/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/090925.mbx T R O U B L E D C O M P A N Y R E P O R T E R E U R O P E Friday, September 25, 2009, Vol. 10, No. 190 Headlines A U S T R I A INGENIEUR SCHWARTZ: Claims Filing Deadline is October 5 PHAROMED HOLDING: Claims Filing Deadline is October 5 SCHUCI GMBH: Claims Filing Deadline is October 5 UAP MESSTECHNIK: Claims Filing Deadline is October 9 C Y P R U S HELLENIC BANK: Moody's Changes Outlook on 'D+' BFSR to Negative F R A N C E SOCIETE NATIONALE: Unveils Sixth Rescue Plan for Freight Business G E R M A N Y GENERAL MOTORS: Opel Aid Must No Be Conditional on Saving Jobs GILDEMEISTER AG: S&P Downgrades Corporate Credit Rating to 'B+' VAC HOLDING: S&P Downgrades Corporate Credit Rating to 'CC' G R E E C E MARFIN EGNATIA: Moody's Downgrades Bank Strength Rating to 'D' WIND HELLAS: Deadline for Expressions of Interest Extended I C E L A N D GLITNIR BANKI: Creditors to Get 25%-35% Recovery on Claims I R E L A N D INDEPENDENT NEWS: O'Brien Draws Up Alternative Restructuring Plan ZOE GROUP: Supreme Court Grants Stay on Winding-Up Orders I T A L Y UNICREDIT SPA: To Seeks Support for Rights Offers From Investors K A Z A K H S T A N AK BIDAI: Creditors Must File Claims by September 30 AMP LTD: Creditors Must File Claims by September 30 KAZ NEFTE: Creditors Must File Claims by September 30 KURYLYS OJSC: Creditors Must File Claims by September 30 METRO LOGISTICS: Creditors Must File Claims by September 30 SIPAR LET: Creditors Must File Claims by September 30 STAL MUNAI: Creditors Must File Claims by September 30 TEMIR AT: Creditors Must File Claims by September 30 UNIVERSAL BUSINESS: Creditors Must File Claims by September 30 K Y R G Y Z S T A N POLIGRAPH SNUB: Creditors Must File Claims by October 17 N E T H E R L A N D S SCHOELLER ARCA: Dutch Court Approves Restructuring Plan R U S S I A BOKSITOGORSKIY REINFORCED: Creditors Must File Claims by Sept. 30 PRESTIZH-STROY LLC: Creditors Must File Claims by September 30 STROY-INVEST LLC: Creditors Must File Claims by September 30 TES' OJSC: Creditors Must File Claims by September 30 GLAV-TAMBOV LLC: Tambov Bankruptcy Hearing Set September 30 S P A I N CEMEX SAB: Opens GBP49 Million Cement Facility in Essex IM CAJA: Moody's Confirms Rating on Class E Notes at 'C' SANTANDER CONSUMER: Moody's Cuts Rating on Class E Notes to 'C' SANTANDER CONSUMER: Fitch Affirms Rating on Class D Notes at 'CC' TDA 25: S&P Downgrades Rating on Class C Notes to 'D' S W I T Z E R L A N D ARTEPRINTAS GMBH: Claims Filing Deadline is October 14 EGOW CONSULTING: Claims Filing Deadline is October 9 ZEKA HOLDING: Claims Filing Deadline is October 30 T U R K E Y ALBARAKA TURK: S&P Puts Stable Outlook on Counterparty Credit Rtng DOGUS HOLDING: S&P Puts Stable Outlook on Counterparty Credit Rtng GARANTI: S&P Puts Stable Outlook on Counterparty Credit Rating HSBC BANK: S&P Puts Stable Outlook on Counterparty Credit Rating TURKIYE: S&P Puts Stable Outlook on Counterparty Credit Rating TURKIYE IS: S&P Puts Stable Outlook on Counterparty Credit Rating TURKIYE VAKIFLAR: S&P Puts Stable Outlook on Credit Rating YAPI VE: S&P Puts Stable Outlook on Counterparty Credit Rating U K R A I N E BANK FORUM: Fitch Downgrades Individual Rating to 'E' From 'D/E' CARGO CARS: Creditors Must File Claims by September 30 DIS LLC: Creditors Must File Claims by September 30 HEATPIPE LLC: Creditors Must File Claims by September 30 DANKO SUBSIDIARY: Creditors Must File Claims by September 30 INVESTOR-96 LLC: Court Starts Bankruptcy Supervision Procedure KUPIANSK FOUNDRY: Creditors Must File Claims by September 27 NAFTOGAZ OJSC: Fitch Downgrades Issuer Default Rating to 'C' NEFTEZASCHITA LLC: Creditors Must File Claims by September 30 PERVOMAYSK OJSC: Court Starts Bankruptcy Supervision Procedure PRAVEX BANK: Fitch Affirms Individual Rating at 'E' PROCREDIT UKRAINE: Fitch Affirms Individual Rating at 'D/E' SCARLETT-CHERNIGOV LLC: Creditors Must File Claims by September 27 UKRSIBBANK JSCIB: Fitch Cuts Individual Rating to 'E' From 'D/E' UKRSOTSBANK: Fitch Downgrades Individual Rating to 'E' From 'D/E' VTB UKRAINE: Fitch Affirms Individual Rating at 'E' U N I T E D K I N G D O M ALBA 2007-1: Moody's Cuts Rating on Class F Notes to 'Caa3' BLACKS LEISURE: Secures Standstill; SandCity In Administration CORSAIR NO 2: Moody's Cuts Rating on Series 80 Notes to 'B2' HALTON LEA: Put Into Receivership; Savills Appointed NATIONAL EXPRESS: Takeover Offer Deadline May Be Extended PUNCH TAVERNS: Shareholder Seeks Liquidation of Business WINDERMERE VII: Moody's Confirms 'B1' Rating on Class D Notes YELL GROUP: To Raise GBP500 Mln in Share Sale to Repay Debt YELLOWFIN LTD: Goes Into Administration X X X X X X X X * BOOK REVIEW: Megamergers - Corporate America's Billion-Dollar ********* ============= A U S T R I A ============= INGENIEUR SCHWARTZ: Claims Filing Deadline is October 5 ------------------------------------------------------- Creditors of Ingenieur Schwartz GmbH have until October 5, 2009, to file their proofs of claim. A court hearing for examination of the claims has been scheduled for October 19, 2009 at 10:00 a.m. For further information, contact the company's administrator: Dr. Elisabeth Hrastnik Hauptplatz 11, Atrium Top 16 A 7400 Oberwart Austria Tel: 03352/31375 Fax: 03352/31375-16 E-mail: dr.hrastnik@utanet.at PHAROMED HOLDING: Claims Filing Deadline is October 5 ----------------------------------------------------- Creditors of Pharomed Holding GmbH have until October 5, 2009, to file their proofs of claim. A court hearing for examination of the claims has been scheduled for October 19, 2009 at 9:20 a.m. For further information, contact the company's administrator: Dr. Werner Stanek Wollzeile 33/20 1010 Vienna Austria Tel: 512 29 02 Fax: 512 29 02 30 E-mail: werner-stanek@chello.at SCHUCI GMBH: Claims Filing Deadline is October 5 ------------------------------------------------ Creditors of Schuci GmbH have until October 5, 2009, to file their proofs of claim. A court hearing for examination of the claims has been scheduled for October 19, 2009 at 9:00 a.m. For further information, contact the company's administrator: Dr. Elisabeth Stanek-Noverka Hernalser Hauptstr. 116 1170 Vienna Austria Tel: 486 02 09-0 Fax: 486 02 09 18 E-mail: ra-noverka@chello.at UAP MESSTECHNIK: Claims Filing Deadline is October 9 ---------------------------------------------------- Creditors of Uap Messtechnik GmbH have until October 9, 2009, to file their proofs of claim. A court hearing for examination of the claims has been scheduled for October 14, 2009 at 10:00 a.m. For further information, contact the company's administrator: Dr. Volker Mogel Kalchberggasse 1 8010 Graz Austria Tel: 0316/830550-0 Fax: 0316/813717 E-mail: volker.mogel@kcp.at =========== C Y P R U S =========== HELLENIC BANK: Moody's Changes Outlook on 'D+' BFSR to Negative --------------------------------------------------------------- Moody's Investors Service has changed the outlook on the D+ bank financial strength rating of the Cyprus-based Hellenic Bank Public Company Ltd. to negative, from stable. The bank's deposit rating of Baa2 still has a stable outlook. Moody's rating action was prompted both by challenging operating/macro conditions -- and their impact on Hellenic Bank's asset quality and interest margins -- and, more importantly, the operational and financial challenges facing the Cypriot institution's Greek operations, which are compromising its earnings-generation capabilities. Hellenic Bank currently operates 27 branches in Greece, where the operations account for around 21% of total group loans and 14% of deposits. Over the past 18 months, their performance has deteriorated substantially, with losses increasing from EUR3 million in 2007 to EUR34 million in H1 2009, on the back of shrinking margins, negative growth in business volume, and deteriorating asset quality. However, Moody's believes Hellenic Bank's current BFSR is supported by its well-established local (Cyprus) franchise and strong position in the lucrative international banking business, as well as its good liquidity position and adequate capitalisation. Future rating actions will depend on management's ability to implement its restructuring plan in Greece and to improve the currently weak earnings-generation capabilities. Moody's retains a stable outlook on Hellenic Bank's Baa2 deposit rating, supported by the very high probability of systemic support in case of need. Moody's latest rating action for Hellenic Bank was implemented on April 24, 2007, when it upgraded the bank's BFSR rating to D+, from D. Headquartered in Nicosia, Cyprus, Hellenic Bank Public Company Ltd reported total assets of EUR8.5 billion as of June 2009. =========== F R A N C E =========== SOCIETE NATIONALE: Unveils Sixth Rescue Plan for Freight Business ----------------------------------------------------------------- Peggy Hollinger at The Financial Times reports that Societe Nationale des Chemins de Fer Francais unveiled its sixth rescue plan in 12 years for its troubled goods transport arm. The FT relates Guillaume Pepy, SNCF's chief executive, said the company would invest EUR1 billion (US$1.5 billion) to 2015 in redesigning its freight business, stepping up the number of goods trains and high speed international services, new bigger shuttles and local connections to regions and ports that would make logistics "one of the strong points of France". According to the FT, the division, which has twice been bailed out by the state, is expected to incur EUR600 million in losses this year and has consumed EUR3 billion in cash over six years. Mr. Pepy insisted the latest plan would deliver results, in spite of the previous failures, the FT relates. Societe Nationale des Chemins de Fer Francais -- http://www.sncf.fr/-- is France's state-owned railway company. It is the nation's primary provider of local and long-distance passenger and freight service. Passenger transportation, including both commuter trains and intercity service throughout France and into neighboring countries, accounts for the largest share of the company's sales. SNCF's Eurostar joint venture shuttles passengers between Paris and London via the Channel Tunnel, and Thalys links Paris with other European capitals. SNCF's high-speed TGV passenger trains travel at up to 350 mph. Overall, the SNCF network spans more than 30,800 km (19,100 miles) of track and about 4,000 stations. ============= G E R M A N Y ============= GENERAL MOTORS: Opel Aid Must No Be Conditional on Saving Jobs -------------------------------------------------------------- Matthew Newman at Bloomberg News reports that the European Union warned Germany and other nations not to tie EUR3 billion (US$4.4 billion) in additional aid to General Motors Co.'s Opel unit to saving jobs. According to Bloomberg, the European Commission said it won't accept subsidy plans that would require Opel to keep factories open. "State funding is meant to tackle the financing problems due to the credit crunch and cannot be used to impose political constraints concerning the location of production," Bloomberg quoted the Brussels-based commission as saying in a statement Wednesday. Antwerp Bloomberg relates about 5,000 unionized workers from Germany and the three countries with Opel factories protested the Antwerp plant's possible closure on Wednesday. Bloomberg recalls Magna Co-Chief Executive Officer Siegfried Wolf said Sept. 14 that the Antwerp factory, which has more than 2,500 workers, may be closed as part of a drive to cut spending on labor by more than US$1 billion. Viability John Reed at The Financial Times reports Lord Mandelson, Britain's business secretary, questioned the viability of Magna's plan to buy Opel in a letter to European competition chief Neelie Kroes. In the letter, obtained by the FT, Lord Mandelson said that the Canadian company's restructuring blueprint was too expensive and too punitive of productive plants, and susceptible to "political intervention". About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- as founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM Europe is based in Zurich, Switzerland, while General Motors Latin America, Africa and Middle East is headquartered in Miramar, Florida. As reported by the Troubled Company Reporter, GM reported net loss of US$6.0 billion, including special items, in the first quarter of 2009. This compares with a reported net loss of US$3.3 billion in the year-ago quarter. As of March 31, 2009, GM had US$82.2 billion in total assets and US$172.8 billion in total liabilities, resulting in US$90.5 billion in stockholders' deficit. General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). General Motors changed its name to Motors Liquidation Co. following the sale of its key assets to a company 60.8% owned by the U.S. Government. The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as the Chief Executive Officer for Motors Liquidation Company. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. Bankruptcy Creditors' Service, Inc., publishes General Motors Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Motors Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000 GILDEMEISTER AG: S&P Downgrades Corporate Credit Rating to 'B+' --------------------------------------------------------------- Standard & Poor's Ratings Services said that it lowered its long- term corporate credit rating on Germany-based machine-tool manufacturer Gildemeister AG to 'B+' from 'BB-'. The rating was subsequently withdrawn at the company's request. The outlook was negative at the time of withdrawal. "The downgrade reflects S&P's view of Gildemeister's sharply deteriorating operating performance, which S&P believes stems from the sharp contraction of the global machine-tool market," said Standard & Poor's credit analyst Varvara Nikanorava. "What's more, S&P believes business conditions could weaken further over the next 12 months. "Although S&P understand that the company will shortly update its business plans, S&P has revised its own financial base-case downward. S&P's forecasts show that Gildemeister's credit metrics are likely to be more commensurate with a 'B+' rating in the short to medium term, despite considerable efforts by management to reduce costs. In addition, S&P expects Gildemeister's weakening financial performance to substantially reduce its headroom under financial covenants." During the first half of 2009, Gildemeister's performance deteriorated more than S&P anticipated. Sales declined 28% year on year, and the order intake dropped by 49%. At the same time, S&P saw that reduced capacity utilization and underabsorption of fixed costs eroded profitability. Headcount reductions could not fully offset these declines. The reported EBITDA fell by about 51% in absolute terms, and the margin was 7% compared with 10% the previous year. Gildemeister's cash generation weakened considerably in the first half of 2009 in S&P's observations. Funds from operations in the 12 months to June 30, 2009, dropped 43% to EUR99 million compared with the figure for full-year 2008. In addition, negative working capital in the first half of 2009 contributed to negative free operating cash flow, despite 40% lower capital expenditures year on year. S&P thinks that further deterioration is likely in 2010, given the late-cycle nature of machine-tool demand. The timing and magnitude of eventual recovery is uncertain to us at this stage. S&P believes that management's considerable efforts to reduce fixed costs will only partly mitigate these challenges, which S&P considers to be due to severe market conditions. VAC HOLDING: S&P Downgrades Corporate Credit Rating to 'CC' ----------------------------------------------------------- Standard & Poor's Ratings Services said it lowered its long-term corporate credit rating on German capital goods company VAC Holding GmbH to 'CC' from 'CCC+'. The 'C' short-term rating was affirmed. The outlook is negative. S&P also lowered its issue-level rating on the EUR135 million senior secured notes issued by VAC Finanzierung GmbH due 2016 to 'CC' from 'CCC+'. The recovery rating of '4' on these notes remains unchanged, indicating that lenders can expect average recovery (30%-50%) in the event of a payment default. The ratings on the senior secured debt issued by VAC KG were also lowered to 'CCC' from 'B'. The recovery ratings on this debt remain unchanged at '1'. "The downgrade follows the announcement by VAC's equity sponsor that it will make a public tender offer for up to EUR45 million of VAC's EUR135 million senior secured notes due 2016," said Standard & Poor's credit analyst Werner Staeblein. According to a statement, the tender offer will run until Sept. 25, 2009. Settlement of the offer is expected to be Oct. 1, 2009. Under S&P's ratings criteria, S&P considers this proposed debt restructuring to be a distressed exchange and, as such, tantamount to a default. S&P's criteria on distressed exchange offers also apply if a related party makes an offering clearly below par, which S&P considers to be the case in this instance. The announcement of a cash tender offer for the outstanding bond follows VAC's announcement on Sept. 16, 2009, that it is in default under a senior credit facilities agreement with a consortium of banks. Pursuant to this agreement, VAC was required by Sept. 16, 2009, to present a proposal addressing, first, a required reset of the financial covenants under the SFA for the financial year 2010 through to the final repayment date, and thereafter to obtain the approval of at least 66.66% of the lenders for this proposal. VAC has not been able to fulfill these two requirements. Should the lenders accelerate the SFA as a result of declaring an event of default, the entire VAC group could be made insolvent. S&P understand that VAC is continuing a dialogue with its lenders at this time. "On completion of the partial cash tender offer for outstanding bonds, S&P would expect to lower the ratings on the senior secured notes due in 2016 to 'D', said Mr. Staeblein. "We could also lower the corporate credit rating to 'SD' (selective default), should the company continue to honor its debt obligations." As soon as is practical thereafter, and following S&P's review of the revised liability structure, S&P would reassess VAC's capital structure and liquidity profile and assign new ratings based on the amount of notes tendered and likewise based on any potential negotiation outcome with the banking syndicate. =========== G R E E C E =========== MARFIN EGNATIA: Moody's Downgrades Bank Strength Rating to 'D' -------------------------------------------------------------- Moody's Investors Service has downgraded the bank financial strength rating of Marfin Egnatia Bank SA of Greece to D, with a stable outlook, from D+. The outlook on the bank's Baa1/P-2 deposit, and Baa1/Baa2 senior and subordinated debt ratings was changed to positive, from stable. Relatedly, Moody's has also affirmed the ratings of Marfin Popular Bank Public Company Ltd (Marfin Egnatia's Cyprus-based parent) at C-/A3/P-1 with stable outlook. The rating actions by Moody's were prompted by two factors: (i) the BFSR was downgraded to reflect the challenging operating/macroeconomic conditions in Greece and their impact on Marfin Egnatia's financial fundamentals; while (ii) the outlook on the bank's deposit and debt ratings was changed to positive based on the recently announced decision by the boards of directors of Marfin Egnatia and its parent, MPB, to continue with their merger process -- of Marfin Egnatia being absorbed by MPB. The merger date was set to June 30, 2009, and the whole process is set for completion by Q1 2010. The transaction is likely to have a positive impact on Marfin Egnatia's deposit/debt ratings: when all relevant approvals/licenses are received and the merger is completed, its deposit and debt ratings are expected to converge with those of MPB, currently at A3/P-1. Moody's downgrade of Marfin Egnatia's BFSR reflects how its financial fundamentals are being affected by the financial crisis and macroeconomic slowdown. In recent quarters, the bank has experienced a tightening in its funding and liquidity position, and a significant deterioration in its interest margins, revenue generation and asset quality indicators, which led to losses for H1 2009. Although it has taken measures to improve its net interest margin (which dropped to 1.0% in H1 2009, from around 2.5% in 2007) and to contain the deterioration in its asset quality (with non-performing loans increasing to 6.6% in June 2009, from 4.7% in December 2008), Moody's do not expect the bank to return to the level of profitability it enjoyed prior to the financial crisis any time soon. Moody's last rating action for Marfin Egnatia Bank was implemented on April 24, 2007, when the bank's deposit ratings were upgraded to Baa1/P-2, from Baa3/P-3. On the same day, MPB's BFSR was upgraded to C- from D+, and its deposit ratings were upgraded to A3/P-1 from Baa1/P-2. Headquartered in Athens, Greece, Marfin Egnatia Bank SA reported total assets of EUR20.7 billion as of June 2009. Marfin Popular Bank Public Company Ltd is headquartered in Nicosia, Cyprus, and reported total assets of EUR42.0 billion as of June 2009. WIND HELLAS: Deadline for Expressions of Interest Extended ---------------------------------------------------------- Maria Petrakis at Bloomberg News reports Hellas Telecommunications II, the holding company for Wind Hellas Telecommunications SA, extended a deadline for expressions of interest in a sale of Wind Hellas assets, such as shares and intercompany debt, to the week of Sept. 28. As reported in the Troubled Company Reporter-Europe on Sept. 15, 2009, the Financial Times said private equity groups Apax Partners and TPG are interested in acquiring Wind Hellas. According to the FT, Apax is interested in buying some of Wind Hellas's EUR1.47 billion senior debt, most of which matures in 2012. It is not clear whether TPG is considering a bid for all or part of the company, the FT said. The FT disclosed Wind Hellas, which is owned by Weather, Egyptian entrepreneur Sawiris's Mediterranean telecoms group, has put itself up for sale after losing market share and hitting trouble servicing its EUR3.2 billion (US$4.6 billion) of net debt. The company is being advised by Morgan Stanley and Ernst & Young. Headquartered in Athens, WIND Hellas Telecommunications S.A. -- http://www.wind.com.gr/-- offers TIM-branded (formerly Telestet) wireless telecom services to about 2.3 million consumer and small- business customers throughout Greece. From its digital GSM network, the firm offers conference calling, mobile e-mail, fax, and data transmission. * * * As reported in the Troubled Company Reporter-Europe on Sept. 8, 2009, Standard & Poor's Ratings Services said that it lowered its long-term corporate credit ratings on Greek mobile telecommunications operator WIND Hellas Telecommunications S.A. and related entities to 'CC' from 'CCC' on the group's weak second-quarter results and announcement that it was in talks with its shareholders about a potential restructuring of the group's capital structure. S&P said the outlook is negative. ============= I C E L A N D ============= GLITNIR BANKI: Creditors to Get 25%-35% Recovery on Claims ---------------------------------------------------------- Omar R. Valdimarsson