/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/111209.mbx T R O U B L E D C O M P A N Y R E P O R T E R E U R O P E Friday, December 9, 2011, Vol. 12, No. 244 Headlines G R E E C E GLITNIR BANK: Former Executives Released From Custody in Probe * GREECE: Standard & Poor's Reviews 'CCC' Ratings on Four Banks H U N G A R Y MALEV HUNGARIAN: Government Explores Rescue Options I C E L A N D LANDSBANKI ISLANDS: Makes First Payment on Icesave Claims I R E L A N D SILK ROAD: S&P Puts 'B-' Rating on Class C1-J Notes on Watch Pos. I T A L Y DEXIA CREDIOP: Moody's Downgrades Rating on DCC Notes L I T H U A N I A BANKAS SNORAS: Court Backs Central Bank's Bankruptcy Petition N E T H E R L A N D S ENDEMOL BV: Lenders Seeks Majority Ownership REFRESCO GROUP: S&P Affirms 'BB-' Long-Term Corp. Credit Rating P O R T U G A L BANCO BPI: Fitch Downgrades Rating on Mortgage Covered Bonds R U S S I A AK BARS BANK: Moody's Cuts Global Local Currency Rating to 'B1' BRUNSWICK RAIL: Moody's Assigns 'Ba3' CFR; Outlook Stable * ASTRAKHAN CITY: Fitch Affirms 'B+' Long-Term Currency Ratings S L O V E N I A * SLOVENIA: Concluded Receivership Proceedings Up 26% in November S P A I N BANCO CEISS: Moody's Assigns Rating to Covered Bonds CAJA DE AHORROS: Banco Sabadell to Buy Bank for EUR1 S W E D E N SAAB AUTOMOBILE: Has "Very Few Days" to Avert Bankruptcy U N I T E D K I N G D O M HELLAS TELECOM: Noteholders Sue TPG, Apax for EUR268MM Over Notes LINCOLN CITY FC: Boss Assures Club Won't Fall Into Administration NEW CITY: Goes Into Administration, Cuts 30++ Jobs RANK GROUP: S&P Raises Long-Term Corp. Credit Rating to 'BB-' ROADCHEF ISSUER: Fitch Affirms Ratings on Two Note Classes at B- SHENOY AND CO: In Administration, Can't Meet Obligations TRAMLINE RE: S&P Assigns 'B-' Rating to Class A Notes YELL GROUP: Debt Restructuring Talks Set to Be Extended X X X X X X X X * BOOK REVIEW: Corporate Venturing -- Creating New Businesses ********* =========== G R E E C E =========== GLITNIR BANK: Former Executives Released From Custody in Probe -------------------------------------------------------------- Iceland Review reports that former CEO of Glitnir Bank Larus Welding and two other former executives of the bank were released from custody on Monday afternoon. According to Iceland Review, Special Prosecutor Olafur Thor Hauksson had finished questioning them. The three executives were arrested in an extensive action organized by the Special Prosecutor's office on November 30, Iceland Review relates, citing ruv.is. Eight investigative teams have since worked around the clock, questioning tens of people due to suspicion on serious market abuse in Glitnir before the bank collapse in 2008, Iceland Review relates. Mr. Hauksson requested a week-long custody over four men but the request was only granted in the case of three of those arrested, Iceland Review discloses. The detainees appealed the custody verdict but it was confirmed by the Supreme Court of Iceland on Dec. 2, Iceland Review notes. The reason for the custody was primarily to prevent the men from agreeing on a joint testimony, Iceland Review says. They didn't know on what evidence the special prosecutor based his case before questioning, Iceland Review states. About Glitnir Banki Headquartered in Reykjavik, Iceland, Glitnir banki hf -- http://www.glitnir.is/-- offers an array of financial services to corporation, financial institutions, investors and individuals. Judge Stuart Bernstein of the U.S. Bankruptcy Court for the Southern District Court of New York granted Glitnir permission to enter into a proceeding under Chapter 15 of the U.S. bankruptcy code on January 6, 2008. * GREECE: Standard & Poor's Reviews 'CCC' Ratings on Four Banks --------------------------------------------------------------- Standard & Poor's Ratings Services reviewed its ratings on four Greek banks by applying its new ratings criteria for banks, which were published Nov. 9, 2011. "We will publish individual research updates on each bank, including a list of ratings on affiliated entities, and the ratings by debt type -- senior, subordinated, junior subordinated, and preferred stock. The research updates will be available at www.standardandpoors.com/AI4FI and on RatingsDirect on the Global Credit Portal. Ratings on specific issues will be available on RatingsDirect on the Global Credit Portal and www.standardandpoors.com," S&P said. Ratings List To From National Bank of Greece S.A. CCC/Negative/C CCC/Negative/C EFG Eurobank Ergasias S.A. CCC/Negative/C CCC/Negative/C Alpha Bank A.E. CCC/Negative/C CCC/Negative/C Piraeus Bank S.A. CCC/Negative/C CCC/Negative/C ============= H U N G A R Y ============= MALEV HUNGARIAN: Government Explores Rescue Options --------------------------------------------------- Jens Flottau at Aviation Week reports that the Hungarian government is searching for new ways to save financially distressed Malev Hungarian Airlines and may be prepared to let it fail. According to Aviation Week, Development Minister Tamas Fellegi says negotiations with a potential European investor are at an advanced stage and could be concluded by next year. Business daily Vilaggazdasag reported on Tuesday that the government is in talks with Unimex Group, the parent of Czech charter airline Travel Service, Aviation Week relates. The initiative comes as Chinese HNA Group indicated it is no longer interested in Malev, Aviation Week notes. Mr. Fellegi claims Hainan was never looking at buying Malev, but was instead exploring ways of cooperation, Aviation Week discloses. A decision on the sale of Malev would not be made before a European Commission decision on alleged illegal state aid for the airline, Aviation Week states. Mr. Fellegi concedes that the EC may well rule the financial support was illegal, forcing the airline to pay back several billions of forint in subsidies, Aviation Week says. As late as November, the government was mulling another HUF5 billion (US$21 million) capital increase for the airline, Aviation Week recounts. Meanwhile, Kurt Hofmann at Air Transport World reports that the Hungarian government was not willing to invest any more funds into Malev. Malev Hungarian Airlines is Hungary's national carrier. ============= I C E L A N D ============= LANDSBANKI ISLANDS: Makes First Payment on Icesave Claims --------------------------------------------------------- Omar R. Valdimarsson at Bloomberg News reports that Iceland has made the first payment to cover about US$11 billion in depositor losses stemming from the U.K. and Netherlands, moving the island closer to ending a three-year dispute with the two countries. According to Bloomberg, failed lender Landsbanki Islands hf, which sold the Icesave Internet accounts outside Iceland, on Wednesday disbursed ISK432 billion (US$3.6 billion) to creditors with priority claims, including U.K. and Dutch authorities, which have already compensated depositors who risked losing their savings when the bank tumbled three years ago. Wednesday's payment "is close to one-third of the recognized priority claims," Bloomberg quotes the winding-up board of Landsbanki as saying in a statement on its Web site. "In tandem with making the payments, the winding-up board deposited in special escrow accounts an equivalent percentage of all equally ranked claims which are still disputed or where resolution of disputes is not yet concluded." About Landsbanki Islands Landsbanki Islands hf, also commonly known as Landsbankinn in Iceland, is an Icelandic bank. The bank offered online savings accounts under the "Icesave" brand. On October 7, 2008, the Icelandic Financial Supervisory Authority took control of Landsbanki and two other major banks. Landsbanki filed for Chapter 15 protection on Dec. 9, 2008 (Bankr. S.D. N.Y. Case No.: 08-14921). Gary S. Lee, Esq., at Morrison & Foerster LLP, represents the Debtor. When it filed for protection from its creditors, it listed assets and debts of more than US$1 billion each. ============= I R E L A N D ============= SILK ROAD: S&P Puts 'B-' Rating on Class C1-J Notes on Watch Pos. ----------------------------------------------------------------- Standard & Poor's Ratings Services placed on CreditWatch with positive implications its ratings on Silk Road Plus PLC's series 2, 5, 6, and 10 synthetic collateralized debt obligation (CDO) transactions. "During our monthly run of transactions on version 5.1 of our CDO evaluator, the four tranches placed on CreditWatch positive had synthetic rated overcollateralization (SROC) levels in excess of 100% at higher ratings than the current ratings as of Nov. 30, 2011," S&P said. "For all the transactions that we ran on our CDO evaluator, we applied the top obligor and industry test SROCs, as well as the results of the Monte Carlo default simulation," S&P said. "By the end of the month, we intend to review the tranches listed with ratings that we placed on CreditWatch positive, along with any other tranches with ratings that are presently on CreditWatch negative or positive, in accordance with our current CDO criteria," S&P said. Ratings Placed on CreditWatch Positive Silk Road Plus PLC Limited-recourse secured floating-rate credit-linked notes series 2 class B1-U To From Issue amount B (sf)/Watch Pos B (sf) US$70.0 mil. Limited recourse secured floating-rate credit-linked notes series 5 class C1-J To From Issue amount B- (sf)/Watch Pos B- (sf) JPY1.0 bil. Limited-recourse secured variable return combination credit-linked notes series 6 class B3-U To From Issue amount BpNRi (sf)/Watch Pos BpNRi (sf) US$14.0 mil. Limited recourse secured floating-rate credit-linked notes series 10 class A1-E To From Issue amount BB- (sf)/Watch Pos BB- (sf) EUR10.0 mil. ========= I T A L Y ========= DEXIA CREDIOP: Moody's Downgrades Rating on DCC Notes ----------------------------------------------------- Moody's Investors Service has downgraded to Baa3(sf) from A2(sf) the ratings of the notes issued by DCC - Dexia Crediop per la Cartolarizzazione S.r.l. The ratings remain on review for downgrade. Moody's downgraded the notes following the downgrade of Dexia Crediop S.p.A on November 11, 2011, taking into account the current credit quality of the securitized pool backing the notes. The rating action concludes the rating review of the transaction that was initiated on May 24, 2011. Ratings Rationale The rating action reflects (i) the transaction's high linkage to Dexia Crediop (Ba3 on review for downgrade), which acts as originator, servicer, guarantor, swap counterparty and reserve account holder; and (ii) the quality of the assets backing the notes. The transaction is highly linked to Dexia Crediop, which acts as originator, servicer, guarantor, swap counterparty and reserve account holder. Therefore, Moody's rating approach has considered a similar probability of default for the bank and for the notes in this transaction. However, the ratings of the notes are three notches above the bank's rating. This reflects a lower expected loss on the notes resulting from the benefit given to the credit quality of the pool of assets. Moody's has maintained the rating of the notes under review for downgrade pending the conclusion of Dexia Crediop rating review. -- NOTES BACKED BY LOCAL GOVERNMENT LOANS The notes issued by DCC, an Italian special purpose entity incorporated under Law 130/99 and fully owned by Dexia Crediop, are backed by a portfolio of loans to Italian central, regional and local governments granted by Dexia Crediop. In addition, the notes benefit from an irrevocable, first demand guarantee from Dexia Crediop, covering interest and principal payments on the notes. During its review, Moody's obtained loan- by-loan information on the underlying pool of assets and analyzed its credit quality. Currently, the pool includes approximately 320 Italian public debtors, mainly regions (54%), municipalities (28%) and provinces (18%). The biggest debtors in the pool are the Italian regions of Sardegna, Liguria, Piemonte, Umbria and Lazio, which together represent approximately 43% of the current pool balance. These biggest debtors are all rated by Moody's. Moody's assessed the creditworthiness of the remaining borrowers using Q scores, which have been updated in November 2011. -- UNDERLYING ASSET POOL'S CREDIT QUALITY IN LINE WITH Baa RATING Moody's conclusion is that the pool of underlying assets has a credit quality in line with a Baa rating. As Q scores do not carry credit indicators, such as ratings reviews and outlooks, Moody's performed several stress tests. By downgrading all actual ratings and Q scores by two notches, the portfolio credit quality moves to the lower end of the Baa range. The main source of uncertainty in the analysis relates to the evolution of (i) the credit quality of Dexia Crediop; and (ii) the future general economic situation in Italy and the subsequent credit quality of Italian public entities, which constitute the borrowers in the underlying pool of assets of this transaction. If Dexia Crediop were to be further downgraded or if the economic situation were to deteriorate further in Italy and public entities were to be downgraded, the rating of the notes would be negatively affected. As explained above, Moody's methodology considers a linkage to the rating of Dexia Crediop and gives some benefit to the credit quality of the underlying pool of assets. In performing the rating review of this transaction, Moody's used CDOROM to model the cash flows and determine the loss for tranche A. The Moody's CDOROM(TM) is a Monte Carlo simulation which takes the Moody's default probabilities as input. Each corporate reference entity is modelled individually with a standard multi- factor model incorporating intra- and inter-industry correlation. The correlation structure is based on a Gaussian copula. In each Monte Carlo scenario, defaults are simulated. Losses on the portfolio are then derived, and allocated to the notes in reverse order of priority to derive the loss on the notes issued by the Issuer. By repeating this process and averaging over the number of simulations, an estimate of the expected loss borne by the notes is derived. As such, Moody's analysis encompasses the assessment of stressed scenarios. List of affected ratings Issuer: DCC - DEXIA CREDIOP PER LA CARTOLARIZZAZIONE S.r.l. -- EUR1128.851M Serie 2004-1 Classe A 1,128,851,000 Titoli a tasso variabile scadenza 2039 Notes, Downgraded to Baa3 (sf) and Remains On Review for Possible Downgrade; previously on May 24, 2011 A2 (sf) Placed Under Review for Possible Downgrade. -- EUR1005.965M Serie 2005-1 Classe A 1,005,965,000 Titoli Asset Backed-1 Notes, Downgraded to Baa3 (sf) and Remains On Review for Possible Downgrade; previously on May 24, 2011 A2 (sf) Placed Under Review for Possible Downgrade. -- EUR2300M Serie 2008-1 Classe A 2,300,000,000 Titoli Asset Backed Notes, Downgraded to Baa3 (sf) and Remains On Review for Possible Downgrade; previously on May 24, 2011 A2 (sf) Placed Under Review for Possible Downgrade. ================= L I T H U A N I A ================= BANKAS SNORAS: Court Backs Central Bank's Bankruptcy Petition ------------------------------------------------------------- According to Bloomberg News' Milda Seputyte, the Baltic News Service, citing the Vilnius district court's spokesman Gintautas Stalnionis, reports that the court backed the Lithuanian central bank's request to begin bankruptcy proceedings against Bankas Snoras AB after the lender collapsed last month. As reported by the Troubled Company Reporter-Europe on Nov. 28, 2011, Bloomberg News related that the central bank said Bankas Snoras is insolvent and intended to file for court protection from creditors to avoid a costly bailout for taxpayers. The central bank said in a statement that the bank's financial situation is "worse than previously identified" and saving the bank "would cost significantly more and would take longer than the available liquidity" at Snoras, Bloomberg disclosed. Governor Vitas Vasiliauskas said at a news conference on Nov. 24 that some LTL3.4 billion (US$1.3 billion) in assets are missing, according to Bloomberg. Bankas Snoras AB is Lithuania's fifth biggest lender. Snoras held LTL6.05 billion in deposits and had assets of LTL8.14 billion at the end of September. It competes with Scandinavian lenders including SEB AB, Swedbank AB (SWEDA), and Nordea AB. It also controls investment bank Finasta and Latvian lender Latvijas Krajbanka AS. ===================== N E T H E R L A N D S ===================== ENDEMOL BV: Lenders Seeks Majority Ownership -------------------------------------------- Agence France-Presse, citing