/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/111201.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 Thursday, December 1, 2011, Vol. 12, No. 238 Headlines A U S T R I A A-TEC INDUSTRIES: Penta Files Bid for Minerals & Metals Unit C Y P R U S MISTHOSIS FUNDING: Moody's Says Series A Ratings Unaffected G R E E C E * GREECE: Euro-Area Finance Ministers Approve EUR5.8-Bil. Loan I R E L A N D ASHFORD CASTLE: Goes Into Receivership, Racks Up Enormous Losses * IRELAND: Smaller Firms May Avail of Low-Costs Examinerships I T A L Y SEAT PAGINE: Subordinated Bondholders Back Debt Restructuring N E T H E R L A N D S ORTHOFIX INT'L: S&P Withdraws 'BB-' Corporate Credit Rating N O R W A Y HUNSFOS FABRIKKER: To Go Into Liquidation P O R T U G A L LISBON AND PORTOS: Fitch Cuts Long-Term Currency Ratings to 'BB+' R U S S I A MOBILE TELESYSTEMS: Fitch Affirms 'BB+' LT Foreign Currency IDR MOSCOW BANK: Fitch Affirms Long-Term IDR at 'B+' SISTEMA JOINT: Fitch Affirms 'BB-' Senior Unsecured Ratings * MURMANSK REGION: Fitch Assigns 'BB/B' Currency Ratings S P A I N BANCO DE VALENCIA: Banco Mare Nostrum Mulls Takeover Bid SANTANDER HIPOTECARIO: Fitch Affirms C Rating on Class F Tranche T U R K E Y T.C. ZIRAAT: Fitch Affirms LT Foreign Currency IDR at 'BB+' U N I T E D K I N G D O M AUSTIN-SMITH:LORD: Creditors Extend CVA Deadline to December 2 CONSOLIDATED MINERAL: Moody's Reviews 'B2' CFR for Downgrade CONVERS SPORTS: In Administration, Football Club Chairman Resigns DECO 6: Fitch Affirms 'CCsf' Rating on GBP24.1-Mil. Class D Notes EUROPEAN PRIME: Fitch Affirms GBP1-Mil. Class D Notes at 'Dsf' HAMKORBANK: Moody's Assigns 'E+' Bank Financial Strength Rating PARAMOUNT: Cafe Fish Buys Livebait Out of Administration SAAB GB: Goes Into Administration in London for Legal Protection X X X X X X X X * EUROPE: Ailing Banks' Short-Term Creditors May Face Losses * EUROPE: Euro Finance Ministers Agree to Boost Bailout Fund * Upcoming Meetings, Conferences and Seminars ********* ============= A U S T R I A ============= A-TEC INDUSTRIES: Penta Files Bid for Minerals & Metals Unit ------------------------------------------------------------ According to Bloomberg News' Lenka Ponikelska, Penta Investments Ltd. spokesman Martin Danko said that the Czech and Slovak private equity group filed a bid for the minerals and metals unit of bankrupt A-Tec Industries AG. A-Tec administrator Matthias Schmidt exercised his right to start liquidating the group after it failed to raise by Sept. 30 funds required under a restructuring agreed with creditors last year, Bloomberg recounts. Mr. Schmidt is seeking to sell all of A-Tec's assets and pay out the proceeds exclusively to creditors, Bloomberg notes. The administrator sold 98% of its ATB electric drive unit to China's Wolong Investment GmbH, a subsidiary of the Asian nation's Wolong Group, on Oct. 19, Bloomberg discloses. A-TEC Industries AG engages in plant construction, drive technology, machine tools, and minerals and metals businesses in Europe and internationally. The company is based in Vienna, Austria. =========== C Y P R U S =========== MISTHOSIS FUNDING: Moody's Says Series A Ratings Unaffected ----------------------------------------------------------- Moody's Investors Service has determined that this rating of the notes issued by Misthosis Funding Plc are unaffected following amendment: Moody's Investors Service stated that a proposal by the Bank of Cyprus to (i) change the triggers by which a stand-by Servicer would be appointed (from loss of Baa3 to loss of Ba3) and to remove as Servicer Termination Event the situation in which the Servicer was downgraded below Ba3 by Moody's and (ii) increase the Commingling Reserve from 3% to 4% (the "Amendments") will not, in and of itself and at this time, result in a reduction or withdrawal of the current ratings of the notes issued by the Issuer. Moody's opinion addresses only the credit impact associated with the proposed Amendments, and Moody's is not expressing any opinion as to whether these actions have, or could have, other non-credit related effects that may have a detrimental impact on the interests of note holders or counterparties. For the avoidance of doubt, this determination relates to the execution documentation provided to Moody's (MASTER AMENDMENT DEED AND NOTEHOLDER CONSENT, dated November 21, 2011) only and should not be taken to imply that Moody's will not take a rating action in respect of the Notes by virtue of any other events or circumstances that may be continuing now or that arise in the future. The methodologies used in this rating were "Moody's Approach to Rating CDOs of SMEs in Europe", published in February 2007, "Refining the ABS SME Approach: Moody's Probability of Default assumptions in the rating analysis of granular Small and Mid- sized Enterprise portfolios in EMEA", published in March 2009 and "Moody's Approach to Rating Granular SME Transactions in Europe, Middle East and Africa", published in June 2007. Moody's will continue monitoring this rating. Any change in the rating will be publicly disseminated by Moody's through appropriate media. =========== G R E E C E =========== * GREECE: Euro-Area Finance Ministers Approve EUR5.8-Bil. Loan -------------------------------------------------------------- Jonathan Stearns at Bloomberg News reports that euro-area finance ministers approved a EUR5.8 billion (US$7.7 billion) loan to Greece under last year's bailout after eliciting budget-austerity pledges from Greek political leaders backing a unity government. The go-ahead for the sixth disbursement of funds under the fully taxpayer-funded package of EUR110 billion shifts the spotlight to a second rescue of Greece that foresees 50% losses for private investors in Greek bonds, Bloomberg notes. According to Bloomberg, the new aid plan, crafted at an October summit, also includes EUR130 billion in extra public funds. After initially endorsing the next loan for Greece on Oct. 21, the euro area froze the payment this month because former Socialist Premier George Papandreou announced a referendum on the second rescue plan, Bloomberg discloses. He later called off the vote, resigned and was succeeded by ex-central banker Lucas Papademos, whose interim government has the support of three parties to press ahead with budget cuts needed for continued aid, Bloomberg recounts. "We decided to release the sixth disbursement of the Greek program now that prior actions have been met," Bloomberg quotes Luxembourg's Jean-Claude Juncker as saying. Greece, which faces a fifth year of economic contraction in 2012, says it needs the next international aid payment by mid- December, according to Bloomberg. The euro area's installment is part of an EUR8 billion disbursement, of which the International Monetary Fund will provide the remainder, Bloomberg notes. The IMF, which is funding almost a third of last year's package for Greece, must still approve its EUR2.2 billion share of the next payment to the country, Bloomberg says. Greek Finance Minister Evangelos Venizelos said in a statement handed out in Brussels that the IMF planned to give its verdict on Dec. 5 and Juncker said the funds would be transferred to Greece by the middle of December, Bloomberg discloses. The initial bailout of Greece was made up of loans from euro-area governments and the IMF, Bloomberg notes. The euro area's share of the new package is set to come from the EUR440 billion European Financial Stability Facility, which is already contributing to international rescues of Ireland and Portugal, according to Bloomberg. ============= I R E L A N D ============= ASHFORD CASTLE: Goes Into Receivership, Racks Up Enormous Losses ---------------------------------------------------------------- Siobhan Creaton at Irish Independent reports that Ashford Castle has gone into receivership with enormous losses. Developer Gerry Barrett and Bank of Scotland Ireland appointed David Hughes and Luke Charleton of Ernst & Young as receivers. The receivers said that the hotel would continue to trade as normal and there will be "no interruption to guests, staff and suppliers," according to Irish Independent. The report notes that the 130 staff employed at Ashford Castle will continue to be employed during the receivership. As reported in the Troubled Company Reporter-Europe on Feb. 25, 2011, The Irish Times said that Ashford Castle Estate Ltd. recorded combined pretax losses totaling EUR39 million in 2009 and 2008. According to The Irish Times, filings just filed to the Companies Office show that ACEL, which is owned by Galway businessman Gerry Barrett, recorded a pretax loss of EUR16.1 million in 2009, and this followed a pretax loss of EUR23.1 million in the 13 months to the end of December 2008. The Irish Times noted auditors for the company, Deloitte Touche state that ACEL is dependent on the financial support of the National Assets