TCREUR_Public/130222.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, February 22, 2013, Vol. 14, No. 38



BADEL 1862: Files Motion for Pre-Bankruptcy Settlement Procedure


PAGESJAUNES GROUPE: Fitch Lowers IDR to 'B-'; Outlook Negative
SEAFRANCE SA: Eurotunnel to Fight Antitrust Review of Ship Buy


E-STAR ALTERNATIVE: Polish Unit Acquires HUF760-Mil. Debt


HOUSING FINANCING: Iceland Ready to Provide Bailout


ANGLO IRISH: Probe Into E&Y's Behavior as Auditor to Continue


EDISON SPA: Fitch Lifts Long-Term IDR From 'BB'; Withdraws Rating


KAZKOMMERTSBANK: Fitch Raises Subordinated Debt Ratings to 'B-'


TELCO UAB: S&P Raises Long-Term Corporate Credit Ratings to 'B'


GRAND CITY: S&P Assigns 'BB-' Corp. Credit Rating; Outlook Stable


E-MAC DE 2005-I: S&P Lowers Rating on Class E Notes to 'CCC'


ATLAS TELECOM: Judiciary Administrator Sells Fiber Network
MECHEL TARGOVISTE: Files for Insolvency


* SLOVENIA: New Government May Lead Nation Into Bankruptcy


IM CAJAMAR: Fitch Affirms 'CCsf' Rating on Class E Certs.

U N I T E D   K I N G D O M

A SUIT THAT FITS: Exits Administration After Pre-Packaged Sale
HMV GROUP: Administrators Close 37 More Stores; 464 Jobs Affected
* UK: Insolvency Service Budget Cuts Affect Enforcement Activity
* UK: Pre-Packaged Administration Deals Attract Controversy


* Plain Packaging Biggest Risk for Tobacco Firms, Fitch Says
* BOOK REVIEW: Corporate Venturing -- Creating New Businesses



BADEL 1862: Files Motion for Pre-Bankruptcy Settlement Procedure
SeeNews reports that Badel 1862 said on Wednesday the company has
submitted a motion for the launch of a pre-bankruptcy settlement

According to SeeNews, the company said in a bourse filing that,
at the same time, the procedure launched by the Croatian
government to sell a 65.84% stake in the company remains ongoing.

In January, Badel 1862 said potential buyers that had placed bids
for the stake had started conducting due diligence at the
company, SeeNews relates.

Badel 1862 posted a non-consolidated net loss of HRK36.6 million
(US$6.5 million/EUR4.8 million) in 2012, SeeNews discloses.

Badel 1862 is a Croatian wine and spirits producer.


PAGESJAUNES GROUPE: Fitch Lowers IDR to 'B-'; Outlook Negative
Fitch Ratings has downgraded PagesJaunes Groupe S.A.'s Long-term
Issuer Default Rating (IDR) to 'B-' from 'B'. Fitch Ratings has
also downgraded PagesJaunes Finance & Co S.C.A's senior secured
notes rating to 'B+' from 'BB-'. The Outlook is Negative.

The downgrade follows PagesJaunes' (which has changed its name to
Solocal) announcement that 2013 will see further gross operating
margin (GOM; PagesJaunes' EBITDA proxy, EBITDA before staff
profit sharing) attrition with no stabilization in cash flow
generation in the short term. Fitch believes it may take at least
a few years to show signs of stabilization, during which the
company must refinance its large 2015 maturities.


- Continued Cash Flow Declines:

Fitch previously guided that unless PagesJaunes demonstrated that
it could stabilize cash flows, a negative rating would be
considered. The company's guidance for 2013 is for GOM to fall to
between EUR445 million-EUR425 million, from EUR464 million in
2012 and EUR488 million in 2011. Fitch is concerned that the
company's cash flow will continue to decline beyond 2013.
Therefore, PagesJaunes could approach the period when it must
refinance its large 2015 maturities without demonstrating that it
has successfully stabilized its core business.

- Negative Outlook:

Although the company has refinanced twice in the past two years,
Fitch is concerned that a lack of stabilization could hamper
PagesJaunes' ability to refinance its 2015 maturities. A Stable
Outlook does not reflect this risk. If the company makes progress
in refinancing these maturities, or if the company makes progress
in stabilizing its business, which would support a successful
refinancing, then Fitch envisages revising the Outlook to Stable.

- Slowing Internet Revenue Growth:

PagesJaunes' internet revenue growth slowed substantially in
H212, with more aggressive competition from traditional media as
well as other digital media impacting the company's growth. While
cyclical factors are likely to be affecting the company's online
revenue growth, Fitch is concerned that part of this decline may
be structural i.e. a more aggressive environment in the French
advertising market.

- Continued Digital Transition:

Although Fitch recognizes management's ability to manage the
reduction in print revenues and the growth in internet revenues
in a more successful way than peers across Europe, the transition
to a digital business is still in progress. During the company's
February 2013 investor day, the company alluded to additional re-
organization efforts in 2014. Fitch believes that this might
require the hiring of additional specialized sales staff and
other additional costs. While Fitch understands the rationale for
such an investment, the benefits of this might take a number of
years to materialize.

- Recovery Ratings:

Fitch has revised downwards its assumptions that derive the
recovery ratings. In the case of a hypothetical distressed
scenario, Fitch assumes a post-restructuring EBITDA of
approximately EUR315m. Fitch continues to use a multiple of 5.5x.
Although the lower post-restructuring EBITDA does result in
slightly lower recoveries, the recovery rating of RR2 assigned to
the senior secured debt does not change.

