/raid1/www/Hosts/bankrupt/TCREUR_Public/100528.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
E U R O P E
Friday, May 28, 2010, Vol. 11, No. 104
Headlines
C Y P R U S
REMEDIAL (CYPRUS): Wins Court OK to Sell Assets to Creditors
C Z E C H R E P U B L I C
LENOXA: CEZ Teplarenska Takes Over Operations
F R A N C E
TECHNICOLOR SA: Moody's Raises Corporate Family Rating to 'Caa1'
G E R M A N Y
ARCANDOR AG: Berggruen Wants Karstadt Landlords to Cut Rents
HEAT MEZZANINE: Moody's Junks Ratings on Two Classes of Notes
STAGE MEZZANINE: Fitch Cuts Rating on Class B Notes to 'B'
H U N G A R Y
HELIOGRID MAGYARORSZAG: Liquidator Eyes Salgotarjan Plant Sale
I T A L Y
PARMALAT SPA: Ex-Managers Found Guilty in Milan Fraud Trial
L U X E M B O U R G
MELCHIOR CDO: Fitch Affirms Ratings on Two Classes of Notes at C
STANTON CDO: S&P Cuts Ratings on Seven Classes of Notes to 'D'
N E T H E R L A N D S
E-MAC NL: S&P Affirms Ratings on Class E Notes at 'BB'
OPERA BV: Fitch Maintains 'CCC' Rating on Class D Notes
S P A I N
FONDO DE TITULIZACION: S&P Puts 'CCC-' Rating on Class F Notes
FONDO DE TITULIZACION: S&P Cuts Ratings on Various Notes to 'D'
TDA 28: S&P Downgrades Ratings on Class C Notes to 'D'
U N I T E D K I N G D O M
ABBOT GROUP: S&P Keeps 'B-' Long-Term Corporate Credit Ratings
BELLSTONE HOTEL: In Administration; Put Up for Sale
BRITISH AIRWAYS: Enters Fresh Talks With Cabin Crew Union
GENERAL MOTORS: To Cover Opel Funding Pledge With Loans
DJM TRANSPORT: Harsh Trading Conditions Prompt Administration
G W WAITE: Orwelco Buys Assets & Takes On 35 Employees
LONDON & REGIONAL: Fitch Cuts Rating on Class C Notes to 'BB'
PLAIN LABEL: Bought Out of Administration by Management Team
PORTSMOUTH FOOTBALL: To Enter Into Company Voluntary Arrangement
TYPHOON: In Administration; MCR in Sale Talks
VERGO RETAIL: 19 Stores to Commence Closing Down Sales
X X X X X X X X
* S&P Raises Ratings on 11 Spread-Trigger Leveraged Senior Notes
* BOOK REVIEW: Voluntary Assignments for the Benefit of Creditors,
*********
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C Y P R U S
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REMEDIAL (CYPRUS): Wins Court OK to Sell Assets to Creditors
------------------------------------------------------------
Bankruptcy Law360 reports that Remedial (Cyprus) Public Co. Ltd.
has won a judge's approval to sell virtually all its assets to
current bondholders for $120 million following the company's
failed attempt to solicit other competing bids.
Judge Robert E. Gerber signed off on the deal after a relatively
swift hearing Wednesday in the U.S. Bankruptcy Court for the
Southern District of New York, according to Law360.
About Remedial (Cyprus)
Based in Limassol, Cyprus, Remedial (Cyprus) Public Company owns
and operates self-propelled jack up rigs called Elevating Support
Vessels. The vessels facilitate offshore well intervention
activities and work-over services.
Remedial (Cyprus) Public Company Ltd. -- dba Brufani
Shipmanagement Limited and Remedial Cyprus Limited -- filed for
Chapter 11 bankruptcy protection on February 17, 2010 (Bankr.
S.D.N.Y. Case No. 10-10782). Kenneth A. Rosen, Esq., at
Lowenstein Sandler, P.C., assists the Company in its restructuring
effort. The Company estimated its assets and debts at
US$100,000,001 to US$500,000,000.
===========================
C Z E C H R E P U B L I C
===========================
LENOXA: CEZ Teplarenska Takes Over Operations
---------------------------------------------
Hospodarske Noviny, citing CEZ Teplarenska official Pavel Susak,
reported that the company took over the operations of Lenoxa and
began to supply its clients with heat and hot water, Ladka
Bauerova writes for Bloomberg News.
According to Bloomberg, the newspaper said CEZ Teplarenska, the
heating subsidiary of CEZ AS, will take over all 7 Lenoxa plants.
Lenoxa, declared insolvent in March, owes over CZK180 million
(US$8.6 million) and its biggest creditor is Ceska
Sporitelna AS, Bloomberg discloses citing the report.
As reported by the Troubled Company Reporter-Europe on May 26,
2010, CTK, citing the insolvency register on www.justice.cz, said
that the Liberec court declared Lenoxa bankrupt on May 24, 2010.
Lenoxa is a utility company based in Liberec, Czech Republic.
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F R A N C E
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TECHNICOLOR SA: Moody's Raises Corporate Family Rating to 'Caa1'
----------------------------------------------------------------
Moody's Investors Service raised the Corporate Family Rating of
Technicolor S.A. to Caa1 from Caa3 and the Probability of Default
Rating to Caa1 from D. At the same time the junior subordinated
bond rating has been withdrawn and the rating outlook has been
changed to stable from negative.
The rating action was prompted by the closing of Technicolor's
debt restructuring under the 'sauvegarde' proceeding following the
approval of the restructuring plan by the Commercial Court of
Nanterre on 17 February 2010. During the restructuring process
Technicolor's capital structure has been improved through
significant debt reduction. Around 45% of Technicolor's senior
debt, comprising EUR1.1 billion private placement notes and
EUR1.733 billion drawn under the company's syndicated credit
facility, have been converted into EUR348 million of new equity,
EUR638 million of mandatory convertible bonds (ORA) and
EUR251 million of disposal notes. The disposal notes will have to
be repaid with net proceeds from ongoing disposals, any shortfall
to be covered through the issuance of new shares or by cash. In
total the company's debt has been reduced by EUR1.3 billion under
Moody's definition.
The withdrawal of the junior subordinated bond rating reflects the
fact that the right of the holders of the EUR500 million deeply
subordinated notes issued in September 2005 has been reduced to a
subordinated claim in a potential liquidation
In line with the company's restructuring plan owners of these
instruments received EUR25 million cash compensation against the
right to receive any future coupon payments leaving these
instruments in an equity like position. However, Moody's notes
that certain holders of these instruments appealed against the
decision of the Nanterre Commercial Court to approve the
restructuring plan and that the Court asked Technicolor to enter
into discussions with the respective noteholders in order to
attempt to reach an agreement. The outcome of these discussions
is not known at this stage.
The Corporate Family Rating of Caa1 balances (i) the completion of
the financial restructuring, (ii) a substantial debt reduction by
EUR1.3 billion (-45%) to EUR1.55 billion reinstated debt, (iii) an
estimated leverage of 4.0x Net debt / EBITDA down from 6.0x in
2009 and (iv) a business profile that is expected to stabilize due
to new contract wins as well as reliable royalties from the
technology portfolio with (v) still challenging operating
performance (sales down by 21.5% in Q1 year over year), (vi) tight
financial covenants with limited headroom and (vii) the risk of
continuing cash burn from restructuring and the discontinued
businesses.
The ratings are currently constrained by Moody's concern that the
headroom under its financial covenants may become tight leaving
little room for underperformance in still challenging market
conditions. The stable outlook balances this with management's
aspiration to continue to gain new business following the recent
win of the Warner Bros. contract, which, if realized, would be
positive for the rating. Moody's expect the company to improve
its cash flow generation once the cash needs for ongoing
restructuring measures can be reduced to a nominal level and the
cash outflow for discontinued operations has come to an end so as
to improve its EBITDA reflecting the success of the restructuring
while at the same time moderately reducing outstanding financial
debt.
