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/raid1/www/Hosts/bankrupt/TCR_Public/061228.mbx T R O U B L E D C O M P A N Y R E P O R T E R Thursday, December 28, 2006, Vol. 10, No. 308 Headlines ABACUS 2006-17: Fitch Places Low-B Ratings on Six Cert. Classes ACTUANT CORP: Acquires Maxima Technologies for $91 Million ADELPHIA COMMS: Court Okays Cooley Godward as Fee Panel’s Counsel ADELPHIA COMMS: Hires Fisher & Phillips as Special Counsel ADESA INC: Planned Buyout Prompts S&P’s Negative CreditWatch AMERICAN CREDIT: Court Conditionally Approves Disclosure Statement AMERICAN CREDIT: Confirmation Hearing Scheduled on February 6 AMERICAN TECHNOLOGIES: Posts $1.2 Million Loss in Q. Ended Oct. 31 AMRESCO COMMERCIAL: Fitch Rates $2.4 Million Class K Certs. at B- ANDREW CORP: Lack of Purchase Offers Prompt S&P’s Positive Watch ARTESIA MORTGAGE: Fitch Lifts Rating on $5.6-Mil. Certs to BB+ BANC OF AMERICA: Fitch Holds B- Rating on $5.9 Mil. Certificates BOSTON GENERATING: S&P Rates $1.13 Billion Term Loan at B+ BOWATER INC: To Delist Common Stock in NYSE Arca on December 31 CALIFORNIA HEALTH: S&P Affirms BB Rating & Says Outlook is Stable CATHOLIC CHURCH: U.S. Trustee Appoints Davenport's Creditors Panel CATHOLIC CHURCH: Portland Inks Stipulation Allowing Fund Payout CITIZENS COMMS: Prices $400 Million 7.875% Senior Unsecured Notes COMM 2004-LNB2: S&P Holds Low-B Ratings on Six Certificate Classes CPS CAYMAN: Moody's Rates $14.3 Million 7.25% Class B Notes at Ba3 DELPHI CORP: Gets $950,000 from NASA to Fund Welding Techniques DIANA NORBERGS: Case Summary & Nine Largest Unsecured Creditors DIANNE BUCHANAN: Case Summary & 12 Largest Unsecured Creditors DURA AUTOMOTIVE: Can Use Excess Cash in Investment Accounts DURA AUTOMOTIVE: Wants OK on De Minimis Claims Settlement Protocol EL PASO: Moody's Holds Rating on Junior Series 2000D Bonds at Ba3 ENTERGY NEW ORLEANS: Files 3rd Amended Plan & Disclosure Statement ENTERGY NEW ORLEANS: Panel Files Rival Plan & Disclosure Statement FEDERAL-MOGUL: Appoints Robert Katz As VP and General Counsel FEDERAL-MOGUL: Has Until April 1 to Decide on Lease FREDERICK HALL: Case Summary & Six Largest Unsecured Creditors GLOBAL POWER: Equity Committee Taps Brown Rudnick as Counsel HEALTH SCIENCES: Sept. 30 Balance Sheet Upside-Down by $4.7 Mil. ICOA INC: September 30 Balance Sheet upside-Down by $4.1 Million IMAGEWARE SYSTEMS: Posts $1.8 Mil. Net Loss in 2006 Third Quarter INSURANCE AUTO: Planned Buyout Prompts S&P’s Positive CreditWatch JOHN PARKER: Case Summary & 19 Largest Unsecured Creditors JOHN SPIEGELBERG: Case Summary & 20 Largest Unsecured Creditors KIMBALL HILL: Liquidity Improvements Cue S&P to Affirm Ratings LA PETITE: ABC Merger Prompts S&P to Affirm B- Credit Rating LB-UBS: Fitch Junks Rating on $6.6 Million Class N Certificates LB UBS: Moody's Holds Low-B Ratings on $19.2 Million Certificates LB-UBS: Fitch Holds Junk Rating on $8.9 Mil. Class T Certificates LB UBS: Moody's Holds Junk Ratings on Class N and P Certificates LEVEL 3: To Acquire SAVVIS Content Delivery Network for $135 Mil. LF 18: Voluntary Chapter 11 Case Summary LONGRIDGE ABS: Moody's Rates $8 Mil. Class F Secured Notes at Ba1 MANSFIELD TRUST: Fitch Retains Low-B Ratings on Two Cert. Classes MARICOPA COUNTY: Moody's Holds Rating on Revenue Bonds at Ba1 MARKEL CORP: Fitch Upgrades Rating on 8.71% Capital Securities MASTERCRAFT INTERIORS: Files Disclosure Statement in Maryland MASTR ALTERNATIVE: S&P Holds BB Rating on Class B-4 Certificates MEMPHIS HEALTH: Moody's Junks Rating on $7.96 Mil. Revenue Bonds METHODIST HOSPITALS: Moody's Hacks Rating on $80.5MM Debt to Ba1 MICHAEL CHERNISKE: Case Summary & 20 Largest Unsecured Creditors MILACRON INC: New Credit Facility Prompts S&P’s Developing Outlook MILLER PETROLEUM: Posts $257,518 Net Loss in Quarter Ended Oct. 31 MIRIAM GALDAMEZ: Case Summary & Nine Largest Unsecured Creditors ML CLO: Moody's Junks Ratings on Class B-1 and B-2 Notes MORGAN STANLEY: Fitch Holds CCC Rating on $5.3 Mil. Class M Certs. MORTGAGE CAPITAL: Fitch Lifts Rating on Class G Certificates to BB MSX INTERNATIONAL: Moody's Downgrades Ratings on $195.5 Mil. Notes NEENAH FOUNDRY: S&P Rates Proposed $225 Million Senior Note at B NEW CASTLE: Case Summary & 9 Largest Unsecured Creditors NEW MEDIA LOTTERY: Oct. 31 Balance Sheet Upside-Down by $5.4 Mil. PARK SQUARE: Moody's Lifts Ratings on Three Class Certificates PATRICK WILBER: Case Summary & 20 Largest Unsecured Creditors PAULA CARSON: Case Summary & 12 Largest Unsecured Creditors PERSEUS CDO: Moody's Holds Junk Ratings $56 Million Senior Notes PIERRE FOODS: Moody's Cuts Ratings on $271 Mil. Sr. Loans to Ba3 PLUM POINT: Two 30-Year PPA’s Prompt S&P’s Postive CreditWatch PMA CAPITAL: Reduced Financial Leverage Cues Moody’s to Up Ratings POINT NORTH: CCAA Stay Proceedings Extended Until February 16 POLYTECHNIC UNIVERSITY: Moody's Pares Revenue Bonds’ Rating to B1 PROPEX INC: S&P Holds Ratings and Revises Outlook to Negative QWEST COMMS: Improved Leverage Prompts S&P to Upgrade Ratings RANGE RESOURCES: Moody’s Holds Ratings & Says Outlook is Positive ROBECO CDO: Moody's Puts Notes’ Rating on Watch and May Downgrade SABRE HOLDINGS: Likely Debt Increase Cues S&P to Lower Ratings SAINT VINCENTS: Rep. Wants Full Disclosure on Bayonne's Finances SAINT VINCENTS: Judge Hardin Okays Bid Procedures for Asset Sale SALLY HOLDINGS: Revenue Decline Prompts S&P's Stable Outlook SANMINA SCI: Delayed SEC Filing Prompts Moody's to Review Ratings SAVVIS INC: To Sell Content Delivery Network to Level 3 for $135MM SENSATA TECH: Completes Purchase of Honeywell's FTAS Business SPECIALTY UNDERWRITING: S&P Downgrades Ratings on Two Classes STANFIELD ARBITRAGE: Moody's Cuts Ratings on $32 Mil. Notes to Ba3 STATER BROS: September 24 Balance Sheet Upside-Down by $11.1 Mil. STEPHEN TURNER: Case Summary & 15 Largest Unsecured Creditors STEVEN LEE: Case Summary & Six Largest Unsecured Creditors STRUCTURED ASSET: Moody's Reviews Ratings for Likely Downgrade STRUCTURED FINANCE: Moody's Removes Watch on Preference Shares TALLSHIPS FUNDING: Moody's Rates $30 Million Class D Notes at Ba1 TECUMSEH UTILITY: S&P Downgrades Revenue Bonds’ Rating to BB UNITEDHEALTH GROUP: Gets Formal SEC Stock-Option Probe VENTAS INC: Enhanced Liquidity Cues S&P’s Positive Outlook VIRGINIA DUPLESSIS: Voluntary Chapter 11 Case Summary WACHOVIA BANK: Moody's Holds Low-B Ratings on Six Cert. Classes WACHOVIA BANK: Moody's Holds Low-B Ratings on Six Cert. Classes WELWIND ENERGY: Posts CDN$526,248 Net Loss in Third Quarter WOODWIND & BRASSWIND: Files Schedules of Assets and Liabilities XERIUM TECHNOLOGIES: Amends Senior Credit Facility * Chapter 11 Cases with Assets & Liabilities Below $1,000,000 ********* ABACUS 2006-17: Fitch Places Low-B Ratings on Six Cert. Classes --------------------------------------------------------------- Fitch rates the ABACUS 2006-17, Ltd. floating-rate notes: -- $66,000,000 class A-1 due 2041 'AAA' -- $72,000,000 class A-2 due 2047 'AAA' -- $24,000,000 class B due 2045 'AA+' -- $16,500,000 class C due 2047 'AA' -- $10,020,000 class D due 2047 'AA-' -- $13,500,000 class E due 2047 'A+' -- $4,200,000 class F due 2047 'A' -- $7,260,000 class G due 2047 'A-' -- $12,780,000 class H due 2047 'BBB+' -- $8,760,000 class J due 2047 'BBB' -- $9,480,000 class K due 2047 'BBB-' -- $6,000,000 class L due 2047 'BB+' -- $4,500,000 class M due 2047 'BB' -- $3,000,000 class N due 2047 'BB-' -- $1,500,000 class O due 2047 'B+' -- $750,000 class P due 2047 'B' -- $750,000 class Q due 2047 'B-' ABACUS 2006-17, Ltd. is a static synthetic collateralized debt obligation transaction that references a $600 million portfolio of commercial mortgage-backed securities and commercial real estate CDO securities. The ratings are based upon the credit quality of the reference portfolio, the legal structure of the transaction, the financial strength of the counterparties and their guarantors, as well as the credit quality of the collateral assets. The rating assigned to the notes addresses the timely payment of interest and the ultimate payment of principal of the notes at maturity. ACTUANT CORP: Acquires Maxima Technologies for $91 Million ---------------------------------------------------------- Actuant Corp. has acquired Maxima Technologies' stock for cash from an investor group lead by HB Equity Partners. Total consideration for the transaction was approximately $91 million, including the assumption of approximately $1.9 million of Maxima’s debt. Funding for the transaction came from Actuant’s revolving credit facility. "We have been interested for some time in adding electronic controls capabilities internally" Commenting on the transaction, Bill Blackmore, Actuant Executive Vice President stated, "as we primarily use third parties for this important component of our actuation systems. Maxima achieves this objective, and it provides us access to a number of new markets, increasing our diversification. Similar to Actuant, Maxima is focused on continuous improvement and utilizing Six-Sigma tools. It has a demonstrated track record of growth in sales and profitability under the leadership of Oddie Leopando, President and CEO, and we are pleased that he and his team will be joining Actuant." Maxima will be included in Actuant’s Engineered Products business segment, and Oddie Leopando will report directly to Bill Blackmore. "The acquisition is a major boost for us," said Mr. Leopando. "Actuant’s diversified and fast–growing business has a culture similar to Maxima’s in that they are committed to Six-Sigma and Lean principles. I am personally excited about leveraging our combined capabilities and global reach in a way that strengthens our relationships with customers, and sustains a leading position in our core market segments." About Actuant Corporation Actuant Corp. (NYSE:ATU) -- http://www.actuant.com/-- manufactures and markets a broad range of industrial products and systems, organized into two business segments, Tools & Supplies and Engineered Solutions. * * * As reported in the Troubled Company Reporter on Oct. 23, 2006, Moody's Investors Service affirmed its Ba2 corporate family rating for Actuant Corp. ADELPHIA COMMS: Court Okays Cooley Godward as Fee Panel’s Counsel ----------------------------------------------------------------- The Official Fee Committee of Adelphia Communications Corporation obtained approval from the U.S. Bankruptcy Court for the Southern District of New York to retain Cooley Godward Kronish LLP as substitute counsel and to terminate the retention of Kronish Lieb Weiner & Hellman LLP, nunc pro tunc to Oct. 1, 2006. The Court previously approved the retention of KLWH as counsel to the Official Fee Committee of the Debtor pursuant to Section 1103 of the Bankruptcy Code. On Oct. 1, 2006, KLWH merged with Cooley Godward LLP to create a new national firm, Cooley Godward Kronish LLP, in which each of the Kronish Lieb attorneys joined CGK. For purposes of efficiency and continuity, the same attorneys will continue to represent the Fee Committee. Consistent with the type of services previously rendered by Kronish Lieb to the Fee Committee, CGK will: -- assist the Fee Committee in drafting reports and appear at hearings on behalf of the Fee Committee; -- assist the Fee Committee with regard to inquiries to and from the retained professionals and Legal Cost Control, Inc., the auditor for the Fee Committee; and -- coordinate and attend meetings between the Fee Committee, LCC, and the Retained Professionals. CGK will bill: Professional Hourly Rate ------------ ----------- Partners $530 - $650 Associates $245 - $490 Para Professionals $150 - $190 James A. Beldner, Esq., a member of CGK, tells the Court that the hourly rates will be revised and adjusted annually. The Adelphia Communications Corporation Debtors will reimburse the disbursements and expenses incurred in the rendition of the services. Where the actual cost is not readily available, the cost will be based on formulas that approximate the actual cost. Mr. Beldner discloses that Kronish Lieb represented Metromedia in its recent Chapter 11 case in the Southern District of New York, and CGK continues to represent Metromedia in certain follow-up bankruptcy and litigation matters. Metromedia has a claim in the ACOM Debtors' Chapter 11 case; however, Mr. Beldner assures the Court that CGK will not represent Metromedia in the case. Mr. Beldner further assures the Court that his firm does not hold or represent any interest adverse to the Debtors, their creditors or estates, and is a disinterested person as defined in Section 101(14) of the Bankruptcy Code. Based in Coudersport, Pa., Adelphia Communications Corporation (OTC: ADELQ) -- http://www.adelphia.com/-- is a cable television company. Adelphia serves customers in 30 states and Puerto Rico, and offers analog and digital video services, Internet access and other advanced services over its broadband networks. The Company and its more than 200 affiliates filed for Chapter 11 protection in the Southern District of New York on June 25, 2002. Those cases are jointly administered under case number 02-41729. Willkie Farr & Gallagher represents the Debtors in their restructuring efforts. PricewaterhouseCoopers serves as the Debtors' financial advisor. Kasowitz, Benson, Torres & Friedman, LLP, and Klee, Tuchin, Bogdanoff & Stern LLP represent the Official Committee of Unsecured Creditors. Adelphia Cablevision Associates of Radnor, L.P., and 20 of its affiliates, collectively known as Rigas Manged Entities, are entities that were previously held or controlled by members of the Rigas family. In March 2006, the rights and titles to these entities were transferred to certain subsidiaries of Adelphia Cablevision, LLC. The RME Debtors filed for chapter 11 protection on March 31, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10622 through 06-10642). Their cases are jointly administered under Adelphia Communications and its debtor-affiliates chapter 11 cases. (Adelphia Bankruptcy News, Issue No. 159; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). ADELPHIA COMMS: Hires Fisher & Phillips as Special Counsel ---------------------------------------------------------- Adelphia Communications Corporation obtained approval from the U.S. Bankruptcy Court for the Southern District of New York to employ Fisher & Phillips LLP as special counsel, nunc pro tunc to June 1, 2006, the date the firm exceeded the ordinary course professionals cap. The Adelphia and its debtor-affiliates employed, in May 2004, Fisher & Phillips LLP as an ordinary course professional. The ACOM Debtors determined that it is necessary to employ F&P as special counsel because the firm has exceeded the aggregate OCD cap and they intend to continue to use the services that F&P provides them. Shelley C. Chapman, Esq., at Willkie Farr & Gallagher LLP, in New York, disclosed that F&P provides representation to its clients in numerous areas, including labor, employment, benefits and immigration law, representing companies and management exclusively. F&P will provide legal representation to the ACOM Debtors in their Chapter 11 cases, regarding, but not limited to, labor and employment matters. F&P's will bill: Professional Hourly Rates ------------ ------------ Attorneys $170 to $445 Paralegals $110 to $180 The firm will also be reimbursed for actual and necessary expenses incurred. F&P has received $624,502 and is owed $109,327 in payment for services rendered and expenses incurred in the ACOM Debtors' Chapter 11 cases. Theresa M. Gallion, Esq., a member of the firm, assures the Court that F&P does not hold or represent an interest adverse to the estates. Ms. Gallion's Supplemental Affidavit Ms. Gallion disclosed that F&P currently handles employment matters for companies insured by Travelers, a bank lender in the ACOM Debtors' Chapter 11 cases. The employment matters are unrelated to the Chapter 11 cases. "Our representation of Travelers matters does not involve any adverse interest to the [ACOM] Debtors," Ms. Gallion tells the Court. In any event, should the ACOM Debtors be in a position in which they are adverse to Travelers, the firm will not represent the ACOM Debtors or Travelers in those matters, Ms. Gallion adds. About Adelphia Communications Based in Coudersport, Pa., Adelphia Communications Corporation (OTC: ADELQ) -- http://www.adelphia.com/-- is a cable television company. Adelphia serves customers in 30 states and Puerto Rico, and offers analog and digital video services, Internet access and other advanced services over its broadband networks. The Company and its more than 200 affiliates filed for Chapter 11 protection in the Southern District of New York on June 25, 2002. Those cases are jointly administered under case number 02-41729. Willkie Farr & Gallagher represents the Debtors in their restructuring efforts. PricewaterhouseCoopers serves as the Debtors' financial advisor. Kasowitz, Benson, Torres & Friedman, LLP, and Klee, Tuchin, Bogdanoff & Stern LLP represent the Official Committee of Unsecured Creditors. Adelphia Cablevision Associates of Radnor, L.P., and 20 of its affiliates, collectively known as Rigas Manged Entities, are entities that were previously held or controlled by members of the Rigas family. In March 2006, the rights and titles to these entities were transferred to certain subsidiaries of Adelphia Cablevision, LLC. The RME Debtors filed for chapter 11 protection on March 31, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10622 through 06-10642). Their cases are jointly administered under Adelphia Communications and its debtor-affiliates chapter 11 cases. (Adelphia Bankruptcy News, Issue No. 159; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). ADESA INC: Planned Buyout Prompts S&P’s Negative CreditWatch ------------------------------------------------------------ Standard & Poor's Ratings Services placed its 'BB' corporate credit and debt ratings on Carmel, Indaina-based wholesale vehicle auctioneer ADESA Inc. on CreditWatch with negative implications. At the same time, S&P placed the 'B' corporate credit and debt ratings on Westchester, Illinois-based Insurance Auto Auctions Inc. on CreditWatch with positive implications. The ratings actions follow the announcement that ADESA and IAAI have entered into a definitive merger agreement to be acquired by a group of private equity funds consisting of Kelso & Company, GS Capital Partners, ValueAct Capital, and Parthenon Capital in a transaction valued at $3.7 billion. The CreditWatch listings incorporate the assumption that the ultimate combined entity will be highly leveraged, as is typical of private equity purchases. ADESA is assigned a CreditWatch negative listing because the leverage of the combined entity would exceed that of ADESA's. Likewise, S&P has assigned a CreditWatch positive listing to IAAI because it is unlikely the combined entity would carry more debt than the very aggressively leveraged IAAI. In total, the transaction contemplates the assumption or refinancing of about $700 million of the two companies' debt. S&P will assess the effect of the buyout announcement on the ratings on ADESA and IAAI as details emerge in the weeks ahead. S&P expects to resolve its CreditWatch listings no later than when the transaction closes, which is expected to occur in the first half of 2007. If all rated debt is refinanced as part of the transaction, the ratings will be withdrawn. AMERICAN CREDIT: Court Conditionally Approves Disclosure Statement ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Eastern District of North Carolina, Wilson Division, conditionally approved American Credit Company's Disclosure Statement explaining its Liquidating Plan of Reorganization. The last day to the oppose Disclosure Statement is on Jan. 22, 2007. Plan Implementation The Debtor will vacate its present corporate offices in January 2007, and consolidate its books and records, and any continued Plan or business activities at its current branch office located in Greenville, North Carolina on a month-to-month lease basis. The Debtor relates it will make its best efforts to reduce current employee payroll to only those necessary for Plan implementation by January 2007. Debtor will determine how to dispose of its tangible personal property, which excludes accounts receivables, and such items necessary to implement and consummate the confirmed Plan, either by auction or private sale with such decision to be made, if at all practicable, by Jan. 20, 2007. Payments provided under the terms of the Plan will be made from: a) Debtor's Cash on Hand at Effective Date; b) net proceeds from Debtor's collection of accounts receivable and tax refunds, if any; c) net proceeds from recoveries of Designated Litigation, if any; and d) net sale proceeds from any other Retained Assets designated for the sale. Additionally, payments to Unsecured Creditors will be made from Bankruptcy Litigation Proceeds, if any. Treatment of Claims Under the Plan, All Administrative, Priority and Tax Claims will be paid in full. Holders of Unsecured Claims will be paid on a pro rata basis from the Disposition Proceeds, after administrative, priority, tax, and secured claims have been paid in full; and the Bankruptcy Litigation Proceeds. Shareholder interests will be terminated and extinguished. Wells Fargo's Secured Claim The Debtor discloses that Wells Fargo Financial Preferred Capital, Inc.’s secured claim amounts to $12.9 million. The Plan provides that: (1) Wells Fargo will retain its lien in its collateral; (2) The Wells Fargo loan will be decelerated, as necessary, treated as a current, nondefault loan, and the outstanding balance calculated as of the Effective Date by application of the contract, non-default, rate of interest through the Effective Date; (3) The outstanding balance of the Wells Fargo claim, will be calculated on a non-default basis, as of the Effective Date, with all post-petition payments, including, without limitation, payments of sale proceeds from the Court approved sales of Debtor’s assets constituting Wells Fargo collateral, made prior to the Confirmation Date, being applied as principal payment reductions; (4) The Wells Fargo Aggregate Balance will bear interest at a fixed, simple interest rate of 8%, and will become due and payable in full six months after the Effective Date. Interim payments will be made on the Wells Fargo Aggregate Balance prior to the Maturity Date: (a) in the amount of the sale proceeds from Court approved sale(s) of Wells Fargo collateral at the time of sale closing; or (b) to the extent that Debtor has funds on hand after payment of administrative, priority, and tax claims of an amount greater than $75,000, excluding Bankruptcy Litigation Proceeds, Debtor will pay such excess funds to Wells Fargo on a monthly basis; (5) In the event that the outstanding allowed Wells Fargo Claim on the Maturity Date is less than $1 million, and there are Third Party Collection Accounts, having a principal balance of at least $1.5 million, then the Maturity Date will be extended for an additional six months, and payment shall be made on a cash collected basis, with payments made directly by the third party collection agent(s) to Wells Fargo. (6) Upon the occurrence of the Maturity Date, and the inapplicability of the Extended Maturity Date, or upon the occurrence of the Extended Maturity Date, if applicable, the remaining accounts receivables shall be sold at public auction. Wells Fargo will have the right to credit bid at the auction. (7) In the event that Wells Fargo accepts, supports, and votes in favor of confirmation of this Plan, upon confirmation it will automatically released from any and all actions, causes of action, claims, demands, damages, costs and expenses, which the Debtor, its successors and assigns, or any of them now have or ever had against the Wells Fargo; (8) No pre-payment penalty shall apply to the repayment of the Wells Fargo Claim; (9) At the election of Wells Fargo, to be made within twenty days of the Confirmation Date, Wells Fargo may elect to receive a non-recourse assignment from the Debtor of that $450,000 Promissory Note from Future Financial Services, LLC to American Credit Company dated June 24, 2004, in return for a credit reduction of its allowed Wells Fargo claim in the amount of the outstanding principal balance of that Future Financial Note; (10) In the event that Debtor is unable to sell all or part of its accounts receivables for fair value and the same are, or are to be, turned over to a collection agent(s), then at the election of Wells Fargo, all the accounts receivables may be assigned without recourse by the Debtor to Wells Fargo in return for a credit reduction of the Wells Fargo allowed secured claim in an amount equal to 65% of the principal balance of the Third Party Collection Accounts. A full-text copy of the Disclosure Statement is available for a fee at: About American Credit Headquartered in Greenville, North Carolina, American Credit Company, aka Resident Lenders of North Carolina, Inc. is a financial services company that provides consumer loans and auto financing. The Debtor filed for chapter 11 protection on July 21, 2006 (Bankr. E.D. N.C. Case No. 06-02189). Gregory B. Crampton, Esq., and Stephani W. Humrickhouse, Esq., at Nicholls & Crampton, P.A., represent the Debtor. Brian D. Darer, Esq., at Parker Poe Adams & Bernstein LLP represents the Official Committee of Unsecured Creditors. The Debtor's financial condition as of May 31, 2006 showed total assets of $21,263,884 and total debts of $18,075,640. The Debtor's exclusive period to file a chapter 11 plan expires on Nov. 18, 2006. AMERICAN CREDIT: Confirmation Hearing Scheduled on February 6 ------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of North Carolina set 2:00 p.m., on Feb. 6, 2007, to consider confirmation of American Credit Company’s Liquidating Plan of Reorganization. Objections, if any, must be filed by Jan. 22, 2007. Headquartered in Greenville, North Carolina, American Credit Company, aka Resident Lenders of North Carolina, Inc. is a financial services company that provides consumer loans and auto financing. The Debtor filed for chapter 11 protection on July 21, 2006 (Bankr. E.D. N.C. Case No. 06-02189). Gregory B. Crampton, Esq., and Stephani W. Humrickhouse, Esq., at Nicholls & Crampton, P.A., represent the Debtor. Brian D. Darer, Esq., at Parker Poe Adams & Bernstein LLP represents the Official Committee of Unsecured Creditors. The Debtor's financial condition as of May 31, 2006 showed total assets of $21,263,884 and total debts of $18,075,640. The Debtor's exclusive period to file a chapter 11 plan expires on Nov. 18, 2006. AMERICAN TECHNOLOGIES: Posts $1.2 Million Loss in Q. Ended Oct. 31 ------------------------------------------------------------------ American Technologies Group Inc. reported a $1.2 million net loss on $7.6 million of net sales for the first quarter ended Oct. 31, 2006, compared with an $11.5 million net loss on $4 million of net sales for the same period in 2005. The primary reason for the increase in revenue was the inclusion of a full quarter of North Texas and Whitco revenue in 2006, with only partial North Texas and no Whitco revenue in 2005. The decrease in net loss is primarily due to the $62,200 operating income in the current quarter mainly resulting from the increase in net sales and the decrease in operating expenses, compared to a $6.9 million operating loss in the previous quarter, the $787,232 decrease in interest expense, and the $2.5 million decrease in financing costs. At Oct. 31, 2006, the company's balance sheet showed $18.2 million in total assets, $15.9 million in total liabilities, and $2.2 million in total stockholders' equity. Full-text copies of the company's consolidated financial statements for the year ended July 31, 2006, are available for free at http://researcharchives.com/t/s?17a2 Going Concern Doubt Russell Bedford Stefanou Mirchandani LLP,in New York, New York, expressed substantial doubt about American Technologies Group Inc.'s ability to continue as a going concern after auditing the Company's financial statements for the fiscal year ended July 31, 2006. The auditor pointed to the company's recurring losses and difficulty in generating sufficient cash flow to meet its obligations and sustain its operations. About American Technologies American Technologies Group Inc. (NASDAQ: ATEG) -- http://www.ateg.com/-- through its subsidiary North Texas Steel Company Inc., provides fabrication and detailing of structural steel components for commercial buildings, office buildings, convention centers, sports arenas, airports, schools, churches and bridges. Customers are general construction contractors who are building projects for owners, developers and government agencies. AMRESCO COMMERCIAL: Fitch Rates $2.4 Million Class K Certs. at B- ----------------------------------------------------------------- Fitch affirms AMRESCO Commercial Mortgage Funding I Corp.'s, mortgage pass-through certificates, series 1997-C1: -- Interest-only class X at 'AAA'; -- $5.9 million class E at 'AAA'; -- $9.6 million class F at 'AAA'; -- $31.2 million class G at 'AAA'; -- $4.8 million class H at 'A+'; -- $7.2 million class J at 'BB+'; -- $2.4 million class K at 'B-'. Fitch does not rate the $8.7 million class L certificates. Classes A-1, A-2, A-3, B, C, and D have been paid in full. The rating affirmations are the result of increased credit enhancement offsetting a high concentration of Fitch loans of concern. As of the December 2006 distribution date, the pool's aggregate principal balance has been reduced 85.5% to $69.8 million from $480.1 million at issuance, an increase of 7% since the last Fitch rating action. Two assets (12.2%) are in special servicing with expected losses. The largest specially serviced asset (8.5%) is a real estate owned multifamily property in Atlanta, Georgia. The special servicer is actively marketing the property for sale. The second largest specially serviced asset (3.70%) is a REO industrial property in Leonminster, Massachusetts. The property is 100% vacant and also currently listed for sale. In total, Fitch loans of concern comprise 43.5% of the pool. This includes the two specially serviced assets, as well as the second and third largest loans in the pool(8.8% and 8.7% respectively). The second largest loan is collateralized by a healthcare center in Brooklyn, NY and continues to have a debt service ratio below 1.0x. As of year-end 2005, the servicer provided DSCR was -0.3x, and year to date June 2006 was -0.04x. The loan remains current. The third largest loan is collateralized by a multifamily property in Tulsa, Oklahoma. The YE 2005 DSCR was 0.81x. Expenses at the property have increased since issuance. Twenty-one loans remain in the pool and 80% of them mature in 2007. Fitch will monitor the loans' ability to refinance. ANDREW CORP: Lack of Purchase Offers Prompt S&P’s Positive Watch ---------------------------------------------------------------- Standard & Poor's Ratings Services revised its CreditWatch implications on Andrew Corp. to positive from negative. The 'BB' corporate credit and 'B+' subordinated debt ratings were placed on CreditWatch with negative implications on Aug. 10, 2006. "[The] action reflects that there have been no signs of external plans to acquire Andrew since the withdrawal of CommScope's bid on Aug. 15, 2006," said Standard & Poor's credit analyst Bruce Hyman. Andrew had rejected CommScope's cash tender offer, and had indicated at the time that it could engage in defensive measures. There is now no indication that any defensive measures would be necessary, and Andrew has subsequently continued its historical practice of moderate-sized acquisitions and divestitures to broaden its product line and bolster its operating profitability. Andrew's operating performance has been good, with 9% sales growth for the fiscal year ended Sept. 30, 2006. Debt leverage continues to be moderate, below 2.5x. Standard & Poor's will assess the company's business and financial profiles, following which ratings could be adjusted upwards. Ratings are not expected to reach investment grade, given the highly competitive markets in which the company operates, expectations for continued acquisitions, and the company's good, but second-tier position in its industry. ARTESIA MORTGAGE: Fitch Lifts Rating on $5.6-Mil. Certs to BB+ -------------------------------------------------------------- Fitch upgrades these classes of Artesia Mortgage CMBS, Inc.'s, commercial mortgage pass-through certificates, Series 1998-C1: -- $8.4 million Class F to 'AA' from 'A+'; -- $5.6 million Class G to 'BB+' from 'BB'. In addition, Fitch affirms these classes: -- $24.7 million Class A-2 at 'AAA'; -- Interest-only Class X at 'AAA'; -- $9.3 million Class B at 'AAA'; -- $11.2 million Class C at 'AAA' -- $9.8 million Class D at 'AAA'; -- $3.3 million Class E at 'AAA'. Fitch does not rate the $4.8 million Class NR. Class A-1 has been paid in full. The rating upgrades reflect increased subordination levels due to loan amortization and prepayments since Fitch's last rating action. As of the November 2006 distribution date, the pool's aggregate certificate balance was reduced 58.7% to $77.2 million from $187 million at issuance. The pool is comprised of 121 small balance loans with an average loan size of $638,045. As is typical of a small loan transaction, the pool is diversified by loan size with the largest loan and the largest five loans representing 2% and 8.7%; respectively. Thirteen loans (13%) are Fitch loans of concern due to declines in DSCR and occupancy. The fourth largest loan in the deal (1.7%) is secured by an industrial/warehouse facility located in South Hackensack, New Jersey. The loan is current, but continues to show declining performance. The property is owner occupied and the borrower pays rent according to the profitability of the business. BANC OF AMERICA: Fitch Holds B- Rating on $5.9 Mil. Certificates ---------------------------------------------------------------- Fitch Ratings upgrades Banc of America Commercial Mortgage Inc.'s commercial mortgage pass-through certificates, series 2001-1: -- $19 million class D to 'AAA' from 'AA+'; -- $9.5 million class E to 'AA+' from 'AA'; -- $9.5 million class F to 'AA' from 'A+'; -- $19 million class G to 'A' from 'A-'; -- $14.2 million class H to 'BBB+' from 'BBB'. Fitch also affirms these classes: -- $502.2 million class A-2 at 'AAA'; -- $47.6 million class A-2F at 'AAA'; -- Interest-only class X at 'AAA'; -- $35.6 million class B at 'AAA'; -- $21.3 million class C at 'AAA'; -- $23.5 million class K at 'BB'; -- $13.3 million class J at 'BBB-'; -- $2.1 million class L at 'BB-'; -- $5.5 million class M at 'B+'; -- $6.8 million class N at 'B'; -- $5.9 million class O at 'B-'. Fitch does not rate the $5.4 million class P certificates. Class A-1 has been paid in full. The rating upgrades reflect increased subordination levels due to payoffs and scheduled amortization, as well as the additional defeasance of 18 loans (7%) since Fitch's last rating action. As of the December 2006 distribution date, the pool's aggregate balance has decreased 21.9% to $740.3 million from $948.1 million at issuance. Thirty-one loans (14.4%) have defeased since issuance. Currently, four loans (2.6%) are in special servicing. The largest specially serviced loan (1.4%) is a multi-family property in Lindenwold, New Jersey, which is current. The property is suffering cash flow problems due to declining occupancy. The special servicer is evaluating the borrower's request. The second largest specially serviced loan (0.7%) is a retail shopping center in Arabi, Louisiana, and is 90-plus days delinquent. The property suffered heavy damage due to Hurricane Katrina. The borrower has received limited proceeds from the insurance company for hurricane-related damages, and the insurance claim by the single tenant, which was self-insured, remains pending. The single tenant has yet to recommence operations at the site. The special servicer is dual-tracking a foreclosure along with a workout. The third largest specially serviced loan (0.4%) is an office property in Greenville, South Carolina, which is current. The loan transferred to special servicing in September 2006 due to imminent default. The special servicer is assessing workout options with respect to this loan. Fitch expects that projected losses on the specially serviced loans will be absorbed by the nonrated class P. Fitch has designated 28 loans as Fitch Loans of Concern; these include the specially serviced loans and those loans with low cash flow and occupancy. Of these loans, the largest Loan of Concern, which is the fifth largest loan (2.3%) in the pool, is an office property in Phoenix, Arizona, which has been performing poorly since 2003 due to occupancy issues. The loan remains current, and occupancy has increased to 77% at June 2006 from 69% at year-end 2005. The 315 Park Avenue South loan (11.6%), the only credit assessed loan in the transaction, maintains an investment-grade credit assessment. Occupancy at June 2006 remains in line with year-end 2005 occupancy at 92%. BOSTON GENERATING: S&P Rates $1.13 Billion Term Loan at B+ ---------------------------------------------------------- Standard & Poor's Ratings Services assigned final ratings on Boston Generating LLC's planned debt issues: * $70 million first-lien revolving credit facility due 2011 rated 'B+', with a recovery rating of '1'; * $250 million first-lien LOC facility due 2013 rated 'B+', with a recovery rating of '1'; * $1.13 billion first-lien term loan due 2013 rated 'B+', with a recovery rating of '1'; and * $350 million second-lien term loan due 2014 rated 