/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/090515.mbx T R O U B L E D C O M P A N Y R E P O R T E R E U R O P E Friday, May 15, 2009, Vol. 10, No. 95 Headlines A U S T R I A HDG CONSULTING : Claims Registration Period Ends May 25 HYPO GROUP: Moody's Reviews 'D-' BFSR for Possible Downgrade USORA IMMO: Claims Registration Period Ends May 26 WILHELM LIPP: Claims Registration Period Ends May 26 WONDERWOOD GMBH: Claims Registration Period Ends May 25 C Y P R U S DELANCE LTD: S&P Puts 'B' Corporate Rating on CreditWatch Negative F R A N C E MTI GLOBAL: In Talks with Lenders on Covenant Waivers PERNOD RICARD: Fitch Affirms Issuer Default Rating at 'BB+' G E R M A N Y ASSIST BLECHTECHNIK: Claims Registration Period Ends June 10 BAUSTOFFE CREATIV: Claims Registration Period Ends July 25 BAYERISCHE LANDESBANK: Moody's Cuts Bank Strength Rating to 'D-' COMMERZBANK AG: Fitch Junks Ratings on Various Hybrid Instruments COMMLOC GMBH: Claims Registration Period Ends June 5 DIMEX GMBH: Claims Registration Period Ends May 29 E-M-S SALES: Claims Registration Period Ends July 3 EDSCHA BETÄTIGUNGSSYSTEME: Claims Registration Ends May 29 ELITE BUSINESS: Claims Registration Period Ends June 5 GENERAL MOTORS: Hesse Says Gov't Trust for Opel is Too Expensive GILDEMEISTER AG: Moody's Reviews 'Ba2' Rating for Downgrade LANDESBANK SAAR: Moody's Reviews 'D+' Bank Fin'l Strength Rating SCHAEFFLER KG: Aims to Save US$342 Million in Labor Costs TUI AG: Posts EUR415 Mln Group Profit in First Quarter 2009 I C E L A N D STRAUMUR-BURDARAS: To Take Over Gudmundsson's West Ham United I R E L A N D EIRCOM LTD: Gov't Intervention to Protect Future Sought EMPYREAN FINANCE: Moody's Cuts Ratings on 6 Classes of Notes to Ca MAGI FUNDING: S&P Withdraws 'BB' Credit Rating on Class K Notes I T A L Y SAFILO SPA: S&P Junks Long-Term Corporate Credit Rating K A Z A K H S T A N DALI STROY: Creditors Must File Claims by June 12 INVEST OIL : Creditors Must File Claims by June 12 KAZTEMIRTRANS: Moody's Keeps 'Ba1' Rating; Outlook Remains Stable LADOS KAZALY: Creditors Must File Claims by June 12 TASKYN LLP: Creditors Must File Claims by June 12 * S&P Affirms Low-B Ratings on Four Kazakh Govt-Related Entities K Y R G Y Z S T A N SOFIA TRADING: Creditors Must File Claims by June 5 N E T H E R L A N D S ING GROEP: Incurs US$1.08 Billion Loss in First-Quarter R U S S I A CENTRAL CONSTRUCTION: Creditors Must File Claims by June 4 GALLLERY MEDIA: Moody's Cuts Corporate Family Rating to 'Caa3' IZOLYATSIONSHCHIK LLC: Creditors Must File Claims by June 4 KURGAN AIRPORT: Creditors Must File Claims by June 4 LYAMINSKIY FIBERBOARD: V. Makarov Named Insolvency Manager NATIONAL FACTORING: Moody's Cuts Long-Term Deposit Ratings to 'B3' STROY-AZIYA LLC: Creditors Must File Claims by July 4 S P A I N SANTANDER EMPRESAS: S&P Affirms Ratings on Class F Notes at 'CCC-' TDA 25: Standard & Poor's Junks Rating on Class D Notes S W I T Z E R L A N D E. + M. KUNZ GMBH: Creditors Must File Proofs of Claim by May 20 EXPO WERBE: Claims Filing Deadline is May 20 GOLFPLATZ WEISSBAD: Creditors Have Until May 20 to File Claims HELD & MUSSOI GMBH: Claims Filing Deadline is May 20 PLATFORM108 AG: Creditors Must File Claims by May 20 RESTAURANT BRUNEGG: Creditors Have Until May 20 to File Claims SABRULIN AG: Claims Filing Deadline is May 20 U K R A I N E AGRO-LAN LLC: Creditors Must File Claims by May 24 CHERNOMORSKY AGRICULTURAL: Creditors Must File Claims by May 24 FAF IMAGES: Creditors Must File Claims by May 23 TSENTROPROM COMPLEX: Creditors Must File Claims by May 23 UKRAINIAN FOOD: Creditors Must File Claims by May 23 * Moody's Cuts Issuer Ratings on Three Ukrainian Cities to 'B2' U N I T E D K I N G D O M ABSOLUTE LEISURE: Sites Put Up for Sale Following Administration BARRATT DEVELOPMENTS: Says No Current Plans to Raise Equity JOHNSTON PRESS: May Breach Debt Covenants After Irish Sale Failed MONIER GROUP: Lenders Turn Down PAI's Debt-for-Equity Swap Offer SOVEREIGN OIL: Share Trading Resumes Today; Chairman Ellis Ousted SUN MICROSYSTEMS: Scottish Plant Posts GBP4.5MM 2008 Pre-Tax Loss TATA STEEL UK: Wants Lenders to Reset Terms on Corus Loan THPA FINANCE: S&P Puts 'BB' Rating on Class C Notes on Watch Neg UROPA SECURITIES: Fitch Junks Ratings on Four Classes of Notes WHISTLEJACKET CAPITAL: Moody's Corrects Release; Cuts Note Ratings * S&P Puts Ratings on 35 Tranches in 8 Euro CBMS Deals on WatchNeg * IMF Wants European Banks to Be Subjected to "Stress Tests" * BOOK REVIEW: Performance Evaluation of Hedge Funds ********* ============= A U S T R I A ============= HDG CONSULTING : Claims Registration Period Ends May 25 ------------------------------------------------------- Creditors owed money by Hdg Consulting GmbH & Co Kg have until May 25, 2009, to file written proofs of claim to the court- appointed estate administrator: Dr. Peter Wilhelm Ringstrasse 9 3500 Krems Austria Tel: 02732/82265 Fax: 02732/822656 E-mail: rechtsanwalt@ra-wilhelm.at Creditors and other interested parties are encouraged to attend the creditors' meeting at 10:30 a.m. on June 10, 2009, for the examination of claims at: Land Court of Krems an der Donau Hall A Second Floor Krems an der Donau Austria HYPO GROUP: Moody's Reviews 'D-' BFSR for Possible Downgrade ------------------------------------------------------------ Moody's Investors Service placed on review for possible downgrade the D- bank financial strength rating of Hypo Group Alpe Adria, reflecting the rating agency's concerns about the bank's profitability and increased risks inherent in its exposure to the Eastern European markets. The bank's debt and deposit ratings were downgraded to Baa1 from A2. The rating on its subordinated liabilities was downgraded to Baa2 from A3. The ratings remain on review for further possible downgrade due to the review for possible downgrade of HGAA's BFSR. HGAA's short term rating was downgraded to Prime-2 from Prime-1, while the Aa2 rating for debt backed by the Austrian federal state of Carinthia was affirmed and still has a stable outlook. Downgrade of Long-Term Ratings Due to Changed Support Assumptions The downgrade of HGAA's debt and deposit ratings to Baa1 from A2 reflects changes in Moody's support assumptions for the bank. The rating agency includes a high probability of support from HGAA's parent, Bayerische Landesbank, in its assessment, in the light of a capital injection from BayernLB of EUR700 million. Furthermore, Moody's believes that, at this stage, BayernLB's restructuring plans are unlikely to affect the probability of support for HGAA from its parent. However, Moody's has lowered the regional and local government and systemic support expectation and, notably, the federal state of Carinthia (a 12.4% shareholder) did not participate in the capital increase. Nevertheless, overall HGAA remains in the high support category. The debt and deposit ratings remain on review for further possible downgrade due to the ongoing review of HGAA's D- BFSR. Downgrade of Hybrid Instruments Reflects Increased Risk Of Coupon Losses Moody's downgraded the ratings on the hybrid securities (Tier 1 instruments) issued by HGAA's subsidiaries, Hypo Alpe Adria (Jersey) Ltd and Hypo Alpe Adria (Jersey) II Ltd, to Caa2 from Baa2 as a result of the rating agency's assumption of four coupon losses for these non-cumulative perpetual instruments. HGAA has announced that the instruments will not pay a coupon for 2008. The outlook on the ratings of the hybrid securities is stable as these ratings are based on Moody's expected loss calculation. Moody's previous rating action on HGAA was implemented on Nov. 11, 2008, when Moody's placed on review for possible downgrade HGAA's A2 debt and deposit ratings, subordinated debt (rated A3), preference stock (Baa2) and short-term debt and deposit ratings. The D- BSFR and the Prime-1 short-term rating were affirmed. Based in Klagenfurt, Austria, HGAA reported 2008 net losses of EUR520 million and total assets of EUR43.3 billion at the end of the year. USORA IMMO: Claims Registration Period Ends May 26 -------------------------------------------------- Creditors owed money by Usora Immo GmbH have until May 26, 2009, to file written proofs of claim to the court-appointed estate administrator: Mag.Dr. Ulla Reisch Kremser Gasse 4 3100 St. Poelten Austria Tel: 02742/35 15 50 Fax: 02742/35 15 50-5 E-mail: office.st.poelten@ulsr.at Creditors and other interested parties are encouraged to attend the creditors' meeting at 11:40 a.m. on June 16, 2009, for the examination of claims at: Land Court of St. Poelten Room 216 Second Floor St. Poelten Austria WILHELM LIPP: Claims Registration Period Ends May 26 ---------------------------------------------------- Creditors owed money by Wilhelm Lipp GmbH have until May 26, 2009, to file written proofs of claim to the court-appointed estate administrator: Dr. Walter Anzboeck Stiegengasse 8 3430 Tulln Austria Tel: 02272/61 600 Fax: 02272/61 600-20 E-mail: anwalt@anzboeck.at Creditors and other interested parties are encouraged to attend the creditors' meeting at 10:40 a.m. on June 16, 2009, for the examination of claims at: Land Court of St. Poelten Room 216 Second Floor St. Poelten Austria WONDERWOOD GMBH: Claims Registration Period Ends May 25 ------------------------------------------------------- Creditors owed money by WonderWood GmbH have until May 25, 2009, to file written proofs of claim to the court-appointed estate administrator: Mag. Gerald Streibel Schwedengasse 2 3500 Krems an der Donau Austria Tel: 02732/70280-80 Fax: 02732/70280-9 E-mail: insolvenz.krems@tpawt.com Creditors and other interested parties are encouraged to attend the creditors' meeting at 9:45 a.m. on June 10, 2009, for the examination of claims at: Land Court of Krems an der Donau Hall A Second Floor Krems an der Donau Austria =========== C Y P R U S =========== DELANCE LTD: S&P Puts 'B' Corporate Rating on CreditWatch Negative ------------------------------------------------------------------ Standard & Poor's Ratings Services said it placed its 'B' long- term corporate credit rating on Cyprus-based Delance Ltd. on CreditWatch with negative implications. Delance Ltd. is the holding company of Rolf Group, which is Russia's largest importer and retailer of foreign-branded cars. "The CreditWatch listing reflects our heightened concern about the company's ability to refinance near-term maturities or replace them with alternative sources of funding in the currently stretched capital markets," said Standard & Poor's credit analyst Anna Stegert. "It also reflects the company's weak short-term operating prospects in the difficult Russian car market." S&P understands that Rolf has been successful in extending a large proportion of recently matured credit lines. Those lines, however, have been extended only for a few more months, which leaves the company with a relatively high amount of credit lines maturing during the course of the second quarter of 2009. In S&P's view, Rolf's current liquidity sources are not sufficient to cover those near-term maturities, so that it would have to obtain extensions on a large proportion of its maturing lines or put alternative funding in place. Rolf is currently in negotiations with its lenders, but so far no final agreement has been reached. S&P sees a significant risk that the company may not be able to put sufficient funding in place given the currently difficult market environment and the very weak Russian car market in the first quarter of 2009. On the other hand, S&P notes that Rolf's management has plausible possibilities to manage this period of tight liquidity. S&P further notes its financial leverage of below 2x debt to EBITDA, based on preliminary 2008 financials received from the company, which S&P considers moderate for the rating category in normal times. S&P also notes that the company is likely to show significant release of working capital that should help it meet upcoming maturities in the second half of 2009. S&P expects to resolve the CreditWatch placement within the next two months. "The rating could be affirmed if Rolf is successful in extending a sufficient portion of the group's maturing bank loans, or if it obtains alternative funding to meet the upcoming maturities," said Ms. Stegert. "Failure to address these challenges in a timely manner would likely trigger a downgrade, potentially by more than one notch." =========== F R A N C E =========== MTI GLOBAL: In Talks with Lenders on Covenant Waivers ----------------------------------------------------- MTI Global Inc. is in breach of financial and general covenants under the credit facilities with its principal Canadian bank and it mezzanine lender. In particular, the Company did not achieve its December 31, 2008 earnings before interest, taxes and depreciation, fixed charge coverage and funded debt to earnings before interest, taxes and depreciation covenants or its March 31, 2009 fixed charge coverage covenant. Furthermore, the Company is in breach of certain general covenants it was obligated to satisfy pursuant to waiver agreements entered into by the Company with its Bank and Lender based on its June 30, 2008 and subsequent interim monthly results. The covenant violation provides the Bank and Lender with the right to demand repayment of its indebtedness. Subsequent to March 31, 2009, the Company is in continuing discussions with the Bank and the Lender to obtain a waiver of the breaches including amended covenants. MTI Global posted a net loss for the quarter of C$4.8 million or C$0.17 per share compared to a loss in prior year of C$900,000 or C$0.03 per share. Sales for the three months ended March 31, 2009, were C$13.5 million, approximately 4.2% ahead of last year's sales of C$13.0 million. This includes an increase of approximately C$2.3 million, due to the impact of currency fluctuations. At March 31, 2009, MTI Global had C$52.1 million in total assets, including cash and cash equivalents of C$2.5 million; C$29.4 million in total liabilities; and C$22.6 million in shareholders' equity. Based on the sale of the majority of its Leewood and Richmond, Virginia silicone assets, operational changes completed to date, and preliminary indications in the aerospace market, the Company remains cautiously optimistic that it will report improving results through the balance of 2009. In view of the Canadian dollar value against the U.S. dollar, the Company is increasingly confident about achieving improved results with most of its aerospace programs relocated to Mexico and the sale of the majority of the assets of Leewood and N.A. Silicone's Richmond, Virginia plant. In addition, the Company is making satisfactory progress on the disposition of the remaining silicone assets, although the current economic climate is slowing the process. The Company has engaged an investment bank to assist in these transactions. The results for the first quarter of 2009 were better than prior year but below expectations. Revenues and gross margin improved primarily through increased volume in Aerospace at Polyfab divisions and favorable exchange rates compared to prior year. However, the Company continued to incur lower than expected revenues at N.A. Silicone due to the continued decline in the North American automotive market. About MTI Global MTI Global Inc. -- http://www.mtiglobalinc.com/-- designs, develops and manufactures custom-engineered products using silicone and other cellular materials. The Company serves a variety of specialty markets focused on two main areas: Silicone and MTI Polyfab, comprising, Aerospace and Fabricated Products. The Company designs and fabricates energy management systems from a variety of flexible, cellular materials. MTI Global also produces and distributes specialty silicone elastomer products. MTI Global's primary markets are aerospace and mass transit. Secondary markets include sporting goods, automotive, industrial, institutional, electronics, and the medical market through a 51% interest in MTI Sterne SARL of Cavaillon, France. MTI Global's head office and Canadian manufacturing operations are located in Mississauga, Ontario, with international manufacturing operations located in Milton, Florida and a contract manufacturer venture in Ensenada, Mexico. The Company also maintains engineering support centers in Brazil and Toulouse, France. PERNOD RICARD: Fitch Affirms Issuer Default Rating at 'BB+' ----------------------------------------------------------- Fitch Ratings has revised its Outlook on Pernod Ricard SA to Stable from Negative after the French wine and spirit maker confirmed it has successfully completed a EUR1 billion rights issue. The agency has simultaneously affirmed Pernod's Long-term Issuer Default and senior unsecured ratings at 'BB+', respectively, and Short-term IDR at 'B'. "The rating action reflects Fitch's increased confidence about Pernod's ability to deliver on its de-leveraging targets, resulting in a strengthened position within the company's 'BB+' rating," said Giulio Lombardi, Senior Director in Fitch's European Retail and Consumer Products Group. "With the confirmation that the rights issue announced on April 7, 2009 has been successfully finalized, Fitch believes Pernod is on track to reducing its net debt/EBITDA towards the planned 4x mark despite unfavorable developments in its sales during the latest financial quarters ending in December 2008 and March 2009." The ratings could benefit if Pernod successfully de-leverages through cash flow generation and planned asset disposals over the next few quarters and achieves leverage comfortably below 4x on a sustainable basis. ============= G E R M A N Y ============= ASSIST BLECHTECHNIK: Claims Registration Period Ends June 10 ------------------------------------------------------------ Creditors of Assist Blechtechnik Beteiligungsgesellschaft mbH have until June 10, 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 July 7, 2009, at which time the insolvency manager will present his first report. The meeting of creditors will be held at: The District Court of Wuppertal Meeting Room A234 Isle 2 42103 Wuppertal Germany Claims set out in the insolvency manager's report will be verified by the court during this meeting. Creditors may also constitute a creditors' committee or opt to appoint a new insolvency manager. The insolvency manager can be reached at: Dr. Peter Neu Elberfelder Strasse 39 42853 Remscheid Germany Tel: 02191/499 18-10 Fax: 02191/499 18-50 Website: www.atn-ra.de The court opened bankruptcy proceedings against the company on May 1, 2009. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: Assist Blechtechnik Beteiligungsgesellschaft mbH Attn: Rolf Mestemacher, Claus Carsten, Stefan Beidatsch and Arnd Oswald, Managers Leverkuser Str. 65 42897 Remscheid Germany BAUSTOFFE CREATIV: Claims Registration Period Ends July 25 ---------------------------------------------------------- Creditors of Baustoffe Creativ GmbH have until July 25, 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 Aug. 18, 2009, at which time the insolvency manager will present his first report. The meeting of creditors will be held at: The District Court of Bad Kreuznach Hall A4 Hofgartenstr. 2 55545 Bad Kreuznach 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. Robert Schiebe Hindenburgstr. 32 55118 Mainz Germany Tel: 06131/61923-0 Fax: 06131/61923-11 E-mail: r.schiebe@schiebe.de The court opened bankruptcy proceedings against the company on April 30, 2009. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: Baustoffe Creativ GmbH Attn: Karin Sophie Bussmer, manager Albert-Rosenkranz-Str. 7 55543 Bad Kreuznach Germany BAYERISCHE LANDESBANK: Moody's Cuts Bank Strength Rating to 'D-' ---------------------------------------------------------------- Moody's Investors Service downgraded the bank financial strength rating of Bayerische Landesbank to D- from C-. The long-term senior debt and deposit ratings were downgraded to A1 from Aa2 and the subordinated liabilities to A2 from Aa3. At the same time, Moody's downgraded various hybrid instruments of BayernLB group entities, as detailed below. Moody's affirmed, with a stable outlook, BayernLB's Aaa ratings for obligations qualifying for the grandfathering of "Anstaltslast" and "Gewaehrtraegerhaftung" (maintenance and guarantee obligations, respectively, of the federal state of Bavaria), which were abolished in July 2005, and the Aaa ratings guaranteed by the Federal Republic of Germany. The bank's Prime-1 short-term rating was also affirmed. The rating actions conclude the review of BayernLB initiated on Dec. 2, 2008. All the ratings carry a stable outlook. Downgrade of BFSR Due to Asset Quality Pressure and Low Profitability, Partially Buffered by Recapitalization The downgrade of BayernLB's BFSR to D-, which translates to a Baseline Credit Assessment of Ba3, reflects Moody's expectations that the economic environment will remain challenging for the bank with regards to its considerable exposure to weakening Central and Eastern European markets and cyclical industries, including the automotive, aviation and real estate sectors. Consequently, the bank faces increasing pressure on its asset quality (exacerbated by some concentration risks in its loan portfolio), revenues and earnings. Moody's believes that BayernLB is unlikely to post a profit before 2010 or 2011. "The historically low profitability in BayernLB's key segments only provides a small buffer for the bank to absorb a likely increase in risk provisioning due to the continuing downturn in the global economy," said Dominique Nutolo, a Frankfurt-based Moody's Assistant Vice President and lead analyst for BayernLB. As positive factors, Moody's recognizes the bank's strengthened capital base as a result of an injection of EUR10 billion from the federal state of Bavaria and a second-loss EUR4.8 billion risk shield for the bank's EUR20 billion structured credit portfolio. The rating agency recognizes that the recent significant recapitalization measures provide the bank with a substantially larger capital buffer to absorb likely further losses in all asset classes. It also believes that the risk shield effectively reduces BayernLB's exposure to structured assets and reduces its earnings volatility. Moreover, Moody's acknowledges the liquidity support from the funding guarantees of the German financial market stabilization fund (the SoFFin), which amount to EUR15 billion. Moody's further expects that the bank will focus on de-risking its current business profile, which may have positive rating implications in the long run. However, targeted restructuring measures remain dependent on the approval of the European Commission, which, according to information received from BayernLB, will not be granted before July 2009. As a result, major uncertainties remain with regard to the bank's future business profile. Overall, Moody's believes that the D- BFSR better reflects the mixed profile of BayernLB, with its relatively low historical profitability and the challenges posed by the weak economic environment on the one hand, and its strengthened capital base along with the risk protection from further losses relating to its structured credit portfolio on the other. Senior Debt Ratings Benefit From Strong Sector, Shareholder and Systemic Support BayernLB's A1 long-term debt and deposit ratings continue to benefit from Moody's assessment of a high probability of co- operative, regional local government and systemic support. Moody's notes that the dependence of BayernLB's strong investment- grade ratings on outside support has increased, which is reflected by the increased (eight-notch) uplift from the Ba3 BCA. Downgrade of Hybrid Instruments Reflects Increased Risk Of Coupon Losses Moody's does not expect BayernLB to make any interest payments on its hybrid capital instruments for 2008 unless it is contractually obliged to do so, based on the rating agency's expectations regarding the bank's future profitability and the bank's earlier announcement on the matter. Moody's understands that this was a European Commission condition for approving state aid provided by the federal state of Bavaria. Accordingly, Moody's took these rating actions: 1) Moody's downgraded BayernLB's Upper Tier 2 "Genussscheine" Series 11 due at the end of 2010 to Caa1 from Aa3. The downgrade reflected Moody's view of the relatively high likelihood of three missed coupons. BayernLB has already announced that it will not pay coupons for 2008 due to insufficient distributable profits. While coupon payments are cumulative, Moody's does not expect a deferred payment of those coupons as it considers a return to profitability before the end of 2010 as unlikely. 2) The "Genussscheine" Series 12 due at the end of 2019 were downgraded to B2 from Aa3 as a result of the increased likelihood of three coupon losses. The downgrade was less severe than that applied to the Series 11 "Genussscheine" because of the fact that the instrument only matures in 2019 and therefore that payment of the cumulative deferred coupons in the future is more likely. 3) Moody's also downgraded the rated Tier 1 securities issued by BayernLB Capital Trust I to Caa1 from A1. The downgrade reflected the increased likelihood of two coupon losses. Moody's understands that the distributable profit trigger for coupon payments was breached in 2008. However, Moody's understands that the instrument's coupon is being served for 2008 given the contractual obligation to pay in the event of a subsidiary -- in this case Landesbank Saar -- declaring a payment on a parity or junior ranking security (dividend pusher). Rating Impact on Subsidiaries 1) Landesbank Saar's D+ BFSR was placed on review for possible downgrade reflecting concerns about the bank's profitability and increased risks inherent in its SME loan portfolio against the deepening recession in Germany. The bank's debt and deposit ratings were downgraded to A1 from Aa2 as a consequence of the rating downgrade of BayernLB. The support assumptions for the bank were not changed and remain in the "very high" bucket. Moody's believes that at this stage BayernLB's restructuring plans do not affect the expected support for Landesbank Saar from its parent. The outlook on the long-term ratings is stable, reflecting Moody's expectation that any downgrade of the bank's BFSR would likely be mild and would not adversely affect the long-term ratings. 2) Hypo Group Alpe Adria's D- BFSR was placed on review for possible downgrade reflecting the rating agency's concerns about the bank's profitability and increased risks inherent in its exposure to the Eastern European markets. The debt and deposit ratings of HGAA were downgraded to Baa1 from A2. The rating for the subordinated liabilities was downgraded to Baa2 from A3. The short-term rating was downgraded to Prime-2 from Prime-1. The Aa2 rating for debt backed by the Austrian federal state of Carinthia (a 12.4% shareholder) was affirmed with its stable outlook. The downgrades reflect changes in the support assumptions. Moody's includes a high probability of support from HGAA's parent, BayernLB, in its assessment, in the light of a capital injection from BayernLB of EUR700 million. Furthermore, the rating agency believes that, at this stage, BayernLB's restructuring plans are unlikely to affect the probability of support for HGAA from its parent. However, Moody's has lowered the probability of regional and local government and systemic support for the bank and, notably, the federal state of Carinthia did not participate in the capital increase. Nevertheless, overall HGAA remains in the high support category. HGAA's debt and deposit ratings remain on review for further possible downgrade due to the review of its D- BFSR. Moody's downgraded the ratings on the hybrid securities (Tier 1 instruments) issued by HGAA's subsidiaries, Hypo Alpe Adria (Jersey) Ltd and Hypo Alpe Adria (Jersey) II Ltd, to Caa2 from Baa2 as a result of the rating agency's assumption of four coupon losses for these non-cumulative perpetual instruments. HGAA has announced that the instruments will not pay a coupon for 2008. The outlook on the rating of the hybrid securities is stable as these ratings are based on Moody's expected loss calculation. 3) This press release does not cover these subsidiaries: MKB Bank Rt (Hungary) and MKB Union Bank AD (Bulgaria) as these entities will be covered in a separate press release. The ratings for covered bonds of BayernLB are also not covered by this press release. Moody's previous rating action on BayernLB was on 2 December 2008, when the bank's ratings were placed on review for possible downgrade. Based in Munich, Germany, BayernLB reported 2008 net losses of EUR5.1 billion and total assets of EUR422 billion at the end of the year. COMMERZBANK AG: Fitch Junks Ratings on Various Hybrid Instruments ----------------------------------------------------------------- Fitch Ratings has downgraded several hybrid capital instruments issued by Commerzbank AG (rated 'A+'/Stable) and its subsidiary EUROHYPO AG (rated 'A'/Rating Watch Negative) to 'CCC' from 'B+'. All ratings remain on Rating Watch Negative. A rating breakdown of the hybrid capital instruments is provided at the end of this comment. The rating actions follow Fitch's assessment of the recent completion of a European Commission review to consider the injection of EUR10bn into Commerzbank by Germany's Financial Market Stabilization Fund. The EC has approved the injection, subject to certain conditions. In light of this decision, both Commerzbank and EUROHYPO will only pay their coupons on hybrid capital instruments if sufficient distributable profit is available without the reversal of accruals or special reserves according to section 340g of the German Commercial Code for the financial year 2009 and 2010. The downgrade of the hybrid capital instruments reflects Fitch's assumption that the likelihood of accounting losses for the financial year ending 31 December 2009, according to German accounting principles, has risen materially at Commerzbank and EUROHYPO with the severe economic downturn and anticipated restructuring charges being the key risk factors to financial performance. As such, the possibility of a coupon deferral has risen materially as Fitch believes that the banks' financial flexibility will be limited in the foreseeable future. Fitch understands that any coupon payments on Dresdner Funding Trust I-IV are linked to capital triggers rather than profit triggers. In addition, the agency notes that these funding trusts will become parity instruments with existing hybrid capital instruments issued by Commerzbank Capital Funding Trust I-III and that Commerzbank has stated its intention to make payments on those hybrid capital instruments where it is contractually obliged to do so. However, given the remaining uncertainty about the positions taken by the domestic authorities on the deferral of interest payments with respect to institutions in receipt of state support and pending legislation, in Fitch's view, the bank's flexibility to pay the coupon on the funding trust could be materially limited. The rating actions with respect to the hybrid capital instruments are: -- Commerzbank Capital Funding Trust I/II, Delaware (US) downgraded to 'CCC' from 'B+'; remain on RWN -- Dresdner Funding Trust I-IV downgraded to 'CCC' from 'B+'; remain on RWN -- EUROHYPO Capital Funding Trust I/II downgraded to 'CCC' from 'B+'; remain on RWN COMMLOC GMBH: Claims Registration Period Ends June 5 ---------------------------------------------------- Creditors of Comdata CommLoc GmbH have until June 5, 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 June 30, 2009, at which time the insolvency manager will present his first report. The meeting of creditors will be held at: The District Court of Duesseldorf Meeting Hall A 341 Fourth Floor Muehlenstrasse 34 40213 Duesseldorf 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: Georg Kreplin Breite Strasse 27 40213 Duesseldorf Germany The court opened bankruptcy proceedings against the company on May 4, 2009. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: CommLoc GmbH Attn: Harald Sawaryn, Manager Bismarckstrasse 98 40210 Duesseldorf Germany DIMEX GMBH: Claims Registration Period Ends May 29 -------------------------------------------------- Creditors of Dimex GmbH have until May 29, 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 June 30, 2009, at which time the insolvency manager will present his first report. The meeting of creditors will be held at: The District Court of Tuebingen Room 1.01 Schulberg 14 72074 Tuebingen 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: Gerhard Walter Beim Kupferhammer 5/4 72070 Tuebingen Germany Tel: 07071/945661 Fax: 07071/945668 The court opened bankruptcy proceedings against the company on May 1, 2009. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: Dimex GmbH Daimlerstrasse 21 72147 Nehren Germany Attn: Sven Goebel, Manager Buchholzstrasse 45 06618 Naumburg Germany E-M-S SALES: Claims Registration Period Ends July 3 --------------------------------------------------- Creditors of E-M-S sales GmbH The DVD Company have until July 3, 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 July 24, 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. Christoph Schulte-Kaubruegger Koenigswall 21 44137 Dortmund Germany The court opened bankruptcy proceedings against the company on May 1, 2009. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: E-M-S sales GmbH The DVD Company Attn: Werner Wirsing-Luke, Manager Schleefstr. 3 44287 Dortmund Germany EDSCHA BETÄTIGUNGSSYSTEME: Claims Registration Ends May 29 ---------------------------------------------------------- Creditors of Edscha Betatigungssysteme GmbH have until May 29, 2009, to register their claims with court-appointed insolvency manager. Creditors and other interested parties are encouraged to attend the meeting at 10:08 a.m. on June 30, 2009, at which time the insolvency manager will present his first report. The meeting of creditors will be held at: The District Court of Wuppertal Meeting Room A234 Isle 2 42103 Wuppertal Germany Claims set out in the insolvency manager's report will be verified by the court during this meeting. Creditors may also constitute a creditors' committee or opt to appoint a new insolvency manager. The insolvency manager can be reached at: Dr. Joerg Nerlich Laurentiusstr. 21 – 23 42103 Wuppertal Germany Tel: 0202/40 86 150 Fax: 02024086159 The court opened bankruptcy proceedings against the company on May 1, 2009. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: Edscha Betatigungssysteme GmbH Attn: Dr. Manfred Puhlmann, Manager Hohenhagener St. 26-28 42855 Remscheid Germany ELITE BUSINESS: Claims Registration Period Ends June 5 ------------------------------------------------------ Creditors of Elite Business Solutions GmbH have until June 5, 2009, to register their claims with court-appointed insolvency manager. Creditors and other interested parties are encouraged to attend the meeting at 09:35 a.m. on July 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 Wuppertal Meeting Room A234 Isle 2 42103 Wuppertal Germany Claims set out in the insolvency manager's report will be verified by the court during this meeting. Creditors may also constitute a creditors' committee or opt to appoint a new insolvency manager. The insolvency manager can be reached at: Dr. Dietmar Penzlin Rathausstrasse 2 20095 Hamburg Germany The court opened bankruptcy proceedings against the company on April 30, 2009. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: Elite Business Solutions GmbH Attm: Sardar Muhammad Zaigham-Ul-Naeem Khan, Manager Achtern Born 66 22549 Hamburg Germany GENERAL MOTORS: Hesse Says Gov't Trust for Opel is Too Expensive ---------------------------------------------------------------- Bloomberg News reports an official at the German state of Hesse said the state would oppose as too expensive a federal proposal for a temporary takeover of General Motors Corp.'s Adam Opel GmbH unit if the parent company files for bankruptcy. Hesse, home to Opel's headquarters city of Russelsheim, may be ready to guarantee short-term "bridging" loans rather than co- managing the division in a trust, Deputy Prime Minister Joerg-Uwe Hahn told Bloomberg News in a telephone interview from his office in the state capital of Wiesbaden. "State and federally backed loan guarantees are conceivable to create a financial bridge for Opel if GM files for insolvency, but we can't become its trustees," Bloomberg News quoted Minister Hahn as saying. "The scope of such guarantees must be narrow and temporary." Citing Bloomberg News, the Troubled Company Reporter-Europe on May 13, 2009, reported that a spokesman for the Economy Ministry in Berlin said Germany may consider government loan guarantees for Opel if GM files for bankruptcy and a deal with an investor to take over the German unit is "close at hand". Under the possible scenario envisaged by Economy Minister Karl-Theodor zu Guttenberg, a private trust would take over Opel from GM, Berlin's Economy Ministry spokesman Felix Probst told Bloomberg News in a telephone interview. "In such a fiduciary solution, one might offer government guarantees," Mr. Probst said. On May 6, 2009, the Troubled Company Reporter, citing The Wall Street Journal, reported that a senior German official said Opel might close one of its plants if it merges with Fiat SpA. According to the WSJ, Fiat CEO Sergio Marchionne met with German officials Monday last week to present his plan for merging the company with GM's European operations, which include Opel and British automaker Vauxhall. Citing Mr. zu Guttenberg, WSJ said Mr. Marchionne proposed that Opel should keep three of its four plants in Germany. Mr. zu Guttenberg said that the plan left in doubt the fate of Opel's engine plant in Kaiserslautern, according to WSJ. Mr. zu Guttenberg said Mr. Marchionne assured that potential layoffs in Germany won't be "too dramatic," WSJ noted. Mr. Marchionne, according to WSJ, hasn't said whether he intends to eliminate jobs in Europe. Automakers need to rein in production costs to survive, WSJ said, citing Mr. Marchionne. WSJ noted that Mr. Marchionne would have to wrest concessions from labor unions in Italy and Germany, which both have laws making it difficult to lay off workers. About General Motors Corp. 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 by the Troubled Company Reporter, GM reported net loss of US$6.0 billion, including special items, in the first quarter of 2009. This compares with a reported net loss of US$3.3 billion in the year-ago quarter. Excluding special items, the company reported an adjusted net loss of US$5.9 billion in the first quarter of 2009 compared to an adjusted net loss of US$381 million in the first quarter of 2008. As of March 31, 2009, GM had US$82.2 billion in total assets and US$$172.8 billion in total liabilities, resulting in US$90.5 billion in stockholders' deficit. On April 27, General Motors Corp. presented the United States Department of Treasury with an updated plan as required by the loan agreement signed by GM and the U.S. Treasury on December 31, 2008. The plan addresses the key restructuring targets required by the loan agreement, including a number of the critical elements of the plan that was submitted to the U.S. government on December 2, 2008. Among these are: U.S. market competitiveness; fuel economy and emissions; competitive labor cost; and restructuring of the company's unsecured debt. It also includes a timeline for repayment of the Federal loans, and an analysis of the company's positive net present value. The plan details the future reduction of GM's vehicle brands and nameplates in the U.S., further consolidation in its workforce and dealer network, accelerated capacity actions and enhanced manufacturing competitiveness, while maintaining GM's strong commitment to high-quality, fuel-efficient vehicles and advanced propulsion technologies. GM also launched a bond exchange offer for roughlyUS$27 billion of unsecured public debt. If successful, the bond exchange would result in the conversion of a large majority of this debt to equity. GM is also in talks with the UAW to modify the terms of the Voluntary Employee Benefit Association, and with the U.S. Treasury regarding possible conversion of its debt to equity. The current bond exchange offer is conditioned on the converting to equity of at least 50% of GM's outstanding U.S. Treasury debt at June 1, 2009, and at least 50% of GM's future financial obligations to the new VEBA. GM expects a debt reduction of at least US$20 billion between the two actions. In total, the U.S. Treasury debt conversion, VEBA modification and bond exchange could result in at least US$44 billion in debt reduction. GM filed with the Securities and Exchange Commission a registration statement related to its exchange offer. The filing incorporates the revised Viability Plan. A full-text copy of the filing is available at http://ResearchArchives.com/t/s?3c09 A full-text copy of GM's viability plan presented in February 2009 is available at http://researcharchives.com/t/s?39a4 Going Concern Doubt Deloitte & Touche LLP, has said there is substantial doubt about GM's ability to continue as a going concern after reviewing GM's 2008 financial report. Deloitte cited the Company's recurring losses from operations, stockholders' deficit and failure to generate sufficient cash flow to meet the Company's obligations and sustain the its operations. It said GM's future is dependent on the Company's ability to execute the Company's Viability Plan successfully or otherwise address these matters. If the Company fails to do so for any reason, the Company would not be able to continue as a going concern and could potentially be forced to seek relief through a filing under the U.S. Bankruptcy Code. Standard & Poor's Ratings Services on April 10 lowered its issue- level rating on GM's US$4.5 billion senior secured revolving credit facility to 'CCC-' (one notch above the 'CC' corporate credit rating on the company) from 'CCC'. It revised the recovery rating on this facility to '2' from '1', indicating its view that lenders can expect substantial (70% to 90%) recovery in the event of a payment default. The corporate credit rating remains unchanged, at 'CC', reflecting its view of the likelihood that GM will default -- through either a bankruptcy or a distressed debt exchange. Moody's Investors Service said February 18 that the risk of a bankruptcy filing by GM and Chrysler remains high. The last rating action on GM and Chrysler was a downgrade of their Corporate Family Ratings to Ca on December 3, 2008. GILDEMEISTER AG: Moody's Reviews 'Ba2' Rating for Downgrade ----------------------------------------------------------- Moody's Investors Service has placed Gildemeister's Ba2 Corporate Family Rating and Probability of Default Rating under review for possible downgrade. The rating review was prompted by a severe cyclical contraction of order intakes for machine tools combined with lower revenues for spare parts and maintenance services, which could depress the company's revenues and profitability, cash generation ability and liquidity cushion over the next few quarters beyond the requirements for the current rating category. While Gildemeister has previously been strongly positioned in the Ba2 rating category on the back of strong performance in the recent upturn with some headroom for a typical cyclical contraction, the magnitude and the speed of the current cyclical contraction, as evidenced by the significant reduction in order intake by 60% in the first quarter of 2009 are unprecedented and add downwards pressure on the rating. The review therefore will focus on: 1) Prospects for medium term machine tools order volumes, pricing and the stability of the services segment to offset the impact of lower machine tool sales 2) Cost structure flexibility and additional cost base adjustments to mitigate the impact of upcoming revenue contraction on operating performance 3) The company's ability to continue positive free cash flow generation 4) Sufficiency of the company's liquidity cushion to withstand an extended period of business contraction including the ability to preserve a sufficient headroom under financial covenants. Moody's expects the review to be concluded within the next weeks. Moody's recognizes that reduced order intake is a direct consequence of the depressed global macroeconomic environment, as Gildemeister's end-customers in most industries are significantly scaling back production and investments due to weaker business prospects. Given the strong correlation between Gildemeister's operating performance and the global macroeconomic climate, Moody's expects that Gildemeister may be challenged by continued low order intake over the next few quarters, as the rating agency does not anticipate a material recovery of global growth according to Moody's Global Macro Risk Scenarios for 2009 and 2010. As a consequence of significant top-line revenue pressure, Moody's believes Gildemeister will be challenged to adequately and timely adjust its cost base over the next few quarters in line with lower volumes to preserve sufficient capacity utilization rates. Moody's also notes that the current economic downturn has diminished funding options for investments in capital-intensive machinery, like that manufactured by Gildemeister. As a consequence of this decreased funding availability, the absolute amount of payments on account, which typically are an important funding source for heavy manufacturing companies, could be lower going forward and increase Gildemeister's underlying funding needs over the near term. Moody's continues to recognize Gildemeister's market position as a leading manufacturer of metal-cutting machine tools, combined with its strong technological expertise with the expectation of an improved market position and improving cost position as a result of the cooperation with its competitor Mori Seiki. The rating does favorably consider the company's solid segmental diversification and product offering as well as its broad customer diversification. The company has generated strong operating performance and cash generation in the recent cyclical upturn, evidenced by RCF to Net debt of around 35% in 2008 and positive free cash flow since 2006. Moody's believes Gildemeister's ratings remain constrained by the potential erosion of these credit metrics and its liquidity profile amid the challenging market environment, also given the company's limited absolute scale and geographic concentration in Europe, which exposes its operating performance to the cyclicality of this region. On Review for Possible Downgrade: Issuer: Gildemeister AG -- Probability of Default Rating, Placed on Review for Possible Downgrade, currently Ba2 -- Corporate Family Rating, Placed on Review for Possible Downgrade, currently Ba2 Outlook Actions: Issuer: Gildemeister AG -- Outlook, Changed To Rating Under Review From Stable The last rating action was implemented on December 10, 2007, when Moody's upgraded Gildemeister's ratings to Ba2 from Ba3 with a stable outlook. Headquartered in Bielefeld, Germany, Gildemeister is a leading global manufacturer of metal-cutting machine tools (both milling machines and lathes) and a provider of maintenance services. In 2008, Gildemeister generated revenues of EUR1.9 billion. LANDESBANK SAAR: Moody's Reviews 'D+' Bank Fin'l Strength Rating ---------------------------------------------------------------- Moody's Investors Service placed on review for possible downgrade the D+ bank financial strength rating of Landesbank Saar, reflecting the rating agency's concerns about the bank's profitability and increased risks inherent in its loan portfolio in the context of the deepening recession in Germany. The bank's debt and deposit ratings were downgraded to A1 from Aa2 as a consequence of the rating downgrade of its parent, Bayerische Landesbank. The Prime-1 short term rating was affirmed. The support assumptions incorporated into SaarLB's debt and deposit ratings have not been changed and Moody's still assumes a very high probability of parental support. The rating agency believes that, at this stage, BayernLB's restructuring plans do not affect SaarLB's ratings. The outlook on the long-term ratings is stable, reflecting Moody's expectation that any downgrade of the bank's BFSR would likely be mild and would not adversely affect the long-term ratings. Moody's previous rating action on SaarLB was implemented on December 2, 2008 when, following a rating action on BayernLB, Moody's placed SaarLB's Aa2 debt and deposit ratings on review for possible downgrade. Its D+ BSFR and Prime-1 short-term rating were affirmed. Based in Saarbruecken, Germany, SaarLB reported 2008 net losses of EUR81 million and total assets of EUR20.6 billion at the end of the year. SCHAEFFLER KG: Aims to Save US$342 Million in Labor Costs --------------------------------------------------------- Chris Reiter at Bloomberg News reports that Schaeffler KG intends to save EUR250 million (US$342 million) in labor costs by trimming work hours and wages, offering buyouts, and cutting bonus payments while attempting to limit firings. The reduction would entail eliminating about 4,500 jobs, or 6.8 percent of the workforce, if carried out solely by job cuts, the company said in a statement obtained by Bloomberg News. "This decision comes in reaction to sales decreases as a result of the economic crisis since late fall of last year and reduced sales expectations for the next few years," the report quoted the company as saying in the statement. Schaeffler, the report relates, anticipates that 2009 sales will fall to EUR7.5 billion, or 15 percent below 2007 revenue. As reported in the Troubled Company Reporter-Europe on April 9, 2009, Bloomberg News said Schaeffler agreed with lenders on a EUR1 billion loan, winning time to restructure and seek extra funds from the German government. Bloomberg News said the credit line may help Schaeffler persuade Chancellor Angela Merkel's government, which said Feb. 10 that it would reopen aid negotiations if the company agrees on a reorganization plan with its lenders. According to the report, Schaeffler's owners, Maria- Elisabeth Schaeffler and her son Georg, are fighting a breakup and the family has said it’s prepared to give up a large stake in the company. As reported in the Troubled Company Reporter-Europe on Feb. 12, 2009, Bloomberg News said Schaeffler's lenders may be forced to swap debt for shares after the company failed to attract new money to cut borrowings. According to Bloomberg News, the Schaeffler family have offered to sell a stake in the company after an unsuccessful search for other investors. The company, which is now struggling to pay EUR11 billion (US$14 billion) in debt from its purchase of a 49.9% stake in Continental AG on January 8, 2009, has called on the German government for aid. According to Bloomberg News, Schaeffler's previous attempt for government aid was ruled out by Ms. Merkel. According to Bloomberg News, Schaeffler's troubles have piled up since its July 15 hostile bid for Continental, a company three times its size. According to the news agency, Schaeffler expected that derivatives contracts and what was then a low-ball bid would secure a stake of 30 percent to 50 percent. Instead, 82.4 percent of Continental's capital was tendered, adding to a 7.8 percent holding, as investors sold amid collapsing markets, the news agency said. About Schaeffler KG Germany-based Schaeffler KG a.k.a Schaeffler Group -- http://www.schaeffler.com/-- manufactures a vast array of bearings, from cylindrical roller bearings to needle roller bearings, used in the aerospace, automotive, machine tool, and semiconductor industries. Its three main brands are INA, FAG, and LuK, and though the entities are treated separately within the company, they also work collaboratively on specific product development. The company is owned by Maria-Elisabeth Schaeffler, the widow of a co-founder, and her son, Georg F. W. Schaeffler. TUI AG: Posts EUR415 Mln Group Profit in First Quarter 2009 ----------------------------------------------------------- Following the sale of a majority stake in Hapag-Lloyd AG, TUI AG posted a substantial Group profit in the first quarter of 2009, using it to reduce Group debt. While a seasonally typical negative Group result of around 279 million euro was reported in the previous year, a Group profit of around 415 million euro was generated this year due to the book gain of 990 million euro resulting from the divestment of shipping. At the same time, net debt was reduced from 4.1 billion euro as at December 31, 2008 to currently 2.6 billion euro. Basic earnings per share rose from - 0.69 euro to 2.18 euro. For the year as a whole, TUI expects its Group result to be positive and improve substantially year-on- year. With the tourism business expected to be stable, this will be driven by lower integration expenses in tourism and the realization of the book gain from the sale of container shipping. The operative development of the tourism business matched expectations in the first quarter of 2009. Operating earnings were down year-on-year. This was due to the Easter business not being included in quarterly figures this year and special adverse effects within TUI Travel, in particular in France and Scandinavia. Due to the planned capacity cuts in TUI Travel, turnover by tourism fell by almost 15 per cent to around 3.1 billion euro (previous year: 3.6 billion euro). Underlying EBITA by the tourism division declined by 25 per cent to - 