/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/090604.mbx T R O U B L E D C O M P A N Y R E P O R T E R E U R O P E Thursday, June 4, 2009, Vol. 10, No. 109 Headlines A U S T R I A A. SCHOTTEN: Claims Filing Period Ends June 15 ATZ – MASSIVHAUSBAU GMBH: Claims Registration Period Ends June 9 ENERGY BIODIESEL: Claims Registration Period Ends June 17 PALAIS BAUTRAGER: Claims Filing Period Ends June 15 TISCHLEREI WUNTSCHEK: Claims Filing Deadline is June 15 A Z E R B A I J A N * AZERBAIJAN: Fitch Affirms Issuer Default Ratings at 'BB+' F R A N C E CHRISTIAN LACROIX: Put Into Administration COMPAGNIE GENERALE: S&P Assigns 'BB' Rating on US$300 Mil. Notes G E R M A N Y CONTINENTAL AG: Moody's Cuts Corporate Family Rating to 'Ba3' DELBROUCK GROUP: Files for Insolvency I C E L A N D * ICELAND: To Start Talks With Creditors of Failed Banks This Week I R E L A N D ILIAD INVESTMENTS: Fitch Withdraws 'C' Ratings on Series 8 Notes ILIAD INVESTMENTS: Fitch Withdraws 'C' Ratings on Series 14 Notes I T A L Y PARMALAT SPA: France's Danone Denies Interest in Acquisition K A Z A K H S T A N BM TECHNOLOGY: Creditors Must File Claims by June 19 GRAND POST: Creditors Must File Claims by June 19 MASTER STROY & K: Creditors Must File Claims by June 19 NEFTE GAS: Creditors Must File Claims by June 19 SAIGAU LLP: Creditors Must File Claims by June 19 K Y R G Y Z S T A N KG CELL: Creditors Must File Claims by July 3 N E T H E R L A N D S EUROLOAN CLO: Moody's Junks Ratings on Two Classes of Notes R U S S I A BURUKTALSKIY NICKEL: Creditors Must File Claims by June 15 ELIT-STROY CJSC: Creditors Must File Claims by June 15 NOVOLIPETSK STEEL: Posts US$193.8 Mln Net Loss in First Qtr. 2009 RUSSIAN CORPORATION: S&P Assigns 'BB+' Long-Term Issuer Rating SIBIRSKAYA CONSTRUCTION: Creditors Must File Claims by June 15 STROY-PLAST LLC: Creditors Must File Claims by July 15 WESTERN-URALSK LLC: Creditors Must File Claims by July 15 S P A I N IM PRESTAMOS: Moody's Reviews 'Ba2' Rating on Class A-3 Notes TESORERIA I: Moody's Cuts Ratings on Two Classes of Notes to Low-B TESORERIA II: Moody's Lowers Rating on Class C Notes to 'Ba1' S W I T Z E R L A N D DRUCKEREI MARCH: Claims Filing Deadline is June 30 INTERNATIONAL MUSIC: Creditors Must File Claims by June 25 OLINES MEDITERRAN: Claims Filing Deadline is June 25 SCHWIZERLAND HANDEL: Creditors Must File Claims by June 25 TRUFIELD HOLDING: Claims Filing Deadline is June 30 * SWITZERLAND: Slips Into Recession U K R A I N E AGRICULTURAL LLC: Creditors Must File Claims by June 12 EVROTECH LLC: Creditors Must File Claims by June 12 FOOD ALLIANCE: Court Starts Bankruptcy Supervision Procedure IMEXBANK JSCB: Bank Default Cues Moody's to Junk Deposit Ratings MOUNTER-538 LLC: Court Starts Bankruptcy Supervision Procedure MOUNTER-538 OJSC: Court Starts Bankruptcy Supervision Procedure PRAVEX BANK: Moody's Withdraws 'E+' Bank Financial Strength Rating U N I T E D K I N G D O M AEOLUS CDO: S&P Junks Ratings on Class E Colonnade II & III Notes BRADFORD & BINGLEY: Loan Losses Could Hit GBP700 Mln This Year KW LINFOOT: Peel Drafts Insolvency Expert to Conduct Investigation LDV: Lack of Funds Prompts Administration Request LLOYDS BANKING: UKFI Says to Fully Support Board LLOYDS BANKING: Moody's Cuts Rating on Preference Shares to 'B3' LUCITE INT'L: S&P Withdraws 'B' Long-Term Corporate Credit Rating PIERSE CONTRACTING: In Liquidation, Zolfo Cooper Appointed ROYAL BANK: Moody's Cuts Rating on Tier 1 Preference Shares to B3 SMARTFUNDIT.COM LIMITED: In Administration, Vantis Appointed TAURUS CMBS: Fitch Downgrades Rating on Class C Notes to 'B' * S&P Takes Credit Rating Actions on Eight European CDO Tranches * Upcoming Meetings, Conferences and Seminars ********* ============= A U S T R I A ============= A. SCHOTTEN: Claims Filing Period Ends June 15 ---------------------------------------------- Creditors owed money by A. Schotten Merkur-Logistik KEG have until June 15, 2009, to file written proofs of claim to the court- appointed estate administrator: Mag. Daniel Lampersberger Esteplatz 4 1030 Vienna Austria Tel: 712 33 30-0 Fax: 712 33 30-30 E-mail: kanzlei@engelhart.at Creditors and other interested parties are encouraged to attend the creditors' meeting at 9:30 a.m. on June 29, 2009, for the examination of claims. ATZ – MASSIVHAUSBAU GMBH: Claims Registration Period Ends June 9 ---------------------------------------------------------------- Creditors owed money by ATZ - Massivhausbau GmbH have until June 9, 2009, to file written proofs of claim to the court- appointed estate administrator: Mag. Herbert Hoffmann Wiener Strasse 18 3430 Tulln Austria Tel: 02272/81 9 29 Fax: 02272/81929/20 E-mail: mag.hoffmann@aon.at Creditors and other interested parties are encouraged to attend the creditors' meeting at 11:30 a.m. on June 30, 2009, for the examination of claims at: Land Court of St. Poelten Room 216 Second Floor St. Poelten Austria ENERGY BIODIESEL: Claims Registration Period Ends June 17 --------------------------------------------------------- Creditors owed money by energy biodiesel engineering GmbH have until June 17, 2009, to file written proofs of claim to the court- appointed estate administrator: Mag. Dr. Guenther Hoedl Schulerstrasse 18 1010 Vienna Austria Tel: 513 16 55 Fax: DW 33 E-mail: Hoedl@anwaltsteam.at Creditors and other interested parties are encouraged to attend the creditors' meeting at 9:50 a.m. on July 1, 2009, for the examination of claims. PALAIS BAUTRAGER: Claims Filing Period Ends June 15 --------------------------------------------------- Creditors owed money by Palais Bauträger + Bau GmbH have until June 15, 2009, to file written proofs of claim to the court- appointed estate administrator: Dr. Stephan Riel Landstrasser Hauptstrasse 1/2 1030 Vienna Austria Tel: 713 44 33 Fax: 713 10 33 E-mail: kanzlei@jsr.at Creditors and other interested parties are encouraged to attend the creditors' meeting at 9:50 a.m. on June 29, 2009, for the examination of claims. TISCHLEREI WUNTSCHEK: Claims Filing Deadline is June 15 ------------------------------------------------------- Creditors owed money by Tischlerei Wuntschek GmbH have until June 15, 2009, to file written proofs of claim to the court- appointed estate administrator: Mag. Christian Koechl 10. Oktober Strasse 17/I 9500 Villach Austria Tel: 04242/27 18 3-0 Fax: 04242/214925 E-mail: ra.office@koechl.com Creditors and other interested parties are encouraged to attend the creditors' meeting at 9:00 a.m. on June 22, 2009, for the examination of claims at: Land Court of Klagenfurt Room 225 Second Floor Klagenfurt Austria =================== A Z E R B A I J A N =================== * AZERBAIJAN: Fitch Affirms Issuer Default Ratings at 'BB+' ----------------------------------------------------------- Fitch Ratings has affirmed the Republic of Azerbaijan's Long-term foreign and local currency Issuer Default Ratings at 'BB+' with Stable Outlooks. The agency has also affirmed Azerbaijan's Country Ceiling at 'BB+' and Short-term foreign currency IDR at 'B'. "Azerbaijan's sovereign rating is underpinned by its large hydrocarbon endowment and the oil windfall of recent years, which has enabled the sovereign to build up a strong and liquid balance sheet that leaves it relatively well placed to navigate through the challenging global environment," said Andres Klaar, Associate Director at Fitch's Sovereign team. The country has engaged major western oil companies in modernizing its oil and gas production and transport facilities. Rising oil production propelled annual real growth of 21% from 2004 to 2008 - faster than in any other Fitch-rated country. The consolidated government budget surplus reached 11% of GDP in 2008, up from 2.6% in 2007 while the current account surplus was above 30% of GDP. With the accumulation of the government's oil revenue into the Sovereign Wealth Fund - State Oil Fund of Azerbaijan Republic (SOFAZ), sovereign net foreign assets increased to 35% of GDP at end-2008 ('BB' median is 5.8% net liability position) whereas government debt was 8.6% of GDP ('BB' median: 40.7%). The transparent management and reporting of SOFAZ is also a rating strength. The strong starting position of the budget and the accumulation of resources in SOFAZ should allow Azerbaijan to orchestrate a moderate fiscal easing this year to support economic growth without the consolidated budget moving into deficit. Nevertheless, lower oil prices are likely to require tighter control of expenditure and a rebalancing of the economy. Despite sizeable fiscal savings in SOFAZ in 2006-08, budget expenditures increased 65% annually in nominal terms over these years. This stimulus, exacerbated by a nascent domestic credit boom, led to the economy overheating with inflation peaking at 25% in the middle of 2008, albeit partly due to rising global food and energy prices. High inflation contributed to real exchange rate appreciation and worsened international competitiveness of the non-oil sector. Fitch forecast inflation to decline to 3% in 2009, while GDP growth remains positive at 2.5%. However, coping with lower oil prices and navigating through uncertain global financial conditions raises some risks. Fitch regards the Azeri banking system as weak. It has been growing rapidly, albeit from a low base, and Fitch expects the non- performing loan ratio to rise from a current estimated 10%-15%. The stock of base money and credit fell in Q109, despite reductions in the refinancing rate and banks' reserve requirements. International reserves declined in Q109 as the central bank supported the exchange rate. However, private sector external debt is moderate, largely shielding the country from global financial pressures. Fitch estimates Azerbaijan's external debt service ratio at 6% of CXR in 2009 relative to 34% for Kazakhstan and 30% for Russia. Structural issues also weigh on Azerbaijan's ratings. Institutions and governance are relatively weak and the business climate remains difficult, despite an impressive improvement in the country's ranking in the latest World Bank's "Ease of Doing Business" survey. Structural reforms are necessary to support economic growth in the long term, as increasing hydrocarbon production is expected to be temporary. =========== F R A N C E =========== CHRISTIAN LACROIX: Put Into Administration ------------------------------------------ AFP reports that a commercial court in Paris has placed French fashion house Christian Lacroix SNC into administration. "A period of observation of six months has been decided and an administrator has been nominated," the report quoted Simon Tahar, the company's lawyer, as saying. The report recalls the company, which employs 125 people, declared insolvency last Thursday, blaming "the sharp downturn of the luxury market." The report relates the company said then it intended "to present a continuation plan" and "to maintain its business operations throughout the proceedings." According to the report, French designer Christian Lacroix said he had been designing without payment in recent months and that the company owed him EUR1.2 million (US$1.7 million). Mr. Lacroix also said that shareholder management at the company had been "catastrophic", the report notes. On June 1, 2009, the Troubled Company Reporter-Europe, citing Daily Mail Reporter, reported that the company's owner, the Falic Group, had been talking with investors but negotiations fell through because of the financial crisis. COMPAGNIE GENERALE: S&P Assigns 'BB' Rating on US$300 Mil. Notes ---------------------------------------------------------------- Standard & Poor's Ratings Services said it has assigned its 'BB' long-term issue rating to the proposed US$300 million senior unsecured notes due May 2016, to be issued by France-based Compagnie Generale de Geophysique – Veritas (CGG Veritas; BB/Negative/--), the world's leading seismic-equipment producer and second-largest player in seismic services. At the same time, S&P assigned a recovery rating of '3' to the debt issue, indicating S&P's expectation of meaningful (50%-70%) recovery in the event of a payment default. This rating is preliminary and subject to satisfactory review of final documentation. The recovery ratings of '2' and issue ratings of 'BB+' on the group's senior secured bank debt remain unchanged. A recovery rating of '2' indicates S&P's expectation of substantial (70%-90%) recovery in the event of a payment default. Coverage on the senior secured bank debt is at the low end of the range. The proposed debt issuance does not materially affect overall recovery prospects as the new debt raised is expected to be used to partially prepay the senior secured and other senior obligations so overall debt levels do not materially change. Recovery expectations for all debt instruments are underpinned by a stressed enterprise valuation on a going concern basis of about US$2 billion, with only minor changes made to S&P's previous default scenario and valuation assumptions. The notes rank pari passu with the existing senior unsecured notes and benefits from the same guarantee package. Key entities (such as CGGVeritas Services Holding B.V., CGG Veritas Services Holding (U.S.) Inc., CGGVeritas Land (U.S.) Inc., CGGVeritas Services (U.S.) Inc., Veritas Investments Inc., and Sercel Inc.) provide upstream guarantees. Overall, S&P consider the notes' covenant package to be only modestly credit protective, given the flexibility afforded to CGG Veritas to raise additional debt, despite satisfactory inclusion of change-of-control and sale-of-asset clauses. The "additional debt" test requires compliance with a consolidated interest coverage ratio of 3:1 (roughly defined as adjusted EBITDA before multi-client amortization adjusted for noncash and nonrecurring elements compared with interest costs). ============= G E R M A N Y ============= CONTINENTAL AG: Moody's Cuts Corporate Family Rating to 'Ba3' ------------------------------------------------------------- Moody's Investors Service has downgraded Continental AG's corporate family rating to Ba3 from Ba2. The outlook remains negative. Falk Frey, Senior Vice President and lead analyst at Moody's for Continental AG, commented: "The rating action reflects primarily Moody's concern that the severe downturn in global automotive markets would result in financial ratios below what Moody's had anticipated for the previous Ba2 rating category". Frey went on: "The negative outlook reflects in particular