'B-', with a recovery rating of '4'. At the same time, Standard & Poor's withdrew its preliminary ratings on these issues. The proceeds from these issues, in addition to $300 million of holding company notes, will refinance Boston Gen's existing debt, fund a $1 billion share repurchase and distribution to existing shareholders, provide for LOCs and liquidity, and be used for other general corporate purposes. The rating affirmations follow Standard & Poor's review of Boston Gen's final draft lending documents, and the ratings remain subject to review on delivery of final documentation. "The stable outlook on Boston Gen reflects the ability of the assets to sustain low power prices, given the current forward price curve for power and gas and the reserves in place," said Standard & Poor's credit analyst Kenneth L. Farer. "Under low gas-price scenarios, the project will suffer without the benefit of reliability-must-run or forward capacity market payments." BOWATER INC: To Delist Common Stock in NYSE Arca on December 31 --------------------------------------------------------------- Bowater Inc. elected to cancel the listing of its common stock on NYSE Arca, Inc., fka the Pacific Exchange, effective Dec. 31, 2006. Bowater made the decision to voluntarily withdraw its listing from NYSE Arca to eliminate duplicative administrative requirements inherent with dual listings on two of the NYSE Group’s exchanges. However, Bowater’s common stock will continue to be listed on the New York Stock Exchange. Shareholders queries should be directed to: The Bank of New York Investor Relations Department P.O. Box 11258, Church Street Station New York, NY 10286 Tel: (620) 382-7833 http://www.bankofny.com/ About Bowater Inc. Headquartered in Greenville, South Carolina, Bowater Incorporated (NYSE:BOW) -- http://www.bowater.com/en/-- produces newsprint and coated mechanical papers. In addition, the company makes uncoated mechanical papers, bleached kraft pulp and lumber products. The company approximately has 7,800 employees and has 12 pulp and papermills in the United States, Canada and South Korea and 12 North American sawmills that produce softwood lumber. Bowater also operates two facilities that convert a mechanical base sheet to coated products. Bowater's operations are supported by approximately 1.4 million acres of timberlands owned or leased in the United States and Canada and 30 million acres of timber cutting rights in Canada. Bowater common stock is listed on the New York Stock Exchange, the Pacific Exchange and the London Stock Exchange. A special class of stock exchangeable into Bowater common stock is listed on the Toronto Stock Exchange. * * * As reported in the Troubled Company Reporter on June 27, 2006, Fitch Ratings has assigned a 'BB' rating to Bowater, Inc.'s senior secured bank debt. The company's issuer default ratings, 'BB-' and senior unsecured bond ratings, 'BB-', remain unchanged. The Rating Outlook remains Stable. CALIFORNIA HEALTH: S&P Affirms BB Rating & Says Outlook is Stable ----------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook to stable from negative and affirmed its 'BB' rating on the California Health Facilities Financing Authority's outstanding revenue bonds issued for Downey Community Hospital, dba Downey Regional Medical Center. The outlook revision was based on operating improvement in fiscal 2006 and the resulting improvement in maximum annual debt service coverage. "The revised outlook was based on improved operating results in fiscal 2006 that were driven by increased utilization, with an operating margin of negative 0.9% and MADS coverage of 2.2x," said Standard & Poor's credit analyst James Cortez. "The hospital also experienced stabilized liquidity levels and its debt levels are manageable." The speculative grade rating takes into account that while operating losses decreased in fiscal 2006, overall liquidity failed to improve and remained similar to fiscal 2005 levels. Furthermore, the rating reflects uncertainty regarding the timing and sources of funding for significant seismic construction needs that will need to be addressed in the near future. Downey operates a 199-staffed-bed acute care hospital in the City of Downey in southeast Los Angeles County, and serves a population of about 1.4 million. In addition to the medical center, the entire Downey system includes a parent corporation as well as two affiliates (a for-profit insurance agency and a for-profit property holding company. Market share at the hospital has remained stable at approximately 13%, with the primary competition consisting of higher tertiary facilities located in Whittier, Los Angeles, and Long Beach. A new Kaiser Permanente hospital and medical office complex is also being built in Downey. However, the new facility is expected to have a minimal effect on volumes as the new facility will replace an existing facility only two miles from the construction site. Upon opening, the new Kaiser facility could result in a loss of Downey employees and create a need for increased wages or hiring going forward. CATHOLIC CHURCH: U.S. Trustee Appoints Davenport's Creditors Panel ------------------------------------------------------------------ Habbo G. Fokkena, the U.S. Trustee for Region 12, appoints seven members to the Official Committee of Unsecured Creditors for the Diocese of Davenport's Chapter 11 case: (1) Mike Uhde 2714 East Locust Street Davenport, Iowa 52803 (563) 340-9649 (2) Mike Gould 705 89th Ct. NN Bradenton, Florida 34209 (941) 518-1548 (3) John Doe # 13 Under seal To be disclosed by order of the Court (4) John Doe # 65 Under seal To be disclosed by order of the Court (5) John Doe # 18 Under seal To be disclosed by order of the Court (6) John Doe # 23 Under seal To be disclosed by order of the Court (7) John Doe # 55 Under seal To be disclosed by order of the Court Mr. Fokkena relates that Mr. Uhde is designated as Acting Chairperson, pending selection by the Committee members of a permanent Chairperson. The Diocese of Davenport in Iowa filed for chapter 11 protection (Bankr. S.D. Ia. Case No. 06-02229) on October 10, 2006. Richard A. Davidson, Esq., at Lane & Waterman LLP, represents the Davenport Diocese in its restructuring efforts. In its Schedules of Assets and Liabilities filed with the Court, the Davenport Diocese reports $4,492,809 in assets and $1,650,439 in liabilities. (Catholic Church Bankruptcy News, Issue No. 75; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) CATHOLIC CHURCH: Portland Inks Stipulation Allowing Fund Payout --------------------------------------------------------------- In a stipulated order signed by Judge Perris, St. Mary - Our Lady of the Dunes Roman Catholic Church; the St. Mary Claimants; the Archdiocese of Portland in Oregon; Portland's Tort Claimants Committee; the Committee of Catholic Parishes, Parishioners and Interested Parties; the Future Claimants' Representative; and the United States' Trustee agree to terms directing Portland to disburse uncommitted funds remaining in the Archdiocese Loan and Investment Program under the name of St. Mary, Our Lady of the dunes for completion of the construction of the addition to St. Mary, Our Lady of the Dunes Parish Church in Florence, Oregon. The Parties agree that: (a) Portland may expend up to $461,317, outside of the ordinary course of business, for completion of the new church building provided that: -- no less than $268,589 of that amount is funded from postpetition contributions of parishioners dedicated to the building project; and -- no more than the remaining balance of the ALIP account is to be used to fund the construction; (b) The uncommitted ALIP funds may be used so long as no more than 39% of any single construction draw, and no more than 39% of the sum of all remaining construction costs and draws, will be paid from the funds held; (c) The order will not have any bearing on the Court's decision in the litigation to determine whether "parish assets" might be available to satisfy claims against the Archdiocese. The Court's decision will not be treated as precedent, rule of the case, or a change in ownership that might warrant a different decision than might otherwise be rendered in adversary proceedings pending before the Court; and (d) The postpetition contributions of parishioners to the building project will be treated as contributions to St. Mary. They will not be treated as a loan or other type of postpetition transaction that might give rise to an administrative claim, and they will have the same status as prepetition contributions to St. Mary. The Archdiocese of Portland in Oregon filed for chapter 11 protection (Bankr. Ore. Case No. 04-37154) on July 6, 2004. Thomas W. Stilley, Esq., and William N. Stiles, Esq., at Sussman Shank LLP, represent the Portland Archdiocese in its restructuring efforts. Albert N. Kennedy, Esq., at Tonkon Torp, LLP, represents the Official Tort Claimants Committee in Portland, and scores of abuse victims are represented by other lawyers. David A. Foraker serves as the Future Claimants Representative appointed in the Archdiocese of Portland's Chapter 11 case. In its Schedules of Assets and Liabilities filed with the Court on July 30, 2004, the Portland Archdiocese reports $19,251,558 in assets and $373,015,566 in liabilities. (Catholic Church Bankruptcy News, Issue No. 75; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) CITIZENS COMMS: Prices $400 Million 7.875% Senior Unsecured Notes ----------------------------------------------------------------- Citizens Communications Company has priced its offering of $400 million in aggregate principal amount of 7.875% senior unsecured notes due Jan. 15, 2027. The issue price is 100% of the principal amount of the notes. The offering is an increase of $150 million from the previous $250 million offering. The company intends to use the net proceeds from the offering to finance, in part, the acquisition of Commonwealth Telephone Enterprises, Inc. (NASDAQ: CTCO). If the acquisition is not consummated, the company will use the net proceeds to repurchase, redeem or retire a portion of its outstanding debt. The notes are, the company disclosed, senior unsecured obligations and will rank equally with all other existing and future senior unsecured indebtedness. The notes were offered in the United States to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended and outside the United States pursuant to Regulation S under the Securities Act. The notes were not registered under the Securities Act and may not be offered or sold in the United States without registration or an applicable exemption from the registration requirements. Headquartered in Stamford, Connecticut, Citizens Communications Company fka Citizens Utilities (NYSE: CZN) -- http://www.czn.net/-- provides phone, TV, and Internet services to more than two million access lines in parts of 23 states, primarily in rural and suburban markets, where it is the incumbent local-exchange carrier operating under the Frontier brand. * * * As reported in Troubled Company Reporter on Nov. 16, 2006 Standard & Poor's Ratings Services affirmed its ratings on Stamford, Connecticut-based Citizens Communications Co., including the 'BB+' corporate credit rating. The rating outlook is negative. As reported in the Troubled Company Reporter on Sept. 20, 2006, Fitch Ratings affirmed Citizens Communications Company's Issuer Default Rating rating at 'BB'. The Rating Outlook is Stable. As reported in the Troubled Company Reporter on Sept. 20, 2006, Moody's Investors Service upgraded the corporate family rating of Citizens Communications to Ba2 from Ba3 and also assigned a Ba2 probability of default rating to the company. The ratings on the senior unsecured revolver and the senior unsecured notes and debentures were also upgraded to Ba2 from Ba3. The instrument ratings reflect both the overall Ba2 probability of default of the company, and a loss given default of LGD 4. The ratings on the preferred EPPICS were upgraded to B1 from B2, and assigned an LGD6 assessment. The outlook is stable. COMM 2004-LNB2: S&P Holds Low-B Ratings on Six Certificate Classes ------------------------------------------------------------------ Standard & Poor's Ratings Services raised its rating on one class of commercial mortgage pass-through certificates from COMM 2004-LNB2. Concurrently, the ratings on the remaining 18 classes were affirmed. The raised and affirmed ratings reflect credit enhancement levels that provide adequate support through various stress scenarios. As of the remittance report dated Dec. 11, 2006, the trust collateral consisted of 88 mortgage loans with an outstanding principal balance of $914 million, compared with 90 loans with a $963.8 million balance at issuance. The master servicer, Capmark Finance Inc., reported primarily year-end 2005 financial information for 95% of the pool. Based on this information and excluding $66.2 million (7%) of defeased collateral, Standard & Poor's calculated an adjusted weighted average debt service coverage of 1.76x, up from 1.53x at issuance. With the exception of one loan ($2.4 million) that is 30-plus-days delinquent and one loan ($2.8 million) that is 60-plus-days delinquent and with the special servicer, LNR Partners Inc., all of the loans in the pool are current. To date, the trust has experienced $800,000 in realized losses. The top 10 exposures have an aggregate outstanding in-trust balance of $496.4 million (54%) and a weighted average DSC of 1.96x, up from 1.62x at issuance. The increase is inflated, however, as six of the top 10 loans have partial interest-only periods, and the DSC at issuance included the amortization of these loans. Three of the top 10 exposures experienced significant declines in DSC, one of which is on the master servicer's watchlist. Standard & Poor's reviewed the master servicer's property inspection reports for the top 10 exposures, and all were reported to be in "good" condition except for some of the properties in the AFR/Bank of America portfolio and one property in the Wiener Portfolio III, which were said to be in "fair" condition. At issuance, three of the top 10 exposures in the pool had credit characteristics consistent with those of investment-grade obligations, and they continue to do so. Tysons Corner Center is the largest exposure in the pool, with a trust balance of $145.9 million (16%) and a whole-loan balance of $336.4 million. The whole loan consists of an A note that is split into four pari passu pieces. The loan is secured by 1.6 million sq. ft. of a 2.3 million-sq.-ft. super-regional retail center in McLean, Virginia. Standard & Poor's underwritten net cash flow has increased 13% since issuance. The property reported a DSC of 2.84x as of December 2005 and occupancy of 95% as of June 2006. The AFR/Bank of America portfolio, the third-largest exposure, has a trust balance of $73.7 million (8%) and a total loan balance of $381.7 million. This loan consists of a $294.9 million A note that is participated into six pari passu pieces. The properties are also encumbered by an $86.8 million B note that is held outside of the trust. To date, the collateral for $29.9 million of the total loan balance has been defeased, $5.8 million of which represents the trust's portion of the outstanding loan balance. The remaining real estate collateral includes 133 office complexes totaling 6.6 million sq. ft. in various locations throughout the U.S. While the AFR/Bank of America portfolio's operating performance has remained stable, it has not met the original underwriting expectations. However, it is expected that additional collateral will be released and defeased in 2007. Standard & Poor's will continue to monitor the loan's performance. The property reported a DSC of 1.75x and occupancy of 90% as of June 30, 2006. Meadows Mall, the fourth-largest exposure, has a trust balance of $53.5 million (6%) and a whole-loan balance of $106.9 million. The whole loan consists of an A note that is split into two pari passu pieces. The loan is secured by 312,200 sq. ft. of a 949,100-sq.-ft. enclosed regional retail mall in Las Vegas, Nevada. Standard & Poor's underwritten NCF has increased 6% since issuance due to higher income and slightly lower operating expenses. DSC was 3.93x and occupancy was 93% as of June 2006. Four loans totaling $10.4 million (1%) are with the special servicer. Keesler Apartments, the largest exposure with the special servicer, is a 144-unit multifamily apartment complex in Biloxi, Mississippi, which is encumbered by a $3.7 million loan that is current. The loan was transferred to LNR in October 2005 after the collateral incurred damage from Hurricane Katrina and experienced payment issues. The property sustained some water damage and mold growth, mostly from roof leaks. Although the borrower is currently in dispute with the insurance company regarding the estimated repair costs, roof repairs have begun, with no indicated completion date. The special servicer is monitoring the loan for timely payment before returning it to the master servicer. The property reported a DSC of 0.93x as of September 2006 and occupancy of 66% as of March 2006. The remaining loans with the special servicer are cross-collateralized and cross-defaulted and have an aggregate balance of $6.7 million. They were transferred in November 2006 due to the borrower's inability to cover debt service obligations for one of the loans ($2.8 million). The loan is secured by Woodstock Apartments, a 140-unit garden-style multifamily property in Fort Worth, Texas. The property has experienced a decline in performance due to the collateral's location in an area with high crime rates, and it is considered inferior to its competitors. DSC was 0.43x as of June 2006, and occupancy was 56% as of September 2006. The remaining two related loans are secured by Texas multifamily properties, both well-occupied, with DSCs above 1.35x as of June 2006. The master servicer reported 19 loans totaling $104.5 million (11%) on its watchlist. The ninth-largest exposure ($22.9 million, 3%), Wiener Portfolio III, is secured by two 21-story high-rise multifamily apartment complexes with 459 units in Bronx, New York. The loan was placed on the watchlist due to a low combined DSC of 0.63x as of June 30, 2006, down from 0.97x at Dec. 31, 2005, and 1.21x at issuance. Combined occupancy was 87% as of June 30, 2006. The remaining loans on the watchlist have low DSCs. Standard & Poor's stressed various assets in the mortgage pool as a part of its analysis, including those with the special servicer, on the watchlist, or otherwise considered credit impaired. The resultant credit enhancement levels adequately support the raised and affirmed ratings. Ratings Raised COMM 2004-LNB2 Commercial mortgage pass-through certificates Rating ------ Class To From Credit enhancement ----- -- ---- ------------------ B AA+ AA 11.38% Ratings Affirmed COMM 2004-LNB2 Commercial Mortgage Pass-Through Certificates Class Rating Credit enhancement(%) ----- ------ --------------------- A-1 AAA 14.15 A-2 AAA 14.15 A-3 AAA 14.15 A-4 AAA 14.15 C AA- 10.33 D A 8.22 E A- 7.29 F BBB+ 6.24 G BBB 5.05 H BBB- 3.87 J BB+ 3.34 K BB 2.68 L BB- 2.29 M B+ 1.76 N B 1.50 O B- 1.36 X-1 AAA N/A X-2 AAA N/A N/A - Not applicable. CPS CAYMAN: Moody's Rates $14.3 Million 7.25% Class B Notes at Ba3 ------------------------------------------------------------------ Moody's Investors Service assigned ratings of Prime-1 to the Class A-1 money market tranche and a long-term rating of Aaa to the Class A-2 through A-4 notes issued by CPS Auto Receivables Trust 2006-D and a long-term rating of Ba3 to the Class B deferrable interest notes issued by CPS Cayman Residual Trust 2006-D. This transaction is the fourth subprime auto loan securitization by Consumer Portfolio Services, Inc. in 2006. The rating of Prime-1 for the Class A-1 notes is based primarily on the expected cashflows on the underlying receivables during the collection periods prior to the Class A-1 final maturity date, and partially on the financial guaranty insurance policy provided by Financial Security Assurance Inc., whose insurance financial strength rating is Aaa. The ratings of Aaa for the Class A-2 through A-4 notes are based primarily on the FSA policy. Moody's believes the risk assumed by FSA in insuring the notes is investment-grade at closing The rating for the Class B deferrable interest notes is based on the collateral and credit enhancement in the transaction. These are the rating actions: * CPS Auto Receivables Trust 2006-D -- $30,950,000, 5.34244% Class A-1 Asset backed Notes, rated P-1; -- $65,800,000, 5.318% Class A-2 Asset backed Notes, rated Aaa; -- $32,600,000, 5.157% Class A-3 Asset backed Notes, rated Aaa; and, -- $66,450,000, 5.115% Class A-4 Asset backed Notes, rated Aaa. * CPS Cayman Residual Trust 2006-D -- $14,300,000, 7.25% Class B Deferrable Interest Asset backed Notes, rated Ba3. DELPHI CORP: Gets $950,000 from NASA to Fund Welding Techniques --------------------------------------------------------------- After receiving encouraging results, the National Aeronautics and Space Administration and the Michigan Research Institute will grant Delphi Corporation an additional $950,000 to help fund the continuing development of Deformation Resistance Welding. The first two grants for DRW, totaling $2.17 million, were used to perfect existing welding techniques, to create new ones, and to find new innovative ways to use DRW on suspension sub-frames. The new grant will fund work done by Delphi in cooperation with the Edison Welding Institute and SpaceForm, Inc., a company formed in 2005 based on DRW technology. Planned projects will develop the technology in the area of ferrous and non-ferrous materials, dissimilar material joints, lean tubular structures and concepts for future manufacturing cells. "We're very pleased to have NASA's continued support of this program," said Timothy Forbes, director, commercialization and licensing, Delphi Technologies, Inc. "This continued commitment to DRW for a third phase of projects will allow us to make even more progress for the future of this technology." Delphi's DRW process, developed with funding from NASA's Space Exploration program with its goals to return to the moon and eventually Mars, can deliver reliable, repeatable, leak-free welds at significantly lower cost than conventional welding solutions. Its uniqueness comes from its ability to weld similar and dissimilar materials and shapes. NASA plans to use what is learned from Delphi's work with DRW as part of its Space Power Development Programs. Of specific interest is advanced welding of dissimilar metal joints for integrating titanium based cooling loops with power conversion systems utilizing stainless steel structures. According to researchers, titanium cooling loops offer higher levels of chemical compatibility, along with greater temperature and structural capability than aluminum tubing. This is of particular interest because traditional mechanical joining provides insufficient hermeticity for long life missions. In addition, the DRW technology is beneficial to all areas of manufacturing including: load-bearing structural applications, mobile medical products, automobiles, bicycles, motorcycles, commercial and recreational vehicles because of its ability to handle tube-to-tube and tube-to-sheet welding. "This latest grant from NASA will allow Delphi to work with EWI and SpaceForm to expand the capabilities of DRW," said Jayson Pankin, new venture creation specialist, Delphi. "Delphi will be in a stronger position to provide innovative joining and structural solutions to a broader set of customers." This Delphi project, funded by the latest NASA grant, is expected to be completed by the end of 2007. Troy, Mich.-based Delphi Corporation -- http://www.delphi.com/-- is the single largest global supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The Company's technology and products are present in more than 75 million vehicles on the road worldwide. The Company filed for chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represents the Official Committee of Unsecured Creditors. As of Aug. 31, 2005, the Debtors' balance sheet showed $17,098,734,530 in total assets and $22,166,280,476 in total debts. DIANA NORBERGS: Case Summary & Nine Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Diana Anda Norbergs 5200 Enclave Drive Oldsmar, FL 34677 Bankruptcy Case No.: 06-07149 Chapter 11 Petition Date: December 14, 2006 Court: Middle District of Florida (Tampa) Debtor's Counsel: David S. Jennis, Esq. Jennis Bowen & Brundage, P.L. 400 North Ashley Drive, Suite 2540 Tampa, FL 33602 Tel: (813) 229-1700 Fax: (813) 229-1707 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's Nine Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Florida Infusion Services Guaranty of Trade $800,000 1053 Progress Court Debt Palm Harbor, FL 34683 Oncology Therapeutics Judgment on $750,000 Network Corp. Guaranty of Trade c/o David J. Cook Debt (on appeal) 333 Pine Street, Suite 300 San Francisco, CA 94104-3381 AmSouth Bank Guaranty of Credit $234,203 P.O. Box 1984 Line to Tampa Bay Area Birmingham, AL 35201 Cancer Consultants Bank of America Credit Card Debt $47,000 P.O. Box 15713 Wilmington, DE 19886-5713 Chase Credit Card Credit Card Debt $35,099 Correspondence Department P.O. Box 15298 Wilmington, DE 19850-5298 Moody and Hill Attorney Fees $28,104 Bette Davis Small Claims Judgment $1,500 Cardinal Health Specialty Guaranty of Trade Debt Unknown Pharm. Distribution CuraScirpt SD Guaranty of Trade Debt Unknown DIANNE BUCHANAN: Case Summary & 12 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Dianne M. Buchanan 1256 Eversole Road Cincinnati, OH 45230 Bankruptcy Case No.: 06-14429 Chapter 11 Petition Date: December 14, 2006 Court: Southern District of Ohio (Cincinnati) Judge: Jeffery P. Hopkins Debtor's Counsel: G. Timothy Dearfield, Esq. Dearfield, Kruer & Company, LLC 230 Northland Boulevard, Suite 230 Cincinnati, OH 45246 Tel: (513) 772-7213 Fax: (513) 772-6513 Estimated Assets: $1 Million to $100 Million Estimated Debts: $100,000 to $1 Million Debtor's 12 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ American Express Credit Card $39,245 P.O. Box 001 Purchases Los Angeles, CA 90096 Credit Card Unknown Purchases Bank of America Credit Card $21,224 P.O. Box 15726 Purchases Wilmington, DE 19886 U.S. Bank Credit Card $16,602 Anderson Hills Office Purchases P.O. Box 790179 St. Louis, MO 63179 Nationwide Credit, Inc. Credit Card $15,458 Purchases Chase Credit Card $13,908 Purchases Home Depot Credit Card $11,156 Purchases Key Bank Credit Card $10,384 Purchases PNC Bank Credit Card $6,205 Purchases FTB&T Card Services Credit Card $5,358 Purchases Macy's Credit Card $641 Purchases Cincinnati Bell Wireless Wireless phone $449 Service ADT Security Services ADT Security $36 Services DURA AUTOMOTIVE: Can Use Excess Cash in Investment Accounts ----------------------------------------------------------- DURA Automotive Systems, Inc. and its debtor affiliates obtained authority, on a final basis, from the Honorable Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware to continue investing excess cash in accordance with their prepetition practices in the investment accounts. The Debtors say that before they filed for bankruptcy, they invested excess cash in three Investment Accounts: (a) a Directed Investment Account with Bank of America, N.A., (b) a Canadian Dollar Treasury Account with Scotiabank, (c) a US Dollar Treasury Account with Scotiabank. Section 345 of the Bankruptcy Code governs a debtor's deposit and investment of cash during a Chapter 11 case, and authorizes deposits or investments of money as will yield the maximum reasonable net return on that money, taking into account the safety of that deposit or investment. For deposits or investments that are not insured or guaranteed by the United States or by a department, agency, or instrumentality of the U.S. or backed by the full faith and credit of the U.S., Section 345(b) requires the estate to obtain from the entity with which the money is deposited or invested a bond in favor of the U.S. and secured by the undertaking of an adequate corporate surety, unless the Court, for cause, orders otherwise. Daniel J. DeFranceschi, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, asserts that cause exists in the Debtors' Chapter 11 cases for the Court to allow the Debtors to invest their excess funds in the Investment Account: (a) Before the bankruptcy filing, the Debtors invested their cash with the primary goal of protection of principal, and the secondary goal of maximizing yield and liquidity; and (b) The Investment Account provides sufficient protection for their cash and that it would be in the best interest of their estates and creditors for the Debtors to continue to follow the practice for investment of cash. Mr. DeFranceschi argues that the yield in investments in the Investment Account is likely to be greater than mandatorily directing investment in government securities. Moreover, a bond secured by undertaking of a corporate surety will likely be unduly expensive and could offset much of the financial gain derived from investing in the Investment Account. The Debtors maintain that the funds will not be sufficiently at risk to necessitate strict adherence to the requirements of Section 345(b). Moreover, if granted a waiver, the Debtors will not be required to incur the significant administrative difficulties and expenses relating to opening new accounts to ensure that all of its funds are fully insured and invested strictly in accordance with the restrictions established by Section 345. Rochester Hills, Mich.-based DURA Automotive Systems, Inc. (Nasdaq: DRRA) -- http://www.DURAauto.com/-- is an independent designer and manufacturer of driver control systems, seating control systems, glass systems, engineered assemblies, structural door modules and exterior trim systems for the global automotive industry. The company is also a supplier of similar products to the recreation vehicle and specialty vehicle industries. DURA sells its automotive products to North American, Japanese and European original equipment manufacturers and other automotive suppliers. The Debtors filed for chapter 11 petition on October 30, 2006 (Bankr. District of Delaware Case No. 06-11202). Richard M. Cieri, Esq., Marc Kieselstein, Esq., Roger James Higgins, Esq., and Ryan Blaine Bennett, Esq., of Kirkland & Ellis LLP are lead counsel for the Debtors' bankruptcy proceedings. Mark D. Collins, Esq., Daniel J. DeFranseschi, Esq., and Jason M. Madron, Esq., of Richards Layton & Finger, P.A. Attorneys are the Debtors' co-counsel. Baker & McKenzie acts as the Debtors' special counsel. Togut, Segal & Segal LLP is the Debtors' conflicts counsel. Miller Buckfire & Co., LLC is the Debtors' investment banker. Glass & Associates Inc., gives financial advice to the Debtor. Kurtzman Carson Consultants LLC handles the notice, claims and balloting for the Debtors and Brunswick Group LLC acts as their Corporate Communications Consultants for the Debtors. As of July 2, 2006, the Debtor had $1,993,178,000 in total assets and $1,730,758,000 in total liabilities. (Dura Automotive Bankruptcy News, Issue No. 6; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). DURA AUTOMOTIVE: Wants OK on De Minimis Claims Settlement Protocol ------------------------------------------------------------------ DURA Automotive Systems, Inc. and its debtor affiliates ask the U.S. Bankruptcy Court for the District of Delaware to approve uniform procedures for settling certain de minimis claims and causes of action brought by or against the Debtors in a judicial, administrative, arbitral or other proceeding. The Debtors propose to settle De Minimis Claims that do not exceed $1,000,000. Daniel J. DeFranceschi, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, explains that the Debtors seek the authority to negotiate and determine prepetition claim amounts of the De Minimis Claims, not the authority to make payment or distributions on account of those claims. According to Mr. DeFranceschi, in the ordinary course of business, the Debtors may hold various claims and causes of action against third parties, and third parties may hold claims against the Debtors, that they have asserted or will assert through litigation, administrative action or arbitration in appropriate forums. The Debtors' creditor matrix contains approximately 85,000 parties. Mr. DeFranceschi asserts that if the Debtors had to obtain prior Court approval to settle each De Minimis Claim, they would incur significant costs associated with preparing, filing and serving separate motions for each proposed settlement, especially considering the expected number of parties that will request notice and service papers in the Debtors' Chapter 11 cases. Accordingly, the Debtors propose to establish omnibus procedures that will allow them to enter into settlements on a more cost- effective and expeditious basis while preserving an oversight function for key parties-in-interest. Proposed Omnibus Settlement Procedures (a) With respect to any settled amount equal to or less than $250,000, the affected Debtor may agree to settle a claim or cause of action on any reasonable terms. The Debtor may enter into, execute and consummate a written settlement agreement that will be binding on it and its estate without notice to any third party or further Court action; (b) With respect to any settled amount greater than $250,000 but does not exceed $1,000,000, the Debtor may agree to settle the claim or cause of action only if it provides written notice to, and the terms are not objected by: * the United States Trustee for the District of Delaware; * counsel to the agent for the Debtors' prepetition first lien secured lenders; * counsel to the agent for the Debtors' postpetition second lien secured lenders; * counsel to the ad hoc committee of senior subordinated noteholders; and * any official committee appointed by the U.S. Trustee in the Debtors' Chapter 11 cases; (c) If any of the notice parties objects to any settlement agreement, and the affected Debtor still desires to enter into agreement with the settling party, the execution of the settlement will not proceed except upon: * resolution of the objection by the parties; and * further Court order after a hearing; and (d) any settlement unauthorized pursuant to the proposed Omnibus Procedures or to any Court order will be authorized only upon separate Court order on a motion of the appropriate Debtor served on the necessary parties-in- interest. Rochester Hills, Mich.