/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/081119.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 Wednesday, November 19, 2008, Vol. 9, No. 230 Headlines A U S T R I A KOMMUNALKREDIT AUSTRIA: Fitch Junks Rating on Two Capital Notes B E L G I U M FORTIS BANK: S&P Corrects Error & Rates EUR2 Bil. Notes at 'BB' G E R M A N Y CONTAINER TRANSPORT: Claims Registration Period Ends December 3 EURAS TECHNOLOGY: Claims Registration Period Ends December 3 IDS PRODESIGN: Claims Registration Period Ends December 1 KUNSTSTOFFRECYCLING KODERSDORF: Claims Period Ends December 1 PFLEIDERER AG: Moody's Downgrades Corporate Family Rating to 'Ba3' PHYSIO UND SPORT: Claims Registration Period Ends December 20 QUADRIFOGLIO VERWALTUNGS: Claims Registration Ends December 19 G R E E C E ANTENNA TV: S&P Maintains 'B' Credit Rating on Nove Televizia Sale I R E L A N D SMURFIT KAPPA: Reports EUR48.9 Mln Net Profit in Third Qtr. 2008 I T A L Y ALITALIA SPA: To Cut Flights Amid Strikes and Soaring Debts IT HOLDING: Posts EUR10.1 Mln Net Loss in 9-Mos Ended Sept. 30 IT HOLDING: Consumer Spending Pressure Cues Moody's Junk Ratings IT HOLDING: S&P Downgrades Corporate Rating to 'SD' from 'B-' K A Z A K H S T A N * S&P Confirms Counterparty Ratings on Kazakhstan's Five Banks K Y R G Y Z S T A N HIM TRANS: Creditors Must File Claims by December 10 TECHNO NIKOL-BISHKEK: Creditors Must File Claims by Dec. 10 N E T H E R L A N D S FORTIS BANK: S&P Corrects Error & Rates EUR2 Bil. Notes at 'BB' R U S S I A EVRAZ GROUP: Seeks US$1.8 Bil. Loan on IPSCO Acquisition IRKUTSKENERGO AO: S&P Downgrades Corporate Credit Rating to 'B-' MOSCOW STARS: CB Moskommertsbank Rating Cut Cues Negative Outlook RUSSIAN MORTGAGE: Fitch Changes Outlook to Stable after Russia's TATNEFT OAO: Net Profit Up 11% to RUR38.7BB in January-September T U R K E Y * S&P Changes Outlook on 7 Turkish Financial Firms to Negative U K R A I N E AGROSTAR LLC: Creditors Must File Claims by November 29 ALPHA-RESOURCE LLC: Creditors Must File Claims by November 29 ENTERPRISE FORMPLAST: Creditors Must File Claims by November 29 EURO-BUILDING-PROJECT: Creditors Must File Claims by Nov. 29 GENING LLC: Creditors Must File Claims by November 29 INTER-BUILDING-INVESTMENT: Creditors Must File Claims by Nov. 29 KATERINOPOL PRODUCTION: Creditors Must File Claims by Nov. 29 KHAZHYN AGRICULTURAL: Creditors Must File Claims by November 29 KORVET LLC: Creditors Must File Claims by November 29 SPECIAL TECHNOLOGY: Creditors Must File Claims by November 29 TRUBEZH CJSC: Creditors Must File Claims by November 29 TURBOV KAOLIN: Creditors Must File Claims by November 29 U N I T E D K I N G D O M BE MOVED: Taps Joint Administrators from PKF BRITISH AIRWAYS: Four Executives Appear in Court Over Price-Fixing BRITISH AIRWAYS: Iberia Eyes Bigger Share of Merger EIRLES TWO: Moody's Withdraws Junk Rating on Series 129 Notes EYEWEAR HOLDINGS: Names Joint Administrators from Grant Thornton HBOS PLC: Could Face Nationalization if Lloyds Takeover Fails IRONWORKS LTD: Taps Joint Liquidators from PKF KALMAR STRUCTURED: Moody's Junks Rating on EUR8.3MM Class C Notes KEN WILSON: Names Joint Liquidators from Tenon Recovery LANDSBANKI: Savers to Meet with Guernsey Authorities on Monday LEHMAN BROTHERS: Administration More Complicated than Enron M & S LTD: Names Joint Administrators from Tennon Recovery MAWLAW 526 LTD: Appoints Joint Liquidators from KPMG M B JOINERY: Taps Joint Liquidators from Baker Tilly SPACE 2 LTD: Appoints Joint Administrators from KPMG XTREME BRAND: Names Joint Liquidators from Tenon Recovery * UK Company Winding Up Petitions Up 13% in Third Quarter 2008 * S&P Says UK Buy-To-Let Mortgage to Weaken in Economic Downturn * Moody's Sees Weakening in EMEA Auto Loans Performance in Q3 2008 ********* ============= A U S T R I A ============= KOMMUNALKREDIT AUSTRIA: Fitch Junks Rating on Two Capital Notes --------------------------------------------------------------- Fitch Ratings downgraded Kommunalkredit Austria's two supplemen tary capital notes to 'CCC+' from 'A+' and removed them from Rat ing Watch Positive. This rating action follows KA's decision to defer coupon payments in 2009 following its recent announcement of an anticipated loss for the current financial year. A Recovery Rating 'RR2' is assigned, reflecting superior recovery prospects on these notes. KA announced on Nov. 6, 2008 that it will defer coupon payments on all instruments where distribution is linked to the generation of an annual profit (Jahresuberschuss) including the above-mentioned two issues (ISIN codes XS0270579856 and XS0284217709). Both issues are cumulative and the four quarterly coupon payments to be deferred in 2009 will be paid in 2010 if the bank generates a profit (before movement in capital reserves) for the financial year 2009. KA is rated Long-term Issuer Default A+' and Short-term IDR 'F1', both of which are on RWP. Its other ratings are Individual 'F' and Support '1'. Its Support Rating Floor 'A+' is also on RWP. ============= B E L G I U M ============= FORTIS BANK: S&P Corrects Error & Rates EUR2 Bil. Notes at 'BB' --------------------------------------------------------------- Standard & Poor's Ratings Services corrected a technical error, saying that the EUR2 billion mandatory convertible securities issued by entities within the Belgian-Dutch bancassurance group Fortis are rated 'BB'. The debt ratings on various hybrid capital instruments, including the MCS, were lowered to 'BB' from 'BBB' and placed on CreditWatch with developing implications on Oct. 6, 2008, as indicated in S&P's article. Due to an administrative error regarding the identities of certain instruments and issuers, the lowering of the debt rating on the MCS did not update or display accurately in S&P's database. This S&P's press release therefore corrects this mistake. Fortis Bank Nederland N.V., Fortis Bank SA/NV, and holding companies Fortis SA/NV and Fortis N.V. are co-obligors for the MCS issued in 2007. FBN is the primary co-obligor of this instrument, which is booked in the Dutch bank's balance-sheet. S&P expects to resolve the CreditWatch within the coming weeks. Ratings List Fortis N.V. Fortis SA/NV -- Counterparty Credit Rating BBB-/Watch Neg/A-3 Fortis Bank Nederland (Holding) N.V. -- Counterparty Credit Rating A/Watch Dev/A-1 -- EUR2 Billion Mandatory Convertible Securities * BB/Watch Dev Fortis Bank SA/NV -- Counterparty Credit Rating A/Watch Pos/A-1 -- EUR3 Billion Convertible Equity-Linked Junior Subordinated Perpetual Hybrid (CASHES) ** BB/Watch Dev * Fortis Bank Nederland N.V. is the primary co-obligor; Fortis Bank SA/NV, Fortis SA/NV, and Fortis N.V. are co-obligors. ** Issued by Fortis Bank SA/NV; Fortis SA/NV and Fortis N.V. are co-obligors. ============= G E R M A N Y ============= CONTAINER TRANSPORT: Claims Registration Period Ends December 3 --------------------------------------------------------------- Creditors of Container Transport GmbH & Co. KG have until Dec. 3, 2008, to register their claims with court-appointed insolvency manager. Creditors and other interested parties are encouraged to attend the meeting at 9:50 a.m. on Jan. 7, 2009, at which time the insolvency manager will present his first report. 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 Claims set out in the insolvency manager's report will be verified by the court during this meeting. Creditors may also constitute a creditors' committee or opt to appoint a new insolvency manager. The insolvency manager can be reached at: Stephan Neubauer Spitalerstrasse 4 20095 Hamburg Germany The District Court opened bankruptcy proceedings against the company on Oct. 20, 2008. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: Container Transport GmbH & Co. KG Attn: Erika Wehlen, Manager Bindfeldweg 36 22459 Hamburg Germany EURAS TECHNOLOGY: Claims Registration Period Ends December 3 ------------------------------------------------------------ Creditors of EURAS Technology Planungs-, Vermittlungs- und Marketinggesellschaft mbH have until Dec. 3, 2008, to register their claims with court-appointed insolvency manager. Creditors and other interested parties are encouraged to attend the meeting at 8:15 a.m. on Jan. 12, 2009, at which time the insolvency manager will present his first report. The meeting of creditors will be held at: The District Court of Wetzlar Meeting Room 201 Building B II. Stick Wetherstr. 1 35578 Wetzlar Germany Claims set out in the insolvency manager's report will be verified by the court during this meeting. Creditors may also constitute a creditors' committee or opt to appoint a new insolvency manager. The insolvency manager can be reached at: Janine Pfaff GF: 54 Wertherstrasse 14 A 35578 Wetzlar Germany Tel: 06441/9 48 20 Fax: 06441/94 82 22 E-mail: kanzlei@wsr-net.de The District Court opened bankruptcy proceedings against the company on Oct. 12, 2008. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: EURAS Technology Planungs-, Vermittlungs- und Marketinggesellschaft mbH Baugasse 3 35578 Wetzlar Attn: Zoran Kostic, Manager Schloss 1 61250 Usingen Germany IDS PRODESIGN: Claims Registration Period Ends December 1 --------------------------------------------------------- Creditors of IDS ProDesign GmbH have until Dec. 1, 2008, to register their claims with court-appointed insolvency manager. Creditors and other interested parties are encouraged to attend the meeting at 10.00 a.m. on Jan. 15, 2009, at which time the insolvency manager will present his first report. The meeting of creditors will be held at: The District Court of Nuernberg Meeting Hall 152/I Flaschenhofstr. 35 Nuernberg Germany Claims set out in the insolvency manager's report will be verified by the court during this meeting. Creditors may also constitute a creditors' committee or opt to appoint a new insolvency manager. The insolvency manager can be reached at: Volker Boehm Rothenburger Strasse 241 90439 Nuernberg Germany The District Court opened bankruptcy proceedings against the company on Oct. 20, 2008. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: IDS ProDesign GmbH Attn: Jean Kasperzack, Manager Erlenstegenstrasse 58 90491 Nuernberg Germany KUNSTSTOFFRECYCLING KODERSDORF: Claims Period Ends December 1 ------------------------------------------------------------- Creditors of Kunststoffrecycling Kodersdorf GmbH have until Dec. 1, 2008, to register their claims with court-appointed insolvency manager. Creditors and other interested parties are encouraged to attend the meeting at 9:00 a.m. on Jan. 12, 2008, at which time the insolvency manager will present his first report. The meeting of creditors will be held at: The District Court of Dresden Hall D131 Olbrichtplatz 1 01099 Dresden Germany Claims set out in the insolvency manager's report will be verified by the court during this meeting. Creditors may also constitute a creditors' committee or opt to appoint a new insolvency manager. The insolvency manager can be reached at: Ralf Klinge Koenigsbruecker Strasse 33 01099 Dresden Germany The District Court opened bankruptcy proceedings against the company on Jan. 20, 2008. