/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/081205.mbx T R O U B L E D C O M P A N Y R E P O R T E R E U R O P E Friday, December 5, 2008, Vol. 9, No. 242 Headlines A U S T R I A AT LLC: Claims Registration Period Ends December 23 BACKHAUS FILLAFER: Claims Registration Period Ends December 15 REMARK ENGINEERING: Claims Registration Period Ends December 8 WEMIDIS LLC: Claims Registration Period Ends December 15 G E R M A N Y ARCADIA-BAU GMBH: Claims Registration Period Ends January 2 BACKER ECKER: Claims Registration Period Ends January 5 CAMPA GMBH: Declares Insolvency for the Second Time CLAVISCOM TECHNOLOGY: Claims Registration Period Ends January 2 CORVETT-SPITZEN GMBH: Claims Registration Period Ends January 4 HEIDELBERGCEMENT: Moody's Cuts Corporate Family Rating to 'Ba3' TRIANGEL GMBH: Claims Registration Period Ends January 6 TUI AG: TUI Travel's Pre-Tax Profit Up 43% Following Cost Cuts TUI AG: S&P Downgrades Long-Term Corporate Credit Rating to 'B+' TUSEM HSB: Claims Registration Period Ends January 5 I R E L A N D OMEGA CAPITAL: S&P Withdraws Low-B Ratings on Classes A to J Notes MIDGARD CDO: S&P Lowers Rating on Class A 2005-10 Notes to 'BB' I T A L Y BANCA ITALEASE: Fitch Affirms Individual Rating at 'D/E' CARLO TASSARA: Reaches Debt Deal with Italian Creditor Banks SAFILO SPA: Fitch Cuts Long-Term Issuer Default Rating to 'B' SEAT PAGINE: Begins Talks with RBS; Eyes Capital Increase SEAT PAGINE: Sells German Unit WLW to Bisnode for EUR47.8 Mln TELECOM ITALIA: Cuts More Jobs, Disposes Assets to Trim Debts K Y R G Y Z S T A N ELCAT TRAIDING: Creditors Must File Claims by January 9 INTERUST LLC: Creditors Must File Claims by January 9 KLONDIKE INTERNATIONAL: Creditors Must File Claims by January 9 L A T V I A PAREX BANKA: Fitch Downgrades Issuer Default Ratings to 'RD' N E T H E R L A N D S DUTCH E-MAC: Moody's Reviews Ratings for Possible Downgrade LYCOS EUROPE: To Halt Portal and Web Hosting Activities P O R T U G A L * Moody's Reports Negative Outlook for Portuguese Banking System * S&P Says Portuguese RMBS Delinquency Rates Up in Third Quarter R U S S I A BENTO-KAM OJSC: Creditors Must File Claims by January 28 CONCRETE LLC: Court Names A. Savelyev as Insolvency Manager ELSOKS CJSC: Creditors Must File Claims by January 28 FOREST LLC: Creditors Must File Claims by January 28 INDUSTRIAL ENERGETICS: Under Bankruptcy Procedure IRKUTSK-PAPER LLC: Creditors Must File Claims by January 28 KIRENSKAYA HEATING: Court Names S. Galandinas Insolvency Manager MASH-PROM LLC: Creditors Must File Claims by December 28 MDM BANK: S&P Puts 'BB' Credit Rating on CreditWatch Negative NORD-LES LLC: Creditors Must File Claims by January 28 SITRONICS JSC: Inks US$230 Mln Credit Facility Agreement with VEB TMK OAO: Seeks US$1 Billion Refinancing Aid from VEB TNK-BP: President and CEO Robert Dudley Steps Down TRANS-OIL LLC: Creditors Must File Claims by January 28 URSA BANK: Fitch Puts B+ Long-Term IDR on Watch Positive VIMPELCOM OJSC: Posts US$269MM Net Income in 9-Mos Ended Sept. 30 * OBLAST OF SARATOV: Moody's Puts 'Ba2' Currency Ratings * RUSSIA: May Set Aside RUB300 Billion in Loan Guarantees S W I T Z E R L A N D BEWAL WELLNESS: Creditors Must File Proofs of Claim by Dec. 15 CREDIT SUISSE: Expects CHF3 Billion 4th Qtr Net Loss FERRY HOUSE: Deadline to File Proofs of Claim Set December 17 GRIP TESTCENTER: Creditors Have Until Dec. 14 to File Claims LOGOLINE JSC: Proofs of Claim Filing Deadline is December 14 M & T HEALTH: Creditors' Proofs of Claim Due by December 17 PARKHAUS UND GEWERBECENTER: Deadline to File Claims on Dec. 17 U K R A I N E AFTER REPAIRS: Creditors Must File Claims by December 18 AGRARIY LLC: Creditors Must File Claims by December 18 BUDIVELNYK LLC: Creditors Must File Claims by December 18 CHIGIRIN ENERGY: Creditors Must File Claims by December 18 DRUZHBA LLC: Creditors Must File Claims by December 18 KIRIT-2007 LLC: Creditors Must File Claims by December 17 LOTTO MAYSTER: Creditors Must File Claims by December 17 NETWORK TARGET-PRODUCT: Creditors Must File Claims by Dec. 18 POBEDA LLC: Creditors Must File Claims by December 18 SPHERE LLC: Creditors Must File Claims by December 17 U N I T E D K I N G D O M ALDEN HENDI: Goes Into Administration; 135 Jobs Eliminated BOWIE CASTLEBANK: Goes Into Administration; 817 Jobs Axed DEKANIA EUROPE: Fitch Withdraws 'BB' Expected Rating on Class E EUROSAIL 2006-2BL: S&P Junks Rating on Class F1c Notes FAIRFAX GERRARD: Taps Joint Administrators from Grant Thornton FITZGERALD LIGHTING: Goes Into Administration; KPMG Appointed FLIGHTLINE LTD: Goes Into Administration; 235 Jobs Affected IDS PLASTICS: Names Joint Administrators from Tenon Recovery INEOS GROUP: Improves Loan Waiver Terms to Appease Investors JPMORGAN CHASE: Investors Want to Flee From Highbridge Capital MATRIX ENGINEERED: Goes Into Administration; 70 Jobs at Risk MEAD SCOTLAND: Goes Into Liquidation; Tenon Recovery Appointed MOLWIN DEVELOPMENTS: Taps Joint Administrators from Deloitte NOMURA HOLDINGS: To Layoff 1,000 Workers in London PRIMESHADE LTD: Taps Joint Administrators from Grant Thornton RBRG LTD: Names Joint Administrators from Tenon Recovery REFLEXION CARE: Appoints Joint Liquidators from Grant Thornton SOLARWEB LTD: Names Joint Liquidators from Tenon Recovery WHITE TOWER: Fitch Pares Rating on GBP68-MM Class E Notes to 'BB' WOOLWORTHS GROUP: Still In Talks with BBC Over 2Entertain Stake * UK: House of Commons to Cross-Examine Insolvency Service * Reduced Bilateral Loans to Impact UK Businesses, KPMG Says * PwC Says Bank of England Must Cut Interest Rates to 1.5% X X X X X X X X * Fitch Puts Negative Outlooks to 266 European CMBS Tranches * Fitch Reports Decline in European Commercial Property Values * S&P Says European Auto ABS Indices Delinquency Rates Up in 3Q08 * Big 3 Get UAW's OK on Healthcare Payment Delays & Jobs Bank Cuts * BOOK REVIEW: How To Measure Managerial Performance ********* =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D A U S T R I A =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D AT LLC: Claims Registration Period Ends December 23 --------------------------------------------------- Creditors owed money by LLC AT (FN 273317m) have until Dec. 23, 2008, to file written proofs of claim to the court-appointed estate administrator: Dr. Hans Pucher Wiener Strasse 3 3100 St. Poelten Austria Tel: 02742/35 43 55 Fax: 02742/35 14 35 E-mail: office@gpls.at Creditors and other interested parties are encouraged to attend the creditors' meeting at 9:40 a.m. on Jan. 13, 2009, for the examination of claims at: Land Court of St. Poelten Room 216 St. Poelten Austria Headquartered in St. Poelten, Austria, the Debtor declared bankruptcy on Nov. 10, 2008, (Bankr. Case No. 14 S 182/08t). BACKHAUS FILLAFER: Claims Registration Period Ends December 15 -------------------------------------------------------------- Creditors owed money by LLC Backhaus Fillafer (FN 112765g) have until Dec. 15, 2008, to file written proofs of claim to the court- appointed estate administrator: Dr. Klaus Juergen Karner Widmanngasse 44 9500 Villach Austria Tel: 04242/22 880 Fax: 04242/ 21351 E-mail: office.kjk@aon.at Creditors and other interested parties are encouraged to attend the creditors' meeting at 11:40 a.m. on Dec. 22, 2008, for the examination of claims at: Land Court of Klagenfurt Room 225 Klagenfurt Austria Headquartered in Landskron, Austria, the Debtor declared bankruptcy on Nov. 11, 2008, (Bankr. Case No. 41 S 112/08f). REMARK ENGINEERING: Claims Registration Period Ends December 8 -------------------------------------------------------------- Creditors owed money by LLC ReMarK Engineering (FN 260803i) have until Dec. 8, 2008, to file written proofs of claim to the court- appointed estate administrator: Dr. Andreas Haberl Feldgasse 17 4840 Voecklabruck Austria Tel: 07672/22500 Fax: 07672/22500-20 E-mail: office@h2recht.at Creditors and other interested parties are encouraged to attend the creditors' meeting at 11:40 a.m. on Dec. 18, 2008, for the examination of claims at: Land Court of Wels Hall 101 Wels Austria Headquartered in Timelkam, Austria, the Debtor declared bankruptcy on Nov. 7, 2008, (Bankr. Case No. 20 S 139/08d). WEMIDIS LLC: Claims Registration Period Ends December 15 -------------------------------------------------------- Creditors owed money by LLC Wemidis (FN 142538s) have until Dec. 15, 2008, to file written proofs of claim to the court- appointed estate administrator: Axel Seebacher Bahnhofstrasse 39/EG 9020 Klagenfurt Austria Tel: 0463/31 94 52 Fax: 0463/319452-4 E-mail: seebacher@recht4you.at Creditors and other interested parties are encouraged to attend the creditors' meeting at 11:00 a.m. on Dec. 22, 2008, for the examination of claims at: Land Court of Klagenfurt Room 216 Klagenfurt Austria Headquartered in Klagenfurt, Austria, the Debtor declared bankruptcy on Nov. 13, 2008, (Bankr. Case No. 41 S 113/08b). =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D G E R M A N Y =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D ARCADIA-BAU GMBH: Claims Registration Period Ends January 2 ----------------------------------------------------------- Creditors of Arcadia-Bau GmbH have until Jan. 2, 2009, to register their claims with court-appointed insolvency manager. Creditors and other interested parties are encouraged to attend the meeting at 1:00 p.m. on Jan. 21, 2009, at which time the insolvency manager will present his first report. The meeting of creditors will be held at: The District Court of Essen Meeting Hall 293 Second Floor Zweigertstr. 52 45130 Essen 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. Guenter Trutnau, III Hagen 30 45127 Essen Germany The District Court opened bankruptcy proceedings against the company on Nov. 25, 2008. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: Arcadia-Bau GmbH Attn: Wilhelm Rommeswinkel, Manager Gevelsberger Strasse 17 45549 Sprockhjoevel Germany BACKER ECKER: Claims Registration Period Ends January 5 ------------------------------------------------------- Creditors of Backer Ecker GmbH have until Jan. 5, 2009, 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 Feb. 3, 2009, at which time the insolvency manager will present his first report. The meeting of creditors will be held at: The District Court of Muehldorf a. Inn Hall 112 Innstrasse 1 Muehldorf 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: Martin Schoebe Ainmillerstrasse 11 80801 Muenchen Germany The District Court opened bankruptcy proceedings against the company on Nov. 26, 2008. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: Backer Ecker GmbH Attn: Tatjana Jager, Manager Dorfstrasse 28 84556 Kastl Germany CAMPA GMBH: Declares Insolvency for the Second Time --------------------------------------------------- Campa GmbH has declared insolvency for the second time this year, Michael Hogan at Reuters reports citing a court official. Reuters relates a commercial court in Wuerzburg appointed a new administrator. Campa, Reuters recalls, first declared insolvency in May but resumed production in early June after being bought by a consortium of about 2,000 farmers in the southern state of Bavaria. Reuters recounts Campa suspended biodiesel production earlier this year because of the impact of Germany's taxes on biodiesel and the effect of cheap biodiesel imports from the United States but later resumed production. Based in Ochsenfurt in south Germany, Campa GmbH operates a 150,000 tonne annual capacity plant producing biodiesel from rapeseed oil. CLAVISCOM TECHNOLOGY: Claims Registration Period Ends January 2 --------------------------------------------------------------- Creditors of Claviscom Technology GmbH have until Jan. 2, 2009, to register their claims with court-appointed insolvency manager. Creditors and other interested parties are encouraged to attend the meeting at 9:10 a.m. on Jan. 16, 2009, at which time the insolvency manager will present his first report. The meeting of creditors will be held at: The District Court of Wuppertal Meeting Room A234 Second Floor Isle 2 42103 Wuppertal 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 Fliegner Gruenewalder Str. 29-31 42657 Solingen Germany Tel: 0212 / 24 94 200 Fax: 0212/24 94 201 The District Court opened bankruptcy proceedings against the company on Nov. 27, 2009. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: Claviscom Technology GmbH Gruenewalder str. 29-31 42659 Solingen Germany Attn: Frank Voss, Manager Lerchenstr. 31 42651 Solingen Germany CORVETT-SPITZEN GMBH: Claims Registration Period Ends January 4 --------------------------------------------------------------- Creditors of Corvett-Spitzen GmbH have until Jan. 4, 2009, 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 Feb. 4, 2009, at which time the insolvency manager will present his first report. The meeting of creditors will be held at: The District Court of Detmold Meeting Room 143 Paulinenstrasse 46 32756 Detmold 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. Sven-Holger Undritz Jungfernstieg 51 20354 Hamburg Germany The District Court opened bankruptcy proceedings against the company on Nov. 26, 2008. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: Corvett-Spitzen GmbH Siemensstr. 2 32676 Luegde Germany Attn: Otto Siekmann, Manager Goeslingstr. 15 31812 Bad Pyrmont Germany HEIDELBERGCEMENT: Moody's Cuts Corporate Family Rating to 'Ba3' --------------------------------------------------------------- Moody's Investors Service has downgraded HeidelbergCement's corporate family and debt issuance ratings to Ba3 from Ba1. The outlook on the ratings is negative. The rating action was prompted by further increasing uncertainties related to HeidelbergCement's liquidity situation, which the company has now started to address. Though Moody's believes that the banks should have incentives to remain supportive given the business profile of the company, the agency notes that the number of banks involved in the lending group of HeidelbergCement could make the negotiations challenging. The balance sheet of its major shareholder could further add some complexity to these discussions. Moody's commented, that, given current market conditions and the need to renegotiate its debt, HC may have to rely on additional equity contributions or asset sales to shore up its capital structure, which, due to the reported liquidity issues related to the company's major shareholder itself and the economic slowdown, could be difficult to achieve. Moody's would consider a further downgrade if HC would fail to progress in the restructuring of its bank debt and would therefore be exposed to increasing short-term liquidity risks, given the tight covenants situation notably per mid 2009. Any indication that a timely progress is not achieved in the negotiations would put significant pressure on the rating possibly leading to a downgrade by more than one notch. The rating also takes into account continued uncertainties at the Merckle group, which is also exposed to liquidity and leverage concerns. In addition, Moody's could introduce a notching for HC's bonds according to Moody's LGD methodology should the company's banks successfully strengthen their security package (eg by negotiating the implementation of upstream guarantees from HC's operating subsidiaries, which appear possible), which would put the bondholders in a structurally subordinated position. On the positive side Moody's notes that the strong business profile and market positions of the company should allow the company to very quickly benefit from any economic uptick in the company's major markets, such as the US, the UK or Germany -- most likely coming from the implementation of economic stimulus packages in the respective countries. The outlook could be stabilized if HC successfully restructures its bank debt, removing the short term threat of a breach in covenants. Moody's last rating action on HeidelbergCement was to put the Ba1 ratings on review for possible downgrade on Nov. 19, 2008. Rating actions: Issuer: HeidelbergCement AG -- Probability of Default Rating, downgraded to Ba3 from Ba1 -- Corporate Family Rating, downgraded to Ba3 from Ba1 -- Senior Unsecured Medium-Term Note Program, downgraded to Ba3 from Ba1 Issuer: HeidelbergCement Finance B.V. -- Senior Unsecured Medium-Term Note Program, downgraded to Ba3 from Ba1 -- Senior Unsecured Regbular Bond/Debenture, downgraded to Ba3 from Ba1; assignment of LGD4, 53% Issuer: Hanson Australia Funding Limited -- Senior Unsecured Regular Bond/Debenture, downgraded to Ba3 from Ba1; assignment of LGD4, 53% Issuer: Hanson Building Materials Limited -- Senior Unsecured Regular Bond/Debenture, downgraded to Ba3 from Ba1; assignment of LGD4, 53% Outlook Actions: Issuers: HeidelbergCement AG, HeidelbergCement Finance B.V., Hanson Australia Funding Limited, Hanson Building Materials Limited, Hanson Limited -- Outlook, changed to negative from rating under review HeidelbergCement AG is the world's third-largest cement producer. HC generated sales of EUR12.9 billion per last 12 months (June 2008). With the acquisition of UK building materials producer Hanson plc in mid-2007, HC is now the world's largest producer of aggregates with an annual output in 2007 of 334 mt, and the second-largest producer of ready-mixed concrete with an output of 46 million cubic meters, behind Cemex. TRIANGEL GMBH: Claims Registration Period Ends January 6 -------------------------------------------------------- Creditors of Triangel GmbH have until Jan. 6, 2009, to register their claims with court-appointed insolvency manager. Creditors and other interested parties are encouraged to attend the meeting at 11:00 a.m. on Feb. 17, 2009, 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: Dr. Nikolaus Schmidt Loschwitzer Strasse 32 01309 Dresden Germany The District Court opened bankruptcy proceedings against the company on Nov. 26, 2008. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: Triangel GmbH Attn: Mark Wolf, Manager Arnoldstrasse 16 01307 Dresden Germany TUI AG: TUI Travel's Pre-Tax Profit Up 43% Following Cost Cuts -------------------------------------------------------------- BBC News reported TUI Travel's full-year pre-tax profit increased 43% to GBP319.7 million (US$489.5 million) as a result of cost cuts. TUI Travel, which was created last year through the merger of Germany's TUI AG and Britain's First Choice, noted its profit margins improved after it cut loss-making flights and sold fewer holidays at higher prices, the report relates. The group, the report adds, plans to carry out further post-merger cost-cutting measures worth EUR175 million (GBP146 million), 16% more than its previous target. About TUI Headquartered in Hanover, Germany, TUI AG -- http://www.tui-group.com/-- engages in the tourism and shipping sectors. The Company's core activities are in the tourism business, focusing mainly on the markets of Central, Northern and Western Europe. TUI AG's shipping and logistics activities are contained within its Hapag-Lloyd Container Linie GmbH and CP Ships Ltd. Subsidiaries. * * * As reported in the TCR-Europe on Oct. 24, 2008, Standard & Poor's Ratings Services said that its 'BB-' long-term corporate credit ratings and all issue ratings on Germany-based tourism and shipping group TUI AG remain on CreditWatch with negative implications, where they were originally placed on March 19, 2008. As reported in the TCR-Europe on Oct. 15, 2008, Moody's Investors Service placed the B1 Corporate Family Rating and the B3 senior unsecured and subordinated ratings of TUI AG on review for possible downgrade. TUI AG: S&P Downgrades Long-Term Corporate Credit Rating to 'B+' ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered to 'B+' from 'BB-' its long-term corporate credit rating on German tourism group TUI AG. S&P also lowered the senior unsecured debt ratings to 'B' from 'B+'. The recovery ratings on the senior unsecured debt remain unchanged at '5', indicating S&P's expectation of modest (10%-30%) recovery in a payment default. S&P also lowered the junior subordinated debt rating to 'CCC+' from 'B-'. The recovery rating on the subordinated debt remains unchanged at '6', indicating S&P's expectation of negligible (0%-10%) recovery in a payment default. At the same time, S&P removed all the ratings from CreditWatch, where they were placed with negative implications on March 19, 2008. The outlook is stable. The one-notch downgrade reflects TUI's highly leveraged financial profile, the group's reduced business diversification following the agreed sale of container shipping unit Hapag-Lloyd AG, concerns about the cyclical prospects for TUI's tourism businesses in the light of increasing recessionary pressures in Europe, and some remaining uncertainties about the use of proceeds from the HL sale. The HL transaction, which is expected to close in January 2009, involves the sale of 100% of HL to a new vehicle for an enterprise value of EUR4.45 billion. The purchasing entity is 66.6%-owned by the Hamburg-based Albert Ballin KG consortium, with TUI taking a 33.3% stake in the new vehicle for EUR700 million. On closing of the transaction, TUI will receive net cash proceeds of EUR2.0 billion, and at the same time dispose of EUR1.3 billion of HL debt and leased assets with a capitalized net present value of about EUR1.6 billion. On completion of the transaction, TUI's remaining principal interests will be 40.3% (51.4% of voting rights) of London-listed TUI Travel PLC, its hotels and resorts division; a small cruise business; and a 33.3% equity stake in the new vehicle controlling HL. S&P anticipate that some of the proceeds from the HL sale will be dedicated to debt reduction, with the rest expected to be reinvested in