- Strong Brand Name:

Fitch recognizes the strength of the PagesJaunes brand name and
the company's presence in the online segment. This could allow
PagesJaunes to stabilize cash flows at some point. However, Fitch
does not have visibility of when this could occur.

- Positive Cash Flow Generation:

Fitch believes that despite the challenges that PagesJaunes faces
in its continued transition towards a digital media company, the
issuer is still expected to generate positive cash flows and meet
its debt service requirements until the significant bullet debt
repayments that are due in 2015.


Positive: Future developments that could lead to positive rating
actions include:

- If the company makes progress in refinancing its 2015
   maturities, then Fitch envisages revising the Outlook to

- Stabilization in PagesJaunes' GOM and cash flow generation

- Sustained internet revenue growth and no significant erosion
   in EBITDA margin

Negative: Future developments that could lead to negative rating
action include:

- Dramatic reduction in online revenues, as well as an erosion
   in profitability of the online segment

- FFO net leverage more than 6x

- Negative net free cash flow generation


The refinancing transaction at the end of 2012 pushed most of
PagesJaunes' large 2013 maturities to 2015, resulting in a more
favorable maturity profile for the group. However, the company
now has a significant maturity of EUR1.2 billion in 2015. The
company generated a pre-dividend free cash flow margin of 17% in
2012, which is strong for the current rating and, aided by the
presence of the 3x dividend restrictions and the cash sweep of
75% of excess cash flow, should help the company to deleverage as
it approaches this wall of debt.

SEAFRANCE SA: Eurotunnel to Fight Antitrust Review of Ship Buy
Stewart Bishop of BankruptcyLaw360 reported that Groupe
Eurotunnel SA on Tuesday said it will challenge a U.K. antitrust
regulator's stance that its EUR65 million (US$86 million)
purchase of three ships from collapsed ferry company SeaFrance SA
could lead to higher prices in the market for transport across
the English Channel.

The report related that the Competition Commission said earlier
Tuesday that by adding ferry services to Eurotunnel's existing
Channel Tunnel business, the company would boost its already high
share of the cross-Channel transport market, restricting

SeaFrance is the operator of the undersea rail link between
Britain and continental Europe.

The Commercial Court in Paris has ordered the full liquidation of
SeaFrance on the Jan. 9, 2012.  As a result, the company is no
longer able to trade.


E-STAR ALTERNATIVE: Polish Unit Acquires HUF760-Mil. Debt
MTI-Econews reports that E-Star Polska has purchased a
HUF760 million debt earlier claimed from E-Star Alternative by
Raiffeisen Bank for about HUF310 million.

E-Star Alternative said on Wednesday that in addition to the
substantial discount, the importance of the transaction lies in
the fact that the bulk of these receivables constitutes the
single secured creditor claim against the troubled company,
MTI-Econews relates.

The first reorganization plan proposed by E-Star would have
ensured return of 100% of the principal part of the secured
claims over two years, MTI-Econews notes.

E-Star, which has been under bankruptcy protection since last
December, announced on February 5 that creditors rejected the
company's proposals to  extend E-Star's payment deadline by 120
days, MTI-Econews recounts.

E-Star Alternative is a Hungarian energy services company.


HOUSING FINANCING: Iceland Ready to Provide Bailout
Omar R. Valdimarsson at Bloomberg News reports that Housing
Financing Fund said the government would bail out the lender
before it is unable to honor its debts.

"There's no risk of a default," Bloomberg quotes Sigurdur Jon
Bjornsson, chief financial officer of the Reykjavik-based Housing
Financing Fund, as saying in an interview late on Wednesday.
"The Treasury, if it needed to, would bail out the fund."

The comments follow Moody's Investors Service decision on
Wednesday to downgrade HFF to junk, Bloomberg relates.  According
to Bloomberg, Moody's cited the fund's capital shortfall and
growing loan losses.

Iceland, which let its biggest banks default on US$85 billion in
2008, said in November it's ready to inject ISK13 billion
(US$100 million) into state-backed HFF to keep the lender afloat,
Bloomberg recounts.

The lender, which provides mortgages that are linked to the
inflation rate, is losing business to commercial rivals such as
Arion Bank hf and Islandsbanki hf, which are unfettered by such
indexation, Bloomberg discloses.  As inflation hovers above 4%,
borrowers have turned away from HFF and sought alternative home
loans to prevent their debt burdens growing with consumer prices,
Bloomberg notes.

Mr. Bjornsson, as cited by Bloomberg, said that HFF's small
capital buffer doesn't pose a threat to its survival.

"We're discussing a very large fund," Bloomberg quotes
Mr. Bjornsson as saying.  "In comparison with other financial
institutions it has lost about 5% of its assets, while other
asset portfolios were written down by between 45% and 65%.  These
5% aren't enough to bring down the fund."

Housing Financing Fund is Iceland's biggest mortgage bank.


ANGLO IRISH: Probe Into E&Y's Behavior as Auditor to Continue
Vincent Ryan at Irish Examiner reports that despite the
liquidation of IBRC, regulators are still planning to go ahead
with an investigation into Ernst & Young's behavior as auditor of
Anglo Irish Bank.