These ratings are affected by this press release:
Upgrades:
Issuer: Technicolor S.A.
-- Probability of Default Rating, Upgraded to Caa1 from D
-- Corporate Family Rating, Upgraded to Caa1 from Caa3
Outlook Actions:
Issuer: Technicolor S.A.
-- Outlook, Changed To Stable From Negative
Withdrawals:
Issuer: Technicolor S.A.
-- Junior Subordinated Regular Bond/Debenture, Withdrawn,
previously rated C, LGD5, 83%
Technicolor's ratings were assigned by evaluating factors Moody's
believe are relevant to the credit profile of the issuer, such as
i) the business risk and competitive position of the company
versus others within its industry, ii) the capital structure and
financial risk of the company, iii) the projected performance of
the company over the near to intermediate term, and iv)
management's track record and tolerance for risk. These
attributes were compared against other issuers both within and
outside of Technicolor's core industry and Technicolor's ratings
are believed to be comparable to those of other issuers of similar
credit risk.
The last rating action for Technicolor was on December 1, 2009,
when Moody's changed the Probability of Default Rating to D from
Ca/LD following the opening of the 'sauvegarde' proceeding to
implement Technicolor's debt restructuring.
Headquartered in Issy-les-Moulineaux, France, Technicolor,
formerly known as Thomson S.A., is a provider of solutions for the
creation, management, delivery and access of video for the
Communication, Media & Entertainment industries operating in three
business segments: Technicolor's Entertainment Services division
(formerly Technicolor) offers its content creator and distributor
customer base services related to the creation, preparation and
distribution of video content. Technicolor Connect (formerly
Systems division) supplies satellite, cable and telecom operators
with access and home networking devices and software platforms.
Technicolor conducts extensive research activities to innovate and
to support its solutions to the Communication, Media &
Entertainment industries. The Technology division combines
Technicolor's research and exploitation of its patent portfolio
through licensing programs. Group revenues from continuing
activities during 2009 amount to EUR3.5 billion.
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G E R M A N Y
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ARCANDOR AG: Berggruen Wants Karstadt Landlords to Cut Rents
------------------------------------------------------------
Holger Elfes and Thomas Mulier at Bloomberg News report that
Berggruen Holdings Ltd., the investment company that's bidding for
Germany's Karstadt, wants landlords of Arcandor AG's insolvent
department-store chain to cut rents to aid the retailer's long-
term survival.
"Rents are far too high and clearly above the market level,"
Bloomberg quoted Nicolas Berggruen, owner and chief executive
officer of the investment firm, as saying. "The company was for a
long time under pressure and couldn't invest sufficiently into its
operations because of the high rents," Mr. Berggruen, as cited by
Bloomberg, said.
Bloomberg notes Mr. Berggruen said he will stay invested in
Karstadt in the long term and has no exit strategy. According to
Bloomberg, the investor also said that he won't ask workers to
contribute beyond wage cuts they have already accepted.
On May 27, 2010, the Troubled Company Reporter-Europe, citing Dow
Jones Newswires, reported that Mr. Berggruen said that his bid for
Karstadt includes a business partnership with U.S. fashion company
BCBG Max Azria, Inc. "[BCBG] knows merchandising well, and that
at the end of the day is what matters," Mr. Berggruen told Dow
Jones Newswires in an interview. "Karstadt is a good name with
good stores and very good revenues. Like all such retailers they
need something fresh, and that's where BCBG comes in."
Mr. Berggruen, as cited by Dow Jones, said BCBG has been
conducting its own due diligence in Germany for weeks.
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.
HEAT MEZZANINE: Moody's Junks Ratings on Two Classes of Notes
-------------------------------------------------------------
Moody's Investors Service announced it has downgraded its ratings
of three classes of notes issued by H.E.A.T Mezzanine S.A. --
Compartment 3 Notes
-- EUR233M A (Currently EUR 217.8M), Downgraded to Ba3;
previously on Apr 29, 2010 A2 Placed Under Review for
Possible Downgrade
-- EUR31M B, Downgraded to Caa3; previously on Apr 29, 2010 B2
Placed Under Review for Possible Downgrade
-- EUR25.5M C, Downgraded to Ca; previously on Apr 29, 2010 Caa3
Placed Under Review for Possible Downgrade
The actions are driven by the increase in obligor defaults and
delinquent issuers in the pool. H.E.A.T Compartment 3 is a
transaction collateralized by a static portfolio of German SME
mezzanine loans. The pool is concentrated with the five largest
exposures comprising 24.5% of the pool. The transaction has
suffered EUR79 million in defaults (25.2% of the initial pool),
and an increase in the Principal Deficiency Ledger to
EUR66.3 million from EUR27.3 million at last monitoring in October
2009. There is currently 14.4% of the pool considered to be Ba1
or below by the RiskCalc model used to assess the credit quality
of the obligors. This data is based on the investor report dated
15 April 2010 and subsequent information provided by the
Transaction Adviser.
The analysis relies on credit estimates based on annual financial
data of the obligors. The latest available financial data of
nearly all of the obligors dates from the financial year 2008.This
financial data is used by Moody's in order to assess the credit
quality of obligors in the pool, relying on RiskCalc, an
econometric model developed by Moody's KMV. The results obtained
from the RiskCalc model have been translated to Moody's rating
scale and adjusted by one notch where necessary in order to
compensate for the absence of credit indicators such as rating
reviews, outlooks and adjustments factoring in cyclical
developments in the economy. Moody's outlook for German SMEs
remains negative.
Moody's also incorporated information provided by the manager in
the latest investor report to account for more recent information
on the performance of the underlying obligors. Furthermore,
various additional scenarios have been considered for the analysis
and include the application of stresses applicable to concentrated
pools with non publicly rated issuers, as outlined in Moody's
Methodology, "Updated approach to the usage of credit estimates in
rated transactions" (October 2009).
The deal was modeled using CDOROM 2.5 to create a loss
distribution that was then used as an input in a cash flow model.
STAGE MEZZANINE: Fitch Cuts Rating on Class B Notes to 'B'
----------------------------------------------------------
Fitch Ratings has downgraded StaGe Mezzanine Societe en Commandite
Simple's class A and B notes, due December 2013, following
increased defaults since March 2009 and an overall portfolio
deterioration. Fitch views the notes as increasingly vulnerable
to additional defaults during the remaining term of 2.75 years.
The Outlooks of both classes are Negative and Loss Severity
ratings have been revised due to increased loss expectations. The
transaction is a cash securitization of subordinated loans to
German medium-sized enterprises.
-- EUR102.8m class A notes (ISIN: XS0257999176): downgraded to
'BBB-' from 'A-'; Outlook Negative; Loss Severity rating
revised to 'LS-3' from 'LS-2'
-- EUR20m class B notes (ISIN: XS0258004190): downgraded to 'B'
from 'BB'; Outlook Negative; Loss Severity rating revised to
'LS-4' from 'LS-3'
Fitch believes the credit quality of the remaining portfolio has
deteriorated since the agency's last rating action in March 2009.
In Fitch's modeling, the lower credit quality of the portfolio
outweighed the shorter remaining time to maturity and led to
higher default expectations compared to the March 2009 review.
The agency expects further losses of between 10-15% of the current
non-defaulted portfolio notional until scheduled maturity. Given
the bullet maturities, Fitch expects weaker borrowers to have
difficulties re-financing loans at maturity, which could lead to
additional defaults. Due to the subordinated nature of the
securitized loan instruments, Fitch expects no recoveries.
Due to the excess spread, the class A and B notes can withstand
higher defaults than indicated by the current credit enhancement
(CE). In Fitch's modeling, class A and B can withstand up to
31.2% and 19.4%, respectively, of additional defaults as of the
current non-defaulted portfolio balance, compared with CE of 29.5%
and 15.8%, respectively.
