/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/140313.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 13, 2014, Vol. 15, No. 51 Headlines C Y P R U S CYPRUS: Central Bank Head Steps Down G E R M A N Y NUERBURGRING GMBH: Capricorn Group Buys Race Track SILENUS LTD: S&P Lowers Rating on Class E Notes to 'CCC' SOLARSTROM AG: Concludes Sale of Four Solar Parks * GERMANY: Business Failures Down 8.1% in 2013 I R E L A N D REALM COMMUNICATIONS: Unforeseen Losses Prompt Liquidation I T A L Y BANCA MONTE: Posts Seventh Straight Loss N E T H E R L A N D S FORNAX BV: S&P Raises Rating on Class E Notes to 'BB-' ING CAPITAL: Moody's Hikes Rating to 'Ba2(hyb)'; Outlook Negative S L O V E N I A CIMOS: Auto Group Insolvent, KMPG Report Reveals S P A I N GRUPO ANTOLIN: Moody's Assigns 'Ba3' CFR; Outlook Stable GRUPO ANTOLIN: S&P Assigns Preliminary 'BB-' CCR; Outlook Stable PESCANOVA SA: Creditors Accept Up to 90% Losses as Part of Plan U K R A I N E CREATIV GROUP: S&P Lowers Corporate Credit Rating to 'CCC' MRIYA AGRO: S&P Lowers Corporate Credit Rating to 'CCC' U N I T E D K I N G D O M NORD ANGLIA: S&P Puts 'B' CCR on CreditWatch Positive ********* =========== C Y P R U S =========== CYPRUS: Central Bank Head Steps Down ------------------------------------ BBC News reports that the head of the Cypriot central bank, Panicos Demetriades, has resigned. He reportedly experienced difficulties with Cyprus' government and had been criticized for his handling of the country's EUR10 billion (GBP8.3 billion) bailout, BBC relates. There was no official statement on Monday about why he had stepped down, BBC notes. Mr. Demetriades' departure comes after Cyprus' bailout was thrown into doubt when its parliament rejected a key part of the plan, and then passed it a day before the deadline was due to expire, BBC relays. Cyprus was nearly bankrupted after Greece's financial crisis in 2010, BBC recounts. The country's banks were hit heavily but its government did not have the funds to issue a bailout, BBC discloses. Slow economic growth and the stance of international lenders, who stopped offering loans, added to the pressure on the country's finances, BBC states. Last year, the country's banking system was rescued from collapse by a EUR10 billion bailout from the EU and International Monetary Fund, BBC relates. Last month, Cyprus' lawmakers threw the bailout program, and the country's next tranche of cash, into doubt over a bill allowing state firms to be privatized, BBC discloses. ============= G E R M A N Y ============= NUERBURGRING GMBH: Capricorn Group Buys Race Track -------------------------------------------------- Dalia Fahmy at Bloomberg News reports that The Nuerburgring, the German race track known as Green Hell for its challenging Formula One course, was bought by an auto-parts maker two years after Nuerburgring GmbH, the former owner and operator filed for insolvency protection. According to Bloomberg, lawyers managing the insolvency of Nuerburgring GmbH said on Tuesday in a statement that the acquisition by Dusseldorf-based Capricorn Group values the 379-hectare (937-acre) property at more than EUR100 million (US$139 million). That includes EUR25 million that the buyer will spend to further develop the site, Bloomberg notes. The Nuerburgring was offered for sale last year after its owners failed to pay loans taken out to build hotels and a roller coaster, Bloomberg recounts. "The creditor committee had two very good offers and in the end decided on the offer with the highest price and good German Formula 1 Nuerburgring Race Track Sold to Capricorn Group operator filed for insolvency protection in 2012," Bloomberg quotes the lawyers as saying. SILENUS LTD: S&P Lowers Rating on Class E Notes to 'CCC' -------------------------------------------------------- Standard & Poor's Ratings Services took various credit rating actions in Silenus (European Loan Conduit No. 25) Ltd. Specifically, S&P has: -- affirmed its ratings on the class A, F, and G notes; -- raised its rating on the class B notes; and -- lowered its ratings on the class C, D, and E notes. S&P has reviewed the transaction's six remaining loans. S&P's review follows the full repayment of the Tishman Munich and Antony Parc loans on the February 2014 interest payment date (IPD). These loans together represented 30% of the pool balance. THE EUROCASTLE RETAIL D PORTFOLIO LOAN (39.5% OF THE POOL) The loan is secured against 63 non-high-street retail properties located throughout Germany. The current outstanding securitized balance is EUR147,556,090 with a maturity date in May 2016. The securitized loan-to-value (LTV) ratio is 76.6% based on a September 2006 valuation. The underlying properties have not been revalued since loan origination. S&P has assumed losses on the loan in its base-case scenario. ORAZIO LOAN (36.4% OF THE POOL) The loan is secured against a portfolio of three office properties in Naples, Rome, and Milan, as well as 41 retail assets in secondary, northern Italian locations. The current outstanding securitized balance is EUR135,673,545. The loan entered special servicing on May 6, 2011 due to a breach of the LTV ratio covenant. The special servicer granted the borrower a standstill until May 7, 2014, to facilitate ongoing marketing and lease discussions. As of the February 2014 IPD, the loan's securitized LTV ratio was 75.8%, based on a June 2011 valuation. S&P has assumed losses on the loan in its base-case scenario. METROPOLIS SHOPPING CENTRE (10.6% OF THE POOL) The loan is secured by a shopping center built in 1997, in the town center of Rende, Calabria, Italy. The current outstanding securitized balance is EUR39,384,692. The borrower failed to fully repay the loan on the maturity date in February 2013. The loan is in special servicing and is currently in standstill. The shopping center is undergoing some refurbishment as a condition of the standstill. As of the February 2014 IPD, the loan's securitized LTV ratio was 47.6%, based on a April 2006 valuation. The shopping center has not been revalued since loan origination. S&P has assumed no losses on the loan in its base-case scenario. NEXTRA PORTFOLIO (10.3% OF THE POOL) The loan is secured by five properties. Three of these properties are office properties in the Milan area. One property is a supermarket in Verona, and one is a hotel resort in southern Sardinia, which is currently vacant. The current outstanding securitized balance is EUR38,492,551. The loan had an original maturity date in April 2013, but the borrower exercised its extension option and the loan now matures in May 2016. As of the February 2014 IPD, the loan's securitized LTV ratio was 41.7%, based on a June 2013 valuation. S&P has assumed no losses on the loan in its base-case scenario. REMAINING LOANS (3.2% OF THE POOL) The two remaining loans (Aprirose Bonndorf and Aprirose Munich- Thun), with a total