/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/110211.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, February 11, 2011, Vol. 12, No. 30 Headlines C Z E C H R E P U B L I C SAZKA AS: Seeks Dismissal of Moranda's Insolvency Proposal SAZKA AS: Anti-Monopoly Office to Examine Penta Deal D E N M A R K * DENMARK: Senior Bondholders Can't Expect Taxpayer Help G E R M A N Y QIMONDA AG: Infineon Files Legal Action Against Administrator H U N G A R Y TESCO-GLOBAL: Transfers Litigation Costs Over Liquidation to KDFSz I C E L A N D KAUPTHING BANK: Liquidators Seek Order to Dismiss Tchenguiz Claims I R E L A N D DJ CAREY: Creditors' Meetings Scheduled for February 18 ERC IRELAND: Moody's Confirms 'Caa1' Corporate Family Rating GAELIC ATHLETIC: Needs to Curb Spending to Avoid Bankruptcy IRON HILL: Moody's Lifts Ratings on Class C Notes to 'Ba3 (sf)' * IRELAND: Luxury Apartments to Relaunch Receivership Sale I T A L Y BANCA POPOLARE SC: May Combine Leasing Units with Popolare Milano LOTTOMATICA GROUP: S&P Withdraws 'BB' Rating on EUR300-Mil. Notes L U X E M B O U R G BOZEL SA: Bozel LLC Files New Schedules of Assets and Liabilities M O L D O V A TRISTAN OIL: Fitch Affirms Long-Term Issuer Default Rating at 'RD' P O L A N D ZAKLAD WODOCIAGOW: Fitch Assigns 'BB+' National Long-Term Rating R U S S I A ALLIANCE OJSC: Fitch Assigns 'B' Rating to RUB5BB Domestic Notes GEFEST JSIC: Fitch Gives Positive Outlook; Affirms 'B+' IFS Rating RUSIA PETROLEUM: Auction Postponed to March 1 SITRONICS JSC: Fitch Affirms 'B-' Long-Term Issuer Default Rating S P A I N * Moody's Reviews Ratings on 39 Notes From 12 Spanish RMBS Deals S W E D E N * SWEDEN: Corporate Bankruptcies Up 1% to 488 in January 2011 U K R A I N E * S&P Affirms 'CCC+' Issuer Rating on Ukrainian City of Odessa U N I T E D K I N G D O M FAB UK: S&P Cuts Ratings on Two Classes of Notes to 'BB+ (sf)' HATFIELD PHILIPS: New Special Servicer Won't Affect Ratings JERMON DEVELOPMENTS: Bank of Scotland Repossess Firm's Helicopter MCALISTER CONSTRUCTION: Two Sites in Receivership ROYAL BANK: Moody's Lifts Ratings on Two Subordinated Notes to Ba1 T & A PLANT: Goes Into Administration Due to Debts Owed to HMRC UPCB FINANCE: S&P Assigns 'B+' Rating to US$1-Bil. Sr. Sec. Notes WEST TOWER: Placed Into Administration X X X X X X X X * BOOK REVIEW: Medical Jurisprudence, Insanity, and Toxicology ********* =========================== C Z E C H R E P U B L I C =========================== SAZKA AS: Seeks Dismissal of Moranda's Insolvency Proposal ---------------------------------------------------------- CTK reports that Sazka AS has proposed a rejection of the insolvency proposal filed against it by Radovan Vitek's firm Moranda. CTK relates that Sazka said the proposal does not comprise the facts testifying to its insolvency. According to CTK, the company noted Moranda has also failed to prove it is authorized to file the insolvency petition. According to CTK, Sazka said the real cause behind the insolvency petition are Moranda's efforts to exact its claim using undue pressure on the debtor. Sazka added that no such claim had existed as of the date of filing the petition. Sazka, as cited by CTK, said Moranda's proposal was expedient. Tomas Rybar, Mr. Vitek's lawyer, said the insolvency petition was justified, CTK notes. "It is obvious at first sight that Sazka has made an expedient statement," Mr. Rybar told CTK. "We consider our insolvency proposal as justified, and it is not going to change." The Prague Municipal Court received the insolvency petition against Sazka filed by Moranda on Jan. 17, CTK recounts. Mr. Vitek had bought claims on Sazka worth CZK1.5 billion and he also owns around a quarter of its bonds, CTK discloses. Sazka faces problems due to repayment of bonds issued to finance the construction of the sport arena in Prague-Vysocany, CTK states. Citing Tyden.cz, CTK says Sazka was liable for CZK976 million worth of bills and loans at the end of December. Most of the amount were guarantees for bills and loans of Bestsport, a firm that owns and operates the O2 arena, CTK notes. According to CTK, the creditors include Austria's Bank fur arbeit und wirtschaft (CZK33.9 million), UniCredit Bank (CZK22.5 million), BNP Paribas Fortis (CZK42.7 million), DF Deutsche Forfait (CZK62.5 million), NLB Factoring (CZK135.4 million), Volksbank CZ (CZK75 million), Moranda (CZK60 million) and J&T Banka that owned bills worth CZK250.9 million and at the same time provided a Sazka-guaranteed loan to Bestsport worth CZK249 million. Sazka AS is a provider of lotteries and sport betting games in the Czech Republic. SAZKA AS: Anti-Monopoly Office to Examine Penta Deal ---------------------------------------------------- CTK reports that Petr Rafaj, chairman of the anti-monopoly office (UOHS), on Wednesday said that the UOHS would examine the entry of Penta and E-Invest into Sazka to find out whether the transaction was in line with the competition rules. According to CTK, Mr. Rafaj said that it may be a merger that has to be approved by the UOHS or even a cartel agreement. CTK relates that the UOHS chairman said the anti-monopoly office will require more information about the transaction from the firms since now it only has the information that was published in the media. Sazka and Penta are convinced that an agreement with strategic partners is in line with the competition rules, CTK discloses. Jan Tuna and Martin Danko, the spokespersons for Sazka and Penta, respectively, said that both companies were ready to cooperate with the UOHS in whatever manner they can, CTK notes. On Feb. 9, 2011, the Troubled Company Reporter-Europe, citing Reuters, related that Sazka on Monday said it had agreed to take on Penta Investments and E-Invest as financial partners who would take operating control of Sazka and a share of future profits but no equity in the firm. "We are ready to invest as much as will be needed to end the insolvency proceedings against Sazka as soon as possible," Reuters quoted E-Invest chief Martin Ulcak as saying. "The strategic partnership is for 15 years and there is roughly over CZK2 billion (US$112.7 million) needed now. We have the capacity to cover that." Penta chief Marek Dospiva said the investors would provide money to pay off a missed EUR4 million January payment on the principle of Sazka's 215 million euro bond CZ025854705= and that the bond would be likely repaid by 2021 as planned, Reuters disclosed. Reuters noted that Mr. Dospiva, whose firm owns a majority stake in betting firm Fortuna, said Fortuna's plans for its own lottery plan were unaffected and that Penta would look for synergies with Sazka. Insolvency Proceedings As reported by the Troubled Company Reporter-Europe on Jan. 26, 2011, CTK said Sazka wants the Municipal Court in Prague to order hearing of the insolvency proceedings initiated by Czech businessman Radovan Vitek's firm Moranda against the company. Sazka demands that the court deal with Moranda's proposal in the physical presence of both sides' lawyers, CTK disclosed. If Sazka did not take this step, the court could decide on the insolvency proposal on the basis of the presented documents only, CTK noted. Mr. Vitek asserts that Sazka is in an insolvency situation because it has excessive debts, with total debts worth more than CZK10 billion, according to CTK. He claims that Sazka's owner's equity has a negative value, CTK said. As reported by the Troubled Company Reporter-Europe, Bloomberg News, citing CTK, said Mr. Vitek, who owns Sazka debts worth CZK1.5 billion (US$81.7 million), filed an insolvency proposal against the company on Jan. 17. The Troubled Company Reporter-Europe, citing Bloomberg News, related on Jan. 17 that Sazka Chairman Ales Husak said the company isn't legally in an insolvency situation and will use all available means to fight attempts to put it into bankruptcy. Sazka also doesn't recognize debt claims made by Mr. Vitek and accused him of trying to start a "hostile takeover attempt," Bloomberg quoted Jaromir Cisar, Sazka's lawyer, as saying. Sazka AS is a provider of lotteries and sport betting games in the Czech Republic. ============= D E N M A R K ============= * DENMARK: Senior Bondholders Can't Expect Taxpayer Help -------------------------------------------------------- Josiane Kremer at Bloomberg News reports that Norway's financial regulator says senior bondholders can't expect taxpayers to shield them from losses after the failure of Amagerbanken A/S in neighboring Denmark set a precedent for burden sharing. "That should be the normal thing," Bloomberg quotes Bjoern Skogstad Aamo, the head of the Oslo-based Financial Supervisory Authority, as saying in an interview on Tuesday. "It is an important part of the European discussion that bondholders have to be prepared for losses." Morgan Stanley estimates that Amagerbanken's Feb. 6 failure -- more than four months after the Danish state's guarantee expired -- means senior, unguaranteed debt of EUR320 million (US$436 million) faces a 41.2% loss, Bloomberg notes. According to Bloomberg, Sydbank A/S Chief Executive Officer Karen Froesig said in an interview this week that in Denmark, the bondholder losses triggered by Amagerbanken's failure mean the country's financial industry may face higher funding costs and consolidation as smaller lenders fold. Mr. Skogstad Aamo said funding costs may also increase outside the Nordic country, Bloomberg relates. Bloomberg notes that Mr. Skogstad Aamo said governments shouldn't guarantee anything except deposits. "We think we should avoid guarantees, and this has been a very clear Norwegian position," Mr. Skogstad Aamo, as cited by Bloomberg, said. "We have put the emphasis on a high level of deposit protection -- DKK2 million (US$346,570) for each bank deposit. We think we should have a generous, good guarantee scheme for ordinary citizens but then the owners of shares or bonds should not expect any protection or guarantees." ============= G E R M A N Y ============= QIMONDA AG: Infineon Files Legal Action Against Administrator ------------------------------------------------------------- evertiq reports that Infineon Technologies AG has brought a declaratory action in District Court Munich I against Dr. Michael Jaffe, the insolvency administrator dealing with the bankruptcy estate of Qimonda AG. evertiq relates that when Infineon's memory business was carved out to form Qimonda AG in 2006, Infineon transferred, among other things, patents and other intellectual property rights to the Qimonda Group. At the same time, evertiq notes, Infineon retained rights of use to these patents and other intellectual property rights, secured the same for its licensees, and reached agreements with the Qimonda Group on licenses to future intellectual property rights. Qimonda's insolvency administrator, however, asserts that, as a result of the insolvency of Qimonda AG, these rights of use no longer apply, according to evertiq. evertiq states that the purpose of the legal action is for the court to determine that Infineon's and its licensees' rights to the aforementioned intellectual property rights of the Qimonda Group remain valid. Prior to bringing this action, says evertiq, Infineon negotiated intensively with the insolvency administrator with a view to resolving the differences of opinion out of court. However, evertiq notes, as these efforts have failed to produce an amicable settlement, it is now in the interests of Infineon and its licensees that the legal issues in dispute are settled in court through the legal action recently brought. According to evertiq, besides claiming that the aforementioned rights of use no longer apply, the insolvency administrator, as noted in Infineon's Annual Report for the 2010 fiscal year, has also sought to assert various claims against Infineon in connection with: (i) Infineon's earlier position as a shareholder of Qimonda Dresden GmbH & Co. ohG, (ii) Qimonda's sale of its interest in Inotera to Micron; and (iii) the allegation that Infineon utilized a previously formed shell company and "economically reestablished" that company through the transfer of the memory business; regarding the topic the administrator has, as reported, brought declaratory action against Infineon. evertiq states that provisions formed by Infineon at December 31, 2010, in connection with the Qimonda insolvency total EUR104 million. This figure, according to evertiq, includes a sum set aside by the company based on the positions taken in the settlement negotiations -- a sum which the company will continue to increase in forthcoming