/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/090522.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 22, 2009, Vol. 10, No. 100 Headlines A U S T R I A BRUEDER HAZMUKA: Claims Registration Period Ends June 9 HILDEBRAND GMBH: Claims Filing Period Ends June 9 STADE GMBH: Claims Registration Period Ends June 10 UNIVERSIMED GMBH: Claims Filing Deadline is June 12 VITO GMBH: Claims Filing Period Ends June 8 B E L G I U M KBC BANK: Moody's Cuts Ratings on Preferred Securities to 'B1' B U L G A R I A * Moody's Withdraws 'Ba3' Issuer Rating on City of Pazardjik F R A N C E THOMSON SA: Says Not on the Verge of Bankruptcy G E R M A N Y ACI PROJEKT: Claims Registration Period Ends June 20 AVANTGARDE SYSTEMS: Claims Registration Period Ends June 8 CATNIP STUDIOS: Claims Registration Period Ends June 8 CONTINENTAL AG: May Merge Operations With Schaeffler Group GENERAL MOTORS: Fiat CEO Met Italy's Top Banks for Opel Loan GENERAL MOTORS: Fiat CEO Offers Opel Assets "Better Than Cash" GENERAL MOTORS: More Opel Bidders May Come, Labor Leader Says HEIDELBERGCEMENT AG: Moody's Reviews 'B1' Rating for Likely Cut HERTIE GMBH: To Close 54 Stores; 2, 600 Jobs Affected PORSCHE SE: Lower Saxony to Keep 20% Stake After Porsche Merger SPRIO ANLAGENTECHNIK: Claims Registration Period Ends June 3 TACKE BETEILIGUNGS: Claims Registration Period Ends July 7 TBA LOGISTIC: Claims Registration Period Ends June 2 VITA BAU: Claims Registration Period Ends June 5 WALDHOF POSTTEICH: Claims Registration Period Ends June 30 * GERMANY: Receives 'About' 20 State Funding Applications I R E L A N D ANGLO IRISH: Fitch Downgrades Government Guaranteed Debt BANK OF IRELAND: S&P Junks Ratings on 6 Hybrid Capital Securities CEDO PLC: Moody's Cuts Ratings on 22 Series of Notes to 'Ca' EUROCONNECT ISSUER: Moody's Junks Rating on Class D Notes IRISH NATIONWIDE: Fitch Downgrades Government Guaranteed Debt WEAVERING MACRO: ISE Keeps Mum on Hedge Fund Investigation * IRELAND: Property Developers May Avoid Collapse Under Nama Plans I T A L Y CAPITAL MORTGAGE: S&P Lowers Rating on Class C Notes to 'BB' PARMALAT SPA: To Buy Fresh Milk Operations in Australia SESTANTE FINANCE: S&P Corrects May 12 Rating Press Release K A Z A K H S T A N ASTANA FINANCE: Halts Bond Payment ASTANA FINANCE: Fitch Cuts LT Issuer Default Ratings to 'RD' AZICOM LLP: Creditors Must File Claims by June 12 ERMUHAN LLP: Creditors Must File Claims by June 12 HALYK SAVINGS: Should Restructure Debt Alone, Samruk-Kazyna Says KAZKOMMERTSBANK AO: Has No Plans to Restructure Debt REGION TECH: Creditors Must File Claims by June 12 ROM TORG: Creditors Must File Claims by June 12 TABYS SN: Creditors Must File Claims by June 12 * KAZAKHSTAN: May Need IMF's Help to Avert "Bond Crisis," ING Says K Y R G Y Z S T A N KEN-STROY LLC: Creditors Must File Claims by June 5 L A T V I A * LATVIA: Insolvency Cases Up 40% in First Four Months of 2009 N E T H E R L A N D S CARLSON WAGONLIT: Moody's Downgrades Corp. Family Rating to 'B3' SMILE SECURITISATION: Moody's Junks Rating on Class E Notes R U S S I A BAYMAKSKIY MACHINE-BUILDING: Court Appoints Insolvency Manager DELANCE LTD: Moody's Junks Corporate Family Rating From 'B2' KOTLAS-LES-STROY LLC: Creditors Must File Claims by July 7 LES-PROM LLC: Creditors Must File Claims by June 7 STROY-DINAMIKA LLC: Creditors Must File Claims by June 7 TAMANSKIY WINERY: Moskovskaya Bankruptcy Hearing Set August 12 S L O V E N I A NOVA KREDITNA: Fitch Cuts Rating on Hybrid Capital Notes to 'BB+' S W I T Z E R L A N D ARGE GRAZIOLI/KRISCHANITZ: Claims Filing Period Ends May 29 GARAGE DEBRUNNER: Creditors Must File Claims by May 27 INTEC ENGINEERING: Claims Filing Period Ends May 29 IX-LINK GMBH: Claims Filing Deadline is May 27 SEA-ISLAND CONTRACTORS: Claims Filing Deadline is May 27 SUMMEK HOLDING: Creditors Must File Claims by May 27 U. & H. ZIOERJEN AG: Claims Filing Deadline is May 27 T U R K E Y PETKIM PETROKIMYA: Fitch Affirms Issuer Default Rating at 'BB-' U K R A I N E AUGUST LTD: Creditors Must File Claims by June 5 DRUZHBA-45 LLC: Creditors Must File Claims by June 5 ONYX LLC: Creditors Must File Claims by June 5 YARMIS LLC: Creditors Must File Claims by June 5 * Moody's Puts Deposit Ratings of Three Ukrainian Banks on Review U N I T E D K I N G D O M CRYSTAL BERRY: Appoints Joint Administrators from Grant Thornton DEEP RED: Taps Joint Administrators from Grant Thornton EDWARDS GROUP: S&P Lowers Corporate Credit Ratings to 'B' EMERALD BLUE: Brings in Joint Administrators from Grant Thornton EPIC PLC: Fitch Cuts Ratings on Three Classes of Notes to Low-B GOLDCORE PROPERTIES: Appoints Administrators from Grant Thornton LLOYDS BANKING: European Commission May Demand Asset Sales LONDON VILLAGE: Calls in Joint Administrators from Grant Thornton PLAYGOLF LTD: Taps Joint Administrators from BDO TRUE BLUE: Appoints Joint Administrators from Baker Tilly WORK FACILITIES: Brings in Joint Administrators from PwC WORK INC: Taps Joint Administrators from PwC YELL GROUP: Says Actively Exploring Refinancing Options * Building Societies Asks More Help From British Government * S&P Cuts Securities Ratings of Various European Banking Groups * S&P Puts Ratings on 43 CLO Tranches on Negative CreditWatch * EUROPE: Fitch Says CLO Performance Suffers as Loan Defaults Rise * BOOK REVIEW: Corporate Recovery – Managing Companies in Distress ********* ============= A U S T R I A ============= BRUEDER HAZMUKA: Claims Registration Period Ends June 9 ------------------------------------------------------- Creditors owed money by Brueder Hazmuka KG have until June 9, 2009, to file written proofs of claim to the court-appointed estate administrator: Dr. Michael Lesigang Landstrasser Hauptstrasse 14-16/8 1030 Vienna Austria Tel: 715 25 26 Fax: 715 25 26 27 E-mail: michael@lesigang.at Creditors and other interested parties are encouraged to attend the creditors' meeting at 9:45 a.m. on June 23, 2009, for the examination of claims. HILDEBRAND GMBH: Claims Filing Period Ends June 9 ------------------------------------------------- Creditors owed money by Hildebrand GmbH have until June 9, 2009, to file written proofs of claim to the court-appointed estate administrator: Dr. Karl Schirl Krugerstrasse 17/3 1010 Vienna Austria Tel: 513 22 31 Fax: 513 22 31 1 E-mail: dr.karl.schirl@der-rechtsanwalt.at Creditors and other interested parties are encouraged to attend the creditors' meeting at 9.15 a.m. on June 23, 2009, for the examination of claims. STADE GMBH: Claims Registration Period Ends June 10 --------------------------------------------------- Creditors owed money by Stade GmbH have until June 10, 2009, to file written proofs of claim to the court-appointed estate administrator: Dr. Georg Freimueller Alser Strasse 21 1080 Wien Austria Tel: 406 05 51-Serie Fax: 406 96 01 E-Mail: kanzlei@jus.at Creditors and other interested parties are encouraged to attend the creditors' meeting at 9:15 a.m. on June 25, 2009, for the examination of claims. UNIVERSIMED GMBH: Claims Filing Deadline is June 12 --------------------------------------------------- Creditors owed money by Universimed GmbH have until June 12, 2009, to file written proofs of claim to the court-appointed estate administrator: Dr. Andreas Alzinger Karntner Ring 12 1010 Vienna Austria Tel: 515 50 333 Fax: 515 50 50 E-mail: a.alzinger@baierboehm.at Creditors and other interested parties are encouraged to attend the creditors' meeting at 10:00 a.m. on June 25, 2009, for the examination of claims. VITO GMBH: Claims Filing Period Ends June 8 ------------------------------------------- Creditors owed money by Vito GmbH have until June 8, 2009, to file written proofs of claim to the court-appointed estate administrator: Dr. Gerhard Kucher St. Veiter Strasse 9 9020 Klagenfurt Austria Tel: 0463/507510 Serie Fax: 0463/507510-11 E-mail: rechtsanwalt@kucher-moessler.at Creditors and other interested parties are encouraged to attend the creditors' meeting at noon on June 15, 2009, for the examination of claims at: Land Court of Klagenfurt Meeting Room 225 Second Floor Klagenfurt Austria ============= B E L G I U M ============= KBC BANK: Moody's Cuts Ratings on Preferred Securities to 'B1' -------------------------------------------------------------- Moody's Investors Service has affirmed KBC Bank's Bank Financial Strength Rating at C+ and long-term debt and deposit ratings at Aa3. At the same time, KBC Group's long-term debt rating was also affirmed at A1. All long-term senior ratings and the bank's BFSR continue to carry a negative outlook. All short-term ratings were affirmed at Prime-1. Simultaneously, Moody's downgraded the ratings on the bank's hybrid instruments: -- the Perpetual Debt Securities issued by KBC Bank were downgraded to Baa1, on review for possible further downgrade, from A2, Negative outlook -- the Non-cumulative Trust Preferred Securities issued by KBC Bank Funding Trust II, III and IV were downgraded to B1, on review direction uncertain, from A2, Negative outlook. Affirmation of The BFSR and Senior Debt Ratings Reflect Significant Government Support The rating action follows the release by KBC of its 1Q09 earnings and the announcement of a financial guarantee from the Belgian Government on the group's CDO portfolio and MBIA exposure. Given the adverse market environment, KBC has taken EUR3.8 billion of value adjustments on its Super Senior CDO portfolio and on its exposure to MBIA, bringing its net result for 1Q09 to minus EUR3.6 billion. KBC's CDO exposure is synthetic hence considered a derivative instrument that cannot be re-classified under IAS 39. Consequently, KBC's earnings continue to be impacted by mark-to- market evolutions. To alleviate the volatility stemming from these exposures and protect its franchise, KBC has announced that it will benefit from a guarantee from the Belgian Government through an asset relief program covering EUR20 billion worth of exposures. A EUR3.2 billion first loss tranche to be assumed by KBC is already covered by the bank's cumulative value adjustments to date. Beyond that first tranche, 90% of the losses will be covered by the Belgian State, thus off-setting the bulk of potential future incremental mark-to-market adjustments. As an additional measure, KBC will also draw on the EUR1.5 billion capital back-up facility provided by the Flemish Government in January 2009. Pro-forma of both the impact of the Belgian Government's guarantee package and the Flemish Government's capital injection, KBC Bank's tier 1 ratio stands at 11% as of end-March 2009. Moody's notes KBC's first quarter results with underlying pre-tax profit of EUR667 millions and a Net Banking Income of EUR987 millions, both above Moody's expectations, reflecting primarily the resilience of Belgian operations and stabilization of Merchant Banking activities. Additional value adjustments taken by KBC during the quarter are in the upper range of stress scenarios that led to Moody's latest rating action. In Moody's opinion, most of the potential risks stemming from the structured finance assets portfolio are now either covered by the guarantee or written-down. KBC's ratings also benefit from the capital buffer provided by the recent capital injections from the Belgian and Flemish Governments. The negative outlook continues to reflect Moody's expectation of deteriorating operating environments in the markets where KBC operates, and especially in Ireland, CEE and Russia. Moody's will also continue to monitor the effectiveness of the de- risking measures at KBC Financial Products. Downgrade of Hybrid Instruments Reflect the Increased Risk of Coupon Losses The long-term ratings KBC Bank's Perpetual Debt Securities were downgraded to Baa1, under review for possible further downgrade, from A2, negative outlook. The wider notching of these instruments from the banks' long-term debt and deposit ratings reflects Moody's opinion of an increased likelihood of a coupon deferral. As the bank announced that no dividend would be paid to common shareholders, the dividend pusher is no longer an obstacle to non payment. However, the rating agency notes that the coupon payments on these instruments are cumulative and has to be paid in accordance with an Alternative Coupon Satisfaction Mechanism, thereby limiting the loss severity of a coupon deferral if this were to occur. The long-term ratings of the Non-cumulative Trust Preferred Securities issued by KBC Bank Funding Trust II, KBC Bank Funding Trust III and KBC Bank Funding Trust IV were downgraded to B1, under review direction uncertain, from A2, negative outlook. The wider notching of these instruments from the banks' long-term debt and deposit ratings reflects Moody's opinion of: (i) an increased likelihood of a coupon non-payment due to the loss of protection from the dividend pusher after the bank has announced that no dividend would be paid to common shareholders, (ii) the possibility that EU authorities' approval of the support package be contingent upon suspension of coupons on these instruments, and (iii) the high loss severity in case of a coupon non-payment due to the non-cumulative nature of these instruments. Rating History and Moody's Methodologies The last rating action on KBC Bank N.V. and KBC Group N.V. was on January 26, 2009, when Moody's downgraded KBC Bank's BFSR to C+ from B- and its long-term deposit and senior unsecured ratings to Aa3 from Aa2. The Prime-1 short-term rating was affirmed. The negative outlook on KBC Bank's BFSR and long-term ratings was maintained. At the same time, KBC Group's long-term debt rating was also downgraded to A1 from Aa3, with a negative outlook. Based in Brussels, KBC Group had total assets amounting to EUR347.4 billion at end-March 2009. KBC Group's consolidated total income for the three nine months of 2009 (IFRS) stood at minus EUR1,610 million, down from positive EUR2,084 million for the first three months of 2008. In the same period, the net profit group share stood at minus EUR3,600 million (Q1 2008: EUR554 million). At end-March 2009, KBC Bank's Tier 1 ratio stood at 11.0% on a proforma basis, including the guarantee through the asset relief program (core Tier 1: 8.3%). =============== B U L G A R I A =============== * Moody's Withdraws 'Ba3' Issuer Rating on City of Pazardjik ------------------------------------------------------------ Moody's has withdrawn the long term issuer rating of Ba3 assigned to the City of Pazardjik. The rating agency has withdrawn this rating for business reasons. The last rating action with respect to the City of Pazardjik was on December 15, 2006, when the Ba3 rating was affirmed. =========== F R A N C E =========== THOMSON SA: Says Not on the Verge of Bankruptcy ----------------------------------------------- Julien Ponthus at Reuters reports that Thomson SA on Wednesday dismissed rumors the company was close to bankruptcy as groundless. "It is without foundation, we are not bankrupt," Reuters quoted a company spokeswoman as saying. Reuters relates the rumors sent shares in the company down 15 percent on Wednesday, May 20. According to Reuters, the company said on Wednesday it made a request to France's financial markets regulator Autorite des marches financiers (AMF) to probe the share fall which it blamed on "inaccurate and misleading" information in some media. Waiver On April 30, 2009, the Troubled Company Reporter-Europe, citing Reuters, reported that Thomson SA obtained a waiver from its main creditors until June 16 to restructure its debt. Reuters said the company has until its June 16 annual shareholders meeting to continue discussions on its balance sheet restructuring. Citing Frederic Rose, Thomson's chief executive, Reuters disclosed the group's senior creditors include some 20 banks and 30 bondholders, who could have demanded the reimbursement of some EUR2.9 billion of gross debt from April 30 following the covenant breach. Reuters noted Mr. Rose has said talks with creditors covered several options, including the possibility for creditor banks to exchange debt for equity. Reuters stated the group's cash position at end-March 2009 stood at EUR586 million and its net financial debt as of March 31 was EUR2.357 billion. About Thomson SA France-based Thomson SA -- http://www.thomson.net/-- provides technology, services, and systems to Media & Entertainment (M&E) clients, including content creators, content distributors and broadcasters. It has three principal operating divisions: Services, Systems (previously Systems & Equipment) and Technology. The remaining activities are regrouped in two additional segments: Other and Corporate. The Services Division offers end-to-end management of video-related services for its customers in the M&E industries. Systems division plays a role in supplying hardware and software technology for the M&E industries in the areas of production, delivery, management, transmission, and access. Technology division includes activities, such as corporate research; Silicon Solutions: Integrated Circuit design and tuners, and Software & Technology Solutions: video and audio security solutions, and other technologies. In December 2008, the Company sold its digital film equipment product line. * * * As reported in the Troubled Company Reporter-Europe on May 21, 2009, Moody's Investors Service changed to Ca/LD from Ca the Probability of Default Rating for Thomson S.A. The outlook on the ratings remains negative. This rating action follows Thomson's failure to repay US$92.5 million private placements due on May 18, 2009 which in Moody's view constitutes a payment default. This non-payment is in line with the company's announcement made on April 28, 2009 stating that it had obtained waivers from senior creditors until June 16 to continue discussions on its balance sheet restructuring and that it had agreed with its creditors to defer the required pay down of its debt during the waiver period. ============= G E R M A N Y ============= ACI PROJEKT: Claims Registration Period Ends June 20 ---------------------------------------------------- Creditors of Aci Projekt GmbH have until June 20, 2009, to register their claims with court-appointed insolvency manager. Creditors and other interested parties are encouraged to attend the meeting at 9:15 a.m. on July 31, 2009, at which time the insolvency manager will present his first report. The meeting of creditors will be held at: The District Court of Cologne Room 142 Luxemburger Strasse 101 50939 Cologne 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. Andreas Ringstmeier Brueckenstr. 21 50667 Cologne Germany Tel: 650 660 Fax: 221650661 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: Aci Projekt GmbH Unnauer Weg 11 50767 Cologne Germany Attn: Rainer Haehling von Lanzenauer, Manager Unnauer St. 11 50767 Cologne Germany AVANTGARDE SYSTEMS: Claims Registration Period Ends June 8 ---------------------------------------------------------- Creditors of Avantgarde Systems GmbH have until June 8, 2009, to register their claims with court-appointed insolvency manager. Creditors and other interested parties are encouraged to attend the meeting at 11:10 a.m. on June 26, 2009, at which time the insolvency manager will present his first report. The meeting of creditors will be held at: The District Court of Cologne Room 1216 Luxemburger Strasse 101 50939 Cologne 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. Ruediger Werres Friesenplatz 17 a 50672 Cologne Germany Tel: 0221/95 14 46 – 20 Fax: +4922195144690 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: Avantgarde Systems GmbH Holbeinstr. 6 50733 Cologne Germany Attn: Dirk Zahnen, Manager Graseggerstr. 123 50737 Cologne Germany CATNIP STUDIOS: Claims Registration Period Ends June 8 ------------------------------------------------------ Creditors of Catnip Studios GmbH have until June 8, 2009, to register their claims with court-appointed insolvency manager. Creditors and other interested parties are encouraged to attend the meeting at 11:20 a.m. on June 29, 2009, at which time the insolvency manager will present his first report. The meeting of creditors will be held at: The District Court of Cologne Room 1216 Luxemburger Strasse 101 50939 Cologne 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. Norbert Heimann Spichernstr. 55 50672 Cologne Germany Tel: 9595925 Fax: +49221514437 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: Catnip Studios GmbH Schanzenstr. 