/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/140207.mbx T R O U B L E D C O M P A N Y R E P O R T E R E U R O P E Friday, February 7, 2014, Vol. 15, No. 27 Headlines A U S T R I A * AUSTRIA: Fitch Says Bad Bank, Levy Reform May Benefit Sector B E L A R U S DEVELOPMENT BANK: Fitch Assigns 'B-' IDRs; Outlook Stable G E R M A N Y FLEET STREET: S&P Withdraws 'CCC-' Rating on Class D Notes PANTHERWERKE AG: Files for Insolvency in Bielefeld G R E E C E GREECE: Fitch Sees Slowdown in Distressed Mortgage Borrowers I R E L A N D ELVERYS SPORTS: High Court Appoints Examiner Ahead of MBO HARVEST CLO IV: Fitch Affirms 'Bsf' Ratings on Two Note Classes STARTS IRELAND: Moody's Confirms Ba2 Rating on $50MM Notes I T A L Y ALITALIA SPA: Air France Still Open to Investment Deal L A T V I A LIEPAJAS METALURGS: Administrator Plans to Sell Assets N E T H E R L A N D S HOLLAND HOMES: Fitch Affirms 'BBsf' Ratings on Two Note Classes P O R T U G A L PORTUGAL: Christie's Pulls Auction of Joan Miro Art After Uproar S P A I N * SPAIN: Corporate Bankruptcy Filings Up 10.4% in 2013 U N I T E D K I N G D O M AM PROFILES: In Liquidation, Utopia Tableware Buys Warehouse ARQIVA BROADCAST: Fitch Assigns 'B-' Rating to 2020 Notes PUNCH TAVERNS: Bondholders Balk at Financial Restructuring Plan RESIDENTIAL MORTGAGE: S&P Lifts Ratings on 2 Note Classes to BB+ X X X X X X X X * EUROPE: Fitch Says Credit Investors' EM Risk Fears Grow * BOOK REVIEW: Jacob Fugger the Rich ********* ============= A U S T R I A ============= * AUSTRIA: Fitch Says Bad Bank, Levy Reform May Benefit Sector -------------------------------------------------------------- Austrian banks may benefit from bank levy reforms and the creation of a "bad bank" for the wind-down of Hypo Alpe-Adria- Bank, to be negotiated this month with the government, Fitch Ratings says. Reallocation of the levy to part-capitalise the bad bank and create a new resolution fund could reduce regulatory cost inflation in the Austrian banking sector. The government's preferred option for winding down Hypo Alpe, nationalized in 2009, is to create a bad bank majority owned by the large Austrian banks with a minority state holding. The government's aim is to keep the vehicle's liabilities off Austria's public debt calculation, similar to Ireland's NAMA and Spain's SAREB. The bad bank model's details have not yet been revealed and need to be finalized. "We believe reallocation of the bank levy to help facilitate the creation of a bad bank would be the least worst option and most likely outcome for the Austrian banks. The government is highly unlikely to impose insolvency or use more aggressive "bail-in" tools because this would threaten systemic stability. A restructuring of Hypo Alpe into a state-guaranteed public-law institution is also unlikely because the government wants the banks to participate in the solution," Fitch said. Reform of the Austrian bank levy would benefit the banks. The existing levy places a high cost burden on them. At EUR640 million in 2013, it exceeded 20% of the sector's net income and the one paid by the German banking sector, whose assets are nine times larger. The tax is largely used to fill Austria's recurring budget deficits, with only a small amount earmarked for financial stability, resulting in limited transparency. Partially diverting the levy to support the creation of a bad bank for Hypo Alpe and build up a resolution fund would help gradually reduce the banking sector's reliance on the state to deal with future shocks. "We believe it could also save banks around EUR150 million costs per year, which they would otherwise have had to contribute to the new resolution fund starting in 2014 under the European Bank Recovery and Resolution Directive," Fitch said. But banks will probably still have to put another EUR150 million annually into a deposit protection fund from this year, so regulatory costs would stay high relative to foreign banks. Large Austrian banks also pay heavy levies in a number of their central and eastern European markets, especially Hungary. A gradual recovery of earnings would provide further relief from regulatory cost pressures. There are still major uncertainties about the wind-down of Hypo Alpe. Large Austrian banks want to be compensated for contributing to a bad bank and protect themselves against its future deterioration. Protracted litigation between the government and Hypo Alpe's former owner could delay the implementation of a solution. ============= B E L A R U S ============= DEVELOPMENT BANK: Fitch Assigns 'B-' IDRs; Outlook Stable --------------------------------------------------------- Fitch Ratings has assigned Development Bank of the Republic of Belarus (DBRB) Long-term foreign and local currency Issuer Default Ratings (IDR) of 'B-' with Stable Outlook. Key Rating Drivers DBRB's ratings are underpinned by a high propensity of support from the government of the Republic of Belarus, if needed. However, Fitch's view of the fairly weak credit profile of the sovereign, and hence its ability to provide assistance, mean that support cannot be relied upon. Fitch's view of the high propensity to support is based on the bank's 95% ownership by the Council of Ministers of the Republic of Belarus, DBRB's legally defined policy role of lending under state-directed programs, and its close association with the Belarusian authorities. DBRB's Board of Directors is chaired by the Belarusian Prime Minister and includes high-ranked officials, and major decisions affecting the bank are taken at governmental level. The dominant share of local currency funding (mostly bonds) in DBRB's liabilities means that the authorities' ability to provide support should not be heavily dependent on the sovereign's external finances. DBRB's loan book is dominated by large and fairly high-risk loans issued under government program and taken over from other state banks as part of the government's strategy aimed at consolidating such loans within DBRB. Most of these loans were issued at low rates to state-owned companies (92% of the largest 25 exposures at DBRB), while the bank gets compensated by the Ministry of Finance for the interest expense it pays on market-rate funding. Reported NPLs (overdue over 90 days) and restructured loans at end-1H13 were high at 12% and 4%, respectively, of gross loans, but both were fully covered by reserves. DBRB's portfolio growth plans will be defined by government directives on new lending under government program (earmarked at about BYR4 trillion for 2014) and on loan transfers from state banks (BYR1.15 trillion planned in 2014). As a development bank DBRB is exempt from regulatory capital requirements. The bank's total capital adequacy ratio calculated in line with statutory requirements was 30% at end-1H13 (22% as per Basel standards). This ratio increased further to 38% at end-2013 following a BUR2.8 trillion capital injection. The sizable capital buffers meant that the bank could have reserved up to half of the loan book at end-2013 before breaching the internal capital adequacy limit of 10% set by the Board of Directors. DBRB's liquidity is reasonable at present, while refinancing and foreign currency risks are limited. Liquid assets were moderate at approximately BYR1.4 trillion or 2% of assets at end-3Q13; however, DBRB is not allowed to attract customer deposits and its funding is mainly wholesale borrowings, most of which are long- term local bonds (82% of liabilities) held