/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/091223.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 Wednesday, December 23, 2009, Vol. 10, No. 253 Headlines A U S T R I A OSTREGION INVESTMENTGESELLSCHAFT: Moody's Raises Ratings to 'Ba1' B U L G A R I A SOCIETE GENERALE: Fitch Affirms Individual Rating at 'D' C Z E C H R E P U B L I C NORICAN GROUP: Concludes Financial Restructuring Talks F R A N C E CMA CGM: Needs US$100MM of U$500 Mln Credit Line Within 10 Days THOMSON SA: Suppliers, Banks, Creditors Back Restructuring Plan G E R M A N Y BAYERISCHE LANDESBANK: Sells 25.2% Landesbank Saar Stake COMMERZBANK AG: Ordered to Pay JPY3 Mil. Over Rand Mispricing CONTINENTAL AG: Lender Agreement Won't Affect Fitch's 'B+' Rating GELDILUX-TS-2007 SA: Moody's Junks Rating on Class E Notes From B2 GENERAL MOTORS: GM to Present Opel Restructuring Plan in January HSH NORDBANK: Moody's Affirms 'E+' Bank Financial Strength Rating HYPO REAL: Germany's Soffin Extends Rescue Package By a Year KLOECKNER & CO: Moody's Affirms 'Ba2' Corporate Family Rating I T A L Y ITALFINANCE SECURITISATION: Fitch Junks Rating on Class 1-D Notes SESTANTE FINANCE: Fitch Junks Ratings on Three Tranches K A Z A K H S T A N ALAN INVEST: Creditors Must File Claims by December 30 ASTANA KULAGER: Creditors Must File Claims by December 30 ATF BANK: Fitch Changes Outlook to Stable; Affirms 'D/E' Rating BTA BANK: Net Loss Widens to US$13.9 Mln This Year, FSA Says FOOD CONTRACT: Moody's Downgrades Corporate Family Rating to 'Ba3' KAZAKH AGRARIAN: S&P Downgrades Long-Term Issuer Rating to 'BB' KEDEN TRANS: Creditors Must File Claims by December 30 LANYSH ENERGY: Creditors Must File Claims by December 30 NEFTE PRODUCT: Creditors Must File Claims by December 30 SEMEY TSEMENT: Creditors Must File Claims by December 30 SIRIUS STAR: Creditors Must File Claims by December 30 SMART CONSUMER: Creditors Must File Claims by December 30 STATE ANNUITY: Fitch Assigns 'BB' Insurer Fin'l Strength Rating TECH DESIGN: Creditors Must File Claims by December 30 TEMIRBANK AO: CDS Triggered by Failure-to-Pay Credit Event VOSTOK PROM: Creditors Must File Claims by December 30 K Y R G Y Z S T A N AL SHANS: Creditors Must File Claims by January 20 HAJY RAVSHAN: Creditors Must File Claims by January 20 L A T V I A PAREX BANKA: Fitch Affirms Issuer Default Ratings at 'RD' N E T H E R L A N D S ARES EUROPEAN: Moody's Keep Ratings on Various Notes DUCHESS IV: Moody's Cuts Rating on EUR32.8MM Class D Notes to 'B3' EUROCREDIT CDO: Moody's Cuts Rating on Class R Notes to 'Caa3' R U S S I A ARCHANGEL DIAMOND: Wins Confirmation of Chapter 11 Plan EVRAZ GROUP: Moody's Changes Outlook on 'B1' Rating to Stable MOBILE TELESYSTEMS: S&P Retains 'BB' Rating on Unsecured Debts SISTEMA JSFC: S&P Retains 'BB' Rating on Unsec. Debt Instruments URALSIB-YUG BANK: S&P Affirms 'B/B' Counterparty Credit Ratings VIMPELCOM-INVEST LLC: S&P Retains 'BB+' Rating on Unsecured Debts S P A I N PROMOTORA DE INFORMACIONES: In Advanced Debt Refinancing Talks S W E D E N FORD MOTOR: Clears Major Hurdles in Sale of Volvo Unit SAAB AUTOMOBILE: Sale Cannot Be Concluded S W I T Z E R L A N D SES SOLAR: Reports US$120,800 Net Loss in Q3 2009 U N I T E D K I N G D O M CHESTER ASSET: S&P Keeps Watch Developing on 'BB'-Rated Notes GALA CORAL: Board Backs Mezzanine Creditors' Debt Plan GLOBAL CROSSING UK: Records GBP1.569 Million Net Loss for Q3 GRACECHURCH CARD: S&P Cuts Ratings on Two Classes of Notes to 'B' GRADUS GROUP: Completes GBP25 Mln Debt-for-Equity Swap NEWGATE FUNDING: S&P Puts 'BB'-Rated Notes on CreditWatch Positive SCOTTISH WIDOWS: Moody's Upgrades Junior Debt Rating From 'Ba1' ********* ============= A U S T R I A ============= OSTREGION INVESTMENTGESELLSCHAFT: Moody's Raises Ratings to 'Ba1' ----------------------------------------------------------------- Moody's Investors Service has upgraded to Ba1 from Ba2 the ratings of Ostregion Investmentgesellschaft Nr. 1 S.A. and assigned a positive outlook. The upgrade was driven by the the materially reduced impact that a default by Ambac Assurance UK Limited as guarantor of the senior secured debt raised by the Issuer would have. Bonaventura Strassenerrichtungs-GmbH, entered into a concession agreement with the Autobahnen- und Schnellstrassen-Finanzierungs AG to plan, develop, construct and operate a concession route comprising four motorway sections with a total length of 51.5km in northern Vienna, Austria as the "Project". This is part of the PPP Ostregion Package, comprising four road expansion projects for a total of 113km of new road construction, representing a network of urban and inter-urban motorways to the north, south and east of Vienna. The Issuer is a financing conduit which raised approximately EUR775 million of senior secured debt (EUR425 million of bonds and EUR350 million EIB Loan) to finance the construction phase of the project. Total construction costs, including interest & fees during construction, are close to EUR1 billion. Scheduled principal and interest payments of the bonds and the EIB Loan are unconditionally and irrevocably guaranteed by Ambac, pursuant to financial guarantee insurance policies. The insured or "wrapped" rating of the senior debt is the higher of (i) Ambac's insurance financial strength rating; and (ii) the underlying rating. Prior to April 13, 2009, Ambac's rating was higher than the underlying rating. However, following Ambac's downgrade to Ba3 from Baa1 on April 13, 2009, the underlying rating was higher than Ambac's rating, hence the insured ratings became equal to the underlying rating. Following Ambac's downgrade to Caa2 from Ba3 on July 29, 2009, Moody's was particularly concerned about the senior forward purchase agreement. Under the SFPA, the senior forward bond purchasers agreed to buy and the issuer agreed to sell the bonds on fixed senior forward purchase dates over time. The obligation of a senior forward bond purchaser to purchase the senior forward purchase bonds on a scheduled forward purchase date is subject to no Ambac event of default being outstanding. Given Ambac's low rating, such a default event is not unlikely. This could have potentially affected the remaining funding requirements of the issuer, thus affecting ProjectCo's ability to complete construction. Moody's therefore downgraded the Issuer to Ba2, on review, direction uncertain on September 8, 2009. At the time of the downgrade, ProjectCo had to draw down EUR11.8 million in November 2009 and EUR18 million in May 2010 under the SFPA. The November and May drawdown were to finish construction and fill the debt service reserve account, respectively. ProjectCo had a meeting with the bondholders to explain and clarify the situation with Ambac. Moody's understands that bondholders accept the situation with the Ambac given that the Project is performing. The Issuer successfully completed its November drawdown under the SFPA and therefore has no longer any funding needs under the SFPA to complete construction which considerably reduces the impact of a possible Ambac default. This leaves only one more drawdown, in May 2010, the proceeds of which will be used to fund the DSRA. Drawdowns from the EIB facility are scheduled for December (EUR7 million) this year and January (EUR8 million), June (EUR5 million) next year. Although theoretically the EIB can accelerate if Ambac defaults, it is not expected that the bank will do so. Moody's understands that construction will be completed on time. Section S1 East and S2 are completed and the last two sections A5 and S1W are on track to be completed by 1 February next year. The Issuer's Ba1 rating and positive outlook reflects the fact that the impact of a possible Ambac default is now less material, construction seems to be going as planned and completion is imminent. The previous rating action was on September 8, 2009 when the issuer was downgraded to Ba2 from Baa3. =============== B U L G A R I A =============== SOCIETE GENERALE: Fitch Affirms Individual Rating at 'D' -------------------------------------------------------- Fitch Ratings has affirmed Bulgaria's Societe Generale Expressbank's ratings at Long-term Issuer Default 'BBB+', Short- term 'F2', Individual 'D' and Support '2'. The Outlook remains Negative. SGE's IDRs and Support rating reflect Fitch's view of the high probability of support from its 99.6%-owner, Societe Generale (SG; rated 'A+'/Outlook Stable), in case of need. The Negative Outlook on SGE's Long-term IDR reflects the negative outlook on the Bulgarian sovereign. Should Bulgaria's ratings be downgraded, SGE's Long-term IDRs may also change. The Individual Rating reflects the bank's integration with SG, its reasonable franchise, fairly limited market risk and adequate capitalization. However, this is offset by SGE's worsening asset quality, reliance on group funding and declining performance ratios, as well as some borrower concentration and the deteriorating operating environment in Bulgaria. SGE's operating profits decreased by a third in the first nine months in 2009 compared with a year earlier, as loan growth reduced and loan impairment charges surged. The biggest threat for 2010 profitability is credit costs, which, coupled with lower growth from business volumes when compared to prior years, will put significant pressure on profitability. Fitch notes that risk management benefits from SG's input and oversight, however, non-performing loans, (loans overdue by 90 days) increased significantly to 3% of gross loans at end-9M09, though this ratio remains better than peers'. These were 77% covered at end-9M09. Fitch Ratings expects NPLs to continue to increase as unemployment rises and the operating environment in Bulgaria deteriorates. Additionally, loans in foreign currency could be a cause for concern if there were to be any change in the peg between the euro and the Bulgarian lev. Appetite for market risk at SGE is limited. Funding is largely sourced from contractually short-term (less than one year) customer deposits. However, group funding is significant and is to some extent used to fund growth in operations. Liquidity is tight but potential support from SG provides comfort. Tier 1 and eligible capital ratios improved to adequate levels of 9.7% and 12.2%, respectively, at end-9M09 following a capital increase in June 2009 from SG. SGE aims for a Tier 1 ratio of at least 8%, which Fitch views as only an adequate level, given the bank's risk profile. Founded in 1993, SGE is the eighth-largest bank in Bulgaria by assets (market share of 3.8% at end-9M09). It had a network of 147 outlets across the main Bulgarian cities and is headquartered in Varna. SGE is well integrated into SG, which has owned its stake since 1999 and provides much of the key management. =========================== C Z E C H R E P U B L I C =========================== NORICAN GROUP: Concludes Financial Restructuring Talks ------------------------------------------------------ Norican Group said Tuesday it has concluded its financial restructuring negotiations with the support of its equity investors and existing lenders. "This is a tremendous vote of confidence in the business by both our equity investors and our debt providers", commented Robert E. Joyce Jr., chief executive officer, Norican Group. "Successfully completing this transaction ensures an uninterrupted delivery of value to our customers throughout the world during this unprecedented economic slowdown." "We are pleased with the outcome of this process. This refinancing reinforces our 100 year history and allows us to continue our approach of investing in the future of our business and that of our customers and suppliers" added Andrew J. Matsuyama, chief financial officer. "The new transaction, concluded with the banks will significantly increase the Company's financial flexibility by better matching its debt obligations with the operational cash flow generation profile," added Zbigniew Rekusz, Partner at Mid Europa Partners. "Significant equity contributions from the existing sponsors of Mid Europa Partners and Mezzanine Management and new money injection into the business will improve the capital structure and enhance the financial capabilities of the Norican Group." Mr. Joyce concluded: "The message to all our existing stakeholders is business as usual. Our customers will continue to receive the high quality technical solutions and on-site support they have come to expect from us, our staff will continue to deliver the most innovative products and services in the industry and our partners will continue to benefit from their ongoing relationship with us. Credit goes to our investors (Mid Europa Partners and Mezzanine Management) and our banking syndicate (Nordea, HSH and DnB Nor) for recognizing the inherent value creation potential of this great company. We all look forward to delivering on this potential as the global economy recovers." About Mid Europa Partners Mid Europa Partners -- http://www.mideuropa.com/-- is an independent private equity investment firm focused on Central and Eastern Europe, with approximately EUR3.2 billion of assets under management. Funds managed or advised by MEP typically invest EUR50 million to EUR200 million in mature, cash-flow generative companies with enterprise values ranging from EUR100 million to EUR1,500 million, which have strong market positions in sectors with high barriers to entry. About Mezzanine Management Central Europe Mezzanine Management Central Europe -- http://www.mezzmanagement.com/-- is an independent investment firm and the pioneer of the mezzanine product in the region. It focuses on providing capital to businesses for expansions and acquisitions, management-led equity deals, recapitalizations and buy-outs. Mezzanine is a Central European subordinated debt investor with offices in Austria, Hungary, Poland, Romania and the Ukraine. It has committed and invested over EUR400 million in 27 companies across eight countries. About Norican Group Based in Herlev, Denmark Norican Group -- http://www.noricangroup.com/-- provides technology and services for improving metallic parts. Currently the offer includes all forms of parts formation (horizontal, matchplate & vertical moulding) and surface preparation technologies (airblast, wheelblast and mass finishing). Its core branded technology platforms are DISA and Wheelabrator. The Company employs more than 2,000 people over five continents, with major operations in Canada, China, Czech Republic, Denmark, France, Germany, India, Poland, Switzerland, UK and USA. =========== F R A N C E =========== CMA CGM: Needs US$100MM of U$500 Mln Credit Line Within 10 Days --------------------------------------------------------------- David Whitehouse at Bloomberg News, citing Wansquare, reports that CMA CGM SA is seeking an advance of US$100 million from banks within 10 days. According to Bloomberg, Wansquare said the US$100 million requested would be part of the US$500 million credit line agreed last week. As reported by the Troubled Company Reporter-Europe, Bloomberg News said the company's lenders agreed to grant US$500 million in additional credit after founding Chief Executive Officer Jacques Saade bowed to their demands that he step aside. Bloomberg disclosed family-owned CMA said in an e-mailed statement that it completed an "outline agreement" with banks that will make the cash available in January. Bloomberg said CMA would default on payments if any of its 63 creditor banks invoked the breach of conditions on about 70% of its US$5.6 billion debt. Headquartered in Marseilles, France, CMA CGM S.A. -- http://www.cma-cgm.com/-- ships freight PDQ. The marine transportation company is one of the world's leading container carriers. Through subsidiaries it operates a fleet of about 370 vessels that serve more than 400 ports around the globe, and it maintains a network of about 650 facilities in about 150 countries. In addition to hauling containers by sea, CMA CGM provides logistics services, arranging the transportation of containerized freight by river, road, and rail. The company's tourism division arranges cruises and other travel services. Chairman Jacques Saade founded the company in 1978. THOMSON SA: Suppliers, Banks, Creditors Back Restructuring Plan --------------------------------------------------------- Ragnhild Kjetland at Bloomberg News reports that Thomson SA won approval for its restructuring plan from 98.8% of its creditors committee, paving the way for shareholders to vote on the plan on Jan. 27. According to Bloomberg, under the plan, which includes a share sale, existing owners can retain up to 51% of the company, and not less than 15%, depending on their participation in that sale. Bloomberg relates the company said in a statement on Hugin yesterday's vote came after suppliers and banks approved the plan Monday. Under the plan, announced on Dec. 9, Thomson proposes to cut its gross senior debt by 45% to EUR1.55 billion by selling new shares for about EUR348 million, Bloomberg discloses. It also plans to raise about EUR641 million from notes to senior creditors that will carry mandatory redemption into shares, and EUR300 million by selling disposal-proceeds notes, Bloomberg says. As reported by the Troubled Company Reporter-Europe on Dec. 18, 2009, Thomson filed for Chapter 15 bankruptcy protection before the U.S. Bankruptcy Court for the Southern District of New York in Manhattan to