at Bloomberg News, citing Reykjavik-based broadcaster RUV, reports that creditors of Glitnir banki hf will get between 25% and 35% of what the bank owed them before it collapsed. According to Bloomberg, RUV said the bank's creditors can take a 95% stake in Islandsbanki Bank, the state-controlled unit of Glitnir, immediately or receive a bond issued by the bank with the option to hold as much as 90% of its shares between 2011 and 2015. About Glitnir Banki Headquartered in Reykjavik, Iceland, Glitnir banki hf -- http://www.glitnir.is/-- offers an array of financial services to corporation, financial institutions, investors and individuals. Judge Stuart Bernstein of the U.S. Bankruptcy Court for the Southern District Court of New York granted Glitnir banki hf permission to enter Chapter 15 of the U.S. bankruptcy code on January 6, 2008. Glitnir has been granted a moratorium pursuant to a ruling of the Reykjavik District Court until Nov. 13, 2009. On May 12, 2009, the court appointed a winding-up board for the bank, which will handle, for instance, claims against the bank while the moratorium is in effect and after winding-up proceedings commence upon the conclusion of the moratorium. ============= I R E L A N D ============= INDEPENDENT NEWS: O'Brien Draws Up Alternative Restructuring Plan ----------------------------------------------------------------- Salamander Davoudiand Anousha Sakoui at The Financial Times reports that Denis O'Brien, the second-largest shareholder in Independent News & Media plc, set out an alternative restructuring proposal to the publisher's banks. According to the FT, under Mr. O'Brien's new proposal a rescue vehicle would be set up to inject EUR100 million of new money into INM. In exchange, he would receive more than half the equity in the company after a restructuring, the FT says. Bondholders would get some cash upfront plus some equity as part of a debt-for-equity swap under Mr. O Brien's plan, the FT discloses. "The plan gives the bondholders cash upfront, so clearly they would get less equity than they would under the company's current plan," the FT quoted one person close to the talks as saying. As reported in the Troubled Company Reporter-Europe on Sept. 23, 2009, the FT said INM is close to agreeing a debt-for-equity swap plan with creditors. According to the FT, talks are continuing this week to bridge the small gap between the company, its banks and bondholders about the terms of the debt-for-equity swap. The debt-for-equity swap plan under consideration would see the bondholders swap EUR110 million-EUR120 million (US$161 million- US$176 million) for about 45% of the company's un-issued share capital at a range of between 15-17 cents, the FT said. Citing people close to the talks, the FT disclosed negotiations continue about the exact price at which bonds would be swapped for 720 million shares and whether the company should raise an additional EUR20 million in the rights issue at the request of the banks or wait until the company has recovered. About Independent News & Media Headquartered in Dublin, Ireland, Independent News & Media PLC (ISE:IPD) -- http://www.inmplc.com/-- is engaged in printing and publishing of metropolitan, national, provincial and regional newspapers in Australia, India, Ireland, New Zealand, South Africa and the United Kingdom. It also has radio operations in Australia and New Zealand, and outdoor advertising operations in Australia, New Zealand, South-East Asia and across Africa. The Company also has online operations across each of its principal markets. The Company has three business segments: printing, publishing, online and distribution of newspapers and magazines and commercial printing; radio, and outdoor advertising. INM publishes over 200 newspaper and magazine titles, delivering a combined weekly circulation of over 32 million copies with a weekly audience of over 100 million consumers. In March 2008, it acquired The Sligo Champion. During the year ended December 31, 2007, the Company acquired the remaining 50% interest in Toowoomba Newspapers Pty Ltd. ZOE GROUP: Supreme Court Grants Stay on Winding-Up Orders --------------------------------------------------------- Belfast Telegraph reports that the Supreme Court has granted lawyers for the Liam Carroll-controlled Zoe Group a stay on the winding-up orders which were made by Mr. Justice Frank Clarke last week. According to Belfast Telegraph, the Chief Justice agreed to freeze the orders in respect of Vantive Holdings and Morsten Investments pending the outcome of the appeal by lawyers for the Zoe Group against the dismissal of their examinership bid by Mr. Justice Clarke. Belfast Telegraph relates lawyers for the Zoe Group on Tuesday that said that, without the stay, they were not protected and therefore were at risk at the moment. As reported in the Troubled Company Reporter-Europe, Mr. Carroll had sought court protection for the Zoe Group because ACC Bank had threatened to take insolvency proceedings against his companies to recoup loans worth EUR136 million. ========= I T A L Y ========= UNICREDIT SPA: To Seeks Support for Rights Offers From Investors ---------------------------------------------------------------- UniCredit SpA executives will meet with some of the bank's largest investors this week to discuss plans to raise EUR4 billion (US$5.9 billion), Sonia Sirletti at Bloomberg News reports, citing three people familiar with the matter. Bloomberg relates two of the people said the bank on Tuesday proposed three options to its strategic committee: a rights offer, a sale of bonds to the state, or a combination of the two. According to Bloomberg, one of the people said Unicredit Chief Executive Officer Alessandro Profumo said he would prefer to avoid government aid because of the expense. Citing people with knowledge of the matter, Bloomberg discloses senior executives will meet with Fondazione Cassa di Risparmio Verona and Fondazione Cassa di Risparmio di Torino, which together own 9.4% of UniCredit, to seek support for a rights offer. As reported in the Troubled Company Reporter-Europe on Sept. 23, 2009, Unicredit will make a decision on funding plans at a Sept. 29 board meeting. Bloomberg disclosed Il Messaggero reported Monday that UniCredit's banking foundation investors are concerned the company may opt for a capital increase to raise money rather than follow through with plans to take state aid through a special bond sale. Based in Milan, Italy, UniCredit SpA (BIT:UCG) -- http://www.unicreditgroup.eu/-- is a holding company of an Italian banking group. The Group is divided into eight divisions: Asset Management, Retail, Central Eastern Europe, Poland's Markets, Corporate, Markets and Investment Banking, Private Banking and Household Banking. Through its network of companies, the Group provides a range of products and services that include traditional banking products, bancassurance, loans, leasing and investment products, which it offers to individuals and households, as well as professionals, small and medium companies and corporations. The Group owns local banks in a number of central-eastern European countries (CEECs), including Poland, Bulgaria, Croatia, Turkey, Slovakia, Romania and the Czech Republic. Unicredit SpA is also present through offices and representatives worldwide in Europe, Asia and the United States. In the fiscal year ended December 31, 2007, UniCredit acquired Capitalia Group. =================== K A Z A K H S T A N =================== AK BIDAI: Creditors Must File Claims by September 30 ---------------------------------------------------- Creditors of CJSC AK Bidai have until September 30, 2009, to submit proofs of claim to: Kazybek Str. 50 Office 74 Almaty Kazakhstan The Specialized Inter-Regional Economic Court of Almaty commenced bankruptcy proceedings against the company on July 4, 2009, after finding it insolvent. The Court is located at: The Specialized Inter-Regional Economic Court of Almaty Baizakov Str. 273b Almaty Kazakhstan AMP LTD: Creditors Must File Claims by September 30 --------------------------------------------------- LLP LLS AMP Ltd. is currently undergoing liquidation. Creditors have until September 30, 2009, to submit proofs of claim to: Jangusurov Str. 113A Room 312 Taldykorgan Almaty Kazakhstan KAZ NEFTE: Creditors Must File Claims by September 30 ----------------------------------------------------- Creditors of LLP Kaz Nefte Mash have until September 30, 2009, to submit proofs of claim to: Abai Str. 10a Atyrau Kazakhstan The Specialized Inter-Regional Economic Court of Atyrau commenced bankruptcy proceedings against the company on July 2, 2009, after finding it insolvent. The Court is located at: The Specialized Inter-Regional Economic Court of Atyrau Satpaev Str. 3 Atyrau Kazakhstan KURYLYS OJSC: Creditors Must File Claims by September 30 -------------------------------------------------------- Creditors of OJSC Kurylys have until September 30, 2009, to submit proofs of claim to: Micro District Samal, 15/29 Taldykorgan Almaty Kazakhstan The Specialized Inter-Regional Economic Court of Almaty commenced bankruptcy proceedings against the company on July 1, 2009, after finding it insolvent. The Court is located at: The Specialized Inter-Regional Economic Court of Almaty Tauelsyzdyk Str. 53 Taldykorgan Almaty Kazakhstan METRO LOGISTICS: Creditors Must File Claims by September 30 ----------------------------------------------------------- Creditors of LLP Metro Logistics Kazakhstan have until September 30, 2009, to submit proofs of claim to: Abai Str. 10a Atyrau Kazakhstan The Specialized Inter-Regional Economic Court of Atyrau commenced bankruptcy proceedings against the company on July 2, 2009, after finding it insolvent. The Court is located at: The Specialized Inter-Regional Economic Court of Atyrau Satpaev Str. 3 Atyrau Kazakhstan SIPAR LET: Creditors Must File Claims by September 30 ----------------------------------------------------- Creditors of LLP Sipar Let have until September 30, 2009, to submit proofs of claim to: Kazybek Str. 50 Office 74 Almaty Kazakhstan The Specialized Inter-Regional Economic Court of Almaty commenced bankruptcy proceedings against the company on July 4, 2009, after finding it insolvent. The Court is located at: The Specialized Inter-Regional Economic Court of Almaty Baizakov Str. 273b Almaty Kazakhstan STAL MUNAI: Creditors Must File Claims by September 30 ------------------------------------------------------ Creditors of LLP Stal Munai Complect have until September 30, 2009, to submit proofs of claim to: Dostoevsky Str. 72 Pavlodar Kazakhstan The Specialized Inter-Regional Economic Court of Pavlodar commenced bankruptcy proceedings against the company on June 25, 2009, after finding it insolvent. The Court is located at: The Specialized Inter-Regional Economic Court of Pavlodar Djambulskaya Str. 6 Pavlodar Kazakhstan TEMIR AT: Creditors Must File Claims by September 30 ---------------------------------------------------- The Kostanai Branch of JSC Insurance Company Temir At is currently undergoing liquidation. Creditors have until September 30, 2009, to submit proofs of claim to: Chehov Str. 105a Room 101 Kostanai Kazakhstan UNIVERSAL BUSINESS: Creditors Must File Claims by September 30 -------------------------------------------------------------- LLP Universal Business 2009 is currently undergoing liquidation. Creditors have until September 30, 2009, to submit proofs of claim to: Auezov Str. 80 Tuzdybastau Talgarsky Almaty region Kazakhstan =================== K Y R G Y Z S T A N =================== POLIGRAPH SNUB: Creditors Must File Claims by October 17 -------------------------------------------------------- LLC Poligraph Snub is currently undergoing liquidation. Creditors have until October 17, 2009, to submit proofs of claim to: Kiyevskaya Str. 96b-102 Bishkek Kyrgyzstan ===================== N E T H E R L A N D S ===================== SCHOELLER ARCA: Dutch Court Approves Restructuring Plan ------------------------------------------------------- Anousha Sakoui at The Financial Times reports that a court in the Netherlands has approved a restructuring plan for Schoeller Arca Systems. Citing people familiar with the situation, the FT discloses under the plan, One Equity Partners, the private equity company, will keep control of SAS through a pre-packaged sale of the business to a new entity with the senior lenders' debt claims staying in place. According to the FT, JPMorgan and Citigroup, who hold a subordinated bridge loan of about EUR180 million (GBP162.1 million), face having a majority of their claims written off under the plan. Schoeller Arca Systems is a plastic packaging company. =========== R U S S I A =========== BOKSITOGORSKIY REINFORCED: Creditors Must File Claims by Sept. 30 ----------------------------------------------------------------- Creditors of LLC Boksitogorskiy Reinforced Concrete (TIN 4701004184) have until September 30, 2009, to submit proofs of claims to: Ya.Merkulov Insolvency Manager Post User Box 20 394038 Voronezh Russia The Arbitration Court of Saint-Petersburg commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. ?56�7598/2009. The Debtor can be reached at: LLC Boksitogorskiy Reinforced Concrete Pesochnaya Str. 1 Boksitogorsk 187650 Leningradskaya Russia PRESTIZH-STROY LLC: Creditors Must File Claims by September 30 -------------------------------------------------------------- Creditors of LLC Prestizh-Stroy-Servis(TIN 7806011924, PSRN 1027804198730) (Construction) have until September 30, 2009, to submit proofs of claims to: B. Ilyukhin Insolvency Manager Office 1204 Building 1 16 liniya V.O. Str. 7 199034 Saint-Petersburg Russia The Arbitration Court of Saint-Petersburg commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. ?56�43781/2008. The Debtor can be reached at: LLC Prestizh-Stroy-Servis Krasnogvardeyskaya Str. 2 195027 Saint-Petersburg Russia STROY-INVEST LLC: Creditors Must File Claims by September 30 ------------------------------------------------------------ Creditors of LLC Stroy-Invest (Construction) have until September 30, 2009, to submit proofs of claims to: D. Kuznetsova Insolvency Manager Office 605 Derzhavinskaya Str. 16a 392000 Tambov Russia The Arbitration Court of Saratovskaya commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. ?57�3744/09. The Debtor can be reached at: LLC Stroy-Invest Sverdlova Sq. 58 Balakovo Russia TES' OJSC: Creditors Must File Claims by September 30 ----------------------------------------------------- Creditors of OJSC Tes' (TIN 2455014804; PSRN 1022401532647) (Construction) have until September 30, 2009, to submit proofs of claims to: O. Klemeshova Insolvency Manager Post User Box 174 630077 Novosibirsk Russia The Arbitration Court of Novosibirskaya commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. ?45�867/2009. The Debtor can be reached at: OJSC Tes' Nikitina Str. 20 630009 Novosibirsl Russia GLAV-TAMBOV LLC: Tambov Bankruptcy Hearing Set September 30 ----------------------------------------------------------- The Arbitration Court of Tambov will convene on September 30, 2009, to hear bankruptcy supervision procedure on LLC Glav-Tambov- Stroy (TIN 6829037349, PSRN 1076829008860) (Construction). The case is docketed under Case No. ?64-1085/09. The Temporary Insolvency Manager is: V. Kuzin Apt. 227 Sovetskaya Str. 118 392000 Tambov Russia The Debtor can be reached at: LLC Glav-Tambov-Stroy Z. Kosmodemyanskoy Str. 1 Tambov Russia ========= S P A I N ========= CEMEX SAB: Opens GBP49 Million Cement Facility in Essex ------------------------------------------------------- CEMEX, S.A.B. de C.V. has invested GBP49 million for a cement grinding and blending facility in Thames Gateway, Essex, Building News reports. The report relates that the plant, which has been under construction for the past two years, will increase Cemex UK's cement capacity by 20%. According to the report, the basis for the products made at Tilbury is cement clinker, which is ground to a powder and blended with by-products from other industries to make cements for use in buildings and infrastructure projects. "I am immensely proud of this plant, which truly demonstrates our commitment to the construction industry and confidence that the UK economy will bounce back," the report quoted Cemex UK President Gonzalo Galindo as saying. About CEMEX SAB CEMEX, S.A.B. de C.V. is a Mexican corporation, a holding company of entities which main activities are oriented to the construction industry, through the production, marketing, distribution and sale of cement, ready-mix concrete, aggregates and other construction materials. CEMEX is a public stock corporation with variable capital (S.A.B. de C.V.) organized under the laws of the United Mexican States, or Mexico. * * * As reported in the Troubled Company Reporter-Latin America on August 19, 2009, Fitch Ratings has affirmed these ratings of Cemex, S.A.B. de C.V.: -- Foreign currency Issuer Default Rating at 'B'; -- Local currency IDR at 'B'; -- Long-term national scale rating at 'BB-(mex)'; -- MXN5 billion Certificados Bursatiles program at 'BB- (mex)'; -- MXN30 billion Programa Dual Revolvente de Certificados Bursatiles program at 'BB-(mex)'; -- Senior unsecured debt obligations at 'B+/RR3'; -- Unsecured debt issued through the Certificados Bursatiles program at 'BB-(mex)'; -- Short-term national scale rating at 'B (mex)'; -- MXN2.5 billion short-term portion of Programa Dual Revolvente de Certificados Bursatiles program at 'B (mex)'. IM CAJA: Moody's Confirms Rating on Class E Notes at 'C' -------------------------------------------------------- Moody's Investors Service has confirmed the ratings on these notes issued by IM CAJA LABORAL 1, FTA: -- Class A, Confirmed at Aaa, previously on 29th June 2009 Placed under Review for Possible Downgrade -- Class B, Confirmed at Aa2, previously on 29th June 2009 Placed under Review for Possible Downgrade -- Class C, Confirmed at A1, previously on 29th June 2009 Paced under Review for Possible Downgrade -- Class D, Confirmed at Baa3, previously on 29th June 2009 Placed under Review for Possible Downgrade -- Class E, Confirmed at Ca, previously on 29th June 2009 Placed under Review for Possible Downgrade All the notes were placed on review for possible downgrade as a consequence of the downgrade to A3/P-2 of the long-term and short- term rating of Caja Laboral Popular Cooperativa de Credito. The action concludes the review and takes into account the remedial action put in place to cure the rating trigger breach in the transaction. As described in the press release of June 29, in this transaction the main exposure to Caja Laboral is due to its role of swap counterparty. Moody's notes that on July 29, 2009 Caja Laboral signed an amendment to the swap agreement (Anexo I-- CMOF) which is now in line with Moody's current swap criteria as described in Moody's report titled "Framework for De-Linking Hedge Counterparty Risks from Global Structured Finance Cashflow Transactions". According to the revised swap language Caja Laboral has to take a remedial action following its downgrade to A3/P-2. Caja Laboral has opted to post collateral and has entered into a credit support agreement (Estipulacion adicicional al Anexo III -- CMOF) which is in line with the collateral requirements as described in Moody's report titled "the Framework for De-linking Hedge Counterparty Risks from Global Structured Finance Cashflow Transactions." In the review Moody's has also assessed the commingling risk exposure taking into account the daily sweeps from the collection account to the reinvestment account in the name of the Fondo. Moody's notes that the frequency of collection sweeps have increased from monthly to daily following the loss of P-1 rating of Caja Laboral. The reinvestment account that was held at Caja Laboral was transferred to Banco Popular Espanol (Aa3 / P-1) after the loss of P-1 as required by the transaction documents. Considering the current amount of realized losses, and completing a roll-rate and severity analysis for the non-defaulted portion of the portfolio, Moody's has confirmed its loss expectations of 0.59% of the original balance for this transaction. Moody's has also assessed loan-by-loan information for the outstanding portfolio and has revised its MILAN Aaa credit enhancement (MILAN Aaa CE) assumption to 6%. The loss expectation and the Milan Aaa CE are the two key parameters used by Moody's to calibrate its loss distribution curve, which is one of the core inputs in the cash-flow model it uses to rate RMBS transactions. Moody's ratings address the expected loss posed to investors by the legal final maturity of the notes. Moody's ratings address only the credit risks associated with the transaction. Other risks have not been addressed, but may have a significant effect on yield to investors. SANTANDER CONSUMER: Moody's Cuts Rating on Class E Notes to 'C' --------------------------------------------------------------- Moody's Investors Service has downgraded these classes of notes issued by Santander Consumer Spain 07-2, FTA: -- EUR542.1 million Class A notes: Downgraded to Baa3 from Aa1; previously on 2 July 2009 placed on review for possible downgrade -- EUR27.0 million Class B notes Downgraded to Caa1 from A3; previously on 2 July, 2009 placed on review for possible downgrade -- EUR17.5million Class C notes Downgraded to Ca from Ba1; previously on 2 July 2009 placed on review for possible downgrade -- EUR26.5 million Class D notes Downgraded to C from B3; previously on 2 July 2009 placed on review for possible downgrade -- EUR20.0 million Class E notes Downgraded to C from Caa3; previously on 2 July 2009 placed on review for possible downgrade Moody's says that the downgrades were prompted by the rapidly deteriorated collateral performance and the stronger than expected weakening of macro-economic conditions in Spain since the last downgrade in November 2008. The rating action takes into account revised assumptions for the mean default rate, standard deviation and recovery rate to reflect the worse than expected performance. The magnitude of the downgrade reflects current credit enhancement levels, which, combined with the revised assumptions, lead to a significantly higher expected loss on the rated notes. The rapid deterioration in performance is evidenced by the swift reduction of the reserve fund from the required level of EUR20 million to EUR0 between November 2008 and August 2009. Cumulative artificial write-offs increased to 3.7% from 0.5% of original pool balance plus replenishments during the same period while 90+ delinquencies (excluding cumulative write-offs) rose to 9.9% from 6.5% of outstanding pool balance. The rapidly increasing levels of delinquent and written-off loans have resulted in the full depletion of the reserve fund and build-up in unpaid Principal Deficiencies Ledger (PDL) for an amount of EUR4.64 million as of the August 2009 reporting date. At closing, the pool balance was EUR 1 billion while as of August 2009, a pool balance of EUR608.4 million was outstanding. During its analysis, Moody's has assessed macro-economic indicators as well as information made available by Santander Consumer Finance and through investor reports from the management company Santander de Titulizacion. As part of its collateral analysis, Moody's performed a two-step