Conti's potential challenge to meet its financial covenants included in its syndicated credit facilities as well as the upcoming refinancing risk of EUR3.5 billion due in August 2010 from the VDO acquisition debt". The uncertainty around the situation at Conti's major shareholder Schaeffler and the announced intention by management to review a possible reorganization of the group is also weighing on the rating though Moody's notes that the rating continues to assume that the financing arrangements of Continental and its shareholder will remain separate. In Q1 2009 Conti's operating results were impacted by (i) the steep decline in European and North American production volumes of passenger cars and light trucks; (ii) the shift in production mix towards smaller vehicles (iii) as well as an even steeper decline in truck production rates in Europe and NAFTA and (iv) weak tire markets. Consequently, Conti's revenues declined by 35% in the first quarter compared to the previous year's quarter and reported EBITDA decreased 72% to EUR249.5 million from EUR884 million. Reported EBIT was negative by EUR165 million compared to a gain of EUR456.7 million in Q1 2008. Although Moody's anticipates the first quarter to be the weakest in the current year and the decline in production volumes to smooth in the next three quarters, this might not be sufficient to comply with covenants in the company's key credit facility. In addition, Conti has a relatively high exposure to the Detroit-3 manufacturers among the European auto suppliers on a global basis. The current production stop at Chrysler following bankruptcy filing and the risk of a similar decision from General Motors result in additional challenges for Conti to meet its fiscal year 2009 targets of a substantial free cash flow generation and reduction in net indebtedness. Moody's positively notes lower capital expenditures, reduced dividends, a tight working capital management as well as further cost savings initiated and positive effects from raw material prices compared to last year as mitigating factors. At the same time, Moody's expects the company's large non-OE business (more than 30% of revenues) to be more resilient and allow for overall positive operating results in 2009 despite adverse market conditions. The negative outlook reflects that the headroom under its financial covenants might become very tight over the next few quarters and moreover uncertainty over the reorganization of the group which could have an impact on the current financial structure of the company under certain scenarios. Moody's notes that the ratings could come under further downward pressure should visibility arise of lower than expected profitability in the next few quarters or a failure to achieve break-even Free Cash Flow in 2009. Also, a failure to identify definite funding sources to refinance the EUR3.5 billion debt maturity in the next few months could also result in rating pressure. Finally any developments around the Conti/Schaeffler relationship which would negatively impact the position of Conti's creditors would put pressure on the rating. Moody's last rating action on Conti was a downgrade to Ba2 (negative outlook) from Ba1 (negative outlook) on February 13, 2009. Headquartered in Hanover, Germany, Continental AG is one of the top automotive suppliers worldwide in the areas chassis and safety technology, interior and infotainment and powertrain as well as the world's fourth-largest manufacturer of passenger and commercial vehicle tires. In 2008 Conti generated consolidated sales of EUR24 billion. DELBROUCK GROUP: Files for Insolvency ------------------------------------- Plasteurope reports that The Delbrouck group filed for insolvency at the end of April after being hit by the financial crisis and a fall in demand. Martin Buchheister of law firm Bergfeld & Partner was appointed provisional administrator of the company, Plasteurope relates. The company, Plasteurope says, was unable to pay its workers' wages in full. Plasteurope notes local media have reported the failure of confidential negotiations with a potential investor. Headquartered in Menden, Germany, The Delbrouck group -- http://www.delbrouck.de/-- manufactures moulded, returnable packaging products. ============= I C E L A N D ============= * ICELAND: To Start Talks With Creditors of Failed Banks This Week ------------------------------------------------------------------ AFP reports Iceland's finance ministry said on Tuesday it will begin talks this week with the creditors of the failed commercial banks it took over last year. AFP relates Finance Minister Steingrimur Sigfusson told radio RUV news on Tuesday that efforts to recapitalize the banks Kaupthing, Landsbanki and Glitnir -- which collapsed in the credit squeeze -- had taken longer than expected. Mr. Sigfusson, as cited by AFP, said "Some things have taken longer than expected and turned out to be more extensive, such as restructuring the financial system." According to Mia Shanley of Reuters, financial authorities had previously expected a deal could be reached by mid-May, but negotiations have been held up due to problems valuing the assets of the banks. "It is now hoped that the discussions will be able to be concluded in a rapid timeframe in order to finalize the capitalization of the new banks," Reuters quoted the finance ministry as saying in a statement. Reuters notes the finance ministry also said the government hoped to agree on compensation for creditors of the banks. ============= I R E L A N D ============= ILIAD INVESTMENTS: Fitch Withdraws 'C' Ratings on Series 8 Notes ---------------------------------------------------------------- Fitch Ratings has withdrawn the ratings on Iliad Investments Plc Series 8's notes: -- EUR40 million class A (ISIN: XS0164067919) 'C'; Recovery Rating 'RR6' -- EUR30 million class B (ISIN: XS0164068487) 'C'; Recovery Rating 'RR6' -- EUR30 million class C (ISIN: XS0164069709) 'C'; Recovery Rating 'RR6' Fitch will not longer provide rating or analytical coverage of the notes. The rating action follows BNP Paribas, the arranger, informing Fitch that the synthetic CDO squared transaction has been restructured and that no information will be provided on the restructured transaction. The agency downgraded the class A to C notes to 'C' from 'B', and assigned each tranche a Recovery Rating of 'RR6' on March 20, 2009, following a continued deterioration in portfolio credit quality, particularly in relation to assets rated 'CCC' or below. ILIAD INVESTMENTS: Fitch Withdraws 'C' Ratings on Series 14 Notes ----------------------------------------------------------------- Fitch Ratings has withdrawn the ratings on Iliad Investments Plc Series 14's notes: -- EUR40 million class A (ISIN: XS0173610741) 'CC'; Recovery Rating 'RR5' -- EUR30 million class B (ISIN: XS0173611129) 'C'; Recovery Rating 'RR6' -- EUR30 million class C (ISIN: XS0173611475) 'C'; Recovery Rating 'RR6' Fitch will not longer provide rating or analytical coverage of the notes. The rating action follows BNP Paribas, the arranger, informing Fitch that the synthetic CDO squared transaction has been restructured and that no information will be provided on the restructured transaction. The agency downgraded the class B and C notes to 'C' from 'B', and assigned the two tranches a Recovery Rating of 'RR6', while simultaneously downgrading the class A notes to 'CC' from 'B', and assigning a Recovery Rating of 'RR5', on March 20, 2009, following a continued deterioration in portfolio credit quality, particularly in relation to assets rated 'CCC' or below. ========= I T A L Y ========= PARMALAT SPA: France's Danone Denies Interest in Acquisition ------------------------------------------------------------ Namnews reports that France's Groupe Danone has rejected investor speculation over the last week that it is interested in acquiring Parmalat SpA. Namnews relates CEO Emmanuel Faber told daily Le Figaro that the group, which is raising its capital by EUR3 billion through a new rights issue, does not plan to invest in Parmalat or its Italian peer Granolaro. The group, however, noted it will look for deals in its core businesses -- dairy, medical and infant nutrition, and water, NamNews states. In a May 27 report, Reuters disclosed Il Sole 24 Ore, citing sector experts, said Danone could use its EUR3 billion capital raising for acquisitions, with Parmalat and dairy products maker Granarolo possible targets in Italy. 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). =================== K A Z A K H S T A N =================== BM TECHNOLOGY: Creditors Must File Claims by June 19 ---------------------------------------------------- LLP BM Technology Limited Kazakhstan is undergoing liquidation. Creditors have until June 19, 2009, to submit proofs of claim to: Pirogov Str. 19 Glubokoye Glubokovsky East Kazakhstan Kazakhstan The Court is located at: The Specialized Inter-Regional Economic Court of East Kazakhstan Bajov Str. 2 070000 Ust-Kamenogorsk East Kazakhstan Kazakhstan GRAND POST: Creditors Must File Claims by June 19 ------------------------------------------------- Creditors of LLP Grand Post have until June 19, 2009, to submit proofs of claim to: Tole bi Str. 295-317 Almaty azakhstan The Specialized Inter-Regional Economic Court of Almaty commenced bankruptcy proceedings against the company on April 1, 2008, after finding it insolvent. The Court is located at: The Specialized Inter-Regional Economic Court of Almaty Baizakov Str. 273b Almaty Kazakhstan MASTER STROY & K: Creditors Must File Claims by June 19 ------------------------------------------------------- Creditors of LLP Master Stroy & K have until June 19, 2009, to submit proofs of claim to: Tereshkov Str. 10 Otenai Taldykorgan Almaty Kazakhstan Tel: 8(7282) 22-90-39, 8 701 362 50-46 The Specialized Inter-Regional Economic Court of Almaty commenced bankruptcy proceedings against the company on March 25, 2009, after finding it insolvent. The Court is located at: The Specialized Inter-Regional Economic Court of Almaty Tauelsyzdyk Str. 53 Taldykorgan Almaty Kazakhstan NEFTE GAS: Creditors Must File Claims by June 19 ------------------------------------------------ LLP Nefte Gas Engineering Service is undergoing liquidation. Creditors have until June 19, 2009, to submit proofs of claim to: Korkytata Str. 3a-2 Kyzylorda Kazakhstan SAIGAU LLP: Creditors Must File Claims by June 19 ------------------------------------------------- Creditors of LLP Factory-Farm Corporation Saigau have until June 19, 2009, to submit proofs of claim to: Tereshkov Str. 10 Otenai Taldykorgan Almaty Kazakhstan Tel: 8 (7282) 22-90-39, 8 701 362 50-46 The Specialized Inter-Regional Economic Court of Almaty commenced bankruptcy proceedings against the company on Dec. 12, 2008, after finding it insolvent. The Court is located at: The Specialized Inter-Regional Economic Court of Almaty Tauelsyzdyk Str. 53 Taldykorgan Almaty Kazakhstan =================== K Y R G Y Z S T A N =================== KG CELL: Creditors Must File Claims by July 3 --------------------------------------------- LLC KG Cell is undergoing liquidation. Creditors have until July 3, 2009, to submit proofs of claim. Inquiries can be addressed to (0-775) 97-69-74. ===================== N E T H E R L A N D S ===================== EUROLOAN CLO: Moody's Junks Ratings on Two Classes of Notes ----------------------------------------------------------- Moody's Investors Service has downgraded its ratings of five classes of notes and left on review for further possible downgrade four of those classes of notes issued by Euroloan CLO I B.V. One class of notes was also placed under review for possible downgrade. Euroloan CLO I B.V., a static CLO, failed its effective date test in April 2009, as the collateral par amount did not reach the required level. In the analysis of this transaction, Moody's used information from the February 2009 trustee report, which is the latest certified information available. The arranger, Merrill Lynch, subsequently informed Moody's that of the approximately EUR75 million of cash remaining un-invested in the transaction as of February 2009, EUR35 million has been used to invest in collateral obligations. In its analysis, Moody's assumed that the remaining EUR40 million will be used to pay down the Class A1 notes at the next payment date, as per the transaction documents. Moody's also made assumptions regarding the credit quality of the EUR35 million in new assets and left all classes of notes on watch for further possible downgrade pending further information. The transaction has exposure to European leveraged loans, which continue to deteriorate in the current economic environment. Credit deterioration of the collateral pool is observed in, among others, a decline in the average credit rating (as measured through the weighted average rating factor) and an increase in the proportion of securities from issuers rated Caa1 and below. The transaction also has a large exposure (above 16%) to mezzanine CLO tranches, which have suffered significant rating deterioration. The weighted average rating factor of the structured finance asset pool increased from 1,570 originally to 5,880. According to Moody's, the rating actions taken on the notes are a result of applying Moody's revised assumptions with respect to default probability, the treatment of ratings on "Review for Possible Downgrade" or with a "Negative Outlook," and the calculation of the Diversity Score. The actions also reflect consideration of credit deterioration of the underlying portfolio as described above. The revised assumptions that have been applied to all corporate credits in the underlying portfolio are described in the press release dated February 4, 2009, titled "Moody's updates key assumptions for rating CLOs." Moody's initially analysed and continues to monitor this transaction using primarily the methodology and its supplements for cash flow CLOs as described in Moody's Special Reports and press releases below: -- Moody's Approach to Rating Collateralized Loan Obligations (December 2008) The rating actions are: Euroloan CLO I B.V.: (1) EUR195,000,000 Class A1 Senior Floating Rate Notes due 2029 -- Current Rating: Aaa, on review for possible downgrade -- Prior Rating: Aaa -- Prior Rating Date: 30 October 2008, assigned Aaa (2) EUR65,000,000 Class A2 Senior Floating Rate Notes due 2029 -- Current Rating: A1, on review for possible