Management Agency (NAMA), its non-Nama bank and the continuing support of its fellow group companies to be able to continue as a going concern. The directors disclose the company owes EUR29.8 million to other companies within Mr. Barrett's Edward Holdings Group and the accounts show that the company owes an additional EUR29.2 million in bank loans, The Irish Times related. Ashford Castle Estate Ltd. is a five-star hotel in Co Mayo. * IRELAND: Smaller Firms May Avail of Low-Costs Examinerships ------------------------------------------------------------- Emmet Oliver at Irish Independent reports that thousands of smaller firms will be able to seek examinerships for the first time at low cost under changes that are being planned by the Irish government. Examinerships, which give troubled companies protection from their creditors, are mostly used by larger companies due to the costs involved, Irish Independent discloses. Many smaller firms simply try to struggle on with their debts or go into liquidation/receivership, Irish Independent says. A company itself can apply to be put into examinership, but once a firm exceeds a certain threshold of debt, its examinership case can only be heard in the High Court, meaning it is highly prohibitive on cost grounds for debt-ravaged firms, Irish Independent notes. But Jobs, Enterprise and Innovation Minister Richard Bruton is examining these thresholds which should allow more examinerships to go before the far cheaper Circuit Court, according to Irish Independent. Mr. Bruton is going to look at changing the thresholds in the context of the Companies Bill, Irish Independent says. While the offer of a cheaper examinership process will be welcomed by small business organizations, creditors to these firms will greet the idea with some nervousness, Irish Independent notes. In most cases the senior secured creditors are banks and they may have to forgo some of the interest they are owed, while the principal they are owed is repaid via installments, Irish Independent states. Preferred creditors like the Revenue Commissioners are usually paid a substantial sum, but unsecured creditors usually receive very little, according to Irish Independent. ========= I T A L Y ========= SEAT PAGINE: Subordinated Bondholders Back Debt Restructuring ------------------------------------------------------------- Serena Ruffoni at Dow Jones Newswires reports that SEAT Pagine Gialle SpA obtained consent from 75% of its subordinated bondholders on its debt restructuring. According to Dow Jones, a person familiar with the situation said on Tuesday that it remains unclear if the company obtained the consent of all its bank lenders. A board meeting, in which the company will decide whether to pay a EUR52 million interest due on its EUR1.3 billion subordinated bond, is still taking place, Dow Jones discloses. SEAT PG said last week that the interest will be paid if 75% of subordinated holders and 100% of senior bank lenders signed the lock-up agreement, Dow Jones recounts. The lender consents required and partially achieved were on a lock-up agreement on the company's debt, its acceptance being an indication of creditors from creditors towards a consensual restructuring agreement, Dow Jones notes. Failure to pay by Nov. 30 will trigger a technical default and a likely credit event on the company's credit default swap, Dow Jones says. SEAT PG is seeking to obtain sufficient support on its restructuring from all stakeholders, Dow Jones states. As reported by the Troubled Company Reporter-Europe on Nov. 30, 2011, Bloomberg News related that credit-default swap traders have been unable to agree whether a failure-to-pay credit event occurred on contracts insuring Seat Pagine's debt. The swaps ruling will now be passed to an external review panel, the second such standoff since Determinations Committees of swaps traders were created in 2009 to make binding decisions for the market, Bloomberg said. About Seat Pagine Seat Pagine Gialle SpA (PG IM) -- http://www.seat.it/-- is an Italy-based company that operates multimedia platform for assisting in the development of business contacts between users and advertisers. It is active in the sector of multimedia profiled advertising, offering print-voice-online directories, products for the Internet and for satellite and ortophotometric navigation, and communication services such as one-to-one marketing. Its products include EuroPages, PgineBianche, Tuttocitta and EuroCompass, among others. Its activity is divided into four divisions: Directories Italia, operating through, Seat Pagine Gialle; Directories UK, through TDL Infomedia Ltd. and its subsidiary Thomson Directories Ltd.; Directory Assistance, through Telegate AG, Telegate Italia Srl, 11881 Nueva Informacion Telefonica SAU, Telegate 118 000 Sarl, Telegate Media AG and Prontoseat Srl, and Other Activitites division, through Consodata SpA, Cipi SpA, Europages SA, Wer liefert was GmbH and Katalog Yayin ve Tanitim Hizmetleri AS. * * * As reported by the Troubled Company Reporter-Europe on Nov. 4, 2011, Standard & Poor's Ratings Services lowered its long-term corporate credit rating on Italy-based international publisher of classified directories SEAT Pagine Gialle SpA to 'CC' from 'CCC+'. S&P said that the outlook is negative. ===================== N E T H E R L A N D S ===================== ORTHOFIX INT'L: S&P Withdraws 'BB-' Corporate Credit Rating ----------------------------------------------------------- Standard & Poor's Ratings Services withdrew its 'BB-' corporate credit rating on Curacao-based medical device producer Orthofix International N.V., at the company's request. =========== N O R W A Y =========== HUNSFOS FABRIKKER: To Go Into Liquidation ----------------------------------------- EUWID reports that Hunsfos Fabrikker AS is to be liquidated after search for an investor was unsuccessful. The news agency relates that over the past two months, the company's insolvency administrator Havard Wiker was in discussions with several interested parties but no agreement was reached. Mr. Wiker announced on November 24 that the company will go into liquidation, the report says. Production at the mill in Vennesla has been idle since September 22 this year when the commencement of the insolvency proceedings was announced, according to EUWID. Founded in 1886 and based in Vennesla, Norway, Hunsfos Fabrikker AS manufactures Machine Glazed (MG) Papers and other paper products in Europe. It offers fine paper, sulphite packaging paper, and wallpapers. Hunsfos Fabrikker AS operates as a subsidiary of Bavaria Industriekapital AG. =============== P O R T U G A L =============== LISBON AND PORTOS: Fitch Cuts Long-Term Currency Ratings to 'BB+' ----------------------------------------------------------------- Fitch Ratings has downgraded the Portuguese cities of Lisbon and Porto's Long-term foreign and local currency ratings to 'BB+' from 'BBB-' and the Short-term foreign currency rating to 'B' from 'F3'. The Rating Watch Negative (RWN) on the Long- and Short-term ratings has been removed. The Outlook is Negative. Fitch considers the financial and fiscal situation of the two cities to be stronger than its present rating levels and therefore the ratings remain constrained by that of the sovereign. According to 2010 final accounts, the City of Lisbon had an operating margin of 24.9%, while its debt represents 2.2 years of current balance and its direct risk 73.4% of its current revenue. With regard to the City of Porto, its operating margin was 21.7%, while its debt represented three years of current balance and its direct risk 70.8% of its current revenue. According to Fitch's criteria, Portuguese municipalities are not eligible to be rated above the ratings of the Republic of Portugal. =========== R U S S I A =========== MOBILE TELESYSTEMS: Fitch Affirms 'BB+' LT Foreign Currency IDR --------------------------------------------------------------- Fitch Ratings has revised Russia-based Mobile Telesystems' (MTS) Outlook to Stable from Positive. The Outlook revision reflects the negative influence of MTS's controlling shareholder, JSFC Sistema ('BB-'/Stable) -- the Outlook on the latter was changed to Stable from Positive. Under Fitch's parent-subsidiary methodology, there is a linkage between the ratings of these two companies. On a stand-alone basis, MTS's credit profile continues to conform to low investment- grade. The company holds strong and reasonably stable market shares in all its key mobile markets -- including, most importantly, Russia. Fitch believes that MTS will continue to successfully defend its positions and maintain broad parity with peers in terms of coverage, technology solutions, frequency portfolio, marketing and capex spend. Control over MGTS, a fixed-line incumbent in Moscow, provides MTS with strong leadership in the mass segment of this geographical market. However, key