/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/090305.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 Thursday, March 5, 2009, Vol. 10, No. 45 Headlines A U S T R I A ART + WELLNESS: Claims Registration Period Ends March 17 DIBLDRUCK & RDW: Claims Registration Period Ends March 17 LOCATION COMPANY: Claims Registration Period Ends March 16 MOEBEL ALMHOFER: Claims Registration Period Ends March 17 SCHLOSSEREI SISTEC: Claims Registration Period Ends March 17 F R A N C E ALCATEL LUCENT: S&P Cuts Long-Term Corporate Credit Rating to 'B+' GECINA SA: S&P Puts 'BB+' Ratings on Negative CreditWatch PERENCO: Ecuador to Freeze Income Over EUR350 Mln Late Taxes RHODIA SA: Fitch Affirms Long-Term Issuer Default Rating at 'BB-' G E R M A N Y AKTIV BAU: Claims Registration Period Ends April 1 COGNIS: Fitch Revises Rating on High-Yield Notes to 'CCC+'/'RR6' DORNIER AVIATION: Court Okays Final Settlement With Hainan DSL BAHNDIENSTE: Claims Registration Period Ends March 27 GENERAL MOTORS: Germany to Hold Talks w/ US Over Opel This Month H & K ALLFINANZ: Claims Registration Period Ends April 8 KABEL DEUTSCHLAND: S&P Gives Positive Outlook; Affirms 'B+' Rating KAPLAN BAU: Claims Registration Period Ends March 24 MVF REICO: Claims Registration Period Ends April 7 POHLAND: Files for Insolvency; 343 Jobs at Risk SEEHAUS BAU: Claims Registration Period Ends March 23 WEINBOERSE HOLDING: Claims Registration Period Ends April 27 I C E L A N D LANDSBANKI ISLANDS: Inks Settlement Deal with Straumur-Burdaras I R E L A N D DEKANIA EUROPE: S&P Retains Negative Watch on Two 'BB'-Rated Notes EUROCASTLE CDO II: Fitch Junks Rating on EUR3 Mln Class E Notes EUROCASTLE CDO III: Fitch Junks Ratings on Class D and E Notes MF CAPITAL: S&P Cuts Rating on EUR32.5 Mln Notes to 'CCC+' WALSH MAGUIRE: High Court Appoints Liquidator WATERFORD WEDGWOOD: Asset Sale Prompts S&P to Withdraw 'D' Ratings WATERFORD WEDGWOOD: Fitch Revises Rating on Sr. Loan to 'CC'/'RR3' I T A L Y CHRYSLER LLC: Fiat Deal Moving Forward, CEO Says TELECOM ITALIA: Says It Can Manage Debt, Won't Need Fresh Funds K A Z A K H S T A N ALTYN BASTAU: Creditors Must File Claims by April 3 AUCTION CENTRE: Creditors Must File Claims by April 3 BAITILES LLP: Creditors Must File Claims by April 3 DIHAN-2 LLP: Creditors Must File Claims by April 3 IMMO-INVEST LLP: Creditors Must File Claims by April 3 INFINITY ELECTRONICS: Creditors Must File Claims by April 3 INVEST MEGA: Creditors Must File Claims by April 3 JAYILMA LLP: Creditors Must File Claims by April 3 SHIK STROY: Creditors Must File Claims by April 3 TEMIR TAS LTD LLP: Creditors Must File Claims by April 3 K Y R G Y Z S T A N DESIGN DESCORT: Creditors Must File Claims by March 20 L A T V I A * LATVIA: CD Swaps at All-Time High on Higher Jobless Figure L U X E M B O U R G BERNARD L. MADOFF: UBS AG Wins Ruling in Luxembourg Lawsuit WIND HELLAS: Fitch Revises Rating on 2015 Notes to 'CC'/'RR6' N E T H E R L A N D S EMF-NL PRIME 2008: S&P Lowers Rating on Class D Notes to 'BB' EMF-NL 2008-2: S&P Cuts Rating on Class D Notes to 'BB' KHAMSIN CREDIT: S&P Withdraws 'CCC-' Rating on Class B Notes NXP B.V.: Commences Private Debt Exchange Offers NXP SEMICONDUCTORS: Fourth Quarter Sales Down 25.6% to US$979 Mln NXP SEMICONDUCTORS: Moody's Cuts Corporate Credit Rating to 'Caa2' R U S S I A ALAPAYEVSKIY MACHINE: Creditors Must File Claims by March 22 BOOKBERRY: Seeks Bankruptcy Protection KRONSHTADTSKIY MORSKOY: Creditors Must File Claims by April 22 KUB-LES LLC: Krasnodarskiy Bankruptcy Hearing Set May 5 LYALYA LES OJSC: Creditors Must File Claims by April 22 MACHINE-BUILDNING PLANT: Creditors Must File Claims by March 22 MEZHDURECHYE LES LLC: Creditors Must File Claims by April 21 PROEKT AKTIV: Rostovskaya Bankruptcy Hearing Set June 2 SEVERNAYA KAZNA: Moody's Withdraws 'E' Financial Strength Rating SILOVYE MACHINY CJSC: Creditors Must File Claims by March 22 URAL-STROY-FASAD LLC: Creditors Must File Claims by April 22 VAKH-LES LLC: Creditors Must File Claims by March 22 S P A I N CAIXA PENEDES: Moody's Junks Ratings on Two Classes of Notes SOL MELIA: Moody's Reviews 'Ba1' Rating for Possible Downgrade S W E D E N GENERAL MOTORS: To Pay Saab Automobile Bills to Suppliers GENERAL MOTORS: Saab Works With Deutsche Bank, Seeks Buyers S W I T Z E R L A N D CLARIANT AG: Reduced Cash Flows Cue Moody's to Cut Rating to 'Ba' U K R A I N E AGROTON LLC: Creditors Must File Claims by March 18 AZOVSTAL JSC: S&P Withdraws 'CCC+' Foreign Currency Credit Rating BELOGORYE PETROLEUM: Creditors Must File Claims by March 15 DOVIRA AGRICULTURAL: Court Starts Bankruptcy Procedure FOOD CONTRACT: Creditors Must File Claims by March 15 KOLOS LLC: Court Starts Bankruptcy Supervision Procedure NAFTOGAZ OJSC: Fitch Puts 'B-' Issuer Ratings on Negative Watch SHLIAKHOVIK LLC: Creditors Must File Claims by March 15 SITKOVTSY LLC: Court Starts Bankruptcy Supervision Procedure SKADOVSK MOTORCAR: Creditors Must File Claims by March 18 WORLD IMPEKS: Court Starts Bankruptcy Supervision Procedure U N I T E D K I N G D O M ACTIVE SIGNS: Enters Into Administration; 70 Jobs Affected CASTLEMORE SECURITIES: Taps Joint Administrators from PwC BARWOOD DEVELOPMENTS: Appoints Administrators from Ernst & Young BTL HOLDINGS: Brings in Joint Administrators from Baker Tilly CATTLES PLC: Suspends Three Executives; Uncovers Acct'ng. Problems CATTLES PLC: Fitch Retains 'B' Issuer Default Ratings CITY INDEX: In Breach of Covenants Despite GBP70MM Cash Injection CITY RETREATS: Administrators Seek Buyer for Ellington Hotel CONTACT IT SERVICES: Taps Joint Administrators from Baker Tilly CONTACT RECRUITMENT: Appoints Administrators from Baker Tilly EUROSAIL 2006-1: S&P Junks Ratings on Three Classes of Notes GKN HOLDINGS: Fitch Cuts Long-Term Issuer Default Rating to 'BB+' GREEN PARK: Calls in Joint Administrators from Tenon Recovery HSBC HOLDINGS: May Use Part of Fund Raising for Asian Buyout LIGHTZONE LTD: Taps Joint Administrators from PKF LINPAC PACKAGING: In Talks with Lenders Over Debt Restructuring OMAR HOMES: Goes Into Administration; 160 Jobs Affected PCS LTD: Goes Into Voluntary Liquidation QED TECHNOLOGY: Appoints Administrators from Tenon Recovery ROYAL BANK: Sells US$4.2 Bln Gov't Guaranteed Floating-Rate Notes ROYAL BANK: UKFI Asks Bank to Explain Ex-CEO's Pension ROYAL BANK: Mulls Sale of Central & Eastern European Assets TEMPLE QUAY: Taps Joint Administrators from Tenon Recovery * UK: Companies Failed to Heed Warning Signs, Pwc Poll Finds * EUROPE: Passenger Demand Down 5.7% in January 2009, IATA Says * Fitch Says Debt Buybacks Below Par Not Always a Distressed Debt * Fitch Reports Updates on its Rating Definitions * Upcoming Meetings, Conferences and Seminars ********* ============= A U S T R I A ============= ART + WELLNESS: Claims Registration Period Ends March 17 -------------------------------------------------------- Creditors owed money by LLC ART + Wellness (FN 291169s) have until March 17, 2009, to file written proofs of claim to the court- appointed estate administrator: Klaus Haberler Triester Strasse 34 2620 Neunkirchen Austria Tel: 02635/69 555 Fax: 02635/69 555-5 E-mail: info@dr-lechner.at Creditors and other interested parties are encouraged to attend the creditors' meeting at 9:30 a.m. on March 31, 2009, for the examination of claims at: Land Court of Wiener Neustadt (239) Room 15 Wiener Neustadt Austria Headquartered in Gloggnitz, Austria, the Debtor declared bankruptcy on Jan. 14, 2009, (Bankr. Case No. 11 S 3/09s). DIBLDRUCK & RDW: Claims Registration Period Ends March 17 --------------------------------------------------------- Creditors owed money by LLC Dibldruck & Rdw & Co Kg (FN 2780p) have until March 17, 2009, to file written proofs of claim to the court-appointed estate administrator: Erich Allinger Hauptplatz 11 2700 Wiener Neustadt Austria Tel: 02622/23228 Serie Fax: 02622/23228-26 E-mail: e.allinger@schober.at Creditors and other interested parties are encouraged to attend the creditors' meeting at 9:00 a.m. on March 31, 2009, for the examination of claims at: Land Court of Wiener Neustadt (239) Room 15 Wiener Neustadt Austria Headquartered in Weikersdorf am Steinfelde, Austria, the Debtor declared bankruptcy on Jan. 12, 2009, (Bankr. Case No. 11 S 2/09v). LOCATION COMPANY: Claims Registration Period Ends March 16 ---------------------------------------------------------- Creditors owed money by LLC Location Company (FN 284240a) have until March 16, 2009, to file written proofs of claim to the court-appointed estate administrator: Dr. Herbert Hochegger Brucknerstrasse 4/5 1040 Wien Austria Tel: 01/505 78 61 Fax: 01/505 78 61 9 E-mail: office@hoch.co.at Creditors and other interested parties are encouraged to attend the creditors' meeting at 10:00 a.m. on March 30, 2009, for the examination of claims at: Trade Court of Vienna (007) Room 1705 Vienna Austria Headquartered in Vienna, Austria, the Debtor declared bankruptcy on Jan. 22, 2009, (Bankr. Case No. 3 S 13/09w). MOEBEL ALMHOFER: Claims Registration Period Ends March 17 --------------------------------------------------------- Creditors owed money by LLC Moebel Almhofer (FN 117910y) have until March 17, 2009, to file written proofs of claim to the court-appointed estate administrator: Dr. Norbert Mooseder Stelzhamerstrasse 1 4400 Steyr Austria Tel: 07252/42 4 24 Fax: DW 24 E-mail: lawfirm@gltp.at Creditors and other interested parties are encouraged to attend the creditors' meeting at 1:45 p.m. on March 31, 2009, for the examination of claims at: Land Court of Steyr (499) Hall 7 Second Floor Steyr Austria Headquartered in Kirchdorf an der Krems, Austria, the Debtor declared bankruptcy on Jan. 13, 2009, (Bankr. Case No. 14 S 2/09f). SCHLOSSEREI SISTEC: Claims Registration Period Ends March 17 ------------------------------------------------------------ Creditors owed money by LLC Schlosserei SISTEC (FN 280719y) have until March 17, 2009, to file written proofs of claim to the court-appointed estate administrator: Ernst Lehenbauer Hauptplatz 21 4470 Enns Austria Tel: 07223/810 10 Fax: DW 20 E-mail: ra.lehenbauer@attglobal.net Creditors and other interested parties are encouraged to attend the creditors' meeting at 2:15 a.m. on March 31, 2009, for the examination of claims at: Land Court of Steyr (499) Hall 7 Second Floor Steyr Austria Headquartered in Steyr, Austria, the Debtor declared bankruptcy on Jan. 21, 2009, (Bankr. Case No. 14 S 4/09z). =========== F R A N C E =========== ALCATEL LUCENT: S&P Cuts Long-Term Corporate Credit Rating to 'B+' ------------------------------------------------------------------ Standard & Poor's Ratings Services said that it has lowered to 'B+' from 'BB-' its long-term corporate credit ratings and senior unsecured ratings on France-based telecom equipment and services supplier Alcatel Lucent and its subsidiary Alcatel-Lucent USA Inc. (formerly Lucent Technologies Inc.). The 'B' short-term rating on Alcatel Lucent has been affirmed. The outlook is negative. The ratings on Alcatel-Lucent USA's US$1.0 billion trust preferred securities were also lowered by one notch, to 'CCC+', which is three notches below the corporate credit rating. All ratings were removed from CreditWatch where they were placed on Dec. 12, 2008, with negative implications. The 'B-1' rating on Alcatel Lucent USA Inc. was withdrawn. The recovery ratings are unchanged: Alcatel Lucent's senior unsecured debt has a '3' recovery rating, indicating S&P's expectation of meaningful (50%-70%) recovery in the event of a payment default, while Alcatel-Lucent USA Inc.'s convertible bonds have a '4' recovery rating, indicating S&P's expectation of average (30%-50%) recovery in the event of a payment default. On Dec. 31, 2008, Alcatel Lucent had gross on-balance-sheet debt of EUR5.7 billion, including the equity component of convertible bonds. "The downgrade primarily reflects our expectation that a decline in demand for telecom equipment in 2009 should cause further revenue falls and post-restructuring operating losses for Alcatel Lucent in 2009," said Standard & Poor's credit analyst Patrice Cochelin. According to S&P's estimates, Alcatel Lucent's cash losses, along with EUR1.0 billion in debt maturities for 2009, are likely to at least match the EUR1.56 billion of proceeds that Alcatel Lucent expects to receive from a sale, during second- quarter 2009, of a 20.8% stake in defense group Thales S.A. (A-/Stable/A-2). For the year 2008 and in fourth-quarter 2008, the company reported a 5% revenue decline, year on year, including a double-digit decline in the core Carrier segment (68% of 2008 revenues). The operating margin for 2008 was 3%, slightly up from about 1 % in 2007 including about 6% in the seasonally strong fourth-quarter 2008, broadly flat with fourth-quarter 2007. Free operating cash flow after gross capital expenditures and backing out changes in sold receivables was a somewhat lower cash burn of about negative EUR647 million in 2008, compared with negative EUR765 million in 2007, according to S&P's calculations. The bulk of the year-on-year improvement was attributable to fourth-quarter 2008, when FOCF was positive, at EUR204 million, compared with a positive EUR104 million in fourth-quarter 2007. Cash restructuring of EUR172 million in fourth-quarter 2008 was EUR48 million lower than in fourth-quarter 2007. As a consequence of low profits and high restructuring costs, S&P believes that Alcatel Lucent is likely to record another year of highly negative free cash flow in 2009, given the deteriorating trading conditions. "The negative outlook primarily reflects our expectation that Alcatel Lucent will maintain a high cash burn over 2009, and the possibility of a further downgrade during 2009 if our expectations for a recovery starting in late 2009 receded or if the restructuring plan failed to limit operating margin pressures," said Mr. Cochelin. Failure to sell the stake in Thales would probably result in a downgrade, possibly by several notches. On the other hand, demonstration that the company can limit its cash burn while withstanding the current economic downturn would support an outlook revision to stable. Improved access to consolidated cash balances by parent company and debt-issuing entities could also help support rating stability. GECINA SA: S&P Puts 'BB+' Ratings on Negative CreditWatch --------------------------------------------------------- Standard & Poor's Ratings Services said it has placed its 'BB+' long-term credit corporate and issue ratings on French property company Gecina on CreditWatch with negative implications. At the same time, S&P affirmed the 'B' short-term rating. "The CreditWatch placement primarily reflects our negative perception of Gecina's corporate governance," said Standard & Poor's credit analyst Pierre Georges. "We believe the recently announced move to acquire a 49% stake in BAMI and the longstanding uncertainties surrounding Gecina's separation agreement with Metrovacesa S.A.--and the way these transactions could shape Gecina's future corporate strategy and shareholding structure--are likely to hamper investor confidence in the company." Ultimately, there could be negative repercussions on Gecina's financial flexibility and potentially on its refinancing plans. The proposed purchase of the shareholding in BAMI, a Spanish property company partly owned by Gecina's main shareholders Mr. Rivero and Soler, weighs negatively on S&P's assessment of the group's corporate governance, despite S&P's expectations that the deal would have only a marginal impact on Gecina's portfolio and its credit metrics. Uncertainties about Gecina's future shareholding structure and the possible repercussions on its credit risk profile also pressure the ratings. In addition, given the complexity of the considerably longer-than-expected separation process with Metrovacesa, these two transactions could outweigh the already negative impact of the depressed financial market environment on Gecina's financial flexibility, especially with regards to access to and diversification and cost of financing sources. "We expect to resolve the CreditWatch once S&P has more information about Gecina's refinancing and asset disposal plans, as well as on the BAMI and Metrovacesa transactions," said Mr. Georges. S&P could lower the ratings if these transactions have negative effects on the group's credit profile, if the group does not successfully implement its disposal program, or if S&P has evidence of limited ability to raise additional debt. Alternatively, S&P could affirm the ratings if the group effectively manages to strengthen its liquidity position, secure the refinancing of its 2010 financial commitments, and improve investor confidence. PERENCO: Ecuador to Freeze Income Over EUR350 Mln Late Taxes ------------------------------------------------------------ Ecuador will freeze the income of 720,000 barrels of oil produced by Perenco after the French oil company failed to settle EUR350 million in late taxes, Alonso Soto at Reuters reports citing Petrecuador chief Luis Jaramillo. Perenco, Reuters relates, failed to repay its debt due on Monday. Reuters notes under Ecuadorean law, the state could temporarily seize assets or freeze accounts of a company to force payment. Xinhua recalls Derlis Palacios, Ecuador's oil minister, said Monday that he met with Perenco executives but "unfortunately we did not reach concrete agreements and the company did not give a proposal to pay its multimillion debt." In an earlier report, Reuters disclosed Mr. Palacios said Perenco could opt for a settlement similar to Repsol under which the Spanish oil company agreed to pay more than US$500 million in late taxes for five years. However, the oil minister said one of Perenco's partners opposed any agreement. Perenco �- http://www.perenco.com/�- is an exploration and production company dedicated to developing oil and natural gas potential. RHODIA SA: Fitch Affirms Long-Term Issuer Default Rating at 'BB-' ----------------------------------------------------------------- Fitch Ratings has affirmed France-based chemicals company Rhodia SA's Long-term Issuer Default rating at 'BB-' (BB minus) and simultaneously revised the Outlook on the Long-term IDR to Negative from Positive. At the same time, the agency has affirmed the company's Senior notes and Convertible bonds at 'BB-'(BB minus). The revision of the outlook to Negative from Positive reflects Fitch's expectation that the sharp downturn in the global economy will negatively impact Rhodia's earnings and cash flow generation in 2009, which is likely to put downward pressure on ratings. Despite management's declared priority on improving free cash flow generation, which includes capacity and general cost reduction measures as well as the discontinuation of the group's dividend policy in 2009, Fitch is concerned as to whether the group will be able to deal with the experienced drop in demand for its products since Q408. The company's ratings could face downward pressure in the event of 2009 financial metrics being substantially weaker than current ratios, especially in relation to cash flow cover. Conversely, Fitch would consider stabilising the ratings if Rhodia succeeded to generate positive free cash flow and maintain reasonable headroom under its financial covenants. Rhodia's diversified business profile mitigated the impact from the worsening economic conditions in Q408 which saw the group suffer from a volume decrease at its divisions Polyamide (-31%) and Silcea (-23%) driven by the exposure to auto, electronics, housing and textile end markets. This was partly offset by increased profit generation at Rhodia's four other divisions - Novecare, Acetow, Eco Services and in particular its Energy services division which trades the group's generated Carbon Emission Rights. While 55% of Rhodia's expected production in 2009 is hedged at EUR15.5 per ton, Fitch notes the historic price volatility of CERs and questions the division's demand sustainability and future level of revenue contribution given expected lower CO2 emission during the current economic downturn. Rhodia's financial profile is characterized by a back-ended maturity profile, moderate leverage and good liquidity. At FYE08 Rhodia had total debt of EUR1.8 billion, of which EUR1,048 million are senior floating rate notes due in 2013 and EUR509 million convertible bonds due in 2014. Net leverage was 2x and liquidity comprised of cash and liquid assets on balance sheet of EUR520 million as well as 90% available under a EUR600 million revolving credit facility. Rhodia is a diversified chemicals company based in France, which achieved net sales of approximately EUR4.8 billion in 2008 and a recurring EBITDA of EUR664 million. Its products are sold to a broad spectrum of consumer and industrial markets including automotive, electronics, flavors and fragrances, health, personal and home care markets and consumer goods. Rhodia employs around 14,500 people worldwide and is listed on the Euronext Paris. ============= G E R M A N Y ============= AKTIV BAU: Claims Registration Period Ends April 1 -------------------------------------------------- Creditors of Aktiv Bau Chemnitz GmbH Wohn und Gewerbebau Immobilienverwaltung have until April 1, 2009, to register their claims with court-appointed insolvency manager. Creditors and other interested parties are encouraged to attend the meeting at 10:30 a.m. on May 5, 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: Kai Dellit Michaelstr. 