downgrade -- Prior Rating: Aaa, on review for possible downgrade -- Prior Rating Date: March 4, 2009, Aaa placed under review for possible downgrade (3) EUR30,000,000 Class B Senior Floating Rate Notes due 2029 -- Current Rating: Ba1, on review for possible downgrade -- Prior Rating: Aa2, on review for possible downgrade -- Prior Rating Date: March 4, 2009, Aa2 placed under review for possible downgrade (4) EUR18,000,000 Class C Senior Subordinated Deferrable Floating Rate Notes due 2029 -- Current Rating: B2, on review for possible downgrade -- Prior Rating: A3, on review for possible downgrade -- Prior Rating Date: March 4, 2009, A3 placed under review for possible downgrade (5) EUR21,000,000 Class D Senior Subordinated Deferrable Floating Rate Notes due 2029 -- Current Rating: Caa3, on review for possible downgrade -- Prior Rating: Baa3, on review for possible downgrade -- Prior Rating Date: March 4, 2009, Baa3 placed under review for possible downgrade (6) EUR16,500,000 Class E Senior Subordinated Deferrable Floating Rate Notes due 2029 -- Current Rating: Ca -- Prior Rating: Ba3, on review for possible downgrade -- Prior Rating Date: March 4, 2009, Ba3 placed under review for possible downgrade =========== R U S S I A =========== BURUKTALSKIY NICKEL: Creditors Must File Claims by June 15 ---------------------------------------------------------- Creditors of LLC Buruktalskiy Nickel Plant (TIN 5644004719) have until June 15, 2009, to submit proofs of claims to: A. Tsukanov Temporary Insolvency Manager Office 420 Shosseynaya Str.24a 460028 Orenburg Russia The Arbitration Court of Orenburgskaya will convene at 9:30 a.m. on Aug. 18, 2009, to hear bankruptcy supervision procedure on the company. The case is docketed under Case No. ?47-2180/2009. The Debtor can be reached at: LLC Buruktalskiy Nickel Plant Svetlyy Orenburgskaya Russia ELIT-STROY CJSC: Creditors Must File Claims by June 15 ------------------------------------------------------ Creditors of CJSC Elit-Stroy-Rekonstruktsia (TIN 7743079130, PSRN 1037743023064, RVC 772201001) (Construction) have until June 15, 2009, to submit proofs of claims to: V. Mayorov Temporary Insolvency Manager Post User Box 3 109341 Moscow Russia The Arbitration Court of Moscow will convene on Nov. 26, 2009, to hear bankruptcy supervision procedure on the company. The case is docketed under Case No. ?40–26231/09–18-88B. The Debtor can be reached at: CJSC Elit-Stroy-Rekonstruktsia Building 1a Krasnokazarmennaya Str. 14 Moscow Russia NOVOLIPETSK STEEL: Posts US$193.8 Mln Net Loss in First Qtr. 2009 ----------------------------------------------------------------- RIA Novosti reports that Novolipetsk Steel OJSC posted a US GAAP net loss for the first quarter of 2009 of US$193.8 million compared with a US$617.7 million net profit a year earlier. The report relates the company said revenue decreased 45% to US$1.29 billion, operating profit declined to US$99.1 million from US$776.4 million a year ago and gross profit to US$322.3 million from US$1.04 billion. According to the report, EBITDA (earnings before interest, taxes, depreciation and amortization) fell 77% in the reporting period to US$196.7 million. "We do not expect any significant improvement in the overall steel market in Q2 2009. We believe that price stabilization and the revival of demand may start in H2 2009 when the efforts taken to support the financial sector and stimulate the world economy lead to an increase in fixed asset investment and production growth," the report quoted Novolipetsk Steel as saying in a statement. Headquartered in Lipetsk, Russia, Novolipetskiy metallurgicheskiy kombinat OAO (NLMK OAO or Novolipetsk Steel OJSC) -- http://www.nlmksteel.com-- is a vertically integrated steel producer. The Company's principal activity is the production and sale of ferrous metals, primarily consisting of pig iron, steel slabs, hot rolled steel, cold rolled steel, galvanized cold rolled sheet, cold rolled sheet with polymeric coatings and electro technical steel. The Company's operations are structured in the following segments: spanning mining, steelmaking and rolling. NLMK OAO has 24 subsidiaries, of which 19 are wholly owned, and one affiliated company. The Company trades its products domestically as well as exports them to 70 countries worldwide. * * * Novolipetsk Steel OJSC continues to carry a 'Ba1' long-term corporate family rating from Moody's Investors Service with negative outlook. NLMK still carries a 'BB+' long-term issuer default rating and a 'B' short-term issuer default rating from Fitch Ratings with stable outlook. RUSSIAN CORPORATION: S&P Assigns 'BB+' Long-Term Issuer Rating -------------------------------------------------------------- Standard & Poor's Ratings Services said that it had assigned its 'BB+' long-term and 'B' short-term issuer credit ratings and 'ruAA+' Russia national scale rating to the Russian Corporation of Nanotechnologies, a state investment institution established by the government of the Russian Federation (foreign currency BBB/Negative/A-3; local currency BBB+/Negative/A-2; Russia national scale 'ruAAA') in the special form of a state corporation. The outlook is negative. S&P uses its government-related entities criteria in rating RusNano. "We have applied a top-down approach in assessing RusNano, reflecting the strong likelihood that the corporation would receive timely extraordinary support from the state in case of financial distress," said Standard & Poor's credit analyst Boris Kopeykin. "The ratings on RusNano are therefore higher than its stand-alone credit quality, which S&P assess as being in the 'B' category, not taking into account such government support." The three-notch differential between the long-term rating on RusNano and the local currency long-term rating on the sovereign reflects the government's negative intervention in its withdrawal of part of the corporation's capital in 2009 and the absence of mechanisms to ensure timely state support to the corporation. The three-notch difference also reflects uncertainty regarding the form that the financial relationship with the state will take in the medium to long term. The government created RusNano to support state policy in the area of nanotechnologies. The corporation is supposed to invest in projects that apply nanotechnologies and promote such investments in the market. The government provided the corporation with Russian ruble 130 billion (more than US$5 billion at the moment of injection; US$4.1 billion at the current exchange rate) in capital in early 2008. However, due to the budgetary pressures in 2009, the government has decided to withdraw RUR85 billion at the end of 2009 to improve the federal budget's balance. Despite the withdrawal, RusNano has sufficient capital and liquidity to implement its ambitious investment program in 2009 and the first quarter of 2010. According to information from RusNano, after the transfer of RUR85 billion back to the state and the implementation of planned investments in 2009, the corporation's cash position will deteriorate to budgeted RUR13 billion, and could be insufficient to cover the corporation's financing commitments for 2010. The negative outlook on RusNano mirrors that on the Russian Federation. The rating on RusNano is likely to follow any rating actions on the sovereign in the immediate future. Should the government reaffirm and demonstrate strong ongoing support to the corporation, and/or the availability of extraordinary support to the corporation in case of emergency, S&P might decrease the notching down from the sovereign rating and might raise the rating on RusNano. "In contrast, signs of weakening ongoing and/or extraordinary support might result in increased notching, and a consequent downgrade of RusNano," said Mr. Kopeykin. S&P will be particularly taking into account the amount and timeliness of budget injections, which S&P expects to be the key support of the corporation's liquidity position over the next several years. SIBIRSKAYA CONSTRUCTION: Creditors Must File Claims by June 15 -------------------------------------------------------------- The Arbitration Court of Omsk commenced bankruptcy proceedings against LLC Sibirskaya Construction Company (TIN 5509005113) after finding the company insolvent. The case is docketed under Case No. ?46–1836/2009. Creditors have until June 15, 2009, to submit proofs of claims to: N. Utochenko Insolvency Manager Apt. 136 Prospect Mira 106a Omsk-89 Russia The Debtor can be reached at: LLC Sibirskaya Construction Company Tarskaya Str. 13 Omsk Russia STROY-PLAST LLC: Creditors Must File Claims by July 15 ------------------------------------------------------ The Arbitration Court of Omskaya commenced bankruptcy proceedings against LLC Stroy-Plast (TIN 5526004800, PSRN 1045549001717) (Glass Manufacturing) after finding the company insolvent. The case is docketed under Case No. ?46–7176/2009. Creditors have until July 15, 2009, to submit proofs of claims to: V. Ratkovskiy Insolvency Manager K. Libknekhta Str. 35 644043 Omsk Russia The Debtor can be reached at: LLC Stroy-Plast Chapaeva Str. 74 Pobochino Odesskiy 646871 Omskaya Russia WESTERN-URALSK LLC: Creditors Must File Claims by July 15 --------------------------------------------------------- The Arbitration Court of Permskiy commenced bankruptcy proceedings against LLC Western-Uralsk Machine-Building Concern (TIN 5908019492, PSRN 1025901610206) after finding the company insolvent. The case is docketed under Case No. ?50–15850/2008. Creditors have until July 15, 2009, to submit proofs of claims to: A. Avilov Insolvency Manager Office 313 Suvorova Str. 111a 440000 Penza Russia The Debtor can be reached at: LLC Western-Uralsk Machine-Building Concern Lipatova Str. 30 Perm 614113 Permskiy Russia ========= S P A I N ========= IM PRESTAMOS: Moody's Reviews 'Ba2' Rating on Class A-3 Notes ------------------------------------------------------------- Moody's Investors Service has placed on review for possible downgrade its ratings of three classes of notes issued by IM Prestamos Fondos Cedulas, FTA. The rating of the liquidity facility related to this transaction was also placed on review for possible downgrade. The transaction is a static cash CBO of a pool of EUR-denominated subordinated loans granted by 13 Spanish financial institutions to 14 Fondos de Titulizacion de Activos backed by Cedulas Hipotecarias issued by several Spanish credit institutions. Cedulas are covered bonds issued by Spanish financial institutions. The transaction is scheduled to mature upon full amortisation of the underlying Cedulas or on the legal final maturity in 2022 at the latest. The rating actions reflect the recent changes affecting the public ratings of Spanish financial institutions and Cedulas. Moody's announced on May 19, 2009 that it had placed 36 Spanish financial institutions on review for possible downgrade and on May 20, 2009, that it had placed Spanish covered bond ratings on review for possible downgrade. 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 (March 2009) -- Moody's updates key assumptions for rating corporate synthetic CDOs (January 2009) -- Framework for De-Linking Hedge Counterparty Risks from Global Structured Finance Cashflow Transactions (May 2007) -- European Structured Covered Bonds: Moody's Rating Approach, April 2003(SF21457) The rating actions are: IM Prestamos Fondos Cedulas, FTA -- EUR40 Million Liquidity Facility, Aaa and placed under review for possible downgrade; previously on October 11, 2007, assigned Aaa -- EUR344.1 Million Class A due 2022, Aaa and placed under review for possible downgrade; previously on October 11, 2007, assigned Aaa -- EUR6.9 Million Class B due 2022, Baa2 and placed under review for possible downgrade; previously on October 11, 2007, assigned Baa2 -- EUR0.9 Million Class A-3 due 2022, Ba2 and placed under review for possible downgrade; previously on October 11, 2007, assigned Ba2 TESORERIA I: Moody's Cuts Ratings on Two Classes of Notes to Low-B ------------------------------------------------------------------ Moody's Investors Service has downgraded its ratings of three classes of notes issued by AyT Bonos Tesoreria I, FTA and three classes of notes issued by AyT Bonos Tesoreria II, FTA, and left all six classes on review for possible further downgrade. The transactions are static cash CBOs of pools of EUR-denominated bonds issued by Spanish savings banks, scheduled to mature in April 2010 and Feb 2013 respectively. The rating actions reflect the deterioration in the credit quality of the underlying pools as indicated by the negative rating actions on the issuers and the negative outlook on the Spanish banking sector in general. Moody's announced on May 19, 2009, that it had placed 36 Spanish banks on review for possible downgrade ("Moody's reviews Spanish bank ratings"). The rating actions are also a result of the revision of certain key assumptions that the agency uses to rate and monitor corporate CDOs. Specifically, the changes include: (1) a 30% increase in the assumed likelihood of default for corporate credits in CDOs (2) a one notch rating stress on the pools' underlying securities pursuant to Moody's recently announced review of the Spanish banking sector and (3) a 10% stress to the the standard pair wise asset correlation applied to the entities in these heavily concentrated portfolios. The ratings of the six classes of notes remain on review pending completion of the review of Spanish banks ratings. Moody's initially analyzed and continues to monitor these transactions using primarily the methodology and its supplements for corporate synthetic CDOs as described in Moody's Special Reports and press releases below: -- Moody's Approach To Rating Corporate Collateralized Synthetic Obligations (April 2009) -- Moody's updates key assumptions for rating corporate synthetic CDOs (January 2009) -- Framework for De-Linking Hedge Counterparty Risks from Global Structured Finance Cashflow Transactions (May 2007) The rating actions are: AyT Bonos Tesoreria I, FTA -- EUR935,100,000 Class A Notes, Downgraded to A2 and placed under review for possible downgrade; previously on April 4, 2005 assigned Aaa -- EUR151,600,000 Class B Notes, Downgraded to Ba1 and placed under review for possible downgrade; previously on April 4, 2005 assigned A2 -- EUR93,300,000 Class C Notes, Downgraded to Ba3 and placed under review for possible downgrade; previously on April 4, 2005 