shield assets from U.S. lawsuits while it restructures debt in French court. Thomas disclosed assets and debt both exceed US$1 billion. About Thomson SA France-based Thomson SA -- http://www.thomson.net/- provides technology, services, and systems to Media & Entertainment (M&E) clients, including content creators, content distributors and broadcasters. It has three principal operating divisions: Services, Systems (previously Systems & Equipment) and Technology. The remaining activities are regrouped in two additional segments: Other and Corporate. The Services Division offers end-to-end management of video-related services for its customers in the M&E industries. Systems division plays a role in supplying hardware and software technology for the M&E industries in the areas of production, delivery, management, transmission, and access. Technology division includes activities, such as corporate research; Silicon Solutions: Integrated Circuit design and tuners, and Software & Technology Solutions: video and audio security solutions, and other technologies. In December 2008, the Company sold its digital film equipment product line. ============= G E R M A N Y ============= BAYERISCHE LANDESBANK: Sells 25.2% Landesbank Saar Stake -------------------------------------------------------- Mike Gavin at Bloomberg News reports that Bayerische Landesbank said in an e-mailed statement Monday it has sold a 25.2% stake in Landesbank Saar to the German state of Saarland for EUR65 million (US$93 million). As reported by the Troubled Company Reporter-Europe on Nov. 12, 2009, Bloomberg News said BayernLB expects to post a full-year net loss of more than EUR1 billion (US$1.5 billion) on higher provisions for risky loans and goodwill charges related to its Hypo Alpe-Adria Bank International unit. Bloomberg recalled BayernLB, which owns 67% of Hypo Alpe-Adria, received state aid from the German government in the credit crunch, and the bailout is being investigated by the European Union regulator. On Dec. 16, 2009, the Troubled Company Reporter-Europe, citing Bloomberg News, reported Austria said Dec. 14 it would nationalize Hypo Alpe- Adria and inject as much as EUR450 million (US$659 million) into the company. Bloomberg disclosed BayernLB, Germany's second-biggest state-owned lender, agreed to sell its 67% stake for EUR1 and to inject EUR825 million into the business, following negotiations. According to Bloomberg, under the agreement with the Austrian government, BayernLB is injecting the money by waiving receivables. It will also maintain a credit line of about EUR3 billion to the Austrian bank, Bloomberg noted. Bavarian Premier Horst Seehofer, as cited by Bloomberg, said Dec. 14 BayernLB had a total loss of EUR3.75 billion on Hypo Alpe-Adria. Bayerische Landesbank a.k.a BayernLB -- http://www.bayernlb.de/-- acts as the principal bank to the state of Bavaria and as the central clearing house for the 75 Bavarian sparkassen (savings banks). Also serving corporations, national and local governments, financial institutions, and real estate firms, the bank offers a variety of services, including financing, security underwriting and trading, and risk management. It provides retail and private banking services for individuals through its Internet bank, Deutsche Kreditbank, and through banking subsidiaries in central and southeastern Europe. BayernLB's Landesbank Saar subsidiary (75% owned) provides financing to small and midsized businesses in the German state of Saarland and in France COMMERZBANK AG: Ordered to Pay JPY3 Mil. Over Rand Mispricing ------------------------------------------------------------- The Tokyo Financial Exchange said Monday it will impose a fine of JPY3 million (US$33,198) on Commerzbank AG for inappropriate pricing of South Africa's rand versus the Japanese currency. The exchange, which provides prices for at least 12 currencies, listed the yen's Oct. 30 closing price at 8.435 per rand, compared with a level of 11.4562 per rand quoted on Bloomberg. Bloomberg relates the exchange said the Frankfurt-based bank was the source of the lower bids for the rand, a mispricing that left "hundreds" of currency investors with losses, the Nikkei newspaper reported on Nov. 21. According to the report, the exchange said the lower bids "stemmed from a lack of an appropriate system risk management" and breached rules banning member financial institutions from offering prices that "deviate sharply"from market prices. The bourse, as cited by Bloomberg, said it will ban Commerzbank from market-making services between Dec. 21 and Jan. 3, while asking the German bank to present a report by Dec. 30 on how to improve its operations. On June 22, 2009, the Troubled Company Reporter-Europe, citing Bloomberg News, reported Commerzbank management board member Markus Beumer said the bank plans to repay state aid of EUR16.4 billion or US$22.9 billion as early as 2011 if market conditions are "favorable". Bloomberg disclosed Mr. Beumer also said that the bank plans to return to profitability in 2011 "at the latest." Bloomberg recalled Commerzbank Chief Executive Officer Martin Blessing had to seek EUR18.2 billion in capital from the German government to carry the bank through the financial crisis and the country's worst recession since World War II. The January takeover of Dresdner Bank saddled the company with billions of euros in toxic assets. Headquartered in Frankfurt am Main, Germany, Commerzbank AG -- https://www.commerzbank.com/ -- is the parent company of a financial services group active around the world. The group's operating business is organized into six segments providing each other with mutually beneficial synergies: Private and Business Customers, Mittelstandsbank, Central and Eastern Europe, Corporates & Markets, Commercial Real Estate and Public Finance and Treasury. CONTINENTAL AG: Lender Agreement Won't Affect Fitch's 'B+' Rating ----------------------------------------------------------------- Fitch Ratings says Continental AG's agreement with its lenders for a new loan facility has no impact on its Long-term Issuer Default Rating and senior unsecured rating of 'B+', respectively, which the agency is maintaining on Rating Watch Negative. The Short- term IDR is 'B' and the Recovery Rating on senior unsecured debt is 'RR4'. The ratings were placed on RWN on April 30, 2009 to reflect Fitch's growing concerns about Continental's financial profile against the slump in global vehicle production and the agency's expectation of a protracted weak auto environment. The RWN also reflects considerable refinancing risk for Continental's EUR3.5 billion tranche, related to its Siemens VDO acquisition facility, maturing in August 2010, and ongoing covenant compliance issues. Fitch says the announcement on 19 December 2009 by Continental that it has reached an agreement with its lending banks on a new EUR2.5 billion credit facility as part of a refinancing package does not presently provide sufficient clarity to resolve the watches, particularly that Continental's ability to draw under the new facility is conditional upon the successful implementation of a capital increase to be completed in Q110. Fitch, however, expects that a near-term resolution of the watch status is likely once the final capital increase details become available. Fitch also notes the more favorable terms to Continental following the amendment by the lending banks of the financial covenants in the existing facility agreement. Continental's ratings continue to be supported by its strong market positions in a broad product portfolio, particularly in fuel-efficient technology as well as safety. Fitch also takes into account Continental's extensive restructuring measures to support its free cash flow generation, including a sizeable cost- cutting program and the reduction or postponement of capital expenditure, R&D spending and dividends. Continental is one of the five largest global automotive suppliers with sales of EUR24 billion in FY08 and an adjusted EBIT margin of 7.6%. It focuses on brake systems, vehicle electronics, power train and chassis systems, engineering elastomers, and tyres. GELDILUX-TS-2007 SA: Moody's Junks Rating on Class E Notes From B2 ------------------------------------------------------------------ Moody's Investors Service has taken actions on the long-term credit ratings of these notes issued by Geldilux-TS-2007 S.A.: -- EUR4,500,000 Secured Floating Rate Liquidity Notes due 2012, downgraded to Aa1 from Aaa; previously on 23 March 2009 placed under review for possible downgrade; -- EUR2,024,400,000 Class A Secured Floating Rate Notes due 2012, downgraded to Aa1 from Aaa; previously on 23 March 2009 placed under review for possible downgrade; -- EUR21,000,000 Class B Secured Floating Rate Notes due 2012, downgraded to Baa2 from A2; previously on 23 March 2009 placed under review for possible downgrade; -- EUR21,000,000 Class C Secured Floating Rate Notes due 2012, downgraded to Ba2 from Baa2; previously on 23 March 2009 placed under review for possible downgrade; -- EUR8,400,000 Class D Secured Floating Rate Notes due 2012, downgraded to B3 from Ba2; previously on 23 March 2009 placed under review for possible downgrade; -- EUR4,200,000 Class E Secured Floating Rate Notes due 2012, downgraded to Caa3 from B2; previously on 23 March 2009 placed under review for possible downgrade; Moody's initially assigned definitive ratings in May 2007. The last rating action date was March 23, 2009. The rating action concludes the review for downgrade which was initiated on March 23, 2009 as a result of Moody's revision of its methodology for SME granular portfolios in EMEA (published on March 17, 2009). As a result of its revised methodology, Moody's has reviewed its assumptions for Geldilux-TS-2007 S.A. collateral portfolio, taking into account anticipation of performance deterioration of the pool in the current down cycle and sector concentrations including the real estate sector. The deterioration of the German economy has been reflected in Moody's negative sector outlook for the German SME securitization transactions. Moody's has reviewed the default probability of the pool of corporate and SME debtors for Geldilux-TS-2007 S.A. to be equivalent to a Ba1/Ba2 rating with a remaining weighted average life of three months. Moody's also took into account the portfolio replenishment criteria on industry and obligor concentrations. As a consequence, these revised assumptions have translated into a cumulative mean default assumption of 0.3% over 90 days and a coefficient of variation (defined as the ratio between the standard deviation and the mean) of 180%. Moody's original mean default assumption was 0.05% over 90 days which corresponded to a Baa2 rating, and the coefficient of variation was 75%. The average recovery rate assumption remains unchanged at 25% on average. In its analysis, Moody's used a default distribution derived from CDOROMTM (v2.5), whereas initially, a lognormal default distribution was applied. Geldilux-TS-2007 S.A. is a true sale German SME transaction closed May 3, 2007. The Class A to Class E Notes were issued to finance the purchase of receivables arising from the portfolio of short- term loans denominated in Euros granted by UniCredit Luxembourg S.A. (A3/P-2/C-/Stable Outlook) to medium-sized companies, small businesses and individuals mainly in Germany pursuant to their Euro-Loan program. Replenishments take place on a daily basis until the end of the replenishment period in March 2012. As of December 2009, the main sector concentration was in the "Real estate" sector with approximately 33.7% of the pool. Moody's ratings address the expected loss posed to investors by the legal final maturity of the notes. Moody's ratings address only the credit risks associated with the transaction. Other non- credit risks have not been addressed, but may have a significant effect on yield to investors. Moody's is closely monitoring the transaction. GENERAL MOTORS: GM to Present Opel Restructuring Plan in January ---------------------------------------------------------------- General Motors Corporation's restructuring plan for its Opel and Vauxhall operations in Europe will be delayed until January 2010, GM Europe President Nick Reilly said in a blog post dated December 10, 2009. "Although we had hoped to have the new business model finalized in December, it appears that more work needs to be done and further consultations will not be rushed," Mr. Reilly noted. GM Europe has said that it will provide a detailed plan for its European operations by mid-December, AP reported. GM had angered officials for backing out of the lengthy negotiations with Magna International Inc. and Savings Bank of the Russian Federation for the finalization of the sale of Opel. Mr. Reilly disclosed that early in December 2009, he met with Germany Works Council Chairman Klaus Franz a union meeting in Germany, as well as governmental and European Union officials in Brussels to discuss viability plans for Opel. He also noted that he had visited Opel and Vauxhall sites throughout Europe to discuss specifics with local plant managers and employee representatives, and held a day-long meeting with senior Opel leadership "to strategize on what needs be done now and in the New Year." Agreeing to Mr. Franz's opinion, Mr. Reilly thinks that the future in Europe, as it relates to the Opel operations "looks great." "To ensure that prosperous future, our company needs great products and a winning product portfolio, which includes future technologies and investments." Opel's restructuring "is going to be one of the largest, most complex industrial reorganizations in European manufacturing in years, [affecting] thousands of people and their families; impact plants and other stakeholders," Mr. Reilly wrote. Given this, "it looks like an announcement may slip into January, according to Mr. Reilly. "This is not a broken promise. It is a pledge to do something right," he concluded. In a separate report, GM said that it will not move its European headquarters to Germany as previously announced, according to the Associated Press, citing a statement from Opel spokesman Andreas Kroemer. "The old headquarters will simply cease to exist in its current ways. "All relevant operations of Opel and Vauxhall will be bundled in Ruesselsheim," Mr. Kroemer added. Opel and its sister Vauxhall employ around 48,000 people in Europe, more than 24,000 of them in Germany, the AP noted. Opel also announced on December 15, 2009, that Walter G. Borst has been appointed as supervisory board chairman succeeding Carl-Peter Forster, who left the post in November 2009, following GM's failed sale of Opel to Magna/Sberbank, the Wall Street Journal reported. About General Motors General Motors Company -- http://www.gm.com/-- is one of the world's largest automakers, tracing its roots back to 1908. With its global headquarters in Detroit, GM employs 209,000 people in every major region of the world and does business in some 140 countries. GM and its strategic partners produce cars and trucks in 34 countries, and sell and service these vehicles through these brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, Opel, Vauxhall and Wuling. GM's largest national market is the United States, followed by China, Brazil, the United Kingdom, Canada, Russia and Germany. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM acquired its operations from General Motors Company, n/k/a Motors Liquidation Company, on July 10, 2009, pursuant to a sale under Section 363 of the Bankruptcy Code. Motors Liquidation or Old GM is the subject of a pending Chapter 11 reorganization case before the U.S. Bankruptcy Court for the Southern District of New York. At September 30, 2009, GM had US$107.45 billion in total assets against US$135.60 billion in total liabilities. About Motors Liquidation 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) HSH NORDBANK: Moody's Affirms 'E+' Bank Financial Strength Rating ----------------------------------------------------------------- Moody's Investors Service has placed these ratings of HSH Nordbank AG on review for possible downgrade: the A2 senior debt and deposit ratings, the A3 rating for subordinated debt and the Prime-1 short-term rating. However, "grandfathered" debt is not affected. At the same time, Moody's has affirmed HSH's E+ bank financial strength rating, which carries a developing outlook and currently maps directly to a B1 stand-alone baseline credit assessment. In addition, the rating agency has affirmed the bank's Caa1/negative rating for hybrid securities. Review to Focus on Gradually Declining Support Assumptions Moody's ratings review will focus on the likelihood and impact of a gradual decline in the external support assumptions that are currently incorporated in the debt and deposit ratings. Currently, the bank's debt and deposit ratings benefit from an uplift of eight notches from its BCA. "Specifically, Moody's review will assess the probability of future external support from the current owners, most prominently the State of Schleswig-Holstein and Hamburg, and of co-operative support," explained Uwe Barth, a Moody's Assistant Vice President and lead analyst for German banks. The rating agency is concerned that, going forward, both potential sources of external assistance may not be as readily available in future. Moody's notes that the State of Schleswig-Holstein and Hamburg recently provided HSH with a EUR3 billion capital injection and a risk shield amounting to EUR10 billion. Given the support providers' own stretched balance sheets and available financial flexibility, this support was substantial and therefore reduces the likelihood of future support. "Moreover, there is an increasing likelihood that the public sector owners, which currently hold an 85% share in the bank, will have to significantly reduce or even dispose of their stakes. This could be a result of the European Commission's compensation package in return for state aid approval," explained Mr. Barth. In addition, the review of HSH's support assumptions is also triggered by Moody's view that the bank's very high integration within public-sector support mechanisms will be reduced over time and that the importance of such supports for the local savings banks will decrease, given the expected change in ownership. Multi-Notch Downgrade for Debt Rating Is Possible Moody's review could result in a significant change of the currently "very high" probability of support. In this case, the debt and deposit ratings could be affected by more than a single-notch downgrade. As a result, the short-term rating could also be affected, although Moody's does not expect it to drop by more than one notch. Outlook on E+ BFSR Remains Developing, and Is a Constraint For The Debt Rating Moody's acknowledges that HSH has strengthened its financial and risk profiles and also that senior management will strive to achieve further improvements. A major step has already been taken by bolstering capital adequacy through support measures. A further step was management's creation of a sizeable restructuring unit within the bank to enable HSH to better manage the run-off process of its non-core assets and activities. Moody's also notes that the bank is constantly improving its risk management, with the aim of reducing its market exposure, and unwinding non-core positions -- all of which may eventually improve the BFSR. At this stage, however, several factors are still constraining any upward rating pressure on Moody's stand-alone assessment: 1.) Ongoing pressurized macroeconomic conditions in all of HSH's main operating markets. This adverse situation may continue to seriously hurt the bank's shipping and commercial real estate portfolios. 2.) Continued earnings volatility, given the bank's high reliance on cyclical, less profitable business segments as well as the considerable cost associated with the recent capitalization measures and the establishment of the risk shield. 3.) Some concerns over the bank's capability to rebuild an adequate funding franchise following the phase-out of the government's Financial Market Stabilization Funds liquidity support measures. 4.) Swiftly restoring high-quality corporate governance standards as well as leadership stability after the notable management upheaval over recent months. Given these constraints, however, there is still a likelihood that Moody's could over time reposition the B1 stand-alone BCA within the E+ BFSR category, which ranges from a B1 to B3 stand-alone assessment. The uncertainties about the direction of HSH's BFSR are reflected in the developing outlook. If the BFSR were to move upwards, this shift would likely be limited to only a few notches (D level). Moreover, the positive rating migration of the BFSR may not fully offset the expected gradual decline in external support. The rating action reflects this view. Rating History Moody's previous rating action on HSH was implemented on April 23, 2009, when the ratings on bank's long-term debt and deposit ratings were downgraded to A2 from A1, and its BFSR to E+ from D. Unaffected by the rating action are HSH's Aa1 ratings for those obligations that can qualify for the grandfathering of "Anstaltslast" (a maintenance obligation) and of "Gewaehrtraegerhaftung" (a guarantee obligation) -- both of which were abolished in July 2005. Also unaffected were the bank's Aaa ratings for obligations guaranteed by the Federal Republic of Germany. Headquartered in Hamburg and Kiel, Germany, HSH reported total assets of around EUR186 billion at September 30, 2009. HYPO REAL: Germany's Soffin Extends Rescue Package By a Year ------------------------------------------------------------ Oliver Suess at Bloomberg News reports that Hypo Real Estate Holding AG said Germany's Soffin bank rescue fund and financial institutions agreed to extend an existing financial rescue package by a year. According to Bloomberg, Hypo Real Estate said in an e-mailed statement Monday that, of an extended liquidity facility of EUR43 billion (US$62 billion), a group of German financial institutions has subscribed to about EUR23 billion, while the lender's Deutsche Pfandbriefbank unit will issue EUR20 billion in Soffin-guaranteed securities. Hypo Real Estate, as cited by Bloomberg, said the financial rescue package, which the bank since reduced to EUR95 billion, also includes EUR52 billion in Soffin guarantees, which will expire by the end of June 2010. Bloomberg recalls Germany's bank-rescue fund took full-ownership of the bank in October following a so-called squeeze-out. The company needed a total of EUR102 billion in credit lines and debt guarantees from the German government and financial institutions to save it from collapse last year when its Depfa Bank Plc unit failed to get short-term funding, Bloomberg recounts. About Hypo Real Estate Germany-based Hypo Real Estate Holding AG (FRA:HRXG) -- http://www.hyporealestate.com/-- is a German holding company for the Hypo Real Estate Group. It is an international real estate financing company, combining commercial real estate financing products with investment banking. The Company divides its operations into three business units: Commercial Real Estate, which provides real estate financing on the international and German market; Public Sector & Infrastructure Finance, and Capital Markets & Asset Management. Hypo Real Estate Group operates through a number of subsidiaries, including, among others, Hypo Real Estate Bank International AG that focuses on Pfandbrief-based commercial real estate financing in all international markets, and offers large-volume investment banking and structured finance transactions; Hypo Real Estate Bank AG that focuses on the commercial real estate financing and refinancing business in Germany, and DEPFA Bank plc in Dublin, Ireland, which is a provider of public finance. KLOECKNER & CO: Moody's Affirms 'Ba2' Corporate Family Rating ------------------------------------------------------------- Moody's Investors Service has affirmed the Ba2 corporate family rating of Kloeckner & Co. S.E. The outlook has been changed to stable. The decision has been prompted by the expectation that the decline in Kloeckner's performance has bottomed and that its profitability will become positive again in 2010. Through a rights issue in mid 2009 (EUR200 million), a convertible bond issue (EUR98 million) and rigorous working capital management KloeCo's overall capital structure and liquidity profile have improved significantly. Liquidity, which was one of the major concerns at the time the outlook was changed to negative in March 2009, has been improved considerably with the change of KloeCo's covenants under its bank and ABS facilities and the very high positive free cash flow generated, helped by a substantial reduction in net working capital. Previous performance based covenants have been replaced with a gearing covenant. The company's net adjusted debt has been reduced significantly from EUR 1.2 billion in 2008 to EUR464 million per September 30, 2009. In the third quarter 2009 the company has been able to achieve a positive EBITDA of EUR17 million as adjusted by Moody's. Although markets should improve somewhat in the next year, Moody's remains cautious about the future development given the fact that currently a large part of the steel demand is driven by re- stocking rather than a fundamental turnaround in the industries of the end customers such as the automotive industry, the engineering segment and the construction industry. Moody's notes that the envisaged acquisition of Becker Stahl- Service Group complements Kloeckner's distribution business and increases the company's profitability through an upstream integration leading to less dependency on external steel service centers. The transaction is likely to be financed with cash and will increase net debt levels accordingly. Going forward Kloeckner is likely to seek further external growth on an opportunistic basis. The current rating incorporates the assumption that in 2010 Kloeckner will not undergo further material acquisitions and in 2011 acquisition spend would not be higher than in 2010. Moreover, Moody's expects a continued conservative dividend policy with a low dividend payout ratio. The stable outlook is based on the expectation that the company will achieve an adjusted debt/ EBITDA level below 3.5x and RCF/ net adjusted debt above the high teens in the next financial year. The rating could be revised down if the company is not successful in improving its leverage metrics again to levels more commensurate with the current rating category by improving the operating performance in the short to medium term. In addition pressure on the rating could result from a more aggressive debt- financed acquisition strategy which would also result in leverage ratios to be worse than the above mentioned thresholds. An upgrade could be considered if the company sustainably achieves an improvement in its debt/EBITDA ratio to below 2.5x. Kloeckner's ratings were assigned by evaluating factors Moody's believe are relevant to the credit profile of the issuer, such as i) the business risk and competitive position of the company versus others within its industry, ii) the capital structure and financial risk of the company, iii) the projected performance of the company over the near to intermediate term, and iv) management's track record and tolerance for risk. These attributes were compared against other issuers both within and outside of Kloeckner's core industry and Kloeckner's ratings are believed to be comparable to those of other issuers of similar credit risk Moody's last rating action on Kloeckner was to change the outlook of the company's Ba2 corporate family rating from stable to negative on March 11, 2009. Headquartered in Duisburg, Germany, Kloeckner & Co. SE is one of the leading independent steel and metal distributors in the European and North American markets. In the last twelve months ending on September 30, 2009, the company reported sales of EUR4.4 billion and EBITDA of EUR -286 million. ========= I T A L Y ========= ITALFINANCE SECURITISATION: Fitch Junks Rating on Class 1-D Notes ----------------------------------------------------------------- Fitch Ratings has taken these rating actions with respect to Italfinance Securitisation Vehicle 2 S.r.l. Series 2007-1's notes: -- EUR882.56 million class 1-A floating-rate notes: downgraded to 'AA' from 'AAA'; Outlook Stable; assigned Loss Severity Rating (LS) of 'LS1'. -- EUR125 million class 1-B floating-rate notes: downgraded to 'BBB' from 'A'; Outlook Stable; assigned 'LS2'. -- EUR84.3 million class 1-C floating-rate notes: downgraded to 'B' from 'BBB'; Outlook Negative; assigned 'LS3'. -- EUR27.9 million class 1-D floating-rate notes: downgraded to 'CCC' from 'BBB-'; assigned Recovery Rating (RR) of 'RR5'. Italfinance is a securitization of financial lease contracts originated by Banca Italease S.p.A. and Mercantile Leasing S.p.A in Italy. The downgrade reflects the worse-than-expected performance of the transaction. Since April 2008, the transaction has being performing worse than Fitch's base case assumptions for gross and net defaults. As of October 2009, the cumulative gross default ratio stood at 4.52% against a base case of 1.93%, and the cumulative net default ratio was 2.58% compared to a base case of 1.76%. During the last interest payment date on October 14, 2009, the transaction "net cumulative default ratio" was 2.58%, above the trigger level of 2.5% set for the cash trapping trigger. As such, an amount of EUR1.83 million has been trapped in the "collection account" and will be used at the next IPD as quarterly available funds to redeem the notes. Since the closing date, all gross defaults ("defaulted lease contracts") have been provisioned into the transaction structure. During the IPDs in October 2008, April, July and October 2009 the originator bought back a total amount of EUR36.58 million of defaulted receivables and the resulting proceeds to the issuer were made part of the quarterly available funds under recoveries. This allowed the structure to cover all its PDL (Principal Deficiency Ledger) shortfalls so far. If this had not been done, the Fitch ESR (Excess Spread Ratio) would have been negative during the same quarterly periods (October 2008 -1.32%, April 2009 -0.3%, July 2009 -4.5% and October 2009 -2.29%) and the PDL would have shown a negative balance in the same periods (October 2008 EUR-5.59 million, April 2009 EUR-1.11 million, July 2009 EUR-15.31 million and October 2009 EUR-7.11 million). The credit enhancement levels of the rated notes in percentage terms since July 2008, the start of the amortization period, have been increasing due to the sequential amortization of the notes. However, the CE amount available for each rated class has not changed, compared to the amounts at closing. Fitch will continue to closely monitor the transaction. SESTANTE FINANCE: Fitch Junks Ratings on Three Tranches ------------------------------------------------------- Fitch Ratings has downgraded six and affirmed two tranches from the Sestante Finance PLC series of Italian RMBS transactions. The transactions are backed by residential mortgage loans originated by Meliorbanca SpA (BBB+/F2). The ratings are listed below. The downgrades in Sestante Finance 2 S.r.l. and Sestante Finance 3 S.r.l. are a result of the continued deterioration in the performance of the underlying collateral portfolios. Loans in arrears for more than three months have remained high in comparison to other Italian RMBS transactions at 5.42% and 5.00%, respectively for Sestante 2 and 3 in October 2009. Defaults in the Sestante series transactions are defined as loans in arrears by more than 12 months. Reported cumulative net defaults have risen to 3.48% and 3.31% in October 2009 from 2.94% and 2.85% in July 2009, respectively. The Sestante series transactions feature a provisioning mechanism to write off defaulted loans using available revenue funds. Although this is a positive feature as it utilizes available excess revenue, it has also led to the depletion of the cash reserve fund in both transactions to cover defaulted loans. Sestante 3 was not able to clear its principal deficiency ledger (PDL) in October 2009 leaving EUR1.9 million allocated to the transaction PDL. Fitch expects continued defaults to be written to the PDL due to the provisioning mechanism, preventing the reserve funds from being replenished in the near future. The significant rating actions taken on the junior C2 notes reflect Fitch's expectation of increasing defaults and their impact on the already limited interest available funds. Although the Class C2 notes will be receiving interest senior to the PDL and pari passu with the C1 notes, the targeted amount of principal allocated to these notes are junior to the PDL in the transactions priority of payments. Therefore the expected increase in defaults and a continuation of low recoveries will hinder payments due on these notes. Currently, Sestante 2 has cleared its PDL; however available revenues were not enough to pay the full C2 principal target amortization amount in October 2009 and Sestante 3 made no principal payments to the C2 note in October. Fitch also notes the importance of the timing of recoveries expected on the defaulted loans. An increase in recoveries in the forthcoming quarters could significantly improve the cashflow of the transactions, however given the Agency's recovery timing expectations for Italy a large increase in recoveries is not currently expected to occur. The recovery performance to date has been poor for both transactions. So far the reported cumulative recoveries are 0.33% for Sestante 2 and 0.16% for Sestante 3 as of October 2009. Rating actions are: Sestante Finance 2 S.r.l: -- Class A (ISIN IT0003760136): affirmed at 'AAA'; Outlook revised to Negative from Stable; assigned a Loss Severity Rating of 'LS-1' -- Class B (ISIN IT0003760193): downgraded to 'BBB+' from 'A+'; Outlook Negative; assigned a Loss Severity Rating of 'LS-3' -- Class C1 (ISIN IT0003760227): downgraded to 'B' from 'BB+'; Outlook Negative; assigned a Loss Severity Rating of 'LS-4' -- Class C2 (ISIN IT0003760243): downgraded to 'CCC' from 'BB+'; assigned a Recovery Rating of 'RR5' Sestante Finance S.r.l - 3: -- Class A (ISIN IT0003937452): affirmed at 'AAA'; Outlook revised to Negative from Stable; assigned a Loss Severity Rating of 'LS-1' -- Class B (ISIN IT0003937486): downgraded to 'BBB' from 'A+'; Outlook Negative; assigned a Loss Severity Rating of 'LS-3' -- Class C1 (ISIN IT0003937510): downgraded to 'CCC' from 'BB'; assigned a Recovery Rating of 'RR4' -- Class C2 (ISIN IT0003937569): downgraded to 'CC' from 'BB'; assigned