/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/140319.mbx T R O U B L E D C O M P A N Y R E P O R T E R E U R O P E Wednesday, March 19, 2014, Vol. 15, No. 55 Headlines A U S T R I A DITECH: Hardware Computer Trader Declares Insolvency HYPO ALPE ADRIA: Expects to Reach Settlement with BayernLB C Y P R U S OCEAN RIG: Moody's Raises Corp. Family Rating to 'B2' OCEAN RIG: S&P Assigns 'CCC+' Rating to US$500MM Sr. Unsec. Notes G E R M A N Y TREVERIA: Inks Settlement With Administrator Over Silo E G R E E C E ALPHA BANK: S&P Affirms 'CCC/C' Counterparty Credit Ratings GREECE: Reaches Agreement with International Creditors PIRAEUS BANK: S&P Affirms 'CCC/C' Ratings; Outlook Negative I R E L A N D * IRELAND: Galway Insolvency Rate Rises 50% in February I T A L Y BERTONE: On Brink of Bankruptcy Following Fiscal Woes N E T H E R L A N D S BABSON EURO: Moody's Assigns (P)B2 Rating to EUR14.5MM Notes R U S S I A LEVOBEREZHNY OJSC: Fitch Assigns 'B+' IDR; Outlook Stable VOENTELECOM: Moscow Court Terminates Bankruptcy Proceedings S P A I N ALMIRALL SA: S&P Assigns Preliminary 'BB-' CCR; Outlook Positive ISOLUX CORSAN: S&P Affirms 'B/B' Corporate Credit Ratings S W I T Z E R L A N D * UBS Said to Seek Immunity in Currency-Rigging Probes by EU, US T U R K E Y DOGUS HOLDING: S&P Revises Outlook to Neg. & Affirms 'BB' Rating U K R A I N E UKRAINE: Western Europe Companies on Edge Following Crimea Vote U N I T E D K I N G D O M GREENWAVE BIO: High Court Enters Wind Up Order HEALTHCARE SUPPORT: S&P Lowers Sr. Secured Debt Rating to 'BB-' LOWELL GROUP: Moody's Rates GBP115MM Senior Secured Bond 'B1' ROWECORD ENGINEERING: AIC Takes Over Former Steel Site ********* ============= A U S T R I A ============= DITECH: Hardware Computer Trader Declares Insolvency ---------------------------------------------------- FriedlNews reports that Viennese hardware computer trader DiTech has slipped into insolvency. According to FriedlNews, the electronic dealer has undertaken too much by a fast expansion and has now declared insolvency. The enterprise intended to file for reorganization proceedings at the Commercial Court in Vienna last week. According to the report, founder of DiTech and general manager Damian Izdebski said the number of employees is supposed to be cut by 60 to 80 persons. DiTech said the computer trader has accumulated "very high losses" in the past two years. According to spokesman of DiTech, Mario Gundl, details about the insolvency proceeding will be published after restructuring measures were filed at the Commercial Court in Vienna, the report says. Redevelopment administrators as well as insolvency specialists are expected to close smaller branch shops and downsize the logistics center. The electronic dealer said negotiations with banks and a potential investor were led, the report relays. Vienna-based DiTech has 22 branch shops and 300 employees in Austria. HYPO ALPE ADRIA: Expects to Reach Settlement with BayernLB ---------------------------------------------------------- Michael Shields at Reuters reports that the Austrian government wants to ensure taxpayers do not end up footing the entire bill for winding down state lender Hypo Alpe Adria and could use special legislation to go after some creditors. Austria, which nationalized Hypo in 2009 to avoid a failure that would have sent shockwaves across the region, finally ruled out on Friday letting it go bust, Reuters relates. Instead, it will wind it down via an expensive "bad bank", Reuters notes. It wants Hypo's home province of Carinthia, subordinated creditors and former owner BayernLB to share the costs of the plan, which may push state debt above 80% of GDP and add EUR4 billion (US$5.6 billion) to the 2014 budget deficit, Reuters says. Justice Minister Wolfgang Brandstetter told the Kurier newspaper on Sunday he was confident the government could reach a reasonable settlement with Bavarian state bank BayernLB, Reuters relates. "A few lawsuits are pending with the Bavarians and in theory, there could be even more. But it cannot be in their interests to tie up resources for years in court cases," Reuters quotes Mr. Brandstetter as saying. "We are determined that creditors -- via special legislation if needed -- participate in the necessary restructuring of the bank." He said the Austrian government was also looking to recoup the EUR500 million that Carinthia earned from selling its Hypo stake to BayernLB, Reuters discloses. According to Reuters, Finance Minister Michael Spindelegger told Oesterreich newspaper on Sunday that the cost of winding down Hypo would boost the budget deficit by 1.2% of gross domestic product (GDP), but called this a one-off effect. In a separate interview with Die Presse, Mr. Spindelegger, as cited by Reuters, said he was upset that Hypo management had been unable so far to present him with exact details of how much more state aid the bank now needed, and indicated heads could roll. He said talks with BayernLB would start this month, Reuters states. The Bavarian state bank has alleged in court it was duped into buying Hypo and is also trying to get back EUR2.3 billion in loans to Hypo that have been frozen, Reuters discloses. About Hypo Alpe-Adria Hypo Alpe-Adria International AG is a subsidiary of BayernLB. It is active in banking and leasing. In banking, HGAA serves both corporate and retail customers and offers services ranging from traditional lending through savings and deposits to complex investment products and asset management services. Hypo Alpe has received EUR1.75 billion in aid in emergency capital from the Austrian government. European Union Competition Commissioner Joaquin Almunia said in March 2013 that Hypo faced possible closure for failing to adequately restructure. The European Commission approved Hypo's recapitalization in December 2013, but made it conditional on the management presenting a thorough plan to overhaul the group. The Austrian finance ministry, which effectively runs Hypo Alpe, submitted a restructuring plan to the Commission on Feb. 5. =========== C Y P R U S =========== OCEAN RIG: Moody's Raises Corp. Family Rating to 'B2' ----------------------------------------------------- Moody's Investors Service upgraded Ocean Rig UDW Inc.'s corporate family rating (CFR) to B2 from B3 and probability of default rating (PDR) to B2-PD from Caa1-PD. Concurrently, Moody's has upgraded the ratings on the US$800 million secured notes issued by Drill Rigs Holdings Inc. ("Drill Rigs") to B2 from B3, the US$1.9 billion senior secured term loan borrowed by Drillships Financing Holding Inc. ("Drillships") to B1 from B2 and the US$500 million unsecured notes issued by Ocean Rig to Caa1 from Caa3. Moody's has also assigned a provisional (P)Caa1 rating to the proposed $500 million senior unsecured notes issued by Ocean Rig due 2019. The outlook on all ratings remains stable. Moody's expects that Ocean Rig will use the proceeds of the proposed new unsecured notes to redeem the outstanding unsecured notes maturing in 2016 (now rated Caa1). The company has commenced a tender offer for the US$500 million of outstanding notes. However, the notes are redeemable at a price of 104.5% beginning on April 28, 2014 and Ocean Rig currently expects to redeem those notes not purchased in the tender offer on or after this date. Any remaining portion of the net proceeds are intended to be used for general corporate purposes. Moody's issues provisional ratings in advance of the final sale of securities. Upon closing of the transaction and a conclusive review of the final documentation, Moody's will endeavor to assign definitive ratings. A definitive rating may differ from a provisional rating. Ratings Rationale "The upgrade reflects Ocean Rig's strong operational performance in 2013, with utilization around 95%, and Moody's expectation that continued strong operating performance, as well as seven vessels on contract throughout 2014 and the Skyros starting in the first quarter, will lead to better credit metrics than our previous forecast, " said Moody's analyst Douglas Crawford. "Moody's also views liquidity as benefitting from the covenant reset in the second half of 2013 and improved operating cash flow generation despite the negative implications of a possible master limited partnership formation later in the year." Cash flow visibility is supported by the absence of 5-year class surveys until 2016 and the solid contract coverage for the next two years, at 99% and 72% respectively. As such, Moody's forecasts gross leverage (as adjusted by Moody's) to end FY2014 below 5.5x. The upgrade also reflects the improved business profile with eight operating units at the end of 2013, following the delivery of the Mylos and Skyros on budget in 2013. The expected delivery of the Athena this month will increase the fleet to nine operating vessels, leaving only two more drillships under construction for delivery in January and December 2015. Although Ocean Rig still needs to take delivery