The Chartered Accountants Regulatory Board is investigating Ernst
& Young for its role while auditors to Anglo Irish Bank, Irish
Examiner discloses.

KPMG has since been appointed as the special liquidator to IBRC,
the entity which took over the winding down of Anglo Irish Bank,
Irish Examiner relates.

In response to a parliamentary question from Sinn Fein's finance
spokesperson Pearse Doherty, Finance Minister Michael Noonan
confirmed that the liquidation of IBRC will not interfere with
the investigation into Ernst & Young's actions as Anglo Irish
Bank's auditor, Irish Examiner discloses.

According to Irish Examiner, a spokesperson for the board said
that its investigation into Ernst & Young began in 2011 but that
the investigation had been put on hold until the Director of
Public Prosecutions finishes criminal investigations into Anglo
Irish Bank.

A date for when the investigation might resume and when findings
can be expected remain unclear as the DPP is unwilling to comment
on any ongoing cases, Irish Examiner notes.

Anglo Irish Bank was an Irish bank headquartered in Dublin from
1964 to 2011.  It went into wind-down mode after nationalization
in 2009.  In July 2011, Anglo Irish merged with the Irish
Nationwide Building Society, with the new company being named the
Irish Bank Resolution Corporation.


EDISON SPA: Fitch Lifts Long-Term IDR From 'BB'; Withdraws Rating
Fitch Ratings has upgraded Edison Spa's Long-term Issuer Default
Rating (IDR) and senior unsecured ratings to 'BBB-' from 'BB' and
the Short-term IDR to 'F3' from 'B'. The Outlook on the Long-term
IDR remains Positive.

Simultaneously, Fitch has withdrawn all of Edison's ratings
because the ratings are no longer considered by Fitch to be
relevant to the agency's coverage. Following restructuring of
Edison's shareholder structure in 2012, Electricite de France
(EDF 'A+'/Stable) holds 97.4% of the capital and 99.48% of the
voting rights of Edison's ordinary shares were delisted, but its
notes remain outstanding. Edison has been fully consolidated into
EDF's group since H212.

The upgrade of the ratings to 'BBB-', reflects an upgrade of
Edison's standalone rating to 'BB+' from 'BB-', and includes a
one-notch uplift reflecting the links with the parent, assessed
in accordance with Fitch's Parent and Subsidiary Linkage
methodology. The improvement of its standalone profile reflects
Edison's stronger credit metrics in 2012 as well as its liquidity
position that benefited from the cash proceeds from the sale of
Edipower Spa and the reimbursement of Edipower's shareholders'
loan, which totaled EUR1.2 billion. Fitch's estimates funds from
operations (FFO) to adjusted net debt at YE12 to have been below
3.0x from 7.1x at YE11 while FFO interest coverage improved to
above 5.0x from 2.5x over the same period.

The Positive Outlook reflects the potential for stronger links
with EDF upon full integration of operating, treasury and trading
functions, possibly including central funding once the
outstanding debt is repaid. The current uplift reflects EDF's
liquidity support received for the repayment of Edison's EUR700
million club deal bank facility that was repaid with cash
proceeds from the sale of Edipower as well as the transfer to EDF
of certain of Edison's treasury management functions established
in September 2012.

Edison's future bank and bond maturities include a EUR1.5 billion
syndicated bank facility due in April 2013, a EUR700 million bond
due in 2014 and EUR500 million and EUR600 million bonds due in
2015 and 2017 respectively.

Despite Edison's improved operating performance and de-leveraging
which occurred in 2012, the standalone rating reflects Edison's
relatively high business risk profile given the weak market
environment in which it operates as well as the negative spread
between spot gas price and Edison's long term take-or-pay gas
contracts prices.

Edison's earnings in 2012 benefited from the successful
renegotiation of two gas contracts with a settlement of around
EUR680 million in total (EUR347 million for years prior to 2012)
following the international arbitration procedures with Ras Gas
(LNG gas supplier based in Qatar) and ENI Spa (gas supply
contract from Libya) respectively. EDF expects a positive outcome
for the gas contract renegotiation with the Algeria-based
Sonatrach. Fitch notes that the renegotiations completed so far
are not conclusive as due to the persistent difficulties in the
Italian gas market that continue to show falling margins, a new
round of contract revisions are already ongoing in order to
restore profitability to these contracts.


KAZKOMMERTSBANK: Fitch Raises Subordinated Debt Ratings to 'B-'
Fitch Ratings has upgraded the subordinated debt ratings of
Kazakhstan's Kazkommertsbank (KKB, 'B'/Stable/'b') to 'B-'/RR5
from 'CCC'/RR6, JSC Russian Standard Bank's (RSB,
'B+'/Stable/'b+') to 'B'/RR5 from 'B-'/RR6, and of Russia's
Locko-bank ('B+'/Stable/'b+') to 'B(EXP)'/RR5 from 'B-(EXP)'/RR6.
Ukraine-based JSC The State Export-Import Bank of Ukraine's
(Ukreximbank) (Ukrexim, 'B'/Stable/'b') subordinated debt rating
has been affirmed at 'CCC', and the Recovery Rating on this
instrument revised to 'RR5' from 'RR6'. All these banks' other
ratings were unaffected by the current rating actions.