Italian business daily Il Sole 24 Ore, reports that the creditors of Endemol BV are planning to take control and convert the debt into shares and sell them. According to AFP, the report said "The hypothesis of converting debt into shares is strengthening among creditors" including hedge funds ahead of a December 13 deadline for an agreement on Endemol's EUR2.8 billion debt (US$3.8-billion). AFP notes that Il Sole said the creditors "would become majority shareholders" and would then auction off the company" -- an option that would reject a takeover offer from former Italian prime minister Silvio Berlusconi's company Mediaset. As reported by the Troubled Company Reporter-Europe on Nov. 28, 2011, The Financial Times related that Mediaset, Silvio Berlusconi's media empire, has put in a joint bid for Endemol, together with Clessidra, the Italian private equity group. Mediaset, which confirmed the bid submission, already owns approximately one-third of Endemol and has long planned to invest more money in the company to establish a clear role in running it, the FT noted. Endemol B.V. -- http://www.endemol.com/-- is one of the world's leading producers of TV programs best known for its output of hit reality-based programming and game shows such as Deal or No Deal, Big Brother, and Extreme Makeover: Home Edition. The production company also creates scripted dramas and soap operas, and develops digital content for online distribution. It has more than 2,000 programming formats in its library and exports shows to more than 25 countries around the world. Formed in 1994, Endemol is owned by a consortium led by private equity firm Goldman Sachs and Italian television company Mediaset. REFRESCO GROUP: S&P Affirms 'BB-' Long-Term Corp. Credit Rating --------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Netherlands-based private-label soft drink and fruit juice manufacturer Refresco Group B.V. to negative from stable. "At the same time, we affirmed our 'BB-' long-term corporate credit rating on Refresco," S&P said. "We also affirmed our 'BB-' issue rating on the EUR660 million senior secured notes due 2018 issued by Refresco. The recovery rating on the notes is unchanged at '4', reflecting our expectation of average (30%-50%) recovery for noteholders in the event of a payment default," S&P said. "The outlook revision reflects the deterioration in Refresco's credit metrics so far in 2011, and our view that the group may not be able to restore its debt protection metrics in line with a 'BB-' rating in 2012. Following an unusually cold summer throughout Europe and rising raw material prices, Refresco's performance was substantially lower than we anticipated in the second and third quarters of 2011. Refresco's operations are seasonal, and these two quarters typically contribute to about two-thirds of the group's annual EBITDA. Cold weather this summer led to material volume decline, with a decrease of about 6.7% year-on-year in the third quarter of 2011. At the same time, given the magnitude of the increase in raw material prices -- in particular those of EU sugar and polyethylene terephthalate (PET) resin (one of the main components for packaging) -- Refresco experienced some delays in passing on these price increases to retailers, which played negatively on its operating margins. As a result, Refresco's EBITDA margins declined to about 8.5% for the 12 months to September 2011, from 10% at year-end 2010. This led to the deterioration in debt protection metrics, with Standard & Poor's-adjusted leverage increasing to 5.4x from 4.9x, and funds from operations (FFO) to debt declining to about 11.5% from about 15.5% over the same period. In addition, reported free operating cash flow (FOCF) shrank to a modest EUR13 million for the 12 months to September 2011, from EUR32 million for full-year 2010," S&P said. "Given the persistently high level of raw material prices and potentially adverse market conditions in 2012 and 2013, we believe that there is a risk that Refresco will not be able to reduce its adjusted debt-to-EBITDA ratio to less than 5x in the coming 12 months, even accounting for more normal weather conditions in summer 2012," S&P said. "The rating on Refresco continues to reflect the group's aggressive financial risk profile and debt leverage. They also incorporate our opinion of Refresco's limited pricing power, in particular given its high exposure to raw material price fluctuations. These factors are partially mitigated by Refresco's large scale of operations and its competitive cost structure supporting its No. 1 position in the European private-label soft drinks market; the favorable growth prospects for Refresco's product categories; and its positive free cash flow generation capacity," S&P said. "The negative outlook reflects our view that we could lower the rating on Refresco if the group were not able to restore its credit metrics to a level commensurate with the current rating within the next 12 months. We would view positive free cash flow generation and adjusted leverage of less than 5x for 2012, then gradually declining toward 4.5x over the coming years as commensurate with the current rating," S&P said. "We could revise the outlook back to stable if Refresco improved its metrics to the levels. We believe that this could be achieved if Refresco's revenues grew at a mid-single-digit rate in 2012 and current EBITDA margins improved by at least 70 basis points," S&P said. =============== P O R T U G A L =============== BANCO BPI: Fitch Downgrades Rating on Mortgage Covered Bonds ------------------------------------------------------------ Fitch Ratings has downgraded Banco Santander Totta's (Totta, 'A'/Negative/'F1') EUR5.6 billion outstanding Obrigacoes Hipotecarias (OH, mortgage covered bonds) to 'A' from 'AA-' and Banco BPI's (BPI, 'BB+'/Negative/'B') EUR5.3 billion outstanding OH to 'BBB' from 'A-'/RWN and removed the Rating Watch Negative. The rating actions are the result of the downgrade of Portugal to 'BB+'/Negative and the subsequent downgrades of Totta and BPI. Following Portugal's downgrade, Fitch has equalized the OH ratings on a probability of default (PD) basis with the IDRs of the associated Portuguese banks. Accordingly, the Discontinuity Factor of 100% for Totta's and BPI's OH allows them to be rated respectively at 'A' and 'BB+' on a PD basis. As per Fitch's covered bond rating methodology, an uplift of up to two or three notches can be granted, depending on whether the covered bonds rating on a PD basis is in the investment grade or non-investment grade category and provided that recoveries are outstanding in the case of a default on the OH. However, Fitch has maintained the five-notch cap above the sovereign rating, with no recovery uplift granted for higher rating scenarios (see "Fitch Downgrades Six Portuguese Banks' Covered Bonds", dated 06 April 2011). The rating cap continues to reflect the agency's concerns regarding the weakening sovereign profile and its impact on the ongoing performance of the cover assets. Consequently, Totta's covered bonds are rated 'A' with no recovery uplift above the rating cap. Unlike Totta, BPI's covered bonds benefit from a two-notch uplift for recoveries based on the current nominal overcollateralization (OC) level of 35%. BPI will publicly commit to such OC level from the next investor report due in December 2011. All else being equal, a downgrade of BPI's IDR will lead to an equivalent downgrade of its OH. Totta's IDR could be downgraded by two notches before its OH rating, factoring in recoveries given default, would be affected, subject to a review of the program's OC. The level of OC supporting a given rating will be affected, amongst other factors, by the profile of cover assets versus covered bonds, which is subject to change even in the absence of new issuances. It can therefore not be assumed that a given OC supporting the rating will remain stable over time. =========== R U S S I A =========== AK BARS BANK: Moody's Cuts Global Local Currency Rating to 'B1' --------------------------------------------------------------- Moody's Investors Service has downgraded Russia-based Ak Bars Bank's (ABB) long-term global local currency (GLC) deposit and debt ratings to B1 from Ba3. The bank's E+ BFSR was affirmed, however Moody's has decreased