/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/120718.mbx T R O U B L E D C O M P A N Y R E P O R T E R E U R O P E Wednesday, July 18, 2012, Vol. 13, No. 142 Headlines G E R M A N Y SPELLBOUND ENTERTAINMENT: Emerge From Insolvency I R E L A N D PB DOMICILE: Fitch Affirms 'BB' Rating on EUR15.4-Mil. Notes I T A L Y * ITALY: Moody's Downgrades Sub-Sovereign Ratings * ITALY: Moody's Cuts Debt & Deposit Ratings of Various Banks K A Z A K H S T A N KAZAKHSTAN MORTGAGE: Fitch Assigns 'BB/BB+' LT Currency Ratings L U X E M B O U R G XELLA INTERNATIONAL: S&P Affirms 'B+' Corporate Credit Rating R U S S I A CITIBANK ZAO: Fitch Upgrades Viability Rating From 'bb+' VNESHECONOMBANK: S&P Assesses Stand-alone Credit Profile at bb U N I T E D K I N G D O M AA GROUP: In Administration on Late Payments & Trading Conditions CORIOLANUS LTD: S&P Lowers Rating on Series 66 Notes to 'CCC-' FOUR SEASON: Fitch Raises LT Issuer Default Rating to 'B' HONISTER CAPITAL: In Administration, Failed to Secure Insurance NEW EDINBURGH: In Administration, Blames Economic Climate NUVO BAR: Enters Liquidation; Owner Blames Recession RADECE PAPIR: Paper Mill Gets EUR15-Million Offer From Saray SUREWAY HEATING: Goes Into Liquidation After 40 Years TWICKENHAM FILM: TSL Acquires Studio Out of Administration W.J. BAKER: In Administration, Cuts 30 Jobs U Z B E K I S T A N UNIVERSAL BANK: Fitch Withdraws 'CCC/C' Issuer Default Ratings X X X X X X X X * Fitch Downgrades 11 Tranches of 7 Synthetic CDOs to 'Dsf' ********* ============= G E R M A N Y ============= SPELLBOUND ENTERTAINMENT: Emerge From Insolvency ------------------------------------------------ Emily Gera at The Verge reports that Spellbound Entertainment, the developer behind Arcania: Gothic 4, is emerging from insolvency under the new name Black Forest Games. The Verge relates that the new studio hopes to re-establish itself as "a leader in RPG and strategy games." "Black Forest Games will add to the legacy of Spellbound Entertainment by empowering the core of the team to build an even greater company that is tuned to today's market opportunities," CEO Andreas Speer told Eurogamer, according to The Verge. "With the talent and IP we have internally, we know we'll again be recognised as a leader in the creation of games for the RPG and strategy genres." According to the report, 40 of the original 65 member Spellbound team will be involved in the new studio, including key members of management and the creative team. Black Forest Games also has new funding following its insolvency filing in March, the report notes. Offenburg-based studio Spellbound was formed in 1994, and has created games such as Desperados, Giana Sisters, Airline Tycoon and Gothic 4: Arcania. ============= I R E L A N D ============= PB DOMICILE: Fitch Affirms 'BB' Rating on EUR15.4-Mil. Notes ------------------------------------------------------------ Fitch Ratings has affirmed PB Domicile 2006-1 PLC, as follows: -- EUR 27.6m Class D (ISIN DE000A0GYFL1): affirmed at 'BBBsf'; Stable Outlook -- EUR 15.4m Class E (ISIN DE000A0GYFM9): affirmed at 'BBsf'; Outlook revised to Negative from Stable The affirmations reflect that the transaction's performance is above Fitch's expectations. This is driven by the high cure and removal rate since closing. Cumulative realized losses are at 0.28% and three-month-plus arrears are fairly stable at around 1.0%. Following the time call as of the early redemption date on November 28, 2011, the class A1+ to C notes were paid in full and the class D notes were partially redeemed. The remaining outstanding notes reflect the amount of overdue reference claims as of the early redemption date less net proceeds received from synthetic excess spread, cures and recoveries as well as removals (due to breaches of eligibility criteria) since the call date. The outstanding note balance as of the May 2012 payment date was EUR43.0 million. The remaining protected portfolio amount stands at EUR1.6 billion. Fitch expects synthetic excess spread and proceeds from cures and late recoveries to cover losses for the respective rating scenarios until the class D and E notes are repaid. Since the available synthetic excess spread depends on the portfolio repayment rate as well as the amount of cures and removals, which have been volatile over the past payment periods, the Outlook for the class E has been revised to Negative from Stable. The transaction is a synthetic securitization referencing a portfolio of residential mortgage loans originated by Postbank Bank AG. ========= I T A L Y ========= * ITALY: Moody's Downgrades Sub-Sovereign Ratings ------------------------------------------------- Moody's Investors Service has downgraded the long-term issuer and debt ratings of 23 Italian sub-sovereign entities, including regional and local governments (RLGs) as well as two associated entities. The downgrades were prompted by the weakening of the Italian government's credit profile, as captured by Moody's recent downgrade of Italy's government bond rating to Baa2 from A3. Further to the action, the outlooks on Italian sub-sovereign ratings remain negative in line with the outlook on the sovereign rating. Ratings Rationale The deterioration in Italy's sovereign creditworthiness has affected Italian sub-sovereign entities to varying degrees. The centralized architecture of the local public sector in Italy establishes close operational and financial linkages between the national and peripheral governments. Although this is well- established and designed to ensure the stability of the RLG finances, the institutional framework does not grant RLGs sufficient autonomy to withstand a deterioration of the sovereign rating. RLGs are contributing to Italy's fiscal consolidation through fiscal tightening measures imposed by the central government. Lower state resources and stricter budgetary restraints are in turn resulting in increased budgetary rigidity and worsened budgetary performance. Moody's has downgraded sub-sovereign issuers that were previously positioned within the A1-Baa1 rating range by two rating notches, mirroring the change in the sovereign rating. Conversely, sub- sovereign ratings that were previously positioned at Baa2 and Baa3 have been lowered by one rating notch to Baa3 and Ba1, respectively, to reflect greater tolerance of lower ratings to sovereign credit deterioration. Further to the action, Italian sub-sovereign ratings can continue to be grouped as follows, although the composition of each group has shifted: (1) issuers with ratings above that of the sovereign, (2) issuers rated at the sovereign level, and (3) issuers rated below the sovereign. A detailed list of the issuers and ratings affected by this rating action is provided further below. - ENTITIES RATED ABOVE THE SOVEREIGN Moody's has downgraded the entities in this group by two rating notches. Entities in this group include the Autonomous Province of Bolzano, the Autonomous Province of Trento and its financial company Cassa del Trentino, and the Region of Lombardy. Bolzano and Trento were downgraded to A3 from A1, and remain rated two notches above Italy's Baa2 sovereign rating. Key features supporting their higher credit quality include: (i) their statutory independence, which provides a greater degree of financial and legislative autonomy and is expected to continue insulating them from the weakening sovereign environment; (ii) their exceptionally strong fiscal positions and budgetary flexibility, which provides them with the scope to implement large-scale fiscal adjustments; and (iii) their very low exposure to financial market dislocations. At the same time, Cassa del Trentino's A1 rating was downgraded to