time, aimed at selling the wholly
owned subsidiary KPC.  The sale is completely in line with
customers' demand for a totally independent pension consultancy,"
Kaupthing Sweden spokesman Peter Borsos was quoted by the report
as saying.

The new company, the report notes, will change its name but will
continue to cooperate with Kaupthing Sweden.

                   About Kaupthing Bank

Headquarted in Reykjavik, Iceland, Kaupthing Bank --
http://www.kaupthing.com-- is engaged in the provision of
financial services, such as private banking, asset management,
pension services, brokerage services, investment banking, as well
as corporate and retail banking.  The Bank's offer is targeted at
companies, institutional investors and individuals.  The Bank is
operational in thirteen countries, including Luxembourg,
Switzerland, the Nordic countries, the United Kingdom and the
United States.  The main subsidiaries include Kaupthing Singer &
Friedlander and FIH Erhvervsbank.

                         *    *    *

As reported in the Troubled Company Reporter-Europe on
October 13, 2008, Fitch Ratings downgraded Kaupthing Bank hf.'s
Long-term Issuer Default rating to 'D' from 'CCC' and removed it
from Rating Watch Evolving.  This follows the announcement that
Kaupthing is now subject to similar arrangements as its two
Icelandic peers, Glitnir Banki and Landsbanki Islands, with the
Icelandic authorities effectively seizing control of the bank.

At the same time, Moody's Investors Service downgraded the bank
financial strength rating (BFSR) of Kaupthing Bank hf to E from
D+, its long-term deposit ratings to Caa1 from Baa3, the long-term
senior debt ratings to Caa2 from Ba1.  In addition, Moody's
downgraded the bank's subordinated debt to C from Ba2 and its
preferred stock to C from B1.  The bank's short-term rating was
downgraded to Not-Prime from P-3.  Moody's is maintaining
Kaupthing's long-term deposit ratings, the long-term senior debt
ratings and its BFSR on review for further possible downgrade.


LANSBANKI: Auction Sets CDS Values at 0.125% on Sub. Debt
---------------------------------------------------------
Markit and Creditex, in partnership with 14 major credit
derivative dealers, on Tuesday, November 4, determined a price to
facilitate the settlement of credit derivative trades referencing
the subordinated debt of Landsbanki Islands hf in Europe's first
ever Credit Event Auctions.

At 3:45 pm GMT on Tuesday, the final price for Landsbanki
subordinated debt for the purpose of settling credit derivative
transactions was determined to be 0.125%.

At 2:00 pm GMT on Tuesday, the final price for Landsbanki senior
debt for the purpose of settling credit derivative transactions
was determined to be 1.25%.

The auctions were conducted in accordance with the International
Swaps and Derivatives Association (ISDA) 2008 Landsbanki CDS
Protocol.  Markit and Creditex are the official administrators of
Credit Event Auctions.

Credit Event Auctions enable market participants to cash settle
credit derivative transactions.  During a Credit Event Auction,
dealers submit orders electronically on the Creditex platform.
The auction submissions are delivered to Markit electronically.
Markit calculates and verifies the results, and publishes them on
www.creditfixings.com.

                         About Landsbanki

Headquartered in Reykjavik, Iceland, Landsbanki Islands hf. --
http://www.landsbanki.is-- is engaged in the provision of retail,
corporate an investment banking services.  The Bank's product
range includes financial products and services, such as specialty
insurance and real estate financing, for both corporate and
private clients.  It is also operational through a number of
subsidiaries, including Heritable Bank Ltd, operating consultancy
and financing services for residential development; Landsbanki
Holdings Europe SA, a Luxembourg-based holding company providing
banking services; Landsbanki Guernsey Ltd, offering retail
banking; Landsbanki Securities (UK) Holdings plc, engaged in the
provision of stockbrokers and financial services; Landsvaki hf, an
operation company for mutual funds; Verdbrefun hf, a
securitization company; Landsbankinn eignarhaldsfelag hf, a real
estate company, and others.

                           *    *    *

As reported in the TCR-Europe on Oct. 10, 2008, Moody's Investors
Service downgraded the bank financial strength rating (BFSR) of
Landsbanki Islands hf to E from C-, its long-term deposit ratings
to Caa1 from A2 and its senior unsecured ratings to Caa2 from A2.
Consequently, the bank's Prime-1 short-term rating was downgraded
to Not-Prime.  In addition, the bank's subordinated, junior
subordinated and preferred stock ratings were downgraded to C.
The outlook on all ratings is developing.

At the same time, Fitch Ratings downgraded the Long-term
Issuer Default ratings of Glitnir Banki hf. and Landsbanki Islands
to 'B' from 'BBB-' and 'BBB' respectively, and that of Straumur
Burduras Investment Bank to 'BB-' from 'BB+'.  The ratings of
Kaupthing Bank hf. are under review.

This rating action follows the announcement of legislative
measures providing for broad authority to Icelandic authorities to
intervene in the Icelandic financial system and the statement that
Landsbanki has been placed in receivership, and reflects Fitch's
view that both the ability and propensity of the Icelandic
authorities to support the Icelandic banking system are becoming
increasingly compromised.  The support rating floor for the major
Icelandic banks is now 'B'.

Both Glitnir, following the acquisition by the Icelandic
authorities last month of a 75% stake, and Landsbanki, which was
placed in receivership, are now at their support rating floor.
Glitnir's Individual rating of 'F' is affirmed and Landsbanki's
Individual rating has been downgraded to 'F' from 'C' to reflect
the receivership arrangement.


LANDSBANKI: Auction Sets CDS Values at 1.25% on Senior Debt
-----------------------------------------------------------
Creditex and Markit, in partnership with 14 major credit
derivative dealers, on Tuesday, November 4, determined a price to
facilitate the settlement of credit derivative trades referencing
the senior debt of Landsbanki Islands hf in Europe's first ever
Credit Event Auction.

At 2:00 pm GMT on Tuesday, the final price for Landsbanki senior
debt for the purpose of settling credit derivative transactions
was determined to be 1.25%.

The auction was conducted in accordance with the International
Swaps and Derivatives Association (ISDA) 2008 Landsbanki CDS
Protocol.  Creditex and Markit are the official administrators of
Credit Event Auctions.

The Credit Event Auction enables market participants to cash
settle credit derivative transactions.  During a Credit Event
Auction, dealers submit orders electronically on the Creditex
platform.  The auction submissions are delivered to Markit
electronically.  Markit calculates and verifies the results, and
publishes them on www.creditfixings.com.

                      About Landsbanki

Headquartered in Reykjavik, Iceland, Landsbanki Islands hf. --
http://www.landsbanki.is-- is engaged in the provision of retail,
corporate an investment banking services.  The Bank's product
range includes financial products and services, such as specialty
insurance and real estate financing, for both corporate and
private clients.  It is also operational through a number of
subsidiaries, including Heritable Bank Ltd, operating consultancy
and financing services for residential development; Landsbanki
Holdings Europe SA, a Luxembourg-based holding company providing
banking services; Landsbanki Guernsey Ltd, offering retail
banking; Landsbanki Securities (UK) Holdings plc, engaged in the
provision of stockbrokers and financial services; Landsvaki hf, an
operation company for mutual funds; Verdbrefun hf, a
securitization company; Landsbankinn eignarhaldsfelag hf, a real
estate company, and others.

                           *    *    *

As reported in the TCR-Europe on Oct. 10, 2008, Moody's Investors
Service downgraded the bank financial strength rating (BFSR) of
Landsbanki Islands hf to E from C-, its long-term deposit ratings
to Caa1 from A2 and its senior unsecured ratings to Caa2 from A2.
Consequently, the bank's Prime-1 short-term rating was downgraded
to Not-Prime.  In addition, the bank's subordinated, junior
subordinated and preferred stock ratings were downgraded to C.
The outlook on all ratings is developing.

At the same time, Fitch Ratings downgraded the Long-term
Issuer Default ratings of Glitnir Banki hf. and Landsbanki Islands
to 'B' from 'BBB-' and 'BBB' respectively, and that of Straumur
Burduras Investment Bank to 'BB-' from 'BB+'.  The ratings of
Kaupthing Bank hf. are under review.

This rating action follows the announcement of legislative
measures providing for broad authority to Icelandic authorities to
intervene in the Icelandic financial system and the statement that
Landsbanki has been placed in receivership, and reflects Fitch's
view that both the ability and propensity of the Icelandic
authorities to support the Icelandic banking system are becoming
increasingly compromised.  The support rating floor for the major
Icelandic banks is now 'B'.

Both Glitnir, following the acquisition by the Icelandic
authorities last month of a 75% stake, and Landsbanki, which was
placed in receivership, are now at their support rating floor.
Glitnir's Individual rating of 'F' is affirmed and Landsbanki's
Individual rating has been downgraded to 'F' from 'C' to reflect
the receivership arrangement.


STRAUMUR BURDARAS: Fitch Cuts Individual Rating to 'D/E'
--------------------------------------------------------
Fitch Ratings has downgraded Iceland-based Straumur-Burdaras
Investment Bank's Long-term Issuer Default rating (IDR) to 'B'
from 'BB-' (BB minus) and changed the Rating Watch to Negative
from Evolving.  The agency has simultaneously downgraded the
Individual rating to 'D/E' from 'D' and changed the Rating Watch
to Negative from Evolving.

The rating action reflects the refinancing risk facing Straumur
when its EUR200 million syndicated loan matures in mid-December
2008.  Repayment in full of this loan represents a significant
cash consideration for Straumur, which has been subject to severe
liquidity stress for the past two months, exacerbated by the
Icelandic banking crisis in early October and the challenging
international wholesale funding markets.  Management is confident
that Straumur has sufficient liquidity to meet its obligations at
least up to mid-December, and Fitch acknowledges management's
actions so far to preserve its cash position.

The amount of cash needed for the repayment will depend on the
bank's ability to negotiate a roll-over of at least part of the
loan with the banks involved in the syndication.  In addition, the
repayment capacity of Straumur is contingent on the bank disposing
of certain assets.  While support from shareholders and/or the
Icelandic authorities is possible, it cannot, in Fitch's view, be
relied upon for timely payment of the bank's obligations.

The Rating Watch Negative on the bank's IDR and Individual ratings
reflects the near-term risk that lending banks may decide not to
refinance the syndicated loan and/or asset sales cannot be
realised in sufficient time to meet any shortfall.  In Fitch's
opinion, should either, or both, of these circumstances occur,
default is probable, in the absence of external support, and the
agency would expect to downgrade the IDR to 'CC' and the
individual rating to 'E'.

Success in rolling over a material part of the syndicated loan
would take pressure off Straumur's funding needs and give the bank
more time to implement further liquidity contingency plans if
needed.  This would materially reduce downward pressure on the
ratings.  Nevertheless, Fitch believes Straumur continues to face
the risk of a liquidity shortfall, until the bank has successfully
refinanced part of the syndicated loan and disposed of further
assets.  Fitch has been informed by management that Straumur is on
track to dispose of the targeted assets in order to meet the mid-
December repayment although the agency believes this may be
challenged by current difficult conditions in the financial
markets.  Success in obtaining external liquidity support may
benefit the bank's ratings.

Even if Straumur is successful in navigating its way through the
next two months, Fitch believes that the bank has a limited margin
of safety and will remain dependent upon continued reductions in
its balance sheet assisted by a sustained improvement in the
market environment and sentiment.
Fitch expects to comment further within the next week.

Straumur's ratings are:

   -- Long-term IDR: downgraded to 'B' from 'BB-' (BB minus);
      Rating Watch changed to Negative from Evolving

   -- Short-term IDR 'B'; Rating Watch changed to Negative from
      Evolving

   -- Support rating: affirmed at '5'

   -- Support Rating Floor: affirmed at 'No Floor'

   -- Individual rating: downgraded to 'D/E' from 'D'; Rating
      Watch changed to Negative from Evolving

   -- Senior debt: downgraded to 'B' from 'BB-' (BB minus);
      Rating Watch changed to Negative from Evolving; Recovery
      Rating of 'RR4' assigned

   -- Subordinated debt: downgraded to 'CCC+' from 'B'; Rating
      Watch changed to Negative from Evolving; Recovery Rating of
      'RR6' assigned


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I T A L Y
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ALITALIA SPA: Files Chap. 15 Petition to Save U.S. Assets
---------------------------------------------------------
Alitalia-Linee Aeree Italiane, S.p.A. has filed for Chapter 15
protection with the U.S. Bankruptcy Court in the Southern District
of New York.  Italy's national airline experienced financial
difficulties for a number of years caused, in large measure, by a
combination of competition from low-cost air carriers, poor
management and onerous union obligations, according to papers
filed with the court.

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.

In the petition filed October 29, 2008, Prof. Augusto Fantozzi,
the appointed administrator, said the airline's financial
difficulties have been and exacerbated by spiraling fuel prices.

Within the last two years, Mr. Fantozzi stated that efforts were
made by Alitalia and the government of Italy to find a strategic
airline partner to purchase the airline or, alternatively, an
investor willing to recapitalize it.  As these efforts progressed,
Alitalia attempted to renegotiate its union contracts, a condition
imposed by all would-be strategic partners and potential
investors.

Mr. Fantozzi recalled that in April, one of the purchasers, Air
France/KLM, withdrew its offer to buy Alitalia when it was unable
to reach an agreement with Alitalia's several unions.

                    Investor Consortium Formed

Following Air France/KLM's withdrwal, a new Italian investor
consortium, Compagnia Aerea Italiana, was formed with the
expectations that it would invest approximately US$1.4 Billion to
buy many of Alitalia's assets and to relaunch a "new' Alitalia.
It likewise, however, initially ran into difficulties in reaching
a suitable agreement with many of Alitalia's unions, Mr. Fantozzi
noted.  By late August 2008, with time running out, it became
apparent to Alitalia's Board that, in the absence of immediate
success in the negotiations with the unions and the resultant
commitment of CAI to purchase its assets and assume its
operations, it would run out of cash, and would need to likely
wind down its operations and liquidate.

                         Bankruptcy Bill

To ensure continuity of Alitalia's operations, the government of
Italy adopted the Bankruptcy Bill which, broadly speaking, is the
rough equivalent of Chapter 11 of the Bankruptcy Code.  The bill,
among other things, allowed Alitalia to liquidate its assets and
lay off workers as it might deem necessary.

At or about the same time, the government relaxed certain
antitrust laws in order to permit the possibility of a partnership
or strategic alliance between Alitalia and Air One, Italy's second
largest carrier.

                    Italian Bankruptcy Filing

On Aug. 29, 2008, Alitalia declared insolvency and filed for
commencement of extraordinary administration procedure at the
Tribunal of Rome.  Italian Prime Minister Silvio Berlusconi
appointed Mr. Fantozzi as extraordinary commissioner.
Under the Bankruptcy Bill, the Administrator has supplanted the
directors and other management of Alitalia.

