/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/170609.mbx T R O U B L E D C O M P A N Y R E P O R T E R E U R O P E Friday, June 9, 2017, Vol. 18, No. 114 Headlines A Z E R B A I J A N INTERNATIONAL BANK: UK Court Supports Petition Over Creditors C R O A T I A AGROKOR DD: Sberbank Files Motion for Injunction in Zagreb Court C Y P R U S SEABIRD EXPLORATION: Bondholders Back Debt Restructuring Plan F R A N C E TEREOS UNION: Fitch Affirms BB Long-Term IDR, Outlook Stable I T A L Y OFFICINE MACCAFERRI: Fitch Cuts IDR to B- on High Leverage POPOLARE DI VICENZA: Big Banks May Help in Italy's Bailout Plan SANAC SPA: June 30 Deadline Set for Expressions of Interest VALTUR SPA: Extraordinary Commissioners Seek Proposals for Debts R U S S I A KOKS PJSC: Moody's Hikes CFR to B2 on Improved Liquidity RUSSIAN INTERNATIONAL: Moody's Lowers LT Deposit Ratings to Caa2 S P A I N AYT CAIXA SABADELL: Fitch Lowers Class C Tranche Rating to 'Bsf' BANCO POPULAR: Market Shrugs Off Wipeout of Subordinated Debt U N I T E D K I N G D O M COVENTRY & RUGBY: Moody's Affirms Ba2 Rating on GBP407.2MM Bonds HIGHER EDUCATION 1: Moody's Cuts Ratings on 2 Tranches to Caa3 MARSTON'S ISSUER: Fitch Affirms BB+ Rating on Class B Notes THPA FINANCE: Fitch Affirms B Rating on GBP30MM Class C Notes X X X X X X X X * Gibson Dunn Adds Five Lawyers in Paris to Launch New Practice * BOOK REVIEW: AS WE FORGIVE OUR DEBTORS ********* =================== A Z E R B A I J A N =================== INTERNATIONAL BANK: UK Court Supports Petition Over Creditors ------------------------------------------------------------- Margarita Antidze at Reuters reports that International Bank of Azerbaijan, the energy exporting country's biggest lender, said on June 7 a London court had supported its request to prevent creditors pursuing legal action in the United Kingdom, giving it time to restructure US$3.3 billion (GBP2.5 billion) in debt. A similar decision was made by a U.S. court last month, Reuters recounts. The state-controlled bank said last month it was suspending payments on some liabilities and seeking creditors' support to restructure more than US$3 billion of debt, mostly owed to foreign creditors, to tackle bad loans left over from an oil price slump, Reuters relays. IBA presented a restructuring plan to its creditors on May 23 in London and infuriated them by saying they could swap its debt for sovereign bonds but some would suffer losses and have to wait longer to be repaid, Reuters discloses. The International Bank of Azerbaijan is Azerbaijan's biggest bank. * * * The Troubled Company Reporter-Europe reported on June 1, 2017, that Moody's Investors Service said the foreign-currency senior unsecured debt rating of International Bank of Azerbaijan (IBA) is unaffected at Caa3, under review for downgrade. The rating agency downgraded the bank's long-term foreign- and local- currency deposit ratings to Caa2 from B1 and changed the review to direction uncertain from review for downgrade. IBA's baseline credit assessment (BCA) of ca was has also been placed on review with direction uncertain. In addition, Moody's downgraded IBA's long-term counterparty risk assessment (CRA) to Caa1(cr) from Ba3(cr) and changed the review to direction uncertain from review for downgrade. IBA's Not Prime short-term foreign- and local- currency deposit ratings and Not Prime(cr) short-term CRA were affirmed. IBA's foreign-currency debt rating of Caa3 reflects the likely loss for creditors as a result of a proposed debt restructuring. Based on the terms of this restructuring announced on May 23, which proposes several options to investors including a proposed exchange ratio of 0.8 in sovereign bonds against existing claims, Moody's estimates the loss to be at about 20%, which is consistent with the current Caa3 debt rating. The rating agency maintains the review for possible downgrade on the bank's debt ratings, which was opened on May 15. In Moody's view, given the significant weight of Azerbaijani government- related entities amongst the creditors, coupled with the threat of a liquidation of the bank should the proposal be rejected, there is little prospect for creditor losses to be less than the agency now assumes. However, there remains a possibility of higher losses, should the proposal fail and the authorities proceed to liquidate the bank. As reported by the Troubled Company Reporter-Europe on May 29, 2017, Fitch Ratings downgraded International Bank of Azerbaijan's (IBA) Long-Term Issuer Default Rating (IDR) to 'RD' (Restricted Default) from 'CCC' and removed it from Rating Watch Evolving (RWE). The downgrade of IBA's IDRs to 'RD' follows the announcement of the bank's restructuring plan, presented on May 23, 2017. The proposed restructuring will represent a distressed debt exchange (DDE) according to Fitch's criteria as it will impose a material reduction in terms on certain senior, third-party creditors through a combination of write-downs, tenor extensions and interest rate reductions. ============= C R O A T I A ============= AGROKOR DD: Sberbank Files Motion for Injunction in Zagreb Court ---------------------------------------------------------------- Anna Baraulina and Jake Rudnitsky at Bloomberg News report that Sberbank on June 7 filed a motion for injunction at the Commercial Court in Zagreb, Croatia. According to Bloomberg, the bank seeks to prohibit Agrokor and its government-appointed administrator from entering into financing agreements that would allow creditors providing new funding to claim super senior status on old loans. As reported by the Troubled Company Reporter-Europe on May 29, 2017, Reuters said that Russia's biggest bank Sberbank will provide no new financing for indebted food and retail company Agrokor until the lender has reached an understanding with the Croatian government. Sberbank is a major creditor to Agrokor, the biggest employer in the Balkans, which is battling to avoid collapse after running up multibillion-dollar debts, Reuters disclosed. Sberbank previously said it was ready to go to court if necessary to recover more than EUR1 billion (US$1.12 billion) it had given to Agrokor in loans, according to Reuters. Zagreb-based Agrokor is the biggest food producer and retailer in the Balkans, employing almost 60,000 people across the region with annual revenue of some HRK50 billion (US$7 billion). * * * The Troubled Company Reporter-Europe reported on June 7, 2017, that Moody's Investors Service downgraded Croatian retailer and food manufacturer Agrokor D.D.'s corporate family rating (CFR) to Ca from Caa2 and the probability of default rating (PDR) to D-PD from Ca-PD. The outlook on the company's ratings remains negative. Moody's also downgraded the senior unsecured rating assigned to the notes issued by Agrokor due in 2019 and 2020 to C from Caa2. The rating actions reflect Agrokor's decision not to pay the coupon scheduled on May 1, 2017 on its EUR300 million notes due May 2019 at the end of the 30 day grace period. It also factors in Moody's understanding that the company is not paying interest on any of the debt in place prior to Agrokor's decision in April 2017 to file for restructuring under Croatia's law for the Extraordinary Administration for Companies with Systemic Importance. The TCR-Europe on April 17, 2017, reported that Moody's Investors Service downgraded Agrokor D.D.'s corporate family rating (CFR) to Caa2 from Caa1 and its probability of default rating (PDR) to Ca-PD from Caa1-PD. The outlook on the company's ratings remains negative. "Our decision to downgrade Agrokor's rating reflects its filing for restructuring under Croatian law, which in Moody's views makes a default highly likely," Vincent Gusdorf, a Vice President -- Senior Analyst at Moody's, said. "It also takes into account uncertainties around the restructuring process, as creditors' ability to get their money back hinges on numerous factors that will become apparent over time." =========== C Y P R U S =========== SEABIRD EXPLORATION: Bondholders Back Debt Restructuring Plan ------------------------------------------------------------- SeaBird Exploration Plc disclosed that the bondholders' meeting of the SBX04 bond issue on June 6 unanimously approved the proposal for the debt restructuring, pursuant to the summons. The bondholders present formed a quorum. Following the bondholders' meeting, the Company continues its efforts to satisfy the outstanding conditions for the proposed restructuring. The conditions include (i) the approval of the Restructuring at an extraordinary general meeting of the Company; (ii) consent to the Restructuring from Glander and subsequent execution of the same from Glander and Ordinat, (iii) that no SeaBird group entity has entered into any insolvency procedures, whether voluntary or involuntary; (iv) that no enforcement action have been taken by any creditors for any material claim or bankruptcy of any SeaBird group entity; (v) that final documentation required to implement the Restructuring, including final documentation on revised terms with trade creditors, has been entered into; (vi) subsequent confirmation that the abovementioned outstanding amounts under Tranche A and Tranche B of the SBX04 bond loan and the Glander credit facility have been irrevocably redeemed following the respective settlements; (vii) the entry into of an amended and restated SBX04 bond agreement between the Company and the bond trustee under the SBX04 bond agreement; and (viii) the entry into of an exchange agreement and income distribution agreement between TGS and the bond trustee under the SBX04 bond agreement to reflect the distribution of the net income from the multi-client libraries. ABG Sundal Collier ASA and Arctic Securities AS act as financial advisors to the Company. Advokatfirmaet Schjodt AS acts as Norwegian legal counsel to the Company. This information is subject of the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act. SeaBird is a global provider of marine 2D and 3D seismic data for the oil and gas industry. The Company is listed on the Oslo stock exchange with headquarters in Cyprus. It has regional offices in Limassol, Oslo, Houston and Singapore. =========== F R A N C E =========== TEREOS UNION: Fitch Affirms BB Long-Term IDR, Outlook Stable ------------------------------------------------------------ Fitch Ratings has affirmed Tereos Union de Cooperatives a Capital Variable's Long-Term Issuer Default Rating (IDR) at 'BB' with a Stable Outlook. The senior unsecured ratings of the bonds issued by its subsidiary Tereos Finance Groupe 1 were also affirmed at 'BB'. The rating affirmation reflects Tereos's strong business profile, which remains offset by a volatile financial profile. Fitch expects the company's credit metrics to improve in the financial year ended March 31, 2017 (FY17), particularly leverage and funds from operations (FFO) fixed-charge cover, after three years of weakening as sugar prices dropped. However, the new EU sugar regime from September 2017, combined with the inherent volatility of sugar prices, makes the sustainability of this improvement trend uncertain at this stage. The company enjoys a strong market position, supported by well-invested assets, access to the produce of member-farmers operating in some of the higher- yielding sugar beet regions in Europe and growing diversification of geography and raw materials. The cooperative ownership profile of Tereos also contributes to its conservative financial policies as reflected in the rating. KEY RATING DRIVERS Strong Business Profile: The IDR is underpinned by Tereos's strong business profile for the 'BB' category, both in operational scope and position in commodity markets with potential