current outstanding securitized balance of EUR12,068,165, are in special servicing. S&P has assumed principal losses in its base case scenario for each of these loans. RATING ACTIONS S&P's ratings in Silenus (European Loan Conduit No. 25) address the timely payment of interest, payable quarterly in arrears, and the payment of principal no later than the legal final maturity date in May 2019. Following the prepayment of the Tishman Munich and Antony Parc loans, which the cash manager used to partially repay the class A notes, S&P considers the available credit enhancement for the class A and B notes to have increased. However, S&P's rating on the class A notes is constrained at 'A (sf)' for counterparty reasons, the transaction's liquidity facility provider, as the replacement framework in the liquidity facility agreement does not comply with our current counterparty criteria. S&P has therefore affirmed its 'A (sf)' rating on the class A notes. S&P considers the class B notes' available credit enhancement to be sufficient to mitigate the risk of losses from the underlying loans in an 'A' rating stress scenario. S&P has therefore raised to 'A (sf)' from 'BBB+ (sf)' its rating on the class B notes. "Our analysis indicates that the amount of available credit enhancement for the junior notes is no longer sufficient to address our principal loss expectations under their respective rating stress scenarios. Therefore, we have lowered our ratings on the class C, D, and E notes. At the same time, we have affirmed our 'CCC- (sf)' and 'D (sf)' rating on the class F and G notes, respectively. This is because our ratings on these notes already reflect our principal loss expectations and have had interest shortfalls in the past," S&P noted. RATINGS LIST Silenus (European Loan Conduit No. 25) Ltd. EUR1.246 Billion Commercial Mortgage-Backed Variable- and Floating-Rate Notes Class Rating Rating To From Ratings Affirmed A A (sf) F CCC- (sf) G D (sf) Rating Raised B A (sf) BBB+ (sf) Ratings Lowered C B+ (sf) BB+ (sf) D B- (sf) BB- (sf) E CCC (sf) B (sf) SOLARSTROM AG: Concludes Sale of Four Solar Parks ------------------------------------------------- Bernd Radowitz at rechargenews.com reports that insolvent German PV developer SAG Solarstrom has concluded the sale of the 10.1MW Juterbog project and three other solar parks to an institutional investor for a low double-digit million euros figure, which will be used to repay a project-related bridging loan from Deutsche Bank. rechargenews.com relates that the sale had been delayed due to the insolvency of a component supplier and several service providers. SAG Solarstrom thus didn't receive an amount in the high single-digit million range from the closing of the German projects in November and December 2013 as expected, the report says. The company in December had declared insolvency, at first under self-administration, and on March 1, 2014, as general insolvency, after refinancing talks failed, rechargenews.com notes. About S.A.G. Solarstrom AG Headquartered in Freiburg i.Br., Germany S.A.G. Solarstrom AG (German security identification number: 702 100, ISIN: DE0007021008) -- http://www.solarstromag.com-- is a manufacturer-independent provider of photovoltaic plants configured to customers' individual needs. The Group constructs plants of all sizes both in Germany and abroad. S.A.G. Solarstrom AG also produces solar energy at its own plants. S.A.G. Solarstrom AG's service portfolio covers the entire life cycle of photovoltaic plants, including forecast and energy services, yield reports, and remote service and maintenance, as well as insurance and financing. The Group thus offers a comprehensive value chain in photovoltaics, from yield reports, planning, construction, operations, and monitoring to optimization, repowering, and deconstruction. S.A.G. Solarstrom AG was founded in 1998. Around 190 specialists work at the four locations in Germany and the foreign subsidiaries. S.A.G. Solarstrom AG is listed in the Prime Standard of the Frankfurt Stock Exchange as well as according to the rules and standards M:access of the Munich Stock Exchange. * GERMANY: Business Failures Down 8.1% in 2013 ---------------------------------------------- Reuters reports that in 2013, German courts had reported a total of 141,332 bankruptcy cases, down by 6% compared with 2012, and the lowest annual figure since 1996. According to Reuters, Destatis said the insolvencies incurred combined losses to the tune of EUR37.8 billion (US$52.3 billion) which was EUR13.9 billion less than in the previous year. In broken down figures, Destatis put the figure for corporate and business failures to 25,995 cases, down by 2,302 or 8.1%, Reuters discloses. Reuters notes that the data showed court-ordered insolvencies of private people amounted to 91,200 cases, which was 6.6% fewer than in 2012. While business failures had slumped for the fourth consecutive year, private insolvencies went down for the third year in a row, Reuters states. ============= I R E L A N D ============= REALM COMMUNICATIONS: Unforeseen Losses Prompt Liquidation ---------------------------------------------------------- Gordon Deegan at The Irish Times reports that a document lodged with the Companies Office confirms that Eamon Leahy of Leahy & Company, Fairview, Dublin has been appointed as liquidator arising from a resolution of the members of Realm Communications Limited. The liquidation of the firm follows eight months after the company, which was behind what was Ireland's most high profile and controversial premium phone line service, ceased trading, The Irish Times relates. The appointment of Mr. Leahy also follows a Revenue Commissioner's notice in January confirming it had petitioned the High Court to wind up Realm Communications, The Irish Times notes. Mr. Higgins sold Realm Communications to Gavin Hickey and Maxine Payne in 2009 and the most recent figures show that after his departure as director, the firm quickly became loss-making, recording a pre-tax loss of EUR315,225 in 2010 after recording a post-tax profit of EUR1.1 million in 2009, The Irish Times recounts. The figures show that at the end of the period, EUR805,714 was owed to Revenue through EUR479,332 in corporation tax, EUR191,407 in VAT and EUR134,975 in PAYE/PRSI, The Irish Times discloses. The firm had net liabilities totaling EUR809,956, The Irish Times says. According to The Irish Times, a note attached to the accounts states that "the net assets of the company are negative and the company has reported a loss in the year compared to profits in previous years back to 2003". The note adds: "In the subsequent period, the management accounts indicate a return to profitability, although the turnover has reduced substantially and the balance sheet remains insolvent. It is expected that the company will continue to be profitable and return to solvency in