TCREUR_Public/100716.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, July 16, 2010, Vol. 11, No. 139

                            Headlines



G E R M A N Y

ARCANDOR AG: Berggruen & Valovis Agree on Karstadt Rent Conditions
BAYERISCHE HYPO: S&P Withdraws 'CCC-' Rating on Various Classes
PORTFOLIO GREEN: S&P Downgrades Rating on Class E Notes to 'B+'
VULCAN LTD: S&P Junks Rating on Class E Notes From 'BB-'


G R E E C E

ESTIA MORTGAGE: S&P Cuts Rating on Class C Notes to 'BB-'
THEMELEION III: S&P Downgrades Ratings on Class C Notes to 'BB'
WIND HELLAS: Three Subsidiaries Shift Addresses to London


I C E L A N D

STRAUMUR BURDARAS: Creditors Approve Composition Agreement

* ICELAND: June 16 Foreign Loan Ruling Depletes Banks' Capital


I R E L A N D

ALLIED IRISH: May Not Pass European Stress Tests, Glas Says
ATHENEE CDO: S&P Withdraws 'CCC-' Rating on EUR10 Mil. Notes
BANK OF IRELAND: Likely to Pass European Stress Tests, Glas Says
IBOND SECURITIES: S&P Junks Rating on Series 6A Notes From 'B-'
IRISH NATIONWIDE: Lending Practices & Policies to Be Probed


R U S S I A

INTERREGIONAL JSC: Moody's Assigns 'Ba1' Corporate Family Rating
MOBILE TELESYSTEMS: Comstar Offer "Unfair", Fund Managers Say


S P A I N

HIPOCAT 11: S&P Junks Rating on Class B Notes From 'BBB'

* SPAIN: Banks' ECB Borrowing Up 48% in June, Data Shows


S W I T Z E R L A N D

CRYSTAL CREDIT: S&P Downgrades Rating on Class B Notes to 'CC'


U K R A I N E

* UKRAINE: To Issue US$2 Billion Value-Added Tax Bonds Next Month
* Fitch Upgrades Ukraine's City of Kharkov's Ratings to 'B'
* Fitch Affirms 'B-' Issuer Ratings on Two Ukrainian Cities


U N I T E D   K I N G D O M

BRITISH AIRWAYS: EU Commission Backs AA Alliance, Iberia Merger
DEUTSCHE PFANDBRIEFBANK: Moody's' Reviews Ratings on All Notes
DSG INTERNATIONAL: Fitch Gives Positive Outlook; Keeps 'B' Ratings
NORTEL NETWORKS: Asked by Regulator to Back U.K. Pension Fund
PORTSMOUTH FOOTBALL: Faces Points Penalty If HMRC Appeals CVA

ROYAL BANK: Fitch Upgrades Individual Rating to 'C/D'
SOUTHEND UNITED: Winding-Up Hearing Adjourned Until August 11

* UK: Prepacks Could Become Feature of European CMBS Market
* UK: Regulators Must Force Ailing Banks to Restructure Debts


X X X X X X X X

* EUROPE: Slovakia Seeks Conditions for Bailout Scheme Approval
* EUROPE: Eurozone States With High Debts to Face Scrutiny
* EUROPE: France & Germany to Meet to Tackle Insolvency Procedure
* S&P Takes Various Rating Actions on Five European CDO Tranches

* BOOK REVIEW: The Executive Guide to Corporate Bankruptcy




                         *********



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G E R M A N Y
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ARCANDOR AG: Berggruen & Valovis Agree on Karstadt Rent Conditions
------------------------------------------------------------------
Global Insolvency, citing Dow Jones Newswires, reports that the
representatives of potential Karstadt investor Nicholas Berggruen
and Germany's Valovis Bank said Tuesday they have agreed on the
conditions for a rental agreement over 53 Karstadt properties
following weeks of negotiations.

According to the report, what still remains unresolved is the
financing of a EUR850 million loan Valovis Bank granted the real
estate consortium Highstreet, which owns about two-thirds of the
Karstadt store space.

"What is still missing is an arrangement on a quick, early
repayment of Valovis Bank's loan . . . which expires in 2014 at
the latest," the report quoted Berggruen Holdings and Valovis as
saying in a statement.  "All negotiating parties hope that this
financing issue will also be solved by the Highstreet consortium
to secure the 25,000 jobs at Karstadt and the 30,000 jobs of its
suppliers in the long term."

Germany's Valovis Bank is a major creditor for insolvent
department store chain Karstadt, the report notes.

As reported by the Troubled Company Reporter-Europe on July 8,
2010, Dow Jones Newswires said that a group of bondholders
representing the debt of Karstadt's properties called for a
special meeting in London on July 28 to discuss some of the terms
of Mr. Berggruen's takeover offer for the retailer.  Dow Jones
noted it wasn't clear if the plan for a noteholders' meeting would
trigger an extension of the deal negotiations until July 30 as
Mr. Berggruen proposed.

                        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.


BAYERISCHE HYPO: S&P Withdraws 'CCC-' Rating on Various Classes
---------------------------------------------------------------
Standard & Poor's Ratings Services withdrew its 'CCC-' credit
ratings on classes B, C, and D of the AIG Financial Products Corp.
and Bayerische Hypo-und Vereinsbank AG (Horizon V) US$33 million
unfunded managed portfolio credit default swap transaction.

The rating withdrawals follow the arranger's recent notification
to us of the termination of the transaction.


PORTFOLIO GREEN: S&P Downgrades Rating on Class E Notes to 'B+'
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered and removed from
CreditWatch negative its credit ratings on the class C to E notes
in Portfolio GREEN German CMBS GmbH.  At the same time, S&P
affirmed and removed from CreditWatch negative all other ratings
in the transaction.

This transaction closed in November 2007 and was initially backed
by 416 loans made to 98 borrower groups.  Of the loans, 273 remain
outstanding.  The loans are secured on 111 properties in Germany,
with a concentration in the Federal State of Bavaria (64% by
property value).  The principal balance of the loan pool has now
reduced by 45%, to EUR319.7 million from EUR585.4 million at
closing.

The loan balances of the 10 largest borrower groups range from
EUR6.0 million to EUR97.6 million and they now account for 60% of
the transaction by loan balance.  The loan-to-value ratios are
between 29.7% and 121.6%, with an average of 76.6%, according to
the most recent servicer report from April 2010.  The lowest debt
service coverage ratio among these 10 borrower groups is 1.07x,
while the highest is 6.72x.  Although some of these loans have
partially repaid and show improved LTV ratios, S&P note that other
loans in this group have performed below expectations.

The loans to the largest borrower group in the pool (borrower
group 93, currently accounting for 30.5% of the loan pool balance)
are secured on a single office building in Munich, which is
entirely let under two leases to Deutsche Bahn AG (AA/Stable/A-
1+).  S&P understands that one of the leases was recently
extended, although at a substantially lower rent.  This has
worsened the loans' cash flow position and in turn has, in S&P's
view, had a negative effect on the property value.  S&P
understands, however, that the income from the property is still
sufficient to service the debt.

The loans made to the second-largest borrower group (borrower
group 91, 8.8% of the loan pool balance) are secured on a mixed-
use property in Seeshaupt on Lake Starnberg, south of Munich.
Lake Starnberg is, S&P believe, one of the most sought-after
residential locations in Germany.  The property is mainly used as
a hotel, retirement accommodation, and an administration office.
According to information the servicer recently provided to us, the
business occupying the premises has recently failed to generate
sufficient income to pay the rent.  The annual net operating
income from the property has reduced to EUR1.00 million, from
EUR2.56 million at closing, and is now insufficient to make full
debt service payments.  In S&P's opinion, these factors have
increased the probability of a principal loss from this loan.

There are currently 56 borrower groups whose individual remaining
loan principal balance is lower than EUR6 million.  These borrower
groups form 40% of the total loan pool balance, and their LTV
ratios are between 7.6% and 160.4%, with an average of 79.5%.

The rating actions follow S&P's review of the loan pool.  S&P
notes that no loan principal losses have been realized so far and
that the unrated class H notes would absorb potential interest
shortfalls and principal losses before the rated notes are
affected.  The redemption profile of the transaction, which is
structured so that the class H notes do not receive any repayments
until the more senior classes are repaid, is a positive feature,
in S&P's view.  Nonetheless, in S&P's view the creditworthiness of
the loans generally has declined and S&P has therefore lowered its
ratings on the class C to E notes.

S&P has previously taken rating action on the class F notes to
reflect concerns regarding the replacement of the initial hedging
counterparty Lehman Brothers.  The hedging arrangements have now
been replaced and, in S&P's view, no further action is warranted
in view of the current rating.  In S&P's opinion, the
subordination that the unrated class H notes provides is
sufficient to maintain the current rating on the class G notes.
S&P therefore affirmed its rating on these notes.

S&P has also affirmed the ratings on the class A and B notes.
These classes, to a larger extent, benefit from the loan pool
amortization, which is mainly applied sequentially to the notes.
Consequently, the credit enhancement for the class A notes has
improved to 38.3% from 27.3%, at closing, and class B credit
enhancement has improved to 28.9% from 20.5%.

                           Ratings List

                 Portfolio GREEN German CMBS GmbH
          EUR585.411 Million Secured Floating-Rate Notes

      Ratings Lowered and Removed From CreditWatch Negative

                                Rating
                                ------
            Class        To               From
            -----        --               ----
            C            BBB+             A/Watch Neg
            D            BB               BBB/Watch Neg
            E            B+               BB-/Watch Neg

      Ratings Affirmed and Removed From CreditWatch Negative

                                Rating
                                ------
            Class        To               From
            -----        --               ----
            A            AAA              AAA/Watch Neg
            B            AA               AA/Watch Neg
            F            B-               B-/Watch Neg
            G            B-               B-/Watch Neg


VULCAN LTD: S&P Junks Rating on Class E Notes From 'BB-'
--------------------------------------------------------
Standard & Poor's Ratings Services lowered and removed from
CreditWatch negative its credit rating on Vulcan (European Loan
Conduit No. 28) Ltd.'s class E notes.

The downgrade follows continued interest shortfalls on this class
of notes and reflects S&P's opinion of the increased likelihood
that this class will suffer principal losses -- which, in its
view, impairs its creditworthiness.

Two loans are currently in special servicing, namely the Tishman
German Office Portfolio loan and the Guardian Bonn Rochustrasse
loan.

The TGOP loan, the largest loan in the transaction (38% of the
pool), was transferred to special servicing after a payment
default in May 2009.  This loan is the senior portion of a larger
loan and is secured against eight German office properties in
Frankfurt, Munich, Stuttgart, Berlin, and Dusseldorf.  In S&P's
view, the properties securing the loan, which matures in 2014, are
of a reasonable to good quality and occupy secondary, or nearly
prime, locations.  S&P understands that a loan restructuring
announced in February 2010 envisages, among other features, an
equity injection by way of a loan (up to EUR22 million) to meet
shortfalls and capital expenditures; and a freeze on disbursement
of sale proceeds to lenders until the senior loan is repaid in
full.

Since the time of closing, the vacancy level of the properties
securing the TGOP loan has been significant (16% to 25%) and S&P
notes that the whole-loan interest coverage ratio has remained at
or below 1.00X.  S&P understands that the restructuring plan
addresses the timeliness of interest payments.  S&P is uncertain,
however, of whether the proposed terms will help improve occupancy
levels and therefore the performance of the properties securing
the loan.

Considering these factors, S&P believes that principal losses may
be incurred on this loan and in amounts that would not be fully
absorbed by classes F and G (currently rated 'D').  As such, S&P
believes that full repayment of the class E notes is uncertain.

The GBR loan was transferred to special servicing in April 2010
due to the breach of an interest coverage covenant of 1.10x.  The
GBR loan is the smallest loan in the transaction (0.4% of the
pool) and is secured on a single office property in Bonn, Germany.
At closing, the property was occupied by a Federal State entity
(44% of gross rent), Datatrak (43%), rental guarantee (4%), and
others (9%).  Since February 2009, after the Federal State entity
and Datatrak vacated the property, the guarantee increased to
approximately 96% of rental income.  This guarantee expires in
December 2010.  The loan matures in February 2011, and considering
the significant level of vacancy, S&P believes that principal
losses are likely to be incurred on this loan also.  In S&P's
view, however, principal losses would be limited to the class G
notes, which are currently rated 'D'.

The special servicing fees associated with these two loans, which
rank senior to interest payments due on the notes, are neither
absorbed by class X, nor funded by servicer advances.  The fees
have therefore resulted in interest shortfalls on the classes E,
F, and G notes.