26/31 51063 Cologne Germany Attn: Alexandra Gerb, Manger Hohe St. 69 47051 Duisburg Germany CONTINENTAL AG: May Merge Operations With Schaeffler Group ---------------------------------------------------------- Chris Reiter at Bloomberg News reports that Continental AG said it may merge operations with dominant investor Schaeffler Group as the manufacturers try to reduce EUR22 billion (US$30 billion) in combined debt. "Schaeffler is working together with Continental on options for future cooperation," Hannes Boekhoff, a spokesman for Continental, said in an e- mailed response to the news agency's questions. "Integration is among the options that we're reviewing" during "constructive" talks. The report recalls Continental Chief Executive Officer Karl-Thomas Neumann said on April 23 that he plans to submit a new strategy that addresses cooperation with Schaeffler by Aug. 1. Options may also include a share sale and asset disposals, he said at the time, the report relates. According to Bloomberg News, Schaeffler, which controls 90.2 percent of Continental, paid EUR75 a share for the company, making its offer in August before collapsing financial markets helped push the auto industry into its worst crisis in decades. The report discloses that Schaeffler, burdened with debt of EUR11 billion, announced plans a week ago to reduce labor costs by EUR250 million. Schaeffler and Continental have appointed a joint adviser to help review options, they companies said in a joint statement obtained by Bloomberg News. As reported in the Troubled Company Reporter-Europe on May 4, 2009, Fitch Ratings placed Continental AG's Long-term Issuer Default Rating and senior unsecured rating of 'BB', respectively, on Rating Watch Negative. At the same time, Fitch affirmed Continental's Short-term IDR at 'B'. Hanover, Germany-based Continental AG (OTC:CTTAY) -- http://www.conti-online.com/-- is an automotive industry supplier. The Company focuses its activities on the development, production and distribution of products that improve driving safety, driving dynamics and ride comfort. It operates in six divisions. Chassis and Safety provides active and passive driving safety, safety and chassis sensor systems, as well as chassis components. Powertrain focuses on engine systems, hybrid electric drives, injection technology, and sensors and actuators, among others. Interior manufactures information management modules and wireless mobile devices. Passenger and Light Truck Tires provides tires for passenger cars, motorcycles and bicycles. Commercial Vehicle Tires offers tires for trucks, as well as industrial and off-the-road vehicles. ContiTech specializes in the rubber and plastics technology, offering parts, components and systems for the automotive industry and other sectors. In January 2009, Schaeffler KG acquired 49.9% interest in the Company. GENERAL MOTORS: Fiat CEO Met Italy's Top Banks for Opel Loan ------------------------------------------------------------ Bloomberg News, citing daily Il Messaggero, reports that Fiat SpA Chief Executive Officer Sergio Marchionne has met with executives at Italy's top banks about granting credit lines for as much as EUR7 billion (US$9.5 billion) to refinance Adam Opel GmbH's existing loans. Mr. Marchionne recently met with his counterparts at Intesa Sanpaolo SpA and UniCredit SpA, the Italian newspaper said as cited by Bloomberg News. According to Bloomberg News, GM, facing bankruptcy if it doesn't reorganize by June 1, is willing to sell a majority stake of Opel to secure the unit's survival and has estimated the division needs EUR3.3 billion (US$4.5 billion) in aid from European governments. Investors had until May 20 to submit bids for Opel. A separate Bloomberg News report earlier said Mr. Marchionne intended to brief the Agnelli family on the carmaker's plan for Opel. He will outline Fiat's expansion plans, the report said citing an official for Exor SpA, Agnelli's publicly traded company. Exor is Fiat's largest shareholder. About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM Europe is based in Zurich, Switzerland, while General Motors Latin America, Africa and Middle East is headquartered in Miramar, Florida. As reported 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 presented the U.S. 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 roughly US$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. GENERAL MOTORS: Fiat CEO Offers Opel Assets "Better Than Cash" -------------------------------------------------------------- Ryan Chilcote at Bloomberg News reports that Fiat SpA Chief Executive Officer Sergio Marchionne said his company's takeover offer for General Motors Corp.'s Adam Opel GmbH unit will include assets that are "better than cash." "You're getting a whole pile of assets that produce cash, which is as good or probably better than cash," the report quoted Mr. Marchionne as saying during an interview with Bloomberg Television in Frankfurt. The report relates Mr. Marchionne didn't give financial details about Fiat's offer of assets rather than cash. "What we can offer Opel is a lot. Cash runs out; assets that produce cash don't," he said. According to Bloomberg News, GM, facing bankruptcy if it doesn't reorganize by June 1, is willing to sell a majority of Opel to secure the unit's survival and has estimated the division needs EUR3.3 billion (US$4.1 billion) in aid from European governments. Fiat foresees that an Opel takeover will require as much as EUR7 billion in aid spread among European governments, the report says citing German Economy Minister Karl-Theodor zu Guttenberg. A Dow Jones report posted at CNNMoney.com said Fiat has presented a formal offer for GM's Opel and Vauxhall. Citing Fiat in an emailed statement, Dow Jones relates the Turin-based carmaker said that if the deal is finalized, the new company will merge Fiat Group Automobiles, including Chrysler's stake, and Opel. The deadline for submission of bids for Opel was May 20. About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM Europe is based in Zurich, Switzerland, while General Motors Latin America, Africa and Middle East is headquartered in Miramar, Florida. As reported 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$82.2 billion in total assets and US$US$172.8 billion in total liabilities, resulting in US$90.5 billion in stockholders' deficit. On April 27, General Motors presented the U.S. 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 roughly US$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. GENERAL MOTORS: More Opel Bidders May Come, Labor Leader Says ------------------------------------------------------------- Fiat SpA and Magna International Inc., vying for a stake in General Motors Corp.'s Adam Opel Gmbh unit, will probably face competitors for the holding, Bloomberg News reports, citing Klaus Franz, the division's top labor leader. "I expect more than two bids" for Opel and its Vauxhall sister brand in the U.K., Mr. Franz told Bloomberg News in a telephone interview. Germany's government is unlikely to reach a decision on any proposals "before next week." According to Bloomberg News, investors had until yesterday, May 20, to submit bids for Opel. GM, facing bankruptcy if it doesn't reorganize by June 1, is willing to sell a majority stake of Opel to secure the unit's survival and has estimated the division needs EUR3.3 billion (US$4.5 billion) in aid from European governments, Bloomberg News discloses. About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM Europe is based in Zurich, Switzerland, while General Motors Latin America, Africa and Middle East is headquartered in Miramar, Florida. As reported 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$82.2 billion in total assets and US$US$172.8 billion in total liabilities, resulting in US$90.5 billion in stockholders' deficit. On April 27, General Motors presented the U.S. 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 roughly US$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. HEIDELBERGCEMENT AG: Moody's Reviews 'B1' Rating for Likely Cut --------------------------------------------------------------- Moody's has left HC's ratings at B1/on review for possible downgrade following the support the company has received in the short-term rollover of a major maturity of its bank lines. In Moody's opinion HeidelbergCement is well placed to be a key player in its industry with a good competitive position going forward due to (i) the company's solid business profile, based on the company's favorable geographic diversification and its strong market positions in many of its markets, and (ii) the expectation that HeidelbergCement will generate positive free cash flows -- albeit at relatively small amounts - in the current financial year -- which could be used to reduce debt despite the weak economic environment without the need of additional financing and (iii) a high likelihood of much stronger free cash flow generation when the economy turns around. "At the same time Moody's note that the company is likely to carry a heavy debt burden for some time, absent of material disposals, leaving its management to navigate through potential challenging scenarios in a protracted economic downturn." said Matthias Hellstern, Moody's lead analyst for HeidelbergCement The ability of HC to attract sizeable new equity also appears limited and therefore dependency on the agreement from its banks to amend the covenant structure and extend the tenor of its major credit agreements remains key to relieving the current pressure. The continuation of the ratings review reflects the uncertainty surrounding these bank negotiations. Moody's understands that the bond documentation may allow bank lenders, under certain conditions, to be secured by assets or upstream guarantees without triggering negative pledge clauses. Therefore a subordination of the bonds might -- according to Moody's LGD methodology -- lead to a differential of up to two notches to the assigned corporate family rating should the company's banks successfully strengthen their security package. Moody's last rating action on HeidelbergCement on February 9, 2009, was to downgrade the company's ratings to B1 and place the rating on review for possible downgrade. HeidelbergCement AG is the world's third-largest cement producer. HC generated sales of EUR13.5 billion per last 12 months (March 2009). With the acquisition of UK building materials producer Hanson plc in mid-2007, HC is now the world's largest producer of aggregates with an annual output in 2007 of 334 mt, and the second-largest producer of ready-mixed concrete with an output of 46 million cubic meters, behind Cemex. HERTIE GMBH: To Close 54 Stores; 2, 600 Jobs Affected ----------------------------------------------------- BBC News reports German department store chain German Hertie GmbH, part-owned by British financial conglomerate Dawnay Day, is to close all its 54 stores with the loss of 2,600 jobs. BBC News relates at a meeting in Essen, 84% of Hertie's creditors voted in favor of shutting it down, after officials said they saw no chance of keeping it going. According to BBC News, at the meeting in Essen, insolvency administrator Biner Baehr of White & Case LLP recommended the closure of Hertie, blaming Dawnay Day for the company's failure. Mr. Baehr, as cited by BBC News, said Dawnay Day had "no idea" about how to run a department store and was mainly interested in making as much money out of the company as possible. Citing Deutsche Presse Agentur, Bloomberg News discloses an investor group on Tuesday retracted its offer for the chain. As reported in the Troubled Company Reporter-Europe on Aug. 6, 2008, Hertie filed for commencement of insolvency proceedings at the District Court of Essen on July 31, 2008. According to Bloomberg News, the chain filed for insolvency after its debt-restructuring talks failed. PORSCHE SE: Lower Saxony to Keep 20% Stake After Porsche Merger --------------------------------------------------------------- Andreas Cremer at Bloomberg News reports that Lower Saxony Prime Minister Christian Wulff said Volkswagen AG and Porsche Automobil Holding SE should sell a stake in the company resulting from a merger to a foreign investor. According to the report, the families controlling the carmakers agreed on May 6 to create an integrated car manufacturer that would put Porsche alongside VW brands. Though merger talks have been put on hold, in a statement obtained by Bloomberg News, Porsche said negotiations will resume, without giving details. The German state has no intention of increasing its 20 percent stake in VW after the carmaker's planned combination with Porsche, Mr. Wulff told Bloomberg News in an interview in Volkswagen's hometown of Wolfsburg, adding about 30 percent of the new company will be available to investors once the owners sort out its structure. Bloomberg News relates that talks to hash out details of a merger are on hold after VW Supervisory Board Chairman Ferdinand Piech said May 11 that VW wouldn't help "solve" Porsche's financial problem and that Porsche must trim its EUR9 billion (US$12 billion) in net debt. Porsche, Bloomberg News notes, owns about 51 percent of Volkswagen. Debt Repayment Deadline Looms As reported in the Troubled Company Reporter-Europe on May 20, 2009, Patrick Donahue at Bloomberg News, citing German newspaper Bild Zeitung, said Porsche has less than two weeks to extend a credit line of more than EUR1 billion (US$1.3 billion). Bloomberg News said according to Bild, unidentified people close to the company said the carmaker has until the end of May to refinance the credit facility and Porsche would run into a "dangerous" liquidity shortage of it didn't meet the requirements. Porsche denied the report saying it doesn't face short-term financing problems, Bloomberg News disclosed. "There are no due dates and no financial gaps," Porsche spokesman Frank Gaube told Bloomberg News by telephone. Stuttgart, Germany-based Porsche Automobil Holding SE (ETR:PAH3) -- http://www.porsche-se.com/-- is a holding company engaged in the car manufacture industry. The Company's core products are sports cars and all-terrain vehicles. The Porsche sports car range includes the Boxster, the Cayman, the 911 and the Carrera GT. The Boxster and the Boxster S are contemporary reinterpretations of the Company's original roadsters, the 356/1 and the 550 Spyder. There are several varieties of the 911, representing the model's continuous evolution. The Carrera GT has the race-derived chassis construction and minimum weight. The Company's all-terrain models, Cayenne, Cayenne S, Cayenne Turbo and Cayenne Turbo S are balanced, four-wheel drive vehicles for on-road and off-road use. Porsche Automobil Holding SE also offers financing services, spare parts and accessories for new and classic models, as well as an approved used car service. As of October 20, 2008, the Company owned a 42.6% stake in Volkswagen AG. SPRIO ANLAGENTECHNIK: Claims Registration Period Ends June 3 ------------------------------------------------------------ Creditors of Sprio Anlagentechnik GmbH have until June 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 1, 2009, at which time the insolvency manager will present his first report. The meeting of creditors will be held at: The District Court of Leipzig Hall 145 Enforcement Court Bernhard Goering Strasse 64 04275 Leipzig Germany Claims set out in the insolvency manager's report will be verified by the court during this meeting. Creditors may also constitute a creditors' committee or opt to appoint a new insolvency manager. The insolvency manager can be reached at: Stephan Poppe Kathe-Kollwitz- St. 9 04109 Leipzig Germany, Tel: 910470 Fax: 9104710 The court opened bankruptcy proceedings against the company on May 5, 2009. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: Sprio Anlagentechnik GmbH Attn: Holger Weidmann and Thomas Weidmann, Managers Christian-Grunert- St. 2 04288 Leipzig Germany TACKE BETEILIGUNGS: Claims Registration Period Ends July 7 ---------------------------------------------------------- Creditors of Tacke Beteiligungs GmbH have until July 7, 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 July 28, 2009, at which time the insolvency manager will present his first report. The meeting of creditors will be held at: The District Court Muenster Meeting Hall 101 B Gerichtsstr. 2-6 48149 Muenster 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: Michael Moenig Schorlemer Strasse 26 48143 Muenster Germany Tel: 0251/38484-333 Fax: +4925138484300 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: Tacke Beteiligungs GmbH Attn: Gertruda Maria Gerarda Korsten van Veghel Everswinkeler Strasse 59 48231 Warendorf Germany TBA LOGISTIC: Claims Registration Period Ends June 2 ---------------------------------------------------- Creditors of TBA Logistic & Trading GmbH have until June 2, 2009, to register their claims with court-appointed insolvency manager. Creditors and other interested parties are encouraged to attend the meeting at 10.00 a.m. on June 26, 2009, at which time the insolvency manager will present his first report. The meeting of creditors will be held at: The District Court of Loerrach Hall 5 Room 2.21 Bahnhofstr. 4 a 79539 Loerrach 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: Ingo Michelsen Luisen St. 5 79539 Loerrach Germany Tel: 0 76 21/ 4 22 58 80 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: TBA Logistic & Trading GmbH Attn: Ridvan Serter, Manager Colmarer St. 1 79576 Weil am Rhein Germany VITA BAU: Claims Registration Period Ends June 5 ------------------------------------------------ Creditors of Vita Bau 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 8:00 a.m. on July 15, 2009, at which time the insolvency manager will present his first report. The meeting of creditors will be held at: The District Court of Stuttgart Room 178 Hauffstr. 5 70190 Stuttgart 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. Holger Leichtle Dannecker St. 52 70182 Stuttgart Germany Tel: 0711/23 88 90 Fax: 0711/23 88 930 The court opened bankruptcy proceedings against the company on May 5, 2009. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: Vita Bau GmbH Attn: Viktor Kerschbaumer, Manager Brand St. 2 71120 Grafenau Germany WALDHOF POSTTEICH: Claims Registration Period Ends June 30 ---------------------------------------------------------- Creditors of Waldhof Postteich GmbH have until June 30, 2009, to register their claims with court-appointed insolvency manager. Creditors and other interested parties are encouraged to attend the meeting at 11:30 a.m. on Aug. 4, 2009, at which time the insolvency manager will present his first report. The meeting of creditors will be held at: The District Court of Detmold Meeting Room 12 Gerichtsstrasse 6 32756 Detmold Germany Claims set out in the insolvency manager's report will be verified by the court during this meeting. Creditors may also constitute a creditors' committee or opt to appoint a new insolvency manager. The insolvency manager can be reached at: Raimund Schafmeister Moltke St. 12 32756 Detmold 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: Waldhof Postteich GmbH Attn: Ina Franke, Manager Postteichweg 30 32758 Detmold Germany * GERMANY: Receives 'About' 20 State Funding Applications --------------------------------------------------------- Tony Czuczka at Bloomberg News reports that Germany's Deputy Economy Minister Hartmut Schauerte said about 20 major companies have applied to a government fund for possible loan guarantees totalling about EUR6 billion (US$8 billion). No requests have yet been approved, Mr. Schauerte said, without naming any of the companies, the report relates. ============= I R E L A N D ============= ANGLO IRISH: Fitch Downgrades Government Guaranteed Debt -------------------------------------------------------- Fitch Ratings has downgraded the government guaranteed debt of three Irish credit institutions, Anglo Irish Bank Corporation, EBS Building Society and Irish Nationwide Building Society, to 'AA+' from 'AAA'. The agency has simultaneously removed the Rating Watch Negative which it had applied to the institutions' government guaranteed debt in March 2009. The rating action reflects Fitch's downgrade last month of Ireland's sovereign rating to 'AA+' from 'AAA' and the removal of the RWN and assigning of a Negative Outlook . The government guarantee in respect of the institutions' debt lasts until 28 September 2010 and relates to all non-hybrid wholesale funding. The rating action has no impact on the 'AAA' ratings assigned to the covered bonds issued by Anglo Irish Bank Corporation or EBS Building Society or their subsidiaries because these ratings do not depend on the guarantee. The ratings for the three institutions and their subsidiaries are: Anglo Irish Bank Corporation -- Long-term Issuer Default Rating: 'A-' (A minus); Outlook Stable -- Short-term Issuer Default Rating: 'F1+' -- Individual: 'F' -- Support: '1' -- Support Rating Floor: 'A-' -- Subordinated debt: 'BBB+' -- Upper Tier 2: 'BB' Rating Watch Negative -- Preference shares: 'BB-' Rating Watch Negative -- Mortgage covered bonds: 'AAA' Anglo Irish Mortgage Bank -- Long-term Issuer Default Rating: 'A-' (A minus); Outlook Stable -- Short-term Issuer Default Rating: 'F1+' -- Support: '1' -- Mortgage covered bonds: 'AAA' EBS Building Society -- Long-term Issuer Default Rating: 'BBB'; Rating Watch Evolving -- Short-term Issuer Default Rating: 'F1+' -- Individual: 'C/D' Rating Watch Evolving -- Support: '2' -- Support Rating Floor: 'BBB-' -- Senior unsecured debt: 'BBB+', Rating Watch Evolving -- Preference shares: 'BB+' Rating Watch Evolving EBS Mortgage Finance -- Long-term Issuer Default Rating: 'BBB'; Rating Watch Evolving -- Short-term Issuer Default Rating: 'F1+' -- Support: '2' -- Mortgage covered bonds: 'AAA' Irish Nationwide Building Society -- Long-term Issuer Default Rating: 'BBB-'; Outlook Stable -- Short-term Issuer Default Rating: 'F1+' -- Individual: 'D/E' -- Support: '2' -- Support Rating Floor: 'BBB-' -- Senior unsecured debt: 'BBB-' -- Subordinated debt: 'BB+' BANK OF IRELAND: S&P Junks Ratings on 6 Hybrid Capital Securities ----------------------------------------------------------------- Standard & Poor's Ratings Services said that it has lowered to 'C' from 'BB' the issue ratings on six hybrid capital securities issued by subsidiaries of Bank of Ireland (BOI; the trading name of the Governor and Company of the Bank of Ireland; A/Watch Neg/A- 1). This action follows BOI's announcement of tender offers for six series of hybrid capital securities with an aggregate value of about EUR3 billion. S&P also removed the ratings on these securities from CreditWatch with negative implications, where they were originally placed on Nov. 14, 2008. This action does not affect the issuer credit ratings on BOI. Under S&P's criteria, S&P characterize the BOI tender offers as a "distressed exchange." As a result, S&P lowered the ratings on the tender offer securities to 'C', reflecting S&P's opinion that the exchange is equivalent to a payment deferral. Upon completion of the offers, S&P will review the remaining tender offer securities and likely raise the ratings on them