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: Kunststoffrecycling Kodersdorf GmbH Attn: Torsten Werner, Manager geboren 1976 Torgaer Str. 14 02923 Kodersdorf Germany PFLEIDERER AG: Moody's Downgrades Corporate Family Rating to 'Ba3' ------------------------------------------------------------------ Moody's Investors Service downgraded Pfleiderer AG's Ba2 corporate family rating to Ba3 and the B1 Backed Junior Subordinate Rating of its subordinated guaranteed finance subsidiary Pfleiderer Finance BV to B2. This rating action concludes the review which was initiated on July 31, 2008. The downgrade has been prompted by (1) Pfleiderer's weaker than initially by Moody's expected results for the first 9 months 2008, (2) the weak outlook for the markets Pfleiderer is serving going into 2009 which may limit Pfleiderer's ability to reduce its leverage over time, (3) the now achieved high leverage ratio, measured as adjusted gross debt/EBITDA (debt adjusted to include 50% of Pfleiderer's hybrid bond, operating leases and pension liabilities) as per last twelve months per September 2008 of 4.3x, and FFO/Net Debt of 12%. These ratios are not commensurate with a Ba2 rating any more and since Pfleiderer's markets are expected to remain weak or even weaken further and given protracted weaknesses in equity markets Moody's assumes that there are limited possibilities for Pfleiderer to improve its capital structure in the intermediate term. Pfleiderer's ongoing and implemented cost reduction measures and capex reduction program should help the ratios at least not to weaken further. The initial rating assignment of Ba2 had assumed that Pfleiderer will improve its leverage figures (cash flow to debt and debt to EBITDA) over time following the positive contribution from the Pergo acquisition. "The outlook of the ratings is negative, reflecting the increased uncertainties which Pfleiderer is facing going forward" said Matthias Hellstern, Moodys' lead analyst for Pfleiderer. The negative outlook also considers the heightened challenge for Pfleiderer to remain in compliance with financial covenants under its senior credit facilities. Moody's notes that Pfleiderer's financial ratios so far have been in compliance with its loan agreements. Moody's would downgrade the ratings if Pfleiderer in the short to medium term would fail to generate positive free cash flows and use the proceeds to reduce leverage, and if the debt/EBITDA (currently 4.3x) would continue to weaken further. On the positive side, Moody's notes that the expected decline in raw material prices and input costs as well as the implementation of cost cutting measures should help the company offsetting lower volumes in its markets and that Pfleiderer's market position and cost leadership should support the company in the current industry downturn. Moody's previous rating action on Pfleiderer was to put the rating on review for possible downgrade on July 31, 2008. Downgrades: Issuer: Pfleiderer AG -- Corporate Family Rating, Downgraded to Ba3 from Ba2 Issuer: Pfleiderer Finance B.V. -- Junior Subordinated Regular Bond/Debenture, Downgraded to B2 from B1 Assignments: Issuer: Pfleiderer AG -- Probability of Default Rating, Assigned Ba3 Issuer: Pfleiderer Finance B.V. -- Junior Subordinated Regular Bond/Debenture, Assigned LGD6, 92% Outlook Actions: Issuer: Pfleiderer AG -- Outlook, Changed To Negative From Rating Under Review Issuer: Pfleiderer Finance B.V. -- Outlook, Changed To Negative From Rating Under Review Headquartered in Neumarkt/Germany, Pfleiderer AG, is one of the leading manufacturers of engineered wood in Europe and North America. Group sales and operating result in 2007 amounted to EUR1.8 billion and EUR137 million respectively. PHYSIO UND SPORT: Claims Registration Period Ends December 20 ------------------------------------------------------------- Creditors of Physio und Sport GmbH have until Dec. 20, 2008, to register their claims with court-appointed insolvency manager. Creditors and other interested parties are encouraged to attend the meeting at 9:15 a.m. on Jan. 23, 2009, at which time the insolvency manager will present his first report. The meeting of creditors will be held at: The District Court of Marburg/Lahn Hall 154 District Court Building Universitatsstrasse 48 35037 Marburg/Lahn Germany Claims set out in the insolvency manager's report will be verified by the court during this meeting. Creditors may also constitute a creditors' committee or opt to appoint a new insolvency manager. The insolvency manager can be reached at: Robert Schiller Fach 43 Hedwig-Jahnow-Strasse 18 35037 Marburg Germany Tel: 06421/30991-0 Fax: 06421/30991-11 The District Court opened bankruptcy proceedings against the company on Oct. 17, 2008. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: Physio und Sport GmbH Bahnhofstrasse 44 d 35282 Rauschenberg Germany Attn: Gerald Horeis, Manager Wolfstall 14 42799 Leichlingen Germany QUADRIFOGLIO VERWALTUNGS: Claims Registration Ends December 19 -------------------------------------------------------------- Creditors of Quadrifoglio Verwaltungs GmbH have until Dec. 19, 2008, to register their claims with court-appointed insolvency manager. Creditors and other interested parties are encouraged to attend the meeting at 9:30 a.m. on Jan. 9, 2009, at which time the insolvency manager will present his first report. The meeting of creditors will be held at: The District Court of Hameln Hall 106 Zehnthof 1 31785 Hameln Germany Claims set out in the insolvency manager's report will be verified by the court during this meeting. Creditors may also constitute a creditors' committee or opt to appoint a new insolvency manager. The insolvency manager can be reached at: Dr. Rainer Eckert Arthur-Menge-Ufer 5 30169 Hannover Germany Tel: 0511/26094450 Fax: 0511/26094451 E-mail: eckert-hannover@rae-eckert.de Web site: www.rae-eckert.de The District Court opened bankruptcy proceedings against the company on Oct. 17, 2008. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: Quadrifoglio Verwaltungs GmbH Attn: Siegfried Sowa, Manager Marktstrasse 42 30890 Barsinghausen Germany =========== G R E E C E =========== ANTENNA TV: S&P Maintains 'B' Credit Rating on Nove Televizia Sale ------------------------------------------------------------------ Standard & Poor's Ratings Services affirmed its 'B' long-term corporate credit and all debt ratings on Greek broadcaster Antenna TV S.A. following the completion of the group's sale of its Bulgarian TV business, Nova Televizia, to Modern Times Group MTG AB for about EUR621 million in cash. The outlook is stable. At the same time, S&P removed the ratings from CreditWatch with developing implications, where they had been placed on July 31, 2008. "The affirmation mainly reflects the group's very strong liquidity position following the receipt of the Nova TV sale proceeds, which mitigates the poor operating and financial performance of the Greek Antenna channel," said Standard & Poor's credit analyst Melvyn Cooke. Liquidity will be a prime factor in maintaining the current ratings once the sale proceeds are used up, as Antenna is generating operating losses and, with Nova TV, the group has lost operating diversity and its major EBITDA and cash flow contributor. "The stable outlook reflects S&P's expectations, that, despite material uncertainties on for what and when the group will use the sale proceeds, the 'B' rating encapsulates Antenna's most likely medium-term credit profile," said Mr. Cooke. The outlook also assumes that any acquisition Antenna makes using its sale proceeds would replace Nova TV with an asset or assets of similar creditworthiness, while maintaining adequate liquidity, so as to comfortably absorb negative free cash flow generation until operating performance at the Antenna TV channel is turned around. Downward rating pressure may materialize if the group uses most of its cash to buy or invest in assets with lower credit quality that require substantial funding and/or financial support, thereby significantly weakening liquidity. Similarly, undertaking material shareholder distributions while failing to turn around the Antenna TV channel, which would also negatively impact liquidity, would pressure the ratings. Rating upside, while not likely in the medium term in S&P's view, may materialize if the group acquires a robust cash-generative asset while maintaining sufficiently robust liquidity. ============== I R E L A N D ============= SMURFIT KAPPA: Reports EUR48.9 Mln Net Profit in Third Qtr. 2008 ---------------------------------------------------------------- Smurfit Kappa Group plc on Wednesday, Nov. 12, released unaudited financial results for the 3 months and 9 months ending September 30, 2008. For the nine months to September 30, 2008, the Group reported net profit of EUR179 million compared to net profit of EUR57.2 million for the nine months to September 30, 2007. For the three months to September 30, 2008, the Group reported net profit of EUR48.9 million compared to net profit of EUR89.1 million for the three months to September 30, 2007. At September 30, 2008, the Group's balance sheet showed EUR8.9 billion in total assets, EUR6.6 billion in total liabilities and EUR2.3 billion in total shareholders' equity. 2008 First Nine Months|Financial Performance Revenue of EUR5.4 billion in the first nine months of 2008 was flat compared to the same period in 2007. However, allowing for the negative impact of currency of EUR91 million and net disposals and closures of EUR28 million, revenue shows an underlying increase of EUR96 million, the equivalent of almost 2%. EBITDA of EUR745 million in the first nine months of 2008 was EUR44 million, or 6% lower than in the comparable period in 2007, mainly reflecting the margin pressure experienced in the Group's containerboard system, primarily in the third quarter, offset by synergies and cost take-out. Allowing for the impact of currency, net disposals and closures, the underlying EBITDA decrease would have been EUR32 million, the equivalent of 4%. 2008 Third Quarter|Financial Performance Revenue of EUR1,753 million in the third quarter of 2008 represents a 4% decrease, or EUR76 million, compared with revenue of EUR1,829 million in the third quarter of 2007. Allowing for the negative impact of currency of EUR31 million offset by net acquisitions, disposals and closures of EUR2 million, revenue shows an underlying decrease of EUR47 million, the equivalent of 3%. At EUR231 million for the third quarter, EBITDA was EUR44 million lower than in the same period last year. This includes a negative currency impact of EUR5 million. On a comparable basis, EBITDA was lower by EUR39 million, the equivalent of 14% year-on-year. Compared to the second quarter of 2008, EBITDA decreased by EUR26 million in the third quarter, the equivalent of 10%. Excluding the impact of currency, disposals and closures, EBITDA decreased by EUR28 million, the equivalent of 11% quarter-on-quarter. Performance Review & Outlook Gary McGann, Smurfit Kappa Group CEO, commented: "The Group is pleased to report a strong free cash flow performance of EUR226 million in the first nine months of 2008, double the levels of the corresponding period in 2007. Net debt was significantly reduced over the period. This positive outcome primarily reflects the benefits of the Group's integrated model, the resilience of its downstream corrugated business, the superior profitability of its growing Latin American operations and its leading Kraftliner presence across Europe, a market positively influenced by the recent strengthening of the US$. In the current credit market environment, the Group continues to benefit from its low cost of financing and long term debt profile with no material maturity in the next four years. The Group also benefits from strong liquidity, with approximately EUR730 million of cash on its balance sheet and unused committed credit lines of approximately EUR600 million. As indicated since its first quarter 2008 report, the Group expects conditions to remain challenging for the remainder of the year, characterized by the slowdown in corrugated demand and pressure on pricing. Against that backdrop, the Group is pleased to confirm that it remains on target to deliver the expected level of financial performance in 2008. While declining interest rates, a stronger dollar, further capacity rationalization decisions