As of May 2010, total accrued interest shortfalls on the class E
notes equated to 0.8% of the class E note balance.  Although the
restructuring of the TGOP loan was recently completed in April
2010, the most recent special servicing report indicates that the
loan will remain in special servicing for two further collection
periods.  Therefore, S&P expects that special servicing fees will
continue to cause interest shortfalls on the class E notes for at
least the next two interest payment dates.  S&P notes that if
other loans in the transaction were transferred to special
servicing, the special servicing fees associated with those loans
would similarly result in interest shortfalls at the note level.

If note interest shortfalls continue to accumulate, S&P may lower
the rating on the class E notes further to 'D'.

Vulcan closed in August 2007 and is backed by a pool of 14 loans
secured against 74 commercial and residential properties located
across Europe.  The current reported loan (and note) balance is
EUR947.5 million.  The largest loan in the pool is the TGOP loan,
which has a current balance of EUR360.176 million and accounts for
38% of the loan pool.  Vulcan owns the senior-ranking portion of
the TGOP loan.

                           Ratings List

            Vulcan (European Loan Conduit No. 28) Ltd.
     EUR1,076.415 Million Commercial Mortgage-Backed Variable-
                     And Floating-Rate Notes

       Rating Lowered and Removed From CreditWatch Negative

                               Rating
                               ------
              Class       To            From
              -----       --            ----
              E           CCC-          BB-/Watch Neg


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ESTIA MORTGAGE: S&P Cuts Rating on Class C Notes to 'BB-'
---------------------------------------------------------
Standard & Poor's Ratings Services lowered and removed from
CreditWatch negative its credit ratings on Estia Mortgage Finance
II PLC's class B and C notes.  At the same time, S&P affirmed the
rating on the class A notes.

S&P had placed the class A, B, and C notes on CreditWatch negative
on April 30, 2010, following the downgrade of S&P's long-term
sovereign rating on Greece to 'BB+' from 'BBB+' on April 27.

On May 10, S&P revised its assessment of Greek sovereign risk and
subsequently lowered its rating on class A.  S&P also kept classes
B and C on CreditWatch negative.

Following its revised assessment, S&P concluded that the ratings
on Greek securitization notes should be no higher than 'A' and
that the notes should be able to withstand losses that would be at
least double the initial loss expectations for each rating level.

The rating actions follow S&P's cash flow analysis of Estia
Mortgage Finance II, which took into account the updated credit
numbers and the structural mechanisms providing enhancement in the
transaction.  S&P based its updated credit analysis on its
assessment of the residual collateral portfolio characteristics
and transactional performance following its revised assessment of
Greek sovereign risk.

Since closing, Estia Finance Mortgage II's portfolio has recorded
a small amount of deleveraging, due to the revolving mechanism in
place during the first 18 months and the low prepayment ratio
recorded so far (below 4% in the last year).  The pool factor as
of the latest interest payment date was about 89.5%.

Due to the low deleveraging experienced, credit enhancement has
increased slightly for all classes of notes -- particularly, to
12.52% from 11.50% for class A, to 4.52% from 4.20% for class B,
and to 2.72% from 2.50% for class C.

At the last IPD, the cash reserve was at its target level of
EUR31,250,000.  Subject to certain conditions, it can amortize
with a floor of EUR6,125,000.

The transaction has shown a deterioration over the past year, with
an increasing trend in absolute and relative arrears levels.  As
of the end of the latest collection period, mortgage loans in
arrears for more than 30 days and 90 days were 7.37% and 1.47%,
respectively.

Estia Mortgage Finance II features a structural mechanism that
traps excess spread to cover 100% of the balance of defaulted
mortgages, and all defaulted amounts have been covered.

At the last IPD, the cumulative default amount was 1.17%.  The
transaction features an interest payment deferral mechanism for
the class B and C notes, providing additional protection to the
class A notes.  This mechanism applies if the net cumulative
default ratio increases above 12.4% for the class B notes, or 9.5%
for the class C notes, as a percentage of the total amount of the
original balance.

Estia Mortgage Finance II is backed by Greek mortgage loans
originated by Piraeus Bank S.A. (BB/Negative/B).

                           Ratings List

                   Estia Mortgage Finance II PLC
        EUR1.25 Billion Mortgage-Backed Floating-Rate Notes

       Ratings Lowered and Removed From CreditWatch Negative

                               Rating
                               ------
              Class       To            From
              -----       --            ----
              B           BBB-          A/Watch Neg
              C           BB-           BBB/Watch Neg

                          Rating Affirmed

                        Class       Rating
                        -----       ------
                        A           A


THEMELEION III: S&P Downgrades Ratings on Class C Notes to 'BB'
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its credit ratings on
Themeleion III Mortgage Finance PLC's class C notes.  At the same
time, S&P affirmed the ratings on the class A, M, and B notes.

S&P had placed the class A, M, B, and C notes on CreditWatch
negative on April 30, 2010, following S&P's downgrade of the long-
term sovereign rating on Greece to 'BB+' from 'BBB+' on April 27.

On May 18, S&P revised its assessment of Greek sovereign risk and
S&P lowered the ratings on classes A, M, and B.  At the same time,
S&P kept the class C notes on CreditWatch negative.

Following S&P's revised assessment of Greek sovereign risk, S&P
concluded that its ratings on Greek securitization notes should be
no higher than 'A' and that the notes should be able to withstand
losses that would be at least double the initial loss expectations
for each rating level.

The rating actions follow S&P's cash flow analysis of Themeleion
III, which took into account the updated credit numbers and the
structural mechanisms providing enhancement in the transaction.
S&P based its updated credit analysis on its assessment of the
residual collateral portfolio characteristics and transactional
performance following S&P's revised assessment of Greek sovereign
risk.

Themeleion III's portfolio benefits from decreasing leverage due
to considerable seasoning.  The pool factor as of the latest
interest payment date was about 22.6%.

The transaction has performed in line with S&P's expectations over
the past year, with a decreasing trend in absolute and relative
arrears levels.  As of the end of the latest collection period,
mortgage loans in arrears for more than 30 days and 90 days were
5.04% and 1.03%, respectively.

Themeleion III features a structural mechanism that traps excess
spread to cover 100% of the balance of defaulted mortgages, and
all defaulted amounts have been covered.

At the last IPD, the cumulative default amount was 0.5%.  The
transaction features an interest payment deferral mechanism for
the class M, B, and C notes, which provides additional protection
to the class A notes.  This mechanism applies if the net
cumulative default ratio increases above 19.4% for the class M
notes, 13.9% for the class B notes, or 9.75% for the class C
notes, as a percentage of the total amount of the original
balance.

The transaction is currently amortizing pro rata and the level of
credit enhancement has greatly increased for all classes of notes
since closing.  In particular, it has increased to 22.7% from
11.3% for the class A notes, to 14.4% from 7.3% for the class M
notes, to 10.3% from 5.3% for the class B notes, and to 2.0% from
1.3% for the class C notes.  S&P expects the level of credit
enhancement to increase further from the next IPD, when the level
of the amortizing cash reserve should reach the floor of
EUR5,000,000.  The cash reserve is currently at the target level,
equal to EUR5,054,900.

Greek mortgage loans, which EFG Eurobank Ergasias S.A.
(BB/Negative/B) originated, back Themeleion III.

                           Ratings List

                Themeleion III Mortgage Finance PLC
     EUR1 Billion Mortgage-Backed Floating-Rate Notes Due 2043

                          Rating Lowered

                                   Rating
                                   ------
                  Class       To            From
                  -----       --            ----
                  C           BB            BBB

                         Ratings Affirmed

                        Class       Rating
                        -----       ------
                        A           A
                        M           A
                        B           A


WIND HELLAS: Three Subsidiaries Shift Addresses to London
---------------------------------------------------------
Global Insolvency, citing Dow Jones Daily Bankruptcy Review,
reports that Wind Hellas said Tuesday three of its subsidiaries
have shifted their addresses and principal place of business to
London from Luxembourg, in a move that could aid a potential debt
restructuring.

The report relates news of the relocation comes as Wind Hellas
conducts a strategic review, which includes the potential sale of
the business and a capital restructuring, after the company's
performance continues to suffer in the wake of the Greek
government's austerity measures.

According to the report, under European Commission insolvency
regulations, restructurings are conducted in a company's center of
main economic interest which is usually deemed as being where the
company's registered office is located.

The report says the move to London allows Wind Hellas to take
advantage of the U.K.'s insolvency laws, which are considered more
favorable than some European countries where restructurings can be
both lengthy and costly.

On July 2, 2010, the Troubled Company Reporter-Europe, citing
Bloomerg News, reported that Wind Hellas said it reached a
standstill agreement with lenders and creditors until Nov. 5.

                        About WIND Hellas

Headquartered in Athens, Greece, WIND Hellas Telecommunications
S.A. -- http://www.wind.com.gr/-- provides mobile voice and data
services to about 6 million consumer and business customers
throughout Greece.  The company enables international roaming in
155 countries for travelling subscribers through agreements with
other carriers.  It also provides cellular and satellite-based
vehicle management and tracking services.  WIND Hellas is owned by
investment firm Weather Investments, a company led by Cairo-based
Orascom Telecom's founder and chairman, Naguib Sawiris.

                          *     *     *

As reported by the Troubled Company Reporter-Europe on July 7,
2010, Standard & Poor's Ratings Services said that it lowered its
long-term corporate credit ratings on Greek mobile
telecommunications operator WIND Hellas Telecommunications S.A.
and related entities to 'SD' from 'CC'.  S&P said the downgrade to
'SD' (selective default) mainly reflects the group's agreement
with some of its lenders to defer until Nov. 5, 2010, under the
terms of the standstill agreement, a EUR17.5 million amortization
payment under its RCF and payments due on July 15, 2010 relating
to hedging contracts.  The downgrade also reflects S&P's view that
the group's capital structure has become unsustainable in the
short to medium term, and consequently that WIND Hellas is highly
likely to undergo a capital restructuring in the very short term,
the second in about eight months.


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STRAUMUR BURDARAS: Creditors Approve Composition Agreement
----------------------------------------------------------
The creditors of Straumur Burdaras Investment bank have voted on
and approved a Composition Agreement for the company on Tuesday,
July 13, 2010.  By virtue of the Agreement, the ownership and
control of the company is transferred to creditors who will
convert a part of their claims for shares and receive a bond
issued by the company.

The assets of Straumur will in the coming years be managed and
sold with the aim of maximizing the recovery of creditors. It is
projected that secured creditors, i.e. the Icelandic state and
Islandsbanki, will get their claims paid in full.  Unsecured
creditors can expect a recovery of close to one half of their
claims.

The Composition Agreement furthermore lays the foundations for
Straumur's ongoing investment banking operations in Iceland within
a separate legal entity.

In all, creditors holding 99.6% of unsecured claims voted in
favour of the Composition Agreement.

Reynir Vignir, chairman of the Straumur Resolution Committee: "The
Resolution Committee is very pleased with the decisive support
Straumur's Composition Agreement, received in [Tues]day's vote.
From the outset, the Resolution Committee, the Committee members,
the staff of Straumur as well as the Winding Up Board have enjoyed
a close cooperation with Straumur's creditors and the result of
[Tues]day's vote is in line with our expectations.  The creditors
have had access to information pertaining to the company's status
since the Resolution Committee was formed and to the Composition
Agreement for the last few months.  They obviously regard the
Agreement as beneficial.  The next weeks will see the transition
of power to the creditors in accordance with Straumur's
restructuring plan."

Ragnar H. Hall, Supreme Court Attorney and member of Winding Up
Board: "The Winding Up Board views this extensive support of
Straumur's restructuring, in a way that stakeholders take control
of the company and are thus able to take action to secure maximum
repayments of their claim, as an extremely positive one for the
company and indeed the Icelandic financial system as a whole.  It
is still important to stress that the Agreement does not become
valid until ratified by the Icelandic Courts."

Ottar Palsson, Straumur CEO: "The restructuring of Straumur is a
result of a close cooperation between the company's staff, The
Resolution Committee, The Winding Up Board, advisers and major
creditors during the past few semesters.  It is a great pleasure
that the Composition Agreement is now agreed upon by the creditors
and by this overwhelming majority.  Ahead of us are important
tasks and we are determined to live up to the trust, which the
company's new owners have vested in us."