The agency assessed the portfolio by mapping Creditreform Rating
AG's rating of the individual obligors to Fitch's rating scale,
and by evaluating qualitative information about the companies on
the transaction's watch list. In Fitch's opinion, the available
latest Creditreform ratings did not fully reflect the current
financial position of selected portfolio companies. In those
cases the agency lowered the modeled credit quality based on the
details provided on the transaction's watch list and following
consultation with the transaction monitor.
Since the transaction closed in June 2006, there have been six
default events, amounting to EUR33 million or 18.8% of the initial
portfolio notional, three of which have occurred since the last
review of the transaction in March 2009. The portfolio has
further decreased since closing by two early terminations with
full repayment amounting to EUR5 million or 2.8% of initial pool
notional. The portfolio currently contains 43 performing obligors
compared with 51 obligors initially. The largest exposure
accounts for 5.8% of the non-defaulted portfolio and the top five
obligors for 23.9%. In Fitch's opinion, the class A and B notes
can withstand the default of the top seven and three obligors,
respectively.
Despite the reduced portfolio notional, the transaction is still
able to trap a considerable amount of excess spread which has
equaled on average EUR1.5 million per quarter over the last four
payment periods. Due to a recovery payment of one defaulted
company of 56% and to the excess spread, the principal deficiency
ledger could be reduced to almost zero as of the March 2010
investor report. However, the PDL balance is expected to increase
by EUR8 million on the June 2010 payment date as a result of a
recent insolvency of one of the largest borrowers.
Fitch has assigned an Issuer Report Grade of three stars
("satisfactory") to the publicly available reports on the
transaction. The reporting is accurate and timely. It contains
various portfolio stratifications, the priority of payments,
cumulative default figures, and detailed information on the
companies closely watched by the recovery manager. However, the
reports lack information on the key counterparties of StaGe
Mezzanine Societe en Commandite Simple and the corresponding
rating triggers mitigating the counterparty risk.
The transaction is a cash securitization of subordinated loans to
German medium-sized enterprises arranged and monitored by WestLB
AG ('A-'/'F1'/Rating Watch Negative). The portfolio companies
were selected by the issuer based on recommendations of Deloitte &
Touche Corporate Finance GmbH acting as financial advisor to the
issuer.
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H U N G A R Y
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HELIOGRID MAGYARORSZAG: Liquidator Eyes Salgotarjan Plant Sale
--------------------------------------------------------------
Heliogrid Magyarorszag's liquidator aims to sell the company's
plant in Salgotarjan as an operational unit, MTI-Econews reports,
citing bailiff Miklos Balazs.
The report relates Mr. Balazs said the company has not yet been
put up for sale, but talks have been held with an interested group
of investors.
According to the report, Mr. Balazs said the company completed one
of four production lines at its base by the time it went under
liquidation in the summer of 2009.
Heliogrid Magyarorszag is a Hungarian solar cell maker.
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I T A L Y
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PARMALAT SPA: Ex-Managers Found Guilty in Milan Fraud Trial
-----------------------------------------------------------
Giulia Segreti at The Financial Times reports that two managers
who were acquitted over the Parmalat fraud scandal were found
guilty by a court of appeal in Milan on Wednesday.
The FT says Luciano Silingardi, adviser and board member, and
Giovanni Bonici, former president of Parmalat in Venezuela, were
given a three-year and a two-and-a-half-year sentence,
respectively.
Meanwhile, the 10-year sentence given to Calisto Tanzi, founder
and former chief executive of the Italian food company, was
confirmed, the FT relates. Mr. Tanzi was found guilty in December
2008 of falsifying accounts, market-rigging and misleading
investors and regulators, the FT recounts.
According to the FT, the Milan trial, which began in May 2009,
dealt with the operations and the activities of the company which
defrauded both the market and the regulators. The trial dealing
with the bankruptcy is being debated in a court in Parma, the FT
notes.
"The splitting up of the trial into different strands has created
great difficulties in the reconstruction of the events," the FT
quoted Giampiero Biancolella, Mr. Tanzi's lawyer who confirmed he
would make a second and final appeal, as saying.
Parmalat re-floated on the stock market in 2005 and is currently
run by Enrico Bondi, initially court-appointed administrator and
now chief executive, the FT discloses.
About Parmalat S.p.A.
Headquartered in Milan, Italy, Parmalat S.p.A. --
http://www.parmalat.net/-- sells nameplate milk products that can
be stored at room temperature for months. It also has about 40
brand product lines, which include yogurt, cheese, butter, cakes
and cookies, breads, pizza, snack foods and vegetable sauces,
soups and juices.
The Company's U.S. operations filed for Chapter 11 protection on
February 24, 2004 (Bankr. S.D.N.Y. Case No. 04-11139). Gary
Holtzer, Esq., and Marcia L. Goldstein, Esq., at Weil Gotshal &
Manges LLP, represent the Debtors. When the U.S. Debtors filed
for bankruptcy protection, they reported more than USUS$200
million in assets and debts. The U.S. Debtors emerged from
bankruptcy on April 13, 2005.
Parmalat S.p.A. and its Italian affiliates filed separate
petitions for Extraordinary Administration before the Italian
Ministry of Productive Activities and the Civil and Criminal
District Court of the City of Parma, Italy on December 24, 2003.
Dr. Enrico Bondi was appointed Extraordinary Commissioner in
each of the cases. The Parma Court has declared the units
insolvent.
On June 22, 2004, Dr. Bondi filed a Sec. 304 Petition, Case No.
04-14268, in the United States Bankruptcy Court for the Southern
District of New York.
Parmalat has three financing arms: Dairy Holdings Ltd., Parmalat
Capital Finance Ltd., and Food Holdings Ltd. Dairy Holdings and
Food Holdings are Cayman Island special-purpose vehicles
established by Parmalat S.p.A. The Finance Companies are under
separate winding up petitions before the Grand Court of the Cayman
Islands. Gordon I. MacRae and James Cleaver of Kroll (Cayman)
Ltd. serve as Joint Provisional Liquidators in the cases. On
January 20, 2004, the Liquidators filed Sec. 304 petition, Case
No. 04-10362, in the United States Bankruptcy Court for the
Southern District of New York. In May 2006, the Cayman Island
Court appointed Messrs. MacRae and Cleaver as Joint Official
Liquidators. Gregory M. Petrick, Esq., at Cadwalader, Wickersham
& Taft LLP, and Richard I. Janvey, Esq., at Janvey, Gordon,
Herlands Randolph, represent the Finance Companies in the Sec. 304
case.
The Honorable Robert D. Drain presided over the Parmalat Debtors'
U.S. cases. On June 21, 2007, the U.S. Court granted Parmalat
permanent injunction.
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L U X E M B O U R G
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MELCHIOR CDO: Fitch Affirms Ratings on Two Classes of Notes at C
----------------------------------------------------------------
Fitch Ratings has affirmed all classes of Melchior CDO I S.A.'s
notes:
-- EUR75,630,783 class A (ISIN XS0132598797) affirmed at 'AAA';
Outlook revised to Negative from Stable; Loss Severity Rating
is 'LS-3'
-- EUR32,000,000 class B-1 (ISIN XS0132600528) affirmed at 'B';
Outlook Negative; Loss Severity Rating is 'LS-3'
-- EUR20,000,000 class B-2 (ISIN XS0132602060) affirmed at 'B';
Outlook Negative; Loss Severity Rating is 'LS-3'
-- EUR10,000,000 class C-1 (ISIN XS0132606301) affirmed at 'CC'
-- EUR20,000,000 class C-2 (ISIN XS0132607291) affirmed at 'CC'
-- EUR16,561,221 class D (ISIN XS0132607887) affirmed at 'C'
-- EUR4,365,888 combination notes (ISIN XS0132608778) affirmed
at 'C'
Melchior CDO I S.A. is a 2001 vintage arbitrage cash flow CDO that
issued EUR400 million of various classes of fixed- and floating-
rate notes to invest in a portfolio of high-yield bonds, senior
and mezzanine loans and structured finance assets.
