/raid1/www/Hosts/bankrupt/TCREUR_Public/100122.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
E U R O P E
Friday, January 22, 2010, Vol. 11, No. 015
Headlines
B E L G I U M
GENERAL MOTORS: To Close Opel's Antwerp Plant; 2,606 Jobs Affected
G E R M A N Y
PARAGON AG: To File Insolvency Plan in Paderborn Court
WADAN YARDS: Resolves Dispute with Laeisz on Delivery of Ship
I R E L A N D
3G MOBILE: Creditors Meeting Set for February 1
APEX ESTATES: Grant Thornton Appointed Receiver
BANK OF IRELAND: Fitch Junks Ratings on Tier 1 Securities From 'B'
DRYDEN IX: Moody's Junks Ratings on Two Classes of Notes
EMERALD TIMBER: Creditors Meeting Set for January 29
GORDON POWER: Creditors Meeting Set for February 4
NEWGATE FUNDING: S&P Downgrades Rating on Class E Notes to 'B'
O'CONNELL PAINT: Creditors Meeting Set for February 5
POLREDMOND CONSTRUCTION: Creditors Meeting Set for February 1
RESIDENCE MEMBERS: Judge Kelly Refers Examinership Case to ODCE
ROSS TECHNICAL: Creditors Meeting Set for February 5
L A T V I A
PAREX BANKA: Sale Likely This Year as Gov't Seeks to Boost Revenue
N E T H E R L A N D S
SOUND I: Fitch Puts 'BB' Rating on Class E Notes on Watch Negative
P O L A N D
POLSKIE LINIE: Gets Expressions of Interest From Three Bidders
R O M A N I A
GREAT UNITED: Goes Bankrupt; Has Over EUR1 Mln in Debt
R U S S I A
BANK SOYUZ: S&P Keeps 'B-' Long-Term Counterparty Credit Rating
MAGNITOGORSK OAO: S&P Affirms 'BB' Long-Term Corp. Credit Rating
SEVERSTAL OAO: Fitch Affirms Issuer Default Rating at 'B+'
S L O V A K R E P U B L I C
SKYEUROPE AIRLINES: First Creditors Meeting Set for March 1
S P A I N
BANKINTER 3: Moody's Downgrades Rating on Series D Notes to 'B3'
TDA PASTOR: Fitch Affirms Rating on Class D Notes at 'BB'
U N I T E D K I N G D O M
BRITISH AIRWAYS: Cabin Crew Union Withdraws Easter Strike Threat
BRIXTON PLC: Ex-Chief Took Ski Trip Despite Insolvency Threat
EPIC PLC: Moody's Downgrades Rating on Class A Notes to 'Caa3'
EUROPEAN COMMERCIAL: Goes Into Liquidation
HARRIS LOGISTICS: Goes Into Liquidation; Tenon Recovery on Board
JD WETHERSPOON: Sales Fall Due to Bad Weather; Begins Debt Talks
JJ & HB: Cuts 132 Jobs at Three Sites; 44 Staff Retained
LINK TELECOM: O2 Severs Ties Following Administration
MANCHESTER UNITED: Debts Soar to GBP717 Mln; May Pay More Interest
MORGANS INDEPENDENT: Placed Into Administration
MORRIS INNS: In Administration; PKF Seeks Buyer for Business
ROYAL BANK: JP Morgan Nears Sempra Commodities Acquisition Deal
TAYLOR WIMPEY: Home Sales Down 24% in 2009 Due to Market Slump
VIRGIN MEDIA: Fitch Assigns 'BB+' Rating on New Senior Notes
* UK: Number of Recruitment Agencies Going Bust Up to 57 in 2H09
* UK: Treasury Seeks to Widen Funding Choices For Companies
* UK: Recession Blamed for Increase in Pension Scheme Closures
X X X X X X X X
* Coface Sees End of Global Recession as Default Rates Drop 40%
* BOOK REVIEW: Instincts of the Herd in Peace and War
*********
=============
B E L G I U M
=============
GENERAL MOTORS: To Close Opel's Antwerp Plant; 2,606 Jobs Affected
------------------------------------------------------------------
Chris Reiter and John Martens at Bloomberg News report that
General Motors Co. will close an assembly plant in Antwerp,
Belgium, eliminating 2,606 jobs, as it seeks to return the Opel
division to profit.
Bloomberg relates Opel Chief Executive Officer Nick Reilly said
Thursday GM, which builds Opel's best-selling Astra compact in
Antwerp, plans to shut the factory this year as the European car
market shrinks. According to Bloomberg, Mr. Reilly said the
Belgian site was chosen for closure because its models are also
produced elsewhere, making a capacity shift easier.
"We are losing money and we have to do something about it,"
Bloomberg quoted Mr. Reilly as saying at a news conference in
Brussels, adding that Opel doesn't plan to close other factories.
"It's high time that the restructuring of Opel finally begins,"
Stefan Bratzel, director of the Center of Automotive at the
University of Applied Sciences in Bergisch Gladbach, Germany,
said, according to Bloomberg. "A year has been wasted in
discussions, and in the meantime, the competitors have done their
homework."
According to Bloomberg, Mr. Reilly said terms of the Antwerp
plant's shutdown, which is targeted for mid-2010, must still be
negotiated with labor representatives.
Bloomberg notes Opel's unions called the decision "one-sided and
economically unreasonable."
Bloomberg relates Stefan Weinmann, a spokesman for Opel, said
talks with employee representatives will continue, with a meeting
requested by unions for next week.
Blockade
John Reed, Daniel Schafer and Stanley Pignal at The Financial
Times report that workers in Antwerp continued an impromptu
blockade of the plant on Thursday, preventing new cars from
leaving the factory, which makes Opel/Vauxhall's Vectra model.
According to the FT, Belgian unions insisted a buyer for the plant
could still be found, even if it had to be converted to a smaller
car parts manufacturing operation.
"I'm still hopeful," the FT quoted Rudi Kennes, a trade union
leader, as saying. "We still have the financials and industrial
logic on our side."
The FT notes Mr. Reilly said he could not foresee how much closing
the plant would cost.
According to the FT, with the decision, Opel will forfeit up to
EUR500 million (US$704.6 million) of aid the Flemish government
had promised if Antwerp were to stay open.
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)
=============
G E R M A N Y
=============
PARAGON AG: To File Insolvency Plan in Paderborn Court
------------------------------------------------------
paragon AG is to be continued as a going concern, as previously
announced. The local court in Paderborn opened the Company's
insolvency proceedings on January 1 this year. Dr. Frank Kebekus,
an attorney who runs a law firm in Paderborn, has been appointed
as insolvency administrator. The Company plans to file its
finalized insolvency plan with the local court in Paderborn over
the next few days. A debtor-in-possession (DIP) loan that had
been extended but not drawn down has now been cancelled.
The timetable for the forthcoming insolvency proceedings has now
been finalized. Mr. Kebekus will inform the Company's creditors
about the current status of these proceedings at a creditors'
meeting on February 19, 2010. A special consultation meeting will
subsequently be held to discuss the Company's insolvency plan.
The receivables entered in the insolvency register will be
examined as part of a written procedure on March 5.
Personnel-related decisions were also taken at the time the
Company's insolvency proceedings were being opened. Chief
executive officer Klaus Dieter Frers and restructuring director
Andrew Seidl are to remain in post, while chief financial officer
Markus Werner will step down from the executive board by mutual
consent as of January 31 this year; his duties will be performed
by others at the Company until further notice.
At the beginning of this year the Company possessed an adequate
liquidity buffer. Due to an upturn in business, paragon is once
again able to pay its wages and salaries as well as VAT in full.
According to Mr. Frers, the Company is able to finance itself from
its own resources.
paragon AG is a direct supplier to the automotive industry and is
listed on the Deutsche Boerse Prime Standard index in
Frankfurt/Main, Germany. The Company develops, manufactures, and
markets innovative solutions in its Automotive (Sensors/Actuators
and Cockpit Systems) and Electronic Solutions divisions. Its
product portfolio includes the world's leading AQS air quality
sensor by far as well as hands-free speaking equipment and
instrumentation systems. In addition to its headquarters in
Delbrueck, North Rhine-Westphalia, paragon also operates locations
in Suhl, Thuringia; St. Georgen, Baden-Wrttemberg; Nuremberg,
Bavaria; and Heidenheim, Baden-Wrttemberg. In fiscal 2007, the
paragon Group generated sales totaling EUR108.9 million with a
workforce of 594 employees.
WADAN YARDS: Resolves Dispute with Laeisz on Delivery of Ship
-------------------------------------------------------------
Robert Wright at The Financial Times reports that Hamburg-based
Laeisz & Co. gave the go-ahead for final preparation work on one
of two container ships it had ordered from Wadan Yards.
According to the FT, Laeisz & Co. refused to take delivery of the
ship after Wadan collapsed in June.
However, Marc Odebrecht, the insolvency practitioner, accepted
that Wadan's insolvency had been a breach of Laeisz's contract,
the FT notes.
The two sides accepted cancellation of a second container ship
order, the FT relates.
Wadan Yards owns shipyards at Wismar and Warnemuende in north-east
Germany.
=============
I R E L A N D
=============
3G MOBILE: Creditors Meeting Set for February 1
-----------------------------------------------
A meeting of creditors of 3G Mobile Limited will take place at
10:00 a.m. on February 1, 2010 at:
Holiday Inn
98-107 Pearse Street
Dublin 2
Ireland
The registered address of the company is at:
Sigma Wireless Communications
McKee Avenue
Finglas
Dublin 11
Ireland
APEX ESTATES: Grant Thornton Appointed Receiver
-----------------------------------------------
Michael McAteer of Grant Thornton was appointed receiver and
manager of Apex Estates Limited by First Active PLC on January 14,
2010.
The registered address of Apex Estates Limited is at:
Maynooth Road
Barberstown
Maynooth
Co. Kildare
Ireland
BANK OF IRELAND: Fitch Junks Ratings on Tier 1 Securities From 'B'
------------------------------------------------------------------
Fitch Ratings has downgraded three of Ireland-based Bank of
Ireland plc's tier 1 securities to 'CCC' from 'B' and removed them
from Rating Watch Negative.