tourism-related assets. The sale of HL will reduce TUI's overall capital intensity, but the group's overall business risk profile will likely weaken as a result of greater reliance on its relatively low-margin tourism businesses. Although tourism is expected to benefit from synergies arising from the 2007 merger with First Choice Holidays PLC, even a market leader like TUI is expected to come under some pressure as a result of the squeeze on discretionary consumer spending affecting many of the group's major markets. The ratings on TUI reflect the group's complex structure, highly leveraged financial risk profile (with a lease-adjusted net debt to EBITDA ratio of 6.6x at Sept. 30, 2008), cash flow leakage to minorities, and exposure to a seasonal and cyclical industry facing margin pressures and high event risks. These risks are mitigated in part by TUI's market-leading positions in European tourism, as well as its geographically well-diversified sales. TUI's liquidity is adequate for the ratings and in the short term will be strengthened significantly by the receipt of proceeds from the HL disposal. Short-term debt maturities and cash balances fluctuate over the year due to the seasonality of the underlying core businesses. Liquidity needs related to the tourism business have shifted to TTP from the parent company, but are partly funded by TUI. Relatively high capital expenditure and negative free operating cash flow constrain liquidity. At the seasonal peak of the group's cash cycle on Sept. 30, 2008, short-term financial liabilities of EUR868 million were balanced by a cash position of EUR2.8 billion (of which EUR1.26 billion was at the TUI level) and about EUR200 million of undrawn committed AG bank lines, with further undrawn lines available under TTP's revolving credit facility. The cash position will shrink somewhat by year-end as a function of the normal seasonal working capital cycle in the tourism business. There are some significant short-term debt maturities, including a EUR400 million floating-rate note issue due in August 2009, and about EUR183 million of private placements due by end-2009. Based on existing cash resources and prospective asset sales, TUI is expected to be in a position to repay these short-term maturities without requiring additional financing. The EUR400 million floating-rate notes due 2009, EUR625 million senior unsecured notes maturing in 2011, EUR550 million floating- rate notes due 2010, EUR694 million convertible notes due 2012, and EUR450 million senior bonds maturing in 2012 issued by TUI are rated 'B', one notch lower than the corporate credit rating. This debt has a recovery rating of '5', indicating S&P's expectation of modest (10%-30%) recovery in a payment default. The issue rating on the EUR300 million perpetual notes issued by TUI is 'CCC+', three notches lower than the CCR. These debt issues have a recovery rating of '6', indicating S&P's expectation of negligible (0%-10%) recovery in a payment default. The further notch-down compared with the standard scale is due to the deferability of the perpetual notes. S&P has valued the company on a going-concern basis, given its leading market position in the tourism business. S&P's assumptions about group valuation and the debt amount at default could change depending on TUI's use of the sale proceeds from the shipping assets. S&P's current valuation is based on the assumption that the group would likely reinvest a proportion of the proceeds from the sale of the shipping division in tourism-related assets. S&P will review the assumptions behind its recovery analysis once the sale of HL has been completed and there is greater certainty regarding use of proceeds. The stable outlook reflects the likelihood that deleveraging following the sale of HL should enable TUI to achieve credit metrics consistent with a 'B+' long-term CCR during fiscal 2009, despite the increasing recessionary challenges to the operating performance of its tourism and hotel businesses, provided crucially that it exercises discipline in reinvestments and shareholder returns. With the group required to reinvest the proceeds from the HL sale or pay down debt within 360 days of the sale, S&P currently expect a combination of both strategies to be employed. Reinvestment is likely to be focused on tourism-related assets. Any derogation from the expected deleveraging path (whether by way of material shareholder returns or outsized acquisitions) could trigger a further negative rating action. To retain the 'B+' rating, S&P expects TUI to reduce leverage from the September 2008 level of lease-adjusted net debt to EBITDA of 6.6x, to a ratio of about 5.0x by December 2009. Short-term upgrade potential is considered limited in view of the structural uncertainties and economic backdrop. TUSEM HSB: Claims Registration Period Ends January 5 ---------------------------------------------------- Creditors of Tusem HSB GmbH have until Jan. 5, 2009, 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. 26, 2009, at which time the insolvency manager will present his first report. The meeting of creditors will be held at: The District Court of Essen Meeting Hall 293 Second Floor Zweigertstr. 52 45130 Essen 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. Jens M. Schmittmann Zweigertstrasse 28-30 45130 Essen Germany The District Court opened bankruptcy proceedings against the company on Nov. 27, 2008. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: Tusem HSB GmbH Attn: Dr. Niels Ellwanger, Michael Keusgen and Thomas Vomfell, Managers Steile Str. 50 45149 Essen Germany =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D I R E L A N D =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D OMEGA CAPITAL: S&P Withdraws Low-B Ratings on Classes A to J Notes ------------------------------------------------------------------ Standard & Poor's Ratings Services withdrew its credit ratings on the class A to J notes series 36 issued by Omega Capital Investments PLC. The rating withdrawal is due to an early redemption. At the time of the redemption the class I, H, and J notes were on CreditWatch negative. Ratings List Rating Withdrawn Omega Capital Investments PLC CHF21 Million, EUR26 Million, and US$16 Million Secured Floating-Rate Notes Series 36 Rating ------ Class To From ----- -- ---- A NR BB B NR BB D NR BB E NR BB- F NR BB- G NR BB- H NR B+/Watch Neg I NR B+/Watch Neg J NR B+/Watch Neg NR =97 Not rated. MIDGARD CDO: S&P Lowers Rating on Class A 2005-10 Notes to 'BB' --------------------------------------------------------------- Standard & Poor's Ratings Services reinstated its credit rating on the class A credit-linked notes series 2005-10 issued by Midgard CDO PLC. At the same time, S&P lowered the rating and removed it from CreditWatch negative. On November 18, S&P withdrew its rating on these notes in error based on S&P's understanding that the class A notes had been redeemed. S&P subsequently became aware that only the class AA notes had been redeemed. The reinstated ratings are lower than the ratings before their withdrawal due to negative rating migration in the underlying reference portfolio. This negative asset performance has led to an increase in the scenario loss rate for the notes, such that available credit enhancement no longer supports the prior ratings. Ratings List Ratings Reinstated And Lowered Midgard CDO PLC US$30 Million Embla Floating-Rate Credit-Linked Notes Series 2005-10 Ratings ------- To From -- ---- Class A Reinstated A/Watch Neg NR Lowered BB A/Watch Neg =3D=3D=3D=3D=3D=3D=3D=3D=3D I T A L Y =3D=3D=3D=3D=3D=3D=3D=3D=3D BANCA ITALEASE: Fitch Affirms Individual Rating at 'D/E' -------------------------------------------------------- Fitch Ratings is keeping Banca Italease's Long-term Issuer Default rating of 'BBB-', Short-term IDR of 'F3' and Support rating of '2' on Rating Watch Negative, where they were placed on 5 March 2008. The Individual rating is affirmed at 'D/E'. The Long-term 'BB' rating of the bank's EUR150 million trust preferred securities also remains on RWN. On Nov. 30, 2008, Italease announced that the planned joint venture with German leasing company VR-LEASING AG (VRL; rated 'A'/Stable) was not proceeding as VRL had withdrawn from the letter of intent, which had been signed on October 10. At the same time, the member banks of Italease's shareholders' pact, Banco Popolare ('A'/Negative), Banca Popolare dell'Emilia Romagna ('A-' (A minus)/Stable), Banca Popolare di Sondrio ('A'/Stable) and Banca Popolare di Milano ('A'/Stable), announced that they had made additional credit lines of EUR2bn available to Italease for 2009. VRL's withdrawal from the joint venture means that Italease will retain all its leasing and factoring business. Based on end-March 2008 volumes, about EUR10bn of assets were to be transferred to the joint venture, as well as about EUR9.7 billion in debt. Fitch does not expect a significant impact on the funding of Italease's existing business because the abandoned project had always envisaged that the assets transferred to the joint venture would be financed with existing funding. Growth in new business is likely to be negatively affected by the abandonment of the planned joint venture, as Italease will have to fund this business. Although Italease depends on wholesale funding, its liquidity is underpinned by support from its shareholders, which at end- September 2008 provided EUR5.1 billion inter-bank funding, EUR3.2 billion of which was from Banco Popolare. In addition, Italease has undertaken securitisation transactions, where the asset-backed securities are eligible for refinancing operations with the European Central Bank. The bank announced on 30 November that under the bank's cash flow expectations and in the absence of new lending, excluding the additional EUR2 billion lines made available by the shareholder banks for 2009, Italease was targeting to achieve net positive liquidity of EUR500 million for end-2009. Fitch notes that Italease's current Long-term IDR of 'BBB-' is underpinned by the ongoing support provided by the shareholders, in particular Banco Popolare. Should support decrease, Italease's Long-term IDR would be several notches below its current level. The agency expects to resolve the RWN once details on the future strategy of the bank have been made public, most likely in Q109. In resolving the RWN, Fitch will evaluate the bank's strategy for its future core leasing and factoring business, and the plans for the management of problematic assets, which include the bank's sizable portfolio of big ticket real estate leases. Key rating drivers are likely to include the bank's funding plan, its expected profitability, plans for the management of the portfolio of problem leases, including the large real estate leases, and the ability of its shareholders to provide further support to Italease. Italease's ratings could come under pressure before the publication of its strategic plan if the shareholders reduce their commitment to the bank, which Fitch does currently not expect, or if their ability to support Italease decreases. The announcement has no impact on VRL's ratings, which are affirmed at Long-term IDR 'A' Stable Outlook, Short-term IDR 'F1', Individual 'C' and Support '1'. CARLO TASSARA: Reaches Debt Deal with Italian Creditor Banks ------------------------------------------------------------ Ian Simpson and Giancarlo Navach at Reuters report that Carlo Tassara SpA, the holding company of financier Romain Zaleski, reached a deal with some banks over debts which include EUR1.3 billion (US$1.64 billion) owed Royal Bank of Scotland and BNP Paribas . According to Reuters, Carlo Tassara and some of its Italian creditor banks agreed on a term sheet that calls for debt reduction over 12 months once a definitive accord is signed. Intesa Sanpaolo, Reuters recounts, signed the term sheet. Based on the terms, it will not extend new credit lines or suffer any economic impact, Reuters recalls. Carlo Tassara, Reuters relates, will use its own resources to pay the amount it owed to Royal Bank of Scotland and BNP Paribas within their deadlines -- the latest of which is March 2009. Reuters discloses once the definitive agreement is signed, a six- member executive board will be named and at least three members will be appointed with a view to getting the most value out of Carlo Tassara's listed holdings and to reducing debt. Carlo Tassara, Reuters recounts, has been in talks for weeks with banks that include Italy's two biggest, Intesa Sanpaolo SpA and UniCredit SpA, over refinancing debt of about EUR5.4 billion. The debts, Reuters notes, were guaranteed by Mr. Zaleski's holdings among Italian power and financial stocks, including 5 percent of Intesa Sanpaolo, but those have lost value as stock markets have slid. Carlo Tassara, Reuters adds, plans to launch EUR200 million euro capital increase once a final accord is reached. In a Nov. 27 report, Reuters citing newspaper reports, stated the capital increase was a precondition for banks to agree to a refinancing of Carlo Tassara's debt. SAFILO SPA: Fitch Cuts Long-Term Issuer Default Rating to 'B' ------------------------------------------------------------- Fitch Ratings has downgraded the Long-term Issuer Default rating of Italy-based eyewear designer and manufacturer Safilo S.p.A. to 'B' from 'BB-'(BB minus). At the same time, Fitch has also downgraded Safilo's EUR400 million senior credit facilities to 'BB-'(BB minus) from 'BB+' and assigned a Recovery Rating of 'RR2', and Safilo Capital International S.A.'s EUR195 million senior notes due 2013 to 'B-'(B minus) from 'BB-' (BB minus), and assigned a Recovery Rating of 'RR5'. Safilo's Short-term IDR was affirmed at 'B' while the Outlook on the Long-term IDR remains Negative. "The downgrade of the Long-term IDR to 'B' reflects the much sharper than expected deterioration in Safilo's results at Q308, together with Fitch's expectation that there will be further pressure on EBITDA and cashflows as the global recession intensifies through 2009," says Michelle De Angelis, a Senior Director in Fitch's Leveraged Finance team. "The expected severity of the recession exceeds prior estimates, and this will in turn exacerbate Safilo's liquidity situation, which is also the reason the Outlook remains Negative." At the time of the last rating action during August 2008, Fitch anticipated a global slowdown would put pressure on Safilo's rating and liquidity position, but the subsequent intensification of the global financial crisis has resulted in significant downward revisions to Fitch's global economic growth outlook. The agency now anticipates a severe recession in the world economy. Consequently Fitch's outlook for Safilo's performance over 2009 and 2010 has also become more negative. Discretionary spending on designer eyewear is expected to contract sharply as consumers spend less on such items, or, as Fitch anticipates could become increasingly likely in 2009, postpone spending altogether for another year or more. EBITDA in Q308 contracted by 44% year-on-year and the trailing twelve month EBITDA has declined by 16% to EUR147 million since YE07. As a result of this decline, together with further debt drawings, Fitch calculates that net debt to EBITDA increased to 3.9x on a LTM basis at Q308, and lease-adjusted net leverage reached 4.5x, up sharply from 3.4x and 4.0x respectively at Q208 and 3.0x and 3.5x respectively at YE07. Fitch anticipates higher net leverage in 2009, mainly as a result of still lower EBITDA and potentially only minimal reduction in debt levels. Available committed liquidity has already decreased to EUR45 million at Q308 from EUR66 million at Q208 and EUR110 million at YE07. Continued availability under the committed Revolving Credit Facility is dependent, among other things, on Safilo meeting two financial covenants at six-monthly intervals, of which one, a net debt to EBITDA (leverage) covenant originally set at 3.5x, had looked likely to be in breach during December 2008. The company has agreed an amendment with its lenders for the December 2008 testing date only, now set at 4.85x (compared to actual net leverage of 3.9x at Q308). The testing dates for 2009 have not been amended, and the company plans to address this with its senior lenders as soon as its 2009 budget has been approved, although there can be no guarantee that its lenders will agree to potential amendments. The senior term facilities continue to amortize, and although in the past the company has used other sources of funding (generally short term, uncommitted sources) to fund these repayments, the agency has already highlighted the risk of pursuing such a strategy in the current credit environment. The agency will consider favorably efforts by the company to conserve cash and reduce its overall amount of debt, and to reduce dependency on uncommitted funding, and such actions, combined with better than expected revenue and EBITDA performance in 2009 could result in the rating outlook being revised to Stable. SEAT PAGINE: Begins Talks with RBS; Eyes Capital Increase --------------------------------------------------------- In a press statement on Monday Seat Pagine Gialle S.p.A. said that discussions have been initiated with the Royal Bank of Scotland aiming at enhancing the financial flexibility of the company under its existing senior facility agreement. Seat expects to be able to inform about the outcomes of this process by the end of December. Danilo Masoni and Stefano Rebaudo at Reuters report Seat is trying to renegotiate its EUR1.3 billion (US$3.88 billion) debt. At the end of September, Seat, Reuters discloses, owed nearly EUR1.571 billion to RBS. Seat, Reuters adds, is also believed to be considering a EUR250 million capital increase, which according to most analysts was the most likely option for Seat to raise fresh resources in current market conditions. However, analysts indicated that while rights issue of EUR250 million would give the company temporary relief, it would not solve its balance sheet problems, Reuters notes. Reuters relates a financial source said a capital increase was still a hypothesis and added that if launched, it would be with the aim of renegotiating debt covenants until 2010. The company would probably need to rediscuss with banks its entire debt in 2011, the source added. About Seat Pagine Gialle Headquartered in Turin, Italy, Seat Pagine Gialle S.p.A. -- http://www.seat.it/-- provides a multimedia platform for assisting in the development of business contacts between users and advertisers. * * * As reported in the TCR-Europe on Dec. 4, 2008, Fitch Ratings downgraded Seat Pagine Gialle S.p.A.'s Long-Term Issuer Default Rating to 'B+' from 'BB-'. Seat's Outlook remains Negative. SEAT PAGINE: Sells German Unit WLW to Bisnode for EUR47.8 Mln ------------------------------------------------------------- Seat Pagine Gialle has reached an agreement to dispose of 100 per cent of the shares of its German subsidiary Wer liefert was? (WLW) to the Swedish firm Bisnode for a total consideration of EUR47.8 million, of which EUR40 million in terms of Enterprise Value and EUR7.8 million in exchange for the adjusted net financial position as of September 30. The disposal is the result of a competitive bid process and the transaction will imply a capital loss of approximately EUR75 million. WLW, a company providing online advertising services to German small and mid-sized manufacturing companies, was acquired in 2007 to strengthen Seat's position in Germany and to develop revenue synergies with the existing B2B Seat subsidiary Europages. "The worsening of the German macroeconomic scenario has significantly reduced the potential for such synergies, a key rational for the acquisition," Luca Majocchi, CEO of Seat Pagine Gialle, stated. "The disposal of WLW is consistent with Seat decision to focus on the Italian business and with the strategic review of the international assets of Seat." About Seat Pagine Gialle Headquartered in Turin, Italy, Seat Pagine Gialle S.p.A. -- http://www.seat.it/-- provides a multimedia platform for assisting in the development of business contacts between users and advertisers. * * * As reported in the TCR-Europe on Dec. 4, 2008, Fitch Ratings downgraded Seat Pagine Gialle S.p.A.'s Long-Term Issuer Default Rating to 'B+' from 'BB-'. Seat's Outlook remains Negative. TELECOM ITALIA: Cuts More Jobs, Disposes Assets to Trim Debts ------------------------------------------------------------- Telecom Italia SpA will cut an additional 4,000 jobs and dispose of noncore assets valued at as much as EUR3 billion (US$3.8 billion) to reduce debt and trim costs, The Wall Street Journal reports. According to the report, the 4,000 job cuts come on top of the 5,000 the company announced in June. Together, the moves will reduce Telecom Italia's work force by 14% to 55,000 from 64,000, the report says. With its net debt totaling EUR35.77 billion as of Sept. 30, Telecom Italia pledged to reduce its ratio of debt to earnings before interest, taxes, depreciation and amortization to 2.9 times by the end of next year, and to 2.3 times by the end of 2011, from about three times at the end of 2008, the report relates. The report discloses as Telecom Italia aims to maintain focus on its core markets Italy and Brazil, Chief Executive Franco Bernabe said, in a presentation to analysts in London, German broadband unit HanseNet is among the assets earmarked for a possible sale. Analysts value HanseNet at between EUR1 billion and EUR1.4 billion, according to the Journal. The report states Telecom Italia said it has received expressions of interests in some of its assets, but it was too early to talk about prices. Headquartered