by the National Bank of the Republic of Belarus and state-owned banks. The remainder are deposits attracted from the Ministry of Finance. Liabilities maturing in 2014 represented a moderate BYR670 billion or 3% of end-3Q13 liabilities. Rating Sensitivities The ratings are likely to move in tandem with Fitch's assessment of the sovereign credit profile. The rating actions are as follows: Long-term Foreign and Local Currency IDRs: assigned at 'B-'; Outlook Stable Short-term Foreign Currency IDR assigned at 'B' Support Rating assigned at '5' Support Rating Floor assigned at 'B ============= G E R M A N Y ============= FLEET STREET: S&P Withdraws 'CCC-' Rating on Class D Notes ---------------------------------------------------------- Standard & Poor's Ratings Services withdrew its credit ratings on Fleet Street Finance Two PLC's class B, C, and D notes following their full redemption. The withdrawals follow the cash manager's confirmation that all classes of notes were fully redeemed on the January 2014 interest payment date. Fleet Street Finance Two was a German commercial mortgage-backed securities true-sale transaction that closed in October 2006. It was backed by a single loan secured on a Karstadt sale-and- leaseback portfolio, mostly comprising German department stores. RATINGS LIST Class Rating To From Fleet Street Finance Two PLC EUR1.192 Billion Commercial Mortgage-Backed Floating-Rate Notes Ratings Withdrawn B NR BB (sf) C NR CCC (sf) D NR CCC- (sf) NR--Not rated. PANTHERWERKE AG: Files for Insolvency in Bielefeld -------------------------------------------------- Jo Beckendorff at Bike Europe reports that the insolvency court in Bielefeld, Germany, confirmed Pantherwerke AG filed for insolvency on February 3, 2014. According to Bike Europe, Pantherwerke's insolvency case is still in process at the court which hasn't appointed a receiver yet. The receiver is to investigate the reasons for the insolvency as well as the proceedings and is expected to make further announcements on short notice, Bike Europe says. For industry insiders, the insolvency didn't come out of the blue, Bike Europe states. In November 2013, Pantherwerke AG sold its Baltik Vairas factory in Lithuania to a Danish investment group related to Niels Peter Preztmann, a board member of UAB Baltik Vairas, Bike Europe recounts. Moreover, currently it is not clear how Pantherwerke's Czech subsidiary Masterbike SRO is affected by the insolvency, Bike Europe says. Further info on that will follow out as soon as the receiver is appointed and starts the insolvency proceedings, Bike Europe notes. Based in Loehne, Germany, Pantherwerke was founded in 1896 and is one of the largest bike suppliers in Germany. =========== G R E E C E =========== GREECE: Fitch Sees Slowdown in Distressed Mortgage Borrowers ------------------------------------------------------------ Fitch Ratings said there has been a slowdown in the number of new borrowers in the Greek housing market getting into mortgage distress, although the volume of loans in late stage arrears continues to increase due to low foreclosure activity. In 4Q13 the level of loans in arrears more than three months including defaults reached 10% of current collateral balance compared with 8% in 4Q12. Two key pieces of legislation were passed in the Greek Parliament in 4Q13 - Law 4224/2013 and Law 4223/2013. The former extended the suspension of property auctions until the end of 2014 but now takes into account the borrowers' income. "The majority of the defaulted borrowers remain protected, despite the fact that the revised foreclosure ban may have a lower coverage," says Sanja Paic, Director in Fitch's RMBS Surveillance team. Fitch expects recoveries to remain stagnant for the rest of 2014 with the 4Q13 index reporting cumulative recoveries as a percentage of cumulative net defaults at 2.6%. Law 4223/2013 consolidated various property ownership taxes and reduced the property transfer tax. "The recent changes to property taxation remove some uncertainties in the minds of potential purchasers and may support sentiment in the real estate market, but the macroeconomic backdrop is still putting overwhelming downwards pressure on values," says Andrew Currie, Head of EMEA Structured Finance Surveillance at Fitch. Greek home prices continued to fall as the market remains weak, with the peak-to-current decline reaching 34.3% in 3Q13. However, the quarter-on-quarter trend shows that the price falls have decelerated, decreasing only 0.9% from 2Q13. The agency expects a further home price decline of 6% in 2014. Data collected by Fitch suggests that servicers continue to actively pursue permitted variations and repurchases in RMBS transactions. This was the main reason behind the superior performance of the RMBS transactions compared with the Bank of Greece's data on non-performing housing loans for 3Q13 at 25.8%. Fitch's 'Mortgage Market Index - Greece' is part of the agency's quarterly series of index reports. It includes information on the performance of residential mortgages, predominantly from RMBS transactions, but also those held on bank balance sheets. The report sets the housing market against the macroeconomic background and provides commentary on the emerging trends. ============= I R E L A N D ============= ELVERYS SPORTS: High Court Appoints Examiner Ahead of MBO --------------------------------------------------------- The Irish Times reports that an interim examiner has been appointed by the High Court to Elverys Sports. The move on foot of a petition by the National Asset Management Agency comes as a pre-pack receivership of the company ahead of a management buy-out unraveled in the last few days, The Irish Times relays. According to The Irish Times, Mr. Justice Brian McGovern was told that the board of the company which owns Elverys Sports, Staunton Sports, supported the petition for an interim examiner to be appointed. The judge was told that it was not a hostile petition and NAMA is the company's largest secured creditor with loan facilities due and owing of EUR23 million and STG250,000, The Irish Times discloses. Moving the petition, Rossa Fanning BL, as cited by The Irish Times, said there was no doubt Elverys is insolvent but it is believed the underlying business is viable as a going concern once the debt issues are dealt with. Mr. Justice Brian McGovern appointing Simon Coyle of Mazars as interim examiner initially for the next six days deemed the circumstances exceptional and set down the hearing of the petition for February 18th next, The Irish Times relates. Elverys Sports is a sports store in Ireland. The company employs 654 people in 56 stores nationwide. HARVEST CLO IV: Fitch Affirms 'Bsf' Ratings on Two Note Classes --------------------------------------------------------------- Fitch Ratings has affirmed Harvest CLO IV Plc.'s notes, as follows: -- EUR402.3 million Class A-1A (ISIN XS0254041493): affirmed at 'AAAsf'; Outlook Stable -- EUR74.0 million Class A-1B (ISIN XS0254042541): affirmed at 'AAsf'; Outlook revised to Positive from Stable -- EUR44.9 million Class A-2 (ISIN XS0254042970): affirmed at 'AAsf'; Outlook revised to Positive from Stable -- EUR54.6 million Class B-1 (ISIN XS0254043861): affirmed at 'Asf'; Outlook Stable -- EUR4.4 million Class B-2 (ISIN XS0254046963): affirmed at 'Asf'; Outlook Stable -- EUR29.0 million Class C (ISIN XS0254048746): affirmed at 'BBBsf'; Outlook Stable -- EUR11.1 million Class