The rating actions follow the publication in December 2012 of
Fitch's revised criteria 'Assessing and Rating Bank Subordinated
and Hybrid Securities'. According to this criteria, for gone
concern securities that are only supposed to absorb losses upon
failure/at the point of non-viability, the base case notching
will be one below an issuer's Viability Rating (VR) throughout
the rating scale.

As Fitch views KKB, RSB and Locko's subordinated debt issues as
gone concern securities (i.e. designed to absorb losses only at
the point of failure), these are now notched once off the banks'
VRs. Ukrexim's subordinated debt rating remains two notches below
the bank's VR because of additional non-performance risk due to
potential coupon deferral before the point of non-viability.

Fitch's old methodology for rating subordinated debt of issuers
rated 'B+' or lower involved conducting a bespoke break-up
analysis of the bank's balance sheet upon default. This analysis
typcially resulted in forecasted recoveries of zero for
subordinated debt, resulting in the assignment of an 'RR6'
Recovery Rating and a debt rating two notches below the bank's
VR. The revised methodology acknowledges that banks are often not
broken up (liquidated) upon default and that in most (although
not all) cases holders of subordinated debt receive some level of
recoveries when a bank is resolved.

The revision of all four banks' securities' Recovery Ratings to
'RR5' (corresponding to average recoveries of 10%-30%) reflects
this change in approach, and has driven the upgrade of KKB, RSB
and Locko's subordinated debt ratings.

Ukrexim's subordinated debt rating reflects incremental non-
performance risk resulting from the flexibility to defer coupons
in certain circumstances, for example if the bank reports
negative net income for a quarter. The two notch differential
between the bank's VR of 'b' and the subordinated debt rating of
'CCC' therefore reflects one notch for this incremental non-
performance risk and one notch (in line with KKB, RSB and Locko)
for potentially weaker recoveries due to the instrument's


The subordinated debt ratings of each of the four banks could be
upgraded or downgraded if the banks' VRs are upgraded/downgraded.

In addition, Fitch acknowledges that regulatory treatment of bank
failures, and the specifics of bank resolution mechanisms, are
evolving globally, and that these mechanisms are also likely to
develop in Russia, Kazakhstan and Ukraine. If bank resolutions in
these markets consistently result in subordinated debt holders
receiving zero, or negligible, recoveries, then the Recovery
Ratings on subordinated debt could be revised back down to 'RR6',
resulting in downgrades of the debt ratings.


TELCO UAB: S&P Raises Long-Term Corporate Credit Ratings to 'B'
Standard & Poor's Ratings Services said it raised its long-term
corporate credit ratings on Lithuania-headquartered mobile
telecommunications operator UAB Bite Lietuva (Bite) and on its
100% owner Bite Finance International B.V. to 'B' from 'B-'.  S&P
also removed the ratings from CreditWatch, where it placed them
with positive implications on Jan. 29, 2013.  The outlook is

The issue rating on the EUR200 million senior secured floating-
rate notes issued by Bite Finance International B.V. is 'B', in
line with the corporate credit rating on Bite.  At the same time,
S&P withdrew the ratings on Bite Finance International's
EUR172 million senior secured notes and on its outstanding
subordinated notes that have been repaid.

The upgrades reflect the extended maturity profile of Bite's debt
with no maturity until 2017 and, in S&P's opinion, its adequate
liquidity.  The proceeds of the proposed notes were used to repay
the EUR172 million notes due 2014, the outstanding subordinated
floating-rate notes due 2017, the outstanding revolving credit
facility (RCF) maturing in June 2013, and a payment-in-kind (PIK)
note and the related fees and expenses.  The EUR200 million notes
due 2018 were issued on largely the same terms as the
EUR172 million senior secured notes, albeit with a higher coupon.
S&P has assumed in its calculations that the company would manage
the interest-rate risk by entering a fixed-rate interest swap.
S&P expects adjusted net debt to EBITDA at 3.9x and funds from
operations (FFO) to debt to 18% at year-end 2013.

S&P expects Bite's profitability to further improve in 2013
because S&P believes the company could benefit from growth in its
Latvian operations if it continues to gain market share.  In
Latvia, Bite remains a distant No. 3, but its market share by
revenues has grown gradually from 10.8% in June 2010 to 17.4% in
September 2012, according to the company.  In Lithuania, S&P
expects revenues and market share to remain stable.

The stable outlook reflects S&P's opinion that Bite's adjusted
EBITDA margin will continue to improve to about 28.5% in 2013
(from 27% in 2012), mainly on the back of performance in Latvia.
S&P also factors in the group's maintenance of adequate liquidity
and comfortable covenant headroom, and adjusted debt to EBITDA
below 4x.  S&P also expects Bite to hedge its interest rate on
the EUR200 million senior secured floating-rate notes in the near

S&P could lower the ratings if the EBITDA margin contracted
toward 25%, because this would translate to adjusted debt to
EBITDA of 4.5x and FFO to debt below 15% and threaten the group's
cash flow generation.  S&P could also take a negative rating
action if covenant headroom was less than adequate.

Ratings upside is unlikely at this stage given S&P's assessments
of Bite's business risk and financial risk profiles.


GRAND CITY: S&P Assigns 'BB-' Corp. Credit Rating; Outlook Stable
Standard & Poor's Rating Services said that it assigned its 'BB-'
long-term corporate credit rating to Luxembourg-incorporated real
estate investment company Grand City Properties S.A. (GCP).  The
outlook is stable.

