/raid1/www/Hosts/bankrupt/TCREUR_Public/110824.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, August 24, 2011, Vol. 12, No. 167
Headlines
A L B A N I A
* ALBANIA: Moody's Issues Annual Credit Analysis
C Z E C H R E P U B L I C
SAZKA AS: International Bondholders Oppose Sale Terms
SAZKA AS: Chairman Ales Husak Steps Down
D E N M A R K
* DENMARK: Finance Industry Union Calls for Bank Law Reform
G E R M A N Y
PRIME 2006-1: S&P Lowers Ratings on Two Note Classes to 'CCC-'
G R E E C E
* GREECE: Loan Guarantee Deal with Finland Needs Eurozone Consent
I R E L A N D
A-WEAR: Examinership Ruled Out; In Debt Talks
ANGLO IRISH: Expects Reduced First Half-Year Losses
CLAVOS EURO: Moody's Upgrades Rating on Class V Notes to 'Ba3'
CURRA PROPERTIES: High Court Appoints Interim Examiner
IMS MAXIMS: High Court Appoints Interim Examiner
QUEEN STREET: S&P Reinstates 'B+' Rating on US$150-Mil. Notes
L U X E M B O U R G
SHIELD FINANCE: Moody's Assigns 'B2' Ratings to Bank Debt
N E T H E R L A N D S
DALRADIAN EUROPEAN: Moody's Confirms 'Ca' Rating on Class E Notes
EUROCREDIT CDO IV: Moody's Lifts Ratings on 2 Note Classes to Ba3
S P A I N
CAJA DE AHORROS: No Bankruptcy Credit Event, ISDA Rules
UCI 11: S&P Lowers Rating on Class C Notes to 'BB (sf)'
U K R A I N E
CREATIV GROUP: S&P Assigns 'B-' Long-Term Corporate Credit Rating
U N I T E D K I N G D O M
ALBA 2006-2: S&P Raises Rating on Class F Notes to 'B-(sf)'
ASTON MARTIN: S&P Assigns 'BB-' Long-Term Corporate Credit Rating
EVERTON FC: Chairman Pleads With Barclays Over Finances
FITZBILLIES: To Reopn in August After Six-Month Closure
HAULAGE AND PLANT: Enters Administration, Seeks Buyer
NORWOOD INTERIORS: Now My House Grp. to Acquire Part of Business
VON ESSEN: Chalcroft Re-starts Work on Congham Hotel
X X X X X X X X
* EUROPE: Central Bank Attacks Euro Zone Rescue Plan
*********
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A L B A N I A
==============
* ALBANIA: Moody's Issues Annual Credit Analysis
------------------------------------------------
The government of Albania's B1 rating and stable outlook are
based on low economic, institutional and government financial
strength and medium susceptibility to event risk, despite the
significant progress made since the late 1990s, says Moody's
Investors Services in its new annual credit analysis on Albania.
Moody's currently deems Albania's economic strength as low,
mainly on account of the small size of the economy and low GDP
per capita. Although growth potential is good, it is dependent on
the government enacting its reform program. The economy grew 3.5-
4% in 2009-10, but recorded growth of over 6% from 2001-10, one
of the strongest performances in Europe. Moody's notes that
economic activity proved relatively resilient during the global
financial crisis and that the economy is currently rebalancing.
However, Albania faces the challenge of returning to pre-crisis
growth rates. Albania is now a middle-income country and as such
faces a squeeze both from higher-income, higher-productivity
countries and from those with lower cost bases. In such
circumstances, structural reforms become even more essential to
ensure continued economic convergence.
Moody's also rates Albania's institutional strength as low,
reflecting to a large extent its relatively low scores on the
World Bank's governance indicators for government effectiveness
and the rule of law. As the World Bank has pointed out, the
former is below what would be expected for a country of Albania's
income level. Stronger institutional capacity would also be
supportive of foreign direct investment, which would in turn be
supportive of economic growth and hence of the sovereign rating.
However, continuing tensions between the main political parties
could hamper Albania's attempts to be accepted as a candidate for
membership of the EU. As a candidate, Albania could expect
extensive assistance from the EU in its efforts to strengthen its
institutions.
Government debt as a share of GDP is high for a country of
Albania's level of development and any reduction is likely to be
limited in the near term. The government is aiming to limit the
budget deficit to 3.5% of GDP and 3% in 2012-14. As a result of
optimistic growth assumptions in the original budget, the
government recently introduced remedial measures to ensure it
reaches this year's target.
Event risks are largely driven by economic as well as political
factors. The former reflect the narrow economic base and
extensive euroization. The economic base is showing some signs of
broadening, mainly in the energy sector, but the still elevated
current account deficit poses potential risks to the currency,
which are a particular concern in view of extensive euroization.
Financial risks, by contrast, are less pressing given the banking
sector is relatively well capitalized and not facing any
particular stresses at present.
===========================
C Z E C H R E P U B L I C
===========================
SAZKA AS: International Bondholders Oppose Sale Terms
-----------------------------------------------------
Lenka Ponikelska at Bloomberg News reports that international
bondholders for Sazka AS said they oppose terms for the sale of
the business as proposed by bankruptcy administrator Josef Cupka.
"The international holders call on Mr. Cupka to reconsider the
terms of the tender as a matter of urgency," Bloomberg quotes the
law firm Dewey & LeBoeuf LLP as saying in a statement on Monday
in Prague. The legal firm represents investors holding more than
25% of Sazka's 2021 bonds, Bloomberg discloses.
According to Bloomberg, the statement related that the
bondholders believe the terms of the tender "are prejudicial" to
their interests and "won't maximize returns to Sazka's
creditors."
The Prague Municipal Court, which placed the company in
bankruptcy in May, approved the terms for Sazka's tender proposed
by its administrator and the creditors' committee last week,
Bloomberg recounts. The terms include a CZK500 million
(US$29.35 million) deposit from each bidder before doing due
diligence on the company, Bloomberg states. The price offered by
bidders will be the main criterion for choosing the new owner,
the report notes.
Mr. Cupka, as cited by Bloomberg, said the bidders, which will
provide the deposit, have until Sept. 23 to file their offers.
The rules of the tender also include a fine of CZK1.5 billion if
the winner fails to get an approval of anti-monopoly bodies to
take over Sazka, Bloomberg says, citing the administrator.
According to Bloomberg, administrator spokeswoman Lenka Ticha
said at the presser that Ernst & Young estimated the value of
Sazka at about CZK3.58 billion. Bloomberg notes that Ms. Ticha
said Sazka does not have any indications that there is
preliminary interest from any bidders yet.
Sazka AS is a provider of lotteries and sport betting games in
the Czech Republic.
SAZKA AS: Chairman Ales Husak Steps Down
----------------------------------------
Lenka Ponikelska at Bloomberg News, citing CTK, reports that
Sazka AS' Chairman Ales Husak resigned from the post on Monday.
According to Bloomberg, CTK said that shareholders of the company
planned to dismiss Mr. Husak at Monday's meeting.
As reported by the Troubled Company Reporter-Europe, CTK related
that Sazka's bankruptcy took effect on May 30, 2011. The
decision on Sazka's bankruptcy was made at a meeting of its
creditors on May 27, CTK disclosed.
Sazka AS is a provider of lotteries and sport betting games in
the Czech Republic.
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D E N M A R K
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* DENMARK: Finance Industry Union Calls for Bank Law Reform
-----------------------------------------------------------
Frances Schwartzkopff at Bloomberg News reports that Denmark's
finance industry union urged politicians to disregard election
politics and change the country's bank resolution laws, Europe's
toughest, to ease a liquidity squeeze that threatens the industry
and the economy.
"We face an acute situation. Denmark can't wait until after an
election," Bloomberg quotes Michael Budolfsen, vice-chairman of
the Financial Services Union, as saying on the Copenhagen-based
organization's Web site. The union represents 55,300 employees
in the finance industry, Bloomberg notes.
The government earlier this month proposed taking over bad loans
and extending state guarantees on debt to spur healthy banks to
take over struggling lenders, Bloomberg recounts.