D-1 (ISIN XS0254050213): affirmed at 'BBsf'; Outlook Stable -- EUR8.9 million Class D-2 (ISIN XS0254052771): affirmed at 'BBsf'; Outlook Stable -- EUR15.4 million Class E-1 (ISIN XS0254054553): affirmed at 'Bsf'; Outlook revised to Stable from Negative -- EUR1.6 million Class E-2 (ISIN XS0254055360): affirmed at 'Bsf'; Outlook revised to Stable from Negative Harvest CLO IV Plc. is a securitization of senior secured loans managed by 3i Debt Management Investments Ltd, which closed in 2006. The final legal maturity is July 2021. Key Rating Drivers The affirmation reflects both the sufficient credit enhancement and the material excess spread that would support all notes in a high default environment. The revision of the Outlooks on the class A-1B and A-2 notes recognizes the potential benefit of excess spread and the likely increase in credit enhancement over the next 18-24 months. This is due to the transaction deleveraging following the end of the reinvestment period (in July 2013) and the manager's current inability to reinvest unscheduled principal proceeds or proceeds from the sale of credit improved obligations due to the breach of a collateral quality test and a portfolio profile test. The revision of the Outlooks on the class E-1 and E-2 notes is due to the material reduction in exposure to short-term refinancing risk. Since the last review in February 2013, the underlying portfolio has improved slightly with the Fitch weighted average rating factor falling to 32.99 from 33.24 per the current Fitch rating factor weights. This was due to decreased exposure to 'CCC' rated and below assets (3.9% from 4.1% in December 2012) and minor positive rating migration of 'B-' rated assets. In the same period, the weighted average spread increased to 4.1% from 3.77%. The weighted average life of the portfolio has increased to 4.75 years from 4.2 years since the last review due to the shift in the portfolio's maturity profile. The exposure to assets maturing between 2014-2015 has declined by 79% year on year (to 4.8% of the outstanding portfolio), substantially reducing the short-term exposure to refinance risk, while the proportion of the portfolio maturing after 2017 increased to 67.86% from 31.10%. The over-collateralization (OC) tests are all passing and have remained steady during the past year. The headroom on the most junior OC test is currently 1.0%, which is considered indicative of efficient OC covenants. The transaction's interest diversion test breached during 2013, which diverted a portion of excess spread to purchasing new collateral. This test is not effective post the reinvestment period. There has been one new default in the portfolio since the last review and current defaults represent 2.3% of the outstanding portfolio balance. Rating Sensitivities Fitch ran various rating sensitivity scenarios on the transaction to assess the impact on the notes' ratings if the key risk drivers -- default rates and recovery rates -- were stressed. Increasing the default probability of all the assets in the portfolio by 25% would likely result in a downgrade of the notes of between zero and two notches while applying a recovery rate haircut of 25% on all the assets would likely result in a downgrade of the notes of between zero and two notches. STARTS IRELAND: Moody's Confirms Ba2 Rating on $50MM Notes ---------------------------------------------------------- Moody's Investors Service announced the following rating action on Starts (Ireland) PLC Series 2007-31: Issuer: Starts (Ireland) PLC Series 2007-31 Series 2007-31 USD50,000,000 Class A2-D2 AAA/Aaa Rated Floating- Rate Credit-Linked Notes due 2017, Confirmed at Ba2 (sf); previously on November 19, 2013 Ba2 (sf) Placed Under Review for Possible Downgrade This transaction is a corporate synthetic collateralized debt obligation (CSO) referencing a portfolio of corporate senior unsecured bonds, originally rated in 2007. Ratings Rationale The actions reflect key changes to Moody's modeling assumptions, which incorporate 1) removing the 30% macro default probability stress for corporate credits, 2) lowering the average recovery rate assumptions for most types of debt, 3) modifying the modeling framework for corporate asset correlations, 4) introducing an adverse selection adjustment on default probabilities where relevant, and 5) simplifying the cheapest-to- deliver haircut that applies to recoveries. This action concludes the review of the CSO, announced on 19 November 2013, because of its update to the CSO methodology. Although the key changes in modeling assumptions resulted in lower modeled results, the effect is mitigated by a higher remaining subordination given the CSO's time to maturity relative to expectations since the last rating action. The remaining time to maturity of the transactions is 3.4 years and the attachment point is 7.35%, based on the trustee's December 2013 report. The portfolio's ten-year weighted average rating factor (WARF) is 723, excluding settled credit events. Moody's rates the majority of the reference credits investment grade, with 3.0% rated Caa (sf) or lower. In addition, the number of reference credits with a negative outlook is 22, compared to four with a positive outlook; there are no reference credits on review for downgrade, compared to one on review for upgrade. The average gap between MIRs and Moody's senior unsecured ratings is -0.8 notches for over-concentrated sectors and 1.0 notch for non-over concentrated sectors. Currently, the over-concentrated sectors are Banking, Finance, Insurance and Real Estate comprising 36% of the portfolio. Based on the trustee's December 2013 report, six credit events, equivalent to 6.4% of the portfolio based on the portfolio's notional value at closing, have taken place. Since inception, the subordination of the rated tranche has declined by 2.05% due to credit events on Fannie Mae, Freddie Mac, Lehman Brothers, CIT Group and PMI Group, net of trading gains and losses. Methodology Underlying the Rating Action The principal methodology used in this rating was "Moody's Approach to Rating Corporate Synthetic Collateralized Debt Obligations" published in November 2013. Factors that Would Lead to an Upgrade or Downgrade of the Rating These transactions are subject to a high level of uncertainty, primarily because of 1) unexpected volatility in the credit and macroeconomic environment; 2) divergence in the legal interpretation of documentation by different transactional parties because of embedded ambiguities; and 3) unexpected changes in the portfolio composition as a result of the actions of the transaction parties. For CSOs, the performance of the credit default swaps can be affected either positively or negatively by 1) variations over time in default rates for instruments with a given rating; 2) variations in recovery rates for instruments with particular seniority/security characteristics; and 3) uncertainty about the default and recovery correlations characteristics of the reference pool. Given the tranched nature of CSO liabilities, rating transitions in the reference pool can have leveraged rating implications for the ratings of the CSO liabilities that could lead to a high degree of rating volatility, which is likely to be higher for the more junior or thinner liabilities. In addition to the base case analysis described above, Moody's also conducted sensitivity analyses, discussed below. Results are in the form of the difference in the