for long-term growth. Geographic and product diversification, with an important portion of sales and profits being generated outside the company's historic French sugar beet operations, as well as efforts to increase operating efficiency, also support Tereos's business risk profile. Profit Rebound: Tereos strongly boosted revenue and profit in the nine months ending December 2016 (9M17) thanks to a combination of sugar and ethanol price recovery and benefits from cost efficiency programmes. Fitch expects FY17 results to confirm the trend, and profits to further grow in FY18 albeit more moderately. Any drop in European sugar prices is likely to be more-than-compensated from higher sugar beet volumes and greater efficiency. Fitch also expects the starch and sweeteners business to contribute more to profit, due to an improved product mix, larger capacity and better efficiency. Fitch therefore considers the FY16 results as the company's lowest EBITDA point in the current cycle. Exposure to European Sugar Price Adjustment: European prices recovered in FY17 due to lower production, which led to a rapid drop in stock-to-use ratios. However, they are likely to decrease again as they converge with lower international prices, along with the removal of the quota regime in September 2017. Similar to other European sugar processors, Tereos's European sugar beet business suffered a sharp contraction in profitability in the last few years. Its EBITDA dropped in FY16 to EUR146 million (less than a third of its FY13 level), following a steep decline in EU quota sugar prices largely linked to the intervention of the European Commission in 2013. Higher European Sugar Volume Upside: Fitch expects the group to benefit from a post-2017 deregulated European sweeteners market due to strong market share and competitiveness. The EU sugar reform will lift constraints on production and exports from Europe. Tereos has contracted with member-farmers in France to increase production of sugar beet so that increased volumes can more than compensate for lower selling prices. Fitch therefore projects that EBITDA from Tereos's European sugar beet operations will keep growing in FY18. Improvement of Credit Metrics: Fitch projects RMI-adjusted funds from operations (FFO) gross leverage should return below 4.5x in FY17 after having peaked at 6.1x in FY16. Similarly, Fitch expects RMI-adjusted FFO fixed-charge cover to have reached its low point (3.0x) in FY16 and to recover to around 3.5x from FY17. Such improvement in financial metrics should be supported by higher FFO and RMI value. These levels are comfortable for the ratings. Fitch expects free cash flow to remain mildly negative over FY17-FY18 due to working capital absorption in FY17 and FY18. In addition, Fitch projects capex to remain high at an average EUR400 million annually. Adequate Financial Flexibility: Tereos's weak credit metrics are partially mitigated by adequate financial flexibility. The latter is supported by strict financial discipline in shareholder distributions and M&A spending, adequate liquidity management and healthy RMI-adjusted FFO fixed-charge cover throughout the commodity down-cycle. In the low sugar price environment, cooperative owners have shown their support to Tereos by accepting a sharp reduction in "price complements", which Fitch considers akin to dividend distributions. While there has been a modest increase in distributions in FY17, Fitch assumes these will remain low so long as the profitability of Tereos's European sugar business remains low. Parent-Subsidiary Linkage: Tereos France's (TF) and Tereos's influential control as well as their legal and strategic ties with TI are very strong. These compensate for limited, albeit growing, operational, financial integration and ownership - and make parent and its subsidiary intrinsically linked. Fitch also expects a degree of convergence in the financial profiles of both TI and its French holding. Average Recovery Prospects: Due to the strong linkages between TSF, Tereos and TI, the rating on the senior unsecured notes is derived from the consolidated group's IDR of 'BB'. The senior unsecured notes are rated at the same level as the group's IDR. Usually, for issuers rated in the 'BB' category, prior-ranking debt constituting 2x-2.5x EBITDA indicates a high likelihood of subordination and lower recoveries for unsecured debt. Fitch believes that the level of senior secured (or other form of prior-ranking) debt leverage at TSF is unlikely to rise higher than 2.0x over the next three years as Fitch expects a recovery in EBITDA from the sugar beet business. Furthermore, Fitch believes TSF (or Tereos) is unlikely to increase its debt to support other group entities. Revolving Credit: In addition, existing committed debt ranking ahead of the senior unsecured notes relates to TSF's EUR450 million revolving credit facility (RCF), which exclusively funds working capital needs throughout the year. Based on the company's historical intra-year working capital needs, average intra-year outstanding RCF amounts are unlikely to rise beyond 2.0x TSF's EBITDA. DERIVATION SUMMARY Tereos's IDR of 'BB' is positioned in between the credit quality of larger and significantly more diversified commodity trader and processor Bunge Limited (BBB/Stable) and the 'B' category rated Kernel Holding S.A. (B+/Stable) and Biosev S.A. (B+/Negative), whose ratings discount a heavy concentration on one country where they originate the commodities they process and sell. Tereos enjoys a moderate degree of geographic diversification with material sourced mainly in western Europe and Brazil but also in The Indian Ocean and Asia as well as combining production of beet sugar, cane sugar, sweeteners, ethanol and starches. KEY ASSUMPTIONS Fitch's key assumptions within Fitch ratings case for the issuer include: - Revenue to grow in FY17 at a pace (low teens) aligned with 9M17 performance; further strong growth (mid-to-high single digit) in FY18, resulting from higher volumes more than compensating the lower prices that will result from the EU sugar reform from the second half of FY18 and adverse FX effects in Brazil; broadly stable revenues from FY19; - Consolidated EBITDA margin recovering to around 12.5% in FY17 (10% in FY16; 14.8% in FY14) and 13% in FY18 as a result of better prices, product mix and/or benefits from efficiency programme; constant at 13.0% over FY18-FY20; - Working capital absorption over FY17 and FY18 as a result of price (FY17) and volume growth (FY18); - Capex remains around EUR400 million annually on average until FY19 as company continues to invest in higher efficiency and increases capacity; - Buyout of Petrobras's stake in Guarani and of Tereos Internacional minorities for close to EUR210 million in FY17; EUR40 million per annum bolt-on M&A thereafter RATING SENSITIVITIES Future Developments That May, Individually or Collectively, Lead to Positive Rating Action - Strengthening of profitability (excluding price fluctuations), as measured by RMI-adjusted EBITDAR/gross profit, reflecting reasonable capacity utilisation rates in the sugar beet business and overall increased efficiency. - At least neutral FCF while maintaining strict financial discipline. - FFO gross leverage (RMI-adjusted) consistently below 3.5x at Tereos group level. Future Developments That May, Individually or Collectively, Lead to Negative Rating Action - Inability to sustainably maintain cost savings derived from efficiency programmes or excessive idle capacity in different market segments, leading to RMI-adjusted EBITDAR/gross profit remaining weak. - Inability to return consolidated FFO to approximately USD500 million (FY16: USD300 million and to improve profitability and cash flow generation. - Reduced financial flexibility as reflected in FFO fixed-charge cover (RMI-adjusted) falling below 3.0x. - FFO gross leverage (RMI-adjusted) above 4.5x at Tereos group level on a sustained level. LIQUIDITY Adequate liquidity: Tereos's internal liquidity score, defined as unrestricted cash plus RMI plus accounts receivables divided by total current liabilities, improved to 1.1x in FY16 from 0.7x in FY14 as management successfully lengthened the group's average debt maturity profile. This is consistent with levels for a 'BB' rating. Liquidity is further supported by comfortable access to diversified sources of external funding, demonstrated by the successful issue of seven-year bonds in June and October 2016 and the full refinancing of its sweeteners business in Europe in December 2016 with a EUR200 million revolving credit facility. ========= I T A L Y ========= OFFICINE MACCAFERRI: Fitch Cuts IDR to B- on High Leverage ---------------------------------------------------------- Fitch Ratings has downgraded Italy-based building products company Officine Maccaferri S.p.A.'s Long-Term Issuer Default Rating (IDR) and senior unsecured rating to 'B-' from 'B'. The senior unsecured rating has a Recovery Rating 'RR4'/50%. The Outlook is Stable. The downgrade reflects Officine Maccaferri's high leverage, which is outside Fitch negative rating guidelines. Deterioration in both margins and cash flow generation has resulted in financial metrics that no longer support a 'B' rating. Although management has taken actions to increase the company's global industrial and operational footprint, Fitch expects challenging market conditions to persist in some key markets of Latin America and Europe, preventing a swift deleveraging. The senior unsecured bond rating reflects Fitch's recovery analysis of the company on a going concern basis. However, as some of the assets are domiciled in countries with a 'RR4' cap, Fitch uses a 50% recovery to arrive at a Recovery Rating of 'RR4', resulting in the equalisation of the senior unsecured debt rating with the IDR. KEY RATING DRIVERS High Leverage: The company's financial profile has deteriorated over the past two years due to lacklustre operating performance and significant restructuring costs. Fitch forecasts only modest deleveraging over the next two years, trending to funds from operations (FFO) adjusted gross leverage of 6.0x by end-2018 . Fitch acknowledges the bulk of the reorganisation is now completed but headwinds in some of the key markets are likely to persist. Challenging Market Conditions: Despite geographic diversification and a solid business profile for the ratings, the company faces weak performance in different regions. Political instability and currency devaluation are negatively affecting the company's business in emerging countries, where prices and margins are under pressure. Sluggish markets in southern Europe are also adding volatility to the business. Revised Operating Performance Forecast: Price challenges and deferred investment decisions of local governments will result in lower forecast revenue growth between 2017 and 2020. The increased contribution from geosynthetics only partially offsets a decline in the double twist mesh products division, where the company has historically held leading market shares. However, Fitch expects Officine Maccaferri to stabilise its EBITDA margin at around 9.5% by 2018 due to its flexible cost base and the recent reorganisation. Intragroup Relationship: Officine Maccaferri is part of a family- owned conglomerate (SECI Group). As at March 2017, the company had a loan of around EUR30 million to its parent SECI S.p.A.. Fitch does not factor any repayment of the intercompany loan over Fitch ratings horizon, as the loan is not included in Fitch net leverage calculation. Although Fitch has not factored into the ratings any cash support to other group companies, evidence of excessive cash distributions to its parent