of these three additional vessels, the company's increased scale minimizes any negative impact on performance associated with newbuilds' ramp-up costs. We note that the Athena was initially due to be delivered in December 2013 and has been delayed by three months due to third party and sub-supplier equipment delays, however the impact on 2014 performance will be limited as it has no material impact on the rig's contract with ConocoPhillips. The B2 CFR reflects Ocean Rig's very high adjusted gross leverage of 7.0x in FY2013, which Moody's expects to decline to below 5.5x by the end of 2014, despite taking delivery of an additional rig. The rating also considers the capital intensive, highly cyclical nature of the offshore contract drilling sector, the medium-sized operational asset base with nine rigs operating at the end of 2014 (and a further two under construction) and low diversification. The rating also incorporates Ocean Rig's young and technologically advanced fleet that Moody's expects to maintain superior day rates even in a downturn, and the strong revenue visibility over the next several years as demonstrated by its substantial US$5.4 billion contract backlog. The upgrade of the PDR by two notches to B2-PD, in line with the CFR, is consistent with a company that has a capital structure comprising of both bank and bond debt. It also reflects Moody's view that the heightened risk of default previously anticipated has now considerably diminished on the back of the covenant reset and strong operational performance. The (P)Caa1 rating, two notches below the CFR, on the proposed unsecured notes due 2019, reflects their contractually and structurally subordinated position relative to the company's $3.5 billion in secured debt at its subsidiaries, which are each secured by mortgages on certain drilling units. At the end of 2013, Ocean Rig's liquidity was good. The company had US$605 million cash on the balance sheet but no RCF. Moody's expects the quarterly amortizing debt payments and the US$25 million quarterly dividend payment expected to be initiated in Q2 2014 to be covered by internally generated cash flow. Additionally, Moody's expects Ocean Rig to have sufficient liquidity to cover the final construction payments for the rigs to be delivered in 1Q 2014 and 1Q 2015. In September 2013, Ocean Rig reset its covenants and Moody's now expects the company has sufficient headroom over the next 12-18 months. Rating Outlook The stable outlook reflects Moody's view that Ocean Rig will continue to reduce leverage, supported by a stable operating environment for young assets in the ultra-deepwater offshore drilling industry and the company's contract backlog. It also assumes adequate liquidity and covenant headroom. What Could Change the Rating - UP Ocean Rig's ratings could be upgraded if gross leverage is maintained below 5.0x, the company has made solid progress on new contracts for rigs that run off their current contracts in 2015, and the new rigs under construction are progressing on schedule and budget. What Could Change the Rating - DOWN The company's ratings could be pressured if the conditions for a stable outlook are not met. Higher than expected leverage caused by a material delay in delivery of the three drillships under construction, extended downtime on the operating drillships and/or additional new rig construction commitments could lead to a downgrade. Leverage sustained above 6.5x or a significant tightening of liquidity could result in a ratings downgrade. The principal methodology used in these ratings was the Global Oilfield Services Rating Methodology published in December 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Incorporated in the Marshall Islands, but headquartered in Cyprus, Ocean Rig UDW Inc is an oilfield services company focused on ultra-deepwater exploration and production drilling. It is listed on the NASDAQ, with a market capitalization of around $2.3 billion and is majority-owned by DryShips Inc, a US-listed drybulk shipping and tanker company. OCEAN RIG: S&P Assigns 'CCC+' Rating to US$500MM Sr. Unsec. Notes ----------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B' long-term corporate credit rating on Marshall Islands-domiciled ultra- deepwater driller Ocean Rig UDW Inc. The outlook is negative. At the same time, S&P assigned an issue rating of 'CCC+' to the proposed US$500 million senior unsecured notes due in 2019 to be issued by Ocean Rig. The recovery rating on these notes is '6' indicating S&P's expectation of negligible (0%-10%) recovery prospects in the event of a payment default. S&P understands that the proceeds of these notes will be used to repay the existing US$500 million senior unsecured notes that currently have an issue rating of 'CCC+' and a recovery rating of '6'. The affirmation follows the announced tender offer for the 9.5% senior unsecured callable notes due 2016 and reflects S&P's assessment of Ocean Rig's anchor at 'b', based on S&P's assessments of the company's business risk profile as "fair" and financial risk profile as "highly leveraged." S&P's assessment of Ocean Rig's business risk profile as "fair" reflects the company's improved revenue and cash-flow visibility through multi-year contracts with a diverse range of companies, and a sizable contract backlog totaling US$4.1 billion. The company's scale is small but it is growing quickly, with a young and modern fleet. Ocean Rig operates in the highly cyclical and competitive offshore drilling industry. However, S&P expects favorable market conditions, including high day rates, to continue in the ultra-deepwater segment. That said, S&P notes that recently there has been some push back from exploration and production companies on rising costs. However, as Ocean Rig has 100% of its fleet under contract for 2014 and 72% for 2015, S&P do not expect this to affect results over the near to medium term. S&P forecasts that Ocean Rig's credit metrics will remain "highly leveraged" over the next 12 months. S&P forecasts negative free operating cash flow overall in 2014 and 2015 due to the heavy investments that the company has planned. That said, S&P expects a significant amount of capital expenditure (capex) to be partly funded through operating cash flow generation. S&P continues to view the company's financial policy as aggressive, demonstrated by its very high levels of debt, and the proposed Master Limited Partnership (MLP) structure. S&P's base-case scenario assumes: -- That the deepwater drilling sector will continue to be supported by high oil prices in the short to medium term. -- Contract rates in line with fixed charge rates and a 92.5% utilization rate, as also assumed by management. In S&P's view, these rates allow the company to sustain a Standard & Poor's-adjusted EBITDA margin of above 46%. -- Capex of less than US$550 million in 2014 and about US$1 billion in 2015, mainly for new vessels. Maintenance capex included in this total is under US$100 million per year. -- Quarterly dividends of US$25 million payable from mid-May 2014. -- Debt amortization of about US$146 million each year in 2014 and 2015. -- S&P do not expect any acquisitions as it understands that the second-hand market is practically non-existent. -- Tax rate of about 4.5% of revenues, in line with management assumptions. Based on these assumptions, S&P arrives at the following metrics in 2014 and 2015: -- EBITDA margins of 46%-50%; -- FFO to debt of about 10% or modestly higher; and -- Debt to EBITDA of about 5x. No modifiers have any impact on the rating. S&P has revised upward its assessment of management governance to "fair" from "weak" -- which was based on historic liquidity issues and a weak performance in 2012 -- and therefore have revised upward to "neutral" (from "positive") S&P's comparable rating analysis, whereby S&P reviews an issuer's credit characteristics in aggregate. S&P would likely lower the ratings on Ocean Rig if any potential liquidity issues or debt restructuring activity in DryShips' shipping business adversely affects Ocean Rig, leading S&P to revise its view of Ocean Rig as an insulated subsidiary of DryShips. This could mean that S&P no longer de-link the rating on Ocean Rig from Dryships' group credit profile. Furthermore, if the company's financial policy becomes materially more aggressive following the implementation of the MLP structure, or the company has problems financing its newbuilds, this could put pressure on the ratings. S&P could revise the outlook to stable if Ocean Rig's liquidity improves to "adequate," and the proposed MLP structure does not adversely affect Ocean Rig's financial risk profile or S&P's assessment of the company's financial policy. ============= G E R M A N Y ============= TREVERIA: Inks Settlement With Administrator Over Silo E -------------------------------------------------------- Anthony Tshibangu at Alliance News reports that property company Treveria PLC said it has reached a settlement