/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/160812.mbx T R O U B L E D C O M P A N Y R E P O R T E R E U R O P E Friday, August 12, 2016, Vol. 17, No. 159 Headlines C Z E C H R E P U B L I C NEW WORLD: Ostrava Court Rejects Citigroup's OKD Bond Claims NEW WORLD: Creditors Committee Backs OKD Unit's Reorganization I T A L Y MONTE DEI PASCHI: Moody's Reviews Bonds With Direction Uncertain OFFICINE MACCAFERRI: Moody's Lowers CFR to B3, Outlook Negative N E T H E R L A N D S AURORUS 2016: S&P Assigns B Rating to EUR9.5MM Class E Notes AVOCA CLO II: S&P Withdraws 'D (sf)' Ratings on 5 Note Classes R U S S I A LSR GROUP: Moody's Hikes Corporate Family Rating to B1 S P A I N ABENGOA SA: Enters Into Debt Restructuring Deal with Creditors U N I T E D K I N G D O M IMES: Seanamic Group Buys Business Out of Administration LB RE FINANCING: August 31 Claims Filing Deadline Set LEHMAN COMMERCIAL: August 31 Proofs of Debt Filing Deadline Set STANDARD CHARTERED: S&P Assigns BB- LT Rating to Tier 1 Notes X X X X X X X X * BOOK REVIEW: The Money Wars ********* =========================== C Z E C H R E P U B L I C =========================== NEW WORLD: Ostrava Court Rejects Citigroup's OKD Bond Claims ------------------------------------------------------------ bne IntelliNews reports that the Ostrava Regional Court rejected claims related to bonds issued by insolvent OKD and former parent New World Resources. According to bne IntelliNews, the bulk of the claims were put forward by Citigroup as the lead agent for Ad Hoc Group (AHG), the trio of creditors that until the insolvency had controlled the miner via a conversion of bonds to equity. The Czech government, which has approved limited loans to OKD since it became insolvent, has said it hopes the creditors will decide to restructure the company, bne IntelliNews relates. While the government has long accepted that OKD is a lost cause in the long run, it is keen to avoid a sudden shutdown of its mines in the east of the country, which employ around 13,000, bne IntelliNews notes. The report says the court ruling did little to alleviate the bitter atmosphere that has grown between AHG -- which features funds Grammercy, M&G, and Ashmore -- and the Czech state. "The statements and arguments made in the effort to deny Citibank's claims directly contradict all available evidence and documentation," an AHG spokesman said ahead of the ruling, bne IntelliNews relates. "The insolvency filings as well as the statements made by Citibank which are available in the insolvency register are clear proof of that." The rejected claims relate to bonds worth EUR352 million and a EUR35 million super-senior credit facility, bne IntelliNews discloses. Around CZK10 billion of the rejected claims were put forward by Citigroup, bne IntelliNews states. Citibank can still go to court to get its claims recognized and can also launch an international arbitration against the Czech state, something which it has strongly hinted it is more than willing to do, bne IntelliNews says. New World Resources Plc is the largest Czech producer of coking coal. NEW WORLD: Creditors Committee Backs OKD Unit's Reorganization -------------------------------------------------------------- Reuters reports that the creditors committee of OKD agrees to pursue the reorganization of the New World Resources coal mining unit. "This is very positive news for OKD, for employees and hard coal mining in the Ostrava region," Reuters quotes OKD spokesman Ivo Celechovsky as saying. According to Reuters, news agency CTK quoted Judge Petr Kula as saying the court will approve the reorganization shortly. New World Resources Plc is the largest Czech producer of coking coal. ========= I T A L Y ========= MONTE DEI PASCHI: Moody's Reviews Bonds With Direction Uncertain ---------------------------------------------------------------- Moody's Investors Service placed on review with direction uncertain the A2 ratings assigned to the covered bonds issued by Banca Monte dei Paschi di Siena S.p.A. (the issuer/"BMPS"; deposits B2, on review with direction uncertain, adjusted baseline credit assessment ca on review with direction uncertain; counterparty risk (CR) assessment B2(cr), on review with direction uncertain.) RATINGS RATIONALE The rating action was prompted by Moodys' decision to place the issuer's B2(cr) CR assessment on review with direction uncertain on 8 August 2016 The TPI assigned to this transaction is Very High. This TPI framework does constrain the ratings of the covered bonds at their current level. KEY RATING ASSUMPTIONS/FACTORS Moody's determines covered bond ratings using a two-step process: an expected loss analysis and a TPI framework analysis. EXPECTED LOSS: Moody's uses its Covered Bond Model (COBOL) to determine a rating based on the expected loss on the bond. COBOL determines expected loss as (1) a function of the probability that the issuer will cease making payments under the covered bonds (a CB anchor event); and (2) the stressed losses on the cover pool assets following a CB anchor event. The CB anchor for this program is CR assessment plus 1 notch. Moody's may use a CB anchor of CR assessment plus one notch in the European Union or otherwise where an operational resolution regime is particularly likely to ensure continuity of covered bond payments. The cover pool losses for BMPS' mortgage covered bonds are 15.6%. This is an estimate of the losses Moody's currently models following a CB anchor event. Moody's splits cover pool losses between market risk of 10.6% and collateral risk of 5.0%. Market risk measures losses stemming from refinancing risk and risks related to interest-rate and currency mismatches (these losses may also include certain legal risks). Collateral risk measures losses resulting directly from cover pool assets' credit quality. Moody's derives collateral risk from the collateral score, which for this program is currently 7.5%. The over-collateralization in the cover pool is 41.3%, of which BMPS provides 20.5% on a "committed" basis. The minimum OC level consistent with the A2 rating is 8.5%, of which the issuer should provide 8.5% in a "committed" form. These numbers show that Moody's is not relying on "uncommitted" OC in its expected loss analysis. For further details on cover pool losses, collateral risk, market risk, collateral score and TPI Leeway across covered bond programs rated by Moody's please refer to "Moody's Global Covered Bonds Monitoring Overview", published quarterly. All numbers in this section are based on the most recent Performance Overview / Moody's most recent modelling (based on data, as per 31 March 2016). TPI FRAMEWORK: Moody's assigns a "timely payment indicator" (TPI), which measures the likelihood of timely payments to covered bondholders following a CB anchor event. The TPI framework limits the covered bond rating to a certain number of notches above the CB anchor. Factors that would lead to an upgrade or downgrade of the ratings: -- The CB anchor is the main determinant of a covered bond program's rating robustness. A change in the level of the CB anchor could lead to an upgrade or downgrade of the covered bonds. The TPI Leeway measures the number of notches by which Moody's might lower the CB anchor before the rating agency downgrades the covered bonds because of TPI framework constraints. -- The TPI assigned to BMPS mortgage covered bonds is Very High. The TPI Leeway for this program is limited, and thus any reduction of the CB anchor may lead to a downgrade of the covered bonds. -- A multiple-notch downgrade of the covered bonds might occur in certain circumstances, such as (1) a country ceiling or sovereign downgrade capping a covered bond rating or negatively affecting the CB Anchor and the TPI; (2) a multiple-notch downgrade of the CB Anchor; or (3) a material reduction of the value of the cover pool. OFFICINE MACCAFERRI: Moody's Lowers CFR to B3, Outlook Negative --------------------------------------------------------------- Moody's Investors Service downgraded global environment engineering company Officine Maccaferri S.p.A.'s (Officine Maccaferri) corporate family rating (CFR) to B3 from B2 and its probability of default rating to B2-PD from B1-PD. Concurrently Moody's has downgraded to B3 from B2 the senior unsecured rating assigned to the EUR190 million notes issued by Officine Maccaferri due in 2021, with a loss given default (LGD) assessment of LGD5. Moody's has changed the outlook on the ratings to negative from stable. "The downgrade of Officine Maccaferri's ratings reflects our expectation that soft trading conditions will continue to pressure the company's top-line and margins in the next 12 to 18 months, resulting in credit metrics deteriorating to a level not compatible with a B2 rating" says Paolo Leschiutta, a Vice President -- Senior Credit Officer at Moody's and the lead analyst for Officine Maccaferri. The downgrade and negative outlook reflect the company's weak operating performance in the first half of 2016 that was far below Moody's expectation, as well as the rating agency's view that the company's business profile has proven to be more volatile than originally built into the B2 CFR. RATINGS RATIONALE The rating action reflects Officine Maccaferri's weak operating results in H1 2016, which were far below Moody's expectations owing to soft market conditions in almost all its markets. Moody's expects that, absent a material recovery in trading conditions in H2 2016, Officine Maccaferri's leverage will exceed the maximum level commensurate with the guidance for a B2 rating, with debt/EBITDA exceeding 6.0x at end-2016. The company's revenue declined by 12.6% in H1 2016 and its reported EBITDA almost halved to EUR11.1 million, down from EUR22.1 million in H1 2015. In particular, the company was not able to compensate for the expected deterioration in some emerging markets, such as Brazil and Russia, as it did in 2015. Indeed, results were poor also in Europe, North America and Asia Pacific, where the anticipated increase in infrastructure expenses failed to materialize. Moody's expects that soft trading conditions will continue to pressure Officine Maccaferri's operating performance and profitability over the next 12-18 months. Officine Maccaferri's B3 CFR recognizes (1) the fairly low barriers to entry to the market, particularly in some of the company's largest cash contributing activities, such as its Double Twist Mesh division; and (2) the company's small size compared with similarly rated companies. Although its exposure to emerging markets offers some long-term growth opportunities, the company's revenues remain exposed to volatile infrastructure spending and prevailing macroeconomic conditions. The B3 CFR also factors in the company's exposure to short-term orders, which results in modest revenue visibility. More positively, the rating also reflects the group's track record in niche products, its market leadership position and Moody's expectation that a reduction in capital expenditure and costs control will help preserve cash generation. Officine Maccaferri's liquidity profile remains adequate, supported by EUR29 million cash at June 2016 and a EUR35 million factoring facility maturing in 2017. In addition, the company upstreamed EUR20 million cash to its parent company, SECI Holding S.p.A. (unrated), pursuant to cash