TCREUR_Public/100204.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

                           E U R O P E

          Thursday, February 4, 2010, Vol. 11, No. 024



KBC GROEP: To Sell Unprofitable Unit in Japan


SPRINGER SCIENCE+BUSINESS: S&P Raises Corp. Credit Rating to 'B'


COMPANY K: Creditors Meeting Set for February 15
EIRLES TWO: S&P Withdraws 'CCC-' Rating on US$30 Mil. Notes
EIRLES TWO: S&P Downgrades Rating on US$150 Mil. Notes to 'D'
GALVINS WHOLESALE: Diageo Seeks EUR3.2 Mln Summary Judgment Orders
HARTOPP INVESTMENTS: Appoints Kieran Wallace as Receiver

HOUSE OF EUROPE: S&P Junks Rating on Class B Notes From 'BB-'
M.T.N RYANS: Creditors Meeting Set for February 15
O'HERLIHY INVESTMENTS: Creditors Meeting Set for February 15
WESTILE LIMITED: Creditors Meeting Set for February 16


* ALMATY: Fitch Affirms 'BB+' Long-Term Currency Ratings


LYONDELL CHEMICAL: U.S. Plan Confirmation Hearing Set for April 15


ING CAPITAL: Moody's Keeps B1 Trust Preferred Securities Rating
INTERXION HOLDING: Moody's Assigns 'B1' Corporate Family Rating
INTERXION HOLDING: S&P Assigns 'B-' Corporate Credit Rating


* ROMANIA: Fitch Changes Outlook to Stable; Affirms 'BB+' Rating


AEROFLOT OAO: Russia Approves Merger with Six Small State Airlines
ALROSA CO: S&P Reinstates 'B+' Long-Term Corporate Credit Rating


SANTANDER EMPRESAS: Moody's Junks Ratings on Two Classes of Notes


GENERAL MOTORS: Spyker Confident on Saab Deal; Funding In Place

U N I T E D   K I N G D O M

BENGAL BRASSERIE: In Administration; Lismore & Co. On Board
BRITISH AIRWAYS: Union Renews High Court Action Over Work Changes
CABLE & WIRELESS: Moody's Raises Corporate Family Rating to 'Ba2'
CABLE & WIRELESS: S&P Retains CreditWatch Positive on 'BB-' Rating
DIAMONDS & PEARLS: Files Notice to Appoint Administrator

EMI GROUP: Terra Firma Founder Faces Dilemma if Citi Case Is Moved
LEEANNES LIMITED: Country Collection Buys Assets; 15 Jobs Secured
MADOFF SECURITIES: SFO Won't Take Action; Evidence Insufficient
MANCHESTER UNITED: First Bond Issue Performed Poorly
READER'S DIGEST: Delays Emergence on UK Pension Issue

SCARLET TELEVISION: David Hughes Appointed as Administrator
VANTIS PLC: Ernst & Young Casts Doubt Over SIB Liquidation

* UK: Firms Braced for Bumpy Ride Despite Drop in Profit Warnings
* UK: Financial Uncertainty Curbs Premiership Spending, KPMG Says


* Global Firms Still Nervous About Recovery, E&Y Says

* Upcoming Meetings, Conferences and Seminars



KBC GROEP: To Sell Unprofitable Unit in Japan
KBC Groep NV may sell its unprofitable brokerage unit in Japan,
Bloomberg News reports citing two people with knowledge of the

Bloomberg's sources said KBC is in advanced talks with several
potential buyers to sell KBC Securities Japan, which employs about
100 equity research and trading staff in Tokyo.

The unit has posted losses for the past three fiscal years in an
industry that cut staff in Japan by 6 percent in the 12 months
ended Dec. 31, Bloomberg relates citing research by Japan
Securities Dealers Association and data filed by KBC with
regulators in Tokyo.

Kiyomi Ando, a Tokyo-based spokeswoman for KBC, said possible
bidders for the KBC business could include the brokerage units of
large Japanese banks, or lenders from overseas that are expanding
equity research in Japan.

                     Restructuring Agreement

As reported by the Troubled Company Reporter-Europe on Nov. 20,
2009, The Financial Times said the KBC Groep reached an agreement
with the European Commission on its restructuring.  According to
the FT, KBC will slim its balance sheet by nearly a fifth and
reimburse EUR7 billion (US$10.5 billion) of state aid by 2013
through the winding down of its businesses and through asset
disposals.  The FT noted that while KBC will sell its merchant
banking and private banking arms, float part of its Czech banking
operation and forgo any acquisitions in the medium term, the group
will retain banking and insurance operations in its core markets.
The KBC restructuring will cut the bank's risk-weighted assets by
25% and entail no capital increase, the FT said.  The group will
pay back the EUR7 billion of state aid it received from the
Belgian and Flemish governments through retained earnings, and by
paying no dividend until 2011 at the earliest, the FT disclosed.

                       About KBC Groep NV

Headquartered in Brussels, Belgium, KBC Groep NV a.k.a KBC Group
NV (EBR:KBC) -- is engaged in banking,
insurance and wealth management for private banking clients,
retail customers and medium-sized enterprises.  It has expertise
in asset management and the financial markets.  The company's
activity is composed of five divisions: the Belgium, the Central &
Eastern Europe and Russia (CEER), the Merchant Banking, the
European Private Banking, and the Shared Services & Operations
business units.  Each of these units has its own management
committee and oversees both the banking and the insurance
activities.  The company is active in Belgium and in other
selected countries, including Hungary, Poland, Slovakia, Czech
Republic, Bulgaria, Romania, Serbia and Russia.  KBC Groep NV also
operates to a less extent in the United States and in Southeast
Asia.  The company has three subsidiaries: KBC Bank, KBC Insurance
and KBL European Private Bankers.


SPRINGER SCIENCE+BUSINESS: S&P Raises Corp. Credit Rating to 'B'
Standard & Poor's Ratings Services said that it raised to 'B' from
'CCC+' its long-term corporate credit rating on Springer
Science+Business Media S.A., the world's second-largest publisher
of science, technology, and medicine journals by title and the
largest publisher of STM books.  S&P removed the rating from
CreditWatch with positive implications, where it was placed on
Dec. 18, 2009.  The outlook is stable.

At the same time, S&P assigned a debt rating of 'B+' to the new
EUR1,145 million senior secured facilities and the EUR125 million
senior secured revolving credit facility borrowed by Springer and
various group entities.  This rating is one notch above the
corporate credit rating on Springer.  The recovery rating on these
instruments is '2,' reflecting Standard & Poor's expectation of
substantial (70%-90%) recovery in the event of a payment default.

In addition, S&P has assigned a debt rating of 'CCC+' to the new
EUR454.4 million mezzanine facilities borrowed by Springer
Science+Business Media Finance Sarl (not rated) and guaranteed by
Springer.  This rating is two notches below the corporate credit
rating on Springer.  The recovery rating on this instrument is
'6,' reflecting Standard & Poor's expectation of negligible (0%-
10%) recovery in the event of a payment default.

These rating actions follow the closure of the sale of Springer by
Cinven and Candover to funds managed by EQT and GIC.  Competition
authorities in the US and Europe have approved the transfer.
Springer has also confirmed that it has received an injection of
new equity of about EUR450 million and completion of the new
financing package.

"The rating actions reflect S&P's assessment of the positive
implications on Springer's liquidity profile of the completed
refinancing," said Standard & Poor's credit analyst Raam Ratnam.
"This alleviates the group's demanding debt maturity profile and
has, in S&P's view, resulted in adequate liquidity and headroom
under the group's financial maintenance covenants.  Furthermore,
S&P believes that Springer will be able to improve its free
operating cash flow in the near to medium term, which should
provide continued support to liquidity."

The corporate credit rating is constrained by Springer's financial
leverage, which S&P views as high.  In addition Springer faces the
challenges of growing its revenue base amid budgetary constraints
for libraries and other institutional customers.  These
constraints have led to pressure for lower prices and the sale of
more content on an add-on basis.

However, the rating should continue to benefit from the group's
well-established and sustainable market position in the fragmented
STM publishing market, complemented by its strong positions in
eBooks, open access, and other online products.  The group has a
track record of providing customers with high quality, value-
added, and integrated content for which there is no authoritative
substitute.  Furthermore, the group benefits from high revenue and
cash flow visibility as a result of its subscription-based
business model (subscriptions account for about 94% of journal
revenues and 30% of the professional publishing division's
revenues) with minimal working capital needs and high cash

"The stable outlook reflects S&P's view that Springer is likely to
generate improved free cash flow over 2010 and thereby improve its
liquidity position and net senior leverage credit measures," said
Mr. Ratnam.

S&P could consider a downgrade if the company's EBITDA generation
were to decline materially in the coming quarters or if the
company were to generate negative free cash flow.
A significantly better-than-expected business and financial
performance in the currently difficult environment could support a
positive rating action.  An upgrade would have to be supported,
however, by more visibility on the group's long-term shareholder
remuneration policy and capital structure.


COMPANY K: Creditors Meeting Set for February 15
A meeting of creditors of Company K Limited will take place at
9:00 a.m. on February 15, 2010, at:

         Sunset Ridge Hotel
         Co Cork

The registered address of the company is at:

         Limerick Road
         Co Cork

EIRLES TWO: S&P Withdraws 'CCC-' Rating on US$30 Mil. Notes
Standard & Poor's Ratings Services withdrew its 'CCC-' credit
rating on Eirles Two Ltd.'s US$30 million variable-rate portfolio
credit-linked series 308 notes.

The withdrawal follows the arranger's recent notification to us
that the notes were fully repurchased.

EIRLES TWO: S&P Downgrades Rating on US$150 Mil. Notes to 'D'
Standard & Poor's Ratings Services lowered its credit rating to
'D' from 'CCC-' on Eirles Two Ltd.'s US$150 million floating-rate
portfolio credit-linked series 300 notes.  S&P then withdrew the
rating on the notes.

The downgrade to 'D' follows confirmation that losses from credit
events in the underlying portfolio exceeded the available credit
enhancement.  This means that on the early termination date the
noteholders suffered a principal loss.  S&P subsequently withdrew
the rating assigned to these notes, having recently received
confirmation that the transaction redeemed early.

GALVINS WHOLESALE: Diageo Seeks EUR3.2 Mln Summary Judgment Orders
Mary Carolan at The Irish Times reports that Diageo Ireland is
seeking EUR3.2 million in summary judgment orders against John
Galvin on the back of a personal guarantee.

According to the report, judgment in the Commercial Court is
sought over guarantees given by Mr. Galvin in May 2009, as a
director of Galvins Wholesale Ltd., over debts of that company in
an effort to ensure Diageo continued to provide credit to it.

The report recalls Galvins Wholesale was under court protection
but that examinership failed and a liquidator was subsequently
appointed in November 2009.

Diageo claims that Mr. Galvin is liable under his guarantee for
EUR3.2 million debts of the company and demanded payment of that
amount last December, the report recounts.

The report relates Gary McCarthy, on behalf of Mr. Galvin, said it
would be argued that the Diageo claim did not include various
discounts and should be for about half the amount claimed.

Mr. Justice Kelly said he was satisfied counsel had outlined a
statable defense and adjourned the matter to March 4, the report

Galvins Wholesale Ltd. is a drinks importer and distributor in
Ireland.  The company employs 65 people.

HARTOPP INVESTMENTS: Appoints Kieran Wallace as Receiver
Kieran Wallace of KPMG was appointed receiver and manager of
Hartopp Investments Limited by Anglo Irish Bank Corporation
Limited on January 29, 2010.