Russian and Ukrainian mobile markets are mature with competition rising. Russian headline mobile penetration exceeded 155% as of end-H111. Fitch expects competitive pressures to intensify further with the market-share ambitions of Tele2 and Rostelecom in the medium term. MTS sustainably generates positive free cash flow (FCF), and overall financial performance is robust although margins have been under pressure in 2011 and are unlikely to recover significantly. As noted, key markets are mature and therefore do not require excessive capex. However, capex as a percentage of revenue has been high -- at well above 20% -- and is unlikely to decrease abruptly, and will be inflated by 3G spend in Russia. As a result, Fitch expects that MTS's pre-dividend FCF margin will remain in the range of up to 10%. Fitch sees MTS's exposure to Sistema's group-wide risks, and the holding's flexibility to significantly increase MTS's leverage, if need be, as a significant credit constraint. There are no public leverage targets or restrictions on dividend payments that could hamper Sistema's ability to significantly increase the amount of dividends from MTS. MTS's leverage has been modest at below 1.5x net debt/EBITDA. It is likely to rise to the upper end of this range as a result of MTS's increasing its stake in MGTS and some other acquisitions by end-2011. Deleveraging is likely to be slow due to high dividend payments and only modest improvements in EBITDA generation. The ratings may benefit from changes in shareholding, corporate governance or legal provisions sufficient to create a strong ring fence around MTS to isolate it from Sistema's group-wide risks. A downgrade may arise from increased shareholder remuneration, MTS's acquisition of Sistema group's assets, or a build-up in pressures to upstream cash on the back of funding needs at the wider Sistema group - and a consequent rise in funds from operations adjusted net leverage to above 3x. Competitive weaknesses and market-share erosion, leading to significant deterioration in pre-dividend FCF generation, may also become a negative rating factor. MTS's debt maturity profile is well spread with single-year refinancing exposure not significantly exceeding US$1 billion per annum until end-2014 (as of end-2010). In addition to US$1.6 billion of cash and short-term investments as of end-Q311, the company has access to a number of committed credit lines that were reported at US$3.0 billion at end-2010. Currency risks are moderate with the foreign exchange share of the total debt portfolio reported at 22% at end-Q311. The rating actions are as follows: -- Long-term foreign currency IDR affirmed at 'BB+'; Outlook revised to Stable from Positive -- Short-term foreign currency IDR affirmed at 'B' -- Senior unsecured foreign currency rating affirmed at 'BB+' -- Long-term local currency IDR affirmed at 'BB+'; Outlook revised to Stable from Positive -- Short-term local currency IDR affirmed at 'B' -- Senior unsecured local currency rating affirmed at 'BB+' -- National Long-term rating affirmed at 'AA(rus)'; Outlook revised to Stable from Positive -- National senior unsecured rating affirmed at 'AA(rus)' MOSCOW BANK: Fitch Affirms Long-Term IDR at 'B+' ------------------------------------------------ Fitch Ratings has affirmed the Moscow Bank for Reconstruction and Development's (MBRD) and Dalcombank's (DCB) Long-term Issuer Default Ratings (IDRs) at 'B+', and revised the Outlooks on the banks to Stable from Positive. At the same time, the agency has downgraded MBRD's Viability Rating (VR) to 'b-' from 'b'. MBRD's and DCB's IDRs reflect the support they can expect to receive if needed from their majority shareholder, Sistema Joint Stock Financial Corp. (Sistema; 'BB-'). The Outlook revisions for MBRD and DCB follow the revision of the Outlook on Sistema to Stable from Positive. The future direction of the bank's IDRs will continue to depend on Sistema's Long-term IDR and Fitch's view of the parent's propensity to support the group's banks. In assessing Sistema's propensity to provide support, Fitch considered the track record of capital support in recent years, the significant reputational, political and market access risks which would be associated with a default of one of the group's banks, the relatively small size of the banks compared to the broader group (implying a moderate relative cost of any required support) and MBRD's still significant role in supporting the treasury function of the group. At the same time, Fitch also notes the banks' limited strategic fit with the rest of the group and their weak performance during recent years. The downgrade of MBRD's VR reflects the bank's continued operating losses (about 8% negative consolidated operating return on average equity for 9M11), still relatively high levels of non- performing assets, tighter liquidity and capital as a result of the recent rapid growth in lending, and uncertainty regarding its changing business model. Fitch also continues to express concern about the low transparency of the operations of MBRD's Luxemburg- based subsidiary, East-West United Bank (EWUB) which accounted for 30% of consolidated loans at end-H111, although a majority of the subsidiary's loans are cash-backed. At end-H111, MBRD's reported level of loans overdue by more than 90 days (NPLs) accounted for 11.9% of the bank's standalone loan book and an additional 2.6% of loans were restructured. The bank grew its stand-alone corporate loan book by 54% in 9M11 (adjusted for reverse repo). In Fitch's view, such rapid growth carries a risk of significant losses in the future, in particular given the bank's limited credit expertise and franchise outside Sistema's connections. MBRD has repeatedly stated its intentions to develop retail and SME, but with rather limited execution, to date. MBRD's consolidated Tier 1 capital ratio decreased to 13.9% at end-Q311 due to rapid loan expansion. Impairment reserves in end-H111 management IFRS accounts provided about 90% coverage of NPLs, but additional provisioning, and hence capital support, may be needed as the loan book seasons. EWUB is primarily engaged in extending cash-backed loans to foreign-domiciled entities. Fitch understands that such activities are mainly performed for regulatory purposes or tax considerations. The bank should not be taking on significant financial risks, as almost all loans are reportedly backed by pledged deposits, and EWUB does not seem to have other material business. However, reputational and regulatory risks could be high, should these operations come under the scrutiny of regulators. DCB's 'b-' VR reflects its moderate capital and liquidity cushions and relatively weak performance and recent rapid loan growth. However, the rating also considers the somewhat improved capital position after the equity injection made by Sistema in Q311. MBRD is a medium-sized Russian bank, 100% controlled by Sistema. Servicing shareholder's business needs remains an important part of MBRD's business. MBRD owns a 66% stake in EWUB and a 75.1% share of DCB, with the remaining 24.9% directly controlled by Sistema. On a stand-alone basis, MBRD was the 34th largest bank in the country by assets at end-Q311. DCB is a small bank operating in Russia's Far East. The bank primarily extends loans to SMEs and unsecured consumer financing for retail clients which results in high credit risk compared with its main competitors. The rating actions are as follows: MBRD -- Long-term IDR: affirmed at 'B+'; Outlook changed to Stable from Positive -- Short-term IDR: affirmed at 'B' -- Support Rating: affirmed at '4' -- Viability Rating: downgraded to 'b-' from 'b' -- Individual Rating: affirmed at 'D/E' -- National Long-term rating: affirmed at 'A-(rus)'; Outlook changed to Stable from Positive DCB -- Long-term IDR: affirmed at 'B+'; Outlook changed to Stable from Positive -- Short-term IDR: affirmed at 'B' -- Support Rating: affirmed at '4' -- Viability Rating: affirmed at 'b-' -- Individual Rating: affirmed at 'D/E' -- National Long-term rating: affirmed at 'A-(rus)'; Outlook changed to Stable from Positive SISTEMA JOINT: Fitch Affirms 'BB-' Senior Unsecured Ratings ----------------------------------------------------------- Fitch Ratings has revised Russia-based Sistema Joint Stock Financial Corp.'s Outlook to Stable from Positive. Sistema's Long-term foreign and local currency Issuer Default Ratings (IDR) have been affirmed at 'BB-' and its foreign and local currency senior unsecured ratings affirmed at 'BB-'. Sistema's National long-term rating has also been affirmed at 'A+(rus)' and assigned a Stable Outlook and its national senior unsecured rating affirmed at 'A+(rus)'. The guaranteed debt issuance program, which is up to US$3 billion, registered by Sistema Capital S.A. and guaranteed by Sistema was affirmed at 'BB-'. The Outlook revision primarily reflects