/raid1/www/Hosts/bankrupt/TCREUR_Public/110420.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
E U R O P E
Wednesday, April 20, 2011, Vol. 12, No. 78
Headlines
C Z E C H R E P U B L I C
SAZKA AS: Bank of New York Mellon Seeks Immediate Bond Redemption
F R A N C E
AREVA: S&P Lowers Stand-Alone Credit Profile Rating to 'BB+'
G E R M A N Y
PROSCORE-VR 2005: S&P Affirms Rating on Class E Notes to 'BB'
G R E E C E
DRYSHIPS INC: Ocean Rig Signs US$800MM Secured Term Loan Facility
H U N G A R Y
* HUNGARY: Construction Company Liquidations Up 11.3% in March
I R E L A N D
ANGLO IRISH: Fitch Affirms LT Issuer Default Rating at 'BB-'
ELVA FUNDING: S&P Lowers Rating on Class A Notes to 'CC (sf)'
IRISH LIFE: Fitch Affirms Rating on Subordinated Debt at 'BB+'
QUINN GROUP: Anglo Irish Takes Control; Owner May Lose Home
STATIC LOAN FUNDING: Moody's Lifts Rating on Class E Notes to 'B3'
K A Z A K H S T A N
ATF DPR CO: Moody's Keeps 'Ba2' Rating on Kazakh DPR Transaction
L U X E M B O U R G
DEMATIC HOLDING: S&P Assigns Prelim. 'B' Corporate Credit Rating
MELCHIOR CDO: Fitch Affirms 'Csf' Rating on Class D Notes
R U S S I A
EVRAZ GROUP: Fitch Lifts Long-Term IDR to 'BB-'; Outlook Stable
NOVOROSSIYSK OJSC: S&P Lowers Corporate Credit Rating to 'BB-'
S E R B I A & M O N T E N E G R O
ZELJEZARA: Enters Into Court-Ordered Insolvency Procedure
S P A I N
BBVA RMBS 3: Moody's Cuts Rating on EUR88.5MM C Certificate to 'C'
U N I T E D K I N G D O M
BANKRUPTCY LTD: OFT Shuts Down Four Firms Over Misleading Claims
CHARACTER DPM: Bought Out of Administration by Magnadata
DRACO ECLIPSE 2005-4: Moody's Cuts Rating on Class E Notes to Ba2
EAST LANCASHIRE: In Administration; 60 Jobs Affected
GALA ELECTRIC CASINOS: Moody's Lowers Corp. Family Rating to 'B3'
HIGH POSITION: In Insolvency Proceedings; No Longer Trades
KEYDATA INVESTMENT: N&P Fined by FSA for Mis-selling Risky Bonds
ODDBINS: Deloitte Appoints Christie + Co to Find Buyers for Stores
RED SKY: Goes Into Voluntary Administration
T.H. PROPERTIES: Reeves Withdraws Chapter 7 Petition
WATERSIDE PUB: Lloyds Banking Appoints PwC as Administrators
W F HALL: Goes Into Liquidation Due to Contract Losses
WOODHEAD BAKERY: Sold to Two Separate Buyers by Administrator
* UK: Retailer CVA Insolvency Proceedings Rise 15% in 2010
* UK: Compulsory Liquidations Continue to Fall
X X X X X X X X
* S&P Withdraws 'D' Ratings on 30 European Synthetic CDO Tranches
*********
===========================
C Z E C H R E P U B L I C
===========================
SAZKA AS: Bank of New York Mellon Seeks Immediate Bond Redemption
-----------------------------------------------------------------
According to Bloomberg News' Lenka Ponikelska, CTK, citing
Sazka AS's spokesman Jan Tuna, reports that the company received a
request from the Bank of New York Mellon, the administrator
appointed by its bondholders, for an immediate redemption of
bonds.
Bloomberg relates that CTK said Sazka's debt will rise from
CZK2 billion (US$118 million) to more than CZK10 billion following
the request.
As reported by the Troubled Company Reporter-Europe, CTK, citing
information made public in the insolvency register, said that the
Prague City Court declared Sazka insolvent on March 29 and named
Josef Cupka as insolvency administrator. CTK disclosed that the
court also decided on calling a meeting of creditors for May 26.
It has not determined the way how the insolvency will be solved,
CTK noted. The court has three months from the decision on
insolvency for this, after the meeting of creditors at the
earliest, according to CTK. Data from the insolvency register
showed that Sazka owed CZK1.37 billion to 26 creditors in overdue
debts as of March 10, CTK noted.
===========
F R A N C E
===========
AREVA: S&P Lowers Stand-Alone Credit Profile Rating to 'BB+'
------------------------------------------------------------
Standard & Poor's Ratings Services said it affirmed its 'BBB+'
long-term corporate credit rating on France-based, state-owned
nuclear services provider AREVA. The outlook is stable. "At the
same time, we removed the long-term rating from CreditWatch, where
it had originally been placed on Dec. 15, 2010. We also affirmed
the 'A-2' short-term rating," S&P stated.
"The affirmation follows the lowering of our assessment of AREVA's
stand-alone credit profile (SACP) to 'bb+' from 'bbb-' and our
reassessment of the likelihood of extraordinary state support for
AREVA if needed. To reflect the support, we now factor into the
long-term rating three notches of uplift from the SACP, instead of
two previously," S&P related.
"We consider AREVA to be a government-related entity (GRE) and
believe there is a "high" likelihood that the French state would
provide timely and sufficient extraordinary support to AREVA in
the event of financial distress. Following our discussions with
the agency for state-owned enterprises (APE), we consider AREVA's
link with the French state as "very strong" rather than "strong"
previously. This change incorporates our perception that the
APE's oversight of AREVA has increased in recent years, and that
the APE is fully behind the company's aim to limit debt increases
through planned further disposals (such as Eramet, mining assets,
for instance) or equity support, if needed. The close oversight
results from AREVA's strategic importance to France's energy
policy. For instance, France's nuclear policy council (Conseil de
Politiques Nucleaires), which oversees the French nuclear sector,
involves the French president and the economics, energy, and
defense ministries. We also take into account France's history of
strong and timely interventions in other strategically important
entities. The lower-than-anticipated EUR900 million capital
increase in December 2010 also means that the French state's
ownership stake has stayed at a high 87%," S&P elaborated.
S&P continued, "With respect to AREVA's role to the state, we
continue to view it as "important." The company is the country's
leading nuclear provider and is particularly important in terms of
security of supply (for uranium and enriched uranium) for France.
Our view of AREVA's role is also based on the politically
sensitive nature of AREVA's activities, such as enrichment and
back-end recycling, and France's policy of energy independence."
"Our downward revision of AREVA's SACP stems from the company's
current materially higher debt compared with our June 2010
expectations. Year-end 2010 adjusted debt was a substantial
EUR5.6 billion, following the December 2010 capital increase of
EUR900 million compared to the EUR2.0 billion-EUR2.5 billion we
had initially expected," S&P noted.
"The stable outlook factors in our expectation that AREVA's EBITDA
will strongly recover from 2012, after a still-challenging
landscape in 2011. In addition, we have assumed that the French
state and management will focus on containing debt in the next two
years, including through further disposals. An adjusted ratio of
FFO to debt of about 20% in 2012-2013 would be commensurate
with the ratings," S&P related.
"Ratings upside is unlikely in the near term. We could raise the
SACP if adjusted funds from operations (FFO) to debt approached
25% on the back of improved profitability and free cash flow.
Concurrently, though, we could reduce the notches of uplift for
state support factored into the rating if the improved SACP points
to less of a need for state involvement," S&P stated.
"We could consider lowering the ratings on AREVA if debt were to
increase meaningfully, or additional cost overruns or litigation
payments in relation to the OL3 reactor were to occur," S&P added.
=============
G E R M A N Y
=============
PROSCORE-VR 2005: S&P Affirms Rating on Class E Notes to 'BB'
-------------------------------------------------------------
Standard & Poor's Ratings Services raised its credit ratings on
PROSCORE-VR 2005-1 PLC's class B, C, and D notes and affirmed its
ratings on the class A+, A, and E notes. "At the same time, we
removed the ratings on the class C, D, and E notes from
CreditWatch negative," S&P stated.
The rating actions reflect the stable performance of the portfolio
and the 70% paydown of the reference portfolio balance, which has
mostly benefitted the senior classes of notes with increased
credit enhancement levels.
PROSCORE-VR 2005-1 is a synthetic, partially-funded commercial
mortgage-backed securities (CMBS) transaction, structured to
transfer the credit risk associated with a portfolio of commercial
mortgage loans secured on real estate in Germany. Payments on the
notes are collateralized with KfW (AAA/Stable/A-1+) certificates
of indebtedness.
At the February 2011 interest payment date (IPD) the reference
portfolio's principal balance was EUR221.3 million, down from
EUR734.8 million at closing in 2005, due to amortization.
There are 1,026 loans in the reference portfolio, down from 3,072
at closing. Approximately 72% of the reference portfolio balance
amortizes over the loan term (annuity or fixed installments). The
loans are well diversified, with the largest representing only
0.9% of the reference portfolio balance and the top 10 loans
representing 7.6%. The loans are well seasoned and the
weighted-average seasoning is 12 years (compared with seven years
at closing). The loans are predominantly fixed-rate loans (99% of
the total portfolio balance had a fixed interest rate, which is
unchanged since closing).
The loans are secured on commercial properties located throughout
Germany, principally in secondary or tertiary locations. The
highest concentration of properties is in northern Germany (33% of
the reference portfolio balance,) followed by southern Germany
(19%). This is a slight change from closing when the highest
concentrations were in northern Germany (29%) and southwest
Germany (22%). The main property type is mixed-use residential
and commercial buildings, which are primarily used for commercial
purposes (securing 43% of the reference portfolio by balance).
This is in line with the pool at closing when this property type
comprised 41% of the portfolio. The second-largest exposure is to
office and administration buildings, which account for 10% of
the portfolio. At closing, the second-largest exposure was
categorized as other commercial buildings, comprising 31% of the
portfolio.
The weighted-average servicer loan-to-value (LTV) ratio is 55%,
which is in line with 54% at closing. By contrast, currently 18%
of the reference portfolio balance has a servicer LTV ratio above
70% (106 loans, EUR40.8 million) including 4% (19 loans, EUR8.9
million) above 100%. This shows some deterioration since closing
when 17% of the reference portfolio balance had a servicer LTV
ratio above 70%, but none was above 100%.
DG HYP, the servicer, prepared the valuations for the properties
between 1990 and 2010, with approximately 20% of the reference
portfolio balance prepared in 2006. "If the portfolio were
revalued, we believe the LTV ratios would be higher. We have
factored this into our analysis," S&P pointed out.