-based DURA Automotive Systems, Inc. (Nasdaq: DRRA) -- http://www.DURAauto.com/-- is an independent designer and manufacturer of driver control systems, seating control systems, glass systems, engineered assemblies, structural door modules and exterior trim systems for the global automotive industry. The company is also a supplier of similar products to the recreation vehicle and specialty vehicle industries. DURA sells its automotive products to North American, Japanese and European original equipment manufacturers and other automotive suppliers. The Debtors filed for chapter 11 petition on October 30, 2006 (Bankr. District of Delaware Case No. 06-11202). Richard M. Cieri, Esq., Marc Kieselstein, Esq., Roger James Higgins, Esq., and Ryan Blaine Bennett, Esq., of Kirkland & Ellis LLP are lead counsel for the Debtors' bankruptcy proceedings. Mark D. Collins, Esq., Daniel J. DeFranseschi, Esq., and Jason M. Madron, Esq., of Richards Layton & Finger, P.A. Attorneys are the Debtors' co-counsel. Baker & McKenzie acts as the Debtors' special counsel. Togut, Segal & Segal LLP is the Debtors' conflicts counsel. Miller Buckfire & Co., LLC is the Debtors' investment banker. Glass & Associates Inc., gives financial advice to the Debtor. Kurtzman Carson Consultants LLC handles the notice, claims and balloting for the Debtors and Brunswick Group LLC acts as their Corporate Communications Consultants for the Debtors. As of July 2, 2006, the Debtor had $1,993,178,000 in total assets and $1,730,758,000 in total liabilities. (Dura Automotive Bankruptcy News, Issue No. 3; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). EL PASO: Moody's Holds Rating on Junior Series 2000D Bonds at Ba3 ----------------------------------------------------------------- Moody's Investors Service affirmed the ratings on El Paso, Texas Housing Finance Corporation's Multifamily Housing Revenue Bonds Senior Series 2000A at A3, Subordinate Series 2000 C at Baa3, and Junior Subordinate Series 2000D at Ba3. The outlook remains stable. Wallington Plaza Apartments and Timberwolf Apartments are two multi-family rental properties located in El Paso, Texas. Both properties enjoy average occupancy of 95%. Legal security: The bonds are secured by revenues from Wallington Plaza and Timberwolf Apartments. Interest rate derivatives: None. Credit strengths: -- Consistently strong occupancy at both properties. For 2006 year-to-date, the properties both enjoyed average occupancy of 95%, while offering few concessions; -- Financial performance continues to be solid, with debt service coverage of 1.70x for the seniors, 1.46x for the subordinates, and 1.23x for the junior subordinates based on FY 2005 audited financial statements. -- Moody's expects that the projects will continue to perform above underwritten levels of 1.45x, 1.25x, and 1.05x for the senior, subordinate, and junior subordinate bonds. Based on rolling twelve month unaudited financial statements as of Oct. 21, 2006, debt service coverage is 1.68x, 1.46x, and 1.23x for each respective series of bonds. -- According to the Trustee, debt service reserve funds for all three series of bonds are fully funded and have not been tapped. Credit challenges: -- Properties are located in El Paso, TX, a very affordable housing market as measured by the Moody's Economy.com Affordability Index; and, -- Moody's is concerned about the volatility in the affordable housing sector, in general. Outlook: The outlook for the bonds remains stable. The stable outlook reflects Moody's expectation that the project will continue to perform close to current levels and will continue to experience occupancy in the mid to high 90 percent range. What could change the rating- up -- Significant and consistent improvement in debt service coverage. What could change the rating- down -- Any substantial deterioration in debt service coverage or a material decline in occupancy rates. ENTERGY NEW ORLEANS: Files 3rd Amended Plan & Disclosure Statement ------------------------------------------------------------------ Entergy New Orleans Inc. delivered to the Honorable Jerry A. Brown of the U.S. Bankruptcy Court for the Eastern District of Louisiana its Third Amended Chapter 11 Plan of Reorganization and an accompanying Third Amended Disclosure Statement on Dec. 20, 2006. Pursuant to the Third Amended Plan, claims and interests continue to be grouped into 12 classes as provided for under ENOI's Second Amended Chapter 11 Plan of Reorganization filed on Dec. 6, 2006. ENOI discloses that the treatment of unclassified claims, and classified claims and interests remain unchanged as provided for in the Second Amended Plan. However, the estimated amount of unpaid Allowed Claims has been modified. ENOI estimates the amount of unpaid Allowed Claims as of June 30, 2007, at: Class Claims Estimated Amount ----- ------ ---------------- n/a Administrative Claims $7,300,000 (excluding Administrative Trade Claims and Professionals' Claims) n/a Professional Fee Claims 700,000 n/a DIP Financing Claims 63,500,000 n/a Priority Tax Claims 2,000,000 3 Bond Claims 13,800,000 5 General Unsecured Claims 29,500,000 The Third Amended Plan calls for payment of fees of not more than $250,000 to the Ad Hoc Committee of Bondholders. ENOI also expects to pay an estimated $4,200,000 in interest on the Allowed General Unsecured Claims, as of June 30, 2007. ENOI believes the changes it made with respect to the terms of the Plan demonstrate that it has diligently moved toward confirming a Chapter 11 plan. A full-text copy of ENOI's Third Amended Chapter 11 Plan is available for free at http://researcharchives.com/t/s?17b1 A full-text copy of ENOI's Third Amended Disclosure Statement is available for free at http://researcharchives.com/t/s?17b21 Issuance of New Securities On or after the effective date, the Reorganized Debtor will issue 10,347,798 shares of capital stock: -- 10,000,000 shares of Common Stock, par value $4 per share; -- 77,798 shares of 4-3/4% Preferred Stock, par value $100 per share; and -- 270,000 shares of Preferred Stock, par value $100 per share. The new securities will have an aggregate value of $77,409,800, R. Patrick Vance, Esq., at Jones, Walker, Waechter, Poitevent, Carrere & Denegre, LLP, in New Orleans, Louisiana, relates. Conditions to Effectiveness Amended Besides the conditions specified in the Second Amended Plan, effectivity of the Third Amended Plan is conditioned on: (1) the Bankruptcy Court entering a Confirmation Order in a form reasonably satisfactory to ENOI, Financial Guaranty Insurance Company, and The Bank of New York, and no injunction has been entered for the Confirmation Order; and (2) the Stipulation on Adequate Protection and the Fee Order remaining in full force and effect, and ENOI fully complying with all of its obligations under the Stipulation. The Court will convene a hearing to consider approval of the Third Amended Disclosure Statement on January 25, 2007, at 10:00 a.m. About Entergy New Orleans Headquartered in Baton Rouge, Louisiana, Entergy New Orleans Inc. -- http://www.entergy-neworleans.com/-- is a wholly owned subsidiary of Entergy Corporation. Entergy New Orleans provides electric and natural gas service to approximately 190,000 electric and 147,000 gas customers within the city of New Orleans. Entergy New Orleans is the smallest of Entergy Corporation's five utility companies and represents about 7% of the consolidated revenues and 3% of its consolidated earnings in 2004. Neither Entergy Corporation nor any of Entergy's other utility and non-utility subsidiaries were included in Entergy New Orleans' bankruptcy filing. Entergy New Orleans filed for chapter 11 protection on Sept. 23, 2005 (Bankr. E.D. La. Case No. 05-17697). Elizabeth J. Futrell, Esq., and R. Partick Vance, Esq., at Jones, Walker, Waechter, Poitevent, Carrere & Denegre, L.L.P., represent the Debtor in its restructuring efforts. Carey L. Menasco, Esq., Philip Kirkpatrick Jones, Jr., Esq., and Joseph P. Hebert, Esq., at Liskow & Lewis, APLC, represent the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed total assets of $703,197,000 and total debts of $610,421,000. (Entergy New Orleans Bankruptcy News, Issue No. 32; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) ENTERGY NEW ORLEANS: Panel Files Rival Plan & Disclosure Statement ------------------------------------------------------------------ The Official Committee of Unsecured Creditors delivered a plan of reorganization for Entergy New Orleans Inc. and an accompanying disclosure statement to the U.S. Bankruptcy Court for the Eastern District of Louisiana on Dec. 20, 2006. The Committee Plan will allow ENOI to continue operating its business under the rate regulation imposed by the City Council of New Orleans (retail) and the Federal Energy Regulatory Commission (sales for resale), in a manner consistent with sound business and environmental policies, and to provide safe and reliable service to its customers, Philip K. Jones, Jr., Esq., at Liskow & Lewis, in New Orleans, Louisiana, relates. Under the competing Plan, the Creditors Committee will attempt to negotiate and consummate a five-year exit financing of up to $150,000,000 for ENOI. The exit loan will offer a 10.5% interest rate per annum with annual increases of 1% per year. The Committee may commit ENOI to pay all reasonable and customary fees to the Exit lender and its professional advisors. There will be restrictions on dividends to Entergy Corp., but no prepayment penalty under the contemplated Exit Facility. The Committee may also grant security interests affecting the Bond Collateral subordinate to the Bonds as well as liens and security interests on all other assets of ENOI other than the Bond Collateral. The Committee also contemplates on drawing from $200,000,000 in CDBG Funds awarded to ENOI to finance post-Effective Date payments. ENOI expects to receive the CDBG funds by the end of March 2007, and well before June 30, 2007. The Committee will also look into funds obtained from phased-in increases of electric and gas base rates, as provided for under ENOI's settlement with the City Council. The settlement provides for no change in electric base rates through December 2007, with a $3,900,000 increase implemented in January 2008. Gas base rates will increase by $4,750,000 in November 2006, an additional $1,500,000 in March 2007, and an additional $4,750,000 in November 2007. Under the settlement, ENOI will also file a base rate case by July 31, 2008. The Committee's Plan will also be funded from Hurricane Katrina insurance proceeds. To date, ENOI has received $7,206,767 in Katrina Insurance Proceeds. ENOI is expected to receive additional Katrina Insurance Proceeds in excess of $42,800,000 by June 30, 2007. All distributions under the Creditors Committee's Plan will be made by ENOI or another entity designated by the Committee. Since no class is impaired under the Creditors Committee's Plan, no voting on the Plan is required. The Creditors Committee believes that confirmation of its Plan will provide each Holder of an Allowed Claim with a recovery that is not less than what the Holder would get if ENOI's estate were liquidated under Chapter 7. The Committee also believes that the value of any distributions to each Class of Allowed Claims in a Chapter 7 case would be less than the value of distributions under the Committee Plan, because the Chapter 7 distributions would not occur for a substantial period of time. Disclosure Statement Hearing on Jan. 25 The Court will convene a hearing on Jan. 25, 2007, to consider approval of the Committee's Disclosure Statement pursuant to Section 1125 of the Bankruptcy Code. Under Section 1125, a disclosure statement must contain adequate information of a kind and in sufficient detail to enable hypothetical reasonable investors typical of the holders of Claims against and Interests in the debtor to make an informed judgment in voting on the plan. A full-text copy of the Committee's Plan of Reorganization for ENOI is available at no charge at: http://researcharchives.com/t/s?17b3 A full-text copy of the Disclosure Statement explaining the Committee's Plan is available at no charge at: http://researcharchives.com/t/s?17b4 About Entergy New Orleans Headquartered in Baton Rouge, Louisiana, Entergy New Orleans Inc. -- http://www.entergy-neworleans.com/-- is a wholly owned subsidiary of Entergy Corporation. Entergy New Orleans provides electric and natural gas service to approximately 190,000 electric and 147,000 gas customers within the city of New Orleans. Entergy New Orleans is the smallest of Entergy Corporation's five utility companies and represents about 7% of the consolidated revenues and 3% of its consolidated earnings in 2004. Neither Entergy Corporation nor any of Entergy's other utility and non-utility subsidiaries were included in Entergy New Orleans' bankruptcy filing. Entergy New Orleans filed for chapter 11 protection on Sept. 23, 2005 (Bankr. E.D. La. Case No. 05-17697). Elizabeth J. Futrell, Esq., and R. Partick Vance, Esq., at Jones, Walker, Waechter, Poitevent, Carrere & Denegre, L.L.P., represent the Debtor in its restructuring efforts. Carey L. Menasco, Esq., Philip Kirkpatrick Jones, Jr., Esq., and Joseph P. Hebert, Esq., at Liskow & Lewis, APLC, represent the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed total assets of $703,197,000 and total debts of $610,421,000. (Entergy New Orleans Bankruptcy News, Issue No. 32; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) FEDERAL-MOGUL: Appoints Robert Katz As VP and General Counsel ------------------------------------------------------------- Federal-Mogul Corporation's chairman, president and chief executive officer, Jose Maria Alapont, disclosed the appointment of Robert L. (Bobby) Katz as vice president and general counsel, and an officer of the company, effective Jan. 8, 2007. Mr. Katz will assume overall global responsibility for all legal affairs at Federal-Mogul Corporation. "Bobby's extensive background in corporate law and strategy, mergers and acquisitions, litigation and compliance, as well as his international experience in the automotive industry, will fully support our drive for global profitable growth," Mr. Alapont said. "We look forward to working with Bobby, and welcome him as a new member of the Strategy Board." Previously, Mr. Katz was general counsel and regional compliance officer for Delphi Corporation's Europe, Middle East and Africa (EMEA) operations, headquartered in Paris, France. In his seven-year tenure with Delphi, Mr. Katz established and led the EMEA legal department, following Delphi's spin-off from GM in 1999. From 1996 to 1998, Mr. Katz served as assistant general counsel for General Motors (Europe) AG, at its European headquarters in Zurich, Switzerland. As a member of the GM legal staff serving all European operations, Mr. Katz focused on transactions and investments in Eastern Europe. Prior to joining GM, Mr. Katz was an associate at Milbank, Tweed, Hadley & McCloy from 1986 to 1995 where he worked in the M&A and General Corporate Group, both in New York, New York and London, England. During his tenure, he advised public and private companies on a wide variety of corporate transactions, including cross-order acquisitions and divestitures, leveraged buyouts, corporate restructurings and international securities offerings. Mr. Katz earned his Bachelor of Laws and his Bachelor of Civil Law from McGill University in Montreal, Canada, where he graduated magna cum laude. He also attended New York University School of Law, New York, New York. Headquartered in Southfield, Michigan, Federal-Mogul Corporation -- http://www.federal-mogul.com/-- is an automotive parts company with worldwide revenue of some $6 billion. The Company filed for chapter 11 protection on Oct. 1, 2001 (Bankr. Del. Case No. 01-10582). Lawrence J. Nyhan Esq., James F. Conlan Esq., and Kevin T. Lantry Esq., at Sidley Austin Brown & Wood, and Laura Davis Jones Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub, P.C., represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $10.15 billion in assets and $8.86 billion in liabilities. Federal-Mogul Corp.'s U.K. affiliate, Turner & Newall, is based at Dudley Hill, Bradford. Peter D. Wolfson, Esq., at Sonnenschein Nath & Rosenthal; and Charlene D. Davis, Esq., Ashley B. Stitzer, Esq., and Eric M. Sutty, Esq., at The Bayard Firm represent the Official Committee of Unsecured Creditors. (Federal-Mogul Bankruptcy News, Issue No. 122; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). FEDERAL-MOGUL: Has Until April 1 to Decide on Lease --------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware granted the request of Federal-Mogul Corporation and its debtor affiliates to further extend the time within which they may elect to assume, assume and assign, or reject unexpired non-residential real property leases, through and including April 1, 2007. Scotta E. McFarland, Esq., at Pachulski Stang Ziehl Young Jones & Weintraub LLP, in Wilmington, Delaware, said that an extension will give the Debtors more time to evaluate the economic desirability and compatibility of the remaining Real Property Leases with Federal-Mogul Corporation's long-term strategic business plan. The process of evaluating Real Property Leases has taken place as the Debtors seek to: (i) consolidate their facilities to eliminate redundancies and inefficiencies; and (ii) shift certain manufacturing efforts to portions of the country and the world more suitable to the Debtors' businesses, consistent with the Federal-Mogul's overall business plan. The extension will also preserve the maximum flexibility in restructuring the Debtors' business, Ms. McFarland explains. Given the inherent fluidity in the operation of the Debtors' large, complex business enterprise, circumstances may arise during the pendency of the Chapter 11 cases that will cause the Debtors to rethink the need to continue leasing a particular facility or their decision to reject a given Real Property Lease, Ms. McFarland said. In the absence of an extension, the Debtors could be forced prematurely to assume Real Property Leases that would later be burdensome, giving rise to large potential administrative claims against the Debtors' estates and hampering Federal-Mogul's ability to reorganize successfully, Ms. McFarland pointed out. Alternatively, the Debtors could be forced prematurely to reject Real Property Leases that would have been beneficial to the Debtors' estates, to the collective detriment of all stakeholders, Ms. McFarland added. Pending their election to assume, assume and assign, or reject the Real Property Leases, the Debtors will perform all of their obligations arising from and after their filing for chapter 11 protection in a timely fashion, including payment of postpetition rent due, as required by Section 365(d)(3) of the Bankruptcy Code. Headquartered in Southfield, Michigan, Federal-Mogul Corporation -- http://www.federal-mogul.com/-- is an automotive parts company with worldwide revenue of some $6 billion. The Company filed for chapter 11 protection on Oct. 1, 2001 (Bankr. Del. Case No. 01-10582). Lawrence J. Nyhan Esq., James F. Conlan Esq., and Kevin T. Lantry Esq., at Sidley Austin Brown & Wood, and Laura Davis Jones Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub, P.C., represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $10.15 billion in assets and $8.86 billion in liabilities. Federal-Mogul Corp.'s U.K. affiliate, Turner & Newall, is based at Dudley Hill, Bradford. Peter D. Wolfson, Esq., at Sonnenschein Nath & Rosenthal; and Charlene D. Davis, Esq., Ashley B. Stitzer, Esq., and Eric M. Sutty, Esq., at The Bayard Firm represent the Official Committee of Unsecured Creditors. (Federal-Mogul Bankruptcy News, Issue No. 120; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). FREDERICK HALL: Case Summary & Six Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Frederick Lee Hall dba Hall Properties P.O. Box 164 Piqua, OH 45356 Bankruptcy Case No.: 06-33767 Chapter 11 Petition Date: December 15, 2006 Court: Southern District of Ohio (Dayton) Judge: Thomas F. Waldron Debtor's Counsel: Roger E. Luring, Esq. Miller & Luring, Co, LPA 314 West Main Street Troy, OH 45373-3242 Tel: (937) 339-2627 Total Assets: $1,780,150 Total Debts: $2,073,274 Debtor's Six Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Fifth Third Bank $51,126 P.O. Box 630337 Collateral: Cincinnati, OH 45263-0004 $35,000 Unsecured: 51,126 $13,800 $39,000 Collateral: $32,000 Unsecured: $39,000 $34,719 Collateral: $32,000 Unsecured: $34,719 $33,197 Collateral: $32,000 Unsecured: $33,197 $58,552 Collateral: $52,000 Unsecured: $15,552 $59,930 Collateral: $50,000 Unsecured: $9,830 $57,609 Collateral: $50,700 Unsecured: $6,909 $54,749 Collateral: $50,700 Unsecured: $4,749 $40,521 Collateral: $36,000 Unsecured: $4,521 Union Savings Bank $61,197 8534 East Kemper Road Collateral: Cincinnati, OH 45249-3701 $55,000 Unsecured: $6,197 $58,161 Collateral: $52,000 Unsecured: $6,161 $58,707 Collateral: $53,000 Unsecured: $5,707 $35,012 Collateral: $30,000 Unsecured: $5,012 Unity Bank $15,200 P.O. Box 1726 Springfield, OH 45501-1726 $31,684 Collateral: $45,000 Unsecured: $23,684 Unity National Bank $37,000 212 North Main Street Piqua, OH 45356-2314 Chase Bank $18,500 P.O. Box 15548 Wilmington, DE 19886-5548 U.S. Bank $5,800 P.O. Box 790408 St. Louis, MO 63179-0408 GLOBAL POWER: Equity Committee Taps Brown Rudnick as Counsel ------------------------------------------------------------ The Official Committee of Equity Security Holders appointed in Global Power Equipment Group Inc. and its debtor-affiliates' chapter 11 cases, asks the U.S. Bankruptcy Court for the District of Delaware to retain Brown Rudnick Berlack Israels LLP as its co-counsel. Brown Rudnick will: a. assist and advise the Equity Committee in its discussions with the Debtors and other parties-in-interest regarding the overall administration of these cases; b. represent the Equity Committee at hearings to be held before the Court and communicating with the Equity Committee regarding the matters heard and the issues raised as well as the decisions and considerations of the Court; c. assist and advise the Equity Committee in its examination and analysis of the conduct of the Debtors’ affairs; d. review and analyze pleadings, orders, schedules, and other documents filed and to be filed with the Court by interested parties in these cases; advise the Equity Committee as to the necessity, propriety, and impact of the foregoing upon these cases; and consent or object to pleadings or orders on behalf of the Equity Committee, as appropriate; e. assist the Equity Committee in preparing applications, motions, memoranda, proposed orders, and other pleadings as may be required in support of positions taken by the Equity Committee, including all trial preparation as may be necessary; f. confer with the professionals retained by the Debtors and other parties-in-interest, as well as with other professionals as may be selected and employed by the Equity Committee; g. coordinate the receipt and dissemination of information prepared by and received from the Debtors’ professionals, as well as any information as may be received from professionals engaged by the Equity Committee or other parties-in-interest in these cases; h. participate in such examinations of the Debtors and other witnesses as may be necessary in order to analyze and determine, among other things, the Debtors’ assets and financial condition, whether the Debtors have made any avoidable transfers of property, or whether causes of action exist on behalf of the Debtors’ estates; i. negotiate and formulate a plan of reorganization for the Debtors; and j. assist the Equity Committee generally in performing other services as may be desirable or required for the discharge of the Equity Committee’s duties pursuant to Section 1103 of the Bankruptcy Code. The lead attorneys who will represent the Equity Committee: Attorneys Hourly Rate --------- ----------- Howard L. Siegel, Esq. $740 Steven D. Pohl, Esq. $665 Danielle M. Bennett, Esq. $485 John Elstad, Esq. $420 Mr. Pohl, a Brown Rudnick member, discloses that the other firm's rofessionals bill: Position Hourly Rate -------- ----------- Counsel $200 - $870 Paraprofessionals $175 - $225 Mr. Pohl assures the Court that his firm is a "disinterested person" and does not hold or represent an interest adverse to the Debtors' estates. Headquartered in Tulsa, Oklahoma, Global Power Equipment Group Inc. aka GEEG Inc. -- http://www.globalpower.com/-- provides power generation equipment and maintenance services for its customers in the domestic and international energy, power and infrastructure and service industries. The Company designs, engineers and manufactures a range of heat recovery and auxiliary equipment primarily used to enhance the efficiency and facilitate the operation of gas turbine power plants as well as for other industrial and power-related applications. The Company has facilities in Plymouth, Minnesota; Tulsa, Oklahoma; Auburn, Massachusetts; Atlanta, Georgia; Monterrey, Mexico; Shanghai, China; Nanjing, China; and Heerleen, The Netherlands. The Company and 10 of its affiliates filed for chapter 11 protection on Sept. 28, 2006 (Bankr. D. Del. Case No 06-11045). Attorneys at White & Case LLP and The Bayard Firm, P.A., represent the Debtors. The Official Committee of Unsecured Creditors appointed in the Debtors' cases has selected Landis Rath & Cobb LLP as its counsel. As of Sept. 30, 2005, the Debtors reported total assets of $381,131,000 and total debts of $123,221,000. The Debtors' exclusive period to filed a chapter 11 plan expires on Jan. 26, 2007. HEALTH SCIENCES: Sept. 30 Balance Sheet Upside-Down by $4.7 Mil. ---------------------------------------------------------------- Health Sciences Group Inc. reported a $950,159 net loss on $4,943 of net sales for the quarter ended Sept. 30, 2006, compared with a $2.1 million loss on $19,382 of net sales for the same period in 2005. The decrease in net loss is mainly due to the $2 million decrease in selling, general and administrative expenses, and the $135,000 decrease in interest expenses. At Sept. 30, 2006, the company's balance sheet showed $3.7 million in total assets and $8.4 million in total liabilities, resulting in a $4.7 million total stockholders' deficit. The company's balance sheet at Sept. 30, 2006, also showed strained liquidity with $66,585 in total current assets available to pay $5.1 million in total current liabilities. Full-text copies of the company's consolidated financial statements for the quarter ended Sept. 30, 2006, are available for free at http://researcharchives.com/t/s?17a8 Going Concern Doubt As reported in the Troubled Company Reporter on May 24, 2006, Stonefield Josephson Inc., in Santa Monica, California, expressed substantial doubt about Health Sciences Group Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2005. The auditor pointed to the company's recurring operating losses, accumulated deficit and working capital deficit at Dec. 31, 2005. About Health Sciences Headquartered in Los Angeles, California, Health Sciences Group Inc. (OTC BB: HESG.OB) -- http://www.healthsciencesgroup.com/ -- is an integrated provider of innovative products, proprietary technologies used in nutritional supplements, and functional foods and beverages. The company's active subsidiaries include BioSelect Innovations, which develops proprietary technologies, and Swiss Research Inc., which markets and sells branded products addressing major wellness categories. ICOA INC: September 30 Balance Sheet upside-Down by $4.1 Million ---------------------------------------------------------------- ICOA Inc. reported a $798,526 net loss on $701,174 of total revenues for the quarter ended Sept. 30, 2006, compared with a $3.2 million net loss on $776.2 million of total revenues for the same period in 2005. The decrease in revenue of $75,038 for the three months ended Sept. 30, 2006, versus the three months ended Sept. 30, 2005, is mainly attributable to several locations converting to a managed amenity service model from a customer pay per use model. The significant difference in net loss for the quarter is mainly due to the $371,215 reduction in selling, general and administrative costs, the $2 million decrease in interest expenses and the $421,496 mark to market income on derivative instrument liability, partially offset by a $208,425 amortization of note discount. At Sept. 30, 2006, the company's balance sheet showed $4.8 million in total assets and $8.9 million in total liabilities, resulting in a $4.1 million total stockholders' deficit. The company's balance sheet at Sept. 30, 2006, also showed strained liquidity with $560,795 in total current assets available to pay $7.3 million in total current liabilities. Full-text copies of the company's consolidated financial statements for the quarter ended Sept. 30, 2006, are available for free at http://researcharchives.com/t/s?17a4 Going Concern Doubt Sherb & Co., LLP, in New York City, expressed substantial doubt about ICOA Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2005. The auditing firm pointed to the company's operating losses and working capital deficit. * * * Headquartered in Warwick, Rhode Island, ICOA Inc. (OTCBB: ICOA) -- http://www.icoacorp.com/-- provides neutral-host wireless and wired broadband internet networks in high-traffic public locations. ICOA provides design, installation, operations, maintenance and management of neutral, common-use 802.11x standard WLAN Wi-Fi hot spot and hot zone infrastructure throughout airport facilities, quick-service restaurants, universities, travel plazas, marinas, hospitality and municipal/hot zone locations. As of Jan. 1, 2006, ICOA owns or operates over 1,500 broadband access installations in high-traffic locations across 45 states. IMAGEWARE SYSTEMS: Posts $1.8 Mil. Net Loss in 2006 Third Quarter ----------------------------------------------------------------- ImageWare Systems Inc. reported a net loss of $1.8 million for the third quarter ended Sept. 30, 2006, compared to a net loss of $1.4 million in the third quarter of 2005. Total net revenues for the third quarter were $2.3 million, consisting solely of product and maintenance revenue. For the same quarter in 2005, revenue was $2.5 million, which included $2 million from product and maintenance revenue, and $500,000 from a one-time patent licensing fee. Identification revenue in the third quarter of 2006 was $1.4 million, up 27 percent compared to the prior year’s quarter. Law enforcement revenue was $746,000, up 4 percent compared to the prior year’s quarter. "We generated increased revenue in our core market segments of identification and law enforcement in the third quarter of 2006," stated Jim Miller, ImageWare’s chairman and chief executive officer. "In fact, identification sales, which comprise about two-thirds of our revenue, grew 27 percent year-over-year." Operating expenses totaled $3.2 million in the third quarter compared to $3.1 million in 2005. Included in the 2006 third quarter operating expenses were $140,000 in charges for incentive options to employees with no comparable charge in 2005 as the company adopted SFAS 123R on Jan. 1, 2006. The company strategically increased research and development spending to develop Unix based Solaris and RedHat Linux platforms for its IWS Biometric Engine(TM) technology and to ensure the company’s credentialing products kept current with the changing HSPD-12 requirements. For the first nine months of 2006, total net revenues were $8 million, compared to $7.3 million for the first nine months of 2005. The net loss for the first nine months of 2006 was $4.4 million, compared to a net loss of $4.2 million for the prior year’s first nine months. As of Sept. 30, 2006, ImageWare Systems had cash of $276,000. On Nov. 17th, the company closed a private placement of convertible preferred stock that generated net proceeds of approximately $2.1 million. At Sept. 30, 2006, the company's balance sheet showed $6.7 million in total assets, $6.5 million in total liabilities, and $109,000 in total stockholders' equity. The company's balance sheet at Sept. 30, 2006, also showed strained liquidity with $1.9 million in total current assets available to pay $6.5 million in total current liabilities. Full-text copies of the company's consolidated financial statements for the quarter ended Sept. 30, 2006, are available for free at http://researcharchives.com/t/s?17a9 Going Concern Doubt Stonefield Josephson Inc., in San Diego, California, expressed substantial doubt about ImageWare Systems' ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2005. The auditor pointed to the company's substantial net losses and substantial monetary liabilities in excess of monetary assets, and accumulated deficit of $64,321,551. * * * Headquartered in San Diego, California, ImageWare Systems Inc. (AMEX: IW) -- http://www.iwsinc.com/-- is a leading developer and provider of identity management solutions, providing biometric, secure credential, law enforcement and digital imaging technologies. Scalable for worldwide deployment, the company's biometric product line includes a multi-biometric engine that is hardware and algorithm independent, enabling the enrollment and management of unlimited population sizes. ImageWare's identification products are used to manage and issue secure credentials including national IDs, passports, driver licenses, smart cards and access control credentials. ImageWare's digital booking products provide law enforcement with integrated mug shot, fingerprint livescan and investigative capabilities. The company also provides comprehensive digital workflow solutions for the professional photography industry. INSURANCE AUTO: Planned Buyout Prompts S&P’s Positive CreditWatch ----------------------------------------------------------------- Standard & Poor's Ratings Services placed its 'BB' corporate credit and debt ratings on Carmel, Indaina-based wholesale vehicle auctioneer ADESA Inc. on CreditWatch with negative implications. At the same time, S&P placed the 'B' corporate credit and debt ratings on Westchester, Illinois-based Insurance Auto Auctions Inc. on CreditWatch with positive implications. The ratings actions follow the announcement that ADESA and IAAI have entered into a definitive merger agreement to be acquired by a group of private equity funds consisting of Kelso & Company, GS Capital Partners, ValueAct Capital, and Parthenon Capital in a transaction valued at $3.7 billion. The CreditWatch listings incorporate the assumption that the ultimate combined entity will be highly leveraged, as is typical of private equity purchases. ADESA is assigned a CreditWatch negative listing because the leverage of the combined entity would exceed that of ADESA's. Likewise, S&P has assigned a CreditWatch positive listing to IAAI because it is unlikely the combined entity would carry more debt than the very aggressively leveraged IAAI. In total, the transaction contemplates the assumption or refinancing of about $700 million of the two companies' debt. S&P will assess the effect of the buyout announcement on the ratings on ADESA and IAAI as details emerge in the weeks ahead. S&P expects to resolve its CreditWatch listings no later than when the transaction closes, which is expected to occur in the first half of 2007. If all rated debt is refinanced as part of the transaction, the ratings will be withdrawn. JOHN PARKER: Case Summary & 19 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: John H. Parker Susan C. Parker 6446 North Oak Shadows Circle Memphis, TN 38119 Bankruptcy Case No.: 06-30309 Chapter 11 Petition Date: December 11, 2006 Court: Western District of Tennessee (Memphis) Judge: Paulette Delk Debtors' Counsel: John E. Dunlap, Esq. The Waggoner Law Firm 1433 Poplar Avenue Memphis, TN 38104 Tel: (901) 276-3334 Fax: (901) 276-4715 Total Assets: $1,337,939 Total Debts: $754,594 Debtors' 19 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ American Express Credit Card $33,778 P.O. Box 360002 Fort Lauderdale, FL 33336-0002 Chase/Bank One Visa $25,000 800 Brooksedge Boulevard Westerville, OH 43081 Suntrust $16,000 c/o NCO Financial P.O. Box 41417 Department 99 Philadelphia, PA 19101 First National Bank of Omaha Credit Card $12,000 Discover Credit Card $10,000 Chase Credit Card $9,300 Target $8,000 Patricia Parker Insider $5,575 Macy's Charge Account $4,000 Visa $1,200 Mrs. John Hartwell $5,000 Optima Recovery Services, LLC $4,008 GE Money Bank $3,400 Sears Premier Card $3,200 Park West $3,118 LL Bean Charge Account $3,000 RCI Elite $2,400 Fairfield Resorts $2,339 Virginia Greer Parker $2,000 MLG&W Electric Bill $1,500 JOHN SPIEGELBERG: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: John Gandarillas Spiegelberg dba Red Raider Outfitter dba Chrome 3209 26th Street Lubbock, TX 79410 Bankruptcy Case No.: 06-50327 Chapter 11 Petition Date: December 11, 2006 Court: Northern District of Texas (Lubbock) Judge: Robert L. Jones Debtor's Counsel: Roy Byrn Bass, Jr., Esq. State National Bank Building 4716 4th Street, Suite 100 Lubbock, TX 79416 Tel: (806) 785-1250 Fax: (806) 771-1260 Estimated Assets: $100,000 to $1 Million Estimated Debts: $1 Million to $10 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Texas Tech University Trademark violation $3,100,652 Office of the Chancellor and other claims Administration Building Lubbock, TX 79409 State Farm Lloyds Claim for Fees $100,000 c/o Julia Dobbins Shannon, Gracey, Ratliff and Miller, LLP 777 Main Street, Suite 3800 Fort Worth, TX 76102 Schubert, Osterrieder and Legal Fees $71,398 Nickelson PLLC 1109 Gross Street Houston, TX 77019 Nike Team Sports - Trade Debt $49,028 Nike USA, Inc. 20001 Ellipse Foothill Ranch, CA 92610 Chase Visa Business Expenses $25,675 P.O. Box 94014 Palatine, IL 60094 Midwest Graphics Trade Debt $22,842 Studio West Trade Debt $10,712 Diadora America, Inc. Trade Debt $10,341 L&W Apparel Co., Inc. Trade Debt $6,444 Alef Custom Packaging Co. Trade Debt $4,581 Charles River Apparel Trade Debt $4,565 Top Line Trade Debt $4,283 High Fives Sportswear, Inc. Trade Debt $3,511 Chase Mastercard Business Expenses $2,605 Howe $2,223 The Haddad Apparel Group, Ltd. Trade Debt $2,000 Rosasen $1,737 College Kids Trade Debt $1,711 Varsity Vests Trade Debt $1,650 Rebel Yell $1,567 KIMBALL HILL: Liquidity Improvements Cue S&P to Affirm Ratings -------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'BB-' corporate credit rating on Kimball Hill Inc., and its 'B' rating on the company's senior subordinated debt. The outlook is stable. The affirmations affect $203 million of rated debt. "The ratings reflect Kimball Hill's long and conservative operating history and a recent equity offering that deleveraged the company's balance sheet and improved liquidity, as management anticipates continued weak industry-wide demand well into the coming year," said credit analyst Beth Campbell. "Credit concerns include a growing level of speculative inventory, which has been exacerbated by a recent spike in cancellation rates, and weak debt coverage measures." The ratings are supported by management's balance sheet and liquidity improvements through its recent third-party equity offering. The company's efforts to revise its credit facility covenants, right-size its operating platform, and reduce inventory and land holdings should also help preserve liquidity during this cyclical downturn. Rising speculative inventory levels, however, could prompt a negative rating action, as could weaker-then-expected operating performance. The current soft homebuilding environment precludes positive rating momentum. LA PETITE: ABC Merger Prompts S&P to Affirm B- Credit Rating ------------------------------------------------------------ Standard & Poor's Ratings Service affirmed its ratings on Chicago, Illinois-based La Petite Academy Inc., including the 'B-' corporate credit rating. The outlook is stable. The affirmation follows the announcement that ABC Learning Corp., an Australian company, will be purchasing La Petite for $330 million. S&P expects that all existing debt will be repaid at the close of the transaction in early 2007. At that time, the ratings will be withdrawn. "The rating on La Petite reflects the weak cash flow, heavy debt burden, and vulnerability to weakness in the economy, specifically employment," noted Standard & Poor's credit analyst Rivka Gertzulin. "The company had serious operating and financial problems in 2000-2003 due to the downturn in the U.S. economy and weakness in financial operations and controls. Since then, under new management, operating improvements led to an increase in operating margins and cash flow." La Petite is the second-largest chain provider of early childhood education and child care in the U.S., operating 649 schools in 36 states. This is down from 720 schools in 2002. Management has improved operating results and cash flow by selectively closing academies, reducing personnel, and cutting overhead costs. Management will continue to close underperforming schools, but will also add new schools with better operating performance. Much of the recent increase in cash flow is from working capital improvements and is likely to be one-time in nature. It is uncertain if cash flow will remain strong in the long term. Among the challenges La Petite faces is competition from local nursery schools and other childcare centers. While the company has recently experienced improvements in demand for its services and in its ability to raise tuition rates, this follows many years of decreasing full-time equivalent attendance. Another challenge is that some other providers have lower cost structures than La Petite, and may be able to compete more successfully on price, especially as a potential downturn in the economy could cause families to be more cost conscious. La Petite will have total debt of approximately $200 million (including bank overdrafts). The company's financial profile is very weak; unadjusted EBITDA margins are expected to average in the mid-to-upper single digits; total lease-adjusted debt to EBITDA is very high, at well more than 6x; and EBITDA interest coverage is less than 2x. LB-UBS: Fitch Junks Rating on $6.6 Million Class N Certificates --------------------------------------------------------------- Fitch upgrades and downgrades LB-UBS Commercial Mortgage Trust's commercial mortgage pass-through certificates, series 2001-C2 as: Fitch's upgrades: -- $13.2 million class E to 'AAA' from 'AA+'; -- $19.8 million class F to 'AA+' from 'A+'; -- $16.5 million class G to 'AA-' from 'A-'; and, -- $23.1 million class H to 'BBB+' from 'BBB-'. Fitch's downgrades: -- $6.6 million class N to 'C/DR5' from 'CC/DR4'. Fitch assigns a Distressed Recovery Rating as: -- $13.2 million class M 'B-/DR1'. Fitch affirms these classes: -- $138.2 million class A-1 at 'AAA'; -- $789.3 million class A-2 at 'AAA'; -- Interest-Only class X at 'AAA'; -- $49.5 million class B at 'AAA'; -- $62.7 million class C at 'AAA'; -- $16.5 million Class D at 'AAA'; -- $14.8 million class J at 'BB+'. -- $11.5 million Class K at 'BB-'; -- $9.9 million class L at 'B+'; and, -- $3.3 million class P at 'C/DR6'. The $12.7 million class Q is not rated by Fitch. The upgrades are a result of paydown and defeasance since the last Fitch formal review. As of the December 2006 distribution date, the pool's aggregate certificate balance has decreased by 9% to $1.2 billion from $1.32 billion at issuance. A total of 35 loans have defeased since issuance. Nine loans have defeased since the last Fitch formal review. The downgrade is the result of Fitch-expected losses on all of the eight loans in special servicing. The expected losses will deplete the balances of the non-rated class Q and class P and will significantly impair class N. The Distressed Recovery Rating is due to stress placed on class M if class N is significantly impaired. The largest specially serviced asset is secured by two REO hotels, located in Atlanta, Gorgia. The hotels were recently renovated and re-flagged. The hotels are being marketed by the special servicer. The second-largest specially serviced asset is secured by a 543,572 square foot office building in Tulsa, Oklahoma. The loan was transferred to special servicing in November 2005 and is 90 days past due. The third-largest asset in special servicing is a 172,739 sf office building in Houston, Texas that was transferred in June 2006 due to imminent default. The loan is current. At issuance, Fitch considered six loans to have investment grade credit assessments. On June 2005, the 10950 Tantau Avenue loan fully defeased. Three of the remaining five credit assessments are still considered investment grade. The debt service coverage ratio for each loan is calculated using servicer provided net operating income less reserves divided by debt service payments based on the current balance using a Fitch stressed refinance constant. Westfield Shoppingtown Meriden is located in Meriden, Connecticut and is anchored by Filene's, JC Penney, Sears, Best Buy, and Dick's Sporting Goods. The collateral consists of 371,688 sf of in-line space in a 913,625 sf regional mall. As of year end 2005, the Fitch stressed DSCR of the A-Note was 1.59x compared to 1.22x at issuance. As of September 2006, in-line occupancy was 80.5% compared to 95.7% at issuance. Total occupancy has declined to 86.1% from 98.2% at issuance. The A-note portion of the whole loan is held in the trust, while the B-note portion is held outside the trust. Fitch will monitor the leasing activity at this property NewPark Mall is secured by 389,682 sf of a 1.2 million sf regional mall located in Newark, California. As of September 2006, in-line occupancy was stable at 88.7% compared to 88.9% at issuance. As of year end 2005, the Fitch stressed DSCR was 1.68x compared to 1.34x at issuance. 