with the insolvency administrator regarding the assets of its Silo E portfolio. Alliance News relates that Treveria, which invests in German commercial real estate, said the insolvency administrator has agreed to compensate it for its cooperation in the sale of the property. Treveria added the insolvency administrator will also waive any potential claims against Treveria E S.a.r.l., the parent of the German portfolio companies, according to Alliance News. Treveria said it will not pursue any further steps in this regard, the report notes. As reported in the Troubled Company Reporter-Europe on Dec. 11, 2012, Property Investor Europe said Treveria was forced to file for insolvency for its EUR477 million Silo E portfolio as UK loan servicer Hatfield Philips International declined to prolong another standstill with Dutch bank ABN Amro on the EUR390 million CMBS that financed it. Treveria is a German retail property firm. =========== G R E E C E =========== ALPHA BANK: S&P Affirms 'CCC/C' Counterparty Credit Ratings ----------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'CCC/C' long- and short-term counterparty credit ratings on Greece-based Alpha Bank A.E. The outlook is negative. The rating action follows Alpha's March 10 announcement that it intends to raise EUR1.2 billion in new capital -- mainly to address its current capital needs as determined by the Bank of Greece -- and to redeem the EUR940 million in Greek government preferred securities that are currently included in Alpha's regulatory capital. The affirmation reflects S&P's opinion that Alpha will continue to benefit from capital support from the Hellenic Financial Stability Fund (HFSF), as well as liquidity support from the European Central Bank (ECB) and emergency liquidity assistance from the Central Bank of Greece. "In our opinion, the EUR1.2 billion capital increase would not provide a sufficient cushion against the large credit losses we expect at the bank over the next two years. In this context, we also believe Alpha will need additional capital to meet the minimum regulatory ratio, which we define as Basel III fully loaded core Tier 1, of 8% as of year-end 2015. In our view, the HFSF will continue to be willing and able to provide enough capital support to Alpha to restore the bank's minimum regulatory capital ratio and we therefore expect its projected risk-adjusted capital ratio to be sustainably above 3% in 2015. As such, we continue to incorporate one notch of short-term support into the rating on Alpha to reflect the potential for this capital support," S&P said. "We anticipate continued erosion of the bank's capital because of the very high credit losses we expect from its large stock of nonperforming assets (NPAs), as well as the high volume of what we view as vulnerable restructured loans, and which the bank has neither yet recognized as nonperforming loans nor provisioned against. These loans have been accumulated during the prolonged and intense economic downturn in Greece," S&P added. S&P believes Alpha will continue to face asset quality challenges in 2014 and 2015, with still sizable inflows of new NPAs. This will lead to substantial additional credit losses, in S&P's view. S&P estimates credit losses will materially exceed the bank's projected operating profits in 2014 and 2015. S&P's view of the bank's future capital requirement also takes into account the weak quality it sees in the bank's capital, reflecting the large amount of deferred tax assets the bank has accumulated in the last three years. The negative outlook reflects the possibility that S&P could downgrade Alpha over the next 18-24 months if it believed it was going to default on its obligations because of insufficient capital or liquidity support. S&P could lower the ratings on Alpha if its access to the EU's extraordinary liquidity support mechanisms, including the emergency lending assistance discount facility at the ECB, and to the ECB itself, were impaired for any reason. This support currently underpins the bank's capacity to meet its financing requirements. In this context, S&P believes the pressure on the bank's retail funding base due to the ongoing economic troubles may lead to further deposit outflows despite a mild recovery in recent months. This could, in S&P's opinion, increase the bank's need for additional extraordinary liquidity support from the European authorities. S&P could also lower the ratings if it believed that the bank was going to default on its obligations as a result of any developments associated with an impairment in its solvency. S&P could revise the outlook to stable if economic conditions in Greece considerably improved and pressure on the bank's fragile asset quality and financial profile eased, or if substantial additional external support materialized. GREECE: Reaches Agreement with International Creditors ------------------------------------------------------ Deutsche Presse Agentur reports that a diplomatic source said on Tuesday the Greece government reached an agreement with its international creditors following seven months of negotiations. The diplomatic source told dpa, on the condition of anonymity, that both sides have come to an agreement on several points of contention that had been causing delays in the talks. Prime Minister Antonis Samaras was expected to make an official statement yesterday detailing the terms of the agreement, which will pave the way for Athens to secure additional rescue loans, dpa relates. The eurozone's rescue fund still has EUR10.1 billion available for Greece, with the IMF also contributing to the emergency bailout, dpa discloses. According to dpa, the current Greek bailout program is due to end in late 2014, but there has been speculation that Athens will need a third rescue package going forward. PIRAEUS BANK: S&P Affirms 'CCC/C' Ratings; Outlook Negative ----------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'CCC/C' long- and short-term counterparty credit ratings on Greece-based Piraeus Bank S.A. The outlook remains negative. The rating action follows Piraeus' March 7 announcement that it intends to raise EUR1.75 billion in new capital, mainly to address its current capital needs, as determined by the Bank of Greece, and to redeem the EUR750 million in Greek government preferred securities that are currently included in Piraeus' regulatory capital. The affirmation reflects S&P's opinion that Piraeus will continue to benefit from capital support from the Hellenic Financial Stability Fund (HFSF), as well as liquidity support from the European Central Bank (ECB). "In our opinion, the EUR1.75 billion capital increase would not provide a sufficient cushion against the large credit losses we expect the bank to experience over the next two years. As a result, we anticipate that Piraeus will need additional capital to meet the minimum regulatory ratio, which we define as Basel III fully loaded core Tier 1, of 8% as of year-end 2015. In our view, the HFSF will remain willing and able to provide enough capital support to Piraeus to restore the bank's minimum regulatory capital ratio and we therefore expect Piraeus' projected risk-adjusted capital ratio to remain sustainably above 3% in 2015. As such, we continue to incorporate one notch of uplift into our short-term rating on Piraeus to reflect the potential for this capital support," S&P said. S&P anticipates continued erosion of Piraeus' capital because of the very high credit losses it expects from its large stock of nonperforming assets (NPAs), as well as the high volume of what S&P views as vulnerable restructured loans that the bank has not classified as nonperforming. Piraeus accumulated these loans during the prolonged and intense economic downturn in Greece. S&P anticipates that Piraeus will continue to struggle to maintain asset quality in 2014 and 2015 as inflows of new NPAs remain sizable. This will lead to substantial additional credit losses, in S&P's view. S&P estimates credit losses will materially exceed Piraeus' projected operating profits in 2014 and 2015. S&P's view of the bank's future capital requirement also takes into account the bank's weak capital quality, which reflects the large amount of deferred tax assets the bank has accumulated in the past three years. The negative outlook reflects the possibility that S&P could downgrade Piraeus over the next 18-24 months if it believed it was going to default on its obligations because of insufficient capital or liquidity support. "We could lower the ratings on Piraeus if its access to the EU's extraordinary liquidity support mechanisms, including the emergency lending assistance discount facility at the ECB, and to the ECB itself, were impaired for any reason. This support currently underpins the bank's capacity to meet its financing requirements. In this context, we anticipate that the pressure on the bank's retail funding base caused by prolonged economic recession in Greece may lead to further deposit