assigned Baa3 AyT Bonos Tesoreria II, FTA -- EUR967,200,046.56 (at closing EUR1,167,200,000) Class A Notes, Downgraded to Aa2 and placed under review for possible downgrade; previously on February 16, 2006, assigned Aaa -- EUR210,300,000 Class B Notes, Downgraded to Baa1 and placed under review for possible downgrade; previously on February 16, 2006, assigned A2 -- EUR72,500,000 Class C Notes, Downgraded to Ba1 and placed under review for possible downgrade; previously on February 16, 2006, assigned Baa3 TESORERIA II: Moody's Lowers Rating on Class C Notes to 'Ba1' ------------------------------------------------------------- Moody's Investors Service has downgraded its ratings of three classes of notes issued by AyT Bonos Tesoreria I, FTA and three classes of notes issued by AyT Bonos Tesoreria II, FTA, and left all six classes on review for possible further downgrade. The transactions are static cash CBOs of pools of EUR-denominated bonds issued by Spanish savings banks, scheduled to mature in April 2010 and Feb 2013 respectively. The rating actions reflect the deterioration in the credit quality of the underlying pools as indicated by the negative rating actions on the issuers and the negative outlook on the Spanish banking sector in general. Moody's announced on May 19, 2009, that it had placed 36 Spanish banks on review for possible downgrade ("Moody's reviews Spanish bank ratings"). The rating actions are also a result of the revision of certain key assumptions that the agency uses to rate and monitor corporate CDOs. Specifically, the changes include: (1) a 30% increase in the assumed likelihood of default for corporate credits in CDOs (2) a one notch rating stress on the pools' underlying securities pursuant to Moody's recently announced review of the Spanish banking sector and (3) a 10% stress to the the standard pair wise asset correlation applied to the entities in these heavily concentrated portfolios. The ratings of the six classes of notes remain on review pending completion of the review of Spanish banks ratings. Moody's initially analyzed and continues to monitor these transactions using primarily the methodology and its supplements for corporate synthetic CDOs as described in Moody's Special Reports and press releases below: -- Moody's Approach To Rating Corporate Collateralized Synthetic Obligations (April 2009) -- Moody's updates key assumptions for rating corporate synthetic CDOs (January 2009) -- Framework for De-Linking Hedge Counterparty Risks from Global Structured Finance Cashflow Transactions (May 2007) The rating actions are: AyT Bonos Tesoreria I, FTA -- EUR935,100,000 Class A Notes, Downgraded to A2 and placed under review for possible downgrade; previously on April 4, 2005 assigned Aaa -- EUR151,600,000 Class B Notes, Downgraded to Ba1 and placed under review for possible downgrade; previously on April 4, 2005 assigned A2 -- EUR93,300,000 Class C Notes, Downgraded to Ba3 and placed under review for possible downgrade; previously on April 4, 2005 assigned Baa3 AyT Bonos Tesoreria II, FTA -- EUR967,200,046.56 (at closing EUR1,167,200,000) Class A Notes, Downgraded to Aa2 and placed under review for possible downgrade; previously on February 16, 2006, assigned Aaa -- EUR210,300,000 Class B Notes, Downgraded to Baa1 and placed under review for possible downgrade; previously on February 16, 2006, assigned A2 -- EUR72,500,000 Class C Notes, Downgraded to Ba1 and placed under review for possible downgrade; previously on February 16, 2006, assigned Baa3 ===================== S W I T Z E R L A N D ===================== DRUCKEREI MARCH: Claims Filing Deadline is June 30 -------------------------------------------------- Creditors of Druckerei March AG are requested to file their proofs of claim by June 30, 2009, to: Peter Grueter Liquidator Oberdorfstrasse 8 8853 Lachen Switzerland The company is currently undergoing liquidation in Lachen SZ. The decision about liquidation was accepted at an extraordinary general meeting held on March 16, 2009. INTERNATIONAL MUSIC: Creditors Must File Claims by June 25 ---------------------------------------------------------- Creditors of International Music Scout AG are requested to file their proofs of claim by June 25, 2009, to: International Music Scout AG Kirchstrasse 53 8807 Freienbach Switzerland The company is currently undergoing liquidation in Freienbach. The decision about liquidation was accepted at a general meeting held on Feb. 19, 2009. OLINES MEDITERRAN: Claims Filing Deadline is June 25 ---------------------------------------------------- Creditors of Olines mediterran GmbH are requested to file their proofs of claim by June 25, 2009, to: Olines mediterran GmbH Romanshornerstrasse 62 9320 Arbon Switzerland The company is currently undergoing liquidation in Arbon. The decision about liquidation was accepted at a shareholders' meeting held on April 15, 2009. SCHWIZERLAND HANDEL: Creditors Must File Claims by June 25 ---------------------------------------------------------- Creditors of Schwizerland Handel GmbH are requested to file their proofs of claim by June 25, 2009 to: Schwizerland Handel GmbH Baselstrasse 66 4500 Solothurn Switzerland The company is currently undergoing liquidation in Solothurn. The decision about liquidation was accepted at a shareholders' meeting held on Oct. 29, 2008. TRUFIELD HOLDING: Claims Filing Deadline is June 30 --------------------------------------------------- Creditors of Trufield Holding AG are requested to file their proofs of claim by June 30, 2009, to: Dr. Heiner Bernold Bahnhofstrasse 7 Mail Box 715 6301 Zug Switzerland The company is currently undergoing liquidation in Zug. The decision about liquidation was accepted at an extraordinary general meeting held on April 2, 2009. * SWITZERLAND: Slips Into Recession ----------------------------------- BBC News reports that Switzerland has slipped into a recession. According to the report, official figures showed that the country's economy shrank by 0.8% in the first three months of 2009. The report relates the decline came after a contraction of 0.3% in the last quarter of 2008. ============= U K R A I N E ============= AGRICULTURAL LLC: Creditors Must File Claims by June 12 ------------------------------------------------------- Creditors of Agricultural LLC Machinery and Tractor Station (code EDRPOU 14194858) have until June 12, 2009, to submit proofs of claim to: V. Bilan Insolvency Manager Office 101 Lazarev Str. 6 18000 Cherkassy Ukraine The Economic Court of Cherkassy commenced bankruptcy proceedings against the company on April 27, 2009. The Court is located at: The Economic Court of Cherkassy Shevchenko Boulevard 307 18004 Cherkassy Ukraine The Debtor can be reached at: Agricultural LLC Machinery and Tractor Station Zherebtsov Str. 7 Tsibulov Monastirischensky 19114 Cherkassy Ukraine EVROTECH LLC: Creditors Must File Claims by June 12 --------------------------------------------------- Creditors of LLC Science and Production Enterprise Evrotech (code EDRPOU 32244278) have until June 12, 2009, to submit proofs of claim to: I. Gusar Insolvency Manager Post Office Box 29 01030 Kiev Ukraine The Economic Court of Kiev commenced bankruptcy proceedings against the company on April 28, 2009. The case is docketed under Case No. 15/256-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 Science and Production Enterprise Evrotech Office 1 Krasnoarmeyskaya str. 68 03150 Kiev Ukraine FOOD ALLIANCE: Court Starts Bankruptcy Supervision Procedure ------------------------------------------------------------ The Economic Court of AR Krym commenced bankruptcy supervision procedure on LLC Food Alliance (code EDRPOU 32013094). The Insolvency Manager is: V. Kosovsky Office 7 Voyenny Avenue 6 73000 Herson Ukraine The Court is located at: The Economic Court of AR Krym R. Luxembourg/Rechnaya Str. 29/11 95003 Simferopol Ukraine The Debtor can be reached at: LLC Food Alliance Lenin Str. 38 Tchaplinka Herson Ukraine IMEXBANK JSCB: Bank Default Cues Moody's to Junk Deposit Ratings ---------------------------------------------------------------- Moody's Investors Service has downgraded Imexbank's long-term local and foreign currency deposit ratings to Caa2 from B3. In addition, Imexbank's bank financial strength rating was downgraded to E from E+ and its National Scale Rating to B3.ua from Baa3.ua. All ratings carry a stable outlook. The downgrade of Imexbank's ratings is driven by the bank's default on honouring the put option on Series-A local currency bonds. The total amount of bonds outstanding under Series-A and Series-B is UAH45 million (US$5.8 million). Moody's notes that as of the date of this rating action, Imexbank made an offer to restructure the obligations with those bondholders who intended to execute the put option. The bank is negotiating prolongation of all claims at least for three months, while the restructuring terms do not envisage any increase in the interest rates. However, the bank has Series-B local bonds outstanding which also have a put-option due in November 2009 and Moody's believes there is a high probability that respective claims will be restructured. These considerations and Moody's expectations regarding the level of possible losses to the bank's creditors are captured in the Caa2 rating currently assigned to the bank. "This default was mainly the result of the recent weakening of the bank's liquidity position caused by the deposit outflow experienced by Imexbank, in common with many other Ukrainian banks. As such, the bank became more dependent on funding from National Bank of Ukraine -- the country regulator and liquidity support provider to the system. Under the terms of deposits placed by the NBU, the central bank recommends that Imexbank pays all obligations only on final contractual maturities in order to avoid any privileged transactions with insiders. As such, the bank treated the put option as early repayment of debt and decided against redeeming the local bonds," said Elena Redko, a Moscow- based Moody's Analyst and the lead analyst for Imexbank. Due to the lack of information from Imexbank, Moody's is unable to comment on the current level of the bank's liquidity position and therefore is unable to accurately assess the further impact of breaching NBU's recommendations on the bank's liquidity and creditworthiness. The previous rating action on Imexbank was on December 30, 2008, when Moody's changed the rating outlook to negative from stable on the long-term global local currency or foreign currency deposit or debt ratings of 19 Ukrainian banks, including Imexbank, reflecting the substantial increase in credit and liquidity risk for the country's banks arising from the steep depreciation of the Ukrainian hryvnia. Headquartered in Odessa, Ukraine, Imexbank reported unaudited total assets of UAH6.2 billion (US$805 billion) and net profit of UAH62 million (US$8 million) as at December 31, 2008 in accordance with Ukrainian Accounting Standards. MOUNTER-538 LLC: Court Starts Bankruptcy Supervision Procedure --------------------------------------------------------- The Economic Court of Chernigov commenced bankruptcy supervision procedure on LLC Mounter-538 (code EDRPOU 335858845). The Insolvency Manager is: A. Ageyev Office 3 Komsomolskaya Str. 55 14000 Chernigov Ukraine The Court is located at: The Economic Court of Chernigov Mir Avenue 20 14000 Chernigov Ukraine The Debtor can be reached at: LLC Mounter-538 Industrialnaya Str. 11 14011 Chernigov Ukraine MOUNTER-538 OJSC: Court Starts Bankruptcy Supervision Procedure --------------------------------------------------------------- The Economic Court of Chernigov commenced bankruptcy supervision procedure on OJSC Mounter-538 (code EDRPOU 01361523). The Insolvency Manager is: I. Ptchelintseva Office 48 Schors Str. 10 14000 Chernigov Ukraine The Court is located at: The Economic Court of Chernigov Mir Avenue 20 14000 Chernigov Ukraine The Debtor can be reached at: OJSC Mounter-538 Industrialnaya Str. 11 14011 Chernigov Ukraine PRAVEX BANK: Moody's Withdraws 'E+' Bank Financial Strength Rating ------------------------------------------------------------------ Moody's Investors Service has withdrawn these ratings of Pravex Bank: Bank Financial Strength Rating of E+, global local currency deposit and debt ratings of Ba2/Not Prime, global foreign currency deposit ratings of B3/Not Prime as well as the national scale rating of Aa1.ua. The ratings have been withdrawn for business reasons following the official request from PB. The rating agency notes that Pravex-Bank's Ba2 local currency deposit and debt ratings carry a stable outlook, while the outlook for the bank's B3 foreign currency deposit rating is negative in line with the outlook for the foreign currency deposit ceiling for Ukraine. The previous rating action on Pravex-Bank was on May 12, 2009, when Moody's downgraded the bank's long-term foreign currency deposit rating to B3 from B2. Headquartered in Kyiv, Ukraine, Pravex-Bank reported total IFRS consolidated assets and net income of US$1.15 billion and US$4.96 million, respectively, as of year-end 2007. =========================== U N I T E D K I N G D O M =========================== AEOLUS CDO: S&P Junks Ratings on Class E Colonnade II & III Notes ----------------------------------------------------------------- Standard & Poor's Ratings Services took various rating actions on notes issued by Aeolus CDO Ltd. Specifically, S&P has: -- lowered and placed on CreditWatch negative its ratings on the class C, D, and E notes issued by Aeolus CDO ( Colonnade II) and all the notes issued by Aeolus CDO ( Colonnade III); and -- placed on CreditWatch negative its ratings on the class A to E notes issued by Aeolus CDO ( Colonnade I) and the class A and B notes issued by Colonnade II. All three transactions are European collateralized debt obligations of hybrid mezzanine structured finance obligations. The rating actions reflect S&P's assessment of the credit deterioration of the assets in the transactions' underlying portfolios, mainly due to their exposure to European structured finance securities. For Colonnade II and III, the credit migration has been significant and has led to a pronounced increase in the scenario default rates. As a result, the existing ratings on the Colonnade II class C, D, and E notes and all the Colonnade III notes are, in S&P's opinion, no longer consistent with the available credit enhancement and S&P has