TCREUR_Public/100526.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, May 26, 2010, Vol. 11, No. 102

                            Headlines



A U S T R I A

GLOUCESTER ENGINEERING: Parent In Debt Refinancing Talks


C Z E C H   R E P U B L I C

LENOXA: Declared Bankrupt by Liberec Court


E S T O N I A

THULEMA AS: Files for Bankruptcy Over Liquidity Problems


G E R M A N Y

ARCANDOR AG: Karstadt May Get Enough Tax Waivers to Allow Sale
ARCANDOR AG: Triton Disappointed With Karstadt Sale Talks
ARCANDOR AG: Karstadt Workers Prefer HighStreet; Berggruen Bids


G R E E C E

* GREECE: Most Likely Will Need to Restructure Debt


I R E L A N D

QUINN INSURANCE: Liberty Mutual Eyes Takeover to Expand EU Ops


R U S S I A

MECHEL OAO: Moody's Assigns Corporate Family Rating at 'B1'
SSMO CJSC: S&P Assigns 'B' Rating on Senior Unsecured Notes


S L O V A K   R E P U B L I C

AIR SLOVAKIA: Administrator Files Bankruptcy Proposal


S P A I N

CAIXA GIRONA: Fitch Downgrades Individual Rating to 'C/D'
CAIXA LAIETANA: Fitch Retains Negative Watch on 'C/D' Rating
CAIXA PENEDES: Fitch Retains RWN on 'BB'-Rated Preference Shares
CAJA DE AHORROS: Fitch Puts 'BB+' Issuer Rating on Positive Watch


U N I T E D   K I N G D O M

BRITISH AIRWAYS: Posts GBP531MM Loss for Year Ended March 31
LIVESEY: In Administration; P&A Partnership Named Administrator
LOYD'S NURSING: 64 Southern Cross Homes Put Up for Sale
MAGAZINE MARKETING: In Administration; MCR Appointed Administrator
ROYAL BANK: Nears Pakistan Unit Sale Deal

VISTEON CORP: Reaches Stipulation on UK Pension Claim Withdrawal


X X X X X X X X

* S&P Puts Ratings on Senior Unsec. Debts of 22 Governments





                         *********


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A U S T R I A
=============


GLOUCESTER ENGINEERING: Parent In Debt Refinancing Talks
--------------------------------------------------------
Dan Hockensmith at Plastic News reports that Gloucester
Engineering, the parent company of Gloucester Engineering Europe,
is in talks with private equity firm Blue Wolf Capital Fund of New
York on a refinancing package for some of its unpaid debt.

According to the report, a source close to the negotiations said
May 18 that a deal is in the works, but could not give details.

                           Settlement

Separately, the report relates two Gloucester creditors and its
insolvent European subsidiary filed in US Bankruptcy Court in
Boston to oppose settlements the company has reached with two of
its creditors.

The report recalls in March, three Gloucester creditors filed an
involuntary Chapter 7 bankruptcy petition against the firm.  Since
then, two creditors -- Hub Technologies and Plastifar -- reached
agreement with Gloucester and moved to dismiss the bankruptcy
petition, the report recounts.

According to the report, attorneys for Hub and Plastifar argued
that with Gloucester having more than US$13 million (EUR10.5
million) in secured debt, unsecured creditors were unlikely to
recover anything in liquidation.

THG, which is owed about US$68,000 (EUR54,666) by Gloucester, and
National Metals Finishing, which is owed about US$173,000
(EUR139,100), objected to the Hub and Plastifar deal on the
grounds that it is unfair to other unsecured creditors, the report
notes.

                           Embezzlement

The report relates Raoul Wagner, the bankruptcy trustee appointed
for Gloucester Engineering's subsidiary by the Austrian Commercial
Court in Vienna, argued in his filing that the U.S. parent company
illegally transferred about EUR608,000 from Gloucester Engineering
Europe late in 2009 to pay its debts.  Mr. Wagner on May 7 lodged
a complaint with Austrian prosecutors seeking criminal charges
against Gloucester Chairman John Sharood for "embezzlement,
grossly negligent impairment of creditor interests and fraudulent
bankruptcy offense," the report discloses, citing the bankruptcy
court filing.  The report notes Mr. Wagner said money transfers
left Gloucester Engineering Europe -- which has since been
liquidated -- with only about EUR373,000 in its accounts against
about EUR847,000 in debt.

Gloucester Engineering is a blown and cast film machinery maker in
Gloucester, Massachusetts.


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C Z E C H   R E P U B L I C
===========================


LENOXA: Declared Bankrupt by Liberec Court
------------------------------------------
CTK, citing the insolvency register on www.justice.cz, reports
that the Liberec court on Monday declared Lenoxa bankrupt.
The decision can be appealed to the High Court in Prague, the
report notes.

According to the report, the company's owners proposed
reorganization in which creditors are likely to have a better
chance of getting their money back.

Lenoxa is a Liberec-based heat supplier.


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


THULEMA AS: Files for Bankruptcy Over Liquidity Problems
--------------------------------------------------------
Ott Ummelas at Bloomberg News reports that AS Thulema, filed for
bankruptcy citing liquidity problems and a "difficult" market
situation.

Thulema filed a request with the Harju County court to announce
its bankruptcy after it was unable to stick to its debt
restructuring plan approved in court in October, Bloomberg notes,
citing a statement from the company on the Baltic News Service Web
site.

According to Bloomberg, the statement said Thulema's debts total
EEK40.2 million (US$3.2 million) and assets amount to EEK38.9
million.

Based in Tallinn, AS Thulema is one of the largest furniture
makers in Estonia.


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


ARCANDOR AG: Karstadt May Get Enough Tax Waivers to Allow Sale
--------------------------------------------------------------
Karstadt, the department-store unit of insolvent German retailer
Arcandor AG, will probably receive enough tax waivers from German
cities to allow a sale of the unit, Cornelius Rahn and Holger
Elfes at Bloomberg News report citing, Thomas Schulz, a spokesman
for the insolvency administrator.

According to Bloomberg, Mr. Schulz said the city of Cologne has
signaled it will forfeit its tax claims against the company.

On May 14, 2010, the Troubled Company Reporter-Europe, citing
Bloomberg News, reported that the cities of Bielefeld and Erding
rejected the administrator's request to waive the claims on taxes
they are owed by Karstadt, endangering Karstadt's sale.  According
to Bloomberg, Mr. Schulz said under insolvency rules, 98% of a
total of 94 cities in which Karstadt have stores have to accept
the request to make the sale possible.