to the level of the ratings on BOI's hybrid securities without voting rights that are not subject to the tender offers. Separately, S&P lowered the ratings on BOI's three hybrid securities not subject to the tender offers. S&P downgraded two hybrid securities with voting rights in certain circumstances to 'B-' from 'BB' and one security without voting rights to 'B' from 'BB', and removed all the ratings from CreditWatch with negative implications where they were originally placed on Nov. 14, 2008. These rating actions were part of a review of hybrid security ratings of several European financial institutions that have received state aid or that are likely, in S&P's opinion, to receive state aid in the near future. BOI launched its tender offers on May 19, 2009. BOI has indicated minimum purchase prices for these tender offer securities of between EUR380 and EUR500 per EUR1,000, which would represent a substantial discount to par, but a premium on recent market prices. According to S&P's criteria, S&P may view a tender or exchange offer as distressed if investors accept less than the original promise because of the risk that the issuer will not fulfill its original obligations. S&P considers that BOI's offers for these securities constitute a distressed exchange for two reasons. First, S&P believes that investors who accept the offers will realize a substantial loss relative to par. Second, S&P expects BOI to receive further state aid (proposed through Ireland's National Asset Management Agency plan). S&P understand this will require European Commission approval, which could include a restructuring plan that restricts dividend and interest payments on BOI's hybrid capital. While BOI may be willing to service its hybrid securities, S&P believes that the potential that BOI could be prohibited from doing so (by the Irish authorities or the EC) could compel investors to accept the offer, essentially making the acceptance equivalent to a payment deferral. A successful completion of the tender offers will moderately improve BOI's capitalization. S&P expects that the bank will book a profit as a result of investors' acceptances of the offers, reflecting the difference between the offer value and the book value of the tender offer securities. For example, assuming a 45% average participation rate and an average offer of 45% of par, by S&P's calculation there would be a pretax gain of about EUR740 million. This would boost the Tier 1 capital ratio by approximately 70 basis points, based on pro forma risk-weighted assets on March 31, 2009. Given that BOI currently has hybrid capital significantly in excess of S&P's gearing bands, S&P believes S&P's total adjusted capital measure would also increase following completion of the offers, despite the reduction in outstanding Tier 1 capital. Ratings List Downgraded; CreditWatch/Outlook Action BOI Capital Funding (No.1) LP (1) EUR600 mil 6.25% fxd/var non-cum perp callable To From -- ---- C BB/Watch Neg BOI Capital Funding (No.2) LP (1) US$800 mil var rate /fltg rate gtd non-voting non-cum callable perp pfd secs To From -- ---- C BB/Watch Neg BOI Capital Funding (No.3) LP (1) US$400 mil var rate /fltg rate gtd non-voting non-cum callable perp pref secs To From -- ---- C BB/Watch Neg BOI Capital Funding (No.4) LP (1) GBP500 mil var rate fxd/fltg rate gtd non-voting non-cum perp pref secs To From -- ---- C BB/Watch Neg Bank of Ireland UK Holdings PLC GBP350 mil 6.25% callable perp pfd secs hybrid EUR600 mil step-up callable perp pfd secs hybrid To From -- ---- C BB/Watch Neg Bank of Ireland US$150 mil 6.187% hybrid To From -- ---- B BB/Watch Neg EUR63.49 mil GBP18.76 mil 12% non-cum pfd stk To From -- ---- B- BB/Watch Neg (1) Guaranteed by Bank of Ireland. CEDO PLC: Moody's Cuts Ratings on 22 Series of Notes to 'Ca' ------------------------------------------------------------ Moody's Investors Service has downgraded 23 ratings on 20 series of notes issued by CEDO PLC and three related loans. This synthetic CDO refers to a portfolio of Equity Default Swaps. The portfolio comprises between 55 and 60 EDS in the so-called "Risk Portfolio", on which the SPV is protection seller, and the same number of EDS in the so-called "Insurance Portfolio", on which the SPV is protection buyer. At maturity of the transaction, the number of Net Equity Events (i.e. the difference in number of Equity Events in the Risk Portfolio and in the Insurance Portfolio) defines the amount of loss to be paid by the SPV to the protection buyer. The number of Net Equity Events is the total number of Hits experienced in the Risk Portfolio less the total number of Hits experienced in the Insurance Portfolio. The primary performance indicator of an EDS is the Barrier, which is the Initial Barrier multiplied by the ratio of the EDS Price at closing and its Current Price. Note that stock prices are adjusted when corporate actions affect a reference entity according to the ISDA Equity Derivatives Definitions. Barriers are computed using the 50-day moving average stock price. The downgrades are a result of either the buy-back of the notes which resulted in the termination of notes or a result of a restructuring of the notes. Moody's views these events as distressed exchanges which had the effect of allowing the SPV to avoid a payment default at maturity. The rating actions are: (1) Series 1 Tranche G EUR15,000,000 Asset-Backed Deferrable Floating Rate Notes due 2011 -- Current Rating: Ca -- Prior Rating: Caa1 -- Prior Rating Action Date: 21 January 2009, downgraded from Baa2 to Caa1 (2) Series 2 Tranche A Asset-Backed Deferrable Floating Rates Notes due 2011 -- Current Rating: Ca -- Prior Rating: Caa1 -- Prior Rating Action Date: 21 January 2009, downgraded from Baa3 to Caa1 (3) Series 2 Tranche B Asset-Backed Deferrable Floating Rate Notes Due 2011 -- Current Rating: Ca -- Prior Rating: Caa2 -- Prior Rating Action Date: 21 January 2009, downgraded from B1 to Caa2 (4) Series 2 Tranche C Asset-Backed Deferrable Floating Rate Notes due 2011 -- Current Rating: Ca -- Prior Rating: Caa3 -- Prior Rating Action Date: 21 January 2009, downgraded from B3 to Caa3 (5) Series 2 Tranche J Asset-Backed Fixed Rate Notes due 2011 -- Current Rating: Ca -- Prior Rating: Caa2 -- Prior Rating Action Date: 21 January 2009, downgraded from B3 to Caa2 (6) Series 2 Tranche G Asset-Backed Deferrable Floating Rate Notes due 2011 -- Current Rating: Ca -- Prior Rating: Caa3 -- Prior Rating Action Date: 21 January 2009, downgraded from B3 to Caa3 (7) Series 2 Tranche I Asset-Backed Fixed Rate Notes due 2011 -- Current Rating: Ca -- Prior Rating: Caa1 -- Prior Rating Action Date: 21 January 2009, downgraded from B3 to Caa1 (8) Series 2 Tranche H Asset-Backed Floating Rate Notes due 2011 -- Current Rating: Ca -- Prior Rating: Caa3 -- Prior Rating Action Date: 21 January 2009, downgraded from B3 to Caa3 (9) Floating Rate Loan Facility in relation to Series 2 Tranche B Asset-Backed Deferrable Floating Rate Notes due 2011 -- Current Rating: Ca -- Prior Rating: Caa2 -- Prior Rating Action Date: 21 January 2009, downgraded from B1 to Caa2 (10) Floating Rate Loan Facility in relation to the Series 2 Tranche C Asset-Backed Deferrable Floating Rate Notes due 2011 -- Current Rating: Ca -- Prior Rating: Caa3 -- Prior Rating Action Date: 21 January 2009, downgraded from B3 to Caa3 (11) Series 4 Tranche E EUR47,000,000 Asset Backed Deferrable Floating Rate Notes due 2012 -- Current Rating: Caa2 -- Prior Rating: Caa1 -- Prior Rating Action Date: 21 January 2009, downgraded from Ba1 to Caa1 (12) Series 4 Tranche F EUR17,000,000 Asset Backed Deferrable Floating Rate Notes due 2012 -- Current Rating: Ca -- Prior Rating: Caa2 -- Prior Rating Action Date: 21 January 2009, downgraded from B2 to Caa2 (13) Series 4 Tranche G US$2,000,000 Asset-Backed Deferrable Floating Rate Notes due 2012 -- Current Rating: Ca -- Prior Rating: B3 -- Prior Rating Action Date: 21 January 2009, downgraded from A2 to B3 (14) Series 4 Tranche I US$12,000,000 Asset-Backed Deferrable Floating Rate Notes due 2012 -- Current Rating: Ca -- Prior Rating: Caa2 -- Prior Rating Action Date: 21 January 2009, downgraded from B2 to Caa2 (15) Series 4 Tranche J US$5,000,000 Asset-Backed Deferrable Fixed Rate Notes due 2012 -- Current Rating: Ca -- Prior Rating: Caa2 -- Prior Rating Action Date: 21 January 2009, downgraded from B2 to Caa2 (16) Series 4 Tranche L US$15,000,000 Asset-Backed Deferrable Floating Rate Notes due 2012 -- Current Rating: Ca -- Prior Rating: Caa2 -- Prior Rating Action Date: 21 January 2009, downgraded from B2 to Caa2 (17) Series 4 Tranche M US$15,000,000 Asset-Backed Deferrable Floating Rate Notes due 2012 -- Current Rating: Ca -- Prior Rating: Caa1 -- Prior Rating Action Date: 21 January 2009, downgraded from Ba1 to Caa1 (18) Series 4 Tranche O US$10,000,000 Asset-Backed Deferrable Floating Rate Notes due 2012 -- Current Rating: Ca -- Prior Rating: Caa1 -- Prior Rating Action Date: 21 January 2009, downgraded from Ba1 to Caa1 (19) Series 4 Tranche P US$2,000,000 Asset-Backed Deferrable Floating Rate Notes due 2012 -- Current Rating: Ca -- Prior Rating: Caa2 -- Prior Rating Action Date: 21 January 2009, downgraded from B3 to Caa2 (20) Series 5 Tranche A EUR35,000,000 Asset-Backed Floating Rate Notes due 2013 -- Current Rating: Ca -- Prior Rating: B3 -- Prior Rating Action Date: 21 January 2009, downgraded from A1 to B3 (21) Series 5 Tranche F CHF 25,000,000 Asset Backed Floating Rate Notes due 2013 -- Current Rating: Ca -- Prior Rating: B3 -- Prior Rating Action Date: 21 January 2009, downgraded from A1 to B3 (22) Series 5 Tranche H JPY 500,000,000 Asset-Backed Floating Rate Notes due 2013 -- Current Rating: Ca -- Prior Rating: Caa2 -- Prior Rating Action Date: 21 January 2009, downgraded from Ba2 to Caa2 (23) Facility Agreement in relation to Series 5 Tranche A EUR35,000,000 Asset-Backed Floating Rate Notes due 2013 -- Current Rating: Ca -- Prior Rating: B3 -- Prior Rating Action Date: 21 January 2009, downgraded from A1 to B3 Moody's Main EDS Rating Monitoring Methodology Moody's approach to modeling portfolio of Equity Default Swaps at closing can be broadly summarized in three steps. Moody's identified three stock market regimes that display significantly different behaviors both in terms of likelihood of stock prices collapse and correlation structure: these are the Normal, Stress or Crash regimes, each with a related probability of occurrence. Then for each EDS and in each market regime, Moody's inferred, with the support of various statistical studies, a probability of the threshold being hit based on: (i) the initial rating of the reference entity, (ii) the maturity of the transaction and (iii) the threshold level (between 10% and 40%). Finally, the dependency structure (i.e., correlation) between EDS was defined -- it is mainly driven by equity return correlation and adjusted according to (i) the market regime, (ii) the industrial sector and (iii) the geographical area. The Monte Carlo method is the most suitable to rate synthetic CDO transactions, including EDS, as it allows to take into account global and industry correlations, and portfolio heterogeneity - in terms of triggers, ratings or amounts. In each Monte Carlo trial, entities are modeled separately - subject to the correlation structure determined above -- while distressed Equity Events and recovery rate upon trigger being hit are simulated. Cumulative losses are then computed on the rated tranches. The monitoring process is consistent with the rating methodology described above. Among other components, the monitoring committee reviews the result of two modeling approaches and three loss scenarios, as detailed below. For entities whose Barrier is above 40%, the two approaches considered relate to the computation of the probability of hitting the trigger and are these: -- In the first one, this probability is derived from a statistical analysis of world-wide indices; -- In the second one, it is derived from a stochastic simulation whose primary driver is the implied volatility obtained from the option market. The three loss scenarios considered in the determination of the rating are: -- One central loss scenario estimates the loss for each tranche based on the current share levels at maturity; -- Two alternative scenarios account respectively for a 20% increase and a 20% decrease of all stock prices together. Finally, the result of the monitoring model described above has been floored to Caa1 (respectively Caa2, Caa3) for tranches for which the central loss scenario predicts no loss (respectively partial loss, wipe-out.) The floor is set one notch higher for tranches for which the Equity Events observation period has not yet started. EUROCONNECT ISSUER: Moody's Junks Rating on Class D Notes --------------------------------------------------------- Moody's Investors Service has downgraded its ratings of four classes of notes issued by EuroConnect Issuer LC 2007-1 Limited. The transaction is a synthetic Balance Sheet CDO referencing a pool of bank originated corporate and SME loans aggregating EUR3,894.6 million as on Mar 31, 2009. Although replenishments are permitted until June 2011, Moodys's Investors Service understands that being in breach of the replenishment test, the portfolio is static at present. The rating actions reflect the deterioration in the credit quality of the transaction's reference portfolio, as indicated by the increase in the average rating factor from 477 (at closing in August 2007 on a pool size of EUR6,206.6 million) to 920 (Mar 2009 on a pool size of EUR3,894.6 million) and the revision of certain key assumptions that the agency uses to rate and monitor corporate CDOs. These revised assumptions incorporate Moody's expectation that European and global corporate default rates are likely to greatly exceed their historical long-term averages and reflect the heightened interdependence of credit markets in the current global economic contraction. Specifically, the changes include: (1) a 30% increase in the assumed likelihood of default for corporate credits in CDOs (2) an increase in the degree to which ratings are adjusted according to other credit indicators such as rating Reviews and Outlooks and (3) an increase in the default correlation applied to corporate portfolios as generated through a combination of higher default rates and increased asset correlations. These revised assumptions are described in greater detail in the press release published on January 15, 2009. Moody's notes that the global corporate loan sector currently has a negative outlook and has shown signs of increasing weakness in terms of credit performance. The sector is further stressed by the anticipated limited refinancing opportunities for EMEA corporate issuers over the next six to twelve months. In addition, for the majority of the underlying referenced assets, the equivalent Moody's ratings used in Moody's analysis are obtained through a mapping process between the originator's internal rating scale and Moody's public rating scale. To compensate for the absence of credit indicators such as ratings reviews and outlooks in mapped ratings, a half notch stress was applied to the mapping scale. Our analysis and rating action incorporates the impact of the 10% clean-up call option embedded in the transaction; provided the 31 Mar 2009 portfolio amortizes as scheduled, according to Moody's this clean up call could be exercised in approximately 4.7 years from today. 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 (December 2008) -- Framework for De-Linking Hedge Counterparty Risks from Global Structured Finance Cashflow Transactions (May 2007) The rating actions are: EuroConnect Issuer LC 2007-1 Limited EUR310,350,000 Class A Floating Rate Credit Linked Notes due 2026 -- Current Rating: Aa3 -- Prior Rating: Aaa, under review for downgrade -- Prior Rating Date: 24 Apr 2009, Aaa placed under review for possible downgrade EUR93,100,000 Class B Floating Rate Credit Linked Notes due 2026 -- Current Rating: Baa3 -- Prior Rating: A1, under review for downgrade -- Prior Rating Date: 24 Apr 2009, A1 placed under review for possible downgrade EUR62,050,000 Class C Floating Rate Credit Linked Notes due 2026 -- Current Rating: B1 -- Prior Rating: Baa2, under review for downgrade -- Prior Rating Date: 24 Apr 2009, Baa2 placed under review for possible downgrade EUR68,300,000 Class D Floating Rate Credit Linked Notes due 2026 -- Current Rating: Caa2 -- Prior Rating: Ba2, under review for downgrade -- Prior Rating Date: 24 Apr 2009, Ba2 placed under review for possible downgrade IRISH NATIONWIDE: Fitch Downgrades Government Guaranteed Debt ------------------------------------------------------------- Fitch Ratings has downgraded the government guaranteed debt of three Irish credit institutions, Anglo Irish Bank Corporation, EBS Building Society and Irish Nationwide Building Society, to 'AA+' from 'AAA'. The agency has simultaneously removed the Rating Watch Negative which it had applied to the institutions' government guaranteed debt in March 2009. The rating action reflects Fitch's downgrade last month of Ireland's sovereign rating to 'AA+' from 'AAA' and the removal of the RWN and assigning of a Negative Outlook . The government guarantee in respect of the institutions' debt lasts until 28 September 2010 and relates to all non-hybrid wholesale funding. The rating action has no impact on the 'AAA' ratings assigned to the covered bonds issued by Anglo Irish Bank Corporation or EBS Building Society or their subsidiaries because these ratings do not depend on the guarantee. The ratings for the three institutions and their subsidiaries are: Anglo Irish Bank Corporation -- Long-term Issuer Default Rating: 'A-' (A minus); Outlook Stable -- Short-term Issuer Default Rating: 'F1+' -- Individual: 'F' -- Support: '1' -- Support Rating Floor: 'A-' -- Subordinated debt: 'BBB+' -- Upper Tier 2: 'BB' Rating Watch Negative -- Preference shares: 'BB-' Rating Watch Negative -- Mortgage covered bonds: 'AAA' Anglo Irish Mortgage Bank -- Long-term Issuer Default Rating: 'A-' (A minus); Outlook Stable -- Short-term Issuer Default Rating: 'F1+' -- Support: '1' -- Mortgage covered bonds: 'AAA' EBS Building Society -- Long-term Issuer Default Rating: 'BBB'; Rating Watch Evolving -- Short-term Issuer Default Rating: 'F1+' -- Individual: 'C/D' Rating Watch Evolving -- Support: '2' -- Support Rating Floor: 'BBB-' -- Senior unsecured debt: 'BBB+', Rating Watch Evolving -- Preference shares: 'BB+' Rating Watch Evolving EBS Mortgage Finance -- Long-term Issuer Default Rating: 'BBB'; Rating Watch Evolving -- Short-term Issuer Default Rating: 'F1+' -- Support: '2' -- Mortgage covered bonds: 'AAA' Irish Nationwide Building Society -- Long-term Issuer Default Rating: 'BBB-'; Outlook Stable -- Short-term Issuer Default Rating: 'F1+' -- Individual: 'D/E' -- Support: '2' -- Support Rating Floor: 'BBB-' -- Senior unsecured debt: 'BBB-' -- Subordinated debt: 'BB+' WEAVERING MACRO: ISE Keeps Mum on Hedge Fund Investigation ---------------------------------------------------------- Arthur Beesley at the Irish Times reports that the Irish Stock Exchange has declined to say whether it is investigating or has investigated the affairs of the Weavering Macro Fixed Income Fund. "Our policy is not to comment on any investigation that may or may not be taking place," the Irish Times quoted a spokesman for the ISE as saying. The fund, which was targeted at high-net-worth clients, was incorporated in the Cayman Islands and listed on the ISE in August 2003, the Irish Times discloses. The Irish Times recalls the fund's ISE listing was suspended on March 11th and it was placed in liquidation a week later after failing to meet its investor demands for withdrawals. Hedge Fund Probe As reported in the Troubled Company Reporter-Europe on May 20, 2009, the Serious Fraud Office on May 15 conducted searches on two residential properties (one in Kent, the other in Surrey) assisted by the City of London Police, in connection with its investigation into an alleged fraud involving the recently collapsed hedge fund, Weavering Capital. Two men, aged 43 and 45, were arrested and have been taken to a police station for questioning. Weavering Capital (UK) Limited is an English incorporated investment management firm, which went into administration on March 19, 2009, whose primary function was to act as investment advisor to a Cayman Islands incorporated hedge fund, Weavering Macro Fixed Income Fund Limited. Liquidators were appointed over the Macro Fund on March 19, 2009. The Weavering Macro Fixed Income Fund was understood to have funds under management of around US$639 million in late 2008. The investigation is currently focused on certain interest rate swap transactions between the Macro Fund and a company registered in the British Virgin Islands, Weavering Capital Fund Limited, which appears to be a related third party, and which inflated the apparent Net Asset Value of the Weavering Macro Fixed Income Fund. According to the Irish Times, when the ISE listing of the Weavering Macro Fixed Income Fund was suspended, the fund itself said an investigation into its assets had "revealed a related party transaction in the form of a large interest rate swap position of a material amount where the counterparty is a company controlled by a related party". The Irish Times says while the fund's main unencumbered asset was a series of derivative transactions valued in its balance sheet at US$637.1 million, the derivative counterparty had a net worth not exceeding US$50 million. * IRELAND: Property Developers May Avoid Collapse Under Nama Plans ------------------------------------------------------------------ David Clerkin and Ian Kehoe at the Sunday Business Post Online report that Ireland's largest property developers will