                        CAI Rescue Plan

In late September, CAI finally reached agreement with all of
Alitalia's major unions.  Specifically, CAI agreed to:

   -- continue its due diligence to purchase Alitalia's assets,

   -- negotiate with appropriate governmental authorities
      to acquire flight privileges and authority currently
      held by Alitalia,

   -- collect funds from its investors (approximately
      US$1.4 Billion) needed, and

   -- launch a newly created airline.

However, Mr. Fantozzi said that until this time, the future of
Alitalia itself continues to remain uncertain.

Mr. Fantozzi pointed out that to protect Alitalia's estate and
creditors and to keep it flying during this period, seeking relief
under Chapter 15 of the U.S. Bankruptcy Code is necessary.

The Chapter 15 petition, according to Mr. Fantozzi, will ensure
the preservation of the airline's assets in the United States.

Alitalia's property in the United States mainly consists of cash
in its operating bank accounts, furniture and fixtures in its
various offices and facilities located throughout the country (but
mostly in New York, New Jersey, Florida, Illinois and California),
and relatively modest amounts of equipment used in its air carrier
and air freight operations.  In sum, the value of this property is
approximately US$1,000,000.

Mr. Fantozzi further disclosed that upon information and belief,
similar relief is being sought in other countries where Alitalia
operates.

Kaplan, von Ohlen & Massamillo, LLC serves as Mr. Fantozzi's U.S.
Counsel.

                         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.


ITALFINANCE SECURITISATION: S&P Affirms Ratings on 2 Note Classes
-----------------------------------------------------------------
Standard & Poor's Ratings Services removed from CreditWatch
negative and affirmed its credit ratings on the class A and B
notes issued by Italfinance Securitisation Vehicle S.r.l. series
2006-1 (Italfinance 2006-1).

S&P placed the class A and B notes on CreditWatch negative on
Sept. 17, 2008.  The removal of the notes from CreditWatch follows
the successful substitution of Lehman Brothers Holdings Inc. as
swap counterparty in the Italease Finance SpA series 2004-1 and
2005-1 transactions on Oct. 27 and Oct. 3, 2008, respectively.

Italfinance 2006-1 was backed at closing by a portion of the
remuneration of the junior unrated asset-backed notes issued by
Italease Finance SpA series 2002-1, 2003-1, 2004-1, and 2005-1.
Following the redemption in September 2007 of Italease 2002-1, the
transaction is now backed only by the portion of the junior
remuneration related to series 2003-1, 2004-1, and 2005-1.

The junior remuneration relates to the deferred purchase price
that is paid back to the originators as a component of the
remuneration of the junior bonds.  The deferred purchase price was
determined by the sale of the original and subsequent portfolios
at a price equal to the net present value (NPV) of the future
installments of the transferred receivables.  The NPV was
calculated using as discount rate the higher of (i) the
contractual interest rate of the lease contracts, and (ii)
European interbank offered rate (EURIBOR) plus 500 basis points.

Following Lehman's substitution, the new swap counterparties
agreed to waive any monetary rights that could arise following a
swap termination event.  This is relevant for S&P's affirmation as
the remuneration of the junior asset-backed notes under the
underlying transactions is junior to the termination payments
under the relevant swap agreements.

Our ratings on the notes issued by Italfinance 2006-1 address the
ability of the cash flows in the transaction to pay ultimate
principal and timely interests on the class A notes and ultimate
principal and interest on class B notes.  S&P's analysis showed
that the outstanding ratings on the notes can be affirmed at this
stage.  Key input variables in S&P's review were assumed default
rates, prepayment levels, and recoveries assumed on stressed
defaults and on the outstanding defaulted loans.

At the latest IPD, there was a total of about EUR44 million of
defaulted assets outstanding in the Italease series 2004-1 and
2005-1 transactions.  As these defaults have already been fully
provisioned for, any recoveries on these assets will likely
constitute a release of excess spread.  The transaction should
also benefit, at the next IPD, from the release of a substantial
portion of the cash reserve in the Italease series 2005-1
transaction.

It should be noted that the cash flow assumptions for the
Italfinance 2006-1 class A and B notes continue to factor in the
originator's active role throughout the transaction term.  The
ratings on the class A and B notes will continue to reflect the
structure's reliance on the comprehensive support provided by
Banca Italease SpA.  Therefore, any changes in Banca Italease's
credit quality are likely to affect the outstanding ratings on
Italfinance 2006-1.

                           RATINGS LIST

                     Rating
Class        To                 From
-----        --                 ----

Ratings Removed From CreditWatch Negative And Affirmed

Italfinance Securitisation Vehicle S.r.l.
EUR191.765 Million Asset-Backed Floating-Rate Notes Series 2006-1

A           BB+                 BB+/Watch Neg
B           BB                  BB/Watch Neg


TISCALI SPA: In Talks With BSkyB Regarding Sale of UK Business
--------------------------------------------------------------
Tiscali S.p.A confirmed it is currently holding talks with the
BSkyB Group plc in relation to certain UK assets.

Citing the Sunday Times, BBC News discloses that BSkyB had
proposed an indicative offer of GBP450 million for the UK
business.

Carphone Warehouse, the Daily Telegraph relates, is thought to
have withdrawn from the bidding race.  Other competitors
understood to have walked away from the auction include Vodafone
and BT, the Daily Telegraph adds.

According to the Daily Telegraph, if the acquisition pushes
through, BSkyB, which has 1.79 million broadband customers, could
become the third biggest player in the market behind BT and Virgin
Media.

AOL Money says Tiscali, which has 1.8 million broadband customers
in the UK, is the fourth largest provider.  However, AOL Money
notes, the group's market share is believed to have come under
recent pressure.

Tiscali put itself up for sale this year following a strategic
review of its business in February, BBC relates.

                        About Tiscali

Tiscali S.p.A. (Borsa Italiana, Milan: TIS) --
http://www.tiscali.com/-- is one Europe's alternative
telecommunications operators.  Tiscali supplies a wide range of
services to its customers, both private individuals and companies,
namely: Internet access through dial-up and ADSL, as well as
voice, VoIP, media, added-value services and other technologically
advanced products.

As at June 30, 2008, Tiscali counted both in Italy and the UK a
total of 3.2 million active users.  Of these, over 2.4 million
were ADSL subscribers.

                        *     *     *

As reported in the Troubled Company Reporter-Europe on
October 23, 2008, Standard & Poor's Ratings Services lowered its
long-term corporate credit rating to 'B' from 'B+' on Tiscali SpA,
an alternative provider of Internet, telephony, and TV services in
the U.K. and Italy.  At the same time, S&P lowered its long-term
debt ratings on the EUR50 million senior secured term loan and
EUR50 million senior secured revolving credit facility (RCF) of
financing vehicle Tiscali U.K. Holdings Ltd. to 'B' and 'B+',
respectively, from 'B+' and 'BB-'; these loans are guaranteed by
Tiscali SpA.  The recovery ratings on these two debt facilities
are unchanged at respectively '3' (indicating S&P's expectation of
meaningful {50%-70%} recovery in the event of a payment default)
and '2' (indicating its expectation of substantial {70%-90%}
recovery in the event of a payment default).


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K A Z A K H S T A N
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AES COAL: Creditors Must File Proofs of Claim by December 12
------------------------------------------------------------
LLP Aes Coal has declared liquidation.  Creditors have until
Dec. 12, 2008, to submit written proofs of claims to:

         LLP Aes Coal
         Shoptykol
         Bayanaulsky
         Pavlodar
         Kazakhstan


AMANGELDY LLP: Creditors' Claims Deadline Slated for December 12
----------------------------------------------------------------
The Specialized Inter-Regional Economic Court of West Kazakhstan
has declared LLP Amangeldy insolvent.

Creditors have until Dec. 12, 2008, to submit written proofs of
claims to:

         The Specialized Inter-Regional
         Economic Court of West Kazakhstan
         Vagonnaya Str. 2/1
         Uralsk
         West Kazakhstan
         Kazakhstan
         Tel: 8 (7112) 97-14-29


ASIATIC MANAGEMENT: Creditors' Claims Filing Period Ends Dec. 12
----------------------------------------------------------------
The Specialized Inter-Regional Economic Court of North Kazakhstan
has declared LLP Asiatic Management Group insolvent on Sept. 26,
2008.

Creditors have until Dec. 12, 2008, to submit written proofs of
claims to:

         The Specialized Inter-Regional
         Economic Court of North Kazakhstan
         Jumabayev Str. 102-25
         Petropavlovsk
         North Kazakhstan
         Kazakhstan


ENBEK-98 LLP: Creditors Must Register Claims by December 12
-----------------------------------------------------------
The Specialized Inter-Regional Economic Court of North Kazakhstan
has declared LLP Enbek-98 insolvent.

Creditors have until Dec. 12, 2008, to submit written proofs of
claims to:

         The Specialized Inter-Regional
         Economic Court of North Kazakhstan
         Jumabayev Str. 102-25
         Petropavlovsk
         North Kazakhstan
         Kazakhstan


ENERGETIC-NS LLP: Creditors' Claims Due on December 12
------------------------------------------------------
Almaty Branch of LLP Energetic-NS has declared liquidation.
Creditors have until Dec. 12, 2008, to submit written proofs of
claims to:

         Almaty Branch of LLP Energetic-NS
         Zemnuhov Str. 5a
         Almaty
         Kazakhstan


REGION-MASH LLP: Creditors Must File Proofs of Claim by Dec. 12
---------------------------------------------------------------
The Specialized Inter-Regional Economic Court of Akmola has
declared LLP Region-Mash insolvent.

Creditors have until Dec. 12, 2008, to submit written proofs of
claims to:

         The Specialized Inter-Regional
         Economic Court of Akmola
         Room 228
         Auelbekov Str. 139a
         Kokshetau
         Akmola
         Kazakhstan
         Tel: 8 (7162) 25-79-32


SINERGIA LLP: Creditors' Claims Deadline Slated for December 12
---------------------------------------------------------------
The Specialized Inter-Regional Economic Court of Aktube has
declared LLP Sinergia insolvent.

Creditors have until Dec. 12, 2008, to submit written proofs of
claims to:

         The Specialized Inter-Regional
         Economic Court of Aktube
         Altynsarin Str. 31
         Aktobe
         Aktube
         Kazakhstan
         Tel: 8 (3132) 21-30-32


TEMIR-JAYIK LLP: Creditors' Claims Filing Period Ends Dec. 12
-------------------------------------------------------------
The Specialized Inter-Regional Economic Court of West Kazakhstan
has declared LLP Temir-Jayik insolvent.

Creditors have until Dec. 12, 2008, to submit written proofs of
claims to:

         The Specialized Inter-Regional
         Economic Court of West Kazakhstan
         Vagonnaya Str. 2/1
         Uralsk
         West Kazakhstan
         Kazakhstan
         Tel: 8 (7112) 97-14-29


TORESHE LTD: Creditors Must Register Claims by December 12
----------------------------------------------------------
The Specialized Inter-Regional Economic Court of Akmola has
declared LLP Toreshe Ltd. insolvent.

Creditors have until Dec. 12, 2008, to submit written proofs of
claims to:

         The Specialized Inter-Regional
         Economic Court of Akmola
         Room 228
         Auelbekov Str. 139a
         Kokshetau
         Akmola
         Kazakhstan
         Tel: 8 (7162) 25-79-32


URALSKAYA BAZA: Creditors' Claims Due on December 12
----------------------------------------------------
The Specialized Inter-Regional Economic Court of West Kazakhstan
has declared LLP Uralskaya Baza Stroitelnyh Materialov (Uralsk
Base of Construction Materials) insolvent.

Creditors have until Dec. 12, 2008, to submit written proofs of
claims to:

         The Specialized Inter-Regional
         Economic Court of West Kazakhstan
         Seifullin Str. 37
         Uralsk
         West Kazakhstan
         Kazakhstan


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K Y R G Y Z S T A N
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IVANOVSKY MASHINOSTROITELNY: Claims Deadline Set on November 28
---------------------------------------------------------------
CJSC Ivanovsky Mashinostroitelny Zavod (Ivanovka Machine-Building
Plant) has declared insolvency.  Creditors have until Nov. 28,
2008, to submit written proofs of claim.

Inquiries can be addressed to (0-777) 55-00-50.


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M A C E D O N I A
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* Fitch Changes Macedonia's Outlook to Stable; Affirms IDRs at BB+
------------------------------------------------------------------
Fitch Ratings corrects its earlier ratings release because the
2007 figures for the current account deficit and the fiscal
balance have been revised.

"Fitch Ratings has revised the Outlook on the Republic of
Macedonia's foreign currency and local currency Issuer Default
Ratings (IDR) to Stable from Positive.  The agency has affirmed
the IDRs at 'BB+', the Short-term foreign currency rating at 'B'
and the Country Ceiling at 'BBB-' (BBB minus).

"The downward revision in the rating Outlook to Stable reflects
both a marked widening in the current account deficit this year at
a time when financing is becoming more uncertain and adverse
political events that make the prospect of Macedonia's EU
accession more distant," says Chris Pryce, Director in Fitch's
European sovereigns group.

"Macedonia has experienced a series of political shocks this year.
In April, its application for NATO membership was rejected due to
the Greek government's objection to the use of Macedonia as the
country's name.  Many commentators expect that Greece will also
refuse to support the EU setting a start date for accession
negotiations.  The road map and final destination of EU accession
provides important economic benefits and an anchor to political
stability, particularly in view of the country's ethnic tensions
and potential instability in neighboring countries, including
Kosovo.  Additionally, the handling of national elections this
year (effectively a major EU benchmark for Macedonia) was poor.
There was sporadic violence and open corruption in some areas
which forced second and subsequent elections to be held in a
number of constituencies.  Local elections to be held next spring
will be closely watched by both domestic and international
observers to see if the malign influence of local groups/parties
in the worst affected areas has been curbed.

"Macroeconomic risks have also increased this year.  Fitch's main
concern is the rapid widening in the current account deficit
(CAD), which Fitch projects to reach around 12% of GDP this year,
compared with 7% in 2007 and a virtual balance in 2006.  On
current macroeconomic policy settings, Fitch expects only a
moderate improvement in 2009 and 2010, helped by lower oil prices.
On the other hand, the slowdown in the EU economy poses downside
risks to exports and remittances (equivalent to around 15% of
GDP), which Fitch expects to fall 3% this year.  Foreign direct
investment has remained relatively strong and could finance around
half the CAD this year.  However, private sector external
borrowing, including by the banks, is rising.  Moreover, the
global credit crunch will make it more difficult for Macedonia to
secure the capital inflows it needs to finance the CAD, risking
downward pressure on foreign exchange reserves, which have fallen
as a ratio of imports this year, and ultimately could put pressure
on the exchange rate, which has been pegged to the euro for over a
decade.