a Recovery Rating of 'RR5' Fitch has employed its credit cover multiple methodology in reviewing the deals to assess the level of credit support available to each class of notes. =================== K A Z A K H S T A N =================== ALAN INVEST: Creditors Must File Claims by December 30 ------------------------------------------------------ JSC Joint Stock Investment Fund of Risk Investing Alan Invest is currently undergoing liquidation. Creditors have until December 30, 2009, to submit proofs of claim to: Timiryazev Str. 15b Almaty Kazakhstan ASTANA KULAGER: Creditors Must File Claims by December 30 --------------------------------------------------------- Creditors of LLP Astana Kulager Oil have until December 30, 2009, to submit proofs of claim to: Kravtsov Str. 18 Astana Kazakhstan The Specialized Inter-Regional Economic Court of Astana commenced bankruptcy proceedings against the company on September 25, 2009, after finding it insolvent. The Court is located at: The Specialized Inter-Regional Economic Court of Astana Abai Ave. 36 Astana Kazakhstan ATF BANK: Fitch Changes Outlook to Stable; Affirms 'D/E' Rating --------------------------------------------------------------- Fitch Ratings has revised ATF Bank's Outlook to Stable from Negative. Fitch has simultaneously affirmed ATF's Long-term foreign and local currency Issuer Default Ratings at 'BBB' respectively. The change in Outlook follows the agency's similar rating action with respect to Kazahkstan's Outlook. ATF Bank's IDRs and Support Rating of '2' are driven by potential support from the bank's ultimate owner, UniCredit S.p.A. (rated 'A'/'F1'/Negative). Given UC's ability and propensity to provide support, Fitch believes there is a high probability that support would be forthcoming, if required. However, the ability of ATF to utilise this support to meet obligations to creditors may be limited by Kazakhstan transfer and convertibility risks, as reflected in the Country Ceiling of 'BBB'. ATF's Individual Rating, which Fitch affirmed at 'D/E', reflects the bank's weak asset quality and its potential further deterioration due to high borrower concentrations and its exposure to the construction/real estate sectors, as well as the still challenging credit environment. In addition, Fitch notes ATF's moderate loss absorption capacity and capitalization relative to the bank's risk profile. However, the agency also takes into account some improvements in risk management and better access to funding following ATF's acquisition by UC in 2007. The rating actions are: -- Long-term foreign currency IDR; affirmed at 'BBB'; Outlook revised to Stable from Negative -- Short-term foreign currency IDR: affirmed at 'F3' -- Long-term local currency IDR: affirmed at 'BBB'; Outlook revised to Stable from Negative -- Senior unsecured debt: affirmed at 'BBB' -- Support Rating: affirmed at '2' -- Individual Rating: affirmed at 'D/E' -- National Long-term rating: affirmed at 'AAA(kaz)'; Outlook Stable -- National senior unsecured debt rating: affirmed at 'AAA(kaz)' ATF was the fifth-largest bank in Kazakhstan, holding around 9.7% of system assets, at end-October 2009. It is primarily a corporate bank with 144 outlets, located throughout Kazakhstan. UC has introduced experienced international senior management into ATF to take control of its operations and is bringing ATF's internal procedures in line with the broader UCI group. BTA BANK: Net Loss Widens to US$13.9 Mln This Year, FSA Says ------------------------------------------------------------ Nariman Gizitdinov at Bloomberg News reports that Kazakhstan's Financial Supervision Agency said BTA Bank's net loss widened to KZT2.06 trillion (US$13.9 billion) this year. BTA, the biggest of four Kazakh lenders to default this year, had a net loss of 35 billion tenge last month, Bloomberg discloses. Bloomberg relates the nation's financial regulator said on its Web site Monday BTA's assets under Kazakh financial standards declined to KZT2.08 trillion on Dec. 1 from KZT2.95 trillion on the same date last year. Bloomberg recalls the state-run National Wellbeing Fund took control of BTA in February and the bank defaulted in April after credit markets froze and Kazakhstan's property bubble burst. Debt Restructuring As reported by the Troubled Company Reporter-Europe on Dec. 10, 2009, Bloomberg News said BTA signed a non-binding agreement with creditors on options for restructuring its debt. Bloomberg disclosed the bank reached a compromise with bondholders that will give them cash and new securities equal to about half of the US$11.6 billion they are owed. Bloomberg said under the agreement, BTA plans to pay about US$1 billion in cash to the creditors and issue US$2.3 billion of new senior debt and about US$797 million of subordinated debt. BTA Bank AO (BTA Bank JSC), formerly Bank TuranAlem AO -- http://bta.kz/-- is a Kazakhstan-based financial institution, which is involved in the provision of banking and financial products for private and corporate clients. The Bank has in its offer personal banking services, comprised of current accounts, savings accounts, term deposits, safety deposit boxes, money transfer services, credit facilities, and corporate banking services, including business accounts, credit facilities, treasury services, letters of guarantee, letters of credit, foreign exchange services, remittances and other solutions, as well as debt and credit cards, card services and electronic banking services. The Bank has 14 subsidiaries and six affiliated companies. It offers its services through a network of numerous regional branches, cash settlement centers throughout Kazakhstan and international representative offices located in Ukraine, Russia, China and the United Arab Emirates. FOOD CONTRACT: Moody's Downgrades Corporate Family Rating to 'Ba3' ------------------------------------------------------------------ Moody's Investors Service has downgraded the corporate family rating and probability of default rating of JSC National Company Food Contract Corporation to Ba3 from Ba1. The outlook on the company's CFR is stable. The rating action concludes the review on the company's rating initiated on July 15, 2009. The downgrade of FCC's CFR mainly reflects Moody's concerns on the timeliness of ongoing government support despite taking into consideration the decision of the Kazakh government to increase FCC's capital by US$122 million (around KZT18 billion). While Moody's believes this increase should allow FCC to maintain sufficient headroom from March 2010 onwards, the capital increase has yet to materialize. Current ratings also assume Moody's expectation of continuing support from all foreign lending banks, which granted a waiver to FCC's financial covenants until February 2010 to prevent a breach of its covenants in 2009. FCC's Debt/Equity ratio increased as a result of the decision of the Kazakh government to grant a loan to its agency to pre-finance the 2009 grain harvest. The loan increased FCC's reported financial liabilities reducing the headroom under this covenant. The outlook on the company's rating is stable reflecting Moody's expectation that the lending banks and the Kazakh Republic will continue to remain supportive of the company to meet its financial commitments going forward in a timely manner. However, Moody's believes negative pressure on the rating could occur if headroom under the covenants remains limited and/or support from the Kazakh government does not materialize in a timely fashion if needed. The last rating action was implemented on July 15, 2009, when Moody's downgraded to Ba1 from Baa3 the senior unsecured issuer rating of FCC. Concurrently, Moody's withdrew the company's issuer rating and assigned a Ba1 CFR and PDR to the company. All the company's ratings were placed under review for possible downgrade. Headquartered in Astana, Kazakhstan, JSC National Company Food Contract Corporation is fully owned by the Kazakh Republic through the National Holding KazAgro. FCC's principal mandate is to maintain state grain reserves at the levels required to supply Kazakhstan and to ensure timely grain replenishment. At the end of December 2008, FCC employed 1,718 people and reported revenues at KZT35 billion, up from KZT24 billion the previous year. KAZAKH AGRARIAN: S&P Downgrades Long-Term Issuer Rating to 'BB' --------------------------------------------------------------- Standard & Poor's Ratings Services said that it had lowered its long-term issuer credit and Kazakhstan national scale ratings on Kazakh Agrarian Credit Corp., a state-owned provider of subsidized credit to agricultural and nonagricultural businesses in rural areas throughout the Republic of Kazakhstan (foreign currency BBB-/Stable/A-3; local currency BBB/Stable/A-3; Kazakhstan national scale 'kzAAA'), to 'BB' from 'BB+', and to 'kzA+' from 'kzAA-'. The ratings, including the 'B' short-term issuer credit rating, remain on CreditWatch with negative implications, where they were placed on June 16, 2009. "The downgrade reflects that, contrary to S&P's expectations, KACC has not finalized its negotiations on its US$136 million loan with a covenant breached in July," said Standard & Poor's credit analyst Boris Kopeykin. The standstill on these negotiations weighs negatively on S&P's assessment of the likelihood of extraordinary government support. S&P believes that the government is not paying as much attention as S&P would have expected to the rapid resolution of the issue. S&P also believes that pressure on KACC to finalize the deal has loosened. S&P has therefore reviewed its assessment of the importance of KACC's role for the Kazakh government, which S&P now consider as "important" instead of "very important". This in turn affects S&P's assessment of the likelihood of timely and sufficient extraordinary support from the Kazakh government to KACC, which S&P now assesses as "high" rather than "very high". The ratings continue to be constrained by the largely untested quality of KACC's rapidly expanding loan portfolio in Kazakhstan's difficult operating environment, and by KACC's high lending concentration and foreign currency risks. KACC's very low balance-sheet liquidity also constrains the ratings. The ratings are supported by significant ongoing state support to KACC, and high capitalization. "The ratings remain on CreditWatch because Commerzbank might demand immediate repayment of the large US$136 million loan because of a breached covenant," said Mr. Kopeykin. Standard & Poor's aims to resolve the CreditWatch placement on completion of KACC's discussions with Commerzbank, which KACC reportedly intends to finalize soon, and on S&P's analysis of all the new terms and conditions of the loan. If KACC and Commerzbank agree on a new and gradual repayment schedule for the loan, or if the government provides timely and sufficient support for an early repayment, then S&P is likely to affirm the ratings on KACC at the current level with a stable outlook, after S&P update its analysis of KACC's liquidity risk and stand-alone credit profile. "However, if Commerzbank accelerates the loan, and in such case the government fails to provide sufficient support on a timely basis, it could default on this obligation," added Mr. Kopeykin. This would in turn result in S&P's downgrading KACC to 'SD' (selective default). S&P continues to consider this scenario to be unlikely, given the government's repeated statements indicating support for KACC, as well as tangible signs of support. However, the probability of such a scenario is increasing because the negotiations have already taken much longer than S&P initially expected. KEDEN TRANS: Creditors Must File Claims by December 30 ------------------------------------------------------ Representation of JSC Keden Trans Service is currently undergoing liquidation. Creditors have until December 30, 2009, to submit proofs of claim to: Auezov Str. 46 Astana Kazakhstan LANYSH ENERGY: Creditors Must File Claims by December 30 -------------------------------------------------------- Creditors of LLP Lanysh Energy have until December 30, 2009, to submit proofs of claim to: The Specialized Inter-Regional Economic Court of Aktobe Satpaev Str. 16 Aktobe Kazakhstan The court commenced bankruptcy proceedings against the company on October 16, 2009. NEFTE PRODUCT: Creditors Must File Claims by December 30 -------------------------------------------------------- Creditors of LLP Nefte Product Service have until December 30, 2009, to submit proofs of claim. The Specialized Inter-Regional Economic Court of Almaty commenced bankruptcy proceedings against the company on September 29, 2009, after finding it insolvent. The Court is located at: The Specialized Inter-Regional Economic Court of Almaty Baizakov Str. 273b Almaty Kazakhstan Inquiries can be addressed to 8 (7272) 75-23-99. SEMEY TSEMENT: Creditors Must File Claims by December 30 -------------------------------------------------------- Creditors of JSC Semey Tsement have until December 30, 2009, to submit proofs of claim to: The Specialized Inter-Regional Economic Court of East Kazakhstan Bajov Str. 2 Ust-Kamenogorsk East Kazakhstan Kazakhstan The court commenced bankruptcy proceedings against the company on September 23, 2009. SIRIUS STAR: Creditors Must File Claims by December 30 ------------------------------------------------------ LLP Sirius Star Oil Ltd. is currently undergoing liquidation. Creditors have until December 30, 2009, to submit proofs of claim to: Drujba Str. 14-5 Atyrau Kazakhstan SMART CONSUMER: Creditors Must File Claims by December 30 --------------------------------------------------------- Representation of Company Smart Consumer Products FZE is currently undergoing liquidation. Creditors have until December 30, 2009, to submit proofs of claim to: Jybek Joly Str. 50 Almaty Kazakhstan STATE ANNUITY: Fitch Assigns 'BB' Insurer Fin'l Strength Rating --------------------------------------------------------------- Fitch Ratings has assigned Kazakhstan-based Life Insurance Company State Annuity Company JSC an International Insurer Financial Strength rating of 'BB' and a National IFS rating of 'A (kaz)'. The Outlooks on both ratings are Stable. The ratings take into account the company's weak standalone financial profile and the benefit derived from its 100% ownership by the Kazakhstani Ministry of Labour and Social Protection (Kazakhstan's long-term Issuer Default Rating is BBB-, Stable Outlook). The ratings factor in significant uplift from the sovereign rating. In Fitch's view, although State Annuity Company fulfils an important social role in promoting the development of the country's life insurance sector, the state would be less likely to provide support to the company in case of need than to other state-owned enterprises, even though Fitch expects it would have the ability to do so. This reflects State Annuity Company's lower strategic importance compared with other state-owned enterprises and lower contribution to GDP on account of its small size. The agency recognizes the operational linkage between State Annuity Company and the Kazakhstani government, including the presence of government ministers on the board of directors and the capital support that has been provided to date. Fitch views State Annuity Company's standalone financial strength as weak due to the relatively low credit quality of its investment portfolio, the low diversification of its product offering, its small absolute size, short operating history and the risks of participating in a line of business with a long-tail liability profile for which limited statistical data is available in Kazakhstan. However, Fitch notes the company's good market position and profitable operating performance in 2008 and 2009. State Annuity Company offers ten insurance products although its portfolio is constituted almost exclusively of annuity insurance. Fitch believes that the company has high exposure to investment risk and longevity risk, particularly in light of its short track record and limited statistical information on which to base pricing and reserving. The agency also notes the weak credit quality of the corporate bond portfolio (27% of total investments) and some of the banks with which cash and deposits are placed (35% of total investments). In addition, the company's assets and liabilities are not matched due to the limited range of investment assets in Kazakhstan. In 2008, State Annuity Company generated a profit of KZT23.5 million and Fitch expects the company to record a profit in FY09. In Fitch's view, the main triggers for an upgrade or downgrade of the rating are changes in the standalone financial strength of the company and changes in Fitch's view of the sovereign. The rating is not solely linked to the sovereign rating of Kazakhstan and, as such, Fitch does not expect that a change in the sovereign rating would directly lead to a corresponding change in the rating of State Annuity Company. State Annuity Company was established in 2005 and is a leading provider of annuity insurance in Kazakhstan under the framework of a law on compulsory civil liability insurance for employers for injury to the life and health of employees in the performance of work-related duties. At November 1, 2009 the company had a market share of 34% for the provision of annuity insurance and had net assets of KZT1.1 billion. TECH DESIGN: Creditors