Losses realized on loans in the reference portfolio amount to
EUR3.3 million of principal losses and EUR122,755 in interest and
enforcement costs. Losses are allocated to the notes in reverse
sequential order and accordingly the losses have been allocated to
the unrated class F notes, reducing the class F note balance to
EUR10.9 million (down from EUR14.4 million at closing).
According to the latest investor report (February 2011), total
loans currently in default amount to EUR18.3 million; however,
only EUR1.2 million in principal is delinquent.
"Under our stressed scenarios, we have revised downwards the
values of the properties and we have considered the rise in
delinquencies since closing," S&P related. Nonetheless, for the
senior classes of notes, in S&P's view, these factors are
outweighed by the factors:
* Portfolio performance has been stable. Total realized loss
in principal, interest, and enforcement costs represent less
than 1% of the initial reference portfolio balance, and
these losses have been absorbed by the unrated class F
notes.
* Although the reference portfolio is mainly located in
secondary and tertiary locations, approximately 72% of the
reference portfolio by balance amortizes over the loan term
(annuity or fixed installments) and the weighted-average
servicer LTV ratio is 55%.
* The reference portfolio is well-seasoned with a weighed-
average seasoning of 12 years and a weighted-average
remaining term of 11 years.
* The reference portfolio remains well diversified due to the
large number of loans, with the largest representing only
0.9% of the reference portfolio.
* The reference portfolio has paid down by 70% since closing
and, as principal payments are applied sequentially, the
senior classes of notes have benefited the most with
increased credit enhancement levels.
The upgrade of the ratings on the class B, C, and D notes reflects
the factors. "In our opinion, the 'BB (sf)' rating on the class E
notes is commensurate with the credit enhancement available to
that class and we have therefore affirmed and removed from
CreditWatch negative our rating on the class E notes. The 'BB
(sf)' rating on the class E notes also reflects that under our
stressed scenarios, losses on loans could potentially affect this
class, as losses are allocated to the notes in reverse sequential
order. We have also affirmed our 'AAA (sf)' ratings on the class
A+ and A notes," S&P related.
PROSCORE-VR 2005-1 is a synthetic, partially-funded CMBS
transaction that, at closing, was backed by 3,072 commercial loans
secured on properties throughout Germany.
Ratings List
Class Rating
To From
PROSCORE-VR 2005-1
EUR183.1 Million Floating-Rate Credit-Linked Notes
Ratings Raised And Removed From CreditWatch Negative
C AA (sf) A (sf)/Watch Neg
D BBB+ (sf) BBB (sf)/Watch Neg
Rating Raised
B AAA (sf) AA (sf)
Rating Affirmed And Removed From CreditWatch Negative
E BB (sf) BB (sf)/Watch Neg
Ratings Affirmed
A+ AAA (sf)
A AAA (sf)
===========
G R E E C E
===========
DRYSHIPS INC: Ocean Rig Signs US$800MM Secured Term Loan Facility
-----------------------------------------------------------------
DryShips Inc. announced the signing, by its majority owned
subsidiary Ocean Rig UDW Inc., of a US$800 million syndicated
secured term loan facility to partially finance the construction
costs of the Ocean Rig Corcovado and Olympia. This facility has a
5 year term and 12 year repayment profile, and bears interest at
LIBOR plus a margin. The Lead Arrangers are Nordea Bank and ABN
AMRO. Also participating in this financing is Garanti-Instituttet
for Eksportkreditt, Norway's export credit agency, DVB Bank,
Deutsche Bank and National Bank of Greece.
The Company concluded an order for two Capesize 176,000 DWT dry
bulk carriers, with the leading state owned Chinese shipyard, for
a price of US$54.2 million each. The vessels are expected to be
delivered in the third and the fourth quarter of 2012,
respectively.
George Economou, Chairman and CEO, commented "We are pleased to
announce the signing of this loan facility. Following the
drawdown of this US$800 million and the expected drawdown of the
US$495 million Deutsche Bank led facility for the Ocean Rig
Poseidon, the current drillship newbuilding program will be fully
funded. I would like to thank the participating banks for their
continuing support."
About DryShips Inc.
Based in Greece, DryShips Inc. -- http://www.dryships.com/--
-- owns and operates drybulk carriers and offshore oil
deep water drilling units that operate worldwide. As of September
10, 2010, DryShips owns a fleet of 40 drybulk carriers (including
newbuildings), comprising 7 Capesize, 31 Panamax and 2 Supramax,
with a combined deadweight tonnage of over 3.6 million tons and
6 offshore oil deep water drilling units, comprising of 2 ultra
deep water semisubmersible drilling rigs and 4 ultra deep water
newbuilding drillships.
DryShips' common stock is listed on the NASDAQ Global Select
Market where it trades under the symbol "DRYS".
The Company's balance sheet at Sept. 30, 2010, showed
US$5.80 million in total assets, US$1.90 million in total current
liabilities, US$1.10 million in total noncurrent liabilities, and
stockholders' equity of US$2.80 million.
On Nov. 25, 2010, DryShips Inc. entered into a waiver letter
for its US$230 million credit facility dated September 10, 2007,
as amended, extending the waiver of certain covenants through
Dec. 31, 2010.
As reported in the Troubled Company Reporter on Sept. 29, 2010,
the Company said it is currently in negotiations with its lenders
to obtain waivers, waiver extensions or to restructure its debt.
As of June 30, 2010, the Company's theoretical exposure (current
portion of long-term debt less cash and cash equivalents less
restricted cash) amounted to US$761.4 million.
=============
H U N G A R Y
=============
* HUNGARY: Construction Company Liquidations Up 11.3% in March
-------------------------------------------------------------
MTI-Econews, citing Opten, which compiles information on
companies, reports that creditors and suppliers launched
liquidation procedures against 334 construction companies in
Hungary in March this year. The figure is up 11.3% from a month
earlier and down 7% from March 2010, MTI notes.
According to MTI, the number of voluntary liquidations came to 461
in March, up 51 from February, and up 150% from a year earlier.
=============
I R E L A N D
=============
ANGLO IRISH: Fitch Affirms LT Issuer Default Rating at 'BB-'
------------------------------------------------------------
Fitch Ratings has affirmed Allied Irish Banks plc's (AIB), Bank of
Ireland's (BOI), EBS Building Society's (EBS) and Irish Life and
Permanent's (ILP) support-driven ratings and removed them from
Rating Watch Negative (RWN). The Outlook on AIB, BOI and EBS's
Long-term IDRs is Negative. The agency has also maintained Anglo
Irish Bank Corporation's (Anglo) and Irish Nationwide Building
Society's (INBS) Long-term and Short-term IDRs on RWN, affirmed
their Individual Ratings at 'E' and withdrawn them. The ratings
of AIB's, Anglo's, BOI's, EBS's and INBS's government-guaranteed
liabilities have been affirmed at 'BBB+'/'F2' and removed from
RWN.
The rating actions follow the affirmation of the Irish sovereign's
rating and assignment of a Negative Outlook.
The affirmation of AIB, BOI, EBS and ILP's support-driven ratings
reflects their systemic importance as well as government
commitments to recapitalize these institutions following the
results of the Prudential Capital Assessment Review (PCAR) and
Prudential Liquidity Assessment Review (PLAR) announced at end-
March 2011. Fitch continues to believe the risks of the sovereign
and the domestic banks are strongly interlinked, not least given
the banks' extensive reliance on government-guaranteed and central
bank funding.
Fitch notes that the Directional Court Orders announced in
relation to AIB's subordinated debt securities on 14 April 2011
introduced some significant adverse changes to the contractual
terms of these securities. However, these orders have no
implications for the ratings of AIB's subordinated securities,
which already incorporate Fitch's expectation of a coercive
burden-sharing. As an exception to its criteria, Fitch has not
moved AIB's IDRs to 'RD' (Restricted Default) as the agency
believes that there is still a high probability of sovereign
support for AIB's senior creditors.
The Negative Outlook on AIB, BOI and EBS's Long-term IDRs reflects
the macro-economic downside risks that drive the Negative Outlook
on the sovereign rating. These risks primarily reflect concerns
regarding the timing and pace of economic recovery, which if fails
to materialize, could lead to a continued rise in debt and a
deterioration of Ireland's sovereign credit profile.
The RWN on Anglo and INBS's ratings continues to reflect the
uncertainty associated with their asset quality and wind-down
status. Fitch believes that while Anglo and INBS continue to
benefit from significant support from the authorities in terms of
central bank funding, there is potentially a significant downside
risk to Anglo's and INBS' ratings should these institutions
require additional capital. However, Fitch notes that both
institutions were recapitalized at end-2010 and may not require
any further capital injections. Anglo and INBS were not subject
to PCAR/PLAR reviews but will be subject to their assessment in
May 2011. The withdrawal of their Individual Ratings reflects
Fitch's view that these ratings are not meaningful for an
institution in a wind-down situation.