The registered address of Hartopp Investments Limited is at:

         Unit 33 Web Works
         Eglinton Street

HOUSE OF EUROPE: S&P Junks Rating on Class B Notes From 'BB-'
Standard & Poor's Ratings Services lowered its credit ratings on
House of Europe Funding V PLC's class A1, A2, A3a, A3b, and B
notes.  At the same time, S&P affirmed the ratings on the class C,
D, E1 and E2 notes.

The rating actions follow S&P's assessment of the deterioration in
the credit quality of the underlying portfolio.  While the
transaction has not been exposed to a further increase in the
amount of assets rated 'CC' and 'D' since S&P's last review in
July, 2009, there has been an increase in the proportion of assets
in the pool rated 'CCC+' and lower.

According to the latest available trustee report of January 2010,
the transaction continues to fail its overcollateralization tests
and the issuer has continued to pay down the senior notes in an
attempt to bring the tests back into compliance.  While both
interest and principal proceeds were applied to reducing the
notional of the senior notes on the November payment date,
reported overcollateralization ratios have nevertheless
deteriorated.  This is mainly due to discounts applied to the
principal balance of assets rated 'BB+' and lower in the
calculation of the ratio.

S&P's analysis indicates that assets rated 'CCC+' and below now
account for about 14% of the portfolio (up from 7.8% in June
2009).  In addition, about 12% of the portfolio is currently on
CreditWatch negative.  On April 6, 2009, S&P published revised
assumptions governing structured finance assets with ratings on
CreditWatch held within collateralized debt obligation
transactions.  Under these revised assumptions, ratings on
CreditWatch are adjusted downward by at least three notches.

The deteriorating credit quality of the underlying portfolio
increased the scenario default rate to an extent where, in S&P's
view, the credit enhancement on classes A1, A2, A3a, A3b, and B is
no longer sufficient to maintain their previous ratings.

S&P has lowered the ratings assigned to classes A1, A2, A3a, A3b,
and B to levels which, in its view, reflect the current likelihood
of repayment to noteholders.

S&P has affirmed its 'CC' rating on classes C, D, E1, and E2, as
S&P still believe that ultimate repayment of these notes is
unlikely.  In accordance with the transaction documents, the
issuer deferred interest payments on these notes until
overcollateralization ratios are brought into compliance with the
trigger levels.  S&P's analysis indicates that interest payments
to these classes are unlikely to resume in the short term.
Furthermore, in S&P's view, the principal balance of the assets in
the underlying portfolio is insufficient to cover the principal of
these notes.

House Of Europe Funding V is a cash flow CDO of asset-backed
securities transaction that closed in October 2006.

                           Ratings List

                  House of Europe Funding V PLC
          EUR996 Million Fixed- And Floating-Rate Notes
                  And EUR4 Million Annuity Notes

                         Ratings Lowered

              Class           To                 From
              -----           --                 ----
              A1(1)           AA+                AAA
              A2              A+                 AA
              A3a             B+                 BBB
              A3b             B+                 BBB
              B               CCC+               BB-

(1) According to the terms and conditions of the notes, the class
    A1 delayed draw notes were consolidated with the class A1
    notes and the issuer treats them as identical to the class A1
    notes in all aspects.

                         Ratings Affirmed

                     Class           Rating
                     -----           ------
                     C               CC
                     D               CC
                     E1              CC
                     E2              CC

M.T.N RYANS: Creditors Meeting Set for February 15
A meeting of creditors of M.T.N Ryans (Crosspatrick) Limited will
take place at 11:15 a.m. on February 15, 2010, at:

         Harcourt Hotel
         Harcourt Street
         Dublin 2

The registered address of the company is at:

         Co Kilkenny

O'HERLIHY INVESTMENTS: Creditors Meeting Set for February 15
A meeting of creditors of O'Herlihy Investments Limited will take
place at 9:45 a.m. on February 15, 2010, at:

         Sunset Ridge Hotel
         Co Cork

The registered address of the company is at:

         Top Floor
         32 Parnell Place

WESTILE LIMITED: Creditors Meeting Set for February 16
A meeting of creditors of Westile Limited will take place at noon
on February 16, 2010, at:

         Days Hotel
         Co Mayo

The registered address of the company is at:

         Newport Road Industrial Estate
         Co Mayo


* ALMATY: Fitch Affirms 'BB+' Long-Term Currency Ratings
Fitch Ratings has affirmed the Kazakh City of Almaty's Long-term
foreign and local currency ratings at 'BB+' respectively.  The
Short-term foreign currency rating is affirmed at 'B' and the
National Long-term rating is affirmed at 'AA-(kaz)'.  The Outlooks
on the Long-term foreign and local currency ratings and National
Long-term rating are Stable.  Fitch has simultaneously withdrawn
the ratings.

The agency will no longer provide ratings or analytical coverage
of the City of Almaty.


LYONDELL CHEMICAL: U.S. Plan Confirmation Hearing Set for April 15
Judge Robert Gerber of the United States Bankruptcy Court for the
Southern District of New York will consider confirmation of
Lyondell Chemical Company and its debtor affiliates' Second
Amended Joint Plan of Reorganization on April 15, 2010.
Objections to the Amended Plan are due April 6, 2010.

A hearing to determine adequacy of the Disclosure Statement
accompanying the Amended Plan is currently set on February 8,
2010.  Objections to the Disclosure Statement were due
January 27, 2010.

The Court sets February 22 as the record date to determine
creditors that are entitled to vote on the Amended Plan.

To support their cause for the approval of their Disclosure
Statement, the Debtors, on January 26, amended exhibits to their
Motion to Approve Disclosure Statement.  The amended exhibits

* a proposed order approving the Disclosure Statement,

* a form of ballot for accepting or reject the Amended Plan,

* a notice of confirmation hearing and objection deadline to
  confirmation of the Amended Plan,

* a notice of commencement of rights offering in connection
  with the Amended Plan, and

* a subscription form for the rights offering in the Amended

A full-text copy of the Amended Exhibits dated January 26, 2010 is
available for free at:

A blacklined version of the Amended Exhibits comparing the
previously filed Plan Exhibits is available for free at:

According to Christopher R. Mirick, Esq., at Cadwalader,
Wickersham & Taft LLP, in New York, the Amended Plan contains an
injunction that prevents, among others, any holder of any claim or
equity interest in the Debtors' Chapter 11 cases accepting
distributions under the Plan, including all claims arising from
the DIP Term Loan Agreement; a December 20, 2007 Senior Secured
Credit Agreement; a Bridge Loan Agreement; and an August 10, 2005
indenture for 8.375% senior notes due 2015 in the principal
amounts of $615 million and EUR500 million, from directly or
indirectly commencing or continuing any action against the
Debtors, enforcing judgments related to these claims or interests,
asserting rights of setoff, recoupment or subrogation on and after
the effective date of the Amended Plan.  The Debtors will not have
any liability for any administrative expense, claim against or
equity interest in the Debtors that arose prior to the effective
date under the Plan, he said.

Mr. Mirick added that the Amended Plan contains releases and
injunctions in favor of:

  -- the Debtors;

  -- the Reorganized Debtors;

  -- the Ad Hoc Group of Senior Secured Lenders;

  -- current and former agents under the Senior Secured Credit
     Agreement and the Bridge Loan Agreement;

  -- the Senior Secured Lenders;

  -- UBS AG, Stamford Branch and Citibank N.A. as DIP Agents;

  -- the DIP Lenders;

  -- LeverageSource (Delaware) LLC, an affiliate of Apollo
     Management VII, L.P., AI LBI Investment LLC, and affiliate
     of Access Industries, and Ares Corporate Opportunities Fund
     III, L.P. as the Rights Offering Sponsors;

  -- the lenders under the Bridge Loan Agreement;

  -- the arrangers with respect to the Senior Secured Credit
     Agreement and the Bridge Loan Agreement;

  -- the Official Committee of Unsecured Creditors;

  -- the security agent under a December 20, 2007 Intercreditor

  -- the Disbursing Agent under the Amended Plan; and

  -- these parties' officers.

The releases and injunctions exclude any claim asserted in the
action commenced by the Creditors' Committee against the Debtors'
prepetition lenders and officers and not settled by the Lender
Litigation Settlement entered between the Debtors and Financing
Party Defendants, Mr. Mirick related.

                     About Lyondell Chemical

LyondellBasell Industries is one of the world's largest polymers,
petrochemicals and fuels companies.  It is the global leader in
polyolefins technology, production and marketing; a pioneer in
propylene oxide and derivatives; and a significant producer of
fuels and refined products, including biofuels.  Through research
and development, LyondellBasell develops innovative materials and
technologies that deliver exceptional customer value and products
that improve quality of life for people around the world.
Headquartered in The Netherlands, LyondellBasell -- is privately owned by Access

Basell AF and Lyondell Chemical Company merged operations in 2007
to form LyondellBasell Industries, the world's third largest
independent chemical company.  LyondellBasell became saddled with
debt as part of the US$12.7 billion merger.  On January 6, 2009,
LyondellBasell Industries' U.S. operations and one of its European
holding companies -- Basell Germany Holdings GmbH -- filed
voluntary petitions to reorganize under Chapter 11 of the U.S.
Bankruptcy Code to facilitate a restructuring of the company's
debts.  The case is In re Lyondell Chemical Company, et al.,
Bankr. S.D.N.Y. Lead Case No. 09-10023).  Seventy-nine Lyondell
entities, including Equistar Chemicals, LP, Lyondell Chemical
Company, Millennium Chemicals Inc., and Wyatt Industries, Inc.
filed for Chapter 11.  In May 2009, one of the cases was dismissed
-- Case No. 09-10068 -- because it is duplicative of Case No. 09-
10040 relating to Debtor Glidden Latin America Holdings.

The Hon. Robert E. Gerber presides over the case.  Deryck A.
Palmer, Esq., at Cadwalader, Wickersham & Taft LLP, in New York,
serves as the Debtors' bankruptcy counsel.  Evercore Partners
serves as financial advisors, and Alix Partners and its subsidiary
AP Services LLC, serves as restructuring advisors.  AlixPartners'
Kevin M. McShea acts as the Debtors' Chief Restructuring Officer.
Clifford Chance LLP serves as restructuring advisors to the
European entities.  Lyondell Chemical estimated that consolidated
assets total US$27.12 billion and debts total US$19.34 billion as
of the bankruptcy filing date.

Lyondell has obtained approximately US$8 billion in DIP financing
to fund continuing operations.  The DIP financing includes two
credit agreements: a US$6.5 billion term loan, which comprises a
US$3.25 billion in new loans and a US$3.25 billion roll-up of
existing loans; and a US$1.57 billion asset-backed lending

Luxembourg-based LyondellBasell Industries AF S.C.A. and another
affiliate were voluntarily added to Lyondell Chemical's
reorganization filing under Chapter 11 on April 24, 2009, in order
to seek protection against claims by certain financial and U.S.
trade creditors.  On May 8, 2009, LyondellBasell Industries added
13 non-operating entities to Lyondell Chemical Company's
reorganization filing under Chapter 11 of the U.S. Bankruptcy
Code.  All of the entities are U.S. companies and were added to
the original Chapter 11 filing for administrative purposes.  The
filings will have no impact on current business or operations as
none of the entities manufactures or sells products.