management arrangements. Moody's understands that this cash remains immediately available to the company. Short-term debt totalled EUR45 million at June 2016, but Moody's expects that this will be largely paid down in the next six months, owing to the seasonal unwinding of working capital. Moody's notes that the company reduced its financial indebtedness through a buyback of EUR10 million of senior notes at end-2015, using EUR9.4 million of cash. This represented a relatively small amount of the bond and Moody's views the buyback as an opportunistic use of liquidity at that stage. In light of the weak performance during the first half of the year, any additional open market purchases in the future might be seen by the rating agency as distressed exchange in line with its definition of default. RATIONALE FOR THE NEGATIVE OUTLOOK The negative outlook reflects Moody's expectations that soft trading conditions will continue to pressure Officine Maccaferri's operating performance and profitability over the next 12-18 months. WHAT COULD CHANGE THE RATING - UP/DOWN A reduction in financial leverage towards 5.0x, together with a track record of stability in operating performances on the back of greater business diversification and solid liquidity could result in a rating upgrade over time. Conversely, a further deterioration in the company's profitability or cash generation leading to a weakening of the liquidity profile, or a financial leverage ratio above 6.5x or an EBIT interest cover ratio below 1.0x on an ongoing basis, could lead to a rating downgrade. PRINCIPAL METHODOLOGY The principal methodology used in these ratings was Building Materials Industry published in September 2014. Officine Maccaferri S.p.A. (Officine Maccaferri), incorporated in Bologna, Italy, is a leading designer and manufacturer of environmental engineering products and solutions, with a global presence. It reports four divisions: the Double Twist Mesh products, the Geosynthetics polymer material, the Rockfall and snow protections nets and the Other Products division, which includes a range of tunnelling and wall reinforcing products, as well as engineering solution services and wire products. During 2015, the company generated revenues of EUR503 million and a reported EBITDA of EUR50.5 million. ===================== N E T H E R L A N D S ===================== AURORUS 2016: S&P Assigns B Rating to EUR9.5MM Class E Notes ------------------------------------------------------------ S&P Global Ratings has assigned its 'AA- (sf)' 'A (sf)', 'BBB+ (sf)', 'BBB (sf)', and 'B (sf)' credit ratings to AURORUS 2016 B.V.'s asset-backed floating-rate class A, B, C, D, and E notes, respectively. At closing, AURORUS 2016 also issued unrated class F and G notes, and subordinated variable funding notes (VFN). At closing, AURORUS 2016 used the issuance proceeds to purchase receivables from the originator on a true sale basis. On each monthly payment date, AURORUS 2016 will issue the class A notes up to their target amount. Under the transaction documents, the senior notes' target amount equals 68% of the borrowing base. Additionally, the maximum amount of the class A notes is capped at EUR240 million and the mezzanine notes are issued at a fixed amount. Consequently, the credit enhancement at closing exceeds the minimum required credit enhancement. S&P's ratings on the class A, B, C, D, and E notes reflect its assessment of the underlying asset pool's credit and cash flow characteristics, as well as S&P's analysis of the transaction's exposure to counterparty, legal, and operational risks. S&P's analysis indicates that the class A, B, C, D, and E notes' available credit enhancement is sufficient to mitigate noteholders' exposure to credit and cash flow risks at the assigned ratings. RATING RATIONALE Economic Outlook S&P expects GDP growth of 1.8% for 2016 and 1.4% in 2017 in the Netherlands, compared with 2.0% in 2015. S&P estimates unemployment to decrease to 6.2% in 2016 and 6.0% in 2017, from 6.9% in 2015. Against this backdrop, S&P expects stable collateral performance for Dutch securitizations in the next few years. S&P has considered this outlook when determining its base-case assumptions. However, S&P has also taken into account the potential long life of the assets which, due to the relatively long timeframes for which the notes will be outstanding, results in a greater potential for the economy to decline. Credit Risk S&P has analyzed credit risk for the non-credit card loans by applying its European consumer finance criteria. S&P has used the originator's historical performance data to size its base- case gross loss and recovery rate assumptions for the consumer loans. S&P has analyzed credit risk for the credit card loans by applying its global consumer finance criteria to size base-case charge-off, yield, and payment rates for the credit card loans. Borrowers can obtain further advances for 57% of the loans in the portfolio, which have a revolving feature. The portfolio's weighted-average borrowers' age is 50 years. The loan accelerated amortization period begins once the borrowers have reached the age of 65. From that date the loan amortizes fully until the borrower reaches 73 (with the exception of full balance revolving credits, which can be originated without age limit, but the credit limit decreases to EUR2,500 from the age of 75). S&P has set its base-case assumptions by considering the long loan terms, the revolving period, and the further advance feature, which could extend the transaction's life, thereby exposing it to external shocks arising from any further deterioration in the Dutch economy. After the end of the revolving period, the