71 09116 Chemnitz Germany Tel: 0371/381770 Fax: 0371/3817730 E-mail: chemnitz@hww-kanzlei.de The District Court opened bankruptcy proceedings against the company on Feb. 19, 2009. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: Aktiv Bau Chemnitz GmbH Wohn und Gewerbebau Immobilienverwaltung Attn: M. Huettinger, Manager Frankenberger St. 221 09131 Chemnitz Germany COGNIS: Fitch Revises Rating on High-Yield Notes to 'CCC+'/'RR6' ---------------------------------------------------------------- Further to the publication of updated definitions for its rating scales, Fitch Ratings has revised some existing debt instrument ratings in the 'CCC', 'CC', and 'C' categories for three EMEA corporates. A full list of the three corporates and their affected debt instrument ratings, detailed as rating revisions, follows: Cognis GmbH -- Long-term Issuer Default Rating 'B'; Negative Outlook -- EUR1.63 billion senior secured floating-rate notes and loans: 'B+'/'RR3' -- EUR250 million super senior secured revolving credit facility: 'BB'/'RR1' -- EUR345 million high-yield notes: revised to 'CCC'/'RR6' from 'CCC+'/'RR6' -- Cognis Holding GmbH's EUR421 million PIK notes: revised to 'CC'/'RR6' from 'CCC'/'RR6' Waterford Wedgwood plc -- Long-term IDR 'D' -- Short-term IDR 'D' -- US$60 million senior secured term loan: revised to 'CC'/'RR3'/Rating Watch Negative (RWN) from 'CCC'/'RR3'/RWN -- EUR166 million mezzanine notes due 2010: 'C'/'RR6' WIND Hellas Telecommunications S.A. -- Long-term IDR 'B-' (B minus); Stable Outlook -- Short-term IDR 'B' -- Hellas Telecommunications (Luxembourg) V senior revolving credit facility and Hellas Telecommunications (Luxembourg) V senior secured floating rate notes due 2012: 'B'/'RR3' -- Hellas Telecommunications (Luxembourg) III senior notes due 2013: revised to 'CCC'/'RR5' from 'CCC+'/'RR5' -- Hellas Telecommunications (Luxembourg) II subordinated floating-rate notes due 2015: revised to 'CC'/'RR6' from 'CCC'/'RR6' DORNIER AVIATION: Court Okays Final Settlement With Hainan ---------------------------------------------------------- Wiley Rein partner H. Jason Gold, the court-authorized liquidating trustee for the bankruptcy estate of Dornier Aviation (North America), Inc. (DANA), said that the bankruptcy court has approved a full and final settlement of all litigation and disputes with Hainan Airlines, a major international airline based in China. Hainan has paid the trustee US$14,950,000 in consideration of the settlement and Mr. Gold is now moving to dismiss all legal actions filed against Hainan. The trustee had brought suit back in December 2003 and final judgment was obtained in August of last year to recover unpaid accounts. U.S. Bankruptcy Judge Steven S. Mitchell presided over the case and approved the settlement. "We are pleased to have reached this compromise and settlement with Hainan. The funds recently paid will now allow us to pay in full the claims asserted by the creditors of the bankrupt company Dornier Aviation of North America, including numerous individuals and American companies, large and small," said Mr. Gold. Mr. Gold is head of Wiley Rein's Bankruptcy & Financial Restructuring Practice. The firm served as Mr. Gold's counsel in the DANA/Hainan Airlines litigation. Dornier Aviation (North America) is a U.S. subsidiary of German aircraft manufacturer Fairchild Dornier GMBH. Some of the Company's former employees filed an involuntary Chapter 7 bankruptcy petition on April 25, 2002 (Bankr. E.D.Va. Case No. 05- 1930). The case was subsequently converted to a Chapter 11 reorganization. The Debtor failed to reorganize and a liquidation plan was proposed and confirmed in 2003. DSL BAHNDIENSTE: Claims Registration Period Ends March 27 --------------------------------------------------------- Creditors of DSL Bahndienste GmbH have until March 27, 2009, to register their claims with court-appointed insolvency manager. Creditors and other interested parties are encouraged to attend the meeting at 8:30 a.m. on April 22, 2009, at which time the insolvency manager will present his first report. The meeting of creditors will be held at: The District Court of Dortmund Hall 3.201 Gerichtsplatz 22 44135 Dortmund 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. Winfrid Andres Stefanstrasse 2 44135 Dortmund Germany The District Court opened bankruptcy proceedings against the company on Feb. 12, 2009. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: DSL Bahndienste GmbH Sckellstr. 24 44141 Dortmund Germany Attn: Sabine Busche, Manager Postweg 14 44329 Dortmund Germany GENERAL MOTORS: Germany to Hold Talks w/ US Over Opel This Month ---------------------------------------------------------------- Bertrand Benoit at The Financial Times reports that the German government will hold talks with the US this month on the future of Adam Opel GmbH, the German unit of General Motors Corp. The FT relates Karl-Theodor zu Guttenberg, German economics minister, said he would consult his US counterpart and GM representatives when he visits the US later this month. On Monday, the FT recalls Opel's management presented proposals for a restructuring, which Berlin has made a condition of any state assistance to Opel. Deutsche Welle discloses that according to German Chancellor Angela Merkel, before a decision on a bail- out could be taken it needs to be ascertained whether a company's troubles are triggered by the global financial crisis and whether it can continue to operate strongly in the long-term. Mr. Guttenberg, as cited by FT, said Berlin would carefully review the proposals in the coming weeks. Restructuring Proposals Citing GM Europe head Carl-Peter Forster, The Daily Telegraph's Jamie Dunkley and James Quinn report that the proposals will see up to half of Vauxhall and Opel being acquired by outside investors. GM will retain the remainder, The Daily Telegraph notes. The Daily Telegraph relates that Mr. Forster on Friday said under the restructuring proposals, the new entity will also seek EUR3.3 billion (GBP2.9 billion) in aid from European governments and receive a EUR3 billion injection from GM. The company will also look to make EUR1.2 billion worth of cost cuts as it lowers capacity, The Daily Telegraph adds. The Guardian says according to Opel head Hans Demant, Opel, which employs 26,000 people in Germany, would "largely detach" itself from GM and reorganize as a joint-stock company to lure investors and state backing to save it from insolvency. However, Mr. Forster noted that the German unit would become "significantly more independent" as a self-standing European company, but would retain close links with GM, The Guardian recounts. Bloomberg News discloses that in a Bloomberg Television interview on Tuesday Mr. Demant said GM ownership of Opel is "absolutely necessary because we do need our mother in the background to provide for and help us with technology development." GM Vice Chairman Robert Lutz in a Bloomberg Television interview from Geneva on Monday noted that GM prefers to maintain "operational and technical control" of Opel, Bloomberg News adds. BBC News recalls GM chief operating officer Fritz Henderson has warned the European divisions of the U.S. automaker could collapse within weeks without European governments' help. Mr. Henderson said governments should step in immediately to ensure GM Europe does not run out of money by April or May, BBC states. About Adam Opel GmbH Adam Opel GmbH -- http://www.opel.com/-- a wholly-owned subsidiary of General Motors Corp for 80 years, is the core of GM's business in Europe. Opel's passenger cars (Astra, Zafira, Vectra, and electric Ampera), along with its light commercial vehicles (Combo and Movano) represent over 90% of GM's total sales in Germany. Opel is the third-most popular brand in Germany, behind Volkswagen and Mercedes-Benz. It offers International and Diplomat Sales (IDS) to customers in international organizations, the military, and in diplomatic service, also builds cars in Belgium, Poland, Portugal, and Britain. 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. H & K ALLFINANZ: Claims Registration Period Ends April 8 -------------------------------------------------------- Creditors of H & K Allfinanz Marketing GmbH have until April 8, 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 May 6, 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: Dirk Decker Julius-Vosseler-Strasse 42 22527 Hamburg Germany The District Court opened bankruptcy proceedings against the company on Feb. 23, 2009. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: H & K Allfinanz Marketing GmbH Attn: Raymond Larsen Klamandt, Manager Durchschnitt 13 20146 Hamburg Germany KABEL DEUTSCHLAND: S&P Gives Positive Outlook; Affirms 'B+' Rating ------------------------------------------------------------------ Standard & Poor's Ratings Services said that it had revised its outlook on German cable TV operator Kabel Deutschland GmbH to positive from stable. The 'B+' long-term corporate credit rating was affirmed. At the same time, S&P raised the issue ratings on the EUR610 million and EUR250 million senior unsecured notes due July 2014 issued by KDG to 'B' from 'B-'. The recovery ratings were revised to '5' from '6', indicating S&P's expectation of modest (10%-30%) recovery for unsecured creditors in the event of a payment default. "The outlook revision acknowledges KDG's improved free operating cash flow generation of EUR69 million in the 12 months to Dec. 31, 2008, and S&P's expectations of continued moderate EBITDA and FOCF growth prospects in the near term, with a positive impact on credit measures," said Standard & Poor's credit analyst Matthias Raab. In S&P's opinion, EBITDA and FOCF growth are supported by further moderate revenue and EBITDA growth potential from the uptake of high-speed Internet and telephony services (together with CATV, called "triple play"). Given some utility-like characteristics of the CATV business, the company's performance has the potential to be resilient, even if these growth trends soften in the current consumer environment. The ratings are supported by KDG's medium-term capital structure, with no amortizations before March 2012. Furthermore, based on S&P's projections, S&P expects KDG to have adequate headroom under its amended senior net debt-to-EBITDA maintenance covenant over the next two years. In the nine months to Dec. 31, 2008, KDG's EBITDA (before restructuring costs and share-based compensation expenses) increased by 28% year on year to EUR427 million, primarily due to significant triple-play subscriber growth and the consolidation of 1.1 million CATV subscribers that were acquired from Orion Cable on April 30, 2008. Nevertheless, KDG was still highly leveraged on Dec. 31, 2008, with adjusted gross debt to annualized third- quarter EBITDA at 6.7x (5.4x unadjusted, but including the payment-in-kind loan from KDG's parent company) and adjusted funds from operations to debt of 11%. The positive outlook reflects the potential for an upgrade in the first half of 2010, based on S&P's expectations that KDG is likely to reduce leverage, due to moderate EBITDA growth potential from the uptake of triple-play services and meaningful free cash flow generation from its CATV business. "We would consider an upgrade if KDG continues to improve its FOCF generation and operating performance, despite deteriorating economic conditions," said Mr. Raab. "At the same time, all other things being equal, KDG would need to maintain adequate maintenance-covenant headroom of more than 20% and have a ratio of adjusted funds from operations to debt of about 15%." KAPLAN BAU: Claims Registration Period Ends March 24 ---------------------------------------------------- Creditors of Kaplan Bau GmbH have until March 24, 2009, to register their claims with court-appointed insolvency manager. Creditors and other interested parties are encouraged to attend the meeting at 10:00 a.m. on May 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 Ludwigshafen am Rhein Meeting Hall XIII Wittelsbachstr. 10 67061 Ludwigshafen/Rhein 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: Marc Schmidt-Thieme Soldnerstr. 2 68219 Mannheim Germany The District Court opened bankruptcy proceedings against the company on Feb. 24, 2009. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: Kaplan Bau GmbH Attn: Serdal Yusein Sali, Manager Berliner St. 20 67059 Ludwigshafen Germany MVF REICO: Claims Registration Period Ends April 7 -------------------------------------------------- Creditors of MVF Reico GmbH have until April 7, 2009, to register their claims with court-appointed insolvency manager. Creditors and other interested parties are encouraged to attend the meeting at 10:30 a.m. on May 5, 2009, at which time the insolvency manager will present his first report. The meeting of creditors will be held at: The District Court of Halle (Saal) Hall 1.043 Judicial Center Thueringer Str. 16 06112 Halle 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: Ulrich Luppe Hansering 9/10 06108 Halle Germany Tel: 0345/614070 Fax: 0345/6140710 The District Court opened bankruptcy proceedings against the company on Feb. 16, 2009. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: MVF REICO GmbH Attn: Andreas Reisewitz, Manager Zum Muehlberg 6 06188 Landsberg OT Kockwitz Germany POHLAND: Files for Insolvency; 343 Jobs at Risk ----------------------------------------------- Alexander Huebner at Reuters reports that Pohland, a men's clothing retailer in Germany, has filed for insolvency after its banks canceled outstanding credit lines, putting 343 jobs at risk. The report recalls last month, owner Aurelius said the company's financing was no longer secured after sales had dropped in recent months. The company, which has 12 outlets, generated sales of EUR44.5 million (US$56.28 million) last year, the report discloses. The report notes the company added four outlets last year. According to the report, the business will continue operating while its management works on a restructuring plan. SEEHAUS BAU: Claims Registration Period Ends March 23 ----------------------------------------------------- Creditors of Seehaus Bau GmbH have until March 23, 2009, to register their claims with court-appointed insolvency manager. Creditors and other interested parties are encouraged to attend the meeting at 10:31 a.m. on April 1, 2009, at which time the insolvency manager will present his first report. The meeting of creditors will be held at: The District Court of Flensburg Hall A 220 Suedergraben 22 Flensburg 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: Jensen & Emmerich Lise-Meitner-Str. 1 24941 Flensburg Germany The District Court opened bankruptcy proceedings against the company on Feb. 23, 2009. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: Seehaus Bau GmbH Ruhnmark 11 24975 Maasbuell Germany Attn: Arne Carsten Christensen, Manager Sonder Ringvey 18 DK-9300 Saeby Germany WEINBOERSE HOLDING: Claims Registration Period Ends April 27 ------------------------------------------------------------ Creditors of Weinboerse Holding GmbH have until April 27, 2009, to register their claims with court-appointed insolvency manager. Creditors and other interested parties are encouraged to attend the meeting at 10:15 a.m. on May 8, 2009, at which time the insolvency manager will present his first report. The meeting of creditors will be held at: The District Court of Krefeld Meeting Room H 131 Nordwall 131 47798 Krefeld 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: Wilhelm Klaas Eichendorffstrasse 25 47800 Krefeld Germany The District Court opened bankruptcy proceedings against the company on Feb. 15, 2009. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: Weinboerse Holding GmbH Suedwall 20-22 47798 Krefeld Germany Attn: Ralf Theuvsen, Manager Steinheide 53 47918 Toenisvorst Germany ============= I C E L A N D ============= LANDSBANKI ISLANDS: Inks Settlement Deal with Straumur-Burdaras --------------------------------------------------------------- Landsbanki Islands hf and Straumur-Burdaras Investment Bank hf on Tuesday, March 3, 2009, reached a settlement agreement on their claims against each other, including money market lines, loans, derivative positions, bonds and guarantees. After netting off the respective claims, the net exposure of Landsbanki to Straumur has been settled with a transfer of assets from Straumur to Landsbanki. This agreement has no material impact on Straumur's income statement and no effect on its cash position. However, the agreement reduces Straumur's gross assets by approximately EUR200 million and improves its CAD ratio by nearly 2%. This agreement is consistent with Straumur's medium- term strategy for reducing its balance sheet and overall risk levels. About Landsbanki Headquartered in Reykjavik, Iceland, Landsbanki Islands hf. -- http://www.landsbanki.is/-- is a financial institution. The Bank filed for Chapter 15 protection on Dec. 9, 2008 (Bankr. S.D. N.Y. Case No.: 08-14921). Gary S. Lee, Esq., at Morrison & Foerster LLP, represents the Debtor. When it filed for protection from its creditors, it listed assets and debts of more than US$1 billion each. ============= I R E L A N D ============= DEKANIA EUROPE: S&P Retains Negative Watch on Two 'BB'-Rated Notes ------------------------------------------------------------------ Standard & Poor's Ratings Services kept on CreditWatch negative its credit ratings on certain notes in Dekania Europe CDO I PLC, Dekania Europe CDO II PLC, and Dekania Europe CDO III PLC pending a specific asset/securities review. These collateralized debt obligation transactions are backed by hybrid securities issued by European financial institutions and insurance companies. S&P placed the ratings on the affected tranches on CreditWatch negative on July 18, 2008 to reflect changes being made to the assumptions S&P uses for rating CDOs backed by these types of assets. S&P's assumptions for rating this type of CDO include the methodology and parameters used to derive the probability of default/deferral, default timings, expected recovery levels, the timing of recoveries, and correlation risks. S&P published its revised criteria on Nov. 21, 2008 and are now applying the revised methodology to these transactions. However, S&P recently received asset-specific information provided by the transactions' managers that S&P believes will enhance the analysis already undertaken. This has led to the extension of the CreditWatch placements. On the basis of the application of the revised criteria and S&P's analysis of the asset-specific data, S&P will resolve the CreditWatch placements, on a case-by-case basis. Ratings List Ratings Remaining On CreditWatch Negative Dekania Europe CDO I PLC EUR274 Million Fixed- and Floating-Rate Notes Class Ratings ----- ------- A2 AAA/Watch Neg A3 AAA/Watch Neg B1 AA/Watch Neg B2 AA/Watch Neg C A/Watch Neg D BBB-/Watch Neg Combo P A/Watch Neg Combo Q BBB/Watch Neg Combo R BBB-/Watch Neg Dekania Europe CDO II PLC EUR300 Million Fixed- and Floating-Rate Notes Class Ratings ----- ------- C A-/Watch Neg D1 BBB/Watch Neg D2 BBB/Watch Neg E BB/Watch Neg Combo P BB/Watch Neg Combo Q BBB+/Watch Neg Combo R BBB/Watch Neg Dekania Europe CDO III PLC EUR300 Million Floating-Rate Notes Class Ratings ----- ------- C A/Watch Neg D BBB-/Watch Neg EUROCASTLE CDO II: Fitch Junks Rating on EUR3 Mln Class E Notes --------------------------------------------------------------- Fitch Ratings has downgraded six classes of Eurocastle CDO II PLC's notes, removed the six notes from Rating Watch Negative, and assigned rating Outlooks as detailed below. -- EUR204 million class A-1 (XS0215942375) downgraded to 'BBB' from 'AAA'; removed from RWN; assigned a Stable Outlook -- EUR33.3 million class A-2 (XS0215942888) downgraded to 'BB' from 'AAA'; removed from RWN; assigned a Stable Outlook -- EUR28.5 million class B (XS0215942961) downgraded to 'B' from 'AA'; removed from RWN; assigned a Stable Outlook -- EUR8.25 million class C (XS0215943183) downgraded to 'B' from 'A'; removed from RWN; assigned a Stable Outlook -- EUR9.75 million class D (XS0215943266) notes downgraded to 'B-' (B minus) from 'BBB'; removed from RWN; assigned a Negative Outlook -- EUR3 million class E (XS0215943340) notes downgraded to 'CCC' from 'BB'; removed from RWN The downgrades reflect Fitch's view on the credit risk of the rated tranches following the release of the agency's revised Structured Finance CDO rating criteria on December 16, 2008, as well as credit deterioration to the collateral pool since the previous review. The application of the new SF CDO rating criteria incorporates Fitch's view on industry and vintage concentration risks and the propensity for low recoveries upon default, particularly for thin tranches. Although the application of the new criteria has significantly impacted the transaction's ratings, credit deterioration in the portfolio and the inclusion of a significant amount of UK non-conforming