Danish banks face a liquidity shortage after the country in
October implemented Europe's toughest bank resolution law,
Bloomberg discloses.
The liquidity shortage is expected to worsen as lenders refinance
about US$35 billion in state-guaranteed debt before 2013,
Bloomberg states. To stave off problems while the government
hammers out the new package's details, the central bank last week
said it will expand accepted categories of collateral to include
bank loans, Bloomberg relates.
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G E R M A N Y
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PRIME 2006-1: S&P Lowers Ratings on Two Note Classes to 'CCC-'
--------------------------------------------------------------
Standard & Poor's Ratings Services lowered its credit ratings on
PRIME 2006-1 Funding Limited Partnership's class A, B, C, D, and
E notes. "At the same time, we affirmed our rating on the working
capital loan," S&P related.
PRIME 2006-1 is a German small and midsize enterprise (SME)
transaction. The underlying collateral comprises payment claims
of the issuer against German SMEs under profit participation
agreements (PPAs). In the event of an insolvency or liquidation
of the company, the issuer's claims under the PPAs will be
subordinated to the claims of all other creditors of the company,
but rank ahead of shareholders.
The rating actions follow deterioration in the credit quality of
the portfolio underlying the transaction. "Since our last rating
action on Dec. 30, 2009 (see 'Ratings Lowered Or Affirmed In Six
German Mezzanine SME CLOs'), PRIME 2006-1 has been subject to
three principal deficiency events, with a combined principal
balance of EUR22.5 million (12.45% of the current outstanding
note balance). As per the latest available investor report, the
balance of the principal deficiency ledger currently stands at
EUR23.76 million, compared with EUR8.00 million when we last took
rating action," S&P related.
"Our review included an assessment of the single-obligor
concentration risk, as the underlying portfolio lacks
granularity, in our view. According to the latest available
investor report, the current number of performing obligors stands
at 22 (excluding those where a principal deficiency event
occurred or redeemed), with the largest 10 comprising about
75.16% of the remaining portfolio balance," S&P stated.
"For single-obligor concentration risk, we have analyzed the
effect of defaults of the largest obligors in the portfolio. In
this analysis, we first calculate the performing balance of the
assets, excluding those PPAs for which a principal deficiency
event has occurred. In the next step, we look at top obligor
concentrations and evaluate the net effect of subsequent defaults
on the performing balance. Finally, we examine whether the post-
default balance is sufficient to cover the outstanding balance of
the notes at the time," S&P related.
"Given the subordinated nature of the issuer's claims under the
PPAs, in our analysis we have assumed a recovery rate of zero for
the PPAs that have triggered a principal deficiency event," S&P
stated.
"In our view, the lack of granularity in the underlying portfolio
means that the ratings are more sensitive to defaults than more
granular portfolios. Our analysis of the risk posed by further
principal deficiency events indicates that the credit enhancement
available to the class A notes is no longer commensurate with an
investment-grade rating. We have therefore lowered the rating on
the class A notes to 'BB- (sf)'. In our view, the class B notes
show a level of resilience that we consider in line with a 'B
(sf)' rating, so we have lowered our rating on this class to 'B
(sf)'," S&P related.
"According to our analysis, the class C notes still have credit
enhancement available; however, this does not cover the default
of the largest obligor," S&P said.
"We have therefore lowered the rating on the class C notes to
'CCC (sf)'. The class D and E notes have no credit enhancement
remaining, and we have therefore lowered our ratings on these
notes to 'CCC- (sf)'," S&P related.
"According to the information we received from the manager, the
remaining outstanding principal balance of the working capital
loan (WCL) after the Aug. 30, 2011, payment date is expected to
be EUR1.05 million. It is repaid on each payment date, after
payment of senior expenses and interest payments on the class A
to E notes, in an amount of up to EUR2 million. According to the
manager's information, the WCL is expected to fully repay on the
August 2012 payment date. In our view, the level of credit
enhancement available to the WCL is commensurate with its current
rating. We have therefore affirmed the 'AAA (sf)' rating on the
WCL," S&P said.
Ratings List
Class Rating
To From
PRIME 2006-1 Funding Limited Partnership
EUR207.5 Million Floating-Rate Notes
Ratings Lowered
A BB- (sf) BBB (sf)
B B (sf) BB+ (sf)
C CCC (sf) B+ (sf)
D CCC- (sf) B (sf)
E CCC- (sf) B- (sf)
Rating Affirmed
WCL* AAA (sf)
*Working Capital Loan.
===========
G R E E C E
===========
* GREECE: Loan Guarantee Deal with Finland Needs Eurozone Consent
-----------------------------------------------------------------
Agence France-Presse reports that Germany said on Monday that a
deal Finland struck with debt-wracked Greece for Athens to
provide collateral in exchange for loan guarantees required the
consent of all 17 eurozone members.
Finland, one of only six EU nations with a top AAA credit rating,
warned it would seek collateral for its portion when eurozone
leaders agreed a second, EUR160-billion (US$230 billion) rescue
plan for Greece in July, AFP relates.
Germany is the biggest contributor to the package, AFP notes.
Helsinki hammered out a deal with Athens last week, raising
immediate objections from Slovenia, Slovakia, Austria and the
Netherlands who said they would seek the same guarantees for
their portion of the loan, AFP recounts.
Greece on Sunday called on the European Union to show leadership
to stem a growing row over the deal, AFP discloses.
Austria has suggested that countries with little exposure to
Greek debt receive guarantees while heavyweights such as Germany,
whose banks have heavily invested in Greece and thus have a stake
in a rescue, do without, AFP relates.
According to AFP, analysts said the dispute over demands for
collateral do not bode well for the second Greek rescue package
and that unresolved conflicts within the eurozone could force
Athens to leave one day.
Ratings agency Moody's warned that if the Finnish deal set an
example for other countries it could threaten the latest rescue
package, triggering a debt default, and jeopardize potential
future bailouts for stricken countries, AFP says.
The eurozone was under intense pressure from the markets to
quickly put into place a second rescue program for Greece as it
was evident the EUR110-billion bailout agreed in May 2010 would
not be sufficient, AFP notes.
Any doubts about the second bailout going through would likely
only stoke the turmoil on the markets further given persistent
fears that the eurozone debt crisis will see some countries
eventually default on their debt, AFP states.
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I R E L A N D
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A-WEAR: Examinership Ruled Out; In Debt Talks
---------------------------------------------
A-wear, which is controlled by private equity firm Alchemy, is
not at risk of going into examinership, George MacDonald at
Retail Week reports, citing sources familiar with the situation.
The heavily indebted retailer was reported to be considering
examinership -- a status similar to Chapter 11 in the US -- in
Sunday's edition of Irish newspaper The Sunday Business Post,
Retail Week relates.
According to Retail Week, one of the sources said that while
refinancing options are being considered, examinership is not one
of them. They also rejected speculation that restructuring firms
such as GA Europe might become involved, Retail Week notes.
It is understood that A-wear is in discussions to cut its level
of debt repayments and enable investment, Retail Week discloses.
Debt-for-equity swaps are among the options on the table, Retail
Week states.
Alchemy and Ulster Bank are thought to be owed nearly
EUR48 million and EUR34 million respectively, Retail Week says.
Separately, Gavin Daly at The Sunday Business reports that the
firm reached an agreement to defer debt repayments for a year,
but that deal is due to expire next month.
It is understood that Alchemy put GBP6 million in fresh funding
into the business last year, but it has faced difficult trading
conditions, the Post.ie notes.
The latest accounts for Maple Topco, A-wear's parent, show it
made a pre-tax loss of almost EUR18 million last year as
"difficult trading conditions" resulted in a 23% fall in sales,
the Post.ie discloses.
A-wear is an Irish fashion retailer. The company has 30 shops in
the Republic of Ireland and 10 in the UK.
ANGLO IRISH: Expects Reduced First Half-Year Losses
---------------------------------------------------
Laura Noonan at Irish Independent reports that Anglo Irish Bank
is expected to reveal this week dramatically reduced losses for
the first six months of this year.