the 2011-2012 year." Realm Communications Limited is the firm behind Irish Psychics Live, which was founded by former journalist Tom Higgins. ========= I T A L Y ========= BANCA MONTE: Posts Seventh Straight Loss ---------------------------------------- Sonia Sirletti and Francesca Cinelli at Bloomberg News report that Banca Monte dei Paschi di Siena SpA posted a seventh straight loss on bad-loan provisions and reorganization costs, as the bailed-out lender moved to clean up its balance sheet before European Central Bank stress tests. According to Bloomberg, Monte Paschi said on Wednesday the bank had a fourth-quarter net loss of EUR920.7 million (US$1.3 billion), down from a EUR1.6 billion loss a year earlier. Chief Executive Officer Fabrizio Viola is preparing a share sale for as soon as May to help repay a EUR4.1 billion state rescue, Bloomberg discloses. He also plans to cut jobs and sell assets to return to profit by 2015, Bloomberg says. Banca Monte dei Paschi di Siena SpA -- http://www.mps.it/-- is an Italy-based company engaged in the banking sector. It provides traditional banking services, asset management and private banking, including life insurance, pension funds and investment trusts. In addition, it offers investment banking, including project finance, merchant banking and financial advisory services. The Company comprises more than 3,000 branches, and a structure of channels of distribution. Banca Monte dei Paschi di Siena Group has subsidiaries located throughout Italy, Europe, America, Asia and North Africa. It has numerous subsidiaries, including Mps Sim SpA, MPS Capital Services Banca per le Imprese SpA, MPS Banca Personale SpA, Banca Toscana SpA, Monte Paschi Ireland Ltd. and Banca MP Belgio SpA. * * * As reported by the Troubled Company Reporter-Europe on Sept. 18, 2013, Fitch downgraded MPS's Viability Rating (VR) to 'ccc' from 'b' and removed it from Rating Watch Negative (RWN). TCR-Europe also reported on June 19, 2013, that Standard & Poor's Ratings Services lowered its long-term counterparty credit rating on Italy-based Banca Monte dei Paschi di Siena SpA (MPS) to 'B' from 'BB', and affirmed the 'B' short-term rating. S&P also lowered its rating on MPS' Lower Tier 2 subordinated notes to 'CCC-' from 'CCC+'. S&P affirmed the ratings on MPS' junior subordinated debt at 'CCC-' and on its preferred stock at 'C'. At the same time, S&P removed the ratings from CreditWatch, where it placed them with negative implications on Dec. 5, 2012. ===================== N E T H E R L A N D S ===================== FORNAX BV: S&P Raises Rating on Class E Notes to 'BB-' ------------------------------------------------------ Standard & Poor's Ratings Services raised its credit ratings on FORNAX (ECLIPSE 2006-2) B.V.'s class C, X, D, and E notes. At the same time, S&P has affirmed its ratings on the class B, F, and G notes. The rating actions follow S&P's review of the Century Center loan's partial repayment, the restructuring of the ATU Germany loan, the underlying loans' credit quality, and our cash flow analysis. CENTURY CENTER LOAN (3% OF THE LOAN POOL) The Century Center loan was the loan pool's largest remaining loan until the borrower sold the retail element and two office properties in June 2013. The loan is now the smallest in the loan pool. The issuer used the loan's repayment funds to amortize the class B notes on the August 2013 interest payment date (IPD). The loan is now secured on two office properties located in Antwerp, Belgium. It is in special servicing due to a payment default at maturity. S&P do not expect principal losses on this loan under its base- case scenario. CASSINA PLAZA LOAN (33% OF THE LOAN POOL) The EUR39.9 million loan is now the largest loan in the loan pool, as a result of the Century Center loan's partial prepayment. The loan is secured on an office property located about 10 kilometers northeast of Milan. After failing to repay at maturity in November 2013, the loan entered special servicing. There is currently a standstill agreement in place, while the special servicer discusses exit strategies with the borrower. S&P expects principal losses on the securitized loan under its base-case scenario. BIELEFELD/BERLIN PORTFOLIO (TANNEN) LOAN (20% OF THE LOAN POOL) This is an amortizing EUR24.3 million loan, secured on a mixed retail and office property in Berlin and residential properties in Bielfeld. The loan is due to mature in January 2016. The loan previously breached the transaction's debt-service coverage ratio (DSCR) covenant and was on the servicer's watchlist. The DSCR covenant breach has been cured, however, the cash trap threshold of 103% was triggered in August 2013. All cash is currently being trapped, and therefore excess cash is not being released to the borrower. The loan is not in special servicing. S&P expects principal losses on the securitized loan under its base-case scenario. ATU AUSTRIA LOAN (10% OF THE LOAN POOL) The EUR11.7 million loan is secured on eight Austrian assets. The loan failed to repay at loan maturity in January 2013 and is in special servicing. A standstill agreement is in place to enable a consensual sale of the assets. The tenant's lease was renegotiated with the borrower in November 2013. As part of the lease restructuring, the leases have been extended from June 2020 to December 2030. Cash is currently being trapped as part of the lease restructuring. The issuer is using the trapped cash to amortize the loan on each IPD. S&P expects principal losses on the securitized loan under its base-case scenario. ATU GERMANY LOAN (9% OF THE LOAN POOL) The amortizing EUR10.9 million loan is secured on 14 German assets, as five have been sold since closing. The servicer has extended the loan to July 2014 from January 2013. As part of the loan extension agreement, the servicer imposed certain conditions on the loan. The borrower partially prepaid the loan and made an equity injection, while the servicer set specific amortization targets. The borrower and servicer also agreed to a full cash sweep of all excess rental income for each IPD. The loan is not in special servicing. S&P do not expect principal losses on the securitized loan under its base-case scenario. NETTO PORTFOLIO LOAN AND KINGBU PORTFOLIO LOAN (TOGETHER, 25% OF THE LOAN POOL) The Netto Portfolio loan and Kingbu Portfolio loan together account for 25% of the loan pool. The loans are secured on 30 mixed-use German properties, including supermarkets and fast-food retail properties. They are in special servicing as they both failed to repay at maturity. S&P assumed principal losses on the Netto Portfolio loan under its base-case scenario. RATING ACTIONS S&P's ratings in FORNAX (ECLIPSE 2006-2) address the timely payment of interest and the repayment of principal no later than legal final maturity in February 2019. Following S&P's review, it believes the available credit