approach. Firstly, forecasts for the main macro-economic drivers behind a collateral deterioration, namely, unemployment and GDP contraction, were analyzed. For instance, the unemployment rate in Spain, which could potentially surpass 20% in 2010, was assessed. Precisely, contrary to the unemployment forecast for 2009 of 13.3% at the time of the last rating action in November 2008, unemployment is now expected to reach 18.4% in 2009 and 20.7% in 2010. As of Q2 2009, the unemployment rate in Spain reached 17.9%. Secondly, the current amount of written-off loans was taken into consideration and a roll rate analysis was conducted for the non- written off pool portion with a special focus on 90+ delinquencies. Moody's adjusted the previously revised cumulative mean default rate of 7.7% to 15.0% of total securitized pool balance and the previously revised standard deviation of 2.3% to 4.5% for the lifetime of the remaining pool. This compares to a cumulative mean default rate of 4.5% and a standard deviation of 1.1% for the initial pool and a cumulative mean default rate of 5% and a standard deviation of 1.3% on the additional pools assumed at closing. The key driver behind the doubling of the cumulative mean default assumption since the last rating review is the higher than expected increase in unemployment in Spain, the higher than expected sensitivity of the pool to the increase in unemployment and the considerable deterioration in the performance of the broker originated portion of the pool. The updated loan-by-loan data that was provided to Moody's showed consumer loans to be more sensitive to changes in the economic environment in terms of 90+ delinquencies and cumulative artificial write-offs than auto loans. Furthermore, loans originated through third parties such as brokers performed worse than loans originated through SCF branches channels. To illustrate, as of August 2009, cumulative 90+ delinquencies as a percentage of original pool balance including replenishment are around 16% for the broker originated portion of the pool and around 8% for the SCF branches originated portion of the pool. The recovery rate was increased to 40% from 30% to reflect the lower than expected roll-rates between 90+ delinquencies and write-offs and higher than expected re-performing loans also considered in the recovery analysis. Moody's notes that re- performing loans might artificially elevate the overall recovery rate of a pool since these loans have a recovery rate of 100%. Santander Consumer Spain 07-2, FTA closed in September 2007. The transaction is backed by a portfolio of auto and consumer loans originated in Spain. The loans securitized in the portfolio were originated through various channels by SCF and third party brokers. As of closing, new and used car auto loans represented the majority of loans in the portfolio with 71%. The remaining 29% of loans were consumer loans granted to individuals. The Spanish regions with the highest pool concentration were Andalucia (23.7%), Catalunya (11.8%) and Madrid (10.8%). Moody's sector outlook for Spanish consumer ABS is negative. SANTANDER CONSUMER: Fitch Affirms Rating on Class D Notes at 'CC' ----------------------------------------------------------------- Fitch Ratings has downgraded Santander Consumer Spain Auto 07-1's auto-loan receivables-backed floating-rate notes: -- EUR1,361.73 million class A floating-rate notes affirmed at 'AAA'; Outlook Negative; Loss Severity-1 (LS-1) -- EUR78 million class B floating-rate notes downgraded to 'A-' from 'A'; Outlook Negative; LS-2 -- EUR20 million class C floating-rate notes downgraded to 'BB' from 'BBB'; Outlook Negative; LS-3 -- EUR40 million class D floating-rate notes affirmed at 'CC'; Recovery Rating at 'RR3' The rating actions took into account the worsening performance of the underlying receivables, a forecast of the continued impact of factors such as the economic downturn in Spain and the type of receivables securitized, on both the expected levels of protection available to the notes while also taking into account the expected amortization of the notes. Delinquencies, defined as 90 days past due receivables, have increased sharply since July 2008, standing at 2.3% in September 2008, when they breached the 1.5% early amortization trigger for the transaction. As of June 2009 delinquencies peaked at 6.1% of the total outstanding collateral. The default rate (defined as 18 months past due) has remained within the agency's expectations. Nonetheless, taking into consideration the large delinquency pipeline, a significant rise in defaults is expected in the forthcoming quarters. As of June 2009 the Fitch Cumulative Net Default Ratio stood at 0.25%, slightly below its 0.28% base case. The agency notes that the reserve fund has remained at its required levels since closing and that the excess spread has been stable despite rising defaults. However, given the performance of the transaction to date and the current economic environment in Spain, and especially considering the expected large increase in defaults from the transaction's different delinquency buckets, Fitch expects to see declining levels of excess spread, which will most likely impact the enhancement available to all the rated classes of notes. TDA 25: S&P Downgrades Rating on Class C Notes to 'D' ----------------------------------------------------- Standard & Poor's Ratings Services lowered to 'D' its credit rating on the class C notes issued by TDA 25, Fondo de Titulizacion de Activos following the failure to meet timely interest payment on this class of notes at yesterday's interest payment date. At the same time, S&P lowered to 'CCC' the rating on the class B notes and placed the class A notes on CreditWatch negative. Also, S&P withdrew the rating on the NAS-IO notes yesterday following full amortization. When the level of defaulted loans (defined as loans with arrears greater than 12 months) in this securitization reaches a certain percentage of the initial collateral balance, the priority of payments changes so as to postpone interest payments to the related class of notes and divert these funds to amortize the most senior class of notes. According to the trustee, as of September's IPD, cumulative defaults are 6.31% (trigger levels are 6.40%, 4.90%, and 3.90% for the class B, C, and D notes, respectively). As a result, the issuer has missed interest payments on the class C and D notes. This transaction features a structural mechanism that traps excess spread to provide for defaults. As a significant portion of loans are classified as defaulted, the transaction has fully depleted its cash reserve. This reduces the likelihood of the reserve being available to supplement any interest shortfalls. Although the class A notes now benefit from all the cash in the deal and their credit enhancement will therefore build up through deleveraging, due to the continuing portfolio deterioration S&P will now analyze whether they can still withstand S&P's 'AAA' stresses. As such, S&P placed them on CreditWatch negative. All the notes in the transaction, issued in August 2006, are backed by a portfolio of residential mortgage loans secured over properties in Spain. Banco Gallego and Credifimo E.F.C. S.A.U. originated and service the loans. Ratings List TDA 25, Fondo de Titulizacion de Activos EUR265 Million Residential Mortgage-Backed Floating-Rate Notes Ratings Lowered Rating ------ Class To From ----- -- ---- B CCC B C D CCC Rating Placed On CreditWatch Negative Rating ------ Class To From ----- -- ---- A AAA/Watch Neg AAA Rating Withdrawn Rating ------ Class To From ----- -- ---- NAS-IO NR AAA NR -- Not rated. ===================== S W I T Z E R L A N D ===================== ARTEPRINTAS GMBH: Claims Filing Deadline is October 14 ------------------------------------------------------ Creditors of ARTEPRINTAS GMBH are requested to file their proofs of claim by October 14, 2009, to: S. Marinello Wuelflingerstr. 235b 8401 Winterthur Switzerland The company is currently undergoing liquidation in Winterthur. The decision about liquidation was accepted at a shareholders' meeting held on April 28, 2009. EGOW CONSULTING: Claims Filing Deadline is October 9 ---------------------------------------------------- Creditors of EGOW Consulting GmbH are requested to file their proofs of claim by October 9, 2009, to: Erich Ott Liquidator Im Cheracker 14 8506 Lanzenneunforn Switzerland The company is currently undergoing liquidation in Felben- Wellhausen. The decision about liquidation was accepted at an extraordinary shareholders' meeting held on February 17, 2009. ZEKA HOLDING: Claims Filing Deadline is October 30 -------------------------------------------------- Creditors of ZEKA Holding AG are requested to file their proofs of claim by October 30, 2009, to: lic.iur. Nikola Bellofatto Wiesenstrasse 10 8032 Zurich Switzerland The company is currently undergoing liquidation in Zug. The decision about liquidation was accepted at an extraordinary general meeting held on June 11, 2009. =========== T U R K E Y =========== ALBARAKA TURK: S&P Puts Stable Outlook on Counterparty Credit Rtng ------------------------------------------------------------------ Standard & Poor's Ratings Services said that it revised its outlooks on seven Turkish financial institutions and one operating holding company. The outlooks on these entities were revised to stable from negative: * Albaraka Turk Katilim Bankasi AS, * Dogus Holding A.S., * Garanti Finansal Kiralama A.S., * HSBC Bank A.S., * Turkiye Garanti Bankasi A.S., * Turkiye Is Bankasi A.S., * Turkiye Vakiflar Bankasi T.A.O., and * Yapi ve Kredi Bankasi A.S. At the same time, the 'BB-/B' long- and short-term counterparty credit ratings on Isbank, Garanti Leasing, YapiKredi, VakifBank, Albaraka Turk, and Dogus Holding were affirmed. Furthermore, the 'BB-' long-term counterparty credit rating on Garanti and the 'BB/ B' long- and short-term counterparty credit ratings on HSBC Bank A.S. were affirmed. Additionally, the Turkish long-term national scale ratings on Isbank, VakifBank, and YapiKredi were raised to 'trA+' from 'trA', and the Turkish long-term national scale rating on HSBC Bank A.S. was raised to 'trAA+' from 'trAA'. The 'trA-1' short-term national scale rating on Isbank, VakifBank, YapiKredi, and HSBC Bank A.S. was affirmed. The outlook revisions follow that on the sovereign, the Republic of Turkey (foreign currency, BB-/Stable/B; local currency, BB/Stable/B), reflecting the easing in external financing risks. The outlooks also factor in the publication of the government's medium-term fiscal plan, which S&P believes reduces uncertainty regarding the fiscal trajectory in Turkey. Turkish banks are proving to be quite resilient to the deterioration in their operating environment, although scope for more significant deterioration in asset quality exists as the economic slowdown persists. Turkish banks have been able to maintain adequate financial performance in recent quarters and successfully tapped foreign markets to refinance their wholesale debt. The slowdown in business volumes has been largely compensated by increased interest margins following sharp interest rate cuts by the central bank of Turkey. Despite moderate setbacks to asset quality, rated Turkish banks' inherent business and financial strengths encapsulate built-in resilience, following several years of major restructuring, the increased presence of foreign banks, and a more sound regulatory environment. Turkish banks' financial performance and fundamentals will remain highly correlated with sovereign creditworthiness through, among other things, their significant holdings of government securities and exposure to the domestic economic and financial environment. The stable outlook on these financial institutions mirrors that on Turkey. If confidence or the domestic economic environment deteriorates more than expected, it will put additional pressure on banks' asset quality and financial performance, putting pressure on their ratings. Conversely, the ratings on the banks could gain positive momentum if Turkey succeeds in putting public finances on a sustained path of fiscal consolidation, as this would create a more supportive environment. Ratings List Albaraka Turk Katilim Bankasi AS Counterparty credit rating To From -- ---- BB-/Stable/B BB-/Negative/B Certificates of deposit To From -- ---- BB-/B BB-/B Dogus Holding A.S. Counterparty credit rating To From -- ---- BB-/Stable/B BB-/Negative/B Garanti Finansal Kiralama A.S. Counterparty credit rating To From -- ---- BB-/Stable/B BB-/Negative/B HSBC Bank A.S. Counterparty credit rating To From -- ---- BB/Stable/B BB/Negative/B Certificates of deposit To From -- ---- BB/B BB/B Long-term Turkish national scale rating To From -- ---- trAA+ trAA Short-term Turkish national scale rating To From -- ---- trA-1 trA-1 Turkiye Garanti Bankasi A.S. Counterparty credit rating To From -- ---- BB-/Stable/-- BB-/Negative/-- Certificates of deposit To From -- ---- BB- BB- Turkiye Is Bankasi A.S. Counterparty credit rating To From -- ---- BB-/Stable/B BB-/Negative/B Certificates of deposit To From -- ---- BB-/B BB-/B Long-term Turkish national scale rating To From -- ---- trA+ trA Short-term Turkish national scale rating To From -- ---- trA-1 trA-1 Turkiye Vakiflar Bankasi T.A.O. Counterparty credit rating To From -- ---- BB-/Stable/B BB-/Negative/B Certificates of deposit To From -- ---- BB-/B BB-/B Long-term Turkish national scale rating To From -- ---- trA+ trA Short-term Turkish national scale rating To From -- ---- trA-1 trA-1 Yapi ve Kredi Bankasi A.S. Counterparty credit rating To From -- ---- BB-/Stable/B BB-/Negative/B Certificates of deposit To From -- ---- BB-/B BB-/B Long-term Turkish national scale rating To From -- ---- trA+ trA Short-term Turkish national scale rating To From -- ---- trA-1 trA-1 DOGUS HOLDING: S&P Puts Stable Outlook on Counterparty Credit Rtng ------------------------------------------------------------------ Standard & Poor's Ratings Services said that it revised its outlooks on seven Turkish financial institutions and one operating holding company. The outlooks on these entities were revised to stable from negative: * Albaraka Turk Katilim Bankasi AS, * Dogus Holding A.S., * Garanti Finansal Kiralama A.S., * HSBC Bank A.S., * Turkiye Garanti Bankasi A.S., * Turkiye Is Bankasi A.S., * Turkiye Vakiflar Bankasi T.A.O., and * Yapi ve Kredi Bankasi A.S. At the same time, the 'BB-/B' long- and short-term counterparty credit ratings on Isbank, Garanti Leasing, YapiKredi, VakifBank, Albaraka Turk, and Dogus Holding were affirmed. Furthermore, the 'BB-' long-term counterparty credit rating on Garanti and the 'BB/ B' long- and short-term counterparty credit ratings on HSBC Bank A.S. were affirmed. Additionally, the Turkish long-term national scale ratings on Isbank, VakifBank, and YapiKredi were raised to 'trA+' from 'trA', and the Turkish long-term national scale rating on HSBC Bank A.S. was raised to 'trAA+' from 'trAA'. The 'trA-1' short-term national scale rating on Isbank, VakifBank, YapiKredi, and HSBC Bank A.S. was affirmed. The outlook revisions follow that on the sovereign, the Republic of Turkey (foreign currency, BB-/Stable/B; local currency, BB/Stable/B), reflecting the easing in external financing risks. The outlooks also factor in the publication of the government's medium-term fiscal plan, which S&P believes reduces uncertainty regarding the fiscal trajectory in Turkey. Turkish banks are proving to be quite resilient to the deterioration in their operating environment, although scope for more significant deterioration in asset quality exists as the economic slowdown persists. Turkish banks have been able to maintain adequate financial performance in recent quarters and successfully tapped foreign markets to refinance their wholesale debt. The slowdown in business volumes has been largely compensated by increased interest margins following sharp interest rate cuts by the central bank of Turkey. Despite moderate setbacks to asset quality, rated Turkish banks' inherent business and financial strengths encapsulate built-in resilience, following several years of major restructuring, the increased presence of foreign banks, and a more sound regulatory environment. Turkish banks' financial performance and fundamentals will remain highly correlated with sovereign creditworthiness through, among other things, their significant holdings of government securities and exposure to the domestic economic and financial environment. The stable outlook on these financial institutions mirrors that on Turkey. If confidence or the domestic economic environment deteriorates more than expected, it will put additional pressure on banks' asset quality and financial performance, putting pressure on their ratings. Conversely, the ratings on the banks could gain positive momentum if Turkey succeeds in putting public finances on a sustained path of fiscal consolidation, as this would create a more supportive environment. Ratings List Albaraka Turk Katilim Bankasi AS Counterparty credit rating To From -- ---- BB-/Stable/B BB-/Negative/B Certificates of deposit To From -- ---- BB-/B BB-/B Dogus Holding A.S. Counterparty credit rating To From -- ---- BB-/Stable/B BB-/Negative/B Garanti Finansal Kiralama A.S. Counterparty credit rating To From -- ---- BB-/Stable/B BB-/Negative/B HSBC Bank A.S. Counterparty credit rating To From -- ---- BB/Stable/B BB/Negative/B Certificates of deposit To From -- ---- BB/B BB/B Long-term Turkish national scale rating To From -- ---- trAA+ trAA Short-term Turkish national scale rating To From -- ---- trA-1 trA-1 Turkiye Garanti Bankasi A.S. Counterparty credit rating To From -- ---- BB-/Stable/-- BB-/Negative/-- Certificates of deposit To From -- ---- BB- BB- Turkiye Is Bankasi A.S. Counterparty credit rating To From -- ---- BB-/Stable/B BB-/Negative/B Certificates of deposit To From -- ---- BB-/B BB-/B Long-term Turkish national scale rating To From -- ---- trA+ trA Short-term Turkish national scale rating To From -- ---- trA-1 trA-1 Turkiye Vakiflar Bankasi T.A.O. Counterparty credit rating To From -- ---- BB-/Stable/B BB-/Negative/B Certificates of deposit To From -- ---- BB-/B BB-/B Long-term Turkish national scale rating To From -- ---- trA+ trA Short-term Turkish national scale rating To From -- ---- trA-1 trA-1 Yapi ve Kredi Bankasi A.S. Counterparty credit rating To From -- ---- BB-/Stable/B BB-/Negative/B Certificates of deposit To From -- ---- BB-/B BB-/B Long-term Turkish national scale rating To From -- ---- trA+ trA Short-term Turkish national scale rating To From -- ---- trA-1 trA-1 GARANTI: S&P Puts Stable Outlook on Counterparty Credit Rating -------------------------------------------------------------- Standard & Poor's Ratings Services said that it revised its outlooks on seven Turkish financial institutions and one operating holding company. The outlooks on these entities were revised to stable from negative: * Albaraka Turk Katilim Bankasi AS, * Dogus Holding A.S., * Garanti Finansal Kiralama A.S., * HSBC Bank A.S., * Turkiye Garanti Bankasi A.S., * Turkiye Is Bankasi A.S., * Turkiye Vakiflar Bankasi T.A.O., and * Yapi ve Kredi Bankasi A.S. At the same time, the 'BB-/B' long- and short-term counterparty credit ratings on Isbank, Garanti Leasing, YapiKredi, VakifBank, Albaraka Turk, and Dogus Holding were affirmed. Furthermore, the 'BB-' long-term counterparty credit rating on Garanti and the 'BB/ B' long- and short-term counterparty credit ratings on HSBC Bank A.S. were affirmed. Additionally, the Turkish long-term national scale ratings on Isbank, VakifBank, and YapiKredi were raised to 'trA+' from 'trA', and the Turkish long-term national scale rating on HSBC Bank A.S. was raised to 'trAA+' from 'trAA'. The 'trA-1' short-term national scale rating on Isbank, VakifBank, YapiKredi, and HSBC Bank A.S. was affirmed. The outlook revisions follow that on the sovereign, the Republic of Turkey (foreign currency, BB-/Stable/B; local currency, BB/Stable/B), reflecting the easing in external financing risks. The outlooks also factor in the publication of the government's medium-term fiscal plan, which S&P believes reduces uncertainty regarding the fiscal trajectory in Turkey. Turkish banks are proving to be quite resilient to the deterioration in their operating environment, although scope for more significant deterioration in asset quality exists as the economic slowdown persists. Turkish banks have been able to maintain adequate financial performance in recent quarters and successfully tapped foreign markets to refinance their wholesale debt. The slowdown in business volumes has been largely compensated by increased interest margins following sharp interest rate cuts by the central bank of Turkey. Despite moderate setbacks to asset quality, rated Turkish banks' inherent business and financial strengths encapsulate built-in resilience, following several years of major restructuring, the increased presence of foreign banks, and a more sound regulatory environment. Turkish banks' financial performance and fundamentals will remain highly correlated with sovereign creditworthiness through, among other things, their significant holdings of government securities and exposure to the domestic economic and financial environment. The stable outlook on these financial institutions mirrors that on Turkey. If confidence or the domestic economic environment deteriorates more than expected, it will put additional pressure on banks' asset quality and financial performance, putting pressure on their ratings. Conversely, the ratings on the banks could gain positive momentum if Turkey succeeds in putting public finances on a sustained path of fiscal consolidation, as this would create a more supportive environment. Ratings List Albaraka Turk Katilim Bankasi AS Counterparty credit rating To From -- ---- BB-/Stable/B BB-/Negative/B Certificates of deposit To From -- ---- BB-/B BB-/B Dogus Holding A.S. Counterparty credit rating To From -- ---- BB-/Stable/B BB-/Negative/B Garanti Finansal Kiralama A.S. Counterparty credit rating To From -- ---- BB-/Stable/B BB-/Negative/B HSBC Bank A.S. Counterparty credit rating To From -- ---- BB/Stable/B BB/Negative/B Certificates of deposit To From -- ---- BB/B BB/B Long-term Turkish national scale rating To From -- ---- trAA+ trAA Short-term Turkish national scale rating To From -- ---- trA-1 trA-1 Turkiye Garanti Bankasi A.S. Counterparty credit rating To From -- ---- BB-/Stable/-- BB-/Negative/-- Certificates of deposit To From -- ---- BB- BB- Turkiye Is Bankasi A.S. Counterparty credit rating To From -- ---- BB-/Stable/B BB-/Negative/B Certificates of deposit To From -- ---- BB-/B BB-/B Long-term Turkish national scale rating To From -- ---- trA+ trA Short-term Turkish national scale rating To From -- ---- trA-1 trA-1 Turkiye Vakiflar Bankasi T.A.O. Counterparty credit rating To From -- ---- BB-/Stable/B BB-/Negative/B Certificates of deposit To From -- ---- BB-/B BB-/B Long-term Turkish national scale rating To From -- ---- trA+ trA Short-term Turkish national scale rating To From -- ---- trA-1 trA-1 Yapi ve Kredi Bankasi A.S. Counterparty credit rating To From -- ---- BB-/Stable/B BB-/Negative/B Certificates of deposit To From -- ---- BB-/B BB-/B Long-term Turkish national scale rating To From -- ---- trA+ trA Short-term Turkish national scale