The rating action follows an announcement by BOI that the European
Commission (EC) has indicated that the bank should not make coupon
payments on its tier 1 and upper tier 2 capital instruments unless
under a binding legal obligation to do so. As a consequence,
Fitch has downgraded its ratings on three of these securities, and
maintained its ratings on RWN on a fourth, all of which are listed
below.
Coupons on two securities payable in February 2010 will not be
paid, and the effect is to trigger dividend stopper mechanisms
which prevent the bank from declaring and paying, for a period of
one calendar year from and including 1 and 4 February 2010, any
distribution or dividend on junior share capital or any parity
security, which includes ordinary stock and several other
perpetual securities.
One of the rated tier 1 securities, Bank of Ireland UK Holdings
plc GBP350 million guaranteed callable perpetual preferred
securities (ISIN XS0165122655), will as a result of the dividend
stopper mechanism defer payment of coupons for one year and on
restarting coupon payments will also make good any missing
payments. In view of its cumulative nature, Fitch has maintained
the rating of this security on RWN.
Under the terms of the EUR3.5 billion preference shares subscribed
to by the National Pensions Reserve Fund Commission of Ireland
(NPRFCI), the NPRFCI would be entitled to be issued BOI ordinary
stock related to the cash amount of the dividend (EUR250 million).
This outcome would increase the Irish government's stake in BOI.
However, BOI remains in discussion with the Irish Department for
Finance and the EC over its restructuring plan and the outcome is
not certain.
The rating actions taken are:
* Bank of Ireland UK Holdings plc GBP350m guaranteed callable
perpetual preferred securities (ISIN XS0165122655) maintained at
'B' on RWN
* BoI Capital Funding (No.2) LP US$800m guaranteed non-voting non-
cumulative perpetual preferred securities (ISIN USG12255AA64 and
US055967AA11) downgraded to 'CCC' from 'B'; off RWN
* BoI Capital Funding (No.1) LP EUR600m guaranteed non-voting non-
cumulative perpetual preferred securities (ISIN XS0125611482)
downgraded to 'CCC' from 'B', off RWN
* BoI Capital Funding (No.4) LP GBP500m guaranteed non-voting non-
cumulative perpetual preferred securities (ISIN XS0268599999)
downgraded to 'CCC' from 'B', off RWN
DRYDEN IX: Moody's Junks Ratings on Two Classes of Notes
--------------------------------------------------------
Moody's Investors Service has taken these rating actions on CLO
notes issued by Dryden IX -- Senior Loan Fund 2005.
* US$262.5M Class A-1, Downgraded to Aa2; previously on Oct. 26,
2005 Assigned Aaa
* EUR115.1M Class A-2, Downgraded to Aa2; previously on Oct. 26,
2005 Assigned Aaa
* US$34.1M Class B-1, Downgraded to Ba1; previously on March 19,
2009 Downgraded to Baa2 and Remained On Review for Possible
Downgrade
* EUR3.4M Class B-2, Downgraded to Ba1; previously on March 19,
2009 Downgraded to Baa2 and Remained On Review for Possible
Downgrade
* EUR2.7M Class B-3, Downgraded to Ba1; previously on March 19,
2009 Downgraded to Baa2 and Remained On Review for Possible
Downgrade
* US$74.15M Dollar Fund Notes (current outstanding rated balance
US$40.47m), Downgraded to Caa1; previously on March 19, 2009
Downgraded to B3 and Remained On Review for Possible Downgrade
* EUR30.3M Euro Fund Notes (current outstanding rated balance
EUR16.54m), Downgraded to Caa1; previously on March 19, 2009
Downgraded to B3 and Remained On Review for Possible Downgrade
* EUR10M Lower Levered Fund Notes (current oustanding rated
balance EUR 6.22m), Downgraded to B1; previously on March 19,
2009 Downgraded to Ba3 and Remained On Review for Possible
Downgrade
The rating with respect to the Dollar Fund Notes, the Euro Fund
Notes and the Lowered Levered Fund Notes addresses the ultimate
repayment of the Rated Balance in respect of such Note on or
before the legal maturity date (in September 2019), where the
"Rated Balance" is equal, at any time, to the principal amount of
the Note on the Issue Date minus the aggregate of all payments
made from the issue date to such date, either through interest or
principal payments.
This transaction is a managed cash leveraged loan collateralized
loan obligation with exposure to predominantly US senior secured
loans in addition to European senior secured loans, bonds (9% of
portfolio) and structured finance securities (4% of portfolio).
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 2701) an increase in the amount of defaulted
securities (currently 7.41% of the portfolio) and an increase in
the proportion of securities from issuers rated Caa1 and below
(currently 11.41 of the portfolio). These measures were taken
from the recent trustee report dated December 9, 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. Furthermore, Moody's
notes that, during the initial ratings assignment in 2005, an
inaccurate numerical input was used with respect to the modeled
portfolio par amount. Had this not occurred, the initial ratings
of Dryden IX could have been lower at that time. The modeled
portfolio par amount at the time of initial ratings assessment was
not reflecting the target portfolio par amount defined in the
transaction documentation, which is usually considered by Moody's
as the correct data input for modeling purposes. This modeled
portfolio par amount was however commensurate to the portfolio par
amount achieved on the transaction's effective date in October 4,
2006.
This inaccurate input does not have an effect on the rating
actions.
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.
EMERALD TIMBER: Creditors Meeting Set for January 29
----------------------------------------------------
A meeting of creditors of Emerald Timber Frames Limited will take
place at 9:00 a.m. on January 29, 2010 at:
The Glencarn Hotel & Leisure Centre
Monaghan Road
Castleblaney
Co. Monaghan
Ireland
The registered address of the company is at:
Dumbarnet
Ballinode
Co. Monaghan
Ireland
GORDON POWER: Creditors Meeting Set for February 4
--------------------------------------------------
A meeting of creditors of Gordon Power Limited will take place at
11:00 a.m. on February 4, 2010 at:
The Georgian Business Centre
20 Lower Baggot Street
Dublin 2
Ireland
The registered address of the company is at:
23 Main Street
Blackrock
Co. Dublin
Ireland
NEWGATE FUNDING: S&P Downgrades Rating on Class E Notes to 'B'
--------------------------------------------------------------
Standard & Poor's Ratings Services lowered its credit ratings on
Newgate Funding PLC's series 2007-3 class A3, Ba, Bb, Cb, D, and E
notes. At the same time, S&P affirmed the class A1 and A2b notes.
House price declines coupled with high arrears have increased
S&P's weighted-average foreclosure frequency and weighted-average
loss severity numbers for this transaction.
Most loans in the pool were originated in mid-2007, close to when
house prices peaked. The weighted-average original loan-to-value
(LTV) ratio was 78.1%, as reported in the offering circular.
According to Nationwide and Halifax, house prices remain 12% and
15% below the peak, respectively. Therefore, S&P believes a
proportion of the pool is in negative equity leading to higher
loss severities for loans that ultimately default. In addition,
S&P assume that the foreclosure frequency will increase as LTV
ratios increase above 80%.
As reported in the December 2009 investor report, total
delinquencies have fallen to 30.9% from 32.7% in September 2009.
S&P also note that the percentage of loans in arrears paying their
full monthly amount has increased to 49.8% from 38.3%. However,
in S&P's opinion, delinquencies are still high with loans greater
than 120 days in arrears currently 21.0%.
The December pool contained approximately 20% of loans paying a
fixed rate of interest. These loans revert to the Bank of England
Base Rate plus a margin before October 2010. If BBR remains at
0.5%, these borrowers' monthly payments will fall substantially,
and may lead to improved pool performance in the short term, in
S&P's view.
Newgate series 2007-3 is a U.K. nonconforming RMBS transaction.
The collateral is a pool of first-ranking mortgages secured over
freehold and leasehold properties. The deal closed in December
2007.
Ratings List
Newgate Funding PLC Series 2007-3
EUR485 Million and GBP503.55 Million Mortgage-Backed
Floating-Rate Notes
Ratings Lowered and Removed From CreditWatch Negative
Rating
------
Class To From
----- -- ----
A3 AA AAA/Watch Neg
Ba A- AA/Watch Neg
Bb A- AA/Watch Neg
Cb BB+ A/Watch Neg
D BB- BBB/Watch Neg
E B BBB-/Watch Neg
Ratings Affirmed
Class Rating
----- ------
A1 AAA
A2b AAA
MERCs AAA
O'CONNELL PAINT: Creditors Meeting Set for February 5
-----------------------------------------------------
A meeting of creditors of O'Connell Paint Limited will take place
at 3:00 p.m. on February 5, 2010 at:
The Clarion Hotel
Lapps Quay
Cork
Ireland
The registered address of the company is at:
Unit 3
Corabbey Court
Distillery Walk
Midleton
Co. Cork
Ireland
POLREDMOND CONSTRUCTION: Creditors Meeting Set for February 1
-------------------------------------------------------------
A meeting of creditors of Polredmond Construction Limited will
take place at 10:00 a.m. on February 1, 2010 at:
Ard Ri House Hotel
Tuam
Co. Galway
Ireland
The registered address of the company is at:
Polredmond
Williamstown
Galway
Ireland
RESIDENCE MEMBERS: Judge Kelly Refers Examinership Case to ODCE
---------------------------------------------------------------
Mary Carolan at The Irish Times reports that Mr. Justice Peter
Kelly on Wednesday said the judgment and papers in the Residence
club examinership case will be referred to the Office of the
Director of Corporate Enforcement.
According to the report, a receiver was appointed by Zurich Bank
to the insolvent private members' club at Dublin's St. Stephen's
Green, whose directors are restaurant owners Simon and Christian
Stokes, after the High Court refused to extend it court
protection. The bank, the report says, is owed EUR2.3 million
secured on charges over the club premises, insurance policies and
personal guarantees of the Stokes brothers.
The report relates Mr. Justice Kelly strongly criticized the
Stokes brothers' management of the club, particularly the fact it
traded using employees' tax monies owed to the Revenue and said he
was referring his judgment and papers in the case to the ODCE.
The judge said there was "at least a question mark" over the
propriety of the directors' behavior relating to the wrongful
retention of tax monies and the making of loans to related
companies, the report recounts.