enhancement for the class B notes is sufficient to mitigate the risk of principal losses from the underlying loans and can achieve a rating of 'AA+'. The transaction does not have a five- year tail period and therefore, under S&P's criteria for European commercial mortgage-backed securities, the highest achievable rating on this class of notes is 'AA+ (sf)'. S&P has therefore affirmed its 'AA+ (sf)' rating on the class B notes. Due to the partial repayment of the Century Center loan and amounts paid following the ATU Germany loan's restructuring, S&P believes that the available credit enhancement for the class C, D, and E notes is sufficient to mitigate the risk of principal losses from the underlying loans at higher rating categories than currently assigned. S&P has therefore raised its ratings on these classes of notes. The class X notes are interest-only notes and rank between the class C and D notes. S&P has therefore upgraded the class X notes to 'AA (sf)' in light of their ranking in the priority of payments. S&P has affirmed its ratings on the class F notes as its ratings reflect its expectations of principal losses on these classes of notes. S&P has also affirmed its rating on the class G notes; these notes defaulted previously as a result of interest shortfalls. FORNAX (ECLIPSE 2006-2) is a true sale 2006-vintage CMBS transaction backed by seven senior loans secured on 78 European commercial properties. RATINGS LIST Class Rating To From FORNAX (ECLIPSE 2006-2) B.V. EUR545.134 Million Commercial Mortgage-Backed Variable- And Floating-Rate Notes Ratings Raised C AA (sf) BBB+ (sf) X AA (sf) BBB+ (sf) D A+ (sf) BB- (sf) E BB- (sf) B (sf) Ratings Affirmed B AA+ (sf) F CCC- (sf) G D (sf) ING CAPITAL: Moody's Hikes Rating to 'Ba2(hyb)'; Outlook Negative ----------------------------------------------------------------- Moody's Investors Service upgraded the rating of the subordinated debt with optional deferral coupon mechanism issued by ING Verzekeringen N.V. to Baa3(hyb) from Ba1(hyb). Following a corporate restructuring, this debt is now assumed by ING Insurance TopHolding N.V., a holding company which absorbed ING Verzekeringen N.V. under a statutory merger on the 1st of March 2014 and was subsequently renamed NN Group N.V. ("NN Group"). Moody's also upgraded the rating of the non-cumulative trust preferred securities issued by ING Capital Funding Trust III and guaranteed by ING Groep N.V. to Ba2(hyb) from B1(hyb). The outlook on these ratings is negative. Ratings Rationale The upgrade of both securities' ratings reflects the recent progress made by ING Groep N.V. towards the sale of its insurance operations and more generally towards the completion of the restructuring plan agreed with the European Commission (EC), which according to Moody's, significantly reduces the risk that the EC could impose a coupon skip on ING's hybrid debts. Historically, Moody's rated these securities wider than its normal notching practice, to reflect the risk of the EC requiring a coupon skip in the event of the Group not completing its restructuring plan. In November 2013, ING reached an agreement with the European Commission on a revised timeline for the divestment process of its insurance operations. In particular, ING has to divest more than 50% of its European and Japanese insurance units before year-end 2015, and 100% before year-end 2016. ING indicated that these operations would be sold through an Initial Public Offering (IPO) of NN Group. Moody's mentions that since November 2013, NN Group has sold its Asian insurance operations (apart from the Japanese operations) and has transferred its stake in ING US Inc. (Baa3, stable) to ING Groep N.V. (A3, negative) in order to prepare for the IPO. Furthermore, Moody's says that NN Group has made considerable progress in becoming operationally disentangled from ING Groep N.V.. Most recently on 28 February 2014, ING announced that it had finalised an agreement to make ING's pension plans in the Netherlands financially independent. This agreement notably includes a termination of the cross guarantees between ING Bank N.V. (A2 negative) and NN Group to jointly and severally fund the obligations of the ING pension plan. Moody's considers this termination as a major step towards the financial disentanglement of NN Group from the rest of the ING group. Moody's mentions that some financial linkages will subsist between NN Group and ING Groep N.V., notably as the insurance holding has issued EUR2.4 billion of subordinated debt to ING Groep N.V. Nonetheless, Moody's considers that ING has now lifted the main hurdles which could prevent an external and an autonomous financing by NN Group going forward. Therefore, Moody's believes that the likelihood that ING will not be able to comply with the restructuring plan agreed with the EC is very low. As a consequence, Moody's considers that the risk that the EC would impose a coupon skip on ING's hybrid debts is also very low. As a result, the rating agency upgraded the ratings of ING's subordinated debts including such mechanisms and reverted to Moody's standard notching for these kinds of instrument. The Baa3(hyb) rating for ING Verzekeringen N.V.'s subordinated debt (now assumed by NN Group) is one notch below ING Verzekeringen N.V.'s (P)Baa2 senior debt rating, reflecting the subordination of the notes and the cumulative nature of the optional coupon deferral mechanism. The Ba2(hyb) rating of ING Capital Funding Trust III's trust preferred securities is four notches below the BCA of ING Bank (baa1), reflecting the structural subordination of ING Groep N.V., the guarantor of the debt, to ING Bank, and standard notching for this kind of instrument. The negative outlook on ING Verzekeringen N.V.'s Baa3(hyb) subordinated debt rating reflects the negative outlook of ING Verzekeringen N.V. (now merged with NN Group), while the negative outlook on ING Capital Funding Trust III's Ba2(hyb) guaranteed trust preferred securities rating reflects the negative outlook of ING Groep N.V., the guarantor of the debt. What Could Change The Rating Up/Down Moody's says that given the standard notching applied for these securities, any change in the credit quality and rating of the issuer or of the guarantor (respectively ING Verzekeringen N.V., now merged with NN Group, and ING Groep N.V.) would lead to a similar change in the rating of the securities. Rating List The following ratings have been upgraded and assigned a negative outlook: ING Verzekeringen N.V. -- subordinated debt rating to Baa3(hyb) from Ba1(hyb) (now assumed by NN Group N.V.); ING Capital Funding Trust III -- backed preferred stock rating to Ba2(hyb) from B1(hyb). Principal Methodologies The principal methodology used in rating ING Verzekeringen N.V. was Global Life Insurers published in December 2013. The principal methodology used in rating ING Capital Funding Trust III