400 Plaza Drive, also known as Hartz Mountain Industries, is secured by a four-story multi-tenanted class 'B' office building, located in Secaucus, New Jersey. As of YE 2005, the Fitch stressed DSCR was 1.57x compared to 1.33x at issuance. The occupancy was 96.2% as of October 2006 compared to 100% at issuance. The Courtyard by Marriott is collateralized by a 449-room full-service hotel located in Philadelphia, Pennsylvania. While the property is master leased to Marriott, Fitch reviews the loan based on actual property operations with credit for amortization. Fitch maintains a below investment grade credit assessment. 529 Bryant Street is secured by a 45,161 sf office building located in downtown Palo Alto, California. As of December 2005, the property was 100% occupied by a single tenant, Switch & Data, whose lease expires May 2025. Fitch maintains a below investment grade credit assessment. Fitch's Distressed Recovery ratings, introduced in April 2006 across all sectors of structured finance, are designed to estimate recoveries on a forward-looking basis while taking into account the time value of money. LB UBS: Moody's Holds Low-B Ratings on $19.2 Million Certificates ----------------------------------------------------------------- Moody's Investors Service upgraded the ratings of three classes and affirmed the ratings of 15 classes of LB-UBS Commercial Mortgage Trust 2003-C8, Commercial Mortgage Pass-Through Certificates, Series 2003 -- C8: -- Class A-1, $150,070,441, Fixed, affirmed at Aaa -- Class A-2, $280,000,000, Fixed, affirmed at Aaa -- Class A-3, $160,000,000, Fixed, affirmed at Aaa -- Class A-4, $546,259,000, Fixed, affirmed at Aaa -- Class X-CL, Notional, affirmed at Aaa -- Class X-CP, Notional, affirmed at Aaa -- Class B, $14,872,000, Fixed, upgraded to Aaa from Aa1 -- Class C, $14,872,000, Fixed, upgraded to Aaa from Aa2 -- Class D, $17,496,000, Fixed, upgraded to Aa2 from Aa3 -- Class E, $22,745,000, Fixed, affirmed at A1 -- Class F, $13,998,000, Fixed, affirmed at A2 -- Class G, $20,995,000, Fixed, affirmed at A3 -- Class H, $17,497,000, Fixed, affirmed at Baa1 -- Class J, $13,997,000, Fixed, affirmed at Baa2 -- Class K, $20,996,000, Fixed, affirmed at Baa3 -- Class L, $6,998,000, Fixed, affirmed at Ba1 -- Class M, $6,999,000, Fixed, affirmed at Ba2 -- Class N, $5,249,000, Fixed, affirmed at Ba3 As of the Dec. 15, 2006 distribution date, the transaction's aggregate certificate balance has decreased by approximately 4.1% to $1.34 billion from $1.40 billion at securitization. The Certificates are collateralized by 97 mortgage loans ranging in size from less than 1.0% to 12.6% of the pool with the top 10 loans representing 53.9% of the pool. The pool consists of six shadow rated loans, representing 36.5% of the pool, a conduit component, representing 54.9% of the pool, and U.S. Government securities representing 8.6% of the pool. Five loans, representing 8.6% of the pool, have defeased and are collateralized by U.S. Government securities. There have been no loans liquidated from the pool and there are no loans in special servicing. Seventeen loans, representing 8.6% of the pool, are on the master servicer's watchlist. Moody's was provided with full-year 2005 and partial-year 2006 operating results for 96.0% and 78.8%, respectively, of the performing loans. Moody's loan to value ratio for the conduit component is 87.6%, compared to 96.2% at securitization. Moody's is upgrading Classes B, C, and D due to defeasance, stable pool performance and increased credit support. The largest shadow rated loan is The Grove Loan. The loan is secured by the borrower's interest in a 583,000 square foot open-air, retail/entertainment center located approximately six miles east of downtown Los Angeles, California. Built in 2002, the center is anchored by Nordstrom, and Pacific Theatres. Each anchor owns its respective improvements. Other major tenants include The Gap, Barnes & Noble, Banana Republic, Anthropologie, Crate & Barrel, Arden B and Coach. As of June 2006 the center was 100.0% occupied, compared to 94.1% at securitization. Despite higher operating expenses, the property's financial performance has improved since securitization due to increased occupancy and loan amortization. The sponsor is Caruso Affiliated Holdings. Moody's current shadow rating is Aa2, compared to Aa3 at securitization. The second largest shadow rated loan is the 114 West 47th Street Loan, which is secured by a 596,815 square foot, Class A office building located in the Times Square/Theatre District submarket of New York City. As of November 2006 the property was 94.4% leased, compared to 96.3% at securitization. The anchor tenant is US Trust. The Sponsor is the Durst Organization. Moody's current shadow rating is Aa2, compared to Aa3 at securitization. The third largest shadow rated loan is The Westfield Shoppingtown South County Loan. The loan is secured by the borrower's 451,651 square foot interest in a 1,020,388 square foot regional mall located approximately 10 miles south of downtown St. Louis, Missouri. Built in 1963 and renovated in 2002, the center is anchored by Famous Barr, Sears, J.C. Penney and Dillard's. Other major tenants are The Gap/Gap Kids, Borders, The Finish Line, New York & Company and Hollister & Co. As of September 2006 the center was 95.7% occupied, compared to 96.4% at securitization. Despite the decrease in occupancy, the property's financial performance has improved since securitization due to increased rents and loan amortization. The sponsor is Westfield America Inc. Moody's current shadow rating is Baa2, compared to Baa3 at securitization. The fourth largest shadow rated loan is The GGP JP Realty Portfolio. The loan is secured by three cross-collateralized and cross-defaulted regional malls totaling 1,686,523 square feet. Salem Mall is located in Salem, Oregon approximately 45 miles south of Portland. The center was built in 1980 and renovated in 1995. Grand Teton Mall is located in Idaho Falls, Idaho, near Grand Teton National Park. The center was built between 1984 and 1994 and renovated in 2003. Animas Valley Mall is situated in Farmington, New Mexico, in the northwest portion of the state. The center was built in 1982 and renovated in 2003. The malls are anchored as follows: Salem Center, Grand Teton Mall and Animas Valley Mall. The weighted average occupancy is 95.8%, compared to 95.5% at securitization. The loan matures in July 2008 and amortizes on a 300-month schedule. The Portfolio has been stable since securitization, however it has benefited from loan amortization. The sponsor is General Growth Properties, Inc. Moody's current shadow rating is Aa3, compared to A2 at securitization. The remaining two shadow rated loans comprise 3.7% of the pool. The Liberty Tree Mall Loan is secured by a 449,718 square foot retail center located in Danvers, Massachusetts, approximately Moody's current shadow rating is Aa1, the same as at securitization. The Sangertown Square Mall Loan is secured by a 879,429 square foot mall located in New Hartford, New York, approximately five miles southwest of Utica. This loan represents the subordinate portion of a senior/subordinate loan structure with the senior note included in LB-UBS 2000-C3. The subordinate portion will not receive payment of principal until the senior portion is paid in full. The property is performing below expectations due to a drop in occupancy to 83.3% from 96.3% at securitization in the in-line shops. Moody's current shadow rating is Baa3, compared to Baa2 at securitization. The top three conduit loans represent 11.5% of the pool. The largest conduit loan is the Dartmouth Mall Loan, which is secured by a 670,980 square foot regional mall located in Dartmouth, Massachusetts, approximately 35 miles east of Providence. The center was built in 1971 and renovated in 2000. As of October 2006 the property was 97.1% occupied, compared to 79.5% at securitization. The mall is anchored by Filene's, Sears and J.C. Penney. Other major tenants include The Gap, Old Navy, Finish Line and Hollister Co. The property has performed well since securitization and has benefited from loan amortization. The Sponsor is Pennsylvania Real Estate Investment Trust. Moody's current LTV is 91.9%, compared to 99.9% at securitization. The second largest conduit loan is the Oakwood Dulles Loan, which is secured 13, four-story, Class A garden-style apartment buildings containing 411 units that were built in 2001. The property is located in Herndon (Fairfax County), Virginia. As of December 2005 the property was 97.0% occupied, compared to 95.6% at securitization. The loan matures in September 2008 and is interest only during the first five years of the term converting to a 300-month amortization schedule thereafter. The loan sponsors are Howard Ruby and Edward Broida. Moody's LTV is 97.9%, compared to in excess of 100.0 % at securitization. The third largest conduit loan is the Plaza at Delray Loan, which is secured by a 331,068 square foot retail center built in 1979 and renovated in 1998. The property is located in Delray Beach, Florida. As of September 2006, the property was 96.0% occupied, compared to 97.8% at securitization. The center is anchored by Publix, Linens-n-Things, Marshalls and Staples. Regal Cinema is also a major tenant. The loan matures in August 2008 and is interest only throughout the term. The loan sponsor is Investcorp Properties Ltd. Moody's LTV is in excess of 100%, the same as at securitization. The pool's collateral is a mix of retail, office, multifamily and manufactured housing, U.S. Government securities, lodging and industrial and self storage. The collateral properties are located in 30 states. The top five state concentrations are California, New York, Massachusetts, Texas and Virginia. All of the loans are fixed rate. LB-UBS: Fitch Holds Junk Rating on $8.9 Mil. Class T Certificates ----------------------------------------------------------------- Fitch upgrades LB-UBS Commercial Mortgage, series 2002-C7, commercial mortgage pass-through certificates as: -- $14.8 million class E to 'AAA' from 'AA+'; -- $14.8 million class F to 'AA+' from 'AA'; and, -- $14.8 million class G to 'AA-' from 'A+'. In addition, Fitch affirms these classes: -- $13.2 million class A-1 at 'AAA'; -- $190 million class A-2 at 'AAA'; -- $100 million class A-3 at 'AAA'; -- $394.4 million class A-4 at 'AAA'; -- $218 million class A-1b at 'AAA'; -- $20.8 million class B at 'AAA'; -- $17.8 million class C at 'AAA'; -- $17.8 million class D at 'AAA'; -- Interest-Only classes X-CL and X-CP at 'AAA'; -- $19.3 million class H at 'A'; -- $11.9 million class J at 'A-'; -- $11.9 million class K at 'BBB'; -- $19.3 million class L at 'BBB-'; -- $7.4 million class M at 'BB'; -- $5.9 million class N at 'BB-'; -- $8.9 million class P at 'B+'; -- $4.5 million class Q at 'B'; -- $3 million class S at 'B-'; and, -- $8.9 million class T at 'CCC'. The $8.9 million class U is not rated by Fitch. The upgrades are due to the additional defeasance of 13.6% of the pool since the last formal Fitch review. 20.4% of the pool has defeased since issuance. As of the December 2006 distribution date, the transaction has paid down by 5.1% to $1.13 billion from $1.19 billion at issuance. There are currently two specially serviced loans. The largest specially serviced loan is secured by a multifamily property located in Memphis, Tennessee. The loan is current and was transferred to special servicing in July 2006 due a decline in occupancy. The other specially serviced loan is secured by a multifamily property located in San Antonio, Texas. The loan will be returned to the Master Servicer in January 2007. The transaction contains five credit-assessed loans, including the Westfield Shoppingtown Independence loan which has been fully defeased. Fitch reviewed servicer-provided financial statements and other performance information for the four remaining non-defeased credit assessed loans: The Capitol at Chelsea, 205 E. 42nd Street, 655 3rd Avenue and 675 3rd Avenue. The debt service coverage ratios for the loans are calculated based on a Fitch adjusted net cash flow and a stressed debt service based on the current loan balances and a hypothetical mortgage constant. Based on the stable or improved performance of the credit assessed loans, Fitch maintains investment grade credit assessments for all five of the loans. The Capitol at Chelsea loan is secured by a fee interest in a 39-story luxury high rise multifamily property with a small portion of office and ground floor retail. The properties are located in the Chelsea submarket of Manhattan, New York City. The property has exhibited stable performance since issuance. The Fitch-stressed NCF increased by 1.7% between issuance and September 30, 2006, and occupancy was 99.0% compared to 98.2% at issuance. The Fitch-stressed DSCR as of September 30, 2006 increased to 1.34x from 1.31x at issuance. The 205 East 42nd Street loan is secured by a 21-story office building located in the Midtown neighborhood of Manhattan, New York City. The building has 470,170 square feet of office space and 23,958 sf of ground-level retail space. The property's performance has improved since issuance. The Fitch-stressed NCF increased by 31.5% between issuance and Sept. 30, 2006, and occupancy was 95.6% compared to 96.1% at issuance. The Fitch-stressed DSCR as of September 30, 2006 increased to 2.11x from 1.70x at issuance. The remaining two credit assessed loans, 655 Third Avenue and 675 Third Avenue, have experienced stable performance and improved occupancy since issuance. LB UBS: Moody's Holds Junk Ratings on Class N and P Certificates ---------------------------------------------------------------- Moody's Investors Service upgraded the ratings of four classes, downgraded the ratings of two classes and affirmed the ratings of 10 classes of LB-UBS Commercial Mortgage Trust 2000-C5, Commercial Mortgage Pass-Through Certificates, Series 2000-C5: -- Class A-1, $181,069,691, Fixed, affirmed at Aaa -- Class A-2, $440,000,000, Fixed, affirmed at Aaa -- Class X, Notional, affirmed at Aaa -- Class B, $44,873,000, Fixed, affirmed at Aaa -- Class C, $44,873,000, Fixed, upgraded to Aa1 from Aa3 -- Class D, $14,958,000, Fixed, upgraded to Aa3 from A2 -- Class E, $7,479,000, Fixed, upgraded to A2 from Baa1 -- Class F, $12,464,000, Fixed, upgraded to Baa1 from Baa2 -- Class G, $9,972,000, Fixed, affirmed at Baa3 -- Class H, $19,944,000, Fixed, affirmed at Ba1 -- Class J, $9,972,000, Fixed, affirmed at Ba3 -- Class K, $4,985,000, Fixed, affirmed at B1 -- Class L, $7,479,000, Fixed, downgraded to Caa2 from B3 -- Class M, $4,986,000, Fixed, downgraded to C from Caa3 -- Class N, $4,986,000, Fixed, affirmed at C -- Class P, $527,736, Fixed, affirmed at C As of the Dec. 15, 2006 distribution date, the transaction's aggregate certificate balance has decreased by approximately 18.9% to $808.6 million from $997.2 million at securitization. The Certificates are collateralized by 102 mortgage loans ranging in size from less than 1.0% to 6.9% of the pool with the top 10 loans representing 48.5% of the pool. The pool includes three shadow rated investment grade loans, which comprise 13.5% of the current outstanding balance. Twenty two loans, representing 26.1% of the pool, have defeased and are secured by U. S. Government securities. Four loans have been liquidated from the trust, resulting in aggregate realized losses of approximately $16.9 million. Five loans, representing 2.9% of the pool, are in special servicing. Moody's has estimated aggregate losses of approximately $9.6 million for all of the specially serviced loans. Thirty-four loans, representing 27.5% of the pool, are on the master servicer's watchlist. Moody's was provided with full year 2005 and partial year 2006 operating results for approximately 94.0% and 87.1%, respectively, of the performing loans. Moody's loan to value ratio for the conduit component is 82.0%, compared to 84.7% at Moody's last full review in September 2005 and compared to 85.2% at securitization. Moody's is upgrading Classes C, D, E and F due to stable overall pool performance and defeasance. Classes C and D were upgraded on December 8, 2006 based on a Q tool based portfolio review. Moody's is downgrading Classes L and M due to realized and anticipated losses on the specially serviced loans. The largest shadow rated loan is the Gallery at Harborplace Loan, which is secured by a 403,000 square foot mixed use development situated in the Baltimore Inner Harbor in downtown Baltimore, Maryland. The property is also encumbered by a B Note that is held outside the trust. The property is 84.2% occupied, compared to 87.0% at last review. The largest office tenants include KPMG and Hogan and Hartson. Although the property's financial performance has improved since last review, Moody's is concerned about the weak Baltimore office market and the property's high lease expirations within the next 18 months. Moody's current shadow rating is A2, the same as at last review. The second largest shadow rated loan is the 707 Broad Street Loan, which is secured by a 508,000 square foot office building located in Newark, New Jersey. The property is 96.6% occupied, compared 94.7% at last review. The largest tenants are the State of New Jersey and Newark Public Schools. Property performance has improved due to increased revenues, stable expenses and amortization. The loan, which has amortized by approximately 12% since securitization, matures in November 2007. Moody's current shadow rating is A1, compared to Baa2 at last review. The third largest shadow rated loan is the Cal Fed Loan, which is secured by a 232,000 square foot office building located in Rosemead, California. The property is 100.0% leased to California Federal Bank under an eight-year, bondable net lease that is coterminous with the loan maturity. Moody's current shadow rating is Aaa, compared to Aa1 at last review. The top three conduit exposures represent 17.1% of the outstanding pool balance. The largest conduit exposure consists of 125 Broad - Units A and C Loans, which are two cross collateralized loans secured by condominium units in a 1.3 million square foot Class A office building located in New York City. Unit A is 330,000 square feet and is 100% leased to Salomon Smith Barney. Unit C is 193,000 square feet and is 100.0% leased to multiple tenants. The largest tenants are Fahnestock & Company and Ark Asset Management. Moody's LTV is 77%, compared to 78.4% at last review. The second largest conduit exposure is the Riverbank Business Center Loan, which is secured by a 326,000 square foot office building located in St. Paul, Minnesota. The property is 99% leased to U.S. Bank National Association under a lease that expires in January 2011. Moody's LTV is 83.7%, compared to 84.0% at last review. The third largest conduit exposure is the Beverly Hills Club Apartments Loan, which is secured by a 690-unit multifamily property located in Miami, Florida. The property is 95.8% leased, compared to 92.0% at last review. Moody's LTV is 74.5%, compared to 81.2% at last review. The pool's collateral is a mix of office and mixed use, U.S. Government securities, retail, multifamily, industrial and self storage, lodging and credit tenant lease. The collateral properties are located in 31 states and Washington, D.C. The highest state concentrations are New York, Florida, Massachusetts, California, and Maryland. All of the loans are fixed rate. LEVEL 3: To Acquire SAVVIS Content Delivery Network for $135 Mil. ----------------------------------------------------------------- Level 3 Communications, Inc., signed a definitive agreement to acquire the Content Delivery Network services business of SAVVIS, Inc. Under the terms of the agreement, Level 3 will pay $135 million in cash consideration to acquire certain assets, including network elements, customer contracts, and intellectual property used in SAVVIS’s CDN business. The purchase price is subject to certain customary post closing working capital adjustments. "The acquisition of SAVVIS’s CDN services business will enable Level 3 to better address the increasing opportunity presented by rich media applications such as video, Web 2.0 applications, multiplayer online gaming and software as a service over the Internet," said Kevin O’Hara, president and chief operating officer of Level 3. "We are looking forward to welcoming the pioneers of CDN to our team. The largest customers of CDN services rely on a combination of capabilities to support their businesses. These include services like CDN, IP transit, wavelengths, metro transport, and colocation. Upon completion of this transaction, Level 3 believes that it will be the only CDN services provider with a single source, full portfolio of end-to-end content distribution solutions, and will be in a unique position to offer a range of building blocks to meet these customers’ needs. "Level 3 already has a strong brand and capabilities in video distribution through its Vyvx business. With native CDN capabilities and with Level 3’s highly scalable, industry-leading IP backbone, we believe that Level 3 will be able to bring additional value to all video-centric companies by delivering video in a more intelligent and comprehensive way to a broader range of destinations. "This acquisition does not require the type of physical integration associated with the metro and backbone transactions we announced earlier this year. We are confident in our ability to incorporate this key capability into our portfolio." SAVVIS’s content delivery customers include some of the largest enterprises in the world, including Microsoft. "As we grow our online services business, stability and control over our network infrastructure becomes increasingly important to deliver great experiences for our customers, partners and advertisers," said Arne Josefsberg, general manager of Global Foundation Services at Microsoft. "We look forward to a continued relationship with Level 3 as they embark upon this next phase of their network evolution." SAVVIS’s CDN business had approximately $15 million in revenue for the nine months ending Sept. 30, 2006. Closing is subject to customary conditions, including receipt of Hart-Scott-Rodino approval. Closing is expected to occur in the first quarter of 2007. About SAVVIS Inc. Headquartered in Town & Country, Missouri, SAVVIS, Inc. (NASDAQ: SVVS) -- http://www.savvis.net/-- provides managed and outsourced IT services that focuses exclusively on IT solutions for businesses. With an IT services platform that extends to 47 countries, SAVVIS has over 5,000 enterprise customers and leads the industry in delivering secure, reliable, and scalable hosting, network, and application services. These solutions enable customers to focus on their core business while SAVVIS ensures the quality of their IT systems and operations. SAVVIS' strategic approach combines virtualization technology, a global network and 25 data centers, and automated management and provisioning systems. SAVVIS’s CDN services business, based in Thousand Oaks, California, with approximately 50 employees and over 100 customers, provides solutions that improve performance, reliability, scalability and reach of customers’ online content. Initially developed in 1996 as Sandpiper Networks, the division developed, deployed and operated a content delivery network. It has a globally distributed infrastructure in more than 20 countries. About Level 3 Communications Headquartered in Broomfield, Colorado, Level 3 Communications, Inc. (NASDAQ: LVLT) is a communications and information services company. The company operates a large communications and Internet backbone, making it a Tier 1 network. Level 3 is the current owner of AS1. * * * As reported in the Troubled Company Reporter on Dec. 20, 2006, Standard & Poor's Ratings Services assigned its 'CCC-' rating to $650 million of 9.25% senior notes due 2014 issued by Level 3 Financing Inc., a subsidiary of Broomfield, Colorado-based Level 3 Communications Inc. All ratings on Level 3, including the 'CCC+' corporate credit rating, are affirmed. The outlook is stable. LF 18: Voluntary Chapter 11 Case Summary ---------------------------------------- Lead Debtor: LF 18, LLC P.O. Box 519 Ithaca, NY 14851 Bankruptcy Case No.: 06-34716 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- LF 19, LLC 06-34717 Chapter 11 Petition Date: December 18, 2006 Court: Northern District of New York (Syracuse) Judge: Stephen D. Gerling Debtor’s Counsel: David H. Ealy, Esq. Trevett, Lenweaver & Salzer, P.C. Two State Street, Suite 1000 Rochester, NY 14614 Tel: (585) 454-2181 Fax: (585) 454-4026 Estimated Assets Estimated Debts ---------------- --------------- LF 18, LLC $1 Million to $1 Million to $100 Million $100 Million LF 19, LLC $100,000 to $100,000 to $1 Million $1 Million The Debtors did not file a list of their 20 Largest Unsecured Creditors. LONGRIDGE ABS: Moody's Rates $8 Mil. Class F Secured Notes at Ba1 ----------------------------------------------------------------- Moody's Investors Service assigned these ratings to Notes issued by Longridge ABS CDO I, Ltd.: -- Aaa to $175,000,000 Class A-1 Swap Transaction; -- Aaa to $160,000,000 Class A-1 Senior Secured Floating Rate Notes Due 2047; -- Aaa to $55,000,000 Class A-2 Senior Secured Floating Rate Notes Due 2047; -- Aa2 to $37,000,000 Class B Senior Secured Floating Rate Notes Due 2047; -- A2 to $22,000,000 Class C Mezzanine Deferrable Secured Floating Rate Notes Due 2047; -- Baa2 to $15,000,000 Class D Mezzanine Deferrable Secured Floating Rate Notes Due 2047; -- Baa3 to $12,000,000 Class E Mezzanine Deferrable Secured Floating Rate Notes Due 2047; and -- Ba1 to $8,000,000 Class F Mezzanine Deferrable Secured Floating Rate Notes Due 2047. The Moody's ratings of the Notes address the ultimate cash receipt of all required interest and principal payments, as provided by the Notes' governing documents, and are based on the expected loss posed to noteholders, relative to the promise of receiving the present value of such payments. The ratings reflect the risks due to the diminishment of cash flow from the underlying portfolio consisting of RMBS Securities, CMBS Securities, CDO Obligations and Credit Default Swaps, the Reference Obligations of which are one of more of the foregoing, due to defaults, the transaction's legal structure and the characteristics of the underlying assets. ZS Structured Credit Capital Management, L.P. will manage the selection, acquisition and disposition of collateral on behalf of the Issuer. MANSFIELD TRUST: Fitch Retains Low-B Ratings on Two Cert. Classes ----------------------------------------------------------------- Mansfield Trust's commercial mortgage pass-through certificates, series 2001-1, are upgraded: -- $6.6 million class C to 'AAA' from 'AA+'; -- $8.0 million class D to 'A' from 'A-'. These classes are affirmed: -- $15.2 million class A-1 at 'AAA' -- $111.7 million class A-2 at 'AAA' -- Interest-only class X at 'AAA' -- $7.3 million class B at 'AAA' -- $4.0 million class E at 'BB+' -- $3.3 million class F at 'B+'. Fitch does not rate the $4.6 million class G certificates. The rating upgrades are primarily the result of increased credit enhancement and defeasance. As of the December 2006 distribution date, the pool has paid 39.4% since issuance. Nine loans, 11.3% of the pool, have defeased. The upgrades also reflect the lack of delinquent loans since issuance, positive loan features such as significant recourse (approximately 96% of the pool) and a short weighted average remaining amortization term of 128 months. The loans' average seasoning is over nine years and the short amortization term leads to increased equity and limited loss exposure on the loans. Due to this seasoning, limited performance information is available for the loans. However, given the lack of delinquent loans, paydown and defeasance, the upgrades are warranted. The pool is comprised entirely of loans secured by properties in Canada. Specifically, the certificates are collateralized by 64 fixed-rate mortgage loans, consisting primarily of industrial (38%), retail (31.9%), and office (15.8%) properties, with concentrations in the provinces of Ontario (46.7%), British Columbia (16.9%), and Alberta (9.9%). MARICOPA COUNTY: Moody's Holds Rating on Revenue Bonds at Ba1 ------------------------------------------------------------- Moody's Investors Service affirmed the Ba1 rating on the $12.1 million Maricopa County Industrial Development Authority Multifamily Housing Revenue Bonds Series 2000A&B. Approximately $3.9 million in Multifamily Housing Revenue Bonds Subordinate Series 2000C remains unrated by Moody's. Legal security: The bonds are secured by revenues derived from operations of the Sun King and Casa Castillo projects; 375 affordable units in total, located in Scottsdale and Phoenix, Arizona. The bonds are further secured by other funds pledged under the indenture. Strengths: According to Moody's review of unaudited operating statements for the 11 months ending November 2006, debt service coverage has increased slightly to 1.30x. This is up somewhat from the 2005 DSC ratio of 1.20. The improvement in financial performance stems mainly from a decrease in vacancy and concessions, boosting revenue during 2006. There have been no taps to debt service reserves. The Replacement & Reserve account is currently funded at $185,632. According to MoodysEconomy.com, the Phoenix single family housing market is significantly overpriced, and management confirms that many multifamily residences in the submarket area have been converted to condominiums. These two factors should lead to increased demand for affordable housing properties such as Sun King and Casa Castillo. Challenges: Although economic vacancy has decreased considerably over the past year, more time is needed in order to identify this as a trend for the project. Expenses continue to increase steadily, averaging seven percent per year over the past two years. According to MoodysEconomy.com, the Phoenix market for single family homes is expected to experience some price depreciation. While this could lead to increased demand for affordable housing, it could also lead to volatility in the housing sector in general with possible adverse effects for multifamily units. Both Sun King and Casa Castillo are relatively older properties, built in 1973 and 1968, respectively. Outlook: The outlook on the bonds remains negative. Considering the projected volatility for the Phoenix and Scottsdale housing market, Moody's would like to see further evidence of financial improvement before considering the rating stable at the Ba1 level. What could change the rating -- up Several periods of substantial debt service coverage growth, coupled with evidence of stabilization in the housing submarket. What could change the rating -- down Continued increase in expenses and volatility in revenue; deterioration of debt service coverage level. MARKEL CORP: Fitch Upgrades Rating on 8.71% Capital Securities -------------------------------------------------------------- Fitch Ratings upgraded Markel Corporation's Issuer Default Rating to 'BBB+' from 'BBB' and Markel's senior debt ratings to 'BBB' from 'BBB-'. Fitch also upgraded the trust preferred stock rating of Markel Capital Trust to 'BBB-' from 'BB+'. Additionally, Fitch affirmed the 'A' Insurer Financial Strength ratings of the members of the Markel North America insurance group. Fitch also affirmed the 'A-' IFS rating of Markel International Insurance Company. The Rating Outlook is Positive. The debt and preferred stock upgrades reflect a material reduction in pro-forma financial leverage at Markel. Markel achieved this reduction in leverage through a combination of increased retained earnings and capital market transactions. Earlier this year, Markel reported the redemption of its convertible debt issue. These securities were convertible into common stock at the option of the debt holders who chose to convert rather than be redeemed. As a result, approximately $101 million of debt converted into common stock. Markel also reported its intent to redeem all $107 million of its outstanding trust preferred securities as of Jan. 1, 2007. Fitch expects financial leverage to fall to the 25 to 27% range as a result of these transactions. Markel's financial leverage had previously exceeded 30%. Additionally, Markel's capital structure will be significantly simplified, consisting of only senior debt and common stock, after the redemption of the trust preferred securities. The