in Milan, Italy, Telecom Italia S.p.A. (NYSE:TI) -- http://www.telecomitalia.it/-- is a telecommunications group that operates in the communications sector, in the television sector using both analog and digital terrestrial technology, and in the office products sector. The company is engaged principally in the communications sector and, particularly, in telephone and data services on fixed lines, for final retail customers and wholesale providers, in the development of fiber optic networks for wholesale customers, in Internet services, in domestic and international mobile telecommunications (especially in Brazil), in the television sector using both analog and digital terrestrial technology and in the office products sector. The company operates mainly in Europe, the Mediterranean Basin and in South America. In August 2008, ILIAD SA announced that it had finalized the acquisition of Alice France, the broadband operations of the company. =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D K Y R G Y Z S T A N =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D ELCAT TRAIDING: Creditors Must File Claims by January 9 ------------------------------------------------------- LLC Elcat Traiding has declared insolvency. Creditors have until Jan. 9, 2009, to submit written proofs of claims to: The company can be reached at: (0-517) 77-61-78 INTERUST LLC: Creditors Must File Claims by January 9 ----------------------------------------------------- LLC Interust has declared insolvency. Creditors have until Jan. 9, 2009, to submit written proofs of claims to: The company can be reached at: (+996 312) 44-73-39 (0-543) 89-34-66 KLONDIKE INTERNATIONAL: Creditors Must File Claims by January 9 --------------------------------------------------------------- LLC Klondike International has declared insolvency. Creditors have until Jan. 9, 2009, to submit written proofs of claims to: LLC Klondike International Molodaya Gvardiya Ave. 2a-46 Bishkek Kazakhstan Tel: (+996 312) 65-46-49 =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D L A T V I A =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D PAREX BANKA: Fitch Downgrades Issuer Default Ratings to 'RD' ------------------------------------------------------------ Fitch Ratings has downgraded Latvia-based Parex Banka's Long-term Issuer Default Rating to 'RD' from 'BB', Short-term IDR to 'RD' from 'B', and Support rating to '5' from '3'. Parex's Support Rating Floor has been changed to 'No Floor' from 'BB' and Individual rating has been affirmed at 'F'. In addition, Fitch has downgraded the senior unsecured ratings to 'CC' from 'BB' and assigned Recovery Rating 'RR4'. Fitch has removed Long-term IDR and senior unsecured ratings from Rating Watch Negative. Fitch has also placed various Latvian banks' ratings on RWN: Norvik Banka: -- Long-term IDR 'B+', -- Short-term IDR 'B' Latvijas Krajbanka: -- Long-term IDR 'B+' -- Short-term IDR 'B' -- Support '4' Hansabanka: -- Support Rating '1' SEB Banka: -- Support Rating '1' The rating action follows the decision by the Latvian government and the Financial and Capital Market Commission on Dec. 1, 2008 to set restrictions on the fulfillment of the obligations by Parex. This decision restricts the deposit withdrawals by certain parties. While the measures have been taken to stabilize the deposit outflow from Parex, Fitch views this as a restrictive default in case of Parex and points to the potential wider negative implications for the whole Latvian banking system. In Fitch's view, this may negatively affect depositor confidence, especially non-resident depositors, increasing the risk of a deposit freeze on the whole Latvian banking system. Given these risks Fitch has placed the ratings on the other banks on RWN. Future rating actions relating to Parex will depend on the lifting of the deposit withdrawal restrictions, reaching an agreement with the syndicated loan providers for Parex, finalization of the support packages from the IMF and the EU for Latvia, and finally the stabilization of the current environment. The resolution of the RWN on the other banks will also depend on how various events unfold. Parex was nationalized (51% of total shares) on Nov. 8, 2008 after the bank's application for support from the government as a result of resident and non-resident deposit withdrawals. The government provided liquidity of LVL200 million and a guarantee on refinancing of EUR775 million of syndication loans that are coming due in 2009 (EUR275 million in February 2009 and EUR500 million in June 2009). Notwithstanding received liquidity support from the government and refinancing guarantees for its maturing syndications, the situation has remained very fluid and the resident and non-resident deposit outflow has not stopped. It was announced that the previous owners, Valery Kargin and Viktor Krasovitsky, who held 85% of the bank, have been forced to sell their remaining 34% of shares to Mortgage and Land Bank. Parex was the second-largest bank by assets in Latvia at the end of third-quarter 2008. It is a universal bank offering a full range of banking products directly and through specialized subsidiaries. Norvik Banka was the 12th-largest bank by assets in Latvia at end- H108. Straumborg, a family-owned Icelandic investment company, became the majority shareholder in January 2006. The two previous majority owners (now with stakes of about 20% each) remain active in the bank's management. Norvik Banka, historically a non- resident business bank has become increasingly focused on its domestic business. Krajbanka was the 11th-largest bank by assets in Latvia at end- H108. In September 2005, a majority stake in Krajbanka was acquired by the Lithuanian bank Bankas Snoras (Snoras, rated 'BB-'; Negative Outlook). Vladimir Antonov directly owns a 68.65% stake in Snoras. Krajbanka and Snoras share risk management policies. It is a universal bank serving mainly SMEs and individuals. Hansabanka was the largest bank by assets in Latvia at end-H108 with around 22% market share. It is 99.7% owned by Swedbank (rated 'A+'; Negative Outlook). SEB Banka was the third largest bank by assets in Latvia at end- H108 with around 13.5% market share. It is fully owned by Skandinaviska Enskilda Banken (SEB, rated 'A+'; Stable Outlook). =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D N E T H E R L A N D S =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D DUTCH E-MAC: Moody's Reviews Ratings for Possible Downgrade ----------------------------------------------------------- Moody's Investors Service placed on review for possible downgrade all non-NHG Dutch E-MAC transactions issued prior to April 2008. The ratings of the four Dutch E-MAC NHG transactions have been on review since July 10, 2008. The rating action was prompted by the exposure of the affected transactions to a potential default to fulfill some of its obligations by ResCap, which ultimately owns the entities performing the cash management functions in these transactions. ResCap's credit worthiness has continued to deteriorate and its unsecured senior debt rating was downgraded to C with stable outlook on Nov. 29, 2008. Yet, at this stage, in all the transactions being put on review, no back-up agreement has been put in place for the role of issuer administrator, which performs the tasks generally associated with those of a cash manager. For the E-MAC NL series of transactions and the series of notes issued out of the E-MAC Program prior to April 2008, GMAC RFC Nederland B.V. is the appointed servicer and issuer administrator. GMAC RFC Nederland B.V. was incorporated in the Netherlands in 2000 and is an indirect wholly-owned subsidiary of ResCap. Stater Nederland B.V. and Quion Groep B.V. (SQ2) are the delegated day- to-day servicers of the mortgage loans according to the different origination channels. Both Stater and Quion have committed to assume the role of primary servicer in case the appointment of GMAC RFC Nederland B.V. is terminated. However, no back-up issuer administrator was appointed at closing for these transactions. In a press release dated 30 May 2008 on the impact of ResCap's downgrade on EMEA RMBS, Moody's stated that it had been informed that GMAC RFC Nederland B.V. was in the process of putting in place a back-up issuer administrator for all the transactions of the E-MAC NL series, and for the series of notes issued in 2006, 2007 and the first series issued in 2008 out of the E-MAC Program. GMAC has recently indicated its intention to complete this process shortly. To date, however, no such back- up issuer administrator has been put in place for these transactions. The inability of an issuer administrator to fulfill its obligations could result in consequences ranging from untimely payments on the notes, to credit losses for noteholders that could result from the unwinding of interest rate or currency exchange hedges following termination events prompted by missed payments. Moody's notes that in the most recent two transactions issued in 2008 by the E-MAC Program, ATC Financial Services B.V. is the appointed third party issuer administrator performing most of the cash management functions, although GMAC still performs administrative activities at the program's level. Despite their residual exposure to GMAC, the ratings of these transactions have not been put on review at this stage due to the limited scope of GMAC's role. Moody's will continue to closely monitor all these transactions and expects to promptly resolve its rating review. The review will focus on the risks of disruptions in transaction payments due to the potential inability of the issuer administrator to fulfill its role. Failure to shortly put in place back-up issuer administrator agreements should result in the downgrade of the ratings on review. The magnitude of the downgrades would depend on the severity of losses that would be expected to result from a disruption of payments, taking into account the risk of hedge arrangements falling apart. Complete List of Rating Actions Issuer: E-MAC NL 2002-I B.V. -- Class A, Mortgage Backed Floating Rate Notes, current rating: Aaa, on review for possible downgrade. -- Class B, Mortgage Backed Floating Rate Notes, current rating: A2, on review for possible downgrade. -- Class C, Mortgage Backed Floating Rate Notes, current rating: Baa2, on review for possible downgrade. -- Class D, Mortgage Backed Floating Rate Notes, current rating: Ba2, on review for possible downgrade. -- No previous rating action since initial rating assignment. Issuer: E-MAC NL 2003-I B.V. -- Class A, Mortgage Backed Floating Rate Notes, current rating: Aaa, on review for possible downgrade. -- Class B, Mortgage Backed Floating Rate Notes, current rating: A1, on review for possible downgrade. -- Class C, Mortgage Backed Floating Rate Notes, current rating: Baa2, on review for possible downgrade. -- Class D, Mortgage Backed Floating Rate Notes, current rating: Ba2, on review for possible downgrade. -- No previous rating action since initial rating assignment. Issuer: E-MAC NL 2003-II B.V. -- Class A, Mortgage Backed Floating Rate Notes, current rating: Aaa, on review for possible downgrade. -- Class B, Mortgage Backed Floating Rate Notes, current rating: A2, on review for possible downgrade. -- Class C, Mortgage Backed Floating Rate Notes, current rating: Baa2, on review for possible downgrade. -- Class D, Mortgage Backed Floating Rate Notes, current rating: Ba2, on review for possible downgrade. -- No previous rating action since initial rating assignment. Issuer: E-MAC NL 2004-I B.V. -- Class A, Mortgage Backed Floating Rate Notes, current rating: Aaa, on review for possible downgrade. -- Class B, Mortgage Backed Floating Rate Notes, current rating: A2, on review for possible downgrade. -- Class C, Mortgage Backed Floating Rate Notes, current rating: Baa2, on review for possible downgrade. -- No previous rating action since initial rating assignment. Issuer: E-MAC NL 2004-II B.V. -- Class A, Mortgage Backed Floating Rate Notes, current rating: Aaa, on review for possible downgrade. -- Class B, Mortgage Backed Floating Rate Notes, current rating: Aa3, on review for possible downgrade. -- Class C, Mortgage Backed Floating Rate Notes, current rating: Baa1, on review for possible downgrade. -- No previous rating action since initial rating assignment. Issuer: E-MAC NL 2005-I B.V. -- Class A, Mortgage Backed Floating Rate Notes, current rating: Aaa, on review for possible downgrade. -- Class B, Mortgage Backed Floating Rate Notes, current rating: Aa3, on review for possible downgrade. -- Class C, Mortgage Backed Floating Rate Notes, current rating: Baa1, on review for possible downgrade. -- No previous rating action since initial rating assignment. Issuer: E-MAC NL 2005-III B.V. -- Class A, Mortgage Backed Floating Rate Notes, current rating: Aaa, on review for possible downgrade. -- Class B, Mortgage Backed Floating Rate Notes, current rating: Aa3, on review for possible downgrade. -- Class C, Mortgage Backed Floating Rate Notes, current rating: Baa1, on review for possible downgrade. -- No previous rating action since initial rating assignment. Issuer: E-MAC NL 2006-II B.V. -- Class A, Mortgage Backed Floating Rate Notes, current rating: Aaa, on review for possible downgrade. -- Class B, Mortgage Backed Floating Rate Notes, current rating: Aa3, on review for possible downgrade. -- Class C, Mortgage Backed Floating Rate Notes, current rating: Baa1, on review for possible downgrade. -- No previous rating action since initial rating assignment. Issuer: E-MAC Program B.V. / Compartment NL 2007-III -- Class A1, Mortgage Backed Floating Rate Notes, current rating: Aaa, on review for possible downgrade. -- Class A2, Mortgage Backed Floating Rate Notes, current rating: Aaa, on review for possible downgrade. -- Class B, Mortgage Backed Floating Rate Notes, current rating: Aa2, on review for possible downgrade. -- Class C, Mortgage Backed Floating Rate Notes, current rating: A2, on review for possible downgrade. -- No previous rating action since initial rating assignment. Issuer: E-MAC Program B.V./ Compartment NL 2006-III -- Class A1, Mortgage Backed Floating Rate Notes, current rating: Aaa, on review for possible downgrade. -- Class A2, Mortgage Backed Floating Rate Notes, current rating: Aaa, on review for possible downgrade. -- Class B, Mortgage Backed Floating Rate Notes, current rating: Aa3, on review for possible downgrade. -- No previous rating action since initial rating assignment. Issuer: E-MAC Program B.V./ Compartment NL 2007-I -- Class A1, Mortgage Backed Floating Rate Notes, current rating: Aaa, on review for possible downgrade. -- Class A2, Mortgage Backed Floating Rate Notes, current rating: Aaa, on review for possible downgrade. -- Class B, Mortgage Backed Floating Rate Notes, current rating: Aa3, on review for possible downgrade. -No previous rating action since initial rating assignment. Issuer: E-MAC Program II B.V. / Compartment NL 2007-IV -- Class A, Mortgage Backed Floating Rate Notes, current rating: Aaa, on review for possible downgrade. -- Class B, Mortgage Backed Floating Rate Notes, current rating: Aa3, on review for possible downgrade. -- Class C, Mortgage Backed Floating Rate Notes, current rating: A2, on review for possible downgrade. -- Class D, Mortgage Backed Floating Rate Notes, current rating: Baa3, on review for possible downgrade. -- No previous rating action since initial rating assignment. Issuer: E-MAC Program III B.V. / Compartment NL 2008-I -- Class A1, Mortgage Backed Floating Rate Notes, current rating: Aaa, on review for possible downgrade. -- Class A2, Mortgage Backed Floating Rate Notes, current rating: Aaa, on review for possible downgrade. -- Class B, Mortgage Backed Floating Rate Notes, current rating: Aa2, on review for possible downgrade. -- Class C, Mortgage Backed Floating Rate Notes, current rating: A2, on review for possible downgrade. -- No previous rating action since initial rating assignment. LYCOS EUROPE: To Halt Portal and Web Hosting Activities ------------------------------------------------------- LYCOS Europe N.V. in a press statement on Tuesday announced the results of its strategic review process. LYCOS and its advisors have evaluated the different available options including the sale of the company as a whole, a sale of all or parts of the assets of LYCOS, and restructuring and partial liquidation of the business. As a result of this strategic review process the Management Board and the Supervisory Board of LYCOS came to the conclusion that the best available option of the company is to: (i) strive for a sale of its domains, Danish portal and shopping activities and (ii) to discontinue the portal and Web hosting activities. As a result of this conclusion LYCOS intends to distribute an amount of EUR50 million in 2008 to its shareholders. According to vnunet.com, the company decided to put its European portal and web hosting business into liquidation as its restructuring evaluation concluded it will be very difficult for the business to become profitable. LYCOS, vnunet.com notes, expects its consolidated losses to decrease substantially following the liquidation. The decision on the move will be taken after the company's shareholders' meeting on December 12, ITProPortal.com discloses. ITProPortal.com recounts LYCOS failed to find an investor in the current frosty economic environment. It also faced some fierce competition in Internet search domain from the likes of Google and Yahoo, ITProPortal.com adds. In the first three quarters, the company, ITProPortal.com relates, incurred a massive net loss of EUR17.1 million on total sales of EUR46.9 million. Headquartered in Haarlem, the Netherlands -- LYCOS Europe N.V. -- http://www.lycos-europe.com-- is a portal provider and online advertiser. The company has four business units: Communication and Communities, Portal and Search, Webhosting and Domain Names, and Shopping. It operates through its wholly owned subsidiaries in the United Kingdom, Sweden, Germany, Denmark, the United States, Armenia, Spain, the Netherlands, France, and Italy. =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D P O R T U G A L =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D * Moody's Reports Negative Outlook for Portuguese Banking System ---------------------------------------------------------------- The fundamental credit outlook for the Portuguese banking system is negative, reflecting the pressures on the banks' profitability, liquidity and capital amid the weakened credit environment, the deteriorating macroeconomic outlook and the global liquidity crisis, says Moody's Investors Service in its new Banking System Outlook for Portugal. Nonetheless, Moody's believes that the banking system should generally remain resilient thanks to its strong domestic retail franchises and the absence of a housing boom in the recent past. In addition, the recent government decision to provide extraordinary guarantees should help restore confidence in the financial system. Moody's negative outlook for the Portuguese banking system expresses the rating agency's view on the likely future direction of fundamental credit conditions in the industry over the next 12 to 18 months. It does not represent a projection of rating upgrades versus downgrades. "The global credit and liquidity crunch and the negative macroeconomic outlook have exposed existing vulnerabilities among some of the smaller Portuguese banks, as reflected in some negative rating actions in 2008 and the nationalization of Banco Portugues de Negocios in November. However, for the country's larger banks with solid national franchises in retail and SME banking, these macroeconomic challenges should remain manageable and the banking system as a whole should prove resilient," explains Olga Cerqueira, a Moody's Analyst and author of the report. The Portuguese economy is structurally reliant on external debt and the banking system derives around half of its funding from foreign wholesale markets, whose closure has therefore resulted in an overall increase in the liquidity risks of the country's banks. They have responded to this not only through commercial efforts to capture retail deposits, but also through an increased dependence on short-term market funds. The ability to issue covered bonds, since the establishment of a new regulatory framework in 2006, has mitigated this situation somewhat, offering a degree of funding diversification. "Portugal's banks are particularly exposed to external risks both because of the limited size of the domestic market and because their growth strategies have resulted in them becoming active players in cross-border business. In addition, most of them are exposed to market risks due to their significantly sized securities portfolios, as a result of which the continued decline in market prices has been a key factor weighing on the profitability and capitalization of most institutions," Ms Cerqueira adds. Moody's notes positively, however, that Portuguese banks have had only immaterial exposure to the US sub- prime market. Asset quality for the Portuguese financial system is relatively good. Although delinquencies have continued to rise since end- 2007, no abrupt deterioration is anticipated. Nonetheless, high credit risk concentrations in terms of large exposures and some concentration in certain sectors such as real estate and construction heighten banks' risk profiles. Moody's also notes that Portuguese households have among the highest indebtedness ratios in Europe. This, combined with ongoing strong growth in lending, prompts some caution in terms of banks' asset quality going forward, although, as most mortgages have variable interest