residential mortgage-backed securities has particularly affected the junior tranches. As per the trustee report dated December 11, 2008, the portfolio contained 60 performing assets from 53 obligors, with the largest exposure accounting for approximately 4.24% of the outstanding portfolio amount, and the three largest obligors accounting for 11.59% of the outstanding portfolio amount. According to Fitch classifications, the largest single industry is CMBS representing 55% of the portfolio volume, followed by RMBS with 25%. Approximately, half of the RMBS assets fall into the non- conforming category with the other half classified as prime RMBS. The non-conforming RMBS originate from 2004 (making up 4% of the portfolio), 2005 (8%) and 2006 (1%). The entirely portfolio is located in the UK. In conducting its analysis, Fitch makes a three-notch downward adjustment for any names on Rating Watch Negative for default analysis under its Portfolio Credit Model. On an adjusted basis approximately 32% of the assets are treated as sub-investment grade. The weighted average portfolio quality is 'BBB-' (BBB minus)/'BB+' and 21% of the portfolio assets are on RWN. While the downgrade of the class A1, A2, and B notes is driven by Fitch's revised criteria, the downgrade of the class C, D and E notes is also linked to performance concerns about the underlying asset pool. In particular given the predominance of UK CMBS assets in the pool and the high percentage of assets that are currently on rating watch, Fitch expects further negative portfolio migration which could result in a higher percentage of assets that are subject to cuts in the overcollateralisation ratio calculation. This in turn could result in the junior notes failing the OC test. In this case interest will be diverted away from the junior notes to amortize the senior notes. The class E notes have been downgraded to 'CCC' as this class is most vulnerable to future rating migration. Eurocastle CDO II plc is a limited liability company incorporated under the laws of Ireland. The proceeds from the note issuance were used to purchase a portfolio of structured finance securities, including primarily residential and commercial mortgage-backed securities and to a lesser extent, collateralized debt obligations, asset-backed securities and whole business- backed securities. The portfolio is actively managed by the Fortress Investment Group LLC. EUROCASTLE CDO III: Fitch Junks Ratings on Class D and E Notes -------------------------------------------------------------- Fitch Ratings has downgraded six classes of Eurocastle CDO III PLC's notes, removed the six notes from Rating Watch Negative, and assigned rating Outlooks as detailed below. -- EUR525 million class A-1 (XS021593840) notes downgraded to 'BBB' from 'AAA'; removed from RWN; assigned a Stable Outlook -- EUR82.5 million class A-2 (XS0215938779) notes downgraded to 'BB' from 'AAA'; removed from RWN; assigned a Stable Outlook -- EUR63.75 million class B (XS0215939231) notes downgraded to 'B' from 'AA'; removed from RWN; assigned a Stable Outlook -- EUR22.5 million class C (XS021593914) notes downgraded to 'B-' (B minus) from 'A'; removed from RWN; assigned a Stable Outlook -- EUR18.75 million class D (XS0215939744) notes downgraded to 'CCC' from 'BBB'; removed from RWN -- EUR5,625 million class E (XS0215940080) notes downgraded to 'CCC' from 'BB'; removed from RWN The downgrades reflect Fitch's view on the credit risk of the rated tranches following the release of the agency's revised Structured Finance CDO rating criteria on December 16, 2008, as well as credit deterioration to the collateral pool since the previous review. The application of the new SF CDO rating criteria incorporates Fitch's view on industry and vintage concentration risks and the propensity for low recoveries upon default, particularly for thin tranches. Although the application of the new criteria has significantly impacted the transaction's ratings, credit deterioration in the portfolio and the inclusion of a notable amount of UK non-conforming residential mortgage-backed securities has particularly affected the junior tranches. As per the trustee report dated December 11, 2008, the portfolio contained 121 performing assets from 101 obligors and one defaulted obligation, with the largest exposure accounting for approximately 4% of the outstanding portfolio amount, and the three largest obligors accounting for 10% of the outstanding portfolio amount. According to Fitch classifications, the largest single industry is CMBS with 36% of the portfolio volume followed by RMBS with 32 %. Of the RMBS, 13% fall into the non-conforming category and 19% are classified as prime RMBS. The non-conforming RMBS originate mainly from 2005 (making up 6% of the portfolio) and 2006 (5%). The three largest country concentrations are the UK, Italy and Germany making up 24%, 23% and 16% of the portfolio respectively. In conducting its analysis, Fitch makes a three-notch downward adjustment for any names on Rating Watch Negative for default analysis under its Portfolio Credit Model. On an adjusted basis approximately 34% of the assets are treated as sub-investment grade. The weighted average portfolio quality is 'BB+' and 18% of the portfolio is on RWN. While the downgrade of the class A1 and A2 notes is driven by Fitch's revised criteria, the downgrade of the class B, C, D and E notes is also linked to performance concerns about the underlying asset pool, in particular regarding a German CMBS transaction of which the largest loan is currently in default. In addition the pool features Spanish CDO and RMBS exposures as well as UK CMBS and UK non-conforming RMBS transactions. Given the high percentage of assets that are currently on rating watch, Fitch expects further negative portfolio migration which could result in a higher percentage of assets that are subject to cuts in the overcollateralisation ratio calculation. This in turn could result in the junior notes failing the OC test. In this case interest will be diverted away from the junior notes to amortize the senior notes. The class D and E notes have both been downgraded to 'CCC' as these classes are most vulnerable to future rating migration. The class E notes, representing only 1% of the capital structure, do not provide significant protection to class D to justify a rating above the 'CCC' category for the latter class. Eurocastle CDO III plc is a limited liability company incorporated under the laws of Ireland. The proceeds from the note issuance were used to purchase a portfolio of structured finance securities, including primarily residential and commercial mortgage-backed securities and to a lesser extent, collateralized debt obligations, asset-backed securities and whole business- backed securities. The portfolio is actively managed by the Fortress Investment Group LLC. MF CAPITAL: S&P Cuts Rating on EUR32.5 Mln Notes to 'CCC+' ---------------------------------------------------------- Standard & Poor's Ratings Services lowered its credit ratings on five European synthetic collateralized debt obligation tranches: Four tranches of Aria CDO I and one of MF Capital II Ltd. At the same time, S&P placed the four Aria CDO I tranches on CreditWatch negative and removed the MF Capital II Ltd. tranche from CreditWatch negative. S&P has taken these actions to reflect rating changes to the underlying collateral in these transactions. Ratings List Rating Lowered and Placed on Creditwatch Negative Aria CDO I EUR31.5 Million, CHF58.4 Million, GBP0.4 Million, and US$17.4 Million Floating-Rate Secured Notes (Issued by Aria CDO I (Cayman Islands) Ltd.) Rating ------ Series To From ------ -- ---- 4 A+/Watch Neg AA 5 A+/Watch Neg AA 6 A+/Watch Neg AA 7 A+/Watch Neg AA Rating Lowered and Removed from Creditwatch Negative MF Capital II Ltd. EUR32.5 Million Promissory Notes Rating ------ To From -- ---- CCC+ B/Watch Neg WALSH MAGUIRE: High Court Appoints Liquidator --------------------------------------------- RTE Business reports that Walsh Maguire and Company has gone into liquidation after running into liquidity and bad debt issues. The report relates the High Court on Monday appointed Kieran Wallace of KPMG as liquidator of the company, which employs 55 people directly and about 400 through sub-contractors. The company, as cited by the report, said it had been forced to cease trading as it has been unable to gain access to temporary finance to ease short term cash flow difficulties. It added efforts to secure investment or merger options both at home and abroad have also failed, the report notes. However, the company said it is 'firmly committed' to meeting its obligations to complete the 12 projects it is currently working on, the report discloses. The report states about one third of the direct employees will continue to be employed until current projects, which are valued at over EUR35 million, are finished. Established in 1982, Walsh Maguire is a building and civil engineering company. WATERFORD WEDGWOOD: Asset Sale Prompts S&P to Withdraw 'D' Ratings ------------------------------------------------------------------ Standard & Poor's Ratings Services said it withdrew its 'D' long- term corporate credit rating on Ireland-based luxury table- and dinner-ware manufacturer Waterford Wedgwood PLC. The 'D' issue rating on its EUR166 million subordinated mezzanine notes due 2010, and their recovery rating of '6' were also withdrawn. This action followed the announcement of the sale of major operating assets of the group to the New York-based fund management firm KPS Capital Partners. As a result of these far- reaching changes in the ownership structure of the group, S&P has been unable to receive a consistent stream of information, which would allow us to either maintain or amend S&P's ratings. On Jan. 5, 2009, Standard & Poor's lowered its long-term corporate credit rating on the group to 'D', from 'SD', following the announcement of the appointment of Deloitte LLP partners as receivers and administrators to Waterford Wedgwood PLC and a number of its operating subsidiaries. The rating on EUR166 million subordinated mezzanine notes, due 2010, had already been lowered to 'D' on Dec. 1, 2008, on the nonpayment of the coupon on these notes. The recovery rating on the subordinated notes was '6', indicating Standard & Poor's expectation of negligible (0%- 10%) recovery. WATERFORD WEDGWOOD: Fitch Revises Rating on Sr. Loan to 'CC'/'RR3' ------------------------------------------------------------------ Further to the publication of updated definitions for its rating scales, Fitch Ratings has revised some existing debt instrument ratings in the 'CCC', 'CC', and 'C' categories for three EMEA corporates. A full list of the three corporates and their affected debt instrument ratings, detailed as rating revisions, follows: Cognis GmbH -- Long-term Issuer Default Rating 'B'; Negative Outlook -- EUR1.63 billion senior secured floating-rate notes and loans: 'B+'/'RR3' -- EUR250 million super senior secured revolving credit facility: 'BB'/'RR1' -- EUR345 million high-yield notes: revised to 'CCC'/'RR6' from 'CCC+'/'RR6' -- Cognis Holding GmbH's EUR421 million PIK notes: revised to 'CC'/'RR6' from 'CCC'/'RR6' Waterford Wedgwood plc -- Long-term IDR 'D' -- Short-term IDR 'D' -- US$60 million senior secured term loan: revised to 'CC'/'RR3'/Rating Watch Negative (RWN) from 'CCC'/'RR3'/RWN -- EUR166 million mezzanine notes due 2010: 'C'/'RR6' WIND Hellas Telecommunications S.A. -- Long-term IDR 'B-' (B minus); Stable Outlook -- Short-term IDR 'B' -- Hellas Telecommunications (Luxembourg) V senior revolving credit facility and Hellas Telecommunications (Luxembourg) V senior secured floating rate notes due 2012: 'B'/'RR3' -- Hellas Telecommunications (Luxembourg) III senior notes due 2013: revised to 'CCC'/'RR5' from 'CCC+'/'RR5' -- Hellas Telecommunications (Luxembourg) II subordinated floating-rate notes due 2015: revised to 'CC'/'RR6' from 'CCC'/'RR6' ========= I T A L Y ========= CHRYSLER LLC: Fiat Deal Moving Forward, CEO Says ------------------------------------------------ Marco Bertacche at Bloomberg News reports Chrysler LLC said its planned partnership with Fiat SpA is going ahead and that executives from the Italian company helped draw up the viability strategy that the U.S. manufacturer submitted to the U.S. Government. As reported by the Troubled Company Reporter on Jan. 21, 2009, Fiat is in talks with Chrysler about acquiring a stake in the U.S. car maker and forming a partnership to let the Italian auto maker build and sell its small cars in the U.S. Fiat is likely to take a 35% stake in Chrysler by the middle of the year. Chrysler and Fiat are currently looking over each other's books and terms of the deal are being discussed with governments and unions, the news agency cited Jim Press, the U.S. company's president, as saying in a March 3 Geneva International Motor Show. The next stage of talks will follow after March 31, the report says. Meanwhile, Jerrold Colten at Bloomberg News reports Fiat Chief Executive Officer Sergio Marchionne told reporters in Geneva that the Italian company is "fine" after having secured a EUR1 billion credit line and denied that he's considering a capital increase. About Chrysler LLC Headquartered in Auburn Hills, Michigan, Chrysler LLC -- http://www.chrysler.com/-- a unit of Cerberus Capital Management LP, produces Chrysler, Jeep(R), Dodge and Mopar(R) brand vehicles and products. The company has dealers worldwide, including Canada, Mexico, U.S., Germany, France, U.K., Argentina, Brazil, Venezuela, China, Japan and Australia. * * * As reported in the Troubled Company Reporter on Dec. 3, 2008, Dominion Bond Rating Service downgraded the ratings of Chrysler LLC, including Chrysler's Issuer Rating to CC from CCC (high). Chrysler's First Lien Secured Credit Facility and Second Lien Secured Credit Facility have also been downgraded to CCC and CC (low) respectively. All trends are Negative. The ratings action reflects Chrysler's challenge to maintain sufficient liquidity balances amid severe industry conditions that have deteriorated alarmingly over the past few months and are not expected to improve in the near term. With this ratings action, Chrysler is removed from Under Review with Negative Implications, where it was placed on Nov. 7, 2008. As reported in the Troubled Company Reporter on Aug. 11, 2008, Standard & Poor's Ratings Services lowered its ratings on Chrysler LLC, including the corporate credit rating, to 'CCC+' from 'B-'. TELECOM ITALIA: Says It Can Manage Debt, Won't Need Fresh Funds --------------------------------------------------------------- Telecom Italia S.p.A. denied a press report that it might need to tap shareholders for cash to pay for its investment plans, The Financial Times reports. The company has ample ability to finance its debt and does not need a capital injection from investors, Chief Executive Officer Franco Bernab� was cited by the news agency as saying. The report relates Mr. Bernab� said Telecom Italia's EUR34 billion (US$42.8 billion) of net debt was sustainable noting that the company had already refinanced 25 per cent of its debt so far this year. "We have no problem whatsoever in funding our debt," Mr. Bernab� said, adding that the company had also been able to cut its debt by EUR1.7 billion in 2008 as a consequence of "a very strong decline in costs". Telecom Italia S.p.A. (NYSE:TI) --- http://www.telecomitalia.it/ --- is an Italy-based telecommunications group that operates in the communications sector, in the television sector using both analog and digital terrestrial technology, and in the office products sector. The Company is engaged principally in the communications sector and, particularly, in telephone and data services on fixed lines, for final retail customers and wholesale providers, in the development of fiber optic networks for wholesale customers, in Internet services, in domestic and international mobile telecommunications (especially in Brazil), in the television sector using both analog and digital terrestrial technology and in the office products sector. The Company operates mainly in Europe, the Mediterranean Basin and in South America. In August 2008, ILIAD SA announced that it had finalized the acquisition of Alice France, the broadband operations of the Company. =================== K A Z A K H S T A N =================== ALTYN BASTAU: Creditors Must File Claims by April 3 --------------------------------------------------- The Specialized Inter-Regional Economic Court of Akmola has declared LLP Altyn Bastau insolvent. Creditors have until April 3, 2009, to submit written proofs of claim to: Kenesary St. 46-38 Astana Kazakhstan The Court is located at: The Specialized Inter-Regional Economic Court of Akmola Gorky St. 37 Kokshetau Akmola Kazakhstan AUCTION CENTRE: Creditors Must File Claims by April 3 ----------------------------------------------------- LLP Auction Centre has declared insolvency. Creditors have until April 3, 2009, to submit written proofs of claim to: Jangeldin Street Shymkent South Kazakhstan Kazakhstan BAITILES LLP: Creditors Must File Claims by April 3 --------------------------------------------------- The Specialized Inter-Regional Economic Court of Karaganda has declared LLP Baitiles insolvent. Creditors have until April 3, 2009, to submit written proofs of claim to: The Specialized Inter-Regional Economic Court of Karaganda Alalykin St. 9 Karaganda Kazakhstan DIHAN-2 LLP: Creditors Must File Claims by April 3 -------------------------------------------------- The Specialized Inter-Regional Economic Court of Kyzylorda has declared LLP Dihan-2 insolvent. Creditors have until April 3, 2009, to submit written proofs of claim to: The Specialized Inter-Regional Economic Court of Kyzylorda Aiteke bi St. 29 120014 Kyzylorda Kyzylorda Kazakhstan IMMO-INVEST LLP: Creditors Must File Claims by April 3 ------------------------------------------------------ LLP Immo-Invest has declared insolvency. Creditors have until April 3, 2009, to submit written proofs of claim to: Tole Bi St. 189v Almaty Kazakhstan INFINITY ELECTRONICS: Creditors Must File Claims by April 3 ----------------------------------------------------------- LLP Infinity Electronics has declared insolvency. Creditors have until April 3, 2009, to submit written proofs of claim to: Kabanabai Batyr St. 188a Almaty Kazakhstan INVEST MEGA: Creditors Must File Claims by April 3 -------------------------------------------------- LLP Invest Mega Group has declared insolvency. Creditors have until April 3, 2009, to submit written proofs of claim to: Kabanbai Batyr ave. 11 Astana Kazakhstan JAYILMA LLP: Creditors Must File Claims by April 3 -------------------------------------------------- The Specialized Inter-Regional Economic Court of Kyzylorda has declared LLP Jayilma insolvent. Creditors have until April 3, 2009, to submit written proofs of claim to: The Specialized Inter-Regional Economic Court of Kyzylorda Aiteke bi St. 29 120014 Kyzylorda Kyzylorda Kazakhstan SHIK STROY: Creditors Must File Claims by April 3 ------------------------------------------------- LLP Company Shik Stroy insolvent. Creditors have until April 3, 2009, to submit written proofs of claim to: Furmanov St. 235-47 Almaty Kazakhstan TEMIR TAS LTD LLP: Creditors Must File Claims by April 3 -------------------------------------------------------- LLP Temir Tas Ltd. has declared insolvency. Creditors have until April 3, 2009, to submit written proofs of claim to: Micro district 23, 2-62 Karaganda Kazakhstan =================== K Y R G Y Z S T A N =================== DESIGN DESCORT: Creditors Must File Claims by March 20 ------------------------------------------------------ LLC Firm on Construction and Design Descort has declared insolvency. Creditors have until March 20, 2009, to submit written proofs of claim to: Isanov St. 147-26 Bishkek Kyrgyzstan Tel: (+996 312) 55-94-45 =========== L A T V I A =========== * LATVIA: CD Swaps at All-Time High on Higher Jobless Figure ------------------------------------------------------------ Credit-default swaps linked to Latvia increased nine basis points to an all-time high of 1,109 basis points after the country's unemployment climbed to the highest in almost nine years, Bloomberg News reports citing data from CMA Datavision in London. According to the report, the cost to protect against a default by Latvia is above the 1,000 level, breached last week, that investors consider distressed, and is about 270 basis points above contracts linked to Lithuania. The report relates Baiba Pasevica, the director of the National Employment Office, said Latvia's registered unemployed increased to 9.5 percent of the 2.3 million population by the end of February, from 8.3 percent in January. The report recalls Latvia sought a EUR7.5 billion (US$9.5 billion) International Monetary Fund bailout last year. The country's economy contracted 10.5 percent in the fourth quarter and the government collapsed last month prompting Standard & Poor's to lower the country's credit rating to non-investment grade with a negative outlook, Bloomberg News says. =================== L U X E M B O U R G =================== BERNARD