outflows, despite a mild recovery in recent months. This could, in our opinion, increase the bank's need for additional extraordinary liquidity support from the European authorities," S&P added. S&P could also lower the ratings if it believed that the bank was going to default on its obligations as a result of any developments associated with an impairment in its solvency. S&P could revise the outlook to stable if economic conditions in Greece considerably improved and pressure on Piraeus' fragile asset quality and financial profile eased, or if substantial additional external support materialized. ============= I R E L A N D ============= * IRELAND: Galway Insolvency Rate Rises 50% in February ------------------------------------------------------- Galway Bay fm reports that the rate of insolvencies in Galway increased by 50 percent last month. According to the report, figures compiled by Vision-net showed six firms went bust last month, compared to three in the same period in 2013. Nationally, 93 Irish companies were declared insolvent last month, the report relates. That's down almost a third on the same period last year when 135 insolvencies were recorded. Galway Bay fm reports that the construction sector accounted for 14% of the insolvencies recorded, down from 21.5% in the previous February. This was the biggest improvement recorded by any of the industries this February. In February of 2008, the construction sector accounted for 30% of all insolvencies, the report relays. ========= I T A L Y ========= BERTONE: On Brink of Bankruptcy Following Fiscal Woes ----------------------------------------------------- Ronan Glon at LeftLane reports that Bertone is on the brink of bankruptcy following years of fiscal woes. The company has not issued an official statement about its financial situation but it was noticeably absent from this year's edition of the Geneva Motor Show, LeftLane relates. According to LeftLane, reports circulating around the Italian media indicate some of Bertone's roughly 160 employees haven't been paid for months, making it impossible for them to file their 2013 taxes. Late last year, an administrator appointed by the Italian court was in the process of finding a new buyer for Bertone, LeftLane recounts. An unidentified company based in Turkey had expressed an interest in taking over the design firm and its assets for the relatively low sum of EUR2 million (approximately US$2.7 million) but the deal appears to have fallen through for reasons that remain unknown, LeftLane discloses. Unable to pay its creditors, Bertone's last resort is declaring bankruptcy, LeftLane notes. Italian media outlets are reporting that four or five other parties have voiced an interest in buying the company but none have been identified, LeftLane relays. Once one of Italy's most prominent coachbuilders, Bertone was hit hard by the financial crisis that rocked the European economy in 2008 and it was forced to separate its production arm from its design arm in order to stay afloat, LeftLane states. Bertone is an Italian design house. ===================== N E T H E R L A N D S ===================== BABSON EURO: Moody's Assigns (P)B2 Rating to EUR14.5MM Notes ------------------------------------------------------------ Moody's Investors Service has assigned the following provisional ratings to notes to be issued by Babson Euro CLO 2014-1 B.V. (the "Issuer" or "Babson Euro 2014-1"): EUR [201,250,000] Class A-1 Senior Secured Floating Rate Notes due 2027, Assigned (P)Aaa (sf) EUR [30,000,000] Class A-2 Senior Secured Fixed Rate Notes due 2027, Assigned (P)Aaa (sf) EUR [20,500,000] Class B-1 Senior Secured Floating Rate Notes due 2027, Assigned (P)Aa2 (sf) EUR [30,000,000] Class B-2 Senior Secured Fixed Rate Notes due 2027, Assigned (P)Aa2 (sf) EUR [22,500,000] Class C Senior Secured Deferrable Floating Rate Notes due 2027, Assigned (P)A2 (sf) EUR [19,000,000] Class D Senior Secured Deferrable Floating Rate Notes due 2027, Assigned (P)Baa2 (sf) EUR [31,000,000] Class E Senior Secured Deferrable Floating Rate Notes due 2027, Assigned (P)Ba2 (sf) EUR [14,500,000] Class F Senior Secured Deferrable Floating Rate Notes due 2027, Assigned (P)B2 (sf) Moody's issues provisional ratings in advance of the final sale of financial instruments, but these ratings only represent Moody's preliminary credit opinions. Upon a conclusive review of a transaction and associated documentation, Moody's will endeavor to assign definitive ratings. A definitive rating (if any) may differ from a provisional rating. Ratings Rationale Moody's provisional rating of the rated notes addresses the expected loss posed to noteholders by legal final maturity of the notes in 2027. The provisional ratings reflect the risks due to defaults on the underlying portfolio of loans given the characteristics and eligibility criteria of the constituent assets, the relevant portfolio tests and covenants as well as the transaction's capital and legal structure. Furthermore, Moody's is of the opinion that the collateral manager, Babson Capital Europe Limited ("Babson"), has sufficient experience and operational capacity and is capable of managing this CLO. Babson Euro CLO 2014-1 is a managed cash flow CLO. At least 90% of the portfolio must consist of secured senior obligations and up to 10% of the portfolio may consist of unsecured senior obligations, second-lien loans, mezzanine obligations and high yield bonds. The portfolio is expected to be [50%] ramped up as of the closing date and to be comprised predominantly of corporate loans to obligors domiciled in Western Europe. The remainder of the portfolio will be acquired during the [six] month ramp-up period in compliance with the portfolio guidelines. Babson will manage the CLO. It will direct the selection, acquisition and disposition of collateral on behalf of the Issuer and may engage in trading activity, including discretionary trading, during the transaction's four-year reinvestment period. Thereafter, purchases are permitted using principal proceeds from unscheduled principal payments and proceeds from sales of credit risk obligations, and are subject to certain restrictions. In addition to the eight classes of notes rated by Moody's, the Issuer will issue EUR 43,750,000 of subordinated notes. Moody's has not assigned rating to this class of notes. The transaction incorporates interest and par coverage tests which, if triggered, divert interest and principal proceeds to pay down the notes in order of seniority. Loss and Cash Flow Analysis: Moody's modeled the transaction using CDOEdge, a cash flow model based on the Binomial Expansion Technique, as described in Section 2.3 of the "Moody's Global Approach to Rating Collateralized Loan Obligations" rating methodology published in February 2014. The cash flow model evaluates all default scenarios that are then weighted considering the probabilities of the binomial distribution assumed for the portfolio default rate. In each default scenario, the corresponding loss for each class of notes is calculated given the incoming cash flows from the assets and the outgoing payments to third parties and noteholders. Therefore, the expected loss or EL for each tranche is the sum product of (i) the probability of occurrence of each default scenario and (ii) the loss derived from the cash flow model in each default scenario for each tranche. Moody's used the following base-case modeling assumptions: Par Amount: EUR400,000,000 Diversity Score: 35 Weighted Average Rating Factor (WARF): 2785 Weighted Average Spread (WAS): 4.20% Weighted Average Coupon (WAC): 6.00% Weighted Average Recovery Rate (WARR): 39.75% Weighted Average Life (WAL): 8 years. Moody's has analysed the potential impact associated with sovereign related risk of countries with non-Aaa ceilings As part of the base case, Moody's has addressed the potential exposure to obligors domiciled in countries with local currency country risk ceiling of A1 or below. Following the effective date, and given the portfolio constraints and the current sovereign ratings of eligible countries, such exposure may not exceed 10% of the total portfolio, where exposures to countries local currency country risk ceiling of A3 or below cannot exceed 5% (with none allowed below Baa3). As a result and in conjunction with the current foreign government bond ratings of the eligible countries, as a worst case scenario, a maximum 5% of the pool would be domiciled in countries with Aa3 local currency country ceiling and 5% in A3 local currency country ceiling. The remainder of the pool will be domiciled in countries which currently have a local currency country ceiling of Aaa. Given this portfolio composition, the model was run with different target par amounts depending on the target rating of each class of notes as further described in the methodology. The portfolio haircuts are a function of the exposure size to peripheral countries and the target ratings of the rated notes and