Bankruptcy Creditors' Service, Inc., publishes Lyondell Bankruptcy
News.  The newsletter tracks the Chapter 11 proceeding undertaken
by Lyondell Chemical Company and its various affiliates.
( 215/945-7000)


ING CAPITAL: Moody's Keeps B1 Trust Preferred Securities Rating
Moody's Investors Service confirmed ING Bank NV's C+ bank
financial strength rating, Aa3 senior long-term debt and deposit
ratings and A1 dated subordinated debt rating.  The BFSR carries a
negative outlook, while the long-term debt and deposit ratings
carry a stable outlook.  The bank's Prime-1 short-term debt and
deposit ratings were affirmed.  Moody's also confirmed, with a
stable outlook, the A1 senior rating and the A2 dated subordinated
debt rating of ING Groep NV.

The rating actions conclude Moody's review for possible downgrade
of the ratings of ING Bank and ING Group initiated on September
21, 2009 and maintained on 27 October after ING and the European
Commission reached agreement on a restructuring plan.

Moody's also confirmed the Ba1 ratings of ING Group's preference
stocks, ING Verzekeringen NV's subordinated debt securities and
Equitable of Iowa Companies Capital Trust II's preferred stocks.
The B1 rating of ING Capital Funding Trust III's trust preferred
securities was also confirmed.  These ratings now carry a positive
outlook and the rating actions conclude the review with direction
uncertain initiated on October 27, 2009.

       Confirmation of the Bank's C+ BFSR, Negative Outlook

ING Bank's C+ BFSR was confirmed as Moody's believes it adequately
represents the entity's creditworthiness, given the relief
provided by the asset protection scheme on the Alt-A portfolio,
the successful completion of a EUR7.5 billion rights issue in
December 2009 and, above all, the proposed restructuring plan,
which includes:

  -- the disposal of the bank's insurance activities by 2013;

  -- the merger of the bank with the group holding company, thus
     eliminating double leverage; and

  -- the fact that the plan implies only limited changes to the
     bank's overall scope and franchise, the largest change being
     the disposal of ING Direct in the US.

The C+ BFSR incorporates Moody's expectation that the bank's
profitability and efficiency will remain lacklustre in coming
years, albeit at levels above those of 2008-09.  However, it also
reflects the rating agency's view that the bank's capital
position, although moderate for its rating level, nonetheless
represents an adequate buffer for it to absorb potential losses
arising from the securities or loan portfolio.

Furthermore, Moody's notes that:

  -- the timing of the implementation of the restructuring plan is

  -- the group is still to decide between various options for the
     disposal of its insurance operations; and

  -- given the relatively long horizon of this plan, some changes
     are possible.

The negative outlook on the C+ BFSR captures Moody's view of the
potential uncertainties for the bank over the coming one- to two-
year period.

          Confirmation of the Bank's Senior Debt Ratings,
                          Stable Outlook

ING Bank's Aa3 long-term debt and deposit ratings were confirmed
as the Group, and particularly the Bank, is and will remain a
systemically important institution in two European markets, the
Netherlands and Belgium, and continues to have a significant
retail presence throughout Europe via ING Direct.

The ratings carry a stable outlook, as they would not come under
adverse pressure in the event of a one-notch downgrade of the

    Confirmation of ING Belgium's BFSR and Senior Debt Ratings

ING Belgium SA/NV's BFSR was confirmed at C+ with a stable outlook
reflecting the inherent stability of ING Belgium's profile.  The
Aa3 long-term debt and deposit ratings were also confirmed with a
stable outlook as a consequence of both the confirmation of its
parent's debt ratings and of the bank's systemic nature in

                Confirmation of ING Group's Senior
          and Dated Subordinated Ratings, Stable Outlook

The confirmation of ING Group's senior and subordinated ratings is
a direct consequence of the confirmation of ING Bank's
corresponding senior and subordinated ratings.  ING Group will
become a pure bank holding company of ING Bank, given the group's
announcement of its intention to divest its insurance operations
by 2013.  Therefore, ING Group's senior and subordinated ratings
reflect Moody's standard notching for bank holding companies
relative to ING Bank's ratings.  The stable outlook on ING Group's
ratings reflects the stable outlook on ING Bank's senior rating.

Moody's notes that double leverage at ING Group remains high and
was close to 140% at the end of 2008 (double leverage at the
holding company is calculated as the ratio between investments in
subsidiaries and adjusted shareholders' equity).  However, the
rating agency expects this to decrease considerably in the next
few years with the repayment of the group's debt from the proceeds
it secures from the disposal of its insurance operations.

Moody's adds that it views as beneficial (from a quality of
capital perspective) the EUR7.5 billion rights issue completed in
December 2009 to replace the EUR5 billion core Tier 1 securities
received from the Dutch state and to complete the additional
payments for the illiquid assets back-up facility.

         Confirmation of Hybrid Ratings, Positive Outlook

Moody's confirmation of the group's Ba1 and B1 hybrid securities
reflects the European Commission's decision not to force coupon
deferral on these securities as part of its approval of ING's
state-aid package.  The current ratings of the hybrid securities
reflect Moody's view that, given the restructuring of the group,
there is still some risk of coupon deferral on these securities.
The positive outlook reflects the possibility of these ratings to
go up when the execution risk deriving from the group's
restructuring process diminishes.

All of the hybrid securities contain a dividend pusher provision.
However, Moody's notes that the dividend pusher is not applicable
as no dividend has been paid since August 2008.

The Ba1 rating on the cumulative hybrid securities reflects the
fact that the coupon payments on these instruments are cumulative,
thereby limiting the loss severity of a coupon deferral if this
were to occur.

The B1 rating on the only non-cumulative trust preferred
securities issued by ING Capital Funding Trust III reflects the
fact that, under a going-concern assumption, the expected loss for
investors on this non-cumulative instrument is higher than on
cumulative securities.

                      List of Rating Actions

These ratings were confirmed with a negative outlook:

* ING Bank: C+ BFSR;
* ING Bank Eurasia: Baa1 LT Bank deposits;
* ING Bank Slaski SA: A2 LT Bank deposits.

These ratings were confirmed with a stable outlook:

* ING Bank: Aa3 senior debt and deposit ratings;

* ING Bank NV: A1 dated subordinated rating;

* ING Belgium SA/NV: C+ BFSR;

* ING Belgium SA/NV: Aa3 senior debt and deposit ratings;

* ING Groep NV: A1 senior debt rating;

* ING Groep NV: A2 dated subordinated rating; and

* Lion Connecticut Holding, Inc. (guaranteed by ING Groep NV): A1
  senior debt rating.

These ratings were confirmed with a positive outlook:

* ING Groep NV: Ba1 cumulative preference stocks;

* ING Verzekeringen NV: Ba1 cumulative dated subordinated debt
  securities with optional coupon deferral provision;

* Equitable of Iowa Companies Capital Trust II (guaranteed by Lion
  Connecticut Holding Inc.): Ba1 cumulative preferred stock with
  optional coupon deferral provision rating; and

* ING Capital Funding Trust III (guaranteed by ING Groep NV): B1
  non-cumulative trust preferred securities rating.

        Previous Rating Actions and Moody's Methodologies

The last rating actions took place on October 27, 2009 when
Moody's downgraded the insurance financial strength ratings of ING
Group's US life insurance operating companies to A2 from A1 and
ING Verzekeringen's senior debt to Baa1 from A2.  ING
Verzekeringen's short-term Prime-1 debt rating was also
downgraded, to Prime-2.  ING Bank's C+ BFSR and Aa3 senior debt
ratings and ING Group's A1 senior debt rating remained on review
for possible downgrade, as did the ratings of certain of ING
Bank's subsidiaries.  Moody's changed the review direction to
uncertain from possible downgrade on the Ba1 ratings of ING
Group's preference stocks, ING Verzekeringen's subordinated debt
securities and Equitable of Iowa Companies Capital Trust II's
preferred stocks.  The review direction on ING Capital Funding
Trust III's B1 trust preferred securities was also changed to
uncertain from possible downgrade.

The ratings of bank subordinated capital securities are assigned
in line with Moody's existing methodology entitled "Moody's
Guidelines for Rating Bank Hybrid Securities and Subordinated
Debt" (published in November 2009) and the publication of Moody's
revised rating methodology for insurance hybrids, issued on 12
January 2010.

Based in Amsterdam, ING Groep NV had total assets of
EUR1,188 billion at end-September 2009 and reported a net loss of
EUR223 million for the nine months ending September 2009.

Based in Amsterdam, ING Bank had total assets of EUR900 billion at
end-September 2009 and its Tier 1 ratio stood at 9.7%, on an
unfloored Basel II basis (applying the 80% floor, the Tier 1 ratio
would have stood at 8.9%).  In the first nine months of 2009, ING
Bank reported a net profit of EUR420 million.

The insurance activities of ING Groep had total assets amounting
to EUR298 billion at end-September 2009 and the insurance capital
coverage ratios for insurance activities was 256%.  In the first
nine months of 2009, the insurance activities of ING Groep
reported a net loss of EUR644 million.

INTERXION HOLDING: Moody's Assigns 'B1' Corporate Family Rating
Moody's Investors Service has assigned a B1 corporate family
rating and probability of default rating to Interxion Holding N.V.
Concurrently, Moody's assigned a (P) B2 rating to the senior
secured EUR200 million notes due 2017.  The outlook is stable.

"The B1 CFR assigned to Interxion reflects: (i) its leading
position as a provider of European co-location data centre
services and moderate barriers to entry for new entrants; (ii) the
favorable medium-term demand/supply dynamics expected at least
over the next three years; (iii) the stability of its
profitability and cash flows given the limited churn
characterizing the industry in general and the company in
particular," explained Stefano del Zompo, lead analyst for
Interxion at Moody's.

"Other factors that have impacted the rating assigned include: (i)
the limited size and scope of the company's operations; (ii) the
moderate risk of oversupply as existing players increase their
capacity to take advantage of the favorable demand trends and new
entrants could increasingly be attracted by the high margins in
the segment; (iii) the risks related to the returns on the
company's development plans," adds Mr. del Zompo.

Moody's expects Interxion's credit metrics to strengthen over the
intermediate term in line with improving general economic
conditions, leading to increased pricing and higher occupancy
rates.  Moody's in particular expects the company's Gross
Debt/EBITDA ratio for 2009 to remain below 4.0x on a fully
adjusted basis (adjusted in line with Moody's practice for
pensions, operating leases and exceptional items) and to remain
below that mark in the intermediate term.  The forecast increase
in revenues should benefit the company's EBITDA progression given
Interxion's high operating leverage.  Moody's expects EBITDA
margins to have increased from slightly above 35% in 2008 to close
to 37% in 2009 and this trend should continue to remain positive
in the medium term.

The (P) B2 rating assigned to the EUR200 million senior secured
notes, one notch below the company's CFR, reflects that the notes
rank senior to all unsecured liabilities of the company but also
their subordination to the EUR60 million super senior revolving
credit facility which is expected to remain undrawn at closing.
The notes will benefit from security over the share capital and
bank accounts of their guarantors, the intercompany loans extended
from the issuer to the guarantors and the issuer's bank accounts.
Guarantors of the notes shall represent 70% of the company's
consolidated assets at all times.

At closing, priority debt should be minimal, although there will
nonetheless be the possibility to incur secured debt as allowed
under the definition of permitted liens.  The bank facility
documentation also limits the general basket for secured debt to
EUR10 million, thus limiting the potential for subordination going
forward.  Additional indebtedness will be subject to a general
incurrence test of a minimum coverage ratio of 2:1 and maximum
senior debt (secured debt and debt at the non-guarantor level)
leverage of 4:1.  The bank facility contains maintenance financial

The rating outlook is stable, reflecting Moody's expectation that
-- despite high cash outflows to support the company's expansion
plan -- Interxion will maintain sound liquidity and metrics within
the target set for the current rating category.  Moody's also
believes that although current metrics are weak for the rating
category, the completion of the IPO as announced will strengthen
the company's profile within the rating category.

