/raid1/www/Hosts/bankrupt/TCREUR_Public/130321.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
E U R O P E
Thursday, March 21, 2013, Vol. 14, No. 57
Headlines
C Y P R U S
BANK OF CYPRUS: Fitch Places 'B' Long-Term IDRs on Negative Watch
* CYPRUS: Government Works on Alternative Rescue Plan
D E N M A R K
TORM A/S: Annual General Meeting Scheduled for April 11
F R A N C E
REXEL SA: Moody Rates Proposed Senior Unsecured Notes '(P)Ba3'
REXEL SA: Fitch Assigns 'BB' Rating to EUR500-Mil. Notes Issue
SAUR SA: Banks Want Full Control of Mother Company
H U N G A R Y
BUDAPEST BANK: Moody's Downgrades Deposit Ratings to 'Ba3'
I R E L A N D
CONNEMARA MINING: Shareholder Files Winding-Up Petition
IRISH BANK: Liquidators to Work with NAMA & Capita
* IRELAND: Bank Provisions Likely to Stay High, Fitch Says
I T A L Y
TELECOM ITALIA: Fitch Assigns 'BB+' Rating to Capital Securities
K A Z A K H S T A N
BTA BANK: Can Recover US$2-Bil. in Assets From Ex-Chairman
L U X E M B O U R G
COSAN LUXEMBOURG: Fitch Rates New BRL350MM Notes Add-on 'BB+'
INTELSAT LUXEMBOURG: S&P Rates US$1.5BB Notes Due 2021 'CCC+'
XUTHUS: S&P Withdraws 'BB+' Rating on Class C Notes
N E T H E R L A N D S
NOKIA SIEMENS: Moody's Assigns 'B2' CFR & Rates EUR600MM Notes B2
TELECOM EQUIPMENT: S&P Assigns 'B+' Long-Term Corp. Credit Rating
P O L A N D
CENTRAL EUROPEAN: "Favorably Inclined" to Roust Proposal
CENTRAL EUROPEAN: S&P Lowers Corporate Credit Rating to 'SD'
R U S S I A
CREDIT BANK: S&P Affirms 'B+/B' Ratings; Outlook Positive
S P A I N
DEPORTIVO LA CORUNA: Owes US$201 Million, AD Cryex Report Reveals
RENTA CORP: To Work with Sareb After Creditor Protection Filing
* SPAIN: Banks Pull Plug on Zombie Developers
U K R A I N E
BANK KHRESCHATYK: Fitch Affirms 'B-' Long-Term Currency IDRs
KCA DEUTAG: Moody's Assigns (P)B3 Rating to US$860MM Notes Issue
X X X X X X X X
* Moody's Releases March Report on European RMBS, ABS and Bonds
* Upcoming Meetings, Conferences and Seminars
*********
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C Y P R U S
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BANK OF CYPRUS: Fitch Places 'B' Long-Term IDRs on Negative Watch
-----------------------------------------------------------------
Fitch Ratings has placed the ratings of Bank of Cyprus, Cyprus
Popular Bank and Hellenic Bank on Rating Watch Negative to
reflect downside rating risks arising from the deliberations to
impose losses onto the banks' depositors. Ratings placed on
Negative Watch include the entities' 'B' Long-term Issuer Default
Ratings (IDRs) and the 'c' (BOC, CPB) and 'cc' (HB) Viability
Ratings.
Such losses would be part of an agreement the Eurogroup (European
Union finance ministers) reached with Cypriot authorities on
Saturday March 16, 2013 as a precondition to provide EUR10
billion in financial assistance to Cyprus. Initially, Cyprus
agreed to impose 'levies' of 9.99% on all deposits over
EUR100,000 and of 6.75% on deposits below that level, although
subsequent newsflow suggests that these thresholds may be subject
to change, with a view to protect smaller deposits.
RATING DRIVERS AND SENSITIVITIES - IDRs, SRs and SRFs
The Negative Watches will be resolved after a decision by the
Cypriot parliament on the above extraordinary measures, which
could come as early as today. The crystallization of such
significant losses on depositors would constitute a restricted
default (RD) under Fitch's rating definitions, in which case the
IDRs would be downgraded to 'RD'. The banks' Support Ratings and
Support Rating Floors would also be downgraded to '5' and 'No
Floor'.
RATING DRIVERS AND SENSITIVITIES - SENIOR DEBT
Although senior debt securities are not currently the subject of
the levy deliberations and so would not automatically be
downgraded upon the imposition of a deposit levy, their ratings
have also been placed on Negative Watch to reflect the heightened
risk of some form of negative rating action or default under
Fitch's definitions because of the crisis in the Cypriot banking
sector.
RATING DRIVERS AND SENSITIVITIES - VIABILITY RATINGS
The Negative Watch on the banks' VRs reflect the likelihood that
they would be downgraded to 'f' in the event that the IDRs are
downgraded to RD.
The following ratings have been placed on Negative rating Watch:
BOC
Long-term IDR: 'B'
Short-term IDR: 'B'
Viability Rating: 'c'
Support Rating: '4'
Support Rating Floor: 'B'
Senior notes: 'B'/RR4' Commercial paper: 'B'
CPB
Long-term IDR: 'B'
Short-term IDR: 'B'
Viability Rating: 'c'
Support Rating: '4'
Support Rating Floor: 'B'
Senior notes: 'B'/RR4'
HB
Long-term IDR: 'B'
Short-term IDR: 'B'
Viability Rating: 'cc'
Support Rating: '4'
Support Rating Floor: 'B'
* CYPRUS: Government Works on Alternative Rescue Plan
-----------------------------------------------------
The Associated Press reports that the Cypriot government and the
country's central bank were working yesterday on an alternative
proposal to stave off bankruptcy, a day after Parliament rejected
an initial plan to raise billions of euros by seizing up to 10%
of people's bank savings.
According to the report, government spokesman Christos
Stylianides said a meeting was underway at the central bank to
discuss an alternative plan for raising funds, but also for
reducing the EUR5.8 billion (US$7.5 billion) that must be found
domestically.
The bank's deputy governor Spyros Stavrinakis said no decision
had been taken on when banks, which have been shut since the
weekend, would reopen, the AP relates.
Mr. Stavrinakis said that the new plan being worked on has not
yet been presented to the country's euro partners and
International Monetary Fund, the AP notes.
The meetings were taking place a day after lawmakers rejected a
plan to seize up to 10% of people's bank deposits, a key demand
from prospective creditors in exchange for rescue money to save
the Cypriot banking system and shore up the government's
finances, the AP discloses.
The banks remained shut for the third day running and there are
growing expectations that they may not reopen until next week,
certainly not until Cypriot authorities come up with a credible
financial package that has the blessing of the European
Commission, the European Central Banka and the IMF, the so-called
troika, the AP states. The package must also win approval from
lawmakers, the AP notes.
Mr. Anastasiades was also due to meet with representatives from
the creditors yesterday, the AP discloses.
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D E N M A R K
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TORM A/S: Annual General Meeting Scheduled for April 11
-------------------------------------------------------
Flemming Ipsen of Chairman of the Board of Directors of TORM A/S
disclosed that shareholders in the Company are invited to the
Annual General Meeting (AGM) on Thursday, April 11, 2013 at 10:00
am CET at Radisson Blu Falconer Hotel, Falkoner Alle 9, DK-2000
Frederiksberg.
Agenda and Complete Proposals
The agenda and complete proposals from the Board of Directors are
enclosed.
The Board of Directors would like to highlight proposal 7.b.
regarding an authorization to terminate the Company's American
Depositary Receipt program and in this connection allow the
Company to acquire own shares as well as delist the Company's
American Depository Shares from Nasdaq Capital Market, USA, and
deregister the Company's securities under the U.S. Securities
Exchange Act of 1934, as amended. The Board of Directors finds
that it would be in the interest of the Company due to the
limited size of the ADR program and the costs involved with a
listing on Nasdaq and the reporting and filing obligations under
the U.S. Exchange Act. The ADR program represents approximately
0.5% of the Company's total share capital, following the capital
increase carried out in connection with the Company's
restructuring in November 2012.
Introduction of Electronic Communication
The Board of Directors has decided to exercise the authorization
to introduce electronic communication with effect from April 12,
2013.
The Board of Directors hopes that you as a shareholder will
support TORM by participating in the AGM or by submitting your
vote either by proxy or postal vote.
NOTICE CONVENING THE ANNUAL GENERAL MEETING
Notice is hereby given in accordance with Article 5 of the
Articles of Association of TORM A/S (CVR no. 22460218) that the
Annual General Meeting (AGM) will be held on Thursday, April 11,
2013 at 10:00 am (CET)at Radisson Blu Falconer Hotel, Falkoner
Alle 9, DK-2000 Frederiksberg with the following
AGENDA
1. The Board of Director's report on the activities of the
Company in the past year
2. Adoption of the Annual Report for 2012
3. The Board of Director's proposal for provision for losses in
accordance with the adopted Annual Report
4. Resolution to discharge the members of the Board of Directors
and the Executive Management from liability
5. Election of members to the Board of Directors
6. Appointment of auditor
7. Proposals from the Board of Directors
a. Approval of the level of remuneration of the Board of
Directors for the year 2013
b. Authorization of the Board of Directors to terminate the
Company's American Depositary Receipt program and in this
connection allow the Company to acquire own shares as well
as delist the Company's American Depository Shares from
Nasdaq Capital Market, USA and deregister the Company's
securities under the U.S. Securities Exchange Act of 1934,
as amended
8. Any other business
Adoption requirements
The AGM is only legally competent to transact business when at
least one-third of the share capital is represented (quorum), see
also Article 10.1 of the Articles of Association.
Adoption of the proposals under items 2, 3, 4, 6, 7.a and 7.b is
subject to a simple majority of votes, see also Article 10.2 of
the Articles of Association. No board members are up for re-
election pursuant to Article 12.2 of the Articles of Association,
and no further board members are proposed by the Board of
Directors to be elected by the AGM under item 5.
Form of Notice and Availability of Information
Notice convening the AGM will be sent to all shareholders
registered in the Company's register of shareholders and/or ADR
holders who have registered their holdings with the Company and
who have so requested. Notice will also be announced through the
Danish Business Authority's IT system and on the Company's
Web site, http://www.torm.com
This notice including the agenda, the complete proposals,
information on the total number of shares and voting rights on
the date of the notice and the forms to be used for proxy voting
and postal voting and documents to be presented at AGM including
the Company's Annual Report for 2012, will be available at the
offices of the Company and on the Company's Web site,
http://www.torm.com in the period from Wednesday, March 20, 2013
at the latest and until and including the date of the AGM.
Restructuring Agreement
Since 2010, TORM has worked on improving the Company's capital
structure and liquidity situation by seeking to tap into
different corporate bond markets and through other measures.
Mainly due to the Company's strategic position as a spot-oriented
company, low freight rates and the generally challenging
conditions in the capital markets, TORM was unable to obtain this
type of financing. With the continuously low freight rates and
cyclically low vessel values since fall 2011, TORM's Board of
Directors did not find it prudent to inject new equity in the
Company at the time without substantial amendments to the
existing credit facilities. In October 2011, TORM therefore
presented a proposal to the banks that combined an equity
injection of US$100 million with subscription rights for existing
shareholders and a bank moratorium. The proposal was not
accepted by the banks, but the Company achieved a standstill
agreement with the banks, which was extended several times during
2012 to ensure that a long-term, comprehensive financing solution
was found and implemented.
Throughout the whole process, TORM's Board of Directors and
Executive Management have worked on avoiding bankruptcy or other
in-court solutions in Denmark or abroad in order to best preserve
value and put all stakeholders in the best possible position.
However, the process also involved detailed negotiations and
preparations for a suspension of payments, including under the US
"Chapter 11" rules. In the spring of 2012, TORM also succeeded
in obtaining conditional offers from reputable, international
shipping investors as well as institutional investors, who were
prepared to make new investments in the Company provided that
substantially amended bank terms were agreed. However, the banks
chose not to enter into substantive negotiations with any of
these investors as they did not find the investor proposals
sufficiently attractive.
Since the fourth quarter of 2011 the Company's liquidity
situation has been very tight, and the total bank debt could be
called at any time at the banks' discretion due to non-compliance
with certain financial covenants. Through negotiations with the
bank group during 2012 it became clear that the only achievable
solution with the bank group would not provide immediate debt
relief in the balance sheet nor any new liquid equity
contribution. A solution could be found where TORM gained time
for a potential general market improvement in order to best
preserve shareholder value. Therefore, TORM signed a conditional
agreement in principle with the banks and the major time charter
partners regarding a long-term financing solution as stated in
announcement no. 14 dated April 4, 2012 and elaborated in
announcement no. 20 dated April 23, 2012 and at the Annual
General Meeting.