be protected from collapse by the proposed National Asset Management Agency (Nama). According to the Post.ie, under advanced plans being drawn up in conjunction with the Department of Finance, Nama will agree not to force up to 20 of the country's top developers into receivership or liquidation. The Sunday Post Online says plans are being drawn up to ensure that bad loans taken on by Nama will be worked out over a period of at least ten years and that so-called 'firesales' of land banks at knockdown prices will be avoided, as officials fear that this would crystallize taxpayer losses. The Post.ie notes senior government sources insist that developers will remain liable to repay all the money they borrowed, although Nama will work with them to get projects moving again. The Post.ie discloses government sources insist that plans to establish Nama are advancing quickly. Under the developing framework, the government plans to outsource large aspects of Nama, the Post.ie discloses. The Post.ie states external advisers will be recruited to advise on everything from valuing assets to dealing with the European Commission. Mark Hennessy at the Irish Times reports Fine Gael deputy leader Richard Burton warned strongly against Nama buying toxic debt. Mr. Burton, as cited by the Irish Times, said the government should instead keep some options open, and set up a new bank "within six weeks" backed by a EUR2 billion State investment, but with access to EUR40 billion worth of European Central Bank funds, to feed necessary lending to businesses. The Irish Times discloses according to Mr. Burton, Nama would not work because the public would not trust that fair prices were paid for failed property loans, while it would also take years longer to deal with them after they had been bought. The government will have to raise EUR70 to EUR90 billion of debt to pay for Nama costs and this will cost EUR3 billion a year in interest payments, the Irish Times says citing Mr. Burton. ========= I T A L Y ========= CAPITAL MORTGAGE: S&P Lowers Rating on Class C Notes to 'BB' ------------------------------------------------------------ Standard & Poor's Ratings Services has removed from CreditWatch with negative implications and lowered its credit rating on the class C notes issued by Capital Mortgage S.r.l. At the same time, S&P affirmed its ratings on the class A1, A2, and B notes. These rating actions follow a review of this transaction in light of the recent performance of the underlying asset pool. The downgrade of the class C notes has been mainly driven by the sharp increase in defaults to 3.20% from 2.74% over Q1. In this transaction, mortgage loans are considered in default if they are in arrears for 180 days or more. When the cumulative default rates in Capital Mortgages reach a certain percentage, interest payments on the class B and C notes may be deferred as principal collections can no longer be used to cover interest shortfalls. These triggers are set at 7% and 15% for the class C and B notes, respectively. S&P's ratings analysis takes into consideration the likelihood that interest on the junior and mezzanine classes of notes are deferred as a result of this structural feature. On the last interest payment date the fifth consecutive draw on the cash reserve occurred, for a further EUR3.7 million. The current level of the reserve is EUR21.4 million, 42% lower than its target amount of EUR37.2 million. The drawings were all made to cover defaulted loans. Capital Mortgages features a structural mechanism that traps excess spread to cover 100% of the balance of defaulted mortgages. In the latest quarter the transaction has shown a reduction in delinquencies as an effect of the current low interest rate environment, in particular the 90+ day delinquency level is down to 1.44% from 1.59%. Ratings List Capital Mortgages S.r.l. 2007-1 EUR2,479.35 Million Mortgage-Backed Floating-Rate Notes Rating Lowered and Removed From CreditWatch Negative Rating ------ Class To From ----- -- ---- C BB BBB-/Watch Neg Ratings Affirmed Class Rating ----- ------ A1 AAA A2 AAA B AA PARMALAT SPA: To Buy Fresh Milk Operations in Australia ------------------------------------------------------- Jerrold Colten at Bloomberg News reports that Parmalat SpA said it will buy some fresh milk operations from Australia's National Foods Ltd. Parmalat will pay about AU$70 million (US$54 million) for the assets, the report says citing the company in a statement. About Parmalat S.p.A. Headquartered in Milan, Italy, Parmalat S.p.A. -- http://www.parmalat.net/-- sells nameplate milk products that can be stored at room temperature for months. It also has about 40 brand product lines, which include yogurt, cheese, butter, cakes and cookies, breads, pizza, snack foods and vegetable sauces, soups and juices. The company's U.S. operations filed for chapter 11 protection on Feb. 24, 2004 (Bankr. S.D.N.Y. Case No. 04-11139). Gary Holtzer, Esq., and Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP, represent the Debtors. When the U.S. Debtors filed for bankruptcy protection, they reported more than US$200 million in assets and debts. The U.S. Debtors emerged from bankruptcy on April 13, 2005. Parmalat S.p.A. and its Italian affiliates filed separate petitions for Extraordinary Administration before the Italian Ministry of Productive Activities and the Civil and Criminal District Court of the City of Parma, Italy on Dec. 24, 2003. Dr. Enrico Bondi was appointed Extraordinary Commissioner in each of the cases. The Parma Court has declared the units insolvent. On June 22, 2004, Dr. Bondi filed a Sec. 304 Petition, Case No. 04-14268, in the United States Bankruptcy Court for the Southern District of New York. Parmalat has three financing arms: Dairy Holdings Ltd., Parmalat Capital Finance Ltd., and Food Holdings Ltd. Dairy Holdings and Food Holdings are Cayman Island special-purpose vehicles established by Parmalat S.p.A. The Finance Companies are under separate winding up petitions before the Grand Court of the Cayman Islands. Gordon I. MacRae and James Cleaver of Kroll (Cayman) Ltd. serve as Joint Provisional Liquidators in the cases. On Jan. 20, 2004, the Liquidators filed Sec. 304 petition, Case No. 04-10362, in the United States Bankruptcy Court for the Southern District of New York. In May 2006, the Cayman Island Court appointed Messrs. MacRae and Cleaver as Joint Official Liquidators. Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP, and Richard I. Janvey, Esq., at Janvey, Gordon, Herlands Randolph, represent the Finance Companies in the Sec. 304 case. The Honorable Robert D. Drain presides over the Parmalat Debtors' U.S. cases. On June 21, 2007, the U.S. Court granted Parmalat permanent injunction. (Parmalat Bankruptcy News; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000). SESTANTE FINANCE: S&P Corrects May 12 Rating Press Release ---------------------------------------------------------- S&P is republishing this media release, originally dated May 12, 2009, to correct an error. In the list at the end, the current rating on the class C2 notes series 4 was incorrectly stated as BBB/Watch Neg instead of BB/Watch Neg. A corrected version is: Standard & Poor's Ratings Services placed on CreditWatch negative its credit ratings on the class B, C1, and C2 notes series 3 and 4 and the class C1 notes series 2 issued by Sestante Finance S.r.l. All the other classes of notes issued by Sestante Finance series 1, 2, 3, and 4 are unaffected. The rating actions follow a review of the series 1 to 4 Sestante transactions in light of the recent further deterioration in the performance of the underlying asset pools and connected draws under the respective cash reserves. Severe delinquencies in these four Sestante transactions increased substantially in the second half of 2008. On average they are now in the 5%-6% range (of the outstanding collateral), up from 2%-3% in mid-2008. The current higher levels of shorter term arrears suggest that the pressure on severe arrears and hence default levels could persist. More recent transactions tend to show a weaker performance, as measured by delinquency and default levels. S&P's analysis of the current underlying asset pool for series 4 showed that arrears and defaults are mainly concentrated in the higher loan-to-value ratio bands, especially in connection with floating-rate mortgage products and self-employed borrowers. It has to be noted that performance data does not fully incorporate the benefit of lower interest rates as most of the underlying mortgage loans reset quarterly. As a result of the swift increase in defaults and the structural provisioning mechanism in place, cash reserves in three of these four Sestante transactions were drawn at the most recent interest payment date. The cash reserves in series 2 and series 3 are now at 42% and 33% of their target balance, respectively. The concentration of defaults has been particularly harsh in series 4, where the cash reserve was fully depleted on just one payment date. S&P will now carry out a more detailed analysis of these series to investigate whether the current ratings on the classes placed on CreditWatch negative are consistent with the inherent risk profile of the mortgage loan portfolio. S&P's review will also involve an assessment of the operating implications of the corporate reorganization of Meliorbanca following its merger with Banca Popolare dell'Emilia Romagna S.C. (A-/Negative/A-2), its sole shareholder and backup servicer for all of the Sestante transactions. S&P will publish the results of S&P's further analysis in due course. These four Sestante transactions are all backed by pools of residential mortgage loans secured over properties in Italy. During the first 18 months of the deals, the portfolios were revolving, subject to replenishment criteria. Ratings List Ratings Placed On CreditWatch Negative Sestante Finance S.r.l. EUR647.2 Million Asset-Backed Floating-Rate Notes Series 2 Rating ------ Class To From ----- -- ---- C1 BBB/Watch Neg BBB Sestante Finance S.r.l. EUR890.9 Million Asset-Backed Floating-Rate Notes Series 3 Rating ------ Class To From ----- -- ---- B AA-/Watch Neg AA- C1 A-/Watch Neg A- C2 BBB/Watch Neg BBB Sestante Finance S.r.l. EUR647.9 Million Asset-Backed Floating-Rate Notes Series 4 Rating ------ Class To From ----- -- ---- B A+/Watch Neg A+ C1 BBB/Watch Neg BBB C2 BB/Watch Neg BB =================== K A Z A K H S T A N =================== ASTANA FINANCE: Halts Bond Payment ---------------------------------- JSC Astana Finance stopped paying interest and principal on US$175 million of 9 percent dollar bonds citing "deterioration" of its finances, Nariman Gizitdinov and Denis Maternovsky at Bloomberg News report. The mortgage lender will seek to restructure its domestic and international debts within 12 weeks, the lender said in a regulatory filing obtained by the news agency. Astana Finance's default follows London-traded Alliance Bank's on April 13 and state-controlled BTA Bank's on April 23, according to the report. In a statement, Astana Finance said it decided to suspend payments of interest and principal on their international obligations and principal payments on certain of its domestic obligations, as of May 15, 2009 in each case. "Various resulting factors, including the Tenge devaluation, a fall in real estate prices, a severe lack of liquidity and a further deterioration of the financial position of corporates and financial institutions in Kazakhstan, have led to a partial impairment of the company's credit portfolio and have resulted in losses related to FX and derivatives transactions," the company said in the statement. To assist in developing a restructuring proposal, Astana Finance has engaged J.P. Morgan Securities Ltd. as restructuring adviser, Clifford Chance LLP as international legal counsel and First Legal as Kazakh legal counsel. Astana Finance said it has an ongoing dialogue with JSC National Welfare Fund "Samruk-Kazyna" to assess the availability of any financial support to the company and to coordinate further measures to strengthen the company's financial situation. JSC Astana Finance a.k.a Astana Finans AO (KAS:ASFI) --- http://www.af.kz/--- is a Kazakhstan-based non-banking financial institution. It provides leasing services of such goods as agricultural machines and equipment, trucks and road construction machines, utilities and special machines, aircraft and aeronautic equipment, and rolling-stock. It also offers microcredits and loans, mortgages, business credits, mutual funds, insurance, hedging, and others. The Company has branch offices located in Astana, Almaty and Atyrau, Kazakhstan. As of January 01, 2009, it operated through nine wholly owned subsidiaries, one 99.97%-owned company and one affiliated company. Astana Finans AO's activities comprise the territories of Kazakhstan and the Russian Federation. ASTANA FINANCE: Fitch Cuts LT Issuer Default Ratings to 'RD' ------------------------------------------------------------ Fitch Ratings has downgraded Kazakhstan-based JSC Astana Finance's Long-term Issuer Default Ratings to 'RD' (Restricted Default) from 'CCC', thereby resolving the Watch Negative on the ratings. The agency has also downgraded JSC Astana Finance Leasing, a subsidiary of AF, to 'C' from 'CCC'. The downgrade follows AF's announcement that it has decided to suspend payments of interest and principal on its international obligations and to suspend principal payments on certain of its domestic obligations until it agrees and implements a restructuring of these obligations. AF's IDRs will remain on 'RD' until it has completed the expected restructuring of its outstanding debt and, in Fitch's opinion, is able to comply with new terms negotiated with its creditors, which may still follow receipt of financial support from the Kazakh authorities. Fitch understands that AFL has so far not defaulted on any of its obligations, and hence its ratings have not been downgraded to 'RD'. However, AFL's 'C' Long-term IDR reflects the now very high probability that it will end up in default on guarantees it has made in respect of certain AF borrowings (for example the public bonds issued by Astana Finance BV) or be forced into some form of wider coercive debt exchange or restructuring of its liabilities. AF was created in 1997 by the Municipality of Astana to facilitate development finance (loans, leasing and equity) for Astana, the capital of Kazakhstan, and for the surrounding Akmola region. It has since diversified geographically and into certain aspects of investment banking Rating actions are: JSC Astana Finance -- Long-term foreign currency IDR: downgraded to 'RD' from 'CCC'; removed from RWN -- Long-term local currency IDR: downgraded to 'RD' from 'CCC'; removed from RWN -- Short-term foreign currency IDR: downgraded to 'RD' from 'C' -- National Long-term rating: downgraded to 'RD' from 'B- (kaz))'; removed from RWN -- Individual rating: downgraded to 'F' from 'E' -- Support rating: affirmed at '5' -- Support Rating Floor: affirmed at 'No Floor' -- Senior unsecured debt: downgraded to 'C' from 'CCC'; removed from RWN; Recovery Rating affirmed at 'RR4' Astana Finance Leasing Company JSC -- Long-term foreign currency IDR: downgraded to 'C' from 'CCC'; remains on RWN -- Long-term local currency IDR: downgraded to 'C' from 'CCC'; remains on RWN -- Short-term foreign currency IDR: 'C'; placed on RWN -- National Long-term rating: downgraded to 'C(kaz))' from 'B- (kaz))'; remains on RWN -- Support rating: affirmed at 5 AZICOM LLP: Creditors Must File Claims by June 12 ------------------------------------------------- Creditors of LLP Azicom have until June 12, 2009, to submit proofs of claim to: The Specialized Inter-Regional Economic Court of South Kazakhstan Tynybaev Str. 42 Shymkent South Kazakhstan Kazakhstan The Specialized Inter-Regional Economic Court of South Kazakhstan region commenced bankruptcy proceedings against the company on March 3, 2009. ERMUHAN LLP: Creditors Must File Claims by June 12 -------------------------------------------------- Creditors of LLP Ermuhan have until June 12, 2009, to submit proofs of claim to: Chapaev Str. 2 Podstepnoye Terektinsky West Kazakhstan Kazakhstan The Specialized Inter-Regional Economic Court of West Kazakhstan commenced bankruptcy proceedings against the company on March 18, 2009 after finding it insolvent. The Court is located at: The Specialized Inter-Regional Economic Court of West Kazakhstan Seifullin Str. 37 Uralsk West Kazakhstan Kazakhstan HALYK SAVINGS: Should Restructure Debt Alone, Samruk-Kazyna Says ---------------------------------------------------------------- Nariman Gizitdinov and Denis Maternovsky at Bloomberg News report that the head of the Kazakh government holding company said Kazkommertsbank AO and Halyk Savings Bank, Kazakhstan's second- and third-largest lenders by assets, will have to restructure their debt themselves. "The responsibility of servicing external debt lies with the management of Kazkommertsbank and Halyk," Bloomberg News quoted Kairat Kelimbetov, head of the National Wellbeing Fund Samruk- Kazyna, as saying. The state controls 21 percent each of Kazkommertsbank and Halyk, the report says. The report recalls Almaty-based BTA Bank, the country's biggest bank, and Alliance Bank, the fourth-biggest, already are in talks to restructure debt after defaulting on their borrowings. Astana Finance, a lender also partly owned by the state, said May 19 it stopped paying interest and principal on its dollar bonds, becoming the third Kazakh bank to default since April 13, the report says. "If the negotiations to restructure the debt of BTA and Alliance Bank are successful, Kazkommertsbank and Halyk may follow," the report quoted Nurlan Smagulov, a member of the government’s anti- crisis council as saying. The report relates President Nursultan Nazarbayev's government has spent more than 734 billion tenge (US$4.9 billion) to support banks and businesses since the economic slowdown began in 2007. Kazakhstan-based Halyk Bank AO (Halyk National Savings Bank of Kazakhstan JSC or Halyk Bank JSC)(KAS:HSBK) -- http://eng.halykbank.kz/-- offers banking services to private and corporate clients. Its services include cash-settlements, loans, deposits, pensions, insurance, leasing, brokerage and asset management, safe deposit boxes, American Express checks, debit and credit cards, Internet banking and other services in national and foreign currencies. As of December 31, 2008, the Bank operated through 15 branches (13 wholly owned) located on the territory of Kazakhstan, Russia, Kyrgyzstan, Mongolia, Kyrgyzstan, Georgia and the Netherlands. KAZKOMMERTSBANK AO: Has No Plans to Restructure Debt ---------------------------------------------------- Nariman Gizitdinov and Denis Maternovsky at Bloomberg News report that the head of the Kazakh government holding company said Kazkommertsbank AO and Halyk Savings Bank, Kazakhstan's second- and third-largest lenders by assets, will have to restructure their debt themselves. "The responsibility of servicing external debt lies with the management of Kazkommertsbank and Halyk," Bloomberg News quoted Kairat Kelimbetov, head of the National Wellbeing Fund Samruk- Kazyna, as saying. The state controls 21 percent each of Kazkommertsbank and Halyk, the report says. The report recalls Almaty-based BTA Bank, the country's biggest bank, and Alliance Bank, the fourth-biggest, already are in talks to restructure debt after defaulting on their borrowings. Astana Finance, a lender also partly owned by the state, said May 19 it stopped paying interest and principal on its dollar bonds, becoming the third Kazakh bank to default since April 13, the report says. "If the negotiations to restructure the debt of BTA and Alliance Bank are successful, Kazkommertsbank and Halyk may follow," the report quoted Nurlan Smagulov, a member of the government's anti- crisis council as saying. The report relates President Nursultan Nazarbayev's government has spent more than 734 billion tenge (US$4.9 billion) to support banks and businesses since the economic slowdown began in 2007. No Plans to Restructure Debt Olzhas Auyezov at Reuters reports that Kazkommertsbank sought to calm investor fears following announcements by three other Kazakh lenders who said they would restructure their debt. "We are not planning any debt restructuring," Reuters quoted Executive Director Sergei Mokrousov as saying during a conference call. Reuters says Kazkommertsbank expects 2009 net profit similar to last year's. The bank's net profit fell to 20 billion tenge (US$166 million at the average 2008 rate) from 57.8 billion tenge in 2007, the report notes. The report recalls the government bought a 21.2 percent stake in Kazkommertsbank earlier this month as part of US$296 million share placement. Private Placement A report posted at tradingmarkets.com says Kazkommertsbank has raised KZT44,470 million (US$300.37 million) through a private placement of 204.33 million common shares at US$1.45 per common share and US$2.9 per GDR. According to the report, SamrukKazyna Welfare Fund, formed by The Government of Kazakhstan to manage all the state investments, has acquired 165.52 million common shares (21.2%) for KZT36,000 million (US$243.16 million). European Bank for Reconstruction and Development (EBRD) has acquired 27.49 million common shares (1.34%), The Bank of New York Mellon has acquired 9.7 million shares (0.47%), and 1.62 million common shares are acquired by minority shareholders in accordance with their pre-emptive rights, the report says. The report relates Kazkommertsbank intends to use the proceeds to compensate for the shortage of credit available in the Kazakh economy, as well as to ensure the stable operation of the company during the global financial