was Global Banks published in May 2013. =============== S L O V E N I A =============== CIMOS: Auto Group Insolvent, KMPG Report Reveals ------------------------------------------------ sta.si reports that an audit of automotive group Cimos by KPMG has revealed the company is insolvent. The company said a shareholders' meeting will be called by May 5, 2014, at the latest and a debt-to-equity conversion will be proposed, sta.si relates. ========= S P A I N ========= GRUPO ANTOLIN: Moody's Assigns 'Ba3' CFR; Outlook Stable -------------------------------------------------------- Moody's Investors Service assigned a Ba3 Corporate Family Rating and a Ba3-PD Probability of Default Rating to Grupo Antolin- Irausa, S.A. (Grupo Antolin). Concurrently, Moody's assigned a provisional (P)Ba3 Rating (LGD4, 50%) to the planned EUR400 million senior secured notes to be issued by Grupo Antolin Dutch B.V. The outlook on the ratings is stable. This is the first time that Moody's has rated Grupo Antolin. Moody's issues provisional ratings in advance of the final sale of securities and these reflect the rating agency's credit opinion regarding the transaction only. Upon a conclusive review of the final documentation, Moody's will endeavor to assign definitive ratings to the instruments mentioned above. A definitive rating may differ from a provisional rating. Ratings Rationale The Ratings are supported by (1) the company's solid business profile with a strong market position in interior products in core markets and a good level of geographic diversification, (2) a good track-record of profitable growth under an experienced management team with a clear strategy, (3) cash flow cover ratios, as reflected by an estimated RCF/net debt ratio of 18% pro-forma for the announced transaction and based on expectations for 2014, that are solid for a Ba3 rated company, and (4) the company's proven resilience against raw material price volatility. At the same time, the ratings are constrained by (1) Grupo Antolin's exposure to the cyclical automotive industry without the mitigating effect from aftermarket activities, (2) the relatively small size of the franchise, and (3) a leverage ratio of 3.8x Debt / EBITDA proforma for the transaction, that might reflect the peak level in a cyclical industry. Moody's assesses Grupo Antolin's business profile to be solid. This view is supported by the group's worldwide leading market position in headliners and the leading position in Europe with regard to its interior lighting activities. The market positions are protected by established customer relationships and long-term contracts. In addition, Grupo Antolin benefits from a good level of regional diversification. During the financial crisis 2008/09 Grupo Antolin showed a reasonable performance. Revenues fell from peak (2007) to trough (2009) by 26%. Since then the company achieved a CAGR of 14%, pre-crisis level in terms of sales was reached again early 2011. Reported EBITDA Margin, which proved to be quite resilient with 8.2% seen in 2008 marking the low point, has stabilized at a level of around 11% since 2010. A strong FFO generation supported RCF / Net debt metrics in the low twenties, a level which is at the upper end of our expectation for a Ba-rated auto supplier. This enabled the group, despite ongoing high capital expenditure which has been materially above depreciation, to generate positive free cash flow in the majority of previous years. Free cash flow turned negative in 2013 (EUR -98 million as adjusted by Moody's), however driven by extraordinary dividend payments, which Moody's do not expect to be repeated in future years. Adjusted for this effect free cash flow would have increased to around EUR20 million, which compares to EUR 16 million seen in 2012. Grupo Antolin benefits from good protection measures against raw material price volatility: Over 40% of supplies are prescribed by end customers and another 10% are covered by price transfer agreements so that half of the supplies are isolated from price volatility. For this 10% Grupo Antolin has agreed index-linked clauses with its customers which allow to pass on price increases exceeding a certain threshold and with some delay. While this provides no full protection against input price volatility it limits at least the risk to a level which might have some impact on margins but should not become an economic threat. The remaining 50% of the value of the materials sourced from suppliers are open for price renegotiation every 3-6 months. MOody's caution that Grupo Antolin is a pure automotive component supplier without any notable diversification into non-automotive activities. The company also lacks a material aftermarket business that could help reduce the cyclicality that the company is exposed to. The rating also reflects the general risks to which virtually all automotive suppliers are exposed. In particular, Moody's views the high level of competition in the automotive supply sector and the strong bargaining power of OEM customers as a permanent challenge to profit margins. In addition, the automotive industry is a cyclical business and therefore significantly exposed to the overall economic environment. With annual revenues of c. EUR2.1 billion the company is materially smaller than most of its competitors, which may lead to less pricing power compared to a bigger player, who can take advantage from scale effects. In addition, should a larger player decide to pursue a more aggressive pricing policy to take market share, this could have a material negative impact on the business of Grupo Antolin. Also, the capability to take big orders might be limited for a small player, which, however, is to some extent offset by the rather global production network of Antolin's plants. However, until now Group Antolin's operating performance has been relatively resilient compared to peers despite its smaller size. While Grupo Antolin paid dividends of EUR9 million and EUR20 million in 2011 and 2012, representing payout ratios of 32% and 40% of consolidated profit respectively, it distributed a total of EUR139 million in 2013. Moody's understand that this was an extraordinary one-time payout, which, however, consummated all of the cash flow generated during the period 2010 -- 2013. The rating does not incorporate significant future shareholder distributions. As Moody's believe an automotive supplier needs to follow its customers on a global scale, and to continuously extend or advance its product portfolio there is contingent risk of debt-financed acquisitions which might lead to a deterioration of the company's capital structure. Moody's view Grupo Antolin's liquidity profile to be adequate post the refinancing. Moody's estimate a cash position of EUR75 million after the closing of the refinancing. Other cash sources for the next 12 months ending March 2015 comprise FFO of around