number of notches from the base case, in which a higher number of notches corresponds to lower expected losses, and vice-versa. Moody's ran a scenario in which it reduced the maturity of the CSO by six months keeping all other things equal. The result of this run was 0.5 notches higher than in the base case. Moody's conducted a sensitivity analysis in which the adverse selection adjustment is removed and MIRS are modeled in place of the corporate fundamental ratings to derive the default probability of the reference entities in the portfolio. The result of this run was 3.0 notches higher than in the base case. Moody's conducted a stress analysis in which it defaulted all entities rated Caa or lower. The result was 0.4 notches lower than in the base case. In addition to the quantitative factors Moody's models explicitly, rating committees also consider qualitative factors in the rating process. These qualitative factors include a transaction's structural protections, recent deal performance in the current market environment, the legal environment, specific documentation features and the portfolio manager's track record. All information available to rating committees, including macroeconomic forecasts, input from other Moody's analytical groups, market factors, and judgments regarding the nature and severity of credit stress on the transactions, can influence the final rating decision. ========= I T A L Y ========= ALITALIA SPA: Air France Still Open to Investment Deal ------------------------------------------------------ Michael Stothard at The Financial Times reports that Air France- KLM is still open to investing more in its struggling Italian partner Alitalia if restructuring conditions are met, despite the breakdown of talks last year and the emergence of a potential Middle Eastern investor. Chief executive Alexandre de Juniac said in an interview with the FT that a mooted investment from Abu Dhabi flag carrier Etihad Airways announced last week could even strengthen their business case for investing. Mr. de Juniac, as cited by the FT, said that Air France-KLM would have to wait for the terms of any deal with Etihad before coming to a conclusion and that there could be negative aspects as well to the deal, such as not being "alone in the driving seat". Mr. de Juniac added that either way the investment in Alitalia by Etihad would be on friendly terms, and would not hurt the existing Air France-KLM and Alitalia alliance, the FT relates. About Alitalia Alitalia-Compagnia Aerea Italiana has navigated its way through a successful restructuring. After filing for bankruptcy protection in 2008, Alitalia found additional investors, acquired rival airline Air One, and re-emerged as Italy's leading airline in early 2009. Operating a fleet of about 150 aircraft, the airline now serves more than 75 national and international destinations from hubs in Fiumicino (Rome), Milan, Turin, Venice, Naples, and Catania. Alitalia extends its network as a member of the SkyTeam code-sharing and marketing alliance, which also includes Air France, Delta Air Lines, and KLM. An Italian investor group owns a majority of the company, while Air France- KLM owns 25%. =========== L A T V I A =========== LIEPAJAS METALURGS: Administrator Plans to Sell Assets ------------------------------------------------------ The Baltic Times, citing Nozare.lv, reports that Haralds Velmers, insolvency administrator for bankrupt metallurgical company Liepajas metalurgs, is planning to sell the company's casting and forging facilities, technical equipment, real estate and movable property necessary for the company's operations, which will be offered to qualified buyers internationally so as to raise as much money as possible from the deal. According to the latest assessment of the company, selling the property that has not been pledged as security may raise EUR3.5 million without the need to organize an auction, plus EUR1 million that will be raised by selling assets at auction, The Baltic Times says. In selling the other assets, which the company has set up as security for various loans, it is hoped to raise EUR112.3 million, Mr. Velmers, as cited by The Baltic Times, adding that these projections may be revised during the sales process and based on offers received from prospective buyers. On Jan. 20, Mr. Velmers presented Liepajas metalurgs shareholders with the company sales plan, The Baltic Times relates. Mr. Velmers will be able to begin selling the company assets only if the creditors approve the plan, with a decision expected this month, The Baltic Times discloses. If the plan is not accepted by the creditors, Mr. Velmers will have to alter it, The Baltic Times says. According to The Baltic Times, Mr. Velmers notes that his proposal will make it possible to better assess prospective buyers, which is not always possible if an auction is organized. Liepajas Metalurgs is a Latvian metallurgical company. Liepaja Court commenced Liepajas metalurgs' insolvency process on Nov. 12 last year. Haralds Velmers was appointed insolvency administrator. Over 1,500 Liepajas metalurgs workers have been laid off so far. Liepajas metalurgs halted production last spring. ===================== N E T H E R L A N D S ===================== HOLLAND HOMES: Fitch Affirms 'BBsf' Ratings on Two Note Classes --------------------------------------------------------------- Fitch Ratings has affirmed Holland Homes Oranje MBS B.V. (HoHo I) and Stichting Holland Homes Oranje II (HoHo II). Both transactions comprise 100% NHG-backed mortgage loans originated by DBV Levensverzekeringsmaatschappij N.V. (DBV Leven, not rated) and DBV Finance. In November 2009, DBV Leven merged with SRLEV N.V. (SRLEV, BBB+/Stable). Subsequently in March 2011, DBV Finance merged with SNS Bank N.V. (SNS Bank, BBB+/Stable/F2) and DBV Finance ceased to exist as a separate entity. SRLEV and SNS Bank are both 100% direct subsidiaries of the SNS Reaal Group N.V. (BBB+/Stable/F2). The issuers have appointed Stater Nederland (RPS1-) as the sub-servicer in both transactions. KEY RATING DRIVERS Stable Performance The affirmation reflects the stable performance of the underlying assets in both transactions. To date, both HoHo I and HoHo II have reported stable arrears levels, with borrowers in arrears by more than three months at only 0.16% and 0.21% of the current collateral balance, respectively. Cumulative losses remained below 3bps of the initial collateral balance in both transactions. Fitch expects performance to remain stable based on the high weighted average seasoning (88-111 months) and good debt-to-income ratio (both around 24%-25%) of the loans in the pool. Nationale Hypotheek Garantie (NHG) Loans The portfolios comprise 100% NHG loans. Fitch did not apply a reduction in base foreclosure frequency for the NHG loans, as the originator did not provide any historical data to provide evidence of the difference between the performance of NHG and non-NHG loans on DBV's loan book. Fitch also used claim data which DBV/SNS Bank submitted to Stichting Waarborgfonds Eigen Wonigen (WEW, AAA/Negative/F1+) between 2006 and 2012 to determine the compliance ratio on defaulted loans, which was in line with the market average. However, it was slightly lower than when both transactions were restructured in March 2012. In its analysis of the transactions, Fitch gave credit to the repurchase commitment from Rabobank International (Rabobank, AA-/Negative/F1+) by applying