the bank's standalone credit strength to B3 from B2. The outlooks on all ratings are negative. The rating actions are based on ABB's audited IFRS statements for 2010, and its unaudited reviewed IFRS statements for H1 2011. Rationale The downgrade of the bank's supported ratings to B1 reflects the weakening of ABB's standalone credit strength, which Moody's has decreased to B3 from B2. Moody's is concerned that ABB has relatively weak buffers of capital, core income, and loan loss provisions to withstand potential credit and market losses according to Moody's stress-test scenario. The operating environment for Russian banks is likely to continue to deteriorate in 2012, which increases the chances of adverse credit and market events for ABB. ABB's regulatory capital ratio decreased to 13.1% at Q3 2011, from 15.4% at YE2010, because of the growth in risk assets. Moody's notes that the quality of capital is compromised by the bank's large investments into land (investment property), which accounted for 80% of shareholders' equity at mid-2011 (IFRS data), leaving the bank with a very small "free capital" to cover unexpected losses. In addition, a large share of related-party loans (77% of capital, excluding loans to state companies) also undermines the quality of capital. The bank's recurrent earnings (net interest income and net fees) are weak and insufficient to provide an adequate internal capital generation necessary to offset the possible credit and market losses. For H1 2011, recurrent earnings were 16% below the bank's non-interest expenses. Core profitability is influenced by a low net interest margin of 1.6% for H1 2011 (Russian banking system average was 5-6%), due to decreased yields on loans. Exposure to high market risk is another source for concern. Moody's notes that ABB's investments into quoted equities stood are 57% of its shareholders' equity at mid-2011. The Russian equity market has been highly volatile in H2 2011, increasing the likelihood of market losses for ABB. The negative outlook reflects Moody's concerns that ABB's financial fundamentals could deteriorate further. Supported ratings ABB's B1 debt and deposit ratings incorporate Moody's assessment of a high probability of parental support from the government of the Republic of Tatarstan, resulting in a two-notch uplift from the bank's standalone credit strength of B3. Moody's bases Moody's support assumptions on ABB's high market share in Tatartstan, its indirect ownership by the regional government, and a track record of support. 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. Please see the Credit Policy page on www.moodys.com for a copy of these methodologies. Headquartered in Kazan, Russia, ABB reported -- under unaudited IFRS -- total assets of RUB260 billion and net income of RUB316 million at mid-2011. BRUNSWICK RAIL: Moody's Assigns 'Ba3' CFR; Outlook Stable --------------------------------------------------------- Moody's Investors Service has assigned a Ba3 corporate family rating (CFR) and probability of default rating (PDR) to Brunswick Rail Limited (BRL). The outlook on the ratings is stable. This is the first time Moody's has assigned a rating to BRL. Ratings Rationale "The Ba3 CFR takes into account BRL's robust cash-generating business model and resilient financial performance during the downturn," says Artem Frolov, a Moody's Assistant Vice President -- Analyst and lead analyst for BRL. "This is underpinned by BRL's predictable operating cash flows, as revenues are secured by the long-term nature of the company's lease contracts and a strong client base," adds Mr. Frolov. The CFR also incorporates BRL's (i) high EBITA margin of 32% at end-2010, which Moody's would expect to approach 40% by end-2011 as a result of BRL's fleet expansion; (ii) strong position in the Russian freight railcar operating lease market and long-term relationships with large customers; (iii) modern railcar fleet, which (a) has an average age of four years, (b) is well balanced in terms of railcar type and (c) requires low maintenance capital expenditure; (iv) potential for growth due to the unsaturated nature of the operating lease market in Russia; (v) supportive shareholders, which have provided equity injections and debt financing to BRL and have refrained from requesting dividend distributions while the company has been investing in the expansion of its fleet; (vi) adequate liquidity, supported by unutilized medium- and long-term credit facilities, along with material cash reserves and stable operating cash flow; and (vii) manageable foreign currency risk, as US dollar-denominated debt is largely covered by contracted revenues linked to the US dollar. At the same time, the CFR factors in (i) the small size of the business on a global scale, with estimated revenue of only US$0.17 billion at end-2011; (ii) high debt/EBITDA of above 6.0x expected at the year-end 2011, resulting from the significant increase in BRL's debt to finance the rapid expansion of the company's railcar fleet (although Moody's would expect deleveraging below 4.0x by end-2012, as the newly acquired railcars generate EBITDA); (iii) significant customer concentration, with 55% of BRL's railcars leased by its top five customers, with the largest customers exposed to cyclical industries such as transportation and mining, and operating predominantly in Russia, which represents a geographical concentration risk; (iv) the overall exposure of the company to an emerging market operating environment that is characterized by a less developed regulatory, political and legal framework; and (v) BRL's exposure to credit risks as a result of the potential inability or unwillingness of some of the company's customers to meet their obligations under lease agreements. At the same time, Moody's notes BRL's successful track record in negotiating with customers to ensure the fulfillment of contract obligations. The stable outlook on the Ba3 rating incorporates Moody's expectation that BRL will execute its deleveraging strategy and (i) reduce its debt/EBITDA to below 4.0x by end-2012, from above 6.0x expected at end-2011; (ii) increase its retained cash flow (RCF)/debt to the mid-twenties in percentage terms by end-2012, from below 20% expected at end-2011; and (iii) maintain a solid liquidity profile. What Could Change the Rating Up/Down Moody's does not envisage positive pressure being exerted on the rating in the next 12-18 months. The rating agency could consider upgrading BRL's rating if the company achieves and maintains on a sustainable basis a debt/EBITDA ratio of below 3.0x, while increasing its EBIT/interest expense coverage to above 3.0x and its RCF/debt to above 30%. Negative pressure could be exerted on the rating if, as of end- 2012, (i) debt/EBITDA remains above 4.0x; (ii) RCF/debt remains below 20%; (iii) EBIT/interest expense declines below 2.0x; or (iv) there is a material deterioration in BRL's liquidity. The rating could also come under negative pressure if there is a material market deterioration or signs of worsening payment discipline by key customers, which could jeopardize the company's deleveraging plans, or exert pressure on its cash flow generation. Principal Methodology BRL's ratings were assigned by evaluating factors that Moody's considers relevant to the credit profile of the issuer, such as the company's (i) business risk and competitive position compared with others within the industry; (ii) capital structure and financial risk; (iii) projected performance over the near to intermediate term; and (iv) management's track record and tolerance for risk. Moody's compared these attributes against other issuers both within and outside BRL's core industry and believes BRL's ratings are comparable to those of other issuers with similar credit risk. BRL is one of the largest companies specializing in operating leasing of freight railcars in Russia. As of September 2011, the company owned 18,628 railcars. As of June 2011, it generated last 12-months revenue of US$112 million. BRL was incorporated in Bermuda in 2004 as a private company. Its shareholders are institutional and individual investors, none of which has a controlling stake. BRL provides freight railcars to large Russian industrial groups and railcar operators under multi-year operating