                         About Arcandor AG

Germany-based Arcandor AG (FRA:ARO) -- http://www.arcandor.com/--
formerly KarstadtQuelle AG, is a tourism and retail group.  Its
three core business areas are tourism, mail order services and
department store retail.  The Company's business areas are covered
by its three operating segments: Thomas Cook, Primondo and
Karstadt.  Thomas Cook Group plc is a tour operator with
operations in Europe and North America, set up as a result of a
merger between MyTravel and Thomas Cook AG.  It also operates the
e-commerce platform, Thomas Cook, supporting travel services.
Primondo has a portfolio of European universal and specialty mail
order companies, including the core brand Quelle.  Karstadt
operates a range of department stores, such as cosmopolitan
stores, including KaDeWe (Kaufhaus des Westens), Karstadt
Oberpollinger and Alsterhaus; Karstadt brand department stores;
Karstadt sports department stores, offering sports goods in a
variety of retail outlets, and a portal, karstadt.de that offers
online shopping, among others.

As reported by the Troubled Company Reporter-Europe, a local court
in Essen formally opened insolvency proceedings for Arcandor on
September 1, 2009.  The proceedings started for the Arcandor
holding company and for 14 units, including the Karstadt
department-store chain and Primondo mail-order division.

Arcandor filed for bankruptcy protection after the German
government turned down its request for loan guarantees.  On
June 8, 2009, the government rejected two applications for help by
the company, which employs 43,000 people.  The retailer sought
loan guarantees of EUR650 million (US$904 million) from Germany's
Economy Fund program.  It also sought a further EUR437 million
from a state-owned bank.


ARCANDOR AG: Triton Disappointed With Karstadt Sale Talks
---------------------------------------------------------
Tom Mulier at Bloomberg News reports that Triton, a bidder for
Arcandor AG's German department-store chain Karstadt, said
progress on talks has been "disappointing" and an agreement might
not be reached.

According to Bloomberg, John Mengers, a spokesman for Triton at
Communications & Network Consulting AG in Munich, said Friday
the private equity firm is no longer holding negotiations with
administrator Klaus Hubert Goerg, though it will maintain its
offer for the unit until a May 28 deadline.

"There needs to be some movement on their side," Bloomberg quoted
Mr. Mengers as saying. "We are rethinking our position.  If there
will be no deal, we will do something else.  We are not forced
into this."

Separately, Holger Elfes at Bloomberg News, citing Frankfurter
Allgemeine Zeitung, reports that Triton is no longer examining
Karstadt's accounts.

As reported by the Troubled Company Reporter-Europe on May 19,
2010, Triton was reassessing whether to buy Karstadt, as its plan
may become "obsolete" after talks with the Ver.di trade union
failed.  Bloomberg disclosed Ver.di said talks with the potential
buyer ended without agreement because Triton insisted on further
wage cuts.  Workers at Karstadt accepted pay cuts worth EUR150
million (US$186 million) and rejected further concessions,
according to Bloomberg.

                        About Arcandor AG

Germany-based Arcandor AG (FRA:ARO) -- http://www.arcandor.com/--
formerly KarstadtQuelle AG, is a tourism and retail group.  Its
three core business areas are tourism, mail order services and
department store retail.  The Company's business areas are covered
by its three operating segments: Thomas Cook, Primondo and
Karstadt.  Thomas Cook Group plc is a tour operator with
operations in Europe and North America, set up as a result of a
merger between MyTravel and Thomas Cook AG.  It also operates the
e-commerce platform, Thomas Cook, supporting travel services.
Primondo has a portfolio of European universal and specialty mail
order companies, including the core brand Quelle.  Karstadt
operates a range of department stores, such as cosmopolitan
stores, including KaDeWe (Kaufhaus des Westens), Karstadt
Oberpollinger and Alsterhaus; Karstadt brand department stores;
Karstadt sports department stores, offering sports goods in a
variety of retail outlets, and a portal, karstadt.de that offers
online shopping, among others.

As reported by the Troubled Company Reporter-Europe, a local court
in Essen formally opened insolvency proceedings for Arcandor on
September 1, 2009.  The proceedings started for the Arcandor
holding company and for 14 units, including the Karstadt
department-store chain and Primondo mail-order division.

Arcandor filed for bankruptcy protection after the German
government turned down its request for loan guarantees.  On
June 8, 2009, the government rejected two applications for help by
the company, which employs 43,000 people.  The retailer sought
loan guarantees of EUR650 million (US$904 million) from Germany's
Economy Fund program.  It also sought a further EUR437 million
from a state-owned bank.


ARCANDOR AG: Karstadt Workers Prefer HighStreet; Berggruen Bids
---------------------------------------------------------------
Holger Elfes at Bloomberg News, citing Deutschlandradio, reports
that Karstadt's workers prefer Goldman Sachs Group Inc.'s
Highstreet partnership or Berggruen Holdings Ltd. investment
company as buyers of Arcandor AG's insolvent German department-
store chain.

According to Bloomberg, Margret Moenig-Raane, vice chairman of the
Ver.di labor union, as cited by the German radio station, said the
union opposes a bid by Triton, which may lead to more firings than
a purchase by another investor.

                              Triton

As reported by the Troubled Company Reporter-Europe on May 19,
2010, Triton was reassessing whether to buy Karstadt, as its plan
may become "obsolete" after talks with the Ver.di trade union
failed.  Bloomberg disclosed Ver.di said talks with the potential
buyer ended without agreement because Triton insisted on further
wage cuts.  Workers at Karstadt accepted pay cuts worth EUR150
million (US$186 million) and rejected further concessions,
according to Bloomberg.

                            Berggruen

AS reported by the Troubled Company Reporter-Europe on May 25,
2010, Reuters said Nicolas Berggruen made an offer to buy Karstadt
a week before an extended deadline for bids runs out.  Dow Jones
Newswires, citing Handelsblatt, disclosed that Berggruen Holding
Ltd., an investment vehicle owned by private investor Mr.
Berggruen, has submitted a detailed bid for all of Karstadt's
business activities.  According to Dow Jones, the Handelsblatt
report, citing a spokesman for Berggruen Holding, said the company
hopes to close the deal within the coming weeks although it is
expected that Karstadt's landlords will participate in the future
restructuring of the company and that the seven remaining
municipalities will agree to write-off the department store's
commercial tax debts.

                            Highstreet

Christiaan Hetzner at Reuters, citing Bild am Sonntag, reported
that Highstreet, a finance consortium that owns most of the
property of Karstadt, will submit a bid for all 120 department
stores after reaching a deal with unions over wage concessions.
According to Reuters, the German Sunday weekly disclosed
Highstreet, a vehicle led by Goldman Sachs, agreed to give the
25,000 strong workforce a stake of roughly 15% in Karstadt, making
it the frontrunner in the bidding war.

                         About Arcandor AG

Germany-based Arcandor AG (FRA:ARO) -- http://www.arcandor.com/--
formerly KarstadtQuelle AG, is a tourism and retail group.  Its
three core business areas are tourism, mail order services and
department store retail.  The Company's business areas are covered
by its three operating segments: Thomas Cook, Primondo and
Karstadt.  Thomas Cook Group plc is a tour operator with
operations in Europe and North America, set up as a result of a
merger between MyTravel and Thomas Cook AG.  It also operates the
e-commerce platform, Thomas Cook, supporting travel services.
Primondo has a portfolio of European universal and specialty mail
order companies, including the core brand Quelle.  Karstadt
operates a range of department stores, such as cosmopolitan
stores, including KaDeWe (Kaufhaus des Westens), Karstadt
Oberpollinger and Alsterhaus; Karstadt brand department stores;
Karstadt sports department stores, offering sports goods in a
variety of retail outlets, and a portal, karstadt.de that offers
online shopping, among others.