The rating on GCP reflects S&P's assessment of the company's
business risk profile as "fair" and its financial risk profile as
"aggressive."  GCP focuses on the German residential real estate
market.  The company owns and manages a property portfolio of
15,000 residential units (including signed pipeline
transactions), mostly located in Nordrhein-Westfalen in the west
of Germany. The company estimates its total annual rental income
at EUR70 million and its portfolio value at EUR655 million.
GCP's business focus is to buy and turn around underperforming
apartment blocks by renovating and re-tenanting the flats.

GCP's "fair" business risk profile reflects S&P's view of the
lower volatility of the German residential sector compared to
other property sectors like commercial real estate.  S&P
considers that GCP's properties benefit from solid demand from a
large pool of tenants in most of its locations across West
Germany.  S&P views the company's operating efficiency, evident
in its high collection and tenant retention rates, as a positive
factor for the rating.

The business risk profile is mainly constrained by the company's
relatively high vacancy rate (17%) and geographic concentration;
the average quality of the apartment blocks; and the likelihood
of ongoing renovation expenses that are necessary to increase the
profitability of the property portfolio.

GCP's "aggressive" financial risk profile reflects its current
leverage of about 60%, which includes the proportional
reconsolidation of joint ventures.  GCP's leverage is high
relative to its European rated peers and is one of the main
rating constraints.

However, in S&P's opinion this is mitigated by: the company's
financial policy that limits leverage at about 55% of the loan-
to-value (LTV) ratio; its policy of fixing interest rates on
loans; and its long-dated debt maturity profile, with no
significant debt maturities until 2016-2017.

"In our opinion, GCP should post stable recurring cash flow and
benefit from stable property yields in 2013.  We take into
account the solid demand from tenants and investors in most of
GCP's asset locations, and our understanding that the company
does not commit to residential acquisitions before it can secure
financing or equity.  Under our base-case scenario for 2013, we
forecast positive like-for-like net rental income and asset
revaluation of about 4%, with stable renovation and financing
costs.  Rating stability depends on GCP maintaining an interest
coverage ratio of more than 1.8x and a debt-to-capital ratio of
less than 65%," S&P said.

S&P could lower the rating if GCP's interest coverage ratio falls
to 1.5x on sustained basis.  S&P believes recurring cash flow
could fall if like-for-like rental income growth declines, if
renovation costs increase, and if the time lag between large
asset acquisitions and disposals widens.  The rating could also
come under pressure from a sharp increase in debt, leading to a
debt-to-capital ratio of more than 65%.  This could occur if the
company undertakes a large leveraged acquisition, experiences
significantly higher renovation capex, or if property yields rise
due to falling investor demand.

Conversely, S&P could raise the rating if GCP is able to post
interest coverage of much more than 2x on a sustained basis.
Factors supporting this level of coverage include sustained
rental income growth, higher return on renovation costs, and a
lower cost of financing.  Equally, S&P could raise the rating if
the debt-to-capital ratio falls to about 55%, most likely due to
high rental growth supporting lower property yield and a higher
amount of equity-financed acquisitions.


E-MAC DE 2005-I: S&P Lowers Rating on Class E Notes to 'CCC'
Standard & Poor's Ratings Services took various credit rating
actions in E-MAC DE 2005-I B.V., E-MAC DE 2006-I B.V., and E-MAC
DE 2006-II B.V.

Specifically, S&P has:

   -- Lowered its ratings on E-MAC DE 2005-I's class C, D, and E
      notes, E-MAC DE 2006-I's class D and E notes, and E-MAC DE
      2006-II's class D and E notes;

   -- Lowered and placed on CreditWatch negative its ratings on
      E-MAC DE 2005-I's class B notes, E-MAC DE 2006-I's class A,
      B, and C notes, and E-MAC DE 2006-II's class B and C notes;

   -- Affirmed its rating on E-MAC DE 2005-I's class A notes.

The rating actions are due to the ongoing poor performance of
these transactions.

To date, E-MAC DE transactions show the highest arrears levels of
all of the German residential mortgage-backed securities (RMBS)
transactions that S&P rates.  Total arrears (loans in arrears for
more than 30 days) in the E-MAC DE 2005-I, E-MAC DE 2006-I, and
E-MAC DE 2006-II transactions have been increasing since closing.
Total arrears now amount to what S&P considers to be high levels
of between 11.6% and 14.2% of the current outstanding balances,
compared with levels of between 9.8% and 12.2% in April 2010 when
S&P applied new stresses to the transaction.

The servicer, Paratus AMC GmbH, does not report defaulted loans
and loans in foreclosure.  Therefore, in S&P's analysis, as an
approximate equivalent it has considered the development of 150+
days delinquencies, which amount to between 8.4% and 10.9% of the
current outstanding balances as per the latest payment date in
November 2012.

The reserve funds in E-MAC DE 2005-I and 2006-II are fully or
almost fully funded.  However, due to insufficient funds
available in the waterfall, the reserve fund for E-MAC DE 2006-I
has been drawn constantly and decreased further, to approximately
10% of its target level, since S&P last reviewed the transaction
on Nov. 7, 2011.

The low average recovery rate of between 44% and 51% severely
affects S&P's loss severity assumptions.  Since closing, reported
net losses have increased to about 2.7% of the closing balance in
E-MAC DE 2005-I and E-MAC DE 2006-II, and to about 4.2% in E-MAC
DE 2006-I.  However, the high and increasing arrears figures
suggests to S&P that there is potential for further losses.