and increased financing risk for the announced new capacity are potentially positive factors as we look forward, nonetheless the Group expects a continuation of tough operating conditions for 2009. In that context, to further increase its cash flow generation capability and to maximize its debt paydown through the cycle, the Group will progressively reduce its capital expenditure from current levels." About Smurfit Kappa Group Headquartered in Dublin, Ireland, Smurfit Kappa Group -- http://www.smurfit-group.com/-- manufactures containerboard containerboard and converts it into corrugated cases, folding cartons, paper sacks, tubes, and composite cans. Other products include boxboard, sack kraft paper, and printing and writing paper. The company produces 6 million tons of paper annually and has 300 facilities worldwide. In Latin America, the company operates in Argentina, Brazil, Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, Mexico and Venezuela. * * * Smurfit Kappa Group plc continues to carry Moody's Investors Service's Ba3 corporate family rating with positive outlook. Moody's changed the outlook to positive from stable in June 2008. Smurfit also carries Standard & Poor's Rating Services' 'BB' long-term corporate credit ratings with stable outlook. S&P raised the group's long-term corporate credit ratings to 'BB' from 'BB-' in April 2008. ========= I T A L Y ========= ALITALIA SPA: To Cut Flights Amid Strikes and Soaring Debts ----------------------------------------------------------- Alitalia SpA's bankruptcy administrator Augusto Fantozzi said the carrier will cut about 100 flights a day until Dec. 1, 2008, when investor group Compagnia Aerea Italiana is expected to start operating the new airline, Bloomberg News reported citing daily la Repubblica. Separately, Agence France-Presse reported Alitalia's debts have soared to some EUR2.3 billion as a pilot and air crew strike caused canceled flights. AFP said Alitalia pilots and other staff are striking in protest at CAI's takeover deal. According to AFP, Mr. Fantozzi told RAI television he had "around two billion in ordinary debt for the supply of goods and services," before taking into account a EUR300 million government loan. 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. As reported in the TCR-Europe on November 7, 2008, Alitalia S.p.A. 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. 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. IT HOLDING: Posts EUR10.1 Mln Net Loss in 9-Mos Ended Sept. 30 -------------------------------------------------------------- The Board of Directors of IT Holding S.p.A., on Thursday, Nov. 13, approved the interim report at September 30, 2008: * Net revenues of EUR468.0 million compared to EUR502.5 million in 9M07; * EBITDA of EUR83.2 million from EUR98.7 million in 9M07. 9M08 Financial Highlights In the first nine months of 2008, the Group's net revenues amounted to EUR468.0 million compared to EUR502.5 million for the same period of 2007. The factors responsible for this decline include the slowing-down of the economy in general, which led to a squeeze in consumption on the luxury goods market, and for our Group in particular led to a Fall/Winter 2008/2009 order collection that is slightly down on the same season of last year. Lastly, at constant exchange rates, the turnover of the first nine months of 2008 would equal EUR477 million approx. (-5.1% compared to the first nine months of 2007). In terms of geographical distribution of revenues, the main markets registered a contraction, while the revenues in the Rest of the World countries registered an increase of 6.9%, compared to the corresponding period of the previous year. In particular, the Middle East recorded a 4.2% increase year on year. EBITDA equaled EUR83.2 million compared to EUR98.7 million in 9M07, showing a reduction both in absolute terms and as a percentage of revenues, from 19.6% in 9M07 to 17.8%. EBITDA for the first nine months of 2008 includes an extraordinary provision for legal disputes entirely out of the ordinary. If this provision is added back, the EBITDA margin for the period is 18.4%. EBITDA of the first nine months of 2007 benefited from the extraordinary income, due to the valuation of the severance indemnity, without which the incidence on revenues for the period would have been 19.3%. Consequently, the comparison in terms of profits deriving from ordinary operations showed a result that decreased by 1 percentage point in 9M08 compared to the same period of 2007. Operating result (EBIT) equaled EUR27.9 million compared to EUR45.9 million in the corresponding period of the previous year, due to the changes mentioned above. The pre-tax result substantially broke even, from EUR21.2 million in 9M 2007 to EUR-0.1 million. This result is affected by the overheads structure (mainly staff costs and rents), which has a negative impact on the profit margin, due to the lower turnover. The consolidated net result showed a net loss of EUR10.1 million, compared to a net profit of EUR6.6 million in the same period of 2007. Compared to September 30, 2007 net debt fell by EUR57.0 million, decreasing to EUR295.4 million from EUR352.4 million at the same date a year earlier, due to a similar reduction in net working capital. "The results for the first nine months of 2008 �- noted Tonino Perna, Chairman and Chief Executive Officer of the IT Holding Group -� have been strongly influenced by the negative economic situation, which has directly affected all the markets on which we are present." "In 2008 the Group, in view of the difficult situation and of the Spring/Summer 2009 order collection season �- continued Perna �- expects consolidated revenues down by approximately 8% year on year and EBITDA margin of 15-16%." Headquartered in Milan, Italy, IT Holding S.p.A. -- http://www.itholding.it/-- controls a group of companies that design, produce and distribute high-quality products under owned brands -- Ferre, Malo, Exte -- as well as under license agreements -- D&G, Versus, Versace Jeans Couture, Just Cavalli, C'N'C Costume National. Worldwide distributing network includes 29 directly operated stores, 111 other mono-brand stores and over 4,000 highly selected department and specialty stores. IT Holding has over 1,700 employees. It went public on November 1997 and its shares are traded on Milan Stock Exchange. * * * As reported in the TCR-Europe on Oct. 1, 2008, Standard & Poor's Ratings Services revised its outlook to negative from stable on Italy-based fashion company IT Holding SpA, reflecting a deterioration in credit protection metrics. At the same time, Standard & Poor's affirmed its 'B-' long-term corporate credit rating on the company. In addition, S&P raised its senior unsecured issue rating on the EUR185 million senior secured notes issued by IT Holding Finance S.A. to 'CCC+' from 'CCC'. The rating is one notch below the corporate credit rating on IT Holding, as opposed to two notches previously, reflecting a significantly reduced amount of priority- ranking debt in the company's capital structure. The recovery rating was also revised to '5' from '6', indicating S&P's expectation of modest (10%-30%) recovery for senior noteholders in the event of a payment default. As reported in the TCR-Europe on Sept. 18, 2008, Moody's Investors Service affirmed the B3 Corporate Family Rating of IT Holding S.p.A. and the B3 senior secured rating on the notes due 2012 issued by IT Holding Finance S.A. and changed the outlook on all ratings from stable to negative. The rating action reflects the weakening operating performance of the company over recent quarters in light of increasing concerns on consumer spending in general and the potential impact on the company's profitability over the short term. IT HOLDING: Consumer Spending Pressure Cues Moody's Junk Ratings ---------------------------------------------------------------- Moody's Investors Service downgraded IT Holding SpA Corporate Family Rating and Probability of Default Rating to Caa1 from B3, and the Senior Secured rating on the EUR 185 million notes due 2012 issued by IT Holding Finance SpA to Caa2 (LGD4, 69%) from B3. The ratings are on review for further possible downgrade. "This rating action reflects ongoing pressure on consumer spending, due to the generally weak economic environment and high uncertainty on consumer confidence, and the negative impact on IT Holding operating performances so far during the year, and the expectation that the company's key credit metrics might remain in line with a Caa rating at best for the next twelve months", says Paolo Leschiutta, Vice President at Moody's and lead analyst for IT Holding. "Moody's also notes the deteriorating liquidity profile of the company as it continues to rely on receiving bank support at time when the current conditions in the financial markets remain unsettle and further extension of ongoing support might be more challenging for the company". "Given the ongoing economic slowdown and the uncertainty related to the company's liquidity profile in connection with the current distress in the global capital markets, ratings have been placed under review for further possible downgrade", explains Mr. Leschiutta. The review will focus on (i) the company's capability to secure proper financing needed to invest in the day to day activity and to face pending debt maturities (including the EUR9.4 million debt repayment delayed till the Dec. 22, 2008), (ii) the company's line of actions to restore the operating performances at core businesses, (iii) the likelihood of further deterioration in consumer spending in general and in the luxury apparel segment in particular, and (iv) the expected credit profile of IT Holding going forward to monitor whether this will remain supportive of the business risk profile of the company. The last rating action on IT Holding was on the Sept. 16, 2008 when Moody's changed the outlook on all ratings to negative. Ratings affected by this action are: - Corporate Family Rating and Probability of Default Rating downgraded to Caa1 from B3; - Senior secured rating on the EUR 185 million notes due 2012 downgraded to Caa2 (LGD4, 69%) from B3; Based in Italy, IT Holding S.p.A. is an European leading operator in the branded apparel and accessories market mainly focused on the young lines segment. During the first nine months ended September 2008, IT Holding reported EUR468 million of consolidated net revenues and EUR38.2 million of EBITDA (adjusted for investments in collection development during the period). IT HOLDING: S&P Downgrades Corporate Rating to 'SD' from 'B-' ------------------------------------------------------------- Standard & Poor's Ratings Services lowered its long-term corporate credit rating on Italy-based fashion company IT Holding SpA to 'SD' from 'B-'. At the same time, the senior unsecured debt rating on the EUR185 million senior secured notes issued by IT Holding Finance S.A. was lowered to 'C' from 'CCC+'. The recovery rating on the notes is unchanged at'5', indicating S&P's expectation of modest (10%-30%) recovery for senior noteholders in the event of a payment default. The rating actions reflect the announcement by ITH on Nov. 14 that it has requested a deferral of a EUR9.4 million principal payment on its unrated bank loan that fell due on Oct. 20, 2008. "Standard & Poor's has lowered the corporate credit rating on ITH to 'SD' as the due date of ITH's bank loan payment has passed and the payment was missed; S&P's default definitions include payment defaults on both rated and unrated financial obligations," said Standard & Poor's credit analyst Diego Festa. "ITH has, however, confirmed that the payments on the senior secured notes remain current, which is why S&P