initial purchase price related to further advance receivables is either funded by the subordinated notes or its payment is subordinated in the priority of payments. Following S&P's view of the increased uncertainty associated with the transaction's potentially longer life, S&P has applied high rating level loss multiples and recovery rate haircuts (discounts) for the assigned ratings. Payment Structure S&P has analyzed the payment structure and other structural features of the transaction under its European consumer finance criteria for the consumer loans and S&P's global consumer finance criteria for the credit card loans. The transaction has a combined principal and interest waterfall. A principal deficiency test is in place for each set of notes to ensure that interest on any junior note is not paid if a principal deficiency exists at a senior level. The principal deficiency test is defined as the difference, if positive, between: -- The outstanding principal amount of the notes and subordinated drawings, and -- The sum of the outstanding amount of the receivables held by the issuer on the previous cut-off date minus the amount of initial purchase price and additional purchase price due but unpaid on the previous cut-off date, the available amounts remaining on such monthly payment date after application of the priority of payments, the cash reserve, and the amount of collections on the receivables held by the issuer on the previous cut-off date standing to the credit of the collection foundation account on the previous cut-off date. The results of S&P's cash flow runs are in line with its 'AA- (sf)', 'A (sf)', 'BBB+ (sf)', 'BBB (sf)', and 'B (sf)' ratings on the class A, B, C, D, and E notes, respectively. The issuer can use collections and any of the notes proceeds to purchase additional loan receivables and further advance receivables. The transaction has a reserve account that was initially sized at 3.0% of the net present value of the portfolio and that is funded by the subordinated notes facility. The reserve amortizes in line with the portfolio, subject to a floor (minimum level) of EUR600,000. Once the class A, B, C, D, E, F, and G notes are fully repaid, or once the portfolio has fully amortized, the reserve amortizes to zero. The interest on the notes is based on floating-rate one-month Euro Interbank Offered Rate (EURIBOR). The loans bear both fixed and variable rates and the borrowing base excludes loans with an interest rate lower than 6.25% if the weighted-average interest rate of all receivables is lower than 8.00%. An interest rate swap is also in place. This covers 100% of the net present value of the fixed rate amortizing loans and 80% of the outstanding amount of the revolving and amortizing loans held by the issuer on the previous cut-off date. Under S&P's European consumer finance criteria, it ran a high and low prepayment scenario, as well as up, flat, and down interest rate vectors and an equal default curves. S&P's cash flow runs at the assigned rating levels show that the rated notes pay timely interest and ultimate principal. Counterparty Risk ABN AMRO Bank N.V. is the issuer account bank, ING Bank N.V. is the collection account bank, and BNP Paribas is the swap counterparty. S&P's long- and short-term issuer credit ratings on the bank and swap counterparty, and the documented replacement triggers support its ratings on the class A, B, C, D, and E notes under S&P's current counterparty criteria. Legal Risk S&P considers that the issuer is bankruptcy remote under its European legal criteria. Set-Off Risk If a borrower cannot obtain a further advance due to the originator's insolvency, the borrower may have the right to set off the cost of a substitute loan during the two-month notice period to terminate the loan. S&P has sized a stressed set-off amount, which it deducted from its cash flow run at closing. The pool does not contain loans granted to the originator's employees and the originator is a not deposit-taking institution, so set-off risk does not occur from these sources. Rating Stability S&P has analyzed the effect of a moderate stress on its credit assumptions and their ultimate effect on the ratings assigned to the class A, B, C, D, and E notes. S&P ran two scenarios and the results are in line with its credit stability criteria. RATINGS LIST Ratings Assigned AURORUS 2016 B.V. Up to EUR335 Million Asset-Backed Floating-Rate Notes (Including EUR34.3 Million Unrated Mezzanine Notes And A Dynamically Sized Subordinated VFN) Class Rating Amount (mil. EUR) A AA- (sf) 240.00[1] B A (sf) 14.2 C BBB+ (sf) 19.90 D BBB (sf) 17.1 E B (sf) 9.5 F NR 17.1 G NR 17.2 Sub. VFN NR 14.7 [1]Maximum amount. NR--Not rated. AVOCA CLO II: S&P Withdraws 'D (sf)' Ratings on 5 Note Classes -------------------------------------------------------------- S&P Global Ratings withdrew its credit ratings on Avoca CLO II B.V.'s class B, C-1, C-2, and D notes, and class R combo and T combo notes following the transaction's early termination. Before the withdrawals, S&P lowered to 'D (sf)' its ratings on class C-1, C-2, and D notes, and class R combo and T combo notes. S&P has withdrawn its 'BBB+ (sf)' rating on the class B notes as the notes repaid their outstanding principal. The notes' legal final maturity date is Jan. 15, 2020. However, the transaction was terminated early pursuant to a deed of amendment whereby the class C-1, C-2, and D noteholders passed an extraordinary resolution to terminate the transaction on the July 15, 2016 payment date and write down any principal amount outstanding on the notes to the amount available for distribution on the final redemption date (or, if no amounts are