quarters and which, from today's perspective, is estimated to amount to a total future charge against earnings of EUR80 million. Infineon, evertiq says, will continue to defend itself resolutely against the claims being made and will draw, as necessary, on all legal remedies available. Nonetheless, the company remains open to finding a settlement with the insolvency administrator in respect of all of the claims he has advanced so that a conclusive solution can be found to all of the issues at stake, evertiq adds. About Qimonda AG Qimonda AG (NYSE: QI) -- http://www.qimonda.com/-- is a leading global memory supplier with a diversified DRAM product portfolio. The Company generated net sales of EUR1.79 billion in financial year 2008 and had -- prior to its announcement of a repositioning of its business -- approximately 12,200 employees worldwide, of which 1,400 were in Munich, 3,200 in Dresden and 2,800 in Richmond, Va. Qimonda AG commenced insolvency proceedings in a local court in Munich, Germany, on January 23, 2009. On June 15, 2009, QAG filed a petition (Bankr. E.D. Va. Case No. 09-14766) for relief under Chapter 15 of the U.S. Bankruptcy Code. Qimonda North America Corp., an indirect and wholly owned subsidiary of QAG, is the North American sales and marketing subsidiary of QAG. QNA is also the parent company of Qimonda Richmond LLC. QNA and QR sought Chapter 11 protection (Bankr. D. Del. Case No. 09-10589) on Feb. 20, 2009. Mark D. Collins, Esq., Michael J. Merchant, Esq., and Maris J. Finnegan, Esq., at Richards Layton & Finger PA, represent the Debtors. Roberta A. DeAngelis, the United States Trustee for Region 3, appointed seven creditors to serve on an official committee of unsecured creditors. Jones Day and Ashby & Geddes represent the Committee. In its bankruptcy petition, Qimonda Richmond, LLC, estimated more than US$1 billion in assets and debts. The information, the Debtors said, was based on Qimonda Richmond's financial records which are maintained on a consolidated basis with Qimonda North America Corp. ============= H U N G A R Y ============= TESCO-GLOBAL: Transfers Litigation Costs Over Liquidation to KDFSz ------------------------------------------------------------------ MTI-Econews, citing trade union sources, reports that Tesco-Global Aruhazak Zrt transferred on Tuesday the HUF65,000 litigation costs claimed by the Independent Union of Trade Workers (KDFSz), over which the union initiated the company's liquidation a week earlier. As reported by the Troubled Company Reporter-Europe on Feb. 4, 2011, MTI-Econews said that 13 Tesco drivers and the KDFz initiated liquidation procedures against Tesco-Global Aruhazak. KDFSZ told MTI on Feb. 2 that 13 workers of the company's Gyal logistics center had initiated the proceedings because the company owes them payment of standby fees retroactively for three years. In addition, they were also demanding payment for work ordered and performed during the standby time, MTI noted. MTI related that the trade union said Tesco owes around 220 drivers hundreds of millions of forints, 13 of whom initiated the liquidation. Tesco- Global said the initiative lacks any basis, according to MTI. Tesco-Global Aruhazak Zrt. is the Hungarian unit of UK retail chain Tesco. ============= I C E L A N D ============= KAUPTHING BANK: Liquidators Seek Order to Dismiss Tchenguiz Claims ------------------------------------------------------------------ Simon Bowers at guardian.co.uk reports that liquidators for Kaupthing Bank hf. have sought an order from the high court in London to halt or dismiss two audacious claims alleging the bank's former management duped Mayfair investment tycoons Robert and Vincent Tchenguiz into putting up millions of pounds of assets as collateral without disclosing the parlous state of Kaupthing's solvency. According to guardian.co.uk, the claims, seeking more than GBP1.8 billion, accuse former Kaupthing bosses of illegally entering into loan and collateral agreements and inducing Tchenguiz-related firms to enter into the agreements through "fraudulent misrepresentations". The agreements were entered into on behalf of the Tchenguiz brothers by Investec (Guernsey) and Bayeux, then acting as trustees of offshore trusts linked to the brothers, guardian.co.uk discloses. Both firms no longer act for the trusts, guardian.co.uk notes. The brothers' claims against the bank have been rejected by Kaupthing's liquidators in Iceland and a court in Reykjavik is expected to rule on whether or not it should hear the claims, guardian.co.uk states. The brothers allege they were duped by the bank despite admitting to a previously close relationship with management, according to guardian.co.uk. As well as being the bank's its largest customer, Robert Tchenguiz held a stake of 1.5% of Kaupthing shares and was a major shareholder and director of Exista, an Icelandic holding company that was the bank's largest shareholder, guardian.co.uk notes. Moreover, the bank had been a minority equity partner in many of Robert Tchenguiz's investments, guardian.co.uk adds. The latest court claims focus on loan security pledges in March and May 2008, just months prior to Kaupthing's collapse, guardian.co.uk states. According to guardian.co.uk, lawyers acting for trusts linked to Vincent Tchenguiz allege these agreements are void or unenforceable because of "a breach of regulatory obligations [by Kaupthing] carrying criminal sanctions". Lawyers for the Tchenguiz Family Trust allege the bank failed to maintain sufficient liquid assets, breached exposure limits, broke rules on owning its own shares and accepting its own shares as collateral, guardian.co.uk relates. The claim, guardian.co.uk says, seeks various remedies including "damages for misrepresentation as to solvency". On Feb. 2, 2011, the Troubled Company Reporter-Europe, citing Bloomberg News, related that Kaupthing's winding-up committee said it rejected claims equivalent to ISK3.3 trillion (US$28.5 billion) as the failed Icelandic lender struggles to settle its debts to creditors following its 2008 collapse. About Kaupthing Bank Headquartered in Reykjavik, Kaupthing Bank -- http://www.kaupthing.com/-- is Iceland's largest bank and among the Nordic region's 10 largest banking groups. With operations in more than a dozen countries, the bank offers a range of services including retail banking, corporate finance, asset management, brokerage, private banking, treasury, and private wealth management. Kaupthing was created by the 2003 merger of Bunadarbanki and Kaupthing Bank. In October 2008, the Icelandic government assumed control of Kaupthing Bank after taking similar measures with rivals Landsbanki and Glitnir. As reported by the Troubled Company Reporter-Europe, on Nov. 30, 2008, Olafur Gardasson, assistant for Kaupthing Bank hf., filed a petition under Chapter 15 of title 11 of the United States Code in the United States Bankruptcy Court for the Southern District of New York commencing the Debtor's Chapter 15 case ancillary to the Icelandic Proceeding and seeking recognition for the Icelandic Proceeding as a "foreign main proceeding" under the Bankruptcy Code and relief in aid of the Icelandic Proceeding. ============= I R E L A N D ============= DJ CAREY: Creditors' Meetings Scheduled for February 18 ------------------------------------------------------- Donal O'Donovan at Irish Independent reports that creditors' meetings have been called for three of DJ Carey's companies. According to Irish Independent, creditors' meetings for the three companies involved in Mr. Carey's business -- DJ Carey Enterprises, Alton and Dublin Janitorial Centre have been scheduled for Feb. 18 at the Red Cow Hotel in Dublin. Irish Independent relates it comes after the business had to write off EUR200,000 of "unauthorized transactions" which were uncovered by auditors. The most recent accounts filed show that the business has been running at a loss since 2006, Irish Independent discloses. The missing money was part of the reason the businesses racked up combined losses of close to EUR2 million by 2009, Irish Independent notes. In that year, the company hired an experienced accountant as a financial controller and demanded a review of how accounts were kept after discovering a series of unexplained and "unauthorized transactions," Irish Independent recounts. According to Irish Independent, the auditors said they "were unable to obtain sufficient and appropriate explanations and evidence from a former employee" about the unexplained transactions. Mr. Carey and Sarah Newman, the TV business personality and star of RTE's 'Dragons' Den', are listed as the companies' main directors, Irish Independent discloses. Further severe losses are expected in the 2010 financial accounts, Irish Independent notes. It is understood that despite calling a creditors' meeting, Mr. Carey has already moved to recover some value from the company and sold most of the company's operations to Tuam-based company Western Hygiene on Feb. 4, Irish Independent states. The three companies supply cleaning and sanitation products to pubs and businesses. ERC IRELAND: Moody's Confirms 'Caa1' Corporate Family Rating ------------------------------------------------------------ Moody's Investors Service has confirmed the Caa1 corporate family rating of ERC Ireland Finance Ltd, an indirect parent company of eircom Group Ltd, as well as the ratings of its related subsidiaries. Concurrently, Moody's has downgraded ERCIF's probability-of-default rating to Caa2 from Caa1. The outlook on the ratings is negative. This rating action concludes the review for possible downgrade initiated on December 27, 2010, following the announcement of the departure of eircom's CFO. Moody's notes that eircom has recently appointed an interim CFO with a track record of dealing with complex balance-sheet situations. Ratings Rationale "The rating action reflects Moody's expectation of an increased risk of default by eircom through some form of debt restructuring, in light of the approaching covenant breach by the company under its senior facilities agreement," said Ivan Palacios, a Moody's Vice President-Senior Analyst and lead analyst for eircom. "Moody's expects this breach to occur in the quarter ended June 2011, if not sooner, on the back of a more challenging economic environment affecting eircom's revenues," continues Mr. Palacios. "The rating action also reflects the uncertainties as regards the timing and options that the company may be considering in relation to balance-sheet remediation," added Mr. Palacios. In Moody's view, a debt restructuring involving a discounted offer on debt components of the capital structure is now more likely, given that the covenant breach is approaching and there is still no clarity regarding a possible equity injection from the shareholders or indications of progress on a covenant amendment process. Such a debt restructuring could be considered a distressed exchange and, by implication, a default under Moody's methodologies. The downgrade of the PDR to Caa2 from Caa1 reflects Moody's view that eircom's default risk has increased. At the same time, the confirmation of the CFR at Caa1 reflects the rating agency's re- evaluation of the potential recovery prospects for debt holders in the event of a debt restructuring. Moody's now expects a family recovery rate of approximately 65% rather than the standard 50% recovery rate. The outlook on the ratings is negative, reflecting eircom's uncertain operating and financial prospects. The ratings could be downgraded as a result of (i) an absence of a detailed plan to reset covenants or receive an equity injection; and/or (ii) indications that eircom might consider a discounted offer on the debt components of its capital structure. Upward pressure on the ratings is unlikely over the short term, as a result of the negative outlook. However, the rating outlook could be stabilized if eircom were to proactively manage the covenant situation while maintaining its current financial profile, with a debt/EBITDA ratio of around 5.5x. Upward pressure could be exerted on the rating over the medium term if eircom were to successfully execute its business plan and an equity injection were to allow the company to rebalance its capital structure and maintain adequate headroom under financial covenants. The ratings affected by the rating action are: - ERCIF's CFR: Confirmed at Caa1 - ERCIF's PDR: Downgraded to Caa2 from Caa1 - ERCIF's EUR350 million worth of senior unsecured floating-rate notes due in 2016: confirmed at Caa3. Loss Given Default (LGD) Assessment changed to LGD5 (83%) from LGD6 (95%). - ERC Ireland Holdings Ltd's ("ERCIH") EUR3.3 billion worth of senior secured bank credit facilities: confirmed at B3. LGD Assessment changed to LGD2 (23%) from LGD3 (38%). - ERCIH's EUR350 million second-lien loan due in 2016: confirmed at Caa3. LGD Assessment changed to LGD4 (68%) from LGD5 (86%). Moody's previous rating action on eircom was implemented on December 27, 2010, when the rating agency placed the company's ratings on review for possible downgrade. ERCIF (previously known as BCM Ireland Finance Ltd) and ERCIH (previously known as BCM Ireland Holdings Ltd) are holding companies of eircom, the principal provider of fixed-line telecommunications services in Ireland and, following its acquisition of Meteor, the third-largest mobile operator in the country. In the year ended June 30, 2010, eircom generated revenues of EUR1.82 billion and adjusted EBITDA (as reported by the company) of EUR679 million. GAELIC ATHLETIC: Needs to Curb Spending to Avoid Bankruptcy ----------------------------------------------------------- Martin Breheny at Irish Independent reports that Tommy Lyons, former Dublin and Offaly football manager, has warned that the Gaelic Athletic Association will run the risk of bankruptcy unless it brings costs under control in line with the dramatically altered economic circumstances currently prevailing in Ireland. Irish Independent relates that the warning comes after it emerged that more than EUR19 million was spent on preparing inter-county teams in 2010. That's an average of about EUR2.1 million for the each of the nine months of inter-county activity from January to September, Irish Independent states. Irish Independent notes that while it's down by 3.7% on 2009, Mr. Lyons said he was astonished that the decrease had been so insignificant and believes that unless a fundamental reappraisal of GAA finances is undertaken, there's a risk that county boards will default on debt, leaving Croke Park to deal with the mess. According to Irish Independent, Mr. Lyons would favor the introduction of a cap on spending on team costs and a more active role being taken by the central authorities in the financial running of counties. He believes that structures should be put in place so that county boards are answerable to Croke Park for all their major spending, Irish Independent relates. This would be accompanied by a cap on training expenditure, Irish Independent discloses. "Christy Cooney should devote the final year of his presidency to addressing this issue," Irish Independent quotes Mr. Lyons as saying. "Everybody is in for a tough time over the next five years and the GAA won't be immune from it. The danger is that if counties keep spending at the current rate, huge debts will be run up, which will land on Croke Park's doorstep. If team costs aren't curbed, they'll end up bankrupting the GAA." The Gaelic Athletic Association (GAA) is an amateur Irish and international cultural and sporting organization focused primarily on promoting Gaelic games, which include the traditional Irish sports of hurling, camogie, Gaelic football, handball and rounders. The GAA also promotes Irish music and dance, and the Irish language. IRON HILL: Moody's Lifts Ratings on Class C Notes to 'Ba3 (sf)' --------------------------------------------------------------- Moody's Investors Service has upgraded the ratings of two CLO notes issued by Iron Hill CLO Limited: -- US$14.007M Class B Senior Secured Deferrable Floating Rate Notes due 2025 Notes, Upgraded to Baa3 (sf); previously on Dec. 23, 2010 Ba3 (sf) Placed Under Review for Possible Upgrade -- US$16.342M Class C Senior Secured Deferrable Floating Rate Notes due 2025 Notes, Upgraded to Ba3 (sf); previously on Dec. 23, 2010 B2 (sf) Placed Under Review for Possible Upgrade Ratings Rationale Iron Hill CLO Limited, issued in March 2008, is a multicurrency collateralized loan obligation backed by a portfolio of mostly high yield European loans of approximately EUR304 million and managed by Guggenheim Partners Europe Limited. This transaction has 6 months remaining till the end of the reinvestment period. The portfolio is denominated in EUR, GBP and US$, with 20.7% exposure to US assets. It is composed of 99% senior secured loans from 23 various industries, the majority of which are Media: Broadcasting & Subscription and Services: Business, and Healthcare & Pharmaceuticals. According to Moody's, the upgrade rating actions taken on the notes is a result primarily of the improved credit quality of the portfolio and increased overcollateralization cushions since the last rating action, which are driven by reinvestment of sales proceeds from prepayments, defaults, credit impaired and credit improved assets by the collateral manager. As of the latest collateral administrator report dated January 2011, the Class A, Class B, and Class C overcollateralization ratios are reported at 126.4%, 121.0%, and 115.3% respectively, versus July 2009 levels of 117.3, 112.6%, and 107.7% respectively. In addition, the WARF has improved from 2914 in July 2009 to 2610 as per the collateral administrator report. The deal also experienced a decrease in Caa assets from 13.5% of the portfolio to 9.1% over the same period. In the base case, Moody's analyzed the underlying collateral pool with a stressed default probability at 4 years of 24.6% which is consistent with an adjusted weighted average rating factor of 3569, a diversity score of 36 and a weighted-average recovery rate of 66.4%. Moody's also ran sensitivity analysis on key parameters for the rated notes. For instance, if the weighted average rating factor was changed by 200, the model outputs of all rated notes would not be affected by more than 1 notch. Under this methodology, Moody's used its Binomial Expansion Technique, whereby the pool is represented by independent identical assets, the number of which is being determined by the diversity score of the portfolio. The default and recovery properties of the collateral pool are incorporated in a cash flow model where the default probabilities are subject to stresses as a function of the target rating of each CLO liability being reviewed. The default probability range is derived from the credit quality of the collateral pool, and Moody's expectation of the remaining life of the collateral pool. The average recovery rate to be realized on future defaults is based primarily on the seniority and jurisdiction of the assets in the collateral pool. The cash flow model used for this transaction, whose description can be found in the methodology listed above, is Moody's EMEA Cash-Flow model. Moody's also notes that 54.5% of the collateral pool consists of debt obligations whose credit quality has been assessed through Moody's credit estimates. Moody's Investors Service did not receive or take into account a third party due diligence report on the underlying assets or financial instruments related to the monitoring of this transaction in the past six months. * IRELAND: Luxury Apartments to Relaunch Receivership Sale ---------------------------------------------------------- The Anglo-Celt reports that Declan Taite of FGS has appointed Gunne Reynolds to dispose of 60 apartments in the upmarket complex of Farnham Court, Cavan, and they are set for launch with prices from EUR70,000. The complex is on the left-hand side of Farnham Road as you come out of Cavan town in the direction of Cavan General Hospital, according to Anglo-Celt. The report relates that it consists of two blocks with 30 apartments each, previously on the market for more than twice the prices now being sought. None were sold so all 60 units are now for sale. The auctioneer, David Reynolds, said that the development is due to be relaunched on the weekend of Feb. 19, and is scheduled to be fully advertised over the next two weeks, the report notes. Anglo-Celt discloses that apartments can be purchased with or without furniture at a starting price of EUR70,000 for a one- bedroom apartment and EUR83,000 for a two-bedroom unit. Declan Taite of FGS is one of Ireland's leading experts in corporate recovery and insolvency. ========= I T A L Y ========= BANCA POPOLARE SC: May Combine Leasing Units with Popolare Milano ----------------------------------------------------------------- Sonia Sirletti at Bloomberg News, citing MF, reports that Banca Popolare di Milano Scarl, Banco Popolare SC and Banca Popolare dell'Emilia Romagna Scrl may combine their leasing units. According to Bloomberg, MF noted that Popolare di Milano owns 40% of leasing company Selmabipiemme, while the other two lenders control Alba Leasing. Bloomberg relates that the newspaper said a combination may happen "only if" Mediobanca SpA decides to sell its 60% stake in Selmabipiemme. Banco Popolare Societa Cooperativa is an Italy-based banking company. It offers a range of banking products and services, including current and savings accounts, online banking, telephone banking, investments, mutual funds, financial advice, credit and debit cards and insurance. * * * As reported by the Troubled Company Reporter-Europe on Sept. 30, 2010, Moody's Investor Services changed the outlook to negative from stable on the A2 long-term deposit rating and on the Prime-1 short-term deposit rating of Banco Popolare Societa Cooperativa and downgraded the bank financial strength rating to D+ from C- (which now translates to a Baa3 on the long-term rating scale). Moody's commented that the downgrade and the negative outlook on the deposit ratings of Banco Popolare reflect the significant challenges that it faces. Against an operating environment that has become less accommodating for most Italian banks, Banco Popolare needs to finalize the restructuring and integration of its acquisitions, while at the same time it needs to establish a profitable, well capitalized business model. The obstacles it faces towards this are significant: it has low capital levels, and its internal capital generation is constrained by its low profitability, whereas external capital raising in the market is difficult with the company's corporate structure. Disposal of non-core assets could strengthen capital levels, but further impact the bank's ability to generate sustainable profit and weaken its franchise, according to Moody's. While the bank is continuing to take measures aimed at de-risking its operations and improving profitability, efficiency and capital, Moody's believes that the achievement of these goals however remains a significant challenge, and that further downward rating pressure cannot be excluded if no visible progress is made. Moody's said any lack of improvement in the bank's financial profile, and a failure to reach a Core Tier 1 ratio above 7% in a short timeframe in particular, could prompt Banco Popolare's BFSR to become more weakly positioned in the D+ category, or even result in a further lowering of the BFSR itself. LOTTOMATICA GROUP: S&P Withdraws 'BB' Rating on EUR300-Mil. Notes ----------------------------------------------------------------- Standard & Poor's Ratings Services withdrew its 'BB' issue-level rating on Lottomatica Group SpA's proposed EUR300 million subordinated interest-deferrable capital securities. The rating withdrawal follows the company's announcement that its board of directors has withdrawn the hybrid bond transaction previously announced in November 2010. S&P's 'BBB-'corporate credit rating on Lottomatica remains unchanged. The rating outlook is stable. In addition, Lottomatica announced a change to its dividend policy; it will not pay a cash dividend in 2011, and dividends going forward will be limited to 50% of free operating cash flow. S&P expects this financial policy change will improve discretionary cash flow generation and believe it could result in greater-than-expected debt repayment over the next couple years. S&P had previously cited its view that the company would generate a modest level of discretionary cash flow generation this year, incorporating S&P's expectation for much lower capital spending and a dividend in line with historical levels (EUR125 million in 2010). Lottomatica also announced preliminary 2010 year-end results, which were marginally better than S&P's previous expectations for single-digit revenue growth and flat EBITDA generation. Lottomatica reported a 6% increase in revenue and a 3.5% increase in EBITDA. In 2011, S&P expects EBITDA growth in the low- to mid- single-digit area. S&P estimates that its measure of operating lease-adjusted debt to EBITDA was in the mid-3x area