Completion of the Restructuring Agreement
The conditional agreement in principle formed the basis of the
restructuring agreement, which is very comprehensive and contains
a number of supplementary agreements with individual parties,
including amendments to TORM's existing financing agreements.
During the period from April to November 2012, the final
contractual framework was detailed, documented and completed by
the banks, the group of time charter partners and the Company.
This prolonged process, including the period leading up to this,
was very costly to the Company, but it was preferable to the
alternative. I will now explain the details of the
restructuring.
Content of the Restructuring Agreement - Banks
New Facility
As part of the restructuring, TORM has secured new working
capital of US$100 million until September 30, 2014 with first
lien in the majority of the Company's vessels.
Amended terms and conditions
Through the implementation of the restructuring, the Company's
group of banks has aligned key terms and conditions and financial
covenants across all existing debt facilities, and all maturities
on existing credit facilities have been adjusted to December 31,
2016.
The bank debt remained unchanged at US$1,794 million as of
September 30, 2012. The book value of the fleet excluding
vessels under finance leases as of September 30, 2012 was
US$2,167 million. TORM's quarterly impairment test as of
June 30, 2012 supported the carrying amount of the fleet based on
the same test and principles as used by the Company since the
Annual Report for 2009. Based on broker valuations, TORM's fleet
excluding vessels under finance leases had a market value of
US$1,316 million as of September 30, 2012, which was US$851
million lower than the carrying amount. The recognized equity
amounted to US$358 million as of September 30, 2012.
Going forward, interest on the existing debt will only be paid if
the Company has sufficient liquidity, and otherwise the remainder
will be accumulated until at least June 30, 2014 with potential
extension until September 30, 2014. On average the interest
margin will increase to approximately 240 basis points on the
bank debt. The Company will pay interest on the new working
capital facility until September 30, 2014.
The new financing agreements provide for a deferral of
installments on the bank debt until September 30, 2014, in which
period rescheduled principal amortizations will only be payable
if the Company has sufficient liquidity. Provided that the
Company generates sufficient positive cash flows, certain cash
sweep mechanisms will apply. Annualized minimum amortizations of
US$100 million will commence with effect from September 30, 2014
until December 31, 2016. If vessels are sold, the related
secured debt will fall due.
Changed Legal Group Structure
As part of the restructuring agreement, TORM has implemented
substantial changes to the Company's internal legal group
structure, including transfers of vessels to separate legal
entities in Denmark and Singapore based on the individual loan
facilities. All legal entities are ultimately owned by TORM A/S.
New Financial Covenants
New financial covenants will apply uniformly across the bank debt
facilities and will include:
-- Minimum liquidity: Cash plus the available part of the new
US$100 million working capital facility must exceed US$50
million to be tested from December 31, 2012. This will later
be adjusted to a cash requirement of US$30 million by
September 30, 2014 and US440 million by March 31, 2015.
-- Loan-to-value ratio: A senior loan tranche of US$1,020 million
has been introduced out of the total bank debt of US$1,793
million as of June 30, 2012. The senior tranche must have an
initial agreed ratio of loan to TORM's fleet value based on
broker valuations (excl. vessels under finance leases) at 85%
to be confirmed from June 30, 2013. This will gradually be
stepped down to 65% by June 30, 2016. The remaining bank debt
of US$773 million has been divided into two additional debt
tranches, both with collateral in the Company's fleet.
-- Consolidated total debt to EBITDA: Initial agreed ratio of a
maximum of 30:1 to be tested from June 30, 2013, gradually
stepped down to a 6:1 ratio by June 30, 2016.
-- Interest cover ratio: Agreed EBITDA to interest ratio of
initially a minimum of 1.4x by June 30, 2014, gradually
stepped up to 2.5x by December 31, 2015.
Additional Material Covenants
The terms of the credit facilities will include a catalogue of
additional covenants, including amongst others:
-- A change-of-control provision with a threshold of 25% of
shares or voting rights.
-- No issuance of new shares or dividend distribution without
consent from the banks.
About TORM
With headquarters in Copenhagen, Denmark, TORM (NASDAQ: QMX) is
one of the world's leading carriers of refined oil products as
well as a significant player in the dry bulk market. The Company
runs a fleet of approximately 110 modern vessels in cooperation
with other respected shipping companies sharing TORM's commitment
to safety, environmental responsibility and customer service.
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F R A N C E
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REXEL SA: Moody Rates Proposed Senior Unsecured Notes '(P)Ba3'
--------------------------------------------------------------
Moody's Investors Service assigned a provisional (P)Ba3 rating to
Rexel SA's proposed dual tranche senior unsecured notes due June
2020. The outlook on all Rexel's ratings is negative.
Moody's understands that the proceeds of the new senior unsecured
notes will be used to redeem the 8.25% senior unsecured notes due
2016 and for general corporate purposes.
Moody's issues provisional ratings in advance of the final sale
of securities and these reflect Moody's credit opinion regarding
the transaction only. Upon closing of the transaction and a
conclusive review of the final documentation, Moody's will
endeavor to assign definitive ratings to the Bonds. A definitive
rating may differ from a provisional rating.
Ratings Rationale:
The (P)Ba3 rating assigned to the proposed issuance of EUR500
million and US$500 million senior unsecured notes due June 2020
reflects their pari passu ranking with all other unsecured
indebtedness issued by Rexel and their unmitigated structural
subordination to non-financial liabilities at the operating
companies. Moody's notes however that there is no material
secured debt existing within the group (notwithstanding the
receivables securitization program).
Although Rexel's Ba2 CFR incorporates the positive steps taken by
Rexel to improve its margins, as evidenced in 2010, 2011 and 2012
results, it is currently constrained by the company's weak credit
metrics and the uncertainty about the pace at which those credit
metrics might improve given the global macroeconomic
uncertainties prevailing, the late-cycle nature of the industry
in which Rexel operates and the potential for shareholder
friendly financial policies.
More positively, Rexel's Ba2 CFR remains supported by the
company's large scale as well as its strong market positions with
either number one or two market rankings in most Western European
and North American countries. It is also supported by the
company's solid liquidity profile which will be further enhanced
by the longer dated debt maturity profile following the issuance
of the new notes due June 2020 and the new revolving credit
facility which matures in 2018.
Outlook
The outlook which was changed to negative from stable in February
2013 reflects Rexel's weaker than expected credit metrics as of
December 2012 with limited prospects for meaningful recovery in
2013 given the difficult macro-economic environment and the late-
cycle nature of Rexel's business. It also reflects some
uncertainty as to the level of future free cash flow generation,
considering the level of cash dividends in conjunction with
ongoing M&A activity.
What Could Change The Rating Up/Down
The ratings outlook could stabilize if Rexel demonstrates a
prudent financial policy as well as a successful implementation
of its Energy in Motion strategy leading to growth in
profitability, while maintaining a net debt/EBITDA ratio (as
adjusted by Moody's) sustainably below 4.0x and a retained cash
flow (RCF)/net debt (as adjusted by Moody's) above 15%. Downward
pressure on the rating could potentially result from any further
deterioration in Rexel's credit protection measures resulting
from more adverse trading conditions beyond Moody's expectations
for 2013; from shareholder friendly policies, such that its
(RCF)/net adjusted debt sustainably falls below 15% or if its net
adjusted debt/EBITDA (as adjusted by Moody's) remains above 4.0x
or from debt-funded acquisitions beyond Moody's current
expectations.
The principal methodology used in this rating was the Global
Distribution & Supply Chain Services published in November 2011.
Other methodologies used include Loss Given Default for
Speculative-Grade Non-Financial Companies in the U.S., Canada and
EMEA published in June 2009.
Headquartered in Paris, France, Rexel SA is a global leader in
the EUR165 billion low-voltage electrical distribution market.
Rexel is ultimately controlled by Ray Investment, a holding
company (jointly owned by CD&R Investment Funds, Eurazeo, BAML
Capital Partners and Caisse de Depot et Placement du Quebec)
which holds about 43% of its shares. Parts of the company's
shares are listed on Euronext Paris with the float representing
around 54%.
REXEL SA: Fitch Assigns 'BB' Rating to EUR500-Mil. Notes Issue
--------------------------------------------------------------
Fitch Ratings has assigned Rexel SA's planned dual-tranche US$500
million and EUR500 million notes issue an expected senior
unsecured rating of 'BB(EXP)'. The final ratings are contingent
upon the receipt of final documents conforming to information
already received by Fitch.
Fitch rates Rexel's Long-term Issuer Default Ratings (IDR) at
'BB' with a Stable Outlook. The Short-Term IDR and Commercial
Paper rating are both 'B'.
Rexel will launch a dual EUR/USD tranche of senior unsecured
notes (planned EUR500 million and US$500 million) maturing in
2020. Simultaneously, Rexel will send a conditional make whole
notice for the 2016 senior notes as it plans to buy back the
notes (representing EUR630 million including the make-whole
premium) provided that it can issue at least EUR500 million on
the euro tranche. The proposed bond refinancing, together with
the refinancing of its existing EUR1.1 billion senior credit
facilities by a single revolving credit facility (RCF) of the
same amount maturing in 2018 will allow Rexel to extend its
average debt maturity profile by at least two and a half years
while boosting liquidity.
The planned bond will be unguaranteed, ranking pari passu with
the new RCF which is expected to be undrawn at closing. Moreover,
the two other existing bonds will lose their guarantees as a
result of the full repayment of the previous bank facility,
reflecting the move to a simplified capital structure with most
of the debt raised at the holding level (Rexel SA), unsecured,
unguaranteed and ranking pari passu. Although bondholders will
only have a claim to the parent company, there is cross-default
with additional group debt above a minimum threshold of EUR75
million.
Rexel's securitization debt, finance lease obligations and debt
incurred by subsidiaries (together referred to as senior debt)
will continue to rank ahead of debt incurred by Rexel SA.
However, any structural subordination concerns are mitigated by
expected limited senior leverage, measured as senior debt/EBITDA,
below the threshold of 2x considered by Fitch as critical (1.4x
based on FY12's EBITDA). As a result we expect average recovery
prospects for unsecured bondholders in the event of default.
However, should Rexel permanently incur senior indebtedness
exceeding 2x EBITDA (representing around EUR450 million of
incremental debt including availability under securitization
lines) then a one notch downgrade on the senior unsecured rating
may be warranted.
KEY RATING DRIVERS:
Challenging Environment, Solid Performance:
Although FY12 sales declined by 1.8% in organic terms, the
group's reported EBITA margin remained stable at 5.7%. The
decrease in Latam and APAC profitability (together representing
9% of group EBITA before central costs), which are less mature
markets and where the company has a smaller footprint, was
compensated by improvements in Europe and North America, where
the group benefits from continuing cost control and savings
derived from bolt-on M&A activity. Although Rexel is targeting
further EBITA margin expansion (above 6.5% in 2015), the current
rating factors more conservative gains through the economic cycle
(up to 6% by 2015).
Resilient Business Model:
Rexel benefits from adequate geographical diversification, strong
market shares in core markets and increasing presence in fast-
growing emerging countries. We expect Rexel to keep on gradually
improving its profitability, notably by shifting its sales mix
towards higher added value products and services -- part of its
"Energy in Motion" strategic plans -- and by continuously
optimizing its branch network and headcount. The degree of
flexibility in its cost base along with clear focus on cost
efficiency measures has enabled Rexel to increase its EBITA
margin by 80bps between 2008 and 2012.
Free Cash Flow (FCF) Critical:
Pre-dividend FCF to EBITDAR remained above 30% in 2012. Rexel has
demonstrated the ability to remain cash flow generative
throughout the economic cycles, notably thanks to its business
model resilience, low capital intensity and control over working
capital. Despite weak economic prospects for 2013 and a sustained
dividend pay-out, Fitch expects Rexel's positive FCF to remain
above EUR150m in 2013 and to average c. EUR215m per annum to
2016.
Financial Flexibility, M&A Appetite:
The high amount of acquisition expenditures in 2012, along with
worsening operating performance in H2, resulted in some
deterioration in credit metrics, notably with funds from
operations (FFO) adjusted net leverage rising to 5.2x at year-end
2012 from 4.2x at year-end 2011. Thanks to its solid FCF
generation capacity and assuming more limited acquisition
spending (EUR200 million annually) Fitch is confident the company
will regain headroom under its 'BB' rating in 2013, reverting to
the lower leverage seen in 2011, below 4.5x, by 2015.
RATING SENSITIVITY GUIDANCE:
Positive: Future developments that could lead to positive rating
actions include:
- FFO adjusted net leverage below 4.0x on a continuing basis and
evidence of resilient profitability.
- The continuation of strong cash flow conversion, measured as
pre-dividend FCF to EBITDAR average for two years consistently
above 30%.