rating To From -- ---- trA-1 trA-1 HSBC BANK: S&P Puts Stable Outlook on Counterparty Credit Rating ---------------------------------------------------------------- Standard & Poor's Ratings Services said that it revised its outlooks on seven Turkish financial institutions and one operating holding company. The outlooks on these entities were revised to stable from negative: * Albaraka Turk Katilim Bankasi AS, * Dogus Holding A.S., * Garanti Finansal Kiralama A.S., * HSBC Bank A.S., * Turkiye Garanti Bankasi A.S., * Turkiye Is Bankasi A.S., * Turkiye Vakiflar Bankasi T.A.O., and * Yapi ve Kredi Bankasi A.S. At the same time, the 'BB-/B' long- and short-term counterparty credit ratings on Isbank, Garanti Leasing, YapiKredi, VakifBank, Albaraka Turk, and Dogus Holding were affirmed. Furthermore, the 'BB-' long-term counterparty credit rating on Garanti and the 'BB/ B' long- and short-term counterparty credit ratings on HSBC Bank A.S. were affirmed. Additionally, the Turkish long-term national scale ratings on Isbank, VakifBank, and YapiKredi were raised to 'trA+' from 'trA', and the Turkish long-term national scale rating on HSBC Bank A.S. was raised to 'trAA+' from 'trAA'. The 'trA-1' short-term national scale rating on Isbank, VakifBank, YapiKredi, and HSBC Bank A.S. was affirmed. The outlook revisions follow that on the sovereign, the Republic of Turkey (foreign currency, BB-/Stable/B; local currency, BB/Stable/B), reflecting the easing in external financing risks. The outlooks also factor in the publication of the government's medium-term fiscal plan, which S&P believes reduces uncertainty regarding the fiscal trajectory in Turkey. Turkish banks are proving to be quite resilient to the deterioration in their operating environment, although scope for more significant deterioration in asset quality exists as the economic slowdown persists. Turkish banks have been able to maintain adequate financial performance in recent quarters and successfully tapped foreign markets to refinance their wholesale debt. The slowdown in business volumes has been largely compensated by increased interest margins following sharp interest rate cuts by the central bank of Turkey. Despite moderate setbacks to asset quality, rated Turkish banks' inherent business and financial strengths encapsulate built-in resilience, following several years of major restructuring, the increased presence of foreign banks, and a more sound regulatory environment. Turkish banks' financial performance and fundamentals will remain highly correlated with sovereign creditworthiness through, among other things, their significant holdings of government securities and exposure to the domestic economic and financial environment. The stable outlook on these financial institutions mirrors that on Turkey. If confidence or the domestic economic environment deteriorates more than expected, it will put additional pressure on banks' asset quality and financial performance, putting pressure on their ratings. Conversely, the ratings on the banks could gain positive momentum if Turkey succeeds in putting public finances on a sustained path of fiscal consolidation, as this would create a more supportive environment. Ratings List Albaraka Turk Katilim Bankasi AS Counterparty credit rating To From -- ---- BB-/Stable/B BB-/Negative/B Certificates of deposit To From -- ---- BB-/B BB-/B Dogus Holding A.S. Counterparty credit rating To From -- ---- BB-/Stable/B BB-/Negative/B Garanti Finansal Kiralama A.S. Counterparty credit rating To From -- ---- BB-/Stable/B BB-/Negative/B HSBC Bank A.S. Counterparty credit rating To From -- ---- BB/Stable/B BB/Negative/B Certificates of deposit To From -- ---- BB/B BB/B Long-term Turkish national scale rating To From -- ---- trAA+ trAA Short-term Turkish national scale rating To From -- ---- trA-1 trA-1 Turkiye Garanti Bankasi A.S. Counterparty credit rating To From -- ---- BB-/Stable/-- BB-/Negative/-- Certificates of deposit To From -- ---- BB- BB- Turkiye Is Bankasi A.S. Counterparty credit rating To From -- ---- BB-/Stable/B BB-/Negative/B Certificates of deposit To From -- ---- BB-/B BB-/B Long-term Turkish national scale rating To From -- ---- trA+ trA Short-term Turkish national scale rating To From -- ---- trA-1 trA-1 Turkiye Vakiflar Bankasi T.A.O. Counterparty credit rating To From -- ---- BB-/Stable/B BB-/Negative/B Certificates of deposit To From -- ---- BB-/B BB-/B Long-term Turkish national scale rating To From -- ---- trA+ trA Short-term Turkish national scale rating To From -- ---- trA-1 trA-1 Yapi ve Kredi Bankasi A.S. Counterparty credit rating To From -- ---- BB-/Stable/B BB-/Negative/B Certificates of deposit To From -- ---- BB-/B BB-/B Long-term Turkish national scale rating To From -- ---- trA+ trA Short-term Turkish national scale rating To From -- ---- trA-1 trA-1 TURKIYE: S&P Puts Stable Outlook on Counterparty Credit Rating -------------------------------------------------------------- Standard & Poor's Ratings Services said that it revised its outlooks on seven Turkish financial institutions and one operating holding company. The outlooks on these entities were revised to stable from negative: * Albaraka Turk Katilim Bankasi AS, * Dogus Holding A.S., * Garanti Finansal Kiralama A.S., * HSBC Bank A.S., * Turkiye Garanti Bankasi A.S., * Turkiye Is Bankasi A.S., * Turkiye Vakiflar Bankasi T.A.O., and * Yapi ve Kredi Bankasi A.S. At the same time, the 'BB-/B' long- and short-term counterparty credit ratings on Isbank, Garanti Leasing, YapiKredi, VakifBank, Albaraka Turk, and Dogus Holding were affirmed. Furthermore, the 'BB-' long-term counterparty credit rating on Garanti and the 'BB/ B' long- and short-term counterparty credit ratings on HSBC Bank A.S. were affirmed. Additionally, the Turkish long-term national scale ratings on Isbank, VakifBank, and YapiKredi were raised to 'trA+' from 'trA', and the Turkish long-term national scale rating on HSBC Bank A.S. was raised to 'trAA+' from 'trAA'. The 'trA-1' short-term national scale rating on Isbank, VakifBank, YapiKredi, and HSBC Bank A.S. was affirmed. The outlook revisions follow that on the sovereign, the Republic of Turkey (foreign currency, BB-/Stable/B; local currency, BB/Stable/B), reflecting the easing in external financing risks. The outlooks also factor in the publication of the government's medium-term fiscal plan, which S&P believes reduces uncertainty regarding the fiscal trajectory in Turkey. Turkish banks are proving to be quite resilient to the deterioration in their operating environment, although scope for more significant deterioration in asset quality exists as the economic slowdown persists. Turkish banks have been able to maintain adequate financial performance in recent quarters and successfully tapped foreign markets to refinance their wholesale debt. The slowdown in business volumes has been largely compensated by increased interest margins following sharp interest rate cuts by the central bank of Turkey. Despite moderate setbacks to asset quality, rated Turkish banks' inherent business and financial strengths encapsulate built-in resilience, following several years of major restructuring, the increased presence of foreign banks, and a more sound regulatory environment. Turkish banks' financial performance and fundamentals will remain highly correlated with sovereign creditworthiness through, among other things, their significant holdings of government securities and exposure to the domestic economic and financial environment. The stable outlook on these financial institutions mirrors that on Turkey. If confidence or the domestic economic environment deteriorates more than expected, it will put additional pressure on banks' asset quality and financial performance, putting pressure on their ratings. Conversely, the ratings on the banks could gain positive momentum if Turkey succeeds in putting public finances on a sustained path of fiscal consolidation, as this would create a more supportive environment. Ratings List Albaraka Turk Katilim Bankasi AS Counterparty credit rating To From -- ---- BB-/Stable/B BB-/Negative/B Certificates of deposit To From -- ---- BB-/B BB-/B Dogus Holding A.S. Counterparty credit rating To From -- ---- BB-/Stable/B BB-/Negative/B Garanti Finansal Kiralama A.S. Counterparty credit rating To From -- ---- BB-/Stable/B BB-/Negative/B HSBC Bank A.S. Counterparty credit rating To From -- ---- BB/Stable/B BB/Negative/B Certificates of deposit To From -- ---- BB/B BB/B Long-term Turkish national scale rating To From -- ---- trAA+ trAA Short-term Turkish national scale rating To From -- ---- trA-1 trA-1 Turkiye Garanti Bankasi A.S. Counterparty credit rating To From -- ---- BB-/Stable/-- BB-/Negative/-- Certificates of deposit To From -- ---- BB- BB- Turkiye Is Bankasi A.S. Counterparty credit rating To From -- ---- BB-/Stable/B BB-/Negative/B Certificates of deposit To From -- ---- BB-/B BB-/B Long-term Turkish national scale rating To From -- ---- trA+ trA Short-term Turkish national scale rating To From -- ---- trA-1 trA-1 Turkiye Vakiflar Bankasi T.A.O. Counterparty credit rating To From -- ---- BB-/Stable/B BB-/Negative/B Certificates of deposit To From -- ---- BB-/B BB-/B Long-term Turkish national scale rating To From -- ---- trA+ trA Short-term Turkish national scale rating To From -- ---- trA-1 trA-1 Yapi ve Kredi Bankasi A.S. Counterparty credit rating To From -- ---- BB-/Stable/B BB-/Negative/B Certificates of deposit To From -- ---- BB-/B BB-/B Long-term Turkish national scale rating To From -- ---- trA+ trA Short-term Turkish national scale rating To From -- ---- trA-1 trA-1 TURKIYE IS: S&P Puts Stable Outlook on Counterparty Credit Rating ----------------------------------------------------------------- Standard & Poor's Ratings Services said that it revised its outlooks on seven Turkish financial institutions and one operating holding company. The outlooks on these entities were revised to stable from negative: * Albaraka Turk Katilim Bankasi AS, * Dogus Holding A.S., * Garanti Finansal Kiralama A.S., * HSBC Bank A.S., * Turkiye Garanti Bankasi A.S., * Turkiye Is Bankasi A.S., * Turkiye Vakiflar Bankasi T.A.O., and * Yapi ve Kredi Bankasi A.S. At the same time, the 'BB-/B' long- and short-term counterparty credit ratings on Isbank, Garanti Leasing, YapiKredi, VakifBank, Albaraka Turk, and Dogus Holding were affirmed. Furthermore, the 'BB-' long-term counterparty credit rating on Garanti and the 'BB/ B' long- and short-term counterparty credit ratings on HSBC Bank A.S. were affirmed. Additionally, the Turkish long-term national scale ratings on Isbank, VakifBank, and YapiKredi were raised to 'trA+' from 'trA', and the Turkish long-term national scale rating on HSBC Bank A.S. was raised to 'trAA+' from 'trAA'. The 'trA-1' short-term national scale rating on Isbank, VakifBank, YapiKredi, and HSBC Bank A.S. was affirmed. The outlook revisions follow that on the sovereign, the Republic of Turkey (foreign currency, BB-/Stable/B; local currency, BB/Stable/B), reflecting the easing in external financing risks. The outlooks also factor in the publication of the government's medium-term fiscal plan, which S&P believes reduces uncertainty regarding the fiscal trajectory in Turkey. Turkish banks are proving to be quite resilient to the deterioration in their operating environment, although scope for more significant deterioration in asset quality exists as the economic slowdown persists. Turkish banks have been able to maintain adequate financial performance in recent quarters and successfully tapped foreign markets to refinance their wholesale debt. The slowdown in business volumes has been largely compensated by increased interest margins following sharp interest rate cuts by the central bank of Turkey. Despite moderate setbacks to asset quality, rated Turkish banks' inherent business and financial strengths encapsulate built-in resilience, following several years of major restructuring, the increased presence of foreign banks, and a more sound regulatory environment. Turkish banks' financial performance and fundamentals will remain highly correlated with sovereign creditworthiness through, among other things, their significant holdings of government securities and exposure to the domestic economic and financial environment. The stable outlook on these financial institutions mirrors that on Turkey. If confidence or the domestic economic environment deteriorates more than expected, it will put additional pressure on banks' asset quality and financial performance, putting pressure on their ratings. Conversely, the ratings on the banks could gain positive momentum if Turkey succeeds in putting public finances on a sustained path of fiscal consolidation, as this would create a more supportive environment. Ratings List Albaraka Turk Katilim Bankasi AS Counterparty credit rating To From -- ---- BB-/Stable/B BB-/Negative/B Certificates of deposit To From -- ---- BB-/B BB-/B Dogus Holding A.S. Counterparty credit rating To From -- ---- BB-/Stable/B BB-/Negative/B Garanti Finansal Kiralama A.S. Counterparty credit rating To From -- ---- BB-/Stable/B BB-/Negative/B HSBC Bank A.S. Counterparty credit rating To From -- ---- BB/Stable/B BB/Negative/B Certificates of deposit To From -- ---- BB/B BB/B Long-term Turkish national scale rating To From -- ---- trAA+ trAA Short-term Turkish national scale rating To From -- ---- trA-1 trA-1 Turkiye Garanti Bankasi A.S. Counterparty credit rating To From -- ---- BB-/Stable/-- BB-/Negative/-- Certificates of deposit To From -- ---- BB- BB- Turkiye Is Bankasi A.S. Counterparty credit rating To From -- ---- BB-/Stable/B BB-/Negative/B Certificates of deposit To From -- ---- BB-/B BB-/B Long-term Turkish national scale rating To From -- ---- trA+ trA Short-term Turkish national scale rating To From -- ---- trA-1 trA-1 Turkiye Vakiflar Bankasi T.A.O. Counterparty credit rating To From -- ---- BB-/Stable/B BB-/Negative/B Certificates of deposit To From -- ---- BB-/B BB-/B Long-term Turkish national scale rating To From -- ---- trA+ trA Short-term Turkish national scale rating To From -- ---- trA-1 trA-1 Yapi ve Kredi Bankasi A.S. Counterparty credit rating To From -- ---- BB-/Stable/B BB-/Negative/B Certificates of deposit To From -- ---- BB-/B BB-/B Long-term Turkish national scale rating To From -- ---- trA+ trA Short-term Turkish national scale rating To From -- ---- trA-1 trA-1 TURKIYE VAKIFLAR: S&P Puts Stable Outlook on Credit Rating ---------------------------------------------------------- Standard & Poor's Ratings Services said that it revised its outlooks on seven Turkish financial institutions and one operating holding company. The outlooks on these entities were revised to stable from negative: * Albaraka Turk Katilim Bankasi AS, * Dogus Holding A.S., * Garanti Finansal Kiralama A.S., * HSBC Bank A.S., * Turkiye Garanti Bankasi A.S., * Turkiye Is Bankasi A.S., * Turkiye Vakiflar Bankasi T.A.O., and * Yapi ve Kredi Bankasi A.S. At the same time, the 'BB-/B' long- and short-term counterparty credit ratings on Isbank, Garanti Leasing, YapiKredi, VakifBank, Albaraka Turk, and Dogus Holding were affirmed. Furthermore, the 'BB-' long-term counterparty credit rating on Garanti and the 'BB/ B' long- and short-term counterparty credit ratings on HSBC Bank A.S. were affirmed. Additionally, the Turkish long-term national scale ratings on Isbank, VakifBank, and YapiKredi were raised to 'trA+' from 'trA', and the Turkish long-term national scale rating on HSBC Bank A.S. was raised to 'trAA+' from 'trAA'. The 'trA-1' short-term national scale rating on Isbank, VakifBank, YapiKredi, and HSBC Bank A.S. was affirmed. The outlook revisions follow that on the sovereign, the Republic of Turkey (foreign currency, BB-/Stable/B; local currency, BB/Stable/B), reflecting the easing in external financing risks. The outlooks also factor in the publication of the government's medium-term fiscal plan, which S&P believes reduces uncertainty regarding the fiscal trajectory in Turkey. Turkish banks are proving to be quite resilient to the deterioration in their operating environment, although scope for more significant deterioration in asset quality exists as the economic slowdown persists. Turkish banks have been able to maintain adequate financial performance in recent quarters and successfully tapped foreign markets to refinance their wholesale debt. The slowdown in business volumes has been largely compensated by increased interest margins following sharp interest rate cuts by the central bank of Turkey. Despite moderate setbacks to asset quality, rated Turkish banks' inherent business and financial strengths encapsulate built-in resilience, following several years of major restructuring, the increased presence of foreign banks, and a more sound regulatory environment. Turkish banks' financial performance and fundamentals will remain highly correlated with sovereign creditworthiness through, among other things, their significant holdings of government securities and exposure to the domestic economic and financial environment. The stable outlook on these financial institutions mirrors that on Turkey. If confidence or the domestic economic environment deteriorates more than expected, it will put additional pressure on banks' asset quality and financial performance, putting pressure on their ratings. Conversely, the ratings on the banks could gain positive momentum if Turkey succeeds in putting public finances on a sustained path of fiscal consolidation, as this would create a more supportive environment. Ratings List Albaraka Turk Katilim Bankasi AS Counterparty credit rating To From -- ---- BB-/Stable/B BB-/Negative/B Certificates of deposit To From -- ---- BB-/B BB-/B Dogus Holding A.S. Counterparty credit rating To From -- ---- BB-/Stable/B BB-/Negative/B Garanti Finansal Kiralama A.S. Counterparty credit rating To From -- ---- BB-/Stable/B BB-/Negative/B HSBC Bank A.S. Counterparty credit rating To From -- ---- BB/Stable/B BB/Negative/B Certificates of deposit To From -- ---- BB/B BB/B Long-term Turkish national scale rating To From -- ---- trAA+ trAA Short-term Turkish national scale rating To From -- ---- trA-1 trA-1 Turkiye Garanti Bankasi A.S. Counterparty credit rating To From -- ---- BB-/Stable/-- BB-/Negative/-- Certificates of deposit To From -- ---- BB- BB- Turkiye Is Bankasi A.S. Counterparty credit rating To From -- ---- BB-/Stable/B BB-/Negative/B Certificates of deposit To From -- ---- BB-/B BB-/B Long-term Turkish national scale rating To From -- ---- trA+ trA Short-term Turkish national scale rating To From -- ---- trA-1 trA-1 Turkiye Vakiflar Bankasi T.A.O. Counterparty credit rating To From -- ---- BB-/Stable/B BB-/Negative/B Certificates of deposit To From -- ---- BB-/B BB-/B Long-term Turkish national scale rating To From -- ---- trA+ trA Short-term Turkish national scale rating To From -- ---- trA-1 trA-1 Yapi ve Kredi Bankasi A.S. Counterparty credit rating To From -- ---- BB-/Stable/B BB-/Negative/B Certificates of deposit To From -- ---- BB-/B BB-/B Long-term Turkish national scale rating To From -- ---- trA+ trA Short-term Turkish national scale rating To From -- ---- trA-1 trA-1 YAPI VE: S&P Puts Stable Outlook on Counterparty Credit Rating -------------------------------------------------------------- Standard & Poor's Ratings Services said that it revised its outlooks on seven Turkish financial institutions and one operating holding company. The outlooks on these entities were revised to stable from negative: * Albaraka Turk Katilim Bankasi AS, * Dogus Holding A.S., * Garanti Finansal Kiralama A.S., * HSBC Bank A.S., * Turkiye Garanti Bankasi A.S., * Turkiye Is Bankasi A.S., * Turkiye Vakiflar Bankasi T.A.O., and * Yapi ve Kredi Bankasi A.S. At the same time, the 'BB-/B' long- and short-term counterparty credit ratings on Isbank, Garanti Leasing, YapiKredi, VakifBank, Albaraka Turk, and Dogus Holding were affirmed. Furthermore, the 'BB-' long-term counterparty credit rating on Garanti and the 'BB/ B' long- and short-term counterparty credit ratings on HSBC Bank A.S. were affirmed. Additionally, the Turkish long-term national scale ratings on Isbank, VakifBank, and YapiKredi were raised to 'trA+' from 'trA', and the Turkish long-term national scale rating on HSBC Bank A.S. was raised to 'trAA+' from 'trAA'. The 'trA-1' short-term national scale rating on Isbank, VakifBank, YapiKredi, and HSBC Bank A.S. was affirmed. The outlook revisions follow that on the sovereign, the Republic of Turkey (foreign currency, BB-/Stable/B; local currency, BB/Stable/B), reflecting the easing in external financing risks. The outlooks also factor in the publication of the government's medium-term fiscal plan, which S&P believes reduces uncertainty regarding the fiscal trajectory in Turkey. Turkish banks are proving to be quite resilient to the deterioration in their operating environment, although scope for more significant deterioration in asset quality exists as the economic slowdown persists. Turkish banks have been able to maintain adequate financial performance in recent quarters and successfully tapped foreign markets to refinance their wholesale debt. The slowdown in business volumes has been largely compensated by increased interest margins following sharp interest rate cuts by the central bank of Turkey. Despite moderate setbacks to asset quality, rated Turkish banks' inherent business and financial strengths encapsulate built-in resilience, following several years of major restructuring, the increased presence of foreign banks, and a more sound regulatory environment. Turkish banks' financial performance and fundamentals will remain highly correlated with sovereign creditworthiness through, among other things, their significant holdings of government securities and exposure to the domestic economic and financial environment. The stable outlook on these financial institutions mirrors that on Turkey. If confidence or the domestic economic environment deteriorates more than expected, it will put additional pressure on banks' asset quality and financial performance, putting pressure on their ratings. Conversely, the ratings on the banks could gain positive momentum if Turkey succeeds in putting public finances on a sustained path of fiscal consolidation, as this would create a more supportive environment. Ratings List Albaraka Turk Katilim Bankasi AS Counterparty credit rating To From -- ---- BB-/Stable/B BB-/Negative/B Certificates of deposit To From -- ---- BB-/B BB-/B Dogus Holding A.S. Counterparty credit rating To From -- ---- BB-/Stable/B BB-/Negative/B Garanti Finansal Kiralama A.S. Counterparty credit rating To From -- ---- BB-/Stable/B BB-/Negative/B HSBC Bank A.S. Counterparty credit rating To From -- ---- BB/Stable/B BB/Negative/B Certificates of deposit To From -- ---- BB/B BB/B Long-term Turkish national scale rating To From -- ---- trAA+ trAA Short-term Turkish national scale rating To From -- ---- trA-1 trA-1 Turkiye Garanti Bankasi A.S. Counterparty credit rating To From -- ---- BB-/Stable/-- BB-/Negative/-- Certificates of deposit To From -- ---- BB- BB- Turkiye Is Bankasi A.S. Counterparty credit rating To From -- ---- BB-/Stable/B BB-/Negative/B Certificates of deposit To From -- ---- BB-/B BB-/B Long-term Turkish national scale rating To From -- ---- trA+ trA Short-term Turkish national scale rating To From -- ---- trA-1 trA-1 