The report says a 100-day examinership would not allow for a
proper investigation into those matters but would allow the
directors to have the liabilities of the company written down and
avoid the full investigation which he believed was warranted.
According to the report, the judge said examinership should not be
allowed when it was likely to have a beneficial effect for
"delinquent directors" and its purpose was not to provide
directors with "a ready form of absolution" in relation to
corporate wrongdoing.
The judge also said he was "extremely skeptical" of positive
opinions by an independent accountant and the interim examiner of
the prospects for survival of the club, which has liabilities of
more than EUR4 million, given the "unprecedented recession," the
report notes.
ROSS TECHNICAL: Creditors Meeting Set for February 5
----------------------------------------------------
A meeting of creditors of Ross Technical Services Limited will
take place at 2:00 p.m. on February 5, 2010 at:
Midleton Park Hotel
Midleton
Co. Cork
Ireland
The registered address of the company is at:
Buttery Lane
Dungarven
Co. Waterford
Ireland
===========
L A T V I A
===========
PAREX BANKA: Sale Likely This Year as Gov't Seeks to Boost Revenue
------------------------------------------------------------------
Agnes Lovasz at Bloomberg News reports that Parex Banka AS Chief
Executive Officer Nils Melngailis said the bank may be sold this
year as the recession-stricken government seeks to boost revenue.
"Given that the market is improving, I can't see why the sale
couldn't happen in the next two quarters," Bloomberg quoted
Mr. Melngailis as saying in an interview in Vienna late Tuesday.
"By the middle of the year or the autumn, there may be a
transaction. The government needs to get the money back and if
the proposals are adequate, they will be ready to negotiate."
Bloomberg recalls Latvia had to turn to a group led by the
European Commission and International Monetary Fund for a
EUR7.5-billion (US$11.2 billion) loan after Parex, the country's
second-biggest bank, failed following a run on deposits.
According to Bloomberg, a sale of Parex would free up money for
the government, which has poured about LVL1 billion (US$2.1
billion) into Parex in the form of capital increases, deposits and
guarantees.
Mr. Melngailis, as cited by Bloomberg, said the government may
sell the bank in two steps, separating non- performing or non-core
assets off the bank, into a fund.
About Parex banka
Founded in 1992, Parex banka -- http://www.parexgroup.com/--
currently employs some 1,900 people at branches all over Latvia
and offers universal banking services throughout the Baltic
region, the CIS and other European nations such as Germany,
Switzerland and Sweden. Parex Group companies operate across the
banking, finance, leasing, asset management and life insurance
sectors. Currently, the Latvian Privatisation Agency is the
majority shareholder of Parex banka, holding 73.4% of the Bank's
shares, but 22.4% are controlled by the European Bank for
Reconstruction and Development. Parex banka has signed up to the
European Code of Conduct on housing loans.
* * *
As reported by the Troubled Company Reporter-Europe on Dec. 23,
2009, Fitch Ratings affirmed Parex Banka's Long- and Short-term
Issuer Default Ratings at 'RD'. 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.
=====================
N E T H E R L A N D S
=====================
SOUND I: Fitch Puts 'BB' Rating on Class E Notes on Watch Negative
------------------------------------------------------------------
Fitch Ratings has placed 23 further tranches of structured finance
Dutch RMBS fully or partially backed by the Nationale Hypotheek
Garantee on Rating Watch Negative. Fitch also maintains the RWN
on 10 tranches. All tranches of all the 15 securitizations of
Dutch mortgage portfolios entirely guaranteed by the NHG are now
on RWN. The NHG is a guarantee provided by WEW, a Dutch
government-sponsored institution, to cover losses incurred on
mortgage loans after the foreclosure or sale of a property.
Rating actions taken are:
Darts Finance B.V. (Amstelhuys 2005 NHG Pool)
-- Class A (ISIN XS0233338135): 'AAA'; placed on RWN; Loss
Severity 'LS-1'
Green Apple 2008-I NHG
-- Class A (ISIN XS0406581495): 'AAA'; placed on RWN; Loss
Severity 'LS-1'
-- Class B (ISIN XS0406581735):'BBB+'; placed on RWN; Loss
Severity 'LS-2'
-- Class C (ISIN XS0406582030): 'BBB-'; placed on RWN; Loss
Severity 'LS-3'
Goldfish Master Issuer B.V. Series 2007-1
-- Class A1 (ISIN XS0305089806): 'AAA'; placed on RWN; Loss
Severity 'LS-1'
-- Class A2 (ISIN XS0305090309): 'AAA'; placed on RWN; Loss
Severity 'LS-1'
-- Class B (ISIN XS0305090648): 'AA-'; placed on RWN; Loss
Severity 'LS-1'
Goldfish Master Issuer B.V. Series 0-2008-1
-- Class A (ISIN XS0342178745): 'AAA'; placed on RWN; Loss
Severity 'LS-1'
-- Class B (ISIN XS0342181459): 'AA-'; placed on RWN; Loss
Severity 'LS-1'
Goldfish Master Issuer B.V. Series 0-2008-2
-- Class A (ISIN XS0401511257): 'AAA'; placed on RWN; Loss
Severity 'LS-1'
-- Class B (ISIN XS0401511331): 'AA-'; placed on RWN; Loss
Severity 'LS-1'
Goldfish Master Issuer B.V. Series 0-2009-1
-- Class A (ISIN XS0429125577): 'AAA'; placed on RWN; Loss
Severity 'LS-1'
-- Class B (ISIN XS0429125734): 'AA-'; placed on RWN; Loss
Severity 'LS-1'
Goldfish Master Issuer B.V. Series 0-2009-2
-- Class C (ISIN XS0433997722): 'A+'; placed on RWN; Loss
Severity 'LS-1'
Goldfish Master Issuer B.V. Series 2009-3
-- Class A (ISIN XS0447092957): 'AAA'; placed on RWN; Loss
Severity 'LS-1'
Goldfish Master Issuer B.V. Series 0-2009-4
-- Class A (ISIN XS0453530015): 'AAA'; placed on RWN; Loss
Severity 'LS-1'
Goldfish Master Issuer B.V. Series 2009-5
-- Class A1 (ISIN XS0470466292): 'AAA'; placed on RWN; Loss
Severity 'LS-1'
-- Class A2 (ISIN XS0469760028): 'AAA'; placed on RWN; Loss
Severity 'LS-1'
-- Class A3 (ISIN XS0470466458): 'AAA'; placed on RWN; Loss
Severity 'LS-1'
Holland Homes Oranje MBS B.V.
-- Class A (ISIN XS0238851827): 'AAA'; placed on RWN; Loss
Severity 'LS-1'
-- Class B (ISIN XS0238855141) 'A'; placed on RWN; Loss Severity
'LS-4'
PEARL Mortgage Backed Securities 1 B.V.
-- Class B (ISIN XS0265252253): 'BBB-'; placed on RWN; Loss
Severity 'LS-1'
PEARL Mortgage Backed Securities 2 B.V.
-- Class B (ISIN XS0304857690): 'BBB-'; placed on RWN; Loss
Severity 'LS-1'
PEARL Mortgage Backed Securities 3 B.V.
-- Class B (ISIN XS0343676044): 'BBB-'; placed on RWN; Loss
Severity 'LS-1'
Saecure 6 NHG B.V.
-- Class B (ISIN XS0266745735): 'A'; placed on RWN; Loss
Severity 'LS-1'
-- Class C (ISIN XS0268063566): 'BBB-'; placed on RWN; Loss
Severity 'LS-1'
Securitized Guaranteed Mortgage Loans I B.V.
-- Class A (ISIN XS0277021399): 'AAA'; placed on RWN; Loss
Severity 'LS-1'
-- Class B (ISIN XS0277021803): 'BBB+'; placed on RWN; Loss
Severity 'LS-2'
Securitised Guaranteed Mortgage Loans II B.V.
-- Class A (ISIN NL0006477739 ): 'AAA'; placed on RWN; Loss
Severity 'LS-1'
Sound I B.V.
-- Class A (ISIN XS0221342131): 'AAA'; placed on RWN; Loss
Severity 'LS-1'
-- Class B (ISIN XS0228909130): 'AA'; placed on RWN; Loss
Severity 'LS-4'
-- Class C (ISIN XS0228909304): 'A'; placed on RWN; Loss
Severity 'LS-5'
-- Class D (ISIN XS0228909643): 'BBB'; placed on RWN; Loss
Severity 'LS-5'
-- Class E (ISIN XS0228910146): 'BB'; placed on RWN; Loss
Severity 'LS-5'
Sound II B.V.
-- Class B (ISIN XS0322223826): 'AA'; placed on RWN; Loss
Severity 'LS-1'
Stichting Eleven Cities No.4
-- Class A-NHG (ISIN XS0401138606): 'AAA'; placed on RWN; Loss
Severity 'LS-1'
-- Class A (ISIN XS0401142202): 'AAA'; placed on RWN; Loss
Severity 'LS-1'
-- Class B (ISIN XS0401145999): 'AA'; placed on RWN; Loss
Severity 'LS-2'
-- Class C (ISIN XS0401148829): 'A-'; placed on RWN; Loss
Severity 'LS-2'
-- Class D (ISIN XS0401150726): 'BBB+'; placed on RWN; Loss
Severity 'LS-2'
-- Class E (ISIN XS0401153746): 'BBB+'; placed on RWN; Loss
Severity 'LS-2'
The tranches on which the RWN is being maintained since they were
placed on 2 June 2009 are:
Green Apple B.V.
-- Class A (ISIN XS0322161026): 'AAA'; RWN; Loss Severity 'LS-1'
-- Class B (ISIN XS0322161299): 'BBB+'; RWN; Loss Severity 'LS-
1'
-- Class C (ISIN XS0322161372): 'BBB-'; RWN; Loss Severity 'LS-
1'
PEARL Mortgage Backed Securities 1 B.V.
-- Class A (ISIN XS0265250638): 'AAA'; RWN; Loss Severity 'LS-1'
PEARL Mortgage Backed Securities 2 B.V.
-- Class A (ISIN XS0304854598): 'AAA'; RWN; Loss Severity 'LS-1'
PEARL Mortgage Backed Securities 3 B.V.