As reported by the Troubled Company Reporter-Europe, a local court
in Essen formally opened insolvency proceedings for Arcandor on
September 1, 2009.  The proceedings started for the Arcandor
holding company and for 14 units, including the Karstadt
department-store chain and Primondo mail-order division.

Arcandor filed for bankruptcy protection after the German
government turned down its request for loan guarantees.  On
June 8, 2009, the government rejected two applications for help by
the company, which employs 43,000 people.  The retailer sought
loan guarantees of EUR650 million (US$904 million) from Germany's
Economy Fund program.  It also sought a further EUR437 million
from a state-owned bank.


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


* GREECE: Most Likely Will Need to Restructure Debt
---------------------------------------------------
Jennifer Ryan and Andrea Catherwood at Bloomberg News report that
Arnab Das of Roubini Global Economic said there is a "very strong
probability" that Greece will need to restructure its debt.

"We think it's a very strong probability that countries
such as Greece are going to have to restructure their debt to
survive within the euro area," Mr. Das told Bloomberg TV on
Friday.

"To us, Greece looks like a case of illiquidity and insolvency,"
Bloomberg quoted Mr. Das as saying. "It's looking pretty dire."


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I R E L A N D
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QUINN INSURANCE: Liberty Mutual Eyes Takeover to Expand EU Ops
--------------------------------------------------------------
Simon Carswell and Mary Carolan at The Irish Times report that
Liberty Mutual, one of the largest US insurance companies, has
said it is interested in buying Quinn Insurance as a means of
significantly expanding its operations in Europe.

According to the Irish Times, Liberty Mutual said that it had
contacted the joint administrators of Quinn Insurance, Michael
McAteer and Paul McCann of accountants Grant Thornton, to express
an interest in taking over the troubled company.

The Irish Times says the company has no significant overlapping
business with Quinn Insurance in Ireland or Britain.  If a
takeover proceeded, the sale could leave the Cavan-based insurer
intact and minimize further job losses beyond the 902 sought from
the 2,450-strong workforce, the Irish Times states.

The Irish Times relates the administrators told the High Court
Thursday that a sale was not their priority "at this time" but
that they had held talks with the insurer's owner, Quinn Group, on
a joint approach to any proposed sale.  According to the Irish
Times, this could lead to the separate sale of the firm's health
insurance and general insurance businesses or both combined.  The
administrators plan to appoint a global merchant bank over the
coming weeks to manage a sale process and assess interest among
international companies, the Irish Times discloses.

                           Liabilities

The Irish Times relates in a report presented to the president of
the High Court, Mr. Justice Nicholas Kearns, the administrators
said a review by auditors had found that Quinn Insurance had
under-provided for liabilities by EUR68 million last year.  The
court was told that the firm made a loss of EUR47 million in 2009,
but that many parts of the business remained at trading levels
before the appointment of the administrators in March, the Irish
Times notes.

                               Costs

The Irish Times says the administrators are seeking costs of
EUR565,000 for work carried out between March 30 and April 30, and
want to invoice the firm monthly to the end of July for sums not
exceeding EUR1.8 million.  They want to pay their solicitors
McCann Fitzgerald EUR120,000 and their public relations firm Hume
Brophy EUR50,000 for work between March 30 and April 30 and a
further EUR10,000 a month from this month to July, the Irish Times
discloses.  Mr. Justice Kearns said he wanted independent material
on which he could assess these costs, the Irish Times notes.

As reported by the Troubled Company Reporter-Europe on April 19,
2010, The Financial Times said Quinn Insurance was put into
administration on April 15 after Sean Quinn abandoned attempts to
keep control of the family-owned company.

Quinn Insurance is owned by Sean Quinn, Ireland's richest man, and
his family.  The company has just more than 20% of the motor and
health insurance market in Ireland.  It has more than one million
customers in the country.  Employing almost 2,800 people in
Britain and Ireland, it was founded in 1996 and entered the UK
market in 2004, according to The Times.


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R U S S I A
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MECHEL OAO: Moody's Assigns Corporate Family Rating at 'B1'
-----------------------------------------------------------
Moody's Investors Service has assigned a B1 corporate family
rating to Mechel and a B1 Probability of Default Rating.
Concurrently, Moody's Interfax Rating Agency has assigned an A2.ru
national scale rating to the company.  Moscow-based Moody's
Interfax is majority-owned by Moody's, a leading global rating
agency.  The outlook on the ratings is stable.  This is the first
time that Moody's rates the company.

The CFR of Mechel's reflects: 1) the company's role as a leading
domestic steel and coal producer with strong positions in key
businesses including production of specialty steel and alloys;
2) the company's largest coal reserve base in Russia; 3) favorable
business profile results from high degree of vertical integration
which ensures the stable production and to some extent preserves
operating margins; the company has internal captive demand for
coking coal and iron ore in steel production and for steam coal --
in power generation; 4) strategic location of its key assets close
to the major steel consuming markets as well as the ownership and
control of essential infrastructure including ports, rolling stock
and power plants which provide guaranteed access to export
markets; 5) combination of underground and open pit mining
operations with no significant concentration on any single mine
mitigates the risks of interruption in coal production; 6) good
disclosure and adequate corporate governance supported by NYSE
listing.

The rating also reflects the facts that Mechel's operating
performance during 2008-2009 financial crisis was materially
affected with modest results in the last financial year though
largely in line with other similarly rated Russian peers.  The
falling prices and volumes were partly mitigated by relatively low
cost base and ability to re-direct sales of coal from domestic to
the export markets.  On the positive side, Moody's also notes that
the stretched liquidity position that prevailed during part of
2009 was eventually improved thanks to extension of Yakutugol and
Oriel loans as well as a new Gazprombank facilities and RUR bond.

The company has large capital expenditures planned for the next
few years, which would strengthen the business profile of the
company though could weigh on the financial position if not
carefully implemented.  Moody's believes that strategic
acquisitions are largely completed and the projects' related capex
is to some extent discretional as it mostly relates to capacity
expansion and mine development.  In the medium term successful
development of coal mining assets would improve the company's
positions as the largest metallurgical coal producer in Russia.