Negative: Future developments that could lead to negative rating
action include:
- A large debt-funded acquisition, or a deeper than expected
economic slowdown with no corresponding increase in FCF
(notably due to working capital inflow and/or dividend
reduction) resulting in (actual or expected) FFO adjusted net
leverage above 5.0x for more than two years.
- A more aggressive shareholder-friendly stance weakening credit
protection measures could result in a negative rating action if
the tough economic climate persists.
- Average two-year pre-dividend FCF to EBITDAR at or below the
25%-30% range combined with weaker profitability.
SAUR SA: Banks Want Full Control of Mother Company
--------------------------------------------------
David Whitehouse at Bloomberg News, citing Le Figaro, reports
that BNP, RBS and BPCE, the three banks which own 53% of Saur
SA's debt, want to control 100% of Saur's mother company Hime.
According to Bloomberg, Le Figaro said that Saur's debt amounts
to EUR2 billion.
Le Figaro said that the banks plan to convert EUR750 million into
shareholder equity and write off EUR150 million, while reducing
interest payments on the rest, Bloomberg relates.
Bloomberg notes that Le Figaro said Saur's current management and
business plan will be retained.
Le Figaro, as cited by Bloomberg, said that FSI strategic
investment fund, which holds 33% of Saur, believes the plan won't
ensure the future of the company.
Saur SA is a French water and waste management services firm.
=============
H U N G A R Y
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BUDAPEST BANK: Moody's Downgrades Deposit Ratings to 'Ba3'
----------------------------------------------------------
Moody's Investors Service lowered by between two to four notches
the baseline credit assessments (BCAs) of Budapest Bank (BB), K&H
Bank (K&H), Erste Bank Hungary (EBH) and MKB Bank (MKB).
According to Moody's, the drivers of the lower BCAs are the
increasingly weak economic and operating environment in Hungary
and the subsequent negative implications this has on all four
banks' franchises, asset quality and profitability.
The lower BCAs have prompted the downgrades of between one and
three notches of the banks' long-term local-currency and foreign-
currency deposit ratings. The Rating actions conclude Moody's
review for downgrade initiated on 12 December 2012.
Ratings Rationale:
- Budapest Bank
Moody's lowered BB's BCA by two notches to b2 from ba3. The lower
BCA reflects the increasingly weak and uncertain economic and
operating environment, the bank's ongoing asset-quality
deterioration, and the expectation of further downward pressure
on profitability. The negative expectation on profitability is
driven by (1) decreasing net interest income; (2) very weak loan
demand; (3) higher provisioning costs; and (4) the sustained
large tax burden. However, BB's BCA continues to be supported by
the bank's good capitalization, with a Tier 1 ratio of 15.6% at
year-end 2012 and adequate liquidity profile, which includes a
large foreign-currency (FX) deposit from its parent, General
Electric Capital Corporation (GECC; A1 stable).
Moody's has also downgraded BB's local and foreign-currency
deposit ratings to Ba3 from Ba1 and to Ba3 from Ba2, following
the lowering of the bank's BCA. Moody's maintains its view that
the bank would benefit from a moderate likelihood of parental
support from GECC, if needed, given (1) GECC's full ownership of
BB; and (2) GECC's management control of BB. These factors
provide rating uplift of two notches for BB's deposit ratings
from the b2 BCA.
The bank's long-term deposit ratings carry a negative outlook,
reflecting BB's ongoing business and financial challenges which
could result in the b2 BCA, and accordingly the Ba3 long-term
deposit ratings, becoming more lowly positioned.
- What Could Move the Ratings Up/Down
Upwards pressure in the near-term is unlikely given that the
long-term deposit ratings are on negative outlook. Upwards
pressure could be exerted on the BCA if the bank successfully
protects its franchise in the current weaker operating
environment -- and is able to improve its earnings-generating
ability and maintain its capital base -- while keeping a good
coverage ratio of its non-performing loans.
The bank's BCA would be negatively affected by further
deterioration in asset quality, leading to erosion of its capital
base. Significant deterioration in the bank's franchise -- albeit
unlikely -- would also have negative rating implications. In
addition, a downgrade of the parent's ratings, or a change in the
parent's strategy towards its operations in Hungary, could affect
the bank's long-term deposit ratings.
- K&H Bank
Moody's lowered K&H's BCA by two notches to b2 from ba3. The
lower BCA reflects the increasingly weak and uncertain economic
and operating environment, the bank's ongoing deterioration in
asset quality -- also reflected in increasing retail loan
restructuring activity -- and the expected downward pressure on
the bank's profitability. The negative expectation on
profitability is driven by (1) decreasing net interest income;
(2) a contracting loan book; (3) still-significant provisioning
costs, and (4) the sustained large tax burden.
Capitalization, with a Tier 1 ratio of 11.9% at year-end 2012,
remains only adequate and exposed to Hungary's persistent
recessionary environment. However, the BCA continues to be
supported by the bank's relatively good franchise in corporate
and retail banking, as well as asset management, and its
relatively good liquidity profile supported by deposits from its
mutual funds business.
Moody's has also downgraded K&H's local and foreign-currency
deposit ratings to Ba3 from Ba2, following the lowering of the
bank's BCA. Moody's maintains its view that the bank would
benefit from a moderate likelihood of parental support from KBC
Bank N.V. (A3 stable, BFSR D+/BCA baa3 stable), given (1) KBC's
full ownership of the bank; and (2) KBC's recognition that K&H is
integral part of its core business in Central and Eastern Europe
(CEE). This provides rating uplift of two notches for the deposit
ratings for K&H from the b2 BCA.
The bank's long-term deposit ratings carry a negative outlook,
reflecting K&H's ongoing business and financial challenges which
could result in the b2 BCA, and accordingly the Ba3 long-term
deposit ratings, becoming more lowly positioned.
- What Could Move the Ratings Up/Down
Given that the long-term deposit ratings are on negative outlook,
and the weak economic and operating environment in Hungary,
upward movement of the BCA is unlikely in the short to medium
term. In the longer term, the bank's BCA could come under upwards
pressure from an improvement in the economic environment, leading
to a strengthening of the bank's financial fundamentals.
A further worsening of the bank's loan portfolio could result in
a rating downgrade. Moody's would also view a significant
deterioration in K&H's retail or corporate franchise as credit
negative; a decline in K&H's franchise could adversely affect the
bank's earning generating ability. In addition, a downgrade of
the parent's ratings, or a change in the parent's strategy
towards Hungary, could affect the K&H's long-term deposit
ratings.
- Erste Bank Hungary
Moody's lowered EBH's BCA by two notches to caa1 from b2. The
lower BCA captures the increasingly weak and uncertain economic
and operating environment and the bank's ongoing asset-quality
deterioration, affected by its large share of FX loans and its
significant exposure to the weak real-estate and construction
sectors. The lower BCA also reflects the bank's loss-making
profile, driven by (1) decreasing net interest income; (2) a
contracting loan book; (3) large loan-loss provisions; and (4)
the sustained large tax burden. Capitalization, with a total
ratio of 11.7% at year-end 2012, is modest and the current BCA
reflects Moody's view that there is a significant probability
that the bank might require further capital injections from the
parent -- Erste Group Bank AG (A3 negative, BFSR D+/BCA baa3
negative) -- in the next 12-18 months.
Moody's has also downgraded EBH's local and foreign-currency
deposit ratings to B2 from Ba3, following the lowering of the
bank's BCA. Moody's maintains its view that the bank would
benefit from a moderate likelihood of parental support from Erste
Group Bank, given (1) Erste's full ownership of the bank; and (2)
its ongoing commitment to its Hungarian operations, due to the
subsidiary's strategic fit in Erste's CEE operations and its
geographical proximity. This provides rating uplift of two
notches for EBH's deposit ratings from the caa1 BCA.
The bank's long-term deposit ratings carry a negative outlook,
reflecting EBH's ongoing business and financial challenges which
could result in the caa1 BCA, and accordingly the B2 long-term
deposit ratings, becoming more lowly positioned.
- What Could Move the Ratings Up/Down
Moody's believes there is little likelihood of any upwards rating
pressure for EBH's long-term deposit ratings in the near-term,
unless there is a material improvement in the European operating
environment and a consequent easing of pressures on the parent
bank. In the longer term, a potential improvement of the BCA
could be driven by an improvement in the bank's financial
fundamentals, especially a substantial increase in
capitalization, and by a sustainable improvement in asset
quality.
A further worsening of the bank's loan portfolio could result in
downward rating pressure. Moody's would also view a further
deterioration in its retail or corporate franchise as credit
negative, which could adversely affect the bank's earning
generating ability. In addition, downward movements on the
ratings of the parent, or a change in the parent's strategy
towards Hungary, could affect the EBH's long-term deposit
ratings.
- MKB Bank
Moody's lowered MKB's BCA by four notches to ca from b3. The
lower BCA captures the increasingly weak and uncertain economic
and operating environment and the bank's ongoing deterioration in
asset quality, with increasing loan restructuring activity and
still-large credit concentrations in the weak real-estate and
construction sectors. The lower BCA also reflects the bank's
recurring loss-making profile, driven by (1) decreasing net
interest income; (2) a contracting loan book; (3) large loan-loss
provisions; and (4) the sustained large tax burden.
The bank's capital position is therefore weak, which has in
recent years required several capital injections from the parent
-- Bayerische Landesbank (Baa1 stable, BFSR D-/BCA ba3 stable) --
to cover large losses. The current BCA reflects Moody's view that
the bank will very likely require further capital injections from
its parent in the next 12-18 months.
Moody's has also downgraded MKB's local and foreign-currency
deposit ratings to Caa2 from B2, following the lowering of the
bank's BCA. Moody's maintains its view that the bank would
benefit from a moderate degree of parental support from
Bayerische Landesbank, given (1) BayernLB's 98.1% ownership of
the bank; and (2) its ongoing and significant capital and
liquidity support to MKB. This provides rating uplift of two
notches for the deposit ratings for MKB from the ca BCA.
The bank's long-term deposit ratings carry a negative outlook.
This reflects the likely reduction in parental support in the
medium term, because the parent has agreed to sell MKB by 2015,
in order to meet the European Commission's requirements.
- What Could Move The Ratings Up/Down
The bank's ratings are unlikely to be upgraded in the short term
given the current rating action. In the longer term, the
successful implementation of a retail strategy, while maintaining
a robust position in corporate banking with significantly lower
exposure to the real-estate and construction sector, could exert
upwards pressure on the bank's BCA. MKB would also have to
improve substantially its financial fundamentals and
significantly reduce its credit concentrations, resulting in
sustainable profitability.
MKB's long-term deposit ratings would be negatively impacted if
the ongoing and significant support from its parent were to
weaken.
List of Affected Ratings
Budapest Bank
- Local-currency long-term deposit rating downgraded to Ba3 from
Ba1
- Foreign-currency long-term deposit rating downgraded to Ba3
from Ba2
- BFSR downgraded to E+/b2 from D-/ba3
All these ratings are on negative outlook, except the BFSR
K&H Bank
- Local-currency and foreign currency long-term deposit ratings
downgraded to Ba3 from Ba2
- BFSR downgraded to E+/b2 from D-/ba3
All the these ratings are on negative outlook, except the BFSR
Erste Bank Hungary
- Local-currency and foreign currency long-term deposit ratings
downgraded to B2 from Ba3
- BFSR downgraded to E/caa1 from E+/b2
All these ratings are on negative outlook, except the BFSR
MKB Bank
- Local-currency and foreign currency long-term deposit ratings
downgraded to Caa2 from B2
- Foreign-currency long-term senior unsecured MTN rating
downgraded to (P)Caa2 from (P)B2
- Foreign-currency long-term subordinated MTN rating downgraded
to (P)C from (P)Caa2
- Foreign-currency subordinated debt rating (Lower Tier 2)
downgraded to C from Caa2
- BFSR downgraded to E/ca from E+/b3
The long-term deposit ratings are on negative outlook
The principal methodology used in these ratings was Moody's
Consolidated Global Bank Rating Methodology published in June
2012.
Headquartered in Budapest, Hungary, Budapest Bank reported
consolidated total assets of HUF895 billion as of 30 September
2012.
Headquartered in Budapest, Hungary, K&H Bank reported
consolidated total assets of HUF2,357 billion as of 30 September
2012.
Headquartered in Budapest, Hungary, Erste Bank Hungary reported
consolidated total assets of HUF2,788 billion as of 31 December
2012.
Headquartered in Budapest, Hungary, MKB Bank reported
consolidated total assets of HUF2,686 billion as of 30 June 2012.
=============
I R E L A N D
=============
CONNEMARA MINING: Shareholder Files Winding-Up Petition
-------------------------------------------------------
Tim Healy at Independent.ie reports that UK mining finance
company Trampus Ltd., a shareholder in Connemara Mining, has
asked the High Court to wind up the firm alleging it is insolvent
and unable to pay its debts.