-- Class A (ISIN XS0343673611): 'AAA'; RWN; Loss Severity 'LS-1'
Saecure 6 NHG B.V.
-- Class A (ISIN XS0266744761): 'AAA'; RWN; Loss Severity 'LS-1'
Solid 2005-I
-- Class A (ISIN XS0233315869): 'AAA'; RWN; Loss Severity 'LS-1'
Sound II B.V.
-- Class A (ISIN XS0322223586): 'AAA'; RWN; Loss Severity 'LS-1'
Stichting Holland Homes Oranje II
-- Class A (ISIN XS0311660392): 'AAA'; RWN; Loss Severity 'LS-1'
These actions reflect further expected changes to Fitch's
analytical treatment under its June 2006 criteria for rating
transactions of Dutch NHG-backed residential mortgages. In
addition to reconsidering the credit given for the commitment of
the relevant seller to repurchase non-NHG compliant loans, as
highlighted in its announcement on June 2, 2009, Fitch
contemplates making other changes to the criteria, particularly in
the analysis of the "amortization risk" implied by the guarantee
and the risk of submitted claims being rejected by the guarantee
administrator (or "operational risk"). These changes are expected
to widen the impact of the criteria review on the ratings of NHG-
backed transactions.
Fitch expects to release an exposure draft in February 2010 to
explain the contemplated changes to the methodology and solicit
feedback from market participants. The RWN is expected to be
resolved after the publication of the final criteria; Fitch will
then consider all material information and any changes to the
transaction structure put forward by the issuers.
===========
P O L A N D
===========
POLSKIE LINIE: Gets Expressions of Interest From Three Bidders
--------------------------------------------------------------
Maciej Martewicz and Laurence Frost at Bloomberg News report that
Poland's Treasury Ministry said Polskie Linie Lotnicze LOT SA
received expressions of interest from three potential investors
and may get more.
According to Bloomberg, Maciej Wewior, a spokesman for the
ministry, said Wednesday the investors include at least one
airline and at least one financial group, declining to name them.
Bloomberg notes Brigitte Barrand, a Paris-based spokeswoman, said
Air France-KLM Group hasn't "expressed any interest in LOT,"
Brigitte Barrand, denying a report in Poland's Dziennik Gazeta
Prawna newspaper.
Bloomberg recalls Chief Executive Officer Sebastian Mikosz said in
August LOT, Poland's state-controlled national airline, is seeking
an investor as it strives to regain profitability with new labor
contracts, more fuel-efficient flight practices and better
service.
Mr. Mikosz, as cited by Bloomberg, said LOT will report a loss for
full year 2009. The airline posted a first-half net loss of
PLN178 million (US$63 million), Bloomberg recounts.
Bloomberg relates Deputy Treasury Minister Zdzislaw Gawlik told
reporters in Parliament Wednesday the airline may receive more
expressions of interest, because there's no deadline for potential
investors to respond to a preliminary offering document.
The Financial Times' Jan Cienski says the flag-carrier is
struggling in the face of strong competition from low-cost
airlines, and has seen its share of the domestic market fall from
44% in 2005 to 28% in 2008. Mr. Mikosz has embarked on a
cost-cutting program, including the disposal of its foundering
low-cost affiliate, as well as slashing loss-making routes and
revoking a collective bargaining agreement, which set off a storm
of protest from the heavily unionized workforce, the FT recounts.
Polskie Linie Lotnicze LOT, or LOT Polish Airlines, --
http://www.lot.com/-- serves about a dozen cities in Poland and
about 120 destinations across Europe and North America. LOT's
holdings include regional carrier EuroLOT. Overall, LOT maintains
a fleet of about 50 aircraft, consisting of Embraer regional jets,
Boeing 767s and 737s, and ATR turboprops. The airline is a member
of the Star Alliance marketing group, and LOT serves many of its
North American destinations through code-sharing with Star
partners United Airlines and Air Canada. The Polish government
owns 93% of the company. LOT employees hold the remainder.
=============
R O M A N I A
=============
GREAT UNITED: Goes Bankrupt; Has Over EUR1 Mln in Debt
------------------------------------------------------
Ziarul Financiar reports that Great United Trading Romania has
gone bankrupt after accumulating a little over EUR1 million in
debt with the parent company in the Czech Republic.
According to the report, Great United Trading Romania, which holds
clothing brand Time Out, posted EUR2.85 million in turnover in
2008, but recorded EUR140,000 in losses.
"Midway through last year, the parent company and sole shareholder
decided not to carry on doing business in Romania because it
already had a little over one million euros in debt to recover,"
ZF quoted George Mihai Petrescu, who managed Great United Trading
until December 2009, as saying. "Initially they sought
franchisees, but with the severe decline of the fashion market
last year, they could not find reliable partners to take Time Out
over. There was no more time to search in order to avoid
accumulating further debt."
Great United Trading Romania operates nine stores in Romania, the
report discloses.
===========
R U S S I A
===========
BANK SOYUZ: S&P Keeps 'B-' Long-Term Counterparty Credit Rating
---------------------------------------------------------------
Standard & Poor's Ratings Services said that it was keeping its
'B-' long-term and 'C' short-term counterparty credit ratings and
its 'ruBBB-' Russia national scale rating on Russia-based Bank
Soyuz on CreditWatch with developing implications, where they were
placed on Jan. 14, 2009.
"The CreditWatch placement reflects the continuing uncertainties
regarding Bank Soyuz's current status, safe resolution of
recapitalization plans, ownership transfer, and asset buyout,"
said Standard & Poor's credit analyst Victor Nikolskiy.
The bank is currently under financial recovery, supervised by the
government's Deposit Insurance Agency. On Jan. 19, 2010, the
regulator imposed temporary administration in the bank. Thus Bank
Soyuz's capital is to be reduced to one Russian ruble (RUR) as a
result of additional loan reserve allocation. Further on, the DIA
is slated to acquire 50% plus one share of the bank, with the
other 50% minus one share to be taken by Ingosstrakh Insurance Co.
(BBB-/Negative/--; Russia national scale 'ruAA+'). These
recapitalization funds will be relocated from the existing
deposits kept in the bank. This will be done through an
additional share issue. In addition, the DIA will provide a
RUR5 billion subordinated loan to Bank Soyuz. S&P understand that
the temporary administration will not obstruct the bank's ability
to service its obligations while under the administration process.
The bank continues to benefit from substantial government support
via massive funding provided by the DIA. S&P believes that the
DIA would likely provide additional support for Bank Soyuz on top
of existing facilities if required. Given the DIA and
Ingosstrakh's acquisition plans and the ongoing financial support
Bank Soyuz receives, S&P add two notches of uplift above the
bank's stand-alone credit profile.
The bank's current stand-alone credit profile is very weak,
characterized by high credit risks, significantly eroded
capitalization, and weak profitability. The portfolio of
RUR20 billion problematic loans is going to be bought out by the
DIA over six months, which will clean the bank's balance sheet.
The DIA has already announced that Bank Soyuz's previously
discussed possible merger with Sobinbank was indefinitely
postponed.
"We expect to resolve the CreditWatch placement once the capital
increase is complete or if it is clear that it will not
materialize, assuming no changes to the bank's financial
standing," said Mr. Nikolskiy.
The CreditWatch resolution will depend on the completion of the
capitalization plans, the proposed transfer of assets to the DIA,
and more clarity about the future business model.
S&P expects that completion of the capital increase in accordance
with announced terms and progress with the planned asset buyout
could lead to positive rating actions.
S&P might consider lowering the ratings if its concerns regarding
capitalization, liquidity, and asset quality are magnified beyond
its current estimations and the authorities have to take more
drastic action, which may imply a weakening of state support.
S&P might affirm the ratings if the bank's financial standing
doesn't change and external support remains at current levels.
MAGNITOGORSK OAO: S&P Affirms 'BB' Long-Term Corp. Credit Rating
----------------------------------------------------------------
Standard & Poor's Ratings Services said that it had affirmed its
'BB' long-term corporate credit, 'B' short-term corporate credit,
and 'ruAA' Russia national scale ratings on Russian steel producer
OAO Magnitogorsk Metallurgical Kombinat.
The ratings were subsequently withdrawn at the issuer's request.
The outlook at the time of withdrawal was negative.
SEVERSTAL OAO: Fitch Affirms Issuer Default Rating at 'B+'
----------------------------------------------------------
Fitch Ratings has affirmed Russia-based metals and mining company
OAO Severstal's Long-term foreign currency Issuer Default Rating
at 'B+', removed it from Rating Watch Negative and assigned a
Negative Outlook. Fitch has simultaneously affirmed Severstal's
Long-term local currency IDR at 'B+' and its National Long-term
rating at 'A(rus)'. Both these ratings have also been removed
from RWN and assigned Negative Outlooks. The Short-term foreign
currency IDR is affirmed at 'B'. Severstal's senior unsecured
rating is affirmed at 'B+' and removed from RWN. The Recovery
Rating for the senior unsecured debt is 'RR4'.
The affirmation of Severstal's ratings reflects the expected
stabilization of its operating and financial performance in 2010,
due to a forecasted slow recovery in steel volumes and
stabilization of prices at levels achieved in H209. Under Fitch's
modelling assumptions for 2010, production is expected to grow 10%
at domestic facilities, 20-22% at US facilities and about 10-13%
at European facilities. As a result, Severstal's consolidated
revenue is expected to increase by 12-14% in 2010 and the company
is anticipated to achieve an EBITDAR margin of 11-14% from an
expected 4-5% in FY09. The agency nonetheless expects overseas
operations may remain dilutive in 2010, with a negative EBITDAR
margin of 6%-9%. Russian steel operations are expected to
generate an EBITDAR margin of 22%-25%, due to the low cost
position and self-sufficiency in key raw materials (iron ore and
coking coal).
The resolution of the RWN reflects the successful outcome of the
company's covenant renegotiations which have resulted in an
increase in covenant headroom on Severstal's various debt
facilities. Fitch expects Severstal's FY10 gross leverage to
improve to 3.3x-3.5x compared with expected gross leverage of
8.0x-9.0x in FY09, and for net leverage to improve to 3.0x-3.2x
compared with expected net leverage of 5.0x-6.0x in FY09. The
agency also anticipates that funds from operations interest
coverage will improve to 2.8x-3.3x compared with an expected 1.5x-
2.0x in FY09. Fitch nonetheless notes that incurrence covenants
for eurobonds remain at the existing level (debt/EBITDAR less than
3.5x) which limits Severstal's ability to access new debt, except
for specifically permitted instances including debt refinancing,
until it complies with these covenants.