A3 with a negative outlook, mirroring the action on the Autonomous Province of Trento. Lombardy was downgraded to Baa1 from A2, and remains rated one notch above Italy's Baa2 sovereign rating. Unlike the two autonomous provinces, Lombardy lacks special constitutional status, and as such it is not insulated from financial exposure to the sovereign. However, it benefits from Italy's largest and most diversified economic base, generating about 20% of national GDP. Furthermore, its large budget and fiscal flexibility, combined with low debt, enable it to implement large-scale fiscal adjustments in response to budgetary restraints. - ENTITIES RATED AT THE SOVEREIGN LEVEL Moody's has downgraded the entities in this group to Baa2 -- the same level as the sovereign rating -- from A3. This group comprises seven regions, three cities and one government-related issuer (Finlombarda). Moody's does not view these entities as having special characteristics that could support ratings higher than that of the sovereign. The tight financial and operational linkages between the state and these RLGs leads to comparable levels of credit risk. Although these entities generally display medium-to- large economic bases, good financials, and low-to-moderate contingent liabilities, they remain dependent on state transfers and central government's decisions affecting their finances. The downgrade of Lombardy's financial company Finlombarda to Baa2 reflects Moody's assessment of the degree of subordination to its sole shareholder, Lombardy, which is rated one notch above at Baa1. This group also includes the state-backed issuances of the regions of Umbria and Sicily, which are fully serviced by the central government and remain aligned to the sovereign rating. - ENTITIES RATED BELOW THE SOVEREIGN Moody's has downgraded entities in this group by one or two notches to reflect their tight budgetary position and high debt, including contingent liabilities, and to preserve the ordinal ranking of their credit quality relative to the sovereign. The group includes six regions and two cities. The Regions of Abruzzo and Piedmont were downgraded by two notches to Baa3 from Baa1 to reflect their tight budgets, including cash flows, and moderate-to-high debt. The City of Civitavecchia was also downgraded to Baa3 from Baa1 to reflect its weak budgetary position and growing debt. The Regions of Lazio, Campania, Calabria and Molise were downgraded by one notch to Baa3 from Baa2. These issuers feature low capacity to withstand a deteriorating operating environment and to face budgetary restraints, in light of their tight budgets, high debt and contingent liabilities. The one-notch downgrade of the City of Naples to Ba1 from Baa3 reflects Moody's assessment of Naples' fragile budgetary position, high debt and exposure to financial risks off-balance sheet. Naples is particularly exposed to the pressure arising from budgetary restraints imposed by the central government, given its high dependence on state resources and the systemic pressure stemming from its weak and demanding socio-economic environment. WHAT COULD CHANGE THE RATINGS UP/DOWN The negative outlooks on Italian sub-sovereigns mirror the negative outlook on Italy's sovereign rating and reflect systemic pressure. Italian sub-sovereign ratings are likely to follow the trajectory of Italy's government rating. An imminent deterioration of a given RLG's financial profile and its ability to service its debt obligations would also trigger a downward rating action. A stabilization of the outlooks or an upgrade of Italian sub- sovereign ratings will require a stabilization or upgrade of the sovereign rating, or evidence of a given RLG's capacity to display comparatively stronger credit fundamentals and ability to withstand the deterioration of the operating environment. RATINGS AFFECTED - ENTITIES RATED ABOVE THE SOVEREIGN - Autonomous Province of Bolzano: issuer rating downgraded to A3, with negative outlook, from A1 - Autonomous Province of Trento: issuer rating downgraded to A3, with negative outlook, from A1 - Region of Lombardy: issuer and debt ratings downgraded to Baa1, with negative outlook, from A2 - Cassa del Trentino SpA: issuer and debt ratings downgraded to A3, with negative outlook, from A1 - ENTITIES RATED AT THE SOVEREIGN LEVEL - Region of Basilicata: issuer rating downgraded to Baa2, with negative outlook, from A3 - Region of Liguria: debt rating downgraded to Baa2, with negative outlook, from A3 - Region of Umbria: issuer and debt ratings downgraded to Baa2, with negative outlook, from A3; senior secured debt rating downgraded to Baa2 from A3 - Region of Veneto: issuer and debt ratings downgraded to Baa2, with negative outlook, from A3 - Region of Puglia: debt rating downgraded to Baa2, with negative outlook, from A3 - Region of Sardinia: debt rating downgraded to Baa2, with negative outlook, from A3 - Region of Sicily: issuer and debt ratings downgraded to Baa2, with negative outlook, from A3; senior secured debt rating downgraded to Baa2 from A3 - City of Milan: issuer and debt ratings downgraded to Baa2, with negative outlook, from A3 - City of Siena: issuer rating downgraded to Baa2, with negative outlook, from A3 - City of Venice: issuer and debt ratings downgraded to Baa2, with negative outlook, from A3 - Finlombarda SpA: issuer rating downgraded to Baa2, with negative outlook, from A3 - ENTITIES RATED BELOW THE SOVEREIGN - Region of Abruzzo: issuer and debt ratings downgraded to Baa3, with negative outlook, from Baa1 - Region of Calabria: issuer rating downgraded to Baa3, with negative outlook, from Baa2 - Region of Campania: issuer and debt ratings downgraded to Baa3, with negative outlook, from Baa2 - Region of Lazio: debt rating downgraded to Baa3, with negative outlook, from Baa2 - Region of Molise: issuer and debt ratings downgraded to Baa3, with negative outlook, from Baa2 - Region of Piedmont: issuer and debt ratings downgraded to Baa3, with negative outlook, from Baa1 - City of Civitavecchia: issuer and debt ratings downgraded to Baa3, with negative outlook, from Baa1 - City of Naples: debt rating downgraded to Ba1, with negative outlook, from Baa3 Rating Methodologies Used The principal methodologies used in rating Italian RLGs were Regional and Local Governments Outside the US published in May 2008, and The Application of Joint Default Analysis to Regional and Local Governments published in December 2008. The principal methodology used in rating Italian GRIs was Government-Related Issuers: Methodology Update published in July 2010. * ITALY: Moody's Cuts Debt & Deposit Ratings of Various Banks ------------------------------------------------------------- Moody's Investors Service has downgraded by one to two notches the long-term debt and deposit ratings for 10, and the issuer ratings for 3, Italian financial institutions, prompted by the weakening of the Italian government's credit profile, as captured by Moody's downgrade of Italy's government bond rating to Baa2 from A3 on 13 July 2012. The long-term debt and deposit ratings of one bank were affirmed. Ratings Rationale The actions follow the weakening of the Italian government's credit profile, as captured by Moody's downgrade of Italy's government bond rating to Baa2 from A3, with a negative outlook. The ratings declined by one notch for 7 of the affected institutions, and by two notches for remaining 6. The short-term ratings for 3 banks have also been downgraded by one notch, triggered by the long-term ratings changes. Along with the increase in the risk of sovereign bond defaults, the downgrade of Italy's long-term ratings to Baa2 also indicates a similarly increased risk that the government