Fitch's assessment that Sistema is unlikely to come up with a quick solution for its subsidiary SSTL (Shyam), a small niche CDMA operator in India. Organic development of this business requires considerable capex and would entail a substantial cash burn before it is turned EBITDA positive. Some debt at Shyam is already guaranteed by the holding company (holdco). Fitch believes that future funding efforts by Shyam are likely to require shareholder support increasing off-balance sheet liabilities recourse to the holdco. Sistema's ratings continue to be supported by strong operating and financial performance at its key subsidiaries, MTS ('BB+'/Oultook), a large Russian/CIS mobile operator, and Bashneft, a medium-size Russian oil and gas company. MTS's free cash flow (FCF) generation is strong supporting its ability to pay hefty dividends. MTS has low leverage, at 1.1x net debt/LTM EBITDA at end-Q311, and Sistema, as a controlling shareholder, retains the flexibility to increase leverage and squeeze additional dividends from this company without jeopardising its credit ratings. Bashneft is expected to continue paying high dividends, although this may be challenged by the high capex required to develop the new Trebs-Titov oil field. Bashneft is looking for partners to help fund this development, and although it is unlikely to fall short of finding willing participants in this project, this may happen on terms less favorable than currently envisaged by the holdco. Sistema's group-wide leverage was a moderate 1.7x net debt/EBITDA at end-Q211 but this is unevenly distributed between various segments. Weaker subsidiaries are much more leveraged than key ones, and there is a significant amount of debt at the holdco level. In addition to the holdco's headline debt, it guarantees some debt at its subsidiaries, most importantly at Shyam. Also, Sistema granted a number of put options to equity investors into some of its subsidiaries which effectively turn these equity investments into debt recourse to Sistema. These include arrangements with Rusnano for its cash contribution to the Sistema-Nano JV, the Russian Government's equity injection into Shyam and Sberbank's acquisition of a 25% stake in Detsky Mir. As a result, leverage as measured by the ratio of net debt including off-balance sheet obligations to normalized dividends is high and Fitch expects it to remain significantly above 2.5x, to a large part driven by continuing investments into Shyam. A rise in that ratio to above 4.3x on a sustained basis may lead to a downgrade. Sistema's liquidity is strong for its rating category, protecting it against short-term refinancing risks. Liquidity is comprised of cash on the balance sheet -- estimated by Fitch at US$357 million at end-Q211 and supported by dividends from MTS in Q311, and a number of committed bank credit lines. * MURMANSK REGION: Fitch Assigns 'BB/B' Currency Ratings -------------------------------------------------------- Fitch Ratings has assigned Russia's Murmansk Region a Long-term foreign and local currency rating of 'BB', a Short-term foreign currency rating of 'B' and a National Long-term rating of 'AA- (rus)'. The Outlooks for the Long-term ratings are Stable. The ratings reflect its sound budgetary performance, supported by its industrial tax base, moderate debt and strong liquidity. However the ratings also take into account the region's high tax concentration and the rigidity of its operating expenditure. Fitch notes that a consolidation of the region's sound operating performance in line with projections and maintenance of a safe debt coverage ratio in the medium term would be positive for the ratings. Conversely, downward rating pressure would arise from a sharp deterioration of its budgetary performance, due to a structural negative shock on the revenue side caused by a long period of low international prices for the region's major commodities. Murmansk's administration expects gross regional product (GRP) to continue moderate expansion in 2011-2013 by about 2% yoy. The region's economy recovered in 2010 after the economic downturn negatively affected the region in 2009. Fitch expects operating balance of close to 14% of operating revenue by end-2011 and about 14%-15% in 2012-2013. The region's operating margin improved to 13.6% in 2010 (2009: 3.6%) while its balance before debt variation turned positive with a RUB2.2bn surplus (2009: RUB3.2 billion deficit). The Murmansk Region is home to several large mining companies and its budget's tax concentration is significant with the aggregate contribution of the top 10 taxpayers at 56.2% of total tax revenue in 2010. Fitch expects the region's budget to remain rigid as the proportion of inflexible spending items is likely to be at about 76%-80% of total opex in 2011-2013 (2010: 80.4%). Fitch expects Murmansk's direct risk to decrease to about RUB5.1 billion, or a moderate 12% of current revenue, by end-2011 with further gradual decline to about 10% of current revenue in 2012- 2013. The region's debt stock is entirely composed of amortizing budget loans contracted from the federal government with maturities in 2012-2015. Contingent liabilities by end-Q311 were limited to its public companies' self-serviced debt. Fitch notes that strong liquidity might turn the region net cash positive by end-2011 as accumulated cash reserves increased up to RUB9.9bn in Q311. The Murmansk Region is located in the north-western part of European Russia. Its capital, the City of Murmansk, is 1,967 km away from Moscow. With a population of 0.837 million (0.6% of the national population) it contributed 0.6% of Russia's GRP in 2009. ========= S P A I N ========= BANCO DE VALENCIA: Banco Mare Nostrum Mulls Takeover Bid -------------------------------------------------------- Ben Sills at Bloomberg News, citing ABC newspaper, reports that Banco Mare Nostrum SA is preparing to bid for Banco de Valencia SA, the lender seized by Spain's bank bailout fund on Nov. 21. According to Bloomberg, the newspaper, citing people in the banking industry without naming them, said that BMN's offer will be dependent on an updated estimate of Banco de Valencia's losses, estimated at EUR600 million (US$797 million) at the end of March. As reported by the Troubled Company Reporter-Europe on Nov. 23, 2011, Bloomberg News related that Spain plans to inject as much as EUR1 billion (US$1.35 billion) of capital into Banco de Valencia SA. The Bank of Spain said in a statement on Nov. 21 that a state rescue fund, known as FROB, will administer the Valencia, Spain-based lender and provide it with a EUR2 billion credit line, Bloomberg disclosed. The regulator said that the central bank removed the administrators of Banco de Valencia at the request of the lender's board, according to Bloomberg. The Bank of Spain, as cited by Bloomberg, said that it decided to remove Banco de Valencia's managers after determining that "it had not been able to adopt the measures necessary to assure its viability" and having written to the bank demanding an "urgent and definitive solution for its situation." Banco de Valencia, which has EUR24 billion of assets, said in November it was under inspection by the Bank of Spain and would need more capital, Bloomberg noted. Banco de Valencia is 27% owned by Banco Financiero y de Ahorros SA, the holding company that controls Bankia, Spain's third- biggest bank. SANTANDER HIPOTECARIO: Fitch Affirms C Rating on Class F Tranche ---------------------------------------------------------------- Fitch Ratings has affirmed all eight tranches of Santander Hipotecario 3, FTA and removed the Rating Watch Negative from all tranches rated above 'CCCsf', as follows: -- Class A1 (ISIN ES0338093000) affirmed at 'BBsf'; off RWN; Stable Outlook assigned -- Class A2 (ISIN ES0338093018) affirmed at 'BBsf'; off RWN; Stable Outlook assigned -- Class A3 (ISIN ES0338093026) affirmed at 'BBsf'; off RWN; Stable Outlook assigned -- Class B (ISIN ES0338093034) affirmed at 'Bsf'; off RWN; Stable Outlook assigned -- Class C (ISIN ES0338093042) affirmed at 'CCCsf'; Recovery Estimate 50% -- Class D (ISIN ES0338093059) affirmed at 'CCsf'; Recovery Estimate 0% -- Class E (ISIN ES0338093067) affirmed at 'CCsf'; Recovery Estimate 0% -- Class F (ISIN ES0338093075) affirmed at 'Csf'; Recovery Estimate 0% The notes were placed on Rating Watch Negative on 31 May 2011 due to concerns over the level of recoveries associated with defaulted loans. The agency confirms that it has received the information on properties that have undergone foreclosure procedures, as well as loans that are currently in the process of foreclosure. Fitch understands that the properties that are currently on the balance sheet of the special purpose vehicle (SPV) are taken to auction and that in most cases the only bidder is Banco Santander ('AA-'/Negative/'F1+'). The data implies that most of the assets were