                       Straumur's Position

Background

Due to special circumstances in the financial market, on March 9,
2009, the Icelandic Financial Supervisory Authority (FME), under
the emergency act, assumed control over Straumur/Burdarás
Investment Bank.  A resolution committee was subsequently
appointed, taking over all the authority of Straumur's board of
directors and shareholder's meeting.  Straumur was immediately
closed for business and ten days later the bank was granted a
moratorium by the Reykjavík District Court.  The objective of the
resolution committee was to maximize the value of Straumur's
assets for the benefit of all of its creditors.  Around 50
employees at Straumur's offices in Reykjavik, London and
Copenhagen have since worked towards this goal.

Assets and Asset Management

Straumur holds 143 assets in its portfolio with a total estimated
value of EUR1.2 billion of which more than 90% are outside of
Iceland.  The asset portfolio is diversified geographically and by
sector, with the largest exposure being to Denmark with 24% of
total estimated value as well as to the real estate sector with
22% of total estimated value.  The top 20 assets represent
approximately 78% of the total estimated value of the asset
portfolio.

A number of Straumur's assets require active, daily hands-on
management by Straumur's employees, which has posed a great
challenge following Straumur's moratorium and the ongoing
financial crisis.  Over the past fifteen months Straumur has led
seventeen major restructurings among its assets to avoid them
reducing in value or to improve their value, working towards the
sole goal of maximizing the recovery rate of creditors.

Creditors and the Informal Credit Committee

Straumur has 120 composition creditors of mainly financial
services companies, investment funds and pension funds, the
largest being Landsbankinn, Raffeisen Zentralbank Osterreich,
Goldman Sachs Lending Partners, Bayerische Landesbank and Deutsche
Bank.  Priority creditors and secured creditors such as the
Icelandic state and Islandsbanki, as relates to the transfer of
Straumur's deposits to Islandsbanki, will have their claims paid
in full.

In April 2009, Straumur's largest composition creditors formed an
informal credit committee (ICC), which represents 12 creditors,
which in total hold more than 60% of Straumur's unsecured claims.
Straumur's management has ever since worked closely with ICC.  The
restructuring plan is a result of that cooperation.

Restructuring

Straumur's restructuring plan has the purpose of transferring the
ownership and control of the company to the composition creditors.
Given the Icelandic Courts ratify it, an Asset and Liability
Management Company (ALMC) solely owned by composition creditors
will be established to take over all of Straumur's assets.  The
focus of the ALMC is to maximize the value of its assets for the
benefit of creditors (owners).  Under the ALMC, broking and
advisory business will be re-established in a small-scale
investment bank, which subsequently will be demerged from ALMC.
The recovery to composition creditors in Straumur management's
last expected case is 47%.

The Composition Agreement

According to the composition agreement, the ALMC will issue bonds
maturing on Dec. 31, 2014 to composition creditors that will have
face value equal to 99% of the value of their claim and ordinary
shares with nominal value of 1% of their claims.  Together, the
bonds and the shares form depositary units tradable on both
Euroclear and Clearstream clearing systems.  The bonds have the
potential for further two years' extension if so decided by an
extended majority of two thirds of the bondholders, at which time
the bonds will convert into ordinary shares of the ALMC.

                       About the Company

Straumur-Burdaras Fjarfestingabanki hf a.k.a Straumur-Burdaras
Investment Bank hf -- http://www.straumur.net/-- is an Iceland-
based investment bank.

On March 9, 2009, Straumur-Burdaras was nationalized by Icelandic
authorities after its funding dried up.

On June 2, 2009, Hordur Felix Hardarson, in his capacity as the
foreign representative of Straumur-Burdaras Investment Bank hf,
filed a petition for Chapter 15 in the United States Bankruptcy
Court for the Southern District of New York seeking recognition of
its proceeding currently pending in Iceland as a foreign main
proceeding.  The case is In re Straumur-Burdaras Investment Bank
hf, 09-13592, U.S. Bankruptcy Court, Southern District of New York
(Manhattan).  Matthew P. Morris, Esq., at Lovells LLP, represents
the Chapter 15 petitioner as counsel.  The debtor's petition lists
both assets and liabilities as over US$1 billion.


* ICELAND: June 16 Foreign Loan Ruling Depletes Banks' Capital
--------------------------------------------------------------
Omar R. Valdimarsson at Bloomberg News reports that
Iceland's creditor-controlled banks face a second round of
failures as a court ruling depletes their capital while the
government and pension funds balk at providing additional
financing, according to regulators and investors.

According to Bloomberg, the Finance Ministry said lenders,
including the successors to failed Kaupthing Bank hf, Glitnir Bank
hf and Landsbanki Islands hf, may lose as much as US$4.3 billion,
equal to a third of Iceland's economy, after a June 16 Supreme
Court decision banned loans indexed to foreign currencies.
Bloomberg relates Gunnar Andersen, head of the Financial
Supervisory Authority, said that would push the capital of some
banks below the legal minimum.

"We'd give them a deadline to make adjustments, about one
or two months," Bloomberg quoted Mr. Andersen as saying in a July
9 interview in Reykjavik.  "That time could be used to sell assets
or raise new capital. Failing that, they'd risk losing their
licenses."

Bloomberg notes Economy Minister Gylfi Magnusson said in an
interview that the government probably won't rescue the banks this
time because of its high debt levels.  According to Bloomberg, the
central bank estimates that the government's gross debt will peak
at 110% of gross domestic product this year, the central bank
estimates.

Bloomberg says pension funds also may be unwilling to help the
state bail out the banks.  "There are limits on the amounts the
pension funds can lend to the government," Hrafn Magnusson,
managing director of the Icelandic Pension Fund Association, said,
according to Bloomberg.

The banks are waiting for a separate ruling on the interest rates
that apply to loans affected by the June decision, Bloomberg
notes.  The central bank and FSA have recommended lenders be
allowed to charge higher Icelandic rates instead of the
contractual rates linked to the Swiss franc and Japanese yen, the
report states.

As reported by the Troubled Company Reporter-Europe, Bloomberg
News said the Supreme Court ruled June 16 that loans indexed to
foreign-currency rates were illegal in three cases involving
private car loans and a corporate property loan.  Bloomberg
disclosed the decisions may mean that borrowers with such loans
are only obliged to repay the principal in kronur, making the
lenders liable for currency losses on about US$28 billion in debt
after a third of the krona's value against the Japanese yen and
Swiss franc was erased since September 2008.


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


ALLIED IRISH: May Not Pass European Stress Tests, Glas Says
-----------------------------------------------------------
Joe Brennan at The Irish Examiner reports that Glas Securities,
which specializes in fixed-income markets, says Allied Irish Bank
may find it difficult to pass European stress tests as its capital
raising won't be finished before results are due.

Allied Irish is seeking to raise EUR7.4 billion to meet targets
set by the country's Financial Regulator in March, the report
discloses.

"AIB is still in the initial stages of its capital-raising
program, which makes it difficult for AIB to pass the EU test as
it will be determined using current capital levels while not
taking into account any future capital raising plans," Dublin-
based Glas said in a note to clients according to the report.

The report notes Glas said an 8% discount on its sovereign bond
holdings would cost Allied Irish EUR791 million.

Allied Irish Banks, p.l.c., together with its subsidiaries --
http://www.aibgroup.com/-- conducts retail and commercial banking
business in Ireland.  It also provides corporate lending and
capital markets activities from its head office at Bankcentre and
from Dublin's International Financial Services Centre.  The Group
also has overseas branches in the United States, Germany, France
and Australia, among other locations.  The business of AIB Group
is conducted through four operating divisions: AIB Bank Republic
of Ireland division, Capital Markets division, AIB Bank UK
division, and Central & Eastern Europe division.  In February
2008, the Group acquired the AmCredit mortgage business in the
Baltic states of Latvia, Lithuania and Estonia.  In September
2008, the Group also acquired a 49.99% shareholding in BACB.

                           *     *     *

Fitch Ratings affirmed Allied Irish Banks plc continues to carry a
'D/E' individual rating from Fitch Ratings.  The rating was
affirmed by Fitch in December 2009.


ATHENEE CDO: S&P Withdraws 'CCC-' Rating on EUR10 Mil. Notes
------------------------------------------------------------
Standard & Poor's Ratings Services withdrew its 'CCC-' credit
rating on Athenee CDO PLC's EUR10 million tranche A2 secured
floating-rate series 2006-6 notes.

The rating withdrawal follows the arranger's recent notification
to us that Athenee CDO has fully repurchased the notes for
cancellation.


BANK OF IRELAND: Likely to Pass European Stress Tests, Glas Says
----------------------------------------------------------------
Joe Brennan at Irish Examiner reports that Glas Securities, which
specializes in fixed-income markets, said that Bank of Ireland is
"likely to pass" the European stress tests after raising EUR2.9
billion of capital in June.

According to the report, Glas said an 8% discount on its sovereign
bond holdings would cost Bank of Ireland EUR213 million.

Headquartered in Dublin, Bank of Ireland --
http://www.bankofireland.com/-- provides a range of banking and
other financial services.  These include checking and deposit
services, overdrafts, term loans, mortgages, business and
corporate lending, international asset financing, leasing,
installment credit, debt factoring, foreign exchange facilities,
interest and exchange rate hedging instruments, executor, trustee,
life assurance and pension and investment fund management, fund
administration and custodial services and financial advisory
services, including mergers and acquisitions and underwriting.
The Company organizes its businesses into Retail Republic of
Ireland, Bank of Ireland Life, Capital Markets, UK Financial
Services and Group Centre.  It has operations throughout Ireland,
the United Kingdom, Europe and the United States.

                           *     *     *

As reported by the Troubled Company Reporter-Europe on April 7,
2010, Fitch Ratings affirmed the rating on Bank of Ireland's
Tier
1 notes at 'CCC' (ISINs: XS0268599999, US055967AA11 and
USG12255AA64).

At the same time, Moody's Investors Service placed Bank of
Ireland's D bank financial strength rating (BFSR -- mapping to a
baseline credit assessment of Ba2) on review for possible upgrade,
previously they had a developing outlook.


IBOND SECURITIES: S&P Junks Rating on Series 6A Notes From 'B-'
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its credit rating on
series 6A of iBond Securities PLC's unleveraged index trade.

Following downgrades and CreditWatch negative placements of
entities in the underlying reference portfolio, the portfolio
weighted-average rating has lowered.  This rating does not address
the likelihood of loss.  However, S&P notes that series 6A has
suffered a default in its reference portfolio.

Index trades can be leveraged or unleveraged.  S&P's analysis of a
leveraged trade is largely identical to that of a typical
synthetic collateralized debt obligation.

In S&P's opinion, unleveraged index trades typically have a
probability of loss that is greater than at the 'CCC-' rating
level.  Thus, for unleveraged index trades S&P assign the
portfolio weighted-average rating, which indicates the "average
credit quality" to which an investor in an index is exposed.

                           Ratings List

                          Rating Lowered

                       iBond Securities PLC
  EUR500 Million iTraxx Europe Crossover Fixed-Rate Credit-Linked
                     Secured Notes Series 6A

                             Rating
                             ------
                       To              From
                       --              ----
                       CCC+            B-


IRISH NATIONWIDE: Lending Practices & Policies to Be Probed
-----------------------------------------------------------
Simon Carswell at The Irish Times reports that Irish Nationwide
plans to hire law firm McCann Fitzgerald and accountants Ernst
Young to investigate lending policies and practices followed by
the building society under the management of former chief Michael
Fingleton.

According to the report, the building society has been asked to
develop a legacy plan by the Irish government.  It has effectively
been nationalized following the government's commitment to inject
EUR2.7 billion into it.

The report says Irish Nationwide must investigate past lending
practices and policies to establish how it collapsed into
insolvency warranting such a large commitment of State capital.

The Department of Finance has yet to sign off on the appointment
of McCann Fitzgerald and Ernst Young to carry out the
investigation at the state-controlled lender, the report notes.

Irish Nationwide Building Society, headquartered in Dublin,
Ireland, had total assets of EUR14.4 billion at year-end 2008.

                           *     *     *

As reported by the Troubled Company Reporter-Europe on April 7,
2010, Fitch Ratings downgraded the Individual rating of Irish
Nationwide Building Society to 'F' from 'E'.  The rating has been
downgraded to 'F' to reflect that, in Fitch's opinion, it would
have defaulted if it had not received external support.


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


INTERREGIONAL JSC: Moody's Assigns 'Ba1' Corporate Family Rating
----------------------------------------------------------------
Moody's Investors Service has assigned a Ba1 corporate family
rating and a Ba1 probability of default rating to JSC
Interregional Distribution Grid Companies Holding, the ultimate
holding company for 11 region-focused distribution grid
businesses, which essentially form the Russian power distribution
grid sub-sector.  The rating outlook is stable.  At the same time,
Moody's Interfax Rating Agency, which is majority-owned by
Moody's, has assigned an Aa1.ru national scale credit rating to
IDGC Holding.