For the senior notes, the affirmation is primarily based on the
increasing level of credit enhancement due to the continued
amortization of the class A notes. For the junior notes, the
affirmation reflects Fitch's continued expectation that the class
D and the combination notes will not receive any further payment
and that the class C notes will ultimately default. The Negative
Outlooks reflect the increasing exposure to long-dated assets
(assets which have a maturity date before the Melchior notes
maturity date in August 2013 continue to amortize hence long-dated
assets increase as a percentage of current portfolio balance).
The class C and D notes are failing their over-collateralization
and interest coverage tests and, in Fitch's opinion, are likely to
continue doing so over the life of the transaction. The class D
OC test is currently 91% and the class D and the combination
notes, which are composed 50:50 of class D and subordinated notes
each, are not expected to receive any further payments. The class
C OC test is currently just over 100%. However, given the
significant exposure of the portfolio to long-dated obligations,
the agency considers that these notes will receive limited
principal proceeds and ultimately expects them to default.
The class A notes continue to amortize and the class A OC test
currently stands at over 200%, while the class B OC test is just
below 124%. However, under these headline OC figures there lies a
potentially significant exposure of the notes to the future market
price of long-dated obligations.
In the latest trustee report, EUR27.5 million of the
EUR149 million performing portfolio are classified as 'long-dated
obligations', which are assets that mature after the note maturity
date in August 2013. However, this figure excludes
EUR26.6 million of structured finance assets which are also 'long
dated obligations' but which the portfolio manager, Henderson
Global Investors, believes will amortize or be called before the
legal maturity of the notes. In its analysis, Fitch has included
these assets as long-dated obligations and hence considers the
'long-dated obligations' to total EUR54.1 million (or 36.2% of the
current portfolio).
The portfolio therefore consists of EUR95.2 million of assets
which have a maturity date before the August 2013 note maturity
date against EUR75.6 million of class A notes outstanding. So, if
defaults rise materially this would expose the class A notes to
the disposal prices of the long-dated obligations. Also, given
that the class B notes notional outstanding is EUR52 million,
these notes rely to a much greater extent on the disposal proceeds
received for the long-dated obligations to achieve full repayment.
The negative outlooks on the class A and B notes are intended to
reflect this exposure to the future prices received for the long-
dated exposures.
Fitch has assigned an Issuer Report Grade of three stars
("satisfactory") to the publicly available reports on the
transaction. The reporting is timely. However, the reports lack
combination note rated balances, cumulative portfolio gains and
losses (only provided for that period) and the result of the
under-collateralization event of default test.
STANTON CDO: S&P Cuts Ratings on Seven Classes of Notes to 'D'
--------------------------------------------------------------
Standard & Poor's Ratings Services removed from CreditWatch
negative and lowered to 'D' its credit ratings on Stanton CDO I
S.A.'s class A-1A, A-1B, and A-1U notes , and lowered to 'D' its
ratings on the class A-2U, A-2E1, A-2E2, and B notes. At the same
time, S&P affirmed its 'CC' rating on the class C notes.
The rating actions follow confirmation from the trustee that no
interest was paid on any of the notes on the transaction's payment
date in April 2010. S&P has therefore lowered to 'D' its ratings
on those classes that are now in interest payment default and
where its ratings address the timely payment of interest.
S&P's rating on the deferrable class C notes addresses the
ultimate payment of interest. As the notes are not in interest
payment default, S&P has affirmed its 'CC' rating on these notes,
indicating that, in its opinion, the notes are highly vulnerable
to nonpayment of principal and interest.
Stanton CDO I, which closed in October 2003, is a collateralized
debt obligation collateralized by a pool of securities issued by
primarily U.S. leveraged loan CLOs.
S&P placed the class A-1 notes on CreditWatch negative in
September 2009 following the publication of its updated
methodologies and assumptions for corporate cash flow and
synthetic CDOs. The updated methodologies and assumptions cover
CDO of corporate CDO transactions such as Stanton CDO I.
In July 2009, S&P lowered its ratings on each of the transaction's
rated classes, following notice of an event of default that
occurred in May 2009 under the terms and conditions of the notes.
Ratings List
Stanton CDO I S.A.
US$378.31 Million Senior, EUR48 Million Senior,
US$25 Million Deferrable Interest,
US$40 Million Subordinated Secured Floating-Rate Notes
Ratings Lowered and Removed From CreditWatch Negative
Rating
------
Class To From
----- -- ----
A-1A D CCC/Watch Neg
A-1B D CCC/Watch Neg
A-1U D CCC/Watch Neg
Ratings Lowered
Rating
------
Class To From
----- -- ----
A-2U D CCC-
A-2E1 D CCC-
A-2E2 D CCC-
B D CC
Rating Affirmed
Class Rating
----- ------
C CC
=====================
N E T H E R L A N D S
=====================
E-MAC NL: S&P Affirms Ratings on Class E Notes at 'BB'
------------------------------------------------------
Standard & Poor's Ratings Services affirmed its credit ratings on
all of the notes in E-MAC NL 2006-II B.V., and E-MAC Program II
B.V. Compartments NL 2006-III, NL 2007-I, NL 2007-III, NL 2007-IV,
NL 2008-I, NL 2008-II, and NL 2008-IV.
The Dutch prime residential mortgage-backed securities market has
remained stable through the recession and these transactions have
performed no differently. These transactions are well seasoned
and (as with the majority of the Dutch prime RMBS transactions
that S&P rates) have shown low losses and arrears. That being the
case, S&P note that arrears in this market have been edging up
over the past several quarters.
As these transactions have been paying sequentially over a period,
the notes have built up credit enhancement that has given extra
protection against any potential future losses. However, in S&P's
opinion this has not been sufficient to warrant positive rating
action.
House prices have fallen in The Netherlands, although not as far
as in some of the other European markets S&P monitors. Prices
have recently started to edge up, month on month. This has meant
that, in S&P's credit stresses, loss severities in the Dutch
market and these Dutch transactions have not been as severely
affected as in some other markets.
As such, despite the performance of the mortgage loans having been
good so far, S&P believes the build-up in credit enhancement for
these transactions has not been commensurate with positive rating
action. Therefore, S&P has affirmed its ratings on all of these
notes.
Ratings List
Ratings Affirmed
E-MAC NL 2006-II B.V.
Class Rating
----- ------
A AAA
B AA
C A
D BBB
E BB
E-MAC Program B.V. Compartment NL 2006-III
Class Rating
----- ------
A1 AAA
A2 AAA
B AA
C A
D BBB
E BB
E-MAC Program B.V. Compartment NL 2007-I
Class Rating
----- ------
A1 AAA
A2 AAA
B AA-
C A-
D BBB
E BB
E-MAC Program B.V. Compartment NL 2007-III
Class Rating
----- ------
A1 AAA
A2 AAA
B AA+
C A+
D BBB
E BB
E-MAC Program II B.V. Compartment NL 2007-IV
Class Rating
----- ------
A AAA
B AA
C A-
D BBB-
E-MAC Program II B.V. Compartment NL 2008-IV
Class Rating
----- ------
A AAA
B AA
C A
D BBB
E-MAC Program III B.V. Compartment NL 2008-I
A1 AAA
A2 AAA
B AA
C A
D BBB
E-MAC Program III B.V. Compartment NL 2008-II
Class Rating
----- ------
A2 AAA
B AA
C A
D BBB
OPERA BV: Fitch Maintains 'CCC' Rating on Class D Notes
-------------------------------------------------------
Fitch Ratings is maintaining Opera (Uni-Invest) B.V.'s commercial
mortgage-backed floating rate notes on Rating Watch Negative:
-- EUR428.9m class A (XS0218487436): 'A'; remains on RWN
-- EUR97.0m class B (XS0218489135): 'BBB'; remains on RWN
-- EUR102.2m class C (XS0218490653): 'B'; remains on RWN
-- EUR64.0m class D (XS0218492279): 'CCC'; remains on RWN
Due to the borrower's inability to refinance the transaction's
underlying term loan at scheduled maturity on February 11, 2010, a
standstill agreement between the borrower, the senior and the
mezzanine lenders was put in place in February 2010. The
principal aim of the standstill agreement is to reduce leverage
via asset disposals to a refinanceable level by the notes final
legal maturity in February 2012. The standstill agreement also
incorporates a number of interim target debt levels and income
coverage ratios designed to encourage the borrower's ongoing
commitment to the asset disposal program.