On the other hand, the CFR of Mechel also reflects: 1) aggressive
capital structure with high leverage and modest CF metrics which
will take some time before it improves; 2) the company's exposure
to the cyclicality of the steel and mining industry which was
recently evidenced by the worst downturn in decades; 3) on-going
refinancing risk with sizable repayments in 2010 and 2011 and a
liquidity profile depending on renewing or extending funding to
the extent that the expansion capex plans are carried out; 4) the
fact that future green field developments of Elga deposit would
require significant resources and provide technical and operating
challenges; 5) expectations of substantial capital expenditures
related to the current activity of steel assets which would
further negatively affect FCF generation; 6) possible negative
administrative/regulatory consequences for the Russian mining
sector following the recent incidents at the mining sector; 7) the
company's ownership concentration adding uncertainty and less
predictability to its financial strategy and dividend policy.

The stable outlook indicates Moody's expectations that the 2010
performance of the company should support the current rating and
would demonstrate positive trends in financial metrics especially
reduction in leverage and improved cash flow generation.  For an
upgrade Moody's would like to see the debt/EBITDA ratio moving
toward 2.5x and FCF/Debt becoming positive over the next 2 years.
If the company's leverage not converging towards 3x and (CFO --
Dividends)/Debt not moving towards 20 % in the next 18 months that
might trigger the downward pressure on the rating.

The Company is a vertically integrated mining and metals company.
Its business includes four segments: mining, steel, ferroalloy and
power.  The Company produces coal, iron ore concentrate, nickel,
steel, ferrochrome, ferrosilicon, rolled products, hardware, heat
and electric power.  Mechel products are sold domestically and
internationally.  The Group's subsidiaries are located in 12
regions of Russia, Kazakhstan, USA, Romania, Bulgaria and
Lithuania.  Mechel owns three trade ports and a transport
operator.

In 2009, the company reported revenue of US$5.8 billion (42%
decline Y-o-Y) and EBITDA of US$1 billion (51% decrease Y-o-Y).

The company is majority owned by CEO Mr. Zyuzin who controls
66.76% of voting shares.  After the IPO the company has 33.24% of
free float.


SSMO CJSC: S&P Assigns 'B' Rating on Senior Unsecured Notes
-----------------------------------------------------------
Standard & Poor's Rating Services said that it assigned its 'B'
global scale issue rating and 'ruA' Russia national scale rating
to the proposed Russian ruble (RUB) 2 billion (US$65 million)
senior unsecured notes to be issued by Russia-based construction
and development group CJSC SSMO LenSpecSMU (B/Stable/B, Russia
national scale 'ruA').  S&P also assigned a recovery rating of '4'
to the notes, indicating S&P's expectation of average (30%-50%)
recovery in the event of a payment default.  The corporate credit
ratings on LSS are unchanged.

The issue rating on the US$100 million (US$8.1 million currently
outstanding) credit-linked notes issued by Golden Ring Finance
S.A. (not rated) and guaranteed by LSS, is unchanged at 'B', the
same level as the corporate credit rating on LSS.  The recovery
rating on these notes is also unchanged, at '4', indicating S&P's
expectation of average (30%-50%) recovery in the event of a
payment default.

The issue rating on LSS' existing RUB2 billion unsecured notes due
2012 is unchanged at 'B', the same level as the corporate credit
rating on LSS.  The recovery rating on these notes is also
unchanged, at '4', indicating S&P's expectation of average (30%-
50%) recovery in the event of payment default.

The rating on the proposed notes is based on preliminary
information and is subject to S&P's satisfactory review of the
final documentation.  In the event of any changes to the amount or
terms of the bond, the recovery and issue ratings will be subject
to further review.

                        Recovery Analysis

The proposed RUB2 billion notes are an unsecured obligation of
LSS.  S&P assumes that these notes rank pari passu with the CLNs
and other unsecured debt issued or guaranteed by LSS.  S&P has
pushed back the year of default to 2012 from 2011 to reflect
reduced refinancing risk in 2010-2011 on account of the proposed
issue.

Downward pressure on the unsecured debt ratings is possible should
the share of secured debt in the capital structure increase.
Material depreciation of the ruble versus the U.S. dollar could
depress estimated recoveries to less than 30%-50%.  The recovery
prospects are based on a discrete-asset valuation of about
RUB13.2 billion (US$380 million).  The recovery and issue ratings
take into account the unsecured nature of the rated issues and the
Russian jurisdiction, which S&P see as relatively creditor
unfriendly.

In addition, the LSS group has about US$58 million equivalent in
unrated bank debt.

                           Ratings List

                            New Rating

                       CJSC SSMO LenSpecSMU

                     RUB2 bil. (proposed) notes

      Senior Unsecured                                     B
      Russia National Scale                                ruA
      Recovery Rating                                      4


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S L O V A K   R E P U B L I C
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AIR SLOVAKIA: Administrator Files Bankruptcy Proposal
-----------------------------------------------------
CTK, citing Slovak Television, reports that Air Slovakia's
restructuring administrator on Monday filed a proposal for the
company's bankruptcy.

According to the report, Air Slovakia got permission for
restructuring but the state has recently withdrawn its license for
running air transport.

Air Slovakia is an airline based in Bratislava, Slovakia.
It operates charter passenger, ACMI and scheduled flights.


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S P A I N
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CAIXA GIRONA: Fitch Downgrades Individual Rating to 'C/D'
---------------------------------------------------------
Fitch Ratings has downgraded Caixa d'Estalvis de Girona's Long-
term Issuer Default Rating to 'BBB' from 'BBB+' and downgraded its
Short-term IDR to 'F3' from 'F2'.  Both ratings remain on Rating
Watch Negative.  Fitch has simultaneously downgraded the caja's
Individual Rating to 'C/D' from 'C' and removed the RWN.  The
agency has affirmed the caja's Support Rating at '3' and Support
Rating Floor at 'BB+'.

In addition, Fitch has downgraded the caja's senior unsecured debt
rating to 'BBB' from 'BBB+' and downgraded its subordinated debt
to 'BBB-' from 'BBB'.  The debt ratings also remain on RWN.  Caixa
Girona's government-guaranteed debt, rated 'AAA', is not impacted
by the rating action.

The downgrades reflect the ongoing negative effects of the weak
Spanish economy and property sector downturn on the caja's asset
quality and operating profitability.  The caja's profitability is
continuing to be affected by lower business volumes and margin
pressure from deposit competition and low interest rates.  Caixa
Girona grew its loan book strongly between 2004 and mid-2007,
leading to high risk concentration in the real estate and
construction sectors, which will be difficult to reduce in the
near-term given uncertain prospects regarding the pace of the
economic recovery.

The RWNs reflect the need to boost core capital, either through
asset sales or through a merger with other cajas.  Failure to
achieve this and/or to manage asset quality deterioration, while
protecting operating profitability, will lead to a rating
downgrade.  The ratings also consider the caja's sound retail
franchise, low market risk appetite and sound liquidity.

Caixa Girona's 2009 profitability has weakened due to lower
business volumes and interest rates and a rise in loan and other
asset impairment charges.  Pressure will persist during the
remainder of 2010, however the effects should be minimized by cost
control, generic reserves and one-off capital gains from sale of
available-for-sale equity stakes and non-core business assets.