The Negative Outlook reflects Severstal's high dependence on the
speed of recovery in demand and prices for steel products in
various markets, high expected leverage in FY09 above 'B+'-rated
peers, uncertainties on finalizing restructuring plans for North
American and European operations, and the risks in executing these
restructuring plans.
As of end-Q309, Severstal had total debt of US$7.9 billion. Fitch
notes that the share of short-term debt decreased to 19% in 9M09
from 23% due to issuance of rouble bonds and repayment of short-
term facilities. Fitch considers Severstal's current liquidity
position to be adequate. At end-Q309, Severstal had cash and
short-term deposits of US$3.2 billion, and undrawn committed
facilities of US$441 million against total short-term debt of
US$1,495 million. The agency also notes that 9M09 net operating
cash flow increased to US$843 million from US$488 million in part
due to significant working capital releases of US$442 million in
Q309 and improvement in FFO generation. The main contributor of
the working capital release was US operations. However, Fitch
notes that the generation of FFO in 9M09 remained negative due to
loss making international operations. For 2010, the agency
expects that Severstal will be able to return to positive FFO
generation due to an expected improvement in consolidated EBITDAR.
=============================
S L O V A K R E P U B L I C
=============================
SKYEUROPE AIRLINES: First Creditors Meeting Set for March 1
-----------------------------------------------------------
Radoslav Tomek at Bloomberg News, citing SITA news agency, reports
that SkyEurope Airlines AS's administrator, Lubomir Bugan, said
the first meeting of creditors of SkyEurope Airlines AS will be
held on March 1 in the Slovak capital Bratislava.
According to Bloomberg, the newswire said the company, which filed
for bankruptcy on Aug. 31, had almost 4,000 creditors with claims
totaling EUR4.6 million (US$6.5 million) as of Dec. 31.
=========
S P A I N
=========
BANKINTER 3: Moody's Downgrades Rating on Series D Notes to 'B3'
----------------------------------------------------------------
Moody's Investors Service has taken actions on the long-term
credit ratings of these notes issued by Bankinter 3 FTPYME FTA:
-- EUR180.0 million series A1 notes, confirmed at Aaa; previously
on 18 March 2009 placed under review for possible downgrade.
-- EUR288.9 million series A2 notes, downgraded to Aa1 from Aaa;
previously on 18 March 2009 placed under review for possible
downgrade;
-- EUR23.1 million series B notes, downgraded to Baa3 from A1;
previously on 18 March 2009 placed under review for possible
downgrade;
-- EUR6.0 million series C notes, downgraded to Ba2 from Baa3;
previously on 18 March 2009 placed under review for possible
downgrade;
-- EUR10.8 million series D notes, downgraded to B3 from Ba3;
previously on 18 March 2009 placed under review for possible
downgrade.
Moody's initially assigned definitive ratings in November 2007.
The rating action has been prompted by a higher-than-expected
level of delinquencies. As of end of November 2009, the
cumulative 90+ delinquencies (i.e. the cumulative amount of loans
that became 90 days delinquent, counting each loan only once and
for its value the first time it became 90 days delinquent) were
equal to 3.91% of the original portfolio balance, compared to
3.28% as of the previous quarterly reporting date. High
delinquencies have so far resulted in reserve fund draws, and
following the November payment date, the reserve fund stands at
EUR16.6 million, below its target level of EUR17.4 million.
As part of the review, Moody's has considered the exposure of the
transaction to the real estate sector (either through security in
the form of a mortgage or debtors operating in the real estate
sector). The deterioration of the Spanish economy has been
reflected in the negative sector outlook Moody's published on the
Spanish SMEs ABS.
As a result of the above, Moody's has revised its assumption of
the default probability of the SME debtors to an equivalent rating
in the single B-range for the debtors operating in the real estate
sector and in the low Ba-range for non-real-estate debtors. At
the same time, Moody's estimated the remaining weighted-average
life of the portfolio as equal to 6.2 years. These revised
assumptions have translated into an increase of the cumulative
mean default assumption for the transaction to 11.2% of the
current portfolio balance (corresponding to 12% of original
portfolio balance). Moody's original mean default assumption was
4.5% of original balance, with a coefficient of variation of
47.5%. Moody's used a Monte Carlo simulation to determine the
probability function of the defaults, resulting in a coefficient
of variation of 48.5%. The recovery rate assumption is 70%,
unchanged from the closing assumption. The revised CPR assumption
is now in the range of 2% to 5%, comparable to values observed
throughout the last reporting periods, while the original CPR
assumption was 10% at closing. Given the limited amount of spread
in the transaction, Moody's has tested different levels of excess
spread in its cash flow modeling. Moody's also modeled the
sequential payment trigger among the series A1-A2-A3, which would
be hit if the outstanding 90+ delinquencies exceed 3% (as of
November 2009 the outstanding 90+ delinquencies were equal to
2.6%).
The increased credit enhancement available in the structure due to
the amortization of the portfolio (as of November 2009, the pool
factor was equal to 71%) is insufficient to offset the impact of
the revised performance assumptions on the ratings of the series
A2, B, C and D notes. Series A1 notes Aaa rating was confirmed
given the low outstanding amount and high likelihood to be repaid
in the short term before the sequential to pro-rata trigger may be
hit.
The rating of the EUR91.2 million Series A3(G) notes, Aaa, was not
placed on review for possible downgrade in March 2009 as it
benefits from the guarantee of the Government of Spain for
interest and principal payments. However, the expected loss
associated with Series A3(G) notes without the Spanish Government
guarantee -- which was consistent with a Aaa rating at closing of
the transaction -- would be consistent with a Aa1 rating.
BANKINTER 3 FTPYME, FTA is a securitization of loans to small- and
medium-sized enterprises carried out by Bankinter, S.A. under the
FTPYME programme. At closing, the portfolio consisted of 2,166
loans. The loans were originated between 1997 and 2007, with a
weighted average seasoning of 1.78 years and a weighted average
remaining term of 12.95 years. The concentration in the "building
and real estate" sector according to Moody's industry
classification was approximately 29% as of closing.
As of November 2009, the number of loans in the portfolio was
equal to 1,864 and the weighted-average remaining term was equal
to 12.4 years. The concentration levels by industry and region
are similar to their levels at closing.
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.
TDA PASTOR: Fitch Affirms Rating on Class D Notes at 'BB'
---------------------------------------------------------
Fitch Ratings has changed the Outlooks on TDA Pastor 1, Fondo de
Titulizacion de Activos' junior and mezzanine note to Stable from
Positive, to reflect the decline in credit support available to
these notes as a result of reserve fund amortization. The notes
are affirmed following the good performance of the deal. The
rating actions are:
-- Class A1 (ISIN ES0377980000) affirmed at 'AAA'; Outlook
Stable; Loss Severity Rating 'LS-1' assigned
-- Class A2 (ISIN ES0377980018) affirmed at 'AAA'; Outlook
Stable; Loss Severity Rating 'LS-1' assigned
-- Class B (ISIN ES0377980026) affirmed at 'A'; Outlook
Positive; Loss Severity Rating 'LS-1' assigned
-- Class C (ISIN ES0377980034) affirmed at 'BBB'; Outlook
revised to Stable from Positive; Loss Severity Rating 'LS-2'
assigned
-- Class D (ISIN ES0377980042) affirmed at 'BB'; Outlook revised
to Stable from Positive; Loss Severity Rating 'LS-3' assigned
As of December 2009, the transaction reported a reserve fund
balance above the minimum required amount of EUR2.5 million. The
reserve fund continues to amortize in line with the transaction
documentation. Fitch expects the reserve fund to reach its floor
in the course of 2010. The further amortization of the reserve
fund will lead to a further decline in the credit enhancement of
the class D notes. For this reason, in combination with the
deteriorating macro economic environment in Spain, Fitch has
revised the Outlook on this class to Stable as the likelihood of
an upgrade has reduced.
In addition, the class D notes continue to amortize by the
prescribed EUR120,250 each quarter, using funds received from
participative loans of TDA 10 and TDA 13 MIXTO. The agency
expects these notes to be fully amortized in four quarters' time;
however, due to the subordinate nature of these two back-up loans
of TDA 10 and TDA 13 MIXTO, which also form part of the collateral
of TDA Pastor 1, the ratings of these notes are not subject to an
upgrade. The full amortization of these notes, combined with the
continued amortization of the reserve fund, will lead to a decline
in the credit support of the class C notes, which is the reason
for the Outlook revision on this tranche.
The performance of the underlying collateral in this pool
continues to show no major risks. Loans in arrears by more than
three months in October 2009 made up 0.2% of the current
portfolio, while net cumulative defaults were reported at 0.1% of
the initial portfolio. The weighted average loan-to-value ratio
of the pool was reported as 43% (compared to 61% at transaction
close). Fitch has no reason to believe that the performance of
these loans will deteriorate to levels that would threaten the
more senior notes, which is why the Positive Outlook on the class
B notes has been maintained.
Fitch used its EMEA RMBS surveillance criteria, employing its
credit cover multiple methodology in reviewing the deals, to
assess the level of credit support available to each class of
notes.
===========================
U N I T E D K I N G D O M
===========================
BRITISH AIRWAYS: Cabin Crew Union Withdraws Easter Strike Threat
----------------------------------------------------------------
Philip Pank at The Times reports that the union representing
British Airways cabin crew has withdrawn the threat of an Easter
strike.
The report relates after talks broke down last week, the Unite
union announced that it would reballot its 12,000 cabin crew from
next Monday. According to the report, under the current
timetable, the ballot will close on February 22. Unite would have
to give BA one week's notice of a strike and must begin industrial
unrest within 28 days, the report discloses.
The report says in the absence of talks, a strike is likely in
March, sparing BA a massive loss of revenue from the April holiday
period.