positive outlook considers the insurance operation's strong underwriting results and operating cash flow. Markel surpassed its target of an underwriting profit in the first nine months of 2006, reporting a combined ratio of 88%. These results compare favorably to the comparable period in 2005. However, Fitch recognizes that they largely reflect the relatively benign natural catastrophe losses in 2006 compared to record catastrophe losses in 2005. Markel was affected by the 2005 hurricane season, incurring losses of $246.3 million as the result of Hurricanes Katrina, Rita and Wilma. The 2005 hurricane season added 12 points to Markel's consolidated combined ratio, which was 101% for the full year 2005. Markel's operating results compare favorably to its peers. Markel's rating outlook also benefits from conservative reserving and accounting practices, a value-investing strategy that has historically produced returns in excess of market indices and a number of commutations that reduced Markel's exposure to lower rated reinsurers. Conversely, Fitch notes that Markel has a history of acquisitions. Historically, these acquisitions have occurred in soft market conditions, when organic premium growth was difficult to achieve, and were financed with significant amounts of debt. Fitch believes the insurance market is softening. If Markel were to make a major acquisition or significantly increase its financial leverage, Fitch would have to re-evaluate the ratings and rating outlook. The ratings also consider Markel's moderate operating leverage, including high exposure to reinsurance recoverables, though this is somewhat mitigated by strong collateral and the aforementioned commutations. Markel also employs significant investment leverage, allocating a much larger portion of its investment portfolio to equities, but a lower portion to non-investment grade bonds, than peers. Absent unusual large losses, such as another intense hurricane season, Fitch expects Markel North America to meet Markel's combined ratio target in 2007, which varies but is below 100%. Fitch continues to believe the positive actions taken at MIICL will ultimately result in underwriting results that meet Markel's 100% combined ratio target. However, Fitch recognizes that this achievement has taken longer than anticipated. The combined ratio for MIICL in the first nine months of 2006 was 105%. In 2005-6, MIICL has made significant progress in building up a reserve buffer, bringing its reserving methodology into line with that of the group and in commuting reinsurance recoverables. Although MIICL's ultimate profitability continues to lag below the expected level for a company in the 'A'-range, it is expected that future reserve releases will bolster improved underlying performance and that a return commensurate with that of the rest of the group will be achieved in 2007-8, at which point an upgrade could be envisaged and the rating of MIICL equalized with that of the operating companies of Markel North America. Fitch expects Markel will continue to hold cash and investments at the holding company equal to at least 2x annual interest expense. Fitch also expects 2007 fixed-charge coverage will meet, or exceed, the 4x level that is the threshold for the current rating level. Markel Corporation markets and underwrites specialty insurance products and programs to a variety of niche markets. In each of these markets, the company seeks to provide quality products and excellent customer service so that it can be a market leader. These ratings are affirmed with a Positive Outlook: Associated International Insurance Co. Deerfield Insurance Company Essex Insurance Company Evanston Insurance Company Markel American Insurance Company Markel Insurance Company -- Insurer financial strength at 'A'. Markel International Insurance Company -- IFS at 'A-'. These ratings are upgraded: Markel Corporation -- Issuer Default Rating to 'BBB+' from 'BBB' with a Positive Outlook; -- 7.2% Senior notes due Aug. 15, 2007 to 'BBB' from 'BBB-'; -- 7.0% Senior notes due May 15, 2008'BBB' from 'BBB-'; -- 6.8% Senior notes due Feb. 15, 2013 'BBB' from 'BBB-'; -- 7.35% Senior notes due Aug. 15, 2034 'BBB' from 'BBB-'; and, -- 7.5% Senior notes due Aug. 22, 2046 'BBB' from 'BBB-'. The 4.25% Liquid Yield Option Notes due June 5, 2031, rated 'BBB-', have been Paid in Full. Markel Capital Trust -- 8.71% Capital securities due Jan. 1, 2046 to 'BBB-' from 'BB+'. MASTERCRAFT INTERIORS: Files Disclosure Statement in Maryland ------------------------------------------------------------- Mastercraft Interiors Ltd., Kimels of Rockville Inc. and the Official Committee of Unsecured Creditors filed with the U.S. Bankruptcy Court for the District of Maryland a Disclosure Statement explaining their Chapter 11 Joint Plan of Liquidation. Overview of the Plan The Debtors and the Committee tell the Court that the Joint Plan contemplates the substantive consolidation of the Debtors' assets wherein it will be pooled and used to pay pro rata all of their creditors. Treatment of Claims Under the Joint Plan, Administrative Claims against the Debtors will be paid in full. Priority Tax Claims will also be paid in full. Holders priority non-tax deposit claims, totaling approximately $1,000,000, will be paid in full within 60 days after the effective date provided that the Debtors or Plan Administrator will not object to the claim. The Debtors disclose that Bank of America, a prepetition lender holding a secured claim, has received substantially all of the proceeds from the liquidation of its collateral. BofA has agreed to subordinate its deficiency claim, however, reserves certain residual claim recovery right under the final DIP financing orders. To the extent not already repaid, all amounts owed to the BofA, as DIP Lender, will be paid in full. Holders other secured claims will have the collateral securing claims returned. Deficiencies, if any, will be treated as an unsecured claim. General Unsecured Claim Holders will receive their pro rata share of any cash remaining after all other claims are paid. The Debtors estimate that unsecured creditors will receive less than 10% of their claims. Equity interests will be cancelled and holders of these interests will get nothing under the Joint Plan. About Mastercraft Interiors Headquartered in Beltsville, Maryland, Mastercraft Interiors Ltd. -- http://www.mastercraftinteriors.com/-- manufactures furniture and other home furnishings. The Company and its subsidiary, Kimels of Rockville, Inc., filed for bankruptcy on May 15, 2006, (Bankr. D. Md. Case No. 06-12769). Morton A. Faller, Esq., Michael J. Lichtenstein, Esq., and Stephen A. Metz, Esq., at Shulman, Rogers, Gandal, Pordy & Ecker, P.A., represent the Debtors in their restructuring efforts. Bradford F. Englander, Esq., at Linowes and Blocher LLP, represents the Official Committee Unsecured Creditors. When Mastercraft Interiors filed for bankruptcy, it reported assets amounting to $10,600,288 and debts amounting to $25,485,847. Kimels of Rockville reported assets totaling $704,227 and debts amounting to $10,341,704 when it filed for bankruptcy. Harold Hackerman was appointed as examiner in the chapter 11 cases of Mastercraft Interiors, Ltd., and Kimels of Rockville, Inc. MASTR ALTERNATIVE: S&P Holds BB Rating on Class B-4 Certificates ---------------------------------------------------------------- Standard & Poor's Ratings Services placed its 'B' rating on class B-5 issued by MASTR Alternative Loan Trust 2004-10 on CreditWatch with negative implications. At the same time, the ratings on 20 other classes from the same series were affirmed. The negative CreditWatch placement is due to the liquidation of one loan that resulted in a realized loss during the November 2006 remittance period. The depositor of this transaction has reported to Standard & Poor's that this loan was not delinquent and therefore not actively being monitored. The loss was caused by a California property that was destroyed due to a natural disaster and was not covered by the insurance policy. Additionally, since the deal did not have a special hazard carve-out, the loss was not covered. However, a short-sale offer on the land was accepted and a portion of the loss was recovered. The remainder was absorbed by subordination credit support. This deal utilizes a senior subordinate structure; consequently, class B-5 is supported by the unrated B-6 class, which is also being paid principal due to normal amortization. While the $333,820 loss is only the third loss incurred by the pool, current credit support to class B-5 is $238,692 because of losses and the pool paying down. The pool had amortized down to 66.46% of the original balance as of the November 2006 distribution period. Because current and projected credit support is not sufficient, S&P will continue to monitor this deal. Three loans amounting to $1.23 million were in foreclosure or were REO as of the November remittance period. The affirmations reflect current and projected credit support percentages that are sufficient to maintain the current ratings, as reported during the November 2006 remittance period. Standard & Poor's will continue to closely monitor the performance of class B-5. If the delinquent loans cure to a point at which they can provide sufficient credit enhancement, we will affirm the rating and remove it from CreditWatch. Conversely, if delinquencies translate into realized losses in the coming months and continue to erode credit enhancement, we will take further negative rating action on this class. The collateral consists of 15- and 30-year, fixed-rate mortgages secured by first liens on one- to four-family properties. Rating Placed on Creditwatch Negative MASTR Alternative Loan Trust 2004-10 Rating ------ Class To From ----- -- ---- B-5 B/Watch Neg B MASTR Alternative Loan Trust 2004-10 Class Rating ----- ------ 1-A-1, 2-A-1, 2-A-1, 3-A-1 AAA 4-A-1, 5-A-1, 5-A-2, 5-A-3 AAA 5-A-4, 5-A-5, 5-A-6, 5-A-7 AAA 15-PO, 30-PO, 15-AX-1 AAA 15-AX-2, 30-AX AAA B-1 AA B-2 A B-3 BBB B-4 BB MEMPHIS HEALTH: Moody's Junks Rating on $7.96 Mil. Revenue Bonds ---------------------------------------------------------------- Moody's Investors Service downgraded the underlying rating on the Memphis Health, Education, and Housing Facilities Board $7.96 million of Multifamily Housing Revenue Bonds, Series 2000A to Caa1 from B2. The outlook remains negative. These bonds continue to be MBIA-insured and therefore benefit from MBIA's Aaa rating. Moody's does not rate the Subordinate Series 2000B bonds. The downgrade on the underlying rating is due to continued taps to the Series A Debt Service Reserve fund. The bonds were issued to finance the acquisition and renovation of Hickory Pointe Apartments and to fund a debt service reserve fund. Hickory Pointe is a 240-unit garden style property located in the southeast section of Memphis, Tennessee. Legal security: * The bonds are special limited obligations of the issuer payable only from the trust estate, which consists of: (1) lease payments to be made pursuant to a Lease agreement between the issuer and the borrower; and, (2) all the assets pledged under the trust indenture. To secure payments due under the bonds, the trustee has a first priority security interest in the project to secure the borrower's obligations under the lease agreement. Strengths: -- Occupancy has improved significantly since a change in property management took place in 2003. Physical occupancy hit a high of 97% in February 2006 but had declined to 89.6% as of October 2006. Challenges: -- Despite rising occupancy, revenues have been offset by steep concessions and credit losses. Economic occupancy year to date for 2006 is 74.9%. -- The Senior Debt Service Reserve fund has been tapped multiple times to pay debt service since Jan. 1, 2005. If this trend continues, the Debt Service Reserve fund could be depleted in the next three years. -- The Repair and Replacement fund has been depleted, hindering the ability to make needed capital improvements to the project. Recent developments: The first transfer from the debt service reserve fund for Series 2000A bond occurred on Jan. 1, 2005 to pay a portion of the principal and interest on the Series 2000A bonds. There were subsequent transfers from the debt service reserve fund on July 1, 2005, Jan. 1, 2006, and July 1, 2006. The balance in the debt service reserve fund for the Series 2000A bonds as of Oct. 31, 2006 is approximately $401,431. Since the borrower's default under the lease agreement which triggered an event of default under the indenture in mid 2004, MBIA, as the insurer of the senior bonds, has been directing the flow of funds under the indenture. Physical occupancy has declined to 90% as of Oct. 2006, down from 97% in May 2006. High concessions, delinquent accounts and collections issues continue to be a significant issue at the property. Outlook: The negative outlook reflects the possibility of a further downgrade if the property's financial position does not significantly improve. Moody's will continue to monitor the property's occupancy rates, expenses, and debt service coverage closely. What could change the rating - up -- Clear signs of financial recovery such as improved net operating income and debt service coverage -- Replenishment of Debt Service Reserve fund and the Repair and Replacement fund. What could change the rating - down -- Continued deterioration of net operating income and debt service coverage -- Further transfers from the debt service reserve fund METHODIST HOSPITALS: Moody's Hacks Rating on $80.5MM Debt to Ba1 ---------------------------------------------------------------- Moody's Investors Service downgraded to Ba1 from A3 the bond ratings assigned to Methodist Hospitals' $80.5 million of total rated debt outstanding issued by the Indiana Health Facilities Finance Authority. With this rating action, the rating is removed from Watchlist where it was placed on Nov. 16, 2006. The outlook remains negative. The downgrade to Ba1 and the negative outlook reflect our concern regarding Methodists' continued precipitous decline in financial performance through 9 months of 2006, a fundamental shift in physician practice patterns as evidenced by a 14% decline in inpatient volumes since 2004, increased competition from a new acute care facility focused on select surgical specialties slated to open in 2007, ongoing delays with DSH payments, and concerns over the comparability of past financial performance given the auditors assessment of material weakness in internal accounting controls in the 2005 audit. Legal security: The series 2001 and Series 1996 bonds are secured by the gross revenue of the Obligated Group. Debt service fund maintained. Rate covenant of 1.10x. Interest rate derivatives: None. Strengths; -- *Still leading market share in its primary service area; both its hospitals are located in Lake County, Indiana*Merrillville campus located in service area with good demographics and more favorable payer mix -- Adequate, though declining, balance sheet measures, which currently supports a manageable debt load -- Engagement of outside consultants to assess and effectuate financial recovery Challenges: -- Large operating losses and liquidity decrease in 2005 and 2006 which deepened despite a turnaround effort -- Flat to declining volume trend reflecting competition, flat population growth and economic challenges in the service area -- Volume impact in 2005 and 2006 from CMS and JCAHO certification issues -- Challenging demographics with high Medicaid and uninsured population -- Competition from a number of hospitals, some of which are part of larger, financially strong systems -- Further competition from planned physician owned hospital and long term acute care hospital one mile away from the Merrillville campus -- Significant delays in receipt of Medicaid DSH money has stressed the system -- Material weaknesses found with 2005 audit, which have not yet been resolved in 2006 Recent developments and results: Methodist's rapid decline in financial performance in fiscal year 2005, continued through September 2006. Methodists' precipitous decline in financial performance stemmed from several quality issues which negatively affected patient volumes. In January of 2005, CMS deemed Methodist to not be in compliance with the conditions set forth for participating in Medicare and proposed to terminate their involvement in the program. After corrective measures were put in place, CMS found Methodist to be in compliance and rescinded their proposal to terminate their participation in Medicare in May of 2005. After a site visit in March of 2005, JCAHO recommended that the hospital's accreditation be denied. Management took issue with their recommendation and a hearing was held in June 2005 to review the situation. In October of 2005, JCAHO decided to keep Methodists' accreditation status on a conditional basis. As a result of the full survey in May of 2006, Methodist had 14 JCAHO compliance items for which corrective action plans have been submitted. The hospital will remain in a conditional accreditation status until the next unannounced JCAHO survey, which is anticipated to be before the end of the first quarter of 2007. While Methodist was going through their accreditation issue with JCAHO, they pursued accreditation with the Healthcare Facilities Accreditation Program, which they received full accreditation for in October of 2006. Due to the above quality issues, physician and community loyalty was negatively impacted which led to increased patient out migration to other competitors in the area. In addition to the existing competitors, these two new hospitals are set to open in of 2007: (1) Pinnacle hospital, a physician owned surgical hospital that will have 18 beds, 5 ORs, and no ER, which can expand to 72 beds and 10 ORs; and, -- The Progressive Healthcare Long Term Care Facility will be able to house 40 people. Both facilities will be approximately a mile away from Methodists' South Lake Campus. Even though Methodists' quality issues are behind them, their financial performance through April 2006 was not improving and as a result, the medical staff gave a vote of no confidence to management. Shortly thereafter, in May of 2006, the CEO resigned and the current CEO, who was a member of the board, became interim CEO. In addition, a physician who has been a member of the board since 1979 was appointed special assistant to the CEO. He was brought on board to help improve physician relations. Though management changes are aimed at addressing fractured physician relations, the continued decline in volumes suggest that there may be a permanent fundamental shift in the dynamic between the physician community and the hospital that will continue to challenge the organization, In August of 2006, the board approved an internally developed turn around plan, which was implemented shortly thereafter. However, the board recognized that no progress was made with patient volumes and revenue. Through 9 months in 2006, there were 15,123 inpatient admissions versus 15,847 the same period last year. Outpatient surgeries and outpatient visits were also down 35% and 13%, respectively. Due to the continued decline in volumes, the board decided that they needed outside help and brought in FTI Cambio in October 2006. Several members of FTI Cambio assumed various interim management roles. FTI Cambio is currently midway through their assessment phase of the turnaround and will provide a turnaround plan in February 2007. Even though they are in their assessment phase, management has said that any obvious problems will be addressed immediately. In the meantime, certain measures that were put in place from the prior turn around plan are still in place. For example, management started reducing their FTEs by approximately 250 in February of 2006 and in December of 2005, they froze their defined benefit plan and shortly thereafter, switched to a defined contribution plan. In addition to the declining volumes, revenues continued to be impacted by delays in Medicaid disproportionate share payments. In July 2006, Methodist received $20.6million in DSH payments, which was characterized as an advance that is subject to contingencies but the hospital believes that they do no have to be paid back. The hospital has also received a payment of $4.6 million for a component of DSH called healthcare for the indigent. Despite these payments in 2006, the receipt of DSH payments remains a significant issue for Methodist and other Indiana hospitals. Also of concern, is the Governor's current proposal to provide healthcare to an additional 100,000 Indiana residents by implementing a cigarette tax and shifting $50 million from the state's hospital reimbursement program to his new healthcare plan. Expenses have also come down but by a smaller margin and as a result, generated a loss of $16.2 million through September 2006 versus a loss of $7.6 million through September 2005. Despite the continued losses, Methodist still generated $1.8 million in cash flow with an estimated maximum annual debt service coverage ratio of 0.9x. With continued operating losses and delays in DSH disbursement, Methodist continued to experience further erosion of liquidity with unrestricted cash and investments to $95.2 million through September of 2006 versus $105.7 million in 2005. Despite the continued losses, the balance sheet remains a relative credit strength. However, it is troubling to see that liquidity has declined approximately $1 million a month since last September. In addition to the continued declines in financial performance, Methodists' auditors found material weaknesses in internal accounting controls, specifically, controls over financial reporting and evaluation of accounts receivables and as a result, the 2005 audit has not been released yet. The 2005 audit may contain a "going concern" opinion by virtue of the auditor's inability to obtain a default waiver from the bond trustee. One of the major adjustments that were made in the 2005 audit was the reclassification of $27 million of operating leases to capital leases which led to an increase in long term debt from approximately $83 million to approximately $109 million. This and other adjustments that were made raises concerns over the comparability of current financial performance to past financial performance and calls in to question the accuracy of Methodists' performance in prior years. Outlook The negative outlook reflects Moody's belief that the declining financial performance through September of 2006 will continue in 2007 as FTI Cambio develops a turnaround plan and attempts to stem the declines in volumes and improve physician relations. Given the ongoing issue with DSH disbursements, continued losses will continue to have a negative impact on liquidity cushions. What could change the rating--up -- Turnaround in financial performance and a sustained return to operating margins generated in past years; and, -- volume and market share improvement. What could change the rating--down -- Continued declines in patient volumes and market share leading to further deterioration of financial performance; and, -- significant debt increase without commensurate increase in cash flow and liquidity Key indicators: * Based on financial statements for The Methodist Hospitals, Inc. * First number reflects management prepared statements ended - Dec. 31, 2005 * Second number reflects interim 9-month financial statements annualized ended Sept. 30, 2006 * Investment returns normalized at 6% unless otherwise noted * Management prepared FY 2005 numbers do not include adjustments for DSH and Accounts Receivables * 2006 MADS has been estimated -- Inpatient admissions: 21,039; 20,164 -- Total operating revenues: $287.5 million; $279.3 million -- Moody's-adjusted net revenue available for debt service: $4.3 million; $10.4 million -- Total debt outstanding: $82.8 million; $109.5 million -- Maximum annual debt service: $5.1 million; $11.2 million -- MADS Coverage with reported investment income: .8 times; .5 times -- Moody's-adjusted MADS Coverage with normalized investment income: .8 times; .9 times -- Debt-to-cash flow: -169.6 times; 20.4 times -- Days cash on hand: 138.0 days; 123.3 days -- Cash-to-debt: 134.8%; 87.0% -- Operating margin: -8.2%; -7.8% -- Operating cash flow margin: -0.9%; 0.9% Rated debt: -- Series 1996, $14.9 million outstanding rated Ba1 -- Series 2001, $65.6 million outstanding rated Ba1 MICHAEL CHERNISKE: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Michael J. Cherniske dba Gunn Hill West Dairy 4130 North Jones Road Delta, UT 84624 Bankruptcy Case No.: 06-24794 Chapter 11 Petition Date: December 12, 2006 Court: District of Utah (Salt Lake City) Judge: Judith A. Boulden Debtor's Counsel: Joel T. Marker, Esq. McKay Burton & Thurman 170 South Main Street, Suite 800 Salt Lake City, UT 84101 Tel: (801) 521-4135 Fax: (801) 521-4252 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Mear Family Trust $420,000 c/o Thomas H. Mear 122 Calle Del Pacifico San Clemente, CA 92672 Intermountain Farmers $206,236 c/o Pat Ruff P.O. Box 30168 Salt Lake City, UT 84130 Delta Cache, LLC $182,763 P.O. Box 387 Ogden, UT 84402 Wilbur-Ellis - Knox McDaniel $98,174 1101 North Argonne Road, Suite 213 Spokane, WA 99212 Wells Fargo Business Line $54,089 P.O. Box 348750 Sacramento, CA 95834 Double T Feed Supply $34,300 Sousa and Company $22,383 American Express $20,725 Monsanto Dairy Business $20,596 MBNA $16,766 Wasatch Dairy Services, Inc. - 2 $15,863 Howard B. Williams, Inc. $14,817 GreenLine Equipment $10,021 Walton Feed West, Inc. $9,024 Giles Dairy Service $6,095 Steve Regan Co. $5,957 Sears Mastercard $5,040 Dale Fowkes Trucking $5,035 Todd E. Holt $4,264 Thatcher Group, Inc. $3,523 MILACRON INC: New Credit Facility Prompts S&P’s Developing Outlook ------------------------------------------------------------------ Standard & Poor's Ratings Services revised its outlook on Cincinnati, Ohio–based Milacron Inc., to developing from negative. At the same time, Standard & Poor's affirmed its ratings on the company, including its 'CCC+' corporate credit rating. "The outlook revision follows the company's announcement that it has entered into a new revolving credit facility, thereby improving its near-term liquidity position. However, uncertainty regarding both the company's ability to generate neutral to positive free cash flows in 2007 and the scope of pension funding requirements in 2008 remain concerns for the rating," said Standard & Poor's credit analyst Gregoire Buet. Milacron's ratings continue to reflect its subpar profitability, highly leveraged balance sheet, and weak credit protection metrics. The company has been affected by a slower-than-expected recovery in demand for plastic machinery equipment. High oil and resin prices have depressed customers' margin and ability to invest in new processing machinery despite improved capacity utilization rates. As a result, market conditions remain very competitive with almost no ability to increase prices. Milacron's profitability continues to be hindered by high legacy cost, and operating margins have stagnated in the low-5% area. Although the company is expecting continued revenue growth and better profitability in 2007, generating positive free cash flow will be challenging. MILLER PETROLEUM: Posts $257,518 Net Loss in Quarter Ended Oct. 31 ------------------------------------------------------------------ Miller Petroleum Inc. reported a $257,518 net loss on $381,640 of revenues for the second quarter ended Oct. 31, 2006, compared with a $727,374 net loss on $199,764 of revenues for the same period in 2005. The decrease in net loss is attributable to the lower reported operating loss and the decrease in interest expenses. Oil and gas revenue was $128,683 for the quarter ended Oct. 31, 2006 as compared to $183,056 for the prior year quarter, a decrease of $54,373. This resulted from changing oil vendors such that oil was not collected for approximately one month, requiring a cessation of production. Service and drilling revenue was $252,957 for the quarter ended Oct. 31, 2006 as compared to $16,467 for the prior year quarter, an increase of $236,490. This resulted from an increase in drilling activity. Interest expense was $6,894 for the quarter ended Oct. 31, 2006 as compared to $336,412 for the prior year quarter, a decrease of $329,518. This resulted from the Wind City Oil & Gas, LLC stock purchase and the payoff of most notes. At Oct. 31, 2006, the company's balance sheet showed $4.9 million in total assets, $593,534 in total liabilities, $4.35 million in common stock subject to put rights, and $995 in total stockholders' equity. Full-text copies of the company's consolidated financial statements for the quarter ended Oct. 31, 2006, are available for free at http://researcharchives.com/t/s?179f Going Concern Doubt As reported in the Troubled Company Reporter on Sept. 6, 2006, Rodefer Moss & Co, PLLC, in Knoxville, Tenn., expressed substantial doubt about Miller Petroleum, Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Apr. 30, 2006, and 2005. The auditor pointed to the company's recurring operating losses and common stock subject to put option, which the company does not have the current capability of funding. Headquartered in Huntsville, Tennessee, Miller Petroleum Inc. (OTC BB: MILL.OB) -- http://www.millerpetroleum.com/-- operates oil and gas wells, organizes joint drilling ventures with partners, and rebuilds and sells oil field equipment. MIRIAM GALDAMEZ: Case Summary & Nine Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Miriam E. Galdamez 13805 Crosstie Drive Germantown, MD 20874 Bankruptcy Case No.: 06-18152 Chapter 11 Petition Date: December 14, 2006 Court: District of Maryland (Greenbelt) Judge: Wendelin I. Lipp Debtor's Counsel: Craig Palik, Esq. McNamee Hosea 6411 Ivy Lane, Suite 200 Greenbelt, MD 20770 Tel: (301) 441-2420 Fax: (301) 982-9450 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's Nine Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Capital One Credit Card Purchases $1,227 P.O. Box 85015 Richmond, VA 23285 GEMB/JCP Credit Card Purchases $376 P.O. Box 981402 El Paso, TX 79998 Lord Taylor Credit Card Purchases $323 424 5th Avenue New York, NY 10081-2771 NCO Fin/99 $314 NCO Fin/99 (Sprint) $314 Shady Grove Hospital $282 WFNNB/Limited Credit Card Purchases $311 Credit Protections Assoc. $207 WFNNB/Victoria Secret Credit Card Purchases $20 ML CLO: Moody's Junks Ratings on Class B-1 and B-2 Notes -------------------------------------------------------- Moody's Investors Service downgraded the ratings on the notes issued in 1998 by ML CLO Series 1998-Pilgrim America-2, a high yield collateralized loan obligation issuer: * $14,000,000 Class B-1 Fixed Rate Third Senior Secured Notes due 2009 -- Prior Rating: Ba3, on watch with direction uncertain -- Current Rating: Caa1 * $31,000,000 Class B-2 Floating Rate Third Senior Secured Notes due 2009 -- Prior Rating: Ba3, on watch with direction uncertain -- Current Rating: Caa1 The rating actions reflect the deterioration in the credit quality of the transaction's underlying collateral portfolio, as well as the occurrence of asset defaults and par losses, and the continued failure of certain collateral and structural tests leading to an event of default, according to Moody's. MORGAN STANLEY: Fitch Holds CCC Rating on $5.3 Mil. Class M Certs. ------------------------------------------------------------------ Fitch Ratings upgrades these classes of Morgan Stanley Capital I Inc.'s commercial pass-through certificates, series 1998-WF2: -- $21.2 million class F to 'AA' from 'AA-'; and, -- $23.9 million class G to 'A-' from 'BBB+'. In addition, Fitch affirms the following classes: -- $323.9 million class A-2 at 'AAA'; -- Interest only class X at 'AAA'; -- $53.1 million class B at 'AAA'; -- $47.8 million class C at 'AAA'; -- $53.1 million class D at 'AAA'; -- $21.2 million class E at 'AAA'; -- $10.6 million class H at 'BBB'; -- $8 million class J at 'BBB-'; -- $8 million class K at 'BB'; and, -- $15.9 million class L at 'B-'. The $5.3 million class M remains at 'CCC'. Fitch does not rate the $2.5 million class N. The class A-1 certificates have paid in full. The rating upgrades reflect the increased credit enhancement due to scheduled amortization and loan payoffs, as well as the additional defeasance of one loan since Fitch's last rating action. As of the December 2006 distribution date, the pool's aggregate balance has been reduced 44% to $594.6 million from $1.06 billion at issuance. Since issuance, six loans have defeased. There are currently no delinquent or specially serviced loans. MORTGAGE CAPITAL: Fitch Lifts Rating on Class G Certificates to BB ------------------------------------------------------------------ Fitch Ratings upgrades the long-term credit rating and maintains the Distressed Recovery rating of Mortgage Capital Funding, Inc.'s multifamily and commercial mortgage pass-through certificates, series 1997-MC1, as: -- $29.8 million class F to 'AA' from 'BBB-'; -- $6.6 million class G to 'BB' from 'B+'; and, -- $11.5 million class H to 'CCC/DR2' from 'CC/DR2'. In addition, Fitch affirms these class: -- Interest-only class X at 'AAA'. Classes A-1 through E have paid in full. Classes J and K have been reduced to zero due to realized losses. The rating upgrades for classes F and G reflect improved credit enhancement levels due to loan payoffs and scheduled amortization since Fitch's last rating action. As of the December 2006 distribution date, the pool's aggregate certificate balance decreased 92.7% since issuance, to $47.9 million from $658.5 million. The rating upgrade for class H is due to the resolution of two specially serviced loans in August 2006 with minimal losses. Class H remains at 'DR2' due to previously incurred realized losses. Currently, there are no delinquent or specially serviced loans. Fitch is concerned about the increasingly concentrated nature of the pool, with 13 remaining loans, all of which mature in 2007 and 2008. In addition, Fitch continues to monitor the performance of the second largest loan in the pool, which had a third-quarter 2006 debt service coverage ratio of 0.68X and was 71% occupied as of September 2006. However, the borrower is in negotiations to lease the vacant space. Also, the year-end 2005 weighted averaged debt service coverage ratio of the remaining loans is 1.42x, increasing the likelihood of refinance or payoff. Distressed Recovery ratings are designed to estimate recoveries on a forward-looking basis while taking into account the time value of money. MSX INTERNATIONAL: Moody's Downgrades Ratings on $195.5 Mil. Notes ------------------------------------------------------------------ Moody's Investors Service downgraded all the credit ratings of MSX International, Inc., the parent holding company, and MSX International Limited, a wholly-owned UK operating subsidiary. Moody's downgraded these ratings of MSX International: -- $65.5 million 11% senior secured notes due 2007, downgraded to B1, LGD2, 10% from Ba3, LGD1, 8%; -- $130 million 11.375% senior subordinated notes due 2008, downgraded to Caa2, LGD5, 72% from Caa1, LGD5, 72%; -- Corporate Family Rating, downgraded to Caa1 from B3; -- Probability of Default Rating, downgraded to Caa1 from B3; Moody's downgraded this rating of MSX Limited: -- $10 million 11% senior secured notes due 2007, downgraded to B1, LGD2, 10% from Ba3, LGD1, 8%. The rating outlook is negative. The rating downgrade primarily reflects the significant refinancing risk facing the company as nearly $100 million of its term debt matures in the fourth quarter of 2007. Compounding this risk is the fact that should the company fail to successfully refinance its term debt, its revolving credit facility will mature as well. The Corporate Family Rating primarily reflects the company's high leverage, weak free cash flow and modest interest coverage metrics. The negative ratings outlook continues to reflect the ongoing challenges in the business environment as the company's major automotive sector customers continue to seek to reduce costs and downsize their manufacturing capacity. Volume and pricing pressures in each of the firm's lines of business are expected to continue for the foreseeable future. The company has sought to diversify beyond its traditional automotive manufacturer customer base, but results to date have been largely unsuccessful. Moody's expects further declines in the company's revenue base until it reaches its core operations, which have demonstrated favorable top-line growth. The ratings could be moved upward if an equity infusion is effected by the sponsor group, thereby reducing the company's high leverage position, or if there is a successful renegotiation of the company's debt inclusive of a permanent term-out of the revolver that is not tied to the renegotiation of other debt instruments. The rating could move down if the company is unable to successfully renegotiate its debt, resulting in payment defaults on the company's indebtedness. MSX International, Inc. is a global provider of outsourced technical business services. Revenues for the twelve months ended Oct. 1, 2006 were $360 million. NEENAH FOUNDRY: S&P Rates Proposed $225 Million Senior Note at B ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' senior secured rating and its '3' recovery rating to Neenah Foundry Co.'s proposed $225 million senior secured fixed rate note issuance. The recovery rating reflects an expectation of meaningful recovery in the event of a payment default. Neenah also issued $75 million of senior unsecured subordinated notes due 2013 that are not