"Moody's believes that positive pressure on the ratings or outlook
could develop if demand and supply dynamics continue to support
pricing and high occupancy rates in the medium term, leading to
Debt/EBITDA ratio towards 3.5x and positive free cash flow
generation," said Mr. del Zompo.

Interxion is one of the leading providers of carrier-neutral
internet data centre services, operating 26 data centers in
Europe's main capitals including Paris, Frankfurt, London and
Amsterdam.  The company's turnover and EBITDA for 2009 are
expected to be approximately EUR171 million and EUR63 million,

INTERXION HOLDING: S&P Assigns 'B-' Corporate Credit Rating
Standard & Poor's Ratings Services said that it has assigned its
'B-' long-term corporate credit rating to the Netherlands-based
data center operator Interxion Holding N.V.  At the same time, the
rating was placed on CreditWatch with positive implications.

In a related action, S&P assigned its preliminary 'BB-' long-term
debt rating to Interxion's pending EUR200 million 2017 senior
secured notes and a preliminary 'BB' to the EUR60 million
revolving credit facility due in 2013.  S&P assigned recovery
ratings of '2' and '1', respectively, to the notes and revolver,
indicating of expectations of "substantial" and "very high"
recovery in the case of a payment default.

The recovery and debt ratings on the proposed bond and revolving
credit facility are subject to their successful placement, S&P's
raising of the corporate credit rating to 'B+' from 'B-', and its
satisfactory review of the final documentation.  In the event of
any changes to the amount or terms of the facility or bond, the
issue and recovery ratings could be subject to further review.

"The corporate credit rating is constrained by S&P's expectation
that significant capital investments will keep Interxion's free
cash flow generation negative for some time; the industry's
largely fixed-cost base; and long planning and sales cycles, which
S&P believes could significantly weaken earnings in the medium
term; Interxion's significant gross adjusted debt leverage; and
S&P's projections for moderate liquidity after early 2013," said
Standard & Poor's credit analyst Patrice Cochelin.

The ratings are supported, however, by Interxion's status as one
of the few carrier-neutral data center providers with a presence
in most European communication hubs; adequate barriers to entry in
the industry; currently favorable supply-demand dynamics -- driven
by constrained space offering, growth in Internet traffic and
communications volumes in general, and limited penetration, so
far, of outsourced data centers in Europe; significant revenue
recurrence; and attractive margins and cash flow generated by
facilities operating at optimal capacity.  On Sept. 30, 2009,
Interxion reported gross consolidated debt of about
EUR156 million.

"The positive CreditWatch placement reflects S&P's view that the
pending refinancing, if successful, would materially improve
Interxion's debt maturity profile and liquidity position, leading
us to raise the corporate credit rating to 'B+'," said Mr.

S&P expects to resolve the CreditWatch placement upon completion
of the pending bond issue or, if the issue is delayed or
cancelled, over the next three months.


* ROMANIA: Fitch Changes Outlook to Stable; Affirms 'BB+' Rating
Fitch Ratings has revised Romania's Outlook to Stable from
Negative.  Fitch has simultaneously affirmed Romania's Long-term
foreign and local currency Issuer Default Ratings at 'BB+' and
'BBB-' respectively.  Romania's Country Ceiling and Short-term
foreign currency IDR are affirmed at 'BBB' and 'B' respectively.

"The improvement in external financial and economic conditions,
sharper than expected narrowing of the 2009 current account
deficit, passing of immediate election-related risk, adoption of
the 2010 budget and expected normalization of relations with the
IMF have eased downward pressures on Romania's sovereign ratings,"
said David Heslam, Director in Fitch's Sovereign Group.

The passing of a contractionary 2010 budget and expected
resumption of Romania's IMF/EU funding program has significantly
reduced fiscal and external financing risks and the threat of
further macroeconomic instability.  Following the passing of
presidential elections in November 2009 and the formation of a
working coalition, the government has passed a 2010 budget
targeting a deficit of 5.9%, inline with commitments to the IMF
and EU.  The passage of the budget and recent statements from the
IMF and EU suggest that the next loan tranches from the
international support package, as well as those delayed since
November 2009, will be forthcoming shortly.  The tranches will
total EUR3.4 billion, of which EUR1 billion is from the EU.

Nonetheless, there are downside risks related to the
implementation of politically-challenging policies contained in
the 2010 budget, including the public sector wage freeze and the
laying-off of some 100,000 public-sector workers, particularly
given the government's narrow parliamentary majority and poor
fiscal track record in 2007-08.  Fitch also notes that fiscal
consolidation will need to continue beyond 2010 to sustain the
economy's external adjustment and lessen the upward trend in
public debt ratios.  Fitch forecasts Romania's general government
debt (including guarantees) at 33% of GDP at end-2010, compared
with 21.8% at end-2008.

Romania's economy experienced a sharp adjustment last year.  Fitch
estimates that real GDP fell by 6.9% in 2009, driven by falling
private domestic demand.  But encouragingly, this has lessened
Romania's demand for imports and supported a sharper-than-expected
adjustment of the country's current account deficit.  Fitch
estimates the 2009 CAD at 4.5% of GDP, down from about 12% in
2008, and forecasts the CAD to remain around 5% of GDP in 2010-11.
Rollover rates on Romania's maturing external debt stock have held
up well (about 85% on average), with foreign parent banks
affirming their commitments to maintain exposure to Romania.

The improved external economic and financial environment has aided
a stabilization of the RON, helping to contain the deterioration
of domestic balance sheets (over 50% of domestic lending is in
foreign exchange) and pressure in the banking system.  Official
foreign exchange reserves (FXR, including gold) ended 2009 some
US$4.7 billion higher than a year earlier at US$44.5 billion.
This was due to strong external debt rollover ratios, the receipt
of about US$12 billion from the US$30 billion IMF-led
international financial support package and US$1.4 billion from
the IMF's global allocation of Special Drawing Rights.  Fitch
forecasts Romania's 2010 gross external financing requirement
(GXRF = CAD plus maturing external debt) at 58% of end-2009 FXR,
down from around 100% of FXR in 2008.


AEROFLOT OAO: Russia Approves Merger with Six Small State Airlines
Catherine Belton at The Financial Times reports that Russian Prime
Minister Vladimir Putin on Tuesday approved a plan to merge six
small state aviation companies into Aeroflot in an attempt to
consolidate the country's troubled aviation sector.

According to the FT, analysts warned the deal would mean that
Aeroflot was saddled with debt-heavy assets.  The six airlines --
Rossia, KavMinVody, Vladivostokavia, Orenburg, Saratov and
Sakhalin airlines -- with which it is to merge are close to
bankruptcy after the financial crisis saw passenger traffic
nosedive, the FT notes.

"Industry consolidation in Russia is a good idea," the FT quoted
Georgy Tarakanov, analyst at VTB Capital, the state investment
bank, as saying.  "Aeroflot will likely get a huge number of
problems to solve as a result, but an increase in passenger
traffic might be worth it"

The FT says the deal will boost Aeroflot's domestic passenger
market from 15% to between 30 and 35%.

"This was not a decision taken by Aeroflot but by the government,"
Ivan Kim, transport analyst at Renaissance Capital, the Moscow
investment bank, said, according to the FT.  "They need to bail
out these companies and think the easiest way to do it is through

Mr. Kim, as cited by the FT, said of the six airlines, only Rossia
and Vladivostokavia are an attractive prospect.

Aeroflot -- rossiyskiye avialinii OAO (Aeroflot OAO or Aeroflot --
Russian Airlines JSC or Aeroflot JSC) --
-- is a Russia-based company involved in the provision of
passenger and cargo air transportation services, both domestically
and internationally, and in other aviation services from its base
at Moscow Sheremetyevo Airport.  The Company and its subsidiaries
also provide airline catering and insurance services.  Its
affiliates are mainly comprised of cargo-handling services,
fuelling services and duty-free retail businesses.  Aeroflot
operates a fleet of 97 vehicles to provide scheduled flights to
approximately 94 destinations to 47 countries around the world.
It has numerous branches located worldwide as well as 11
subsidiaries, of which nine are wholly owned, and seven affiliated
companies.  Aeroflot is 51.17%-owned by the Government of the
Russian Federation (as the Federal Agency for Federal Property

ALROSA CO: S&P Reinstates 'B+' Long-Term Corporate Credit Rating
Standard & Poor's Ratings Services said that it had reinstated its
long-term corporate credit rating on Russian diamond miner ALROSA
Co. Ltd. at 'B+' and the short-term rating at 'B'.  S&P suspended
the ratings on April 7, 2009.  The outlook is positive.  The
reinstatement follows S&P's receipt of sufficient financial and
operating data on Alrosa to surveil the company and assess

S&P also reinstated its 'B+' rating on Alrosa's $500 million
Eurobond and 'B' short-term rating on Alrosa's commercial paper
program.  The '4' recovery ratings on the Eurobond was also
reinstated.  The Eurobond and commercial paper program are issued
by ALROSA Finance S.A. and guaranteed by Alrosa.

"The 'B+' long-term rating is based on Alrosa's stand-alone credit
profile, which S&P assesses at 'CCC+', as well as on S&P's opinion
that there is a "high" likelihood that the government of the
Russian Federation (foreign currency BBB/Stable/A-3, local
currency BBB+/Stable/A-2; Russia national scale 'ruAAA') would
provide timely and sufficient extraordinary support to Alrosa in
the event of financial distress," said Standard & Poor's credit
analyst Andrey Nikolaev.

S&P's view of a "high" likelihood of extraordinary government
support is based on S&P's assessment of Alrosa's:

* "Important" role for the Russian economy, reflecting its
  monopoly position in diamond mining in Russia and its status as
  the largest employer and taxpayer in Yakutia (the Republic of
  Sakha {BB-/Negative/--;

* Russia national scale 'ruAA-'}), which, together with local
  governments, controls 40% of the company.

"Very strong" link with the Russian Federal government, its 50.02%
shareholder, which controls its strategy and operations.  S&P's
assessment of the link with the government is also based on senior
government officials' high degree of involvement--including that
of Russian Deputy Prime Minister and Finance Minister Alexei
Kudrin as the company's chairman in Alrosa's strategic decision-

S&P's assessment of the likelihood of timely and sufficient
extraordinary government support is further underpinned by support
provided in 2008-2009 through substantial loans from state-owned
JSC VTB Bank (BBB/Negative/A-3; Russia national scale 'ruAAA') and
Alrosa being able to sell its diamonds to the State Diamond And
Precious Metals Reserve.

S&P's view of a 'CCC+' stand-alone credit profile is based on its
assessment of Alrosa's business risk profile as "weak" and its
financial risk profile as "highly leveraged".

Alrosa's business risk profile is constrained by the commodity-
type nature and capital-intensiveness of the diamond-mining
industry.  Business risk is further constrained by the harsh
operating conditions in Yakutia.

Alrosa's business risk profile is supported by the diamond-mining
industry's concentrated structure, where the two largest players
control about 70% of the world market.  Alrosa's key competitive
advantage is a substantial and high-quality reserve base.  The
company enjoys a 25% global market share and a near monopoly in

Alrosa's financial risk profile is pressured by "very weak"
liquidity in S&P's view and a highly leveraged capital structure.

Alrosa was able to substantially decrease debt in the second half
of 2009, and S&P anticipate that the company should be able to
generate neutral or positive free operating cash flow in 2010-

"The positive outlook reflects the possibility of an upgrade in
the next six to 12 months, if Alrosa is able to meaningfully
improve its liquidity through long-term debt issuance and if
diamond-market conditions remain stable," said Mr. Nikolaev.