lease contracts. * ASTRAKHAN CITY: Fitch Affirms 'B+' Long-Term Currency Ratings --------------------------------------------------------------- Fitch Ratings has affirmed the Russian City of Astrakhan's Long- term foreign and local currency ratings at 'B+' with Stable Outlooks, Short-term foreign currency rating at 'B' and National Long-term rating at 'A(rus)' with a Stable Outlook. The agency has simultaneously withdrawn all of the city's ratings as the issuer has chosen to stop participating in the rating process. Accordingly, Fitch will no longer provide ratings or analytical coverage for the City of Astrakhan. =============== S L O V E N I A =============== * SLOVENIA: Concluded Receivership Proceedings Up 26% in November ----------------------------------------------------------------- STA, citing data from rating firm Bonitetna hisa I, reports that the number of concluded receivership proceedings in Slovenia increased by 26% to 49 in November over October, while the number of launched receivership proceedings decreased by 12% to 66. ========= S P A I N ========= BANCO CEISS: Moody's Assigns Rating to Covered Bonds ---------------------------------------------------- Moody's Investors Service has taken these rating actions on the mortgage covered bonds (Cedulas Hipotecarias, CHs) transferred to a new entity, Banco de Caja Espana de Inversiones, Salamanca y Soria, S.A. (Banco CEISS) (Baa3/P-3/D+, on review for upgrade) from Caja Espana de Inversiones, Salamanca y Soria (Caja Espa�a de Inversiones). - Mortgage covered bonds issued by Banco CEISS: A1 on review for upgrade, new rating assigned. - Mortgage covered bonds issued by Caja Espana de Inversiones: A1 on review for upgrade, withdrawn for reorganization; previously A1 placed on review for upgrade, on September 28, 2011. Ratings Rationale The rating actions follow the transfer (effective as of 2 December 2011) of Caja Espana de Inversiones's financial business to Banco CEISS S.A. Following the transfer, the ratings assigned to Banco CEISS are at the same level as those formerly assigned to Caja Espana de Inversiones. Subsequent to the segregation of the financial business, Caja Espana de Inversiones's role will be to manage the social welfare projects financed through dividends paid by Banco CEISS upon completion of the transfer; it also acts as the holding company of Banco CEISS. As a result of the transfer of Caja de Espana de Inversiones's assets and liabilities, the debt obligations of the savings bank have been assumed by the new entity, Banco CEISS. For further information, see rating action entitled "Moody's assigns Baa3/P-3/D+ to Banco CEISS; under review for upgrade", published on December 5, 2011. Moody's understands that the new cover pool backing Banco CEISS's CHs represents Caja de Espana de Inversiones's former total mortgage pool. The CHs constitute direct, unconditional and senior obligations of Banco CEISS. The CHs are secured by the issuer's entire mortgage loan pool (excluding securitized loans) . The new ratings take into account these factors: (1) The issuer's credit strength (Baa3/P-3/D+ on review for upgrade) (2) The structure created by the transaction documents combined with the legal framework for Spanish mortgage covered bonds (3) The credit quality of the assets securing the payment obligations of the issuer under the covered bonds. All the cover assets backing the CHs are residential or commercial mortgages originated in Spain (4) Sizeable amounts of over-collateralization: On a statutory level this is 25% based on the eligible cover pool, and total over-collateralization as of end September 2011 was 131%. The over-collateralization level needed to maintain the current rating is 30% The TPI assigned to this transaction is "Probable". The ratings assigned by Moody's address the expected loss posed to investors. Moody's ratings address only the credit risks associated with the transaction. Other non-credit risks have not been addressed, but may have a significant effect on yield to investors. The ratings assigned to the existing CHs is expected to be assigned to all subsequent covered bonds issued by Banco CEISS under these programs and any future rating actions are expected to affect all such covered bonds. If there are any exceptions to this, Moody's will in each case publish details in a separate press release. Key Rating Assumptions/Factors Covered bond ratings are determined after applying a two-step process: expected loss analysis and TPI framework analysis. EXPECTED LOSS: Moody's determines a rating based on the expected loss on the bond. The primary model used is Moody's Covered Bond Model (COBOL), which determines expected loss as a function of the issuer's probability of default -- measured by its rating of Baa3 -- and the stressed losses on the cover pool assets, following issuer default. The estimated cover pool losses for this program are 38.6%. This is an estimate of the losses Moody's currently models in the event of issuer default. Cover pool losses can be split between market risk of 19.9% and collateral risk of 18.7%. Market risk measures losses as a result of refinancing risk and risks related to interest-rate and currency mismatches (these losses may also include certain legal risks). Collateral risk measures losses resulting directly from the credit quality of the assets in the cover pool. Collateral risk is derived from the collateral score, which for this program is currently 28%. For further details on cover pool losses, collateral risk, market risk, collateral score and TPI Leeway across all covered bond programs rated by Moody's please refer to "Moody's EMEA Covered Bonds Monitoring Overview", published quarterly. These figures are based on the latest data that has been analyzed by Moody's and are subject to change over time. These numbers are updated quarterly in the "Performance Overview" published by Moody's. TPI FRAMEWORK: Moody's assigns a TPI, which indicates the likelihood that timely payment will be made to covered bondholders following issuer default. The effect of the TPI framework is to limit the covered bond rating to a certain number of notches above the issuer's rating. Sensitivity Analysis The robustness of a covered bond rating largely depends on the credit strength of the issuer. The TPI Leeway measures the number of notches by which the issuer's rating may be downgraded before the covered bonds are downgraded under the TPI framework. Based on the current TPI of "Probable" , the TPI Leeway is zero notches. This means that the issuer rating would need to be downgraded to Ba1 before the covered bonds are downgraded, all other variables being equal. A multiple-notch downgrade of the covered bonds might occur in certain limited circumstances. Some examples might be (i) a sovereign downgrade negatively affecting both the issuer's senior unsecured rating and the TPI; (ii) a multiple-notch downgrade of the issuer; or (iii) a material reduction of the value of the cover pool. Rating Methodology The principal methodology used in this rating was "Moody's Approach to Rating Covered Bonds" published in March 2010. CAJA DE AHORROS: Banco Sabadell to Buy Bank for EUR1 ---------------------------------------------------- Charles Penty and Emma Ross-Thomas at Bloomberg News report that Banco Sabadell SA agreed to acquire Caja de Ahorros del Mediterraneo for one euro in a deal financed and guaranteed by Spain's commercial lenders as an effort to shield the national budget from losses. According to Bloomberg, Spain's deposit-guarantee fund, which is financed by the country's banks, will first inject EUR5.25 billion (US$7 billion) into CAM. Bloomberg relates that the state bailout fund said the impact on Spain's budget will be "nil," as the deposit fund will also guarantee losses arising over the next decade. The deal will create a lender with EUR166 billion in assets, Spain's fifth largest, combining Sabadell with a savings bank that was seized by the Bank of Spain in July after souring property loans wrecked its business, Bloomberg discloses. The central bank threw out CAM's managers in July and placed the bank under administration of the government's bank bailout fund, which injected EUR2.8 billion into its business and provided a further EUR3 billion-euro credit line to keep it