The rating actions are:
Anglo
Long-term IDR: 'BB-'; RWN maintained
Short-term IDR: 'B'; RWN maintained
Individual Rating: affirmed at 'E', withdrawn
Support Rating: '3'; RWN maintained
Support Rating Floor: 'BB-'; RWN maintained
Short-term debt: 'B'; RWN maintained
Senior unsecured: 'BB-'; RWN maintained
Sovereign-guaranteed Long-term notes: affirmed at 'BBB+';
removed from RWN
Sovereign-guaranteed Short-term notes: affirmed at 'F2';
removed from RWN
Sovereign-guaranteed commercial paper: affirmed at 'F2';
removed from RWN
Sovereign-guaranteed Long-term deposits: affirmed at 'BBB+';
removed from RWN
Sovereign-guaranteed Short-term deposits: affirmed at 'F2';
removed from RWN
Sovereign-guaranteed Long-term interbank liabilities: affirmed
at 'BBB+'; removed from RWN
Sovereign-guaranteed Short-term interbank liabilities: affirmed
at 'F2'; removed from RWN
Anglo Irish Mortgage Bank
Long-term IDR: 'BB-'; RWN maintained
Short-term IDR: 'B'; RWN maintained
Support Rating: '3'; RWN maintained
INBS
Long-term IDR: 'BB-'; RWN maintained
Short-term IDR: 'B'; RWN maintained
Individual Rating: affirmed at 'E', withdrawn
Support Rating: '3'; RWN maintained
Support Rating Floor: 'BB-'; RWN maintained
Senior unsecured notes: 'BB-'; RWN maintained
Sovereign-guaranteed long-term deposits: affirmed at 'BBB+';
removed from RWN
Sovereign-guaranteed short-term deposits: affirmed at 'F2';
removed from RWN
Sovereign-guaranteed long-term interbank liabilities: affirmed
at 'BBB+'; removed from RWN
Sovereign-guaranteed short-term interbank liabilities: affirmed
at 'F2'; removed from RWN
AIB
Long-term IDR: affirmed at 'BBB'; removed from RWN; Negative
Outlook
Short-term IDR: affirmed at 'F2'; removed from RWN
Individual Rating: 'E', unaffected by current rating action
Support Rating: affirmed at '2'; removed from RWN
Support Rating Floor: affirmed at 'BBB'; removed from RWN
Senior unsecured notes: affirmed at 'BBB'; removed from RWN
Short-term debt: affirmed at 'F2'; removed from RWN
Lower tier 2 subordinated debt: 'C'; unaffected by current
rating action
Upper tier 2 subordinated notes: 'C'; unaffected by current
rating action
Tier 1 notes: 'C'; unaffected by current rating action
Sovereign-guaranteed long-term notes: affirmed at 'BBB+';
removed from RWN
Sovereign-guaranteed short-term notes: affirmed at 'F2';
removed from RWN
Sovereign-guaranteed commercial paper: affirmed at 'F2';
removed from RWN
Sovereign-guaranteed long-term deposits: affirmed at 'BBB+';
removed from RWN
Sovereign-guaranteed short-term deposits: affirmed at 'F2';
removed from RWN
Sovereign-guaranteed long-term interbank liabilities: affirmed
at 'BBB+'; removed from RWN
Sovereign-guaranteed short-term interbank liabilities: affirmed
at 'F2'; removed from RWN
AIB Bank (CI) Limited
Long-term IDR: affirmed at 'BBB'; removed from RWN; Negative
Outlook
Short-term IDR: affirmed at 'F2'; removed from RWN
Individual Rating: 'E'; unaffected by current rating action
Support Rating: affirmed at '2', removed from RWN
Sovereign-guaranteed long-term notes: affirmed at 'BBB+';
removed from RWN
Sovereign-guaranteed short-term notes: affirmed at 'F2';
removed from RWN
AIB Group (UK) PLC
Long-term IDR: 'BBB'; removed from RWN; Negative Outlook
Short-term IDR: affirmed at 'F2'; removed from RWN
Individual Rating: 'E'; unaffected by current rating action
Support Rating: affirmed at '2', removed from RWN
Sovereign-guaranteed long-term notes: affirmed at 'BBB+';
removed from RWN
Sovereign-guaranteed short-term notes: affirmed at 'F2';
removed from RWN
BOI
Long-term IDR: affirmed at 'BBB'; removed from RWN; Negative
Outlook
Short-term IDR: affirmed at 'F2'; removed from RWN
Individual Rating: 'D/E', RWN; unaffected by current rating
action
Support Rating: affirmed at '2', removed from RWN
Support Rating Floor: affirmed at 'BBB'; removed from RWN
Senior unsecured notes: affirmed at 'BBB'; removed from RWN
Short-term debt: affirmed at 'F2'; removed from RWN
Upper tier 2 subordinated notes: 'C'; unaffected by current
rating action
Preference shares: 'C'; unaffected by current rating action
Subordinated debt: 'C'; unaffected by current rating action
Sovereign-guaranteed notes: affirmed at 'BBB+'; removed from
RWN
Sovereign-guaranteed long-term deposits: affirmed at 'BBB+';
removed from RWN
Sovereign-guaranteed short-term deposits: affirmed at 'F2';
removed from RWN
Sovereign-guaranteed long-term interbank liabilities: affirmed
at 'BBB+'; removed from RWN
Sovereign-guaranteed short-term interbank liabilities: affirmed
at 'F2'; removed from RWN
BOI Mortgage Bank
Long-term IDR: affirmed at 'BBB'; removed from RWN; Negative
Outlook
Short-term IDR: affirmed at 'F2'; removed from RWN
Support Rating: affirmed at '2', removed from RWN
BOI UK Plc
Long-term IDR: affirmed at 'BBB'; removed from RWN; Negative
Outlook
Short-term IDR: affirmed at 'F2'; removed from RWN
Individual Rating: 'D/E', RWN; unaffected by current rating
action
Support Rating: affirmed at '2', removed from RWN
Sovereign-guaranteed long-term deposits: affirmed at 'BBB+';
removed from RWN
Sovereign-guaranteed short-term deposits: affirmed at 'F2';
removed from RWN
Sovereign-guaranteed long-term interbank liabilities: affirmed
at 'BBB+'; removed from RWN
Sovereign-guaranteed short-term interbank liabilities: affirmed
at 'F2'; removed from RWN
EBS
Long-term IDR: affirmed at 'BBB-'; removed from RWN; Negative
Outlook
Short-term IDR: affirmed at 'F3'; removed from RWN
Individual Rating: 'E'; unaffected by current rating action
Support Rating: affirmed at '2', removed from RWN
Support Rating Floor: affirmed at 'BBB-'; removed from RWN
Senior unsecured notes: affirmed at 'BBB-'; removed from RWN
Short-term debt: affirmed at 'F3'; removed from RWN
Preferences shares: 'C'; unaffected by current rating action
Sovereign-guaranteed long-term notes: affirmed at 'BBB+';
removed from RWN
Sovereign-guaranteed short-term notes: affirmed at 'F2';
removed from RWN
Sovereign guaranteed commercial paper: affirmed at 'F2';
removed from RWN
Sovereign-guaranteed long-term deposits: affirmed at 'BBB+';
removed from RWN
Sovereign-guaranteed short-term deposits: affirmed at 'F2';
removed from RWN
Sovereign-guaranteed long-term interbank liabilities: affirmed
at 'BBB+'; removed from RWN
Sovereign-guaranteed short-term interbank liabilities: affirmed
at 'F2'; removed from RWN
EBS Mortgage Finance
Long-term IDR: affirmed at 'BBB-'; removed from RWN; Negative
Outlook
Short-term IDR: affirmed at 'F3'; removed from RWN
Support Rating: affirmed at '2', removed from RWN
ILP
Individual Rating: 'E'; unaffected by current rating action
Support Rating: affirmed at '2', removed from RWN
ELVA FUNDING: S&P Lowers Rating on Class A Notes to 'CC (sf)'
-------------------------------------------------------------
Standard & Poor's Ratings Services lowered to 'CC (sf)' from 'CCC-
(sf)' its credit rating on Elva Funding PLC's EUR10 million, JPY1
billion, and US$30 million secured floating-rate credit-linked
notes series 2007-7.
The downgrade follows confirmation that losses from credit events
in the underlying reference portfolio exceeded the available
credit enhancement. "Therefore, in our opinion, we expect the
noteholders will not receive full principal upon maturity or early
termination," S&P said.
IRISH LIFE: Fitch Affirms Rating on Subordinated Debt at 'BB+'
--------------------------------------------------------------
Fitch Ratings has affirmed Irish Life Assurance plc's (Irish Life)
Insurer Financial Strength (IFS) rating at 'BBB+' and Long-term
Issuer Default Rating (IDR) at 'BBB' and assigned both ratings a
Negative Outlook. Irish Life's subordinated debt has also been
affirmed at 'BB+' and all three ratings have been removed from
Rating Watch Negative (RWN).
Irish Life is the main insurance subsidiary of Irish Life &
Permanent Plc (ILP). ILP's Support Rating was affirmed at '2' and
removed from RWN and its Individual Rating of 'E' was unaffected.
The Irish sovereign's rating of 'BBB+' was assigned a Negative
Outlook and removed from RWN.
Irish Life is exposed to the Irish sovereign through material
shareholder exposure (relative to regulatory capital) to Irish
government debt. Any further downgrade to the sovereign rating
may result in a downgrade of Irish Life. However, Fitch notes
that this sovereign exposure is unlikely to directly decrease
security for policyholders of unit-linked policies, which form 94%
of the business measured by reserves.
Irish Life's ratings reflect the strong link between its business
and the Irish economy. Irish Life's ratings could be downgraded
if the macro-economic environment has a greater than expected
impact on persistency or new business, or if the company does not
remain profitable. The impact of the Irish government's austerity
package, high unemployment, reduced consumer confidence and lower
than expected GDP could trigger higher policyholder lapse rates
and lower sales volumes, threatening Irish Life's profitability.
Irish Life is due to be sold through an initial public offering
(IPO) in 2011 to raise capital for the bank to cover its recent
EUR4bn increase in capital requirements, resulting from the
regulator's stress test of Irish banks. Although Fitch views the
bank as a drag on the insurer's ratings due to its weak
capitalization, the IPO will not trigger an upgrade of Irish
Life's ratings as they are closely linked to the sovereign rating
and the economic environment in Ireland.
Despite the Negative Outlook, Irish Life's ratings continue to
reflect the positive rating factors of its strong standalone
capitalization (regulatory solvency ratio of 175% at end-2010),
comparatively low-risk business and strong market position. It
reported operating profits of EUR163 million in 2010 and has a
total embedded value of EUR1.6 billion. However, Fitch expects
profit margins and earnings to remain under pressure for a number
of years.
QUINN GROUP: Anglo Irish Takes Control; Owner May Lose Home
-----------------------------------------------------------
Laura Noonan, Tom Molloy and Donal O'Donovan at Irish Independent
report that Cavan tycoon Sean Quinn may face the prospect of
losing his palatial home after Anglo Irish Bank took control of
the entrepreneur's Quinn Group company, which spans hotels,
manufacturing and property assets.
According to Irish Independent, the action will not absolve
Mr. Quinn of his EUR2.88 billion debt to Anglo unless the bank is
ultimately able to sell its stake in the companies for more than
the tycoon owes.
This means Anglo may also go after other assets owned by
Mr. Quinn, including his 50% stake in the family home he co-owns
with his wife, Patricia, Irish Independent discloses.
A decision has not yet been taken and Mr. Quinn may also be able
to contest any action against his remaining assets, Irish
Independent notes.
The Fermanagh tycoon, along with relatives, owes the bank EUR2.88
billion and the business group owes EUR1.2 billion, Irish
Independent says.
According to Irish Independent, Kieran Wallace, of accountancy
firm KPMG, will hold the family's shareholding as manufacturing
businesses are given "breathing space" to rebuild over the next
five years.
Anglo chief executive Mike Aynsley suggested Mr. Quinn had to be
removed from the group or the bank risked allowing him to "milk"
the business for funds to repay debts, Irish Independent relates.