Turkiye Vakiflar Bankasi T.A.O. Counterparty credit rating To From -- ---- BB-/Stable/B BB-/Negative/B Certificates of deposit To From -- ---- BB-/B BB-/B Long-term Turkish national scale rating To From -- ---- trA+ trA Short-term Turkish national scale rating To From -- ---- trA-1 trA-1 Yapi ve Kredi Bankasi A.S. Counterparty credit rating To From -- ---- BB-/Stable/B BB-/Negative/B Certificates of deposit To From -- ---- BB-/B BB-/B Long-term Turkish national scale rating To From -- ---- trA+ trA Short-term Turkish national scale rating To From -- ---- trA-1 trA-1 ============= U K R A I N E ============= BANK FORUM: Fitch Downgrades Individual Rating to 'E' From 'D/E' ---------------------------------------------------------------- Fitch Ratings has downgraded the Individual ratings of three foreign-owned Ukrainian banks -- UkrSibbank, Ukrsotsbank and Forum -- to 'E' from 'D/E', reflecting ongoing asset quality deterioration. At the same time, the agency has affirmed the Individual ratings of three other foreign-owned Ukrainian banks -- ProCredit Ukraine at 'D/E' and Pravex and VTB Ukraine at 'E'. The agency has also affirmed the foreign currency Long-term Issuer Default Ratings of all six banks at 'B' with a Negative Outlook, reflecting the potential for support from the banks' foreign shareholders. A full list of rating actions is provided at the end of this commentary. Fitch's rating actions took into account the significant deterioration in asset quality metrics during H109 following the large depreciation of the UAH in Q408 and the sharp economic downturn, and the potential for further increases in loan impairments. Fitch notes, in particular, the high share of foreign currency loans (59% at Pravex; 80%-85% at the other five banks) and significant exposure to the retail segment (with the exceptions of ProCredit Ukraine and VTB Ukraine) as among the factors driving growth in NPLs (loans overdue by more than 90 days) and/or restructured and extended loans in H109. Pressure on capital remains considerable, and even following recently completed and planned capital injections, loan loss absorption capacity will remain limited, likely requiring further recapitalization support from shareholders at most of the banks. Liquidity/refinancing risks are less of a concern given the significant funding facilities available from parent banks. The banks' Long-term IDRs and National Long-term ratings are underpinned by potential support from their shareholders, in case of need. However, Ukrainian transfer and convertibility risks, as reflected in the Country Ceiling ('B'), could limit the extent to which these banks can utilize this support. UkrSibbank is almost 81%-owned by France's BNP Paribas ('AA'/Negative); Ukrsotsbank is almost 95%-owned by Italy-based UniCredit S.p.A. ('A'/Negative) through its Vienna subsidiary UniCredit Bank Austria AG ('A'/Stable); Forum is majority-owned (63%) by Germany's Commerzbank AG ('A+'/Stable); ProCredit Ukraine is 80%-owned by Germany's ProCredit Holding AG ('BBB-'/Stable); Pravex is 100%- owned by Italy's Intesa Sanpaolo S.p.A. ('AA-'/Stable) and VTB Ukraine is more than 99%-owned by Russia's JSC Bank VTB ('BBB'/Negative). Reported NPLs and restructured/extended loans at UkrSibbank amounted to 16% and 10% of gross loans, respectively, at end-H109. The regulatory capital ratio stood at 13.2% at end-August 2009 and the loan impairment reserve/gross loans ratio at 11.6%, indicating only moderate loss absorption capacity. A subordinated loan of up to US$100 million expected from the EBRD in or H209-Q110 will provide some support to UkrSibbank's regulatory capital ratio; however, equity contributions may also be required in future in light of asset quality problems. Highly liquid assets (defined as cash, balances with the National Bank of Ukraine net of obligatory reserves, net short-term interbank assets and unpledged securities eligible for refinancing with NBU) covered a comfortable 28% of client funds at end-H109 while external refinancing needs were insignificant to end-H110; parent funding represented 41% of end- H109 liabilities. Ukrsotsbank's reported NPLs increased to 18.5% of gross loans at end-H109 and restructured/extended loans to 10.4%, while the LIR/gross loans ratio was a moderate 7.9% in the end-H109 IFRS accounts. Current capitalization (regulatory capital adequacy ratio of 14.5% at mid-September 2009) offers only limited loss absorption capacity. After the recent UAH500 million capital contribution and a US$100 million subordinated loan received from the EBRD in August 2009, there are no immediate capital-raising plans, although in light of the significant pressure from growing loan impairments, more capital support could be required. Reliance on parent funding remains significant (53% of end-H109 liabilities); however, repayments of foreign borrowings other than those from the parent bank are moderate (equal to 8% of end-H109 liabilities) to end-H110. Forum's reported NPLs stood at 21.7% of gross loans at end-H109. Loan impairment coverage was only 54% of NPLs at end-H109 and the regulatory capital ratio of 15.9% at end-August 2009 therefore offers limited loss absorption capacity. Capitalization has been supported mainly by frequent equity injections from the bank's shareholders, and in July 2009 Tier 2 capital was also enhanced by a US$80 million subordinated loan from EBRD. Majority shareholders are considering injecting a further UAH1.1bn of capital by the end of 2009. Funding materially relies on the parent bank, with Commerzbank providing around 45% of non-equity funding at end-H109. ProCredit Ukraine reported NPLs at 8% of gross loans at end-H109 and restructured loans of 25%. However, Fitch has affirmed the bank's 'D/E' Individual rating in light of the reasonable performance of the restructured portfolio to date, the bank's limited exposure to more high-risk sectors (construction and retail) and reasonable (by Ukrainian market standards) risk management. ProCredit Ukraine's capital ratios improved in H109 (reported regulatory capital ratio of 14.1% at end-H109), after an equity injection of US$10 million; however, Fitch still views capitalization as tight, in view of pressure on asset quality from the challenging operating environment and the potential for further UAH depreciation. ProCredit Ukraine is 20% owned by the European Bank for Reconstruction and Development, and Kreditanstalt fuer Wiederaufbau is expected to take a stake of at least 20% in H209 through the purchase of existing shares from ProCredit Holding and contribution of new equity. Pravex's NPLs and restructured/extended loans were both substantial at end-H109, with the regulatory capital ratio (18.4% at end-H109) and LIR/gross loans ratio of 10% offering only limited loss absorption capacity. An equity injection equivalent to EUR50 million is planned for Q409; however, Pravex may need additional capital support, in particular in case of further asset quality deterioration and/or significant UAH devaluation. Large arrears also pose challenges to stand-alone liquidity management. However, the liquidity profile benefits from relatively stable customer deposits (up 6% in H109) and parent funding (26% of total liabilities at end-H109). Highly liquid assets covered a comfortable 31% of customer funds at end-H109 and there are no significant wholesale refinancing needs to end-H110. VTB Ukraine reported NPLs and restructured loans at 15% and 26%, respectively, at end-H109. A highly concentrated loan book (the top 20 groups of related borrowers represented 55% of gross loans) is another source of concern. The regulatory capital ratio increased to 18% at end-H109 following the receipt of a US$129 million subordinated loan from VTB in January 2009 and the subsequent US$100 million pre-payment of new equity (NBU considers this in capital calculations). However, the reserve coverage of NPLs is rather low under local GAAP, at only 45%, and therefore total loss absorption capacity is limited. Funding is mainly provided by VTB group, which accounted for almost 70% of liabilities. In Fitch's rating criteria, a bank's standalone risk is reflected in Fitch's Individual ratings and the prospect of external support is reflected in Fitch's Support ratings. Collectively these ratings drive Fitch's Long- and Short-term IDRs. The rating actions are: JSCIB UkrSibbank: -- Long-term foreign currency IDR: affirmed at 'B'; Outlook Negative -- Senior unsecured debt: affirmed at 'B'; Recovery Rating at 'RR4' -- Long-term local currency IDR: affirmed at 'B+'; Outlook Negative -- Short-term IDR: affirmed at 'B' -- Support Rating: affirmed at '4' -- Individual rating: downgraded to 'E' from 'D/E' -- National Long-term rating: affirmed at 'AAA(ukr)'; Outlook Stable Ukrsotsbank: -- Long-term foreign currency IDR: affirmed at 'B'; Outlook Negative -- Senior unsecured debt: affirmed at 'B'; Recovery Rating at 'RR4' -- Long-term local currency IDR: affirmed at 'B+'; Outlook Negative -- Short-term IDR: affirmed at 'B' -- Support Rating: affirmed at '4' -- Individual rating: downgraded to 'E' from 'D/E' Bank Forum: -- Long-term foreign currency IDR: affirmed at 'B'; Outlook Negative -- Senior unsecured debt: affirmed at 'B'; Recovery Rating at 'RR4' -- Long-term local currency IDR: affirmed at 'B+'; Outlook Negative -- Short-term IDR: affirmed at 'B' -- Support Rating: affirmed at '4' -- Individual rating: downgraded to 'E' from 'D/E' -- National Long-term rating: affirmed at 'AAA(ukr)'; Outlook Stable ProCredit Bank (Ukraine): -- Long-term foreign currency IDR: affirmed at 'B'; Outlook Negative -- Long-term local currency IDR: affirmed at 'B+'; Outlook Negative -- Short-term IDR: affirmed at 'B' -- Local Currency Short-term IDR: affirmed at 'B' -- Support Rating: affirmed at '4' -- Individual rating: affirmed at 'D/E' -- National Long-term rating: affirmed at 'AAA(ukr)'; Outlook Stable Pravex Bank: -- Long-term foreign currency IDR: affirmed at 'B'; Outlook Negative -- Long-term local currency IDR: affirmed at 'B+'; Outlook Negative -- Short-term IDR: affirmed at 'B' -- Support Rating: affirmed at '4' -- Individual rating: affirmed at 'E' -- National Long-term rating: affirmed at 'AAA(ukr)'; Outlook Stable JSC VTB Bank (Ukraine): -- Long-term foreign currency IDR: affirmed at 'B'; Outlook Negative -- Long-term local currency IDR: affirmed at 'B+'; Outlook Negative -- Short-term IDR: affirmed at 'B' -- Support Rating: affirmed at '4' -- Individual rating: affirmed at 'E' -- National Long-term rating: affirmed at 'AAA(ukr)'; Outlook Stable CARGO CARS: Creditors Must File Claims by September 30 ------------------------------------------------------ Creditors of LLC Cargo Cars (code EDRPOU 32864117) have until September 30, 2009, to submit proofs of claim to: M. Schekoldin Insolvency Manager Office 102-a Elektrikov Str. 29-a 04176 Kiev Ukraine The Economic Court of Kiev commenced bankruptcy proceedings against the company on August 12, 2009. The case is docketed under Case No. B11/103-09. The Court is located at: The Economic Court of Kiev Komintern Str. 16 01032 Kiev Ukraine The Debtor can be reached at: LLC Cargo Cars Dekabristov Str. 45 Vasilkov Kiev Ukraine DIS LLC: Creditors Must File Claims by September 30 ---------------------------------------------------- Creditors of LLC DIS have until September 30, 2009, to submit proofs of claim to: A. Malevany Sumy and Kiev Divisions Str. 24/2 Sumy Ukraine The Economic Court of Sumy commenced bankruptcy proceedings against the company on June 11, 2009. The case is docketed under Case No. 12/93-09. The Court is located at: The Economic Court of Sumy Shevchenko Ave. 18/1 40477 Sumy Ukraine The Debtor can be reached at: LLC DIS Vorovsky Str. 20 Sumy Ukraine HEATPIPE LLC: Creditors Must File Claims by September 30 -------------------------------------------------------- Creditors of LLC Company Heatpipe (code EDRPOU 36067363) have until September 30, 2009, to submit proofs of claim to: A. Malevany Sumy and Kiev Divisions Str. 24/2 Sumy Ukraine The Economic Court of Sumy commenced bankruptcy proceedings against the company on August 25, 2009. The case is docketed under Case No. 6/132-09. The Court is located at: The Economic Court of Sumy Shevchenko Ave. 18/1 40477 Sumy Ukraine The Debtor can be reached at: LLC Company Heatpipe Office 1 River Strelka Quay Str. 10 Sumy Ukraine DANKO SUBSIDIARY: Creditors Must File Claims by September 30 ------------------------------------------------------------ Creditors of Subsidiary Enterprise Boarding House Danko (code EDRPOU 20819742) have until September 30, 2009, to submit proofs of claim to: A. Nadlonok Insolvency Manager Zubrovskaya Str. 25a/33 79066 Lvov Ukraine The Economic Court of Lvov commenced bankruptcy proceedings against the company on July 29, 2009. The case is docketed under Case No. 31/35. The Court is located at: The Economic Court of Lvov Lichakovskaya Str. 128 79010 Lvov Ukraine The Debtor can be reached at: Subsidiary Enterprise Boarding House Danko Modrichi Drogobich 82146 Lvov Ukraine INVESTOR-96 LLC: Court Starts Bankruptcy Supervision Procedure -------------------------------------------------------------- The Economic Court of Sumy commenced bankruptcy supervision procedure on LLC Investor-96 (code EDRPOU 23635787). The Insolvency Manager is: S. Gaydukov Sumy and Kiev Divisions Str. 24/8 40000 Sumy Ukraine The Court is located at: The Economic Court of Sumy Shevchenko Ave. 18/1 40477 Sumy Ukraine The Debtor can be reached at: LLC Investor-96 Levanevsky Str. 28 40022 Sumy Ukraine KUPIANSK FOUNDRY: Creditors Must File Claims by September 27 ------------------------------------------------------------ Creditors of OJSC Kupiansk Foundry (code EDRPOU 00235967) have until September 27, 2009, to submit proofs of claim to: S. Ptushko Insolvency Manager Office 109 Leninsky komsomol quarter 4 Lugansk Ukraine The Economic Court of Kharkov commenced bankruptcy proceedings against the company on August 12, 2009. The case is docketed under Case No. B-5635/2-30. The Court is located at: The Economic Court of Kharkov Svoboda Square 5 61022 Kharkov Ukraine The Debtor can be reached at: OJSC Kupiansk Foundry Kupiansk Kharkov Ukraine NAFTOGAZ OJSC: Fitch Downgrades Issuer Default Rating to 'C' ------------------------------------------------------------ Fitch Ratings has downgraded Ukraine-based OJSC Naftogaz's Long- term foreign and local currency Issuer Default ratings to 'C' from 'CC' respectively. Both ratings remain on Rating Watch Negative. Fitch has simultaneously downgraded the senior unsecured rating on Naftogaz's US$500 million eurobond to 'C' from 'CC' and removed it from RWN. The Recovery Rating on the eurobond is 'RR4'. The downgrade reflects the recent announcements by Naftogaz and the government of Ukraine regarding their commitment to restructure all of Naftogaz's foreign currency-denominated debt. Fitch believes that it is now unlikely that the eurobond will be repaid on its maturity date (September 30, 2009) at which time the agency would expect to further downgrade Naftogaz's IDR to Restricted Default. Fitch would likely rate Naftogaz's IRD 'RD' and the eurobond 'C' during any extension period. Should a restructuring plan be agreed prior to the repayment date, or during any agreed extension period, then the rating outcome upon execution of the plan would depend on a number of factors including guarantee levels and recovery prospects for any restructured instruments. The government of Ukraine has announced that it would be prepared to consider guaranteeing restructured Naftogaz debt up to a level of US$2 billion, and has stated further that Naftogaz must complete any restructuring by October 20, 2009. Fitch will closely monitor discussions as, if an agreement is reached including a government guarantee for a substantial portion of its foreign currency-denominated debt, Fitch would expect to reflect this in its ratings. NEFTEZASCHITA LLC: Creditors Must File Claims by September 30 ------------------------------------------------------------- Creditors of LLC Neftezaschita (code EDRPOU 31722776) have until September 30, 2009, to submit proofs of claim to V. Oksanich, the company's insolvency manager. The Economic Court of Kiev commenced bankruptcy proceedings against the company on June 16, 2009. The case is docketed under Case No. 44/278-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 Neftezaschita Avtoparkovaya Str. 7 01121 Kiev Ukraine PERVOMAYSK OJSC: Court Starts Bankruptcy Supervision Procedure -------------------------------------------------------------- The Economic Court of Lugansk commenced bankruptcy supervision procedure on OJSC Pervomaysk Minebuilding Department (code EDRPOU 00181131). The Insolvency Manager is: N. Ivanova Office 3 Klubnaya Str. 55 Lugansk Ukraine The Court is located at: The Economic Court of Lugansk Heroes of GPW Square 3-a 91000 Lugansk Ukraine The Debtor can be reached at: OJSC Pervomaysk Minebuilding Department Pereyezdnaya Str. 9 Pervomaysk 93200 Lugansk Ukraine PRAVEX BANK: Fitch Affirms Individual Rating at 'E' --------------------------------------------------- Fitch Ratings has downgraded the Individual ratings of three foreign-owned Ukrainian banks -- UkrSibbank, Ukrsotsbank and Forum -- to 'E' from 'D/E', reflecting ongoing asset quality deterioration. At the same time, the agency has affirmed the Individual ratings of three other foreign-owned Ukrainian banks -- ProCredit Ukraine at 'D/E' and Pravex and VTB Ukraine at 'E'. The agency has also affirmed the foreign currency Long-term Issuer Default Ratings of all six banks at 'B' with a Negative Outlook, reflecting the potential for support from the banks' foreign shareholders. A full list of rating actions is provided at the end of this commentary. Fitch's rating actions took into account the significant deterioration in asset quality metrics during H109 following the large depreciation of the UAH in Q408 and the sharp economic downturn, and the potential for further increases in loan impairments. Fitch notes, in particular, the high share of foreign currency loans (59% at Pravex; 80%-85% at the other five banks) and significant exposure to the retail segment (with the exceptions of ProCredit Ukraine and VTB Ukraine) as among the factors driving growth in NPLs (loans overdue by more than 90 days) and/or restructured and extended loans in H109. Pressure on capital remains considerable, and even following recently completed and planned capital injections, loan loss absorption capacity will remain limited, likely requiring further recapitalization support from shareholders at most of the banks. Liquidity/refinancing risks are less of a concern given the significant funding facilities available from parent banks. The banks' Long-term IDRs and National Long-term ratings are underpinned by potential support from their shareholders, in case of need. However, Ukrainian transfer and convertibility risks, as reflected in the Country Ceiling ('B'), could limit the extent to which these banks can utilize this support. UkrSibbank is almost 81%-owned by France's BNP Paribas ('AA'/Negative); Ukrsotsbank is almost 95%-owned by Italy-based UniCredit S.p.A. ('A'/Negative) through its Vienna subsidiary UniCredit Bank Austria AG ('A'/Stable); Forum is majority-owned (63%) by Germany's Commerzbank AG ('A+'/Stable); ProCredit Ukraine is 80%-owned by Germany's ProCredit Holding AG ('BBB-'/Stable); Pravex is 100%- owned by Italy's Intesa Sanpaolo S.p.A. ('AA-'/Stable) and VTB Ukraine is more than 99%-owned by Russia's JSC Bank VTB ('BBB'/Negative). Reported NPLs and restructured/extended loans at UkrSibbank amounted to 16% and 10% of gross loans, respectively, at end-H109. The regulatory capital ratio stood at 13.2% at end-August 2009 and the loan impairment reserve/gross loans ratio at 11.6%, indicating only moderate loss absorption capacity. A subordinated loan of up to US$100 million expected from the EBRD in or H209-Q110 will provide some support to UkrSibbank's regulatory capital ratio; however, equity contributions may also be required in future in light of asset quality problems. Highly liquid assets (defined as cash, balances with the National Bank of Ukraine net of obligatory reserves, net short-term interbank assets and unpledged securities eligible for refinancing with NBU) covered a comfortable 28% of client funds at end-H109 while external refinancing needs were insignificant to end-H110; parent funding represented 41% of end- H109 liabilities. Ukrsotsbank's reported NPLs increased to 18.5% of gross loans at end-H109 and restructured/extended loans to 10.4%, while the LIR/gross loans ratio was a moderate 7.9% in the end-H109 IFRS accounts. Current capitalization (regulatory capital adequacy ratio of 14.5% at mid-September 2009) offers only limited loss absorption capacity. After the recent UAH500 million capital contribution and a US$100 million subordinated loan received from the EBRD in August 2009, there are no immediate capital-raising plans, although in light of the significant pressure from growing loan impairments, more capital support could be required. Reliance on parent funding remains significant (53% of end-H109 liabilities); however, repayments of foreign borrowings other than those from the parent bank are moderate (equal to 8% of end-H109 liabilities) to end-H110. Forum's reported NPLs stood at 21.7% of gross loans at end-H109. Loan impairment coverage was only 54% of NPLs at end-H109 and the regulatory capital ratio of 15.9% at end-August 2009 therefore offers limited loss absorption capacity. Capitalization has been supported mainly by frequent equity injections from the bank's shareholders, and in July 2009 Tier 2 capital was also enhanced by a US$80 million subordinated loan from EBRD. Majority shareholders are considering injecting a further UAH1.1bn of capital by the end of 2009. Funding materially relies on the parent bank, with Commerzbank providing around 45% of non-equity funding at end-H109. ProCredit Ukraine reported NPLs at 8% of gross loans at end-H109 and restructured loans of 25%. However, Fitch has affirmed the bank's 'D/E' Individual rating in light of the reasonable performance of the restructured portfolio to date, the bank's limited exposure to more high-risk sectors (construction and retail) and reasonable (by Ukrainian market standards) risk management. ProCredit Ukraine's capital ratios improved in H109 (reported regulatory capital ratio of 14.1% at end-H109), after an equity injection of US$10 million; however, Fitch still views capitalization as tight, in view of pressure on asset quality from the challenging operating environment and the potential for further UAH depreciation. ProCredit Ukraine is 20% owned by the European Bank for Reconstruction and Development, and Kreditanstalt fuer Wiederaufbau is expected to take a stake of at least 20% in H209 through the purchase of existing shares from ProCredit Holding and contribution of new equity. Pravex's NPLs and restructured/extended loans were both substantial at end-H109, with the regulatory capital ratio (18.4% at end-H109) and LIR/gross loans ratio of 10% offering only limited loss absorption capacity. An equity injection equivalent to EUR50 million is planned for Q409; however, Pravex may need additional capital support, in particular in case of further asset quality deterioration and/or significant