TCREUR_Public/100210.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

                           E U R O P E

         Wednesday, February 10, 2010, Vol. 11, No. 028

                            Headlines



B E L A R U S

BELARUSIAN REPUBLICAN: Fitch Cuts Insurer Strength Rating to 'B-'
EXPORT-IMPORT: Fitch Cuts Financial Strength Rating to 'B-'


E S T O N I A

VALGA BAKERY: Owner Arrested for Fraud in US, Eesti Ekspress Says


G E R M A N Y

EUROCONNECT ISSUER: Fitch Cuts Rating on Class C Notes to 'B-'
PLASTAL GMBH: Faurecia Exteriors Buys Six Plants


G R E E C E

WIND HELLAS: S&P Raises Corporate Credit Rating to 'CCC+'


I R E L A N D

COLINDALE CONSTRUCTION: Appoints Tom Murray as Liquidator
EXILE CLOTHING: Appoints Barry Forrest as Liquidator
GLASTONBURY FINANCE: Re-Hedging Won't Affect Fitch's Note Ratings
GRAHAM & HESLIP: Owed GBP3.1 Million to Unsecured Creditors
PAYZONE PLC: RBS Appoints Ernst & Young as Receivers

QUINN GROUP: In Talks with Banks to Refinance EUR780 Mln Debt


I T A L Y

ARES FINANCE: Fitch Junks Rating on Class E Notes From 'B'


L U X E M B O U R G

IIB LUXEMBOURG: Moody's Assigns 'B1' Long-Term Debt Rating
ORCO PROPERTY: Seeks to End Creditor Protection; Has Debt Deal


M A C E D O N I A

* STRUMICA MUNICIPALITY: Moody's Assigns 'B1' Issuer Rating
* VELES MUNICIPALITY: Moody's Assigns 'B1' Issuer Rating


N E T H E R L A N D S

ABN AMRO: EU Temporarily Approves Recapitalization Package
FORTIS BANK: EU Temporarily Approves Recapitalization Package
SGA SOCIETE: Moody's Downgrades Rating on EUR5M Notes to 'C'
SMILE 2005: ABN AMRO De-Merger Won't Affect Fitch's Note Ratings


P O R T U G A L

* PORTUGAL: Hit by Greek Debt Crisis; Credit Default Swaps Rise


S L O V E N I A

SAVA INVEST: Owner Opts to Liquidate Investment Funds


S P A I N

GC FTGENCAT: Fitch Junks Rating on Class C Notes From 'BB'
SANTANDER CONSUMER: Fitch Junks Ratings on Two Classes of Notes
SANTANDER FINANCIACION: Fitch Cuts Rating on Class F Notes to 'C'

* SPAIN: Real Estate Sector Is Bankrupt, SMA President Says
* SPAIN: Hit by Greek Debt Crisis; Credit Default Swaps Rise


S W E D E N

GENERAL MOTORS: EU Authorizes Swedish State Guarantee for Saab
LEHMAN BROTHERS: Swedbank Refuses to Release Funds Held in Account


S W I T Z E R L A N D

CLOCK FINANCE: Fitch Affirms Ratings on Class F1, F2 Notes at 'B'


U N I T E D   K I N G D O M

ABERDEEN EXHIBITION: Faces Closure; Seeks Help from City Council
AINSLEYS OF LEEDS: Administrators Find Buyers for 20 Stores
AU NATURALE: In Administration; MCR On Board
BRITISH AIRWAYS: S&P Downgrades Corporate Credit Rating to 'BB-'
CARDIFF FOOTBALL: May Avert Liquidation; Land Deals to Cover Debt

CLARIS LIMITED: Moody's Lowers Rating on EUR15M Notes to 'C'
DIVALIMIT LTD: In Administration; Hodgsons Seeks Potential Buyers
ETHEL AUSTIN: In Administration; MCR On Board
KERLING PLC: S&P Raises Corporate Credit Rating to 'B-'
LLOYDS BANKING: UK Gov't May Sell Stake in Five Years, Panel Says

READER'S DIGEST: Gets Nod for Emergency Funding to UK Unit
REID AND MCCUTCHEON: Goes Into Liquidation; 8 Jobs Affected
ROYAL BANK: UK Gov't May Sell Stake in Five Years, Panel Says
ROYAL BANK: Payments to Investment Bankers Lower Than Rivals
VANTIS BUSINESS: Says Still Afloat Despite Unpaid Stanford Fees

* UK: SME Owners Opt for Personal Insolvency to Keep Firms Afloat




                         *********



=============
B E L A R U S
=============


BELARUSIAN REPUBLICAN: Fitch Cuts Insurer Strength Rating to 'B-'
-----------------------------------------------------------------
Fitch Ratings has downgraded Belarusian Republican Unitary
Insurance Company's Insurer Financial Strength rating to 'B-' from
'B'.  The Outlook is Negative.

The rating action reflects the deterioration in the average credit
quality of Belgosstrakh's investment portfolio following a
sizeable equity investment in a state-owned bank.  It also
reflects Fitch's view that the Republic of Belarus, Belgosstrakh's
100% owner, would be no more likely to support the company than
other state-owned enterprises in the event of need, even though
Fitch expects it may have greater ability to do so on account of
Belgosstrakh's relatively smaller size.  The Negative Outlook
reflects the weakening ability of the Belarusian authorities to
support the insurance sector in such a scenario.  The rating also
takes into account the leading role performed by Belgosstrakh in
the development of the Belarusian insurance sector and the
company's adequate capital position.

Belgosstrakh's rating will continue to be affected by any
significant changes in Fitch's view of the financial condition of
the Republic of Belarus.

The average credit quality of Belgosstrakh's investment portfolio
is weak.  Fitch notes that 55% of the company's total investments
at Q309 were held in equities of Belagroprombank (rated 'B-',
Outlook Negative) following a BYR650bn capital injection from the
government in December 2008 to acquire this shareholding.  Other
investments are placed entirely in state-issued bonds, bonds of
state-owned banks, or cash in state-owned banks, all of which are
rated 'B-', Outlook Negative by Fitch.  The agency also notes the
relatively low liquidity of most of Belgosstrakh's investments in
light of the underdeveloped investment market in Belarus.

Fitch notes Belgosstrakh's extremely strong coverage of the
regulatory solvency ratio and views capital as adequate for the
rating level.  However, the agency believes the significant
concentration of Belgosstrakh's investments in state-owned
enterprises presents a high credit risk that could rapidly reduce
capital adequacy in the event of financial instability at the
sovereign level.

Belgosstrakh's underwriting performance is reasonable with a
combined ratio of 103.3% in H109 (FY08: 100.1%).  Fitch notes that
tariffs for compulsory lines of business in Belarus are set by the
state, thus limiting Belgosstrakh's ability to control the
profitability of its portfolio.  The agency also notes positively
that Belgosstrakh is tasked with the provision of practical and
methodological support for the evolution of the insurance industry
in Belarus, and has significant influence in the determination of
insurance tariffs and insurance legislation.

Belgosstrakh was founded in 1921 and had a 58% share of the non-
life insurance market in Belarus as at 1 December 2009.  The
company has two subsidiaries: Stravita, a life insurer, and
Poligraf, which carries out polygraphic and publishing activity.
At end-H109 Belgosstrakh had BYR777 billion in net assets and
seven branches covering all Belarusian regional centers, including
Minsk.


EXPORT-IMPORT: Fitch Cuts Financial Strength Rating to 'B-'
-----------------------------------------------------------
Fitch Ratings has downgraded Export-Import Insurance Company of
the Republic of Belarus' Financial Strength rating to 'B-' from
'B'.  The Outlook is Negative.

The downgrade reflects the deterioration in the average credit
quality, the increased concentration and the reduced liquidity of
Eximgarant's investment portfolio.  It also reflects Fitch's view
that the Republic of Belarus, Eximgarant's 100% owner, would be no
more likely to support the company than other systemically
important state-owned enterprises such as banks in the event of
need, even though Fitch expects it may have greater ability to do
so on account of Eximgarant's relatively smaller size.  The
Negative Outlook reflects the weakening ability of the Belarusian
authorities to support the insurance sector in such a scenario.
The Negative Outlook also reflects the weakened economic
conditions in the Republic of Belarus and its economic partners,
which have already had a negative impact on Eximgarant's
profitability, as evidenced by an increased loss ratio on export-
import insurance products, and which Fitch expects will continue
to negatively impact profitability in the near term.

The financial condition of the Republic of Belarus will continue
to be one of the main rating drivers for Eximgarant, and Fitch
will reflect any change in its opinion, as and when this occurs.

The average credit quality of Eximgarant's investment portfolio
declined in the last 12 months, as the company divested most its
holdings of government debt, which previously accounted for 44% of
the invested assets.  The large capital injection by the state
conducted during 2009 was invested primarily into the shareholding
of Promagroleasing (BYR300 billion out of BYR350 billion injected,
and accounting for 68% of shareholder funds), a large state-owned
leasing company, with the remainder invested into the shareholding
of Belagroprombank ('B-'/ Negative).  The current investment
portfolio contains 76% of equity investments and 23% cash and
deposits, and the agency also notes the relatively low liquidity
of the equity portion of the investment portfolio in light of the
underdeveloped investment market in Belarus.

The rating action reflects the deterioration in Eximgarant's
underwriting profitability which occurred in 2009, as the export-
import lines of business of Eximgarant, as well as other
international participants in this niche market, suffered losses
stemming from the impact of the financial crisis.  The company's
combined ratio deteriorated to 135% at end-9m09 from 77% in 2008.
Fitch notes that profitability in other lines remains robust, and
Eximgarant continues to benefit from the explicit capital support
allowed for in the budgetary system of Republic of Belarus for
export-import related insurance losses, which has not been
utilized to date.  In addition, the rating reflects Eximgarant's
strong capital position, following the capital injection of BYR350
billion conducted by the state during 2009.

Eximgarant was founded in 2001 in the framework of a government
programme aimed at promoting national export operations.
Eximgarant was the seventh-largest insurer in Belarus by premium
volume at end-Q309, with BYR23 billion in net written premiums and
BYR465 billion in total assets.  Eximgarant is a member of the
Prague club of the International Union of Credit and Investment
Insurers, which includes the largest export credit and investments
insurers from developed and developing countries.


=============
E S T O N I A
=============


VALGA BAKERY: Owner Arrested for Fraud in US, Eesti Ekspress Says
-----------------------------------------------------------------
Baltic Business News, citing Estonian daily Eesti Ekspress,
reports that Finnish businessman Tapani Koivunen, the main owner
of insolvent Estonian bakery Valga, had been charged with fraud in
the US.

BBN relates Eesti Ekspress reported Thursday that Mr. Koivunen was
arrested in Chicago last autumn, together with his three
associates.  They had been charged with giving false information
to US Overseas Private Investment Corporation (OPIC), which
granted the bakery project an US$8-million loan for developing a
bakery industry in Estonia, the report discloses.  BBN notes Eesti
Ekspress said the US indictment included money laundering charges.

According to the charges, Golden Sierra, the company linked to
Mr. Koivunen and his associates acquired the Valga bakery from
Eesti Pagar in 2004, BB notes states.  The company declared
insolvency in 2008 and at that time had about 35 employees, BBN
recalls.


=============
G E R M A N Y
=============


EUROCONNECT ISSUER: Fitch Cuts Rating on Class C Notes to 'B-'
--------------------------------------------------------------
Fitch Ratings has downgraded EuroConnect Issuer SME 2007 Limited's
floating-rate notes, due November 2030, removed the notes from
Rating Watch Negative, and assigned Negative Outlooks to both
tranches.  The notes were placed on RWN in August 2009 pending
full analysis following the implementation of Fitch's revised
rating criteria for European granular corporate balance-sheet
securitizations.

The downgrades reflect the application of the updated SME CLO
criteria and Fitch's opinion on non-performing loans in the
portfolio.

The transaction is a synthetic securitization with exposures to
small- and medium-sized enterprises, predominantly in Germany and
Austria.  At closing, UniCredit Bank AG (formerly Bayerische Hypo-
und Vereinsbank AG, rated 'A+'/'F1+'/Outlook Stable) and UniCredit
Bank Austria AG (formerly Bank Austria Creditanstalt AG rated
'A'/'F1'/Outlook Stable) bought protection under a guarantee in
respect of the reference portfolios from the issuer.

The rating actions are:

  -- EUR43.25 million class B (XS0336040331): downgraded to 'BB-'
     from 'BBB'; removed from RWN; assigned Negative Outlook and
     Loss Severity Rating of 'LS-5'

  -- EUR37.1 million class C (XS0336040505): downgraded to 'B-'
     from 'BB'; removed from RWN; assigned Negative Outlook and
     'LS-5'

As of the February 2010 report, the current non-performing bucket
of EuroConnect SME 2007 stands at 0.9% of the portfolio.  When the
lowest rating category of the performing bucket is added, which
Fitch believes is highly likely to be credit impaired, the total
is 2.3%.

Fitch used the originators' internal rating scale to rank the
obligors.  The performing loans' weighted-average one-year
probability of default, based on the originators' PD assumptions,
was 2.19% as at November 2009, which is commensurate with Fitch's
Portfolio Credit Model 'BB-'/'B+' one-year default probability.
The entire portfolio's weighted average one-year PD, including
performing and non-performing loans, was 4.5%.

Based on information provided by the originators, 60% of the
portfolio is secured while the remainder is unsecured which
resulted in Fitch's recovery assumptions being 71% for a 'CCC'
rating stress and 49% for a 'BBB' rating stress.

Fitch took synthetic excess spread and the synthetic excess spread
ledger into account in its analysis.  In the agency's view the
current subordination levels for classes B and C, 4.8% and 3.5%
respectively, are insufficient to cover loss expectations
commensurate with the ratings assigned at closing.


PLASTAL GMBH: Faurecia Exteriors Buys Six Plants
------------------------------------------------
Plasteurope reports that Faurecia Exteriors, part of France-based
OEM supplier Faurecia, has acquired all six plants of insolvent
automotive supplier Plastal GmbH for an undisclosed sum.