276 million euro (previous year: - 221 million euro). The development of the shipping division was characterised by the worsening effects of the global economic crisis, as expected. Turnover by the division decreased by around 23 per cent to around 1.1 billion euro (previous year: 1.4 billion euro). Operating earnings fell from around 18 million euro in the first quarter of 2008 to currently - 222 million euro. Detailed development of tourism TUI Travel Turnover by TUI Travel declined by almost 16 per cent year-on-year to 2.9 billion euro (previous year: 3.5 billion euro) in the first quarter. The decrease was attributable to the capacity reductions in the Mainstream segment and the year-on-year weakening of the exchange rate of the British pound sterling against the euro. The development also reflects the Easter effect. In the current financial year the strong-margin and high-turnover Easter business falls into the second quarter. Operating earnings were seasonally negative in the first quarter. Declining by around 20 per cent, underlying EBITA amounted to - 289 million euro (previous year: - 240 million euro). Apart from the Easter business not falling into the first quarter, the reasons for the decline in earnings included above all the political unrest impacting the business in France and Scandinavia. Business in France was adversely affected by political unrest in Madagascar and the French West Indies. The Group's Scandinavian tour operators were affected by the unrest in Thailand. Thanks to active capacity management, the expected decline in demand caused by the economic crisis was cushioned. Both pricing and load factors of the contracted capacity were maintained at high levels despite a softening in bookings. In the first quarter, TUI Travel had to carry adjustments for special one-off effects worth a total of 75 million euro. TUI Hotels & Resorts The Group's hotel sector achieved a year-on-year increase in turnover of 2 per cent to around 96 million euro (previous year: 94 million euro) in the first quarter. Operating earnings showed an almost stable development and accounted for 12.7 million euro (previous year: 13.2 million euro). Average capacity rose by 5.6 per cent across all hotel brands. Average revenues per bednight grew by 6 per cent. Cruises At 58 million euro, the cruises sector reported a stable development of turnover in the first quarter, matching 2008 levels. The almost balanced operating earnings of - 0.1 million euro (previous year: 6 million euro) were impacted by proportionate start-up costs for TUI Cruises and the termination of an Antarctic voyage of a Hapag-Lloyd Kreuzfahrten cruise ship. Detailed development of container shipping (discontinued operation) Container shipping, the majority stake in which was sold at the end of March, recorded a 23 per cent decline in turnover to around 1.1 billion euro in the first quarter (previous year: 1.4 billion euro). Underlying earnings by the sector fell by 240 million euro to - 222 million euro (previous year: 18 million euro). The decrease in turnover and earnings is attributable to a 15 per cent fall in transport volumes and a 14 per cent decline in freight rate levels. On the other hand, the US dollar exchange rate rose by 13 per cent against the euro. Outlook For tourism, its core business, TUI expects an overall decline in turnover due to a fall in business volumes and a persistently weak exchange rate of the British pound sterling. Operating earnings by tourism are expected to show an overall stable development. TUI Travel's current trading for the summer season is developing in line with expectations. Total customers for the summer season are 15 per cent down year-on-year, with booked turnover 13 per cent down. At the same time, TUI Travel has cut its capacity by 14 per cent. This active capacity management proved its worth in the winter season and is expected to contribute towards achieving the pricing and load factor targets for the summer, too. The special one-off effects arising in the first quarter will be followed by sustainable integration synergies as the year progresses. Provided the summer business will be good, overall earnings are therefore expected to improve slightly. As before, earnings by TUI Hotels & Resorts are expected to show a stable development. A final assessment of the extent to which the effects of the swine flu will impact TUI Travel and the hotel business cannot yet be provided. Earnings by the cruises sector will be clearly down year-on-year due to the proportionate start- up costs for TUI Cruises. Container shipping is expected to record a marked decline in earnings due to the global economic crisis. The at equity result of Hapag-Lloyd to be included in consolidated financial statements as of the second quarter will therefore be negative. Nevertheless, the overall Group result for the financial year 2009 is expected to be positive and improve considerably year-on-year. This will be due to the lower integration expenses in tourism and the book profit from the sale of container shipping. TUI AG -- http://www.tui-group.com/en/-- is a Germany-based company mainly engaged in the tourism sector, focusing on the markets of Central, Northern and Western Europe. TUI owns a network of travel agencies and tour operators, including air tours, Thomson, First Choice and TUI Deutschland. It also operates several airlines, including Corsairfly, Thomsonfly and First Choice Airways, among others. The Company is structured into three segments: TUI Travel, TUI Hotels and Resorts, and Cruises. TUI Travel comprises the Company's distribution, tour operating, airline and incoming activities and services over 30 million customers in 180 countries. The TUI Hotels and Resorts division offers a portfolio of 238 hotels, located in Spain, Greece, Egypt, France, Turkey, Tunisia, the Balearics and the Caribbean, among others. The Cruises sector comprises Hapag-Lloyd Kreuzfahrten GmbH and TUI Cruises which provide luxury cruises, and cruises within the German-speaking countries, respectively. * * * TUI AG currently carries Moody's Investors Service's 'B2' long- term corporate family rating, 'B3' senior secured rating, 'Caa1' junior subordinated rating and 'B2' probability of default rating with negative outlook. ============= I C E L A N D ============= STRAUMUR-BURDARAS: To Take Over Gudmundsson's West Ham United ------------------------------------------------------------- Owen Gibson at The Guardian reported Bjorgolfur Gudmundsson's creditors, led by the Icelandic bank Straumur-Burdaras, is expected to take control of his football club West Ham United at the end of the season. According to the report, the personal liabilities of Mr. Gudmundsson, who holds a 95% stake in West Ham, stand at GBP301 million. The report relates the club's outgoing owner admitted that he has no idea whether he is bankrupt or even if he will be able to keep his home. The report discloses three-quarters of the assets he had at the end of last year were tied up in Landsbanki and Straumur, which have both been taken over by financial regulators. Straumur, itself taken over by Iceland's Financial Supervisory Authority under new laws introduced by the government last year when the country's banking system collapsed, and other creditors will appoint a new board but are expected to retain the existing executive team and will expect the club to be largely self- financing, the report states. The report says they are likely to commit to running it on a cost neutral basis until the economic cycle turns and they can make a sale. The report recalls Mr. Gudmundsson bought his stake in West Ham in 2006 for GBP85 million and assumed GBP22 million of debt. Straumur-Burdaras Fjarfestingabanki hf a.k.a Straumur-Burdaras Investment Bank hf --- http://www.straumur.net/--- is an Iceland- based investment bank. It provides such services as debt financing, corporate advisory and capital market services. The Bank's Corporate Finance team identifies, structures and executes public and private market transactions, while the Debt Finance team originates and underwrites the required debt financing. In addition, it acts as a co-investor in selected projects. The Capital Markets team provides securities brokerage services for companies, institutional investors, mutual funds, and high-net- worth individuals. Capital Markets also manages new share offerings and bond issuance for companies and institutions. The Bank operates primarily in Northern and Central Europe, in such countries as Iceland, Denmark, Sweden, Finland, the Czech Republic, Poland, Slovakia, Romania and the United Kingdom. It has eight wholly owned subsidiaries in Iceland, Luxembourg, the Netherlands and Finland. * * * As reported in the Troubled Company Reporter-Europe on March 11, 2009, Fitch Ratings downgraded Straumur-Burdaras Investment Bank's Long-term Issuer Default rating to 'D' from 'B' and Short-term IDR to 'D' from 'B' and removed them from Rating Watch Negative. ============= I R E L A N D ============= EIRCOM LTD: Gov't Intervention to Protect Future Sought ------------------------------------------------------- Breakingnews.ie reports that the Communication Workers Union is calling for the Irish government's intervention to protect the long-term future of Eircom. The report relates the union said the company is part of Ireland's national infrastructure and the government should intervene for the good of the economy. According to the report, the company, which is struggling with debts of EUR3.8 billion, needs to cut costs by around EUR130 million in 2010 and 2011 in order to remain viable. Cost Reductions finfacts.ie reports on Tuesday Eircom has reached an agreeement with union representatives on "stage one of the company's restructuring program," providing for 1,200 job cuts and voluntary pay reductions of between 5% and 10%. The Eircom agreement, finfact.ie says, includes a group wide freeze on base pay for two years until June 2011, reductions in the order of 25% for certain staff allowances such as in subsistence and mileage rates and the elimination of other traditional arrangements. The company's stage two cost reductions have a target completion date of July 1, 2009, finfacts.ie notes. Headquartered in Dublin, Ireland, eircom Limited -- http://www.eircom.ie-- is Ireland's leading fixed-line communications company. It provides domestic and international voice and data communications for both the retail and wholesale carrier markets. eircom also offers GSM-based wireless service through its Meteor Mobile Communications subsidiary. Its other offerings include Internet access, managed data networking services, directory assistance, customer premise equipment, public payphones, and domestic alarm systems and monitoring services. EMPYREAN FINANCE: Moody's Cuts Ratings on 6 Classes of Notes to Ca ------------------------------------------------------------------ Moody's Investors Service has downgraded its ratings of eight classes of CDO notes issued by Empyrean Finance. The transaction is a static synthetic CDO referencing a pool of 235 corporate and sovereign entities, with approximately 14% of the pool consisting of financial services entities. According to Moody's, 12% of the reference pool suffered a downward credit rating migration greater than had been anticipated by Moody's forward looking measures, leading to the rating actions. Moody's initially analyzed and continues to monitor this transaction using primarily the methodology and its supplements for corporate synthetic CDOs as described in Moody's Special Reports and press releases below: -- Moody's Approach to Rating Corporate Collateralized Synthetic Obligations (April 2009) The rating action is: Empyrean Finance (1) The AUD6,000,000 Class A-1A7 Floating Rate Secured Portfolio Credit-Linked Notes due 2013 -- Current Rating: Caa3 -- Prior Rating: B3 -- Prior Rating Date: 10 March 2009, downgraded to B3 from Baa1 (2) The EUR20,000,000 Class A-1E7 Floating Rate Secured Portfolio Credit-Linked Notes due 2013 -- Current Rating: Caa3 -- Prior Rating: B2 -- Prior Rating Date: 10 March 2009, downgraded to B2 from Baa1 (3) The AUD24,000,000 B-1A7 Floating Rate Secured Portfolio Credit-Linked Notes due 2013 -- Current Rating: Ca -- Prior Rating: Caa3 -- Prior Rating Date: 10 March 2009, downgraded to Caa3 from Ba2 (4) The US$10,000,000 Class B-1bU7 Senior Floating Rate Secured Portfolio Credit-Linked Notes due 2013 -- Current Rating: Ca -- Prior Rating: Caa3 -- Prior Rating Date: 10 March 2009, downgraded to Caa3 from Ba2 (5) The US$7,500,000 Class B-1U7 Senior Floating Rate Secured Portfolio Credit-Linked Notes due 2013 -- Current Rating: Ca -- Prior Rating: Caa3 -- Prior Rating Date: 10 March 2009, downgraded to Caa3 from Ba2 (6) The EUR11,500,000 B-2E7 Fixed Rate Secured Portfolio Credit- Linked Notes due 2013 -- Current Rating: Ca -- Prior Rating: Caa3 -- Prior Rating Date: 10 March 2009, downgraded to Caa3 from Ba2 7) The GBP 139,200,000 Class B-2G7 Fixed Rate Secured Portfolio Credit-Linked Notes due 2013 -- Current Rating: Ca -- Prior Rating: Caa3 -- Prior Rating Date: 10 March 2009, downgraded to Caa3 from Ba2 (8) US$5,000,000 Class B-2U7 Fixed Rate Secured Portfolio Credit- Linked Notes due 2013 -- Current Rating: Ca -- Prior Rating: Caa3 -- Prior Rating Date: 10 March 2009, downgraded to Caa3 from B3 MAGI FUNDING: S&P Withdraws 'BB' Credit Rating on Class K Notes --------------------------------------------------------------- Standard & Poor's Ratings Services removed from CreditWatch negative and then withdrew its credit rating on the class K combination notes issued by Magi Funding I PLC. In February 2008, the noteholder split the class K combination notes into their constituent parts—the class C notes and the subordinated notes. The class C notes are rated while the subordinated notes are not. S&P were notified of this split in March 2008 but due to an administrative error did not withdraw the rating on the class K notes. S&P has incorrectly maintained a rating on the class K notes since then. The error came to light as a result of us placing the class K notes on CreditWatch negative on May 7. The rating action corrects the error. Ratings List Ratings Removed From CreditWatch Negative And Withdrawn Magi Funding I PLC EUR300 Million Floating-Rate Notes Rating ------ Class To From ----- -- ---- K BB BB/Watch Neg NR BB NR - Not rated. ========= I T A L Y ========= SAFILO SPA: S&P Junks Long-Term Corporate Credit Rating ------------------------------------------------------- Standard & Poor's Ratings Services said that it lowered to 'CCC+' from 'B-' its long-term corporate credit rating on Italy-based eyewear manufacturer Safilo SpA. At the same time, S&P lowered to 'CCC' from 'CCC+' the issue rating on Safilo's EUR195 million 9.625% senior subordinated notes due 2013, issued by Safilo Capital International S.A. The recovery rating on the debt is unchanged at '5', indicating S&P's expectation of a modest (10%- 30%) recovery in the event of a payment default. All ratings remain on CreditWatch, where they were placed with negative implications on Feb. 13, 2009. The rating actions reflect Standard & Poor's view that the persistent downturn in discretionary consumer spending will continue to affect Safilo's operating performance and liquidity. "In particular, the CreditWatch placement relays our concern over near-term debt service: Safilo's free operating cash flow could be insufficient to cover current short-term debt maturities," said Standard & Poor's credit analyst Diego Festa. These include the payment of approximately EUR40 million of the amortizing Facility A of the senior bank loan due December 2011, as well as the roll-over of the uncommitted bilateral lines. In S&P's view, the combination of higher debt levels and ongoing pressure on profitability is considerably reducing headroom in Safilo's available cash resources, which mainly consist of the undrawn portion on the senior revolving credit facility due 2012. This means that Safilo will be relying on continued bank support to ensure an unimpeded flow of funding over the short term. "In addition, S&P understands that Only 3T SpA, the parent company that owns 39% of Safilo, is studying different initiatives to strengthen the capital structure of the group. The progress of any such initiatives has not been made public. At this stage, the uncertainty over the timing and terms of any transaction does not allow us to quantify the potential impact on Safilo's financial risk profile," continued Mr. Festa. According to Safilo's unaudited results, net sales in the first quarter of financial 2009 were down by 11.7% year on year, and EBITDA was down by 35.4%. The EBITDA margin fell 380 basis points to 10.5%. With revenues falling, Safilo's high fixed costs-- including those for marketing, staff, and operating leases--weigh heavily on profitability. In the same period, FOCF was negative at EUR42.8 million from negative EUR17.4 million in 2008. This fall in FOCF was the main cause of an increase in reported net debt to EUR617.7 million from EUR570.0 million on Dec. 31, 2008. On March 31, 2009, the annualized ratio of reported net debt to EBITDA was 5.6x. S&P expects to reassess the CreditWatch placement within the next three months, taking into account Safilo's progress in its negotiations with its banking group. In S&P's view, Safilo will need to maintain prudent financial policies and treasury management to adjust to the currently sluggish trading environment, and to conserve cash, to ease pressure on the ratings. The outcome of the CreditWatch status will depend on the level of success that Safilo achieves in the renegotiation of its funding. Any affirmative or positive rating action would require evidence that the company has secured the necessary funding to mitigate the current negative cash flow trends and ongoing pressure on liquidity. =================== K