might be unable to provide financial support to its banks in financial distress. As a consequence, Italian banks with standalone ratings at or close to the Baa2, and higher debt and deposit ratings as a result of an expectation of systemic support , have seen the support uplift in their debt ratings reduced by one or two notches. The reduced expectation of systemic support that prompted the rating actions follows downgrades of several Italian banks taken on May 14, 2012. The revised standalone credit assessments announced on 14 May were set to be resilient to a degree of further stress, and reflected the banks' substantial exposures to the Italian economy and the Republic's credit worthiness. As a result, those earlier actions largely limited the extent of the rating actions taken to changes in the credit enhancement associated with systemic support. Accordingly, the standalone ratings, in almost all cases, proved resilient to the sovereign downgrade. Banks are typically rated on a standalone basis no higher than the government's rating due to multiple channels of shared exposure and contagion. Limited exceptions are possible where there is external support or where a bank has substantial assets, revenues and financing resources domiciled outside their home environment, and where direct and indirect credit exposure to the sovereign is limited. However, Italian banks' substantial exposure to the domestic economy -- coupled with high direct exposure to sovereign debt -- have resulted in standalone credit assessments that are no higher than the sovereign rating. As a result of these considerations, any further sovereign downgrade would likely result in a commensurate lowering of many banks standalone and debt and deposit ratings (see Moody's Sector Comment "How Sovereign Credit Quality May Affect Other Ratings" published 13 February, 2012). For the two affected Government-related issuers (GRIs), Cassa Depositi e Prestiti and Ismea, their debt and issuer ratings were lowered to the same rating level as the sovereign given their high default correlation with the Italian government. For further details of the rating actions, see the specific sections for the two GRIs later in the press release. What Could Move The Ratings Up/Down Upgrades of the banks' ratings are unlikely in the near term, given the negative outlooks on the ratings as well as the sovereign's rating. However, a limited amount of upwards rating pressure could develop if any bank substantially improves its credit profile and resilience to the prevailing conditions. This may occur through increased standalone strength, e.g. bolstered capital and liquidity buffers, work-out of asset quality challenges or improved earnings. Improved credit strength could also result from external support; for example, through a change in ownership or the receipt of extra capital or liquidity injections. Several factors could exert further downwards rating pressure, such as (i) increasing funding stress and reliance on central bank support, which could raise pressure on banks to deleverage, with adverse consequences for asset quality; (ii) a prolonged recession, which could similarly further exacerbate already adverse asset-quality trends and impair capital; or (iii) further weakening of the Italian government's credit strength. BANK-SPECIFIC RATING CONSIDERATIONS UniCredit The long-term deposit and debt ratings were downgraded to Baa2, in line with the Italian sovereign rating, from A3. The C- BFSR, mapping to a standalone credit assessment of baa2 was affirmed at its current level, which is in line with the sovereign rating. The outlook is negative on all ratings, in line with the sovereign, and with other Italian banks. Moody's notes that despite UniCredit's substantial international activities, its important exposure to its domestic market means that its standalone rating is constrained by the level of the sovereign rating, as is the case for other Italian banks rated by Moody's. UniCredit Leasing UniCredit Leasing's long and short-term issuer ratings were downgraded to Baa3/Prime-3 from Baa2/Prime-2. The outlook remains negative and reflects that of the parent UniCredit (Baa2; C- /baa2, negative). According to Moody's, the downgrade follows the downgrade of the parent bank, which reduces the ratings uplift for the issuer rating, despite Moody's view of a very high probability of parental support from UniCredit. Intesa Sanpaolo The long-term deposit and debt ratings were downgraded to Baa2, in line with the Italian sovereign rating, from A3, thus eliminating the notch of systemic support applied previously. The standalone BFSR was affirmed at C-, however this now maps to a standalone credit assessment of baa2 (previously baa1), also in line with the sovereign rating. The outlook is negative on all ratings, in line with the sovereign. Moody's notes that Intesa's business is almost entirely domestic in nature, and as such its standalone rating is constrained by the sovereign rating, resulting in the lowering of the standalone credit assessment. Banca CR Firenze (Carifirenze) The long-term deposit and debt ratings were downgraded to Baa2 with negative outlook. This is in line with both the parent's (Intesa Sanpaolo) and the sovereign's ratings. This rating action eliminated the two notches of parental support from Intesa Sanpaolo, previously incorporated into CR Firenze's long-term deposit and debt ratings, given the now lower long-term rating of the parent, which forms the basis for assessing parental support. The bank's C- BFSR, mapping to a standalone credit assessment of baa2, was not affected. The outlook is negative on all ratings, in line with the sovereign, and with other Italian banks. Banca IMI The long-term deposit and debt ratings were downgraded to Baa2 from A3. This is in line with both the parent's (Intesa Sanpaolo) and the Italian sovereign's ratings. This rating action eliminated the two notches of parental support from Intesa Sanpaolo, previously incorporated into Banca IMI's long-term deposit and debt ratings, given the now lower long-term rating of the parent, which forms the basis for assessing parental support. The bank's C- BFSR, mapping to a standalone credit assessment of baa2, was not affected. The outlook is negative on all ratings, in line with the sovereign, and with other Italian banks. Banca Monte Parma Banca Monte Parma's long-term deposit rating was downgraded to Baa2 from Baa1, directly following the downgrade of the ratings of its parent Intesa Sanpaolo. This rating action reduces to one from two notches the level of parental support from Intesa Sanpaolo, given the now lower long-term rating of the parent, which forms the basis for assessing parental support. The bank's D+ BFSR, mapping to a standalone credit assessment of baa3, was unaffected. The outlook on all ratings remains negative, in line with the sovereign, and with other Italian banks. Banca Nazionale del Lavoro Banca Nazionale del Lavoro's long-term Baa2 deposit rating was affirmed. The other ratings and the negative outlook are unaffected. The affirmation is based on Moody's assessment of a very high probability of parental support from BNP Paribas (A2; BFSR C-/BCA baa2, stable) and a high probability of systemic support, which results in two-notches of rating uplift from the ba1 standalone credit assessment. The uplift has not changed and now stems from parental support only -- from one notch of parental support and one notch of systemic support previously -- following the downgrade of Italy's rating. Cassa di Risparmio di Parma e Piacenza (Cariparma) The long-term deposit and debt ratings were downgraded to Baa2, in line with the Italian