amount to 0.75% for the class A notes, 0.50% for the Class B notes, 0.38% for the Class C notes and 0% for Classes D, E and F. Stress Scenarios: Together with the set of modelling assumptions above, Moody's conducted an additional sensitivity analysis, which was an important component in determining the provisional rating assigned to the rated notes. This sensitivity analysis includes increased default probability relative to the base case. Below is a summary of the impact of an increase in default probability (expressed in terms of WARF level) on each of the rated notes (shown in terms of the number of notch difference versus the current model output, whereby a negative difference corresponds to higher expected losses), holding all other factors equal: Percentage Change in WARF: WARF + 15% (to [3203] from 2785) Ratings Impact in Rating Notches: Class A-1 Senior Secured Floating Rate Notes: 0 Class A-2 Senior Secured Floating Rate Notes: 0 Class B-1 Senior Secured Floating Rate Notes: -2 Class B-2 Senior Secured Floating Rate Notes: -2 Class C Senior Secured Deferrable Floating Rate Notes:-2 Class D Senior Secured Deferrable Floating Rate Notes: -1 Class E Senior Secured Deferrable Floating Rate Notes: -1 Class F Senior Secured Deferrable Floating Rate Notes: [0] Percentage Change in WARF: WARF +30% (to [3621] from 2785) Class A-1 Senior Secured Floating Rate Notes: -1 Class A-2 Senior Secured Floating Rate Notes: -1 Class B-1 Senior Secured Floating Rate Notes: -3 Class B-2 Senior Secured Floating Rate Notes: -3 Class C Senior Secured Deferrable Floating Rate Notes:--4 Class D Senior Secured Deferrable Floating Rate Notes: -3 Class E Senior Secured Deferrable Floating Rate Notes: -1 Class F Senior Secured Deferrable Floating Rate Notes: -2 Methodology Underlying the Rating Action: The principal methodology used in this rating was "Moody's Global Approach to Rating Collateralized Loan Obligations" published in February 2014. Factors that would lead to an upgrade or downgrade of the rating: The rated notes' performance is subject to uncertainty. The notes' performance is sensitive to the performance of the underlying portfolio, which in turn depends on economic and credit conditions that may change. Babson's investment decisions and management of the transaction will also affect the notes' performance. =========== R U S S I A =========== LEVOBEREZHNY OJSC: Fitch Assigns 'B+' IDR; Outlook Stable --------------------------------------------------------- Fitch Ratings has assigned Novosibirsk Social Commercial Bank Levoberezhny OJSC a Long-Term Issuer Default Ratings (IDR) at 'B+' with a Stable Outlook. Key Rating Drivers Levoberezhny's Long-term IDRs are driven by its 'b+' VR, reflecting the bank's healthy performance, adequate asset quality and sound liquidity position. The ratings also reflect the bank's moderate capitalization and narrow franchise, concentrated in the Novosibirsk Region of Siberia. Levoberezhny's sister bank, Primsotsbank (B+/Stable) is currently neutral for Levoberezhny's ratings, given the two banks' comparable standalone profiles. Levoberezhny reported a 31% annualized return on average equity in 9M13, which was underpinned by the currently well-performing retail portfolio (56% of gross loans at end-9M13) and sound non- interest income, mainly comprising fees and commissions for client settlement operations. The latter contributed 31% of the bank's revenues in 9M13. Levoberezhny outperforms its closest peers in terms of profitability. The bank's asset quality is adequate, with non-performing loans (NPLs, more than 90 days overdue) accounting for 7.1% of gross loans, and fully covered by impairment reserves (LIR), at end- 9M13. Restructured exposures made up a further 2.3%. Corporate and SME loans (44% of the total book) are moderately concentrated, with the largest 25 borrowers comprising 52% of this portfolio, or 1.6x Fitch core capital (FCC). Fitch views most of these as moderate risk, as exposures are typically short- term and amortizing, and well covered by hard collateral. The SME portfolio (25% of gross loans) is a rating constraint, as the current margin of safety (calculated as the net interest margin less allocated operating expenses) is only 6.7%, while most Russian banks reported above 10% losses on SME books in the 2008-2009 crisis. Levoberezhny adopts a reasonably conservative approach to retail lending. Loans to salaried clients represent about half of the total retail book, and another 25% of borrowers have a positive previous credit history with the bank. Fitch calculates the margin of safety in the unsecured retail as 14%, while losses in this segment have been significantly lower than this to date, running at 8.3% (annualized) in 9M13. The bank is predominantly deposit-funded, with customer balances accounting for 97% of liabilities at end-1M14, of which 70% were from retail clients. About 80% of retail deposits fall under the deposit insurance system, contributing to funding stability. The bank maintains a significant liquidity cushion, with liquid assets (comprising cash and equivalents, net short-term interbank placements and securities eligible for repo with the Central Bank) net of small wholesale repayments equal to 23% of customer accounts at end-1M14. At end-1M14, the bank's regulatory capital adequacy ratio (CAR) stood at 12.7%. This allowed the bank to increase its LIR by only 4% to a maximum 12% before the regulatory CAR would have fallen to the statutory 10% minimum. However, Levoberezhny's capitalization is underpinned by its internal capital generation. The bank's annualized pre-impairment operating profit was equal to 7.4% of average loans in 9M13. Capital could also be supported by the bank's ability to deleverage, with average monthly proceeds from loan repayments equal to 9% of gross loans. The Support Rating of '5' and Support Rating Floor of 'No Floor' reflect Fitch's view that support from the bank's shareholders or the Russian state cannot be relied upon, in the latter case due to Levoberezhny's low systemic importance. Rating Sensitivities Upside potential for the ratings is currently limited. Downward pressure could stem from a marked deterioration in asset quality, a sharp drop in profitability, significantly tighter capital ratios or a weakening of Primsotsbank's credit profile. The Support Rating could be upgraded in case of acquisition by a stronger shareholder. Bank Levoberezhny is a small privately-owned regional bank, ranked 129 by assets and 140 by equity in Russia at end-2013. The bank is controlled by Dmitry Yarovoy, who is also the majority shareholder of Primsotsbank, a bank of similar size operating primarily in Primorskiy Kray. The following ratings have been assigned to Bank Levoberezhny: Long-term foreign and local currency Issuer Default Ratings (IDRs): 'B+', Outlook Stable Short-Term foreign currency IDR: 'B' National Long-term Rating: 'A-(rus)', Outlook Stable Viability Rating: 'b+' Support Rating: '5' Support Rating Floor: 'No Floor' VOENTELECOM: Moscow Court Terminates Bankruptcy Proceedings ----------------------------------------------------------- PRIME, citing RIA Novosti's agency for legal and court information RAPSI, reports that the Moscow Arbitration Court has terminated its proceedings initiated by collection company Yurkonsaltservis' lawsuit seeking to declare telecom operator Voentelecom bankrupt. According to PRIME, Yurkonsaltservis, as cited by RAPSI, said that Voentelecom owed a total of RUR4.768 million to the debt collection company, but the operator submitted documents proving that it had fully repaid the debt. Voentelecom, affiliated with the Defense Ministry, comprises 27 branches across the country, including one design institute of communications and nine military plants. ========= S P A I N ========= ALMIRALL SA: S&P Assigns Preliminary 'BB-' CCR; Outlook Positive ---------------------------------------------------------------- Standard & Poor's Ratings Services said that it has assigned its 'BB-' preliminary long-term corporate credit rating to Spain- based pharmaceutical company Almirall S.A. The outlook is positive. At the same time, S&P assigned its preliminary 'BB-' issue rating to Almirall's EUR325 million senior unsecured notes. The preliminary recovery rating on this instrument is '3', indicating S&P's expectation of meaningful (50%-70%) recovery in the event of payment default. Final ratings will depend on S&P's receipt and satisfactory review of all final transaction documentation. Accordingly, the preliminary ratings should not be construed as evidence of final ratings. If Standard & Poor's does not receive final documentation within a reasonable time frame, or if final documentation departs from materials reviewed, it reserves the right to withdraw or revise its ratings. Potential changes include, but are not limited to, utilization of bond proceeds, maturity, size and conditions of the bonds, financial and other covenants, and security