see this default as selective. If the company were to obtain consent from bank lenders to postpone the repayment, S&P would expect to reinstate S&P's issuer credit rating to 'CC' or above." In the 12 months ended September 2008, ITH's ratio of adjusted EBITDA to interest was 1.0x, below S&P's guideline of 1.5x. The quarter to Sept. 30, 2008, proved to be more challenging than expected, with net sales down 7% year on year, and EBIT down by 39% in the same period. The plunge in profits reflected the negative effect of ITH's relatively high operational gearing in a declining sales environment: In the third quarter ended September 2008, the company's primary fixed costs--personnel, investments in collection development, and rents--accounted for more than 40% of total cash expenses, up from about 30% one year earlier. Based on the order book for the spring/summer 2009 collections, management has revised its guidance for 2008, with revenues expected to decline by 8% year on year, and EBITDA expected to be in the range of EUR88 million-EUR95 million (EUR116 million in 2007). GTP Holding SpA, the parent company that indirectly owns ITH through PA Investments S.A., is in negotiations with a Chinese industrial group on possible financial support, and commercial and manufacturing partnership agreements with reference to the Asian market. These negotiations are not finalized and details of the transaction have not yet been disclosed. In addition, ITH has said that it has failed to meet the formal conditions to draw on its EUR30 million loan facility with Natixis S.A. (A+/Stable/A-1). =================== K A Z A K H S T A N =================== * S&P Confirms Counterparty Ratings on Kazakhstan's Five Banks -------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its long- and short- term counterparty credit ratings on the five largest private sector banks in the Republic of Kazakhstan (foreign currency BBB- /Negative/A-3, local currency BBB/Negative/A-3), namely BTA Bank J.S.C. (BTA, 'BB/B'), Kazkommertsbank (JSC) (KKB, 'BB/B'), Halyk Savings Bank of Kazakhstan (Halyk, 'BB+/B'), Alliance Bank JSC (Alliance, 'B+/B'), and ATF Bank (ATF, 'BB+/B'). At the same time, Standard & Poor's revised the outlook on ATF to negative from stable. The outlooks on the other four banks remain negative. The rating actions follow the recently announced government support measures that reduce the immediate downgrade pressure on BTA, KKB, Halyk, and Alliance. For Alliance, and similar to these other three banks, S&P now gives greater weight for potential government support in the ratings. The government recently explicitly identified Alliance as a systemically important bank and included it in its support program. Some uncertainties remain regarding the inclusion of other banks--including ATF, majority owned by UniCredit, and CenterCredit Bank (not rated), partly owned by Kookmin Bank--under this scheme. Reflective of continued funding and liquidity challenges and asset quality deterioration, most of S&P's outlooks on financial institutions in Kazakhstan remain negative. This outlook revision on ATF reflects these concerns about factors that put downward pressure on the bank's stand-alone creditworthiness. The long- term rating on ATF includes a three-notch uplift from its stand- alone credit quality for expected parental support, resulting from its majority ownership by Italian bank UniCredit SpA (A+/Negative/A-1). The Kazakh government announced in late October a series of support actions to sustain the stability of the banking sector and the economy. The most significant support measures include: -- Some capital injections into the largest private sector banks (up to US$5 billion), -- Liquidity support for corporations and small and midsize enterprises (US$5 billion), -- Lowering of obligatory reserve requirements, -- Tightening of capital requirements, -- A seven-fold increase in the maximum guarantee on retail deposits (to KZT5 million, or more than US$40,000, from KZT700,000) and, -- Extending refinancing possibilities with the National Bank of Kazakhstan. These measures fit with S&P's classification of Kazakhstan as an "interventionist" country regarding its support of systemically important private banks. As such, the long-term ratings on KKB, BTA, Halyk, and Alliance are one notch higher than their stand- alone creditworthiness. The government has proposed to invest, in the form of common, preferred shares and subordinated debt, at least US$300 million in KKB, US$2.3 billion in BTA, US$500 million in Halyk, and US$370 in Alliance. Although the size of the so-called capitalization program is significant, representing almost 5% of Kazakhstan's GDP or total banking system assets, Standard & Poor's understands that the majority of these funds will consist of subordinated debt, which S&P do not take into account in S&P's capital assessment. Therefore, this will most likely bring these banks' adjusted common equity up by only about 10%-15%. As a result, the government may take up to a 25% stake in each of these banks, unless current shareholders or new investors decide to subscribe to the capital increases. Although S&P expects this process to take at least a few months, these funds should soon be placed as deposits with the banks. S&P does not expect any major shifts in the banks' strategic development, and the government has announced its plans to divest these investments in the coming years once the banking sector tension eases considerably. Although smaller banks should gain a wider access to the National Bank of Kazakhstan refinancing window and government deposits, the government support plan risks putting additional pressure on them. Smaller institutions are likely to be challenged to maintain customer confidence and meet more conservative regulatory capital requirements in the coming months. S&P currently sees no tangible signs of banking sector recovery and believe that the resolution of the problems will be a lengthy process. At the same time, S&P acknowledge Kazakh banks' efforts to increase their provisioning needs and better recognize problem loans. Although Kazakh banks have adapted swiftly and effectively to the radically altered economic and banking environment, S&P feels that the prolonged and deepening dislocation is eroding their creditworthiness. The economic environment is characterized by a deep-seated global liquidity crisis and a domestic economic slowdown, both of which continue to erode banks' liquidity levels and asset quality. S&P estimates "loans under stress" at 20% for the banking sector, and provisioning coverage is only slowly approaching this level. On a positive note, the expected capital increases should improve banks' capitalization in the near future. Ratings List Outlook Action * ATF Bank To From -- ---- Counterparty credit rating BB+/Negative/B BB+/Stable/B Ratings Affirmed * BTA Bank J.S.C. * Kazkommertsbank (JSC) To From -- ---- Counterparty credit rating BB/Negative/B BB/Negative/B * Halyk Savings Bank of Kazakhstan To From -- ---- Counterparty credit rating BB+/Negative/B BB+/Negative/B * Alliance Bank JSC To From -- ---- Counterparty credit rating B+/Negative/B B+/Negative/B =================== K Y R G Y Z S T A N =================== HIM TRANS: Creditors Must File Claims by December 10 ---------------------------------------------------- LLC Him Trans Stroy has declared insolvency. Creditors have until Dec. 10, 2008, to submit written proofs of claims. Inquiries can be addressed to (0-772) 31-81-70. TECHNO NIKOL-BISHKEK: Creditors Must File Claims by Dec. 10 ----------------------------------------------------------- LLC Techno Nikol-Bishkek has declared insolvency. Creditors have until Dec. 10, 2008, to submit written proofs of claims to: LLC Techno Nikol-Bishkek Lushihin Str. 99a Bishkek Kyrgyzstan ===================== N E T H E R L A N D S ===================== FORTIS BANK: S&P Corrects Error & Rates EUR2 Bil. Notes at 'BB' --------------------------------------------------------------- Standard & Poor's Ratings Services corrected a technical error, saying that the EUR2 billion mandatory convertible securities issued by entities within the Belgian-Dutch bancassurance group Fortis are rated 'BB'. The debt ratings on various hybrid capital instruments, including the MCS, were lowered to 'BB' from 'BBB' and placed on CreditWatch with developing implications on Oct. 6, 2008, as indicated in S&P's article. Due to an administrative error regarding the identities of certain instruments and issuers, the lowering of the debt rating on the MCS did not update or display accurately in S&P's database. This S&P's press release therefore corrects this mistake. Fortis Bank Nederland N.V., Fortis Bank SA/NV, and holding companies Fortis SA/NV and Fortis N.V. are co-obligors for the MCS issued in 2007. FBN is the primary co-obligor of this instrument, which is booked in the Dutch bank's balance-sheet. S&P expects to resolve the CreditWatch within the coming weeks. Ratings List Fortis N.V. Fortis SA/NV -- Counterparty Credit Rating BBB-/Watch Neg/A-3 Fortis Bank Nederland (Holding) N.V. -- Counterparty Credit Rating A/Watch Dev/A-1 -- EUR2 Billion Mandatory Convertible Securities * BB/Watch Dev Fortis Bank SA/NV -- Counterparty Credit Rating A/Watch Pos/A-1 -- EUR3 Billion Convertible Equity-Linked Junior Subordinated Perpetual Hybrid (CASHES) ** BB/Watch Dev * Fortis Bank Nederland N.V. is the primary co-obligor; Fortis Bank SA/NV, Fortis SA/NV, and Fortis N.V. are co-obligors. ** Issued by Fortis Bank SA/NV; Fortis SA/NV and Fortis N.V. are co-obligors. =========== R U S S I A =========== EVRAZ GROUP: Seeks US$1.8 Bil. Loan on IPSCO Acquisition -------------------------------------------------------- Evraz Group SA has requested a US$1.8 billion loan from state bank Vnesheconombank to refinance debt incurred to acquire Canadian steel pipe maker IPSCO, Reuters reports citing Moscow-based newspaper Vedomosti. Few days before, Evraz secured a US$364 million one-year loan from state-controlled VTB Bank to pay taxes, Reuters said in a Nov. 13 report. Reuters recalls Evraz has said that it is cutting production and capital expenditures at a number of its plants due to the global financial crisis, and may be forced to cut production within Russia by up to a quarter this month. Its European and North American operations are not to be affected, Reuters notes. Vnesheconombank, according to Reuters, has been entrusted by the Kremlin with the task of distributing a US$50 billion rescue package to help Russian companies refinance a total US$120 billion of Western loans by the end of 2009. VTB Bank meanwhile operates in the commercial banking sector. About Evraz Group S.A. Evraz Group S.A. and its subsidiaries are involved in the production and distribution of steel and related products. In addition, the Company owns and operates certain mining assets. Its steel production and mining facilities are mainly located in the Russian Federation. During the year ended December 31, 2007, Evraz produced 16.4 million tons of crude steel. Evraz�s principal assets comprise three of the steel plants in Russia: Nizhny Tagil (NTMK) in the Urals region and West Siberian (Zapsib) and Novokuznetsk (NKMK) in Siberia, as well as Palini e Bertoli in Italy, Evraz Vitkovice Steel in the Czech Republic, and Evraz Oregon Steel Mills headquartered in the United States. In October 2007, the Company completed the buyout of NTMK, Zapsib, KGOK and VGOK, and the Nakhodka Commercial Sea Port. On January 16, 2008, the Company acquired Claymont Steel Holdings, Inc. In June 2008, the Company completed the acquisition of IPSCO's Canadian plate and pipe business from SSAB. IRKUTSKENERGO AO: S&P Downgrades Corporate Credit Rating to 