could have a negative rating impact. However, certain measures are in place, including largely non-recourse debt issuance among its operating entities and restrictions on upstreaming cash to the parent. DERIVATION SUMMARY Officine Maccaferri's holds global leading positions in the DT mesh products and rockfall protection structures, with strong geographic diversification for the ratings. Low customer concentration and some industry diversification have historically contributed to the resilience of the business. Despite its business profile, the company's small size and high leverage constrain ratings at the lower scale of the B category. KEY ASSUMPTIONS Fitch's key assumptions within Fitch ratings case for the issuer include: - Revenue growth at around 2% CAGR during the next three years - EBITDA margin gradually improving towards 9.5%, driven by operating efficiencies - Capex at 2% of sales on a sustained basis in line with management guidance - Restricted cash required for intra year-working capital swings at EUR10 million - Uncommitted credit lines rolled over annually RATING SENSITIVITIES Future Developments That May, Individually or Collectively, Lead to Positive Rating Action - FFO adjusted gross leverage below 5.0x on a sustained basis - FFO fixed charge cover above 2.5x on a sustained basis - Positive free cash flow (FCF) on a sustained basis - EBIT margin consistently above 5% Future Developments That May, Individually or Collectively, Lead to Negative Rating Action - Failure to reduce FFO adjusted gross leverage below 6.0x by end-2018. - FFO fixed charge cover below 2.0x on a sustained basis - Negative FCF on a sustained basis - EBIT margin below 4.5%, on a sustained basis LIQUIDITY Adequate Liquidity: Despite expected weak FCF generation in the short- to medium-term and the lack of a committed back-up revolving credit facility, the liquidity of the company is considered adequate. POPOLARE DI VICENZA: Big Banks May Help in Italy's Bailout Plan --------------------------------------------------------------- Paola Arosio and Stefano Bernabei at Reuters report that Italy's biggest banks may help Rome bail out Popolare di Vicenza and Veneto Banca to avoid being hit by costly depositor guarantees if European regulators shut them down. The overnight rescue of Spain's Banco Popular Espanol SA by Banco Santander SA has increased pressure on Italy, which has been trying to win European Union approval for its planned bailout of the two regional banks for months, Reuters notes. Rome has so far failed to find investors ready to put in the EUR1.2 billion (US$1.35 billion) in private capital that EU authorities are demanding to authorize the plan, Reuters states. The "resolution" of Banco Popular could strengthen the case for winding down the two Veneto banks, Reuters relays, citing an EU official. According to Reuters, one source said on June 8 Italian banks would have to shell out EUR11 billion to protect depositors at Veneto Banca and Popolare di Vicenza if the two banks were wound down. Under Italian law, deposits up to EUR100,000 each are guaranteed by a depositors' protection fund which is financed by healthy lenders and would have to be replenished if the two Veneto-based banks were shut down, Reuters states. The source, as cited by Reuters, said Italy's healthier banks and the government were looking at a plan under which each lender would contribute to provide the EUR1.2 billion required based on the size of their deposits. Some leading banks were already agreeable, but only if others signed up, Reuters says. A second source said Rome was putting pressure on heavyweights Intesa SanPaolo (ISP.MI) and UniCredit to take part so that other banks would follow their example, Reuters relays. According to Reuters, the first source said UniCredit CEO Jean Pierre Mustier has held talks with the Rome government and European authorities. The two Veneto-based banks, weighed down by bad debts and mounting losses over the past three years, need a total of EUR6.4 billion in capital, Reuters discloses. One possible vehicle for private investment would be an existing bank rescue fund, Reuters states. Banca Popolare di Vicenza (BPVi) is an Italian bank. The bank was the 13th largest retail and corporate bank of Italy by total assets, according to Mediobanca. * * * As reported by the Troubled Company Reporter-Europe on Mar 21, 2017, Fitch Ratings downgraded Banca Popolare di Vicenza's (Vicenza) Long-Term Issuer Default Rating (IDR) to 'CCC' from 'B-' and Viability Rating (VR) to 'cc' from 'b-'. The Long-Term IDR has been placed on Rating Watch Evolving (RWE). The downgrade of Vicenza's VR to 'cc' reflects Fitch's view that it is probable that the bank will require fresh capital to address a material capital shortfall, which under Fitch's criteria would be a failure. The downgrade of the Long-Term IDR to 'CCC' reflects Fitch's view that there is a real possibility that losses could be imposed on senior bondholders if a conversion or write-down of junior debt is not sufficient to strengthen capitalisation and if the bank does not receive fresh capital in a precautionary recapitalisation. SANAC SPA: June 30 Deadline Set for Expressions of Interest ----------------------------------------------------------- Avv. Corrado Carrubba, Dott. Piero Gnudi and Prof. Enrico Lagh, the Extraordinary Commissioners of SANAC S.p.A., are inviting expressions of interest for the purchase of businesses owned by Sanac S.p.A. in Extraordinary Administration. Sanac S.p.A. is a company engaged in the extraction, production and marketing of raw materials and refractory materials. The Company is indirectly controlled by Ilva S.p.A. in extraordinary administration procedure. By decree of the Ministry of Economic Development of February 20, 2015, Sanac was admitted to the extraordinary administration procedure. The Company subsequently declared insolvent by judgment of the Court of Milan of March 5, 2015 Mr. Corrado Carrubba, Mr. Piero Gnudi and Mr. Enrico Laghi (hereinafter the "Official Receivers") were appointed as official receivers of the Company. On January 5, 2016, the Official Receivers published the notice "Invito a manifestare interesse in relazione all'operazione di trasferimento dei complessi aziendali facenti capo ad Ilva S.p.A. in Amministrazione Straordinaria e ad altre societa del medesimo gruppo". Following the expression of interest under the Notice, the Official Receivers consider it appropriate to carry out a procedure specifically designed to transfer the business of Sanac to third parties (the "Procedure"). Expressions of interest to participate in the Procedure must be received no later than 6:00 p.m. (CEST) of June 30, 2017, in a sealed envelope bearing the wording "Expression of interest - Project Stone" on the outer envelope, and details of the sender, at the office of Notary Carlo Marchetti (Studio associato fra i Notai Carlo Marchetti, Renata Marella, Carlotta Dorina Stella Marchetti e Andrea De Coste), Via Agnello, 18 - 20121 Milan. The notary receipt protocol shall attest the date and time of receipt. The expressions of interest must include: (a) the essential information needed to fully identify the person concerned (if a company: company name, registered office, tax code and VAT number, or other identification required by the law of the home State; if a sole proprietorship: first name, last name, tax code and VAT number, or other identification required by the law of the home State); (b) indication of the addresses at which the applicant intends to receive any notification relating to the Procedure, including an e-mail and fax address; and (c) the statement of the interested party. The expression of interest must also be accompanied by: (a) a copy of this Call initialled on each page and signed at the bottom by the party expressing interest (for undertakings in the form of company, by their legal representative or by a person with the necessary powers to validly engage the interested party), as full and unconditional acceptance of all the terms and conditions stated therein; (b) in the case of undertakings in the form of company, documentation proving the signatory powers of the person who signs the expression of interest, a copy of a chamber of commerce historical file search (or equivalent document) dated no more than seven (7) days prior to the date of the expression of interest, a copy of the by-laws in force and a copy of the last three approved statutory and, (if any) consolidated financial statements; (c) in the case of undertakings in the form of sole proprietorship, a copy of the last three annual VAT returns submitted; and (d) any document considered useful to provide evidence of the activity carried out by the applicant and its ability to: ensure continuity of the production operations of the businesses involved in the Procedure, including the guarantee of adequate employment levels. The applicants who already expressed interests in the Notice of January 5, 2016, may omit the attachment of documents if they were already made according to the Notice of January 5, 2016, and do not need any update. The expression of interest and all the documentation annexed thereto must be drawn up in Italian. If the expression of interest and/or the documents are written in a language other than Italian, they must be accompanied by a sworn translation thereof. The Procedure shall involve the steps briefly outlined below: (a) analysis by the Official Receivers of the expression of interest received no later than the deadline referred to in paragraph 3 and selection of the parties admitted to the following steps of the Procedure; (b) admission of the selected parties to the due diligence phase, subject to prior signing of the necessary confidentiality commitments; (c) the entities admitted shall receive a special procedure letter (hereinafter, the "Procedure Letter"), which shall regulate: (i) the length of the due diligence phase; (ii) terms and procedures of the binding offers to be submitted; (iii) procedures for one or more additional bidding phases, to which all or some of the tenderers may be invited to participate; and (d) award of the Procedure on the basis of the best binding offer received and signing of the contractual documents of the cession, subject to obtaining all necessary authorizations for this purpose pursuant to Decree Law 347/2003 or any other applicable law. If the interested parties need clarification and/or information in relation to this Call, they may request them by sending a notice in Italian to the financial advisor of the Official Receivers, Rothschild S.p.A., exclusively by e-mail at the following address: ProjectStone2017@Rothschild.com, indicating "Project Stone" in the subject. VALTUR SPA: Extraordinary Commissioners Seek Proposals for Debts ---------------------------------------------------------------- Avv. Stefano Coen Avv. Daniele Discepolo Prof. Avv. Andrea Gemma, the Extraordinary Commissioners of Valtur S.p.A., Mediterraneo Villages S.p.A., Castelgandolfo S.p.A., Costa Verde S.r.l., Multicasa Uno S.r.l. and Torre Pizzo Investimenti S.r.l., are inviting interested parties to submit proposals for composition with creditors with assumption of debts, with reference to one or more Companies, within and no later than 6:00 p.m. (CET) of the sixtieth day from May 18, 2017, the publication date of of this notification, at the office of the Notary Public Angelo Busani at via Cordusio No. 2, 20123 Milan (Italy), in compliance with the terms and conditions provided for by the tender rules available on the website http://www.valturamministrazionestraordinaria.it ("Tender Rules"). All subjects interested to submit proposals for the