The downgrades and CreditWatch negative placements are due to the
ongoing poor performance of the transactions.

S&P has affirmed its 'AA- (sf)' rating on E-MAC DE 2005-I's class
A notes, because S&P considers the current level of credit
enhancement to be commensurate with the current rating.

S&P expects to resolve the CreditWatch placements after it has
received further information from the servicer relating to
arrears and foreclosures, at which time S&P will perform further
credit and cash flow analysis on these transactions.

These three E-MAC DE transactions are true sale German RMBS
transactions, originated and serviced by Paratus AMC (previously


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:



Class                Rating
            To                    From

E-MAC DE 2005-I B.V.
EUR301.5 Million Mortgage-Backed Floating-Rate Notes

Ratings Lowered

C           B- (sf)               BB (sf)
D           CCC+ (sf)             B (sf)
E           CCC (sf)              B- (sf)

Rating Lowered and Placed On CreditWatch Negative

B           BBB (sf)/Watch Neg    A- (sf)

Rating Affirmed

A           AA- (sf)

E-MAC DE 2006-I B.V.
EUR502.5 Million Mortgage-Backed Floating-Rate Notes

Ratings Lowered

D           CCC (sf)              B- (sf)
E           CCC- (sf)             CCC (sf)

Ratings Lowered and Placed On CreditWatch Negative

A           A (sf)/Watch Neg      AA- (sf)
B           BB- (sf)/Watch Neg    BBB (sf)
C           B (sf)/Watch Neg      BB- (sf)

E-MAC DE 2006-II B.V.
EUR703.5 Million Mortgage-Backed Floating-Rate Notes

Ratings Lowered

D           CCC+ (sf)             B (sf)
E           CCC (sf)              B- (sf)

Ratings Lowered and Placed On CreditWatch Negative

B           BB+ (sf)/Watch Neg    BBB (sf)
C           B (sf)/Watch Neg      BB- (sf)


ATLAS TELECOM: Judiciary Administrator Sells Fiber Network
According to Telecompaper, local paper Ziarul Financiar reported
that Global Money Recovery, the judiciary administrator of Atlas
Telecom Network, which is now insolvent with debts of around
EUR70 million, has sold Atlas' optical fiber network to a company
from the capital Bucharest.

Ziarul Financiar cited Horia Cristian Tiril, the lawyer handling
the case at GMR, as its source.

Atlas was the first player on the fixed telephony market to enter
into competition with Romtelecom in 2003, Telecompaper recounts.
Telecompaper notes that a report by GMR disclosed that the
company entered into insolvency in 2011.

Atlas Telecom Network is a Romanian fixed operator.  Atlas
Telecom's telecommunications infrastructure has around 2,500
kilometers, of which about 1,000 kilometers were fiber.
According to a September 2012 report from GMR, Atlas' network
covered Arad, Timis, Sibiu, Cluj, and Bihor.

MECHEL TARGOVISTE: Files for Insolvency
Florentina Dragu at Ziarul Financiar reports that Mechel
Targoviste said in a statement on Wednesday the company has filed
for insolvency with a view to restart activity once its
restructuring process is complete.

Mechel Targoviste is a Romanian steel maker.


* SLOVENIA: New Government May Lead Nation Into Bankruptcy
Boris Cerni at Bloomberg News reports that Prime Minister Janez
Jansa said a new Slovenian government formation to replace the
minority administration would probably lead the nation into
bankruptcy this year.

The parties that are trying to form a new Cabinet and topple the
current one "don't know exactly what they are going to do and I
am afraid that if we see such an outcome, the agony will continue
and we will be close to bankruptcy this year," Bloomberg quotes
Mr. Jansa as saying in an interview with public broadcaster TV
Slovenija late on Wednesday.

Mr. Jansa, as cited by Bloomberg, said that the other option is
to agree on the most important tasks to be carried through with
the current government and then decide on the timing of an early

Slovenia, a member of the euro region, was plunged into political
uncertainty last month over corruption allegations against Jansa
that prompted two of his coalition partners to abandon the
Cabinet, increasing the risk of an early vote and a possible
bailout, Bloomberg discloses.


IM CAJAMAR: Fitch Affirms 'CCsf' Rating on Class E Certs.
Fitch Ratings has placed three tranches of three Spanish RMBS
transactions on Rating Watch Negative (RWN) and maintained RWN on
six tranches. The agency also affirmed three tranches with
ratings below 'Bsf'.

The rating actions reflect concerns over the recent trends in
recoveries received from the sale of underlying assets across
most Fitch-rated RMBS transactions. These recent trends have
resulted in Fitch's decision to review the assumptions and
performance of the sector as a whole.

Fitch will publish further commentary on the updates to the
analysis of Spanish RMBS in the coming weeks.