therefore lowered S&P's ratings on these notes. Based on the data from the last trustee reports available to us, Colonnade III's class E and Colonnade II's class C, D, and E coverage tests are currently failing their respective trigger levels under the transaction documentation. Following S&P's assessment of the deterioration in the credit quality of the underlying assets in the portfolios, the deterioration in the portfolio coverage tests, and the proportion of assets currently on CreditWatch negative in the portfolios, S&P has placed all the notes in these three transactions on CreditWatch negative. S&P will closely monitor the transactions' performance and will resolve the outstanding CreditWatch placements in due course. Ratings List Ratings Placed on Creditwatch Negative Aeolus CDO Ltd. EUR126 Million Secured Credit-Linked Floating-Rate Notes (Colonnade I) Rating ------ Class To From ----- -- ---- A AAA/Watch Neg AAA B AA/Watch Neg AA C A/Watch Neg A D BBB-/Watch Neg BBB- E BB-/Watch Neg BB- Aeolus CDO Ltd. GBP89 Million Secured Credit-Linked Floating-Rate Notes (Colonnade II) Rating ------ Class To From ----- -- ---- A AAA/Watch Neg AAA B AA/Watch Neg AA Ratings Lowered And Placed On Creditwatch Negative Aeolus CDO Ltd. GBP89 Million Secured Credit-Linked Floating-Rate Notes (Colonnade II) Rating ------ Class To From ----- -- ---- C BBB+/Watch Neg A D BB-/Watch Neg BBB- E CCC+/Watch Neg BB- Aeolus CDO Ltd. EUR165 Million Secured Credit-Linked Floating-Rate Notes (Colonnade III) Rating ------ Class To From ----- -- ---- A AA+/Watch Neg AAA B A+/Watch Neg AA C BBB+/Watch Neg A D BB/Watch Neg BBB- E CCC+/Watch Neg BB- W BB/Watch Neg BBB- BRADFORD & BINGLEY: Loan Losses Could Hit GBP700 Mln This Year -------------------------------------------------------------- Patrick Hosking at The Times reports that Bradford & Bingley plc is expected to make loan losses of between GBP600 million and GBP700 million this year as more borrowers default on mortgages. Richard Pym, B&B's chairman, told The Times that the proportion of borrowers more than three months behind on their repayments had worsened since March, when B&B reported an arrears rate of 4.6 per cent, itself double the 2007 figure. "It's now above 5 per cent," The Times quoted Mr. Pym as saying, "and it will continue to deteriorate for the remainder of the year." The Times discloses B&B, which has borrowed more than GBP20 billion from the British government so far, is set to borrow billions more because its wholesale loans from the private sector are maturing much faster than its mortgages are being paid back, creating a widening working capital shortfall. According to The Times, B&B expects to redeem only about GBP2 billion of mortgages a year over the next three years, while as much as GBP10 billion of its wholesale borrowing comes due this year alone. The Times says the government has pledged to provide the necessary additional working capital, on top of GBP18 billion in direct loans and other loans channeled through the Financial Services Compensation Scheme (FSCS). B&B pays no interest on the bulk of its borrowings from the government and the FSCS, The Times states. The Times recalls the bank was taken into public ownership last September and its savings business and branches sold to Santander Group, of Spain. Mr. Pym is in charge of winding down the business, which has 300,000 borrowers and outstanding mortgages of GBP41 billion, The Times notes. Deferral of Interest Payment On May 29, 2009, the Troubled Company Reporter-Europe, citing Telegraph.co.uk, reported that B&B said it would not pay the interest due on GBP325 million of subordinated bonds. Telegraph.co.uk related the bank said it would not make interest payments on GBP150 million of floating rate subordinated notes due on June 30, GBP125 million of 6.625pc notes due on June 16, and GBP50 million of 11.625pc bonds due on July 20. B&B, Telegraph.co.uk disclosed, is able to skip the payments after the Treasury changed the rules in February allowing the nationalized bank to make such deferrals on so-called lower Tier 2 debt to protect the taxpayers. Telegraph.co.uk noted there is no certainty over when, or indeed if, B&B will make the missed payments. It was also unclear whether the decision by B&B to defer those payments would constitute a default on credit default swaps, Telegraph.co.uk stated. About Bradford & Bingley Headquartered in Bingley, United Kingdom, Bradford & Bingley plc -- http://www.bbg.co.uk/-- offers residential mortgages, and focus on a range of areas providing mortgages for individuals. It focuses on its savings business and provides a range of savings products through 197 branches and network of 140 third- party branch-type agents, by phone, post and Online. KW LINFOOT: Peel Drafts Insolvency Expert to Conduct Investigation ------------------------------------------------------------------ Debbie Leigh at Yorkshire Evening Post reports that Peel Holding, the largest creditor of Leeds-based property group KW Linfoot, drafted an insolvency expert to probe into the company's activities. The report recalls KW Linfoot went into administration in February. It owed GBP3 million to secured creditors including around GBP800,000 to founder Kevin Linfoot and GBP3.9 million to unsecured creditors, the report discloses. The report states unsecured loans from Mr. Linfoot to the group totaled GBP3.1 million. According to the report, property firm Peel, which is owed GBP7.7 million from a land deal in Salford, drafted in Manchester insolvency expert Paul Stanley, a partner at Begbies Traynor, to work as joint liquidator with current administrator Gary Blackburn of Leeds-based BWC Business Solutions. Peel, the report relates, also appointed receivers under the Law of Property Act to take control of land in Salford Quays, Manchester, where KW Linfoot was planning to build 1,000 apartments with London group Yoo Holdings through joint venture Manyoo. "We offered Peel, as our largest creditor, chance to put one of their guys in to look at the books and activities of the business, which we are happy to do because we have got nothing to hide," the report quoted Richard Dean, a director of KW Linfoot, as saying. Mr. Dean stressed the probe was simply standard procedure, the report notes. LDV: Lack of Funds Prompts Administration Request ------------------------------------------------- Graham Ruddick at Telegraph.co.uk reports that LDV has reapplied to enter administration, putting more than 6,000 jobs at risk. LDV, as cited by BreakingNews.ie, said: "The directors of LDV Group have been forced to reapply for administration to protect the assets of the business. This is due to the fact that essential funds required to maintain the business and workforce as a going concern are not being made available." According to Telegraph.co.uk, potential buyer Weststar has been unable to secure financing for a deal. It is thought to have failed to gain the backing of three Malaysian investors, Telegraph.co.uk states. "We have explored all known avenues to access this funding, including assistance from the UK Government, but without this in place, it will not be possible to deliver the plan to secure jobs in the UK," Telegraph.co.uk quoted Weststar as saying in a statement. Telegraph.co.uk recalls last month Malaysia's Westar agreed a preliminary deal to resue the company, which employs 850 staff directly. The agreement to buy LDV was subject to due diligence, financing and various approvals, BreakingNew.ie discloses. Telegraph.co.uk recounts in order to support LDV while negotiations were completed, the British government provided a GBP5 million bridging loan to Weststar. However, Weststar, having already used GBP1.4 million to pay workers and prepare for manufacturing, is not prepared to release more, Telegraph.co.uk relates. The government may now seek the return on the loan, Telegraph.co.uk says. Tim Webb at guardian.co.uk reports that this week Weststar made a desperate appeal to the government for GBP45 million to keep the LDV going, but officials are not willing to risk further taxpayers' money. guardian.co.uk says sources close to LDV admitted the chances of finding alternative investment were bleak. It is understood that due diligence on LDV showed the sales outlook for the company was worse than Weststar had been expecting, guardian.co.uk notes. Based in Birmingham, LDV -- http://www.ldv.com/-- designs, manufactures and distributes the MAXUS range of light commercial vehicles. Originally formed in 1993 as Leyland DAF Vans Ltd, it later changed its name to LDV Group Ltd and is now under Gaz Group ownership since July 2006. LDV has an annual turnover of GBP160 million and exports vehicles to Europe, the Middle East and to the Asian Pacific Rim. The Group also includes Birmingham Pressings, a stamping business producing body panels and subassemblies for LDV and external customers. LLOYDS BANKING: UKFI Says to Fully Support Board ------------------------------------------------ BreakingNews.ie reports that the UK Financial Investments, which looks after the government's 43.4% shareholding in Lloyds Banking Group plc, said it would vote in favor of all resolutions put to investors at tomorrow's meeting in Glasgow. John Kingman, chief executive of UKFI, as cited by BreakingNews.ie, said: "UKFI has made it clear that we fully support the Lloyds board, strategy and executive team led by Eric Daniels." The Scotsman's Erikka Askeland reports that the resolutions shareholders will vote on tomorrow include the re-appointment of chairman Sir Victor Blank, who plans to step down next summer, and the group's remuneration report. BreakingNews.ie notes tomorrow's meeting will also see shareholders asked to vote on the company's plans to raise GBP4 billion (EUR4.6 billion) through a share placing to convert the preference shares owned by the government into ordinary shares. Protest According to the Scotsman, small shareholders are expected to vote against Mr. Blank's reappointment and the remuneration report. The Scotsman discloses the UK Shareholders Association (UKSA) is also campaigning for the bank's 2.8 million small shareholders to vote against the re-election of Archie Kane, the board member responsible for Scotland, and Lord Leitch, the deputy chairman. Both were on the Lloyds board when it decided to take over HBOS, the Scotsman notes. Douglas Fraser at BBC News reports that institutional investment advisory firm Pirc has advised the board of Lloyds to put itself up for re-election, to test shareholder support for how it handled the HBOS takeover. BBC News relates Pirc said on Tuesday it had concerns over Mr. Blank's competency in the wake of the HBOS deal, which was seen as having gone through without the proper due diligence. Pirc, BBC News discloses, has advised voters to abstain from voting for the bank's remuneration report. Legal Advice Peter Ranscombe at The Scotsman reports that the UKSA plans to raise funds to sue Lloyds TSB over last year's HBOS takeover. The Scotsman says the UKSA will write to 1.5 million former HBOS shareholders to raise money for further legal advice. Roger Lawson, the UKSA's spokesman, as cited by the Scotsman, said the association had already received informal legal advice and now wanted to take more detailed advice. "We plan to raise funds from shareholders to try to progress these issues," the Scotsman quoted Mr. Lawson as saying. "One issue is the Lloyds TSB directors seem to have paid significant attention to the wishes of the UK government and the interests of HBOS shareholders." The Scotsman relates Mr. Lawson said the UKSA was also putting pressure on the government to make plain how it intended to put the banks back into private ownership. "We'd like to see proposals as to how the government can withdraw from this business. In our view, that would allow shareholders to recoup their lost value more rapidly," the Scotsman quoted Mr. Lawson as saying. "As long as the government is bullying the company to do what it wants then it's not going to be operating in the interests of shareholders." 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. LLOYDS BANKING: Moody's Cuts Rating on Preference Shares to 'B3' ---------------------------------------------------------------- Moody's Investors Service has downgraded the hybrid instruments issued by the two large banking groups in the UK in which the government has shareholdings: Royal Bank of Scotland Group and Lloyds Banking Group. In addition, Lloyds TSB Bank plc's C+ BFSR has been placed on review for possible downgrade, reflecting the rating agency's concerns about a further weakening in the group's financial performance. There has been no change to the senior debt of either group (Aa3 for Royal Bank of Scotland plc, and Aa3 for Lloyds TSB Bank plc), or the Aaa government-guaranteed debt issued by the banks. Elisabeth Rudman, Senior Credit Officer at Moody's Investors Service, commented that "Moody's wider notching of the hybrid instruments from the banks' Baseline Credit Assessment, was prompted primarily by These two concerns: firstly, the fact that the banks are likely to remain loss-making in the near-to-medium term increases the possibility of coupons being missed. And secondly, Moody's assessment of the probability that EU approval for the support package received by these banks could be contingent upon the suspension of coupons on these instruments. This has been seen in other cases where state aid was approved by the EU, and Moody's considers this could apply to optional deferral as well as mandatory deferral triggers." Downgrade of Preference Shares and Junior Sub Debt of Rbs And Lloyds The instruments of These banks have been affected by this action: Royal Bank of Scotland plc: -- Non-cumulative (Tier 1) preference shares downgraded to B3 from Ba1 (the Ba2 rated National Westminster non-cumulative preference shares with voting rights downgraded to B3); stable outlook; -- Cumulative junior subordinated debt downgraded to Ba1 from Baa3; remains on review for further possible downgrade pending the completion of the review on the bank's C -- BFSR. Royal Bank of Scotland Group: -- Non-cumulative (Tier 1) preference shares downgraded to B3 from Ba2 and from Ba3 (for the instruments with voting rights); stable outlook; -- Cumulative (Tier 1) preference shares downgraded to Ba3 from Ba2; remain on review for downgrade pending the completion of the review on RBS