For the rating upside to materialize, S&P would expect the company
to generate at least neutral free operating cash flow in 2010 and
gradually deleverage.

Should the company be unable to access the capital markets as
planned, or if its cash flows decline materially in 2010, S&P
might lower the ratings.

Ratings downside could also appear, if the currently "very strong"
link with the government weakens.


SANTANDER EMPRESAS: Moody's Junks Ratings on Two Classes of Notes
Moody's Investors Service downgraded the ratings of the Series A,
B, C, D and E notes issued by Santander Empresas 4, FTA, to A1,
Ba1, B3, Ca and C, from Aaa, Aa3, A3, Baa3 and Ba2, respectively.
A detailed list of the rating actions can be found at the end of
this press release.  These rating downgrades conclude the review
for possible downgrade that Moody's initiated on March 18, 2009.

The downgrades were prompted by the weaker-than-expected
collateral performance of the pool of loans backing the notes.
The rating review also incorporated Moody's refinement of its ABS
SME approach, as described in the Rating Methodology report
"Moody's Probability of Default assumptions in the Rating Analysis
of Granular Small and Mid-sized Enterprise Portfolios in EMEA",
published on March 17, 2009.

As part of its review, Moody's has considered the potential for
further performance deterioration in the current economic cycle,
and the exposure of the transaction to the real estate sector
(either through security in the form of a mortgage or debtors
operating in these markets).  The deterioration of the Spanish
economy has been reflected in Moody's negative sector outlook for
Spanish SME securitization transactions

                      Collateral Performance

Outstanding 90+ delinquencies (i.e. the balance of loans with
arrears for more than 90 days) reached 2.64% of the portfolio
current balance, as of the January 2010 investor report.  While
this is down from the peak of 3.35% reported in April 2009,
Moody's notes that the cumulative balance of defaulted loans has
now increased to 1.35% (January 2010 report).  (In this
transaction, a loan is in default if it has been in arrears for 12
months or over).  In addition, the reserve fund has been reported
drawn since January 2009 and, although slightly increased from the
previous period, it was at only 23% of its target balance in
January 2010.

As a result of the transaction performance, the balance of loans
in arrears (2.64% in the January 2010 report) has exceeded the
1.50% threshold for several periods, prompting the pro-rata
amortization of the Series A1, A2 and A3 notes.  Moody's now
assumes these will continue to amortize pro-rata until the end of
the transaction.

                 Default Probability Adjustments

Moody's first revised its assumption for the default probability
of the SME debtors to an equivalent rating in the single B-range
for debtors operating in the real estate sector (approximately 43%
of the outstanding December 2009 pool balance based on loan-level
data), and in the low Ba-range for non-real-estate debtors.

In addition, Moody's made DP adjustments to reflect the size of
the debtors' companies.  For the very few instances when loan-
level data on large companies was available, Moody's was able to
determine a rating proxy in the Baa-range (approximately 4% of the
pool).  Otherwise, Moody's notched down its rating proxy on a
fraction of the debtors to reflect additional default risk
associated with micro-size SMEs.

In addition, Moody's increased by 10% its DP assumptions for
debtors that have not made any principal payment since the
transaction closing, based on December 2009 loan level data.
While Moody's has been unable to confirm whether the loans with
non-amortizing balance had bullet maturities or were still in
their grace periods, the rating agency believes there is a payment
shock risk associated with the end of non-amortizing periods.

Finally, Moody's equivalent rating for loans in arrears for more
than 30 days was notched down depending on the length of time the
loans had been in arrears, and it was notched up for performing
loans not in the building and real estate sector originated prior
to 2006, depending on their actual seasoning.

                  Revised WAL and DP assumptions

Moody's separately revised its weighted-average remaining life
assumption for the pool of loans to four years.

With a four-year average life, the single-B range overall DP
equivalent rating resulting from the above DP adjustments
translate into an increased cumulative mean default assumption of
17.5% of the current outstanding portfolio amount.  Expressed as a
percentage of the original portfolio balance, Moody's revised
cumulative mean default rate is 10.0%, compared to an initial
assumption of 2.8% at closing.

Given the remaining granularity of the outstanding portfolio of
more than 10,000 loans, Moody's used a normal inverse distribution
to derive the probabilities of its default scenarios in its cash
flow model, ABSROM.  In light of the increase in its cumulative
mean default assumption, Moody's has reduced its original
coefficient of variation assumption to 36% from 60% to maintain
its initial implied asset correlation for the portfolio.

              Recovery and Other Rating Assumptions

Moody's has not revised its initial mean recovery expectation of
45%, given the lack of recovery data available, the limited
proportion of loans backed by mortgage securities (43%), and the
absence of detailed data on the type of properties servicing as
collateral for these mortgage securities.  However, Moody's tested
the sensitivity of results to recovery assumptions in a 40%-50%
range.  Stochastic recoveries were modeled assuming a 20% standard

The constant prepayment rate assumption used in Moody's cash flow
model has decreased to 5% from 15% at closing.  While this rate is
lower than the most recently reported prepayment rate data,
Moody's believes it is consistent with its revised default rate
expectation for the remainder of the transaction.

                          The Transaction

Santander 4 is a securitization fund which purchased a pool of
loans granted by Banco Santander, S.A.  to Spanish SMEs.  At
closing, the portfolio consisted of 17,286 credit rights (10,861
as of January 2010).  The loans were originated between 1996 and
June 2007, with a weighted-average seasoning of 0.9 years and a
weighted-average remaining term of eight years.  Geographically
the pool was well diversified with the highest concentrations in
Madrid (21%), Catalonia (15%) and Andalusia (15%) at closing.
According to Moody's industry classification, the concentration in
the "building and real estate" sector was approximately 47% at
closing (43% as of December 2009).  The pool factor is 49% based
on the January 2010 report data.

                Meaning of Rating and Methodologies

Moody's ratings address the expected loss posed to investors by
the legal final maturity of the notes.  Moody's ratings address
only the credit risks associated with the transaction.  Other
risks have not been addressed, but may have a significant effect
on yield to investors.

                     Detailed Rating Actions

  -- EUR830.2 million Series A1: Downgraded to A1; previously on
     18 March 2009 Aaa Placed Under Review for Possible Downgrade

  -- EUR1763.6 million Series A2: Downgraded to A1; previously on
     18 March 2009 Aaa Placed Under Review for Possible Downgrade

  -- EUR622.3 million Series A3: Downgraded to A1; previously on
     18 March 2009 Aaa Placed Under Review for Possible Downgrade

  -- EUR90.2 million Series B: Downgraded to Ba1; previously on 18
     March 2009 Aa3 Placed Under Review for Possible Downgrade

  -- EUR97.4 million Series C: Downgraded to B3; previously on 18
     March 2009 A3 Placed Under Review for Possible Downgrade

  -- EUR79.7 million Series D: Downgraded to Ca; previously on 18
     March 2009 Baa3 Placed Under Review for Possible Downgrade

  -- EUR56.6 million Series E: Downgraded to C; previously on 18
     March 2009 Ba2 Placed Under Review for Possible Downgrade


GENERAL MOTORS: Spyker Confident on Saab Deal; Funding In Place
Andrew Ward at The Financial Times reports that Victor Muller,
chief executive of Spyker Cars, is confident that its US$400
million deal to acquire General Motors' Saab Automobile would be
completed on schedule in the next few weeks.

As reported by the Troubled Company Reporter-Europe, GM and Spyker
last week agreed to a deal wherein Spyker will acquire Saab for
US$74 million in cash and US$326 million of shares.  The Swedish
brand has been unprofitable and GM had planned to close its
operations after trying to search for a buyer.

According to the FT, Spyker said it would need US$1 billion to
return Saab to profitability by 2012 and insisted the funding was
already in place, subject to approval of a EUR400 million (US$559
million) loan from the European Investment Bank.

The FT says an initial US$50 million tranche of cash to be paid
upon completion of the deal has already been secured, through
loans from Tenaci Capital, owned by Mr. Muller, and GEM Global
Yield Fund, a New York investment company.

The FT notes a further US$24 million payment due to GM in July has
yet to be secured but Mr. Muller said numerous potential
investors, including institutions and individuals, had approached
Spyker about providing the finance.

Mr. Muller was hopeful that approval for the crucial EIB loan,
which the Swedish government has already agreed to guarantee,
would come in the next two or three weeks, with closure of the
deal soon after, the FT states.

                       About General Motors

General Motors Company -- 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

At September 30, 2009, GM had USUS$107.45 billion in total assets
against USUS$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.
( 215/945-7000)

U N I T E D   K I N G D O M

BENGAL BRASSERIE: In Administration; Lismore & Co. On Board
Margaret Canning at Belfast Telegraph reports that Bengal
Brasserie II, an Indian restaurant business in south Belfast, has
gone into administration three months after it began trading.

The report relates administrators Lismore & Co. were appointed by
the High Court on January 26 to take over the running of Bengal
Brasserie II on the Lisburn Road.

According to the report, there are at least three contractors who
have had problems securing payment for work carried out for Bengal
Brasserie II.

BRITISH AIRWAYS: Union Renews High Court Action Over Work Changes
BBC News reports that Unite has renewed High Court action against
British Airways to try to overturn changes to cabin crew brought
in by the airline last year.

According to the report, the union claims it was not consulted
properly and the changes, including freezing pay and reducing the
number of cabin crew on long-haul flights, were imposed.  The
union said those measures were brought in November and argues it
should have been consulted, because the changes are contractual,
the report notes.

BA, the report says, disputes the claim and has said it was not
obliged to consult as "the changes do not alter contractual terms
and conditions for individual crew members".

The report relates opening the High Court hearing, John Hendy QC
said that the 10 test cases being brought were representative of
about 5,400 claimants who were among the 13,400 cabin crew
employed by BA, mostly at Heathrow.

The hearing is scheduled to last all week, the report states.

As reported by the Troubled Company Reporter-Europe, Bloomberg
News said a strike ballot, organized by Unite, runs until February
25 and a walkout can begin one week after a "yes" vote.  Bloomberg
disclosed Unite is seeking a strike mandate over BA's introduction
of new working practices in November that cut at least one flight
attendant on long-haul flights from London Heathrow airport.
Bloomberg said the airline needs to cut costs after posting a
record GBP217-million loss in the six months to September 30.

                      About British Airways

Headquartered in Harmondsworth, England, British Airways Plc,
along with its subsidiaries, (LON:BAY) -- 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,

                           *     *     *

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

CABLE & WIRELESS: Moody's Raises Corporate Family Rating to 'Ba2'
Moody's Investors Service upgraded the corporate family and
probability of default ratings of Cable & Wireless plc to Ba2 from
Ba3 with stable outlook, and assigned a provisional senior secured
long-term rating of (P)Ba2 to notes being issued by its wholly-
owned subsidiary Sable International Finance Ltd.  At the same
time Moody's affirmed the long-term B1 rating of the existing
notes issued by Cable & Wireless plc.

The upgrade reflects Moody's expectations that upon completion of
the de-merger Cable & Wireless plc will have spun off the
Worldwide divison and will continue to own the CWI division
(formerly known as "International").  C&W itself will become a
subsidiary of a new top holding company, to be called Cable &
Wireless Communications plc.  In upgrading the CFR, Moody's
expects that CWC will be duly incorporated, listed on the London
stock exchange and its corporate structure will be as described in
the Scheme of Arrangement contained in the shareholders'
prospectus.  Once CWC has been formally established, Moody's will
re-assign the corporate family rating to it from C&W.