sold at discounts of over 40% to initial valuation, in line with Fitch's assumptions at the time of the last rating action. For this reason the agency has affirmed the current ratings and removed the RWN. The announcement of the liquidation of Santander Hipotecario 4 by Santander Titulizacion triggered concerns that, under the transaction documentation, management companies (gestoras) have the ability to liquidate securitizations without the consent of noteholders. Fitch understands that the notes of Santander Hipotecaria 4 were called due to an imbalance between the assets and the liabilities, which in the view of the gestora, was not reversible. There are a number of Spanish transactions with similarly significant outstanding technical principal deficiencies, creating the circumstances for those SPVs to also be liquidated. Such actions may, however, leave the gestoras exposed to legal actions by the noteholders, since permanent imbalances are subject to interpretation and so such liquidations are likely to remain limited to cases where the originator is the sole holder of the notes. Based on the current circumstances, Fitch has not factored the potential liquidation of Santander Hipotecario 3 into its ratings analysis. =========== T U R K E Y =========== T.C. ZIRAAT: Fitch Affirms LT Foreign Currency IDR at 'BB+' ----------------------------------------------------------- Fitch Ratings has revised the Outlook to Stable from Positive on the Long-term (LT) foreign currency (FC) and local currency (LC) Issuer Default Ratings (IDRs) of 15 Turkish banks and financial institutions. This follows similar action taken on the LT FC and LT LC IDRs of the Republic of Turkey announced on 24 November 2011. The IDRs and Outlooks of T. C. Ziraat Bankasi A.S., Turkiye Halk Bankasi A.S., Turkiye Vakiflar Bankasi T.A.O. and Turkiye Kalkinma Bankasi A.S. are equalised with those of the Turkish sovereign, reflecting the fact that the banks are state-owned or state-controlled. The IDRs of Yapi ve Kredi Bankasi A.S. (Yapi Kredi), Turk Ekonomi Bankasi A.S. (TEB) and Denizbank A.S. incorporate potential support from more highly-rated foreign shareholders, namely Unicredit S.p.A. ('A' Rating Watch Negative(RWN)), BNP Paribas ('AA-'/RWN) and Dexia ('A+'/Stable). The RWN on Denizbank's 'BBB' Long-term local currency IDR reflects the potential for this rating to be downgraded if Dexia sells the bank to a lowly- rated new owner. However, any downgrade is likely to be limited to one notch, to the level of the bank's 'bbb-' Viability Rating (VR). The IDRs of Turkiye Is Bankasi A.S. (Isbank), Turkiye Garanti Bankasi A.S. (Garanti) and Akbank T.A.S. (Akbank) are driven by their standalone financial strength, reflected in their 'bbb-' VRs. Isbank, Garanti and Akbank are leading private sector Turkish banks. Together, they control a domestic market share of around 38%. Isbank has traditionally been the largest amongst its peers and this continues to be the case, in terms of assets, equity and branch network size. Akbank's asset quality and capital ratios continue to be the strongest amongst its peers, while Garanti displays the highest profitability ratios. Given the banks' strong position in the local banking sector, Fitch expects them to benefit from the opportunities arising from medium-term growth in Turkey's economy. Fitch's base case is that GDP growth will slow to 2.2% in 2012 before returning to 4.5% in 2013, close to potential. However, Turkey's operating environment remains volatile and this has the potential to impact the banking sector's performance. Given the close correlation between the performance of the banking sector and the operating environment, there is limited potential for the banks' Long-term IDRs to be revised upwards without similar action being taken on Turkey's sovereign ratings. Turkey's banking sector is well capitalized, profitable, liquid, and moderate in size in relation to GDP. Non-performing loans are low, the loan/deposit ratio is 99.5% and there is minimal foreign currency lending to households. However, loan growth in the sector has been rapid, up 25% in 9M11 and 32% in 2010. Isbank, Gartanti and Akbank are all expanding lending, particularly to the high margin retail and SME segments. Net interest margins are being compressed, reflecting competition, increased reserve requirements on deposits and the prevailing low interest rate environment in Turkey. Margins for the three banks have tumbled to an average of 2.4% in H111 from 4.2% in 2010. Retail deposit growth has slowed in the sector but Isbank, Garanti and Akbank remain largely funded by retail deposits, displaying loans/deposits ratios of around 100%. The three banks remain well capitalised. The Fitch core capital/weighted risks ratios of these banks (Isbank: 14.51%, Garanti 15.36% and Akbank: 16.83%) at H111 allsupport future growth. All three banks' asset quality indicators are robust. Impaired loan ratios for all three banks are below the 2.9% sector average at end-June 2011 (Isbank: 2.6%, Garanti 2.1% and Akbank 1.7%). Including general and specific impairment reserves, coverage is well in excess of 100% for all three banks Fitch believes the three banks are well placed to deal with the challenges faced by the sector. Management is versatile and efforts to reprice loans are already resulting in a gradual improvement in margins. The continued opening of branches should boost deposit inflow and the ability of some banks to tap the international capital markets for, albeit modest, amounts of medium-term funding is providing funding diversification. Liquidity ratios are sound, supported by well-diversified and stable retail deposit bases and large portfolios of Turkish government securities, which are repoable with the Turkish Central Bank. Fitch has a high opinion of Turkey's bank regulators, which have been proactive and are proving efficient in ensuring that the country's banking sector remains robust. The IDRs and National ratings of certain subsidiaries of Isbank, Garanti and Akbank are equalized with those of their parents, reflecting close integration and strategic importance. Turkiye Sinai Kalkinma Bankasi A.S. (TSKB) is strategically important to Isbank which holds a 50.1% stake in the bank. TSKB's ratings reflect the support it could expect to receive from Isbank, if required. Rating actions are as follows: T. C. Ziraat Bankasi A.S., Turkiye Halk Bankasi A.S., Turkiye Vakiflar Bankasi T.A.O., Turkiye Kalkinma Bankasi A.S.: -- Long-term foreign currency (LTFC) IDR: affirmed at 'BB+'; Outlook revised to Stable from Positive -- Long-term local currency (LTLC) IDR: affirmed at 'BB+'; Outlook revised to Stable from Positive -- Short-term (ST) FC and LC IDR: affirmed at 'B' -- Support Rating: affirmed at '3' -- Support Rating Floor: affirmed at 'BB+' -- National Long-term Rating: affirmed at 'AA+(tur)'; Outlook Stable -- Viability Rating: 'bb+' unaffected -- Individual rating: 'C/D' unaffected Denizbank A.S. -- LTFC IDR: affirmed at 'BBB-'; Outlook revised to Stable from Positive -- LTLC IDR: 'BBB', RW changed to Negative from Evolving -- ST FC and LC IDR: affirmed at 'F3' -- Support Rating: '2', maintained on RWN -- National Long-term Rating: affirmed at 'AAA(tur)'; Outlook Stable Yapi ve Kredi Bankasi A.S. (Yapi Kredi), Turk Ekonomi Bankasi A.S. (TEB): -- LTFC IDR: affirmed at 'BBB-'; Outlook revised to Stable from Positive -- LTLC IDR: affirmed at 'BBB' Outlook revised to Stable from Positive -- ST FC and LC IDR: affirmed at 'F3' -- Support Rating: affirmed at '2' -- National Long-term Rating: affirmed at 'AAA(tur)'; Outlook Stable The Viability Ratings and Individual Ratings of Denizbank, Yapi Kredi and TEB, listed below, are unaffected. Yapi ve Kredi Bankasi A.S. and Denizbank A.S. -- Viability Rating: 'bbb-' unaffected -- Individual Rating: 'C' unaffected Turk Ekonomi Bankasi A.S. -- Viability Rating: 'bb+' unaffected -- Individual Rating: 'C/D' unaffected TEB's subordinated debt issue rated by Fitch is affirmed at BBB-. Turkiye Is Bankasi A.S., Turkiye Garanti Bankasi A.S., Akbank T.A.S.: -- LTFC IDR: affirmed at 'BBB-'; Outlook revised to Stable from Positive -- LTLC IDR: affirmed at 'BBB-'; Outlook revised to Stable from Positive -- ST FC and LC IDR: affirmed at 'F3' -- Viability Rating: affirmed at 'bbb-' -- Individual Rating: affirmed at 'C' -- Support Rating: affirmed at '3' -- Support Rating Floor: affirmed at 'BB' -- National Long-term Rating: affirmed at 'AAA(tur)'; Outlook Stable -- Senior unsecured debt: affirmed at 'BBB-' Turkiye Sinai Kalkinma Bankasi A.S. -- Long-term foreign and local currency IDR: affirmed at 'BB+'; Outlook Revised to Stable from Positive -- Short-term foreign currency and local currency IDR: affirmed at 'B' -- National Long-term rating: affirmed at 'AA+(tur)' Outlook Stable -- Support Rating: affirmed at '3' -- Individual Rating: 'C/D' unaffected Is Yatirim Menkul