at Dec. 31, 2010. S&P adjusts debt to include only 50% of the amount of Lottomatica's EUR750 million capital securities as debt to reflect the intermediate equity content assigned under S&P's criteria. Also, S&P treat the EUR100 million UniCredit investment as debt given the payment of preferred dividends and the option to call the investment in 2014. In addition, S&P deduct distributions to minority investors in the instant ticket consortium from its measure of EBITDA. At the 'BBB-' rating, S&P expects Lottomatica to maintain debt to EBITDA (after applying its adjustments and assigning intermediate equity content to Lottomatica's existing capital securities) between 3.5x and 4.0x. Generally, S&P expects Lottomatica to track closer to the lower end of this range to allow the company flexibility to make sizable investments in its business when opportunities arise. Ratings List Lottomatica Group S.p.A. Corporate Credit Rating BBB-/Stable/-- Not Rated (NR) Action Lottomatica Group S.p.A. To From -- ---- EUR300M sub int-deferrable cap secs NR BB =================== L U X E M B O U R G =================== BOZEL SA: Bozel LLC Files New Schedules of Assets and Liabilities ----------------------------------------------------------------- Bozel, LLC, filed with the U.S. Bankruptcy Court for the Southern District of New York on January 24, 2011, corrected schedules of its assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ---------- ----------- A. Real Property US$0 B. Personal Property US$1,214,975 C. Property Claimed as Exempt D. Creditors Holding Secured Claims US$0 E. Creditors Holding Unsecured Priority Claims US$7,267,684 F. Creditors Holding Unsecured Non-priority Claims US$0 ---------- ---------- TOTAL US$1,214,975 US$7,267,684 A copy of the Corrected Schedules is available for free at: http://bankrupt.com/misc/BozelLLC.AmendedSAL.pdf About Bozel S.A. Bozel S.A. is a mineral mining company based in Luxembourg. Bozel S.A. sought bankruptcy protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 10-11802) on April 6, 2010. William F. Savino, Esq., Daniel F. Brown, Esq., and Beth Ann Bivona, Esq., at Damon Morey LLP in Buffalo, N.Y., represent the Debtor, and BDO Consulting serves as the Debtor's financial advisor. Allen G. Kadish, Esq. -- kadisha@gtlaw.com -- Kaitlin R. Walsh, Esq. -- walshkr@gtlaw.com -- and Mark D. Bloom, Esq. -- bloomm@gtlaw.com -- at Greenberg Traurig, LLP, represent the Liquidator. The Debtor estimated assets and debts at US$50 million to US$100 million in its Chapter 11 petition. Bozel, LLC, a subsidiary of Bozel SA, filed a separate petition for Chapter 11 on January 10, 2011 (Bankr. S.D.N.Y. Case No. 11-10033). Gary C. Fischoff, Esq., at Steinberg, Fineo, Berger & Fischoff, in Woodbury, N.Y., represents the Debtor as counsel. The Debtor estimated assets of US$1 million to US$10 million and debts of US$10 million to US$50 million in its Chapter 11 petition. The two cases are jointly administered under Case No. 10-11802. ============= M O L D O V A ============= TRISTAN OIL: Fitch Affirms Long-Term Issuer Default Rating at 'RD' ------------------------------------------------------------------ Fitch Ratings affirms Tristan Oil Ltd's Long-term foreign currency Issuer Default Rating at 'RD' and senior unsecured rating at 'C' with a Recovery rating of 'RR6' and withdraws all the above ratings. The withdrawal of Tristan's IDR and all other ratings is due to insufficient information to maintain ratings as the company proceeds with a prospectively lengthy arbitration process. Tristan's IDR was downgraded to 'RD' on August 3, 2010, when, according to the company, it was not able to make a scheduled interest payment on its outstanding eurobonds following the expiry of a 30-day grace period at end-July 2010. Fitch will no longer provide ratings or analytical coverage of the company. =========== P O L A N D =========== ZAKLAD WODOCIAGOW: Fitch Assigns 'BB+' National Long-Term Rating ---------------------------------------------------------------- Fitch Ratings has assigned Zaklad Wodociagow i Kanalizacji Sochaczew Sp. z o.o. a National Long-term rating of 'BB+(pol)'. The Outlook is Stable. ZWiK, a Polish water and sewage company, is fully owned by the City of Sochaczew. ZWiK's rating is assessed on a standalone basis with a one-notch uplift for city support reflecting ZWiK's zero dividend policy, contributions to capex funding, and possibly direct subsidies. Fitch notes that the city currently guarantees ZWiK's outstanding bonds, but direct guarantees are not expected for future funding. While Fitch views the cost-plus tariff regime as supportive, the city-led approval process exposes it to political risk. The rating is supported by ZWiK's low-risk business profile stemming from its monopoly position in Sochaczew for water and sewage services, the existing level of tariffs and the high projected tariff increases under a cost-plus pricing regime. Against this, the company's large capex plans, uncertainties related to its funding and the challenges this represents for the small management team constrain ZWiK's rating. The capex plan is expected to be largely (55%) funded from a grant by the European Union, with the balance coming from external debt funding (33%), city contribution (10%) and cash flow generation (2%). Failure to obtain European Commission approval would negatively affect ZWiK's standalone profile if the project scope is not reduced and it is largely debt funded. Fitch also believes that the project execution and completion risk is significant, taking into account the small size of the company and the lack of experience. The external debt funding for the project is expected in the form of a revenue bond, benefiting from a Municipal Support Agreement with the city. The MSA, among other factors, is expected to provide for direct subsidies to the water and sewage tariffs if the availability ratio (tariffs as a proportion of dispensable household income) exceeds 4%. The rating also factors in Fitch's expectation that a substantial increase in gross leverage to around 10x in 2011-2012 (providing the capex plans progress as anticipated) will be followed by a gradual reduction to a more moderate level, albeit still higher than for other Polish water and sewage companies rated by Fitch. Similarly, expected interest and debt service coverage ratios are weak, reflecting Fitch's assumption that the ultimate external debt funding will be raised at market (as opposed to subsidized) rates and without a grace period for amortization. The rating may be downgraded if debt funding of capex is higher than expected or if tariffs do not fully reflect ZWiK's cost base. While there is scope for cost savings on the investment projects which would be credit positive, Fitch views the upgrade potential as limited. Liquidity is adequate with PLN22.1 million of cash compared to PLN5.4 million of short-term debt at YE10. =========== R U S S I A =========== ALLIANCE OJSC: Fitch Assigns 'B' Rating to RUB5BB Domestic Notes ---------------------------------------------------------------- Fitch Ratings has assigned Russia-based OJSC Alliance Oil Company's 9.25% RUB5 billion domestic notes due 2014 a final local currency senior unsecured rating of 'B', a final Recovery Rating of 'RR4', and a final National senior unsecured rating of 'BBB(rus)'. The notes represent a senior unsecured obligation of OJSC Alliance Oil Company and are guaranteed by Alliance Oil Company Ltd. Fitch acknowledges that a cross-default provision in the notes' documents relates to other capital market instruments, including Alliance Oil's outstanding senior unsecured bonds and existing loans. Alliance Oil's existing ratings are: -- Long-term foreign and local currency Issuer Default Ratings: 'B'; Outlook Stable -- Short-term foreign and local currency IDRs: 'B' -- National Long-term rating: 'BBB(rus)'; Outlook Stable GEFEST JSIC: Fitch Gives Positive Outlook; Affirms 'B+' IFS Rating ------------------------------------------------------------------ Fitch Ratings has revised JSIC GEFEST's rating Outlook to Positive from Stable and affirmed its Insurer Financial Strength Rating at 'B+' and National IFS rating at 'A(rus)'. The Outlook revision reflects Fitch's expectation that GEFEST's capital position will improve following a capital injection that will be completed in Q111. According to the agency's internal assessment, GEFEST's risked-adjusted capital position will have strengthened following the expected capital injection in comparison with previous years. Premium volumes recovered in 2010 after a notable contraction in 2009 as a result of the financial crisis. The key rating drivers that could result in an upgrade include maintenance of the strengthened risk-adjusted capital position through continued adherence to a conservative investment policy together with cautious and profitable expansion in new or non-core lines of business. The rating rationale is the sustainability of GEFEST's underwriting performance, the presence of efficient reinsurance protection covering the insurer's core lines, the retention of its strong position in the construction and erection insurance segment, and Fitch's reduced concerns related to its exposure to new contractors' liability risks as this line of insurance was terminated by the Russian government in August 2010. Due to the new minimum statutory capital requirements that come into force in 2012, GEFEST arranged a statutory capital increase in 2010 to RUB750 million from RUB294 million, which is currently in progress and is expected to be finalized in Q111. The agency notes that the company's combined ratio had improved significantly as of 9M10 (88.1% in 9M10; 120.3% in 9M09), although the 9M09 result was an exception to the company's track record of strong underwriting performance, primarily driven by a one-off increase in administrative expenses at the same time as premium volumes declined. Fitch expects that the combined ratio at YE10 will continue this improving trend and will be significantly lower than at YE09. GEFEST's adequate reinsurance protection has helped to prevent the capital from depletion after a large gross claim relating to port infrastructure damaged by a storm in Sochi which occurred in 2009 and was fully recovered and settled in 2010. GEFEST continues to maintain its market position as a strong niche player. Fitch views the insurer's underwriting expertise in its key CAR/EAR segment as one of its key competitive advantages. The insurer has indicated its strategy is to grow gross premium volumes and to explore new lines of business. Its intention to grow through new lines of business is viewed by Fitch as a constraining factor on the company's rating as the growth strategy could lead to a deterioration of the combined ratio. Fitch will also continue to monitor the run-off of the company's exposure to contractors' liability risks despite the fact that the underwriting performance for this line has proved to be profitable so far (loss ratio was equal to 9.53% in 9M10). The agency's concerns related to this line of business include the financial risk in the coverage, the high probability of maximum loss in the case of a claim and the long-term nature of the risks. Although a significant part of this portfolio has a maturity date before end- 2013, it also includes some contracts which mature in 2020. GEFEST is a non-life insurance company with gross premiums written of RUB1.2 billion and gross assets of RUB2.2 billion at end-9M10. At present, GEFEST is 60% owned by 21 individuals (including members of the management team) and 40% by eight corporate entities. Fitch has affirmed these ratings: GEFEST -- IFS at 'B+'; revised Outlook to Positive from Stable; -- National IFS at 'A (rus)'; revised Outlook to Positive from Stable. RUSIA PETROLEUM: Auction Postponed to March 1 --------------------------------------------- The sale of Rusia Petroleum, the license holder of the giant Kovykta gas field, has been postponed for two weeks and will be held on March 1, Vladimir Soldatkin at Reuters reports, citing Oleg Smetanin, the sale administrator. Mr. Smetanin told Reuters on Tuesday that, "The sale was postponed as RUSIA Petroleum changed its bank account details after it had registered with another tax payment unit." Initially, the auction was mooted for Feb. 15 with a starting price of RUR15.083 billion, Reuters notes. On Dec. 28, 2010, the Troubled Company Reporter-Europe, citing Bloomberg News, reported that Rusia Petroleum's assets, including the rights and equipment to develop Kovykta