The Ba2 CFR is supported by the sound operating rationale of the
de-merger; the two existing divisions have limited synergies and
the transaction will simplify the organizational structure and is
likely to improve decision-making processes.  Of the two
businesses, CWI has a stronger business profile with leading
market positions in its various markets and a more diversified
business model and lower albeit increasing competitive pressures.
Overall, Moody's believes the de-merger will improve the business
risk profile of the rated entity.

More generally, the CFR factors in CWI's solid operating
performance; product and geographic diversification; conservative,
albeit increasing leverage; strong liquidity profile and track
record of steady cash upstream from the operating entities.  The
rating will be constrained by an aggressive dividend policy that
significantly reduces the free cash flow available to service
debt; however while management's strategy is to pay a meaningful
dividend, Moody's understand it intends to keep the business free
cash flow neutral.

Factors which also constrain the rating are the operational
challenges in its core Caribbean unit, which are offset to some
degree by its recent reorganization and cost cutting exercise;
overall intensifying competition within the company's markets; the
uncertainty related to the company's future investment strategy as
well as the presence of emerging market risk in some countries of

A summary of the rating actions is:

Ratings upgraded:

Cable & Wireless Plc:

-- CFR to Ba2 (from Ba3)

Ratings affirmed:

Cable & Wireless Plc:

  -- GBP200 million 8.75 % Eurobonds due 2012 at B1; LGD 5

Cable & Wireless International Finance B.V.:

  -- GBP200 million 8.625% gteed Eurobonds due 2019 at B1; LGD 5

Ratings assigned:

Sable International Finance Ltd.

  -- US$500 million gteed senior secured notes due 2017 at (P)
     Ba2; LGD 3

The last rating action for Cable & Wireless plc was August 28,
2007 when the outlook for the Ba3 CFR was changed to stable from

C&W is headquartered in London.  After the de-merger, it will own
and operate the CWI business, which is comprised of market-leading
regional telecoms businesses and operates through four regional
business units: the Caribbean, Panama, Macau and Monaco, and the
Islands.  CWI offers mobile, broadband, domestic and international
fixed line services as well as enterprise and managed service
telecom solutions.  In the six months ended September 30, 2010,
CWI alone generated revenues of GBP 721 million and reported
EBITDA before exceptional items of GBP271 million.

CABLE & WIRELESS: S&P Retains CreditWatch Positive on 'BB-' Rating
Standard & Poor's Ratings Services said that its 'BB-' long-term
corporate credit rating on U.K.-based telecoms service provider
Cable & Wireless PLC remains on CreditWatch, where it was placed
with positive implications on Nov. 17, 2009.  The 'B' short-term
corporate credit rating has been affirmed.

In addition, S&P assigned a rating of 'BB-' to the proposed
US$500 million bond to be issued by C&W's subsidiary Sable
International Finance Ltd. This rating was also placed on
CreditWatch with positive implications.  The rating on the
proposed bond is subject to S&P's satisfactory review of the final
documentation.  In the event of any changes to the amount or terms
of the bond, the issue rating could be subject to further review.

At the same time, S&P maintained the existing 'BB-' senior
unsecured issue ratings on CreditWatch, where they were placed
with negative implications on Nov. 17, 2009.  The recovery rating
on these instruments is unchanged at '3', indicating S&P's
expectation of meaningful (50%-70%) recovery in the event of a
payment default.

C&W intends to demerge its two main business lines, essentially
resulting in the spin-off of its "Worldwide" activities from its
international fixed-line and mobile operations, known as Cable &
Wireless Communications PLC.  C&W Communications will be the
surviving entity that S&P will rate and will be the obligor of
existing senior unsecured bonds.

"The CreditWatch placement on the long-term corporate credit
rating reflects S&P's view that on completion of the demerger, C&W
Communications is likely to benefit from a stronger business risk
profile than C&W, probably leading to a corporate credit rating of
'BB'," said Standard & Poor's credit analyst Helen O'Toole.

This view is based on the capital structure that S&P expects to be
implemented at C&W Communications on the demerger.  S&P estimates
that C&W Communications' gross pension and lease-adjusted debt
will be approximately $2.1 billion, yielding a debt to EBITDA of
3.0x-3.3x, on a proportionate basis, during the 18 months
following the demerger.

The spin-off of the Worldwide operations should allow us to raise
the business risk profile on C&W Communications to "fair" from
"weak," under S&P's criteria.  C&W Communications' business
profile should benefit from established market positions in either
fixed line or mobile services (or both) in a variety of relatively
small markets across the world.  In addition, it should generate
steady, high operating margins, approaching 40% on a consolidated
basis, despite the current underperformance in the Caribbean.
These aspects will be mitigated, however, by country risks,
including the risks associated with co-ownership with governments
or conglomerates, such as in Panama or Macau, and the materially
less than 100% ownership of the group's largest and most cash-
generative assets, which include Panama and Macau.

The CreditWatch placement with negative implications of the
GBP200 million 2012 and 2019 bonds reflects S&P's anticipation of
greater subordination in light of the company's refinancing plans,
as well as a reduced asset base after the spin-off.  The recently
issued GBP230 million convertible bonds will be exclusively
financial obligations of the newly created Worldwide entity from
the demerger and will therefore not be rated by Standard & Poor's.
S&P expects that the credit quality of Worldwide will be lower
than that of the existing ratings on C&W.

"S&P will likely resolve the CreditWatch status as the demerger
becomes effective, which the company expects by end-March 2010,"
said Ms. O'Toole.  "In the meantime, S&P will continue to assess
the credit implications of the potential demerger and refinancing
plans for the business and financial profiles of the surviving
rated entity."

DIAMONDS & PEARLS: Files Notice to Appoint Administrator
Nicola Harrison at Retail Week reports that Diamonds & Pearls has
filed a notice of intention to appoint an administrator at the
high court.

According to the report, sources close to the situation said the
business is likely to be bought out of pre-pack administration and
that a sale is expected to be completed in the next few days.

Colin Nicholls and Chris Ratten from accountancy firm RSM Tenon
are waiting in the wings to be appointed, the report says.

It would be the second time in a year that the retailer has gone
into administration, the report notes.

The report recalls the company was bought out of administration in
March last year by a consortium of undisclosed suppliers to the
retail jewelry trade.

EMI GROUP: Terra Firma Founder Faces Dilemma if Citi Case Is Moved
Martin Arnold at The Financial Times reports that Terra Firma
founder Guy Hands may face a dilemma over his tax planning if
Citigroup succeeds in moving its legal dispute with his private
equity group from New York to London.

The FT recalls Mr. Hands launched a legal fight with Citi late
last year over EMI, alleging the US bank tricked him into buying
the music group for GBP4 billion in 2007 by wrongly claiming a
rival bidder was still in the running.  Mr. Hands chose New York
as the forum for the lawsuit, but Citi last month challenged this
and asked the U.S. judge to send the case to London, the FT

According to the FT, if the case is reassigned to London, it could
leave Mr. Hands facing a tough choice: to appear as a key witness
in support of Terra Firma's claims, or to protect his non-resident
tax status by staying out of the country.

The FT says Terra Firma has until today, Feb. 4, to submit its
case for why its EMI lawsuit against Citi should stay in a New
York court, which has set a provisional trial date of Oct. 18.

As reported by the Troubled Company Reporter-Europe on Jan. 26,
2010, the FT said the location of the lawsuit is important as
it could determine how much Terra Firma may be awarded from
Citigroup in damages, its ability to obtain information from the
US bank, and whether the lender can recoup its costs if it wins.
The FT disclosed Citigroup told the Federal district court of New
York the case should be moved to London because agreements
governing the auction of EMI and Citigroup's financing of its
acquisition by Terra Firma specified that any dispute should be
settled in London and that almost all the major events, companies
and people referred to in the lawsuit were based in London, so
holding the case in New York would be inappropriate on the grounds
of "forum non conveniens".

Citing The New York Post, the Troubled Company Reporter-Europe
reported on Sept. 30, 2009, that Citigroup, which is seeking to
reduce the size of its balance sheet, may force EMI into

As reported by the Troubled Company Reporter-Europe on Aug. 18,
2009, The Wall Street Journal said EMI Music isn't generating
enough profit to comply with a GBP950 million loan from Citigroup.
According to the WSJ, people familiar with the situation said EMI
Music will need cash injections over the next eight months to
avoid defaulting on the loan -- and it is unclear how much more
cash Mr. Hands is willing to invest.  The WSJ said if Mr. Hands,
who has injected about GBP80 million into EMI Music through its
parent company, Maltby Capital Ltd., doesn't come up with the
money, Citigroup could seek to take control of the business and
sell it.  The WSJ disclosed the Citigroup loan requires increases
in EMI Music's earnings before interest, tax, depreciation, and
amortization relative to the size of its debt, the Journal
disclosed.  According to the WSJ, since September, EMI Music has
been subjected to three "covenant tests" to see if it meets the
ratio -- and failed each one.

EMI -- is the fourth largest record
company in terms of market share (behind Universal Music Group,
Sony Music Entertainment, and Warner Music Group).  It houses
recorded music segment EMI Music and EMI Music Publishing.  EMI
Music distributes CDs, videos, and other formats primarily through
imprints and divisions such as Capitol Records and Virgin, and
sports a roster of artists such as The Beastie Boys, Norah Jones,
and Lenny Kravitz.  EMI Music Publishing, the world's largest
music publisher, handles the rights to more than a million songs.
EMI Music operates through regional divisions (EMI Music North
America, International, and UK & Ireland).  Private equity firm
Terra Firma owns EMI.

LEEANNES LIMITED: Country Collection Buys Assets; 15 Jobs Secured
Country Collection has acquired Leeannes Limited's plant and
machinery, securing 15 jobs, bdaily reports.

The report recalls Tyneside-based Leeannes hit problems as it
struggled to maintain adequate profit margins.  The company ceased
trading on December 17, 2009, and all of the staff was
subsequently made redundant, the report recounts.

Country Collection, Leeannes' sole customer, has also bought the
other remaining assets of the company.  The deal was negotiated by
business rescue specialist Begbies Traynor.

Leeannes Limited manufactured ladies clothing for a catalogue

MADOFF SECURITIES: SFO Won't Take Action; Evidence Insufficient
The U.K. Serious Fraud Office has completed its investigation into
Madoff Securities International Ltd., the U.K. arm of Bernard
Madoff's investment scheme, and the actions of the company's
directors.  Following a thorough review of all the available
evidence it has decided to take no action against either the
company or its directors there being insufficient evidence to
provide a realistic prospect of conviction.

Lindsay Fortado at Bloomberg News reports Omar Qureshi, who
handles fraud cases as a partner at CMS Cameron-McKenna in London,
said, "It seems they have taken the view that the time and cost
involved in pursuing the case was not justified against the
prospects of success".

According to Bloomberg, Nicola Finnerty, Esq., the lawyer of
Stephen Raven, the former chief executive officer of Madoff
Securities International, on Tuesday said Mr. Raven "is pleased
with the outcome of the SFO investigation and that he and his
directors have been fully exonerated".

Bloomberg recounts U.S. prosecutors have said in court Mr. Madoff,
71, pleaded guilty in March 2009 to using money from new investors
to pay off old ones in a Ponzi scheme, sparking investigations and
dozens of lawsuits in the U.S. and Europe.  Investors lost more
than US$13 billion in Mr. Madoff's fraud, Bloomberg says.

Bloomberg recalls Irving Picard, who was appointed by the
Securities Investor Protection Corp. to unwind Mr. Madoff's
businesses, said last year in a London court filing Madoff
Securities International in London was owned almost exclusively by
Mr. Madoff and served as his proprietary trading unit.