Lending exposure to the real estate/construction sectors remains
high at 38% of lending, although there has been a reduction since
2007, largely through asset foreclosures (EUR326 million at end-
Q110, net of EUR43 million reserve).  Real estate exposure is
fairly diversified by borrower and chiefly relates to mortgages
for small projects tied to primary residences in Girona, most of
which are near construction completion.  Risk diversification is
also provided by 40% of loans being to individuals (mostly
residential).  The impaired/total loans ratio was high at 6.2% of
total loans at end-Q110 (11.3%, if foreclosed assets were
included), the same level as in 2009.

Caixa Girona's liquidity is sound thanks to its retail deposit
base (74% of loans), an adequate level of unencumbered liquid
assets and a well-diversified wholesale funding maturity profile.
Its end-2009 Tier 1 ratio of 8.3% is adequate, but necessary given
its level of impaired assets and high real estate sector risk
concentration.

Caixa Girona was Spain's 33rd-largest caja by total end-2009
assets.  It focuses on retail banking in the Catalonian province
of Girona and has 1,132 employees and 229 branches.


CAIXA LAIETANA: Fitch Retains Negative Watch on 'C/D' Rating
--------------------------------------------------------------
Fitch Ratings has downgraded Caixa d'Estalvis Laietana's Long-term
Issuer Default Rating to 'BBB-' from 'BBB' and revised the rating
to Rating Watch Negative from Rating Watch Evolving.  Fitch has
simultaneously reviseded Laietana's Short-term IDR of 'F3' to RWN
from RWE.  The Individual Rating of 'C/D' remains on RWN.  The
agency has affirmed the caja's Support Rating at '3' and Support
Rating Floor at 'BB+'.

Laietana's outstanding preference shares have been downgraded to
'B+' from 'BB-', and reviseded to RWN from RWE The rating actions
do not impact Laietana's 'AAA'-rated government-guaranteed debt.

The Long- and Short-term IDRs and preference shares had been
placed on RWE due to the caja's merger plan with Caixa d'Estalvis
del Penedes.  The RWE on these ratings have been removed and have
now been placed on RWN as the merger has been aborted.  The
current ratings capture Laietana's stand alone credit profile.

The rating actions reflect Fitch's view that Laietana has little
scope to improve core capital and that it will be difficult to
transform its risk profile, by lowering its exposure to the
construction and real estate sectors in the near term, due to
uncertain prospects regarding the pace of an economic recovery in
Spain and the downturn in the property sector.  In addition,
Laietana needs to continue improving its funding at a time when
competition for deposits is likely to continue.  These factors
will put pressure on the caja's asset quality and profitability in
2010 and 2011.  The RWN reflects the need to improve capital
levels through a merger.  If this does not take place in the near
term, there could be downward ratings pressure.

Like most banks in Spain, Laietana's operating profit remains
affected by the need to continue to provide for loan impairments
and foreclosed assets.  Despite operating in one of the more
competitive regions in Spain, in 2009, the caja benefited from the
decline in interest rates due to a structural mismatch, which
widened its net interest margin and fed into net interest income.
Its cost efficiency is sound and supported by Laietana's low cost
base.

Real estate/construction sectors loans accounted for a high 44% of
total loans at end-2009 (pure real estate related: 37%).  This is
mitigated by 17% of total loans being in completed projects,
exposures being centered in urban areas, an average LTV on its
mortgage book (85% of the loan portfolio) of 58% and a low single-
name concentration.  Management is actively managing the portfolio
to reduce risk through a specialized team, but the downturn of the
Spanish housing market is making this challenging.  At end-2009,
the caja's impaired/total loans stood at 6.3% (cover of 33%).
Including foreclosed assets, this ratio would have been 9.6%

Laietana's funding has improved somewhat due to rising deposits
although these still represented a low 53% of net lending at end-
2009.  The caja needs to continue to rebalance its funding towards
customer deposits which will be challenging due to competition and
private sector deleveraging.  Refinancing of EUR900 million in
2011-2012 appears manageable and wholesale maturities are
diversified over time.  Capital levels are tight for its risk
profile, although the caja is deleveraging its balance sheet to
support capital and liquidity.

Laietana, based in the Catalonian coastal sub-region of Maresme in
the province of Barcelona, was Spain's 32nd-largest caja by total
assets at end-2009.  Its main activities include residential and
real estate mortgage lending and deposit taking.

In Fitch's rating criteria, a bank's standalone risk is reflected
in Fitch's Individual ratings and the prospect of external support
is reflected in Fitch's Support ratings.  Collectively these
ratings drive Fitch's Long- and Short-term IDRs.


CAIXA PENEDES: Fitch Retains RWN on 'BB'-Rated Preference Shares
----------------------------------------------------------------
Fitch Ratings has maintained Caixa Penedes's Long-term Issuer
Default Rating of 'BBB+', Short-term IDR of 'F2', and Individual
Rating of 'C' on Rating Watch Negative respectively.  Fitch has
simultaneously affirmed the caja's Support Rating at '3', and
Support Rating Floor at 'BB+'.

Caixa Penedes's preference shares, rated 'BB', remain on RWN.  The
rating actions have no impact on the caja's 'AAA'-rated
government-guaranteed debt.

Fitch initially placed the caja's ratings on RWN, on December 9,
2009, due to its merger plans with Caixa d'Estalvis Laietana.
However, the merger plan has been aborted.

The maintaining of the RWN is now based on the caja's stand-alone
credit profile and reflects the need to boost core capital levels
in the near-term.  Otherwise, the ratings could be downgraded.
The caja has experienced a sharp deterioration in asset quality
due to risk concentration in Spain's troubled property sector.  In
addition, the weak Spanish economy and uncertain prospects
regarding the pace of an economic recovery are likely to continue
pressuring asset quality and operating profitability in 2010 and
2011.  The latter is also likely to be affected by strong
competition for deposits and low interest rates.  Despite these
factors, Fitch believes that the caja has a sound provincial
franchise, still satisfactory underlying operating profitability,
proactive management, low borrower risk concentration and improved
liquidity.

Caixa Penedes' pre-impairment operating profitability held up well
in 2009 due to a sustained net interest margin, despite offering
higher returns on time-deposits, higher insurance income and good
cost control (cost/income ratio of 54%).  However, net income was
adversely affected by higher credit impairments, partly ahead of
calendar.  For 2010, margin pressure will be partly offset by the
activation of interest rate 'floors', higher fees, cost control
and the potential to realise significant capital gains from asset
disposals.

Lending exposure to the real estate/construction sectors was a
high, albeit declining, 35% of total loans at end-2009.  Fitch
takes some comfort in the fact that this exposure is mortgage-
secured for small projects of primary residences, largely at the
final construction stage and diversified by client.  A high 47% of
loans to individuals (84% in residential mortgages) also provides
risk diversification.  The caja's impaired/total loans was 6.4% at
end-2009 (11.2%, if foreclosed assets were included), above the
sector average.