a 100% compliance ratio in the rating scenarios up to and including 'BBB+sf'. Given the current ratings of the mezzanine and junior notes, the change in compliance ratio had no impact on the notes' ratings, as the credit support available to the senior notes was deemed sufficient to withstand the revised stresses. Losses on Class B Notes' Principal Deficiency Ledger (PDL) The structure of HoHo I includes an interest rate swap which provides guaranteed excess spread of 25bp of the outstanding notes balance per annum. The swap in HoHo II provides no guaranteed margins. HoHo II's non-rated class B notes act as the first loss piece and are therefore expected to see losses allocated in instances where such losses are not fully covered by the NHG guarantee scheme and Rabobank's repurchase commitment. The January 2014 investor reports showed that losses allocated to the class B PDL are less than EUR0.4 million (around 12% of the notes' notional amount). Although realised losses to date remain low, Fitch believes that the current sluggish economic environment may lead to larger losses on properties sold, which may not be fully covered by the NHG. This is reflected in the revision of the Outlook on the class S notes to Negative from Stable. RATING SENSITIVITIES Deterioration in asset performance may result from economic factors, in particular the increasing effect of unemployment. Home price declines beyond Fitch's peak to trough expectations of 25% could have a negative effect on the junior notes' ratings as this would limit recoveries and put additional stress on portfolio cash flows. Information on the insurance providers was available on a loan- by-loan basis and DBV (i.e. SRLEV since the merger) is the policy provider for nearly 100% of the insurance mortgage loans in the mortgage portfolios. In its analysis, Fitch assumed 100% of set- off likelihood should SRLEV fail. The default assumption for SRLEV is based on SRLEV's rating and a 100% default rate has been assumed in all rating scenarios above 'BBB+sf'. Notes rated 'BBB+sf' or below are therefore linked to, or capped at SRLEV's rating. These tranches will also remain sensitive to the NHG loans' compliance ratio due to the low level of credit enhancement. The rating actions are as follows: Holland Homes Oranje MBS B.V. Class A (ISIN XS0238851827): affirmed at 'AAAsf'; Outlook Stable Class S (ISIN XS0729849439): affirmed at 'BBB+sf'; Outlook Stable Class B (ISIN XS0238855141): affirmed at 'BBsf'; Outlook Stable Stichting Holland Homes Oranje II Class A (ISIN XS0311660392): affirmed at 'AAAsf'; Outlook Stable Class S (ISIN XS0728217422): affirmed at 'BBsf'; Outlook Revised to Negative from Stable =============== P O R T U G A L =============== PORTUGAL: Christie's Pulls Auction of Joan Miro Art After Uproar ---------------------------------------------------------------- Mary M. Lane and Patricia Kowsmann, writing for The Wall Street Journal, reported that Christie's has withdrawn 85 artworks by Spanish surrealist Joan Miro from its auctions in London this week, after an uproar in Portugal over the government's move to sell the works in an attempt to cut its debt. According to the report, the decision, announced on Feb. 4 just hours before the Impressionist, Modern and Surrealist evening sale, represents a blow to Portugal's coffers -- as well as an embarrassment for one of the world's largest auction houses during the most important time of year for the London art market. While the planned auction would shave off only a tiny fraction of Portugal's more than EUR200 billion in debt, the flap surrounding it underscores the challenges Europe's most fragile economies continue to face in curing debt hangovers, the report said. Southern European countries have for the past two years slashed spending and raised taxes to lower their budget deficits and ease fears of debt defaults, the report related. Austerity drives that have cut social benefits have proven immensely unpopular, as have efforts to shed cultural assets, such as Greece's bid to sell islands, palaces and other icons. In the U.S., a similar outcry has erupted in Detroit as the bankrupt city sought a valuation on a collection at the Detroit Institute of Arts. In Portugal, many have seen the government's move as disrespectful toward its art heritage, particularly because revenue from the sale would have been insignificant, the report further related. A government official on Tuesday said that Portugal needed the money to balance its finances and would have to find it somewhere, if not from the sale. ========= S P A I N ========= * SPAIN: Corporate Bankruptcy Filings Up 10.4% in 2013 ------------------------------------------------------ Business Recorder reports that bankruptcy filings soared to a record high in Spain in 2013, official data showed Thursday, with the construction industry in particular still reeling five years after a property market crash. The number of household and business bankruptcy filings leapt by 6.5% to 9,660, the National Statistics Institute said, as the economy emerged from a long recession, Business Recorder relates. In a sign that the business sector's decline may be steadying, however, bankruptcy filings rose at a slower pace last year when compared to a 15.1% increase in 2011 and a 32.2% surge in 2012, Business Recorder relays. But the number of bankruptcy filings remains at historically high levels, Business Recorder says. In 2007, for example, there were only 1,147 bankruptcy filings overall, Business Recorder notes. According to Business Recorder, in 2013, businesses suffered more than individuals, the data showed, with bankruptcy filings by companies surging 10.4% to 8,934 while those by households dropped by 25.6% to 726. The building industry suffered most, representing 26.6% of all corporate bankruptcy filings, Business Recorder discloses. Though bankruptcy proceedings aim to enable debt-laden businesses to restructure and emerge as viable enterprises, in Spain 94 percent of filings end in liquidation, Business Recorder says, citing brokerage Axesor. The Spanish small business federation ATA estimates that nearly half a million small businesses have gone under since the start of the financial crisis, Business Recorder states. =========================== U N I T E D K I N G D O M =========================== AM PROFILES: In Liquidation, Utopia Tableware Buys Warehouse ------------------------------------------------------------ Derby Telegraph reports that Utopia Tableware, a Derby commercial property specialist, has helped to secure the sale of a warehouse in north Derbyshire after its previous owner AM Profiles went into liquidation. Utopia Tableware has taken over the 53,000 sq ft. unit at Holmewood Industrial Estate, Chesterfield, according to Derby Telegraph. The property was jointly marketed by BNP Paribas Real Estate and Derby's Salloway Property Consultants. "The sale to Utopia means the creation and retention of jobs, which is great news for the local economy," the report quoted Salloway Managing Director Steve Salloway as saying. ARQIVA BROADCAST: Fitch Assigns 'B-' Rating to 2020 Notes --------------------------------------------------------- Fitch Ratings has assigned Arqiva Financing plc's GBP164 million fixed rate Series 2014-1 notes a 'BBB' rating with Stable Outlook, in line with Arqiva Financing plc's existing notes. With the issuance proceeds, Arqiva has refinanced GBP162.5 million of Finco term loan