Must File Claims by December 30 ------------------------------------------------------ Creditors of LLP Tech Design NT have until December 30, 2009, to submit proofs of claim to: Kravtsov Str. 18 Astana Kazakhstan The Specialized Inter-Regional Economic Court of Astana commenced bankruptcy proceedings against the company on September 25, 2009, after finding it insolvent. The Court is located at: The Specialized Inter-Regional Economic Court of Astana Abai Ave. 36 Astana Kazakhstan TEMIRBANK AO: CDS Triggered by Failure-to-Pay Credit Event ---------------------------------------------------------- Abigail Moses at Bloomberg News, citing the International Swaps & Derivatives Association, reports that credit-default swaps on Temirbank have been triggered by a "failure-to-pay credit event." According to Bloomberg, ISDA said on its Web site Monday the contracts won't be settled at auction. As reported by the Troubled Company Reporter-Europe, Bloomberg News said Temirbank missed debt payments on Nov. 6 and Nov. 9. Bloomberg disclosed the default followed the "substantial deterioration" of Temirbank's loan holdings, which pushed regulatory capital below the required minimum and could have cost the bank its license. About Temirbank Temirbank AO (Temirbank JSC) -- http://en.temirbank.kz/-- is a Kazakhstan-based financial institution rendering a range of services both to corporate and individual clients. Corporate customer services include a cash-settlement services, loans, documentary operations, safe deposit boxes and cash-in-transit service. Retail customer services include deposits, loans, wire transfers, payment processing services, travelers' checks, safe deposit boxes and other services in national and foreign currencies. It also provides the Internet banking services. The Bank operates through 21 branches and 121 centers on banking services on the territory of Kazakhstan. Temirbank AO has one wholly owned subsidiary Temir Capital BV located in the Netherlands. * * * As reported by the Troubled Company Reporter-Europe on Nov. 25, 2009, Fitch Ratings downgraded Kazakhstan-based Temirbank's Long-term Issuer Default Rating to 'RD' (Restricted Default) from 'CC', thereby resolving the Rating Watch Negative on the rating. VOSTOK PROM: Creditors Must File Claims by December 30 ------------------------------------------------------ Creditors of LLP Vostok Prom Complect have until December 30, 2009, to submit proofs of claim to: Utepov Str. 34-29 Ust-Kamenogorsk East Kazakhstan Kazakhstan The Specialized Inter-Regional Economic Court of East Kazakhstan commenced bankruptcy proceedings against the company on September 25, 2009, after finding it insolvent. The Court is located at: The Specialized Inter-Regional Economic Court of East Kazakhstan Ust-Kamenogorsk East Kazakhstan Kazakhstan =================== K Y R G Y Z S T A N =================== AL SHANS: Creditors Must File Claims by January 20 -------------------------------------------------- LLC Al Shans Trans is currently undergoing liquidation. Creditors have until January 20, 2010, to submit proofs of claim to: Kensai Savai Kara-Suisky District Osh Kyrgyzstan HAJY RAVSHAN: Creditors Must File Claims by January 20 ------------------------------------------------------ LLC Hajy Ravshan Meenet is currently undergoing liquidation. Creditors have until January 20, 2010, to submit proofs of claim to: Manas Street Djalal-Abad Kyrgyzstan =========== L A T V I A =========== PAREX BANKA: Fitch Affirms Issuer Default Ratings at 'RD' --------------------------------------------------------- Fitch Ratings has affirmed Parex Banka's Long- and Short-term Issuer Default Ratings at 'RD' and Norvik Banka's Long- and Short- term IDRs at 'B'. Fitch has simultaneously removed Norvik's Long- term IDR from Rating Watch Negative and removed AS SEB Banka's Support Rating from RWN. The agency has assigned Norvik's Long- term IDR a Negative Outlook. A full rating breakdown is provided at the end of this comment. The removal of RWN from Norvik and AS SEB Banka reflects the fact that that risks to depositor confidence in Latvia from deposit restrictions imposed on Parex have been contained and did not lead to system-wide stress. Fitch notes that there was nonetheless some outflow in the system -- in Q309 customer deposits were reduced by 2.6%, of which non-resident deposits shank by 3.4% and resident accounts by 1.2% -- although this should be viewed in the context of the severe recession affecting Latvia's economy. Fitch projects a cumulative 27% fall in real GDP during 2008-2010. The affirmation of Parex's IDRs at 'RD' reflects the extension of deposit restrictions imposed on the bank by the Latvian banking regulator till June 30, 2010. Fitch notes that the restrictions have been softened gradually since they were first introduced in December 2008, and that amount of restricted funds dropped about twofold to LVL330 million (over 600 customers), and apply to pre- dominantly large non-resident deposits in foreign currency. However, restricted deposits constitute a material part of the bank's obligations and Fitch views this as a restricted default. Parex has been experiencing ongoing deleveraging, losses, pressure on asset quality, outflow of non-resident deposits (resident deposits appear more stable), improving but still weak liquidity and the need to continuously inject fresh capital. However, the Latvian authorities have contributed an unprecedented amount of capital and liquidity in the bank and the sovereign guaranteed syndicated loans issued by Parex. The participation of the European Bank for Reconstruction and Development as a minority shareholder should also be positive for the bank's risk profile. Upward pressure on Parex's IDRs could arise from a removal of the deposit restriction and/or from a successful restructuring of Parex. Norvik's ratings and Negative Outlook reflect its significantly deteriorated asset quality in the notably worsened operating environment and moderate loss absorption capacity as a result of low level of reserves. The ratings also consider its rather stable deposit base and low refinancing risk. Norvik's asset quality has continued to deteriorate, and NPLs, defined as loans more than 90 days overdue, made up 20.3% of gross lending at end-Q309. In addition, restructured loans amounted to 11.4% of the total loan book at end-Q309. Reserve coverage of NPLs is low at 22% (end-2008: 23%), and uncovered impaired loans amounted to 70% of the bank's core capital at end-Q309. However, most NPLs are secured by collateral in the form of real estate, vessels and other tangible assets. Norvik's ratings could be affected by downward pressure due to a further deterioration in asset quality substantial enough to negatively impact capitalization of the bank. In Fitch's opinion there is high probability that support for AS SEB Banka would be provided by its ultimate parent, Skandinaviska Enskilda Banken (SEB, 'A+'/Stable) due to its 100% ownership, strategic importance, close integration and public statements of support made by the parent. The rating actions are: Parex Banka: -- Long-term IDR: affirmed at 'RD' -- Senior unsecured debt: affirmed at 'CC'/'RR4' -- Short-term IDR: affirmed at 'RD' -- Individual Rating: affirmed at 'F' -- Support Rating: affirmed at '5' -- Support Rating Floor: affirmed at 'NF' Norvik Banka: -- Long-term IDR: affirmed at 'B'; removed from RWN; assigned a Negative Outlook -- Short-term IDR: affirmed at 'B'; removed from RWN -- Individual Rating: affirmed at 'D/E'; removed from RWN -- Support Rating: affirmed at '5' -- Support Rating Floor: affirmed at 'NF' AS SEB Banka: -- Support Rating: affirmed at '2'; removed from RWN Parex was the third-largest and largest domestically-controlled bank in Latvia by assets with a 12.5% market share at end-H109. Since December 2008, it has been majority-owned by the state. The EBRD became a minority shareholder in 2009 with a 25% + 1 share. The bank is in the process of restructuring. Norvik Banka was the tenth-largest bank by assets in the country, with a market share of 2.1%, at end-Q309. Its distribution network at end-H109 included seven branches and about 68 small settlement offices, located mainly in commercial outlets. Straumborg, an Icelandic investment company, is the majority shareholder. AS SEB Banka was the second-largest bank by assets in Latvia at end-H109 with 13.7% market share. Apart from banking, AS SEB Banka provides leasing, pension fund and asset management services as well as life insurance through its subsidiaries. Its customer deposit base continued to shrink through 2009, resulting in a reduction of 20.6% (non-annualized) in the first three quarters of 2009. ===================== N E T H E R L A N D S ===================== ARES EUROPEAN: Moody's Keep Ratings on Various Notes ---------------------------------------------------- Moody's Investors Service has determined that the ratings currently assigned to Ares European CLO II B.V. will not, at this time, be reduced or withdrawn solely as a result of the execution of a Supplemental Trust Deed dated as of December 9, 2009. The Supplemental Deed allows the Issuer to establish tax blocker subsidiaries solely to acquire, hold and dispose of certain securities (such as equity interests in an operating company) it may receive in a bankruptcy proceeding or restructuring as "Equity Securities", and is designed to ensure that the Issuer will not be deemed to be engaged in a U.S. trade or business as a result of an exchange of collateral obligations for such Equity Securities. The Issuer is a high yield cash flow collateralized loan obligation managed by Ares Management Limited The last Rating Actions for this transaction were taken on August 4, 2009, when the Class A Senior Secured Floating Rate Notes were downgraded to Aa2; the Class B Senior Secured Floating Rate Notes were downgraded to Baa2; the Class C Senior Secured Deferrable Floating Rate Notes were downgraded to Ba3; the Class D Senior Secured Deferrable Floating Rate Notes were downgraded to B3; and the Class Q Combination Notes were downgraded to B2. DUCHESS IV: Moody's Cuts Rating on EUR32.8MM Class D Notes to 'B3' ------------------------------------------------------------------ Moody's Investors Service has taken these rating actions on notes issued by Duchess IV CLO B.V. -- EUR295.9M Class A-1 First Priority Senior Secured Floating Rate Notes due 2020, Downgraded to Aa1; previously on May 19, 2005 Assigned Aaa -- EUR48.2M Revolving Loan Facility due 2020, Downgraded to Aa1; previously on May 19, 2005 Assigned Aaa -- EUR38M Class B Second Priority Deferrable Secured Floating Rate Notes due 2020, Downgraded to Baa1; previously on Mar 4, 2009 Aa2 Placed Under Review for Possible Downgrade -- EUR30.1M Class C Third Priority Deferrable Secured Floating Rate Notes due 2020, Downgraded to Ba1; previously on Mar 19, 2009 Downgraded to Baa3 and Remained On Review for Possible Downgrade -- EUR32.8M Class D Fourth Priority Deferrable Secured Floating Rate Notes due 2020, Downgraded to B3; previously on Mar 19, 2009 Downgraded to B1 and Remained On Review for Possible Downgrade -- EUR12.5M Class L Combination Notes due 2020, Downgraded to A3; previously on Mar 4, 2009 Aa1 Placed Under Review for Possible Downgrade -- EUR4.977M Class N Combination Notes due 2020, Downgraded to A3; previously on Mar 4, 2009 Aa1 Placed Under Review for Possible Downgrade -- EUR9.634M Class V Combination Notes due 2020, Downgraded to A3; previously on Mar 4, 2009 Aa1 Placed Under Review for Possible Downgrade -- EUR4M Class W Combination Notes due 2020, Downgraded to Ba3; previously on Mar 4, 2009 A3 Placed Under Review for Possible Downgrade The rating actions on Class L, Class N and Class V notes align their ratings to that of Citigroup Global Markets Holdings Inc. Each of these combination notes consists of Citigroup Global Markets Holdings Inc EMTN and Class F notes. This transaction is a managed cash leveraged loan collateralized loan obligation with exposure to predominantly European senior secured loans, as well as about 16% mezzanine loan exposure. The rating actions on the Revolving Loan Facility, Class A-1, Class B, Class C, Class D and Class W notes reflect Moody's revised assumptions with respect to default probability and the calculation of the diversity score as described in the press release dated February 4, 2009, titled "Moody's updates key assumptions for rating CLOs." These revised assumptions have been applied to all corporate credits in the underlying portfolio, the revised assumptions for the treatment of ratings on "Review for Possible Downgrade", "Review for Possible Upgrade", or with a "Negative Outlook" being applied to those corporate credits that are publicly rated. Moody's also notes that a material proportion of the collateral pool consists of debt obligations whose credit quality has been assessed through Moody's credit estimates. As credit estimates do not carry credit indicators such as ratings reviews and outlooks, a stress of a quarter notch-equivalent assumed downgrade was applied to each of these estimates. According to Moody's, the rating actions taken on these notes are also a result of credit deterioration of the underlying portfolio. This is observed through a decline in the average credit rating as measured through the portfolio weighted average rating factor 'WARF' (currently 2607), an increase in the amount of defaulted securities (currently 9% of the portfolio), an increase in the proportion of securities from issuers rated Caa1 and below (currently 6.82% of the portfolio), and a failure of Class E par value test. These measures were taken from the recent trustee report dated November 12, 2009. Moody's also performed a number of sensitivity analyses, including consideration of a further decline in portfolio WARF quality. In addition to the quantitative factors that are explicitly modeled, qualitative factors are part of the rating committee considerations. These qualitative factors include the structural protections in each transaction, the recent deal performance in the current market environment, the legal environment, specific documentation features, the collateral manager's track record, and the potential for 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. EUROCREDIT CDO: Moody's Cuts Rating on Class R Notes to 'Caa3' -------------------------------------------------------------- Moody's Investors Service has taken these rating actions on notes issued by Eurocredit CDO II B.V. -- EUR76M Class I-B Senior Notes, Downgraded to Baa2; previously on Mar 4, 2009 Aa2 Placed Under Review for Possible Downgrade -- EUR34M Class II Mezzanine Notes, Downgraded to Caa2; previously on Mar 20, 2009 Downgraded to B1 and Remained On Review for Possible Downgrade -- EUR13M Class III Mezzanine Notes, Confirmed at Caa3; previously on Mar 20, 2009 Downgraded to Caa3 and Remained On Review for Possible Downgrade -- EUR25M Class Q Combination Notes (current outstanding rated balance EUR 0.8M), Downgraded to Baa3; previously on Dec 14, 2000 Confirmed at Baa1 -- EUR14M Class R Combination Notes (current outstanding rated balance EUR 7.9M), Downgraded to Caa3; previously on Mar 4, 2009 Ba3 Placed Under Review for Possible Downgrade -- EUR3M Class S Combination Notes (current outstanding rated balance EUR 0M), Withdrawn; previously on Dec 14, 2000 Confirmed at Ba2 The Class Q; R and S Combination Notes have been monitored using Moody's standard Structured Note methodology. Therefore, the ratings on the Combination Notes address the expected loss posed to investors by the legal final maturity as a proportion of the Rated Balance, where the Rated Balance is equal on any payment date to the Rated Balance on the preceding payment date (increased, for the Class R Combination Notes only by the Rated Coupon of 7.572% per annum) reduced by the aggregate of all payments made on such payment date, either through interest or principal. These ratings definitions differ from the closing ratings definitions, as the Class Q and Class S were described as principal only ratings, and Class R as an expected loss rating relative to a 7.572% IRR measured as of closing date. However the underlying corresponding analytical approaches are fundamentally equivalent, and the use of the Structured Note Methodology, as further described in the Moody's Rating Methodology paper listed below, should be viewed as analytical enhancements to Moody's analysis. As the Rated Balance of the Class S Combination Notes has been reduced to zero following a sufficient amount of cash flow payments since inception of the transaction, Moody's has withdrawn its rating on this class of Notes. This transaction is a managed collateralized loan obligation with exposure to European senior secured loans, High Yield Securities (42.5%) as well as some mezzanine loan exposure (2%). The rating actions reflect Moody's revised assumptions with respect to default probability and the calculation of the diversity score as described in the press release dated February 4, 2009, titled "Moody's updates key assumptions for rating CLOs." These revised assumptions have been applied to all corporate credits in the underlying portfolio, the revised assumptions for the treatment of ratings on "Review for Possible Downgrade", "Review for Possible Upgrade", or with a "Negative Outlook" being applied to those