UAH devaluation. Large arrears also pose challenges to stand-alone liquidity management. However, the liquidity profile benefits from relatively stable customer deposits (up 6% in H109) and parent funding (26% of total liabilities at end-H109). Highly liquid assets covered a comfortable 31% of customer funds at end-H109 and there are no significant wholesale refinancing needs to end-H110. VTB Ukraine reported NPLs and restructured loans at 15% and 26%, respectively, at end-H109. A highly concentrated loan book (the top 20 groups of related borrowers represented 55% of gross loans) is another source of concern. The regulatory capital ratio increased to 18% at end-H109 following the receipt of a US$129 million subordinated loan from VTB in January 2009 and the subsequent US$100 million pre-payment of new equity (NBU considers this in capital calculations). However, the reserve coverage of NPLs is rather low under local GAAP, at only 45%, and therefore total loss absorption capacity is limited. Funding is mainly provided by VTB group, which accounted for almost 70% of liabilities. In Fitch's rating criteria, a bank's standalone risk is reflected in Fitch's Individual ratings and the prospect of external support is reflected in Fitch's Support ratings. Collectively these ratings drive Fitch's Long- and Short-term IDRs. The rating actions are: JSCIB UkrSibbank: -- Long-term foreign currency IDR: affirmed at 'B'; Outlook Negative -- Senior unsecured debt: affirmed at 'B'; Recovery Rating at 'RR4' -- Long-term local currency IDR: affirmed at 'B+'; Outlook Negative -- Short-term IDR: affirmed at 'B' -- Support Rating: affirmed at '4' -- Individual rating: downgraded to 'E' from 'D/E' -- National Long-term rating: affirmed at 'AAA(ukr)'; Outlook Stable Ukrsotsbank: -- Long-term foreign currency IDR: affirmed at 'B'; Outlook Negative -- Senior unsecured debt: affirmed at 'B'; Recovery Rating at 'RR4' -- Long-term local currency IDR: affirmed at 'B+'; Outlook Negative -- Short-term IDR: affirmed at 'B' -- Support Rating: affirmed at '4' -- Individual rating: downgraded to 'E' from 'D/E' Bank Forum: -- Long-term foreign currency IDR: affirmed at 'B'; Outlook Negative -- Senior unsecured debt: affirmed at 'B'; Recovery Rating at 'RR4' -- Long-term local currency IDR: affirmed at 'B+'; Outlook Negative -- Short-term IDR: affirmed at 'B' -- Support Rating: affirmed at '4' -- Individual rating: downgraded to 'E' from 'D/E' -- National Long-term rating: affirmed at 'AAA(ukr)'; Outlook Stable ProCredit Bank (Ukraine): -- Long-term foreign currency IDR: affirmed at 'B'; Outlook Negative -- Long-term local currency IDR: affirmed at 'B+'; Outlook Negative -- Short-term IDR: affirmed at 'B' -- Local Currency Short-term IDR: affirmed at 'B' -- Support Rating: affirmed at '4' -- Individual rating: affirmed at 'D/E' -- National Long-term rating: affirmed at 'AAA(ukr)'; Outlook Stable Pravex Bank: -- Long-term foreign currency IDR: affirmed at 'B'; Outlook Negative -- Long-term local currency IDR: affirmed at 'B+'; Outlook Negative -- Short-term IDR: affirmed at 'B' -- Support Rating: affirmed at '4' -- Individual rating: affirmed at 'E' -- National Long-term rating: affirmed at 'AAA(ukr)'; Outlook Stable JSC VTB Bank (Ukraine): -- Long-term foreign currency IDR: affirmed at 'B'; Outlook Negative -- Long-term local currency IDR: affirmed at 'B+'; Outlook Negative -- Short-term IDR: affirmed at 'B' -- Support Rating: affirmed at '4' -- Individual rating: affirmed at 'E' -- National Long-term rating: affirmed at 'AAA(ukr)'; Outlook Stable PROCREDIT UKRAINE: Fitch Affirms Individual Rating at 'D/E' ----------------------------------------------------------- Fitch Ratings has downgraded the Individual ratings of three foreign-owned Ukrainian banks -- UkrSibbank, Ukrsotsbank and Forum -- to 'E' from 'D/E', reflecting ongoing asset quality deterioration. At the same time, the agency has affirmed the Individual ratings of three other foreign-owned Ukrainian banks -- ProCredit Ukraine at 'D/E' and Pravex and VTB Ukraine at 'E'. The agency has also affirmed the foreign currency Long-term Issuer Default Ratings of all six banks at 'B' with a Negative Outlook, reflecting the potential for support from the banks' foreign shareholders. A full list of rating actions is provided at the end of this commentary. Fitch's rating actions took into account the significant deterioration in asset quality metrics during H109 following the large depreciation of the UAH in Q408 and the sharp economic downturn, and the potential for further increases in loan impairments. Fitch notes, in particular, the high share of foreign currency loans (59% at Pravex; 80%-85% at the other five banks) and significant exposure to the retail segment (with the exceptions of ProCredit Ukraine and VTB Ukraine) as among the factors driving growth in NPLs (loans overdue by more than 90 days) and/or restructured and extended loans in H109. Pressure on capital remains considerable, and even following recently completed and planned capital injections, loan loss absorption capacity will remain limited, likely requiring further recapitalization support from shareholders at most of the banks. Liquidity/refinancing risks are less of a concern given the significant funding facilities available from parent banks. The banks' Long-term IDRs and National Long-term ratings are underpinned by potential support from their shareholders, in case of need. However, Ukrainian transfer and convertibility risks, as reflected in the Country Ceiling ('B'), could limit the extent to which these banks can utilize this support. UkrSibbank is almost 81%-owned by France's BNP Paribas ('AA'/Negative); Ukrsotsbank is almost 95%-owned by Italy-based UniCredit S.p.A. ('A'/Negative) through its Vienna subsidiary UniCredit Bank Austria AG ('A'/Stable); Forum is majority-owned (63%) by Germany's Commerzbank AG ('A+'/Stable); ProCredit Ukraine is 80%-owned by Germany's ProCredit Holding AG ('BBB-'/Stable); Pravex is 100%- owned by Italy's Intesa Sanpaolo S.p.A. ('AA-'/Stable) and VTB Ukraine is more than 99%-owned by Russia's JSC Bank VTB ('BBB'/Negative). Reported NPLs and restructured/extended loans at UkrSibbank amounted to 16% and 10% of gross loans, respectively, at end-H109. The regulatory capital ratio stood at 13.2% at end-August 2009 and the loan impairment reserve/gross loans ratio at 11.6%, indicating only moderate loss absorption capacity. A subordinated loan of up to US$100 million expected from the EBRD in or H209-Q110 will provide some support to UkrSibbank's regulatory capital ratio; however, equity contributions may also be required in future in light of asset quality problems. Highly liquid assets (defined as cash, balances with the National Bank of Ukraine net of obligatory reserves, net short-term interbank assets and unpledged securities eligible for refinancing with NBU) covered a comfortable 28% of client funds at end-H109 while external refinancing needs were insignificant to end-H110; parent funding represented 41% of end- H109 liabilities. Ukrsotsbank's reported NPLs increased to 18.5% of gross loans at end-H109 and restructured/extended loans to 10.4%, while the LIR/gross loans ratio was a moderate 7.9% in the end-H109 IFRS accounts. Current capitalization (regulatory capital adequacy ratio of 14.5% at mid-September 2009) offers only limited loss absorption capacity. After the recent UAH500 million capital contribution and a US$100 million subordinated loan received from the EBRD in August 2009, there are no immediate capital-raising plans, although in light of the significant pressure from growing loan impairments, more capital support could be required. Reliance on parent funding remains significant (53% of end-H109 liabilities); however, repayments of foreign borrowings other than those from the parent bank are moderate (equal to 8% of end-H109 liabilities) to end-H110. Forum's reported NPLs stood at 21.7% of gross loans at end-H109. Loan impairment coverage was only 54% of NPLs at end-H109 and the regulatory capital ratio of 15.9% at end-August 2009 therefore offers limited loss absorption capacity. Capitalization has been supported mainly by frequent equity injections from the bank's shareholders, and in July 2009 Tier 2 capital was also enhanced by a US$80 million subordinated loan from EBRD. Majority shareholders are considering injecting a further UAH1.1bn of capital by the end of 2009. Funding materially relies on the parent bank, with Commerzbank providing around 45% of non-equity funding at end-H109. ProCredit Ukraine reported NPLs at 8% of gross loans at end-H109 and restructured loans of 25%. However, Fitch has affirmed the bank's 'D/E' Individual rating in light of the reasonable performance of the restructured portfolio to date, the bank's limited exposure to more high-risk sectors (construction and retail) and reasonable (by Ukrainian market standards) risk management. ProCredit Ukraine's capital ratios improved in H109 (reported regulatory capital ratio of 14.1% at end-H109), after an equity injection of US$10 million; however, Fitch still views capitalization as tight, in view of pressure on asset quality from the challenging operating environment and the potential for further UAH depreciation. ProCredit Ukraine is 20% owned by the European Bank for Reconstruction and Development, and Kreditanstalt fuer Wiederaufbau is expected to take a stake of at least 20% in H209 through the purchase of existing shares from ProCredit Holding and contribution of new equity. Pravex's NPLs and restructured/extended loans were both substantial at end-H109, with the regulatory capital ratio (18.4% at end-H109) and LIR/gross loans ratio of 10% offering only limited loss absorption capacity. An equity injection equivalent to EUR50 million is planned for Q409; however, Pravex may need additional capital support, in particular in case of further asset quality deterioration and/or significant UAH devaluation. Large arrears also pose challenges to stand-alone liquidity management. However, the liquidity profile benefits from relatively stable customer deposits (up 6% in H109) and parent funding (26% of total liabilities at end-H109). Highly liquid assets covered a comfortable 31% of customer funds at end-H109 and there are no significant wholesale refinancing needs to end-H110. VTB Ukraine reported NPLs and restructured loans at 15% and 26%, respectively, at end-H109. A highly concentrated loan book (the top 20 groups of related borrowers represented 55% of gross loans) is another source of concern. The regulatory capital ratio increased to 18% at end-H109 following the receipt of a US$129 million subordinated loan from VTB in January 2009 and the subsequent US$100 million pre-payment of new equity (NBU considers this in capital calculations). However, the reserve coverage of NPLs is rather low under local GAAP, at only 45%, and therefore total loss absorption capacity is limited. Funding is mainly provided by VTB group, which accounted for almost 70% of liabilities. In Fitch's rating criteria, a bank's standalone risk is reflected in Fitch's Individual ratings and the prospect of external support is reflected in Fitch's Support ratings. Collectively these ratings drive Fitch's Long- and Short-term IDRs. The rating actions are: JSCIB UkrSibbank: -- Long-term foreign currency IDR: affirmed at 'B'; Outlook Negative -- Senior unsecured debt: affirmed at 'B'; Recovery Rating at 'RR4' -- Long-term local currency IDR: affirmed at 'B+'; Outlook Negative -- Short-term IDR: affirmed at 'B' -- Support Rating: affirmed at '4' -- Individual rating: downgraded to 'E' from 'D/E' -- National Long-term rating: affirmed at 'AAA(ukr)'; Outlook Stable Ukrsotsbank: -- Long-term foreign currency IDR: affirmed at 'B'; Outlook Negative -- Senior unsecured debt: affirmed at 'B'; Recovery Rating at 'RR4' -- Long-term local currency IDR: affirmed at 'B+'; Outlook Negative -- Short-term IDR: affirmed at 'B' -- Support Rating: affirmed at '4' -- Individual rating: downgraded to 'E' from 'D/E' Bank Forum: -- Long-term foreign currency IDR: affirmed at 'B'; Outlook Negative -- Senior unsecured debt: affirmed at 'B'; Recovery Rating at 'RR4' -- Long-term local currency IDR: affirmed at 'B+'; Outlook Negative -- Short-term IDR: affirmed at 'B' -- Support Rating: affirmed at '4' -- Individual rating: downgraded to 'E' from 'D/E' -- National Long-term rating: affirmed at 'AAA(ukr)'; Outlook Stable ProCredit Bank (Ukraine): -- Long-term foreign currency IDR: affirmed at 'B'; Outlook Negative -- Long-term local currency IDR: affirmed at 'B+'; Outlook Negative -- Short-term IDR: affirmed at 'B' -- Local Currency Short-term IDR: affirmed at 'B' -- Support Rating: affirmed at '4' -- Individual rating: affirmed at 'D/E' -- National Long-term rating: affirmed at 'AAA(ukr)'; Outlook Stable Pravex Bank: -- Long-term foreign currency IDR: affirmed at 'B'; Outlook Negative -- Long-term local currency IDR: affirmed at 'B+'; Outlook Negative -- Short-term IDR: affirmed at 'B' -- Support Rating: affirmed at '4' -- Individual rating: affirmed at 'E' -- National Long-term rating: affirmed at 'AAA(ukr)'; Outlook Stable JSC VTB Bank (Ukraine): -- Long-term foreign currency IDR: affirmed at 'B'; Outlook Negative -- Long-term local currency IDR: affirmed at 'B+'; Outlook Negative -- Short-term IDR: affirmed at 'B' -- Support Rating: affirmed at '4' -- Individual rating: affirmed at 'E' -- National Long-term rating: affirmed at 'AAA(ukr)'; Outlook Stable SCARLETT-CHERNIGOV LLC: Creditors Must File Claims by September 27 ------------------------------------------------------------------ Creditors of LLC Scarlett-Chernigov (code EDRPOU 35305851) have until September 27, 2009, to submit proofs of claim to: S. Zozulia Insolvency Manager Office 31 Shevchenko Blvd. 250 18000 Cherkassy Ukraine The Economic Court of Cherkassy commenced bankruptcy proceedings against the company on August 11, 2009. The Court is located at: The Economic Court of Cherkassy Shevchenko Blvd. 307 18004 Cherkassy Ukraine The Debtor can be reached at: LLC Scarlett-Chernigov Kalinin Str. 63/1 18000 Cherkassy Ukraine UKRSIBBANK JSCIB: Fitch Cuts Individual Rating to 'E' From 'D/E' ---------------------------------------------------------------- Fitch Ratings has downgraded the Individual ratings of three foreign-owned Ukrainian banks -- UkrSibbank, Ukrsotsbank and Forum -- to 'E' from 'D/E', reflecting ongoing asset quality deterioration. At the same time, the agency has affirmed the Individual ratings of three other foreign-owned Ukrainian banks -- ProCredit Ukraine at 'D/E' and Pravex and VTB Ukraine at 'E'. The agency has also affirmed the foreign currency Long-term Issuer Default Ratings of all six banks at 'B' with a Negative Outlook, reflecting the potential for support from the banks' foreign shareholders. A full list of rating actions is provided at the end of this commentary. Fitch's rating actions took into account the significant deterioration in asset quality metrics during H109 following the large depreciation of the UAH in Q408 and the sharp economic downturn, and the potential for further increases in loan impairments. Fitch notes, in particular, the high share of foreign currency loans (59% at Pravex; 80%-85% at the other five banks) and significant exposure to the retail segment (with the exceptions of ProCredit Ukraine and VTB Ukraine) as among the factors driving growth in NPLs (loans overdue by more than 90 days) and/or restructured and extended loans in H109. Pressure on capital remains considerable, and even following recently completed and planned capital injections, loan loss absorption capacity will remain limited, likely requiring further recapitalization support from shareholders at most of the banks. Liquidity/refinancing risks are less of a concern given the significant funding facilities available from parent banks. The banks' Long-term IDRs and National Long-term ratings are underpinned by potential support from their shareholders, in case of need. However, Ukrainian transfer and convertibility risks, as reflected in the Country Ceiling ('B'), could limit the extent to which these banks can utilize this support. UkrSibbank is almost 81%-owned by France's BNP Paribas ('AA'/Negative); Ukrsotsbank is almost 95%-owned by Italy-based UniCredit S.p.A. ('A'/Negative) through its Vienna subsidiary UniCredit Bank Austria AG ('A'/Stable); Forum is majority-owned (63%) by Germany's Commerzbank AG ('A+'/Stable); ProCredit Ukraine is 80%-owned by Germany's ProCredit Holding AG ('BBB-'/Stable); Pravex is 100%- owned by Italy's Intesa Sanpaolo S.p.A. ('AA-'/Stable) and VTB Ukraine is more than 99%-owned by Russia's JSC Bank VTB ('BBB'/Negative). Reported NPLs and restructured/extended loans at UkrSibbank amounted to 16% and 10% of gross loans, respectively, at end-H109. The regulatory capital ratio stood at 13.2% at end-August 2009 and the loan impairment reserve/gross loans ratio at 11.6%, indicating only moderate loss absorption capacity. A subordinated loan of up to US$100 million expected from the EBRD in or H209-Q110 will provide some support to UkrSibbank's regulatory capital ratio; however, equity contributions may also be required in future in light of asset quality problems. Highly liquid assets (defined as cash, balances with the National Bank of Ukraine net of obligatory reserves, net short-term interbank assets and unpledged securities eligible for refinancing with NBU) covered a comfortable 28% of client funds at end-H109 while external refinancing needs were insignificant to end-H110; parent funding represented 41% of end- H109 liabilities. Ukrsotsbank's reported NPLs increased to 18.5% of gross loans at end-H109 and restructured/extended loans to 10.4%, while the LIR/gross loans ratio was a moderate 7.9% in the end-H109 IFRS accounts. Current capitalization (regulatory capital adequacy ratio of 14.5% at mid-September 2009) offers only limited loss absorption capacity. After the recent UAH500 million capital contribution and a US$100 million subordinated loan received from the EBRD in August 2009, there are no immediate capital-raising plans, although in light of the significant pressure from growing loan impairments, more capital support could be required. Reliance on parent funding remains significant (53% of end-H109 liabilities); however, repayments of foreign borrowings other than those from the parent bank are moderate (equal to 8% of end-H109 liabilities) to end-H110. Forum's reported NPLs stood at 21.7% of gross loans at end-H109. Loan impairment coverage was only 54% of NPLs at end-H109 and the regulatory capital ratio of 15.9% at end-August 2009 therefore offers limited loss absorption capacity. Capitalization has been supported mainly by frequent equity injections from the bank's shareholders, and in July 2009 Tier 2 capital was also enhanced by a US$80 million subordinated loan from EBRD. Majority shareholders are considering injecting a further UAH1.1bn of capital by the end of 2009. Funding materially relies on the parent bank, with Commerzbank providing around 45% of non-equity funding at end-H109. ProCredit Ukraine reported NPLs at 8% of gross loans at end-H109 and restructured loans of 25%. However, Fitch has affirmed the bank's 'D/E' Individual rating in light of the reasonable performance of the restructured portfolio to date, the bank's limited exposure to more high-risk sectors (construction and retail) and reasonable (by Ukrainian market standards) risk management. ProCredit Ukraine's capital ratios improved in H109 (reported regulatory capital ratio of 14.1% at end-H109), after an equity injection of US$10 million; however, Fitch still views capitalization as tight, in view of pressure on asset quality from the challenging operating environment and the potential for further UAH depreciation. ProCredit Ukraine is 20% owned by the European Bank for Reconstruction and Development, and Kreditanstalt fuer Wiederaufbau is expected to take a stake of at least 20% in H209 through the purchase of existing shares from ProCredit Holding and contribution of new equity. Pravex's NPLs and restructured/extended loans were both substantial at end-H109, with the regulatory capital ratio (18.4% at end-H109) and LIR/gross loans ratio of 10% offering only limited loss absorption capacity. An equity injection equivalent to EUR50 million is planned for Q409; however, Pravex may need additional capital support, in particular in case of further asset quality deterioration and/or significant UAH devaluation. Large arrears also pose challenges to stand-alone liquidity management. However, the liquidity profile benefits from relatively stable customer deposits (up 6% in H109) and parent funding (26% of total liabilities at end-H109). Highly liquid assets covered a comfortable 31% of customer funds at end-H109 and there are no significant wholesale refinancing needs to end-H110. VTB Ukraine reported NPLs and restructured loans at 15% and 26%, respectively, at end-H109. A highly concentrated loan book (the top 20 groups of related borrowers represented 55% of gross loans) is another source of concern. The regulatory capital ratio increased to 18% at end-H109 following the receipt of a US$129 million subordinated loan from VTB in January 2009 and the subsequent US$100 million pre-payment of new equity (NBU considers this in capital calculations). However, the reserve coverage of NPLs is rather low under local GAAP, at only 45%, and therefore total loss absorption capacity is limited. Funding is mainly provided by VTB group, which accounted for almost 70% of liabilities. In Fitch's rating criteria, a bank's standalone risk is reflected in Fitch's Individual ratings and the prospect of external support is reflected in Fitch's Support ratings. Collectively these ratings drive Fitch's Long- and Short-term IDRs. The rating actions are: JSCIB UkrSibbank: -- Long-term foreign currency IDR: affirmed at 'B'; Outlook Negative -- Senior unsecured debt: affirmed at 'B'; Recovery Rating at 'RR4' -- Long-term local currency IDR: affirmed at 'B+'; Outlook Negative -- Short-term IDR: affirmed at 'B' -- Support Rating: affirmed at '4' -- Individual rating: downgraded to 'E' from 'D/E' -- National Long-term rating: affirmed at 'AAA(ukr)'; Outlook Stable Ukrsotsbank: -- Long-term foreign currency IDR: affirmed at 'B'; Outlook Negative -- Senior unsecured debt: affirmed at 'B'; Recovery Rating at 'RR4' -- Long-term local currency IDR: affirmed at 'B+'; Outlook Negative -- Short-term IDR: affirmed at 'B' -- Support Rating: affirmed at '4' -- Individual rating: downgraded to 'E' from 'D/E' Bank Forum: -- Long-term foreign currency IDR: affirmed at 'B'; Outlook Negative -- Senior unsecured debt: affirmed at 'B'; Recovery Rating at 'RR4' -- Long-term local currency IDR: affirmed at 'B+'; Outlook Negative -- Short-term IDR: affirmed at 'B' -- Support Rating: affirmed at '4' -- Individual rating: downgraded to 'E' from 'D/E' -- National Long-term rating: affirmed at 'AAA(ukr)'; Outlook Stable ProCredit Bank (Ukraine): -- Long-term foreign currency IDR: affirmed at 'B'; Outlook Negative -- Long-term local currency IDR: affirmed at 'B+'; Outlook Negative -- Short-term IDR: affirmed at 'B' -- Local Currency Short-term IDR: affirmed at 'B' -- Support Rating: affirmed at '4' -- Individual rating: affirmed at 'D/E' -- National Long-term