sovereign rating, from Baa1, thus eliminating the current one notch of systemic support. The bank's C- BFSR, mapping to a standalone credit assessment of baa2, was not affected. The outlook is negative on all ratings, in line with the sovereign, and with other Italian banks. Moody's high expectation of parental support from Credit Agricole(CASA) does not actually result in any uplift for the banks' ratings, given that Cariparma's standalone credit assessment of baa2 is in line with CASA's adjusted standalone credit assessment of baa2. Banca Popolare Friuladria (Friuladria) The long-term deposit and debt ratings were downgraded to Baa2, in line with the Italian sovereign rating, from Baa1, so reducing parental support from its parent, Cariparma, to one notch, given the now lower long-term deposit rating of the parent, which forms the basis for assessing parental support. The bank's D+ BFSR, mapping to a standalone credit assessment of baa3 was not affected. The outlook is negative on all ratings, in line with the sovereign, and with other Italian banks. Banca Carige Banca Carige's long and short-term deposit ratings were downgraded to Baa3/Prime-3 from Baa2/Prime-2. The other ratings and the negative outlook are unaffected. The key driver for the one-notch downgrade of the deposit ratings is the downgrade of Italy. At this Baa2 rating level of the government, Moody's assessment of a moderate probability of systemic support in the event of a financial crisis results in no uplift from the baa3 standalone credit assessment (from one notch of uplift previously), under Moody's joint default analysis (JDA) methodology. Credito Emiliano Credito Emiliano's long and short-term deposit ratings were downgraded to Baa3/Prime-3 from Baa2/Prime-2. The other ratings and the negative outlook are unaffected. The one-notch downgrade of the deposit ratings follows the downgrade of Italy. At this rating level of the Italian government, Moody's assessment of a moderate probability of systemic support in the event of a financial crisis provides no uplift from the baa3 standalone credit assessment (from one notch of uplift previously), under Moody's joint default analysis (JDA) methodology. GE Capital SpA GE Capital Spa's long-term deposit rating was downgraded to Baa2 from Baa1. The outlook remains negative. According to Moody's, the downgrade reflects the downgrade of Italy. GE Capital's business is domestic and as such, its rating is constrained by the sovereign rating, despite parental support. In Moody's view, parental support from General Electric Capital Corporation (rated A1/P-1) continues to be very high, but is likely to be linked to the longer-term prospects for the business in Italy. As a result, Moody's has lowered the parental support uplift provided to the bank's deposit rating to three from four notches. This uplift is based on Moody's expectation of (i) a very high probability of parental support from General Electric Capital Corporation; and (ii) low probability of systemic support for GE Capital Spa in the event of a financial crisis. Cassa Depositi e Prestiti The government-related issuer (GRI) Cassa Depositi e Prestiti's long-term issuer and debt ratings have been downgraded to Baa2, with a negative outlook. This is at the same level as the Italian government, given its 70% government ownership and the strong financial and operational linkages with the government, reflected in its public policy function. The outlook is negative in line with the negative outlook on the sovereign. Istituto Servizi Mercato Agricolo Alimentare (ISMEA) The GRI ISMEA's long-term issuer rating has been downgraded to Baa2, with a negative outlook. This is at the same level as the Italian government, given its full government ownership and the strong financial and operational linkages with the government, reflected in its public policy function. The outlook is negative in line with the negative outlook on the sovereign. The methodologies used in these ratings were Moody's Consolidated Global Bank Rating Methodology published in June 2012, Finance Company Global Rating Methodology published in March 2012, and Government-Related Issuers: Methodology Update published in July 2010. =================== K A Z A K H S T A N =================== KAZAKHSTAN MORTGAGE: Fitch Assigns 'BB/BB+' LT Currency Ratings --------------------------------------------------------------- Fitch Ratings has assigned Kazakhstan Mortgage Company (KMC) a Long-term foreign currency rating of 'BB' and Long-term local currency rating of 'BB+', and a Short-term foreign currency rating of 'B'. The Outlooks for the Long-term ratings are Positive. The rating action also affected the outstanding bonds of the company. KMC's ratings reflect the company's ownership by the government, its strategic importance in the area of social housing and hence potential government support. Fitch uses its public-sector entities rating criteria and applies a top-down approach in its analysis of KMC. The Positive Outlooks reflect the sovereign rating and expected capital injection from the state. Fitch notes that the resumption of explicit government support in the form of capital injections leading to improvement of company's financial position and profitability could be positive for the ratings. Conversely, a weakening or absence of state support visible primarily in a delay or lack of the planned state recapitalization of KMC would lead to Fitch to change its approach to the rating to a standalone basis (from the top down), which could result in a multiple-notch downgrade. KMC acts as the government's agent in the area of affordable housing provision and plays a crucial role in implementing government social housing programs for low and middle income households. Additionally, KMC contributes to the stability and development of Kazakhstan's financial sector through refinancing mortgage loans of commercial banks, securitization of mortgages and by issuing bonds. The costs of KMC's financing have increased considerably since 2008 due to distress in the financial markets. The company's average annual effective financing cost exceeded 11% in 2011, which outran the average yield on KMC's mortgage loan portfolio of 9%. This led to negative net interest income and KZT6.2 billion losses in 2011. Fitch expects that budgeted capital injections from the government will decrease financing costs and gradually revive KMC's profitability in the medium term. KMC's absolute debt level has been relatively stable over the past five years. However, the leverage (debt to equity ratio) weakened to 5x in 2011 from 2.5x in 2008 due to equity erosion caused by lack of capital injection from the state and weak profitability. The bulk of KMC's debt is in floating-rate domestic bonds, which accounted for 70% of its liabilities by end 2011. In addition, KMC is exposed to unhedged forex and derivative risk in the form of a US$100 million bank loan. The company also has a long-term subsidized loan from the government. KMC has a sound liquidity cushion: the company's cash and deposits at end-2011 totaled KZT14 billion, which is 2x higher the debt due in 2012. This significantly mitigates refinancing risk and Fitch notes that urgent support from the government is unlikely to be required by KMC in the near term. In general, KMC has a relatively long-term debt maturity profile spread out until 2027 with domestic bond repayment concentrated in 2012 to 2018. KMC expects to receive KZT107.8 billion of capital injections as part of an approved state program 'Affordable housing 2020' over the period of 2013-2020. The government is also expected to provide explicit guarantees for KMC's domestic bonds in the