According to Moody's and Moody's Interfax, the Ba1 global scale
rating reflects Moody's expectations with regard to IDGC Holding's
global default and loss, while the Aa1.ru NSR reflects the
standing of the company's credit quality relative to its domestic
peers.

The Ba1/Aa1.ru CFR assigned to IDGC Holding incorporates: (i) a
moderately risky business profile given its position as a
regulated monopoly operating in Russia's emerging regulatory
environment; (ii) a relatively conservative but evolving financial
profile; and (iii) a two-notch uplift for potential support from
its majority shareholder, the Russian Federation.  Moody's
assessment of a moderately risky business profile of IDGC Holding
factors in the higher risk of its subsidiaries' regulated grid
monopoly businesses in Russia compared with the generally low
business risk profiles of peers operating in developed markets.
More broadly, Russia's immature business environment also
contributes to the business risk assessment.

The stable rating outlook reflects Moody's belief that IDGC
Holding should be able to maintain a financial profile
commensurate with its current rating.

The Ba1/Aa1.ru CFR is based on the consolidated business and
financial profile of IDGC Holding and the businesses within the
group, and, as such, reflects the consolidated group's credit
profile and ignores priority of claim.  Moody's notes that the
majority of the group debt is located at the operating
subsidiaries' level and that the claims of creditors of IDGC would
be subordinated to those of operating subsidiaries' creditors.

The group's CFR and the ratings within the group (MOESK and
Lenenergo, two Ba2/STA-rated operating subsidiaries) are
influenced by the rating of the group's majority shareholder, the
Russian Federation, although to a different extent.  IDGC
Holding's operating subsidiaries, including those that are rated,
are supported by the state mainly through the holding company.  As
a result, IDGC Holding's CFR factors in a higher state support
assumption (equivalent to a two-notch uplift) than that
incorporated into MOESK's and Lenenergo's ratings (equivalent to a
one-notch uplift).  At the same time, the group's financial
standing is largely determined by a few operating subsidiaries,
including those that are rated, which service relatively wealthy
regions and account for the major part of the group's revenue,
EBITDA and cash flow, investment and debt burden.  The holding
company's financial resources are relatively low.  However,
Moody's expects limited growth of external debt (currently, there
is none) at the holding company level in the medium term, which is
a consideration for the rating agency's assessment of the stand-
alone credit quality of the consolidated group and that of its
strongest subsidiaries as currently broadly comparable.

Moody's assessment of IDGC Holding's moderately risky business
profile positively reflects: (i) its subsidiaries' position as the
monopoly distribution grid businesses in Russia; (ii) advantages
of the geographical diversification of its operations; and (iii) a
generally supportive tariff regulation, which recognizes the
importance of the group's business for both the whole economy and
regional development.  The Russian government is working on
introducing greater transparency and stability to the country's
regulatory framework, including the roll-out of a Regulatory Asset
Base (RAB)-based regulation across all regions to enable IDGC
Holding's subsidiaries to invest in their asset base.

At the same time, Moody's notes a number of challenges facing the
group, including: (i) an evolving regulatory framework in the
domestic distribution grid sub-sector, which sees the main parties
under common government guidance and influence; (ii) the very
short track record of IDGC Holding's operations in the group's
current configuration, and of its management's policy, as well as
some uncertainties surrounding the consolidation of the
electricity distribution sub-sector under IDGC Holding's
management; (iii) a large capital investment program, required by
the group subsidiaries' largely outdated assets, which involves a
degree of execution risk and will challenge the group's financial
profile and liquidity management.

In Moody's view, the evolving regulatory environment and the
limited track record of IDGC Holding's operations in the group's
current form represent the key risks in the context of the
assessment of IDGC Holding's business profile.  The new RAB-based
regulation has yet to be fully introduced and Moody's notes that,
given the current market and regulatory structures, the main role
of economic regulation at the moment is to achieve government
policy goals.  Given the distribution grid sub-sector's 30%
contribution to total tariffs for consumers, the sensitivity to
higher grid tariffs driven by the RAB regulation is high and,
going forward, these will remain subject to political interference
at both the federal and regional government level in the process
of the introduction and monitoring of the regulation, especially
at times of difficult economic conditions.  At present, Moody's
does not expect the introduction of the new system of tariff
regulation to weaken IDGC Holding's consolidated operating cash
flow below current levels.  However, the rating agency remains
concerned about whether the regulation can reasonably strengthen
the cash flow generation of IDGC Holding's subsidiaries, and
thereby enable the group to finance its investments without
raising a substantial amount of debt in the short to medium term.

IDGC Holding's consolidated financial profile is currently
relatively conservative, with a debt/EBITDA ratio of approximately
around 2.1x and a funds from operations/net debt ratio of around
40% in 2009 (all ratios incorporate Moody's standard adjustments).
Although strong for a Ba rating in the broad international
context, Moody's considers the group's metrics to be appropriate
for a business operating in a regulatory environment that is
difficult to predict.  Given its substantial investment program
for 2010-2012 of approximately RUB380 billion, the group's
leverage may increase.

Moody's notes a risk of pressure on the liquidity of IDGC
Holding's subsidiaries in the context of the group's relatively
limited flexibility with regard to its investment program,
covenants in credit facilities and liquidity management policy.
The latter largely relies on the group's status as a state-
controlled monopoly and its established relationships with state-
owned banks and does not necessarily require funding needs to be
addressed far in advance.

Moody's positively notes that IDGC Holding has access to state
support in the normal course of its business, ranging from direct
funding of the group's involvement in the strategic state projects
(e.g. associated with the 2014 Winter Olympic Games in Sochi) to
state-encouraged general agreements between IDGC Holding's and
state-owned banks to support the group's investments and liquidity
needs.  The rating agency also takes comfort from management's
stated commitment to pursue a conservative financial policy,
although this may be difficult to achieve going forward as a
result of the evolving regulatory framework and the group's
investment needs.

For IDGC Holding to maintain the current rating, Moody's would
expect the group's FFO/interest coverage ratio and its FFO/net
debt ratio to remain above 3x and above 20%, respectively.

As the Russian governments currently owns a 52.68% stake in IDGC
Holding and is closely involved in the grid sub-sector's
development, Moody's considers the group to be a government-
related issuer.  In accordance with Moody's rating methodology for
GRIs, the Ba1 CFR incorporates an uplift for the state's potential
support to the group's stand-alone credit quality, measured by a
Baseline Credit Assessment of 13 (on a scale of 1 to 21, where 13
is equivalent to a Ba3).  The uplift is driven by the credit
quality of the Russian government (rated Baa1/STA) and Moody's
assessment of a high probability of state support in the event of
financial distress, as well as high default dependence between the
group and the state.

Moody's assessment of high dependence factors in both IDGC
Holding's focus on the domestic market and the probability that,
if the state were in financial distress, the group's business and
financial standing would be affected.  The rating agency's
assumption of high support reflects (i) the shareholder structure
and the government's involvement in the group's management; and
(ii) the strategic importance of the group as a provider of
essential utility services.

This is the first time that Moody's has assigned a rating to IDGC
Holding

Headquartered in the city of Moscow, IDGC Holding is the holding
company for 11 core operating subsidiaries, which are regulated
monopoly interregional distribution grid businesses operating in
69 regions of Russia.  The regions cover 45% of the Russian
territory, where around 87% of the country's population lives.
In 2009, the group's consolidated revenue amounted to
RUB461.7 billion (US$14.6 billion).  A 52.68% stake in the group
is owned by the Russian government.


MOBILE TELESYSTEMS: Comstar Offer "Unfair", Fund Managers Say
-------------------------------------------------------------
Jason Corcoran at Bloomberg News reports that Prosperity Capital
and East Capital, the two largest managers of Russia-focused
funds, said OAO Mobile TeleSystems' offer for OAO Comstar United
TeleSystems is "unfair" and should be rejected.

According to Bloomberg, Prosperity and East, which together own 3%
of Comstar, said an offer by MTS for a 9% stake at a price of 220
rubles per share undervalues the telephony and internet company.
Bloomberg recalls the companies said last month the deal may see
MTS pay about US$1 billion in cash and stock.

"We are demanding an improved offer and we will be going to the
board of Comstar and its independent directors to reject the
current terms," Bloomberg quoted Alexander Branis, chief
investment officer at Prosperity, as saying in a phone interview
this week.  "Comstar deserves a premium given its superior growth
outlook, scope to improve profitability and lower leverage."

MTS, which owns about 62% of Comstar, is seeking full control to
cut costs and tap growing demand for Internet services in eastern
Europe, Bloomberg discloses.

Under the merger, Comstar will be folded into MTS and cease to
exist as a separate entity, Bloomberg states.  The companies
expect to complete the deal, which requires approval from 75% of
shareholders, in the second quarter of 2011, Bloomberg notes.

Headquartered in Moscow, Mobile TeleSystems OJSC --
http://www.mtsgsm.com/-- is a provider of mobile cellular
communications services in Russia, Uzbekistan, Turkmenistan and
Armenia and Ukraine.  During the year ended December 31, 2008, the
Company had a subscriber base of 91.33 million (64.63 million in
Russia, 18.12 million in Ukraine, 5.65 million in Uzbekistan, 0.93
million in Turkmenistan and 2.02 million in Armenia).  In addition
to standard voice services, the Company offers its subscribers
value added services, including voice mail, short message service
(SMS), general packet radio service (GPRS), augmented by enhanced
data rates for GSM evolution (EDGE), high-speed downlink packet
access (HSDPA), and various SMS- and GPRS/EDGE/HSDPA-based
information and entertainment services (including multi media
message service (MMS)).  It also offers its subscribers the
ability to roam automatically throughout Europe and in much of the
rest of the world.

                           *      *      *

As reported by the Troubled Company Reporter-Europe on June 18,
2010, Moody's Investors Service assigned a (P) Ba2, LGD4/58%
rating to Mobile TeleSystems OSJC's issuance of US$750 million
8.625% Loan Participation Notes due 2020.  MTS's other ratings
remain unchanged (Ba2 corporate family and Ba2 senior unsecured
ratings).  Moody's said the outlook for all ratings is stable.


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


HIPOCAT 11: S&P Junks Rating on Class B Notes From 'BBB'
--------------------------------------------------------
Standard & Poor's Ratings Services lowered and kept on CreditWatch
negative its credit ratings on the class A2, A3, and B notes in
Caixa d'Estalvis de Catalunya's Spanish residential mortgage-
backed securities transaction, Hipocat 11, Fondo de Titulizacion
de Activos.

S&P's cash flow analysis factored in its assessment of the current
levels of credit enhancement in this transaction and takes into
account the updated information that S&P has received so far from
the trustee, Gestion de Activos Titulizados, S.G.F.T., S.A.  This
information incorporates the cumulative default levels as of the
July 2010 determination date.

The notes will remain on CreditWatch negative until the trustee
corrects the information provided in the previous transaction
reports, and S&P determine whether the information provided is
consistent with the current ratings.

This transaction features a structural mechanism that traps excess
spread to provide for defaults, defined as arrears greater than 18
months.  As a significant portion of loans are classified as
defaulted in this transaction, the cash reserve was fully drawn as
of the October 2009 payment date.  There has been no excess spread
left on subsequent payment dates to replenish it.

This transaction also includes a deferral-of-interest trigger,
based on cumulative defaults as a percentage of the initial
collateral balance.  The current cumulative default level and
trigger levels (both as a percentage of the initial collateral
balance), taking into account the updated information that S&P has
received from the trustee so far, are:

Current cumulative default level: 12.71% on the July 2010
determination date, up from 10.15% on the April 2010 payment date.
The trustee uses these levels to calculate the triggers and are
different from the ones the trustee reports in the transaction
reports.

Trigger levels: Class B (13.20%) and class C (8.90%).

In addition to rising defaults, the mortgage portfolio underlying
this transaction is experiencing a high delinquency level,
although S&P understands it has recently stabilized.  As of the
trustee's May 2010 monthly report, S&P calculate severe
delinquencies -- defined as arrears greater than 90 days
(including outstanding defaulted loans) -- at around 6.56% of the
current collateral balance.  S&P took the performance into
consideration in S&P's analysis.

Hipocat 11 issued its notes in March 2007.  Caixa d'Estalvis de
Catalunya originated and services the loans.