corporate credits that are publicly rated. Moody's also notes that a material proportion of the collateral pool consists of debt obligations whose credit quality has been assessed through Moody's credit estimates. As credit estimates do not carry credit indicators such as ratings reviews and outlooks, a stress of a quarter notch-equivalent assumed downgrade was applied to each of these estimates. According to Moody's, the rating actions taken on the notes are also a result of credit deterioration of the underlying portfolio. This is observed through a decline in the average credit rating as measured through the portfolio weighted average rating factor 'WARF' (currently 3421) and an increase in the proportion of securities from issuers rated Caa1 and below (currently approximately 20.13% of the portfolio). These measures were taken from the recent trustee report dated November 30, 2009. Moody's also performed a number of sensitivity analyses, including consideration of a further decline in portfolio WARF quality combined with a decrease in the expected recovery rates. Due to the impact of all the aforementioned stresses, key model inputs used by Moody's in its analysis, such as par, weighted average rating factor, and weighted average recovery rate, may be different from trustee's reported numbers =========== R U S S I A =========== ARCHANGEL DIAMOND: Wins Confirmation of Chapter 11 Plan ------------------------------------------------------- Archangel Diamond Corporation (TSX VENTURE:AAD.H) announces that on December 17, 2009, the United States Bankruptcy Court for the District of Colorado entered an order confirming Archangel's Amended Plan of Liquidation. An involuntary Chapter 7 liquidation bankruptcy proceeding was initiated against Archangel on June 26, 2009. Archangel converted the Chapter 7 proceeding to a Chapter 11 reorganization proceeding on September 3, 2009, and it filed its Plan of Liquidation on the same day. Archangel obtained debtor-in-possession financing from Firebird Global Master Fund, Ltd. Archangel filed the Plan on November 4, 2009, and distributed the disclosure statement for the Plan and balloting materials on November 5, 2009. Votes to accept or reject the Plan received prior to the December 3, 2009 balloting deadline were counted. One hundred percent of those creditors voting and 100% of those equity holders voting voted to accept the Plan. The confirmation hearing on the Plan was held on December 11, 2009. The Plan transfers the assets of Archangel -- being substantially Archangel's legal proceedings against AGD, LUKoil and certain related parties -- to a trust of which the Corporation's creditors as of June 26, 2009 and the Corporation's equity holders as of September 3, 2009 are beneficiaries, and otherwise sets forth the treatment of such creditors and equity holders. The Order approves the treatment of creditors and equity holders of the Corporation and establishes the binding legal effect of the Plan. The claims of creditors as against Archangel were extinguished and are now reflected as interests in the Liquidating Trust. Archangel intends to apply for a recognition order from the Ontario Superior Court of Justice which will domesticate the Order and its effect in Canada. As a result, Archangel will have no assets, nor liabilities, nor any business or undertaking. Subsequently, Archangel intends to apply to the NEX Board of the TSX Venture Exchange for the voluntary delisting of its common shares and will call a special meeting of Archangel's shareholders, anticipated to be held in the first quarter of 2010, to approve the delisting and the voluntary filing of Articles of Dissolution of Archangel. Full particulars concerning the special business to be considered at the special meeting will be contained in Archangel's management information circular which will be mailed in late January, 2010. About Archangel Diamond Archangel Diamond (NEX BOARD:AAD.H) is a Canadian diamond company focused on exploration and mining in Russia. The company is listed on the Toronto Venture Exchange (trading symbol AAD). Three creditors filed a petition to send Archangel Diamond Corporation to liquidation under Chapter 7 of the U.S. Bankruptcy Code on June 26, 2009 (Bankr. D. Colo. Case No. 09-22621). Archangel subsequently converted its case to a Chapter 11 bankruptcy. EVRAZ GROUP: Moody's Changes Outlook on 'B1' Rating to Stable ------------------------------------------------------------- Moody's changed the outlook of B1 corporate family rating of Evraz to stable. At the same time the outlook of the B2 ratings for Senior Unsecured Notes totaling US$2,242 million due in 2013, 2015, and 2018 were changed to stable from negative. This rating action was prompted by the fact that the company received a positive resolution with adequate headroom for the financial covenants to face contingencies in a timely manner both from the syndicate banks and the bondholders. Moody's also notes that the debt maturity profile was extended. Recent placement of the rouble bond totaling RUR20 billion and one-year extension of US$1,006 million loan from VEB helped Evraz's to maintain satisfactory liquidity position at least for the next 12 months. Furthermore, the company has made a material progress in the first nine months of 2009 with a reduction in total by US$ 2.6 billion to US$7.7 billion from US$10.3 billion as of December 31, 2008. The rating continues to reflect the view that Evraz will display at the end of 2009 relatively weak credit metrics, in spite of some improvements observed in the 3Q 2009 and that the recovery of the financial performance will likely be slow despite the positive measures taken by management to adjust the cost base. The rating is supported by Moody's expectation that the company should be able to continue to generate free cash flow in 2009 and 2010, which would be instrumental in reducing the absolute level of debt going forward. At the same time, the rating reflects that Evraz is a strong global competitor with a cost efficient assets base and a business profile that has gained geographical diversity, thereby reducing the dependence on Russia, in the past few years. The last rating action was on September 28, 2009 when Moody's downgraded CFR of Evraz from Ba3 to B1 with a negative outlook. Evraz Group is one of the largest vertically integrated steel companies in Russia (by volume and assets) with assets also in Europe, North America and South Africa that produced 17.6 million tones of steel products, reported revenue of US$20.39 billion (58.6% increase Y-o-Y) and EBITDA of US$ 6.35 billion (45.9% increase Y-o-Y) in 2008. In the 1H 2009 the company reported US$4.6 billion in revenue (57% decrease H-o-H) and EBITDA of US$468 million (87% decrease H-o-H). Evraz's principal assets are steel plants in Russia, Europe, North America, South Africa and Ukraine, iron ore and processing facilities, as well as coal mines, logistics and trading assets. MOBILE TELESYSTEMS: S&P Retains 'BB' Rating on Unsecured Debts -------------------------------------------------------------- Standard & Poor's Ratings Services said that it had assigned a recovery rating of '3' on the Russian ruble (RUR) unsecured bonds (RUR10 billion due 2013, RUR10 billion due 2015, RUR10 billion due 2018, RUR15 billion due 2014, and RUR15 billion due 2016) issued by Russian mobile operator Mobile TeleSystems (OJSC) (BB/Stable/ --). The recovery rating indicates S&P's expectation of meaningful (50%-70%) recovery in the event of a payment default. The issue-level ratings on these unsecured debt instruments remains 'BB', in line with the 'BB' corporate credit rating on MTS. The issue rating on the US$400 million bonds due 2010 and US$400 million bonds due 2012 issued by Mobile Telesystems Finance S.A., guaranteed by MTS is 'BB', in line with the corporate credit rating on MTS. The recovery rating on these notes is '3', indicating S&P's expectation of meaningful (50%-70%) recovery in the event of a payment default. Recovery Analysis S&P has valued the company on a going-concern basis. Given MTS' leading market positions in Russia and the Commonwealth of Independent States, established network assets, and valuable customer base, S&P believes that a default would most likely result from excessive leverage as a result of operating underperformance. At the hypothetical point of default S&P value the company at about US$6.2 billion. The issue-level and recovery ratings on the unsecured debt take into account the nature of MTS' assets, the probability of a restructuring or going-concern sale, and the likelihood of insolvency proceedings being adversely influenced by MTS' being domiciled in Russia. Lack of security and weak documentary protection highlight the risk that the capital structure might evolve along the path to default, with potential for additional debt to be raised with parity or priority to the rated unsecured debt instruments. Any change in the group's financial policy and capital structure could significantly affect S&P's hypothetical default scenario and waterfall analysis, and thereby impair recovery prospects for the bonds. SISTEMA JSFC: S&P Retains 'BB' Rating on Unsec. Debt Instruments ---------------------------------------------------------------- Standard & Poor's Ratings Services said that it had assigned a recovery rating of '4' to the Russian ruble (RUR) unsecured bonds (RUR20 billion due 2014, RUR6 billion due 2013 and RUR19 billion due 2016) issued by Russian holding company Sistema (JSFC) (BB/Negative/--). The '4' recovery rating indicates S&P's expectation of average (30%-50%) recovery in the event of a payment default. The issue-level ratings on these unsecured debt instruments remains 'BB', in line with the 'BB' corporate credit rating on Sistema. The issue rating on the US$350 million bonds due 2011 issued by Sistema Capital S.A., and guaranteed by Sistema is 'BB', in line with the corporate credit rating on the parent company, Sistema. The recovery rating on these notes is '4', indicating S&P's expectation of average (30%-50%) recovery in the event of a payment default. Recovery Analysis S&P has valued the company based on the stressed value of its asset portfolio. Given Sistema's valuable and diversified assets, with exposure to various companies with leading market positions; established network assets; and valuable customer base in Russia's telecoms and oil businesses, S&P believes that a default would most likely be triggered by a significant reduction of dividends upstream, as a result of operating underperformance -- mainly in the telecoms business. S&P also sees a risk that possible debt- funded acquisitions at the Sistema level could exacerbate these risks. As part of its analysis, S&P has assumed that the secured debt at the holding company level will be refinanced with unsecured debt instruments at operating companies. The issue-level and recovery ratings on the unsecured debt take into account the nature of Sistema' assets and the likelihood of insolvency proceedings being adversely influenced by Sistema's being domiciled in Russia. The recovery ratings on the notes are based on the current capital structure (unsecured debt instruments raised at the holding company level), which, given the weak documentary protections (in particular against raising new debt), could change materially on the path to default. Any change in the group's financial policy and capital structure -- such as additional debt raised with parity or priority to these unsecured debt instruments -- could significantly affect S&P's hypothetical default scenario and waterfall analysis, and thereby impair recovery prospects for the bonds. URALSIB-YUG BANK: S&P Affirms 'B/B' Counterparty Credit Ratings --------------------------------------------------------------- Standard & Poor's Ratings Services said that it had affirmed its 'B/B' long and short-term counterparty credit ratings and its 'ruA-' Russia national scale rating on Russia-based URALSIB-YUG Bank OJSC. The outlook was revised to positive from developing. "This follows the bank's Extraordinary General Meeting held on Dec. 11, 2009, where shareholders approved the final decision to merge with Bank URALSIB (OJSC) (B+/Negative/B)," said Standard & Poor's credit analyst Maria Malyukova. "S&P understand that the transaction should be completed during the third quarter of 2010." S&P subsequently withdrew its ratings on URALSIB-YUG Bank at the bank's request. At the time of withdrawal the bank had no rated debt outstanding. VIMPELCOM-INVEST LLC: S&P Retains 'BB+' Rating on Unsecured Debts ----------------------------------------------------------------- Standard & Poor's Ratings Services said that it had assigned a recovery rating of '3' to the Russian ruble (RUR) unsecured bonds (RUR10 billion and RUR5 billion bonds due 2013 and RUR10 billion bonds due 2014) issued by VimpelCom-Invest (LLC) and fully guaranteed by Russia-based mobile operator Vimpel-Communications (JSC) (BB+/Negative/--). The recovery rating indicates S&P's expectation of meaningful (50%-70%) recovery in the event of a payment default. The issue-level ratings on these unsecured debt instruments remains 'BB+', in line with the 'BB+' corporate credit rating on VimpelCom. The issue ratings on the foreign currency unsecured debt issues of VimpelCom are 'BB+', the same as the corporate credit rating. The recovery rating on these notes is '3', indicating S&P's expectation of meaningful (50%-70%) recovery in the event of a payment default. Recovery Analysis S&P has valued the company on a going-concern basis. Given VimpelCom's leading market positions in Russia and the Commonwealth of Independent States, established network assets, and valuable customer base, S&P believes that a default would most likely result from excessive leverage as a result of operating underperformance. At the hypothetical point of default S&P value the company at about US$4.7 billion. The issue-level and recovery ratings on the unsecured debt take into account the nature of VimpelCom's assets, the probability of a restructuring or going-concern sale, and the likelihood of insolvency proceedings being adversely influenced by VimpelCom's being domiciled in Russia. ========= S P A I N ========= PROMOTORA DE INFORMACIONES: In Advanced Debt Refinancing Talks -------------------------------------------------------------- Paul Tobin at Bloomberg News reports that Promotora de Informaciones SA said talks to refinance about EUR5 billion (US$7.2 billion) of debt are "very advanced" after it completed a plan to sell assets. According to Bloomberg, Prisa Chief Executive Officer Juan Luis Cebrian said Monday in an interview at Prisa's headquarters the company will finish talks with lenders before its EUR1.95-billion bridge loan matures in March 2010. Bloomberg recalls in the past year, Mr. Cebrian has closed two unprofitable businesses and sold stakes in the group's Portuguese unit, the book publishing division, pay-TV business and free-to- air channel Cuatro to raise cash and reduce borrowings. Mr. Cebrian, as cited by Bloomberg, said to further strengthen its financial position, Prisa is in talks with potential investors and aims to reach an agreement in a "reasonably short period of time." "We are considering doing a private placement or maybe selling a bond," Bloomberg quoted Mr. Cebrian as saying. "We are in advanced talks with potential investors. We are talking with more than one and depending on what agreement we reach, the structure of the transaction can change." Promotora de Informaciones S.A. (PRISA) -- http://www.prisa.com/ -- is a Spain-based holding company, engaged in various media activities. The Company has six business areas: publishing, education and training (Grupo Santillana publishes textbooks and books of general interest); press (El Pais Internacional is engaged in the distribution of news material and services to other newspapers and publications worldwide); radio (Union Radio is a group broadcasting worldwide); audiovisual (PRISA offers services and products, including Pay TV, thorough the satellite platform DIGITAL+, and free-to-view through the channel Cuatro); online (Prisacom is committed to the development of multimedia content with broadcasting for Internet-based TV) as well as commercial & marketing (Sogecable Media SA manages all the advertising on the Company and its group's media). The Company is present in 22 countries, such as Portugal, Brazil or the United States. =========== S W E D E N =========== FORD MOTOR: Clears Major Hurdles in Sale of Volvo Unit ------------------------------------------------------ People familiar with the matter told The Wall Street Journal's Matthew Dolan that Ford Motor Co. is expected to announce this week that the major hurdles have been cleared in its effort to sell its Volvo unit, enabling the auto maker to complete the sale to a Chinese company by early 2010,. The announcement could come as soon as Wednesday in the form of a letter sent by Volvo chief executive Stephen Odell to employees of the Swedish brand wholly owned by Ford, one person familiar with the matter told the Journal. The source, according to Mr. Dolan, said Ford is expected to confirm some of the progress earlier announced by Zhejiang Geely Holding Group, one of China's biggest auto makers, which had been earlier identified as the preferred bidder for Volvo. The Journal relates Geely said in late November that it had reached an agreement with Ford on intellectual-property rights involving Volvo, addressing what had been a key stumbling block for a possible acquisition. Still, the timing of any final deal at that time was unclear, according to Mr. Dolan. Mr. Dolan relates Volvo officials declined to comment on the matter Tuesday. Other sources, according to Mr. Dolan, said that several issues remained unresolved, including how to protect Ford's intellectual property. One source told the Journal the purpose of the upcoming announcement would be two-fold: -- To give Volvo's an update on the talks 20,000 employees; and -- To reassure the Chinese government that the deal remained on track. Geely has reached agreements for loans for the Volvo bid from Bank of China Ltd., China Construction Bank Corp. and Export-Import Bank of China, the Journal reports. The Journal also says a Ford announcement would signal that the chances for a rival bid from a consortium led by two former Ford executives had dimmed. The Journal notes the Crown consortium had been led by former Ford director Michael Dingman and former Ford and Chrysler LLC executive Shamel Rushwin and included participation by Swedish investors. One source told the Journal, Geely is financing a roughly US$2 billon bid for Volvo with a combination of cash, bank loans and funds from a small number of investors. That source said those investors include a government-owned fund based in Tianjin, China. Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) http://www.ford.com/-- manufactures or distributes automobiles across six continents. With about 200,000 employees and about 90 plants worldwide, the company's automotive brands include Ford, Lincoln, Mercury and Volvo. The company provides financial services through Ford Motor Credit Company. At September 30, 2009, the Company had US$203.106 billion in total assets against US$210.376 billion in total liabilities. On March 4, 2009, Ford deferred future interest payments on its 6.50% Junior Subordinated Convertible Debentures due January 15, 2032, beginning with the April 15, 2009 quarterly interest payment. * * * As reported by the Troubled Company Reporter on November 4, 2009, Moody's Investors Service upgraded the senior unsecured rating of Ford Motor Credit Company LLC to B3 from Caa1. This follows Moody's upgrade of Ford Motor Company's corporate family rating to B3 from Caa1, with a stable outlook. Ford Credit's long-term ratings remain on review for further possible upgrade. On Nov. 3, 2009, S&P raised the corporate credit ratings on Ford Motor Co. and Ford Motor Credit Co. LLC to 'B-' from 'CCC+'. Ford Motor Co. carries a long-term issuer default rating of 'CCC', with a positive outlook, from Fitch Ratings. SAAB AUTOMOBILE: Sale Cannot Be Concluded ----------------------------------------- General Motors disclosed that the intended sale of Saab Automobile AB would not be concluded. After the withdrawal of Koenigsegg Group AB last month, GM had been in discussions with Spyker Cars about its interest in acquiring Saab. During the due diligence, certain issues arose that both parties believe could not be resolved. As a result, GM will start an orderly wind-down of Saab operations. "Despite the best efforts of all involved, it has become very clear that the due diligence required to complete this complex transaction could not be executed in a reasonable time. In order to maintain operations, Saab needed a quick resolution," said GM Europe President Nick Reilly. "We regret that we were not able to complete this transaction with Spyker Cars. We will work closely with the Saab organization to wind down the business in an orderly and responsible manner. This is not a bankruptcy or forced liquidation process. Consequently, we expect Saab to satisfy debts including supplier payments, and to wind down production and the distribution channel in an orderly manner while looking after our customers." Saab will continue to honor warranties, while providing service and spare parts to current Saab owners around the world. As part of its efforts to become a leaner organization, GM began seeking a buyer for Saab's operations in January. Saab Automobile AB announced that it had closed on the sale of certain Saab 9-3, current 9-5 and powertrain technology and tooling to Beijing Automotive Industry Holdings Co. Ltd. (BAIC). GM expects today's announcement to have no impact on the earlier sale. As the company continues to reinvent itself, GM has been faced with some very difficult but necessary business decisions. The focus will remain on the four core brands -- Buick, Cadillac, Chevrolet and GMC -- and several regional brands, including Opel / Vauxhall in Europe. This will enable the company to devote more engineering and marketing resources to each brand and model. General Motors Company, one of the world's largest automakers, traces its roots back to 1908. With its global headquarters in Detroit, GM employs 209,000 people in every major region of the world and does business in some 140 countries. GM and its strategic partners produce cars and trucks in 34 countries, and sell and service these vehicles through the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, Opel, Vauxhall, Wuling and Jiefang. About SAAB The Troubled Company Reporter Europe, citing Bloomberg News, reported on Feb. 23, 2009, Saab filed for protection from creditors after parent GM said it will cut ties with the Swedish carmaker following two decades of losses. The Trollhaettan, Sweden-based company filed for reorganization with a Swedish district court to separate itself from GM and bring resources back to Sweden. On June 25, 2009, Troubled Company Reporter, citing The Wall Street Journal, reported creditors of Saab approved the automakers' proposal for settling its debts by paying a quarter of what it originally owed. Saab proposed to settle its debts by paying 25% of about US$1.34 billion it owed to more than 600 creditors, including auto suppliers and the Swedish government. The vast majority of the debt, almost SEK10 billion, was owed to GM. Saab Automobile AB -- http://www.saab.com/-- is a wholly owned subsidiary of General Motors. With an annual production of up to 126,000 cars, Saab's current models include the 9-3 (available as a convertible or sport sedan), the luxury 9-5 sedan (also available in a sport wagon), and the seven-passenger 9-7X SUV. ===================== S W I T Z E R L A N D ===================== SES SOLAR: Reports US$120,800 Net Loss in Q3 2009 ------------------------------------------------- SES Solar Inc. reported a net loss of US$120,799 for the three months ended September 30, 2009, compared with a net loss of US$856,403 for the same period of 2008. The Company recognizes revenue on the completed-contract method, and therefore when projects are completed. During the three months ended September 30, 2009, the Company generated total revenue of US$38,046 compared to US$1,569 for the three months ended September 30, 2008. The decrease in net loss during the three months ended September 30, 2009, was due to US$518,032 of favorable foreign exchange rate conditions between the Swiss franc and the U.S. dollar and a reduction in interest expense and general and administrative expenses during the three month period ended September 30, 2009. Nine Months Results The Company reported a net loss of US$763,563 for the nine months ended September 30, 2009, compared with a net loss of US$355,790 for the same period last year. During the nine months ended September 30, 2009, the Company completed several projects and generated total revenue of US$1.3 million compared to US$34,161 for the nine months ended September 30, 2008. The increase in net loss during the nine months ended September 30, 2009, compared to 2008 is due largely to the fact that the Company generated income from discontinued operations for the nine months ended September 30, 2008, of US$1.3 million, which included a gain of US$1.2 million from the sale of the Solar Plant, as compared to income of US$0 for the nine months ended September 30, 2009, from this discontinued activity. Balance Sheet As of September 30, 2009, the Company's consolidated balance sheets showed US$19.0 million in total assets, US$16.6 million in total liabilities, and US$2.4 million in total stockholders' equity. The Company's consolidated balance sheets at September 30, 2009, also showed strained liquidity with US$1.2 million in total current assets available to pay US$15.5 million in total current liabilities. A full-text copy of the Company's quarterly report is available for free at http://researcharchives.com/t/s?4c03 Going Concern Doubt The Company has experienced losses from operations and anticipates incurring losses in the near future. The Company incurred a net loss of US$763,563 and a negative cash flow from operations of US$169,269, and had a working capital deficiency of US$14.3 million as of September 30, 2009. "These matters raise substantial doubt about its ability to continue as a going concern." The Company has financed the construction of its manufacturing facility with construction loans. The Company intends to convert these construction loans into a long term mortgage immediately after completion of the facility. Since the manufacturing facility has not been completed as of September 30, 2009, no construction loans have been converted into mortgages. The Company's ability to continue its operations and market and sell its products and services will depend on its ability to convert the construction loans into mortgages and to obtain additional financing. If the Company is unable to obtain such financing, the Company may not be able to continue its business. Any additional equity financing may be dilutive to shareholders, and debt financing, if available, will increase expenses and may involve restrictive covenants. The Company will be required to raise additional capital on terms that are uncertain, especially in light of current capital market conditions. Under these circumstances, if the Company is unable to obtain additional capital or is required to raise it on undesirable terms, its financial condition could be adversely impacted. The Company's current business plan includes the development of a new assembly line based on its proprietary technology and the construction of a manufacturing facility in the suburbs of Geneva, Switzerland to produce solar modules and solar tiles at a lower cost. These activities require that the Company design and manufacture prototype panels, have them approved in accordance with European and other standards, manufacture them in series and sell them in the primary markets for solar photovoltaic cells. Costs incurred in manufacturing prototype panels have been expensed as research and development costs. The Company does not believe that it can achieve profitability until development, implementation, and commercialization of new products manufactured through the new assembling process are operational. About SES Solar Based in Geneva, Switzerland, SES SOLAR INC. (OTC BB: SESI) through its subsidiaries, engages in designing, engineering, producing, and installing solar panels or modules, and solar tiles for generating electricity. It produces and installs photovoltaic solar products for commercial, industrial, and residential use. The company's products are used by electric companies, local governmental agencies, and private house owners. SES Solar also offers engineering services for photovoltaic projects. =========================== U N I T E D K I N G D O M =========================== CHESTER ASSET: S&P Keeps Watch Developing on 'BB'-Rated Notes ------------------------------------------------------------- Standard & Poor's Ratings Services kept on CreditWatch negative its credit ratings on the class A notes issued by various Chester Asset Receivables Dealings PLC transactions. At the same time, S&P kept on CreditWatch developing its ratings on the class B and C notes issued in these transactions. The ongoing CreditWatch placements reflect the worsening performance of the underlying collateral in the affected Cards Trust I and II transactions originated by MBNA Bank Europe Ltd. The ratings will remain on CreditWatch while Bank of America, MBNA Bank Europe's parent, considers its options. Note that S&P listed the ratings on the class B and C notes of Chester Asset Receivables Dealings 2004-1 PLC in a July 16 media release placing these ratings on CreditWatch developing. However, due to a database entry error, the CreditWatch developing placements on the class B and C notes did not appear. Additionally, in the July 16 media release S&P listed its ratings on all notes in Chester Asset Receivables Dealings 2002-A PLC as being on CreditWatch. However, S&P had previously withdrawn these ratings on May 15, 2009, as the issuer had redeemed the notes. Ratings List Ratings Remaining on Creditwatch Negative Chester Asset Receivables Dealings No. 11 PLC EUR60 Million and EUR730 Million Asset-Backed Floating-Rate Notes Class Rating ----- ------ A AAA/Watch Neg Chester Asset Receivables Dealings No. 12 PLC EUR300 Million Asset-Backed Floating-Rate Notes Class Rating ----- ------ A AAA/Watch Neg Chester Asset Receivables Dealings 2001-B PLC EUR250 Million Asset-Backed Floating-Rate Notes Class Rating ----- ------ A AAA/Watch Neg Chester Asset Receivables Dealings 2003-B PLC EUR250 Million Asset-Backed Floating-Rate Notes Class Rating ----- ------ A AAA/Watch Neg Chester Asset Receivables Dealings 2003-C PLC EUR706 Million Asset-Backed Floating-Rate Notes Class Rating ----- ------ A AAA/Watch Neg Chester Asset Receivables Dealings 2004-1 PLC EUR500 Million Asset-Backed Floating-Rate Notes Class Rating ----- ------ A AAA/Watch Neg Chester Asset Receivables Dealings Issuer Ltd. EUR300 Million Asset-Backed Floating-Rate Notes Series 2004-A1 Class Rating ----- ------ A1 AAA/Watch Neg Chester Asset Receivables Dealings Issuer Ltd. EUR250 Million Asset-Backed Floating-Rate Notes Series 2006-A1 Class Rating ----- ------ A1 AAA/Watch Neg Chester Asset Receivables Dealings Issuer Ltd. EUR350 Million Asset-Backed Floating-Rate Notes Series 2008-A1 Class Rating ----- ------ A1 AAA/Watch Neg Chester Asset Receivables Dealings Issuer Ltd. EUR300 Million Asset-Backed Floating-Rate Notes Series 2008-A2 Class Rating ----- ------ A2 AAA/Watch Neg Ratings Remaining on Creditwatch Developing Chester Asset Receivables Dealings No. 11 PLC EUR60 Million and EUR730 Million Asset-Backed Floating-Rate Notes Class Rating ----- ------ B BBB+/Watch Dev C BB+/Watch Dev Chester Asset Receivables Dealings No. 12 PLC EUR300 Million Asset-Backed Floating-Rate Notes Class Rating ----- ------ B BBB+/Watch Dev C BB+/Watch Dev Chester Asset Receivables Dealings 2001-B PLC EUR250 Million Asset-Backed Floating-Rate Notes Class Rating ----- ------ B BBB/Watch Dev C BB/Watch Dev Chester Asset Receivables Dealings 2002-A PLC $775.50 Million Asset-Backed Floating-Rate Notes Class Rating ----- ------ B BBB/Watch Dev C BB/Watch Dev Chester Asset Receivables Dealings 2003-B PLC EUR250 Million Asset-Backed Floating-Rate Notes Class Rating ----- ------ B BBB/Watch Dev C BB/Watch Dev Chester Asset Receivables Dealings 2003-C PLC EUR706 Million Asset-Backed Floating-Rate Notes Class Rating ----- ------ B BBB/Watch Dev C BB/Watch Dev Chester Asset Receivables Dealings 2004-1 PLC EUR500 Million Asset-Backed Floating-Rate Notes Class Rating ----- ------ B BBB/Watch Dev C BB/Watch Dev Chester Asset Receivables Dealings Issuer Ltd. EUR175 Million Asset-Backed Floating-Rate Notes Series 2004-C1 Class Rating ----- ------ C1 BB/Watch Dev Chester Asset Receivables Dealings Issuer Ltd. EUR70 Million Asset-Backed Floating-Rate Notes Series 2006-C1 Class Rating ----- ------ C BB/Watch Dev Chester Asset Receivables Dealings Issuer Ltd. EUR125 Million Asset-Backed Floating-Rate Notes Series 2004-B1 Class Rating ----- ------ B1 BBB/Watch Dev Chester Asset Receivables Dealings Issuer Ltd. EUR50 Million Asset-Backed Floating-Rate Notes Series 2006-B1 Class Rating ----- ------ B1 BBB/Watch Dev GALA CORAL: Board Backs Mezzanine Creditors' Debt Plan ------------------------------------------------------ Anousha Sakoui at The Financial Times reports that Gala Coral's board has given its backing a plan from its mezzanine creditors to restructure the Company's GBP2.5 billion of debts. According to the FT, a majority of the group's shareholders and more than 75% of its mezzanine creditors have already agreed to back the plan. Under the plan, mezzanine creditors will write off their debt claims in exchange for splitting control of the company with existing shareholders, including private equity firms Cinven and Candover, the FT discloses. Citing people close to the situation, the FT says the company sees other third party proposals as unlikely to be able to be implemented. The company's senior creditors are reviewing the proposal and are expected to give their feedback to the company this week, the FT relates. Waiver The company, the FT says, will ask lenders on January 5 for a waiver to allow formal negotiations to commence with lenders about debt restructurings, because this could constitute a breach of an intercreditor agreement. The company is expected to ask for the waiver to run to March 31, the FT notes. Gala Coral Group Ltd. -- http://www.galacoral.co.uk/-- is