Anglo will report half-year results on Friday, when bosses will
reveal a performance vastly improved from the EUR8.2 billion lost
in the first half of 2010, Irish Independent discloses.
According to Irish Independent, sources even suggested the bank's
result for the first half of the year could be better than that
of AIB, which lost EUR2.6 billion in the six months through the
end of June.
Anglo's half-year results announcement may also include an update
on the sale of the bank's EUR9.5 billion US loan book, Irish
Independent states.
The bank, Irish Independent says, is expected to sell the book at
about 70% of its "face value" but even at that level, the
transaction would still improve the bank's capital position and
reduce its reliance on cheap central-bank funding.
Anglo's results come almost two months after the official merger
between Ireland's most toxic bank and Ireland's most toxic
building society, Irish Nationwide, Irish Independent relates.
As reported by the Troubled Company Reporter-Europe on July 1,
2011, BreakingNews.ie related that the European Commission
cleared a bailout plan for Anglo Irish Bank and the Irish
Nationwide Building Society. BreakingNews.ie disclosed that the
proposal, which was submitted for approval in January, provides
for the merger of the two troubled institutions and their winding
down over the next 10 years. Anglo Irish and Irish Nationwide
jointly received EUR34.7 billion in capital injections from the
State to cover losses on property loans, BreakingNews.ie noted.
Anglo Irish Bank Corp PLC -- http://www.angloirishbank.com/--
operates in three core areas: business lending, treasury and
private banking. The Bank's non-retail business is made up of
more than 11,000 commercial depositors spanning commercial
entities, charities, public sector bodies, pension funds, credit
unions and other non-bank financial institutions. The Company's
retail deposits comprise demand, notice and fixed term deposit
accounts from personal savers with maturities of up to two years.
Non-retail deposits are sourced from commercial entities,
charities, public sector bodies, pension funds, credit unions and
other non-bank financial institutions. In addition, at Sept. 30,
2008, its non-retail deposits included deposits from Irish
Life Assurance plc. The Private Bank offers tailored products
and solutions for high net worth clients and operates the Bank's
lending business in Ireland and the United Kingdom.
CLAVOS EURO: Moody's Upgrades Rating on Class V Notes to 'Ba3'
--------------------------------------------------------------
Moody's Investors Service has upgraded the ratings of these notes
issued by Clavos Euro CDO Limited:
Issuer: Clavos Euro CDO Limited
EUR29,250,000 Class I-B Senior Secured Floating Rate Notes, due
2023, Upgraded to Aa2 (sf); previously on Jun 22, 2011 A1 (sf)
Placed Under Review for Possible Upgrade
EUR25,550,000 Class II Deferrable Floating Rate Notes, due 2023,
Upgraded to A3 (sf); previously on Jun 22, 2011 Baa2 (sf) Placed
Under Review for Possible Upgrade
EUR16,350,000 Class III Deferrable Mezzanine Floating Rate
Notes, due 2023, Upgraded to Baa3 (sf); previously on Jun 22,
2011 Ba2 (sf) Placed Under Review for Possible Upgrade
EUR15,350,000 Class IV Deferrable Mezzanine Floating Rate Notes,
due 2023, Upgraded to Ba2 (sf); previously on Jun 22, 2011 B1
(sf) Placed Under Review for Possible Upgrade
EUR17,400,000 Class V Deferrable Mezzanine Floating Rate Notes,
due 2023, Upgraded to Ba3 (sf); previously on Jun 22, 2011 Caa3
(sf) Placed Under Review for Possible Upgrade
Ratings Rationale
Clavos Euro CDO Limited, issued in December 2007, is a single
currency Collateralised Loan Obligation ("CLO") backed by a
portfolio of mostly high yield European leveraged loans. The
portfolio is managed by Pemba Credit Advisers. This transaction
will be in reinvestment period until December 2012. It is
predominantly composed of senior secured loans.
According to Moody's, the rating actions taken on the notes are
primarily a result of applying Moody's revised CLO assumptions
described in "Moody's Approach to Rating Collateralized Loan
Obligations" published in June 2011.
The actions reflect key changes to the modeling assumptions,
which incorporate (1) a removal of the temporary 30% default
probability macro stress implemented in February 2009, (2)
increased BET liability stress factors as well as (3) change to a
fixed recovery rate modeling framework. Additional changes to the
modeling assumptions include standardizing the modeling of
collateral amortization profile.
Moody's also notes that this action also reflects improvements of
the transaction performance since the last rating action. In
Moody's view, positive developments coincide with reinvestment of
sale proceeds (including higher than previously anticipated
recoveries realized on defaulted securities) into substitute
assets with higher par amounts and higher ratings.
WARF has increased from 2639 to 2960 between September 2009 and
July 2011. The change in reported WARF understates the actual
credit quality improvement because of 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. In addition, securities rated Caa or lower make
up approximately 7.8% of the underlying portfolio versus 15.4% in
September 2009. Additionally, defaulted securities total about
EUR0.1 million of the underlying portfolio compared to EUR20.1
million in September 2009.
Due to the impact of revised and updated key assumptions
referenced in "Moody's Approach to Rating Collateralized Loan
Obligations" published in June 2011, key model inputs used by
Moody's in its analysis, such as the portfolio par amount, WARF,
diversity score, and weighted average recovery rate, may be
different from the trustee's reported numbers. In its base case,
Moody's analyzed the underlying collateral pool to have a
performing par and principal proceeds balance of EUR392.4
million, defaulted par of EUR0.1 million, a weighted average
default probability of 23.4% (consistent with a WARF of 2957), a
weighted average recovery rate upon default of 44.9% for a Aaa
liability target rating, and a diversity score of 41. The default
probability 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 of the assets
in the collateral pool. For a Aaa liability target rating,
Moody's assumed that 87.1% of the portfolio exposed to senior
secured corporate assets would recover 50% upon default, while
the remainder non first-lien loan corporate assets would recover
10%. In each case, historical and market performance trends and
collateral manager latitude for trading the collateral are also
relevant factors. These default and recovery properties of the
collateral pool are incorporated in cash flow model analysis
where they are subject to stresses as a function of the target
rating of each CLO liability being reviewed.
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
2015 which may create challenges for issuers to refinance. CLO
notes' performance may also be impacted by (1) the manager's
investment strategy and behavior and (2) divergence in legal
interpretation of CDO documentation by different transactional
parties due to embedded ambiguities.
Sources of additional performance uncertainties are:
1) Moody's also notes that around 62.3% of the collateral pool
consists of debt obligations whose credit quality has been
assessed through Moody's credit estimates. Large single
exposures to obligors bearing a credit estimate have been
subject to a stress applicable to concentrated pools as per
the report titled "Updated Approach to the Usage of Credit
Estimates in Rated Transactions" published in October 2009.
2) Other collateral quality metrics: The deal is allowed to
reinvest and the manager has the ability to deteriorate the
collateral quality metrics' existing cushions against the
covenant levels. Moody's analyzed the impact of assuming the
worse of reported and covenanted values for weighted average
rating factor, weighted average spread, weighted average
coupon, and diversity score. However, as part of the base
case, Moody's considered spread levels higher than the
covenant levels due to the large difference between the
reported and covenant levels.
The principal methodology used in the rating was "Moody's
Approach to Rating Collateralized Loan Obligations" published in
June 2011. Other factors used in the rating are described Updated
Approach to the Usage of Credit Estimates in Rated Transactions
published in October 2009.
Moody's modeled the transaction using the Binomial Expansion
Technique, as described in Section 2.3.2.1 of the "Moody's
Approach to Rating Collateralized Loan Obligations" rating
methodology published in June 2011.
The cash flow model used for this transaction, whose description
can be found in the methodology listed above, is Moody's CDOEdge
model.