L. MADOFF: UBS AG Wins Ruling in Luxembourg Lawsuit ----------------------------------------------------------- According to Bloomberg's Elizabeth Amon, UBS AG won a ruling in a Luxembourg lawsuit filed by Banca Intermobiliare SpA seeking to force the release of EUR5.1 million (US$6.5 million) from an account belonging to a fund that had invested with Bernard Madoff. A Luxembourg court, Bloomberg relates, said BIM's claims were unfounded in an emergency ruling Feb. 27. BIM asserted that UBS had a duty to pay it after sending the Italian bank a confirmation for a redemption request from the British Virgin Islands-based Groupement Financier fund made before Madoff was arrested Dec. 11. Luxembourg's financial regulator on Feb. 25 faulted UBS for inadequate due diligence in its role as a custodian bank for the Madoff-linked LuxAlpha Sicav-American Selection fund. While the decision was the first to deal with UBS as an account holder rather than as custodian, it may show that the regulator's statement has "limited" influence on the courts, Ms. Amon said. Meanwhile, according to Bloomberg, a London judge gave the liquidators of Bernard Madoff's U.K. and U.S. firms an order making it easier for them to share information. Justice Kim Lewison at the High Court in London ruled Feb. 27 that it was in the public interest for the liquidators to share information including personal data. Lexia Hilliard and Robin Dicker, lawyers for the U.K. and U.S. liquidators respectively, told the judge that, while they could share information without the order, it would help them to stay within strict European Union data protection laws. WIND HELLAS: Fitch Revises Rating on 2015 Notes to 'CC'/'RR6' ------------------------------------------------------------- Further to the publication of updated definitions for its rating scales, Fitch Ratings has revised some existing debt instrument ratings in the 'CCC', 'CC', and 'C' categories for three EMEA corporates. A full list of the three corporates and their affected debt instrument ratings, detailed as rating revisions, follows: Cognis GmbH -- Long-term Issuer Default Rating 'B'; Negative Outlook -- EUR1.63 billion senior secured floating-rate notes and loans: 'B+'/'RR3' -- EUR250 million super senior secured revolving credit facility: 'BB'/'RR1' -- EUR345 million high-yield notes: revised to 'CCC'/'RR6' from 'CCC+'/'RR6' -- Cognis Holding GmbH's EUR421 million PIK notes: revised to 'CC'/'RR6' from 'CCC'/'RR6' Waterford Wedgwood plc -- Long-term IDR 'D' -- Short-term IDR 'D' -- US$60 million senior secured term loan: revised to 'CC'/'RR3'/Rating Watch Negative (RWN) from 'CCC'/'RR3'/RWN -- EUR166 million mezzanine notes due 2010: 'C'/'RR6' WIND Hellas Telecommunications S.A. -- Long-term IDR 'B-' (B minus); Stable Outlook -- Short-term IDR 'B' -- Hellas Telecommunications (Luxembourg) V senior revolving credit facility and Hellas Telecommunications (Luxembourg) V senior secured floating rate notes due 2012: 'B'/'RR3' -- Hellas Telecommunications (Luxembourg) III senior notes due 2013: revised to 'CCC'/'RR5' from 'CCC+'/'RR5' -- Hellas Telecommunications (Luxembourg) II subordinated floating-rate notes due 2015: revised to 'CC'/'RR6' from 'CCC'/'RR6' ===================== N E T H E R L A N D S ===================== EMF-NL PRIME 2008: S&P Lowers Rating on Class D Notes to 'BB' ------------------------------------------------------------- Standard & Poor's Ratings Services lowered its credit ratings on certain notes issued by EMF-NL Prime 2008-A B.V., EMF-NL 2008-1 B.V., and EMF-NL 2008-2 B.V. At the same time, S&P affirmed its ratings on the transactions' remaining notes and removed all notes from CreditWatch negative. Lehman Brothers entities provided various interest rate and bullet cap swaps and liquidity facilities to each of these issuers. Following the downgrade of Lehman Brothers Holding Inc. (as guarantor to the swap provider, Lehman Brothers Special Financing Inc.) and Lehman Brothers Bankhaus AG, London branch (as liquidity provider) to 'D', S&P placed each rating in these transactions on CreditWatch negative. S&P placed the ratings on CreditWatch negative due to the supporting counterparty's rating not being commensurate with S&P's counterparty support criteria. On Jan. 20, 2009, Lehman Brothers Special Financing's swap obligations in these three Dutch RMBS transactions were assumed by Credit Suisse International (A+/Stable/A-1). S&P were informed of the costs associated with the replacement of the swap in each transaction and conducted an analysis to determine any impact on the ratings. This analysis determined that there was no adverse effect on the ratings as a result of the swap replacements. S&P noted in its analysis that these transactions had not yet replaced Lehman Brothers Bankhaus AG as liquidity facility provider and as such all ratings remained on CreditWatch negative. S&P believes that the liquidity provider will not be replaced in the near term and as such S&P has analyzed the transactions on the assumption that each transaction does not benefit from a liquidity facility. This analysis resulted in certain classes of notes being downgraded and the remaining classes being affirmed. S&P has removed from CreditWatch negative S&P's ratings on all classes. Ratings List Ratings Lowered and Removed from Creditwatch Negative EMF-NL Prime 2008-A B.V. EUR200 Million Mortgage-Backed Floating-Rate Notes Rating ------ Class To From ----- -- ---- A2 AA+ AAA/Watch Neg A3 AA+ AAA/Watch Neg B AA- AA/Watch Neg C A- A/Watch Neg D BB BBB/Watch Neg EMF-NL 2008-1 B.V. EUR265 Million Mortgage-Backed Floating-Rate Notes Rating ------ Class To From ----- -- ---- A2 AA+ AAA/Watch Neg A3 AA+ AAA/Watch Neg EMF-NL 2008-2 B.V. EUR285 Million Mortgage-Backed Floating-Rate Notes Rating ------ Class To From ----- -- ---- A1 AA+ AAA/Watch Neg A2 AA AAA/Watch Neg B A AA/Watch Neg C BBB A/Watch Neg D BB BBB/Watch Neg Ratings Affirmed and Removed from Creditwatch Negative EMF-NL Prime 2008-A B.V. EUR200 Million Mortgage-Backed Floating-Rate Notes Rating ------ Class To From ----- -- ---- A1 AAA AAA/Watch Neg EMF-NL 2008-1 B.V. EUR265 Million Mortgage-Backed Floating-Rate Notes Rating ------ Class To From ----- -- ---- A1 AAA AAA/Watch Neg EMF-NL 2008-2: S&P Cuts Rating on Class D Notes to 'BB' ------------------------------------------------------- Standard & Poor's Ratings Services lowered its credit ratings on certain notes issued by EMF-NL Prime 2008-A B.V., EMF-NL 2008-1 B.V., and EMF-NL 2008-2 B.V. At the same time, S&P affirmed its ratings on the transactions' remaining notes and removed all notes from CreditWatch negative. Lehman Brothers entities provided various interest rate and bullet cap swaps and liquidity facilities to each of these issuers. Following the downgrade of Lehman Brothers Holding Inc. (as guarantor to the swap provider, Lehman Brothers Special Financing Inc.) and Lehman Brothers Bankhaus AG, London branch (as liquidity provider) to 'D', S&P placed each rating in these transactions on CreditWatch negative. S&P placed the ratings on CreditWatch negative due to the supporting counterparty's rating not being commensurate with S&P's counterparty support criteria. On Jan. 20, 2009, Lehman Brothers Special Financing's swap obligations in these three Dutch RMBS transactions were assumed by Credit Suisse International (A+/Stable/A-1). S&P were informed of the costs associated with the replacement of the swap in each transaction and conducted an analysis to determine any impact on the ratings. This analysis determined that there was no adverse effect on the ratings as a result of the swap replacements. S&P noted in its analysis that these transactions had not yet replaced Lehman Brothers Bankhaus AG as liquidity facility provider and as such all ratings remained on CreditWatch negative. S&P believes that the liquidity provider will not be replaced in the near term and as such S&P has analyzed the transactions on the assumption that each transaction does not benefit from a liquidity facility. This analysis resulted in certain classes of notes being downgraded and the remaining classes being affirmed. S&P has removed from CreditWatch negative S&P's ratings on all classes. Ratings List Ratings Lowered and Removed from Creditwatch Negative EMF-NL Prime 2008-A B.V. EUR200 Million Mortgage-Backed Floating-Rate Notes Rating ------ Class To From ----- -- ---- A2 AA+ AAA/Watch Neg A3 AA+ AAA/Watch Neg B AA- AA/Watch Neg C A- A/Watch Neg D BB BBB/Watch Neg EMF-NL 2008-1 B.V. EUR265 Million Mortgage-Backed Floating-Rate Notes Rating ------ Class To From ----- -- ---- A2 AA+ AAA/Watch Neg A3 AA+ AAA/Watch Neg EMF-NL 2008-2 B.V. EUR285 Million Mortgage-Backed Floating-Rate Notes Rating ------ Class To From ----- -- ---- A1 AA+ AAA/Watch Neg A2 AA AAA/Watch Neg B A AA/Watch Neg C BBB A/Watch Neg D BB BBB/Watch Neg Ratings Affirmed and Removed from Creditwatch Negative EMF-NL Prime 2008-A B.V. EUR200 Million Mortgage-Backed Floating-Rate Notes Rating ------ Class To From ----- -- ---- A1 AAA AAA/Watch Neg EMF-NL 2008-1 B.V. EUR265 Million Mortgage-Backed Floating-Rate Notes Rating ------ Class To From ----- -- ---- A1 AAA AAA/Watch Neg KHAMSIN CREDIT: S&P Withdraws 'CCC-' Rating on Class B Notes ------------------------------------------------------------ Standard & Poor's Ratings Services withdrew its 'CCC-' credit rating on the Silver Square 2006-12 class B credit-linked notes series 13 issued by Khamsin Credit Products (Netherlands) II B.V. This rating withdrawal follows early redemption of the notes in this deal. NXP B.V.: Commences Private Debt Exchange Offers ------------------------------------------------ NXP B.V. on Tuesday, March 3, commenced two separate private offers to exchange (i) in one Exchange Offer any and all of the properly tendered and accepted existing notes that have an acceptance priority of 1 and (ii) in a separate Exchange Offer any and all of the properly tendered and accepted existing notes that have an acceptance priority of 2, in each case, for new U.S. dollar-denominated 10% super priority notes due 2013 and new euro- denominated 10% super priority notes due 2013 upon the terms and subject to the conditions set forth in the confidential offering memorandum relating to the Exchange Offers and the accompanying letter of transmittal. The New Super Priority Notes will be issued by NXP B.V. and NXP Funding LLC, a wholly owned subsidiary of the Company that has been organized as a limited liability company in Delaware as a special purpose finance subsidiary to facilitate the offerings of the New Super Priority Notes. The purpose of the Exchange Offers is to reduce the Issuers' overall indebtedness and related interest expense. The Exchange Offers will expire at 11:59 p.m., New York City time, on March 30, 2009, unless extended or earlier terminated. Eligible holders of Existing Notes that properly tender and do not validly withdraw their Existing Notes by 5:00 p.m., New York City time, on March 16, 2009, unless extended, and whose Existing Notes are accepted for exchange, will receive the applicable total consideration. Eligible holders of Existing Notes who properly tender their Existing Notes after the Early Tender Date and prior to or on the Expiration Date, and whose Existing Notes are accepted for exchange, will receive the applicable exchange consideration. In addition, on the settlement date, accrued interest up to, but not including, the settlement date, if any, will be paid in cash on all properly tendered and accepted Existing Notes. The Issuers may extend, terminate or withdraw either Exchange Offer without extending, terminating or withdrawing the other Exchange Offer. Headquartered in Eindhoven, Netherlands, NXP B.V. -- http://www.nxp.com/-- creates semiconductors, system solutions and software that deliver better sensory experiences in TVs, set-top boxes, identification applications, mobile phones, cars and a wide range of other electronic devices. The company has 31,000 employees working in more than 20 countries and posted sales of US$6.3 billion (including the Mobile & Personal business) in 2007. * * * As reported in the TCR-Europe on March 2, 2009, Standard & Poor's Ratings Services said that it had revised its recovery ratings on the senior secured notes co-issued by NXP B.V. (CCC/Negative/--) and NXP Funding LLC to '4' from '3'. A '4' recovery rating indicates Standard & Poor's expectation of average (30%-50%) recovery in the event of a payment default. The issue rating on these notes remains unchanged at 'CCC', in line with the corporate credit rating on NXP B.V. The issue ratings and recovery ratings on all other debt, including the secured revolver and unsecured notes, remain unchanged. NXP SEMICONDUCTORS: Fourth Quarter Sales Down 25.6% to US$979 Mln ----------------------------------------------------------------- NXP Semiconductors published 2008 fourth quarter results on Tuesday, March 3. NXP Semiconductors' fourth quarter sales were US$979 million, a comparable decrease of 21.9% over the third quarter of 2008 and a comparable decrease of 25.6% over the fourth quarter of 2007, reflecting difficult and deteriorating market conditions towards the end of 2008. Adjusted EBITDA in the fourth quarter was US$41 million. Adjusted EBITA showed a loss of US$84 million this quarter compared to a profit of US$148 million in the same period last year and a profit of US$15 million in the previous quarter. Considerable advances were made in the fourth quarter towards the execution of the redesign plans announced during the third quarter of 2008 on September 12. The cash position was US$1,796 million at the end of the fourth quarter, which includes US$400 million drawn down from NXP's revolving credit facility. The Q4 cash position compares with US$1,535 million at the end of Q3 2008. Outlook NXP said "Our ability to give guidance on our expected first quarter revenues is limited, due to the unusual conditions prevailing in the semiconductor industry. However based on overall consumer sentiment, recent order book development, and expected future trading levels, we now foresee a 30% to 40% sequential sales decline in the first quarter on a business and currency comparable basis. "Visibility of sales for the year ahead is even more limited. In particular, we are unable to determine when the current severe downturn in the semiconductor industry will abate. However, our current expectation is that our 2009 revenues will be lower than our 2008 revenues, and the size of this decline could be significant. A decline, combined with the large cash cost of our Redesign Program, would lead to reduced liquidity at the end of 2009." Headquartered in Eindhoven, Netherlands, NXP B.V. -- http://www.nxp.com/-- creates semiconductors, system solutions and software that deliver better sensory experiences in TVs, set-top boxes, identification applications, mobile phones, cars and a wide range of other electronic devices. The company has 31,000 employees working in more than 20 countries and posted sales of US$6.3 billion (including the Mobile & Personal business) in 2007. * * * As reported in the TCR-Europe on March 2, 2009, Standard & Poor's Ratings Services said that it had revised its recovery ratings on the senior secured notes co-issued by NXP B.V. (CCC/Negative/--) and NXP Funding LLC to '4' from '3'. A '4' recovery rating indicates Standard & Poor's expectation of average (30%-50%) recovery in the event of a payment default. The issue rating on these notes remains unchanged at 'CCC', in line with the corporate credit rating on NXP B.V. The issue ratings and recovery ratings on all other debt, including the secured revolver and unsecured notes, remain unchanged. NXP SEMICONDUCTORS: Moody's Cuts Corporate Credit Rating to 'Caa2' ------------------------------------------------------------------ Moody's Investors Service downgraded NXP Semiconductors' corporate family rating to Caa2 from Caa1 and the ratings for its senior secured notes to Caa2 from Caa1 and senior unsecured notes to C from Caa3. Simultaneously, Moody's downgraded the probability of default rating to Ca from Caa1. The rating outlook remains negative. The downgrade of the PDR to Ca reflects Moody's view that NXP's recent debt exchange offer is a distressed exchange. It also reflects the high likelihood of the transaction closing in the agency view. While no payment default has occurred and there are no debt maturities until September 2012, in Moody's opinion the successful closing of the transaction, which is designed to reduce debt and interest expense, would represent the occurrence of a deemed default. The downgrade of the Corporate Family Rating to Caa2 reflects the expected recovery rate and probability of default after the closure of the exchange offer and the new capital structure with lower debt loading, if successfully implemented. The outlook is negative in view of uncertainty regarding (i) the level of acceptance of the exchange offer and (ii) in view of the limited sales visibility for 2009. The Caa2 Rating of senior secured notes could fall below the Corporate Family Rating upon a successful completion of the exchange offer depending on the level of acceptance, because these instruments will rank behind the new super priority notes and the revolver. The C Rating of the senior unsecured notes mirrors the recovery rate of 15% / 17% as proposed by the exchange offer. Under the proposed exchange scenarios, up to EUR250 million of new super priority notes will be offered to exchange pro rata among approximately US$2 billion of senior unsecured notes, possibly followed by pro rata exchange among senior secured notes. If successful, the exchange will result in a swap of unsecured debt at a substantial discount to face value for the new super priority notes maturing in July 2013. Existing unsecured noteholders that elect to participate in the exchange transaction would accept principal reductions of 83%-85%, depending on whether the exchange offer is accepted prior to the early tender date or after the early tender date. Moody's views this transaction as a means of shrinking an unsustainable debt capital structure (NXP has roughly US$6 billion of long-term notes) and reducing interest expense by approximately US$148 million per year. The company's interest burden absent the exchange offer may become a source of significant financial stress. Combined with expectations of high restructuring cost and earnings weakness in the remaining core businesses, Moody's anticipates the company's EBITDA and operating cash flow will be meaningfully reduced in the future. Collectively, these features cause the transaction to be viewed as analogous to a partial restructuring, which is deemed to represent a default by Moody's and incorporated in the Ca PDR. During the exchange offer process, the Ca PDR will prevail. Upon closing of the exchange, the PDR will be repositioned to Caa2/LD to reflect the limited default that will have occurred. This incorporates Moody's current belief that the going-forward PDR will likely end up at the Caa2 level shortly after transaction closing. The "/LD" suffix will be removed after three business days. In the event that some debt issues are retired in their entirety upon transaction closing, the relevant ratings for the same would be withdrawn. Downgrades: Issuer: NXP B.V. -- Probability of Default Rating, Downgraded to Ca from Caa1 -- Corporate Family Rating, Downgraded to Caa2 from Caa1 -- Senior Secured Regular Bond/Debenture, Downgraded to Caa2, LGD4, 61% from Caa1, LGD3, 43% -- Senior Unsecured Regular Bond/Debenture, Downgraded to C, LGD6, 100% from Caa3, LGD5, 88% NXP's ratings were assigned by evaluating factors Moody's believe are relevant to the credit profile of the issuer, such as i) the business risk and competitive position of the company versus others within its industry, ii) the capital structure and financial risk of the company, iii) the projected performance of the company over the near to intermediate term, and iv) management's track record and tolerance for risk. These attributes were compared against other issuers both within and outside of NXP's core industry and NXP's ratings are believed to be comparable to those of other issuers of similar credit risk. The last rating action for NXP has been on November 21, 2008, when Moody's downgraded NXP's corporate family rating to Caa1 from B3, its senior secured notes to Caa1 from B3 and senior unsecured notes to Caa3 from Caa2. NXP Semiconductors, headquartered in Eindhoven, Netherlands, is a leading semiconductor company, focusing on the designs and manufacture of semiconductors for general applications, power management (Multi-Market) and application-specific integrated circuits for the home electronics, automotive and identification technology application markets. NXP posted sales of US$5.4 billion (including the Mobile & Personal business until the beginning of August 2008) in fiscal year 2008. =========== R U S S I A =========== ALAPAYEVSKIY MACHINE: Creditors Must File Claims by March 22 ------------------------------------------------------------ Creditors of LLC Alapayevskiy Machine-Building Plant (TIN 6671193030) have until March 22, 2009, to