While the borrower has achieved some asset disposals at relatively
robust prices, Fitch questions the viability of the asset disposal
program as envisaged by the standstill agreement due to its tight
timeframe, which requires the disposal of an additional EUR242
million of assets between now and the August 2011 interest payment
date. In the absence of an extension of the notes' final legal
maturity date, there is a risk that a last-minute fire-sale may
become unavoidable, potentially resulting in substantially lower
recoveries than the price that could be achieved if the assets
were marketed as one portfolio (or a small number of sub-
portfolios) at a moderate discount to perceived current market
value.
The EUR692.1 million loan has a reported loan-to-value ratio of
74.7% compared with Fitch's estimate of EUR108.3%. The collateral
originally consisted of 318 secondary and tertiary quality office
and industrial properties located across the Netherlands and one
asset in Belgium.
As at the last interest payment date, 224 assets remained with a
reported market value of EUR926.9 million. The assets were last
re-valued in November 2009. Net operating income, as at the last
IPD, was EUR57.4 million, down from EUR66.2 million at the review
in August 2009. The recorded decline in NOI is primarily due to
the asset disposals that have taken place, but other factors were
an increase in the vacancy rate to 24% versus 23.2% in August
2009, as well as operating costs, which have remained unchanged in
spite of the asset disposals and currently run at 27.5% of gross
rental income in place, an exceptionally high level for this asset
type. As 50% of the loan's balance is floating and un-hedged, the
income coverage ratio, which currently stands at 3.74x, has
greatly benefited from the currently prevailing, low short-term
interest rates. However, the transaction does not benefit from
all of the excess income that is presently being generated as a
significant proportion of this excess income is used to pay
interest on the mezzanine loan and the additional mezzanine agency
fee that was newly introduced as part of the standstill agreement.
On the last IPD, EUR5.6 million of excess rent was used to
partially prepay the senior loan and, subsequently, the notes on a
pro-rata basis.
The RWN will be resolved once greater clarity emerges with regards
to the ability of the sponsor to meet the terms of the standstill
agreement and its likely effects on the notes.
=========
S P A I N
=========
FONDO DE TITULIZACION: S&P Puts 'CCC-' Rating on Class F Notes
--------------------------------------------------------------
Standard & Poor's Ratings Services assigned credit ratings to
Fondo de Titulizacion de Activos Santander Hipotecario 6's
EUR1,050 million mortgage-backed floating-rate notes. In
addition, Santander Hipotecario 6 issued an overissuance of
EUR210 million floating-rate class F notes.
This is the Santander group's 27th securitization over its
residential mortgage portfolio.
Santander Hipotecario 6 purchased mortgage transmission
certificates from the participation issuer, Banco Santander S.A.
(AA/Negative/A-1+) and issued six classes of floating-rate notes.
Santander originated the pool of first-ranking mortgages secured
over residential properties in Spain that back the notes. The
class F notes fund the reserve fund and will be repaid with excess
spread.
Ratings List
Fondo de Titulizacion de Activos Santander Hipotecario 6
EUR1,050 Million Mortgage-Backed Floating-Rate Notes
and an Overissuance of EUR210 Million Floating-Rate Notes
Class Rating Amount (mil. EUR)
----- ------ -----------------
A AAA 871.5
B AA 63.0
C A 52.5
D BBB 42.0
E BB 21.0
F(1) CCC- 210.0
(1) The class F note proceeds fully funded the reserve fund at
closing.
FONDO DE TITULIZACION: S&P Cuts Ratings on Various Notes to 'D'
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its credit ratings to
'D' from 'CCC-' on three non-asset-backed classes of notes in
three Spanish ABS securitizations. All the other ratings in these
transactions are unaffected by these actions.
The three transactions are:
* Fondo de Titulizacion de Activos Santander Consumer Spain Auto
07-1;
* Foncaixa FTGENCAT 5, Fondo de Titulizacion de Activos; and
* Foncaixa FTGENCAT 6, Fondo de Titulizacion de Activos.
S&P has lowered to 'D' the rating on the most junior classes of
notes in these transactions following their failure to meet due
interest payments on their most recent interest payment dates.
These notes were issued at closing to fund the cash reserves in
each transaction, and (as evidenced by their low speculative-grade
ratings) were generally not expected to meet due interest payments
over their terms.
These classes are non-asset-backed notes. Excess spread generated
in each transaction services interest and principal on these
classes. As per the last payment dates, these transactions were
not able to generate enough excess spread to meet the interest
payment obligation on these most junior tranches. This was due to
a mix of deteriorated performance, and some accounting issues that
are now fully addressed.
Ratings List
Ratings Lowered
Fondo de Titulizacion de Activos Santander Consumer
Spain Auto 07-1
EUR2,040 Million Floating-Rate Notes
Rating
------
Class To From
----- -- ----
D D CCC-
Foncaixa FTGENCAT 5, Fondo de Titulizacion de Activos
EUR1,026.5 Million Floating-Rate Notes
Rating
------
Class To From
----- -- ----
D D CCC-
Foncaixa FTGENCAT 6, Fondo de Titulizacion de Activos
EUR768.8 Million Floating-Rate Notes
Rating
------
Class To From
----- -- ----
D D CCC-
TDA 28: S&P Downgrades Ratings on Class C Notes to 'D'
------------------------------------------------------
Standard & Poor's Ratings Services lowered to 'D' its credit
rating on TDA 28, Fondo de Titulizacion de Activos' class C notes
following the failure to meet timely interest payment on this
class of notes on the last payment date in April. At the same
time, S&P lowered to 'A' and removed from CreditWatch negative
S&P's rating on the class A notes, and lowered to 'CCC-' S&P's
rating on the class B notes. The 'D' ratings on the class D, E,
and F notes are unaffected.
These rating actions result from the continuing credit
deterioration S&P has observed and the lack of recoveries in the
Spanish residential mortgage loan portfolio that backs this
transaction.
The portfolio has generated high delinquency levels. As of the
end of March 2010, delinquencies -- defined as arrears greater
than 90 days (including outstanding defaulted loans) -- were
20.05% of the current collateral balance, higher than the 18.74%
the transaction registered in December 2009.
Cumulative defaults as a percentage of the original pool balance
increased to 11.63% in March 2010 from 8.94% in December 2009. As
a result of the high level of defaults and a structural mechanism
requiring full provisioning for defaulted loans (defined as loans
in arrears for more than 12 months), TDA 28 has depleted its cash
reserve and currently shows a principal deficiency of about
EUR47.3 million (up from EUR35.7 million on the January payment
date), representing 12.68% of the outstanding collateral balance
(from 9.35% in January). The small amount of recoveries in this
transaction, which as of March 2010 were only EUR303,256 (0.07% of
the issued amount), do not mitigate these numbers.
When the percentage of cumulative defaulted loans over the
original balance of the A, B, C, D, and E notes in this
securitization reaches a certain level, the priority of payments
changes so as to postpone interest payments to the related class
of notes and divert these funds to amortize the most senior class
of notes. The class C, D, and E notes have already breached their
trigger levels and this has caused missed interest payments on
these notes. The trigger levels for the class B and C notes are
12.15% and 9.12%, respectively. Given the current level of
cumulative defaults (11.63%, versus 10.91% in February) and the
amount of loans in arrears for more than 90 days, in S&P's opinion
the class B notes will breach their trigger in the near term.
