/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/160726.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 Tuesday, July 26, 2016, Vol. 17, No. 146 Headlines F R A N C E MAISONS DU MONDE: S&P Raises LT Corporate Credit Rating to 'B+' H U N G A R Y OTP BANK: S&P Raises Counterparty Credit Ratings to 'BB+' ZSOLNAY: Court Rejects Bailiff's Liquidation Request I C E L A N D HOUSING FINANCING: S&P Raises ICR to 'BB', Outlook Stable I R E L A N D AVOCA CLO IV: Moody's Affirms Caa2(sf) Rating on Class E Notes LAURELIN 2016-1: Moody's Assigns B2(sf) Rating to Class F Notes LAURELIN 2016-1: S&P Assigns B Rating to Class F Notes TAURUS 2015-3: Moody's Affirms B3(sf) Rating on Class F Notes I T A L Y DEMM SPA: Sept. 12 Deadline Set for Expressions of Interest ITALCEMENTI SPA: Moody's Hikes Corporate Family Rating to Ba1 ITALY: Finance Minister Rejects "Bail-in" for Banks SILENUS EUROPEAN: S&P Lowers Rating on Class D Notes to D N E T H E R L A N D S AVAST HOLDING: S&P Affirms 'BB-' CCR, Outlook Stable CAIRN CLO VI: Moody's Assigns B2 Definitive Rating to Cl. F Debt CAIRN CLO VI: Fitch Assigns 'B-sf' Rating to Class F Notes N O R W A Y NORSKE SKOGINDUSTRIER: S&P Raises CCR to 'CCC+', Outlook Stable P O R T U G A L NOVO BANCO: Unsuccessful Sale Attempts to Hit Portuguese Banks U N I T E D K I N G D O M BHS GROUP: MPs Criticize Advisers for Overlooking Weaknesses COLCHESTER ENGLISH: In Administration After 'Significant Losses' DECO 11 - UK: Moody's Affirms B3(sf) Rating on Class A-1B Notes DMG STEELWORKERS: CVR Global Sells Firm Out of Administration FAIRFIELD (CROYDON): Operator Enters Administration INTERNATIONAL PERSONAL: Fitch Affirms 'BB+' IDR, Outlook Stable JOSHUA JAMES: In Administration Amid Cash Flow Difficulties MAXWELL COMMUNICATION: Scheme Distribution Scheduled Today PLASRECYCLE: In Administration, Seeks Buyer * UK: Insolvency Fee Hike to Hit Insolvent Companies' Creditors X X X X X X X X * Moody's Says European Firms' Diversity to Protect Profitability ********* =========== F R A N C E =========== MAISONS DU MONDE: S&P Raises LT Corporate Credit Rating to 'B+' --------------------------------------------------------------- S&P Global Ratings said that it raised its long-term corporate credit rating on France-based decoration and furniture retailer Magnolia (BC) S.A. (Maisons du Monde) to 'B+' from 'B'. At the same time, S&P removed the rating from CreditWatch with positive implications, where it placed it on April 25, 2016. S&P subsequently withdrew the long-term rating at Maisons du Monde's request. The outlook was stable at the time of the withdrawal. The upgrade follows Maisons du Monde's successful listing on the Euronext Paris Stock Exchange. Maisons du Monde raised EUR160 million from newly issued shares; with an additional EUR220 million sold by shareholders Bain Luxco and Compagnie Marco Polo after the over-allotment option was exercised, bringing the total offer to about EUR380 million. Maisons du Monde used the proceeds to repay its EUR325 million high-yield bond. All preferred equity certificates (PECs) and related interest were also converted to equity in the transaction. The company also put in place new senior credit facilities with a pool of banks, providing Maisons du Monde with a EUR250 million term loan and EUR75 million revolving credit facility. As a result, S&P now forecasts reported debt to EBITDA to reduce to less than 3x in the fiscal year ending Dec. 31, 2016, (about 4x on an S&P Global Ratings-adjusted basis). Despite the improvement in leverage, S&P's view of Maisons du Monde's financial risk profile remains constrained by its controlling ownership by a financial sponsor, Bain Capital. Prior to withdrawal, S&P revised its assessment of Maisons du Monde's financial policy to the FS-5 category (a one-category improvement from our previous FS-6 assessment). This primarily reflected that the reduction of debt and of the private equity sponsors' shareholdings should, in S&P's opinion, lead the company to pursue a more moderate and predictable financial policy, particularly with respect to shareholder returns. It also reflected that no clear timeframe has yet been provided for when Bain Capital may ultimately relinquish control, and S&P do not currently anticipate this to occur in the near-to-medium term. Finally, S&P's 'B+' rating also incorporated its view of Maisons du Monde's limited scale, minimal diversity relative to broader sector peers, and a limited financial policy track-record since becoming a publicly listed company. At the time of the withdrawal, S&P assessed Maisons du Monde's liquidity as adequate. Based on S&P's current forecasts, following the IPO and debt reduction, S&P expected sources of liquidity to exceed uses by more than 1.2x over the following 12 months. This assessment reflects Maisons du Monde lack of short- term debt maturities and the significant headroom under its covenants under the new credit facilities. ============= H U N G A R Y ============= OTP BANK: S&P Raises Counterparty Credit Ratings to 'BB+' --------------------------------------------------------- S&P Global Ratings Services said that it has raised its long-term foreign and local currency counterparty credit ratings on Hungary-based OTP Bank PLC (OTP Bank) and its core subsidiary OTP Mortgage Bank (OTP Mortgage) to 'BB+' from 'BB'. At the same time, S&P affirmed its 'B' short-term foreign and local currency counterparty credit ratings on both banks. S&P also affirmed its 'BB/B' long- and short-term foreign and local currency counterparty credit ratings on Hungary-based Magyar Takarekszovetkezeti Bank ZRt. (Takarekbank). The outlooks on the long-term ratings on all three banks are stable. The rating actions follow S&P's review of economic and industry risks for Hungarian banks. S&P has observed several positive developments since its last review of the banking industry in July 2015. Among these are regulatory changes, including the completed conversion of households' housing and consumer loans in foreign currency to Hungarian forint, as well as the establishment of a new asset management company to deal with problem commercial real estate loans. As a result, households now have comparatively lower debt burdens and debt service, and domestic real estate prices have started recovering. Most importantly, this conversion has eliminated the most prominent credit risk for domestic banks. Although households' demand for new loans is still weak, S&P thinks their appetite for credit will rise gradually. Following several years of deleveraging, Hungarian banks' overall funding metrics have improved visibly, and their reliance on the external bank debt decreased. Yet, S&P thinks that the competitive landscape is now tougher because credit demand has picked up only in the past few months and banks are increasingly investing in lower-yield domestic government debt, in line with the government's "self-funding" scheme. Based on the above, S&P considers that economic risks for Hungary's banks has lessened and have revised its assessment of economic risk for Hungarian banks to '7' from '8' under S&P's Banking Industry Country Risk Assessment (BICRA) methodology. S&P now views the trend for economic risks in Hungary as stable. At the same time, S&P has maintained its assessment of industry risk at '7' and continue to regard the trend in this risk as stable. S&P therefore classifies Hungary in S&P's BICRA group '7', versus '8' previously. Combined, these changes mean that S&P has raised the anchor--the starting point for constructing its bank ratings--to 'bb' from 'bb-'. OTP BANK and OTP MORTGAGE The upgrade of OTP Bank largely mirrors S&P's revised view of the domestic banking system, while also taking into account the bank's strengthened overall risk profile. The latter mainly follows the positive domestic developments described above but also incorporates the OTP group's increased loss coverage across markets where it's active, including Ukraine and Russia. Also, operations in these countries are returning to profitability, and their share of loans within the group has decreased. They consequently represent less of a drag on the group's risk position. Concurrently, S&P revised its assessment of OTP Bank's liquidity to strong from adequate. The bank has a sizable amount of liquid assets that cover its short-term funding needs more than adequately. More than half of its deposits in Hungary fall under the coverage-of-savings deposits guarantee, therefore making the bank resilient to reasonable stress in the next 12 months. The bank has a high amount of unencumbered assets that can be repurchased with the National Bank of Hungary and its counterparties. Its exceptionally good liquidity metrics are also attributable to its deleveraging in the recent past. S&P expects its liquidity metrics will gradually weaken but remain well above peers' when credit growth potentially accelerates in Hungary starting from 2017. S&P do not foresee the bank more actively funding lending growth with short-term wholesale issuance. S&P's assessment of capital and earnings remains unchanged, already taking into account the continued gradual recovery of operational performance in 2016-2017. S&P consequently expects its forecast risk-adjusted capital (RAC) ratio for OTP Bank will improve to more than 8% in next 18 months but still remain below S&P's threshold for a stronger capital assessment. S&P equalizes the ratings on OTP Mortgage with those on parent OTP Bank because S&P continues to regard it as a fully integrated subsidiary that is integral to the group's strategy. The stable outlook on OTP Bank and OTP Mortgage is based on S&P's anticipation that the group's business and financial profiles will remain commensurate with the current ratings over the next 12 months, all else remaining equal. The likelihood of a positive rating action on OTP Bank over the next 12 months is limited because it would hinge on a similar rating action on Hungary and strengthening in our stand-alone credit profile (SACP) assessment for the bank, both of which S&P views as remote at present. In addition, S&P typically do not rate a bank higher than its country of domicile. To consider an upward revision of the SACP, S&P would expect to see the bank's RAC ratio above 10% on a sustained manner, along with better assessments of other bank-specific factors. A negative rating action on OTP Bank, on the other hand, could stem from a similar rating action on the sovereign or deterioration in S&P's SACP assessment for the bank. A weakened SACP could stem from a deterioration of the RAC ratio to below 7%, owing to rapid loan growth to the detriment of capitalization, or internal capital generation weakening because of a surge in risk costs. These are not our base-case scenarios however. TAKAREKBANK The ratings on Takarekbank factor in S&P's view that the bank compares poorly, in terms of profitability and earnings generation, with other peers operating in countries with similar economic and industry risk and rated at 'BB+' or lower. They also take into account S&P's upward revision of the group credit profile to 'bb+' from 'bb', reflecting S&P's view of Hungary's reduced economic risks. The bank has reported negative capital sustainability levels, as measured under S&P's methodology, and an overall low earnings buffer. Historical returns on equity have also been generally modest. Consequently, S&P applies a one-notch negative adjustment to the rating to reflect its view that the bank is and will likely continue to be a relatively poor performer in its peer group. In addition, Takarekbank only recently enacted a radical transformation. Therefore, it remains to be seen if the bank's recent overhaul of its business model and enterprise risk management will prove efficient. S&P also thinks that Takarekbank will benefit less than other larger domestic peers from Hungary's recent regulatory initiatives to address foreign currency-denominated mortgages and large commercial real estate project finance loans, because it had lower