rates, the currently low interest rate environment should alleviate some of the pressure on households. On Oct. 20, 2008, the Portuguese government approved EUR20 billion in extraordinary state guarantees to support the stability of the country's financial system and provide liquidity to credit institutions based in Portugal, in line with similar schemes put in place by other European countries. Moody's Banking System Outlook provides more details on these measures. "Moody's views the guarantees as positive in the current environment and believes they will help restore confidence in the financial system. Nevertheless, Moody's does not anticipate that they will, by themselves, affect Portuguese banks' current ratings as these already incorporate an expectation of government support," Ms Cerqueira explains. * S&P Says Portuguese RMBS Delinquency Rates Up in Third Quarter ---------------------------------------------------------------- Severe delinquencies in Standard & Poor's Ratings Services' Portuguese RMBS index increased to 0.99% from 0.86% during Q3 2008, despite the European Central Bank's recent interest rate cuts, according to Standard & Poor's index report for that sector. Delinquencies between three and 12 months also increased to 1.53% from 1.33% in Q2. The increasing trend in long-term arrears started in March 2007 and reflects the effect that increasing interest rates have had on mortgage installments. Indeed, most Portuguese residential mortgage-backed securities loans are linked to floating rates, so a monthly householder's burden to repay their debt is quite sensitive to rises in interest rates. "The recent cumulative 100 bps interest rate cuts by the European Central Bank (and the connected reduction in money-market rates) should ease this pressure, even if it will take a few months before lower rates are passed into mortgage installments," said credit analyst Paloma Mateo-Guerrero. "We expect the ECB to cut interest rates by a further 75 bps to 100 bps." Ms. Mateo-Guerrero added: "Given the current market and economic conditions, S&P expects Portuguese RMBS transactions to come under further pressure in the near future. So far these general performance trends have not affected any of S&P's ratings. S&P will continue to closely monitor any developments in performance metrics to assess whether the structures maintain a level of credit support consistent with the current ratings." The lower liquidity in the financial markets is also affecting borrowers' ability to refinance their debt and, subsequently, the level of prepayment rates. Prepayments in the Portuguese RMBS market peaked in 2007 at 12%. Since then, they have trended downwards and converged in Q3 2008 at around 8.32%. =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D R U S S I A =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D BENTO-KAM OJSC: Creditors Must File Claims by January 28 -------------------------------------------------------- Creditors of OJSC Bento-Kam have until Jan. 28, 2009, to submit proofs of claims to: G. Kuchumov Insolvency Manager Post User Box 111/1 Yelabuga 423602 Tatarstan Russia The Arbitration Court of Tatarstan commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A65=962620/2008,-AG4=9640. The Debtor can be reached at: OJSC Bento-Kam Ugolnaya Str. 1a Nurlat 423040 Tatarstan Russia CONCRETE LLC: Court Names A. Savelyev as Insolvency Manager ----------------------------------------------------------- The Arbitration Court of Vladimirskaya appointed A. Savelyev as Insolvency Manager for LLC Concrete. The case is docketed under Case No. A11=964577/2008,-A1=96164B. He can be reached at: Post User Box 27 D-481 125481 Moscow Russia The Debtor can be reached at: LLC Concrete Muromskaya Str. 9A Kovrov Vladimirskaya Russia ELSOKS CJSC: Creditors Must File Claims by January 28 ----------------------------------------------------- Creditors of CJSC Elsoks (TIN 5904008852) (Machinery and Equipment Production) have until Jan. 28, 2009, to submit proofs of claims to: S. Ryabov Insolvency Manager Post User Box 199 Lysva 618900 Permskiy Russia The Arbitration Court of Permskiy commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A50-3912/2008,-B2. The Debtor can be reached at: CJSC Elsoks N. Ostrovskogo Str. 65 614007 Perm Russia FOREST LLC: Creditors Must File Claims by January 28 ---------------------------------------------------- Creditors of LLC Forest have until Jan. 28, 2009, to submit proofs of claims to: Ye. Kazyurin Insolvency Manager Post User Box 12305 660041 Krasnoyarsk Russia The Arbitration Court of Krasnoyarskiy commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A33=962871/2008. The Debtor can be reached at: LLC Forest Office 210 Mayerchaka Str. 4A 660075 Krasnoyarsk Russia INDUSTRIAL ENERGETICS: Under Bankruptcy Procedure ------------------------------------------------- The Arbitration Court of Nizhegorodskaya has commenced external management bankruptcy procedure on CJSC Industrial Energetics (PSRN 1035205392155). The Case is docketed under No. A43=96 35545/2006. The External Insolvency Manager is: M. Petrvskiy Post User Box 25 GOS 30 Petropavlovsk-Kamchatskiy Russia The Debtor can be reached at: CJSC Industrial Energetics Proviantskaya Str. 6 Nizhny Novgorod Russia IRKUTSK-PAPER LLC: Creditors Must File Claims by January 28 ----------------------------------------------------------- Creditors of LLC Irkutsk-Paper (TIN 3811041589) have until Jan. 28, 2009, to submit proofs of claims to: S. Galandin Insolvency Manager Post User Box 224 664007 Irkutsk Russia The Arbitration Court of Irkutskaya commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A19=968054/07=9637. The Debtor can be reached at: LLC Irkutsk-Paper Apt. 12 Podgornaya Str. 68A Irkutsk Russia KIRENSKAYA HEATING: Court Names S. Galandinas Insolvency Manager ---------------------------------------------------------------- The Arbitration Court of Irkutskaya appointed S.Galandin as Insolvency Manager for MUE Kirenskaya Heating and Energy Company (TIN 3831003743). The case is docketed under Case No. A19=96 15197/07=9637. He can be reached at: Post User Box 224 664007 Irkutsk Russia The Debtor can be reached at: MUE Kirenskaya Heating and Energy Company Poliny Osipenko Str. 47 666701 Kirensk Irkutskaya Russia MASH-PROM LLC: Creditors Must File Claims by December 28 -------------------------------------------------------- Creditors of LLV Mash-Prom (Machinery) (TIN 6150041617) have until Dec. 28, 2008, to submit proofs of claims to: D. Tatyanchenko Insolvency Manager Sotsialisticheskaya Str. 60V Rostov-on-Don Russia The Arbitration Court of Rostovskaya commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A53=963482/2008,-C1=9633. The Debtor can be reached at: LLV Mash-Prom Platovskiy Prospect 101 Novocherkassk Russia MDM BANK: S&P Puts 'BB' Credit Rating on CreditWatch Negative ------------------------------------------------------------- Standard & Poor's Ratings Services said that it had placed its 'BB' long-term counterparty credit rating on Russian MDM Bank on CreditWatch with negative implications. The 'B' short-term counterparty credit rating was affirmed. "The CreditWatch placement reflects the announcement that the shareholders of MDM Bank and URSA Bank (not rated) plan to combine their equity stakes to form a holding company, establish common ownership over the two banks, and eventually merge them," said Standard & Poor's credit analyst Eugene Tarzimanov. S&P believes that this transaction will weaken MDM's credit profile in the short term, because of URSA's higher risk profile and the high execution and refinancing risks stemming from the transaction. The continuing very challenging operating environment in Russia places additional pressure on MDM's creditworthiness. MDM and URSA plan to merge under a single banking license within 12-18 months, creating Russia's sixth-largest bank by assets and fourth largest by capital. S&P acknowledges that the planned transaction has a sound business rationale in terms of diversification and economies of scale; however, the risks outlined above currently outweigh the commercial benefits, which will take time to materialize. Although management and shareholders have stated that they have no intention of supporting one bank to the detriment of the other, until the merger of the banks has been achieved, S&P believes that, from a reputational, practical, and shareholder perspective, MDM has a strong incentive to support URSA financially if the need arises. In S&P's opinion, URSA has a weaker financial profile than MDM. URSA is about two times smaller than MDM by assets. "We expect to resolve the negative CreditWatch status within six months, upon the transfer of MDM's and URSA's shares to the holding company and the establishment of common ownership," said Mr. Tarzimanov. At this stage, S&P would not expect to lower the long-term rating on MDM by more than one notch. NORD-LES LLC: Creditors Must File Claims by January 28 ------------------------------------------------------ Creditors of LLC Nord-Les (TIN 2925003955) (Forestry) have until Jan. 28, 2009, to submit proofs of claims to: A. Kondrashkin Insolvency Manager Apt.61 Potapovskiy Pereulok 9/11 101000 Moscow Russia The Arbitration Court of Saint-Petersburg commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A56-52835/2007. The Debtor can be reached at: LLC Nord-Les Gidrotekhnikov Str. 3A 195220 Saint-Petersburg Russia SITRONICS JSC: Inks US$230 Mln Credit Facility Agreement with VEB ----------------------------------------------------------------- JSC SITRONICS has signed a US$230 million credit facility agreement with State Corporation "Bank for Development and Foreign Economic Affairs" (Vnesheconombank). The one-year credit facility can be extended for a further 12 months subject to agreement between the parties. The new funds will be used to refinance loan facilities of US$125 million and US$75 million, which were provided by Dresdner Bank AG in November 2007 and March 2008, and which mature in November 2008 and March 2009, respectively. The facility will also be used to refinance other short-term borrowings which were secured in 2006 and 2007. Marina Zabolotneva, Chief Financial Officer and First Vice President for Finance and Investments of SITRONICS, commented: "We are pleased to have qualified to receive funds from Vnesheconombank within the framework of the state program to support strategically important assets. The credit line will be used to refinance borrowings that are now falling due for repayment." About JSC Sitronics Headquartered in Moscow, Russia, JSC Sitronics (LSE: SITR) -- http://www.sitronics.com/-- provides telecommunications solutions, IT solutions and microelectronic solutions in the CIS region with a rapidly growing presence in other EEMEA markets. Sistema controls the company. * * * JSC Sitronics still carries a 'B-' long-term issuer default rating from Fitch with negative outlook. TMK OAO: Seeks US$1 Billion Refinancing Aid from VEB ---------------------------------------------------- OAO TMK has requested around US$1 billion in state loans to refinance its foreign debt, Reuters reports citing Vedomosti business daily. Vedomosti said that according to an industry source, TMK's request has been recognized as justified by the credit committee of state- owned bank VEB, Reuters relates. About TMK Headquartered in Moscow, Russia, OAO TMK -- http://www.tmkgroup.ru/eng/-- manufactures the entire product range of existing pipe products, which are used in the oil-and- gas industry, the chemical and petrochemical industries, the energy and machine-building industries, construction and the municipal housing economy, shipbuilding, aviation, space and rocket equipment, and agriculture. TMK has production facilities located in Russia and Romania, which unite the four leading enterprises in the Russian pipe industry. * * * OAO TMK continues to carry a Ba3 long-term corporate family and probability of default rating from Moody's with stable outlook. TMK also carries a B+ long-term foreign and short-term local issuer default ratings from Standard & Poor's with stable outlook. The ratings still apply to date. TNK-BP: President and CEO Robert Dudley Steps Down -------------------------------------------------- TNK-BP in a press statement on Monday said that it had received the resignation of its founding President and CEO, Robert Dudley, in accordance with the memorandum of understanding between Alfa Access-Renova and BP in early September. Mr. Dudley's resignation is effective from Monday, December 1. On November 28 the Board of Directors of TNK-BP Management took a unanimous decision on the new Chairman of the Management Board of TNK-BP Management. Tim Summers was appointed interim CEO/Chairman of the Management Board of TNK-BP Management until the appointment and commencement of a new non-affiliated CEO as agreed by the shareholders. In compliance with the decision of the Board of Directors of TNK- BP Management, on December 1 Board Chairman Victor Vekselberg signed a corresponding labor contract with Tim Summers. The appointment of a new CEO is currently being progressed by the company's shareholders as are changes to the charters and Boards of Directors of TNK-BP Holding and TNK-BP Management, together with attendant ancillary matters. "I depart TNK-BP after more than five challenging and immensely satisfying years building and leading this unique and progressive Russian oil major," Robert Dudley stated. "I wish the new management team every success in continuing the company's development." Incoming CEO Tim Summers noted "It is vital that the transition is effected smoothly and seamlessly. I will focus on closing out our strong performance in 2008 and in setting our business plan for next year in this difficult business environment." About TNK-BP Headquartered in Moscow, Russia, TNK-BP -- http://www.tnk-bp.ru/ -- is a vertically integrated oil company. The company owns and operates four refineries in Russia and one in Ukraine, and has a retail network of approximately 1,600 sites. It employs approximately 65,000 people. TNK-BP was formed in 2003 as a result of the merger of BP's Russian oil and gas assets and the oil and gas assets of Alfa, Access/Renova group (AAR). BP and AAR each own 50% of the company. * * * TNK-BP International Ltd. continues to carry 'BB' long-term and 'B' short-term corporate credit ratings from Standard & Poor's. S&P affirmed the ratings and revised its outlook on the company to stable from negative in September 2008. TRANS-OIL LLC: Creditors Must File Claims by January 28 ------------------------------------------------------- Creditors of LLC Trans-Oil have until Jan. 28, 2009, to submit proofs of claims to: N. Karpova Insolvency Manager Apt. 128 K. Marksa Str. 13 163000 Arkhangelsk Russia The Arbitration Court of Arkhangelskaya commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. AA5=961255/2008,. The Debtor can be reached at: LLC Trans-Oil Arkticheskiy pereulok 1 Iskateley Naryan-Mar 166000 Nenetskiy Russia URSA BANK: Fitch Puts B+ Long-Term IDR on Watch Positive -------------------------------------------------------- Fitch has affirmed MDM Bank's Long-term IDR of 'BB' with a Stable Outlook and placed URSA Bank's Long-term IDR of B+ on Rating Watch Positive. The rating actions follow the announcement of the planned merger of the two banks. Rating actions: MDM Bank -- Long-term IDR: affirmed at 'BB'; Outlook remains Stable -- Short-term IDR: affirmed at 'B' -- Individual: affirmed at 'C/D' -- Support: affirmed at '4' -- Support Rating Floor: affirmed at 'B' -- National Long-term: affirmed at 'AA-(rus)' (AA minus (rus); Outlook remains Stable URSA Bank -- Long-term Issuer IDR: rated at 'B+'; placed on Rating Watch Positive, the Stable Outlook has been removed -- Short-term IDR: affirmed at 'B' -- Individual: affirmed at 'D' -- Support Rating: rated at '5', placed on Rating Watch Positive -- Support Rating Floor: rated at 'B-' (B minus), placed on Rating Watch Positive VIMPELCOM OJSC: Posts US$269MM Net Income in 9-Mos Ended Sept. 30 ----------------------------------------------------------------- OJSC Vimpel-Communications released its financial and operating results for the quarter and nine months ended September 30, 2008. 3Q08 Financial and Operating Highlights * Net operating revenues reached US$2,843 million, an increase of 45.3% versus 3Q07. * OIBDA reached US$1,388 million, an increase of 36.7% versus 3Q07. * OIBDA margin improved quarter-on-quarter to 48.8%, including 50.0% in Russia and 53.4% in Kazakhstan. * Net income totaled US$269 million, a reduction of 41.3% versus 3Q07, reflecting strong adverse currency impact. * Mobile subscribers increased by 7.1 million versus 3Q07, reaching 57.8 million. * Bonds in the amount of RUR10 billion were issued in July. Alexander Izosimov, Chief Executive Officer of VimpelCom, said, "We are pleased to present another strong set of quarterly results. In the third quarter our business showed 45% annual revenue growth with an improved 49% OIBDA margin. While our operations have not yet been affected by the financial turmoil, we clearly understand that the Company will not be immune to it going forward. Anticipating this, we have already taken steps to mitigate any potential adverse impact of deteriorating market conditions. We froze new orders for capital expenditures, cut non-essential expenses, implemented a hiring freeze and re- negotiated a number of contracts with vendors and suppliers. We are monitoring the situation very closely and are prepared to activate additional measures as events unfold. We are confident that our robust business model and resilient cash flow, further enhanced by the protective measures that we have implemented, will ensure VimpelCom's ability to meet its obligations and to continue its operations without significant disruptions." About VimpelCom Headquartered in Moscow, Russia, VimpelCom (NYSE: VIP) -- http://www.vimpelcom.com/-- provides mobile telecommunications services in Russia and Kazakhstan with newly acquired operations in Ukraine, Tajikistan and Uzbekistan. The Company operates under the 'Beeline' brand in Russia and Kazakhstan. In addition, VimpelCom is continuing to use 'K-mobile' and 'EXCESS' brands in Kazakhstan. * * * OJSC Vimpel Communications continues to carry Ba2 long-term corporate family rating, Ba2 senior unsecured debt rating and Ba2 probability of default rating from Moody's with positive outlook. Vimpelcom also carries BB+ long-term foreign issuer credit rating and BB+ long-term local issuer credit rating from Standard & Poor's with stable outlook. * OBLAST OF SARATOV: Moody's Puts 'Ba2' Currency Ratings -------------------------------------------------------- Moody's Investors Service has assigned first-time global scale local and foreign currency ratings of Ba2 to the Oblast of Saratov. The rating outlook is stable. At the same time, Moody's Interfax Rating Agency, which is majority-owned by Moody's, assigned a national scale rating of Aa2.ru to the Oblast. "The ratings are supported by the Oblast's adequate socio-economic performance and stable budgetary operating results in the recent past," says Alexander Proklov, a Moody's Senior Analyst and lead analyst for the region. "The Oblast posted stable primary and gross operating balances in 2003-07, averaging 12.1% and 11.3% of operating revenues, respectively. However, the Oblast's tax revenue will likely be adversely impacted by an expected economic slowdown in Russia," cautions the analyst. This could lead to a shortfall in the Oblast's corporate income tax proceeds in 2009 and, therefore, to new borrowings and/or budget spending cuts. At the same time, flexibility of operating expenditure is limited by increasing public sector wages, social benefits and transfers. Moody's notes that the Oblast's debt burden is low. "The ratio of net direct and indirect debt to operating revenue averaged 14% over last five years, while the region's interest payments were kept at a very modest 1% of operating revenues,' says Mr Proklov. The Oblast's direct debt is represented by medium-term bank credits and restructured federal loans, while indirect exposure is negligible. However, under the current, tightening market conditions, new bank credits are only being provided on a short-term basis and with high interest rates. Moreover, the Oblast's accumulated cash may not be sufficient to cover an expected budget deficit. Therefore, Moody's recognises that the ability of the Oblast's government to pursue a prudent debt policy, avoiding a significant increase in debt service, would be a key factor in the Oblast's creditworthiness in the near future. The Oblast of Saratov is located 860 kilometers south of Moscow and has just over 2.6 million inhabitants (1.8% of Russian population). The Oblast's predominant industrial specialization is in machine manufacturing, power generation, mineral fertilizers and food industry. The agricultural sector has historically played an important role in the regional economy. * RUSSIA: May Set Aside RUB300 Billion in Loan Guarantees --------------------------------------------------------- Russia may buy banks' mortgages and provide RUB300 billion (US$11 billion) to guarantee corporate loans in a bid to boost liquidity, Bloomberg News reports citing Finance Minister Alexei Kudrin. "We need to provide targeted support," Bloomberg News cited Minister Kudrin as saying during a meeting chaired by President Dmitry Medvedev. According to Bloomberg News, the Russian government has already pledged about US$200 billion in emergency funding to help companies and banks weather the credit markets' seizure. "In order to strengthen