operating, Bloomberg recounts. FROB said that the figure of EUR5.25 billion to be provided by the deposit-guarantee fund includes that EUR2.8 billion cost, Bloomberg notes. Sabadell, as cited by Bloomberg, said that the FROB is providing liquidity guarantees of EUR12.5 billion. According to the FROB official said on Wednesday that those would be used, for example, in the unlikely event that the European Central Bank stopped its liquidity operations. CAM faces debt maturities of EUR6.37 billion next year, EUR3.24 billion in 2013, and EUR4.36 billion in 2014, according to data compiled by Bloomberg. Caja de Ahorros del Mediterraneo (CAM) is a savings bank that attracts deposits and provides commercial banking services in Spain. =========== S W E D E N =========== SAAB AUTOMOBILE: Has "Very Few Days" to Avert Bankruptcy -------------------------------------------------------- Ola Kinnander at Bloomberg News reports that Saab Automobile Chief Executive Officer Victor Muller said that the company is in discussions with Zhejiang Youngman Lotus Automobile and a Chinese bank to secure loans that it needs in a "very few days" to avert bankruptcy. Bloomberg relates that Mr. Muller said Saab needs to borrow about EUR600 million (US$803 million) and was talking to Youngman representatives in Stockholm on Wednesday. According to Bloomberg, owner Swedish Automobile NV said in a statement that a court-appointed attorney is applying to end Trollhaettan-based Saab's protection against creditors. Mr. Muller, as cited by Bloomberg, said that unlike Saab's earlier agreements with Youngman, this deal wouldn't involve the Chinese manufacturer taking a stake in Saab, which would allow the transaction to proceed without the approval of former owner General Motors Co. GM, which licenses technology to Saab, has disapproved of previous proposals in which Youngman would take ownership, Bloomberg notes. Pang Da agreed in October to buy a 40% stake in Saab, and that deal collapsed when GM objected, Bloomberg discloses. Bloomberg notes that Mr. Muller said the Vaenersborg District Court in southwestern Sweden is likely to rule next week on Wednesday's application by administrator Guy Lofalk to end Saab's court-administered reorganization. The court granted Saab protection against creditors on Sept. 21, halting pending bankruptcy petitions, Bloomberg recounts. Separately, Malin Rising at The Associated Press reports that the administrator in charge of Saab Automobile's reconstruction has given up his efforts to save the company, due to a lack of funds and the refusal of previous owner General Motors to agree to proposed financing deals. According to the AP, in an application to end the struggling car company's salvage process, court-appointed administrator said Wednesday that Swedish Automobile has failed to deliver sufficient bridge-financing to cover costs during the reorganization. He also said there wasn't enough time to find a financing solution that GM will accept, the AP notes. Saab Automobile AB is a Swedish car manufacturer owned by Dutch automobile manufacturer Swedish Automobile NV, formerly Spyker Cars NV. =========================== U N I T E D K I N G D O M =========================== HELLAS TELECOM: Noteholders Sue TPG, Apax for EUR268MM Over Notes ----------------------------------------------------------------- Roxanne Palmer at Bankruptcy Law360 reports that noteholders OF Hellas Telecommunications Sarl hit TPG Capital LP and Apax Partners LLP with a new suit in New York state court Monday, seeking to recover more than EUR268 million (US$359 million) owed on notes the private equity firms profited from after acquiring the telecom and allegedly driving it into insolvency. According to Law360, plaintiff Cortlandt Street Recovery Corp. is the assignee of more than EUR130 million in payment-in-kind notes guaranteed by Hellas. The notes were issued in December 2006 and are currently in default, according to the complaint. As reported by the Troubled Company Reporter-Europe on Nov. 30, 2009, Bloomberg News said the English High Court approved an order placing Hellas II into administration. Maggie Mills and Alan Hudson were appointed by the court as joint administrators to Hellas II, Bloomberg said, citing a statement from Ernst & Young. LINCOLN CITY FC: Boss Assures Club Won't Fall Into Administration ----------------------------------------------------------------- Lincolnshire Echo News reports that Lincoln City Football Club Chairman Bob Dorrian has assured Lincoln City fans the club will not be plunged into administration as he prepared for a financially sobering Annual Meeting. Mr. Dorrian will announce losses of more than GBP480,000 to shareholders at Sincil Bank, an extremely pricey result of relegation from the Football League last season, according to Lincolnshire Echo. The report notes that with City already streamlining their day to day operations by making redundancies, rumors continue to persist that the Imps are heading for a second spell in administration. However, Lincolnshire Echo News discloses, Mr. Dorrian said there would be no repeat of the turmoil of nine years ago when the club was hurtling to extinction until it was rescued by the fans and local businesses. "There has been careless and uninformed talk from certain quarters of the club going into administration. . . . I would like to assure everyone that this was never the case and nor will it be. . . . While this season so far has been very challenging financially, myself and the board have been and are working very hard to achieve financial security for the club and we are confident this will happen. . . . In the future the club will have to cut its cloth accordingly and run a sustainable model whereby costs will never exceed revenue, whatever the circumstances. . . . We are already planning our budget strategy for next season and are determined to stay on top of our finances, whatever that may take," Lincolnshire Echo News quoted Mr. Dorrian as saying. Lincoln City Football Club is an English professional association football club based in Lincoln, Lincolnshire. The club are currently members of the Conference National in 2011-12 following relegation from the Football League. NEW CITY: Goes Into Administration, Cuts 30++ Jobs -------------------------------------------------- Construction Enquirer reports that New City Flooring Ltd has gone into administration cutting more than 30 jobs in the process. Administrators from Baker Tilly Restructuring and Recovery LLP are currently working with a handful of staff to complete the firm's outstanding contracts, according to Construction Enquirer. The report notes that administrators Mark Ranson and Phil Pierce said the company had suffered from reduced gross margins over a sustained period of time which caused irreparable trading losses. "It is a real shame that Directors of such an established company have had to make the decision that they are unable to continue trading. . . . The issues faced by New City Flooring Ltd were further exasperated by the general economic climate and increasing competition and are unfortunately symptomatic of the pressures that businesses within this sector continue to experience," Construction Enquirer quoted Mr. Ranson as saying. New City employed 22 full and part time staff, along with 16 subcontractors. All but eight staff were made redundant prior to the appointment of administrators, the report adds. The administrators can be reached at: Mark Nicholas Ranson Phil Pierce BAKER TILLY RESTRUCTURING AND RECOVERY LLP Baker Tilly 2 Whitehall Quay LEEDS LS1 4HG Tel: 0113 285 5000 Fax: 0113 285 5001 E-mail: mark.ranson@bakertilly.co.uk phil.pierce@bakertilly.co.uk RANK GROUP: S&P Raises Long-Term Corp. Credit Rating to 'BB-' ------------------------------------------------------------- Standard & Poor's Ratings Services raised its long-term corporate credit rating on U.K.