A, leaving GBP57.5 million of the term loan outstanding. An index-linked swap (ILS) overlay has also been put over the existing (super senior) ILS to switch the six- month LIBOR payment back to a fixed rate payment, in line with the fixed rate Series 2014-1 notes. Key Rating Drivers The ratings reflect Arqiva's continued solid operating performance to date, with EBITDA over the past five years growing at a compounded annual growth rate (CAGR) of 7.7% with FY13 (financial year ending June 2013) EBITDA reaching GBP416.6 million (and growing year-on-year by 3.8%). The EBITDA margin has also continuously improved to 50.8% from 37.9% between FY08 and FY13. The ratings also reflect Arqiva's gain of new long-term secured contracts, notably with smart metering until 2028 (with potential for renewal) and two new HD TV muxes (group of broadcast channels) until at least December 2018 (bringing the current total of digital terrestrial television (DTT) muxes licensed to Arqiva to four out of eight), and lower operating costs than previously assumed in Fitch's base case with a reduced muxes licensing cost, namely administrative incentive pricing (AIP), down to minimal levels of approximately GBP400,000 per annum until 2020 and on average by 50% to around GBP20 million per annum thereafter. Arqiva recently also refinanced GBP180 million of Finco term loan A on January 17, 2014 with the issuance of a private institutional term loan (ITL), which ranks pari-passu with the secured Finco/senior borrower loans and the WBS issuer/senior borrower loans. Fitch expects the remaining Finco term loan A (GBP57.5 million) to be refinanced prior to June 2014, which corresponds to the loan's trigger date for a 50% cash sweep. In September 2013, Arqiva signed a 15-year GBP625 million contract (with a renewal option for another five years) to provide the smart metering (remote reading of meters) for the northern region (one of three designated UK regions). Arqiva will develop, manage and roll out the network to about 9 million Comms Hubs across homes and small businesses. The contract is owned by a subsidiary of Arqiva, which is ring-fenced from the securitised WBS group. However, the latter is expected to capture over 80% of the revenues with the subsidiary effectively having back-to-back servicing agreements with the WBS group and a guarantee from the Holdco (Arqiva Broadcast Holdings Ltd). The Comms Hubs are financed separately through another vehicle, which is also ring-fenced from the WBS group. Fitch's analysis included assessing how quickly the transaction's debt levels reduce to compensate mid- to long-term revenue risks. These could arise, for example, from potential funding issues (e.g. with cuts from both public and private customers of DTT or radio broadcasting networks) or/and threats from alternative technology (such as IPTV), for instance, lowering the demand for DTT viewing, with key stress points culminating at the contracts' renewals. Fitch's base case factors in these risks and assumes some stresses in satellite and radio revenues in the medium term with low single digit growth, and below inflation increases in revenues for both the digital platform and wireless towers divisions (with nominal stresses at renewal of key contracts). Based on Fitch's base case (which considers Arqiva's new business developments and no refinancing of the remaining term loans), the relatively rapid deleveraging profile continues to bring some comfort despite being slightly slower than previously. This is compensated to a large extent by the recent long-term business contracts that have been signed. The longer-dated ITL and proposed Series 2014-1 notes, with expected maturities in December 2023 and June 2030, respectively (vs. February 2016 for Finco term loan A), and full cash sweep thereafter until final maturity dates in February 2038 and December 2037, respectively, still allows senior net debt to EBITDA leverage to reduce from a maximum of 6.0x in FY14 to low levels of around 0.6x between FY27 and FY30 (vs. 0.2x previously). This deleveraging profile is largely driven by the cash sweep amortization features of both the remaining approximately GBP843.5 million Finco term loans and the GBP350 million Series 2013-1a notes, and the heavy amortization schedule of the GBP398.5 million Series 1 and 2 notes. The junior debt leverage is in line with Fitch's last review, and therefore still commensurate with a 'B-' rating, reducing under Fitch's base case (assuming a generic refinancing scenario) from 7.3x in FY14 to below 6.7x in 2020 (at maturity of the HY notes), only marginally mitigating refinancing risk. The junior debt remains therefore highly speculative as it is also deeply subordinated and exposed to dividends pay-out disruptions from the WBS group (which could trigger their default). Fitch's synthetic base case debt service coverage ratios for the senior bonds are at around 1.5x for the next 15 years and 1.7x for the next 20 years. Given the expected deleveraging and comfort from the short- to medium-term cash flow generation, these levels are deemed adequate. However, lower ratios could be viewed negatively given the higher (long-term) obsolescence risk of Arqiva's underlying technology compared with other WBS transactions with the same rating. The transaction continues to benefit from strong structural features, especially for the senior debt, including a solid security package, a full suite of performance-related cash lock- up triggers, and untypical cash sweep mechanisms (notably for the Finco term loans, the Series 2013-1a and 2014-1 notes, and the ITL, which are features not usually seen in UK WBS transactions with the exception of CPUK Finance Ltd). The transaction's structure also differs from typical WBS transactions in that the debt-issuing vehicles are not orphan SPVs. However, given structural protections in the transaction's legal documentation, the potential conflicts of interest (due to the non-orphan status of the SPVs and their directors also being directors of other group companies) are deemed remote and consistent with the notes' ratings. Rating Sensitivities An unforeseen change in regulation (by Ofcom) with regard to any changes in its pricing formulas (for DTT or radio broadcasting), licensing costs (e.g. AIP) or even spectrum allocations could hit Arqiva's future cash flow and impact the ratings. In addition, the risk of alternative and emerging technologies (such as IPTV) could threaten Arqiva's revenues either through technology obsolescence risk and/or lower ad-pool available to linear TV content providers. This risk is currently mitigated by potentially the fast deleveraging of the transaction (assuming cash sweep amortization) and the long-term contracts securing significant revenues. Summary of Credit The transactions are the refinancing of senior and junior bank debt of Arqiva Financing No.1 and No. 2 Limited through the issuances of GBP1,313 million of WBS notes, GBP180 million of institutional term loan (ITL), plus GBP843 million of Finco term loans (the underlying WBS issuer/senior borrower loans ranking pari-passu with the underlying secured Finco/senior borrower loans and the ITL), and GBP600 million of structurally subordinated HY notes. The remaining Finco term loans are expected to be refinanced under the WBS program. Arqiva's operations consist of its ownership of UK's terrestrial TV & radio broadcasting infrastructure, wireless towers and satellite