'B-' ---------------------------------------------------------------- Standard & Poor's Ratings Services said that it had lowered its long-term corporate credit rating on Russian regional power and heat utility Irkutskenergo, AO EiE to 'B-' from 'B+'. S&P also lowered the Russia national scale rating to 'ruBBB-' from 'ruA'. Both ratings were kept on CreditWatch, where they were placed with negative implications on July 22, 2008, due to very weak liquidity. "The downgrade reflects S&P's increasing uncertainty about the company's ability to raise financing in time to cover an upcoming obligatory minority share buyback and short-term debt payments," said Standard & Poor's credit analyst Sergei Gorin. The current ratings are constrained by Irkutskenergo's very weak liquidity position and strongly negative free operating cash flow. In addition, the ratings incorporate the controlling shareholders' strong interest in access to Irkutskenergo's cheap electricity production, the absence of efficient corporate governance mechanisms, the uncertainty about the company's ongoing restructuring, the evolving industry regulatory regime, and high customer concentration. However, Irkutskenergo benefits from its low-cost hydrogenation capacity and incumbent position in the Irkutsk Oblast (B+/Watch Neg/--), where demand is solid. Although the Irkutsk Electricity Grid Co. spin-off will leave the company without the stable cash flow from the regulated grid business, transferring some debt to IEGC would be positive for its financial metrics. The company's cash reserves, short-term bank lines, and the line obtained in October 2008 were significantly less than its short-term debt of RUR7.9 billion and the cash needed to fund the buyback. "We plan to resolve the credit watch placement after the company's liquidity situation, structure, and financial position are clarified," said Mr. Gorin. The ratings could be lowered further if the company fails to negotiate financing to cover the share buyback in November 2008 and its upcoming debt maturities in January 2009. S&P would not consider inability to make timely payments on the share buyback as a default. However, such a scenario would further emphasize the company's very weak liquidity situation. If the company obtains credit lines sufficient to cover its short-term debt, the ratings could be affirmed. MOSCOW STARS: CB Moskommertsbank Rating Cut Cues Negative Outlook ----------------------------------------------------------------- Fitch Ratings says that its decision last week to revise the Outlook on Moscow Stars B.V.'s senior class notes to Negative from Stable was a result of the downgrade of CB Moskommertsbank to 'B' (Outlook Negative) from 'B+ (Outlook Negative) on Nov. 10, 2008. The agency affirmed the 'BBB' ratings on Moscow Stars' notes. The transaction is a securitization of mortgage loans originated by CB Moskommertsbank, which is wholly owned by Kazkommertsbank ('BB'/Negative Outlook). In line with Fitch's criteria, the class A rating and Outlook are linked to the originator's rating and Outlook. As such, a further downgrade of the originator would trigger a downgrade of the class A notes. According to Fitch's criteria, the rating of the senior class notes cannot be more than six notches above the rating of the originator. The class A notes are currently rated 'BBB' while CB Moskommertsbank is rated 'B'. A downgrade of CB Moskommertsbank below 'B' would widen the gap between the class A notes' rating and the originator's rating to over six notches. Such an event would likely trigger a downgrade of the class A notes to a rating level at which the gap between the rating of the notes and the originator is equal to, or less than, six notches. Consequently, Fitch believes a Negative Outlook is currently appropriate for the class A notes. According to Fitch's criteria for emerging markets transactions, the loss severity stresses are linked to the Long-term local currency Issuer Default Rating of the Russian Federation ('BBB+'). In light of Fitch's recent Outlook change on Russia to Negative, the agency highlights that a downgrade of the Russian Federation would result in higher loss severity assumptions for the class A and B notes. Fitch has analysed the effect of a potential single-notch downgrade of the Russian Federation on the class A and B notes. The results of the analysis showed the notes could withstand a single-notch downgrade of the sovereign due to increased credit enhancement since closing, which was achieved through a rapid amortisation of the notes. As of November 2008, the credit enhancement for the class A and B notes was 23.7% and 11.4% respectively compared with the values at closing, which were 17% and 8%. Annualised prepayment ratios have been above 19% since closing. The transaction has so far performed in line with the Fitch's expectations. The cumulative defaults reported by the servicer have amounted to 1.22% of the initial collateral balance while the annual excess spread has averaged around 3.8% since closing. Fitch will continue to closely monitor Russian economic developments and their potential impact on the rating of the notes. RUSSIAN MORTGAGE: Fitch Changes Outlook to Stable after Russia's ---------------------------------------------------------------- Fitch Ratings says that its decision last week to change the Outlook on Russian Mortgage Backed Securities 2006-1 S.A.'s mezza nine and junior class notes to Stable from Positive was a result of the change in the Outlook on the Russian Federation ('BBB+') on Nov. 8, 2008 to Negative from Stable. At the same time, the ratings of the notes were affirmed at 'BBB' and 'BB-' (BB minus) respectively. Russian Mortgage Backed Securities 2006-1 S.A. is a securitization of mortgage loans originated by Bank VTB (VTB 'BBB'/Outlook Negative), the second-largest bank in Russia and majority-owned by the Russian State. A downgrade of more than one notch of the sovereign ratings will add downward pressure on the ratings of the notes. As such, the Outlook change in the class B and class C notes was a reflection of the change in the sovereign's outlook and was not triggered by deterioration in the transaction performance. Fitch highlights that a downgrade of the Russian Federation would result in higher loss severity assumptions for the notes. Fitch has analyzed the effect of a potential single-notch downgrade of the Russian Federation on the notes. The results of the analysis showed the notes could withstand a single-notch downgrade of the sovereign due to increased credit enhancement since closing, which was achieved through rapid amortization of the notes. The transaction has amortized by more than the 49% since closing due to the relatively high prepayment rates, which have averaged around 21% per annum since closing. The rapid amortization has increased credit enhancement for the notes, which is currently at approximately 33% for class A, 12% for class B and 5% for class C notes. A downgrade of the Russia Federation ratings will likely trigger a revision of the sovereign's 'A-' Country Ceiling; the latter expresses the likelihood that transfer & convertibility restrictions will be imposed by the local authorities. However, this would not impact the Class A notes as they are protected for up to 18 months from T&C restrictions. In the event that the Country Ceiling is revised down by a notch, the one-notch differential between the notes and the Country Ceiling can be sustained by protection cover of six to 12 months. As this is less than the cover currently provided, a downward revision of the Country Ceiling by one notch would not impact the notes' rating. The protection is provided by a facility guaranteed by the International Finance Corporation, credit-linked to the World Bank ('AAA'/Outlook Stable), which provides liquidity in the event that the Russian government imposes T&C restrictions. The Class B notes also benefit from the same facility but as they are rated below the Country Ceiling, they would not be impacted by a single notch downward revision of the Country Ceiling. Russian Mortgage Backed Securities 2006-1 S.A. has so far performed in line with Fitch's expectations. The transaction has not posted any defaults since closing while the annual excess spread has averaged around 3.5% since closing. Fitch will continue to closely monitor Russian economic developments and their potential impact on the rating of the notes. TATNEFT OAO: Net Profit Up 11% to RUR38.7BB in January-September ---------------------------------------------------------------- RIA Novosti reports the net profit of Tatneft OAO under Russian Accounting Standards increased by 11% in January-September to RUR38.7 billion from the same period last year. According to the report, Tatneft's revenues in the reporting period climbed 38% to RUR196.32 billion (US$7.27 billion). Its gross profit grew 36% to RUR76.83 billion (US$2.8 billion) while operating profit increased 37% to RUR67.33 billion (US$2.5 billion). In 2007 the company produced 25.9 million metric tons (190 million bbl) of oil or about 5% of Russia's total crude output, the report notes. About Tatneft Headquartered in Tatartan, Russia, OAO Tatneft -- http://www.tatneft.ru/eng/-- explores for, produces, refines and markets crude oil. The company operates a chain of retain gasoline filling stations and exports some of its petrochemical products to former Soviet Union countries and Europe. * * * Tatneft OAO continues to carry Ba2 long-term corporate family and probability of default ratings from Moody's with stable outlook. The company also carries a BB long-term issuer default rating and a B short-term default rating from Fitch with stable outlook. =========== T U R K E Y =========== * S&P Changes Outlook on 7 Turkish Financial Firms to Negative --------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlooks on seven Turkish financial institutions and one operating holding company. The outlooks on these entities were revised to negative from stable: -- T.C. Ziraat Bankasi A.S. (Ziraat), -- Turkiye Is Bankasi A.S. (Isbank), -- Turkiye Garanti Bankasi A.S. (Garanti), -- Garanti Finansal Kiralama A.S. (Garanti Leasing), -- Yapi ve Kredi Bankasi A.S. (YapiKredi), -- Turkiye Vakiflar Bankasi T.A.O. (VakifBank), -- HSBC Bank A.S., and -- Dogus Holding A.S. At the same time, the 'BB-/B' long- and short-term counterparty credit ratings on Ziraat, Isbank, Garanti Leasing, YapiKredi, VakifBank, and Dogus Holding were affirmed. Furthermore, the 'BB-' long-term counterparty credit rating on Garanti and the 'BB/B' long- and short-term counterparty credit ratings on HSBC Bank A.S. were affirmed. Additionally, the Turkish long-term national scale ratings on Isbank, VakifBank, YapiKredi, and Ziraat were lowered to 'trA' from 'trA+', and the Turkish long-term national scale ratings on HSBC Bank A.S. were lowered to 'trAA' from 'trAA+'. Furthermore the 'trA-1' short-term national scale ratings on Isbank, VakifBank, YapiKredi, Ziraat, and HSBC Bank A.S. were affirmed. The outlook revision follows that on the sovereign, Republic of Turkey (foreign currency, BB-/Negative/B; local currency, BB/Negative/B), following a shift in the balance of risks to the downside as external financing conditions remain difficult. The deteriorating economic prospects are expected to hamper Turkish banks' loan growth and financial performance, due to higher provisioning needs and more difficult refinancing conditions on international markets. Furthermore, domestic banks' performance and fundamentals are highly correlated with sovereign creditworthiness through, among other things, their significant holdings of government securities. However, the positive momentum of seven successive years of growth and modernization