Anglo, Irish Independent says, effectively controls the Quinn
Group now. Under the deal, the EUR500 million debt on the books
of Quinn's manufacturing firms will be wiped out, according to
Irish Independent. These firms, involved in the manufacture of
glass, insulation, packaging, plastics and radiators, are based
across Ireland, the UK, and Europe, Irish Independent states.
Based in Derrylin, Co. Fermanagh (Northern Ireland), Quinn Group
has ventured into cement and concrete products, container glass,
general and health insurance, radiators, plastics, hospitality and
real estate. The bank boss accepted that some of Mr. Quinn's
debts will never be recovered.
STATIC LOAN FUNDING: Moody's Lifts Rating on Class E Notes to 'B3'
------------------------------------------------------------------
Moody's Investors Service has upgraded its ratings of four classes
of notes issued by Static Loan Funding 2007-1 Ltd.
Issuer: Static Loan Funding 2007-1 Limited
-- EUR20M Class B Senior Secured Floating Rate Notes due 2017,
Upgraded to A1 (sf); previously on Jun. 17, 2009 Downgraded
to A2 (sf)
-- EUR25M Class C Deferrable Senior Secured Floating Rate Notes
due 2017, Upgraded to Baa2 (sf); previously on Jun. 17, 2009
Downgraded to Baa3 (sf)
-- EUR17.5M Class D Deferrable Senior Secured Floating Rate
Notes due 2017, Upgraded to Ba3 (sf); previously on Jun. 17,
2009 Downgraded to B1 (sf)
-- EUR15M Class E Deferrable Senior Secured Floating Rate Notes
due 2017-1, Upgraded to B3 (sf); previously on Jun. 17, 2009
Downgraded to Caa2 (sf)
Ratings Rationale
Static Loan Funding 2007-1 is a static cash CLO with exposure to
93% senior secured loans, 4% mezzanine loans and 3% second lien
loans.
According to Moody's, the rating actions are the result of
continued amortization and improvement in credit quality of the
underlying portfolio. The class A notional size decreased from
291.75m to 242.90m and the weighted average rating factor (or
'WARF') decreased from 2805 down to 2613 between May 2010 and
February 2011. This improvement accounts for the technical
transition related to rating factors of european corporate credit
estimates, as announced in the press release published by Moody's
on 1 September 2010. Primarily as a consequence of amortization,
OC levels have improved from 128.01% to 132.43% for Class A/B,
118.51% to 120.93% for class C and 112.65% to 114.00% for class D
over the same period.
In its base case, Moody's analyzed the underlying collateral pool
with an adjusted WARF of 3775, a diversity score of 32, a weighted
average recovery rate of 62% and a weighted average spread of
2.55%.
In order to assess the sensitivity of model outputs of the notes
to changes in key parameters, Moody's ran various sensitivity
analyses. For example, Moody's ran cases with a +/- 10% WARF
change in the base case and observed that the impact was less than
1 notch from the base case model outputs across the capital
structure with the most senior tranche affected by less than half
a notch.
Moody's notes that this transaction is subject to a high level of
macroeconomic uncertainty, as evidenced by 1) uncertainties of
credit conditions in the general economy and 2) the large
concentration of speculative-grade debt maturing between 2012 and
2014 which may create challenges for issuers to refinance.
The main source of uncertainty in this transaction is whether
deleveraging from unscheduled principal proceeds will continue and
at what pace. Deleveraging may accelerate due to high prepayment
levels in the loan market and/or credit impaired collateral sales
by the liquidation agent, which may have significant impact on the
notes' ratings.
The principal methodology used in this rating was "Moody's
Approach to Rating Collateralized Loan Obligations" published in
August 2009.
Under this principal methodology, Moody's used its Binomial
Expansion Technique, whereby the pool is represented by
independent identical assets, the number of which 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.
Due to the impact of revised and updated key assumptions
referenced in "Moody's Approach to Rating Collateralized Loan
Obligations" and "Annual Sector Review (2009): Global CLOs", key
model inputs used by Moody's in its analysis, such as par,
weighted average rating factor, diversity score, and weighted
average recovery rate, may be different from the trustee's
reported numbers.
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.
===================
K A Z A K H S T A N
===================
ATF DPR CO: Moody's Keeps 'Ba2' Rating on Kazakh DPR Transaction
----------------------------------------------------------------
Moody's Investors Service said that the rating on the Series 2006-
A notes issued by ATF DPR Company, a Kazakh Diversified Payment
Right (DPR) transaction, is unchanged following the rating
agency's review of amendments to the transaction's structure.
-- US$100 million Series 2006 A notes; previously on July 29,
2010, downgraded to Ba2(sf)
Moody's has been notified of amendments to the underlying
transaction documentation of ATF DPR Company. The consequence of
those amendments is the extension by six months of the legal
maturity date. The initial legal maturity date was 15 April 2011.
The investor has voluntarily agreed with ATF Bank to delay final
repayment of a portion of the Series 2006 A loan. On April 15th,
US$8,233,337 of the Series 2006-A notes was repaid according to
the original schedule, leaving just the extended-maturity
US$100,000 outstanding under the notes. This amount and the
related interest are already fully cash collateralized. As
result, Moody's does not consider there to be an increase in
credit risk.
The rationale for this amendment is to avoid a sale termination
upon redemption of the last series of notes outstanding, which
would prevent potential future issuances under the current
program.
The principal methodology used in rating this transaction was
"Moody's Approach to Rating Diversified Payment Right
Securitisations", published in March 2009 and available on
www.moodys.com in the Rating Methodologies sub-directory under the
Research & Ratings tab. Other methodologies and factors that may
have been considered in the process of rating this issuer can also
be found in the Rating Methodologies sub-directory on Moody's
website. In addition, Moody's publishes a weekly summary of
structured finance credit, ratings and methodologies in
"Structured Finance Quick Check" at www.moodys.com/SFQuickCheck
Moody's is monitoring this transaction on an ongoing basis.
===================
L U X E M B O U R G
===================
DEMATIC HOLDING: S&P Assigns Prelim. 'B' Corporate Credit Rating
----------------------------------------------------------------
Standard and Poor's Ratings Services said it assigned a
preliminary 'B' long-term corporate credit rating to Luxembourg-
based materials-handling solutions provider Dematic Holding
S.a.r.l. The outlook is stable.
"At the same time, we assigned a preliminary 'B' issue rating to
the company's proposed US$300 million senior secured notes, with a
preliminary recovery rating of '4', indicating our expectation of
average (30%-50%) recovery in a default scenario," S&P stated.
"The preliminary ratings primarily reflect Dematic's financial
risk profile, which we classify as 'highly leveraged' under our
criteria. The planned dividend recapitalization via debt issuance
would lead to a leverage ratio of about 4.5x in 2011, according to
our calculations. The rating likewise captures Dematic's business
risk profile, which we consider "weak" under our criteria," S&P
noted.
"The major constraint on the business risk profile is Dematic's
weak historical profitability, combined with considerable
volatility," said Standard & Poor's credit analyst Werner
Staeblein.
The business risk profile is also constrained by limited product
diversity, significant customer concentration, a degree of
cyclicality in the material handling market, project risks, and
exposure to raw material price fluctuations. "In our view, the
business is supported by solid market shares in a fragmented
market for intralogistics products; Dematic's high share of stable
and recurring service revenues; fairly stable, prime end markets
such as food, beverage, and supermarkets; low capital intensity
both in terms of capital expenditures and working capital; and
moderate operating leverage," S&P noted.
Dematic designs, manufactures, installs, and services automated
material-handling systems for the retail distribution, food and
beverage, supermarket, and general manufacturing industries, as
well as related sectors. The company holds market-leading
positions in Europe, Asia, and North-America in the fragmented
EUR5.5 billion global market for intralogistics. "Dematic
benefits from a large installed base that, coupled with the high
costs associated with switching systems providers, supports
customer retention in our view," S&P said.
Dematic's majority shareholder is private equity firm Triton,
after Triton acquired Dematic from Siemens AG in 2006. Following
the implementation of a new organizational structure, Dematic
gradually improved its operating profitability (EBITDA) in 2008-
2010. "For 2011, we expect the EBITDA margin to be about 8%-9%
and to increase steadily in subsequent years, in line with
profit levels we have observed in the industry," S&P related.
S&P continued, "Based on our EBITDA forecast for 2011 and
assumption of low single-digit organic growth, and including the
proposed $300 million notes, we expect Dematic's financial
leverage ratio in 2011 to be about 4.5x and funds from operations
(FFO) to debt at about 15%. Our fully-adjusted debt figure of
about EUR300 million consists of the proposed notes (EUR210
million) and operating lease and pension adjustments (EUR90
million) less excess cash. Our base case likewise factors in
positive free operating cash flow (FOCF) over the coming years,
given Dematic's fairly low capital expenditures. For the rating,
we would expect fully-adjusted debt to EBITDA of 4x-5x and FFO to
debt of more than 12%."
"The outlook is stable because we expect Dematic to operate within
credit measures commensurate for the rating over the business
cycle," said Mr. Staeblein.
"The ratings incorporate our expectation of modest organic revenue
growth, coupled with operating profitability margins (EBITDA) of
8%-9% over the medium term. In our base case, Dematic's EBITDA
margins could fall to 6%-7%. We also assume Dematic will generate
positive FOCF," S&P added.
MELCHIOR CDO: Fitch Affirms 'Csf' Rating on Class D Notes
---------------------------------------------------------
Fitch Ratings has affirmed Melchior CDO I S.A.'s class A, D and
combination notes and downgraded the class B and C notes:
-- EUR25,964,730 Class A (ISIN XS0132598797); affirmed at
'AAAsf'; Outlook revised to Stable from Negative; Loss
Severity Rating 'LS-3'
-- EUR32,000,000 Class B-1 (ISIN XS0132600528) downgraded to
'CCCsf' from 'Bsf'; Outlook Negative; 'LS-3'
-- EUR20,000,000 Class B-2 (ISIN XS01326020600 downgraded to
'CCCsf' from 'Bsf'; Outlook Negative; 'LS-3'
-- EUR10,000,000 Class C-1 (ISIN XS0132606301) downgraded to
'Csf' from 'CCsf' EUR20,000,000 Class C-2 (ISIN
XS0132607291) downgraded to 'Csf' from 'CCsf'
-- EUR18,524,020 Class D (ISIN XS0132607887) affirmed at 'Csf'
-- EUR4,646,289 combination notes (ISIN XS0132608778) affirmed
at 'Csf'
The affirmation of the class A notes reflects the substantial
level of available credit enhancement (53%) available (excluding
all long-dated assets). The revision of the Outlook to Stable
reflects the amortization of the class A notes to 10% of the
original balance. This balance is fully covered by assets with
maturities before the transaction's legal final maturity.