and ranking of the bonds. The preliminary rating on Almirall reflects S&P's assessments of the group's "fair" business risk profile and "intermediate" financial risk profile. Together, S&P's assessments lead it to apply an anchor of 'bb+' to Almirall. The anchor is S&P's starting point for assigning an issuer credit rating under its corporate criteria. S&P's 'BB-' preliminary rating on Almirall is two notches below the anchor, reflecting the adjustments made for our "negative" financial policy modifier and S&P's "negative" comparable ratings analysis. S&P's view of the financial policy captures the event risk of a sizable acquisition beyond its current base-case expectations. S&P's comparable rating adjustment incorporates its view that the group's business risk is at the lower end of the "fair" category, primarily driven by weaker margins compared with the industry average for ethical drug companies. The positive outlook reflects S&P's view that we could raise the rating if Almirall's performance picks up significantly, both in terms of revenues and margins, from particularly weak levels in recent years. The positive outlook also incorporates S&P's view that the group's credit metrics, using weighted average calculations as per its criteria, will remain in line with an intermediate financial score (typically including an adjusted debt-to-EBITDA ratio of 2x-3x and FFO to debt of 20%-35%). S&P could remove the negative comparable ratings analysis modifier if the launch of Almirall's main drug Eklira into new markets continues strongly and if a successful integration of the recently-acquired Aqua enables group sales to grow toward EUR1 billion over the next 12-18 months, while Standard & Poor's adjusted EBITDA margins improve to close to 20%, from below 8% in 2013 for Almirall on a stand-alone basis. S&P will closely monitor developments regarding Eklira and the group's combo products, which would support its base-case assumption of sustainable growth in operations beyond 2015. S&P could revise the outlook to stable if Almirall's performance does not materially improve in 2014 and 2015 to the levels outlined above. S&P believes that this would most likely result from stronger-than-anticipated competition for Eklira from bigger competitors with deeper marketing and financial resources, such as Novartis AG. ISOLUX CORSAN: S&P Affirms 'B/B' Corporate Credit Ratings --------------------------------------------------------- Standard & Poor's Ratings Services said it had affirmed its 'B' long-term and 'B' short-term corporate credit ratings on Spain- based engineering and construction company Isolux Corsan S.A. The outlook is stable. At the same time, S&P affirmed its 'B' issue rating on Isolux's proposed EUR600 million senior notes. The recovery rating on these notes remains unchanged at '4', reflecting S&P's expectation of average (30%-50%) recovery in the event of a payment default. The rating action reflects S&P's assessment of the Isolux's "fair" business risk profile and "highly leveraged" financial risk profile, as S&P's criteria define these terms. This predominantly reflects the company's limited track record in terms of a robust and stable operating performance and our assessment of its liquidity situation as "less than adequate." Overall, S&P views the increased bond amount as positive for the financial risk profile, as Isolux will refinance most if its short-term debt, enabling heightened headroom on syndicating facilities in 2014 if the company is successful with its plans. Therefore, S&P will likely reassess the liquidity as "adequate" once the refinancing is fully executed. In S&P's base case, it assumes: -- A healthy revenue increase of more than 10% in 2014. This follows predominantly new concessions recently taken into operations, or about to be taken into operations. -- Consolidated EBITDA margin of about 17%-18%, supported by the high and stable margins from the concessions. This is assuming no change in the current consolidation approach for concessions. -- Capital expenditures of around EUR550 million-EUR600 million in 2014, which S&P expects to reduce dramatically in 2015. Based on these assumptions, S&P arrives at the following credit measures: -- Consolidated EBITDA margin near 17%-19%. -- Adjusted debt to EBITDA of 7.5x-8.0x. -- FFO to debt of about 2.5%-4%. The stable outlook reflects S&P's expectation that Isolux's adjusted debt-to-EBITDA ratio, pro forma the transaction, would be about 7.5x-8.0x at year-end 2014. S&P also assumes that the company will generate negative FOCF for the current financial year, but will break even in 2015. Thereafter, S&P expects a steep decrease in capital spending, implying some restored ability to see a gradual debt reduction. If Isolux were to build a longer track record with positive FOCF, leading to stronger credit metrics on a sustainable basis -- such as adjusted FFO to debt in the 8%-12% range -- S&P could potentially raise the ratings. Furthermore, S&P understands that changes in International Financial Reporting Standards in the coming year may lead to a large share of concessions debt no longer being consolidated. Once this effect is fully visible in the audited accounts, it may boost our assessment of the company's financial risk profile if S&P stopped consolidating the concessions. However, it will likely be offset by a negative revision of the business risk assessment, as S&P would then include only dividends from concessions in our adjusted earnings base, rather than the fully consolidated earnings, as is currently the case. S&P could lower the ratings if weaker-than-expected operating performance or an unforeseen event, such as cost overruns or execution issues, pushed adjusted debt to EBITDA above 10x or if capital expenditures were much higher than S&P currently expects. S&P could also lower the ratings if liquidity weakened to the extent that S&P no longer viewed it as "less than adequate," or in the case of covenant pressure. ===================== S W I T Z E R L A N D ===================== * UBS Said to Seek Immunity in Currency-Rigging Probes by EU, US ---------------------------------------------------------------- Lindsay Fortado, Keri Geiger and David McLaughlin, writing for Bloomberg News, reported that UBS AG, trying to reprise its success in limiting fines in a probe of interest-rate rigging, is seeking immunity in the U.S. and European Union as part of the global investigation of currency markets, two people with knowledge of the case said. According to the report, UBS saved itself billions of euros in fines in December by disclosing to the EU its role in manipulating the London Interbank offered rate. Now, the bank aims to be the first to report its own conduct in currency markets to European and American regulators, said the people, who requested anonymity because the matter isn't public. The Zurich-based bank is making its bid for leniency as at least a dozen regulators probe allegations that traders colluded to rig benchmarks in the $5.3 trillion-a-day currency market, the report said. The world's biggest banks are under scrutiny, and at least 21 people have been fired or suspended as a result. "They've been through the drill and understand the benefits of cooperation," Douglas Tween, a lawyer at Baker & McKenzie LLP and a former Justice Department attorney, told Bloomberg. "You want to limit your exposure as much as you possibly can." UBS said in a filing last year that it began a review of its currency operations in June after media reports, first by Bloomberg News, on potential manipulation of the WM/Reuters rates used by companies and investors around the world. =========== T U R K E Y =========== DOGUS HOLDING: S&P Revises Outlook to Neg. & Affirms 'BB' Rating ---------------------------------------------------------------- Standard & Poor's Ratings Services said it revised its outlook on Turkey-based diversified holding company, Dogus Holding A.S., to negative from stable. At the same time, S&P affirmed its 'BB/B' long- and short-term credit ratings on the company. The outlook revision reflects the steady rise in Dogus' net debt and loan-to-value (LTV) ratio over the past several quarters. Between 2011 and 2013, Dogus' consolidated net debt tripled to about US$3.2 billion -- in 2013 only, it increased by US$1.2 billion. This primarily reflects the ongoing construction of the company's hydro electrical power plant projects and large investments in tourism and entertainment. S&P believes that the company's diverse asset base and the consolidation of financial institutions reduce the significance of the consolidated ratios. Therefore, S&P currently analyzes Dogus' financial risk profile using a balance sheet approach (on a portfolio basis). Nevertheless, the implementation of International Financial Reporting Standard (IFRS) 11 requires the equity consolidation of the stake in Turkiye Garanti Bankasi A.S. (Garanti; BB+/Negative/--), rather than the current pro