composition with creditors may request to carry out a due diligence activity relating to the Companies and the Valtur Group Real Estates, in compliance with the terms and the conditions provided by the Tender Rules. Valtur, Mediterraneo Villages, Castelgandolfo, Costa Verde, Multicasa and Torre Pizzo were admitted to the insolvency proceeding of Amministrazione. Avv. Stefano Coen, Avv. Daniele Discepolo and Prof. Avv. Andrea Gemma were appointed as Extraordinary Commissioners of the Companies by the Italian Ministry of Economic Development, pursuant to the Marzano Law. Valtur holds a holding representing the entire corporate capital of the company Giraudi S.r.l., with registered office in Milan, via Agnello n. 5, tax code 00281820084, which, in turn, is the owner of some real estate properties located in Milan, via Agnello 5 and via Santa Radegonda 8. Valtur also brought (i) a liability action against some individuals, claiming compensation for the damages caused to Valtur and (ii) some bankruptcy claw-back actions against some suppliers of Valtur and some credit institutions, which Valtur had some relationships with. The Commissioners intend to evaluate the possibility to proceed with the liquidation of the assets of each Company by a composition with creditors with assumption of debts (concordato con assunzione). The proposals for composition with creditors, which shall be submitted on an autonomous basis with regard to each Company, shall provide for: (i) the assumption by the assumptor of all the liabilities of such Company, (ii) the assignment in favor of the assumptor of all the Valtur Group Real Estates owned by such Company and of the receivables of such Company as specified in the documents that will be made available, except for cash and cash equivalent, (iii) the succession of the assumptor in all the legal relationships relating to the Valtur Group Real Estates and in all the lawsuits involving such Company, to the maximum extent permitted by the law, and (iv) exclusively with regard to Valtur, the assignment to the assumptor of the Giraudi Holding, of the Liability Action and of the Claw-back Actions. =========== R U S S I A =========== KOKS PJSC: Moody's Hikes CFR to B2 on Improved Liquidity -------------------------------------------------------- Moody's Investors Service has upgraded to B2 from B3 the corporate family rating (CFR) and to B2-PD from B3-PD the probability of default rating (PDR) of PJSC KOKS. At the same time, Moody's has upgraded the senior unsecured rating of the outstanding $77 million loan participation notes due 2018 issued by Koks Finance D.A.C. to B2 (LGD 4) from B3. Concurrently, Moody's has assigned a definitive senior unsecured rating of B2 (LGD 4) to Koks Finance D.A.C.'s $500 million loan participation notes due 2022. The outlook on the ratings is positive. The rating action concludes the review of KOKS's ratings initiated by Moody's on April 18, 2017. "The upgrade factors in KOKS's improved liquidity, with its debt maturities and other obligations covered until at least the end of 2018 following the success of its most recent round of refinancing," says Artem Frolov, Vice President - Senior Credit Officer at Moody's. RATINGS RATIONALE The upgrade of KOKS's ratings reflects a material improvement in the company's liquidity, as a result of completion of the tender offer for Koks Finance's notes due 2018 (the company repurchased $124 million out of outstanding $201 million worth of notes) and the concurrent placement of $500 million notes due 2022 in May 2017, which enabled the company to refinance the bulk of its short-term debt maturities. Following the transaction, KOKS's liquidity is sufficient to cover the company's debt maturities and other obligations (excluding capex covered by a dedicated available loan) until at least the end of 2018. KOKS's ratings take into account (1) the company's status as one of the leading merchant pig iron producers globally, with a fairly diversified customer base and geography of sales; (2) the anticipated growth in the company's coal production capacities, as a result of the expected commissioning of the first stage of the Tikhova mine and the second stage of the Butovskaya in the second quarter of 2017; (3) the company's low-cost position, owing to the weak rouble and operational enhancements; (4) Moody's expectation that the company's leverage and interest coverage metrics will improve over the next 12-18 months; (5) KOKS's significant degree of vertical integration, with 50% and 70% current self-sufficiency in coking coal and iron ore, respectively; and (6) the company's positive free cash flow generation. The ratings also factor in the company's (1) limited operational and product diversification, although these factors will improve after the commissioning of the first stage of the Tikhova mine and the second stage of the Butovskaya mine; (2) exposure to volatility in prices for steel and feedstock; (3) debt-financed expansionary capex programme; and (4) concentrated ownership- related risks, with significant loans provided to related parties. The B2 senior unsecured ratings of Koks Finance D.A.C.'s notes are at the level of KOKS's CFR, which reflects Moody's estimation that less than 20% of KOKS's consolidated debt is secured with assets. If the share of secured debt were materially higher, the unsecured notes could be rated below the CFR because of their subordination to a sizable higher-priority debt. RATIONALE FOR POSITIVE OUTLOOK The positive outlook reflects the company's strong positioning within the current rating category and the possibility of an upgrade over the next 12-18 months, on the back of expected ramp up of the new coal capacities, improvement in leverage and healthy liquidity. WHAT COULD CHANGE THE RATINGS UP/DOWN Moody's could upgrade KOKS's ratings if the company were to (1) reduce its Moody's-adjusted debt/EBITDA below 3.0x on a sustainable basis; (2) ramp up its coal production capacities as planned; and (3) maintain healthy liquidity and prudent liquidity management, addressing upcoming debt maturities in a timely fashion. Completion of the steel plant project (hence elimination of any contingent need for additional funding), which is outside of the perimeter of CFR and is funded by KOKS via shareholder loans, would also be a prerequisite for an upgrade. Moody's could downgrade the ratings if the company's operating and financial performance, market position or liquidity and liquidity management were to deteriorate materially. PRINCIPAL METHODOLOGY The principal methodology used in these ratings was Global Steel Industry published in October 2012. PJSC KOKS is a Russia-based producer of coking coal, coke, iron ore and pig iron. In 2016, the company produced 2.2 mt of pig iron, 2.8 mt of coke, 2.6 mt of coking coal concentrate and 2.2 mt of iron ore concentrate. In 2016, the company generated revenue of RUB64.5 billion (2015: RUB53.6 billion) and Moody's- adjusted EBITDA of RUB12.9 billion (2015: RUB12.7 billion). KOKS is majority-owned by the Zubitsky family, which holds an 86% stake in the company. RUSSIAN INTERNATIONAL: Moody's Lowers LT Deposit Ratings to Caa2 ---------------------------------------------------------------- Moody's Investors Service has downgraded Moscow-based Russian International Bank's long-term local and foreign-currency deposit ratings to Caa2 from B3 and changed the outlook on these ratings to negative from stable. The changes reflect the recent weakening of the bank's asset quality and earnings generation capacity, as well as downside risks to its capital position. The rating agency has also downgraded Russian International Bank's baseline credit assessment (BCA)/adjusted BCA to caa2 from b3 and its long-term Counterparty Risk Assessment (CR Assessment) to Caa1(cr) from B2(cr). Concurrently, Moody's affirmed the bank's Not Prime short-term local and foreign-currency deposit ratings and its Not Prime(cr) short-term CR Assessment. The overall outlook on the bank's ratings changed to negative from stable. RATINGS RATIONALE The downgrade is driven by the recent deterioration in Russian International Bank's asset quality, its loss-making performance and weakening of the bank's liquidity position. Moody's expectations that the bank's capital adequacy ratios (regulatory Tier 1 ratio of 8.8% as of May 1, 2017) will be pressured by a need for additional substantial loan loss provisions in the next 12-18 months drive the negative outlook on the ratings. Given the insufficiency of the bank's pre-provision income to absorb its potential credit losses, Russian International Bank will have to rely on capital injections from its shareholders to remain solvent. Russian International Bank's problem loans, defined as the sum of loans overdue by at least 90 days and restructured loans that would otherwise become overdue, increased to 24.7% as of year-end 2016 from 13.7% a year ago. The bank's coverage of problem loans by loan loss reserves (LLR) stood at 45% as of year-end 2016, which appeared insufficient. Under local GAAP, the bank has since increased its LLR by approximately RUB1 billion (equivalent to 6% of average gross loans), and shareholders supported the bank's capital position by converting RUB1.4 billion of long-term subordinated debt into equity. However, Moody's expects that the bank will need to further increase its loan loss reserves in the next 12-18 months. The key weaknesses of the bank's asset quality profile include a high share of foreign-currency denominated loans (53% of net loans as of year-end 2016, predominantly granted to non-residents), as well as high exposure to risky trading (48% of gross loans), construction (15%) and real estate (6%) sectors. For the past two years, Russian International Bank's recurring income, defined as the sum of net interest income and net fee and commission income, was just sufficient to cover administrative expenses and could not absorb credit losses. A sharp increase in the latter to 3.2% of average gross loans in 2016 translated into a negative return on average assets (RoAA) of 2.6% last year. According to local GAAP, the bank remained loss-making in Q1 2017, and its recurring pre-provision income turned negative on the back of a shrinking net interest margin, which Moody's expects to protract into the future. The bank's liquidity position weakened in Q4 2016 and Q1 2017, as a result of significant outflows of both individual and corporate customer funds. As of May 1, 2017, the bank's unencumbered liquid assets stood at just 10% of total assets, down from 22% as of October 1, 2016. Although the share of liquid assets has since recovered to approximately 13%, the recent dynamics demonstrated the vulnerability of the bank's customer funding. WHAT COULD CHANGE THE RATINGS UP/DOWN A positive rating action on Russian International Bank's ratings is unlikely in the next 12-18 months, given the negative outlook. However, Moody's may change the outlook on the long-term ratings to stable, if the bank's capital position is significantly strengthened through equity injections. A pre-requisite for further positive rating actions would be the bank demonstrating its ability to stabilize asset quality and restore profitable performance. Russian International Bank's ratings could be downgraded if its asset quality deterioration and loss-making performance put negative pressure on the bank's capital, which is not compensated by shareholder support. Deterioration of the bank's already modest liquidity position could also trigger a negative rating action. PRINCIPAL METHODOLOGY The principal methodology used in these ratings was Banks published in January 2016. Headquartered in