transmission services. Arqiva benefits from typically secured long-term contracts with customers of mainly strong credit profile, and high barriers to entry with monopolistic positions in key communications infrastructure segments notably in UK DTT and radio broadcasting, all under the regulation of UK- based Ofcom, and a dominant position in the wireless towers sector with 25% market share. Arqiva's ratings are as follows: Arqiva Financing plc (whole business securitization (WBS) issuer): -- GBP164 million 5.340% Series 2014-1 notes (WBS) due 2037: assigned 'BBB', Stable Outlook -- GBP350 million 4.040% Series 2013-1a notes (WBS) due 2035: 'BBB'; Stable Outlook -- GBP400 million 4.882% Series 2013-1b notes (WBS) due 2032: 'BBB'; Stable Outlook Arqiva PP Financing plc (WBS issuer - US Private Placement (USPP)): -- USD358 million (GBP235.5m equivalent) Series 1 guaranteed secured senior notes (WBS) due 2025: 'BBB'; Stable Outlook -- GBP163 million Series 2 guaranteed secured senior notes (WBS) due 2025: 'BBB'; Stable Outlook Arqiva Broadcast Finance plc (High Yield (HY) issuer): GBP600 million 9.500% senior notes (HY) due 2020: 'B-'; Stable Outlook PUNCH TAVERNS: Bondholders Balk at Financial Restructuring Plan --------------------------------------------------------------- Nathalie Thomas at The Telegraph reports that hopes that Punch Taverns might finally be able to put its debt woes behind it appeared to be dashed on Wednesday as lenders to the pubs group dismissed a financial restructuring plan as "unsignable" and "flawed". Bondholders reacted angrily to a last minute plea by Stephen Billingham, the executive chairman of Punch Taverns, to back a deal to restructure the group's GBP2.3 billion debt pile, which will be put to the vote next Friday, The Telegraph relates. Punch, which is the second biggest pub landlord in the UK with some 4,000 properties, last month published a final proposal to solve the group's complex debt problems, The Telegraph recounts. However the plan, which followed 14 months of negotiations, has failed to pass muster with several groups of lenders, who have a blocking vote, The Telegraph notes. Mr. Billingham told The Telegraph on Tuesday night that there would be no more changes to the deal before next week's vote and failure to secure a deal would lead to at least five more years of "mess" and "uncertainty". However, bondholders appear to be standing firm in their refusal to back the deal, The Telegraph states. According to The Telegraph, a source close to bondholders said on Wednesday: "The deal on the table fails on three counts, the commercial terms are unacceptable to multiple groups of lenders, the structure of the new notes is flawed, and the documentation is unsignable." Several bondholders claim the deal, which would reduce net debt from GBP2.3 billion to GBP1.8 billion, has been structured to the advantage of shareholders and will still leave the company heavily in debt, The Telegraph discloses. Creditors believe some of the debt should be turned into equity but claim shareholders are thwarting the process as they are not prepared to have their holdings diluted, The Telegraph says. Hedge fund investors Angelo Gordon, Oaktree Capital Management and Warwick Capital Partners have also come out publicly against the proposals on the table, The Telegraph relays. Mr. Billingham and Punch's finance director Steve Dando are this week holding last ditch talks with bondholders in an effort to secure backing for the proposal ahead of next week's vote, The Telegraph relates. Mr. Billingham, as cited by The Telegraph, said failure to secure agreement from creditors will likely lead to an administrative receiver being appointed to one or both of the complex vehicles in which Punch's debt is contained. The Telegraph notes that although Punch would continue to operate, Mr. Billingham claims staff and tenants would potentially be stuck in limbo for years as an administrative receiver would face the same challenge of negotiating with the same bondholders who have so far failed to reach agreement. Several of the dominant shareholders also hold junior debt and have blocking votes, The Telegraph states. Punch Taverns plc is a United Kingdom-based pub company. The Company is engaged in the operation of public houses under either the leased model or as directly managed by the Company. The Company operates in two business segments: punch partnerships, a leased estate and punch pub company, a managed estate. RESIDENTIAL MORTGAGE: S&P Lifts Ratings on 2 Note Classes to BB+ ---------------------------------------------------------------- Standard & Poor's Ratings Services raised its credit ratings on Residential Mortgage Securities 21 PLC's class A3a, A3c, M1a, M1c, M2a, M2c, B1a, and B1c notes. At the same time, S&P has affirmed its rating on the class B2a notes. The rating actions follow S&P's review of the transaction's performance based on the most recent information that S&P has received from the October 2013 investor report. Delinquencies of more than 90 days have declined to 23.45% from 31.42% since S&P's previous review. Capitalized arrears have remained stable over the same period. S&P adjusted our weighted-average foreclosure frequency (WAFF) to address capitalized arrears risk, increasing the arrears amount by the capitalized arrears amount for each loan in the pool. S&P's WAFF and weighted-average loss severity (WALS) assumptions have decreased since its June 2012 review. S&P's WAFF assumptions decreased due to the delinquency decrease and the increased seasoning. S&P's WALS assumptions decreased as a result of increasing house prices, which has resulted in a decrease in S&P's weighted-average indexed current loan-to-value ratio. Rating WAFF WALS Level (%) (%) AAA 64.25 32.70 AA 59.72 27.67 A 52.05 19.00 BBB 46.79 14.25 BB 40.30 11.03 The reserve fund (which has a GBP12.15 million balance and provides 6.35% credit enhancement) and liquidity facility are at their required levels. The transaction is currently paying principal sequentially and the credit enhancement available to all classes of notes has increased since S&P's last review. In S&P's cash flow analysis it considered the scenario where the transaction continues to amortize sequentially and, subject to satisfaction of the pro rata conditions, switches to pay principal pro rata. Barclays Bank PLC is the transaction's bank account, liquidity facility, and guaranteed investment contract (GIC) provider. In February 2013, the bank agreement, cash/bond administrator agreement, liquidity facility agreement, and GIC agreement were amended to be in line with S&P's current counterparty criteria. The transaction is therefore no longer capped at S&P's long-term issuer credit rating (ICR) on Barclays Bank, but is still capped at S&P's long-term rating ICR on Swiss Re Financial Products Corp. plus one notch, acting as currency and basis swap provider. Following S&P's credit and cash flow analysis, it has raised its ratings on the class A3a, A3c, M1a, M1c, M2a, M2c, B1a, and B1c notes. S&P considers the available credit enhancement for the class B2a notes to be commensurate with our currently assigned 'B- (sf)' rating. Furthermore, S&P do not expect this class of notes to experience interest shortfalls in the next 12 to 18 months. S&P has therefore affirmed its rating on this class of notes. Residential Mortgage Securities 21 is backed by U.K. nonconforming residential mortgages originated