plc's BFSR -- Cumulative junior subordinated debt downgraded to Ba1 from Baa3; remains on review for downgrade pending the completion of the review on RBS plc's BFSR. Lloyds TSB Bank: -- Non-cumulative (Tier 1) preferred securities downgraded to B3 from Baa1; stable outlook; -- Cumulative (Tier 1) preferred securities downgraded to Baa2 from Baa1; remain on review for possible downgrade pending the completion of the review on Lloyds's BFSR; -- Cumulative junior subordinated debt downgraded to Baa1 from A3; remains on review for downgrade pending the completion of the review on Lloyds's BFSR. Lloyds Banking Group: -- Non-cumulative (Tier 1) preference shares downgraded to B3 from Baa2; stable outlook; Bank of Scotland: -- Non-cumulative (Tier 1) preference shares downgraded to B3 from Baa2; stable outlook; -- Cumulative (Tier 1) preference shares remain at Baa2; remain on review for possible downgrade pending the completion of the review on Bank of Scotland's BFSR; -- Cumulative junior subordinated debt remains at Baa1; remains on review for downgrade pending the completion of the review on Bank of Scotland's BFSR. HBOS: -- Non-cumulative (Tier 1) preference shares downgraded to B3 from Baa2; stable outlook; -- Cumulative junior subordinated debt downgraded to Baa2 from Baa1; remains on review for downgrade pending completion of the review of Bank of Scotland's BFSR. Scottish Widows/Clerical Medical Finance: -- Subordinated debt rating of Scottish Widows plc (SW) downgraded to Baa1 from A3; remains on review for further possible downgrade pending completion of the review of Lloyd's BFSR; -- Subordinated debt ratings of Clerical Medical Finance plc (guaranteed by Clerical Investment Group Ltd) remain at Baa1; remains on review for further possible downgrade pending completion of the review of Bank of Scotland's BFSR. Rationale for the Preference Share and Junior Sub Debt Downgrades The B3 ratings of the non-cumulative preference shares is based on an expected-loss approach and reflects the rating agency's assumption of a high probability of the omission of coupons and high loss severity over a two-year period. The rating agency's assumption is that EU requirements could lead to the banks exercising their right for optional deferral on these instruments. The outlook for the securities is stable, as it deems a longer period of omission to be unlikely. Moody's has assigned the same rating to the securities of both the operating companies and the holding companies, as it deems the risk of omission to be similar. The cumulative preference shares (with cumulative deferral and non-cash settlement through ACSM), have been downgraded by 1 notch from their current rating (i.e. 3 notches below the adjusted BCA, which includes parental support where available). These securities have largely the same features as junior subordinated debt on a going concern basis, but have a preferred claim in liquidation. Under a going concern assumption, the expected loss for investors in these cumulative instruments should therefore be clearly lower than for the non-cumulative preference shares. However, given their categorization as Tier 1 instruments by the regulators Moody's are concerned that the risk of coupon deferral is higher than for junior subordinated debt. Moody's previously assigned a lower rating to the preference shares with voting rights due to the additional risk of loss to investors from nationalization. As the rating agency has stated before, the announcement by both banks of their participation in the UK government's Asset Protection Scheme and the planned issuance of B shares to the government, confirms Moody's core assumption that the UK government will try to avoid full nationalization of these banks, although this remains a low probability/high severity scenario. Given the downgrade of all non-cumulative preference shares at the banks to the low single-B level, and the fact that the Banking Act 2009 facilitates the absorption of losses by all capital instruments in a restructuring of a bank, the possibility of nationalization is also incorporated in the current ratings. Moody's downgrade of the junior subordinated debt instruments by one notch from their current rating (i.e. now 2 notches below the adjusted Baseline Credit Assessment) -- and therefore 1 notch lower than dated subordinated debt - reflects their junior priority of claim to dated subordinated debt and the optional deferral feature. Bank of Scotland plc's junior subordinated debt has remained at Baa1 (on review for downgrade) as the rating agency has aligned Bank of Scotland plc's debt ratings with those of Lloyds TSB Bank, given the progressing integration between the two banks. Following the decision to review for possible downgrade Lloyds TSB's BFSR, Lloyd TSB's A3 dated subordinated debt is now also on review for possible downgrade. In line with its approach to the rating of Bank of Scotland's junior subordinated debt ratings (see above), Moody's has also left Bank of Scotland plc's dated subordinated debt at Baa1 (on review for downgrade), and will align the rating with that of Lloyds TSB Bank plc. The rating actions on the subordinated debt of SW and CMF reflect the alignment of the insurance operations' subordinated ratings and outlooks to the subordinated ratings and outlooks of the corresponding banking operations within Lloyds. Moody's believes that Lloyds's capital base is increasingly managed centrally. The revised ratings and outlooks on the insurance subsidiaries therefore reflect Moody's view that the insurance subordinated ratings of SW and CMF are constrained by the ratings on the subordinated debt of the correspondent parent banking companies within Lloyds. Review for Possible Downgrade of Lloyds TSB BFSR The review for possible downgrade of Lloyds TSB Bank plc's C+ BFSR reflects the rating agency's concerns about a further weakening in the group's financial performance. The BFSR's downgrade to C+ from B+ in February 2009 incorporated the adverse effects on Lloyds of its acquisition of HBOS and Moody's expectation of a significantly higher level of provisions. However, the review will also take into consideration These: i) the period of time it could take Lloyds to return to profitability, given further deterioration in the UK economy, pressure on margins and restructuring costs; ii) the impact on profitability and capital of the performance of key asset classes, according to Moody's updated assumptions, including a peak-to-trough house price decline of 40% for its base scenario in the UK; iii) as is the case for Bank of Scotland, the review will take into account the benefit of the additional GBP15.6 billion capital for the group from government-owned B shares and the APS, which is expected to provide 90% insurance for GBP260 billion of assets after a first loss of GBP25 billion; and iv) in addition, the review will incorporate refinements to Moody's approach to rating banks in this environment as discussed in a Special Comment entitled "Calibrating Bank Ratings in the Context of the Global Financial Crisis", which was published in February 2009. Moody's explains that, although the BFSR framework remains unchanged, the weight attached to certain rating considerations, particularly capital and future earnings prospects, has been increased to better reflect the impact of the ongoing crisis. Moody's expects to complete the review within the next few weeks at the same time as completing the review of Bank of Scotland's BFSR. Previous Rating Actions and Methodologies Used In its last rating action from April 3, 2009, Moody's factored in the general lack of systemic support expected for hybrid securities in the UK, and changed the anchor rating from the banks' long-term debt and deposit ratings to the BCA in These rating actions: -- Royal Bank of Scotland: subordinated debt rating downgraded to Baa3 from A1, and hybrid debt to Ba1 from A2, except the National Westminster Ba1 rated non-cumulative preference shares with voting rights, which were downgraded to Ba2; -- Royal Bank of Scotland Group: subordinated debt rating downgraded to Ba1 from A2, and hybrid debt to Ba2 from A3, except the Ba2 rated non-cumulative preference shares with voting rights, which were downgraded to Ba3; -- Lloyds TSB Bank: subordinated debt rating downgraded to A3 from A1 (negative outlook), and hybrid debt to Baa1 from A2 (remains on review for possible downgrade); -- Lloyds Banking Group: subordinated debt rating downgraded to Baa1 from A2 (negative outlook), and hybrid debt to Baa2 from A3 (remains on review for possible downgrade); -- Bank of Scotland: subordinated debt rating downgraded to Baa1 from A1, and hybrid debt to Baa2 from A2; -- HBOS: subordinated debt rating downgraded to Baa1 from A2, and hybrid debt to Baa2 from A3. The last rating actions on the above insurance subordinated debt ratings were on April 7, 2009: -- Scottish Widows plc: subordinated debt to A3 from A2 -- Clerical Medical Finance plc: subordinated debt to Baa1 from A3 The last rating action on Lloyds TSB Bank plc's BFSR was on February 16, 2009, when it was downgraded to C+ (negative outlook) from B+ (on review for possible downgrade). All the banks are headquartered in the United Kingdom. Downgrades: Issuer: Bank of Scotland Capital Funding L.P. -- Preferred Stock Preferred Stock, Downgraded to B3 from Baa2 Issuer: Bank of Scotland plc -- Junior Subordinated Regular Bond/Debenture, Downgraded to Baa2 from Baa1 -- Preference Stock Preference Stock, Downgraded to B3 from Baa2 Issuer: HBOS CAPITAL FUNDING NO. 3 L.P. -- Preferred Stock Preferred Stock, Downgraded to B3 from Baa2 Issuer: HBOS Capital Funding No. 1 L.P. -- Preferred Stock Preferred Stock, Downgraded to B3 from Baa2 Issuer: HBOS Capital Funding No. 4 L.P. -- Preferred Stock Preferred Stock, Downgraded to B3 from Baa2 Issuer: HBOS Group EURFinance (Jersey) -- Preferred Stock Preferred Stock, Downgraded to B3 from Baa2 Issuer: HBOS Group Sterling Finance L.P. -- Preferred Stock Preferred Stock, Downgraded to B3 from Baa2 Issuer: HBOS plc -- Junior Subordinated Regular Bond/Debenture, Downgraded to Baa2 from Baa1 -- Multiple Seniority Medium-Term Note Program, Downgraded to Baa2 from Baa1 Issuer: Halifax plc -- Junior Subordinated Regular Bond/Debenture, Downgraded to B3 from Baa1 Issuer: Leeds Permanent Building Society -- Junior Subordinated Regular Bond/Debenture, Downgraded to B3 from Baa1 Issuer: Lloyds Banking Group plc -- Preference Stock Preference Stock, Downgraded to B3 from Baa2 Issuer: Lloyds TSB Bank Plc -- Junior Subordinated Regular Bond/Debenture, Downgraded to a range of Baa2 to Baa1 from a range of Baa1 to A3 -- Multiple Seniority Medium-Term Note Program, Downgraded to Baa1 from A3 -- Preferred Stock Preferred Stock, Downgraded to Baa2 from Baa1 Issuer: Lloyds TSB Capital 1 L.P. -- Preferred Stock Preferred Stock, Downgraded to B3 from Baa1 Issuer: Lloyds TSB Capital 2 L.P. -- Preferred Stock Preferred Stock, Downgraded to B3 from Baa1 Issuer: National Westminster Bank PLC -- Junior Subordinated Conv./Exch. Bond/Debenture, Downgraded to Ba1 from Baa3 -- Junior Subordinated Regular Bond/Debenture, Downgraded to Ba1 from Baa3 -- Multiple Seniority Shelf, Downgraded to a range of (P)B3 to (P)Ba1 from a range of (P)Ba1 to (P)Baa3 -- Preference Stock Preference Stock, Downgraded to B3 from a range of Ba2 to Ba1 -- Subordinate Regular Bond/Debenture, Downgraded to Ba1 from Baa3 Issuer: RBS Capital Trust A -- Junior Subordinated Regular Bond/Debenture, Downgraded to B3 from Ba3 Issuer: RBS Capital Trust B -- Preferred Stock Preferred Stock, Downgraded to B3 from Ba3 Issuer: RBS Capital Trust C -- Preferred Stock Preferred Stock, Downgraded to B3 from Ba3 Issuer: RBS Capital Trust D -- Preferred Stock Preferred Stock, Downgraded to B3 from Ba3 Issuer: RBS Capital Trust I -- Preferred Stock Preferred Stock, Downgraded to B3 from Ba3 Issuer: RBS Capital Trust II -- Preferred Stock Preferred Stock, Downgraded to B3 from Ba3 Issuer: RBS Capital Trust III -- Preferred Stock Preferred Stock, Downgraded to B3 from Ba3 Issuer: RBS Capital Trust IV -- Preferred Stock Preferred Stock, Downgraded to B3 from Ba3 Issuer: Royal Bank of Scotland Group plc -- Junior Subordinated Regular Bond/Debenture, Downgraded to a range of Ba3 to Ba2 from a range of Ba2 to Ba1 -- Multiple Seniority Medium-Term Note Program, Downgraded to Ba2 from Ba1 -- Multiple Seniority Shelf, Downgraded to a range of (P)B3 to (P)Ba2 from a range of (P)Ba2 to (P)Ba1 -- Preference Stock Preference Stock, Downgraded to B3 from a range of Ba3 to Ba2 -- Preferred Stock Preferred Stock, Downgraded to a range of B3 to Ba3 from a range of Ba3 to Ba2 Issuer: Royal Bank of Scotland plc -- Junior Subordinated Regular Bond/Debenture, Downgraded to Ba1 from Baa3 -- Multiple Seniority Medium-Term Note Program, Downgraded to Ba1 from Baa3 -- Multiple Seniority Medium-Term Note Program, Downgraded to Ba1 from Baa3 Issuer: Scottish Widows plc -- Junior Subordinated Regular Bond/Debenture, Downgraded to Baa1 from A3 On Review for Possible Downgrade: Issuer: Cheltenham & Gloucester plc -- Bank Financial Strength Rating, Placed on Review for Possible Downgrade, currently C+ -- Multiple Seniority Medium-Term Note Program, Placed on Review for Possible Downgrade, currently A3 Issuer: Lloyds TSB Bank Plc -- Bank Financial Strength Rating, Placed on Review for Possible Downgrade, currently C+ -- Subordinate Regular Bond/Debenture, Placed on Review for Possible Downgrade, currently A3 Issuer: Royal Bank of Scotland Group plc -- Preference Stock Preference Stock, Placed on Review for Possible Downgrade, currently Ba3 Outlook Actions: Issuer: Cheltenham & Gloucester plc -- Outlook, Changed To Rating Under Review From Stable LUCITE INT'L: S&P Withdraws 'B' Long-Term Corporate Credit Rating ----------------------------------------------------------------- Standard & Poor's Ratings Services said that it withdrew its 'B' long-term corporate credit ratings on U.K.