submit proofs of claims to: G. Pervukhin Temporary Insolvency Manager Belinskogo St. 34/328 Yekaterinburg Russia The Arbitration Court of Sverdlovskaya commenced bankruptcy supervision procedure. The case is docketed under Case No. A60- 40276/2008-S11. The Court is located at: The Arbitration Court of Sverdlovskaya Lenina St. 34 Yekaterinburg Russia The Debtor can be reached at: LLC Alapayevskiy Machine-Building Plant Korobkina St. 14 Alapayevsk Sverdlovskaya Russia BOOKBERRY: Seeks Bankruptcy Protection -------------------------------------- Russian bookstore chain Bookberry has filed for bankruptcy after running up debts of RUR50 million (US$1.38 million) to suppliers, Bloomberg News reports. Bookberry, owned by billionaire Oleg Deripaska's Russian-Asian Investment Co., filed for bankruptcy in Moscow's Arbitration Court, the report says citing a company spokeswoman. The chain, which has 13 stores, generated monthly revenue of as much as RUR50 million, Bloomberg News relates citing newspaper Kommersant. KRONSHTADTSKIY MORSKOY: Creditors Must File Claims by April 22 -------------------------------------------------------------- Creditors of OJSC Kronshtadtskiy Morskoy Ordena Lenina Zavod (TIN 7843305591, RVC 784301001) (Navy Yard) have until April 22, 2009, to submit proofs of claims to: P. Panasenko Insolvency Manager Petrovskaya St. 2 Kronshtadt 197762 Saint-Peterburg Russia The Arbitration Court of Saint-Peterburg commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A56�41129/2008. KUB-LES LLC: Krasnodarskiy Bankruptcy Hearing Set May 5 ------------------------------------------------------- The Arbitration Court of Krasnodarskiy will convene at 11:00 a.m. on May 5, 2009, to hear bankruptcy proceedings on LLC Kub-Les (TN 2306018143, PSRN 1022301119940) (Forestry). The case is docketed under Case No. A-32�17555/08�44/1166B. The Insolvency Manager is: O. Denisov Post user Box 90 353440 Anapa Russia The Debtor can be reached at: LLC Kub-Les Krasnoflotskaya St. 1 353691 Yeysk Russia LYALYA LES OJSC: Creditors Must File Claims by April 22 ------------------------------------------------------- Creditors of OJSC Lyalya Les (Forestry) have until April 22, 2009, to submit proofs of claims to: O. Kuznetsova Insolvency Manager Post User Box 717 620000 Yekaterinburg Russia The Arbitration Court of Sverdlovskaya commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A60-7668/2007-S11. The Debtor can be reached at: OJSC Lyalya Les Kirova St. 2 Novaya Lyalya 624400 Sverdlovskaya Russia MACHINE-BUILDNING PLANT: Creditors Must File Claims by March 22 --------------------------------------------------------------- Creditors of LLC Machine-Building Plant (TIN 2322024553) have until March 22, 2009, to submit proofs of claims to: D. Gogolenko Insolvency Manager Post User Box 3200 350911 Krasnodar Russia The Arbitration Court of Krasnodarskiy commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A32�26722/2008�14/1529B. The Debtor can be reached at: LLC Machine-Building Plant Industrialnaya St. 17 Tuapse 352800 Krasnodarskiy Russia MEZHDURECHYE LES LLC: Creditors Must File Claims by April 21 ------------------------------------------------------------ Creditors of LLC Mezhdurechye Les (TIN 3513002224, PSRN 1023501452897) (Lumbering) have until April 21, 2009, to submit proofs of claims to: D. Morozov Insolvency Manager Post User Box 31 160012 Vologda Russia The Arbitration Court of Vologodskaya commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A13�4135/2007. The Debtor can be reached at: LLC Mezhdurechye Les Naberezhnaya St. 14 Tupovets Mezhdurechenskiy Vologodskaya Russia PROEKT AKTIV: Rostovskaya Bankruptcy Hearing Set June 2 ------------------------------------------------------- The Arbitration Court of Rostovskaya will convene at 10:10 a.m. on June 2, 2009, to hear bankruptcy supervision procedure on LLC Stroy-Proekt-Aktiv (TIN 6163072394) (Construction). The case is docketed under Case No. A53�25296/2008. The Temporary Insolvency Manager is: P. Kutelev Post User Box 3392 344092 Rostov-on-Don Russia The Debtor can be reached at: LLC Stroy-Proekt-Aktiv Krasnoarmeyskaya St. 262 344000 Rostov-on-Don Russia SEVERNAYA KAZNA: Moody's Withdraws 'E' Financial Strength Rating ---------------------------------------------------------------- Moody's Investors Service has withdrawn these ratings of Bank Severnaya Kazna: bank financial strength rating of E and the bank's long-term and short-term foreign currency deposit ratings of B2/Not Prime. Concurrently, Moody's Interfax Rating Agency withdrew Severnaya Kazna's long-term national scale rating of A3.ru. Moscow-based Moody's Interfax is majority owned by Moody's, a leading global rating agency. Moody's has withdrawn these ratings for business reasons following the official request from the bank. Moody's notes that, as of the date of the ratings withdrawal, Severnaya Kazna had no senior unsecured, subordinate or structured finance obligations rated by Moody's. Severnaya Kazna's domestic rouble-denominated bonds maturing in October 2009 and August 2011 (first and second issues, respectively) were not rated by Moody's. Moody's previous rating action on Severnaya Kazna was on February 12, 2009 when the rating agency upgraded the bank's ratings to B2/ Not Prime/E/A3.ru from Caa2/Not Prime/E/B2.ru, and assigned a positive outlook on the bank's deposit ratings. This previous rating action was driven by Moody's assessment of a high probability of parental support to Severnaya Kazna from its new shareholder -- Alfa-Bank (rated Ba1/Not prime/D) now controlling 85.021% stake in Severnaya Kazna. The expectation of the rating agency that following Severnaya Kazna's rehabilitation plan Alfa- Bank assumes the final responsibility for all of Severnaya Kazna's senior unsecured obligations resulted in positive outlook on supported deposit ratings of Severnaya Kazna. Domiciled in Yekaterinburg, Russia, Severnaya Kazna reported total IFRS assets of US$1.518 billion, total shareholders' equity of US$145 million and a net income of US$18 million as at December 31, 2007. SILOVYE MACHINY CJSC: Creditors Must File Claims by March 22 ------------------------------------------------------------ Creditors of CJSC Silovye Mashiny (TIN 8620013477, PSRN 1028601866358) (Equipment Production) have until March 22, 2009, to submit proofs of claims to: A. Rodin Insolvency Manager Gagarina St. 65 628002 Khanty-Mansiysk Russia The Arbitration Court of Khanty-Mansiysk commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A75-83/2009,. The Debtor can be reached at: CJSC Silovye Mashiny Promzona NV GRES Izluchnik Nizhnevartovskiy 628634 Khanty-Mansiysk Russia URAL-STROY-FASAD LLC: Creditors Must File Claims by April 22 ------------------------------------------------------------ Creditors of LLC Ural-Stroy-Fasad (TIN 6673104808) (Construction Materials Plant) have until April 22, 2009, to submit proofs of claims to: A. Kirpishchikov Insolvency Manager Post User Box 249 620014 Yekaterinburg Russia The Arbitration Court of Sverdlovskaya commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A60-25041/08. The Debtor can be reached at: LLC Ural-Stroy-Fasad Kislorodnaya St. 8a 620041 Yekaterinburg Russia VAKH-LES LLC: Creditors Must File Claims by March 22 ---------------------------------------------------- Creditors of LLC Vakh-Les (TIN 8620003694) (Lumbering) have until March 22, 2009, to submit proofs of claims to: V. Konovalov Temporary Insolvency Manager Post User Box 7664 Central Postal Office 644099 Omsk Russia The Arbitration Court of Khanty-Mansiysk will convene at 9:00 a.m. on April 13, 2009, to hear bankruptcy supervision procedure. The case is docketed under Case No. A75�4549/2008. The Debtor can be reached at: LLC Vakh-Les Pug Yug Nizhnevartovskiy 628463 Khanty-Mansiysk Russia ========= S P A I N ========= CAIXA PENEDES: Moody's Junks Ratings on Two Classes of Notes ------------------------------------------------------------ Moody's Investors Service has downgraded the long-term credit ratings of these notes issued by Caixa Penedes PYMES 1 TdA, FTA: -- EUR726.0 million Series A notes, Downgraded to A2 from Aaa; previously, on January 27, 2009 Placed Under Review for Possible Downgrade; -- EUR44.6 million Series B notes, Downgraded to Caa1 from A3; previously, on January 27, 2009 Placed Under Review for Possible Downgrade; and -- EUR19.4 million Series C notes, Downgraded to Ca from Baa3; previously, on January 27, 2009 Placed Under Review for Possible Downgrade. Moody's initially assigned definitive ratings in June 2007. The rating action has been prompted by a higher-than-expected level of delinquencies. As of January 2009, the cumulative 90+ delinquencies (i.e. delinquencies equal or greater than 90 days) were equal to 3.98% of the original portfolio balance, compared to 2.65% as of the previous quarterly reporting date. As part of the review, Moody's has considered the exposure of the transaction to the real estate sector (either through security in the form of a mortgage or debtors operating in the real estate sector). The deterioration of the Spanish economy has been reflected in the negative sector outlook Moody's published on the Spanish SMEs securitisation transactions. As a result of the above, Moody's has revised its assumption of the default probability of the SME debtors to an equivalent rating in the single B-range for the debtors operating in the real estate sector and in the low Ba-range for the non-real-estate debtors. At the same time, Moody's estimated the remaining weighted average life of the portfolio to equal five years. As a consequence, these revised assumptions have translated into an increase of the cumulative mean default assumption for this transaction to 13% as a percentage of the current portfolio balance (corresponding to 13.86% of original portfolio balance), with a coefficient of variation of 45%. Moody's original mean default assumption was 2.9% (as a percentage of original balance), with a coefficient of variation of 68%. The recovery rate assumption is unchanged at 60%. The revised CPR assumption is 5%, compared to an original CPR assumption of 20%. In summary, the marginally increased credit enhancement available in the structure due to the amortization of the portfolio (as of December 2008, the pool factor was equal to 76%) was not sufficient to offset the impact of worse than expected performance and revised performance assumptions on the Class A, B and C Notes rating. According to Moody's revised assumptions, the reserve fund is expected to be drawn within the next interest periods. Caixa Penedes PYMES 1 TdA, FTA is a securitization fund which purchased a pool of loans granted by Caixa Penedes to Spanish SMEs. At closing, the portfolio consisted of loans granted to 5,478 debtors. The loans were originated between 1991 and 2006, with a weighted average seasoning of 2.5 years and a weighted average remaining term of 13.7 years. Geographically the pool was concentrated in Catalonia (92.39%). The concentration in the "building and real estate" sector according to Moody's industry classification was approximately 50% as of closing. As of December 2008, the number of debtors in the portfolio was equal to 4,762 and the weighted average remaining term was equal to 13.2 years. The concentration in the "building and real estate" sector was approximately 54% as of December 2008. Moody's has also considered the potentially increased commingling risk following the withdrawal of the ratings of Caixa Penedes on January 30, 2009. Moody's ratings address the expected loss posed to investors by the legal final maturity of the notes. Moody's ratings address only the credit risks associated with the transaction. Other non- credit risks have not been addressed, but may have a significant effect on yield to investors. SOL MELIA: Moody's Reviews 'Ba1' Rating for Possible Downgrade -------------------------------------------------------------- Moody's Investors Service has placed the Ba1 corporate family rating and the probability of default rating of Sol Melia under review for possible downgrade. The rating action follows the company's FY2008 results announcement on February 27, 2009. "The rating action reflects Sol Melia's higher-than-anticipated leverage at the end of FY2008, which, at close to 6 times according to Moody's preliminary calculations, is significantly above the target levels for the Ba1 rating category," explains Marika Makela, Assistant Vice President-Analyst in Moody's Corporate Finance Group. Moody's had previously stated that negative pressure on the rating could evolve if debt to EBITDA approached 5x. Furthermore, Moody's notes the uncertain outlook guidance given for the beginning of 2009 and cautions that the economic conditions may put further pressure on the company's operating performance. Therefore, given the junction of the hotel cycle and the likely further deterioration, it may take some time before credit metrics materially improve. "Moreover, while Sol Melia was compliant with its financial covenants at the end of FY2008, Moody's understands that the headroom under its interest cover and leverage covenants was limited," cautions Ms. Makela. More positively, Moody's notes that the rating continues to reflect Sol Melia's good market position and brand in Spain, asset coverage provided by its owned property assets and the company's so far conservative financial policies. Moody's rating review will focus on (i) assessing the measures that could be implemented to sustain operating performance in the current economic conditions and to improve credit metrics, (ii) to what extent such measures could mitigate the risks of a potential breach of financial covenants, and (iii) Sol Melia's overall liquidity situation. The last rating action was implemented on November 12, 2008, when Moody's downgraded the CFR to Ba1 with a negative outlook. Headquartered in Palma, Mallorca, Sol Melia is the 12th-largest hotel operator in the world in terms of number of rooms and is represented across the luxury, upscale and mid-scale segments of the hotel market. Sol Melia operates both city hotels and resorts, and has been developing its timeshare business through its Sol Melia Vacation Club brand. Sol Melia generated revenues of EUR1.3 billion at FYE2008. =========== S W E D E N =========== GENERAL MOTORS: To Pay Saab Automobile Bills to Suppliers --------------------------------------------------------- General Motors Corp. will pay the bills that its Swedish unit, Saab Automobile, owes suppliers in order to ensure production runs smoothly, Dagens Industri reported, citing GM's head of procurement, Bo Andersson. According to Bloomberg, DI said that the payments will secure the existence of about 1,100 suppliers who depend on Saab. 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. GM's common stock was considered the stock market's bellwether for many years, hence the saying "What's good for GM is good for America." 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. GENERAL MOTORS: Saab Works With Deutsche Bank, Seeks Buyers ----------------------------------------------------------- Jan Ake Jonsson, managing director of General Motors Corp.'s Saab unit, said that the company is working with Deutsche Bank as the firm plans to accelerate talks this week with possible buyers, John D. Stoll at The Wall Street Journal reports. Citing Mr. Jonsson, WSJ relates that Saab has started negotiations with potential investors and a deal could be completed by 2010. WSJ notes that GM has offered to give Saab about US$400 million and plants and machinery for its new models, saying that Saab still needs outside funding to survive. According to the report, Saab needs the Swedish government to make additional loan commitments so that it can become independent. Mr. Jonsson, according to WSJ, said that to survive the deep downturn in global auto sales, Saab needs EUR500 million from the Swedish government. Without financial help from the government, the company could run out of money, WSJ states, citing Mr. Jonsson. The report says that GM and Saab already asked the Swedish government for financial aid but were turned down. Still Mr. Jonsson is confident that Saab can attract government support due to the company's importance to Sweden's economy, according to the report. The report states that Saab and its suppliers employ about 15,000 people in Sweden. WSJ states that under Swedish law, Saab needs to be reorganized by May 20, but it can file for delays of up to a year. The report says that Saab recently sought to reorganize under court protection in Sweden. Mr. Jonsson said that Saab is committed to reaching profitability by 2011, WSJ relates. GM Rehires 30 People for Tonawanda Plant Thomas Hartley at Business First of Buffalo reports that about 30 previously laid-off hourly employees at GM's Tonawanda engine plant were called to go back to the plant on Monday. "The 30, who are some of the 465 (at GM) who were on indefinite layoff, were brought back to run a line. But because there is so much uncertainty, it looks like they'll be back for only one week," Business First says quoted United Auto Workers union assistant director Scott Adams as saying. Mr. Adams said that production schedules are quickly changing due to depressed new vehicle sales, Business First states. 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. GM's common stock was considered the stock market's bellwether for many years, hence the saying "What's good for GM is good for America." 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. ===================== S W I T Z E R L A N D ===================== CLARIANT AG: Reduced Cash Flows Cue Moody's to Cut Rating to 'Ba' ----------------------------------------------------------------- Moody's Investors Service has downgraded ratings of Clariant AG by one notch to Ba1 given its reduced cash flow expectations at the time when the company faces the need to fund additional restructuring measures necessary to improve its profitability. Moody's assigned a corporate family rating at Ba1 and withdrew the issuer rating. The outlook is stable. The Ba1 rating reflects Moody's assessment of the current profitability trends for the key segments of the company's portfolio in view of the company's stated goal of improving its margins to achieve the average return on capital reported by its chemicals peer group, as well as with reference to its cost of capital. The rating agency views positively the recently detailed restructuring measures that focus on the improvement in cash flow generation (through the renewed focus on the reduction in working capital requirements), a substantial reduction in personnel costs, as well as a further decrease in the complexity of the operations. Moody's notes, however, that the company maintains its resolve to fund such restructuring through the internally generated cash flow that, in Moody's opinion, will depend on a timely recovery in the operating performance and profitability in the second half of the year. Therefore the Ba1 provides some headroom for volatility in profitability in light of limited visibility and timing of a potential recovery. Moody's also notes that at the end of 2008, Clariant enjoyed a relatively strong balance sheet with year end leverage reported close to 3 times on a fully adjusted net debt basis. Against the backdrop of the slowing economy in 2009, Moody's expects some weakening in the leverage metrics to reflect deterioration in trading activity and cash flow generation that affected the company's 2008 results only to a limited extend, as well as potential need to cover additional restructuring costs. The stable outlook on the Ba1 ratings reflects headroom at this level to accommodate some weakening in the operating performance over the medium term, as well as its potential impact on the availability of liquidity looking forward. Clariant's liquidity position is supported by CHF270 million in unrestricted cash balances at the end of 2008 as well as CHF750 million WC facility (that has one financial covenant). In 2008, the company has refinanced its maturities and has limited refinancing needs until 2011. The Ba1 / LGD4 (50) ratings on the company's 2012 and 2013 notes remain at the level of the corporate family rating, while Moody's notes that Clariant maintains some CHF268 million in senior unsecured loans raised by its subsidiaries to fund local operations. Moody's last rating action on Clariant was on January 30, 2009 when the rating agency placed the ratings of the company under review for possible downgrade. Headquartered in Muttenz, Switzerland, Clariant AG is a leading international specialty chemicals group. In the fiscal year ended in December 2008, Clariant reported net revenues of CHF8.1 billion. ============= U K R A I N E ============= AGROTON LLC: Creditors Must File Claims by March 18 --------------------------------------------------- Creditors of LLC Trading House Agroton (EDRPOU 35689869) have until March 18, 2009, to submit proofs of claim to: Office 1 Baseynaya St. 13 Kiev Ukraine The Economic Court of Kiev commenced bankruptcy proceedings against the company after finding it insolvent. The Court is located at: The Economic Court of Kiev B. Hmelnitskiy St. 44-b 01030 Kiev Ukraine AZOVSTAL JSC: S&P Withdraws 'CCC+' Foreign Currency Credit Rating ----------------------------------------------------------------- Standard & Poor's Ratings Services said that it had withdrawn its 'CCC+' long-term foreign currency corporate credit rating and 'B-' long-term local currency credit rating on Ukrainian steel producer JSC Azovstal Iron and Steel Works at the company's request. The 'CCC' issue rating on the US$175 million loan participation notes due 2011 issued by Azovstal Capital B.V. and the '5' recovery rating are also withdrawn. "Azovstal is no longer subject to ratings surveillance by Standard & Poor's," said Standard & Poor's credit analyst Andrey Nikolaev. BELOGORYE PETROLEUM: Creditors Must File Claims by March 15 ----------------------------------------------------------- Creditors of LLC Belogorye Petroleum Product (EDRPOU 21755754) have until March 15, 2009, to submit proofs of claim to: LLC Trading House Continium-Galichina Insolvency Manager Kremenetskaya St. 38 Lutsk 43010 Volin Ukraine The Economic Court of Volin commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. 