The company, whose executive chairman is John Teeling, is
opposing the winding up petition brought by Trampus,
Independent.ie relates.
Connemara says it has not failed to pay any debts and also says
Trampus cannot seek a winding up because it is not a creditor,
Independent.ie discloses.
Ms. Justice Mary Laffoy on Tuesday said she would give her
decision on the petition later, Independent.ie notes.
Trampus is the largest single shareholder in Connemara, holding
1.625 million shares or 6.32% of the company while Mr. Teeling is
also a substantial shareholder, Independent.ie states.
According to Independent.ie, in its petition, Trampus says
Connemara's financial position has been deteriorating and interim
accounts for 2012 show it has liabilities of EUR363,000 compared
to assets and cash of EUR283,000, leaving it with a current
deficit of EUR80,000.
Trampus Ltd. is a mining exploration company. It was set up in
2006 to exploit zinc and other mineral mining opportunities in
Ireland.
IRISH BANK: Liquidators to Work with NAMA & Capita
--------------------------------------------------
Louisa Fahy at Bloomberg News reports that liquidators said in an
e-mail they will work with National Asset Management Agency and
its appointed loan servicer, Capita, to ensure smooth transition
of management of NAMA loans.
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.
Standard & Poor's Ratings Services said that it lowered its long-
and short-term counterparty credit ratings on Irish Bank
Resolution Corp. Ltd. (IBRC) to 'D/D' from 'B-/C'. S&P also
lowered the senior unsecured ratings to 'D' from 'B-'. S&P then
withdrew the counterparty credit ratings, the senior unsecured
ratings, and the preferred stock ratings on IBRC. At the same
time, S&P affirmed its 'BBB+' issue rating on three government-
guaranteed debt issues.
The rating actions follow the Feb. 6, 2013, announcement that the
Irish government has liquidated IBRC.
* IRELAND: Bank Provisions Likely to Stay High, Fitch Says
----------------------------------------------------------
Loan impairment charges at Irish banks are likely to remain high,
especially as a stricter provisioning approach will be introduced
for some Irish mortgages in arrears during 2014, Fitch Ratings
says. If a similar policy is also applied to some unsecured
loans, impairment charges could even rise again.
Fitch says, "We believe arrears are likely to plateau in 2014 as
the banks accelerate the resolution of mortgage arrears in line
with new targets set by Central Bank of Ireland (CBoI) last week.
Irish banks need to propose sustainable solutions for 50% of
mortgages in long-term arrears (over 90 days overdue) by the end
of this year, with further targets to be set for 2014. The pace
of arrears formation slowed during 2012 for the two largest
banks, AIB and Bank of Ireland (BoI).
"Tackling the rising mortgage arrears is important for the
recovery of the banking sector. Stricter provisioning guidelines
for impaired mortgages that cannot be sustainably restructured
should improve comparability across banks. If the final
guidelines specify haircuts, foreclosure costs and timeframe for
the recovery on the loan, they could eliminate a lot of the
judgment and therefore variation in banks' approaches. The
impairment charge for these mortgages may rise substantially.
"We expect asset-quality deterioration to track between the base
case and stress scenario under the 2011 Prudential Capital
Assessment Reviews (PCAR). But as long as mortgage arrears
continue to rise there is the risk that losses will exceed the
PCAR assumptions and hinder the recovery of the banking sector.
This risk is reflected in the low Viability Ratings of the banks
(AIB has a VR of 'b-', BoI's is 'b')."
The central bank is also considering higher capital requirements
for banks that have poor mortgage arrears resolution strategies
and weak execution. Depending on timing, this could be
challenging for the banks if ability to generate capital through
retained earnings has not recovered.
The CBoI's data shows that 11.9% of owner-occupied mortgages and
18.9% of buy-to-let mortgages were in arrears of over 90 days as
at end-2012. The rate of increase has moderated quarter on
quarter.
=========
I T A L Y
=========
TELECOM ITALIA: Fitch Assigns 'BB+' Rating to Capital Securities
----------------------------------------------------------------
Fitch Ratings has assigned Telecom Italia's (TI; 'BBB'/Negative)
7.75% EUR750 million subordinated capital securities maturing in
March 2073 a rating of 'BB+'.
These securities are deeply subordinated and rank senior only to
TI's share capital, while coupon payments can be deferred at the
option of the issuer. As a result of these features, the 'BB+'
rating assigned to the securities is two notches down from TI's
'BBB' Long-term Issuer Default Rating (IDR) which reflects the
securities' increased loss severity and heightened risk of non-
performance relative to the senior obligations. This approach is
in accordance with Fitch's criteria, "Treatment and Notching of
Hybrid in Nonfinancial Corporate and REIT Credit Analysis" dated
Dec. 13, 2012 at www.fitchratings.com.
The securities qualify for 50% equity credit as they meet Fitch's
criteria with regards to subordination, effective maturity of at
least five years, full discretion to defer coupons for at least
five years and limited events of default.
KEY DRIVERS
TI's IDR was affirmed on 14 March, after Fitch recently
downgraded Italy's sovereign rating to 'BBB+'/Negative.
- Investment Grade Operating Profile
TI's operating profile as an incumbent in Italy offsets some of
its weak financial metrics. If the domestic business can be
stabilized, and leverage remains under control, Fitch
fundamentally views TI as an investment grade credit. A lack of
cable competition in Italy means that TI is not facing an
immediate threat from a triple-play competitor with a superior
network advantage. It does not have the same pressure to rollout
a fibre network as some other European incumbents.
- Sovereign-related Risk
For a primarily domestic issuer like TI, Fitch guidelines
indicate that investment grade issuer ratings can be as much as
two notches above the related sovereign rating. Assuming TI's
liquidity, leverage and domestic performance remained
satisfactory, TI would only be downgraded for sovereign linkage
reasons if Italy's rating was downgraded to 'BB' or lower (which
is not currently anticipated). Key factors in maintaining the two
notch differential between TI's rating and the sovereign will be
solid liquidity to minimize refinancing concerns, and limited
impact from any potential government austerity measures.
- Leverage Remains High
TI ended 2012 with leverage -- measured by unadjusted net debt to
EBITDA, excluding Telecom Argentina -- at around 2.7x, broadly
unchanged since 2010. With continued declines in EBITDA, Fitch
expects leverage will increase in 2013. Fitch's scenario analysis
shows that under certain conditions, driven by a worsening macro-
economic environment, and sluggish Brazilian growth, TI's
leverage could breach the key 3.0x threshold, which would result
in negative rating action.
- Protecting Cash Flow Generation
The challenge facing TI is to maintain its domestic market
position in an increasingly price competitive market while
protecting free cash flow generation and reducing leverage.
Improving efficiency in operations and capital expenditure should
go some way to preserving profitability. Continued investment in
long-term evolution mobile network upgrades and fibre deployment
should allow TI to increasingly differentiate its service
offering based on network quality.
- Limited Contribution from Brazil
Brazil currently provides just under 10% of the group's EBITDA
less capex (excluding Telecom Argentina). Revenue growth
expectations for 2013 and 2014 have been scaled back due to a
slowing economy and higher than expected mobile termination rate
cuts. Growth in 2015 and beyond could increase as economic growth
picks up and regulatory and competitive challenges are overcome.
TI also has to contest a legal case brought by the Brazilian tax
authorities, claiming EUR550 million in unpaid taxes. The
judicial process is likely to be lengthy. TI believes it is in a
solid position and does not expect to incur any charges and
therefore has not made any provision to cover this potential
liability.
RATING SENSITIVITIES
Negative: Future developments that could lead to negative rating
actions include:
- Leverage as measured by unadjusted net debt to EBITDA
(excluding Telecom Argentina) sustainably above 3.0x could
result in TI's Long-term IDR being downgraded.
- Revenue and EBITDA trends in the domestic business in 2013
which are worse than that reported in 2012.
- An Italy sovereign downgrade to 'BB' or lower.
Positive: Future developments that could lead to positive rating
actions include:
- A revision of the Outlook on Italy's sovereign rating
('BBB+'/Negative) to Stable might result in a similar revision
of the Outlook on Telecom Italia's IDR, as this would point to
a lowering of macroeconomic and refinancing risk.
- A sustained improvement in the company's domestic business's
operating and financial profile would be required before the
Outlook on Telecom Italia's IDR could be revised to Stable.
LIQUIDITY AND DEBT STRUCTURE
Liquidity at TI remains healthy. TI had EUR8.18 billion of cash
and cash equivalents on its balance sheet at the end of 2012 as
well as EUR7.95 billion of undrawn committed facilities (which
includes EUR4 billion available till May 2017). Together, this
liquidity should allow TI to cover debt maturities well into
2014.
===================
K A Z A K H S T A N
===================
BTA BANK: Can Recover US$2-Bil. in Assets From Ex-Chairman
----------------------------------------------------------
Jane Croft at The Financial Times reports that the High Court in
London has ruled Kazakhstan's BTA Bank is entitled to recover a
further US$2 billion in assets from its former chairman Mukhtar
Ablyazov and his associates.
In the latest ruling on the case, Mr. Justice Teare handed down
judgment in favor of BTA in three further claims which are part
of the Kazakh lender's litigation against Mr. Ablyazov and others
in which it alleges the bank has been defrauded of up to US$6
billion, the FT relates.
BTA has been pursuing Mr. Ablyazov, who served as its chairman,
to recover billions of dollars it alleges were misappropriated
from the bank under his leadership, the FT discloses.
BTA alleges in the litigation that Mr. Ablyazov defrauded it by
procuring the payment of the bank's money to offshore companies
which he owned or controlled, the FT notes.
Although the events took place in Kazakhstan, the lawsuits were
being brought in the High Court three years ago because
Mr. Ablyazov and another defendant were living in London, the FT
states.
The former BTA chairman was granted asylum in the UK after
fleeing Kazakhstan in 2009, the FT recounts. He has previously
denied the fraud allegations, claiming they were politically
motivated and an attempt by Nursultan Nazarbayev, Kazakhstan's
president, to eliminate him as a political opponent, the FT
discloses. Soon after Mr. Ablyazov left BTA in 2009, the Kazakh
state took a 75.1% stake in the bank amid serious concerns about
its future, the FT relates. The bank later underwent an
insolvency process as the deficit of its assets versus
liabilities reached US$16 billion, the FT notes.
About BTA Bank
BTA Bank AO (BTA Bank JSC), formerly Bank TuranAlem AO --
http://bta.kz/-- is a Kazakhstan-based financial institution,
which is involved in the provision of banking and financial
products for private and corporate clients.
The BTA Group is one of the leading banking groups in the
Commonwealth of Independent States and has affiliated banks in
Russia, Ukraine, Belarus, Georgia, Armenia, Kyrgyzstan and
Turkey. In addition, the Bank maintains representative offices
in Russia, Ukraine, China, the United Arab Emirates and the
United Kingdom. The Bank has no branch or agency in the United
States, and its primary assets in the United States consist of
balances in accounts with correspondent banks in New York City.
As of November 30, 2009, the Bank employed 5,043 people inside
and 4 people outside Kazakhstan. It has no employees in the
United States. Most of the Bank's assets, and nearly all its
tangible assets, are located in Kazakhstan.
JSC BTA Bank, also known as BTA Bank of Kazakhstan, commenced
insolvency proceedings in the Specialized Financial Court of
Almaty City, Republic of Kazakhstan. Anvar Galimullaevich
Saidenov, the Chairman of the Management Board of BTA Bank, then
filed a Chapter 15 petition (Bankr. S.D.N.Y. Case No. 10-10638)
on Feb. 4, 2010, estimating more than US$1 billion in assets and
debts.
On March 9, 2010, the Troubled Company Reporter-Europe reported
that JSC BTA Bank was granted relief in the U.S. under Chapter 15
when the bankruptcy judge in New York recognized the Kazakh
proceeding as the "foreign main proceeding." Consequently,
creditor actions in the U.S. were permanently halted, forcing
creditors to prosecute their claims and receive distributions
in Kazakhstan.
In the U.S., the Foreign Representative is represented by Evan C.
Hollander, Esq., Douglas P. Baumstein, Esq., and Richard A.
Graham, Esq. -- rgraham@whitecase.com -- at White & Case LLP in
New York City.
The Specialized Financial Court of Almaty approved BTA Bank's
debt restructuring on Aug. 31, 2010, trimming its obligations
from US$16.7 billion to US$4.2 billion, and extending its longest
maturity dates to 20 year from eight. Creditors who hold 92
percent of BTA's debt approved the restructuring plan in May.
BTA reportedly distributed US$945 million in cash to creditors
and new debt securities including US$5.2 billion of recovery
units (representing an 18.5% equity stake) and US$2.3 billion of
senior notes on Sept. 1, 2010. BTA forecasts profit of slightly
more than US$100 million in 2011, Chief Executive Officer Anvar
Saidenov told reporters in Almaty.