The caja's focus on enhancing its retail deposit base, together
with loan de-leveraging, helped to improve its deposits/total
loans ratio to 65% at end-2009 (54% at end-2007) and reduce
reliance on ECB short-term funding.  Furthermore, the level of
unemcumbered liquid assets (8% of total assets) and long-term
funding has increased, largely through the extensive use of the
state guarantee funding scheme.  Funding is well-diversified in
maturities.  At end-2009, the caja's Tier 1 ratio of 9.5% was
highly-supported by hybrid capital, and its regulatory core
capital ratio was 6.6%.  As noted above, a higher level of core
capital is necessary given the caja's risk profile.

Caixa Penedes is Spain's 14th-largest savings bank by total assets
at end-2009.  It focuses on retail banking in the Catalonia
region, where most of its 3,000 staff and 633 branches are
located.

In Fitch's rating criteria, a bank's standalone risk is reflected
in Fitch's Individual ratings and the prospect of external support
is reflected in Fitch's Support ratings.  Collectively these
ratings drive Fitch's Long- and Short-term IDRs.


CAJA DE AHORROS: Fitch Puts 'BB+' Issuer Rating on Positive Watch
-----------------------------------------------------------------
Fitch Ratings has placed Caja de Ahorros y Monte de Piedad de
Cordoba's Long-Term Issuer Default Rating of 'BB+' on Rating Watch
Positive to reflect state support.  At the same time the agency
has downgraded its Individual rating to 'F' from 'D/E', reflecting
Fitch's opinion that CajaSur would have defaulted had it not
received state support.

These ratings have been also been placed on RWP: Short-term IDR of
'B', Support rating of '3', Support Rating Floor of 'BB+' and
senior debt of 'BB+'.  CajaSur's Subordinated Debt of 'BB' has
been placed on Rating Watch Negative.  For CajaSur's hybrid
capital issues, the agency has downgraded the preference shares to
'CC' from 'B'.  There is no rating impact on the 'AAA'-rated
government guaranteed debt issued by CajaSur.  The rating watches
will be resolved once a plan for CajaSur is disclosed.

The RWN on the Subordinated Debt reflects the possibility, albeit
remote, that this level of securities could be called upon to
cover potential shortfalls in equity in the event of a sale of
assets and liabilities.  In a worst case, there could be a
multiple notch downgrade in this instrument.

CajaSur was the subject of regulatory intervention by the Bank of
Spain on May 22, 2010.  The Spanish state's Fund for Orderly Bank
Restructuring has taken over control of CajaSur, having replaced
the caja's board of directors and management as temporary
administrator.

The FROB has EUR9 billion in equity and can raise up to ten times
this amount in debt (EUR90 billion).  It is expected to restore
CajaSur's depleted capital adequacy ratios to minimum regulatory
requirements and is also empowered by Law to provide the necessary
liquidity lines.  The Spanish authorities have stated that CajaSur
will continue to meet all its financial obligations to depositors
and creditors.

CajaSur breached its minimum regulatory capital adequacy
requirements as a result of the large EUR596 million loss reported
for 2009 and there has been a break-up of merger talks between
CajaSur and Unicaja (rated Long-term IDR of 'A+'), triggering the
regulatory intervention..

The 2009 loss came as a result of large loan impairment
(EUR456 million) and other charges (EUR163 million) relating to
high risk concentration to construction and real estate companies.
At end-2009 the caja had EUR3,656 million in lending to these
sectors (27% of total loans), a further EUR338 million in
foreclosed assets and EUR899 million in property acquired in
exchange for debt.  All in all, property exposure accounted for
26% of total assets.  The impaired to total loans ratio was 10.2%
at end 2009 and this ratio rises to 16% if net repossessed
property and net acquired assets are included in this calculation.

At end-2009, CajaSur's tier 1 and total regulatory ratios were
1.94% and 3.67% respectively, significantly below the minimum
requirements.  At end-2009, CajaSur had a capital shortfall of
EUR523 million.  The FROB is expected to inject capital, either in
the form of preference shares or "cuotas participativas" (normally
non-voting shares, but voting shares in the case that they are
subscribed by the FROB).  Three administrators were named by the
FROB and have a one-month timeframe (extendible to six months) to
come up with a solution for the caja.  This could include a merger
with another caja or the sale of its assets and liabilities to
another institution.  The FROB is exempt from any regulatory
hybrid capital limits or limits on "cuotas participativas".


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


BRITISH AIRWAYS: Posts GBP531MM Loss for Year Ended March 31
------------------------------------------------------------
Pilita Clark at The Financial Times reports that British Airways
posted a pre-tax loss of GBP531 million (US$763 million) for the
12 months to the end of March, its largest loss since it was
privatized in 1987.  The figures exclude the costs associated with
the recent disruptions linked to the ash cloud from Iceland, which
disrupted flight schedules across Europe, or industrial action by
BA cabin crew planned this week, the FT notes.

According to the FT, for the year ending March 31 revenue dropped
11% to GBP7.99 billion, while the operating loss widened from
GBP220 million in 2008-09 to GBP231 million.  The group passed on
paying a dividend for the second year, the FT states.

                              Strike

Separately, the FT's Ms. Clark reports BA said more flight
attendants turned up for work than were needed on Monday as the
Unite union launched the first of a wave of strikes at the
carrier.  Thousands of passengers around the world had travel
plans disrupted, however, after cabin crew walked out for the
second time in two months at BA, the FT relates.

According to the FT, the airline said it managed to fly people to
"100% of its short-haul destinations" -- which it did not do
during the last bout of walkouts in March -- though it had to
slash its normal number of daily flights.

Overall it expected to operate more than 60% of its long-haul
flights from Heathrow and more than 50 per cent of shorter routes
to the UK and Europe, the FT says.  Its Gatwick and London City
flights operated normally, the FT notes.

"We got more cabin crew than we required to operate the program we
decided on for this five-day period," the FT quoted a BA spokesman
saying, though he declined to give precise numbers.

                            Injunction

As reported by the Troubled Company Reporter-Europe on May 24,
2010, The Times said Court of Appeal overturned an injunction that
was blocking a BA cabin crew strike.  The Times disclosed the
Unite union said that cabin crew would stop work for five days
from May 24, with further five-day walkouts due to start on May 30
and June 5.  According to The Times, the Appeal Court judges who
overturned the injunction said that the dispute could be settled
only through negotiation.

On May 19, 2010, the Troubled Company Reporter-Europe, citing
Times Online, reported that BA was granted an injunction to stop
the Unite union from carrying out cabin crew strikes that had been
due to start on May 17.  Times Online disclosed the High Court
found that the union failed to comply with the legal requirement
to "send everyone eligible to vote details of the exact breakdown
of the ballot result".