Degerler A.S. -- National Long-term rating: affirmed at 'AAA(tur)' Outlook Stable Is Finansal Kiralama A.S. -- Long-term foreign and local currency IDR: affirmed at 'BBB-' -- Outlook Revised to Stable from Positive -- Short-term foreign currency and local currency IDR: affirmed at 'F3' -- National Long-term rating: affirmed at 'AAA(tur)'; Outlook Stable -- Support Rating: affirmed at '2' Garanti Finansal Kiralama A.S. -- Long-term foreign and local currency IDR: affirmed at BBB- -- Outlook Revised to Stable from Positive -- Short-term foreign currency and local currency IDR: affirmed at 'F3' -- National Long-term rating: affirmed at 'AAA(tur)'; Outlook Stable -- Support Rating: affirmed at '2' Ak Finansal Kiralama A.S. -- Long-term foreign and local currency IDR: affirmed at BBB- -- Outlook Revised to Stable from Positive -- Short-term foreign currency and local currency IDR: affirmed at 'F3' -- National Long-term rating: affirmed at 'AAA(tur)'; Outlook Stable -- Support Rating: affirmed at '2' =========================== U N I T E D K I N G D O M =========================== AUSTIN-SMITH:LORD: Creditors Extend CVA Deadline to December 2 -------------------------------------------------------------- Neil Hodgson at Liverpool Daily Post reports that architect Austin-Smith:Lord (ASL) has won a reprieve in its battle for survival, after creditors agreed an extension to a deadline for its proposal for a company voluntary arrangement (CVA). The group, which has a city base at the Port of Liverpool Building, had until Monday to reach a deal with creditors to avoid insolvency proceedings, Liverpool Daily Post discloses. But the deadline has been moved to this Friday, December 2, after ASL received a proposal of interest from a third party to assist with funding and future work, Liverpool Daily Post notes. ASL appealed to creditor last month to consider a CVA, after payments worth GBP11.3 million from an Abu Dhabi client dried up, Liverpool Daily Post recounts. "We are giving the received proposal serious consideration and assessing the merits of the offer for the practice, the project and our creditors," Liverpool Daily Post quotes ASL partner Neil Chapman as saying. Mr. Chapman, as cited by Liverpool Daily Post, said 24 jobs split between ASL's Liverpool and Manchester offices have been unaffected by the fall-out from the Abu Dhabi contract, adding: "We have had tremendous support from all our creditors." Austin-Smith:Lord is an architectural firm. CONSOLIDATED MINERAL: Moody's Reviews 'B2' CFR for Downgrade ------------------------------------------------------------ Moody's Investors Service has placed the B2 corporate family rating and bond rating of Consolidated Minerals under review for possible downgrade. Ratings Rationale The agency's decision to initiate a review for downgrade follows Consmin's weaker than expected financial performance in 2011, which Moody's expects to continue over the coming quarters given protracted manganese price weakness and deteriorating market fundamentals. In particular, Moody's is concerned about the company's ability to adequately manage a further deterioration in manganese prices and/or unfavorable foreign exchange rate movements given limited commodity and geographic diversification, relatively high cash cost structure (especially in Australia), and limited short term opportunities to reduce costs -- partially offset by a strong liquidity position. The agency has placed the ratings under review for downgrade whilst it monitors the evolution in manganese pricing, and expects to gain a clearer picture of the credit profile of the group following management's confirmation of the 2012 budget -- due in the coming quarter. Moody's will also pay particular attention to the liquidity position of the group whilst the rating is under review, and closely monitor the renewal of the Australian working capital facilities. Moody's highlights that announced cost-saving measures, such as switching to an owner-operator model, will require significant capex investment in 2012 -- potentially leading to negative free cash flows -- and will not yield any major cost saving benefits until 2013. At the same time, the agency is concerned that such measures may be insufficient to mitigate the negative fundamental trends which continue to affect the manganese market. In particular, the rating agency does not foresee any major catalyst for a reversal of the weak manganese pricing environment given overcapacity issues, rising port inventories in China, strong price competition from peers, and a weakening outlook for steel. Positively however, liquidity at Consmin remains strong, with no major scheduled debt repayments until 2016 (other than the 12- month bank facilities), US$206 million of cash on the balance sheet as of September 2011, and access to c. US$49 million of availability under existing working capital facilities. Moody's notes however that working capital facilities are only short- term, 12-month lines of credit - with the Ghanaian facilities maturing between October and December 2012, and Australian facilities (still in the process of being renewed) due to mature in January 2012. The agency also notes that, in addition to the high proportion of related party transactions (negotiated and priced on an arms-length basis but still accounting for 25% of revenue), Consmin holds a material proportion of its available cash at shareholder controlled entities (notably Privat Bank, where US$66 million was held in September 2011). Additional positive features recognized by Moody's include Consmin's: (i) access to high grade manganese reserves in Australia, and more specialty carbonate ore in Ghana (which is especially desirable for electrolytic manganese metal producers; (ii) successful track record of increasing reserve life at its Australian operations, with reserve life increased to circa 6 years (from 5 years) in September 2011 - albeit reserve life remains very thin compared to peers across the mining sector; and (iii) relatively conservative balance sheet structure. Further negative pressure on the rating would be triggered by: (i) a material weakening in the liquidity position of the company; (ii) a deterioration in the group's operating cash flow generation leading to sustained negative free cash flows and a (CFO-dividends)/Debt ratio significantly below 10%; and (iii) further weakening of manganese market pricing leading to EBITDA margin sustainably below 15%. While upward rating pressure is unlikely in the short term, positive pressure could be applied should Consmin: (i) further extend reserve life in Australia; (ii) improve its cost structure on a sustainable basis; (iii) diversify its metals offering; (iv) demonstrate a prolonged track record of operating performance with reported Gross debt/EBITDA below 2.5x; and (v) maintain a conservative financial and dividend policy with a (CFO- dividends)/Debt ratio sustainably above 10%. The principal methodology used in rating Consolidated Minerals was the Global Mining Industry Methodology published in May 2009. Consolidated Minerals, headquartered in Jersey is a leading producer of manganese ore. Mining operations are carried out from Australia (Woodie Woodie mine) and from Ghana (Nsuta mine). The group also mines chromite ore at its Coobina mine in Australia. Consolidated Minerals was formed through the acquisition of CMPL in 2007/08 for a total consideration of US$1.1 billion and subsequently combined with Ghana International Manganese Corporation. Consolidated Minerals is wholly owned by Gennady Bogolyubov, an Ukrainian citizen. In 2010, Consolidated Minerals reported sales of US$640 million. CONVERS SPORTS: In Administration, Football Club Chairman Resigns ----------------------------------------------------------------- Graeme Bailey at SkySports reports that Convers Sports Initiatives has been placed into administration with its owner Vladimir Antonov resigning as chairman and director of Portsmouth Football Club with immediate effect. CSI only took control of Pompey on June 1, but now the club is again facing a far from certain future, according to SkySports. As reported in Troubled Company Reporter-Europe on March 1, 2010, Bloomberg News said that Portsmouth Football went into administration after U.K. authorities tried to force its closure over unpaid taxes. UHY Hacker Young Michael Kiely, Peter Kubik and Andrew Andronikou were appointed joint administrators to the company and the football club. SkySports notes that CSI has been placed into administration due to the investigation of Mr. Antonov, who is accused of asset stripping at Bankas Snoras, and he is now under arrest and subject to extradition proceedings. TCR-EUR on Nov. 25, 2011, citing BBC News, reported that a Europe-wide arrest warrant has been issued for Mr. Antonov because Lithuanian prosecutors want to question him as part of an