exposure to these problematic asset classes. The stable outlook on Takarekbank balances the improving domestic economic environment and the bank's tighter integration into Hungary's group of savings bank cooperatives with limited business prospects because the demand for credit remains subdued. Moreover, as a niche bank with weaker earnings capacity than the sector average, Takarekbank will in S&P's view benefit less than private banks from improved domestic economic growth. The bank' now operates more closely aligned with the savings cooperatives' group strategy, with harmonized marketing, product, and Information Technology systems. S&P thinks that this could create stronger risk management, better efficiency, and wider business opportunities over the next 12 to 18 months, which S&P already factors into its ratings on Takarekbank. Therefore, S&P expects these factors will help the bank maintain financial and business profiles that S&P regards as commensurate with the current ratings over the next year. S&P could take a positive rating action on the bank if S&P concluded that conditions in the domestic economy and the purchasing power of households had further improved, while credit demand picked up, leading to better earnings for the group. This would also necessitate a stronger commercial strategy with higher earnings margins and better efficiency, with improved earnings buffers and capital sustainability. Conversely, S&P could take a negative rating action on the group if its profitability and earnings buffer remain below peers leading S&P to weaken its assessment of its business position and if the group's projected RAC ratio deteriorated below 3% at the same time. S&P would also consider a negative rating action if, contrary to its base-case expectations, S&P observed significant weakening in Takarekbank's links with the integrated savings cooperatives, which would trigger a change in S&P's view of its core subsidiary status. BICRA SCORE SNAPSHOT* Hungary To From BICRA group 7 8 Economic risk 7 8 Economic resilience High risk Very high risk Economic imbalances High risk High risk Credit risk in the economy Very high risk Very high risk Trend Stable Positive Industry risk 7 7 Institutional framework Very high risk Very high risk Competitive dynamics High risk Intermediate risk Systemwide funding High risk Very high risk Trend Stable Stable *Banking Industry Country Risk Assessments (BICRAs) and economic risk and industry risk scores are on a 1 (lowest risk)-to-10 (highest risk) scale. RATINGS LIST Upgraded; Ratings Affirmed To From OTP Bank PLC Counterparty Credit Rating Foreign and Local Currency BB+/Stable/B BB/Positive/B Senior Unsecured Foreign and Local Currency BB+ BB OTP Mortgage Bank Counterparty Credit Rating Foreign and Local Currency BB+/Stable/B BB/Positive/B Ratings Affirmed Magyar Takarekszovetkezeti Bank ZRt. Counterparty Credit Rating Foreign and Local Currency BB/Stable/B ZSOLNAY: Court Rejects Bailiff's Liquidation Request ---------------------------------------------------- MTI-Econews reports that a court in western Hungary has rejected a bailiff's request to liquidate Zsolnay. Imre Bodnar, the company's counsel, told MTI the court said the bailiff should have allowed Zsolnay to repay a loan as it served the interest of the company's creditors. Mr. Bodnar, as cited by MT, said the behavior of the bailiff was "very concerning" and called Zsolnay's situation a "pivotal point" in the history of liquidations in Hungary. He also suggested the bailiff may not have been acting primarily in creditors' interest, MTI notes. Officials of the local council of Pecs, which owns a minority stake in Zsolnay, have said the business is on the verge of bankruptcy and set up a company to take over its operation, MTI relates. Zsolnay is a Hungarian porcelain maker. ============= I C E L A N D ============= HOUSING FINANCING: S&P Raises ICR to 'BB', Outlook Stable --------------------------------------------------------- S&P Global Ratings raised its long-term foreign and local currency issuer credit ratings on Iceland's Housing Financing Fund Ibudalanasjodur (HFF) to 'BB' from 'BB-'. At the same time, S&P affirmed its 'B' short-term ratings on HFF. The outlook is stable. The upgrade primarily reflects S&P's upward revision of forecasts for HFF's earnings and capitalization, largely stemming from the improving economic conditions in Iceland having a more pronounced positive impact on HFF then S&P previously anticipated. The upgrade also reflects the several steps HFF has taken to reduce its prepayment problem. In S&P's view, this will underpin stronger earnings in the future. Consequently, S&P has revised up its assessment of HFF's SACP to 'b' from 'b'. S&P also believes that there is a high likelihood that the government of Iceland would provide timely extraordinary support to HFF in the event of financial distress. As a result, S&P's long-term ratings on HFF are three notches higher than its 'b' SACP. HFF's future role and operations remain unclear. In May 2014, the project committee appointed by Iceland's Minister of Social Affairs and Housing called for a reform of the Icelandic housing system. Under the committee's proposals, HFF's operations were to be gradually discontinued over the medium term. Under the existing system, HFF provides mortgage loans -- as do commercial banks, and, to a lesser extent, pension funds. The new approach provides for the establishment of specialized mortgage companies financed through the issuance of covered bonds, which will only be allowed to provide mortgage loans. The proposals specify that HFF will cease lending and its portfolio will be allowed to expire. Meanwhile, the government would establish a new state-owned housing loan company, which would operate on the same terms as other specialized mortgage companies and, unlike HFF, will not benefit from a state guarantee. Even though S&P's baseline scenario continues to assume broad implementation of the proposals, it notes that the government has taken no tangible steps toward enacting the proposals since they were presented in May 2014. During that time, HFF has continued to operate, although its market share in new lending has been low (below 10% of new lending in both 2014 and 2015). The institution has maintained a larger presence in certain niches -- such as lending to rural areas and to lower income households -- whereas other market segments have been increasingly taken over by commercial banks. Although its role has diminished in recent years, S&P sees HFF as still being important for the government of Iceland. S&P believes that until the new housing system is implemented, HFF will maintain its presence in the rural and lower income segments of the market -- which are important for the authorities for social reasons -- and in regions in which the banks have little presence. S&P also understands there is a proposal in place under which HFF would administer government grants for the construction of social housing; the corresponding bill was passed by the Icelandic Parliament in June 2016. There are also plans to potentially explicitly entrust HFF with the social role in the future, whereby the institution would undertake lending under specified household income-based criteria rather than be completely wound-up. That said, even in that case the entity would likely be several times smaller compared to current levels as the majority of mortgage lending would be gradually taken over by commercial banks. "We also assess HFF's role for the government as important based on the consequences for the government and the domestic capital market of a default by HFF. HFF's outstanding bonds amounted to about 35% of Iceland's GDP as of end-2015 and close to 80% is held by Icelandic pension funds. A default would therefore entail losses for the pension funds; we do not expect the government to view this as politically acceptable. The government also provides an ultimate, but not timely, guarantee on HFF's outstanding debt. In our view, HFF's default could undermine confidence in other companies that benefit from similar guarantees by the government," S&P said. In S&P's view, HFF continues to maintain an integral link with the government of Iceland. Based on its 100% government ownership and the consequences of its default, the authorities are highly likely to provide timely extraordinary support should the need arise. As a state agency, HFF is not subject to bankruptcy proceedings and is exempt from taxation. The government has provided support to HFF through capital injections three times during 2010-2014, contributing a total of more than Icelandic krona (ISK)50 billion. Given positive earnings, improving asset quality, and an orderly downsizing of the balance sheet, S&P now sees the need for further injections as less likely over the next few years. S&P expects the government will only inject sufficient capital to ensure that HFF honors its obligations in a timely manner rather than tie up extra capital within the institution. For example, even though the government planned to capitalize the entity in both 2014 and 2015, this was cancelled once it became apparent that HFF would post net profits. S&P's revision of HFF's SACP to 'b' from 'b-' reflects its better-than-expected improvements in capital and earnings, which S&P now thinks will remain above its previous forecast. HFF's capitalization has considerably improved following an almost ISK2 billion (around EUR15 million) capital increase from net profits in 2015. The largest difference from S&P's previous forecast was the more-than ISK1 billion net impairment reversals, as opposed to an expected net loss. In S&P's view, the reversals indicate a stronger-than-anticipated positive impact on HFF from improving economic conditions in Iceland. Although subject to risks, these include robust projected economic growth and an increase in real incomes. Moreover, the entity has taken initiatives to ease its prepayment problem and bolster capitalization. These include the sale of the subsidiary Leigufelagio Klettur ehf (Klettur) in May 2016 and the active sales of repossessed properties, supported by favorable real estate market dynamics. Both have an immediate positive impact on capital. In addition, improved interest income and reduced costs have also led S&P to revise upward its forecast of earnings and capital. The main driver of this is the investments in asset-backed bonds (in December 2015 and in March 2016), as well as cost management initiatives, including organizational changes and a lower headcount, which has already yielded some results. Overall, S&P expects positive net earnings of ISK2.75 billion and total adjusted capital of ISK19.43 billion in 2016, which is a notable improvement from S&P's previous forecast. While S&P's forecast is somewhat more conservative, it notes that HFF's management anticipates regulatory capital ratios reaching 8% by 2020 (from 5.5% at end-2015) and positive earnings over the coming five years. S&P's assessment of other factors that contribute to the SACP, such as moderate business position and moderate risk position, remain unchanged. Even though S&P now expects HFF to benefit from the improving economic conditions in Iceland more so than S&P thought previously, the impact will still be smaller than that on Iceland's commercial banks. In particular, the continuing prepayments and only marginal new lending activity undertaken by HFF preclude it from attaining a stronger market position or growth in core business. "We consider HFF's funding profile to be below average, based on its reliance on the capital markets without any central bank access. Although HFF has not issued bonds since 2012 due to high prepayments and low new lending, we consider that its ability to access the domestic bond market remains stable. In our view, this is mainly due to HFF's close link with the government and the outstanding government guarantee and does not signify a stand-alone strength. We assess HFF's liquidity position as adequate, taking