"A major driver of the widening in the CAD has been the
exceptional growth in credit to the private sector, admittedly
from a low base.  This grew by almost 40% in 2007 and despite
central bank-induced increases in interest rates and a rather
ineffectual cap on loans (set at 40%), as yet has given no clear
indication of slackening, though this is likely as capital inflows
wane.  The government has also contributed to pressures on
inflation and the CAD through its expansionary budget, which
increased expenditure.  Fitch expects the budget deficit to widen
somewhat to about 1% of GDP this year from a surplus of 0.6% in
2007.  Further expenditure increases are planned for 2009.

"Macedonia's rating continues to be underpinned by its moderate
and declining government debt-to-GDP ratio, which was 25% at end-
2007, below the 'BB' category median of 35%.  Other strengths
include a moderate external debt ratio and a track record of
macroeconomic stability.  Economic growth has strengthened in
recent years, and Fitch forecasts real GDP growth of about 6% in
2008, up from 5.1% in 2007 and 4% in 2006.  However, the global
economic slowdown is likely to cause a slowdown in 2009.  Recent
governments have pursued some reforms in the area of taxation,
bureaucratic and judicial reform although much remains to be done
before these will have the fully desired impact on economic
performance.  Macedonia rose to 71st in the World Bank Ease of
Doing Business Survey for 2009, up from 79th in 2008."


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N E T H E R L A N D S
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AZOVSTAL CAPITAL: Strong Price Reduction Cues Moody's B2 Rating
---------------------------------------------------------------
Given recent collapse in demand for semi finished steel products
and for prices especially from the CIS Moody's Investors Service
has downgraded the Ba3 corporate family rating and the Aa1.ru
national scale rating of Metinvest B.V. to B1 and Aa3.ua
respectively and the senior unsecured rating of the loan
participation notes, issued by Azovstal Capital B.V. to B2.  The
outlook on all ratings remains negative.

The rating action was prompted by a further weakening in the
demand for steel products in the Ukraine, the strong reduction of
steel prices which is expected to lead a significant reduction in
Metinvest's operating profitability and cash flow generation for
the remainder of 2008 and into 2009.  Coupled with lower than
initially expected cash flow generation Moody's considers the
short term liquidity of the group which has to renew some
significant credit facilities in the beginning of next year to be
constrained.

The negative outlook reflects the effects of the weaknesses in the
industry, the low visibility for prospects of short term recovery
and the current limitations for Ukrainian companies to receive
funding from their banks.  Moody's will continue to follow closely
the measures the company is taking to offset these negative market
developments, by reducing planned capex projects and dividend
payments.

Moody's notes that Metinvest is already planning to scale back
significant capex projects to conserve cash generated, and that
also steel production has been reduced by around 20% to reduce the
current supply/demand imbalance on the market for steel produced
in the CIS.

Although Metinvest is still considered the strongest of the
Ukrainian steel producers, with access to own iron ore and -- to
some extent -- also coking coal reserves, which should keep the
cost base at a flat level, the significant changes within a very
short period of time for the CIS steel production has raised the
extent of operating challenges for the company..

Downgrades:

  Issuer: Azovstal Capital B.V.

   * Senior Unsecured Regular Bond/Debenture, Downgraded to B2
     from B1

  Issuer: Metinvest B.V.

   * Probability of Default Rating, Downgraded to B1 from Ba3

   * Corporate Family Rating, Downgraded to a range of B1 to
     Aa3.ua from a range of Ba3 to Aa1.ua

Metinvest B.V., a company set up under Dutch law, but with major
operations in Donetsk/Ukraine is the largest steel and iron ore
producer of the Ukraine.  In 2007 the company generated revenues
of US$7.4 billion and operating profit of US$1.8 billion.
Metinvest is 75% owned by System Capital Management, an investment
holding company in the Ukraine.  25% (blocking stake) of
Metinvest's shares are owned by Smart Group based in the Ukraine.


METINVEST B.V.: Weakening Demand Cues Moody's to Cut Rating to B1
-----------------------------------------------------------------
Given recent collapse in demand for semi finished steel products
and for prices especially from the CIS Moody's Investors Service
has downgraded the Ba3 corporate family rating and the Aa1.ru
national scale rating of Metinvest B.V. to B1 and Aa3.ua
respectively and the senior unsecured rating of the loan
participation notes, issued by Azovstal Capital B.V. to B2.  The
outlook on all ratings remains negative.

The rating action was prompted by a further weakening in the
demand for steel products in the Ukraine, the strong reduction of
steel prices which is expected to lead a significant reduction in
Metinvest's operating profitability and cash flow generation for
the remainder of 2008 and into 2009.  Coupled with lower than
initially expected cash flow generation Moody's considers the
short term liquidity of the group which has to renew some
significant credit facilities in the beginning of next year to be
constrained.

The negative outlook reflects the effects of the weaknesses in the
industry, the low visibility for prospects of short term recovery
and the current limitations for Ukrainian companies to receive
funding from their banks.  Moody's will continue to follow closely
the measures the company is taking to offset these negative market
developments, by reducing planned capex projects and dividend
payments.

Moody's notes that Metinvest is already planning to scale back
significant capex projects to conserve cash generated, and that
also steel production has been reduced by around 20% to reduce the
current supply/demand imbalance on the market for steel produced
in the CIS.

Although Metinvest is still considered the strongest of the
Ukrainian steel producers, with access to own iron ore and -- to
some extent -- also coking coal reserves, which should keep the
cost base at a flat level, the significant changes within a very
short period of time for the CIS steel production has raised the
extent of operating challenges for the company.

Downgrades:

  Issuer: Azovstal Capital B.V.

   * Senior Unsecured Regular Bond/Debenture, Downgraded to B2
     from B1

  Issuer: Metinvest B.V.

   * Probability of Default Rating, Downgraded to B1 from Ba3

   * Corporate Family Rating, Downgraded to a range of B1 to
     Aa3.ua from a range of Ba3 to Aa1.ua

Metinvest B.V., a company set up under Dutch law, but with major
operations in Donetsk/Ukraine is the largest steel and iron ore
producer of the Ukraine.  In 2007 the company generated revenues
of US$7.4 billion and operating profit of US$1.8 billion.
Metinvest is 75% owned by System Capital Management, an investment
holding company in the Ukraine.  25% (blocking stake) of
Metinvest's shares are owned by Smart Group based in the Ukraine.


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P O R T U G A L
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BANCO PORTUGUES: Fitch Downgrades Individual Rating to 'F'
----------------------------------------------------------
Fitch Ratings has changed the Rating Watch on Portugal-based BPN-
Banco Portugues de Negocios, SA's (BPN) Long-term Issuer Default
Ratings (IDR) of 'BBB' to Positive (RWP) from Negative (RWN) and
placed the Short-term IDR of 'F3' on RWP, following the Portuguese
government's announcement to nationalize BPN.  BPN's RWP will be
resolved once Fitch has received more details on the bank's
nationalization, especially regarding any explicit guarantees and
BPN's future business model.

At the same time, the agency downgraded BPN's Individual rating to
'F' from 'C' and removed it from RWN.  The downgrade of BPN's
Individual rating reflects Fitch's view that the bank has faced
insurmountable challenges as an individual entity and failed.  In
the absence of government nationalization, Fitch considers that
the bank would have defaulted, in line with the agency's
definition of a 'F' Individual rating.

BPN's Support Rating and Support Rating Floor are upgraded to '2'
from '5' and to 'BBB' from 'No Floor', respectively, and put on
RWP.  The upgrade of BPN's Support rating and Support Rating Floor
reflects the intervention by the Republic of Portugal and its
propensity to support BPN, in order to stave off systemic risk for
the Portuguese banking system.  Fitch believes the Portuguese
government acted to stabilize the banking system, in line with
actions announced and taken by other governments in Europe.

Fitch has also downgraded BPN SGPS's, the 100% shareholder of BPN,
Long-term IDR to 'CCC' from 'BBB', maintaining the RWN, and the
Short-term IDR to 'C' from 'F3'and placing it on RWN.  BPN SGPS's
Individual rating is downgraded to 'F' from 'C', and removed from
RWN.  Its Support rating is affirmed at '5' and Support Rating
Floor at 'No Floor'.

The downgrade on BPN SGPS reflects the loss of BPN as its main
asset, which accounts for about 97% of total assets, following the
transfer of its shares in BPN to the Portuguese treasury.

Fitch expects to resolve BPN SGPS's RWN once the amount of the
compensation to BPN's current shareholders is made public and the
structure of the BPN SGPS following the nationalization of BPN is
known.

BPN is a small commercial bank focusing on SMEs.  BPN SGPS, which
also holds interests in consumer finance, insurance, investment
banking and asset management, was established in 2000 under SLN
SGPS, the holding company for the whole group.


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R O M A N I A
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SC HIDROELECTRICA: S&P Affirms 'BB' Ratings; Outlook Negative
-------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook to negative
from stable on Romania-based S.C. Hidroelectrica S.A., the 80%
state-owned electricity generator and supply company.  At the same
time, Standard & Poor's affirmed its 'BB' long-term foreign and
local currency corporate ratings.

"The negative outlook on Hidroelectrica reflects the possibility
of further deterioration in the macroeconomic conditions in the
Republic of Romania and the potential affect on Hidroelectrica's
credit quality," said Standard & Poor's credit analyst Tania
Tsoneva.

Standard & Poor's assessment of Hidroelectrica does not
incorporate any explicit state support and is not directly linked
to the ratings on the Republic of Romania (foreign currency
BB+/Negative/B; local currency BBB-/Negative/A-3).  However,
Standard & Poor's views Hidroelectrica as a strategic company for
the state in its role as the operator and developer of indigenous
hydropower resources, contributing to the policy of limiting the
country's dependence on energy imports.

The ratings continue to reflect uncertainties about a potential
energy sector restructuring; the company's partly regulated
earnings and the associated regulatory reset risk; its inherently
volatile cash flows and weak liquidity; significant, partly debt-
funded capital expenditure plans in the medium term; and exposure
to the remaining transitional features and worsening macroeconomic
conditions of the Romanian economy.  These factors are mitigated
by access to competitive, low-cost hydrogeneration assets with
strategic importance to the energy sector; moderate leverage to
date; and implicit support from the company's majority owner, the
Republic of Romania.

Hidroelectrica's creditworthiness may weaken if Romania's
macroeconomic environment further worsens on the back of
expansionary fiscal policy or tightening of external finance
conditions.  Despite the company's strong market position as a
provider of about 30% of total electricity consumption in the
country, it also has a quota to supply 20% of its generated
volumes at low regulated prices.  Its cash flow generation and
debt protection may be somewhat affected by higher costs and
inflation that are not recovered in full or on a timely basis
through tariff increases.  The deteriorating conditions might
affect payment collection as well.

The company's credit quality might be affected by its exposure to
financial risks in the absence of stated financial targets and
below-average financial risk management practices.  Hidroelectrica
does not hedge against interest rates and foreign exchange risks.
At the end of December 2007, all of its long-term debt was at
floating interest rates and represented borrowing in euros and
Swiss francs.  These risks are mitigated by relatively low
leverage of 7% debt to capital, some flexibility in the Romanian
leu (RON) 6.3 billion large capital investment program through
2012, and a portion of revenues in foreign currency.

At Dec. 31, 2007, the Republic of Romania guaranteed about 25% of
the company's total debt outstanding, although Standard & Poor's
does not expect such guarantees for new debt.

Downside rating factors include adverse energy sector
restructuring, credit-dilutive acquisitions, and negative
corporate restructuring measures, including the sale of large-
scale hydropower plants that are considered core to the company's
operations.  A material increase in investment expenditures or a
lack of improvement in the company's liquidity position may also
have negative consequences.

To maintain the rating, S&P expects Hidroelectrica to improve its
liquidity position while maintaining a strong financial profile
and continuing to benefit from implicit state support.

S&P would expect to revise the outlook to stable if the
macroeconomy in Romania improves or the company's liquidity
position strengthens.


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KAZANORGSINTEZ OJSC: Liquidity Concerns Cue S&P to Junk Rating
--------------------------------------------------------------
Standard & Poor's Ratings Services lowered its long-term corporate
credit rating on Russian petrochemical group Kazanorgsintez OJSC
from 'B-' to 'CCC+'.  The outlook is negative.

At the same time, S&P lowered the Russia national scale rating
from to 'ruBB' from 'ruBBB'.

S&P also lowered the issue-level rating on senior unsecured debt
issued by subsidiary Kazanorgsintez S.A. (KOS) and guaranteed by
Kazanorgsintez to 'CCC+' from 'B-'.  The recovery rating of '4',
indicating its expectation of average (30%-50%) recovery in the
event of a payment default, remains unchanged.

"The downgrade reflects uncertainty regarding Kazanorgsintez'
medium-term profitability and the group's extremely tight
liquidity position," said Standard & Poor's credit analyst Lucas
Sevenin.

The group is facing a potential covenant breach, the need to
refinance some US$360 million in short-term debt that isn't fully
covered with existing cash and bank lines, and a huge debt load
(with debt to EBITDA at 7x).  S&P also expects that the group will
generate materially negative free operating cash flow (FOCF) in
2008, due to heavy capital expenditures and a potential margin
squeeze in the industry.  The rating agency's concern is that in
the currently difficult financial markets, operational issues will
raise the hurdles Kazanorgsintez confronts to refinance.

The ratings also factor in the group's corporate governance
uncertainties, good market share for its main products, and fast-
growing demand for polyethylenes in Russia given their still-low
market penetration.

Headquartered in the Republic of Tatarstan (BB/Positive/--),
Kazanorgsintez is one of the leading petrochemical players in
Russia, with 2007 sales of US$900 million.

"The negative outlook reflects our concerns regarding
Kazanorgsintez' ability to obtain sufficient financing and improve
its EBITDA against weaker overall demand and softer prices in the
petrochemicals industry," said Mr. Sevenin.

The rating would be pressured if new bank lines or other liquidity
enhancing measures are not in put in place in the short term, if
covenants are breached and not waived, or if EBITDA decreases
versus the first-half 2008 figure.

S&P could revise the outlook to stable, and ultimately to
positive, if the group successfully obtains new financing,
improves its liquidity position, and stabilizes its operating
performance.


OPIN JSC: Fitch Holds IDR at 'B' & Changes Outlook to Stable
------------------------------------------------------------
Fitch Ratings has changed the Outlooks on Russian property
developer JSC OPIN's (OPIN) Long-term Issuer Default Rating (IDR)
and National Long-term rating to Stable from Positive.  The agency
has simultaneously downgraded OPIN's National Long-term rating to
'BBB(rus)' from 'BBB+(rus)', and affirmed its Long- and Short-term
IDR at 'B'.

The rating action reflects Fitch's belief that OPIN is unlikely to
successfully execute its planned expansion strategy during H208
and FY09 and meet its financial forecasts.  The agency expects
OPIN to deliver considerably fewer property units in 2009 and 2010
than previously forecast, with profit margins also expected to be
lower-than-anticipated, due to falling property demand and a lack
of external debt to fund new projects.