In addition to the quantitative factors that are explicitly
modeled, qualitative factors are part of the rating committee
considerations. These qualitative factors include the structural
protections in each transaction, the recent deal performance in
the current market environment, the legal environment, specific
documentation features, the collateral manager's track record,
and the potential for selection bias in the portfolio. All
information available to rating committees, including
macroeconomic forecasts, input from other Moody's analytical
groups, market factors, and judgments regarding the nature and
severity of credit stress on the transactions, may influence the
final rating decision.
CURRA PROPERTIES: High Court Appoints Interim Examiner
------------------------------------------------------
The Irish Times reports that the High Court has appointed an
interim examiner to Curra Properties Ltd., which operates Eddie
Rockets at the Stillorgan Shopping Centre in Dublin. The Eddie
Rockets restaurant franchise employs 25, The Irish Times notes.
According to The Irish Times, Curra has run into financial
problems because it is unable to service a historic debt of
EUR1 million owed to the HM Revenue & Customers. The court was
told on Friday that the debt was caused by an ex-employee who
embezzled substantial funds from Curra, The Irish Times relates.
Mr. Justice John Cooke appointed insolvency practitioner Gary
Lennon as examiner to the firm, giving it up to 100 days
protection from its creditors, The Irish Times discloses.
The court was informed that while Curra, with a registered
address at Stillorgan Shopping Centre, was insolvent and unable
to pay its debts, an independent accountant's report suggested
the company had a reasonable prospect of survival as a going
concern if certain steps were carried out, The Irish Times notes.
Those steps include obtaining court approval for a scheme of
arrangement agreed between the company and its creditors, and
securing fresh investment in the company, The Irish Times states.
The Irish Times relates that Ross Gorman, for Curra, said it was
in the best interests of all concerned that an examiner be
appointed to the firm. According to The Irish Times, the counsel
said there would be a deficit of EUR2.1 million if the firm was
wound up, whereas the deficit would be much lower should the
business survive as a going concern.
IMS MAXIMS: High Court Appoints Interim Examiner
------------------------------------------------
RTE News reports that the High Court has appointed Eamonn
Richardson of KPMG as interim examiner to IMS Maxims.
According to RTE, chief executive Shane Tickell said the company
had decided to seek court protection because of financial
pressures in the health sectors in its main markets.
The company now plans a restructuring to put it on a more solid
financial footing, RTE notes. Mr. Tickell, as cited by RTE, said
IMS Maxims was in "detailed negotiations" with a potential
investor in the business. He said the company would operate as
normal during the examinership, and that the directors were
confident that the business could grow, RTE relates.
Dublin-based IMS Maxims supplies software to the health sectors
in Ireland and the UK.
QUEEN STREET: S&P Reinstates 'B+' Rating on US$150-Mil. Notes
-------------------------------------------------------------
Standard & Poor's Ratings Services assigns a rating of 'B+ (sf)'
to the US$150 million principal-at-risk variable-rate notes
issued by Queen Street III Capital Ltd. and sponsored by Munich
Re (AA-/Stable/--). "As a result of an administrative oversight
regarding Standard & Poor's SEC Rule 17g(5)-related processes, we
suspended our rating on the notes on Aug. 12, 2011. We are
reinstating our 'B+ (sf)' rating on the notes," S&P stated.
===================
L U X E M B O U R G
===================
SHIELD FINANCE: Moody's Assigns 'B2' Ratings to Bank Debt
---------------------------------------------------------
Moody's has assigned B2 ratings to the amended bank debt of
Shield Finance Co Sarl, the parent company of Sophos Ltd.,
maturing in 2016. This includes a EUR20 million RCF, a US$75
million Term Loan A, a US$225 million Term Loan B, and a US$125
million Incremental Facility used to finance the acquisition of
Astaro Software AG.
Moody's Investors Service has also withdrawn the (P) B2 ratings
which were assigned on June 13, 2011 to different bank facilities
maturing in 2017 intended to be used by Sophos for the
acquisition. This follows the revision of the company's financing
strategy.
Ratings Rationale
"Initially Sophos expected to raise new bank debt facilities to
refinance the existing bank debt and fund the acquisition of
Astaro", says Tanya Savkin, Moody's lead analyst for Sophos.
"However the company chose to raise the same debt quantum within
the existing credit agreement via an increase in the incremental
facility".
Moody's rating rationale was set out in a press release issued on
June 13, 2011.
The Incremental Facility, split into US$65 million and EUR42
million tranches, together with approximately US$40 million cash
on balance sheet allowed Sophos to finance the acquisition of
Astaro. The facility ranks pari-passu with the existing senior
term loans and shares the same guarantee and security package
leading to B2 rating, in line with the ratings of the existing
bank facilities.
The audited accounts of Sophos for the full year ended March 2011
do not show any material divergence from the unaudited financial
statements presented earlier. Similarly, the final terms of the
facilities are in line with the drafts reviewed for the
provisional (P) B2 ratings.
The stable outlook reflects Moody's expectations that Sophos will
be able to improve its financial metrics as positive momentum
continues. The stable outlook also assumes that the company will
maintain an adequate liquidity position and will use excess cash
flow proceeds to repay the debt.
Positive pressure on the ratings or outlook could arise if a Free
Cash Flow to Debt ratio improves towards 15% and a debt to EBITDA
ratio falls below 4.0x on a sustained basis. Downward pressure
might occur if a Free Cash Flow to Debt ratio falls below 10% or
in case of aggressive debt-funded M&A activity.
The principal methodology used in rating Shield Finance Co
S.a.r.l. was the Global Software Industry Methodology, published
May 2009. Other methodologies used include Loss Given Default for
Speculative Grade Issuers in the US, Canada, and EMEA, published
June 2009.
Headquartered in Abingdon (UK), Sophos is a leading IT provider,
specialized in security software and data protection for
businesses. The company operates in more than 150 countries but
generates more than 80% of its sales in two regions: Europe and
North America.
=====================
N E T H E R L A N D S
=====================
DALRADIAN EUROPEAN: Moody's Confirms 'Ca' Rating on Class E Notes
-----------------------------------------------------------------
Moody's Investors Service has upgraded the ratings of these notes
issued by Dalradian European CLO IV B.V.:
Issuer: Dalradian European CLO IV B.V.:
-- EUR164M Class A Senior Secured Floating Rate Notes due
2023, Upgraded to Aa1 (sf); previously on Jun 22, 2011 Aa3
(sf) Placed Under Review for Possible Upgrade
-- EUR100M Senior Secured Floating Rate Variable Funding Notes
due 2023, Upgraded to Aa1 (sf); previously on Jun 22, 2011
Aa3 (sf) Placed Under Review for Possible Upgrade
-- EUR32M Class B Senior Secured Floating Rate Notes due 2023,
Upgraded to A2 (sf); previously on Jun 22, 2011 Baa3 (sf)
Placed Under Review for Possible Upgrade
-- EUR24M Class C Deferrable Secured Floating Rate Notes due
2023, Upgraded to Baa3 (sf); previously on Jun 22, 2011 B2
(sf) Placed Under Review for Possible Upgrade
-- EUR25M Class D Deferrable Secured Floating Rate Notes due
2023, Upgraded to B1 (sf); previously on Jun 22, 2011 Caa3
(sf) Placed Under Review for Possible Upgrade
-- EUR15M Class E Deferrable Secured Floating Rate Notes due
2023, Confirmed at Ca (sf); previously on Aug 5, 2009
Downgraded to Ca (sf)
Ratings Rationale
Dalradian European CLO IV B.V., issued in August 2007, is a multi
currency Collateralised Loan Obligation ("CLO") backed by a
portfolio of mostly senior secured European leveraged loans. The
portfolio also contains approximately 11% non senior secured
loans including mezzanine loans, second lien loans and high yield
bonds. The portfolio is managed by Elgin Capital LLP. This
transaction will be in reinvestment period until July 28, 2013.
According to Moody's, the rating actions taken on the notes are
primarily a result of applying Moody's revised CLO assumptions
described in "Moody's Approach to Rating Collateralized Loan
Obligations" published in June 2011. : The actions also reflect
consideration of an increase in the transaction's
overcollateralization ratios as well as deleveraging of the
senior notes since the rating action in August 2009.