7/175-b. The Court is located at: The Economic Court of Volin Volia Avenue 54 Lutsk Volin Ukraine The Debtor can be reached at: LLC Belogorye Petroleum Product Koniakin St. 37/43 Lutsk 43000 Volin Ukraine DOVIRA AGRICULTURAL: Court Starts Bankruptcy Procedure ------------------------------------------------------ The Economic Court of Vinnitsa commenced bankruptcy supervision procedure on Agricultural LLC Dovira (EDRPOU 20101499). The Temporary Insolvency Manager is: S. Malakhov Keletskaya St. 126/137 34560 Vinnitsa Ukraine The Court is located at: The Economic Court of Vinnitsa Hmelnitsky highway 7 21036 Vinnitsa Ukraine The Debtor can be reached at: Agricultural LLC Dovira Nizhniaya Kropivnia Nemirov 22881 Vinnitsa Ukraine FOOD CONTRACT: Creditors Must File Claims by March 15 ---------------------------------------------------- Creditors of LLC Food Contract (EDRPOU 30274960) have until March 15, 2009, to submit proofs of claim to: N. Sledzenaya Insolvency Manager Novovoznesenskaya St. 103 79056 Lvov Ukraine The Economic Court of Lvov commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. 33/251. The Court is located at: The Economic Court of Lvov Lichakovskaya St. 128 79014 Lvov Ukraine The Debtor can be reached at: LLC Food Contract Office 88 Lisinitskaya St. 13 79032 Lvov Ukraine KOLOS LLC: Court Starts Bankruptcy Supervision Procedure -------------------------------------------------------- The Economic Court of Hmelnitsky commenced bankruptcy supervision procedure on LLC Kolos (EDRPOU 21312850). The Temporary Insolvency Manager is: A. Chernetskaya Office 111 Sobornaya St. 57 Hmelnitsky Ukraine The Court is located at: The Economic Court of Hmelnitsky Independency square 1 29000 Hmelnitsky Ukraine The Debtor can be reached at: LLC Kolos Stavische Dunayevetsky 32431 Hmelnitsky Ukraine NAFTOGAZ OJSC: Fitch Puts 'B-' Issuer Ratings on Negative Watch --------------------------------------------------------------- Fitch Ratings has placed OJSC Naftogaz of Ukraine's Long-term local and foreign currency Issuer Default Ratings of 'B -' (B minus) on Rating Watch Negative. The RWN reflects Fitch's near-term concerns regarding a combination of factors: an inadequate level of state subsidies for Naftogaz, accumulating payment arrears from communal heating enterprises, a decline in the industrial supply segment, the availability of foreign exchange to pay future dollar maturities, and uncertainty over the outcome of current IMF negotiations with Ukraine ('B'/Negative). If these factors are not addressed in the coming months, the company's ability to meet sizeable debt maturities in H209 may be jeopardized. The RWN does not reflect concerns about Naftogaz's ability to pay imminent maturities (Eurobond noteholders on 3 March and Gazprom on 7 March). The senior unsecured rating of 'B' on the company's US$500 million Eurobond maturing in September 2009 has also been placed on RWN. The bond's Recovery Rating is 'RR4'. Fitch is currently reviewing the strength of the Ukrainian government guarantee for Naftogaz's foreign-held debt, which has so far resulted in an alignment of the senior unsecured rating with that of the sovereign. The impact of ongoing domestic economic volatility and the outcome of current IMF negotiations may affect Fitch's prospective determination of both the government's capacity and willingness to stand behind the guarantee. Recovery Ratings in certain emerging markets such as Ukraine are currently capped by Fitch at 'RR4' due to factors such as uncertainties surrounding these countries' legal regimes being supportive of creditor rights. 'RR4' reflects an expectation by Fitch of average recovery (31%-50%) in the event of default. SHLIAKHOVIK LLC: Creditors Must File Claims by March 15 ------------------------------------------------------- Creditors of LLC Shliakhovik (EDRPOU 32076437) have until March 15, 2009, to submit proofs of claim to: A. Mikitiuk Insolvency Manager Schors St. 7 Kamen Rozhniatovsky 77600 Ivano-Frankovsk Ukraine The Economic Court of Ivano-Frankovsk commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. B-21/47. The Court is located at: The Economic Court of Ivano-Frankovsk Shevchenko St. 16 76000 Ivano-Frankovsk Ukraine The Debtor can be reached at: LLC Shliakhovik Shevchenko St. 99 Bogorodchany 77701 Ivano-Frankovsk Ukraine SITKOVTSY LLC: Court Starts Bankruptcy Supervision Procedure ------------------------------------------------------------ The Economic Court of Vinnitsa commenced bankruptcy supervision procedure on LLC Sitkovtsy (EDRPOU 33845116). The Temporary Insolvency Manager is: S. Malakhov Keletskaya St. 126/137 34560 Vinnitsa Ukraine The Court is located at: The Economic Court of Vinnitsa Hmelnitsky highway 7 21036 Vinnitsa Ukraine The Debtor can be reached at: LLC Sitkovtsy Mandrolko St. 19 Sitkovtsy Nemirov Vinnitsa Ukraine SKADOVSK MOTORCAR: Creditors Must File Claims by March 18 --------------------------------------------------------- Creditors of OJSC Skadovsk Motorcar Enterprise-16544 (EDRPOU 03119109) have until March 18, 2009, to submit proofs of claim to: O. Tsirkunov Insolvency Manager Office 4 Gogol St. 11 73000 Herson The Economic Court of Herson commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. 5/146-B-07. The Court is located at: The Economic Court of Herson Gorky St. 18 73000 Herson Ukraine The Debtor can be reached at: OJSC Skadovsk Motorcar Enterprise-16544 Kirov St. 80 Skadovsk Herson Ukraine WORLD IMPEKS: Court Starts Bankruptcy Supervision Procedure ----------------------------------------------------------- The Economic Court of Herson commenced bankruptcy supervision procedure on LLC World Impeks (EDRPOU 32368243). The Temporary Insolvency Manager is: I. Belousov Office 7 Voyenny proyezd 6 73000 Herson Ukraine The Court is located at: The Economic Court of Herson Gorky St. 18 73000 Herson Ukraine The Debtor can be reached at: LLC World Impeks Chapayev St. 121 Skadovsk 75700 Herson Ukraine =========================== U N I T E D K I N G D O M =========================== ACTIVE SIGNS: Enters Into Administration; 70 Jobs Affected ---------------------------------------------------------- Active Signs Limited, the Kent based sign design, manufacture and installation company, entered into administration on February 26, 2009 with the appointment of joint administrators, Mark Newman and Vince Green, directors at Vantis Business Recovery Services (BRS), a division of Vantis, the UK accounting, tax and business advisory group. Limited trading continues, although 70 redundancies have regrettably been made. Commenting on the administration, Mark Newman said: "The business was sadly forced into administration due primarily to a lack of working capital. We are working closely with the management team to assess the opportunities to rescue all parts of the business." CASTLEMORE SECURITIES: Taps Joint Administrators from PwC --------------------------------------------------------- Mark Batten and Matthew Hammond of PricewaterhouseCoopers LLP were appointed joint administrators of Castlemore Securities Limited, Castlemore (Temple Quay 4) Limited, Britten Investments Limited, Spring Residential Limited, Spring (Sutton Coldfield) Limited on February 27, 2009. Mark Batten and Matthew Hammond were also appointed joint administrators of Castlemore (West Bar) Limited, Castlemore (Temple Quay 6) Limited, Castlemore (Temple Quay 2) Limited, Castlemore (Temple Quay 9) Limited and Castlemore (Temple Quay 8) Limited on March 2, 2009. Castlemore Securities is a property investment and development company with interests across the UK. Mark Batten, partner at PricewaterhouseCoopers LLP and joint administrator, said: "Castlemore Securities is a business with significant property assets and it is currently our intention to continue to trade parts of the business as we seek a buyer. T he administration is a result of the well-documented challenges facing the property market which has lead to the company suffering cash flow difficulties." "We are assessing each of the developments over which we are appointed to achieve the best result for creditors in light of the current trading and market conditions." BARWOOD DEVELOPMENTS: Appoints Administrators from Ernst & Young ---------------------------------------------------------------- Ian Best and Diana Frangou of Ernst & Young LLP were appointed joint administrators of Barwood Developments (Leeds) Ltd. on Feb. 20, 2009. The company can be reached through Ernst & Young LLP at: No. 1 Colmore Square Birmingham B4 6HQ England BTL HOLDINGS: Brings in Joint Administrators from Baker Tilly ------------------------------------------------------------ Mark Wilson and Matthew Richard Meadley Wild of Baker Tilly Restructuring and Recovery LLP were appointed joint administrators of BTL Holdings Ltd. on Feb. 20, 2009. The company can be reached at: BTL Holdings Ltd. 77 Cornhill London London EC3V 3QQ England CATTLES PLC: Suspends Three Executives; Uncovers Acct'ng. Problems ------------------------------------------------------------------ BBC News reports Cattles plc is suspending three senior managers after it found out that there has been a failure of international controls at the company. The company, as cited by BBC, said it had uncovered problems in the ways it accounts for bad loans. BBC relates the company said it had suspended managing director John Blake, a finance director, Peter Miller, and operations director Mick Belcher. Bad Loans Review On Feb. 26, 2009, citing The Daily Telegraph's Jonathan Sibun, the Troubled Company Reporter-Europe reported that Cattles called in accountancy firm Deloitte to help management review its provisions against bad loans. It suspended lending to new customers in Welcome Finance on Feb. 23 in order to preserve cash. The report recalled Cattles on Feb. 20 issued a profit warning, sending its shares down 74pc to 3-1/2p. The company, the report disclosed, admitted it does not know how many bad loans it has on its books. The company also delayed releasing its full-year results, previously scheduled on Feb. 26, the report added. It is understood that Cattles' auditor, PricewaterhouseCoopers, wanted greater clarity on the extent of impairments before the results were published. According to the report, the review is likely to take a few weeks, with the full-year results published afterwards. However, BBC notes finance director James Corr, who had postponed his retirement to oversee the review, could not fulfill his duties because of ill health. About Cattles plc Cattles plc -- http://www.cattles.co.uk/-- provides financial services to consumers and businesses. The company has three principal businesses, these being Welcome Financial Services, The Lewis Group and Cattles Invoice Finance. * * * As reported in the TCR-Europe Feb. 24, 2009, Fitch Ratings downgraded Cattles PLC's Long-term Issuer Default Rating to 'B' from 'B+' and downgraded its senior unsecured debt to 'B' from 'BB-' (BB minus). Both ratings remain on Rating Watch Negative. The downgrades follow Cattles' announcement that it has delayed the publication of its 2008 financial results, pending a review of the adequacy of its impairment charges. This development is a concern and could weaken the company's position at a time when it is engaged in refinancing discussions with various banks relating to a GBP500 million syndicated loan that matures in July 2009 and a GBP135 million bilateral bank line due in December. CATTLES PLC: Fitch Retains 'B' Issuer Default Ratings ----------------------------------------------------- Fitch Ratings says that the Issuer Default Ratings and senior debt of Cattles plc remain rated at 'B', respectively, and on Rating Watch Negative. Cattles senior unsecured bonds have Recovery Ratings of 'RR4' Cattles announced that its Board believes there was a breakdown in internal controls which has resulted in the group's impairment policies being applied incorrectly. The group anticipates being required to enter discussions with its banks and bondholders and noteholders. The announcement means the likelihood of a downgrade, potentially of more than one notch, has materially increased. Fitch expects to be better placed to resolve the RWN once the scale of the additional impairment provisioning, the extent of the breakdown of internal controls and the scope of the discussions Cattles faces with its creditors become clearer. This is likely to be within the coming weeks. Discussions with creditors could be complex. Potential outcomes range from creditors amending covenants to more substantial debt restructuring. Under Fitch's criteria, the proposal of some form of exchange offer or other material reduction in terms would be likely to result in a downgrade of Cattles' Long-term IDR to 'C'. Actual distressed debt exchanges are considered defaults. Cattles is listed in London. Its main business is the provision of loan products, collected via direct debit, to individuals who find it difficult to obtain mainstream bank credit. CITY INDEX: In Breach of Covenants Despite GBP70MM Cash Injection ----------------------------------------------------------------- Richard Fletcher at The Daily Telegraph reports that Michael Spencer, the Conservative party treasurer, has been forced to inject GBP70 million of his personal fortune into City Index after traders defaulted on tens of millions of pounds worth of trades. Citing accounts filed at Companies House late last week, the report relates clients of the spread betting business, owned by Mr. Spencer's private vehicle IPGL Limited, were unable to cover GBP43 million of losses after share prices collapsed. Losses The report recalls City Index lost a further GBP7.2 million in the year to March 31, 2008 after US-based Sentinel Management Group collapsed into Chapter 11 bankruptcy in August 2007. City Index, the report discloses, deposited GBP28 million with Sentinel. The report notes that although City Index has recovered some of the money, GBP7.2 million remains outstanding, according to the accounts. City Index, the report states, made a GBP30 million loss in the year to March 31, compared with a GBP1 million profit the year before, while trading and commission income rose to GBP78 million, up from GBP50 million. Cash Injection IPGL, Mr. Spencer's investment vehicle, injected GBP30.2 million of cash into City Index during the period, the report recounts. Since the year end IPGL has also provided the business with two subordinated loans totaling GBP40 million, the report adds. However, the report says that despite the GBP70 million injection City Index is in breach of its banking covenants, according to the accounts. Martin Belsham, who was appointed chief executive of City Index by Mr. Spencer in January, as cited by the report, said "Negotiations with the banks are continuing." "It will be concluded. We are down to the fine print," the report quoted Mr. Belsham as saying. CITY RETREATS: Administrators Seek Buyer for Ellington Hotel ------------------------------------------------------------ Emma Eversham at bighospitality.co.uk reports that MCR, administrators of City Retreats Management, is seeking a buyer for the company's 35-bedroom hotel The Ellington. City Retreats Management, the report relates, went into administration on Feb. 23, and City Retreats Commercial, the operator of the Leeds based Floridita Nightclub, was also placed into administration on the same day. David Whitehouse and Steven Muncaster of MCR were appointed joint administrators. MCR, as cited by the report, said the hotel would remain open while the administrators sought a buyer. Pantin Hotels will continue to manage the hotel throughout the process, the report notes. CONTACT IT SERVICES: Taps Joint Administrators from Baker Tilly --------------------------------------------------------------- Mark Wilson and Matthew Richard Meadley Wild of Baker Tilly Restructuring and Recovery LLP were appointed joint administrators of Contact It Services Ltd. on Feb. 20, 2009. The company can be reached at: Contact It Services Ltd. 77 Cornhill London London EC3V 3QQ England CONTACT RECRUITMENT: Appoints Administrators from Baker Tilly ------------------------------------------------------------- Mark Wilson and Matthew Richard Meadley Wild of Baker Tilly Restructuring and Recovery LLP were appointed joint administrators of Contact Recruitment Ltd. on Feb. 20, 2009. The company can be reached at: Contact Recruitment Ltd. 77 Cornhill London London EC3V 3QQ England EUROSAIL 2006-1: S&P Junks Ratings on Three Classes of Notes ------------------------------------------------------------ Standard & Poor's Ratings Services lowered and removed from CreditWatch negative its credit ratings on the class A2c, B1a, B1c, C1a, and C1c notes issued by Eurosail 2006-1 PLC. S&P has also lowered the ratings on the class D1a, D1c, and E notes. The rating actions are due to two factors: -- The effect of a failure to replace a liquidity facility, previously provided by the London Branch of Lehman Brothers Bankhaus A.G., as required by the transaction documentation. S&P lowered the provider's rating to 'D' following Lehman Brothers Holdings Inc.'s filing for Chapter 11 bankruptcy protection on Sept. 15, 2008; and -- Deteriorating collateral performance and S&P's expectation of increasing losses. On Sept. 17, 2008, S&P placed all the notes in this deal on CreditWatch negative, following the lowering to 'D' of the rating on Lehman Brothers Holdings. The ratings on the class D1a, D1c, and E notes were subsequently lowered and removed from CreditWatch negative on Dec. 12, 2008, due to underlying transaction performance. S&P's analysis at that time assumed that the liquidity facility would be replaced in the near term. S&P now believes that the prospects of replacing the liquidity facility are remote. Without the availability of a liquidity facility, the class A2c, B1a, B1c, C1a, and C1c notes no longer withstand S&P's respective rating stresses at their current levels. Therefore, S&P has lowered the ratings to the level at which they pass. The downgrades on the class D1a, D1c, and E notes are due mainly to the deal's further deterioration in performance and falling U.K. house prices leading to assumptions of significantly increased losses and loss severities. On the December 2008 interest payment date, the transaction drew GBP530,191 from its reserve fund (14.4% of the fund's quarter opening balance). This draw was mainly due to increased losses of GBP1,934,048 in the quarter, compared with GBP1,023,065 on the September 2008 IPD. As of December 2008, repossessions increased to 7.2% of the outstanding principal balance from 5.4% in September 2008. With U.K. house prices continuing to fall and depressed sale prices of repossessions, S&P expects to see further losses and reserve fund draws in the coming quarters. Ratings List Eurosail 2006-1 PLC GBP462.978 Million, EUR60.7 Million, and US$437.5 Million (Plus an Overissuance of GBP11.025 Million) Mortgage-Backed Floating-Rate Notes Class Rating ----- ------ To From -- ---- Ratings Lowered and Removed from CreditWatch Negative A2c AA AAA/Watch Neg B1a BBB AA/Watch Neg B1c BBB AA/Watch Neg C1a BB A/Watch Neg C1c BB A/Watch Neg Ratings Lowered D1a CCC BB D1c CCC BB E CCC B GKN HOLDINGS: Fitch Cuts Long-Term Issuer Default Rating to 'BB+' ----------------------------------------------------------------- Fitch Ratings has downgraded UK-based GKN Holdings plc.'s Long- term Issuer Default Rating and senior unsecured ratings to 'BB+' from 'BBB-' (BBB minus). The downgrade reflects the deterioration of the group's financial profile in 2008 and Fitch's expectations that it will continue to worsen materially in 2009, to levels not commensurate with an investment grade rating. The Outlook on the Long-term IDR is Negative. The agency has simultaneously downgraded GKN's Short-term IDR 'B' from 'F3'. The group's trading profit margin before restructuring, impairment and other non-operating charges dropped to 4.6% in FY08 compared to 7.2% in FY07, affected by the sharp decline in vehicle