/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/081229.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 Monday, December 29, 2008, Vol. 9, No. 256 Headlines A U S T R I A ASSINGER LLC: Claims Registration Period Ends January 5 B&Z RUPACHER: Claims Registration Period Ends January 5 K & G LLC: Claims Registration Period Ends January 5 K&M&B LLC: Claims Registration Period Ends January 5 KOCH LLC: Claims Registration Period Ends January 5 KOCH & PARTNER: Claims Registration Period Ends January 5 L.S.P. LLC: Claims Registration Period Ends January 5 C Z E C H R E P U B L I C KEY PLASTICS: Gets Interim Access to US$7MM Wayzata DIP Facility G E R M A N Y ADVANCED MULTIMEDIA: Claims Registration Period Ends January 21 AVENUE OSTEUROPA: Moody's Withdraws All Ratings BB-KRANSERVICE GMBH: Claims Registration Period Ends January 23 CONTINENTAL AG: EU Approves Proposed Acquisition by Schaeffler GESPENSTERSCHLOSS FILMPRODUKTION: Claims Period Ends Jan. 26 GLOBAL NETWORKS: Claims Registration Period Ends January 27 IKB DEUTSCHE: EU Commission Approves German Support Scheme NORDLB: EU Commission Approves German Banking Rescue Aid PREMIERE AG: Reaches Long-Term Financing Deal with News Corp STUMPF KINOTECHNIK: Claims Registration Period Ends January 21 TECHNIC HOUSE: Claims Registration Period Ends January 23 I C E L A N D DECODE GENETICS: Terrance McGuire Resigns from Board of Directors I R E L A N D FORNAX ECLIPSE: S&P Downgrades Rating on Two Note Classes to Low-B MAGNOLIA FINANCE: Moody's Lowers Rating on JPY1 Bil. Notes to 'C' MODERN KITCHENS: Goes Into Examinership; Struggles to Repay Loan * IRELAND: Unveils Recapitalization Measures for Three Banks I T A L Y CORDUSIO SME: S&P Puts Low-B Ratings on EUR337.6MM Floating Notes * ITALY: EC Approves Aid Scheme for Financial Institutions K A Z A K H S T A N KOUNRAD LLP: Proof of Claim Deadline Slated for February 5 MEDIUS-M LLP: Creditors Must File Claims by February 5 SAMARSKOYE-OIL WEST: Claims Filing Period Ends February 10 SI VRES LTD: Creditors' Claims Due on February 5 K Y R G Y Z S T A N ESKARO-STROY LLC: Creditors Must File Claims by February 12 L A T V I A * LATVIA: EU Commission Approves Support Scheme for Banks * LATVIA: EU to Provide Financial Assistance of Up to EUR3.1 Bln L U X E M B O U R G AQUARIUS + INVESTMENTS: Moody's Withdraws Caa1 EUR10MM Note Rating ORCO PROPERTY: Moody's Withdraws 'Caa1' Corporate Family Rating N O R W A Y NEMI FORSIKRING: W.R. Berkley Terminates Acquisition Talks NEMI FORSIKRING: S&P Maintains 'BB' Insurer Strength Rating R U S S I A AOEIE IRKUTSKENERGO: Moody's Cuts Corp. Family Rating to 'B3' BALTIKSTRYDOM PLUS: Bankruptcy Hearing Set February 24 FORD MOTOR: St. Petersburg Plant Halts Production HOME CREDIT: Moody's Changes Outlook on 'D-' BFSR to Negative KANSKAYA TABACCO: Bankruptcy Hearing Set January 13 KVANT LLC: Creditors Must File Claims by January 19 MOSTRANSAVTO: S&P Downgrades Long-Term Issuer Rating to 'SD' OMZ OAO: S&P Suspends 'CCC+' Long-Term Corporate Credit Rating RUSSIAN FACTORING: S&P Cuts Ratings on 2 Classes of Notes to Low-B SIBIR-LES LLC: Creditor Must File Claims by January 19 SOV-TEKH-STROY LLC: Bankruptcy Hearing Set March 12 STINGART LLC: Moskovskaya Bankruptcy Hearing Set February 26 TRANS-STROY-INVEST CJSC: Creditors Must File Claims by Feb. 19 URALSKIY LES: Court Names Temporary Insolvency Manager * MOSCOW OBLAST: Moody's Downgrades Currency Ratings to 'B3' * OMSK CITY: S&P Withdraws 'B-' Long-Term Issuer Rating * TVER OBLAST: S&P Puts 'BB- Issuer Rating on CreditWatch Negative S P A I N CAJA DE AHORROS: S&P Junks Ratings on Two Classes of Notes * SPAIN: EC Approves Guarantee Scheme for Credit Institutions S W E D E N FORD MOTOR: Moody's Downgrades Senior Unsecured Rating to 'Caa1' FORD MOTOR: Moody's Downgrades CFR to 'Caa3'; Outlook Negative GENERAL MOTORS: S&P Won't Raise Credit Rating Above CCC on Loans GENERAL MOTORS: S&P Downgrades Issue-Level Rating to 'C' S W I T Z E R L A N D GENERAL MOTORS: Court Cuts Legal Fees in Investors Settlement MINJAN JSC: Creditors Must File Proofs of Claim by Jan. 1 ROCHE ADVISER: Deadline to File Proofs of Claim Set Jan. 1 TRIDENT HOLDING: Creditors Have Until Jan. 1 to File Claims VORICO JSC: Proofs of Claim Filing Deadline is Jan. 1 U K R A I N E AGRO-PROGRESS LLC: Creditors Must File Claims by January 7 DOKPHARM LLC: Creditors Must File Claims by January 7 DONBASS MECHANICAL: Creditors Must File Claims by January 7 INTERPIPE LTD: S&P Downgrades Corporate Credit Rating to 'SD' KHARKOV TRACTOR: Creditors Must File Claims by January 7 LVOV INSTRUMENTS: Creditors Must File Claims by January 7 PIUK LTD: Creditors Must File Claims by January 7 TECHNOTON LLC: Creditors Must File Claims by January 7 TENDER GROUP: Creditors Must File Claims by January 7 UKRAINIAN PAPER: Creditors Must File Claims by January 7 U N I T E D K I N G D O M ARLO X: Moody's Cuts Rating on EUR10.5 Million Notes to 'Caa1' BATHSIDE BAY: Appoints Joint Liquidators from Ernst & Young BOOTH IMPERIAL: Taps Joint Liquidators from BDO Stoy Hayward BRITISH AIRWAYS: Orders 11 New Generation Fuel Efficient Aircraft BRITISH ENERGY: EU Clears Proposed Acquisition by France's EdF CLARIS LIMITED: Moody's Downgrades Ratings on Two Series of Notes ELDON STREET: Appoints Joint Administrators from PwC ENVOLVE PARTNERSHIPS: Taps Joint Liquidators from Baker Tilly EXCEL CAFE: Names Joint Administrators from Tenon Recovery HIVEMEAD LTD: Taps Joint Administrators from PKF MADOFF SECURITIES: Grant Thornton Named Provisional Liquidator NEMUS II: S&P Downgrades Rating on Class F Notes to 'BB' OFFICERS CLUB: TimeC Buys 118 Stores; 1000 Jobs Secured ORCHID GROUP: 31 Pubs Sold to Spirit Group; 14 Pubs Closed TAYLOR WIMPEY: Covenant Testing Date Deferred Until March 31 WHITTARD OF CHELSEA: In Administration; Assets Sold to EPIC XELO IV: Moody's Cuts Rating on EUR10.5 Million Notes to 'Caa1' XSTRATA PLC: May Breach Debt Covenants as Coal Prices Tumble ZAVVI UK: Goes Into Administration Following Supplier's Collapse * UK: EC Okays Changes to Banking Financial Support Measures * BOND PRICING: For the Week Dec. 22 to Dec. 26, 2008 ********* ============= A U S T R I A ============= ASSINGER LLC: Claims Registration Period Ends January 5 ------------------------------------------------------- Creditors owed money by LLC Assinger (FN 227169y) have until Jan. 5, 2009, to file written proofs of claim to the court- appointed estate administrator: Dr. Stephan Medwed Sterneckstrasse 43 9020 Klagenfurt Austria Tel: 0463/55 120 Fax: 0463/55120-31 E-mail: stephan.medwed@medwed.at Creditors and other interested parties are encouraged to attend the creditors' meeting at 9:00 a.m. on Jan. 12, 2009, for the examination of claims at: Land Court of Klagenfurt Room 225 Klagenfurt Austria Headquartered in St. Margareten im Rosental, Austria, the Debtor declared bankruptcy on Nov. 20, 2008, (Bankr. Case No. 41 S 117/08s). B&Z RUPACHER: Claims Registration Period Ends January 5 ------------------------------------------------------- Creditors owed money LLC B&Z Rupacher (by FN 277294k) have until Jan. 5, 2009, to file written proofs of claim to the court- appointed estate administrator: Thomas Schuster Bamberger Strasse 5 9400 Wolfsberg Austria Tel: 04352/36 300 Fax: 04352/36300-6 E-mail: office@juri-schuster.at Creditors and other interested parties are encouraged to attend the creditors' meeting at 9:45 a.m. on Jan. 12, 2009, for the examination of claims at: Land Court of Klagenfurt Room 225 Klagenfurt Austria Headquartered in Karnten, Austria, the Debtor declared bankruptcy on Nov. 20, 2008, (Bankr. Case No. 41 S 118/08p). K & G LLC: Claims Registration Period Ends January 5 ---------------------------------------------------- Creditors owed money by LLC K & G (FN 300386w) have until Jan. 5, 2009, to file written proofs of claim to the court-appointed estate administrator: Dr. Herbert Hochegger Brucknerstrasse 4/5 1040 Wien Austria Tel: 505 78 61 Fax: 505 78 61-9 E-mail: eder@rechtsanwaelte.co.at Creditors and other interested parties are encouraged to attend the creditors' meeting at 9:45 a.m. on Jan. 19, 2009, for the examination of claims at: Trade Court of Vienna Room 1705 Vienna Austria Headquartered in Vienna, Austria, the Debtor declared bankruptcy on Nov. 20, 2008, (Bankr. Case No. 3 S 133/08s). K&M&B LLC: Claims Registration Period Ends January 5 ---------------------------------------------------- Creditors owed money by LLC K&M&B (FN 289702h) have until Jan. 5, 2009, to file written proofs of claim to the court-appointed estate administrator: Dr. Georg Unger Mariahilfer Strasse 50 1070 Wien Austria Tel: 523 62 00 Serie Fax: 526 72 74 E-mail: schulyok-unger@csg.at Creditors and other interested parties are encouraged to attend the creditors' meeting at 10:15 a.m. on Jan. 19, 2009, for the examination of claims at: Trade Court of Vienna Room 1705 Vienna Austria Headquartered in Vienna, Austria, the Debtor declared bankruptcy on Nov. 21, 2008, (Bankr. Case No. 3 S 139/08y). KOCH LLC: Claims Registration Period Ends January 5 --------------------------------------------------- Creditors owed money by LLC Koch (FN 35174b) have until Jan. 5, 2009, to file written proofs of claim to the court-appointed estate administrator: Dr. Thomas Zeitler 4020 Linz Austria Tel: 0732-775544-11 Fax: 0732-775544-10 E-mail: insolvenz@bzp.at Creditors and other interested parties are encouraged to attend the creditors' meeting at 11:50 a.m. on Jan. 19, 2009, for the examination of claims at: Land Court of Linz Room 522 Linz Austria Headquartered in Steyregg, Austria, the Debtor declared bankruptcy on Nov. 18, 2008, (Bankr. Case No. 12 S 100/08f). KOCH & PARTNER: Claims Registration Period Ends January 5 --------------------------------------------------------- Creditors owed money by LLC Koch & Partner (FN 242936i) have until Jan. 5, 2009, to file written proofs of claim to the court- appointed estate administrator: Dr. Thomas Zeitler Eisenhandstrasse 15 4020 Linz Austria Tel: 0732-775544-11 Fax: 0732-775544-10 E-mail: insolvenz@bzp.at Creditors and other interested parties are encouraged to attend the creditors' meeting at 11:30 a.m. on Jan. 19, 2009, for the examination of claims at: Land Court of Linz Room 522 Linz Austria Headquartered in Steyregg, Austria, the Debtor declared bankruptcy on Nov. 18, 2008, (Bankr. Case No. 12 S 98/08m). L.S.P. LLC: Claims Registration Period Ends January 5 ----------------------------------------------------- Creditors owed money by LLC L.S.P. (FN 289813x) have until Jan. 5, 2009, to file written proofs of claim to the court-appointed estate administrator: Dr. Christiane Pirker Hasenhutgasse 9 Haus 3 1120 Wien Austria Tel: 817 57 57, 817 57 67 Fax: 817 57 55 17 E-mail: Dr.Christiane.Pirker@chello.at Creditors and other interested parties are encouraged to attend the creditors' meeting at 9:30 a.m. on Jan. 19, 2009, for the examination of claims at: Trade Court of Vienna Room 1705 Vienna Austria Headquartered in Vienna, Austria, the Debtor declared bankruptcy on Nov. 20, 2008, (Bankr. Case No. 3 S 137/08d). ========================== C Z E C H R E P U B L I C ========================== KEY PLASTICS: Gets Interim Access to US$7MM Wayzata DIP Facility ---------------------------------------------------------------- The Hon. Mary F. Walrath of the United States Bankruptcy Court for the District of Delaware authorized Key Plastics LLC and Key Plastics Finance Corp. to access, on an interim basis, up to US$7 million in postpetition financing under the secured superpriority debtor-in-possession financing agreement dated Dec. 15, 2008, with a group of financial institutions led by Wayzata Investment Partners LLC, as administrative and collateral agent. Judge Walrath also authorized the Debtors to use cash collateral securing repayment of secured loan to the lender. Wayzata Investment agreed to provide as much as US$20 million in financing on a final basis. Under the agreement, the loan will incur interest at 15% and the default rate is interest rate plus 2% per annum. The DIP agreement will mature on the earlier to occur of -- Feb. 28, 2009, unless extended by the lenders; or -- the effective date of any confirmed plan of reorganization. The DIP facility is subject to a US$500,000 carve-out to pay fees and expenses incurred by professionals. To secure their DIP obligations, the lenders will be granted superpriority claim against the Debtors with priority over any and all administrative expenses. The DIP agreement contains customary and appropriate events of default. A full-text copy of the Secured Superpriority Debtor-in-Possession Financing Agreement dated Dec. 15, 2008, is available for free at http://ResearchArchives.com/t/s?36ad A full-text copy of the Collateral Agreement is available for free at http://ResearchArchives.com/t/s?36ae A full-text copy of the Guaranty Agreement is available for free at http://ResearchArchives.com/t/s?36af About Key Plastics Headquartered in Northville, Michigan, Key Plastics LLC aka Key Plastics Technology LLC -- http://www.keyplastics.com-- supply plastic components to the automotive industry. The Debtors have 24 manufacturing facilities located in the United States, Canada, Mexico, Germany, Portugal, Spain, the Czech Republic, France, Slovakia, Italy and China. According to Bloomberg News, the company filed for bankruptcy in March 23, 2000, in Detroit and emerged a year later under the ownership of private-equity firm Carlyle, Bloomberg said. The company and Key Plastics Finance Corp. filed for Chapter 11 protection on December 15, 2008 (Bankr. D. Del. Case Nos. 08-13326 and 08-13324). Mark D. Collins, Esq., Richards Layton & Finger PA, represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed assets and debts between US$100 million to US$500 million each. ============= G E R M A N Y ============= ADVANCED MULTIMEDIA: Claims Registration Period Ends January 21 --------------------------------------------------------------- Creditors of Advanced Multimedia Trading and Service GmbH have until Jan. 21, 2009, to register their claims with court-appointed insolvency manager. Creditors and other interested parties are encouraged to attend the meeting at 10:35 a.m. on March 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 Potsdam Hall 24 Justice Center Jagerallee 10 - 12 14469 Potsdam 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: Sebastian Laboga Einemstrasse 24 10785 Berlin Germany The District Court opened bankruptcy proceedings against the company on Dec. 16, 2008. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: Advanced Multimedia Trading and Service GmbH Sperlingshof 34 14624 Dallgow Germany Attn: Manfred Otto, Manager Lotzkat Sandstrasse 47 13593 Berlin Germany AVENUE OSTEUROPA: Moody's Withdraws All Ratings ----------------------------------------------- Moody's Investors Service has withdrawn all ratings assigned to Avenue Osteuropa GmbH, including the corporate family rating of Caa2. At the same time, Moody's Interfax Rating Agency, which is majority owned by Moody's withdrew the national scale rating of B2.ru. Avenue does not have any outstanding notes rated by Moody's. Moody's has withdrawn this rating for business reasons. Moody's last rating action on Avenue took place 19 December, 2008 when the agency downgraded the corporate family rating to Caa2 from B3 and the national scale rating to B2.ru from Baa2.ru with negative outlook. Avenue Group is a contractor for large-scale complex buildings as well as a residential and commercial real estate developer and investor in Moscow city center and its regions. The company's unaudited accounts reported total revenues of approximately RUR3.7 billion and total assets of RUR20.4 billion as at December 31, 2007. BB-KRANSERVICE GMBH: Claims Registration Period Ends January 23 --------------------------------------------------------------- Creditors of BB-Kranservice GmbH have until Jan. 23, 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. 13, 2009, at which time the insolvency manager will present his first report. The meeting of creditors will be held at: The District Court of Bielefeld Hall 4065 Fourth Floor Gerichtstrasse 66 33602 Bielefeld 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: Hans-Peter Burghardt Bunsenstr. 3 32052 Herford Germany The District Court opened bankruptcy proceedings against the company on Dec. 16, 2008. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: BB-Kranservice GmbH Junkerstr. 19-23 32257 Buende Germany Attn: Franciscus Ludovicus Aertsen, Manager Everdijkruis 7 BEL-2990 Wuustwezel Germany CONTINENTAL AG: EU Approves Proposed Acquisition by Schaeffler -------------------------------------------------------------- The European Commission has cleared under the EU Merger Regulation the proposed acquisition of Continental AG, a German manufacturer of car components, by Schaeffler KG, also of Germany. After examining the operation, the Commission concluded that the transaction would not significantly impede effective competition in the European Economic Area (EEA) or any substantial part of it. Schaeffler is a manufacturer of a great number of mainly mechanical products used in automotive, industrial and aerospace applications. Continental supplies electrical products and systems to the car industry. Continental also manufactures industrial rubber products. The parties' activities do not overlap but to a minor extent their activities are vertically related, as Schaeffler supplies needle roller bearings which are used in vehicle components produced by Continental. However, the Commission's investigation found that the merged entity would not have the ability to discriminate against its competitors in this market, as there are credible alternative suppliers and needle roller bearings represent only a small cost factor. The Commission also carefully examined the potential conglomerate issues and found that there would be no negative impact on effective competition resulting from the combination of Schaeffler and Continental in the supply of components for belt drive systems and transmission systems. In a press statement on December 19, Schaeffler said it will now conclude the takeover without delay. It will pay EUR75 per share to the depositary banks of those shareholders who have tendered their shares to Schaeffler, on or around January 8, 2009. The depositary banks will then credit these payments to the shareholders' accounts. "The takeover of Continental AG is a decision of far-reaching strategic importance for the Schaeffler Group. With Schaeffler and Continental we're bringing together two excellently positioned German technology leaders. This merger will create one of the most successful global automotive suppliers with outstanding expertise in the high-growth fields of energy efficiency and alternative powertrain systems. It is our target to spearhead the global market," emphasized Dr. Juergen M. Geissinger, Schaeffler Group President & CEO. "The difficult current market situation shows that it was the right decision to bring together two leading international automotive suppliers. In view of the massive changes in our environment it is necessary to rapidly combine the strengths of both companies in the automotive sector and to exploit synergies resulting from new products, processes and in the purchasing sector without delay. This is the order of the day and we have to comply with it to be able to emerge from the crisis with clearly renewed strength and develop joint performance capacity in order to create new, future-proof products and solutions," said Dr. Geissinger. The shares tendered for sale can be traded up until January 2, 2009. Headquartered in Hanover, Germany, Continental AG (OTC:CTTAY) -- http://www.conti-online.com/-- is an automotive industry supplier. The Company focuses its activities on the development, production and distribution of products that improve driving safety, driving dynamics and ride comfort. It operates in six main divisions. Chassis and Safety provides active and passive driving safety, safety and chassis sensor systems, as well as chassis components. Powertrain offers gasoline and diesel systems, actuators, motor drives and fuel supply, as well as hybrid electric vehicles systems. Interior manufactures information management modules and wireless mobile devices. Passenger and Light Truck Tires provides tires for passenger cars, light trucks, motorcycles and bicycles. Commercial Vehicle Tires offers tires for trucks, as well as industrial and off-the-road vehicles. ContiTech specializes in the rubber and plastics technology, offering functional parts, components and systems for the automotive industry and other sectors. * * * As reported in the TCR-Europe on Dec. 17, 2008, Fitch Ratings downgraded Continental AG's Long-term Issuer Default and senior unsecured ratings to 'BB+' from 'BBB-' (BBB minus) and its Short- term IDR to 'B' from 'F3'. The Long-term IDR and senior unsecured ratings have been placed on Rating Watch Negative. GESPENSTERSCHLOSS FILMPRODUKTION: Claims Period Ends Jan. 26 ------------------------------------------------------------ Creditors of Gespensterschloss Filmproduktion GmbH have until Jan. 26, 2009, to register their claims with court-appointed insolvency manager. Creditors and other interested parties are encouraged to attend the meeting at 10:55 a.m. on Feb. 23, 2009, at which time the insolvency manager will present his first report. The meeting of creditors will be held at: The District Court of Hamburg Hall B 405 Fourth Floor Annex Civil Justice Bldg. Sievkingplatz 1 20355 Hamburg Germany Claims set out in the insolvency manager's report will be verified by the court during this meeting. Creditors may also constitute a creditors' committee or opt to appoint a new insolvency manager. The insolvency manager can be reached at: Dr. Sven-Holger Undritz Jungfernstieg 51 20354 Hamburg Germany The District Court opened bankruptcy proceedings against the company on Dec. 15, 2008. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: Gespensterschloss Filmproduktion GmbH Attn: Dr. Robert Houcken, Manager Am Studio 20 12489 Berlin Germany GLOBAL NETWORKS: Claims Registration Period Ends January 27 ----------------------------------------------------------- Creditors of Global Networks Management GmbH have until Jan. 27, 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 March 10, 2009, at which time the insolvency manager will present his first report. The meeting of creditors will be held at: The District Court of Chemnitz Insolvency Tribunal Hall 3.011 Fuerstenstr. 21-23 09130 Chemnitz 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: Bernward Widera Buettenstrasse 4 08058 Zwickau Germany The District Court opened bankruptcy proceedings against the company on Dec. 15, 2008. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: Global Networks Management GmbH Attn: Tilo Unger, Manager Marktstr. 1 08523 Plauen Germany IKB DEUTSCHE: EU Commission Approves German Support Scheme ---------------------------------------------------------- The European Commission has approved, under EC Treaty state aid rules, a guarantee, that Germany is granting to IKB Deutsche Industriebank AG to cover the bank's medium-term refinancing needs in the financial crisis. The support aims to ensure that IKB's restructuring is not impeded by insufficient liquidity. The Commission found the measure appropriate to stabilize the bank, in line with its Guidance Communication on state aid in the financial crisis as well as its rescue and restructuring guidelines. The guarantee is necessary to avoid a serious disturbance in the German economy and to ensure the continuity of IKB's business activities. As it is limited in time and scope to the minimum necessary to restore the financing, requires an adequate fee level and ensures the economic viability of IKB, it is compatible with Article 87.3.b of the EC Treaty. Competition Commissioner Neelie Kroes said: "The present decision is an example that our rules are flexible enough to support banks in the financial crisis even if they have previously received restructuring aid." IKB has asked for a guarantee from the German authorities which they intend to grant in line with the German support scheme for financial institutions. However because of its previous restructuring, an individual notification was required. On December 16, 2008, the German authorities notified their plans to support IKB. Due to the current financial crisis, IKB experienced difficulties concerning its refinancing capabilities. The German authorities therefore intend to grant a guarantee of at most EUR5 billion on IKB's newly issued debt. Germany will receive a market-orientated remuneration in accordance with the recommendations of the European Central Bank. The measure has been previously approved by SoFFin, the Fund administering the German support scheme for financial institutions which the Commission has already deemed to be in line with its Guidance Communication on state aid during the financial crisis. The Commission acknowledged that the measure comprises state aid and assessed whether the measure, which occurs in the phase of restructuring of IKB, would be in line with the rescue and restructuring guidelines. It raised no objections, however, because the support was motivated by purely external events and is temporary and necessary to help the company to ensure the restoring of viability. About IKB Deutsche Industriebank IKB Deutsche Industriebank AG -- http://www.ikb.de/-- is a Germany-based banking company, which specializes in the field of long-term financing. It offers a range of financial products and services directed at medium-sized companies. The Bank operates internationally in four business segments: Corporate Lending, engaged in the credit transactions, mobile leasing, private equity sectors, as well as offerings of such capital market products as corporate bonds loans sectors for clients; Real Estate Financing, which provides customized financing solutions for real estate projects; Structured Finance, which offers such services as acquisitions and industrial project financing, and Portfolio Investments that is involved in the investments in equity products. As of March 31, 2008, IKB Deutsche Industriebank AG's subsidiaries included AIVG Allgemeine Verwaltungsgesellschaft mbH, IKB Autoleasing GmbH, IKB Finance BV, ZAO IKB Leasing, ISTOS Grundstueck-Vermietungsgesellschaft mbH & Co. KG, among others. NORDLB: EU Commission Approves German Banking Rescue Aid -------------------------------------------------------- The European Commission has approved, under EC Treaty state aid rules, a guarantee package, that Germany intends to grant to NordLB to cover the bank's medium-term refinancing needs in the financial crisis. The Commission found the measure appropriate to stabilize the bank, in line with its Guidance Communication on state aid in the financial crisis. The guarantee is necessary to avoid a serious disturbance in the German economy. The measure is limited in time and scope, ensures a market- oriented remuneration and foresees sufficient behavioral safeguards to avoid abuses. The guarantee is therefore compatible with Article 87.3.b of the EC Treaty. Competition Commissioner Neelie Kroes said: "The guarantee program for NordLB was well designed and complete; therefore, we have been able to approve it very quickly." On December 18, Germany notified a guarantee program for NordLB. The measure is necessary to ensure the bank's refinancing and lending capacity, in the wake of the financial crisis. The specificity of the program lies in the fact that the debt for which the guarantee is received is highly collateralized, which goes beyond what has been seen in other cases. The guarantee program is structured around a special purpose vehicle that supplies financing to NordLB via securities with a maximum maturity of three to five years, backed by a very good, diversified guarantee pool of assets that is constantly reviewed. In so far that the maximum maturity may go up to five years this is justified by the structure of NordLB's liabilities. The German Lander of Lower Saxony and Saxony-Anhalt would provide state guarantees on the securities and would receive a market- oriented remuneration, in line with the recommendations of the European Central Bank. The Commission found that the program involved state aid to NordLB. However, the Commission concluded that several provisions ensured the adequacy and proportionality of the measures, in line with the Commission's Guidance Communication on state aid during the financial crisis. In particular, the period during which securities may be issued under the guarantee program is limited to six months and the scope of the guarantee is limited to new, short or medium term debt. Finally, Germany made the commitment to report on the implementation of the guarantee every six months and, in case the guarantee is drawn, to submit a restructuring plan for NordLB within six months. PREMIERE AG: Reaches Long-Term Financing Deal with News Corp ------------------------------------------------------------ News Corporation has reached an agreement with Premiere AG and its bank syndicate on a new financing structure. The new financing structure will replace Premiere's current debt financing and provide additional equity to fund its new strategic plan. Under the new financing structure, the existing debt facilities will be refinanced by EUR525 million of new long-term bank facilities and News Corporation will backstop capital increases intended to provide Premiere with gross equity proceeds of EUR450 million as follows: * A first equity capital increase is intended to satisfy Premiere's short-term funding needs. It involves the issue of up Premiere's short-term funding needs. It involves the issue of up to approximately 10.2 million shares out of its existing authorized capital via a rights issue and will raise at least EUR25 million. News Corporation will purchase a certain number of shares not subscribed for by other shareholders to ensure gross proceeds to Premiere of not less than EUR25 million, while ensuring that its ownership level will not exceed 29.9 percent. The bank syndicate has also agreed to provide up to EUR25 million short-term financing in January 2009. This interim funding is intended to provide a minimum of EUR50 million to satisfy Premiere's funding needs through the completion of the second equity capital increase. * A second equity capital increase is intended to raise an additional amount such that Premiere will receive total gross proceeds of EUR450 million from the two equity capital increases. The second equity capital increase will also be structured as a rights issue and is expected to close in the second quarter of calendar year 2009. News Corporation has agreed to backstop the second capital increase, subject to certain conditions, the most important of which are the availability of the new long-term bank facilities and an exemption from the Federal Financial Supervisory Office ("BaFin") from the requirement to make a mandatory public offer for Premiere in the event News Corporation's equity share in Premiere reaches or exceeds 30 percent. News Corporation's commitment is also conditional on approval of the second capital increase by an extraordinary meeting of Premiere shareholders which is planned for the first quarter of 2009 as well as certain customary closing conditions. According to Brand Republic, loss-making Premiere is in breach of its lending covenants and needs to raise the cash to see it through to profitability. EBITDA Outlook In a TCR-Europe report on October 7, 2008, Premiere said in a statement its EBITDA result for full year 2008 is expected to be a loss in the range of EUR40 million to EUR70 million. This expected result excludes a possible one-time gain from further sales of broadcast rights to the 2010 World Cup. As a result of the EBITDA outlook, Premiere commenced discussions with its banks regarding a restructuring of debt facilities and is confident to reach an agreement. CFO Alexander Teschner Steps Down The report disclosed that in October, Alexander Teschner, CFO of Premiere, asked the Supervisory Board for release from his office. The Supervisory Board accepted his resignation with immediate effect. Citing Mike Esterl and Aaron O. Patrick of The Wall Street Journal, the report recounted Premiere has struggled since losing its hold on broadcasting rights to Germany's soccer league. According to the WSJ reporters, the pay-TV company also is competing with more than two dozen free TV channels in Germany, including several state broadcasters that enjoy public financing while an economic slowdown and rising inflation also are making German consumers more cautious. About News Corporation New York-based News Corporation (NYSE: NWS, NWS.A; ASX: NWS, NWSLV) -- http://www.newscorp.com/-- is a diversified global media company with operations in eight industry segments: filmed entertainment; television; cable network programming; direct broadcast satellite television; magazines and inserts; newspapers and information services; book publishing; and other. The activities of News Corporation are conducted principally in the United States, Continental Europe, the United Kingdom, Australia, Asia and Latin America. The company had total assets as of September 30, 2008 of approximately US$61 billion and total annual revenues of approximately US$33 billion. About Premiere AG Headquartered in Unterfoehring, Germany, Premiere AG -- http://info.premiere.de/-- operates a subscription television network in Germany and Austria. Its network is available via satellite and cable. The company's service offers channels to cater for all audiences, including themed channels dedicated to broadcasting feature films, live sporting events, foreign language content and children's programming, among others. A variety of subscription packages are available for customers interested in subscribing to certain or all channels within Premiere's portfolio. One of Premiere's core competencies is Pay-Per-View television. Its Premiere Direkt channel broadcasts, sporting events and adult entertainment, which can be ordered by telephone, short message service (SMS) text message or over the Internet. In addition, the company offers Internet live streaming, including sport and film/series. The company also markets advertising space and promotional opportunities. STUMPF KINOTECHNIK: Claims Registration Period Ends January 21 -------------------------------------------------------------- Creditors of Stumpf Kinotechnik GmbH have until Jan. 21, 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 March 4, 2009, at which time the insolvency manager will present her first report. The meeting of creditors will be held at: The District Court of Darmstadt Hall 4.310 Fourth Floor Building D Mathildenplatz 15 64283 Darmstadt 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: Julia Kappel-Gnirs Bleichstr. 2-4 60313 Frankfurt Germany Tel: 069-913092-0 Fax: 069-913092-30 The District Court opened bankruptcy proceedings against the company on Dec. 12, 2008. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: Stumpf Kinotechnik GmbH Siemensstrasse 16 64546 Moerfelden-Walldorf Germany Attn: Magdalene Zadrozny, Manager Gartenstrasse 19 61476 Kronberg/Taunus Germany TECHNIC HOUSE: Claims Registration Period Ends January 23 --------------------------------------------------------- Creditors of Technic House Trading GmbH have until Jan. 23, 2009, to register their claims with court-appointed insolvency manager. Creditors and other interested parties are encouraged to attend the meeting at 8:00 a.m. on Feb. 11, 2009, at which time the insolvency manager will present his first report. The meeting of creditors will be held at: The District Court Nordhorn Hall 42 Seilerbahn 15 48529 Nordhorn 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: Andreas Sontopski Gnoiener Platz 10 48493 Wettringen Germany Tel: 02557/93840 Fax: 02557/938450 The District Court opened bankruptcy proceedings against the company on Dec. 12, 2008. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: Technic House Trading GmbH Attn: Pieter Wiemers, Manager Jahnstrasse 7 48529 Nordhorn Germany ============= I C E L A N D ============= DECODE GENETICS: Terrance McGuire Resigns from Board of Directors ----------------------------------------------------------------- deCODE genetics, Inc., disclosed in a regulatory filing with the Securities and Exchange Commission that Terrance G. McGuire resigned as a director of the company. deCODE is not aware of any disagreement between it and Mr. McGuire relating to deCODE's operations, policies or practices. deCODE genetics Inc. (Nasdaq: DCGN) -- http://www.decode.com/-- operates as a biopharmaceutical company that applies discoveries in human genetics to develop drugs and diagnostics for common diseases. The company serves pharmaceutical companies, biotechnology firms, pharmacogenomics companies, government institutions, universities, and other research institutions primarily in the United States, Europe, and internationally. The company was founded in 1996 and is headquartered in Reykjavik, Iceland. deCODE genetics Inc.'s balance sheet at Sept. 30, 2008, showed total assets of US$100.2 million and total liabilities of US$304.0 million, resulting in a shareholders' deficit of roughly US$203.8 million. Net loss for the quarter ending Sept. 30, 2008, was US$17.9 million, compared to US$24.2 million for the third quarter 2007. Net loss for the first nine months of 2008 was US$62.9 million, compared to US$63.1 million for the first nine months of last year. In addition to operating loss, net loss figures for the periods presented include interest expense and, in the 2008 periods, unrealized loss resulting from the revaluation of the company's auction rate securities investments. The nine-month figure for 2007 also includes a one-time payment deCODE received related to the settlement of an intellectual property suit. At Sept. 30, 2008, the company had liquid funds available for operating activities of US$11.8 million, as compared to US$23.7 million at June 30, 2008, and US$64.2 million at Dec. 31, 2007. The net utilization of liquid funds in the three and nine- month periods ended Sept. 30, 2008, was US$12.0 million and US$52.4 million. At Sept. 30, 2008, the company had US$35.5 million in cash, cash equivalents and investments, comprised of the US$11.8 million in cash and cash equivalents, well as US$5.5 million in restricted investments in U.S. Treasury Bills and US$18.2 million in illiquid, non-current investments in auction rate securities. The company is undertaking a review of its long-term business strategy with the goal of sharpening the focus of its business, selling assets, securing partnerships, and utilizing the resources generated to support product development and marketing efforts in its core business. The company has utilized a 30-day grace period for the scheduled October 15 interest payment on its 3.5% Senior Convertible Notes due 2011 and is reviewing methods for making this payment. Given its current liquid assets, and without paying the interest on its Notes from its present funds, the company must obtain further financial resources through either the implementation of strategic alternatives, corporate partnerships, or the sale of or loans secured by its auction rate securities in order to continue operations beyond the end of this year. The company is focused on reducing expenses and speeding the evaluation of its strategic options in order to obtain the resources to do so. ============= I R E L A N D ============= FORNAX ECLIPSE: S&P Downgrades Rating on Two Note Classes to Low-B ------------------------------------------------------------------ Standard & Poor's Rating Services lowered its credit ratings on the class E, F, and G notes issued by FORNAX (ECLIPSE 2006-2) B.V. Class E was also placed on CreditWatch negative, and classes F and G remained on CreditWatch negative. The ratings on the other classes in the transaction are unaffected. The notes issued by FORNAX (ECLIPSE 2006-2) are secured by 13 loans, which are secured by properties in Austria, Belgium, France, Germany, Italy, and Spain. The class F and G notes were placed on CreditWatch negative on the Nov. 14, 2008 because of S&P's material concerns about the creditworthiness of the ATU Germany and ATU Austria loans. In view of the specialized nature of the assets supporting the ATU loans, S&P expects that principle losses are likely to be experienced given general market value declines and deteriorating vacant possession values. Moreover, S&P has a number of concerns about the credit quality of the remaining loans. This is because, based on the lease expiry profile, leases may be terminated over the next three years and, as many of the properties are let to a single or a few tenants only, there are scenarios in which re- lettings may prove challenging. This leads S&P to expect that operating income will be subject to greater stress and could potentially decline. S&P expects these notes to remain on CreditWatch for an extended period of time while S&P monitor the transaction. Ratings List FORNAX (ECLIPSE 2006-2) B.V. EUR545.13 Million Commercial Mortgage-Backed Variable and Floating-Rate Notes Ratings Lowered And Placed On CreditWatch Negative Class To From ----- -- ---- E BBB-/Watch Neg A Ratings Lowered And Kept On CreditWatch Negative Class To From ----- -- ---- F BB-/Watch Neg BBB/Watch Neg G B-/Watch Neg BB/Watch Neg MAGNOLIA FINANCE: Moody's Lowers Rating on JPY1 Bil. Notes to 'C' ----------------------------------------------------------------- Moody's Investors Service has downgraded its rating of these series of notes issued by Magnolia Finance IV plc Series 2006-18 JPY1,000,000,000 Riders Notes -- Current rating: C, -- Prior rating: Caa3, under review for possible downgrade -- Prior rating action: 20 November 2008, downgraded from Caa1 to Caa3 and left under review for possible downgrade. This rating action follows the unwinding of the transaction due to a Knock Out Event that occurred on December 5, 2008 and led to noteholders losing about 95% of their investment. According to the transaction documentation, a Knock-Out event occurs when the market value of the portfolio falls below 10%. MODERN KITCHENS: Goes Into Examinership; Struggles to Repay Loan ---------------------------------------------------------------- Ray Managh at Herald.ie reports that Dublin-based Modern Kitchens Manufacturing Ltd has gone into examinership. Herald.ie relates the High Court was told Monday last week that MKML is struggling to repay a EUR9.65 million bank loan. Mr Justice Peter Charleton has appointed an interim examiner to run the affairs of MKML and its parent company, E Van Investments Ltd, Herald.ie discloses. Herald.ie recounts E Van Investments became a holding company in March 2007 and owed the Anglo Irish Bank EUR9.65 million -- part of a EUR12 million borrowing that E Van Investments used to buy MKML, which launched its retail unit in 2001 with the Kitchen World brand. According to Herald.ie, the capacity of MKML to fund the loan obligations of E Van Investments had been significantly compromised after its contract business experienced a downturn because of the construction decline. Herald.ie notes the price paid by E Van Investments for MKML had been based on their strong contract business. It had been anticipated that the development of Kitchen World would take place alongside the contract business, Herald.ie states. Citing a lawyer for the two companies, Herald.ie reveals by December 2007, MKML suffered a turnover loss of EUR56,638. The lawyer added customers of Kitchen World who planned placing deposits on new kitchen and wardrobes would have reassuring guarantees under an examinership, Herald.ie says. * IRELAND: Unveils Recapitalization Measures for Three Banks ------------------------------------------------------------ Following on from Government Decisions of November 28 and December 14 on the recapitalization of financial institutions, the Minister for Finance on December 21 announced specific decisions in relation to three major financial institutions. Commenting on the announcement; The Taoiseach said: "The objective of these decisions is to ensure that the financial system in Ireland meets the everyday financial needs of individuals, businesses and the overall economy. As part of this recapitalization