amount of KZT56.5bn. This will strongly improve the company's equity and will positively influence its profitability. The company received capital injections during 2000-2007 upon establishment and as part of the state program 'Affordable housing 2005-2007'. =================== L U X E M B O U R G =================== XELLA INTERNATIONAL: S&P Affirms 'B+' Corporate Credit Rating ------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Luxembourg-registered building products manufacturer Xella International S.A. (Xella) to negative from stable. "At the same time, we affirmed our long-term corporate credit on Xella at 'B+'," S&P said. "In addition, we affirmed our 'B+' issue rating on the EUR300 million senior secured notes issued by Xella's financing vehicle Xefin Lux S.C.A. The recovery rating on the notes is '3', reflecting our expectation of meaningful (50%-70%) recovery in the event of a payment default," S&P said. "The outlook revision reflects our view that headroom under Xella's leverage covenant (net debt to EBITDA before one-off items) will decline to less than 10% for the next 12 months. This is due to the meaningful tightening of this covenant, to 2.50x on Sept. 30, 2013, from 3.78x on March 31, 2012. We are therefore lowering our assessment of Xella's liquidity to 'less than adequate' from 'adequate,' as defined in our criteria. The negative outlook also incorporates our view that Xella faces difficult operating conditions because of the economic uncertainties in its central and eastern European markets (excluding Germany)," S&P said. "We note that Xella's credit metrics were slightly weaker in financial 2011 than we previously forecast when we assigned the rating in May 2011. For financial 2012, we estimate that Xella's credit metrics will remain highly leveraged, with Standard & Poor's-adjusted debt to EBITDA of 8.0x (3.7x excluding the shareholder loan) and funds from operations (FFO) to debt of about 8.1% (17.6% excluding the shareholder loan)," S&P said. "The negative outlook reflects our view of Xella's tightening leverage covenant over the next 12 months, combined with challenging macroeconomic conditions in Europe that could adversely affect its performance," S&P said. "We could lower the rating if Xella breaches the leverage covenant or if its operating performance is materially weaker than our base case, causing its credit metrics to deteriorate below our current forecast (including FFO to debt in high-single digits)," S&P said. "We could revise the outlook to stable if Xella is able to obtain covenant relief providing adequate (more than 15%) compliance with its leverage covenant, and if we see a sustained improvement in macroeconomic conditions in the company's central and eastern European markets," S&P said. =========== R U S S I A =========== CITIBANK ZAO: Fitch Upgrades Viability Rating From 'bb+' -------------------------------------------------------- Fitch Ratings has affirmed three foreign-owned Russian banks' Long-term Issuer Default Ratings at 'BBB+'. The Outlook on ZAO Raiffeisenbank and ZAO Citibank is Stable and the Outlook on ZAO UniCredit Bank is Negative. At the same time, the agency has upgraded the three banks' Viability Ratings (VR) to 'bbb-' from 'bb+'. The three banks' IDRs are driven by potential support from foreign shareholders. ZAO UniCredit Bank is 100%-owned by UniCredit S.p.A. (UC; 'A-'/Negative) through its Vienna-based subsidiary UniCredit Bank Austria AG (UBA; 'A'/Stable). ZAO Raiffeisenbank is a 100%-subsidiary of Raiffeisen Bank International AG (RBI, 'A'/Stable). ZAO Citibank is fully-owned by Citigroup Inc. ('A'/Stable). The Negative Outlook on ZAO UniCredit Bank's Long-term IDRs reflects the Outlook on UC's Long-term IDR. If UC is downgraded, UCB's Long-term IDR would also be downgraded. A downgrade of Russia's Country Ceiling ('BBB+') would also cause a downgrade of UCB's Long-term IDR. The Long-term IDRs of ZAO Raiffeisenbank and ZAO Citibank are currently constrained by Russia's Country Ceiling and could be upgraded or downgraded if a change in Russia's sovereign ratings resulted in a change in the Country Ceiling. A two-notch downgrade of either RBI or Citigroup could also drive a downgrade of their Russian subsidiaries, although this is not currently anticipated given the Stable Outlooks on the parents' ratings. The upgrades of the three banks' VRs reflect Fitch's re- assessment of the banks' underlying credit strengths and also factor in the recent positive track record of the banks' performance through the crisis. The banks have demonstrated sustainable profitability through the cycle, supported by their well-established client franchises; moderate credit costs resulting from access to better quality customers and sound risk management; generally stable funding bases, resulting in lower- than-peers funding costs; and good cost controls. Asset quality has stabilised, while loan impairment in the crisis for the three banks was somewhat below peers. Capital positions were supported by internal capital generation, which remains strong. At end-Q112, ZAO Unicredit Bank reported NPLs (loans overdue by more than 90 days) of 3.7% and a Basel II Tier 1 ratio of 10.9%. At end-2011, ZAO Raiffeisenbank reported NPLs of 4.6% and a Basel II Tier 1 ratio of 15.2% and there were no significant changes in these parameters at end-Q112. ZAO Citibank maintained exceptionally good loan quality (with corporate NPLs below 1% at end-Q112 and less than 1% NPLs generation in retail), and the regulatory capital ratio is expected to be sound at above 15% even after a planned USD150m dividend payment and potential further income distributions. Liquidity positions are comfortable, underpinned by customer deposit inflows. ZAO UniCredit Bank and ZAO Raiffeisenbank are currently net lenders to their parent institutions, reflecting both excess liquidity from short-term deposits and management of risk-weighted assets at the parent level. ZAO Citibank's liquidity is supported by a very low loans/deposits ratio and large holdings of sovereign debt (nearly 40% of the total assets), eligible for refinancing operations with the Central Bank of Russia. At the same time, the VRs also consider expected cyclicality in the performance of the Russian economy and therefore the banks, modest market shares in a sector dominated by state-owned banks, and significant foreign currency lending. The VRs also reflect relatively high loan concentrations by individual borrower at ZAO Raiffeisenbank and ZAO UniCredit Bank, significant exposure to the real estate segment at ZAO Raiffeisenbank, high depositor concentrations at ZAO UniCredit Bank, and ZAO Citibank's more limited franchise. Further upside potential for the VRs is limited given the current level of Russia's sovereign ratings ('BBB'/Stable) and the banks' moderate market shares and likely cyclical performance. The VRs could come under downward pressure if there was an unexpected sharp deterioration in asset quality, or if an increase in problems at any of the parent banks resulted in markedly higher subsidiary funding costs, undermining their current business models. The rating actions are as follows: ZAO Raiffeisenbank -- Long-term foreign and local currency IDRs: affirmed at 'BBB+'; Outlook Stable -- Short-term foreign currency IDR: affirmed at 'F2' -- National Long-term rating: affirmed at 'AAA(rus)'; Outlook Stable -- Support Rating: affirmed at '2' -- Senior unsecured debt: affirmed at 'BBB+'/F2 and at 'AAA(rus)' -- Senior unsecured upcoming RUB-denominated bonds: affirmed at -- Long-term 'BBB+ (exp)' and National Long-term 'AAA(rus)(exp)' -- Viability Rating: upgraded to 'bbb-' from 'bb+' ZAO UniCredit Bank -- Long-term foreign and local currency IDRs: affirmed at 'BBB+'; Outlook Negative -- Short-term foreign and local currency IDRs: affirmed at 'F2' -- National Long-term rating: affirmed at 'AAA(rus)'; Outlook Stable -- Support Rating: affirmed at '2' -- Viability Rating: upgraded to 'bbb-' from 'bb+' ZAO Citibank -- Long-term foreign currency IDR: affirmed at 'BBB+'; Outlook Stable -- Short-term foreign currency IDR: affirmed at 'F2' -- National Long-term rating: affirmed at 'AAA(rus)'; Outlook Stable -- Support Rating: affirmed at '2' -- Viability Rating: upgraded to 'bbb-' from 'bb+' VNESHECONOMBANK: S&P Assesses Stand-alone Credit Profile at bb -------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BBB' rating to the sixth series of senior loan-participation notes (LPNs) issued on July 5, 2012, by Russia-based Vnesheconombank (VEB; foreign currency BBB/Stable/A-3; local currency BBB+/Stable/A-2) via VEB Finance PLC. The LPNs' nominal amount is $1.0 billion and they form part of VEB's large LPN program. The notes have a 10-year maturity and a fixed 6.025% interest rate paid semiannually. The ratings on the notes are equalized with the long-term foreign currency issuer credit rating on VEB. "The long-term ratings on VEB are equalized with those on the Russian Federation (foreign currency BBB/Stable/A-2; local currency BBB+/Stable/A-2; Russia national scale 'ruAAA'), reflecting our view of an 'almost certain' likelihood that the Russian government would provide timely and sufficient extraordinary support to VEB if necessary," S&P said. S&P said in accordance with its criteria for government-related entities, its view of an 'almost certain' likelihood of extraordinary government support is based on its assessment of: - VEB's "critical" role to the Russian Federation as the prime public development institution of the government, which cannot be readily undertaken by a private entity; and - VEB's "integral" link with the Russian Federation. This is Because of VEB's special status as a state corporation with strong oversight from the federal government and its proven track record of adequate extraordinary financial support in all circumstances. "As a result, the foreign currency credit rating on VEB is three notches higher than its stand-alone credit profile (SACP), which we currently assess as 'bb'. The SACP is based on the 'bb' anchor and our assessment of the bank's 'strong' business position, 'moderate' capital and earnings, 'moderate' risk position, 'above average' funding, and 'adequate' liquidity, as our criteria define these terms," S&P said. =========================== U N I T E D K I N G D O M =========================== AA GROUP: In Administration on Late Payments & Trading Conditions ----------------------------------------------------------------- Steel Guru, citing The Enquirer, reports that steelwork specialist The AA Group has been placed in administration. The Skelmersdale based fabricator and erector is now in the hands of administrator Leonard Curtis, according to Steel Guru. Steel Guru notes that the Enquirer said that the company blamed its demise on late payments and dire trading conditions in the steelwork sector. One source told the Enquirer that "The company has been hit by a reduction in structural steel volumes, the erosion of contract margins, reduced credit with suppliers and extended payment terms across the construction industry," Steel Guru says. The AA Group was a supply chain partner for some of the country's leading contractors. CORIOLANUS LTD: S&P Lowers Rating on Series 66 Notes to 'CCC-' -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its credit ratings on three credit default swaps between DeutscheBank AG London and N.V. Slibverwerking Noord-Brabant, and on synthetic collateralized debt obligation (CDO) transaction--Coriolanus Ltd.'s series 66. "The rating actions follow our discovery of an error, which led to our March 5, 2012 rating actions on these transactions. We raised the ratings on these notes as part of our regular monthly synthetic CDO surveillance. In taking those rating actions, we considered the synthetic rated overcollateralization (SROC) results. However, when calculating the SROC results, we used incorrect portfolio information," S&P said. "We have lowered the ratings on these four transactions to reflect updated portfolio and attachment point (the loss threshold of a reference portfolio) information and to correct the error. We have lowered these ratings to the levels at which they meet our SROC minimum cushion requirement. We have lowered our ratings on the three credit default swaps to one notch above their ratings before the March 5 rating actions, and we have lowered our rating on Coriolanus' series 66 to the same rating level as it was before the March 5 rating action," S&P said. "SROC is a measure of the degree by which the credit enhancement (or attachment point) of a tranche exceeds the stressed loss rate assumed for a given rating scenario. SROC helps capture what we consider to be the major influences of portfolio performance: Credit events, asset rating migration, asset amortization, and time to maturity," S&P said. STANDARD & POOR'S 17G-7 DISCLOSURE REPORT SEC Rule 17g-7 requires an NRSRO, for any report accompanying a credit rating relating to an asset-backed security as defined in the Rule, to include a description of the representations, warranties and enforcement mechanisms available to investors and a description of how they differ from the representations, warranties and enforcement mechanisms in issuances of similar securities. The Rule applies to in-scope securities initially rated (including preliminary ratings) on or after Sept. 26, 2011. If applicable, the Standard & Poor's 17g-7 Disclosure Reports included in this credit rating report are available at: http://standardandpoorsdisclosure-17g7.com RATINGS LIST Rating To From Coriolanus Ltd. EUR10 Million Variable Credit-Linked Secured Notes Series 66 CCC- (sf) BB (sf) Deutsche Bank AG London and N.V. Slibverwerking Noord-Brabant EUR156.311 Million Credit Default Swap (Including A Tap Issuance EUR18.996 Million) CCC+srp (sf) BB+srp (sf) Deutsche Bank AG London and N.V. Slibverwerking Noord-Brabant EUR84.27 Million Credit Default Swap (Including A Tap Issuance Of EUR21,700 Million) CCC+srp (sf) BB+srp (sf) Deutsche Bank AG London and N.V. Slibverwerking Noord-Brabant EUR29.39 Million Credit Default Swap Bsrp (sf) BBB-srp (sf) FOUR SEASON: Fitch Raises LT Issuer Default Rating to 'B' --------------------------------------------------------- Fitch Ratings has upgraded Four Seasons Health Care (Guernsey) Holdings Limited's (FSHC) Long-term Issuer Default Rating (IDR) to 'B' from 'CC', removed it from Rating Watch Positive (RWP) and simultaneously withdrawn this rating as FSHC does not carry any debt under the new ownership structure. In addition, Fitch has assigned Elli Investments Limited an IDR of 'B'. The Outlook is Stable. Fitch has also assigned Elli Finance (UK) Plc's senior secured notes a rating of 'BB'/'RR1' and its super-senior revolving credit facility (RCF) a rating of 'BB'/'RR1'. Elli Investments Limited's senior notes have been assigned a senior unsecured rating of 'BB'/'RR1'. The upgrade of FSHC's IDR is driven by the completion of the acquisition of FSHC by Elli Investments Ltd., an entity controlled by funds or limited partnerships managed or advised by Terra Firma. This transaction has resulted in refinancing of FSHC's existing debt from the proceeds of the senior secured notes (GBP350 million) and senior notes (GBP175 million) issued and equity contribution (GBP345 million). The completion of FSHC's acquisition has resolved FSHC's previously