EUR150 million as well as the new EUR200 million revolving credit facility maturing in 5 years, which is expected to remain largely undrawn during the next 12 months. The senior bank facilities are subject to conditional language and financial covenants set with solid headroom against management's business plan. Expected cash uses totaling roughly EUR260 million for the 12-month period ending March 2015 mainly relate to working cash required to run the business (EUR65 million, assumed at 3% of annual revenues), EUR35 million working capital consumption and EUR140 million capex, modest cash outflows for potential acquisitions as well as around EUR10 million mandatory debt repayment. Structural Considerations In our analysis of the capital structure we distinguish three layers of debt: The main layer of debt (ranking #2) comprises the EUR200 million revolving credit facility and the EUR200 million term loan A to Grupo Antolin under the senior facilities agreement together with a EUR70 million facility from ADE (the Agency for Business Innovation, Financing and Internationalisation of Castilla and Leon), a total of EUR68 million soft loans from government bodies and local credit lines. The EUR400 million notes issued by Grupo Antolin Dutch B.V. get the same rank in our loss given default assessment in view of their benefit from (a) a guarantee from Grupo Antolin-Irausa S.A. and (b) guarantees by subsidiaries of the group representing 66% of consolidated EBITDA and 60% of consolidated assets. Finally, Moody's put trade payables, pension liabilities (EUR8 million) and lease rejection claims (EUR18 million) located at the operating subsidiaries into rank 2 as well. In our waterfall analysis Moody's give a higher rank to some EUR5.5 million property loans secured by mortgages and EUR23 million of financial debt at non-guaranteeing subsidiaries. In view of materiality Moody's give the same rank to both instruments. The outlook on the ratings is stable incorporating Moody's expectation that Grupo Antolin will be able to build on the solid performance which the group has consistently shown since 2010 by delivering further gradual improvement in key credit metrics allowing Grupo Antolin to build some headroom within the rating category. What Could Change The Rating Up/Down Upward pressure on the rating could develop if the company delivers on its business plan, such that its EBITA Margin can be kept above 7% and interest coverage remains well above 3.0x EBITA / Interest expense (all figures in this paragraph are as adjusted by Moody's). In addition, a consistently positive Free Cash Flow generation above 5% of net debt and a permanent reduction in leverage below 3.5x Debt/EBITDA could be positive for the rating. Downward pressure could be exerted on the rating if Grupo Antolin's operating performance weakens indicated by EBITA Margin approaching 5%, interest cover approaching 2.0x EBITA / Interest expense, if Free Cash Flow turns negative or if the company increases debt as a result of acquisitions or shareholder distributions, such that its Debt/EBITDA exceeds 4.0x. A weakening in the company's liquidity profile could also exert downward pressure on the rating. The principal methodology used in these ratings was the Global Automotive Supplier Industry published in May 2013. 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 Burgos / Spain, Grupo Antolin-Irausa, S.A. is a family owned tier 1 supplier to the auto motive industry. The company, which ranks 55 in the world ranking of the largest automotive suppliers, employs more than 15,700 people and operates more than 120 production manufacturing plants and just- in-time facilities in 25 countries. It focuses its activities on the design, development, manufacturing and supply of components for vehicle interiors, which includes overheads (headliners), door trims, seating and interior lighting components. GRUPO ANTOLIN: S&P Assigns Preliminary 'BB-' CCR; Outlook Stable ---------------------------------------------------------------- Standard & Poor's Ratings Services said it assigned its 'BB-' preliminary long-term corporate credit rating to Spain-based auto supplier Grupo Antolin Irausa S.A. The outlook is stable. At the same time, S&P assigned its 'BB-' preliminary issue rating to the proposed EUR400 million senior secured notes. The preliminary recovery rating on this instrument is '3', indicating S&P's expectation of good (50%-70%) recovery prospects in the event of a payment default. S&P bases the preliminary rating on its assumption that in the next few months Antolin will refinance the bulk of its outstanding debt by completing the following steps: -- Set up of an amortizing EUR200 million syndicated senior secured facility maturing in five years; -- Launch of a EUR400 million senior secured bond with a maturity of seven years; -- Set up of a EUR200 million committed secured revolving credit facility maturing in five years; and -- Renegotiation of the conditions of an existing EUR70 million secured amortizing loan from ADE maturing in 2022. The rating will depend on receipt and satisfactory review of the documentation on the final transactions. The rating will remain preliminary until the transactions have been completed and all conditions under the documentation have been met. Accordingly, the preliminary rating should not be construed as indicative of the rating. If S&P do not receive the final documentation within a reasonable timeframe, or if the final documentation departs from the material S&P has already reviewed, it reserves the right to withdraw or revise the rating. Antolin designs and produces interior auto parts, which include overheads, door trims and mechanisms, seating, and lighting products. The company reported revenues of about EUR2 billion in 2013. The preliminary rating on Antolin reflects S&P's view that the company has a "fair" business risk profile and a "significant" financial risk profile, as S&P's criteria define these terms. In S&P's view, Antolin's exposure to the cyclical auto market, lack of after-market exposure, and sales concentration in the interior segment constrain its business risk profile. However, S&P believes that these risks are mitigated by the low historical volatility of the company's operating margin, which is in the average range for global auto suppliers that S&P rates. The "significant" financial risk profile is constrained by the company's ratio of funds from operations (FFO) to debt of about 20% by our projection. The ratio at this level would be at the lower end of S&P's range for the "significant" category. Still, Antolin's stronger debt-to-EBITDA ratio supports its financial risk profile. S&P believes that Antolin will maintain debt to EBITDA at 3.0x-3.5x, in line with past levels. Antolin's adjusted EBITDA margin was at about 10% in 2013, close to the margin achieved in 2012. Antolin is a