According to the report, terms of the deal include a guarantee
that Plastal's 2,000 employees in Germany will keep their jobs for
the next two years.

The transaction, which is expected to close on March 31, following
approval by European cartel authorities, does not include the two
legally independent Plastal subsidiaries in Spain and France,
which have not filed for insolvency, the report notes.

Plastal GmbH is based in Weienburg, Germany.


===========
G R E E C E
===========


WIND HELLAS: S&P Raises Corporate Credit Rating to 'CCC+'
---------------------------------------------------------
Standard & Poor's Ratings Services said it raised its long-term
corporate credit ratings on Greek mobile telecommunications
operator WIND Hellas Telecommunications S.A. and related entities
to 'CCC+' from 'SD' (selective default).

At the same time, S&P raised to 'CCC+' from 'CC' its issue rating
on the EUR1.22 billion senior secured notes due 2012 issued by
WIND Hellas' wholly owned financial subsidiary Hellas
Telecommunications (Luxembourg) V.  The recovery rating on the
notes is unchanged at '3', indicating S&P's expectation of
meaningful (50%-70%) recovery in the event of a payment default.

S&P also raised to 'CCC-' from 'C' its issue rating on subsidiary
Hellas Telecommunications (Luxembourg) III's EUR355 million senior
unsecured notes due 2013.  The recovery rating on the notes is
unchanged at '6', indicating S&P's expectation of negligible (0%-
10%) recovery for unsecured creditors in the event of a payment
default.

"The upgrade mainly reflects WIND Hellas' emergence out of U.K.
insolvency proceedings, as well as its improved liquidity
following completion of its capital restructuring," said Standard
& Poor's credit analyst Melvyn Cooke.  "S&P thinks the ensuing
junior debt write-off is likely to nearly halve the group's
interest payments, despite the higher margin S&P understand WIND
Hellas consented to senior lenders, and enable the group to
generate positive free cash flow in 2010."

In addition, owner Weather Investments' EUR125 million equity
injection (of which about EUR75 million was used in consent fees
and other ancillary costs as part of the restructuring) has
strengthened the group's cash balances.

S&P believes, however, that the group's liquidity remains weak
considering the upcoming 2012 debt maturity of about
EUR1.4 billion and the current soft operating performance, which,
in S&P's opinion, cap the ratings at the 'CCC+' level in the short
term.

WIND Hellas emerged from bankruptcy in late November 2009 after a
U.K. court approved the group's capital restructuring plan through
a pre-packaged administration sale.  The group's reported debt
currently stands at about EUR1.8 billion, versus roughly
EUR3.3 billion prior to the capital restructuring.

"The stable outlook primarily incorporates S&P's view that WIND
Hellas will likely meet its financial obligations for the next
couple of years, but also takes into account the significant
operating pressures S&P expects to persist for some time and the
challenges of the group's high refinancing needs in 2012," said
Mr. Cooke.

Over the medium term, S&P views WIND Hellas' capital structure as
hardly sustainable, especially given the group's current soft
operating performance.

S&P acknowledges that S&P has no indication from WIND Hellas that
management intends to explore a distressed exchange offer.
However, in S&P's view, in the current market environment, the
group's soft operating trends, and its highly-leveraged capital
structure point to the potential likelihood of a distressed
exchange offer prior to the 2012 maturities, which, under its
criteria, S&P would view as tantamount to default.

S&P could downgrade WIND Hellas if operating performance or
liquidity deteriorates further, with no prospects for future
improvement, or if S&P were to perceive that the group was
contemplating a distressed exchange offer.

Given the expected pressure on WIND Hellas' revenues in 2010 and
the unfavorable macroeconomic conditions in Greece, S&P believes a
positive rating action is unlikely during the coming months.


=============
I R E L A N D
=============


COLINDALE CONSTRUCTION: Appoints Tom Murray as Liquidator
-------------------------------------------------------
Tom Murray of Friel Stafford was appointed liquidator of Colindale
Construction Limited on February 3, 2010.

The registered address of Colindale Construction Limited is at:

         Unit 408C Greenougue Industrial Estate
         Rathcoole
         Co. Dublin
         Ireland


EXILE CLOTHING: Appoints Barry Forrest as Liquidator
----------------------------------------------------
Barry Forrest of Forrest & Co. was appointed liquidator of Exile
Clothing Limited on February 3, 2010.

The registered address of Exile Clothing Limited is at:

         16 Dublin Street
         Balbriggan
         Co Dublin
         Ireland


GLASTONBURY FINANCE: Re-Hedging Won't Affect Fitch's Note Ratings
-----------------------------------------------------------------
Fitch Ratings says that the recently proposed re-hedging of one of
the Euro-denominated portfolio assets of Glastonbury Finance 2007-
1 P.L.C. will not in itself impact the ratings of the
transaction's notes.

The notes are rated:

  -- Class X: 'AAA'; Outlook Negative

  -- Class A-1: 'BBB'; Outlook Negative; Loss Severity Rating 'LS-
     2'

  -- Class A-2: 'B'; Outlook Negative; 'LS-4'

  -- Class B: 'CCC'

  -- Class C: 'CC'

  -- Class D: 'C'

  -- Class E: 'C'

  -- Class F: 'C'

The related foreign exchange option of one of the Euro-denominated
portfolio CMBS assets recently expired in February 2010 and
Glastonbury will receive settlement proceeds from the expired FX
option.  The FX option's expiry date approximately matched the
expected maturity of the asset.  The underlying loan of this asset
is now not expected to repay on its expected maturity and may well
extend through to its final legal maturity in February 2012.  The
manager thus proposed to use the expired FX option's settlement
proceeds to enter into an FX option for the asset through to the
asset's final legal maturity in February 2012.

The expired FX option's settlement proceeds are expected to be
sufficient to hedge only around 22% of the asset's current
principal amount, which has amortized to 78.2% of its original
balance.  This is in contradiction to the transaction documents
which state that 25% of the principal amount at the time of
acquisition should be hedged for Euro-denominated portfolio
assets.  In Fitch's view, the increased risk to the transaction
from the FX option not meeting 25% of the asset's original
principal amount is not significant enough to impact the ratings
of Glastonbury's notes.


GRAHAM & HESLIP: Owed GBP3.1 Million to Unsecured Creditors
-----------------------------------------------------------
Belfast Telegraph reports that Graham & Heslip owned GBP3.1
million to unsecured creditors when it went into administration.

The report recalls 81 jobs were saved when the business was sold
to C & R Print in December for a cash consideration of GBP100,
less than two weeks after going into administration.

According to the report, administrators BDO said the company has
GBP31,718 available for unsecured creditors, leaving a deficit of
GBP3,088,319.

The report relates a list sent to around 200 creditors by BDO
shows GBP790,370 -- the biggest debt to a company -- is owed to
McNaughton Paper Northern Ireland, while smaller sums are owed to
a range of other organizations, including Bredagh Gaelic Athletic
Club, owed GBP250, and Invest NI, which is owed GBP352.

The report notes BDO blamed the company's administration on "the
crystallization of significant bad debts from the Republic of
Ireland marketplace".

Graham & Heslip is one of Ireland's oldest printing firms.


PAYZONE PLC: RBS Appoints Ernst & Young as Receivers
----------------------------------------------------
David Martin Hughes and Niall John Coveney of Ernst & Young,
Dublin and Alan Michael Hudson of Ernst & Young, London were
appointed joint receivers of Payzone PLC by The Royal Bank of
Scotland on February 5, 2010.

The registered address of Payzone PLC is at:

         4 Heather Road
         Sandyford Industrial Estate
         Sandyford
         Dublin 18
         Ireland


QUINN GROUP: In Talks with Banks to Refinance EUR780 Mln Debt
-------------------------------------------------------------
Belfast Telegraph reports that The Quinn Group has entered into
discussions with banks about EUR780 million of bank and bond debt
due this year.

According to the report, the company's attempt to refinance
borrowings of this scale may be complicated by the fact it no
longer has a credit rating.

The present terms of the EUR780 million debt facility are not
known, but the Quinn Group could be facing significantly higher
funding costs due the absence of a rating, the report says.

Renewing the bonds is likely to prove far more difficult, the
report states.  Some investment funds are precluded from investing
in any unrated debt, with some banks similarly barred, the report
discloses.

The report relates the company on Feb. 3 said debts do not mature
until October.

The company said it believed a successful conclusion would be
reached on renewing the borrowings, which include EUR700 million
of bank debt and EUR80 million of bonds, the report notes.

The Quinn Group -- http://www.quinn-group.com/-- is a business
group headquartered in Derrylin, County Fermanagh, Northern
Ireland. The privately owned group has ventured into cement and
concrete products, container glass, general insurance, radiators,
plastics, hotels and real estate.  It was formed by its Chairman
Sean Quinn in 1973, developing from a small quarrying operation in
Derrylin into the large organization, employing over 7,000 people
in various locations throughout Europe.


=========
I T A L Y
=========


ARES FINANCE: Fitch Junks Rating on Class E Notes From 'B'
----------------------------------------------------------
Fitch Ratings has downgraded Ares Finance 2 S.a.'s Class D and E
floating-rate notes due July 2011 as listed below.  The agency has
simultaneously assigned Recovery Ratings to the class E notes.

  -- EUR30.9 million Class D (XS0134905206): downgraded to 'B'
     from 'BBB'; Outlook Negative

  -- EUR15 million Class E (XS0134905545): downgraded to 'CC' from
     'B'; 'RR6' assigned.

Ares Finance 2 S.a. is a securitization of a portfolio of Italian
non-performing loans serviced and managed by Societa Gestione
Crediti S.r.l./Archon Group Italia S.r.l. (rated 'RSS2+'/'CSS2+').
Fitch used its European NPL Criteria to analyse the collateral.

The downgrade reflects the ongoing weak collections performance up
to January 2010.  Although gross recoveries at EUR10.6 million
between July 2009 and January 2010 were a slight improvement on
the EUR8.9m seen for the six-month period to June 2009, they
remained markedly lower than the collections achieved for the
immediate previous interest payment dates.

Fitch reiterates that its concern is more about recovery timing
than the recoverability of the NPLs.  As shown in the servicer
report dated January 22, 2010, recovery and profitability rates
remain healthy.  However, the delays between the full resolution
of claims already at the distribution phase and actual receipt of
collections are exposing the most junior class, class E, to an
increasing risk of missed principal payment by their final legal
maturity (July 2011).

Fitch is also concerned about the repayment of the senior notes,
class D, as reflected by the downgrade and the Negative Outlook.
However, the expected recoveries of EUR26.8m from sold positions
are likely to reduce the outstanding balance of the Class D notes
before final legal maturity.  This process is nevertheless taking
longer than expected, slowing down the repayment of the notes
while increasing expenses including servicer and asset managers'
fees, given the lengthy work-out process of the outstanding
portfolio.

Although 40% of the outstanding portfolio by gross book value
(GBV) is in the distribution phase, 52% by GBV consists of
bankrupted claims, for which the recovery timing is longer than
for claims whose borrower is solvent.  Moreover, longer tribunals
timing in central and southern Italy also explain the delayed
resolution of many claims at an advanced legal stage.

As of January 2010, the outstanding portfolio accounted for 2,225
unresolved claims, for a total GBV of EUR617.3 million.  At
closing, the GBV of the pool was EUR1,287.8 million.  The pool is
mainly located in central and southern Italy (44% and 33% by GBV,
respectively) and primarily consists of residential claims (48% by
GBV).


===================
L U X E M B O U R G
===================


IIB LUXEMBOURG: Moody's Assigns 'B1' Long-Term Debt Rating
----------------------------------------------------------
Moody's Investors Service has assigned a B1 long-term foreign
currency debt rating to the Loan Participation Notes issued on a
limited-recourse basis by IIB Luxembourg S.A., a special purpose
vehicle incorporated under the laws of Luxembourg, for the purpose
of financing a senior unsecured loan to International Industrial
Bank, Russia.  The notes in the amount of US$200 million are
denominated in US dollars, carry 11% coupon rate, and have a
maturity of three years.  The B1 rating carries a negative
outlook.

Moody's notes, that the LPNs' rating is based on IIB's fundamental
credit quality, as the bank is the ultimate obligor under the
transaction.  The loan to the bank, which is the only source of
repayment for the notes, will rank at least pari passu with other
unsecured debt of IIB.

Moody's adds that the underlying loan agreement contains a
standard set of covenants such as negative pledge; limitations on
mergers, disposals, transactions with affiliates; full compliance
with prudential supervision ratios; as well as maintenance of
capital adequacy ratio and level of single-name credit risk
concentration.  The covenants require IIB to maintain at least 20%
total CAR, while as at Q3 2009 the bank reported 27.3% total CAR.
The rating agency stated that the likelihood of any of the above-
mentioned covenants being triggered is relatively low; however, if
such events were to occur, it could potentially have adverse
liquidity implications for the bank and might exert downward
pressure on its ratings.

Moody's previous rating action on IIB was on December 3, 2009,
when outlook for IIB's long-term debt and deposit ratings was
changed to negative from stable.

Headquartered in Moscow, IIB reported total IFRS assets of
RUR164 billion (US$5.4 billion) and net income of RUR4.9 billion
(US$164 million) for the nine months ended September 30, 2009.


ORCO PROPERTY: Seeks to End Creditor Protection; Has Debt Deal
--------------------------------------------------------------
Krystof Chamonikolas at Bloomberg News reports that Orco Property
Group SA said it seeks to end bankruptcy protection and
restructure its business.

According to Bloomberg, E15 newspaper, citing Orco board member
Alexis Juan, reported that the company will ask a Paris court this
week to lift protection from creditors, granted in March 2009.

Bloomberg relates Mr. Juan told the newspaper Orco reached an
agreement with bank lenders on rescheduling of payment and will
present its reorganization plan to the court this week.

"The extension of the debt maturity is positive news, provided
that this is confirmed by the banks and approved by the court,"
Bloomberg quoted Igor Muller, a Prague-based analyst at the Czech
brokerage Wood & Co., as saying Monday.