Moscow, Russia, Russian International Bank reported -- at January 1, 2017 -- total IFRS assets of RUB28.9 billion and total equity of RUB4.9 billion. The bank's IFRS net loss for 2016 amounted to RUB0.8 billion. ========= S P A I N ========= AYT CAIXA SABADELL: Fitch Lowers Class C Tranche Rating to 'Bsf' ---------------------------------------------------------------- Fitch Ratings has downgraded three tranches of AyT Caixa Sabadell Hipotecario and simultaneously resolved the Rating Watch Evolving (RWE): Class A (ES0312192000) downgraded to 'BBB+sf' from 'A-sf'; off RWE; Outlook Stable Class B (ES0312192018) downgraded to 'BB+sf' from 'BBB-sf'; off RWE; Outlook Stable Class C (ES0312192026) downgraded to 'Bsf' from 'BB-sf'; off RWE; Outlook Stable Class D (ES0312192034) affirmed at 'CCCsf'; off RWE; Recovery Estimate revised to 5% from 60% KEY RATING DRIVERS Collateral Information Received The transaction was placed on RWE on December 9, 2016 due to insufficient information on borrower and loan characteristics. Additional data has since been provided and Fitch was able to conduct a full rating assessment that properly reflected the credit risk associated with this portfolio. Fitch has therefore resolved the RWE. Stabilising Credit Profile The performance of the securitised portfolio has been stable over the last 12 months. As of November 2016, three-month plus arrears excluding defaults stood at 0.7% of the outstanding portfolio balance, below the 3.7% seen in November 2015 and significantly below the historical high of 13.1% in May 2015. The large drop in arrears is mainly due to BBVA's repurchase of problem assets, a strategy that Fitch views as unsustainable under stress scenarios. As a result, in its analysis of the portfolio, Fitch has not given any credit to improved performance and has revised the performance adjustment factor to 1, in line with criteria. BBVA Repurchases Fitch understands from previous discussions with the servicer that loan buy backs by BBVA have taken place since early 2014, of which around EUR30 million corresponds to defaulted assets. This repurchase strategy has improved the transaction's credit profile as large recovery cash flows have entered the transaction and have been allocated in accordance with the priority of payments definitions. Therefore, total arrears have substantially decreased, credit enhancement has improved for all rated tranches, and the balance of the reserve fund has increased to 100% of its target level. Fitch understands from the servicer that the large buy backs were a one-off event. As there is no formal commitment in place, no credit has been given to further purchases of distressed loans. Adverse Loan Characteristics The February 2017 pool showed 63% of loans with flexible features. These are similar to lines of credit where the borrower has the possibility to increase the total debt level up to the allowable amount. While additional drawdowns remain with the lender, the re-draw mechanism still affects the recovery rates for the loans in this portfolio. As a result, in its analysis, Fitch has sized for the additional re-draws. Insufficient Credit Enhancement The improved asset performance has led to the notes amortising on a pro-rata basis, with priority given to the most junior notes. Subject to BBVA's continued support of the transaction via loan repurchase, the amortisation of the notes is expected to remain pro-rata in the near future, leading to a further decline in credit enhancement as the junior notes reach their minimum tranche size. Fitch conducted a full cash flow analysis of the transaction, which showed that the current credit enhancement available to the class B and C notes was not sufficient to withstand the combined effects of the adverse portfolio characteristics and the structural features. This is reflected in their respective downgrades. High Exposure to Catalonia Almost 100% of the securitised portfolio is secured by properties located in Catalonia. To address this high geographical concentration in the credit analysis, Fitch has increased the foreclosure frequency of loans backed by properties in Catalonia by 15%. Fitch's credit analysis is carried out under the scenario that Catalonia remains a region of Spain and does not become an independent state. Lender Adjustment Fitch's base default probabilities assume that origination, underwriting and servicing practices and procedures are in line with those of a standard traditional Spanish lender, with market expertise and relevant management experience. At transaction close Fitch applied a lender adjustment of 20%. This same adjustment was applied in this analysis. Maximum Achievable Rating Fitch capped the ratings of the notes at 'BBB+sf' in accordance with its counterparty criteria for structured finance transactions. This is to address the exposure to CECA Bank (BBB- /Stable/F3), who is the swap counterparty and has set up a swap collateral account with themselves. As this arrangement is not in line with its criteria, Fitch has not given credit to collateral posting, thus eliminating any related benefit. RATING SENSITIVITIES Deterioration in asset performance may result from economic factors, in particular the increasing effect of unemployment. A corresponding increase in new defaults and associated pressure on excess spread levels and the reserve fund could result in negative rating actions. A change in creditworthiness of the swap provider may lead to changes in the rating cap of the notes, subject to other structural features. BANCO POPULAR: Market Shrugs Off Wipeout of Subordinated Debt ------------------------------------------------------------- Helene Durand at IFR reports that the regime to deal with failing European banks cleared its first major hurdle on June 7 as the market shrugged off the resolution of Banco Popular and the wipeout of its subordinated debt. After watching the bank wobble on the edge of insolvency for months, regulators eased market jitters with a relatively swift winding up of the Spanish lender, IFR relays. The Single Resolution Board bailed in the sub debt, wrote down the shares and Additional Tier 1 instruments, converted the Tier 2 debt to new equity -- and won wide praise for doing so, IFR discloses. "This was the first major test of the BRRD and it shows that the decision system works," IFR quotes Gerald Podobnik, global head of capital solutions at Deutsche Bank, as saying. Before the regulators took action, Popular's two outstanding AT1 notes were quoted at a cash price in the 40/50s, while its Tier 2 was quoted in the high 70s, IFR states. Those levels showed investors had not been expecting a complete wipeout of the debt, according to IFR. The market had had doubts about Popular since at least January, when the bank was forced to dip into reserves to ensure it could pay coupons on its AT1 bonds, IFR recounts. Yet Popular never did miss a payment, and the decision to wipe out its sub debt and impose steep losses on bondholders jumped the sequence of events that some were expecting, IFR notes. "We'd have expected to have had a missed coupon before we'd have seen a write-down of an AT1," Eoin Walsh, partner and portfolio manager at TwentyFour Asset Management, as cited by IFR, said. "Popular never missed a coupon on its AT1s, and in that regard we are surprised." And given its relatively healthy capital levels, regulators could find themselves at pains to explain the rationale for taking action just now, IFR relays. Still, many will see the situation as final proof that Additional Tier 1 and Tier 2 instruments can effectively be used as capital -- a key confirmation in the wake of the last crisis, according to IFR. By using the BRRD's asset sale tool, the SRB and Spain were able to resolve the matter of Popular without having to inject any state money, IFR states. It also means that the state will not have to wind the bank down, as the healthy part of the business has now been absorbed by Santander, which bought Popular's new shares for a token EUR1, IFR notes. Banco Popular Espanol SA is a Spain-based commercial bank. The Bank divides its business into four segments: Commercial Banking, Corporate and Markets; Insurance Activity, and Asset Management. The Bank's services and products include saving and current accounts, fixed-term deposits, investment funds, commercial and consumer loans, mortgages, cash management, financial assessment and other banking operations aimed at individuals and small and medium enterprises (SMEs). The Bank is a parent company of Grupo Banco Popular, a group which comprises a number of controlled entities, such as Targobank SA, GAT FTGENCAT 2005 FTA, Inverlur Aguilas I SL, Platja Amplaries SL, and Targoinmuebles SA, among others. In January 2014, the Company sold its entire 4.6% stake in Inmobiliaria Colonial SA during a restructuring of the property firm's capital. =========================== U N I T E D K I N G D O M =========================== COVENTRY & RUGBY: Moody's Affirms Ba2 Rating on GBP407.2MM Bonds ---------------------------------------------------------------- Moody's Investors Service has affirmed the Ba2 rating of GBP407.2 million of index-linked senior secured underlying bonds due 2040 issued by Coventry and Rugby Hospital Company Plc. The outlook was changed to stable from positive. RATINGS RATIONALE The change in outlook reflects that the August 2017 target date for fire protection remedial works completion will not be achieved. This is because of newly discovered fire protection items that require rectification. Despite this, the rating was affirmed because CRHC is adequately protected from increased expenses through the project's contractual terms. The Ba2 rating reflects as positives (1) CRHC's 2016 settlement agreement (the "Settlement") with the University Hospitals Coventry and Warwickshire NHS Trust ("UHC") and the construction contractor Skanska, that limits CRHC's maximum potential liability at a level that would still result in financial metrics being above lock-up levels; (2) CRHC's long-term PFI contract with two NHS Trusts; (3) satisfactory performance of facilities management ("FM") and medical equipment services ("MES") over several years; and (4) a range of creditor protections included within CRHC's financing structure, such as debt service and maintenance reserves. The rating is constrained, however, by (1) CRHC's discovery of new fire protection items, which means that the company will not achieve the August 2017 target date for remedial works completion; (2) CRHC's high leverage, with minimum and average debt-service coverage ratios of 1.12x and 1.19x, respectively, which reduces its ability to withstand unexpected stress; (3) the uneven DSCR profile which is smoothed through CRHC's use of non- contractual cash reserving; (4) exposure to lower interest rates, which would lead to reduced interest income from CRHC's relatively large lifecycle reserves; and (5) a MES obligation that is moderately riskier than for comparable issuers. The outlook on the rating is stable, reflecting that CRHC is adequately protected against increased costs or financial deductions despite the newly discovered fire protection items. Whilst performing remedial works, CRHC identified additional fire protection items that require rectification. These new items will significantly extend the works schedule, primarily because more extensive patient decants will be required. Despite this, CRHC is adequately protected from increased costs or financial deductions through the Settlement. In particular the Settlement covers any newly discovered fire protection items, and contains the following provisions: (1) UHC has agreed not to make further