The rating actions are:

IM Cajamar 5, FTA
Class A (ISIN ES0347566004): 'Asf'; RWN maintained
Class B (ISIN ES0347566012): 'Asf'; RWN maintained
Class C (ISIN ES0347566020): 'Asf'; RWN maintained
Class D (ISIN ES0347566038): 'BBsf'; placed on RWN
Class E (ISIN ES0347566046): affirmed at 'CCsf'; Recovery
Estimate 10%

IM Cajamar 6, FTA
Class A (ISIN ES0347559009): 'Asf'; RWN maintained
Class B (ISIN ES0347559017): 'Asf'; RWN maintained
Class C (ISIN ES0347559025): 'BBBsf'; placed on RWN
Class D (ISIN ES0347559033): affirmed at 'CCCsf'; Recovery
Estimate 35%
Class E (ISIN ES0347559041): affirmed at 'CCsf'; Recovery
Estimate 0%

Class A (ISIN ES0347139000): 'BBB+sf'; RWN maintained
Class B (ISIN ES0347139018): 'BBBsf'; placed on RWN

U N I T E D   K I N G D O M

A SUIT THAT FITS: Exits Administration After Pre-Packaged Sale
Jonathan Moules at The Financial Times reports that A Suit That
Fits was rescued through a pre-packaged sale of assets to DW
Clothing -- a company wholly owned by turnaround specialist Keith
Watson -- and the settlement of a GBP350,000 claim from the
Nepalese manufacturer of its garments.

The company was able to continue trading under its existing name,
the FT notes.

In December, the company was forced to call in the
administrators, after HM Revenue & Customs finally lost patience
over an unpaid tax bill, the FT recounts.  Bailiffs were
appointed by the tax authority to repossess sewing machines and
other equipment at the company's London headquarters, in an
attempt to recover the GBP96,000 debt, the FT relates.

Employees and suit wearers aside, not everyone has welcomed the
pre-pack deal, the FT says.

In the case of A Suit That Fits, dozens of suppliers were left
out of pocket, including the company's bank RBS, which was owed
just over GBP200,000 at the time of the administration, the FT

Competitors felt aggrieved, too, the FT states.  The owner of a
rival tailoring business, who asked remain anonymous, told the FT
he was angry that A Suit That Fits had been rescued, after it had
driven prices down in the industry by pursuing an unsustainable
business model.

Until now, many lossmaking companies -- as A Suit That Fits was
ahead of its administration -- have been able to continue trading
by agreeing "time to pay" repayment schedules for outstanding tax
bills with HMRC, the FT discloses.

A Suit That Fits is a tailoring business set up by school friends
David Hathiramani and Warren Bennett in 2006.

HMV GROUP: Administrators Close 37 More Stores; 464 Jobs Affected
BBC News reports that Deloitte said it is to close a further
37 stores of HMV Group leading to the loss of 464 jobs.

The closures, to take place over the next four to six weeks, come
on top of the 66 stores already set to be shut, BBC discloses.

HMV currently has 219 stores in the UK, so the latest move means
almost half its branches in the UK will be closed, BBC notes.

"This step has been taken in order to enhance the prospects of
the restructured business continuing as a going concern," BBC
quotes Nick Edwards, one of the joint administrators, as saying

                        About HMV Group

United Kingdom-based HMV Group plc is engaged in retailing of
pre-recorded music, video, electronic games and related
entertainment products under the HMV and Fopp brands, and the
retailing of books principally under the Waterstone's brand.  The
Company operates in four segments: HMV UK & Ireland, HMV
International, HMV Live, and Waterstone's.

On Jan. 14, HMV Group went into administration after suppliers
refused a request for a GBP300 million lifeline for the company.
Deloitte was appointed as administrator to the chain, which was
hit by growing competition from online rivals, supermarkets, and
illegal downloads.  Deloitte is currently in talks with potential
buyers of the business, which has 223 UK stores in total, and a
workforce of about 4,000.

The administrators received "well over 50" expressions from
parties interested in buying HMV as a going concern.  Hilco, a
restructuring specialist, emerged as one of the front runners.
Potential bidders include video game retailer Game, private
equity firm Endless, Jon Moulton's Better Capital as well as
Oakley Capital.  No deadline has been set for formal bids for

On Jan. 22, Hilco acquired the bank debt of HMV, effectively
giving it control and paving the way for a rescue of the company.
Hilco had acquired the debt from the group's lenders, Lloyds and
Royal Bank of Scotland for about GBP40 million.  HMV had
underlying net debt of GBP176 million as at the end of October.

On Feb. 4, around 200 jobs were secured after HMV's
administrators offloaded the company's last remaining music and
entertainment venues.  HMV's majority shareholding in G-A-Y
Group, which comprises a number of bars and Heaven nightclubs,
was sold to the founder and other shareholder in the business,
Jeremy Joseph.

On Feb. 7, Deloitte announced the closure of 66 lossmaking HMV
stores, resulting in the loss of 930 jobs, taking the company's
headcount nationwide to about 3,000.

                         Irish Operations

On Jan. 16, HMV's operation in the Irish Republic, which employs
300 people, was put into receivership.  A total of 16 HMV outlets
were closed in Ireland.  Deloitte, which was appointed receiver,
is also attempting to secure a purchaser for the Irish stores.

* UK: Insolvency Service Budget Cuts Affect Enforcement Activity
Jane Wild at The Financial Times reports that MPs have said
delinquent directors are escaping sanction for misconduct and
criminality because cuts to the Insolvency Service budget have
left it too impoverished to pursue all cases of wrongdoing.

According to the FT, the Commons' business, innovation and skills
committee said in a report on Feb. 6 that the inability to
prosecute and censure misbehavior was damaging confidence in the

"The aim must be to disqualify or sanction all directors found
guilty of misconduct, and the funding necessary to achieve this
should be provided," the FT quotes Adrian Bailey, chairman of the
committee, as saying.  "Any dilution of enforcement activity
sends completely the wrong message."