package, I am very pleased that a number of measures to support small to medium businesses and mortgage holders have also been announced." "In relation to Anglo Irish Bank, the Minister for Finance announces an initial investment of EUR1.5 billion of core tier 1 capital to assist in restructuring the bank's capital. The Government will continue to reinforce the position of Anglo Irish Bank and will make further capital available if required so that it remains a sound and viable institution. The investment will be in the form of EUR1.5 billion of perpetual preference shares with a fixed annual dividend of 10%. The preference shares carry 75% of the voting rights of Anglo Irish Bank. The investment is subject to the approval of the ordinary shareholders at a general meeting which will be convened as soon as possible. On the basis of positive contact with the European Commission, the Minister said he was confident that the Anglo proposal will meet with EU State Aid requirements when formally notified in due course. "Good progress continues to be made in the capital discussions with other institutions. In particular, subject to shareholder and regulatory approval, the Government has agreed with Bank of Ireland and Allied Irish Banks plc that they will each issue EUR2 billion of perpetual preference shares to the State with a fixed annual dividend of 8%. These shares will have voting rights in respect of change of control and any changes in the capital structure. They will also confer 25% of the voting rights in respect of appointments of directors and 25% of the directors on the board, currently including any directors to be appointed in connection with the Government's Guarantee Scheme. "All the institutions may redeem the preference shares within 5 years at the issue price or after 5 years at 125% of the issue price. The preference shares are non-convertible and will be treated as core tier 1 capital by the Financial Regulator and are replaceable only with other core/equity tier 1 capital. "The capital injection for Anglo Irish Bank is likely to take place following an Extraordinary General Meeting in mid-January, and for Allied Irish Bank and Bank of Ireland, by the end of the first quarter of 2009. "The Government has a substantial pool of additional capital available to underwrite and otherwise support the issuance of core tier 1 capital by the relevant institutions. The Government need not be the principal source of this additional capital and encourages each institution to access private sources of capital. Nonetheless, the Government is prepared to underwrite further issuance of core tier 1 capital and both Allied Irish Banks plc and Bank of Ireland have indicated an interest in such an underwriting in an amount of up to EUR1 billion each. "The measures have been designed having regarded to the recent European Commission Recapitalisation Communication and are subject to State aid approval. Credit Package "The provision of credit to the economy is the most immediate and pressing issue for business and for the Government. The future health of our economy is inextricably linked with the supply of credit and a situation where banks are unwilling or are perceived to be unwilling to lend is damaging not only for the economy but also for the banks themselves. Banks have an important part to play in addressing this issue and a key objective of the Government's recapitalization initiative is to ensure the continued flow of funds through the banks to individuals and businesses in the real economy. "In response to my earlier meetings with the banks many had already announced specific programs to boost lending to small and medium enterprises. AIB and Bank of Ireland have announced new business support and start up funds and have provided commitments to support first time buyers and consumers. While these announcements are welcome the Government believes that it is appropriate as part of the agreed recapitalization program that the banks should further build on the commitments given in the banks guarantee scheme through specific credit policies targeted at small medium enterprises, first time buyers and consumers generally. "The recapitalization will provide the banks with the stability required to continue to lend to meet the needs of the Irish economy. The banks will be expected to contribute to the economy in a verifiable manner in relation to credit and in relation to the maintenance of a payments system which is socially inclusive. They will be expected to adopt an approach to customer relationships in a way which recognizes that customers need support through difficult as well as good times. The banks assure the Government that they will continue to grow lending to small and medium sized enterprises and have agreed to the following credit package: * Small and Medium Enterprises: The recapitalized banks will provide at least an additional 10% capacity for lending to small to medium enterprises in 2009 from which lending will be subject to demand from viable enterprises. (SMEs are to be defined in accordance with the requirements under EU State aid Regulations.) * Code of practice for business lending: Business lending by the recapitalized banks will be supported by a new code of practice for business lending which will be developed by the Financial Regulator. The recapitalized banks have committed to work closely with the Financial Regulator and the IBF to develop this code which will be introduced before end of January 2009. The code will provide for issues such as appropriate notice before change of banking facilities, arrangements to work with small businesses in difficulty and reassurance that sustainable and productive business propositions will not be declined loan facilities. * Mortgages/First time buyers: The recapitalized banks will provide an additional 30% capacity for lending to first time buyers in 2009. Take up will be subject to demand and the banks have committed to actively promote mortgage lending at competitive rates with increased transparency on the criteria to be met. * Mortgage Arrears: The banks will take action to assist householders who are in arrears. The recapitalized banks already comply fully with the voluntary IBF Code on mortgage arrears and repossession and refer customers to the Money, Advice and Budgeting Service where appropriate. The banks have confirmed that those in default on their home loans will treated with respect and that they will work with mortgage holders to ensure that repossession is truly an option of last resort. Furthermore the recapitalized banks have confirmed to Government that they will wait at least six months from the time arrears first arise before the enforcement of any legal action on repossession of a customer's primary residence. * Basic bank account: The recapitalized banks have committed to broaden the provision of basic or introductory bank accounts and will promote these accounts to socio-economic groups where the holding of bank accounts is less prevalent and to those who find that a current account does not suit their basic banking needs. The Department of Social and Family Affairs will continue its engagement with the financial institutions with a view to increasing availability and demand for basic bank accounts. Each bank can develop the form of its basic bank account in discussion with the Financial Regulator and in all cases it will provide cash card facilities. In support of this initiative the Government will arrange that stamp duty will not apply to cash cards for basic bank accounts. Detailed targets for basic bank accounts will be negotiated with each institution. * Environmental Improvements: Each recapitalized bank will introduce a EUR100 million fund to support environment friendly investments with a view to reducing energy usage, facilitating switching to renewable energies with a view to reducing Ireland's carbon footprint. * Financial education: The recapitalized banks will provide funding and other resources, in cooperation with the Financial Regulator, to support and develop financial education for consumers and potential consumers. The resources to be made available will take account of the Financial Regulator's Financial Capability Study and the Report of the Steering Group on Financial Education. * Customer Communications: The recapitalized banks will continue to improve the transparency of the terms and conditions of products, of charges, of marketing and of sales processes and procedures. Proposals in this regard will be submitted to the Financial Regulator in January 2009." ========= I T A L Y ========= CORDUSIO SME: S&P Puts Low-B Ratings on EUR337.6MM Floating Notes ----------------------------------------------------------------- Standard & Poor's Ratings Services has assigned its credit ratings to the EUR337.6 million floating-rate credit-linked notes issued by Cordusio SME 2008-1 Ltd. At the same time, Cordusio SME 2008-1 issued EUR144 million unrated notes. The transaction is a partially funded synthetic balance-sheet collateralized loan obligation, referencing a portfolio of bank loans granted by UniCredit Corporate Banking SpA to small to midsize enterprises in Italy. The transaction aims to provide regulatory capital relief to UCCB. This is the first synthetic CLO of SME loans originated by UCCB that S&P has rated. The purpose of this transaction is to transfer the credit risk associated with a pool of loans to Italian SMEs. At closing, UCCB entered into a junior guarantee to transfer to the issuer the junior credit risk related to the reference obligations. UCCB also entered into a senior swap to transfer the remaining risk related to the reference obligations. The issuer hedged its exposure through the issuance of various classes of notes. The proceeds of the notes were transferred to a euro-denominated cash deposit with UniCredit SpA. Payments of interest on the rated notes depend on UCCB's ability to make premium payments under the terms of the junior guarantee. Ratings List Cordusio SME 2008-1 Ltd. EUR481.646 Million Floating-Rate Credit-Linked Notes Class Rating Amount (Mil. EUR) ----- ------ ----------------- A AAA 60.0 B AA 89.1 C A 81.9 D BBB 76.5 E BB+ 15.0 F1 BB 6.8 F2 BB 8.3 G NR 144.0 NR � Not rated. * ITALY: EC Approves Aid Scheme for Financial Institutions ---------------------------------------------------------- The European Commission has approved an Italian aid scheme aimed at supporting the financing of the real economy by providing capital instruments to fundamentally sound financial institutions. After intensive exchanges with the Italian authorities, the Commission found the scheme, as amended, to be in line with its Guidance Communications on state aid to overcome the financial crisis . In particular, the measures are limited in time and scope, require market oriented remuneration and contain enough incentives to redeem the state participation over time, as well as sufficient safeguards to avoid abuses. The Commission therefore concluded that the scheme is an adequate means to restore a serious disturbance of the Italian economy and as such compatible with Article 87.3.b of the EC Treaty. Competition Commissioner Neelie Kroes said: "The Italian recapitalization scheme provides effective means of strengthening confidence in the markets and, above all, of financing the real economy in a period of crisis, while at the same time establishing safeguards to limit distortions of competition". The Italian recapitalization measures provide for the possibility for Italy to subscribe subordinated debt instruments, to be counted as bank core tier 1 capital. The global budget will be around EUR15-EUR20 billion. Only fundamentally sound banks as determined by their credit default swaps spread level, their ratings and the additional assessment to be made by the Bank of Italy will be eligible for the recapitalization. Capital endowment will be within 2% of the banks' risk weighted assets and in principle within a level of 8% of tier 1 capital. The distortive effect of the recapitalization is minimized by various remuneration conditions including fixed step-up clauses, increases in remuneration linked to dividend payments and a link of the remuneration with the financing cost of the Italian state. In order to give banks an incentive to redeem the state participation once the crisis is over and to allow a return to normal market functioning, a redemption price higher than the nominal value and increasing over time has been introduced. Conditions relating to dividend policy, management remuneration, behavioral commitments and an ethical code are also included in the conditions of the recapitalization. The Bank of Italy will regularly monitor how the funds will be put to use to sustain lending to the real economy. The measure is fully in line with the newly adopted Commission guidance on bank recapitalization. The Commission found the scheme and the commitments to constitute an appropriate means to restore confidence in the creditworthiness of Italian financial institutions and to stimulate lending to the real economy. The measures are well-designed and interventions will be limited to what is necessary to achieve the stabilization of the Italian financial sector. A report on the functioning of the scheme will be submitted to the Commission every six months. The possible need to either prolong the scheme beyond six months from its adoption or to introduce amendments will be notified to the Commission. This will enable the Commission to verify that the measures are maintained only as long as the financial crisis so justifies. =================== K A Z A K H S T A N =================== KOUNRAD LLP: Proof of Claim Deadline Slated for February 5 ---------------------------------------------------------- LLP Mining Company Kounrad has declared insolvency. Creditors have until Feb. 5, 2009, to submit written proofs of claim to: LLP Mining Company Kounrad Office 722 Kazybek bi Str. 65 Almalinsky 050000 Almaty Kazakhstan MEDIUS-M LLP: Creditors Must File Claims by February 5 ------------------------------------------------------ The Specialized Inter-Regional Economic Court of Aktube has declared LLP Medius-M insolvent. Creditors have until Feb. 5, 2009, to submit written proofs of claim to: The Specialized Inter-Regional Economic Court of Aktube Altynsarin Str. 31 Aktobe Aktube Kazakhstan Tel: 8 (7132) 21-30-32 SAMARSKOYE-OIL WEST: Claims Filing Period Ends February 10 ---------------------------------------------------------- LLP Samarskoye-Oil West has declared insolvency. Creditors have until Feb. 10, 2009, to submit written proofs of claim to: LLP Samarskoye-Oil West Micro District Samal-2, 81-3 Almaty Kazakhstan SI VRES LTD: Creditors' Claims Due on February 5 ------------------------------------------------ The Specialized Inter-Regional Economic Court of East Kazakhstan has declared LLP Si Vres Ltd. insolvent on Nov. 24, 2008. Creditors have until Feb. 5, 2009, to submit written proofs of claim to: The Specialized Inter-Regional Economic Court of East Kazakhstan Office 105 Myzy Str. 2/1 Ust-Kamenogorsk East Kazakhstan Kazakhstan Tel: 8 (7232) 57-83-69 =================== K Y R G Y Z S T A N =================== ESKARO-STROY LLC: Creditors Must File Claims by February 12 ----------------------------------------------------------- LLC Construction Company Eskaro-Stroy has declared insolvency. Creditors have until Feb. 12, 2009, to submbit claims to: LLC Construction Company Eskaro-Stroy Profsoyuznaya Str. 140 Bishkek Kazakhstan Tel: (+996 312) 30-73-94 =========== L A T V I A =========== * LATVIA: EU Commission Approves Support Scheme for Banks --------------------------------------------------------- The European Commission has approved under EC Treaty state aid rules a Latvian support scheme to stabilize financial markets by providing guarantees to eligible banks to ensure their access to financing. The Commission found the measure to be in line with its Guidance Communication on state aid to overcome the financial crisis. In particular, the scheme ensures non-discriminatory access, is limited in time and scope, requires market oriented remuneration and contains sufficient safeguards to avoid abuses. The Commission therefore concluded that the scheme was an adequate means to remedy a serious disturbance of the Latvian economy and as such in line with Article 87.3.b of the EC Treaty. Competition Commissioner Neelie Kroes said: "The Latvian scheme demonstrates again the great strength of the Commission in this crisis: the ability to supervise Member States' support schemes with enough flexibility to take into account national particularities, whilst ensuring enough coherence to maintain a level playing field for all European banks." The guarantee will cover all liabilities with the exception of interbank deposits, subordinated liabilities and collateralized liabilities such as covered bonds which have a maximum maturity of three years. Instruments guaranteed under this scheme may be issued within six months following this decision. Moreover, in exceptional cases only, the Latvian measures also provide for the takeover of distressed banks. In the first instance, the scheme has a ceiling which corresponds to 10% of the Latvian GDP. Only solvent banks are allowed to enter the scheme. The Commission decision covers a period of six months, following which Latvia should terminate the scheme or re-notify its extension to the Commission. The scheme contains elements of state aid but foresees safeguards aimed at ensuring that the state intervention is proportionate, limited to what is necessary to stimulate interbank lending and adequate to reach this goal, in accordance with EU state aid rules, as outlined in the Commission's Guidance Communication. In particular, the scheme provides for non-discriminatory access as it will be open to all solvent Latvian banks, including Latvian subsidiaries of foreign banks. To benefit from the guarantee, participating banks are required to pay a market-oriented fee, in line with recommendations from the European Central Bank. Moreover, beneficiaries will be subject to behavioral commitments to avoid an abusive use of the state support. These include limitations on marketing and conditions for staff remuneration or bonus payments. In addition, Latvia made the commitment to notify restructuring or liquidation plans for each beneficiary that defaulted on its liabilities and as a consequence would cause the guarantee to be drawn. Finally, Latvia will report periodically to the Commission on the implementation of the scheme. In light of these commitments and conditions, the Commission concluded that the scheme would be an adequate means to restore confidence in the Latvian financial markets and to boost interbank lending. The safeguards will ensure that the state support is limited to what is necessary to stabilize the Latvian financial sector and that negative spill-over effects are minimized. * LATVIA: EU to Provide Financial Assistance of Up to EUR3.1 Bln ---------------------------------------------------------------- The Presidency of the Ecofin Council and the European Commission in a joint statement on December 19, said that in light of the major imbalances facing the Latvian economy, accentuated by the financial market strains, and given the Latvian authorities' firm commitment to implement a major program of economic adjustment, the European Union intends to provide medium-term financial assistance to Latvia of up to EUR3.1 billion. The support will be provided in conjunction with the International Monetary Fund (EUR1.7 billion), the Nordic countries (Sweden, Denmark, Finland and Norway) (EUR1.8 billion together) and the World Bank (EUR0.4 billion). The European Bank of Reconstruction and Development, the Czech Republic, Poland and Estonia will also provide a total of EUR0.5 billion, bringing the total to up to EUR7.5 billion over the period to the first quarter of 2011. The financial assistance will be conditional on the implementation of a comprehensive economic policy program. The financial assistance and the policy program are designed to enable the economy to withstand short-term liquidity pressures while improving competitiveness and supporting an orderly correction of imbalances in the medium term, hence bringing the economy back on a sound and sustainable footing. This will also help meet the conditions for the adoption of the euro. The program is based on maintaining Latvia's existing exchange rate peg, which will remain a key policy anchor going forward, thereby underpinning systemic stability. Key elements of the economic policy package are an immediate and sustained fiscal consolidation to limit the budget deficit to 5% of GDP in 2009, falling further to 3% of GDP in 2011. Supporting wide-ranging structural reforms and wage reductions, led by the public sector, will contribute to restoring Latvia's cost competitiveness. Furthermore, in order to limit the vulnerabilities stemming from the high private sector debt levels and limit the negative consequences on indebted households, the program also foresees measures to facilitate restructuring of domestic and external debt. The economic policy conditionality will be set in a forthcoming Council decision and further spelled out in a Memorandum of Understanding to be concluded shortly with the Latvian authorities. The Commission in collaboration with the Economic and Financial Committee will monitor regularly and closely that the economic policy conditions attached to the financial assistance are fully implemented and may request additional measures when and if circumstances so require. The Presidency of the Ecofin Council and the Commission also urge the large financial institutions operating in Latvia to continue providing adequate funding of their operations there as well as appropriate financing of the economy. "In this context we very much welcome the confirmation of the long-term commitment of foreign parent banks to Latvia and to support their subsidiaries in the country," they said. EU Assistance Will Take Form of a BoP Loan The proposed medium-term financial assistance to Latvia will consist of a European Community loan, which has yet to be approved by the