production in H208, which was not offset by the solid performance of the group's non-automotive business. H208 trading profit fell to GBP55 million from GBP146 million in H108, which translates into a margin of 2.6% and 6.4%, respectively. In addition, GKN posted negative free cash flow (according to Fitch's definition) of GBP46 million at FYE08. As a result, the group's lease adjusted net leverage rose considerably to an estimated 2.4x at FYE08 from 1.7x at FYE07. Fitch expects a further material increase in the group's leverage against the ongoing backdrop of a negative outlook for global automotive markets, and also a weakening demand for the group's off-highway and aerospace activities. Fitch recognizes GKN's launch of a significant restructuring and cost cutting plan to be completed by July 2010, which is expected to reduce full year operating costs by approximately GBP190 million. The group expects that the measures involve GBP140 million cash costs and GBP150 million of non-cash asset impairments. Fitch believes that GKN's track record in restructuring its automotive operations by switching capacity from high-cost and low-growth economies towards emerging markets will help to align operations more closely with lower demand. Together with reduced capex spending, and the suspension of dividends, Fitch believes this should allow GKN to better cope with tougher market conditions. However, Fitch also cautions that the heightened risk of a severe and protracted global recession could jeopardize the group's restructuring and cost cutting plan for materially improving free cash flow and therefore further weaken GKN's financial profile. The global economic downturn is likely to affect the group's so far well-performing civil aerospace and off-highway operations. These factors are reflected in the Negative Outlook. Pressure on the ratings will substantially increase if the group continues to generate negative free cash flow and/or posts an increase of lease adjusted net leverage to levels exceeding 3x with low visibility of a sustained reduction. Fitch believes GKN's financial flexibility is adequate. In addition to cash and cash equivalents of GBP114 million at FYE08, the group stated that it had financial headroom from committed undrawn bank facilities of GBP402 million. It has also procured new revolving credit facilities of GBP180 million related to the acquisition of the Filton wing component and sub-assembly manufacturing facility from European Aeronautic Defence and Space Company N.V. (EADS, 'BBB+'/Stable/'F2')/Airbus SAS for GBP136 million. Fitch notes that the group's net debt markedly increased to GBP708 million at FYE08 from GBP506 million, impacted by the settlement of balance sheet hedges with a net cost of GBP221 million. At FYE08, only 12% (GBP97 million) of total debt was short-term. Apart from a GBP350 million revolving borrowing facility, which expires in July 2010 the group has no significant maturities before 2012, when a GBP325 million bond becomes due. Fitch also notes that the group's reported deficit of its funded post-employment obligations materially increased to GBP435 million at FYE08 from GBP33 million at FY07. The agency will continue to closely monitor any material funding requirements, which could further weaken the group's financial profile. The ratings continue to be supported by GKN's strong market position, particularly in driveline technology products including constant velocity joints and torque management devices. The group's end-market diversification into the aerospace and off- highway sectors also help to somewhat mitigate the significant challenges facing the automotive industry. GREEN PARK: Calls in Joint Administrators from Tenon Recovery ------------------------------------------------------------- Steven Philip Ross and Robert Christopher Keyes of Tenon Recovery were appointed joint administrators of Green Park Ventures Ltd. on Feb. 11, 2009. The company can be reached through Tenon Recovery at: Tenon House Ferryboat Lane Sunderland Tyne & Wear SR5 3JN England HSBC HOLDINGS: May Use Part of Fund Raising for Asian Buyout ------------------------------------------------------------ Bloomberg News reports HSBC Holdings Plc may use part of the GBP12.5 billion (US$17.7 billion) it is raising in a rights offering to fund acquisitions in Asia and other emerging markets. The bank will pursue "opportunities" for growth, including takeovers, the news agency cited Chairman Stephen Green as saying during a press conference in London on Monday. "They are more likely to be bolt-on or incremental acquisitions" in emerging markets, Mr. Green said. According to the report, HSBC may be interested in Royal Bank of Scotland Group Plc's assets in Asia. RBS plans to abandon or sell retail and commercial banking operations in 13 Asian countries, including the Philippines and Vietnam, the report says. "Organically, we can grow as our competitors withdraw, we can put our capacity to work so that means you don't have to be quick to buy something to do that," Sandy Flockhart, HSBC's chief executive officer for Asia-Pacific, told Bloomberg News in an interview in Hong Kong. The company is still open to making purchases in markets such as China and South Korea, Mr. Flockhart said as cited by the report. New Capital As reported in the Troubled Company Reporter-Europe on March 3, 2009, The New York Times said HSBC was seeking to raise GBP12.5 billion, or about US$18 billion, in a rights issue of shares. According to The Times, HSBC is offering investors five new shares at 254 pence, or US$2.08 each, for every 12 they own already, marking a substantial discount to the 491 pence at which the shares closed Friday last week. The move comes after HSBC said its 2008 net income fell to US$5.73 billion from US$19.1 billion the previous year, prompting the bank to cut its 2008 dividend by 29 percent to 64 cents a share and halt 2008 bonuses for its executive directors. Goldman Sachs Group Inc. and JPMorgan Chase & Co. are leading a group of banks that have underwritten the share sale, guaranteeing they will buy any shares investors may not order, according to Bloomberg News. Bloomberg News said HSBC reported a pretax loss of US$15.5 billion from North American operations, compared with a profit of US$91 million in 2007. In Europe, the news agency said HSBC's pretax profit rose to US$10.9 billion from US$8.6 billion. Profit from Hong Kong fell to US$5.46 billion from US$7.34 billion, while earnings from the rest of Asia rose to US$6.47 billion from US$6.01 billion, Bloomberg News said. In 2003, The Times and Bloomberg News recalled, the bank became the first European lender to post subprime losses after it paid US$15.5 billion for U.S.-based Household International, now named HSBC Finance, and has since had to inject billions of dollars into the unit to keep it afloat after the subprime market soured. Bloomberg News and The Times related HSBC said it would shut down the U.S. unit's HFC and Beneficial arms in five to seven years and cut 6,100 jobs. HSBC's U.S. retail bank and credit card businesses won't be affected by the shut down and job cut. "Worsening Capital Shortfall" As reported in the Troubled Company Reporter-Europe on Jan. 21, 2009, shareholder Knight Vinke Asset Management LLC said HSBC has a substantial and worsening capital shortfall. Knight Vinke noted recent research reports issued by Morgan Stanley and Goldman Sachs regarding HSBC's need for a very substantial rights' issue, which "could be the largest rights' issue ever made in the United Kingdom." Bloomberg News said Goldman Sachs Group Inc. and CLSA Asia-Pacific Markets earlier predicted HSBC will be forced to sell shares for the first time since the financial crisis began in 2007. According to Bloomberg News, Goldman analysts said Jan. 16 HSBC may post a US$1.5 billion loss, raise US$17 billion in a share issue, and pay no dividend in 2009, citing a deteriorating U.S. economy and falling property prices. As it predicted in early 2007, Knight Vinke said Household International, HSBC's sub-prime lending business in the United States, has turned out to be an unmitigated disaster. "This is a depreciating business, the fair value of whose assets is US$20 billion less than its liabilities (by HSBC's own admission)," the long term HSBC shareholder said in a January 18 statement. Eric Knight, CEO of Knight Vinke, pointed out that if Household is not restructured, shareholders will bear all of the pain because Household's debt is not guaranteed by HSBC. "HSBC should stop pretending that a restructuring of Household is inconceivable: all major banks with similar problems are now thinking what was previously unthinkable," Mr. Knight said. Knight Vinke also noted that HSBC's capital structure is much weaker than would be suggested by the Tier 1 ratio, adding that having a strong Tier 1 ratio is absolutely no guarantee that additional capital will not be required. HSBC Denies Need for Gov't Funding The London-based lender refuted Knight Vinke's projection saying it is one of the world's most strongly capitalized banks. The bank is one of the world's most "strongly capitalized" lenders and hasn't sought capital support from the U.K. government, HSBC said in a statement obtained by Bloomberg News. The bank "cannot envisage circumstances" where it would need government funding, HSBC added. Madoff Exposure On December 15, 2008, HSBC confirmed it provided financing to a small number of institutional clients who invested in funds with Madoff Investment Securities LLC. HSBC said its potential exposure under these financing transactions is in the region of US$1 billion. HSBC also has custody clients who have invested with Madoff, however, it does not believe that these custodial arrangements should be a source of exposure to the group. Likely Fitch Downgrade Fitch Ratings, according to Bloomberg News, warned it may cut HSBC's credit rating as the global recession undermines its finances. Bloomberg News discloses Fitch cut its outlook on HSBC's debt to "negative" from "stable" and said the bank's long-term issuer default rating may be lowered over the "medium term". HSBC's profitability in the fourth quarter was probably "weak" and the bank is increasingly likely to need to raise funds to support the U.S. unit, Bloomberg News cited Fitch as saying. About HSBC Headquartered in London, England, HSBC Holdings plc (NYSE:HBC) -- http://www.hsbc.com/-- is a banking and financial services organization. Its international network comprises over 10,000 properties in 83 countries and territories in Europe; Hong Kong; rest of Asia-Pacific, including the Middle East and Africa; North America and Latin America. HSBC Holdings together with its subsidiaries (HSBC) provides a range of financial services to more than 128 million customers. HSBC manages its business through two customer Groups: Personal Financial Services and Commercial Banking, and two global businesses: Global Banking and Markets, and Private Banking. Personal Financial Services incorporates the Company's consumer finance businesses. The largest of these is HSBC Finance Corporation (HSBC Finance), a consumer finance company in the United States. On March 26, 2007, the company acquired the remaining 50.01% of Erisa S.A. and Erisa I.A.R.D. In September 2008, Lehman Brothers sold its entire 2.09% stake in Amtek Auto Ltd. to HSBC Holdings PLC. LIGHTZONE LTD: Taps Joint Administrators from PKF ------------------------------------------------- Stephen Paul Holgate and Philip L Armstrong of PKF (UK) LLP were appointed joint administrators of Lightzone Ltd. on Feb. 20, 2009. The company can be reached at: Lightzone Ltd. 52 High Street Pinner Middlesex HA5 5PW England LINPAC PACKAGING: In Talks with Lenders Over Debt Restructuring --------------------------------------------------------------- Ben Harrington at The Daily Telegraph reports that packaging group Linpac is in talks with lenders over a possible financial restructuring. According to the report, private equity firm Montagu, which bought Linpac in June 2003 for GBP860 million, is understood to have called in US-based restructuring firm Houlihan to help the company draw up a new debt deal with its lenders. The report discloses PricewaterhouseCoopers is working on an independent business review, while KPMG has been appointed to work on a contingency plan. Montagu, the report recalls, approached lenders late last year seeking a covenant waiver as it emerged Linpac could breach its banking covenants in 2009 after being hit by the decline in sterling and volatile raw materials prices. The financial restructuring, the report notes, could be completed within months, although it is unclear whether existing shareholders, which include some of the management and other employees, will see their investment diluted. Headquartered in Birmingham, LINPAC Group �- http://www.linpac.com/�- is a GBP1.1 billion group with 9,000 employees at 90 locations worldwide. It makes a variety of plastic and paper products, including food containers, disposable tableware, plastic car trim, plastic crates, and printed containers for manufacturers of foods, beverages, and household products. OMAR HOMES: Goes Into Administration; 160 Jobs Affected ------------------------------------------------------- Thetford and Brandon Times reports that Omar Homes has gone into administration, resulting in the loss of 160 jobs. The report relates the company, which generates an annual turnover of about GBP45 million, filed for administration in the high court in London on Monday just weeks after it announced that it was seeking a major investor due to seeing a "contraction" in the market. Tenon Recovery has been appointed administrator, the report discloses. According to the report, a spokesman for Tenon said there had been a number of serious inquiries from companies interested in taking over the business. PCS LTD: Goes Into Voluntary Liquidation ---------------------------------------- Torquay-based catering services company PCS (Torbay) Ltd has gone into voluntary liquidation following a significant fall in turnover in the final months of 2008. Ian Walker and Gilbert Lemon at the Exeter office of insolvency and business recovery specialists Begbies Traynor have been appointed as joint Liquidators. PCS was founded in 1992 and supplied cleaning and catering products to the catering trade in the Torbay area. The business expanded rapidly and eventually supplied its services to catering establishments in Devon, Cornwall and Dorset. By 2007 its turnover had grown to over GBP1.5 million, in spite of a loss of business in north Devon during that time. Unfortunately, the catastrophic downturn experienced regionally in the leisure industry in November and December 2008 resulted in a drop of over 50% of PCS's turnover compared with the same period in 2007. Many of its customers were themselves becoming insolvent, and poor internal administration systems had failed to give Directors the accurate and up to date financial information they would have needed to be able to react speedily to the change in circumstances. Liquidator Ian Walker commented, "It is a great shame that the recession has contributed to yet another failure of what was a thriving business. However, there are lessons to be learned by every business from the PCS experience. It is crucial that Directors have rigorous and accurate accounting systems which enable them to tell, on a daily basis if necessary, exactly what the current financial state of their business is, in order to take pre-emptive or remedial action in time to avert disaster." Fourteen jobs will be lost as a result of the Liquidation. QED TECHNOLOGY: Appoints Administrators from Tenon Recovery ----------------------------------------------------------- T. J. Binyon and S. J. Parker of Tenon Recovery were appointed joint administrators of QED Technology Ltd. on Feb. 19, 2009. The company can be reached through Tenon Recovery at: Sherlock House 73 Baker Street London W1U 6RD England ROYAL BANK: Sells US$4.2 Bln Gov't Guaranteed Floating-Rate Notes ----------------------------------------------------------------- The Royal Bank of Scotland Group Plc sold GBP3 billion (US$4.2 billion) of floating-rate notes guaranteed by the U.K., Bloomberg News reports citing a person familiar with the deal. Bloomberg News relates the person, who declined to be identified because the deal isn't complete, said the 18-month notes were priced to pay interest of 35 basis points more than the London interbank offered rate, or Libor. RBS spokeswoman Linda Harper declined to comment on the sale of the notes, Bloomberg News says. China Asset Sale Reuters reports that RBS said on Wednesday it was considering selling most of its banking businesses in China to raise cash. According to Reuters, RBS plans to sell ABN AMRO Holding N.V. China's retail and commercial banking businesses, but will keep ABN AMRO's global operations. RBS bought ABN AMRO in October 2007 through a consortium with Fortis N.V., Fortis SA/NV and Banco Santander S.A. RBS has hired Morgan Stanley to explore the potential Asian asset sale, people with direct knowledge of the matter told Reuters last month. About RBS The Royal Bank of Scotland Group plc (NYSE:RBS) -- http://www.rbs.com/-- is a holding company of The Royal Bank of Scotland plc (Royal Bank) and National Westminster Bank Plc (NatWest), which are United Kingdom-based clearing banks. The company's activities are organized in six business divisions: Corporate Markets (comprising Global Banking and Markets and United Kingdom Corporate Banking), Retail Markets (comprising Retail and Wealth Management), Ulster Bank, Citizens, RBS Insurance and Manufacturing. On October 17, 2007, RFS Holdings B.V. (RFS Holdings), a company jointly owned by RBS, Fortis N.V., Fortis SA/NV and Banco Santander S.A. (the Consortium Banks) and controlled by RBS, completed the acquisition of ABN AMRO Holding N.V. (ABN AMRO). In July 2008, the company disposed its entire interest in Global Voice Group Ltd. ROYAL BANK: UKFI Asks Bank to Explain Ex-CEO's Pension ------------------------------------------------------ The Royal Bank of Scotland Group plc has yet to explain why it decided to award more than a minimum pension to its former chief executive officer, Mr. Fred Goodwin, Reuters and The Associated Press report citing the head of U.K. Financial Investments Ltd., the agency set up last year to manage the government's GBP37 billion investment in RBS and in the newly expanded Lloyds Banking Group. According to the report, Mr. Goodwin's pension is currently valued at GBP703,000, or US$986,000, a year. The report relates John Kingman, UKFI's chief executive, said it had not been clear until recently that part of the pension was discretionary. "The reason it's discretionary is that his entitlement to an undiscounted pension from the age of 50 stemmed from a decision of RBS that he should be treated as retiring at the request of the employer," the report quoted Mr. Kingman as saying during a hearing at the Treasury Committee of the House of Commons. The agency "immediately took legal advice because this decision does seem extraordinary and it remains unexplained," Mr. Kingman said as cited by the report. As reported in the Troubled Company Reporter-Europe on Feb. 27, 2009, Bloomberg News said RBS is taking legal advice on Mr. Goodwin's annual pension. Reuters said RBS confirmed reports Wednesday last week that Mr. Goodwin was already drawing the pension from his GBP16 million retirement pot. "RBS is taking further legal advice in respect of certain aspects of Sir Fred Goodwin's contractual arrangements," and continues to discuss the position with the UKFI, RBS spokesman Neil Moorhouse said as cited by Bloomberg News. According to the report, the Treasury, through its bank holding company UKFI, said in a Feb. 25 statement it has been "vigorously pursuing" with the new chairman of RBS how it can claw back "some or all of this pension." The bank has agreed to review Mr. Goodwin's entitlement and whether there is a legal basis to challenge it, the Treasury said in the statement obtained by the news agency. About RBS The Royal Bank of Scotland Group plc (NYSE:RBS) -- http://www.rbs.com/-- is a holding company of The Royal Bank of Scotland plc (Royal Bank) and National Westminster Bank Plc (NatWest), which are United Kingdom-based clearing banks. The company's activities are organized in six business divisions: Corporate Markets (comprising Global Banking and Markets and United Kingdom Corporate Banking), Retail Markets (comprising Retail and Wealth Management), Ulster Bank, Citizens, RBS Insurance and Manufacturing. On October 17, 2007, RFS Holdings B.V. (RFS Holdings), a company jointly owned by RBS, Fortis N.V., Fortis SA/NV and Banco Santander S.A. (the Consortium Banks) and controlled by RBS, completed the acquisition of ABN AMRO Holding N.V. (ABN AMRO). In July 2008, the company disposed its entire interest in Global Voice Group Ltd. ROYAL BANK: Mulls Sale of Central & Eastern European Assets ----------------------------------------------------------- The Royal Bank of Scotland Group plc hired UBS AG to explore a sale of its central and eastern