available for distribution, to zero). Under the amended terms of the transaction documents, no legal default has occurred for the rated notes. However, S&P has lowered to 'D (sf)' its ratings on the class C- 1, C-2, and D notes, and the class R combo and T combo notes because the existing terms have been amended regarding the payment of interest and principal amounts outstanding. S&P applied its exchange offer criteria and determined that the offer to the noteholders was distressed, rather than opportunistic. Furthermore, the offer resulted in the noteholders receiving less value than under the original terms of the securities. Avoca CLO II is a cash flow collateralized loan obligation (CLO) transaction that securitizes loans to speculative-grade corporate firms. The transaction closed on Nov. 30, 2004 and Avoca Capital manages it. Its reinvestment period ended in January 2010. RATINGS LIST Class Rating To From Avoca CLO II B.V. EUR368.2 Million Floating- And Fixed-Rate Notes Rating Withdrawn B NR BBB+ (sf) Ratings Lowered To 'D (sf)' and Withdrawn C-1 D (sf) CCC- (sf) NR D (sf) C-2 D (sf) CCC- (sf) NR D (sf) D D (sf) CC (sf) NR D (sf) R Combo D (sf) CCC- (sf) NR D (sf) T Combo D (sf) CCC- (sf) NR D (sf) NR--Not rated. =========== R U S S I A =========== LSR GROUP: Moody's Hikes Corporate Family Rating to B1 ------------------------------------------------------ Moody's Investors Service upgraded the corporate family rating (CFR) of LSR Group PJSC (LSR), Russia's leading residential real estate developer and building materials supplier, to B1 from B2 and its probability of default rating to B1-PD from B2-PD. The outlook on all ratings is stable. "We have upgraded LSR Group's ratings to B1 to reflect our expectation that the company's strong market position, coupled with a healthy financial and liquidity profile, will allow it to weather the challenging market environment and accommodate substantial investment requirements in 2016," says Ekaterina Lipatova, an Assistant Vice President -- Analyst at Moody's. The main factors driving the upgrade to B1 are the company's: -- strong business profile and leading market position, which enhance its resilience to industry cycles -- sustainably strong financial and liquidity profile. RATINGS RATIONALE The upgrade of LSR's ratings to B1 reflects the company's proven track record of successfully weathering the industry cycle, while preserving adequate operating performance and a healthy financial and liquidity profile. This is supported by (1) the substantial financial flexibility LSR built up during the record strong market in 2014 and its prudent financial policy; (2) its leading market position, with an established track record and brand recognition, which secures more stable demand than its smaller competitors and sustained access to banks, land owners, and state orders; (3) its vertically integrated business model, which allows for better control over supplies and a natural hedge against input price volatility; and (4) its strong land bank position, with the focus on the two most stable and lucrative markets of Moscow and St. Petersburg. As such, in 2015, despite a very challenging market that was pressured by the contracting economy and the hike of the key interest rate by the Central Bank of Russia, LSR managed to sustain its strong financial profile. The company's adjusted debt/book capitalization reduced to 36% (43% in 2014) and its adjusted EBIT/interest coverage increased to 3.5x (3.3x in 2014), while it preserved its cash balance at a very healthy level of RUB20.4 billion (RUB25.3 billion in 2014). The achieved financial flexibility will allow LSR to accommodate rising investment requirements in 2016. The company aims to seize arising growth opportunities under the ongoing market consolidation trend and the first signs of the market recovery, leveraging its comfortable borrowing capacity created in 2014-15. Despite materially strengthened operating results in H1 2016, this step-up in investments will likely lead to some weakening of the company's financial metrics. However, Moody's expects that LSR will remain within the guidance for a B1 rating, with its adjusted debt/book capitalization remaining below 45% and its adjusted EBIT/interest coverage above 2.5x. There remains a degree of concern regarding the sustainability of the market recovery under the still challenging economic environment in the country, which could lead to weaker than expected financial results for LSR. However, Moody's expects that the company will continue to adhere to a conservative financial policy and will adjust its investment program to preserve a healthy financial profile. Some additional support to the metrics could come from the planned sale of the concrete business and other non-core assets, as well as the potential structuring of some new land purchases on a barter-based system. LSR's ratings remain constrained by the company's (1) small size by international standards; (2) exposure to the highly cyclical real estate and building materials markets; and (3) its single market concentration, largely focused on St. Petersburg and Moscow, which increases local economic and regulatory risks. The rating also factors in execution risks related to the company's aggressive development strategy, with the focus on large-scale projects, and in particular the major ZILART project for redevelopment of industrial areas of the former automobile factory site in Moscow. RATIONALE FOR THE STABLE OUTLOOK The stable outlook reflects Moody's expectation that LSR's strong market position, coupled with its healthy financial profile and comfortable cash cushion, will allow LSR to weather the