guarantees for loans, including loans for two and three years, the state must be ready to provide 300 billion rubles," Bloomberg News quoted Minister Kudrin's comments broadcast by state channel Vesti-24. "If necessary we can increase this limit." Minister Kudrin also said additional measures are being considered to boost funds available as loans to companies, including by buying mortgages from banks, Bloomberg News relates. Bloomberg News says the World Bank predicts Russia's economic growth will slow to 3 percent next year from an average of 7 percent annually since 1999. Meanwhile, BNP Paribas estimates cited by Bloomberg News said investors pulled US$190 billion out of Russia since the start of August. =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D S W I T Z E R L A N D =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D BEWAL WELLNESS: Creditors Must File Proofs of Claim by Dec. 15 -------------------------------------------------------------- Creditors owed money by LLC Bewal Wellness are requested to file their proofs of claim by Dec. 15, 2008, to: Lehngasse 3 3812 Wilderswil Switzerland The company is currently undergoing liquidation in Wilderswil. The decision about liquidation was accepted at an extraordinary shareholders' meeting held on Oct. 13, 2008. CREDIT SUISSE: Expects CHF3 Billion 4th Qtr Net Loss ---------------------------------------------------- Credit Suisse Group AG estimates net loss of approximately CHF3 billion in the fourth quarter as of end-November 2008, reflecting the impact of adverse market conditions in the quarter and costs associated with the risk reduction program, primarily in Investment Banking. In light of Credit Suisse's 2008 performance to date, its Chairman, Group CEO and Investment Bank CEO agreed not to receive variable compensation for 2008. Credit Suisse also plans reduction in headcount of 5,300, primarily in Investment Banking, representing an 11% reduction of the bank's current overall headcount. The Wall Street Journal relates Credit Suisse shares have fallen in recent days as fears over a poor fourth quarter spread. The Journal says so far this year the stock has slumped 59%, slightly less than the 62% fall in Stoxx Europe 600 bank index. Wednesday, Credit Suisse shares closed at 27.7 francs, giving the bank a market capitalization of US$28.6 billion, the Journal notes. Headquartered in Zurich, Switzerland, Credit Suisse Group AG (VTX:CSGN) -- http://www.credit-suisse.com/-- formerly Credit Suisse Group, is a global financial services company catering to corporate, institutional and government clients, and high-net- worth individuals worldwide, as well as to retail clients in Switzerland. The Company serves its clients through its three divisions: Private Banking, Investment Banking and Asset Management. In Private Banking, the Company offers advice and a range of wealth management solutions, including pension planning, life insurance products, tax planning and wealth and inheritance advice. In Investment Banking, it offers investment banking and securities products and services to corporate, institutional and government clients worldwide. In Asset Management, it provides access to a range of investment classes, ranging from money market, fixed income, equities and balanced products, to alternative investments, such as real estate, hedge funds, private equity and volatility management. FERRY HOUSE: Deadline to File Proofs of Claim Set December 17 ------------------------------------------------------------- Creditors owed money by LLC Ferry House are requested to file their proofs of claim by Dec. 17, 2008, to: Pia Ziegler Liquidator Itingerstrasse 5 4450 Sissach Switzerland The company is currently undergoing liquidation in Obergosgen SO. The decision about liquidation was accepted at an extraordinary shareholders' meeting held on Oct. 28, 2008. GRIP TESTCENTER: Creditors Have Until Dec. 14 to File Claims ------------------------------------------------------------ Creditors owed money by JSC Grip Testcenter Wichlen in liquidation, are requested to file their proofs of claim by Dec. 14, 2008, to: Hansjurg Rhyner Advocacy Rhyner & Schmidt Rechtsanwalte Bahnhof 8750 Glarus Switzerland The company is currently undergoing liquidation in Elm. The decision about liquidation was accepted at an extraordinary shareholders' meeting held on Oct. 27, 2008. LOGOLINE JSC: Proofs of Claim Filing Deadline is December 14 ------------------------------------------------------------ Creditors owed money by JSC Logoline, are requested to file their proofs of claim by Dec. 14, 2008, to: Astrid Albrecht and Farid Khan Scheuchzerstrasse 210 8057 Zurich Switzerland The company is currently undergoing liquidation in Zurich. The decision about liquidation was accepted at an extraordinary shareholders' meeting held on Oct. 2, 2008. M & T HEALTH: Creditors' Proofs of Claim Due by December 17 ----------------------------------------------------------- Creditors owed money by LLC M & T Health Consulting are requested to file their proofs of claim by Dec. 17, 2008, to: Schutzenmattstrasse 43 4051 Basel Switzerland The company is currently undergoing liquidation in Basel. The decision about liquidation was accepted at an extraordinary shareholders' meeting held on Sept. 23, 2008. PARKHAUS UND GEWERBECENTER: Deadline to File Claims on Dec. 17 --------------------------------------------------------------- Creditors owed money by JSC Parkhaus und Gewerbecenter am Gutsch in liquidation, are requested to file their proofs of claim by Dec. 17, 2008, to: Alexander Studhalter Matthofstrand 8 Mail Box: 14164 6000 Luzern Switzerland The company is currently undergoing liquidation in Luzern. The decision about liquidation was accepted at an extraordinary shareholders' meeting held on Oct. 13, 2008. =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D U K R A I N E =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D AFTER REPAIRS: Creditors Must File Claims by December 18 -------------------------------------------------------- Creditors of LLC After Repairs Set (code EDRPOU 35497771) have until Dec. 18, 2008, to submit proofs of claim to: Mr. Vladimir Gliadchenko Temporary Insolvency Manager Kirov Avenue, 96/13 Dnipropetrovsk Ukraine 49000 The Arbitration Court of Dnipropetrovsk commenced bankruptcy proceedings against the company after finding it insolvent on Oct. 10, 2008. The case is docketed as B 26/224-08. The Economic Court of Dnipropetrovsk Kujbishev Str. 1a 49600 Dnipropetrovsk Ukraine The Debtor can be reached at: LLC After Repairs Set Naberezhnaya Pobedy Str. 32 49000 Dnipropetrovsk Ukraine AGRARIY LLC: Creditors Must File Claims by December 18 ------------------------------------------------------ Creditors of LLC Science-Production Center Agrariy (code EDRPOU 30272282) have until Dec. 18, 2008, to submit proofs of claim to: The Economic Court of Cherkassy Shevchenko Avenue 307 18005 Cherkassy Ukraine The Arbitration Court of Cherkassy commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed as 01/1693. The Debtor can be reached at: LLC Science-Production Center Agrariy Nikolayev Str. 17 Zolotonosha Cherkassy Ukraine BUDIVELNYK LLC: Creditors Must File Claims by December 18 --------------------------------------------------------- Creditors of LLC Budivelnyk (code EDRPOU 24707282) have until Dec. 18, 2008, to submit proofs of claim to: Mrs. Yarmola Olga Liquidator / Insolvency Manager Apt. 12 Lesovaya Str. 11a Zarichany 12440 Zhytomir Ukraine The Arbitration Court of Zhytomir commenced bankruptcy proceedings against the company after finding it insolvent on Oct. 14 2008. The case is docketed as 12/123-B. The Economic Court of Zhytomir Putiatinskiy Square 3/65 10014 Zhytomir Ukraine The Debtor can be reached at: LLC Budivelnyk Cherniakhov Zhytomir Ukraine CHIGIRIN ENERGY: Creditors Must File Claims by December 18 ---------------------------------------------------------- Creditors of OJSC Cherkassy Regional Energy Subsidiary Company Chigirin Energy Trade (code EDRPOU 05424911) have until Dec. 18, 2008, to submit proofs of claim to: Mr. Yuditsky Alexander Temporary Insolvency Manager Apt. 9 Khimikov Avenue, 60 Cherkassy Ukraine The Arbitration Court of Cherkassy commenced bankruptcy proceedings against the company after finding it insolvent on Nov. 4, 2008. The case is docketed as 14/4633. The Economic Court of Cherkassy Shevchenko Avenue 307 18005 Cherkassy Ukraine The Debtor can be reached at: OJSC Cherkassy Regional Energy Subsidiary Company Chigirin Energy Trade Mir Str. 1 Chigirin 20902 Cherkassy Ukraine DRUZHBA LLC: Creditors Must File Claims by December 18 ------------------------------------------------------ Creditors of Agricultural LLC Druzhba (code EDRPOU 03745982) have until Dec. 18, 2008, to submit proofs of claim to: Mrs. Yarmola Olga Liquidator / Insolvency Manager Apt. 12 Lesovaya Str. 11a Zarichany 12440 Zhytomir Ukraine The Arbitration Court of Zhytomir commenced bankruptcy proceedings against the company after finding it insolvent on Nov. 4, 2008. The case is docketed as 3/167-B. The Economic Court of Zhytomir Putiatinskiy Square 3/65 10014 Zhytomir Ukraine The Debtor can be reached at: Agricultural LLC Druzhba Yagodinka Romanovsky Zhytomir Ukraine KIRIT-2007 LLC: Creditors Must File Claims by December 17 --------------------------------------------------------- Creditors of LLC Kirit-2007 (code EDRPOU 35408016) have until Dec. 17, 2008, to submit proofs of claim to: The Economic Court of Kharkov Derzhprom 8th Entrance Svoboda Square 5 61022 Kharkov Ukraine The Economic Court of Kharkov commenced bankruptcy supervision procedure on the company on Sept. 11, 2008. The case is docketed as B-24/176-08. The Debtor can be reached at: LLC Kirit-2007 Krasnoarmeyskaya Str. 17 Khroli 61000 Kharkov Ukraine LOTTO MAYSTER: Creditors Must File Claims by December 17 -------------------------------------------------------- Creditors of LLC Lotto Mayster Soft (code EDRPOU 35001275) have until Dec. 17, 2008, to submit proofs of claim to: Mr. Andrew Vershynin Liquidator P.O.B. 151 03110 Kiev Ukraine The Arbitration Court of Kiev commenced bankruptcy proceedings against the company after finding it insolvent on Nov. 13, 2008. The case is docketed as 24/450-b. The Economic Court of Kiev B. Hmelnitskij Boulevard 44-B 01030 Kiev Ukraine The Debtor can be reached at: LLC Lotto Mayster Soft Apt. 1 Burmistenko Str. 11 03040 Kiev Ukraine NETWORK TARGET-PRODUCT: Creditors Must File Claims by Dec. 18 ------------------------------------------------------------- Creditors of LLC Commerce Network Target-Product (code EDRPOU 34731998) have until Dec. 18, 2008, to submit proofs of claim to: LLC Judicial Union Dobra Porada Liquidator General Naumov Str. 23-b 03164 Kiev Ukraine The Arbitration Court of Kiev commenced bankruptcy proceedings against the company after finding it insolvent on Aug. 11, 2008. The case is docketed as 49/160-b. The Economic Court of Kiev B. Hmelnitskij Boulevard 44-B 01030 Kiev Ukraine POBEDA LLC: Creditors Must File Claims by December 18 ----------------------------------------------------- Creditors of Agricultural LLC Pobeda (code EDRPOU 03746065) have until Dec. 18, 2008, to submit proofs of claim to: Mrs. Olga Yarmola Liquidator / Insolvency Manager Apt. 12 Lesovaya Str. 11a Zarichany 12440 Zhytomir Ukraine The Arbitration Court of Zhytomir commenced bankruptcy proceedings against the company after finding it insolvent on Oct. 27, 2008. The case is docketed as 7/162-b. The Economic Court of Zhytomir Putiatinskiy Square 3/65 10014 Zhytomir Ukraine The Debtor can be reached at: Agricultural LLC Pobeda Prutovka Romanovsky 13033 Zhytomir Ukraine SPHERE LLC: Creditors Must File Claims by December 17 ----------------------------------------------------- Creditors of LLC Trading-Industrial Enterprise Sphere (code EDRPOU 34663656) have until Dec. 17, 2008, to submit proofs of claim to: Mr. Andrew Vershynin Liquidator P.O.B. 151 03110 Kiev Ukraine The Arbitration Court of Kiev commenced bankruptcy proceedings against the company after finding it insolvent on Nov. 13, 2008. The case is docketed as 24/449-b. The Economic Court of Kiev B. Hmelnitskij Boulevard 44-B 01030 Kiev Ukraine The Debtor can be reached at: LLC Trading-Industrial Enterprise Sphere Krasnoarmeyskaya Str. 132 03150 Kiev Ukraine =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D= =3D=3D U N I T E D K I N G D O M =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D= =3D=3D ALDEN HENDI: Goes Into Administration; 135 Jobs Eliminated ---------------------------------------------------------- The Joint Administrators of Alden HenDi have confirmed that 135 of the 160 staff across the Hackney and Whitney sites have been given notice of redundancy. Mark Orton, KPMG Partner and administrator to Alden HenDi said: "It is disappointing but unavoidable that we are unable to continue trading across the two Alden HenDi sites and have had to make a substantial number of staff redundant. We are currently working with Government agencies to ensure the employees' issues are dealt with as quickly as possible and are now continuing with some very limited trading to finalize orders for customers." Alden HenDi was placed into administration Tuesday, December 2, 2008, at the request of the company directors. The company provides digital and litho printing services and translation and publishing solutions from two sites. Around 14 of the 120 staff have been kept on at the Witney site and 11 of the 40 staff based the Hackney depot in East Street. About KPMG LLP (UK) KPMG LLP (UK) -- http://kpmg.co.uk/-- provides professional services including audit, tax, financial and risk advisory. KPMG in the UK has over 10,000 partners and staff working in 22 offices and is part of a strong global network of members firms. As part of KPMG Europe it has merged with its German and Swiss firms, making it the largest integrated accounting firm in Europe. BOWIE CASTLEBANK: Goes Into Administration; 817 Jobs Axed --------------------------------------------------------- Blair Nimmo and Tony Friar of KPMG Restructuring were appointed as Joint Administrators of the Bowie Castlebank Group which includes Alexander Kennedy & Sons Ltd Tuesday, December 2, 2008, at the request of the Company's directors. Bowie Castlebank Group trades under the Klick Photopoint and Max Spielman retail brand names in the photoprocessing market, and also owns the William Munro Cleaners retail brand. The company employs 1,664 people across its network of 314 shops, its processing center in Wishaw, its head office in Glasgow and warehouse in Chester. There are 197 branches Klick stores and 117 Max Spielman. Approximately 60 Klick stores also provide Munro Cleaners outlets. All Munro cleaner outlets are based in Scotland. Due to the advance of digital photography, the photoprocessing business has suffered significant losses in recent years, while reduced levels of clothing requiring dry cleaning has seen the cleaning business contract. The company explored several opportunities to restructure or refinance the business, but these were not successful. The Administrators have unfortunately had no option but to significantly reduce trading activity with the regrettable consequence of 817 redundancies. Blair Nimmo, joint administrator and head of restructuring for KPMG in Scotland said: "It is with regret that we have had to make substantial redundancies across Bowie Castlebank's operations and we are currently working with Government agencies to ensure the employees' issues are dealt with as quickly as possible. At the same time we are marketing the business in an attempt to secure a sale of some of the Group's stores or operations as a going concern. Any interested parties should contact the Joint Administrators as soon as possible." Customers who currently have photos with either Klick or Max Spielman for development or have garments with Munro's for cleaning, are advised to return to their local store as quickly as possible to retrieve these items. All efforts will be made to return items to their owners where possible. About KPMG LLP (UK) KPMG LLP (UK) -- http://kpmg.co.uk/-- provides professional services including audit, tax, financial and risk advisory. KPMG in the UK has over 10,000 partners and staff working in 22 offices and is part of a strong global network of members firms. As part of KPMG Europe it has merged with its German and Swiss firms, making it the largest integrated accounting firm in Europe. DEKANIA EUROPE: Fitch Withdraws 'BB' Expected Rating on Class E --------------------------------------------------------------- Fitch Ratings has withdrawn the expected ratings on Dekania Europe Funding IV Limited. The transaction did not close. The expected ratings are: -- Class A1: expected rating 'AAA' withdrawn; -- Class A2: expected rating 'AAA' withdrawn; -- Class B: expected rating 'AA' withdrawn; -- Class C: expected rating 'A' withdrawn. -- Class D: expected rating 'BBB' withdrawn. -- Class E: expected rating 'BB' withdrawn. EUROSAIL 2006-2BL: S&P Junks Rating on Class F1c Notes ------------------------------------------------------ Standard & Poor's Ratings Services lowered and removed from CreditWatch negative its credit ratings on various subordinate classes of notes issued by Eurosail 2006-2BL PLC and Eurosail 2006-4NP PLC due to deterioration in performance. The downgrades are due to the deals' performance and not their exposure to a Lehman-related swap counterparty. On Sept. 17, S&P placed all the notes in these deals on CreditWatch negative due to their exposure to Lehman Brothers Special Financing Inc. as the fixed/floating swap counterparty for both deals and the BBR/LIBOR swap counterparty for Eurosail 2006- 4NP. In both Eurosail 2006-2BL and Eurosail 2006-4NP, most of the loans currently paying a fixed rate of interest revert to a floating rate linked to LIBOR by April 2009 and September 2009, respectively. S&P considered this exposure as part of its initial analysis and ongoing surveillance, but the current fixed/floating mismatches do not affect S&P's ratings in these transactions. For this reason the notes do not remain on CreditWatch negative. Eurosail 2006-4NP also had exposure to Lehman Brothers Special Financing as the BBR/LIBOR swap counterparty. As of September 2008, this basis risk is approximately 13% by value of the pool. S&P has sized for this risk, incorporating the current dislocation, in S&P's cash flow analysis. At present, this risk does not affect S&P's ratings in this transaction. Key Performance Indicators as of September 2008 Eurosail Eurosail 2006-2BL 2006-4NP -------- -------- Total delinquencies (including repossessions) 35.1% 22.1% Unsold repossessions(1) 5.3% 3.1% Cumulative losses GBP3,247,729(2) GBP1,372,805(3) WA loss severity 21.7% 25.1% (1) Percentage of the outstanding principal balance. (2) 0.53% of the original collateral-backed note balance. (3) 0.18% of the original collateral-backed note balance. WA - Weighted-average. With U.K. house prices likely to continue falling in the near future, S&P expects to see further losses in coming quarters. Ratings List Eurosail 2006-2BL PLC EUR60.8 Million, GBP406.28 Million, And $318 Million Mortgage-Backed Floating-Rate Notes Ratings Lowered And Removed From CreditWatch Negative Rating ------ Class To From ----- -- ---- D1a BB BBB/Watch Neg D1c BB BBB/Watch Neg E1c B BB-/Watch Neg F1c CCC B/Watch Neg Ratings Removed From CreditWatch Negative And Affirmed Rating ------ Class To From ----- -- ---- A1b AAA AAA/Watch Neg A1c AAA AAA/Watch Neg A2c AAA AAA/Watch Neg B1a AA+ AA+/Watch Neg B1b AA+ AA+/Watch Neg C1a A+ A+/Watch Neg C1c A+ A+/Watch Neg Eurosail 2006-4NP PLC GBP489 Million, US$64 Million, and EUR327.5 Million Mortgage-Backed Floating-Rate Notes and an Overissuance of GBP7.45 Million Excess Spread Backed Floating-Rate Notes Ratings Lowered And Removed From CreditWatch Negative Rating ------ Class To From ----- -- ---- C1a BBB+ A/Watch Neg C1c BBB+ A/Watch Neg D1a BB+ BBB/Watch Neg D1c BB+ BBB/Watch Neg E1c B BB/Watch Neg Ratings Removed From CreditWatch Negative And Affirmed Rating ------ Class To From ----- -- ---- A2c AAA AAA/Watch Neg A3a AAA AAA/Watch Neg A3c AAA AAA/Watch Neg M1a AAA AAA/Watch Neg M1c AAA AAA/Watch Neg B1a AA AA/Watch Neg FAIRFAX GERRARD: Taps Joint Administrators from Grant Thornton -------------------------------------------------------------- On Nov. 18, 2008, David Matthews and Les Ross of Grant Thornton UK LLP were appointed joint administrators of: -- Fairfax Gerrard Holdings Ltd., -- Fairfax Gerrard International Ltd., -- Fairfax Gerrard Traders Ltd. -- Fairfax Gerrard Contracts Ltd., -- Assetine Trading Ltd., -- Assetine Ltd., and -- Harringtons Exports Ltd. The company can be reached through Grant Thornton UK LLP at: Kennet House 80 Kings Road Reading Berkshire RG1 3BJ England FITZGERALD LIGHTING: Goes Into Administration; KPMG Appointed ------------------------------------------------------------- Richard Hill and Joff Pope of KPMG LLP have been appointed administrators of Bodmin-based lighting producer, Fitzgerald Lighting Ltd. The business has been manufacturing and distributing industrial, commercial and domestic lighting products for 36 years and has 357 employees, most of whom are based in Bodmin, Cornwall. Richard Hill, KPMG partner and joint administrator, said: "It is always upsetting when an established manufacturing business with a loyal and long serving workforce enters insolvency. Increased competition has resulted in substantial losses being incurred in recent years and attempts to restructure the company have been unsuccessful. Rescue efforts were hampered by reduced demand across the lighting sector during 2008." Mr. Hill