Commission. This is expected to happen early in January. It will then require approval by the EU finance ministers. Such support is provided under Council Regulation 332/2002 which provides for a medium-term financial assistance facility for non- euro area EU Member States' balance of payments (BoP). Background The EU in November also agreed to grant a BoP loan to Hungary of EUR6.5 billion. On a proposal by the Commission, the Council decided to increase early December the overall financial assistance ceiling in Regulation 332/2002 to EUR25 billion from an original EUR12 billion. =================== L U X E M B O U R G =================== AQUARIUS + INVESTMENTS: Moody's Withdraws Caa1 EUR10MM Note Rating ------------------------------------------------------------------ Moody's Investors Service has withdrawn its rating on this Class of notes issued by Aquarius + Investments PLC. Series DE EUR10,000,000 RECIPES Notes -- Current rating: WR -- Prior rating: Caa2, under review for possible downgrade -- Prior rating action date: 31 October 2008, downgraded from Caa1 to Caa2. Moody's has withdrawn this rating because the transaction has been restructured and all investors requested that the rating be withdrawn. ORCO PROPERTY: Moody's Withdraws 'Caa1' Corporate Family Rating --------------------------------------------------------------- Moody's Investors Service has withdrawn all ratings assigned to Orco Property Group S.A., including the corporate family rating of Caa1, the national scale rating of Ba2.cz. Orco does not have any outstanding notes rated by Moody's. Moody's has withdrawn this rating for business reasons. Please refer to Moody's Withdrawal Policy on www.moodys.com: "Moody's Guidelines for the Withdrawal of Ratings." Moody's last rating action on Orco took place 6 August, 2008 when the agency downgraded the corporate family rating to Caa1 from B3 and the national scale rating to Ba2.cz from Ba1.cz with negative outlook. Headquartered in Luxembourg, Orco Property Group S.A. is a diversified residential and commercial property developer and investment manager in Central and Eastern Europe and ranks as the third-largest residential developer in Prague, Czech Republic. The group had total assets of EUR2.99 billion at September 30, 2008. =========== N O R W A Y =========== NEMI FORSIKRING: W.R. Berkley Terminates Acquisition Talks ---------------------------------------------------------- W. R. Berkley Corporation (NYSE: WRB) in a press statement on Tuesday, December 23, 2008, said that it has terminated its negotiations to acquire NEMI Forsikring ASA. A press release announcing the letter of intent regarding the potential acquisition was previously issued on November 11, 2008. W. R. Berkley noted that it devoted substantial time and resources in performing its due diligence investigation, but was unable to structure an appropriate transaction. Founded in 1967, W. R. Berkley Corporation is an insurance holding company that is among the largest commercial lines writers in the United States and operates in five segments of the property casualty insurance business: specialty insurance, regional property casualty insurance, alternative markets, reinsurance, and international. Headquartered in Oslo, Norway, Nemi Forsikring ASA -- http://www.nemiasa.no/-- operates as a multiline general insurance company. The company offers a range of insurance products and services to the utilities, commercial, marine hull, fish farming, and aviation markets, as well as to the owners and transporters of goods in Norway and internationally. It also offers customized insurance solutions to larger companies, trade associations, purchase organizations, institutions, and municipalities. * * * As reported in the TCR-Europe on Nov. 25, 2008, Standard & Poor's Ratings Services said that it revised its CreditWatch implications on Norway-based non-life insurer NEMI Forsikring ASA to positive from negative. The 'BB' insurer financial strength and long-term counterparty credit ratings remain on CreditWatch. The revised CreditWatch status follows the announcement by Connecticut-based insurer W.R. Berkley Corp. (WRB; BBB+/Stable/--) that it has signed a letter of intent to acquire 100% of NEMI from Iceland-based insurer Tryggingamidstodin hf.(TM; BB/Watch Neg/--). WRB's core insurance operating companies are rated 'A+' with a stable outlook. NEMI FORSIKRING: S&P Maintains 'BB' Insurer Strength Rating ----------------------------------------------------------- Standard & Poor's Ratings Services said that it maintains its 'BB' insurer financial strength and long-term counterparty credit ratings on Norway-based non-life insurer NEMI Forsikring ASA on CreditWatch, but has revised the implications to negative from positive. The ratings were originally placed on CreditWatch on Oct. 7, 2008, following a related action on NEMI's parent, Iceland-based insurer Tryggingamidstodin hf. (TM; BB/Watch Neg/--). "The revised CreditWatch placement follows yesterday's announcement by Connecticut-based insurer W.R. Berkley Corp. that it has terminated its negotiations to acquire 100% of NEMI from TM," said Standard & Poor's credit analyst Peter McClean. "Consequently, the CreditWatch implications on NEMI revert to the negative status originally assigned on Oct. 7, 2008." The CreditWatch reflects the continuing uncertainty regarding the future ownership and financial position of both TM and NEMI. "We remain unable to predict with any certainty when S&P expects to resolve the CreditWatch or the extent of any possible downgrade. S&P shall continue to monitor developments closely and take actions as appropriate," added Mr. McClean. The ratings on NEMI continue to reflect its marginal financial flexibility, offset by good, although weakened, capitalization and operating performance. =========== R U S S I A =========== AOEIE IRKUTSKENERGO: Moody's Cuts Corp. Family Rating to 'B3' ------------------------------------------------------------- Moody's Investors Service has downgraded the corporate family rating of AOEiE Irkutskenergo to B3 from B2. At the same time, Moody's Interfax Rating Agency, which is majority owned by Moody's, has downgraded the company's national scale rating to Baa3.ru from Baa1.ru. The ratings are on review for further possible downgrade. The downgrade follows Moody's review of the company's ratings, which was launched on November 19, 2008 due to the rating agency's concerns over the increasing liquidity pressures facing Irkutskenergo. The review has been focused on Irkutskenergo's ability to execute its plan to open several one-year bank facilities and to agree on a long-term facility in December 2008. The downgrade reflects Moody's view that the company has not managed to closely follow its plan to strengthen liquidity and prepare fully and reasonably in advance in December to address its January 2009 refinancing needs. Moody's expects Irkutskenergo to continue its negotiations with banks about new credit lines, but believes that delays in accessing new funding may continue. Moody's understands that the company's ability to honor its debt obligations is subject to direct financial support from the company's shareholders. The current rating incorporates Moody's expectation that such support will soon be provided by the company's controlling beneficiary shareholders. These shareholders, which are the same as those of US RUSAL and represented by En+ Group, are expected to arrange additional funding for Irkustkenergo. The funding should include a related party loan and cash proceeds from a reduction of accounts receivable from RUSAL, the company's largest industrial customer. Moody's notes that Irkutskenergo continues to face difficulties in making payments, which have been delayed, to its minority shareholders who voted against the company reorganization. Irkutskenergo should have bought back their shares, in the amount of RUR3.1 billion by November 19, 2008. The company has negotiated an extension on the payments to the end of January with those shareholders that have not yet received their money. The delayed payments to the minority shareholders are not a default under Moody's methodology, but signal the company's stressed liquidity profile and raise further concerns about its ability to timely address the January 2009 refinancing issues. Moody's is concerned by the company's stressed liquidity and thus has kept the ratings on review for further possible downgrade. In mid-December 2008, the company's debt (all short-term) of RUR10 billion as well as a portion maturing before the end of January 2009 significantly exceeded cash accounts of around RUR800 million and unused short-term committed credit lines of around RUR1 billion. Moody's review will focus on (i) Irkutskenergo's ability to timely receive the expected financial support from its shareholders, (ii) its progress in having new bank facilities opened, while at the same time increasing the maturity of its debt profile, and (iii) advances in addressing the outstanding payment requirements of minorities. The company's ratings could be further downgraded if no support from the shareholders materializes in the short term. Moody's previous rating action for Irkutskenergo was implemented on November 19, 2008 when Moody's downgraded the company to B2/Baa1.ru and placed the ratings on review for further possible downgrade. Headquartered in the City of Irkutsk (Russian Federation), Irkutskenergo was initially an integrated electric utility business focusing on the Irkutsk region. The company has been restructured, with its transmission and distribution grid business spun off to operate as an independent entity from 1 January 2009. The company has three hydroelectric power plants with an installed capacity of 9.0GW and 12 combined heat and power plants with a total capacity of 3.9GW. The company generated approximately 63% of its 2007 RUR28.8 billion revenues from sales of electricity and 30% from sales of heat. Irkutskenergo's controlling beneficiary shareholders are the same as those of UC RUSAl, the largest aluminium business in Russia and an international leader in the metals sector. The Russian state -- represented by the Federal Property Agency -- has a 40% stake in the company. BALTIKSTRYDOM PLUS: Bankruptcy Hearing Set February 24 ------------------------------------------------------ The Arbitration Court of Kaliningrad will convene on Feb. 24, 2009, to hear bankruptcy supervision procedure on LLC Baltik Sroydom Plus (TIN 3908028704, PSRN 1043900815090) (Construction). The case is docketed under Case No. ?21�8359/2008. The Temporary Insolvency Manager is: S. Birkle Post User Box 15 Alyabyeva Str. 12 236000 Kaliningrad Russia The Debtor can be reached at: LLC Baltik Sroydom Plus Kamskaya Str.63 236000 Kaliningrad Russia FORD MOTOR: St. Petersburg Plant Halts Production ------------------------------------------------- RIA Novosti reports that a Ford factory near St. Petersburg in Russia has halted production until January 21. The report relates that the company said it made the decision, which came into effect on Wednesday, December 24, in connection with the New Year vacations, the ongoing global financial crisis and the necessity to reduce production due to the expected drop in car sales in the country next year. According to the report, the company will be paying its workers two-thirds of their salaries during the forced outage in line with Russia's Labor Code. The factory, which produces Ford Focus cars, was opened in the summer of 2002 and employs some 2,200 workers, the report discloses. The report notes the plant earlier planned to produce 125,000 cars next year. About Ford Motor Co. Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) -- http://www.ford.com/-- manufactures or distributes automobiles in 200 markets across six continents. With about 260,000 employees and about 100 plants worldwide, the company's core and affiliated automotive brands include Ford, Jaguar, Land Rover, Lincoln, Mercury, Volvo, Aston Martin, and Mazda. The company provides financial services through Ford Motor Credit Company. The company has operations in Japan in the Asia Pacific region. In Europe, the company maintains a presence in Sweden, and the United Kingdom. The company also distributes its brands in various Latin-American regions, including Argentina and Brazil. * * * As reported in the Troubled Company Reporter on Nov. 11, 2008, Moody's Investors Service lowered the debt ratings of Ford Motor Company, Corporate Family and Probability of Default Ratings to Caa1 from B3. The company's Speculative Grade Liquidity rating remains at SGL-3 and the rating outlook is negative. In a related action Moody's also lowered the long-term rating of Ford Motor Credit Company to B3 from B2. The outlook for Ford Credit is negative. As reported in the Troubled Company Reporter on Oct. 10, 2008, Fitch Ratings downgraded the Issuer Default Rating of Ford Motor Company and Ford Motor Credit Company by one notch to 'CCC' from 'B-'. HOME CREDIT: Moody's Changes Outlook on 'D-' BFSR to Negative ------------------------------------------------------------- Moody's Investors Service has changed to negative from stable the outlook on these global scale ratings of Home Credit & Finance Bank: D- bank financial strength rating; Ba3 long-term local and foreign currency deposit ratings; and Ba3 long-term senior unsecured rating. Moody's also affirmed HCFB's Not Prime short- term local and foreign currency deposit ratings, with stable outlook. Concurrently, Moody's Interfax Rating Agency affirmed the bank's Aa3.ru long-term national scale rating. The NSR carries no specific outlook. Moscow-based Moody's Interfax is majority owned by Moody's, a leading global rating agency. "The bank's business model of wholesale-funded consumer lender is possibly one of the worst affected under current circumstances of tightened access to capital markets and rising problem loans due to the tough economic environment. The rating action reflects Moody's expectations of growing pressure on the bank's asset quality -- albeit currently adequate -- and unavoidable shrinkage in business volumes in the near term unless HCFB is successful in diversifying its funding base. However, Moody's notes that the bank currently has an adequate liquidity position to meet its obligations and its capital ratio remains strong," says Maxim Bogdashkin, a Moscow-based Moody's Analyst, and the lead analyst for HCFB. According to Moody's, a downgrade of HCFB's BFSR and deposit ratings might occur as a result of a significant deterioration in the bank's liquidity position, higher than expected credit losses in its loan book or higher than expected contraction in the bank's business volumes, thus weakening the bank's franchise. A reversal of the negative rating outlook to stable could be driven by successful diversification and management of the bank's funding base, and growth of HCFB's profitability, provided that asset quality and liquidity indicators remain strong. However, Moody's notes that these targets appear difficult to achieve in the current economic environment. Moody's last rating action on HCFB was on 30 July 2008, when the rating agency assigned a Ba3 long-term foreign currency rating to the bank's senior unsecured Loan Participation Notes. Domiciled in Moscow, Russia, HCFB reported total assets -- under IFRS -- of US$3.8 billion; capital of US$700 million and net income of US$92.9 million as of Q3 2008. KANSKAYA TABACCO: Bankruptcy Hearing Set January 13 --------------------------------------------------- The Arbitration Court of Krasnoyarskiy will convene at 10:00 a.m. on January 13, 2009, to hear bankruptcy supervision procedure on LLC Kanskaya Tabacco Processing Plant (TIN 2461014351). The case is docketed under Case No. ?33�8298/2008. The Temporary Insolvency Manager is: S. Romanova Post User Box 152 Babayevskaya Str. 20 Kumertau 453303 Bashkortostan Russia The Court is located at: The Arbitration Court of Krasnoyarskiy Office 22 Lenina Str.143 Krasnoyarsk Russia The Debtor can be reached at: LLC Kanskaya Tabacco Processing Plant Dubenskogo Str. 6/323 660032 Krasnoyarsk Russia KVANT LLC: Creditors Must File Claims by January 19 --------------------------------------------------- Creditors of LLC Kvant (Metalwork) have until Jan. 19, 2009, to submit proofs of claims to: M. Popova Insolvency Manager Malkova Str. 5 Sovetsk 613340 Kirovskaya Russia The Arbitration Court of Udmurtia commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. ?71�2560/2007 G15. The Debtor can be reached at: LLC Kvant Proezd Dzerzhinskogo 2 Izhevsk Russia MOSTRANSAVTO: S&P Downgrades Long-Term Issuer Rating to 'SD' ------------------------------------------------------------ Standard & Poor's Ratings Services said that it has lowered its long-term issuer credit rating on Russian public transport company Mostransavto to 'SD' (selective default) from 'CC'. At the same time Standard & Poor's lowered its long-term debt rating on the company's RUR7.5 billion senior unsecured bond to 'D' from 'CC'. Standard & Poor's also lowered its Russia national scale ratings on the company and debt issue to 'ruSD' and 'ruD', respectively, from 'ruCC'. All ratings were removed from CreditWatch, where they had been placed with negative implications on Sept. 26, 2008. "The downgrades follow Mostransavto's delay in paying a portion of the approximate RUR480 million coupon and RUR975 million principal installment on its rated RUR7.5 billion (nominal value) bond on Dec. 23, 2008, when due," said Standard & Poor's credit analyst Valerie Montmaur. The bond was placed by fully-owned special purpose vehicle OOO Mostransavto-Finance on Dec. 25, 2007. Based on Standard & Poor's understanding, the payments have been delayed due to the ongoing resolution of some complex transactions between one of the bondholders and Moscow oblast-owned companies. As soon as this situation is resolved, Mostransavto will make payment, since it has already reserved the necessary cash to honor these obligations. "We will subsequently revise our ratings on the company," said Ms. Montmaur. "Despite these payment delays, Mostransavto has confirmed that it continues to honor its obligations with respect to its RUR4.1 billion of unrated loans, and it is for this reason that S&P considers the default to be selective." Mostransavto is 100% owned by the Moscow Oblast ('SD'; Russia national scale rating 'ruSD'), which provides the company with ongoing financial support in the form of operating subsidies and guarantees, and services a part of the company's leasing and debt payments directly from the regional budget. Another positive factor is Mostransavto's near-monopoly position in the regional public transport market, which could strengthen through ongoing investments. OMZ OAO: S&P Suspends 'CCC+' Long-Term Corporate Credit Rating -------------------------------------------------------------- Standard & Poor's Ratings Services said it had suspended its 'CCC+' global scale long-term corporate credit rating and its 'ruBB' Russia national scale rating on Russia-based heavy- engineering holding company OAO OMZ (Uralmash-Izhora Group). "This follows the continued absence and postponement of an estimated release date for the company's International Financial Reporting Standards audited financial statements for the fiscal year ended Dec. 31, 2007, and consequently its interim 2008 accounts," said Standard & Poor's credit analyst Varvara Nikanorava. "The delay creates uncertainty regarding the company's true financial condition, with an unknown effect on credit quality." The last detailed consolidated financial information from the OMZ group was published following the quarter ended June 30, 2007. According to the company, the delay in release of the financial statements for full-year 2007 is technical in nature, due to first-time accounting for the joint venture with Metalloinvest, which the company entered into during 2007. Standard & Poor's may suspend a rating in circumstances if there is an expectation that the rating is likely to be reinstated. The rating suspension does not imply that OMZ is not servicing its obligations, or that company operations have deteriorated, but rather that important information has not been provided by the company. S&P will likely reinstate the ratings on the company after public release and analysis of the audit of the annual 2007 and interim 2008 financial statements along with other information that S&P typically requires to maintain the ratings. RUSSIAN FACTORING: S&P Cuts Ratings on 2 Classes of Notes to Low-B ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered and removed from CreditWatch negative its credit ratings on all classes of notes issued by Russian Factoring No. 1 S.A. These ratings were then withdrawn at the request of the issuer. These rating actions are driven mainly by the lack of visibility from the servicer on the operational situation following deterioration of its financial position, coupled with significant deterioration in the pool performance of this deal and the inability to provide the deal with required credit enhancement. On the basis of the monthly cash management report relating to the Dec. 15 interest payment date, the required notes total credit enhancement percentage was more than twice the required amount at closing causing the breach of an early amortization trigger. At the same time there has been a sharp reduction of collections on the underlying portfolio combined with deterioration in Eurokommerz's creditworthiness. We are concerned about the current financial position of Eurokommerz and its ability to service the transaction debt going forward. S&P understand that the financial difficulties faced by Eurokommerz are worsening rapidly. On December 11 and 19, the company defaulted on coupon payments on its domestic bonds for the total amount of RUR440 million. The company said has informed S&P that it has no financial means to make these payments. At the same time, the performance of Russian Factoring No. 1 has deteriorated significantly. As per the latest investor report, collections had dropped dramatically to lower than RUR1 billion from about RUR6 billion in August, and RUR7 billion in September 2008. The most recent delinquency ratio, comprising all assets overdue by more than 30 days, has more than doubled since the 4.3% recorded as of end-November 2008. Finally the credit enhancement available after the last payment date was equal to 34.0% for the senior notes and 29.8% for the mezzanine facility. This compares poorly with S&P's current required credit enhancement of over 60% for the senior tranches, and over 50% for the junior tranches. The required credit enhancement is derived dynamically and its significant increase follows rising MOSPRIME, the reference rate to which the interest due on the liabilities of the issuer is linked. The transaction closed on December 2007. The notes and the mezzanine loan are backed by factoring receivables originated by Eurokommerz, a factoring company based in Russia. Rating List Ratings Lowered And Removed From CreditWatch Negative Russian Factoring No. 1 S.A. RUR5.3 billion senior- and mezzanine facility notes Class To From ----- -- ---- Senior BB BBB/Watch Neg Mezzanine B BB/Watch Neg Ratings withdrawn Russian Factoring No. 1 S.A. RUR5.3 billion senior- and mezzanine facility notes Class To From ----- -- ---- Senior NR BB Mezzanine NR B SIBIR-LES LLC: Creditor Must File Claims by January 19 ------------------------------------------------------ Creditors of LLC Sibir-Les (Forestry) have until Jan. 19, 2009, to submit proofs of claims to: Ye. Pichuyev Temporary Insolvency Manager Aerovokzalnaya Str. 19/302 660022 Krasnoyarsk Russia The Arbitration Court of Krasnoyarskiy will convene at 10:00 a.m. on Mar. 17, 2009, to hear bankruptcy supervision procedure. The case is docketed under Case No. ?33�12082/2008. The Court is located at: The Arbitration Court of Krasnoyarskiy Office 9 Lenina Str. 143 Krasnoyarsk Russia The Debtor can be reached at: LLC Sibir-Les Kolesnichenko Str. 4/74 Kodinsk Kezhemskiy 663491 Krasnoyarskiy Russia SOV-TEKH-STROY LLC: Bankruptcy Hearing Set March 12 --------------------------------------------------- The Arbitration Court of Krasnoyarskiy will convene at 10:00 a.m. on March 12, 2009, to hear bankruptcy supervision procedure on LLC Sov-Tekh-Stroy (TIN 2463062270) (Construction). The case is docketed under Case No. ???