A Z A K H S T A N =================== DALI STROY: Creditors Must File Claims by June 12 ------------------------------------------------- LLP Dali Stroy has gone into liquidation. Creditors have until June 12, 2009, to submit proofs of claim to: Dostyk Ave. 188 Almaty Kazakhstan INVEST OIL : Creditors Must File Claims by June 12 -------------------------------------------------- LLP Invest Oil Service has gone into liquidation. Creditors have until June 12, 2009, to submit proofs of claim to: Evraziya ave. 71-20 Uralsk West Kazakhstan Kazakhstan KAZTEMIRTRANS: Moody's Keeps 'Ba1' Rating; Outlook Remains Stable ----------------------------------------------------------------- Moody's Investors Service took a number of rating actions on Kazakh Government-Related Issuers reflecting the downgrade of the Local Currency rating of the Government of Kazakhstan to Baa2 from Baa1 on May 12, 2009, and the change of outlook of the sovereign ratings to negative from stable. The various actions are: -- The ratings of KazMunaiGas NC, Kaztransgas, Intergas Central Asia and Kaztransoil are downgraded to Baa2 from Baa1. Their outlooks are changed to negative from stable; The rating of KazMunayGas E&P is unchanged at Baa2 but the outlook is changed to negative from stable. -- The rating of Food Contract Corporation is downgraded to Baa3 from Baa2. The outlook is changed to negative from stable. The downgrade reflects that despite high support providing substantial uplift from BCA (itself weakly positioned) Moody's think the rating cannot match that of the sovereign. -- The ratings of Kazakhstan Temir Zholy at Baa2, Kazakhstan Electricity Grid Operating Company at Baa2 and Kazpost at Baa3 are not affected but the outlooks are changed to negative from stable. -- The ratings of Kaztemirtrans at Ba1 and Kazatomprom at Baa3 are not affected by the action on the sovereign ratings. The outlooks of Kaztemirtrans and Kazatomprom remain stable. All Baseline Credit Assessments remain unchanged. The change of outlooks to negative reflects the fact that a downgrade of the sovereign rating would expectedly imply a downgrade of the GRI. The last rating actions on these issuers were: * On 24 May 2006 when Moody's upgraded Food Contract Corporation to Baa2 from Baa3 with a stable outlook * On 17 November 2006 when Moody's assigned a Baa1 rating with a stable outlook to Kaztransgas * On 28 November 2006 when Moody's upgraded Intergas Central Asia to Baa1 with a stable outlook * On 15 December 2006 when Moody's upgraded Kaztransoil to Baa1 with a stable outlook * On 3 May 2007 when Moody's assigned a Baa1 with stable outlook to KazMunaiGas NC * On 27 December 2007 when Moody's assigned a Baa2 with a stable outlook to KazMunaiGas Exploration and Production * On 4 February 2009 when Moody's assigned a Baa3 with stable outlook to Kazpost * On 27 February 2009 when Moody's downgraded KEGOC to Baa2 with a stable outlook * On 27 April 2009, when Moody's downgraded KTZ to Baa2 with a stable outlook. LADOS KAZALY: Creditors Must File Claims by June 12 --------------------------------------------------- Creditors of LLP Lados Kazaly have until June 12, 2009, to submit proofs of claim to: Shokai St. 20 Kyzylorda Kazakhstan The Specialized Inter-Regional Economic Court of Kyzylorda commenced bankruptcy proceedings against the company on Feb. 10, 2009, after finding it insolvent. The Court is located at: The Specialized Inter-Regional Economic Court of Kyzylorda region Aiteke bi St. 29 Kyzylorda Kazakhstan TASKYN LLP: Creditors Must File Claims by June 12 ------------------------------------------------- Creditors of LLP Firm Taskyn have until June 12, 2009, to submit proofs of claim to: The Specialized Inter-Regional Economic Court of Almaty Tauelsyzdyk Str. 75 Taldykorgan Almaty Kazakhstan The Specialized Inter-Regional Economic Court of Almaty commenced bankruptcy proceedings against the company on Dec. 12, 2008, after finding it insolvent. * S&P Affirms Low-B Ratings on Four Kazakh Govt-Related Entities ---------------------------------------------------------------- Standard & Poor's Ratings Services said that it had revised its outlooks on four Kazakh government-related entities to stable from negative. At the same time, all ratings on all four GREs were affirmed. The entities affected are: -- Kazakh Agrarian Credit Corp. -- Kazpost (JSC) -- Mortgage Guarantee Fund of Kazakhstan (JSC) -- KazAgroGarant The outlook revision follows Standard & Poor's revision of its outlook on the Republic of Kazakhstan (foreign currency BBB-/Stable/A-3; local currency BBB/Stable/A-3; Kazakhstan national scale 'kzAAA'). "The action reflects our view of the GREs as important tools of Kazakh government policy and their close ties to the government," said Standard & Poor's credit analyst Boris Kopeykin. Therefore, S&P expects a high probability of extraordinary support from the government to each of these entities in case of emergency. "We apply our top down approach when rating these entities, stepping down from the rating on the sovereign," said Mr. Kopeykin. The difference in a GREs importance and closeness to the government is reflected in the varying levels of notching down from the local currency sovereign rating, from two notches below the sovereign rating for KACC, to three notches for MGFK, KazAgroGarant, and Kazpost. Ratings List CreditWatch/Outlook Action; Ratings Affirmed Kazakh Agrarian Credit Corp. To From -- ---- Issuer credit rating BB+/Stable/B BB+/Negative/B Kazakhstan national scale rating kzAA- kzAA- Kazpost (JSC) To From -- ---- Issuer credit rating BB/Stable/-- BB/Negative/-- Kazakhstan national scale rating kzA+ kzA+ Mortgage Guarantee Fund of Kazakhstan (JSC) To From -- ---- Issuer credit rating BB/Stable/-- BB/Negative/-- Kazakhstan national scale rating kzA kzA KazAgroGarant To From -- ---- Issuer credit rating BB/Stable/B BB/Negative/B Kazakhstan national scale rating kzA kzA N.B.: This list does not include all ratings affected. =================== K Y R G Y Z S T A N =================== SOFIA TRADING: Creditors Must File Claims by June 5 --------------------------------------------------- LLC Sofia Trading Co has shut down. Creditors have until June 5, 2009, to submit proofs of claim to: Micro District Vostok-5, 28-31 Bishkek Kyrgyzstan ===================== N E T H E R L A N D S ===================== ING GROEP: Incurs US$1.08 Billion Loss in First-Quarter ------------------------------------------------------- Martijn van der Starre at Bloomberg News reports that ING Groep NV posted a third consecutive quarterly net loss of EUR793 million (US$1.08 billion) in the first-quarter 2009 because of equity writedowns, higher loan-loss provisions and reorganization costs. Loan-loss provisions rose to EUR772 million from EUR98 million, the report says. The company had a EUR1.54 billion profit a year earlier, ING said in a statement obtained by Bloomberg News. In the fourth quarter of 2008, ING incurred a net loss of EUR3.7 billion. In the third quarter of 2008, ING incurred a net loss of EUR478 million. According to Bloomberg News, ING plans to raise as much as EUR8 billion selling assets to boost capital and is cutting 7,000 jobs in a bid to reduce operating costs by EUR1 billion this year. Chief Executive Officer Jan Hommen, as cited in the report, said the company will dispose of as many as 15 businesses and expects the asset sales to free up about EUR4 billion in capital. Bloomberg News recalls ING received a EUR10 billion government lifeline in October and transferred the risk on most Alt-A mortgage assets to the Dutch state. Headquartered in Amsterdam, Netherlands, ING Groep N.V. (NYSE:ING) --- http://www.ing.com/--- is a global financial institution offering banking, investments, life insurance and retirement services. The Company serves more than 85 million private, corporate and institutional customers in Europe, North and Latin America, Asia and Australia. ING has six business lines: Insurance Europe, Insurance Americas, Insurance Asia/Pacific, Wholesale Banking, Retail Banking and ING Direct. In July 2008, the Company completed the acquisition of CitiStreet LLC, a retirement plan and benefit service and administration company in United States. In November 2008, ING Groep N.V. increased its stake in joint venture Billington Holdings PLC from 50% to 100%. In February 2009, the Company announced that it closed the sale of its Taiwanese life insurance business to Fubon Financial Holding Co. Ltd. In April 2009, the Company sold its non-state pension fund business and its holding company in Russia to Aviva plc. =========== R U S S I A =========== CENTRAL CONSTRUCTION: Creditors Must File Claims by June 4 ---------------------------------------------------------- The Arbitration Court of Samarskaya commenced bankruptcy proceedings against LLC Central Construction Technology Laboratory (TIN 6323079295, PSRN 1046301091935) after finding the company insolvent. The case is docketed under Case No. ?-55-1244/2009. Creditors have until June 4, 2009, to submit proofs of claims to: M. Kharitonov Insolvency Manager Apt. 19 Prospect S. Razina 42 Tolyatti 445027 Samarskaya Russia The Debtor can be reached at: LLC Central Construction Technology Laboratory Yuzhnoe Shosse 15-102 445047 Tolyatti Russia GALLLERY MEDIA: Moody's Cuts Corporate Family Rating to 'Caa3' -------------------------------------------------------------- Moody's Investors Service has downgraded the corporate family rating of Gallery Media Group Ltd., the existing bond rating of Gallery Capital SA, and probability of default rating from Caa2 to Caa3, and placed all ratings on review for downgrade. The action was prompted by the announcement by the company that it has appointed advisors for the potential financial restructuring of the company. The downgrade is triggered by the increased probability of default combined with Moody's concerns over the weak prospects of recovery. Moody's previous rating action on Gallery was on the March 26, 2009, when the rating agency downgraded the Caa1 ratings to Caa2 and assigned a negative outlook. The action reflected Moody's concerns over Gallery's ability to service its debt given weakening cash flow generation and limited visibility with regard to sales, profitability and working capital requirements, and anticipated higher probability of default in the second half of 2010 in the absence of a recapitalization and external financing. Gallery'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 Gallery's core industry and Gallery's ratings are believed to be comparable to those of other issuers of similar credit risk. Headquartered in Moscow, Russia, Gallery currently operates the second-largest outdoor advertising network after News Outdoor in Russia and Ukraine (based on revenues and the number of advertising faces owned). During the year of 2008, Gallery reported revenues of US$212 million and adjusted for imputed tax EBITDA of US$59.6 million. Net loss for the year 2008 amounted to US$156.2 million, reflecting significant impairment losses on the Russian and Ukrainian assets, and foreign exchange losses. IZOLYATSIONSHCHIK LLC: Creditors Must File Claims by June 4 ----------------------------------------------------------- Creditors of LLC Izolyatsionshchik (TIN 7449040107, PSRN 1037402700477) (Construction Company) have until June 4, 2009, to submit proofs of claims to: Ye.Mikhaylova Insolvency Manager Sh.Rustaveli St. 25a/4 454078 Chelyabinsk Russia The Arbitration Court of Chelyabinskaya commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. ?76–4044/2009–20-4. The Debtor can be reached at: LLC Izolyatsionshchik Maslennikova St. 15/1 Chelyabinsk Russia KURGAN AIRPORT: Creditors Must File Claims by June 4 ---------------------------------------------------- Creditors of OJSC Kurgan Airport (TIN 4501080974, PSRN 1024500529184) have until June 4, 2009, to submit proofs of claims to: N. Shadrin Temporary Insolvency Manager Post User Box 3454 640026 Kurgan Russia The Arbitration Court of Kurganskaya will convene at 9:00 a.m. on Sept. 2, 2009, to hear bankruptcy supervision procedure on the company. The case is docketed under Case No. ?34–1088/2009. The Debtor can be reached at: OJSC Kurgan Airport 640015 Kurganskaya Russia LYAMINSKIY FIBERBOARD: V. Makarov Named Insolvency Manager ---------------------------------------------------------- The Arbitration Court of Permskiy appointed V.Makarov as insolvency manager for LLC Lyaminskiy FiberBoard Plant (TIN 5905223394, PSRN 1035900834507). The case is docketed under Case No.A 13184/08. He can be reached at: Perovskoy 25/2-83 450092 Ufa Bashkortostan Russia The Debtor can be reached at: LLC Lyaminskiy FiberBoard Plant Zavodskaya St. 10 Lyamino Permskiy Russia NATIONAL FACTORING: Moody's Cuts Long-Term Deposit Ratings to 'B3' ------------------------------------------------------------------ Moody's Investors Service has downgraded the long-term foreign and local currency deposit ratings of National Factoring Company CJSC to B3 from B2. The Not-Prime foreign and local currency short- term ratings as well as the E+ BFSR remain unchanged. The rating action concludes the review process initiated in December 2008 and reflects the impact of the current operating environment in Russia on NFC. The outlook on the deposit and debt ratings as well as on the BFSR is negative. At the same time, Moody's Interfax Rating Agency, which is majority-owned by Moody's, has downgraded NFC's long-term National Scale Rating to Baa3.ru from Baa1.ru. The downgrade of NFC reflects the significant decrease in business; its factoring book has already halved compared to pre- crisis levels and is expected to decline further with accompanying deterioration of profitability and efficiency indicators. According to Moody's, this decrease (excluding the general reduction of financing limits in response to the crisis) was also due to the bank's significant reliance on short-term wholesale sources of funding in the previous years, which it was not able to refinance due to the current instability on the financial markets. As a result, the bank became largely dependant on only two sources of funding: (i) under a RUB3.2 billion (US$100 million) limit from its sister bank, Bank Uralsib (D- BFSR, with negative outlook) with ca. 60% of its non-equity funding derived from this source, and (ii) from the Central Bank of Russia with over 36% of non- equity funding coming from the CBR. Moody's notes that the cash inflows from the repayment of NFC's factoring book are sufficient to cover the repayment of its current obligations in case there is no (or minimal) additional factoring financing, a scenario which could possibly lead to substantial defaults of clients and/or loss of a significant portion of NFC's franchise. Instead, the bank relies significantly on rollover of funding from Bank Uralsib and the CBR, thus avoiding a drastic decline in its factoring book. However, they are short term in nature and there is some degree of uncertainty as regards their suitability for long-term business support. As a result, in the longer term, these sources may become unstable and NFC may need to secure alternative funding or significantly scale down its business further. Moody's notes that NFC has experienced a substantial rise in problem loans which currently accounts for ca. 10% of the factoring book. At the same time, Moody's notes that the bank is highly capitalized, as reflected in the current low leverage (Tier 1 ratio of over 30% at year-end 2008 and current equity to asset ratio of over 40%) which enables it to comfortably cover credit risks. Moody's has applied a number of scenarios (base-case and stressed) to NFC's loan book and observed that the bank is well positioned to absorb substantial asset quality deterioration without breaching regulatory ratios under both scenarios. The negative outlook reflects Moody's opinion that there is a potential for further pressure on NFC's franchise and financial metrics as a result of a prolonged and severe economic downturn in Russia, which suppresses the bank's funding and liquidity profile as well as asset quality. Moody's previous rating action on NFC was on Dec. 18, 2008, when the ratings were placed on review for a possible downgrade. Based in Moscow, NFC is one of the largest companies in the Russian factoring sector. It reported total consolidated assets of US$330 million and total equity of US$85 million under IFRS at year-end-2008. STROY-AZIYA LLC: Creditors Must File Claims by July 4 ----------------------------------------------------- Creditors of LLC Stroy-Aziya (TIN 7420008125, PSRN 1047409500247) (Construction) have until July 4, 2009, to submit proofs of claims to: M. Moiseev Insolvency Manager Post User Box 249 620014 Yekaterinburg Russia The Arbitration Court of Chelyabinskaya will convene at 3:00 p.m. on June 23, 2009, to hear bankruptcy proceedings on the company. The case is docketed under Case No. ?76–7404/2008–34–71. The Debtor can be reached at: LLC Stroy-Aziya Yelagina St. 491 Chebarkul Chelyabinskaya Russia ========= S P A I N ========= SANTANDER EMPRESAS: S&P Affirms Ratings on Class F Notes at 'CCC-' ------------------------------------------------------------------ Standard & Poor's Ratings Services took various rating actions on the notes issued by Fondo de Titulizacion de Activos Santander Empresas 3 and Fondo de Titulizacion de Activos Santander Empresas 4. In these two transactions, S&P: -- Lowered and removed from CreditWatch negative its ratings on the class B notes; -- Lowered its ratings on the class C notes; -- Lowered its rating on the class D notes issued by Santander Empresas 4; and —- Affirmed all the other classes of notes. In January 2009 S&P lowered the ratings on the class C, D, and E notes issued by Santander Empresas 3 and 4 (see "Related Research" below). At the same time, S&P placed the class B notes in both