continued: "We are assessing the best way of realizing the company's assets which mainly comprise property, stock and specialist equipment. A number of parties have expressed interest in acquiring parts of the business and we are talking to all potential purchasers with a view to selling whatever we can as a going concern. However, 260 staff were made redundant on Monday 1st December." Fitzgerald Lighting Ltd has distribution depots in Birmingham, Edinburgh, St. Helens, West London, Belfast, Dublin and Dubai. Any interested parties should contact the administrators via the company. About KPMG LLP (UK) KPMG LLP (UK) -- http://kpmg.co.uk/-- provides professional services including audit, tax, financial and risk advisory. KPMG in the UK has over 10,000 partners and staff working in 22 offices and is part of a strong global network of members firms. As part of KPMG Europe it has merged with its German and Swiss firms, making it the largest integrated accounting firm in Europe. FLIGHTLINE LTD: Goes Into Administration; 235 Jobs Affected ----------------------------------------------------------- Jane Moriarty and Myles Halley from KPMG LLP were appointed administrators to Flightline Ltd on Wednesday, December 3, 2008. The company, which is based at Southend Airport, operates in the whole aircraft charter and ACMI (aircraft, crew, maintenance and insurance) market. Following the appointment of the administrators, the company's Air Operating Certificate was suspended by the Civil Aviation Authority, and the company has ceased trading. A total of 235 staff have been made redundant, however, a small number of employees remain to work alongside the administrators. Jane Moriarty commented: "We are now undergoing an orderly wind down of business, with the aim of realizing the value of any of the remaining assets for the benefit of creditors." About KPMG LLP (UK) KPMG LLP (UK) -- http://kpmg.co.uk/-- provides professional services including audit, tax, financial and risk advisory. KPMG in the UK has over 10,000 partners and staff working in 22 offices and is part of a strong global network of members firms. As part of KPMG Europe it has merged with its German and Swiss firms, making it the largest integrated accounting firm in Europe. IDS PLASTICS: Names Joint Administrators from Tenon Recovery ------------------------------------------------------------ Jeremy Woodside and Christopher Ratten of Tenon Recovery, were appointed joint administrators of IDS Plastics Ltd. on Nov. 21, 2008. The company can be reached at: IDS Plastics Ltd. Essex House Kelsall Street Oldham Lancashire OL6 6HR England INEOS GROUP: Improves Loan Waiver Terms to Appease Investors ------------------------------------------------------------ Tessa Walsh at Reuters reports that Ineos Group has improved the terms on a key waiver to its EUR7.62 billion (US$9.63 billion) leveraged loan to ease investors' concerns that no covenants would apply in the next six months during a period of heightened risk as the company readies its new business plan. As reported in the TCR-Europe on Nov. 20, 2008, Ineos sought consent for a waiver of bank covenants for the next two quarters, conditional on submission of a new business plan in April 2009. The company proposed to pay consenting lenders a fee of 50 bps and increase the interest margins applicable to its senior debt facilities by 100 =96 125 bps. Ineos, Reuters relates, is now offering an additional margin payment of 175-225 basis points (bps) in a move that will substantially increase its borrowing costs. Ineos will now pay considerably more than the EUR80 million estimated cost of the original proposal, Reuters adds. Rueters says if the waiver is passed, the company will pay 400 bps on its term loan A and revolving credit, 450 bps on its term loan B, 500 bps on its term loan C and 600 bps on its second lien loan. Ineos, Reuters recounts, has also introduced a 5.25 times leverage test for the end of the year that has been adjusted to reflect customer destocking. Citing bankers close to the deal, Reuters discloses Ineos' debt service covenant has been left in place and will be tested on March 2009. The bankers, Reuters states, maintained that the company has a strong cash position with around EUR1 billion of cash on the balance sheet and was never in danger of payment default. "Ineos was not anywhere near to payment default, the covenants when written never envisaged this kind of market disintegration. Ineos has enough cash to service its debt and will continue to do so," a banker close to the waiver was quoted by Reuters as saying. Ineos 200-plus syndicate will vote to approve the changes to the waiver on December 9, Reuters notes. About INEOS Headquartered in Lyndhurst, Hampshire, INEOS Group Holdings plc -- http://www.ineos.com/-- is a global manufacturer of petrochemicals, specialty chemicals and oil products. It comprises 18 businesses each with a major chemical company heritage. Its production network spans 70 manufacturing facilities in 14 countries throughout the world. It has 16,000 employees. JPMORGAN CHASE: Investors Want to Flee From Highbridge Capital -------------------------------------------------------------- Jenny Strasburg at The Wall Street Journal reports that investors have asked to withdraw 36% of the assets from J.P. Morgan Chase & Co.'s multistrategy fund, Highbridge Capital Management. Citing people familiar with Highbridge Capital, WSJ relates that the investor pullout and investment losses could reduce the once US$15 billion fund to US$6 billion. The report states that due to woes in the convertible-bond market -- one of Highbridge Capital's primary areas of focus ? caused a 25% performance decline in the fund this year. J.P. Morgan, says the report, would lose hundreds of millions of dollars in fees that Highbridge Capital contributes to the bank. When Highbridge Capital makes money, 25% of the profits will go to the fund's mangers, while sources say half goes to J.P. Morgan, WSJ reports. WSJ quoted J.P. Morgan's asset-management business chief Jes Staley as saying, "Highbridge was a significant catalyst to pushing J.P. Morgan successfully into alternative asset management, but unfortunately any performance-based business increases the volatility to your top-line revenue number." Highbridge Capital's assets have dropped to less than US$20 billion this year, from almost US$38 billion in 2007, WSJ states. Highbridge Capital Management, LLC, founded in 1992, is a multi- strategy global hedge fund with over US$17 billion in current assets under management and 160 employees. The fund specializes in non-traditional investment management strategies with offices in New York, London, and Hong Kong. Highbridge has expertise across a range of arbitrage and absolute return investment strategies in the global equity markets. JPMorgan Asset Management formed a strategic partnership with Highbridge by purchasing a majority interest in the firm in December 2004. JPMorgan Chase & Co. (NYSE: JPM) -- http://www.jpmorganchase.com/ -- is a global financial services firm with assets of about US$2.3 trillion and operations in more than 60 countries. The firm provides services in investment banking, financial services for consumers, small business and commercial banking, financial transaction processing, asset management, and private equity. A component of the Dow Jones Industrial Average, JPMorgan Chase serves millions of consumers in the U.S. and many of the world's most prominent corporate, institutional and government clients under its J.P. Morgan, Chase, and WaMu brands. MATRIX ENGINEERED: Goes Into Administration; 70 Jobs at Risk ------------------------------------------------------------ Matrix Engineered Systems has gone into administration after running into cash-flow problems caused by operational difficulties in buying raw materials, stv.tv reports. Laurie Manson and Bruce Cartwright, of PricewaterhouseCoopers, have been appointed joint administrators of the company, which employs 70 people, the report relates. Citing Mr. Cartwright, the report discloses the company had a strong, long-term order book, particularly from the rail sector and had also developed new markets for its products. "With the support of key customers, we hope to trade the business for a period of time while a buyer is sought," Mr. Cartwright was quoted by the stv.tv as saying. Matrix Engineered Systems is based in Brechin in Angus, Scotland. MEAD SCOTLAND: Goes Into Liquidation; Tenon Recovery Appointed -------------------------------------------------------------- Mead Scotland, the company which ran Hilton pub Dows Bar Diner, has gone into liquidation, The Inverness Courier reports. Iain Fraser of Tenon Recovery has been appointed by shareholders as liquidator of Mead Scotland, the report relates. According to the report, Dows Bar Diner is now being run by a management company on behalf of the owners Scottish & Newcastle. Mr. Fraser, as cited by the report, said the pub on Balloan Park, which includes a sports and lounge bar, restaurant and a conference suite, employs 20 staff. Mead Scotland's creditors will meet at the Ardross Street office of financial services company Tenon Recovery on December 9. MOLWIN DEVELOPMENTS: Taps Joint Administrators from Deloitte ------------------------------------------------------------ Lee Anthony Manning and Richard Michael Hawes of Deloitte & Touche LLP were appointed joint administrators of Molwin Developments Ltd. on Nov. 12, 2008. The company can be reached at: Molwin Developments Ltd. Target Consulting Ltd. Lawrence House Lower Bristol Road Bath BA2 9ET England NOMURA HOLDINGS: To Layoff 1,000 Workers in London -------------------------------------------------- Nomura Holdings Inc will cut up to 1,000 or about 22 percent of its London staff after an internal review following the purchase of the Asian, European and Middle Eastern assets of Lehman Brothers Holdings Inc., Reuters' Junko Fujita reports citing an e- mailed statement from the Japanese brokerage firm. Agence France-Presse says Nomura has a total of 4,500 employees in the British capital. "This will ensure that the company remains competitive in the current market conditions, and establishes the right cost base going forward," Nomura said in the statement obtained by Reuters. Affected positions include staff in front and back offices, including former Lehman employees and its own bankers, Bloomberg News relates citing spokesman Tohru Namikawa. As reported in the Troubled Company Reporter-Asia Pacific on Dec. 3, 2008, Bloomberg News said Nomura repeated a target of reaching a JPY500 billion (US$5.3 billion) pretax profit for the year that ends in March 2011. According to Bloomberg News, Chief Executive Officer Kenichi Watanabe told investors rising profit from investment banking outside Japan will help Nomura reach the goal. Bloomberg News noted Mr. Watanabe's remarks came as Goldman Sachs Group Inc. cut a forecast for Nomura's fiscal 2011 pretax profit by 20 percent to JPY250 billion. Goldman said Nomura's acquisition of parts of Lehman Brothers may force it to raise more capital. Bloomberg News recalled the company said in October it may spend US$2 billion to integrate about 8,000 employees it acquired when it took over Lehman's operations outside the Americas. Losses According to Bloomberg News, Nomura reported three straight quarterly losses as global markets declined and flagged US$2 billion in costs stemming from the purchase of parts of Lehman Brothers. The company had a pretax loss of JPY64.6 billion for the year ended March 31 while global investment banking profit was JPY22.8 billion. Nomura had about JPY430.9 billion of cash as of Sept. 30. Bloomberg News said the brokerage posted a wider-than-expected JPY72.9 billion second-quarter loss, putting it on course for a record full-year deficit. The firm's first-half shortfall of JPY149.5 billion was more than double its record JPY67.8 billion annual loss last year, prompting Standard & Poor's and Moody's Investors Service to say they may cut the firm's credit ratings, Bloomberg News noted. Dai-ichi Deal Bloomberg News reported Nomura also plans to sell JPY110 billion (US$1.2 billion) of bonds, mostly to Dai-ichi Mutual Life Insurance Co., to boost capital. According to the report, Nomura will sell JPY100 billion of subordinated convertible bonds to Dai-ichi and will sell JPY10 billion of the bonds to Shinkin Central Bank. Nomura also may sell as much as JPY300 billion of corporate bonds by Dec. 8, 2010, the report said. About Nomura Holdings Headquartered in Tokyo, Japan, Nomura Holdings Inc. (NYSE:NMR) -- http://www.nomura.com/-- is a global securities and investment banking firm. Nomura is a holding company. The services it provides include trading, underwriting, and offering securities, asset management services, and others. As of March 31, 2008, it operated offices in about 30 countries and regions, including Japan, the United States, the United Kingdom, Singapore and Hong Kong through its subsidiaries. The Company's customers include individuals, corporations, financial institutions, governments and governmental agencies. Nomura operates in five business divisions: domestic retail, global markets, global investment banking, global merchant banking and asset management. In February, 2007, Nomura acquired Instinet Incorporated. Effective October 1, 2008, Nomura Holdings Inc. acquired Lehman Brothers Holdings Inc.'s European equities and investment-banking business, and decided not to take on the fixed-income unit. PRIMESHADE LTD: Taps Joint Administrators from Grant Thornton ------------------------------------------------------------- On Nov. 14, 2008, Alistair Gareth Wardell, Nigel Morrison and Anthony Norman Flynn of Grant Thornton UK LLP were appointed joint administrators of: -- Primeshade Ltd., -- Utiliserv Ltd., and -- Utiliserv Group Ltd. The company can be reached at: Primeshade House Heol Mostyn Village Farm Industrial Estate Pyle Bridgend CF33 6BJ England These companies are engaged in the design, project formulation, project management and multi-utility installation of gas, water, electricity and telecommunications networks for domestic, industrial, commercial, public and mixed-use community developments. RBRG LTD: Names Joint Administrators from Tenon Recovery -------------------------------------------------------- S. J. Parker and T. J. Binyon of Tenon Recovery were appointed joint administrators of RBRG Ltd. (fka Multitrax U.K. Ltd.) on Nov. 14, 2008. The company can be reached through Tenon Recovery at: Sherlock House 73 Baker Street London W1U 6RD England REFLEXION CARE: Appoints Joint Liquidators from Grant Thornton -------------------------------------------------------------- Leslie Ross of Grant Thornton UK LLP was appointed liquidator of Reflexion Care Ltd. on Oct. 24, 2008, for the creditors' voluntary winding-up proceeding. The company can be reached through Grant Thornton UK LLP at: 4 Hardman Square Spinningfields Manchester M3 3EB England SOLARWEB LTD: Names Joint Liquidators from Tenon Recovery --------------------------------------------------------- J. K. Rolls and S. J. Parker of Tenon Recovery, were appointed joint liquidators of Solarweb Ltd. on Nov. 17, 2008, for the creditors' voluntary winding-up proceeding. The company can be reached through Tenon Recovery at: Sherlock House 73 Baker Street London W1U 6RD England WHITE TOWER: Fitch Pares Rating on GBP68-MM Class E Notes to 'BB' ----------------------------------------------------------------- Fitch Ratings has downgraded White Tower 2006-3 plc's class B, C, D and E notes. The class A note's rating is affirmed at 'AAA'. The agency has simultaneously revised its Outlooks on the four downgraded tranches to Negative from Stable. The rating actions are: -- GBP678 million class A due October 2012 (XS0275770914) affirmed at 'AAA'; Outlook remains Stable -- GBP171.5 million class B due October 2012 (XS0275771649) downgraded to 'AA' from 'AAA'; Outlook revised to Negative from Stable -- GBP116 million class C due October 2012 (XS0275772704) downgraded to 'A' from 'AA'; Outlook revised to Negative from Stable -- GBP116 million class D due October 2012 (XS0275773181) downgraded to 'BBB' from 'A'; Outlook revised to Negative from Stable -- GBP68 million class E due October 2012 (XS0275774072) downgraded to 'BB' from 'BBB'; Outlook revised to Negative from Stable Deteriorating London office market conditions have weakened the creditworthiness of the loan securitized in this transaction. This has resulted in the downgrades of the class B,C, D and E notes. Although the assets have not been re-valued since closing in December 2006, Fitch estimates that the market value of the collateral is likely to have declined by approximately 30% based on prevailing market conditions. Consequently, the securitized loan currently has a Fitch loan-to-value ratio of 95.9%. The securitized loan is an interest-only floating-rate senior loan with an outstanding balance of GBP1,150m. It is scheduled to mature in October 2009 and is therefore exposed to the current adverse property and financing market conditions. The loan is wholly secured by London office properties, of which three quarters (by market value) are located in the City of London. While value reductions in UK commercial property have so far been confined to outward yield shifts rather than rental value declines, City of London offices are set to suffer from a combination of increased supply and reduced demand as several large development projects are being completed as financial services' tenants scale back their operations. The transaction is also exposed to tenant concentration as the largest tenant, JPMorgan Chase Bank N.A., accounts for 40% of the current gross rent, equally split between the leases on two office properties (expiring in March 2016 and March 2025, respectively). The tenant has recently committed to relocate out of the City of London to Canary Wharf next year. WOOLWORTHS GROUP: Still In Talks with BBC Over 2Entertain Stake --------------------------------------------------------------- James Davey at Reuters reports that the British Broadcasting Corporation said it remains in talks with Woolworths Group plc over its acquisition of a 40% stake in the retail group's DVD publishing business 2Entertain Ltd. Reuters relates a spokeswoman for BBC Worldwide, the broadcaster's commercial arm, which owns 60 percent of 2Entertain, dismissed a report in The Times newspaper that Woolworths' stake in 2Entertain was likely to be in administration by the end of the week as "categorically untrue". "Our view is it is not going to go into administration, you can't put a stake into administration," the BBC Worldwide spokeswoman was quoted by Reuters as saying. "Even if the group went into administration, the business is still highly profitable and would not in itself be put into administration." Reuters recounts Wednesday's Times newspaper said the BBC is trying to cut its initial GBP100 million(US$147.4 million) offer to take full control of 2Entertain. As reported in the TCR-Europe, on November 27, 2008, the boards of Woolworths plc and Entertainment UK Ltd resolved to file petitions for administration in the High Court as that there is no longer any prospect of those businesses being able to operate as a going concern after discussions relating to the potential sale of Woolworths Group plc's retail business have ended. Neville Kahn, Dan Butters and Nick Dargan of Deloitte & Touche LLP were appointed as Joint Administrators of the businesses. Citing Bloomberg News, TCR-Europe disclosed stores will stay open past Christmas and workers at the outlets will be paid. Woolworths Group plc however is not in administration, the report noted. About Woolworths Group plc Headquartered in London, England, Woolworths Group plc (LON:WLW) -- http://www.woolworthsgroupplc.com/-- is a general merchandise retailer, and entertainment wholesaler and publisher. The Company's business is divided into Retail, and Entertainment Wholesale and Publishing segments. Woolworths, Streets Online Limited, WMS Card Services Limited and Flogistics Limited are included within the Retail segment, with Entertainment UK Limited, Disc Distribution Limited and 2entertain Limited being the constituents of Entertainment Wholesale and Publishing segment. The stores comprise Woolworths outlets located in small towns and city suburbs, targeted at meeting basic everyday shopping requirements, as well as larger stores located on shopping streets in regional shopping centers. The product offer covers toys, children's clothing, events, confectionery, home and entertainment, and larger stores include a range of home and children's clothing. * UK: House of Commons to Cross-Examine Insolvency Service ---------------------------------------------------------- Accountancy Age reported that the all-party Commons Business and Enterprise Committee is set to cross-examine Insolvency Service chief executive Stephen Speed early in the new year. According to the report, the House of Commons will probe into the ability of the service to cope with an "alarming" surge in insolvency cases as the economy slows. The move, the report noted, preceded the disclosure of a 7% increase in bankruptcy figures issued by the Ministry of Justice. The report disclosed figures issued by the Ministry of Justice. showed that in third quarter of 2008 there were 13,653 debtor petitions and 3,184 company wind-up petitions -- an increase of 13% on the same quarter in 2007 and a 9% increase on the second quarter. "Given the current economic situation, it is timely to look at the Insolvency Service, both to assure ourselves of its efficiency and to