Mr. Madoff is accused by U.S. prosecutors of sending more than
US$250 million between 2002 and 2008 to the U.K. unit in London's
Mayfair district from New York-based Bernard L. Madoff Investment
Securities LLC, and then back to U.S. accounts, Bloomberg

The SFO continues to provide assistance to international partners
in law enforcement on aspects of the continuing worldwide
investigation and is continuing its own inquiries into wider
aspects of the fraud which may give rise to offending in the UK.

                About BLMIS and Madoff Securities

London-based Madoff Securities International Limited is a money
management business of Bernard L. Madoff in the United Kingdom.

Bernard L. Madoff Investment Securities LLC and Bernard L.
Madoff orchestrated the largest Ponzi scheme in history, with
losses topping US$50 billion.

On December 15, 2008, the Honorable Louis A. Stanton of the
U.S. District Court for the Southern District of New York granted
the application of the Securities Investor Protection Corporation
for a decree adjudicating that the customers of BLMIS are in need
of the protection afforded by the Securities Investor Protection
Act of 1970.  The District Court's Protective Order (i) appointed
Irving H. Picard, Esq., as trustee for the liquidation of BLMIS,
(ii) appointed Baker & Hostetler LLP as his counsel, and (iii)
removed the SIPA Liquidation proceeding to the Bankruptcy Court
(Bankr. S.D.N.Y. Adv. Pro. No. 08-01789) (Lifland, J.).

On April 13, 2009, former BLMIS clients filed an involuntary
Chapter 7 bankruptcy petition against Bernard Madoff (Bankr.
S.D.N.Y. 09-11893).  The case is before Hon. Burton Lifland.  The
petitioning creditors -- Blumenthal & Associates Florida General
Partnership, Martin Rappaport Charitable Remainder Unitrust,
Martin Rappaport, Marc Cherno, and Steven Morganstern -- assert
$64 million in claims against Mr. Madoff based on the balances
contained in the last statements they got from BLMIS.

On April 14, 2009, Grant Thornton UK LLP as receiver placed Madoff
Securities International Limited in London under bankruptcy
protection pursuant to Chapter 15 of the U.S. Bankruptcy Code
(Bankr. S.D. Fla. 09-16751).  Roughly US$100 million to US$500
million in assets and more than US$1 billion in debts were listed
for Madoff Securities.

The Chapter 15 case was later transferred to Manhattan.  In June
2009, Judge Lifland approved the consolidation of the Madoff SIPA
proceedings and the bankruptcy case.

Judge Denny Chin of the U.S. District Court for the Southern
District of New York on June 29, 2009, sentenced Mr. Madoff to
150 years of life imprisonment for defrauding investors in
United States v. Madoff, No. 09-CR-213 (S.D.N.Y.).

MANCHESTER UNITED: First Bond Issue Performed Poorly
Anousha Sakoui and Roger Blitz at The Financial Times report that
Manchester United's first bond issue, launched barely two weeks
ago, has become one of the market's worst performers this year.

According to the FT, while the club has secured the GBP500 million
(US$798 million) funding that it needs to refinance its bank debt,
the paper losses suffered by investors could affect its ability to
return to bond markets.

The bid price of Manchester United's GBP250 million of sterling
denominated bonds has tumbled to just 93% of their face value,
while the bid price of its US$425 million of dollar-denominated
bonds has fallen to 94.5% of face value, the FT discloses.

The FT relates bankers and analysts said on Tuesday that the bonds
had performed poorly because they had been priced too highly at
launch.  They also blamed the lack of a credit rating, the FT

The FT notes one person with knowledge of the company's financing
said that, while it could issue more debt by increasing the size
of the outstanding bond, the club was not expected to return to
the market soon.

Manchester United is likely to wait until it has reduced its debts
before raising fresh funds to repay payment-in-kind notes -- an
instrument allowing borrowers to roll over cash interest payments
-- that were issued as part of its GBP790 million buy-out in 2005,
the FT says.

Manchester United Limited -- 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.

READER'S DIGEST: Delays Emergence on UK Pension Issue
The Reader Digest Association said it has elected to temporarily
delay its emergence from Chapter 11 to address an issue involving
the pension program of The Reader's Digest Association, Ltd., the
company's UK entity.  This issue is specific to the UK entity and
does not involve any other RDA company.  RDA's restructuring plan
was confirmed by the United States Bankruptcy Court for the
Southern District of New York on January 15, 2010, enabling the
company to choose its date for emergence.  RDA expects to emerge
within the next few weeks.

Last month, the UK entity came to an agreement with the trustees
of its pension plan and the UK Pension Protection Fund (PPF) to
resolve the company's UK pension fund deficit.  This agreement was
contingent on approval from the UK Pensions Regulator, which has
now indicated that it will not approve the pension application.
In light of this unexpected ruling, the UK entity is now reviewing
its options in an attempt to find a solution.

               About The Reader's Digest Association

RDA is a global multi-brand media and marketing company that
educates, entertains and connects audiences around the world.  The
company builds multi-platform communities based on branded
content.  With offices in 44 countries, it markets books,
magazines, and music, video and educational products reaching a
customer base of 130 million in 78 countries.  It publishes 94
magazines, including 50 editions of Reader's Digest, the world's
largest-circulation magazine, operates 65 branded Web sites
generating 22 million unique visitors per month, and sells
40 million books, music and video products across the world each
year.  Its global headquarters are in Pleasantville, N.Y.

Reader's Digest said that as of June 30, 2009, it had total assets
of US$2.2 billion against total debts of US$3.4 billion.

Reader's Digest, together with its 47 affiliates, filed for
Chapter 11 on August 24 (Bankr. S.D.N.Y. Case No. 09-23529).
Kirkland & Ellis LLP has been engaged as general restructuring
counsel.  Mallet-Prevost, Colt & Mosle LLP has been tapped as
conflicts counsel.  Ernst & Young LLP is auditor.  Miller Buckfire
& Co, LLC, is financial advisor.  AlixPartners, LLC, is
restructuring consultant.  Kurtzman Carson Consultants is notice
and claims agent.

The Official Committee of Unsecured Creditors is tapping BDO
Seidman, LLP, as financial advisor, Trenwith Securities, LLP, as
investment banker and Otterbourg, Steindler, Houston & Rosen,
P.C., as counsel.

Bankruptcy Creditors' Service, Inc., publishes Reader's Digest
Bankruptcy News.  The newsletter tracks the Chapter 11 proceeding
undertaken by Reader's Digest and its affiliates
( 215/945-7000)

SCARLET TELEVISION: David Hughes Appointed as Administrator
Jules Grant at reports that UK production group
Motive Television has appointed David Hughes, a partner at Janes
Insolvency, as administrator for its Manchester-based indie
Scarlet Television.

In the year ended December 31, 2008, Scarlet reported revenue of
GBP929,000 (US$1.48 million) and made a loss before tax of
GBP175,000 and a loss after tax of GBP303,000, the report

The report recalls last December Motive, which owns 50.6% of
Scarlet, said it was planning to close down or sell its television
production businesses in order to move into the digital
terrestrial TV technology sector.

Scarlet produced factual entertainment fare such as Petrolheads,
Entourage Uncovered and Britain's Biggest Babies.

VANTIS PLC: Ernst & Young Casts Doubt Over SIB Liquidation
Jonathan Sibun at The Daily Telegraph reports that Vantis plc,
which is handling the liquidation of Stanford International Bank,
has had a going concern warning issued against its interim results
by its auditors Ernst & Young.

According to the report, Ernst & Young said uncertainties as to
when Vantis would receive its fees for handling the SIB
liquidation "cast significant doubt on the company's ability to
continue as a going concern".

The report notes that while Vantis said it had ploughed
"significant resources" into handling SIB's liquidation since
Nigel Hamilton-Smith and Peter Wastell were appointed as joint
receivers to the bank last February and joint liquidators in
April, a freezing order issued by a US court, legal appeals by a
US-appointed receiver and a delay in the sale and collection of
proceeds from "significant property assets" meant it had received
no fees in the six months to the end of October last year.

The report says the lack of payment pushed Vantis into a first-
half pre-tax loss of GBP10.7 million, against a profit of GBP4.5
million a year earlier.  Revenues fell 10% to GBP43.1 million, the
report discloses.

The report recalls Vantis agreed a new debt facility and
renegotiated loan covenants with its banks at the end of January,
but the recovery firm, however, warned that the fees on the loan
were "substantially higher than previously".

Vantis plc -- is a UK-based
accounting, tax, business recovery and advisory group focused on
servicing SMEs and owner-managed businesses, as well as private

* UK: Firms Braced for Bumpy Ride Despite Drop in Profit Warnings
After an above average number of profit warnings in the first
quarter of 2009, profit warnings tailed off during 2009, with 282
issued during the year, 37% less than 2008 and the lowest annual
total since 2003, Ernst & Young said.

According to Ernst & Young, there were 50 profit warnings from
quoted UK companies during the last quarter of 2009, compared to
126 in 2008, a year on year fall of 60%.

Andrew Wollaston, Restructuring partner at Ernst & Young said:
"Given the depth of the slump, recovery has certainly come quicker
than we might have anticipated.  This rapid economic recuperation,
along with previously depressed earnings forecasts, is helping
companies beat expectations and keep profit warnings low.  Good
news for UK plc, but this is not the end of the story.  Rapid
recovery costs and 2010 is when we start paying.  Brace yourselves
for a bumpy recovery."

                     A Period of Consequences

2010 looks set to be a year of contradiction for the UK economy; a
year when the early optimism surrounding the return to economic
growth will sit in stark contrast to looming fiscal realities.
For while, extensive government and central bank intervention
might have staved off the risk of depression and turned the UK
economy around, such a rapid turnaround inevitably carries a high

                       Facing Consequences

The start of the year should see a return to growth for the UK
economy.  However, that growth will be hard to sustain in the face
of some strong headwinds.  Budgetary constraints will necessitate
not only the end of the fiscal and monetary stimulus, but that the
UK government pulls back capital from the economy to help plug the
gap in its budget deficit.  Meanwhile, the private sector and
consumer look to weak to completely fill this gap, while exports
are still recovering slowing from the collapse in global demand.
The end of quantitative easing (QE) will only add to the
uncertainty and strain.

Keith McGregor, Restructuring partner at Ernst & Young commented:
"Growth in the first part of the year could sit in contrast with
economic stagnation or even a second dip later on.  Either way, we
are still facing the consequences of the credit crunch almost
three years on.  The events in Dubai at the end of 2009 amply
demonstrate how quickly situations can still deteriorate.  The
coming years could contain more of these shocks not as systemic or
seismic as the collapse of Lehman, but still damaging and a
reminder of the continuing work needed by companies to restructure
and deleverage."


The start of 2010 has seen relatively few profit warnings.  The
usual flurry of post-Christmas retail profit alerts have not
arrived, with just eight warnings for all sectors in the first two
weeks of 2010 versus 16 in the same period of 2009.

Mr. Wollaston said: "This benign start should not distract us from
the obvious difficulties ahead.  We can only guess at the effects
generated by the end of QE but it seems unlikely that equity and
debt markets can continue their stellar run without this support.
If markets retreat, financing options will be fewer and more
expensive in the year ahead, unless banks significantly pick up
lending in 2010.  At present this looks unlikely."