put Turkish banks in a relatively robust position compared with regional peers, particularly in the Commonwealth of Independent States countries, to withstand the current economic downturn and repercussions from the global financial turmoil. Banks in Turkey boast relatively low loan leverage and diversified funding, which translate into stronger liquidity profiles. While current asset quality and capitalization indicators remain good, Turkey is considered a risky country, which has just started to feel the repercussions of the global financial turmoil. Hence S&P expects some deterioration in banks' financial profile over the medium term. In this respect, S&P takes some comfort from the successful track record of Turkey's leading private sector banks in confronting the country's recurring financial and political crises. The negative outlook mirrors that on the Republic of Turkey. If confidence and economic growth prospects deteriorate, domestic banks will have to operate in a difficult and volatile financial environment, which will exert pressure on profitability, asset quality, and capitalization. Furthermore, the constrained refinancing prospects in the medium term, although manageable, will negatively affect growth prospects and liquidity. Hence, ratings on banks will remain highly correlated with sovereign creditworthiness. The outlooks on banks are likely to be revised to stable if the same action is made on the sovereign. Ratings List To From -- ---- T.C. Ziraat Bankasi A.S. -- Counterparty credit rating BB-/Negative/B BB-/Stable/B -- Certificates of deposit BB-/B BB-/B -- Long-term Turkish national scale rating trA trA+ -- Short-term Turkish national scale rating trA-1 trA-1 Turkiye Is Bankasi A.S. -- Counterparty credit rating BB-/Negative/B BB-/Stable/B -- Certificates of deposit BB-/B BB-/B -- Long-term Turkish national scale rating trA trA+ -- Short-term Turkish national scale rating trA-1 trA-1 Turkiye Garanti Bankasi A.S. -- Counterparty credit rating BB-/Negative/-- BB-/Stable/-- -- Certificates of deposit BB- BB- Garanti Finansal Kiralama A.S. -- Counterparty credit rating BB-/Negative/B BB-/Stable/B Yapi ve Kredi Bankasi A.S. -- Counterparty credit rating BB-/Negative/B BB-/Stable/B -- Certificates of deposit BB-/B BB-/B -- Long-term Turkish national scale rating trA trA+ -- Short-term Turkish national scale rating trA-1 trA-1 Turkiye Vakiflar Bankasi T.A.O. -- Counterparty credit rating BB-/Negative/B BB-/Stable/B -- Certificates of deposit BB-/B BB-/B -- Long-term Turkish national scale rating trA trA+ -- Short-term Turkish national scale rating trA-1 trA-1 HSBC Bank A.S. -- Counterparty credit rating BB/Negative/B BB/Stable/B -- Certificates of deposit BB/B BB/B -- Long-term Turkish national scale rating trAA trAA+ -- Short-term Turkish national scale rating trA-1 trA-1 Dogus Holding A.S. -- Counterparty credit rating BB-/Negative/B BB-/Stable/B NB: This list does not include all ratings affected. ============= U K R A I N E ============= AGROSTAR LLC: Creditors Must File Claims by November 29 ------------------------------------------------------- Creditors of Agricultural LLC Agrostar (code EDRPOU 32456968) have until Nov. 29, 2008, to submit proofs of claim to: Mr. Alexander Roy Novoaydarsky 93543 Lugansk Ukraine The Arbitration Court of Lugansk commenced bankruptcy proceedings against the company after finding it insolvent on Oct. 2, 2008. The case is docketed as 20/116b. The Economic Court of Lugansk Geroiv VVV Square 3a 91000 Lugansk Ukraine The Debtor can be reached at: LLC Agrostar Komarov Str. 4a Titarevka Starobelsky 92750 Lugansk Ukraine ALPHA-RESOURCE LLC: Creditors Must File Claims by November 29 ------------------------------------------------------------- Creditors of LLC Alpha-Resource (code EDRPOU 34366557) have until Nov. 29, 2008, to submit proofs of claim to: Mrs. Shkil Alla Liquidator Gogol Str. 12, Ap. 7 Dnipropetrovsk Ukraine The Arbitration Court of Dnipropetrovsk commenced bankruptcy proceedings against the company after finding it insolvent on Sept. 25, 2008. The case is docketed as B 26/190-08. The Economic Court of Dnipropetrovsk Kujbishev Str. 1a 49600 Dnipropetrovsk Ukraine The Debtor can be reached at: LLC Alpha-Resource Ap. 132 B. 12 Dwelling District Topolia-3 Dnipropetrovsk Ukraine ENTERPRISE FORMPLAST: Creditors Must File Claims by November 29 --------------------------------------------------------------- Creditors of Joint Ukrainian-Byelorussian Enterprise Formplast (code EDRPOU 32540195) have until Nov. 29, 2008, to submit proofs of claim to: Koziatin Regional State Tax Inspection Temporary Insolvency Manager Orlik Str. 19 Koziatin 22100 Vinnica Ukraine Tel: 2-20-49 fax: 2-48-28 The Arbitration Court of Vinnica commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed as 10/149-0. The Economic Court of Vinnica Hmelnickiy Str. 7 21036 Vinnica Ukraine The Debtor can be reached at: Joint Ukrainian-Byelorussian Enterprise Formplast Promyshlennaya Str. 50 Kalinovka 22400 Vinnica Ukraine, EURO-BUILDING-PROJECT: Creditors Must File Claims by Nov. 29 ------------------------------------------------------------ Creditors of LLC Science-Production Enterprise Euro-Building- Project (code EDRPOU 32297796)have until Nov. 29, 2008, to submit proofs of claim to: Mr. Jury Karpenko Liquidator/Insolvency Manager P.O.B. 6734 69123 Zaporozhje Ukraine The Arbitration Court of Zaporozhje commenced bankruptcy proceedings against the company after finding it insolvent on Oct. 1, 2008. The case is docketed as 12/163/08. The Economic Court of Zaporozhje Shaumiana Str. 4 69001 Zaporozhje Ukraine The Debtor can be reached at: LLC Science-Production Enterprise Euro-Building-Project Korotky Lane 4 69096 Zaporozhje Ukraine GENING LLC: Creditors Must File Claims by November 29 ----------------------------------------------------- Creditors of LLC Gening (code EDRPOU 23072315) have until Nov. 29, 2008, to submit proofs of claim to: The Economic Court of Dnipropetrovsk Kujbishev Str. 1a 49600 Dnipropetrovsk Ukraine The Arbitration Court of Dnipropetrovsk commenced bankruptcy proceedings against the company after finding it insolvent on Oct. 16, 2008. The case is docketed as B 24/327-08. The Debtor can be reached at: LLC Gening Heroes of Stalingrad Str. 122 Dnipropetrovsk Ukraine INTER-BUILDING-INVESTMENT: Creditors Must File Claims by Nov. 29 ---------------------------------------------------------------- Creditors of Subsidiary Company Building Management Inter- Building-Investment (code EDRPOU 33640334) have until Nov. 29, 2008, to submit proofs of claim to: Mr. Oleg Shkliar Liquidator Ap. 12 Shevchenko Str. 16 10002 Zhytomir Ukraine The Arbitration Court of Kiev commenced bankruptcy proceedings against the company after finding it insolvent on Sept. 26, 2008. The case is docketed as 50/245. The Economic Court of Kiev B. Hmelnitskij Boulevard 44-B 01030 Kiev Ukraine The Debtor can be reached at: Subsidiary Company Building Management Inter-Building-Investment Novomostitskaya Str. 25 Kiev Ukraine KATERINOPOL PRODUCTION: Creditors Must File Claims by Nov. 29 ------------------------------------------------------------- Creditors of OJSC Katerinopol Production Enterprise Agricultural Industrial Mechanization (code EDRPOU 03766464) have until Nov. 29, 2008, to submit proofs of claim to: Mr. Vladimir Yatchuk Liquidator/Insolvency Manager Paris Commune Str. 104 Russkaya Poliana Cherkassy Ukraine The Arbitration Court of Cherkassy commenced bankruptcy proceedings against the company after finding it insolvent on Sept. 30, 2008. The case is docketed as 10/4431. The Economic Court of Cherkassy Shevchenko Avenue 307 18005 Cherkassy Ukraine The Debtor can be reached at: OJSC Katerinopol Production Enterprise Agricultural Industrial Mechanization Lenin Str. 55 Katerinopol Cherkassy Ukraine KHAZHYN AGRICULTURAL: Creditors Must File Claims by November 29 --------------------------------------------------------------- Creditors of Khazhyn Agricultural LLC (code EDRPOU 3083991) have until Nov. 29, 2008, to submit proofs of claim to: Mr. Andrew Mamedov Liquidator/Insolvency Manager Ap. 95 L. Tolstoy Str. 16 Zhytomir Ukraine The Arbitration Court of Zhytomir commenced bankruptcy proceedings against the company after finding it insolvent on Sept. 12, 2008. The case is docketed as 7/178B. The Economic Court of Zhytomir Putiatinskiy Square 3/65 10014 Zhytomir Ukraine The Debtor can be reached at: Khazhyn Agricultural LLC Kotovsky Str. 1-a Khazhyn Berdichev Zhytomir Ukraine KORVET LLC: Creditors Must File Claims by November 29 ----------------------------------------------------- Creditors of LLC Korvet (code EDRPOU 31102240) have until Nov. 29, 2008, to submit proofs of claim to: Lutsk united state tax inspection Liquidator Kiyevsky Mayna, 4 Lutsk Volin Ukraine The Arbitration Court of Volin commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed as 8/80-B. The Economic Court of Volin Volia Avenue 54-a 43010 Lutsk Volin Ukraine The Debtor can be reached at: LLC Korvet Makarov Str. 5 43000 Lutsk Ukraine SPECIAL TECHNOLOGY: Creditors Must File Claims by November 29 ------------------------------------------------------------- Creditors of LLC Company Special Technology (code EDRPOU 31737520) have until Nov. 29, 2008, to submit proofs of claim to: Mrs. Alla Shkil Liquidator Gogol Str. 12, Ap. 7 Dnipropetrovsk Ukraine The Arbitration Court of Dnipropetrovsk commenced bankruptcy proceedings against the company after finding it insolvent on Sept. 25, 2008. The case is docketed as B 26/189-08. The Economic Court of Dnipropetrovsk Kujbishev Str. 1a 49600 Dnipropetrovsk Ukraine The Debtor can be reached at: LLC Company Special Technology Lenin Str. 39 49000 Dnipropetrovsk Ukraine TRUBEZH CJSC: Creditors Must File Claims by November 29 ------------------------------------------------------- Creditors of CJSC Trubezh (code EDRPOU 23512300) have until Nov. 29, 2008, to submit proofs of claim to: Mr. Sergey Diachenko Liquidator P.O.B. 149 03055 Kiev Ukraine Tel: 8(050)331-56-82 The Arbitration Court of Kiev commenced bankruptcy proceedings against the company after finding it insolvent on Sept. 12, 2008. The case is docketed as 44/269-b. The Economic Court of Kiev B. Hmelnitskij Boulevard 44-B 01030 Kiev Ukraine The Debtor can be reached at: CJSC Trubezh Leskov Str. 9 Kiev Ukraine TURBOV KAOLIN: Creditors Must File Claims by November 29 -------------------------------------------------------- Creditors of OJSC Turbov Kaolin Plant (code EDRPOU 05474145) have until Nov. 29, 2008, to submit proofs of claim to: Mr. Vladislav Sovetov Temporary Insolvency Manager Ap. 11 K. Marks Str. 59 Illintsy Vinnica Ukraine Tel: 8-096-455-75-53 The Arbitration Court of Vinnica commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed as 5/255-08. The Economic Court of Vinnica Hmelnickiy Str. 7 21036 Vinnica Ukraine The Debtor can be reached at: OJSC Turbov Kaolin Plant Mir Str. 77 Turbov Lipovetsky Vinnica Ukraine =========================== U N I T E D K I N G D O M =========================== BE MOVED: Taps Joint Administrators from PKF -------------------------------------------- Ian J. Gould and Edward T. Kerr of PKF (UK) LLP were appointed joint administrators of Be Moved Ltd. on Oct. 31, 2008. The company can be reached through PKF (UK) LLP at: New Guild House 45 Great Charles Street Queensway Birmingham B3 2LX England Be Moved Ltd. is a non-trading holding company. BRITISH AIRWAYS: Four Executives Appear in Court Over Price-Fixing ------------------------------------------------------------------ Megan Murphy at the Financial Times reports that four past and present British Airways executives appeared before the City of London magistrates' court Wednesday last week over alleged price- fixing. The four