-based monomer producer and distributor Lucite International Group Holdings Ltd. at the company's request. This follows the completion on May 28, 2009, of the takeover by Mitsubishi Rayon Co. Ltd. in a US$1.6 billion cash offer, including the prepayment of Lucite's financial debt. At the time of the rating withdrawal, Lucite was on CreditWatch with positive implications, where it was placed on Nov. 12, 2008. In S&P's opinion, sufficient information will not be provided to evaluate the business profile, financial structure, and corporate structure of the combined entity to determine the extent of the upward potential of the rating, so the CreditWatch will not be resolved. PIERSE CONTRACTING: In Liquidation, Zolfo Cooper Appointed ---------------------------------------------------------- Sophie Griffiths at building.co.uk reports that Pierse Contracting Ltd has gone into liquidation. building.co.uk says the company was placed into liquidation following a meeting of creditors on June 1. The liquidation is being handled by administrator Zolfo Cooper, building.co.uk relates. building.co.uk discloses the company, which has total assets of about GBP40 million, generated a turnover of over GBP28 million in its accounts filed up to April 30, 2008. According to Simon Binns of Crain's Manchester Business, the company failed to pay its 60 staff in April and had been reported for slow payments to trade creditors on several occasions. Citing a report in The Sunday Business Post in Ireland, Crain's states that staff were given redundancy notices on May 11 and around GBP120,000 is still lowed in unpaid wages. Based in Cheshire, Pierse Contracting Ltd is a subsidiary of The Pierse Group -- http://www.pierse.ie/-- a property developer and building and civil engineering contractor operating in Ireland. ROYAL BANK: Moody's Cuts Rating on Tier 1 Preference Shares to B3 ----------------------------------------------------------------- Moody's Investors Service has downgraded the hybrid instruments issued by the two large banking groups in the UK in which the government has shareholdings: Royal Bank of Scotland Group and Lloyds Banking Group. In addition, Lloyds TSB Bank plc's C+ BFSR has been placed on review for possible downgrade, reflecting the rating agency's concerns about a further weakening in the group's financial performance. There has been no change to the senior debt of either group (Aa3 for Royal Bank of Scotland plc, and Aa3 for Lloyds TSB Bank plc), or the Aaa government-guaranteed debt issued by the banks. Elisabeth Rudman, Senior Credit Officer at Moody's Investors Service, commented that "Moody's wider notching of the hybrid instruments from the banks' Baseline Credit Assessment, was prompted primarily by These two concerns: firstly, the fact that the banks are likely to remain loss-making in the near-to-medium term increases the possibility of coupons being missed. And secondly, Moody's assessment of the probability that EU approval for the support package received by these banks could be contingent upon the suspension of coupons on these instruments. This has been seen in other cases where state aid was approved by the EU, and Moody's considers this could apply to optional deferral as well as mandatory deferral triggers." Downgrade of Preference Shares and Junior Sub Debt of Rbs And Lloyds The instruments of These banks have been affected by this action: Royal Bank of Scotland plc: -- Non-cumulative (Tier 1) preference shares downgraded to B3 from Ba1 (the Ba2 rated National Westminster non-cumulative preference shares with voting rights downgraded to B3); stable outlook; -- Cumulative junior subordinated debt downgraded to Ba1 from Baa3; remains on review for further possible downgrade pending the completion of the review on the bank's C -- BFSR. Royal Bank of Scotland Group: -- Non-cumulative (Tier 1) preference shares downgraded to B3 from Ba2 and from Ba3 (for the instruments with voting rights); stable outlook; -- Cumulative (Tier 1) preference shares downgraded to Ba3 from Ba2; remain on review for downgrade pending the completion of the review on RBS plc's BFSR -- Cumulative junior subordinated debt downgraded to Ba1 from Baa3; remains on review for downgrade pending the completion of the review on RBS plc's BFSR. Lloyds TSB Bank: -- Non-cumulative (Tier 1) preferred securities downgraded to B3 from Baa1; stable outlook; -- Cumulative (Tier 1) preferred securities downgraded to Baa2 from Baa1; remain on review for possible downgrade pending the completion of the review on Lloyds's BFSR; -- Cumulative junior subordinated debt downgraded to Baa1 from A3; remains on review for downgrade pending the completion of the review on Lloyds's BFSR. Lloyds Banking Group: -- Non-cumulative (Tier 1) preference shares downgraded to B3 from Baa2; stable outlook; Bank of Scotland: -- Non-cumulative (Tier 1) preference shares downgraded to B3 from Baa2; stable outlook; -- Cumulative (Tier 1) preference shares remain at Baa2; remain on review for possible downgrade pending the completion of the review on Bank of Scotland's BFSR; -- Cumulative junior subordinated debt remains at Baa1; remains on review for downgrade pending the completion of the review on Bank of Scotland's BFSR. HBOS: -- Non-cumulative (Tier 1) preference shares downgraded to B3 from Baa2; stable outlook; -- Cumulative junior subordinated debt downgraded to Baa2 from Baa1; remains on review for downgrade pending completion of the review of Bank of Scotland's BFSR. Scottish Widows/Clerical Medical Finance: -- Subordinated debt rating of Scottish Widows plc (SW) downgraded to Baa1 from A3; remains on review for further possible downgrade pending completion of the review of Lloyd's BFSR; -- Subordinated debt ratings of Clerical Medical Finance plc (guaranteed by Clerical Investment Group Ltd) remain at Baa1; remains on review for further possible downgrade pending completion of the review of Bank of Scotland's BFSR. Rationale for the Preference Share and Junior Sub Debt Downgrades The B3 ratings of the non-cumulative preference shares is based on an expected-loss approach and reflects the rating agency's assumption of a high probability of the omission of coupons and high loss severity over a two-year period. The rating agency's assumption is that EU requirements could lead to the banks exercising their right for optional deferral on these instruments. The outlook for the securities is stable, as it deems a longer period of omission to be unlikely. Moody's has assigned the same rating to the securities of both the operating companies and the holding companies, as it deems the risk of omission to be similar. The cumulative preference shares (with cumulative deferral and non-cash settlement through ACSM), have been downgraded by 1 notch from their current rating (i.e. 3 notches below the adjusted BCA, which includes parental support where available). These securities have largely the same features as junior subordinated debt on a going concern basis, but have a preferred claim in liquidation. Under a going concern assumption, the expected loss for investors in these cumulative instruments should therefore be clearly lower than for the non-cumulative preference shares. However, given their categorization as Tier 1 instruments by the regulators Moody's are concerned that the risk of coupon deferral is higher than for junior subordinated debt. Moody's previously assigned a lower rating to the preference shares with voting rights due to the additional risk of loss to investors from nationalization. As the rating agency has stated before, the announcement by both banks of their participation in the UK government's Asset Protection Scheme and the planned issuance of B shares to the government, confirms Moody's core assumption that the UK government will try to avoid full nationalization of these banks, although this remains a low probability/high severity scenario. Given the downgrade of all non-cumulative preference shares at the banks to the low single-B level, and the fact that the Banking Act 2009 facilitates the absorption of losses by all capital instruments in a restructuring of a bank, the possibility of nationalization is also incorporated in the current ratings. Moody's downgrade of the junior subordinated debt instruments by one notch from their current rating (i.e. now 2 notches below the adjusted Baseline Credit Assessment) -- and therefore 1 notch lower than dated subordinated debt - reflects their junior priority of claim to dated subordinated debt and the optional deferral feature. Bank of Scotland plc's junior subordinated debt has remained at Baa1 (on review for downgrade) as the rating agency has aligned Bank of Scotland plc's debt ratings with those of Lloyds TSB Bank, given the progressing integration between the two banks. Following the decision to review for possible downgrade Lloyds TSB's BFSR, Lloyd TSB's A3 dated subordinated debt is now also on review for possible downgrade. In line with its approach to the rating of Bank of Scotland's junior subordinated debt ratings (see above), Moody's has also left Bank of Scotland plc's dated subordinated debt at Baa1 (on review for downgrade), and will align the rating with that of Lloyds TSB Bank plc. The rating actions on the subordinated debt of SW and CMF reflect the alignment of the insurance operations' subordinated ratings and outlooks to the subordinated ratings and outlooks of the corresponding banking operations within Lloyds. Moody's believes that Lloyds's capital base is increasingly managed centrally. The revised ratings and outlooks on the insurance subsidiaries therefore reflect Moody's view that the insurance subordinated ratings of SW and CMF are constrained by the ratings on the subordinated debt of the correspondent parent banking companies within Lloyds. Review for Possible Downgrade of Lloyds TSB BFSR The review for possible downgrade of Lloyds TSB Bank plc's C+ BFSR reflects the rating agency's concerns about a further weakening in the group's financial performance. The BFSR's downgrade to C+ from B+ in February 2009 incorporated the adverse effects on Lloyds of its acquisition of HBOS and Moody's expectation of a significantly higher level of provisions. However, the review will also take into consideration These: i) the period of time it could take Lloyds to return to profitability, given further deterioration in the UK economy, pressure on margins and restructuring costs; ii) the impact on profitability and capital of the performance of key asset classes, according to Moody's updated assumptions, including a peak-to-trough house price decline of 40% for its base scenario in the UK; iii) as is the case for Bank of Scotland, the review will take into account the benefit of the additional GBP15.6 billion capital for the group from government-owned B shares and the APS, which is expected to provide 90% insurance for GBP260 billion of assets after a first loss of GBP25 billion; and iv) in addition, the review will incorporate refinements to Moody's approach to rating banks in this environment as discussed in a Special Comment entitled "Calibrating Bank Ratings in the Context of the Global Financial Crisis", which was published in February 2009. Moody's explains that, although the BFSR framework remains unchanged, the weight attached to certain rating considerations, particularly capital and future earnings prospects, has been increased to better reflect the impact of the ongoing crisis. Moody's expects to complete the review within the next few weeks at the same time as completing the review of Bank of Scotland's BFSR. Previous Rating Actions and Methodologies Used In its last rating action from April 3, 2009, Moody's factored in the general lack of systemic support expected for hybrid securities in the UK, and changed the anchor rating from the banks' long-term debt and deposit ratings to the BCA in These rating actions: -- Royal Bank of Scotland: subordinated debt rating downgraded to Baa3 from A1, and hybrid debt to Ba1 from A2, except the National Westminster Ba1 rated non-cumulative preference shares with voting rights, which were downgraded to Ba2; -- Royal Bank of Scotland Group: subordinated debt rating downgraded to Ba1 from A2, and hybrid debt to Ba2 from A3, except the Ba2 rated non-cumulative preference shares with voting rights, which were downgraded to Ba3; -- Lloyds TSB Bank: subordinated debt rating downgraded to A3 from A1 (negative outlook), and hybrid debt to Baa1 from A2 (remains on review for possible downgrade); -- Lloyds Banking Group: subordinated debt rating downgraded to Baa1 from A2 (negative outlook), and hybrid debt to Baa2 from A3 (remains on review for possible downgrade); -- Bank of Scotland: subordinated debt rating downgraded to Baa1 from A1, and hybrid debt to Baa2 from A2; -- HBOS: subordinated debt rating downgraded to Baa1 from A2, and hybrid debt to Baa2 from A3. The last rating actions on the above insurance subordinated debt ratings were on April 7, 2009: -- Scottish Widows plc: subordinated debt to A3 from A2 -- Clerical Medical Finance plc: subordinated debt to Baa1 from A3 The last rating action on Lloyds TSB Bank plc's BFSR was on February 16, 2009, when it was downgraded to C+ (negative outlook) from B+ (on review for possible downgrade). All the banks are headquartered in the United Kingdom. Downgrades: Issuer: Bank of Scotland Capital Funding L.P. -- Preferred Stock Preferred Stock, Downgraded to B3 from Baa2 Issuer: Bank of Scotland plc -- Junior Subordinated Regular Bond/Debenture, Downgraded to Baa2 from Baa1 -- Preference Stock Preference Stock, Downgraded to B3 from Baa2 Issuer: HBOS CAPITAL FUNDING NO. 3 L.P. -- Preferred Stock Preferred Stock, Downgraded to B3 from Baa2 Issuer: HBOS Capital Funding No. 1 L.P. -- Preferred Stock Preferred Stock, Downgraded to B3 from Baa2 Issuer: HBOS Capital Funding No. 4 L.P. -- Preferred Stock Preferred Stock, Downgraded to B3 from Baa2 Issuer: HBOS Group EURFinance (Jersey) -- Preferred Stock Preferred Stock, Downgraded to B3 from Baa2 Issuer: HBOS Group Sterling Finance L.P. -- Preferred Stock Preferred Stock, Downgraded to B3 from Baa2 Issuer: HBOS plc -- Junior Subordinated Regular Bond/Debenture, Downgraded to Baa2 from Baa1 -- Multiple Seniority Medium-Term Note Program, Downgraded to Baa2 from Baa1 Issuer: Halifax plc -- Junior Subordinated Regular Bond/Debenture, Downgraded to B3 from Baa1 Issuer: Leeds Permanent Building Society -- Junior Subordinated Regular Bond/Debenture, Downgraded to B3 from Baa1 Issuer: Lloyds Banking Group plc -- Preference Stock Preference Stock, Downgraded to B3 from Baa2 Issuer: Lloyds TSB Bank Plc -- Junior Subordinated Regular Bond/Debenture, Downgraded to a range of Baa2 to Baa1 from a range of Baa1 to A3 -- Multiple Seniority Medium-Term Note Program, Downgraded to Baa1 from A3 -- Preferred Stock Preferred Stock, Downgraded to Baa2 from Baa1 Issuer: Lloyds