The lack of external debt -- caused by the ongoing global
liquidity squeeze affecting Russia's real estate market -- will
likely prevent OPIN from achieving its 2008 fund-raising targets.
Although OPIN appears to have sufficient funds to complete its
current projects, partly aided by a switch back to a pre-sales
model (whereby construction is funded by customer deposits), the
property developer may find it harder to fund future projects.
This could restrict its medium-term expansion plans and reduce
future cash flows.

Demand for OPIN's properties is expected to weaken during Q408 and
2009, driven by falling GDP growth (Fitch recently revised its
2009 GDP forecasts for Russia to 4% from 6.7%), and the reduction
of foreign investment into Russian real estate.  Demand is also
likely to be affected by the prospect of rising unemployment,
rising mortgage rates and increasingly negative sentiment among
potential real estate buyers.  OPIN's residential operations also
tend to concentrate on 'elite' residencies, the purchase of which
tends to be more discretionary than in the mass-market segment,
and therefore in Fitch's opinion may be more exposed to falling
demand.

OPIN's credit profile has weakened slightly in recent weeks in the
face of these pressures which are expected to persist.  However,
Fitch believes the company's IDRs retain some headroom at the
current level of 'B', and therefore the Outlook is Stable.  Fitch
also believes that OPIN is better placed than most of its Russian
real estate peers to weather current conditions.  The company
continues to benefit from its large, equity-funded landbank (which
is big enough to support approximately 40 years of operations),
its ability to self-finance projects through pre-sales, and a
competent and experienced management team.  Furthermore, OPIN has
a manageable liquidity position, with a relatively back-ended
maturity profile and sufficient cash to cover short-term debt
(US$103 million as at end-H108), interest and committed capex by
approximately 1x as of October 2008.  The company also has access
to long-term committed undrawn facilities that could be used to
fund a portion of OPIN's future capex.

Nevertheless, concerns remain, and Fitch will continue to monitor
market conditions for signs of further deterioration.  Potential
problems include a possible scale back in infrastructure
investment by the Russian government due to the country's ongoing
financial troubles.  This could reduce demand for OPIN's future
residential projects, as many of these will be located next to the
proposed - but as yet incomplete - Moscow-St. Petersburg highway.
Further depreciation of the rouble relative to the US dollar could
also raise problems for OPIN, as much of its debt is dollar-
denominated while its cash flow is predominately rouble-
denominated.  This could inflate OPIN's debt burden relative to
its cash flows.  Fitch will also continue to monitor management's
reaction to the ongoing difficulties in the real estate market.


RBC OJSC: S&P Slashes Ratings to 'CCC/ruB' on Refinancing Concerns
------------------------------------------------------------------
Standard & Poor's Ratings Services lowered its long-term corporate
credit rating on Russian media group OJSC RBC Information Systems
(RBC) to 'CCC' from 'B'.  At the same time, the Russia national
scale and senior unsecured debt ratings on RBC were lowered to
'ruB' from 'ruBBB+', and the short-term corporate credit rating
was lowered to 'C' from 'B'.  In addition, Standard & Poor's said
that it maintains the ratings on CreditWatch, but has revised the
implications to developing from negative.

"The downgrades reflect RBC's severe liquidity problems, arising
from material impairments to its investment portfolio and the
uncertain progress in its refinancing efforts, in an environment
of particularly tough capital market conditions in Russia," said
Standard & Poor's credit analyst Raam Ratnam.

"The revised CreditWatch placement follows the management team's
efforts to restructure the group's short-term debt and explore
additional sources of long-term financing, including attracting
new equity investors."

The recent sharp fall in equity prices in Russia has had a
dramatic effect on the value of the group's financial investments
-- which S&P currently views as illiquid and of highly uncertain
value.  RBC no longer has sufficient liquid assets to cover debt
obligations through to the end of 2009.

At this stage, RBC's capacity to meet its debt obligations is
therefore dependent on additional equity financing, the rollover
of debt maturities, or issuance of new debt.  Although S&P
acknowledges that these financial resources could become available
in the short term -- provided management is able to
progress its refinancing plans -- this move remains beset with
uncertainties in the current market conditions.  A failure to
secure such resources could rapidly prompt a default.

Beyond the immediate liquidity concerns, RBC's business
performance continues to suggest higher long-term credit
fundamentals.  However, S&P believes that the pace of growth in
the Russian advertising market has slowed down overall, with some
sectors significantly curtailing their advertising expenditures.
In our opinion, this will mean that RBC will be unable to sustain
its strong operating performance of the first half of 2008 in the
second half of the year and into 2009.  Nevertheless, if the near-
term financing difficulties can be overcome, RBC has the potential
to build on its strong market positions in several segments of the
Russian media sector.

"In resolving the CreditWatch, we will take into account RBC's
plans to refinance its 2009 debt maturities and put in place
suitable financing to cover debt obligations at least until
financial year-end 2009," added Mr. Ratnam.  "We will also expect
the group to provide details of how it will reduce its costs base
and control capital expenditures, while at the same time
continuing to increase its share of the Russian media market.
Furthermore, as part of our review, we will reassess the group's
efforts to improve corporate governance, risk management, internal
controls, and operations to better protect the interests of its
bondholders and stakeholders."

On resolution of the CreditWatch, the ratings could be either
lowered, upgraded, or affirmed.  A further downgrade would reflect
the group's inability to address its near-term refinancing needs.
Equally, the ratings could be upgraded or affirmed if RBC is able
to rapidly secure its 2008/2009 debt obligations through adequate
refinancing and show prudent liquidity management.


* RUSSIA: PM Says Banking Industry Has Enough Liquidity
-------------------------------------------------------
The Russian banking industry has sufficient liquidity for all
settlements and crediting, despite the ongoing global financial
crisis, RIA Novosti reports, citing First Deputy Prime Minister
Igor Shuvalov.

"At the current moment we understand that cash, which has been
provided to the banking sector, is sufficient and the banking
industry has enough liquidity to carry out both settlement
operations and provide credits," Mr. Shuvalov was quoted by RIA
Novosti as saying.

Mr. Shuvalov also urged Russian banks to provide financial aid to
auto-making, the defense and industry complex, construction and
retail trade, the report notes.

Russia's government and Central Bank have recently carried out
urgent measures to inject billions of U.S. dollars into the
domestic financial market in an effort to to shore up its
liquidity after the global credit crisis hit the country, the
report relates.

Russia's stock markets have lost around two thirds of their value
since their May highpoints, amid declining oil prices and other
investor concerns, RIA Novosti adds.


* Russian Gov't Measures Ease Emerging-Market Oil & Gas Pressures
-----------------------------------------------------------------
Upward rating momentum for Russia and its oil and gas industry has
come to an abrupt end with the dramatic drop in oil prices and
major turmoil in the global financial markets.  Still, S&P's
ratings and outlooks on the majority of Russian oil and gas
companies remain unchanged, said Standard & Poor's Ratings
Services in a report titled "Russian Government Initiatives
Mitigate Liquidity Pressures In Emerging-Market Oil & Gas
Industry."

"We expect the various liquidity measures taken by the Russian
government and initiatives to reduce the tax burden on the oil
industry to have a stabilizing effect, particularly as liquidity
and cash flows in fourth-quarter 2008 will be significantly
impacted by lower oil prices and the export tax lag," said
Standard & Poor's credit analyst Karl Nietvelt.

These measures, combined with S&P's use of conservative oil price
assumptions when analyzing oil and gas companies, means that the
impact on the ratings in the sector in Russia, Kazakhstan, and
South Africa is likely to be limited.


* Most Rated Russian Local Gov'ts. to Withstand Economic Pressure
-----------------------------------------------------------------
After numerous positive rating actions on local and regional
governments in The Russian Federation between 2006 and mid-2008,
the creditworthiness of rated Russian LRGs is expected to
stabilize, according to a report published on Nov. 3, 2008, by
Standard & Poor's Ratings Services.

The report card titled "Most Rated Russian Local And Regional
Governments Set To Withstand Economic Pressure," highlights the
need for further political and administrative reforms and better
financial management, and indicates that negative rating actions
on some of those entities most affected by the recent market
turmoil are also likely.

"The immediate effect of deteriorating borrowing conditions,
coupled with tightening liquidity on those LRGs with high
refinancing requirements by the end of this year, has already
resulted in several -- albeit limited -- downgrades and
CreditWatch placements," said Standard & Poor's credit analyst
Boris Kopeykin.

The expected long-term consequences of the credit market
dislocation are the deceleration of economic growth in the Russian
economy in 2009-2010 and, consequently, weaker budget revenue
growth in 2009-2010.  This could potentially lead to weaker
financial performance unless appropriate measures are taken. The
increased need for LRGs to support related companies may put
additional pressure on their budgets.  Moreover, S&P doesn't
expect material improvements in the quality of Russia's
institutional framework or the LRGs' financial flexibility in the
short term.  The state's system of interbudgetary relationships
should remain broadly unsupportive, so, for the time being, S&P
does not factor in an assumption of timely federal support for
debt service in ratings on Russian LRGs.

"Nevertheless, we do not expect an overall or radical
deterioration of Russian LRGs' credit quality because most of them
will continue to demonstrate economic growth, improve management
sophistication, enjoy relatively sound financial performance, and
generally keep debt low," said Mr. Kopeykin.  "The effects of
revenue growth, which generally resulted in a sound budgetary
performance, acceleration of capital expenditures, cash
accumulation, and easing of debt burdens, and was the main factor
supporting most of the positive rating actions since the start of
the decade, will somewhat abate, but will not fully disappear in
2009."


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KAUPTHING BANK: Swedish Branch Sells Pension Unit to Employees
--------------------------------------------------------------
Kaupthing Bank hf's Swedish branch has sold its pension unit
Kaupthing Pension Consulting to a group of employees for an
undisclosed amount, the Associated Press reports.

The company, as cited by the report, said the group is led by the
unit's chief executive Dick Simonsson.

"Kaupthing Sweden has, for some time, aimed at selling the wholly
owned subsidiary KPC.  The sale is completely in line with
customers' demand for a totally independent pension consultancy,"
Kaupthing Sweden spokesman Peter Borsos was quoted by the report
as saying.

The new company, the report notes, will change its name but will
continue to cooperate with Kaupthing Sweden.

                   About Kaupthing Bank

Headquarted in Reykjavik, Iceland, Kaupthing Bank --
http://www.kaupthing.com-- is engaged in the provision of
financial services, such as private banking, asset management,
pension services, brokerage services, investment banking, as well
as corporate and retail banking.  The Bank's offer is targeted at
companies, institutional investors and individuals. The Bank is
operational in thirteen countries, including Luxembourg,
Switzerland, the Nordic countries, the United Kingdom and the
United States.  The main subsidiaries include Kaupthing Singer &
Friedlander and FIH Erhvervsbank.

                         *    *    *

As reported in the Troubled Company Reporter-Europe on
October 13, 2008, Fitch Ratings downgraded Kaupthing Bank hf.'s
Long-term Issuer Default rating to 'D' from 'CCC' and removed it
from Rating Watch Evolving.  This follows the announcement that
Kaupthing is now subject to similar arrangements as its two
Icelandic peers, Glitnir Banki and Landsbanki Islands, with the
Icelandic authorities effectively seizing control of the bank.

At the same time, Moody's Investors Service downgraded the bank
financial strength rating (BFSR) of Kaupthing Bank hf to E from
D+, its long-term deposit ratings to Caa1 from Baa3, the long-term
senior debt ratings to Caa2 from Ba1.  In addition, Moody's
downgraded the bank's subordinated debt to C from Ba2 and its
preferred stock to C from B1.  The bank's short-term rating was
downgraded to Not-Prime from P-3.  Moody's is maintaining
Kaupthing's long-term deposit ratings, the long-term senior debt
ratings and its BFSR on review for further possible downgrade.


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BREITENMOSER ISO: Creditors Must File Proofs of Claim by Nov. 15
----------------------------------------------------------------
Creditors owed money by SC Breitenmoser Iso are requested to file
their proofs of claim by Nov. 15, 2008, to:

         Arthur Breitenmoser
         Liquidator
         Hochbuehlstrasse 32
         9532 Rickenbach
         Switzerland

The company is currently undergoing liquidation in Rickenbach.
The decision about liquidation was accepted at an extraordinary
shareholders' meeting held on Oct. 3, 2008.


COOLWAVE JSC: Deadline to File Proofs of Claim Set November 14
--------------------------------------------------------------
Creditors owed money by JSC Coolwave are requested to file their
proofs of claim by Nov. 14, 2008, to:

         Bruno von Allmen
         Liquidator
         Ch=E4sereiacher 4
         3317 Limpach
         Switzerland

The company is currently undergoing liquidation in Kirchberg BE.
The decision about liquidation was accepted at an extraordinary
shareholders' meeting held on Aug. 19, 2008.


GIVING BASKET: Creditors Have Until Nov. 14 to File Claims
----------------------------------------------------------
Creditors owed money by LLC The Giving Basket are requested to
file their proofs of claim by Nov. 14, 2008, to:

         Robert Gottschalk
         Liquidator
         Hofmatt 46
         6332 Hagendorn
         Switzerland

The company is currently undergoing liquidation in Cham.  The
decision about liquidation was accepted at an extraordinary
shareholders' meeting held on Sept. 18, 2008.


HR MANAGEMENT: Proofs of Claim Filing Deadline is Nov. 14
---------------------------------------------------------
Creditors owed money by LLC HR Management Zug are requested to
file their proofs of claim by Nov.  14, 2008, to:

         Susanne Koller Brunner
         Quantenweg 2
         8360 Eschlikon
         Switzerland

The company is currently undergoing liquidation in Zug.  The
decision about liquidation was accepted at an extraordinary
shareholders' meeting held on Sept. 25, 2008.


LMB LLC: Creditors' Proofs of Claim Due by Nov. 14
--------------------------------------------------
Creditors owed money by LLC LMB are requested to file their proofs
of claim by Nov. 14, 2008, to:

         LLC Innoplus
         Liquidator
         Rundbuckstrasse 6
         8212 Neuhausen am Rheinfall
         Switzerland

The company is currently undergoing liquidation in Neuhausen am
Rheinfall.  The decision about liquidation was accepted at an
extraordinary shareholders' meeting held on Sept. 22, 2008.


STARS & VIBES: Nov. 15 Set as Deadline to File Claims
-----------------------------------------------------
Creditors owed money by LLC Stars & Vibes Publishing are requested
to file their proofs of claim by Nov. 15, 2008, to:

         P. Alioth
         Liquidator
         Allschwilerweg 24
         4102 Binningen
         Switzerland

The company is currently undergoing liquidation in Allschwil.  The
decision about liquidation was accepted at an extraordinary
shareholders' meeting held on Sept. 24, 2008.


WOBAG-IMMOBILIEN JSC: Creditors Must File Claims by Nov. 15
-----------------------------------------------------------
Creditors owed money by JSC Wobag-Immobilien, Sempach are
requested to file their proofs of claim by Nov. 15, 2008, to:

         Willy Blattler
         Guggistrasse 7
         6055 Luzern
         Switzerland

The company is currently undergoing liquidation in Sempach.  The
decision about liquidation was accepted at an extraordinary
shareholders' meeting held on Sept. 11, 2008.