                           Ratings List

           Hipocat 11, Fondo de Titulizacion de Activos
  EUR1.62 Billion Residential Mortgage-Backed Floating-Rate Notes

         Ratings Lowered and Kept On CreditWatch Negative

                             Rating
                             ------
          Class    To                     From
          -----    --                     ----
          A2       BBB-/Watch Neg         AAA/Watch Neg
          A3       BBB-/Watch Neg         AAA/Watch Neg
          B        CCC/Watch Neg          BBB/Watch Neg

                        Ratings Unaffected

                         Class    Rating
                         -----    ------
                         C        D
                         D        D


* SPAIN: Banks' ECB Borrowing Up 48% in June, Data Shows
--------------------------------------------------------
Spanish banks and cajas, frozen out of the international wholesale
finance markets on which they once depended, increased their
borrowing from the European Central Bank by nearly half to
EUR126.3 billion (US$161.2 billion) in June from EUR85.62 billion
in May, Victor Mallet at The Financial Times reports, citing
figures released by the Bank of Spain.

According to the FT, Spanish borrowing from the ECB increased 48%,
even though the total lent by the ECB across the eurozone fell 4%
to EUR496.62 billion last month from EUR518.63 billion in May.

The FT says although the numbers highlight the weak position of
some Spanish lenders, state officials and private sector bankers
said the fact that they were published voluntarily demonstrated
Spain's determination to be transparent and publish even negative
news as soon as possible.

The FT notes Spanish bankers say that while the stress tests will
expose the weaknesses of some lenders, the absolute amount of new
capital required is not expected to be shockingly high because
most of the problems -- and the forced recourse to ECB financing
-- are concentrated in relatively small savings banks, or cajas.


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


CRYSTAL CREDIT: S&P Downgrades Rating on Class B Notes to 'CC'
--------------------------------------------------------------
Standard & Poor's Ratings Services said that it has revised its
credit ratings on two of the three classes of Crystal Credit
Ltd.'s principal-at-risk variable-rate notes, after S&P received
new information on the transaction.

The rating on the class A notes has been raised to 'BB-' from
'B+'; the class B notes have been downgraded to 'CC' from 'CCC+';
and the rating on the class C notes has remained unchanged at
'CC'.

The actual claim activity for the second quarter of 2010 is
broadly in line with S&P's expectations.  However, the aggregate
paid and reported claims have seasoned sufficiently for us to make
a more-reliable estimate of the final (ultimate) claims.  As a
result, S&P now believes that the class B and C notes are more
likely to default at maturity, and that the class A notes are less
likely to default at maturity.

Crystal Credit involves the securitization of payments related to
an indemnity-based excess-of-loss retrocession agreement between
Swiss Reinsurance Company Ltd. (Swiss Re; A+/Stable/A-1) and
Crystal Credit, covering the risk to a defined portfolio of credit
reinsurance treaties for the underwriting years 2006 to 2008.

S&P has received further information from Swiss Re, including
confidential information regarding its reserving levels.

S&P has updated the views S&P reached at its last review in March
2010 based on this new information (see "Related Criteria And
Research").  S&P still believes that losses on the class C notes
are very likely to be higher than the attachment point when the
notes mature, and that the repayment of principal will most likely
not be made in full by the notes' legal maturity.

For the class C notes to incur a loss, aggregate ceded losses must
reach EUR666 million at maturity.  Swiss Re's last investor report
was based on information as of June 23, 2010.  It listed paid
aggregate losses to Crystal Credit of EUR671 million and reported
aggregate losses of EUR769 million for the underwriting years 2006
to 2008.

For the class B notes to incur a loss, aggregate ceded losses must
reach EUR729 million at maturity.  Using S&P's internal
projections, S&P estimate that paid aggregate losses will reach
this level in the next two to three quarters.

For the class A notes to incur a loss, aggregate ceded losses must
reach EUR810 million at maturity.  S&P estimate that aggregate
losses have a lower likelihood of reaching this level.

S&P bases its estimates on certain assumptions, which may or may
not materialize.  These include further losses being reported
before the maturity date in April 2012; the 2008 underwriting year
developing more rapidly than 2007 or 2006, due to earlier
reporting of cedants' loss estimates; recoveries in line with
prior years' experience, leading to a reduction in some currently
reported aggregate losses.

The current aggregate gross reported losses for each underwriting
year is: EUR207 million for 2006, EUR306 million for 2007, and
EUR406 million for 2008.  According to the terms of the
retrocession agreement, Swiss Re retains at least 10% of these
losses for each underwriting year.  The ultimate percentage
depends on the gross reinsurance premium Swiss Re receives for
each underwriting year.  After applying Swiss Re's retention, the
current aggregate reported losses to Crystal Credit are
EUR769 million.

Given the nature of the credit reinsurance business, it will take
about two years for premiums and losses reported to Swiss Re to
reach a stable level.  S&P doesn't expect much variation in the
figures reported for the 2006 underwriting year but are likely to
see some changes to the figures for the 2008 underwriting year.

Although the treaties for all underwriting years are no longer at
risk, the delay in reporting means that there is still uncertainty
regarding the numbers reported to Swiss Re.  Further, the 2008
losses are already higher than the 2007 losses, which are higher
than 2006.  S&P anticipates that further losses will be reported
and that the ultimate 2008 losses will be noticeably above the
losses for either 2007 or 2006.

The close-out period for the 2008 underwriting year ended on
Dec. 31, 2009, when the loss development period started.  The loss
development period allows time for all losses and premiums to be
reported, for much of the reserve component of the ceded losses to
be converted into paid losses, and for Swiss Re to recover the
ultimate loss amount.

Based on the terms of the transaction, Swiss Re will only be able
to deliver a proof of loss to Crystal Credit and so request the
payment of the ultimate amount of losses under the retrocession
agreement between April 1 and April 15, 2012.

Swiss Re will appoint a reserve validation firm, under the terms
of the retrocession agreement.  If Swiss Re delivers a proof of
loss containing reported reserves greater than zero, the firm will
perform a review of the reported reserves and a report will be due
15 days after the delivery of proof of loss.

S&P will monitor the quarterly premium and loss reports and
request further information from Swiss Re as S&P sees necessary
until the maturity of the notes.


=============
U K R A I N E
=============


* UKRAINE: To Issue US$2 Billion Value-Added Tax Bonds Next Month
-----------------------------------------------------------------
Halia Pavliva at Bloomberg News reports that Ukrainian Deputy
Prime Minister Serhiy Tigipko said the country will issue at least
US$2 billion in so-called value-added tax bonds in one installment
next month to meet a requirement for an International Monetary
Fund loan.

"We will restructure the debt accumulated in 2009 and, possibly,
in the first quarter of 2010, by issuing VAT bonds," Bloomberg
quoted Mr. Tigipko as saying in an interview at his Kiev office
Wednesday.  "The bonds will be out practically next week after the
IMF board's decision and there will be one tranche" of the
securities issued."

Bloomberg recalls the IMF, based in Washington, agreed with
Ukraine on a new US$14.9 billion loan on July 3 after a mission
from the lender approved economic policies aimed at narrowing the
deficit.  Mr. Tigipko, as cited by Bloomberg, said the IMF will
decide whether to give final approval to the loan at its July 28
board meeting.

According to Bloomberg, the government has agreed to use VAT bonds
to repay UAH16.7 billion (US$2.2 billion) owed to exporters for
value-added taxes that were not repaid to them in 2009.  Bloomberg
notes the minister said the rest of the taxes owed would be repaid
in cash.

Bloomberg relates Mr. Tigipko said the nation plans to pay in full
and on time all of its sovereign debts in 2010 and 2011, and the
government prefers to borrow abroad rather than locally.

                           *     *     *

Standard & Poor's raised Ukraine's credit ratings on May 17 to B
from B- following an agreement with Russia on lower prices for
imported natural gas, according to Bloomberg News.


* Fitch Upgrades Ukraine's City of Kharkov's Ratings to 'B'
-----------------------------------------------------------
Fitch Ratings has upgraded Ukraine's City of Kharkov's Long-term
foreign and local currency ratings to 'B' from 'B-'.  Its Short
term foreign currency rating has been affirmed at 'B' and National
Long-term rating at 'AA-(ukr)'.  The Outlooks are Stable.

The rating action follows the recent upgrade of Ukraine's Long-
term foreign and local currency Issuer Default Ratings to 'B' from
'B-' (see separate announcement dated July 6, 2010, on
www.fitchratings.com) and also reflects the city's sound budgetary
performance and its adequate liquidity.  The ratings also consider
Kharkov's rigid operating expenditure and planned increase of
direct debt of up to UAH500 million.


* Fitch Affirms 'B-' Issuer Ratings on Two Ukrainian Cities
-----------------------------------------------------------
Fitch Ratings has affirmed the ratings of two Ukrainian cities,
the City of Kyiv and City of Odessa.  The agency has
simultaneously downgraded the cities' National Long-term ratings.
The Outlooks for all Long-term ratings are Negative.

The rating actions factor in Kyiv's and Odessa's weaker credit
profiles versus the sovereign and other issuers in the country,
following the upgrade of Ukraine's sovereign ratings to 'B' from
'B-' and the subsequent recalibration of the national rating
scale.  The Negative Outlook continues to reflect weak budgetary
performance and liquidity, which heightens refinancing and forex
exposure risks of the debt outstanding.

The City of Kyiv:

  -- Long-term foreign and local currency ratings affirmed at 'B-
     '; Outlook Negative

  -- Short-term foreign currency rating affirmed at 'B'

  -- National Long-term rating downgraded to 'BBB+(ukr)' from
     'A(ukr)'; Outlook Negative

The City of Odessa:

  -- Long-term foreign and local currency ratings affirmed at
     'B-'; Outlooks Negative

  -- Short-term foreign currency rating affirmed at 'B'

  -- National Long-term rating downgraded to 'BBB+(ukr)' from 'A-
     (ukr)'; Outlook Negative


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


BRITISH AIRWAYS: EU Commission Backs AA Alliance, Iberia Merger
---------------------------------------------------------------
BBC News reports that the European Commission has paved the way
for British Airways, Iberia and American Airlines to work
together.

The report relates the EU Commission said it would give British
Airways and Iberia immunity from anti-trust laws that prevent
businesses from coordinating prices and schedules.

According to the report, under the plan -- which still needs US
backing -- the airlines would share costs, but give up four
transatlantic take-off and landing slots.

The regulators also approved BA's merger with Spain's Iberia, the
report notes.

The report notes the EU Commission said it did not have any anti-
competition concerns over the merger because the enlarged airline
would continue to face competition from rivals, even on routes
such as London-Madrid and London-Barcelona.  When the merger was
confirmed, BA said the group would operate 419 aircraft, flying to
more than 200 destinations, and carry a total of 62 million
passengers a year, the report discloses.

                      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.


DEUTSCHE PFANDBRIEFBANK: Moody's' Reviews Ratings on All Notes
--------------------------------------------------------------
Moody's Investors Service has placed on review for possible
downgrade the Senior CDS and all classes of Notes issued by
Deutsche Pfandbriefbank AG (Estate UK-3) (amounts reflect initial
outstandings):

  -- GBP482.447557M Class A1+ (CDS) Floating Rate Amortising
     Credit-Linked Notes Certificate, Aa2 Placed On Review for
     Possible Downgrade; previously on Jun 9, 2009 Downgraded to
     Aa2

  -- GBP0.4M Class A1+ Floating Rate Amortising Credit-Linked
     Notes Notes, Aa2 Placed On Review for Possible Downgrade;
     previously on Jun 9, 2009 Downgraded to Aa2

  -- GBP29.8M Class A2 Floating Rate Amortising Credit-Linked
     Notes Notes, Baa1 Placed On Review for Possible Downgrade;
     previously on Jun 9, 2009 Downgraded to Baa1

  -- GBP35.76M Class B Floating Rate Amortising Credit-Linked
     Notes Notes, Ba2 Placed On Review for Possible Downgrade;
     previously on Jun 9, 2009 Downgraded to Ba2

  -- GBP24.56M Class C Floating Rate Amortising Credit-Linked
     Notes Notes, B2 Placed On Review for Possible Downgrade;
     previously on Jun 9, 2009 Downgraded to B2

  -- GBP8.24M Class D Floating Rate Amortising Credit-Linked Notes
     Notes, B3 Placed On Review for Possible Downgrade; previously
     on Jun 9, 2009 Downgraded to B3

  -- GBP14.92M Class E Floating Rate Amortising Credit-Linked
     Notes Notes, Caa2 Placed On Review for Possible Downgrade;
     previously on Jun 9, 2009 Downgraded to Caa2

1) Transaction Overview and Performance Update

This synthetic transaction closed in February 2007 and represents
the securitization of initially 13 commercial mortgage loans
("reference claims") originated by Hypo Real Estate Bank
International AG, now Deutsche Pfandbriefbank AG (A3, P-1).  The
loans were secured by first ranking legal mortgages on 110
commercial properties located in the United Kingdom.  The
portfolio comprised 43.9% retail, 28.3% office, 16.6% mixed-use
and 11.2% other properties based on securitized loan balance.