The actions reflect key changes to the modeling assumptions,
which incorporate (1) a removal of the temporary 30% default
probability macro stress implemented in February 2009, (2)
increased BET liability stress factors as well as (3) change to a
fixed recovery rate modeling framework. Additional changes to the
modeling assumptions include (1) standardizing the modeling of
collateral amortization profile, and (2) changing certain credit
estimate stresses aimed at addressing the lack of forward looking
indicators as well as time lags in receiving information required
for credit estimate updates.
Moody's notes that the Class A and Variable Funding Notes have
been paid down by approximately 10.25% or EUR27.06 million since
the rating action in August 2009 due to the breach of certain
overcollateralization tests. The overcollateralization ratios of
the rated notes have improved since the rating action in August
2009. The Class A/B, Class C, Class D and Class E
overcollateralization ratios are reported at 123.27%, 112.66%,
102.76% and 97.41%, respectively, versus August 2009 levels of
115.14%, 106.17%, 98.20% and 93.96%, respectively.
Reported WARF has increased from 2780 to 2932 between June 2009
and June2011. The change in reported WARF understates the actual
credit quality improvement because of 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. In addition, securities rated Caa or lower make
up approximately 6.55% of the underlying portfolio as of June
2011 versus 9.10% in June 2009.
Due to the impact of revised and updated key assumptions
referenced in "Moody's Approach to Rating Collateralized Loan
Obligations" published in June 2011, key model inputs used by
Moody's in its analysis, such as the portfolio par amount, WARF,
diversity score, and weighted average recovery rate, may be
different from the trustee's reported numbers. In its base case,
Moody's analyzed the underlying collateral pool to have a
performing par and principal proceeds balance of EUR314.36
million, defaulted par of EUR25.73 million, a weighted average
default probability of 22.88% (consistent with a WARF of 2985), a
weighted average recovery rate upon default of 45.53% for a Aaa
liability target rating, a diversity score of 37 and a weighted
average spread of 2.80%. The default probability 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 of the assets in the collateral pool.
For a Aaa liability target rating, Moody's assumed that 88.83% of
the portfolio exposed to senior secured corporate assets would
recover 50% upon default, while the remainder non first-lien loan
corporate assets would recover 10%. In each case, historical and
market performance trends and collateral manager latitude for
trading the collateral are also relevant factors. These default
and recovery properties of the collateral pool are incorporated
in cash flow model analysis where they are subject to stresses as
a function of the target rating of each CLO liability being
reviewed.
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
2015 which may create challenges for issuers to refinance. CLO
notes' performance may also be impacted by 1) the manager's
investment strategy and behavior and 2) divergence in legal
interpretation of CDO documentation by different transactional
parties due to embedded ambiguities.
Sources of additional performance uncertainties are:
1) Moody's also notes that around 60% of the collateral pool
consists of debt obligations whose credit quality has been
assessed through Moody's credit estimates. Large single
exposures to obligors bearing a credit estimate have been
subject to a stress applicable to concentrated pools as per
the report titled "Updated Approach to the Usage of Credit
Estimates in Rated Transactions" published in October 2009.
2) Recovery of defaulted assets: Market value fluctuations in
defaulted assets reported by the trustee and those assumed to
be defaulted by Moody's may create volatility in the deal's
overcollateralization levels. Further, the timing of
recoveries and the manager's decision to work out versus sell
defaulted assets create additional uncertainties. Moody's
analyzed defaulted recoveries assuming the lower of the market
price and the recovery rate in order to account for potential
volatility in market prices.
3) Weighted average life: The notes' ratings are sensitive to the
weighted average life assumption of the portfolio, which may
be extended due to the manager's decision to reinvest into new
issue loans or other loans with longer maturities and/or
participate in amend-to-extend offerings. Moody's tested for a
possible extension of the actual weighted average life in its
analysis.
4) Other collateral quality metrics: The deal is allowed to
reinvest and the manager has the ability to deteriorate the
collateral quality metrics' existing cushions against the
covenant levels. Moody's analyzed the impact of assuming lower
of reported and covenanted values for weighted average rating
factor, weighted average spread, weighted average coupon, and
diversity score.
The principal methodology used in the rating was "Moody's
Approach to Rating Collateralized Loan Obligations" published in
June 2011.
Moody's modeled the transaction using the Binomial Expansion
Technique, as described in Section 2.3.2.1 of the "Moody's
Approach to Rating Collateralized Loan Obligations" rating
methodology published in June 2011.
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.
In addition to the quantitative factors that are explicitly
modeled, qualitative factors are part of the rating committee
considerations. These qualitative factors include the structural
protections in each transaction, the recent deal performance in
the current market environment, the legal environment, specific
documentation features, the collateral manager's track record,
and the potential for selection bias in the portfolio. All
information available to rating committees, including
macroeconomic forecasts, input from other Moody's analytical
groups, market factors, and judgments regarding the nature and
severity of credit stress on the transactions, may influence the
final rating decision.
EUROCREDIT CDO IV: Moody's Lifts Ratings on 2 Note Classes to Ba3
-----------------------------------------------------------------
Moody's Investors Service has upgraded the ratings of these notes
issued by Eurocredit CDO IV B.V:
-- EUR252,000,000 Class A-1 Senior Secured Floating Rate Notes
due 2020 (currently EUR200,468,333.65 outstanding),
Upgraded to Aaa (sf); previously on Jun 22, 2011 Aa1 (sf)
Placed Under Review for Possible Upgrade
-- EUR23,000,000 Class A-2 Senior Secured Floating Rate Notes
due 2020, Upgraded to Aa3 (sf); previously on Jun 22, 2011
A3 (sf) Placed Under Review for Possible Upgrade
-- EUR8,500,000 Class B-1 Senior Secured Deferrable Floating
Rate Notes due 2020, Upgraded to Baa2 (sf); previously on
Jun 22, 2011 Ba2 (sf) Placed Under Review for Possible
Upgrade
-- EUR12,500,000 Class B-2 Senior Secured Deferrable Fixed
Rate Notes due 2020, Upgraded to Baa2 (sf); previously on
Jun 22, 2011 Ba2 (sf) Placed Under Review for Possible
Upgrade
-- EUR750,000 Class C-1 Senior Secured Deferrable Floating
Rate Notes due 2020, Upgraded to Ba3 (sf); previously on
Jun 22, 2011 Caa2 (sf) Placed Under Review for Possible
Upgrade
-- EUR17,750,000 Class C-2 Senior Secured Deferrable Fixed
Rate Notes due 2020, Upgraded to Ba3 (sf); previously on
Jun 22, 2011 Caa2 (sf) Placed Under Review for Possible
Upgrade
Ratings Rationale
Eurocredit CDO IV B.V, issued in November 2004, is a single
currency Collateralised Loan Obligation ("CLO") backed by a
portfolio of mostly senior secured European loans. The
transaction is managed by Intermediate Capital Managers Limited
and has been in its amortization period since February 2010.
According to Moody's, the rating actions taken on the notes are
primarily a result of applying Moody's revised CLO assumptions
described in "Moody's Approach to Rating Collateralized Loan
Obligations" published in June 2011. The actions also reflect
consideration of credit an increase in the transaction's
overcollateralization ratios since the rating action in November
2009.
The actions reflect key changes to the modelling assumptions,
which incorporate (1) a removal of the temporary 30% default
probability macro stress implemented in February 2009, (2)
increased BET liability stress factors as well as (3) change to a
fixed recovery rate modelling framework. Additional changes to
the modelling assumptions include (1) standardizing the modelling
of collateral amortization profile, and (2) changing certain
credit estimate stresses aimed at addressing the lack of forward
looking indicators as well as time lags in receiving information
required for credit estimate updates.
Moody's notes that the Class A notes have been paid down by
approximately EUR 49 million since the rating action in November
2009. As a result of the deleveraging, the overcollateralization
ratios have improved. The Class A, Class B and Class C
overcollateralization ratios are reported at 127.16%, 116.23% and
108.06% respectively, versus September 2009 levels of 119.91%,
111.32% and 104.71%, respectively. All related
overcollateralization tests are currently in compliance.