who were charged by the Office of Fair Trading with conspiring with rival Virgin Atlantic to inflate passenger fuel surcharges on transatlantic flights between 2004 and 2006 include Andrew Crawley, current head of sales; Martin George, former commercial director and board member; Iain Burns, former head of communications; and Alan Burnett, former head of UK and Ireland, the report discloses. According to the report, they could face up to five years in jail if convicted. However, the report relates, the four men did not enter a plea, and spoke only to confirm their names, ages and addresses at the court. They were released on unconditional bail until January, when they are due to appear at Southwark crown court, the report says. The report notes a full trial is not expected to start for many months. About British Airways Headquartered in Harmondsworth, England, British Airways Plc -- http://www.ba.com/-- operates of international and domestic scheduled and charter air services for the carriage of passengers, freight and mail, and provides of ancillary services. The British Airways group consists of British Airways plc and a number of subsidiary companies including in particular British Airways Holidays Ltd. and British Airways Travel Shops Ltd. BA has offices in India and Guatemala. * * * As reported in the TCR-Europe on Nov. 18, 2008, Moody's Investors Service placed all ratings of British Airways plc (Baa3 Corporate Family Rating - CFR); Ba1 senior unsecured and the Ba2 rating of the perpetual guaranteed preferred securities on review for possible downgrade. BRITISH AIRWAYS: Iberia Eyes Bigger Share of Merger --------------------------------------------------- Alistair Osborne at the Daily Telegraph reports that Iberia Lineas Aereas de Espana SA, which is planning an all-share merger with British Airways plc, has told investors it may take a bigger share of the combined group. Iberia chairman Fernando Conte acknowledged the all-share merger is a complex process as there are still some difficulties, including BA's pension deficit, the report discloses. Mr. Conte, as cited by the report, said "it's crucial that it's well designed to fulfill the expectations of both companies." Mr. Conte, according to the report, noted that while he believes a deal could be done, it will take some more time and will likely have some impact on the relative value of both companies. The report relates Iberia shareholders initially expected to take about one-third of the combined carrier when the planned merger was first disclosed in July, although Caja Madrid, which holds a 23% stake in the Spanish carrier, insisted Iberia investors should get 40%. BA chief executive Willie Walsh however maintained the natural merger ratio is in the 65:35 to 60:40 range. "I haven't changed my view on that � even if the current market caps don't necessarily reflect that," Mr. Walsh was quoted by the report as saying. Citing the Daily Telegraph, the TCR-Europe reported on Nov. 13, 2008, that John Ralfe, an independent pensions consultant, warned it would cost BA at least GBP6 billion to sell its pension liability. The report said the cost of offloading the pension deficit would be several times the market cap of the airline, which is currently valued at about GBP1.6 billion. About British Airways Headquartered in Harmondsworth, England, British Airways Plc -- http://www.ba.com/-- operates of international and domestic scheduled and charter air services for the carriage of passengers, freight and mail, and provides of ancillary services. The British Airways group consists of British Airways plc and a number of subsidiary companies including in particular British Airways Holidays Ltd. and British Airways Travel Shops Ltd. BA has offices in India and Guatemala. * * * As reported in the TCR-Europe on Nov. 18, 2008, Moody's Investors Service placed all ratings of British Airways plc (Baa3 Corporate Family Rating - CFR); Ba1 senior unsecured and the Ba2 rating of the perpetual guaranteed preferred securities on review for possible downgrade. EIRLES TWO: Moody's Withdraws Junk Rating on Series 129 Notes ------------------------------------------------------------- Moody's withdrew the rating of one class of notes issued by Eirles Two Limited. These notes were repurchased in full on the Sept. 19, 2008. Eirles Two Limited: (1) Series 129 US$4,673,478 Variable Interest Limited Recourse Secured Notes due 2035 relating to the Class 2 AV-3 Asset- Backed Certificates, Series 2004-10 of CWABS Asset-Backed Certificates Trust 2004-10 -- Current Rating: WR -- Prior Rating: Caa2, on review for possible downgrade -- Prior Rating Date: January 16, 2008 EYEWEAR HOLDINGS: Names Joint Administrators from Grant Thornton ---------------------------------------------------------------- Leslie Ross and David Michael Riley of Grant Thornton UK LLP were appointed joint administrators of Eyewear (Europe) Holdings Ltd. on Oct. 29, 2008. The company can be reached through Grant Thornton UK LLP at: 4 Hardman Square Spinningfields Manchester M3 3EB England Eyewear (Europe) Holdings Ltd. is a wholesaler of spectacles and sunglasses. HBOS PLC: Could Face Nationalization if Lloyds Takeover Fails ------------------------------------------------------------- HBOS plc is urging its shareholders to vote in favor of its merger with Lloyds TSB, BBC News reports. HBOS warned the bank could face nationalization if shareholders turn down a proposed takeover by Lloyds TSB as it would need significantly more capital, making the loss of private sector status more likely, BBC relates. In a letter to shareholders cited by BBC, HBOS said independence could lead to "the loss of private sector status" -- in effect, nationalization. Reuters discloses the government told HBOS it would need GBP12 billion if it stayed independent, but the bank indicated "there can be no certainty" it would not need more than that or that it would be able to successfully raise capital. HBOS shareholders are scheduled to vote on the GBP12 billion (US$18 billion) takeover by Lloyds TSB on December 12, BBC discloses. Peter Burt, former Bank of Scotland chief executive, and George Mathewson, former Royal Bank of Scotland CEO, attempted to block the HBOS merger with Lloyds TSB, arguing it was no longer necessary and shareholders would be better off if the bank remained independent, the Associated Press recounts. However, HBOS chairman Stevenson maintained the merger was in the bank's best interest, the AP notes. "Being part of the enlarged group should improve confidence in the business, increase its long-term creditworthiness, reduce over time its cost of funding and better position the business for success in the future," Mr. Stevenson was quoted by the AP as saying. Meanwhile, Chris Tryhorn at the Guardian writes Jim Spowart, the financier who tried to broker an alternative bid for HBOS, said Sunday he had given up hope of scuppering the bank's takeover by Lloyds TSB after failing to get political support for his plans. According to the Guardian, Mr. Spowart wants to bring in another bidder in an attempt to save the 40,000 jobs he believes will go after the takeover. Mr. Spowart, the Guardian notes, was reported to have been talking to Bank of China, although he would not discuss the identity of his partners. He criticized the government for failing to investigate an alternative to the Lloyds takeover, the Guardian adds. "What I was trying to do was find an alternative. We have been actually discouraged," The Guardian quoted Mr. Spowart as saying "I've had no contact from the secretary of state for Scotland, nor from MSPs or MPs - doesn't that speak volumes? "I don't think they want to pursue [my] bid. That's my own view. I tried my best but it's time to move on," Mr. Spowart said. About HBOS Plc HBOS Plc (LON: HBOS) is a United-Kingdom based company. It is the holding company of the HBOS Group. It operates through five divisions: Retail, Corporate, Insurance & Investment, International and Treasury & Asset Management. The company's Retail range of products includes personal and business banking products and services to 23 million customer IRONWORKS LTD: Taps Joint Liquidators from PKF ---------------------------------------------- Kerry Bailey and Jonathan Newell of PKF(UK) LLP were appointed joint liquidators of The Ironworks (Oswestry) Ltd. on Oct. 31, 2008, for the creditors' voluntary winding-up proceeding. The company can be reached through PKF(UK) LLP at: Sovereign House Queen Street Manchester M2 5HR England KALMAR STRUCTURED: Moody's Junks Rating on EUR8.3MM Class C Notes ----------------------------------------------------------------- Moody's Investors Service downgraded the ratings of five classes of notes issued by by Kalmar Structured Finance A/S. According to Moody's, the rating action is the result of deterioration in the credit quality of the transaction's reference portfolio, which includes but is not limited to exposure to Washington Mutual Inc., which was seized by federal regulators on September 25, 2008 and subsequently virtually all of its assets were sold to JPMorgan Chase, Fannie Mae and Freddie Mac, which were placed into the conservatorship of the U.S. government on Sept. 8, 2008. Rating actions are: Kalmar Structured Finance A/S: (1) Class A1 EUR4,250,000 Secured Notes III due 2011 -- Current Rating: Baa1 -- Prior Rating: A3 -- Prior Rating Action Date: April 2nd 2008 (2) Class A2 SEK140,000,000 Secured Notes III due 2011 -- Current Rating: Baa1 -- Prior Rating: A3 -- Prior Rating Action Date: April 2nd 2008 (3) Class B1 EUR6,015,000 Secured Notes III due 2011 -- Current Rating: Ba2 -- Prior Rating: Ba1 -- Prior Rating Action Date: April 2nd 2008 (4) Class B2 SEK65,000,000 Secured Notes III due 2011 -- Current Rating: Ba2 -- Prior Rating: Ba1 -- Prior Rating Action Date: April 2nd 2008 (5) Class C EUR8,255,000 Secured Notes III due 2011 -- Current Rating: Caa1 -- Prior Rating: B2 -- Prior Rating Action Date: September 25th 2007 KEN WILSON: Names Joint Liquidators from Tenon Recovery ------------------------------------------------------- Ian William Kings and Steven Philip Ross of Tenon Recovery were appointed joint liquidators of Ken Wilson Associates Ltd. on Oct. 30, 2008, for the creditors' voluntary winding-up proceeding. The company can be reached through Tenon Recovery at: Tenon House Ferryboat Lane Sunderland Tyne and Wear SR5 3JN England LANDSBANKI: Savers to Meet with Guernsey Authorities on Monday -------------------------------------------------------------- Emma Simon at the Daily Telegraph reports that an action group for savers in Landsbanki Guernsey will meet with Guernsey authorities on Monday, November 24. The Landsbanki Guernsey Depositors Action Group will put forward proposals at the meeting which could secure the return of savers' money in full, the report discloses. According to the report, one of the key demands that will be made to the chief minister, Lyndon Trott, is that money owed to the Guernsey bank by the UK-based Heritable Bank �- also owned by the Icelandic parent Landsbanki �- be repaid. The group, the report adds, will also petition British authorities to put pressure on their Icelandic counterparts to return the GBP12 million that it claims were "upstreamed" to the parent company. "We expect that positive news on this would go some way to restoring greater confidence in Guernsey as a place to invest. The group will be asking specifically what the Guernsey government is doing to assist recovery of depositors' monies in its meeting and discussions with other governments," a spokesman for the LGDAG was quoted by the report as saying. As reported in the TCR-Europe on Oct. 21, 2008, the administrators of Landsbanki Guernsey announced a proposal to make