-based gaming company The Rank Group PLC (Rank) to 'BB-' from 'B+'. "At the same time, we removed the rating from CreditWatch, where it had been placed with developing implications on July 1, 2011. The outlook is stable," S&P said. "In addition, we raised our issue rating on the US$14.3 million unsecured Yankee bonds issued by Rank Group Finance PLC to 'B+' from 'B'. The recovery rating on the Yankee bond is unchanged at '5', reflecting our expectation of modest (10%-30%) recovery for unsecured creditors in an event of payment default," S&P said. "The upgrade reflects our view that following a recent European Court of Justice ruling in favor of Rank, the company's financial risk profile has improved, on a sustainable basis, to a level we consider 'significant,' from 'aggressive' previously. The ruling determined that Rank does not have to repay VAT refunds and associated interest that it has received from the U.K. government since 2008, relating to bingo claims totaling GBP253.4 million. We anticipate that this ruling, backed by resilient operating performance, will likely help Rank's leverage to improve to a level less than 3x adjusted debt to EBITDA by financial year-end Dec. 31, 2011," S&P said. "Rank's financial metrics will likely be ahead of our indicators for a 'significant' financial risk profile for the 12 months to Dec. 31, 2011. However, our rating also factors in the potential impact that new controlling shareholder Guoco Group Ltd. (Guoco; a subsidiary of Malaysia-based Hong Leong Group [not rated]) will have on Rank's future financial policy. At this point, we do not have certainty on Guoco's future intentions with regard to Rank's future financial policy. This said, we have not received any indication that Rank's new shareholder structure would prompt the company to become more shareholder friendly, more leveraged, or more acquisitive in future," S&P said. "The group's operating performance is resilient to the difficult environment for U.K. consumers, in our view, with low-single- digit like-for-like revenue growth in the 12 months to June 30, 2011. Adjusted EBITDA of GBP109.7 million in the 12 months to June 30, 2011, was in line with the corresponding period in 2010. We anticipate that Rank will achieve full-year revenues of about GBP550 million and adjusted EBITDA of about GBP120 million in 2011. Rank has increased its capital expenditures to about GBP55 million per year from about GBP30 million in 2008-2009 to fund the refurbishment of its casinos and bingo clubs, which are helping to maintain customer numbers," S&P said. "In our view, Rank will continue to report satisfactory operating performance and positive free cash flows, and will retain what we deem to be adequate financial flexibility given recent deleveraging with the proceeds from VAT refunds," S&P said. "An upgrade would be linked to a commitment to adhere to conservative financial policies and maintain debt protection metrics at current levels -- specifically, adjusted debt to EBITDA of less than 3x and funds from operations to debt of more than 30% -- while continuing to generate positive free cash flows," S&P said. "We could consider a downgrade if unexpected operating setbacks cause Rank's liquidity to deteriorate, or if Guoco chooses to re- leverage such that adjusted debt to EBITDA increases to more than 4x. This could result from shareholder distributions or an acquisition of other U.K.-based casino operators," S&P said. ROADCHEF ISSUER: Fitch Affirms Ratings on Two Note Classes at B- ----------------------------------------------------------------- Fitch Ratings has affirmed RoadChef Issuer plc's A2 notes at 'B+' and B notes at 'B-' and maintained the Negative Outlook. RoadChef is a whole business securitization of 16 motorway service areas (MSAs) across the UK owned and operated by RoadChef plc. Since Fitch's last rating action in December 2010, RoadChef has continued to suffer from the combined effects of a weak economy and substantial debt service requirements, which have limited the refurbishment and development necessary to drive improvements in performance. Consequently, EBITDA declined by 3.4% (October 4, 2011, yoy TTM basis) to GBP23.0 million which was also partially dampened by particularly poor December 2010 results following heavy snowfall in the UK, which crippled the roads network for almost two weeks (representing an estimated GBP0.5m loss in gross profit). In view of the weak UK economic outlook for 2012, and RoadChef's substantial operating leverage and exposure to consumer discretionary spending, cash flow available for capex is expected to be low, which is likely to limit improvements in performance. Fitch consequently expects that the transaction will remain under pressure for the foreseeable future, which is reflected by the Negative Outlook. Further equity injections totaling GBP0.7 million have been required this year (bringing the reported EBITDA DSCR to 1.28x) in order to prevent a breach of the financial covenant (set at 1.25x). Fitch's base case long-term (unsupported) EBITDA DSCR forecast to maturity is above the covenant level of 1.25x at a median of 1.31x. However, given the capital-intensive nature of the business, the agency focuses more on FCF DSCR, with the FCF capturing not only maintenance capex but also the cost of certain development loans (c.GBP0.8 million per annum), pension expense, working capital and tax. The agency's base case FCF DSCR (minimum of both the average and median DSCRs to the notes' legal final maturity) for the class A2 and B notes is c. 1.3x and 1.0x, respectively. Performance improved during FY10. However, this was primarily due to significant reductions in site and central overheads. It is unclear whether further cost reductions will be possible for FY12 or the long term, in view of the recent increases in site (87.1% of total overheads) and central (12.9% of total overheads) overheads of 7.4% and 59.0%, respectively, on a TTM yoy basis. On the positive side, RoadChef restarted its investment program in 2010 for the first time since the start of the downturn and has now completed nine refurbishments (eight of which sit within the securitized group) out of a total 20 sites (of which 16 are in the securitized group). These included the opening of nine new McDonald's outlets and refurbishing its Costa facilities. In total, Roadchef spent ca. GBP9.5 million of capex during the past four quarters. While the newly refurbished sites noticeably showed an improvement in performance, the overall EBITDA was still down compared to last year due to the remaining sites deteriorating. Fitch used its UK whole business securitization criteria to review the transaction structure, financial data and cash flow projections. The rating actions are as follows: -- GBP 122.3m Class A2 notes due 2023: affirmed at 'B+'; Negative Outlook maintained -- GBP 42.0m Class B notes due 2026: affirmed at 'B-'; Negative Outlook maintained SHENOY AND CO: In Administration, Can't Meet Obligations -------------------------------------------------------- Jessica Thompson at Harrow Observer reports that Civil Aviation Authority said that Shenoy and Co (UK) Ltd, which trades as Reliable Holidays and Economy Travels, goes into administration and 'cannot or will not be able to meet obligations to customers.' The CAA has received a number of calls from customers worried about their bookings after they received letters confirming the company has gone into administration, according to Harrow Observer. "The CAA is of the opinion that Shenoy & Co (UK) Ltd trading as Reliable Holidays cannot or will not be able to meet its obligations to its customers. . . . Passengers with bookings should check with the airline to ascertain if the tickets (either paper or e-tickets) have been issued. Passengers with bookings where tickets have not been issued may be able to claim a refund and should carefully read the letter attached to the claim form, which provides details on how to make a claim," a spokesman for the CAA said in a statement. TRAMLINE RE: S&P Assigns 'B-' Rating to Class A Notes ----------------------------------------------------- Standard & Poor's Ratings Services has assigned its preliminary 'B- (sf)' credit rating to the series 2011-1 class A notes to be issued under the principal-at-risk variable-rate note program Tramline Re Ltd. "This will be the first series of notes issued under this program, which is sponsored by Amlin AG (Amlin; A/ Stable/--). Although Amlin AG sponsors this series of notes, we note that any other Amlin PLC subsidiary can issue notes under the program," S&P said. The series 2011-1 class A notes issued will be exposed to U.S. hurricane, U.S. earthquake, and Europe