Orco Property Group SA -- http://www.orcogroup.com/-- is a
Luxembourg-based real estate company, specializing in the
development, rental and management of properties in Central and
Eastern Europe.  Through its fully consolidated subsidiaries, Orco
Property Group SA operates in several countries, including the
Czech Republic, Slovakia, Germany, Hungary, Poland, Croatia and
Russia.  The Company rents and manages real estate and hotels
properties composed of office buildings, apartments with services,
luxury hotels and hotel residences; it also develops real estate
projects as promoter.


=================
M A C E D O N I A
=================


* STRUMICA MUNICIPALITY: Moody's Assigns 'B1' Issuer Rating
-----------------------------------------------------------
Moody's Investors Service has assigned issuer ratings of B1 to the
Macedonian municipalities of Strumica and Veles.  The outlook on
the ratings is stable.

"Moody's ratings for the Municipality of Strumica and Municipality
of Veles are underpinned by their solid overall budgetary
performances and lack of any direct-debt exposure.  However, this
should be considered in the context of the immature and untested
institutional and financial frameworks that govern Macedonian
local governments and that have undergone major changes in recent
years," said Katerina Hamplova, Moody's lead analyst for Strumica,
and Miroslav Knazko, Moody's lead analyst for Veles.  The ratings
also reflect the municipalities' high infrastructure needs and
risks arising from the liabilities of their respective utility
companies.

Strumica's local tax revenue base has benefited from the
developing local economy.  However, this proved very sensitive to
the economic downturn in 2009, leading to declining operating
margins and weaker capital spending capacity.  Any improvement in
the municipality's operating margin would depend on its ability to
maintain control of growing operating expenditures.  "The
maintenance of the municipality's sound operating performance will
be particularly important for its creditworthiness in the coming
years, as it will need to ensure it has sufficient funds to
service an anticipated loan from the World Bank and to sustain its
investment requirements," said Ms. Hamplova.

Veles's rating reflects its flexible expenditure policy, which has
enabled the municipality to preserve fiscal equilibrium during the
years of government decentralization.  However, Moody's notes that
under-funded new responsibilities together with a challenging
economic framework have weighed on the municipality's operating
performance since 2008.  "The management will have to adjust its
expenditure policy to sluggish revenue growth to keep its
operating performances positive in coming years," said
Mr.  Knazko.  Nevertheless, Moody's does not expect any material
changes in Veles's overall budgetary performances, as the
municipality's capex implementation strategy should remain
cautious.  "Veles's capex strategy relies mostly on own-source
revenue and transfers from the central government, which may be
supplemented by central government soft-loans.  These borrowings
are not expected to exceed 15% of the municipality's operating
revenue in foreseeable future, thus the potential debt burden
appears to be manageable," added Mr. Knazko.

Strumica is situated in the southeast of the Republic of Macedonia
and is home to more than 55,000 inhabitants.  It is one of the
main agricultural centers in the country and is an important
producer of cereals, vines and tobacco.  The municipality's
location close to the borders with Bulgaria and Greece, its good
road infrastructure and industrial zones help the municipality to
attract investors and support local economic development.

Veles also has roughly 55,000 inhabitants and is located in the
Vardar region in the central part of the Republic of Macedonia.
It is one of the country's industrial hubs, although its economy
has been seriously affected by the transition from a centrally
planned economy.  Food processing, metallurgy, ceramic and
construction materials, fur production, and textile and craft
industries dominate the local economy.  The municipality's
location close to the capital municipality of Skopje and borders
with Bulgaria and Greece, as well as its solid economic
infrastructure, provide support to future economic development in
the municipal area.


* VELES MUNICIPALITY: Moody's Assigns 'B1' Issuer Rating
--------------------------------------------------------
Moody's Investors Service has assigned issuer ratings of B1 to the
Macedonian municipalities of Strumica and Veles.  The outlook on
the ratings is stable.

"Moody's ratings for the Municipality of Strumica and Municipality
of Veles are underpinned by their solid overall budgetary
performances and lack of any direct-debt exposure.  However, this
should be considered in the context of the immature and untested
institutional and financial frameworks that govern Macedonian
local governments and that have undergone major changes in recent
years," said Katerina Hamplova, Moody's lead analyst for Strumica,
and Miroslav Knazko, Moody's lead analyst for Veles.  The ratings
also reflect the municipalities' high infrastructure needs and
risks arising from the liabilities of their respective utility
companies.

Strumica's local tax revenue base has benefited from the
developing local economy.  However, this proved very sensitive to
the economic downturn in 2009, leading to declining operating
margins and weaker capital spending capacity.  Any improvement in
the municipality's operating margin would depend on its ability to
maintain control of growing operating expenditures.  "The
maintenance of the municipality's sound operating performance will
be particularly important for its creditworthiness in the coming
years, as it will need to ensure it has sufficient funds to
service an anticipated loan from the World Bank and to sustain its
investment requirements," said Ms. Hamplova.

Veles's rating reflects its flexible expenditure policy, which has
enabled the municipality to preserve fiscal equilibrium during the
years of government decentralization.  However, Moody's notes that
under-funded new responsibilities together with a challenging
economic framework have weighed on the municipality's operating
performance since 2008.  "The management will have to adjust its
expenditure policy to sluggish revenue growth to keep its
operating performances positive in coming years," said
Mr.  Knazko.  Nevertheless, Moody's does not expect any material
changes in Veles's overall budgetary performances, as the
municipality's capex implementation strategy should remain
cautious.  "Veles's capex strategy relies mostly on own-source
revenue and transfers from the central government, which may be
supplemented by central government soft-loans.  These borrowings
are not expected to exceed 15% of the municipality's operating
revenue in foreseeable future, thus the potential debt burden
appears to be manageable," added Mr. Knazko.

Strumica is situated in the southeast of the Republic of Macedonia
and is home to more than 55,000 inhabitants.  It is one of the
main agricultural centers in the country and is an important
producer of cereals, vines and tobacco.  The municipality's
location close to the borders with Bulgaria and Greece, its good
road infrastructure and industrial zones help the municipality to
attract investors and support local economic development.

Veles also has roughly 55,000 inhabitants and is located in the
Vardar region in the central part of the Republic of Macedonia.
It is one of the country's industrial hubs, although its economy
has been seriously affected by the transition from a centrally
planned economy.  Food processing, metallurgy, ceramic and
construction materials, fur production, and textile and craft
industries dominate the local economy.  The municipality's
location close to the capital municipality of Skopje and borders
with Bulgaria and Greece, as well as its solid economic
infrastructure, provide support to future economic development in
the municipal area.


=====================
N E T H E R L A N D S
=====================


ABN AMRO: EU Temporarily Approves Recapitalization Package
----------------------------------------------------------
The European Commission has temporarily approved, under EU state
aid rules, a recapitalization package of EUR6.9 billion in favor
of ABN AMRO and Fortis Bank Nederland until July 31, 2010, as
urgent rescue aid.  The additional recapitalization package is
necessary to finance the separation of ABN Amro from its mother
company and the integration costs resulting from the merger
between FBN and ABN Amro.  At the same time, the Commission
extended the scope of its in-depth investigation, opened in April
2009 into an aid package related to the purchase of Fortis Bank
Nederland by the Dutch state, to include these additional
measures.  This will allow the Commission to assess in detail the
combined effect of all the support measures in favor of Fortis
Bank Nederland and ABN Amro and give interested parties an
opportunity to comment on the additional measures.  The opening or
extension of an in-depth investigation does not prejudge the
outcome of the procedure.

Competition Commissioner Neelie Kroes said: "This recapitalisation
package is a further step towards the restructuring of Fortis Bank
Nederland and ABN Amro.  I sincerely hope that ABN Amro and Fortis
will rapidly finalise their integration plans and resume their
role as lender to the real economy in The Netherlands.  The
Commission will in the meantime make sure that competition is
preserved."

The purchase by the Dutch State of Fortis Bank Nederland (FBN) on
October 3, 2008 in the context of the rescue of Fortis, gave the
Dutch State also control over the Dutch assets of ABN Amro, which
Fortis had acquired in 2007. However, these assets had not yet
been separated from the rest of ABN Amro.  The Commission has
observed that the actual separation of the Dutch-owned ABN Amro's
activities from their parent company took place during the weekend
of 6-7 February 2010 and underlines that the current decision
relates to the activities of the Dutch-owned ABN Amro (and to
FBN).

The Dutch State recently announced a recapitalization package of
EUR6.89 billion aimed at financing (i) the separation costs of ABN
and FBN, (ii) the costs of their integration and (iii) the
settlement of certain obligations towards the other members of the
ABN Amro buyers consortium.  State support would be provided
through a set of five measures including a guarantee on a EUR34.5
billion portfolio of Dutch mortgage loans, the subscription to a
mandatory convertible security worth EUR3.1 million, the
conversion into capital of Tier 2 loans granted to FBN, a cash
payment of EUR740 million and the provision of a counter guarantee
on a EUR950 million liability.

The Commission's preliminary assessment found that the measures
seem necessary to allow the separation of the Dutch assets of ABN
AMRO, which the Dutch State is obliged to carry out and to finance
since it took the place of Fortis in the Consortium Shareholders
Agreement signed between Fortis, Santander and RBS when deciding
to acquire ABN Amro in 2007.  Given their low level of capital
post separation, FBN and ABN are unable to finance by their own
means the merger, decided by Fortis in 2007 and confirmed by the
Dutch State in November 2008 following its acquisition of the
banks.  The Commission therefore authorized these measures until
July 31, 2010 as urgent rescue aid, to allow the implementation of
the ABN Amro asset separation and of the subsequent merger with
FBN.

However, the Commission needs to ensure that the aid is not used
to distort competition and to weaken competitors by adopting an
aggressive pricing or acquisition policy.

ABN AMRO Bank N.V., headquartered in Amsterdam, the Netherlands,
had total assets of EUR666.8 billion and reported shareholders'
equity (including minority interest) of EUR20.4 billion as of
December 31, 2008.


FORTIS BANK: EU Temporarily Approves Recapitalization Package
-------------------------------------------------------------
The European Commission has temporarily approved under EU state
aid rules a recapitalization package of EUR6.9 billion in favor of
ABN AMRO and Fortis Bank Nederland until July 31, 2010, as urgent
rescue aid.  The additional recapitalization package is necessary
to finance the separation of ABN Amro from its mother company and
the integration costs resulting from the merger between FBN and
ABN Amro.  At the same time, the Commission extended the scope of
its in-depth investigation, opened in April 2009 into an aid
package related to the purchase of Fortis Bank Nederland by the
Dutch state, to include these additional measures.  This will
allow the Commission to assess in detail the combined effect of
all the support measures in favor of Fortis Bank Nederland and ABN
Amro and give interested parties an opportunity to comment on the
additional measures.  The opening or extension of an in-depth
investigation does not prejudge the outcome of the procedure.

Competition Commissioner Neelie Kroes said: "This recapitalisation
package is a further step towards the restructuring of Fortis Bank
Nederland and ABN Amro.  I sincerely hope that ABN Amro and Fortis
will rapidly finalise their integration plans and resume their
role as lender to the real economy in The Netherlands.  The
Commission will in the meantime make sure that competition is
preserved."

The purchase by the Dutch State of Fortis Bank Nederland (FBN) on
October 3, 2008 in the context of the rescue of Fortis, gave the
Dutch State also control over the Dutch assets of ABN Amro, which
Fortis had acquired in 2007. However, these assets had not yet
been separated from the rest of ABN Amro.  The Commission has
observed that the actual separation of the Dutch-owned ABN Amro's
activities from their parent company took place during the weekend
of February 6-7, 2010 and underlines that the current decision
relates to the activities of the Dutch-owned ABN Amro (and to
FBN).

The Dutch State recently announced a recapitalization package of
EUR6.89 billion aimed at financing (i) the separation costs of ABN
and FBN, (ii) the costs of their integration and (iii) the
settlement of certain obligations towards the other members of the
ABN Amro buyers consortium.  State support would be provided
through a set of five measures including a guarantee on a EUR34.5
billion portfolio of Dutch mortgage loans, the subscription to a
mandatory convertible security worth EUR3.1 million, the
conversion into capital of Tier 2 loans granted to FBN, a cash
payment of EUR740 million and the provision of a counter guarantee
on a EUR950 million liability.

The Commission's preliminary assessment found that the measures
seem necessary to allow the separation of the Dutch assets of ABN
AMRO, which the Dutch State is obliged to carry out and to finance
since it took the place of Fortis in the Consortium Shareholders
Agreement signed between Fortis, Santander and RBS when deciding
to acquire ABN Amro in 2007.  Given their low level of capital
post separation, FBN and ABN are unable to finance by their own
means the merger, decided by Fortis in 2007 and confirmed by the
Dutch State in November 2008 following its acquisition of the
banks.  The Commission therefore authorized these measures until
July 31, 2010 as urgent rescue aid, to allow the implementation of
the ABN Amro asset separation and of the subsequent merger with
FBN.

However, the Commission needs to ensure that the aid is not used
to distort competition and to weaken competitors by adopting an
aggressive pricing or acquisition policy.

Headquartered in Amsterdam, Fortis Bank Nederland (Holding) had
total assets of EUR184.203 billion and reported shareholders'
equity (including minority interest) of EUR2.944 billion as of
December 31, 2008.


SGA SOCIETE: Moody's Downgrades Rating on EUR5M Notes to 'C'
------------------------------------------------------------
Moody's Investors Service has taken these rating actions on notes
issued by Claris Limited and SGA Societe Generale Acceptance N.V
under the Voltaire transaction.  The notes affected by the rating
action are:

Issuer: Claris Limited - Voltaire Credit-Linked Notes

  -- EUR50M Series 43/2005 Voltaire Floating Rate Credit Linked
     Notes-1, Downgraded to Caa3; previously on Jun 9, 2009 Caa2
     Placed Under Review for Possible Downgrade

  -- EUR15M Series 45/2005 Voltaire Fixed Rate Credit Linked
     Notes, Downgraded to C; previously on Jun 9, 2009 Caa2 Placed
     Under Review for Possible Downgrade

Issuer: SGA Societe Generale Acceptance N.V.  - Voltaire Credit-
Linked Notes

  -- EUR5M Series 9945/05-12 Tranche 1 Voltaire Floating Rate
     Credit-Linked Note, Downgraded to Ca; previously on Jan 27,
     2009 Downgraded to Caa3

Moody's will subsequently withdraw the rating of the notes under
Claris Limited: Series 45/2005.  The withdrawal for Series 45/2005
is a result of the repurchase and subsequent cancellation of the
notes on 21st December 2009.  These notes have been repurchased in
full by the Issuer at a price significantly below the original
nominal value of the notes resulting in losses commensurate with a
C rating.  Moody's views that such repurchase qualifies as a
distressed exchange.