===================
L U X E M B O U R G
===================
COSAN LUXEMBOURG: Fitch Rates New BRL350MM Notes Add-on 'BB+'
-------------------------------------------------------------
Fitch Ratings has assigned a 'BB+' rating to Cosan Luxembourg
S.A.'s proposed BRL350 million add-on issuance in a reopening of
its BRL500 million senior unsecured notes issue due 2018 to new
and existing investors.
The notes will be unconditionally and irrevocably guaranteed by
Cosan S.A. Industria e Comercio and will rank equally with all
Cosan's unsecured indebtedness. Net proceeds will be used to
prepay a portion of Cosan's BRL3.3 billion debentures issued to
finance the acquisition of Comgas.
Key Rating Drivers
Cosan's ratings reflect the increasing contribution of a more
diversified asset portfolio and more predictable cash flow
businesses on a consolidated basis, which partially soften the
impacts of the volatility of the sugar and ethanol industry.
Cosan's ratings fundamental has been positively enhanced by the
creation of a joint-venture with Shell Brazil Holdings BV
(Raizen), under conservative financial terms, and it is strongly
linked to Raizen's credit profile, given the relevance of this
joint venture compared to Cosan's consolidated performance (55%
of 2013 EBITDA, as per Fitch estimates). Cosan's pro forma credit
ratios, considering the last 12 months (LTM) EBITDA of Comgas,
its robust liquidity position and its manageable debt profile
further support the ratings.
The high volatile sugar & ethanol industry fundamentals, exposure
to climatic conditions and challenges related to the ethanol's
industry dynamics in Brazil, currently strongly linked to
gasoline regulated prices and governmental policies related to
this issue, are further incorporated into the ratings.
Increased Diversification & Lower Exposure to Sugar & Ethanol:
Comgas' acquisition was strategically positive for Cosan, as it
contributes to broader business diversification and should lessen
its cash flow volatility. This transaction also enhanced Cosan's
presence in the energy segment, which, together with logistics,
are the main focus on the company's business plan going forward.
As per Fitch's estimates, the contribution of more stable
business for Cosan's cash flow should range from 52% in the
2011/2012 harvest period to the 65%-75% range in the next three
years, depending on the sugar and ethanol prices behavior and
speed of planned expansion projects. Fitch estimates Cosan's 2013
EBITDA breakdown by segment as follows: 35% natural gas
distribution, 32% sugar and ethanol, 19% fuel distribution, 8%
logistics and 6% others.
Leverage on a Declining Trend as Expected:
Cosan's pro forma net debt/EBITDA considering Comgas' LTM EBITDA
is 3.2x, despite lower than historical EBITDA margins of the
acquired company in that period, due to some cost mismatches to
be passed through its tariffs. Considering a normalized EBITDA
for Comgas, Cosan's pro forma net leverage on a consolidated
basis would be around 3.1x. This ratio compares favorably with
the 3.3x pro forma net leverage ratio as of March 2012. Fitch's
debt calculations also consider rescheduled taxes net of credits
to be received from ExxonMobil, pension fund obligations (mostly
migrated from Comgas) and intercompany loans.
Considering the mid-point of the sugar and ethanol price cycle,
Fitch estimates that Cosan should maintain its net leverage
around 3.0x while preserving a robust liquidity position to
reduce the risks related to the inherent cyclicality of some of
its businesses.
Robust Liquidity Essential to Support Ratings:
Cosan has maintained robust liquidity. As of Dec. 31, 2012, its
consolidated cash position amounted to BRL2.3 billion and covered
its short-term debt of BRL1.8 billion by 1.3x. Considering also
cash flow from operations (CFFO), the cash+CFFO/short-term debt
ratio would be strong at 3.0x. Debt maturity profile was
adequately distributed, with concentration in the long term.
Fitch expects that Cosan will continue to adequately manage its
short-term debt maturities and to preserve a robust liquidity, in
order to be prepared for occasional market downturns. The
favorable terms of the financing line obtained to finance the
Comgas acquisition, characterized by an eight-year tenor with a
two-year grace period, also positively contributed to the
company's financial profile.
Increased Cash Flow Generation:
Cosan presented a robust operational performance on a
consolidated basis in the LTM period ended December 2012. Net
revenues, EBITDA and CFFO amounted to BRL27.3 billion, BRL2.5
billion and BRL3.1 billion, respectively, which compare
positively to BRL24.1 billion, BRL2.1 billion and BRL2 billion
reported in March 2012, excluding the non-recurring effects of
the creation of Raizen (BRL3.2 billion).
Cosan's EBITDA expansion reflects, among other factors, the
strong performance of the fuel distribution activities, which
benefited from advances in the gas stations rebranding process
and a favorable product mix and higher operational margins in the
sugar, ethanol and cogeneration business, driven mainly by a
greater crushing volume, adequate price hedging strategy and
increased cogeneration revenues in that period. The beginning of
consolidation of the agricultural land development business,
conducted through the subsidiary Radar, also contributed with an
incremental EBITDA of BRL96 million.
Pending Negotiations on Acquisition of ALL Shares:
Cosan is also negotiating the purchase of a 5.7% stake on America
Latina Logistica (ALL), for BRL896.5 million, which was not
incorporated in Fitch's financial projections. The transaction is
still dependent upon the approval of other signatories of ALL's
shareholders agreement and also from the Brazilian Transport
Regulatory Agency (ANTT) and the Brazilian Antitrust Council
(CADE). In case the acquisition is concluded, Fitch estimates
that Cosan's consolidated net debt/EBITDA ratio on a pro forma
basis would range between 3.0x and 3.3x depending on the funding
strategy for this transaction.
RATING SENSITIVITIES
A positive rating action could be driven in the medium term by
lower than expected leverage, coupled with the maintenance of
more stable and predictable cash flows.
Any action related to Raizen's ratings could have an impact on
Cosan's ratings. Factors that could lead to a negative rating
action include further acquisitions or investments not
contemplated in the current business plan that could result in
leverage levels beyond expectations and/or material refinancing
needs. Should net leverage exceed Fitch expectations and be above
3.5x on a recurring basis, it would trigger a negative rating
action.
Fitch currently rates Cosan as:
Cosan:
-- Foreign and local currency Issuer Default Ratings (IDRs)
'BB+';
-- National scale rating 'AA-(bra)'.
Cosan Overseas:
-- Foreign currency IDR 'BB+';
-- Perpetual notes 'BB+'.
The Rating Outlook of the corporate ratings is Stable.
INTELSAT LUXEMBOURG: S&P Rates US$1.5BB Notes Due 2021 'CCC+'
-------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'CCC+' issue-
level rating and '6' recovery rating to the proposed issuance of
US$1.5 billion of senior notes due 2021 by Intelsat (Luxembourg)
S.A., an indirect subsidiary of Luxembourg-based Intelsat Global
Holdings S.A. (Intelsat). The '6' recovery rating indicates
S&P's expectation of negligible (0% to 10%) recovery for note-
holders in the event of a payment default. S&P expects the
company to use net proceeds from the proposed offering to redeem
a portion of its 11.5%/12.5% senior payment-in-kind (PIK) notes
due 2017. The company recently issued a notice of redemption for
US$915 million of the senior PIK notes, which became callable on
Feb. 15, 2013, at a redemption price equal to 105.75% of the
principal amount. The company expects to use the remaining note
proceeds to redeem an additional US$460 million of the PIK notes,
and for general corporate purposes.
S&P's ratings on parent company Intelsat Global S.A., including
its 'B' corporate credit rating and stable outlook, are not
affected by this transaction, though S&P expects a modest
reduction in annual interest expense.
In addition to the proposed refinancing, the company recently
filed an update with the SEC reducing the size of its potential
initial public offering (IPO) to US$750 million from US$1.75
billion. S&P will continue to monitor developments around a
potential IPO, which along with expected satellite insurance
proceeds, the company could use to reduce debt. As of Dec. 31,
2012, adjusted debt to EBITDA was steep, at approximately 8.2x.
Leverage has declined minimally over the last few years due to
the company's high capital spending and minimal EBITDA growth.
Under S&P's base-case forecast, it expects very low-single-digit
percent revenue growth in 2013, between 1% and 1.5%, and stable
EBITDA margins. However, despite the muted growth, S&P believes
that reductions in capital spending over the next two years, as
well as reduced interest expense from the proposed refinancing,
could benefit free operating cash flow (FOCF) generation and
potential further debt reduction. Any upgrade scenario would be
dependent on meaningful leverage reduction, to below 7x on a
sustained basis, as well as ongoing positive FOCF generation.
For the corporate credit rating rationale, see the summary
analysis on IntelsatGlobal published on Nov. 30, 2012.
RATINGS LIST
Intelsat Global S.A.
Corporate Credit Rating B/Stable/--
New Rating
Intelsat (Luxembourg) S.A.
Senior Notes CCC+
Recovery Rating 6
XUTHUS: S&P Withdraws 'BB+' Rating on Class C Notes
---------------------------------------------------
Standard & Poor's Ratings Services has withdrawn its credit
ratings on Xuthus (European Loan Conduit No. 29) S.A.'s class A,
B and C notes.
The rating action follows the issuer's confirmation that the
class A, B, and C notes fully prepaid on Dec. 31, 2012.
The notes repaid following the unwinding of the securitized
transaction. The noteholders retired the notes in exchange for
acquiring corresponding participations in the loan from the
issuer. S&P has therefore withdrawn all of its ratings in this
transaction due to the redemption of the notes.
Xuthus (European Loan Conduit No. 29) was a commercial mortgage-
backed securities (CMBS) transaction that closed in February 2008
and had a scheduled note maturity in May 2018.
At closing in February 2008, the issuer used the note issuance
proceeds to acquire the senior tranche of one loan from the
originator, Morgan Stanley Bank International Ltd. The loan was
secured on a diversified and granular portfolio of 65 properties,
comprising predominately grade A and B office buildings located
throughout the Netherlands, Belgium, Switzerland, and Germany.
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 Report
included in this credit rating report is available at:
http://standardandpoorsdisclosure-17g7.com
RATINGS LIST
Class Rating
To From
Xuthus (European Loan Conduit No. 29) S.A.
EUR695.05 Million Commercial Mortgage-Backed Floating-Rate and
Variable-Rate
Notes
Ratings Withdrawn
A NR A (sf)/Watch Neg
B NR BBB+ (sf)/Watch Neg
C NR BB+ (sf)/Watch Neg
NR-Not rated.
=====================
N E T H E R L A N D S
=====================
NOKIA SIEMENS: Moody's Assigns 'B2' CFR & Rates EUR600MM Notes B2
-----------------------------------------------------------------
Moody's Investors Service assigned a B2 corporate family rating
and a B2-PD probability of default rating to Nokia Siemens
Networks B.V.
Concurrently, Moody's has assigned a B2/loss-given default (LGD)
4 rating to the company's EUR600 million worth of senior notes.
The outlook on all ratings is positive.
Ratings Rationale:
Moody's assessment of NSN reflects its (i) large scale of
operations and broad geographic presence, (ii) its strong and
rapid turnaround as evidenced by an improvement in the recurring
operating income margin to 6.1% in fiscal year 2012 (from 2.5% in
2011) helped by a successful implementation of deep and still
ongoing restructuring measures including a strategic refocusing
of its operations on wireless technologies, (iii) the group's
solid and improving market positioning with recent market share
gains leading NSN to remain one of the three largest providers
globally for wireless equipment in 2012, (iv) the fact that about
half of group's revenues are generated by the Service business
with a substantial share of contracts with earnings visibility
and (v) NSN's solid liquidity position supported by a EUR1.0
billion capital increase in fiscal year 2011 as well as EUR1.4
billion positive free cash flow on the back of a EUR1.0 billion
working capital release in fiscal year 2012, which, however,
Moody's believes cannot be repeated at the same magnitude in
2013. Moody's also positively notes (vi) NSN's strong improvement
in leverage metrics to an estimated 2.2x adjusted debt/EBITDA
before restructuring costs in FY2012.
On the negative side the rating takes into account (i) the very
price competitive telecom equipment market with a high single-
digit price erosion as expected by Moody's and NSN's challenge to
mitigate this pricing pressure through market share gains, the
exit of modestly profitable service contracts, procurement cost
improvements, a more cost efficient product design and further
restructuring measures, (ii) uncertainty over the sustainability
of NSN's current level of profitability, (iii) the weak track
record of NSN and the fact that the group is still in a period of
transition with further restructuring, asset disposals and
management changes and (iv) potential likely changes in
shareholders and, hence, business and financial strategy.