-12698/2008. The Temporary Insolvency Manager is: S. Romanova Post User Box 152 Babayevskaya Str. 20 Kumertau 453303 Bashkortostan Russia The Court is located at: The Arbitration Court of Krasnoyarskiy Office 9 Lenina Str.143 Krasnoyarsk Russia The Debtor can be reached at: LLC Sov-Tekh-Stroy Akadem-gorodka Str. 50/38 660036 Krasnoyarsk Russia STINGART LLC: Moskovskaya Bankruptcy Hearing Set February 26 ------------------------------------------------------------ The Arbitration Court of Moskovskaya will convene at 10:00 a.m. on Feb. 26, 2009, to hear bankruptcy supervision procedure on LLC Stingart (TIN 5017027553) (Construction). The case is docketed under Case No. ?-41�14596/08. The Temporary Insolvency Manager is: O. Bessoltsova Office 61 Potapovskiy Perulok 9/11 101000 Moscow Russia The Debtor can be reached at: LLC Stingart Lenina Str. 5/2/232 Istra Moskovskaya Russia TRANS-STROY-INVEST CJSC: Creditors Must File Claims by Feb. 19 -------------------------------------------------------------- Creditors of CJSC Trans-Stroy-Invest (TIN 4218021165, PSRN 1024201755181)(Construction) have until Feb. 19, 2009, to submit proofs of claims to: V. Krasnoperov Insolvency Manager Karbysheva Str. 8 654029 Novokuznetsk Russia The Arbitration Court of Kemerovskaya commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. ?27�2161/2008�4. The Debtor can be reached at: CJSC Trans-Stroy-Invest Antonovskaya Str.116 654031 Novokuznetsk Russia URALSKIY LES: Court Names Temporary Insolvency Manager ------------------------------------------------------ The Arbitration Court of Sverdlovskaya appointed T. Ivanova as Temporary Insolvency Manager for LLC Uralskiy Les (Woodworking). The case is docketed under Case No. ?60�34683/08-S11. He can be reached at: Post User Box 366 620014 Yekaterinburg Russia The Debtor can be reached at: LLC Uralskiy Les Zavodskaya Str. 1a Chernoyarka Serov Sverdlovskaya Russia * MOSCOW OBLAST: Moody's Downgrades Currency Ratings to 'B3' ------------------------------------------------------------ Moody's Investors Service has downgraded the foreign and local currency ratings of the Oblast of Moscow to B3 from B1. The rating action reflects the Oblast's weakening stand-alone capacity to manage its tight debt repayment schedule going forward. Tightened market conditions with a dramatically increasing cost of funding and overall restricted access to financial markets could cause further hardships to the region's debt service capacity. The ratings remain on review for possible downgrade. "Going forward, the region's capacity to generate additional budget revenue for debt service will be constrained by the current downturn in the local and national economies, leading to a shortfall in tax proceeds," explains Alexander Proklov, a Moscow- based Moody's Vice President-Senior Analyst and lead analyst for this issuer. The resulting increased budgetary financing needs are coming at a time of tightening market conditions that constrain the ability of the Region to access the financial markets and massively increase its cost of funding. "The situation is further compounded by the region's large refinancing needs over the next 12 months, which will cause significant liquidity pressures in 2009," adds Mr. Proklov. The rating review will focus on three issues. First, Moody's intends to conduct a more detailed assessment of the liquidity needs of the region in the context of its new budget for 2009. Second, the review will consider the extent and predictability of federal government support, directly and through state-owned banks. This support will be an important factor in determining the Oblast's creditworthiness in the future. Finally, Moody's will analyze the factors leading to the missed put option payment and its efforts to restructure its indirect debt exposure. The last rating action was implemented by Moody's on 31 October 2008, when Moody's downgraded the Oblast's foreign and local currency issuer ratings to B1 from Ba2. The ratings were originally placed on review for possible downgrade on 6 October 2008. The principal methodologies used in rating Moscow Oblast were "Regional and Local Governments Outside the US" and "The Application of Joint-Default Analysis to Regional and Local Governments", which can be found at www.moodys.com in the Credit Policy & Methodologies directory, in the Ratings Methodologies sub-directory. Other methodologies and factors that may have been considered in the process of rating this issuer can also be found in the Credit Policy & Methodologies directory. Moscow Oblast is located in the area surrounding the City of Moscow. With 6.6 million inhabitants, it accounts for 4.5% of the total population of Russia, and its contribution to the national GDP is 4% of the total. The region posted average annual gross regional product growth of 7% in 2003-07. * OMSK CITY: S&P Withdraws 'B-' Long-Term Issuer Rating ------------------------------------------------------- Standard & Poor's Ratings Services said that it has withdrawn its 'B-' long-term issuer credit rating and its 'ruBBB' Russia national scale rating on the City of Omsk, at the city's request. The outlook at the time of the withdrawal was negative. "The ratings were constrained by the city's high exposure to refinancing risk, weak budgetary performance, low liquidity, and limited financial flexibility," said Standard & Poor's credit analyst Felix Ejgel. These risks were partially mitigated by the city's solid industrial development and the strong weight in revenues of personal income and property taxes, which are less volatile during an economic slowdown. * TVER OBLAST: S&P Puts 'BB- Issuer Rating on CreditWatch Negative ------------------------------------------------------------------ Standard & Poor's Ratings Services said it placed on CreditWatch with negative implications its 'BB-' global scale long-term issuer credit rating and 'ruAA-' Russia national scale rating on Tver Oblast, located in the Russian Federation (foreign currency BBB/Negative/A-3; local currency BBB+/Negative/A-2; Russia national scale 'ruAAA'). "The CreditWatch placement reflects higher risks posed by the likely weakening of the oblast's budgetary performance, combined with its increasing exposure to short-term debt, particularly under the conditions of its forthcoming proposed medium-term bond issue of about RUR2.5 billion," said Standard & Poor's credit analyst Irina Pilman. The oblast's management intends to borrow at the best possible conditions by placing its proposed issue as a three-year amortizing bond. However, it is possible that the bond may be issued with a put option in 2009. Should this be the case, and taking into account the rising cost of borrowing, S&P forecast that debt service would increase to about 18.3% of total revenues in 2009. This would make the oblast excessively exposed to short- term debt refinancing by year-end 2009 for its current rating level. If the bond is placed without a put option, debt service will be 10% of total revenues in 2009, which S&P would consider manageable. "We will resolve the CreditWatch once S&P has obtained more visibility not only on the terms and conditions of the bond, which Tver aims to issue over the coming days, but also on the oblast's willingness and capacity to adjust its 2009 budget, taking into account the expected sharp decline in revenues," said Ms. Pilman. If the oblast succeeds in placing its proposed medium-term bond in the coming days without any put options, and if it can also adjust its budget in order to reach a zero operating balance in 2009, S&P will likely affirm the rating. However, S&P would likely lower the ratings or revise the outlook if the bond is placed with the put option due in 2009, and/or if adjustments to the 2009 budget prove insufficient to eschew a significant deterioration of financial performance below current levels. ========= S P A I N ========= CAJA DE AHORROS: S&P Junks Ratings on Two Classes of Notes ---------------------------------------------------------- Standard & Poor's Ratings Services lowered its credit ratings on the class B to E notes issued by MADRID RMBS II, Fondo de Titulizacion de Activos and MADRID RMBS III, Fondo de Titulizacion de Activos. At the same time, S&P removed from CreditWatch negative the ratings on MADRID RMBS II's class B and C notes and MADRID RMBS III's class B notes. The ratings on the class A1, A2, and A3 notes are unaffected. The rating actions have resulted from increased delinquencies, defaults, and further cash reserve draws in both transactions. S&P has conducted a full credit and cash flow analysis of the most recent transaction information that S&P has received. The results of S&P's analysis show that the credit enhancement available for MADRID RMBS II's and MADRID RMBS III's class B to E notes was insufficient to maintain the current ratings. The notes, issued in December 2006 and July 2007, respectively, are backed by two portfolios of residential mortgage loans secured over residential properties in Spain. The loans were originated and are serviced by Caja de Ahorros y Monte de Piedad de Madrid (A+/Negative/A-1). The mortgage portfolios underlying these transactions continue to generate high levels of delinquencies, which have been steady rising since closing and do not appear to levelling off. At 4.63% and 5.18% of the current mortgage portfolio in Madrid RMBS II and III, respectively, the level of 90+ day delinquencies is well above the average for other Spanish residential mortgage-backed securities transactions with a similar seasoning. Recent performance data, combined with the characteristics of the portfolio suggest that delinquencies could continue to come through at a fast pace over the next few interest payment dates. Both portfolios are characterized by high weighted-average loan- to-value ratios. A significant portion of loans in arrears has migrated over time to a default status. The combination of the relatively high level of 90+ day delinquencies and the limited equity in those loans is likely to lead to further defaults and potentially reduced recoveries. Defaults in this transaction are defined as arrears greater than six months. Both transactions feature a structural mechanism that traps excess spread to provision for defaults. As a result of this mechanism, as well as a relatively fast take-up of delinquencies and rollouts to defaults, Madrid RMBS II has drawn on its cash reserve on several payment dates. On the latest interest payment date, it drew around EUR23.86 million, taking the level of its cash reserve to zero. Madrid RMBS III has drawn under its reserve fund on three interest payment dates in a row. Drawings under the cash reserve have been increasing over time: On the last payment date the transaction drew close to 50% (EUR49.9 million) of the initial EUR108 million cash reserve. The outstanding amount of the cash reserve after the latest payment date is EUR14 million, 13% of its target amount. When the cumulative default rates in Madrid RMBS II reach 8% of the initial balance, the priority of payments is altered to pay interest on class E notes after the senior classes amortize but before the cash reserve is replenished. Madrid RMBS III features a similar structural mechanism: In this case the trigger is set at 8.94% of the initial balance. As at the last investor report, the level of cumulative defaults for Madrid RMBS II and III was 5.77% and 3.86%, respectively. S&P's rating actions factor in the relative likelihood of nonpayment of interest from realized defaults and S&P's higher default risk assessment for the residual portfolios. Ratings List MADRID RMBS II, Fondo de Titulizacion de Activos EUR1.8 Billion Residential Mortgage-Backed Floating-Rate Notes Ratings Lowered And Removed From CreditWatch Negative Rating ------- Class To From ----- -- ---- B A AA/Watch Neg C BBB A/Watch Neg Ratings Lowered Rating ------- Class To From ----- -- ---- D B BB E CCC B MADRID RMBS III, Fondo de Titulizacion de Activos EUR3 Billion Residential Mortgage-Backed Floating-Rate Notes Ratings Lowered And Removed From CreditWatch Negative Rating ------- Class To From ----- -- ---- B A AA/Watch Neg Ratings Lowered Rating ------- Class To From ----- -- ---- C BBB A- D B BB E CCC B * SPAIN: EC Approves Guarantee Scheme for Credit Institutions ------------------------------------------------------------- The European Commission has approved under EC Treaty State aid rules a Spanish scheme to support the financial sector by providing guarantees to eligible financial institutions. The Commission found the measure to be in line with its Guidance Communication on State aid to overcome the financial crisis. In particular, the scheme is non-discriminatory, limited in time and scope, provides for behavioral constraints to avoid abuses and is subject to a market-oriented remuneration from the beneficiaries. The Commission therefore concluded that the scheme is an adequate means to remedy a serious disturbance of the Spanish economy and as such in line with Article 87.3.b of the EC Treaty. Competition Commissioner Neelie Kroes said: "In the current financial crisis it is important to address the liquidity problems of banks as they can adversely affect lending to the real economy. The Spanish scheme takes into account national particularities of the banking market in Spain while ensuring the coherence necessary to maintain a level playing field for all European banks." The state guarantee would cover, against remuneration, the issuance of notes, bonds and obligations admitted to the official secondary market in Spain. While the maturity of the financial instruments covered would be in principle between three months and three years, guarantees could be extended to instruments with a maturity of up to five years in exceptional circumstances. The scheme's overall budget is capped at EUR100 billion, which can be increased to EUR200 billion, if the market conditions request it. Only solvent banks have access to the guarantee scheme. The Commission decision covers a period of six months following to which Spain should terminate the scheme or renotify its extension to the Commission. The scheme contains elements of state aid but foresees various safeguards aimed at ensuring that the state intervention is proportionate, limited to what is necessary and adequate instruments to reach this goal, in accordance with the EU state aid rules, as laid down in the Commission's guidance document. In particular, the scheme provides for non-discriminatory access, as it will be open to all solvent Spanish credit institutions having a share of at least 1/1000 of the credit market, in as much as the guaranteed instruments have been issued during the past five years. The guarantee is limited in time and scope, as both its global budget and individual guarantees are capped. For instance, each bank may receive guarantees linked to its historical market share and the state can limit the guarantee amount when the risk in regard to the benefiting credit institution is deemed too high. To benefit from the guarantee, participating banks are required to pay a market-oriented fee, in line with recommendations from the European Central Bank. Moreover, beneficiaries will be subject to a series of behavioral commitments, to avoid an abusive use of the state support. These include restrictions on expansion and marketing. Finally, Spain committed to notify restructuring plans for each beneficiary that had effectively drawn on the guarantee and to report periodically to the Commission on the implementation of the scheme. In light of these commitments and conditions, the Commission concluded that the scheme is an adequate means to address a serious disturbance in the Spanish economy, in particular in combination with the already approved Fund for the Acquisition of Financial Assets from financial institutions which also targeted funding problems of Spanish banks and had the goal of supporting lending to the real economy. The strict safeguards will ensure that the state support is limited to what is necessary to stabilize the Spanish financial sector and that negative spill- over effects are minimized. =========== S W E D E N =========== FORD MOTOR: Moody's Downgrades Senior Unsecured Rating to 'Caa1' ---------------------------------------------------------------- Moody's Investors Service downgraded the senior unsecured rating of Ford Motor Credit LLC to Caa1 from B3 after the Corporate Family Rating of its ultimate parent, Ford Motor Company, was downgraded to Caa3 from Caa1. The outlook for the ratings of both firms is negative. One consideration in the downgrade of Ford Credit's ratings is the increased potential that Ford could restructure its liabilities through a distressed debt exchange and the ramifications of such an action for Ford Credit. A distressed offering could be seen by Ford as a necessary condition to negotiating labor contract concessions equal to those obtained by GM and Chrysler in connection with their receiving support from the U.S. government. Moody's believes that there is a low probability that such a distressed offering by Ford would also involve Ford Credit's creditors. However, until there is greater clarity regarding the operating prospects of the Detroit automakers, the auto finance affiliates, including Ford Credit, could continue to face heightened credit market uncertainty, thereby constraining their financial and operating flexibility. The Ford Credit downgrade also reflects the potential that extended credit market dislocations, coupled with the global economic downturn, could have the effect of permanently weakening the longer-term operating fundamentals of the auto finance captives of the Detroit automakers. Should capital market access and funding costs not return to historic norms, Ford Credit's future business activities would likely narrow in scope, its earnings and margins would erode, and its ability to absorb cyclical credit losses would weaken. Ford Credit continues to address current market conditions by undertaking actions to preserve liquidity and capital levels. In Moody's view, Ford Credit has sufficient cash resources to support near-term operating and debt repayment requirements, when considering the firm's cash balances, operating cash flow, and cash generated by expected further declines in earning asset levels. Moody's expects Ford Credit's leverage profile to remain adequately positioned. Moody's links the ratings of Ford Credit with those of Ford due to the business and ownership connections that tie the two firms' performance and prospects. However, Moody's believes that the risk of lower potential recovery that would accompany a Ford distressed debt exchange is not likely to pertain to creditors of Ford Credit. Therefore, the recovery differential between the two sets of creditors is supportive of the wider ratings notching between Ford and Ford Credit that results from the rating actions. Ford Credit's negative ratings outlook, mirroring the negative outlook at Ford, is based upon continuing operating uncertainties in the auto sector, as well as declining asset quality trends and adverse funding conditions facing Ford Credit. The last rating action was on November 7, 2008 when the ratings of Ford Motor Credit LLC were downgraded to B3 from B2 with a negative outlook. Ratings affected by the actions include: Issuer: Ford Motor Credit LLC: -- Senior unsecured: to Caa1 from B3, Subordinate shelf: to (P)Caa3 from (P)Caa2 Issuer: FCE Bank Plc: -- Senior unsecured: to Caa1 from B3 Issuer: Ford Credit Australia Ltd.: -- Backed senior unsecured: to Caa1 from B3 Issuer: Ford Credit Canada Limited: -- Backed senior unsecured: to Caa1 from B3 Issuer: Ford Motor Credit Co. of New Zealand Ltd.: -- Backed senior unsecured: to Caa1 from B3 Issuer: Ford Credit Capital Trusts I, II, and III: -- Backed preferred shelf: to (P)Caa3 from (P)Caa2 Ford Motor Credit LLC is the Dearborn, Michigan-based captive finance arm of Ford Motor Company. The company reported third quarter 2008 total assets of US$155 