unavailability claims; (2) the construction contractor Skanska is procuring the remedial works, and CRHC has a low, limited exposure to the associated costs; and (3) only a small financial penalty is payable by CRHC to UHC if the August 2017 target date is not achieved. The Bonds benefit from an unconditional and irrevocable guarantee of scheduled principal and interest from Assured Guaranty (London) Limited, formerly MBIA UK Insurance Limited ("AG London", rated Baa2 stable). The underlying rating of Ba2 reflects the credit risk of the Bonds absent the benefit of the guarantee from Assured London. Since the Assured London rating is higher than the underlying rating, the rating of the Bonds is Baa2. WHAT COULD CHANGE THE RATINGS UP/DOWN Moody's could consider a rating upgrade if CRHC successfully progresses with the remedial works program, including the newly discovered items, and if FM and MES provision remains satisfactory. Moody's could consider downgrading the rating if there are technical difficulties in the execution of remedial works, or if there is a deterioration in relationships with UHC or Skanska. The principal methodology used in this rating was Operational Privately Financed Public Infrastructure (PFI/PPP/P3) Projects published in March 2015. CRHC is a special purpose vehicle formed in 2002 to (i) build an approximately 1,200 bed acute hospital, medical school facilities and a 130-bed mental health unit in Coventry, England; and (ii) provide FM and MES. CRHC's primary contractual relationship is with two NHS Trusts under a 40-year project agreement. The majority of services are provided to UHC, which accounts for 93% of CRHC's unitary payment income. HIGHER EDUCATION 1: Moody's Cuts Ratings on 2 Tranches to Caa3 -------------------------------------------------------------- Moody's Investors Service has downgraded the ratings of Class A3 and A4 notes' ratings to Caa3 (sf) from Caa1 (sf) in The Higher Education Securitised Investments Series No. 1 PLC (THESIS). At the same time, Moody's affirmed the Accrual Facility Notes' A3 (sf) rating. THESIS is a UK asset-backed securities (ABS) transaction backed by student loans. Issuer: The Higher Education Securitised Investments Series No. 1 PLC (THESIS) -- GBP101.3M Class A3 Notes, Downgraded to Caa3 (sf); previously on August 15, 2016 Downgraded to Caa1 (sf) -- GBP27.3M Class A4 Notes, Downgraded to Caa3 (sf); previously on August 15, 2016 Downgraded to Caa1 (sf) -- Accrual Facility Note, Affirmed A3 (sf); previously on August 15, 2016 Affirmed A3 (sf) The transaction is a static cash securitisation of student loans extended to obligors in the UK, which closed in March 1998. The loans were originated by Student Loan Company Limited (The) ("SLC"), a UK public sector organization established to provide loans and grants to over one million students annually across the UK. RATINGS RATIONALE The rating action is prompted by the worse-than-expected performance of the collateral backing the affected notes, which resulted in a decrease in the Class A3 and A4 notes' credit enhancement. Moody's has affirmed the Accrual Facility Notes' rating, as the tranche will benefit from the UK Government cancelation indemnity on the loans, given its seniority in the structure. WORSE THAN EXPECTED COLLATERAL PERFORMANCE Defaulted loans (which are overdue for more than 24 months) have increased by GBP2.5million between May 2016 and April 2017. The rise in defaulted loans has resulted in an increase in the principal deficiency ledger to GBP63.9 million from GBP61.3 million, and reduced the Class A3 and A4 notes' credit enhancement to 2.5% from 4% over the same period. Moody's considers the performance deterioration to be partially linked to the fact that a higher portion of loans left deferment in April 2015 due to a lower deferment threshold (-7.1% lower than April 2014) and that these borrowers did not go back in deferment in April 2016 or April 2017 when the threshold went back to its April 2014 level. A borrower may be entitled to defer loan payments if their income is lower than the deferment threshold, which is equal to 85% of the average full-time earnings in the UK. PROJECTION OF FUTURE LOSSES Moody's projected future default on the outstanding portfolio by assessing the proportion of loans leaving deferment each year. In its analysis, the rating agency assumed that the future deferment threshold would either stay stable or increase with the average monthly salary in the UK. Out of the loans that left deferment, Moody's estimated the amount of loans that would benefit from the UK government's cancelation indemnity which covers loans outstanding for more than 25 years. For the remaining part of the pool which is not covered by this cancelation indemnity, Moody's assumed a default rate of 14% on loans in repayment without arrears and 30% on loans in repayment with arrears with a 30% recovery rate for both loan type. Loans that continue to be in deferment and satisfy the aforementioned criteria will benefit from the cancelation indemnity. In Moody's view, these loans are unlikely to result in incremental losses to the transaction. As a result of Moody's analysis, and given the Class A3 and A4 notes' current 2.5% credit enhancement, Moody's has downgraded the ratings on these tranches to Caa3 (sf) from Caa1 (sf). Moody's affirmed the A3 (sf) rating of the Accrual Facility Notes, the most senior tranche in the structure, given the current 31.4% credit enhancement level and the fact that the notes will benefit from the UK Government cancelation indemnity on the loans that will continue to be deferred and on the repaying ones meeting the criteria of age. The principal methodology used in these ratings was "Moody's Approach to Monitoring Scheduled Amortisation UK Student Loan- Backed Securities" published in April 2015. Please note that on 22nd of March 2017, Moody's released a Request for Comment, in which it has requested market feedback on potential revisions to its Methodology for Structured Finance. If the revised Methodology is implemented as proposed, the Credit Rating on the above mentioned deals may be affected. Please refer to Moody's Request for Comment, titled "Moody's Proposes Revisions to Its Approach to Assessing Counterparty Risks in Structured Finance", for further details regarding the implications of the proposed Methodology revisions on certain Credit Ratings. Factors that would lead to an upgrade or downgrade of the ratings: Factors or circumstances that could lead to an upgrade of the rating are (1) better-than-expected underlying collateral performance, (2) deleveraging of the capital structure, (3) improvement of the counterparties' credit quality, and (4) stability or increase in the amount of loans in deferment. Factors or circumstances that could lead to a downgrade of the rating are (1) worse-than-expected underlying collateral performance, (2) deterioration of the notes' available credit enhancement, (3) deterioration of the counterparties' credit quality, and (4) faster than anticipated decrease in the amount of loans in deferment. MARSTON'S ISSUER: Fitch Affirms BB+ Rating on Class B Notes ----------------------------------------------------------- Fitch Ratings has affirmed Marston's Issuer PLC's (Marston's) class A notes and liquidity facility at 'BBB' and class B notes at 'BB+'. The Outlooks are Stable. The quality of Marston's tenanted and franchise pubs has improved and the managed estate stabilised after the three-year transformation programme concluded in 2016. The debt structure is robust and benefits from the standard whole business securitisation (WBS) legal and structural features and a comprehensive covenant package. Fitch's base case free cash flow debt service coverage ratios (FCF DSCR) to legal final maturity at 1.53x for the class A and 1.35x for the class B compare well with Marston's closest peers Greene King, Spirit and M&B. KEY RATING DRIVERS Regulation Changes Bring Challenges: Industry Profile - Midrange Operating Environment: Weaker The pub sector in the UK has a long history, but trading performance for some assets has shown significant weakness in the past. The sector is exposed to discretionary spending, strong competition and other factors such as minimum wages, taxes and utility costs. In 2016, the statutory pub code introduced the market rent-only option (MRO) in the tenanted/leased segment. MRO breaks the traditional tied model that requires tenants to buy drinks from the pub companies, usually in exchange for lower rent. Fitch expects the further implementation of the national living wage to further compress margins. If a lower drink-driving limit was introduced in England to match Scotland, this could also hurt future trading. Barriers to Entry: Midrange Fitch views licencing laws and regulations as moderately stringent and managed pubs and tenanted pubs are capital- intensive. Switching costs within the drinking-eating out market are low, although there may be some positive brand and captive market effects. Sustainability: Midrange Fitch expects the strong pub culture in the UK to persist, thereby taking a large portion of the eating-drinking-out market. The forecasts for mild population growth in the UK are also credit positive. Transformed Estate; Uneven Growth: Company Profile - Midrange Financial Performance: Midrange Marston's has concluded a three-year effort to transform its estate, including selling low performing tenanted pubs, converting many tenanted pubs to the franchise model, upgrading existing pubs and offering accommodation to drive additional pub sales. However, trailing 12 months (TTM) to April 2017 EBITDA within the securitised estate has fallen year on year. Fitch could revise down the 'midrange' assessment if the impact of the estate transformation does not result in rising securitised EBITDA in 2017/18. Company Operations: Midrange Management has been pro-active in turning around its tenanted business including being the first to launch hybrid tenanted/managed pubs with their franchise agreement model. Many converted pubs experience a double digit percentage increases in sales. However, Fitch believes that long-term profit levels remain uncertain given weak industry fundamentals despite the turn-around efforts. By contrast, the managed estate has remained relatively unchanged. Transparency: Midrange Information is sufficient to form a view on key trends. The securitised estate contributes about 54% of Marston's total EBITDA and other than key financial metrics much of the information is available on a total estate basis, which reduces transparency. Financial reporting follows the managed/tenanted format, without separating out the franchise model pubs, but Fitch remains uncertain as to the exact impact of increased franchise pubs on profitability and flexibility. Dependence on Operator: Midrange Due to the large size of the estate, Fitch does not views operator replacement as straightforward but should be possible within a reasonable period of time. Asset Quality: Midrange Fitch considers the pubs to be reasonably well-maintained. In the last few years, management has channelled disposal proceeds to repay the GBP80.0 million AB facility in January 2014 and some capital enhancement of the estate. In the TTM to April 2017, Marston's spent GBP20.2 million on capital enhancement and GBP44.6 million maintenance capex or 11.1% of securitised sales on the securitised estate, which is above the covenant level and slightly higher than peers. The secondary market is reasonably strong, demonstrated by Marston's recently concluded significant disposals programme. Standard WBS Structure: Debt Structure - Stronger (Class A) Junior, Back-Ended