Reported WARF has increased from 2799 to 2952 between September
2009 and July 2011. However this change increase overstates the
actual credit quality improvement of the portfolio because of 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. In addition defaulted
securities total about EUR4.5 million of the underlying portfolio
compared to EUR25.8 million in September 2009.
Due to the impact of revised and updated key assumptions
referenced in "Moody's Approach to Rating Collateralized Loan
Obligations" published in June 2011, key model inputs used by
Moody's in its analysis, such as the portfolio par amount, WARF,
diversity score, and weighted average recovery rate, may be
different from the trustee's reported numbers. In its base case,
Moody's analyzed the underlying collateral pool to have a
performing par and principal proceeds balance of EUR305.8
million, a weighted average default probability of 30.94%
(consistent with a WARF of 3094), a weighted average recovery
rate upon default of 42.62% for a Aaa liability target rating, a
weighted average spread of 3.14%and a diversity score of 32. The
default probability 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 of the assets
in the collateral pool. For a Aaa liability target rating,
Moody's assumed that 81.56% of the portfolio exposed to senior
secured corporate assets would recover 50% upon default, while
the remainder non first-lien loan corporate assets would recover
10%. In each case, historical and market performance trends and
collateral manager latitude for trading the collateral are also
relevant factors. These default and recovery properties of the
collateral pool are incorporated in cash flow model analysis
where they are subject to stresses as a function of the target
rating of each CLO liability being reviewed.
Moody's notes that this transaction is subject to a high level of
macroeconomic uncertainty, as evidenced by the large
concentration of speculative-grade debt maturing between 2012 and
2015 which may create challenges for issuers to refinance. CLO
notes' performance may also be impacted by 1) the manager's
investment strategy and behavior and 2) divergence in legal
interpretation of CDO documentation by different transactional
parties due to embedded ambiguities.
Sources of additional performance uncertainties are:
1) Deleveraging: 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 bond/loan
market and/or collateral sales by the manager, which may have
significant impact on the notes' ratings.
2) Moody's also notes that around 65% of the collateral pool
consists of debt obligations whose credit quality has been
assessed through Moody's credit estimates. Large single
exposures to obligors bearing a credit estimate have been
subject to a stress applicable to concentrated pools as per
the report titled "Updated Approach to the Usage of Credit
Estimates in Rated Transactions" published in October 2009.
The principal methodology used in the rating was "Moody's
Approach to Rating Collateralized Loan Obligations" published in
June 2011.
Moody's modelled the transaction using the Binomial Expansion
Technique, as described in Section 2.3.2.1 of the "Moody's
Approach to Rating Collateralized Loan Obligations" rating
methodology published in June 2011".
The cash flow model used for this transaction, whose description
can be found in the methodology listed above, is Moody's CDOEdge
model.
In addition to the quantitative factors that are explicitly
modelled, qualitative factors are part of the rating committee
considerations. These qualitative factors include the structural
protections in each transaction, the recent deal performance in
the current market environment, the legal environment, specific
documentation features, the collateral manager's track record,
and the potential for selection bias in the portfolio. All
information available to rating committees, including
macroeconomic forecasts, input from other Moody's analytical
groups, market factors, and judgments regarding the nature and
severity of credit stress on the transactions, may influence the
final rating decision.
=========
S P A I N
=========
CAJA DE AHORROS: No Bankruptcy Credit Event, ISDA Rules
-------------------------------------------------------
Michael Shanahan at Bloomberg News reports that the International
Swaps & Derivatives Association ruled there hasn't been a
bankruptcy credit even at Caja de Ahorros del Mediterraneo.
As reported by the Troubled Company Reporter-Europe on July 27,
2011, Reuters related that CAM secured EU regulatory approval for
EUR5.8 billion (US$8.3 billion) in state aid and must submit a
restructuring plan within six months.
Caja de Ahorros del Mediterraneo (CAM) is a savings bank that
attracts deposits and provides commercial banking services in
Spain.
UCI 11: S&P Lowers Rating on Class C Notes to 'BB (sf)'
-------------------------------------------------------
Standard & Poor's Ratings Services lowered and kept on
CreditWatch negative its credit ratings on all classes of notes
in Spanish residential mortgage-backed securities (RMBS)
transactions Fondo de Titulizacion Hipotecaria UCI 10 and Fondo
de Titulizacion de Activos UCI 11.
From 2007, these UCI transactions have experienced increasing
levels of severe arrears that peaked in 2009. "Since then, we
understand that the servicer, Union de Creditos Inmobiliarios,
Establecimiento Financiero de Credito S.A. (UCI), decided to
adopt a more proactive approach to arrears management and, among
other policies, to offer temporary reductions of monthly
installments to
borrowers experiencing payment difficulties. UCI enters into this
kind of agreement only when it considers the borrower's
difficulties to be temporary," S&P related.
"UCI has provided us with data showing that about 75% of the
loans that were in performing arrangements are now performing.
However, in our opinion, these loans are still more at risk of
falling into arrears than loans that have never been in
performing arrangements," S&P noted.
The data show that borrowers that had entered into performing
arrangements with some existing unpaid installments are more at
risk of falling back into arrears than borrowers that had entered
into performing arrangements without any unpaid installments. "We
performed our analysis applying an increased foreclosure
frequency rate to loans that are, or have been, in performing
arrangements," S&P said.
"Moreover, such agreements could, in our view, postpone the
recognition of losses and delay the breach of interest-deferral
triggers on the junior notes. The postponement of arrears and
defaults will also increase, in our opinion, the probability that
the interest-deferral trigger for the class B notes in UCI 10
will be hit, since this trigger is based on the 90+ day arrears
rate over the current asset balance," S&P related.
"As a result of this credit and cash flow analysis, and despite
the fact that the reserve funds in both transactions are
currently fully-funded and arrears are decreasing, we have
lowered our ratings on all classes of notes in UCI 10 and 11,"
S&P stated.
"We have also kept these ratings on CreditWatch negative, pending
further loan performance data on loans with temporarily reduced
installments. We are monitoring the performance of such pools and
will take any appropriate rating action in due course," S&P
related.
UCI 10 and 11 are Spanish RMBS transactions. UCI 10 is backed by
a pool of first-ranking mortgages secured over owner-occupied
residential properties in Spain while UCI 11 is backed by a pool
of first-ranking mortgages secured over owner-occupied
residential properties in Spain and a pool of unsecured personal
or second-lien mortgage loans. The underlying assets are all
associated with first-ranking mortgages originated by UCI.
Ratings List
Class Rating
To From
Ratings Lowered and Kept on CreditWatch Negative
Fondo de Titulizacion Hipotecaria UCI 10
EUR700 Million Mortgage-Backed Floating-Rate Notes
A AA (sf)/Watch Neg AAA (sf)/Watch Neg
B BBB (sf)/Watch Neg A (sf)/Watch Neg
Fondo de Titulizacion de Activos UCI 11
EUR850 Million Mortgage-Backed Floating-Rate Notes
A AA (sf)/Watch Neg AAA (sf)/Watch Neg
B BBB (sf)/Watch Neg A (sf)/Watch Neg
C BB (sf)/Watch Neg BBB (sf)/Watch Neg
=============
U K R A I N E
=============
CREATIV GROUP: S&P Assigns 'B-' Long-Term Corporate Credit Rating
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B-' long-term
corporate credit rating to large Ukrainian vegetable oil and fat
producer Creativ Group OJSC. The outlook is negative.
"The rating is based on our assessment of Creativ's business risk
profile as 'vulnerable' and its financial risk profile as 'highly
leveraged," S&P related.
"We view Creativ's credit quality as constrained by weak
liquidity, high leverage, risks to profitability stemming from
volatile agricultural commodity prices, and potential excess
crushing capacity in Ukraine. Creativ also faces what we view as
significant working capital swings, foreign currency exposure,
and structurally weak free operating cash flow. The credit rating
also reflects liquidity risks stemming from a large share of
short-term debt, as well as geographic earnings and revenue
concentration in Ukraine," S&P related.