billion. FORD MOTOR: Moody's Downgrades CFR to 'Caa3'; Outlook Negative -------------------------------------------------------------- Moody's Investors Service lowered the Corporate Family Rating and Probability of Default Rating of Ford Motor Company to Caa3 from Caa1 and lowered the company's Speculative Grade Liquidity rating to SGL-4 from SGL-3. The outlook is negative. The downgrade reflects the increased risk that Ford will have to undertake some form of balance sheet restructuring in order to achieve the same UAW concessions that General Motors and Chrysler are likely to achieve as a result of the recently-approved government bailout loans. Such a balance sheet restructuring would likely entail a loss for bond holders and would be viewed by Moody's as a distressed exchange and consequently treated as a default for analytic purposes. Bruce Clark, Senior Vice President with Moody's said, "In return for its loans to GM and Chrysler, Washington is going to demand that all stake holders step up and make sacrifices. This will mean wage and benefit concessions from the UAW, and haircuts to debt for creditors." Clark went on to explain, "Even if Ford ends up not needing government loans because of its stronger liquidity position, the company must have UAW parity with GM and Chrysler. But, the UAW is unlikely to make concessions to Ford unless Ford's creditors also bear some pain in the form of a debt restructuring." The terms of the recently-approved US$17.4 billion in short-term government financing for GM and Chrysler include important operational and financial targets. Substantial progress in achieving these targets will be important to: the government's decision to extend these loans beyond March 31, 2009; the provision of any additional funds that might be needed; and, the restoration of the companies' operational competitiveness. These targets include substantial wage and benefit concessions by the UAW and a reduction in debt by as much as two-thirds through a debt for equity exchange. Moody's expects that considerable progress will be made in both of these targeted areas. Ford has maintained that it is not facing a near-term liquidity shortfall, and it is not seeking short-term financial assistance from the government. Rather, it has requested the provision of up to US$9 billion in bridge financing that would be available should market and demand conditions during 2009 be worse than the company anticipates. Nevertheless, if GM and Chrysler achieve UAW concessions in conjunction with a forced reduction in debt, Moody's believes it will be critical for Ford to obtain similar labor concessions in order to remain competitive. However, Ford is unlikely to receive those concessions in the absence of some form of debt reduction that would entail a loss to bond holders. Moody's expects that the framework of the government loans extended to GM and Chrysler will create considerable labor and cost of capital motivations for Ford to undertake a debt restructuring even if the company does not have to draw on bailout funds from the government. Moreover, it is possible that the provision of the committed borrowing facility that Ford is requesting from the government could have labor concession and debt reduction provisions similar to those contained in the loans granted to GM and Chrysler. Ford's liquidity position at September 30, 2008 consisted of US$18.9 billion in cash and US$10.7 billion in undrawn committed credit facilities. The company believes that this liquidity profile, combined with the cash saving initiatives it is undertaking, should enable it to fund itself through 2009. However, the weak outlook for the US economy, depressed consumer confidence, and falling automotive demand in the US and Europe could severely strain the company's liquidity position during 2009. Ford's current operating plan anticipates that US light vehicle sales will approximate 12.2 million units during 2009. This planning assumption is significantly higher than the 10.3 million seasonally adjusted annual rate of US automotive shipments for November. As a result of these mounting operating pressures Ford's Speculative Grade Liquidity rating was lowered to SGL-4, indicating weak liquidity during the coming 12 to 15 months. These same operating pressures result in the negative rating outlook. The last rating action on Ford was an affirmation of the company's Caa1 Corporate Family Rating on December 3, 2008. Ford Motor Company, headquartered in Dearborn, Michigan, is a leading global automotive manufacturer. GENERAL MOTORS: S&P Won't Raise Credit Rating Above CCC on Loans ---------------------------------------------------------------- Standard & Poor's Ratings Services said that despite the nearly US$21 billion in emergency loans announced by the U.S. and Canadian governments to help General Motors Corp. and Chrysler LLC avert near-term bankruptcies, S&P is not likely to raise the credit ratings on these companies above the 'CCC' category in the near future. S&P lowered the corporate credit rating on Chrysler to 'CC' from 'CCC+', reflecting S&P's view of the likelihood of a distressed exchange offer for the company's secured debt. S&P also revised its post-default recovery expectations on GM's unsecured debt because of the collateral to be pledged and the relative priority of the new government loans, leading S&P to lower the issue-level ratings on this debt. The U.S. government announced Friday it would provide a total of US$9.4 billion in loans to GM in two payments, on Dec. 29, 2008, and Jan. 16, 2009; another US$4 billion could become available on Feb. 17, 2009. The U.S. government will lend US$4 billion to Chrysler on Dec. 29, 2008. On Saturday, the Canadian and Ontario governments announced they would together provide about US$3.3 billion to the Canadian units of GM and Chrysler in stages over the next two months. Sweden and Germany have also pledged to aid their local units of the Michigan-based automakers. S&P views the actions as necessary to give GM and Chrysler sufficient liquidity to run their automotive operations for a few more months, as opposed to facing severe liquidity shortfalls and heightened risks of bankruptcies by early January 2009. In addition, S&P see these loans as underscoring the willingness of the U.S. and other governments to prevent an abrupt and disorderly collapse of the automotive industry, which would heighten pressures on an already weak economy. However, S&P does not believe governments are willing to provide open-ended support to these companies. President Bush, in announcing the U.S. loan package, said the assistance will provide a "brief window" for restructuring outside of bankruptcy court, and if they are unable to do so, the loans "will provide time for companies to make the legal and financial preparations necessary for an orderly Chapter 11 process." In addition, S&P believes the bankruptcy risk remains high for GM and Chrysler, as well as for Ford Motor Co., for the rest of next year because of a range of fundamental challenges that will not be alleviated by the government funding and, in S&P's view, will keep cash outflows high or potentially erode liquidity. In S&P's view, these challenges include: -- Very weak auto sales in the U.S. and falling demand in Europe and other global markets. S&P expects U.S. light-vehicle sales to decline to 11.1 million units in 2009, from an expected 13.1 million in 2008. Monthly sales in the U.S. could remain even lower on a seasonally adjusted annual basis in December and early 2009 after averaging about 10.4 million units per month in October and November; -- The need to promptly carry out--as part of the deal to receive federal loans--a series of complex restructuring actions, including negotiating lower wages and benefits and revised work rules with unions, cutting more plant capacity, rationalizing dealer networks, and potentially extracting savings from suppliers; -- Potential for further market share losses caused by continued or increased customer concerns about these companies' long- term financial viability; -- Constrained credit markets, which have sharply reduced the ability of GMACLLC and DaimlerChrysler Financial Services Americas LLC to finance new purchases of GM or Chrysler cars. S&P is also increasingly concerned about their ability to provide adequate inventory financing for dealers. The federal loans announced on Friday do not directly bolster the struggling finance affiliates; -- Potential supplier failures caused by sharply lower automobile volumes and extended holiday shutdowns of assembly plants. Even if the worst-case scenario of an abrupt bankruptcy by GM or Chrysler is avoided, weaker suppliers still face major liquidity challenges for the foreseeable future; and -- In GM's case, the unresolved exposure to bankrupt major supplier Delphi Corp. Delphi has been unable to emerge from bankruptcy protection and recently obtained a forbearance agreement from debtor-in-possession lenders to keep funding in place until June 30, 2009. However, if Delphi is unable to extend this agreement or find alternative funding, S&P believes it may be forced to cease operations, which would put enormous pressure on GM's ability to maintain its North American operations. The incoming Obama Administration may provide more extensive loans to GM and Chrysler, provided that the companies present a plan for financial viability to the government by Feb. 17, 2009, as stipulated in the preliminary loan documents. However, S&P can envision scenarios under which such funding could be provided as part of a prearranged bankruptcy filing. Under terms of the current loans, GM must reduce its unsecured indebtedness by at least two-thirds through an exchange offer for equity or new debt. Chrysler does not have unsecured debt but said Friday it intends to work with its secured lenders to obtain concessions. Although it did not provide specific details, S&P interpret this to mean that Chrysler will offer to exchange some or all of its secured debt for equity or new debt at a steep discount to face value. S&P likely would consider such an offer to be a distressed exchange and, as such, tantamount to a default. Ford is not currently seeking loans from the government because it has an undrawn US$10.7 billion revolving credit facility, although it has asked the U.S. government for a US$9 billion credit line to help ensure that its liquidity remains sufficient through 2009 if industry conditions remain very weak. If Ford were to receive such a large credit line, depending on its terms S&P could revise its recovery ratings and potentially lower S&P's issue-level debt ratings to reflect worsened recovery prospects. However, S&P notes that its recovery ratings on Ford's unsecured debt are currently at the lowest level of '6', indicating S&P's expectation of very low (0 to 10%) recovery in the event of a default. S&P's recovery ratings on U.S. automaker debt are based on simulated default scenarios that each include, among other things, the assumption of a bankruptcy filing, multi-year reorganization, and eventual emergence from bankruptcy. S&P's expected recovery prospects for secured and unsecured debtholders vary by automaker, largely reflecting the company-specific mix of secured and unsecured debt in the capital structure rather than vastly different fundamentals for each company. Regarding the rated auto supplier universe, S&P placed the ratings on 15 companies on CreditWatch on Nov. 14, 2008, because of their significant exposure to the Michigan-based automakers. S&P expects to complete S&P's review of these companies in January 2009. Although the immediate risk of a GM or Chrysler bankruptcy now seems reduced, the risk remains high in 2009 in S&P's view, and production levels will likely be low enough -- even without an automaker bankruptcy -- to inflict further severe distress on the supply base. Accordingly, S&P believes few auto supplier ratings will be affirmed at current levels, and many ratings may be lowered by more than one notch. GENERAL MOTORS: S&P Downgrades Issue-Level Rating to 'C' -------------------------------------------------------- Standard & Poor's Ratings Services said it has lowered its issue- level ratings on the unsecured debt of General Motors Co. and General Motors of Canada Ltd. to 'C' from 'CC'. At the same time, S&P revised its recovery rating on GM's debt to '6' from '4', indicating that lenders can expect to receive negligible (0 to 10%) recovery in the event of a payment default. The rating actions reflect GM's planned receipt of up to US$13.4 billion of U.S. government loans, plus another approximately US$2.5 billion from the Canadian and Ontario governments. In addition, Germany and Sweden have signaled that they may make loans to GM units in those countries, which would further diminish the value to unsecured creditors of the equity in foreign subsidiaries. "We expect these U.S. and Canadian government loans to be backed by a security package that includes currently unencumbered assets, which would lead to a significant decrease in value for unsecured debtholders in the event of a bankruptcy or payment default," said Standard & Poor's credit analyst Robert Schulz. The likelihood of GM's initiating a distressed exchange offer on its unsecured debt is already reflected in the company's corporate credit rating of CC/Negative/--, which has not changed. In addition, issue-level ratings on GM's US$4.48 billion senior secured revolving credit facility and US$1.5 billion term loan remain at 'CCC,' two notches above the corporate credit rating. The recovery rating on the secured debt remains at '1,' indicating expectations of very high (90% to 100%) recovery in the event of a payment default. ===================== S W I T Z E R L A N D ===================== GENERAL MOTORS: Court Cuts Legal Fees in Investors Settlement ------------------------------------------------------------- The Associated Press reports that U.S. District Judge Gerald Rosen in Detroit has reduced legal fees in General Motors Corp.'s US$303 million settlement with investors. The AP states that the lawyers represented people who invested in GM stock or bonds over a six-year period. The AP relates that two lead lawyers and five law firms, who represented the people who invested in GM stock or bonds over a six-year period, asked for a 19% share in the settlement -- almost US$60 million -- which Judge Rosen found excessive. According to The AP, the judge instead allowed the lawyers to get 15%, or US$45 million, which Judge Rosen said would add up to a rate of US$1,825 per hour. The complainants, according to The AP, claimed that they suffered due to GM's accounting mistakes and misleading statements about the health of the firm. Their lawyers said that the case was very risky due to GM's financial condition and that there was no guarantee of victory, The AP relates. SUV Plant in Dayton Closes The AP reports that GM's sport-utility vehicle plant in the Dayton suburb of Moraine has closed, after operating for 27 years. The AP states that Tuesday was the final day of production at the plant. According to The AP, GM said in June that it planned to close the plant as high gasoline prices drove consumers away from SUVs. The AP says that about 1,080 hourly people worked at the plant. About 572 workers will be working at GM's Moraine engine plant, which the company co-owns with Isuzu. Restructuring Will Wipe Out Stockholders, Credit Suisse Analyst Says Greg Bensinger and Angela Greiling Keane at Bloomberg New report that Credit Suisse Group AG analyst Christopher Ceraso said that the restructuring needed to win government bailout could wipe out GM's stockholders. Bloomberg quoted Mr. Ceraso as saying, "Over the next two months, as bondholders, union representatives and company management meet to hammer out concessions, we think it will become increasingly clear that the enormous sacrifice of value on the part of the union and bondholders will require the complete or near-complete elimination of the existing GM equity." The U.S. government will also claim as much as 20% of GM's equity value in exchange for the loans, Bloomberg states, citing Mr. Ceraso. Bloomberg relates that Mr. Ceraso cut his rating on GM shares to "underperform" from "neutral". Bloomberg states that on Dec. 22, Mr. Ceraso cut in half the one-year target price on GM to US$1. Citing Mr. Ceraso, Bloomberg says that GM may still end up in bankruptcy if debtholders and labor groups fail to reach an agreement. About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM Europe is based in Zurich, Switzerland, while General Motors Latin America, Africa and Middle East is headquartered in Miramar, Florida. As reported in the Troubled Company Reporter on Nov. 10, 2008, General Motors Corporation's balance sheet at Sept. 30, 2008, showed total assets of US$110.425 billion, total liabilities of US$170.3 billion, resulting in a stockholders' deficit of US$59.9 billion. * * * As reported in the Troubled Company Reporter on Nov. 11, 2008, Standard & Poor's Ratings Services lowered its ratings, including the corporate credit rating, on General Motors Corp. to 'CCC+' from 'B-' and removed them from CreditWatch, where they had been placed with negative implications on Oct. 9, 2008. S&P said that the outlook is negative. Fitch Ratings, as reported in the Troubled Company Reporter on Nov. 11, 2008, placed the Issuer Default Rating of General Motors on Rating Watch Negative as a result of the company's rapidly diminishing liquidity position. Given the current liquidity level of US$16.2 billion and the pace of negative cash flows, Fitch expects that GM will require direct federal assistance over the next quarter and the forbearance of trade creditors in order to avoid default. With virtually no further access to external capital and little potential for material asset sales, cash holdings are expected to shortly reach minimum required operating levels. Fitch placed these on Rating Watch Negative: -- Senior secured at 'B/RR1'; -- Senior unsecured at 'CCC-/RR5'. As reported in the Troubled Company Reporter on June 24, 2008, DBRS has placed the ratings of General Motors Corp. and General Motors of Canada Limited Under Review with Negative Implications. The rating action reflects the structural deterioration of the company's operations in North America brought on by high oil prices and a slowing U.S. economy. MINJAN JSC: Creditors Must File Proofs of Claim by Jan. 1 --------------------------------------------------------- Creditors owed money by JSC Minjan are requested to file their proofs of claim by Jan. 1, 2009, to: Ofer Becker Bellariastrasse 61 8038 Zurich Switzerland The company is currently undergoing liquidation in Zug. The decision about liquidation was accepted at an extraordinary shareholders' meeting held on Nov. 6, 2008. ROCHE ADVISER: Deadline to File Proofs of Claim Set Jan. 1 ---------------------------------------------------------- Creditors owed money by LLC Roche Adviser are requested to file their proofs of claim by Jan. 1, 2009, to: JSC RohrerTreuhand Nelkenstrasse 2 6060 Sarnen Switzerland The company is currently undergoing liquidation in Sarnen. The decision about liquidation was accepted at an extraordinary shareholders' meeting held on Nov. 14, 2008. TRIDENT HOLDING: Creditors Have Until Jan. 1 to File Claims ------------------------------------------------------------ Creditors owed money by LLC Trident Holding are requested to file their proofs of claim by Jan. 1, 2009, to: JSC Grivo Bahnhofstrasse 94 8001 Zurich Switzerland The company is currently undergoing liquidation in Zurich. The decision about liquidation was accepted at an extraordinary shareholders' meeting held on Nov. 3, 2008. VORICO JSC: Proofs of Claim Filing Deadline is Jan. 1 ----------------------------------------------------- Creditors owed money by JSC Vorico are requested to file their proofs of claim by Jan. 1, 2009, to: JSC Datwyler Treuhand Grundstrasse 72b 8712 Stafa Switzerland The company is currently undergoing liquidation in Stafa. The decision about liquidation was accepted at an extraordinary shareholders' meeting held on Feb. 7, 2007. ============= U K R A I N E ============= AGRO-PROGRESS LLC: Creditors Must File Claims by January 7 ---------------------------------------------------------- Creditors of LLC Agro-Progress (EDRPOU 30713734) have until Jan. 7, 2009, to submit proofs of claim to: Mrs. Tatiana Viknianskaya Temporary Insolvency Manager Tel: 8(050)5228757 The Arbitration Court of Chernovcy commenced bankruptcy proceedings against the company after finding it insolvent on Sept. 10, 2008. The case is docketed as 10/206/B. The Economic Court of Chernovcy O. Kobylianska Str. 14 58000 Chernovcy Ukraine The Debtor can be reached at: LLC Agro-Progress Terebleche Glybotsky Chernovcy Ukraine DOKPHARM LLC: Creditors Must File Claims by January 7 ----------------------------------------------------- Creditors of LLC Delta-Pharm-Plus Subsidiary Company Dokpharm (EDRPOU 32008000) have until Jan. 7, 2009, to submit proofs of claim to: Mr. Maxim Kolosar Temporary Insolvency Manager Apt. 77 Energeticheskaya Str. 54 Novy Svet Starobeshevsky 87230 Donetsk Ukraine The Arbitration Court of Donetsk commenced bankruptcy proceedings against the company after finding it insolvent on Nov. 26, 2008. The case is docketed as 45/225B. The Economic Court of Donetsk Artema Str. 157 83048 Donetsk Ukraine The Debtor can be reached at: LLC Delta-Pharm-Plus Subsidiary Company Dokpharm Batischev Str. 26 83004 Donetsk Ukraine DONBASS MECHANICAL: Creditors Must File Claims by January 7 ----------------------------------------------------------- Creditors of Labour Red Banner Order Cjsc Building-Assembly Firm Donbass Mechanical Assembly (EDRPOU 01415393) have until Jan. 7, 2009, to submit proofs of claim to: Mrs. Tatiana Pashkova Temporary Insolvency Manager Apt. 50 Kuybishev Str. 240 83122 Donetsk Ukraine The Arbitration Court of Donetsk commenced bankruptcy proceedings against the company after finding it insolvent on Nov. 12, 2008. The case is docketed as 27/172B. The Economic Court of Donetsk Artema Str. 157 83048 Donetsk Ukraine The Debtor can be reached at: Labour Red Banner Order Cjsc Building-Assembly