rating: affirmed at 'AAA(ukr)'; Outlook Stable Pravex Bank: -- Long-term foreign currency IDR: affirmed at 'B'; Outlook Negative -- Long-term local currency IDR: affirmed at 'B+'; Outlook Negative -- Short-term IDR: affirmed at 'B' -- Support Rating: affirmed at '4' -- Individual rating: affirmed at 'E' -- National Long-term rating: affirmed at 'AAA(ukr)'; Outlook Stable JSC VTB Bank (Ukraine): -- Long-term foreign currency IDR: affirmed at 'B'; Outlook Negative -- Long-term local currency IDR: affirmed at 'B+'; Outlook Negative -- Short-term IDR: affirmed at 'B' -- Support Rating: affirmed at '4' -- Individual rating: affirmed at 'E' -- National Long-term rating: affirmed at 'AAA(ukr)'; Outlook Stable UKRSOTSBANK: Fitch Downgrades Individual Rating to 'E' From 'D/E' ----------------------------------------------------------------- Fitch Ratings has downgraded the Individual ratings of three foreign-owned Ukrainian banks -- UkrSibbank, Ukrsotsbank and Forum -- to 'E' from 'D/E', reflecting ongoing asset quality deterioration. At the same time, the agency has affirmed the Individual ratings of three other foreign-owned Ukrainian banks -- ProCredit Ukraine at 'D/E' and Pravex and VTB Ukraine at 'E'. The agency has also affirmed the foreign currency Long-term Issuer Default Ratings of all six banks at 'B' with a Negative Outlook, reflecting the potential for support from the banks' foreign shareholders. A full list of rating actions is provided at the end of this commentary. Fitch's rating actions took into account the significant deterioration in asset quality metrics during H109 following the large depreciation of the UAH in Q408 and the sharp economic downturn, and the potential for further increases in loan impairments. Fitch notes, in particular, the high share of foreign currency loans (59% at Pravex; 80%-85% at the other five banks) and significant exposure to the retail segment (with the exceptions of ProCredit Ukraine and VTB Ukraine) as among the factors driving growth in NPLs (loans overdue by more than 90 days) and/or restructured and extended loans in H109. Pressure on capital remains considerable, and even following recently completed and planned capital injections, loan loss absorption capacity will remain limited, likely requiring further recapitalization support from shareholders at most of the banks. Liquidity/refinancing risks are less of a concern given the significant funding facilities available from parent banks. The banks' Long-term IDRs and National Long-term ratings are underpinned by potential support from their shareholders, in case of need. However, Ukrainian transfer and convertibility risks, as reflected in the Country Ceiling ('B'), could limit the extent to which these banks can utilize this support. UkrSibbank is almost 81%-owned by France's BNP Paribas ('AA'/Negative); Ukrsotsbank is almost 95%-owned by Italy-based UniCredit S.p.A. ('A'/Negative) through its Vienna subsidiary UniCredit Bank Austria AG ('A'/Stable); Forum is majority-owned (63%) by Germany's Commerzbank AG ('A+'/Stable); ProCredit Ukraine is 80%-owned by Germany's ProCredit Holding AG ('BBB-'/Stable); Pravex is 100%- owned by Italy's Intesa Sanpaolo S.p.A. ('AA-'/Stable) and VTB Ukraine is more than 99%-owned by Russia's JSC Bank VTB ('BBB'/Negative). Reported NPLs and restructured/extended loans at UkrSibbank amounted to 16% and 10% of gross loans, respectively, at end-H109. The regulatory capital ratio stood at 13.2% at end-August 2009 and the loan impairment reserve/gross loans ratio at 11.6%, indicating only moderate loss absorption capacity. A subordinated loan of up to US$100 million expected from the EBRD in or H209-Q110 will provide some support to UkrSibbank's regulatory capital ratio; however, equity contributions may also be required in future in light of asset quality problems. Highly liquid assets (defined as cash, balances with the National Bank of Ukraine net of obligatory reserves, net short-term interbank assets and unpledged securities eligible for refinancing with NBU) covered a comfortable 28% of client funds at end-H109 while external refinancing needs were insignificant to end-H110; parent funding represented 41% of end- H109 liabilities. Ukrsotsbank's reported NPLs increased to 18.5% of gross loans at end-H109 and restructured/extended loans to 10.4%, while the LIR/gross loans ratio was a moderate 7.9% in the end-H109 IFRS accounts. Current capitalization (regulatory capital adequacy ratio of 14.5% at mid-September 2009) offers only limited loss absorption capacity. After the recent UAH500 million capital contribution and a US$100 million subordinated loan received from the EBRD in August 2009, there are no immediate capital-raising plans, although in light of the significant pressure from growing loan impairments, more capital support could be required. Reliance on parent funding remains significant (53% of end-H109 liabilities); however, repayments of foreign borrowings other than those from the parent bank are moderate (equal to 8% of end-H109 liabilities) to end-H110. Forum's reported NPLs stood at 21.7% of gross loans at end-H109. Loan impairment coverage was only 54% of NPLs at end-H109 and the regulatory capital ratio of 15.9% at end-August 2009 therefore offers limited loss absorption capacity. Capitalization has been supported mainly by frequent equity injections from the bank's shareholders, and in July 2009 Tier 2 capital was also enhanced by a US$80 million subordinated loan from EBRD. Majority shareholders are considering injecting a further UAH1.1bn of capital by the end of 2009. Funding materially relies on the parent bank, with Commerzbank providing around 45% of non-equity funding at end-H109. ProCredit Ukraine reported NPLs at 8% of gross loans at end-H109 and restructured loans of 25%. However, Fitch has affirmed the bank's 'D/E' Individual rating in light of the reasonable performance of the restructured portfolio to date, the bank's limited exposure to more high-risk sectors (construction and retail) and reasonable (by Ukrainian market standards) risk management. ProCredit Ukraine's capital ratios improved in H109 (reported regulatory capital ratio of 14.1% at end-H109), after an equity injection of US$10 million; however, Fitch still views capitalization as tight, in view of pressure on asset quality from the challenging operating environment and the potential for further UAH depreciation. ProCredit Ukraine is 20% owned by the European Bank for Reconstruction and Development, and Kreditanstalt fuer Wiederaufbau is expected to take a stake of at least 20% in H209 through the purchase of existing shares from ProCredit Holding and contribution of new equity. Pravex's NPLs and restructured/extended loans were both substantial at end-H109, with the regulatory capital ratio (18.4% at end-H109) and LIR/gross loans ratio of 10% offering only limited loss absorption capacity. An equity injection equivalent to EUR50 million is planned for Q409; however, Pravex may need additional capital support, in particular in case of further asset quality deterioration and/or significant UAH devaluation. Large arrears also pose challenges to stand-alone liquidity management. However, the liquidity profile benefits from relatively stable customer deposits (up 6% in H109) and parent funding (26% of total liabilities at end-H109). Highly liquid assets covered a comfortable 31% of customer funds at end-H109 and there are no significant wholesale refinancing needs to end-H110. VTB Ukraine reported NPLs and restructured loans at 15% and 26%, respectively, at end-H109. A highly concentrated loan book (the top 20 groups of related borrowers represented 55% of gross loans) is another source of concern. The regulatory capital ratio increased to 18% at end-H109 following the receipt of a US$129 million subordinated loan from VTB in January 2009 and the subsequent US$100 million pre-payment of new equity (NBU considers this in capital calculations). However, the reserve coverage of NPLs is rather low under local GAAP, at only 45%, and therefore total loss absorption capacity is limited. Funding is mainly provided by VTB group, which accounted for almost 70% of liabilities. In Fitch's rating criteria, a bank's standalone risk is reflected in Fitch's Individual ratings and the prospect of external support is reflected in Fitch's Support ratings. Collectively these ratings drive Fitch's Long- and Short-term IDRs. The rating actions are: JSCIB UkrSibbank: -- Long-term foreign currency IDR: affirmed at 'B'; Outlook Negative -- Senior unsecured debt: affirmed at 'B'; Recovery Rating at 'RR4' -- Long-term local currency IDR: affirmed at 'B+'; Outlook Negative -- Short-term IDR: affirmed at 'B' -- Support Rating: affirmed at '4' -- Individual rating: downgraded to 'E' from 'D/E' -- National Long-term rating: affirmed at 'AAA(ukr)'; Outlook Stable Ukrsotsbank: -- Long-term foreign currency IDR: affirmed at 'B'; Outlook Negative -- Senior unsecured debt: affirmed at 'B'; Recovery Rating at 'RR4' -- Long-term local currency IDR: affirmed at 'B+'; Outlook Negative -- Short-term IDR: affirmed at 'B' -- Support Rating: affirmed at '4' -- Individual rating: downgraded to 'E' from 'D/E' Bank Forum: -- Long-term foreign currency IDR: affirmed at 'B'; Outlook Negative -- Senior unsecured debt: affirmed at 'B'; Recovery Rating at 'RR4' -- Long-term local currency IDR: affirmed at 'B+'; Outlook Negative -- Short-term IDR: affirmed at 'B' -- Support Rating: affirmed at '4' -- Individual rating: downgraded to 'E' from 'D/E' -- National Long-term rating: affirmed at 'AAA(ukr)'; Outlook Stable ProCredit Bank (Ukraine): -- Long-term foreign currency IDR: affirmed at 'B'; Outlook Negative -- Long-term local currency IDR: affirmed at 'B+'; Outlook Negative -- Short-term IDR: affirmed at 'B' -- Local Currency Short-term IDR: affirmed at 'B' -- Support Rating: affirmed at '4' -- Individual rating: affirmed at 'D/E' -- National Long-term rating: affirmed at 'AAA(ukr)'; Outlook Stable Pravex Bank: -- Long-term foreign currency IDR: affirmed at 'B'; Outlook Negative -- Long-term local currency IDR: affirmed at 'B+'; Outlook Negative -- Short-term IDR: affirmed at 'B' -- Support Rating: affirmed at '4' -- Individual rating: affirmed at 'E' -- National Long-term rating: affirmed at 'AAA(ukr)'; Outlook Stable JSC VTB Bank (Ukraine): -- Long-term foreign currency IDR: affirmed at 'B'; Outlook Negative -- Long-term local currency IDR: affirmed at 'B+'; Outlook Negative -- Short-term IDR: affirmed at 'B' -- Support Rating: affirmed at '4' -- Individual rating: affirmed at 'E' -- National Long-term rating: affirmed at 'AAA(ukr)'; Outlook Stable VTB UKRAINE: Fitch Affirms Individual Rating at 'E' --------------------------------------------------- Fitch Ratings has downgraded the Individual ratings of three foreign-owned Ukrainian banks -- UkrSibbank, Ukrsotsbank and Forum -- to 'E' from 'D/E', reflecting ongoing asset quality deterioration. At the same time, the agency has affirmed the Individual ratings of three other foreign-owned Ukrainian banks -- ProCredit Ukraine at 'D/E' and Pravex and VTB Ukraine at 'E'. The agency has also affirmed the foreign currency Long-term Issuer Default Ratings of all six banks at 'B' with a Negative Outlook, reflecting the potential for support from the banks' foreign shareholders. A full list of rating actions is provided at the end of this commentary. Fitch's rating actions took into account the significant deterioration in asset quality metrics during H109 following the large depreciation of the UAH in Q408 and the sharp economic downturn, and the potential for further increases in loan impairments. Fitch notes, in particular, the high share of foreign currency loans (59% at Pravex; 80%-85% at the other five banks) and significant exposure to the retail segment (with the exceptions of ProCredit Ukraine and VTB Ukraine) as among the factors driving growth in NPLs (loans overdue by more than 90 days) and/or restructured and extended loans in H109. Pressure on capital remains considerable, and even following recently completed and planned capital injections, loan loss absorption capacity will remain limited, likely requiring further recapitalization support from shareholders at most of the banks. Liquidity/refinancing risks are less of a concern given the significant funding facilities available from parent banks. The banks' Long-term IDRs and National Long-term ratings are underpinned by potential support from their shareholders, in case of need. However, Ukrainian transfer and convertibility risks, as reflected in the Country Ceiling ('B'), could limit the extent to which these banks can utilize this support. UkrSibbank is almost 81%-owned by France's BNP Paribas ('AA'/Negative); Ukrsotsbank is almost 95%-owned by Italy-based UniCredit S.p.A. ('A'/Negative) through its Vienna subsidiary UniCredit Bank Austria AG ('A'/Stable); Forum is majority-owned (63%) by Germany's Commerzbank AG ('A+'/Stable); ProCredit Ukraine is 80%-owned by Germany's ProCredit Holding AG ('BBB-'/Stable); Pravex is 100%- owned by Italy's Intesa Sanpaolo S.p.A. ('AA-'/Stable) and VTB Ukraine is more than 99%-owned by Russia's JSC Bank VTB ('BBB'/Negative). Reported NPLs and restructured/extended loans at UkrSibbank amounted to 16% and 10% of gross loans, respectively, at end-H109. The regulatory capital ratio stood at 13.2% at end-August 2009 and the loan impairment reserve/gross loans ratio at 11.6%, indicating only moderate loss absorption capacity. A subordinated loan of up to US$100 million expected from the EBRD in or H209-Q110 will provide some support to UkrSibbank's regulatory capital ratio; however, equity contributions may also be required in future in light of asset quality problems. Highly liquid assets (defined as cash, balances with the National Bank of Ukraine net of obligatory reserves, net short-term interbank assets and unpledged securities eligible for refinancing with NBU) covered a comfortable 28% of client funds at end-H109 while external refinancing needs were insignificant to end-H110; parent funding represented 41% of end- H109 liabilities. Ukrsotsbank's reported NPLs increased to 18.5% of gross loans at end-H109 and restructured/extended loans to 10.4%, while the LIR/gross loans ratio was a moderate 7.9% in the end-H109 IFRS accounts. Current capitalization (regulatory capital adequacy ratio of 14.5% at mid-September 2009) offers only limited loss absorption capacity. After the recent UAH500 million capital contribution and a US$100 million subordinated loan received from the EBRD in August 2009, there are no immediate capital-raising plans, although in light of the significant pressure from growing loan impairments, more capital support could be required. Reliance on parent funding remains significant (53% of end-H109 liabilities); however, repayments of foreign borrowings other than those from the parent bank are moderate (equal to 8% of end-H109 liabilities) to end-H110. Forum's reported NPLs stood at 21.7% of gross loans at end-H109. Loan impairment coverage was only 54% of NPLs at end-H109 and the regulatory capital ratio of 15.9% at end-August 2009 therefore offers limited loss absorption capacity. Capitalization has been supported mainly by frequent equity injections from the bank's shareholders, and in July 2009 Tier 2 capital was also enhanced by a US$80 million subordinated loan from EBRD. Majority shareholders are considering injecting a further UAH1.1bn of capital by the end of 2009. Funding materially relies on the parent bank, with Commerzbank providing around 45% of non-equity funding at end-H109. ProCredit Ukraine reported NPLs at 8% of gross loans at end-H109 and restructured loans of 25%. However, Fitch has affirmed the bank's 'D/E' Individual rating in light of the reasonable performance of the restructured portfolio to date, the bank's limited exposure to more high-risk sectors (construction and retail) and reasonable (by Ukrainian market standards) risk management. ProCredit Ukraine's capital ratios improved in H109 (reported regulatory capital ratio of 14.1% at end-H109), after an equity injection of US$10 million; however, Fitch still views capitalization as tight, in view of pressure on asset quality from the challenging operating environment and the potential for further UAH depreciation. ProCredit Ukraine is 20% owned by the European Bank for Reconstruction and Development, and Kreditanstalt fuer Wiederaufbau is expected to take a stake of at least 20% in H209 through the purchase of existing shares from ProCredit Holding and contribution of new equity. Pravex's NPLs and restructured/extended loans were both substantial at end-H109, with the regulatory capital ratio (18.4% at end-H109) and LIR/gross loans ratio of 10% offering only limited loss absorption capacity. An equity injection equivalent to EUR50 million is planned for Q409; however, Pravex may need additional capital support, in particular in case of further asset quality deterioration and/or significant UAH devaluation. Large arrears also pose challenges to stand-alone liquidity management. However, the liquidity profile benefits from relatively stable customer deposits (up 6% in H109) and parent funding (26% of total liabilities at end-H109). Highly liquid assets covered a comfortable 31% of customer funds at end-H109 and there are no significant wholesale refinancing needs to end-H110. VTB Ukraine reported NPLs and restructured loans at 15% and 26%, respectively, at end-H109. A highly concentrated loan book (the top 20 groups of related borrowers represented 55% of gross loans) is another source of concern. The regulatory capital ratio increased to 18% at end-H109 following the receipt of a US$129 million subordinated loan from VTB in January 2009 and the subsequent US$100 million pre-payment of new equity (NBU considers this in capital calculations). However, the reserve coverage of NPLs is rather low under local GAAP, at only 45%, and therefore total loss absorption capacity is limited. Funding is mainly provided by VTB group, which accounted for almost 70% of liabilities. In Fitch's rating criteria, a bank's standalone risk is reflected in Fitch's Individual ratings and the prospect of external support is reflected in Fitch's Support ratings. Collectively these ratings drive Fitch's Long- and Short-term IDRs. The rating actions are: JSCIB UkrSibbank: -- Long-term foreign currency IDR: affirmed at 'B'; Outlook Negative -- Senior unsecured debt: affirmed at 'B'; Recovery Rating at 'RR4' -- Long-term local currency IDR: affirmed at 'B+'; Outlook Negative -- Short-term IDR: affirmed at 'B' -- Support Rating: affirmed at '4' -- Individual rating: downgraded to 'E' from 'D/E' -- National Long-term rating: affirmed at 'AAA(ukr)'; Outlook Stable Ukrsotsbank: -- Long-term foreign currency IDR: affirmed at 'B'; Outlook Negative -- Senior unsecured debt: affirmed at 'B'; Recovery Rating at 'RR4' -- Long-term local currency IDR: affirmed at 'B+'; Outlook Negative -- Short-term IDR: affirmed at 'B' -- Support Rating: affirmed at '4' -- Individual rating: downgraded to 'E' from 'D/E' Bank Forum: -- Long-term foreign currency IDR: affirmed at 'B'; Outlook Negative -- Senior unsecured debt: affirmed at 'B'; Recovery Rating at 'RR4' -- Long-term local currency IDR: affirmed at 'B+'; Outlook Negative -- Short-term IDR: affirmed at 'B' -- Support Rating: affirmed at '4' -- Individual rating: downgraded to 'E' from 'D/E' -- National Long-term rating: affirmed at 'AAA(ukr)'; Outlook Stable ProCredit Bank (Ukraine): -- Long-term foreign currency IDR: affirmed at 'B'; Outlook Negative -- Long-term local currency IDR: affirmed at 'B+'; Outlook Negative -- Short-term IDR: affirmed at 'B' -- Local Currency Short-term IDR: affirmed at 'B' -- Support Rating: affirmed at '4' -- Individual rating: affirmed at 'D/E' -- National Long-term rating: affirmed at 'AAA(ukr)'; Outlook Stable Pravex Bank: -- Long-term foreign currency IDR: affirmed at 'B'; Outlook Negative -- Long-term local currency IDR: affirmed at 'B+'; Outlook Negative -- Short-term IDR: affirmed at 'B' -- Support Rating: affirmed at '4' -- Individual rating: affirmed at 'E' -- National Long-term rating: affirmed at 'AAA(ukr)'; Outlook Stable JSC VTB Bank (Ukraine): -- Long-term foreign currency IDR: affirmed at 'B'; Outlook Negative -- Long-term local currency IDR: affirmed at 'B+'; Outlook Negative -- Short-term IDR: affirmed at 'B' -- Support Rating: affirmed at '4' -- Individual rating: affirmed at 'E' -- National Long-term rating: affirmed at 'AAA(ukr)'; Outlook Stable =========================== U N I T E D K I N G D O M =========================== ALBA 2007-1: Moody's Cuts Rating on Class F Notes to 'Caa3' ----------------------------------------------------------- Moody's has placed all notes and Mercs issued by Alba 2006-2 PLC and Alba 2007-1 PLC on review for possible downgrade following a late payment on the notes in Alba 2006-2 and a non payment on Alba 2007-1. Moody's received written confirmation from the Issuer that payments of interest and principal for Alba 2006-2 were made on September 22, hence 5 business days after the interest payment date and within the grace period. Moody's has also been informed that no payment was made on Alba 2007-1 at the interest payment date falling on September 17 and that so far no payment has yet been made. If no payment will be made within the 5 business day grace period, this could lead to an event of default in accordance with the terms and conditions of the notes. The notice does not explain the issues which have caused the non payment at the interest payment dates. Moody's has received no explanation on the reasons that have caused the delay in processing the payments in Alba 2006-2 and therefore it is not certain if the issue has been only temporary resolved and it will not occur again in the future. The review of the ratings in both deals will be concluded when Moody's is sufficiently comfortable that payments will continue to be processed in a timely fashion in these transactions. Moody's notes that the inability of the issuers to fulfill their payment obligations on time could result in additional credit losses due to the unwinding of interest rate or currency exchange hedges following termination events prompted by late payments. In the case of Alba 2007-1 the rating action is also prompted by the additional uncertainty due to the event of default that may occur if payments are not made by September 24. The classes of notes affected by the rating actions are: Alba 2006-2 plc: -- GBP148.9 million A3a notes, Placed Under Review for Possible Downgrade, previously Assigned Aaa on the 17th of November 2006 -- EUR54.6 million A3b notes, Placed Under Review for Possible Downgrade, previously Assigned Aaa on the 17th of November 2006 -- GBP44.1 million B notes, Placed Under Review for Possible Downgrade, previously Assigned Aa2 on the 17th of November 2006 -- MERC certificates, Placed Under Review for Possible Downgrade, previously Assigned Aaa on the 17th of November 2006 Alba 2007-1 plc: -- GBP213.5 million A2 notes, Placed Under Review for Possible Downgrade, previously Downgraded to Aa1 on the 31st of March 2009 -- GBP269 million A3 notes, Placed Under Review for Possible Downgrade, previously Downgraded to Aa1 on the 31st of March 2009 -- GBP105.8 million B notes, Placed Under