into account the expected contractual cash flows from prepayments and amortizing loans, and the cash liquidity buffer, which is heavily invested in long-dated covered bonds issued by Arion Bank to reduce the maturity mismatch. We expect that HFF would receive state support to meet any liquidity needs, although we do not currently anticipate that it will need such support in the next few years," S&P said. "The stable outlook reflects our expectation that HFF's SACP will remain unchanged, and that the likelihood of the government of Iceland providing timely extraordinary support to HFF in the event of financial distress will remain high over the next 12 months. We do not expect to take a rating action on HFF if we raise or lower our long-term local currency sovereign credit rating on Iceland by one notch, all else being equal," S&P noted. S&P could lower the ratings if it concluded that the effects of a potential HFF default for the government and the capital markets had reduced, which would reduce the incentive for the government to provide timely extraordinary support to the institution. S&P could raise the ratings if it believed that the risks inherent in unwinding the mortgage portfolio had reduced substantially, for instance based on materially improved asset quality and resilient pre-provision earnings generation. ============= I R E L A N D ============= AVOCA CLO IV: Moody's Affirms Caa2(sf) Rating on Class E Notes -------------------------------------------------------------- Moody's Investors Service has upgraded the rating of Class D notes issued by Avoca CLO IV plc: -- EUR20.5 million Class D Senior Secured Deferrable Floating Rate Notes due 2022, Upgraded to A1 (sf); previously on Apr 13, 2016 Upgraded to A3 (sf) Moody's affirmed the ratings on the following notes issued by Avoca CLO IV plc: -- EUR31 million (current balance outstanding: EUR2.3 million) Class B Senior Secured Deferrable Floating Rate Notes due 2022, Affirmed Aaa (sf); previously on Apr 13, 2016 Affirmed Aaa (sf) -- EUR27 million Class C1 Senior Secured Deferrable Floating Rate Notes due 2022, Affirmed Aaa (sf); previously on Apr 13, 2016 Affirmed Aaa (sf) -- EUR5 million Class C2 Senior Secured Deferrable Fixed Rate Notes due 2022, Affirmed Aaa (sf); previously on Apr 13, 2016 Affirmed Aaa (sf) -- EUR20.5 million (current balance outstanding: EUR22.78 million) Class E Senior Secured Deferrable Floating Rate Notes due 2022, Affirmed Caa2 (sf); previously on Apr 13, 2016 Affirmed Caa2 (sf) Avoca CLO IV plc, issued in January 2006, is a collateralized loan obligation (CLO) backed by a portfolio of high-yield senior secured European loans managed by Avoca Capital Holdings Limited. The transaction's reinvestment period ended in August 2012. RATINGS RATIONALE The rating upgrade of the Class D notes is primarily a result of the expected increase in the Class D over-collateralization (OC) ratio at the next payment in August 2016 due to the expected redemption of the Class B notes in full and deleveraging of the Class C1 and Class C2 notes as a result of amortization of the underlying portfolio since the last payment date in February 2016. As per the June 2016 trustee report, the principal proceeds balance is EUR27.05 million compared with EUR4.2 million in March 2016. The key model inputs Moody's uses in its analysis, such as par, weighted average rating factor, diversity score and the weighted average recovery rate, are based on its published methodology and could differ from the trustee's reported numbers. In its base case, Moody's analyzed the underlying collateral pool as having a performing par of EUR47.51 million, principle proceeds of EUR26.84 million, no defaulted assets, a weighted average default probability of 25% (consistent with a WARF of 3,645 over 3.98 years), a weighted average recovery rate upon default of 52.64% for a Aaa liability target rating, a diversity score of 7 and a weighted average spread of 3.69%. The default probability derives from the credit quality of the collateral pool and Moody's expectation of the remaining life of the collateral pool. The estimated average recovery rate on future defaults is based primarily on the seniority of the assets in the collateral pool. In each case, historical and market performance and a collateral manager's latitude to trade collateral are also relevant factors. Moody's incorporates these default and recovery characteristics of the collateral pool into its cash flow model analysis, subjecting them to stresses as a function of the target rating of each CLO liability it is analyzing. LAURELIN 2016-1: Moody's Assigns B2(sf) Rating to Class F Notes --------------------------------------------------------------- Moody's Investors Service announced that it has assigned the following definitive ratings to notes issued by Laurelin 2016-1 Designated Activity Company (the "Issuer"): -- EUR221,000,000 Class A Senior Secured Floating Rate Notes due 2029, Definitive Rating Assigned Aaa (sf) -- EUR67,500,000 Class B Senior Secured Floating Rate Notes due 2029, Definitive Rating Assigned Aa2 (sf) -- EUR27,000,000 Class C Senior Secured Deferrable Floating Rate Notes due 2029, Definitive Rating Assigned A2 (sf) -- EUR19,500,000 Class D Senior Secured Deferrable Floating Rate Notes due 2029, Definitive Rating Assigned Baa2 (sf) -- EUR21,000,000 Class E Senior Secured Deferrable Floating Rate Notes due 2029, Definitive Rating Assigned Ba2 (sf) -- EUR7,000,000 Class F Senior Secured Deferrable Floating Rate Notes due 2029, Definitive Rating Assigned B2 (sf) RATINGS RATIONALE Moody's definitive rating of the rated notes addresses the expected loss posed to noteholders by legal final maturity of the notes in 2029. The definitive 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, GoldenTree Asset Management LP ("Golden Tree"), has sufficient experience and operational capacity and is capable of managing this CLO. Laurelin 2016-1 Designated Activity Company is a managed cash flow CLO. At least 90% of the portfolio must consist of secured senior loans and up to 10% of the portfolio may consist of Second-lien loans, unsecured loans, Mezzanine loans. The portfolio is expected to be approximately 70% 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. Golden Tree 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 improved and credit impaired obligations, and are subject to certain restrictions. In addition to the six classes of notes rated by Moody's, the Issuer will issue EUR44,400,000 of subordinated notes. Moody's will not assign ratings 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. Factors that would lead to an upgrade or downgrade of the ratings: 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. Golden Tree's investment decisions and management of the transaction will also affect the notes' performance. LAURELIN 2016-1: S&P Assigns B Rating to Class F Notes ------------------------------------------------------ S&P Global Ratings assigned its credit ratings to Laurelin 2016-1 DAC's floating-rate class A, B, C, D, E, and F notes. At closing, Laurelin 2016-1 also issued an unrated subordinated class of notes. Laurelin 2016-1 is a European cash flow collateralized loan obligation (CLO), securitizing a portfolio of primarily senior secured euro-denominated leveraged loans and bonds issued by European borrowers. GoldenTree Asset Management LP is the Investment manager. Laurelin 2016-1 purchased more than 50% of the effective date portfolio from AO Funding Ltd. (the originator). The assets from AO Funding that couldn't be settled on the closing date are subject to participations. The transaction documents require that the issuer and the originator use commercially reasonable efforts to elevate the participations by transferring to the issuer the legal and beneficial interests in such assets as soon as reasonably practicable. Under the transaction documents, the rated notes pay quarterly interest unless there is a frequency switch event. Following this, the notes permanently switch to semiannual payment. The portfolio's reinvestment period ends approximately four years after closing. S&P's ratings reflect its assessment of the collateral portfolio's credit quality, which has a weighted-average 'B' rating. S&P considers that the portfolio is well-diversified, primarily comprising broadly syndicated speculative-grade senior secured term loans and senior secured bonds. Therefore, S&P has conducted its credit and cash flow analysis by applying its criteria for corporate cash flow collateralized debt obligations. In S&P's cash flow analysis, it used the EUR400 million target par mount, a weighted-average spread (4.30%), a weighted-average coupon (5.25%), and a weighted-average recovery rates at each rating level. S&P applied various cash flow stress scenarios, using four different default patterns, in conjunction with different interest rate stress scenarios for each liability rating category. Elavon Financial Services Ltd. is the bank account provider and custodian. The documented downgrade remedies are in line with S&P's current counterparty criteria. Following the application of S&P's nonsovereign ratings criteria, it considers that the transaction's exposure to country risk is sufficiently mitigated at the assigned rating levels. This is because the concentration of the pool comprising assets in countries rated lower than 'A-' is limited to 10% of the aggregate collateral balance. The issuer is bankruptcy remote, in accordance with S&P's European legal criteria. Following S&P's analysis of the credit, cash flow, counterparty, operational, and legal risks, S&P believes its ratings are commensurate with the available credit enhancement for each class of notes. RATINGS LIST Laurelin 2016-1 DAC EUR407.40 Million Senior Secured Floating-Rate Notes (Including Subordinated Notes) Class Rating Amount (mil. EUR) A AAA (sf) 221.00 B AA (sf) 67.50 C A (sf) 27.00 D BBB (sf) 19.50 E BB (sf) 21.00 F B (sf) 7.00 Sub NR 44.40 Sub--Subordinated loan. NR--Not rated. TAURUS 2015-3: Moody's Affirms B3(sf) Rating on Class F Notes ------------------------------------------------------------- Moody's Investors Service has affirmed the ratings of six classes of Notes issued by TAURUS 2015-3 EU DESIGNATED ACTIVITY COMPANY. Moody's rating action is as follows: Issuer: TAURUS 2015-3 EU DESIGNATED ACTIVITY COMPANY -- EUR60.9 million Class A Notes, Affirmed Aaa (sf); previously on Sep 29, 2015 Definitive Rating Assigned Aaa (sf) -- EUR14.4 million Class B Notes, Affirmed Aa3 (sf); previously on Sep 29, 2015 Definitive Rating Assigned Aa3 (sf) -- EUR15.9 million Class C Notes, Affirmed A3 (sf); previously on Sep 29, 2015 Definitive Rating Assigned A3 (sf) -- EUR19 million Class D Notes, Affirmed Baa3 (sf); previously on Sep 29, 2015 Definitive Rating Assigned Baa3 (sf) -- EUR17.7 million Class E Notes, Affirmed Ba2 (sf); previously on Sep 29, 2015 Definitive Rating Assigned Ba2 (sf) -- EUR17.9 million Class F Notes, Affirmed B3 (sf); previously on Sep 29, 2015 Definitive Rating Assigned B3 (sf) Moody's does not rate the Class X Notes. RATINGS RATIONALE The affirmation action reflects the stable performance of the transaction since closing. The default probability of the securitized loans (both during the term and at maturity) as well as Moody's value assessment of the collateral remain unchanged. Moody's default risk assumptions continue to remain medium for the Bilux loan and medium-high for the TEIF loan. Moody's affirmation reflects a base expected loss in the range of less than 5% of the current balance, unchanged since closing. Moody's derives this loss expectation from the analysis of the default probability of the securitized loans (both during the term and at maturity) and its value assessment of the collateral. ========= I T A L Y ========= DEMM SPA: Sept. 12 Deadline Set for Expressions of Interest ----------------------------------------------------------- In execution of the sale program of the business complex approved by the Ministry of Economic Development