Amortisation: Debt Structure - Midrange (Class B)Debt Profile: Class A / B: Stronger Fitch view the debt profile as 'stronger' for both the class A and B notes. The debt is fully amortising but there is some concurrent amortisation of class B. Additionally, there is only a three-year difference between the class A and B maturities. The liquidity facility covers almost two years of debt service. Positive factors include 100% fixed or hedged debt and strong creditor protections. Security Package: Class A: Stronger; Class B: Midrange Fitch views the security package as 'stronger' for the class A notes and 'midrange' for the class B notes. The security package is strong with comprehensive first ranking fixed and floating charges over borrower assets. Class A is the senior ranking controlling creditor, with the class B lower ranking resulting in a 'midrange' assessment. Structural Features: Class A/B: Stronger Stronger features include a minimum of 18 months liquidity facility, highly rated financial counterparties with adequate downgrade language and a clear orphan SPV. Marston's also benefits from a clear set of covenants and moderate restricted payment and default covenants relative to the industry. Financial Metrics - Uneven Performance in Recent Years Fitch's base case forecast DSCR averages 1.53x for class A and 1.35x for class B, slightly lower than the 2016 forecast. TTM April 2017 EBITDA was GBP115.9 million versus the previous year's GBP116.7 million, which was lower than the TTM EBITDA to April 2015. The EBITDA reduction was due to lower sales per pub and a declining EBITDA margin driven by higher labour costs in the managed estate, as well as disposals in the tenanted estate. Marston's metrics are in line with criteria guidance, although without a significant cushion at the 'BBB' level for the class A notes. Further underperformance could lead to a revision of the Outlook to Negative or downgrade. PEER GROUP Fitch compares Marston's ratings with those of Greene King, Spirit and M&B. M&B comprises managed pubs, whereas the other two transactions comprise managed and tenanted pubs, although the share of tenanted pubs in Spirit is much lower than in the others. Managed pubs generate about 75% of EBITDA for Greene King and Spirit. In contrast, Marston's managed division generates around 50% of securitisation EBITDA, which Fitch considers to be less resilient. RATING SENSITIVITIES Future Developments That May, Individually or Collectively, Lead to Positive Rating Action: - A significant outperformance of the base case due to strong growth in the managed estate division and further success of the franchise model, resulting in consistent deleveraging, could lead to an upgrade. - Fitch could consider an upgrade if its base case DSCR rises to 1.8x for class A and 1.5x for class B. Future Developments That May, Individually or Collectively, Lead to Negative Rating Action: - The ratings could be negatively impacted if performance is significantly below the current base case. This could be due to further pub disposals in the managed estate, greater than expected cost pressure from the introduction of the national living wage and/or even weaker than expected performance of tenanted pubs. - A further deterioration of the Fitch base case DSCR below 1.5x for class A and 1.3x for class B could lead to a downgrade PERFORMANCE UPDATE Both tenanted and manged sales per pub improved in TTM April 2017. However, EBITDA per managed pub declined by 1.7% due to an increase in operating costs per pub. Management has confirmed that this was due to an increase in the minimum wage. As a result, together with flat tenanted EBITDA, total combined securitised estate TTM EBITDA to April 2017 declined by 0.7%. Marston's has underperformed last year's Fitch base case EBITDA forecast by 1.8%. In the tenanted estate, EBITDA margins have remained stable. Tenanted sales per pub grew by 5.5%, in part due to the full-year effects of the estate transformation. However, this was offset by disposals and rising operating costs, resulting in flat y-o-y EBITDA. The overall estate quality has improved, demonstrated by improved sales and EBITDA per pub. FITCH CASES BASE CASE: Expected managed annual sales per pub growth remains at 2% as per the previous reflecting Fitch long term UK GDP and inflation forecasts, together with Fitch long-term decline expectations for the pub sector. The National Living Wage will increase the operating costs managed estate until 2021. Fitch forecast tenanted sales per pub growth at 2% in 2018, declining to 1.4% by 2020 and further thereafter, as Marston's estate transformation process has concluded in 2016 and Fitch has not factored in growth from lodges within the securitised estate. Operating costs for tenanted pubs is expected to grow in line with inflation. TRANSACTION SUMMARY The transaction is a securitisation of both managed and tenanted pubs operated by Marston's comprising 280 managed pubs and 898 tenanted pubs. THPA FINANCE: Fitch Affirms B Rating on GBP30MM Class C Notes ------------------------------------------------------------- Fitch Ratings has revised the Outlook on THPA Finance Limited's notes and affirmed their ratings: GBP95.2 million class A2 secured 7.127% fixed-rate notes due 2024: affirmed at 'BBB'; Outlook revised to Stable from Negative GBP70 million class B secured 8.241% fixed-rate notes due 2028: affirmed at 'BB-'; Outlook revised to Stable from Negative GBP30 million class C secured 10% fixed-rate notes due 2031: affirmed at 'B'; Outlook revised to Stable from Negative The revision of the Outlooks to Stable reflects that PD Ports has reduced the cost base and signed key long-term leases, which Fitch expects will mitigate the EBITDA loss in 3Q15 of the Redcar steel plant. Fitch's revised rating case forecasts EBITDA to rise above GBP37 million over the next five years, only GBP4 million short of the level reached prior to the closure of the steel plant, creating greater headroom relative to the covenanted level of the EBITDA debt service coverage ratio (DSCR). The projected free cash flow (FCF) DSCR has improved to levels more consistent with the ratings. In Fitch views, the flexibility to raise tariffs and the contribution of long-term leases mitigates THPA's exposure to volatile cargo types and few customers. The solid debt structure, typical of a UK WBS transaction, together with a stable FCF DSCR averaging 1.4x, places the class A notes' rating comfortably at 'BBB' relative to criteria. The multiple notches difference between debt tranches reflects the strong protective features at the expense of the junior notes. The non-investment-grade ratings of the junior class B and C notes reflect their deep contractual subordination and their low average projected FCF DSCR under Fitch's rating case, at around 1.1x for the class B notes and 0.9x for the class C notes and the absence of dedicated liquidity reserves. KEY RATING DRIVERS Volume Risk - Midrange: Customer Concentration, Volatile Cargo Tees and Hartlepool is a secondary port of call on a single site exposed to customer and industry concentration. ConocoPhillips, which exports oil and gas, accounted for 45% of THPA's 2016 volumes, exposing the business to the volatile oil market. Fitch expects the lease agreements with MGT Teesside and Trafigura to sustain volumes handled at the port, once operations start from 2020 and 2018, respectively. The facility is well connected to the local market and the inland, limiting the competitive exposure to other regional facilities. However, Fitch views the hinterland as a marginal growth driver. The Tees valley is a low-growth area focused on the chemical and manufacturing industry, exposed to low cost supplies from emerging countries and contraction in global demand. Price Risk - Midrange: Tariffs Flexibility, Long Leases Tariffs are unregulated and follow UK RPI indirectly. Fitch anticipates the portion of guaranteed revenue to grow slightly thanks to the long-term lease contracted with MGT Teesside in August 2016 and the 10-year lease agreement with Trafigura. Fitch expects rental payments from 2018 onwards. Infrastructure and Renewal Risk - Midrange: Flexible Plan, External Contributions The port is well maintained. Some refurbishments were completed in 2016 to allow the processing of larger vessels. Capex is funded internally through free cash, contributions from lessees, unsecured debt and the equity sponsor. Debt Structure - Stronger for Class A; Midrange for Class B and C: Senior Class A Well Protected All classes are fully amortising, with a strong security package of fixed and floating charges typical for WBS with the possibility of appointing an administrative receiver. There is no interest rate risk. However, a borrower event of default could lead the class A noteholders to enforce and accelerate at the expense of the junior notes, in particular during a downturn or stress event. The deep contractual subordination weighs on the junior notes' ratings. The agency notes the discrepancy between THPA's offering circular and the legal documentation in which there is no liquidity facility for the class B and C notes. Fitch's analysis is aligned with the transaction documentation. In Fitch view, this does not prejudice the ratings of the senior class A notes and the junior class B and C notes because the junior debt service can be deferred. Any deferral of junior debt service does not represent a payment default until the final maturity of each respective note. Amortisation of the junior notes is back-ended, starting once the class A notes have been fully redeemed. Stable Metrics, Headroom Relative to Covenant The projected minimum of average or median FCF DSCR in Fitch's rating case improved to 1.4x from 1.3x in the October 2016 review for the class A notes, to 1.1x from 1.0x for the class B notes and remained flat at 0.9x for the class C notes. Fitch break-even analysis shows that the class A notes can sustain up to an annual decline of 5.8% in EBITDA before reaching an average FCF DSCR of 1.0x and consequently drawing on liquidity. As a result, Fitch's rating case projects higher headroom to the covenanted EBITDA DSCR. PEER GROUP In comparison with ABP (A-/Negative), THPA's debt structure is fully amortising in contrast to ABP's exposure to refinance risk and higher leverage. However, ABP's revenue profile is significantly more diversified in terms of locations and cargo types and is more resilient to downturns as about 40% of its revenue is either contractually fixed or subject to minimum guarantees. RATING SENSITIVITIES Future Developments That May, Individually or Collectively, Lead to Positive Rating Action: - A substantial increase in the throughput or other positive development of the business leading to a FCF DSCR consistently above 1.6x at class A, 1.2x at class B and 1.0x at class C. Future Developments That May, Individually or Collectively, Lead to Negative Rating Action: - EBITDA volatility reducing the headroom to the covenanted level of EBITDA DSCR or triggering a covenant breach not cured by the sponsor. - A reduction in oil revenues or the loss of another major customer adversely affecting the transaction's revenues and leading to FCF DSCR forecasts under Fitch's rating case consistently below 1.35x at class A, 1.0x at class B and 0.9x at class C. Performance Update Management's control of the cost base and the realisation of a few one-off transactions for around GBP2 million softened the full year impact of the loss of Redcar's volume in 2016. Consequently, EBITDA proved more resilient than Fitch expected and the issuer performed above Fitch's 2016 base case. THPA's 2016 EBITDA reached GBP36 million, against