TSB Capital 1 L.P. -- Preferred Stock Preferred Stock, Downgraded to B3 from Baa1 Issuer: Lloyds TSB Capital 2 L.P. -- Preferred Stock Preferred Stock, Downgraded to B3 from Baa1 Issuer: National Westminster Bank PLC -- Junior Subordinated Conv./Exch. Bond/Debenture, Downgraded to Ba1 from Baa3 -- Junior Subordinated Regular Bond/Debenture, Downgraded to Ba1 from Baa3 -- Multiple Seniority Shelf, Downgraded to a range of (P)B3 to (P)Ba1 from a range of (P)Ba1 to (P)Baa3 -- Preference Stock Preference Stock, Downgraded to B3 from a range of Ba2 to Ba1 -- Subordinate Regular Bond/Debenture, Downgraded to Ba1 from Baa3 Issuer: RBS Capital Trust A -- Junior Subordinated Regular Bond/Debenture, Downgraded to B3 from Ba3 Issuer: RBS Capital Trust B -- Preferred Stock Preferred Stock, Downgraded to B3 from Ba3 Issuer: RBS Capital Trust C -- Preferred Stock Preferred Stock, Downgraded to B3 from Ba3 Issuer: RBS Capital Trust D -- Preferred Stock Preferred Stock, Downgraded to B3 from Ba3 Issuer: RBS Capital Trust I -- Preferred Stock Preferred Stock, Downgraded to B3 from Ba3 Issuer: RBS Capital Trust II -- Preferred Stock Preferred Stock, Downgraded to B3 from Ba3 Issuer: RBS Capital Trust III -- Preferred Stock Preferred Stock, Downgraded to B3 from Ba3 Issuer: RBS Capital Trust IV -- Preferred Stock Preferred Stock, Downgraded to B3 from Ba3 Issuer: Royal Bank of Scotland Group plc -- Junior Subordinated Regular Bond/Debenture, Downgraded to a range of Ba3 to Ba2 from a range of Ba2 to Ba1 -- Multiple Seniority Medium-Term Note Program, Downgraded to Ba2 from Ba1 -- Multiple Seniority Shelf, Downgraded to a range of (P)B3 to (P)Ba2 from a range of (P)Ba2 to (P)Ba1 -- Preference Stock Preference Stock, Downgraded to B3 from a range of Ba3 to Ba2 -- Preferred Stock Preferred Stock, Downgraded to a range of B3 to Ba3 from a range of Ba3 to Ba2 Issuer: Royal Bank of Scotland plc -- Junior Subordinated Regular Bond/Debenture, Downgraded to Ba1 from Baa3 -- Multiple Seniority Medium-Term Note Program, Downgraded to Ba1 from Baa3 -- Multiple Seniority Medium-Term Note Program, Downgraded to Ba1 from Baa3 Issuer: Scottish Widows plc -- Junior Subordinated Regular Bond/Debenture, Downgraded to Baa1 from A3 On Review for Possible Downgrade: Issuer: Cheltenham & Gloucester plc -- Bank Financial Strength Rating, Placed on Review for Possible Downgrade, currently C+ -- Multiple Seniority Medium-Term Note Program, Placed on Review for Possible Downgrade, currently A3 Issuer: Lloyds TSB Bank Plc -- Bank Financial Strength Rating, Placed on Review for Possible Downgrade, currently C+ -- Subordinate Regular Bond/Debenture, Placed on Review for Possible Downgrade, currently A3 Issuer: Royal Bank of Scotland Group plc -- Preference Stock Preference Stock, Placed on Review for Possible Downgrade, currently Ba3 Outlook Actions: Issuer: Cheltenham & Gloucester plc -- Outlook, Changed To Rating Under Review From Stable SMARTFUNDIT.COM LIMITED: In Administration, Vantis Appointed ------------------------------------------------------------ Jason T. Hesse at Leasing Life reports that Smartfundit.com Limited has gone into administration. Peter Wastell and Michael Young of Vantis appointed as joint administrators of the company, founded by Suki Gallagher with business partner Justin Floyd, the report discloses. Ms. Gallagher left the company in May, the report states. The report recalls just last December, Smartfundit.com received a GBP3.5 million (EUR4 million) venture capital injection from Baytech Venture Capital intended to "accelerate the company's global expansion". The report notes Smartfundit.com's latest accounts, for the year ending December 31 2008, showed that the company grew turnover to GBP4.4 million, up 83 percent on the previous year's GBP2.4 million, but still sustained a pre-tax loss of GBP349,878. According to the report, Smartfundit.com's parent company, Corporate Computer Lease Limited, has also gone into administration. The report relates Smarfundit.com said on its Web site "The administrators are seeking to find buyers for the going concerns of both of the companies, and are currently marketing the businesses and assets for sale." Smartfundit.com Limited -- http://www.smartfundit.com/-- is the world's first online business finance marketplace. Smartfundit.com connects businesses with funders to provide easier, transparent and de-risked access to critical business financing through an open online market. Launched in 2006, Smartfundit.com is a privately owned company with major investors including BayTech Venture Capital. Smartfundit.com has headquarters in Surrey, England, UK and an office in San Francisco, California, USA. TAURUS CMBS: Fitch Downgrades Rating on Class C Notes to 'B' ------------------------------------------------------------ Fitch Ratings has downgraded Taurus CMBS (UK) 2006-2 plc's junior notes and affirmed the rest. The Outlooks on Classes A to C have been revised to Negative from Stable. -- GBP282.4 million class A due April 2024 (XS0271522103) affirmed at 'AAA'; Outlook revised to Negative from Stable -- GBP0.05 million class X due April 2024 (XS0271525031) affirmed at 'AAA'; Outlook Stable -- GBP33.8 million class B due April 2024 (XS0271523259) downgraded to 'A' from 'AA'; Outlook revised to Negative from Stable -- GBP30.3 million class C due April 2024(XS0271523846) downgraded to 'B' from 'A'; Outlook revised to Negative from Stable -- GBP7.0 million class D due April 2024 (XS0271524653) downgraded to 'CCC' from 'BBB'; Recovery Rating 'RR6' assigned The rating actions reflect the weakened creditworthiness of all the loans securitized in this transaction as a result of deteriorating conditions in the UK commercial property market. Following a breach of the whole loan interest coverage ratio covenant and failure of the borrower to meet its service charge obligations, the Times Square whole loan (including the Times Square A-note, 10.6% of the portfolio) was transferred to special servicing on March 23, 2009. Following failed attempts to contact the borrower, the special servicer accelerated the loan on 22 April 2009. The special servicer announced on May 26, 2009 that, according to a valuation procured by it, the loan's collateral value had fallen to GBP25 million on that date from GBP54.5 million at closing. The loan is secured by the secondary quality Times Square Shopping Centre and adjacent Times Tower office building located in Sutton, Surrey. Based on this new valuation, the A-note LTV is currently 150%, implying a market value decline of over 50%. However, with A-note ICR at 1.25x and 15 years until legal final maturity of the notes in 2024, there is no immediate pressure on the special servicer to liquidate loan security. With the whole loan subject to acceleration, and the B-note now fully subordinated to the A-note, there may be some scope to amortize the A-note with excess cash. Nonetheless, there is a heightened risk of default on the class D notes, which is reflected in the rating action. The loan portfolio has a reported weighted-average loan-to-value ratio of 46.6%, as of the April 2009 interest payment date. This compares to an estimated WA Fitch LTV of 63%, reflecting an overall MVD of 24%. The reported figures are calculated for the most part on valuations carried out in 2005 and 2006 and while four of the loans do feature LTV default covenants, only the Mapeley STEPS loan borrower is obliged to procure periodic valuations; in this case, the current reported LTV of 35.2% is well below the covenanted 75%. Taurus CMBS is a securitization of eight commercial mortgage loans originated in the UK by Merrill Lynch International Bank Limited (rated 'A+'/Outlook XX/'F1+'), which closed in November 2006. Two loans have prepaid since closing, leaving the loan pool with a current balance of GBP353,645,324. Fitch will continue to monitor the performance of the transaction. * S&P Takes Credit Rating Actions on Eight European CDO Tranches ---------------------------------------------------------------- Standard & Poor's Ratings Services took credit rating actions on eight European synthetic collateralized debt obligation tranches following recent rating changes to the underlying collateral or a dependent party in those transactions. Specifically, S&P: -- lowered its ratings on two tranches; -- lowered and removed from CreditWatch negative its rating on one tranche; -- lowered and kept on CreditWatch negative its ratings on two tranches; -- lowered and placed on CreditWatch negative its rating on one tranche; and -- placed on CreditWatch negative its ratings on two tranches. Ratings List Ratings Lowered Elva Funding PLC US$9.996 Million Secured Variable Interest Rate Notes Series 2004-8 Rating ------ To From -- ---- B- BB- MF Capital II Ltd. EUR32.5 Million Promissory Notes Rating ------ To From -- ---- CCC CCC+ Rating Lowered and Removed From Creditwatch Negative Sceptre Capital B.V. EUR25 Million Floating-Rate Repackaged "PowerTranche" Notes Series 2006-6 Rating ------ To From -- ---- CCC+ BB/Watch Neg Ratings Lowered and Kept On Creditwatch Negative Prelude Europe CDO Ltd. AUD40 Million Credit-Linked Notes Series 2005-4 (Credit Sail) Rating ------ To From -- ---- BBp/Watch Neg BB+p/Watch Neg Saphir Finance PLC EUR254.5 Million Floating-Rate Notes Series 2008-2 Rating ------ To From -- ---- BB-/Watch Neg BBB-/Watch Neg Rating Lowered and Placed on Creditwatch Negative Aria CDO I EUR31.5 Million, CHF58.4 Million, GBP0.4 Million, And US$17.4 Million Floating-Rate Secured Notes (Issued by Aria CDO I (Cayman Islands) Ltd.) Rating ------ To From -- ---- BB/Watch Neg BBB- Ratings Placed on Creditwatch Negative Eirles Two Ltd. EUR10 Million Floating-Rate Secured Notes Series 44 Rating ------ To From -- ---- A-/Watch Neg A- STARTS (Cayman) Ltd. $145 Million Leveraged Super Senior Credit-Linked Fixed-Rate Notes Series 2007-38 Rating ------ To From -- ---- AAA/Watch Neg AAA * Upcoming Meetings, Conferences and Seminars --------------------------------------------- June 10-13, 2009 ASSOCIATION OF INSOLVENCY & RESTRUCTURING ADVISORS 25th Annual Bankruptcy & Restructuring Conference The Ritz-Carlton Orlando Grande Lakes Orlando, Florida Contact: http://www.aria.org/ June 11-14, 2009 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort and Spa Traverse City, Michigan Contact: http://www.abiworld.org/ June 21-24, 2009 INTERNATIONAL ASSOCIATION OF RESTRUCTURING, INSOLVENCY & BANKRUPTCY PROFESSIONALS 8th International World Congress TBA Contact: http://www.insol.org/ July 16-19, 2009 AMERICAN BANKRUPTCY INSTITUTE Northeast Bankruptcy Conference Mt. Washington Inn Bretton Woods, New Hampshire Contact: http://www.abiworld.org/ July 29-Aug. 1, 2009 AMERICAN BANKRUPTCY INSTITUTE Southeast Bankruptcy Conference The Westin Hilton Head Island Resort & Spa, Hilton Head Island, S.C. Contact: http://www.abiworld.org/ Aug. 6-8, 2009 AMERICAN BANKRUPTCY INSTITUTE Mid-Atlantic Bankruptcy Conference Hotel Hershey, Hershey, Pa. Contact: http://www.abiworld.org/ Sept. 10-11, 2009 AMERICAN BANKRUPTCY INSTITUTE Complex Financial Restructuring Program Hyatt Regency Lake Tahoe, Incline Village, Nevada Contact: http://www.abiworld.org/ Sept. 10-12, 2009 AMERICAN BANKRUPTCY INSTITUTE 17th Annual Southwest Bankruptcy Conference Hyatt Regency Lake Tahoe, Incline Village, Nevada Contact: http://www.abiworld.org/ Oct. 2, 2009 AMERICAN BANKRUPTCY INSTITUTE ABI/GULC "Views from the Bench" Georgetown University Law Center, Washington, D.C. Contact: http://www.abiworld.org/ Oct. 5-9, 2009 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott Desert Ridge, Phoenix, Arizona Contact: 312-578-6900; http://www.turnaround.org/ Oct. 20, 2009 AMERICAN BANKRUPTCY INSTITUTE NCBJ/ABI Educational Program Paris Las Vegas, Las Vegas, Nev. Contact: http://www.abiworld.org/ Dec. 3-5, 2009 AMERICAN BANKRUPTCY INSTITUTE 21st Annual Winter Leadership Conference La Quinta Resort & Spa, La Quinta, California Contact: 1-703-739-0800; http://www.abiworld.org/ Apr. 29-May 2, 2010 AMERICAN BANKRUPTCY INSTITUTE Annual Spring Meeting Gaylord National Resort & Convention Center, Maryland Contact: 1-703-739-0800; http://www.abiworld.org/ June 17-20, 2010 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort and Spa, Traverse City, Michigan Contact: 1-703-739-0800; http://www.abiworld.org/ July 7-10, 2010 AMERICAN BANKRUPTCY INSTITUTE Northeast Bankruptcy Conference Ocean Edge Resort, Brewster, Massachusetts Contact: 1-703-739-0800; http://www.abiworld.org/ July 14-17, 2010 AMERICAN BANKRUPTCY INSTITUTE Southeast Bankruptcy Conference The Ritz-Carlton Amelia Island, Amelia, Fla. Contact: http://www.abiworld.org/ Aug. 5-7, 2010 AMERICAN BANKRUPTCY INSTITUTE Mid-Atlantic Bankruptcy Workshop Hyatt Regency Chesapeake Bay, Cambridge, Maryland Contact: 1-703-739-0800; http://www.abiworld.org/ Oct. 4-8, 2010 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention JW Marriott Grande Lakes, Orlando, Florida Contact: http://www.turnaround.org/ Dec. 2-4, 2010 AMERICAN BANKRUPTCY INSTITUTE 22nd Annual Winter Leadership Conference Camelback Inn, Scottsdale, Arizona Contact: 1-703-739-0800; http://www.abiworld.org/ Mar. 31-Apr. 3, 2011 AMERICAN BANKRUPTCY INSTITUTE Annual Spring Meeting Gaylord National Resort & Convention Center, Maryland Contact: 1-703-739-0800; http://www.abiworld.org/ June 9-12, 2011 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort and Spa Traverse City, Michigan Contact: http://www.abiworld.org/ Dec. 1-3, 2011 AMERICAN BANKRUPTCY INSTITUTE 23rd Annual Winter Leadership Conference La Quinta Resort & Spa, La Quinta, California Contact: 1-703-739-0800; http://www.abiworld.org/ ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than US$3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Thursday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/booksto order any title today. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter -- Europe is a daily newsletter co- published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland USA. Valerie C. Udtuhan, Marites O. Claro, Rousel Elaine C. Tumanda, Pius Xerxes V. Tovilla, Joy A. Agravante, Marie Therese V. Profetana and Peter A. Chapman, Editors. Copyright 2009. All rights reserved. ISSN 1529-2754. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR Europe subscription rate is US$625 per half-year, delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Christopher Beard at 240/629-3300. * * * End of Transmission * * *