will be put up for auction. As reported by the Troubled Company Reporter-Europe on Oct. 21, 2010, Reuters said a Russian regional court declared Rusia Petroleum insolvent and opened bankruptcy proceedings. The court said in an announcement posted on the Irkutsk Arbitrage Court Web site that the bankruptcy proceedings will go on for six months, until April 19, 2011, according to Reuters. Reuters disclosed TNK-BP, half owned by British major BP Plc and a quartet of Russia-connected billionaires, filed a petition to initiate bankruptcy proceedings for Rusia Petroleum in June and said that it was determined to recover its investment in the gas project. Rusia Petroleum is a wholly owned unit of TNK-BP. SITRONICS JSC: Fitch Affirms 'B-' Long-Term Issuer Default Rating ----------------------------------------------------------------- Fitch Ratings has affirmed Russia-based JSC Sitronics's Long-term foreign currency Issuer Default Rating at 'B-' with a Negative Outlook. Fitch has also affirmed Sitronics's senior unsecured foreign currency rating at 'B-'. The agency has additionally assigned a Long-term local currency IDR of 'B-' with a Negative Outlook, a senior unsecured local currency rating of 'B-', National Long-term rating of 'BB-(rus)' with a Negative Outlook and a national senior unsecured rating of 'BB-(rus)'. "The affirmation reflects tangible support from Sitronics's parent JSFC Sistema ('BB-', Positive) and its significant financial exposure to this subsidiary. Fitch believes this support is likely to remain in place only if this investment retains positive equity value and does not expose the holding to significant additional losses," said Nikolay Lukashevich, Senior Director in Fitch's TMT team. Sitronics's ratings remain inconsistent with a 'B-' level on a stand-alone basis. The negative outlook reflects continuing operational difficulties and a challenge to turn around the company's financial performance. Sitronics's leverage remains high, at 6.4x Net Debt/EBITDA on the last-twelve-month basis at end-Q310. Significant debt results in high interest payments, which may increase as short-term maturities are likely to be refinanced at the same or higher cost. Fitch expects Sitronics to be able to pay interest with internal cash flow, but its funds from operations/interest payments is estimated by Fitch to have fallen below 2.0x in 2010 and likely to remain in that territory in the mid-term. Sitronics's margins are generally low and volatile. The company's EBITDA margin improved to 7.4% for 9m10 from 4.1% for 9m09 due to cost-cutting and restructuring, including the disposal of its low- margin IT distribution business in April 2009. This disposal also provided Sitronics with a one-off decrease in working capital, which made it free cash flow positive at end-2009. However, Fitch does not expect further growth of the EBITDA margin, if any, to be significant, at least until 90-nanometre integrated circuit production is launched. High interest payments and required capex, partly in conjunction with the Sitronics-Nano project, are likely to keep FCF negative in the short-to-medium term. Sitronics remains heavily reliant on orders from Sistema, which accounted for 31% of its revenue in 2009, although this concentration adds some stability to the company's sales. Overall, although Sitronics is a niche player well positioned within the Russian and CIS territories, Fitch believes that the company will find it difficult to close the competitive gap with other global companies due to its small scale and focus on less- advanced technologies. Ongoing financial support from Sistema is critical for Sitronics's operating sustainability due to its weak FCF generation, high leverage and substantial refinancing risks. Sistema's financial exposure to Sitronics is substantial. The company publicly disclosed that the holding guarantees Sitronics' US$230m loan from Bank of Moscow. In addition, Sistema effectively guarantees Rosnano's US$230 million investment into Sitronics-Nano, a JV with Sitronics, through a put option mechanism. Fitch also assigned 'B-' local currency and 'BB-(rus)' national instrument ratings to Sitronics two domestic exchanged-traded Ruble bonds: series one RUB2 billion bond with a stated maturity in June 2013 and investor put option in June 2012 and series two RUB3 billion bond with a stated maturity in October 2013 and investor put option in October 2012. ========= S P A I N ========= * Moody's Reviews Ratings on 39 Notes From 12 Spanish RMBS Deals ---------------------------------------------------------------- Moody's Investors Service has placed under review for possible downgrade the ratings of 39 classes of notes issued by 12 Spanish RMBS transactions. The review was prompted by the worse-than-expected performance of the collateral backing the notes and follows a portfolio review of the performance of all 217 Moody's rated Spanish RMBS transactions currently outstanding. A complete list of all 39 classes of notes placed on review for possible downgrade can be found at the end of this press release. Moody's expects to conclude its rating reviews within six months. Transaction Reviews Moody's has conducted a portfolio review of the performance of all the 217 Moody's rated Spanish RMBS transactions outstanding. During the analysis, the rating agency flagged tranches corresponding to 12 deals for which collateral performance to date deviates from Moody's expectations. In these transactions the level of available credit enhancement is not sufficient to absorb the future projected losses on the respective portfolios. Moody's has also factored into its review the negative outlook for Spanish RMBS. The sector outlook reflects these expectations of key macro-economic indicators for 2011: GDP growth below 1%; house prices to continue to fall with an eventual peak-to-trough drop in prices of around 20%; unemployment likely to remain above 19% and an increasing number of unemployment benefits expiration. The full review of the ratings of the affected notes will take into account the current capital structures in their respective transactions. As part of its analysis Moody's will reassess its lifetime loss expectation for each of the 12 transactions. Moody's will also request updated loan-by-loan information to revise its MILAN Aaa credit enhancement. Loan-by-loan information will also allow Moody's to validate its assumptions with regards to which loans have a higher default propensity. The lifetime loss and the MILAN Aaa credit enhancement are the key parameters that Moody's uses to calibrate its loss distribution curve, which is one of the core inputs in Moody's cash-flow model. Transaction Overviews - AyT Caixanova Hipotecario I closed in December 2007. The assets supporting the loans include loans to SMEs and loans backed by second homes (27% and 20% respectively at closing). Loans more than 90 days in arrears represented 3.41% of the current portfolio balance as of October 2010, while cumulative defaults amounted to 2.83% of the original portfolio balance. The pool factor was 72.22% as of the same date. The reserve fund is at 0.65% of its target level. Current expected loss assumption for this transaction is 1.48% of original pool balance. - AyT Hipotecario Mixto V closed in July 2006. The assets supporting the notes are first-lien mortgage loans secured by residential properties located in Spain. Loans more than 90 days in arrears represented 1.75% of the current portfolio balance as of December 2010, while cumulative defaults amounted to 0.56% of the original portfolio balance. The pool factor was 61.84% as of the same date. The reserve fund is at 74% of its target level. Current expected loss assumption for this transaction is 0.66% of original pool balance. - BBVA RMBS 1 closed in February 2007. All the loans supporting the notes had a loan to value over 80% at closing. Loans more than 90 days in arrears represented 0.54% of the current portfolio balance as of December 2010, while cumulative defaults amounted to 2.31% of the original portfolio balance. The last figure does not include loans repossessed before being 12 months in arrears. Outstanding repossessions represented 0.80% of original pool balance as of December 2010. The pool factor was 70.20% as of the same date. The reserve fund is at 10.62% of its target level. Current expected loss assumption for this transaction is 1.90% of original pool balance. - BBVA RMBS 3 closed in July 2007. 54% of loans supporting the notes have a loan to value over 80% at closing. Loans more than 90 days in arrears represented 1.23% of the current portfolio balance as of November 2010, while cumulative defaults amounted to 5.44% of the original portfolio balance. The last figure does not include loans repossessed before being 12 months in arrears. Outstanding repossessions represented 1.42% of original pool balance as of November 2010. The pool factor was 76.11% as of the same date. The reserve fund is fully drawn and there is an unpaid PDL of EUR 97.31 million, larger than class C balance. Current expected loss assumption for this transaction is 2.40% of original pool balance. - BBVA RMBS 6 closed in November 2008. 11.5% of the loans supporting the notes had an LTV over 80% at closing, 7.6% corresponded to second homes and 6.16% were granted to multiple borrowers. Loans more than 90 days in arrears represented 0.68% of the current portfolio balance as of October 2010, while cumulative defaults amounted to 0.24% of the original portfolio balance. The last figure does not include loans repossessed before being 12 months in arrears. Outstanding repossessions represented 0.19% of original pool balance as of October 2010. The pool factor was 83.42% as of the same date. The reserve fund has been drawn for 3 periods and is currently at 88.49% of its target level. Current expected loss assumption for this transaction is 1% of original pool balance. - Hipocat 11 closed in March 2007. All the loans supporting the notes correspond to flexible products .A large share of loans have a loan to value over 80% and approximately 30% of the pool was granted to non-Spanish nationals. Loans more than 90 days in arrears represented 3.5% of the current portfolio balance as of October 2010, while cumulative defaults amounted to 14.15% of the original portfolio balance. The pool factor was 50% as of the same date. The reserve fund is fully drawn and there is an unpaid PDL of EUR58.73 million, which represents 91.77% of class C balance. Classes B and C are not receiving any interest since October 2010 and January 2010 respectively, following trigger breach and insufficient available funds to meet these payments. Current expected loss assumption for this transaction is 8% of original pool balance. - IM Sabadell RMBS 3 closed in December 2008. The assets supporting the notes are first-lien mortgage loans secured by residential properties located in Spain. Loan purpose for 9.46% of the loans at closing was the acquisition of a second home. Loans more than 90 days in arrears represented 0.80% of the current portfolio balance as of December 2010, while cumulative defaults amounted to 0.59% of the original portfolio balance. The pool factor was 79.12% as of the same date. The reserve fund is at 92.72% of its target level. Current expected loss assumption for this transaction is 1.16% of original pool balance. - MBS Bancaja 3 closed in June 2006. The assets supporting the notes are first-lien mortgage loans secured by properties located in Spain. 