"I want to make it abundantly clear that, if industrial action
receives the required mandate from the members and strike action
is made necessary by continuing management intransigence, we will
not call such action over the Easter holiday period. We are
making this announcement now so families can plan their travel
arrangements in confidence," the report quoted Len McCluskey, the
Unite assistant general secretary who had been leading
negotiations this year, as saying. "It remains our hope that this
dispute can be resolved through negotiation, without the need for
strikes at any time at all. But this can only happen if BA
management wake up and realize that treating their greatest asset
-- skilled and professional employees -- as enemies is the road to
ruin. You can't fly planes on management machismo."
According to the report, BA said that it was willing to talk, but
that there were no negotiations planned.
Unite has called the strike in protest at changes to crew rosters
-- at least one cabin crew has been taken off BA flights since
November -- which it says have been imposed by management, the
report notes.
As reported by the Troubled Company Reporter-Europe on Jan. 20,
2010, The Times said that BA is asking its ground staff to retrain
as cabin crew as the airline faces the threat of a walkout that
could ruin Easter holidays. The Times disclosed check-in agents,
baggage handlers or back-room staff could be drafted in to serve
the drinks after cabin crew union leaders announced plans for a
new strike ballot. The Times said the plea, though unusual, is
likely to be legal if the stand-ins are given accredited training.
About British Airways
Headquartered in Harmondsworth, England, British Airways Plc,
along with its subsidiaries, (LON:BAY) -- http://www.ba.com/-- is
engaged in the operation of international and domestic scheduled
air services for the carriage of passengers, freight and mail and
the provision of ancillary services. The Company's principal
place of business is Heathrow. It also operates a worldwide air
cargo business, in conjunction with its scheduled passenger
services. The Company operates international scheduled airline
route networks together with its codeshare and franchise partners,
and flies to more than 300 destinations worldwide. During the
fiscal year ended March 31, 2009 (fiscal 2009), the Company
carried more than 33 million passengers. It carried 777,000 tons
of cargo to destinations in Europe, the Americas and throughout
the world. In July 2008, the Company's subsidiary, BA European
Limited (trading as OpenSkies), acquired the French airline,
L'Avion.
* * *
As reported in the Troubled Company Reporter-Europe on Nov. 12,
2009, Moody's placed the Ba3 Corporate Family and Probability of
Default Ratings of British Airways plc and the senior unsecured
and subordinate ratings of B1 and B2 under review for possible
downgrade.
BRIXTON PLC: Ex-Chief Took Ski Trip Despite Insolvency Threat
-------------------------------------------------------------
Michael Herman at The Times reports that the Central London
Employment Tribunal heard Wednesday that Tim Wheeler, the former
chief executive of Brixton Plc, refused to cancel a holiday trip
and concentrate on rescuing the ailing commercial property
company.
According to the report, Steve Owen, Mr. Wheeler's former deputy
chief executive, said Mr. Wheeler took the Japanese skiing holiday
in February 2009 despite Brixton being "on the brink of possible
insolvency".
Mr. Owen was giving evidence for Brixton, which is defending an
unfair-dismissal claim brought by Mr. Wheeler after he was sacked
in March 2009, the report relates.
The report relates Mr. Owen told the employment tribunal that,
with commercial property prices "in free fall" after the credit
crunch and the collapse of Lehman Brothers, "Brixton was in the
midst of the worse financial crisis in living memory".
Mr. Owen said that while other Brixton executives were canceling
holidays to work on an emergency refinancing, Mr. Wheeler took
three holidays between Christmas 2008 and February 2009, the
report notes.
"What Brixton needed was a decisive and effective leader, but at
this crucial time he [Mr. Wheeler] simply appeared to focus on his
own interests," the report quoted Mr. Owen as saying.
According to the report, Mr. Wheeler declined to comment. The
case continues, the report states.
Brixton plc -- http://www.brixton.plc.uk/-- is a United Kingdom-
based Company. The Company and its subsidiaries are engaged in
property investment and development, together with the management
of its properties. The Company owns nearly 90 estates with over
1,300 units. The Company's wholly owned subsidiary B-Serv Ltd is
responsible for asset management and customer service. The
Company owns 19 millions square feet of industrial and warehouse
property in the United Kingdom. Approximately 72% of the
Company's portfolio is located in the markets of Heathrow and Park
Royal.
EPIC PLC: Moody's Downgrades Rating on Class A Notes to 'Caa3'
--------------------------------------------------------------
Moody's Investors Service has downgraded the Class A Notes issued
by Epic (Industrious) plc (amount reflects initial outstandings):
-- GBP309,560,000 Class A Floating-Rate Notes due 2014 downgraded
to Caa3 from Caa2; previously downgraded to Caa2 from Ba3 on 4
August 2009.
Moody's does not rate the Classes B, C, D, E, F and X Notes issued
by Epic (Industrious) plc.
1) Transaction Overview and Performance History
Epic (Industrious) plc is a fully funded synthetic securitization
of a single commercial mortgage loan originated by the Royal Bank
of Scotland plc which closed in October 2006. The loan was
originally secured by 120 industrial properties throughout the UK.
The initial GBP488 million securitized loan is the senior facility
of an initial GBP585 million whole loan. The Whole Loan was split
into four separate loan facilities, which are all subject to the
regulations of one intercreditor agreement. The Whole Loan is a
five-year interest-only loan with a scheduled maturity in April
2011.
The transaction significantly underperformed Moody's initial
expectations since mid 2008. The main reasons for the
underperformance were (i) a continued deterioration of rental cash
flow (caused by rising vacancy rates, adverse tenant performance,
increased costs and a decline in estimated rental values) and (ii)
a significant decline in the value of the property portfolio amid
the steadily worsening property market conditions in the UK.
The weak performance resulted in a sequence of events including
(i) a LTV covenant breach causing an event of default under the
Whole Loan in September 2008; (ii) the insolvency of the borrowers
followed by the appointment of receivers, which triggered (iii) a
credit event under the credit default swap as at 18 September
2008; and (iv) the block sale of the property portfolio by the
receivers in a distressed property market in October 2009,
impacting considerably the expected recovery amounts and hence the
credit risk profile of the Class A Notes.
In light of the weak performance outlined above, Moody's
repeatedly downgraded the Class A Notes to the Caa3 from its
initial Aaa rating.
2) Rating Rationale
The rating action has been mainly prompted by (i) higher than
expected swap termination costs of the interest rate swap for the
Super Senior Facility and (ii) a sales price of the portfolio that
was lower than expected by Moody's in the last rating action in
August 2009.
Moody's last rating action in August 2009 followed the partial
sale of 31 properties at a public auction in July 2009. The
remaining part of the property portfolio was sold on 7 October
2009. The disposal price for the remaining portfolio was
confirmed at GBP219.9 million while the disposal price achieved at
the public auction in July 2009 was GBP43.3 million; in total
GBP263.2 million. The total achieved purchase price of the
portfolio is slightly below Moody's estimated property value of
GBP275 million in the previous rating action in August 2009.
Compared to closing of the transaction the total achieved disposal
value of the property portfolio was approximately 60% below the
initial underwritten market value of GBP655.4 million as of August
2006.
According to the Issuer Notice dated December 21, 2009, the
termination of the interest rate swap for the Super Senior
Facility resulted in swap termination costs of GBP33.9 million vs.
GBP25 million previously estimated by Moody's.
There is still limited visibility in relation to the level of
other costs, particularly on potential fees and expenses relating
to the receivers, security trustee and other parties involved. In
addition, the timing of the final calculation of the credit
protection payment amount under the CDS and its allocation to the
Notes is still not known. In Moody's view, the likelihood that
the final loss allocation to the Notes will occur in the first
quarter of 2010 is rather limited, but a loss allocation is
expected at a later date in 2010.
Based on the currently available information the expected loss for
the Class A Notes has in Moody's view increased compared to the
previous estimate of 15%-30% and is likely to range between 30%
and 40%. As there is still limited visibility on the level of
other costs as well as on timing for the final winding up of the
transaction the current rating might still be exposed to potential
further volatility. All other classes of Notes are expected to
suffer a full principal loss at the final determination date.
The last rating action on this transaction was the rating
downgrade for the Class A Notes on August 4, 2009. The last
Performance Overview for this transaction was published on
November 12, 2009.
EUROPEAN COMMERCIAL: Goes Into Liquidation
------------------------------------------
Dominic Perry at RoadTransport.com reports that European
Commercial Freight has gone into liquidation following a
creditors' meeting earlier this month.
Citing a statement of affairs filed at Companies House by
liquidators Jonathan Philmore and William Duncan of RSM Tenon, the
report says the company had a total deficiency of GBP480,613.
The report relates the firm went into liquidation on Jan.5
European Commercial Freight is a 12-vehicle international operator
in Hull.
HARRIS LOGISTICS: Goes Into Liquidation; Tenon Recovery on Board
----------------------------------------------------------------
Dominic Perry at RoadTransport.com reports that Milton Keynes-
based five-truck hauler Harris Logistics has gone into
liquidation.
The report relates the firm appointed Timothy Dolder and Gareth
Roberts of Tenon Recovery on Jan. 6.
According to the report, Harris Logistics' statement of affairs
shows a total deficiency of GBP139,608 at the company.
JD WETHERSPOON: Sales Fall Due to Bad Weather; Begins Debt Talks
----------------------------------------------------------------
The Scotsman reports that JD Wetherspoon plc's sales fell as
snowbound drinkers stayed at home.
According to the report, the company said sales at pubs open for
more than a year fell 0.3% in the 12 weeks to January 17.
The last two weeks were the worst-hit by the bad weather, with
comparable sales for the ten weeks to January 3 up 1.2%, the
report says.
John Hutson, Wetherspoon's chief executive, confirmed that the
company has begun talks with its banks over the restructuring of a
GBP435 million credit line due to expire next December -- and
played down the possibility of a rights issue.
"We'll keep our options open but our preferred option would be to
replace debt with debt. A rights issue would be our least
preferred option," the report quoted Mr. Hutson as saying.