Review for Possible Downgrade, previously Confirmed at Aa3 on the 31st of March 2009 -- GBP20.4 million F notes, Placed Under Review for Possible Downgrade, previously Downgraded to Caa3 on the 31st of March 2009 -- MERC certificates, Placed Under Review for Possible Downgrade, previously Assigned Aaa on the 18th of June 2007 Moody's ratings address the expected loss posed to investors by the legal final maturity of the notes. Moody's ratings address only the credit risks associated with the transactions. Other non-credit risks have not been addressed, but may have a significant effect on yield to investors. BLACKS LEISURE: Secures Standstill; SandCity In Administration -------------------------------------------------------------- Further to the announcement made by Blacks Leisure Group PLC Tuesday regarding an expected breach of one of its financial covenants under its bank facilities, the Company said it has now entered into a formal standstill agreement with its bank, Lloyds Banking Group, in respect of this covenant breach until November 30, 2009. The standstill is subject to the Company delivering a restructuring plan, acceptable to the bank, addressing the future viability of the group, including actions to achieve an exit of the Company's loss-making stores, by October 30, 2009. Administration of Sandcity Limited Over the last 18 months, the Company has been reviewing options to exit from its loss-making Boardwear division. As part of this review, the Company has successfully exited the O'Neill wholesale business, converted a number of stores from Boardwear to Outdoor fascias, and reduced the cost base through a consolidation of the Sandcity and Freespirit management functions. A disposal of the Boardwear business has also been pursued but serious interest in this business was low and structural issues made a discrete sale of this business difficult to achieve. The Company announced that Richard Fleming and David Costley-Wood of KPMG LLP have been appointed as administrators in respect of its wholly owned subsidiary, Sandcity Ltd. This follows a review by the directors of Sandcity which has concluded that there is no reasonable prospect of restoring profitability in the medium to long term and that Sandcity is no longer in a position to trade as a going concern. Sandcity is part of the Boardwear division and is a retailer of predominantly lifestyle and boardwear clothing and accessories. It operates out of 11 stores, which trade at a substantial loss. The appointment of administrators of Sandcity results in an exit from approximately one third of the Company's Boardwear division. The Directors believe that the administration of Sandcity will not have a material effect on the Company's other businesses which continue to trade normally. Lloyds Banking Group is supportive of the actions the Company is announcing today and has given its consent to Sandcity being put into administration. Trading Update As announced Wednesday, the group has underperformed against budget for the first six months of the financial year to August 31st 2009. While the Directors believe, partly as a result of the action being taken in relation to Sandcity, that current market expectations can still be met (before taking into account the effects of any restructuring plan and the associated costs), this will be dependent on the bank waiving the expected covenant breach and on trading during the key Christmas period. A further announcement will be made in due course. The interim results are expected to be published towards the end of October 2009. About Blacks Leisure Headquartered in Northampton, Blacks Leisure Group plc -- http://www.blacksleisure.co.uk/-- is the parent company of its subsidiaries, which are engaged in the retail and wholesale of clothing and camping equipment. The Company comprises two segments: Outdoor and Boardwear. Outdoor trades under the fascias Blacks and Millets. The trade is from retail stores in the British Isles, and the associated direct sale Internet sites. Boardwear holds the United Kingdom licenses for O'Neill and Mambo products to trade as a wholesale operation and from retail stores. The stores retail brands are Peter Storm and Eurohike. Other brands sold include Berghaus, North Face, Merrell, Coleman, Karrimor, Hi-Tec, Columbia and Craghoppers. The Company's subsidiaries include Blacks Outdoor Division Ltd, The Outdoor Group Ltd and Sandcity Ltd. CORSAIR NO 2: Moody's Cuts Rating on Series 80 Notes to 'B2' ------------------------------------------------------------ Moody's Investors Service has taken these rating actions on notes issued by Corsair (Jersey) No. 2 Limited: Series 80, a collateralized debt obligation transaction referencing a static portfolio of corporate entities. Issuer: Corsair (Jersey) No. 2 Limited -- Series 80 US$250,000,000 Floating Rate Secured Portfolio Credit-linked Notes due 2021, Downgraded to B2; previously on March 6, 2009 Downgraded to Baa1 This transaction has a short credit observation period whereby the notes are exposed to the portfolio credit risk for the remaining 3.76 years and the notes proceeds are invested in the original collateral for the said numbers of years. After the credit observation period has ended, the proceeds from the original collateral may or may not be invested for a further 8 years in eligible collateral assets up until June 2021. In the event that the original collateral is not replaced by the substitution agent upon collateral maturity, the notes can terminate after the short credit observation period. Given this, Moody's has modelled the risk based on the shorter expected termination date rather than the legal final maturity. Moody's explained that the rating action taken is the result of the deterioration of the credit quality of the reference portfolio. The 10 year weighted average rating factor of the portfolio, not adjusted with forward looking measures, has deteriorated from 1260 from the last rating action to 1853, equivalent to an average rating of the current portfolio of Ba3. The reference portfolio includes an exposure to CIT Group, Inc., and Ambac Financial Group which have experienced substantial credit migration in the past few months, and are now rated Ca. The Banking, Finance, Insurance and Real Estate industry sectors are the most represented, weighting 22%, 28%, 44% and 4%, respectively, of the portfolio initial notional. In addition to the quantitative factors that are explicitly modeled, qualitative factors are part of rating committee considerations. These qualitative factors include, among others, the structural protections in each transaction, the recent deal performance in the current market environment, the strength of the legal framework as well as specific documentation features, and selection bias in the portfolio. All information available to rating committees, including macroeconomic forecasts, input from other Moody's analytical groups, market factors, and judgments regarding the nature and severity of credit stress on the transactions, may influence the final rating decision. HALTON LEA: Put Into Receivership; Savills Appointed ---------------------------------------------------- BBC News reports that Halton Lea Shopping Centre has been put into receivers. According to BBC, directors at international real estate advisor Savills have been appointed as joint receivers of the shopping center, which has more than 60 retail units. The joint receivers said day-to-day trading of the center would be unaffected, BBC notes. NATIONAL EXPRESS: Takeover Offer Deadline May Be Extended --------------------------------------------------------- Gill Plimmer at The Financial Times reports that the deadline for the Spanish-led consortium to make a formal offer for National Express is to be extended for a second time so that due diligence can be completed. The Spanish Cosmen family, which owns 18.6% the group, and private equity firm CVC had until today, Sept. 25, to complete the process and either make a 500p-a-share offer or walk away. According to the FT, the Takeover Panel is expected to give the companies a further two weeks to assess the financial health of the company. As reported in the Troubled Company Reporter-Europe on Sept. 15, 2009, the consortium raised its indicative cash offer for National Express to 500p a share from the 450p offer the group's board had rejected. Going Concern On Aug. 4, 2009, the Troubled Company Reporter-Europe, citing Telegraph.co.uk, said National Express made a pre-tax loss of GBP48.1 million in the first six months of 2009, down from a profit of GBP52.4 million last year, after taking a GBP54.7 million hit from its forced exit from the East Coast mainline franchise, which is being taken back into government hands. According Telegraph.co.uk, the accounts declared that while the directors are confident of renegotiating covenant obligations with lenders, "covenant compliance remains dependent on actions which are yet to be delivered". In light of this the accounts warned that "underlying implementation risks represent a material uncertainty that may cast significant doubt upon the group's ability to continue as a going concern". National Express Group PLC -- http://www.nationalexpressgroup.com/ -- is the holding company of the National Express Group of companies. Its subsidiary companies provide mass passenger transport services in the United Kingdom and overseas. The Company's segments comprise: UK Bus; UK Coach; UK Trains; North American Bus; European Coach and Bus, and Central functions. Its subsidiaries include Tayside Public Transport Co. Limited, Durham School Services LP, Stock Transportation Limited, Dabliu Consulting SLU, Tury Express SA, General Tecnica Industrial SLU and Continental Auto SLU. In June 2009, the Company announced the completion of the sale of Travel London, its London bus business, to NedRailways Limited, a subsidiary of NS Dutch Railways. PUNCH TAVERNS: Shareholder Seeks Liquidation of Business -------------------------------------------------------- Pan Kwan Yuk at The Financial Times reports that Andy Brough, which owns a 3.4% stake in Punch Taverns plc, said the company should consider selling off all its pubs and winding itself down progressively over the next 18 months. Mr. Brough, as cited by the FT, said it would be in investors' best interests if the pub group liquidates. "If NAV [net asset value] is estimated by Merrill Lynch in a recent note at 340p and the share price is at 120p, then doesn't it make sense for the company to sell off its pubs, pay back its debts and return whatever�s left to shareholders?," the FT quoted Mr. Brough as saying. Punch Taverns plc -- http://www.punchtaverns.com/-- is a pub company in the United Kingdom, with over 8,400 pubs across its leased and managed portfolio. The Company is engaged in the trading activities in the operation of public houses either under the leased model or as directly managed by the Company. The leased model involves the granting of leases to tenants who operate the pub as their own business, paying rent to the Company, purchasing beer and other drinks from it and entering into profit sharing arrangements for income from leisure machines. Pubs that are directly managed involve the employment of a manager to operate each managed pub and the Group receives all revenues generated by the pub and is responsible for costs. During the fiscal year ended August 23, 2008, Punch Taverns plc acquired 20 pubs and 39 pubs were sold. WINDERMERE VII: Moody's Confirms 'B1' Rating on Class D Notes ------------------------------------------------------------- Moody's Investors Service has confirmed the ratings on these five classes of Notes issued by Windermere VII CMBS plc (amounts reflect initial outstandings): -- EUR466M Class A2 Commercial Mortgage-Backed Notes due 2016 Certificate, Confirmed at Aa1; previously on May 22, 2009 Downgraded to Aa1 and Remained on Review for Possible Downgrade -- EUR0.05M Class X Commercial Mortgage-Backed Notes due 2016 Certificate, Confirmed at Aaa; previously on May 22, 2009 Aaa Remained on Review for Possible Downgrade -- EUR50M Class B Commercial Mortgage-Backed Notes due 2016 Certificate, Confirmed at A2; previously on May 22, 2009 Downgraded to A2 and Remained on Review for Possible Downgrade -- EUR27.4M Class C Commercial Mortgage-Backed Notes due 2016 Certificate, Confirmed at Baa3; previously on May 22, 2009 Downgraded to Baa3 and Remained on Review for Possible Downgrade -- EUR50.8M Class D Commercial Mortgage-Backed Notes due 2016 Certificate, Confirmed at B1; previously on May 22, 2009 Downgraded to B1 and Remained on Review for Possible Downgrade Moody's does not rate the Class E and Class F Notes issued by Windermere VII CMBS plc. The Class A1 Notes were redeemed in full on 22 July 2008. The rating action concludes the review for possible downgrade that was initiated for the above referenced Notes on 15 September 2008 due to exposure to loan-specific issuer level hedges provided by Lehman Brothers Special Financing Inc. and guaranteed by Lehman Brothers Holdings Inc. LBSF is a subsidiary of LBHI, which on 15 September 2008 filed a petition under Chapter 11 of the U.S. Bankruptcy Code. In May 2009, Moody's downgraded the Class A2, B, C, and D Notes after a review of the transaction based on its updated central scenarios, as described in Moody's Special Report "Moody's Updates on Its Surveillance Approach for EMEA CMBS". At that time, the Moody's rated classes were kept on review for possible downgrade due to two main reasons: (i) the replacement of Lehman Brothers Special Financing Inc. as hedge counterparty was not yet complete; and (ii) there was uncertainty concerning whether the largest loan in the transaction, the Tornet Loan (17.8% of the pool as of April 2009), would prepay by the July 2009 IPD. Moody's analysis of the transaction in May 2009 was based on the assumption that the Tornet loan would prepay and Moody's also highlighted that to the extent that this did not materialize, it would have negative implications for the ratings of the Notes. Moody's ratings confirmation is a result of the replacement of loan-specific issuer level hedges for eight of the ten remaining loans, and the prepayment of the Tornet Loan. Moody's also took into consideration in its analysis further changes to the underlying loans including: (i) the loan maturity date of the Firefly Loan (11.1% of the current securitized pool) and the Phoenix Loan (10.1%) was extended to April 2014; (ii) the undrawn capex facility with respect to the Phoenix and Firefly loans was used to partially pay down the Notes at the July 2009 IPD; (iii) one of the properties under the Hanseatic Loan was sold; and (iv) the Redleaf I Loan (5.6%) went into special servicing on 14 September due to an un-remedied LTV covenant breach. Overall, the total Notes outstanding balance has reduced by Euro 147.8 million since the April 2009 IPD. However, since the prepayments were allocated to the Notes on a 50% sequential and 50% pro-rata basis and the release premium with respect to the property disposal under the Hanseatic Loan was allocated 100% pro- rata, there has been no meaningful increase in credit enhancement available to the Class A2, B, C, and D Notes. The loan-specific issuer level hedges have been replaced by new hedging agreements that are provided by HSBC Bank plc (Aa2, P-1, negative outlook). The new hedging agreements entered into between the Issuer and the new hedging provider are generally compliant with Moody's current published criteria entitled "Framework for De-Linking Hedge Counterparty Risks from Global Structured Finance Cashflow Transactions Moody's Methodology" dated 10 May 2007. The Firefly and Phoenix Loans are currently still unhedged but issuer level hedging is expected to be put in place by the October 2009 IPD. The transaction is still exposed to Lehman Brothers entities through their role as security trustee on the loans. Moody's understands that the Issuer is in the process of replacing the Lehman Brothers related entities in their role as security trustee, but final agreements have not been signed yet. The Class X Notes are entitled to receive the difference between (i) interest payable on the loans and (ii) interest payable on the Notes and certain costs. The liquidity facility can be used to cover potential interest shortfalls on the Class X Notes. In relation to principal, the net proceeds from the issue of the Class X Notes have been retained by the Issuer as the Class X Investment Amount for the purpose of repaying the principal amount of the Class X Notes. Moody's believes that the Class X Notes have a different risk profile in comparison to the other classes in the transaction given their characteristics. The rating of the Class X Notes is therefore not affected by the credit risk of the loan portfolio. YELL GROUP: To Raise GBP500 Mln in Share Sale to Repay Debt ----------------------------------------------------------- Jonathan Browning at Bloomberg News reports that Yell Group Plc plans to raise at least GBP500 million (US$820 million) in a share sale to help repay debt. Bloomberg relates Yell said in a statement Wednesday that it has support from a "significant proportion" of its largest lenders to extend its debt maturities to 2014 and negotiate new financial covenants. Yell, as cited by Bloomberg, said the proposals require the backing of 95% of lenders. The company, which has net debt of GBP3.8 billion, will present the plans to lenders next week. About Yell Group Headquartered in Reading, England, Yell Group plc -- http://www.yellgroup.com/-- is an international directories business operating in the classified advertising market through printed, online, and phone media in the U.K. and the US. Yell also owns 100% of TPI (renamed "Yell Publicidad"), the largest publisher of yellow and white pages in Spain, with operations in certain countries in Latin America. Yell's revenue for the twelve months ended March 31, 2008 was GBP2,219 million and its Adjusted EBITDA was GBP738.9 million. * * * As reported in the Troubled Company Reporter-Europe on July 7, 2009, Moody's Investors Service downgraded the Corporate Family Rating of Yell Group plc to B2 from B1 and its Probability of Default Rating to B3 from B2. At the same time, Moody's placed the ratings on review for further possible downgrade. On July 3, 2009, the Troubled Company Reporter-Europe reported that, Standard & Poor's Rating Services said that it lowered to 'B' from 'B+' its long-term corporate credit ratings on U.K.-based classified directories publisher Yell Group PLC. S&P said the outlook is negative. YELLOWFIN LTD: Goes Into Administration --------------------------------------- Gareth Lewis at The Daily Echo reports Yellowfin Ltd. has gone into administration after failing to secure further funding for its Variable Surface Drive (VSD) technology. The administration is being handled by Simon Thomas of RSM Bentley Jennison & Co, the Daily Echo discloses. "Over GBP13 million has been invested to get the revolutionary propulsion system up to prototype stage however the company has been able to raise the further finance required to get to production stage," the Daily Echo quoted Mr. Thomas as saying. "The company has come under creditor pressure and has no option other than to enter administration." Mr. Thomas, as cited by the Daily Echo, said "We have already received some expressions of interests and have demonstrated the prototype. Everyone seems to be convinced it's an interesting project that just needs investment." Yellowfin Ltd. -- http://www.yellowfin.com/-- is an engineering firm based in Hampshire. =============== X X X X X X X X =============== * BOOK REVIEW: Megamergers - Corporate America's Billion-Dollar Takeovers --------------------------------------------------------------- Author: Kenneth M. Davidson Publisher: Beard Books Hardcover: 427 pages Listprice: US$34.95 Review by Henry Berry Megamergers are nothing new to the business world. One of the first occurred in 1901, when Carnegie Steel merged with several rival steel corporations, resulting in the billion-dollar United States Steel. Since then, megamergers have been a part of American business. However, the author notes that megamergers have historically "occurred sporadically and been understandable" on face value. By contrast, in recent decades there has been a "current wave of large mergers [that] is unprecedented." In Megamergers - Corporate America's Billion-Dollar Takeovers, Davidson looks at the unprecedented number of megamergers occurring today and considers whether this signals a change in the thinking of U.S. business leaders. Legislators, corporate executives, mergers specialists, and anyone else involved in, or affected by, megamergers will find this book enlightening. An announcement of a merger is usually accompanied with the pronouncements that it will result in greater synergies, operational efficiencies, and improved servicing of markets. Davidson questions whether this has, in fact, been the case. He analyzes the subsequent financial performance of the corporate behemoths produced by these megamergers and concludes that the majority of them were not justifiable nor, ultimately, productive. Mr. Davidson is an admitted skeptic about the value of mergers to the overall economy and to employees, stockholders, and consumers. He is critical of the overly optimistic rationales prevalent in today's business climate that lead many businesspersons into mergers. For the most part, though, he keeps his biases in check. He rejects many of the common criticisms of mergers. For example, he finds unpersuasive the argument that mergers should be rejected on the ground that they undermine market competitiveness. Nor, does he say, is it worthwhile to revisit the ongoing debate over whether "risk arbitrageurs are good guys or bad guys." The author states that his "first intention [is] to paint a picture of what is happening [to] clarify the issues involved and areas of dispute." He offers a balanced examination of the megamerger phenomenon, particularly as it pertains to the energy and financial services industries. He goes beyond seeing megamergers only as phenomena of contemporary corporate culture, and his analyses go beyond mere statistics. Megamergers have their roots not only in business ambitions and current trends, but also in human nature. Recognizing this, the author also addresses the psychology underlying megamergers. As noted in the section "The Acquisition Imperative," mergers present a temptation to the decision-making executives of successful companies "look[ing] beyond their product and consider[ing] the disposal of excess profits." Mr. Davidson explains why a merger appears to many executives to be a better option than distributing profits to shareholders, starting new businesses, or investing in securities. The informed perspective Mr. Davidson offers in this book, first published in 2003, is just as relevant today. It is a book that brings new wisdom to old ways of thinking about megamergers. An attorney for the U. S. Federal Trade Commission for 25 years, Kenneth M. Davidson has also been a corporate attorney and a visiting law professor. ********* 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, Joy A. Agravante 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 * * *