rata consolidation. In S&P's view, this will raise the relevance of and insight gained from using consolidated statements. However, S&P treats the industrial subsidiaries' net debt as recourse to the holding parent company due to local market expectations, meaningful debt amounts that are guaranteed by the parent company, and S&P's view that Dogus would support its subsidiaries financially if necessary. S&P has updated its approach to add subsidiaries' net debt on the asset side as well, as part of S&P's LTV calculation. S&P estimates the adjusted equity market value of Dogus' investment portfolio at approximately US$7.8 billion on March 13, 2014 (assuming stable unlisted asset values compared with Dec. 31, 2013). On the basis of net debt of about US$3.2 billion (including US$2.6 billion at the subsidiaries' level), S&P calculates LTV at close to 31% on the same date. Consequently, the company's current debt position is weak compared with S&P's 30% ceiling for the 'BB' rating. This shows how S&P's LTV ratio for the company currently hinges on fluctuations in the equity markets. In the context of unattractive economic prospects for Turkey, to which Dogus' portfolio companies are largely exposed, asset valuations could remain volatile and the turnaround of more fragile businesses subdued. Continued modest performance or cash burn of a number of segments would place financial pressure on the parent company if loans or equity infusions became necessary. The ratings on Dogus reflect S&P's view of its "weak" business risk profile and "intermediate" financial risk profile. The ratings are primarily constrained by the high exposure of Dogus' portfolio companies to Turkey and the company's exposure to foreign exchange swings, given that a large portion of its financing is denominated in U.S. dollars. The negative to modest profitability achieved in a number of Dogus' activities also weighs on the ratings. S&P also takes into consideration the inherent execution risks related to large infrastructure projects in the energy and construction businesses. These weaknesses are mitigated by the overall adequate credit quality of Garanti and that Dogus has influence over its subsidiaries' strategic decisions due to the company's controlling stakes. In addition, S&P expects ongoing investment activity to progressively increase the diversification of asset and dividend income away from the financial services sector, which is currently dominant. S&P assess Dogus' management and governance as "fair" under its criteria. The negative outlook reflects S&P's view that Dogus' financial headroom for the current ratings is thin, questioning the company's ability to maintain an LTV ratio below about 30%, which S&P views as commensurate with its 'BB' long-term rating. S&P could lower the ratings if its LTV calculation for the company does not stay within its threshold for the current rating. This could happen in the absence of a pick-up in equity valuations, or if the company does not abate its dynamic investment phase initiated two years ago. Conversely, S&P could revise the outlook to stable if the Turkish economy performs better in 2014 than it currently forecasts, and if this had a positive bearing on Dogus' LTV and on the operating performance of its main subsidiaries. ============= U K R A I N E ============= UKRAINE: Western Europe Companies on Edge Following Crimea Vote --------------------------------------------------------------- Lukas Alpert, Jan Hromadko and Friedrich Geiger at The Wall Street Journal report that foreign businesses are thinking twice about the market after Crimeans voted Sunday to secede from Ukraine and join Russia. Ford Motor Co. is reassessing its Russian joint venture as relations sour between the West and Russia, while Pirelli & Co. on Monday announced a US$695 million deal in which Russian state-owned oil company OAO Rosneft will become the Italian tire maker's largest shareholder, the Journal relates. According to the Journal, these deals indicate how deeply the business ties between Russia and Europe run. Western companies, from car makers to yogurt producers, have invested billions of dollars in Russia over the past 20 years and have much at stake, the Journal says. Recently, though, earnings have been squeezed by Russia's slowing economy, weakening currency and unpredictable legal system, the Journal relays. The landscape became riskier still on Monday as U.S. and European Union officials imposed sanctions against Russian and Ukrainian officials, the Journal notes. The West hasn't imposed broad trade penalties, the Journal states. "Tough economic sanctions would quickly weaken not only the Russian economy, but also Europe's economy," the Journal quotes Eckhard Cordes, chairman of the Eastern Committee of German Business, a trade group focused on economic relations with the former Soviet Union, as saying. Companies in Western Europe are getting edgy, according to the Journal. Concerns are growing among members of the German-Russian Chamber of Commerce in Moscow, said chamber Chairman Michael Harms, the Journal relates. Germany is one of Russia's largest foreign investors and trading partners, the Journal states. Companies increasingly are seeking advice on how to handle Russia's weakening economy and ruble, the Journal discloses. "And now we have a problem of a massive lost in trust in the Russian government, which is further exacerbated by concerns over how potential economic sanctions are going to affect business," Mr. Harms, a cited by the Journal, said. According to the Journal, Uwe Schwarz, a member of Germany's Parliament from Lower Saxony, said that while businesses in his region hadn't expressed concerns about the situation in Ukraine, the consequences of sanctions "can't be predicted." Russia's actions were "incomprehensible" for "knowingly damaging economic relations and [its] own economic strength," he said. =========================== U N I T E D K I N G D O M =========================== GREENWAVE BIO: High Court Enters Wind Up Order ---------------------------------------------- Greenwave Bio Ltd, a company that misled investors by claiming to sell bio-fuel technologies and promising an 800 per cent return on investment, was wound up on public interest grounds in the High Court on Feb. 24, 2014. The winding up order follows an investigation by the Insolvency Service. Shares in Greenwave had been listed on the now defunct First Quotation Board of the Frankfurt Stock Exchange. It claimed to be a holding company for bio-fuel technologies in Central and South American waste energy projects. The company offered investors 'projected lifetime returns of over 800 per cent' and invited them to 'tap into a 30 per cent year- on-year growth industry'. However, the investigation found no evidence of Greenwave having any involvement in the bio-fuel or waste management industries. The Official Receiver has been appointed as the company liquidator. His role is to protect and realise the assets of the company and investigate the conduct of those operating the company. Commenting on the case, David Hill, a Chief Investigator at the Insolvency Service, said: "Greenwave misled investors by claiming to be part of an international company and exaggerating the rate of return on investment. This would have attracted investors keen to invest in such a high yielding and ethical company. "The winding up of this company shows that the Insolvency Service will not stand to one side while the public gets scammed by chancers riding on the back of ethical investment." Deputy Judge J Baldwin QC, who made the winding up order, said the claims made by the company had been wholly misleading and likely to have duped potential traders and persons interested in the company. The court also heard that the persons behind Greenwave may be in the process of attempting to move their scam operations to another jurisdiction, as Greenwave's website recently recorded that it was a Canadian Registered Company. The petition to wind up the company was presented in the High Court on July 11, 2012, under the provisions of section 124A of the Insolvency Act 1986 following confidential enquiries carried out by Company Investigations of the Insolvency Service under section 447 of the Companies Act 1985. HEALTHCARE SUPPORT: S&P Lowers Sr. Secured Debt Rating to 'BB-' --------------------------------------------------------------- Standard & Poor's Ratings Services said that it lowered to 'BB-' from 'BB+' its long-term issue ratings on the senior secured debt issued by U.K.