by Kensington Mortgage Co. Ltd. RATINGS LIST Class Rating To From Residential Mortgage Securities 21 PLC EUR618.5 Million, GBP309.9 Million, $300 Million Mortgage-Backed Floating-Rate Notes Ratings Raised A3a AA (sf) A+ (sf) A3c AA (sf) A+ (sf) M1a AA (sf) A+ (sf) M1c AA (sf) A+ (sf) M2a A+ (sf) A (sf) M2c A+ (sf) A (sf) B1a BB+ (sf) BB (sf) B1c BB+ (sf) BB (sf) Rating Affirmed B2a B- (sf) =============== X X X X X X X X =============== * EUROPE: Fitch Says Credit Investors' EM Risk Fears Grow --------------------------------------------------------- Emerging markets have overtaken eurozone sovereign debt problems and central bank stimulus withdrawal as the biggest threat to European credit markets, according to European credit investors in Fitch Ratings' latest quarterly survey. Sixty-eight percent of respondents to our 1Q14 survey thought adverse developments in one or more emerging markets would pose a high risk to European credit markets over the next 12 months. That is a notable increase on the 51% who identified EMs as a high risk in the previous two surveys. Forty percent of investors think EM corporates will face the greatest refinancing challenge over the next 12 months, up from 26% in 3Q13. Just 39% of respondents thought eurozone sovereign debt problems were a high risk to European credit markets, down from 57% in our October survey. Half considered central bank tightening a high risk, down from 56% previously. EM concerns drove further market volatility during our January survey period, as country-specific factors such as political risk, weaker economic data and concerns about the robustness of policy frameworks continued to overlap with broader worries about capital flows out of emerging markets due to Fed tapering. Several EM currencies including the Turkish lira, South African rand, Russian rouble and Hungarian forint fell by more than 5% against the dollar. The Argentinean peso fell by nearly 19% as the authorities stopped using FX reserves to support the currency. A precise relationship between Fed tapering and international capital flows is hard to quantify, but as long as financial market participants believe tapering can cause EM outflows, adjustments in currency, equity, and bond markets are likely. The Fed cut its monthly bond purchases by another USD10 billion, in line with the rate of tapering it announced last year. "In our view, the winding down of quantitative easing confirms that monetary policy is normalizing. EMs will therefore face changes in the quantity and (equally importantly) the price of capital available," Fitch said. "We think EM sovereign credit fundamentals are generally stronger than in previous crises, and credible, coherent economic policy management can support sovereign credit profiles in the face of further market adjustments. Recent exchange rate pressure has centered on countries with large current account deficits, but this may be too narrow a focus. Adding external amortization and short-term debt gives a full picture of external funding needs and therefore vulnerability to investor sentiment. For example, India has a larger current account deficit than Turkey, but Turkey has more external amortization and short-term debt coming due in 2014. Its gross external financing requirement is therefore higher," Fitch said. Fitch's 1Q14 survey closed on January 31. It represents the views of managers of an estimated EUR5.9 trillion of fixed-income assets. * BOOK REVIEW: Jacob Fugger the Rich ------------------------------------ Author: Jacob Streider Publisher: Beard Books Hardcover: 227 pages List Price: $34.95 Review by Gail Owens Hoelscher Buy a copy for yourself and one for a colleague on-line at http://is.gd/UAP0Zb Quick, can you work out how much $75 million in sixteenth century dollars would be worth today? Well, move over Croesus, Gates, Rockefeller, and Getty, because that's what Jacob Fugger was worth. Jacob Fugger was the chief embodiment of early German capitalistic enterprise and rose to a great position of power in European economic life. Jacob Fugger the Rich is more than just a fascinating biography of a powerful and successful businessman, however. It is an economic history of a golden age in German commercial history that began in the fifteenth century. When the book was first published, in 1931, The Boston Transcript said that the author "has not tried to make an exhaustive biography of his subject but rather has aimed to let the story of Jacob Fugger the Rich illustrate the early sixteenth century development of economic history in which he was a leader." Jacob Fugger's family was one of the foremost family in Augsburg when he was born in 1459. They got their start by importing raw cotton, by mule, from Mediterranean ports. They later moved into silk and herbs and, for a long while, controlled much of Europe's pepper market. Jacob Fugger diversified into copper mining in Hungary and transported the product to English Channel and North Sea ports in his own ships. A stroke of luck led to increased mining opportunities. Fugger lent money to the Holy Roman Emperor Maximilian I to help fund a war with France and Italy. Mining concessions were put up as collateral. The war dragged on, the Emperor defaulted, and Fugger found himself with a European monopoly on copper. Fugger used his extensive business network in service of the Pope. His branches all over Europe collected payments due the Vatican and issued letters of credit that were taken to Rome by papal agents. Fugger is credited with creating the first business newsletter. He collected news of evolving business climate as well as current events from his agents all across Europe and distributed them to all his branches. Fugger's endeavors wee not universally applauded. The sin of usury was still hotly debated, and Fugger committed it wholesale. He was sued over his monopoly on copper. He was involved in some messy bribes in bringing Charles V to the throne. And, his lucrative role as banker in the sale of indulgences, those chits that absolve the buyer of sin, raised the ire of Martin Luther himself. Luther referred to Fugger specifically in his Open Letter to the Christian Nobility of the German nation Concerning the Reform of the Christian Estate just before being excommunicated in 1521. Fugger went on, however, to fund Charles V's war on Protestanism and became even richer. Fugger built many churches and buildings in Augsburg. He was generous to the poor and designed the world's first housing project. These buildings and lovely gardens, called the Fuggerei, are still in use today. A New York Times reviewer said that Jacob Fugger the Rich, a book "concerned with the most famous, most capable, and most interesting of all [the members of the Fugger family] will be as interesting for the general reader as for the special student of business history." This observation is just as true today as in 1931, when first made. Jacob Streider was a professor of economic history at the University of Munich. ********* 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. 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, and Peter A. Chapman, Editors. Copyright 2014. All rights reserved. ISSN 1529-2754. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR Europe subscription rate is US$775 per half-year, delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Peter Chapman at 215-945-7000 or Nina Novak at 202-241-8200. * * * End of Transmission * * *