rated. The company also entered into a new $100 million five-year, asset-based revolving credit facility that allows the company to borrow up to an additional $30 million under the facility. The corporate credit rating on Neenah is B/Stable/--. This rating reflects the company's highly leveraged financial profile and its vulnerable business profile. Neenah has respectable niche positions in highly cyclical and competitive metal casting markets. The casting industry is fragmented, highly capital intensive, and subject to volatile demand, customer pricing pressures, and fluctuations in raw material prices. Ratings List * Neenah Foundry Inc. -- Corporate credit rating at B/Stable/ -- $225 million senior secured note at B -- Recovery rating 3 NEW CASTLE: Case Summary & 9 Largest Unsecured Creditors -------------------------------------------------------- Lead Debtor: New Castle Investors, LLC 1400 South Patriot Drive Yorktown, IN 47396 Bankruptcy Case No.: 06-08228 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- Evansville Investors, LLC 06-08229 Wabash Investors, LLC 06-08230 Chapter 11 Petition Date: December 15, 2006 Court: Southern District of Indiana (Indianapolis) Judge: Frank J. Otte Debtor’s Counsel: Edward B. Hopper, II, Esq. Stewart & Irwin PC 251 East Ohio Street, Suite 1100 Indianapolis, IN 46204 Tel: (317) 639-5454 Fax: (317) 632-1319 Estimated Assets: $0 to $50,000 Estimated Debts: $1 Million to $100 Million A. New Castle Investors, LLC’s 3 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Nationwide Health Properties Balance on $3,901,282 Inc. purchase of lease Brent P. Chappell 610 Newport Center Drive Ste. 1150 Newport Beach, CA 92660 MLD Properties Limited Balance on Unknown Partnership purchase of lease Brent P. Chappell 610 Newport Center Drive Ste. 1150 Newport Beach, CA 92660 Old National Bank Balance of purchase Unknown Letter of Credit Operations price of lease 402 Main Street Mount Vernon, IN 47620 B. Evansville Investors, LLC’s 3 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ National Health Properties Balance of purchase $3,039,960 Inc. price of lease Brent P. Chappell 610 Newport Cetner Drive Ste. 1150 Newport Beach, CA 92660 MLD Properties Limited Balance of purchase Unknown Partnership price of lease Brent P. Chappell 610 Newport Center Drive Ste. 1150 Newport Beach, CA 92660 Old National Bank Balance of purchase Unknown Letter of Credit Operations price of lease 402 Main Street Mount Vernon, IN 47620 C. Wabash Investors, LLC’s 3 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Nationwide Health Properties Balance of purchase $2,558,633 Inc. price for lease Brent P. Chappell 610 Newport Center Drive Ste. 1150 Newport Beach, CA 92660 MLD Properties Limited Balance of purchase Unknown Partnership price of lease Brent P. Chappell 610 Newport Center Drive Ste. 1150 Newport Beach, CA 92660 Old National Bank Balance due on Unknown Letter of Credit Operations leased property 402 Main Street Mount Vernon, IN 47620 NEW MEDIA LOTTERY: Oct. 31 Balance Sheet Upside-Down by $5.4 Mil. ----------------------------------------------------------------- New Media Lottery Services Inc. reported a $733,021 net loss on net revenues of $153,163 for the quarter ended Oct. 31, 2006, compared with a $505,796 net loss on zero revenues for the same period in 2005. At Oct. 31, 2006, the company's balance sheet showed $1 million in total assets, $2.6 million in total liabilities, and $3.9 million in minority interest, resulting in an $5.4 million total stockholders' deficit. The company's balance sheet at Oct. 31, 2006, also showed strained liquidity with $687,291 in total current assets, available to pay $1.1 million in total current liabilities. Revenues generated during the current quarter were derived almost entirely from the company's Irish client’s web based bingo operations which the company began marketing in earnest during the quarter. The increase in net loss is primarily due to the increase in operating expenses. Full-text copies of the company's consolidated financial statements for the second quarter ended Oct. 31, 2006, are available for free at http://researcharchives.com/t/s?179c Going Concern Doubt Bouwhuis, Morrill & Company expressed substantial doubt about New Media Lottery Services Inc.'s ability to continue as a going concern after auditing the company's financial statements for the year ended April 30, 2006. The auditing firm pointed to the company's negative cash flows from operations and recurring operating losses. Full-text copies of the company's consolidated financial statements for the quarter ended Oct. 31, 2006, are available for free at http://researcharchives.com/t/s?179c About New Media Lottery New Media Lottery Services Inc. (OTC: NWMD) -- http://www.nmlsinc.com/-- through its direct and indirect subsidiaries, New Media Lottery Services plc and New Media Lottery (International) Services Ltd. designs, builds, implements, manages, hosts and supports web based and wireless device based lottery programs operated by governments and charitable organizations outside of the United States. PARK SQUARE: Moody's Lifts Ratings on Three Class Certificates -------------------------------------------------------------- Moody's Investors Service upgraded the ratings of Park Square Mortgage Trust, Series 2000-C5B and affirmed the ratings of Gallery at Harborplace Mortgage Trust, Series 2000-C5C: * Park Square Mortgage Trust, Commercial Mortgage Pass-Through Certificates, Series 2000-C5B -- Class B-1, $2,000,000, Fixed, upgraded to Aaa from Ba1 -- Class B-2, $5,100,000, Fixed, upgraded to Aaa from Ba2 -- Class B-3, $2,851,585, Fixed, upgraded to Aaa from Ba3 * Gallery at Harborplace Mortgage Trust, Commercial Mortgage Pass-Through Certificates, Series 2000-C5C -- Class B-1, $3,200,000, Fixed, affirmed at A3 -- Class B-2, $5,100,000, Fixed, affirmed at Baa2 -- Class B-3, $2,200,000, Fixed, affirmed at Baa3 The Certificates are supported by mortgage loans on two commercial properties. Each mortgage loan is a B Note associated with A Notes securitized in LB-UBS Commercial Mortgage Trust 2000-C5, Series 2000-C5. Moody's concluded a full review of the LB-UBS transaction on Dec. 20, 2006. In conjunction with this review, the shadow rating of the A Note from the Park Square Building Loan was upgraded and the shadow rating of the A Note from the Gallery at Harborplace was affirmed, resulting in the above referenced rating actions. The Park Square Building Loan was secured by a 480,000 square foot Class B office building located in the Back Bay submarket of Boston, Massachusetts. Moody's upgraded Class B-1, B-2 and B-3 due to the borrower's election to defease the loan with U.S. Government securities. The loan matures in November 2010. The Gallery at Harborplace Loan is secured by a 403,000 square foot mixed use development situated in the Baltimore Inner Harbor in downtown Baltimore, Maryland. The property is 84.2% occupied, compared to 87.0% at last review. The largest office tenants include KPMG and Hogan and Hartson. Although the property's financial performance has improved since last review, Moody's is concerned about the Baltimore office market and the property's high lease expirations within the next 18 months. The loan matures in December 2010. Moody's current shadow rating for the A Note is A2, the same as at last review. PATRICK WILBER: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Patrick A. Wilber 420 Wildwood Ridge Colgate, WI 53017 Bankruptcy Case No.: 06-27078 Type of Business: The Debtor filed for chapter 11 protection on January 5, 1998 (Bankr. E.D. Wis. Case No. 98-20077). Chapter 11 Petition Date: December 12, 2006 Court: Eastern District of Wisconsin (Milwaukee) Judge: Susan V. Kelley Debtor's Counsel: Jonathan V. Goodman, Esq. 135 West Wells Street, Suite 340 Milwaukee, WI 53203 Tel: (414) 276-6760 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Kurt Hoffman Loan $170,000 2001 North Booth Street Milwaukee, WI 53212 Kevin Rickstrom Loan $20,000 1244 North 68th Street, Suite 100 Wauwatosa, WI 53213 Soref's Carpet City Carpeting $8,000 411 South 2nd Street Milwaukee, WI 53204 Lake Country Disposal Dumping Fees $7,000 and Recycling MBW Plumbing Co., Inc. Plumbing Services $6,300 Control Corp. Controls $6,300 Capitol One Cash Card Credit Card $5,200 WE Energies Electricity $5,000 The Home Depot Credit Card $5,000 Menards Big Card Credit Card $4,500 A-1 Accounting & Tax Service Accounting Services $3,800 Air Masters HVAC Services $2,500 Community Memorial Hospital Services $2,484 Hospital Services Center for Medical Imaging Medical Services $2,061 Parss Corporation Asbestos Abatement $1,600 Anderson Fence Fencing $1,485 Bug-Stoppers Pest Control $1,500 Harvey J. Goldstein Attorney Fees $1,400 Nextel Communications Cell Phone $1,300 Anton Wroblewski Handyman $900 PAULA CARSON: Case Summary & 12 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Paula Lynne Carson aka Paula Carson Smith aka Lakeside Properties LLC aka Carson Lakeside Inc. 926 Lakeside Avenue Southeast Seattle, WA 98144 Bankruptcy Case No.: 06-14380 Chapter 11 Petition Date: December 8, 2006 Court: Western District of Washington (Seattle) Judge: Thomas T. Glover Debtor's Counsel: Jeffrey B. Wells, Esq. 500 Union Street, Suite 927 Seattle, WA 98101-2332 Tel: (206) 624-0088 Total Assets: $3,905,000 Total Debts: $2,774,385 Debtor's 12 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Carson Lakeside LLC Business Loan $652,000 926 Lakeside Avenue Southeast Seattle, WA 98144 Bank of America Credit Card $103,034 P.O. Box 60069 City of Industry, CA 91716-0069 LeSpoon LLC Personal Note $45,000 1425 31st Avenue Seattle, WA 98122 Groff Murphy Trachtenberg and Professional $27,837 Everard Services 300 East Pine Seattle, WA 98122 U.S. Bank Bank Loan $19,500 P.O. Box 790408 St. Louis, MO 63179-0408 Alaska USA FCU Bank Loan $38,360 Collateral: $24,000 Unsecured: $14,360 Bank Loan $34,536 Collateral: $27,000 Unsecured: $7,536 Chase Credit Card $31,100 Wells Fargo Credit Card $9,238 Abramson Pendergast & Co. Professional $7,948 Services Retail Services Credit Card $5,672 Capital One 5351 Credit Card $5,224 MBNA Credit Card $4,000 PERSEUS CDO: Moody's Holds Junk Ratings $56 Million Senior Notes ---------------------------------------------------------------- Moody's Investors Service confirmed the ratings of these classes of securities issued by Perseus CDO I Ltd. and removes them from negative credit watch. Affected tranches of notes: * Perseus CDO I, Ltd. -- Tranche Description: $6,500,000 Class B-l Floating Rate Senior Secured Notes due June 15, 2011 -- Previous Rating: Caa3 on watch for possible downgrade -- New Rating:Caa3 -- Tranche Description: $49,500,000 Class B-2 Fixed Rate Senior Secured Notes due June 15, 2011 -- Previous Rating: Caa3 on watch for possible downgrade -- New Rating: Caa3 According to Moody's, the transaction has delevered significantly and the credit risk associated with the Class B Notes has stabilized such that the risk presented to investors is again consistent with the ratings assigned to each such class of notes. PIERRE FOODS: Moody's Cuts Ratings on $271 Mil. Sr. Loans to Ba3 --------------------------------------------------------------- Moody's Investors Service affirmed the B1 corporate family rating of Pierre Foods, Inc. and concurrently lowered the debt ratings on the bank credit facilities to Ba3 from Ba2. Moody's also confirmed the B3 rating on the $125 million senior subordinated notes, maturing 2012. The rating outlook is stable. The SGL-2 liquidity rating is unaffected by today's actions. This concludes the review for possible downgrade that began on Nov. 6, 2006 after the company's disclosure that it agreed to acquire substantially all of the assets of Zartic, Inc. and its affiliated distribution company, Zar Tran, Inc. for approximately $94 million plus the assumption of certain liabilities, subject to post-closing adjustments. Moody's affirmed Pierre's B1 corporate family rating after the disclosure, but placed the ratings on all debt instruments under review for possible downgrade. The transaction closed on Dec. 11, 2006 and, as expected, was financed with proceeds from a $100 million add-on to its existing term loan B. Pierre's B1 corporate family rating is supported by: -- the company's strong historical growth that maps to an "A" rating led by new product introductions, increasing customer penetration and an ongoing trend in away-from-home meal consumption; -- broad channel and customer diversity, despite some degree of concentration with CKE Restaurants, operator of Hardee's and Carl Junior's restaurants; and, -- the company's demonstrated ability to repay debt, having repaid $43 million of debt since June 2004. Constraining the ratings are: -- Pierre's continued weak debt protection measures, many of which map to a "B" rating or below; -- Moody's expectation that Pierre's credit metrics will moderately weaken over the near-term as a result of the additional acquisition debt; and, -- Pierre's small scale and geographic diversification, both mapping to "B" on the Methodology grid. The stable ratings outlook reflects Moody's expectation that Pierre's solid operating performance will continue, and that the company will manage growth so as to maintain debt protection measures within a range consistent with its rating. Given the expectation that credit metrics will weaken as a result of the Zartic transaction, it may take some time for the B1 rating to solidify. The rating outlook could come under pressure if expected acquisition cost savings do not materialize, raw material prices continue to pressure margins, or by a loss of CKE sales which have been a large part of Pierre's growth in recent years. These are the rating actions: Affirmed: -- B1 corporate family rating -- B1 probability-of-default rating -- B3, LGD5, 87% on the $125 senior subordinated notes maturing 2012 These ratings were downgraded: -- $40 million senior secured revolving credit facility maturing 2009, to Ba3, LGD3, 35% from Ba2, LGD2, 28% -- $231 million senior secured term loan facility maturing 2010, to Ba3, LGD3, 35% from Ba2, LGD2, 28% The SGL-2 Speculative Grade Liquidity rating was unaffected. Pierre, a manufacturer and marketer of high-quality, differentiated processed food solutions, focusing on formed, pre-cooked protein products and hand-held convenience sandwiches, had revenues of approximately $429 million in the LTM period ended Sept. 2, 2006. The Company's headquarters are in Cincinnati, Ohio. PLUM POINT: Two 30-Year PPA’s Prompt S&P’s Postive CreditWatch -------------------------------------------------------------- Standard & Poor's Ratings Services placed its 'B' ratings on Plum Point Energy Associates' $423 million ($352 million outstanding) first-lien notes, its $102 million synthetic LOC facility, and its $50 million revolving credit facility on CreditWatch with positive implications. Plum Point is a 665 MW coal-fired, base load electrical generating facility with advanced emission controls that is being built in Osceola, Arkansas. The CreditWatch listing follows PPEA's announcement earlier this month that it has entered two 30-year power purchase agreements for a total of 120 MW of its capacity. PPEA had previously entered into a 200 MW, 30-year PPA with the South Mississippi Electric Power Association in August 2006. As a result, PPEA now has nearly 100% of its 378 MW share of the Plum Point project's 665 MW capacity under long-term contract with load-serving entities in the region where it is located. "With the elimination of merchant exposure, the credit profile has improved significantly and PPEA's ratings will likely witness a multiple notch upgrade," said Standard & Poor's credit analyst Aneesh Prabhu. Standard & Poor's expects to resolve the CreditWatch listing over the next several weeks after we complete our review. The review will focus on the credit quality of the offtakers, the terms and conditions of the agreements, and construction progress and risk. PMA CAPITAL: Reduced Financial Leverage Cues Moody’s to Up Ratings ------------------------------------------------------------------ Moody's Investors Service upgraded the senior debt ratings of PMA Capital Corporation to Ba3 from B3 and the insurance financial strength ratings of the members of the PMA Insurance Group companies to Baa3 from Ba1. The insurance financial strength rating of PMA Capital Insurance Company remains unchanged at B1. The outlook for the ratings is stable. According to Moody's, the upgrade was prompted by PMACC's improved financial flexibility, including its notable reduction in financial leverage over the last twelve months, as well as improved holding company liquidity and fixed charge coverage metrics. Moody's noted that the PMAIG pool has experienced moderate but consistent levels of profitability in recent years, most recently driven by new business production and renewal retention rates in-line with historical norms, as well as an emphasis on managed care initiatives and a change in the geographic mix of business. These positive trends are partially offset by intensifying competition and by secular trends in medical cost inflation. In addition, though improved, Moody's remains concerned about the impact on its current risk-adjusted capital position were there to be material adverse reserve development in its ongoing operations. Moody's notes that the ongoing operations have historically experienced stable reserve development; however, the long-tail nature of its business adds uncertainty to the loss reserving process. Moody's also noted that the ratings on PMA Re remained unchanged, reflecting Moody's expectations that the company will continue to manage an orderly runoff of its loss reserves and that adverse reserve development will not exhaust the remaining limit of $75 million on PMA Re's adverse development cover. The company continues to reduce its insurance liabilities at PMA Re through the commutation of remaining contracts. Moody's has narrowed the notching between the insurance financial strength rating and the senior debt rating to reflect the improved business fundamentals at PMAIG and the orderly run-off of PMA Re. Moody's expects that at the current rating level, adjusted financial leverage will remain at current levels, while maintaining gross underwriting leverage less than 7x, pre-tax interest coverage consistently between 1-2x, and adverse reserve development will not exceed 7% of beginning loss and LAE reserves. Moody's also expects PMACC to hold cash and invested assets at the holding company, sufficient to cover annual interest expense by at least 1x and maintain a prudent capital management strategy. On the other hand, an increase in financial leverage, pre-tax interest coverage less than 1 times, gross underwriting leverage greater than 7x, and adverse reserve development greater than 7% of beginning loss and LAE reserves, could result in a review for downgrade. The last rating action occurred on July 18, 2006, when Moody's placed the B3 senior debt rating of PMA Capital Corporation's and the Ba1 insurance financial strength ratings of PMAIG on review for possible upgrade. In that same action, Moody's changed the outlook on PMA Capital Insurance Company to stable from developing. These ratings have been upgraded with a stable outlook: * PMA Capital Corporation -- senior unsecured debt to Ba3 from B3; -- prospective senior unsecured debt to Ba3 from B3; -- prospective subordinated debt to B1 from Caa2; and, -- prospective preferred stock to B2 from Caa3; * PMA Capital Trust I -- prospective preferred securities to B1 from Caa2 * PMA Capital Trust II -- prospective preferred securities to B1 from Caa2 * Manufacturers Alliance Insurance Company -- insurance financial strength to Baa3 from Ba1 * Pennsylvania Manufacturers' Association Insurance Company -- insurance financial strength to Baa3 from Ba1 * Pennsylvania Manufacturers Indemnity Company -- insurance financial strength to Baa3 from Ba1 Affirmed with a stable outlook: * PMA Capital Insurance Company -- insurance financial strength at B1. PMA Capital Corporation, headquartered in Philadelphia, Pennsylvania, is an insurance holding company whose operating subsidiaries provide specialty risk management products and services, particularly workers' compensation insurance, to customers in the United States. As of Sept. 30, 2006, shareholders' equity was $412 million. Moody's insurance financial strength ratings are opinions of the ability of insurance companies to repay punctually senior policyholder claims and obligations. POINT NORTH: CCAA Stay Proceedings Extended Until February 16 ------------------------------------------------------------- Point North Energy Ltd. disclosed that the provisions of the initial order granting protection under the Companies' Creditors Arrangement Act and the stay of proceedings in this action are extended until Feb. 16, 2007. As of Dec. 20, 2006, Point North is in receipt of claims totalling $33 million under the CCAA process, which closed on Dec. 15, 2006. The Corporation is required by the order to determine the initial validity of each claim received by Jan. 12, 2007. Currently, the company intends to dispute the validity of approximately $13.8 million worth of claims. If the current market conditions remain, and the balance of the outstanding claims are proved valid, management of Point North anticipates that the market value of assets in the company will be substantially less than the value of outstanding claims. As of Dec. 21, 2006, Point North Energy has not received any offers for its 24% working interest share in its property located at Ft. Liard, Northwest Territories. Management is continuing its efforts to restructure or recapitalize the company. About Point North Point North Energy Limited (TSX:PNY) is a major participant in the exploration and development of the natural gas potential of the Fort Liard, Northwest Territories. Point North is the successor company to Purcell Energy Ltd. It was created as the result of a Plan of Arrangement that closed on Nov. 2, 2005. On Sept. 27, 2006, the Court of Queen's Bench of Alberta granted an initial order to Point North under the Companies' Creditors Arrangement Act. POLYTECHNIC UNIVERSITY: Moody's Pares Revenue Bonds’ Rating to B1 ----------------------------------------------------------------- Moody's Investors Service downgraded its long term rating on Polytechnic University's Series 2000 Revenue Bonds issued through the New York City Industrial Development Agency to B1 from Ba3. The rating outlook remains negative. The downgrade action reflects continued deficits, a challenging student market environment with a drop in net tuition revenue in fiscal year 2006 and limited liquidity. Legal security: Rental payments of the University under the Lease Agreement are an unsecured general obligation. Additional bonds test. Debt service coverage and liquidity covenants. Interest rate derivatives: None. Strengths: -- Recent momentum in plan to increase enrollment with full- time equivalent students up 6% this fall to 2,591. The growth was disproportionately in graduate ranks with overall undergraduate students falling 2.7% for the year; however, new undergraduate admissions came in at 483 students, a recent high. -- Rezoning of downtown Brooklyn now permits substantial air rights for the urban campus with some possibility of developers paying for those rights as well as helping the University meet some of its pressing capital needs, although a large payoff likely remains several years off. -- Significant donor support with $11.3 million in total gift revenue $9 million unrestricted in fiscal year 2006 and three-year average of $7.5 million. With a couple of large unrestricted bequests in 2006, however, Moody's expect the level of new unrestricted gifts to be lower in 2007 and beyond. -- Healthy auxiliary operations with student housing facilities contributing to core revenue growth. Challenges -- Last fall Polytechnic filed for cy pres relief to modify the restrictions in the Mildred Othmer bequest to avoid a crisis in its bond covenants and Title IV composite score. The King's County Surrogate's Court granted relief giving the University a $13.4 million pool to draw on over the coming years. In FY 2006, the University used $1.1 million of this approved pool, just enough to meet the 1.1x debt service coverage covenant. While Moody's believes the relief provides a near term cushion to meet these financial tests, the negative cash flow will continue to place the University's credit profile under stress. -- Continuing structural deficits with Moody's calculation of three-year average margin at -17.2%, even with large unrestricted gift flow in 2006. While expenses have edged upward, management has continued to hold expense growth well below industry peers. Ongoing operations remain far from supporting debt service with an average debt service coverage rate of 20%. -- Challenging student market position with net tuition revenue falling 1.2% in fiscal year 2006 to $37.8 million and coming in 3.6% below budgeted projections. Sluggishness in the technology education sector continues as net tuition on a per student basis fell 7% in fiscal year 2006 to $15,421, indicating increased discounting. -- While total financial resources remain high at $119 million, liquid resources remain thin. As of June 30, 2006 the University's financial statements reported cash and securities in the unrestricted quasi endowment of approximately $17.4 million. -- Debt structure includes fully-drawn $5 million JPMorgan line of credit which enjoys secured interest in certain investments superior to long-term bondholders. The University uses the line to manage its cash flow and currently has drawn under $2 million on the line. Outlook: The negative outlook is based on Moody's expectations of ongoing cash flow deficits, challenging student market environment and limited liquid resources. What Could Change the Rating -- up Growth in the University's liquid financial resources, combined with improved operating performance, and student market position strengthening. What Could Change the Rating -- down Further decline in liquidity and deepening of unrestricted activity deficits. Key data and ratios: -- FTE Enrollment: 2,591 -- Selectivity: 72.5% -- Matriculation: 41.6% -- Net tuition per student: $15,421 -- Total financial resources: $119 million -- Total direct debt: $94.9 million -- Expendable financial resources to direct debt: -0.13x -- Expendable financial resources to unrestricted expenses: - 0.08x -- Average three-year operating margin: -17.2% -- FY 2006 operating margin without gifts: -32.8% Rated debt: -- Series 2000 Civic Facility Revenue Bonds: B1 PROPEX INC: S&P Holds Ratings and Revises Outlook to Negative ------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Propex Inc. to negative from stable. At the same time, Standard & Poor's affirmed all ratings on the company, including the 'B+' corporate credit rating. "The outlook revision reflects our expectation that difficult operating conditions, including lower residential construction activity, could reduce demand for Propex's products and hinder its efforts to improve the financial profile to a level consistent with the current ratings," said Standard & Poor's credit analyst David Bird. The ratings on Propex Inc. reflect the company's vulnerable business position as a niche producer of primary and secondary carpet backing and geosynthetic and industrial fibers for mature and competitive end markets, and a highly leveraged financial profile. Austell, Georgia-based Propex is a leading producer of polypropylene fabrics and fibers used in primary and secondary carpet backing, geosynthetic and industrial applications, and concrete fiber reinforcement, with about $800 million in annual sales and $468 million of total debt outstanding (adjusted for approximately $5 million of capitalized operating leases, $36 million of unfunded postretirement obligations, after tax, and $28 million of 10% payment in kind preferred stock due in 2013). Sufficient liquidity, relatively low capital requirements, and a manageable maturity profile during the next several years add some support to credit quality, particularly if business conditions begin to stabilize. However, the ratings could be lowered during the next year if profitability and cash flow deteriorate because of demand weakness caused by declining construction activity, an acceleration of the decline in carpet market share as a percentage of overall floor covering sales, or further increases in competition from foreign imports. QWEST COMMS: Improved Leverage Prompts S&P to Upgrade Ratings ------------------------------------------------------------- Standard & Poor's Ratings Services raised the corporate credit ratings on Denver, Colorado-based telecommunications carrier Qwest Communications International Inc. and incumbent local exchange carrier subsidiary Qwest Corp. to 'BB' from 'BB-', and affirmed the short-term credit rating on Qwest Communications at 'B-1'. The outlook is stable. At the same time, S&P raised the rating on Qwest Communications' senior secured $850 million revolving credit facility to 'BB+' from 'BB'. The 'BB+' rating, one notch above the corporate credit rating, and the recovery rating of '1' indicate expectation of full recovery of principal in the event of a payment default. S&P also raised the unsecured debt ratings, to 'B+' from 'B' at Qwest Communications and to 'BB+' from 'BB' at Qwest Corp. At Sept. 30, 2006, the company had total debt outstanding of about $14.9 billion. "The upgrade reflects Qwest's ongoing success in improving its leverage levels over the past few years," said Standard & Poor's credit analyst Catherine Cosentino. "This is primarily the result of an improving cost structure at the long-distance business." The ratings on Qwest reflect the company's weak overall business position and aggressive financial profile. Qwest is the dominant local telephone exchange carrier in its 14-state market, representing some 14 million access lines. S&P views the local exchange business as having a low investment-grade business risk profile; however, Qwest's long-haul communications business significantly dilutes its overall business position. Several risks are common to Qwest and other large telephone companies: increasing competition from cable TV companies offering cable modem services, and, increasingly, cable telephony and the continuing loss of access lines through wireless substitution. RANGE RESOURCES: Moody’s Holds Ratings & Says Outlook is Positive ----------------------------------------------------------------- Moody's Investors Service confirmed the ratings for Range Resources Corp. but changed the outlook to positive. The confirmed ratings are Range's Ba3 corporate family rating, the Ba3 probability of default rating, and the B1 and LGD5, 76% ratings on the senior subordinated notes. This action concludes Moody's review of Range's ratings for possible upgrade. The Ba3 corporate family rating reflects the company's full leverage on its proven developed reserves which is higher than expected at the time the ratings were initially placed on review for possible upgrade on May 12, 2006 and is actually higher than the average for the Ba3 rated E&P peers. The Ba3 also reflects the company's aggressive drilling program that could utilize additional debt and possibly delay sustained leverage reduction and also anticipates that Range will likely remain acquisitive and leaves sufficient flexibility to accommodate potential acquisitions funded with debt. The Ba3 also considers Range's current scale which is still well below the average for the higher rated peers. The positive outlook reflects Range's continued progress in its operating and capital productivity measures which are in line with the higher rated E&P peers. The company has reported 15 consecutive quarters of production increases while maintaining a very competitive cost structure of approximately $23.94/boe for Q3'06 which ranks among the best for all rated E&P companies and a leveraged full cycle ratio of approximately 257% which compared favorably to the Ba3 rated peers. While Moody's acknowledges Range's track record of sequential quarterly production gains and its very competitive cost structure, the company has also significantly increased leverage on its PD reserves from about $4.14/boe at FYE Dec. 31, 2005 to approximately $6.06/boe at Sept. 30, 2006, which has thus far prevented the company from completing its transition firmly into a Ba2 profile. An upgrade to Ba2 would be considered upon the completion of the pending asset sales and that debt and leverage on the PD reserve base is trending towards the $5.00/boe range especially as it pursues an aggressive drilling program into 2007. A Ba2 rating could also be achieved if Range completes an amply equity funded acquisition that materially increases the company's scale and its presence within its core areas while not raising leverage on the PD reserves from current levels. Moody's notes that even acquisitions funded with 50% equity and debt could still be a leveraging acquisition if it brings less than 50% of PD reserves, contains a low proportion of production, a high level of proven developed non producing mix, or contains a high amount of proven undeveloped reserves, probable and possible reserves with attendant heavy drilling and capital needs. As result, some acquisitions may need to more than 50% common equity funded in order to prevent further leveraging. An upgrade to Ba2 would also require that Moody's routine review of FYE 2006 results indicate that Range's capital productivity and cost trends remain competitive and Range is sustaining those trends into 2007 while the sequential quarterly production trends are still trending upward as they have over the past 15 quarters. Moving the outlook back to stable would be driven by leverage sustained at current levels or higher, weaker than expected results from the 2006 capital spending program, or a reversal of the company's positive production trends. Range Resources Corporation is headquartered in Fort Worth, Texas, and is engaged in the exploration, development and acquisition of oil and gas properties, primarily in the Southwestern, Appalachian and Gulf Coast regions of the United States. ROBECO CDO: Moody's Puts Notes’ Rating on Watch and May Downgrade ----------------------------------------------------------------- Moody's Investors Service placed notes issued by Robeco CDO II Limited on watch for possible downgrade: * The $22,000,000 Class B-2 Notes Due 2013 -- Prior Rating: Ba2 -- Current Rating: Ba2 The rating action is the result of deterioration in the credit quality of the transaction's underlying collateral pool. As of the November 2006 trustee report, the concentration of securities with Moody's Rating of Caa1 or lower is 16.9%. SABRE HOLDINGS: Likely Debt Increase Cues S&P to Lower Ratings -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on Sabre Holdings Corp., including its corporate credit rating to 'BB' from 'BBB'. Ratings remain on CreditWatch with negative implications, where they were placed on Dec. 12, 2006, following Sabre's announcement that it has signed a definitive agreement to be acquired by Silver Lake Partners and Texas Pacific Group for $5 billion, including the assumption of approximately $550 million of net debt. The closing of the transaction is expected to occur by early in the second quarter of 2007, and it is anticipated that Sabre's 2011 and 2016 notes will remain outstanding. "The downgrade is based on our conclusion that the acquisition is not only likely to increase Sabre's balance sheet debt but also to reduce its financial flexibility," said Standard & Poor's credit analyst Betsy Snyder. "As we have the opportunity to review the proposed capital structure, which has yet to be determined, ratings could be further lowered, potentially into the 'B' category," she continued. Ratings on the unsecured notes are lowered further due to the likelihood that a substantial level of priority debt will be placed ahead of the unsecured notes in the company's new capital structure. SAINT VINCENTS: Rep. Wants Full Disclosure on Bayonne's Finances ---------------------------------------------------------------- Rep. Vito Fossella of the 13th District of New York called for a full disclosure of Bayonne Medical Center's finances after learning that Bayonne ended the year with a $10,000,000 deficit, Lisa Schneider of Staten Island Advance reports. Mr. Fossella also wants proof that Bayonne's debt won't affect its acquisition of St. Vincent's Hospital in West Brighton. "My concern is the viability of St. Vincent's," Mr. Fossella told the Advance. Robert Evans, Bayonne's CEO who resigned in November, had previously declared the hospital to be fiscally sound. James Molinaro, Borough President of Staten Island, related that he received assurance that there was no risk but declined to give specifics. When asked about the $10,000,000 million amount, Ms. Schneider reports Mr. Molinaro as saying Bayonne's debt is nothing as alarming as the figure given. Paul Swibinski, Bayonne spokesman, declined to reveal how much money the hospital needs to break even this year, Ms. Schneider relates. The Advance quotes Mr. Swibinski as saying that while Bayonne appreciates Mr. Fossella's concerns, "It has been clear from the start that this transaction is based on projected revenues of St. Vincent's, and not any Bayonne Medical Center funding." He said both hospitals' finances would be kept separate. Mr. Fossella adds that he hopes the deal pushes through but wants