S&P's downgrade of these notes to 'CCC-' reflects this short-term
risk of default
Although the class A notes now benefit from the cash diverted from
most of the subordinated notes, the current level of principal
deficiency (EUR47,357,712.82, representing 131% of the outstanding
balance of classes B to E) leaves the senior notes with no
subordination. This, together with the lack of recoveries that
the transaction is suffering, is reflected when running S&P's cash
flow models, and as a result S&P has lowered its rating on the
class A notes to 'A'.
S&P downgraded classes D and E in February 2010 after they missed
timely payment of interest. The class F notes are non-asset-
backed notes and were issued partly to fund the cash reserve. In
July 2009, S&P lowered its rating on these notes to 'D' after they
also missed timely payment of interest.
A portfolio of residential mortgage loans secured over properties
in Spain backs all the notes, which TDA 28 issued in July 2007.
Caixa Terrassa and Credifimo originated and service the loans.
More than 80% of the current defaults stem from Credifimo loans,
which account for about 48% of the outstanding collateral balance.
Ratings List
TDA 28, Fondo de Titulizacion de Activos
EUR454.95 Million Mortgage-Backed Floating-Rate Notes,
Floating-Rate Notes, and NAS-IO Notes
Ratings Lowered
Rating
------
Class To From
----- -- ----
B CCC- CCC
C D CCC
Rating Lowered and Removed From Creditwatch Negative
Rating
------
Class To From
----- -- ----
A A AA/Watch Neg
Rating Affirmed
Class Rating
----- ------
NAS-IO AAA
Ratings Unaffected
Class Rating
----- ------
D D
E D
F D
===========================
U N I T E D K I N G D O M
===========================
ABBOT GROUP: S&P Keeps 'B-' Long-Term Corporate Credit Ratings
--------------------------------------------------------------
Standard & Poor's Ratings Services said that it is keeping its
'B-' long-term corporate credit ratings on U.K.-based oil services
company Abbot Group Ltd. and related entity Turbo Alpha Ltd. on
CreditWatch, where they were placed with negative implications on
Nov. 16, 2009. The recovery ratings of '3' on Turbo Alpha's
senior secured bank facilities are unchanged.
"The continuing CreditWatch placement reflects S&P's understanding
that, following bank meetings on May 17, negotiations between the
group, shareholders, and lenders to amend covenants appear well
advanced ahead of an expected covenant breach at the end of the
second quarter of 2010," said Standard & Poor's credit analyst
Paul Watters.
S&P understands that Abbot Group's majority owner, First Reserve
(not rated), is prepared to inject a substantial US$200 million
cash equity contribution to stabilize the group's credit profile.
In S&P's view, due to the tightening in certain financial
covenants in 2010 the risk of a breach of the leverage covenant at
the end of the second quarter is high, albeit S&P understands that
Abbot remained in compliance with its covenants at the end of the
first quarter of 2010.
S&P expects that the group's financial performance will continue
to be under some pressure in 2010 and 2011 as it continues to
renew contracts for its land rigs and jack-ups at lower rates,
reflecting soft market conditions. Despite expected pressure on
pricing, S&P anticipates that Abbot will receive some benefit
later in 2010 and in 2011 as utilization rates in some of its key
markets (such as Russia and Africa) start to firm up. This
reflects indications of renewed tendering activity from
exploration and development companies on the back of the
improvement in oil prices.
S&P aims to resolve the CreditWatch placement in the next couple
of weeks, when the outcome of the amendment process becomes clear.
S&P's understanding is that the key banks representing close to
one-half of the senior syndicate have agreed in principle to the
proposal presented. The proposal includes a US$200 million equity
contribution from the shareholders that will be applied to
prepaying senior debt at par. In the event that the consent
process is successful, the corporate credit rating would likely
remain 'B-'. If, at this late stage, the senior amendment
agreement to reset covenants does not become effective a multi-
notch downgrade would likely follow.
BELLSTONE HOTEL: In Administration; Put Up for Sale
---------------------------------------------------
Shropshire Star reports that The Bellstone Hotel has gone into
administration.
According to the report, the hotel is currently being run by PFK
Accountants & Business Advisors.
The report relates Ian Gould, who has been appointed as joint
administrator along with Eddie Kerr, said the hotel would continue
to operate as normal with the hope of finding a buyer by the
summer.
The Bellstone Hotel is located in Shrewsbury.
BRITISH AIRWAYS: Enters Fresh Talks With Cabin Crew Union
---------------------------------------------------------
Pilita Clark at The Financial Times reports that Willie Walsh,
British Airways' chief executive, entered fresh talks Wednesday
night with Unite union leaders in another effort to settle a row
with striking cabin crew that has grounded hundreds of flights
since Monday.
According to the FT, the union leaders repeated earlier offers to
suspend the strikes if Mr. Walsh reinstated travel concessions he
stripped from staff who walked out in a BA stoppage in March over
the original cause of the dispute -- reduced crew levels on long-
haul flights. The FT says Mr. Walsh has offered to restore travel
benefits but only if striking workers are treated as new recruits,
meaning non-striking employees would have better access to the
prized discounted travel for BA staff.
BBC News reports that the two sides are expected to resume
negotiations on Friday.
Ballot
Steven Rothwell at Bloomberg News reports Unite said BA's 12,000
cabin crew may be balloted on extending their "solid" strike as
the carrier increases services in anticipation of the walkout
weakening.
According to Bloomberg, the stoppage, which began May 24, has so
far forced the company to cancel flights for more than 25,000
people a day. BA aims to bring that number below 22,000 by adding
more flights during a further strike starting May 30, Bloomberg
says.
Bloomberg relates Derek Simpson, the union's joint general
secretary, said in an interview, Unite may conduct a fresh ballot
of workers to ensure that it complies with legal requirements
after BA went to court to block a strike last week.
"He may not break this week, he may not break next week, but
sooner or later he will," Bloomberg quoted Mr. Simpson as saying
Wednesday after a rally near London's Heathrow airport. "I don't
believe for one moment that he personally wants a settlement. He
wants to be in a position where he can impose whatever he wants."
As reported by the Troubled Company Reporter-Europe on May 27,
2010, the Financial Times said BA will plans to keep challenging
the legality of the cabin crew walkouts that have cost it GBP43
million (US$62 million) so far.
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
GENERAL MOTORS: To Cover Opel Funding Pledge With Loans
-------------------------------------------------------
General Motors will cover a pledge to increase funding for the
reorganization of its Opel unit with loans and a deposit
guarantee, Chris Reiter and Andreas Cremer at Bloomberg News
report, citing the U.S. carmaker's German-aid application.
GM won't provide Opel with additional cash and will instead give
two loans totaling EUR1.06 billion (US$1.3 billion) and provide
EUR245 million of collateral for government aid to reach the
EUR1.9 billion it has offered, Bloomberg says, citing a
PricewaterhouseCoopers report commissioned by the German
government.
"I'm very skeptical about GM's request for state aid," Bloomberg
quoted Joachim Pfeiffer, parliamentary spokesman on economic
policies for German Chancellor Angel Merkel's Christian Democratic
Union, as saying. "We need to look at it very carefully, but it's
clear that GM definitely has enough cash to restructure Opel by
themselves."
Bloomberg relates a panel advising the German government on
distributing loans and aid to companies under reorganization began
deliberations on GM's request on May 25. A final decision on
state aid for Opel will be made by the government's steering
committee, which includes representatives from Ms. Merkel's office
and the economic, finance and justice ministries, Bloomberg notes.
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 December 31, 2009, GM had total assets of US$136.295 billion
against total liabilities of US$107.340 billion. At December 31,
2009, total equity was US$21.249 million.
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)
DJM TRANSPORT: Harsh Trading Conditions Prompt Administration
-------------------------------------------------------------
Dominic Perry at RoadTransport.com reports that related Cheshire
haulage and storage firms DJM Transport and DJM Logistics (UK)
have both gone into administration, resulting in the loss of
around 30 jobs.
The report relates the administration process is being handled by
Grant Thornton.