high refinancing risk and reduced its leverage to just over 6x (FY11: 7.2x). Elli Investments Limited's IDR is supported by a leading position in the independent UK elderly care market and solid relationships with local authorities and NHS commissioners. The rating also reflects the company's focus on high dependency services in its elderly care division, which is relatively resistant to the recent trend towards domiciliary care. The IDR is constrained by the company's high dependence on local authorities funding (almost 70% of its funding). Due to the current downward pressure on local authorities' budgets, the average level of fees funded by local authorities is expected to remain under pressure in the coming years, below current and expected inflation. This may lead to a tightening in the company's EBITDA margins. The IDR is further constrained by relatively weak credit metrics. Based on its conservative projections, Fitch expects a funds from operations (FFO)-adjusted leverage of around 6.2x for 2012-2014 and FFO fixed charge coverage between 1.4x-1.5x. Fitch anticipates that Elli Investments Limited's liquidity will be adequate with cash on balance sheet building up to EUR50 million in 2014 driven by expected positive free cash flows, a fully undrawn GBP40m revolving credit facility (RCF) and no short-term debt maturities. In its recovery analysis, Fitch has adopted the liquidation value approach as the resultant enterprise value is higher than the going concern enterprise value, primarily derived from the group's freehold and long-leasehold properties. Fitch believes that a 30% discount on the assets' current market value is deemed fair in a distress case. Fitch has classified the GBP220m shareholder loans issued at Elli Capital Ltd as 100% equity and therefore has excluded it from leverage and coverage ratios. The features of this instrument match Fitch's perception of an equity-like instrument. What Could Trigger A Rating Action Positive: Future developments that may, individually or collectively, lead to positive rating action include: -- sustained profits and free cash flow generation that would enable FFO-adjusted leverage to decrease below 5x on a permanent basis and an improvement in FFO fixed charge coverage above 2.2x. Negative: Future developments that may, individually or collectively, lead to negative rating action include: -- weaker credit metrics such as FFO fixed charge coverage below 1.2x and FFO adjusted leverage above 6.5x on a sustained basis. HONISTER CAPITAL: In Administration, Failed to Secure Insurance --------------------------------------------------------------- mortgagestrategy reports that Honister Capital, which includes advisory firms Burns Anderson, Sage Financial and Honister Partners and its subsidiary, B-A Financial Ltd, went into administration after it failed to secure professional indemnity insurance. Grant Thornton has been appointed administrator for the group. Chief Executive Colman Moher told advisers they were no longer able to write new business, with immediate effect, according to Mortgagestrategy. The report notes that Honister Capital Holdings will continue to operate direct-to-consumer business Willis Owen, which will not be affected by the move. "Due to the history of some of our businesses, we have been exposed to large claims relating to business written by advisers who have long since left us and this has severely affected the premiums we have had to pay. The extent of policy excesses and exclusions has compounded this . . . . It is with great regret that we have to inform you that we have been unable to obtain PII cover for the coming year, which means Honister Capital Ltd and its subsidiaries will be unable to trade. The business has had no choice but to enter into administration and consequently you are no longer able to write new business with immediate effect," the report quoted Mr. Owen as saying. Honister Capital was formed in June 2009, when it acquired the principal advisory and direct businesses of The Money Portal Ltd in a move that saw the rest of The Money Portal, including national IFA Bates, go into administration with debts of GBP55 million. NEW EDINBURGH: In Administration, Blames Economic Climate --------------------------------------------------------- Scotsman.com reports that New Edinburgh Ltd (NEL) has gone into administration. New Edinburgh was formed as a joint venture 20 years ago, but council chiefs said it had served its purpose and blamed the current economic climate for the decision to stop further investment, according to Scotsman.com. The report notes that the company has no employees and its only assets are a part-let office block near the Gogar roundabout and 30 acres of development land near Edinburgh Park station. "NEL was set up to generate development and employment and it has been highly successful in doing both. Since its creation in 1990, it has created 7,000 jobs and been responsible for the construction of 1.3 million square feet of office space . . . . It has also generated millions of pounds in dividends for the stakeholders that has been put to good use funding council services for local residents," the report quoted Council Leader Andrew Burns as saying. New Edinburgh Ltd was set up by the city council and builders Miller to develop Edinburgh Park. NUVO BAR: Enters Liquidation; Owner Blames Recession ---------------------------------------------------- The Birmingham Post reports that Nuvo Bar Birmingham has gone bust just three years after opening. According to the report, the Brindleyplace cocktail lounge and club, run by brothers Chris and Cos Papachristoforou, went into liquidation following the intervention of HM Revenue and Customs. The Birmingham Post relates that the brothers also run Edmunds and Cielo restaurants at Brindleyplace. The Brunswick Square bar is continuing to trade under the same name while talks with liquidators continue, the report notes. Chris Papachristoforou told the Birmingham Post that his other ventures were not affected by the financial difficulties that have hit Nuvo, which he blamed on the recession. "We have gone into liquidation. We are in talks with the liquidator to see where we stand with them. We are nevertheless trading still as Nuvo," the report quotes Mr. Papachristoforou as saying. "We need to see what the outcome of the liquidators' decisions will be in as far as the money that is owed to creditors." Mr. Papachristoforou said he was "not exactly sure" how much cash was owed but it included unpaid VAT and PAYE. Debts to food and drinks suppliers were "not so much," the report adds. Nuvo Bar Birmingham is one of Birmingham's top bars. RADECE PAPIR: Paper Mill Gets EUR15-Million Offer From Saray ------------------------------------------------------------ EUWID reports that the deadline for the submission of offers for the assets of the insolvent Slovenian paper manufacturer Radece papir has expired. The report says the few bids received so far, however, offer no certainty that the idle paper mill in Radece can continue to operate in the future. Insolvency administrator Borut Soklic told EUWID in an interview that only two offers had been submitted by the expiry of the deadline, including an interesting bid of some EUR15 million by Ankara-based Turkish company Saray. The offer, according to EUWID, reportedly matches the assessed liquidation value of EUR8.5 million for the real estates and EUR6.5 million for all other assets of the insolvent company. Saray's offer is now under scrutiny but details will only be available in one to two months, the administrator told EUWID. According to the report, the insolvency administrator said French supplier