XARDAS LLC: Deadline to File Proofs of Claim Set Nov. 15
--------------------------------------------------------
Creditors owed money by LLC Xardasin are requested to file their
proofs of claim by Nov. 15, 2008, to:

         Hans Reichlin
         Liquidator
         Chueweid 11
         8906 Bonstetten
         Switzerland

The company is currently undergoing liquidation in Rueschlikon.
The decision about liquidation was accepted at an extraordinary
shareholders' meeting held on Aug. 7, 2008.


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AZOVSTAL CAPITAL: Strong Price Reduction Cues Moody's B2 Rating
---------------------------------------------------------------
Given recent collapse in demand for semi finished steel products
and for prices especially from the CIS Moody's Investors Service
has downgraded the Ba3 corporate family rating and the Aa1.ru
national scale rating of Metinvest B.V. to B1 and Aa3.ua
respectively and the senior unsecured rating of the loan
participation notes, issued by Azovstal Capital B.V. to B2.  The
outlook on all ratings remains negative.

The rating action was prompted by a further weakening in the
demand for steel products in the Ukraine, the strong reduction of
steel prices which is expected to lead a significant reduction in
Metinvest's operating profitability and cash flow generation for
the remainder of 2008 and into 2009.  Coupled with lower than
initially expected cash flow generation Moody's considers the
short term liquidity of the group which has to renew some
significant credit facilities in the beginning of next year to be
constrained.

The negative outlook reflects the effects of the weaknesses in the
industry, the low visibility for prospects of short term recovery
and the current limitations for Ukrainian companies to receive
funding from their banks.  Moody's will continue to follow closely
the measures the company is taking to offset these negative market
developments, by reducing planned capex projects and dividend
payments.

Moody's notes that Metinvest is already planning to scale back
significant capex projects to conserve cash generated, and that
also steel production has been reduced by around 20% to reduce the
current supply/demand imbalance on the market for steel produced
in the CIS.

Although Metinvest is still considered the strongest of the
Ukrainian steel producers, with access to own iron ore and -- to
some extent -- also coking coal reserves, which should keep the
cost base at a flat level, the significant changes within a very
short period of time for the CIS steel production has raised the
extent of operating challenges for the company..

Downgrades:

  Issuer: Azovstal Capital B.V.

   * Senior Unsecured Regular Bond/Debenture, Downgraded to B2
     from B1

  Issuer: Metinvest B.V.

   * Probability of Default Rating, Downgraded to B1 from Ba3

   * Corporate Family Rating, Downgraded to a range of B1 to
     Aa3.ua from a range of Ba3 to Aa1.ua

Metinvest B.V., a company set up under Dutch law, but with major
operations in Donetsk/Ukraine is the largest steel and iron ore
producer of the Ukraine.  In 2007 the company generated revenues
of US$7.4 billion and operating profit of US$1.8 billion.
Metinvest is 75% owned by System Capital Management, an investment
holding company in the Ukraine.  25% (blocking stake) of
Metinvest's shares are owned by Smart Group based in the Ukraine.


BUSINESS TECHNOGROUP: Creditors Must File Claims by Nov. 16
-----------------------------------------------------------
Creditors of LLC Business Technogroup Ltd. (code EDRPOU 35534301)
have until Nov. 16, 2008, to submit proofs of claim to:

         Economic Court of Kiev
         B. Hmelnitskiy str., 44-b
         01030 Kyiv
         Ukraine

The Arbitration Court of Kyiv commenced bankruptcy proceedings
against the company after finding it insolvent on Oct. 9, 2008.
The case is docketed as 24/383-b.


CENTRAL EUROPEAN: S&P Affirms 'BB' Ratings; Outlook Negative
------------------------------------------------------------
Standard & Poor's Ratings Services revised to negative from stable
the outlook on Bermuda-based emerging markets TV broadcaster
Central European Media Enterprises Ltd. (CME).  At the same time,
the 'BB' long-term foreign and local currency corporate credit
ratings were affirmed.  S&P also affirmed its 'BB' debt ratings on
CME's US$475 million senior secured convertible notes due 2013 and
its EUR245 million and EUR150 million notes due 2012 and 2014,
respectively.

"The outlook revision reflects our concerns that Central European
Media Enterprises' credit measures may not remain commensurate
with the 'BB' ratings over the next few quarters," said Standard &
Poor's credit analyst Manuela Gabetta.

The group's debt leverage has been increasing throughout 2008 as
the result of an aggressive acquisition policy.  Standard & Poor's
expects fully adjusted gross debt to EBITDA to approach 4.0x at
the end of financial 2008, compared with 3.5x at Sept. 30, 2008,
and well below the 2.3x reported at Dec. 31, 2007.

CME's aggressive financial policy raises concerns in light of the
increased macroeconomic uncertainties and lower revenue visibility
in the Eastern European countries in which the group operates,
notably Ukraine (foreign currency B/Negative/B; local currency
B+/Negative/B) and, to a lesser extent, the Republic of Romania
(foreign currency BB+/Negative/B; local currency BBB-/Negative/
A-3).

CME generates most of its revenues from selling TV advertising
space.  The attractiveness of its free-to-air TV channels to
advertisers could, therefore, decline if economic conditions in
its main local markets weaken, as the recent situation in Ukraine
demonstrates.  In addition, the gradual devaluation of CME's main
local operating currencies against its reporting currency, the
U.S. dollar, has forced the group to revise its consolidated
EBITDA guidance (before corporate costs) to US$370 million from
the US$425 million originally forecast in early 2008.  This is a
concern because credit measures may deteriorate further if the
local currencies of the countries where CME operates continue to
devaluate, since the group's debt is in euros and U.S. dollars and
is not hedged for debt principal.  The group's debt increase
follows the merger-and-acquisition transactions made during the
year aimed at strengthening its market positions in Eastern
Europe.  These transactions include the buyout of the remaining
40% equity interest in the Ukrainian broadcaster Studio1+1 that
CME didn't already own and the acquisition of an 80% interest in
two Bulgarian television channels.

The ratings on CME remain burdened by its high concentration of
profitability in a single TV channel in the Czech Republic
(foreign currency A/Stable/A-1; local currency A+/Stable/A-1) and
Romanian TV channels; the potential for regulatory interference;
and political risks.  These factors are mitigated by the group's
leading position in the main markets in which it operates and its
position as a producer of established, locally made content.

S&P may lower the ratings if the group fails to restore adequate
credit measures for the ratings, such as adjusted total debt to
EBITDA in the range of 3.5x on a sustainable basis.  If CME's
largest local operations were to significantly underperform or if
the group were to embark on any additional acquisition that could
further weaken its credit protection measures, S&P could also
lower the ratings.

Conversely, S&P could revise the outlook to stable, despite the
unfavorable macroeconomic conditions, if the group manages to
achieve sound EBITDA growth and healthy operating cash flow
generation that would translate into sustainable adjusted total
leverage of 3.5x.

The outlook does not incorporate potential severe macroeconomic
stress on one or several of the group's major operations.


INDUSTRIAL UNION: Moody's Puts B1 Rating on Review for Downgrade
----------------------------------------------------------------
Moody's Investors Service has put the B1 corporate family rating
for Industrial Union of Donbass on review for possible downgrade.

The rating action was prompted by recent collapse in demand for
steel products and consequential significant reduction in prices
for steel products from the CIS steel producers as well as the low
visibility for prospects of short term recovery and the current
limitations for Ukrainian companies to receive funding from their
banks.  These developments are expected to have a negative effect
on the company's profitability and cash flow generation.

The review will focus on:

   -- over the next few weeks monitoring of the operating
      performance of the company to see whether there is an
      indication of stabilization in the production level and
      prices;

   -- assessing the profitability level and cash flow generation
      capability under the negative market developments; and

   -- assessing the availability of liquidity to cover operating
      needs including changes in working capital, debt repayments
      and mandatory capex investments.

Moody's notes that ISD is already cutting back significant capex
investments to preserve generated cash and that steel production
has been reduced by 50% at Ukrainian plants to reduce the current
supply and demand imbalance on the market for steel produced in
the CIS.

Due to the fact that significant changes took place within a short
period of time, the susceptibility of ISD to weather the current
market turmoil is being tested which creates an additional
pressure on the current rating level.

Industrial Union of Donbass is one of the leading steel producers
in Eastern Europe and is one the largest in Ukraine with an annual
production of 10.1 million tones of liquid steel in 2007.

The company's production assets are located in four sites, with
two mills in the Ukraine and one each in Hungary and Poland.
Through its JV with Duferco, the company also has equity interests
in Danish Steel in Denmark, MakStil in Macedonia and supplies
slabs to Farrell in the US.  ISD is primarily exporting its
products (85% of 2007 revenues) with the main export markets being
Europe (45% of total sales) following by sales to South-East Asia
(20% of the sales).

The company is indirectly controlled by several individuals or
their representatives.

In 2007, the company reported revenue of US%6.15 billion and
US$1.3 billion of EBITDA based on audited consolidated financial
statements.


INSTITUTE OF GEOPOLITICS: Creditors Must File Claims by  Nov. 16
----------------------------------------------------------------
Creditors of  LLC Kiev Institute of Geopolitics, Economics and
Management (code EDRPOU 25635811) have until Nov. 16, 2008, to
submit proofs of claim to:

         Mrs. Olga Zalutskaya
         Liquidator
         Ap. 45
         Livarnaya Str. 9
         49000 Dniepropetrovsk
         Ukraine

The Arbitration Court of Kyiv commenced bankruptcy proceedings
against the company after finding it insolvent on Aug. 19, 2008.
The case is docketed as 15/782-b.

         Economic Court of Kiev
         B. Hmelnitskiy str., 44-b
         01030 Kyiv
         Ukraine


METINVEST B.V.: Weakening Demand Cues Moody's to Cut Rating to B1
-----------------------------------------------------------------
Given recent collapse in demand for semi finished steel products
and for prices especially from the CIS Moody's Investors Service
has downgraded the Ba3 corporate family rating and the Aa1.ru
national scale rating of Metinvest B.V. to B1 and Aa3.ua
respectively and the senior unsecured rating of the loan
participation notes, issued by Azovstal Capital B.V. to B2.  The
outlook on all ratings remains negative.

The rating action was prompted by a further weakening in the
demand for steel products in the Ukraine, the strong reduction of
steel prices which is expected to lead a significant reduction in
Metinvest's operating profitability and cash flow generation for
the remainder of 2008 and into 2009.  Coupled with lower than
initially expected cash flow generation Moody's considers the
short term liquidity of the group which has to renew some
significant credit facilities in the beginning of next year to be
constrained.

The negative outlook reflects the effects of the weaknesses in the
industry, the low visibility for prospects of short term recovery
and the current limitations for Ukrainian companies to receive
funding from their banks.  Moody's will continue to follow closely
the measures the company is taking to offset these negative market
developments, by reducing planned capex projects and dividend
payments.

Moody's notes that Metinvest is already planning to scale back
significant capex projects to conserve cash generated, and that
also steel production has been reduced by around 20% to reduce the
current supply/demand imbalance on the market for steel produced
in the CIS.

Although Metinvest is still considered the strongest of the
Ukrainian steel producers, with access to own iron ore and -- to
some extent -- also coking coal reserves, which should keep the
cost base at a flat level, the significant changes within a very
short period of time for the CIS steel production has raised the
extent of operating challenges for the company.

Downgrades:

  Issuer: Azovstal Capital B.V.

   * Senior Unsecured Regular Bond/Debenture, Downgraded to B2
     from B1

  Issuer: Metinvest B.V.

   * Probability of Default Rating, Downgraded to B1 from Ba3

   * Corporate Family Rating, Downgraded to a range of B1 to
     Aa3.ua from a range of Ba3 to Aa1.ua

Metinvest B.V., a company set up under Dutch law, but with major
operations in Donetsk/Ukraine is the largest steel and iron ore
producer of the Ukraine.  In 2007 the company generated revenues
of US$7.4 billion and operating profit of US$1.8 billion.
Metinvest is 75% owned by System Capital Management, an investment
holding company in the Ukraine.  25% (blocking stake) of
Metinvest's shares are owned by Smart Group based in the Ukraine.


NASH #1: Creditors Must File Claims by November 16
--------------------------------------------------
Creditors of LLC Nash #1 (code EDRPOU 32951529) have until
Nov. 16, 2008, to submit proofs of claim to:

         Mr. R. Breus
         Liquidator
         Ap. 70
         Novoprudnaya Str. 4
         61018 Kharkov
         Ukraine

The Arbitration Court of Kharkov commenced bankruptcy proceedings
against the company after finding it insolvent on Oct. 6, 2008.
The case is docketed as B-48/131-08.

         Economic Court of Kharkov Region
         Derzhprom, 8-th
         Svoboda Square, 5
         61022 Kharkov
         Ukraine

The Debtor can be reached at:

         LLC Nash #1
         Ivan Dubovoy Lane, 13
         61003 Kharkov
         Ukraine


FIKS LLC: Creditors Must File Claims by November 16
---------------------------------------------------
Creditors of LLC Fiks (code EDRPOU 30615216) have until Nov. 16,
2008, to submit proofs of claim to:

         Mrs. Nathalie Ivleva
         Liquidator
         Ap. 9
         S. Tarkhov Str. 5
         61189 Kharkov
         Ukraine
         Tel: 8(067)902-72-57

The Arbitration Court of Kharkov commenced bankruptcy proceedings
against the company after finding it insolvent on Oct. 6, 2008.
The case is docketed as B-39/122-08.

         Economic Court of Kharkov Region
         Derzhprom, 8-th
         Svoboda Square, 5
         61022 Kharkov
         Ukraine

The Debtor can be reached at:

         LLC Fiks
         Sverdlov Str. 19
         Kolomak
         Kharkov
         Ukraine


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=3D=3D
U N I T E D   K I N G D O M
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=3D=3D


ARTHRO KINETICS: In Talks to Sell Business; May Liquidate
---------------------------------------------------------
Arthro Kinetics plc provided a business update on Wednesday,
November 5.

Arthro Kinetics announced on September 29, 2008 that it was in
preliminary discussions which may or may not lead to an offer for
the issued share capital of the Company.  These discussions
continue but there is no material progress to report and the
Directors are concerned by the speed of recent progress which it
understands has been hampered in part by the impact of the current
economic climate on obtaining acquisition funding.

Of the various other discussions to realize value from certain
assets within the group, one has progressed to the stage of
proceeding to legal documentation.  The Company is deemed through
its subsidiary companies to have control over the Cell and Tissue
Bank Austria (CTBA) and consolidates its results accordingly.  The
owners of the CTBA are in negotiation for its sale.  Completion of
the sale would enable the repayment by CBTA of a loan of
approximately EUR1 million made to it by an Arthro Kinetics
subsidiary which would materially enhance the group's cash
position.  The transaction is targeted to complete by the end of
November 2008 and, although negotiations are continuing, there can
be no certainty this transaction will complete.