a part-payment to depositors equivalent to 30 pence in the GBP1. About Landsbanki Guernsey Ltd. Landsbanki Guernsey Ltd. -- http://www.landsbanki.co.gg/-- is engaged in retail banking. It is a subsidiary of Iceland-based financial institution Landsbanki Islands hf. Lansbanki Guernsey was placed into administration on Oct. 7, 2008. The administration, which follows the deepening problems of the Icelandic economy and, in particular, of the Icelandic banking system, is on a temporary basis until Jan. 6, 2009 or earlier order of the Royal Court. The affairs, business and property of the bank are being managed by the joint administrators, Rick Garrard and Lee Manning of Deloitte, the business advisory firm. LEHMAN BROTHERS: Administration More Complicated than Enron ----------------------------------------------------------- Mathieu Robbins at the Independent reports that accountants at PricewaterhouseCoopers said Friday the administration of the London-based arm of Lehman Brothers will be "at least 10 times" more complicated than the European side of the Enron bankruptcy in 2001. The Independent relates the administrators, led by Tony Lomas, said at a press conference on the Lehman situation the administration process could take several years as there are more than US$1 trillion of positions to unwind, noting only about US$5 billion of asset realizations have been made so far after more than two months. Mr. Lomas added the UK bankruptcy law and the complexity of the trades and inter-relationships between different Lehman businesses make the unwinding more difficult, the Independent discloses. According to Breakingnews.ie, the whole administration process could take as long as seven years and is going to be expensive. Citing the administrators, Breakingnews.ie says it involved working with PwC staff around the world, costing as much as GBP4 million (EUR4.66 million) a week. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com-- is the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Through its team of more than 25,000 employees, Lehman Brothers offers a full array of financial services in equity and fixed income sales, trading and research, investment banking, asset management, private investment management and private equity. Its worldwide headquarters in New York and regional headquarters in London and Tokyo are complemented by a network of offices in North America, Europe, the Middle East, Latin America and the Asia Pacific region. The firm, through predecessor entities, was founded in 1850. Lehman filed for chapter 11 bankruptcy September 15, 2008 (Bankr. S.D.N.Y. Case No.: 08-13555). Lehman's bankruptcy petition listed $639 billion in assets and $613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. The September 15 Chapter 11 filing by Lehman Brothers Holdings, Inc., does not include any of its subsidiaries. Subsidiary LB 745 LLC, submitted a Chapter 11 petition on Sept. 16 (Case No. 08-13600). Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Barclays Bank Plc has agreed, subject to U.S. Court and relevant regulatory approvals, to acquire Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. These are currently the only UK incorporated companies in administration. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. The two units of Lehman Brothers Holdings, Inc., which has filed for bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of New York, have combined liabilities of JPY4 trillion -- US$38 billion). Lehman Brothers Japan Inc. reported about JPY3.4 trillion ($33 billion) in liabilities in its petition. Akio Katsuragi, a former Morgan Stanley executive, runs Lehman's Japan units. Lehman Brothers Asia Limited, Lehman Brothers Securities Asia Limited and Lehman Brothers Futures Asia Limited have suspended its operations with immediate effect, including ceasing to trade on the Hong Kong Securities Exchange and Hong Kong Futures Exchange, until further notice. The Asian units' asset management company, Lehman Brothers Asset Management Limited, will continue to operate on a business as usual basis. A further notice concerning the retail structured products issued by or arranged by any Lehman Brothers group company will be issued as soon as possible, a press statement said. M & S LTD: Names Joint Administrators from Tennon Recovery ---------------------------------------------------------- Jeremy Woodside and Christopher Benjamin Barrett of Tenon Recovery were appointed joint administrators of M & S (Metal Services) Ltd. on Nov. 3, 2008. The company can be reached at: 10 Bolton Street Ramsbottom Bury Lancs BLO 9HX England MAWLAW 526 LTD: Appoints Joint Liquidators from KPMG ---------------------------------------------------- On Oct. 30, 2008, Blair Carnegie Nimmo of KPMG LLP was appointed liquidator for the creditors' voluntary winding-up proceeding of: -- Cityscape Global Media Ltd., -- Demon Ltd., and -- Manweb Generation (Winnington) Ltd. These companies can be reached at: 8 Salisbury Square London EC4Y 8BB England M B JOINERY: Taps Joint Liquidators from Baker Tilly ---------------------------------------------------- Lindsey Cooper and Adrian Allen on Baker Tilly Restructuring and Recovery LLP were appointed joint liquidators of M B Joinery Ltd. on Nov. 3, 2008. The company can be reached through Baker Tilly Restructuring & Recovery LLP at: Brazennose House Lincoln Square Manchester M2 5BL England SPACE 2 LTD: Appoints Joint Administrators from KPMG ---------------------------------------------------- On Nov. 5, 2008, Jonathan Scott Pope and David John Crawshaw of KPMG LLP were appointed joint administrators of: -- Space 2 Ltd., -- Meristem Holdings Ltd., and -- The Furniture Factory Ltd. These companies can be reached at: Meristem House Wells Road Glastonbury Somerset BA6 9AG England XTREME BRAND: Names Joint Liquidators from Tenon Recovery --------------------------------------------------------- Christopher Ratten and Jeremy Woodside of Tenon Recovery were appointed joint liquidators of Xtreme Brand Marketing Group Ltd. on Nov. 5, 2008. The company can be reached at: Grove House 227-233 London Road Hazel Grove Stockport Cheshire England * UK Company Winding Up Petitions Up 13% in Third Quarter 2008 -------------------------------------------------------------- The Ministry of Justice, on Friday, Nov. 14, released company winding up and bankruptcy petition court statistics for the third- quarter of 2008. The Ministry of Justice statistics bulletin presents the numbers of company winding up, and creditors' and debtors' bankruptcy petitions issued in the High Court and county courts of England and Wales for the third quarter of 2008. Findings In the third quarter of 2008 the High Court and county courts of England and Wales issued: * 3,184 company winding up petitions � an increase of 13% on the same quarter of 2007 and a 9% increase on the previous quarter. * 5,499 creditors' petitions � an increase of 10% on the same quarter of 2007 and a 2% decrease on the previous quarter. * 13,653 debtors petitions � an increase of 7% on the same quarter of 2007 and a 1% increase on the previous quarter. * S&P Says UK Buy-To-Let Mortgage to Weaken in Economic Downturn ---------------------------------------------------------------- The U.K. buy-to-let residential mortgage loan sector will soon begin to underperform compared with the overall mortgage market, according to a report published by Standard & Poor's Ratings Services. The credit risk of the sector has been rising on the back of declining property prices, a contraction in the availability of mortgage credit, and growing uncertainty over the wider economic environment. According to surveillance credit analyst Kate Livesey: "While older buy-to-let mortgages outperform similar loans made to prime owner-occupiers, newer buy-to-let mortgages are now underperforming, given looser initial underwriting standards and lower absolute growth in rental coverage since origination." She added that this makes performance of the buy-to-let sector more sensitive to the currently difficult credit environment. The report estimates that just over 50% of buy-to-let loans outstanding are from the worse-performing 2006 and 2007 vintages, and S&P expect that the buy-to-let sector will soon begin to underperform versus the overall mortgage market on aggregate measures. The performance of buy-to-let mortgages has so far seemed resilient, based on certain headline measures. However, if buy- to-let loans are compared with only prime owner-occupied loans, excluding nonconforming loans, their performance looks less favorable. Buy-to-let loans are already showing a proportionally higher level of repossessions than mainstream owner-occupied lending, and the loss borne by lenders on each repossession case may prove higher too. Based on an analysis of around 200,000 securitized buy-to-let loans (approximately 20% of the buy-to-let market), buy-to-let arrears were 3.7% at the end of June, compared with 2.9% of arrears in a sample of prime owner-occupied mortgages. S&P also estimates that around 20%-40% of buy-to-let borrowers could fall into negative equity by mid-2009, based on a peak-to- trough house price decline of around 25%-30%. This compares with 14%-20% for the market as a whole. "We believe that the BTL sector could suffer above-average loss severities on repossession cases due to a concentration of certain property types that are witnessing above-average price declines," said Ms. Livesey. "In a downturn S&P believe that the current stock of buy-to-let loans will carry higher credit risk than the stock of loans to prime owner-occupiers." This is the first of two reports S&P intends to publish on the buy-to-let sector. Whereas this report focuses solely on the fundamentals of buy-to-let mortgage performance, the second report will focus on residential mortgage-backed securities that S&P rates and which are predominantly backed by buy-to-let mortgages. * Moody's Sees Weakening in EMEA Auto Loans Performance in Q3 2008 ------------------------------------------------------------------ The performance of the asset-backed securities auto loans transactions in Europe, Middle East and Africa rated by Moody's weakened further in the third quarter of 2008, says Moody's Investors Service in its latest index report on the sector. Moody's performance indices showed some weakening across major markets. Moody's reports that the 60+ days delinquency trend rose to 1.05% in Q3 2008 from 1.02% in the previous quarter, while the 60-90 days delinquency trend remained comparatively stable at 0.46%. The weighted-average cumulative default trend, in turn, increased to 0.93% in Q3 2008 from 0.70% in Q3 2007. Moody's says the rise was attributable to the impact of loans securitized in 2006, which in the third quarter showed a steeper increase in the default trend than the overall market. Moody's notes that the markets with high delinquency rates �- Portugal, South Africa, and Spain -� also showed high cumulative loss rates. Overall, the cumulative loss trend increased to 0.39% in Q3 2008 from 0.32% in Q3 2007. Moody's took no performance-related rating actions on outstanding EMEA auto loan transactions during the third quarter. "German transactions make up more than half of the rated EMEA loans in Moody's index," observes Yuezhen Wang, a Moody's Senior Associate and co-author of the report. "We also note that a majority of the auto loans (68%) are from captive originators." Moody's expects the economic climate to pressure the EMEA auto loan indices further. "The current cyclical development bodes poorly for unemployment in the short-term," says Nitesh Shah, a Moody's Economist and co-author the report. ********* 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 * * *