The downgrades of the class B and C notes are based on their low
levels of available credit enhancement. Further defaults, or the
sale of long-dated assets below par, will likely result in these
notes not being fully paid at maturity.
The affirmation of the class D and combination notes at 'Csf'
reflect Fitch's expectations that these notes will default as they
are not expected to receive any further payments.
===========
R U S S I A
===========
EVRAZ GROUP: Fitch Lifts Long-Term IDR to 'BB-'; Outlook Stable
---------------------------------------------------------------
Fitch Ratings has upgraded Evraz Group S.A.'s (Evraz) Long-term
foreign currency Issuer Default Rating (IDR) to 'BB-' from 'B+'.
The Outlook is Stable. Fitch has also upgraded Evraz's senior
unsecured rating to 'BB-' from 'B+' and assigned its prospective
Eurobond issue an expected 'BB-(exp)' rating.
The upgrade reflects improvements in Evraz's capital structure and
liquidity position. Fitch views positively Evraz's successful
refinancing of its short-term loans in 2010. As a result, the
company's debt maturity profile at end-February 2011 was
comfortable, with USD711m of debt due in 2011-2012, which
represents 9% of the company's loan liabilities.
The Stable Outlook reflects Fitch's expectations that Evraz will
be able to maintain its comfortable liquidity position and
continue de-leveraging.
Evraz continues to benefit from high self-sufficiency in key raw
material inputs, which decreases the company's exposure to
volatile iron ore and coking coal markets. Evraz's steel mills in
Russia operate with cash costs 30%-40% lower than the global
average.
In Fitch's view, Russian steel market fundamentals remain strong.
As the largest producer of long products in Russia, Evraz benefits
from an expected intensification of infrastructure and housing
construction, which may lead to an increase in demand for
construction steel in 2011 by 10% y-o-y. The acquisition of the
Inprom metal service company, which has annual sales volumes of
0.4m tons, will allow Evraz to strengthen its presence in the
retail segment and will likely stimulate sales of the company's
long products in Russia.
Fitch expects Evraz's profitability to increase in line with the
rise in the company's sales in Russia due to a certain price
premium, provided by the Russian market as a result of its
oligopolistic production structure and a better product-mix of the
company's sales in Russia compared with export sales of the
company's Russian steel mills.
Fitch also notes that Evraz's North American plants producing
infrastructure and construction steel have considerable exposure
to stable infrastructure-related government contracts while pipe-
making operations benefit from shale gas exploration projects.
The agency expects Evraz's revenues to grow by 16%-18% in 2011
with EBITDAR margin of 17%-19%. Fitch estimates 2011 gross
leverage (gross debt/EBITDAR) at 2.7x-2.9x, and net leverage (net
debt/EBITDAR) at 2.5x-2.7x. Fitch projects these figures to
decrease to 2.2x-2.4x, and 2.0x-2.2x, respectively, in 2012.
NOVOROSSIYSK OJSC: S&P Lowers Corporate Credit Rating to 'BB-'
--------------------------------------------------------------
Standard & Poor's Ratings Services said it lowered its long-term
corporate credit rating on Russian-based commercial sea port
operator OJSC Novorossiysk Commercial Sea Port (NCSP) to 'BB-'
from 'BB+' and removed it from CreditWatch, where it was placed
with negative implications on Sept. 17, 2010. The outlook is
negative.
In addition, the Russia national scale rating on NCSP was lowered
to 'ruAA-' from 'ruAA+' and removed from CreditWatch negative. We
also revised downward the group's stand-alone credit profile
(SACP) from 'bb+' to 'bb-'," S&P stated.
"At the same time, we lowered our issue rating on the $300 million
loan participation notes (LPNs), issued by Novorossiysk Port
Capital S.A. and guaranteed by NCSP, to 'BB-' from 'BB+'. The
recovery rating on this debt is unchanged at '3', indicating our
expectation of meaningful (50%-70%) recovery for creditors in the
event of a payment default," S&P related.
"The downgrades reflect our view of NCSP's more aggressive
financial policy and its highly leveraged financial risk profile
as a result of its recent acquisition of Russian oil port Primorsk
Trade Port LLC and the concurrent partial change in ownership at
NCSP. We have revised our assessment of NCSP's financial risk
profile to highly leveraged from significant, due to our
assessment of the group's less-than-adequate liquidity and the
large increase in debt, which we believe will result in weaker
credit metrics. This, combined with the maturity of the US$300
million LPNs in May 2012, could put pressure on the group's
liquidity profile, in our view. NCSP does not maintain a
revolving line of credit or any other back-up liquidity facility,"
S&P noted.
"The 'BB-' rating on NCSP is based on its SACP, which we assess as
'bb-', as well as on our opinion that there is a "low" likelihood
that the Russian government would provide timely and sufficient
extraordinary support to NCSP in the event of financial distress,"
S&P stated.
In accordance with S&P's criteria for GREs, S&P's view of a "low"
likelihood of extraordinary government support is based on its
assessment of NCSP's:
* "Limited importance" of NCSP's role to the Russian
government, as it operates largely as a profit-seeking
enterprise. "Although NCSP's activity is relatively
important for the government (NCSP handles up to 60% of
Russian crude exports), it is one of many GREs and we
believe its activity could be undertaken by another private
sector entity," S&P related.
* "Limited" link with the Russian government, which only owns
20% of the group directly through a federal agency and 19.5%
indirectly. "NCSP is run like a private company, in our
opinion. Furthermore, we believe that there is a
possibility that the government may sell its ownership in
the near to medium term," S&P noted.
S&P continued, "We could lower the ratings on NCSP in the third
quarter of 2011 if we believe that the group has not made
substantial progress toward improving its liquidity profile."
"We could revise the outlook to stable if NCSP's liquidity
improves such that we consider it to be adequate. This would
likely be based on cash flow sources covering uses (including debt
maturities, amortization payments, and capital expenditures) by
more than 1.2x over a 12-month period," S&P related.
A revision of the outlook to stable would also be accompanied by
improved operating performance and a reduction in debt levels.
=====================================
S E R B I A & M O N T E N E G R O
=====================================
ZELJEZARA: Enters Into Court-Ordered Insolvency Procedure
---------------------------------------------------------
SeeNews reports that Zeljezara has entered into a court-ordered
insolvency procedure.
According to SeeNews, the Antena M radio station said on its Web
site on Friday that the Commercial Court in Podgorica has decided
to initiate insolvency proceedings against the company because its
accounts have been blocked by creditors for more than four months
and the owner, MNSS B.V. Amsterdam, has outstanding payments
towards the employees.
The consolidated loss of Zeljezara widened to EUR32.1 million
(US$45.9 million) last year from EUR27.2 million in 2009, SeeNews
discloses.
SeeNews relates that Economy Minister Vladimir Kavaric, as cited
by Antena M, said insolvency does not mean a demise for the
company but a chance to save the healthy part of its business.
"The insolvency decision has been anticipated by the workers for a
long time now. It was also a test whether the owner will answer
the question if they see a future in Zeljezara so that they at
least pay up the part of their obligations related to the
salaries. We saw this was not their intention," SeeNews quotes
Mr. Kavaric as saying on Friday.
SeeNews notes that Mr. Kavaric said the state will seek to recover
several million euros of unpaid taxes and other dues from the mill
but added that Zeljezara has much bigger debts towards other
creditors.
Zeljezara is a steel mills based in Montenegro. It is one of the
country's largest exporters.
=========
S P A I N
=========
BBVA RMBS 3: Moody's Cuts Rating on EUR88.5MM C Certificate to 'C'
------------------------------------------------------------------
Moody's Investors Service has downgraded the rating on all notes
issued by BBVA RMBS 3 FTA.
Issuer: BBVA RMBS 3 Fondo de Titulizacion de Activos
-- EUR1200M A1 Certificate, Downgraded to Ba1 (sf); previously
on Feb 8, 2011 Aa1 (sf) Placed Under Review for Possible
Downgrade
-- EUR595.5M A2 Certificate, Downgraded to Ba1 (sf); previously
on Feb. 8, 2011 Aa1 (sf) Placed Under Review for Possible
Downgrade
-- EUR960M A3 Certificate, Downgraded to Ba1 (sf); previously
on Feb. 8, 2011 Aa1 (sf) Placed Under Review for Possible
Downgrade
-- EUR156M B Certificate, Downgraded to Caa3 (sf); previously
on Feb. 8, 2011 Baa3 (sf) Placed Under Review for Possible
Downgrade
-- EUR88.5M C Certificate, Downgraded to C (sf); previously on
Feb. 8, 2011 B3 (sf) Placed Under Review for Possible
Downgrade
The ratings of the notes were placed on review for possible
downgrade in February 2011 due to the worse than expected
performance of the collateral. All the loans were originated by
Banco Bilbao Vizcaya Argentaria (BBVA Aa2/P-1).
Ratings Rationale
The rating action concludes the review and takes into
consideration the worse-than-expected performance of the
collateral. It also reflects Moody's negative sector outlook for
Spanish RMBS and the weakening of the macro-economic environment
in Spain, including high unemployment rates.
The ratings of the notes take into account the credit quality of
the underlying mortgage loan pools, from which Moody's determined
the MILAN Aaa Credit Enhancement (MILAN Aaa CE) and the lifetime
losses (expected loss), as well as the transaction structure and
any legal considerations as assessed in Moody's cash flow
analysis. The expected loss and the Milan Aaa CE are the two key
parameters used by Moody's to calibrate its loss distribution
curve, used in the cash flow model to rate European RMBS
transactions.
Portfolio Expected Loss:
Moody's has reassessed its lifetime loss expectation taking into
account the collateral performance to date, as well as the current
macroeconomic environment in Spain. In February 2011, cumulative
write-offs rose to 5.67% of the original pool balance. The share
of 90+ day arrears stood at 5.46% of current pool balance.
Moody's expects the portfolio credit performance to be under
stress, as Spanish unemployment remains elevated. The rating
agency believes that the anticipated tightening of Spanish fiscal
policies is likely to weigh on the recovery in the Spanish labor
market and constrain future Spanish household finances. Moody's
also has concerns over the timing and degree of future recoveries
in a weaker Spanish housing market. On the basis of Moody's
negative sector outlook for Spanish RMBS, the rating agency has
updated the portfolio expected loss assumption to 5.65% of
original pool balance up from 2.40% at December 2008.
MILAN Aaa CE:
Moody's has assessed the loan-by-loan information to determine the
MILAN Aaa CE. Moody's has increased its MILAN Aaa CE assumptions
for 16%, up from 15% at December 2008. The increase in the MILAN
Aaa CE reflects the exposure to broker origination (30.44%) and
non Spanish nationals (1.50%). In addition 10% of the portfolio
correspond to Self Employed. Credit enhancement under the Class A
(including subordination and reserve fund) is 10.83%.