JD Wetherspoon plc -- http://www.jdwetherspoon.co.uk/-- is a
United Kingdom-based company engaged in the development and
management of public houses. The Company owns and operates pubs
throughout the United Kingdom. During the fiscal year ended July
26, 2009 (fiscal 2009), the Company opened 39 pubs, 13 of which
were freehold, disposed of one pub and closed one other, resulting
in a total estate of 731 pubs. During fiscal 2009, the Company
stocked approximately 600 guest beers, from a range of
microbrewers. During April 2009, the Company ran a real-ale
festival in the world, selling 3.3 million pints over 20 days.
The Company is also engaged in selling Tierra, Lavazza's
Rainforest-Alliance-certified sustainable coffee.
JJ & HB: Cuts 132 Jobs at Three Sites; 44 Staff Retained
--------------------------------------------------------
BBC News reports that cashmere manufacturer JJ & HB Cashmere,
which went into administration earlier this month, will cut 132
jobs at its Caerlee Mill in Innerleithen, and at sites in
Galashiels and Coatbridge.
The report relates joint administrators BDO LLP confirmed sites at
Coatbridge and Galashiels would close with staffing cuts in
Innerleithen.
According to the report, some 44 staff members will be retained as
the administrator continues to seek a new buyer for the business.
"Due to the loss of a major customer, it is highly regrettable
that we've had to take this decision," the report quoted James
Stephen, business restructuring partner, as saying. "However, we
still hope to sell the remaining business and assets as a going
concern and have already received an expression of interest in
this respect."
LINK TELECOM: O2 Severs Ties Following Administration
-----------------------------------------------------
Bradford Telegraph and Argus reports that 02 has dumped mobile
dealership Link Telecom as a business partner following
revelations it went into administration owing huge sums of money
to schools in Bradford.
According to the report, a total of 90 organizations, including
primary and secondary schools, are seeking to recover money they
are owed in so-called "cash back" deals engineered by Link
Telecom.
The initial three-year contracts were for Link Telecom to provide
9,000 "free" phones in exchange for monthly contract payments from
the schools to network provider O2, the report says. In turn,
schools would have the full contract payments reimbursed by Link
Telecom from commission the company received from O2, the report
discloses.
But Link Telecom started to miss payments towards the end of last
year before it went into administration in October, owing
GBP6.4 million to all its creditors, the report recalls.
The report relates a spokesman for O2 said it had received
complaints from about 15 schools connected to O2 by Link Telecom,
which has kept its name but is now trading as ETC Communications,
under new ownership.
O2 has severed its ties with the company, citing its right due to
the change of ownership and vowed to resolve the issues with the
schools directly, the report states.
MANCHESTER UNITED: Debts Soar to GBP717 Mln; May Pay More Interest
------------------------------------------------------------------
Roger Blitz and Anousha Sakoui at The Financial Times report that
accounts issued Wednesday for Red Football Joint Venture, the
Glazers' ultimate holding company for Manchester United, reveal
that the club's overall debt has risen from GBP699 million to
GBP717 million.
According to the FT, the holding group paid GBP68.5 million in
interest in the year to June 30, and made an overall profit of
GBP6.4 million.
The FT says the club faces having to pay more in interest to
investors in its high-risk debt because it is in danger of
exceeding a threshold measuring its leverage.
The club is at risk of exceeding a threshold set in the payment-
in-kind notes -- an instrument allowing borrowers to roll over
cash interest payments -- which were issued as part of its GBP790
million buy-out in 2005, the FT discloses.
Exceeding that threshold, where net debt to earnings before
interest, tax, depreciation and amortization becomes greater than
five times, requires the group to pay 2 percentage points in
additional interest, the FT states.
Manchester United Limited -- http://www.manutd.com/-- operates
Manchester United Football Club, one of the most popular and
successful soccer teams in the world. Man U is currently the top
soccer team the UK's Premier League, boasting 18 championships and
11 FA Cup titles. Manchester United generates revenue primarily
through ticket sales at venerable Old Trafford stadium, as well as
through broadcasting rights and sales of Red Devils merchandise.
Man U was founded as Newton Heath in 1878 before changing its name
in 1902. It is owned by American tycoon Malcolm Glazer, whose
holdings include the Tampa Bay Buccaneers NFL team and a majority
stake in Zapata.
MORGANS INDEPENDENT: Placed Into Administration
-----------------------------------------------
Geordie Clarke at FTAdviser reports that Alexander Brodie, chief
executive of Morgans Independent Advisers PLC, said the company
has been placed into administration as a result of difficult
trading caused by the recession.
According to the report, Morgans Independent Advisers PLC went
into administration on November 18. Steven Parker and Trevor
Binyon of RSM Tenon were appointed joint administrators of the
firm, the report relates.
"Morgans Independent Advisers went down because it was insolvent."
the report quoted Mr. Brodie as saying, "You could say that we
tried to expand too quickly and we were hit by the recession."
Martin Austin, director at RSM Tenon, confirmed that the firm was
in administration and that some of the insolvent company's assets
had been sold to a new entity, Morgans IFA LLP, on November 20,
2009, the report notes.
In its most recent financial statement for the year to March 31,
2009, the firm had turnover of GBP3.3 million, of which GBP392,329
was fee income and GBP2.9 million was from commission payments,
the report discloses. It posted an operating loss of GBP131,000
and administrative expenses of GBP3.44 million, the report states.
Morgans Independent Advisers PLC is a London-based independent
financial adviser. It is a subsidiary company of the Morgans
Group.
MORRIS INNS: In Administration; PKF Seeks Buyer for Business
------------------------------------------------------------
BBC News reports that Morris Inns has gone into administration.
Morris Inns runs the Da Luciano restaurant and bar in Bothwell and
Redstones hotel in Uddingston, and employs 60 people across the
two sites, the report discloses.
According to the report, receivers, PKF, said both businesses
would continue to trade while a buyer was sought.
The firm blamed the recession and disappointing festive trade for
its failure, the report notes.
ROYAL BANK: JP Morgan Nears Sempra Commodities Acquisition Deal
---------------------------------------------------------------
Patrick Jenkins and Javier Blas at The Financial Times report
that JPMorgan is entering exclusive talks to buy RBS Sempra
Commodities, for more than US$4 billion.
According to the FT, people close to the negotiations said on
Wednesday a deal could be announced in a matter of days.
The sale of the business -- a joint venture between RBS, the
rescued UK bank, and US group Sempra Energy -- was triggered by a
European Commission state-aid ruling late last year ordering RBS
to divest its stake, the FT notes.
The FT says a deal would make JPMorgan a fourth big force in the
commodities trading business alongside Goldman Sachs, Morgan
Stanley and Barclays Capital, following a two-year acquisition
drive by Jamie Dimon, JPMorgan chief executive.
The FT relates bankers said JPMorgan aims to announce a deal by
early February, limiting the window for due diligence to about a
week.
About RBS
The Royal Bank of Scotland Group plc (NYSE:RBS) --
http://www.rbs.com/-- is a holding company of The Royal Bank of
Scotland plc (Royal Bank) and National Westminster Bank Plc
(NatWest), which are United Kingdom-based clearing banks. The
company's activities are organized in six business divisions:
Corporate Markets (comprising Global Banking and Markets and
United Kingdom Corporate Banking), Retail Markets (comprising
Retail and Wealth Management), Ulster Bank, Citizens, RBS
Insurance and Manufacturing. On October 17, 2007, RFS Holdings
B.V. (RFS Holdings), a company jointly owned by RBS, Fortis N.V.,
Fortis SA/NV and Banco Santander S.A. (the Consortium Banks) and
controlled by RBS, completed the acquisition of ABN AMRO Holding
N.V. (ABN AMRO). In July 2008, the company disposed its entire
interest in Global Voice Group Ltd.
* * *
As reported by the Troubled Company Reporter-Europe on Dec. 22,
2009, Fitch Ratings upgraded The Royal Bank of Scotland Group's
(RBS Group) and The Royal Bank of Scotland's Individual Ratings to
'D/E' from 'E' and removed the Rating Watch Positive. The upgrade
of the Individual Ratings reflects improvements in the group's
capital combined with some progress in restructuring the balance
sheet.
TAYLOR WIMPEY: Home Sales Down 24% in 2009 Due to Market Slump
--------------------------------------------------------------
Tim Barwell at Bloomberg News reports that Taylor Wimpey Plc sold
24% fewer homes in 2009 following the worst housing crash in 25
years.
Bloomberg relates the company said in a statement on Monday sales
were completed on a total of 10,186 homes in 2009, compared with
13,394 a year earlier.
Taylor Wimpey's order book stood at 3,048 homes at the end of
2009, a 62% gain from a year earlier, adding to signs the housing
market is improving, Bloomberg says.
According to Bloomberg, Taylor Wimpey said it reduced net debt to
about GBP750 million as of Dec. 31, compared with GBP1.53 billion
a year earlier, helped by a GBP510-million share sale announced
last May.
As reported by the Troubled Company Reporter-Europe on Aug. 17,
2009, Fitch Ratings upgraded Taylor Wimpey's Long-term Issuer
Default rating to 'B' from 'B-' and senior unsecured rating to
'B-' from 'CCC'. Fitch simultaneously removed both ratings
from Rating Watch Positive. The Recovery Rating on the debt is
'RR5'. The Short-term IDR had been affirmed at 'B'. The Outlook
on the Long-term IDR is Stable.
The upgrade of the ratings reflects TW's improved credit profile,
largely due to debt amendments in April which avoided an imminent
covenant breach and aligned all bank and bond maturities to 2012,
a GBP510 million equity raising in May which reduced debt levels,
and evidence of positive free cash flow (GBP233 million at H109,
on a LTM basis). These measures were achieved despite a severe
downturn in TW's key UK and US housing markets. TW's ratings had
been on RWP pending receipt of information and a review of TW's
updated strategy and forecasts, which has now been completed.
The ratings were nonetheless constrained by significant concerns
that TW may not be sufficiently cash-generative over the coming
three years to repay or support the refinancing of up to GBP1,875
million (if fully drawn) of debt maturities in 2012, especially if
housing market conditions remain weak. Despite the reduction in
debt following the equity issuance, TW remained over-leveraged
with net debt of GBP1,034 million relative to funds from
operations (FFO) of GBP58.2 million as of H109, on an LTM basis.