with decree dated April 28, 2016, DEMM S.p.A., under Extraordinary Administration, intends to begin a procedure for the sale of the business complex of DEMM. The business complex covered by the procedure includes complex of assets, licenses, authorizations, certifications and any other assets, services or activities for the business activity carried out by DEMM in the field of gears and high precision mechanical parts production. In order to have a complete and detailed description of the offered products, of the relevant market and of the Company's profile, please see the document available at www.demm.it Prof. Avv. Umberto Tombari, DEMM's Extraordinary Commissioner, invites all parties interested in purchasing the Company's business complex to submit a non-binding expression of interest in accordance with terms and conditions set forth in the integral version of the present call, available, in Italian and in English, to the website www.demm.it These expressions of interest shall be submitted, by registered mail or internationally recognized overnight delivery service, charges prepaid, not later than 12:00 a.m. on September 12, 2016, in a closed envelope setting out the wording "Expression of Interest -- DEMM Procedure" to the Commissioner Prof. Avv. Umberto Tombari, Piazza Dell'Indipendenza 21, 50129 Firenze (Fi), and identifying the sender. Any request of clarification shall be sent, by email only, to the following address: demmbid@demm.it, mentioning in the object "Clarification DEMM Procedure". ITALCEMENTI SPA: Moody's Hikes Corporate Family Rating to Ba1 ------------------------------------------------------------- Moody's Investors Service upgraded Italcementi S.p.A.'s (ITC) Corporate family (CFR) rating and probability of default (PDR) rating to Ba1 and Ba1-PD from Ba3 and Ba3-PD respectively. Furthermore Moody's upgraded ITC's MTN programme rating to (P)Ba1 from (P)Ba3 and Ciments Francais S.A.'s bond rating to Ba1 from Ba2. The outlook on all ratings is positive. Today's rating action concludes the rating review on ITC initiated on July 29, 2015 following the announcement from HeidelbergCement AG (HC) to acquire a 45% stake in ITC. "The upgrade of Italcementi's ratings to Ba1 follows the takeover of 45% of the shares by HeidelbergCement and HeidelbergCement's tender offer for the remaining 55% of ordinary shares and brings the ratings in line with that of HeidelbergCement (Ba1/positive) which has a stronger credit profile as indicated in our press release as of July 29, 2015 when Italcementi's ratings have been placed under review for upgrade," says Falk Frey Senior Vice President and lead analyst at Moody's for Italcementi. Although, Italcementi's debt holders do not benefit from guarantees from HeidelbergCement, we believe that they are not in a materially weaker position compared to the debt holders of HeidelbergCement despite a somewhat weaker cash generation capability of Italcementi stand alone on a pro forma basis and a somewhat higher leverage at the outset. However, Moody's expects that credit metrics will benefit from debt reduction following the expected refinancing of Italcementi's bank debt at the level of HeidelbergCement and the refinancing of the legacy Ciments Francais and ITC bonds over time ," Frey added. A list of affected ratings can be found at the end of this press release. RATINGS RATIONALE The combination of HeidelbergCement and Italcementi creates a worldwide leading producer of cement, aggregates, ready-mix concrete, asphalt and related services. On a combined pro forma basis, HC and ITC sold 124.5 million tons of cement and 281.9 million tons of aggregates in 2015. On a pro forma basis, the group recorded net sales of EUR17.8 billion for fiscal year 2015. Moody's generally views the strategic rationale of the merger as positive as the merged group will have an even more geographically balanced presence than former HC and ITC on a stand-alone basis. ITC's strong market positions in France and Italy as well as in Egypt, Marocco and Thailand enlarges HC's global foortprint in mature as well as in emerging markets. This business profile should provide a better resilience to cyclical swings in demand for cement, aggregates and ready-mix concrete in individual countries. Nonetheless, the merged company will remain exposed to the cyclicality of the cement and aggregates industry. In addition, the merger bears the potential for a sizable amount of synergies to be generated over time although leading to some upfront expenses and cash outflows. Moody's also positively notes that the targeted proceeds from the asset disposals of at least EUR1.0 billion will be used to repay debt thus mitigating the negative impact from the combination with Italcementi, which exhibits higher leverage, and, hence, a weaker capital structure. The rating also takes into account the challenges related to the realisation of the identified synergies and the timeline of the savings to be generated. WHAT COULD CHANGE THE RATING -- UP/DOWN The ratings of ITC could be upgraded in case of an upgrade of HC's ratings. An upgrade of HC to Baa3 could materialize in case of (1) a successful and timely execution of the acquisition of Italcementi; (2) realization of the targeted synergies of EUR400 million by 2018; (3) higher than expected cash inflow from the planned asset disposals and (4) operating performance and profitability improvements driven by volume growth and cost synergies post merger evidenced in RCF/net debt above 20% and a reduction of the Debt/EBITDA ratio to below 3.5x, sustainably. Moreover, a rating upgrade to Baa3 would require HC to commit to financial policies that balance the interest of creditors and shareholders and maintain credit metrics in line with an investment grade rating. A downgrade of ITC's ratings could occur in case of a downgrade of HC's ratings. Moody's might consider downgrading HC if (1) the timeline of the integration and achievement of synergies or realization of asset disposal valuation would fall materially behind expectations or (2) legal and/or regulatory requirement would lead to a significant change in the current merger plan; (3) such events as well as weaker-than-expected performance which would result in the inability of the company to sustain RCF/net debt of at least 20% over the following years. List of affected ratings Upgrades: -- Issuer: Italcementi S.p.A. -- LT Corporate Family Rating, Upgraded to Ba1 from Ba3 -- Probability of Default Rating, Upgraded to Ba1-PD from Ba3-PD -- Senior Unsecured MTN, Upgraded to (P)Ba1 from (P)Ba3 -- Issuer: Ciments Francais S.A. -- Senior Unsecured Regular Bond/Debenture, Upgraded to Ba1 from Ba2 -- Issuer: Italcementi Finance S.A. -- BACKED Senior Unsecured Regular Bond/Debenture, Upgraded to Ba1 from Ba3 -- BACKED Senior Unsecured MTN, Upgraded to (P)Ba1 from (P)Ba3 Outlook Actions: -- Issuer: Italcementi S.p.A. -- Outlook, Changed To Positive From Rating Under Review -- Issuer: Ciments Francais S.A. -- Outlook, Changed To Positive From Rating Under Review -- Issuer: Italcementi Finance S.A. -- Outlook, Changed To Positive From Rating Under Review The Italcementi group, headquartered in Bergamo, Italy, is one of the top five cement producers globally, with an installed cement capacity in excess of 60 million tons and sales of EUR4.3 billion in 2015. The group's cement and clinker business, which accounts for more than two-thirds of total sales, is supplemented by aggregates and ready-mix concrete businesses. Italcementi is active in 21 countries, with an emphasis on the Mediterranean basin. ITALY: Finance Minister Rejects "Bail-in" for Banks --------------------------------------------------- James Politi, Gabriel Wildau and Yuan Yang at The Financial Times report that Pier Carlo Padoan, the Italian finance minister, has denied that Italy's banks are suffering from systemic problems and rejected a "bail-in" of private investors as he sought to reassure global markets over the state of Italy's financial institutions. "We are going in the right direction, there is no risk in terms of systemic stability," Mr. Padoan, as cited by the FT, said at the end of the G20 meeting of finance ministers and central bank chiefs in the Chinese city of Chengdu on July 24, adding that there were a few "contained" critical cases. The Italian reassurances came as the G20 pledged to use "all policy tools" to support growth, saying they were ready to respond to any negative fallout from Brexit amid uncertainty over protectionism and Britain's future relations with the EU, the FT relays. Mr. Padoan's comments come ahead of a key week for Italian banks, which will be closely watched when the results of European-wide stress tests are published on July 29, possibly leading one or more of them to rush to raise new capital, the FT notes. The Italian banks have been disproportionately hit in the market turmoil following last month's Brexit vote because they are saddled with non-performing loans dating back to the recession, the FT discloses. Results of the stress tests raise the prospect of a public injection of cash by the Italian government, which would probably involve a hit to private investors in the banks under tough EU state aid rules, the FT states. But Italy has also been trying to arrange a private-sector rescue to avoid such a scenario and Mr. Padoan ruled out a so-called bail-in "for the moment", according to the FT. SILENUS EUROPEAN: S&P Lowers Rating on Class D Notes to D --------------------------------------------------------- S&P Global Ratings lowered its credit rating on Silenus (European Loan Conduit No. 25) Ltd.'s class D notes. At the same time, S&P has affirmed its ratings on the class C, E, F, and G notes. Silenus (European Loan Conduit No. 25) is a commercial mortgage- backed securities (CMBS) transaction that closed in March 2007. It was originally backed by 17 loans. Of the loans, 16 have repaid, including two at a loss. The rating actions follow S&P's review of the remaining loan in this transaction. VIRGILIO LOAN (FORMERLY ORAZIO, 100% OF THE POOL) The loan is secured against a portfolio of three office properties located in Naples, Rome, and Milan, as well as 41 retail assets in smaller northern Italian cities. The current securitized balance is EUR118.6 million. The loan was transferred to special servicing on May 6, 2011, due to a breach of the loan-to-value (LTV) ratio covenant. The loan has since been restructured and all assets and liabilities in the Orazio senior loan have been transferred to Fondo Virgilio, a new Italian closed-end speculative common property investment fund, which will replace the original borrower. In addition, the maturity date of the senior loan was extended until November 2017. Until then, the borrower is required to dispose of the properties by specific periods. In addition, the Italian issuer special servicer has confirmed that, on June 29, 2016, the buyer and the Italian special servicer signed a conditional purchase agreement for the Milan property for a gross sales price of EUR49,960,000. The purchase will become legally effective following the expiry of a 60 day pre-emption period during which the superintendent to cultural heritage has the option to purchase the property. As of the May 2016 interest payment date (IPD), the loan's securitized LTV ratio was 84.4%. This is based on a March 2016 valuation of EUR140.5 million. S&P has assumed principal losses on the loan in its 'B' rating stress scenario. INTEREST SHORTFALLS On the May 2016 IPD, only the class C notes received the full interest due. The class D notes received only EUR46,356 of the EUR62,284 interest due, and the class E and F notes did not receive any interest. The class G notes did not accrue any interest as a nonaccruing interest amount has been fully allocated to these notes. In S&P's view, the interest shortfalls experienced by the transaction are due to a combination of spread compression between the loan and the notes, as well as high prior-ranking transaction costs that, together, have