13% of the initial portfolio comprised commercial properties. Loans more than 90 days in arrears were equal to 1.91% of the current pool balance as of December 2010, while cumulative defaults amounted to 1.12% of the original portfolio balance. The pool factor was 50.36% as of the same date. The reserve fund is at target but was drawn slightly in some payment dates. Current expected loss assumption for this transaction is 0.55% of original pool balance. - Rural Hipotecario X closed in June 2008. The assets supporting the notes are first-lien mortgage loans secured by properties located in Spain. The pool includes a small percentage of high LTV loans, loans to non-Spanish residents and second homes. Loans more than 90 days in arrears represented 2.28% of the current portfolio balance as of November 2010, while cumulative defaults amounted to 0.85% of the original portfolio balance. The last figure does not include loans repossessed before being 12 months in arrears. Outstanding repossessions represented 0.08% of original pool balance as of November 2010. The pool factor was 80.48% as of the same date. The reserve fund is at 83.66% of its target level. Current expected loss assumption for this transaction is 1% of original pool balance. - TDA 22 Mixto closed in December 2004. The assets supporting the notes are first-lien mortgage loans secured by properties located in Spain. Each subpool backs a different set of notes. Subpool 1, which does not include any high LTV loan, has a strong concentration in the region of Andalusia. Subpool 2 included high LTV loans and has a strong concentration in the region of Catalonia. Loans more than 90 days in arrears represented 2.47% of the current portfolio balance as of September 2010 in the case of subpool 1 and 1.87% for subpool 2, while cumulative defaults amounted to 2.08% and 1.34% of the original portfolio balance respectively. The pool factors were 34.71% and 43.81% respectively as of the same date. The reserve funds are at 55.36% and 87.45% of their target level respectively. Current expected loss assumptions for this transaction are 0.26% and 0.42% of original pool balance respectively. - TDA 30 closed in March 2008. The assets supporting the notes are first-lien mortgage loans secured by properties located in Spain. The pool includes high LTV loans (20.84% at closing), second homes (15.65%), loans to non residents (10.85%) and loans originated via broker (6.67%). Loans more than 90 days in arrears represented 0.72% of the current portfolio balance as of September 2010, while cumulative defaults amounted to 1.61% of the original portfolio balance. The pool factor was 79.25% as of the same date. The reserve fund is at 97.98% of its target level. Current expected loss assumption for this transaction is 0.95% of original pool balance. - Valencia Hipotecario 5 closed in December 2008. The assets supporting the notes are first-lien mortgage loans secured by properties located in Spain. The pool includes high LTV loans (13.84% as of November 2010), second homes (10.05%) and loans to non residents (15.3%). Loans more than 90 days in arrears represented 2.60% of the current portfolio balance as of November 2010, while cumulative defaults amounted to 1.23% of the original portfolio balance. The last figure does not include loans repossessed before being 12 months in arrears. Outstanding repossessions represented 0.19% of original pool balance as of November 2010. The pool factor was 88.29% as of the same date. The reserve fund is at 76.1% of its target level. Current expected loss assumption for this transaction is 2.75% of original pool balance. List of Affected Notes The classes of notes affected by the rating review are detailed below. Issuer: AYT CAIXANOVA HIPOTECARIO I FTA -- EUR281.1M A Certificate, Aaa (sf) Placed Under Review for Possible Downgrade; previously on Dec 11, 2007 Definitive Rating Assigned Aaa (sf) -- EUR8.4M B Certificate, A2 (sf) Placed Under Review for Possible Downgrade; previously on Dec 11, 2007 Definitive Rating Assigned A2 (sf) -- EUR6.3M C Certificate, Baa1 (sf) Placed Under Review for Possible Downgrade; previously on Dec 11, 2007 Definitive Rating Assigned Baa1 (sf) -- EUR4.2M D Certificate, Ba2 (sf) Placed Under Review for Possible Downgrade; previously on Dec 11, 2007 Definitive Rating Assigned Ba2 (sf) -- EUR6.6M E Certificate, Ca (sf) Placed Under Review for Possible Downgrade; previously on Dec 11, 2007 Definitive Rating Assigned Ca (sf) Issuer: AyT HIPOTECARIO MIXTO V FTA -- EUR13.4M C Certificate, Baa3 (sf) Placed Under Review for Possible Downgrade; previously on Jul 18, 2006 Definitive Rating Assigned Baa3 (sf) Issuer: BBVA RMBS 1 FTA -- EUR1400M A2 Certificate, Aaa (sf) Placed Under Review for Possible Downgrade; previously on Feb 20, 2007 Definitive Rating Assigned Aaa (sf) -- EUR495M A3 Certificate, Aaa (sf) Placed Under Review for Possible Downgrade; previously on Feb 20, 2007 Definitive Rating Assigned Aaa (sf) -- EUR120M B Certificate, A1 (sf) Placed Under Review for Possible Downgrade; previously on Apr 2, 2009 Downgraded to A1 (sf) -- EUR85M C Certificate, Ba3 (sf) Placed Under Review for Possible Downgrade; previously on Apr 2, 2009 Downgraded to Ba3 (sf) Issuer: BBVA RMBS 3 FTA -- EUR1200M A1 Certificate, Aa1 (sf) Placed Under Review for Possible Downgrade; previously on May 4, 2009 Downgraded to Aa1 (sf) -- EUR595.5M A2 Certificate, Aa1 (sf) Placed Under Review for Possible Downgrade; previously on May 4, 2009 Downgraded to Aa1 (sf) -- EUR960M A3 Certificate, Aa1 (sf) Placed Under Review for Possible Downgrade; previously on Apr 2, 2009 Downgraded to Aa1 (sf) -- EUR156M B Certificate, Baa3 (sf) Placed Under Review for Possible Downgrade; previously on Apr 2, 2009 Downgraded to Baa3 (sf) -- EUR88.5M C Certificate, B3 (sf) Placed Under Review for Possible Downgrade; previously on Apr 2, 2009 Downgraded to B3 (sf) Issuer: BBVA RMBS 6 FTA -- EUR4795.1M A Certificate, Aaa (sf) Placed Under Review for Possible Downgrade; previously on Nov 11, 2008 Definitive Rating Assigned Aaa (sf) -- EUR82.5M B Certificate, A1 (sf) Placed Under Review for Possible Downgrade; previously on Nov 11, 2008 Definitive Rating Assigned A1 (sf) -- EUR117.4M C Certificate, Baa3 (sf) Placed Under Review for Possible Downgrade; previously on Nov 11, 2008 Definitive Rating Assigned Baa3 (sf) Issuer: HIPOCAT 11 FTA -- EUR1083.2M A2 Notes, A2 (sf) Placed Under Review for Possible Downgrade; previously on Dec 18, 2009 Downgraded to A2 (sf) -- EUR200M A3 Notes, A2 (sf) Placed Under Review for Possible Downgrade; previously on Dec 18, 2009 Downgraded to A2 (sf) -- EUR52.8M B Notes, B1 (sf) Placed Under Review for Possible Downgrade; previously on Dec 18, 2009 Downgraded to B1 (sf) -- EUR64M C Notes, Ca (sf) Placed Under Review for Possible Downgrade; previously on Dec 18, 2009 Downgraded to Ca (sf) Issuer: IM Sabadell RMBS 3 FTA -- EUR1411.2M A Certificate, Aaa (sf) Placed Under Review for Possible Downgrade; previously on Dec 10, 2008 Definitive Rating Assigned Aaa (sf) -- EUR14.4M B Certificate, A1 (sf) Placed Under Review for Possible Downgrade; previously on Dec 10, 2008 Definitive Rating Assigned A1 (sf) -- EUR14.4M C Certificate, Baa3 (sf) Placed Under Review for Possible Downgrade; previously on Dec 10, 2008 Definitive Rating Assigned Baa3 (sf) Issuer: MBS BANCAJA 3 FTA -- EUR668M A2 Certificate, Aaa (sf) Placed Under Review for Possible Downgrade; previously on Apr 3, 2006 Definitive Rating Assigned Aaa (sf) -- EUR13.2M B Certificate, Aa2 (sf) Placed Under Review for Possible Downgrade; previously on Apr 3, 2006 Definitive Rating Assigned Aa2 (sf) -- EUR11.6M C Certificate, A2 (sf) Placed Under Review for Possible Downgrade; previously on Apr 3, 2006 Definitive Rating Assigned A2 (sf) -- EUR7.2M D Certificate, Baa3 (sf) Placed Under Review for Possible Downgrade; previously on Apr 3, 2006 Definitive Rating Assigned Baa3 (sf) -- EUR10M E Certificate, Ca (sf) Placed Under Review for Possible Downgrade; previously on Apr 3, 2006 Definitive Rating Assigned Ca (sf) Issuer: RURAL HIPOTECARIO X FTA -- EUR53.6M C Certificate, Baa3 (sf) Placed Under Review for Possible Downgrade; previously on Jul 2, 2008 Definitive Rating Assigned Baa3 (sf) Issuer: TDA 22 - MIXTO FTA -- EUR3.7M C1 Bond, Baa2 (sf) Placed Under Review for Possible Downgrade; previously on Dec 10, 2004 Definitive Rating Assigned Baa2 (sf) -- EUR2.7M D1 Bond, Ba2 (sf) Placed Under Review for Possible Downgrade; previously on Dec 10, 2004 Definitive Rating Assigned Ba2 (sf) Issuer: TDA 30 FTA -- EUR364.2M A Certificate, Aaa (sf) Placed Under Review for Possible Downgrade; previously on Mar 14, 2008 Definitive Rating Assigned Aaa (sf) -- EUR8.8M B Certificate, A1 (sf) Placed Under Review for Possible Downgrade; previously on Mar 14, 2008 Definitive Rating Assigned A1 (sf) -- EUR7M C Certificate, Baa2 (sf) Placed Under Review for Possible Downgrade; previously on Mar 14, 2008 Definitive Rating Assigned Baa2 (sf) Issuer: VALENCIA HIPOTECARIO 5 FTA -- EUR468M A Certificate, Aaa (sf) Placed Under Review for Possible Downgrade; previously on Dec 18, 2008 Definitive Rating Assigned Aaa (sf) -- EUR5M B Certificate, Aa1 (sf) Placed Under Review for Possible Downgrade; previously on Dec 18, 2008 Definitive Rating Assigned Aa1 (sf) -- EUR27M C Certificate, Ba3 (sf) Placed Under Review for Possible Downgrade; previously on Dec 18, 2008 Definitive Rating Assigned Ba3 (sf) Moody's ratings address the expected loss posed to investors by the legal final maturity of the notes. Moody's ratings address only the credit risks associated with the transactions. Other non-credit risks have not been addressed, but may have a significant effect on yield to investors. =========== S W E D E N =========== * SWEDEN: Corporate Bankruptcies Up 1% to 488 in January 2011 ------------------------------------------------------------- According to Nordic Business Report, data by business and credit information agency Upplysningscentralen (UC) AB showed that the number of corporate bankruptcies in Sweden went up by 1% year-on- year to 488 in January 2011. The bankruptcy count increased in both the Stockholm and Skane metropolitan regions, while Sweden's third metropolitan region, Vastra Gotaland, registered a declining trend, Nordic Business Report discloses. According to Nordic Business Report, construction and retail trade were the only sectors that registered an increased number of bankruptcies in January 2011. Transport had a flat development and motor vehicle sales and services saw the biggest decline, Nordic Business Report notes. Hotels and restaurants registered a decrease of 27%, breaking the negative trend from 2010, Nordic Business Report states. ============= U K R A I N E ============= * S&P Affirms 'CCC+' Issuer Rating on Ukrainian City of Odessa -------------------------------------------------------------- Standard & Poor's Ratings Services said that it had affirmed its 'CCC+' long-term issuer credit ratings and 'uaBB' Ukraine national scale ratings on the Ukrainian City of Odessa on the basis of currently available data. S&P subsequently withdrew the ratings. The outlook was negative at the time of withdrawal. S&P withdrew the ratings because S&P considers that S&P no longer receive sufficiently timely and adequate information from Odessa to further monitor its ratings on the city. At the point of withdrawal, the ratings incorporated S&P's base- case scenario, which reflected its opinion that the city's debt service would likely peak at up to 20% of operating revenues in 2012. They also reflected S&P's view of the city's poor liquidity, and low financial flexibility and predictability as a result of a weak institutional framework. The ratings were supported by what S&P saw as Odessa's position as an important economic and logistical center in southern Ukraine. =========================== U N I T E D K I N G D O M =========================== FAB UK: S&P Cuts Ratings on Two Classes of Notes to 'BB+ (sf)' -------------------------------------------------------------- Standard & Poor's Ratings Services lowered and removed from CreditWatch negative its credit ratings on FAB UK 2004-1 Ltd.'s class A-3E and A-3F notes. At the same time, S&P affirmed and removed from CreditWatch negative its ratings on classes A-1E, A- 1F, A-2E, and S1. S&P also affirmed its rating on the class BE notes. The rating actions reflect S&P's assessment of the credit and cash flow analyses S&P has undertaken and the application of its updated counterparty criteria. Class A3 comprises a floating-rate tranche (A-3E) and a fixed-rate tranche (A-3F) that rank pari passu for interest and principal payments. S&P's ratings on these notes address the timely payment of interest and principal. As highlighted in S&P's September 2010 review (see "Related Criteria and Research"), in its opinion there is a risk of interest shortfalls arising on the class A-3 notes in certain low interest rate environments. In S&P's view, the risk arises mainly because there is no hedge in place to cover the cost of paying the fixed coupon on the class A-3F notes, particularly as fixed-rate assets represent only 1% of the performing asset balance. S&P therefore lowered and removed from CreditWatch negative its ratings on the class A-3 notes. S&P continue to monitor the potential impact of interest rate movements on the transaction. S&P notes that, in the latest available trustee report of December 2010, expected interest income continues to exceed projected interest payments on classes A-1E, A-1F, A-2E, A-3E, and A-3F. When its revised counterparty criteria became effective on January 18, 2011, S&P placed its ratings