Moody's positive outlook for the ratings assumes stable revenues
excluding asset disposals and a modest margin improvement (before
restructuring costs) to well above 5% going forward. For an
upgrade, Moody's also expects that NSN will generate free cash
flow of 10-20% of gross adjusted debt on a sustainable basis,
including normalizing, i.e strongly declining restructuring
costs. During this period of restructuring, Moody's expects the
company to maintain liquidity cushions in form of freely
available cash and the undrawn portion of the RCF -- with
comfortable covenant headroom - of at least EUR2.0 billion.
Sustainable achievement of these metrics could lead to an upgrade
over the next couple of quarters.
As of December 32, 2012 NSN has a good liquidity over the next
twelve months. Moody's expects total cash sources of at least
EUR2.2 billion comprising a readily available cash balance of
EUR792 million (excluding EUR100-150 million trapped cash and an
undisclosed amount of cash which is available for corporate
purposes but not immediately accessible), EUR706 million
available for sale investments, a EUR750 million undrawn long-
term revolving credit facility with sufficient covenant headroom
as well as at least break-even free cash flow.
Over the same period Moody's expects cash requirements of around
EUR634 million including EUR229 million debt maturities and
EUR405 million working cash for day-to-day operations.
The envisaged issuance of the EUR600 million senior unsecured
notes with a 5-7 year tenor should extend NSN's debt maturity
profile with the majority of debt coming due between 2018 and
2020. The rating incorporates possible increases of the bond
issuance beyond EUR600 million, depending on market conditions.
Structural Considerations
The senior unsecured notes are issued by NSN Finance B.V. and are
guaranteed by NSN B.V. and NSN Oy, the group's main operating
subsidiary. The existing loans provided by European Investment
Bank, Nordic Investment Bank as well as the revolving credit
facility are all issued by NSN Finance B.V. and guaranteed by NSN
Oy. Given the upstream guarantee from NSN Oy these creditors also
rank in line with local bank debt provided by Firstrand Bank
Limited, a Varma Pension Loan as well as drawn uncommitted local
lines which are all issued by operating entities. Only a EUR32
million OTE loan and NSN's EUR82 million commercial paper
outstanding rank behind senior creditors as they are issued by
NSN Finance B.V. but do not benefit from any upstream guarantees
of operating subsidiaries.
Trade creditors to NSN Oy rank in line with the senior unsecured
notes, European Investment Bank loan, Nordic Investment Bank loan
and revolving credit facility as NSN Oy is the guarantor of these
creditors. All other trade creditors are in a preferred position
given that their claims are not limited to NSN Oy so that they
benefit from a better coverage of their claims. Hence, they rank
ahead of all other bank debt and the senior unsecured notes.
Moody's has rated the senior unsecured notes issued by NSN
Finance B.V. at the same level of the Corporate Family Rating
reflecting the solid positioning of the rating in the B2 rating
category and Moody's assumption that NSN Oy holds the bulk of the
group's intellectual property, and despite the structural
subordination of the notes to a significant amount of trade
payables held at the level of operating subsidiaries other than
NSN Oy. Given the structural subordinated position of the notes
relative to the trade payables sitting at the non-guaranteeing
operating companies, an upgrade of the CFR might not necessarily
lead to an upgrade of the notes at the same time.
Moody's assumes that pension obligations as well as lease
rejection claims are located at operating subsidiary level.
Hence, they rank in line with the senior unsecured notes and all
other creditors except for the OTE loan and NSN's commercial
paper program.
As Moody's treats the group's EUR2.5 billion preferred shares as
equity it has not considered them in the Loss Given Default
analysis.
The principal methodology used in these ratings was the Global
Communications Equipment Industry published in June 2008. Other
methodologies used include Loss Given Default for Speculative-
Grade Non-Financial Companies in the U.S., Canada and EMEA
published in June 2009.
Nokia Siemens Networks, B.V., based in the Netherlands, is a
manufacturer of telecommunications infrastructure focused on
mobile broadband where it belongs to the three biggest providers
worldwide besides Ericsson (A3, negative) and Huawei (unrated).
The group is a joint-venture owned by Nokia (Ba3, negative) and
Siemens (Aa3, stable). Over the last two years NSN has been going
through a period of material restructuring including headcount
reductions of 15,300 people as well as significant asset
disposals. In the last financial year ending on 31 December 2012
the group had net sales of EUR13.4 billion and an operating
profit of a negative EUR741 million including restructuring
charges and a positive EUR822 million before restructuring
charges.
TELECOM EQUIPMENT: S&P Assigns 'B+' Long-Term Corp. Credit Rating
-----------------------------------------------------------------
Standard & Poor's Ratings Services said it assigned its 'B+'
long-term corporate credit rating to telecommunications equipment
maker Nokia Siemens Networks B.V. (NSN). The outlook is stable.
At the same time, S&P assigned its 'B+' issue rating and recovery
rating of '4' to the proposed senior unsecured notes for a total
amount equivalent to EUR600 million, issued by subsidiary Nokia
Siemens Networks Finance B.V. The '4' recovery rating indicates
S&P's expectation of average (30%-50%) recovery prospects in the
event of a default. S&P understands the size of the issue could
reach up to EUR800 million.
The rating on the proposed notes is subject to S&P's satisfactory
review of the final documentation. In the event of any changes
to the amount, terms, or conditions of the instruments, S&P could
review and change the issue rating.
The rating reflects S&P's assessment of NSN's business risk
profile as "weak," including S&P's view of management and
governance as "fair," and its financial risk profile as
"aggressive."
S&P's business risk profile assessment is constrained by specific
risks relating to the telecom equipment industry such as volatile
demand, severe competition from European and Asian rivals, price
erosion, and rapid technology changes. Other negative factors
include NSN's concentrated client base and history of weak
profitability. These weaknesses are partly offset by NSN's solid
market position as the world's second- or third-largest wireless
telecom equipment provider, ongoing improvements in its cost
position, good geographic diversification, and a broad range of
products and services.
A main constraint on S&P's financial risk profile assessment is
its assumption of NSN's weak post-restructuring cash flow
generation, including volatile working capital swings. This
weakness is partly mitigated by NSN's solid capital structure
and, in S&P's view, adequate liquidity, based on its assumption
that the company will not draw on its revolving credit facility
(RCF).
In S&P's base-case scenario, it expects NSN's revenues will
decline by 10% in 2013 and 4% in 2014 because of divestments and
the termination of some non-profitable operations. S&P thinks
organic growth will be modest, assuming NSN maintains its market
position in wireless infrastructure equipment and services, as
telecom carriers roll out fourth-generation (4G) infrastructure
around the world. S&P believes that NSN had about 20% of global
4G spending share in 2012, based on various estimates.
S&P's rating does not include formal support from NSN's 50/50
shareholders Nokia Corp. (BB-/Negative/B) and Siemens AG
(A+/Stable/A-1+), as S&P views NSN as a "nonstrategic" subsidiary
under S&P's criteria. However, S&P believes that the two owners
could support NSN's liquidity in the short term if necessary.
The stable outlook reflects S&P's belief that NSN's EBITDA margin
(adjusted by Standard & Poor's and after restructuring costs)
will be positive in 2013 and 2014, and revenues will not decrease
much more than our -10% and -4% projections, respectively, for
the same years. S&P also expects NSN to maintain adequate
liquidity, comfortable covenant headroom, and an unadjusted net
cash position above EUR1 billion (compared with EUR1.3 billion at
year-end 2012).
S&P could raise the rating if NSN maintained meaningful and
sustainable positive FOCF, an unadjusted net cash position above
EUR1.5 billion, and adjusted debt to EBITDA at about 4x.
S&P could lower the rating if NSN's FOCF was significantly
negative in 2013-2014 or if its liquidity deteriorated. This
could occur if revenues decreased more than in S&P's base-case
for instance because of competition, or if adjusted EBITDA
returned to negative territory.
===========
P O L A N D
===========
CENTRAL EUROPEAN: "Favorably Inclined" to Roust Proposal
--------------------------------------------------------
Central European Distribution Corporation on March 18 confirmed
that it has received a proposal for a financial restructuring of
its 3% Convertible Notes due March 15, 2013. The proposal was
jointly made to CEDC by Roust Trading Ltd. of the 2013 Notes, and
other beneficial owners holding an aggregate of approximately
$85.7 million in outstanding principal amount of the 2013 Notes.
Roust Trading and the 2013 Steering Committee collectively hold
approximately 73% of the outstanding principal amount of the 2013
Notes.
CEDC disclosed that Roust Trading and the 2013 Steering Committee
have reached an agreement on a restructuring of the 2013 Notes,
the terms of which were publicly disclosed by Roust Trading on
March 14, 2013. While CEDC is still reviewing the proposal in
detail, it is favorably inclined toward the proposal and
anticipates that it will support it, subject to appropriate
documentation that, if approved, will be reflected in a
supplement to the offering memorandum distributed by CEDC in
respect of the exchange offers launched on February 25, 2013, as
amended on March 8, 2013.
In addition, CEDC has determined to make certain amendments to
key dates relating to the CEDC FinCo Exchange Offer, the Consent
Solicitation, and the solicitation of acceptances to the Plan of
Reorganization in light of the agreement reached between Roust
Trading and the 2013 Steering Committee, and following further
consultation with a Steering Committee of holders of
approximately 30% of the outstanding principal amount of CEDC
Finance Corporation International, Inc.'s Senior Secured Notes
due 2016 as follows:
-- the record date for the Consent Solicitation and the
solicitation of acceptances of the Plan of Reorganization
will be March 21, 2013;
-- the Consent Fee Deadline and Early Voting Deadline (each as
defined in the Offering Memorandum) will be 5:00 p.m. on
April 3, 2013; and
-- the Voting Deadline and Expiration Time (each as defined in
the Offering Memorandum) will be 5:00 p.m. on April 4, 2013.
CEDC is making these amendments to these key dates to allow
fulsome consideration of the Exchange Offers, the Consent
Solicitation and the Plan. In order to receive the Existing 2016
Notes Consideration, holders of 2016 Notes must validly tender
and not withdraw their 2016 Notes, at or prior to the Expiration
Time. To receive payment of cash pursuant to the Cash Option, the
holder of record of the applicable 2016 Notes on the Distribution
Date must have been the holder of record of the applicable 2016
Notes electing the Cash Option as of March 21, 2013.
CEDC continues to believe that a successful restructuring will
improve its financial strength and flexibility and enable it to
focus on maximizing the value of its strong brands and market
position. The restructuring is expected to have no effect on
CEDC's operations in Poland, Russia, Hungary or Ukraine, all of
which will continue doing business as usual. Obligations to all
employees, vendors, and providers of credit support lines in
Poland, Russia, Hungary and Ukraine will be honored in the
ordinary course of business without interruption. CEDC believes
that its subsidiaries in Poland, Russia, Hungary and Ukraine have
sufficient cash and resources on hand to meet all such
obligations.
Maturity of 3% Convertible Notes due March 15, 2013
On March 15, 2013, CEDC failed to pay US$257,858,000 principal
due on the 2013 Notes. Under the terms of the 2013 Notes
Indenture, the failure to pay principal when due constitutes an
Event of Default. In addition, under Section 6.2 of the
Indenture governing the 2016 Notes, the failure to pay principal
when due on the 2013 Notes constitutes an Event of Default under
the 2016 Notes Indenture and, if continuing, holders of not less
than 25% of the aggregate principal amount of the outstanding
2016 Notes may declare the principal plus any accrued and unpaid
interest on the 2016 Notes to be immediately due and payable.
CEDC currently has US$380 million and EUR430 million (or
approximately US$559.4 million) of 2016 Notes outstanding.
CEDC intends to address the maturity of the 2013 Notes, as well
as the Event of Default under the 2016 Notes Indenture, through
the Exchange Offers. Alternatively, CEDC may choose to implement
the restructuring pursuant to a pre-packaged chapter 11 plan of
reorganization that is included with the offering materials
related to the Exchange Offers. Roust Trading and the 2013
Steering Committee, who collectively hold approximately 73% of
the 2013 Notes, support a restructuring of the 2013 Notes in
accordance with the terms of their restructuring proposal.
Separately, the 2016 Steering Committee has stated that it
supports the terms of the restructuring of the 2016 Notes as
described in the Offering Memorandum.
Any chapter 11 filing would be limited solely to CEDC and CEDC
Finance Corporation International, Inc. None of CEDC's Polish,
Russian, Ukrainian or Hungarian operations would become the
subject of any insolvency proceedings. In this scenario, CEDC
anticipates that all its operations would continue without
interruption in the ordinary course, including the payment of all
employee, vendor, and other obligations.
Annual General Meeting of Shareholders
In light of CEDC's current financial condition as well as the on-
going nature of CEDC's restructuring, the board of directors of
CEDC has determined to delay the annual meeting of CEDC's
shareholders currently scheduled for March 26, 2013, until
Tuesday, May 14, 2013.