resulted in insufficient funds available to meet all interest payments due on the notes. RATING RATIONALE S&P's ratings in this transaction address the timely payment of interest and the ultimate payment of principal no later than the May 2019 legal final maturity date. Although S&P considers the available credit enhancement for the class C notes to be adequate to mitigate the risk of losses from the remaining loan in higher stress scenarios, S&P has affirmed its 'B (sf)' rating due to the increased risk of cash flow disruption. S&P also considers the available credit enhancement for the class D notes to be adequate to mitigate the risk of losses from the remaining loan in higher stress scenarios. However, due to interest shortfalls on this class, S&P has lowered to 'D (sf)' from 'CCC+ (sf)' its rating on this class of notes. The interest shortfalls represent a failure to pay timely interest, which S&P believes is unlikely to repay within 12 months. S&P has also affirmed its 'D (sf)' ratings on the class E, F, and G notes as they have continued to experience interest shortfalls. RATINGS LIST Silenus (European Loan Conduit No. 25) Ltd. EUR1.246 bil commercial mortgage-backed variable- and floating- rate notes Rating Class Identifier To From C 826872AD5 B (sf) B (sf) D 826872AE3 D (sf) CCC+ (sf) E 826872AF0 D (sf) D (sf) F 826872AG8 D (sf) D (sf) G 826872AH6 D (sf) D (sf) ===================== N E T H E R L A N D S ===================== AVAST HOLDING: S&P Affirms 'BB-' CCR, Outlook Stable ---------------------------------------------------- S&P Global Ratings affirmed its 'BB-' long-term corporate credit rating on Netherlands-based security software company Avast Holding B.V. and the group's financing subsidiary Avast Software B.V. The outlook is stable. S&P affirmed the issue rating on the existing senior secured debt issued by Avast Software and expect to withdraw the ratings following the redemption at closing of the transaction. S&P also assigned its 'BB-' issue rating on the proposed $1.685 million senior secured debt to be issued by Avast Software. S&P removed all ratings from CreditWatch with negative implications, where they were placed on July 12, 2016. The affirmation follows S&P's review of Avast's business plan and financial policy after its announced acquisition of AVG Technologies for a total consideration of $1.3 billion. In S&P's view, integration risks and the expected material increase in leverage to about 4.5x-5.0x at closing (as adjusted by S&P Global Ratings) are offset by the company's increased scale, significant cost synergy potential, and strong ability to deleverage quickly below 4x in 2018 thanks to is solid free operating cash flow (FOCF) generation and high EBITDA growth. S&P understands that Avast targets a significant headcount reduction in the combined workforce in the next two years. S&P also understands that the targeted net leverage is between 2.0x-2.5x, which corresponds to about 3x-4x S&P Global Ratings-adjusted leverage. In S&P's view, key shareholders of Avast, including its founders, will pursue a moderately conservative financial policy. Avast is planning to fund the acquisition through committed debt financing of $1.685 billion, which we understand will also include an undrawn revolving credit facility and the refinancing of the outstanding loan at Avast of about $260 million and about $85 million net debt at AVG. Despite private equity firm CVC's more than 40% stake in Avast, S&P do not consider that it has control of the company. This primarily reflects S&P's view that the company's other shareholders (including the founders), who own about 45% of the company, are not financial sponsors. S&P also notes CVC's lack of push rights on the group's strategy or financial policy, as well as its lack of control over the board of directors. S&P continues to assess Avast's business risk as weak. S&P thinks that there is a meaningful execution risk in integrating AVG, which is a larger company by revenues and number of employees. Furthermore, in S&P's view the product diversification remains limited and SMB and enterprise revenues are only modest even after merging with AVG. The combined group's revenues and EBITDA continue to be reliant on the niche consumer security software segment, representing more than 60% of the combined revenues on a pro forma basis. In S&P's view, consumer security software is much less "sticky" than the enterprise segment. In addition there is a relatively low free-to-premium-user conversion, although S&P thinks this provides prospects for improvement over the medium term. We also note that Avast operates in the highly fragmented security software market, where there is strong competition from much larger companies. These risks are partly mitigated by the combined group's increased scale and global diversification. Avast is stronger in some emerging markets like Brazil, while AVG has a better position in some developed English speaking countries like the U.S. With about 265 million PC users, the combined group will be the world's largest provider of freemium consumer security software, and number 3 globally by revenue after Symantec and Intel. The group will be better positioned to monetize mobile customers thanks to AVG's carrier relationships and increased customer base to attract advertisers (together, 165 million mobile users). S&P also thinks that the combined group will continue to benefit from Avast's solid operating efficiency, supported by its online sales model and highly automated detection process, which translates into higher-than-average profitability. S&P's base case assumes: -- The acquisition of AVG will be completed by the end of 2016. Figures for 2016 are pro forma and include AVG for the full year. -- A continued shift in demand to smartphones and tablets away from PCs, leading to a decline in the PC user base. This is mitigated by the continued increase in conversion of free-to-premium PC users, resulting in an annual consumer PC antivirus subscription revenue growth of about 5%-7% in 2016-2018. -- Mobile revenues growing annually by about 20%-30% but still representing less than 20% of the total revenues in 2018. -- Declining platform revenues mainly due to the decrease in browser clean-up sales. Flattish SMB revenues on the back of fairly small size compared to large competitors. -- Some increase in underlying operating expenditure mainly because of investment in marketing to compete especially Chinese competitors. -- S&P expects Avast to quickly integrate AVG, including harmonizing of products, streamlining R&D and optimizing overhead functions, resulting in about $40 million cost synergies in 2017, increasing to at least $100 million in 2018. -- About $80 million integration costs, mainly in 2016 and 2017, included in EBITDA, and about $90 million transaction costs at closing, excluded from EBITDA. -- Annual capital expenditure (capex) to sales of about 4% and modest cash inflows from working capital thanks to the deferred revenue model. Based on these assumptions, S&P arrives at these S&P Global Ratings-adjusted credit measures in 2016-2018: -- EBITDA margin percentage of 40%-45% in 2016, 45%-50% in 2017, and further increasing to 55%-60% in 2018 once the integration is mostly completed. -- FOCF to debt above 13% in 2017 and above 18% in 2018. -- EBITDA interest coverage of about 4x in 2017 and more than 5x in 2018. -- Gross debt to EBITDA of about 4.5x-5.0x on a pro forma basis at closing, 4.3x-4.7x in 2017, and about 3.3x-3.6x in 2018. S&P assesses Avast's liquidity position as strong. This is primarily supported by S&P's forecast of meaningful FOCF generation and limited debt amortizations. As of March 31, 2016, S&P anticipates that Avast's sources of liquidity will cover its uses by more than 2x in the following 24 months. However, given that Avast is a private company, with no publicly traded debt or equity, S&P do not view its standing in credit markets as high. Therefore S&P do not assess Avast's liquidity as exceptional. Avast's main liquidity sources are: -- Cash balances of $187 million as of March 31, 2016; -- Undrawn backup revolving credit facility of $40 million, to be increased o $85 million; -- Annual FFO of $150 million-$170 million pre-acquisition of AVG, and well above $200 million including AVG; and -- Modest positive working capital inflows thanks to the deferred revenue model. Avast's main liquidity uses are: -- Net cash outflow of about $140 million-$150 million relating to the acquisition of AVG; -- Annual capex of about $30 million including AVG; and -- Modest scheduled annual debt amortization of $80 million post-issuing the new debt to acquire AVG. The stable outlook reflects S&P's assumption that Avast will be successfully integrating AVG. In addition, S&P expects that continued solid growth prospects for software security solutions, coupled with improving margins post-closing due to meaningful cost synergies and free cash flow generation, will reduce the group's leverage comfortably below 4x in 2018. S&P could lower the rating if Avast is not successful in integrating AVG reasonably quickly, resulting in revenues not growing in line with S&P's base case or materially lower cost synergies, and leading to significantly lower margins than S&P expects. S&P could also lower the rating if it considered that Avast's financial policy would not support a reduction in adjusted leverage below 4x due to aggressive shareholder distributions or additional debt-financed acquisitions. S&P could raise the rating if Avast successfully integrates AVG and diversifies its revenue portfolio meaningfully outside traditional consumer PC antivirus segment, while improving its adjusted EBITDA margin back to about 60%. A potential upgrade would assume gross leverage of less than 4x on a sustainable basis, and FOCF to debt of about 20%. CAIRN CLO VI: Moody's Assigns B2 Definitive Rating to Cl. F Debt ---------------------------------------------------------------- Moody's Investors Service announced that it has assigned the following definitive ratings to notes issued by Cairn CLO VI B.V. (the "Issuer" or "Cairn VI CLO"): -- EUR212,000,000 Class A Senior Secured Floating Rate Notes due 2029, Definitive Rating Assigned Aaa (sf) -- EUR42,100,000 Class B Senior Secured Floating Rate Notes due 2029, Definitive Rating Assigned Aa2 (sf) -- EUR19,600,000 Class C Senior Secured Deferrable Floating Rate Notes due 2029, Definitive Rating Assigned A2 (sf) -- EUR17,150,000 Class D Senior Secured Deferrable Floating Rate Notes due 2029, Definitive Rating Assigned Baa2 (sf) -- EUR24,000,000 Class E Senior Secured Deferrable Floating Rate Notes due 2029, Definitive Rating Assigned Ba2 (sf) -- EUR8,700,000 Class F Senior Secured Deferrable Floating Rate Notes due 2029, Definitive Rating Assigned B2 (sf) RATINGS RATIONALE Moody's definitive rating of the rated notes addresses the expected loss posed to noteholders by the legal final maturity of the notes in 2029. The definitive 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, Cairn Loan Investments LLP ("CLI"), has sufficient experience and operational capacity and is capable of managing this CLO. Cairn VI CLO is a managed cash flow CLO. At least 90% of the portfolio must consist of senior secured loans and senior secured bonds and up to 10% of the portfolio may consist of unsecured senior loans, second-lien loans, mezzanine obligations and high yield bonds. The portfolio is expected to be at least 60% ramped up as of the closing date and to be comprised predominantly of corporate loans to obligors domiciled in Western Europe. CLI 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 and credit improved obligations, and are subject to certain restrictions. In addition to the six classes of notes rated by Moody's, the Issuer will issue two subordinated classes, Class M-1 (EUR 17.65m) and Class M-2 notes (EUR 20.80m), which will not be rated. 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. Factors that would lead to an upgrade or downgrade of the ratings: 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. CLI's investment decisions and management of the transaction will also affect the notes' performance. CAIRN CLO VI: Fitch Assigns 'B-sf' Rating to Class F Notes ---------------------------------------------------------- Fitch Ratings has assigned Cairn CLO VI B.V.'s notes final ratings, as: Class A: 'AAAsf'; Outlook Stable Class B: 'AAsf'; Outlook Stable Class C: 'Asf'; Outlook Stable Class D: 'BBBsf'; Outlook Stable Class E: 'BBsf'; Outlook Stable Class F: 'B-sf'; Outlook Stable Class M-1: not rated Class M-2: not rated Cairn CLO VI B.V. is a cash flow collateralized loan obligation (CLO). KEY RATING DRIVERS 'B'/'B-' Portfolio Credit Quality The average credit quality of the identified portfolio is in the 'B'/'B-' range. Fitch has public ratings or credit opinions on 84 of the 85 assets in the identified portfolio. The Fitch weighted average rating factor of the identified portfolio is 29.71. High Recovery Expectations At least 90% of the portfolio will comprise senior secured obligations. Fitch views the recovery prospects for these assets as more favorable than for second-lien, unsecured and mezzanine assets. Fitch has assigned Recovery Ratings (RRs) to 84 of the 85 assets in the identified portfolio. The Fitch weighted average recovery rate of the identified portfolio is 69.74%. Diversified Asset Portfolio The transaction documents provide the investment manager with the flexibility to choose different obligor concentration limits within the portfolio. This covenant ensures that the asset portfolio will not be exposed to excessive obligor concentration. The investment manager will then have the flexibility to trade obligor concentration in the portfolio against credit quality and excess spread. Unhedged Non-Euro Assets Exposure The transaction is allowed to invest up to 5% of the portfolio in non-euro-denominated fixed rate assets. Unhedged non-euro assets are limited to a maximum exposure of 5% of the portfolio, subject to principal haircuts. The manager can only invest in unhedged assets if, after the applicable haircuts, the aggregate balance of the assets is above the reinvestment target par balance. TRANSACTION SUMMARY Net proceeds from the issuance of the notes are being used to purchase a EUR350 mil. portfolio of mostly European leveraged loans and bonds. The portfolio is managed by Cairn Loan Investments LLP. The transaction includes a four-year reinvestment period. The transaction documents may be amended, subject to rating agency confirmation or noteholder approval. Where rating agency confirmation relates to risk factors, Fitch will analyse the proposed change and may provide a rating action commentary if the change has a negative impact on the ratings. Such amendments may delay the repayment of the notes as long as Fitch's analysis confirms the expected repayment of principal at the legal final maturity. If in the agency's opinion the amendment is risk-neutral from a rating perspective Fitch may decline to comment. Noteholders should be aware that confirmation is considered to be given if Fitch declines to comment. Fitch's "Criteria for Interest Rate Stresses in Structured Finance Transactions and Covered Bonds," dated 17 May 2016, includes stresses to address the risk of negative interest rates in structured finance transactions. European CLOs are unlikely to be affected by negative interest rates due to the prevalence of Euribor floors in the European loan market. Therefore, Fitch applied the standard (positive) interest rate downward stresses in our analysis. RATING SENSITIVITIES A 25% increase in the obligor default probability would lead to a downgrade of up to two notches for the rated notes while a 25% reduction in expected recovery rates would lead to a downgrade of up to three notches for the rated notes. =========== N O R W A Y =========== NORSKE SKOGINDUSTRIER: S&P Raises CCR to 'CCC+', Outlook Stable --------------------------------------------------------------- S&P Global Ratings said that it has raised its long-term corporate credit rating on Norway-based publication paper producer Norske Skogindustrier ASA to 'CCC+' from 'CCC-'. The outlook is stable. The 'C' short-term corporate credit rating was affirmed. At the same time, S&P raised its issue rating on the company's senior secured notes to 'CCC+' from 'CCC-'. S&P revised the recovery rating to '3' from '4', indicating its expectation of recovery in the lower half of the 50%-70% in the event of a default. S&P also raised its issue rating on the company's senior unsecured notes to 'CCC-' from 'C'. S&P's '6' recovery rating on these notes remains unchanged, indicating negligible (0%-10%) recovery prospects in a default scenario. S&P removed all the ratings from CreditWatch, where it placed them with developing implications on April 29, 2016. The upgrade follows Norske Skog's repayment of its notes due in June 2016 and improved operational performance in the first half of this year. The company now faces limited debt maturities until late 2019 and therefore has some time to further strengthen its earnings base and diversify away from publication paper. However, our 'CCC+' rating indicates that we still regard the capital structure as unsustainable in the long term, although S&P views the risk of a default as limited in the coming 12 months. S&P thinks that Norske Skog's ability to meet future debt maturities will remain highly dependent on favorable economic, financial, and industry conditions. "We consider Norske Skog's business risk profile to be vulnerable, since its business model is fully exposed to publication paper used for newspapers, magazines, direct advertising, and books. The market for newsprint and magazine paper in Europe and Australia is depressed, with structurally falling demand due to ongoing digitalization and periods of overcapacity, which lead to recurring price pressure. Although capacity closures occur on a regular basis, they often have a limited impact on pricing because demand keeps declining as the market remains fragmented. Several smaller players compete for market share, which limits sustained improvement in profitability. We think that Norske Skog's new business strategy to diversify away from paper (for example into biogas, pellets, and tissue paper) makes sense, but that the financial impact will be relatively small over the next few years compared with that of the existing paper business. In addition, these investments come with execution and timing risks, as highlighted by the cancellation of a partnership to convert a paper machine to produce tissue paper at the Bruck mill in Austria," S&P said. S&P views Norske Skog's highly leveraged financial risk profile as a constraint to the rating. Although the company has managed to cut debt through its recent debt exchange, rights issue, and repayment of debt maturities, S&P thinks that further deleveraging is highly dependent on the company's ability to increase profitability in the paper segment as well as deliver growth projects on time and on budget. S&P thinks that adjusted debt to EBITDA will be at about 7.5x in 2016 and possibly decrease further in 2017 and 2018, depending on operational performance and capital expenditure (capex) levels. "The stable outlook takes into account our forecast that Norske Skog's EBITDA margins will remain at about 10% and internal cost- cutting efforts will offset weakness in paper prices. We expect the company will manage its growth investments carefully and that cash flow after investments will stay slightly positive in the coming three years," S&P said. S&P could lower the rating if Norske Skog's operational performance were to deteriorate, for example as a result of downward pressure on paper prices or rapidly increasing input costs. S&P could also downgrade the company if it announced another financial restructuring. Although highly unlikely in the coming 12 months, S&P could consider raising the rating if Norske Skog's operational performance improved substantially and S&P believed that the improvement could be sustained for a number of years. This could be the result of improved conditions in the European paper market, likely including consolidation and sustained price increases, and the company's successful diversification beyond paper, which would remove uncertainty regarding the refinancing of debt maturities in 2019. =============== P O R T U G A L =============== NOVO BANCO: Unsuccessful Sale Attempts to Hit Portuguese Banks -------------------------------------------------------------- Peter Wise at The Financial Times reports that Portuguese banks, already undercapitalized and loaded with bad debt, are bracing for heavy losses from Lisbon's so far unsuccessful attempts to sell Novo Banco, the lender salvaged from the collapse of Banco Espirito Santo. According to the FT, estimates of the potential bill facing banks, which finance the resolution fund that bailed out Novo Banco in 2014, range from EUR2.9 billion to EUR3.9 billion. Some bankers are even doubtful that the rescued lender will attract any acceptable offers, leading to its possible break-up or liquidation, the FT notes. The sale of Novo Banco is among critical decisions that will shortly determine the future shape of Portugal's banking industry, which the International Monetary Fund has linked with the problems facing Italian lenders as among potential risks to global growth, the FT states. The Bank of Portugal and Lisbon's eight-month-old "anti- austerity" government are also calling for a "systemic solution" to deal with more than EUR30 billion in bad debts and problem assets, adding to other calls for public bailouts of troubled EU banks, the FT discloses. In a recent report, Barclays estimated that Portuguese lenders could need up to EUR7.5 billion to resolve a "systemic banking crisis" that was bringing the country under "close market scrutiny", the FT relays. Headquartered in Lisbon, Novo Banco, S.A. provides various financial products and services to private, corporate, and institutional customers. * * * As reported in the Troubled Company Reporter-Europe on Jan. 6, 2016, Moody's Investors Service downgraded to Caa1 from B2 the senior debt and long-term deposit ratings of Portugal's Novo Banco, S.A. and its supported entities. This follows the Bank of Portugal's (BoP) announcement on Dec. 29, 2015, that it had approved the recapitalization of Novo Banco by transferring EUR1,985 million of senior debt back to Banco Espirito Santo, S.A. (BES unrated). Moody's said the outlook on Novo Banco's deposit and senior debt ratings is now developing. =========================== U N I T E D K I N G D O M =========================== BHS GROUP: MPs Criticize Advisers for Overlooking Weaknesses ------------------------------------------------------------ Ashley Armstrong at The Telegraph reports that a scathing report into the collapse of BHS has criticized advisers who turned a blind eye to the "manifold weaknesses" of Dominic Chappell's bid ahead of his ill-fated purchase of the retail chain from Sir Philip Green. City firms were scorned by the parliamentary report for appearing to "provide an expensive badge of legitimacy to people who would otherwise be bereft of credibility", The Telegraph relates. "Grant Thornton and Olswang were increasingly aware of Retail Acquisitions' manifold weaknesses as purchasers of BHS. They were nonetheless content to take generous fees and lend both their names and reputation to the deal", The Telegraph quotes the report as saying. The firms received GBP1.7 million while Sir Philip has claimed they made GBP8 million in total from BHS, The Telegraph relays. Grant Thornton is a major accountancy firm, while Olswang is a law firm, The Telegraph discloses. According to The Telegraph, the 66-page report by MPs determines that Sir Philip's family extracted billions from BHS since the Greens bought the business in 2000 and failed to invest sufficiently to ensure the retailer remained competitive and to prevent its pension deficit ballooning. The failure of the 88-year-old retailer in April was the "culmination of a sorry litany of failures of corporate governance and greed" as "regulatory concerns were circumvented and advisers were heavily incentivized to progress the deal", the MPs, as cited by The Telegraph, said. The chain collapsed 13 months after Sir Philip sold it to Mr. Chappell's Retail Acquisitions vehicle, The Telegraph recounts. The MPs also concluded that Sir Philip then failed his own test for a suitable buyer as Mr. Chappell did not put in any working capital or find an experienced retail frontman to run BHS when he bought it. BHS Group is a department store chain. The company employs 10,000 people and has 164 shops. COLCHESTER ENGLISH: In Administration After 'Significant Losses' ---------------------------------------------------------------- gazette-news.co.uk reports that a Colchester foreign language school has gone into administration after making "significant losses" because of declining student numbers. Administrators CVR Global has been instructed in a last ditch attempt to find a buyer for Colchester English Study Centre, in Lexden Road, according to gazette-news.co.uk. The report notes that CVR has confirmed each student enrolled in the school's summer programs will be unaffected but if no buyer is found after those programs end, the school, which charges students up to GBP320 per week, will close. Lee De'ath and Richard Toone have been appointed joint administrators of the centre, which is officially named Lexden Centre (Oxford) Limited, the report relays. Mr. De'ath, based at CVR Global's Colchester office, said his appointment has come as a result of "declining student numbers leading to significant losses," the report notes. Mr. De'ath said: "The school continues to operate and we are working with the existing management team to attempt to find a long-term solution for the school to remain open. "The school was established in 1969 and historically has a very strong reputation. "Unfortunately due to a number of factors, including increased competition in the market, it has struggled with declining student numbers in the last few years. "All staff continue to perform their roles and students have been made aware of the situation. "Funding has been secured to enable the school to continue to trade and deliver summer school programs, however if no one can be found to take over the school it will have to close. "We are in the process of talking to a number of parties who are interested in taking over the running of the school and are hopeful of reaching a positive outcome." About half of the school's students, which are aged between 17 and 70, come from southern Europe, the report relays. The remainder is made up of the rest of Europe, Asia, South America and Africa, the report notes. The school caters for beginners and also offers more advanced exams as well as summer programs, the report adds. DECO 11 - UK: Moody's Affirms B3(sf) Rating on Class A-1B Notes --------------------------------------------------------------- Moody's Investors Service has downgraded the ratings of one class of Notes and affirmed the ratings of one class of Notes issued by DECO 11 - UK Conduit 3 p.l.c. Moody's rating action is as follows: Issuer: DECO 11 - UK Conduit 3 p.l.c -- GBP220 million Class A-1A Notes, Downgraded to A3 (sf); previously on May 23, 2016 Affirmed Aa3 (sf) -- GBP74.5 million Class A-1B Notes, Affirmed B3 (sf); previously on May 23, 2016 Affirmed B3 (sf) Moody's does not rate the Class A2, Class B, Class C, Class D, Class E, Class F and the Class X Notes. RATINGS RATIONALE The rating on the Class A1-A Notes is downgraded because Moody's expectation of the timing of the redemption of the Class A1-A notes has changed. Moody's now expects the disposal of the 24 UK office properties securing the largest loan (82.6% of pool balance), Mapeley Gamma to commence later and conclude closer to legal final maturity in July 2020. In June 2016 the special servicer for the Mapeley loan changed to Solutus Advisors Ltd. (Solutus Advisors) from Hatfield Philips International Limited (Hatfield Philips) following a vote by the noteholders. The new asset management plan is still being developed and is expected to be finalized and agreed upon with noteholders in the coming months. Moody's expects a protracted asset management period for this portfolio of secondary quality office properties which is further exacerbated by the current heightened uncertainty around UK commercial real estate markets. Moody's said, "The rating on the Class A1-B Notes is affirmed because there is no change to Moody's recovery expectations following our last review in May 2016." DMG STEELWORKERS: CVR Global Sells Firm Out of Administration ------------------------------------------------------------- accountancyage.com reports that North West manufacturer DMG Steelworkers has been sold out of administration in a pre-pack deal by insolvency and restructuring firm CVR Global, saving 27 jobs. The business and assets have been sold by CVR Global to Time DMG Steelworkers Limited in a pre-pack deal, according to accountancyage.com. The report notes that administrators from CVR Global were called into DMG Steelworkers Limited earlier this month and Craig Povey -- cpovey@cvr.global -- and Richard Toone -- rtoone@cvr.global - - partners at CVR Global, were appointed joint-administrators on July 14. The Wigan-based company operated as a fabricator and erector within the rail, construction, highways and utilities industries and was a specialist in bridges and contemporary steel buildings, incorporating products such as balustrades, railings and radio masts, the report relays. The company was launched in 1995 and employed 27 full-time staff. Craig Povey, of CVR Global, said: "The company was clearly insolvent on a cash-flow basis and was under pressure from creditors including its landlord and Her Majesty's Revenue and Custom. "Despite the difficulties previously faced by the business, it has a strong reputation and good order book. The sale ensures the survival of the business, preserves 27 jobs, and the company is now well placed to move forward," Mr. Povey added. FAIRFIELD (CROYDON): Operator Enters Administration --------------------------------------------------- iq-mag.net reports that the operator of Fairfield Halls has gone bust just days after the south London music and arts venue closed for a two-year period of refurbishment. Fairfield (Croydon) Ltd went into administration after emailing staff to tell them it was unable to pay their redundancy settlements, reports the Croydon Guardian, and appointing Herron Fisher appointed to oversee the bankruptcy proceedings, according to iq-mag.net. The Fairfield, which includes a 1,800-seat concert hall, 750-seat theatre and 500-capacity standing concert area, closed on July 15, the report notes. Its operator had favored a phased redevelopment -- allowing part of the venue to remain open throughout -- but accepted an offer from Croydon Council of around GBP500,000 to close for two years, the report relays. Before its closure, the Fairfield received an annual council grant of GBP740,000, the report notes. Croydon Councillor Tim Godfrey tells the Guardian it has already also paid the company a quarter of a million pounds to fund redundancy pay-outs and other expenses related to the closure, the report says. Asked why the GBP750,000 was insufficient to cover redundancy payments, he says: "That's a question for Fairfield," the report adds. INTERNATIONAL PERSONAL: Fitch Affirms 'BB+' IDR, Outlook Stable --------------------------------------------------------------- Fitch Ratings has affirmed International Personal Finance Plc's (IPF) Long-Term Issuer Default Rating (IDR) at 'BB+', Short-Term IDR at 'B' and senior unsecured debt at 'BB+'. The Outlook on the Long-Term IDR is Stable. KEY RATING DRIVERS IDRS AND SENIOR DEBT IPF's IDRs reflect the group's IPF's significant exposure to credit risk and adverse regulatory developments in its major markets. They also reflect IPF's profitable franchise in unsecured consumer lending in emerging markets and its low -- albeit increasing -- balance sheet leverage. Conducting unsecured lending to consumers of low credit standing in emerging market countries carries inherent risks. Loan impairment is consistently high, and the group can at times be exposed to unexpected regulatory pronouncements, as demonstrated in 2015 by the introduction of new rate-capping legislation in both Poland and Slovakia. In Poland, IPF's largest single market, this has required reworking of the group's local product offering, while in Slovakia the group has elected to withdraw from new lending altogether, but group management has significant experience in adapting its business model around such circumstances. IPF's performance remained stable in 2015. Reported pre-tax profit was stable at GBP100.2 mil., but prior to exchange rate movements, incremental investment costs in the group's digital business and exceptional costs (principally in relation to the closure of the Slovakian business), showed a 10% improvement. Significant arrears are a feature of IPF's business model, with the group maintaining a target impairment-to-revenue ratio of 25%-30%. However, there is limited volatility in impairment, which is adequately provided for and priced into the group's lending. Revenue growth was most significant in Mexico in 2015, and this remains one of the group's geographic areas of greater growth potential, as some of its European markets are by now more mature. Expansion is also expected in IPF's digital business, a combination of the group's own 2014 'hapiloans' development in Poland and the geographically wider operations of MCB Finance, a consumer finance company acquired in 2015. IPF does not hedge accounting profits or losses on its overseas earnings, which had a net negative impact in 2015, but which could draw benefit from recent sterling weakness. IPF has calculated that applying the new Polish pricing regime to its loan portfolio written in the 12 months to 30 June 2015 would have reduced its profit by approximately GBP30m, but estimates that mitigating strategies within its subsequently revised product structure could offset up to half the negative financial impact. The legislation was signed in August 2015, but only became operative from March 2016, so has yet to impact reported results, with customer and competitor responses further influences on the total final effect. IPF's total equity declined 9.5% in 2015 to GBP327m, as dividends, the repurchase of own shares and exchange losses on foreign currency translation exceeded net income. In conjunction with incurring GBP20.4 mil. of goodwill on the acquisition of MCB Finance, this increased the ratio of debt-to-tangible equity to 1.98x (from 1.36x), but Fitch regards this as still adequately conservative for a lending business, notwithstanding the risks inherent within IPF's customer base. Funding is wholesale market-focused, but geographically diversified via local currency bonds and bank facilities. In 2015 the group raised a further EUR100 mil. (due 2021) under its euro medium term note program and PLN200 mil. (due 2020) under its Polish medium term note program, contributing to year-end headroom under borrowing facilities of GBP133 mil. Liquidity and refinancing risks are significantly mitigated by the short duration of the customer loans made (1-2 years) relative to that of IPF's own borrowings, which the group seeks to renew on a rolling basis. The rating of IPF's senior unsecured notes is in line with the group's Long-Term IDR, reflecting Fitch's expectation for average recovery prospects given that IPF's funding is predominantly unsecured. The Stable Outlook on IPF's Long-Term IDR reflects our view that IPF should continue to report adequate profitability while maintaining leverage at current levels. RATING SENSITIVITIES IDRS AND SENIOR DEBT The high-cost credit business and associated consumer protection issues