-based special-purpose vehicle Healthcare Support (Newcastle) Finance PLC (ProjectCo). At the same time, S&P placed the ratings on CreditWatch with developing implications. The recovery rating on these debt instruments is unchanged at '2', reflecting S&P's expectation of substantial (70%-90%) recovery in the event of a payment default. The debt comprises GBP197.82 million senior secured bonds due 2041 and a GBP115.0 million senior secured European Investment Bank loan due 2038. Both debt tranches benefit from an unconditional and irrevocable payment guarantee of scheduled interest and principal provided by Syncora Guarantee U.K. Ltd. (Syncora). According to Standard & Poor's criteria, a long-term rating on a monoline-insured debt issue reflects the higher of the rating on the monoline and the Standard & Poor's underlying rating (SPUR). As Syncora is not rated by Standard & Poor's, the long-term ratings on the above issues reflect the SPURs. The rating actions reflect S&P's lack of visibility on a potential settlement of the currently outstanding disputes between the Trust, construction contractor Laing O'Rourke (LOR), and ProjectCo over the completion of the clinical office block (COB) at the Royal Victoria Infirmary (RVI) in Newcastle. In turn, this means the likelihood of a settlement is still uncertain as the longstop dates under the construction contract (April 28, 2014), the financing agreements (July 28, 2014), and the project agreement (Oct. 28, 2014) are approaching, and the chances of a termination of the project are consequently increasing. While discussions have been and are still ongoing, the construction contractor has been incurring liquidated damages since the end of May 2012, thereby having no significant financial impact on ProjectCo to date. S&P assess ProjectCo's construction-phase stand-alone credit profile as 'bb-'. This reflects S&P's view of the very negative status of the ongoing disputes with respect to the COB. The disputes over the COB at the RVI are due to the failure to achieve its completion and handover. S&P understands that discussions over the COB are centered on the Trust taking back responsibility for the future maintenance of the building once the independent tester has certified construction as finally complete. If the Trust takes back responsibility for the COB, the building would be removed from the scope of the project. To achieve certification of completion, there are some design issues that will require specific agreement from the Trust because they do not currently meet the required specifications. S&P understands that the removal of phase 9 works from the project could also form part of any settlement. Phase 9 is the final phase of construction and comprises various external works, most of which are complete, except demolitions. The demolitions would allow final completion to be reached more quickly than originally planned, although S&P believes it is increasingly unlikely that such works can be completed before the longstop date in the project agreement. S&P understands that the Trust's acceptance of the removal of the COB and phase 9 from the project is contingent on its agreement on a reduction in the project's unitary charge reflecting the change in the scope of the project. S&P also understands that ProjectCo has agreed to contribute to the financial settlement, despite there being no contractual obligation to do so. However, S&P understands that the Trust is not ready to accept the offer tabled by LOR and ProjectCo. S&P believes that the dispute will not affect ProjectCo financially since it is receiving financial penalties from the construction contractor. However, S&P believes that these disputes could ultimately lead to a contractual termination of the construction contractor on April 28, 2014, the longstop date under the construction contract, for failing to achieve construction completion. Consequently, this would also increase the chances of termination of the project agreement as the longstop date of Oct. 28, 2014, draws closer. The debt was issued to finance the design and construction of two new facilities, Freeman Hospital and RVI, for the Trust. Freeman Hospital was completed on July 7, 2008, and RVI was scheduled for completion on June 24, 2013. Under a 38-year project agreement it entered into on May 4, 2005, ProjectCo will be providing maintenance and certain nonclinical services after construction is complete. The project will rationalize the Trust's sites in Newcastle and provide better facilities for the patients in its catchment area. The CreditWatch developing placement reflects S&P's view of the potential volatility in the position of the project, due to the lack of visibility on a potential settlement of the currently outstanding disputes. Downside scenario S&P could lower the ratings, possibly by more than one notch, if no settlement with respect to the outstanding disputes seems near, and the longstop date of April 28, 2014, under the terms of the construction agreement passes. S&P would lower the ratings, likely by more than one notch, if this situation remained the case, and the longstop date of July 28, 2014, under the terms of the financing agreements was imminent. Upside scenario Alternatively, S&P could raise the ratings if the outstanding disputes are resolved, and the terms of the settlement reached do not have a material and negative impact on the financial position of the project. LOWELL GROUP: Moody's Rates GBP115MM Senior Secured Bond 'B1' ------------------------------------------------------------- Moody's Investors Service has assigned a B1 rating with a stable outlook to the GBP115 million long term, senior secured bond issued by Lowell Group Financing plc, a subsidiary of Lowell Finance Holdings Limited (Lowell). Moody's rating on Lowell's bond issuance confirms the provisional rating assigned on March 3, 2014. The final terms and conditions of the senior secured bond issuance, which was fully placed as at March 11, 2014, are in line with the draft documentation reviewed for the provisional (P)B1 rating assigned on March 3, 2014. Moody's notes that the bond issuance was upsized from the initial GBP100 million as indicated in its press release on March 3, 2014 Ratings Rationale The B1 rating reflects Lowell's strong market positioning, stable operating cash flow and satisfactory level of debt service capability and tangible common equity. However, these factors are partly constrained by the firm's monoline business model, concentrated debt maturity profile, supplier (i.e. debt originators) concentration and model risk in terms of valuation and pricing of its purchased debt portfolio (i.e. the risk of the models over-estimating projected cash flow generation of a portfolio of purchased debt). The rating also reflects the increase in gross leverage following the bond issuance which limits Lowell's financial flexibility. As a result, Moody's will closely monitor any further increase in gross and net leverage and consider whether it is of a magnitude to exert negative pressure on the ratings. Following the completion of the bond issuance, Moody's expects Lowell to have an increased level of leverage which is still consistent with the B1 rating levels. However, gross leverage is at the higher end of the rating's range and Moody's has also noted the further concentration in terms of the laddering of debt maturities, which could result in refinancing risk in 2019 when Lowell's bonds mature. What Could Change The Rating Up / Down Upward rating pressure could arise from a sustained improvement in the leverage metrics (debt-to-adjusted EBITDA) to under 2.0x, while maintaining other financial metrics and ratios at current levels. The rating could come under downward pressure due to (i) significant deterioration in income from operations (after interest expense) and cash flow from operations, stemming from factors such as underperforming collections productivity, underperforming portfolio acquisitions and lower than forecast collections; or (ii) an increase in leverage or sustained decline in operating performance, leading to a debt ratio which is higher than 4.0 times adjusted EBITDA or a tangible common equity-to- tangible managed assets ratio which is below 8%; or (iii) significant decline in interest coverage, with an adjusted EBITDA-to-interest expense ratio below 3.5x to 1.0x. The principal methodology used in this rating was Finance Company Global Rating Methodology published in March 2012. ROWECORD ENGINEERING: AIC Takes Over Former Steel Site ------------------------------------------------------ BBC News reports that AIC Steel Group has taken over the former Rowecord steel site in Newport, creating 120 new jobs. AIC will make the 28,000 sqm (300,000 sq.ft.) plant on Usk Way its UK manufacturing hub, BBC discloses. Rowecord, which built the roof of the Olympic aquatic center in London, went into administration in April 2013, making 430 people redundant and owing GBP24 million to creditors, BBC relates. A number of its former employees have already been recruited by AIC Steel, BBC says. Administrators for Rowecord, which was the biggest steel contractor in Wales, blamed its collapse on the loss of money on contracts and the general economic climate, BBC relays. Rowecord is a Newport-based engineering company. ********* 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 * * *