Since closing of the transaction, four loans have prepaid in full,
which were all above average quality in terms of Moody's
assessment at closing of the transaction.  Following the four full
loan prepayments along with loan amortization and partial
prepayments, 75.6% of the original pool balance remains.  The pre-
and repayment proceeds were allocated to the Senior CDS.

The remaining loans are not equally contributing to the portfolio:
the largest loan (Loan No 3) represents 39.0% of the current
portfolio balance, while the smallest loan (Loan No 11) represents
2.1%.  The current loan Herfindahl index is 4.6 compared to 7.0 at
closing, indicating a higher loan concentration after prepayments.
The remaining nine loans are secured by 107 commercial properties,
of which 51.2% are retail, 18.6% mixed-use, 16.6% office, and
13.7% other properties in terms of securitized loan balance.  They
are located throughout the United Kingdom, mainly in Yorkshire &
Humberland (21.7%), London (17.2%), South East England (17.8%),
Wales (15.0%), West Midlands (6.2%) and UK Other (22.1%).

As of the last interest payment date, all of the remaining loans
in the portfolio were current.  However, following the re-
valuation of the retail properties securing Loan No 3, the loan
breached its LTV covenant and a default notification was sent to
the borrower.  This however is not classified as a "Defaulted
Reference Claim" or a "Credit Event" as per transaction
documentation.

2) Rating Rationale

The review action has been prompted by the new valuation for the
property portfolio securing Loan No 3 (39% of the current
portfolio).  The new value of GBP156.3 million is 54% below the
portfolio value as of May 2007 and is also below the trough value
Moody's estimated in its latest review of the transaction in June
2009.

Loan No 3 is comprised of a GBP239.42 million whole loan, out of
which GBP175.67 million is securitized with the remaining portion
being pari passu in terms of ranking.  The loan is secured by
three shopping centres and is scheduled to mature in April 2013
with no extension option available.  There is no amortization on
the loan.

Moody's will focus its review on (i) a reassessment of the default
risk of the loans, especially Loan No 3; (ii) the anticipated
value developments; and (iii) a reassessment of the expected loss
of the securitized portfolio.


DSG INTERNATIONAL: Fitch Gives Positive Outlook; Keeps 'B' Ratings
------------------------------------------------------------------
Fitch Ratings has revised UK-based electrical retailer DSG
international Plc's Outlook to Positive from Stable.  The agency
has affirmed DSG's Long-term and Short-term Issuer Default Ratings
at 'B', respectively, and its senior unsecured bond rating at 'B+'
with a Recovery Rating of 'RR3'.  Fitch has simultaneously
downgraded DSG's senior unsecured bank facility to 'B+'/'RR3' from
'BB-' (BB minus)/ 'RR2' given that the guarantee structure for the
bank facility is now closely aligned with that of the bond.

The Outlook revision reflects DSG's improving operating
performance, resulting in better credit-metrics and a restored
liquidity position since May 2009.  In announcing its preliminary
results for the financial year-end 2010 (FYE10, ending 1 May
2010), DSG reported that its full year like-for-like sales growth
was up 2% at FYE10 compared with a 9% decline in FY09.  The
improved sales performance reflects the actions taken by the
company to revitalize the business as part of its "Renewal &
Transformation Plan" launched in May 2008.

Net debt was GBP299.5 million (excluding restricted cash) at FYE10
versus GBP545.1 million in FYE09.  This was attributed to higher
profitability; a cancellation of the dividend payment; the GBP311
million rights issue and normalization of working capital since
May 2009.  Group EBIT margin improved to 1.5% in FY10 from 1.0% in
FY09.  As such, lease adjusted net debt/EBITDAR was lower at
around 5.3x (Fitch estimate) at FYE10 from 6.1x at FYE09.

Fitch believes DSG's credit metrics will continue to improve as
the Renewal and Transformation Plan gains more traction.
Approximately 37% of its UK store portfolio (accounting for 60% by
sales revenue) will be reformatted by FY11.  In addition, there is
a healthy technology product cycle underway which will help
support DSG's growth.  At the same time, while DSG's UK business
has been challenged over the last 2 years, its Nordic business has
been performing well and is an important contributor to the group
both in terms of sales and operating profit.  The Nordics
contribute about 25% of sales to the group, while in terms of
underlying operating profit, it contributed 56% to the group in
FY10.

Fitch also notes that DSG's newly signed GBP360 million Revolving
Credit Facility in May 2010, replacing the group's existing
GBP400 million facilities, became effective on July 7, 2010.  The
agency understands that the bank lenders to the new GBP360 million
bank RCF will only benefit from guarantees from DSG's UK and Irish
companies, such that the guarantee structure is now closely
aligned with that of DSG's GBP300 million 2012 bond.  Therefore,
the previously split senior unsecured ratings for the bond and
bank facility are removed with both ratings now equalized at 'B+'.
Fitch's recovery analysis indicates a 51%-70% recovery to the
senior unsecured instruments in a distressed scenario, equating to
a Recovery Rating of 'RR3'.  As per Fitch's notching guidelines,
this leads to a rating at one notch above the Long-Term IDR, or
'B+'.

DSG's liquidity is adequate with a cash balance of
GBP122.7 million (excluding restricted cash for customer support
agreements) at FY10 and access to a GBP360 million RCF which is
sufficient to cover the company's peak usage throughout the year.
As at FYE10, the available undrawn amount of the old
GBP400 million RCF was GBP305 million (FY09:150 million).  DSG has
one GBP300 million bond outstanding, due on November 15, 2012.
Fitch assumes that DSG will refinance this instrument on a timely
basis, alleviating any liquidity concerns.

Although Fitch recognizes the improvement in DSG's financial
profile and credit metrics, the agency also notes that there are
economic and business uncertainties which may dampen DSG's results
in 2011.  These include inflationary cost pressures; the potential
for increases in interest rates; higher taxes (including Value-
Added Tax); and other austerity measures that may be imposed to
balance the UK government deficit.


NORTEL NETWORKS: Asked by Regulator to Back U.K. Pension Fund
-------------------------------------------------------------
A determination panel of the U.K. Pensions Regulator handed down
a ruling to issue a financial support direction against 25
companies in Nortel group in Canada, U.S., Europe and Africa.

The FSD would require the companies within the Nortel Group to
provide financial support up to GBP2.1 billion for the Nortel
Networks UK Pension Plan.  The determination panel found it
reasonable to impose the FSD on the target companies after the
employer of the Nortel Networks UK Pension Plan was found to be
"insufficiently resourced," according to a July 8, 2010 statement
from the UK Pensions Regulator.

The Nortel Pension Plan had allegedly been left underfunded after
the employer, Nortel Networks UK Limited (NNUK), entered
administration in January 2009.  There are about 42,000 members
of the scheme.

The UK Regulator said that in the 12 years prior to 2002, the
Nortel Group benefited by paying little or no contributions to
the pensions scheme, and further benefited from the failure of
the controlling parent companies to address the deficit from 2002
onwards.

June Mulroy, the Pensions Regulator's executive director for
delivery, welcomed the panel's decision.

"It makes clear that companies within the Nortel group benefited
from both the activities of Nortel Networks UK and from the
failure by the controlling Canadian companies to allow the UK
company to repair the sizeable pension deficit," Mr. Mulroy said
in a July 8 statement.

"The FSD is a UK regulatory process and is not an attempt to
enforce outside of the Canadian or US insolvency processes.  It
provides certainty over the size of the pension debt for the
courts and those supervising the Nortel insolvencies," Mr. Mulroy
further said.

Ernst & Young, administrator to Nortel, countered that it does
not accept the panel's findings and intends to defend Nortel's
positions, The Financial Times reported.

Jonathon Land, business recovery services partner at
PricewaterhouseCoopers, who has advised Nortel's pension fund
trustees throughout the company's two-year case, said the
decision by the UK Regulator could prove significant in the
trustees' fight for a share of Nortel's money, according to a
report by U.K.'s The Independent newspaper.  "The pensions
regulator has made the right decision under the circumstances,
particularly given the size of Nortel's pension deficit,"
Independent quoted Mr. Land as saying.

Earlier, the U.S. Bankruptcy Court blocked the pension plan's
trustees and The Board of the Pension Protection Fund from
participating in the U.K. Regulator's administrative case to
recover GBP2.1 billion because it would violate the automatic
stay.  The pension trustees and the PPF eventually filed an
appeal though the matter has yet to reach the hearing stage.

The Ontario Superior Court of Justice, which handles the
insolvency cases of Canada-based Nortel Networks Corp. and its
affiliates, has declared that the FSD process breaches the stay
under the Companies Creditors Arrangement Act and ordered that
any outcome of it will be null and void in the insolvency cases.

Although the Ontario Court of Appeals recently dismissed the UK
Regulator's appeal against the Canadian Court's ruling, it stated
that this should not preclude the trustees or PPF from making a
claim in the Canadian Court.

The parties have 28 days from the date of the determination to
appeal by making a reference to the Tax and Chancery Chamber of
the Upper Tribunal.  The FSD will be issued 28 days after
June 25, 2010, if no reference is made.

                       About Nortel Networks

Nortel Networks (OTC BB: NRTLQ) -- http://www.nortel.com/--
delivers communications capabilities that make the promise of
Business Made Simple a reality for the Company's customers.  The
Company's next-generation technologies, for both service provider
and enterprise networks, support multimedia and business-critical
applications.  Nortel's technologies are designed to help
eliminate the barriers to efficiency, speed and performance by
simplifying networks and connecting people to the information they
need, when they need it.

Nortel Networks Corp., Nortel Networks Inc., and other affiliated
corporations in Canada sought insolvency protection under the
Companies' Creditors Arrangement Act in the Ontario Superior Court
of Justice (Commercial List).  Ernst & Young was appointed to
serve as monitor and foreign representative of the Canadian Nortel
Group.

The Monitor sought recognition of the CCAA Proceedings in the U.S.
by filing a bankruptcy petition under Chapter 15 of the U.S.
Bankruptcy Code (Bankr. D. Del. Case No. 09-10164).  Mary Caloway,
Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll & Rooney
PC, in Wilmington, Delaware, serves as the Chapter 15 petitioner's
counsel.

Nortel Networks Inc. and 14 affiliates filed separate Chapter 11
petitions on January 14, 2009 (Bankr. D. Del. Case No. 09-10138).
Judge Kevin Gross presides over the case.  James L. Bromley, Esq.,
at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as
general bankruptcy counsel; Derek C. Abbott, Esq., at Morris
Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware
counsel.  The Chapter 11 Debtors' other professionals are Lazard
Freres & Co. LLC as financial advisors; and Epiq Bankruptcy
Solutions LLC as claims and notice agent.

Certain of Nortel's European subsidiaries also made consequential
filings for creditor protection.  The Nortel Companies related in
a press release that Nortel Networks UK Limited and certain
subsidiaries of the Nortel group incorporated in the EMEA region
have each obtained an administration order from the English High
Court of Justice under the Insolvency Act 1986.  The applications
were made by the EMEA Subsidiaries under the provisions of the
European Union's Council Regulation (EC) No. 1346/2000 on
Insolvency Proceedings and on the basis that each EMEA
Subsidiary's centre of main interests is in England.  Under the
terms of the orders, representatives of Ernst & Young LLP have
been appointed as administrators of each of the EMEA Companies and
will continue to manage the EMEA Companies and operate their
businesses under the jurisdiction of the English Court and in
accordance with the applicable provisions of the Insolvency Act.

Several entities, particularly, Nortel Government Solutions
Incorporated have material operations and are not part of the
bankruptcy proceedings.

As of September 30, 2008, Nortel Networks Corp. reported
consolidated assets of US$11.6 billion and consolidated
liabilities of US$11.8 billion.  The Nortel Companies' U.S.
businesses are primarily conducted through Nortel Networks Inc.,
which is the parent of majority of the U.S. Nortel Companies.  As
of September 30, 2008, NNI had assets of about US$9 billion and
liabilities of US$3.2 billion, which do not include NNI's
guarantee of some or all of the Nortel Companies' about
US$4.2 billion of unsecured public debt.