According to the report, the businesses had been running since
2001, but have become the latest victims of the harsh trading
conditions in the sector.
"The reasons for the demise are no different to some of the others
in the sector. It is a competitive marketplace, with
overcapacity. This is another example of too many companies
chasing too little work," the report quoted joint administrator
Les Ross as saying.
The report notes Mr. Ross said the transport operation had
particularly suffered from declining margins, and although the
warehousing arm was the stronger of the two divisions, the
warehousing facility "was not full enough or long enough at the
right rate."
Both businesses are continuing to trade in the short term, the
report states.
G W WAITE: Orwelco Buys Assets & Takes On 35 Employees
------------------------------------------------------
North-West Evening Mail reports that Orwelco Holdings Ltd. has
bought G W Waite Ltd.'s assets and agreed to take on its workforce
of 35.
The report relates G W Waite went into administration on May 21.
Orwelco entered talks with Blackpool-based administrators
Campbell, Crossley and Davis on the same day, the report notes.
"G W Waite went into administration on Friday because it was
insolvent, and at that point we were able to negotiate a deal with
Orwelco to buy the assets and take over the staff and running of
the business," the report quoted Ian Williamson, a partner at
Campbell, Crossley and Davis, as saying. "The G W Waite building
is leased and Orwelco do not own it. Orwelco is in the process of
moving the business to Barrow."
G W Waite Ltd. is an Ulverston-based components business. It was
a third tier supplier to the motor car industry and included Audi
and Cannon Hygiene among its customers, according to North-West
Evening Mail.
LONDON & REGIONAL: Fitch Cuts Rating on Class C Notes to 'BB'
-------------------------------------------------------------
Fitch Ratings has downgraded all three classes of London &
Regional Debt Securitisation No. 2 plc's commercial mortgage-
backed floating-rate notes, due 2014:
-- GBP176.4m class A (XS0262542565): downgraded to 'AA' from
'AAA'; Outlook Stable
-- GBP14.9m class B (XS0262544348): downgraded to 'AA-' from
'AA+'; Outlook Negative
-- GBP46.4m class C (XS0262545402): downgraded to 'BB' from
'BBB'; Outlook Negative
London & Regional Debt Securitisation No.2 plc is a securitization
of a single interest-only commercial mortgage loan arranged by
Morgan Stanley ('A'/Stable/'F1') which is secured against 24
properties located throughout England and Scotland. The
outstanding balance currently stands at GBP237.7 million, down
from GBP256 million at closing following selective asset sales.
The portfolio has an outstanding aggregate reported market value
of GBP415 million.
The notes have been downgraded because of ongoing distress in the
UK commercial real estate market, the persistence of balloon risk
and compression in the lease term structure following an increase
in the vacancy rate in a number of properties.
The Fitch securitized loan-to-value of 89%, is well in excess of
the reported LTV of 57.1%, and reflects an average market value
decline of approximately 35% since closing. Some properties in
the portfolio fall within secondary or tertiary quality segments
that have yet to report stabilization as posted for prime assets.
Although the securitized LTV is not excessive by the standards of
the loan vintage, balloon risk is exacerbated by the large B-note,
which, while subordinated, nevertheless contributes 40% of the
129% Fitch whole loan LTV (compared to a reported 83.5%). The
prospects of a refinance by loan maturity in June 2013 are slim,
after which only two years remain until bond maturity.
The borrower's assets comprise office, retail and leisure
properties, with concentration in London (68% by market value).
The assets vary in quality and location with some grade A
properties located in London's west end and others of secondary
and tertiary quality in suburban London and the midlands in
particular. Leisure assets currently account for approximately
44% of passing rent. The bespoke nature of these assets increases
uncertainty surrounding future income in the event of a tenant
departure. At present, the largest tenant in the pool, Stakis
Limited, a hotel operator wholly-owned by the Hilton Group,
contributes 25% of total passing rent from two prestigious central
London hotels. The second largest tenant currently occupies a
recently-developed casino in Leicester Square, London.
While the majority of assets in the portfolio are fully-let, a
combination of tenant defaults and non-renewing leases has
contributed to a significant fall in occupancy in the Stratford-
upon-Avon and Epworth House assets. These properties account for
10.2% of the overall market value and are both currently over 30%
vacant. There is also some vacancy among smaller assets in the
portfolio. The increased vacancy levels have had a subsequent
impact on the weighted average unexpired lease term, which, at
10.9 years, is down from 13 years reported 12 months ago. Coupled
with the level of balloon risk, the weakening in occupancy has
contributed to the downgrades of the notes.
PLAIN LABEL: Bought Out of Administration by Management Team
------------------------------------------------------------
Ben Bold at PrintWeek reports that The Plain Label Company's
management team has bought the company out of administration.
The report relates the company entered administration with Simon
Plant and Daniel Plant of London-based SFP, on May 14.
According to the report, the company was bought out of
administration by Rivers Midlands, which has Andrew Kneale,
Michael Briggs and Ian Bullingham as directors, on May 19. The
report relates Mr. Kneale said that Rivers Midlands, a dormant
company which last posted accounts at Companies House in September
2008, would be renamed PLC Labels shortly.
The report notes Messrs. Briggs and Kneale have blamed PLC's
demise on a failed fixed-price contract with its largest customer.
The Plain Label Company is a label printer based in Nottingham.
PORTSMOUTH FOOTBALL: To Enter Into Company Voluntary Arrangement
----------------------------------------------------------------
Rachael Singh at Accountancy Age reports that Portsmouth Football
Club is expected to enter into a Company Voluntary Arrangement
this month with a secondary plan to place the club in liquidation
some nine months after the CVA has been approved by creditors.
The report says entering liquidation will give liquidators the
power to fully investigate how the club found itself facing
financial demise. According to the report, the process will
involve moving key assets such as FA membership, players, and
image rights -- essentially the "business of football" -- to a new
company next year. CVA payments will be paid from the new company
to the creditors of the old business, the report notes.
The old business would be placed in liquidation allowing a full
investigation by the liquidators in charge, the report discloses.
It is understood the current administrators are likely to be
confirmed as liquidators, the report states.
The report relates Peter Kubik, one of the three UHY Hacker Young
administrators at Portsmouth, said the proposed CVA/liquidation
plan, expected to be published this week, had come about because
neither the administrators nor HMRC wanted to lose the ability to
pursue any party for "antecedent-activities".
As reported by the Troubled Company Reporter-Europe, Bloomberg
News said Portsmouth on Feb. 26 became the first team in England's
Premier League to go into administration after U.K. authorities
tried to force its closure over unpaid tax of GBP12.1 million.
Portsmouth Football Club Ltd. -- http://www.portsmouthfc.co.uk/--
operates Portsmouth FC, a professional soccer team that plays in
the English Premier League. Established in 1898, the club boasts
two FA Cups, its last in 2008, and two first division
championships. Portsmouth FC's home ground is at Fratton Park;
the football team is known to supporters as Pompey. Dubai
businessman Sulaiman Al-Fahim purchased the club from Alexandre
Gaydamak in 2009. A French businessman of Russian decent,
Gaydamak had controlled Portsmouth Football Club since 2006.
TYPHOON: In Administration; MCR in Sale Talks
----------------------------------------------
DIY Week reports that Typhoon has entered into administration.
DIY Week relates Paul Williams and Philip Duffy of restructuring
specialist MCR were appointed joint administrators of the company
on May 25.
MCR's Paul Corlett told DIY Week that the administrators are
currently working with an interested party and will "hopefully
complete a sale shortly." DIY Week notes Mr. Corlett said that
there had been no redundancies within the company.
Typhoon is a housewares supplier based in the United Kingdom.
VERGO RETAIL: 19 Stores to Commence Closing Down Sales
------------------------------------------------------
Vergo Retail Ltd.'s 19 stores will commence closing down sales
with immediate effect, Benjamin Purvis at Bloomberg News reports,
citing an e-mailed statement from administrators MCR.