"Nevertheless, the rating is supported, in our view, by Creativ's
29% market share in the Ukrainian vegetable fat market and its
track record of profitable growth. Creativ managed to increase
its profits by more than 5x over the past three years, benefiting
from modern production and extensive storage facilities, mainly
in Kirovohrad Oblast (not rated)," S&P stated.
In 2010, the group reported sales of US$265 million and EBITDA of
US$62 million. Creativ is a large vegetable fats and producer in
Ukraine. The company also has sunflower oilseeds crushing
capacity of 385,000 tons and plans to increase this to about one
million tons in 2012. The company's profit base is split almost
equally between crushing sunflower seeds into oil (primarily for
export) and producing hydrogenated fats.
The agribusiness industry exposes Creativ to a number of risks,
such as the volatility of the input costs of palm oil and
sunflower seeds and of the company's product prices. These
combined factors cause Creativ's sales and profits to fluctuate;
however, this has been somewhat offset in recent years by the
company's increasing production capacity. The company's margins
have fluctuated between 11% and 23% over the past five years.
"Creativ's key competitive advantages are, in our view, its
modern fat production and oil processing facilities and its
established relationships with confectionary and dairy producers
that buy hydrogenated fats," S&P related.
"Creativ's financial risk profile is constrained, in our opinion,
by weak liquidity and high leverage. The share of short-term debt
regularly approaches or exceeds 40%, which undrawn long-term
committed lines cannot sufficiently cover. We view the company's
reliance on short-term trade finance to fund its large seasonal
working capital swings as a risk. Creativ is exposed to unhedged
foreign currency risk because almost all of its debt is
denominated in foreign currency, while only half of its sales are
linked to the U.S. dollar. The company's leverage is high. The
debt-to-EBITDA ratio was between 3x and 5x over the past five
years," S&P related.
Creativ is a private company, with 76% of its shares controlled
by members of the Berezkin family and several other individuals.
Although the company's board is dominated by key shareholders, it
plans to introduce independent directors.
"The negative outlook reflects the likelihood that we would lower
the rating on Creativ if the company were unable to roll over its
short-term debt in the event of operating underperformance or
credit market volatility," S&P said.
"Nevertheless, we would likely revise the outlook to stable if we
saw a continuation of historical operating trends, combined with
stronger equity support and longer-term debt funding," S&P
stated.
===========================
U N I T E D K I N G D O M
===========================
ALBA 2006-2: S&P Raises Rating on Class F Notes to 'B-(sf)'
-----------------------------------------------------------
Standard & Poor's Ratings Services lowered and removed from
CreditWatch negative its credit ratings on ALBA 2005-1 PLC's
mezzanine classes of notes and affirmed all other ratings in the
transaction. "At the same time, we raised and removed from
CreditWatch negative our ratings on ALBA 2006-1 PLC's mezzanine
notes and raised our rating on ALBA 2006-2 PLC's class F notes.
We affirmed our ratings on all other notes in these transactions
and also removed from CreditWatch negative our ratings on ALBA
2006-2's classes B to E," S&P related.
"Our rating actions follow a full credit and cash flow analysis
of the most recent information that we have received for each
transaction. This analysis showed that the quality of the loan-
level data gave rise to a degree of uncertainty. As a result, we
applied conservative stresses in order to address this when
determining our ratings," S&P said.
"Our review of ALBA 2005-1 determined a worsening of the
underlying collateral since closing. Total arrears remain high,
at 15.33% in May 2011 and losses have increased, to 0.41% in May
2011 from 0.05% in February 2011. The reserve fund is below the
target amount and is currently 67% of the required amount," S&P
related.
The reserve has been topping up since May 2010, and 90+ day
arrears have decreased to 6.82% in May 2011 from 11.95% in the
same period. "We would attribute the topping-up of the reserve
fund and reduction in 90+ day arrears to the current low interest
rate environment, which has enabled borrowers to meet their
payment requirements," S&P related.
Credit enhancement in both 2006 issuances has increased and the
reserve fund is at the required level in ALBA 2006-1 and 94% of
required level in ALBA 2006-2. "Additionally, in both issuances
we have seen reductions in 90+ day delinquencies and losses," S&P
related.
Over the past year, 90+ day delinquencies have fallen to 11.19%
(May 2011) from 13.30% (May 2010) in ALBA 2006-1; and to 11.51%
(June 2011) from 13.17% (June 2010) in ALBA 2006-2. Period losses
have fallen by two basis points (bps) in ALBA 2006-1 and by 12
bps in ALBA 2006-2 over the latest interest payment period.
"We will continue to monitor the development of arrears and
losses in these transactions," S&P stated.
Ratings List
Rating
Class To From
ALBA 2005-1 PLC
GBP301 Million Mortgage-Backed Floating-Rate Notes
Ratings Lowered and Removed From Creditwatch Negative
B A+ (sf) AA+ (sf)/Watch Neg
C BBB- (sf) A+ (sf)/Watch Neg
D BB (sf) BBB (sf)/Watch Neg
Ratings Affirmed
A3 AAA (sf)
E B (sf)
ALBA 2006-1 PLC
GBP556.25 Million Mortgage-Backed Floating-Rate Notes Due 2037
Ratings Raised and Removed From Creditwatch Negative
B AA+ (sf) AA (sf)/Watch Neg
C A (sf) A- (sf)/Watch Neg
D A- (sf) BBB- (sf)/Watch Neg
Ratings Affirmed
A3a AAA (sf)
A3b AAA (sf)
E B (sf)
ALBA 2006-2 PLC
EUR110 Million and GBP466.641 Million Mortgage-Backed Floating-
Rate Notes
Ratings Raised
F B- (sf) CCC (sf)
Ratings Affirmed
A3a A (sf)
A3b A (sf)
Ratings Affirmed and Removed From Creditwatch Negative
B A (sf)/Watch Neg
C A- (sf)/Watch Neg
D BBB- (sf)/Watch Neg
E BB- (sf)/Watch Neg
ASTON MARTIN: S&P Assigns 'BB-' Long-Term Corporate Credit Rating
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB-' long-term
corporate credit rating to U.K.-based luxury sports car
manufacturer Aston Martin Holdings (UK) Ltd. (AM). "At the same
time, we assigned our 'BB-' issue rating to the GBP304 million
senior secured notes issued by Aston Martin Capital Ltd. with a
recovery rating of '3', indicating our expectation of meaningful
recovery (50%-70%) in the event of a payment default. The outlook
is stable," S&P related.
"The ratings on AM primarily reflect our assessment of its
financial risk profile as 'aggressive' and business risk profile
as 'fair,' according to our criteria," S&P said.
"We consider AM's business risk profile to be constrained by
marked cyclical swings in its end-markets, its niche position in
the market for high-luxury sports cars, limited product
diversity, and highly variable operating margins," said Standard
& Poor's credit analyst Werner Staeblein. "Nevertheless, the
company's strong brand reputation in luxury sports cars affords
it a certain pricing power, while its good production
flexibility, product offering, and new model pipeline also
support its business risk profile, in our view."
AM derives about 90%-95% of group revenues from vehicle sales,
and the remainder from services and spare parts.
The crisis in the automotive market in 2009 affected sales in
both the mass-market and luxury car segments. AM reported a group
sales decline of 35% and a drop in unit sales of 50% in 2009, but
managed to report a positive operating result, with an underlying
EBIT margin of 6%. "We view this as an indication that AM's
operating leverage is lower than that of the auto industry in
general. Following a rebound in demand for luxury cars, AM
reported a rise in revenues of 36% in 2010, with an underlying
EBIT margin of 6%. AM sold about 4,200 vehicles in 2010, notably
in the U.K., the U.S., and the rest of Europe," S&P related.
As of year-end 2010, AM's fully adjusted debt to EBITDA was 5.2x,
as adjusted by Standard & Poor's, while funds from operations
(FFO) to debt stood at 17%.