transactions on CreditWatch negative due to the worsening performance of the underlying pools. The rating actions follow an update to S&P's credit and cash flow analysis based on the most recent transaction information and loan-level data S&P received from the originator, Banco Santander S.A. (AA/Negative/A-1+). S&P's analysis focused on risks related to obligor concentrations, in particular real estate and construction sector exposures, and the concentration of loans granted for development, as well as risks related to loan prepayment profiles. Moreover, S&P assesses specific risk embedded in the pools as determined by particular products or classes of borrowers that are performing worse than others. For loan payment profiles, S&P focused on the risk posed by loans with bullet maturities. According to the most recent investor reports, the collateral in these transactions show a decreased concentration in the real estate and construction industry compared with the previous reporting period: 23.98% for Santander Empresas 3 and 32.30% for Santander Empresas 4, compared with 28.02% and 38.23%, respectively. This change is due to a reclassification of the industry sector, which took place at the beginning of this year. As of April 2009, 90+ day delinquencies accounted for 1.98% of Santander Empresas 3's current portfolio, up from 1.77% in October 2008. In comparison, Santander Empresas 4's performance is worsening faster, with 90+ delinquency rates almost doubling over the same period—up to 3.35% from 1.82% of the outstanding collateral balance. Gross cumulative defaults remain fairly low at 0.29% and 0.42% of Santander Empresas 3 and 4's respective initial collateral balances. However, in recent months both transactions have experienced a substantial increase in defaults. From October 2008 to April 2009, Santander Empresas 3's gross cumulative defaults doubled to EUR10.26 million from EUR5.00 million, while in Santander Empresas 4 they increased to EUR14.94 million from less than EUR0.49 million. Both transactions feature an early amortization mechanism, which pays down senior notes based on the current balance of defaulted loans. In Santander Empresas 3, this resulted in a draw of EUR0.5 million on the cash reserve on the January payment date and, despite an April replenishment of EUR0.2 million, it remains below its required level of EUR45.5 million. In Santander Empresas 4, the cash reserve was drawn for two consecutive payment dates, January and April, and it is now equal to EUR36.1 million and is below its required level of EUR46 million. S&P expects the default rates in both transactions to continue to increase. S&P's analysis of the data provided suggests that a large portion of loans due in 2009 have bullet maturities and a significant percentage of loans due in 2009 and 2010 are currently in arrears. If borrowers fail to refinance, there will be a further increase in default rates that may cause further draws on both cash reserves. Increasing defaults raise the likelihood of a breach of the deferral of interest trigger. A breach occurs when gross cumulative defaults for Santander Empresas 3 and 4 reach 4.70% and 3.90% of the initial collateral balance for class E, 5.60% and 4.80% for class D, 6.50% and 6.50% for class C, and 7.85% and 8.95% for class B. If this trigger is breached for a particular class of notes, interest would be deferred on that class as the structure diverts cash to repay the 'AAA' rated notes. Given S&P's expectations for the collateral performance and the current credit enhancement available, S&P's credit and cash flow analysis show that the class B and C notes in Santander Empresas 3 and the class B, C, and D notes in Santander Empresas 4 can no longer maintain their current ratings. Ratings List Ratings Lowered Fondo de Titulizacion de Activos Santander Empresas 3 EUR3,545.5 Million Floating-Rate Notes Rating ------ Class To From ----- -- ---- C BBB+ A- Fondo de Titulizacion de Activos Santander Empresas 4 EUR3,586 Million Floating-Rate Notes Rating ------ Class To From ----- -- ---- C BBB- A- D B+ BB- Ratings Lowered And Removed From Creditwatch Negative Fondo de Titulizacion de Activos Santander Empresas 3 EUR3,545.5 Million Floating-Rate Notes Rating ------ Class To From ----- -- ---- B A+ AA/Watch Neg Fondo de Titulizacion de Activos Santander Empresas 4 EUR3,586 Million Floating-Rate Notes Rating ------ Class To From ----- -- ---- B A- AA/Watch Neg Ratings Affirmed Fondo de Titulizacion de Activos Santander Empresas 3 EUR3,545.5 Million Floating-Rate Notes Classes Rating ------- ------ A2 AAA A3 AAA D BB E B F CCC- Fondo de Titulizacion de Activos Santander Empresas 4 EUR3,586 Million Floating-Rate Notes Classes Rating ------- ------ A1 AAA A2 AAA A3 AAA E B- F CCC- TDA 25: Standard & Poor's Junks Rating on Class D Notes ------------------------------------------------------- Standard & Poor's Ratings Services placed on CreditWatch negative its credit ratings on the class A, B, and C notes issued by TDA 25, Fondo de Titulizacion de Activos. At the same time, S&P lowered the rating on the class D notes. The rating on the class NAS-I0 notes is affirmed. S&P's credit analysis of the most recent transaction information that S&P has received showed that the credit enhancement available for TDA 25's class A, B, and C notes might not be sufficient to maintain the current ratings. The reserve fund has been fully depleted due to defaults and low levels of available excess spread. TDA 25 features a structural mechanism that traps excess spread to provide for gross defaults, and due and unpaid principal of nondefaulted loans. Levels of available excess spread in the first three years after closing are limited due to the NAS-IO class of notes, which pay a coupon senior in the waterfall based on a notional amount related to the class A notes. The NAS-IO class matures in September 2009 and S&P has consequently affirmed S&P's rating on that class. If gross cumulative defaults reach the level of a trigger for deferral of interest, set at 3.9% of the initial balance of the pool for the class D notes, the interest on this class will be paid after amortization of the senior classes. On the March interest payment date, cumulative defaults as a percentage of the initial balance of the pool were 2.89%. With the current level of 90+ day delinquencies (including the outstanding balance of defaulted loans) standing at 14.51% (well above the average of the Spanish residential mortgage-backed securities market), in S&P's view, deferral of interest on the class D notes could happen as soon as the next IPD. Therefore, S&P has lowered its rating on the class D notes. The triggers for deferral of interest on the class B and C notes are set at gross cumulative default levels of 6.4% and 4.9%, respectively. S&P has placed its ratings on these classes on CreditWatch negative, while S&P assess any increased likelihood of these levels being reached. S&P expects to resolve these CreditWatch placements after the June IPD. S&P has seen limited recoveries to date, due to the length of the foreclosure period. The originators of this transaction are two Spanish financial entities: Banco Gallego, S.A., and Union de Credito para la Financiacion Mobiliaria e Inmobiliaria, Credifimo, E.F.C., S.A.U. The loans, mainly originated in Andalucia, Madrid, and Galicia, have first-ranking securities and were for the purpose of property acquisition. Ratings List TDA 25, Fondo de Titulizacion de Activos EUR265 Million Residential Mortgage-Backed Floating-Rate Notes Rating Lowered Rating ------ Class To From ----- -- ---- D CCC B Ratings Placed on Creditwatch Negative Rating ------ Class To From ----- -- ---- A AAA/Watch Neg AAA B BBB/Watch Neg BBB C BB/Watch Neg BB Rating Affirmed NAS-IO AAA ===================== S W I T Z E R L A N D ===================== E. + M. KUNZ GMBH: Creditors Must File Proofs of Claim by May 20 ---------------------------------------------------------------- Creditors of E. + M. Kunz GmbH are requested to file their proofs of claim by May 20, 2009, to: Eduard Kunz and Martha Kunz Liquidators Moosstrasse 33 2543 Lengnau Switzerland The company is currently undergoing liquidation in Lengnau BE. The decision about liquidation was accepted at an extraordinary shareholders' meeting held on Nov. 3, 2008. EXPO WERBE: Claims Filing Deadline is May 20 -------------------------------------------- Creditors of expo Werbe AG are requested to file their proofs of claim by May 20, 2009, to: Christof Kummer Fiduciaire Le Lac SA Route Principale 20 1786 Sugiez Switzerland The company is currently undergoing liquidation in Bas-Vully. The decision about liquidation was accepted at an extraordinary general meeting held on March 26, 2009. GOLFPLATZ WEISSBAD: Creditors Have Until May 20 to File Claims -------------------------------------------------------------- Creditors of Golfplatz Weissbad AG are requested to file their proofs of claim by May 20, 2009, to: Michael Manser Oberer Graben 26 9000 St. Gallen Switzerland The company is currently undergoing liquidation in Appenzell. The decision about liquidation was accepted at a general meeting held on Sept. 4, 2008. HELD & MUSSOI GMBH: Claims Filing Deadline is May 20 ---------------------------------------------------- Creditors of Held & Mussoi GmbH are requested to file their proofs of claim by May 20, 2009, to: Gubler Treuhand AG Liquidator Eichgutstrasse 2 8401 Winterthur Switzerland The company is currently undergoing liquidation in Tagerwilen. The decision about liquidation was accepted at an extraordinary shareholders' meeting held on March 2, 2009. PLATFORM108 AG: Creditors Must File Claims by May 20 ---------------------------------------------------- Creditors of platform108 AG are requested to file their proofs of claim by May 20, 2009, to: Markus Bolliger Liquidator Sahlistrasse 19 3012 Bern Switzerland The company is currently undergoing liquidation in Bottighofen. The decision about liquidation was accepted at an extraordinary shareholders' meeting held on March 26, 2009. RESTAURANT BRUNEGG: Creditors Have Until May 20 to File Claims -------------------------------------------------------------- Creditors of Restaurant Brunegg GmbH are requested to file their proofs of claim by May 20, 2009, to: Philipp Stalder Entlisbergstrasse 73 8038 Zurich Switzerland The company is currently undergoing liquidation in Zürich. The decision about liquidation was accepted at a shareholders' meeting held on March 19, 2009. SABRULIN AG: Claims Filing Deadline is May 20 --------------------------------------------- Creditors of Sabrulin AG are requested to file their proofs of claim by May 20, 2009, to: Christof Kummer Fiduciaire Le Lac AG Route Principale 20 1786 Sugiez Switzerland The company is currently undergoing liquidation in Bas-Vully. The decision about liquidation was accepted at an extraordinary general meeting held on March 26, 2009. ============= U K R A I N E ============= AGRO-LAN LLC: Creditors Must File Claims by May 24 ---------------------------------------------------- Creditors of LLC Agro-Lan (code EDRPOU 33483793) have until May 24, 2009, to submit proofs of claim to: A. Bondar Insolvency Manager Post Office Box 14 03110 Kiev Ukraine The Economic Court of Kiev commenced bankruptcy proceedings against the company on April 13, 2008. The case is docketed under Case No. B3/258-08/11. The Court is located at: The Economic Court of Kiev Komintern St. 16 01032 Kiev Ukraine The Debtor can be reached at: LLC Agro-Lan Zavodskaya St. 1 Staroye Borispol 08362 Kiev Ukraine CHERNOMORSKY AGRICULTURAL: Creditors Must File Claims by May 24 --------------------------------------------------------------- Creditors of OJSC Chernomorsky Agricultural Chemistry (code EDRPOU 05489773) have until May 24, 2009, to submit proofs of claim to: O. Borisenko Insolvency Manager Office 165 Kuybishev St. 15 Simferopol AR Krym Ukraine The Economic Court of AR Krym commenced bankruptcy proceedings against the company on April 9,2009. The case is docketed under Case No. 2-4/6620-2007. The Court is located at: The Economic Court of AR Krym R. Luxembourg St. 29/Rechnaya St. 11 95000 Simferopol AR Krym Ukraine The Debtor can be reached at: OJSC Chernomorsky Agricultural Chemistry Industrialnaya St. 5 98400 Tchernomorskoye AR Krym Ukraine FAF IMAGES: Creditors Must File Claims by May 23 ------------------------------------------------ Creditors of LLC Faf Images Ukraine (code EDRPOU 33509292) have until May 23, 2009, to submit proofs of claim to: D. Panchenko Insolvency Manager Office 40 Svetly lane 14 65101 Odessa Ukraine The Economic Court of Odessa commenced bankruptcy proceedings against the company on 03/10/2009. The case is docketed under Case No 2/27-09-683. The Court is located at: The Economic Court of Odessa region Shevchenko avenue 29 65032 Odessa Ukraine TSENTROPROM COMPLEX: Creditors Must File Claims by May 23 --------------------------------------------------------- Creditors of LLC Tsentroprom Complex (code EDRPOU 34329253) have until May 23, 2009, to submit proofs of claim to: N. Gushul Insolvency Manager Office 5 Sechevikh Streltsov St. 1 Gvozdets Kolomiya Ivano-Frankovsk Ukraine The Economic Court of Kharkov commenced bankruptcy proceedings against the company on April 13, 2009. The case is docketed under Case No. B-39/67-09. The Court is located at: The Economic Court of Kharkov Svoboda Square 5 61022 Kharkov Ukraine UKRAINIAN FOOD: Creditors Must File Claims by May 23 ---------------------------------------------------- Creditors of LLC Company Ukrainian Food Service (code EDRPOU 25460487) have until May 23, 2009, to submit proofs of claim to: O. Kulagin Insolvency Manager Office 1 Artem St. 11 Yubileynoye Lugansk Ukraine The Economic Court of Lugansk commenced bankruptcy proceedings against the company on April 9, 2009. The case is docketed under Case No. 12/20b. The Court is located at: The Economic Court of Lugansk Heroes of GPW Square 3-a 91000 Lugansk Ukraine The Debtor can be reached at: LLC Company Ukrainian Food Service Shevchenko Quarter 14 Lugansk Ukraine * Moody's Cuts Issuer Ratings on Three Ukrainian Cities to 'B2' --------------------------------------------------------------- Moody's Investors Service has downgraded the foreign and local currency issuer ratings of the City of Kyiv, City of Kharkiv and City of Berdyansk (Ukraine) to B2 from B1. At the same time, Moody's also downgraded Kyiv's foreign currency debt rating and Berdyansk's local currency debt rating to B2 from B1, and Berdyansk's national scale issuer and debt ratings to A3.ua from Aa3.ua. The outlook for all the ratings is negative. The action concludes the review for possible downgrade initiated by Moody's on Feb. 26, 2009. "The rating action reflects a further deterioration in the creditworthiness of Ukrainian municipalities resulting from the ongoing economic recession in Ukraine as well as domestic market dislocation," explained Alexander Proklov, a Moody's Senior Analyst and lead analyst for Kyiv, Kharkiv and Berdyansk. The rating action follows Moody's recent decision (12 May 2009) to downgrade the Ukrainian government's foreign and local currency bond ratings to B2 from B1. "Moody's believes the combination of tax revenue shortage, weak liquidity profiles and strictly limited access to the financial market exerts significant pressure on the credit profiles of these three Ukrainian cities," explained Mr. Proklov. Further weakening in municipal operating balances is likely over the next 12 to 18 months, while the worsening nationwide economic environment could impair the capacity of the central government to bail out Ukrainian sub-sovereigns. At the same time, the cities' favorable maturity debt profiles and the municipal tax base, which is more resilient to economic shocks than that of the sovereign, could partially mitigate the short- term refinancing risks. "The ability of Ukrainian cities to manage the aforementioned pressures and to avoid the structural impairment of their debt service capacity remains a key factor in Moody's analysis," said Mr. Proklov. The last rating action on Kyiv, Kharkiv and Berdyansk was implemented on Feb. 26, 2009, when Moody's placed the B1 ratings under review for possible downgrade. =========================== U N I T E D K I N G D O M =========================== ABSOLUTE LEISURE: Sites Put Up for Sale Following Administration ---------------------------------------------------------------- Emma Eversham at bighospitality.co.uk reports that sites owned by by Newcastle-based pub, restaurant, nightclub and hotel operator Absolute Leisure have been put for sale after the company was placed into administration. According to the report, sites on sale include the Lounge pub and nightclub and 260-cover Coco'mos restaurant in Newcastle, the 19- room New Angel Hotel in Whitby and the Tuxedo Princess nightclub, previously sited in Gateshead Quay. The report recalls administrators Begbies Traynor were called in last week after it emerged the company could no longer go on trading as a result of the economic downturn. BARRATT DEVELOPMENTS: Says No Current Plans to Raise Equity ----------------------------------------------------------- Lorraine Turner and Victoria Byran at Reuters reports that Barratt Developments Plc said it would not raise equity at the moment, insisting debt was in line with plan and it expected to be able to meet loan covenants. Reuters relates Barratt chief executive Mark Clare told reporters on Wednesday "There is no activity. There are no current plans (to raise equity). We are focusing on managing within the current covenant structure that we have". Reuters discloses in a note to clients on Wednesday Robin Hardy at KBC Peel Hunt said "The ideal from Barratt was a rights issue but it was not to be". Mr. Hunt, as cited by Reuters, said "Without new equity the risk profile starts to look less comfortable". According Telegraph.co.uk, Barratt, which posted an interim pre- tax loss of GBP592.4 million in February, including a land writedown of GBP494 million, remains under pressure from its GBP1.42 billion debt pile. Reuters says analyst still fear the company's debt may push it close to breaching loan-to-value banking covenants. On May 13, 2009, Barratt published its Interim Management Statement covering the 19 week period from January 1, 2009 to May 10, 2009. Revenues Total sales outlets for the period averaged 474, with effective sales outlets averaging 414. Total sales outlets are expected to average around 500 for the Group's financial year. Visitor levels per site for the 19 week period were down 6% compared to the prior year comparable period. However, since January 1, 2009, the company has seen visitor levels per site up approximately 17% on the first half of the financial year. Total net reservations averaged 243 per week over the last 19 weeks with private net reservations averaging 223 per week. This equates to 0.47 private sales per week per site, up 4.4% on the same period last year and up 20.5% compared to the first half. Over the last six weeks, since March 30, visitors per site were up 7.8% and net private reservations were up 58.8% compared with the depressed level in the same period last year. Cancellation rates have averaged approximately 16% for the period, compared to 25.7% in the prior year. The company has adopted an increasingly cautious approach to the recording of reservations, reflecting its concerns over the availability of mortgage finance. It expects the cancellations rate to trend upwards in keeping with normal seasonal trends as we approach the June year end. Order Book The forward order book currently stands at GBP778.2 million equating to 5,253 plots up from GBP455.8 million and 3,529 plots at January 1, 2009. Of the current forward order book, GBP437.9 million (56%) is contracted. Balance Sheet Barratt said all elements of cash investment continue to be tightly controlled driving progress to reduce debt. The company expects total land spend for the financial year to be around GBP300 million. It is investing in land, where it is contractually committed to do so, or where there are investment opportunities requiring limited funding in the near term. At current sales rates, the Group's landbank equates to approximately 5.3 years' supply. Work in progress is being closely managed on a site by site, unit by unit basis. Unreserved roof to complete units, which stood at 3,822 units at December 31, 2008 have reduced by 37% to 2,405 at May 10, 2009. Stock levels continue to decline, and as at May 10, the company had 771 unreserved stock units, equating to 3.5 weeks supply at current sales rates. This is down 47% from the holding of 1,465 units at December 31, 2008. Part exchange stock levels have continued to fall, and the company currently has 73 unreserved units compared to 346 at December 31, 2008, down 79%. Outlook Barratt said there are early signs that some stability is returning to the new homes market, and the Spring selling season has shown improved visitor traffic and reservation levels compared to the first half of our financial year. Over time, it is hoped that the measures introduced to increase mortgage lending will provide additional support to the market. However volumes are currently at low levels, mortgage finance remains constrained and visibility is limited. The company said it remains cautious as to near term trading prospects. About Barratt Developments Barratt Developments Plc -- http://www.barrattdevelopments.co.uk -- is a United Kingdom-based company engaged in housebuilding and commercial development. The subsidiaries of the Company include BDW Trading Limited, KingsOak Homes Limited, Barratt Commercial Limited, Barratt North Scotland Limited, Wilson Bowden Limited, David Wilson Homes Limited and Ward Homes Limited, all of which are engaged in housebuilding and development, and Wilson Bowden Developments Limited, which is involved in commercial development. The Company offers a product range from first-time buyer homes to luxury apartments and family homes. It operates throughout Great Britain, and as of June 30, 2008, it was selling from 585 sites spread over 32 divisions. It has built 2,833 homes for the housing association partners. As of June 30, 2008, the Company's overall housebuilding operation delivered 18,588 completions. JOHNSTON PRESS: May Breach Debt Covenants After Irish Sale Failed ----------------------------------------------------------------- Amanda Andrews at Telegraph.co.uk reports Johnston Press plc issued a profit warning and said the failure to sell its Irish business meant there was a "strong likelihood" it would breach banking covenants, sending shares in the company down almost 30% to 19.25p on Wednesday. Telegraph.co.uk relates the group said in its preliminary results in March that, if the sale of the Irish business was not successfully completed, there would be a strong likelihood of a breach of a financial covenant in the group's debt facilities during 2009. "While there was considerable interest shown from both trade and financial buyers, the board decided that it was not at a sufficiently high price to be in the company's best interest," the Scotsman quoted the company as saying. Johnston, as cited by the Scotsman, said it remained in discussions to refinance its debt and expected to have new facilities in place, replacing the current ones that expire in 2010, before its half-year announcement in late August. Net debt at the end of April was GBP448 million, down GBP29 million from the start of the year, the Scotsman states. According to the Scotsman, the company said it continued to cut costs, with year-on-year costs expected to be down by more than GBP30 million. It however warned that cost savings will not be sufficient enough to offset the fall in advertising revenues which are running "below market expectations ", Telegraph.co.uk notes. Telegraph.co.uk discloses in the 19 weeks to May 9, total advertising revenues slumped 34.4pc compared to the same period last year. Johnston Press plc, along with its subsidiaries, -- http://www.johnstonpress.co.uk-- is engaged in publishing of local and regional weekly, evening and morning newspapers, both paid-for and free, together with associated Websites, as well as specialist publications in paper, online or via mobile technologies. The Company operates in two business segments: newspaper publishing (in print and online) and contract printing. It has operations in the United Kingdom and the Republic of Ireland. The Company's subsidiaries include Johnston Publishing Ltd, Johnston Press (Ireland) Ltd, Johnston (Falkirk) Ltd, Strachan & Livingston Ltd, Wilfred Edmunds Ltd, North Notts Newspapers Ltd, Yorkshire Weekly Newspaper Group Ltd, Sussex Newspapers Ltd, T R Beckett Ltd, Halifax Courier Ltd and Isle of Man Newspapers Ltd, among others. On March 7, 2008, the Company acquired Clonnad Ltd, which publishes one title, South Tipp Today. MONIER GROUP: Lenders Turn Down PAI's Debt-for-Equity Swap Offer ---------------------------------------------------------------- Tessa Walsh and Tom Freke at Reuters report that sources said on Tuesday lenders to Monier Group rejected a debt-for-equity swap proposal from private equity firm Paribas Affaires Industrielles. The report discloses according to an investor, PAI's debt-for- equity offer asked Monier Group's lenders, which comprise more than 100 banks and hedge funds, to slash the group's debt from around EUR1.7 billion to EUR600 million in return for a cash injection of up to EUR150 million. The investor, as cited in the report, said the private equity firm offered lenders around 24 percent of the company and offered the management a small 3-4 percent stake, which would have given it 72-73 percent of the company. The group's lenders, however, turned down the offer as they want a bigger stake in the company in exchange for such a large drop in their debt, the report says citing three sources. Goldman Sachs is advising PAI and Monier Group, the report states. Monier Group, which was bought by PAI in December 2006 in a EUR2.4 billion buyout, faces a looming interest payment on June 30 and possible covenant breach after a steep drop in earnings before interest, tax, depreciation and amortization, the report discloses citing a source with knowledge of the deal. The report relates two sources said the lenders are now awaiting a formal counter offer from a group of distressed investors. According to the report, an investor said Apollo Management, TowerBrook Capital and York Capital, which own around 40 percent of Monier Group's debt, made an informal alternative offer to lenders last Thursday. Monier Group -- http://www.monier.co.uk/-- supplies pitched- roofing products, roofing components and chimney systems. It has more than 200 production sites and activities in 46 countries, including the United Kingdom, Germany, Poland, among others. In 2006, Monier employed more than 12,000 people, generating sales of over EUR1.6 billion. SOVEREIGN OIL: Share Trading Resumes Today; Chairman Ellis Ousted ----------------------------------------------------------------- Hamish Rutherford at the Scotsman reports that shares in Sovereign Oilfield Group Plc will resume trading today, May 15, after the company sold two of its businesses to cut its debt. The report recalls the company had its shares suspended from the stock exchange seven months ago. According to the report, the company failed to publish its annual report within six months of its financial year end due to funding uncertainties. On Monday, the company announced the sale of two of its businesses, Vetec and Labtech, for GBP5.45 million, with the cash used to pay down its debt. The report relates the group said the sale, which was a condition imposed on the group by its lenders, including HBoS and Merrill Lynch, for continuing to support the the company, would enable it to publish its annual report for the year to March 31, 2008, and its results for the six months to October 3. Chairman Ousted Mark Williamson at the Herald reports that the company has sacked its chairman Robert Ellis without compensation following an apparent boardroom fall-out. The Herald relates in a stock exchange announcement, the company said Mr. Ellis, which was appointed in November to help lead a vital refinancing, had his contract as a director and chairman "terminated with immediate effect". Sovereign, the Herald says, is still trying to agree a refinancing that directors have been discussing with lenders for around six months. Headquartered in Aberdeen, Sovereign Oilfield Group Plc -- http:// www.sovereign-oil.com/ -- provides engineering products, technical services, and human resources to the oil and gas sector through 14 operating subsidiaries. The Company operates in two principal areas of activity, that of fabrication and manufacturing services, and selling and renting drilling equipment. Its customers include oil and gas companies, and smaller oilfield engineering companies and other oilfield service companies. On April 18, 2007, sovereign acquired Labtech services limited and associated companies, and Vertec Limited and its subsidiary. Labtech services limited and Vertec Limited specialize in the design, engineering and manufacture of onshore and offshore cabins, containers, baskets, air conditioning and refrigeration units. On February 28, 2007, the Company acquired Findgolden Limited and its subsidiaries, RDT Precision Engineers Limited and Roller Precision Products Limited. On January 22, 2007, it acquired Forfab Limited. SUN MICROSYSTEMS: Scottish Plant Posts GBP4.5MM 2008 Pre-Tax Loss ----------------------------------------------------------------- Sun Microsystem Inc's Scottish plant made a pre-tax loss of GBP4.5 million in the year to June 30, 2008, compared to a profit of GBP2.5 million in the year to June 2007, the Scotsman reported. Citing newly filed annual accounts, the report disclosed the Linlithgow-based operation's turnover rose from GBP40 million to GBP41.8 million. The report recalled in December Sun Microsystems announced plans to close its manufacturing operation at the site with the loss of about 130 jobs. The company, the report noted, remains a major employer in the area, with some 500 staff. About Sun Microsystems Headquartered in Santa Clara, California, Sun Microsystems Inc. (NASDAQ: JAVA) -- http://sun.com/-- provides network computing infrastructure product and service solutions worldwide. Sun Microsystems conducts business in 100 countries around the globe, including Brazil, Argentina, India, Hungary, United Kingdom, among others. * * * As reported by the Troubled Company Reporter on April 22, 2009, Moody's placed the Ba1 corporate family and probability of default ratings of Sun Microsystems, Inc., on review for possible upgrade following the company's announcement that it has entered into a definitive agreement to be purchased by Oracle for US$9.50 per share or approximately US$7.4 billion in cash (US$5.6 billion net of the company's cash and debt). The transaction, which has been approved by Sun's board of directors, is expected to close this summer, subject to shareholder and regulatory approval as well as standard closing conditions. According to the TCR on April 22, 2009, Standard & Poor's Ratings Services said that it revised its CreditWatch listing, including that for its 'BB+' corporate credit rating, on Santa Clara, California-based Sun Microsystems Inc. to CreditWatch with positive implications from CreditWatch with developing implications. TATA STEEL UK: Wants Lenders to Reset Terms on Corus Loan --------------------------------------------------------- Times of India reports that Tata Steel UK Limited, a subsidiary of India's Tata Steel Limited, has asked its lenders to reset the terms and conditions of the debt it took to buy Corus. According to the report, Tata Steel UK, which bought Corus for GBP6.7 billion in 2006, sought an easing on the terms of the loans as the economic slowdown could hit its earnings, straining its ability to service the loan. Tata Steel UK, as cited in the report, said it will pre-pay over GBP200 million of debt as part of the covenant reset package to de-leverage its European operations. Tata Steel UK, the report says, intends to repay GBP200 million through additional support from its Indian parent. The report relates the Tata Steel management, during the last analysts conference, had said that UK arm would repay US$450 million of debt in FY10. With the company deciding on an early repayment of US$300 million (GBP200 million), the balance is US$150 million, the report states. The Tata Steel group's cash balances, as of February, stood at US$1,134 million, while its debt stood at US$9,000 million, the report discloses. About Tata Steel Limited Headquartered in Mumbai, India, Tata Steel Limited -- http://www.tatasteel.com/-- is a diversified steel producer. It has operations in 24 countries and commercial presence in over 50 countries. Its operations predominantly relate to manufacture of steel and ferro alloys and minerals business. Other business segments comprises of tubes and bearings. Tata Metaliks Limited, which is engaged in the business of manufacturing and selling pig iron, became a subsidiary of the Company with effect from Feb. 1, 2008. About Tata Steel UK Limited Tata Steel UK Limited is the 100% subsidiary of Tata Steel Ltd, and is the holding company for its European steel operations, which principally consists of the Corus group. * * * As reported in the Troubled Company Reporter-Asia Pacific on April 7, 2009, Fitch Ratings downgraded Tata Steel Limited's Long- term foreign currency Issuer Default Rating to 'BB+' from 'BBB-' (BBB minus), and its National Long-term rating to 'AA(ind)' from 'AAA(ind)'. Simultaneously, Fitch also downgraded Tata Steel U.K. Ltd's Long-term foreign currency IDR to 'B+' from 'BB'. The Outlook on all the ratings continues to be Negative. The TCR-AP reported on March 6, 2009, that Moody's Investors Service downgraded the corporate family rating of Tata Steel Ltd to Ba2 from Ba1. The rating remains on review for possible further downgrade. THPA FINANCE: S&P Puts 'BB' Rating on Class C Notes on Watch Neg ---------------------------------------------------------------- Standard & Poor's Ratings Services placed on CreditWatch negative the ratings on all classes of notes issued by THPA Finance Ltd. These actions follow the May 8 announcement by Tata Steel Ltd. (BB-/Negative), that it has opened consultations that may result in a decision to "mothball" its Corus Teesside Cast Products plant in northeast England. According to Tata Steel, this announcement was prompted by the decision of a consortium of international slab steel buyers to seek the termination of their 10-year off-take agreement with TCP. The CreditWatch negative placements reflect that the loss of a major customer, such as Corus, is likely to have adverse long-term consequences for the business risk profile of THPA. As highlighted in S&P's last transaction update, THPA has a substantial exposure to Corus, which accounts for more than 20% of total revenues. S&P notes that the class B and class C notes could be particularly vulnerable to a suspension of the TCP plant, and may experience a multinotch downgrade. Currently, S&P understands that Tata Steel is using legal means to ensure that the terms of the 10-year off-take agreement (initiated in January 2005) are fully enforced. In addition, S&P further understand that Corus is also exploring alternative options. However, due to the present macroeconomic environment and current demand prospects for steel, and despite Tata Steel's efforts to enforce the contract and the possibility of finding alternative off-takers for the TCP's slab steel, in S&P's view, it is