As reported by the Troubled Company Reporter-Europe, Sarah Bell
and Steven Muncaster, Partners at MCR, were appointed joint
administrators of department store business Vergo Retail on
May 7, 2010. Ms. Bell, a partner at MCR, stated: "Unfortunately
the Company has endured periods of financial loss. It has made
efforts following the recently announced closure of the Lewis's
store in Liverpool, to seek new finance to restructure the
business but has been unsuccessful in finding a going concern
solution. Like many retailers, it has experienced a difficult
trading environment during the economic downturn."
Vergo Retail Ltd. was established in 2007 and operates from a head
office in Liverpool, employing 942 staff across 19 outlets. These
include nine significant department stores such as Lewis's of
Liverpool, Robbs of Hexham, Joplings of Sunderland and Derrys of
Plymouth.
===============
X X X X X X X X
===============
* S&P Raises Ratings on 11 Spread-Trigger Leveraged Senior Notes
----------------------------------------------------------------
Standard & Poor's Ratings Services raised and removed from
CreditWatch negative its credit ratings on 11 spread-trigger
leveraged super senior notes. At the same time, S&P affirmed its
ratings on two LSS notes, one of which S&P removed from
CreditWatch negative.
The rating actions follow positive movements in two key
transaction variables over several months. Firstly, S&P has
observed a tightening of the weighted-average spread (WAS) of the
portfolio of reference entities. Secondly, as the transactions
reduce their time to maturity, S&P has seen an increase in the
trigger spread level.
In S&P's opinion, these positive factors lower the probability
that these specific spread-based LSS transactions will breach
their portfolio spread triggers. Consequently, S&P has taken the
rating actions.
S&P has raised the ratings on four notes to investment-grade.
Each of these notes has a scheduled maturity date in 2010 and
significantly higher spread triggers than the other LSS spread
transactions referenced below.
S&P believes the remaining notes are commensurate with
speculative-grade ratings, as they are characterized by one or
more of these features: A smaller difference between the portfolio
WAS and trigger spread; a longer maturity; or a lower trigger
spread level. Also, in S&P's opinion, these notes have a greater
likelihood of breaching their portfolio spread triggers, and could
also be vulnerable to spread widening before their maturity.
LSS transactions reference both credit and market-value risks
associated with their underlying portfolios. These transactions
have a market-value trigger based on the weighted-average
portfolio spread and portfolio losses at a given point in time.
Pursuant to the transaction documentation, upon a breach of a
market-value trigger, there would be an "unwind event," which may
lead to the notes becoming immediately repayable. If the notes
were to be accelerated, investors could suffer a mark-to-market
loss on their investment.
Ratings List
Rating Affirmed
Credit Default Swap
EUR100 Million Leveraged Super Senior Swap Risk Rating
(Between Calyon FIM And Calyon CPM)
BBsrp
Rating Affirmed and Removed From Creditwatch Negative
Eirles Two Ltd.
JPY3.9 Billion Fixed-Rate Leveraged Super Senior Secured
Credit-Linked Notes Series 341
Rating
------
To From
-- ----
B B/Watch Neg
Ratings Raised and Removed From Creditwatch Negative
Chess II Ltd.
EUR20 Million Secured Leveraged Super Senior Credit-Linked
Fixed-Rate Notes Series 22
Rating
------
To From
-- ----
BB CCC/Watch Neg
Eirles Two Ltd.
EUR105 Million Class A Floating-Rate Leveraged Super Senior
Secured Credit- Linked Notes Series 207
Rating
------
To From
-- ----
BB CCC/Watch Neg
Eirles Two Ltd.
EUR30 Million Fixed-Rate Credit-Linked Leveraged Super Senior
Secured Series 213
Rating
------
To From
-- ----
BB CCC/Watch Neg
Eirles Two Ltd.
S$144 Million Fixed-Rate Leveraged Super Senior Credit-Linked
Notes Series 340
Rating
------
To From
-- ----
B CCC/Watch Neg
Eirles Two Ltd.
S$52 Million Fixed-Rate Leveraged Super Senior Secured
Credit-Linked Notes Series 342
Rating
------
To From
-- ----
BBB CCC/Watch Neg
Eirles Two Ltd.
EUR15 Million Variable-Rate LSS Secured Credit-Linked Notes
Series 337
Rating
------
To From
-- ----
BB+ CCC/Watch Neg
Midgard CDO PLC
EUR15 Million Embla Fixed-Rate Leveraged Super Senior
Credit Linked Notes Series 2005-14
Rating
------
To From
-- ----
B CCC/Watch Neg
Omega Capital Investments PLC
EUR100 Million Secured Floating-Rate Notes (Highway Series 1)
Series 12
Rating
------
Class To From
----- -- ----
B5E-1 BBB CCC/Watch Neg
B5E-2 BBB CCC/Watch Neg
C7E-1 BB CCC/Watch Neg
Sceptre Capital B.V.
EUR45 Million Variable-Redemption Limited-Recourse Leveraged CDO
Notes Series 2005-5
Rating
------
To From
-- ----
A CCC/Watch Neg
* BOOK REVIEW: Voluntary Assignments for the Benefit of Creditors,
Volumes I and II
------------------------------------------------------------------
Author: James Avery-Webb
Publisher: Beard Books
Softcover: 788 pages for both volumes
Price: $34.95 each volume; $49.95 set
Review by Henry Berry
Voluntary Assignments for the Benefit of Creditors is a 1999
update of the classic nineteenth-century work on the important
financial and business instrument known as "voluntary
assignments." The author of the original edition was Alexander M.
Burrill, a noted legal scholar who also wrote a law dictionary and
several other texts. Voluntary Assignments for the Benefit of
Creditors is now in its sixth edition, with Avery-Webb authoring
the update.
As defined by the authors, voluntary assignments for the benefit
of creditors are "transfers, without compulsion of law, by
debtors, of some or all of their property to an assignee or
assignees, in trust to apply the same, or the proceeds thereof, to
the payment of some or all of their debts, and to return the
surplus, if any, to the owner." Voluntary assignments offer
businesspersons from small business owners to corporate executives
great flexibility in raising capital. Considering the many ways
that businesses can enter into voluntary assignments, the
different ways of valuing properties "assigned," and the changing
value of these properties over time, the law governing voluntary
assignment is complex.
The authors tackle the subject of voluntary assignments in all its
breadth and depth.
During the 1800s, when Burrill's work first came out, there were
innumerable cases dealing with voluntary assignments. The case
law of the 1800s remains authoritative, informative, and
instructive today.
To render it comprehensible, the authors break down the subject
matter into its many facets, thereby allowing lawyers and others
to quickly reference areas of interest. These cases are listed
alphabetically, and comprise more than fifty pages in a front
section titled "Table of Cases." Cases are also referred to in
the text proper and in copious footnotes.
The format of the text, including the footnotes, is the standard
followed by many legal texts and handbooks, notably the multi-
volume American Jurisprudence. The sections are numbered
consecutively in forty-five chapters. There are 458 sections in
all. The sections are relatively short, even though the subject
of voluntary assignments is complex and there is bountiful case
law.
Readers can peruse general topics such as execution of the
assignment, construction of assignments, sale of the assigned
property, and the rights, duties, and powers of the assignee.
More specific, detailed topics can be accessed using the index.
There are two appendices. The first contains synopses of the
statutes of every state and territory on voluntary assignments.
The second appendix contains nearly thirty standard forms that can
be used for various aspects of assignments.
Although voluminous and rigorous in its commentary and legal
citations, the two-volume Voluntary Assignments for the Benefit of
Creditors is neither dense nor ungainly.
Like a good lawyer breaking down a case so it can be comprehended
by a jury of average persons, so does Burrill and Avery-Webb deal
with the topic of voluntary assignments.
Born in 1868 in Tennessee, James Avery-Webb (d. 1953) had a career
as a prominent attorney in New York City.
*********
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
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contact Christopher Beard at 240/629-3300.
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