The cash position of the group remains in line with the Company's
interim results announcement of September 29, 2008 indicating
sufficient cash within the group to support operations through the
first quarter of 2009.  This assessment continues to be made on a
going concern basis.  The Directors have assessed the business in
the event it cannot continue on a going concern basis and
concluded that the group's forecast cash position at the end of
November 2008 will match the costs of a solvent liquidation of the
group.

The Directors are focused on achieving sufficient certainty with
the negotiations for the sale of the group and/or the repayment of
the loan from the CTBA by the end of November to continue trading
as a going concern.  On this basis the group will continue to
minimize costs where possible, including headcount reductions in
non revenue generating areas, to reduce the group's cash burn.
One area of consideration is the cost of maintaining the public
listing on AIM.  This is a material cost to the group in terms of
external compliance costs and the cost and structure of the
Company's board.  The party in discussions for the purchase of the
group is not interested in maintaining the public listing
following the transaction.  Should there be sufficient certainty
in the group's ongoing trading position from the end of November
the Directors will approach shareholders with a recommendation to
de-list the Company.  In the absence of sufficient certainty with
regard to transactions at the end of November, the Directors will
take steps to close the business.

Headquartered in Macclesfield, England, Arthro Kinetics plc (AIM:
AKI) -- http://www.arthro-kinetics.com/-- is an orthopedics
company dedicated to regenerating joint mobility and spinal disc
function.


BLUESTONE SECURITIES: S&P Puts 'BB' Rtngs on 3 Classes on WatchNeg
------------------------------------------------------------------
Standard & Poor's Ratings Services placed on CreditWatch positive
its credit ratings on the class B and C notes series 2004-01 and
the class B notes series 2005-01 issued by Bluestone Securities
PLC.  S&P also placed on CreditWatch negative S&P's ratings on the
class C to E notes series 2006-01 and the class C, Da, and Db
notes series 2007-01 issued by Bluestone Securities.  All other
notes in these transactions remain unaffected.

The CreditWatch placements follow an initial review of the most
recent information that S&P has received in September 2008.

As of the September 2008 investor report, the pool factor was
13.24% in Bluestone 2004-01 and 20.42% in Bluestone 2005-01.  The
reserve fund in these transactions does not amortize and is now
9.92% for Bluestone 2004-01 and 3.93% for Bluestone 2005-01.  The
credit enhancement has improved and S&P will now carry out a more
detailed analysis to investigate whether the affected classes can
attain a higher rating level.

Bluestone 2006-01 and Bluestone 2007-01 have experienced higher
losses compared with the earlier deals at a similar stage in their
seasoning.  There is concern that, given the house price decline
since the origination of these deals, repossessions and losses
will continue to increase.  Both deals have interest-only classes
outstanding which, together with the high losses experienced, have
resulted in reducing excess spread.  This increases the likelihood
of future reserve fund draws and a potential effect on the junior
notes of the transaction.

S&P will continue to monitor the performance of these transactions
using the most recent loan-level data for a full credit and cash
flow analysis.  S&P will pay particular attention to current
repossessions, losses, and collection rates.  The results of S&P's
analysis, together with any effects on the ratings on any of the
notes, will be released in due course.

                           RATINGS LIST

                 Rating
Class       To                From
-----       --                ----

Ratings Placed On CreditWatch Positive

Bluestone Securities PLC
GBP288 Million Mortgage-Backed Floating-Rate Notes Series 2004-01

B           A/Watch Pos       A
C           BBB/Watch Pos     BBB

Bluestone Securities PLC
GBP108.05 Million Mortgage-Backed Floating-Rate Notes Series 2005-
01

B           A/Watch Pos       A

Ratings Placed On CreditWatch Negative

Bluestone Securities PLC
GBP109.98 Million And EUR164.6 Mortgage-Backed Floating-Rate Notes
Series 2006-01

C           BBB/Watch Neg     BBB
D           BB/Watch Neg      BB
E           B/Watch Neg       B

Bluestone Securities PLC
EUR80 Million And GBP405.58 Million Mortgage-Backed Floating-Rate
Notes Series 2007-01

C           BBB/Watch Neg     BBB
Da          BB/Watch Neg      BB
Db          BB/Watch Neg      BB


CASTLE HOLDCO: Liquidity Concerns Spur S&P to Junk L-T Rating
-------------------------------------------------------------
Standard & Poor's Ratings Services lowered its long-term corporate
credit rating on Castle HoldCo 4, the holding company for U.K.-
based real-estate services provider Countrywide PLC, to 'CCC from
'B' due to concerns over the company's ability to maintain
adequate liquidity to meet its debt-servicing commitments.  The
outlook is negative.

"The downgrade reflects Castle HoldCo 4's worsening liquidity
position during the first nine months of 2008, and our expectation
that this position will progressively deteriorate over the next 12
months as transaction volumes remain at depressed levels," said
Standard & Poor's credit analyst Mohammed Fayek.  "Given the
U.K.'s weakening economic environment, the poor outlook for U.K.
house prices, and extremely tight lending conditions, we believe
Castle HoldCo 4 will find it increasingly difficult to improve
financial performance and maintain adequate liquidity during
fiscal 2009."

In the nine months to Sept. 30, 2008, the company reported
revenues of GBP327 million, representing a 33% decline relative to
the same period in 2007.  Castle HoldCo 4's leading position in
the U.K. housing market, and its substantial streamlining efforts,
have provided limited benefits in view of the difficult industry
fundamentals and the company's current debt level.

Extremely harsh trading conditions have exceeded the group's cost-
cutting efforts, resulting in a net decrease in cash balances
(excluding the GBP90 million revolver utilization) of GBP64
million in the nine months ended Sept. 30, 2008.  If, as S&P
expects, market conditions do not improve markedly, the group will
exhaust its sources of liquidity before the end of 2009.

Market conditions remain extremely poor and ongoing cash outflows
are expected to progressively erode the company's liquidity
sources over the next 12 months.  Ratings will likely remain under
pressure over the near term and any further weakening in liquidity
would result in a further downgrade.  In the event that
transaction volumes improve, and cash outflows were to be
reversed, a revision of the outlook to stable could be considered.


CEVA GROUP: Moody's Affirms Caa1 Rating on EUR225 Mil. Sr. Notes
----------------------------------------------------------------
Moody's Investors Service has affirmed CEVA Group plc Corporate
Family Rating of B2 and all ratings of the rated debt instruments
issued by the Group but changed the outlook to negative from
stable.  The action was prompted by Moody's concerns on
deteriorating market conditions in the broader logistic industry
and the possible negative impact on the company's weak financial
profile.

"The rating action reflects Moody's expectation that the logistic
segment might endure a period of soft demand and pricing pressure
that might result in a delay in the previously anticipated
improvements in the company's credit metrics," said Paolo
Leschiutta a Moody's Vice President - Senior Analyst and
responsible for CEVA.  "Moody's acknowledges the company' success
in growing the business during difficult market conditions, with
revenues growing 10% on a pro-forma basis during the nine months
period ending September 2008, although remains concerned that
operating performance and cash flow generation during the current
year might fell short of expectation, and that thin operating
margins offer modest headroom to accommodate sudden shocks in the
market," continued Mr. Leschiutta.

During the nine months period ending September 2008, the company
reported revenues of EUR4,762 million and an EBITDA margin of
5.5%, slightly lower than the year before (6% at September 2007)
on a pro-forma basis.  In addition Moody's notes the significant
interest burden and one off items (although the majority of these
are not expected to be recurring) that quarter after quarter erode
cash flow generation.

CEVA's B2 Corporate Family Rating reflects the group's sound
business profile offset by the weak credit metrics.  The rating is
supported by the group's global reach and relatively large size,
the cross-selling opportunities provided by the combination of the
Contract Logistic activity and Freight Management business and the
improved diversification in terms of geography and customer base
following the acquisition of EGL in 2007.  However, the rating
also reflects CEVA's high financial leverage following the
acquisitions, the current weak economic outlook in key reference
markets and the Group's exposure to the automotive and high
technology sectors (which, however, Moody's recognizes is reducing
over time).  The current B2 rating also incorporates Moody's
expectations that financial leverage will reduce over time.

Erosion in operating performance, inability to make progress on
constant de-leveraging with Debt to EBITDA ratio -- adjusted for
leases and pension liability -- reducing below 6.5x at YE 08,
weakening of operating cash flow generation (resulting in negative
free cash flow generation) or a reduction in liquidity headroom
would exert immediate downward pressure on the ratings.  Ratings
could be also downgraded in the case of a change in Moody's
perception of current market conditions.  In Moody's view,
however, CEVA has sufficient liquid sources to handle daily
operational flows thanks to stable cash flow generation, EUR126
million of cash on balance sheet as of September 30, 2008 (part of
which was not readily available), a EUR190 million committed
senior secured revolving facility (which is currently fully
utilized but partially maintained as cash balance).  Moody's also
notes the modest working capital and investments commitments and
the basically absence of long term debt maturing within the next
twelve months.

Ratings affirmed are:

   -- CEVA Corporate Family Rating and Probability of Default
      Rating of B2;

   -- The senior secured Ba2 (LGD2, 18%) rating on the US$1.01
      billion term loan due 2013, on the US$250 million credit
      facility due in 2013 and on the US$ 250 Revolving credit
      facility due in 2012;

   -- The Senior Secured Second lien B3 (LGD5, 71%) rating on the
      US$400 million notes due 2014;

   -- The Senior Unsecured B3 (LGD5, 71%) rating on the EUR505
      million notes due 2014;

   -- The Senior Subordinated Caa1 (LGD6, 95%) rating on the
      EUR225 million notes due 2016.

The outlook is negative.

CEVA Group plc (CEVA) is the fourth-largest integrated logistic
provider in the world in terms of revenues, which at year-end
December 2007 stood at approximately EUR6.3 billion on a pro-forma
basis and at nine month end September 2008 stood at EUR4.8
billion.  As of year-end 2007, CEVA had a presence in over 100
countries worldwide, employing more than 54,000 people and
managing in excess of 8.6 million square meters of warehouse
facilities.  CEVA's activities include the former Contract
Logistics (CL) business as acquired from TNT N.V. during 2006
together with the Freight Management (FM) business of EGL, a US-
based company that the group acquired in August 2007.


GALVANIC TECHNICAL: Taps Joint Administrators from Baker Tilly
---------------------------------------------------------------
John Ariel and Matthew Wild of Baker Tilly Restructuring and
Recovery LLP were appointed joint administrators of Galvanic
Technical Services Ltd. on Oct. 21, 2008.

Baker Tilly -- http://www.bakertilly.co.uk-- is an independent
firm of chartered accountants and business advisers.  The company
is a national firm with over 2,200 employees and over 280 partners
generating a fee income of over GBP204 million making them one of
the leading mid-tier accountancy firms.  They have a network of 30
offices in 25 locations across the UK.

The company can be reached at:

         Galvanic Technical Services Ltd.
         c/o Baker Tilly Restructuring and Recovery LLP
         12 Gleneagles Court
         Brighton Road
         Crawley
         RH10 6AD
         England


KAUPTHING SINGER: Chancellor Waves Responsibility for Deposits
--------------------------------------------------------------
Tony Brown, the chief of minister of the Isle of Man, has
criticized Chancellor Alistair Darling's remarks concerning the
crown dependancy's status as a tax haven, ifaonline.co.uk reports.

The Chancellor, the report relates, told the Treasury Select
Committee Monday that the Government would review its relationship
with the offshore tax haven in the wake of the Icelandic banking
crisis.

Mr. Brown, as cited by the report, asserted the Chancellor "did
not seem to be aware that the relationship between the United
Kingdom and the Isle of Man has already been reviewed, and that an
agreement reinforcing that relationship was signed by the Lord
Chancellor on behalf of the UK Government in May last year."

Mr. Brown maintained the Isle of Man is not asking the UK for any
favors, but points out that it does have a constitutional
responsibility to the crown dependancy internationally, the report
notes.  He also blamed the UK directly for the closure of
Kaupthing, Singer & Friedlander in the Isle of Man.

The Chancellor's comment earned similar criticism from Isle of Man
Finance Director John Spellman, the report adds.

Sharon Flaherty at the Financial Times writes that at the Treasury
Select Committee meeting on Monday the Chancellor "waved
responsibility" for British deposits totaling GBP550 million held
in affected Isle of Man banks.

Mr. Darling, the FT added, was also non-committal about what
action would be taken, if any, by the British government to
protect people who invested in Derbyshire Offshore, a subsidiary
of the Derbyshire Building Society based in the Isle of Man.

"The British government's obligation must be to depositors who
have put their deposits into UK banks," Mr. Darling was quoted by
the FT as saying.  "The Isle of Man is independent of us, it has
got its own regulator."

    About Kaupthing Singer & Friedlander (Isle of Man) Ltd.

Kaupthing Singer & Friedlander (Isle of Man) Ltd. --
http://www.kaupthingsingers.co.im/-- is the UK subsidiary of
Iceland-based Kaupthing Bank hf.

On Oct. 9, 2008, the Isle of Man Court made a provisional
liquidation order in relation to Kaupthing Singer & Friedlander
(Isle of Man).  Subsequently, Michael Simpson of
PricewaterhouseCoopers was appointed as provisional liquidator of
the bank.

On Oct. 8, 2008, The Isle of Man Financial Supervision Commission
suspended the banking license of Kaupthing Singer & Friedlander
(Isle of Man).


KTS WIRE: Brings in Joint Administrators from KPMG
--------------------------------------------------
Howard Smith and Richard Dixon Fleming of KPMG LLP were appointed
joint administrators of KTS Wire Industries Ltd. on Oct. 22, 2008.

KPMG LLP -- http://www.kpmg.co.uk/-- offers accounting, audit,
and tax-related services to customers in such target industries as
banking, media and entertainment, consumer products, health care
providers, insurance, and pharmaceuticals.

The company can be reached at:

         KTS Wire Industries Ltd.
         c/o KPMG LLP
         1 The Embankment
         Neville Street
         Leeds


MAGELLAN RESIDENTIAL: Goes Into Administration
----------------------------------------------
Chris Holland at The Telegraph & Argus reports that Magellan
Residential Ltd. and Magellan Residential (Denholme) Ltd. have
been placed into administration after being hit by the slump in
the housing market.

Dan Butters and Ian Brown of the Leeds office of business advisory
firm Deloitte have been appointed as administrators, the report
relates.

"Where appropriate, the completion of building works will continue
while purchasers are sought for the business or the sites.  We are
working with all key stakeholders to establish an ongoing strategy
for the business and will minimize disruption wherever possible,"
Mr. Butters was quoted by The Telegraph & Argus as saying.