on the class A-1E, A-1F, A-2E, and S1 notes on CreditWatch negative. Applying the counterparty criteria and taking into account its credit and cash flow analyses, S&P concluded that its ratings on these notes remain appropriate. S&P therefore affirmed and removed from CreditWatch negative its ratings on these notes. S&P also affirmed its ratings on the class BE notes. FAB UK 2004-1 is a cash flow collateralized debt obligation transaction that closed in April 2004. FAB UK 2004-1's portfolio comprises primarily U.K. prime and subprime residential mortgage- backed securities, commercial mortgage-backed securities, and to a lesser extent CDOs of corporate and other asset-backed securities. The transaction is in its amortization phase. Ratings List FAB UK 2004-1 Ltd. GBP214 Million Fixed, Floating, and Zero Coupon Notes Ratings Lowered and Removed From CreditWatch Negative Rating ------ Class To From ----- -- ---- A-3E BB+ (sf) BBB- (sf)/Watch Neg A-3F BB+ (sf) BBB- (sf)/Watch Neg Ratings Affirmed and Removed From CreditWatch Negative Rating ------ Class To From ----- -- ---- A-1E AAA (sf) AAA (sf)/Watch Neg A-1F AAA (sf) AAA (sf)/Watch Neg A-2E AA+ (sf) AA+ (sf)/Watch Neg S1 (1) AAA (sf) AAA (sf)/Watch Neg Rating Affirmed Class Rating ----- ------ BE BB- (sf) (1) Class S1 consists of GBP10 million combination notes, which comprise GBP7.5 million class A-1F notes and GBP2.5 million class C subordinated notes. S&P's rating on the class S1 combination notes addresses the payment of GBP7.5 million of principal. HATFIELD PHILIPS: New Special Servicer Won't Affect Ratings ----------------------------------------------------------- Fitch Ratings said that the recent replacement of Hatfield Philips International Limited (rated 'CPS2-'/'CSS3+'), as special servicer, on five CMBS loans included in the DECO 8 - UK Conduit 2 plc and DECO 11 - UK Conduit 3 plc has no immediate impact on the ratings of the transactions. However, Fitch believes the new special servicer, Solutus Advisors (unrated), faces certain challenges which, if not effectively managed, could impact the workout of the transferred loans and ultimate recovery performance. Fitch will continue to monitor the situation, specifically Solutus's plans surrounding the workout of the loans, although the agency believes rating downgrades due to the servicer transfer alone are unlikely in the short-term. Fitch has reviewed the ratings impact of the replacement special servicers on each transaction on a case-by-case basis, and has taken into consideration the current size of the loans in question compared to the current ratings of the outstanding tranches. Fitch will monitor the successor's workout strategy and assess the impact it will have on the recoveries of each loan. The three loans in DECO 8 that have been replaced are relatively small and amount to 3.7% of the total portfolio (a total current balance of GBP21 million). The most junior tranches of the DECO 8 transaction currently have ratings assigned to it that are indicative of very high levels of credit risk, with default seeming probable. For DECO 11, the two loan replacements account for a higher proportion of the total portfolio at 12% (GBP48.3 million). However, the two non-rated junior tranches which amount to GBP11.2 million provide additional cushion to the class D tranche. Fitch has been in discussions with Solutus since its founding last October and conducted a preliminary review of the operations in November. Fitch believes the servicer has some of the basic elements necessary to build an efficient special servicing operation including documented policies and procedures, an experienced management team, a relationship with a panel of established property and asset management companies and financial support from a private equity investor group, although information provided to Fitch surrounding the PE shareholder is very limited as the PE investment is of a private nature. Nevertheless, Fitch believes Solutus faces significant challenges in effectively managing the newly transferred loans given the company's small size, lack of practical CMBS workout experience, and heavy reliance on its asset management partners. In the last two weeks, Solutus' special servicing portfolio has grown from nothing to seven loans secured by 11 commercial properties with an outstanding securitized balance of GBP84 million. The company envisions more loans transferring into the organization in the near-term, further highlighting capacity issues, which is also a concern for other European CMBS special servicers. Capacity issues are somewhat mitigated by the current size of the special servicer portfolio characterized by smaller CMBS loans (average loan size GBP12 million) generally secured by only one property as well as the external asset management resources currently available to Solutus. Fitch also notes that Solutus currently lacks a robust risk management program although, according to Solutus, an external firm has conducted some operational audits since the company's founding. Fitch believes a more comprehensive audit program will be necessary as the portfolio and company grows. Fitch notes that the management team's experience in European CMBS and servicing mitigates some of these concerns. The fact that most of the loans only transferred into special servicing within the last three months also helps alleviate the agency's concerns around potential timing delays in the workout process associated with the transfer, although delays could prove problematic for the Wildmoor Northpoint loan, which transferred to special servicing April 2010. As a result, it is too early to assess the impact of the servicer replacement on the workout of the loans and subsequent transaction performance. Fitch's analysis of each transaction is based on the agency's expected recoveries for the whole portfolio. Fitch will continue to monitor Solutus's workout activities associated with each loan, and may issue additional rating commentary or take rating action if necessary should the strategies employed by Solutus, which may differ from those initiated or planned by Hatfield, have a significant impact on recoveries. The current ratings for both transactions are: DECO 8: -- GBP138.8m class A1 (XS0251885603): 'AAAsf'; Outlook Stable -- GBP255.8m class A2 (XS0251886163): 'BBB-sf'; Outlook Negative -- GBP32.3m class B (XS0251886833): 'BBsf'; Outlook Negative -- GBP33.9m class C (XS0251887211): 'B+sf'; Outlook Negative -- GBP23.4m class D (XS0251887724): 'Bsf'; Outlook Negative -- GBP60.9m class E (XS0251889696): 'CCsf'; Recovery Rating 'RR4' -- GBP14.2m class F (XS0251890199): 'CCsf'; Recovery Rating 'RR6' -- GBP8.3m class G (XS0251890868): 'Dsf'; Recovery Rating 'RR6' DECO 11: -- GBP185.3m class A1-A (XS0279810468): 'AAA'; Outlook Negative -- GBP72.1m class A1-B (XS0279812597): 'A'; Outlook Negative -- GBP44.0m class A2 (XS0279814452): 'BBB'; Outlook Negative -- GBP26.4m class B (XS0279815426): 'BB'; Outlook Negative -- GBP36.3m class C (XS0279816580): 'CCC'; Recovery Rating 'RR2' -- GBP28.4m class D (XS0279817398): 'CC'; Recovery Rating 'RR6' JERMON DEVELOPMENTS: Bank of Scotland Repossess Firm's Helicopter ----------------------------------------------------------------- BBC News reports that Bank of Scotland Ireland has effectively repossessed a helicopter owned by Jermon Developments Limited. The report relates that the company was placed into administration on Jan. 27, 2011. The Bank of Scotland and other banks appointed receivers to various assets held by the company, which assets included an Augusta A109A Mk2 helicopter, according to BBC News reports. BBC News says that the other assets in receivership are the Springhill Shopping Centre in Bangor, the Clarendon House office block in Belfast, a shop unit at Castle Place in Belfast and two properties in the centre of Dungannon. Headquartered in Dungannon, Northern Ireland, Jermon Developments Limited, specialize in property development, commercial development, retail development, leisure development and industrial development. MCALISTER CONSTRUCTION: Two Sites in Receivership ------------------------------------------------- BBC News reports that Anglo Irish Bank has appointed a receiver to two sites owned by the prominent County Antrim developer Mervyn McAlister. The report relates that the sites at Greenhall Highway in Coleraine and Dunlady Road in Dundonald were the property of McAlister Construction Ltd. The company has a registered address at a firm of accountants at Queen Street in Coleraine, according to BBC News. Mr. McAlister is the sole shareholder. BBC News notes that Mr. McAlister, a house builder and hotel owner, came to prominence in 2007, when he announced plans to build a 37 storey skyscraper in Belfast which would have been the tallest building in the city. However, the report relates, the development was blocked by planners, a decision Mr. McAlister is appealing. The appeal hearing for the Aurora project is due to be held next month. In December, BBC News recounts, Mr. McAlister announced he was temporarily closing his Ballycastle hotel, the Marine. The report adds that all of Mr. McAlister's companies are continuing to trade. ROYAL BANK: Moody's Lifts Ratings on Two Subordinated Notes to Ba1 ------------------------------------------------------------------ Moody's Investors Service upgraded two Lower Tier 2 dated subordinated instruments issued by Royal Bank of Scotland plc from Ba2 (hyb) to Ba1 (hyb). The instruments are ISIN XS0201065496 (EUR1 billion 4.625% due 2021) and XS0123062886 (US$125.6 million FRN due 2020). Ratings Rationale The two instruments were downgraded to Ba2 (hyb) in December 2009 at the same time as other RBS Group subordinated and hybrid instruments that were considered May Pay instruments i.e. instruments that were expected to skip coupons for two years in line with the European Commission requirement for RBSG to skip coupons on hybrid instruments where the terms allow for such a skip. These two instruments are dated subordinated instruments issued off the bank's EMTN Programme, but are deferrable at the FSA's discretion. However, the FSA has not enforced this requirement. The instruments are paying coupons, and Moody's considers that it is unlikely the instruments will now be part of the group of instruments deferring under the EC requirements. Therefore, Moody's have upgraded the instruments and changed Moody's rating approach from an expected loss to a notching approach to reflect this change in Moody's expectation of potential losses for investors. Moody's rate RBS' dated subordinated instruments with no deferral clauses at Baa3 (ie. Adjusted BCA -- 1 notch, where the adjusted BCA is Baa2). However, as these two instruments contain a deferral clause which leads to a potentially higher probability of default, they are rated Ba1 (hyb) (Adj BCA -- 2 notches) in line with other RBS Must Pay junior subordinated instruments. The last rating announcement on RBS was on July 15, 2010, when the outlook on a number of subordinated and hybrid instruments was changed in line with the change in outlook of the bank's BFSR. The last rating action was on April 22, 2010, when the ratings on a number of subordinated and hybrid instruments were changed. T & A PLANT: Goes Into Administration Due to Debts Owed to HMRC --------------------------------------------------------------- Aaron Morby at Construction Inquirer reports that T & A Plant Hire was forced in administration because of debts owed to Her Majesty's Revenue and Customs (HRMC). Simon Plant from SFP Group has been appointed administrator to handle the firm's affairs, according to Construction Inquirer. The report relates that Mr. Simon has already sold the assets of T & A to a former director who owns Adrian Hardesty Services. "The firm had debts totaling GBP150,000 and went into administration because of taxes due to HMRC," Construction Inquirer quoted an unnamed spokesman for the administrator as saying. The report notes that so far this year, two other plant hire firms have collapsed, but both have resurfaced as different businesses after administrators struck pre-pack deals with the management. Construction Inquirer relates that in the north, Newcastle D & K Plant Hire was placed into administration at the start of the year but 20 employees were later re-employed by new company D&K Plant Hire. The report adds that national crane hirer specialist Bryn Thomas also fell into administration last month but all 46 staff jobs were saved when the assets were sold to Bryn Thomas Cranes and Bryn