challenging market environment and accommodate substantial investment requirements, while remaining within the guidance for a B1 rating. WHAT COULD CHANGE THE RATING UP/DOWN Moody's could upgrade the rating if LSR were to (1) grow its revenue generation and sustain healthy operating performance throughout the cycle with a track-record of smooth execution of large-scale projects; (2) adhere to a conservative financial policy, while pursuing its extensive investment program with adjusted debt/book capitalization at or below 40%, adjusted debt/EBITDA at below 3.0x, and an adjusted EBIT/interest ratio at or above 4.0x, all on a sustained basis; and (3) preserve solid liquidity to ensure sustainable operations over at least the next 12 months. Negative pressure could be exerted on the rating if weak market conditions or LSR's development and financial strategies were to lead to (1) a material deterioration of liquidity; and/or (2) an increase in leverage with adjusted debt/book capitalization moving above 55%, adjusted debt/EBITDA above 4.0x and adjusted EBIT/interest trending below 2.5x, all on a sustained basis. PRINCIPAL METHODOLOGY The principal methodology used in these ratings was Homebuilding And Property Development Industry published in April 2015. Headquartered in St. Petersburg, Russia, LSR Group PJSC (LSR) is the leading real estate developer, construction company and building materials supplier in Russia. Its operations are concentrated in the northwest, Moscow and the Urals regions, with a particularly strong position in St. Petersburg and an actively growing presence in Moscow. At year-end 2015, LSR achieved sales of RUB87 billion, provided by its real estate development and construction operations (81%), and its building materials and aggregates business (19%). ========= S P A I N ========= ABENGOA SA: Enters Into Debt Restructuring Deal with Creditors -------------------------------------------------------------- Tobias Buck at The Financial Times reports that Abengoa SA has struck a EUR1.17 billion restructuring deal with its creditors, ensuring the survival of the debt-laden company after a year of financial turbulence that pushed it to the brink of bankruptcy. In a regulatory statement issued on Aug. 11, Abengoa outlined the details of the restructuring, which included a debt-for-equity swap for creditors who otherwise face a 97% haircut on their loans, the FT relates. Under the terms of the deal, 70% of pre- existing debt will convert into 40% of Abengoa's new share capital, the FT discloses. At the end of the restructuring process, the current shareholders in the company would hold around 5% of the share capital," the FT quotes Abengoa as saying in a statement. Once hailed as a standard bearer for Spain's high-flying renewables industry, Abengoa was forced to launch insolvency proceedings last November, raising the possibility that it could become one of the country's largest ever bankruptcies, the FT recounts. After years of expansion, the group had built up an EUR8.9 billion debt load, which it was no longer able to service, the FT notes. In April, a Spanish bankruptcy court gave Abengoa until the end of October to come to a deal with its creditors, the FT relates. The Aug. 11 announcement outlined the terms of an agreement, although it has not yet been signed and still has to be accepted by 75% of creditors, as required by Spanish law, the FT discloses. Under the terms of the deal, Abengoa will receive EUR1.17 billion in funds, made up of fresh investment as well as the rollover of existing credit facilities, the FT states. In addition, Abengoa will be able to call on a new credit facility worth EUR307 million, the FT relays. About Abengoa S.A. Spanish energy giant Abengoa S.A. is an engineering and clean technology company with operations in more than 50 countries worldwide that provides innovative solutions for a diverse range of customers in the energy and environmental sectors. Abengoa is one of the world's top builders of power lines transporting energy across Latin America and a top engineering and construction business, making massive renewable- energy power plants worldwide. As of the end of 2015, Abengoa, S.A. was the parent company of 687 other companies around the world, including 577 subsidiaries, 78 associates, 31 joint ventures, and 211 Spanish partnerships. Additionally, the Abengoa Group held a number of other interests of less than 20% in other entities. On Nov. 25, 2015 in Spain, Abengoa S.A. announced its intention to seek protection under Article 5bis of Spanish insolvency law, a pre-insolvency statute that permits a company to enter into negotiations with certain creditors for restricting of its financial affairs. The Spanish company is facing a March 28, 2016, deadline to agree on a viability plan or restructuring plan with its banks and bondholders, without which it could be forced to declare bankruptcy. On March 16, 2016, Abengoa presented its Business Plan and Financial Restructuring Plan in Madrid to all of its stakeholders. U.S. Bankruptcies Abengoa, S.A., and 24 of its subsidiaries filed Chapter 15 petitions (Bankr. D. Del. Case Nos. 16-10754 to 16-10778) on March 28, 2016, to seek U.S. recognition of its restructuring proceedings in Spain. Christopher Morris signed the petitions as foreign representative. DLA Piper LLP (US) represents the Debtors as counsel. Gavilon Grain, LLC, et al., on Feb. 1, 2016, filed an involuntary Chapter 7 petition for Abengoa Bioenergy of Nebraska, LLC ("ABNE") and on Feb. 11, 2016, filed an involuntary Chapter 7 petition for Abengoa Bioenergy Company, LLC ("ABC"). ABC's involuntary Chapter 7 case is Bankr. D. Kan. Case No. 16-20178. ABNE's involuntary case is Bankr. D. Neb. Case No. 16-80141. An order for relief has not been entered, and no interim Chapter 7 trustee has been appointed in the Involuntary Cases. The petitioning creditors are represented by McGrath, North, Mullin & Kratz, P.C. On Feb. 24, 2016, Abengoa Bioenergy US Holding, LLC and 5 five other U.S. units of Abengoa S.A., which collectively own, operate, and/or service four ethanol plants in Ravenna, York, Colwich, and Portales, each filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Eastern District of Missouri. The cases are pending before the Honorable Kathy A. Surratt-States and are jointly administered under Case No. 16- 41161. Abeinsa Holding Inc., and 12 other affiliates, which are energy, engineering and environmental companies and indirect subsidiaries of Abengoa, filed Chapter 11 bankruptcy petitions (Bankr. D. Del. Proposed Lead Case No. 16-10790) on March 29, 2016. =========================== U N I T E D K I N G D O M =========================== IMES: Seanamic Group Buys Business Out of Administration -------------------------------------------------------- Gareth Mackie at The Scotsman reports that almost 50 jobs have been secured after administrators for subsea engineer IMES found a buyer for the company. IMES called in Blair Nimmo and Geoff Jacobs -- geoffrey.jacobs@kpmg.co.uk -- of KPMG as joint administrators after suffering cash flow problems linked to the oil sector downturn, The Scotsman relates. It has now been acquired by Glasgow-based Seanamic Group, The Scotsman discloses. The company had a turnover of about GBP5 million and was cash generative in 2014 before suffering a drop in client orders last year as the oil and gas sector began to cut costs in response to plunging crude prices, The Scotsman recounts. Following their appointment, which came after an attempt by IMES's directors to secure new investment, the administrators agreed the sale of the firm's trading business and certain assets to Seanamic, which was formed in 2014 through a tie-up between Glasgow-based offshore handling specialist Caley Ocean Systems and Texas-headquartered cable and umbilical manufacturer Umbilicals International, The Scotsman relays. All 49 staff, 23 of whom are based in Aberdeen, have transferred to the new owner under the deal, The Scotsman notes. Aberdeen-based IMES provides inspection, examination and engineering services. LB RE FINANCING: August 31 Claims Filing Deadline Set ----------------------------------------------------- Pursuant to Rule 2.95 of the Insolvency Rules 1986 that G.E. Bruce, J.G. Parr and A.V. Lomas, the Joint Liquidators of LB Re Financing No. 3 Limited, in Creditors' Voluntary Liquidation, intend to declare a first interim dividend to the unsecured creditors within a period of two months from the last date for proving. Creditors must send their full names and addresses (and those of their Solicitors, if any), together with full particulars of their debts or claims to the Joint Liquidators at PricewaterhouseCoopers, 7 More London Riverside, London, SE1 2RT by August 31, 2016 ("the last date for proving"). If so required by notice from the Joint Liquidators, either personally or by their Solicitors, Creditors must come in and prove their debts at such time and place as shall be specified in such notice. If they default in providing such proof, they will be excluded from the benefit of any distribution made before such debts are proved. Office Holder Details: G.E. Bruce, J.G. Parr and A.V. Lomas (IP numbers 9120, 8003 and 7240) of PricewaterhouseCoopers LLP, 7 More London Riverside, London SE1 2RT. Date of Appointment: July 23, 2012. Further information about this case is available from Diane Adebowale, + 44(0) 20 7212 3515 or Harmeet Harish +44 (0) 20 7213 8137. LEHMAN COMMERCIAL: August 31 Proofs of Debt Filing Deadline Set --------------------------------------------------------------- Pursuant to Rule 2.95 of the Insolvency Rules 1986 that D.A. Howell, A.V. Lomas, S.A. Pearson, G.E. Bruce and J.G. Parr, the Joint Administrators of Lehman Commercial Mortgage Conduit Limited ("LCMC"), in Administration, intend to make a distribution (by way of paying an interim dividend) to the preferential creditors (if any) and to the unsecured, non- preferential creditors of LCMC. Proofs of debt may be lodged at any point up to (and including) August 31 2016, the last date for proving claims, however, creditors are requested to lodge their proofs of debt at the earliest possible opportunity. Persons so proving are required, if so requested, to provide such further details or produce such documents or other evidence as may appear to the Joint Administrators to be necessary. The Joint Administrators will not be obliged to deal with proofs lodged after the last date for proving but they may do so if they think fit. The Joint Administrators intend to make such distribution within the period of two months from the last date for proving claims. For further information, contact details, and proof of debt forms, please visit https://is.gd/rX8ujl Please complete and return a proof of debt form, together with relevant supporting documents, to PricewaterhouseCoopers LLP, 7 More London Riverside, London SE1 2RT marked for the attention of Harmeet Harish. Alternatively, you can email a completed proof of debt form to lehman.affiliates@uk.pwc.com Rule 2.95(2)(c) of the Insolvency Rules 1986 requires the Joint Administrators to state in this notice the value of the prescribed part of LCMC's net property which is required to be made available for the satisfaction of LCMC's unsecured debts pursuant to section 176A of the Insolvency Act 1986. There are no