Fitch's projected base case EBITDA of GBP33 million, and a FCF DSCR at 1.0x, against a projected FCF DSCR of 0.9x. Fitch Cases Fitch's rating case incorporates conservative FCF assumptions factoring some low organic growth in both the port operations and the conservancy business, the contribution of the long-term leases contracted with MGT Teesside and Trafigura, conservative maintenance capex projections of GBP7.5 million a year (indexed) and pension deficit contributions of GBP2 million a year increasing over time. Asset Description THPA is a securitisation of the assets held, and earnings generated, by the PD Ports group, which owns and operates the port of Tees and Hartlepool as the statutory harbour authority on the northeast coast of England. =============== X X X X X X X X =============== * Gibson Dunn Adds Five Lawyers in Paris to Launch New Practice --------------------------------------------------------------- Gibson, Dunn & Crutcher LLP on June 8 disclosed that a five- lawyer team will join the Paris office as partners to launch new litigation and finance practices and reinforce the office's existing restructuring and corporate capabilities. The team, formerly with Ashurst LLP in Paris, is comprised of Amanda Bevan, Eric Bouffard, Bertrand Delaunay, Jean-Pierre Farges, and Pierre- Emmanuel Fender. "This year marks our 50th year in Paris. We will celebrate by taking a transformational step in the development of our Paris office by adding strong litigation, arbitration, restructuring and finance capabilities," said Ken Doran, Chairman and Managing Partner of Gibson Dunn. "Their practices provide many synergies with our overall global platform -- they will establish a new litigation practice in our Paris office that will complement our European disputes practice and at the same time enhance the firm's restructuring and transactional practices." This team follows the recent addition in Paris of four technology lawyers, anchored by partner Ahmed Baladi, formerly a partner with Allen & Overy, and the recent establishment of a litigation practice in the firm's Frankfurt office with the hire of Finn Zeidler, a white collar partner from Latham & Watkins. "This team has a stellar reputation in the Paris market," said Bernard Grinspan, Chairman of the International Management Committee and Partner in Charge of the Paris office. "They have a core foundation in complex litigation with extensive experience in product liability and industrial disputes as well as infrastructure, financial and restructuring disputes -- and also developed a restructuring practice that uniquely offers an integrated approach to clients, bringing together litigation, corporate and debt capability to implement complex restructurings." "We are excited to join Gibson Dunn's platform and help continue its growth globally, especially with building a disputes practice in Paris," said Mr. Farges. "Gibson Dunn's collegial culture fits well with our close knit team, and we look forward to working with our new colleagues." About Amanda Bevan Ms. Bevan focuses her domestic and cross-border finance practice on debt restructuring and distressed lending for borrowers; distressed investors; senior, second lien, unitranche or mezzanine lenders; or other stakeholders as well as domestic and cross-border structured finance, including LBO financing for private equity sponsors or lenders. She has practiced with Ashurst since 2003 and with Simmons & Simmons LLP from 1998 to 2003. She graduated from University of Paris I (Pantheon-Sorbonne), DEA in private international law and international commercial law, and received a Magistere (postgraduate degree) in private and public economic law in 1997. About Eric Bouffard Mr. Bouffard's dispute resolution practice covers cross-border litigation, commercial arbitration and international trade disputes. He is actively involved in restructuring and insolvency disputes. He is also experienced in disputes relating to M&A, industrial risk, product liability, insurance and commercial law, before both courts and arbitral tribunals. Mr. Bouffard practiced since 2005 with Ashurst. Prior, he practiced in the Paris offices of Holman Fenwick & Willan, Clyde & Co., and RBM2L. He is a member of the Association Franáaise d'Arbitrage (AFA), International Council for Commercial Arbitration (ICCA), and Association Franáaise de Droit Maritime (AFDM). Mr. Bouffard graduated in 1995 from University of Paris II (Pantheon-Assas), and in 1993, he received a DESS (postgraduate degree) in litigation and arbitration. About Bertrand Delaunay Mr. Delaunay focuses his practice on private M&A and private equity transactions, including leveraged buyouts and joint ventures. He also advises strategic clients, private equity firms and banks on other corporate matters, including the corporate aspects of real estate, energy, infrastructure and restructuring transactions. He practiced with Ashurst since 1998, where he served as Managing Partner of the Paris office from 2010 to 2012. Prior, he practiced with McLoughlin & Associes in 1997 and Linklaters from 1994 to 1997. He graduated in 1993 from University of Paris I (Pantheon- Sorbonne), with a DEA (postgraduate degree) in business law; in 1992 from Queen Mary and Westfield College, University of London, with a LLM; and in 1991 from University of Paris II (Pantheon- Assas), with a Maitrise in business law. About Jean-Pierre Farges Mr. Farges practices dispute resolution, including litigation and arbitration in commercial and equity capital, banking, finance, industrial risk, construction, international trade, insurance, insolvency, and public and administrative law disputes. In addition to his dispute resolution practice, he also regularly advises companies on prevention proceedings and advises lenders of all types, including credit institutions and CLOs. He has particular experience in the restructuring of companies in leveraged buyout (LBO) deals. He joined Ashurst at the end of 2001 to create a disputes resolutions practice in Paris. He became partner at Ashurst in 2004, when he also founded the restructuring practice in Paris. Prior, he trained as avocat a la Cour de Cassation et au Conseil d'Etat (lawyer in front of the Supreme Court) and worked for various avocats aux Conseils. He graduated in 1994 from University of Paris I (Pantheon- Sorbonne), with a Doctorate in private international law and arbitration; with a Magistere (postgraduate degree) in private and public economic law; and with a DESS (postgraduate degree) in business and tax law. He was a winner of the Mooting Competition for Lawyers of the French Supreme Administrative Court and Supreme Appeals Court -- Secretaire de la conference des avocats a la Cour de Cassation et au Conseil d'Etat. About Pierre-Emmanuel Fender Mr. Fender focuses on disputes resolutions, including litigation and commercial arbitration. He also has significant experience in complex cross-border restructurings and French pre-insolvency and insolvency matters. He regularly advises investors on the acquisition of defaulting companies, funds and distressed companies undergoing insolvency proceedings and creditors for the recovery of their receivables and protection of their securities. Mr. Fender has practiced with Ashurst since 2002. Prior, he practiced with Landwell & Associes, Arthur Andersen International, and HSD Ernst & Young. He graduated in 2002 from University of Strasbourg III Robert Schumann, with a DESS (postgraduate degree) in business law; and in 2000 with a DJCE Magistere (postgraduate degree) in Franco- German business law; and with a Maitrise (LLM) in business law. About Gibson Dunn Gibson, Dunn & Crutcher LLP -- http://www.gibsondunn.com-- is an international law firm. Consistently ranking among the world's top law firms in industry surveys and major publications, Gibson Dunn is distinctively positioned in today's global marketplace with more than 1,200 lawyers and 20 offices, including Beijing, Brussels, Century City, Dallas, Denver, Dubai, Frankfurt, Hong Kong, Houston, London, Los Angeles, Munich, New York, Orange County, Palo Alto, Paris, San Francisco, Sao Paulo, Singapore, and Washington, D.C. * BOOK REVIEW: AS WE FORGIVE OUR DEBTORS ---------------------------------------- Authors: Teresa A. Sullivan, Elizabeth Warren, & Jay Westbrook Publisher: Beard Books Softcover: 370 Pages List Price: $34.95 Review by: Susan Pannell Order your personal copy today at http://www.beardbooks.com/beardbooks/as_we_forgive_our_debtors.ht ml So you think you know the profile of the average consumer debtor: either deadbeat slouched on a sagging sofa with a threeday growth on his chin or a crafty lower-middle class type opting for bankruptcy to avoid both poverty and responsible debt repayment. Except that it might be a single or divorced female who's the one most likely to file for personal bankruptcy protection, and her petition might be the last stage of a continuum of crises that began with her job loss or divorce. Moreover, the dilemma might be attributable in part to consumer credit industry that has increased its profitability by relaxing its standards and extending credit to almost anyone who can scribble his or her name on an application. Such are among the unexpected findings in this painstaking study of 2,400 bankruptcy filings in Illinois, Pennsylvania, and Texas during the seven-year period from 1981 to 1987. Rather than relying on case counts or gross data collected for a court's administrative records, as has been done elsewhere, the authors use data contained in the actual petitions. In so doing, they offer a unique window into debtors' lives. The authors conclude that people who file for bankruptcy are, as a rule, neither impoverished families nor wily manipulators of the system. Instead, debtors are a cross-section of America. If one demographic segment can be isolated as particularly debtprone, it would be women householders, whom the authors found often live on the edge of financial disaster. Very few debtors (3.7 percent in the study) were repeat filers who might be viewed as abusing the system, and most (70 percent in the study) of Chapter 13 cases fail and become Chapter 7s. Accordingly, the authors conclude that the economic model of behavior -- which assumes a petitioner is a "calculating maximizer" in his in his decision to seek bankruptcy protection and his selection of chapter to file under, a profile routinely used to justify changes in the law -- is at variance with the actual debtor profile derived from this study. A few stereotypes about debtors are, however, borne out. It is less than surprising to learn, for example, that most debtors are simply not as well-off as the average American or that while bankrupt's mortgage debts are about average, their consumer debts are off the charts. Petitioners seem particularly susceptible to the siren song of credit card companies. In the study sample, creditors were found to have made between 27 percent and 36 percent of their loans to debtors with incomes below $12,500 (although the loans might have been made before the debtors' income dropped so low). Of course, the vigor with which consumer credit lenders pursue their goal of maximizing profits has a corresponding impact on the number of bankruptcy filings. The book won the ABA's 1990 Silver Gavel Award. A special 1999 update by the authors is included exclusively in the Beard Book reprint edition. ********* 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, Julie Anne L. Toledo, Ivy B. Magdadaro, and Peter A. Chapman, Editors. Copyright 2017. 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 Joseph Cardillo at 856-381-8268. * * * End of Transmission * * *