Amortisation of Series A1, A2 and A3 notes
The class A pro-rata amortization trigger has been breached in the
last payment date and therefore Moody's has positioned the ratings
of Series A1, A2 and A3 notes at the same level. The amount
retained as principal is allocated pro-rata between Series A1, A2
and A3 if at the Determination Date the ratio of the Outstanding
Balance of non-defaulted Mortgage Loans more than 90 days in
arrears, increased by the Mortgage Loan Principal repayment income
amount received during the Determination Period preceding the
relevant payment date, to (2) the sum of the Outstanding Principal
Balance of Class A notes, is less than or equal to 1.05.
The rating addresses the expected loss posed to investors by the
legal final maturity of the notes. In Moody's opinion, the
structure allows for timely payment of interest and principal with
respect of the notes by the legal final maturity. Moody's ratings
only address the credit risk associated with the transaction.
Other non-credit risks have not been addressed, but may have a
significant effect on yield to investors.
TRANSACTION FEATURES
BBVA RMBS 3 closed in July2007. The transactions is backed by a
portfolio of first-ranking mortgage loans originated by BBVA
(Aa2/P-1) and secured on residential properties located in Spain.
The loans were originated between 2003 and 2007, with current
weighted average loan-to-value standing at 87.72%. As mentioned
above, a significant share of the securitized mortgage loans was
originated via brokers and loans to non-Spanish nationals are also
included in the pool. BBVA acts as servicer, paying agent and swap
counterparty to the transactions.
Reserve fund and Principal Deficiency (PDL): the increasing levels
of defaulted loans has ultimately caused the full depletion of the
reserve fund and is currently experiencing an unpaid PDL. The
current unpaid PDL is equal to EUR 104 million corresponding to
100% of the most junior note and 10% of the class B notes.
Commingling: All of the payments under the loans in this pool are
collected by the servicer under a direct debit scheme into the
collection accounts held at BBVA (Aa2/P-1) and are transferred to
the treasury account held at BBVA every two days.
Swap: According to the swap agreement entered into between the
Fondo and BBVA (Aa2 / P-1), on each payment date:
-- The Fondo will pay the amount of interest actually received
from the loans; and
-- BBVA will pay the sum of (1) the weighted average coupon on
the notes plus 65 bppa, over a notional calculated as the
daily average outstanding amount of the loans not more than
90 days in arrears and (2) the servicing fee due on such
payment date.
The principal methodologies used in this rating were Moody's
Updated Methodology for Rating Spanish RMBS published in July
2008, Cash Flow Analysis in EMEA RMBS: Testing Features with the
MARCO Model (Moody's Analyser of Residential Cash Flows) published
in January 2006, Moody's Approach to Automated Valuation Models in
Rating UK RMBS published in August 2008, A Framework for Stressing
House Prices in RMBS Transactions in EMEA published in July 2008
and Global Structured Finance Operational Risk Guidelines: Moody's
Approach to Analyzing Performance Disruption Risk published in
March 2011.
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.
===========================
U N I T E D K I N G D O M
===========================
BANKRUPTCY LTD: OFT Shuts Down Four Firms Over Misleading Claims
----------------------------------------------------------------
BBC News reports that four firms that misled people in debt have
been shut down by the Office of Fair Trading. The firms which
have lost their consumer credit licenses are Bankruptcy Ltd, Intl
Marketing, UK Bankruptcy, and UK Mortgage Link.
BBC News relates that the regulator said they had sent unsolicited
letters, claiming recipients might have been missold an IVA, a
formal insolvency arrangement. The OFT said the firms had offered
poor quality advice.
"The mailings sent suggested that bankruptcy may be a better
option for consumers, when this may not have been the case," an
BBC News quotes a OFT spokesman as saying. "Consumers accepting
the advertised services would have had to pay additional fees to
switch to a different debt solution that may not have been in
their best interests."
Nearly three years ago, the OFT warned 12 firms to stop making
similar misleading claims to people who had already declared
themselves insolvent via an IVA.
CHARACTER DPM: Bought Out of Administration by Magnadata
--------------------------------------------------------
Hanna Sharpe at Business Sale Report reports that Character DPM
has been successfully bought out of administration by ticket
printing company Magnadata Group Ltd.
Business Sale Report relates that the sale was orchestrated by
Character DPM's administrators, KPMG, and saves 111 of the 173
jobs at the company, which first filed for administration in
February this year.
Character DPM is a printing company. The company operated across
sites in Bootle, Aintree and Warrington, with subsidiary Character
Mailing Services running out of Stockport. The mailing services
division was closed, however, upon the administration.
DRACO ECLIPSE 2005-4: Moody's Cuts Rating on Class E Notes to Ba2
-----------------------------------------------------------------
Moody's Investors Service has downgraded these classes of Notes
issued by Draco (Eclipse 2005-4) plc (amounts reflecting initial
outstandings):
-- GBP210.9M Class A Notes, Downgraded to Aa3 (sf) and Remains
On Review for Possible Downgrade; previously on Mar. 2, 2011
Aaa (sf) Placed Under Review for Possible Downgrade
-- GBP17.1M Class B Notes, Downgraded to Baa1 (sf); previously
on Jun. 4, 2009 Downgraded to A1 (sf)
-- GBP15.7M Class C Notes, Downgraded to Baa3 (sf); previously
on Jun. 4, 2009 Downgraded to A3 (sf)
-- GBP22.8M Class D Notes, Downgraded to Ba1 (sf); previously
on Jun. 4, 2009 Downgraded to Baa2 (sf)
-- GBP12.1M Class E Notes, Downgraded to Ba2 (sf); previously
on Jun. 4, 2009 Downgraded to Ba1 (sf)
The rating of the Class A Notes was placed on review for possible
downgrade on March 2, 2011 after Moody's new operational risk
criteria. Moody's will complete the review of the rating on the
Class A Notes by September 2011, as required by European
regulations. Moody's does not rate the Class F Notes issued by
Draco (Eclipse 2005-4) plc.
Ratings Rationale
The key parameters in Moody's analysis are the default probability
of the securitized loans (both during the term and at maturity) as
well as Moody's value assessment for the properties securing these
loans. Moody's derives from those parameters a loss expectation
for the securitized pool. Based on Moody's revised assessment,
the loss expectation for the pool has increased since the last
review in June 2009.
The rating downgrade of the Class A, Class B, Class C, Class D and
Class E Notes is driven by Moody's revised assessment of i) the
expected default probability of the loans at their respective
maturity date and (ii) the expected slow recovery over the next
years of both the property values securing the underlying
collateral, as well as the commercial real estate lending market.
Moody's analysis reflects a forward-looking view of the likely
range of collateral performance over the medium term. From time
to time, Moody's may, if warranted, change these expectations.
Performance that falls outside an acceptable range of the key
parameters may indicate that the collateral's credit quality is
stronger or weaker than Moody's had anticipated during current
review. Even so, deviation from the expected range will not
necessarily result in a rating action. There may be mitigating or
offsetting factors to an improvement or decline in collateral
performance, such as increased subordination levels due to
amortization and loan re-prepayments or a decline in subordination
due to realized losses.
Primary sources of assumption uncertainty are the current stressed
macro-economic environment and continued weakness in the
occupational and lending markets. Moody's anticipates (i) delayed
recovery in the lending market persisting through 2012, while
remaining subject to strict underwriting criteria and heavily
dependent on the underlying property quality, (ii) values will
overall stabilize but with a strong differentiation between prime
and secondary properties, and (iii) occupational markets will
remain under pressure in the short term and will only slowly
recover in the medium term in line with the anticipated economic
recovery. Overall, Moody's central global scenario remains
'hooked-shaped' for 2011; Moody's expects sluggish recovery in
most of the world's largest economies, returning to trend growth
rate with elevated fiscal deficits and persistent unemployment
levels.
Moody's Portfolio Analysis
Since closing of the transaction in December 2005, three loans
representing 46% of the initial principal note balance have repaid
and as of the January 2011 Note payment date two loans are
outstanding. The two remaining loans are secured by six
properties located in the UK. Three properties are located in
central London (83% by U/W market value), two in Windsor (12% by
U/W market value) and one property in Birmingham (5% by U/W market
value). As of January 2011, both loans are current and none are
on the servicer's watchlist or in special servicing. The loans do
not have B-loans outside of the transaction. Due to the larger
relative size of the Flintstone Portfolio Loan (94% of the current
pool balance) compared with the Herbert House Loan (6% of the
current pool balance), the credit risk of the transaction is
largely dependent on the performance of the Flintstone Portfolio
Loan.
The Flintstone Portfolio Loan (94% of the current pool balance) is
secured by five properties located in London and Windsor. The
largely office use properties are let to approximately 42 tenants
with the three largest tenants contributing approximately 50% of
the total rental income. The current outstanding loan balance of
GBP144.08 million is also expected to be outstanding at maturity,
given the interest only structure of the loan. Based on its
updated assessment, Moody's whole loan LTV at the loan's maturity
date in October 2015 is approximately 81%. Given the loan's
leverage and size on its maturity date and the uncertainties
surrounding commercial real estate lending and the stability of
the property values, Moody's believes there is a considerable
chance that this loan will not repay. In its refinancing risk
assessment, Moody's also took into account (i) the average quality
of the properties and (ii) the potential rental income
deterioration resulting from the existing lease expiry profile
(approximately 40% of the rental income expires or breaks over the
next four years).
The Herbert House Loan (6% of the current pool balance) is secured
by an office property located in Birmingham. The property is let
to a single tenant which is publicly rated by Moody's (Ba2). The
current outstanding loan balance of GBP9.04 million is expected to
decline to GBP8.09 million on the loan's maturity date in January
2014 due to scheduled amortization payments. Based on its updated
assessment, Moody's whole loan LTV at the loan's maturity date is
approximately 83%. In its refinancing risk assessment, Moody's
took into account (i) the tenant's lease break option, which falls
1.5 years after the loan maturity date and (ii) the below average
quality of the property. As a result, Moody's believes there is a
substantial chance that this loan will not repay at maturity.
Refinancing Risk: The Flintstone Portfolio Loan has its scheduled
maturity date in October 2015 and the Herbert House Loan in
January 2014 while the legal final maturity date of the Notes is
in October 2017. Moody's adjustment of the refinancing risk
assessment is primarily due to its current expectations that
commercial real estate lending will remain scarce over the next
two to three years. As highlighted in the Moody's Special Report
"EMEA CMBS: 2011 Central Scenarios, Moody's assumes that CRE
lending will slowly resume over the coming years but it will
remain subject to strict underwriting criteria and depend heavily
on the quality of the underlying properties. European non-prime
property values are still under pressure given the scarcity of
financing for this market segment and hence a meaningful recovery
of non-prime property values is not expected before 2012/13.