The Voltaire credit linked notes are a synthetic CDO-squared
transaction backed by a managed portfolio of 7 corporate inner
CDOs and a direct exposure to a structured finance portfolio.  The
subordination of Claris 43/2005 series remained at 8.50% as at
closing.  However, the 7.20% subordination as at closing for SGA
9945 has almost been completely written down.  This is largely due
to losses at the corporate inner CDO level, whereby several inners
tranches have suffered write downs and no inner tranches have yet
been written down for Claris 43/2005.

The rating downgrade actions reflect a general deterioration in
the credit quality of the underlying corporate portfolios.  This
credit deterioration can be observed through a decline in the
average credit rating (as measured by an increase in the weighted
average rating factor).  The current WARF (calculated based on the
ratings adjusted for watch status and outlooks) for the 7 inner
corporate portfolios is 1347 versus 843 at the time of the
previous rating action, equivalent to a strong Ba1 pool.  Over 40%
of the referenced corporate portfolios have been downgraded since
Moody's last rating downgrade of the transaction in January 2009.
Since then, the inner corporate portfolios have suffered 5 new
credit events, such as Aiful Corp, Cemex S.A.B de C.V., and CIT
Group Inc. In total, there have been 11 credit events since
closing.

Since closing, the ABS portfolio has amortized by 50% and all
assets remain at Aaa except for two that are on review for
possible downgrade.


SMILE 2005: ABN AMRO De-Merger Won't Affect Fitch's Note Ratings
----------------------------------------------------------------
Fitch Ratings says that the recently announced de-merger of ABN
AMRO Bank N.V. will not in itself impact the rating of the notes
of SMILE 2005 SYNTHETIC B.V., Smile Securitization Company 2001-1
B.V., and Smile Securitization Company 2007 B.V.  The three
transactions are collateralized debt obligations of small and
medium-sized enterprises.  In addition, the de-merger will not
impact the ratings of Shield 1 B.V., a residential mortgage-backed
security.

ABN AMRO has proposed to spin off the majority of the assets and
liabilities owned by the Dutch State in ABN AMRO into a newly-
established bank, new ABN AMRO N.V. (rated 'A+'/'F1+'/Outlook
stable).  The assets and liabilities also comprise the loans
included in the portfolio of SMILE 2005 and the roles ABN AMRO
assumes in the Smile 2001-1, SMILE 2005, Smile 2007 and Shield 1
transactions will also be transferred to the new entity.

Based on the information provided, the transfer of the loan
portfolio of SMILE 2005 and the transfer of the counterparty roles
with respect to the SMILE 2005, Smile 2001-1, Smile 2007 and
Shield 1 transactions to new ABN AMRO and the subsequent legal
separation will not in itself result in a withdrawal or downgrade
on any of the ratings assigned by Fitch to the transactions.

The notes are rated:

SMILE 2005 SYNTHETIC B.V.

  -- Class A2: 'AAA'; on RWN
  -- Class B: 'AA+'; on RWN
  -- Class C: 'AA-'; on RWN
  -- Class D: 'BBB+'; on RWN
  -- Class E: 'BB-'; on RWN

Smile Securitization Company 2001-1 B.V.

  -- Class A2: 'AAA'; Outlook Stable
  -- Class B2: 'AAA'; Outlook Stable
  -- Class C2: 'AA'; Outlook Stable
  -- Class D2: 'BBB+'; Outlook Stable

Smile Securitization Company 2007 B.V.

  -- Class A: 'AAA'; on RWN
  -- Class B: 'AA+'; on RWN
  -- Class C: 'AA-'; on RWN
  -- Class D: 'BBB+'; on RWN
  -- Class E: 'BB-'; on RWN

Shield 1 B.V.

  -- Class A (ISIN XS0238072895): 'AAA'; Outlook Stable; Loss
     Severity Rating of 'LS-1'

  -- Class B (ISIN XS0238073273): 'AA'; Outlook Stable; 'LS-1'

  -- Class C (ISIN XS0238073356): 'A'; Outlook Stable; 'LS-1'

  -- Class D (ISIN XS0238073513): 'BBB+'; Outlook Stable; 'LS-2'

  -- Class E (ISIN XS0238073604): 'BB'; Outlook Stable; 'LS-2'

  -- Class F (ISIN XS0238073786): 'B'; Outlook Stable; 'LS-3'

It should be noted that this assessment does not address potential
rating actions due to transaction performance.  In particular, the
SMILE 2005 and Smile 2007's notes remain on RWN pending a full
rating review following the implementation of Fitch's updated
criteria for rating SME CLOs.


===============
P O R T U G A L
===============


* PORTUGAL: Hit by Greek Debt Crisis; Credit Default Swaps Rise
---------------------------------------------------------------
Ambrose Evans-Pritchard at The Daily Telegraph reports that the
Greek debt crisis has spread to Spain and Portugal in a dangerous
escalation.

According to the report, Julian Callow from Barclays Capital said
the EU may to need to invoke emergency treaty powers under Article
122 to halt the contagion, issuing an EU guarantee for Greek debt.

"If not contained, this could result in a 'Lehman-style' tsunami
spreading across much of the EU," the report Mr. Callow as saying.

The report discloses credit default swaps measuring bankruptcy
risk on Portuguese debt surged 28 basis points on Thursday,
Feb. 4, to a record 222 on reports that Jose Socrates was about to
resign as prime minister after failing to secure enough votes in
parliament to carry out austerity measures.

The report relates Parliament minister Jorge Lacao said the
political dispute has raised fears that the country is no longer
governable.  "What is at stake is the credibility of the
Portuguese state," the report quoted Mr. Lacao as saying.

The report recounts Portugal has been in political crisis since
the Maoist-Trotskyist Bloco won 10% of the vote last year.  This
is rapidly turning into a market crisis as well as investors
digest a revised budget deficit of 9.3% of GDP for 2009, much
higher than thought, the report says.

A EUR500 million debt auction failed on Wednesday, Feb. 3, the
report recalls.  The yield spread on 10-year Portuguese bonds has
risen to 155 basis points over German bunds, the report notes.


===============
S L O V E N I A
===============


SAVA INVEST: Owner Opts to Liquidate Investment Funds
-----------------------------------------------------
In accordance with Articles 106 and 386 of the Financial
Instruments Market Act (Official Gazette of the Republic of
Slovenia, no. 67/2007) relating to the publication of regulated
information, Sava Reinsurance Company d.d. announced that on
February 3, 2010 the Board of Directors of the fund management
company Sava Invest a.d. with registered office at Partizanski
odredi 43b/1-03, Skopje, Macedonia, adopted the decision to
voluntarily wind up the legal entity.  This decision triggers
proceedings for the liquidation of the investment funds Sava
Invest Rasteci and Sava Invest Balansirajuci before the competent
authorities in the Republic of Macedonia.  The assets of the funds
are, subsequent to settlement of any debts, distributed among
investors in proportion to their investments.

Sava Invest a.d. is jointly owned by Sava Reinsurance Company d.d.
and the insurer Sava Tabak a.d.o. based in Skopje, Macedonia, and
is a subsidiary of the Sava Re Group.  The global economic crisis
with strong repercussions in stock markets impacted the results of
the company.  Sava Reinsurance Company d.d believes that the
investment will not yield satisfactory results in the short term,
neither is the activity complementary to the Group's core
business.

The decision on the winding up of Sava Invest a.d. has no
influence on the existence and operation of Sava Tabak a.d.o., the
second largest general insurer in Macedonia with an 18% market
share.


=========
S P A I N
=========


GC FTGENCAT: Fitch Junks Rating on Class C Notes From 'BB'
----------------------------------------------------------
Fitch Ratings has downgraded GC FTGENCAT Sabadell 1's notes and
taken additional rating actions as highlighted below:

  -- EUR345.6 million class A(G) notes: downgraded to 'AA' from
     'AA+'; Negative Outlook; assigned a Loss Severity rating of
     'LS-1'

  -- EUR19.8 million class B notes: downgraded to 'B' from 'BBB';
     Negative Outlook; assigned 'LS-3'

  -- EUR5.7 million class C notes: downgraded to 'CCC' from 'BB';
     assigned a Recovery Rating of 'RR3'

The rating action takes into consideration both the performance of
the transaction to date which, despite a relatively good
historical performance, has in recent months displayed a clear
shift towards a more negative trend, as well as an updated credit
view of the underlying small to medium-sized enterprises' loans
securitized under the transaction.

Following the increase in cumulative gross defaults to
EUR7.7 million from EUR4 million in the six months from July to
December 2009, Fitch believes that the underlying assets will
continue to report a sharp deterioration in credit performance as
difficult economic conditions in Spain are expected to persist
through the end of 2010.  The agency expects the collateral to
remain under pressure in the near-term, with continued increases
in late-stage arrears and defaults.

In line with its global structured finance rating criteria and
taking into account its rating criteria for European granular
corporate balance-sheet securitizations), Fitch also updated its
base case default expectation for the performing collateral
balance of the portfolio as well as the Recovery Rate
expectations.  These revised assumptions, coupled with the
expected credit performance of the underlying assets, including
the profile of the transaction's delinquency pipeline, result in
limited credit protection being available to the noteholders which
supported the notes' downgrades.

Despite current cumulative losses still being below their initial
base case, Fitch believes that the losses expected to arise from
the transaction in the next 12-to-18 months will result in further
reserve fund draws, following the two consecutive draws which
occurred in September and December 2009 of EUR1.5 million and EUR2
million respectively.  These draws occurred as a direct result of
the significant increase in defaults during the last six months.

The class A (G) notes benefit from a guarantee by the Generalitat
de Catalunya (Autonomous Community of Catalonia, rated
'A+'/'F1'/Outlook Negative) to meet the ultimate payment of
interest and principal on the notes.

The transaction is a cash flow securitization of a pool of leasing
contracts originated from Banco de Sabadell (rated
'A+'/'F1'/Outlook Negative) to Spanish SMEs.


SANTANDER CONSUMER: Fitch Junks Ratings on Two Classes of Notes
---------------------------------------------------------------
Fitch Ratings has downgraded FTA Santander Financiacion 2 and FTA
Santander Consumer Spain 07-2 due to its concern over their recent
performance.  Both transactions are backed by the unsecured
consumer and auto loans that have been hit by the economic
downturn in Spain.  A full breakdown of rating actions:

Santander Financiacion 2:

  -- EUR342.6 million class A: downgraded to 'AA' from 'AAA';
     assigned Loss Severity rating 'LS-2'; Outlook Stable

  -- EUR58 million class B: downgraded to 'BBB+' from 'AA-';
     assigned 'LS-3'; Outlook Negative

  -- EUR44.9 million class C: downgraded to 'B' from 'BBB-';
     assigned LS-4; Outlook Negative

  -- EUR29 million class D: downgraded to 'CCC' from 'B'; assigned
     Recovery Rating 'RR4'

  -- EUR63.8 million class E: affirmed at 'CC'; Recovery Rating is
     'RR5'

  -- EUR21.8 million class F: downgraded to 'C' from 'CC' Recovery
     Rating is 'RR6'

Santander 07-2:

  -- EUR491.6 million class A: downgraded to 'BBB-' from 'A';
     assigned 'LS-2'; Outlook Negative

  -- EUR27 million class B: downgraded to 'B' from 'BBB+';
     assigned 'LS-4'; Outlook Negative

  -- EUR17.5 million class C: downgraded to 'CCC' from 'BBB-';
     assigned 'RR4'

  -- EUR26.5 million class D: downgraded to 'CC' from 'B+';
     assigned 'RR5'

  -- EUR20 million class E: downgraded to 'C' from 'CC'; Recovery
     Rating revised to 'RR6' from 'RR5'

Both transactions have witnessed continuing deterioration in the
pool performance since February 2009.  Reserve funds have been
completely utilized to offset the mounting loan write-offs as the
level of bad debts exceeded the excess spread guaranteed in both
transactions.  Cumulative gross write-offs in Santander
Financiacion 2 reached 7.11% (Fitch base case: 3.54%) in November
2009 and 5.07% (5.76%) in Santander 07-2.  Credit enhancement has
been significantly weakened as losses have fed through the
structure causing principal shortfalls at the junior tranche
level.

Based on the current loss severity and delinquency trend and using
the 'EMEA Consumer ABS Rating Criteria' Fitch has revised its
input assumptions on defaults and recovery in its forecast model,
generating scenarios where different stresses were applied over
the next 18 months.  The implied default rate has been derived
from the default assumptions assigned to each delinquency bucket
and the recovery rate is based on the actual recovery performance
by taking into account of the average recovery in other similar
Spanish consumer transactions.  The implied default rates are 10%
to 12% for both transactions and in each case recoveries of 10% to
20% have been assumed.  Although the defaults and recoveries are
the main drivers for the rating actions, other factors such as
collateral composition, pool de-leveraging and prepayment rate
have also been incorporated into the analysis.

As of November 2009, Santander Financiacion 2 has amortised to 38%
of its original size and Santander 07-2 to 43%.