adequate information throughout the process. City Councilman Michael McMahon of North Shore of Staten Island said the acquisition must to go through for St. Vincent's to move out of a limbo-like state and enter a period of rejuvenation and success. "The fact that a hospital has an operating deficit for one year is upsetting only if there is felonious conduct there," he said. "It's not, unfortunately, out of the ordinary." Private Financing Bayonne, to pay its vendors and service providers, has been seeking private financing. Bayonne chairman Herman Brockman has asked the New Jersey State Health Department for an advance on its charity care payment for next year, amounting to roughly $3,900,000, the Advance reports. Mr. Brockman explained that Bayonne experienced a 10% drop in patient volume resulting in a patient revenue reduction of more than $12,000,000 annually. The Advance discloses that in response, the NJ Health Department requested a "brief justification" for the advance, including "cashflow statements for the last three months" and financial plans for the future. Headquartered in New York, New York, Saint Vincents Catholic Medical Centers of New York -- http://www.svcmc.org/-- the largest Catholic healthcare providers in New York State, operate hospitals, health centers, nursing homes and a home health agency. The hospital group consists of seven hospitals located throughout Brooklyn, Queens, Manhattan, and Staten Island, along with four nursing homes and a home health care agency. The Company and six of its affiliates filed for chapter 11 protection on July 5, 2005 (Bankr. S.D.N.Y. Case No. 05-14945 through 05-14951). Gary Ravert, Esq., and Stephen B. Selbst, Esq., at McDermott Will & Emery, LLP, filed the Debtors' chapter 11 cases. On Sept. 12, 2005, John J. Rapisardi, Esq., at Weil, Gotshal & Manges LLP took over representing the Debtors in their restructuring efforts. Martin G. Bunin, Esq., at Thelen Reid & Priest LLP, represents the Official Committee of Unsecured Creditors. As of Apr. 30, 2005, the Debtors listed $972 million in total assets and $1 billion in total debts. (Saint Vincent Bankruptcy News, Issue No. 42 Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) SAINT VINCENTS: Judge Hardin Okays Bid Procedures for Asset Sale ---------------------------------------------------------------- The Honorable Adlai S. Hardin, Jr., of the U.S. Bankruptcy Court for the Southern District of New York has approved the Bidding Procedures related to the proposed sale of Saint Vincents Catholic Medical Centers of New York and its debtor-affiliates' real property in Brooklyn. The Sale Hearing will be held on Feb. 5, 2007 Pursuant to the planned sale, the Debtors have entered into a contract of sale with New Prospect Holding Corporation dated Dec. 12, 2006. Prospect Holding has been selected as the "stalking horse" for the purposes of the bidding process and auction for the Properties. The Debtors agreed to sell certain real property located at 1482 Prospect Place, Brooklyn, New York, Block 1368, Lot 16 and 1496-1522 Prospect Place, Brooklyn, New York, Block 1368, Lots 22, 23, 24, 25, 26, 27 and 28 to Prospect Holding subject to higher and better offers received through a bidding process and auction. Andrew M. Troop, Esq., at Weil, Gotshal & Manges LLP, in New York, relates that the Properties are vacant lots near the former St. Mary's Hospital, which was closed during the Debtors' Chapter 11 cases. The Debtors have received authority to sell much of the real estate on which that hospital had operated to The Backer Group LLC, which sale is expected to close in the coming weeks. Because the Properties were not included in the St. Mary's sale, and the Debtors have no continued use for the Properties, they are disposing of the Properties through a separate sale. The Debtors engaged Massey Knakal Realty Services to assist in locating likely buyers for the Properties beginning in June 2005. Massey Knakal fielded offers for 1496-1522 Prospect Place from 12 potential purchasers. Prospect Holding's offer of $2,400,000 was the highest "as is" offer for that property. Prospect Holding also expressed an interest in other properties surrounding St. Mary's, including 1482 Prospect Place, for which nine bids were received. Prospect Holding submitted a bid of $230,000 for 1482 Prospect Place, which was equal to the highest bid received at that time for that property, and offered a larger deposit than the other bidders had offered. The Debtors decided to sell both properties to Prospect Holding as part of a single transaction. Following negotiations, Saint Vincent Catholic Medical Centers entered into the Purchase Agreement with Prospect Holding. The Purchase Agreement The Purchase Agreement contemplates that SVCMC will sell and Prospect Holding will purchase the Properties for the purchase price of $2,630,000, which will be paid in this manner: (i) upon execution of the Purchase Agreement, Prospect Holding paid a $131,500 initial downpayment to SVCMC; (ii) upon its receipt of written notice from SVCMC that all the required approvals have been obtained, Prospect Holding will immediately pay to SVCMC a $131,500 supplemental downpayment; and (iii) at the closing of title to the Properties, Prospect Holding will pay the remaining $2,367,000 to SVCMC. SVCMC and Prospect Holding agree that apportionments will be made between the parties at the Closing, including apportionment of real estate taxes to the extent applicable. The Properties are to be sold and purchased subject to certain permitted exceptions, which will not constitute grounds for objection by Prospect Holding to the Closing, and SVCMC will have no obligation to remove any of the Permitted Exceptions as a condition to Prospect Holding's obligation to purchase the Properties in accordance with the Purchase Agreement. The Debtors are requesting that the Properties be sold free of transfer and similar taxes under Section 1146(c) of the Bankruptcy Code. In the event that any taxes are payable by reason of the Sale of the Properties, the taxes will be paid by SVCMC. In the event a transaction with a different qualified bidder is consummated, Prospect Holding will be entitled to a $70,000 break-up fee and reimbursement of certain de minimis expenses related to title examination and preparation of a survey. A full-text copy of the Purchase Agreement is available for free at http://researcharchives.com/t/s?1790 The Proposed Bidding Procedures and Auction The Debtors propose to hold an Auction on Feb. 1, 2007, at 10:00 a.m. at the office of Weil, Gotshal & Manges LLP in New York, or at a later time or other place as determined by the Debtors. The Auction will only be held if one or more qualified bids of sufficient value are received before 4:00 p.m. on Jan. 26, 2007. To participate in the bidding process, a bidder must deliver to the Debtors a written non-binding expression of interest and a qualified bid. A bid for the Properties is a Qualified Bid if it is submitted to the proper parties prior to the Bid Deadline and satisfies the requirements set forth in the Bidding Procedures. At the Auction, and subject to the Bidding Procedures, all Qualified Bidders will be allowed to bid for the Properties. The Debtors will determine the highest or best bid or bids for the Properties with the goal of maximizing the total value to the Debtors' estates. In evaluating competing bids, the Debtors intend to consider, among others, the amount and type of consideration offered, the changes to the Purchase Agreement required by the competing bid, the bidder's ability to finance and timely consummate the transaction completed by the bid, and the bidder's ability to use the Properties in a manner consistent with the Debtors' mission. The minimum initial overbid at the Auction must be, in the aggregate, at least $25,000 greater than the starting auction bid, and subsequent bids must be, in the aggregate, at least $25,000 greater than the prior bid. The Debtors will advise all participants in the Auction as to their determination of the highest or best bid currently offered. The Debtors may adopt other rules for the Auction that will promote the goals of the Auction. At the conclusion of the Auction, the Debtors will select a bid as the highest or best for the Properties. The Qualified Bidder submitting the Successful Bid will be the Successful Bidder. The Debtors will also select an alternate bid, which will become the Successful Bid should the Successful Bidder fail to close the transaction contemplated by the Successful Bid. At the Sale Hearing, the Debtors will seek approval of the sale of the Properties to Prospect Holding or to the Successful Bidder at the Auction, as appropriate. The Debtors propose that any objections to the Sale Motion will be filed with the Court no later than February 2, 2007. The failure of any person or entity to timely file an objection will be a bar to the assertion of that objection. A full-text copy of the Bidding Procedures is available for free at http://researcharchives.com/t/s?1791 Sale Should Be Approved Mr. Troop tells Judge Hardin that the request should be granted because, among other things: * the Bidding Procedures will ensure that the Debtors' estates receive the greatest benefit available from the sale of the Properties; * the Break-Up Fee is the product of good faith, arm's-length negotiations between the Debtors and Prospect Holding, is fair and reasonable in proportion to the time, effort, cost, and expense that Prospect Holding has incurred in negotiating the Purchase Agreement, and is proportionate to the aggregate consideration to be paid to the Debtors under the Purchase Agreement; * the Debtors will serve copies of the Bidding Procedures, the Bidding Procedures Order, and the notice of Auction and Sale Hearing on the notice parties, which will provide the parties with the requisite 20 days' notice of the Auction and Sale Hearing and satisfy the requirements of Rule 6004 of the Federal Rules of Bankruptcy Procedure; * the Purchase Agreement was the product of an extensive marketing campaign undertaken by the Debtors and Massey Knakal, and good faith, arm's-length negotiations with Prospect Holding; and * the terms of the Purchase Agreement comply with all applicable not-for-profit laws, including the not-for-profit laws of the State of New York, and applicable federal law, thus satisfying the requirements of Section 363(d) of the Bankruptcy Code. The only lien on the Properties that the Debtors are aware of is that held by their postpetition lenders, General Electric Capital Corporation, which lien attaches to substantially all of the Debtors' property pursuant to secured debtor-in-possession financing order entered on November 15, 2005. Prior to closing on the Sale, SVCMC will receive consent from GE Capital to sell the Properties free and clear of its lien, and to use the proceeds of the Sale to pay down the term loan portion of the financing provided by GE Capital. In addition, because any holder of alien, claim, encumbrance or interest in the Property which is not included in the Permitted Exceptions could be compelled to accept money in satisfaction of that interest, the Court may authorize the sale "free and clear" pursuant to Section 363(f)(5). The parties are ready to close the Sale promptly upon the entry of the Sale Order, and no known party has an interest in the Properties other than GE Capital. As no party will be prejudiced by waiver of the automatic stay period, the Debtors ask the Court to waive the stay imposed by Bankruptcy Rule 6004(h). Headquartered in New York, New York, Saint Vincents Catholic Medical Centers of New York -- http://www.svcmc.org/-- the largest Catholic healthcare providers in New York State, operate hospitals, health centers, nursing homes and a home health agency. The hospital group consists of seven hospitals located throughout Brooklyn, Queens, Manhattan, and Staten Island, along with four nursing homes and a home health care agency. The Company and six of its affiliates filed for chapter 11 protection on July 5, 2005 (Bankr. S.D.N.Y. Case No. 05-14945 through 05-14951). Gary Ravert, Esq., and Stephen B. Selbst, Esq., at McDermott Will & Emery, LLP, filed the Debtors' chapter 11 cases. On Sept. 12, 2005, John J. Rapisardi, Esq., at Weil, Gotshal & Manges LLP took over representing the Debtors in their restructuring efforts. Martin G. Bunin, Esq., at Thelen Reid & Priest LLP, represents the Official Committee of Unsecured Creditors. As of Apr. 30, 2005, the Debtors listed $972 million in total assets and $1 billion in total debts. (Saint Vincent Bankruptcy News, Issue No. 42 Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) SALLY HOLDINGS: Revenue Decline Prompts S&P's Stable Outlook ------------------------------------------------------------ Standard & Poor's Ratings Services revised its outlook on Denton, Texas-based Sally Holdings LLC to stable from positive. The revision follows the company's announcement that it expects a $110 million decline in consolidated revenue for the remaining nine months of the 2007 fiscal year. The 'B' corporate credit rating on the company was affirmed. "We expect the lost revenue and associated EBITDA will lead to leverage levels that will not decline as quickly as originally projected," said Standard & Poor's credit analyst Jackie Oberoi. Sally Holdings' expected revenue decline is due to the Beauty System Group's loss of distribution rights for L'Oreal USA's professional products by its distributor sales consultants; loss of L'Oreal professional products exclusive distribution rights for BSG stores; and loss of Redken professional products distribution rights for BSG's Armstrong McCall division. SANMINA SCI: Delayed SEC Filing Prompts Moody's to Review Ratings ----------------------------------------------------------------- Moody's downgraded Sanmina SCI Corporation's corporate family rating to Ba3 from Ba2 while placing all of its outstanding ratings under review for further possible downgrade. The downgrade was based on the company's continued weak fundamentals and lackluster financial performance. The review for further possible downgrade reflects Moody's concern over potential liquidity as a result of Sanmina's inability to file its 2006 10K. Sanmina reported recently that it would not be able to file with the Securities and Exchange Commission its fiscal 2006 10K by the required deadline as a result of the on-going investigation into its stock option administration practices. The delay in filing the 10K may have caused Sanmina to breach a financial covenant in its bond indenture requiring it to file financial statements in a timely manner and could place Sanmina in a technical default under this covenant. Sanmina's business model appears to be in transition as the company searches for a more sustainable and profitable model. Meanwhile, profitability and cash flow measures are weak with negative free cash flow generation for each of the past three quarters. Increasing working capital, especially inventory, hampered Sanmina's cash flow generations. Credit metrics have weakened as a result of overall financial performance, and are not consistent with its previous ratings category. Sanmina's ratings will continue to be on review for possible downgrade. This is due to Moody's concerns over potential liquidity uncertainty presented by Sanmina's delayed filing of its 10K. Sanmina's debt ratings were previously placed under review for possible downgrade on Aug. 14, 2006 following Sanmina's previous announcement of delay of its filing of its 10-Q for the quarter ended July 1, 2006. Sanmina subsequently obtained consent waivers from all of its debt holders granting additional time to file its third quarter 10Q, which was filed last week, within the consent period. However, its inability of filing the annual 10K has once again placed Sanmina in technical default with its creditors. And Moody's understands that there is currently no consent waiver being sought from its creditors by Sanmina. Sanmina currently has about $500 million in cash and equivalents as of Sept. 30, 2006 and it also has full access to a revolving credit facility of $500 million. The company's total debt is about $1.6 billion with the next immediate maturity falling in 2008. Sanmina concluded its internal investigation of its stock options practices and determined that most stock option grants to executives and employees between 1997 and 2006 were not correctly dated. The cumulative pre-tax incremental stock compensation expense recognized by Sanmina is approximately $224 million for the fiscal period of 1997 through 2005. The cash impact as a result of additional payable related to payroll taxes associated with the stock option grants was about $3.6 million for the same period. Sanmina cited a general systemic failure as the cause for options dating mistakes and plans to implement a number of changes to improve internal control and accuracy of financial accounting. Moody's could move the ratings down further if Sanmina is not able to file its 10K by the end of the 30 day cure period per its bond indentures, or has not arranged sufficient alternative liquidity sources to refinance the existing debt by that date. Other drivers which may cause further downgrade are if further concerns regarding weakness in internal control, disclosure, accounting controls were to emerge. Moody's could conclude the review for possible downgrade and would most likely confirm Sanmina's ratings with a stable outlook if the company is able to file its 10K within the cure period or able to arrange sufficient alternative liquidity to fund any necessary refinancing of its debt. Ratings downgraded and under review for further downgrade: -- Corporate family rating Ba3 from Ba2; -- Probability-of-default rating at Ba3; -- $400 million senior subordinated notes due 2013 at B2, LGD5, 85% from Ba3; -- $600 million senior subordinated notes due 2016 at B2, LGD5, 85% from Ba3; -- $600 million senior unsecured term loan due 2008 at Ba3 LGD3, 45% from Ba2; and, -- SGL-1 speculative grade liquidity rating. Headquartered in San Jose, California, Sanmina-SCI Corporation is one of the largest electronics contract manufacturing services companies providing a full spectrum of integrated, value added solutions. SAVVIS INC: To Sell Content Delivery Network to Level 3 for $135MM ------------------------------------------------------------------ Level 3 Communications, Inc., signed a definitive agreement to acquire the Content Delivery Network services business of SAVVIS, Inc. Under the terms of the agreement, Level 3 will pay $135 million in cash consideration to acquire certain assets, including network elements, customer contracts, and intellectual property used in SAVVIS’s CDN business. The purchase price is subject to certain customary post closing working capital adjustments. "The acquisition of SAVVIS’s CDN services business will enable Level 3 to better address the increasing opportunity presented by rich media applications such as video, Web 2.0 applications, multiplayer online gaming and software as a service over the Internet," said Kevin O’Hara, president and chief operating officer of Level 3. "We are looking forward to welcoming the pioneers of CDN to our team. The largest customers of CDN services rely on a combination of capabilities to support their businesses. These include services like CDN, IP transit, wavelengths, metro transport, and colocation. Upon completion of this transaction, Level 3 believes that it will be the only CDN services provider with a single source, full portfolio of end-to-end content distribution solutions, and will be in a unique position to offer a range of building blocks to meet these customers’ needs. "Level 3 already has a strong brand and capabilities in video distribution through its Vyvx business. With native CDN capabilities and with Level 3’s highly scalable, industry-leading IP backbone, we believe that Level 3 will be able to bring additional value to all video-centric companies by delivering video in a more intelligent and comprehensive way to a broader range of destinations. "This acquisition does not require the type of physical integration associated with the metro and backbone transactions we announced earlier this year. We are confident in our ability to incorporate this key capability into our portfolio." SAVVIS’s content delivery customers include some of the largest enterprises in the world, including Microsoft. "As we grow our online services business, stability and control over our network infrastructure becomes increasingly important to deliver great experiences for our customers, partners and advertisers," said Arne Josefsberg, general manager of Global Foundation Services at Microsoft. "We look forward to a continued relationship with Level 3 as they embark upon this next phase of their network evolution." SAVVIS’s CDN business had approximately $15 million in revenue for the nine months ending Sept. 30, 2006. Closing is subject to customary conditions, including receipt of Hart-Scott-Rodino approval. Closing is expected to occur in the first quarter of 2007. About Level 3 Communications Headquartered in Broomfield, Colorado, Level 3 Communications, Inc. (NASDAQ: LVLT) is a communications and information services company. The company operates a large communications and Internet backbone, making it a Tier 1 network. Level 3 is the current owner of AS1. About SAVVIS Inc. Headquartered in Town & Country, Missouri, SAVVIS, Inc. (NASDAQ: SVVS) -- http://www.savvis.net/-- provides managed and outsourced IT services that focuses exclusively on IT solutions for businesses. With an IT services platform that extends to 47 countries, SAVVIS has over 5,000 enterprise customers and leads the industry in delivering secure, reliable, and scalable hosting, network, and application services. These solutions enable customers to focus on their core business while SAVVIS ensures the quality of their IT systems and operations. SAVVIS' strategic approach combines virtualization technology, a global network and 25 data centers, and automated management and provisioning systems. SAVVIS’s CDN services business, based in Thousand Oaks, California, with approximately 50 employees and over 100 customers, provides solutions that improve performance, reliability, scalability and reach of customers’ online content. Initially developed in 1996 as Sandpiper Networks, the division developed, deployed and operated a content delivery network. It has a globally distributed infrastructure in more than 20 countries. At Sept. 30, 2006, SAVVIS Inc.'s balance sheet showed a stockholders' deficit of $141,675,000, as compared to a deficit of $132,009,000 at Dec. 31, 2005. SENSATA TECH: Completes Purchase of Honeywell's FTAS Business ------------------------------------------------------------- Sensata Technologies B.V. has closed the acquisition of Honeywell's First Technology Automotive and Special Products or FTAS business. Concurrently, Sensata completed a EUR73 million financing in support of the transaction through an incremental facility under its existing Credit Agreement. Terms were in line with the original issuance. FTAS designs, develops and manufactures high-value automotive sensor and electromechanical control solutions. Its products are sold to automotive OEMs, Tier I automotive suppliers, large vehicle and off-road OEMs, and industrial manufacturers. For the year ended Dec. 31, 2005, FTAS had sales of approximately US$69 million. "We are pleased to have completed the divestiture of both non- core First Technology businesses in 2006," said Dave Cote, Honeywell Chairman and CEO. "With the sale of FTAS today and First Technology Safety and Analysis earlier this year, we have finalized acquisition of the First Technology Gas Sensing business at an attractive valuation in an industry with great growth prospects. We continue to execute on integrating the business into Honeywell Analytics and establishing our position as a world leader in gas detection technologies." FTAS was acquired by Honeywell as part of its acquisition of First Technology plc earlier this year. Honeywell completed its acquisition of First Technology plc on March 24, and the sale of First Technology Safety and Analysis on May 19. Formerly the Sensors & Controls business of Texas Instruments, Sensata Technologies was acquired by Bain Capital, LLC, a leading global private investment firm, in April, 2006. Sensata is a leading designer and manufacturer of sensors and controls for global leaders in the automotive, appliance, aircraft, industrial and HVAC markets. It has nine technology and manufacturing centers in eight countries, and sales offices throughout the world. Revenues for 2005 were approximately $1.1 billion. About Honeywell Honeywell International is a $31 billion diversified technology and manufacturing leader, serving customers worldwide with aerospace products and services; control technologies for buildings, homes and industry; automotive products; turbochargers; and specialty materials. Based in Morris Township, N.J., Honeywell's shares are traded on the New York, London, Chicago and Pacific Stock Exchanges. About Sensata Technologies Headquartered in Attleboro, Massachusetts, Sensata Technologies B.V. -- http://www.sensata.com/-- designs and manufactures sensors and controls across a range of markets and applications. Sensata has business and technology development centers in Attleboro, Massachusetts, Holland and Japan and manufacturing operations in Brazil, China, Korea, Malaysia, and Mexico, as well as sales offices around the world. Sensata Technologies employs approximately 5,400 people world-wide. * * * As reported in the Troubled Company Reporter on Dec. 11, 2006, Moody's Investors Service affirmed Sensata Technologies B.V.'s B2 corporate family and probability of default ratings. Moody's rating affirmation pertains to Sensata's pending acquisition of First Technology Automotive and Special Products from Honeywell and its subsequent financing via a $95 million add- on to Sensata's existing senior secured Term Loan B. The rating outlook remains stable. SPECIALTY UNDERWRITING: S&P Downgrades Ratings on Two Classes ------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on two classes from two Specialty Underwriting and Residential Finance Trust transactions and placed them on CreditWatch with negative implications. Concurrently, the rating on one additional class was placed on CreditWatch with negative implications. At the same time, ratings were affirmed on the remaining classes from these transactions and from various other series from the same issuer. The downgrades reflect actual and projected credit support percentages that are insufficient to maintain the previous ratings. Class B-2 from series 2003-BC2 has a current credit support level of 5.74%, down from 10% at issuance; class B-3 from series 2003-BC3 has a current credit support level of 4.15%, down from 8% at issuance. The three ratings are placed on CreditWatch negative because S&P expects additional projected losses to result from high delinquencies. As of the November 2006 distribution date, total delinquencies for series 2003-BC2 were 39.54%, with 23.43% categorized as seriously delinquent (90-plus days, foreclosure, and REO); total delinquencies for series 2003-BC3 were 35.21%, with 22.44% categorized as seriously delinquent. Standard & Poor's will continue to closely monitor the performance of these transactions. If the delinquent loans translate into realized losses, S&P may take additional negative rating actions on these classes, depending on the size of the losses and the remaining credit support. Conversely, if the delinquent loans decrease and do not cause significant additional realized losses, S&P will affirm the ratings and remove them from CreditWatch. Ratings Lowered and Placed on Creditwatch Negative Specialty Underwriting and Residential Finance Trust Rating ------ Series Class To From ------ ----- -- ---- 2003-BC2 B-2 BB-/Watch Neg BBB 2003-BC3 B-3 BB-/Watch Neg BBB- Rating Placed on Creditwatch Negative Specialty Underwriting and Residential Finance Trust Rating ------ Series Class To From ------ ----- -- ---- 2003-BC2 B-1 A/Watch Neg A Ratings Affirmed Specialty Underwriting and Residential Finance Trust Series Class Rating ------ ----- ------ 2003-BC2 A, S, R, M-1 AAA 2003-BC2 M-2 AA 2003-BC2 M-3 A 2003-BC3 A, S, R AAA 2003-BC3 B-1 BBB+ 2003-BC3 B-2 BBB 2003-BC4 A-1, A-2, A-3B AAA 2003-BC4 M-1 AA+ 2003-BC4 M-2 A 2003-BC4 M-3 A- 2003-BC4 B-1 BBB+ 2003-BC4 B-2 BBB 2003-BC4 B-3 BBB- 2004-AA1 I-A-1, II-A-1, II-A-2, II-A3, I-PO AAA 2004-AA1 II-PO, I-IO, II-IO AAA 2004-AA1 B-1 AA 2004-AA1 B-2 A 2004-AA1 B-3 BBB 2004-AA1 B-4 BB 2004-AA1 B-5 B 2004-BC1 A-1A, A-1B, A-2, X AAA 2004-BC1 M-1 AA 2004-BC1 M-2 A 2004-BC1 M-3 A- 2004-BC1 B-1 BBB 2004-BC1 B-2 BBB- 2004-BC2 A-1, A-2 AAA 2004-BC2 M-1 AA 2004-BC2 M-2 A 2004-BC2 M-3 A- 2004-BC2 B-1 BBB 2004-BC2 B-2 BBB- 2004-BC3 A-1A, A-1B, A-2A, A-2B, A-2C AAA 2004-BC3 M-1 AA+ 2004-BC3 M-2 AA- 2004-BC3 M-3 A+ 2004-BC3 B-1 A- 2004-BC3 B-2, B-3 BBB 2004-BC4 A-1A, A-1B, A-2A, A-2B, A-2C AAA 2004-BC4 M-1 AA+ 2004-BC4 M-2 AA 2004-BC4 M-3 AA- 2004-BC4 B-1 A+ 2004-BC4 B-2 A 2004-BC4 B-3 A- 2005-AB1 A-1A, A-1B, A-1C AAA 2005-AB1 M-1 AA+ 2005-AB1 M-2 AA 2005-AB1 M-3 A 2005-AB1 M-4 A- 2005-AB1 B-1 BBB+ 2005-AB1 B-2 BBB- 2005-AB1 B-3 BB 2005-AB2 A-1A, A-1B, A-1C, A-1D, R AAA 2005-AB2 M-1 AA+ 2005-AB2 M-2 AA 2005-AB2 M-3 AA- 2005-AB2 M-4 A+ 2005-AB2 M-5 A 2005-AB2 M-6 A- 2005-AB2 B-1 BBB+ 2005-AB2 B-2 BBB 2005-AB2 B-3 BBB- 2005-AB3 A-1A, A-2A, A-2B, A-2C, R AAA 2005-AB3 M-1 AA+ 2005-AB3 M-2 AA 2005-AB3 M-3 AA- 2005-AB3 M-4 A+ 2005-AB3 M-5 A 2005-AB3 M-6 A- 2005-AB3 B-1 BBB+ 2005-BC1 A-1A, A-1B, A-1C AAA 2005-BC1 M-1 AA+ 2005-BC1 M-2 AA 2005-BC1 M-3 A 2005-BC1 M-4 A- 2005-BC1 B-1 BBB+ 2005-BC1 B-2 BBB 2005-BC1 B-3 BBB- 2005-BC2 A-1A, A-2A, A-2B, A-2C AAA 2005-BC2 M-1 AA+ 2005-BC2 M-2 AA 2005-BC2 M-3 A 2005-BC2 M-4 A- 2005-BC2 B-1 BBB+ 2005-BC2 B-2 BBB 2005-BC2 B-3 BBB- 2005-BC2 B-4 BB+ 2005-BC3 A-1A, A-2B, A-3C, M-1, R AAA 2005-BC3 M-2 AA+ 2005-BC3 M-3 AA 2005-BC3 M-4 AA- 2005-BC3 M-5 A+ 2005-BC3 M-6 A 2005-BC3 M-7 A- 2005-BC3 B-1 BBB+ 2005-BC3 B-2 BBB 2005-BC3 B-3 BBB- 2005-BC3 B-4 BB+ 2005-BC4 A-1A, A-2A, A-2B, A-2C, R AAA 2005-BC4 M-1 AA+ 2005-BC4 M-2 AA 2005-BC4 M-3 AA- 2005-BC4 M-4 A+ 2005-BC4 M-5 A 2005-BC4 M-6 A- 2005-BC4 B-1 BBB+ 2006-AB1 A-1, A-2, A-3, A-4, R AAA 2006-AB1 M-1, M-2, M-3 AA+ 2006-AB1 M-4, M-5, M-6 AA 2006-AB1 B-1 AA- 2006-AB1 B-2 A+ 2006-AB1 B-3 A- 2006-BC1 A-1, A-2A, A-2B, A-2C, A-2D, R AAA 2006-BC1 M-1 AA+ 2006-BC1 M-2, M-3, M-4 AA 2006-BC1 M-5, M-6 A+ 2006-BC1 B-1A, B-1B A 2006-BC1 B-2A, B-2B, B-3A, B-3B BBB+ 2006-BC2 A-1, A-2A, A-2B, A-2C, A-2D, R AAA 2006-BC2 M-1 AA+ 2006-BC2 M-2, M-3, M-4 AA 2006-BC2 M-5 A+ 2006-BC2 M-6 A 2006-BC2 B-1 A- 2006-BC2 B-2 BBB+ 2006-BC2 B-3 BBB- STANFIELD ARBITRAGE: Moody's Cuts Ratings on $32 Mil. Notes to Ba3 ------------------------------------------------------------------ Moody's Investors Service upgraded the ratings on the notes issued in 2001 by Stanfield Arbitrage CDO, Ltd., a managed high yield structured finance collateralized loan obligation issuer: * The $53,000,000 Class B-1 Floating Rate Notes Due 2016 -- Prior Rating: A3, on watch for possible upgrade -- Current Rating: A1 * The $23,000,000 Class B-2 Fixed Rate Notes Due 2016 -- Prior Rating: A3, on watch for possible upgrade -- Current Rating: A1 Moody's also downgraded the ratings on notes issued Stanfield Arbitrage CDO, Ltd.: * The $9,000,000 Class D-1 Floating Rate Notes Due 2016 -- Prior Rating: Ba2, on watch for possible downgrade -- Current Rating: Ba3 * The $20,000,000 Class D-2 Fixed Rate Notes Due 2016 -- Prior Rating: Ba2, on watch for possible downgrade -- Current Rating: Ba3 * The $3,000,000 Class D-3 Fixed Rate Notes Due 2016 -- Prior Rating: Ba2, on watch for possible downgrade -- Current Rating: Ba3 The rating actions with respect to the Class B notes reflect the delevering of the transaction which more than offset the unfavorable aspects of the transaction's performance discussed below, according to Moody's. As reported in the November 2006 trustee report, the par value ratio for the Class B notes was 114%, well above the transaction's trigger level of 107%, Moody's noted. The rating actions with respect to the Class D notes reflect the occurrence of previous asset defaults and par losses in the bond bucket of the CDO, according to Moody's. Although the delevering of the transaction has more than offset the unfavorable aspects of the transaction's performance with respect to the Class B notes, it has not done so for the Class D notes given the subordination of those notes in the transaction's capital structure. STATER BROS: September 24 Balance Sheet Upside-Down by $11.1 Mil. ----------------------------------------------------------------- Stater Bros. Holdings Inc. reported $26.1 million of net income on $3.5 billion of sales for the year ended Sept. 24, 2006, compared with $26.2 million of net income on $3.4 billion of sales for the year ended Sept. 25, 2005. The sales increase in fiscal 2006 over fiscal 2005 is the result of the opening of new stores during the fiscal year, an increase in like store sales and the contribution from pharmacy sales partially offset by declines in sales for Santee Dairies Inc. Like store sales increased $47.3 million or 1.46% in fiscal 2006. In fiscal 2006, sales for Santee Dairies Inc. decreased $10.1 million, which was attributed to reduced selling prices resulting from a reduction in raw milk pricing and to reduced purchases by the Ralphs Grocery Company. Pharmacy sales increased $16.6 million in fiscal 2006. The company opened three new stores in fiscal 2006. These newly opened stores added approximately $99.3 million of sales in fiscal 2006. While like store sales were positive for fiscal 2006, like store sales were impacted by new store openings. Sales were also impacted by the closure of two stores in fiscal 2006, which decreased sales by approximately $17.5 million when compared to the prior year. At Sept. 24, 2006, the company's balance sheet showed $1.06 billion in total assets and $1.07 billion in total liabilities, resulting in an $11.1 million total stockholders' deficit. Full-text copies of the company's consolidated financial statements for the year ended Sept. 24, 2006, are available for free at http://researcharchives.com/t/s?17ac About Stater Bros. Holdings Based in Colton, California, Stater Brothers Holdings Inc. -- http://www.staterbros.com/-- operates 162 full service supermarkets in the United States. The grocery chain also owns and operates milk and juice processor Santee Dairies aka Heartland Farms. Founded in 1936 by twin brothers Leo and Cleo Stater, Stater Bros. is owned by La Cadena Investments, a general partnership consisting of Stater Bros. chairman and chief executive officer, Jack Brown. * * * As reported in the Troubled Company Reporter on Oct. 24, 2006, Moody's Investors Service affirmed its B1 corporate family rating for Stater Bros. Holdings Inc. and its B1 rating on the company's guaranteed senior unsecured Global Notes. Additionally, Moody's assigned an LGD4 rating to these bonds, suggesting noteholders will experience a 57% loss in the event of default. STEPHEN TURNER: Case Summary & 15 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Stephen Edward Turner P.O. Box 3234 Palm Springs, CA 92263 Bankruptcy Case No.: 06-13841 Chapter 11 Petition Date: December 14, 2006 Court: Central District Of California (Riverside) Judge: Mitchel R. Goldberg Debtor's Counsel: Lazaro E. Fernandez, Esq. 3403 Tenth Street, Suite 714 Riverside, CA 92501 Tel: (951) 684-4474 Estimated Assets: $1 Million to $10 Million Estimated Debts: $10 Million to $50 Million Debtor's 15 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Continental Investment Lawsuit $2,800,000 Property Inc. c/o Gibbs Giden Locher and Turne 2029 Century Park East, 34th Floor Los Angeles, CA 90067-3039 The Feldhake Law Firm Legal Fees $225,000 Robert Feldhake 19900 MacArthur Boulevard Suite 850 Irvine, CA 92612 Anthony Ferrante Lawsuit $200,000 1472 Padva Way Palm Springs, CA 92262 Bank of America Gold Option Credit Line $105,743 P.O. Box 15102 Wilmington, DE 19886-5102 MBNA (BofA) Credit Line $168,245 c/o Chris Hopkins P.O. Box 15102 Wilmington, DE 19886-5102 Business Credit Line $72,571 Sallie Mae Student Loan $93,025 Bank of America Personal Credit Line $53,741 Misc. Purchases $10,236 American Education Service Student Loan $41,768 William Dwyer Personal Loans $37,000 Carvar & Schickotanz Architectural $22,882 Services HFC Installment Loan $13,749 James Hinds, Esq. Legal Services $11,542 Washington Mutual Misc. Purchases $11,213 Casa Dolores Flooring Services-Carmel $4,402 Wood Floors Casa Dolores Gallery Architectural $3,700 Services STEVEN LEE: Case Summary & Six Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Steven Lee 5205 Varnum Street Bladensburg, MD 20710 Bankruptcy Case No.: 06-18250 Chapter 11 Petition Date: December 18, 2006 Court: District of Maryland (Greenbelt) Judge: Thomas J. Catliota Debtor's Counsel: Laura J. Margulies Laura Margulies & Associates, LLC 6205 Executive Boulevard Rockville, MD 20852 Tel: (301) 816-1600 Fax: (301) 816-1611 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's Six Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Chase/Bank One Credit Card Bill $10,493 P.O. Box 15299 Wilmington, DE 19850 Lowe's/GEMB Credit Card Bill $2,345 P.O. Box 103080 Roswell, GA 30076 Home Depot/CBSD Credit Card Bill $2,261 P.O. Box 103072 Roswell, GA 30076 Best Buy/Retail Services Credit Card Bill $1,671 Capital One Bank Credit Card Bill $154 The