The Magellan business, which employs eight people at its
headquarters in Ashley Lane, has developments under construction
at Denholme, Idle, Wilsden, Baildon and Garforth, near Leeds, the
report notes.


PIPE HOLDINGS: S&P Keeps 'B-' Rating; Outlook Neg on Market Woes
----------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on U.K.-
based manufacturer of plastic pipes and systems Pipe Holdings PLC
to negative from stable due to ongoing deterioration in the
group's main markets and S&P's concerns regarding the refinancing
risk at the ultimate parent company, Hamsard 3054 Ltd. (Hamsard;
not rated).

At the same time, Standard & Poor's affirmed its 'B-' long-term
corporate credit and 'CCC' senior unsecured debt ratings on Pipe
Holdings, and lowered its senior secured debt rating on the group
to 'B' from 'B+'.  In addition, the recovery rating on the senior
secured debt was revised to '2' from '1', due to S&P's assumption
of lower enterprise value at default on the back of exceptionally
negative market dynamics and the consolidated group's (the
group's) complex capital structure.

"The outlook revision reflects our expectation that the group's
trading performance will continue to deteriorate as a consequence
of the severe building materials market downturn in the U.K.,"
said Standard & Poor's credit analyst Sabine Gromer.  "A further
key consideration is the consolidated group's weak liquidity
profile with a significant debt maturity ahead in May 2009.

"This leaves the the group exposed on two fronts: First, we expect
its pricing power to suffer due to sharp sales volume declines
that will further deteriorate operating margins.  Second, the
group's already exposed cash flow adequacy after a secondary
buyout in August 2007 leaves little cushion to support liquidity,
particularly in relation to the significant refinancing and/or
extension needs in May 2009."

The group's cash flow adequacy is highly leveraged following the
secondary management buyout.  As a consequence, group debt
(including payment-in-kind {PIK} notes and shareholder loans) to
rolling 12 months EBITDA rose to 7.7x at June 30, 2008, compared
with about 5.1x at June 30, 2007.  This has left the group even
more exposed to weakening cash flows arising from fluctuations in
market conditions.

"[T]he next most significant debt maturity is the already extended
GBP85.6 million bridge facility at ultimate parent Hamsard, due in
May 2009," added Ms. Gromer.  "This represents a key refinancing
risk for the group, which will need to be carefully managed and
will be closely monitored by Standard & Poor's."

Negative rating pressure could be triggered by an inability to
refinance or extend maturing facilities, a significant payout
under the earn-out liability with the group's former owners,
Castle Harlan, and aggressive management action, particularly if
these were to compromise the group's liquidity or debt levels.
Equally, the ratings would come under pressure if the group were
to suffer weaker-than-expected trading performance with
substantially diminished revenues and operating cash flow.


QUEST 4 FINANCE: Brings in Joint Administrators from BDO Stoy
-------------------------------------------------------------
Martha H. Thompson, David H. Gilbert and Simon Girling of BDO Stoy
Hayward LLP were appointed joint administrators of Quest 4 Finance
Ltd. on Oct. 17, 2008.

BDO Stoy Hayward -- http://www.bdo.co.uk/-- focuses on business
assurance (audit), corporate advisory, tax, and investment
management services, specializing in such industries as charities,
educational institutions, family businesses, financial services,
leisure, and hospitality.  The company is the U.K. arm of BDO
International and has offices in more than 15 cities throughout
the U.K.

The company can be reached at:

         Quest 4 Finance Ltd.
         c/o BDO Stoy Hayward LLP
         Kings Wharf
         20-30 Kings Road
         Reading
         Berkshire
         RG1 3EX
         England


SUNBERRY PROPERTIES: Taps Administrators from Grant Thornton
------------------------------------------------------------
Malcolm Shierson and Robert Harry Pick of Grant Thornton UK LLP
were appointed joint administrators of Sunberry Properties Ltd. on
Oct. 20, 2008.

Grant Thornton UK LLP -- http://www.grantthornton.com/-- is the
U.S. member firm of Grant Thornton International Ltd, one of the
six global audit, tax and advisory organizations.  Grant Thornton
International Ltd and its member firms are not a worldwide
partnership, as each member firm is a separate and distinct legal
entity.

The company can be reached at:

         Sunberry Properties Ltd.
         65 New Cavendish Street
         London
         W1G 7LS
         England


SUNSHINE FINE: Brings in Joint Administrators from PwC
------------------------------------------------------
Mark David Arthur Loftus and Ian David Green  of
PricewaterhouseCoopers LLP were appointed as joint administrators
of Sunshine Fine Art (Holding) Ltd. on Oct. 20, 2008.

PricewaterhouseCoopers -- http://www.pwc.com/-- provides
industry-focused services for public and private clients in order
to build public trust.  The company earned aggregated worldwide
revenues of US$28 billion for fiscal year 2008, and employed over
146,000 people in 150 countries.

The company can be reached at:

         Sunshine Fine Art (Holding) Ltd.
         Units 1a and b
         Ram Boulevard
         Foxhills Industrial Estate
         Scunthorpe
         South Yorkshire
         DN1 8QW
         England


TEATHERS LTD: Administrators Sell Private Client Broking Biz
------------------------------------------------------------
The administrators to Teathers Ltd. on Wednesday, November 5,
confirmed the sale of the private client stock broking business of
Teathers to Redmayne-Bentley, one of the UK's largest independent
private client stock broking and investment management firms.

Richard Heis and Samantha Rae Bewick were appointed as
administrators to Teathers (formerly known as Landsbanki
Securities Ltd.) at the request of the directors on
October 23,  2008.

                    About KPMG LLP (UK)

KPMG LLP (UK) -- http://kpmg.co.uk/-- provides professional
services including audit, tax, financial and risk advisory.

KPMG in the UK has over 10,000 partners and staff working in 22
offices and is part of a strong global network of members firms.
As part of KPMG Europe it has merged with its German and Swiss
firms, making it the largest integrated accounting firm in Europe.


TI AUTO: S&P Cuts Rating to 'CCC+'; Outlook Negative
----------------------------------------------------
Standard & Poor's Ratings Services lowered its long-term corporate
credit rating on U.K.-based automotive supplier TI Automotive Ltd.
(TI Auto) to 'CCC+' from 'B-' due to ongoing sharp deterioration
in the auto sector.  The rating outlook is negative.

At the same time, the bank loan rating on TI Auto's GBP75 million
revolving credit facility was lowered to 'B+' from 'BB-'.  The
'1+' recovery rating on this facility remains unchanged,
indicating S&P's highest expectation of full recovery of principal
in the event of a default.  In addition, the bank loan rating on
the company's GBP380 million senior secured debt was lowered to
'B' from 'B+'.  The recovery rating of '1' remains unchanged,
indicating S&P's expectation of very high recovery (90%-100%) in
the event of a default.

"The downgrades reflect further deterioration in the auto markets
over the past three months and our expectation that these
conditions will persist in the remaining months of 2008 and into
2009 as the auto industry enters recession," said Standard &
Poor's credit analyst Andres Albricci.  "As a result, TI Auto's
EBITDA and cash generation will be negatively affected and this
might prejudice the company's ability to meet scheduled interest
payments in the near to medium term."

The ratings also reflect S&P's concerns regarding TI Auto's
ability to meet its financial covenants at the end of December
2008.  Although favorable exchange rates contributed to good
EBITDA generation in the first nine months of 2008 relative to
budget, the weakness of the British pound sterling relative to the
euro and U.S. dollar led to a significant increase in TI Auto's
net debt level, therefore increasing the possibility of a breach
under the leverage covenant.  In addition, EBITDA generation in
the fourth quarter of 2008 might suffer from sharply deteriorating
market conditions.

A breach of financial covenants would represent an event of
default under TI Auto's facilities agreement and could ultimately
trigger a default on all or part of the facilities.

S&P is not aware of any ongoing discussion between the company and
lenders to renegotiate the covenants.  Similarly, S&P is not have
any information about the intention of TI Auto's shareholders to
support the company in the event of a breach in covenants.


TISCALI SPA: In Talks With BSkyB Regarding Sale of UK Business
--------------------------------------------------------------
Tiscali S.p.A confirmed it is currently holding talks with the
BSkyB Group plc in relation to certain UK assets.

Citing the Sunday Times, BBC News discloses that BSkyB had
proposed an indicative offer of GBP450 million for the UK
business.

Carphone Warehouse, the Daily Telegraph relates, is thought to
have withdrawn from the bidding race.  Other competitors
understood to have walked away from the auction include Vodafone
and BT, the Daily Telegraph adds.

According to the Daily Telegraph, if the acquisition pushes
through, BSkyB, which has 1.79 million broadband customers, could
become the third biggest player in the market behind BT and Virgin
Media.

AOL Money says Tiscali, which has 1.8 million broadband customers
in the UK, is the fourth largest provider.  However, AOL Money
notes, the group's market share is believed to have come under
recent pressure.

Tiscali put itself up for sale this year following a strategic
review of its business in February, BBC relates.

                        About Tiscali

Tiscali S.p.A. (Borsa Italiana, Milan: TIS) --
http://www.tiscali.com/-- is one Europe's alternative
telecommunications operators.  Tiscali supplies a wide range of
services to its customers, both private individuals and companies,
namely: Internet access through dial-up and ADSL, as well as
voice, VoIP, media, added-value services and other technologically
advanced products.

As at June 30, 2008, Tiscali counted both in Italy and the UK a
total of 3.2 million active users.  Of these, over 2.4 million
were ADSL subscribers.

                        *     *     *

As reported in the Troubled Company Reporter-Europe on
October 23, 2008, Standard & Poor's Ratings Services lowered its
long-term corporate credit rating to 'B' from 'B+' on Tiscali SpA,
an alternative provider of Internet, telephony, and TV services in
the U.K. and Italy.  At the same time, S&P lowered its long-term
debt ratings on the EUR50 million senior secured term loan and
EUR50 million senior secured revolving credit facility (RCF) of
financing vehicle Tiscali U.K. Holdings Ltd. to 'B' and 'B+',
respectively, from 'B+' and 'BB-'; these loans are guaranteed by
Tiscali SpA.  The recovery ratings on these two debt facilities
are unchanged at respectively '3' (indicating S&P's expectation of
meaningful {50%-70%} recovery in the event of a payment default)
and '2' (indicating its expectation of substantial {70%-90%}
recovery in the event of a payment default).


WAGE PAYMENT: Taps Joint Administrators from BDO Stoy
-----------------------------------------------------
Martha H. Thompson, David H. Gilbert and Simon Girling of BDO Stoy
Hayward LLP were appointed Joint Administrators of Wage Payment
Ltd. on Oct. 17, 2008.

BDO Stoy Hayward -- http://www.bdo.co.uk/-- focuses on business
assurance (audit), corporate advisory, tax, and investment
management services, specializing in such industries as charities,
educational institutions, family businesses, financial services,
leisure, and hospitality.  The company is the U.K. arm of BDO
International and has offices in more than 15 cities throughout
the U.K.

The company can be reached at:

         Wage Payment Ltd.
         c/o BDO Stoy Hayward LLP
         Kings Wharf
         20-30 Kings Road
         Reading
         Berkshire
         RG1 3EX
         England


WESTBRIDGE HOMES: Goes Into Administration
------------------------------------------
South Cave, East Yorkshire-based property development firm
Westbridge Homes Ltd., has gone into administration, the Hull and
East Riding Daily Mail reports.

The company, the report relates, brought in administrators
Ernst & Young after running into significant cash flow problems
due to conditions in the housing market.

Peter Lee, one of the Westbridge's directors, said the company
lost more than GBP1 million of contracted sales not completed in
the space of a month, leaving a massive hole in its cash flow.

"The reason the company went into administration is because we are
owed money ourselves.  We ended up with a development where we had
people that were on contract to buy but would not or could not
complete because of the housing market," Mr. Lee was
quoted by the report as saying.

According to the report, the company owes GBP33,000 to TAS
Communications of Beverley, and more than GBP20,000 to D&D
Decorators of Hull.  It also owes GBP11,000 to ICS Cleaning of
Hull, and an amount to DLJ Associates in Leeds, the report adds.

In a letter sent to creditors cited by the report,  administrators
Ernst & Young said the firm was unable to indicate whether there
would be a "surplus" of cash available for those owed money.


* Fitch: 30% UK House Price Decline to Hit Junior NC RMBS Notes
---------------------------------------------------------------
Fitch Ratings says in a report that it expects UK house prices to
decline by approximately 30% from their peak in October 2007.  The
agency has stress-tested its existing UK non-conforming RMBS
ratings against the expected fall in house prices and found that
negative rating migration should be predominantly confined to
lower rated tranches.

RMBS ratings are designed to withstand a significant increase in
defaults and house price depreciation, with the higher ratings
possessing greater ability to withstand more stress as compared to
lower ratings.

On a Fitch portfolio basis (by value), 3% of notes (GBP1.1bn
equivalent) could potentially default and a further 11% (GBP4.4bn
equivalent) could face downgrade.  However, no defaults are
expected at the 'AAA' or 'AA' level with potential rating
migration limited to around 8% (GBP3.5bn).  By contrast, non-
investment grade notes, which are designed to absorb the losses
generated by the increase in mortgage arrears and possessions,
will suffer more significantly.  The potential default rates on
the 'BBB', 'BB' and 'B' tranches as a proportion of total 'BBB',
'BB' and 'B' tranches outstanding are 40%, 78% and 100%
respectively.

"With evidence suggesting that the UK is in the formative stages
of a recession and the ongoing distress in the global banking
system restricting the availability of mortgage credit, we are
likely to see house price declines to the extent last seen in the
early 1990s," says Rodney Pelletier, Managing Director in Fitch's
Structured Finance team.

"Our tests showed that in such a scenario while higher rated notes
are less susceptible to downgrade and defaults, widespread
downward rating migration is a distinct possibility for lower
rated notes," Mr. Pelletier adds.

Fitch stress-tested 108 UK non-conforming transactions, rated from
2003 - 2007 vintages.  The stress test has identified a number of
transactions where negative rating action is expected to occur.
These transactions have been placed on priority review and the
results and rating actions occurring from these reviews will be
published shortly.

The report 'Impact of Declining House Prices on UK Non-conforming
Ratings' is available at http://www.fitchresearch.com/

Fitch is in the process of carrying out a similar exercise for UK
Prime RMBS transactions and expects to publish its results in
December.

A teleconference to discuss the findings in the report will take
place in the coming days.


* Financial Sector Dominates Global Defaults, S&P Finds
-------------------------------------------------------
Globally, 28 companies -- 24 public and 4 confidentially rated --
defaulted in the third quarter of 2008, said an article by
Standard & Poor's.  This is the largest number of defaults since
the third quarter of 2003 and already five more than the total
number of defaults for all of 2007.

The volume of rated debt affected by third quarter's defaults was
a massive US$186.2 billion, dwarfing the US$8.15 billion recorded
in all of 2007 and making this the largest defaulting debt amount
in recent memory, according to the report, titled "Quarterly
Default Update And Rating Transitions (Premium)."   The vast
majority of this amount stems from the collapse of both Lehman
Brothers Holdings Inc. and Washington Mutual Inc. (along with
their various subsidiaries).