SANTANDER FINANCIACION: Fitch Cuts Rating on Class F Notes to 'C'
-----------------------------------------------------------------
Fitch Ratings has downgraded FTA Santander Financiacion 2 and FTA
Santander Consumer Spain 07-2 due to its concern over their recent
performance.  Both transactions are backed by the unsecured
consumer and auto loans that have been hit by the economic
downturn in Spain.  A full breakdown of rating actions:

Santander Financiacion 2:

  -- EUR342.6 million class A: downgraded to 'AA' from 'AAA';
     assigned Loss Severity rating 'LS-2'; Outlook Stable

  -- EUR58 million class B: downgraded to 'BBB+' from 'AA-';
     assigned 'LS-3'; Outlook Negative

  -- EUR44.9 million class C: downgraded to 'B' from 'BBB-';
     assigned LS-4; Outlook Negative

  -- EUR29 million class D: downgraded to 'CCC' from 'B'; assigned
     Recovery Rating 'RR4'

  -- EUR63.8 million class E: affirmed at 'CC'; Recovery Rating is
     'RR5'

  -- EUR21.8 million class F: downgraded to 'C' from 'CC' Recovery
     Rating is 'RR6'

Santander 07-2:

  -- EUR491.6 million class A: downgraded to 'BBB-' from 'A';
     assigned 'LS-2'; Outlook Negative

  -- EUR27 million class B: downgraded to 'B' from 'BBB+';
     assigned 'LS-4'; Outlook Negative

  -- EUR17.5 million class C: downgraded to 'CCC' from 'BBB-';
     assigned 'RR4'

  -- EUR26.5 million class D: downgraded to 'CC' from 'B+';
     assigned 'RR5'

  -- EUR20 million class E: downgraded to 'C' from 'CC'; Recovery
     Rating revised to 'RR6' from 'RR5'

Both transactions have witnessed continuing deterioration in the
pool performance since February 2009.  Reserve funds have been
completely utilized to offset the mounting loan write-offs as the
level of bad debts exceeded the excess spread guaranteed in both
transactions.  Cumulative gross write-offs in Santander
Financiacion 2 reached 7.11% (Fitch base case: 3.54%) in November
2009 and 5.07% (5.76%) in Santander 07-2.  Credit enhancement has
been significantly weakened as losses have fed through the
structure causing principal shortfalls at the junior tranche
level.

Based on the current loss severity and delinquency trend and using
the 'EMEA Consumer ABS Rating Criteria' Fitch has revised its
input assumptions on defaults and recovery in its forecast model,
generating scenarios where different stresses were applied over
the next 18 months.  The implied default rate has been derived
from the default assumptions assigned to each delinquency bucket
and the recovery rate is based on the actual recovery performance
by taking into account of the average recovery in other similar
Spanish consumer transactions.  The implied default rates are 10%
to 12% for both transactions and in each case recoveries of 10% to
20% have been assumed.  Although the defaults and recoveries are
the main drivers for the rating actions, other factors such as
collateral composition, pool de-leveraging and prepayment rate
have also been incorporated into the analysis.

As of November 2009, Santander Financiacion 2 has amortised to 38%
of its original size and Santander 07-2 to 43%.


* SPAIN: Real Estate Sector Is Bankrupt, SMA President Says
-----------------------------------------------------------
Property Wire reports that Santos Gonzalez Sanchez, president of
the Spanish Mortgage Association, said the country's real estate
sector is bankrupt.  According to the report, Mr. Gonzalez said
there is so much debt in the industry that finance for property
development has effectively dried up.

The report relates Mr. Gonzalez, citing figures from the Bank of
Spain, said that Spanish developers had a combined debt of EUR324
billion in the third quarter of 2009, the equivalent of around 30%
of Spanish GDP.  The interest bill alone is around EUR15 billion a
year, the report notes.

The report says more than 50% of the debt was used to buy land for
which there is now no market.

The report relates Mr. Gonzalez warned, "The viability of the
property sector is in question and it is putting the financial
sector in danger."

Some experts believe that Spain needs to create a "bad bank" where
all the toxic real estate loans can be dumped, freeing the banks
from their bad debts and enabling them to start lending again, the
report states.


* SPAIN: Hit by Greek Debt Crisis; Credit Default Swaps Rise
------------------------------------------------------------
Ambrose Evans-Pritchard at The Daily Telegraph reports that the
Greek debt crisis has spread to Spain and Portugal in a dangerous
escalation.

According to the report, Julian Callow from Barclays Capital said
the EU may to need to invoke emergency treaty powers under Article
122 to halt the contagion, issuing an EU guarantee for Greek debt.

"If not contained, this could result in a 'Lehman-style' tsunami
spreading across much of the EU," the report Mr. Callow as saying.

In Spain, default insurance surged 16 basis points after Nobel
economist Paul Krugman said that "the biggest trouble spot isn't
Greece, it's Spain".  Mr. Krugman blamed EMU's one-size-fits-all
monetary system, which has left the country with no defense
against an adverse shock, the report notes.


===========
S W E D E N
===========


GENERAL MOTORS: EU Authorizes Swedish State Guarantee for Saab
--------------------------------------------------------------
The European Commission has authorized, under EU state aid rules,
plans notified by Sweden to provide a guarantee that would enable
Saab Automobile AB to access a loan from the European Investment
Bank.  The Commission found that 82.8% of the guarantee to be
provided by Sweden was in line with its Temporary Framework for
state aid measures, which gives Member States additional scope to
facilitate access to financing in the present economic and
financial crisis.  In particular, Saab will pay an adequate
remuneration for the guarantee and provide sufficient securities
in case the guarantee would be drawn.  It is therefore compatible
with Article 107(3)(b) of the Treaty on the Functioning of the
European Union (TFEU), which permits aid to remedy a serious
disturbance in the economy of a Member State.  The remaining 17.2%
will be provided on market conditions and therefore does not
constitute state aid.

Competition Commissioner Neelie Kroes said: "The state guarantee
will contribute to the implementation of Saab's business plan
without giving rise to any undue distortions of competition."

The loan to be granted by the EIB would co-finance Saab's business
plan in the light of its sale by current owner General Motors to
Dutch carmaker Spyker Cars N.V.  According to the business plan,
Saab intends to use the EIB loan of EUR400 million for an
investment project worth EUR1 billion related to inter alia fuel
efficiency and car safety.

Saab would pay a premium for the guarantee and provide the Swedish
Government with high-quality collateral covering the full
guaranteed amount.  This collateral could be called upon by the
Swedish state if it had to pay out any money under the guarantee.
The level of the premiums paid during the lifetime of the loan
would be in line with the provisions of the Commission's Temporary
Framework.  For a part of the guarantee, the Commission found
that, in the current market situation and taking into account the
other conditions of the transaction, a premium of 12.48 % per
annum constitutes the market price for the risk involved in
issuing such a guarantee.  The Commission therefore concluded that
this part of the guarantee did not involve state aid.

                       About General Motors

General Motors Company -- http://www.gm.com/-- is one of the
world's largest automakers, tracing its roots back to 1908.  With
its global headquarters in Detroit, GM employs 209,000 people in
every major region of the world and does business in some 140
countries.  GM and its strategic partners produce cars and trucks
in 34 countries, and sell and service these vehicles through these
brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, Opel,
Vauxhall and Wuling.  GM's largest national market is the United
States, followed by China, Brazil, the United Kingdom, Canada,
Russia and Germany.  GM's OnStar subsidiary is the industry leader
in vehicle safety, security and information services.

GM acquired its operations from General Motors Company, n/k/a
Motors Liquidation Company, on July 10, 2009, pursuant to a sale
under Section 363 of the Bankruptcy Code.  Motors Liquidation or
Old GM is the subject of a pending Chapter 11 reorganization case
before the U.S. Bankruptcy Court for the Southern District of New
York.

At September 30, 2009, GM had US$107.45 billion in total assets
against US$135.60 billion in total liabilities.

                    About Motors Liquidation

General Motors Corporation and three of its affiliates filed for
Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case
No. 09-50026).  General Motors changed its name to Motors
Liquidation Co. following the sale of its key assets to a company
60.8% owned by the U.S. Government.

The Honorable Robert E. Gerber presides over the Chapter 11 cases.
Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H.
Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors
in their restructuring efforts.  Al Koch at AP Services, LLC, an
affiliate of AlixPartners, LLP, serves as the Chief Executive
Officer for Motors Liquidation Company.  GM is also represented by
Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as
counsel.  Cravath, Swaine, & Moore LLP is providing legal advice
to the GM Board of Directors.  GM's financial advisors are Morgan
Stanley, Evercore Partners and the Blackstone Group LLP.

Bankruptcy Creditors' Service, Inc., publishes General Motors
Bankruptcy News.  The newsletter tracks the Chapter 11 proceeding
undertaken by General Motors Corp. and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)


LEHMAN BROTHERS: Swedbank Refuses to Release Funds Held in Account
------------------------------------------------------------------
Niklas Magnusson and Linda Sandler at Bloomberg News report that
Swedbank AB, one of Lehman Brothers Holdings Inc.'s largest
secured creditors, has objected to a request by the failed U.S.
investment bank for it to release funds held by Lehman in an
account at the Swedish lender.

Bloomberg relates Swedbank said in a Feb. 3 filing with the U.S.
Bankruptcy Court in New York, Lehman has SEK84.9 million (US$11.4
million) deposited in an account with the Swedish lender.

Lehman, as a "direct obligor or as a guarantor," owes Swedbank
SEK119.6 million, Bloomberg says citing the court filing.

"It seems like there is money that is Lehman's in a Swedbank
account, and the administrator wants it back, which isn't a
surprise," Bloomberg quoted Swedbank spokesman Thomas Backteman as
saying Thursday.  "We have claimed it, since Swedbank has money in
a Lehman account that we want."

A court hearing on the matter is scheduled for today, Feb. 10,
Bloomberg discloses.

Bloomberg recalls Swedbank said in September 2008 that its total
unsecured credit risk related to Lehman is about SEK202 million.
The "exposure" to the secured lending, backed by U.S. real estate
obtained from Lehman following its collapse, stood at US$1.42
billion at the end of September last year, Bloomberg notes.

                       About Lehman Brothers

Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the
fourth largest investment bank in the United States.  For more
than 150 years, Lehman Brothers has been a leader in the global
financial markets by serving the financial needs of corporations,
governmental units, institutional clients and individuals
worldwide.

Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008
(Bankr. S.D.N.Y. Case No. 08-13555).  Lehman's bankruptcy petition
listed US$639 billion in assets and US$613 billion in debts,
effectively making the firm's bankruptcy filing the largest in
U.S. history.  Several other affiliates followed thereafter.

The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil,
Gotshal & Manges, LLP, in New York, represent Lehman.  Epiq
Bankruptcy Solutions serves as claims and noticing agent.

On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the
U.S. District Court for the Southern District of New York, entered
an order commencing liquidation of Lehman Brothers, Inc., pursuant
to the provisions of the Securities Investor Protection Act (Case
No. 08-CIV-8119 (GEL)).  James W. Giddens has been appointed as
trustee for the SIPA liquidation of the business of LBI

The Bankruptcy Court has approved Barclays Bank Plc's purchase of
Lehman Brothers' North American investment banking and capital
markets operations and supporting infrastructure for
US$1.75 billion.  Nomura Holdings Inc., the largest brokerage
house in Japan, purchased LBHI's operations in Europe for US$2
plus the retention of most of employees.  Nomura also
bought Lehman's operations in the Asia Pacific for US$225 million.

               International Operations Collapse

Lehman Brothers International (Europe), the principal UK trading
company in the Lehman group, was placed into administration,
together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE
Holdings Ltd.  Tony Lomas, Steven Pearson, Dan Schwarzmann and
Mike Jervis, partners at PricewaterhouseCoopers LLP, have been
appointed as joint administrators to Lehman Brothers International
(Europe) on September 15, 2008.  The joint administrators have
been appointed to wind down the business.

Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc.
filed for bankruptcy in the Tokyo District Court on September 16.
Lehman Brothers Japan Inc. reported about JPY3.4 trillion
(US$33 billion) in liabilities in its petition.

Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers
Bankruptcy News.  The newsletter tracks the Chapter 11 proceeding
undertaken by Lehman Brothers Holdings, Inc., and other insolvency
and bankruptcy proceedings undertaken by its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)


=====================
S W I T Z E R L A N D
=====================


CLOCK FINANCE: Fitch Affirms Ratings on Class F1, F2 Notes at 'B'
-----------------------------------------------------------------
Fitch Ratings has affirmed CLOCK FINANCE NO 1 B.V.'s notes due
2015, and removed them from Rating Watch Negative.  Outlooks and
Loss Severity Ratings were also assigned.  The notes were placed
on RWN in August 2009 pending full analysis following the
implementation of Fitch's revised rating criteria for European
granular corporate balance-sheet securitizations.

The rating actions are:

  -- CHF132,000,000 Class A (ISIN: XS0289546201) affirmed at
     'AAA'; off RWN; assigned Stable Outlook and 'LS-3'

  -- CHF20,000,000 Class B1 (ISIN: XS0289629320) affirmed at 'AA';
     off RWN; assigned Stable Outlook and 'LS-3'

  -- EUR45,400,000 Class B2 (ISIN: XS0289550062) affirmed at 'AA';
     off RWN; assigned Stable Outlook and 'LS-3'

  -- CHF13,000,000 Class C1 (ISIN: XS0289638230) affirmed at 'A';
     off RWN; assigned Stable Outlook and 'LS-3'

  -- EUR52,700,000 Class C2 (ISIN: XS0289550815) affirmed at 'A';
     off RWN; assigned Stable Outlook and 'LS-3'

  -- EUR56,300,000 Class D (ISIN: XS0289551623) affirmed at
     'BBB+'; off RWN; assigned Negative Outlook and 'LS-3'

  -- EUR40,300,000 Class E (ISIN: XS0289552191) affirmed at 'BB+';
     off RWN; assigned Negative Outlook and 'LS-3'

  -- CHF10,000,000 Class F1 (ISIN: XS0289641614) affirmed at 'B';
     off RWN; assigned Negative Outlook and 'LS-3'

  -- EUR18,700,000 Class F2 (ISIN: XS0289552514) affirmed at 'B';
     off RWN; assigned Negative Outlook and 'LS-3'

The transaction is a partially funded synthetic collateralized
debt obligation referencing a portfolio of loans to Swiss small-
and medium-sized enterprises granted by the private banking
division of Credit Suisse.

The affirmation reflects Fitch's revised loss an expectation
following the update of Fitch's rating criteria for SME CLOs as
well as the transaction's stable performance to date.  As per the
January 2010 investor report, total default assets since close
represent 0.55% of the maximum portfolio balance.  Of this, 0.04%
remained outstanding defaults (settlements pending).  The weighted
average recovery rate to date is 47.6%.