                      About British Airways

Headquartered in Harmondsworth, England, British Airways Plc,
along with its subsidiaries, (LON:BAY) -- http://www.ba.com/-- is
engaged in the operation of international and domestic scheduled
air services for the carriage of passengers, freight and mail and
the provision of ancillary services.  The Company's principal
place of business is Heathrow.  It also operates a worldwide air
cargo business, in conjunction with its scheduled passenger
services.  The Company operates international scheduled airline
route networks together with its codeshare and franchise partners,
and flies to more than 300 destinations worldwide.  During the
fiscal year ended March 31, 2009 (fiscal 2009), the Company
carried more than 33 million passengers.  It carried 777,000 tons
of cargo to destinations in Europe, the Americas and throughout
the world.  In July 2008, the Company's subsidiary, BA European
Limited (trading as OpenSkies), acquired the French airline,
L'Avion.

                           *     *     *

As reported in the Troubled Company Reporter-Europe on March 19,
2010, Moody's Investors Service lowered to B1 from Ba3 the
Corporate Family and Probability of Default Ratings of British
Airways plc; and the senior unsecured and subordinate ratings to
B2 and B3, respectively.  Moody's said the outlook is stable.
This concludes the review that was initiated on November 10, 2009.
The rating action reflects Moody's view that credit metrics will
not be commensurate with the previous rating category in the
medium term.  Moody's expect furthermore that metrics will be
burdened in the foreseeable future by the company's significant
pension deficit, which was at GBP2.6 billion for the APS and NAPS
schemes combined as of September 2009 (under IAS).  Moody's
nevertheless understand that under the current agreement with the
trade unions, the cash contributions to these deficits will be
frozen at GBP330 million per year for three years, subject to
approval by the Pensions Regulator and the trustees.


LIVESEY: In Administration; P&A Partnership Named Administrator
---------------------------------------------------------------
The Business Desk reports that Livesey has gone into
administration.

The report relates insolvency firm The P&A Partnership has been
appointed administrator to the company.  According to the report,
partners at the practice are ensuring that the Shrewsbury firm
continues to trade until a buyer can be found.

The report notes Jeremy Priestley, P&A managing partner, said the
company "was hit by cashflow problems".

Livesey is a print and marketing collateral company based in
Shropshire.


LOYD'S NURSING: 64 Southern Cross Homes Put Up for Sale
-------------------------------------------------------
Find a Care Home reports that more than 60 UK care homes owned by
Southern Cross are seeking a buyer after Loyd's Nursing Homes
Group went into administration.

The report recalls Loyd's Nursing Homes Group, one of the biggest
landlords of care home provider Southern Cross, went into
administration in April after a financial collapse.

According to the report, chartered accountants at Grant Thornton
who are organizing the administration are aiming to sell 64 homes
previously owned by Loyd's -- most of which operated by Southern
Cross while others are operated by Four Seasons.

"We are currently considering our options for the portfolio of 64
properties . . . and have already been approached by a number of
interested parties," the report quoted Daniel Smith, a partner in
the recovery and reorganization practice at Grant Thornton, as
saying.


MAGAZINE MARKETING: In Administration; MCR Appointed Administrator
------------------------------------------------------------------
Sallyanne Pitt and Paul Clark of MCR were appointed Joint
Administrators of Magazine Marketing Company Limited, on May 21,
2010.

MMC was founded in 1988 and was the UK's largest independent
newstrade distributor representing over 135 clients and 400
magazines and collectables.

MMC's direct customers were wholesalers, which in the UK comprised
of Smith News and Menzies Distribution as well as a number in the
independent sector.  MMC also exported titles worldwide through
export agents.

The company also worked on behalf of its clients representing
their titles to retail groups to promote sales and to agree which
titles the retail groups will sell.  MMC's sales drive to
retailers was subdivided into supermarkets, the high street (WH
Smith Retail and Martin McColl Retail), CTN groups (Star News, GT
News, Eastcliffe), convenience groups (One Stop, Co-op, Spar),
travel points (WH Smith, Alpha etc) and independent newsagents.

The company had also built up a reputation in the export business,
with over 77 agents in 58 countries.

Sallyanne Pitt, Partner, MCR, stated: "MMC had a long history of
distributing well known magazine titles and collectables to the
newstrade.  It is extremely unfortunate that the Company has had
to be placed into Administration.  The Company is not continuing
to trade.  Parties that have an interest in acquiring any of the
Company's assets should contact us without delay."


ROYAL BANK: Nears Pakistan Unit Sale Deal
-----------------------------------------
BBC News reports that the Royal Bank of Scotland is closing in on
a deal to sell its operations in Pakistan.  According to BBC, the
bank is reported to have agreed the sale to Faysal Bank in
Pakistan, owned by Bahrain parent company, Ithmaar.  An
announcement is expected next week, BBC notes.

RBS Pakistan employs about 5,000 staff, BBC discloses.

                             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 of its entire
interest in Global Voice Group Ltd.

                           *     *     *

As reported by the Troubled Company Reporter-Europe on March 29,
2010, Standard & Poor's Ratings Services said that it lowered its
ratings on "may pay" Tier 1 securities issued or guaranteed by The
Royal Bank of Scotland Group PLC (A/Stable/A-1) to 'C' from 'CC'.
At the same time, the rating on the RBSG-related security issued
by Argon Capital PLC was similarly lowered to 'C' from 'CC'.  The
counterparty credit ratings and stand-alone credit profiles of
RBSG and subsidiaries, and the ratings on other debt securities
issued by these entities, are unaffected.


VISTEON CORP: Reaches Stipulation on UK Pension Claim Withdrawal
----------------------------------------------------------------
Visteon Corp., Visteon UK Pension Trustees Limited, in its
capacity as trustee of the Visteon UK Pension Plan, the Board of
the Pension Protection Fund, and the Official Committee of
Unsecured Creditors sought and obtained permission from the U.S.
Bankruptcy Court to enter into a stipulation, which provides that:

  (a) the claims asserted by the UK Pension Trustee and the PPF
      against the Debtors will be withdrawn with prejudice; and

  (b) the Pension Trustee's discovery request, the Debtors'
      discovery request, the Debtors' objection, and the
      Creditors Committee's objection will be deemed withdrawn
      with prejudice.

As previously reported, the UK Pension Trustee and the PPF filed
Claim Nos. 2032, 2652, 2658, 2664, 2670, 2672, 2674, 2675, 2678,
2772, 2778, 2818, 2819, 2822, 2823, 2825, 2829, 2830, 2837, 2839,
2841, 2843, 2845, 2849, 2850, 2851, 2852, 2853, 2856, and 2859 on
October 15, 2009.

The Claims asserted against each of the Debtors contingent and
unliquidated claims arising under the Pensions Act 2004 and the
Pensions Act 2005, all applicable UK Regulations, and other
claims against the Debtors relating to the Debtors' potential
liability to the Claimants under UK law related to the
underfunding of the Visteon UK Pension Plan.

The Debtors objected to the allowance of the Claims in early
April 2010.  The Creditors Committee also filed an objection to
the Claims in early May 2010.

Each of the UK Pension Trustee and the Debtors sought certain
document requests from each other in late April 2010.