Good Cook Book Club Credit $85 STRUCTURED ASSET: Moody's Reviews Ratings for Likely Downgrade -------------------------------------------------------------- Moody's Investors Service placed several tranches issued by Structured Asset Investment Loan Trust under review for possible downgrade. These subprime deals consist of fixed and adjustable rate, first and second lien residential mortgage loans. These certificates are under review for possible downgrade based on the current credit enhancement levels when compared to the current projected losses. The projected pipeline losses have rapidly increased due to the large quantity of mortgage loans that are in delinquent, foreclosure, and REO status. As a result, the credit support may be more vulnerable to erosion. These are the rating actions: * Structured Asset Investment Loan Trust, Series 2005-5 -- Class M-7, Currently Rated: Baa1; under review for possible downgrade. -- Class M-8, Currently Rated: Baa2; under review for possible downgrade. -- Class M-9, Currently Rated: Baa3; under review for possible downgrade. -- Class B, Currently Rated: Ba2; under review for possible downgrade. * Structured Asset Investment Loan Trust, Series 2005-8 -- Class M-7, Currently Rated: Baa1; under review for possible downgrade. -- Class M-8, Currently Rated: Baa2; under review for possible downgrade. -- Class M-9, Currently Rated: Baa3; under review for possible downgrade. -- Class B, Currently Rated: Ba2; under review for possible downgrade. * Structured Asset Investment Loan Trust, Series 2005-11 -- Class M-6, Currently Rated: Baa1; under review for possible downgrade. -- Class M-7, Currently Rated: Baa2; under review for possible downgrade. -- Class M-8, Currently Rated: Baa3; under review for possible downgrade. -- Class B-1, Currently Rated: Ba1; under review for possible downgrade. * Structured Asset Investment Loan Trust, Series 2006-1 -- Class M-7, Currently Rated: Baa1; under review for possible downgrade. -- Class M-8, Currently Rated: Baa2; under review for possible downgrade. -- Class M-9, Currently Rated: Baa3; under review for possible downgrade. -- Class B, Currently Rated: Ba1; under review for possible downgrade. * Structured Asset Investment Loan Trust, Series 2006-2 -- Class M-6, Currently Rated: Baa1, under review for possible downgrade. -- Class M-7, Currently Rated: Baa2; under review for possible downgrade. -- Class M-8, Currently Rated: Baa3; under review for possible downgrade. -- Class B-1, Currently Rated: Ba1; under review for possible downgrade. -- Class B-2, Currently Rated: Ba2; under review for possible downgrade. * Structured Asset Investment Loan Trust, Series 2006-BNC1 -- Class M-6, Currently Rated: Baa1; under review for possible downgrade. -- Class M-7, Currently Rated: Baa2; under review for possible downgrade. -- Class M-8, Currently Rated: Baa3; under review for possible downgrade. -- Class B-1, Currently Rated: Ba1; under review for possible downgrade. * Structured Asset Investment Loan Trust, Series 2006-BNC2 -- Class M-6, Currently Rated: Baa1; under review for possible downgrade. -- Class M-7, Currently Rated: Baa2; under review for possible downgrade. -- Class M-8, Currently Rated: Baa3; under review for possible downgrade. -- Class B-1, Currently Rated: Ba1; under review for possible downgrade. -- Class B-2, Currently Rated: Ba2; under review for possible downgrade. STRUCTURED FINANCE: Moody's Removes Watch on Preference Shares -------------------------------------------------------------- Moody's Investors Service downgraded the ratings on the notes issued by Structured Finance Advisors ABS CDO III, Ltd., a structured finance collateralized debt obligation: * The $50,000,000 Class B Second Priority Senior Secured Floating Rate Notes due 2037 -- Prior Rating: Aa1, on watch for possible downgrade -- Current Rating: Aa3 * The $15,000,000 Class C Mezzanine Secured Floating Rate Notes due 2037 -- Prior Rating: Baa2, on watch for possible downgrade -- Current Rating: Baa3 Moody's also removed from watch for possible downgrade the ratings of these notes issued by Structured Finance Advisors ABS CDO III, Ltd.: * The $12,500,000 Preference Shares -- Prior Rating: B3, on watch for possible downgrade -- Current Rating: B3 The rating actions reflect the deterioration in the credit quality of the transaction's underlying collateral portfolio, consisting primarily of structured finance securities, as well as the occurrence of asset defaults and par losses, and the continued failure of certain collateral and structural tests, according to Moody's. TALLSHIPS FUNDING: Moody's Rates $30 Million Class D Notes at Ba1 ----------------------------------------------------------------- Moody's Investors Service assigned ratings to notes issued by Tallships Funding, Ltd., a collateral debt obligation issuance: -- Aaa to $360,000,000 Class A-1 Floating Rate Senior Secured Notes Due 2047 -- Aa2 to $65,000,000 Class A-2 Floating Rate Senior Secured Notes Due 2047 -- A2 to $50,000,000 Class B Floating Rate Subordinate Secured Deferrable Notes Due 2047 -- Baa2 to $37,500,000 Class C Floating Rate Junior Subordinate Secured Deferrable Notes Due 2047 -- Ba1 to $30,000,000 Class D Floating Rate Junior Subordinate Secured Deferrable Notes Due 2047 The Moody's ratings of the notes address the ultimate cash receipt of all required interest and principal payments, as provided by the notes' governing documents, and are based on the expected loss posed to noteholders, relative to the promise of receiving the present value of such payments. Moody's also assigned a rating of Aaa to the $687,500,000 Advance Swap and a rating of Aaa to the $250,000,000 Revolving Credit Agreement. These ratings address the likelihood that, and extent to which, (i) pursuant to the Advance Swap, the Issuer will make repayment of any Draw Amounts and (ii) pursuant to the Revolving Credit Agreement, the Issuer will repay Loans of the Lenders made to the Issuer. The ratings are derived from an analysis of the initial portfolio of cash assets and assets referenced through credit default swaps, and the Transaction's legal structure. Bear Stearns Asset Management Inc. will manage the selection, acquisition and disposition of collateral on behalf of the issuer. TECUMSEH UTILITY: S&P Downgrades Revenue Bonds’ Rating to BB ------------------------------------------------------------ Standard & Poor's Ratings Services lowered its underlying rating on Tecumseh Utility Authority, Oklahoma's utility system refunding and capital improvement revenue bonds series 2004 to 'BB' from 'BBB'. The outlook is negative. The downgrade reflects credit deterioration, which is exacerbated by management's inability to provide information about the authority's operating expenses and pledged sales tax collections for fiscal 2005. Based on information received by Standard & Poor's, S&P believes the authority has breached its rate covenant and is in technical default. The 'BB' rating also reflects weak debt service coverage, a significant drop in unrestricted cash, and inadequate information. A pledge of revenues derived from a three-cent sales tax, subject to annual appropriation, and the prior-lien pledge of net revenues of the water, sewer, and electric utility system secure the bonds. Legal provisions include a rate covenant; the authority has pledged charges for water, sanitary sewer and electric services sufficient, together with appropriated sales tax proceeds, to provide net revenues equal to 1.25x average annual debt service. The coverage calculation differs depending on the source of information. Pledged sales tax collections for fiscal 2005 according to information provided by a city representative totaled $666,393, resulting in coverage of 1.16x average annual debt service. However, according to the 2005 audit, pledged sales tax collections totaled $733,035, resulting in coverage of 1.24x average annual debt service. Pledged sales tax revenues were down in fiscal 2005 compared with 2003, when they totaled about $768,000. Although there is no mention of technical default in the fiscal 2005 audit, based on the information provided to S&P, it appears the rate covenant has been breached, and that the authority is in technical default. The authority's statement of revenues, expenses and changes in fund net assets from the fiscal 2005 audit does not show a depreciation expense. Although the statement of cash flows shows a $174,795 depreciation adjustment, management was unable to tell Standard & Poor's whether that adjustment was included in the total operating expenses. As a result, the above coverage calculations make no adjustments for depreciation. In addition, management advised S&P's that the authority has historically funded capital improvements through operating expenses, but was unable to separate those onetime expenses from the ongoing expenses in fiscal 2005. The Tecumseh Utility Authority operates an electric, water, and sewer utility through a lease with the city of Tecumseh. Management indicated that the authority does not plan to raise rates in the near term and intends to fund its recently adopted five-year capital plan with operating revenues. The authority's liquidity was significantly weaker in fiscal 2005 compared with the previous year, as cash and cash equivalents declined by 30% to $732,000; management was unable to provide a reason for the substantial decline. The authority does not expect to issue additional debt in the near term. UNITEDHEALTH GROUP: Gets Formal SEC Stock-Option Probe ------------------------------------------------------ UnitedHealth Group Inc. received a formal order of investigation from the Securities and Exchange Commission relating to its stock option practices, which led to the departure of former CEO William McGuire, Robert Simison writes for Bloomberg. The company said in a regulatory filing that after notifying UnitedHealth in April 2006 of an informal inquiry, the regulators issued a formal probe. The company will continue to cooperate with the SEC. Bloomberg reports that Mr. McGuire had involuntary resignation last month after an independent query discovered he may have manipulated the dating of options worth hundreds of millions of dollar. Mr. McGuire agreed not to exercise his own options totaling to $1.6 billion, Bloomberg says. According to Bloomberg, the company reported amended financial results in which the restatements, revisions and charges exceed to $7.9 billion. The company had ousted 65 executives and directors due to the scandal and about 300 filed lawsuits against more than 100 companies. The company, which widened its estimate of earnings restatements related to stock options, held that the income from 1994 to 2005 may be reduced by more than $1.5 billion to $1.7 billion to correct improper accounting for options awarded to executives and employees, Bloomberg relates. VENTAS INC: Enhanced Liquidity Cues S&P’s Positive Outlook ---------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Ventas Inc. to positive from stable. At the same time, the 'BB+' corporate credit and senior note ratings were affirmed for Ventas, its operating partnership, Ventas Realty L.P., and Ventas Capital Corp. The rating actions affected roughly $1.5 billion in senior notes. "The positive outlook acknowledges the company's continued efforts to improve its asset quality/mix, healthier facility rent coverage within the Brookdale Senior Living portfolio, enhanced liquidity, and management's commitment to a strong and improving financial profile," said credit analyst George Skoufis. "The ratings continue to be supported by good overall facility level rent coverage, geographic diversity and stable debt service coverage. These strengths are mitigated by higher debt levels and a highly concentrated tenant base." Improvement to the financial profile, specifically lower leverage and stable-to-improving DSC, as well as the prudent pursuit of growth opportunities that diversify the tenant base, if presented, would warrant a one-notch upgrade. The rating and outlook, however, could be negatively affected by aggressive acquisitions and/or debt financed acquisitions that strain the financial profile. VIRGINIA DUPLESSIS: Voluntary Chapter 11 Case Summary ----------------------------------------------------- Debtor: Virginia L. Duplessis Jean Y. Duplessis 30 Isabell Circle Randolph, MA 02368 Bankruptcy Case No.: 06-14747 Type of Business: The Debtors filed for chapter 11 protection on October 23, 2006 (Bankr. D. Mass. Case No. 06- 13821). Chapter 11 Petition Date: December 13, 2006 Court: District of Massachusetts (Boston) Judge: Joan N. Feeney Debtor's Counsel: David G. Baker, Esq. 105 Union Wharf Boston, MA 02109 Tel: (617) 367-4260 Fax: (866) 661-5328 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million The Debtor did not file a list of its 20 largest unsecured creditors. WACHOVIA BANK: Moody's Holds Low-B Ratings on Six Cert. Classes --------------------------------------------------------------- Moody's Investors Service upgraded the ratings of six classes and affirmed the ratings of 12 classes of Wachovia Bank Commercial Mortgage Trust, Commercial Mortgage Pass-Through Certificates, Series 2003-C5: * Class A-1, $186,798,628, Fixed, affirmed at Aaa * Class A-2, $439,721,000, Fixed, affirmed at Aaa * Class A-1A, $250,956,437, Fixed, affirmed at Aaa * Class X-P, Notional, affirmed at Aaa * Class X-C, Notional, affirmed at Aaa * Class B, $40,531,000, Fixed, upgraded to Aaa from Aa2 * Class C, $15,011,000, Fixed, upgraded to Aaa from Aa3 * Class D, $31,524,000, Fixed, upgraded to Aa2 from A2 * Class E, $10,508,000, Fixed, upgraded to Aa3 from A3 * Class F, $16,513,000, WAC, upgraded to A2 from Baa1 * Class G, $19,515,000, WAC, upgraded to Baa1 from Baa2 * Class H, $19,515,000, WAC, affirmed at Baa3 * Class J, $22,517,000, Fixed, affirmed at Ba1 * Class K, $12,009,000, Fixed, affirmed at Ba2 * Class L, $6,005,000, Fixed, affirmed at Ba3 * Class M, $6,004,000, Fixed, affirmed at B1 * Class N, $6,005,000, Fixed, affirmed at B2 * Class O, $4,503,000, Fixed, affirmed at B3 As of the Dec. 15, 2006 distribution date, the transaction's aggregate certificate balance has decreased by approximately 7.4% to $1.1 billion from $1.2 billion at securitization. The Certificates are collateralized by 150 mortgage loans ranging in size from less than 1% to 6% of the pool, with the top 10 loans representing 27.4% of the pool. The pool includes two shadow rated investment grade loans, comprising 8.3% of the outstanding pool balance. Four loans, representing 3.4% of the pool balance, have defeased and are collateralized by U.S. Government securities. There have been no realized losses since securitization. Currently there are two loans in special servicing. Moody's is projecting a $2 million loss for the specially serviced loans. Eighteen loans, representing 8.8% of the pool, are on the master servicer's watchlist. Moody's was provided with year-end 2005 and partial year 2006 operating results for approximately 93% and 40%, respectively, of the pool. Moody's loan to value ratio for the conduit component is 90.2%, compared to 91.6% at securitization. Moody's is upgrading Classes B, C, D, E, F and G due to increased credit support levels and stable overall pool performance. The largest shadow rated loan is the Lloyd Center Loan, which is a parri passu interest in a $133.4 million first mortgage loan. The loan is secured by the borrower's interest in a 1.5 million square foot regional mall located in Portland, Oregon. The center is anchored by Meier and Frank, Sears and Nordstrom. In-line occupancy is 96.3%, compared to 94.6% at securitization. The loan sponsor is Glimcher Realty Trust. Moody's current shadow rating is Baa2, the same as at securitization. The second shadow rated loan is the Columbiana Station Shopping Center Loan, which is secured by a 270,000 square foot retail center located in Columbia, South Carolina. The mall is 97.7% occupied, compared to 94% at securitization and is anchored by Dick's Sporting Goods and Goody's. Financial performance has declined due to lower rental rates and higher expenses. The loan is interest only for its entire seven-year term. Moody's current shadow rating is Ba3, compared to Baa2 at securitization. The top three conduit loans represent 9.4% of the outstanding pool balance. The largest conduit loan is the One South Broad Street Loan, which is secured a 464,000 square foot office building located in downtown Philadelphia, Pennsylvania. The property is 97.8% occupied, compared to 92% at securitization and is anchored by Wachovia Corporation. Performance has improved due to higher revenues, stable expenses and amortization. Moody's LTV is 88.8%, compared to 99.1% at securitization. The second largest conduit loan is the 673 First Avenue Loan, which is secured by a leasehold interest in a 427,000 square foot Class B office building located in the United Nations submarket of New York City. As of October 2006 the property was 92.3% occupied, compared to 100% at securitization, however three leases are being negotiated which should return occupancy to 100%. The property is anchored by New York Presbyterian Hospital, which occupies 46% of the premises under a lease expiring in 2021. The loan sponsor is SL Green Realty Corp. Moody's LTV is 82.9%, compared to 85.7% at securitization. The third largest conduit loan is the Hamilton House Apartments Loan, which is secured by a 304-unit multifamily property located in Washington, D.C. The property is 98.7% occupied, compared to 96% at securitization. Property performance has improved due to increased revenues and stable expenses. Moody's LTV is 78.4%, compared to 85.5% at securitization. The pool's collateral is a mix of retail, office, multifamily, industrial and self storage, U.S. Government securities, mixed use and lodging. The collateral properties are located in 31 states plus Washington, D.C. The highest geographic concentrations are California, Florida, New York, Oregon and Washington, D.C. All of the loans are fixed rate. WACHOVIA BANK: Moody's Holds Low-B Ratings on Six Cert. Classes --------------------------------------------------------------- Moody's Investors Service upgraded the ratings of four classes and affirmed the ratings of 13 classes of Wachovia Bank Commercial Mortgage Trust, Commercial Mortgage Pass-Through Certificates, Series 2003-C7: * Class A-1, $375,958,966, Fixed, affirmed at Aaa * Class A-2, $418,064,000, WAC, affirmed at Aaa * Class X-C, Notional, affirmed at Aaa * Class X-P, Notional, affirmed at Aaa * Class B, $27,840,000, WAC, upgraded to Aaa from Aa2 * Class C, $11,389,000, WAC, upgraded to Aaa from Aa3 * Class D, $25,309,000, WAC, upgraded to Aa3 from A2 * Class E, $13,920,000, WAC, upgraded to A2 from A3 * Class F, $17,717,000, Fixed, affirmed at Baa1 * Class G, $12,654,000, Fixed, affirmed at Baa2 * Class H, $15,185,000, Fixed, affirmed at Baa3 * Class J, $11,389,000, WAC, affirmed at Ba1 * Class K, $6,327,000, WAC, affirmed at Ba2 * Class L, $6,327,000, WAC, affirmed at Ba3 * Class M, $5,062,000, WAC, affirmed at B1 * Class N, $5,062,000, WAC, affirmed at B2 * Class O, $3,797,000, WAC, affirmed at B3 As of the Dec. 15, 2006 distribution date, the transaction's aggregate certificate balance has decreased by approximately 3.8% to $973.7 million from $1 billion at securitization. The Certificates are collateralized by 126 mortgage loans ranging in size from less than 1% to 8.6% of the pool with the top 10 loans representing 38.7% of the pool. Four loans, representing 2.6% of the pool, have defeased and are collateralized by U.S. Government securities. The balance of the pool consists of three shadow rated loans, representing 10.3% of the pool and the conduit component, representing 87.1% of the pool. There have been no loans liquidated from the pool and there are no loans in special servicing. Twenty-one loans, representing 10.7% of the pool, are on the master servicer's watchlist. Moody's was provided with full-year 2005 and partial-year 2006 operating results for 96.2% and 93.0%, respectively, of the performing loans. Moody's loan to value ratio for the conduit component is 91% compared to 93% at securitization. Moody's is upgrading Classes B, C, D, and E due to stable pool performance, increased credit support and defeasance. The largest shadow rated loan is The Regency Square Mall Loan, which represents a 50% participation interest in a $99 million first mortgage loan. The loan is secured by the borrower's interest in a 938,000 square foot regional mall located in Jacksonville, Florida. Built in 1967 and renovated in 2001, the center is anchored by Sears, Dillard's, Belk, and J.C. Penney. Sears and Dillard's are not part of the collateral. There is also a 24-screen AMC theatre. As of September 2006, the center's in-line shop occupancy was 93.1%, compared to 80.1% at securitization. Cash flow has been stable; however, the loan has improved overall since securitization due to loan amortization. The loan sponsor is General Growth Properties, Inc. Moody's current shadow rating is A2, compared to A3 at securitization. The second largest shadow rated loan is The Columbia Place Mall Loan. The loan is secured by the borrower's interest in a 1.1 million square foot regional mall located in Columbia, South Carolina. Built in 1977 and renovated in 1988 and 2002, the center was anchored at securitization by Dillard's, Sears, J.C. Penney, Macy's, and Toys"R"Us. Since then J.C. Penney and Toys"R"Us have vacated. All of the anchors own their respective stores and are not part of the collateral. Despite the non-collateral anchor vacancies, the collateral occupancy rate is 97.8%. Increased operating expenses have impacted the loan's cash flow performance. The loan amortizes on a 25-year schedule. The loan sponsor is CBL & Associates Properties, Inc. Moody's current shadow rating is Baa3, compared to Baa2 at securitization. The third largest shadow rated loan is The Downtown Short Pump Loan. The loan is secured by a 126,055 square foot shopping center located in Richmond, Virginia. Built in 2001, tenants include Barnes & Noble, and Regal Cinemas. As of September 2006, the center's occupancy was 92.6%, compared to 100% at securitization. Cash flow is down due to the occupancy decline and increased expenses. The loan is interest only throughout the term. Moody's current shadow rating is Baa3, compared to Baa2 at securitization. The top three conduit loans represent 17.2% of the pool. The largest conduit loan is the Chelsea Market Loan, which represents a 50% participation interest in a $168.2 million first mortgage loan. The Class B loft-style office building is located in the Chelsea submarket of New York City. The multi tenant building was built in phases between 1882 and 1930, and renovated between 1996 and 1999. The ground floor consists of retail space that houses several grocers and restaurants. Floors two through eight are utilized mainly for office use. As of October 2006 the property was 99.4% leased, compared to 98% at securitization. The largest tenant is Oxygen Media. Cash flow has improved due to greater rental income. The loan sponsor is The Jamestown Companies. Moody's LTV is 82.7%, compared to 85% at securitization. The second largest conduit loan is the Columbus Park Crossing Loan. The loan is secured by a 638,096 square foot retail center located in Columbus, Georgia. Built in 2002, tenants include Sears, Toys"R"Us, Circuit City, and Bed Bath & Beyond. As of August 2006 the center was 98.3% occupied, compared to 97% at securitization. Cash flow has improved due to greater rental income. The loan sponsor is Ben Carter Companies, LLC. Moody's LTV is 93.2%, compared to 97.2% at securitization. The third largest conduit loan is the Santa Clara County Office Loan, which is secured by a 152,400 square foot Class A office building located in, San Jose, California. Built in 2001, the building has been leased to Santa Clara County since 2002. The loan was interest only for the first two years of the loan term but now amortizes on a 360-month schedule. Moody's LTV is 97.2%, compared to 98.5% at securitization. The pool's collateral is a mix of retail, multifamily and manufactured housing, office and mixed use, U.S. Government securities, industrial and self storage and land. The collateral properties are located in 26 states. The top five state concentrations are California, New York, Illinois, Florida and North Carolina. All of the loans are fixed rate. WELWIND ENERGY: Posts CDN$526,248 Net Loss in Third Quarter ----------------------------------------------------------- Welwind Energy Interantional Corp., fka Vitasti Inc., reported a CDN$526,248 net loss on CDN$33,758 of revenues for the quarter ended Sept. 30, 2006, compared with a CDN$680,728 net loss on CDN$69,671 of revenues for the same period in 2005. The decrease in net loss is primarily due to a higher gross profit of CDN$32,614 in the current quarter, compared with CDN$29,786 in the prior quarter, and lower general and administrative expenses of CDN$562,647, compared with CDN$710,514 in the prior quarter. At Sept. 30, 2006, the company's balance sheet showed CDN$2.7 million in total assets, CDN$644,576 in total liabilities, and CDN$2.1 million in total stockholders' equity. Full-text copies of the company's consolidated financial statements for the quarter ended Sept. 30, 2006, are available for free at http://researcharchives.com/t/s?179b Acquisition of Welwind Energy On Aug. 17, 2006, the Vitasti closed a share exchange agreement with Welwind Energy International Corporation, a private Canadian company, to acquire 100% of the outstanding and issued share capital of Welwind Energy in exchange for 11,000,000 restricted shares of the company. Welwind Energy was founded in 2005 to build, own and operate wind farms on an international scale. During the period ended Sept. 30, 2006, Vitasti advanced CDN$751,776 to Welwind Energy as a non-interest bearing loan towards the development of its business. On Oct. 26, 2006, the company filed in the office of the Secretary of State for the State of Delaware a certificate of amendment to the company’s certificate of incorporation, causing the name of the company to be changed from Vitasti Inc. to Welwind Energy International Corp. Going Concern Doubt Manning Elliott LLP, in Vancouver, Canada, expressed substantial doubt about Vitasti Inc.'s ability to continue as a going concern after auditing the company's financial statements for the year ended Dec. 31, 2005. The auditing firm pointed to the company's working capital deficiency, significant operating losses from operation, and the company's need for additional equity/debt financing to sustain operations. About Welwind Energy Welwind Energy International, fka Vitasti Inc., (OTCBB: WWEI) -- http://www.welwind.com/-- was founded in 2005 to build, own and operate wind farms on an international scale. Its current projects include bridging the North America-China link by building wind farms in China along the South China Sea. Current developments include wind farm projects in Zhanjiang and Yangxi, Guangdong, China. WOODWIND & BRASSWIND: Files Schedules of Assets and Liabilities --------------------------------------------------------------- Dennis Bamber Inc. dba The Woodwind & the Brasswind delivered its Schedules of Assets and Liabilities with the U.S. Bankruptcy Court for the Northern District of Indiana disclosing: Name of Schedule Assets Liabilities ---------------- ------ ----------- A. Real Property $0 B. Personal Property $45,750,325 C. Property Claimed as Exempt D. Creditors Holding $33,744,937 Secured Claims E. Creditors Holding $1,191,431 Unsecured Priority Claims F. Creditors Holding $24,395,257 Unsecured Nonpriority Claims ----------- ----------- Total $45,750,325 $59,331,625 Headquartered in South Bend, Indiana, The Woodwind & the Brasswind -- http://www.wwbw.com/-- sells musical instruments and accessories. The Company filed for chapter 11 protection on Nov. 24, 2006 (Bankr. N.D. Ind. Case No. 06-31800). Chad H. Gettleman, Esq., Henry B. Merens, Howard L. Adelman, Esq., and Nathan Q. Rugg, Esq., at Adelman, Gettleman, Ltd., represent the Debtor in its restructuring efforts. The Official Committee of Unsecured Creditors appointed in the Debtors' cases has selected James M. Carr, Esq., at Baker & Daniels LLP as its counsel. When the Debtors filed for protection from their creditors, they estimated assets and debts between $1 million and $100 million. XERIUM TECHNOLOGIES: Amends Senior Credit Facility -------------------------------------------------- Xerium Technologies Inc. has secured an amendment to its existing senior credit facility and entered into an agreement with certain shareholders with respect to the company’s contemplated dividend reinvestment plan. The amendment to the credit facility includes these changes: * A loosening of the interest coverage ratio covenant from the fourth quarter of 2006 through 2012 and the leverage ratio covenant from 2007 through 2012. * Changes to the pre-dividend free cash flow test to limit the amount of quarterly dividends that Xerium may pay in 2007 to 11.25% of pre-dividend free cash flow for the preceding four quarters and to clarify that commencing Dec. 31, 2007 the test limits the amount of quarterly dividends that Xerium may pay to 18.75% of pre-dividend free cash flow for the preceding four quarters. * Dividends reinvested in newly issued or treasury shares of common stock of the Company under a dividend reinvestment plan will not be treated as dividends for the purpose of the pre-dividend free cash flow test and will not reduce excess cash for the purposes of the senior credit facility. * The amount to which the balance on the Company’s revolving credit facility must be reduced to for 30 consecutive days, during each year, is increased from zero to $20 million. * Changes in specially permitted capital expenditures for Brazil, such that the permitted amounts are $4.6 million for 2006, $8.2 million for 2007 and $3.8 million for 2008. * Additionally, the permitted use of these capital expenditures is altered to include all production capacity expansion projects in Brazil. * The applicable margin on the revolving and term loans is increased by 0.25% and subject to a further increase of an additional 0.25% in the event that the indebtedness under the senior credit facility is rated lower than B1 by Moody’s or lower than B+ by Standard & Poor’s. The company paid an amendment fee of $1,420,139.40 in connection with the amendment. Xerium also reported that it expects to establish a dividend reinvestment plan (DRIP) during the first quarter of 2007. "We are pleased to have secured additional financial flexibility through the amendment to our senior credit facility and to have received the commitment from the Apax entities to reinvest cash dividends received in 2007 in our common stock through a dividend reinvestment plan as described above" Thomas Gutierrez, Xerium’s Chief Executive Officer, said. Certain investment entities managed directly or indirectly by Apax Europe IV GP Co Ltd, which entities collectively held 22,897,712 shares of common stock of Xerium or approximately 52.3% of the outstanding common stock of the Company as of Dec. 21, 2006, have committed to Xerium that, upon the establishment of the dividend reinvestment plan, they will participate in the plan through Dec. 31, 2007 at a level such that at a minimum 50% of each cash dividend payable on the Company’s common stock, including shares not held by the Apax entities, is reinvested in the common stock of the Company through the dividend reinvestment plan, provided that the Apax entities are not required to reinvest more than 100% of the cash dividends payable to them with respect to such dividend declaration. "While we believe that the credit facility amendment and the commitment of the Apax entities improve our ability to pay dividends in 2007 under the credit facility" Mr. Gutierrez added, "we expect to evaluate our dividend policy very closely each quarter, as we move forward, to ensure that key growth investments and our ability to continue to reduce debt are treated as main priorities." Headquartered in Westborough, Massachusetts, Stowe Woodward, a unit of Xerium Technologies, Inc., (NYSE: XRM) supplies roll covers, bowed rolls and manufacturing services for the pulp and paper industry. Stowe Woodward has manufacturing operations around the world. * * * Moody's Investors Service changed the outlook on Xerium Technologies, Inc.'s ratings to negative from stable, and affirmed the company's corporate family; Guaranteed senior secured term loan B; and Guaranteed senior secured revolving credit facility ratings at B1. The change in outlook to negative reflects Xerium's weaker than expected operating performance primarily due to production inefficiencies in North America and delays in achieving benefits from cost reduction initiatives. Moody's believes the impact of these issues, coupled with a difficult pricing environment for roll covers and to a lesser extent clothing products, will continue to negatively affect operating performance over the intermediate term. * Chapter 11 Cases with Assets & Liabilities Below $1,000,000 ------------------------------------------------------------- Recent chapter 11 cases filed with assets and liabilities below $1,000,000: In re Sam Properties Chester, LLC Bankr. E.D. Va. Case No. 06-33547 Chapter 11 Petition filed December 5, 2006 See http://bankrupt.com/misc/vaeb06-33547.pdf In re Sam Properties Petersburg, LLC Bankr. E.D. Va. Case No. 06-33545 Chapter 11 Petition filed December 5, 2006 See http://bankrupt.com/misc/vaeb06-33545.pdf In re 178 Kneeland Street Realty, LLC Bankr. D. Mass. Case No. 06-14741 Chapter 11 Petition filed December 13, 2006 See http://bankrupt.com/misc/mab06-14741.pdf In re B.F. Enterprise, Inc. Bankr. D.N.J. Case No. 06-26318 Chapter 11 Petition filed December 13, 2006 See http://bankrupt.com/misc/njb06-26318.pdf In re Bedroom Gallery, Inc. Bankr. D.N.J. Case No. 06-22528 Chapter 11 Petition filed December 13, 2006 See http://bankrupt.com/misc/njb06-22528.pdf In re JAF, Inc. Bankr. D.S.C. Case No. 06-05779 Chapter 11 Petition filed December 13, 2006 See http://bankrupt.com/misc/scb06-05779.pdf In re Quality Medical Equipment Inc. Bankr. D.P.R. Case No. 06-05041 Chapter 11 Petition filed December 13, 2006 See http://bankrupt.com/misc/prb06-05041.pdf In re Tatical Supply LLC Bankr. M.D. Ala. Case No. 06-31660 Chapter 11 Petition filed December 13, 2006 See http://bankrupt.com/misc/alb06-31660.pdf In re Abbey Carpet of New London Bankr. D. Conn. Case No. 06-32247 Chapter 11 Petition filed December 14, 2006 See http://bankrupt.com/misc/ctb06-32247.pdf In re 13653 Roosevelt Inc. Bankr. E.D.N.Y. Case No. 06-44921 Chapter 11 Petition filed December 15, 2006 See http://bankrupt.com/misc/nyeb06-44921.pdf In re Accuware Inc. Bankr. M.D. Fla. Case No. 06-07197 Chapter 11 Petition filed December 15, 2006 See http://bankrupt.com/misc/flmb06-07197.pdf In re Bishop Development Corp. Bankr. W.D. Tex. Case No. 06-52607 Chapter 11 Petition filed December 15, 2006 See http://bankrupt.com/misc/txwb06-52607.pdf In re Food & Lifestyles Media, LLC Bankr. D. Ariz. Case No. 06-04238 Chapter 11 Petition filed December 15, 2006 See http://bankrupt.com/misc/azb06-04238.pdf In re Fox & Fox CPAS, P.C. Bankr. D. Ariz. Case No. 06-04230 Chapter 11 Petition filed December 15, 2006 See http://bankrupt.com/misc/azb06-04230.pdf In re John F. Benson Bankr. W.D. Penn. Case No. 06-26380 Chapter 11 Petition filed December 15, 2006 See http://bankrupt.com/misc/pawb06-26380.pdf In re Lawrence & Sons, Inc. Bankr. N.D. Ohio Case No. 06-52742 Chapter 11 Petition filed December 15, 2006 See http://bankrupt.com/misc/ohnb06-52742.pdf In re MKDD, Inc. Bankr. M.D. Fla. Case No. 06-07181 Chapter 11 Petition filed December 15, 2006 See http://bankrupt.com/misc/flmb06-07181.pdf In re Union Cinema Corporation Bankr. W.D. Ark. Case No. 06-72943 Chapter 11 Petition filed December 15, 2006 See http://bankrupt.com/misc/arwb06-72943.pdf In re Duke Heating Oil, Inc. Bankr. M.D. Penn. Case No. 06-02931 Chapter 11 Petition filed December 18, 2006 See http://bankrupt.com/misc/pamb06-02931.pdf In re Josab Corporation Bankr. W.D. Mich. Case No. 06-06590 Chapter 11 Petition filed December 18, 2006 See http://bankrupt.com/misc/miwb06-06590.pdf In re Modular Furniture Group, Inc. Bankr. E.D. Va. Case No. 06-11775 Chapter 11 Petition filed December 18, 2006 See http://bankrupt.com/misc/vaeb06-11775.pdf In re Nexgenix Inc. Bankr. C.D. Calif. Case No. 06-12391 Chapter 11 Petition filed December 18, 2006 See http://bankrupt.com/misc/cacb06-12391.pdf In re PowerJam, LLC Bankr. E.D.N.Y. Case No. 06-73331 Chapter 11 Petition filed December 18, 2006 See http://bankrupt.com/misc/nyeb06-73331.pdf ********* 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 $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. 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/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* 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 is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. Marie Therese V. Profetana, Robert Max Victor M. Quiblat II, Shimero R. Jainga, Joel Anthony G. Lopez, Melvin C. Tabao, Rizande B. Delos Santos, Cherry A. Soriano-Baaclo, Ronald C. Sy, Jason A. Nieva, Lucilo M. Pinili, Jr., Tara Marie A. Martin, and Peter A. Chapman, Editors. Copyright 2006. All rights reserved. ISSN: 1520-9474. 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 subscription rate is $725 for 6 months 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 $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission ***