/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/160617.mbx T R O U B L E D C O M P A N Y R E P O R T E R E U R O P E Friday, June 17, 2016, Vol. 17, No. 119 Headlines A Z E R B A I J A N AZERBAIJANI UNIBANK: Fitch Affirms Then Withdraws 'CCC' Ratings B E L G I U M OPTIMA: Declared Bankrupt by Gent Court, License Revoked SARENS BESTUUR: S&P Lowers CCR to 'BB-', Outlook Stable I R E L A N D PETROCELTIC INTERNATIONAL: Hearing on Survival Scheme Adjourned N E T H E R L A N D S AI AVOCADO: S&P Assigns 'B' Rating on New EUR230MM 1st Lien Loan EA PARTNERS: Fitch Rates $500MM Notes Due 2021 'B-' S P A I N BANCO POPULAR ESPANOL: Egan-Jones Hikes Sr. Unsec. Ratings to BB FONCAIXA FTGENCAT 4: Fitch Raises Rating on Class D Notes to 'BB' S W E D E N VIKING SUPPLY: Norseman Offshore Withdraws Bankruptcy Petition U N I T E D K I N G D O M ATLANTICA YIELD: S&P Affirms 'B+' CCR, Outlook Stable BHS GROUP: Green Apologizes for Collapse, To Address Pension Woes BHS GROUP: Documents Reveal Role of Goldman Sachs Execs in Sale FAB UK 2004-1: Fitch Affirms 'CCsf' Ratings on 3 Note Classes X X X X X X X X * Atradius Warns for Insolvencies in Eurozone Periphery * PJT Partners, Kirkland & Ellis Join Brexit Breakfast Seminar * BOOK REVIEW: Oil Business in Latin America: The Early Years ********* =================== A Z E R B A I J A N =================== AZERBAIJANI UNIBANK: Fitch Affirms Then Withdraws 'CCC' Ratings --------------------------------------------------------------- Fitch Ratings has affirmed Azerbaijan-based Unibank Commercial Bank's (Uni) ratings and simultaneously withdrawn them. Fitch has chosen to withdraw the ratings of Uni for commercial reasons. KEY RATING DRIVERS Fitch has affirmed the ratings of Uni prior to withdrawal due to limited changes to its credit profile since the last rating action in May. On May 27, 2016, Fitch downgraded Uni's Long-Term Issuer Default Rating (IDR) to 'RD' and then upgraded the rating to 'CCC' on completion of a distressed debt exchange. RATING SENSITIVITIES Not applicable The following ratings have been affirmed and withdrawn: Long-Term Issuer Default Rating: 'CCC' Short-Term Issuer Default Rating: 'C' Viability Rating: 'f' Support Rating: '5' Support Rating Floor: 'No Floor' ============= B E L G I U M ============= OPTIMA: Declared Bankrupt by Gent Court, License Revoked -------------------------------------------------------- Adrien Paredes-Vanheule at Investment Europe, citing Belgian newspaper Le Soir, reports that Belgian bank Optima has been declared bankrupt on June 15 by the commercial court in Gent. Optima initiated a procedure earlier in June to renounce its banking license since the firm has decided to drop its traditional banking activities, deposits having slumped dramatically since 2014, Investment Europe recounts. Other factors having pushed Optima to cut its banking services include difficulties to meet Bale III's requirements and the lasting low interest rate environment, Investment Europe discloses. Le Soir explains that the bank still tallies thousands of clients whose accounts have been blocked since last week by the National Bank of Belgium, Investment Europe relays. SARENS BESTUUR: S&P Lowers CCR to 'BB-', Outlook Stable ------------------------------------------------------- S&P Global Ratings lowered its long-term corporate credit rating on Belgium-based Sarens Bestuur N.V. to 'BB-' from 'BB'. In addition, S&P is assigning its 'BB- long-term corporate credit rating to 100%-owned financing subsidiary Sarens Finance Co N.V. (Sarfin NV). The outlook is stable. S&P also lowered to 'BB-' from 'BB' its issue rating on the group's EUR125 million senior unsecured notes, issued by Sarfin NV. The recovery rating on this debt instrument is unchanged at '3', indicating S&P's expectation of meaningful (50%-70%) recovery in the event of a payment default. "The downgrade reflects our view that Sarens' credit metrics for the fiscal year 2016 are likely to be weaker than we previously forecast. More specifically, we anticipate debt to EBITDA of about 4.6x and FFO to debt of about 15%-16% for fiscal 2016, gradually strengthening through 2017. This is due to persistently challenging trading conditions and project delays in some of the group's end markets, specifically the oil and gas and commodity industries, which have resulted in lower-than-expected revenues and absolute EBITDA. This has also led to increased pricing pressure in other industries in which Sarens and its direct competitors are active," S&P said. Sarens is exposed to several particularly cyclical and volatile end markets, which has resulted in revenue contraction and absolute EBITDA declines in the past, when demand has suddenly fallen. The group's recent rapid expansion into countries that S&P considers carry higher risk could increase volatility of demand in the future. S&P continues to assess the group's business risk profile as fair. Sarens is a leading global provider of large crane equipment, servicing a diverse range of industries and clients. The group owns one of the world's most extensive fleets of large cranes and has a strong track record and reputation. S&P considers there are high barriers to entry for potential competitors in this niche market. The group's wide geographic and end-market diversity reduces the cyclicality that S&P sees in many equipment rental providers. However, geographic diversity also increases logistical and subcontracting costs. The group's cranes are always supplied with drivers and, if required, a specialist team of engineers and support workers to assist the build-in and build-out process as well as advise end clients on site. These factors lead to lower margins compared with more- traditional equipment rental companies. S&P's base case for fiscal 2016 assumes: -- Revenue contraction of about 4% to about EUR570 million. -- EBITDA margins of about 26%-27%. Based on these assumptions, S&P arrives at these credit measures: -- S&P Global Ratings-adjusted debt to EBITDA of about 4.6x at year-end fiscal 2016, improving to about 4.1x at fiscal year-end 2017; and -- FFO to debt of about 15% and 17%, respectively, over the same period. Compared with many other issuers that have a fair business risk profile, Sarens' business offering is quite niche. It continuously manages the age, size, location, and composition of its fleet of cranes to successfully maintain a healthy project pipeline and cash flows. The group is very capital intensive and currently exhibits below average return on capital. S&P considers Sarens' operating cash flow to be sufficient to cover debt service, working capital requirements, and capital spending for maintenance. Historically, the group has invested heavily to expand its global fleet and meet growing demand, resulting in negative free operating cash flow. This trend has reversed in the past 12 months and S&P considers management's ability to pare back capital expenditure (capex) rapidly when demand slows as an important factor for the rating. The stable outlook reflects S&P's view that Sarens will comfortably maintain credit metrics commensurate with an aggressive financial risk profile, and that these metrics will gradually improve as end markets recover. To maintain a 'BB-' rating, S&P expects Sarens to exhibit debt to EBITDA trending toward 4x and FFO to debt trending toward 20%. S&P could lower the ratings on Sarens if its debt to EBITDA and FFO to debt were to weaken toward the lower end of its aggressive financial risk profile, specifically toward 5x and 12%, respectively. This could happen if market conditions, specifically in oil and gas and commodities, are weaker than S&P expects for the next 12 months. S&P could also lower the ratings if Sarens' liquidity were to weaken beyond S&P's base case, specifically if it anticipated that headroom under covenants were to fall to below 15%. S&P could raise the ratings if Sarens' credit metrics recover to a level commensurate with a significant financial risk profile, specifically if the company were to sustain FFO to debt of more than 20% and debt to EBITDA of less than 4x, and if S&P believes that near-to-mid-term macroeconomic and industry conditions support those improved levels. ============= I R E L A N D ============= PETROCELTIC INTERNATIONAL: Hearing on Survival Scheme Adjourned --------------------------------------------------------------- Ann O'Loughlin at Irish Examiner reports that a hearing aimed at getting High Court approval for a survival scheme Petroceltic has been adjourned after day-long talks over employees concerns about the survival proposals failed to end in agreement. According to Irish Examiner, the hearing was set to open on June 16 by which time lawyers for the employees said they hoped agreement might be achieved. All senior staff at Petroceltic had voted against the survival proposals put to them by examiner Michael McAteer at creditors meetings which provided they would get just 5% of monies owed under "change of control" clauses in their contracts, Irish Examiner recounts. About 30 staff are owed some EUR3.6 million, Irish Examiner discloses. Secured lenders and other creditors are expected to either support the scheme or adopt a neutral position, Irish Examiner states. The examiner's application for approval of the scheme was due to open before Mr. Justice Brian McGovern on June 15 but was adjourned at the outset to facilitate talks arising from the employees concerns, Irish Examiner recounts. Michael Collins, for the examiner, said, while there had been optimism about a resolution, that had not worked and he was instructed to proceed immediately with the application for approval, Irish Examiner relays. Petroceltic International is a Dublin-based oil and gas explorer. ===================== N E T H E R L A N D S ===================== AI AVOCADO: S&P Assigns 'B' Rating on New EUR230MM 1st Lien Loan ---------------------------------------------------------------- S&P Global Ratings said that it assigned its 'B' issue rating with a recovery rating of '3' to the proposed EUR230 million first lien facility to be borrowed by Dutch software vendor Unit4 N.V., issued by AI Avocado Holding B.V. Concurrently, S&P has placed its 'B+' issue rating on the existing EUR440 million term loan B, the $30 million incremental facility, and the EUR50 million revolving credit facility (RCF) on CreditWatch with negative implications. S&P's 'B' long-term corporate credit rating on Unit4 remains unchanged following this transaction. The outlook is stable. The CreditWatch placement on Unit4's senior secured debt follows the company's intentions to issue a EUR230 million first lien facility. The company plans to use the proceeds of the proposed facility to repay the EUR165 million second lien facility in full. As part of the contemplated partial refinancing, the company is looking to: include a new incremental RCF, thereby increasing the total RCF to up to EUR80 million from EUR50 million currently; and relax debt incurrence ratios. Indicative recovery prospects are at the lower half of the 50%- 70% range, reflecting the large amount of first lien debt in Unit4's capital structure pro forma for the proposed transaction. Moreover, recovery prospects are very sensitive to any further increase in indebtedness. The proposed financing transaction has no impact on S&P's long- term corporate credit rating on Unit4 (B/Stable/--). This is mainly because S&P expects the issuance to reduce the company's interest payments, despite the minor debt increase, and provide it with an additional liquidity buffer. Although the company's year-to-date operating performance is weaker than budgeted, S&P thinks recently solid software bookings and declining exceptional and restructuring expenses will enable Unit4 to improve revenue trends and S&P Global Ratings-adjusted EBITDA in coming quarters. S&P continues to view this operating stabilization as key to maintaining the current rating. EA PARTNERS: Fitch Rates $500MM Notes Due 2021 'B-' --------------------------------------------------- Fitch Ratings has assigned EA Partners II B.V.'s $US500 million 6.750% notes due 2021 a final senior secured rating of 'B-' with a Stable Outlook. The Recovery Rating is 'RR4'. Fitch said, "EA Partners II B.V. will on-lend the proceeds from the notes' issue to respective obligors (defined as debt obligations). These notes are secured over assets that represent senior unsecured claims to the respective obligors. The rating reflects our view of the credit profiles of the obligors and is constrained at 'B-' by the obligors of the weakest credit quality. EA Partners II B.V. is a private company with limited liability established solely for the purpose of this transaction, and whose sole shareholder is a foundation." KEY RATING DRIVERS Unsecured Claims The proceeds from the notes' issue represent separate debt obligations of six obligors, including Etihad Airways PJSC (17.8% of the issue), Air Berlin PLC (19.9%), Alitalia Societa Aerea Italiana S.p.A. (19.9%), Air SERBIA, a.d. Belgrade (12.6% of the issue), Air Seychelles Limited (10.0%) and Etihad Airport Services LLC (19.8%). On-lending of proceeds from this transaction's secured notes create back-to-back senior unsecured claims upon the relevant obligors, which rank behind each obligor's other prior ranking debt, including secured debt. Weakest Obligor Credit Fitch said, "Given the transaction's recourse to each obligor on a several basis, the rating is constrained at the 'B-' level by the weakest credit quality obligations. The rating on the notes reflects our view of the creditworthiness and the senior unsecured ranking of the obligors, including our assessment of their links with their respective parents." This is due to the sole cash flow for the service and repayment of the proposed notes being the individual cash flow streams from the obligors under their respective loans. Failure of any obligor to make interest or principal payments under its respective debt obligation, which remains uncured following the remarketing of the respective debt obligation and/or through the liquidity pool, may lead to an event of default under the notes. As a result, the transaction's noteholders are exposed to the underlying creditworthiness of each obligor. Obligors' Credit Quality Varies In addition to Etihad Airways, the other obligors are either Etihad Airways' subsidiaries (eg Etihad Airport Services) or its equity airline partners (eg Air Berlin, Air Serbia, Air Seychelles, Alitalia). These, and its other equity airline partners, are key to Etihad's growth strategy, which aims at establishing a global network with competitive operational scale and diversity. The credit quality of the obligors varies substantially, from that of Etihad Airways (A/Stable), whose rating incorporates strategic, operational and, to a lesser extent legal, ties with its sole shareholder Abu Dhabi (AA/Stable), to that of the obligors with the weakest credit quality, which constrains the proposed notes' rating. While the obligors with the weakest credit profiles also benefit from the shareholder support of their minority parent, Etihad Airways, their standalone profiles remain weak largely due to weak credit metrics. Liquidity Pool The proposed transaction contains a liquidity pool, the only cross-collateralized feature (excluding its ratchet account component, which is not cross-collateralized), which is available to service the interest or principal on the notes if an obligor fails to pay an interest or principal on its respective debt obligation when due. However, the amount of the liquidity pool is limited to 4.75% of initial amounts raised. Fitch estimates that this amount is sufficient to cover about eight months of interest payments under the proposed notes. It also represents 11 months of interest payments for all obligors, except for the stronger Etihad Airways and Etihad Airport Services. If over 25% of the initial deposits, which account for most of the liquidity pool, are drawn to cure a default of an obligor to pay interest on its debt obligation, this may trigger the re-marketing of the respective debt obligation. Contractually, the liquidity pool does not have to be replenished if it is being used to service the notes. Cross Default The notes do not have a cross-default provision, which means that a default by one obligor under its debt obligation does not constitute an event of default under other debt obligations incurred under this transaction by the other obligors. However, events of default under each debt obligation include a customary cross-default provision, which states that a failure by the respective "obligor or any of its material subsidiaries to pay any of its own financial indebtedness when due" will lead to an event of default under the debt obligation of this obligor but not of any other obligor other than in the case of Etihad Airways and Etihad Airport Services as described below. Theoretically, upon an uncured event of default by one of the weakest entities (after use of the liquidity pool and no take-up under the re-marketing mechanism) the notes are in default and can be accelerated. Noteholders would look to non-defaulted entities to meet their obligations under this transaction but any shortfall resulting from the defaulted entity would not be an obligation of these other transaction parties. Etihad Airport Services is considered to be a material subsidiary of Etihad Airways under this transaction's documentation. Therefore, an uncured failure by Etihad Airport Services to make payments under this transaction's debt obligation will constitute an event of default under Etihad Airways' debt obligation under this transaction. Etihad Airways or any other non-defaulting obligor may also provide support to other obligors by purchasing their debt obligations through the "re-marketing event", if it takes place upon default of another obligor on its payments under the debt obligation. However, this can be exercised at Etihad Airways' or any other non-defaulting obligor's discretion and is not an obligation under this transaction. This lack of legal obligation to support other entities underpins this transaction's rating approach based on the credit profile of the weakest obligors rather than on the stronger entities supporting the weakest. Foundation-Owned Issuer The issuer is a private company with limited liability incorporated under the laws of the Netherlands and has no authorized share capital. Stichting EA Partners II, a foundation incorporated under the laws of the Netherlands, is the sole shareholder of the issuer. The issuer was established for the purpose of the issue of the notes and lending of the notes' proceeds to six obligors. Stichting has contributed additional equity to the issuer of EUR2m. Proceeds for Refinancing and Capex The purpose of the transaction is to provide a financing platform to the airline, cargo and ground services businesses that are part of Etihad's partner network. Air Berlin and Air Seychelles plan to use the proceeds of their debt obligations mostly for refinancing purposes whereas Etihad Airways, Etihad Airport Services, Air Serbia and Alitalia intend to use the proceeds mainly to finance capex and/or working capital, and for other general corporate purposes. FX Risk The debt obligation of all obligors and the notes are denominated in US dollars. Average Recovery Prospect Fitch said, "we assess the recovery (given default) prospect of the notes as average (31%-50%, RR4) based on the average of our assessment of the recovery prospects of the obligors and their respective country caps and adjusting for the volatility in the recovery percentages. Recovery prospects can be supported by successful re-marketing of performing debt obligations at higher than par." KEY ASSUMPTIONS Fitch's key assumptions within its rating case for the issuer include: -- The proceeds from the notes' issue will be on-lent to six obligors. -- This transaction's notes are secured over assets that represent senior unsecured claims to respective obligors. -- The notes do not have a cross-default provision. RATING SENSITIVITIES Positive: Developments that could lead to positive rating action include: -- The improvement of the credit quality of the obligors with the weakest credit profiles. -- Sustained improvement of the recovery prospects for the senior unsecured creditors of the obligors of the weakest credit quality, unless there are limitations due to country- specific treatment of Recovery Ratings. Negative: Developments that could lead to negative rating action include: -- The deterioration of the credit quality of the obligors with the weakest credit profiles. -- Worsening of the recovery prospects to below-average for the senior unsecured creditors of the obligors of the weakest credit quality. ========= S P A I N ========= BANCO POPULAR ESPANOL: Egan-Jones Hikes Sr. Unsec. Ratings to BB ---------------------------------------------------------------- Egan-Jones Ratings Company raised the senior unsecured ratings on debt issued by Banco Popular Espanol SA to BB from B+ on May 26, 2016. Banco Popular Espanol, S.A. is the fourth largest banking group in Spain. FONCAIXA FTGENCAT 4: Fitch Raises Rating on Class D Notes to 'BB' ----------------------------------------------------------------- Fitch Ratings has upgraded Foncaixa FTGENCAT 3, FTA's senior and mezzanine notes and Foncaixa FTGENCAT 4, FTA's mezzanine notes as follows: Foncaixa FTGENCAT 3 FTA: Class A(G) notes (ISIN ES0337937017): upgraded to 'AA+sf' from 'A+sf', Outlook Stable Class B notes (ISIN ES0337937025): upgraded to 'Asf' from 'BBB+sf', Outlook revised to Stable from Negative Class C notes (ISIN ES0337937033): upgraded to 'BBBsf' from 'BBsf', Outlook Positive Class D notes (ISIN ES0337937041): upgraded to 'BBsf' from 'Bsf', Outlook Stable Class E notes (ISIN ES0337937058): affirmed at 'CCsf', Recovery Estimate 0% Foncaixa FTGENCAT 4 FTA: Class A(G) notes (ISIN ES0338013016):affirmed at 'BBBsf', Outlook revised to Positive from Negative Class B notes (ISIN ES0338013024): upgraded to 'BB+sf' from 'BBsf', Outlook Stable Class C notes (ISIN ES0338013032): upgraded to 'BB-sf' from 'Bsf', Outlook Stable Class D notes (ISIN ES0338013040): affirmed at 'CCCsf', Recovery Estimate 0% Class E notes (ISIN ES0338013057): affirmed at 'CCsf', Recovery Estimate 0% Both transactions are cash flow securitizations of a static pool of loans granted by Caja de Ahorros y Pensiones de Barcelona (la Caixa) to small and medium-sized Spanish enterprises. KEY RATING DRIVERS The upgrade reflects increases in credit enhancement as a result of natural portfolio amortization of the senior and mezzanine notes of both transactions. Credit enhancement on the class A(G) notes increased to 36.3% from 30.1% for Foncaixa FTGENCAT 3 and to 19.3% from 16.9% for Foncaixa FTGENCAT 4. The Outlooks on most tranches are now Stable, reflecting the stabilization of the transaction's performance. The ratings of Foncaixa FTGENCAT 3's class C notes and Foncaixa FTGENCAT 4's class A(G) notes are capped by the rating of the swap counterparty CaixaBank (BBB+/Positive/F2). Both transactions feature an unusual swap whereby the issuer pays the swap counterparty interest received on the portfolio and receives the weighted average spread of the class A to D notes plus a guaranteed spread of 50bps multiplied by the class A to D note notional. Although the swap could be collateralized if necessary, the swap is considered fairly illiquid and no credit has been given to the receipt of interest payments from defaulted assets in rating stresses above the swap counterparty rating. The transactions also include 53% (FTGENCAT 3) and 59% (FTGENCAT 4) of flexible loans, which allow borrowers to redraw monies up to a maximum agreed amount. As any redraws will not form part of the securitization, but are ranked pari pasu with the securitized amount in a default event, Fitch treated all flexible loans as fully drawn and adjusted the collateral backing the respective securitized loans accordingly. Overall, performance of Foncaixa FTGENCAT 3 has improved over the past year with delinquencies over 90 days decreasing to 3.4% from 3.94% and current defaults to EUR6.2 million from EUR6.4 million, while the weighted average recovery rate has increased to 73% from 71%. Delinquencies over 90 days for Foncaixa FTGENCAT 4 decreased to 4% from 4.9%, while current defaults increased to EUR8.4 million from EUR6.9 million, with weighted average recoveries decreasing to 58.6% from 60%. Increases in portfolio concentration have been marginal over the past 12 months with the top ten obligors now representing around 5.7%, compared with 4.9% for Foncaixa FTGENCAT 3 and 5.5%, compared with 5.1% for Foncaixa FTGENCAT 4. RATING SENSITIVITIES Increasing the default probability by 1.25x or reducing recovery expectations by 0.75x to all assets in the portfolio would not lead to a downgrade of Foncaixa FTGENCAT 4, but could lead to a downgrade of Foncaixa FTGENCAT 3's class D notes. DUE DILIGENCE USAGE No third party due diligence was provided or reviewed in relation to this rating action. DATA ADEQUACY Fitch has checked the consistency and plausibility of the information it has received about the performance of the asset pools and the transactions. There were no findings that were material to this analysis. Fitch has not reviewed the results of any third party assessment of the asset portfolio information or conducted a review of origination files as part of its ongoing monitoring. Fitch did not undertake a review of the information provided about the underlying asset pools ahead of the transactions' initial closing. The subsequent performance of the transactions over the years is consistent with the agency's expectations given the operating environment and Fitch is therefore satisfied that the asset pool information relied upon for its initial rating analysis was adequately reliable. Overall, Fitch's assessment of the information relied upon for the agency's rating analysis according to the applicable rating methodologies indicates that it is adequately reliable. =========== S W E D E N =========== VIKING SUPPLY: Norseman Offshore Withdraws Bankruptcy Petition -------------------------------------------------------------- Viking Supply Ships A/S ("VSS A/S") on June 16 disclosed that Norseman Offshore AS has withdrawn the petition for bankruptcy against VSS A/S which had been filed with the Maritime and Commercial High Court in Copenhagen on June 9 2016. Viking Supply Ships AB -- http://www.vikingsupply.com-- is a Swedish company with headquarter in Gothenburg, Sweden. Viking Supply Ships A/S is a subsidiary of Viking Supply Ships AB (publ). In addition, Viking Supply Ships AB has the subsidiary TransAtlantic AB. The operations are focused on offshore and icebreaking primarily in Arctic and subarctic areas as well as on Shipping services mainly between the Baltic Sea and the Continent. The company has in total about 500 employees and the turnover in 2015 was MSEK 1,977. The company's B-shares are listed on the NASDAQ Stockholm, Small Cap segment. =========================== U N I T E D K I N G D O M =========================== ATLANTICA YIELD: S&P Affirms 'B+' CCR, Outlook Stable ----------------------------------------------------- S&P Global Ratings affirmed its ratings on Atlantica Yield PLC (ABY), including the 'B+' corporate credit rating, and removed them from CreditWatch, where they were placed with negative implications on Nov. 26, 2015. The outlook is stable. S&P has also affirmed the 'BB' ratings on the senior secured debt; the recovery rating on this debt is '1', indicating expectations for very high (90%-100%) recovery for investors in the event of default. In addition, S&P affirmed the 'B+' rating on the senior unsecured debt. The recovery rating on this debt is '3', indicating expectations for meaningful (upper half of the 50%-70% range) recovery in a default. The rating action affects about $670 million of debt, consisting of $415 million of the revolver credit facility due December 2017 and December 2018 (both unrated) and $255 million of senior unsecured obligations. "From a methodology standpoint, we view the ratings on ABY as distinct from those on Abengoa S.A., its 41.5% owner, because of its minority ownership position, as well as the corporate governance provisions at ABY," said S&P Global Ratings credit analyst Aneesh Prabhu. Specifically, Abengoa S.A.-related decisions must be agreed by a majority of the independent directors (Abengoa S.A. has the right to name three board members out of eight based on its ownership). The company is implementing measures to further insulate itself from its sponsor and has changed its name to Atlantica Yield after a shareholder vote in May 2016. The outlook is stable, reflecting S&P's base-case expectation that the company will be able to secure the required waivers subsequent to its efforts of distancing itself from sponsor Abengoa S.A. as well as canceling its distributions pending the receipt of such waivers. While S&P's base-case projection is that the company can generate FFO to debt levels of higher than 25%, S&P expects ABY to maintain FFO to debt of at least 20% even if some distributions are delayed. These estimates assume that it will incur higher spending than projected as well as retain distributable cash at projects seeking waivers. S&P continues to monitor developments as ABY seeks to secure waivers related to the change-of-control and cross-default provisions. In a scenario whereby a default triggered at one or more of these projects is not cured, dividends from these projects to ABY could be halted, resulting in weaker credit measures. S&P would lower the ratings if projected FFO to debt levels decline below 20%. S&P thinks an outlook change or lower ratings are more likely from the company's inability to secure waivers rather than from operating underperformance. S&P would likely raise the ratings if the company is able to secure all waivers for projects that cross-default to a potential Abengoa S.A. bankruptcy, and if it maintains financial performance of about 25%-27% FFO to debt. It is likely that if the company is able to receive all waivers and generates cash flow at this level S&P will likely improve its financial risk profile assessment. BHS GROUP: Green Apologizes for Collapse, To Address Pension Woes ----------------------------------------------------------------- James Davey and Sarah Young at Reuters report that retail tycoon Philip Green admitted to British lawmakers on June 16 he had erred in selling BHS to a former bankrupt and promised to help fix a gaping hole in the pension scheme of the collapsed department store chain he owned for 15 years. The loss-making BHS fell into administration in April, little more than a year after Mr. Green sold it to Dominic Chappell's Retail Acquisitions Ltd for a nominal sum, resulting in the likely loss of 11,000 jobs as it is wound down, Reuters recounts. Mr. Chappell was a serial bankrupt with no retail experience, Reuters notes. BHS's demise left its pension fund with a deficit of GBP571 million (US$809 million), while Topshop-owner Green's reputation as a leading British businessman was tarnished, Reuters discloses. In a six-hour session in front of parliament's Business and Work and Pensions committees, Mr. Green was at times contrite, at times exasperated and at one point came close to walking out, Reuters relays. He apologized for BHS's "sad ending" and his role in it, Reuters relates. Mr. Green, as cited by Reuters, said he had trusted Mr. Chappell as a buyer because he had been approved by Mr. Green's adviser Goldman Sachs and was being represented by law firm Olswang and financial adviser Grant Thornton, names he called "reputable, well-regarded". He said Mr. Chappell's status as a former bankrupt was not a reason not to do business with him, Reuters notes. Mr. Green, Reuters says, was critical of the pension regulator for failing to engage with BHS as its deficit increased and said the retailer's pension trustees were also responsible. He said he had not received one phone call or email from Lesley Titcomb, the pension regulator's CEO, calling for a meeting in the three years since 2013 when it started examining BHS, Reuters relays. Mr. Green also denied he scuppered a last-ditch rescue of BHS by Sports Direct owner Mike Ashley and said he considered buying back the business, Reuters recounts. He did not provide details on the plan he is working on with Deloitte to plug the pension deficit -- a figure based on how much it would cost to address the shortfall between assets and future liabilities with either insurance or a buyout -- as he sought to reassure BHS's 20,000 pension-holders, Reuters notes. "We will sort it, we will find a solution," Reuters quotes Mr. Green as saying. BHS Group is a department store chain. The company employs 10,000 people and has 164 shops. BHS GROUP: Documents Reveal Role of Goldman Sachs Execs in Sale --------------------------------------------------------------- Mark Vandevelde at The Financial Times reports that three top Goldman Sachs executives made contact with people outside the bank 95 times as part of their unpaid work to help Sir Philip Green sell troubled retail chain BHS Group for GBP1. The exchanges included meetings and telephone calls, as well as 79 emails that have been made public by a parliamentary inquiry into the April collapse of the retailer, the FT discloses. According to the FT, the documents reveal details of the highly unusual assignment Goldman took on when it agreed informally to vet a consortium headed by ex-bankrupt Dominic Chappell. The former race car driver's vehicle was seeking to buy BHS at a time when the chain was weighed down by falling sales and a large pension deficit, the FT relays. MPs have been scrutinizing Goldman's role in the transaction as part of their investigation into the collapse of the retailer 13 months after it was sold, the FT relates. Administrators announced this month that BHS is to close with the likely loss of 11,000 jobs, triggering a GBP275 million official rescue of the chain's pension fund, the FT recounts. Michael Sherwood, who has counted Sir Philip as a client since he advised the tycoon on an unsuccessful 2004 bid for retailer Marks and Spencer, is the most senior banker involved, the FT notes. The co-head of Goldman's international division was one of the people who traded emails about BHS, the FT states. But most of the work fell to Anthony Gutman, Goldman's co-head of European investment banking, the FT says. According to the FT, he has said that Goldman had no formal role in the sale and received no fees from Sir Philip's fashion empire, Arcadia. BHS Group is a department store chain. The company employs 10,000 people and has 164 shops. FAB UK 2004-1: Fitch Affirms 'CCsf' Ratings on 3 Note Classes ------------------------------------------------------------- Fitch Ratings has affirmed FAB UK 2004-1 Limited's notes as follows: Class A-1E: affirmed at 'BBsf'; Outlook Stable Class A-1F: affirmed at 'BBsf'; Outlook Stable Class A-2E: affirmed at 'Bsf'; Outlook Stable Class A-3E: affirmed at 'CCsf' Class A-3F: affirmed at 'CCsf' Class S1: affirmed at 'BBsf'; Outlook Stable Class S2: affirmed at 'CCsf' The transaction is a securitization of UK structured finance assets. At closing the SPV issued GBP204.5 million of fixed- and floating-rate notes, using the proceeds to buy a GBP200 million portfolio managed by Gulf International Bank (UK) Ltd. KEY RATING DRIVERS Stable Portfolio Performance Portfolio performance has been stable over the last 12 months with minimal changes in portfolio characteristics. The weighted average rating factor -- a measure of credit quality -- stands at 11.8, compared with 12.2 in June 2015. There have been no defaults in the portfolio since June 2015. The portfolio comprises only UK assets and is heavily concentrated in RMBS (85.9% of the performing portfolio). Fitch maintains a stable outlook on the UK prime and non-performing RMBS sector. Long Expected Life Fitch based its analysis on a time-to-repayment assumption for the portfolio. The agency made the following bullet repayment assumptions for assets which are not CMBS and are not currently amortizing: 25 years from closing for RMBS assets and five years from closing for ABS assets. For non-CMBS assets which are currently amortizing Fitch used an average repayment date assuming linear amortization between the analysis date and the expected final payment date derived earlier. CMBS assets, as well as those assets where the above calculation yielded an expected repayment date prior to the analysis date, were assumed to repay on their legal final maturity date. Fitch's overall weighted average life assumption for the portfolio is 12.4 years. Combo Notes Linked to Components The ratings of the class S1 and S2 combination notes are linked to the ratings of the class A-1F and A-3F components respectively. RATING SENSITIVITIES A 25% increase in the asset default probability would lead to a downgrade of one notch for the class A-1E, A-1F and S1 notes and no impact on the remaining notes. A 25% reduction in expected recovery rates would not lead to a downgrade of the rated notes. DUE DILIGENCE USAGE No third party due diligence was provided or reviewed in relation to this rating action. DATA ADEQUACY Fitch has checked the consistency and plausibility of the information it has received about the performance of the asset pool and the transaction. There were no findings that were material to this analysis. The majority of the underlying assets have ratings or credit opinions from Fitch and/or other Nationally Recognised Statistical Rating Organisations and/or European Securities and Markets Authority registered rating agencies. Fitch has relied on the practices of the relevant Fitch groups and/or other rating agencies to assess the asset portfolio information. Overall, Fitch's assessment of the information relied upon for the agency's rating analysis according to its applicable rating methodologies indicates that it is adequately reliable. =============== X X X X X X X X =============== * Atradius Warns for Insolvencies in Eurozone Periphery ------------------------------------------------------- The Atradius outlook for global economic growth is "slower for longer", with five primary downside risks that could drag down the economic and insolvency outlooks. While the turbulence experienced in the first months of 2016 has subsided the underlying issues persist. Low commodity prices, tepid international trade growth, debt overhang, and ineffective monetary and fiscal policies are key contributors to the current global slowdown. The baseline growth forecast for 2016 is only 2.4%, 1.6% in the Eurozone, and this may deteriorate further through the year. After an overall picture of improving insolvency ratios in 2015, the insolvency forecasts for 2016 are less optimistic. In most countries, the current default level will stabilize but at generally high levels. In its biannual Economic Outlook, Atradius identifies the five top global risks that would drive this: -- A hard landing in China, defined by GDP growth below 5% this year, would have a strong impact worldwide, reinforcing the negative effects already seen on global trade, commodity prices and financial turbulence. -- US monetary policy has a similar global impact. A steady, well-communicated tightening schedule is expected. Still, a poorly communicated, or even a well communicated but badly received course of action, is a clear threat. The accompanying financial turbulence would pose a large drag on global growth, particularly in emerging markets. -- Persistently slower growth in the eurozone, despite aggressive ECB monetary stimulus, could lead to longer term stagnation and elevate political uncertainty, already heightened due to the Brexit referendum. -- A rapid rise in the oil price would increase costs for oil importers, removing a key benefit for growth in many advanced markets such as the eurozone. -- Deleveraging taking off would also hold back growth in advanced markets, suppressing demand. These last three risks would have a moderately negative impact on EU countries, with most becoming more acute in the periphery countries. Global financial market volatility would especially hurt emerging market economies whose economic outlook is already under pressure. More restrictive access to finance at a higher cost would further drive up the already high insolvencies that we now predict in key markets like China and Brazil. * PJT Partners, Kirkland & Ellis Join Brexit Breakfast Seminar -------------------------------------------------------------- Join PJT Partners and Kirkland & Ellis, along with a host of speakers from investors and industry experts, for the following panel sessions and Q&A: Breakfast and opening on Brexit voting results implications for business and politics in the UK and the EU Session 1 TMT Consolidation and M&A Opportunities in the Next 2-3 Years Simon Lyons -- PJT Partners, Partner (Moderator) Johannes Groeller --PJT Partners, Partner Burkhard Koep -- Altice, Head of Business Development and M&A Session 2 What Does "Smart" M&A in Healthcare Look Like? Rakesh