While the portfolio is made up entirely of Swiss enterprises, the
portfolio is well-diversified in terms of regions and industries.
The largest sector is industrial/ manufacturing representing 11.6%
of the portfolio.  Additionally, the obligor concentration in the
portfolio is relatively low with the top 10 exposures making up
7.1% as per the January 2010 investor report.

For this rating review CS provided Fitch with a portfolio cut.  To
determine the credit risk of the portfolio Fitch used its
Portfolio Credit Model to map the agency's Long-term ratings to
CS's internal rating scale to derive an assessment for the unrated
loan agreements.  Regarding the modeled term, Fitch used the
current weighted average life of each loan rather than the maximum
risk horizon of the transaction.  This approach is in line with
Fitch's approach for other replenishing transactions.  While the
transaction can replenish over the entire transaction horizon,
certain replenishment criteria and a replenishment suspension
trigger limit the degree to which the portfolio may be
replenished.  The portfolio also benefits from collateral
security, of which the majority is made up of property.  As per
Fitch criteria, a market value decline analysis is applied to the
security haircutting the value of the properties.

The Negative Outlook on the junior classes reflects the relatively
long remaining term to maturity during which the portfolio may be
replenished and will not benefit from amortization.  The Negative
Outlook also reflects the position of the junior notes in terms of
potential loss allocation.


===========================
U N I T E D   K I N G D O M
===========================


ABERDEEN EXHIBITION: Faces Closure; Seeks Help from City Council
----------------------------------------------------------------
David Ewen at Evening Express reports that the Aberdeen Exhibition
and Conference Centre could face closure unless a rescue plan is
agreed upon.

According to the report, Aberdeen City Council will be asked
today, Feb. 10, to agree to a rescue package for the AECC.  The
report says it would involve extending the deadline for repayment
of a GBP7.5 million loan by six years and converting another
GBP2 million debt due to Aberdeen City Council into shares in the
AECC.

The Aberdeen Exhibition and Conference Centre is Aberdeen's
biggest entertainment venue.


AINSLEYS OF LEEDS: Administrators Find Buyers for 20 Stores
-----------------------------------------------------------
BBC News reports that Grant Thornton, Ainsleys of Leeds Ltd.'s
administrators, have found buyers for 20 of the bakery chain's 29
stores across West and North Yorkshire, securing most of the 285
jobs at the company.

According to the report, Ainsleys' Leeds bakery has been bought by
local company Country Style Foods.

Cooplands in Doncaster and Cooplands in Scarborough, which are
separate business arms of the same family, have each bought 10
stores, while, the firm's sandwich van business has been sold to
A W Food Services, the report relates.

The report recalls Ainsleys went into administration in November
blaming rising food prices, energy costs and tough competition on
the high street.

"Negotiations are still ongoing in respect of the remaining nine
stores and we hope to be able to announce a positive resolution
shortly," the report quoted Joe McLean, a partner at Grant
Thornton's Leeds office, who has been leading the search for a
buyer for Ainsleys since the firm went into administration, as
saying.

Ainsleys -- http://www.ainsleys.co.uk/-- is one of the UK's
premier family bakeries.  Over thirty Yorkshire retail stores
serve freshly baked breads, cakes, sandwiches and savories to over
100,000 customers a week.  Its Food Service business specializes
in breads and morning goods, puddings, cakes and frozen/chilled
desserts with clients in the multiple retail and catering markets.


AU NATURALE: In Administration; MCR On Board
--------------------------------------------
Geoff Bouchier, David Whitehouse and Philip Duffy, Partners at MCR
have been appointed Joint Administrators of Ethel Austin Limited
and Au Naturale Limited on February 8, 2010.

Ethel Austin is one of Britain's value clothing retailers with a
nationwide network of nearly 300 stores extending from Scotland to
the South West, and from Wales to the South East.  The business
was established more than 70 years ago and has grown to become one
of Britain's leading value clothing retailers with a national
presence.

The company's Head Office is at Knowsley on Merseyside, only 10
miles away from where the business was founded by Ethel Austin
herself.  Its sister company is the Au Naturale homewares chain.

Geoff Bouchier, Partner, MCR, stated: "The Joint Administrators
are trading the Companies in Administration in the short term with
a view to finding a purchaser for the businesses as a going
concern.  In the current economic climate there are no guarantees
that purchasers will be found.  We are reviewing the financial
position of the Companies and are at this stage, unable to rule
out store closures and redundancies.

"There is no doubt in our mind that the onset of the global
economic crisis has hit the retail sector particularly hard.  As a
consequence of this the Companies have struggled to secure
funders, which in turn has impacted their ability to generate
sales revenue."

"This has been compounded by poor trading conditions in January
attributed to the adverse weather conditions, which severely
restricted the Companies cash flow.  The Companies have continued
to seek additional finance up until very recently but without
success," Mr. Bouchier added.


BRITISH AIRWAYS: S&P Downgrades Corporate Credit Rating to 'BB-'
----------------------------------------------------------------
Standard & Poor's Ratings Services said that it lowered its long-
term corporate credit rating on U.K.-based British Airways PLC
(BA) to 'BB-' from 'BB'.  The outlook is negative.

At the same time, S&P lowered to 'BB-' from 'BB', its long-term
rating on BA's senior unsecured debt.  The recovery rating on the
senior unsecured debt is unchanged at '4', indicating S&P's
expectation of average (30%- 50%) recovery in the event of payment
default.  In addition, S&P lowered to 'B-' from 'B' the rating on
the non-voting cumulative preferred securities issued by British
Airways Finance (Jersey) L.P. guaranteed by British Airways PLC.
Under S&P's criteria, preferred stock is rated at least three
notches below the corporate credit rating.

All ratings were removed from CreditWatch, where they were placed
with negative implications on Nov. 13, 2009.

"The downgrade reflects S&P's view that the very difficult
industry conditions in 2009 have resulted in a significant
deterioration in the group's financial profile, and that recovery
to a level which S&P considers commensurate with a 'BB' rating for
BA is unlikely in the near term," said Standard & Poor's credit
analyst Stuart Clements.

S&P views the potential merger with Iberia Lineas Aereas de Espana
S.A.  (Iberia; not rated) positively, but believe the benefits
would take time to realize and would be unlikely to offset the
difficult industry conditions and financial constraints on BA's
stand-alone rating in the short term.

In lowering the rating to 'BB-' S&P is factoring in an anticipated
gradual improvement in the operating environment during 2010 and
2011, continued tight cost control, only a modest increase in fuel
prices from current levels, and a maximum pension deficit of
GBP3.7 billion, in line with the trustees' December valuation.
This results in a slow recovery of BA's key credit ratios within
the next two years.  S&P considers a ratio of funds from
operations (FFO) to adjusted debt of at least 12% to be
commensurate with the current 'BB-' rating level for BA and
anticipate that S&P will see a steady recovery to this level by
the end of calendar year 2011.

"The negative outlook reflects S&P's view that industry conditions
will remain very difficult and that any improvement in the
operating environment will be gradual and linked to an improvement
in economic conditions," said Mr. Clements.

Furthermore, the outlook reflects the risk that the recovery may
be even slower than anticipated, or beset by further deterioration
before a sustained improvement is seen.  S&P also factors into the
outlook the risk of a significant increase in fuel prices, the
potential adverse impact of industrial action, and the risk that
BA will be subject to an onerous pension recovery plan.

S&P considers a positive movement in the outlook unlikely, but any
such revision would ultimately be linked to better-than-expected
operating conditions and an accelerated improvement in BA's
financial profile.  At the current rating level S&P factors in a
steady improvement of BA's financial profile with FFO to adjusted
debt exceeding 12% within two years.


CARDIFF FOOTBALL: May Avert Liquidation; Land Deals to Cover Debt
-----------------------------------------------------------------
Owen Gibson at The Guardian reports that the Cardiff City Football
Club is confident of averting liquidation this week with deals on
land surrounding stadium expected to cover debt to Her Majesty's
Revenue and Customs.

The report says it is understood that the chairman, Peter
Ridsdale, paid around GBP1 million of the GBP2.7 million owed to
HMRC.  The club is believed to be confident that the land deal,
together with proceeds from the club's FA Cup run, which continues
away to Chelsea on Saturday, and advance season-ticket sales will
take care of the outstanding debt, the report notes.

The Welsh club faces a winding up petition in the high court
today, Feb. 10, after defaulting in December on a previously
agreed payment schedule, the report discloses.

According to the report, confidence has been boosted after Cardiff
City Council, which owns the freehold, allowed Ridsdale to sell
two areas of land around the stadium to the Capital Retail Park
Partnership for around GBP750,000.  A further sum of up to GBP3
million was raised from a controversial drive to persuade fans to
renew their season tickets early, the report states.

The club has also negotiated a related agreement with the company
of another director, Steve Borley's CMB Engineering, to take on a
commitment to build the House of Sport training facility promised
as part of the deal with the council to construct the new stadium,
the report relates.

"The reasons I believe the winding up order won't be given is
because the shareholders have made substantial loans to the club,
which would they would lose if there was an insolvency," the
report quoted Keith Morgan, a partner and sports finance
specialist at accountants PKF and a member of the Cardiff
Supporters' Trust, as saying.  "I don't believe they could afford
for that to happen.  And I don't believe the council here would
have allowed these land deals without proof the club would get
beyond [to]day with the Revenue."

The report notes even if Cardiff sees off the threat from HMRC
today the club still face severe stress on its balance sheet
between now and the end of the season.  It has a monthly wage bill
of GBP1.2 million and is believed to have already mortgaged the
tranche of Football League money due at the end of the season, the
report says.  The club's most recent accounts, to May 2008, show
it had debts of almost GBP33 million, the report discloses.

Cardiff City Football Club -- http://www.cardiffcityfc.co.uk/--
plays football (soccer) in the Football League Championship
(formerly known as Division 1).


CLARIS LIMITED: Moody's Lowers Rating on EUR15M Notes to 'C'
------------------------------------------------------------
Moody's Investors Service has taken these rating actions on notes
issued by Claris Limited and SGA Societe Generale Acceptance N.V
under the Voltaire transaction.  The notes affected by the rating
action are:

Issuer: Claris Limited - Voltaire Credit-Linked Notes

  -- EUR50M Series 43/2005 Voltaire Floating Rate Credit Linked
     Notes-1, Downgraded to Caa3; previously on Jun 9, 2009 Caa2
     Placed Under Review for Possible Downgrade

  -- EUR15M Series 45/2005 Voltaire Fixed Rate Credit Linked
     Notes, Downgraded to C; previously on Jun 9, 2009 Caa2 Placed
     Under Review for Possible Downgrade

Issuer: SGA Societe Generale Acceptance N.V.  - Voltaire Credit-
Linked Notes

  -- EUR5M Series 9945/05-12 Tranche 1 Voltaire Floating Rate
     Credit-Linked Note, Downgraded to Ca; previously on Jan 27,
     2009 Downgraded to Caa3

Moody's will subsequently withdraw the rating of the notes under
Claris Limited: Series 45/2005.  The withdrawal for Series 45/2005
is a result of the repurchase and subsequent cancellation of the
notes on 21st December 2009.  These notes have been repurchased in
full by the Issuer at a price significantly below the original
nominal value of the notes resulting in losses commensurate with a
C rating.  Moody's views that such repurchase qualifies as a
distressed exchange.

The Voltaire credit linked notes are a synthetic CDO-squared
transaction backed by a managed portfolio of 7 corporate inner
CDOs and a direct exposure to a structured finance portfolio.  The
subordination of Claris 43/2005 series remained at 8.50% as at
closing.  However, the 7.20% subordination as at closing for SGA
9945 has almost been completely written down.  This is largely due
to losses at the corporate inner CDO level, whereby several inners
tranches have suffered write downs and no inner tranches have yet
been written down for Claris 43/2005.

The rating downgrade actions reflect a general deterioration in
the credit quality of the underlying corporate portfolios.  This
credit deterioration can be observed through a decline in the
average credit rating (as measured by an increase in the weighted
average rating factor).  The current WARF (calculated based on the
ratings adjusted for watch status and outlooks) for the 7 inner
corporate portfolios is 1347 versus 843 at the time of the
previous rating action, equivalent to a strong Ba1 pool.  Over 40%
of the referenced corporate portfolios have been downgraded since
Moody's last rating downgrade of the transaction in January 2009.
Since then, the inner corporate portfolios have suffered 5 new
credit events, such as Aiful Corp, Cemex S.A.B de C.V., and CIT
Group Inc. In total, there have been 11 credit events since
closing.

Since closing, the ABS portfolio has amortized by 50% and all
assets remain at Aaa except for two that are on review for
possible downgrade.


DIVALIMIT LTD: In Administration; Hodgsons Seeks Potential Buyers
-----------------------------------------------------------------
Manchester Evening News reports that Divalimit Ltd. has been put
into administration after being hit by the recession.

According to the report, Divalimit will continue to trade as
normal while administrators from Timperley-based Hodgsons try to
find a buyer, which they admit may be a challenge.

The report relates Hodgsons said that it would welcome any
interest from potential buyers.

Cheshire-based Divalimit is the company behind retail brands
including FADS, Texstyle World and Leveys.  It currently has 16
trading stores nationwide, including branches in Salford and
Trafford.


ETHEL AUSTIN: In Administration; MCR On Board
---------------------------------------------
Geoff Bouchier, David Whitehouse and Philip Duffy, Partners at MCR
have been appointed Joint Administrators of Ethel Austin Limited
and Au Naturale Limited on February 8, 2010.

Ethel Austin is one of Britain's value clothing retailers with a
nationwide network of nearly 300 stores extending from Scotland to
the South West, and from Wales to the South East.  The business
was established more than 70 years ago and has grown to become one
of Britain's leading value clothing retailers with a national
presence.

The company's Head Office is at Knowsley on Merseyside, only 10
miles away from where the business was founded by Ethel Austin
herself.  Its sister company is the Au Naturale homewares chain.