Firm Donbass Mechanical Assembly Eupatoriyskaya Str. 8 87515 Mariupol Donetsk Ukraine INTERPIPE LTD: S&P Downgrades Corporate Credit Rating to 'SD' ------------------------------------------------------------- Standard & Poor's Ratings Services said that it has lowered to 'SD' (selective default) from 'CC' its long-term corporate credit rating on Ukrainian steel pipe producer Interpipe Ltd. S&P also lowered the issue-level rating on the company's US$200 million debt to 'D' from 'C', and the Ukrainian national scale rating to 'SD' from 'uaCC'. The recovery rating of '5' on Interpipe's unsecured notes remains unchanged. The downgrade reflects the announcement by Millen Financial Ltd. (not rated) that it will proceed with the payment of the bonds validly tendered at 47% of par, with a settlement, as well as S&P's understanding that some bonds have been tendered, which reflects the effective completion of the tender offer. The rating action is in line with S&P's previous indications: As S&P noted when S&P lowered the corporate credit rating to 'CC' on Dec. 16, 2008, S&P considers this well-below-par offer to be tied to a distressed company and, as such, tantamount to a default, bearing in mind that Millen is ultimately owned by the same shareholders as Interpipe. S&P will re-evaluate the corporate credit rating shortly; based on the information S&P has at the moment, S&P does not expect to assign a long-term rating higher than 'CCC+' in the short term. KHARKOV TRACTOR: Creditors Must File Claims by January 7 -------------------------------------------------------- Creditors of LLC Kharkov Tractor Plant Trading House (EDRPOU 32563935) have until Jan. 7, 2009, to submit proofs of claim to: Mr. V. Vakulenko Temporary Insolvency Manager Stadionnaya Str. 22 Sakhnovschina Kharkov Ukraine The Arbitration Court of Kharkov commenced bankruptcy proceedings against the company after finding it insolvent on Oct. 13, 2008. The case is docketed as B-39/133-08. The Economic Court of Kharkov Derzhprom 8th Entrance Svoboda Square 5 61022 Kharkov Ukraine The Debtor can be reached at: LLC Kharkov Tractor Plant Trading House Moscow Avenue, 275 Kharkov Ukraine LVOV INSTRUMENTS: Creditors Must File Claims by January 7 --------------------------------------------------------- Creditors of declared LLC Lvov Instruments Plant (EDRPOU 30275220) have until Jan. 7, 2009, to submit proofs of claim to: Mr. Oleg Kobelnik Liquidator Dovbush Str. 21 Pustomity 81100 Lvov Ukraine The Arbitration Court of Lvov commenced bankruptcy proceedings against the company after finding it insolvent on Jan. 7, 2009. The case is docketed as 31/271. The Economic Court of Lvov Lichakivska Str. 128 79010 Lvov Ukraine The Debtor can be reached at: LLC Lvov Instruments Plant General Kurmanovich Str. 2 79040 Lvov Ukraine PIUK LTD: Creditors Must File Claims by January 7 ------------------------------------------------- Creditors of LLC Piuk Ltd. (EDRPOU 35633783) have until Jan. 7, 2009, to submit proofs of claim to: The Economic Court of Kiev B. Hmelnitskij Boulevard 44-B 01030 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 44/396-b. The Debtor can be reached at: LLC Piuk Ltd. Panfilovtsev Str. 1 01015 Kiev Ukraine TECHNOTON LLC: Creditors Must File Claims by January 7 ------------------------------------------------------ Creditors of LLC Technoton (EDRPOU 30996395)have until Jan. 7, 2009, to submit proofs of claim to: Mrs. Svetlana Kovina Liquidator Apt. 65 Olkhovsky quarter, 14 91015 Lugansk Ukraine The Arbitration Court of Lugansk commenced bankruptcy proceedings against the company after finding it insolvent on Nov. 18, 2008. The case is docketed as 22/50b. The Economic Court of Lugansk Geroiv VVV Square 3a 91000 Lugansk Ukraine The Debtor can be reached at: LLC Technoton Gastello Str. 39 Lugansk Ukraine TENDER GROUP: Creditors Must File Claims by January 7 ----------------------------------------------------- Creditors of LLC Tender Group (EDRPOU 35761599) have until Jan. 7, 2009, to submit proofs of claim to: The Economic Court of Kiev B. Hmelnitskij Boulevard 44-B 01030 Kiev Ukraine The Arbitration Court of Kiev commenced bankruptcy proceedings against the company after finding it insolvent on Nov. 18, 2008. The case is docketed as 44/391-b. The Debtor can be reached at: LLC Tender Group Panfilovtsev Str. 1 01015 Kiev Ukraine UKRAINIAN PAPER: Creditors Must File Claims by January 7 -------------------------------------------------------- Creditors of LLC Science-Production Enterprise Ukrainian Paper Packaging (EDRPOU 32209097) have until Jan. 7, 2009, to submit proofs of claim to: The Economic Court of Kiev B. Hmelnitskij Boulevard 44-B 01030 Kiev Ukraine The Arbitration Court of Kiev commenced bankruptcy proceedings against the company after finding it insolvent on Nov. 19, 2008. The case is docketed as 23/155-b. The Debtor can be reached at: LLC Science-Production Enterprise Ukrainian Paper Packaging Apt. 1 Grigorenko avenue, 38 02140 Kiev Ukraine =========================== U N I T E D K I N G D O M =========================== ARLO X: Moody's Cuts Rating on EUR10.5 Million Notes to 'Caa1' -------------------------------------------------------------- Moody's Investors Service has downgraded its ratings of one class of notes issued by ARLO X Limited. This transaction is managed synthetic single tranche CDO. According to Moody's, the rating actions are the result of deterioration in the credit quality of the transaction's reference portfolio, which includes but is not limited to exposure to Lehman Brothers Holdings Inc., which filed for protection under Chapter 11 of the U.S. Bankruptcy Code on September 15, 2008; Fannie Mae and Freddie Mac, which were placed into the conservatorship of the U.S. government on September 8, 2008; and one Icelandic bank, specifically Kaupthing Bank hf. The transaction also has a significant exposure to other corporate names which continue to deteriorate in the current economic environment. This will weigh on the ratings of the tranches in this transaction. Moody's initially analyzed and continues to monitor this transaction using primarily the methodology and its supplements for corporate synthetic CDOs as described in Moody's Special Reports: -- Moody's Approach To Rating Synthetic CDOs (July 2003) -- Moody's Revisits Its Assumptions Regarding Corporate Default (and Asset) Correlations for CDOs (November 2004) -- Understanding Collateral Risks of Funded Synthetics in CDOs (June 2006) The rating action is: ARLO X Limited (1) Series 2007 (CDO Blau) EUR10,500,000 Secured Limited Recourse Credit-Linked Notes due 2014 -- Current Rating: Caa1 -- Prior Rating: Baa2 -- Prior Rating Date: 17 April 2008, downgraded to Baa2 from A2 BATHSIDE BAY: Appoints Joint Liquidators from Ernst & Young ----------------------------------------------------------- On Dec. 10, 2008, Elizabeth Anne Bingham and Kerry Lynne Trigg of Ernst & Young LLP were appointed joint liquidators for the creditors' voluntary winding-up proceeding of: -- Bathside Bay Properties Ltd., -- Mv Skywind Ltd., -- Fast Ferries Ltd., -- Seacat Ltd., -- Hoverspeed Gb Ltd. and -- Sea Containers Ferries Ltd. These companies can be reached through Ernst & Young LLP at: 1 More London Place London SE1 2AF England BOOTH IMPERIAL: Taps Joint Liquidators from BDO Stoy Hayward ------------------------------------------------------------- Dermot Power and Matthew Dunham of BDO Stoy Hayward LLP were appointed joint liquidators of Booth Imperial Ltd. on Nov. 24, 2008, for the creditors' voluntary winding-up proceeding. The company can be reached through BDO Stoy Hayward LLP at: Commercial Buildings 11-15 Cross Street Manchester M2 1BD England BRITISH AIRWAYS: Orders 11 New Generation Fuel Efficient Aircraft ----------------------------------------------------------------- British Airways plc has placed firm orders for a fleet of 11 new generation fuel efficient aircraft that will offer passengers unrivaled levels of space and comfort on board. The airline's wholly owned subsidiary BA CityFlyer is to take delivery of the first of its new Embraer aircraft, which will fly exclusively from London City Airport, from September 2009. Firm orders have been placed for six Embraer 170 and five Embraer 190SR efficiency jets, known as E-jets, with options for three more in an investment worth US$376 million, based on current list prices. They will replace the current fleet of 10 Avro RJ100 and two RJ85 aircraft operated by BA CityFlyer. The new aircraft will be greener and more fuel efficient with significantly lower carbon dioxide emissions. This was a key consideration in the order. The Embraer 190SRs and Embraer 170s will operate on routes from London City Airport to Scotland, Ireland and Europe. A "double-bubble" fuselage design means there is more personal space for passengers and with four-abreast seating throughout the aircraft, everyone will have the choice of either a window or aisle seat. Peter Simpson, managing director of BA CityFlyer, said: "We are very excited about this new fleet of fuel efficient aircraft which will not only help us to meet our environmental objectives but also provide more space and comfort for our customers. "This significant investment in new aircraft further demonstrates British Airways' commitment to services into and out of London City for our customers. "Having the combination of the Embraer 170s and 190SRs in the same fleet will give us greater flexibility, enabling us to match capacity with demand on routes within our existing and future network." About British Airways Headquartered in Harmondsworth, England, British Airways Plc -- http://www.ba.com/-- operates of international and domestic scheduled and charter air services for the carriage of passengers, freight and mail, and provides of ancillary services. The British Airways group consists of British Airways plc and a number of subsidiary companies including in particular British Airways Holidays Ltd. and British Airways Travel Shops Ltd. BA has offices in India and Guatemala. * * * As reported in the TCR-Europe on Nov. 18, 2008, Moody's Investors Service placed all ratings of British Airways plc (Baa3 Corporate Family Rating - CFR); Ba1 senior unsecured and the Ba2 rating of the perpetual guaranteed preferred securities on review for possible downgrade. BRITISH ENERGY: EU Clears Proposed Acquisition by France's EdF -------------------------------------------------------------- The European Commission has approved under the EU Merger Regulation the proposed acquisition of British Energy (BE) by Electricite de France (EdF). The Commission's decision is conditional upon EdF's commitment to divest the power generation plant at Sutton Bridge in the UK (owned by EdF) and at Eggborough (owned by BE), to sell certain minimum volumes of electricity in the British wholesale market, to unconditionally divest a site potentially suitable for building a new nuclear power station located at either Dungeness or Heysham in the UK at the purchaser's choice and to end one of the merged entity's three grid connection agreements with the National Grid at Hinkley Point in the UK. The Commission concluded that the transaction, as modified by these commitments, would not significantly impede effective competition in the European Economic Area (EEA) or any substantial part of it. Electricite de France S.A. (EdF) is a company incorporated under the laws of France active in the generation and wholesale trading of electricity and in the transmission, distribution and retail supply of electricity to all groups of customers. In the UK, it is active mainly in coal and gas power generation, wholesale, supply and distribution of electricity. British Energy (BE) is a UK-based company active in the markets for the generation and wholesale of electricity and supply to industrial and commercial customers. BE has a predominantly nuclear power generation portfolio. The activities of EdF and BE overlap at the levels of generation and wholesale as well as the supply of electricity to industrial and commercial customers. Although the combined entity would not have extremely high market shares, the Commission found during its investigation that the transaction, as initially notified, would have been likely to raise serious competition concerns in four main areas. Firstly, due to the combination of the flexible generation portfolio of EdF and the base-load generation portfolio of BE's nuclear power plants, the Commission was concerned that the proposed transaction could have made it easier for the merged entity to withdraw electricity supplies from the market in order to increase price. Secondly, the Commission was concerned that the combination of the short generation position of EdF and the long generation position of BE was likely to lead to an increased internal use of electricity that would otherwise have been sold to the market. This would have led to a reduction of liquidity which could have had negative effects in both the wholesale and the retail supply markets. Thirdly, the Commission was concerned that there are a limited number of sites likely to be suitable for the construction of a first wave of new nuclear reactors in the framework of the UK policy on building new nuclear power stations. BE owns many of the sites most likely to be suitable for new nuclear build, while EdF owns key land at two such locations. The transaction, as originally notified would therefore lead to a high concentration in the ownership of sites most likely to be suitable for new nuclear build. Finally, the combination of EdF and BE's current rights to connections to the electricity transport network would have enabled the merged entity to hold connection rights beyond its combined capacity expansion plans, with the risk of unduly delaying power generation projects of its competitors. To address the above concerns, the parties submitted remedies. Further to the results of the market test of these remedies and in its own assessment, the Commission found that the remedies proposed were not sufficient to remove the competition concerns with respect to the two first areas of concern. However, subsequently, the parties submitted an improved remedy package comprising the commitments to divest EdF's power generation plant at Sutton Bridge and BE's generation plant at Eggborough, to sell certain minimum volumes of electricity in the wholesale market for a certain period of time when the combined entity would have had the ability to internalize the use of electricity that it produces, to divest a site potentially suitable for building a new nuclear power station located at either Dungeness or Heysham and to end one grid connection agreement with National Grid at Hinkley Point. The Commission concluded that the revised remedy package was sufficient to remove all identified competition concerns. About British Energy Headquartered in Livingston, Scotland, British Energy Limited -- http://www.british-energy.com/-- is the UK's largest electricity generator, employing over 6,000 people. The British Energy Group owns and operates eight nuclear power stations in the UK: seven of these are Advanced Gas-cooled Reactor (AGR) stations, located at Dungeness, Hartlepool, Heysham (two stations), Hinkley Point, Hunterston, Torness and the only civil Pressurised Water Reactor (PWR) station in the UK, located at Sizewell in Suffolk. British Energy also owns and operates the Eggborough coal-fired power station in Yorkshire. British Energy's total current capacity is 10.6GW (of which 8.7GW from nuclear generation) with delivered output of 58.4TWh (of which 50.3TWh comprises nuclear output) for the year ended March 2008. British Energy is the lowest carbon emitter of the UK's major electricity generators. * * * As reported in the TCR-Europe on Sept. 26, 2008, Fitch Ratings placed British Energy Group plc's and British Energy Bond Finance plc's (BEBF, formerly British Energy Holdings plc) 'BB+' Long-term Issuer Default Ratings on Rating Watch Positive. BEBF's amortizing bonds - rated 'BB' - are also put on RWP. The rating actions follow the announcement of a proposed takeover by France's EDF SA ('AA-'/ 'F1+'/Rating Watch Negative). CLARIS LIMITED: Moody's Downgrades Ratings on Two Series of Notes ----------------------------------------------------------------- Moody's Investors Service announced it has downgraded its ratings of two series of notes issued by Claris Limited. These transactions are managed synthetic CDOs referencing a portfolio of 124 corporate credits. According to Moody's, the rating action is the result of deterioration in the credit quality of the transaction's reference portfolio, which includes but is not limited to exposure to Lehman Brothers Holdings Inc., which filed for protection under Chapter 11 of the U.S. Bankruptcy Code on September 15, 2008 and the Icelandic Kaupthing Bank hf. The transaction also has a significant exposure to other corporate names, such as GMAC LLC, which continue to deteriorate in the current economic environment. This will weigh on the ratings of the tranches in this transaction. Moody's initially analyzed and continues to monitor this transaction using primarily the methodology and its supplements for corporate synthetic CDOs as described in Moody's Special Reports: -- Moody's Approach to Rating Synthetic CDOs (July 2003) -- Moody's Revisits Its Assumptions Regarding Corporate Default (and Asset) Correlations for CDOs (November 2004) -- Understanding Collateral Risks of Funded Synthetics in CDOs (June 2006) The rating actions are: Claris Limited: (1) Series 82 EUR50,000,000 Algebra Floating Rate Credit Linked Notes due 2017 -- Current Rating: Baa2 -- Prior Rating: Aa3 -- Prior Rating Action Date: 28 December 2006, assigned Aa3 (2) Series 85 US$70,000,000 Algebra Floating Rate Credit Linked Notes due 2017 -- Current Rating: Ba2 -- Prior Rating: A2 -- Prior Rating Action Date: 5 December 2006, assigned A2 ELDON STREET: Appoints Joint Administrators from PwC ---------------------------------------------------- Anthony Victor Lomas, Dan Yoram Schwarzmann and Derek Anthony Howell of PricewaterhouseCoopers LLP were appointed joint administrators of Eldon Street Holdings Ltd. on Dec. 9, 2008. The company can be reached at: Eldon Street Holdings Ltd. 25 Bank Street London E14 6LE England ENVOLVE PARTNERSHIPS: Taps Joint Liquidators from Baker Tilly ------------------------------------------------------------- Andrew Martin Sheridan and Guy Edward Brooke Mander of Baker Tilly Restructuring and Recovery LLP were appointed joint liquidators of Envolve Partnerships For Sustainability on Dec. 4, 2008, for the creditors' voluntary winding-up proceeding. The company can be reached through Baker Tilly Restructuring and Recovery LLP at: Hartwell House 55-61 Victoria Street Bristol BS1 6AD England EXCEL CAFE: Names Joint Administrators from Tenon Recovery ---------------------------------------------------------- T. J. Binyon and S. J. Parker of Tenon Recovery were appointed joint administrators of Excel Cafe Bars Ltd. on Dec. 5, 2008. The company can be reached at: Excel Cafe Bars Ltd. Falcon Court 9 Saints Martins Way London SW17 0JH England HIVEMEAD LTD: Taps Joint Administrators from PKF ------------------------------------------------ Ian Schofield and Charles Escott of PKF (UK) LLP were appointed joint administrators of Hivemead Ltd. on Nov. 25, 2008. The company can be reached through PKF (UK) LLP at: Pannell House 6 Queen Street Leeds LS1 2TW England MADOFF SECURITIES: Grant Thornton Named Provisional Liquidator -------------------------------------------------------------- Poppy Trowbridge at Bloomberg News reports that Grant Thornton U.K. LLP has been appointed provisional liquidator of Madoff Securities International Ltd, the U.K. unit of Bernard Madoff's firm. Citing an e-mailed statement from the accountancy firm dated Dec. 19, Bloomberg discloses Mark Byers, Andrew Hosking and Steve Akers, all partners at Grant Thornton, will act as joint liquidators. Bloomberg relates that Grant Thornton said it "will be assessing the assets and liabilities of the company, and will be cooperating with the Financial Services Authority in the U.K. and the various authorities in the United States". According to the Daily Telegraph, 28 staff at the London fund have been made redundant after liquidators were called in. Amy Wilson at the Daily Telegraph writes it is understood the fund's traders could not carry on doing business because all their capital belonged to Mr. Madoff, who is now under house arrest over an alleged US$50 billion investment fraud, and his family. The fund, the Daily Telegraph says, was 88% owned by Mr. Madoff while other family members owned the rest. The fund did not take any client money and was run as a proprietary hedge fund for the family, the Daily Telegraph notes. Its assets stood GBP113 million in 2007, mainly in cash. About Bernard L. Madoff Bernard L. Madoff Investment Securities LLC is a leading international market maker. The firm has been providing quality executions for broker-dealers, banks, and financial institutions since its inception in 1960. During this time, Madoff has compiled an uninterrupted record of growth, which has enabled us to continually build our financial resources. With more than US$700 million in firm capital, Madoff currently ranks among the top 1% of US Securities firms. As reported by the Troubled Company Reporter on Dec. 15, 2008, the Securities and Exchange Commission has charged Bernard L. Madoff and his investment firm, Bernard L. Madoff Investment Securities LLC, with securities fraud for a multi-billion dollar Ponzi scheme that he perpetrated on advisory clients of his firm. The estimated the losses from Madoff's fraud were at least US$50 billion. As reported by the TCR on Dec 16, 2008, the Securities Investor Protection Corporation, which maintains a special reserve fund authorized by Congress to help investors at failed brokerage firms, announced on Mon., Dec. 15, that it is liquidating Bernard L. Madoff Investment Securities LLC of New York, N.Y., under the Securities Investor Protection Act. NEMUS II: S&P Downgrades Rating on Class F Notes to 'BB' -------------------------------------------------------- Standard & Poor's Rating Services