Patel -- PJT Partners, Partner (Moderator) Basil Geoghegan -- PJT Partners, Managing Director Gavin Gordon -- Kirkland & Ellis, Partner Drew Gillanders -- Och Ziff Capital, Portfolio Manager Session 3 Commodities -- Distressed Opportunities and Impact on Governments Martin Gudgeon -- PJT Partners, Head of EMEA Restructuring and Special Situations Group (Moderator) Shirish Joshi -- PJT Partners, Managing Director Kon Asimacopoulos -- Kirkland & Ellis, Partner European Restructuring Group Stephen Hall -- McKinsey & Company, Director Energy and Mining Phil Kirk -- Chrysaor, Chief Executive Officer Session 4 A-Z of Bond Restructuring and Exchange Offers Trends David Riddell -- PJT Partners, Partner (Moderator) Tom Campbell -- PJT Partners, Partner William Burke -- Kirkland & Ellis, Partner Capital Markets Group Justin Jewell -- BlueBay, Co-Head of Global Leveraged Finance Long-Only Business Santiago Pardo - Special Situations Investing Tuesday, 28 June 2016 08:15 a.m. Registration and Breakfast 08:30 a.m. - 12:00 p.m. Programme Four Seasons, Park Lane Hamilton Place London W1J 7DR Please respond by June 20. Spaces are limited and will be on a first come, first served basis. You can register to the event at http://goo.gl/9L6dHD Kirkland & Ellis International LLP is a limited liability partnership established in Delaware, and the liability of its partners is limited in accordance with section 15-306(c) of the Delaware Revised Uniform Partnership Act. It is a multinational practice, the partners of which are Solicitors and Registered Foreign Lawyers (admitted in the U.S. and other jurisdictions), and is authorized and regulated in the UK by the Solicitors Regulation Authority (SRA number 349107). * BOOK REVIEW: Oil Business in Latin America: The Early Years ------------------------------------------------------------- Author: John D. Wirth Ed. Publisher: Beard Books Softcover: 282 pages List price: $34.95 Review by Gail Owens Hoelscher Buy a copy for yourself and one for a colleague on-line at http://is.gd/DvFouR This book grew out of a 1981 meeting of the American Historical Society. It highlights the origin and evolution of the stateowned petroleum companies in Argentina, Mexico, Brazil, and Venezuela. Argentina was the first country ever to nationalize its petroleum industry, and soon it was the norm worldwide, with the notable exception of the United States. John Wirth calls this phenomenon "perhaps in our century the oldest and most celebrated of confrontations between powerful private entities and the state." The book consists of five case studies and a conclusion, as follows: * Jersey Standard and the Politics of Latin American Oil Production, 1911-30 (Jonathan C. Brown) * YPF: The Formative Years of Latin America's Pioneer State Oil Company, 1922-39 (Carl E. Solberg) * Setting the Brazilian Agenda, 1936-39 (John Wirth) * Pemex: The Trajectory of National Oil Policy (Esperanza Duran) * The Politics of Energy in Venezuela (Edwin Lieuwen) * The State Companies: A Public Policy Perspective (Alfred H. Saulniers) The authors assess the conditions at the time they were writing, and relate them back to the critical formative years for each of the companies under review. They also examine the four interconnecting roles of a state-run oil industry and distinguish them from those of a private company. First, is the entrepreneurial role of control, management, and exploitation of a nation's oil resources. Second, is production for the private industrial sector at attractive prices. Third, is the integration of plans for military, financial, and development programs into the overall industrial policy planning process. Finally, in some countries is the promotion of social development by subsidizing energy for consumers and by promoting the government's ideas of social and labor policy and labor relations. The author's approach is "conceptual and policy oriented rather than narrative," but they provide a fascinating look at the politics and development of the region. Mr. Brown provides a concise history of the early years of the Standard Oil group and the effects of its 1911 dissolution on its Latin American operations, as well as power struggles with competitors and governments that eventually nationalized most of its activities. Mr. Solberg covers the many years of internal conflict over oil policy in Argentina and YPF's lack of monopoly control over all sectors of the oil industry. Mr. Wirth describes the politics and individuals behind the privatization of Brazil's oil industry leading to the creation of Petrobras in 1953. Mr. Duran notes the wrangling between provinces and central government in the evolution of Pemex, and in other Latin American countries. Mr. Lieuwin discusses the mixed blessing that oil has proven for Venezuela., creating a lopsided economy dependent on the ups and downs of international markets. Mr. Saunders concludes that many of the then-current problems of the state oil companies were rooted in their early and checkered histories." Indeed, he says, "the problems of the past have endured not because the public petroleum companies behaved like the public enterprises they are; they have endured because governments, as public owners, have abdicated their responsibilities to the companies." Jonh D. Wirth is Gildred Professor of Latin American Studies at Standford University. ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than US$3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/booksto order any title today. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter-Europe is a daily newsletter co- published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA. Valerie U. Pascual, Marites O. Claro, Rousel Elaine T. Fernandez, Joy A. Agravante, Ivy B. Magdadaro, and Peter A. Chapman, Editors. Copyright 2016. 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 202-362-8552. * * * End of Transmission * * *