"The stable outlook reflects our opinion that AM will likely
maintain credit ratios that we consider commensurate with its
financial risk profile, which we view as "aggressive", such as
adjusted FFO to debt of about 15% over the medium term," said
Mr. Staeblein.
"Our base-case scenario assumes that AM's adjusted FFO to debt
will be about in line with this level in 2011 and that it could
achieve a minor financial buffer to this level in 2012. For a
company operating in a cyclical environment such as AM, we see
the need to maintain a buffer to be able to withstand the risk of
large swings in demand and operating cash flow, as has been the
case in the recent past," S&P stated.
EVERTON FC: Chairman Pleads With Barclays Over Finances
-------------------------------------------------------
Dominic King at Mail Online reports that Everton Football Club
Chairman Bill Kenwright has admitted to pleading with the club's
bank "don't 'to kill [the club] this season" as he laid bare the
details of the club's suffocating finances.
Though Everton Football Club is not in immediate danger of going
into administration, Barclays bank have blocked the club from
making any additions to their playing staff and forced the club
to reduce its overdraft, according to Mail Online. Mr.
Kenwright, Mail Online reports, is under pressure to keep the
club moving forward. During a meeting with a fans' group
arranged by Chief Executive Officer Robert Elstone, Mr. Kenwright
outlined the mounting difficulties they are facing.
Mail Online notes that Everton FC's last reported debt for the
financial year ending May 2010 was GBP44.9 million but without
any sign of new investment, Mr. Kenwright revealed that improving
the squad is impossible.
"Look, we have just done a document to the bank which says you
can't stop the football club from trading . . . Do you not think
the bank doesn't ask me every week how we're doing with the sale?
. . . They're desperate. So what I've told them is 'don't kill
us this season,'" Mail Online quoted Mr. Kenwright as saying.
The report relays that Mr. Kenwright also said proceeds from
recent player sales, such as Steven Pienaar's GBP3 million switch
to Tottenham, and Bellefield, the former training ground sold for
GBP9 million, had been taken by Barclays.
"The maths is simple. We've got an income up to GBP80 million
but the costs are GBP85 million so you don't need a calculator to
work out what the problem is," Mr. Kenwright said in a televised
interview, Mail Online adds.
Everton Football Club is an English professional association
football club from the city of Liverpool.
FITZBILLIES: To Reopn in August After Six-Month Closure
-------------------------------------------------------
BBC News reports that Fitzbillies bakeshop is reopening by end of
August after a six-month closure. Fitzbillies went into
administration in February with the loss of 25 jobs.
Husband and wife team Alison Wright and Tim Hayward moved from
London to take over the business, according to BBC News.
The report notes that the GBP100,000 facelift to the Georgian
building includes a new coffee bar and expanded restaurant but
the owners have decided to keep "the 1922 vintage front" intact.
HAULAGE AND PLANT: Enters Administration, Seeks Buyer
-----------------------------------------------------
Catherine Deshayes at Business Sale reports that the William
Matthew O'Grady-owned company, Haulage and Plant Hire Ltd., has
gone into administration. The report relates that administrators
from financial services firm KPMG has been appointed as
administrators.
A buyer is being sought for the haulage firm, which had a
turnover of GBP5 million in its last financial year, according to
Business Sale. The report notes that it is unclear as to how
many jobs could be affected by the situation.
Business Sale discloses that Mr. O'Grady was convicted in March
on 12 charges involving the illegal dumping of waste. The report
relates that Mr. O'Grady is currently awaiting sentence, and is
being investigated under The Proceeds of Crime Act, aimed at
stripping him of illegal profits.
Meanwhile, Business Sale says that another company belonging to
Mr. O'Grady, Gwynedd Skip Hire, which operates from the same
premises, is still in business.
Headquartered in Cibyn Industrial Estate in Caernarfon, North
Wales, Haulage and Plant Hire Ltd. is a haulage firm owned by
beleaguered skip hire boss, William Matthew O'Grady.
NORWOOD INTERIORS: Now My House Grp. to Acquire Part of Business
----------------------------------------------------------------
Bringhouse Echo reports that Now My House Group has agreed to buy
the main part of Norwood Interiors' business for an undisclosed
sum saving 20 showroom jobs in the process, but 13 jobs were lost
in the warehousing and distribution department in Leeds.
Norwood Interiors has had a difficult few months of trading and
went into administration on Aug. 11, according to Bringhouse
Echo.
The report relates that the deal was worked out by insolvency
experts at Clough Corporate Solutions, part of chartered
accountants Clough and Company of Cleckheaton.
Headquartered in Macclesfield, My House Group owns a wide range
of other nationwide home improvement companies including
Christies Kitchens, window and door firm Weatherseal and home
maintenance company Job Worth Doing.
Norwood Interiors has a showroom at Spring Street Studios. It
also has a site at Kirkstall in Leeds, was founded in 1985, and
installs kitchens, bathrooms and bedrooms.
VON ESSEN: Chalcroft Re-starts Work on Congham Hotel
----------------------------------------------------
Lynn News reports that construction firm Chalcroft has agreed to
complete scheduled building work at the Congham Hall Hotel.
When Chalcroft's client, Von Essen, the owners of the hotel, went
into administration in April, Chalcroft exercised its right to
take possession of the facilities it was building as part of the
GBP2.4 million refurbishment program, according to Lynn News.
However, the report relates that following successful
negotiations with Von Essen administrators Ernst & Young,
Chalcroft restarted work on Aug. 10, and hopes to complete the
project by Oct. 19.
Lynn News notes that the work involves expanding the restaurant,
the creation of new kitchen facilities and 11 additional
bedrooms, along with a new spa facility and pool.
As reported in the Troubled Company Reporter-Europe on April 25,
2011, BBC News said the holding company of the von Essen hotel
chain has appointed accountants Ernst & Young as administrators.
SoGlos.com related that von Essen is reported to have debts of
more than GBP25 million. SoGlos.com noted that while
administrators have been appointed and the portfolio of hotels
are expected to be sold off either as a group or as individual
properties, the hotels are all expected to continue to trade as
usual. "It is business as normal for the hotels and customers of
von Essen Hotels can continue to enjoy their stay," The Northern
Echo quoted Angela Swarbrick, joint administrator, as saying.
von Essen hotel chain owns 28 luxury hotels in the UK and France.
===============
X X X X X X X X
===============
* EUROPE: Central Bank Attacks Euro Zone Rescue Plan
----------------------------------------------------
Tom Fairless at The Wall Street Journal reports that Germany's
Bundesbank warned Monday the euro zone's rescue plan to end its
sovereign-debt crisis will weaken the foundations of the currency
union and could increase states' tendency to build up debts,
taking a hard stance against an agreement that German Chancellor
Angela Merkel still has to persuade her government to support.
According to the Journal, the Bundesbank said in its monthly
report that the deal, which euro-zone leaders agreed to at a
summit on July 21 but requires the approval of euro-zone
governments, represents "a big step towards sharing the risks of
shaky state finances and economic mistakes" across the euro-zone.
That "weakens the foundations of the currency union", which is
based on "fiscal responsibility and discipline through the
capital markets," the Bundesbank, as cited by the Journal, said.
The Journal notes that the bank said without a fiscal or
political union, July's deal could put pressure on the European
Central Bank to "loosen the common monetary policy" and increase
states' tendency to build up debts.
In the agreement, European Union leaders approved expanding the
size and powers of the EU's rescue fund, the European Financial
Stability Facility, the Journal discloses. The Bundesbank said
that since the deal doesn't offer donor countries much more
influence over the fiscal policies of bailed-out states, it could
increase states' tendency to build up debts, the Journal relates.
Ms. Merkel has resisted pressure from some EU officials and euro-
zone countries to support euro-zone bonds, which have been
suggested as a solution to the bloc's debt crisis, the Journal
discloses. On Sunday, she warned that euro-zone bonds would
collectivize debt without transferring national budget
sovereignty to Europe, the Journal recounts. According to the
Journal, she said that such bonds would lead to a "debt union and
not a stability union".
*********
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 * * *