Geoff Bouchier, Partner, MCR, stated: "The Joint Administrators
are trading the Companies in Administration in the short term with
a view to finding a purchaser for the businesses as a going
concern.  In the current economic climate there are no guarantees
that purchasers will be found.  We are reviewing the financial
position of the Companies and are at this stage, unable to rule
out store closures and redundancies.

"There is no doubt in our mind that the onset of the global
economic crisis has hit the retail sector particularly hard.  As a
consequence of this the Companies have struggled to secure
funders, which in turn has impacted their ability to generate
sales revenue."

"This has been compounded by poor trading conditions in January
attributed to the adverse weather conditions, which severely
restricted the Companies cash flow.  The Companies have continued
to seek additional finance up until very recently but without
success," Mr. Bouchier added.


KERLING PLC: S&P Raises Corporate Credit Rating to 'B-'
-------------------------------------------------------
Standard & Poor's Ratings Services said that it has raised to 'B-'
from 'CCC' its long-term corporate credit rating on U.K.-based PVC
producer Kerling PLC.  At the same time, S&P removed the ratings
from CreditWatch developing, where they had been placed on
Jan. 15, 2010.  The outlook is stable.

At the same time, S&P assigned these final debt ratings:

* 'B+' to the EUR100 million senior secured revolving credit
  facility.

The recovery rating on this instrument is '1', reflecting Standard
& Poor's expectation of very high (90%-100%) recovery in the event
of a payment default.

* 'B-' to the 10.625% EUR785 million senior secured notes due
  2017, with a recovery rating of '3' reflecting S&P's expectation
  of meaningful recovery in the event of a payment default -- i.e.
  at the low end of the 50%-70% range.

The removal from CreditWatch and assignment of final ratings
reflects the successful bond offer, completed broadly in line with
S&P's assumptions.  The rating on Kerling reflects a "fair"
business risk profile and a "highly leveraged" financial risk
profile.

In S&P's opinion, the main rating driver relates to Kerling's
links with Ineos Group Holdings PLC (CCC+/Negative/--), a sister
company which may face debt restructuring in 2010 or 2011.

"Although Kerling's debts include various restrictive covenants
which aim to mitigate such risks, operational links with Ineos
remain an important risk factor in S&P's view," said Standard &
Poor's credit analyst Lucas Sevenin.

For example, in the event of a default by Ineos Group, the sale of
Ineos ChlorVinyls to Kerling could be subject to legal challenge,
despite a fairness opinion on the valuation.

"The stable outlook reflects S&P's expectation of some resilience
in Kerling's operating profits in 2009 and 2010," said
Mr. Sevenin.

Kerling's ratings are not automatically tied to those of sister
company Ineos, but S&P would probably revise the outlook on
Kerling to negative in case of debt restructuring or default at
Ineos, to reflect the heightened uncertainty.

A downward rating action could occur if Ineos were to default, and
as a result, working capital or operational impacts (including on
some ethylene supplies or intragroup sales) were more negative
than anticipated for Kerling.  Upward rating movement is unlikely
in the near term and would most likely depend on improvement in
credit quality at Ineos.  Material deleveraging at Kerling could
ultimately also result in an upgrade.


LLOYDS BANKING: UK Gov't May Sell Stake in Five Years, Panel Says
-----------------------------------------------------------------
British taxpayers may be able to sell their stakes in Royal Bank
of Scotland Plc and Lloyds Banking Group Plc in five years, with
RBS exiting the government's asset-insurance program in "two to
three years," Robert Hutton at Bloomberg News reports, citing a
report published Tuesday Parliament's cross-party Public Accounts
Committee.

According to Bloomberg, the report also cited Treasury officials
saying they believe they will make a profit when the government's
stakes in the two banks are sold.

Prime Minister Gordon Brown hasn't disclosed a plan for the sale
of the stakes, which were taken in the wake of the 2008 bankruptcy
of Lehman Brothers Holdings Inc., Bloomberg notes.  The
Conservative spokesman on Treasury issues, George Osborne, last
week declined to "commit to a timetable" to the share sale,
Bloomberg relates.

Bloomberg recalls the U.K. bought an 84% interest in Edinburgh-
based RBS for GBP45.5 billion (US$71.1 billion) and 43% of Lloyds
for about GBP20.5 billion.

                 About Lloyds Banking Group PLC

Lloyds Banking Group PLC, formerly Lloyds TSB Group plc,
(LON:LLOY) -- http://www.lloydsbankinggroup.com/-- is a United
Kingdom-based financial services group providing a range of
banking and financial services, primarily in the United Kingdom,
to personal and corporate customers.  The Company operates in
three divisions: UK Retail Banking, Insurance and Investments, and
Wholesale and International Banking.  Its main business activities
are retail, commercial and corporate banking, general insurance,
and life, pensions and investment provision.  The Company also
operates an international banking business with a global footprint
in 40 countries.  Services are offered through a number of brands,
including Lloyds TSB, Halifax, Bank of Scotland, Scottish Widows,
Clerical Medical and Cheltenham & Gloucester.  On January 16,
2009, Lloyds Banking Group plc acquired HBOS plc.

                           *     *     *

As reported by the Troubled Company Reporter-Europe on Nov. 25,
2009, Moody's took rating actions on certain hybrid and junior
subordinated capital instruments of Lloyds Banking Group.  The
actions incorporate the European Commission requirement for Lloyds
to skip coupons from January 31, 2010 to January 30, 2012 on those
hybrid instruments where the terms allow for such a coupon skip.
This requirement was part of Lloyds' restructuring plan formally
approved by the EC on November 18, 2009.  The changes to some of
the ratings also incorporate Moody's revised methodology for
hybrids and subordinated debt.

Non-cumulative preference shares/ preferred securities May Pay --
affirmed at B3, outlook changed to negative -- List A:

Non-cumulative preference shares/ preferred securities Must Pay --
upgraded from B3 to Ba2/Ba3 (negative outlook) -- List B:

Cumulative preferred securities May Pay -- confirmed at Ba2
(negative outlook) -- List C:

Cumulative preferred securities Must Pay -- upgraded to Ba1
(negative outlook) -- List D:

Junior subordinated debt May Pay -- downgraded to Ba2 (negative
outlook) -- List E:

Junior subordinated debt Must Pay -- confirmed at Ba1 / downgraded
to Ba2 (negative outlook) -- List F:

All ratings have a negative outlook.


READER'S DIGEST: Gets Nod for Emergency Funding to UK Unit
----------------------------------------------------------
In light of the recent unexpected indication by the UK Pension
Protection Fund that it will not approve the pension application
filed by the UK unit of Reader's Digest Association, Reader's
Digest and its U.S. units sought and obtained emergency authority
from Judge Drain of the U.S. Bankruptcy Court for the Southern
District of New York to provide limited funding to the UK business
to cover the costs and expenses necessary to assist the foreign
unit in pursuing its options under UK insolvency law.

James H.M. Sprayregen P.C., Esq., at Kirkland & Ellis LLP, in New
York, says the Debtors are seeking expedited relief from the Court
for authority to use estate assets and take certain actions prior
to their emergence from Chapter 11 to:

   (i) address the potential need to discontinue operations of
       their UK business following notice by the UK Pension
       Regulator that it will not consent to the agreed
       settlement of RDA UK's pension liabilities; and

  (ii) establish an escrow arrangement to facilitate the prompt
       closing of the Debtors' pending high yield bond offering,
       the proceeds of which will secure the bonds until the
       release from escrow upon the satisfaction of certain
       conditions, including addressing the situation in the UK.

The Debtors previously sought and obtained authority to enter into
a settlement to resolve certain liabilities -- estimated as of
March 31, 2009 to be approximately GBP109 million or approximately
US$177 million -- related to a defined benefit pension scheme
sponsored by RDA UK, a non-debtor foreign subsidiary.  The Debtors
negotiated the UK Pension Settlement with the primary economic
parties-in-interest with respect to the UK pension scheme deficit,
namely: (i) The Reader's Digest Pension Trustees No. 2 Limited,
which is the current trustee for the UK pension scheme who acts as
a fiduciary for the pensioners, and (ii) the Board of the Pension
Protection Fund, which is the UK regulatory body, or "safety net,"
responsible for making statutory payments to the scheme members
once their pension scheme has "passed" to the PPF following an
insolvency of the scheme's sponsoring company.

As part of the comprehensive settlement of the UK pension
liabilities, the Debtors agreed to provide certain consideration
in satisfaction of RDA UK's liability to the scheme, which the
Debtors believe constitutes reasonably equivalent value and fair
consideration in satisfaction of the liability, and which the
Debtors are willing to fund to avoid a liquidation of RDA UK and
preserve the enterprise value associated with a go-forward UK
business free of its unmanageable and uncapped pension
obligations.

The very predicate for negotiations among all parties-in-interest
to the UK Pension Settlement was to reach an agreement on a fair
contribution to the scheme that would exceed amounts recoverable
in a liquidation scenario -- the only alternative for RDA UK given
its economic situation, Mr. Sprayregen asserts.  He relates that
RDA UK does not currently generate free cash flow sufficient to
cover its pension obligations under a "recovery plan" agreed to
with the UK Trustee in May 2009, which requires annual payments,
in monthly installments, of approximately GBP4.56 million or
US$7.4 million through March 31, 2022.

Under the UK Pension Settlement, the Debtors agreed to fund a one-
time lump sum payment to the scheme of GBP10.9 million or
approximately US$17.6 million, and to issue 33% of the equity of
RDA UK to the scheme, subject to a five-year call option to buy
back the equity for approximately GBP1.8 million.

An express condition precedent to effectiveness of the UK Pension
Settlement is the consent of the UK Pensions Regulator and, more
specifically, that the Regulator agrees to provide "clearance" for
the transaction.  Although the Debtors reasonably believed that
the Regulator's interests would be aligned with the UK Trustee and
the PPF, the Regulator notified RDA UK that it would not consent
to the proposed settlement and that the application for
"clearance" with respect to the proposed settlement had been
denied.

In light of the unanticipated response by the Regulator to the
proposed settlement, the Debtors have determined that it is
appropriate and in the best interests of the estates to take
certain steps in advance of the Debtors' imminent emergence from
bankruptcy.

In the absence of reasonable assurance that the UK pension
liability can be compromised, the Debtors do not believe it is
prudent to provide or have their other foreign subsidiaries
provide continued financial support to fund ongoing operations of
the RDA UK business.

"[T]he business is cash-flow negative in its present state -- a
drain on enterprise assets that is a net borrower of the Debtors'
European cash pooling arrangements -- and remains liable for a
variable, uncapped funding deficit associated with its pension
scheme, which the UK Pension Regulator has now suggested cannot be
compromised," Mr. Sprayregen says.  "Indeed, any financial support
directed at RDA UK would be primarily to maintain the legal
existence of a company whose only economic purpose is to service
an increasingly burdensome pension liability," he continues.

To minimize any collateral damage to the reorganized enterprise
associated with a UK insolvency proceeding, the Debtors believe it
is appropriate to dedicate a limited amount of estate resources or
global enterprise funds to provide short term support to RDA UK to
enable it to evaluate its options and prepare for a potential
insolvency proceeding.  The Debtors also believe the total costs
and expenses they could potentially incur in connection with
facilitating the commencement of an orderly insolvency proceeding
of RDA UK will not exceed US$2 million.

Importantly, Mr. Sprayregen asserts, an insolvency of RDA UK will
also immediately crystallize and cap the amount of the pension
scheme deficit under applicable UK law, which liability would be
addressed in accordance with applicable UK insolvency laws.

                   Sale of Securities

Meanwhile, in anticipation of emergence from Chapter 11, the
Debtors have undertaken significant efforts to obtain credit on
better terms than those provided by the exit facilities in the
Plan, Mr. Sprayregen discloses.  He says the Debtors have been
working with J.P. Morgan Securities Inc., Banc of America
Securities LLC, Credit Suisse (USA) Securities, Inc., Goldman,
Sachs & Co., Moelis & Company LLC, and certain other potential
parties on a purchase and sale of the Securities pursuant to a
purchase agreement, which has been approved by the Court.

Accordingly, in an effort to capture the benefits of their
extensive work to date while simultaneously alleviating any
concerns by potential purchasers of the Securities related to the
short delay of bankruptcy emergence necessary to address the
situation in the UK, the Debtors seek to enter into an escrow
arrangement with the Initial Purchasers whereby the net sale
proceeds from the Securities as well as certain other funds
contributed to the escrow issuer by the Debtors necessary for
redemption of the Securities will be held in escrow until certain
conditions have been satisfied.

The principal terms and conditions of the Escrow Arrangement are:

  -- Escrow Issuer.  The Debtors will establish a wholly-owned,
     unrestricted subsidiary, RD Escrow Corporation, to issue
     the Securities.  The Escrow Issuer will deposit the
     Escrowed Funds into a segregated escrow account until the
     date that the Escrow Conditions are satisfied.  The
     Escrowed Funds will be pledged as security for the benefit
     of the holders of the Securities and upon satisfaction of
     the Escrow Conditions will be used to refinance the debt
     obligations issued to the Debtors' existing lenders upon
     Emergence;

  -- Escrow Agent will be Wilmington Trust Company Corporation;

  -- Escrow Term.  The Escrow Conditions must be satisfied on or
     prior to a date to be agreed, which will be no later than
     three  months from the date of execution of the Escrow
     Agreement;

  -- Escrow Conditions.  The Escrow Agent will not release the
     Escrowed Funds until Reader's Digest submits an officer's
     certificate certifying the satisfaction of certain
     conditions, including a condition with respect to the
     pension liability in the UK and that the Effective Date of
     the Plan has occurred; and

  -- If the Escrow Conditions are not satisfied on or prior to
     the Expiration Date, the Securities will be redeemed at
     100% of the issue price to the purchasers thereof, plus
     accrued and unpaid interest to, but excluding, the date of
     redemption.

Pursuant to the terms of the DIP Credit Agreement and the Final
DIP Order, the Debtors require a waiver to be able to provide
support to RDA UK while it in pursues options under UK insolvency
laws and fund any interest payment or other shortfalls if required
to do so under the terms of the Escrow and Security Agreement.
The Debtors, therefore, seek immediate authority to enter into the
DIP Waiver.