family-owned group. So far, the family has not been overly aggressive in its financial policy, in S&P's view, and it has backed managerial continuity. However, in S&P's opinion, the sole limitations to the decision power of the family shareholder are the clauses included in the proposed debt documentation that limit shareholder remuneration, asset sales, and early debt repayments. "We apply a one-notch negative adjustment to the rating on Antolin for our "comparable ratings analysis" under which we review an issuer's credit characteristics in aggregate. We view this factor as negative because we believe that the FFO-to-debt ratio has been and is going to stay at the lower end of the 20%- 30% indicative range for a financial risk profile descriptor of "significant" in 2014-2015. What's more, we forecast that free operating cash flow (FOCF) to debt will stay below the 10%-15% indicative range for our financial risk assessment," S&P said. "The stable outlook reflects our view that Antolin will maintain a reported operating margin in the range of 10%-11%, in line with historical levels, and revenue growth in the low single digits in 2014. We also believe the company will maintain FFO to debt commensurate with our view of the company's financial risk profile as "significant," at above 20%, although this ratio could be just about this level in 2014. The debt-to-EBITDA ratio should be in the range of 3.0x-3.5x under our base-case forecast. Lastly, we expect Antolin to continue to generate positive FOCF," S&P added. A negative rating action on Antolin could follow the combination of adverse market conditions that trigger cancellation or delays of programs, and loss of market share with a concurrent deterioration of the operating margin and in credit ratios to below the levels indicated above. A negative rating action could likewise result if shareholder remuneration became aggressive or the company carried out debt-financed acquisitions. S&P could consider a positive rating action if Antolin maintained FFO to debt at about 25%, debt to EBITDA at approximately 3x, and FOCF to debt in the 10%-15% range. PESCANOVA SA: Creditors Accept Up to 90% Losses as Part of Plan --------------------------------------------------------------- Reuters reports that the creditors of insolvent Spanish fishing firm Pescanova S.A. have agreed to accept losses of up to 90 percent on loans to the company as part of a plan to refloat the firm and avoid liquidation. According to Reuters, the company said Pescanova's main shareholders, Barcelona-based brewer Damm and investment firm Luxempart have now submitted the creditor-backed plan as a consortium for approval from the mercantile court of Pontevedra, northern Galicia, where the frozen fish producer is based. If the court accepts the current plan, creditor banks would become majority shareholders of a new company to be called "Nueva Pescanova" with a 34.6 percent stake, while Damm and Luxempart would be leading industrial partners with 30 percent, Reuters relates. A previous consortium proposal that included private equity firm KKR and investment group Ergon Capital Partners has not gone ahead, the report notes. According to the report, the latest proposal calls for a haircut on debt of between 60 and 90 percent and a 150 million-euro capital injection, comprising EUR112.5 million in new financing to be provided by creditors and the Damm and Luxempart consortium. It also includes a EUR37.5 million new share issue for existing shareholders, with a separate, unspecified tranche reserved for the consortium. Of the remaining capital, 30.4 percent will be offered to Pescanova's other existing shareholders, while the Pescanova group will hold 4.99 percent in exchange for handing over its stakes in the Spanish unit for the new company, Reuters relays. Debt at the new company, which would group together all of Pescanova's Spanish businesses, would stand at EUR812.5 million, excluding borrowings at international divisions, Reuters adds. About Pescanova SA Pescanova SA is a Galicia-based fishing company. The company catches, processes, and packages fish on factory ships. It is one of the world's largest fishing groups. Pescanova filed for insolvency on April 15, 2013, on at least EUR1.5 billion (US$2 billion) of debt run up to fuel expansion before economic crisis hit its earnings. The Pontevedra mercantile court in northwestern Galicia accepted Pescanova's insolvency petition on April 25. The court ordered the board of directors to step down and proposed Deloitte as the firm's administrator. ============= U K R A I N E ============= CREATIV GROUP: S&P Lowers Corporate Credit Rating to 'CCC' ---------------------------------------------------------- Standard & Poor's Ratings Services said that it has lowered its long-term foreign currency corporate credit rating on Ukraine- based agribusiness group Creativ Group OJSC to 'CCC' from 'CCC+'. Simultaneously, S&P affirmed its 'B-' long-term local currency corporate credit rating on Creativ. The outlook on both ratings is negative. The downgrade follows S&P's downgrade of Ukraine and its downward revision of its transfer and convertibility (T&C) assessment on Ukraine to 'CCC', taking into account that Creativ's core assets are concentrated in Ukraine. The revised T&C assessment constrains the foreign currency rating on Creativ because of the likelihood of increased restrictions on repatriation (changing funds held abroad into the local currency) and, more generally, negative sovereign interaction. S&P believes that the deteriorated creditworthiness of the country increases the risk of laws instructing export companies to convert their hard currencies, which could affect the group's dollar-denominated debt service. Equally importantly, the financial turmoil affecting Ukraine could in turn affect local banks and therefore constrain the financing of the group's working capital. The negative outlook on Creativ takes into account S&P's negative outlook on Ukraine and reflects the possibility of a further downgrade in the next 12 months. This could happen if there were tighter currency controls, more restrictions on transfer of funds, rising political or fiscal pressures, or if Creativ's liquidity deteriorated because local banks came under pressure, thereby calling into question the group's ability to roll over its short-term debt. "We could lower the rating on Creativ if we lowered our ratings on Ukraine further and revised the T&C assessment downward. However, this would not automatically result in a downgrade of Creativ if the company were able to show resilience to country- specific factors, including the risk of stricter currency restrictions. Significant operating setbacks due to margin squeeze in the group's crushing activities could also lead to a downgrade if they were to trigger a liquidity issue," S&P said. S&P would revise the outlook