floating charges over the assets of LCMC and accordingly, there shall be no prescribed part. All of LCMC's net property will be available for the satisfaction of LCMC's unsecured debts. STANDARD CHARTERED: S&P Assigns BB- LT Rating to Tier 1 Notes ------------------------------------------------------------- S&P Global Ratings assigned its 'BB-' long-term issue rating to the proposed additional Tier 1 notes by Standard Chartered PLC (SCPLC; BBB+/Stable/A-2). The issue rating is subject to S&P's review of the final issuance documentation. S&P is assigning an issue rating to these notes in accordance with its criteria for hybrid capital instruments. The rating reflects S&P's assessment of SCPLC's unsupported group credit profile of 'a-' and our approach, which involves deducting: -- One notch because the notes are contractually subordinated; -- Two notches because S&P expects the notes to have Tier 1 regulatory capital status; -- One notch because the notes contain a contractual write- down clause; -- One notch because the notes contain a mandatory, going- concern conversion feature and we expect the bank will maintain a common equity Tier 1 (CET1) ratio (calculated on a fully loaded Basel III basis) that is 300-700 basis points above the 7% conversion trigger. At the end of June 2016, SCPLC reported a 13.1% CET1 ratio; and -- One notch because the notes are issued by a non-operating holding company (NOHC), where S&P sees potential structural subordination and consider it unclear that the NOHC would avoid defaulting on this instrument if SCPLC was to default on an equivalent hybrid instrument. S&P's view of these notes as having "intermediate" equity content is based on several factors. In particular, S&P expects that they will be regulatory Tier 1 capital instruments and will have no coupon step-up. In addition, the notes can absorb losses on a going-concern basis through the principal conversion feature and the non-payment of coupons, which are fully discretionary. =============== X X X X X X X X =============== * BOOK REVIEW: The Money Wars ----------------------------- Author: Roy C. Smith Publisher: Beard Books Softcover: 370 pages List Price: $34.95 Review by David Henderson Get your own personal today at http://www.amazon.com/exec/obidos/ASIN/1893122697/internetbankrupt Business is war by civilized means. It won't get you a tailhook landing on an n aircraft carrier docked in San Diego, but the spoils of war can be glorious to behold. Most executives do not approach business this way. They are content to nudge along their behemoths, cash their options, and pillage their workers. This author calls those managers "inertia ridden." He quotes Carl Icahn describing their companies as run by "gross and widespread incompetent management." In cycles though, the U.S. economy generates a few business warriors with the drive, or hubris, to treat the market as a battlefield. The 1980s saw the last great spectacle of business titans clashing. (The '90s, by contrast, was an era of the investment banks waging war on the gullible.) The Money Wars is the story of the last great buyout boom. Between 1982 and 1988, more than ten thousand transactions were completed within the U.S. alone, aggregating more than $1 trillion of capitalization. Roy Smith has written a breezy read, traversing the reader through an important piece of U.S. history, not just business history. Two thirds of the way through the book, after covering early twentieth century business history, the growth of financial engineering after WWII, the conglomerate era, the RJR-Nabisco story, and the financial machinations of KKR, we finally meet the star of the show, Michael Milken. The picture painted by the author leads the reader to observe that, every now and then, an individual comes along at the right time and place in history who knows exactly where he or she is in that history, and leaves a world-historical footprint as a result. Whatever one may think of Milken's ethics or his priorities, the reader will conclude that he is the greatest financial genius this country has produced since J.P. Morgan. No high-flying financial era has ever happened in this country without the frothy market attracting common criminals, or in some cases making criminals out of weak, but previously honest men (and it always seems to be men). Something there is about testosterone and money. With so many deals being done, insider trading was inevitable. Was Michael Milken guilty of insider trading? Probably, but in all likelihood, everybody who attended his lavish parties, called "Predators' Balls," shared the same information. Why did the Justice Department go after Milken and his firm, Drexel Burnham Lambert with such raw enthusiasm? That history has not yet been written, but Drexel had created a lot of envy and enemies on the Street. When a better history of the period is written, it will be a study in the confluence of forces that made Michael Milken's genius possible: the sclerotic management of irrational conglomerates, a ready market for the junk bonds Milken was selling, and a few malcontent capitalist like Carl Icahn and Ted Turner, who were ready and able to wage their own financial warfare. This book is a must read for any student of business who did not live through any of these fascination financial eras. Roy C. Smith is a professor of entrepreneurship, finance and international business at NYU, and teaches on the faculty there of the Stern School of Business. Prior to 1987, he was a partner at Goldman Sachs. He received a B.S. from the Naval Academy in 1960 and an M.B.A. from Harvard in 1966. ********* 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 * * *