The parties are entering into the Stipulation to avoid the
expense of further litigation among them.  The parties
acknowledge that execution of the Stipulation will not constitute
or be deemed an admission of any kind on the part of the
Claimants, the Debtors or the Creditors Committee.

                         About Visteon Corp.

Headquartered in Van Buren Township, Michigan, Visteon Corporation
(NYSE: VC) -- http://www.visteon.com/-- is a global automotive
supplier that designs, engineers and manufactures innovative
climate, interior, electronic and lighting products for vehicle
manufacturers, and also provides a range of products and services
to aftermarket customers.  The Company has corporate offices in
Van Buren Township, Michigan (U.S.); Shanghai, China; and Kerpen,
Germany.  It has facilities in 27 countries and employs roughly
35,500 people.  The Company has assets of US$4,561,000,000 and
debts of US$5,311,000,000 as of March 31, 2009.

Visteon Corporation and 30 of its affiliates filed for Chapter 11
protection on May 28, 2009, (Bank. D. Del. Case No. 09-11786
through 09-11818).  Judge Christopher S. Sontchi oversees the
Chapter 11 cases.  James H.M. Sprayregen, Esq., Marc Kieselstein,
Esq., and James J. Mazza, Jr., Esq., at Kirkland & Ellis LLP, in
Chicago, Illinois, represent the Debtors in their restructuring
efforts.  Laura Davis Jones, Esq., James E. O'Neill, Esq., Timothy
P. Cairns, Esq., and Mark M. Billion, Esq., at Pachulski Stang
Ziehl & Jones LLP, in Wilmington, Delaware, serve as the Debtors'
local counsel.  The Debtors' investment banker and financial
advisor is Rothschild Inc.  The Debtors' notice, claims, and
solicitation agent is Kurtzman Carson Consultants LLC.  The
Debtors' restructuring advisor is Alvarez & Marsal North America,
LLC.

Bankruptcy Creditors' Service, Inc., publishes Visteon Bankruptcy
News.  The newsletter tracks the Chapter 11 proceedings of Visteon
Corp. and its debtor-affiliates.  (http://bankrupt.com/newsstand/
or 215/945-7000)


===============
X X X X X X X X
===============


* S&P Puts Ratings on Senior Unsec. Debts of 22 Governments
-----------------------------------------------------------
Standard & Poor's Ratings Services said that it had assigned
recovery ratings to the senior unsecured debt of 22 speculative-
grade local and regional governments in Central and Eastern Europe
and Latin America.  At the same time, S&P affirmed the issue
ratings on the bonds of those 22 LRGs.  The rationale for the
recovery ratings can be found in table 2 in S&P's commentary on
the rating action titled, "S&P Assigns Recovery Ratings To Debt Of
22 LRGs And Affirms Issue Ratings On Those 22 LRGs," published
earlier.

The assignment of recovery ratings follows the introduction of
S&P's LRG recovery rating methodology, while affirmation of issue
ratings is based on its general recovery framework.

Standard & Poor's Global Sovereign Recovery Rating Scale For
Speculative-Grade

                                Issuers

  Standard & Poor's                     Recovery       Issue
  Recovery Rating                       Range          Rating*
  -----------------                     --------       -------
  1+  High expectation, full recovery       100%       +3 notches
  1   Very high recovery                90%-100%       +2 notches
  2   Substantial recovery               70%-90%       +1 notch
  3   Meaningful recovery                50%-70%       0 notches
  4   Average recovery                   30%-50%       0 notches
  5   Modest recovery                    10%-30%       -1 notch
  6   Negligible recovery                 0%-10%       -2 notches

* Indicates "notching" relative to Standard & Poor's issuer credit
  rating.

S&P also expects to assign recovery ratings to the debt of other
LRGs with Standard & Poor's speculative-grade issuer credit
ratings should they issue bonds in the future.

The distribution of Standard & Poor's recovery ratings on LRGs
currently does not extend to either the "strongest" ('1+' in its
recovery rating scale) or the "weakest" ('6' in S&P's recovery
rating scale) ends of the recovery rating scale (see chart).  This
is because there is typically no insolvency regime for LRGs in
most jurisdictions, and S&P does not expect asset foreclosures in
such jurisdictions.  Therefore, S&P estimates that the possibility
of a very high recovery is limited unless the default scenario is
a very short-term liquidity crisis.

On the other hand, because there is no equivalent to corporate
liquidation for LRGs, S&P would expect that, given the ongoing
existence of LRGs even after default, at least some recovery may
be expected.

Standard & Poor's starts its recovery analysis by identifying what
it views as the most likely default or restructuring scenarios.
These scenarios set the relevant parameters for the subsequent
recovery analysis, as they envisage the economic, fiscal, and
political conditions around default.  The default or restructuring
scenarios underlying the recovery analysis typically are linked to
the key rating constraints that affect the issuer credit rating.
However, the simulation of a default scenario could lead to
conclusions on an LRG's ability to make debt service payments and
recovery incentives in the event of default that are distinct from
those in a predefault situation.  Therefore, in S&P's opinion, an
LRG with a higher issuer credit rating might well have weaker
recovery prospects after a default, resulting in a lower recovery
rating.

It is important to point out that the recovery analysis is
performed under a hypothetical assumption, which considers that
the default or restructuring scenarios have occurred.  Obviously
the likelihood that a given scenario would actually occur can
vary.  This is reflected in S&P's issuer credit ratings on the 22
LRGs covered in this release, which range between 'CCC+' and
'BB+'.

                           Ratings List

      Recovery Ratings Assigned; Debt Issue Ratings Affirmed

                                                         Debt
   Issuing                             Recovery          Issue
   Entity                              Rating            Rating*
   -------                             --------          -------
   Bashkortostan (Republic of)              3            BB+
   Irkutsk Oblast                           3            B
   Samara Oblast                            3            BB+
   Novosibirsk (City of)                    3            BB-
   Sakha (Republic of)                      3            BB-
   Tomsk Oblast                             3            B
   Krasnodar Krai                           3            BB
   Krasnoyarsk Krai                         3            BB+
   Volgograd Oblast                         3            BB-
   Tver Oblast                              3            B+
   Leningrad Oblast                         3            BB
   Kyiv (City of)                           4            CCC+
   Lviv (City of)                           4            CCC+
   Lugansk (City of)                        4            B-
   Ivano-Frankivsk (City of)                3            B-
   Bucharest (City of)                      3            BB+
   Varna (City of)                          3            BB
   Stara Zagora (City of)                   3            BB
   Plovdiv (City of)                        3            BB+
   Mendoza (Province of)                    3            B-
   Buenos Aires (City of)                   2            B-
   Buenos Aires (Province of)               3            B-


                            *********

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.  Joy A. Agravante, Valerie U. Pascual, Marites O.
Claro, Rousel Elaine T. Fernandez, Frauline S. Abangan and Peter
A. Chapman, Editors.

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

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

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

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


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