crisis. About Kazkommertsbank Kazakhstan-based Kazkommertsbank AO a.k.a Kazkommertsbank JSC (KAS:KKGB) -- http://www.kkb.kz/-- is a commercial bank engaged in the provision of financial and banking services for corporate and individual clients. The Bank offers such services as the opening and maintaining of bank accounts, operations with securities, debit and credit cards and safety deposit boxes, currency exchange, lending, leasing and investment services, Internet banking, financial intermediation, insurance services, derivative instruments, guarantees and other financial services. As of December 31, 2008, the Bank had 23 branches located in Kazakhstan, one representative office located in London, the United Kingdom, as well as 13 subsidiaries and one affiliated company located in Kazakhstan, Russia, Tadzhikistan, and the Netherlands. REGION TECH: Creditors Must File Claims by June 12 -------------------------------------------------- Creditors of LLP Region Tech Resursy have until June 12, 2009, to submit proofs of claim to: The Specialized Inter-Regional Economic Court of Almaty Baizakov Str. 273b Almaty Kazakhstan The Specialized Inter-Regional Economic Court of Almaty commenced bankruptcy proceedings against the company on March 24, 2009. ROM TORG: Creditors Must File Claims by June 12 ----------------------------------------------- Creditors of LLP Rom Torg have until June 12, 2009, to submit proofs of claim to: Chapaev Str. 2 Podstepnoye Terektinsky district West Kazakhstan Kazakhstan The Specialized Inter-Regional Economic Court of West Kazakhstan commenced bankruptcy proceedings against the company on March 17, 2009 after finding it insolvent. The Court is located at: The Specialized Inter-Regional Economic Court of West Kazakhstan Seifullin Str. 37 Uralsk West Kazakhstan Kazakhstan TABYS SN: Creditors Must File Claims by June 12 ----------------------------------------------- Creditors of LLP Tabys SN have until June 12, 2009, to submit proofs of claim to: The Specialized Inter-Regional Economic Court of South Kazakhstan Tynybaev Str. 42 Shymkent South Kazakhstan Kazakhstan The Specialized Inter-Regional Economic Court of South Kazakhstan commenced bankruptcy proceedings against the company on March 3, 2009. * KAZAKHSTAN: May Need IMF's Help to Avert "Bond Crisis," ING Says ------------------------------------------------------------------ Bloomberg News reports that according to ING Groep NV, Kazakhstan may need International Monetary Fund financing to avert a "bond crisis" following defaults by three lenders. The report says Astana Finance, part-owned by the government, said May 19 it stopped paying interest and principal on US$175 million of bonds following Alliance Bank, the nation's fourth-biggest by assets, and state-controlled BTA Bank which defaulted in April. According to the report, companies are struggling after gross domestic product in Kazakhstan, holder of 3.2 percent of the world's oil reserves, shrank 2.2 percent in the first quarter on weakening demand for commodities after growth of more than 10 percent from 2000 through 2006. When asked if the IMF is considering a financial-rescue package, Bloomberg News says Simonetta Nardin, a spokeswoman, referred to a report issued by the fund last week that calls for "a full diagnostic assessment" of Kazakhstan's large banks. The report recalls Kazakhstan central bank Governor Grigori Marchenko said May 16 in London that the country won't turn to the Washington-based IMF, which has mounted rescues from Pakistan to Iceland in the past six months. =================== K Y R G Y Z S T A N =================== KEN-STROY LLC: Creditors Must File Claims by June 5 --------------------------------------------------- LLC Ken-Stroy has shut down. Creditors have until June 5, 2009, to submit proofs of claim to: Aitmatov Str. 45 Bishkek Kyrgyzstan =========== L A T V I A =========== * LATVIA: Insolvency Cases Up 40% in First Four Months of 2009 -------------------------------------------------------------- The Baltic Course's Nina Kolyak reports that BNS Insolvency Administration state agency acting director Helmuts Jauja said the number of insolvency cases in Latvia has increased by 40% in the first four months of the year. The report discloses according to the insolvency register, in the first four months of this year 877 insolvency cases were filed, including 32 individual insolvency cases. "Speaking about forecasts, I think that the number of insolvencies filed will depend on the Latvian and global economic developments, including Latvia's success in implementation of the economic stimulation plans," the report quoted Mr. Jauja as saying. ===================== N E T H E R L A N D S ===================== CARLSON WAGONLIT: Moody's Downgrades Corp. Family Rating to 'B3' ---------------------------------------------------------------- Moody's Investors Service has downgraded to B3 from B2 the corporate family rating and Probability of Default Rating of Carlson Wagonlit BV. At the same time, Moody's has downgraded CWT's EUR285 million notes to Caa2 from Caa1 and US$850 million senior facilities to B2 from B1. The rating outlook is negative. This rating action concludes the rating review initiated on February 26, 2009. The downgrade reflects Moody's concerns that the company carries a very significant debt position, which lead to higher leverage and weaker debt protection metrics than appropriate for a B2 CFR at this point in the business cycle, given the expected pressure on cash flow generation over the short-term," explained Marika Makela, an Assistant Vice President-Analyst in Moody's Corporate Finance Group. Moody's nevertheless recognizes the viability of CWT's business profile, with its position as one of the world's leading travel management companies and its diversified customer base, which should help its performance to recover when the global travel market picks up. Furthermore, Moody's acknowledge that management has taken prudent short- and long-term cost reduction measures to preserve the company's overall credit profile; these positive actions have been incorporated in the rating decision to reposition the Corporate Family Rating at B3. Moody's also notes that, to provide temporary relief and more headroom under financial covenants, CWT has made a proposal to its senior lenders to amend certain provisions of the Senior Facilities Agreement. The rating action is premised on Moody's assumption that lenders will remain supportive and that covenants will be reset to provide sufficient headroom over the intermediate term. The negative outlook reflects Moody's view of the execution risks involved with delivering the cost savings from these restructuring measures and the risk of further declines in business travel which is expected to remain under pressure at least throughout 2009, and therefore likely to impact the company's revenue growth. Furthermore, although Moody's recognizes CWT's historical free cash flow generation capacity, Moody's anticipate cash flows to be constrained in the current financial year due to the soft operating environment and heavy restructuring costs. The last rating action was implemented on February 26, 2009, when Moody's downgraded CWT's CFR to B2 from B1 and reviewed the ratings for a possible downgrade. Headquartered in the Netherlands, CWT is a global leader in travel management, serving corporations of all sizes and government institutions. It reported revenues of approximately US$1.9 billion in 2008. SMILE SECURITISATION: Moody's Junks Rating on Class E Notes ----------------------------------------------------------- Moody's Investors Service has taken action on the long-term credit ratings of these notes issued by SMILE SECURITISATION COMPANY 2007 B.V.: -- EUR4,563,564,000 Senior Class A Asset-Backed Notes due 2053, confirmed to Aaa; previously, on 23 March 2009 Placed Under Review for Possible Downgrade; -- EUR98,141,000 Mezzanine Class B Asset-Backed Notes due 2053, confirmed to Aa2; previously, on 23 March 2009 Placed Under Review for Possible Downgrade; -- EUR73,606,000 Mezzanine Class C Asset-Backed Notes due 2053, downgraded to Baa1 from A1; previously, on 23 March 2009 Placed Under Review for Possible Downgrade; -- EUR73,606,000 Junior Class D Asset-Backed Notes due 2053, downgraded to Ba3 from Baa2; previously, on 23 March 2009 Placed Under Review for Possible Downgrade; -- EUR83,420,000 Subordinated Class E Asset-Backed Notes due 2053, downgraded to Caa1 from Ba3; previously, on 23 March 2009 Placed Under Review for Possible Downgrade; Moody's initially assigned definitive ratings in February 2007. The rating action concludes the rating review resulting from Moody's revision of its methodology for SME granular portfolio in EMEA. This revised methodology was announced on March 17, 2009, and the affected transactions were placed on review on March 23, 2009. As a result of its revised methodology, Moody's has reviewed its assumption for SMILE 2007's collateral portfolio taking into account anticipation of performance deterioration of the pool in the current down cycle. Moody's have changed the default probability of the pool of SME debtors to be equivalent to a Ba1 rating. At the same time, Moody's estimated the remaining weighted average life of the portfolio to equal 7.0 years. As a consequence, these revised assumptions have translated into a cumulative mean default assumption for this transaction of 7.0% of the current portfolio balance, with a coefficient of variation of 40%. Moody's original mean default assumption was 2.0% equivalent to a Baa1/Baa2 rating, with a coefficient of variation of 70%. The average recovery rate assumption remains unchanged and remains at 62% on average. For this rating review, Moody's have further revised the probability distribution function from a lognormal assumption at closing to an inverse normal distribution. The recoveries were also modeled assuming a stochastic distribution as opposed to a fixed recovery rate assumed as of closing. In summary, Moody's concluded that the negative effects of the revised default assumption and the use of revised distributions for both defaults and recoveries were not fully offset by the increased credit support available for each outstanding note and the limited reduction in the remaining life of the portfolio and notes. SMILE 2007 is a true sale transaction under which the Issuer purchases a pool of loans granted by ABN (Aa2/P-1) to Dutch SMEs. At closing, the portfolio consisted of loans granted to 10,122 debtors. The main sector concentration is in the "farming" sector and it was approximately 13% as of closing. As of March 2009, the number of debtors in the portfolio was equal to 7,358. The concentration in the "farming" sector was approximately 13% as of March 2009. Moody's ratings address the expected loss posed to investors by the legal final maturity of the notes. Moody's ratings address only the credit risks associated with the transaction. Other non- credit risks have not been addressed, but may have a significant effect on yield to investors. Moody's is closely monitoring the transaction. =========== R U S S I A =========== BAYMAKSKIY MACHINE-BUILDING: Court Appoints Insolvency Manager -------------------------------------------------------------- The Arbitration Court of Bashkortostan appointed A.Sayfitdinov as insolvency manager for OJSC Baymakskiy Machine-Building Plant (TIN 0254006126, PSRN 1020201543218). The case is docketed under Case No. ?07- 13521/2002. He can be reached at: U.Akhmetov Post User Box 56 450009 Ufa Bashkortostan Russia The Debtor can be reached at: OJSC Baymakskiy Machine-Building Plant Lenina Str. 62 Baymak 453631 Bashkortostan Russia DELANCE LTD: Moody's Junks Corporate Family Rating From 'B2' ------------------------------------------------------------ Moody's Investors Service has downgraded the Corporate Family Rating of Delance Ltd. to Caa1 from B2. The outlook has been changed to stable from negative. The downgrade to Caa1 reflects primarily the ongoing significant uncertainty around the development of the Russian car market combined with the approaching maturity of ROLF's US$250 million bond due in June 2010. Moreover, the rating considers ROLF's reliance on the continued support from its banking group with regard to the various credit facilities that need to be extended over the course of 2009 and in case of a potential covenant breach. The stable outlook is based on the expectation that ROLF's banks will continue to support the company in this challenging environment which should allow ROLF to wind down existing inventory levels and thus release substantial funds currently tied up in working capital. Moreover, Moody's notes positively that ROLF and Mitsubishi Motors Corporation agreed in April to extend the partnership in the Russian market for a further five years - re-affirming ROLF's position as the exclusive distributor of all new Mitsubishi Motor vehicles in Russia via its subsidiary Rolf Import. In Moody's view this agreement has been an important milestone in managing through the current economic crisis and underpins ROLF's leading position in the market for foreign branded cars in Russia. Nonetheless, Moody's believes that the refinancing or repayment of the US$250 million bond coming due in 2010 could become a major challenge if debt capital markets remain constrained and the Russian car market does not recover from current levels. This challenge was also a main consideration for the downgrade to Caa1. Downgrades: Issuer: Colgrade Limited -- Senior Unsecured Regular Bond/Debenture, downgraded to Caa1 from B2 Issuer: Delance Limited ROLF -- Corporate Family Rating, downgraded to a range of Caa1 to Ba2.ru from a range of B2 to Baa1.ru Outlook Actions: Issuer: Colgrade Limited -- Outlook, changed to stable from negative Issuer: Delance Limited ROLF -- Outlook, changed to stable from negative ROLF'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 the 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 ROLF's core industry and ROLF's ratings are believed to be comparable to those of other issuers of similar credit risk. Moody's last rating action on Delance Limited was on February 12, 2009, when the Corporate Family Rating was downgraded to B2 (negative) from B1 (under review for possible downgrade). Delance Limited is the holding company of the ROLF Group, an automotive group with its principal operations in Russia. ROLF is the leading importer and retailer of foreign-made cars in Russia with approximately 80,000 cars sold in H1/2008 and LTM revenues of US$4.6 billion per H1/2008. While Car Retail (various international brands) and Distribution (Mitsubishi) account for the majority of revenues and profits, a notable portion of earnings comes from the company's Logistics and Spare Parts business (some 10% of revenues). In addition, ROLF Group operates a Financial Services (brokerage) business. The company's retail operations are regionally concentrated on Moscow and St Petersburg. KOTLAS-LES-STROY LLC: Creditors Must File Claims by July 7 ---------------------------------------------------------- The Arbitration Court of Arkhangelskaya commenced bankruptcy proceedings against LLC Kotlas-Les-Stroy (TIN 2915003040, PSRN 1022901364595) (Construction) after finding the company insolvent. The case is docketed under Case No. ?05–9777/2008. Creditors have until July 7, 2009, to submit proofs of claims to: S. Tifanov Insolvency Manager Building 1 Volodarskogo Str. 36 163000 Arkhangelsk Russia The Debtor can be reached at: LLC Kotlas-Les-Stroy K. Marksa Str. 3 Kotlas 165340 Arkhangelskaya Russia LES-PROM LLC: Creditors Must File Claims by June 7 -------------------------------------------------- Creditors of LLC Les-Prom (TIN 4004401120, PSRN 1054000521915, RVC 401701001) (Forestry) have until June 7, 2009, to submit proofs of claims to: V. Morozov Temporary Insolvency Manager Post User Box 1303 248023 Kaluga-23 Russia Tel: 8 (4842)79 63 52 The Arbitration Court of Kaluzhskaya will convene at 3:00 p.m. on Sept. 29, 2009, to hear bankruptcy supervision procedure on the company. The case is docketed under Case No. ?23–738/09?-7–48. The Debtor can be reached at: LLC Les-Prom Tyavkina Str. 50 Sukhinichi 249271 Kaluzhskaya Russia STROY-DINAMIKA LLC: Creditors Must File Claims by June 7 -------------------------------------------------------- Creditors of LLC Stroy-Dinamika (TIN 7719552980, RVC 770301001, PSRN 1057746855550) (Construction) have until June 7, 2009, to submit proofs of claims to: K. Lazarev Temporary Insolvency Manager 2P-2 Str. 32 Yugo-Zapadny Promyshlenny Uzel 25 Nizhnevartovsk 628614 Tumenskaya Russia The Arbitration Court of Moscow will convene at 10:00 a.m. on Nov. 19, 2009, to hear bankruptcy supervision procedure on the company. The case is docketed under Case No. ?40–5495/09–18-12B. The Debtor can be reached at: LLC Stroy-Dinamika Nikolaeva Str. 4 123100 Moscow Russia TAMANSKIY WINERY: Moskovskaya Bankruptcy Hearing Set August 12 -------------------------------------------------------------- The Arbitration Court of Moskovskaya will convene at 2:15 p.m. on Aug. 12, 2009, to hear bankruptcy supervision procedure on LLC Tamanskiy Winery. The case is docketed under Case No. ?41– 8059/09. The Temporary Insolvency Manager is: S. Blinnik Tsentralnaya Str. 110 Elektrougli 142455 Moskovskaya Russia The Debtor can be reached at: LLC Tamanskiy Winery Prospect Mechnikova 1 Elektrogorsk Pavlo-Posadochny 142530 Moskovskaya Russia =============== S L O V E N I A =============== NOVA KREDITNA: Fitch Cuts Rating on Hybrid Capital Notes to 'BB+' ----------------------------------------------------------------- Fitch Ratings has affirmed Nova Kreditna Banka Maribor's Long-term Issuer Default Rating at 'A-', Short-term IDR at 'F2' and Support Rating at '1'. The Outlook on the Long-term IDR is Stable. The agency has also affirmed NKBM's Support Rating Floor at 'A-'. At the same time, Fitch has downgraded NKBM's Individual Rating to 'C/D' from 'C', and downgraded hybrid capital instruments of EUR100 million and hybrid capital notes of EUR50 million to 'BB+' from 'BBB+' respectively. The bank's IDRs and Support Rating reflect the extremely high likelihood of support from the Slovenian government in case of need. Fitch believes this is based on NKBM's domestic importance as reflected by its considerable market shares and its 51% indirect ownership by the Slovenian state. The downgrade of the Individual Rating reflects a more challenging domestic operating environment caused by a weaker economic climate, which is putting pressure on loan impairment charges and earnings. Fitch notes some concentration risk in NKBM's loan book and volatile revenues from the securities portfolio. Capital is likely to come under pressure although the tier 1 ratio had strengthened to 8.1% at end-2008 from 5.5% a year earlier. Capitalization remains sensitive to potential credit losses in the event of a serious deterioration of asset quality and a negative revaluation of the bank's Available-For-Sale investments. The Individual Rating also factors in the bank's good retail deposit- taking franchise, a still sound credit profile and the access to domestic short-term sources of funding. NKBM has a sizable portfolio of securities for liquidity purposes. The downgrade of the hybrid capital instruments reflects the weaker stand alone position as indicated by the Individual Rating of 'C/D'. In accordance with the methodology, the agency widened its notching for hybrid capital instrument issues as applicable for banks where the IDR is driven by support . NKBM is the second largest bank in Slovenia. In 2008, its market share contracted slightly to 9.6% of total bank sector assets. In December 2007, in a part privatization, the Slovenian state listed 49% of the bank's shares on the Ljubljana Stock Exchange and retained a 51% stake which is indirectly held. The Slovenian government has expressed its intention to retain a stake of 25% plus one share in NKBM in the long-term. ===================== S W I T Z E R L A N D ===================== ARGE GRAZIOLI/KRISCHANITZ: Claims Filing Period Ends May 29 ----------------------------------------------------------- Creditors of ARGE Grazioli/Krischanitz GmbH are requested to file their proofs of claim by May 29, 2009, to: Mythen Treuhand und Verwaltung AG Zurich Splugenstrasse 9 8002 Zurich Switzerland The company is currently undergoing liquidation in Zurich. The decision about liquidation was accepted at a shareholders' meeting held on March 12, 2009. GARAGE DEBRUNNER: Creditors Must File Claims by May 27 ------------------------------------------------------ Creditors of Garage Debrunner AG are requested to file their proofs of claim by May 27, 2009, to: P. Meier AG Kalkbreitestrasse 69 8036 Zurich Switzerland The company is currently undergoing liquidation in Zürich. The decision about liquidation was accepted at a general meeting held on March 19, 2009. INTEC ENGINEERING: Claims Filing Period Ends May 29 --------------------------------------------------- Creditors of Intec Engineering are requested to file their proofs of claim by May 29, 2009, to: Dr. Hans Rudolf Steiner Seefeldstrasse 123 Mail Box 1060 8034 Zurich Switzerland The company is currently undergoing liquidation in Zug. The decision about liquidation was accepted at a general meeting held on March 25, 2009. IX-LINK GMBH: Claims Filing Deadline is May 27 ---------------------------------------------- Creditors of ix-link GmbH are requested to file their proofs of claim by May 27, 2009, to: ix-link GmbH Zeughausgasse 9a 6301 Zug Switzerland The company is currently undergoing liquidation in Zug. The decision about liquidation was accepted at shareholders' meeting held on March 10, 2009. SEA-ISLAND CONTRACTORS: Claims Filing Deadline is May 27 -------------------------------------------------------- Creditors of Sea-Island Contractors Ltd are requested to file their proofs of claim by May 27, 2009, to: Dr. Ernst A. Brandenberg Poststrasse 9 6300 Zug Switzerland The company is currently undergoing liquidation in Zug. The decision about liquidation was accepted at a general meeting held on Sept. 29, 2000. SUMMEK HOLDING: Creditors Must File Claims by May 27 ----------------------------------------------------- Creditors of Summek Holding AG are requested to file their proofs of claim by May 27, 2009, to: Dr. Markus Uhl Liquidator Dufourstrasse 43 8034 Zurich Switzerland The company is currently undergoing liquidation in Wollerau. The decision about liquidation was accepted at an extraordinary general meeting held on Nov. 27, 2008. U. & H. ZIOERJEN AG: Claims Filing Deadline is May 27 ----------------------------------------------------- Creditors of U. & H. Zioerjen AG are requested to file their proofs of claim by May 27, 2009, to: P. Meier AG Kalkbreitestrasse 69 8036 Zurich Switzerland The company is currently undergoing liquidation in Meilen. The decision about liquidation was accepted at a general meeting held on March 25, 2009. =========== T U R K E Y =========== PETKIM PETROKIMYA: Fitch Affirms Issuer Default Rating at 'BB-' --------------------------------------------------------------- Fitch Ratings has revised Turkey-based petrochemicals producer Petkim Petrokimya Holdings A.S.'s Outlook to Negative from Stable. The ratings have been affirmed at Long-term foreign and local currency Issuer Default 'BB-' and National Long-term 'AA-(tur)'. The Outlook revision partially reflects Fitch's expectations that Petkim's 2010-2012 gross profit margins may not achieve their 2005-2007 levels despite a number of proactive cash-saving restructuring measures, including significant headcount reductions, and strong Q109 performance. Depressed margins are mainly caused by Petkim's small size, shrinking economic activity in Turkey, feedstock price volatility, its commodity chemicals product portfolio, limited geographical diversification and competition from lower-cost producers from the Middle East and Asia. The Negative Outlook also reflects Fitch's concern that Petkim may increase leverage to fund its expansion program in an effort to increase its local market share to 40% in 2018 from 25% in 2008. There are also uncertainties regarding the financial policy of new shareholders who may try to extract dividends to finance their acquisition of Petkim or their own refinery projects. Petkim's ratings could be downgraded if Fitch considers that the company's expansion plans or a change in financial policies require significant material external financing, turning Petkim into a net debt company. Historically, Petkim has operated with net cash although negative free cash flow in four out of the last five years has gradually eroded this position, with the company reporting marginal net debt of TRY1 million at FYE08. Failure to return operational performance to the 2005-2007 levels may also lead to a negative rating action. Petkim's 'BB-' rating is primarily supported by the company's net cash position. Other strengths include its competitive advantage as the only major local producer of petrochemical products in an increasingly industrialized market, privatization and restructuring measures undertaken by management since the summer of 2008. Fitch forecasts Petkim's revenues will decline by around 30% in 2009 with single-digit recovery in 2010 while EBITDA margins are expected to remain below the 2005-2007 average of 9%. Under this scenario, the agency forecasts Petkim's free cash flow margin will turn positive for the first time since 2005, driven by lower working capital requirements mainly as a result of lower feedstock prices. However, volatile oil and naphtha prices remain a challenge. Fitch expects Petkim to become a leaner company as a result of privatization in July 2008 with EBITDA margins gradually improving to around 10% by 2012. The forecasts assumes capex, including maintenance spend, of no more than TRY100 million during 2009-2012, no dividend payments and gross bank debt of less than TRY50 million. In FY08 Petkim reported revenue growth of 7%, but sustained a TRY24 million operating loss and a TRY151m net loss. High raw material prices during 9M08 and falling end-product prices in Q408 continued to erode operating profitability. A depreciation charge of TRY107 million also contributed to net losses. At FYE08, Petkim's net debt position was only TRY1 million, which helped underpin the company's rating. In Q109, Petkim posted revenues of TRY375 million, 34% and 12% lower than Q108 and Q408 respectively. Nevertheless, lower Q109 feedstock prices enabled the company to report a gross profit margin of 9.9% and net profit of TRY12 million (Q108: TRY15 million and Q408: TRY98 million). Petkim's facilities are currently operating at 90-95% of capacity and the order book is reported to be exceptionally strong which Fitch attributes to restocking by intermediaries and end-customers. As a result, Petkim returned to a net cash position of TRY40 million at end- Q109 Petkim was founded in 1965 as a state-owned entity in Turkey. The State Oil Company of Azerbaijan Republic & Turcas (of Turkey) consortium controls 53% of Petkim's shares, while the Turkish Privatization Authority holds a further 10%. Thirty-seven percent of Petkim shares are traded on the Istanbul Stock Exchange. ============= U K R A I N E ============= AUGUST LTD: Creditors Must File Claims by June 5 ------------------------------------------------ Creditors of LLC August Ltd (code EDRPOU 25195944) have until June 5, 2009, to submit proofs of claim to: State Tax Inspection in Goloseyevsky District Insolvency Manager Zhylianskaya Str. 23 01033 Kiev Ukraine The Economic Court of Kiev commenced bankruptcy proceedings against the company on April 2, 2008. The case is docketed under Case No. 43/210. The Court is located at: The Economic Court of Kiev B. Hmelnitskiy Str. 44-b 01030 Kiev Ukraine The Debtor can be reached at: LLC August Ltd Nauka Avenue 47 03028 Kiev Ukraine DRUZHBA-45 LLC: Creditors Must File Claims by June 5 ---------------------------------------------------- Creditors of LLC Druzhba-45 have until June 5, 2009, to submit proofs of claim to: State Tax Inspection in Goloseyevsky District Insolvency Manager Zhylianskaya Str. 23 01033 Kiev Ukraine The Economic Court of Kiev commenced bankruptcy proceedings against the company on April 16, 2008. The case is docketed under Case No. 43/261. The Court is located at: The Economic Court of Kiev B. Hmelnitskiy Str. 44-b 01030 Kiev Ukraine The Debtor can be reached at: LLC Druzhba-45 Lomonosov Str. 73 03022 Kiev Ukraine ONYX LLC: Creditors Must File Claims by June 5 ---------------------------------------------- Creditors of LLC Company Onyx (code EDRPOU 31985981) have until June 5, 2009, to submit proofs of claim to: State Tax Inspection in Goloseyevsky District Insolvency Manager Zhylianskaya Str. 23 01033 Kiev Ukraine The Economic Court of Kiev commenced bankruptcy proceedings against the company on April 2, 2008. The case is docketed under Case No. 43/209. The Court is located at: The Economic Court of Kiev B. Hmelnitskiy Str. 44-b 01030 Kiev Ukraine The Debtor can be reached at: LLC Company Onyx Office 1 40 Years of October Avenue 120 03127 Kiev Ukraine YARMIS LLC: Creditors Must File Claims by June 5 ------------------------------------------------ Creditors of LLC Yarmis have until June 5, 2009, to submit proofs of claim to: State Tax Inspection in Goloseyevsky District Insolvency Manager Zhylianskaya Str. 23 01033 Kiev Ukraine The Economic Court of Kiev commenced bankruptcy proceedings against the company on May 29, 2008. The case is docketed under Case No. 28/127-b. The Court is located at: The Economic Court of Kiev B. Hmelnitskiy Str. 44-b 01030 Kiev Ukraine The Debtor can be reached at: LLC Yarmis Burmistrenko Str. 11 03040 Kiev Ukraine * Moody's Puts Deposit Ratings of Three Ukrainian Banks on Review ----------------------------------------------------------------- Moody's Investors Service has placed the ratings of three Ukrainian banks on review for possible downgrade. The banks affected are Privatbank, Savings Bank of Ukraine and Ukreximbank. The review of the senior debt and deposit ratings will look at the extent to which Ukraine's ability to provide support to its banking system, should such support be needed, has changed in the midst of the ongoing global economic and credit crisis. The rating agency believes that most governments are at least as likely, if not more likely, to support their banking systems as they are to service their own debts -- a view that has traditionally led to bank ratings often benefiting from significant uplift due to systemic support. However, as the financial crisis wears on, the capacity of a country and its central bank to support the nation's banks converges with, and is constrained by, the government's own debt capacity. As such, Moody's will be reassessing the level of systemic support for the banks listed above to determine whether the systemic support they receive needs to be more closely aligned to the government's local currency bond rating. These ratings are affected: * Privatbank -- global local currency deposit rating of Ba1 to Review for Downgrade from Stable Outlook * Savings Bank of Ukraine -- global local currency deposit rating of Ba1, local currency debt rating of Ba1, national scale rating of Aa1.ua to Review for Downgrade from Stable Outlook * Ukreximbank -- global local currency deposit rating of Ba1 to Review for Downgrade from Stable Outlook Moody's will review the specific circumstances of Ukraine to determine the appropriate systemic support for Ukrainian bank ratings and the implications for the three banks that have been identified as being potentially affected. Factors that the rating agency will consider in its assessment of systemic support include the size of the banking system in relation to government resources, the level of stress in the banking system, the foreign currency obligations of the banking systems relative to the government's own foreign exchange resources, and changes to government political patterns and priorities. Amid the recent crisis, the Ukrainian government has established a recapitalization program for the country's banking sector, pledging to inject UAH44 billion (US$5.7 billion) into the Ukrainian banks' capital over the course of 2009. At the same time, the credit stress in the banking system has increased significantly, characterized by a deposit outflow from the banking system and a rapid increase in non-performing loans, which the rating agency expects to reach over 20% by the end of 2009 and to erode the capital base of Ukrainian banks. Moody's has already taken a number of rating actions to address the impact of the crisis on Ukrainian bank ratings, lowering the bank financial strength ratings and debt and deposit ratings of the majority of the country's banks. Moody's notes that the review is likely to lead to the debt and deposit ratings of the affected banks being placed close to or at a level implied by their BCAs of Ba3 (Privatbank), B2 (Savings Bank of Ukraine) and Ba3 (Ukreximbank), respectively. It expects to conclude the review over the next few weeks. All other bank ratings in Ukraine are not impacted by the reassessment of the systemic support level. Previous Rating Action and Principal Methodologies Moody's previous rating action on Privatbank was on May 12, 2009, when Moody's downgraded the bank's foreign currency deposit rating to B3 from B2 and the long-term foreign currency debt rating to B1 from Ba3 with a negative outlook. Moody's previous rating action on Savings Bank of Ukraine was on May 12, 2009, when Moody's downgraded the bank's foreign currency deposit rating to B3 from B2 with a negative outlook. Moody's previous rating action on Ukreximbank was on May 12, 2009, when Moody's downgraded the bank's foreign currency deposit rating to B3 from B2 and the long-term foreign currency debt rating to B1 from Ba3 with a negative outlook. =========================== U N I T E D K I N G D O M =========================== CRYSTAL BERRY: Appoints Joint Administrators from Grant Thornton ---------------------------------------------------------------- David Robert Thurgood and Martin Gilbert Ellis of Grant Thornton UK LLP were appointed joint administrators of Crystal Berry Ltd. on May 1, 2009. The company can be reached at: Third Floor Sovereign House 1 Albert Place Finchley Central London N3 1QB England DEEP RED: Taps Joint Administrators from Grant Thornton ------------------------------------------------------- David Robert Thurgood and Martin Gilbert Ellis of Grant Thornton UK LLP were appointed joint administrators of Deep Red (UK) Ltd. on May 1, 2009. The company can be reached at: Third Floor Sovereign House 1 Albert Place Finchley Central London N3 1QB England EDWARDS GROUP: S&P Lowers Corporate Credit Ratings to 'B' -------------------------------------------------------- Standard & Poor's Ratings Services said that it lowered its corporate credit ratings to 'B' from 'B+' on U.K.-based Edwards Group Ltd., a leading worldwide supplier of vacuum technology. The outlook is stable. At the same time, Standard & Poor's lowered its debt ratings on the loans and revolving credit facility of related entity Edwards (Cayman Islands II) Ltd. S&P lowered the rating on the US$100 million supersenior RCF to 'BB-' from 'BB'; the recovery rating remains unchanged at '1', indicating S&P's expectation of very high (90%-100%) recovery in the event of a payment default. S&P lowered the debt rating on the US$430 million first-lien term loan to 'B' from 'BB-', which is now in line with the corporate credit rating; the recovery rating was revised to '3' from '2', which now indicates S&P's expectation of meaningful (50%-70%) recovery in the event of a payment default. S&P also lowered the debt rating on the US$185 million second-lien payment-in-kind toggle loan to 'CCC+' from 'B-'; the recovery rating remains unchanged at '6', indicating S&P's expectation of negligible (0%- 10%) recovery in the event of a payment default. In addition, Standard & Poor's removed the corporate credit and debt ratings from CreditWatch, where they were placed with negative implications on Feb. 24, 2009. "The downgrades reflect our expectation that the global economic downturn will continue to negatively affect Edwards' revenues, operating margins, and credit measures over 2009. S&P expects these pressures, combined with meaningful restructuring to align costs with falling demand, to result in negative free operating cash flow during 2009," said Standard & Poor's credit analyst Helen O'Toole. The downturn in the semiconductor equipment and general vacuum markets has affected all of Edwards' segments, which led to an overall 46% decline in revenues in the first quarter of 2009 compared with the first quarter of 2008. In first-quarter 2009, total revenues declined by 46% to US$127.4 million while group- reported IFRS EBITDA for continuing operations declined to negative US$800,000. Adjusting for foreign exchange costs relating to overhedging of US$6.6 million, EBITDA for the quarter was US$5.8 million, resulting in an EBITDA margin of 4.5% for the quarter. On a last-12-month basis, reported margins were 12.3%. Edwards reported negative FOCF of US$66.4 million in the first quarter of 2009 mainly due to the sharp decline in EBITDA, restructuring costs of US$9 million, high bonus payments for fiscal 2008 of US$19 million, and an adverse working capital change of US$38.5 million. FOCF for the 12 months ended March 31, 2009, totaled negative US$18.8 million. Working capital management will be important in preserving liquidity, and inventory management and customer collections are key challenges that Edwards faces given the speed and intensity of order declines. At March 31, 2009, lease-adjusted gross debt to last-12-month EBITDA was about 5.8x and is likely to deteriorate further in the coming quarters on the back of declining revenues and weaker margins, in S&P's view. The stable outlook primarily reflects S&P's expectation that Edwards should be able to withstand the tough operating challenges it will face throughout 2009 thanks to its currently adequate liquidity position. However, S&P continues to monitor Edwards' liquidity position closely. The 'B' ratings are predicated on S&P's expectations that the group will continue to have full access to its RCF and will be able to reduce the pace of its cash burn through an acceleration of cost cutting, among other measures. The ratings could come under pressure if the group's liquidity position deteriorates significantly from current levels, for example, by forcing the group to rely on its RCF to meet liquidity needs. A distressed debt exchange offer, which S&P does not expect at this stage, would also likely have negative rating implications. A positive rating action is unlikely at stage given the very significant operating pressures and cash burn. EMERALD BLUE: Brings in Joint Administrators from Grant Thornton ---------------------------------------------------------------- David Robert Thurgood and Martin Gilbert Ellis of Grant Thornton UK LLP were appointed joint administrators of Emerald Blue Ltd. on May 1, 2009. The company can be reached at: Third Floor Sovereign House 1 Albert Place Finchley Central London N3 1QB England EPIC PLC: Fitch Cuts Ratings on Three Classes of Notes to Low-B --------------------------------------------------------------- Fitch Ratings has affirmed Epic (Culzean) Plc's class A notes and downgraded all of the transaction's other commercial mortgage- backed floating rate notes, due 2019: -- GBP312.7 million class A (XS0286451710): affirmed at 'AAA'; Outlook revised to Negative from Stable -- GBP48.2 million class B (XS0286456198): downgraded to 'AA-' from 'AAA'; Outlook revised to Negative from Stable -- GBP45.6 million class C (XS0286456867): downgraded to 'A-' from 'AA'; Outlook Negative -- GBP38.6 million class D (XS0286457758): downgraded to 'BB+' from 'A'; Outlook Negative -- GBP16.5 million class E (XS0286458723): downgraded to 'BB-' from 'BBB+'; Outlook Negative -- GBP20.2 million class F (XS0286459374): downgraded to 'B' from 'BBB'; Outlook Negative The downgrades reflect Fitch's expectations that deteriorating property market conditions have weakened the creditworthiness of the loans securitized in the transaction. Despite the high quality and generally prime nature of the assets secured in this pool, the net initial yields ascribed to the properties at origination have proven unsustainable, particularly given the significant outward trend in yields over the last 18 to 24 months. Based on current income, the weighted-average NIY stands at 4.5%, considerably below reported yields. The loan portfolio has a reported WA loan-to-value ratio of 70.7%, compared to a WA Fitch LTV of 103.1% which reflects a market value decline of 31.5%. The largest of the four securitized loans -- Metro (73.4% of the pool) -- is secured by a portfolio of four good quality shopping centres/retail destinations in London comprising leisure, cinema, restaurant and retail facilities. The reported LTV stands at 71.3% compared with a Fitch LTV of 103.7%, reflecting a sizeable MVD of 31.3%. In Fitch's opinion, the loan's exit debt yield of 6.4% provides little cushion to prevailing market yields. For the last three quarters, the loan's ICR of 1.15x has been just in line with its covenant of 1.15x. While the portfolio has not, to date, been affected by retailer administrations, the reported vacancy rate rose to 10% from 8% in Q4 2008 as a result of lease expiries and the ongoing development of the North Mall within the Southside Shopping Centre in Wandsworth. Future performance will be determined by the asset managers' ability to replace lost rental income. Without an increase in letting activity across the portfolio, the loan's ICR covenant may come under pressure over the next few months. Moreover, this could also affect the likelihood of an orderly payoff at the scheduled loan maturity in October 2011. The three smaller loans are secured by primarily grade A retail and office properties on long leases to strong tenants. However, these were also valued at extremely tight property yields. Consequently, current outward yield movements could reduce the chances of an orderly payoff at loan maturity. In addition, declining occupational markets may put pressure on all four loans' income (especially in the event of potential tenant administrations in the shopping centres), which could lead to decreases in collateral income that may, in turn, result in further value declines as well as tight interest and debt service coverage ratios. Fitch will continue to monitor the performance of the transaction. GOLDCORE PROPERTIES: Appoints Administrators from Grant Thornton ---------------------------------------------------------------- David Robert Thurgood and Martin Gilbert Ellis of Grant Thornton UK LLP were appointed joint administrators of Goldcore Properties Ltd. on May 1, 2009. The company can be reached at: Third Floor Sovereign House 1 Albert Place Finchley Central London N3 1QB England LLOYDS BANKING: European Commission May Demand Asset Sales ---------------------------------------------------------- The Scotsman's Erikka Askeland and Hamish Rutherford report that Lloyds Banking Group plc may be forced sell off core parts of its business as the price for taking part in the government's multi- billion pound bank support schemes. The Scotsman relates the group warned shareholders on Wednesday that the European Commission could compel it to "divest or exit core businesses" as a condition of granting state aid approval. According to the Scotsman, under competition rules, the bank has to obtain approval from Brussels for the GBP17 billion government recapitalization and the placing of GBP260 billion of toxic debts into the taxpayer-backed Asset Protection Scheme. Michael Blackley of the Scotsman reports the bank still has to submit a detailed forward plan with the Treasury to the EC. It is currently working with the Treasury to formally notify the EC of the terms of the asset protection scheme, the Scotsman notes. The Scotsman discloses a single forward plan is expected to be submitted by the bank and the Treasury for the asset protection scheme and all other state aid. Breakingnew.ie says any ruling from the EC and potential disposals are likely to be years away. "The terms of such a forward plan are likely in particular to include the obligation to reduce significantly the size of the group's balance sheet and/or behavioural restrictions," the Scotsman quoted Lloyds as saying in a prospectus published Wednesday. "The group expects such reduction in the balance sheet to be achieved through making divestments of or exiting non-core businesses. However, a reduction could require the group to divest or exit core businesses." The Scotsman states according to Lloyds, this could be "materially adverse" to the bank's interests. Cash Call Nick Goodway at London Evening Standard reports Lloyds on Monday launched a GBP4 billion fundraising to buy back the government's preference shares. The London Evening Standard says buying back the preference shares saves Lloyds GBP480 million a year in dividends on the prefs, and also clears the way for it to restart ordinary dividends possibly as early as next year. According to the London Evening Standard, the new shares are being sold at 38.43p, less than half the current market price. The figure was based on Lloyds' price on March 6 when it announced it would buy back the preference shares, the London Evening Standard notes. The London Evening Standard discloses an average small shareholder with 550 shares will be offered 340 new shares at a cost of around GBP130. According to the Scotsman, if the open offer is a success and all of the new ordinary shares are snapped up, the government's stake in the bank will remain at 43.4 per cent. However, the open offer is fully underwritten by the government, meaning that if all shares are not bought it could become the majority shareholder in the bank, with a stake of up to 65 per cent, the Scotsman states. The Scotsman relates in a statement announcing the open offer Monday, Lloyds said that the open offer would result in its tier one capital ratio rising to 14.5 per cent. The share placing and open offer is likely to take little more than a month to complete, the London Evening Standard notes. Demerger Erikka Askeland at the Scotsman reports City investors on Monday night rejected calls to reverse the takeover of HBOS by Lloyds TSB. The Scotsman relates Jim Spowart, who actively campaigned to prevent the takeover of HBOS by Lloyds, on Monday said calls to reverse the merger were too late. "It is history repeating itself. They should have kept the institutions separate," the Scotsman quoted Mr. Spowart as saying. The Scotsman adds a source representing significant institutional investors also dismissed the calls as "grandstanding". The source dismissed calls by some in the City for chief executive Eric Daniels to follow Sir Victor Blank's move and resign were heeded. State Guarantees As reported in the Troubled Company Reporter-Europe on March 9, 2009, Bloomberg News said Lloyds Banking Group obtained GBP260 billion or US$367 billion in state guarantees increasing the U.K. government's stake in the bank to as much as 75 percent from 43 percent. Under the agreement, Lloyds will pay GBP15.6 billion for asset protection, or 5.2 percent of the insured assets, in the form of non-voting shares, the report said citing the bank in a statement. Lloyds also agreed to increase lending to businesses and homeowners by GBP28 billion over the next 24 months, the report related. In return, the report disclosed Lloyds will get government insurance for GBP74 billion of residential mortgages, GBP18 billion of unsecured personal loans, GBP151 billion of corporate and commercial loans and GBP17 billion of treasury assets. The report stated Lloyds will be responsible for the initial GBP25 billion of losses on the insured assets and will cover 10 percent of any additional losses, with the Treasury responsible for the rest. The government will also underwrite a GBP4 billion share sale and convert existing preference shares into equity, the report disclosed. According to Bloomberg News, about 83 percent of the assets Lloyds is insuring came from HBOS Plc. Lloyds acquired HBOS's deteriorating quality of loans when it bought the firm in a government-brokered deal, the report said. The report recalled in September, Lloyds agreed to buy HBOS for about GBP7.7 billion as the government sought to prevent HBOS from collapsing after credit markets froze. In February, HBOS posted a pretax loss of GBP7.5 billion, the report noted. About Lloyds Banking Group PLC Lloyds Banking Group PLC (LON:LLOY) -- http://www.lloydsbankinggroup.com/-- formerly Lloyds TSB Group plc, is United Kingdom-based financial services company, whose businesses provide a range of banking and financial services in the United Kingdom and a limited number of locations overseas. The operations of Lloyds TSB Group in the United Kingdom were conducted through over 2,000 branches of Lloyds TSB Bank, Lloyds TSB Scotland plc and Cheltenham & Gloucester plc during the year ended December 31, 2007. Cheltenham & Gloucester plc (C&G) is the Company's specialist mortgage arranger. Following the transfer of its mortgage lending and deposits to Lloyds TSB Bank, during 2007, C&G arranges mortgages for Lloyds TSB Bank rather than for its own account. International business is conducted mainly in the United States and continental Europe. Lloyds TSB Group's services in these countries are offered through branches of Lloyds TSB Bank. In January 2009, the Company acquired HBOS plc. LONDON VILLAGE: Calls in Joint Administrators from Grant Thornton ----------------------------------------------------------------- David Robert Thurgood and Martin Gilbert Ellis of Grant Thornton UK LLP were appointed joint administrators of London Village Ltd. on May 1, 2009. The company can be reached at: Third Floor Sovereign House 1 Albert Place Finchley Central London N3 1QB England PLAYGOLF LTD: Taps Joint Administrators from BDO ------------------------------------------------ Shay Bannon and Malcolm Cohen of BDO Stoy Hayward LLP were appointed joint administrators of Playgolf Ltd. on April 28, 2009. The company can be reached through BDO Stoy Hayward LLP at: 55 Baker Street London W1U 7EU England TRUE BLUE: Appoints Joint Administrators from Baker Tilly --------------------------------------------------------- John David Ariel and Bruce Alexander Mackay of Baker Tilly Restructuring and Recovery LLP were appointed joint administrators of True Blue Developments Ltd. on April 28, 2009. The company can be reached at: True Blue Developments Ltd. Solo House The Courtyard London Road Horsham West Sussex RH12 1AT England WORK FACILITIES: Brings in Joint Administrators from PwC -------------------------------------------------------- Laurie Katherine Manson and John Bruce Cartwright of PricewaterhouseCoopers LLP were appointed joint administrators of Work Facilities Ltd. on May 5, 2009. The company can be reached at: Balne Mills Silcoates Street Wakefield West Yorkshire WF2 0DX England WORK INC: Taps Joint Administrators from PwC -------------------------------------------- Laurie Katherine Manson and John Bruce Cartwright of PricewaterhouseCoopers LLP were appointed joint administrators of Work Inc Group Ltd. on May 5, 2009 The company can be reached at: Balne Mills Silcoates Street Wakefield West Yorkshire WF2 0DX England YELL GROUP: Says Actively Exploring Refinancing Options ------------------------------------------------------- Yell Group plc is actively looking at refinancing options, Georgina Prodhan at Reuters reports citing John Davis, the company's chief executive. According to Reuters, a large tranche of the company's debt is due for repayment in April 2011. Mr. David told Reuters in a telephone interview on Wednesday that he aimed to have refinancing in place by April 2010. Reuters relates Mr. David said it could not rule out having to sell assets if other options did not work out. "We have to be realistic about our debt situation," Reuters quoted Mr. Davis as saying. Reuters notes earlier, the company said it was writing down the value of its Yell Publicidad unit by GBP1.3 billion (US$2 billion), mainly due to a severe recesssion in Spain. Headquartered in Reading, England, Yell Group plc -- http://www.yellgroup.com/-- is an international directories business operating in the classified advertising market through printed, online, and phone media in the U.K. and the US. Yell also owns 100% of TPI (renamed "Yell Publicidad"), the largest publisher of yellow and white pages in Spain, with operations in certain countries in Latin America. Yell's revenue for the twelve months ended March 31, 2008 was GBP2,219 million and its Adjusted EBITDA was GBP738.9 million. * * * As reported in the Troubled Company Reporter-Europe on Feb. 10, 2009, Moody's Investors Service placed the ratings of Yell Group plc on review for possible downgrade. Ratings affected are the Ba3 Corporate Family Rating and the B1 Probability of Default Rating. * Building Societies Asks More Help From British Government ----------------------------------------------------------- Philip Aldrick at Telegraph.co.uk reports that building societies have called on the British government for more help as they are no longer strong enough to look after themselves. The report relates speaking at the Building Societies Association annual conference, John Goodfellow, the organization's chairman, said the sector had not been helped by "unfair competition" from state-backed banks, rate cuts that "did not have to be quite so savage", and the fee structure of the deposit protection scheme. Mr. Goodfellow, the report says, urged the state to create a specific rescue fund. * S&P Cuts Securities Ratings of Various European Banking Groups ---------------------------------------------------------------- Standard & Poor's Ratings Services said that it lowered its ratings by three or more notches on hybrid capital securities of these European banking groups: ABN AMRO Holding N.V.; Allied Irish Banks PLC; Anglo Irish Bank Corp. Ltd.; Bank of Ireland; Dexia S.A.; Fortis Bank Nederland (Holding) N.V.; Lloyds Banking Group PLC; Northern Rock PLC; and The Royal Bank of Scotland Group PLC. At the same time, S&P removed many of the issue ratings from CreditWatch. The downgrades follow S&P's review of the ratings on the hybrid securities of certain European financial institutions that have received state aid or that are likely, in S&P's opinion, to receive state aid in the near future. S&P concluded that the likelihood of suspension of payments on the issues has increased. S&P did not change any of the issuer credit ratings on the banking groups affected by these hybrid securities rating actions. S&P placed many of these hybrid securities on CreditWatch with negative implications earlier this year due in part to uncertainty regarding European Commission policy in applying European Union state aid rules. The EC announcement of May 7, 2009, on the recapitalization of Commerzbank AG (A/Negative/A-1) removed some uncertainty by specifying that Commerzbank's business plan include measures aimed at keeping state aid to a minimum, including "the suspension of dividend and interest payments to holders of hybrid capital." This announcement prompted rating actions by Standard & Poor's on the hybrid capital securities of the Commerzbank group. The EC announcement about Commerzbank clarifies (to some degree) the EC's position on hybrid capital securities of state-supported banks. In S&P's view, the announcement increases the potential that banking groups receiving EU state aid will suspend payments on their hybrid securities. While the EC has neither concluded reviews nor has made similar unequivocal statements regarding banking groups whose hybrids are affected by the rating actions, S&P believes that the EC's position is that state funds granted to struggling banks should be retained to strengthen capitalization and should not be paid out to shareholders or holders of other capital instruments, including hybrid securities. Despite this position, it appears that the EC will respect the terms of the hybrid capital instruments and not alter the terms of hybrid securities that link payments to financial performance, notably earnings, distributable income, or specified capital levels. The rating actions also reflect S&P's view that European sovereign governments over the medium term may be more willing than in the past to encourage or force banks to suspend payments on hybrid securities to preserve cash and build capital. S&P believes that hybrid capital securities of European (and U.S.) banking groups whose creditworthiness is supported by already-received and potential future government aid are relatively more vulnerable to payment deferral than the hybrid securities of banking groups whose ratings are more closely aligned with their stand-alone credit profiles. Moreover, the recession and difficult operating environment, in S&P's view, increase the vulnerability of banks in Europe (and in other regions in the world) that have not received state aid to payment deferrals on hybrid securities due to pressure on retained earnings and capital. EC policy with respect to state aid is an additional factor, but not the primary reason, for EU banks to suspend payments on hybrid securities. Earlier in 2009, Standard & Poor's took widespread actions on hybrid securities of many European and U.S. banking groups due to S&P's assessment of this vulnerability. From a rating perspective, S&P generally widen the gap between the hybrid rating and the ICR of the issuing entity to three or more notches when S&P considers the potential for payment deferral has increased. On May 19, 2009, Bank of Ireland made a tender offer for six of its preference share issues. S&P characterize the tender offer as distressed and consequently lowered the ratings on the six issues to 'C' from 'BB'. The ratings on Bank of Ireland's three hybrid securities not subject to the tender offer were lowered to 'B' (one issue) and 'B-' (two issues) from 'BB'. All ratings were removed from CreditWatch with negative implications, where they were originally placed on Nov. 14, 2008. How Standard & Poor's Differentiates European Bank Hybrid Securities By Ratings Category Standard & Poor's broadly characterizes the rated hybrid securities of European banking groups by rating category. While S&P cite general characteristics by category, S&P note that the ratings on individual hybrid securities may differ due to the specific terms of the security and the particular credit profile and national jurisdiction of the issuing group. For bank hybrid securities rated in the 'CCC' category, there is, in S&P's view, a clear and present risk of payment deferral or principal reduction. The hybrid securities in question include those of wholly nationalized banks such as Northern Rock and Anglo Irish Banks as well as those of government-supported groups whose earnings are under severe pressure, such as Commerzbank and KBC Group N.V. S&P also rates preference shares with voting rights issued by Lloyds Banking Group and Royal Bank of Scotland Group PLC 'CCC+', one notch below their other perpetual deferrable instruments, to reflect the "nationalization risk" of the preference shares of these two banking groups. In the U.K. and Ireland, perpetual preferred shares that grant voting rights to the holders in certain circumstances have been included in nationalizations of a troubled financial institution for the purpose of giving the government full control of the institution. This happened to Northern Rock and Anglo Irish Banks. Bank hybrid securities rated in the 'B' category are, in S&P's view, vulnerable to a potential further deterioration in the operating environment that could result in significant losses at the issuing group and necessitate further state aid from the applicable sovereign government. The European banking groups whose hybrid securities are in the 'B' category typically have received material direct support from their governments, and their creditworthiness relies to an important extent on potential future government aid. The hybrid securities of Allied Irish Banks, Fortis Bank Nederland, Lloyds Banking Group, and Royal Bank of Scotland/ABN AMRO are part of this group. Dexia's hybrids are also in this group, primarily due to the large amount of government aid the Dexia group has received and less due to vulnerability of Dexia's earnings to a more stressed environment. While this article addresses the hybrid securities of European banking groups, the characterization of the 'B' category also broadly fits the hybrid securities of government-supported financial institutions in other mature markets. For example, S&P rate the hybrid capital securities of Bank of America Corp. in the U.S. in the 'B' category. European bank hybrid securities in the 'BB' category are, in S&P's view, relatively less vulnerable to deterioration in the operating environment than the bank hybrids in the 'B' category, but for reasons of reliance on future state aid or the fundamental credit profile of the issuing group, the hybrid securities have some speculative characteristics. The banking groups whose hybrid securities are in the 'BB' category are in two groups: -- Banking groups that have received some direct support from their governments, and with creditworthiness that relies to some extent on potential future government aid, such as Swedish banks Swedbank AB and Skandinaviska Enskilda Banken AB; and -- Banking groups that have an ICR in the 'BBB' category, such as the major Greek banks, NIBC Bank N.V. of the Netherlands, and Italian banking group Veneto Banca Holdings S.C.P.A. Ratings List Downgraded ABN-AMRO Capital Funding Trust V (1) US$1.25 bil 5.9% callable perp non-cum gtd trust pfd secs To From -- ---- B BB ABN-AMRO Capital Funding Trust VI (1) US$200 mil 6.25% non cum trust pfd secs callable To From -- ---- B BB ABN-AMRO Capital Funding Trust VII (1) US$1.8 bil 6.08% non cum gtd trust pfd secs callable To From -- ---- B BB Ratings Affirmed ABN AMRO Bank N.V. GBP750 mil var rate fxd/fltg rate callable perp sub (upper Tier 2) nts ser 752 EUR1 bil var rate step-up/fxd callable perp secs (Tier 1) Rating ------ BB/Watch Dev (1) Guaranteed by ABN AMRO Holding N.V. Downgraded; CreditWatch/Outlook Action Allied Irish Banks PLC US$175 mil non-cum pfd stk EUR200 mil var/fixed rate sub perp nts hybrid due 11/29/2049 EUR500 mil step-up callable perp resv cap instruments hybrid GBP400 mil var rate perp callable sub upper Tier 2 hybrid To From -- ---- B BB/Watch Neg AIB UK 1 LP (2) EUR1 bil var rate /fltg non-cum perp callable pfd secs To From -- ---- B BB/Watch Neg AIB UK 2 LP (2) EUR500 mil var rate fxd/fltg rate jr sub non cum perp callable pfd secs To From -- ---- B BB/Watch Neg AIB UK 3 LP (2) GBP350 mil var rate fxd/fltg rate jr sub non cum perp callable pfd secs To From -- ---- B BB/Watch Neg (2) Guaranteed by Allied Irish Banks PLC. Downgraded; CreditWatch/Outlook Action Anglo Irish Asset Finance plc (3) GBP200 mil var rate callable perp jr sub nts GBP250 mil var rate fxd/fltg rate callable perp jr sub nts To From -- ---- CCC B/Watch Neg Anglo Irish Capital U.K. (2) LP (3) EUR600 mil var rate fxd/fltg rate callable perp jr sub dtd 03/04/2008 due 02/15/2037 nts To From -- ---- CCC B/Watch Neg Anglo Irish Capital U.K. (3) LP (3) GBP350 mil var rate fxd/fltg-rate non-cum callable perp pfd stk To From -- ---- CCC B/Watch Neg Anglo Irish Capital U.K. LP (3) EUR600 mil var rate callable perp fxd/fltg rate non-cum pfd stk To From -- ---- CCC B/Watch Neg (3) Guaranteed by Anglo Irish Bank Corp. Downgraded; CreditWatch/Outlook Action Bank of Ireland US$150 mil 6.187% hybrid To From -- ---- B BB/Watch Neg EUR63.49 mil GBP18.76 mil 12% non-cum pfd stk To From -- ---- B- BB/Watch Neg BOI Capital Funding (No.1) LP (4) EUR600 mil 6.25% fxd/var non-cum perp callable To From -- ---- C BB/Watch Neg BOI Capital Funding (No.2) LP (4) US$800 mil var rate /fltg rate gtd non-voting non-cum callable perp pfd secs To From -- ---- C BB/Watch Neg BOI Capital Funding (No.3) LP (4) US$400 mil var rate /fltg rate gtd non-voting non-cum callable perp pref Secs To From -- ---- C BB/Watch Neg BOI Capital Funding (No.4) LP (4) GBP500 mil var rate fxd/fltg rate gtd non-voting non-cum perp pref secs To From -- ---- C BB/Watch Neg Bank of Ireland UK Holdings PLC GBP350 mil 6.25% callable perp pfd secs hybrid EUR600 mil step-up callable perp pfd secs hybrid To From -- ---- C BB/Watch Neg (4) Guaranteed by Bank of Ireland. Downgraded; CreditWatch/Outlook Action Dexia Bank S.A. EUR228.674 mil var rate undtd sub nts To From -- ---- B BB/Watch Neg Dexia Banque Internationale a Luxembourg EUR225 mil var rate perp cap nts To From -- ---- B BB+/Watch Neg Dexia Credit Local EUR700 mil var rate fxd/fltg-rate undated deeply sub perp nts To From -- ---- B BB/Watch Neg Dexia Funding Luxembourg S.A. (5) EUR500 mil var rate jr sub fxd to fltg rate callable perp non-cum gtd secs To From -- ---- B BB/Watch Neg Dexia Overseas Ltd. (6) US$50 mil fltg rate nts ser 150 US$100 mil fltg rate nts JPY5 