CEDC Annual Report
Finally, CEDC announced on March 18 that its Annual Report on
Form 10-K for the year ended December 31, 2012 could not be filed
with the United States Securities and Exchange Commission within
the prescribed time period as the process of preparing CEDC's
financial statements for the year ended December 31, 2012 has
been delayed due to the focus of CEDC's resources on
restructuring its financial obligations, including preparation
and commencement of the Exchange Offers, negotiating with
creditors and addressing open accounting issues related to CEDCs
financial restructuring. CEDC expects to file its Annual Report
on Form 10-K as soon as practicable.
About CEDC
Mt. Laurel, New Jersey-based Central European Distribution
Corporation is one of the world's largest vodka producers and
Central and Eastern Europe's largest integrated spirit beverages
business with its primary operations in Poland, Russia and
Hungary.
Ernst & Young Audit sp. z.o.o., in Warsaw, Poland, expressed
substantial doubt about Central European's ability to continue as
a going concern, following the Company's results for the fiscal
year ended Dec. 31, 2011. The independent auditors noted that
certain of the Company's credit and factoring facilities are
coming due in 2012 and will need to be renewed to manage its
working capital needs.
The Company's balance sheet at Sept. 30, 2012, showed
US$1.98 billion in total assets, US$1.73 billion in total
liabilities, US$29.44 million in temporary equity, and US$210.78
million in total stockholders' equity.
Liquidity
The Company's Convertible Senior Notes are due on March 15, 2013.
The Company has said its current cash on hand, estimated cash
from operations and available credit facilities will not be
sufficient to make the repayment of principal on the Convertible
Notes and, unless the transaction with Russian Standard
Corporation is completed the Company may default on them. The
Company's cash flow forecasts include the assumption that certain
credit and factoring facilities coming due in 2012 would be
renewed to manage working capital needs. Moreover, the Company
had a net loss and significant impairment charges in 2011 and
current liabilities exceed current assets at June 30, 2012.
These conditions, the Company said, raise substantial doubt about
its ability to continue as a going concern.
* * *
As reported by the TCR on Aug. 10, 2012, Standard & Poor's
Ratings Services kept on CreditWatch with negative implications
its 'CCC+' long-term corporate credit rating on U.S.-based
Central European Distribution Corp. (CEDC), the parent company of
Poland-based vodka manufacturer CEDC International sp. z o.o.
"The CreditWatch status reflects our view that uncertainties
remain related to CEDC's ongoing accounting review and that
CEDC's liquidity could further and substantially weaken if there
was a breach of covenants which could lead to the acceleration of
the payment of the 2016 notes, upon receipt of a written notice
of 25% or more of the noteholders," S&P said.
As reported by the TCR on Jan. 16, 2013, Moody's Investors
Service has downgraded the corporate family rating (CFR) and
probability of default rating (PDR) of Central European
Distribution Corporation (CEDC) to Caa3 from Caa2.
"The downgrade follows CEDC announcement on the 28 of December
that it had agreed with Russian Standard a revised transaction to
repay its US$310 million of convertible notes due March 2013
which, in Moody's view, has increased the risk of potential loss
for existing bondholders", says Paolo Leschiutta, a Moody's Vice
President - Senior Credit Officer and lead analyst for CEDC.
CENTRAL EUROPEAN: S&P Lowers Corporate Credit Rating to 'SD'
------------------------------------------------------------
Standard & Poor's Ratings Services said it lowered its long-term
corporate credit rating to 'SD' (selective default) from 'CC' on
U.S.-based Central European Distribution Corp. (CEDC), the parent
company of Poland-based vodka manufacturer CEDC International sp.
z o.o. S&P removed the rating from CreditWatch, where it placed
it with negative implications on June 8, 2012.
At the same time, S&P changed its senior unsecured debt ratings
on CEDC's outstanding US$258 million convertible notes due
March 15, 2013, to 'D' from 'NR' (not rated). Prior to their
placement to 'NR' at maturity, the notes were rated 'CC'. S&P
had placed the 'CC' rating on CreditWatch negative on June 8,
2012.
S&P's 'CC' issue rating on CEDC's outstanding US$380 million and
EUR430 million senior secured notes due 2016 remains on
CreditWatch negative, where S&P placed it on June 8, 2012.
The downgrades reflect S&P's understanding that CEDC failed to
redeem its US$258 million convertibles notes at their March 15,
2013, maturity date. In addition, S&P understands that there is
a cross-default clause between these 2013 notes and the company's
2016 notes. Under the clause, as defined in the documentation
for the 2016 notes, the failure to pay the 2013 notes also
triggers an event of default on the 2016 notes. However, the
cross-default clause does not prompt a default under Standard &
Poor's criteria because, to S&P's knowledge, the repayment of the
2016 notes has not yet been accelerated.
Therefore, S&P has lowered the issue rating on the 2013 notes to
'D', while maintaining the CreditWatch negative on the 'CC' issue
rating on the 2016 notes. The 'D' issue rating on the 2013 notes
further reflects S&P's understanding that under these notes'
documentation, there is no grace period on the repayment of
principal. What's more, S&P do not believe that CEDC will be
able to repay in full the 2013 notes within the next five
business days.
CEDC has made exchange offers on the 2013 notes and 2016 notes,
and S&P views both as distressed. The exchange offer on the 2016
notes is still pending and will expire on April 4, 2013. As per
S&P's criteria, upon completion of an exchange offer it views as
distressed, S&P lowers its ratings on the affected issues to 'D'.
Should the distressed exchange offer be unsuccessful, S&P
understands that CEDC would file for Chapter 11 under U.S.
bankruptcy law. Distressed exchange offers and Chapter 11 filing
are tantamount to a default, under S&P's criteria.
===========
R U S S I A
===========
CREDIT BANK: S&P Affirms 'B+/B' Ratings; Outlook Positive
---------------------------------------------------------
Standard & Poor's Ratings Services said that it had revised its
outlook on Russia-based Credit Bank of Moscow to positive from
stable. At the same time, S&P affirmed the 'B+/B' long- and
short-term counterparty credit ratings and the 'ruA+' Russia
national scale rating.
In S&P's opinion, Credit Bank of Moscow continues to improve its
competitive position in a difficult operating environment, with
better-than-expected asset quality indicators and sustainable
profitability. At the same time, S&P expects the bank to
continue to gain market share and successfully manage the risks
associated with its rapid business expansion of previous years.
S&P believes the improving trend is sustainable, although it
recognizes that Credit Bank of Moscow benefited from the
difficulties that some private-sector peers experienced in the
recent years. Credit Bank of Moscow provides a broad range of
services to its corporate clients, in addition to lending.
These, notably encashment services, enhance customer loyalty and
quality of earnings via diversified streams.
Standard & Poor's bases its ratings on Credit Bank of Moscow on
its 'bb' anchor for banks operating in Russia, as well as its
view of Credit Bank of Moscow's "moderate" business position,
"adequate" capital and earnings, "moderate" risk position,
"average" funding, "adequate" liquidity, and "low systemic
importance" in Russia. The stand-alone credit profile is 'b+'.
The positive outlook reflects S&P's expectation that Credit Bank
of Moscow will continue to gain market share, solidify its
success among corporate clients by offering diverse products,
which should maintain the quality and recurrence of earnings and
keep profitability and asset-quality indicators at above-average
levels.
S&P could upgrade the bank if management is able to cope with
execution risks, if the corporate and retail franchise acquired
in recent years proves durable, and if the bank's growth is
counterbalanced by adequate capitalization.
S&P could also take a positive rating action if it sees an
increase in Credit Bank of Moscow's systemic importance,
following a further growth in market share in the corporate and
retail deposit segments.
S&P could revise the outlook to stable if it sees the bank's
business growth resulting in a high amount of nonperforming
loans, or if the bank increases its risk appetite in new and
unproven areas where management has no expertise.
=========
S P A I N
=========
DEPORTIVO LA CORUNA: Owes US$201 Million, AD Cryex Report Reveals
-----------------------------------------------------------------
Xinhua reports that the perilous state of the finances of some of
Spain's professional football clubs was laid bare Wednesday with
the revelation that Spanish BBVA Primera Liga side Deportivo la
Coruna has debts totaling EUR156,34 million (US$201 million), of
which EUR93.7 million (US$120.7 million) are owed to the Spanish
Treasury.
The figure was published by the company AD Cryex, which is
currently managing Deportivo's financial affairs after the club
recently went into voluntary administration on January 10, Xinhua
discloses.
Deportivo, who are bottom of the Primera Liga with just 20 points
from 28 games, had announced debts of around EUR93 million
(US$120 million) on the day it went into administration, but the
club appears to have greatly underestimated its tax debt,
originally publishing debts of less than half of which the new
report says it now owes, Xinhua notes. Meanwhile Deportivo also
overestimated its assets, saying they were worth EUR185 million
(US$240 million) while AD Cryex considers them to be less than
half that amount, Xinhua relates.
"The real causes of the insolvency are the fact that they
maintained a form of management which was far removed from
reality, increasing expenses and investments in multiple aspects
and in quantities which are absolutely removed from the economic
possibilities of the society," Xinhua quotes the report as
saying.
According to Xinhua, as well as the Treasury, Deportivo also owes
considerable quantities to the banks, Novagalicia and Banco
Gallego, as well as the Spanish Football League (LFP), Spanish
FA, (RFEF) and several clubs, including Betis and Mallorca in
Spain, as well as Uruguayan sides Nacional and Defensor;
Argentinean team, Estudiantes de la Plata and Mexican side, Atlas
de Guadalajara.
Deportivo la Coruna is a Spanish soccer team.
RENTA CORP: To Work with Sareb After Creditor Protection Filing
---------------------------------------------------------------
Ben Sills at Bloomberg News reports that Sareb, the Spanish bad
bank, will work with Renta Corporacion Real Estate and its
creditors after the company decided earlier on Tuesday to seek
protection from creditors.
Renta Corporacion Real Estate SA is a Barcelona-based real estate
developer.
* SPAIN: Banks Pull Plug on Zombie Developers
---------------------------------------------
Sharon Smyth and Rob Urban at Bloomberg News report that
Mikel Echavarren, chief executive officer of Madrid-based
consulting Irea, said Spanish banks are pulling the plug on
thousands of builders kept alive during the past five years even
as they built almost nothing.
The banks, forced by the government last year to set aside
provisions for the developers, have no incentive to keep funding
them, Bloomberg discloses.
"Banks have taken the hit, so extend and pretend is over,"
Bloomberg quotes Mr. Echavarren as saying. "There's no
motivation to refinance companies that aren't viable, have no
liquidity or possibility of future earnings so we'll see a
tsunami of developer bankruptcies in the next two years."
According to Bloomberg, R.R. de Acuna & Asociados, a real-estate
consulting firm, said that more than half of the country's 67,000
developers can be categorized as "zombies," with liabilities that
exceed their assets and only enough income to repay the interest
on their loans.
Irea said that Spanish lenders, ordered last year to set aside
provisions of EUR84 billion to cover anticipated real estate
losses, have no incentive to keep unviable builders afloat after
they've accounted for losses from EUR280 billion of their loans,
Bloomberg notes.
Mr. Echavarren, as cited by Bloomberg, said that only developers
with sufficient rental income from commercial property to repay
debt or those still building homes in areas where they can be
sold at a profit will survive. He estimates that between 5% and
10% of Spanish developers fall into those categories, Bloomberg
discloses.
Iberinform, a unit of credit insurer Credito y Caucion, said that
since 2008, more than 19,000 real estate and construction
companies, or 14% of the total, have gone out of business,
Bloomberg notes.
Carles Vergara, a Barcelona-based professor of Financial
Management at the IESE Business School, says banks can no longer
justify rescuing real estate companies, Bloomberg says.
=============
U K R A I N E
=============
BANK KHRESCHATYK: Fitch Affirms 'B-' Long-Term Currency IDRs
------------------------------------------------------------
Fitch Ratings has affirmed and simultaneously withdrawn Ukraine-
based Bank Khreschatyk's ratings.
The issuer has chosen to stop participating in the rating
process. Therefore, Fitch will no longer have sufficient
information to maintain the ratings, and will no longer provide
ratings or analytical coverage.
Key Rating Drivers
The affirmation of Khreschatyk's ratings reflects the limited
changes in its credit profile during 2012 and considers the
bank's currently comfortable liquidity, the absence of any
material refinancing risk, limited direct exposure to exchange
rate risk, as well as compliance with the regulatory
requirements, including on minimum capital adequacy. The Negative
Outlook continues to reflect the ongoing asset quality and
profitability challenges the bank is facing that undermine its
capitalization and result in low capacity to absorb loan losses.
Khreschatyk was loss-making during 2009-2011, with profitability
constrained by slow growth, high cost of customer funding, which
is predominantly denominated in the Ukrainian hryvnia, and high
loan impairment charges. The bank reported a marginal profit in
2012 following a marked drop in loan impairment charges (local
GAAP). However, recent trends evidence a continued moderate
deterioration in asset quality metrics.