Given the uncertainties with respect to CRE lending and the
stability of the property values in the medium to long-term,
Moody's expects an increased refinancing risk for both loans
compared to the last review in June 2009.
Portfolio Loss Exposure: Moody's expects a low amount of losses
for the Flintstone Portfolio Loan and considerable losses for the
Herbert House Loan, stemming mainly from the performance and the
refinancing profile of the securitized portfolio, and, with
respect to the Herbert House Loan from an adverse timing of the
lease break option of the tenant. Given the default risk profile
and the anticipated work-out strategy for potentially defaulting
loans, these expected losses are likely to crystallize only
towards the end of the transaction term.
Rating Methodology
The principal methodology used in this rating was "Update on
Moody's Real Estate Analysis for CMBS Transactions in EMEA"
published in June 2005.
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.
The updated assessment is a result of Moody's on-going
surveillance of commercial mortgage backed securities (CMBS)
transactions. The last Performance Overview for this transaction
was published on Jan. 26, 2011.
EAST LANCASHIRE: In Administration; 60 Jobs Affected
----------------------------------------------------
Lancashire Telegraph reports that East Lancashire Warehousing has
gone into administration, resulting in the loss of 60 jobs.
Lancashire Telegraph relates that the company, which as recently
as last year turned over GBP5.6 million, has ceased trading.
Assets are set to be sold off to recover money for creditors.
According to Lancashire Telegraph, administrators from Manchester-
based KPMG said the firm's reliance on large contracts led to its
downfall.
It is understood that KPMG was called in by East Lancashire
Warehousing's bank, Lancashire Telegraph notes.
Five members of staff have been kept on by administrators to help
with the winding up of the firm, Lancashire Telegraph states.
East Lancashire Warehousing is a warehousing and distribution firm
based in Darwen.
GALA ELECTRIC CASINOS: Moody's Lowers Corp. Family Rating to 'B3'
-----------------------------------------------------------------
Moody's Investors Service has downgraded Gala Electric Casinos
Ltd's Corporate Family Rating (CFR) to B3 from B2 and Probability
of Default Rating (PDR) to Caa1 from B3. The outlook on the
ratings is stable.
Ratings Rationale
"The downgrade to B3 reflects Moody's view that the company's
operating performance in FY2011 will be significantly worse than
expected as result of declines in the casino, and more importantly
the core Coral divisions", says Douglas Crawford, Moody's lead
analyst for Gala Coral. "The downgrade also assumes that the
company will only start to reduce leverage from FY2012 onwards."
The B3 CFR reflects (i) Gala Coral's high leverage (as adjusted by
Moody's) expected at around 7x in FY2011, (ii) the turnaround task
recently undertaken at the Coral division, (iii) the continued
loss of market share to large competitors and (iv) the company's
historic lack of investment. These risks are tempered by the
company's still strong offline market position as the most
diversified gaming operator in the UK, new consumer focused
management with strong retail experience and well-established
brands with significant barriers to entry in offline.
The ratings also reflect the company's weak credit metrics and
uncertainty about the pace at which these might improve given the
macroeconomic uncertainties prevailing and the high competitive
intensity in some of its markets. However, the ratings also
incorporate the positive steps taken by Gala Coral to improve its
operations, as evidenced by the recent turnaround at Gala Bingo,
and new management's plans to improve customer focus, product
development and portfolio management. Additionally, there are a
variety of initiatives, showing early promise, that are planned
for introduction within the next year or two. Moody's also
expects the company to increase capital expenditure to support
growth across virtually all of its divisions over the next few
years following a period of underinvestment in the business.
In H1 FY2011, the company reported trading behind budget and the
prior year, with an effect from the extreme weather seen in
December and January. The Coral division suffered as a result of
declines on amounts staked and Casinos was impacted by a lower
drop per head (DPH) and some high roller losses. However, the
value strategy introduced last year in Gala Bingo is continuing to
pay off, with spend per head recovering. Moody's expects most of
these trends to continue through FY2011, leading to a decline in
EBITDA versus FY2010.
Moody's regards Gala Coral's current liquidity position as
adequate for its requirements. Gala Coral's operating business
has good cash conversion characteristics and Moody's expects
positive free cash flow in FY2011. The company had cash at Bank
and in hand of GBP259 million as of 12 March 2011 (before
exclusions for cash in hand/floats, restricted cash and PropCo
cash). In addition, Gala Coral benefits from an undrawn GBP50
million revolving credit facility of which GBP30 million is
utilised for guarantees. Covenant headroom is also currently seen
as adequate but as the covenants step down this is likely to
tighten if the decline in the company's EBITDA continues unabated
into FY2012. However, following a prepayment of GBP60 million of
senior debt in November 2010, the first significant debt
maturities are now in FY2012, when approximately GBP214 million of
bank facilities are due. Moody's would expect the company to
husband cash resources and internally generated cash flows
carefully so that these maturities can be addressed.
The stable outlook reflects Moody's expectations that recent
strategic initiatives to improve customer focus and product
development as well as increased capital expenditure leads to
EBITDA growth and a reduction in leverage from 2012 onwards. It
also incorporates an assumption that the company preserves at all
times an adequate liquidity profile and will address the FY2012
debt maturities in a timely fashion.
Positive rating pressure could develop if Gala Coral succeeds in
halting the decline in underlying staking levels in Coral, while
maintaining its improved performance in Gala Bingo, with adjusted
leverage falling to under 6.5x, EBIT/Interest coverage above 1.2x
and meaningful positive free cash flow.
Negative pressure could quickly materialize if Gala Coral's
leverage were to increase above 7.5x on an adjusted basis or if
the company's EBIT/interest coverage ratio were to decline below
1x. The rating could also come under pressure if the criteria set
for the stable outlook were not met.
Gala Electric Casinos Ltd.'s ratings were assigned by evaluating
factors that Moody's considers relevant to the credit profile of
the issuer, such as the company's (i) business risk and
competitive position compared with others within the industry;
(ii) capital structure and financial risk; (iii) projected
performance over the near to intermediate term; and (iv)
management's track record and tolerance for risk. Moody's
compared these attributes against other issuers both within and
outside Gala Electric Casinos Ltd.'s core industry and believes
Gala Electric Casinos Ltd.'s ratings are comparable to those of
other issuers with similar credit risk. Other methodologies used
include Loss Given Default for Speculative Grade Issuers in the
US, Canada, and EMEA, published June 2009
Gala Electric Casinos Limited has its registered office in London,
England. Through its subsidiaries it owns and operates a
diversified gaming company (sales GBP1.2 billion for the year
ending September 2010) with operations mainly in the UK.
Following the closing of a restructuring in June 2010, funds
managed by Apollo, Cerberus, Park Square and York Capital
indirectly hold a majority in Gala shares.
HIGH POSITION: In Insolvency Proceedings; No Longer Trades
----------------------------------------------------------
High Position Limited, or as their website brand is known
www.highposition.net, is in the process of becoming insolvent.
This will be a big shock to the SEO and Internet Marketing
community that such a well-known figure for so many years has been
unable to sustain its business model in such challenging market
conditions and advancing competition.
Currently, searches on UK website www.riskdisk.co.uk show the
company have a CCJ and a winding up petition lodged against them,
however, upon further research with insolvency.gov.uk, the company
is becoming insolvent as is no longer trading.
The company now seems to trade under http://www.hpseo.co.uk/or HP
Group/HP SEO group. Interestingly, however, no company currently
exists upon searches for the new organization.
About High Position Limited
High Position Limited is a U.K.-based Search Engine Optimisation
company.
KEYDATA INVESTMENT: N&P Fined by FSA for Mis-selling Risky Bonds
----------------------------------------------------------------
Steve Lodge at The Financial Times reports that Norwich &
Peterborough, the East Anglian building society, has been fined
GBP1.4 million by the Financial Services Authority for misselling
risky investments issued by the now-failed Keydata.
According to the FT, the customer-owned mutual, which is shortly
expected to announce it is being taken over by Yorkshire, the
second-biggest society, has already agreed to pay a total of GBP51
million (US$83 million) in compensation to 3,200 customers who it
advised to buy the Keydata structured products.
The FT relates that the regulator said the society failed to make
clear to customers that the recommended Keydata bonds, which
invested in life assurance policies, were at least as risky as
shares.
The misconduct was "particularly serious" because the mis-selling
lasted for more than three years, and many investors were in or
near retirement -- and so could not afford to lose their money --
and they were advised to place a significant proportion of their
savings in the bonds, the FT states.
After an FSA investigation into its advice on other investments,
the society has also agreed to an independent review of sales by
its now-closed financial advice service, and to pay redress where
appropriate, the FT discloses.
The regulator's fine is its first relating to the Keydata scandal,
although there is an ongoing FSA investigation into Keydata and
its founder Stewart Ford, the FT notes.
The investment company was put into administration in 2009 after
mis-selling products as tax-advantaged ISA accounts, the FT
recounts. Administrators then discovered that GBP103 million of
investors' money may have been misappropriated, according to the
FT.
Keydata Investment Services Ltd. designs, distributes and
administers structured investment products. Keydata operates from
three locations, London, Glasgow, and Reading, and administers
its own products as well as portfolios for third parties.
ODDBINS: Deloitte Appoints Christie + Co to Find Buyers for Stores
------------------------------------------------------------------
RetailWeek reports that Oddbins administrator Deloitte has
appointed property agent Christie + Co to find buyers for the off-
license's closed 55 stores after it collapsed into administration
earlier this month.
According to RetailWeek, interested parties have until May 5, at
5:00 p.m., to offer bids for the closed stores.
Deloitte, RetailWeek says, is still seeking to sell all or parts
of the remaining business as a going concern.
Oddbins, which has a turnover of GBP75 million and employs 400
people, collapsed after its plans for a company voluntary
arrangement were thwarted by creditors including HM Revenue &
Customs, RetailWeek recounts.
Oddbins sells wine, spirits and other related products. The
company's head office is in Wimbledon, London. It has over 227
branches spread across the UK, Ireland and France.
RED SKY: Goes Into Voluntary Administration
-------------------------------------------
BBC News reports that Red Sky has gone into voluntary
administration after the Northern Ireland Housing Executive
terminated maintenance contracts, believed to be worth GBP8
million.
Accountancy firm BDO has been appointed as administrators, BBC
relates.