investigation into alleged asset stripping at Bankas Snoras AB. The prosecutors are also seeking his business partner Raimondas Baranauskas since both are former managers and shareholders of the bank and deny any wrongdoing, according to BBC News. The football club issued a statement stating: " . . . . as a result of issues relating to Vladimir Antonov and Snoras Bank: Portsmouth Football Club (2010) Limited - the company that operates PFC is not in administration and continues to trade. The club has funding in place for the short term, but will now be seeking alternative investment for its longer-term requirements." Peter Kubik and Andrew Andronikou of UHY Hacker Young are appointed as administrators. The administrators can be reached at: Peter Kubik Andrew Andronikou UHY HACKER YOUNG Quadrant House 4 Thomas More Square London, E1W 1YW Tel: 020 7216 4600 Fax: 020 7767 2600 E-mail: p.kubik@uhy-uk.com a.andronikou@uhy-uk.com About Portsmouth Football Portsmouth Football Club Ltd. -- http://www.portsmouthfc.co.uk/ -- operated Portsmouth FC, a professional soccer team that plays in the English Premier League. Established in 1898, the club boasted two FA Cups, its last in 2008, and two first division championships. Portsmouth FC's home ground is at Fratton Park; the football team is known to supporters as Pompey. Dubai businessman Sulaiman Al-Fahim purchased the club from Alexandre Gaydamak in 2009. A French businessman of Russian decent, Gaydamak had controlled Portsmouth Football Club since 2006. DECO 6: Fitch Affirms 'CCsf' Rating on GBP24.1-Mil. Class D Notes ----------------------------------------------------------------- Fitch Ratings has downgraded DECO 6 - UK Large Loan 2 plc's class A2 and class B note classes as follows: -- GBP174.3m class A2 due July 2017 (XS0235683223) downgraded to 'BBBsf' from 'Asf'; Outlook Negative -- GBP34.4m class B due July 2017 (XS0235683736) downgraded to 'BBsf' from 'BBBsf'; Outlook Negative -- GBP39.3m class C due July 2017 (XS0235684114) affirmed at 'CCCsf'; calculated Recovery Estimates (RE) 10% -- GBP24.1m class D due July 2017 (XS0235684544) affirmed at 'CCsf'; calculated RE 0% The downgrades are driven by the continued deterioration in performance of the Mapeley loan, which is secured over an aging portfolio of 20 primarily public sector-occupied properties. This portfolio is highly exposed to rising vacancy, and although this has always featured in rating analysis, conditions are continuing to weaken. The Delta Point (Croydon) property, which accounted for almost 28% of the portfolio's passing rent, is now fully vacant, joining another two assets in this category. Another asset is 72% vacant. In Fitch's view, there is a growing risk of prolonged falls in income, with the potential for structural vacancy to increase, and greater capital expenditure and void periods to secure new income. Given that 50% of rental income is currently let to the Secretary of the State and 16% let to City of Edinburgh Council, forthcoming Government spending cuts may encourage non-renewals upon lease expiries. The loan was transferred to special servicing in October 2011 following the interest coverage ratio (ICR) falling below the covenanted 1.15x (and down to 0.99x currently). The Negative Outlooks are primarily driven by these concerns. The Brunel Shopping Centre loan was also transferred to special servicing in June 2011. The operating advisor initiated a replacement of the special servicer with Solutus Advisors Ltd on 14 September 2011. Driven by the secondary quality and location of the asset, as well as an expectation that retail sales are likely to be depressed for the foreseeable future, Fitch estimates a loan to value ratio (LTV) of 140%, in excess of the reported LTV 116% (off an October 2011 valuation). In October 2011, the St Enoch Shopping Centre loan prepaid, six months prior to its maturity. The GBP95 million of loan proceeds were allocated on a fully sequential basis, with the result that the class A1 notes were paid in full, in addition to some 16% of the class A2 notes being repaid. EUROPEAN PRIME: Fitch Affirms GBP1-Mil. Class D Notes at 'Dsf' -------------------------------------------------------------- Fitch has upgraded and affirmed European Prime Real Estate No. 1 plc's notes as follows: -- GBP114.7m Class A (XS0225549301) affirmed at 'AAsf'; Outlook revised to Stable from Negative -- GBP10.2m Class B (XS0225549566) upgraded to 'Asf' from 'BBBsf'; Outlook Stable -- GBP15.1m Class C (XS0225549723) upgraded to 'Asf' from 'CCCsf'; Outlook Stable -- GBP1m Class D (XS0225550143) affirmed at 'Dsf'; Recovery Estimate RE 100% The rating action reflects the high quality of the sole remaining loan in the pool following the repayment of the GBP95 million St. Enoch Shopping Centre loan in October 2011. The remaining GBP141 million Lloyds Building loan is backed by a grade A office property located in the City of London. The asset is fully let to Society of Lloyd's ('A'/Stable) with a remaining lease term of 9.4 years. The loan maturity is in April 2012. The reported loan-to-value ratio (LTV) is low at 61%, based on a 2004 valuation. Fitch estimates the current LTV to be slightly higher, at 71%. Given the high quality of the asset securing the loan, its strong cash-flow and low leverage, Fitch considers the borrower's refinancing prospects to be strong, as reflected in the rating action. The Class D notes' rating is maintained. The notes are not accruing interest on a written-down amount of GBP8.5m, reflecting losses realized to date on three loans. The recovery estimate of 100% is based on the expected recovery of principal not already written-down once the Lloyds Building loan repays. HAMKORBANK: Moody's Assigns 'E+' Bank Financial Strength Rating --------------------------------------------------------------- Moody's Investors Service has assigned these global-scale ratings to Hamkorbank (HB): - E+ standalone bank financial strength rating (BFSR), mapping to B1 on the long-term scale; - B1 long-term and Not Prime short-term local-currency deposit ratings; and - B2 long-term and Not Prime short-term foreign-currency deposit ratings. All ratings carry a stable outlook. Moody's assessment is primarily based on HB's IFRS financial statements for 2010 (audited) and local GAAP financial statements for H1 2011 (unaudited). Ratings Rationale According to Moody's, HB's ratings are constrained by (i) the volatile operating environment in Uzbekistan; (ii) the bank's low overall visibility in the market, with market shares of 2%-3% in total assets and customer deposits; and (iii) HB's increased appetite for holding non-core banking assets -- investment property accounted for close to 20% of Tier 1 equity as of June 1, 2011. At the same time, the ratings reflect (i) the bank's adequate corporate governance and risk culture, which is supported by the involvement of the International Finance Corporation (a 15% stakeholder) in the bank's Supervisory Board as well as its Strategy and Risk Committees; (ii) its niche franchise in SME lending and money transfer business, especially in the City of Andizhan in the Region of Fergana; (iii) the granular nature of the bank's credit risk, with its top-20 borrowers accounting for less than 100% of Tier 1 Capital as of January 1, 2011. The rating also reflects its healthy financial metrics, including its robust profitability (2010: return on average assets of 4% and return on equity of 30.5%), solid capital adequacy (2010: total CAR of 15.8%) and good asset quality, with non-performing assets accounting for less than 5% of gross loans as of 31 December 2010. HB's B1 local and foreign-currency deposit ratings do not incorporate any systemic support and are based solely on the bank's B1 standalone credit strength. According to Moody's, improving corporate and retail franchise reflected in growing market shares, together with the maintenance of healthy financial metrics as well as the granularity of the loan book could lead to an upgrade of the bank's BFSR and thus deposit rating in the longer term. Conversely, a deterioration in asset quality, profitability and capital adequacy as well as further increase in non-core assets could result in a downgrade in the bank's deposit ratings. Principal Methodologies The methodologies used in this rating were Bank Financial Strength Ratings: Global Methodology published in February 2007, and Incorporation of Joint-Default Analysis into Moody's Bank Ratings: A Refined Methodology published in March 2007. Headquartered in Andizhan, Uzbekistan, HB reported unaudited local GAAP total assets of UZS463 billion (US$266 million) as of June 30 and net income of UZS8.5 billion (US$5 million) for the six months then ended. PARAMOUNT: Cafe Fish Buys Livebait Out of Administration -------------------------------------------------------- Emma Eversham at Big Hospitality reports that Cafe