remain subject to political and regulatory scrutiny in many countries. Should mitigation of the effects of the recent Polish law prove more difficult than expected, or further new legislation either in Poland or in other countries in which IPF operates place pressure on the capacity of its business model to generate the revenues required to counterbalance the group's operating costs and impairment risks, a downgrade could result. Fitch does not expect a rating upgrade in the near term, in view of the changes taking place within the business, both in adapting to recent legislation and in developing the group's digital operations. However, in the longer term the rating could benefit from proven success in these areas, while maintaining a conservative balance sheet structure. The senior debt rating is primarily sensitive to a change in IPF's Long-Term IDR. JOSHUA JAMES: In Administration Amid Cash Flow Difficulties ----------------------------------------------------------- Insider Media Limited reports that jobs have been lost at an award-winning East Yorkshire jewelery business which entered administration after experiencing cash flow difficulties. Founded in 2009 by managing director Shaun Bell, Joshua James Jewellery opened its flagship store in Hessle before launching its website in the same year, according to Insider Media Limited. The company was an official stockist of brands such as Thomas Sabo, Trollbeads, Nomination, Links of London and Swarovski, the report notes. Since opening, Joshua James Jewellery won Retailer of the Year at the British Jewellers' Association's (BJA) 125th Anniversary Awards and was listed as one of six finalists in the E-tailer of the Year category of the UK Watch and Jewellery Awards in 2012, 2013 and 2014, the report relays. On July 13, 2016, Keith Marshall and Gareth Harris of RSM Restructuring Advisory were appointed joint administrators of the business, the report notes. Joshua James experienced a number of difficulties which impacted cash flow and could not be overcome, despite a number of cost cutting measures and profit improvement initiatives being deployed, the report notes. As a result, the company was closed on 6 July by Bell and all 13 employees were made redundant, the report relays. Mr. Marshall said an agreement was reached for Joshua James' stock to be sold to a new company, Joshua James Ventures Ltd, which has provided a live outlet for the remaining stock to be sold and ultimately realize a "significantly higher" amount for the company as oppose to selling at auction, the report notes. "As part of the stock sale agreement it was agreed that customers who have unfulfilled orders or who are awaiting refunds for returns would be dealt with by Joshua James Ventures Ltd," added Mr. Marshall, the report relays. MAXWELL COMMUNICATION: Scheme Distribution Scheduled Today ---------------------------------------------------------- The Joint Administrators of Maxwell Communication Corporation plc disclosed that the 15th and final distribution under the Company's Scheme of Arrangement and Plan of Reorganization will be paid on July 26, 2016. Bonds covered: -- DM150,000,000 6% bonds of 1988/1993 -- ECU75,000,000 8 3/8% bonds of 1988/1993 -- SFr150,000,000 5% bonds of 1988/1995 Holders of Distribution Certificates relating to the bonds should present Distribution Coupon No. 15 to their bank, or any branch of the relevant agent bank or at the address provided in order to receive the 15th and final distribution. Failure to present the relevant Distribution Coupon for payment within six months from July 26, 2016, will result in the funds being paid into the UK Court with the result in the funds being paid into the UK court with the result that the holder of the distribution coupon will thereafter need to apply to the Court in respect therof. Please note that funds in SFR will be deposited with the Court in the equivalent US Dollar amount. Agent Bank for the ECU and DM Bonds UniCredit Bank AG (formerly Bayerishce Hypo-un Vereinsbank AG) Am Eisbach 4 D-80538 Munich Federal Republic of Germany Attention: GPF4 Securities Issuance Services Agent Bank for the Swiss Franc Bonds Credit Suisse AG 8070 Zurich Switzerland Attention: SHDR 9 PLASRECYCLE: In Administration, Seeks Buyer ------------------------------------------- businessgreen.com reports that London-based plastic bag recycling business Plasrecycle is seeking a new buyer after entering administration. The firm, which has operated a GBP12 million recycling plant in Woolwich, South East London since 2013, is backed by green investors including waste advisory body WRAP, the London Waste and Recycling Board and the Foresight Environmental Fund, according to businessgreen.com. According to a statement from administrators EY, Plasrecycle was forced to call in administrators after it effectively "ran out of cash," the report notes. "The company was seeking additional investment of GBP6 million to improve efficiencies and increase capacity," EY said, the report notes. "However, due to the extent of the ongoing losses at the lower levels of production and the level of existing debt used to fund the start-up losses, it was not possible to obtain this investment and the company effectively ran out of cash." However, EY said the firm still has "all the fundamentals to be a significantly profitable business," the report relays. Plasrecycle's plant is able to process 20,000 tons of plastic waste every year from retailers, waste management firms and local authorities -- equivalent to more than 2.5 billion plastic bags, the report notes. The waste material is processed to create a plastic granulate for black bin bags, plastic bags and damp proof membranes. Some 20 members of staff have been made redundant, with the remaining 16 employees staying on to manage the conversion of the plant's remaining stock while a buyer is sought, the report says. EY said it is seeking expressions of interest and hopes to conclude a swift sale before production ceases, the report adds. * UK: Insolvency Fee Hike to Hit Insolvent Companies' Creditors --------------------------------------------------------------- New and increased government insolvency fees, introduced on July 21, will hurt creditors of insolvent companies and individuals and undermine the UK insolvency regime, warns insolvency and restructuring trade body R3. Among other new fees, the government is introducing a fee of GBP6,000 in every compulsory liquidation or bankruptcy, even when the case is handled by a private sector insolvency practitioner rather than the government's Official Receiver. A further fee of 15% of all realisations will apply in all Official Receiver-run cases. The government estimates the new fees will cost creditors almost GBP8 million per year. The government, which automatically handles compulsory liquidations and bankruptcies in the first instance, has also changed its guidance on passing insolvency cases to licensed insolvency practitioners. Traditionally, the Official Receiver has only kept cases which are straight-forward or do not have any assets to be realised. The change will allow the government to hold onto more cases, even when a majority of creditors seek an insolvency practitioner appointment. Unlike insolvency practitioners, the government's Official Receivers are not overseen by an independent regulator and they do not have their fees approved by creditors. Official Receivers do not need to meet the same level of qualifications or standards as insolvency practitioners. Andrew Tate, R3 president, says: "The government's new insolvency fees are a very bad deal for the UK's creditors." "The insolvency profession understands the government needs money to fund its Official Receivers. But disenfranchising creditors, holding onto cases its staff may not be qualified to handle, and forcing creditors to pay new, uncompetitive fees undermines the insolvency regime and will mean fewer returns." "By threatening creditor returns, the government could undermine the UK's World Bank insolvency ranking. Improving this ranking was one of the government's manifesto commitments." Andrew Tate adds: "The government is putting creditors at risk of seeing fewer returns, and is asking them to pay more for the pleasure. The additional GBP6,000 charge for every case, even on the simplest case where the government does nothing, is essentially a tax on creditors who have already lost money." Fees are a necessity in insolvency work. Without them, money would not be returned to creditors in an orderly and fair fashion after an insolvency. However, the ability to charge fees should come with responsibilities." "Insolvency practitioners' fees are approved by creditors and insolvency practitioners are heavily regulated. The fees regime for insolvency practitioners was further improved recently to allow even more creditor oversight. The government has introduced new fees without warning or consultation and is not working to the same standards as insolvency practitioners and is not treating creditors fairly." Cost of becoming bankrupt increases -- three months after a decrease Existing fees have also been increased by the government. Changes include a GBP25 increase in the cost to an individual applying for bankruptcy contradicting the government's aim to improve access to debt solutions. Andrew Tate says: "When people are in financial distress, it's important that they can access a debt solution appropriate to their needs. It has long concerned us that entering bankruptcy is only possible with the payment of high, up-front government and court fees. Just three months after trumpeting a cut in these costs, the government has increased them again." "The government should be making it easier for people to resolve unsustainable debts, not harder." Before April 2016, people had to pay GBP705 in government and court fees before they could enter bankruptcy. From April, online applications became available at a reduced fee of GBP655. Only three months later, the cost of online applications has been increased again to GBP680. =============== X X X X X X X X =============== * Moody's Says European Firms' Diversity to Protect Profitability ----------------------------------------------------------------- European chemical companies' high degree of diversification will help them maintain operating profitability in 2016, despite uneven demand conditions across end markets amid weak global economic growth, says Moody's Investors Service in a new report. "Despite a challenging macro-economic environment, we expect that in 2016 European chemical companies' broad product and end-market diversification will enable them to retain most of the improvement in operating profitability and cash flow generation that they reported last year, when EBITDA rose 11% in euro terms year-on-year on average," says Francois Lauras, a Moody's Senior Credit Officer and author of the report. In 2016, Moody's expects that the peer group of 12 rated European chemical companies covered in the report will generate operating cash flows and sustain aggregate funds from operations (in euro terms) close to the EUR22 billion reported in 2015. However, oil-induced deflation will weigh on companies' top lines while persistent overcapacities will give rise to further pricing and margin pressure at the commodity end of certain chemicals value chains. This will, for example, affect the basic chemicals and intermediates business of BASF (SE) (A1 stable), the C4 chain activities of Evonik Industries AG (Baa1 stable), Arkema's (Baa2 negative) acrylics business and Lanxess AG's (Baa3 stable) synthetic rubbers operation. Moreover, as opportunities to grow revenues and earnings organically dry up in the current low global growth environment, the pressure on chemical companies to pursue large cash and debt- funded M&A transactions will increase. Such deals could weaken chemical companies' financial profiles and place negative pressure on their ratings. ********* 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 * * *