of smart cards technology and security identification solutions Oberthur Technologies, that was viewed for a while as a potential buyer, did not participate in the bidding in the first place. Oberthur has not made an offer, the report says. As reported in the Troubled Company Reporter-Europe on Jan. 6, 2012, EUWID said Radece applied for the opening of compulsory settlement proceedings and has filed a financial restructuring plan with the District Court of Celje in December. Radece blames its financial situation on production difficulties, extended machine downtime as well as soaring cotton linters and pulp prices, which saw net losses amounting to almost EUR6.5 million in the first nine months of the financial year 2011. Radece Papir d.o.o. is Slovenia-based paper manufacturer. The company runs two paper machines and employs a total of 372 people. Radece papir d.o.o. operates as a subsidiary of G-M&M. SUREWAY HEATING: Goes Into Liquidation After 40 Years ----------------------------------------------------- Lemington Observer reports that Sureway Heating Services has gone into liquidation. The company went into liquidation on July 4 with Timothy James Heaselgrave of Warwick-based The Redfern Partnership LLP appointed as liquidator, the report says. Steven Siddle, an employee of the firm for almost a decade, expressed his shock, told Lemington Observer: "Employees were informed on June 22 and had been working as normal with no indication or communication up until this date. I was unaware myself until June 28 as I had been on holiday. "We're all in the dark - I'm owed wages let alone thousands of pounds in redundancy money . . . it's a worrying time with both me and my son affected but I'm hoping to now set up a business on my own," the report quotes Mr. Siddle as saying. Sureway Heating Services is a Leamington-based heating firm. The company traded for more than 40 years. TWICKENHAM FILM: TSL Acquires Studio Out of Administration ---------------------------------------------------------- George Bevir at Broadcastnow.com reports that Twickenham Film Studios has been bought out of administration. Twickenham Studios Ltd (TSL), a consortium led by hotelier Sunny Vohra, acquired the facility for an undisclosed amount, according to Broadcastnow.com. The report notes that the studios went into administration at the start of the year. TSL Managing Director Vohra has appointed Maria Walker, a post- production supervisor who led the campaign to save the studios, to the role of chief operating officer, the report notes. The report discloses that Ms. Walker said a raft of improvements would be made to the 100-year old studios, with the intention of making the facility a "place of innovation". "There has been a woeful lack of funding and there is a plan to invest and bring the kit up to standard. . . . There are repairs that haven't been made - for example the lift doesn't work -- and there will be improvements to things like the phone systems, the wiring and the general updating of rooms," Ms. Walker told the news agency in an interview. W.J. BAKER: In Administration, Cuts 30 Jobs ------------------------------------------- Construction Enquirer reports that Suffolk contractor W.J. Baker (Gt. Barton) commonly known as Baker Construction has fallen into administration with the loss of 30 jobs. PricewaterhouseCoopers were appointed as administrators after the company was hit by a lack of work and intense competition for contracts, according to Construction Enquirer. "The company has suffered significant losses in the recent past and is unlikely to have a foreseeable future," the report quoted PwC as saying. Baker specialized in affordable housing developments, commercial property and listed buildings. At the firm's peak in 2010, it had a turnover of GBP10 million and employed 70 staff. =================== U Z B E K I S T A N =================== UNIVERSAL BANK: Fitch Withdraws 'CCC/C' Issuer Default Ratings -------------------------------------------------------------- Fitch Ratings has affirmed and withdrawn Uzbekistan-based Universal Bank's (UB) Long- and Short-Term foreign currency Issuer Default Ratings (IDR) at 'CCC' and 'C', respectively. The withdrawal follows the revocation of the bank's license for foreign-currency operations by the Central Bank of Uzbekistan. UB's other ratings are unaffected as the bank's ability to service its obligations in national currency is not affected. Privately-owned UB is one of the smallest (24th of 30) domestic banks by assets (end-2011: USD27.4m), based in densely populated eastern Uzbekistan where it operates a few banking outlets. The bank has a short track record as it was only founded in 2001. In late 2010, a regional private equity investment fund acquired control of UB. UB focuses on commercial banking operations with predominantly corporate clients. The new owner is focused on franchise expansion and building management processes and controls. The rating actions are as follows: -- Long-Term foreign currency IDR: affirmed at 'CCC' and withdrawn -- Short-Term foreign currency IDR: affirmed at 'C' and withdrawn -- Long-Term local currency IDR: 'CCC'; unaffected -- Short-Term local currency IDR: 'C'; unaffected -- Viability Rating: 'ccc'; unaffected -- Support Rating: '5'; unaffected -- Support Rating Floor: 'No Floor'; unaffected =============== X X X X X X X X =============== * Fitch Downgrades 11 Tranches of 7 Synthetic CDOs to 'Dsf' ----------------------------------------------------------- Fitch Ratings has downgraded 11 tranches of 7 synthetic CDOs to 'Dsf' from 'Csf' and withdrawn seven ratings as follows: Tsar 05: -- Class B: downgraded to 'Dsf' from 'Csf' -- Class C: downgraded to 'Dsf' from 'Csf' -- Class D: downgraded to 'Dsf' from 'Csf' -- Class E: downgraded to 'Dsf' from 'Csf' Eirles 4 Limited Series 9 -- Series 9: downgraded to 'Dsf' from 'Csf; rating withdrawn RIJN Finance Company BV -- Tranches A1: downgraded to 'Dsf' from 'Csf'; rating withdrawn -- Tranche A2: downgraded to 'Dsf' from 'Csf'; rating withdrawn -- Eirles 4 Limited Series 10 downgraded to 'Dsf' from 'Csf'; rating withdrawn -- Eirles 2 Limited Series 110 downgraded to 'Dsf' from 'Csf'; rating withdrawn Brooklands Euro Referenced Linked Noted 2002-2 Ltd -- Class A2: downgraded to 'Dsf' from 'Csf'; rating withdrawn -- Programma Dinamico S.p.A. due 14 May 2012 (CSFB PV2) downgraded to 'Dsf' from 'Csf'; rating withdrawn The downgrade reflects the settlement of credit events, the repurchase of the notes or the default of the charged assets. The ratings have been withdrawn for transactions that no longer have a rating above 'Dsf' outstanding. Following the settlement of credit events, Tsar 05 class B, C, D and E, Eirles 4 Limited Series 9 and RIJN Finance Company BV tranche A1 and A2 have been written-down. Eirles 4 Limited Series 10, Eirles 2 Limited Series 110 and Brooklands Euro Referenced Linked Noted 2002-2 Ltd Class A2 have been unwound. Fitch believes these tranches would have eventually defaulted if they have not been repurchased by the counterparty. Two charged assets (Eolo 2006-2 and Eolo 2006-3) of Programma Dinamico S.p.A. due 14 May 2012 (CSFB PV2) defaulted on 24 September 2009. As a result, Fitch believes that the transaction proceeds were not sufficient to repay the notes at maturity. The related transactions are synthetic CDOs referencing portfolio of corporate debts and structured finance assets. ********* 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, Ivy B. Magdadaro, Frauline S. Abangan and Peter A. Chapman, Editors. Copyright 2012. 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 Peter Chapman at 240/629-3300. * * * End of Transmission * * *