Twenty-four of the defaults in the third quarter of 2008 were
domiciled in the U.S., two came from Europe, and one each was from
Canada and Hong Kong.

Globally, the corporate default rate for speculative-grade-rated
entities moved to 0.75% at the end of third-quarter 2008 from
0.20% during the same period in 2007.

"After hitting record lows in 2007, the pace of defaults has
picked up markedly," said Diane Vazza, head of Standard & Poor's
Global Fixed Income Research Group.  "If the pace of defaults set
so far this year is maintained through the remainder of the year,
2008 would have the largest number of defaults, at 88, since
2003."

Of the 24 defaults in the third quarter, seven were financial
institutions:

   -- four were from the consumer products sector,

   -- three each from leisure time/media and the forest and
      building products/homebuilders sectors,

   -- two from both transportation and real estate, and

   -- one each from insurance, health care/chemicals, and
      aerospace/automotive/capital goods/metal.


* Consumer-Based Sectors Face a Frightening Environment, S&P Says
-----------------------------------------------------------------
The consumer products, media and entertainment, and retail/
restaurants sectors remained most susceptible to economic and
credit-market turbulence as of Oct. 30, 2008, said an article
published by Standard & Poor's.

These sectors consistently have the highest levels of risk among
our lists of distressed companies (defined as speculative-grade-
rated companies with securities trading in excess of 1,000 basis
points above U.S. Treasuries), weakest links (companies rated 'B-'
or lower with either a negative outlook or ratings on CreditWatch
with negative implications), and potential bond downgrades
(investment-grade or speculative-grade-rated companies that have
either a negative outlook or ratings on CreditWatch with negative
implications).

S&P identified 303 companies across these sectors on the basis of
the three criteria, according to the article, titled "Stress In
Corporate America: Frightening Environment For Consumer-Reliant
Sectors (Premium)."

In the month of October, the number of defaults continued to rise
as the aftermath of the September collapses continued to haunt the
stressed sectors.  Consumer spending for discretionary purposes
remained inhibited in the wake of rising unemployment, combined
with businesses facing restricted access to funding in the credit
markets.

"Consumer spending accounts for 70% of U.S. GDP, and we expect
consumer spending to rise only 1% in 2008, compared with an
observed growth rate of 2.8% in 2007," said Diane Vazza, head of
Standard & Poor's Global Fixed Income Research Group.  "Consumer
products companies have had to face cost pressures, particularly
rising energy and commodities prices in recent months, though they
should experience a reprieve if the current declines in commodity
prices continue."

Of the 303 companies in these three sectors, 14 companies are on
all three lists, while 58 are on more than one list.  This
indicates the underlying vulnerability of these entities that
could be exposed in the coming quarters.


* S&P Sees High Recovery Prospects for Lenders in Oil Sector
------------------------------------------------------------
Corporate default rates have been rising steadily since mid-2007,
and debtholders are increasingly concerned about what their
recovery prospects might be if an issuer defaults.  Standard &
Poor's Ratings Services began assigning recovery ratings to the
unsecured debt of speculative-grade issuers earlier this year to
help investors evaluate what their recovery prospects might be in
a default.  Oil and gas companies, on average, provide higher
recovery prospects for unsecured creditors compared with other
industries, according to a recent commentary published by Standard
& Poor's.

The article, "Unsecured Lenders In The Oil And Gas Sector Have
Strong Recovery Prospects," published Oct. 28, 2008, on
RatingsDirect, examines the criteria -- including high hydrocarbon
prices -- that underpin the higher recovery ratings on
speculative-grade companies in the oil and gas sector.

"Another reason the oil and gas sector has exhibited comparatively
higher recovery is that speculative-grade oil and gas companies
tend to have more unsecured debt than secured debt in their
capital structure," said Standard & Poor's credit analyst Aniki
Saha-Yannopoulos.  "With a limited amount of secured debt ahead of
the unsecured creditors, more value typically remains available to
satisfy unsecured creditors in the sector."

The report also discusses the differentiating factors for varying
recovery prospects between oil and gas subsectors.  For example,
companies in the oilfield service sector generally offer better
recovery prospects versus exploration and companies due to lower
debt to capitalization ratios and secured facilities that are not
affected by borrowing bases.


* IFRS Changes Allow EUR Banks to Avoid Fair Value Accounting
-------------------------------------------------------------
In a report, Standard & Poor's Ratings Services said that it
believed the changes to International Financial Reporting
Standards to allow certain reclassifications of assets represented
a path of least resistance to quickly address capital and earnings
concerns, and the fact that the flexibility introduced was already
available to U.S. banks made it an easy target (see "European
Banks: IFRS Revisions Allow Banks Certain Options To Avoid Fair
Value Accounting").

The International Accounting Standards Board (IASB) has introduced
changes that give banks the option to reclassify certain assets as
early as the reporting of results for the already completed third
quarter of this year.

"From a financial analysis standpoint, we believe that the
permitted reclassifications will render the balance sheet carrying
amounts of transferred assets less meaningful and will generally
not facilitate meaningful comparisons," said Standard & Poor's
credit analyst Sue Harding.  "The result will be neither fair
value nor a typical amortized cost.  Instead it will be fair value
as of a somewhat arbitrary reclassification date, that has then
been amortized.  Earnings analysis will, in our view, continue to
be at least as complex."

Ms. Harding continued: "We expect there to be a trade-off of
potentially higher capital requirements in exchange for more
predictable reported earnings and capital that should be less of a
moving target for banks.  Assets transferred to the banking book
may on average require capital that is several times the level
required if they had been left in the trading book.  However, we
do not expect increases in capital requirements to be significant
overall, as a multiple of a modest capital requirement would still
be modest."

Ms. Harding also noted that early examples of the disclosure of
reclassifications seem to be limited in detail at best.  Standard
& Poor's believes the full level of disclosure would be most
helpful to market participants if made when the transfer is
initially announced.


* S&P Says Gov't. Support EU Banks, But Ratings Pressure Persists
-----------------------------------------------------------------
The top-50 European banks face an exceptionally difficult
environment due to the confluence of reduced asset valuations,
contracted market liquidity, varying levels of capital strains,
and extremely fragile investor and client confidence, Standard &
Poor's Ratings Services noted in a report published on Nov.5,
2008, on RatingsDirect titled "Extraordinary Times, Extraordinary
Responses--External Support For Major European Bank Ratings In The
Face Of Acute Market Difficulties."

S&P expects the European banking system to continue to restructure
and recapitalize.  It will likely emerge with better capital and
lower risk profiles, which would be positive for future
creditworthiness.  Before S&P gets to this point, however, S&P
expects to see continuing rating pressure as banks work through
the dislocations.  The median rating for the top-50 Western
European banks has slipped to 'A+' from 'AA-' in the last month.

Banks also face the prospect of rising domestic credit problems as
European economies weaken.  Government support toward the banking
sector underpins the ratings on systemically important banks, but
does not, in S&P's view, fix the sector's deteriorating
fundamentals.

"We are increasingly pessimistic about the depth and duration of
the economic downturn, and we now expect it to be deeper than we
did three months ago," said Standard & Poor's credit analyst
Michelle Brennan.  Our view of the future business fundamentals
for banks has therefore weakened over the quarter.  "Our ratings
reflect these fundamentals so we believe that European bank
ratings will remain under strong pressure over the coming quarters
as profitability deteriorates and loans losses increase, even more
so if funding remains scarce and expensive and even after the
recently announced government-sponsored bank rescue plans," she
added.

The severity of the current environment is, in S&P's view, evident
in the numerous support packages launched by European governments,
something not seen in decades.  S&P considers these measures as
extraordinary government actions, consistent with S&P's view of
those that are made by supportive countries in times of extreme
stress, when no market-based solution is feasible.  S&P expects
these measures to provide stability to bank ratings that otherwise
were potentially vulnerable to deteriorating market confidence and
an associated "credit cliff."

"We believe these government measures are likely to help improve
confidence in the banking sector, alleviating a key risk for
banks' liquidity, but they will not solve all the sector's
problems," said Ms. Brennan.  "We can still envisage rating
pressure based on weaker business prospects and financial
profiles, even where systemic support has strengthened," she
added.

Despite the expected prominence of government-guaranteed bank debt
over the next three years, S&P will focus on what the underlying
business models are going to look like as a result of the changes
that the sector is undergoing, and what these business models will
mean for creditworthiness.


* S&P Says No Funding Agreement-backed Issuance in October 2008
---------------------------------------------------------------
Funding agreement-backed issuance has swung between the two
extremes this year.  The first half and the second quarter each
had the highest issuance totals for those respective periods,
while the third quarter had the lowest quarterly issuance total
since 2002.

October ended without a single issuance, and Standard & Poor's has
seen nothing to indicate that issuance will be picking up anytime
soon.  Although it did expect a decrease in issuances in October,
the total lack of issuance is surprising.

Market participants have told the rating agency that the
precipitous drop in issuance could be because of several reasons:

   -- First, and likely foremost, because of the dislocation in
      the credit markets, there has been a lack of debt issuance
      in other asset classes, which would leave an issuer of these
      notes without a place to invest the proceeds it receives.

   -- Funding agreement providers appear to be focused on
      preserving capital.  Issuance would increase the size of
      their balance sheets, potentially making these companies
      appear more leveraged, but it would also expose them to
      credit risk on the assets purchased.

   -- Rates that investors are looking for appear to have widened
      more for insurance companies than they have for non
      insurance-related obligations.

   -- Market participants have told Standard & Poor's that some
      insurance companies have been accessing the Federal Home
      Loan Bank system as a source of capital for spread lending
      because it currently has the lowest cost of funding.

This has been a challenging time for issuers of funding agreement-
backed notes.  At this time, it is difficult to estimate when the
market for these investments will open up again, but issuers have
shown resiliency in previous downturns.  S&P expects them to
return to the market eventually because over time, this has been a
profitable line of business for the issuers.


* Q2 Global Project Finance Ratings Remain Stable, S&P Says
-----------------------------------------------------------
Project finance around the world continues to show resilience in
the face of current market volatility, according to a report
published by Standard & Poor's Ratings Services on RatingsDirect
titled Industry Report Card: Global Project Finance Ratings Remain
Stable Despite Uncertain Credit Markets.

Of the 237 global project-financed issues Standard & Poor's rates,
69% were investment grade and 73% had stable outlooks.  Of the
remaining projects, 35 have negative outlooks, 19 are on
CreditWatch Negative, and seven have positive outlooks,

"Rating actions that we took so far in 2008 on bond insurers that
provided credit enhancements to these entities resulted in an
increased number of project finance rating actions compared with
our last report card in June 2008," said Standard & Poor's credit
analyst Arthur Simonson.  "Overall, most projects performed as we
expected and typically benefited from sound long-term contractual
arrangements with stable and predictable revenues," Mr. Simonson
continued.  However, there were 17 rating downgrades due to
project-specific operational, financial or parental company
issues, and one due to the downgrade of its insurer.  Two rating
upgrades resulted from improved project economics.

The outlook for the project finance market remains good, and the
rating agency expects the sector to see an increasingly
diversified market looking to fund infrastructure projects using
nonrecourse debt.


* Upgrade Potential Falls To Four-Year Low, S&P Article Says
------------------------------------------------------------
The number of issuers poised for upgrades fell to 245 this
October, 24 fewer than almost a month ago, said Standard & Poor's
in an article titled "Upgrade Potential Across Credit Grades And
Sectors (Premium)."  The number of potential upgrades in October
was the lowest count since the rating agency started its report in
September 2004.  On the other hand, potential bond downgrades are
at their highest level in 38 months at 786 entities.

"The drop in upgrade potential is largely attributable to credit
deterioration across the globe," said Diane Vazza, head of
Standard & Poor's Global Fixed Income Research Group, "especially
in the U.S. and Europe, where adverse economic conditions and a
freeze on the credit markets have effectively reduced an upward
trajectory for even well-positioned issuers."

However, there are a few sectors, including metals, mining, and
steel, as well as telecommunications, that are poised to better
weather the current credit storm.  Issuers in these sectors have a
positive bias -- defined as the number of entities listed with
either a positive outlook or ratings on CreditWatch with positive
implications -- that exceeds the historical average.  This
highlights the likelihood that companies within these sectors have
greater upgrade potential relative to other sectors or at least a
stronger position of stability.


* S&P Says 786 Issuers Face Downgrade Risk, A Three-Year High
-------------------------------------------------------------
The number of potential downgrades reached 786 in October 2008,
the highest since September 2005, said an article by Standard &
Poor's.  This is an increase of 28 issuers over last month's
count.

Potential downgrades are defined as entities that have either a
negative outlook or ratings on CreditWatch with negative
implications across rating categories 'AAA' to 'B-'.

By comparison, the number of potential downgrades in October is
136 more than what was reported in the same period a year ago and
118 more than the average of the past 38 months, according to the
article, titled "Downgrade Potential Across Credit Grades And
Sectors (Premium)."  Further, the number of potential downgrades
is more than triple the number of those poised for potential
upgrades, a trend that has progressed for roughly 15 months.

"Despite materialized downgrades, the housing and financial
sectors continue to show the highest downgrade risk, indicative of
further rating actions if credit conditions continue to
deteriorate," said Diane Vazza, head of Standard & Poor's Global
Fixed Income Research Group.

Geographically, the U.S. continues to top the list of potential
bond downgrades, with roughly one-quarter of current ratings
showing downside risk.

By rating designation, 'B' rated companies have the greatest
potential for downgrades, with 148 companies (19% of the total).
Globally, of the 786 issuers at risk for downgrades, 81% are rated
speculative grade ('BB+' or below).


* BOOK REVIEW: Crafting Solutions for Troubled Businesses:
              A Disciplined Approach to Diagnosing and
              Confronting Management Challenges
----------------------------------------------------------
Authors: Stephen J. Hopkins and S. Douglas Hopkins
Publisher:  Beard Books
Hardcover:  316 pages
List Price: US$74.95

Own your personal copy at
http://www.amazon.com/exec/obidos/ASIN/1587982870/internetbankrupt

Crafting Solutions for Troubled Businesses: A Disciplined Approach
to Diagnosing and Confronting Management Challenges, by Stephen J.
Hopkins and S. Douglas Hopkins, will change the way you think
about the problems of businesses in distress.

The book will be of great value to turnaround management
practitioners, lenders facing loan covenant defaults, Board
Members of struggling companies who need a basis for evaluating
and assisting their management to realistically confront problems,
and private equity firm management facing problems with portfolio
companies or seeking to identify turnaround investment
opportunities.

                            *********

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.  Pius Xerxes V. Tovilla, Valerie C. Udtuhan, Marites
O. Claro, Rousel Elaine C. Tumanda, Joy A. Agravante, 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 * * *