windstorm risk (in selected countries and regions in northern and western Europe), between January 2012 and December 2014. Tramline Re is an exempted company licensed as a special purpose insurer in Bermuda. Codan Trust Company Ltd. holds all of Tramline Re's issued and outstanding share capital for charitable purposes. "Amlin will be the counterparty to the risk transfer contracts and is a wholly-owned subsidiary of Amlin PLC (BBB+/Stable/--). Amlin PLC is a large specialist commercial insurance and reinsurance group with a long-established, and well-regarded, franchise in Lloyd's. Amlin AG underwrites the group's international reinsurance business operating out of Switzerland and Bermuda," S&P said. AIR Worldwide Corp carried out the risk analysis on the issue. Proceeds from the sale of the notes will be invested in U.S. Treasury money market funds. Ratings List Class Prelim. Prelim rating amount (mil. US$) A B- (sf) 75 YELL GROUP: Debt Restructuring Talks Set to Be Extended ------------------------------------------------------- Anousha Sakoui at The Financial Times reports that Yell Group is set to give its lenders more time to agree terms on a restructuring of its GBP2.6 billion debts. The FT says a deadline for the talks, which expired on Wednesday at 5:00 p.m., could be extended as far as the end of this week as two camps of lenders, a group of institutional investors and Yell's lending banks, try to reach a compromise. According to the FT, people familiar with the situation said that although meetings between the two camps had been held, no agreement was reached. The extension comes as the directories business seeks approval for additional leeway under its banking covenants, the FT notes. As reported by the Troubled Company Reporter-Europe on Dec. 6, 2011, the FT said that Yell needs two-thirds of debt holders to support the plan. To allow the management of Yell to focus on a new strategy to turn the business round, it moved to renegotiate its banking covenants in an effort to give it an additional 20% headroom, the FT disclosed. As part of the plan, it is considering buying back GBP100 million of debt to capitalize on the roughly 70% discount to face value at which the debts trade in the market, the FT stated. It also wants to reduce a GBP173 million undrawn credit facility to GBP30 million, the FT noted. One of the investors said that the group of institutional lenders are opposed to such a big reduction in the revolving credit facility providers' commitment at par, when they would have to take a 70% loss to reduce their claims, according the FT. About Yell Group Headquartered in Reading, England, Yell Group plc -- http://www.yellgroup.com/-- is an international directories business operating in the classified advertising market through printed, online, and phone media in the U.K. and the US. Yell also owns 100% of TPI (renamed "Yell Publicidad"), the largest publisher of yellow and white pages in Spain, with operations in certain countries in Latin America. Yell's revenue for the twelve months ended March 31, 2008, was GBP2,219 million and its Adjusted EBITDA was GBP738.9 million. * * * As reported by the Troubled Company Reporter-Europe on Dec. 6, 2011, Standard & Poor's Ratings Services affirmed its long-term corporate credit rating on U.K.-based classified directories publisher Yell Group PLC at 'CC'. S&P said the outlook remains negative. =============== X X X X X X X X =============== * BOOK REVIEW: Corporate Venturing -- Creating New Businesses ------------------------------------------------------------- Authors: Zenas Block and Ian C. MacMillan Publisher: Beard Books, Washington, D.C. 2003 (reprint of 1993 book published by the President and Fellows of Harvard College). List Price: 371 pages. $34.95 trade paper, ISBN 1-58798-211-0. Creating new businesses within a firm is a way for a company to try to tap into its potential while at the same time minimizing risks. A new business within a firm is like an entreprenuerial venture in that it would have greater flexibility to opportunistically pursue profits apart from the normal corporate structure and decision-making processes. Such a business is different from a true entrepreneurial venture however in that the business has corporate resources at its disposal. Such a company business venture has to answer to the company management too. Corporate venturing--to use the authors' term--offers innovative and stimulating business opportunities. Though venturing is in a somewhat symbiotic relationship with the parent firm, the venture would never threaten to ruin the parent firm as a entrepreneur might be financially devastated by failure. Block and MacMillan contrast an entreprenuerial enterprise with their subject of corporate venturing, "When a new entrepreneurial venture is created outside an existing organization, a wide variety of environmental factors determine the fledgling business's survival. Inside an organization . . . senior management is the most critical environmental factor." This circumstance is the basis for both the strengths and limitations of a corporate venture. In their book, the authors discuss how senior management working with the leadership of a corporate venture can work in consideration of these strengths and weaknesses to give the venture the best chances for success. If the venture succeeds beyond the prospects and goals going into its formation, it can always be integrated into the parent company as a new division or subsidiary modeled after the regular parts of a company with the open-ended commitment, regular hiring practices, and reporting and coordination, etc., going with this. As covered by the authors, done properly with the right commitment, sense of realism and practicality, and preliminary research and ongoing analysis, corporate venturing offers a firm new paths of growth and a way to reach out to new markets, engage in fruitful business research, and adapt to changing market and industry conditions. The principle of corporate venturing is the familiar adage, "nothing ventured, nothing gained." While it is improbable that a corporate venture can save a dying firm, a characteristic of every dying firm is a blindness about venturing. Just thinking about corporate ventures alone can bring to a firm a vibrancy and imagination needed for business longevity. Ideas, insights, and vision are the essence of corporate venturing. But these are not enough by themselves. Corporate venturing is based as much on the right personnel, especially the top leaders. The authors advise to select current employees of a firm to lead a corporate venture whenever feasible because they already have relationships with senior management who are the ultimate overseers of a venture and they understand the corporate culture. In one of their several references to the corporate consultant and motivational speaker Peter Drucker, the authors quote him as identifying only half jokingly the most promising employees to lead the corporate venture as "the troublemakers." These are the ones who will be given the "great freedom and a high level of empowerment" required to make the venture workable and who also are most suited to "adapt rapidly to new information." Such employees for top management of a venture are not entirely on their own. The other side of this, as Brock and MacMillan go into, is for such venture management to earn and hold the trust and confidence of the firm's top management and work within the framework and follow the guidelines set for the venture. Corporate venturing is an operation which is a hybrid of the standard corporate interests and operations and an independent business with entrepreneurial flexibility mainly from focus on one product or service or at most a few interrelated ones, simplified operations, and streamlined decision-making. From identifying opportunities and getting starting through the business plan and corporate politics, Brock and MacMillan guide the readers into all of the areas of corporate venturing. Zenas Block is a former adjunct professor with the Executive MBA Program at the NYU Stern School of Business. Ian C. MacMillan is associated with Wharton as a professor and a director of a center for entrepreneurial studies. ********* 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 * * *