bil var rate nts To From -- ---- B BB/Watch Neg (5) Guaranteed by Dexia S.A. (6) Guaranteed by Dexia Bank S.A. Downgraded; CreditWatch/Outlook Action Fortis Bank Nederland (Holding) N.V. EUR2 bil mandatory convertible securities perp hybrid To From -- ---- B+/Watch Dev BB-/Watch Dev Downgraded Lloyds Banking Group PLC EUR500 mil 7.875% callable perp Tier 1 hybrid To From -- ---- CCC+ B+ US$1.25 bil 7.875% callable perp Tier 1 hybrid To From -- ---- CCC+ B+ US$1 bil fxd/fltg rate non-cum perp callable non step-up pref shares To From -- ---- CCC+ B+ US$750 mil 6.413% callable non-cumulative fixed-to-floating rate pref shares prep ser A To From -- ---- CCC+ B+ US$750 mil 5.92% callable non-cumulative fixed-to-floating rate pref shares prep ser B To From -- ---- CCC+ B+ US$750 mil 6.657% callable non-cumulative fixed-to-floating rate pref shares prep To From -- ---- CCC+ B+ GBP600 mil fxd/fltg rate non-cum perp callable non step-up pref shares To From -- ---- CCC+ B+ GBP750 mil 6.0884% callable non-cumulative fixed-to-floating rate pref shares prep To From -- ---- CCC+ B+ GBP100 mil 9.75% non-cumulative irredeemable pref shares prep To From -- ---- B- BB- GBP350 mil 6.3673% callable non-cumulative fixed-to-floating rate pref shares prep To From -- ---- CCC+ B+ GBP198.07 mil 6.475% callable non-cumulative pref shares prep To From -- ---- B- BB- GBP300 mil 9.25% non-cumulative irredeemable pref shares prep To From -- ---- B- BB- GBP500 mil var rate reset perp callable jr sub bnds (7) To From -- ---- B BB HBOS PLC EUR97.20 mil fltg rate jr sub step-up perp nts nts To From -- ---- B- BB- JPY42.5 bil jr sub step-up perp nts To From -- ---- B- BB- EUR111.55 mil 6.05% fxd/fltg rt callable perp nts To From -- ---- B- BB- EUR750 mil fxd/fltg rate perp nts ser HBOS 0016 To From -- ---- B- BB- US$1 bil var rate fxd/fltg rate perp jr sub nts To From -- ---- B- BB- EUR750 mil var rate callable perp jnr sub bnds ser HBOS 0018 To From -- ---- B- BB- EUR500 mil var rate callable perp jnr sub bnds ser HBOS 0019 To From -- ---- B- BB- GBP6.98 mil jr sub step-up perp nts To From -- ---- B- BB- GBP30.06 mil 5.75% undated jr sub step-up perp callable nts To From -- ---- B- BB- GBP8.5 mil step up sub perp nts To From -- ---- B- BB- GBP14.05 mil step up perp jnr sub fxd to fltg rate callable ser HBOS 0023/04 bnds To From -- ---- B- BB- Bank of Scotland PLC JPY17 bil var rate sub perp nts To From -- ---- B BB US$300 mil var rate 7% reset jr sub To From -- ---- B BB GBP100 mil 12% perp sub bnds To From -- ---- B BB GBP100 mil 8.75% perp sub bnds To From -- ---- B BB GBP150 mil 8.375% undated instruments To From -- ---- B BB GBP75 mil 13.625% perp sub bnds To From -- ---- B BB GBP50 mil 9.375% perp sub bnds To From -- ---- B BB GBP250 mil cum perp jr sub bnds ser BOS0009 To From -- ---- B BB GBP150 mil cum perp jr sub bnds ser BOS0010 To From -- ---- B BB GBP150 mil step up callable perp regulatory Tier One Secs ser A To From -- ---- B BB GBP150 mil step up callable perp regulatory Tier One Secs ser B To From -- ---- B BB GBP150 mil 7.375% jr sub callable perp med-term nts ser BOS 0006 To From -- ---- B BB GBP100 mil var rate callable perp hybrid(8) To From -- ---- B BB GBP64.37 mil var rate callable perp hybrid(8) To From -- ---- B BB Bank of Scotland Capital Funding L.P. GBP250 mil class A non-cum perp callable pfd secs (9) To From -- ---- B- BB- GBP150 mil class B non-cum perp pfd secs(9) To From -- ---- B- BB- HBOS Capital Funding L.P. US$750 mil 6.071% FX/FRN callable perp jr sub hybrid ser HBOS 0021(8) To From -- ---- B- BB- GBP600 mil 6.461% non-voting non-cum perp callable pfd secs ser A (10) To From -- ---- B- BB- HBOS Capital Funding No 1 LP US$1 bil 6.85% non-voting non-cum perp callable pfd secs (8) To From -- ---- B- BB- HBOS Capital Funding No 2 LP US$750 mil 6.071% non-voting non-cum perp callable pfd secs (8) To From -- ---- B- BB- HBOS Capital Funding No 3 LP EUR750 mil var rate non-cum fxd/fltg rate perp callable pfd secs (8) To From -- ---- B- BB- HBOS Capital Funding No 4 LP GBP750 mil var rate callable fxd/fltg perp hybrid (8) To From -- ---- B- BB- Halifax Group Euro Finance (Jersey) L.P. EUR415 mil fxd/fltg rate gtd non-voting non-cum perp pfd secs(10) To From -- ---- B- BB- Halifax Group Sterling Finance (Jersey) L.P. GBP245 mil 7.881% gtd non-voting non-cum perp pfd secs(10) To From -- ---- B- BB- Lloyds TSB Bank PLC EUR1.25 bil 5.625% sub callable step-up perp nts ser 69 To From -- ---- B BB EUR150 mil fltg rate sub callable step-up perp nts ser 70 To From -- ---- B BB US$750 mil fltg rate prim cap perp nts ser 1 due 06/29/2049 To From -- ---- B BB US$600 mil fltg rate prim cap nts ser 3 due 08/29/2049 To From -- ---- B BB US$500 mil fltg rate prim cap nts ser 2 due 11/29/2049 To From -- ---- B BB EUR750 mil 6.625% perp cap secs To From -- ---- B BB EUR500 mil step up callable perp cap secs To From -- ---- B BB US$1 bil 6.9% callable perp cap secs bnds To From -- ---- B BB EUR750 mil var rate jr sub callable perp cap secs To From -- ---- B BB EUR532.11 mil step up callable perp cap secs hybrid To From -- ---- B BB GBP270 mil 6.5% sub callable step-up perp nts ser 72 To From -- ---- B BB GBP200 mil 8% step-up perp sub nts ser 35 To From -- ---- B BB GBP500 mil var rate callable perp jr sub upper tier 2 nts ser 1024 To From -- ---- B BB GBP784.61 mil step up callable perp cap secs hybrid ser A To From -- ---- B BB GBP700.02 mil step up callable perp cap secs hybrid ser B To From -- ---- B BB GBP410 mil 6.6625% sub callable step-up perp nts ser 71 To From -- ---- B BB GBP450 mil 6.5% sub callable step-up perp nts ser 73 To From -- ---- B BB Lloyds TSB Capital 1 L.P. EUR430 mil var rate step-up non-voting non-cum perp pfd secs (11) To From -- ---- B- BB- Lloyds TSB Capital 2 L.P. GBP250 mil var rate step-up non-voting non-cum perp pfd secs (11) To From -- ---- B- BB- Scottish Widows PLC GBP560 mil var rate fxd- to step-up fltg-rate callable perp jr sub nts To From -- ---- B BB Clerical Medical Finance PLC EUR750 mil var rate callable perp jr sub nts (12) To From -- ---- B BB Saphir Finance PLC GBP600 mil. fixed/floating rate non-cumulative perpetual callable non step-up debt (13) To From -- ---- CCC+ B+ (7)Guaranteed by Lloyds TSB Bank PLC. (8)Guaranteed by HBOS PLC. (9)Subordinated guarantee from Bank of Scotland PLC. (10)Subordinated guarantee from HBOS PLC. (11)Support from Lloyds TSB Bank PLC. (12)Guaranteed by Clerical Medical Investment Group Ltd. (13)Guaranteed by Lloyds Banking Group PLC. Downgraded; CreditWatch/Outlook Action Northern Rock PLC US$100 mil 8% upper tier 2 sub perp nts ser 155 GBP200 mil step-up perp upper tier 2 sub nts ser 158 GBP300 mil 8.399% step-up callable perp reserve tier 1 cap instruments US$100 mil var rate upper tier 2 perp nts ser 200 GBP200 mil 7.053% Callable perp core tier one nts nts US$700 mil 5.6% upper tier 2 perp callable jr sub nts US$650 mil var rate fxd/ftg callable perp upper tier 2 jr sub hybrid To From -- ---- CCC B/Watch Neg Downgraded Royal Bank of Scotland Group PLC (The) US$1.2 bil var rate callable perp regulatory tier I hybrid ser 1 To From -- ---- B- BB- CAD600 mil var rate callable perp Tier 1 hybrid ser 2851 To From -- ---- B- BB- EUR1.25 bil 5.5% non-cum pfd perp secs ser 1 To From -- ---- CCC+ B+ EUR1.25 bil 5.25% non-cum euro pfd perp secs ser 2 To From -- ---- CCC+ B+ US$200 mil 7.375% reset cap secs To From -- ---- B- BB- US$1.5 bil perp pref sh ser 1 + 2 To From -- ---- B- BB- US$50 mil 7.993% perp cap sec ser B To From -- ---- B- BB- US$850 mil 5.75% callable exchgble cap secs ser B To From -- ---- B- BB- US$1.6 bil 6.99% /fltg callable perp pref stk To From -- ---- B- BB- US$200 mil To From -- ---- CCC+ B+ US$400 mil ser C To From -- ---- CCC+ B+ US$8 mil non-cum pref shrs ser F To From -- ---- CCC+ B+ US$300 mil perp non-cum pref shares ser H To From -- ---- CCC+ B+ US$225 mil 8.5% perp non-cum pref shares ser J To From -- ---- CCC+ B+ US$300 mil 8% perp non-cum pref shares ser I To From -- ---- CCC+ B+ US$925 mil 6.4% callable non-cum perp pref shares ser M To From -- ---- CCC+ B+ US$1 bil 6.35% non cum dollar pref shares callable ser N To From -- ---- CCC+ B+ US$550 mil 6.25% non-cum dollar callable perp pref shares ser P To From -- ---- CCC+ B+ US$675 mil 6.75% non-cum perp callable pref shares ser Q To From -- ---- CCC+ B+ US$650 mil 6.125% callable non-cum perp pref shares ser R To From -- ---- CCC+ B+ US$950 mil 6.6% callable perp pref shares ser S To From -- ---- CCC+ B+ US$1.45 bil 7.25% non cum perp callable pref stk ser T To From -- ---- CCC+ B+ EUR1.3 bil var rate callable non-cum perp pref stk ser 3 To From -- ---- CCC+ B+ US$1.5 bil var rate callable non-cum perp pref stk ser U To From -- ---- CCC+ B+ GBP200 mil non-cum pref shares ser 1 To From -- ---- CCC+ B+ GBP750 mil 8.162% callable non-cum perp pref stk ser 1 To From -- ---- CCC+ B+ National Westminster Bank PLC US$500 mil fltg rate hybrid ser C To From -- ---- B BB US$500 mil var rate perp hybrid To From -- ---- B BB US$500 mil var rate hybrid ser A To From -- ---- B BB US$500 mil var rate hybrid ser B To From -- ---- B BB US$500 mil 7.75% perp hybrid To From -- ---- B BB EUR400 mil 6.625% sub perp hybrid due 10/29/2049 To From -- ---- B BB EUR100 mil fltg rate sub perp hybrid To From -- ---- B BB GBP350 mil var rate hybrid To From -- ---- B BB GBP67.86 mil 11.5% hybrid To From -- ---- B BB GBP126.8 mil step-up sub perp hybrid To From -- ---- B BB GBP161.73 mil step-up sub perp hybrid To From -- ---- B BB US$300 mil non-cum pref shares ser C To From -- ---- B- BB- GBP140 mil 9% ser A To From -- ---- B- BB- RBS Capital Trust A (14) EUR390.93 mil var rate non-cum trust pfd secs perp To From -- ---- B- BB- RBS Capital Trust B (14) US$485.858 mil 6.8% callable non-cum trust pfd secs perp To From -- ---- B- BB- RBS Capital Trust C (14) EUR166.38 mil 4.243% /fltg perp callable non-cum trust pfd secs To From -- ---- B- BB- RBS Capital Trust D (14) GBP92.55 mil 5.6457% /fltg perp callable non-cum trust pfd secs To From -- ---- B- BB- RBS Capital Trust I (14) US$850 mil 4.709% non-cum trust pfd secs callable perp To From -- ---- B- BB- RBS Capital Trust II (15) US$650 mil 6.425% /FRN callable non-cum trust pfd secs perp To From -- ---- B- BB- RBS Capital Trust III (15) US$950 mil 5.512% non-cum trust pfd secs callable perp To From -- ---- B- BB- RBS Capital Trust IV (15) US$550 mil fltg rate non-cum trust pfd callable secs perp To From -- ---- B- BB- Royal Bank of Scotland PLC (The) EUR152.45 mil jr sub step-up hybrid To From -- ---- B BB EUR197.12 mil var rate fltg perp callable jr sub (Upper Tier II) hybrid ser 1587 To From -- ---- B BB EUR242.56 mil var rate callable perp jr sub (Upper Tier II) hybrid ser 1589 To From -- ---- B BB JPY25 bil callable jr sub lower tier 2 fxd/fltg hybrid ser 1818 To From -- ---- B BB CAD700 mil var rate fxd/fltg step-up callable perp jr sub hybrid ser 2595 To From -- ---- B BB GBP150 mil fltg rate jr sub perp hybrid ser 60 To From -- ---- B BB GBP95.77 mil var rate jr sub perp hybrid ser 144 To From -- ---- B BB GBP200.53 mil var rate callable perp jr sub hybrid ser 253 To From -- ---- B BB GBP350 mil 5.625% jr sub perp callable hybrid To From -- ---- B BB GBP173.84 mil 6.2% jr sub callable perp hybrid ser 352 To From -- ---- B BB GBP300 mil 5.625% callable upper tier II perp hybrid To From -- ---- B BB GBP117.40 mil 6.25% perp callable jr sub hybrid ser 238 To From -- ---- B BB GBP178.12 mil 5.125% perp callable jr sub hybrid ser 619 To From -- ---- B BB GBP137.69 mil 6% callable upper tier II perp hybrid ser 1522 To From -- ---- B BB GBP190.05 mil var rate /fltg step-up callable perp jr sub hybrid ser 2538 To From -- ---- B BB Argon Capital PLC GBP750mil 8.162% callable non-cum perp pref stk series 100(1) To From -- ---- CCC+ B+ (14) Guaranteed by Royal Bank of Scotland Group PLC (The). (15) Guaranteed by Royal Bank of Scotland PLC (The). NB: This list does not include all ratings affected. * S&P Puts Ratings on 43 CLO Tranches on Negative CreditWatch ------------------------------------------------------------- Standard & Poor's Ratings Services placed on CreditWatch negative its credit ratings on 43 tranches issued by 11 collateralized loan obligation transactions backed by corporate loan securities. These CreditWatch negative placements follow S&P's preliminary review of the deterioration in the credit quality of the underlying portfolios that S&P has observed in recent months. Several CLOs have also experienced par value losses following the default of portfolio holdings. In S&P's opinion, portfolio credit deterioration and par losses increase the risk that cash flows may not be sufficient to fully repay all the rated classes, putting downward pressure on the ratings. In determining whether to place a CLO tranche rating on CreditWatch negative, S&P take into consideration a number of factors, including, but not limited to: -- The percentage of assets (including the change in the percentage of assets), based on S&P's analysis, rated below 'B-' and the percentage of defaults already experienced in the portfolios; -- S&P's rated overcollateralization metric, which provides an estimate of rating stability for cash flow collateralized debt obligation tranches based on output from Standard & Poor's CDO Evaluator model and a simplified cash flow analysis; and -- Trends in performance results across similar transactions. S&P will closely monitor the transactions' performance and perform further cash flow analysis before resolving these CreditWatch placements. Ratings List Ratings Placed on Creditwatch Negative Alpstar CLO 1 PLC EUR330 Million Secured Fixed- And Floating-Rate Notes Rating ------ Class To From ----- -- ---- B AA/Watch Neg AA C1 A/Watch Neg A C2 A/Watch Neg A D BBB/Watch Neg BBB E BB/Watch Neg BB Axius European CLO S.A. EUR350 Million Floating-Rate Notes Rating ------ Class To From ----- -- ---- C A/Watch Neg A D BBB-/Watch Neg BBB- E BB-/Watch Neg BB- CELF Loan Partners III PLC EUR507.5 Million Secured Floating-Rate Notes Rating ------ Class To From ----- -- ---- B-1 AA/Watch Neg AA B-2 AA/Watch Neg AA C A/Watch Neg A D BBB/Watch Neg BBB E BB/Watch Neg BB T Combo BBB/Watch Neg BBB Euro-Galaxy CLO B.V. EUR383 Million Senior Secured Fixed- and Floating-Rate Notes Rating ------ Class To From ----- -- ---- C A/Watch Neg A D BBB/Watch Neg BBB E BB/Watch Neg BB GSC European CDO I-R S.A. EUR350 Million Floating and Fixed-Rate Notes Rating ------ Class To From ----- -- ---- C1 A/Watch Neg A C2 A/Watch Neg A D BBB-/Watch Neg BBB- E BB-/Watch Neg BB- GSC European CDO II S.A. EUR400 Million Floating- and Fixed-Rate Notes Rating ------ Class To From ----- -- ---- C1 A-/Watch Neg A- C2 A-/Watch Neg A- D1 BBB-/Watch Neg BBB- D2 BBB-/Watch Neg BBB- E1 BB/Watch Neg BB E2 BB/Watch Neg BB GSC European CDO IV S.A. EUR400 Million Floating-Rate Notes Rating ------ Class To From ----- -- ---- C A/Watch Neg A D BBB-/Watch Neg BBB- E BB-/Watch Neg BB- R Combo A/Watch Neg A T Combo BBB-/Watch Neg BBB- U Combo BBB/Watch Neg BBB Melchior CDO I S.A. EUR400 Million Fixed- and Floating-Rate Notes Rating ------ Class To From ----- -- ---- B-1 AA/Watch Neg AA B-2 AA/Watch Neg AA C-1 BB-/Watch Neg BB- C-2 BB-/Watch Neg BB- D B-/Watch Neg B- Mercator CLO II PLC EUR412 Million Floating-Rate Notes Rating ------ Class To From ----- -- ---- B-2 Def BB-/Watch Neg BB- Prospero CLO I EUR35.6 Million, GBP24.5 Million, US$176.15 Million Senior Secured Floating-Rate Notes (Issued By Prospero CLO I B.V., Prospero CLO I Inc.), US$7.7 Million Senior Secured Floating-Rate Notes and US$30.7 Million Subordinated Notes (Issued By Prospero CLO I B.V.) Rating ------ Class To From ----- -- ---- C BBB/Watch Neg BBB D BB/Watch Neg BB Prospero CLO II Inc./ Prospero CLO II B.V. EUR69 Million, GBP10.5 Million, and US$293.7 Million Secured Floating-Rate Notes Rating ------ Class To From ----- -- ---- C BBB/Watch Neg BBB D BB/Watch Neg BB * EUROPE: Fitch Says CLO Performance Suffers as Loan Defaults Rise ------------------------------------------------------------------ Fitch Ratings says that the performance of European CLOs has recently suffered from a rapid negative credit migration in the leveraged loan market. In the first edition of a new quarterly European Leveraged Loan CLO Performance Tracker report, the agency notes that 14 obligors were reported as defaulted between December 2008 and March 2009. "The performance of European CLOs is deteriorating due to the stress in the leveraged loan sector that has resulted from the economic downturn," said Jeffery Cromartie, Senior Director and head of Fitch's European Structured Credit Performance Analytics. "Between December 2008 and March 2009, a first wave of defaults in the leveraged loan sector occurred, resulting in a breach of overcollateralization tests for most Fitch-rated European CLOs." "With further leveraged loan defaults expected, Fitch expects that overcollateralization tests currently not in compliance are likely to remain breached for an extended period of time," said Laurent Chane-Kon, Director in Fitch's Structured Credit team. "This is to the detriment of the manager, which will not receive subordinated fees. In some cases, OC tests which are not in compliance could also be detrimental for junior and mezzanine noteholders." Meanwhile, the concentration of 'CCC' and below rated obligors in CLO portfolios has increased sharply. An increasing number of CLOs are now marking down 'CCC' obligors at their market values for the calculation of OC ratios. Fitch has taken significant negative rating action in the sector and 104 European CLOs are on Negative Outlook, while some CLO transactions have already been downgraded due to portfolio credit deterioration. Fitch is continuing to closely monitor the performance of the CLO sector and will take rating actions when deemed appropriate. The European CLO Tracker survey also reviews CLO structural features that are now being tested by the increasingly challenging economic environment, exposing some shortcomings. The European Leveraged Loan CLO Performance Tracker (European CLO Tracker), in similarity to the agency's existing pan European SME tracker, compares data across the Fitch-rated European CLO universe aggregated from transaction performance reports and the agency's own surveillance systems. * BOOK REVIEW: Corporate Recovery – Managing Companies in Distress ------------------------------------------------------------------ Authors: Stuart Slatter and David Lovett Publisher: Beard Books Softcover: 352 pages List Price: US$34.95 Review by Henry Berry According to the authors, "turnaround management is everyday management." There are no miraculous remedies for bringing a company out of its troubles; no formulas to apply that will guarantee recovery. Management has to be alert and flexible to adapt to ever-changing business conditions both outside and within a company. Although turnaround management (or "crisis management" as the authors also call it) is often regarded as a specialized type of management or a gifted set of management skills, Slatter and Lovett argue that any good manager should have the skills to be able to move his or her company toward recovery. Managers often fail because they do not recognize or acknowledge the warning signs of a crisis, not because they lacked the relevant management skills. Corporate Recovery does not teach managers how to become "crisis managers." While the book does provide guidance on what management skills are required if a company slips into a crisis, for the most part the authors take a broader view. Crisis management involves applying traditional management techniques in an environment where the patient is seriously ill, both cash and time are in short supply, and rapid recovery is required. The authors suggest that these same skills are necessary when a company has been acquired and is inevitably undergoing some changes, improvement of short-time financial performance is sought, and a company is trying to head off a crisis rather than pull itself out of one. The authors give attention to both external and internal factors and their interrelationship. The reader is taken chapter by chapter through all of the stages of distress in a company, from early warning signs through pervasive problems to moving onto solid ground and emerging from a turnaround. The book does not offer merely an academic analysis of the distinguishing factors of each stage. The authors provide relevant, effective action for each stage of distress. Different stages require different actions. Under circumstances of distress, the enthusiasm and morale that are signs of a healthy company in normal times cannot fix the causes of the problems. Ordinary leadership skills such as setting a good example and inspiring loyalty will not effect a turnaround. Fundamental in a successful turnaround is the actions taken by a company's key decisionmakers. Only they are in a position to make the crucial decisions that can bring an organization out of distress. Corporate Recovery is an incomparable guide for managers of companies in distress. The book brings clarity to what is often a clouded, disturbing, and stressful situation, even for the most experienced decisionmakers. This book can help an organization's decisionmakers ward off or minimize hazards to its well being. For ones who find themselves already in worrisome crisis situations, it can be an invaluable handbook, no matter what stage of the crisis. Slatter is founding member of the Society of Turnaround Professionals. He works with corporations on turnarounds and provides training for managers and executives. Lovett has extensive experience in turnarounds and heads his own firm helping companies improve their operations and financial performance and restore or increase corporate value. ********* 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 * * *