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


PORTSMOUTH FOOTBALL: Faces Points Penalty If HMRC Appeals CVA
-------------------------------------------------------------
Championship News reports that Portsmouth Football Club face
starting the 2010-11 season with another huge points penalty with
the Her Majesty's Revenue and Customs almost certain to appeal the
Company Voluntary Arrangement that was agreed last month.

According to Championship News, HMRC had until yesterday evening
to lodge an official appeal against the CVA which was passed on
June 15.  Under the terms of that CVA, 75% of the creditors agreed
to 20p in the pound being repaid, Championship News discloses.

Championship News notes it has also been reported that HMRC is
contesting the amount Portsmouth claims to owe, believing the debt
to be GBP34 million and not GBP27 million as detailed in the
club's accounts.  The figure in the accounts enabled the club to
agree the CVA, but if the figure is GBP34 million then HMRC hold
more than 25% of the club's debt, meaning they can veto any CVA,
Championship News states.

It appears highly unlikely HMRC would ever be offered more than
20p in the pound, making the aims of their appeal confusing,
Championship News says.

According to Championship News, a 17-point deduction would make
the club even more unattractive to prospective buyers, placing the
club's future once more in doubt.  If the club goes bust then HMRC
would be left with nothing, Championship News notes.

Championship News says with the appeal unlikely to be heard until
October at the earliest, it means Portsmouth will be unable to
start the season with an agreed CVA in place.  Under normal
Football League rules this would lead to a points deduction, with
a 17-point penalty likely to be handed down, Championship News
states.

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.


ROYAL BANK: Fitch Upgrades Individual Rating to 'C/D'
-----------------------------------------------------
Fitch Ratings has upgraded The Royal Bank of Scotland Group's and
The Royal Bank of Scotland's Individual Ratings to 'C/D' from
'D/E' to reflect RBS Group's progress with its extensive
restructuring plans, improvements in risk management procedures, a
franchise that has proven resilient to the group's problems in
2008-09 and its solid capitalization in the face of a still
challenging operating environment.

Their other ratings have been affirmed at Long-term Issuer Default
'AA-', Short-term IDR 'F1+', Support '1' and Support Rating Floor
AA-'.  The Outlooks on the Long-term IDRs are Stable.  Various
actions have been taken on certain hybrid securities.  For a full
list of ratings, please refer to the end of this rating action
comment.

"The restructuring is progressing well and as the economy
recovers, the group's strong UK franchise and broad client and
product diversification can drive improvements in profitability,"
said Cynthia Chan, Senior Director in Fitch's Financial
Institutions team.  "Nonetheless, re-shaping the group's balance
sheet, running off more than GBP200 billion of non-core assets and
reducing reliance on wholesale funds is an undoubted challenge,
the success of which is in part dependent on factors beyond the
group's control".

The Individual Ratings of RBSG and RBS therefore continue to
reflect the significant execution challenges faced by management
in achieving its strategic and financial goals.  Political
interference arising from 83% UK government ownership and the
European Commission's state aid disposal and market share
requirements complicate the task.  Despite declining by 38% since
end-2008, total third party assets in the 'non-core' division
remained substantial at GBP213 billion at end-Q110.  The portfolio
covers a broad range of assets, but includes concentrations of
complex and illiquid assets, the optimal winding down of which
requires considerable expertise and favorable market conditions.

Another key challenge for RBS Group is to re-shape and improve the
quality of its funding and to continue to reduce its reliance on
wholesale funding.  Although liquidity and funding has
strengthened enormously since the height of the crisis (the loan/
deposit ratio improved to 131% at end-Q110 from 151% at end-2008
and the liquidity reserves increased by 83% to GBP165 billion over
the same period), RBS Group is still a heavy user of wholesale
funding and needed to make use of high levels of state-supported
funding in late 2008 and 2009.  Like many other UK financial
institutions, the group has sizeable maturities peaking in 2011-
2012.  Refinancing risk will be greatly mitigated if the run-off
in non-core assets continues as planned.  Fitch notes that despite
the recent disruption due to the eurozone sovereign-debt crisis,
RBS Group has been able to access both unsecured and secured
funding markets, most recently with a EUR1.25 billion senior
unsecured 5 year issue last week.

The affirmation of the Long- and Short-term IDRs, Support Rating
Floors and Support Ratings reflects the extraordinary level of
tangible support for the group from the UK government through
various capital, asset protection and liquidity support measures.
While Fitch believes government support remains very high for
systemically important UK banks, there is growing political will
in the UK -- evidenced by the likes of the 'living wills' pilot
scheme -- to explore ways to reduce the implicit state support of
systemically important banks in the country.  This represents a
potential threat for the group's IDRs, senior and dated
subordinated (lower tier 2) debt ratings.

The European Commission requires that RBS Group and its
subsidiaries do not make discretionary payments of coupons or
dividends on hybrid capital securities for a two-year period;
these are rated 'CC' to reflect this non-performance.  Tier 1 and
upper tier 2 securities where Fitch believes payments cannot be
prevented have been upgraded to 'BB-' from 'B+' in recognition of
the improvement in the Individual Ratings.  Ratings for all other
hybrid securities and subordinated debt have been affirmed.

The ratings of RBS Group's Irish subsidiaries are unaffected by
the rating actions.

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.

The ratings actions are:

The Royal Bank of Scotland Group plc

  -- Long-term IDR: affirmed at 'AA-'; Outlook Stable
  -- Senior unsecured debt: affirmed at 'AA-'
  -- Short-term IDR: affirmed at 'F1+'
  -- Commercial paper: affirmed at 'F1+'
  -- Individual rating: upgraded to 'C/D' from 'D/E'
  -- Support rating: affirmed at '1'
  -- Support Rating Floor: affirmed at 'AA-'

The Royal Bank of Scotland plc

  -- Long-term IDR: affirmed at 'AA-'; Outlook Stable
  -- Senior unsecured debt: affirmed at 'AA-'
  -- Short-term IDR: affirmed at 'F1+'
  -- Commercial paper: affirmed at 'F1+';
  -- Individual rating: upgraded to 'C/D' from 'D/E'
  -- Support rating: affirmed at '1'
  -- Support Rating Floor: affirmed at 'AA-'
  -- Guaranteed senior long-term debt affirmed at 'AAA'
  -- Guaranteed senior short-term debt affirmed at 'F1+'
  -- Mortgage covered bonds are unaffected by the action

National Westminster Bank plc

  -- Long-term IDR: affirmed at 'AA-'; Outlook Stable
  -- Senior unsecured debt: affirmed at 'AA-'
  -- Short-term IDR: affirmed at 'F1+'
  -- Support rating: affirmed at '1'
  -- Support Rating Floor: affirmed at 'AA-'

Royal Bank of Scotland International Limited

  -- Long-term IDR: affirmed at 'AA-'; Outlook Stable
  -- Short-term IDR: affirmed at 'F1+'

Royal Bank of Scotland NV

  -- Long-term IDR: affirmed at 'AA-'; Outlook Stable
  -- Senior unsecured debt: affirmed at 'AA-'
  -- Short-term IDR: affirmed at 'F1+'
  -- Commercial paper and short-term debt: affirmed at 'F1+'
  -- Support rating: affirmed at '1'
  -- Guaranteed senior long-term (AUD) debt affirmed at 'AAA'
  -- Guaranteed senior short-term (EUR) debt affirmed at 'F1+'

RBS Holdings USA Inc

  -- Commercial paper: affirmed at 'F1+'

Citizens Financial Group, Inc

  -- Long-term IDR: affirmed at 'A+'; Outlook Stable
  -- Short-term IDR: affirmed at 'F1'
  -- Support rating: affirmed at '1'
  -- Individual rating 'B/C' is unaffected by the action

RBS Citizens, NA

  -- Long-term IDR: affirmed at 'A+'; Outlook Stable
  -- Short-term IDR: affirmed at 'F1'
  -- Long-term deposits: affirmed at 'AA-'
  -- Short-term deposits: affirmed at 'F1+'
  -- Senior unsecured debt: affirmed at 'A+'
  -- Subordinated debt: affirmed at 'A'
  -- Support rating: affirmed at '1'
  -- Individual rating 'B/C' is unaffected by the action

Citizens Bank of Pennsylvania:

  -- Long-term IDR: affirmed at 'A+'; Outlook Stable
  -- Short-term IDR: affirmed at 'F1'
  -- Long-term deposits: affirmed at 'AA-'
  -- Short-term deposits: affirmed at 'F1+'
  -- Support rating: affirmed at '1'
  -- Individual rating 'B/C' is unaffected by the action

Actions on other tier 1, upper tier 2 and lower tier 2 debt
securities are:

The Royal Bank of Scotland Group plc (RBS Group)

  -- Preference shares: upgraded to 'BB-' from 'B+'

  -- US$300m non-cumulative preference shares, Series H
     (US7800978790)

  -- US$1bn non-cumulative preference shares, Series 1
     (US780097AE13)

  -- GBP 200m non-cumulative preference shares, Series 1
     (XS0121856859)

  -- Innovative tier 1: upgraded to 'BB-' from 'B+'

  -- US$1.2bn regulatory tier 1 securities (US780097AH44)

All other rated preference shares and tier 1 securities affirmed
at 'CC'.

  -- Dated subordinated bonds: affirmed at 'A'
  -- US$350m subordinated bonds due 2018 (US780097AM39)
  -- US$750m subordinated bonds due 2014 (US780097AN12)
  -- US$1bn subordinated bonds due 2014 (US780097AL55)
  -- US$300m subordinated bonds due 2011 (US780097AB73)
  -- US$675m subordinated bonds due 2015 (US780097AP69)

The Royal Bank of Scotland plc

  -- Upper tier 2 securities: upgraded to 'BB-' from 'B+'

  -- GBP175m undated subordinated notes (XS0116447599)

  -- GBP400m undated subordinated callable step-up notes
     (XS0247645160)

  -- GBP350m fixed rate undated subordinated notes (XS0137784426)

  -- EUR500m undated subordinated notes (XS0195230635)

  -- EUR1bn undated subordinated notes (XS0195231526)

  -- GBP500m undated subordinated notes (XS0193721544)

  -- GBP500m undated subordinated notes (XS0164828385)

  -- CAD700m undated subordinated callable step-up notes
     (CA780097AR28)

  -- GBP200m undated subordinated bonds (XS0045071932)

  -- GBP600m undated subordinated notes (XS0206633082)

  -- GBP500m undated subordinated notes (XS0144810529)

  -- GBP900m undated subordinated notes (XS0154144132)

  -- GBP500m undated subordinated notes (XS0138939854)

  -- Dated subordinated bonds: affirmed at 'A'

  -- EUR1bn dated subordinated bond due 2021 (XS0201065496)

  -- All other dated (lower tier 2) subordinated bonds affirmed at
     'A+'

National Westminster Bank plc (NatWest)

  -- Upper tier 2 securities: upgraded to 'BB-' from 'B+'

  -- EUR100m undated subordinated notes (XS0102480786)

  -- EUR400m undated subordinated notes (XS0102480869)

  -- GBP200m undated subordinated step-up notes (XS0102493680)

  -- GBP325m undated subordinated step-up notes (XS0102493508)

  -- US$500m primary capital floating rate notes (Series 'A')
     (GB0006267073)

  -- US$500m primary capital floating rate notes (Series 'B')
     (GB0006267180)

  -- US$500m primary capital FRNs (Series 'C') (LU0001547172)

  -- Subordinated debt (lower tier 2) affirmed at 'A+'

Royal Bank of Scotland NV (RBS NV)

  -- Subordinated debt: US00077TAA25 affirmed at 'A+'; removed
     from RWN

  -- All other subordinated debt affirmed at 'A+'

The dated subordinated security (US00077TAA25), although
economically allocated to the new ABN AMRO Bank N.V.
('A+'/Stable), remains the legal obligation of RBS N.V until it
can be transferred.  Fitch has affirmed this security at 'A+' and
removed it from Rating Watch Negative.

Fitch does not rate all capital issued by RBS Group, RBS, NatWest
and RBS Bank NV.


SOUTHEND UNITED: Winding-Up Hearing Adjourned Until August 11
-------------------------------------------------------------
BBC Sport reports that a winding-up hearing against Southend
United over a debt of GBP140,000 has been adjourned until
August 11.

According to BBC Sport, lawyers for Charterhouse Commercial
Finance Plc asked the High Court to reschedule the hearing on
Wednesday.