Thomas Holdings. T & A Plant Hire is a Norfolk digger firm. The family-owned business was established nearly 25 years ago and ran a fleet of construction equipment ranging from 1t to 25t tracked excavators for hire across East Anglia. UPCB FINANCE: S&P Assigns 'B+' Rating to US$1-Bil. Sr. Sec. Notes ----------------------------------------------------------------- Standard & Poor's Ratings Services said that it assigned its 'B+' issue rating to the proposed US$1 billion senior secured notes to be issued by special purpose vehicle UPCB Finance III Ltd. (not rated). UPCB Finance III is incorporated as a company limited by shares under Cayman Islands law and is owned 100% by a charitable trust. S&P has not assigned a corporate credit rating to UPCB Finance III, nor have S&P assigned a recovery rating to the proposed notes. S&P understand that the proceeds from the proposed notes will be passed through to UPC Financing Partnership, UPC Broadband Holding B.V. (B+/Positive/--), and its subsidiaries (together, the UPC group) via a back-to-back loan. S&P has assigned a 'B+' issue rating to this proposed loan (facility Z; the proposed SPV Finco loan). At the same time, S&P assigned a recovery rating of '3' to the proposed loan, reflecting its expectation of meaningful (50%- 70%) recovery in the event of a payment default. The ratings on the proposed notes and on the proposed SPV Finco loan are based on preliminary information and are subject to S&P's satisfactory review of final documentation. In the event of any changes to the amount and terms of the facility, the recovery and issue ratings might be subject to further review. The rating on the proposed SPV Finco loan is predicated on S&P's understanding that this facility will be part of the existing credit agreement and will thereby share the same guarantee and security package as that granted to the existing secured creditors. S&P also understand that the loan proceeds will be fully used to reduce outstanding amounts under the UPC group's existing secured bank debt. The ratings on the proposed senior secured notes are based on the notes' first-ranking security interest over UPCB Finance III's rights to, and benefit in, the proposed SPV Finco loan, which has in turn all the same rights (in terms of security and guarantee package) as a lender under the UPC group's existing bank facility. The ratings are also based on the direct pass-through of the economic benefit of the proposed SPV Finco loan to the noteholders, through notes whose terms are back to back with those of the loan. UPCB Finance III is an orphan SPV, whose activity is limited only to the issue of the proposed notes and the onlending of the proceeds to various group entities. These features offset the fact that neither UPC Broadband nor any of its subsidiaries will guarantee or provide any credit support to UPCB Finance III, and that the proposed notes will not have a direct claim on the cash flows and the assets of the UPC group. The ratings on the proposed notes reflect the issue ratings on the proposed SPV Finco loan. Any change to the preliminary documentation related to the pass-through features and other legal aspects of the transaction could have a material effect on the ratings on the proposed notes. Recovery Analysis In order to determine recoveries, S&P simulates a hypothetical default scenario. In particular, S&P believes that a default would most likely result from excessive leverage and the UPC group's inability to refinance maturing debt in 2014-2015, following assumed operating underperformance. S&P value the UPC group on a going-concern basis, as S&P believes that its leading market position, high barriers to entry, established network assets, and substantial subscriber base would be recognized by potential buyers even under distressed circumstances. At the hypothetical point of default in 2014-2015, S&P value the UPC group at about EUR5.4 billion. The issue and recovery ratings on the proposed SPV Finco loan reflect S&P's estimate of the value available and accessible to the creditors, and the UPC group's current capital structure. The security package includes a first-ranking share pledge over all the UPC intermediate holding companies that own the cable- operating subsidiaries. No assets are pledged. With regard to the pass-through transaction, although S&P has not assigned a recovery rating to the proposed senior secured notes, S&P believes that the recovery prospects for these notes are intrinsically linked to the recovery prospects for the proposed senior secured SPV Finco loan. This link is based on the assignment of rights under the SPV Finco loan that S&P anticipate will be granted to the holders of the proposed notes. As a result of this assignment, S&P considers that potential recovery for noteholders would rely entirely on the effective operation of the pass-through structure between the corporate entities (the UPC group) and the issuer (UPCB Finance III). In addition, S&P foresee a risk that the enforcement costs at the issuer level could create an additional layer of expense that may slightly reduce the recovery prospects for the noteholders versus the direct recovery prospects for the lender of the proposed SPV Finco loan. The recovery prospects for all the UPC group's debt instruments reflect the estimated value available and accessible to the respective creditors, the high proportion of senior secured debt in the capital structure, and the likelihood of insolvency proceedings being adversely influenced by UPC's multi jurisdictional exposure. The recovery rating on the senior secured debt also reflects the weak security package. Ratings List New Rating UPCB Finance III Ltd. Senior Secured Debt* B+ UPC Financing Partnership Senior Secured Debt B+ Recovery Rating 3 * Borrower: UPC Financing Partnership WEST TOWER: Placed Into Administration -------------------------------------- Bdonline.co.uk reports that West Tower by Aedas has been placed in administration. According to the report, West Tower was completed just before the property bubble burst in 2008, but developer the Beetham Organization has struggled to repay its debt to the bank after failing to sell more than about 17 flats out of 123. The 40-storey tower was one of several troubled schemes on Beetham's books, the report notes. West Tower is one of Liverpool's tallest buildings. =============== X X X X X X X X =============== * BOOK REVIEW: Medical Jurisprudence, Insanity, and Toxicology -------------------------------------------------------------- Author: Henry C. Chapman Publisher: Beard Books Softcover: 329 pages Price: US$34.95 Review by Henry Berry Mr. Chapman's book, first published in 1903, fits in with the current public fascination with forensic medicine. The popularity of such television shows as "CSI" and "ER" and the many best- selling books dealing with crimes solved by the collection and testing of physical evidence attests to the attraction of "medicine in relation to law," as Mr. Chapman puts it. Medical Jurisprudence, Insanity, and Toxicology offers an informative study on the commission of assaults and murders, their effects on victims, and their analysis to determine the cause and circumstances of death. Attorneys, medical pathologists, coroners, and expert witnesses are among those who will find this book to be especially useful. However, when Mr. Chapman first wrote this book in the late 1800s, he intended it to be read by regular medical doctors (in 1903, there were not nearly so many medical specialists as there are now), since "every physician . . . is liable to be called upon at any time during the course of his professional career to give testimony in cases of rape, foeticide, infanticide, death from poison, and from other causes." A professor of medicine and medical jurisprudence, Mr. Chapman addresses violent crimes in a professional manner and covers the troubling details in a detached, scientific style that serves this subject matter well. He also discusses the subtle ways in which death can be caused and how this can test the detection abilities of forensic doctors. Part of the challenge is that murders are often committed by perpetrators who have a knowledge of poisons, anatomy, and biology that is nearly equal to that of a forensic doctor. Consequently, for many crimes the cause of death is difficult to determine and, even when it can be determined, it can be difficult to prove legally. Medical Jurisprudence, Insanity, and Toxicology is especially useful when Mr. Chapman explains how to ascertain when death occurred and how it was caused. The author shows how evidence is gathered from the body of a victim and the surrounding area (i.e., the crime scene). These dual sources of evidence are correlated and current medical knowledge applied to create a hypothesis of the cause of death. The book is thorough in its coverage -- symptoms of death from suffocation, drowning, burns and scalds, heat and cold, lightning, starvation, wounds, and gun shot are among those discussed by the author. An autopsy can produce a wealth of evidence. One chapter in the book delves into the subject of wounds -- the different types of wounds (incised, contused, and penetrating), what kinds of weapons inflict them, and how they cause injury and death. An analysis of blood stains also adds to the forensic doctor's understanding of what happened. Mr. Chapman's discussion of this subject includes methods of examining blood and the conditions influencing the coagulation of blood. The author explains that what may appear suspicious to the untrained eye may, in fact, be benign. The liver of a newborn is one example. In the case of infanticide, a key issue is whether the child was born. Thus, the first step is to determine whether birth has occurred -- i.e., defined by the author as simply when a fetus has been entirely expelled from the mother's body. Mr. Chapman proceeds to describe some of the signs, such as condition of lungs, hair, and fingernails, that would verify that an infant had been "alive" and thus could have been a victim. The size of the infant's liver is another clue that can help answer this question. Contrary to what most persons would assume, says the author, "the liver of the fetus is larger than that of a recently born infant, and that of the infant larger than that of an eight or ten months old child." Armed with this knowledge, the size of a child's liver can play a role in determining if infanticide was committed and, if so, the age of the victim. However, Mr. Chapman also cautions that, "too much importance must not be attached to the size of the liver . . . since the difference in size . . . is only relative." In another section of the book, the author explains the effect on the human body of poisons, which can act locally or remotely or both. Arsenic, for example, affects the stomach locally and the brain remotely. Mr. Chapman further explains that, to be effective, most poisons "must be absorbed -- pass into the blood." However, there are also those poisons that act as a corrosive. Thus, the blood, brain, and viscera can all be examined for the presence of a poison. Mr. Chapman identifies the physical and psychological symptoms of poisoning and directs the reader where to look in the body for evidence that poison was ingested. The advances in medicine and medical forensics have not supplanted the relevance or value of Mr. Chapman's benchmark text. While new technology has been developed and testing procedures have become more refined, this book remains a seminal work on the application of forensic medicine in solving crimes and developing evidence for use in court. Henry C. Chapman (1845-1909) earned two medical degrees before entering the field of forensic medicine. The first was from the University of Pennsylvania in 1867. The second was from Jefferson Medical College (Philadelphia), where he became a professor of medical jurisprudence for over 20 years. ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than US$3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Thursday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/booksto order any title today. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter-Europe is a daily newsletter co- published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland USA. Valerie U. Pascual, Marites O. Claro, Rousel Elaine T. Fernandez, Joy A. Agravante, Psyche A. Castillon, Julie Anne G. Lopez, Ivy B. Magdadaro, Frauline S. Abangan and Peter A. Chapman, Editors. Copyright 2011. 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 * * *