The Debtors believe that their actions and requests for relief are
necessary and appropriate to enable them to capture the benefits
of their recent refinancing efforts, remain on track for an
expeditious emergence from Chapter 11 and simultaneously ensure
minimal enterprise disruption and risk associated with the
administration of the Debtors' UK business.

                         *     *     *

Judge Drain granted the request following an expedited hearing.

The Court authorized, but not directed or required, the Debtors to
take any and all actions necessary and appropriate in the their
sole discretion and business judgment to limit or withdraw any
financial support provided to RDA UK, whether in the form of
access to group cash pooling arrangements, through the group
treasury function or otherwise, and to provide notice to RDA UK of
those intentions, provided that the Debtors will work in good
faith with RDA UK to facilitate an orderly process for the
commencement of any insolvency proceedings.

The Debtors are also authorized (i) to use or transfer estate
funds for the exclusive purpose of paying reasonable fees, costs
or expenses necessary to facilitate the orderly administration or
insolvency proceedings of the estates of RDA UK and its affiliated
businesses under applicable law, and (ii) to take all actions in
furtherance thereof and in connection therewith, provided the
Debtors will not be permitted to spend more than $2 million in
connection therewith.

               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
(http://bankrupt.com/newsstand/or 215/945-7000)


REID AND MCCUTCHEON: Goes Into Liquidation; 8 Jobs Affected
-----------------------------------------------------------
Katie Smyth at Evening Telegraph reports that Reid and McCutcheon
Limited has gone into liquidation with the loss of eight jobs
after 50 years of trading in the city.

According to the report, the company has been hit hard by the
financial downturn.

The report relates Graeme C. Smith, of Henderson Loggie chartered
accountants, was appointed liquidator on January 20 and confirmed
liquidator at a meeting of the creditors on February 2.

"There were eight people working for Reid & McCutcheon and there
were no contract jobs on the books at the time of liquidation,"
the report quoted Henderson Loggie insolvency manager Rose
Crawford as saying.

"Over a period of time they had lost work through no fault of
their own.

"They used to do a lot for the council, but that was withdrawn as
the council started doing it all in-house.

"That was the same situation for a lot of businesses, though."

Reid and McCutcheon Limited is a Dundee-based glaziers firm.


ROYAL BANK: UK Gov't May Sell Stake in Five Years, Panel Says
-------------------------------------------------------------
British taxpayers may be able to sell their stakes in Royal Bank
of Scotland Plc and Lloyds Banking Group Plc in five years, with
RBS exiting the government's asset-insurance program in "two to
three years," Robert Hutton at Bloomberg News reports, citing a
report published Tuesday Parliament's cross-party Public Accounts
Committee.

According to Bloomberg, the report also cited Treasury officials
saying they believe they will make a profit when the government's
stakes in the two banks are sold.

Prime Minister Gordon Brown hasn't disclosed a plan for the sale
of the stakes, which were taken in the wake of the 2008 bankruptcy
of Lehman Brothers Holdings Inc., Bloomberg notes.  The
Conservative spokesman on Treasury issues, George Osborne, last
week declined to "commit to a timetable" to the share sale,
Bloomberg relates.

Bloomberg recalls the U.K. bought an 84% interest in Edinburgh-
based RBS for GBP45.5 billion (US$71.1 billion) and 43% of Lloyds
for about GBP20.5 billion.

                            About RBS

The Royal Bank of Scotland Group plc (NYSE:RBS) --
http://www.rbs.com/-- is a holding company of The Royal Bank of
Scotland plc (Royal Bank) and National Westminster Bank Plc
(NatWest), which are United Kingdom-based clearing banks.  The
company's activities are organized in six business divisions:
Corporate Markets (comprising Global Banking and Markets and
United Kingdom Corporate Banking), Retail Markets (comprising
Retail and Wealth Management), Ulster Bank, Citizens, RBS
Insurance and Manufacturing.  On October 17, 2007, RFS Holdings
B.V. (RFS Holdings), a company jointly owned by RBS, Fortis N.V.,
Fortis SA/NV and Banco Santander S.A. (the Consortium Banks) and
controlled by RBS, completed the acquisition of ABN AMRO Holding
N.V. (ABN AMRO).  In July 2008, the company disposed its entire
interest in Global Voice Group Ltd.

                           *     *     *

As reported by the Troubled Company Reporter-Europe on Dec. 22,
2009, Fitch Ratings upgraded The Royal Bank of Scotland Group's
(RBS Group) and The Royal Bank of Scotland's Individual Ratings to
'D/E' from 'E' and removed the Rating Watch Positive.  The upgrade
of the Individual Ratings reflects improvements in the group's
capital combined with some progress in restructuring the balance
sheet.


ROYAL BANK: Payments to Investment Bankers Lower Than Rivals
------------------------------------------------------------
Megan Murphy, Sharlene Goff and George Parker at The Financial
Times report that Royal Bank of Scotland will pay its top
investment bankers a substantially lower proportion of its
revenues than rivals.

The FT relates RBS, 84% of which is owned by the British taxpayer,
has been locked in negotiations with the Treasury for months over
how much it can pay staff in its global banking and markets
division.

According to the FT, it is understood that the discussions center
on the so-called compensation ratio, or the amount of salary and
bonuses paid to RBS bankers and traders as a percentage of their
total earnings.

The FT notes people close to the talks said UK Financial
Investments, the body that manages the government's stake in RBS,
was insisting that the bank's compensation ratio should be
significantly lower than that of Goldman Sachs, which announced
last month that it had slashed its compensation ratio to 36%, and
other global competitors, as a way of addressing the prevailing
mood on pay.

Citing people close to the discussions, the FT says RBS would
reveal an even lower figure, unlikely to be higher than 30%, when
it reported its full-year results on February 25.

Before the financial crisis, investment banks typically
distributed between 40% and 50% of net revenues to staff, the FT
notes.

                            About RBS

The Royal Bank of Scotland Group plc (NYSE:RBS) --
http://www.rbs.com/-- is a holding company of The Royal Bank of
Scotland plc (Royal Bank) and National Westminster Bank Plc
(NatWest), which are United Kingdom-based clearing banks.  The
company's activities are organized in six business divisions:
Corporate Markets (comprising Global Banking and Markets and
United Kingdom Corporate Banking), Retail Markets (comprising
Retail and Wealth Management), Ulster Bank, Citizens, RBS
Insurance and Manufacturing.  On October 17, 2007, RFS Holdings
B.V. (RFS Holdings), a company jointly owned by RBS, Fortis N.V.,
Fortis SA/NV and Banco Santander S.A. (the Consortium Banks) and
controlled by RBS, completed the acquisition of ABN AMRO Holding
N.V. (ABN AMRO).  In July 2008, the company disposed its entire
interest in Global Voice Group Ltd.

                           *     *     *

As reported by the Troubled Company Reporter-Europe on Dec. 22,
2009, Fitch Ratings upgraded The Royal Bank of Scotland Group's
(RBS Group) and The Royal Bank of Scotland's Individual Ratings to
'D/E' from 'E' and removed the Rating Watch Positive.  The upgrade
of the Individual Ratings reflects improvements in the group's
capital combined with some progress in restructuring the balance
sheet.


VANTIS BUSINESS: Says Still Afloat Despite Unpaid Stanford Fees
---------------------------------------------------------------
Vantis Business Recovery Services, the UK company involved in the
recovery of the assets of Robert Allen Stanford in Antigua, is
insisting that it's not in any financial trouble, although it is
owed significant amounts of money related to the liquidation of
Stanford International Bank Limited, Caribbean360.com reports.

According to the report, Vantis Chief Executive Officer Paul
Jackson, while confirming that there was outstanding money owed,
said that it is not reliant on receiving those funds.  "When
Vantis plc took on the SIBL case, we were aware that it would be a
protracted and demanding task.  We had expected to receive fees
sooner, but it became clear there would be delays some time ago
and the absence of fees being received in the six months to 31st
October 2009 as recently reported was not a surprise," the report
quoted Mr. Jackson as saying.  "Vantis remains a secure business,
its business advisory and business recovery divisions are both
profitable and cash generative," he added.

SIBL Liquidator Hamilton-Smith, the report notes, said that his
main concern remained for the creditors of SIBL on whose behalf he
and Wastell continue to work.  "Misinformation pertaining to our
company is unhelpful and only acts to cause unnecessary
distraction," the report quoted Mr. Hamilton-Smith as saying.

The report, citing a company statement, notes that further
communications regarding asset recovery are expected to be issued
within the next few days.

As reported in the Troubled Company Reporter-Latin America on
February 8, 2010, Caribbean360.com said that Business
Recovery appears to be facing cash flow problems because SIBL
hasn't been paid for its work in the Stanford matter.  According
to the report, the firm's interim results released have revealed
that auditors Ernst & Young warned that uncertainties from
receiving funds from its work at Stanford, plus cash flow and cost
reduction initiatives, put doubt on its ability to continue as a
"going concern".  The report elated that the lack of payment has
contributed to Vantis' first-half pre-tax loss of GBP10.7 million
(US$16.9 million), compared to the GBP4.5 million (US$7.1 million)
it recorded a year earlier.

                    About Stanford International Bank

Domiciled in Antigua, Stanford International Bank Limited --
http://www.stanfordinternationalbank.com/-- is a member of
Stanford Private Wealth Management, a global financial services
network with US$51 billion in deposits and assets under management
or advisement.  Stanford Private Wealth Management serves more
than 70,000 clients in 140 countries.

On February 16, 2009, the United States District Court for the
Northern District of Texas, Dallas Division, signed an order
appointing Ralph Janvey as receiver for all the assets and records
of Stanford International Bank, Ltd., Stanford Group Company,
Stanford Capital Management, LLC, Robert Allen Stanford, James M.
Davis and Laura Pendergest-Holt and of all entities they own or
control.  The February 16 order, as amended March 12, 2009,
directs the Receiver to, among other things, take control and
possession of and to operate the Receivership Estate, and to
perform all acts necessary to conserve, hold, manage and preserve
the value of the Receivership Estate.

The U.S. Securities and Exchange Commission, on Feb. 17, charged
before the U.S. District Court in Dallas, Texas, Mr. Stanford and
three of his companies for orchestrating a fraudulent, multi-
billion dollar investment scheme centering on an US$8 billion
Certificate of Deposit program.

A criminal case was pursued against him in June before the U.S.
District Court in Houston, Texas.  Mr. Stanford pleaded not guilty
to 21 charges of multi-billion dollar fraud, money-laundering and
obstruction of justice.  Assistant Attorney General Lanny Breuer,
as cited by Agence France-Presse News, said in a 57-page
indictment that Mr. Stanford could face up to 250 years in prison
if convicted on all charges.  Mr. Stanford surrendered to U.S.
authorities after a warrant was issued for his arrest on the
criminal charges.

The criminal case is U.S. v. Stanford, H-09-342, U.S. District
Court, Southern District of Texas (Houston).  The civil case is
SEC v. Stanford International Bank, 3:09-cv-00298-N, U.S. District
Court, Northern District of Texas (Dallas).

                            About Vantis

Vantis Business Recovery Services --- http://www.vantisplc.com/--
- is a trading division of Vantis Group Ltd, which is regulated by
the Institute of Chartered Accountants in England and Wales for a
range of investment business activities.  Vantis Group Ltd is a
Vantis plc group company.

Vantis is the AIM listed UK accounting, tax and business advisory
group.


* UK: SME Owners Opt for Personal Insolvency to Keep Firms Afloat
-----------------------------------------------------------------
Roland Gribben at The Daily Telegraph, citing a CreditPal survey,
reports that a growing number of small business owners are opting
for personal insolvency in a desperate attempt to keep their
company afloat.

According to the report, the greater use of credit cards is just
one of the alternative finance routes being used by small business
owners as they struggle to raise bank finance on favorable terms.
Loans from friends and family and asset sales have also made a
contribution, with the result that over the last two years around
GBP45 billion has been raised by small companies from non-banking
sources, the report says citing data from CreditPal.

The report notes researchers believe the "fear factor" has played
a part in accelerating the switch from traditional bank and
building society fund-raising avenues.

"Thousands of small and medium-sized enterprises (SME) have been
forced to rely on credit to survive in the last two years as a
result of disruptions to business cashflow," the report quoted
Chris Poll, chief executive of CreditPal, as saying.

"We believe we have identified an SME fear factor at play, with
companies more likely to seek finance from non-traditional sources
because they are scared of even applying for finance from banks
and building societies."


                            *********

Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par.  Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable.  Those sources may not,
however, be complete or accurate.  The Monday Bond Pricing table
is compiled on the Friday prior to publication.  Prices reported
are not intended to reflect actual trades.  Prices for actual
trades are probably different.  Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind.  It is likely that some entity
affiliated with a TCR editor holds some position in the issuers'
public debt and equity securities about which we report.

Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than US$3 per
share in public markets.  At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled.  Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets.  A company may establish reserves on its balance sheet for
liabilities that may never materialize.  The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.

A list of Meetings, Conferences and Seminars appears in each
Thursday's edition of the TCR. Submissions about insolvency-
related conferences are encouraged.  Send announcements to
conferences@bankrupt.com

Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals.  All titles are
available at your local bookstore or through Amazon.com.  Go to
http://www.bankrupt.com/booksto order any title today.

                            *********


S U B S C R I P T I O N   I N F O R M A T I O N

Troubled Company Reporter -- Europe is a daily newsletter co-
published by Bankruptcy Creditors' Service, Inc., Fairless
Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick,
Maryland USA.  Valerie C. Udtuhan, Marites O. Claro, Rousel Elaine
C. Tumanda, Joy A. Agravante and Peter A. Chapman, Editors.

Copyright 2010.  All rights reserved.  ISSN 1529-2754.

This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers.

Information contained herein is obtained from sources believed to
be reliable, but is not guaranteed.

The TCR Europe subscription rate is US$625 per half-year,
delivered via e-mail.  Additional e-mail subscriptions for members
of the same firm for the term of the initial subscription or
balance thereof are US$25 each.  For subscription information,
contact Christopher Beard at 240/629-3300.


                 * * * End of Transmission * * *