give the public the opportunity to raise any concerns they may have about the underlying policy," Chairman Peter Luff, a Tory MP, was quoted by the report as saying. * Reduced Bilateral Loans to Impact UK Businesses, KPMG Says ------------------------------------------------------------ Simon Collins, Head of Corporate Finance at KPMG, working with businesses across the industry spectrum, comments on how the latest developments in the economy are affecting his clients: "We are seeing evidence that lenders are still reducing 'bilateral' debt facilities, such as overdrafts, forex and BACS services. This cash will be a vital lifeline in the first quarter of 2009. Some businesses will feel the pain more acutely, particularly in the retail, leisure and house-building sectors, which have increased working capital requirements after the New Year in the run up to Easter. Retailers and house-builders, for example, build up stock in the run up to spring. This will have wider repercussions for the suppliers into these sectors as well meaning the reduction of these facilities now could have far- reaching consequences next quarter. The inability to access bilateral loans could be the tipping point for many businesses as they brace themselves for the harsh trading of January and February next year." * PwC Says Bank of England Must Cut Interest Rates to 1.5% ---------------------------------------------------------- The Bank of England Monetary Policy Committee (MPC) should cut interest rates by 150 basis points to 1.5% at its meeting this week, according to economists at PricewaterhouseCoopers LLP (PwC). Updated PwC projections suggest that, even with this further interest rate cut and an estimated net boost of around 0.3% of GDP from the fiscal stimulus announced in the Pre-Budget Report last week, the UK economy is set to shrink by around 1.3% in 2009, the worst performance of any G7 economy next year. Furthermore, risks to this projection remain weighted to the downside. John Hawksworth, head of macroeconomics, PricewaterhouseCoopers LLP, commented: "This is no time for half measures. The November Inflation Report made clear that interest rates need to fall further to avoid inflation significantly undershooting its 2% target rate in the medium-term. We see no reason for the MPC to delay making a further one and a half percentage point cut in base rates in order to mitigate the risks of the recession turning into a full-blown depression. "Lower interest rates are necessary but not sufficient to avert a downward spiral into deflation. Banks remain focused on preserving capital and liquidity while the government is keen to encourage responsible lending at reasonable levels. It is essential for the economy that where banks are scaling back their lending, they do so in an orderly fashion." About PricewaterhouseCoopers LLP PricewaterhouseCoopers LLP -- http://www.pwc.co.uk/-- provides industry-focused assurance, tax and advisory services. It has more than 16,000 partners and staff in offices around the UK. =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D X X X X X X X X =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D * Fitch Puts Negative Outlooks to 266 European CMBS Tranches ------------------------------------------------------------ Fitch Ratings has assigned Negative Outlooks to 266 tranches on 101 European CMBS transactions. This represents 27.4% of European CMBS tranches under Fitch surveillance. In addition, the agency revised outlooks on 13 tranches in nine of these transactions, to Stable from Positive. "These rating actions reflect the continued decline in market values across European commercial real estate," says Andrew Currie, Head of EMEA CMBS at Fitch. "The combination of a collapse in investor confidence, a scarcity of debt funding to the sector and an anticipated reduction in tenant demand as the real economy enters a severe recession indicates that values are set to continue their downward trend for the foreseeable future". "While falling values were initially most apparent in the UK, assets across much of the rest of the Continent have also lost value in recent months. It is currently challenging to accurately measure property values given the thin trading of assets but it is clear that demand for commercial real estate investments has diminished dramatically," Currie adds. Published reports by market commentators indicate that UK commercial property has suffered declines over 30% and market commentators are currently forecasting cumulative declines of up to 50% by 2010 from peak values. In previous commentary dated 18 August 2008, Fitch placed the entire UK CMBS sector on negative outlook. "While property cash flows continue to be generally stable and the majority of loans are currently making full debt service payments, the recession will inevitably lead to more tenant defaults, with the administration of Woolworths and MFI heralding the start of this process," says Andy Brewer, Head of EMEA structured finance surveillance at Fitch. "Difficulties in achieving re-lettings on assets with material vacancy rates or upcoming lease expiries will also follow. This will not only put strain on rental income but is also likely to further dampen collateral values." Negative Outlooks have been assigned to tranches within transactions that Fitch perceives to be most exposed to market value declines. These are primarily CMBS whose underlying loans have significant balloon payments due at their maturities, as the "refinance risk" on these loans is now heightened by the severity of continued value declines. Transactions originated prior to 2005 have generally experienced significant property value increases prior to the recent declines and are considered less "at risk". The affected tranches of UK transactions are generally the 'A' and lower-rated tranches, as well as the 'AA'-rated tranches of transactions originated in 2006 and 2007 that, by virtue of being originated at or close to the peak of the market, are more exposed to value declines. Continental European transactions are less affected as value declines to date have been less severe than those observed in the UK. The current rating action generally affects 'BBB' and lower-rated tranches, as well as the 'A'-rated tranches of transactions originated in 2006 and 2007. The impact of the commercial property market correction is not limited to rated CMBS debt. At the peak in CMBS issuance in 2006, it had become customary for arrangers to consider carving contractually-subordinated participations (B-notes) out of commercial mortgage whole loans and use CMBS to finance only the senior A-notes. The vast majority of these B-notes were rated in the 'BB' or lower rating categories. Just as the effects of the steep declines in property values are more acutely felt at the base of the CMBS capital structure, Fitch also expects B-notes to come under pressure. Several B-notes are privately-rated by Fitch and they will also be placed on priority review with significant negative rating action likely. The rating actions reflect Fitch's view on the European CMBS sector; the agency will be carrying out detailed individual analysis on the affected transactions in the coming months. The Outlook revisions are: Alburn Real Estate Capital Limited: -- Class B (XS0285751904) rated 'AA'; Outlook revised to Negative from Stable -- Class C (XS0285753272) rated 'A'; Outlook revised to Negative from Stable -- Class D (XS0285753942) rated 'BBB'; Outlook revised to Negative from Stable -- Class E (XS0285755053) rated 'BBB-' (BBB minus) Outlook revised to Negative from Stable Aquila (Eclipse 2005-1) plc: -- Class C (XS0213759938) rated 'A+'; Outlook revised to Negative from Stable -- Class D (XS0213760274) rated 'BBB'; Outlook revised to Negative from Stable -- Class E (XS0213760431) rated 'BB'; Outlook revised to Negative from Stable Bruntwood Alpha PLC: -- Class B (XS0283196490) rated 'AA'; Outlook revised to Negative from Stable -- Class C (XS0283199593) rated 'A'; Outlook revised to Negative from Stable Cornerstone Titan 2005-2 plc: -- Class E (XS0237331375) rated 'A'; Outlook revised to Negative from Positive -- Class F (XS0237331615) rated 'BB+'; Outlook revised to Negative from Positive -- Class G (XS0237330302) rated 'BB-' (BB minus); Outlook revised to Negative from Stable Cornerstone Titan 2006-1 plc: -- Class C (XS0262024184) rated 'AA'; Outlook revised to Negative from Stable -- Class D (XS0262024424) rated 'AA'; Outlook revised to Negative from Stable -- Class E (XS0262025157) rated 'A'; Outlook revised to Negative from Stable -- Class F (XS0262025405) rated 'BBB'; Outlook revised to Negative from Stable -- Class G (XS0262025744) rated 'BBB-' (BBB minus); Outlook revised to Negative from Stable Cornerstone Titan 2007-1 plc: -- Class D (XS0288057648) rated 'A'; Outlook revised to Negative from Stable -- Class E (XS0288058885) rated 'BBB'; Outlook revised to Negative from Stable -- Class F (XS0288059420) rated 'BBB-' (BBB minus); Outlook revised to Negative from Stable -- Class G (XS0288060196) rated 'BB'; Outlook revised to Negative from Stable DECO Series 2005 - UK Conduit 1 plc: -- Class C (XS0222803842) rated 'A'; Outlook revised to Negative from Stable DECO Series 2005 - Pan Europe 1 plc: -- Class D (XS0227113692) rated 'AA'; Outlook revised to Stable from Positive -- Class E (XS0227115630) rated 'A'; Outlook revised to Stable from Positive -- Class F (XS0227116281) rated 'BBB'; Outlook revised to Negative from Stable -- Class G (XS0227116950) rated 'BBB'; Outlook revised to Negative from Stable -- Class H (XS0227117503) rated 'BBB-' (BBB minus); Outlook revised to Negative from Stable DECO 8 - UK Conduit 2 plc: -- Class B (XS0251886833) rated 'AA+'; Outlook revised to Negative from Stable -- Class C (XS0251887211) rated 'AA-' (AA minus); Outlook revised to Negative from Stable -- Class D (XS0251887724) rated 'A'; Outlook revised to Negative from Stable -- Class E (XS0251889696) rated 'BBB'; Outlook revised to Negative from Stable -- Class F (XS0251890199) rated 'BBB-' (BBB minus); Outlook revised to Negative from Stable DECO 9 Pan Europe 3 p.l.c: -- Class E (XS0262563728) rated 'A'; Outlook revised to Negative from Stable -- Class F (XS0262564452) rated 'BBB'; Outlook revised to Negative from Stable -- Class G (XS0262565004) rated 'BBB-' (BBB minus); Outlook revised to Negative from Stable -- Class H (XS0262565939) rated 'BB'; Outlook revised to Negative from Stable -- Class J (XS0262566234) rated 'BB-' (BB minus); Outlook revised to Negative from Stable DECO 10 - Pan Europe 4 p.l.c: -- Class C (XS0276273074) rated 'A'; Outlook revised to Negative from Stable -- Class D (XS0276273660) rated 'BBB'; Outlook revised to Negative from Stable DECO 11 - UK Conduit 3 plc: -- Class B (XS0279815426) rated 'AA'; Outlook revised to Negative from Stable -- Class C (XS0279816580) rated 'A'; Outlook revised to Negative from Stable -- Class D (XS0279817398) rated 'BBB'; Outlook revised to Negative from Stable DECO 12 - UK 4 p.l.c: -- Class B (XS0289644550) rated 'AA'; Outlook revised to Negative from Stable -- Class C (XS0289644634) rated 'A'; Outlook revised to Negative from Stable -- Class D (XS0289644717) rated 'BBB'; Outlook revised to Negative from Stable -- Class E (XS0289644808) rated 'BBB-' (BBB minus); Outlook revised to Negative from Stable -- Class F (XS0289644980) rated 'BB'; Outlook revised to Negative from Stable DECO 14 - Pan Europe 5 B.V.: -- Class C (XS0291365566) rated 'A'; Outlook revised to Negative from Stable -- Class D (XS0291367182) rated 'BBB'; Outlook revised to Negative from Stable -- Class E (XS0291367422) rated 'BBB'; Outlook revised to Negative from Stable -- Class F (XS0291368156) rated 'BBB-' (BBB minus); Outlook revised to Negative from Stable Deco 15 - Pan Europe 6 Ltd.: -- Class C (XS0307405133) rated 'A'; Outlook revised to Negative from Stable -- Class D (XS0307405729) rated 'BBB+'; Outlook revised to Negative from Stable -- Class E (XS0307406453) rated 'BBB'; Outlook revised to Negative from Stable DRACO (ECLIPSE 2005-4) plc: -- Class D (XS0238141377) rated 'A'; Outlook revised to Negative from Stable -- Class E (XS0238141617) rated 'BBB'; Outlook revised to Negative from Stable Epic (Ayton) plc: -- Class F (XS0237889935) rated 'BBB+'; Outlook revised to Negative from Stable Epic (Brodie) plc: -- Class C (XS0258763936) rated 'AA+'; Outlook revised to Negative from Stable -- Class D (XS0258769115) rated 'A+'; Outlook revised to Negative from Stable -- Class E (XS0258770550) rated 'BBB+'; Outlook revised to Negative from Stable -- Class F (XS0258771442) rated 'BBB'; Outlook revised to Negative from Stable -- Class G (XS0258797249) rated 'BBB'; Outlook revised to Negative from Stable Epic (Caspar) plc: -- Class B (XS0201997094) rated 'AA'; Outlook revised to Stable from Positive -- Class C (XS0201997177) rated 'A'; Outlook revised to Negative from Positive -- Class D (XS0201997250) rated 'BBB+'; Outlook revised to Negative from Positive Epic (Culzean) plc: -- Class C (XS0286456867) rated 'AA'; Outlook revised to Negative from Stable -- Class D (XS0286457758) rated 'A'; Outlook revised to Negative from Stable -- Class E (XS0286458723) rated 'BBB+'; Outlook revised to Negative from Stable -- Class F (XS0286459374) rated 'BBB'; Outlook revised to Negative from Stable EPIC (Drummond) Limited: -- Class D (XS0303391857) rated 'A+'; Outlook revised to Negative from Stable -- Class E (XS0303392236) rated 'BBB'; Outlook revised to Negative from Stable -- Class F (XS0303392400) rated 'BBB'; Outlook revised to Negative from Stable -- Class G (XS0303393986) rated 'BBB-' (BBB minus) Outlook revised to Negative from Stable Epic (More London) plc: -- Class B (XS0251155544) rated 'AA'; Outlook revised to Negative from Stable -- Class C (XS0251156435) rated 'A'; Outlook revised to Negative from Stable -- Class D (XS0251156781) rated 'A'; Outlook revised to Negative from Stable -- Class E (XS0251157912) rated 'BBB'; Outlook revised to Negative from Stable -- Class F (XS0251159371) rated 'BBB'; Outlook revised to Negative from Stable EPIC (Value Retail) Limited: -- Class B (XS0309761699) rated 'AA'; Outlook revised to Negative from Stable -- Class C (XS0309761855) rated 'AA'; Outlook revised to Negative from Stable Epic Opera (Arlington) Limited: -- Class C (XS0311217870) rated 'AA'; Outlook revised to Negative from Stable -- Class D (XS0311218258) rated 'A'; Outlook revised to Negative from Stable EQUINOX (ECLIPSE 2006-1) plc: -- Class C (XS0259280161) rated 'AA+'; Outlook revised to Negative from Stable -- Class D (XS0259280591) rated 'A+'; Outlook revised to Negative from Stable -- Class E (XS0259280674) rated 'BBB+'; Outlook revised to Negative from Stable -- Class F (XS0259280914) rated 'BBB'; Outlook revised to Negative from Stable European Property Capital 3 p.l.c.: -- Class D (XS0236881313) rated 'BBB'; Outlook revised to Negative from Stable European Property Capital 4 p.l.c: -- Class C (XS0270903387) rated 'AA'; Outlook revised to Negative from Stable -- Class D (XS0270906729) rated 'A'; Outlook revised to Negative from Stable -- Class E (XS0270908006) rated 'BBB'; Outlook revised to Negative from Stable EuroProp (EMC) S.A. (Compartment 1): -- Class C (XS0260130207) rated 'A+'; Outlook revised to Negative from Stable -- Class D (XS0260130975) rated 'BBB'; Outlook revised to Negative from Stable -- Class E (XS0260132088) rated 'BBB-' (BBB minus); Outlook revised to Negative from Stable EuroProp (EMC-VI) S.A.: -- Class C (XS0301903356) rated 'A'; Outlook revised to Negative from Stable -- Class D (XS0301903513) rated 'BBB'; Outlook revised to Negative from Stable -- Class E (XS0301903943) rated 'BBB'; Outlook revised to Negative from Stable -- Class F (XS0301904248) rated 'BB'; Outlook revised to Negative from Stable Fairhold Securitisation Limited: -- Class B Tap Issue (XS0298927509) rated 'BBB'; Outlook revised to Negative from Stable FCC Proudreed Properties 2005: -- Class D (FR0010247601) rated 'A'; Outlook revised to Stable from Positive -- Class E (FR0010247619) rated 'BBB'; Outlook revised to Negative from Positive Fleet Street Finance One Plc: -- Class B (XS0224564582) rated 'AA+'; Outlook revised to Stable from Positive -- Class C (XS0224565043) rated 'AA'; Outlook revised to Stable from Positive -- Class D (XS0224565126) rated 'BBB+'; Outlook revised to Negative from Positive -- Class E (XS0224565639) rated 'BB+'; Outlook revised to Negative from Positive Fleet Street Finance 2 plc: -- Class C (XS0268934451) rated 'A'; Outlook revised to Negative from Stable -- Class D (XS0268934618) rated 'BBB'; Outlook revised to Negative from Stable Fleet Street Finance Three plc: -- Class B (XS0302958110) rated 'A '; Outlook revised to Negative from Stable Fordgate Commercial Securitisation No.1 plc: -- Class B (XS0271605148) rated 'AA'; Outlook revised to N Negative from Stable Fornax (Eclipse 2006-2) B.V.: -- Class E (XS0267555570) rated 'A'; Outlook revised to Negative from Stable -- Class F (XS0267555737) rated 'BBB'; Outlook revised to Negative from Stable -- Class G (XS0267556032) rated 'BB'; Outlook revised to Negative from Stable German Residential Asset Note Distributor p.l.c: -- Class D (XS0260143101) rated 'A-' (A minus); Outlook revised to Negative from Stable -- Class E (XS0260143283) rated 'BBB+'; Outlook revised to Negative from Stable -- Class F (XS0260935035) rated 'BBB'; Outlook revised to Negative from Stable German Residential Funding plc: -- Class C (XS0263195447) rated 'A'; Outlook revised to Negative from Stable -- Class D (XS0263195959) rated 'BBB+'; Outlook revised to Negative from Stable -- Class E (XS0263196338) rated 'BBB'; Outlook revised to Negative from Stable Hallam Finance Plc: -- Class B (XS0206471160) rated 'A'; Outlook revised to Stable from Positive -- Class C (XS0206471590) rated 'BBB'; Outlook revised to Negative from Positive Hercules (Eclipse 2006-4) plc: -- Class B (XS0276410833) rated 'AA+'; Outlook revised to Negative from Stable -- Class C (XS0276412375) rated 'AA'; Outlook revised to Negative from Stable -- Class D (XS0276413183) rated 'A'; Outlook revised to Negative from Stable -- Class E (XS0276413340) rated 'BBB'; Outlook revised to Negative from Stable Immeo Residential Finance No. 2 Ltd.: -- Class D (XS0301457718) rated 'A'; Outlook revised to Negative from Stable Indus (ECLIPSE 2007-1) plc: -- Class B (XS0294757173) rated 'AA'; Outlook revised to Negative from Stable -- Class C (XS0294757256) rated 'A'; Outlook revised to Negative from Stable -- Class D (XS0294757504) rated 'BBB'; Outlook revised to Negative from Stable Infinity 2006-1 Classico: -- Class D (FR0010379370) rated 'A'; Outlook revised to Negative from Stable -- Class E (FR0010379388) rated 'A'; Outlook revised to Negative from Stable Infinity 2007-1 (SoPRANo): -- Class D (FR0010478453) rated 'A'; Outlook revised to Negative from Stable -- Class E (FR0010478479) rated 'BBB'; Outlook revised to Negative from Stable JUNO (Eclipse 2007-2): -- Class C (XS0299976836) rated 'A'; Outlook revised to Negative from Stable -- Class D (XS0299977057) rated 'BBB'; Outlook revised to Negative from Stable -- Class E (XS0299977131) rated 'BB'; Outlook revised to Negative from Stable LCP Proudreed Plc: -- Class C (XS0233010676) rated 'A'; Outlook revised to Negative from Stable -- Class D (XS0233011054) rated 'BBB'; Outlook revised to Negative from Stable LEO - MESDAG B.V.: -- Class D (XS0266642767) rated 'A'; Outlook revised to Negative from Stable -- Class E (XS0266644383) rated 'BBB'; Outlook revised to Negative from Stable London & Regional Debt Securitisation No. 2 (LoRDS 2): -- Class C (XS0262545402) rated 'AA-' (AA minus); Outlook revised to Negative from Stable Marlin (EMC-II) B.V.: -- Class D (XS0193659215) rated 'BBB'; Outlook revised to Negative from Stable MESDAG: -- Class D (XS0239252819) rated 'A'; Outlook revised to Negative from Stable -- Class E (XS0239254195) rated 'BBB'; Outlook revised to Negative from Stable -- Class F (XS0243930467) rated 'BBB'; Outlook revised to Negative from Stable MESDAG (Charlie) B.V.: -- Class C (XS0289823568) rated 'A'; Outlook revised to Negative from Stable -- Class D (XS0289824533) rated 'BBB'; Outlook revised to Negative from Stable -- Class E (XS0289824889) rated 'BBB-' (BBB minus); Outlook revised to Negative from Stable Mesdag (Delta) B.V.: -- Class C (XS0307576701) rated 'A'; Outlook revised to Negative from Stable -- Class D (XS0307578749) rated 'BBB'; Outlook revised to Negative from Stable -- Class E (XS0307580307) rated 'BBB-' (BBB minus); Outlook revised to Negative from Stable MESDAG (Echo) B.V.: -- Class A (XS0330725622) rated 'A-' (A minus); Outlook revised to Negative from Stable Morpheus (European Loan Conduit No. 19) plc: -- Class C (XS0198509431) rated 'A+'; Outlook revised to Negative from Stable -- Class D rated 'BBB'; Outlook revised to Negative from Stable -- Class E rated 'BB-' (BB minus); Outlook revised to Negative from Stable Nemus II (Arden) PLC: -- Class C (XS0278300727) rated 'AA'; Outlook revised to Negative from Stable -- Class D (XS0278301295) rated 'A'; Outlook revised to Negative from Stable -- Class E (XS0278301378) rated 'BBB'; Outlook revised to Negative from Stable -- Class F (XS0278301535) rated 'BB'; Outlook revised to Negative from Stable Opera Finance (CMH) p.l.c.: -- Class C (XS0241935195) rated 'A'; Outlook revised to Negative from Stable -- Class D (XS0241935609) rated 'BBB'; Outlook revised to Negative from Stable Opera Finance (CSC 3) PLC: -- Class C (XS0218956448) rated 'A'; Outlook revised to Negative from Stable -- Class D (XS0218957925) rated 'BBB'; Outlook revised to Negative from Stable Opera Finance (Lakeside) plc: -- Class C (XS0198555970) rated 'A'; Outlook revised to Negative