The service had its budget cut by 11% in the year to March 2011,
the FT discloses.  Some 470 of its staff, or 18% of the
workforce, were made redundant during that year and about 40
freelance investigators were dropped, the FT states.  Further job
losses followed, the FT notes.

MPs warned that any further cuts would leave the service at risk
of being unable to cope, the FT says.  According to the FT,
without more funds, offenders would continue to go unchecked and
confidence in the service would decline further.

Despite some high-profile business failures, casework has
declined sharply during the past three years, the FT relates.

Analysts had put the low rate of company insolvencies compared
with previous recessions down to so-called zombie businesses,
sustained only by low interest rates and the forbearance of
creditors, the FT discloses.

* UK: Pre-Packaged Administration Deals Attract Controversy
Jonathan Moules at The Financial Times reports that pre-packaged
administration deals have attracted controversy because of the
effect they have on suppliers and competitors.

Under a pre-pack, a company goes into a formal insolvency
process, but can emerge days later under new ownership in
pre-arranged a sale, having shed liabilities but retained assets
-- leaving creditors worse off, the FT discloses.

Others defend pre-packs, though, and the "phoenix" companies they
create, the FT notes.

"While it may appear at first blush to be unfair to creditors to
receive a low or nil return, one should not lose sight of the
fact that, if that company were in fact not rescued and placed
into liquidation, a worse result would be achieved," the FT
quotes Sarah McLennan, lawyer in the business litigation group of
law firm Faegre Baker Daniels, as saying.

"Often the only people willing to buy a company out of insolvency
are those who were running the old company," Ms. McLennan, as
cited by the FT, said.  "Jobs can, and often are, saved by
companies being rescued like this."

Until now, many lossmaking companies -- as A Suit That Fits was
ahead of its administration -- have been able to continue trading
by agreeing "time to pay" repayment schedules for outstanding tax
bills with HMRC, the FT discloses.

According to the FT, data from Syscap, an independent finance
provider, showed that more companies are expected to find them in
this position.

Syscap says it received 480 requests for funding from businesses
needing help meet their January 31 tax payments, up from 300
requests the previous year, the FT discloses.

"HMRC is under a lot of pressure to get the tax that they are
owed in as quickly as possible," the FT quotes Philip White,
Syscap's chief executive, as saying.  "That means they have to
put a lot of pressure on all businesses to pay their tax bill as
quickly as possible."

HMRC used its powers to seize property to meet unpaid bills,
10,577 times in the year ending March 2012, according to figures
obtained by Syscap, the FT discloses.  That was almost double the
5,520 uses of this power of "distraint" in the previous 12
months, the FT notes.

The FT relates that Matt Swan, chairman of the chartered
surveying business Plowman Craven, said if more companies seek
pre-pack deals as a result, not all will be undeserving.

"[Pre-pack administration] is a wretched business," Mr. Swan, as
cited by the FT, said.  He said nevertheless, having been through
the process, it is often the only way to save a company that has
got into trouble but remains fundamentally sound, the FT notes.


* Plain Packaging Biggest Risk for Tobacco Firms, Fitch Says
Plain cigarette packaging of the type proposed this week by New
Zealand could be particularly damaging to manufacturers' pricing
power if replicated in other countries, Fitch Ratings says. While
plain packaging legislation is the biggest regulatory risk facing
the tobacco industry, it is still unclear how many other
countries may follow suit.

Fitch says, "We believe the biggest impact if bigger tobacco
markets were to successfully introduce similar rules would be on
manufacturers that sell premium and above-premium cigarette
brands. As all tobacco packages would look the same, their added
appeal would fade, potentially reducing the price difference
between brands. Loss of pricing power would be particularly
concerning for tobacco companies as it is the ability to increase
prices that has allowed them to maintain growth despite falling
volumes. Another effect that is difficult to predict is the risk
of a widespread pickup in illicit trade, as packages become more
vulnerable to being forged.

"Any similar rules in major European markets would be likely to
have the biggest impact on Philip Morris International, because
its portfolio is skewed towards premium brands, and Imperial
Tobacco, which has lower-priced brands but relies on Europe for a
bigger overall proportion of sales.

"We believe politicians in many European countries could be in
favor of introducing plain packaging. But any attempt to do this
would be met with multiple legal challenges similar to those
being brought against Australia - the first country to implement
rules of this type, in December 2012. The extent and speed with
which other countries might follow is therefore unclear and would
depend on the extent to which the courts or arbitration panels
could see plain packaging as an infringement of companies'
intellectual property or a breach of trade agreements.

"Plain packaging rules are unlikely in the US in the short to
medium term, after the success tobacco companies had in fighting
a less severe challenge to intellectual property such as graphic
warning labels.

"Any change is likely to be very slow and our ratings therefore
only factor in expectations of falling pricing power for the
relatively small Australian market. However, they do factor in
other regulatory pressures that are more certain. These include
the gradual extension of smoking and advertising restrictions and
higher excise regimes in the developing markets of eastern
Europe, Asia and Latin America. These pressures in emerging
markets will be more than offset in the short term by the trend
for consumers in these countries to move on to more expensive
products and brands."

* 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

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

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

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  Go to 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., Washington, D.C., 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 2013.  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$775 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 215-945-7000 or Nina Novak at

                 * * * End of Transmission * * *