European units, Bloomberg News reports citing three people familiar with the plan. The bank may sell units in countries including Romania and Slovakia and may sell the divisions one-by-one to lure buyers, the people, who declined to be identified because the sale hasn�t been made public, were cited by the news agency as saying. A final decision to proceed with a sale hasn't been taken so far, the report says. According to Bloomberg News, RBS expanded operations in East Europe through the takeover of Dutch lender ABN Amro Holding NV in 2008. RBS bought ABN AMRO in October 2007 through a consortium with Fortis N.V., Fortis SA/NV and Banco Santander S.A. About RBS The Royal Bank of Scotland Group plc (NYSE:RBS) -- http://www.rbs.com/-- is a holding company of The Royal Bank of Scotland plc (Royal Bank) and National Westminster Bank Plc (NatWest), which are United Kingdom-based clearing banks. The company's activities are organized in six business divisions: Corporate Markets (comprising Global Banking and Markets and United Kingdom Corporate Banking), Retail Markets (comprising Retail and Wealth Management), Ulster Bank, Citizens, RBS Insurance and Manufacturing. On October 17, 2007, RFS Holdings B.V. (RFS Holdings), a company jointly owned by RBS, Fortis N.V., Fortis SA/NV and Banco Santander S.A. (the Consortium Banks) and controlled by RBS, completed the acquisition of ABN AMRO Holding N.V. (ABN AMRO). In July 2008, the company disposed its entire interest in Global Voice Group Ltd. TEMPLE QUAY: Taps Joint Administrators from Tenon Recovery ---------------------------------------------------------- Colin Wilson and S. J. Parker of Tenon Recovery were appointed joint administrators of Temple Quay Recruitment Ltd. on Feb. 20, 2009. The company can be reached through Tenon Recovery at: Sherlock House 73 Baker Street London W1U 6RD England * UK: Companies Failed to Heed Warning Signs, Pwc Poll Finds ------------------------------------------------------------ Turnaround professionals' outlook on the economy is increasingly pessimistic, with 72.6% of those polled claiming it is now significantly harder to turn around failing companies than when previously polled at the end of September 2008. The second survey, part of a series of studies polling close to 200 turnaround directors, confirmed growing alarm that companies were not aware of the danger signs. Over 60% of experts suggested management teams were reluctant to employ turnaround expertise and some alluded to executives exhibiting a "head in the sand mentality." Richard Boys-Stones, partner, Business Recovery Services at PricewaterhouseCoopers LLP, commented: "The findings of this survey are consistent with what we are seeing in our Advisory practice. Management teams are being stretched in ways that they have never been before as a result of the most exceptionally challenging economic and market conditions in a lifetime. Unsurprisingly, management are having to operate outside their comfort zones and while some are reluctant to call for help others are just not realising the scale of the business challenge." The gloom is further emphasized with a focus on "inevitable" redundancies as nearly two thirds of those surveyed suggest companies will be forced to undergo a level of job shedding. However some turnaround professionals argued that strategic restructuring and innovation would lead to a more successful outcome than simple staff cuts. Interestingly, in this survey 28% of respondents suggested their client had breached banking covenants. This is a marked reduction on the last survey, which indicated that 48% had. A possible inference from this is that weaker companies began to breach earlier in the cycle and now the stronger are "keeping the wolf from the door". In cases of breach, turnaround professionals said that lenders that saw revised and strengthened business plans were less inclined to take action that would result in the business defaulting. Cash is still marked as the focal point of business turnaround in the current climate with 86.7% reaffirming that securing cash flow is the single most important action in a turnaround. However, despite a number of state interventions to boost bank lending, 87% stress that raising funds for operating cash flow is now in fact harder than at the time of the first survey (end of September 2008). As a replacement, respondents did suggest that entrepreneurs, high net worth individuals and asset based lenders, are proving an alternative source of investment for companies in need of cash. Further to this 83.5% of specialists claimed the recession would create opportunities for Private Equity and one commented that PE investors were "waiting in the wings." One view that remains little changed is the perception of government intervention, with 61.7% agreeing that not enough has been done to deal with the economic crisis, down slightly from 68.5% in the first survey. When asked to comment further, the need for a well-communicated, considered, clear, long-term vision was the overriding view, as opposed to the current perceived knee- jerk reactions. In line with this the second survey showed an exerted call for the security given by a government backed credit insurance scheme similar to that in France. Anne Fergusson, director, PricewaterhouseCoopers LLP, and Head of The Turnaround Panel concluded: "There is a strong sense from our turnaround directors that the economy is mired in a recession that has some way to go. When we come to report on the outcome of our third survey it is to be hoped that remedies arising from utilisation of turnaround directors are starting to have a beneficial impact with some confidence returning to businesses. * EUROPE: Passenger Demand Down 5.7% in January 2009, IATA Says --------------------------------------------------------------- The International Air Transport Association (IATA) on Thursday, Feb. 26, 2009, released international scheduled traffic results for January showing a deepening year-on-year demand slump. International passenger demand fell by 5.6% in January 2009 compared to the same month in 2008. It is also a full percentage point worse than the 4.6% year-on-year drop recorded in December. The January fall in demand is the fifth consecutive month of contraction. The 5.6% drop in passenger demand outpaced capacity cuts of 2.0% driving the load factor to 72.8% - 2.8% below what was recorded for January 2008. The alarming collapse in cargo markets in December (-22.6%) worsened in January 2009 with a 23.2% year-on-year demand drop. This is the eighth consecutive month of contraction for freight traffic. "Alarm bells are ringing everywhere. Every region's carriers are reporting big drops in cargo. And, aside from the Middle East carriers, passenger demand is falling in all regions. The industry is in a global crisis and we have not yet seen the bottom," said Giovanni Bisignani, IATA's Director General and CEO. Passenger * Asian carriers led the decline in passenger demand with an 8.4% year-on-year drop in January. While this is slightly better than the 9.7% contraction in December, this is positively skewed by Chinese New Year which fell at the end of January 2009 (and which was in February the year before). Capacity in the region contracted 4.3%. With Japan, the region's largest market for air travel, expected to see its economy contract by an unprecedented 5% in 2009, the prospects for traffic in the region remain dismal. * North American carriers posted the second largest passenger decline at 6.2% led by a decline in Trans-Pacific travel. In response, carriers withdrew 2.6% of their international capacity, clawing back some of the expansion of 2008. * European carriers offset a 5.7% decline in demand with a 3.6% decrease in capacity. Demand decreased sharply from the 2.7% fall in December as European economies move into deep recession. * Latin American carriers saw a modest decline of 1.4%. Even against a 0.5% increase in capacity, the region turned in the highest load factors at 74.9%. * African carriers saw the demand decline slow from an average 4.0% in 2008 to 2.6% in January. * The Middle East was the only region with a positive traffic growth of 3.1%. This is far below both the double-digit traffic growth in 2008 and the 10.8% expansion in capacity. Cargo * Asia Pacific carriers, representing 43% of the market, led the cargo decline with a 28.1% year-on-year drop. This was followed closely by the other major market players: European carriers (-23.0%) and North American carriers (-19.3%). * While this may appear to be relatively stabilized compared to the precipitous December drop, it is too soon to call a bottom in the air freight market. Manufacturers are still shedding inventory and cutting production which is expected to lead to further falls in freight volumes. "The only good news is that fuel prices remain well below last year's level. But the drop in demand is much more harmful. The industry is shrinking with revenues expected to fall by US$35 billion to US$500 billion, delivering a loss of US$2.5 billion this year," said Mr. Bisignani. "Airlines remain in intensive care, but while others ask for government bailouts, our demands on Governments are much more modest. First, don't tax us to death in order to pay for investments in the banking industry. This includes the UK government's plans to increase its multi-billion pound Air Passenger Duty and the Dutch Government's misguided departure tax," said Bisignani. In 2008, even as governments delivered tax breaks to stimulate economic growth, the airline industry took on an additional tax burden of US$6.9 billion. "Second, give airlines the commercial freedoms that every other business takes for granted. With the world's capital markets in disarray, archaic ownership restrictions are an unnecessary burden that must be lifted. Today's crisis highlights the need to change the structure of this hyper-fragmented and fragile industry," said Mr. Bisignani, referring to IATA's Agenda for Freedom initiative. * Fitch Says Debt Buybacks Below Par Not Always a Distressed Debt ----------------------------------------------------------------- Fitch Ratings says buybacks of debt below par do not necessarily constitute as distressed debt exchange unless they are coercive or de facto involuntary. This comment comes as the deterioration in global credit markets since mid-2007, and in particular the accelerating deterioration since September 2008, has resulted in secondary market pricing of loans for all borrowers, regardless of performance, trading significantly below par. As a result, Fitch has observed that several borrowers in Europe with strong liquidity have looked for opportunities to reduce their debt levels at below-par prices through one-on-one debt buybacks or through general offers or reverse auctions. Under Fitch's "Distressed Debt Exchange Criteria" report dated 7 April 2006, two requirements must both be met for a debt exchange to be considered a DDE and hence a default: it must constitute a material reduction in terms (such as a cash tender for less than par) and it must be coercive or de facto involuntary. "Provided that the debt buyback offer can be taken up at the option of the investor, and is not being made pursuant to an explicit threat of bankruptcy or default, and is not considered necessary to prevent a default in the near term, Fitch would not consider the buyback coercive or de facto involuntary," says Michelle De Angelis, Senior Director in Fitch's European Leveraged Finance team. "Therefore, even if it meets Fitch's other criterion for a DDE, in that it results in a material reduction in terms, namely payment below par, it would not be considered a DDE and would not constitute a default." However, Fitch notes that even if the exchange is not considered a DDE, there are other factors which must be taken into account in reviewing the effects of such a buyback on an issuer's credit quality and rating. These include liquidity, the structure of the buyback and whether it results in an increased tax burden for the company, whether the debt is cancelled or remains on balance sheet, and in the latter case, whether the non-tendering investors' rights are protected. Recent examples of such non-distressed buybacks in Europe include Danish incumbent telecom operator, TDC A/S ('BB-' (BB minus)/Positive), which bought back debt in a number of bilateral transactions during 2008; Smurfit Kappa Group plc ('BB'/Stable), which launched a reverse auction process on 11 February 2009; and Wind Acquisition Finance Holdings S.A. (the parent of Wind Telecomunicazioni SpA, 'BB-' (BB minus)/Positive), which launched a tender offer for its payment-in-kind loan - also on 11 February 2009. * Fitch Reports Updates on its Rating Definitions ------------------------------------------------- Fitch Ratings has published updated definitions for its rating scales to provide enhanced clarity with respect to the rating targets for its primary ('AAA'-led) rating scales. Fitch has introduced additional descriptive text for each of the principal applications of the 'AAA' scale related to issuers and obligations. The broad comparability of rating targets on all applications of the 'AAA' scale is retained, but new descriptive text underlines the relative importance of default risk, and provides further clarity on the additional incorporation of loss severity applied to ratings of corporate finance obligations. More detail has also been added at the 'C', 'RD' and 'D' levels for the ratings of issuers, to provide greater clarity on the ratings applicable to entities at different stages of distress, notably incorporating the treatment of forbearance, waiver and standstill agreements. Fitch's newly announced Loss Severity Rating Scale for structured finance obligations will provide a view of the relative vulnerability to loss severity of a tranche in comparison with the overall loss expectations for that transaction's collateral pool. These ratings, assigned to obligations rated 'AAA' to 'B' on the obligation scale, will be complemented by Recovery Ratings for structured finance ratings rated 'CCC' or below. The Recovery Ratings will provide an ordinal ranking of potential recoveries relative to historical ranges, comparable to Recovery Ratings assigned to corporate and public finance obligations. Other changes include simplification of the definition text for Fitch's servicer and asset manager rating scales; "limitation boxes" highlighting scale-specific analytical limitations to the rating opinion; increased clarity and detail in the description of speculative-grade credit ratings for corporate and public finance bonds; inclusion of a general correspondence table, indicating the most common relationships between Long- and Short-term rating scales; and more detail on the application of Rating Watches, Outlooks and rating withdrawals. * Upcoming Meetings, Conferences and Seminars --------------------------------------------- Mar. 13, 2009 AMERICAN BANKRUPTCY INSTITUTE Bankruptcy Battleground West Beverly Wilshire, Beverly Hills, California Contact: 1-703-739-0800; http://www.abiworld.org/ Mar. 14-16, 2009 AMERICAN BANKRUPTCY INSTITUTE Conrad Duberstein Moot Court Competition St. John's University School of Law, New York City Contact: 1-703-739-0800; http://www.abiworld.org/ Apr. 1-4, 2009 AMERICAN BANKRUPTCY INSTITUTE 27th Annual Spring Meeting Gaylord National Resort & Convention Center, National Harbor, Md. Contact: 1-703-739-0800; http://www.abiworld.org/ Apr. 16-19, 2009 COMMERICAL LAW LEAGUE OF AMERICA 2009 Chicago/Spring Meeting Westin Hotel on Michigan Ave., Chicago, Ill. Contact: (312) 781-2000; http://www.clla.org/ Apr. 17-18, 2009 NATIONAL ASSOCIATION OF BANKRUPTCY TRUSTEES NABT Spring Seminar The Peabody, Orlando, Florida Contact: http://www.nabt.com/ Apr. 20, 2009 AMERICAN BANKRUPTCY INSTITUTE Consumer Bankruptcy Conference John Adams Courthouse, Boston, Massachusetts Contact: 1-703-739-0800; http://www.abiworld.org/ Apr. 27-28, 2009 TURNAROUND MANAGEMENT ASSOCIATION Corporate Governance Meetings Intercontinental Hotel, Chicago, Illinois Contact: www.turnaround.org Apr. 28-30, 2009 TURNAROUND MANAGEMENT ASSOCIATION TMA Spring Conference Intercontinental Hotel, Chicago, Illinois Contact: www.turnaround.org May 1, 2009 AMERICAN BANKRUPTCY INSTITUTE Nuts and Bolts for Young Practitioners Alexander Hamilton Custom House, New York City Contact: 1-703-739-0800; http://www.abiworld.org/ May 4, 2009 AMERICAN BANKRUPTCY INSTITUTE New York City Bankruptcy Conference New York Marriott Marquis, New York City Contact: 1-703-739-0800; http://www.abiworld.org/ May 7-8, 2009 RENASSANCE AMERICAN MANAGEMENT, INC. 6th Annual Conference on Distressted Investing - Europe The Le Meridien Piccadilly Hotel, London, U.K. Contact: 1-903-595-3800 or http://www.renaissanceamerican.com/ May 7-10, 2009 AMERICAN BANKRUPTCY INSTITUTE 27th Annual Spring Meeting Gaylord National Resort & Convention Center National Harbor, Maryland Contact: http://www.abiworld.org/ May 12-15, 2009 AMERICAN BANKRUPTCY INSTITUTE Litigation Skills Symposium Tulane University, New Orleans, La. Contact: http://www.abiworld.org/ May 14-16, 2009 ALI-ABA Chapter 11 Business Reorganizations Langham Hotel, Boston, Massachusetts Contact: http://www.ali-aba.org June 11-14, 2009 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort and Spa Traverse City, Michigan Contact: http://www.abiworld.org/ June 21-24, 2009 INTERNATIONAL ASSOCIATION OF RESTRUCTURING, INSOLVENCY & BANKRUPTCY PROFESSIONALS 8th International World Congress TBA Contact: http://www.insol.org/ July 16-19, 2009 AMERICAN BANKRUPTCY INSTITUTE Northeast Bankruptcy Conference Mt. Washington Inn Bretton Woods, New Hampshire Contact: http://www.abiworld.org/ July 29-Aug. 1, 2009 AMERICAN BANKRUPTCY INSTITUTE Southeast Bankruptcy Conference The Westin Hilton Head Island Resort & Spa, Hilton Head Island, S.C. Contact: http://www.abiworld.org/ Aug. 6-8, 2009 AMERICAN BANKRUPTCY INSTITUTE Mid-Atlantic Bankruptcy Conference Hotel Hershey, Hershey, Pa. Contact: http://www.abiworld.org/ Sept. 10-11, 2009 AMERICAN BANKRUPTCY INSTITUTE Complex Financial Restructuring Program Hyatt Regency Lake Tahoe, Incline Village, Nevada Contact: http://www.abiworld.org/ Sept. 10-12, 2009 AMERICAN BANKRUPTCY INSTITUTE 17th Annual Southwest Bankruptcy Conference Hyatt Regency Lake Tahoe, Incline Village, Nevada Contact: http://www.abiworld.org/ Oct. 2, 2009 AMERICAN BANKRUPTCY INSTITUTE ABI/GULC "Views from the Bench" Georgetown University Law Center, Washington, D.C. Contact: http://www.abiworld.org/ Oct. 5-9, 2009 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott Desert Ridge, Phoenix, Arizona Contact: 312-578-6900; http://www.turnaround.org/ Oct. 20, 2009 AMERICAN BANKRUPTCY INSTITUTE NCBJ/ABI Educational Program Paris Las Vegas, Las Vegas, Nev. Contact: http://www.abiworld.org/ Dec. 3-5, 2009 AMERICAN BANKRUPTCY INSTITUTE 21st Annual Winter Leadership Conference La Quinta Resort & Spa, La Quinta, California Contact: 1-703-739-0800; http://www.abiworld.org/ Apr. 29-May 2, 2010 AMERICAN BANKRUPTCY INSTITUTE Annual Spring Meeting Gaylord National Resort & Convention Center, Maryland Contact: 1-703-739-0800; http://www.abiworld.org/ June 17-20, 2010 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort and Spa, Traverse City, Michigan Contact: 1-703-739-0800; http://www.abiworld.org/ July 7-10, 2010 AMERICAN BANKRUPTCY INSTITUTE Northeast Bankruptcy Conference Ocean Edge Resort, Brewster, Massachusetts Contact: 1-703-739-0800; http://www.abiworld.org/ July 14-17, 2010 AMERICAN BANKRUPTCY INSTITUTE Southeast Bankruptcy Conference The Ritz-Carlton Amelia Island, Amelia, Fla. Contact: http://www.abiworld.org/ Aug. 5-7, 2010 AMERICAN BANKRUPTCY INSTITUTE Mid-Atlantic Bankruptcy Workshop Hyatt Regency Chesapeake Bay, Cambridge, Maryland Contact: 1-703-739-0800; http://www.abiworld.org/ Oct. 4-8, 2010 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention JW Marriott Grande Lakes, Orlando, Florida Contact: http://www.turnaround.org/ Dec. 2-4, 2010 AMERICAN BANKRUPTCY INSTITUTE 22nd Annual Winter Leadership Conference Camelback Inn, Scottsdale, Arizona Contact: 1-703-739-0800; http://www.abiworld.org/ Mar. 31-Apr. 3, 2011 AMERICAN BANKRUPTCY INSTITUTE Annual Spring Meeting Gaylord National Resort & Convention Center, Maryland Contact: 1-703-739-0800; http://www.abiworld.org/ June 9-12, 2011 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort and Spa Traverse City, Michigan Contact: http://www.abiworld.org/ Dec. 1-3, 2011 AMERICAN BANKRUPTCY INSTITUTE 23rd Annual Winter Leadership Conference La Quinta Resort & Spa, La Quinta, California Contact: 1-703-739-0800; http://www.abiworld.org/ ********* 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. Valerie C. Udtuhan, Marites O. Claro, Rousel Elaine C. Tumanda, Pius Xerxes V. Tovilla, Joy A. Agravante, Marie Therese V. Profetana and Peter A. Chapman, Editors. Copyright 2009. All rights reserved. ISSN 1529-2754. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR Europe subscription rate is US$625 per half-year, delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Christopher Beard at 240/629-3300. * * * End of Transmission * * *