from Stable Opera Finance (MEPC) plc: -- Class D (XS0234498979) rated 'A+'; Outlook revised to Negative from Stable Opera Finance (MetroCentre) PLC: -- Class C (XS0211550800) rated 'A'; Outlook revised to Negative from Stable -- Class D (XS0211551105) rated 'BBB'; Outlook revised to Negative from Stable Opera Finance (Scottish Retail) Plc: -- Class D (XS0217098325) rated 'A'; Outlook revised to Negative from Stable Opera Finance (Uni-Invest) B.V.: -- Class D (XS0218492279) rated 'BBB'; Outlook revised to Negative from Stable Opera Germany (No. 1) GmbH: -- Class C (XS0268817227) rated 'A'; Outlook revised to Negative from Stable -- Class D (XS0268817904) rated 'BBB'; Outlook revised to Negative from Stable Opera Germany (No.2) p.l.c.: -- Class C (XS0278493266) rated 'A'; Outlook revised to Negative from Stable -- Class D (XS0278493340) rated 'BBB'; Outlook revised to Negative from Stable -- Class E (XS0278493423) rated 'BBB-' (BBB minus); Outlook revised to Negative from Stable Paris Prime Commercial Real Estate FCC: -- Class C (FR0010382325) rated 'A'; Outlook revised to Negative from Stable Patrimonio Uno CMBS S.r.l.: -- Class F (IT0004078173) rated 'A'; Outlook revised to Negative from Stable Perseus (European Loan Conduit No. 22) plc: -- Class C (XS0235326203) rated 'A'; Outlook revised to Negative from Stable -- Class D (XS0235326542) rated 'BBB'; Outlook revised to Negative from Stable Prominent CMBS Funding No. 1 PLC: -- Class C (XS0234099256) rated 'AA'; Outlook revised to Stable from Positive -- Class D (XS0234154028) rated 'BBB'; Outlook revised to Negative from Stable -- Class E (XS0234154887) rated 'BB'; Outlook revised to Negative from Stable Prominent CMBS Conduit No.2 Limited: -- Class B (XS0303848815) rated 'AA'; Outlook revised to Negative from Stable -- Class C (XS0303849201) rated 'A'; Outlook revised to Negative from Stable -- Class D (XS0303849896) rated 'BBB'; Outlook revised to Negative from Stable -- Class E (XS0303850555) rated 'BBB'; Outlook revised to Negative from Stable -- Class F (XS0305344417) rated 'BBB-' (BBB minus); Outlook revised to Negative from Stable Quirinus (European Loan Conduit No. 23) plc: -- Class E (XS0259563624) rated 'BBB+'; Outlook revised to Negative from Stable -- Class F (XS0259564192) rated 'BBB+'; Outlook revised to Negative from Stable Radamantis (European Loan Conduit No. 24) plc: -- Class D (XS0263698945) rated 'AA'; Outlook revised to Negative from Stable -- Class E (XS0263700279) rated 'A'; Outlook revised to Negative from Stable -- Class F (XS0263700782) rated 'A-' (A minus); Outlook revised to Negative from Stable -- Class G (XS0263695172) rated 'BBB'; Outlook revised to Negative from Stable Rivoli - Pan Europe 1 plc: -- Class C (XS0278741771) rated 'A'; Outlook revised to Negative from Stable Sandwell Commercial Finance No.1 Plc: -- Class C (XS0191372522) rated 'A'; Outlook revised to Negative from Stable -- Class D (XS0191373686) rated 'BBB'; Outlook revised to Negative from Stable -- Class E (XS0191373926) rated 'BB'; Outlook revised to Negative from Stable Sandwell Commercial Finance No.2 Plc: -- Class C (XS0229030712) rated 'A'; Outlook revised to Negative from Stable -- Class D (XS0229031017) rated 'BBB'; Outlook revised to Negative from Stable -- Class E (XS0229031280) rated 'BB'; Outlook revised to Negative from Stable Sandwell Commercial Finance No.3 Limited : -- Class C (XS0357089100) rated 'A'; Outlook revised to Negative from Stable -- Class D (XS0357089365) rated 'BBB'; Outlook revised to Negative from Stable -- Class E (XS0357089951) rated 'BB'; Outlook revised to Negative from Stable STABILITY CMBS 2007-1 GmbH: -- Class C (DE000A0N3021) rated 'A'; Outlook revised to Negative from Stable -- Class D (DE000A0N3039) rated 'BBB'; Outlook revised to Negative from Stable -- Class E (DE000A0N3047) rated 'BB'; Outlook revised to Negative from Stable Starling (Supermarkets) plc: -- Class C (XS0274552552) rated 'AA+'; Outlook revised to Negative from Stable -- Class D (XS0274552800) rated 'A'; Outlook revised to Negative from Stable -- Class E (XS0274551232) rated 'BBB'; Outlook revised to Negative from Stable Tahiti Finance Plc: -- Class C (XS0233778884) rated 'A'; Outlook revised to Negative from Stable TALISMAN-1 Finance plc: -- Class D (XS0220379514) rated 'BBB+'; Outlook revised to Negative from Stable -- Class E (XS0220379787) rated 'BBB'; Outlook revised to Negative from Stable -- Class F (XS0220380017) rated 'BB+'; Outlook revised to Negative from Stable -- Class G (XS0220380363) rated 'BB'; Outlook revised to Negative from Stable TALISMAN - 3 Finance plc: -- Class C (XS0256115436) rated 'AA'; Outlook revised to Stable from Positive -- Class D (XS0256115865) rated 'BBB'; Outlook revised to Negative from Positive -- Class E (XS0256116327) rated 'BB'; Outlook revised to Negative from Positive -- Class F (XS0256116673) rated 'B'; Outlook revised to Negative from Stable TALISMAN-4 Finance plc: -- Class B (XS0263098161) rated 'AA'; Outlook revised to Stable from Positive -- Class C (XS0263098914) rated 'A'; Outlook revised to Negative from Stable -- Class D (XS0263099722) rated 'BBB'; Outlook revised to Negative from Stable -- Class E (XS0263100835) rated 'BBB-' (BBB minus); Outlook revised to Negative from Stable -- Class F (XS0263101304) rated 'BB'; Outlook revised to Negative from Stable -- Class G (XS0263101569) rated 'B'; Outlook revised to Negative from Stable TALISMAN - 5 Finance plc: -- Class C (XS0278334973) rated 'A'; Outlook revised to Negative from Stable -- Class D (XS0278335277) rated 'BBB'; Outlook revised to Negative from Stable -- Class E (XS0278335863) rated 'BBB-' (BBB minus); Outlook revised to Negative from Stable TALISMAN-7 Finance Ltd: -- Class C (XS0304911224) rated 'A'; Outlook revised to Negative from Stable -- Class D (XS0304911901) rated 'A'; Outlook revised to Negative from Stable -- Class E (XS0304912388) rated 'BBB'; Outlook revised to Negative from Stable -- Class F (XS0304912891) rated 'BBB'; Outlook revised to Negative from Stable Taurus CMBS No. 1 plc: -- Class E (XS0210824818) rated 'BBB'; Outlook revised to Negative from Stable -- Class F (XS0210825542) rated 'BBB'; Outlook revised to Negative from Stable TAURUS CMBS No. 2 S.r.l.: -- Class C (IT0003957021) rated 'AA'; Outlook revised to Stable from Positive -- Class D (IT0003957039) rated 'A+'; Outlook revised to Stable from Positive -- Class E (IT0003957047) rated 'A-' (A minus); Outlook revised to Stable from Positive -- Class F (IT0003957054) rated 'BBB'; Outlook revised to Negative from Stable -- Class G (IT0003957062) rated 'BBB-' (BBB minus); Outlook revised to Negative from Positive Taurus CMBS (Germany) 2006-1 plc: -- Class C (XS0257715242) rated 'A'; Outlook revised to Negative from Stable -- Class D (XS0257715838) rated 'BBB'; Outlook revised to Negative from Stable Taurus CMBS (UK) 2006-2 P.L.C.: -- Class B (XS0271523259) rated 'AA'; Outlook revised to Negative from Stable -- Class C (XS0271523846) rated 'A'; Outlook revised to Negative from Stable -- Class D (XS0271524653) rated 'BBB'; Outlook revised to Negative from Stable Taurus CMBS (Pan-Europe) 2006-3 Plc: -- Class C (XS0274570372) rated 'A'; Outlook revised to Negative from Stable -- Class D (XS0274570703) rated 'BBB'; Outlook revised to Negative from Stable Taurus CMBS (Pan-Europe) 2007-1 Limited : -- Class C (XS0305745597) rated 'A'; Outlook revised to Negative from Stable -- Class D (XS0305746215) rated 'BBB'; Outlook revised to Negative from Stable -- Class E (XS0309195567) rated 'BBB'; Outlook revised to Negative from Stable -- Class F (XS0309195997) rated 'BBB'; Outlook revised to Negative from Stable Titan Europe 2006-2 plc: -- Class E (XS0254358004) rated 'A'; Outlook revised to Negative from Stable -- Class F (XS0254358699) rated 'BBB'; Outlook revised to Negative from Stable Titan Europe 2006-3 plc: -- Class D (XS0257769769) rated 'A'; Outlook revised to Negative from Stable -- Class E (XS0257770007) rated 'BBB'; Outlook revised to Negative from Stable -- Class F (XS0257770775) rated 'BBB-' (BBB minus); Outlook revised to Negative from Stable Titan Europe 2006-5 plc: -- Class C (XS0277729439) rated 'A'; Outlook revised to Negative from Stable -- Class D (XS0277732144) rated 'BBB'; Outlook revised to Negative from Stable -- Class E (XS0277733548) rated 'BBB-' (BBB minus); Outlook revised to Negative from Stable -- Class F (XS0277734199) rated 'BB'; Outlook revised to Negative from Stable Titan Europe 2007-2 limited: -- Class C (XS0302917512) rated 'A'; Outlook revised to Negative from Stable -- Class D (XS0302917868) rated 'BBB'; Outlook revised to Negative from Stable Ursus 2 (Octane) plc: -- Class B (XS0259731270) rated 'AA+'; Outlook revised to Negative from Stable -- Class C (XS0259731353) rated 'AA'; Outlook revised to Negative from Stable -- Class D (XS0259731437) rated 'AA-' (AA minus); Outlook revised to Negative from Stable -- Class E (XS0259731510) rated 'A+'; Outlook revised to Negative from Stable -- Class F (XS0259731783) rated 'A'; Outlook revised to Negative from Stable Vanwall Finance plc: -- Class C (XS0242558913) rated 'AA'; Outlook revised to Negative from Stable -- Class D (XS0242559994) rated 'A'; Outlook revised to Negative from Stable -- Class E (XS0242561032) rated 'BBB'; Outlook revised to Negative from Stable -- Class F (XS0242561891) rated 'BBB-' (BBB minus); Outlook revised to Negative from Stable Victoria Funding (EMC V) Plc: -- Class B (XS0266990455) rated 'AA'; Outlook revised to Negative from Stable -- Class C (XS0266991420) rated 'A'; Outlook revised to Negative from Stable -- Class D (XS0266992584) rated 'BBB'; Outlook revised to Negative from Stable Victoria Funding (EMC-III) plc: -- Class D (XS0231023077) rated 'BBB'; Outlook revised to Negative from Stable -- Class E (XS0231024802) rated 'BB'; Outlook revised to Negative from Stable Vulcan (European Loan Conduit No.28) Ltd : -- Class D (XS0314740944) rated 'A'; Outlook revised to Negative from Stable White Tower Europe 2007-1: -- Class C (XS0300056271) rated 'A'; Outlook revised to Negative from Stable -- Class D (XS0300056354) rated 'BBB'; Outlook revised to Negative from Stable -- Class E (XS0300056511) rated 'BB'; Outlook revised to Negative from Stable Windermere XI CMBS Plc: -- Class B (XS0311592298) rated 'AA'; Outlook revised to Negative from Stable Xuthus (European Loan Conduit No. 29): -- Class C (XS0332860237) rated 'A'; Outlook revised to Negative from Stable * Fitch Reports Decline in European Commercial Property Values -------------------------------------------------------------- In a new report, Fitch Ratings says that the continuing decline in European commercial property values, particularly in the UK, has highlighted the issues surrounding loan-to-value ratio covenants in some European commercial mortgage-backed securities transactions. Of particular interest is the role of the servicer in testing such covenants and executing remedial action following a breach, which the agency notes is proving challenging in some cases. "Covenants clearly provide a basis for servicers to take prompt enforcement action in full compliance with the servicing standard. However, the speed at which commercial property markets has fallen in value may cause some servicers to fear that testing LTV covenants may reveal not only breaches, but also positions of negative equity. If negative equity is discovered, this may leave servicers few options outside acceleration and liquidation of a loan even if the loan is technically performing," says Edward Register, Head of Fitch's European Structured Finance Operational Risk Group. The presumption that property values may begin to stabilize and improve prior to a monetary event of default or final maturity of a loan may explain the hesitancy of some servicers to revalue assets and test LTV covenants. However, Fitch believes this may pose a greater risk to a transaction and even servicers. Because of the level of discretion associated with covenants, the agency's rating analysis gives no formal credit to their inclusion in loan documentation. "While a number of European CMBS loans have recently fallen in breach of their LTV covenants, this is not sufficient to warrant negative rating action. However, not testing, and therefore not curing the covenant breach, may ultimately affect transaction performance. Prompt and effective servicer action could be key to mitigating the threat or severity of potential downgrades," says Euan Gatfield, Senior Director in Fitch's European CMBS team. * S&P Says European Auto ABS Indices Delinquency Rates Up in 3Q08 ----------------------------------------------------------------- Overall delinquency rates in Standard & Poor's Ratings Services' European auto ABS indices have displayed a moderate increase during Q3 2008 compared with their levels at the end of Q2, with Spanish 90+ day delinquencies continuing to increase, according to its latest index report. "In Spain, since the start of the year, S&P has noted a steeper increase in arrears than previously observed," said credit analyst Filippo Boninsegna. "Given the current Spanish macroeconomic environment, S&P believes this growth will continue ever more rapidly, potentially putting the ratings on some junior notes under pressure." In other jurisdictions, delinquencies in auto asset-backed securities remain fairly stable and several positive rating actions reflect the seasonality and the good performance of the collateral. Loans more than 90 days in arrears were 1.06% in September 2008, 22 basis points higher than the level recorded at the end of Q2. The current level of delinquencies broadly reflects the general deterioration in the economic scenario. S&P believes that any further signs of deterioration, such as further increases in the unemployment rate, will most likely be reflected in additional increases in the level of delinquencies and eventually losses. Outstanding ratings remain broadly stable. Since the beginning of the year S&P has upgraded notes in five deals and downgraded notes in four. One deal has its notes on CreditWatch positive. S&P rated two new transactions during Q3 with a total issued amount of EUR1.96 billion. Both transactions were originated in Germany, Driver Six GmbH by VW Bank and AUTO ABS COMPARTIMENT 2008-1 by Banque PSA Finance. * Big 3 Get UAW's OK on Healthcare Payment Delays & Jobs Bank Cuts ------------------------------------------------------------------ Sharon Terlep at Dow Jones Newswires reports that the United Auto Workers President Ron Gettelfinger said on Wednesday that the union will let General Motors Corp., Chrysler LLC, and Ford Motor Co. delay payments into a health-care trust and terminate the jobs bank program for laid-off employees, to help the companies in their plea for government loans. As reported in the Troubled Company Reporter on Dec. 3, 2008, UAW scheduled an emergency meeting on Dec. 3 to discuss what role the union should play in helping GM, Ford Motor, and Chrysler become more viable companies. According to Dow Jones, the UAW decided to revise its 2007 contracts with GM, Chrysler, and Ford Motor to help reduce costs. Union leaders are able to suspend the jobs bank and postpone payments to the health-care trust without renegotiating the labor contract, the report states, citing Mr. Gettelfinger. The union, says the report, will have to form bargaining committees and start talks with the companies for further changes. Dow Jones relates that the health-care trust, or VEBA, is considered as a key component of the firms' efforts to lessen labor obligations. It was scheduled to start paying benefits to retirees beginning Jan. 1, 2010, but the automakers are running short of cash and would likely fail to secure the billions of dollars needed to initially fund the trust, states the report. The jobs bank program, Dow Jones reports, provides laid-off employees with most of their pay and benefits. The program has "shrunk dramatically," Dow Jones says, citing Mr. Gettelfinger. The report states that GM and Ford have reduced their jobs banks by almost 80,000 workers in recent years. GM, Ford Motor, and Chrysler currently have about 3,500 workers in the jobs bank, according to the report. UAW will launch an ad campaign in support of GM, Ford Motor, and Chrysler, Dow Jones relates. Other countries are also being asked to extend support to their auto industries, the report states, citing Mr. Gettelfinger. Chrysler's Short-Term & Long-Term Viability Plan Chrysler LLC Chairperson and CEO Bob Nardelli will wrap up a series of "Virtual Road Show" events with an actual road trip to Washington, D.C. Chrysler confirmed that the company's top executive would drive a fuel-efficient hybrid vehicle to this week's Senate and House hearings. Mr. Nardelli and other Chrysler executives will spend the early part of this week in discussions with a broad mix of affected stakeholders. The company is calling the grassroots public relations push a "Virtual Road Show," with initiatives spread across seven states in a three-day period. The meetings and initiatives are being organized by a number of groups and organizations to help develop an awareness of the integral role U.S. auto makers play in the nation's economy and national security as well as why the temporary financial assistance provided by a bridge loan is critical to Chrysler and the industry. Chrysler Executive Director of Communications Lori McTavish said, "Our goal is to meet with stakeholders to discuss the U.S. auto industry's impact on their districts." Chrysler will use the government loan to support ongoing operations as the company continues to restructure the business, including in the first quarter: -- US$8.0 billion in payments to parts suppliers US$1.2 billion for other vendors, -- US$900 million in wages, -- US$500 million in healthcare and legacy costs, and -- US$500 million in capital expenditures. Mr. Nardelli will receive a salary of US$1 a year. He has no employment contract, no change of control agreement, "golden parachute," and no health care or life insurance benefits from the company. The company will negotiate concessions from all of our constituents. Chrysler's product plan features 24 major launches from 2009 through 2012. For the 2009 model year, 73% of Chrysler products will offer improved fuel economy compared to 2008 models. The company will launch additional small, fuel-efficient vehicles. Chrysler's product plan includes the introduction of the Ram Hybrid and its first electric-drive vehicle in 2010 with three additional models by 2013. Mr. Nardelli believes that further partnership, restructuring and consolidation would make the U.S. auto industry even more viable and competitive in the long run. Further opportunities for technology sharing would provide fuel-efficient cars and trucks more cost effectively and faster to market. The three-company alliance that developed the dualmode hybrid is a good example. Chrysler believes that it will be well-positioned to begin repayment of the federal loans in 2012. Details on Chrysler's Plan is available at: http://ResearchArchives.com/t/s?35b1 Gov't Facilitated Pre-packaged Bankruptcy The Deal Journal relates that while Ford Motor, GM, and Chrysler continue to rule out filing for bankruptcy, Congress members and their staffers have been meeting privately with bankruptcy experts and bankers to understand the mechanics and costs of a pre- packaged bankruptcy. According to The Deal, Senate Minority Whip Jon Kyl said he has spoken to colleagues who said that they would be open to the government facilitating a pre-packaged bankruptcy for one or more of the three struggling Detroit companies. The Deal states that Sen. Kyl said that he supports a plan for the government to provide financing, while creating an account that would ensure warrantees for owners of cars made by firms in bankruptcy court. The deal quoted Sen. Kyl as saying, "I'd be happy next week to pass a bill that said for any of these three companies that go through Chapter 11, we will provide a certain amount of DIP [debtor-in-possession] financing" and money to backstop for car warrantees. Matthew Dolan and Josh Mitchell at The Wall Street Journal relate that Ford Motor CEO Alan Mulally expressed concern on the fates of GM and Chrysler, after the submission of the three company's restructuring plans to the congress. Mr. Mulally told WSJ during an interview in Washington, that he was worried about the financial health of GM and Chrysler after the two companies told the Congress that they needed the immediate infusion of cash to survive. As reported in the Troubled Company Reporter on Dec. 3, 2008, Ford Motor said in its 33-page turnaround plan that it doesn't need federal funds immediately and that it is asking for a US$9 billion line of credit to be available in case the recession would be longer and deeper than expected. * BOOK REVIEW: How To Measure Managerial Performance ---------------------------------------------------- Author: Richard S. Sloma Publisher: Beard Books Paperback: 272 pages List Price: $34.95 Order your personal copy at: http://www.amazon.com/exec/obidos/ASIN/1893122646/internetbankrupt How to Measure Managerial Performance by Richard S. Sloma is a valuable reference tool. This practical handbook provides new insights into enterprising management techniques. This book is a compendium of principles and techniques to improve and measure managerial performance in a number of areas important to the successful operation of a business. Rigorous application of the concepts of this instructive book will enable an organization to perform at several levels higher in efficiency and effectiveness. ********* 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 * * *