BBC Sport notes it was moved in light of an application by Her
Majesty's Revenue and Customs to put the club into administration
which will be heard on August 2.

As reported by the Troubled Company Reporter-Europe on July 12,
2010, Accountancy Age said the High Court gave Southend United
until August 2 to prove it is solvent and able to continue
trading.  Accountancy Age disclosed HMRC said the club's history
of failing to pay its taxes demonstrated it was insolvent.

Southend United Football Club is an English football club based at
Roots Hall Stadium, Prittlewell, Southend-on-Sea, Essex, who
currently play in League One of the English Football League.


* UK: Prepacks Could Become Feature of European CMBS Market
-----------------------------------------------------------
Global Insolvency, citing Dow Jones Daily Bankruptcy Review,
reports that prepack administrations, a U.K. process in which a
business on the brink of insolvency is sold on without
liabilities, such as debt, could become a feature of the European
commercial mortgage-backed securities market.

"I think you will see [CMBS deals] unwound quickly and cleanly
through prepacks," Mark Nichol, CMBS analyst at Bank of
AmericaMerrill Lynch, told a conference hosted by Fitch Ratings in
London, according to the report.

The report relates Mr. Nichol drew a comparison between CMBS deals
and the restructuring of IMO Car Wash, which was subject to a
landmark U.K. court ruling last August.

"It took three months between the default and the judgment," the
report quoted Mr. Nichol as saying. "We're waiting to see if [IMO
Car Wash] is relevant to the CMBS market. We need to wait until
[deals] get closer to legal final maturity."

Mr. Nichol, as cited in the report, said prepacks would be
applicable only to deals governed by English law.

CMBS are bonds issued by special-purpose vehicles that are
serviced with the payments made on a pool of commercial mortgages,
which are taken off the mortgage provider's balance sheet, the
report discloses.


* UK: Regulators Must Force Ailing Banks to Restructure Debts
-------------------------------------------------------------
Scott Hamilton at Bloomberg News reports that Bank of England
official Andrew Bailey said that financial regulators should be
able to force failing banks to restructure debts in the way that
other companies do instead of having to bail them out with public
money.

"It is unacceptable that any industry should operate on the basis
of such a dependency on public money," Mr. Bailey told a
conference organized by the British Bankers' Association Tuesday
in London, Bloomberg relates.  "We need something to give us a
credible chance of covering the losses and most likely
recapitalizing a big bank.  Such an event should avoid the use of
public money."

Mr. Bailey, as cited by Bloomberg, said while U.K. banks have
raised their capital and liquidity buffers "substantially," they
need to build larger financial reserves to meet more demanding
regulatory requirement.

"The idea is that the whole of the capital structure could be
written down if necessary, and beyond that it would be possible
either to haircut a portion of unsecured creditors, or (more
likely in my view) carry out a partial debt equity swap,"
Mr. Bailey said, according to Bloomberg.  "It sounds radical, but
it isn't in the non-bank world."

Bloomberg relates Mr. Bailey suggested his solution might involve
writing down capital and partial exchange of bonds for new shares
in a company.  This would force banks to introduce buffers to
reduce the risk of writedowns, Bloomberg says.


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


* EUROPE: Slovakia Seeks Conditions for Bailout Scheme Approval
---------------------------------------------------------------
Slovakia is seeking to include rules on controlled insolvency for
indebted euro-zone countries to be implemented in the European
Union's stability and growth pact, as its condition for approving
the euro area's safety-net financial bailout scheme, Leos Rousek
at Dow Jones Newswires reports, citing a document published on the
government Web site Thursday.

Dow Jones relates Slovakia, the poorest and newest member of the
16-nation euro currency area, has been delaying its approval of
the EUR750 billion euro-zone bailout scheme, known as the European
Financial Stabilization Facility, which was in principal agreed by
euro-zone member states in May.

The government also listed a series of other conditions, including
that authorities prove that indebted countries had tried their
utmost to fund themselves before requesting support, Dow Jones
notes.

The Slovak government's document, which was finally approved by
the cabinet at its Thursday meeting, demands that in the event an
indebted euro-zone nation seeks EFSF aid, the European Commission
and the ECB prove "clearly" that the country in question had "done
all it could" but had failed to refinance itself on credit
markets, Dow Jones discloses.

"The repayable financial assistance for troubled countries will be
issued in line with policies and terms of the International
Monetary Fund," the government document also said, according to
Dow Jones.

Finally, the conditions state that "the Slovak government won't
support the extension of the currently agreed three-year term" of
the safety net, according to Dow Jones.

Slovakia is set to contribute EUR4.4 billion in loan guarantees
for the EUR440 billion in funds of all 16 euro-zone members for
the EFSF safety net, Dow Jones says. The bailout package also
includes an already-committed EUR60 billion from the European
Union's budget and up to EUR250 billion from the IMF, Dow Jones
states.


* EUROPE: Eurozone States With High Debts to Face Scrutiny
----------------------------------------------------------
Geoffrey T. Smith at Dow Jones Newswires reports that a task force
set up to improve economic coordination in the euro zone and avoid
fresh Greece-style debt crises said European Union governments
with high debts should face greater pressure to cut budget
deficits.

According to Dow Jones, the proposal -- from a team led by EU
President Herman Van Rompuy -- would put more of a focus on high
debts as a warning signal than in the past.

Several countries, including Italy, Belgium and Greece entered the
euro zone with debt levels way above the supposed government debt
ceiling of 60% of gross domestic product, Dow Jones discloses.
Dow Jones says rather than enforce that target, more attention was
paid to keeping annual budget deficits below 3% a year -- though
no sanctions were ever brought against governments, including
France and Germany, that breached that limit either.

Dow Jones relates the presidential task force, concluding a third
meeting, said in a communique that the new procedures would start
to apply from next year.  They would need to be formally adopted
by EU governments to take effect, Dow Jones notes.

Dow Jones says the communique set a start date of 2011 for the so-
called European semester -- a proposal of the European Commission,
under which the governments of member states would share
information on their "stability and convergence programs."


* EUROPE: France & Germany to Meet to Tackle Insolvency Procedure
-----------------------------------------------------------------
Quentin Peel and Ben Hall at The Financial Times report that
Wolfgang Schauble, Germany's finance minister, will attend a full
French cabinet meeting next week in a push to forge a common
French and German front on proposals for eurozone governance.

The FT says in a series of meetings in Paris, Mr. Schauble will
attempt to reconcile deep differences between France and Germany
on a number of issues, including tough penalties for fiscal
indiscipline, and German ideas for an "orderly insolvency
procedure" for eurozone states that cannot pay their debts.

According to the FT, the greatest source of friction between the
two countries is that several German proposals, including the idea
of an insolvency procedure, would require changes to the European
Union's Lisbon treaty, something that France strongly opposes.

The FT says Paris is also hostile in principle to an insolvency
procedure that might encourage market speculation, and force
weaker countries to quit the currency union.

They have to agree on whether and how a more permanent crisis
mechanism should be established to replace the three-year EUR440
billion European Financial Stability Facility agreed in May --
along the lines of a European monetary fund proposed by Mr.
Schauble in March, the FT discloses.  Berlin is convinced that
would require a treaty change, too, the FT notes.

The two governments hope to reach agreement in time for the next
meeting of the EU finance ministers' task force, chaired by Herman
Van Rompuy, European Council president, in September, the FT
states.


* S&P Takes Various Rating Actions on Five European CDO Tranches
----------------------------------------------------------------
Standard & Poor's Ratings Services took various rating actions on
five European synthetic collateralized debt obligation tranches.

Specifically, S&P:

* Raised its ratings on three tranches;

* Raised and removed from CreditWatch positive its rating on one
  tranche; and

* Lowered, removed from CreditWatch negative, and withdrew its
  rating on one tranche.

The rating actions follow S&P's recent rating actions on the
underlying collateral to which these transactions are weak-linked.

Under its rating methodology, S&P has weak-linked the ratings on
these tranches to the rating on the transaction-specific
underlying collateral.  Under S&P's criteria, changes to the
collateral rating should be reflected in its rating on the CDO
tranches.


                           Ratings List

                          Ratings Raised

                            Aria CDO I
         CHF58.4 Million, EUR31.5 Million, GBP0.4 Million,
           and US$17.4 Million Floating-Rate Secured Notes
            (Issued By Aria CDO I (Cayman Islands) Ltd.)

                                    Rating
                                    ------
                            To                  From
                            --                  ----
               Series 4     BBB+                BBB-
               Series 5     BBB+                BBB-
               Series 8     BB+                 BB-

        Rating Raised and Removed From Creditwatch Positive

                      Prelude Europe CDO Ltd.
    A$40 Million Credit-Linked Notes Series 2005-4 (Credit Sail)

                        Rating
                        ------
                To                  From
                --                  ----
                Bp                  B-p/Watch Pos

Rating Lowered, Removed From Creditwatch Negative, and Withdrawn

                 Impactor Credit SPI (Ireland) PLC
       EUR100 Million Coupon-Paying Impactor Credit Fund Ltd.
                  Fund-linked SPI Notes Series 2

                        Rating
                        ------
                To                  From
                --                  ----
                AA-p                AAAp/Watch Neg
                NR                  AA-p

                         NR - Not rated.


* BOOK REVIEW: The Executive Guide to Corporate Bankruptcy
----------------------------------------------------------
Authors: Thomas J. Salerno; Craig D. Hansen; Jordan A. Kroop
Publisher: Beard Books
Hardcover: 728 pages
List Price: US$174.95

The newly revised edition of The Executive Guide To Corporate
Bankruptcy is perfectly timed.  As the global economy continues to
deteriorate, more and more companies are sinking into insolvency
with executives at their helm who need a crash course in
bankruptcy realities.  This excellent book will quickly get both
the seasoned executive and the uninitiated lawyer up to speed on
the bankruptcy process.

Salerno, Kroop and Hansen understand that the reorganization
process can be intimidating, puzzling, and generally unpleasant.
They penetrate the opaque gloom that some lawyers tend to
perpetuate.  Each chapter of this book addresses a different
aspect of the reorganization process, beginning with an overview
of the origins and purpose of US bankruptcy laws and ending with a
debunking of common myths about reorganization.  In between, they
discuss each chapter of the bankruptcy code; discussing the gamut
from liquidations through Chapter 11 sales and full-blown
reorganizations.  The authors' ability to distill the bankruptcy
code's complex language into comprehensible and manageable blocks
of information makes the book extremely readable.

The Executive Guide is full of pragmatic advice.  After laying out
the essential elements and key players in the restructuring
process, the authors get down to the nitty gritty of navigating a
distressed company through reorganization.  They realistically
assess the challenges that an executive should expect to face in
Chapter 11.  They discuss how to assuage and balance the concerns
of employees and key vendors, address the inevitable creditor
dissatisfaction with executive compensation, deal with members of
their professional team and work effectively as an executive whose
actions will be constantly scrutinized and second-guessed.  The
authors also provide the cautionary note that "executives
preparing to embark on a reorganization are usually too
preoccupied with business emergencies to think about the personal
toll that the process will exact."

One common flaw in books that try to be accessible while dealing
with technical topics is that they fall short in providing the
reader with a substantive understanding of the subject matter.
The Executive Guide to Corporate Bankruptcy avoids this pitfall.
The book's fourth and fifth chapters provide in-depth analysis of
the strategic decisions and steps that should be taken during the
restructuring process.  The authors explain the importance that
venue can have a case, the intricacies of first day motions and
how to prepare for confirmation.  There is a detailed discussion
of the sale of assets during the course of a Chapter 11
restructuring and the importance of making sure that major
constituencies are a part of the decision-making process.  They
also walk the reader through the specifics of a plan of a
reorganization, explaining the dynamics of the negotiation
process, especially how to understand and appreciate the needs of
your constituents and how to get a plan confirmed.

The icing on the cake for this book is the excellent appendix.
The final section of the book includes a user-friendly glossary of
commonly used bankruptcy terms and a reorganization timeline.  It
also includes sample documents such as debtor-in-possession (DIP)
financing agreements, operating reports, first day motions and
orders, management severance agreements, and more.  The summary of
management incentive stock plans implemented in recent
restructuring transactions is particularly informative.

This is a terrific book.  While geared to the non-lawyer
executive, it will also be a useful resource for any lawyer who
wants to gain practical familiarity with the bankruptcy process.
This should be a best seller in today's environment, though it may
need to be delivered to most executives in a brown paper wrapper.



                            *********

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.


                 * * * End of Transmission * * *