to stable if conditions in Ukraine stabilized and it saw lower risk related to currency controls, repatriation requirements, and refinancing risks. Any rating upside is closely linked to a positive rating action on the sovereign. An upgrade of Ukraine would trigger a similar action on Creativ. MRIYA AGRO: S&P Lowers Corporate Credit Rating to 'CCC' ------------------------------------------------------- Standard & Poor's Ratings Services said that it has lowered its long-term foreign currency corporate credit rating on Ukraine- based farming group Mriya Agro Holding PLC (Mriya) to 'CCC' from 'CCC+'. Simultaneously, S&P affirmed its 'B-' long-term local currency corporate credit rating on Mriya. The outlook on both ratings is negative. Recovery ratings on the company's debt issues are unaffected by this rating change. The downgrade follows S&P's downgrade of Ukraine and the downward revision of its transfer and convertibility (T&C) assessment on Ukraine to 'CCC' from 'CCC+', taking into account that Mriya's core assets -- its land bank, silos, and machinery -- are concentrated in Ukraine. The revised T&C assessment constrains the foreign currency rating on Mriya because of the likelihood of increased restrictions on repatriation (changing funds held abroad into the local currency) and, more generally, government initiatives that could be detrimental to Mriya. S&P believes that Ukraine's deteriorated creditworthiness increases the risk of export companies being legally required to convert their hard currencies, which could affect the group's dollar-denominated debt service. The ratings on Mriya reflect S&P's assessment of the company's business risk profile as "vulnerable" and its financial risk profile as "significant." The negative outlook on Mriya takes into account S&P's negative outlook on Ukraine and reflects the possibility of a further downgrade of Mriya in the next 12 months. S&P could lower the rating if there were tighter currency controls, more restrictions on the transfer of funds, rising political or fiscal pressures, or if Mriya's liquidity deteriorated because local banks came under pressure, thereby calling into question the group's ability to rollover its short- term debt. However, if S&P lowered its ratings on Ukraine and revised its T&C assessment downward, this would not automatically result in a downgrade of Mriya if the company showed resilience to country- specific factors, including the risk of stricter currency restrictions. S&P notes that Mriya benefits from recurrent foreign currency inflows stemming from exports. This, combined with offshore cash accounts, mitigates local T&C issues. S&P would revise the outlook to stable if conditions in Ukraine stabilized and it saw lower risk related to currency controls and repatriation requirements. Any rating upside is closely linked to positive rating actions on the sovereign. However, it could also occur if Mriya demonstrated an ability to continue servicing its foreign currency debt despite the liquidity constraints stemming from the sovereign. =========================== U N I T E D K I N G D O M =========================== NORD ANGLIA: S&P Puts 'B' CCR on CreditWatch Positive ----------------------------------------------------- Standard & Poor's Ratings Services said that it has placed on CreditWatch with positive implications its 'B' long-term corporate credit rating on Hong Kong-domiciled education services provider Nord Anglia Education (UK) Holdings PLC (Nord Anglia Education) and its parent, Nord Anglia Education Inc. At the same time, S&P assigned ratings to the proposed loans to be borrowed by Nord Anglia Education Finance LLC, a direct subsidiary of Nord Anglia Education Inc. S&P has assigned a 'B+' issue rating to the proposed US$515 million senior secured term loan B (TLB) due 2021 and to the proposed US$75 million revolving credit facility (RCF) due 2019, in line with its anticipation of the issuer credit rating on Nord Anglia Education post transaction. The proposed loans have a recovery rating of '3', indicating S&P's expectation of meaningful (50%-70%) recovery in the event of a payment default. In addition, S&P affirmed its 'B' issue rating on the existing US$490 million 10.25% senior secured notes due 2017 issued by Nord Anglia Education and its 'CCC+' issue rating on the existing US$150 million payment-in-kind (PIK) toggle notes. The recovery ratings on these issues are unchanged at '3' and '6' respectively. The CreditWatch placement follows the announcement that Nord Anglia Education is planning an IPO on the New York Stock Exchange. S&P could raise the long-term corporate credit rating on Nord Anglia Education by one notch on completion of the IPO and planned debt reduction. Nord Anglia Education plans to raise about US$285 million from the IPO and an additional US$515 million from the proposed issuance of a term loan B. S&P understands that Nord Anglia Education will use the proceeds to repay its US$490 million 10.25% senior secured notes due 2017 as well as the US$150 million PIK toggle notes due 2018, along with other costs associated with the IPO and the refinancing. S&P further understands that the refinancing is conditional upon the successful IPO transaction. Finally, S&P also understands that, as part of the transaction, the group will convert all of its preference shares into ordinary shares, so no preference shares will be outstanding after the IPO. "Our rating on Nord Anglia Education takes into account the company's currently "highly leveraged" financial risk profile reflective of adjusted debt to EBITDA of about 15x (equivalent to about 5.6x when excluding preference shares). We understand that Nord Anglia Education will issue new primary shares in the IPO, with a free float of about 20%. However, financial sponsor Baring Asia Private Equity will continue to hold a substantial share in Nord Anglia Education on completion of the IPO. We will continue to apply our financial sponsor criteria unless ownership by Baring falls to less than 40%," S&P said. "We forecast that the debt reduction, coupled with sound operating performance and earnings growth in 2014, will strengthen Nord Anglia Education's financial risk profile," S&P added. S&P continues to assess the group's business risk profile as "fair". S&P expects to resolve the CreditWatch on completion of the IPO, which it anticipates will occur within the next 90 days. S&P would likely raise its long-term corporate credit and issue ratings on Nord Anglia Education by one notch if the IPO is successful and the group is able to reduce debt as it plans. Before resolving the CreditWatch, S&P will assess Nord Anglia Education's capital structure and take into account any potential changes to the group's use of the proceeds. ********* 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, 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 * * *