lowered to 'BB' from 'BBB' and placed on CreditWatch negative its credit rating on the class F notes issued by NEMUS II (Arden) PLC. The 'BBB' rating on the class E notes was also placed on CreditWatch negative. The ratings on the other classes issued by NEMUS II (Arden) are unaffected. The notes are backed by six loans secured by commercial properties throughout the U.K. and Jersey. The Carlton House loan is the fifth-largest loan in the collateral pool, with a current outstanding balance of GBP11,960,000. It is secured by three office and retail properties in Sutton Coldfield, West Midlands. This loan was recently transferred into special servicing following an event of default. Liquidity will be available to cover additional expenses, such as special servicing fees, if required. However, drawings for the class F notes are limited. There are scenarios in which shortfalls in interest or principal could be experienced in the future. Our concerns have increased about the creditworthiness of the Castle and Oriel loans. The Castle property leases may expire over the next three years and the current macroeconomic environment may adversely affect the reletting potential of these properties. Both the Castle and Oriel loans mature in 2011, and given significant market value declines in the U.K. as well as the prevailing macroeconomic conditions, the refinance risk for these loans has increased. S&P expects these notes to remain on CreditWatch for an extended period of time while S&P monitor the transaction. Further information on this transaction is available to subscribers of RatingsDirect, the real-time Web-based source for Standard & Poor's credit ratings, research, and risk analysis, at www.ratingsdirect.com. Alternatively, call one of the following Standard & Poor's numbers: Client Support Europe (44) 20-7176- 7176; London Press Office (44) 20-7176-3605; Paris (33) 1-4420-6708; Frankfurt (49) 69-33-999-225; Stockholm (46) 8-440- 5914; or Moscow (7) 495-783-4017. Ratings List NEMUS II (Arden) PLC GBP260.87 Million Commercial Mortgage-Backed Floating-Rate Notes Rating Placed On CreditWatch Negative Class To From ----- -- ---- E BBB/Watch Neg BBB Rating Lowered And Placed On CreditWatch Negative Class To From ----- -- ---- F BB/Watch Neg BBB OFFICERS CLUB: TimeC Buys 118 Stores; 1000 Jobs Secured ------------------------------------------------------- Ian Green, Steve Ellis and Nick Reed of PricewaterhouseCoopers LLP, were appointed as joint administrators of The Officers Club Ltd and Petroleum Ltd on December 23, 2008. The Officers Club is a high street menswear retailer with 150 stores throughout the United Kingdom including those operating under the Petroleum brand, with head offices in Cramlington, Northumberland. Like many retail clothing chains The Officers Club has been facing stiff competition, making trading conditions even more difficult. TimeC 1215 Ltd, a company backed by David Charlton, the chief executive of The Officers Club, has purchased the business and assets of 118 out of the 150 stores operated by the companies, securing the continued employment of over 1000 members of staff across the UK. Ian Green, joint administrator and partner at PricewaterhouseCoopers LLP in Leeds said: "We are delighted to be able to announce this sale, resulting in the preservation of over 1000 jobs, particularly at this challenging time in the retail sector. The sale to TimeC 1215 Ltd represents a significantly better result for the creditors of the companies than any other alternative." David Charlton, Director of TimeC 1215 Ltd said: "We are very pleased to be able to secure this deal and protect the employment of over 1000 people in the stores and head office. We welcome the opportunity to take the business forward and look forward to a successful future." The 32 stores excluded from the sale will be closed with immediate effect. 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. ORCHID GROUP: 31 Pubs Sold to Spirit Group; 14 Pubs Closed ---------------------------------------------------------- David Chubb, Mike Jervis and Colin Haig, partners at PricewaterhouseCoopers LLP and joint administrators of The Orchid Group, in a press statement on Tuesday, December 23, 2008, said that they have effected a sale of 31 of the remaining pubs in the group to Spirit group as a going concern. The Dragonfly in Cheltenham has also been sold to an individual buyer as a going concern. This brings the total number of pubs saved from closure to 272. Unfortunately, it has not been possible to sell 14 of the remaining pubs as a going concern, and accordingly the administrators have no option but to begin closure of these pubs with immediate effect. The administrators, however, noted this does mean the staff at these pubs will be made redundant. Customers who had bookings with these establishments over the festive season should endeavor to make alternative arrangements. "We are still exploring options for the remaining 3 pubs in the portfolio," the administrators said. The pubs that are now closing are: -- Oban Inn, Oban; -- Bridgewater, Salford; -- Malt and Hoops and Cool Bar, Bournemouth; -- Ferry, Norwich; -- Falcon Tavern, Huntingdon; -- Millers, Saltford; -- Bear, Reading; -- Royal Hart, Ashford; -- St Mark's Tavern, Surbiton; -- Queen B, Chelmsford; -- Grand Hotel, Southend-on-Sea; -- Bar Room Bar @Tankard, Lambeth; -- Three Tuns, Canterbury; and -- Hand and Flower, Hammersmith. Messrs. Chubb, Jervis and Haig of PricewaterhouseCoopers LLP were appointed joint administrators to The Orchid Group on December 13, 2008. Immediately following their appointment, they announced a sale of 240 of the company's 289 pub portfolio to a new company led by Orchid's existing management. This sale saved 5,300 jobs across the UK. 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. TAYLOR WIMPEY: Covenant Testing Date Deferred Until March 31 ------------------------------------------------------------ Taylor Wimpey plc in a press statement on Wednesday, December 24, 2008, said that it has reached agreement with the providers of its bank facilities and its private placement noteholders to defer the testing date of certain financial covenants. Taylor Wimpey said: "As a result of this deferral we will not be required to test these covenants based on the 2008 year end figures or be required to report on the company's compliance with them until March 31, 2009. "The group continues to be in full compliance with all its existing covenants. However, without this deferral and as previously indicated, it is likely that we would have been in breach of our interest cover covenants in January 2009 under the original testing schedule for the year to December 31, 2008. "Discussions with our debt providers continue on a constructive basis. We remain confident that a robust, stable medium term financing solution for the Group, which takes into account the requirements of all relevant stakeholders, will be achieved prior to the end of this deferral period. "We will update the market on current trading in our trading statement on January 13, 2009 and will provide further information on the progress of the financing discussions to the market as appropriate." About Taylor Wimpey Headquartered in London, Taylor Wimpey plc -- http://www.taylorwimpey.com/-- builds homes in the U.K., North America, Spain and Gibraltar. Taylor Wimpey also operates in the construction sector under the Taylor Woodrow brand. * * * As reported in the TCR-Europe on Nov. 21, 2008, Fitch Ratings downgraded Taylor Wimpey plc's Long-term Issuer Default rating and senior unsecured ratings to 'CCC' from 'B' and Short-term IDR to 'C' from 'B'. All ratings are being maintained on Rating Watch Negative. Fitch simultaneously affirmed the 'RR4' Recovery Rating on TW's senior unsecured debt instruments. Fitch said the rating downgrades reflect the heightened default risk facing TW as its next covenant testing date approaches (now understood to be January 1, 2009, rather than mid-February 2009). Due to the ongoing weakness in the UK housing market, TW is likely to breach interest coverage covenants when next tested. Although the company continues to talk to its creditors in an effort to renegotiate its covenant package, it has publicly stated that an agreement is unlikely before the January test date. WHITTARD OF CHELSEA: In Administration; Assets Sold to EPIC ----------------------------------------------------------- Angela Swarbrick and Alan Hudson of Ernst & Young LLP were appointed joint administrators of Whittard of Chelsea Ltd and Boaters Coffee Co Ltd on Tuesday, December 23, 2008. Whittard of Chelsea, established in 1886, employs circa 950 employees. The company, headquartered in Stockwell, London, is a specialist retailer of teas, coffees and related gifts that trades from approximately 130 stores across the UK. Boaters Coffee Co is specifically wholesalers and retailers of flavored coffee products. The joint administrators upon appointment subsequently sold the business and assets of the companies to EPIC Private Equity for an undisclosed sum. The businesses will continue to operate as a going concern, and all stores will remain open for trading as usual. Angela Swarbrick, joint administrator, commented: "Whittard of Chelsea and Boaters Coffee Co have been experiencing trading difficulties because of uncertain economic conditions; this has unfortunately resulted in the companies being unable to trade outside of administration. Fortunately a deal was able to be done that sees the businesses of the companies able to continue to trade and the Whittard of Chelsea name, with it's 122 year heritage, remain on the high-street." About Ernst & Young Ernst & Young LLP -- http://www.ey.com/-- provides assurance, tax, transaction and advisory services. XELO IV: Moody's Cuts Rating on EUR10.5 Million Notes to 'Caa1' --------------------------------------------------------------- Moody's Investors Service has downgraded its ratings of one class of notes issued by Xelo IV Public Limited Company This transaction is managed synthetic single tranche CDO. According to Moody's, the rating actions are the result of deterioration in the credit quality of the transaction's reference portfolio, which includes but is not limited to exposure to Lehman Brothers Holdings Inc., which filed for protection under Chapter 11 of the U.S. Bankruptcy Code on September 15, 2008; Fannie Mae and Freddie Mac, which were placed into the conservatorship of the U.S. government on September 8, 2008; and one Icelandic bank, specifically Kaupthing Bank hf. The transaction also has a significant exposure to other corporate names which continue to deteriorate in the current economic environment. This will weigh on the ratings of the tranches in this transaction. Moody's initially analyzed and continues to monitor this transaction using primarily the methodology and its supplements for corporate synthetic CDOs as described in Moody's Special Reports: -- Moody's Approach To Rating Synthetic CDOs (July 2003) -- Moody's Revisits Its Assumptions Regarding Corporate Default (and Asset) Correlations for CDOs (November 2004) -- Understanding Collateral Risks of Funded Synthetics in CDOs (June 2006) The rating action is: Xelo IV Public Limited Company (1) Series 2007 (CDO Weiss) EUR 10,500,000 Secured Limited Recourse Credit-Linked Notes Due 2014 -- Current Rating: Caa1 -- Prior Rating: A2 -- Prior Rating Date: 02 April 2007, assigned A2 XSTRATA PLC: May Breach Debt Covenants as Coal Prices Tumble ------------------------------------------------------------ Ben Harrington at the Daily Telegraph reports Xstrata plc could breach its debt covenants as analysts expect tumbling coal prices to hit 2008 and 2009 earnings. According to the report, UBS analysts Grant Spore and Paul Galloway believe "consensus earnings before interest, tax, depreciation and amortization (EBITDA) for 2008/09 of around US$11.1 billion (GBP8.4 billion) are still too high and are likely to come down further in the next few weeks". The analysts warned Xstrata is likely to breach its debt covenants of three times gross debt to EBITDA on US$10 billion of bank loans, the report relates. The covenants, the report notes, are tested every six months. In the note entitled A Business Model on Ice, the analysts, as cited by the report, said "the speed of the downturn in commodity prices has left Xstrata with too much debt on its balance sheet". Messrs. Spore and Galloway cut their rating on the company to "neutral" from "buy" and slashed their price target from GBP19 to 800p, the report discloses. About Xstrata Xstrata plc -- http://www.xstrata.com/-- is a global diversified mining group, listed on the London and Swiss Stock Exchanges, with its headquarters in Zug, Switzerland. Xstrata's businesses maintain a meaningful position in seven major international commodity markets: copper, coking coal, thermal coal, ferrochrome, nickel, vanadium and zinc, with a growing platinum group metals business, additional exposures to gold, cobalt, lead and silver, recycling facilities and a suite of global technology products, many of which are industry leaders. The Group's operations and projects span 18 countries. Xstrata employs approximately 56,000 people, including contractors. ZAVVI UK: Goes Into Administration Following Supplier's Collapse ---------------------------------------------------------------- Tom Jack, Simon Allport and Alan Hudson of Ernst & Young LLP were appointed joint administrators of zavvi UK (zavvi Group Ltd, zavvi Retail Ltd, V R Services Ltd, Piccadilly Entertainment Stores Ltd, Ablegrand Ltd, Ablegrand 2 Ltd) on Wednesday, December 24, 2008. In addition, Tom Jack and Andrew Dann of Ernst & Young LLP were appointed as liquidators of zavvi Online (Guernsey) Ltd. At this time zavvi Ireland is not subject to any formal insolvency proceedings. The zavvi Group is the UK's largest independent entertainment retailer trading from 125 stores across the UK (114) and Ireland (11) currently employing 2,363 permanent staff and 1,052 temporary staff. The group was formed from a management buy out (MBO) of the Virgin Megastore division of the Virgin Group in September 2007. On November 27, 2008 Entertainment UK Ltd, the group's main supplier, went into administration. Since this time the group has been unable to source stock in the usual way and has been forced to enter into new trading arrangements. The directors understand it is unlikely that EUK will be sold as a going concern and the zavvi Group has continued to experience significant difficulty in obtaining stock on favorable credit terms. This has resulted in considerable working capital difficulties as a result of the failure of EUK, in addition to continuing operating losses. Tom Jack, joint administrator, commented "Since EUK went into administration, and perhaps before, the impact of problems at EUK on the zavvi Group has been significant. Minimal deliveries, no returns and worse trading terms are just some of the areas impacted. In the absence of a buyer for EUK, and with dire trading conditions on the high street, the zavvi Group has seen a material fall in sales and the directors have now been forced to place parts of the group into administration." Mr. Jack added "The administrators intend to continue to trade zavvi UK with a view to selling all or part of its business as a going concern. We are grateful for the continued support of all employees during this difficult time and would like to thank everyone at zavvi for their commitment and hard work as the business continues to trade." Simon Douglas and Steve Peckham, the group's founders, added "We would like to thank all of our employees for their commitment and support since the launch of zavvi. We have done all that is possible to keep the business trading, but the problems encountered with EUK, and particularly its recent failure, has been too much for the business to cope with." About Ernst & Young Ernst & Young LLP -- http://www.ey.com/-- provides assurance, tax, transaction and advisory services. * UK: EC Okays Changes to Banking Financial Support Measures ------------------------------------------------------------ The European Commission has approved, under EC Treaty state aid rules, modifications to the UK support measures to the banking industry, initially approved by the Commission on October 13, 2008. The amendments mainly concern the fee payable on guaranteed liabilities and the widening of the range of currencies in which the guaranteed instruments can be issued. The modifications will bring the UK scheme in line with those in other Member States and support the provision of credit to the UK economy. The Commission therefore concluded that the UK support measures, as amended, are compatible with the common market. Competition Commissioner Neelie Kroes said: "The excellent cooperation with the UK authorities and streamlined procedures have once again led to a quick and effective Commission decision. On this basis we have approved the amendment of the UK scheme in a period of fast evolving financial markets in order to support banks to provide sufficient credit to the UK economy". On December 18, 2008, the UK notified a set of modifications it intended to make to the UK support measures to the banking industry. These amendments were aimed at adapting the package to the Commission's Communication on recapitalization and to bring it in line with schemes in other Member States. Concerning the UK Recapitalisation Scheme, the Commission accepted, in line with its Communication on recapitalization that fundamentally sound banks do not need to provide a restructuring plan, but may instead provide a report that illustrates that they remain fundamentally sound and how they plan to repay the state capital. Concerning the UK Guarantee Scheme the main amendments concern the following basic features: * The UK will, as of January 1, 2009, also guarantee debt instruments issued in Japanese yen, Australian dollars, Canadian dollars and Swiss francs. Previously, the eligible debt was limited to instruments in sterling, US dollars or euros. * The fee payable on guaranteed liabilities will be based on a per annum rate of 50 basis points plus 100% of the institution's median five-year Credit Default Swap (CDS) spread during the period July 2, 2007 to July 1, 2008. This fee will apply retrospectively to all guaranteed issues under the original scheme since its launch on October 13, 2008. * As in the original Guarantee Scheme, the initial term of the instruments guaranteed under the amended scheme will remain no longer than three years. However, participating institutions will now be able to roll over the guarantee on some individual instruments for an additional two years, ending in April 2014. The proportion of the guaranteed liabilities that can be rolled over in this fashion shall not exceed one third of the overall guaranteed liabilities. In addition, the requirement of a balance sheet growth limitation to certain thresholds in the Guarantee and Recapitalisation Scheme will no longer apply to those banks that can be considered as fundamentally sound. The Commission is satisfied that as a result of its dialogue with the UK authorities, the UK support measures to the banking industry have been adjusted to changing market conditions. The adjusted package takes into account the latest guidance of the Commission. * BOND PRICING: For the Week Dec. 22 to Dec. 26, 2008 ----------------------------------------------------- Issuer Coupon Maturity Currency Price ------ ------ -------- -------- ----- BELGIUM ------- Barry Calle SVCS 6.000 07/13/17 EUR 73.68 CYPRUS ------ Abh Financial Lt 8.200 06/25/12 USD 62.33 Alfa MTN Invest 9.250 06/24/13 USD 64.88 FRANCE ------ Alcatel S.A. 4.750 01/01/11 EUR 13.07 6.380 04/07/14 EUR 70.08 Altran Technologies S.A. 3.750 01/01/09 EUR 12.87 Axa SA 8.600 12/15/30 USD 64.03 Calyon 6.000 06/18/47 EUR 43.25 Credit Agricole 3.750 10/20/20 EUR 71.76 4.050 12/22/20 EUR 73.94 Soc Air France 2.750 04/01/20 EUR 18.20 Wavecom S.A. 1.750 01/01/14 EUR 24.31 GERMANY ------- Bayer AG 5.000 07/29/2105 EUR 74.15 HUNGARY ------- Agrokor 7.000 11/23/11 EUR 70.42 IRELAND ------- Allied Irish Bks 5.250 03/10/25 GBP 71.14 5.630 11/29/30 GBP 68.53 Alfa Bank 8.625 12/09/15 USD 40.92 8.635 02/22/17 USD 37.56 Ardagh Glass 7.130 06/15/17 EUR 64.25 Banesto Finance Plc 6.120 11/07/37 EUR 6.12 LUXEMBOURG ---------- Acergy SA 2.250 10/11/13 USD 57.03 AK Bars Bank 8.250 06/28/10 USD 97.75 9.250 06/20/11 USD 97.63 Alrosa Finance 8.880 11/17/14 USD 57.82 Bank of Moscow 7.340 05/13/13 USD 61.98 7.500 11/25/15 USD 39.95 6.810 05/10/17 USD 36.30 Beverage Pack 8.000 12/15/16 EUR 54.21 9.500 06/15/17 EUR 38.21 NETHERLANDS ----------- ABN Amro Bank N.V. 6.250 06/29/35 EUR 50.79 Aegon N.V. 6.130 12/15/31 GBP 70.29 Air Berlin Finance B.V. 1.500 04/11/27 EUR 20.51 Alfa Bk Ukraine 9.750 12/22/09 USD 100.14 ALB Finance B.V. 8.750 04/20/11 USD 47.54 7.880 02/01/12 EUR 36.39 ASM International N.V. 4.250 12/06/11 USD 63.79 4.250 12/06/11 USD 59.00 ASML Holding N.V. 5.750 06/13/17 EUR 59.51 Astana Finance 7.880 06/08/10 EUR 98.61 9.000 11/16/11 USD 95.19 ATF Capital BV 9.250 02/21/14 USD 57.78 BK Ned Gemeenten 0.500 06/27/18 CAD 67.57 Centercrdt Intl 8.000 02/02/11 USD 54.87 8.630 01/30/14 USD 38.41 8.630 01/30/14 USD 38.76 Hit Finance B.V. 4.880 10/27/21 EUR 71.08 RUSSIA ------ Sistema Capital 8.880 01/28/11 USD 71.11 SPAIN ----- Abertis Infra 4.375 03/30/20 EUR 74.88 Auvisa 4.790 12/15/27 EUR 65.09 UNITED KINGDOM -------------- Alfa-Bank CJSC 12.000 08/11/11 USD 62.46 Amlin Plc 6.500 12/19/26 GBP 65.89 Anglian Water Finance Plc 2.400 04/20/35 GBP 46.43 Aspire Defence 4.670 03/31/40 GBP 61.56 4.670 03/31/40 GBP 1.24 Aviva Plc 5.250 10/02/23 EUR 75.32 6.880 05/22/38 EUR 63.87 6.880 05/20/58 GBP 78.68 Barclays Bank Plc 11.650 05/20/10 USD 60.50 5.600 02/22/21 USD 74.48 Beazley Group 7.250 10/17/26 GBP 65.35 BL Super Finance 4.480 10/04/25 GBP 75.03 British Airways Plc 8.750 08/23/16 GBP 81.08 British Land Co 5.010 09/24/35 GBP 74.38 Broadgate Finance Plc 4.850 04/05/31 GBP 81.84 5.100 04/05/33 GBP 65.01 CGNU Plc 6.130 11/16/26 GBP 69.91 ********* 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. 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