Fish restaurant owner, Richard Muir, has acquired Manchester-based Livebait from its parent, Paramount Restaurant, which went into administration. Livebait is the first to be acquired under Mr. Muir's new company SBG Restaurant that he has set up with ex-Paramount Executive Chairman William Rollason, according to Big Hospitality. The report notes that four Livebaits were left being run by administrators. Big Hospitality notes that Paramount Restaurant's eight Chez Gerard sites were immediately bought by Raymond Blanc's Brassiere Bar Co. The report says that staff employed at Livebait, including General Manager Ellen O'Donnel will remain, while former Yachts of Seabourn Executive Chef de Cousime Dave Spanner will join to oversee the kitchen and re-launch a new menu. As reported in the Troubled Company Reporter-Europe on Nov. 29, 2011, Big Hospitality, citing M&C News, said that Paramount Restaurants has been placed into administration around the same time that the company exchanged on the sale of its eight Chez Gerard sites chain to Brasserie Blance. Deloitte, which was hired by the company in August to advise it on its future options, is believed to have been appointed as administrators, according to Big Hospitality. The report noted that the sale of the Chez Gerard sites leaves Paramount with 18 Brasserie Gerards, four Livebaits and three Bertorellis. Big Hospitality disclosed that deals are progressing on a number of the sites, which will continue to trade up to and over Christmas. Paramount Restaurants is the operator of the Brasserie Gerard and Bertorelli brands. SAAB GB: Goes Into Administration in London for Legal Protection ---------------------------------------------------------------- Swedish Automobile N.V. and Saab Automobile AB said that Saab Great Britain Ltd filed for administration with the High Court in London. Saab GB said that following months of intensive negotiations and a long period of suspended production and tight liquidity situation at Saab Automobile AB, a voluntary decision has been taken to place the company into administration. With immediate effect, David Dunckley and Daniel Taylor of Grant Thornton UK LLP have been appointed joint administrators of Saab GB. The board of Saab GB is of the opinion that administration gives the company and creditors the necessary legal protection until the required funding for the company has been secured. The appointment of the administrator is effected by the directors of Saab GB. Once appointed, the administrator will take on the management powers of the directors. Swan received a conditional funding commitment from Youngman for the payment of the wages of the employees of Saab Automobile and for the continuation of the activities of Saab GB. Saab Automobile and Saab GB have not yet received this funding. Swan continues discussions with potential investors regarding the sale of Saab Automobile AB and Saab Great Britain Limited. The administrators can be reached at: David Dunckley Daniel Taylor GRANT THORTON UK LLP London, Finsbury Square 30 Finsbury Square London EC2P 2YU Tel: +44 (0)20 7383 5100 Fax: +44 (0)20 7184 4301 E-mail: david.dunckley@uk.gt.com Daniel.taylor@ uk.gt.com Saab GB, a 100% subsidiary of Swedish Automobile N.V., has exclusive rights to distribute Saab cars and parts in the UK. It employs 55 people in Milton Keynes and distributes the cars and parts to a 58 strong dealer network across the UK of which 20 are "Saab only" sites. Saab City, a wholly owned subsidiary of Saab GB employing 65 people, operates two Saab motor dealerships, one in Wapping and a smaller site in Fulham. =============== X X X X X X X X =============== * EUROPE: Ailing Banks' Short-Term Creditors May Face Losses ------------------------------------------------------------ Jim Brunsden and Ben Moshinsky at Bloomberg News report that short-term creditors of failing European banks would face losses as a last resort under draft plans from the European Union to allow cross-border lenders to fail without the need for a taxpayer bailout. Regulators should only write down debt of a less than one-year maturity or derivatives if losses from longer-term debt aren't "sufficient to restore the capital of the institution and enable it to operate as a going concern," according to a draft European Commission proposal obtained by Bloomberg News. EU Financial Services Commissioner Michel Barnier had delayed proposing the law, which was originally scheduled to be released in September, because of market turbulence, Bloomberg notes. According to Bloomberg, under the draft proposals, the EU plan would help "maintain the supply of liquidity and minimize the negative externalities on the interbank market and derivatives market" in the event of the collapse of a bank. Banks would have to pay into national funds to help cover the costs of bank failure, under the measures, Bloomberg says. Bloomberg notes that these funds should have financing equivalent to the higher of 1.5% of deposits that are guaranteed by law or 0.3% of banks' liabilities other than "own funds of the institutions." The draft says that the euro area's bail-out fund, the European Financial Stability Facility, could be used to top up these funds in exceptional circumstances, Bloomberg discloses. Banks will have to hold minimum amounts of longer-term funding to prevent them from exploiting the commission's plan to shield short-term debt from writedowns, Bloomberg states. According to Bloomberg, the document says that lenders should be forced at all times to hold funding "with an original maturity of at least one year" equivalent to a minimum of 10% of their liabilities. The draft proposal exempts secured liabilities, as well as so- called repos and other liabilities secured by collateral, from the debt-writedown measures, Bloomberg notes. According to the draft, bonuses aren't protected under the plan and may be clawed back to shore up bank capital, Bloomberg discloses. The proposals also include requirements for banks to draw up so- called living wills showing how they could be wound down if they fail, Bloomberg states. * EUROPE: Euro Finance Ministers Agree to Boost Bailout Fund ------------------------------------------------------------ Gregory Viscusi and Josiane Kremer at Bloomberg News report that euro-area finance ministers approved enhancements to their bailout fund while backing off setting a target for how much firepower they plan to muster to stem a growing debt crisis. After a series of stop-gap accords failed to protect Italy and Spain from widening bond yield, the ministers met in Brussels under growing pressure from U.S. leaders and financial markets to find ways to boost the European Financial Stability Facility's effectiveness, Bloomberg relates. According to Bloomberg, they agreed to create certificates that could guarantee up to 30% of new issues from troubled euro-area governments and to create investment vehicles that would boost the EFSF's firepower to intervene in primary and secondary bond markets. EFSF Chief Executive Officer Klaus Regling, as cited by Bloomberg, said that the bond certificates could be up and running next month, while the investment vehicles could be operational in January. * Upcoming Meetings, Conferences and Seminars --------------------------------------------- Dec. 1-3, 2011 AMERICAN BANKRUPTCY INSTITUTE 23rd Annual Winter Leadership Conference La Quinta Resort & Spa, La Quinta, Calif. Contact: 1-703-739-0800; http://www.abiworld.org/ April 3-5, 2012 TURNAROUND MANAGEMENT ASSOCIATION TMA Spring Conference Grand Hyatt Atlanta, Atlanta, Ga. Contact: http://www.turnaround.org/ Apr. 19-22, 2012 AMERICAN BANKRUPTCY INSTITUTE Annual Spring Meeting Gaylord National Resort & Convention Center, National Harbor, Md. Contact: 1-703-739-0800; http://www.abiworld.org/ July 14-17, 2012 AMERICAN BANKRUPTCY INSTITUTE Southeast Bankruptcy Workshop The Ritz-Carlton Amelia Island, Amelia Island, Fla. Contact: 1-703-739-0800; http://www.abiworld.org/ Aug. 2-4, 2012 AMERICAN BANKRUPTCY INSTITUTE Mid-Atlantic Bankruptcy Workshop Hyatt Regency Chesapeake Bay, Cambridge, Md. Contact: 1-703-739-0800; http://www.abiworld.org/ November 1-3, 2012 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Westin Copley Place, Boston, Mass. Contact: http://www.turnaround.org/ Nov. 29 - Dec. 2, 2012 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference JW Marriott Starr Pass Resort & Spa, Tucson, Ariz. Contact: 1-703-739-0800; http://www.abiworld.org/ April 10-12, 2013 TURNAROUND MANAGEMENT ASSOCIATION TMA Spring Conference JW Marriott Chicago, Chicago, Ill. Contact: http://www.turnaround.org/ October 3-5, 2013 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott Wardman Park, Washington, D.C. Contact: http://www.turnaround.org/ ********* 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, 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 * * *