"While our bank continues to be very supportive, the sudden and
unexpected action by the Northern Ireland Housing Executive has
left the directors of Red Sky with no alternative but to
voluntarily put the business into administration," BBC quotes a
Red Sky spokesman as saying in a statement.
According to BBC, joint administrator Michael Jennings of BDO said
that they would immediately engage with Red Sky employees, the
bank, suppliers and customers, including the Northern Ireland
Housing Executive.
Following a 2010 BBC investigation into Red Sky's activities, the
housing body ordered a top-level inquiry into the contractor's
work, BBC discloses.
Last Thursday, the executive said it could confirm that the
inquiry had highlighted what it called "significant concerns about
the company's performance, including overcharging", but it refused
to give further details, BBC relates. It also confirmed the
executive's contracts with Red Sky would end in three month's
time, BBC notes.
Red Sky is a construction company that carried out work on NIHE
properties in the greater Belfast area.
T.H. PROPERTIES: Reeves Withdraws Chapter 7 Petition
----------------------------------------------------
Patrick Lester at The Morning Call reports that Robert Reeves, a
real estate advisor who called for TH Properties to be liquidated,
has withdrawn that request in U.S. Bankruptcy Court in
Philadelphia under an agreement reached with the home builder last
week.
According to The Morning Call, TH Properties said it had
negotiated an agreement with Mr. Reeves, who had filed court
papers last month indicating he did not foresee the company being
able to file a reorganization plan under its Chapter 11 bankruptcy
status.
Under the agreement, The Morning Call notes, TH Properties has
committed to filing a reorganization plan by June 30 and obtaining
final court approval on Sept. 30.
TH Properties, which has been in Chapter 11 bankruptcy for nearly
two years, did not say what type of financial settlement
Mr. Reeves will receive, if any, in return and would not comment
beyond a brief statement issued Thursday.
The Morning Call discloses that Mr. Reeves had filed court papers
claiming the company owed him NZ$76,854 for past work and that it
had failed to pay a significant amount of money it owed its
administrative professionals, which he said was grounds for
converting the case to Chapter 7, meaning liquidation.
Mr. Reeves said the company didn't appear to be able to come up
with a reorganization plan and pointed to "unreasonable" delays in
filing a plan.
The Morning Call says Mr. Reeves' request was the third Chapter 7
motion filed in the case since December. U.S. Trustee Roberta A.
DeAngelis on Feb. 28 filed a similar motion to convert the case
into a Chapter 7 proceeding, but withdrew that motion a day later,
The Morning Call relates, citing court records.
In December, The Morning Call recounts, TH Properties lender
Wilmington Trust requested that the case be converted. The bank,
which provided financing for THP's Village at Wynstone property in
New Hanover Township, Montgomery County, eventually reached a
settlement under which THP agreed to dismiss that particular
property from the bankruptcy case.
About T.H. Properties
Philadelphia-based T.H. Properties, L.P., has 12 working
developments in Pennsylvania and New Jersey. Timothy Hendricks
and his brother Todd started the firm in 1992. T.H. Properties
and its affiliates filed for Chapter 11 bankruptcy protection on
April 30, 2009 (Bankr. E.D. Pa. Case No. 09-13201). Northgate
Development Company, LP (Bankr. E.D. Calif. Case No. 09-____) was
among the affiliates that filed. Barry E. Bressler, Esq., at
Schnader, Harrison, Segal & Lewis, LLP, and Natalie D. Ramsey,
Esq., at Montgomery McCracken Walker and Rhoads LLP, represent the
Debtors in their restructuring efforts. T.H. Properties estimated
assets between $100 million and $500 million, and debts between
$10 million and $50 million in its Chapter 11 petition. A
creditors' committee has been appointed in the Debtors' chapter 11
proceedings.
Affiliate Wynstone Development Group, LP (Bankr. E.D. Calif. Case
No. 10-17863) filed for Chapter 11 protection on Sept. 14,
2010. It estimated assets and debts of $1 million to $10 million
in its Chapter 11 petition.
WATERSIDE PUB: Lloyds Banking Appoints PwC as Administrators
------------------------------------------------------------
Lloyds Banking Group has appointed Price Waterhouse Coopers as
administrators to the Waterside Pub Partnership (WPP) following a
failure to agree further financing. Scottish & Newcastle Pub
Company (S&NPC) will no longer act as managing agents for the 17
pubs affected.
As a 50% partner in WPP, the move has no impact on British
Waterways (BW), or on expenditure on the inland waterways, as BW's
original investment in WPP was written off in 2008/9. In
addition, there is no recourse to BW for any of WPP's bank
borrowings. This change in the management control of WPP will
have no impact on the terms of individual operating leases and the
pubs affected are free to continue operating on a business as
usual basis.
WPP was originally set up by Scottish & Newcastle Pub Enterprises
and British Waterways in 2004 to develop and acquire waterside
pubs. Scottish & Newcastle Pub Enterprises was acquired by
Heineken in 2008 and latterly traded as Scottish & Newcastle Pub
Company.
In March 2011, British Waterways bought 10 of the top performing
pubs in the partnership from WPP for GBP9 million, which was used
to reduce WPP bank borrowings. The acquisition will generate a
further GBP675,000 per annum of income for BW's waterways, a 7.5
return on investment.
James Lazarus of British Waterways comments: "The economic climate
and state of the pub market have changed significantly since the
partnership was set up seven years ago and this move reflects
that. While we had hoped to be able to grow the pub partnership,
we have every confidence that the waterside pubs have a bright
future, and we are very pleased to have acquired the 10 best pubs
from WPP."
W F HALL: Goes Into Liquidation Due to Contract Losses
------------------------------------------------------
Joanna Bourke at RoadTransport.com reports that W F Hall & Son has
gone bust with a creditor list of more than 120 companies.
A former W F Hall & Son lorry driver told RoadTransport.com that a
series of contract losses forced the business to appoint Roger
Hale and Robert Lewis of PricewaterhouseCoopers as joint
liquidators on April 4, 2011.
RoadTransport.com relates that the haulier had a deficiency of
GBP817,331.57 as at April 4 and had assets of just GBP219,900.34
available for a 123-strong creditor list.
W F Hall & Son is a Fishguard, Pembrokeshire-based haulier. It
has an O-license for 20 vehicles and 40 trailers.
WOODHEAD BAKERY: Sold to Two Separate Buyers by Administrator
-------------------------------------------------------------
Ben Bouckley at FOODmanufacture.co.uk, reports that the
administrator of Woodhead Bakery has sold the business to two
separate buyers, after splitting it into two parts.
Woodhead originally went into administration on March 29, with 30
of its 310 staff made redundant, FOODmanufacture.co.uk relates.
The company has a GBP9 million turnover and a factory in
Scarborough. It also supplies 30 bakery shops.
FOODmanufacture.co.uk relates that Sheffield-based administrator
The P&A Partnership secured the sale on Saturday, which will
involve 280 new jobs being transferred to new owners Bakery
Products (part of Haldane Retail Group) and Scarborough-based
bakers Coopland & Sons.
The business has continued to trade since entering administration:
Bakery Products has bought the factory and 11 shops, while
Coopland & Sons has bought 18 shops in a separate deal,
FOODmanufacture.co.uk discloses. One shop in Redcar has closed,
FOODmanufacture.co.uk notes.
Woodhead Bakery is based in Scarborough. It has been trading for
75 years.
* UK: Retailer CVA Insolvency Proceedings Rise 15% in 2010
----------------------------------------------------------
PropertyWeek.com reports that the number of retailers
renegotiating debts via company voluntary arrangements (CVAs) has
increased by 15% in the last year, accountants Wilkins Kennedy
said on April 14.
CVAs, the controversial restructuring method which often sees
landlords invited to accept reduced rents, monthly rental
payments, and payments for closed stores, have recently come back
into the limelight following JJB Sports' second CVA in two years
which was agreed last month, PropertyWeek.com relates.
* UK: Compulsory Liquidations Continue to Fall
----------------------------------------------
Nearly a quarter or 23% of UK businesses have issued fewer winding
up petitions over the past year, despite 66% of firms claiming
they have been taking a tougher approach to dealing with debtors,
according to a new poll of professional credit managers undertaken
by Graydon UK, a commercial credit reference company.
Latest UK Government insolvency statistics have shown that
corporate liquidations continued to fall during the fourth quarter
of 2010 and have remained at far lower levels than in previous
recessions.
According to the research, 88 per cent of credit managers are
turning to alternative methods in place of presenting a winding up
petition with Country Court Judgments the tool most commonly used,
by over half of (55%) those surveyed. The research also found
that 42% of businesses are contracting third party debt collectors
and 39% setting up formal voluntary arrangements with debtors as
they step up efforts to recover money owed to them.
Martin Williams, Head of External Affairs at Graydon UK,
commented: "While businesses are taking a harder line against bad
debts almost a quarter say that they are not petitioning to wind
up companies as a route to recovering money owed to them. This
indicates when it comes to the crunch and creditors start to turn
the screws debtors can and do pay up.
"This may well be because, contrary to previous recessions, many
businesses have been able to draw upon support from the government
via HMRC's Time to Pay Scheme, freeing up cash to pay off their
creditors.
"It's thanks to Time to Pay, the 10 day payment pledge and lower
interest rates that businesses are able to put their suppliers at
the front of the queue when it comes to paying off debts, with
money that would normally have been claimed by HMRC. It seems
that these policies are continuing to help hold back the tide of
corporate insolvencies, at least in the short term."
===============
X X X X X X X X
===============
* S&P Withdraws 'D' Ratings on 30 European Synthetic CDO Tranches
-----------------------------------------------------------------
Standard & Poor's Ratings Services withdrew its credit ratings on
86 European synthetic collateralized debt obligation (CDO)
tranches.
S&P has withdrawn its ratings on these tranches for different
reasons, including:
* At the issuer's request,
* Because the issuer has fully repurchased the notes,
* The swap agreement has terminated,
* The notes are subject to mandatory redemption, and
* We have received notification of restructurings.
S&P provides the rating withdrawal reason for each individual
tranche in the separate ratings list.
"Note that we have lowered to 'D (sf)' and subsequently withdrawn
our ratings on 30 tranches. The downgrades to 'D (sf)' follow
confirmation that losses from credit events in the underlying
portfolios exceeded the available credit enhancement levels. This
means that the noteholders did not receive full principal on the
early termination dates for these tranches," S&P said.
"We subsequently withdrew the ratings assigned to these tranches,
having recently received confirmation that the transactions
redeemed early. The ratings will remain at 'D' for a period of 30
days before the withdrawals become effective," S&P noted
*********
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 * * *