unlikely that the TCP plant will continue to operate at Teesside. S&P aims to resolve the CreditWatch placements within three months, during which Tata Steel may take a decision regarding the long-term future of the TCP plant. S&P will reassess the business risk profile of THPA after discussing with management the long- term implications of the solution chosen for the TCP plant's operations and THPA's long-term business plans. If the TCP plant is closed permanently, it is possible that S&P may lower the ratings by more than one notch. If no decision is reached within three months, S&P will nonetheless review the transaction in light of the heightened long-term uncertainty on the TCP plant's operations at Teesside and publish S&P's findings at that time. Ratings List Ratings Placed on Creditwatch Negative THPA Finance Ltd. GBP305 Million Fixed- And Floating-Rate Asset-Backed Notes Rating ------ Class To From ----- -- ---- A2 A/Watch Neg A B BBB/Watch Neg BBB C BB/Watch Neg BB UROPA SECURITIES: Fitch Junks Ratings on Four Classes of Notes -------------------------------------------------------------- Fitch Ratings has downgraded seven tranches of Uropa Securities plc Series 2007-01B residential mortgage-backed notes. Fitch has also revised the Outlooks to Negative from Stable on five tranches and assigned Recovery Ratings to four classes. The downgrades follow two reserve fund draws that have reduced the available credit enhancement to the junior notes, and also the high loss severity realized on sold repossessions. Further losses are expected as a result of the deterioration in the UK's housing and lending markets. A full rating breakdown is provided at the end of this comment. The latest investor report for April 2009 shows an increase in loans in arrears by more than three months to 10.5% of the current portfolio balance from 5.7% in January 2009. Fitch attributes the increase in loans in arrears to a combination of the method of arrears calculation and the current challenging economic environment. The transaction currently has 87 properties in repossession with a loan balance of GBP11.7m, equivalent to 2.3% of the current portfolio balance. Fitch's house price decline expectation calls for a 30% peak-to- trough drop. As such, the agency believes that the loss severity realized on repossessed properties will continue to rise. At the last interest payment date the period loss severity (as calculated by Fitch) stood at 31% from 48 loans sold. Given the volume of loans in late stage arrears and currently in possessions the agency believes that further losses are likely and will result in further reserve fund draws, ultimately utilizing the whole reserve fund. The reserve fund is currently 30.8% of its required amount, significantly reducing credit enhancement of the most junior notes. The Negative Outlooks on all but the most senior notes reflect Fitch's concerns over the growing volume of loans in arrears or possession in the transaction and the potential level of losses that this may result in. Further negative rating action will occur if loss severity levels continue to increase, and if the number of loans in arrears being repossessed increases. The rating actions are: Uropa Securities plc Series 2007-01B: -- Class A1a (ISIN XS0311801806): affirmed at 'AAA'; Outlook Stable; assigned a Loss Severity Rating of 'LS-2' -- Class A1b (ISIN XS0311805203): affirmed at 'AAA'; Outlook Stable; assigned a Loss Severity Rating of 'LS-2' -- Class A1c (ISIN XS0311806862): affirmed at 'AAA'; Outlook Stable; assigned a Loss Severity Rating of 'LS-2' -- Class A2b (ISIN XS0311807167): affirmed at 'AAA'; Outlook Stable; assigned a Loss Severity Rating of 'LS-2' -- Class A3a (ISIN XS0311807753): affirmed at 'AAA'; Outlook Stable; assigned a Loss Severity Rating of 'LS-2' -- Class A3b (ISIN XS0311808561): affirmed at 'AAA'; Outlook Stable; assigned a Loss Severity Rating of 'LS-2' -- Class A4a (ISIN XS0311809452): affirmed at 'AAA'; Outlook revised to Negative from Stable; assigned a Loss Severity Rating of 'LS-4' -- Class A4b (ISIN XS0311809882): affirmed at 'AAA'; Outlook revised to Negative from Stable; assigned a Loss Severity Rating of 'LS-4' -- Class M1a (ISIN XS0311810385): downgraded to 'A-' from 'AA-'; Outlook revised to Negative from Stable; assigned a Loss Severity Rating of 'LS-5' -- Class M1b (ISIN XS0311811193): downgraded to 'A-' from 'AA-'; Outlook revised to Negative from Stable; assigned a Loss Severity Rating of 'LS-5' -- Class M2a (ISIN XS0311813058): downgraded to 'BB' from 'A-'; Outlook revised to Negative from Stable; assigned a Loss Severity Rating of 'LS-5' -- Class B1a (ISIN XS0311815855): downgraded to 'CCC' from 'BBB'; assigned a Recovery Rating of 'RR2' -- Class B1b (ISIN XS0311816150): downgraded to 'CCC' from 'BBB'; assigned a Recovery Rating of 'RR2' -- Class B2a (ISIN XS0311816408): downgraded to 'CC' from 'BB'; assigned a Recovery Rating of 'RR3' -- Class D (ISIN XS0311819923): downgraded to 'C' from 'BB'; assigned a Recovery Rating of 'RR6' Fitch will continue to monitor the performance of these transactions, and may take rating actions as deemed necessary. WHISTLEJACKET CAPITAL: Moody's Corrects Release; Cuts Note Ratings ------------------------------------------------------------------ Moody's Investors Service has made a correction to its previous rating release on Whistlejacket Capital Limited. Revised Release Moody's Investors Service has downgraded and will withdraw the Euro and US Medium Term Note Programme ratings of Whistlejacket Capital Limited, a structured investment vehicle previously managed by Standard Chartered Bank. Receivers were appointed to Whistejacket on Feb. 12, 2008, and the trustee, BNY Corporate Trustee Services Limited, accelerated all outstanding debt on Feb. 15, 2008 pursuant to the Trust Deed for the transaction. On April 30, 2009, the Receivers of Whistlejacket announced they had conducted an auction and liquidated a portion of the portfolio achieving an aggregate price of 67.1% of the par amount of assets. On May 8, 2009, the Receivers announced that, taking into account the portfolio sale distribution and an earlier distribution, their estimate is that holders of Senior Notes have recovered approximately 71% of the total amount due on each senior note. Moody's note that the Receiver expects to make a future distribution. The rating actions reflect the losses that have been crystallized for holders of Whistlejacket's senior debt, based purely on the announcements made to the Irish Stock Exchange. The last rating action was taken following the acceleration of the senior debt. The B2 rating then assigned to the medium term notes was based on the likelihood of a high recovery were the vehicle to continue to avoid asset sales. Whistlejacket had not liquidated any portfolio assets prior to the auction on April 30, 2009; and all interest and principal proceeds remaining after paying senior expenses have been used to repay the senior creditors pro-rata. Moody's analyzed this transaction using primarily the methodology and its supplements for CDOs as described in Moody's Special Reports below: -- Moody's Approach to Rating Corporate Collateralized Synthetic Obligations (April 2009) -- Moody's Approach to Rating SF CDO (March 2009) The rating actions are: Whislejacket Capital Ltd and Whistlejacket Capital LLC (1) Euro and US Medium Term Note Programmes -- Current Rating: C and Not Prime -- Prior Rating: B2 and Not Prime -- Prior Rating Date: 21 February 2008, downgraded to B2 and Not Prime from Ba2 and Not Prime. Moody's expects to withdraw all assigned ratings upon confirmation of the redemption or cancellation of outstanding notes. * S&P Puts Ratings on 35 Tranches in 8 Euro CBMS Deals on WatchNeg ------------------------------------------------------------------ Standard & Poor's Ratings Services placed on CreditWatch negative 35 tranches in eight European commercial mortgage-backed securities transactions. At the same time, S&P kept on CreditWatch negative 14 tranches in three European CMBS transactions affected by this review and already on CreditWatch negative for other reasons. The affected tranches have a principal balance of about EUR2.3 billion (for euro-denominated transactions) and GBP2.9 billion (for British-pound-sterling-denominated transactions). The CreditWatch placements affect approximately 61% (by number) of the transactions that closed between July 1, 2007 and July 1, 2008. These rating actions follow S&P's current review of all European CMBS transactions. Over the coming months, S&P will review transactions that closed in each half-year period going back to 2005. There are a small number of transactions that closed before that date and they will be considered in a separate review. The next group to be reviewed will comprise transactions that closed in the first half of 2007. Commercial real estate debt and capital markets have been under pressure over the past 18 months, with market value declines in many markets led by a sharp increase in capitalization rates. S&P expects further downward pressure on values, with drops in net operating income and falls in market rents likely as economic activity contracts in Europe. S&P believes that the difficulties of the European banking sector and its disinclination to lend on European commercial real estate collateral are well known. S&P conducts ongoing surveillance of CMBS transactions. However, with a refinance peak in 2011 to 2013 in European CMBS, S&P intend to have a special focus in this CreditWatch review on the updated assessment of loan refinance risk. Even though S&P continue to believe that class A notes will not suffer an eventual loss, all else being equal, the risks to these tranches have, in S&P's view, materially increased. S&P consider that downgrades, including of senior notes, could be possible in future. S&P currently expect to resolve the majority of the CreditWatch actions in the sector, following a review of each CMBS transaction, not later than September 30, 2009. Based on the available information, S&P does not currently expect the average downgrade to exceed two rating categories. In assigning CreditWatch placements, S&P apply its existing criteria "Framework For Credit Analysis In European CMBS Transactions" in the context of the article "Standard & Poor's To Explicitly Recognize Credit Stability As An Important Rating Factor". Ratings List Ratings Placed on Creditwatch Negative Duncannon CRE CDO I PLC EUR810 Million Senior and Mezzanine Deferrable-Interest Floating-Rate Notes Rating ------ Class To From ----- -- ---- X AA/Watch Neg AA A AA/Watch Neg AA RCF AA/Watch Neg AA B A/Watch Neg A C1 Def BBB/Watch Neg BBB C2 Def BBB-/Watch Neg BBB- D1 Def BB+/Watch Neg BB+ D2 Def BB/Watch Neg BB D3 Def BB-/Watch Neg BB- E1 Def B/Watch Neg B E2 Def B-/Watch Neg B- Epic (Value Retail) Ltd. EUR338 Million Commercial Mortgage-Backed Floating-Rate Notes Rating ------ Class To From ----- -- ---- A AAA/Watch Neg AAA B AAA/Watch Neg AAA C AA/Watch Neg AA Epic Opera (Arlington) Ltd. GBP800 Million Commercial Mortgage-Backed Floating-Rate Notes Rating ------ Class To From ----- -- ---- A AAA/Watch Neg AAA B AAA/Watch Neg AAA C AA/Watch Neg AA Prominent CMBS Conduit No. 2 Ltd. GBP454.3 Million Commercial Mortgage-Backed Floating-Rate Notes Rating ------ Class To From ----- -- ---- A AAA/Watch Neg AAA B AA/Watch Neg AA C A/Watch Neg A D BBB/Watch Neg BBB E BBB-/Watch Neg BBB- F BB/Watch Neg BB Taurus CMBS (Pan-Europe) 2007-1 Ltd. EUR549.95 Million and CHF0.1 Million Commercial Mortgage-Backed Floating-Rate Notes Rating ------ Class To From ----- -- ---- F BB/Watch Neg BB Ulysses (European Loan Conduit No. 27) PLC GBP429 Million Commercial Mortgage-Backed Floating-Rate Notes Rating ------ Class To From ----- -- ---- A AAA/Watch Neg AAA X1 AAA/Watch Neg AAA B AAA/Watch Neg AAA C AA/Watch Neg AA D A/Watch Neg A E BBB/Watch Neg BBB Vulcan (European Loan Conduit No. 28) Ltd. EUR1,076.415 Million Commercial Mortgage-Backed Variable- and Floating-Rate Notes Rating ------ Class To From ----- -- ---- D A/Watch Neg A E BBB/Watch Neg BBB F BBB-/Watch Neg BBB- G BB/Watch Neg BB Xuthus (European Loan Conduit No. 29) S.A. EUR695.05 Million Commercial Mortgage-Backed Floating-Rate and Variable-Rate Notes Rating ------ Class To From ----- -- ---- C A/Watch Neg A Ratings Remaining on Creditwatch Negative Diversity Funding No. 1 Ltd. GBP1,144.6 Million Variable Reference Rate Notes Rating ------ Class To From ----- -- ---- A AAA/Watch Neg AAA/Watch Neg B AA/Watch Neg AA/Watch Neg C A/Watch Neg A/Watch Neg D BBB/Watch Neg BBB/Watch Neg E BB/Watch Neg BB/Watch Neg F B/Watch Neg B/Watch Neg Windermere XI CMBS PLC GBP707.76 Million Commercial Mortgage-Backed Floating-Rate Notes Rating ------ Class To From ----- -- ---- A AAA/Watch Neg AAA/Watch Neg B AA/Watch Neg AA/Watch Neg Windermere XIV CMBS Ltd. EUR1,111,885,000 Commercial Mortgage-Backed Floating-Rate Notes Rating ------ Class To From ----- -- ---- A AAA/Watch Neg AAA/Watch Neg B AA/Watch Neg AA/Watch Neg C A/Watch Neg A/Watch Neg D BBB/Watch Neg BBB/Watch Neg E BB/Watch Neg BB/Watch Neg F B/Watch Neg B/Watch Neg * IMF Wants European Banks to Be Subjected to "Stress Tests" ------------------------------------------------------------ BBC News reports the International Monetary Fund (IMF) has called for European banks to be subjected to "stress tests" like those applied to US banks. The report relates IMF's Europe director Marek Belka said such tests would help restore confidence to the banking sector and get banks to come clean on losses. Mr. Belka, as cited in the report, said national supervisors in each country should carry out the tests. IMF in its spring forecasts said Europe's advanced economies will shrink by 4% in 2009 and 0.4% in 2010, while it expects Europe's emerging economies to contract by 4.9% in 2009, before returning to growth of 0.7% next year, the report discloses. "Europe is facing the economic storm of a lifetime and it urgently needs to weatherproof its institutions," the report quoted Mr. Belka as saying. * BOOK REVIEW: Performance Evaluation of Hedge Funds ---------------------------------------------------- Edited by Greg N. Gregoriou, Fabrice Rouah, and Komlan Sedzro Publisher: Beard Books Hardcover: 203 pages Listprice: US$59.95 Review by Henry Berry Hedge funds can be traced back to 1949 when Alfred Winslow Jones formed the first one to "hedge" his investments in the stock market by betting that some stocks would go up and others down. However, it has only been within the past decade that hedge funds have exploded in growth. The rise of global markets and the uncertainties that have arisen from the valuation of different currencies have given a boost to hedge funds. In 1998, there were approximately 3,500 hedge funds, managing capital of about US$150 billion. By mid-2006, 9,000 hedge funds were managing US$1.2 trillion in assets. Despite their growing prominence in the investment community, hedge funds are only vaguely understood by most people. Performance Evaluation of Hedge Funds addresses this shortcoming. The book describes the structure, workings, purpose, and goals of hedge funds. While hedge funds are loosely defined as "funds with no rules," the editors define these funds more usefully as "privately pooled investments, usually structured as a partnership between the fund managers and the investors." The authors then expand upon this definition by explaining what sorts of investments hedge funds are, the work of the managers, and the reasons investors join a hedge fund and what they are looking for in doing so. For example, hedge funds are characterized as an "important avenue for investors opting to diversify their traditional portfolios and better control risk" -- an apt characterization considering their tremendous growth over the last decade. The qualifications to join a hedge fund generally include a net worth in excess of US$1 million; thus, funds are for high net-worth individuals and institutional investors such as foundations, life insurance companies, endowments, and investment banks. However, there are many individuals with net worths below US$1 million that take part in hedge funds by pooling funds in financial entities that are then eligible for a hedge fund. This book discusses why hedge funds have become "notorious as speculating vehicles," in part because of highly publicized incidents, both pro and con. For example, George Soros made US$1 billion in 1992 by betting against the British pound. Conversely, the hedge fund Long-Term Capital Management (LTCP) imploded in 1998, with losses totalling US$4.6 billion. Nonetheless, these are the exceptions rather than the rule, and the editors offer statistics, studies, and other research showing that the "volatility of hedge funds is closer to that of bonds than mutual funds or equities." After clarifying what hedge funds are and are not, the book explains how to analyze hedge fund performance and select a successful hedge fund. It is here that the book has its greatest utility, and the text is supplemented with graphs, tables, and formulas. The analysis makes one thing clear: for some investors, hedge funds are an investment worth considering. Most have a demonstrable record of investment performance and the risk is low, contrary to common perception. Investors who have the necessary capital to invest in a hedge fund or readers who aspire to join that select club will want to absorb the research, information, analyses, commentary, and guidance of this unique book. Greg N. Gregoriou teaches at U. S. and Canadian universities and does research for large corporations. Fabrice Rouah also teaches at the university level and does financial research. Komlan Sedzro is a professor of finance at the University of Quebec and an advisor to the Montreal Derivatives Exchange. ********* 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 * * *