NPLs (loans overdue for over 90 days) amounted to 9.4% of end-
Q312 loans reported under local GAAP and restructured/rolled-over
exposures accounted for a substantial 56% of the portfolio (end-
Q112: 9.3% and 68%, respectively). The latter category implies a
significant potential for further rise in impairments, in Fitch's
view. Recoveries on these exposures, a large proportion of which
were from the construction/real estate segment, will likely be a
long process driven by the macroeconomic and property market
trends. Fitch estimates that the bank could create reserves equal
to only 11% of the loan book without breaching the regulatory
minimum ratio of 10%.
The bank's lending remains highly concentrated (at end-Q312,
exposures to the top 20 borrowers accounted for a high 67% of
loans and 496% of equity), including related parties, heightening
the bank's risk profile. Lending in foreign currencies accounted
for a moderate 20% of net loans, lower than the sector average of
37% at end-2012.
The liquidity position is currently reasonable. A cushion of
highly liquid assets covered nearly 17% of client deposits,
although retail depositors (around 42% of liabilities) can be
sensitive to market rate changes, causing moderate volatility in
account balances. Loans/deposits ratio remained below 100%, and
the bank had no outstanding capital market borrowings at end-
2M13. Capital adequacy ratio is managed at above the regulatory
minimum of 10% (end-2M13: 12.3%), although more capital could be
required should asset quality continue to deteriorate.
Khreschatyk is a small universal bank, Ukraine's 26th-largest by
total assets at end-2012. The City of Kiev holds around 25% of
the bank's shares with the rest of ownership ultimately
distributed between a few groups of private individuals.
The rating actions are:
-- Long-term foreign and local currency IDRs: affirmed at 'B-';
Outlook Negative; withdrawn
-- Short-term foreign currency IDR: affirmed at 'B'; withdrawn
-- Viability Rating: affirmed at 'b-'; withdrawn
-- Support Rating: affirmed at '5'' withdrawn
-- Support Rating Floor: affirmed at 'No Floor'; withdrawn
-- National Long-term rating: affirmed at 'BBB-(ukr)'; Outlook
Negative; withdrawn
KCA DEUTAG: Moody's Assigns (P)B3 Rating to US$860MM Notes Issue
----------------------------------------------------------------
Moody's Investors Service assigned provisional (P)B3 ratings to
the issuance of US$860 million senior secured notes, due 2020, by
KCA Deutag Finance plc and the US$400 million term loan B, due
2019, at KCA Deutag Finance S.a.r.l. Both entities are
subsidiaries of KCA Deutag Alpha Limited ("KCA Deutag").
Moody's also upgraded the group's probability of default rating
to B3-PD, in-line with the affirmed B3 corporate family rating.
The outlook on all ratings remains positive.
The proceeds from the term loan B and note issuance, in
combination with a new US$250 million revolving credit facility
(RCF) are intended to repay around US$1.2 billion in indebtedness
under the existing senior secured credit and short term
facilities as part of a refinancing of the group.
Moody's issues provisional ratings in advance of the final sale
of securities. Upon closing of the transaction and a conclusive
review of the final documentation, Moody's will endeavor to
assign definitive ratings. A definitive rating may differ from a
provisional rating.
Ratings Rationale:
The (P)B3 ratings on the new notes and term loan B reflect that
they rank pari passu and benefit from the same security and
guarantee package. However, both rank junior to the super senior
RCF with respect to the repayment waterfall.
The notes, term loan B and RCF will be jointly and severally
guaranteed on a senior basis by the same subsidiaries of KCA
Deutag, which at 31 December 2012 represented 95% of consolidated
gross assets (74% of total revenue or 54% of consolidated
EBITDA). Moody's notes that EBITDA guarantor coverage is weak due
to the group's operations in Russia and other jurisdictions where
granting of upstream guarantees is limited.
KCA Deutag's CFR is affirmed at B3. This reflects the group's
high adjusted leverage of around 5.5x at FY2012, negative free
cash flow and its exposure to the highly competitive and cyclical
drilling industry. The CFR also factors in the group's relatively
small scale with only 66 land rigs and 5 offshore units, combined
with high operating leverage, as is customary within this
industry.
At the same time, the B3 CFR is supported by KCA Deutag's
geographic and business segment diversification and focus on
international land drilling markets, which are characterized by
generally higher barriers to entry -- and hence less volatile
drilling activity -- relative to the North American drilling
contractor market, albeit with greater political risk. The CFR
also incorporates KCA Deutag's solid US$3.1 billion backlog,
which provides a high degree of revenue visibility in 2013.
The PDR has been upgraded one notch to B3-PD, in-line with the
CFR, solely to account for the change to a structure consisting
of both bank and bond debt and an expected family recovery rate
of 50%.
In 2012, revenue increased 21% and Moody's adjusted EBITDA
increased 16% to US$270 million. This was driven by increases in
the land drilling and platform services divisions, leading to a
reduction in adjusted leverage of around 0.5x. However, KCA
Deutag's results in 2012 were below Moody's expectations, with
adjusted leverage ending the year at 5.5x, following problems in
the offshore drilling division (MODU) and high capex. It has
suffered weak performance in the MODU division in the past and
this division fell short again in 2012. The group had delays in
two of the barges commencing on contract and prolonged special
periodic survey maintenance for two of the three jack-ups.
Moody's regards KCA Deutag's liquidity as adequate for its near-
term requirements. The company had cash of US$39 million as of
December 2012 and pro forma for the refinancing is expected to
have US$208 million in availability under the new US$250 million
RCF maturing in 2018. In 1Q 2013, it received US$40 million from
an equity injection and should also benefit from US$55 million
from the sale of its jack-up offshore rig. Although Moody's notes
that free cash flow is expected to be negative through 2013 and
to a lesser extent in 2014, the new capital structure has very
limited debt amortization payments of 1% per annum and the new
term loan and notes will extend the group's debt maturity profile
by three years to 2019 and 2020 respectively. Moreover, following
the refinancing, covenant headroom is expected to be good with
only the RCF having a financial covenant, which references a
minimum level of EBITDA.
Notwithstanding the fact that 2012 results were below Moody's
expectations, the ongoing positive outlook reflects Moody's view
that the company's increase in capital expenditure and ramp up of
its land rig fleet as well as higher utilization of its MODU
fleet should enable it to further de-lever going forward.
Moody's would consider a rating upgrade if KCA Deutag's adjusted
debt/EBITDA were to fall below 4.5x while improving free cash
flow generation and maintaining sufficient contracted utilization
in the MODU division. Conversely, the outlook could be stabilized
if the expected deleveraging does not materialize or market
conditions worsen. Additionally, the CFR could face downward
pressure if adjusted debt/EBITDA rises to 6x or if the liquidity
profile deteriorates.
The principal methodology used in this rating was the Global
Oilfield Services Rating Methodology published in December 2009.
Other methodologies used include Loss Given Default for
Speculative-Grade Non-Financial Companies in the U.S., Canada and
EMEA published in June 2009.
Registered in England/Wales, UK, KCA Deutag Alpha Limited. is a
holding company for KCA Deutag, a provider of onshore and
offshore drilling services as well as engineering services to
both IOCs and NOCs in international markets. Its ultimate owner
is a consortium led by Pamplona Capital Management and several
former Mezzanine debt holders. In 2012, KCA Deutag Alpha Limited
reported consolidated revenues of around US$1.7 billion.
===============
X X X X X X X X
===============
* Moody's Releases March Report on European RMBS, ABS and Bonds
---------------------------------------------------------------
Moody's Investor Service has published the March edition of
Credit Insight, a monthly structured finance newsletter, which
provides Moody's views on recent developments in European
residential mortgage-backed securities (RMBS), assets-backed
securities (ABS) and covered bonds.
In the latest publication, Moody's discusses how a combination of
lender forbearance and more manageable affordability will help
older UK borrowers with interest-only (IO) loans avoid
repossession over the next two years as the refinancing wall
approaches. After two years, however, older borrowers with IO
loans are likely to have more difficulty than younger borrowers
with IO loans. These factors will have only a limited impact on
the creditworthiness of RMBS deals as older borrowers comprise
only 8.4% of these pools.
Moody's Credit Insight newsletter also discusses the credit
positive implications for Spanish small and medium-sized
enterprises (SMEs) (and hence also credit positive for Spanish
SME securitization deals), following the Spanish government's
recently announced package of measures designed to stimulate the
domestic economy. The measures increase credit availability and
ease cash flow restrictions, which are key drivers of SME
delinquencies.
In addition, the newsletter discusses the credit positive
implications for Russian RMBS and ABS transactions of Russian
originators' increased use of credit bureaus. Credit bureau
information allows for the proper verification of obligors'
historical ability to pay, which is particularly important
because of the high number of obligors in Russia receiving grey
income. Such information allows originators to construct mortgage
portfolios for their securitization transactions with lower
levels of delinquencies and defaults.
This month's issue of Credit Insight also discusses the credit
positive implications for French CMBS of the recent French court
ruling in the Coeur Defense case. The decision confirms the
enforceability of security assignments of lease receivables even
upon insolvency of the lessor. This decision limits the
vulnerability of secured creditors to the insolvency of borrowers
established as corporate special purpose vehicles.
* Upcoming Meetings, Conferences and Seminars
---------------------------------------------
Apr. 10-12, 2013
TURNAROUND MANAGEMENT ASSOCIATION
TMA Spring Conference
JW Marriott Chicago, Chicago, Ill.
Contact: http://www.turnaround.org/
Apr. 18-21, 2013
AMERICAN BANKRUPTCY INSTITUTE
Annual Spring Meeting
Gaylord National Resort & Convention Center,
National Harbor, Md.
Contact: 1-703-739-0800; http://www.abiworld.org/
June 13-16, 2013
AMERICAN BANKRUPTCY INSTITUTE
Central States Bankruptcy Workshop
Grand Traverse Resort, Traverse City, Mich.
Contact: 1-703-739-0800; http://www.abiworld.org/
July 11-13, 2013
AMERICAN BANKRUPTCY INSTITUTE
Northeast Bankruptcy Conference
Hyatt Regency Newport, Newport, R.I.
Contact: 1-703-739-0800; http://www.abiworld.org/
July 18-21, 2013
AMERICAN BANKRUPTCY INSTITUTE
Southeast Bankruptcy Workshop
The Ritz-Carlton Amelia Island, Amelia Island, Fla.
Contact: 1-703-739-0800; http://www.abiworld.org/
Aug. 8-10, 2013
AMERICAN BANKRUPTCY INSTITUTE
Mid-Atlantic Bankruptcy Workshop
Hotel Hershey, Hershey, Pa.
Contact: 1-703-739-0800; http://www.abiworld.org/
Aug. 22-24, 2013
AMERICAN BANKRUPTCY INSTITUTE
Southwest Bankruptcy Conference
Hyatt Regency Lake Tahoe, Incline Village, Nev.
Contact: 1-703-739-0800; http://www.abiworld.org/
Oct. 3-5, 2013
TURNAROUND MANAGEMENT ASSOCIATION
TMA Annual Convention
Marriott Wardman Park, Washington, D.C.
Contact: http://www.turnaround.org/
Nov. 1, 2013
AMERICAN BANKRUPTCY INSTITUTE
NCBJ/ABI Educational Program
Atlanta Marriott Marquis, Atlanta, Ga.
Contact: 1-703-739-0800; http://www.abiworld.org/
Dec. 2, 2013
BEARD GROUP, INC.
19th Annual Distressed Investing Conference
The Helmsley Park Lane Hotel, New York, N.Y.
Contact: 240-629-3300 or http://bankrupt.com/
Dec. 5-7, 2013
AMERICAN BANKRUPTCY INSTITUTE
Winter Leadership Conference
Terranea Resort, Rancho Palos Verdes, Calif.
Contact: 1-703-739-0800; http://www.abiworld.org/
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers'
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than US$3 per
share in public markets. At first glance, this list may look
like the definitive compilation of stocks that are ideal to sell
short. Don't be fooled. Assets, for example, reported at
historical cost net of depreciation may understate the true value
of a firm's assets. A company may establish reserves on its
balance sheet for liabilities that may never materialize. The
prices at which equity securities trade in public market are
determined by more than a balance sheet solvency test.
A list of Meetings, Conferences and Seminars appears in each
Thursday's edition of the TCR. Submissions about insolvency-
related conferences are encouraged. Send announcements to
conferences@bankrupt.com
Each Friday's edition of the TCR includes a review about a book
of interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/booksto order any title today.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter-Europe is a daily newsletter co-
published by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., 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
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re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers.
Information contained herein is obtained from sources believed to
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The TCR Europe subscription rate is US$775 per half-year,
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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
202-241-8200.
* * * End of Transmission * * *