one of the leading gaming companies in the U.K., with operations encompassing bingo, casinos, and sports betting. It runs more than 150 bingo halls throughout the country, as well as some 30 casinos. The company is also a leading bookmarker with nearly 1,600 betting shops and online betting sites. Gala Coral Group was formed in 2005 when Gala Group acquired Coral Eurobet. The company is jointly owned by private equity firms Cinven Group, Candover Investments, and Permira. GLOBAL CROSSING UK: Records GBP1.569 Million Net Loss for Q3 ------------------------------------------------------------ Global Crossing Limited's subsidiary, Global Crossing (UK) Telecommunications Limited, generated GBP75 million of revenue in the third quarter and Operating Income Before Depreciation and Amortization of GBP20 million. The company also reported cash generated from operations of GBP13 million before interest. "Despite a challenging economic environment, GCUK continues to see healthy levels of demand for advanced IP-based networking solutions, including managed services," said John Legere, Global Crossing's chief executive officer. "We are carefully aligning our sales resources and capital investments to seize these opportunities and further diversify our customer base." Third Quarter Results GCUK generated revenue of GBP75 million, a decrease of GBP2 million or 3% sequentially and a decrease of GBP7 million or 9% on a year-over-year basis. The sequential decrease in revenue was primarily due to a decrease in non-recurring fees, including fees for professional services, equipment sales and certain other charges. The year-over-year decrease in revenue was primarily due to the conclusion of the Camelot contract in December 2008. Gross margin was GBP30 million for the quarter, a GBP7 million increase sequentially and flat compared with the same quarter last year. The sequential increase in gross margin was primarily due to a reduction in access charges resulting from a GBP4 million favorable regulatory ruling related to access costs paid in periods prior to 2009 and a GBP2 million benefit from recharging to the Rest of World segment a portion of retroactive property tax assessments previously charged to GCUK, partially offset by a decrease in revenue. Sales, general and administrative expenses were GBP10 million for the quarter, essentially flat on a sequential and year-over-year basis. GCUK's OIBDA for the third quarter was GBP20 million, compared with GBP12 million in the second quarter of 2009 and GBP20 million in the third quarter of 2008. The sequential increase in OIBDA was primarily due to the favorable regulatory ruling and the retroactive property tax assessment recharge, partially offset by lower revenue in the quarter. GCUK recorded net loss of GBP1.569 million for the third quarter of 2009, compared with net income of GBP9.990 million in the second quarter of 2009 and a net loss of GBP6.642 million in the third quarter of 2008. Beyond the variances, the sequential variation in net income/loss was primarily due to unrealized foreign exchange losses on GCUK's U.S. dollar denominated Senior Secured Notes in the third quarter of 2009, compared with gains in the second quarter of 2009. The year-over-year reduction in net loss was primarily due to lower unrealized foreign exchange losses on the U.S. dollar denominated Senior Secured Notes. Cash and Liquidity As of September 30, 2009, GCUK had GBP304.230 million in total assets against US$516.762 million in total liabilities, resulting in total deficit of US$212.532 million. As of September 30, 2009, GCUK had cash and cash equivalents of GBP26 million compared with GBP17 million at June 30, 2009, and GBP34 million at September 30, 2008. Net cash generated from operating activities during the third quarter totaled GBP13 million after operating working capital use of GBP4 million. GCUK's cash and cash equivalents increased by GBP9 million in the third quarter, after purchases of property, plant and equipment of GBP2 million and principal payments on finance leases and other debt obligations of GBP3 million. A full-text copy of GCUK's earnings release is available at no charge at http://ResearchArchives.com/t/s?4c17 About Global Crossing (UK) Based in London, U.K., Global Crossing UK Telecommunications Ltd. provides a full range of managed telecommunications services in a secure environment ideally suited for IP-based business applications. The company provides managed voice, data, Internet and e-commerce solutions to a strong and established commercial customer base, including more than 100 UK government departments, as well as systems integrators, rail sector customers and major corporate clients. In addition, Global Crossing UK provides carrier services to national and international communications service providers. About Global Crossing Based in Hamilton, Bermuda, Global Crossing Limited (NASDAQ: GLBC) and its subsidiaries are a global communications service provider, serving many of the world's largest corporations, government entities and many other telecommunications carriers, providing a full range of Internet Protocol and managed data and voice products and services. The Company's network delivers services to nearly 700 cities in more than 60 countries and six continents around the world. The Company operates as an integrated global services provider with operations in North America, Europe, Latin America and a portion of the Asia/Pacific region, providing services that support a migration path to a fully converged IP environment. Global Crossing reported a net loss of US$73 million for the three months ended September 30, 2009, from a net loss of US$72 million for the year ago period. Global Crossing reported a net loss of US$104 million for the nine months ended September 30, 2009, from a net loss of US$232 million for the year ago period. At September 30, 2009, Global Crossing had US$2,463,000,000 in total assets against US$2,796,000,000 in total liabilities, resulting in US$333,000,000 in stockholders' deficit. GRACECHURCH CARD: S&P Cuts Ratings on Two Classes of Notes to 'B' ----------------------------------------------------------------- Standard & Poor's Ratings Services removed from CreditWatch negative and lowered its credit ratings on Gracechurch Card Notes 2006-A PLC's class A1 and A2 notes. S&P affirmed all the other notes issued from the Gracechurch Receivables Trust. The rating actions follow S&P's credit and cash flow review of the transactions and the underlying collateral for the Gracechurch Trust. S&P has not seen a significant enough improvement in the pool performance since S&P placed the notes on CreditWatch, for us to be able to affirm the class A1 and A2 notes at their current rating of 'BB'. S&P has seen a further reduction in yield since S&P placed the notes on CreditWatch, and consequently S&P has reduced its base case assumption for yield by 50bps to 14.0%. Yield was 16.05% in October 2009. For S&P's analysis, when calculating yield S&P does not give benefit to interchange and recoveries. The payment rate has started to stabilize and was at 16.27% in October 2009 according to the investor report. S&P has kept its base case for payment rate at 16%. Charge-offs have improved, however S&P expects charge-offs to remain high as unemployment increases. S&P has therefore kept its base case at 7.5%. The deterioration in performance has led to classes A1 and A2 not being able to withstand S&P's stresses at the 'BB' rating level and this has led to the downgrades. At the same time, S&P believes that the ratings on the other classes of notes issued from the Gracechurch Receivables Trust are still commensurate with the risks embedded in the pool. S&P will continue to monitor the transactions as any further deterioration in performance could lead to the higher rated notes coming under pressure. The 'BB' rated notes issued by Gracechurch Card Notes 2006-A were issued to provide extra support to the existing series of notes issued by the Gracechurch Receivables Trust. They provide support to Gracechurch Card Funding No. 10 PLC, but do not provide support to the more recent Gracechurch Card Program Funding series 2008-1 and 2008-2. Gracechurch Card Funding is a master trust backed by credit card receivables originated by Barclaycard. Ratings List Gracechurch Card Notes 2006-A PLC EUR60.0 Million and GBP71.5 Million Asset-Backed Floating-Rate Notes (Series 2006-1) Ratings Lowered and Removed From Creditwatch Negative Rating ------ Class To From ----- -- ---- A1 B BB/Watch Neg A2 B BB/Watch Neg Ratings Affirmed Gracechurch Card Funding (No. 10) PLC EUR790.5 Million And GBP733 Million Floating-Rate Asset-Backed Notes Series 05-3 Rating ------ Class To From ----- -- ---- A1 AAA AAA A2 AAA AAA B1 A A B2 A A C1 BBB BBB C2 BBB BBB Gracechurch Card Programme Funding PLC Series 2008-1 GBP2 Billion Asset-Backed Floating-Rate Notes Rating ------ Class To From ----- -- ---- A AAA AAA Gracechurch Card Programme Funding PLC Series 2008-2 GBP2 Billion Asset-Backed Floating-Rate Notes Rating ------ Class To From ----- -- ---- A AAA AAA GRADUS GROUP: Completes GBP25 Mln Debt-for-Equity Swap ------------------------------------------------------ Simon Binns at Crain's Manchester Business reports that Gradus Group Holdings has just completed a GBP25 million debt-for-equity swap which gives Lloyds Banking Group a majority stake in the business. According to the report, the refinancing, signed off on December 10, saw GBP16 million of loan debt and GBP2 million of loan notes and accrued interest converted into preference and deferred ordinary shares; while GBP1.9 million of the senior facility was transferred to a mezzanine loan. Also converted into shares was GBP5.5 million of accrued redemption premiums on loans, the report says. Neither party would reveal details but it is understood that the bank now holds a 75% stake, while the remainder is shared among management, the report notes. Based in Macclesfield, Gradus Group Holdings makes and distributes floor coverings and trim, barrier matting, wall protection, soft furnishings and lighting design. NEWGATE FUNDING: S&P Puts 'BB'-Rated Notes on CreditWatch Positive ------------------------------------------------------------------ Standard & Poor's Ratings Services placed on CreditWatch positive its credit ratings on Newgate Funding PLC's class Ba and Bb notes series 2006-1. At the same time, S&P placed the class D, E, and Q notes on CreditWatch negative. According to the December 2009 investor report the pool factor is 30.9% and as a result the credit enhancement for the class Ba and Bb notes has increased to 19.4% from 7.4% at closing. This increase, together with improvements in certain performance metrics, has led to the CreditWatch positive placements. Two key performance metrics in particular have contributed to the CreditWatch positive placements. The stock of unsold repossessions has dropped significantly to 1.85% from 6.66% in March 2009. Prepayments have also remained relatively robust with a quarterly rate of 17.8%. The main reason for the CreditWatch negative placements on the junior notes is the high level of arrears that may lead to further defaults. The percentage of loans in arrears for more than 120 days remains high at 26.4%; of these loans, 42.5% made no payment in the quarter. In its analysis S&P assume that a high percentage of these loans will default. Additionally, the reserve fund is 52.0% of the required amount after large reserve fund draws on the March and June interest payment dates. These draws were due to increasing losses from sold repossessions as well as unhedged basis risk. The basis risk arises because the assets are linked to the Bank of England's base rate and the liabilities linked to three-month LIBOR. There has been a prolonged dislocation between these two rates in the past two years but this has diminished somewhat in recent quarters. In S&P's cash flow analysis S&P stress this mismatch by analyzing the historical difference between the two indices. For these reasons S&P has placed the junior notes on CreditWatch negative. S&P expects to resolve both the CreditWatch negative and positive placements after the March 2010 interest payment date. S&P will pay particular attention to levels of prepayments, severe delinquencies, and repossessions. Newgate Funding series 2006-1 is a U.K. nonconforming residential mortgage-backed securities transaction that closed in March 2006. Mortgages 1 Ltd. originated the loans, which are secured over freehold and leasehold properties in the U.K. Ratings List Newgate Funding PLC EUR117.5 Million and GBP503.95 Million Mortgage-Backed Floating-Rate Notes Ratings Placed on CreditWatch Positive Rating ------ Class To From ----- -- ---- Ba AA/Watch Pos AA Bb AA/Watch Pos AA Ratings Placed on CreditWatch Negative Rating ------ Class To From ----- -- ---- D BBB/Watch Neg BBB E BB/Watch Neg BB Q BB/Watch Neg BB SCOTTISH WIDOWS: Moody's Upgrades Junior Debt Rating From 'Ba1' --------------------------------------------------------------- Moody's upgraded to Baa1 from Ba1 the junior subordinated debt ratings of Scottish Widows plc (GBP560 million, 5.125% with optional coupon deferral) and Clerical Medical Finance plc (CMF; EUR750 million 4.25% with optional coupon deferral). Moody's also upgraded to Baa1 from Baa2 the junior subordinated debt of CMF (GBP200 million 7 3/8% with coupon deferral restricted to mandatory triggers) and confirmed the Baa1 senior subordinated debt rating of CMF (EUR400 million 6.45% with coupon deferral restricted to mandatory triggers). These actions conclude the review initiated on November 3, 2009, and all these subordinated debt ratings now carry a negative outlook. The negative outlook reflects the negative outlook on the BFSR of Lloyds TSB Bank plc (Lloyds TSB) and Bank of Scotland plc. A downgrade of the BFSR may have a potential negative impact on the ratings of these securities. The rating action reflects the European Commission's intention not to force coupon deferral on these securities as a part of its approval of Lloyds' State-aid package and Moody's expectations that the solvency positions of both SW and Clerical Medical Investment Group will continue to be robust going forward; Moody's believe that given the separate regulatory oversight, the capital of the insurance operations remain partially protected and separated by the banking operations. Nevertheless, given the current restructuring situation of the bank, the ratings on the subordinated debt of the insurance operations are partially constrained by the ratings on the subordinated debt of the correspondent banking companies within Lloyds Banking Group. As a result the current ratings on the subordinated debts of both SW and CMF are notched wider than Moody's standard notching for insurers. Moody's said that although the insurance subordinated debt securities remain obligations of and guaranteed by the respective insurance operating companies and Moody's expect robust level of capital to be held within the insurance business, it believes that Lloyd's Banking Group's capital base is increasingly managed centrally. Under IFRS SW had total assets amounting to GBP58.9 billion at year-end 2008 and reported a net profit of GBP157 million in 2008. Under IFRS CMIG had total assets amounting to GBP29.5 billion at year-end 2008 and reported a net profit of GBP262 million in 2008. Ratings Affected These ratings were upgraded and their outlook revised to negative: Scottish Widows: * Junior Subordinated Debt to Baa1 from Ba1 (review direction uncertain) - GBP560 million 5.125%. Clerical Medical Finance: * Junior Subordinated Debt (guaranteed by Clerical Investment Group Ltd) to Baa1 from Ba1 (review direction uncertain) - EUR750 million 4.25%. * Junior Subordinated Debt (guaranteed by Clerical Investment Group Ltd) to Baa1 from Baa2 (review for downgrade) - GBP200 million 7 3/8%. These ratings were confirmed and their outlook revised to negative: Clerical Medical Finance: * Senior Subordinated Debt (guaranteed by Clerical Investment Group Ltd) Baa1 confirmed - EUR400 million 6.45% Due 2023 On November 3, 2009 Moody's changed the review direction on the junior subordinated debts with full optional deferral features issued by Scottish Widows plc (GBP560 million 5.125%) and Clerical Medical Finance (EUR750 million 4.25%) -- both Ba1 -- to uncertain from possible downgrade. The action reflected the EC's intention not to force coupon deferral on these securities as a part of its approval of Lloyds' State-aid package; nevertheless, Moody's expected that, given the restructuring situation of the bank, there was still a moderate risk of coupon deferral on these securities. On the same date Moody's also placed on review for possible downgrade the Baa2 junior subordinated debt (GBP200 million 7 3/8%) rating of Clerical Medical Finance plc and the Baa1 senior subordinated debt (EUR400 million 6.45%) rating of Clerical Medical Finance plc to reflect the deterioration in banking stand-alone credit profile, as reflected in the downgrade of the BFSR of Lloyds TSB and Bank of Scotland; the ratings also reflected the limited ability for CMF to defer payments on these two issues as coupon deferral is restricted to mandatory triggers upon specified remote solvency level. ********* 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 * * *