                        Profit Forecasting

Profit forecasting will be less than straightforward.  Economic
surveys show the recovery to be fragile and vulnerable to set
backs in many sectors, with a good chance that the anticipated
public retrenchment could provoke a second output dip later in the
year.  Meanwhile, the profit warning equation the balance between
performance and expectations will even out in the first quarter of
2010 as heavily depressed market expectations rise to meet the
plethora of "better than expected" results that are already been

Mr. McGregor concluded: "It will be harder for companies to beat
expectations in the months ahead.  If expectations become buoyed
by optimism too quickly and outstrip an economy that is recovering
slowly and prone to relapse, we could see a further negative
imbalance and an increase in profit warnings later in 2010.  How
many will depend on the ability of UK plc to manage market
expectations and its own internal forecasts during another tricky

* UK: Financial Uncertainty Curbs Premiership Spending, KPMG Says
While the UK has recently exited recession it appears that
football may just be entering it, according to KPMG's Football
Transfer Monitor.

Gross spending has fallen dramatically in the winter 2010 transfer
window, KPMG's Football Transfer Monitor shows.  Premiership clubs
spent a total of GBP44.8 million during the January period, less
than 25% of the GBP190.5 million spent in the previous year's
winter transfer window, and over one quarter of this amount is
attributed to the sum that Manchester United have agreed for Chris
Smalling of Fulham, a fee that could potentially rise to GBP12
million, after he agreed terms on a deal that would see him join
Manchester United at the end of the season.

Regarding the lack of significant spending in the winter 2010
transfer window, Geoff Mesher, Head of the Forensic Sports
Industry Team at KPMG, said: "While the UK has just recently
exited recession it appears that football may just be entering it.
Financial uncertainty still exists for a number of English
football clubs and many football club chairmen will look at the
current plight of Portsmouth, facing a winding up order on 10
February in the High Court, with concern."

"There had been some expectation that Manchester City's wealthy
owners, and the arrival of Carston Yeung at Birmingham City, might
have produced some high value signings and that the funds raised
from such deals would initiate further spending as they were
recycled through the transfer market, but this has not happened."

Richard Fleming, UK Head of Restructuring at KPMG, further
commented: "Football clubs have not been immune from the effects
of the recession and indeed we have already seen credit crunch
casualties.  Football clubs have three major sources of revenue:
season tickets; broadcast revenue and the transfer windows.
Accordingly, for clubs in financial distress, these are 'crunch
points' when they are likely to go into administration.  The end
of the transfer window today is the last chance for clubs to
generate significant revenue before the season ends; this could
prove to be the final solvent testing point for distressed clubs
as their ability to meet demands on their cash becomes apparent.
With up to 90% of turnover in football clubs accounted for by
players' wages, the main creditor is often HMRC.  Clubs which have
abused HMRC's flexibility by breaking promises to meet their tax
liabilities repeatedly may be in for a short, sharp shock."

Last month UEFA continued to raise concerns about excessive
spending at clubs in Europe with its survey reportedly finding
that nearly half of clubs in Europe are running at a loss every
year with around 20% of clubs spending as much as 120% of revenue
each season.  The majority of this spending was found to be on
player salaries with one third of clubs spending 70% or more of
their revenues on wages.  Mr. Mesher commented: "Player salaries
appear to be outstripping club income and this may go some way to
explain the lack of significant spending by English teams in the
most recent transfer window.  Reports from UEFA that the salaries
of players and coaches are increasing at nearly twice the rate of
revenues across Europe are more concerning though and raise
questions as to how sustainable this trend is for the individual
clubs and the football industry in general."

The gross spend of GBP12.3 million by the traditional "Big Four"
clubs is almost all down to Manchester United's signing of Chris
Smalling.  Liverpool have the second highest net fees received in
the Premiership following the sales of Andrea Dossenna and Andrei
Voronin and no players being brought in for a fee.  Arsenal's
gross spend amounts to just GBP0.5 million on a single player
whilst Chelsea have not spent any funds on transfer fees this

Mr. Mesher said: "Clubs across the board may also see the current
state of affairs as unsustainable and could be waiting for an
adjustment in the market value of player transfer fees, or perhaps
more importantly wages, before making major investments in new
playing staff -- but in the competitive world of football can they
afford to wait?

"In the short term though it seems that financial uncertainty,
brought into sharper focus by the experiences of clubs like
Portsmouth and Crystal Palace, is resulting in a degree of
financial prudence amongst many English clubs for now."

                            About KPMG

KPMG LLP, a UK limited liability partnership, is a subsidiary of
KPMG Europe LLP and operates from 22 offices across the UK with
nearly 11,000 partners and staff.  The UK firm recorded a turnover
of GBP1.6 billion in the year ended September 2009.  KPMG is a
global network of professional firms providing Audit, Tax, and
Advisory services.  The firm operates in 144 countries and has
more than 137,000 professionals working in member firms around the
world.  The independent member firms of the KPMG network are
affiliated with KPMG International Cooperative, a Swiss entity.
KPMG International provides no client services.


* Global Firms Still Nervous About Recovery, E&Y Says
A comprehensive survey of senior executives at nearly 900 major
companies worldwide by Ernst & Young reveals a very different
business environment compared to 12 months ago but highlights a
corporate world that for the most part is still nervous about

In January 2009, an Ernst & Young study, Opportunities in
Adversity, asked companies about their key strategic priorities
for 2009.  Nearly three-quarters said they were focused on
securing the survival of their present business and only 19% said
they were looking to take advantage of the recession to pursue new
market opportunities.  As part of Ernst & Young's ongoing Lessons
from change program, new research shows that by the beginning of
December 2009, the percentage looking to pursue new opportunities
this year has risen to 34%.  Over half (53%) of companies,
however, still agreed that surviving 2010 would still remain a

However, after the actions that many were forced to take earlier
in the year it was not surprising companies were seeing progress
with fewer still focused on improving the performance of their
current assets, down from 39% to 27%, and the proportion still
restructuring their business also declined from 37% to 27%.

John Murphy, Global Managing Partner-Markets, Ernst & Young said,
"The spirit of optimism has increased, but it is essentially
fragile in nature.  A pick up in confidence is not surprising,
given the massive global government stimulus working its way
through the economy and the larger developing and emerging
economies beginning to rebound.  Companies may be less worried
about survival over the next 12 months, but the return to a
healthy operating environment is still some way off."

A significant minority are generating growth in EBITDA

Surprisingly, for a significant minority 2009 was a year when
earnings improved.  More than one third of companies surveyed
reported that earnings before interest, depreciation and
amortization (EBITDA) had grown by over 5% in the last 12 months.
Remarkably in the context of a global recession, 7% of all
businesses had seen a more than 20% increase in earnings.

Forty-five per cent of the companies based in Asia-Pacific and
with a turnover of between US$100 million and US$500 million
reported in excess of 5% EBITDA growth.  One-third of the very
largest organizations surveyed (turnover exceeding US$10 billion)
also reported EBITDA growth exceeding 5%.

In Latin America (26%), Western Europe (28%) and Eastern Europe
(29%) the proportion reporting 5% EBITDA growth or more was lower.
By sector, more than 40% of pharmaceutical, aerospace and defense
and banking companies exceeded the 5% growth threshold.
Corporates in the oil and gas, manufacturing and automotive
sectors were far more likely to report flat or declining earnings.

Mr. Murphy added, "As we predicted last January, despite the
turmoil and the challenges in 2009 there were some outright
winners -- companies that have found opportunity in the adversity.
Judging by our research, a picture is emerging across countries
and sectors of a group of companies that share a certain
performance agenda, particularly around achieving speed-to-market.
They are faster in making and executing decisions to take
advantage of their changing markets."

But a way to go before earnings back at pre-recession levels

While they are out of crisis mode, corporates are now turning
their attention to when there will be a full recovery in earnings.
Approximately one-third saw revenue growth returning within six
months, one-third said by the start of 2011 and the final third
not for at least two years.  Only 1% was pessimistic enough to say
it would never return to pre-recession levels.  Mr. Murphy added:
"Revenue growth -- not just earnings growth -- is now the burning
platform for corporate, many of whom see recovery, certainly in
the short to medium term, as sluggish."

And what will happen in 2010?

How were companies planning to improve their performance this
year? Three-quarters of respondents said they believed that there
were still major costs savings to be made in their organization
through improved efficiency.  A high proportion of companies (72%)
felt they needed to increase the flexibility of their operations
through reducing fixed costs, particularly among support functions
and improving productivity.

The next most popular response was optimizing the markets they
serve (64%) via new market entry, new products or new channels,
and through revitalizing the business model (64%) with new
thinking around organizational structure, core competencies and
new business collaborations.  Respondents also believed that
accelerating their decision making processes and execution (63%)
and strengthening their management talent (62%) would be critical
to improve their chances of success.

80% look to growth despite problems with accessing capital

Exactly half of all businesses agreed that restricted access to
capital will continue to constrain their growth prospects over the
next year, yet a significant minority of respondents (30%) said
they intended to take an aggressive growth-oriented stance as the
demand outlook in their markets is improving.  A further 49% of
corporates said that they intended to pursue growth
opportunistically, as the prospects for recovery in their markets
remain unclear.  The remaining fifth of companies said that their
strategic focus will remain squarely on cost control until the
market improves.

Mr. Murphy concluded, "It is clear that many companies are seeking
to learn the lessons of the changed market.  Although there is no
silver bullet -- no single action that will deliver success -- our
research has identified a number of action programs which sets
high-performing companies apart.  For instance, they have a
deeper, broader understanding of their markets and the risks
involved.  Furthermore, they are more innovative in strategy and
structure than their competitors and are more collaborative with
partners.  These successful companies are essentially equipping
themselves for the new economy and navigating a new future for

* Upcoming Meetings, Conferences and Seminars

Feb. 21-23, 2010
    International Annual Regional Conference
       Madinat Jumeirah, Dubai, UAE
          Contact: 44-0-20-7929-6679 or

April 20-22, 2010
    Sheraton New York Hotel and Towers, New York, NY

Apr. 29-May 2, 2010
    Annual Spring Meeting
       Gaylord National Resort & Convention Center, Maryland
          Contact: 1-703-739-0800;

June 17-20, 2010
    Central States Bankruptcy Workshop
       Grand Traverse Resort and Spa, Traverse City, Michigan
          Contact: 1-703-739-0800;

July 7-10, 2010
    Northeast Bankruptcy Conference
       Ocean Edge Resort, Brewster, Massachusetts
          Contact: 1-703-739-0800;

July 14-17, 2010
    Southeast Bankruptcy Conference
       The Ritz-Carlton Amelia Island, Amelia, Fla.

Aug. 5-7, 2010
    Mid-Atlantic Bankruptcy Workshop
       Hyatt Regency Chesapeake Bay, Cambridge, Maryland
          Contact: 1-703-739-0800;

Oct. 6-8, 2010
    TMA Annual Convention
       JW Marriott Grande Lakes, Orlando, Florida

Dec. 2-4, 2010
    22nd Annual Winter Leadership Conference
       Camelback Inn, Scottsdale, Arizona
          Contact: 1-703-739-0800;

Mar. 31-Apr. 3, 2011
    Annual Spring Meeting
       Gaylord National Resort & Convention Center, Maryland
          Contact: 1-703-739-0800;

June 9-12, 2011
    Central States Bankruptcy Workshop
       Grand Traverse Resort and Spa
          Traverse City, Michigan

October 25-27, 2011
    Hilton San Diego Bayfront, San Diego, CA

Dec. 1-3, 2011
    23rd Annual Winter Leadership Conference
       La Quinta Resort & Spa, La Quinta, California
          Contact: 1-703-739-0800;


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

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  Go to 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.

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delivered via e-mail.  Additional e-mail subscriptions for members
of the same firm for the term of the initial subscription or
balance thereof are US$25 each.  For subscription information,
contact Christopher Beard at 240/629-3300.

                 * * * End of Transmission * * *