TW's ability to deleverage and position itself for a refinancing
remains highly dependent on market conditions. Despite tentative
signs of a stabilization in the UK housing market, fundamental
indicators, such as unemployment, affordability, mortgage lending
and interest rate expectations point to risks of further market
weakness over the coming 1-3 years. Weak market conditions, or
even a secondary downturn, could stress TW's cash flows to the
point where material deleveraging is not achievable.
The ability of TW to reduce debt will also depend on its
management of working capital. The recent contraction in the
business, which has caused working capital to unwind, has helped
TW generate significant FCF, and boosted key credit metrics such
as CFO/net debt (to 33% at H109, versus 10% at FY08). However,
the company must reinvest in the business going forward, and to
this end, TW may increase the number of active sites and resume
land purchases in H209. This will likely reduce future working
capital inflows, thus diminishing FCF and limiting further debt
reduction over the near term. While investing in sites and new
land is essential to drive growth, doing so could also heighten
TW's exposure to further market weakness.
Covenant headroom may also be a concern going forward, with Fitch
forecasting that TW could struggle to comply with its operational
cash flow covenant by as early as 2011 as covenant levels tighten.
Thus although TW's current liquidity position appears strong (with
cash balances of GBP73 million and access to GBP806 million of
committed undrawn facilities at H109, relative to zero scheduled
debt maturities until 2012), liquidity issues could re-emerge if
covenant compliance becomes problematic.
About Taylor Wimpey
Taylor Wimpey plc -- http://www.taylorwimpey.com-- is a
homebuilding company with operations in the United Kingdom, North
America, Spain and Gibraltar. The Company has 34 regional
businesses and five smaller satellite operations. It operates two
core brands: Bryant Homes and George Wimpey. The George Wimpey
brand incorporates modern design and contemporary living into each
home and offers customers a range of options to personalize their
home. Its Gibraltar business operates in the luxury apartment
market. The Company operates in five divisions: Housing United
Kingdom, Housing North America, Housing Spain and Gibraltar,
Construction and Corporate. On July 3, 2007, George Wimpey PLC
merged with Taylor Woodrow plc to create Taylor Wimpey plc. In
September 2008, the Company announced the sale of the United
Kingdom business of Taylor Woodrow Construction to VINCI PLC.
VIRGIN MEDIA: Fitch Assigns 'BB+' Rating on New Senior Notes
------------------------------------------------------------
Fitch Ratings has assigned Virgin Media Secured Finance Plc's new
2018 senior secured notes, issued in tranches of GBP875 million
and US$1,000 million, a final rating of 'BB+'. Virgin Media
Secured Finance Plc's ultimate parent is Virgin Media Inc. ('BB-
'/Positive/'B').
The upsized GBP1.5 billion equivalent issue has been placed in
two tranches: US$1,000 million 6.5% senior secured notes and
GBP875 million 7% senior secured notes each with a final maturity
in January 2018. The notes were issued at a discount, the issue
price of the US$ notes being 98.488% and of the GBP notes being
98.503%. The senior secured bonds are guaranteed and secured on a
first-ranking basis, equally with the Virgin Media Investment
Holdings senior secured loan facilities, also rated 'BB+'.
However, there are certain carve-outs and exceptions to this
principle (see Fitch's commentary on 12 January 2010). The net
proceeds of approximately GBP1,453 million equivalent will be used
to prepay various tranches of the senior secured loan facilities.
* UK: Number of Recruitment Agencies Going Bust Up to 57 in 2H09
----------------------------------------------------------------
Recruiter reports that the number of recruitment agencies going
into administration in the United Kingdom increased for the third
consecutive six-month period at the end of 2009.
Citing monitoring service Business Sale Report, Recruiter says in
the second half of the year 57 recruitment companies went into
administration, compared with 45 during the same period in 2008.
Many of the businesses that went into administration have gone on
to continue operating in some form, Recruiter notes.
"I have seen a significant increase in problems in the recruitment
sector this year (2009). The main reason for this is the general
downturn in the market. We have seen the headline unemployment
figures rise and it is easier for employers to lay off temporary
workers first," the report quoted Bob Young, a partner at business
rescue, recovery and restructuring specialist Begbies Traynor, as
saying.
* UK: Treasury Seeks to Widen Funding Choices For Companies
-----------------------------------------------------------
Anousha Sakoui and Brooke Masters at The Financial Times report
that the UK Treasury last week published a discussion paper on
non-bank lending, seeking views on what barriers there were to
diverse forms of funding for companies in the UK, with a view to
introducing proposals for reform later in the year.
According to the FT, the move highlights the obstacles companies
in the UK and continental Europe face in seeking alternative
sources of financing. The report highlights how much more
dependent European companies have been on bank lending, the FT
notes.
The banking crisis has prompted companies from Manchester United
to Virgin Media to turn to bond markets in unprecedented volumes
as they look to refinance bank debt, the FT recalls.
The FT says one of the areas being looked into by the UK
government is whether companies need to disclose more information
about their finances to improve investor confidence and help open
up the market. Other bankers believe the lack of use of credit
ratings is an issue, the FT notes.
* UK: Recession Blamed for Increase in Pension Scheme Closures
--------------------------------------------------------------
BBC News reports that the Pension Protection Fund has warned the
recession has produced a "marked rise" in the risk of pension
schemes going bust.
According to the report, the PPF blamed a deterioration in scheme
funding, poorer economic prospects and a higher risk of employers
going bust.
"The Insolvency Services' company liquidation rate rose from 0.6%
in the 12 months to the first quarter of 2008, to 0.8% in the 12
months to the first quarter of 2009, with a further rise to 0.9%
by the third quarter," it said.
The report relates comments came in the PPF's annual review of
final-salary pension schemes, published with the Pensions
Regulator.
The review, known as the Purple Book, says the rate of company
liquidations has risen by 50% in the past two years, the report
discloses.
"The recession increased the risk of insolvency for companies
sponsoring defined-benefit schemes while financial market
movements worsened scheme funding," the Purple Book pointed out,
according to the report.
In the year to March 31, 2009, more business had come the way of
the PPF, with 240 schemes under assessment at that point for
potential rescue, compared with 217 schemes at the same stage a
year earlier, the report states.
===============
X X X X X X X X
===============
* Coface Sees End of Global Recession as Default Rates Drop 40%
---------------------------------------------------------------
Katrina Nicholas at Bloomberg News reports that ratings company
and export credit insurer, Coface, said a 40% drop in companies
defaulting during the second half of last year is evidence the
global recession is ending.
"The decrease in payment defaults clearly indicates that the
credit crisis is over," Bloomberg quoted Coface, a unit of French
bank Natixis SA, as saying in an e-mailed statement Wednesday.
"This correlates with the end of the recession in most major
industrialized countries at the end of the third quarter."
Bloomberg recalls Moody's Investors Service said in a report dated
Jan. 11 global default rates peaked at 12.9% in November after the
collapse of Lehman Brothers Holdings Inc. in September 2008
shuttered credit markets.
Coface made 20 upgrades in country ratings and eased the outlooks
for all industrialized nations except the U.K., Italy, Portugal,
Spain, Ireland and Greece, Bloomberg relates. It evaluates the
average credit risk of companies in a given nation rather than
rating sovereign debt, Bloomberg notes.
* BOOK REVIEW: Instincts of the Herd in Peace and War
-----------------------------------------------------
Author: Wilfred Trotter
Publisher: Beard Books
Softcover: 264 pages
List Price: US$34.95
by Henry Berry
Instincts of the Herd in Peace and War examines how individuals
become involved in social groups and how this affects their
involvement in a nation, the ultimate social group. According to
Trotter, human beings are, by nature, "gregarious," and their
gregariousness is instinctive. Consequently, individuals are
compelled to attach themselves to a primary social group and
assume a role within it. Individuals may form attachments to
other groups and take different or modified roles within them, but
it is their attachment to, identification with, and role within a
primary group that lends them their personal identity, sense of
purpose, and sense of self-worth and fulfillment.
Although a nation is the ultimate group, it becomes the primary
social group only in the case of war. To Trotter, war and peace
are not mutually exclusive social states. They form a continuum
of historical social states that comprise the entirety of all
possible social states. There can be no utopias, nor can there be
eternal wars. The flow of events brings periods of peace and war.
The events in Europe preceding World War I -- the period during
which Trotter wrote the first edition of his book -- were a test
case for the author's observations and conclusions. The people of
England, France, Germany, and other European nations became
focused on defending their nations against external enemies.
Societies (i. e., nations) underwent upheaval as their people
turned from limited involvement with smaller social groups to
large-scale involvement in national defense.
Trotter's book is recognized as a classic in the field of
sociology, a relatively new science in the latter 1800s and early
1900s. Trotter and others sought to understand the group dynamics
of democratic societies, which were replacing the class structure
of aristocratic, hierarchal societies. Trotter also sought to
counter the misleading effects of psychology, especially the
influence of Freudian psychology, which saw individuals as
influenced mostly by inner, largely subconscious feelings and
experiences.
Trotter argues that psychology is not an independent field. Says
the author, "The two fields -- the social and the individual --
are absolutely continuous; all human psychology, it is contended,
must be the psychology of associated man, since man as a solitary
animal is unknown to us . . . ." Even a hermit is born in
society; and society has an interest in hermits for what they may
reflect about conditions of society.
This reprint is the second edition of Trotter's classic work. The
second edition includes the author's 45-page "Postscript of 1919,"
assaying the conditions of peace after World War I had ended.
"With the cessation of war this great stream of moral power [in
defending the nation] began rapidly to dry up at its source,"
observes Trotter. He proffers that the aim of statecraft is
keeping this "great stream of moral power" in times of peace. He
believes that the progressive evolution of society can be
accomplished by a "scientific statecraft [applying] the intellect
as an active factor in the direction of society."
While basically a work of sociology, Trotter's book can be a
picture of individual and group behavior for leaders in any
organization where motivation, unity, and progress are important.
This includes business leaders, especially leaders of larger
companies with multiple business sites and different employee
segments. Business leaders will immediately grasp the truth and
relevance of the author's view of society and glean from it
essential lessons and leadership principles, practices, and goals.
Wilfred Trotter (1872-1939) was an English surgeon as well as an
influential sociologist.
*********
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 2010. 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.
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